Securities and Exchange Commission

                             Washington, D.C. 20549

                                    FORM 10-Q


           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 18, 1999

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                           Commission File No. 0-15736


                    COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)
      Delaware                                   52-1468081
-------------------------         -------------------------------------------
(State of Organization)             (I.R.S. Employer Identification Number)

  10400 Fernwood Road, Bethesda, MD                      20817-1109
----------------------------------------      ----------------------------
(Address of principal executive offices)            (Zip Code)

        Registrant's telephone number, including area code: (301) 380-2070
            Securities registered pursuant to Section 12(b) of the Act:
                              Not Applicable
            Securities  registered pursuant to Section 12(g)of the Act:
                      Units of Limited Partnership Interest
                                (Title of Class)

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 and (2) has been subject to such filing requirements for
the past 90 days. Yes X  No .

===============================================================================



<PAGE>


===============================================================================
                        COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
===============================================================================


                                TABLE OF CONTENTS

                                                                        PAGE NO.
                         PART I - FINANCIAL INFORMATION

Item 1.    Financial Statements

           Condensed Statement of Operations
              Twelve and Twenty-Four Weeks Ended June 18, 1999
                and June 19, 1998 (Unaudited).................................1

           Condensed Balance Sheet
              June 18, 1999 (Unaudited) and December 31, 1998.................2

           Condensed Statement of Cash Flows
              Twenty-Four Weeks ended June 18, 1999 and
                June 19, 1998 (Unaudited).....................................3

           Notes to Condensed Financial Statements (Unaudited)................4

Item 2.    Management's Discussion and Analysis of Financial
              Condition and Results of Operations.............................5

Item 3.    Quantitative and Qualitative Disclosures About Market Risk........10


                           PART II - OTHER INFORMATION


Item 1.    Legal Proceedings.................................................10

Item 6.    Exhibits and Reports on Form 8-K..................................11


<PAGE>









                          PART I. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                    COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
                        CONDENSED STATEMENT OF OPERATIONS
                                   (Unaudited)
                     (in thousands, except per unit amounts)


<TABLE>

                                                              Twelve Weeks Ended                 Twenty-Four Weeks Ended
                                                          June 18,          June 19,           June 18,          June 19,
                                                            1999              1998               1999              1998
                                                       --------------    -------------       -------------    ---------
<S>                                                    <C>              <C>                 <C>               <C>
REVENUES
   Hotel revenues
     Rooms.............................................$       45,354    $      44,681       $      88,964    $      86,475
     Food and beverage.................................         3,113            3,166               6,188            6,153
     Other.............................................         1,568            1,562               3,113            3,053
                                                       --------------    -------------       -------------    -------------
       Total hotel revenues............................        50,035           49,409              98,265           95,681
                                                       --------------    -------------       -------------    -------------

OPERATING COSTS AND EXPENSES
   Hotel property-level costs and expenses
     Rooms.............................................        10,150            9,220              19,761           18,049
     Food and beverage.................................         2,764            2,569               5,498            5,125
     Other department costs and expenses...............           510              459                 965              874
     Selling, administrative and other.................        11,091           10,890              22,301           21,585
                                                       --------------    -------------       -------------    -------------
       Total hotel property-level costs and expense....        24,515           23,138              48,525           45,633
   Depreciation .......................................         4,469            4,119               8,818            8,087
   Base and Courtyard management fees..................         3,002            2,965               5,896            5,741
   Incentive management fee............................         2,366            2,565               4,532            4,800
   Ground rent, taxes and other........................         4,004            3,766               8,085            7,630
                                                       --------------    -------------       -------------    -------------

         Total operating costs and expenses............        38,356           36,553              75,856           71,891
                                                       --------------    -------------       -------------    -------------

OPERATING PROFIT.......................................        11,679           12,856              22,409           23,790
   Interest expense....................................        (5,929)          (6,075)            (11,958)         (12,328)
   Interest income.....................................           313              246                 477              370
                                                       --------------    -------------       -------------    -------------

NET INCOME.............................................$        6,063    $       7,027       $      10,928    $      11,832
                                                       ==============    =============       =============    =============

