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


For the fiscal year ended 
December 31, 1998                        Commission File Number 0-16111     



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



             Illinois                            36-3314827           
      -----------------------       ------------------------------------
      (State of organization)       (I.R.S. Employer Identification No.)



  900 N. Michigan Ave., Chicago, Illinois                 60611
  ---------------------------------------              ----------
  (Address of principal executive office)              (Zip Code)



     The undersigned registrant hereby amends the following section of its
Report for the year ended December 31, 1998 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 24.


     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
                                           Vice President and 
                                           Principal Accounting Officer


Dated:  May 14, 1999




<PAGE>


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

LIQUIDITY AND CAPITAL RESOURCES

     Capitalized terms used but not defined herein have the same meanings
as in the Notes.  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.

     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 previously
retained Lehman Brothers Inc. through June 30, 1998 as financial advisor to
assist the Special Committee in evaluating and responding to potential
tender offers for Interests.

     In March 1998, an unaffiliated third party made an unsolicited offer
to purchase up to 20,000 Interests at $30 per Interest.  Such offer expired
at the end of April 1998.  The Special Committee recommended against
acceptance of this offer on the basis that, among other things, the offer
price was inadequate.  In September 1998, an unaffiliated third party made
an unsolicited offer to purchase up to 20,000 Interests at $15 per
Interest.  Such offer expired in October 1998.  As of the date of this
report, the Partnership is aware that 2% of the Interests have been
purchased by unaffiliated third parties who have made unsolicited offers
for Interests, either pursuant to such offers or through negotiated
purchases.  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.

     At December 31, 1998, the Partnership and its consolidated ventures
had cash and cash equivalents of approximately $27,000,000.  Such funds and
certain escrowed amounts (which are restricted as to their use) were
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.  In February 1999,
the Partnership made a sales distribution totalling $6,653,710 ($15 per
Interest) out of sale proceeds (primarily related to the sale of the
NewPark Mall).  In addition, the General Partners and their affiliates have
previously deferred management and leasing fees payable to them in an
aggregate amount of approximately $2,653,000 (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.

     As discussed more fully below, in March 1999 JMB/900 settled various
claims and acquired the interests of the FDIC and the unaffiliated venture
partners in Progress Partners, which owns the 900 Third Avenue office
building, for $16,300,000, of which $13,800,000 was paid upon closing of
the various transactions.  In connection with these transactions, the
Partnership contributed its proportionate share (approximately $9,200,000)
of the $13,800,000 to JMB/900.





                                     14


<PAGE>


     The Partnership and its consolidated venture have currently budgeted
in 1999 approximately $1,025,000 for tenant improvements and other capital
expenditures at the California Plaza building.  The Partnership's share of
such items and its share of such similar items for Piper Jaffray Tower and
the 900 Third Avenue office building in 1999 are currently budgeted to be
approximately $1,404,000.  Actual amounts expended in 1999 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.  All of the Partnership's
investment properties are restricted as to their use of excess cash flow by
escrow agreements negotiated pursuant to loan modifications.  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 and California Plaza 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 1998 was
89%.

     The property is subject to a mortgage loan in the original principal
amount of $100,000,000, of which approximately $95,741,000 is outstanding
as of December 31, 1998.  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 1996, 1997 or 1998.  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 1996 and 1997 totalled $741,627
and $385,523, respectively.  During 1998, no such excess cash flow was
generated.

     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.  Although JMB/Piper had intended to pursue
further discussions with the lender concerning possible refinancing and/or
loan modification alternatives, it currently appears unlikely that an
agreement with respect to such a transaction will be made.



                                     15


<PAGE>


     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, 1998, the balance of such escrow account totaled
approximately $5,441,000.  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, 1998, the manager has deferred approximately $4,445,000
($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 third quarter of 1997, Popham informed Piper that effective
in November 1997, it would cease operations as Popham and consolidate with
another law firm, Hinshaw & Culberson ("Hinshaw").  In December 1997, 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 exceeded Popham's modified rate that
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 May 1998, Piper executed the
lease with Hinshaw in accordance with the letter of intent and Piper
terminated Popham's lease (for approximately 47,000 square feet) effective
December 31, 1997 with no further consideration.

     Piper had discussed an early renewal with PJI which 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 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 a result of a flood in 1997, the property incurred significant
repair costs in 1998.  Piper completed such repairs and the balance
(approximately $1,100,000) is expected to be reimbursed by the insurance
carrier in 1999.  JMB/Piper made certain advances to Piper for such costs,
and expects to have the advances repaid upon reimbursement from the
insurance carrier.

