SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549


                              FORM 10-K405/A

                              AMENDMENT NO. 1


             Filed pursuant to Section 12, 13, or 15(d) of the
                      Securities Exchange Act of 1934



               CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
           -----------------------------------------------------
          (Exact name of registrant as specified in its charter)


                                            IRS Employer Identification    

Commission File No. 0-16111                       No. 36-3314827


     The undersigned registrant hereby amends the following sections of its
Report for the year ended December 31, 1997 on Form 10-K405 as set forth in
the pages attached hereto:

                                  PART II

       Item 7.    Management's Discussion and Analysis of 
                  Financial Condition and Results of Operations.  
                  Pages 14 through 23

       Item 8.    Financial Statements and Supplementary Data.
                  Pages 24 through 79


     Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.



                              CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

                              By:   JMB Realty Corporation
                                    Corporate General Partner



                                         GAILEN J. HULL
                                    By:  Gailen J. Hull
                                         Senior Vice President



Dated:  April 24, 1998




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ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

     As a result of the public offering of Interests as described in
Item 1, the Partnership had approximately $385,000,000 (after deducting
selling expenses and other offering costs) with which to make investments
in income-producing commercial and residential real property, to pay legal
fees and other costs (including acquisition fees) related to such
investments and to satisfy working capital requirements.  A portion of the
proceeds was utilized to acquire the properties described in Item 1 above.

     During 1996 some of the Holders of Interests in the Partnership
received from an unaffiliated third party unsolicited offers to purchase up
to 4.68% of the Interests in the Partnership at between $40 and $50 per
Interest.  The Partnership recommended against acceptance of these offers
on the basis that, among other things, the offer price was inadequate.  In
June 1996 such offers expired.  As of the date of this report, the
Partnership is aware that 1.92% of the Interests have been purchased by
such unaffiliated third parties either pursuant to such tender offers or
through negotiated purchases.  Another unaffiliated third party has
recently made an unsolicited offer to purchase up to 20,000 Interests at
$30 per Interest.  Such offer is scheduled to expire at the end of April
1998.  It is possible that other offers for Interests may be made by
unaffiliated third parties in the future, although there is no assurance
that any other third party will commence an offer for Interests, the terms
of any such offer or whether any such offer, if made, will be consummated,
amended or withdrawn.  The board of directors of JMB Realty Corporation
("JMB"), the corporate general partner of the Partnership, has established
a special committee (the "Special Committee") consisting of certain
directors of JMB to deal with all matters relating to tender offers for
Interests in the Partnership, including any and all responses to such
tender offers.  The Special Committee has retained independent counsel to
advise it in connection with any potential tender offer for Interests and
has retained Lehman Brothers Inc. as financial advisor to assist the
Special Committee in evaluating and responding to any additional potential
tender offers for Interests.  As of the date of this report, the Special
Committee has not made any recommendation in regard to the existing offer
to purchase Interests at $30 per Interest.

     At December 31, 1997, the Partnership and its consolidated ventures
had cash and cash equivalents of approximately $25,000,000.  Such funds and
certain escrowed amounts (which are restricted as to their use) are
available for the payment of the Partnership's share of leasing costs and
capital improvements for its investment properties as well as for future
distributions to partners, working capital requirements, including the
Partnership's share of potential future deficits and capital improvements
at certain of the Partnership's investment properties as discussed in the
Notes.  In February 1998, the Partnership made a sales distribution
totalling $4,436,037 (approximately $10 per Interest) out of sale proceeds
(primarily related to the sale of the RiverEdge Place Building).  The
Partnership currently has adequate cash and cash equivalents to maintain
the operations of the Partnership.  However, the Partnership has taken
steps to preserve its working capital by suspending operating distributions
(except for certain withholding requirements) to the Holders of Interests
and the General Partners effective as of the first quarter of 1992.  In
addition, the General Partners and their affiliates have previously
deferred management and leasing fees payable to them in an aggregate amount
of approximately $2,650,000 (approximately $6 per Interest) relating to the
Partnership's investment properties, which amount includes the
Partnership's proportionate share of such fees for its consolidated and
unconsolidated entities.  Such fees do not bear interest and are expected
to be paid in the future.



<PAGE>


     The Partnership and its consolidated ventures have currently budgeted
in 1998 approximately $866,000 for tenant improvements and other capital
expenditures.  The Partnership's share of such items and its share of such
similar items for its unconsolidated ventures in 1998 is currently budgeted
to be approximately $1,999,000.  Actual amounts expended in 1998 may vary
depending on a number of factors including actual leasing activity, results
of property operations, liquidity considerations and other market
conditions over the course of the year.  The Partnership may also use a
portion of its working capital to pay a portion of the costs for a possible
refinancing or modification of the loan secured by the Piper Jaffray Tower
(discussed below).  The source of capital for such items and for both
short-term and long-term future liquidity requirements is expected to be
primarily through net cash generated by the Partnership's investment
properties, and through the sale of such investments, as well as cash and
certain escrowed accounts currently held.  However, most of the
Partnership's investment properties are either restricted as to their use
of excess cash flow by escrow agreements negotiated pursuant to loan
modifications or are currently experiencing deficits.  In such regard,
reference is made to the Partnership's property specific discussions below
and also to the Partnership's disclosure of certain property lease
expirations in Item 6.  Due to the property specific concerns discussed
below, the Partnership currently considers only the 900 Third Avenue,
California Plaza and NewPark Mall investment properties to be potential
significant sources of future cash generated from sales.

     PIPER JAFFRAY TOWER

     Occupancy of the building at the end of the fourth quarter of 1997 was
93%.

     The property is subject to a mortgage loan in the original principal
amount of $100,000,000, of which approximately $96,127,000 is outstanding
as of December 31, 1997.  The lender is essentially entitled to all
operating cash flow.  In addition to fixed interest on the mortgage notes
secured by the Piper Jaffray Tower, contingent interest is payable in
annual installments on April 1 computed at 50% of gross receipts, as
defined, for each fiscal year in excess of $15,200,000.  No such contingent
interest was due for 1995, 1996 or 1997.  In addition, to the extent the
investment property generates cash flow after payment of the fixed interest
on the mortgage, contingent interest, if any, leasing and capital costs,
and 25% of the ground rent, such amount will be paid to the lender as a
reduction of the principal balance of the mortgage loan.  The excess cash
flow payments remitted to the lender for 1995 and 1996 totalled $464,178
and $741,627, respectively.  During 1997, excess cash flow generated under
this agreement was $385,523 which is expected to be remitted to the lender
during the second quarter of 1998.

     In addition, the mortgage loan provides that upon sale or refinancing,
the lender is entitled to prepayment fees as well as a significant level of
proceeds in excess of the then unpaid principal balance prior to
JMB/Piper's receipt of proceeds.  While the loan modification provides
JMB/Piper with an opportunity to retain an ownership position in the
property, under the current terms of the modified debt, there must be
significant additional improvement in current market and property operating
conditions resulting in a substantial increase in the value of the property
before JMB/Piper can share in sale or refinancing proceeds.  Currently,
Piper generates enough operating cash flow to meet the required debt
service payments.  However, Piper may not be able to pay the required debt
service over the next several years as a result of the Popham Haik
("Popham") and Piper Jaffray, Inc. ("PJI") situations discussed below. 
JMB/Piper will not commit additional capital to Piper unless, among other
things, it believes that upon sale of the property it will receive a return
of such funds and a reasonable rate of return thereon.  If a funding
requirement arises and none of the Piper partners contribute the required
capital, the lender would likely take title to the property.  Such
disposition of the Property would result in JMB/Piper, and therefore the
Partnership, recognizing a significant amount of gain for financial
reporting and Federal income tax purposes with no corresponding
distributable proceeds.

     During 1997, JMB/Piper, on behalf of Piper, explored refinancing
alternatives with the lender.  The lender has indicated that it is not
willing to accept a discounted payoff of its loan, which would be necessary
to refinance it.  However, JMB/Piper intends to pursue further discussions
with the lender concerning possible refinancing and/or loan modification
alternatives.  Any refinancing or modification of the loan is expected to
require a payment by Piper to reduce the outstanding principal and/or
accrued interest on the loan.  However, the Partnership will not contribute
its share of funds for such purpose unless, among other things, the
Partnership believes that upon sale of the property the Partnership will
receive a return of such funds and a reasonable rate of return thereon. 
There is no assurance that any refinancing or modification of the loan will
be obtained.

     On a monthly basis, Piper deposits the property management fee into an
escrow account to be used (including interest earned thereon) for future
leasing costs to the extent cash flow is not sufficient to cover such
items.  To date, no escrow funds have been required to be used for leasing
costs.  At December 31, 1997, the balance of such escrow account totaled
approximately $4,722,000.  The manager of the property (which was an
affiliate of the Corporate General Partner through November 1994) has
agreed to defer receipt of its management fee until a later date.  As of
December 31, 1997, the manager has deferred approximately $3,852,000
($1,839,000 of which represents deferred fees due to affiliates through
November 1994, of which $919,500 is the Partnership's share) of management
fees.

     During the second quarter of 1997, Piper executed an amendment to the
existing lease agreement with Popham.  Under the terms of the agreement,
Popham immediately surrendered approximately 57,000 square feet of leased
space leaving approximately 47,000 square feet occupied by Popham.  Popham
continued to pay rent and all charges in accordance with its original lease
on the remaining and give-back space through July 31, 1997.  Popham's rent
on the remaining square footage increased to a market rate effective on
August 1, 1997.  There was no adjustment to the lease expiration date
(January, 2003) on the remaining space.  Piper has released approximately
23,000 square feet of the Popham give-back space.  During the third
quarter, Popham informed Piper that effective in November 1997, it would
cease operations as Popham and consolidate with another law firm, Hinshaw &
Culberson ("Hinshaw").  Popham has claimed that at that time, its lease
with the building would terminate and the building would have to look to
the net assets of the disbanded Popham firm in satisfaction of the
remaining lease liability.  In December, Piper signed a non-binding letter
of intent with Hinshaw to lease 31,920 square feet of the Popham space for
a term of five years, commencing January 1, 1998, at a market rental rate
which exceeds Popham's modified rate which became effective in August 1997.

Popham had paid its modified rent through the end of 1997.  Commencing in
January 1998, Hinshaw began paying rent in accordance with the letter of
intent.  In addition, assuming a lease is finalized with Hinshaw in
accordance with the letter of intent, Piper has agreed to terminate
Popham's lease effective December 31, 1997 with no further consideration. 
There are no assurances that Piper will be successful in finalizing this
lease transaction or that it will be compensated in any way for the
termination of Popham's lease.  As a result, the property's operating cash
flow has been and is expected to continue to be adversely affected due to
increased vacancy and leasing costs associated with releasing a portion of
the space given back or vacated by Popham.

     PJI has leased an additional 22,712 square feet of space currently
under lease to another tenant with a lease expiration date of December 31,
1997.  PJI's lease start date will be January 1, 1998 with a lease
expiration date coterminous with the remainder of its space on March 31,
2000.  Throughout 1997, Piper discussed an early renewal with PJI which
(after the expansion discussed above) occupies 332,823 square feet or
approximately 46% of the building's rentable square feet, with a lease
expiration date at March 31, 2000.  Piper and PJI were unable to come to
terms and during the fourth quarter of 1997, PJI announced that it would be
moving to a new building (to be built in Minneapolis) upon expiration of
its existing lease in 2000.
     As of September 30, 1997, the JMB/Piper venture has classified the
remaining assets as held for sale or disposition.  These assets will
therefore no longer be subject to continued depreciation.

     160 SPEAR STREET BUILDING

     In January 1996, the Partnership, through the joint venture,
transferred title to the lender in full satisfaction of the loan secured by
the property.  Reference is made to the Notes for a description of such
transfer.

     JMB/125

     In October 1995, the makers of the $5 million promissory note payable
to JMB/125 filed for protection from creditors under Chapter 11 of the
Bankruptcy Code.  Pursuant to the bankruptcy reorganization of the makers
of the note, JMB/125, as an unsecured creditor, received limited
partnership interests and a convertible note interest in a reorganized
entity that has majority or controlling interests in six office buildings
in New York, New York and Boston, Massachusetts.  The assigned value, as of
the bankruptcy confirmation date, of the interests and note received by
JMB/125 was approximately $400,000.  The convertible note was fully
reserved due to the uncertainty of the realizable value of the note.  In
June 1997, the convertible note receivable for $297,000 was collected on by
JMB/125 resulting in the recognition of gain, of which the Partnership's
share is $174,654.

     260 FRANKLIN (disposed 1/2/98)

     The office market in the Financial District of Boston remains
competitive due to new office building developments and layoffs, cutbacks
and consolidations by financial service companies.  The effective rental
rates achieved upon re-leasing have been substantially below the rates
which were received under the previous leases for the same space.  The 260
Franklin Street Building operated at a deficit for 1997 and was expected to
do so for the next several years.

     In December 1991, 260 Franklin, the affiliated joint venture, reached
an agreement with the lender to modify the long-term mortgage note secured
by the 260 Franklin Street Building.  The loan modification required that
the affiliated joint venture establish an escrow account for excess cash
flow from the property's operations (computed without a deduction for
property management fees and leasing commissions) to be used to cover the
cost of capital and tenant improvements and lease inducements, which are
the primary components of the anticipated operating deficits noted above,
with the balance, if any, of such escrowed funds available at the scheduled
or accelerated maturity to be used for the payment of principal and
interest due to the lender.  Beginning January 1, 1992, 260 Franklin began
escrowing the payment of property management fees and lease commissions
owed to an affiliate of the Corporate General Partner pursuant to the terms
of the debt modification, which is more fully described in the Notes.

     The long-term mortgage loan in the original principal amount of
approximately $75,000,000 plus accrued and deferred interest matured
January 1, 1996.  260 Franklin, as of such date, began submitting the net
operating cash flow of the property to the lender while seeking an
extension or refinancing of the loan.  Concurrent with such lender
negotiations, 260 Franklin also began investigating market conditions to
determine whether conditions were favorable for selling the property. 
However, it was determined that conditions were not favorable and the
property continued to be held as investment property.  The joint venture
reached agreements with the lender for extensions of the mortgage loan
through January 1, 1997 and again through January 1, 1998.  In addition to
substantially the same terms as were in effect prior to such extensions,
the agreement required that the property submit net operating cash flow of
the property to the lender.  In addition, the lender indicated that it
would not extend the loan beyond January 1, 1998.  260 Franklin and the
Partnership believed that the value of the office building was less than
the mortgage loan, and the Partnership did not intend to expend any
additional funds of its own on the property.  Accordingly, 260 Franklin
began negotiations with the lender and an unaffiliated third party
regarding the sale of the property to the unaffiliated third party.  Due to
the lender negotiations described above, the property was classified as
held for sale or disposition as of July 1, 1997, and therefore, was not
subject to continued depreciation as of that date.

     Effective January 1, 1998, 260 Franklin entered into a loan
modification agreement with the lender in which the lender waived accrued
unpaid interest owed for the period prior to January 1, 1998, which was
approximately $17,200,000.  On January 2, 1998, 260 Franklin disposed of,
through a trust, the land, building and related improvements of the 260
Franklin Street Building.  260 Franklin transferred title to the land,
building and improvements, and all other assets and liabilities related to
the property in consideration of a discharge of the mortgage loan and
receipt of $200 in cash.  The current portion of long-term debt of
$92,117,086 reflected in the 1997 consolidated balance sheet represents the
mortgage loan secured by the 260 Franklin Street office building.  260
Franklin expects to recognize in 1998 a gain on sale of approximately
$23,200,000, in part as a result of previous impairment losses recognized
by 260 Franklin in 1996 aggregating $17,400,000, and an extraordinary gain
on forgiveness of indebtedness of approximately $17,200,000 for financial
reporting purposes, all of which will be included in the consolidated
financial statements of the Partnership.  In addition, 260 Franklin expects
to recognize a gain of approximately $25,200,000 for Federal income tax
reporting purposes, of which the Partnership's share is approximately
$17,600,000, with no distributable proceeds in 1998.  260 Franklin and the
Partnership have no future liability for any representations, warranties or
covenants to the purchaser as a result of the sale.

     900 THIRD AVENUE BUILDING

     Occupancy of this building at the end of the fourth quarter of 1997
was 97%.

     Progress Partners is currently in negotiations with the building's
major tenant, Schulte, Roth & Zabel (120,991 square feet with a lease
expiration date of May 31, 2000), for an early renewal and expansion of its
lease.  There are no assurances that an early renewal or expansion of this
tenant's lease will be achieved.

     Pursuant to the extension on the mortgage loan, net cash flow (as
defined) is paid into an escrow account controlled by the lender.  The
escrow account, including interest earned thereon, will be used by Progress
Partners for payment of property taxes and releasing costs associated with
leases which expire in 1999 and 2000 (approximately 50% of the building
including the Schulte, Roth & Zabel lease discussed above).  The remaining
proceeds in this escrow plus interest earned thereon, if any, will be
released to Progress Partners once 90% of such space has been renewed or
released.  During 1997, approximately $9,423,000 has been deposited into
escrow from net cash flow from property operations.  Additionally,
approximately $5,173,000 has been withdrawn from the escrow account for
payment of real estate taxes in 1997.

     JMB/900 is currently involved in litigation.  Recent discussions
involved a settlement whereby JMB/900 would purchase all the unaffiliated
venture partner interests in Progress Partners.  In December 1997, two of
the unaffiliated venture partners filed for bankruptcy which has stalled
settlement discussions.  A more detailed discussion of these situations is
contained in the Notes.  There are no assurances that a settlement will be
finalized on this or any other terms.  The Partnership will not commit
capital to the purchase of the unaffiliated venture partner interests
unless, among other things, it believes that upon sale of the property, the
Partnership will receive a return of such funds and a reasonable rate of
return thereon.




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     WELLS FARGO CENTER - SOUTH TOWER

     The Wells Fargo Center ("South Tower") operates in the downtown Los
Angeles office market, which has been extremely competitive over the last
several years with the addition of several new buildings that has resulted
in a vacancy rate of approximately 25% in the marketplace.  The Partnership
expects that the competitive market conditions in Southern California will
have an adverse affect on the building through lower effective rental rates
achieved on re-leasing of existing space which expires or is given back
over the next several years.  In addition, new leases are expected to
require expenditures for lease commissions and tenant improvements prior to
occupancy.  This anticipated decline in rental rates, the anticipated
increase in re-leasing time and the costs upon releasing will result in a
decrease in cash flow from operations over the near term.

     During 1996, the Partnership, the joint venture partner, and the
lenders reached an agreement to modify the mortgage note and the promissory
note.  In conjunction with the note modifications, Maguire/Thomas Partners
- South Tower LLC was converted to a limited liability company with
members' interests in the same ratio as the prior venture ownership
interests.  The conversion of the Partnership's interest to a member's
interest in a limited liability company eliminates any potential additional
obligation of the Partnership in the future to provide additional funds
under the previous joint venture agreement.  As a result, previously
recognized losses of $10,620,944 have been reversed and the Partnership's
1997 share of income (approximately $286,000) has not been recognized as
such amount is not considered realizable.  Since the terms of the
agreements make it unlikely that the Partnership would recover any
incremental investment, the Partnership has decided not to commit any
significant additional amounts to the property.  Reference is made to the
Notes for a further description of these events.

     RIVEREDGE PLACE BUILDING

     On December 23, 1997, the Partnership sold the land and related
improvements of the RiverEdge Place office building for $26,600,000 (before
selling costs and retirement of indebtedness of approximately $23,000,000).

Reference is made to the Notes for a further description of such
transaction.

     21900 BURBANK BUILDING

     In March 1996, the lender realized upon its security and took title to
the property in full satisfaction of the loan secured by the property. 
Reference is made to the Notes for a further description of such transfer.

     NEWPARK ASSOCIATES

     As a result of the acquisition by Federated Department Stores of the
company which owned the Emporium Capwell store at NewPark Mall, Federated,
which also owns the Macy's store at NewPark, approached the NewPark joint
venture regarding a sale of the Emporium building.  Simultaneously with its
negotiations to acquire the Emporium Capwell building, the NewPark joint
venture negotiated to sell the building to a national retail store owner. 
The transactions closed on April 22, 1997 and the joint venture received a
lease termination fee of approximately $2,187,000, of which the
Partnership's share was approximately $984,000.

     CALIFORNIA PLAZA

     The Partnership modified the loan secured by the property on
December 22, 1993.  As more fully discussed in the Notes, the loan
modification reduced the pay rate of monthly interest only payments to 8%
per annum, effective February 1993, extended the loan maturity date to
January 1, 2000, and requires the net cash flow of the property to be
escrowed (as defined) with a portion to be used to fund a reserve account. 
The venture also funded $500,000 into the reserve account as required by


<PAGE>


the modification agreement.  This reserve account (including interest
earned thereon) is to be used to fund future costs, including tenant
improvements, leasing commissions and capital improvements, approved by the
lender (none used as of December 31, 1997).  The property has been
classified as held for sale or disposition as of December 31, 1996, and
therefore, has not been subject to continued depreciation.

     SPRINGBROOK SHOPPING CENTER

     As a result of the non-payment of debt service, the lender realized
upon its security and took title to the property in January 1997 in full
satisfaction of the loan secured by the property.  Reference is made to the
Notes for a further description of such transaction.

