SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549



                               FORM 10-Q



              Quarterly Report Under Section 13 or 15(d)
                of the Securities Exchange Act of 1934




For the quarter ended 
September 30, 1998                          Commission file #0-16111   




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





                Illinois                     36-3314827                
      (State of organization)       (IRS Employer Identification No.)  




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




Registrant's telephone number, including area code 312/915-1987




Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes [ X ]   No  [   ]



<PAGE>


                           TABLE OF CONTENTS




PART I     FINANCIAL INFORMATION


Item 1.    Financial Statements . . . . . . . . . . . . . . .     3

Item 2.    Management's Discussion and 
           Analysis of Financial Condition and 
           Results of Operations. . . . . . . . . . . . . . .    17



PART II    OTHER INFORMATION


Item 5.    Other Information. . . . . . . . . . . . . . . . .    22

Item 6.    Exhibits and Reports on Form 8-K . . . . . . . . .    23






<PAGE>


<TABLE>
PART I.  FINANCIAL INFORMATION

     ITEM 1.  FINANCIAL STATEMENTS
                                CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
                                           (A LIMITED PARTNERSHIP)
                                          AND CONSOLIDATED VENTURES

                                         CONSOLIDATED BALANCE SHEETS

                                  SEPTEMBER 30, 1998 AND DECEMBER 31, 1997

                                                 (UNAUDITED)

                                                   ASSETS
                                                   ------
<CAPTION>
                                                                           SEPTEMBER 30,    DECEMBER 31,
                                                                               1998            1997     
                                                                           -------------    ----------- 
<S>                                                                       <C>              <C>          
Current assets:
  Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .     $ 11,362,460     24,992,726 
  Interest, rents and other receivables . . . . . . . . . . . . . . . .          318,710        466,396 
  Current portion of notes receivable . . . . . . . . . . . . . . . . .           63,741          --    
  Escrow deposits and restricted securities . . . . . . . . . . . . . .        2,385,088      1,884,326 
  Other restricted securities . . . . . . . . . . . . . . . . . . . . .            --           131,318 
                                                                            ------------   ------------ 
        Total current assets. . . . . . . . . . . . . . . . . . . . . .       14,129,999     27,474,766 
                                                                            ------------   ------------ 
    Properties held for sale or disposition . . . . . . . . . . . . . .       45,980,712     95,606,312 
                                                                            ------------   ------------ 

Investment in unconsolidated ventures, at equity. . . . . . . . . . . .       17,180,161     16,908,786 
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .        1,194,279      2,016,887 
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . .        1,929,019      3,731,258 
Long-term portion of note receivable. . . . . . . . . . . . . . . . . .          191,139          --    
                                                                            ------------   ------------ 
                                                                            $ 80,605,309    145,738,009 
                                                                            ============   ============ 



<PAGE>


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

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

                                                                           SEPTEMBER 30,    DECEMBER 31,
                                                                               1998            1997     
                                                                           -------------    ----------- 
Current liabilities:
  Current portion of long-term debt . . . . . . . . . . . . . . . . . .     $      --        92,117,086 
  Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . .        2,493,526      3,169,406 
  Accrued interest payable. . . . . . . . . . . . . . . . . . . . . . .            --           639,533 
  Other current liabilities . . . . . . . . . . . . . . . . . . . . . .          647,184        639,554 
                                                                            ------------   ------------ 
        Total current liabilities . . . . . . . . . . . . . . . . . . .        3,140,710     96,565,579 

Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . .          301,790        385,888 
Investment in unconsolidated ventures, at equity. . . . . . . . . . . .        6,381,055      5,800,180 
Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . .          655,536      1,024,276 
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .          422,799        361,129 
Long-term debt, less current portion. . . . . . . . . . . . . . . . . .      116,136,090    109,972,972 
                                                                            ------------   ------------ 
Commitments and contingencies

        Total liabilities . . . . . . . . . . . . . . . . . . . . . . .      127,037,980    214,110,024 

Partners' capital accounts (deficits):
   General partners:
    Capital contributions . . . . . . . . . . . . . . . . . . . . . . .           20,000         20,000 
    Cumulative net earnings (losses). . . . . . . . . . . . . . . . . .      (19,694,723)   (19,989,556)
    Cumulative cash distributions . . . . . . . . . . . . . . . . . . .       (1,445,867)    (1,020,769)
                                                                            ------------   ------------ 
                                                                             (21,120,590)   (20,990,325)
                                                                            ------------   ------------ 
   Limited partners:
    Capital contributions, net of offering costs. . . . . . . . . . . .      384,978,681    384,978,681 
    Cumulative net earnings (losses). . . . . . . . . . . . . . . . . .     (350,456,278)  (390,285,344)
    Cumulative cash distributions . . . . . . . . . . . . . . . . . . .      (59,834,484)   (42,075,027)
                                                                            ------------   ------------ 
                                                                             (25,312,081)   (47,381,690)
                                                                            ------------   ------------ 
        Total partners' capital accounts (deficits) . . . . . . . . .        (46,432,671)   (68,372,015)
                                                                            ------------   ------------ 
                                                                            $ 80,605,309    145,738,009 
                                                                            ============   ============ 
<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

                           THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

                                                 (UNAUDITED)