ALLOCATION OF NET INCOME
   General Partner.....................................$          303    $         351       $         546    $         591
   Limited Partners....................................         5,760            6,676              10,382           11,241
                                                       --------------    -------------       -------------    -------------
                                                       $        6,063    $       7,027       $      10,928    $      11,832
                                                       ==============    =============       =============    =============
NET INCOME PER LIMITED PARTNER UNIT
   (1,150 Units).......................................$        5,009    $       5,805       $       9,028    $       9,774
                                                       ==============    =============       =============    =============


                  See Notes to Condensed Financial Statements.
</TABLE>


<PAGE>


                    COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
                             CONDENSED BALANCE SHEET
                                 (in thousands)

<TABLE>


                                                                                            June 18,        December 31,
                                                                                              1999                1998
                                                                                            (Unaudited)
<S>                                                                                     <C>                <C>
                                   ASSETS
   Property and equipment, net..........................................................$        290,218    $       297,189
   Deferred financing costs, net of accumulated amortization............................           5,650              5,854
   Due from Courtyard Management Corporation............................................           5,086              4,210
   Property improvement fund............................................................           8,171              5,475
   Restricted cash......................................................................           7,784              9,315
   Cash and cash equivalents............................................................          15,872              9,203
                                                                                        ----------------    ---------------

                                                                                        $        332,781    $       331,246
                                                                                        ================    ===============

                   LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

LIABILITIES
   Mortgage debt........................................................................$        309,152    $       313,051
   Straight-line ground rent due to affiliates of Marriott International, Inc...........          19,277             19,384
   Debt service guaranty and accrued interest payable to
     Host Marriott Corporation..........................................................          14,474             14,208
   Incentive management fees due to Courtyard Management Corporation....................           4,302              5,653
   Accounts payable and accrued liabilities.............................................           2,903              3,750
                                                                                        ----------------    ---------------

         Total Liabilities..............................................................         350,108            356,046
                                                                                        ----------------    ---------------

PARTNERS' CAPITAL (DEFICIT)
   General Partner......................................................................             631                 85
   Limited Partners.....................................................................         (17,958)           (24,885)
                                                                                        ----------------    ---------------

         Total Partners' Deficit........................................................         (17,327)           (24,800)
                                                                                        ----------------    ---------------

                                                                                        $        332,781    $       331,246
                                                                                        ================    ===============







                  See Notes to Condensed Financial Statements.

</TABLE>

<PAGE>


                    COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
                        CONDENSED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)


<TABLE>

                                                                                               Twenty-Four Weeks Ended
                                                                                            June 18,            June 19,
                                                                                              1999                1998
                                                                                        ----------------    ----------
<S>                                                                                     <C>                 <C>
OPERATING ACTIVITIES
   Net income...........................................................................$         10,928    $        11,832
   Noncash items........................................................................           9,289              8,582
   Changes in operating accounts........................................................          (1,594)              (229)
                                                                                        ----------------    ---------------

         Cash provided by operating activities..........................................          18,623             20,185
                                                                                        ----------------    ---------------

INVESTING ACTIVITIES
   Change in property improvement fund..................................................          (2,696)            (3,026)
   Additions to property and equipment, net.............................................          (1,848)            (8,382)
                                                                                        ----------------    ---------------

         Cash used in investing activities..............................................          (4,544)           (11,408)
                                                                                        ----------------    ---------------

FINANCING ACTIVITIES
   Repayments of mortgage debt..........................................................          (3,899)            (3,606)
   Capital distributions................................................................          (3,455)            (2,420)
   Change in debt reserve...............................................................             (56)                90
   Payment of financing costs...........................................................              --                 (2)
                                                                                        ----------------    ---------------

         Cash used in financing activities..............................................          (7,410)            (5,938)
                                                                                        ----------------    ---------------

INCREASE IN CASH AND CASH EQUIVALENTS...................................................           6,669              2,839

CASH AND CASH EQUIVALENTS at beginning of period........................................           9,203              5,450
                                                                                        ----------------    ---------------

CASH AND CASH EQUIVALENTS at end of period..............................................$         15,872    $         8,289
                                                                                        ================    ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid for mortgage interest......................................................$         12,383    $        12,681
                                                                                        ================    ===============






                  See Notes to Condensed Financial Statements.