     WOODLAND HILLS APARTMENTS

     On May 22, 1996, the Partnership sold the Woodland Hills apartment
complex to an unaffiliated third party for $12,225,000 (before selling
costs and retirement of indebtedness of approximately $8,175,000). 
Reference is made to the Notes for a further description of such event.

     VILLAGES NORTHEAST

     On May 7, 1996, the Partnership, through a joint venture, sold the
Dunwoody Crossing Phases I, II and III apartment complex to an unaffiliated
third party for $47,000,000 (before selling costs and retirement of
indebtedness of approximately $30,900,000).  Reference is made to the Notes
for a further description of such event.

     GENERAL

     Certain of the Partnership's investments have been made through joint
ventures.  There are certain risks associated with the Partnership's
investments made through joint ventures, including the possibility that the
Partnership's joint venture partners in an investment might become unable
or unwilling to fulfill their financial or other obligations, or that such
joint venture partners may have economic or business interests or goals
that are inconsistent with those of the Partnership.

     The borrowings of the Partnership and its ventures consist of separate
non-recourse mortgage loans secured by the investment properties and
individually are not obligations of the entire investment portfolio. 
However, for any particular investment property that is incurring deficits
or for which the existing financing has matured, the Partnership or its
ventures may seek a modification or refinancing of existing indebtedness
and, in the absence of a satisfactory debt modification or refinancing, may
decide, in light of the then existing and expected future market conditions
for such investment property, not to commit additional funds to such
investment property.  This would likely result in the Partnership no longer
having an ownership interest in such property and would generally result in
net gain to the Partnership for financial reporting and Federal income tax
purposes with no corresponding distributable proceeds.

     Although the Partnership expects to distribute sales proceeds from the
disposition of certain of the Partnership's remaining assets, aggregate
distributions of sale and refinancing proceeds received by Holders of
Interest over the entire term of the Partnership will be substantially less
than one-fourth of their original investment.  However, in connection with
sales or other dispositions (including transfers to lenders) of properties
(or interests therein) owned by the Partnership or its joint ventures, the
Holders of Interests will be allocated gain for Federal income tax
purposes, regardless of whether any proceeds are distributable from such
sales or other dispositions.  In particular, the Piper Jaffray Tower and
Wells Fargo Center (South Tower) investment properties continue to suffer
from the effects of the high levels of debt secured by each property and
the real estate recession, and provide no cash flow to the Partnership. 
While loan and joint venture modifications have been obtained that enable


<PAGE>


the Partnership to retain an ownership interest in these properties, it is
currently unlikely under existing arrangements that the Partnership will
receive significant proceeds from operations or sales of these properties. 
However, upon disposition, the Partnership, and therefore, the Holders of
Interests will recognize a significant amount of taxable income with no
distributable proceeds.  For certain Holders of Interests, such taxable
gain may be offset by their suspended passive activity losses (if any). 
Each Holder's tax consequences will depend on such Holder's own tax
situation.

     The Partnership continues to conserve its working capital.  All
expenditures are carefully analyzed and certain capital projects are
deferred when appropriate.  The Partnership has also sought and may seek
additional loan modifications where appropriate.  By conserving working
capital, the Partnership will be in a better position to meet the future
needs of its properties.  Due to the real estate conditions over the past
several years, the Partnership has held its remaining investment properties
longer than originally anticipated in an effort to maximize the return of
their investment to the Holders of Interests.  However, after reviewing the
remaining properties and the competitive marketplaces in which they
operate, the General Partners of the Partnership expect to be able to
conduct an orderly liquidation of its remaining investment portfolio as
quickly as practicable.  Therefore, with the possible exception of the
Partnership's interest in Wells Fargo Center - South Tower and Piper
Jaffray Tower, the Partnership currently expects to conduct an orderly
liquidation of the remaining assets in the portfolio no later than
December 31, 1999, barring any unforeseen economic developments.

RESULTS OF OPERATIONS

     Significant fluctuations in the accompanying consolidated financial
statements are due to the respective lenders obtaining legal title to the
Springbrook Shopping Center in 1997 and 160 Spear Street and 21900 Burbank
Buildings in 1996 and the sales of the RiverEdge Place office building in
1997 and Dunwoody Crossing and Woodland Hills apartment complexes in 1996.

     The decrease in the balance of escrow deposits and restricted
securities at December 31, 1997 as compared to December 31, 1996 is
primarily due to payments for mortgage interest and tenant improvements at
the Cal Plaza and 260 Franklin office buildings from these accounts during
1997.

     The decrease in other restricted securities and accrued interest
payable at December 31, 1997 as compared to December 31, 1996 are primarily
due to the remittance of cumulative cash flow of $6,350,000 from the
RiverEdge Place office building to the property's lender in payment of
deferred interest in conjunction with the sale of the property in 1997.

     The decrease in the deficit investment in unconsolidated ventures, at
equity, and the related increase in Partnership's share of income (loss)
from operations of unconsolidated ventures at December 31, 1997 as compared
to December 31, 1996 is primarily due to the reversal of a portion of the
accrued contingent interest related to the mortgage loan at the Piper
Jaffray investment property.

     The decrease in mortgage and other interest expense for the year ended
December 31, 1997 as compared to the same periods in 1996 and 1995 is due
to the sales and dispositions discussed above and is partially offset by
higher interest accrued on the amended and restated promissory note secured
by the Partnership's interest in the Wells Fargo Center - South Tower.

     The decrease in depreciation expense for the year ended December 31,
1997 as compared to the same periods in 1996 and 1995 is due to the sales
and dispositions discussed above, as well as all consolidated properties
being classified as held for sale or disposition, and therefore, no longer
being subject to continued depreciation.



<PAGE>


     The decrease in professional services for the year ended December 31,
1997 as compared to the year ended December 31, 1996 and the increase for
the year ended December 31, 1996 as compared to the year ended December 31,
1995 are primarily due to outsourcing costs and expenses related to
unsolicited offers for interest in 1996 as discussed above and in the
Notes.

     The provision for value impairment in 1996 relates to reductions in
the carrying values of the Cal Plaza property ($7,200,000), 260 Franklin
Street Building ($17,400,000), and Springbrook Shopping Center
($1,400,000).

     The restructuring fees in 1996 and the increase in Partnership's share
of income (loss) from operations of unconsolidated ventures for the year
ended December 31, 1996 as compared to the year ended December 31, 1995 is
due to the restructure of the Partnership's investment in the South Tower
venture as discussed in the Notes.

     The increase in the venture partners' share of ventures' operations
for the year ended December 31, 1997 as compared to the same periods in
1996 and 1995 is due to the sale of the Dunwoody Crossing Apartment complex
in 1996 and the Partnership's provision for value impairment of $17,400,000
related to the 260 Franklin Street Building during 1996.

     The gain on liquidation of investment in venture for the year ended
December 31, 1997 represents gain recognized after the liquidation of the
Partnership's interest in Villages Northeast Associates.

     The gain on sale or disposition of investment properties of $8,631,561
for the year ended December 31, 1997 relates to the recognition of gain
from the sale of the RiverEdge Place building in 1997.  The gain on sale of
$12,230,126 for the year ended December 31, 1996 relates to the recognition
of gain from the sale of the Woodland Hills and Dunwoody apartment
complexes of $1,749,814 and $10,480,312, respectively, in 1996.  The gain
on sale or disposition for the year ended December 31, 1995 relates to the
$6,275,248 of gain from the sale of the Partnership's 90% interest in the
Eastridge Development Company, Limited Partnership, and $509,777 on the
sale of an outparcel at Springbrook Mall in 1995.

     The gain on sale of interests in unconsolidated ventures for the year
ended December 31, 1997 relates to the recognition of $393,971 of deferred
gain from the sale of JMB/Owing's interest in the Owings Mills Limited
Partnership in June 1993 and recognition of $174,654 of previously deferred
gain from collection of principal on the note receivable relating to the
investment in 125 Broad.  The gain on sale of interests in unconsolidated
ventures for the years ended December 31, 1996 and 1995 relates to the
recognition of $435,060 and $856,751 of deferred gain from the sale of
JMB/Owing's interest in the Owings Mills Limited Partnership in June 1993.

     The extraordinary items - prepayment penalties and deferred mortgage
expense for the year ended December 31, 1996 results from the costs
incurred and the write-off of deferred mortgage fees on the early
extinguishment of debt on the Woodland Hills and Dunwoody Crossing mortgage
notes payable in 1996.

     The extraordinary item - gain on forgiveness of indebtedness of
$5,992,828 for the year ended December 31, 1997 represents the retirement
of the mortgage note on the Springbrook Shopping Center ($3,433,368) in
full satisfaction upon transfer of title to the respective lender, and the
forgiveness of debt by the lender on the sale of the RiverEdge building
($2,559,460).  The extraordinary item - gain on forgiveness of indebtedness
of $35,780,656 for the year ended December 31, 1996 represents the 1996
retirement of the mortgage notes on the 160 Spear Street ($31,158,453) and
21900 Burbank Buildings ($4,622,203) in full satisfaction upon transfer of
title to the properties to respective lenders.



<PAGE>


     The cumulative effect of an accounting change of $30,000,000
represents provisions in 1996 to record value impairment on the 160 Spear
Street ($26,000,000) and 21900 Burbank Buildings ($4,000,000) in compliance
with SFAS 121.

INFLATION

     Due to the decrease in the level of inflation in recent years,
inflation generally has not had a material effect on rental income or
property operating expenses.  Inflation is not expected to significantly
impact future operations.

     However, to the extent that inflation in future periods would have an
adverse impact on property operating expenses, the effect would generally
be offset by amounts recovered from tenants as many of the long-term leases
at the Partnership's commercial properties have escalation clauses covering
increases in the cost of operating and maintaining the properties as well
as real estate taxes.  Therefore, there should be little effect on net
operating earnings if the properties remain substantially occupied.  In
addition, substantially all of the leases at the Partnership's shopping
center investment contain provisions which entitle the property owner to
participate in gross receipts of tenants above fixed minimum amounts.



ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable.



<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


               CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                          (A LIMITED PARTNERSHIP)
                         AND CONSOLIDATED VENTURES

                                   INDEX

Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1997 and 1996
Consolidated Statements of Operations, years ended December 31, 
  1997, 1996 and 1995
Consolidated Statements of Partners' Capital Accounts (Deficits), 
  years ended December 31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows, years ended December 31, 
  1997, 1996 and 1995
Notes to Consolidated Financial Statements

                                                              SCHEDULE     
                                                              --------     

                              Consolidated Real Estate and Accumulated
Depreciation                                                     III       

Schedules not filed:

     All schedules other than the one indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the consolidated or combined financial statements or related
notes.



            JMB/PIPER I ASSOCIATES AND JMB/PIPER II ASSOCIATES
                        UNCONSOLIDATED VENTURES OF
               CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

                                   INDEX

Independent Auditors' Report
Combined Balance Sheets, December 31, 1997 and 1996
Combined Statements of Operations, years ended December 31, 1997, 1996 
  and 1995
Combined Statements of Partners' Capital Accounts, years ended 
  December 31, 1997, 1996 and 1995
Combined Statements of Cash Flows, years ended December 31, 1997, 1996 
  and 1995
Notes to Combined Financial Statements

                                                                   SCHEDULE
                                                                   --------

Combined Real Estate and Accumulated Depreciation                    III   

Schedules not filed:

     All schedules other than the one indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the financial statements or related notes.




<PAGE>














                       INDEPENDENT AUDITORS' REPORT


The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV:

     We have audited the consolidated financial statements of Carlyle Real
Estate Limited Partnership - XV (a limited partnership) and Consolidated
Ventures as listed in the accompanying index.  In connection with our
audits of the consolidated financial statements, we also have audited the
financial statement schedule as listed in the accompanying index.  These
consolidated financial statements and financial statement schedule are the
responsibility of the General Partners of the Partnership.  Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by the General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis for
our opinion.

     In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Carlyle Real Estate Limited Partnership - XV and Consolidated Ventures at
December 31, 1997 and 1996, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 1997, in conformity with generally accepted accounting
principles.  Also in our opinion, the related financial statement schedule,
when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly, in all material respects, the
information set forth therein.

     As discussed in the Notes to the consolidated financial statements, in
1996, the Partnership and its consolidated ventures changed their method of
accounting for long-lived assets and long-lived assets to be disposed of to
conform with Statement of Financial Accounting Standards No. 121.







                                          KPMG PEAT MARWICK LLP            


Chicago, Illinois
March 25, 1998



<PAGE>


<TABLE>
                                   CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES

                                            CONSOLIDATED BALANCE SHEETS

                                            DECEMBER 31, 1997 AND 1996

                                                      ASSETS
                                                      ------
<CAPTION>
                                                                                 1997               1996    
                                                                             ------------       ----------- 
<S>                                                                         <C>                <C>          
Current assets:
  Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . .     $ 24,992,726        20,664,264 
  Interest, rents and other receivables  . . . . . . . . . . . . . . . .          466,396           657,212 
  Escrow deposits and restricted securities. . . . . . . . . . . . . . .        1,884,326         5,091,039 
  Other restricted securities. . . . . . . . . . . . . . . . . . . . . .          131,318         5,285,807 
                                                                             ------------      ------------ 

          Total current assets . . . . . . . . . . . . . . . . . . . . .       27,474,766        31,698,322 
                                                                             ------------      ------------ 
Investment properties - Schedule III:
   Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --            5,501,887 
   Buildings and improvements. . . . . . . . . . . . . . . . . . . . . .            --           75,941,178 
                                                                             ------------      ------------ 
                                                                                    --           81,443,065 
   Less accumulated depreciation . . . . . . . . . . . . . . . . . . . .            --          (31,766,188)
                                                                             ------------      ------------ 

          Total properties held for investment, 
            net of accumulated depreciation. . . . . . . . . . . . . . .            --           49,676,877 

   Properties held for sale or disposition . . . . . . . . . . . . . . .       95,606,312        68,999,370 
                                                                             ------------      ------------ 
          Total investment properties. . . . . . . . . . . . . . . . . .       95,606,312       118,676,247 
                                                                             ------------      ------------ 
Investment in unconsolidated ventures, 
  at equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       16,908,786        17,354,958 
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . .        2,016,887         2,704,645 
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . .        3,731,258         4,555,121 
                                                                             ------------      ------------ 

                                                                             $145,738,009       174,989,293 
                                                                             ============      ============ 



<PAGE>


                                   CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES
                                      CONSOLIDATED BALANCE SHEETS - CONTINUED

                               LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
                               -----------------------------------------------------

                                                                                 1997               1996    
                                                                             ------------       ----------- 
Current liabilities:
  Current portion of long-term debt. . . . . . . . . . . . . . . . . . .     $ 92,117,086       118,969,238 
  Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .        3,169,406         4,341,771 
  Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . .          639,533        11,630,227 
  Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . .            --              773,149 
  Other current liabilities. . . . . . . . . . . . . . . . . . . . . . .          639,554           592,353 
                                                                             ------------      ------------ 
          Total current liabilities. . . . . . . . . . . . . . . . . . .       96,565,579       136,306,738 

Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . .          385,888           457,730 
Investment in unconsolidated ventures, at equity . . . . . . . . . . . .        5,800,180        14,107,122 
Deferred income. . . . . . . . . . . . . . . . . . . . . . . . . . . . .        1,024,276         1,515,927 
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . .          361,129           479,032 
Long-term debt, less current portion . . . . . . . . . . . . . . . . . .      109,972,972       102,089,968 
                                                                             ------------      ------------ 
Commitments and contingencies

          Total liabilities. . . . . . . . . . . . . . . . . . . . . . .      214,110,024       254,956,517 

Venture partners' subordinated equity in ventures. . . . . . . . . . . .            --              608,114 

Partners' capital accounts (deficits):
  General partners:
      Capital contributions. . . . . . . . . . . . . . . . . . . . . . .           20,000            20,000 
      Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . .      (19,989,556)      (20,028,625)
      Cumulative cash distributions. . . . . . . . . . . . . . . . . . .       (1,020,769)       (1,020,769)
                                                                             ------------      ------------ 
                                                                              (20,990,325)      (21,029,394)
                                                                             ------------      ------------ 


<PAGE>


                                   CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES
                                      CONSOLIDATED BALANCE SHEETS - CONTINUED

                               LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
                               -----------------------------------------------------

                                                                                 1997               1996    
                                                                             ------------       ----------- 

  Limited partners:
      Capital contributions, net of offering costs . . . . . . . . . . .      384,978,681       384,978,681 
      Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . .     (390,285,344)     (402,819,621)
      Cumulative cash distributions. . . . . . . . . . . . . . . . . . .      (42,075,027)      (41,705,004)
                                                                             ------------      ------------ 
                                                                              (47,381,690)      (59,545,944)
                                                                             ------------      ------------ 
          Total partners' capital accounts (deficits). . . . . . . . . .      (68,372,015)      (80,575,338)
                                                                             ------------      ------------ 
                                                                             $145,738,009       174,989,293 
                                                                             ============      ============ 


























<FN>
                           See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>


<TABLE>
                                   CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES

                                       CONSOLIDATED STATEMENTS OF OPERATIONS
                               FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
                                                               1997             1996              1995     
                                                          -------------     ------------      ------------ 
<S>                                                      <C>               <C>               <C>           
Income:
  Rental income. . . . . . . . . . . . . . . . . . . .     $ 22,998,137       26,916,089        44,199,560 
  Interest income. . . . . . . . . . . . . . . . . . .        1,351,711        1,580,238         1,215,534 
                                                           ------------      -----------       ----------- 
                                                             24,349,848       28,496,327        45,415,094 
                                                           ------------      -----------       ----------- 
Expenses:
  Mortgage and other interest. . . . . . . . . . . . .       23,284,811       23,796,808        29,972,319 
  Depreciation . . . . . . . . . . . . . . . . . . . .        1,187,772        5,413,953        10,440,946 
  Property operating expenses. . . . . . . . . . . . .       10,749,263       13,420,306        18,442,109 
  Professional services. . . . . . . . . . . . . . . .          529,143          901,930           595,234 
  Amortization of deferred expenses. . . . . . . . . .          673,032          877,359         1,123,917 
  General and administrative . . . . . . . . . . . . .          806,787          759,295           815,211 
  Provisions for value impairment. . . . . . . . . . .            --          26,000,000             --    
  Restructuring fees . . . . . . . . . . . . . . . . .            --          11,589,974             --    
                                                           ------------      -----------       ----------- 
                                                             37,230,808       82,759,625        61,389,736 
                                                           ------------      -----------       ----------- 
                                                            (12,880,960)     (54,263,298)      (15,974,642)
Partnership's share of income (loss) from 
  operations of unconsolidated ventures 
  (including income from restructuring 
  of $10,664,944 in 1996). . . . . . . . . . . . . . .        9,992,145        5,056,608        (6,484,175)
Venture partners' share of ventures' operations. . . .            --             (85,091)        2,528,102 
                                                           ------------      -----------       ----------- 
          Earnings (loss) before gains on sale 
            or disposition of investment 
            properties . . . . . . . . . . . . . . . .       (2,888,815)     (49,291,781)      (19,930,715)

Gain on liquidation of investment in venture . . . . .          269,147            --                --    
Gains on sale or disposition of investment 
  properties, net of venture partner's share
  of gain of $204,139 in 1996 and manager's 
  incentive fee of $1,730,016 in 1996. . . . . . . . .        8,631,561       12,230,126         6,785,025 
Gains on sale of interests in unconsolidated 
  ventures . . . . . . . . . . . . . . . . . . . . . .          568,625          435,060           856,751 
                                                           ------------      -----------       ----------- 
          Earnings (loss) before extra-
            ordinary items and cumulative
            effect of an accounting change . . . . . .        6,580,518      (36,626,595)      (12,288,939)


<PAGE>


                                   CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES

                                 CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED



                                                              1997              1996              1995     
                                                          -------------     ------------      ------------ 
Extraordinary items:
  Prepayment penalties and deferred mortgage
    expense on retirement of long-term debt,
    net of venture partner's share of 
    $175,004 . . . . . . . . . . . . . . . . . . . . .            --            (557,809)            --    
  Gain on forgiveness of indebtedness. . . . . . . . .        5,992,828       35,780,656             --    
Cumulative effect of an accounting change. . . . . . .            --         (30,000,000)            --    
                                                           ------------      -----------       ----------- 
          Net earnings (loss). . . . . . . . . . . . .     $ 12,573,346      (31,403,748)      (12,288,939)
                                                           ============      ===========       =========== 

          Net earnings (loss) per limited 
            partnership interest:
              Earnings (loss) before gains on sale
                or disposition of investment
                properties . . . . . . . . . . . . . .     $      (6.25)         (106.67)           (43.12)
              Gain on liquidation of investment
                in venture . . . . . . . . . . . . . .              .60            --                --    
              Net gains on sale or disposition of 
                investment properties. . . . . . . . .            19.26            27.29             17.05 
              Gains on sale or disposition of 
                interests in unconsolidated 
                ventures . . . . . . . . . . . . . . .             1.27              .97             --    
              Extraordinary items. . . . . . . . . . .            13.37            78.61             --    
              Cumulative effect of an accounting 
                change . . . . . . . . . . . . . . . .            --              (64.92)            --    
                                                           ------------      -----------       ----------- 
                                                           $      28.25           (64.72)           (26.07)
                                                           ============      ===========       =========== 