<CAPTION>
                                                      THREE MONTHS ENDED           NINE MONTHS ENDED     
                                                         SEPTEMBER 30                 SEPTEMBER 30       
                                                  --------------------------  -------------------------- 
                                                       1998          1997          1998          1997    
                                                   -----------    ----------   -----------    ---------- 
<S>                                               <C>            <C>          <C>            <C>         
Income:
  Rental income . . . . . . . . . . . . . . . . .  $ 2,229,113     5,792,995     6,901,910    17,094,569 
  Interest income . . . . . . . . . . . . . . . .      279,507       351,973       895,367     1,071,285 
  Other income. . . . . . . . . . . . . . . . . .        --            --          881,537         --    
                                                   -----------   -----------    ----------    ---------- 
                                                     2,508,620     6,144,968     8,678,814    18,165,854 
                                                   -----------   -----------    ----------    ---------- 
Expenses:
  Mortgage and other interest . . . . . . . . . .    3,167,993     5,845,361     9,508,221    17,729,109 
  Depreciation. . . . . . . . . . . . . . . . . .        --            --            --        1,187,772 
  Property operating expenses . . . . . . . . . .    1,055,624     2,868,333     2,724,178     7,896,230 
  Professional services . . . . . . . . . . . . .        8,702        25,910       276,430       333,230 
  Amortization of deferred expenses . . . . . . .      126,446       168,431       369,702       506,865 
  Management fees to corporate general
   partner. . . . . . . . . . . . . . . . . . . .      708,497         --          708,497         --    
  General and administrative. . . . . . . . . . .      145,800       210,270       732,754       830,734 
                                                   -----------   -----------    ----------    ---------- 
                                                     5,213,062     9,118,305    14,319,782    28,483,940 
                                                   -----------   -----------    ----------    ---------- 
                                                    (2,704,442)   (2,973,337)   (5,640,968)  (10,318,086)

Partnership's share of earnings (loss) 
  from operations of unconsolidated 
  ventures. . . . . . . . . . . . . . . . . . . .      658,989      (632,105)    1,679,877       359,647 
Venture partner's share of venture
  operations. . . . . . . . . . . . . . . . . . .        --            --          414,242         --    
                                                   -----------   -----------    ----------    ---------- 
        Earnings (loss) before gains on
         sale or disposition of investment
         properties . . . . . . . . . . . . . . .   (2,045,453)   (3,605,442)   (3,546,849)   (9,958,439)




<PAGE>


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

                              CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED


                                                      THREE MONTHS ENDED           NINE MONTHS ENDED     
                                                         SEPTEMBER 30                 SEPTEMBER 30       
                                                  --------------------------  -------------------------- 
                                                       1998          1997          1998          1997    
                                                   -----------    ----------   -----------    ---------- 
Gain on liquidation of investment
  in venture. . . . . . . . . . . . . . . . . . .        --            --            --          269,147 
Gain on sale of interest in 
  unconsolidated ventures . . . . . . . . . . . .        --          107,883     3,006,762       458,844 
Gain on disposition of 
  investment property . . . . . . . . . . . . . .        --            --       23,212,184         --    
                                                  ------------    ----------    ----------    ---------- 
        Earnings (loss) before extra-
          ordinary items. . . . . . . . . . . . .   (2,045,453)   (3,497,559)   22,672,097    (9,230,448)
                                                  ------------   -----------    ----------    ---------- 
Extraordinary items:
  Gain on forgiveness of indebtedness . . . . . .        --            --       17,451,802     3,433,368 
                                                  ------------   -----------    ----------    ---------- 
        Net earnings (loss) . . . . . . . . . . . $ (2,045,453)   (3,497,559)   40,123,899    (5,797,080)
                                                  ============   ===========    ==========    ========== 
        Net earnings (loss) per 
         limited partnership interest:
          Earnings (loss) before gains
           on sale or disposition of
           investment properties. . . . . . . . . $      (4.43)        (7.80)        (7.68)       (21.55)
          Gain on liquidation of investment
            in venture. . . . . . . . . . . . . .        --            --            --              .60 
          Gain on sale of interest in 
            unconsolidated ventures . . . . . . .        --              .24          6.71          1.02 
          Gain on disposition of 
            investment property . . . . . . . . .        --            --            51.80         --    
          Extraordinary items . . . . . . . . . .        --            --            38.95          7.66 
                                                  ------------    ----------    ----------    ---------- 
                                                  $      (4.43)        (7.56)        89.78        (12.27)
                                                  ============    ==========    ==========    ========== 
        Cash distributions per 
          limited partnership interest. . . . . . $      30.00           .03         40.04           .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 CASH FLOWS

                                NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

                                                 (UNAUDITED)