</TABLE>

<PAGE>


                    COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   Summary of Significant Accounting Policies

     The accompanying unaudited condensed interim financial statements have been
     prepared  by  the   Courtyard   By  Marriott   Limited   Partnership   (the
     "Partnership").  Certain  information  and  footnote  disclosures  normally
     included in financial  statements  presented in accordance  with  generally
     accepted  accounting  principles  have been  condensed  or omitted from the
     accompanying statements.  The Partnership believes the disclosures made are
     adequate to make the  information  presented not misleading.  However,  the
     unaudited  condensed  interim  financial   statements  should  be  read  in
     conjunction with the Partnership's  financial  statements and notes thereto
     included in the Partnership's  Form 10-K for the fiscal year ended December
     31, 1998.

     In the opinion of the  Partnership,  the accompanying  unaudited  condensed
     financial  statements  reflect all adjustments  necessary to present fairly
     the  financial  position of the  Partnership  as of June 18, 1999,  and the
     results of operations for the twelve and  twenty-four  weeks ended June 18,
     1999 and June 19, 1998 and cash flows for the twenty-four  weeks ended June
     18, 1999 and June 19, 1998. Interim results are not necessarily  indicative
     of fiscal year performance because of seasonal and short-term variations.

     For financial  reporting  purposes,  the net income of the  Partnership  is
     allocated  95% to the Limited  Partners and 5% to CBM One LLC (the "General
     Partner").  Significant  differences  exist  between  the  net  income  for
     financial reporting purposes and the net income reported for Federal income
     tax purposes. These differences are due primarily to the use for income tax
     purposes of accelerated depreciation methods, shorter depreciable lives for
     the assets,  differences  in the timing of the  recognition of certain fees
     and straight-line rent adjustments.

     Certain  reclassifications were made to the prior year financial statements
to conform to the 1999 presentation.

2.   Revenues

     Revenues primarily represent the gross sales generated by the Partnership's
     Hotels.  On November 20, 1997,  the Emerging  Issues Task Force ("EITF") of
     the Financial  Accounting Standards Board reached a consensus on EITF 97-2,
     "Application  of FASB  Statement No. 94 and APB Opinion No. 16 to Physician
     Practice  Management  Entities and Certain Other Entities with  Contractual
     Management  Arrangements." EITF 97-2 addresses the circumstances in which a
     management entity may include the revenues and expenses of a managed entity
     in its financial statements.

     The  Partnership  considered  the  impact  of EITF  97-2  on its  condensed
     financial statements and determined that EITF 97-2 requires the Partnership
     to include property-level sales and operating expenses of its Hotels in its
     condensed  statement of operations.  The Partnership has given  retroactive
     effect to the adoption of EITF 97-2 in the accompanying condensed statement
     of  operations.  Application  of  EITF  97-2  to  the  condensed  financial
     statements  for the twelve and  twenty-four  weeks  ended June 18, 1999 and
     June  19,  1998   increased   both  revenues  and  operating   expenses  by
     approximately  $24.5  million and $48.5 million and $23.1 million and $45.6
     million, respectively, and had no impact on operating profit or net income.


<PAGE>


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


FORWARD-LOOKING STATEMENTS

Certain matters discussed herein are forward-looking  statements.  Certain,  but
not necessarily all, of such forward-looking statements can be identified by the
use of  forward-looking  terminology,  such  as  "believes,"  "expects,"  "may,"
"will,"  "should,"  "estimates," or  "anticipates,"  or the negative  thereof or
other  variations  thereof  or  comparable   terminology.   All  forward-looking
statements  involve  known and unknown  risks,  uncertainties  and other factors
which may cause our actual transactions, results, performance or achievements to
be materially  different from any future transactions,  results,  performance or
achievements expressed or implied by such forward-looking  statements.  Although
the  Partnership  believes the  expectations  reflected in such  forward-looking
statements are based upon  reasonable  assumptions,  the Partnership can give no
assurance that its expectations will be attained or that any deviations will not
be material.  The Partnership  undertakes no obligation to publicly  release the
result of any revisions to these forward-looking  statements that may be made to
reflect any future events or circumstances.