<FN>
                           See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>


<TABLE>
                                     CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                                (A LIMITED PARTNERSHIP)
                                               AND CONSOLIDATED VENTURES

                           CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)

                                     YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


<CAPTION>
                                GENERAL PARTNERS                                 LIMITED PARTNERS 
            -----------------------------------------------------  ---------------------------------------------------
                                                                   CONTRI- 
                                                                   BUTIONS 
                                                                   NET OF       NET     
            CONTRI-      NET          CASH                        OFFERING    EARNINGS        CASH     
            BUTIONS      LOSS     DISTRIBUTIONS      TOTAL         COSTS       (LOSS)     DISTRIBUTIONS      TOTAL   
            -------   ----------  -------------   -----------   ----------- -----------   -------------   -----------
<S>        <C>       <C>         <C>             <C>           <C>        <C>            <C>             <C>         
Balance 
 (deficit)
 Decem-
 ber 31, 
 1994. . . .$20,000  (16,615,024)     (872,867)  (17,467,891)  384,978,681 (362,540,535)   (26,416,973)   (3,978,827)

Net earnings
 (loss). . .   --       (720,810)         --        (720,810)         --    (11,568,129)          --     (11,568,129)
Cash distri-
 butions
 ($8.09 per 
 limited 
 partnership 
 interest) .   --           --         (35,855)      (35,855)         --           --       (3,589,635)   (3,589,635)
            -------  -----------     ---------   -----------   ----------- ------------   ------------   ----------- 
Balance 
 (deficit)
 Decem-
 ber 31, 
 1995. . . . 20,000  (17,335,834)     (908,722)  (18,224,556)  384,978,681 (374,108,664)   (30,006,608)  (19,136,591)

Net earnings
 (loss). . .   --     (2,692,791)        --       (2,692,791)        --     (28,710,957)         --      (28,710,957)
Cash distri-
 butions
 ($26.37 per 
 limited 
 partnership 
 interest) .   --          --         (112,047)     (112,047)        --          --        (11,698,396)  (11,698,396)
            -------  -----------     ---------   -----------   ----------- ------------   ------------   ----------- 



<PAGE>


                                     CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                                (A LIMITED PARTNERSHIP)
                                               AND CONSOLIDATED VENTURES

                     CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS) - CONTINUED



                                GENERAL PARTNERS                                 LIMITED PARTNERS 
            -----------------------------------------------------  ---------------------------------------------------
                                                                   CONTRI- 
                                                                   BUTIONS 
                                                                   NET OF  
            CONTRI-      NET          CASH                        OFFERING      NET           CASH     
            BUTIONS      LOSS     DISTRIBUTIONS      TOTAL         COSTS        LOSS      DISTRIBUTIONS      TOTAL   
            -------   ----------  -------------   -----------   ----------- -----------   -------------   -----------

Balance 
 (deficit)
 Decem-
 ber 31, 
 1996. . . . 20,000  (20,028,625)   (1,020,769)  (21,029,394)  384,978,681 (402,819,621)   (41,705,004)  (59,545,944)

Net earnings
 (loss). . .   --         39,069         --           39,069         --      12,534,277          --       12,534,277 
Cash distri-
 butions
 ($.83 per 
 limited 
 partnership 
 interest) .   --          --            --            --            --           --          (370,023)     (370,023)
            -------  -----------     ---------   -----------   ----------- ------------   ------------   ----------- 
Balance 
 (deficit)
 Decem-
 ber 31, 
 1997. . . .$20,000  (19,989,556)   (1,020,769)  (20,990,325)  384,978,681 (390,285,344)   (42,075,027)  (47,381,690)
            =======  ===========    ==========   ===========   =========== ============   ============   =========== 










<FN>
                             See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>


<TABLE>
                                   CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
                                                                1997            1996              1995     
                                                            -----------      -----------       ----------- 
<S>                                                        <C>              <C>               <C>          
Cash flows from operating activities:
  Net earnings (loss). . . . . . . . . . . . . . . . .      $12,573,346      (31,403,748)      (12,288,939)
  Items not requiring (providing) cash or 
   cash equivalents:
    Depreciation . . . . . . . . . . . . . . . . . . .        1,187,772        5,413,953        10,440,946 
    Amortization of deferred expenses. . . . . . . . .          673,032          877,359         1,123,917 
    Restructuring fee. . . . . . . . . . . . . . . . .            --          11,589,974             --    
    Long-term debt - deferred accrued interest . . . .       10,129,734        3,138,667         3,236,199 
    Partnership's share of (income) loss from 
      operations of unconsolidated ventures. . . . . .       (9,992,145)      (5,056,608)        6,484,175 
    Venture partners' share of ventures' 
      operations, gain on sale or 
      disposition of investment properties and 
      extraordinary items. . . . . . . . . . . . . . .            --             114,226        (2,528,102)
    Provisions for value impairment. . . . . . . . . .            --          26,000,000              --   
    Gain on liquidation of investment in venture . . .         (269,147)           --                --    
    Total gain on sale or disposition of 
      investment properties. . . . . . . . . . . . . .       (8,631,561)     (12,434,265)       (6,785,025)
    Total gain on sale of interests in uncon-
      solidated ventures . . . . . . . . . . . . . . .         (568,625)        (435,060)         (856,751)
    Extraordinary items including venture 
      partner's share. . . . . . . . . . . . . . . . .       (5,992,828)     (35,047,843)            --    
    Cumulative effect of an accounting change. . . . .            --          30,000,000             --    
  Changes in:
    Interest, rents and other receivables. . . . . . .           43,928          326,701            86,144 
    Current portion of notes receivable. . . . . . . .            --               --               11,967 
    Escrow deposits and restricted securities. . . . .          744,237        5,881,168        (3,420,945)
    Other restricted securities. . . . . . . . . . . .        5,154,489       (1,520,685)       (1,144,284)
    Accrued rents receivable, net. . . . . . . . . . .          526,261          146,353           455,115 
    Accounts payable . . . . . . . . . . . . . . . . .       (1,092,706)        (238,943)          441,144 
    Amounts due to affiliates. . . . . . . . . . . . .            --               --              449,811 
    Accrued interest payable . . . . . . . . . . . . .       (3,173,281)       6,901,461         6,220,119 
    Accrued real estate taxes. . . . . . . . . . . . .            --             312,963          (167,328)
    Other current liabilities. . . . . . . . . . . . .           47,201            --               30,000 
    Deferred income. . . . . . . . . . . . . . . . . .         (491,651)        (491,653)        2,499,232 
    Tenant security deposits . . . . . . . . . . . . .          (76,059)         (54,507)           (4,102)
    Other liabilities. . . . . . . . . . . . . . . . .          (47,202)           --              (30,000)
                                                           ------------      -----------       ----------- 
          Net cash provided by (used in) 
            operating activities . . . . . . . . . . .          744,795        4,019,513         4,253,293 
                                                           ------------      -----------       ----------- 


<PAGE>


                                   CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES

                                 CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED


                                                                1997            1996              1995     
                                                            -----------      -----------       ----------- 
Cash flows from investing activities:
  Net sales and maturities (purchases) of 
    short-term investments . . . . . . . . . . . . . .            --               --           10,564,988 
  Additions to investment properties,
    excluding amounts from escrow deposits
    and restricted securities. . . . . . . . . . . . .       (1,062,024)      (2,011,678)         (872,103)
  Partnership's distributions from 
    unconsolidated ventures. . . . . . . . . . . . . .        2,700,000        3,349,635         6,525,990 
  Partnership's contributions to 
    unconsolidated ventures. . . . . . . . . . . . . .            --            (753,560)         (525,000)
  Cash proceeds from sale of investment 
    properties . . . . . . . . . . . . . . . . . . . .        3,120,382       17,695,317         1,594,727 
  Payment of deferred expenses . . . . . . . . . . . .         (395,000)        (331,019)         (992,616)
                                                           ------------      -----------       ----------- 
          Net cash provided by (used in)
            investing activities . . . . . . . . . . .        4,363,358       17,948,695        16,295,986 
                                                           ------------      -----------       ----------- 
Cash flows from financing activities:
  Proceeds from restructuring and refinancing of 
    long-term debt . . . . . . . . . . . . . . . . . .            --             650,000             --    
  Principal payments on long-term debt . . . . . . . .            --            (172,147)       (2,786,783)
  Principal payments on notes payable. . . . . . . . .          (70,701)         (70,701)          (70,701)
  Venture partners' contributions to venture . . . . .            --               --              135,000 
  Distributions to venture partners. . . . . . . . . .         (338,967)      (4,946,038)            --    
  Distributions to general partners. . . . . . . . . .            --            (112,047)          (35,855)
  Distributions to limited partners. . . . . . . . . .         (370,023)     (11,698,396)       (3,589,635)
                                                           ------------      -----------       ----------- 
         Net cash provided by (used in)
           financing activities  . . . . . . . . . . .         (779,691)     (16,349,329)       (6,347,974)
                                                           ------------      -----------       ----------- 
         Net increase (decrease) in cash and 
           cash equivalents. . . . . . . . . . . . . .        4,328,462        5,618,879        14,201,305 
         Cash and cash equivalents, 
           beginning of year . . . . . . . . . . . . .       20,664,264       15,045,385           844,080 
                                                           ------------      -----------       ----------- 
         Cash and cash equivalents, 
           end of year . . . . . . . . . . . . . . . .     $ 24,992,726       20,664,264        15,045,385 
                                                           ============      ===========       =========== 



<PAGE>


                                   CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                                                                1997            1996              1995     
                                                            -----------      -----------       ----------- 
Supplemental disclosure of cash flow 
 information:
  Cash paid for mortgage and other interest. . . . . .      $21,188,582       13,756,680        20,516,001 
                                                            ===========      ===========       =========== 
  Non-cash investing and financing activities:
    Non-cash gain recognized on sale of 
      interests in ventures. . . . . . . . . . . . . .      $   568,625          435,060         7,641,776 
                                                            ===========      ===========       =========== 
    Gross proceeds from restructuring and
      refinancing of long-term debt. . . . . . . . . .      $     --          18,084,557             --    
    Accrued interest . . . . . . . . . . . . . . . . .            --          (5,844,583)            --    
    Restructuring fee. . . . . . . . . . . . . . . . .            --         (11,589,974)            --    
                                                            -----------      -----------       ----------- 
          Proceeds received on restructuring and
            refinancing of long-term debt. . . . . . .      $     --             650,000             --    
                                                            ===========      ===========       =========== 
    Sale of investment properties:
      Total sale proceeds, net of selling
        expenses . . . . . . . . . . . . . . . . . . .      $26,146,900       58,491,798        24,998,719 
      Prepayment penalties . . . . . . . . . . . . . .            --            (516,683)            --    
      Payment of mortgages payable and 
        accrued interest . . . . . . . . . . . . . . .      (23,026,518)     (38,549,782)      (23,403,992)
      Incentive fee to manager of
        investment property. . . . . . . . . . . . . .            --          (1,730,016)            --    
                                                            -----------      -----------       ----------- 
          Cash proceeds from sale of investment 
            properties, net of selling expenses. . . .      $ 3,120,382       17,695,317         1,594,727 
                                                            ===========      ===========       =========== 
    Disposition of investment properties:
      Balance due on long-term debt cancelled. . . . .      $10,932,588       50,853,648             --    
      Accrued interest expense on accelerated
        long-term debt . . . . . . . . . . . . . . . .          397,729        1,853,284             --    
      Reduction of investment property, net. . . . . .       (8,448,879)     (16,419,175)            --    
      Reduction of other assets and liabilities. . . .          551,930         (507,101)            --    
                                                            -----------      -----------       ----------- 
         Non-cash gain recognized due to lenders
           realizing upon security . . . . . . . . . .      $ 3,433,368       35,780,656             --    
                                                            ===========      ===========       =========== 
    Accrued interest forgiven by lender 
      on sale of property. . . . . . . . . . . . . . .      $ 2,559,460            --                --    
                                                            ===========      ===========       =========== 
<FN>
                           See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>


               CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                          (A LIMITED PARTNERSHIP)
                         AND CONSOLIDATED VENTURES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     DECEMBER 31, 1997, 1996 AND 1995



OPERATIONS AND BASIS OF ACCOUNTING

     GENERAL

     The Partnership holds (either directly or through joint ventures) an
equity investment portfolio of United States real estate.  Business
activities consist of rentals to a wide variety of commercial and retail
companies, and the ultimate sale or disposition of such real estate.

     The accompanying consolidated financial statements include the
accounts of the Partnership and its majority-owned ventures, Eastridge
Development Company ("Eastridge") (sold June 30, 1995); JMB/160 Spear
Street Associates ("160 Spear") (prior to the transfer of title in January
1996); 260 Franklin Street Associates ("260 Franklin"); C-C California
Plaza Partnership ("Cal Plaza"); Villages Northeast Associates ("Villages
Northeast") and VNE Partners, Ltd. ("VNE Partners") (prior to the sale in
May 1996).  The effect of all transactions between the Partnership and the
consolidated ventures has been eliminated.

     The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Partnership's
interests in JMB/Piper Jaffray Tower Associates ("JMB/Piper") and JMB/Piper
Jaffray Tower Associates II ("JMB/Piper II"); 900 Third Avenue Associates
("JMB/900"); Maguire/Thomas Partners - South Tower LLC (formerly
Maguire/Thomas Partners-South Tower) ("South Tower"); JMB/Owings Mills
Associates ("JMB/Owings") (sold June 30, 1993); JMB/NewPark Associates,
("JMB/NewPark"); Carlyle-XV Associates, L.P., which owns an interest in
JMB/125 Broad Building Associates, L.P. ("JMB/125").  In November 1994, the
Partnership through its indirect ownership of JMB/125 assigned its interest
in the 125 Broad Street Building.

     Due to the restructuring of the Partnership's interest in Wells Fargo
Center - South Tower as discussed below, the Partnership has ceased loss
recognition relative to its real estate investment and has reversed those
previously recognized losses that the Partnership is no longer obligated to
fund, which is reflected as income from restructuring in 1996 in the
Partnership's share of income from operations of unconsolidated ventures. 
The Partnership has no future funding obligation for its investment in
Wells Fargo Center - South Tower.  Accordingly, the Partnership has
discontinued the application of the equity method of accounting and
additional losses from the investment in Wells Fargo Center - South Tower
will not be recognized.

     The Partnership's records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes.  The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to present the Partnership's
accounts in accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of certain ventures as described
above.  Such GAAP and consolidation adjustments are not recorded on the
records of the Partnership.  The net effect of these items is summarized as
follows for the years ended December 31, 1997 and 1996:




<PAGE>


<TABLE>
<CAPTION>

                                                        1997                               1996            
                                           ----------------------------      ------------------------------
                                                              TAX BASIS                          TAX BASIS 
                                          GAAP BASIS         (UNAUDITED)      GAAP BASIS        (UNAUDITED)
                                         ------------       -----------      ------------       ---------- 
<S>                                     <C>                <C>              <C>                <C>         
Total assets . . . . . . . . . . . .     $145,738,009        87,293,395      174,989,293       119,320,972 

Partners' capital accounts 
  (deficit):
    General partners . . . . . . . .      (20,990,325)      (14,622,150)     (21,029,394)      (17,916,234)
    Limited partners . . . . . . . .      (47,381,690)       10,213,185      (59,545,944)       23,380,381 

Net earnings (loss):
    General partners . . . . . . . .           39,069         3,294,084       (2,692,791)        1,947,860 
    Limited partners . . . . . . . .       12,534,277       (12,797,173)     (28,710,957)       20,716,015 

Net earnings (loss) per 
  limited partnership 
  interest . . . . . . . . . . . . .            28.25            (28.85)          (64.72)            46.70 
                                         ============      ============      ===========       =========== 
</TABLE>


<PAGE>


     The net earnings (loss) per limited partnership interest ("Interest")
is based upon the limited partnership interests outstanding at the end of
each period.  Deficit capital accounts will result, through the duration of
the Partnership, in the recognition of net gain for financial reporting and
Federal income tax purposes.

     The preparation of financial statements in accordance with GAAP
requires the General Partners to make estimates and assumptions that affect
the reported or disclosed amount of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from these
estimates.

     Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities.  The required information has been segregated and accumulated
according to the classifications specified in the pronouncement. 
Partnership distributions from unconsolidated ventures are considered cash
flow from operating activities only to the extent of the Partnership's
cumulative share of net earnings.  In addition, the Partnership records
amounts held in U.S. Government obligations and other securities at cost
which approximates market.  For the purposes of these statements, the
Partnership's policy is to consider all such amounts held with original
maturities of three months or less (approximately $25,000,000 and
$20,700,000 at December 31, 1997 and 1996, respectively) as cash
equivalents, which includes investments in an institutional mutual fund
which holds U.S. Government obligations, with any remaining amounts
(generally with maturities of one year or less) reflected as short-term
investments being held to maturity.

     Escrow deposits and restricted securities primarily represent cash and
investments restricted as to their use by the Partnership.

     Deferred expenses are comprised principally of deferred financing fees
which are amortized over the related debt term and deferred leasing fees
which are amortized over the related lease term.

     Although certain leases of the Partnership provide for tenant
occupancy during periods for which no rent is due and/or increases in
minimum lease payments over the term of the lease, the Partnership accrues
prorated rental income for the full period of occupancy on a straight-line
basis.

      Statement of Financial Accounting Standards No. 107, "Disclosures
about Fair Value of Financial Instruments" (as amended), requires certain
large reporting entities to disclose the SFAS 107 value of all financial
assets and liabilities for which it is practicable to estimate.  Value is
defined in the Statement as the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale.  The Partnership believes the carrying amount
of its current assets and liabilities (excluding current portion of long-
term debt) approximates SFAS 107 value due to the relatively short maturity
of these instruments.  There is no quoted market value available for any of
the Partnership's other instruments.  In addition, the Partnership
considers the disclosure of the SFAS 107 value of the debt related to the
260 Franklin Street investment property to be impracticable due to the sale
of the property in 1998 as discussed below.  The remaining debt has been
calculated to have a SFAS 107 value approximating the carrying value by
discounting the scheduled loan payments to maturity.  Due to restrictions
on transferability and prepayment, and the inability to obtain comparable
financing due to previously modified debt terms or other property specific
competitive conditions, the Partnership would be unable to refinance these
properties to obtain such calculated debt amounts reported.  The
Partnership has no other significant financial instruments.

     Certain reclassifications have been made to the 1996 consolidated
financial statements to conform with the 1997 presentation.


<PAGE>


     No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the partners rather than the
Partnership.  However, in certain instances, the Partnership has been
required under applicable law to remit directly to the tax authorities
amounts representing withholding from distributions paid to partners.  Due
to this, approximately $370,000 representing such withholding was remitted
to various states on behalf of the Holders of Interest in 1997.

     The Partnership has acquired, either directly or through joint
ventures, interests in four apartment complexes, twelve office buildings,
four shopping centers and one parking facility.  The Partnership's
aggregate cash investment, excluding certain related acquisition costs, was
$299,637,926.  During 1989, the Partnership disposed of its interest in the
investment property owned by CBC Investment Company ("Boatmen's").  During
1991, the Partnership sold 62% of its interest in Harbor and in 1993 sold
its remaining 38% interest in Harbor.  In September 1992, the Partnership
sold the Erie-McClurg Parking Facility.  In June 1993, the Partnership sold
(through JMB/Owings) its interest in Owings Mills Shopping Center.  In
March 1994, the Partnership, through Villa Solana Associates, sold the
Villa Solana Apartments.  In May 1994, the lender realized upon its
security interest in the Park at Countryside Apartments.  In October 1994,
the Partnership sold the 9701 Wilshire Office Building.  In November 1994,
the Partnership assigned its interest in the JMB/125 venture to an
affiliate of its unaffiliated venture partner.  In June 1995, the
Partnership sold its interest in Eastridge Mall.  In January 1996, the
lender realized upon its security interest in the 160 Spear Street
Building.  In March 1996, the lender realized upon its security interest in
the 21900 Burbank Boulevard Building.  In May 1996, the Partnership sold
the Woodland Hills apartment complex.  Also, in May 1996, the Partnership,
through Villages Northeast and VNE Partners, Ltd., sold the Dunwoody
Crossing Phases I, II and III apartment complex.  In January 1997, the
lender realized upon its security interest in the Springbrook Shopping
Center.  In December 1997, the Partnership sold the RiverEdge Place office
building.  All of the remaining properties owned at December 31, 1997 were
completed and operating.  However, the Partnership, through 260 Franklin
Street Associates, sold the 260 Franklin Street Building in January 1998.

    The cost of the investment properties represents the total cost to the
Partnership or its ventures plus miscellaneous acquisition costs reduced
for provisions for value impairment where applicable.  Depreciation on the
operating properties has been provided over the estimated useful lives of
5-30 years using the straight-line method.