<CAPTION>
                                                                                 1998             1997    
                                                                             ------------    ------------ 
<S>                                                                         <C>             <C>           
Cash flows from operating activities:
  Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 40,123,899      (5,797,080)
  Items not requiring (providing) cash or cash equivalents:
    Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         --          1,187,772 
    Amortization of deferred expenses . . . . . . . . . . . . . . . . . . .       369,702         506,865 
    Long-term debt - deferred accrued interest. . . . . . . . . . . . . . .     6,163,118       7,753,463 
    Partnership's share of (earnings) loss from operations of 
      unconsolidated ventures . . . . . . . . . . . . . . . . . . . . . . .    (1,679,877)       (359,647)
    Venture partner's share of ventures' operations, gain on sale 
      or disposition of investment properties and extraordinary items . . .      (414,242)          --    
    Gain on liquidation of investment in venture. . . . . . . . . . . . . .         --           (269,147)
    Gain on sale of interests in unconsolidated ventures. . . . . . . . . .    (3,006,762)       (458,844)
    Total gain on disposition of investment property. . . . . . . . . . . .   (23,212,184)          --    
    Extraordinary item, including venture partner's share . . . . . . . . .   (17,451,802)     (3,433,368)
  Changes in:
    Interest, rents and other receivables . . . . . . . . . . . . . . . . .       147,686         267,050 
    Current portion of notes receivable . . . . . . . . . . . . . . . . . .       (63,741)          --    
    Escrow deposits and restricted securities . . . . . . . . . . . . . . .      (500,762)      1,580,040 
    Other restricted securities . . . . . . . . . . . . . . . . . . . . . .       131,318       4,780,021 
    Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . .       598,863         493,085 
    Long-term portion of note receivable. . . . . . . . . . . . . . . . . .      (191,139)          --    
    Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . .      (675,880)     (1,142,172)
    Accrued interest payable. . . . . . . . . . . . . . . . . . . . . . . .      (413,804)     (4,242,896)
    Other current liabilities . . . . . . . . . . . . . . . . . . . . . . .         7,630           --    
    Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . .         --            381,214 
    Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (368,740)       (368,739)
    Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . .       (84,098)        (49,496)
    Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .        61,670           --    
                                                                             ------------     ----------- 
        Net cash provided by (used in) operating activities . . . . . . . .      (459,145)        828,121 
                                                                             ------------     ----------- 



<PAGE>


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

                              CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED


                                                                                 1998             1997    
                                                                             ------------     ----------- 
Cash flows from investing activities:
  Additions to investment properties, excluding amounts from
    escrow deposits and restricted securities . . . . . . . . . . . . . . .      (345,584)     (1,193,492)
  Cash proceeds from sale of investment property. . . . . . . . . . . . . .           200           --    
  Partnership's distributions from unconsolidated venture . . . . . . . . .     5,292,627           --    
  Partnership's contributions to unconsolidated ventures. . . . . . . . . .      (296,488)          --    
  Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . .       (51,563)       (253,625)
                                                                             ------------     ----------- 
        Net cash provided by (used in) investing activities . . . . . . . .     4,599,192      (1,447,117)
                                                                             ------------     ----------- 
Cash flows from financing activities:
  Principal payment on note payable . . . . . . . . . . . . . . . . . . . .         --            (70,701)
  Distributions to venture partners . . . . . . . . . . . . . . . . . . . .       (38,797)       (338,967)
  Contributions from venture partners . . . . . . . . . . . . . . . . . . .       453,039           --    
  Distributions to limited partners . . . . . . . . . . . . . . . . . . . .   (17,759,457)        (32,631)
  Distributions to general partners . . . . . . . . . . . . . . . . . . . .      (425,098)          --    
                                                                             ------------     ----------- 
        Net cash provided by (used in) financing activities . . . . . . . .   (17,770,313)       (442,299)
                                                                             ------------     ----------- 
        Net increase (decrease) in cash 
          and cash equivalents. . . . . . . . . . . . . . . . . . . . . . .   (13,630,266)     (1,061,295)

        Cash and cash equivalents, beginning of year. . . . . . . . . . . .    24,992,726      20,664,264 
                                                                             ------------     ----------- 
        Cash and cash equivalents, end of period. . . . . . . . . . . . . .  $ 11,362,460      19,602,969 
                                                                             ============     =========== 
Supplemental disclosure of cash flow information:
  Cash paid for mortgage and other interest . . . . . . . . . . . . . . . .  $  3,758,907      14,218,542 
                                                                             ============     =========== 
  Non-cash investing and financing activities:
    Non-cash gain recognized on sale of interests
      in unconsolidated ventures. . . . . . . . . . . . . . . . . . . . . .  $  3,006,762         458,844 
                                                                             ============     =========== 
    Sale of investment property:
      Total sale proceeds, net of selling expenses. . . . . . . . . . . . .  $ 74,891,213           --    
      Payoff of mortgage loan . . . . . . . . . . . . . . . . . . . . . . .   (74,891,013)          --    
                                                                             ------------     ----------- 
          Cash proceeds from sale of interest in venture. . . . . . . . . .  $        200           --    
                                                                             ============     =========== 
    Fixed asset additions from escrow deposits and restricted securities. .  $      --            701,182 
                                                                             ============     =========== 



<PAGE>


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

                              CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED



                                                                                 1998             1997    
                                                                             ------------     ----------- 

    Disposition of investment properties:
      Balance due on long-term debt canceled. . . . . . . . . . . . . . . .  $      --         10,932,588 
      Accrued interest expense on accelerated long-term debt. . . . . . . .         --            397,729 
      Reduction of investment property, net . . . . . . . . . . . . . . . .         --         (8,448,879)
      Reduction of other asset and liabilities. . . . . . . . . . . . . . .         --            551,930 
                                                                             ------------     ----------- 
        Non-cash gain recognized due to lender 
          realizing upon security . . . . . . . . . . . . . . . . . . . . .  $      --          3,433,368 
                                                                             ============     =========== 




























<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

                      SEPTEMBER 30, 1998 AND 1997

                              (UNAUDITED)

GENERAL

     Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1997,
which are included in the Partnership's 1997 Annual Report on Form 10-K
(File No. 0-16111) dated on March 21, 1998, as certain footnote disclosures
which would substantially duplicate those contained in such audited
financial statements have been omitted from this report.  Capitalized terms
used but not defined in this quarterly report have the same meanings as in
the Partnership's 1997 Annual Report on Form 10-K.