RESULTS OF OPERATIONS

Revenues.  Revenues  increased  $626,000 and $2.6  million to $50.0  million and
$98.3  million  for the  twelve  and  twenty-four  weeks  ended  June 18,  1999,
respectively.  The  increase  in  revenues  was  achieved  primarily  through an
increase in the  combined  average  room rate.  The  combined  average room rate
increased 1.6% to $90 for second  quarter 1999 and 2.2% to $90 for  year-to-date
second  quarter  1999 as compared to the same  periods in 1998.  The increase in
average room rate is  primarily  due to  continued  efforts to increase  weekday
pricing.

Combined average  occupancy for the twelve and twenty-four  weeks ended June 18,
1999  remained  stable at 81% and 83%,  respectively,  when compared to the same
periods in 1998.  Occupancy  remained  steady due to increased  competition  and
aggressive  rate  increases in some  markets.  REVPAR,  or revenue per available
room,  represents the combination of the average daily room rate charged and the
average daily occupancy  achieved.  REVPAR for the twelve and twenty-four  weeks
ended June 18, 1999 was $73 and $75 respectively, representing a slight increase
when compared to the same periods in 1998.

Operating  Costs and  Expenses.  For the twelve weeks ended June 18,  1999,  the
Partnership's  operating  costs and  expenses  increased  $1.8  million to $38.4
million as compared to the same period in 1998. In addition, for the twenty-four
weeks ended June 18, 1999,  operating costs and expenses  increased $4.0 million
to $75.9  million.  As a percentage  of revenues,  operating  costs and expenses
increased  from 74% of revenues  for the second  quarter 1998 to 77% of revenues
for second quarter 1999. For year-to-date  second quarter 1999,  operating costs
and  expenses as a  percentage  of revenues  increased  from 75% of revenues for
year-to-date  second  quarter  1998 to 77% of revenues for  year-to-date  second
quarter 1999. The increase in operating  costs and expenses was primarily due to
an increase in property-level costs and expenses at the Hotels.

The Partnership's Hotel property-level costs and expenses increased $1.4 million
to  $24.5  million  and  $2.9  million  to  $48.5  million  for the  twelve  and
twenty-four weeks ended June 18, 1999 when compared to the same periods in 1998.
Hotel  property-level  costs and  expenses  are  higher as  salary  and  benefit
expenses  have  increased as the Hotels  endeavor to maintain  competitive  wage
scales.  In  addition,  food and beverage  costs as well as  marketing  expenses
increased  in 1999 as  compared  to 1998.  As a  percentage  of hotel  revenues,
property-level  costs and expenses  represented  49% of revenues for both second
quarter 1999 and year-to-date second quarter 1999 as compared to 47% of revenues
for second  quarter 1998 and 48% of revenues  for  year-to-date  second  quarter
1998.

Operating Profit. As a result of the changes in revenues and operating costs and
expenses  discussed above,  operating  profit decreased $1.2 million,  or 9%, to
$11.7 million, or 23% of revenues, for the twelve weeks ended June 18, 1999 from
$12.9  million,  or 26% of revenues for the twelve weeks ended June 19, 1998. In
addition,  operating profit decreased $1.4 million,  or 6%, to $22.4 million, or
23% of  revenues,  for the  twenty-four  weeks  ended  June 18,  1999 from $23.8
million, or 25% of revenues, for the twenty-four weeks ended June 19, 1998.

Interest Expense.  Interest expense  decreased  slightly to $5.9 million for the
twelve  weeks ended June 18,  1999 when  compared to the same period in 1998 and
decreased  $370,000 to $12.0  million for the  twenty-four  weeks ended June 18,
1999  when  compared  to the  same  period  in 1998  as a  result  of  principal
amortization on the Partnership's mortgage debt.