     Statement of Financial Accounting Standards No. 121 ("SFAS 121")
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" was issued in March 1995.  The Partnership
adopted SFAS 121 as required in the first quarter of 1996.  SFAS 121
requires that the Partnership record an impairment loss on its properties
to be held for investment whenever their carrying value cannot be fully
recovered through estimated undiscounted future cash flows from their
operations and sale.  The amount of the impairment loss to be recognized
would be the difference between the property's carrying value and the
property's estimated fair value.  The Partnership's policy is to consider a
property to be held for sale or disposition when the Partnership has
committed to a plan to sell or dispose of such property and active
marketing activity has commenced or is expected to commence in the near
term or the Partnership has concluded that it may dispose of the property
by no longer funding operating deficits or debt service requirements of the
property thus allowing the lender to realize upon its security.   In
addition, the $30,000,000 impairment loss on the 21900 Burbank and 160
Spear Street investment properties, which were categorized as held for sale
or disposition at January 1, 1996 upon adoption of SFAS 121, has been
reflected in the accompanying consolidated financial statements as the
cumulative effect of an accounting change as provided by SFAS 121.  In
accordance with SFAS 121, any properties identified as "held for sale or
disposition" are no longer depreciated.  Adjustments for impairment loss
for such properties (subsequent to the date of adoption of SFAS 121) are
made in each period as necessary to report these properties at the lower of


<PAGE>


carrying value or estimated fair value less costs to sell.  In certain
situations, such estimated fair value could be less than the existing non-
recourse debt which is secured by the property.  There can be no assurance
that any estimated fair value of these properties would ultimately be
obtained by the Partnership in any future sale or disposition transaction.

     Under the prior accounting policy, provisions for value impairment
were recorded with respect to investment properties whenever the estimated
future cash flows from a property's operations and projected sale were less
than the property's carrying value.  The amount of any such impairment loss
recognized by the Partnership was limited to the excess, if any, of the
property's carrying value over the outstanding balance of the property's
non-recourse indebtedness.  An impairment loss under SFAS 121 is determined
without regard to the nature or the balance of such non-recourse
indebtedness.  Upon the disposition of a property with the related
extinguishment of the long-term debt for which an impairment loss has been
recognized under SFAS 121, the Partnership would recognize, at a minimum, a
net gain for financial reporting purposes (comprised of gain on
extinguishment of debt and gain or loss on the sale or disposition of
property) for financial reporting purposes to the extent of any excess of
the then outstanding balance of the property's non-recourse indebtedness
over the then carrying value of the property, including the effect of any
reduction for impairment loss under SFAS 121.

     In addition, upon the disposition of any impaired property, the
Partnership will generally recognize more net gain for financial reporting
purposes under SFAS 121 than it would have under the Partnership's prior
impairment policy, without regard to the amount, if any, of cash proceeds
received by the Partnership in connection with the disposition.  Although
implementation of this accounting statement could significantly impact the
Partnership's reported earnings, there would be no impact on cash flows. 
Further, any such impairment loss is not recognized for Federal income tax
purposes.

     The results of operations for consolidated properties classified as
held for sale or disposition as of December 31, 1997 or sold or disposed of
during the past three years were ($5,805,022), ($38,038,482) and
($9,853,767), respectively, for the years ended December 31, 1997, 1996 and
1995.  In addition, the accompanying consolidated financial statements
include for the years ended December 31, 1997, 1996 and 1995 $9,265,406,
($5,619,205) and ($4,535,286), respectively, as the Partnership's share of
property operations of $17,760,245, ($7,651,698) and ($8,759,732) of
unconsolidated properties held for sale or disposition as of December 31,
1997, or sold or disposed of in the past three years.

     During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued.  These standards became
effective for reporting periods after December 15, 1997.  As the
Partnership's capital structure only has general and limited partnership
interests, the Partnership will not experience any significant impact on
its consolidated financial statements.

     The borrowings of the Partnership and its ventures consist of separate
non-recourse mortgage loans secured by the investment properties and
individually are not obligations of the entire investment portfolio. 
However, for any particular investment property that is incurring deficits
or for which the existing financing has matured, the Partnership or its
ventures may seek a modification or refinancing of existing indebtedness
and, in the absence of a satisfactory debt modification or refinancing, may
decide, in light of the then existing and expected future market conditions
for such investment property, not to commit additional funds to such
investment property.  This would likely result in the Partnership no longer
having an ownership interest in such property and would generally result in
net gain to the Partnership for financial reporting and Federal income tax
purposes with no corresponding distributable proceeds.



<PAGE>


     Maintenance and repair expenses are charged to operations as incurred.

Significant betterments and improvements are capitalized and depreciated
over their estimated useful lives.

VENTURE AGREEMENTS - GENERAL

     The Partnership (or Carlyle-XV Associates, L.P., in which the
Partnership holds a limited partnership interest) had entered into eight
joint venture agreements (JMB/Piper, JMB/Piper II, JMB/900, JMB/Owings,
JMB/125, 260 Franklin, Villages Northeast and JMB/NewPark) with Carlyle
Real Estate Limited Partnership-XIV ("Carlyle-XIV") or Carlyle Real Estate
Limited Partnership-XVI (or Carlyle-XVI Associates, L.P., in which Carlyle
Real Estate Limited Partnership-XVI holds a limited partnership interest)
("Carlyle-XVI")), partnerships sponsored by the Corporate General Partner,
and eight joint venture agreements with unaffiliated venture partners. 
Pursuant to such agreements, the Partnership made initial capital
contributions of approximately $247,300,000 (before legal and other
acquisition costs and its share of operating deficits as discussed below). 
The terms of these affiliated partnerships provide, in general, that the
benefits of ownership, including tax effects, net cash receipts and sale
and refinancing proceeds, are allocated between or distributed to, as the
case may be, the Partnership and the affiliated partner in proportion to
their respective capital contributions to the affiliated venture.

     There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the
Partnership's joint venture partners in an investment might become unable
or unwilling to fulfill their financial or other obligations, or that such
joint venture partners may have economic or business interests or goals
that are inconsistent with those of the Partnership.  Under certain
circumstances, either pursuant to the venture agreements or due to the
Partnership's obligations as a general partner, the Partnership may be
required to contribute additional amounts to the venture.

     The terms of the 260 Franklin, Eastridge, 160 Spear, Cal Plaza and VNE
Partners ventures can be described in general, as follows:

     In most instances, these properties were acquired (as completed) for a
fixed purchase price; however, certain properties were developed by the
ventures and in those instances, the contributions of the Partnership are
generally fixed.  The joint venture partner was required to contribute any
excess of cost over the aggregate amount available from Partnership
contributions and financing.  To the extent such funds exceed the aggregate
costs, the venture partner was entitled to retain such excesses.  The
venture properties have been financed under various long-term debt
arrangements as described in the Notes.

     The Partnership generally has a cumulative preferred interest in net
cash receipts (as defined) from the properties.  Such preferential interest
relates to a negotiated rate of return on contributions made by the
Partnership.  After the Partnership receives its preferential return, the
venture partner is generally entitled to a non-cumulative return on its
interest in the venture; additional net cash receipts are generally shared
in a ratio relating to the various ownership interests of the Partnership
and its venture partners.  During 1997, 1996 and 1995, none, one and two,
respectively, of the ventures' properties produced net cash receipts.  The
Partnership also has preferred positions (related to the Partnership's cash
investment in the ventures) with respect to distribution of net sale or
refinancing proceeds from the ventures.

     In general, operating profits and losses are shared in the same ratio
as net cash receipts; however, if there are no net cash receipts, sub-
stantially all profits or losses are allocated to the Partnership.  In
addition, generally amounts equal to certain expenses paid from capital
contributions by the Partnership or venture partners are allocated to the
contributing partner or partners.



<PAGE>


INVESTMENT PROPERTIES

     RIVEREDGE PLACE BUILDING

     On December 23, 1997, the Partnership sold the RiverEdge Place Office
Building for $26,600,000 less selling costs of approximately $428,000. 
Approximately $3,200,000 (which includes the $500,000 discussed below) of
cash proceeds was received by the Partnership from the sale, net of closing
costs and the payment of $23,026,518 of the outstanding mortgage principal
and accrued interest on the loan secured by the Property pursuant to a
previously agreed upon term sheet described below.  The remaining
approximately $2,600,000 of accrued interest was forgiven by the lender in
conjunction with the sale.  The accompanying financial statements for 1997
include $8,631,561 of gain on disposition of investment property and
$2,559,460 of extraordinary gain of extinguishment of debt.  The
Partnership also had a gain of approximately $11,750,000 for Federal income
tax purposes in 1997.  In February 1998, the Partnership made a sales
distribution totalling $4,436,037 (approximately $10 per Interest) related
to the sale of the RiverEdge Place Building and prior undistributed sales
proceeds.

     In 1992, the Property was 100% leased to an affiliate of the major
tenant, First American Bank (the "Bank"), under a long-term over-lease
executed in connection with the purchase of the property.  The Bank and its
affiliate approached the Partnership and indicated that they were
experiencing financial difficulties as a result of their substantial
percentage of problem loans and the adverse impact of their much publicized
affiliation with the Bank of Credit and Commerce International (BCCI).  On
June 23, 1992, the Partnership reached an agreement with the Bank and
received $9,325,000 for the buy-out of the Bank's over-lease obligations. 
The $9,325,000 was concurrently remitted to the lender to reduce the
mortgage note secured by the property.  The Partnership ceased making
monthly debt service payments effective July 1, 1992 and continued to seek
to restructure the mortgage note.  Prior to the sale, the lender and the
Partnership agreed to a non-binding term sheet which allowed the
Partnership to participate in proceeds from a sale of the Property.  The
term sheet stipulated that after payment of the remaining outstanding
principal balance of approximately $18,166,000, the Partnership would
receive $500,000 with any remaining sale proceeds allocated 60% to the
lender (as a payment of previously accrued interest) and 40% to the
Partnership.  Additionally, pursuant to the term sheet, the Partnership
agreed to remit to the lender all cash flow from operations of the Property
commencing July 1, 1992 through the date of sale (approximately $6,350,000)
as an additional payment on previously accrued interest.

     The mortgage note has been classified as a current liability in the
accompanying consolidated financial statements at December 31, 1996.


     21900 BURBANK BOULEVARD BUILDING

     In March 1996, the lender realized upon its security and took title to
the property in full satisfaction of the loan secured by the property.

     The Partnership approached the lender during 1995 regarding a
modification of the loan (scheduled to mature December 1, 1996) due to the
anticipated repair and re-leasing costs expected to be incurred at the
property.  The lender was not willing to provide such a modification and
notified the Partnership of its default under certain provisions of the
loan agreement.  The Partnership decided not to commit additional amounts
to the property and ceased making debt service payments commencing with the
November 1995 payment.  As a result, the lender realized upon its security
interest in the property in 1996.  This resulted in the Partnership no
longer having an ownership interest in the property.



<PAGE>


     The property was classified as held for sale or disposition as of
January 1, 1996, and therefore, was not subject to continued depreciation. 
The accompanying consolidated financial statements for 1996 include
$4,000,000 as a cumulative effect of an accounting change to record value
impairment to reflect the then estimated fair value of the property, less
costs to sell and $4,622,203 of extraordinary gain on extinguishment of
debt upon the lender taking title to the property in March 1996.  The
Partnership also had a gain for Federal income tax purposes of
approximately $1,324,000 in 1996.

     The 21900 Burbank Building sustained some damage as a result of the
earthquakes that occurred in southern California on January 17, 1994.  On
February 22, 1995, the City Council of the City of Los Angeles passed an
ordinance relating to the repair of welded steel moment frame buildings in
an area of the city that includes the 21900 Burbank Building.   The
Partnership was unable to make a complete determination of the requirements
to comply with the ordinance at the time of the issuance of the
Partnership's 1994 consolidated financial statements.  It was estimated at
that time that the cost of compliance with the ordinance could be
approximately $1 million, which was reflected as property operating
expenses in the 1994 consolidated financial statements.

     During April 1995, the Partnership received notice from the City which
required submission of a report indicating the number of welded connections
damaged and proposed repair procedures.  Based upon the findings and cost
estimates of independent structural engineers, it was estimated that the
cost of making the necessary repairs would only be approximately $100,000. 
No amounts were paid prior to the lender taking title to the property. 
Accordingly, property operating expenses recorded in 1994 of $1 million
have been reversed in the Partnership's 1995 consolidated financial
statements.

     SPRINGBROOK SHOPPING CENTER

     The Springbrook Shopping Center was approximately 53% occupied at the
end of 1996 and operated at a deficit in 1996.  The Partnership decided not
to commit significant additional amounts to the property and ceased making
monthly debt service payments in June 1996.  Accordingly, the mortgage loan
with a scheduled maturity of April 1997 and a principal balance of
$10,932,588 had been classified as a current liability at December 31,
1996.  The property was classified as held for sale or disposition as of
April 1, 1996, and therefore, the property was no longer subject to
depreciation after such date.  Also, commencing in June 1996, all net cash
flow from the property was being escrowed with the lender.  Principal and
interest payments in arrears as of December 31, 1996 were approximately
$323,000.  As a result of the non-payment of debt service, the lender
realized upon its security and took title, in January 1997, to the property
in full satisfaction of the loan secured by the property.  The Partnership
recognized a gain for financial reporting purposes of $3,433,368 and a loss
for Federal income tax purposes of $4,923,280 in 1997.

     The Partnership finalized in November 1995 the sale of an outparcel to
a major bank which resulted in sales proceeds of approximately $924,000 and
a net gain for financial reporting purposes of $509,777.

     WOODLAND HILLS APARTMENTS

     On May 22, 1996, the Partnership sold the Woodland Hills apartment
complex to an unaffiliated third party for $12,225,000 less selling costs
of approximately $282,000.  A portion of the sales proceeds was utilized to
retire the mortgage debt with an outstanding balance of approximately
$8,175,000.  As a result of the sale, the Partnership recognized a gain of
$1,749,814 for financial reporting purposes and recognized a gain of
approximately $7,300,000 for Federal income tax purposes in 1996.



<PAGE>


     The first and second mortgage loans secured by the Woodland Hills
Apartments matured November 1, 1994 and June 1, 1994, respectively.  On
November 2, 1994, the Partnership refinanced the first and second mortgage
loans with the lender of the second mortgage loan.  The new non-recourse
first mortgage loan in the amount of $8,175,000 required monthly payments
of interest only at a rate of 4% above the lender's commercial paper rate
(approximately 6.05% at December 31, 1995) and had a scheduled maturity of
October 1, 1997.

     As a result of the sale of the property in May 1996, the Partnership
was obligated to pay an incentive management fee of approximately
$1,730,000, all of which was paid at December 31, 1997.  The Partnership
has reduced its recognized gain by the incentive fee.

     As the Partnership had committed to a plan to sell the property, the
property was classified as held for sale or disposition as of January 1,
1996, and therefore, was not subject to continued depreciation.

     BOATMEN'S

     During 1989 the joint venture defaulted on the mortgage loan secured
by the property, and the lender obtained title to the property.  As a
result, the Partnership has no further ownership interest in the property.

     During 1990, the Partnership accepted non-interest bearing promissory
notes totalling $2,325,000 as settlement for certain claims against the
joint venture partner.  As of December 31, 1997, the Partnership has
received cash payments totalling $1,910,937 and scheduled payments are
delinquent in the amount of $414,063.  To preserve its legal rights, the
Partnership issued notices of default in 1993 as no amounts have been
collected since such date.  The Partnership has recognized revenue on the
settlement to the extent of the cash collected.  There is no assurance that
the remaining delinquent amounts will be collected.

     CALIFORNIA PLAZA

     Effective March 1, 1993, the joint venture ceased making the scheduled
debt service payments on the mortgage loan secured by the property which
was scheduled to mature on January 1, 1997.  Subsequently, the Partnership
made partial debt service payments based on net cash flow of the property
through December 1993 when an agreement was reached with the lender to
modify the loan by reducing the pay rate.  The loan modification reduced
the monthly payments to $384,505, effective with the March 1, 1993 payment.

The maturity date was extended, as a result of this modification, to
January 1, 2000 when the unpaid balance of principal and interest is due
(including the difference between the accrual rate of 10.375% and pay rate
of 8% per annum).  Additionally, the joint venture entered into a cash
management agreement which requires monthly net cash flow to be escrowed
(as defined).  The excess (of approximately $8,347,000) of the monthly cash
flow paid from March 1993 to December 1997 above the 8% interest pay rate
has been put into escrow for the payment of insurance premiums, real estate
taxes, and to fund a reserve account to be used to cover future costs,
including tenant improvements, lease commissions, and capital improvements,
approved by the lender.  A portion of such funds are reserved for the
payment of deferred interest and principal on the mortgage loan. 
Approximately $6,697,000 of the escrowed funds have been used to cover such
costs.  The remaining escrow balance of approximately $1,650,000 at
December 31, 1997 is reflected in escrow deposits and restricted securities
in the accompanying consolidated financial statements.  Payments are made
from the reserve amounts (none paid at December 31, 1997) if the reserve
balance exceeds $2,120,000 at any time.  The joint venture also was
required to fund $500,000 into the reserve account in connection with the
loan modification.



<PAGE>


     The property was classified as held for sale or disposition as of
December 31, 1996, and therefore, has not been subject to continued
depreciation.  The Partnership recorded a provision for value impairment of
$7,200,000 as of January 1, 1996 to reflect the then estimated fair value
of the property based upon an analysis of discounted cash flows of the
property over the expected holding period.

     In June 1995, the venture entered into a seven year direct lease with
Maxis Inc. for approximately 38,500 square feet of space on the sixth floor
of the building previously occupied by a major tenant (Liquid Air).  Liquid
Air paid the venture $3,740,000 (of which $2,745,058 relates to future lost
rents and of which the unamortized amount of $1,515,928 is included in
deferred income and other current liabilities in the accompanying
consolidated financial statements as of December 31, 1997) as a lease
amendment fee in June 1995 and guaranteed the obligations under the Maxis
lease up to $1,500,000 through its original expiration date of January
2001.  Liquid Air will remain obligated for lease payments on approximately
55,000 square feet on the third and seventh floors under its original lease
terms.  It is currently attempting to sub-lease a portion of this space. 
The $3,740,000 amendment fee was applied as follows (i) $2,112,200 was
remitted to the lender to reduce the principal balance on the mortgage
loan, (ii) $999,100 used to pay for leasing costs associated with the Maxis
lease, and (iii) $628,700 was placed into the reserve account.

     In 1995, the venture received approximately $1,410,000 in full
settlement proceeds from a lawsuit filed against Dillingham, the general
contractor of the property, and several of the subcontractors ($150,000 was
received in 1994).  The funds will generally be used for necessary building
repairs.  As of December 31, 1997, approximately $1,146,000 of the proceeds
have been spent on necessary repairs with the remaining balance of
approximately $377,000 included in accounts payable at December 31, 1997.

     Pursuant to the terms of a tenant lease at Cal Plaza, promissory notes
(for certain sub-leasing costs) aggregating $707,009 were issued by the Cal
Plaza joint venture to a tenant of the investment property.  Commencing on
July 1, 1990 and on each July 1st thereafter until the notes are paid in
full, one tenth of the original principal balance together with 12% annual
interest on the outstanding balance of the notes shall be payable.  The
joint venture partner is obligated to pay 40% of the amounts owed under the
promissory notes and the Partnership is obligated to pay 60% of such
amounts.  During June 1995, June 1996, and July 1997, $70,701 of principal
was paid and $43,336, $34,948 and $26,368 of interest, respectively, was
paid to the tenant from cash flow generated from operations of the
property.  As of December 31, 1997, the outstanding balance of the notes
was $149,032, which is included in other current liabilities and other
liabilities.

     160 SPEAR STREET BUILDING

     Tenant leases comprising approximately 69% of the building expired in
1995.  Lease renewals and new leases were likely to be at rental rates less
than the rates on existing leases due to rental concessions and other
factors.  In addition, new leases were expected to require expenditures for
lease commissions and tenant improvements prior to occupancy.  As a result,
the Partnership decided not to commit any additional funds for anticipated
re-leasing costs since the recovery of such amounts would be remote.

     During 1992, the venture reached an agreement with the mortgage lender
to modify and extend the mortgage notes secured by the 160 Spear Street
investment property, which was scheduled to mature on December 10, 1992. 
The maturity of the notes were extended to February 10, 1999. 
Additionally, the venture was required to escrow net cash flow (as defined)
thirty days following each quarter end which could have been withdrawn for
expenditures approved by the lender, by the lender upon default of the
notes or by the venture on February 10, 1997 when the escrow agreement was
scheduled to terminate.  At December 31, 1995, $210,136 had been placed in
the escrow account, and $170,985 had been withdrawn for expenditures
approved by the lender.



<PAGE>


     The venture approached the lender for an additional loan modification
due to anticipated re-leasing costs which were expected to be incurred at
the property.  However, the lender indicated that it was not willing to
provide an additional modification.  The venture ceased making its monthly
debt service payments effective June 1, 1995 and in July 1995, reached an
agreement whereby all cash flow from the property was deposited in a
lockbox controlled by the lender until title was transferred.  On January
25, 1996, the lender concluded proceedings to realize upon its security and
took title to the property.  

     The property was classified as held for sale or disposition as of
January 1, 1996, and therefore, was not subject to continued depreciation. 
The accompanying consolidated financial statements include $26,000,000 as
the cumulative effect of an accounting change to record value impairment as
the carrying value of the property was reduced to its estimated fair value
based upon the application of an appropriate capitalization rate to the net
operating income of the property.  In addition, the Partnership recognized
$31,158,453 of extraordinary gain on extinguishment of debt for financial
reporting and a gain of approximately $9,450,000 for Federal income tax
purposes with no corresponding distributable proceeds in 1996.     