     The preparation of financial statements in accordance with GAAP
requires the Partnership 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.

     The Partnership adopted 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" as required in the first
quarter of 1996.  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 accordance with
SFAS 121, any properties identified as "held for sale or disposition" are
no longer depreciated.  As of September 30, 1998, the Partnership and its
consolidated ventures have or have previously committed to plans to sell or
dispose of all their remaining investment properties.  Accordingly, all
consolidated properties have been classified as held for sale or
disposition in the accompanying consolidated financial statements as of the
respective dates of such plans' adoption.  The results of operations, net
of venture partners' share, for these properties and for properties sold or
disposed of in the past two years were $22,949 and $(4,881,880),
respectively, for the nine months ended September 30, 1998 and 1997.

     In addition, the accompanying consolidated financial statements
include $1,564,377 and $190,157, respectively, of the Partnership's share
of total property operations of $1,523,100 and $(669,330) for
unconsolidated properties for the nine months ended September 30, 1998 and
1997, respectively, which are held for sale or disposition or have been
sold or disposed of during the past two years.

     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, and
will be, required under applicable law to remit directly to the taxing
authorities amounts representing withholding from distributions paid to
partners.  Due to this, $16,000 representing such withholding was remitted
in 1998 to the state of Maryland on behalf of the Holders of Interests.



<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 and 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 September 30, 1998 and for the nine months ended
September 30, 1998 and 1997 were as follows:

                                                          Unpaid at   
                                                         September 30,
                                   1998         1997        1998      
                                 --------      ------    -------------
Property management and 
  leasing fees. . . . . . . .    $  --          9,246       1,057,092 
Management fees to 
  corporate general
  partner . . . . . . . . . .     708,497        --             --    
Reimbursement (at cost) for 
 out-of-pocket salary and 
 salary-related expenses 
 related to the on-site 
 personnel and other costs 
 for the Partnership and 
 its investment properties. .      64,665     117,417          23,532 
                                 --------     -------       --------- 
                                 $773,162     126,663       1,080,624 
                                 ========     =======       ========= 

     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 $1,732,968 at September 30, 1998 and
December 31, 1997, which consists of management fees and leasing
commissions of $1,057,092 (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.

     An affiliate of the General Partners was entitled to payment of
property management and leasing fees relating to 260 Franklin through
November 1994 and subsequently JMB guaranteed payment to the unaffiliated
third party property manager for the property management and leasing fees. 
Pursuant to a loan modification for the property, property management and
leasing fees were required to be escrowed through December 1995.  Beginning
in January 1996, the unaffiliated property manager was paid management and
leasing fees by the property.  As of September 30, 1998, $1,510,132 of
management and leasing fees remained payable (as a result of the escrowing
of certain 1995 and prior years' management and leasing fees payable to an
affiliate of the General Partners and JMB's payment pursuant to its
guarantee of the fees to the unaffiliated property manager) of which the
Partnership's share is $1,057,092 (included in the table above).  In
connection with the sale of the 260 Franklin Street building, the
Partnership assumed the liability for its prorata share of the unpaid fees,
which amount was transferred to the accounts of the Partnership upon the
sale of 260 Franklin.

     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
September 30, 1998 (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 September 30, 1998 and
December 31, 1997.



<PAGE>


     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 due under such management
termination agreement for the nine months ended September 30, 1998 and 1997
was approximately $57,900 and $22,500, respectively.

JMB/900

     Occupancy of this building at the end of the third quarter of 1998 was
99%.

     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.


     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 leased space has been
renewed or released.  During 1998, approximately $8,091,000 has been
deposited into escrow from net cash flow from property operations.

     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 effected a settlement with
MDIFC by purchasing its claims.  JMB/900 pursued its claims against the
Venture Partners in the bankruptcy forum and sought 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 asserted claims against the venture and JMB/900 including
claims for unpaid Guaranteed Payments in the purported amount of $36
million.  JMB/900 denied that such claims were due and owing and contended
that, in any event, such claims were offset by PPI's failure to pay
interest in the aggregate amount of approximately $36 million on a $20
million loan to PPI.  To the extent that JMB/900 would have been 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
have been allocated to other unsecured creditors of PPI and JRA and,
therefore, JMB/900 might not have received the full amount of the interest
due on the $20 million loan.  However, JMB/900's contributions would have
created a preferred return level payable out of future net cash flow or net
sale or refinancing proceeds.  Furthermore, JMB/900 took the position that
to the extent that it did not receive annual distributions equal to the
interest payable on the $20,000,000 loan, JMB/900's preferred return
deficiency would be increased by the amounts not received, but the Venture
Partners disputed this characterization.