Net  Income.  As a result of the items  discussed  above,  net income  decreased
$964,000 to $6.1 million, or 12% of revenues for the twelve weeks ended June 18,
1999 when  compared to $7.0  million,  or 14% of revenues  for the twelve  weeks
ended June 19, 1998.  Net income for the  twenty-four  weeks ended June 18, 1999
decreased  $904,000 to $10.9  million,  or 11% of revenues when  compared  $11.8
million or 12% of revenues for the twenty-four weeks ended June 19, 1998.


LIQUIDITY AND CAPITAL RESOURCES

The  Partnership's  financing needs have  historically  been funded through loan
agreements with various lenders and Host Marriott Corporation ("Host Marriott").
The General Partner believes that the Partnership  will have sufficient  capital
resources  and  liquidity  to continue to conduct its  business in the  ordinary
course.

Principal Sources and Uses of Cash

The  Partnership's  principal source of cash is from  operations.  Its principal
uses of cash are to make debt service  payments,  fund the property  improvement
fund and to make distributions to limited partners.

Cash provided by operations  for the  twenty-four  weeks ended June 18, 1999 and
June 19, 1998, was $18.6 million and $20.2 million,  respectively.  The decrease
in cash provided by operations was due to an increase in the receivable  balance
due from the Manager at June 18,  1999 when  compared to the balance at June 19,
1998 and the  required  payment of $1.4  million  to the  Manager  for  deferred
incentive management fees.

Cash used in investing activities was $4.5 million for the first two quarters of
1999 and $11.4  million  for the first two  quarters  of 1998.  The  decrease in
investing  activities was due to the decrease in capital expenditures related to
the completion of 10-year rooms renovations at a majority of the Hotels prior to
and during 1998.

The Partnership's  investing activities also involve making contributions to the
property  improvement  fund  for  the  Hotels.  Contributions  to  the  property
improvement  fund  increased  to 6% of  Hotel  sales  in 1999  from 5% in  1998.
Contributions to the property improvement fund will remain at 6% through the end
of the fiscal year 2000 and may be increased  thereafter  to 7% at the option of
the Manager.



<PAGE>


Cash used in  financing  activities  was $7.4  million and $5.9  million for the
first two quarters of 1999 and 1998, respectively.  During the twenty-four weeks
ended June 18, 1999 and June 19, 1998, the  Partnership  repaid $3.9 million and
$3.6  million,  respectively,  of principal on the mortgage  debt.  Cash used in
financing  activities  also  included  $3.5  million  and $2.4  million  of cash
distributions  to limited  partners during the twenty-four  weeks ended June 18,
1999 and June 19, 1998, respectively.

Strategy for Liquidity

The General Partner is continuing to explore  alternatives to provide  liquidity
for the Partnership and maximize the value of the limited partners'  investment.
During second quarter 1999, an investment  banking firm, acting as an advisor to
the  Partnership  provided  financial  information  to a number  of  prospective
purchasers for their review and analysis. The General Partner and the investment
banking firm are working with prospective purchasers in an effort to negotiate a
transaction that will provide  liquidity for the Partnership  while securing the
highest  possible  value for the limited  partner  units;  however,  the General
Partner can make no assurances as to the outcome of these efforts.

YEAR 2000 ISSUES

Year 2000  issues  have arisen  because  many  existing  computer  programs  and
chip-based  embedded technology systems use only the last two digits to refer to
a year,  and  therefore do not  properly  recognize a year that begins with "20"
instead of the familiar "19." If not corrected, many computer applications could
fail or create erroneous results.  The following disclosure provides information
regarding the current status of the Partnership's Year 2000 compliance program.

Host Marriott  Corporation ("Host  Marriott"),  general partner of Host Marriott
L.P., which owns directly and indirectly, more than 95% of the economic interest
of the General Partner,  including the 1% managing member interest,  has adopted
the  compliance  program  because it recognizes the importance of minimizing the
number and seriousness of any disruptions that may occur as a result of the Year
2000 issue.  Host Marriott's  compliance  program includes an assessment of Host
Marriott's  hardware and software computer systems and embedded systems, as well
as an  assessment  of the Year 2000 issues  relating to third parties with which
Host Marriott has a material  relationship  or whose systems are material to the
operations of the Partnership's Inns. Host Marriott's efforts to ensure that its
computer  systems are Year 2000 compliant have been segregated into two separate
phases: in-house systems and third-party systems.