     PIPER JAFFRAY TOWER

     In 1984, the Partnership acquired, through JMB/Piper, with C-XIV, an
interest in a 42-story office building known as the Piper Jaffray Tower in
Minneapolis, Minnesota with the developer and certain limited partners.  In
April 1986, JMB/Piper II, a joint venture partnership between the
Partnership and C-XIV, acquired the developer's interest in the OB Joint
Venture.  JMB/Piper holds its interest in the property through three
existing joint ventures (OB Joint Venture, OB Joint Venture II and 222
South Ninth Street Limited Partnership, together "Piper").  The terms of
the JMB/Piper and JMB/Piper II venture agreements generally provide that
JMB/Piper's and JMB Piper II's respective shares of Piper's annual cash
flow, sale or refinancing proceeds and profits and losses will be
distributed or allocated to the Partnership in proportion to its 50% share
of capital contributions.

     JMB/Piper invested approximately $19,915,000 for its 71% interest in
Piper.  JMB/Piper is obligated to loan amounts to Piper to fund operating
deficits (as defined).  The loans bear interest at a rate of not more than
14.36% per annum, provide for payments of interest only from net cash flow,
if any, and are repayable from net sale or refinancing proceeds.  Such
loans and accrued interest were approximately $110,458,000 and $95,764,000
at December 31, 1997 and 1996, respectively.

     The property is subject to a mortgage loan in the principal amount of
$100,000,000 of which approximately $96,127,000 is outstanding as of
December 31, 1997.  Under the terms of a modification agreement with the
lender, in addition to fixed interest on the mortgage notes secured by the
Piper Jaffray Tower, contingent interest is payable in annual installments
on April 1 computed at 50% of gross receipts, as defined, for each fiscal
year in excess of $15,200,000.  No such contingent interest was due for the
years ended December 31, 1995, 1996 or 1997.  In addition, to the extent
the investment property generates cash flow after payment of the fixed
interest on the mortgage, contingent interest, if any, leasing and capital
costs, and 25% of the ground rent, such amount will be paid to the lender
as a reduction of the principal balance of the mortgage loan.  The excess
cash flow payments remitted to the lender for 1995 and 1996 totalled
$464,178 and $741,627, respectively.  During 1997, excess cash flow
generated under this agreement was $385,523 which is expected to be
remitted to the lender during the second quarter of 1998.  On a monthly
basis, Piper deposits the property management fee into an escrow account to
be used (including interest earned thereon) for future leasing costs to the
extent cash flow is not sufficient to cover such items.  To date, no escrow


<PAGE>


funds have been required to be used for leasing costs.  The escrow balance
as of December 31, 1997 is approximately $4,722,000.  The manager of the
property (which was an affiliate of the Corporate General Partner through
November 1994) has agreed to defer receipt of its management fee until a
later date.  As of December 31, 1997, the manager has deferred
approximately $3,852,000 ($1,839,000 of which represents deferred fees due
to affiliates through November 1994) of management fees.  If upon sale or
refinancing as discussed below, there are funds remaining in this escrow
after payment of amounts owed to the lender, such funds will be paid to the
manager to the extent of its deferred and unpaid management fees.  Any
remaining unpaid management fees would be payable out of Piper's share of
sale or refinancing proceeds.  Additionally, pursuant to the terms of the
loan modification, effective January 1992, OB Joint Venture, as majority
owner of the underlying land, began deferring receipt of its share of land
rent.  These deferrals will be payable from net sale or refinancing
proceeds, if any.

     Furthermore, repayment of the loan is subject to a prepayment fee
ranging from 6% to 1% through the maturity date as well as an amount that
will provide the lender with an internal rate of return from 12.75% to
13.59% out of proceeds from the sale or refinancing of the property.  After
the prepayment fees, the lender participates in any remaining sale or
refinancing proceeds.  For financial reporting purposes, through
December 31, 1995, additional interest expense had been accrued at a rate
of 13.59% per annum.  During 1996 and 1997, interest expense of $10,250,000
was recognized at the loan's stated payment rate.  Additionally, based on
the Partnership's estimate of the value of the building at December 31,
1997, it was determined that the lender is not expected to receive the
entire balance of the loan and interest that Piper had accrued based on the
above mentioned internal rate of return, contingent upon the sale or
refinancing of the property.  Therefore, in 1997, $18,600,000 of such
interest was reversed and charged to operations.  Total indebtedness,
including interest under the mortgage loan, is approximately $99,769,000
and $119,111,000 at December 31, 1997 and 1996, respectively.  Under the
current terms of the modified debt, there must be a significant improvement
in the current market and property operating conditions resulting in a
significant increase in value of the property in order for JMB/Piper to
share in any future net sale or refinancing proceeds.  During 1997,
JMB/Piper, on behalf of Piper, explored refinancing alternatives with the
lender.  The lender has indicated that it is not willing to accept a
discounted payoff of its loan, which would be necessary to refinance it. 
However, JMB/Piper intends to pursue further discussions with the lender
concerning possible refinancing and/or loan modification alternatives.  Any
refinancing or modification of the loan is expected to require a payment by
Piper to reduce the outstanding principal and/or accrued interest on the
loan.  However, the Partnership will not contribute its share of funds for
such purpose unless, among other things, the Partnership believes that upon
sale of the property the Partnership will receive a return of such funds
and a reasonable rate of return thereon.  There is no assurance that any
refinancing or modification of the loan will be obtained.

     The Piper venture agreements provide that any net cash flow, as
defined, will be used to pay principal and interest on the operating
deficit loans (as described above) with any excess generally distributable
71% to JMB/Piper and 29% to the venture partners, subject to certain
adjustments (as defined).  In general, operating profits or losses are
allocated in relation to the economic interests of the joint venture
partners.  Accordingly, operating profits (excluding depreciation and
amortization) were allocated 71% to the JMB/Piper and 29% to the venture
partners during 1997, 1996 and 1995.

     The Piper venture agreements further provide that, in general, upon
any sale or refinancing of the property, the principal and any accrued
interest outstanding on any operating deficit loans are to be repaid out of
net proceeds.  Any remaining proceeds will be distributable 71% to
JMB/Piper and 29% to the joint venture partners, subject to certain
adjustments, as defined.



<PAGE>


     During the fourth quarter 1991, Larkin, Hoffman, Daly & Lindgren, Ltd.
(23,344 square feet) approached Piper indicating it was experiencing
financial difficulties and desired to give back a portion or all of its
leased space.  Larkin's lease was scheduled to expire in January 2005 and
provided for annual rental payments which were significantly higher than
current market rental rates.  Larkin was also a limited partner with
partial interests in the building and the land under the building.  On
January 15, 1992, Piper agreed to terminate Larkin's lease in return for
its partial interest in the land under the building and a  $1,011,798 note
receivable.  The note receivable provides for monthly payments of principal
and interest at 8% per annum with full repayment over ten years.  Larkin
may prepay all or a portion of the note at any time.  As of the date of
this report, all amounts due under the note have been received.  The
balance of the note receivable as of December 31, 1997 is $529,262.

     The property was classified as held for sale or disposition as of
September 30, 1997 in the accompanying financial statements and, therefore,
was not subject to continuing depreciation.

     JMB/900

     In 1984, the Partnership acquired, through JMB/900, with C-XIV, an
interest in an existing joint venture ("Progress Partners") which owns a
36-story office building known as the 900 Third Avenue Building in New
York, New York.  The partners of Progress Partners were the developer of
the property ("PPI") and an original affiliate of PPI ("JRA") and JMB/900. 
In 1986, PPI transferred a portion of its interest to another partnership
("PC-900") in which it and a major tenant of the building (Central National
Bank) were partners.  In 1987 the bank failed and the Federal Deposit
Insurance Corporation ("FDIC") assumed its position as a limited partner in
PC-900.  The current partners of Progress Partners are PPI, JRA and PC-900
(together "Venture Partners") and JMB/900.

     The terms of the JMB/900 venture agreement generally provide that
JMB/900's share of Progress Partners' cash flow, sale or refinancing
proceeds and profits and losses will be distributed or allocated to the
Partnership in proportion to its 33-1/3% share of capital contributions.

     JMB/900 has made capital contributions to Progress Partners and
certain payments to an affiliate of the developer, in the aggregate amount
of $18,270,000, subject to the obligation to make additional capital
contributions as described below.

     JMB/900 has also made a loan to PPI in the amount of $20,000,000 which
is secured by the Venture Partners' interest in Progress Partners.  The
loan bears interest at the rate of 16.4% per annum and is payable in
monthly installments of interest only until maturity on the earlier of the
sale or refinancing of the property or August 2004.  For financial
reporting purposes, the loan is classified as an additional investment in
Progress Partners and any related interest received would be accounted for
as distributions (none in 1995, 1996 and 1997).  The source of funds from
which PPI was expected to pay interest were the Guaranteed Payments,
discussed below.

     The Progress Partners venture agreement provides that  the venture is
required to pay the Venture Partners a stated return of $3,285,000 per
annum payable quarterly (the "Guaranteed Payments").  Generally, JMB/900 is
required to contribute funds to the venture, to the extent net cash flow is
not sufficient, to enable the venture to make the Guaranteed Payments.  As
a result of the lawsuit discussed below, such amounts have not been
contributed by JMB/900 to pay the Venture Partners and interest has not
been received by JMB/900 on the $20,000,000 loan discussed above.  



<PAGE>


     Under the terms of the Progress Partners' venture agreement, the
Venture Partners are generally entitled to receive a non-cumulative
preferred return of net cash flow (net after the $3,285,000 per annum
Guaranteed Payments to the Venture Partners discussed above) of
approximately $3,414,000 per annum, with any remaining net cash flow
distributable 49% to JMB/900 and 51% to the Venture Partners.

     The Progress Partners venture agreement further provides that net sale
or refinancing proceeds are distributable to JMB/900 and the Venture
Partners, on a pro rata basis, in an amount equal to the sum of any
deficiencies in the receipt of their respective cumulative preferred
returns of net cash flow plus certain contributions to the venture made by
JMB/900 to pay for the Venture Partners' Guaranteed Payments.  Next,
proceeds will be distributable to the Venture Partners in an amount equal
to $20,000,000.  JMB/900 is entitled to receive the next $21,000,000 and
the Venture Partners will receive the next $42,700,000.  Any remaining net
proceeds are to be distributed 49% to JMB/900 and 51% to the Venture
Partners.  As discussed above, the $20,000,000 loan to the Venture Partners
matures upon sale or refinancing (under certain conditions) of the
property.  The $20,000,000 distribution level to the Venture Partners would
be used to pay off the $20,000,000 loan from JMB/900.  Furthermore, to the
extent that JMB/900 has not received annual distributions equal to the
interest payable on the $20,000,000 loan discussed above, JMB/900's
preferred return deficiency is increased by the amounts not received.

     Operating profits, in general, are allocated 49% to JMB/900 and 51% to
the Venture Partners.  Operating losses, in general, are allocated 90% to
JMB/900 and 10% to the Venture Partners.

     As a result of certain defaults by PPI, an affiliate of the General
Partners assumed management responsibility for the 900 Third Avenue
building as of August 1987 for a fee computed as a percentage of certain
revenues.  In December 1994, the affiliated property manager entered into a
sub-management contract with an unaffiliated third party.  Pursuant to the
sub-management agreement, the unaffiliated property manager is managing the
property.

     Through December 31, 1991, it was necessary for JMB/900 to contribute
approximately $4,364,000 ($2,909,000 of which was contributed by the
Partnership) to pay past due property real estate taxes and to pay certain
costs, including litigation settlement costs, which were the responsibility
of one of the Venture Partners under the terms of the joint venture
agreement to the extent such funds were not available from the investment
property.  In July 1989, JMB/900 filed a lawsuit in Federal court against
the former manager and the Venture Partners to recover the amounts
contributed and to recover for certain other joint venture obligations on
which the Venture Partners had defaulted.  This lawsuit was dismissed on
jurisdictional grounds.  Subsequently, however, the FDIC filed a complaint,
since amended, in a lawsuit against PPI, JRA, JMB/900, and other
unaffiliated defendants, which has enabled JMB/900 to refile its previously
asserted claims against the Venture Partners as part of that lawsuit in
Federal court.  There is no assurance that JMB/900 will recover the amounts
of its claims as a result of the litigation.  Due to the uncertainty, no
amounts in addition to the amounts advanced to date, noted above, have been
recorded in the financial statements.

    During the fourth quarter of 1996, The State of Maryland Deposit
Insurance Fund Corporation (the "MDIFC") commenced an action against PPI
and JRA to collect on a certain note receivable by foreclosing its security
interest in PPI and JRA's interest in Progress Partners.  The trial court
in that action has entered summary judgment in favor of MDIFC for in excess
of $6 million and authorized MDIFC to conduct a sale of PPI's and JRA's
interest in Progress Partners. MDIFC then entered into an agreement with
JMB/900 which provided that if MDIFC acquired those interests at the sale,
MDIFC would convey those interests to JMB/900.  MDIFC's scheduled sale was
cancelled as a result of the bankruptcy filing of JRA and PPI discussed
below.  After the scheduled sale was cancelled, an affiliate of PPI
purchased MDIFC's claims.  As a result, there are no assurances that the
agreement with MDIFC or its successor will be consummated.


<PAGE>


     Concurrent with the lawsuit filed by the MDIFC, FDIC has filed two
additional lawsuits against JMB/900, PPI, JRA, and other non-affiliated
defendants, in an attempt, among other things, to obtain a legal resolution
of competing claims made as to the interests in PC-900 and to challenge the
consent given by JMB/900 in 1990 to allow MDIFC, in the event it acquired
PPI and JRA's interest through foreclosure, to become a partner of Progress
Partners.  JMB/900 has been discussing a settlement with the FDIC in which
JMB/900 would purchase the interest of the FDIC and/or PC-900 in Progress
Partners.  If a settlement is not achieved and the FDIC pursues these
actions, JMB/900 intends to vigorously defend itself.

     In December, 1997, two of the Venture Partners, JRA and PPI, filed for
bankruptcy in order to prevent the foreclosure of their interests by MDIFC.

Since the bankruptcy filing, an affiliate of PPI has effected a settlement
with MDIFC by purchasing its claims.  JMB/900 is presently pursuing its
claims against the Venture Partners in the bankruptcy forum and is
attempting to either foreclose on or buy-out the interests of the Venture
Partners in the venture, or to otherwise dispose of those interests
pursuant to a bankruptcy plan.  The Venture Partners have threatened to
assert claims against the venture and JMB/900 including claims for unpaid
Guaranteed Payments in the purported amount of $36 million.  JMB/900 denies
that such claims are due and owing and contends that, in any event, such
claims are offset by PPI's failure to pay interest on the $20 million loan
discussed above in the amount of approximately $36 million.  To the extent
that JMB/900 is required to make contributions to pay for any part of the
purported claim for Guaranteed Payments, a portion of the Guaranteed
Payments actually paid may be allocated to other unsecured creditors of PPI
and JRA and, therefore, JMB/900 may not be returned the full amount of the
interest due on the $20 million loan.  However, JMB/900's contributions
would create a preferred return level payable out of future net cash flow
or net sale or refinancing proceeds.  Furthermore, JMB/900 has taken the
position that to the extent that is has not received annual distributions
equal to the interest payable on the $20,000,000 loan discussed above,
JMB/900's preferred return deficiency is increased by the amounts not
received, but the Venture Partners have disputed this characterization.

     In 1994, JMB/900, on behalf of Progress Partners, successfully
completed an extension to December 1, 2001 of its mortgage loan, which
matured on December 1, 1994.  Pursuant to the loan extension, net cash flow
(as defined) after debt service and capital expenditures and after
repayment of costs associated with and deposits made by Progress Partners
in connection with the loan extension (totaling approximately $3,229,000 of
which approximately $1,335,000 was advanced to Progress Partners by
JMB/900) was paid into an escrow account controlled by the lender. Such
escrow including interest earned thereon can be used by Progress Partners
for releasing costs associated with leases which expire in 1999 and 2000
(approximately 240,000 square feet of space).  The remaining proceeds in
this escrow plus interest earned thereon, if any, will be released to the
Progress Partners once 90% of such leased space has been renewed or
released.  As of July 1996, all of the amounts advanced by Progress
Partners have been repaid to Progress Partners and subsequently distributed
to JMB/900 (of which the Partnership's share was approximately $2,000,000).

The escrow balance at December 31, 1997 is approximately $4,658,000.

     The Partnership will not commit additional capital to this property
unless, among other things, it believes that upon sale of the property, the
Partnership will receive a return of such funds and a reasonable rate of
return thereon.

     WELLS FARGO CENTER - SOUTH TOWER

     In June 1985, the Partnership acquired an interest in a joint venture
partnership ("South Tower") which owns a 44-story office building in Los
Angeles, California.  The joint venture partners of the Partnership
included Carlyle Real Estate Limited Partnership-XIV ("Affiliated
Partner"), one of the sellers of the interests in South Tower, and another
unaffiliated venture partner.



<PAGE>


     The Partnership and the Affiliated Partner purchased their interests
for $61,592,000.  In addition, the Partnership and the Affiliated Partner
made capital contributions to South Tower totaling $48,400,000 for general
working capital requirements and certain other obligations of South Tower. 
The Partnership's share of the purchase price, capital contributions (net
of additional financing) and interest thereon totaled $53,179,000.

     The terms of the original South Tower agreement generally provided
that the Partnership and Affiliated Partner's aggregate share of the South
Tower's annual cash flow, net sale or refinancing proceeds, and profits and
losses be distributed or allocated to the Partnership and the Affiliated
Partner in proportion to their aggregate capital contributions.

     Annual cash flow was to be distributed 80% to the Partnership and
Affiliated Partner and 20% to another partner until the Partnership and the
Affiliated Partner have received, in the aggregate, a cumulative preferred
return of $8,050,000 per annum.  The remaining cash flow was to be
distributable 49.99% to the Partnership and the Affiliated Partner, and the
balance to the other joint venture partners.  Additional contributions to
South Tower were contributed 49.99% by the Partnership and the Affiliated
Partner until all partners had contributed $10,000,000 in aggregate.

     Operating profits and losses, in general, were to be allocated 49.99%
to the Partnership and the Affiliated Partner and the balance to the other
joint venture partners.  Substantially all depreciation and certain
expenses paid from the Partnership's and Affiliated Partner's capital
contributions were to be allocated to the Partnership and Affiliated
Partner.  In addition, operating profits, up to the amount of any annual
cash flow distribution, were allocated to all partners in proportion to
such distributions of annual cash flow.

     In general, upon sale or refinancing of the property, net sale or
refinancing proceeds would be distributed 80% to the Partnership and the
Affiliated Partner and 20% to another partner until the Partnership and the
Affiliated Partner have received the amount of any deficiency in their
preferred return described above plus an amount equal to their "Disposition
Preference" (which, in general, begins at $120,000,000 and increases
annually by $8,000,000 to a maximum of $200,000,000).  Any remaining net
sale or refinancing proceeds would be distributed 49.99% to the Partnership
and the Affiliated Partner and the remainder to the other partners.

     The office building is being managed by an affiliate of one of the
venture partners under a long-term agreement pursuant to which the
affiliate is entitled to receive a monthly management fee of 2-1/2% of
gross project income, a tenant improvement fee of 10% of the cost of tenant
improvements, and commissions on new leases.

     The mortgage note secured by the property (with a balance of
approximately $178,221,000 and accrued interest of approximately $1,488,000
as of December 31, 1997), matured December 1, 1994.  The Partnership and
the joint venture had been in discussions with the lender regarding an
extension of the mortgage note.  The venture continued to make interest
payments to the lender under the original terms of the mortgage note and
was required to escrow all available cash flow.  In the fourth quarter of
1996, the joint venture and the lender reached an agreement to modify the
mortgage note.  The agreement provides that the mortgage note secured by
the property be extended to September 2003 at an interest rate of 10% with
all excess cash flow being escrowed for future tenant improvements and
principal payments.  In addition, upon sale or refinancing of the property
subsequent to September 1, 1999, the mortgage loan requires payment of
participation interest (as defined) of any excess proceeds.  The mortgage
lender received a $2,000,000 extension fee paid by the venture partners in
their ownership percentages (of which the Partnership's share was
$650,000).



<PAGE>


     The promissory note secured by the Partnership's interest in the joint
venture matured December 1, 1994.  The Partnership had been in discussion
with the lender regarding an extension of the promissory note.  The
Partnership had ceased making debt service payments on the promissory note.

In the fourth quarter of 1996, the Partnership reached an agreement with
the lender to modify the promissory note (with a principal balance of
$22,750,000 and accrued interest of approximately $5,800,000 prior to
modification).  The Partnership's amended and restated promissory note has
an adjusted principal balance of approximately $40,830,000 consisting of
the original principal loan balance, unpaid accrued interest, the
Partnership's share of the mortgage loan extension fee and a restructuring
fee of approximately $11,600,000.  The promissory note is due September
2003 and accrues interest at 17% per annum.  The loan requires payments of
cash flow distributed by the venture from either property operations or
sales proceeds as well as a portion of the property management fee paid to
the venture partner.  The loan is secured solely by the Partnership's
interest in the property.