     As of September 30, 1997, the JMB/Piper venture has classified the
property as held for sale or disposition.  The Property 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






                                     16


<PAGE>


JMB/125 resulting in the recognition of gain, of which the Partnership's
share was $174,654.  In December 1998, the limited partnership interests
were sold back to the reorganized entity for $118,642 resulting in
recognition of gain, of which the Partnership's share was $81,612. 
Reference is made to the Notes.

     260 FRANKLIN

     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 through a
trust disposed of 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 recognized in 1998 gains in the
aggregate 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 discharge of indebtedness of
approximately $17,500,000 for financial reporting purposes, all of which is
included in the consolidated financial statements of the Partnership.  In
addition, 260 Franklin recognized a gain of approximately $24,400,000 for
Federal income tax purposes, of which the Partnership's share was
approximately $17,000,000, with no distributable proceeds.  260 Franklin
and the Partnership have no future liability for any representations,
warranties or covenants to the purchaser as a result of the disposal of the
property.  Reference is made to the Notes.

     900 THIRD AVENUE BUILDING

     Occupancy of this building at the end of the fourth quarter of 1998
was 97%.

     Progress Partners had been negotiating 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. 
However, in the second quarter of 1998, the tenant informed Progress
Partners of its intent to vacate all of its space upon the expiration of
its current lease.






                                     17


<PAGE>


     Pursuant to the extension of 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 1998, approximately $10,262,000 has been deposited into
escrow from net cash flow from property operations.  Additionally,
approximately $5,149,000 has been withdrawn from the escrow account for
payment of real estate taxes in 1998.

     In July 1998, JMB/900 entered into an agreement with the Venture
Partners and a judgment creditor of JRA and PPI (such judgment creditor,
JRA and PPI are hereinafter collectively referred to as the "Progress
Parties") to resolve outstanding claims.  The agreement was subject to
occurrence of various terms and conditions, which failed to occur.  In a
further effort to resolve outstanding claims and to place JMB/900 in a
position to control and market the property, JMB/900 entered into a
settlement agreement with the Progress Parties effective as of March 17,
1999 ("Settlement Agreement").  The Settlement Agreement generally provides
for the settlement and release of all claims and causes of action by and
against JMB/900 and the Progress Parties related to or arising from the
joint venture relationship or the property including, without limitation,
any claims by the Venture Partners to Guaranteed Payments and any claims by
Progress Partners for capital contributions from JMB/900.  Under the
Settlement Agreement and related transactions, JMB/900 and an affiliate
acquired all of the right, title and interest of the Progress Parties in
the property, Progress Partners and PC-900 and resolved all outstanding
litigation in exchange for a total payment of $16.0 million, $13.5 million
of which was paid at closing of the Settlement Agreement with the remaining
$2.5 million to be paid upon the earlier of (i) closing of a sale of the
property by Progress Partners or (ii) January 3, 2000.  In a related
agreement and for the payment of $300,000 and the release of various
claims, the litigation and claims by and between the FDIC and JMB/900 were
resolved and dismissed.  As part of the settlement, the limited partnership
interests in PC-900 in Progress Partners were assigned to 14-15 Office
Associates, L.P. ("Office Associates"), in which JMB/900 owns a 99% limited
partnership interest.  P-C 900's interest in Progress Partners was then
transferred to JMB/900 and Office Associates, which are now the sole
remaining partners in Progress Partners.  Amendments to the joint venture
agreement of Progress Partners were made to effectuate the terms of the
settlement and the substitution of partners.

     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.  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 substantial 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 next several years.

     During 1996, the Partnership, the joint venture, and the lenders
reached an agreement to modify the mortgage note and the promissory note
secured by the Partnership's interest in the property.  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





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<PAGE>


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 1998 and 1997 shares of income for
financial reporting purposes (approximately $464,000 and $286,000,
respectively) have not been recognized as such amounts are not considered
realizable.  Since the terms of the modified mortgage note and the amended
and restated promissory note 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

     Pursuant to a liquidation agreement dated November 13, 1998, the
Partnership, its affiliated venture partner and its unaffiliated venture
partner dissolved NewPark Associates and distributed all of its assets to
the partners.  On November 18, 1998, the Partnership and its affiliated
venture partner sold their interests in the net assets of the NewPark Mall
to the unaffiliated joint venture partner for $16,000,000 of which the
Partnership's share was $14,400,000.  As a result of the sale, the
Partnership recognized a gain for financial reporting purposes of
approximately $7,656,000 in 1998, in part as a result of previous
impairment loss recognized by the Partnership of $3,870,000.  The
Partnership recognized a gain on sale of approximately $4,781,000 for
Federal income tax purposes in 1998.  Reference is made to the Notes.

     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
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, 1998).  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.  The mortgage
loan secured by the property matures on January 1, 2000.  As discussed
below, the Partnership currently expects that the property will be sold
during 1999.  In the event such sale does not occur during 1999, the joint
venture that owns the property expects to seek an extension or refinancing
of the loan.