In-House  Systems.   Host  Marriott  has  invested  in  the  implementation  and
maintenance of accounting and reporting  systems and equipment that are intended
to  enable  the  Partnership  to  provide  adequately  for its  information  and
reporting  needs and which are also Year 2000  compliant.  Substantially  all of
Host  Marriott's  in-house  systems  have  already  been  certified as Year 2000
compliant  through  testing  and other  mechanisms,  and Host  Marriott  has not
delayed any systems projects due to the Year 2000 issue. Host Marriott engaged a
third  party to review its Year 2000  in-house  readiness  and found no problems
with any mission  critical  systems.  Host  Marriott  believes that future costs
associated with Year 2000 issues for its in-house  systems will be insignificant
and, therefore,  not impact the Partnership's business,  financial condition and
results of  operations.  Host Marriott has not  developed,  and does not plan to
develop,  a separate  contingency  plan for its  in-house  systems  due to their
current Year 2000  compliance.  Host  Marriott  does,  however,  have the normal
disaster recovery procedures in place should it have a systems failure.



<PAGE>


Third-Party  Systems.  The  Partnership  relies upon  operational and accounting
systems provided by third parties, primarily the Manager of its Inns, to provide
the appropriate  property-specific  operating  systems  (including  reservation,
phone,  elevator,  security,  HVAC and other  systems)  and to  provide  it with
financial  information.  Based on  discussions  with the third  parties that are
critical to the Partnership's business,  including the Manager of its Inns, Host
Marriott  believes  that these  parties  are in the  process of  studying  their
systems and the systems of their respective  vendors and service  providers and,
in many cases,  have begun to  implement  changes,  to ensure that they are Year
2000 compliant. Host Marriott continues to receive verbal and written assurances
that these third  parties are, or will be, Year 2000  compliant on time.  To the
extent these changes  impact  property-level  systems,  the  Partnership  may be
required to fund capital  expenditures for upgraded equipment and software.  The
Partnership  does not expect these  charges to be material,  but is committed to
making these investments as required. To the extent that these changes relate to
the  Manager's   centralized   systems  (including   reservations,   accounting,
purchasing,   inventory,   personnel  and  other  systems),   the  Partnership's
management  agreement  generally  provides  for these costs to be charged to the
Partnership's properties. Host Marriott expects that the Manager will incur Year
2000  costs  for its  centralized  systems  in lieu of costs  related  to system
projects that otherwise would have been pursued and therefore, its overall level
of  centralized  systems  charges  allocated  to the Inns  will  not  materially
increase as a result of the Year 2000 compliance effort.  Host Marriott believes
that this deferral of certain system projects will not have a material impact on
its future  results of  operations,  although it may delay certain  productivity
enhancements at the  Partnership's  Inns. Host Marriott will continue to monitor
the efforts of these third  parties to become Year 2000  compliant and will take
appropriate steps to address any non-compliance issues. The Partnership believes
that in the event of material Year 2000  non-compliance,  the  Partnership  will
have the  right to seek  recourse  against  the  Manager  under  its  management
agreement.  The management agreement,  however,  generally does not specifically
address the Year 2000 compliance issue. Therefore, the amount of any recovery in
the event of Year 2000 non-compliance at a property, if any, is not determinable
at this time.

Host  Marriott  will work  with the third  parties  to ensure  that  appropriate
contingency  plans will be developed to address the most reasonably likely worst
case  Year  2000  scenarios,  which  may not  have  been  identified  fully.  In
particular,  Host Marriott has had extensive discussions regarding the Year 2000
problem with Marriott International,  Inc. ("MII"), the parent of the Manager of
the  Partnership's  Inns. Due to the  significance  of MII to the  Partnership's
business, a detailed description of MII's state of readiness follows.