     In conjunction with the note modifications, the South Tower was
converted to a limited liability company with members' interests in the
same ratio as the prior venture ownership interests.  The conversion of the
Partnership's interest to a member's interest in a limited liability
company eliminates any potential additional obligation of the Partnership
in the future to provide additional funds under the previous joint venture
agreement.  As a result, previously recognized losses of $10,620,944 have
been reversed and the Partnership's 1997 share of income (approximately
$286,000) has not been recognized as such amount is not considered
realizable.

     At maturity of the loan, it is not anticipated that further
modifications  or extensions can be obtained.  This would likely result in
the Partnership no longer having an ownership interest in the property, and
in such event would result in a gain for Federal income tax purposes with
no corresponding distributable proceeds.  Since the terms of the agreements
make it unlikely that the Partnership would recover any incremental
investment, the Partnership has decided not to commit any significant
additional amounts to the property.

     JMB/125

     In December 1985, the Partnership, through the JMB/125 joint venture
partnership, acquired an interest in an existing joint venture partnership
("125 Broad") which owned a 40-story office building, together with a
leasehold interest in the underlying land, located at 125 Broad Street in
New York, New York.  In addition to JMB/125, the other partners (the "O&Y
partners") of 125 Broad include O&Y 25 Realty Company L.P., Olympia & York
Broad Street Holding Company L.P. (USA) and certain other affiliates of
Olympia & York Development, Ltd. ("O&Y").

     In November 1994, the Partnership through its indirect ownership of
JMB/125 assigned its interest in the 125 Broad Street Building to the
venture partners.

     JMB/125 was a joint venture between Carlyle-XV Associates, L.P. (in
which the Partnership holds a 99% limited partnership interest), Carlyle-
XVI Associates, L.P. and Carlyle Advisors, Inc.  The Partnership held
indirectly through Carlyle-XV Associates, L.P., an approximate 60% limited
partnership interest in JMB/125.  The general partner in each of JMB/125
and Carlyle-XV Associates, L.P. is an affiliate of the Partnership.  For
financial reporting purposes, profits and losses of JMB/125 are generally
allocated 60% to the Partnership.  The terms of the JMB/125 venture
agreement generally provide that JMB/125's share of 125 Broad's annual cash
flow and sale or refinancing proceeds would be distributed or allocated to
the Partnership in proportion to its indirect approximate 60% share of
capital contributions to JMB/125.



<PAGE>


     Due to the O&Y partners' previous failure to advance necessary funds
to 125 Broad as required under the joint venture agreement, 125 Broad in
June 1992 defaulted on certain mortgage obligations on November 15, 1994,
effective as of October 31, 1994, JMB/125 and certain affiliates of O&Y
reached an agreement to settle their disputes regarding 125 Broad and its
property.  Under the terms of the agreement, JMB/125 assigned its interest
in 125 Broad to an affiliate of O&Y and released the O&Y partners from any
claims related to 125 Broad.  In return, JMB/125 received an unsecured
promissory note in the principal amount of $5 million bearing simple
interest at 4.5% per annum with all principal and accrued interest due at
maturity in October 1999, subject to mandatory prepayments of principal and
interest or acceleration of the maturity date under certain circumstances. 
As of December 31, 1994, the note had been fully reserved for by JMB/125. 
In addition, JMB/125 received a release from any claims of certain O&Y
affiliates and generally was to be indemnified against any liability as a
general partner of 125 Broad.  JMB/125 was also relieved of any obligation
to contribute cash to 125 Broad in the amount of its deficit capital
account balance.  Affiliates of O&Y subsequently filed a prearranged
bankruptcy plan for reorganization of 125 Broad under Chapter 11 of the
Bankruptcy Code in order to facilitate 125 Broad's transfer of the office
building to the mortgage lender in satisfaction of the mortgage debt and
other claims.  In January 1995, the plan for reorganization was approved by
the bankruptcy court, was consummated, and the bankruptcy case was
concluded.  As a result of the assignment of its interest, JMB/125 no
longer has an ownership interest in the office building. 

     In October 1995, the makers of the $5 million promissory note payable
to JMB/125 filed for protection from creditors under Chapter 11 of the
Bankruptcy Code.  Pursuant to the bankruptcy reorganization of the makers
of the note, JMB/125, as an unsecured creditor, received limited
partnership interests and a convertible note receivable in a reorganized
entity that has majority or controlling interests in six office buildings
in New York, New York and Boston, Massachusetts.  The assigned value, as of
the bankruptcy confirmation date, of the interests and note received by
JMB/125 was approximately $400,000.  The convertible note was fully
reserved due to the uncertainty of the realizable value of the note.  In
June 1997, the convertible note receivable for $297,000 was collected on by
JMB/125 resulting in the recognition of gain, of which the Partnership's
share is $174,654.

     JMB/NEWPARK

     In December 1986, the Partnership, through the JMB/NewPark joint
venture partnership, acquired an interest in an existing joint venture
partnership ("NewPark Associates") with the developer which owns an
interest in an existing enclosed regional shopping center in Newark,
California known as NewPark Mall.  JMB/NewPark invested $32,500,000 for its
50% interest in NewPark Associates.  In December 1995, the developer
transferred its interest in NewPark Associates to a new venturer which is
affiliated with the developer.

     The NewPark Mall secured a mortgage note payable in the principal
amount of $50,620,219 that was originally due on November 1, 1995.  Monthly
payments of interest only of $369,106 were due through November 30, 1993. 
Commencing on December 1, 1993 through October 30, 1995, principal and
interest were due in monthly payments of $416,351 with a final balloon
payment due November 1, 1995.  In October 1995, JMB/NewPark was granted a
loan extension until December 15, 1995.  Interest on the note payable
accrued at 8.75% per annum.  On December 21, 1995, NewPark Associates
obtained a new mortgage loan with an institutional lender.  The new
mortgage loan in the principal amount of $60,000,000 is due on December 31,
2000.  The loan provides for monthly interest-only payments of $357,500. 
Interest on the non-recourse loan accrues at 7.15% per annum.

     A portion of the proceeds from the note payable was used to pay the
outstanding balance, including accrued interest, under the previous
mortgage note payable.  The Partnership's share of net refinancing proceeds
(after payment of the previous mortgage note payable and costs and fees
relating to the refinancing) was $4,815,000.


<PAGE>


     The NewPark Associates partnership agreement provides that JMB/NewPark
and the joint venture partner are each entitled to receive 50% of profits
and losses, net cash flow and net sale or refinancing proceeds of NewPark
Associates and are each obligated to advance 50% of any additional funds
required under the terms of the NewPark Associates partnership agreement. 
In December 1995, the joint venture partner sold and assigned its interest
in NewPark Associates to a third party, who was admitted as the new venture
partner.

     As a result of the acquisition by Federated Department Stores of the
company which owned the Emporium Capwell store at NewPark, Federated, which
also owns the Macy's store at NewPark, approached the NewPark joint venture
regarding a sale of the Emporium building.  Simultaneously with its
negotiations to acquire the Emporium Capwell building, the NewPark joint
venture negotiated to sell the building to a national retail store owner. 
The transactions closed on April 22, 1997 and the joint venture received a
lease termination fee of approximately $2,187,000, of which the
Partnership's share was approximately $984,000. 

     In response to uncertainty concerning the NewPark joint venture's
ability to recover the net carrying value of the NewPark Mall investment
property through future operations or sale and since the NewPark joint
venture expected to dispose of the property not later than 1999, the
NewPark joint venture, in accordance with SFAS 121, recorded a provision
for value impairment at June 30, 1996 in the amount of $8,600,000 of which
the Partnership's share is $3,780,000.  Such provision was recorded to
reduce the venture's carrying value of the investment property to the then
estimated fair market value of the property based upon an analysis of
discounted estimated future cash flows over the projected holding period.

     The portion of the shopping center owned by NewPark Associates was
managed by the former joint venture partner under a long-term agreement
pursuant to which it was obligated to manage the property and collect all
receipts from operations of the property.  In December 1995, the former
joint venture partner assigned its interest in the management agreement to
the new venture partner.  The manager is paid a management fee equal to 4%
of the fixed and percentage rent.  An amendment to the management agreement
provides that the new manager will pay to an affiliate of the General
Partner of the Partnership an annual consulting fee in the amount of
$100,000 in consideration for assisting NewPark Associates and the new
venture partner in the evaluation of property budgets, and leasing and
long-term strategies for NewPark Mall.  Such consulting fee is paid out of
the management fee noted above.

     260 FRANKLIN (Disposed 1/2/98)

     In May 1986, the Partnership, through the 260 Franklin joint venture
partnership, acquired an interest in an office building in Boston,
Massachusetts known as the 260 Franklin Street Building.

     The property was subject to a first mortgage loan in the original
principal amount of approximately $75,000,000.  260 Franklin's original
cash investment (exclusive of acquisition costs) was approximately
$35,000,000 of which the Partnership's share was approximately $24,500,000.

     An affiliate of the General Partner managed the property until
December 1994 for a fee computed at 3% of the property's gross receipts. 
Beginning January 1, 1992, 260 Franklin Street is escrowing the payment of
property management fees and leasing commissions to the affiliate pursuant
to the terms of the debt modification described below.  In December 1994,
the affiliated property manager sold substantially all of its assets and
assigned its interest in its management contracts to an unaffiliated third
party.  The property was then managed by the purchaser of the affiliate's
assets on the same terms provided in the property management agreement,
with the payment of the management fees guaranteed by JMB in 1995. 
Beginning in January 1996, the unaffiliated property manager was paid
management fees by the property.  Reference is made to the Notes to the
Financial Statements of 260 Franklin Street Associates.


<PAGE>


     The long-term mortgage note secured by the 260 Franklin Street
Building, as modified in December 1991, provided for monthly payments of
interest only based upon the then outstanding balance at a rate of 8% per
annum.  Upon maturity, 260 Franklin was obligated to pay an amount
sufficient to provide the lender with an 11% per annum yield on the
mortgage note from January 1, 1991.  In addition, upon maturity, 260
Franklin was obligated to pay to the lender a residual interest amount
equal to 60% of the highest amount, if any, of (i) net sales proceeds, (ii)
net refinancing proceeds, or (iii) net appraisal value, as defined.  260
Franklin has been required to (i) escrow excess cash flow from operations
(computed without a deduction for property management fees and leasing
commissions), beginning in 1991, to cover future cash flow deficits, (ii)
make an initial contribution to the escrow account of $250,000, of which
the Partnership's share was $175,000, and (iii) make annual escrow
contributions, through January 1995, of $150,000, of which the
Partnership's share was $105,000.  The escrow account ($202,378 at
December 31, 1997 including accrued interest) was to be used to cover the
cost of capital and tenant improvements and lease inducements
(approximately $5,045,000 used as of December 31, 1997) as defined.  The
balance of the escrowed funds remaining at December 31, 1997 was used for
the payment of interest due to the lender as described above.

     The long-term mortgage loan in the original principal amount of
approximately $75,000,000 matured January 1, 1996.  260 Franklin, as of
such date, began submitting the net operating cash flow of the property to
the lender while seeking an extension or refinancing of the loan.  The
joint venture reached an agreement with the lender for an extension of the
mortgage loan through January 1, 1997 and again through January 1, 1998. 
In addition to substantially the same terms as were in effect prior to such
extensions, the agreement required that the property submit net operating
cash flow of the property to the lender.  In addition, the lender had
indicated that it would not extend the loan beyond January 1, 1998.  260
Franklin and the Partnership believed that the value of the office building
was less than the mortgage loan, and the Partnership did not intend to
expend any additional funds of its own on the property.  Accordingly, 260
Franklin entered negotiations with the lender and an unaffiliated third
party regarding the sale of the property to the unaffiliated third party. 
Effective January 1, 1998, the joint venture entered into a loan
modification agreement with the lender in which the lender waived accrued
unpaid interest owed for the period prior to January 1, 1998, which was
approximately $17,200,000.

     On January 2, 1998, 260 Franklin Street Associates disposed of,
through a trust, the land, building and related improvements of the 260
Franklin Street Building.  260 Franklin transferred title to the land,
building and improvements, and all other assets and liabilities related to
the property in consideration of a discharge of the mortgage loan and
receipt of $200 in cash.  260 Franklin expects to recognize in 1998 a gain
on sale of approximately $23,200,000, in part as a result of previous
impairment losses recognized by the joint venture in 1996 aggregating
$17,400,000, and an extraordinary gain on forgiveness of indebtedness of
approximately $17,200,000 for financial reporting purposes, all of which
will be included in the consolidated financial statements of the
Partnership.  In addition, 260 Franklin expects to recognize a gain of
approximately $25,200,000 for Federal income tax reporting purposes, of
which the Partnership's share is approximately $17,600,000, with no
distributable proceeds in 1998.  260 Franklin and the Partnership have no
future liability for any representations, warranties or covenants to the
purchaser as a result of the sale.

     The office market in the Financial District of Boston remains
competitive due to the new office building developments and lay-offs,
cutbacks and consolidations by financial service companies.  The effective
rental rates achieved upon re-leasing have been substantially below the
rates which were received under the previous leases for the same space. 
Therefore, the Partnership and 260 Franklin venture recorded a provision


<PAGE>


for value impairment of $17,400,000 as of January 1, 1996 to reflect the
then estimated fair value of the property based upon the use of an
appropriate capitalization rate applied to the property's net operating
income.  Due to the lender negotiations described above, the property had
been classified as held for sale or disposition as of July 1, 1997, and
therefore, was not subject to continued depreciation after such date.

     VILLAGES NORTHEAST

     The first mortgage loan secured by the Dunwoody Crossing Phase I and
III Apartments was scheduled to mature in October 1994.  The joint venture
owning the property negotiated an extension of the mortgage loan until
November 15, 1997.  Based upon the pending maturity of the loan, the
Partnership began marketing the property for sale.  Accordingly, the
property was classified as held for sale or disposition as of January 1,
1996 and therefore had not been subject to continued depreciation.

     On May 7, 1996, the Partnership sold (through the Villages Northeast
venture) the Dunwoody apartment complex to the unaffiliated venture
partner, pursuant to such venture partner's right of first refusal,  for
$47,000,000 less brokerage commissions, transfer taxes and legal fees of
approximately $470,000.  Approximately $30,900,000 of the sales proceeds
was utilized to retire the mortgage debt including a prepayment penalty of
approximately $435,000 (of which the Partnership's share of approximately
$304,453 is reported as an extraordinary item in the 1996 Consolidated
Financial Statements).  Additionally, approximately $787,000 (of which the
Partnership's share was approximately $551,000) was paid to the State of
Georgia on behalf of the Holders of Interests for withholding tax related
to the sale.  As a result of the sale, the Partnership recognized a gain of
approximately $10,500,000 for financial reporting purposes for the year
ended December 31, 1996 and a gain of approximately $17,500,000 for Federal
income tax purposes in 1996.  The Partnership made a distribution of $25
per Interest from its share of the net sales proceeds of this sale in May
1996.  In 1997, the Partnership recognized a gain of approximately $269,000
for financial reporting purposes resulting from the liquidation of Villages
Northeast.

     EASTRIDGE MALL

     On June 30, 1995, the Partnership sold its 90% limited partnership
interest in Eastridge which owns the land, building and related
improvements of the Eastridge Mall located in Casper, Wyoming.  The
purchaser, Price Development Company, Limited Partnership, was the
Partnership's joint venture partner in Eastridge and is not affiliated with
the Partnership or its General Partners.

     The purchaser paid $24,075,000 (before prorations) at closing, of
which $23,403,992 was used to retire the mortgage note secured by the
property and accrued interest with the balance representing the deemed sale
price of the Partnership's interest in Eastridge.  The Partnership received
net proceeds (before prorations) of $671,006 on June 30, 1995.  As a result
of the sale, the Partnership recognized gains of $6,275,248 for financial
reporting purposes and $9,110,293 for Federal income tax purposes in 1995.

     OWINGS MILLS

     In December 1985, the Partnership, through the JMB/Owings joint
venture partnership, acquired an interest in an existing joint venture
partnership ("Owings Mills") which owns an interest in an enclosed regional
shopping center.  JMB/Owings's original cash investment was $7,000,000, of
which the Partnership's share was $3,500,000.  On June 30, 1993, JMB/Owings
sold its interest in Owings Mills Shopping Center as described below.



<PAGE>


     JMB/Owings sold its partnership interest in Owings Mills to an
affiliate of the Partnership's unaffiliated joint venture partners.  The
sale price of the interest was $9,416,000, all of which was received in the
form of a promissory note.  In addition, the Partnership and Carlyle-XVI
were relieved of their allocated portion of the debt secured by the
property.  The promissory note (which is secured by a guaranty from an
affiliate of the purchaser and the unaffiliated joint venture partner)
bears interest at a rate of 7% per annum subject to increase to 8% per
annum for the remainder of the term of the note.  The promissory note
requires principal and interest payments of approximately $109,000 per
month with the remaining principal balance of approximately $5,500,000 due
and payable on June 30, 1998.  The monthly installment of principal and
interest would be adjusted for the increase in the interest rate if
applicable.  Early prepayment of the promissory note may be required under
certain circumstances, including the sale or further encumbrance of Owings
Mills Mall.

     The net cash proceeds and gain from sale of the interest was allocated
50% to the Partnership and 50% to Carlyle-XVI in accordance to the
JMB/Owings partnership agreement.  For financial reporting purposes,
JMB/Owings recognized, on the date of sale, gain of $5,254,855, of which
the Partnership's share is $2,627,427, attributable to JMB/Owings being
relieved of its obligations under the Owings Mills partnership agreement
pursuant to the terms of the sale agreement.  JMB/Owings adopted the cost
recovery method until such time as the purchaser's initial investment was
sufficient in order to recognize additional gain under Statement of
Financial Accounting Standards No. 66 ("SFAS #66").  At December 31, 1994,
the total deferred gain of JMB/Owings including principal and interest
payments of $1,858,572 received through December 31, 1994 was $10,305,310
of which the Partnership's share was $5,152,655.  As JMB/Owings collected a
sufficient amount of the purchaser's initial investment, at March 31, 1995,
the joint venture adopted the installment method for recognition of
deferred gain.  JMB/Owings recognized $787,942, $870,121 and $1,713,501 of
deferred gain and $494,172, $527,237 and $1,501,936 of interest income for
the years ended December 31, 1997, 1996 and 1995, respectively, of which
the Partnership's share of deferred gain was $393,971, $435,060 and
$856,750 and the Partnership's share of interest income was $247,086,
$263,619 and $750,968, respectively.

LONG-TERM DEBT

     Long-term debt consists of the following at December 31, 1997 and
1996:
                                                    1997            1996   
                                                ------------    -----------
13.875% mortgage note; secured by the 
 RiverEdge Place Building; monthly 
 payments of $302,821 were due through 
 December 1, 1995; the outstanding 
 balance of principal and accrued 
 interest was due January 1, 1996; 
 in default since July 1992, satisfied
 in 1997 at sale of the property . . . . . .    $     --         18,166,294

17.0% promissory note; secured by the
 Partnership's interest in the Wells
 Fargo Center South Tower office building
 in Los Angeles, California; principal
 and accrued interest due September 2003 . .     48,725,194      41,991,536

11.0% mortgage note (in default); 
 secured by the 260 Franklin Street 
 Building; monthly payments of 
 interest only of $374,455 are due 
 from June 1991 through January 1, 
 1992, monthly payments of interest 
 only of $499,273 are due from 
 February 1, 1992 through December 1, 


<PAGE>


                                                    1997            1996   
                                                ------------    -----------
 1995, the unpaid balance of 
 approximately $74,891,013 plus 
 unpaid accrued interest is due on 
 January 1, 1998.  Additional interest 
 payable upon maturity to provide 
 an 11% return to lender and 60% of 
 the greater of net sales or refinancing 
 proceeds or appraised value, as 
 defined, discharged in 1998 in 
 conjunction with the assignment of
 title to the property to an
 affiliate of the lender . . . . . . . . . .     92,117,086      89,870,356

10.375% mortgage note; secured by the 
 California Plaza Building; principal 
 and interest payments of $525,136 were 
 due monthly from February 1, 1992 
 through December 1, 1996; the unpaid 
 balance of principal and interest of 
 approximately $56,673,315 was due on 
 January 1, 1997; modified in December 1993 
 to require interest only payments of 
 $384,505 (8.00%) due monthly effective 
 February 1993 through January 1, 2000; 
 interest accrues at 10.375% through 
 January 1, 2000 when the unpaid principal 
 and interest is due . . . . . . . . . . . .     61,247,778      60,098,432

9.53% mortgage note (in default); secured 
 by the Springbrook Shopping Center; 
 monthly payments of interest only are 
 required through May 1, 1995; principal 
 and interest payments of $92,735 are due 
 monthly from June 1, 1995 through April 1, 
 1997; the unpaid balance of principal 
 and interest of approximately $10,951,198 
 was scheduled to be due on May 1, 1997,
 satisfied in January 1997 as the lender
 realized upon its collateral security . . .          --         10,932,588
                                                ------------   ------------

     Total debt. . . . . . . . . . . . . . .     202,090,058    221,059,206
     Less current portion 
       of long-term debt . . . . . . . . . .      92,117,086    118,969,238
                                                ------------   ------------

     Total long-term debt. . . . . . . . . .    $109,972,972    102,089,968
                                                ============   ============

     Included in the above total long-term debt is $10,129,734 and
$19,514,170 for 1997 and 1996, respectively, which represents interest
accrued but not currently payable pursuant to the terms of the notes.