     In order to avoid the risks and further expenses of litigation, and
without any admission of liability, in July 1998 JMB/900 entered into an
agreement (the "Settlement Agreement") with the Venture Partners and a
judgment creditor of JRA and PPI (such judgment creditor and the Venture
Partners are hereinafter collectively referred to as the "Progress
Parties") for the settlement and release of claims and causes of action by


<PAGE>


and against JMB/900 and the Progress Parties.  In addition to the
settlement and release of these claims and causes of action, the Settlement
Agreement generally provides for, among other things, agreement on certain
terms and conditions for sale of the building and subsequent winding up of
the venture.  In addition, under the terms of the Settlement Agreement, JRA
and PPI will seek dismissal of their respective bankruptcy cases or, in the
absence of such dismissal, will seek bankruptcy court approval of the
Settlement Agreement.  JMB/900 will seek to (a) obtain a settlement and
release of claims and causes of action (i) against the Federal Deposit
Insurance Corporation ("FDIC") and (ii) by the FDIC against JMB/900 and
each of the Progress Parties and certain of their related parties, and (b)
purchase the interests of the FDIC in P-C 900 in connection with the
settlement with the FDIC.

     In general, certain terms and conditions of the Settlement Agreement
are to be effective immediately while others (such as the release of the
Venture Partners' claim to the Guaranteed Payments, JMB/900's claim to the
$20 million note payable and accrued interest thereon, as well as other
claims and causes of action in litigation) are conditioned upon the
occurrence of certain events or the satisfaction of specified conditions. 
In addition, the entire Settlement Agreement will be of no further force or
effect unless, among other things, the bankruptcy proceedings involving JRA
and PPI are dismissed or the bankruptcy court approves the Settlement
Agreement by a specified date and JMB/900 acquires the interest of the FDIC
in PC-900 and enters into a settlement and release with the FDIC by
December 1, 1998.  Although the releases by the parties of their respective
claims and causes of action is not effective until certain events occur or
conditions are satisfied, the parties have agreed not to pursue such claims
and causes of action unless the events do not occur or the conditions are
not satisfied and the Settlement Agreement terminates by its terms.

     Under the terms of the Settlement Agreement, for an initial period
ending not later than January 14, 1999, the Progress Parties will have
authority and responsibility for marketing and selling the building,
subject to certain approval rights of JMB/900 with respect to the terms and
conditions of a sale contract for the building (including a specified
minimum sale price).  The Progress Parties have authorized the judgment
creditor of JRA and PPI to take all actions on behalf of the Progress
Parties in respect of a sale of the building and any other matters on their
behalf under the Settlement Agreement.  In the event that a sale of the
building has not been concluded by the end of the initial period, JMB/900
will have authority and responsibility for marketing and selling the
building, provided that the sale price is equal to or greater than a
specified minimum amount.  Current arrangements for management of the
building will remain in effect until its sale.

     Under the terms of the Settlement Agreement, the venture will not make
distributions to JMB/900 or the Venture Partners until the venture has sold
the building and paid, obtained a release from or established reserves for
the payment of its expenses and liabilities.  When made, distributions of
the venture generally are to be made as follows: (1) JMB/900 is to be paid
an amount equal to that paid to acquire the FDIC's interest in PC-900; (2)
up to the next $60 million of distributions are to be made 77.5% to JMB/900
and 22.5% to the Progress Parties, and (3) any additional distributions are
to be made 70% to JMB/900 and 30% to the Progress Parties.  In addition, to
the extent that cash is not currently distributed to JMB/900 and the
Venture Partners, profits or losses from operations of the venture are to
be allocated 70% to JMB/900 and 30% to the Progress Parties.  To the extent
that the venture's operating income exceeds the cash being distributed,
operating income will be allocated in the same manner that an equal amount
of cash from the sale of the building would be distributed (i.e., generally
in either the 77.5% and 22.5% ratio or the 70% and 30% ratio).



<PAGE>


     The Settlement Agreement expressly provides that JMB/900 will have no
further obligation to make any capital contributions to the venture and
that the Venture Partners will have no right to any Guaranteed Payments
from the venture.  In addition, JMB/900 will release its claim for payment
of the $20 million loan and accrued interest thereon.  After sale of the
building JMB/900 will be responsible for winding up the venture.  Under the
Settlement Agreement, certain legal fees and expenses incurred by either
JMB/900 or the Progress Parties will be reimbursed by the venture.

     There is no assurance that all requisite conditions will be satisfied
for effectiveness of all terms and conditions of the Settlement Agreement
or that all conditions will occur or be effected for the Settlement
Agreement (or any provisions thereof) to remain in force and effect. 
Similarly, there is no assurance that JMB/900 will be able to effect a
settlement and release with the FDIC of claims and causes of action and a
purchase of the FDIC's interest in PC-900.

     As the venture has committed to a plan to sell or dispose of the
property, 900 Third Avenue Building was classified as held for sale or
disposition as of July 1, 1998, and therefore, will not be subject to
continued depreciation beyond such date.

CALIFORNIA PLAZA

     Occupancy of the building at the end of the third quarter of 1998 was
96%.  Net cash flow continues to be escrowed with the lender (included in
escrow deposits and restricted securities) pursuant to the December 1993
loan modification.  In 1998, the venture reached a settlement agreement
with a former tenant and accepted a promissory note in the principle amount
of $275,000 with payments of principal and interest amortized over five
years.  As of September 30, 1998, the outstanding balance of the note
receivable was $254,880 which is included in current portion of notes
receivable and long-term portion of note receivable.