MII has adopted an eight-step process toward Year 2000 readiness,  consisting of
the following: (i) Awareness: fostering understanding of, and commitment to, the
problem and its  potential  risks;  (ii)  Inventory:  identifying  and  locating
systems  and  technology  components  that may be  affected;  (iii)  Assessment:
reviewing these components for Year 2000 compliance,  and assessing the scope of
Year 2000 issues; (iv) Planning:  defining the technical solutions and labor and
work plans  necessary for each  affected  system;  (v)  Remediation/Replacement:
completing  the  programming  to renovate  or replace  the  problem  software or
hardware; (vi) Testing and Compliance Validation:  conducting testing,  followed
by  independent  validation  by a separate  internal  verification  team;  (vii)
Implementation:  placing  the  corrected  systems and  technology  back into the
business environment; and (viii) Quality Assurance:  utilizing an internal audit
team to review  significant  projects  for  adherence to quality  standards  and
program methodology.

MII has grouped its systems and technology into three categories for purposes of
Year 2000 compliance:  (i) information resource applications and technology ("IT
Applications")  --  enterprise-wide   systems  supported  by  MII's  centralized
information  technology  organization  ("IR"); (ii)  Business-initiated  Systems
("BIS") - systems that have been  initiated by an individual  business unit, and
that are not supported by MII's IR  organization;  and (iii) Building  Systems -
non-IT  equipment  at  properties  that use  embedded  computer  chips,  such as
elevators,  automated room key systems and HVAC  equipment.  MII is prioritizing
its efforts based on how severe an effect  noncompliance  would have on customer
service,  core  business  processes or revenues,  and whether  there are viable,
non-automated fallback procedures ("System Criticality").

MII measures the  completion  of each phase based on documented  and  quantified
results,  weighted for System  Criticality.  As of June 18, 1999, the Awareness,
Inventory,  Assessment  and Planning  phases were complete for IT  Applications,
BIS, and Building Systems. For IT Applications,  the Remediation/Replacement and
Testing phases were 95% complete.  Compliance  Validation had been completed for
approximately  85% of key systems,  with most of the remaining work in its final
stage. For BIS and Building  Systems,  Remediation/Replacement  is substantially
complete with a target date of September  1999. For BIS,  Testing and Compliance
Validation  are in progress.  Testing is over 95% complete for Building  Systems
for  which   approximately  5%  require  further   remediation/replacement   and
re-testing, and Compliance Validation is in progress. Implementation and Quality
Assurance  is 80%  complete  for IT  Applications.  For BIS,  Implementation  is
substantially   complete   while   Quality   Assurance  is  in  progress.   Both
Implementation and Quality Assurance are in progress for Building Systems.

Year  2000  compliance   communications   with  MII's  significant  third  party
suppliers, vendors and business partners, including its franchisees are ongoing.
MII's efforts are focused on the connections most critical to customer  service,
core business processes and revenues, including those third parties that support
the most critical  enterprise-wide IT Applications,  franchisees  generating the
most revenues,  suppliers of the most widely used Building  Systems and BIS, the
top  100  suppliers,  by  dollar  volume,  of  non-IT  products,  and  financial
institutions providing the most critical payment processing functions. Responses
have been  received  from a majority of the firms in this  group.  A majority of
these respondents have either given assurances of timely Year 2000 compliance or
have  identified  the  necessary  actions  to be taken by them or MII to achieve
timely  Year 2000  compliance  for their  products.  Where MII has not  received
satisfactory  responses it is addressing the potential  risks of failure through
its contingency planning process.

MII has  established  a common  approach  for testing and  addressing  Year 2000
compliance  issues for its managed and  franchised  properties.  This includes a
guidance  protocol  for  operated  properties,  and a Year  2000  "Toolkit"  for
franchisees  containing relevant Year 2000 compliance  information.  MII is also
utilizing a Year 2000  best-practices  sharing  system.  MII is  monitoring  the
progress of the managed and franchised properties towards Year 2000 compliance.