     Five year maturities of long-term debt are as follows:

                    1998 . . . . . . .   $ 92,117,086
                    1999 . . . . . . .          --   
                    2000 . . . . . . .     61,247,778
                    2001 . . . . . . .          --   
                    2002 . . . . . . .          --   



<PAGE>


PARTNERSHIP AGREEMENT

     Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are allocated 96% to the Holders
of Interests and 4% to the General Partners.  Profits from the sale or
other dispositions of investment properties will be allocated first to the
General Partners in an amount equal to the greater of the General Partners'
share of cash distributions from the proceeds of any such sale or other
dispositions (as described below) or 1% of the total profits from any such
sales or other dispositions, plus an amount which will reduce deficits (if
any) in the General Partners' capital accounts to a level consistent with
the gain anticipated to be realized from the sale of investment properties.

Losses from the sale or other disposition of investment properties will be
allocated 1% to the General Partners.  The remaining sale or other
disposition profits and losses will be allocated to the Holders of
Interests.

     The General Partners are not required to make any additional capital
contributions except under certain limited circumstances upon dissolution
and termination of the Partnership.  "Net cash receipts" from operations of
the Partnership will be allocated 90% to the Holders of Interests and 10%
to the General Partners (of which 6.25% constitutes a management fee to the
Corporate General Partner for services in managing the Partnership).

     The Partnership Agreement provides that subject to certain conditions,
the General Partners shall receive as a distribution of the proceeds (net
after expenses and liabilities and retained working capital) from the sale
or refinancing of a real property by the Partnership of up to 3% of the
selling price for any property sold, and that the remaining proceeds be
distributed 85% to the Holders of Interests and 15% to the General
Partners.  However, prior to such distribution being made, the Holders of
Interests are entitled to receive 99% and the General Partners l% of net
sale or refinancing proceeds until the Holders of Interests (i) have
received cash distributions of "sale proceeds" or "refinancing proceeds" in
an amount equal to the Holders' aggregate initial capital investment in the
Partnership and (ii) have received cumulative cash distributions from the
Partnership's operations which, when combined with "sale proceeds" or
"refinancing proceeds" previously distributed, equal a 6% annual return on
the Holders' average capital investment for each year (their initial
capital investment as reduced by "sale proceeds" or "refinancing proceeds"
previously distributed) commencing with the third fiscal quarter of 1986. 
The Holders of Interests have not yet received and are not expected to
receive cash distributions of net sale or refinancing proceeds in an amount
equal to their initial capital investment in the Partnership.  If upon the
completion of the liquidation of the Partnership and the distribution of
all Partnership funds, the Holders of Interests have not received the
amounts in (i) and (ii) above, the General Partners will be required to
return all or a portion of the 1% distribution of net sale or refinancing
proceeds described above in an amount equal to such deficiency in payments
to the Holders of Interests pursuant to (i) and (ii) above.  As of the date
of this report, the General Partners have received net sale or refinancing
proceeds aggregating $170,311.


MANAGEMENT AGREEMENTS

     Certain of the Partnership's properties are managed by affiliates of
the General Partners or their assignees for fees computed as a percentage
of certain rents received by the properties.  In December 1994, one of the
affiliated property managers sold substantially all of its assets and
assigned its interest in its management contracts to an unaffiliated third
party.  In addition, certain of the management personnel of the property
manager became management personnel of the purchaser and its affiliates. 
The successor to the affiliated property manager has acted or is acting as
property manager of the 260 Franklin Street Building, the Dunwoody Crossing
Apartments (through its sale in May 1996) and the RiverEdge Place Building
(through its sale in December 1997) on the same terms that existed prior to
the assignment of the management contracts.  In connection with such
transaction, an affiliate of the Corporate General Partner has previously


<PAGE>


guaranteed the payments to the successor manager of certain property
management fees.  As a result, property management fees for the 260
Franklin Street Building are being paid currently to the successor manager
pursuant to the guarantee.  In addition, the affiliated property manager
has entered into a sub-management agreement with the successor for
management of the 900 Third Avenue Building.


NOTES RECEIVABLE

     In 1987 and 1988, the Partnership advanced funds to pay for certain
deficits at the 21900 Burbank Boulevard Building which were the obligation
of an affiliate of the seller.  Such advances, including unpaid interest,
were approximately $2,313,000.  The Partnership received demand notes from
the seller which are personally guaranteed by certain of its principals. 
The seller had been paying interest on the note at a rate equal to 3% over
the prime rate.  In February 1991, the seller ceased paying monthly
interest required under terms of the note.  The Partnership put the seller
in default and effective October 31, 1991, the notes began accruing
interest at the default rate.  During 1994, two of the principals which
guaranteed the notes became subject to Chapter 7 bankruptcy proceedings. 
Subsequently, these individual's obligations, including their obligations
under the notes, were discharged.  Additionally, it appears that the
remaining principals guaranteeing the notes have little or no assets which
the Partnership could pursue for collection.  Therefore, it appears
unlikely that any further amounts will be collected.  As a matter of
prudent accounting policy, a reserve for uncollectibility for the entire
amount recorded for financial reporting purposes ($1,466,051) has been
reflected in the accompanying consolidated financial statements at
December 31, 1997 and 1996.

LEASES

     At December 31, 1997, the Partnership and its consolidated ventures'
principal assets are two office buildings.  The Partnership has determined
that all leases relating to these properties are properly classified as
operating leases; therefore, rental income is reported when earned and the
cost of each of the properties, excluding cost of land, is depreciated over
the estimated useful lives until such time the property is considered held
for sale or disposition at which time depreciation is no longer taken. 
Leases with commercial tenants range in term from one to 30 years and
provide for fixed minimum rent and partial to full reimbursement of
operating costs.

     Cost or carrying value and accumulated depreciation of the leased
assets are summarized as follows at December 31, 1997:

               Office buildings:
                 Cost or carrying value. . . . . .     $151,882,698
                 Accumulated depreciation. . . . .       56,276,386
                                                       ------------
                         Total . . . . . . . . . .     $ 95,606,312
                                                       ============

     Minimum lease payments, (excluding the 260 Franklin Street office
building which was sold in January 1998), including amounts representing
executory costs (e.g., taxes, maintenance, insurance), and any related
profit in excess of specific reimbursements, to be received in the future
under the above operating commercial lease agreements, are as follows:

                    1998 . . . . . . . . . .      $ 5,911,823
                    1999 . . . . . . . . . .        5,648,641
                    2000 . . . . . . . . . .        5,304,971
                    2001 . . . . . . . . . .        3,299,126
                    2002 . . . . . . . . . .        2,310,334
                    Thereafter . . . . . . .        2,209,474
                                                  -----------
                        Total. . . . . . . .      $24,684,369
                                                  ===========


<PAGE>


TRANSACTIONS WITH AFFILIATES

     The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments.  Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of December 31, 1997, 1996 and 1995 are as follows:

                                                               UNPAID AT  
                                                              DECEMBER 31,
                              1997         1996      1995        1997     
                            --------     -------   --------   ------------
Property management 
 and leasing fees. . . . .  $  9,246      66,560    409,364     1,510,131 
Insurance commissions. . .    15,019       9,330     34,148        --     
Reimbursement (at cost) 
 for accounting services .    18,963      11,760    191,026        7,420  
Reimbursement (at cost)
 for portfolio manage-
 ment services . . . . . .    52,248      89,867     88,673       11,647  
Reimbursement (at cost)
 for legal services. . . .    15,008      17,775     17,883        2,911  
Reimbursement (at cost)
 for administrative
 charges and other 
 out-of-pocket expenses. .        77       --       207,711        --     
                            --------     -------  ---------    ---------  
                            $110,561     195,292    948,805    1,532,109  
                            ========     =======  =========    =========  

     Through November of 1994, certain of the properties owned by the
Partnership's consolidated and unconsolidated ventures were managed by an
affiliate of the Corporate General Partner.  Included in accounts payable
are amounts due to affiliates of $2,186,007 at December 31, 1997 and
December 31, 1996, which consists of management fees and leasing
commissions of $1,510,131 (included in the table above) and advances of
$675,876 payable to the affiliated manager.  The cumulative deferred
amounts do not bear interest and are expected to be paid in future periods.

    The affiliate also managed Piper Jaffray Tower prior to December 1994,
and pursuant to the terms of a loan modification, agreed to defer receipt
of its property management fees earned of approximately $1,839,000 as of
December 31, 1997 (of which the Partnership's share is approximately
$919,500).  The unconsolidated venture's obligation to the affiliate is not
reflected in the Consolidated Balance Sheets as of December 31, 1997 and
December 31, 1996.

     Effective January 1, 1994, certain officers and directors of the
Corporate General Partner acquired interests in a company which, among
other things, had provided management services to Erie McClurg Park
Facility (sold in September 1992).  In connection with the sale of Erie
McClurg, a management termination agreement was reached which requires the
Partnership to make monthly payments to such company.  Such acquisition had
no effect on the fees payable by the Partnership under any existing
agreements with such company.  The amount paid in 1997 was $40,587.

     During 1994 and 1993, an affiliate of the Corporate General Partner
provided management and leasing services.  In December 1994, the affiliate
sold substantially all of its assets and assigned its interest in its
management contracts, including the one for 260 Franklin Street, to an
unaffiliated third party.  In connection with such assignment, JMB Realty
Corporation ("JMB") guaranteed payment to the unaffiliated third party of
the property management fees for the 260 Franklin property in 1995. 
Beginning in January 1996, the unaffiliated property manager is being paid
management fees by the property.  As of December 31, 1997, $1,510,131 of
management and leasing fees were unpaid.


<PAGE>


INVESTMENT IN UNCONSOLIDATED VENTURES

     Summary financial information for Wells Fargo Center - South Tower,
JMB/Piper, JMB/Piper II and JMB/900, for the years ended 1997 and 1996
follows:
                                            1997              1996     
                                        ------------      ------------ 

Current assets . . . . . . . . . . .    $ 23,287,185        17,459,859 
Current liabilities. . . . . . . . .     (16,569,351)      (15,433,192)
                                        ------------      ------------ 
    Working capital (deficit). . . .       6,717,834         2,026,667 
                                        ------------      ------------ 
Other assets . . . . . . . . . . . .      47,147,715        50,683,300 
Deferred expenses. . . . . . . . . .       5,533,720         5,955,360 
Investment properties, net . . . . .     294,054,919       305,457,813 
Other liabilities. . . . . . . . . .      (2,820,441)       (6,116,980)
Long-term debt . . . . . . . . . . .    (364,925,620)     (393,926,331)
Venture partners' equity . . . . . .       5,859,891        18,323,819 
                                        ------------      ------------ 
    Partnership's capital (deficit).    $ (8,431,982)      (17,596,352)
                                        ============      ============ 
Represented by:
  Invested capital . . . . . . . . .    $148,108,615       148,108,615 
  Cumulative distributions . . . . .     (49,903,117)      (49,903,117)
  Cumulative losses. . . . . . . . .    (106,637,480)     (115,801,850)
                                        ------------      ------------ 
                                        $ (8,431,982)      (17,596,352)
                                        ============      ============ 
Total income . . . . . . . . . . . .    $ 87,541,408        88,175,915 
Expenses applicable to 
  operating loss . . . . . . . . . .      66,800,486        91,621,900 
                                        ------------      ------------ 
Operating loss . . . . . . . . . . .      20,740,922        (3,445,985)
                                        ------------      ------------ 
Net earnings (loss). . . . . . . . .    $ 20,740,922        (3,445,985)
                                        ============      ============ 

     The total income, expenses applicable to operating loss and net income
(loss) for the above ventures for the year ended December 31, 1995 were
$86,827,114, $100,056,848 and $(11,516,223), respectively.

     During 1996, as a result of the restructuring at Wells Fargo Center -
South Tower, the Partnership reversed previously recognized losses from the
unconsolidated venture.  The Partnership's capital (deficit) in Wells Fargo
Center - South Tower differs from its investment in the unconsolidated
venture as reflected in the accompanying financial statements due to the
Partnership's 1996 reversal of previously recognized losses.  The
Partnership's 1997 share of income from Wells Fargo Center - South Tower
(approximately $286,000) has not been recognized as such amount is not
considered realizable.



<PAGE>


<TABLE>                              CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV                    SCHEDULE III     
                                                (A LIMITED PARTNERSHIP)
                                               AND CONSOLIDATED VENTURES
                                 CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                   DECEMBER 31, 1997
<CAPTION>
                                                                  COSTS    
                                                               CAPITALIZED 
                                      INITIAL COST TO         SUBSEQUENT TO       GROSS AMOUNT AT WHICH CARRIED      
                                      PARTNERSHIP (A)        TO ACQUISITION           AT CLOSE OF PERIOD (B)         
                                 --------------------------  --------------------------------------------------------
                                  LAND AND      BUILDINGS       LAND AND         LAND AND    BUILDINGS               
                                  LEASEHOLD       AND         BUILDINGS AND     LEASEHOLD       AND                  
DESCRIPTION        ENCUMBRANCE    INTERESTS    IMPROVEMENTS   IMPROVEMENTS       INTEREST   IMPROVEMENTS     TOTAL   
-----------       ------------   -----------   ------------   -------------     ----------  ------------  -----------
<S>              <C>            <C>           <C>           <C>                <C>         <C>          <C>          
OFFICE BLDGS:

260 Franklin Street
 Boston, Massac-                                                    (E)    
 husetts (D) . . .  92,117,086     8,169,209     97,607,593    (22,851,658)      5,501,887    77,423,257   82,925,144

</TABLE>


<PAGE>


<TABLE>
                                     CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV        SCHEDULE III - CONTINUED     
                                                (A LIMITED PARTNERSHIP)
                                               AND CONSOLIDATED VENTURES
                                 CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                   DECEMBER 31, 1997
<CAPTION>
                                                                                       LIFE ON WHICH 
                                                                                       DEPRECIATION  
                                                                                        IN LATEST    
                                                                                          INCOME              1997   
                                  ACCUMULATED              DATE OF         DATE         STATEMENT         REAL ESTATE
                                 DEPRECIATION(H)        CONSTRUCTION     ACQUIRED     IS COMPUTED (C)        TAXES   
                                ----------------        ------------    ----------    ---------------     -----------
<S>                            <C>                     <C>              <C>           <C>                <C>         
OFFICE BUILDINGS:

 260 Franklin Street
  Boston, Massachusetts
  (D). . . . . . . . . . . . .        32,953,960            1985          05/21/86         5-30 years       2,276,824

</TABLE>


<PAGE>


<TABLE>
                                     CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV        SCHEDULE III - CONTINUED     
                                                (A LIMITED PARTNERSHIP)
                                               AND CONSOLIDATED VENTURES
                                 CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                   DECEMBER 31, 1997
<CAPTION>
                                                                  COSTS    
                                                               CAPITALIZED 
                                      INITIAL COST TO         SUBSEQUENT TO       GROSS AMOUNT AT WHICH CARRIED      
                                      PARTNERSHIP (A)        TO ACQUISITION           AT CLOSE OF PERIOD (B)         
                                 --------------------------  --------------------------------------------------------
                                  LAND AND      BUILDINGS       LAND AND         LAND AND    BUILDINGS               
                                  LEASEHOLD       AND         BUILDINGS AND     LEASEHOLD       AND                  
                   ENCUMBRANCE    INTERESTS    IMPROVEMENTS   IMPROVEMENTS       INTEREST   IMPROVEMENTS     TOTAL   
                  ------------   -----------   ------------   -------------     ----------  ------------  -----------
<S>              <C>            <C>           <C>           <C>                <C>         <C>          <C>          

California Plaza
 Walnut Creek,                                                       (F)   
 California (D). .  61,247,778     6,010,604     62,029,222         917,728      5,132,408    63,825,146   68,957,554
                  ------------    ----------    -----------    -----------      ----------   -----------  -----------
    Total. . . . .$153,364,864    14,179,813    159,636,815    (21,933,930)     10,634,295   141,248,403  151,882,698
                  ============    ==========    ===========    ===========      ==========   ===========  ===========
</TABLE>


<PAGE>


<TABLE>
                                     CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV        SCHEDULE III - CONTINUED     
                                                (A LIMITED PARTNERSHIP)
                                               AND CONSOLIDATED VENTURES
                                 CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                   DECEMBER 31, 1997

<CAPTION>
                                                                                       LIFE ON WHICH 
                                                                                       DEPRECIATION  
                                                                                        IN LATEST    
                                                                                         INCOME               1997   
                                  ACCUMULATED              DATE OF         DATE         STATEMENT         REAL ESTATE
                                 DEPRECIATION(H)        CONSTRUCTION     ACQUIRED    IS COMPUTED (C)         TAXES   
                                ----------------        ------------    ----------    ---------------     -----------
<S>                            <C>                     <C>              <C>           <C>                <C>         
California Plaza
 Walnut Creek, 
 California (D). . . . . . . .        23,322,426            1985          06/30/86         5-30 years         538,356
                                     -----------                                                            ---------
    Total. . . . . . . . . . .        56,276,386                                                            2,815,180
                                     ===========                                                            =========
<FN>

Notes:
      (A)  The initial cost to the Partnership represents the original purchase price of the properties,
including amounts incurred subsequent to acquisition which were contemplated at the time the property was
acquired.
      (B)  The aggregate cost of real estate owned at December 31, 1997 for Federal income tax purposes was 
           $175,794,843.
      (C)  Certain of the Partnership's investment properties have been classified as held for sale or
disposition during 1996 and 1997 as more fully described in the Notes.
      (D)  Properties owned and operated by joint venture.
      (E)  In 1990 and 1996, the Partnership recorded a provision for value impairment.  The portion allocated to
real estate totalled $17,120,734 and $17,400,000, respectively.
      (F)  In 1996, the Partnership recorded a provision for value impairment.  The portion allocated to real
estate totalled $7,200,000.
</TABLE>


<PAGE>


<TABLE>
                                   CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV      SCHEDULE III - CONTINUED     
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES
                               CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                 DECEMBER 31, 1997

     (G)  Reconciliation of real estate owned as of December 31, 1997, 1996 and 1995:

<CAPTION>
                                                                        1997            1996             1995    
                                                                    ------------     -----------     ----------- 
<S>                                                                <C>             <C>             <C>           
      Balance at beginning of period . . . . . . . . . . . . . . .  $187,262,501     334,836,768     367,553,814 
      Additions during period. . . . . . . . . . . . . . . . . . .     3,524,500       2,011,678         872,103 
      Provisions for value impairment. . . . . . . . . . . . . . .         --        (49,528,382)           --   
      Sales and dispositions during period . . . . . . . . . . . .   (38,904,303)   (100,057,563)    (33,589,149)
                                                                    ------------     -----------     ----------- 

      Balance at end of period . . . . . . . . . . . . . . . . . .  $151,882,698     187,262,501     334,836,768 
                                                                    ============     ===========     =========== 

(H)   Reconciliation of accumulated depreciation:

      Balance at beginning of period . . . . . . . . . . . . . . .  $ 68,586,254     104,766,634     106,168,986 
      Depreciation expense . . . . . . . . . . . . . . . . . . . .     1,187,772       5,413,953      10,440,946 
      Sales and dispositions during period . . . . . . . . . . . .   (13,497,640)    (41,594,333)    (11,843,298)
                                                                    ------------     -----------     ----------- 

      Balance at end of period . . . . . . . . . . . . . . . . . .  $ 56,276,386      68,586,254     104,766,634 
                                                                    ============     ===========     =========== 

</TABLE>


<PAGE>














                       INDEPENDENT AUDITORS' REPORT


The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV:

     We have audited the combined financial statements of JMB/Piper I
Associates ("JMB/Piper") and JMB/Piper II Associates ("JMB/Piper II"),
unconsolidated ventures of Carlyle Real Estate Limited Partnership - XV
("Partnership") as listed in the accompanying index.  In connection with
our audits of the combined financial statements, we also have audited the
combined financial statement schedule listed in the accompanying index. 
These combined financial statements and combined financial statement
schedule are the responsibility of the General Partners of the Partnership.

Our responsibility is to express an opinion on these combined financial
statements and combined financial statement schedule based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by the General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis for
our opinion.

     In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial position
of JMB/Piper and JMB/Piper II, unconsolidated ventures of Carlyle Real
Estate Limited Partnership - XV as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1997, in conformity with generally
accepted accounting principles.  Also in our opinion, the related combined
financial statement schedule, when considered in relation to the basic
combined financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.