PIPER JAFFRAY TOWER

     Occupancy of the building at the end of the third quarter of 1998 was
89%.

     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 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, once a lease was
finalized with Hinshaw in accordance with the letter of intent, Piper had
agreed to terminate Popham's lease (for approximately 47,000 square feet)
effective December 31, 1997 with no further consideration.  In May 1998,
Piper executed the lease with Hinshaw.

     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 September 30, 1998.  The lender is essentially entitled to all
operating cash flow.  Excess cash flow generated during 1997 of $385,523
was remitted to the lender during the second quarter of 1998 from cash held
by the venture.

     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


<PAGE>


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.  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.

260 FRANKLIN STREET BUILDING

     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 a gain on disposal of approximately
$23,200,000 in 1998, 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
$17,500,000 for financial reporting purposes, all of which was allocated to
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 $17,500,000, 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.

WELLS FARGO CENTER

     The mortgage note secured by the property (with a balance of
approximately $169,974,000 as of September 30, 1998), as extended, matures
September, 2003.  All excess cash flow is 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.

     A promissory note secured by the Partnership's interest in the joint
venture, which has an adjusted principal balance of approximately
$40,830,000, and accrued interest of approximately $13,097,000 at September
30, 1998 is due September 2003.  The note 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 joint venture.

     Due to the significant level of indebtedness, it is unlikely that the
Partnership will receive any significant future proceeds from operations,
sale or refinancing.  The disposition of the Partnership's ownership
interest in the property is therefore expected to result in a gain for
Federal income tax purposes with no corresponding distributable proceeds. 
The Partnership has decided not to commit any significant additional
amounts to the property.

NEWPARK MALL

     At September 30, 1998, occupancy of the portion of the shopping center
in which the Partnership owns an interest remained at 77%.  As a result of


<PAGE>


the acquisition by Federated Department Stores of the company which owns
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 Capwell 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. 
These transactions closed in 1997 and the joint venture received net
proceeds of approximately $2,000,000.  The property is producing cash flow
for the joint venture.

     The Partnership and its affiliated venture partner have reached an
agreement in principle to sell their interests in the NewPark joint venture
to the unaffiliated joint venture partner by the end of 1998.  However, the
sale is subject to various contingencies including final documentation, and
therefore, there can be no assurance that such sale will be completed.  If
the sale of the property is completed on the proposed terms, the
Partnership would expect to recognize a gain for both financial reporting
and Federal income tax purposes.  In the event that such sale does not
occur, the Partnership may use a portion of the funds held in reserve to
pay its share of the costs for a possible mall enhancement program at
NewPark Mall, although there are no specific plans currently for such a
program.

RIVEREDGE PLACE BUILDING

     On December 23, 1997, the Partnership sold the RiverEdge Place Office
Building.  In connection with the sale of this Property and as it customary
in such transactions, the Partnership agreed to certain representations,
warranties and covenants in a maximum amount of $500,000, with a stipulated
survival period which expired June 23, 1998 with no liability to the
Partnership.

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 were 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.  Previously, it appeared that the
principals guaranteeing the notes had little or no assets which the
Partnership could pursue for collection and it appeared unlikely that any
further amounts would 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) had been reflected in the
accompanying consolidated financial statements at December 31, 1997.  In
July 1998, the Partnership received final collection, from bankruptcy
proceeds, toward the notes in the amount of $785,998.  Therefore, the
reserve for uncollectiblity was reduced accordingly as of September 30,
1998.

ADJUSTMENTS

     In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments and adjustments to
reflect the treatment given certain transactions in the Partnership's 1997
Annual Report) necessary for a fair presentation have been made to the
accompanying figures as of September 30, 1998 and December 31, 1997 and for
the three and nine months ended September 30, 1998 and 1997.



<PAGE>


PART I.  FINANCIAL INFORMATION

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
investments.

     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. 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 1.97% 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.

    The Partnership currently expects to conduct an orderly liquidation of
the remaining assets in the portfolio, with the possible exception of the
Partnership's interests in Wells Fargo Center - South Tower and Piper
Jaffray Tower, no later than December 31, 1999, barring any unforeseen
economic developments.

     At September 30, 1998, the Partnership and its consolidated ventures
had cash and cash equivalents of approximately $11,362,000.  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.  The Partnership
currently has adequate cash and cash equivalents to maintain the operations
of the Partnership.  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.

     The Partnership and its consolidated ventures have currently budgeted
in 1998 approximately $807,000 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 $2,050,000.  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.



<PAGE>


     During the second quarter, the Partnership and Carlyle-XVI commenced
marketing their interests in the NewPark joint venture for sale.  As
reported in the notes to the accompanying financial statements, the
Partnership and Carlyle-XVI have reached an agreement in principle to sell
their interests in the NewPark joint venture to the unaffiliated joint
venture partner by the end of 1988, although there is no assurance that a
sale of the interests will occur.  In the event such sale does not occur,
the Partnership may use a portion of its reserves to pay its share of the
costs for a possible mall enhancement program at NewPark Mall, although
there are no specific plans currently for such a program.

     On June 30, 1998, JMB/Owings collected approximately $5,598,000, of
which the Partnership's share is approximately $2,800,000, on the remaining
principal balance of the purchase price note received in the sale of its
interest in Owings Mills Shopping Center in 1993.  The collection of the
remaining principal balance of the purchase price note resulted in an
approximate $3,000,000 gain on sale to the Partnership for financial
reporting purposes in 1998.  The Partnership expects to recognize a gain on
sale of approximately $3,100,000 for Federal income tax purposes in 1998.