     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.

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<PAGE>


     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.

     In February 1998, the Partnership made a distribution to the Holders
of Interests of $4,436,037 ($10 per Interest) of previously undistributed
sale proceeds along with sale proceeds from the sale of the RiverEdge Place
building.  In September 1998, the Partnership made a distribution of
$13,307,420 ($30 per Interest) to the Holders of Interests representing
sale proceeds ($7 per Interest) from collection of the purchase price note
received in the sale of Owings Mills Shopping Center in 1993 and previously
undistributed operational cash flow ($23 per Interest).  The General
Partners received a distribution from operational cash flow of $425,098 and
a management fee to the Corporate General Partner of $708,497.  In February
1999, the Partnership made a distribution of $6,653,710 ($15 per Interest)
to the Holders of Interests representing sale proceeds from the sale of
NewPark Mall.

     Although the Partnership expects to distribute sales proceeds from the
sale of the 900 Third Avenue and California Plaza investment properties,
aggregate distributions of sale and refinancing proceeds received by
Holders of Interests 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





                                     20


<PAGE>


secured by each property and provide no cash flow to the Partnership. 
While loan and joint venture modifications have been obtained that enable
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.

     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.  The Partnership currently expects
that the 900 Third Avenue, Piper Jaffray Tower and California Plaza
investment properties will be sold or disposed of during 1999, barring any
unforeseen economic developments.  However, the Partnership may be unable
to dispose of the Piper Jaffray Tower prior to December 31, 1999.  The
Partnership currently expects to retain its interest in Wells Fargo Center
- South Tower beyond 1999.

RESULTS OF OPERATIONS

     Significant fluctuations in the accompanying consolidated financial
statements are due to the sales of the 260 Franklin Street Building in
January 1998, the RiverEdge Place office building in December 1997, and the
Dunwoody Crossings and Woodland Hills apartment complexes in 1996 and the
respective lenders obtaining legal title to the Springbrook Shopping Center
in 1997 and the 160 Spear Street and 21900 Burbank buildings in 1996.

     The increase in interest, rents and other receivables at December 31,
1998 as compared to December 31, 1997 is primarily due to advances to
JMB/Piper made in 1998, for payments of repairs for flood damage which are
expected to be repaid from insurance proceeds in 1999.

     The increase in current portion of note receivable and long-term
portion of note receivable at December 31, 1998 as compared to December 31,
1997 is due to the promissory note received at California Plaza as
described in the notes.

     The increase in escrow deposits and restricted securities at
December 31, 1998 as compared to December 31, 1997 is due to the continued
escrow of excess cash flow pursuant to the loan modification at the Cal
Plaza Office building.

     The decrease in other restricted securities at December 31, 1998 as
compared to December 31, 1997 is due to the remittance of cumulative cash
flow 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 investment in unconsolidated ventures, at equity at
December 31, 1998 as compared to December 31, 1997 is primarily due to the
liquidation of the NewPark joint venture and sale of the Partnership's
interest in NewPark Mall to the unaffiliated joint venture partner in
November 1998.

     The decrease in accounts payable at December 31, 1998 as compared to
December 31, 1997 is primarily due to a pro rata portion of the management
and leasing fees payable by 260 Franklin Street Associates reclassed to the
Partnership's venture partner (Carlyle - XVI) upon disposition of the 260
Franklin Street building in January 1998.






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<PAGE>


     The decrease in deferred income at December 31, 1998 as compared to
December 31, 1997 is due to the amortization of a lease amendment fee which
is being recognized as income over the remaining term of the tenant's
original lease at the Cal Plaza Office Building.

     The increase in long-term debt, less current portion at December 31,
1998 as compared to December 31, 1997 is primarily due to the accumulation
of deferred accrued interest related to the promissory note secured by the
Partnership's interest in the Wells Fargo - South Tower joint venture.

     The increase in other income for the year ended December 31, 1998 as
compared to the same periods in 1997 and 1996 is primarily due to a
collection of demand notes related to the 21900 Burbank Boulevard Building.

     The decrease in depreciation expense for the year ended December 31,
1998 as compared to the same periods in 1997 and 1996 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.

     The decrease in professional services for the year ended December 31,
1998 as compared to the same periods in 1997 and 1996 is primarily due to
outsourcing costs and expenses related to unsolicited offers for Interests
in 1996.

     The increase in management fees to Corporate General Partner for the
year ended December 31, 1998 as compared to the same periods in 1997 and
1996 is due to the Partnership's payment of a distribution from operational
cash flow in 1998, a portion of which is earned by the Corporate General
Partner as a partnership management fee.

     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 are due to the restructuring of the
Partnership's investment in the South Tower venture as discussed in the
Notes.