                                            KPMG PEAT MARWICK LLP          


Chicago, Illinois
March 25, 1998



<PAGE>


<TABLE>
                                JMB/PIPER I ASSOCIATES AND JMB/PIPER II ASSOCIATES
                     (UNCONSOLIDATED VENTURES OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV)

                                              COMBINED BALANCE SHEETS

                                            DECEMBER 31, 1997 AND 1996

                                                      ASSETS
                                                      ------
<CAPTION>
                                                                                 1997               1996    
                                                                             ------------       ----------- 
<S>                                                                         <C>                <C>          
Current assets:
  Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . .      $   733,133            73,641 
  Rents and other receivables, net of allowances 
    for doubtful accounts of approximately $209,421
    and $142,812 for 1997 and 1996, respectively . . . . . . . . . . . .          163,356           (35,672)
  Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .           55,276            55,276 
  Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . .        4,721,865         3,933,246 
                                                                             ------------       ----------- 
          Total current assets . . . . . . . . . . . . . . . . . . . . .        5,673,630         4,026,491 
                                                                             ------------       ----------- 
Investment property - Schedule III:
  Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --            4,766,320 
  Buildings and improvements . . . . . . . . . . . . . . . . . . . . . .            --          112,068,994 
  Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . .            --          (46,882,483)
                                                                             ------------       ----------- 
          Total property held for investment, 
            net of accumulated depreciation. . . . . . . . . . . . . . .            --           69,952,831 
                                                                             ------------       ----------- 
  Property held for sale or disposition. . . . . . . . . . . . . . . . .       67,644,328             --    
                                                                             ------------       ----------- 
          Total investment property. . . . . . . . . . . . . . . . . . .       67,644,328        69,952,831 
                                                                             ------------       ----------- 
Venture partners' deficit in ventures. . . . . . . . . . . . . . . . . .       21,325,813        20,198,437 
Note receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . .          528,452           621,095 
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . .        1,755,023         1,968,673 
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . .        1,928,536         2,852,703 
                                                                             ------------       ----------- 
                                                                             $ 98,855,782        99,620,230 
                                                                             ============       =========== 




<PAGE>


                                JMB/PIPER I ASSOCIATES AND JMB/PIPER II ASSOCIATES
                     (UNCONSOLIDATED VENTURES OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV)

                                        COMBINED BALANCE SHEETS - CONTINUED

                                    LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
                                    ------------------------------------------

                                                                                 1997               1996    
                                                                             ------------       ----------- 
Current liabilities:
  Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . .     $  4,338,264         4,421,610 
  Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .        5,414,041         3,565,144 
  Long-term debt - principal reduction accrual . . . . . . . . . . . . .          385,523           741,627 
  Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . .           20,915             8,295 
                                                                             ------------       ----------- 
          Total current liabilities. . . . . . . . . . . . . . . . . . .       10,158,743         8,736,676 
                                                                             ------------       ----------- 
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . .           10,311             8,406 
Long-term debt - accrued contingent interest . . . . . . . . . . . . . .        3,642,763        22,242,763 
Long-term debt, less current portion . . . . . . . . . . . . . . . . . .       95,741,149        96,126,672 

Commitments and contingencies
                                                                             ------------       ----------- 
          Total liabilities. . . . . . . . . . . . . . . . . . . . . . .      109,552,966       127,114,517 
                                                                             ------------       ----------- 
Partners' capital accounts:
  Carlyle-XV:
    Capital contributions. . . . . . . . . . . . . . . . . . . . . . . .       32,536,784        32,536,784 
    Cumulative income (loss) . . . . . . . . . . . . . . . . . . . . . .      (23,655,536)      (32,054,087)
    Cumulative cash distributions. . . . . . . . . . . . . . . . . . . .      (14,225,051)      (14,225,051)
                                                                             ------------       ----------- 
                                                                               (5,343,803)      (13,742,354)
                                                                             ------------       ----------- 
  Venture Partners:
    Capital contributions. . . . . . . . . . . . . . . . . . . . . . . .       32,527,205        32,527,205 
    Cumulative income (loss) . . . . . . . . . . . . . . . . . . . . . .      (23,655,535)      (32,054,087)
    Cumulative cash distributions. . . . . . . . . . . . . . . . . . . .      (14,225,051)      (14,225,051)
                                                                             ------------       ----------- 
                                                                               (5,353,381)      (13,751,933)
                                                                             ------------       ----------- 
          Total partners' capital accounts (deficits). . . . . . . . . .      (10,697,184)      (27,494,287)
                                                                             ------------       ----------- 

                                                                             $ 98,855,782        99,620,230 
                                                                             ============       =========== 


<FN>
                                  See accompanying notes to financial statements.
</TABLE>


<PAGE>


<TABLE>
                                JMB/PIPER I ASSOCIATES AND JMB/PIPER II ASSOCIATES
                     (UNCONSOLIDATED VENTURES OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV)

                                         COMBINED STATEMENTS OF OPERATIONS

                                   YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<CAPTION>
                                                               1997             1996              1995     
                                                           ------------     ------------      ------------ 
<S>                                                       <C>              <C>               <C>           
Income:
  Rental income. . . . . . . . . . . . . . . . . . . .     $ 21,418,528       20,516,724        19,826,931 
  Interest income. . . . . . . . . . . . . . . . . . .           99,316          108,233           123,917 
                                                           ------------     ------------      ------------ 
                                                             21,517,844       20,624,957        19,950,848 
                                                           ------------     ------------      ------------ 
Expenses:
  Mortgage and other interest. . . . . . . . . . . . .       10,250,000       10,250,000        15,907,143 
  Depreciation . . . . . . . . . . . . . . . . . . . .        2,647,695        3,524,730         3,514,561 
  Property operating expenses. . . . . . . . . . . . .       11,293,964       11,183,021        10,039,372 
  Amortization of deferred expenses. . . . . . . . . .          256,458          334,116           369,317 
  Reversal of accrued contingent interest. . . . . . .      (18,600,000)           --                --    
                                                           ------------     ------------      ------------ 
                                                              5,848,117       25,291,867        29,830,393 
                                                           ------------     ------------      ------------ 

                                                             15,669,727       (4,666,910)       (9,879,545)
Venture partners' share of ventures' operations. . . .        1,127,376        1,498,601         1,508,363 
                                                           ------------     ------------      ------------ 

          Net earnings (loss). . . . . . . . . . . . .     $ 16,797,103       (3,168,309)       (8,371,182)
                                                           ============     ============      ============ 














<FN>
                                  See accompanying notes to financial statements.
</TABLE>


<PAGE>


<TABLE>
                                   JMB/PIPER I ASSOCIATES AND JMB/PIPER II ASSOCIATES
                        (UNCONSOLIDATED VENTURES OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV)

                                    COMBINED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS

                                      YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


<CAPTION>
                                                                              VENTURE    
                                                            CARLYLE-XV        PARTNERS            TOTAL    
                                                           ------------      -----------       ----------- 
<S>                                                       <C>               <C>               <C>          
Balance at December 31, 1994 . . . . . . . . . . . . .     $ (7,710,109)      (7,719,687)      (15,429,796)

Capital contributions. . . . . . . . . . . . . . . . .          505,000          505,000         1,010,000 
Net earnings (loss). . . . . . . . . . . . . . . . . .       (4,185,591)      (4,185,591)       (8,371,182)
                                                           ------------      -----------       ----------- 

Balance at December 31, 1995 . . . . . . . . . . . . .      (11,390,700)     (11,400,278)      (22,790,978)

Cash distributions . . . . . . . . . . . . . . . . . .         (767,500)        (767,500)       (1,535,000)
Net earnings (loss). . . . . . . . . . . . . . . . . .       (1,584,154)      (1,584,155)       (3,168,309)
                                                           ------------      -----------       ----------- 

Balance at December 31, 1996 . . . . . . . . . . . . .      (13,742,354)     (13,751,933)      (27,494,287)

Net earnings (loss). . . . . . . . . . . . . . . . . .        8,398,551        8,398,552        16,797,103 
                                                           ------------      -----------       ----------- 

Balance at December 31, 1997 . . . . . . . . . . . . .     $ (5,343,803)      (5,353,381)      (10,697,184)
                                                           ============      ===========       =========== 















<FN>
                                     See accompanying notes to financial statements.
</TABLE>


<PAGE>


<TABLE>
                                   JMB/PIPER I ASSOCIATES AND JMB/PIPER II ASSOCIATES
                        (UNCONSOLIDATED VENTURES OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV)

                                     COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                      YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
                                                                1997            1996               1995    
                                                           ------------      -----------       ----------- 
<S>                                                       <C>               <C>               <C>          
Cash flows from operating activities:
  Net earnings (loss). . . . . . . . . . . . . . . . .      $16,797,103       (3,168,309)       (8,371,182)
  Items not requiring cash or cash equivalents:
    Depreciation . . . . . . . . . . . . . . . . . . .        2,647,695        3,524,730         3,514,561 
    Amortization of deferred expenses. . . . . . . . .          256,458          334,116           369,317 
    Venture partners' share of ventures' operations. .       (1,127,376)      (1,498,601)       (1,508,363)
    Changes in:
     Rents and other receivables,net . . . . . . . . .         (199,028)         (54,775)          (82,442)
     Accrued rents receivable. . . . . . . . . . . . .          924,167          927,230           690,986 
     Accounts payable. . . . . . . . . . . . . . . . .        1,848,897          822,873           759,824 
     Accrued real estate taxes . . . . . . . . . . . .          (83,346)       1,022,046           174,345 
     Long-term debt - accrued contingent interest. . .      (18,600,000)        (854,167)        5,708,278 
     Unearned rents. . . . . . . . . . . . . . . . . .           12,620          (93,194)           89,150 
     Tenant security deposits. . . . . . . . . . . . .            1,905           (4,294)            8,588 
     Escrow deposits . . . . . . . . . . . . . . . . .         (788,619)        (790,109)         (681,685)
                                                           ------------      -----------       ----------- 
          Net cash provided by (used in) 
            operating activities . . . . . . . . . . .        1,690,476          167,546           671,377 
                                                           ------------      -----------       ----------- 
Cash flows from investing activities:
  Additions to investment property . . . . . . . . . .         (339,192)        (364,545)         (318,174)
  Payments on notes receivable . . . . . . . . . . . .           92,643           94,121            86,308 
  Payment of deferred expenses . . . . . . . . . . . .          (42,808)         (17,221)          (51,384)
                                                           ------------      -----------       ----------- 
          Net cash used in investing activities. . . .         (289,357)        (287,645)         (283,250)
                                                           ------------      -----------       ----------- 
Cash flows from financing activities:
  Principal payments on long-term debt . . . . . . . .         (741,627)        (464,178)         (353,251)
  Cash contributions from Carlyle-XV . . . . . . . . .            --               --              505,000 
  Cash distributions to Carlyle-XV . . . . . . . . . .            --            (767,500)            --    
  Cash contributions from venture partners . . . . . .            --               --              505,000 
  Cash distributions to venture partners . . . . . . .            --            (767,500)            --    
                                                           ------------      -----------       ----------- 
          Net cash provided by (used in) 
            financing activities . . . . . . . . . . .         (741,627)      (1,999,178)          656,749 
                                                           ------------      -----------       ----------- 



<PAGE>


                                    JMB/PIPER ASSOCIATES AND JMB/PIPER II ASSOCIATES
                        (UNCONSOLIDATED VENTURES OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV)

                                      COMBINED STATEMENTS OF CASH FLOWS - CONTINUED


                                                                1997            1996               1995    
                                                           ------------      -----------       ----------- 

          Net increase (decrease) in cash 
            and cash equivalents . . . . . . . . . . .          659,492       (2,119,277)        1,044,876 

          Cash and cash equivalents, 
            beginning of the year. . . . . . . . . . .           73,641        2,192,918         1,148,042 
                                                           ------------      -----------       ----------- 
          Cash and cash equivalents, 
            end of the year. . . . . . . . . . . . . .     $    733,133           73,641         2,192,918 
                                                           ============      ===========       =========== 
Supplemental disclosure of cash flow information:
  Cash paid for mortgage and other interest. . . . . .     $ 10,250,000       11,104,167        10,198,865 
                                                           ============      ===========       =========== 



























<FN>
                                     See accompanying notes to financial statements.
</TABLE>


<PAGE>


            JMB/PIPER I ASSOCIATES AND JMB/PIPER II ASSOCIATES
                        (UNCONSOLIDATED VENTURES OF
               CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV)

                  NOTES TO COMBINED FINANCIAL STATEMENTS

                     December 31, 1997, 1996 and 1995


OPERATIONS AND BASIS OF ACCOUNTING

     The accompanying combined financial statements have been prepared for
the purpose of complying with Rule 3.09 of Regulation S-X of the Securities
and Exchange Commission.  They include the accounts of the unconsolidated
joint ventures, JMB/Piper Associates ("JMB/Piper") and JMB/Piper II
Associates ("JMB/Piper II"), in which Carlyle Real Estate Limited
Partnership-XV ("Carlyle-XV" or "Partnership") owns a direct interest.

     JMB/Piper holds a majority interest in OB/Joint Venture II Limited
Partnership which, in turn with unaffiliated partners, owns a majority
interest in 222 S. Ninth Street Limited Partnership ("222 South").  222
South owns a commercial office building ("Piper Jaffray Tower") in downtown
Minneapolis, Minnesota.  JMB/Piper also holds a majority interest in
OB/Joint Venture I Limited Partnership ("OB/I") with JMB/Piper II holding
the other minority interest.  OB/I owns the land underlying 222 South's
office building.  Business activities consist of rentals to a variety of
commercial companies, and the ultimate sale or disposition of such real
estate.  All transactions between the combined ventures have been
eliminated in the combined financial statements.

     The preparation of financial statements in accordance with GAAP
requires the Venture to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.

     JMB/Piper and JMB/Piper II have classified Piper Jaffray Tower as held
for sale as of September 30, 1997, and therefore, has not been subject to
continued depreciation beyond that date.

     The accounting policies of the JMB/Piper and JMB/Piper II are the same
as those of the Partnership.  Accordingly, reference is made to the Notes
to the Partnership's financial statements filed with this annual report. 
Such notes are incorporated herein by reference.

VENTURE AGREEMENT

     A description of the venture agreement is contained in the Notes to
Consolidated Financial Statements of Carlyle-XV.  Such note is hereby
incorporated herein by reference.

LONG-TERM DEBT

     Long-term debt consists of the following at December 31, 1997 and
1996:

                                                    1997          1996   
                                                -----------    ----------
10.5% per annum mortgage note; secured by 
 Piper Jaffray Tower; payable in monthly
 installments of interest only of $854,167
 until maturity in January 2020. . . . . . .    $96,126,672    96,868,299

      Less long-term debt
        principal reduction. . . . . . . . .        385,523       741,627
                                                -----------    ----------
      Total long-term debt . . . . . . . . .    $95,741,149    96,126,672
                                                ===========    ==========


<PAGE>


     The property is subject to a mortgage loan in the principal amount of
$100,000,000 of which approximately $96,127,000 is outstanding as of
December 31, 1997.  Under the terms of a modification agreement with the
lender, in addition to fixed interest on the mortgage notes secured by the
Piper Jaffray Tower, contingent interest is payable in annual installments
on April 1 computed at 50% of gross receipts, as defined, for each fiscal
year in excess of $15,200,000.  No such contingent interest was due for the
years ended December 31, 1995, 1996 or 1997.  In addition, to the extent
the investment property generates cash flow after payment of the fixed
interest on the mortgage, contingent interest, if any, leasing and capital
costs, and 25% of the ground rent, such amount will be paid to the lender
as a reduction of the principal balance of the mortgage loan.  The excess
cash flow payments remitted to the lender for 1995 and 1996 totalled
$464,178 and $741,627, respectively.  During 1997, excess cash flow
generated under this agreement was $385,523 which is expected to be
remitted to the lender during the second quarter of 1998.

     Furthermore, repayment of the loan is subject to a prepayment fee
ranging from 6% to 1% through the maturity date as well as an amount that
will provide the lender with an internal rate of return from 12.75% to
13.59% out of proceeds from the sale or refinancing of the property.  After
the prepayment fees, the lender participates in any remaining sale or
refinancing proceeds.  For financial reporting purposes, through
December 31, 1995, additional interest expense had been accrued at a rate
of 13.59% per annum.  Under the current terms of the modified debt, there
must be a significant improvement in the current market and property
operating conditions resulting in a significant increase in value of the
property in order for JMB/Piper to share in any future net sale or
refinancing proceeds.  Therefore, during 1996 and 1997, interest expense of
$10,250,000 was recognized at the loan's stated payment rate. 
Additionally, based on JMB/Piper's estimate of the value of the building at
December 31, 1997, it was determined that the lender is not expected to
receive the entire balance of the loan and interest that Piper had accrued
based on the above mentioned internal rate of return, contingent upon the
sale or refinancing of the property.  Therefore, in 1997, $18,600,000 of
such interest was reversed and charged to operations.  Total indebtedness
including interest under the mortgage loan is approximately $99,769,000 and
$119,111,000 at December 31, 1997 and 1996, respectively.


LEASES - As Property Lessor

     At December 31, 1997, JMB/Piper and JMB/Piper II's principal asset is
an office building.  JMB/Piper and JMB/Piper II has determined that all
leases relating to the property are properly classified as operating
leases; therefore, rental income is reported when earned.  Leases range in
term from one to 25 years and provide for fixed minimum rent and partial to
full reimbursement of operating costs.  A substantial portion of the
ability of the office tenants at Piper Jaffray Tower to honor their leases
is dependent upon the office economic sector.

     Minimum lease payments including amounts representing executory costs
(e.g., taxes, maintenance, insurance), to be received in the future under
the above operating commercial lease agreements, are as follows:

                    1998 . . . . . . . . . .      $10,981,448
                    1999 . . . . . . . . . .       10,971,855
                    2000 . . . . . . . . . .        5,722,682
                    2001 . . . . . . . . . .        3,864,448
                    2002 . . . . . . . . . .        3,482,907
                    Thereafter . . . . . . .        5,344,847
                                                  -----------
                                                  $40,368,187
                                                  ===========





<PAGE>


<TABLE>
                                                                                                 SCHEDULE III     

                                JMB/PIPER I ASSOCIATES AND JMB/PIPER II ASSOCIATES
                     (UNCONSOLIDATED VENTURES OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV)

                                 COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION

                                                 DECEMBER 31, 1997


<CAPTION>

                                                             COSTS     
                                                          CAPITALIZED  
                                   INITIAL COST            SUBSEQUENT             GROSS AMOUNT AT WHICH CARRIED  
                                  TO VENTURE (A)        TO ACQUISITION                AT CLOSE OF PERIOD (B)     
                             -------------------------   --------------      ------------------------------------
                                           BUILDINGS         LAND,                       BUILDINGS               
                ENCUMBRANCE                  AND         BUILDINGS AND                      AND                  
                    (C)          LAND     IMPROVEMENTS   IMPROVEMENTS          LAND     IMPROVEMENTS    TOTAL (D)
                -----------   ----------- ------------  ---------------     ----------  ------------  -----------
<S>            <C>           <C>         <C>            <C>                <C>         <C>           <C>         
OFFICE BUILDING:
 Piper Jaffray
  Tower
  Minneapolis,
  Minnesota.    $96,126,672    4,400,998    96,546,781       16,226,727      4,766,320   112,408,186  117,174,506
                ===========   ===========   ==========       ==========     ==========   ===========  ===========

</TABLE>


<PAGE>


<TABLE>
                                                                                                 SCHEDULE III     

                                JMB/PIPER I ASSOCIATES AND JMB/PIPER II ASSOCIATES
                     (UNCONSOLIDATED VENTURES OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV)

                                 COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION

                                                 DECEMBER 31, 1997

<CAPTION>
                                                                                      LIFE ON WHICH
                                                                                      DEPRECIATION 
                                                                                       IN LATEST   
                                                                                      STATEMENT OF        1997   
                                     ACCUMULATED             DATE OF      DATE         OPERATIONS     REAL ESTATE
                                   DEPRECIATION (E)       CONSTRUCTION  ACQUIRED      IS COMPUTED        TAXES   
                                   ----------------       ------------ ----------   ---------------   -----------
<S>                               <C>                    <C>          <C>          <C>               <C>         
OFFICE BUILDING:
 Piper Jaffray
  Tower
  Minneapolis,
  Minnesota. . . . . . . . . . . . .     49,530,178           12/84         12/84      5 - 30 years     4,263,895
                                        ===========                                                     =========
<FN>

Notes:

   (A) The initial cost to JMB/Piper and JMB/Piper II represents the original purchase price of the property,
including amounts incurred subsequent to acquisition which were contemplated at the time the property was
acquired.

   (B) The aggregate cost of real estate owned at December 31, 1997 for Federal income tax purposes was
approximately $105,968,000.

   (C) Amounts disclosed exclude accrued contingent interest.

</TABLE>


<PAGE>


<TABLE>
                                                                                                 SCHEDULE III     

                                JMB/PIPER I ASSOCIATES AND JMB/PIPER II ASSOCIATES
                     (UNCONSOLIDATED VENTURES OF CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV)

                                 COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION

                                                 DECEMBER 31, 1997

       (D)  Reconciliation of real estate owned:
<CAPTION>
                                                                1997              1996               1995    
                                                            ------------      ------------      ------------ 
      <S>                                                  <C>               <C>               <C>           

      Balance at beginning of period . . . . . . . . . .    $116,835,314       116,470,769       116,152,595 
      Additions during period. . . . . . . . . . . . . .         339,192           364,545           318,174 
                                                            ------------      ------------      ------------ 
      Balance at end of period . . . . . . . . . . . . .    $117,174,506       116,835,314       116,470,769 
                                                            ============      ============      ============ 

       (E)  Reconciliation of accumulated depreciation:

      Balance at beginning of period . . . . . . . . . .    $ 46,882,483        43,357,753        39,843,192 
      Depreciation expense . . . . . . . . . . . . . . .       2,647,695         3,524,730         3,514,561 
                                                            ------------      ------------      ------------ 
      Balance at end of period . . . . . . . . . . . . .    $ 49,530,178        46,882,483        43,357,753 
                                                            ============      ============      ============ 

</TABLE>