     In order to avoid the risks and further expenses of litigation, and
without any admission of liability, in July 1998 JMB/900 entered into an
agreement (the "Settlement Agreement") with the Venture Partners and a
judgment creditor of JRA and PPI (such judgment creditor and the Venture
Partners are hereinafter collectively referred to as the "Progress
Parties") for the settlement and release of claims and causes of action by
and against JMB/900 and the Progress Parties.  In addition to the
settlement and release of these claims and causes of action, the Settlement
Agreement generally provides for, among other things, agreement on certain
terms and conditions for sale of the building and subsequent winding up of
the venture.  In addition, under the terms of the Settlement Agreement, JRA
and PPI will seek dismissal of their respective bankruptcy cases or, in the
absence of such dismissal, will seek bankruptcy court approval of the
Settlement Agreement.  JMB/900 will seek to (a) obtain a settlement and
release of claims and causes of action (i) against the Federal Deposit
Insurance Corporation ("FDIC") and (ii) by the FDIC against JMB/900 and
each of the Progress Parties and certain of their related parties, and (b)
purchase the interests of the FDIC in P-C 900 in connection with the
settlement with the FDIC.

     In general, certain terms and conditions of the Settlement Agreement
are to be effective immediately while others (such as the release of the
Venture Partners' claim to the Guaranteed Payments, JMB/900's claim to the
$20 million note payable and accrued interest thereon, as well as other
claims and causes of action in litigation) are conditioned upon the
occurrence of certain events or the satisfaction of specified conditions. 
In addition, the entire Settlement Agreement will be of no further force or
effect unless, among other things, the bankruptcy proceedings involving JRA
and PPI are dismissed or the bankruptcy court approves the Settlement
Agreement by a specified date and JMB/900 acquires the interest of the FDIC
in PC-900 and enters into a settlement and release with the FDIC by
December 1, 1998.  Although the releases by the parties of their respective
claims and causes of action is not effective until certain events occur or
conditions are satisfied, the parties have agreed not to pursue such claims
and causes of action unless the events do not occur or the conditions are
not satisfied and the Settlement Agreement terminates by its terms.

     Under the terms of the Settlement Agreement, for an initial period
ending not later than January 14, 1999, the Progress Parties will have
authority and responsibility for marketing and selling the building,
subject to certain approval rights of JMB/900 with respect to the terms and
conditions of a sale contract for the building (including a specified
minimum sale price).  The Progress Parties have authorized the judgment
creditor of JRA and PPI to take all actions on behalf of the Progress
Parties in respect of a sale of the building and any other matters on their


<PAGE>


behalf under the Settlement Agreement.  In the event that a sale of the
building has not been concluded by the end of the initial period, JMB/900
will have authority and responsibility for marketing and selling the
building, provided that the sale price is equal to or greater than a
specified minimum amount.  Current arrangements for management of the
building will remain in effect until its sale.

     Under the terms of the Settlement Agreement, the venture will not make
distributions to JMB/900 or the Venture Partners until the venture has sold
the building and paid, obtained a release from or established reserves for
the payment of its expenses and liabilities.  When made, distributions of
the venture generally are to be made as follows: (1) JMB/900 is to be paid
an amount equal to that paid to acquire the FDIC's interest in PC-900; (2)
up to the next $60 million of distributions are to be made 77.5% to JMB/900
and 22.5% to the Progress Parties, and (3) any additional distributions are
to be made 70% to JMB/900 and 30% to the Progress Parties.  In addition, to
the extent that cash is not currently distributed to JMB/900 and the
Venture Partners, profits or losses from operations of the venture are to
be allocated 70% to JMB/900 and 30% to the Progress Parties.  To the extent
that the venture's operating income exceeds the cash being distributed,
operating income will be allocated in the same manner that an equal amount
of cash from the sale of the building would be distributed (i.e., generally
in either the 77.5% and 22.5% ratio or the 70% and 30% ratio).

     The Settlement Agreement expressly provides that JMB/900 will have no
further obligation to make any capital contributions to the venture and
that the Venture Partners will have no right to any Guaranteed Payments
from the venture.  In addition, JMB/900 will release its claim for payment
of the $20 million loan and accrued interest thereon.  After sale of the
building JMB/900 will be responsible for winding up the venture.  Under the
Settlement Agreement, certain legal fees and expenses incurred by either
JMB/900 or the Progress Parties will be reimbursed by the venture.

     There is no assurance that all requisite conditions will be satisfied
for effectiveness of all terms and conditions of the Settlement Agreement
or that all conditions will occur or be effected for the Settlement
Agreement (or any provisions thereof) to remain in force and effect. 
Similarly, there is no assurance that JMB/900 will be able to effect a
settlement and release with the FDIC of claims and causes of action and a
purchase of the FDIC's interest in PC-900.

     In February 1998, the Partnership made a distribution 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.  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 this regard, the Partnership expects to recognize a
gain of approximately $17,500,000 for Federal income tax purposes from the
disposition in January 1998 of the 260 Franklin Street Building with no
distributable proceeds from such disposition.  In addition, 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 provide no cash flow to the Partnership.  While loan and


<PAGE>


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.