     The decrease in the Partnership's share of income (loss) from
operations of unconsolidated ventures at December 31, 1998 as compared to
December 31, 1997 and the increase 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 in 1997 due to its expected uncollectibility.

     The increase in the venture partner's share of venture operations for
the year ended December 31, 1998 as compared to the same periods in 1997
and 1996 is primarily due to the venture partner's proportionate share of
management and leasing fees payable by 260 Franklin Street Associates
allocated to the venture partner upon disposition of the property in 1998.

     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 property for the year
ended December 31, 1998 relates to the recognition of gain from the sale of
the 260 Franklin Street Building.  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.




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<PAGE>


     The gain on sale of interests in unconsolidated ventures for the year
ended December 31, 1998 relates to the recognition of $7,656,304 gain from
the liquidation of the NewPark joint venture and the sale through
JMB/NewPark of the Partnership's interest in NewPark Mall, recognition of
$3,006,762 deferred gain from the sale of JMB/Owing's interest in the
Owings Mills Limited Partnership and recognition of $81,612 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 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 relates to the recognition of $435,060 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
$17,451,802 for the year ended December 31, 1998 represents the interest
waived by the lender pursuant to a loan modification agreement for the debt
secured by the 260 Franklin Street building in January 1998.  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.

     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.

     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.

YEAR 2000

     The year 2000 problem is the result of computer programs being written
with two digits rather than four to define a year.  Consequently, any
computer programs that have time-sensitive software may recognize a date
using "00" as the year 1900 rather than the year 2000.  This could result
in a system failure or miscalculations causing disruptions of operations
including, among other things, an inability to process transactions or
engage in other normal business activities.  In addition, other date-
sensitive electronic devices could experience various operational
difficulties as a result of not being year 2000 compliant.

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<PAGE>


     The Partnership uses the telephone, accounting, transfer agent and
other administrative systems, which include both hardware and software,
provided by affiliates of the Corporate General Partner and certain third
party vendors.  Except as noted in the following sentence, the Partnership
or its affiliates have received representations to the effect that the
telephone, accounting, transfer agent and other administrative systems are
year 2000 compliant in all material respects.  Both the hardware and
software for individual personal computers used in the Partnership's
administrative systems are expected to be tested for their year 2000
compliance during the summer of 1999.

     The property manager for 900 Third Avenue and Piper Jaffray Tower has
conducted assessments of various aspects of these properties' respective
operating systems in regard to their year 2000 compliance.  In general,
such assessments were performed through written inquiries to third party
vendors and service personnel for these properties and, to some extent,
testing of some of the components at these properties.  Based upon the
information received from the property manager, the Partnership believes
that the major operating systems for these properties, including HVAC
controls, elevators and alarm and safety systems, are or will be year 2000
compliant in all material respects.  Certain of the operating systems at
these properties require minor upgrading, which has been undertaken and
completed, or will be undertaken and completed in the near future, without
the incurrence of material expense.  The Partnership does not have
information concerning the extent to which the Wells Fargo Center-South
Tower is year 2000 compliant, but will seek to obtain such information in
the near future.  However, the Partnership does not believe that it is
obligated for year 2000 compliance for the Wells Fargo Center-South Tower. 
In addition, the Partnership has only limited information with respect to
the year 2000 compliance of California Plaza and intends to seek additional
information in this regard.

     Given its limited operations, the Partnership believes that its
accounting, transfer agent and most of its other administrative systems
functions could, if necessary, be performed manually (i.e., without
significant information technology) for an extended period of time without
a material increase in costs to the Partnership.  However, due to its
limited information concerning the year 2000 compliance of California
Plaza, the Partnership has not yet determined to what extent it may incur
expenses with respect to year 2000 compliance.

     The Partnership is relying on the information obtained and
representations made by the property manager, as well as the
representations made by third party vendors and service personnel, for 900
Third Avenue and Piper Jaffray Tower regarding the ability of those
properties to be year 2000 compliant in all material respects.  The
Partnership is also relying on the assessments made by the property manager
of the third party vendors and service personnel to be contacted in regard
to those properties' year 2000 compliance.  In the event that the
Partnership's investment properties are not year 2000 compliant in all
material respects, the relevant investment property or properties could
experience various operational difficulties, such as possible systems
failures.  Such operational difficulties could result in remediation and,
under certain circumstances, possibly other costs and expenses.  If such
were to occur, there is no assurance that such costs and expenses would
not, under certain circumstances, have a material adverse effect on the
Partnership or its investment in 900 Third Avenue, Piper Jaffray Tower
and/or California Plaza in the event such properties are not sold during
1999.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Partnership has identified interest rate changes as a potential
market risk.  However, as the Partnership's long-term debt bears interest
at fixed rates, the Partnership does not believe that it is exposed to
market risk relating to interest rate changes, except at the California
Plaza property as discussed above.


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