RESULTS OF OPERATIONS

     Significant fluctuations in the accompanying consolidated financial
statements are due to the sales of the 260 Franklin Street Building in 1998
and the RiverEdge Place office building in December 1997.

     The decrease in cash and cash equivalents at September 30, 1998 as
compared to December 31, 1997 is primarily due to the distribution in
February and September 1998 of previously undistributed sale and operating
proceeds.

     The increases in current portion of notes receivable and long-term
portion of note receivable at September 30, 1998 as compared to December
31, 1997 is due to the promissory note received at California Plaza as
described in the notes.

     The decrease in other restricted securities at September 30, 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 accounts payable at September 30, 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 reclassified to
the Partnership's venture partner (Carlyle-XVI) upon sale of 260 Franklin
Street Building in January 1998.

     The decrease in deferred income at September 30, 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 September 30,
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 nine months ended September 30,
1998 as compared to the same period in 1997 is primarily due to a reduction
in the reserve for uncollectibility on the demand notes related to the
21900 Burbank Boulevard Building.

     The decrease in depreciation expense for the nine months ended
September 30, 1998 as compared to the same period in 1997 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 increase in management fees to corporate general partner for the
three and nine months ended September 30, 1998 as compared to the same
periods in 1997 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.



<PAGE>


     The increase in Partnership's share of operations of unconsolidated
ventures for the three and nine months ended September 30, 1998 as compared
to the same periods in 1997 is primarily due to the classification of the
Piper Jaffray Tower as held for sale as of September 30, 1997 and 900 Third
Avenue as held for sale as of July 1998, and therefore, not subject to
continued depreciation.  Additionally, the increase is also due to
additional profits being allocated to the Partnership as a result of the
Settlement Agreement related to 900 Third Avenue.

     The increase in the venture partner's share of venture operations for
the nine months ended September 30, 1998 as compared to the nine months
ended September 30, 1997 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 sale of the
property.

     The gain on sale of interest in unconsolidated ventures for the three
and nine months ended September 30, 1998 and the nine months ended
September 30, 1997 relates to the recognition of previously deferred gain
from the sale of JMB/Owing's interest in the Owings Mills Limited
Partnership in June 1993.

     The gain on disposition of investment property for the nine months
ended September 30, 1998 relates to the recognition of gain from the sale
of the 260 Franklin Street building, in January 1998.

     The extraordinary item - gain on forgiveness of indebtedness of
$17,451,802 for the nine months ended September 30, 1998 represents
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
gain for the nine months ended September 30, 1997 of $3,433,368 represents
the retirement of the mortgage note of the Springbrook Shopping Center in
full satisfaction upon transfer of title of the property to the lender in
January 1997.



<PAGE>


<TABLE>
PART II.  OTHER INFORMATION
     ITEM 5.  OTHER INFORMATION

                                                  OCCUPANCY

     The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties owned during 1998.

<CAPTION>
                                                    1997                             1998               
                                 --------------------------------------   ------------------------------
                                     At        At         At        At      At       At      At      At 
                                    3/31      6/30       9/30     12/31    3/31     6/30    9/30   12/31
                                    ----      ----       ----     -----    ----     ----   -----   -----
<S>                               <C>       <C>        <C>       <C>      <C>      <C>     <C>    <C>   
1. 900 Third Avenue Building
     New York, New York . . . . .    98%       98%        97%       97%     97%     100%     99%
2. Piper Jaffray Tower 
     Minneapolis, Minnesota . . .    99%       99%        93%       93%     91%      89%     89%
3. Wells Fargo Center 
     - IBM Tower
     Los Angeles, California. . .    93%       90%        90%       90%     90%      90%     90%
4. 260 Franklin Street Building
     Boston, Massachusetts. . . .    96%       97%        98%       98%     N/A      N/A     N/A
5. California Plaza
     Walnut Creek, California . .    90%       96%        96%      100%    100%      96%     96%
6. NewPark Mall
     Newark (Alameda County), 
     California . . . . . . . . .    76%       75%        76%       79%     77%      77%     77%

<FN>
--------------------

     An N/A indicates that the property, or the Partnership's interest in the property was sold or was not owned
by the Partnership at the end of the period.

</TABLE>


<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a)   Exhibits

          3-A.     Amended and Restated Agreement of Limited Partnership,
is hereby incorporated by reference to Exhibit 3 to the Partnership's Form
10-K (File No. 0-16111) for December 31, 1992 dated March 19, 1993.

          3-B.     Acknowledgement of rights and duties of the General
Partners of the Partnership between ABPP Associates, L.P. (a Successor
Associated General Partner of the Partnership), and JMB Realty Corporation
as of December 31, 1995 is incorporated herein by reference to the
Partnership's Report for September 30, 1996 on Form 10-Q (File No. 0-1611)
dated November 8, 1996.

          27.      Financial Data Schedule

          ---------------

          (b)      No reports on Form 8-K have been filed during the last
quarter of the period covered by this report.






<PAGE>


                              SIGNATURES



     Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company 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)




                      By:   GAILEN J. HULL
                            Gailen J. Hull, Senior Vice President
                      Date: November 11, 1998


     Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.




                            GAILEN J. HULL
                            Gailen J. Hull, Principal Accounting Officer
                      Date: November 11, 1998