Risks.  There can be no assurances that Year 2000 remediation by the Partnership
or third  parties  will be properly and timely  completed,  and failure to do so
could have a material  adverse effect on the  Partnership,  its business and its
financial condition.  The Partnership cannot predict the actual effects to it of
the Year 2000 problem,  which depends on numerous uncertainties such as: whether
significant  third parties  properly and timely  address the Year 2000 issue and
whether  broad-based or systemic  economic  failures may occur. Host Marriott is
also unable to predict the  severity and  duration of any such  failures,  which
could include disruptions in passenger  transportation or transportation systems
generally,  loss of  utility  and/or  telecommunications  services,  the loss or
disruption  of  hotel  and Inn  reservations  made on  centralized  reservations
systems and errors or failures in financial  transactions or payment  processing
systems such as credit  cards.  Due to the general  uncertainty  inherent in the
Year  2000  problem  and the  Partnership's  dependence  on third  parties,  the
Partnership is unable to determine at this time whether the consequences of Year
2000 failures will have a material  impact on the  Partnership.  Host Marriott's
Year 2000 compliance  program is expected to  significantly  reduce the level of
uncertainty  about  the Year  2000  issue and Host  Marriott  believes  that the
possibility of significant interruptions of normal operations should be reduced.


ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership does not have  significant  market risk with respect to interest
rates,  foreign currency  exchanges or other market rate or price risks, and the
Partnership does not hold any financial  instruments for trading purposes. As of
June 18, 1999, all of the Partnership's debt has a fixed interest rate.

However,  the Partnership has a debt service  guaranty advance that is sensitive
to changes in interest rates. The interest  recognized on the debt obligation is
based on the prime rate,  which was 7.75% at  December  31, 1998 and at June 18,
1999. The interest rate, fair value,  and future  maturity  associated with this
debt  obligation  has not  changed  materially  from the amount  reported in the
Partnership's annual report on Form 10-K.


                           PART II. OTHER INFORMATION


ITEM 1.           LEGAL PROCEEDINGS

The  Partnership  and  the  Hotels  are  involved  in  routine   litigation  and
administrative  proceedings arising in the ordinary course of business,  some of
which are expected to be covered by liability  insurance and which  collectively
are not expected to have a material  adverse  effect on the business,  financial
condition or results of operations of the Partnership.

Marvin Schick and Jack Hirsch,  the  plaintiffs in a class action lawsuit styled
Marvin  Schick,  et al. v. Host Marriott  Corporation,  et al., Civil Action No.
15991,  filed their  complaint  on October 16, 1997 in Delaware  Chancery  Court
against  the  General  Partner,  the  Manager  and  certain of their  respective
affiliates,  officers  and  directors.  The  plaintiffs'  claim that the General
Partner agreed to decrease the owner's  priority under the Management  Agreement
for the  benefit of the  Manager  without  obtaining  the consent of the limited
partners.  The lawsuit  includes  claims  against Host  Marriott and the General
Partner  for  breach of  contract  and breach of  fiduciary  duty,  and  against
Marriott International,  Inc. and the Manager for interference with contract and
aiding and  abetting in the breach of  fiduciary  duties.  The  General  Partner
believes that the change in the  Management  Agreement  did not require  limited
partner approval,  because, among other things, it did not result in an increase
in  compensation  to  the  Manager.  The  defendants  filed  an  answer  to  the
plaintiffs'  complaint  and asserted a number of  defenses.  The parties to this
lawsuit have  reached a tentative  agreement to settle the matter and are in the
process of finalizing the settlement.

On March 16, 1998,  limited partners in several  partnerships  sponsored by Host
Marriott,  filed a lawsuit,  styled Robert M. Haas, Sr. and Irwin Randolph Joint
Tenants, et al. v. Marriott  International,  Inc., et al., Case No. 98-CI-04092,
in the 57th  Judicial  District  Court of Bexar County,  Texas against  Marriott
International, Inc. ("Marriott International"),  Host Marriott, various of their
subsidiaries,  J.W. Marriott,  Jr., Stephen Rushmore,  and Hospitality Valuation
Services, Inc. (collectively,  the "Defendants"). The lawsuit now relates to the
following  limited  partnerships:  Courtyard  by Marriott  Limited  Partnership,
Marriott  Residence Inn Limited  Partnership,  Marriott Residence Inn II Limited
Partnership,  Fairfield  Inn by Marriott  Limited  Partnership,  Desert  Springs
Marriott Limited  Partnership,  and Atlanta Marriott Marquis Limited Partnership
(collectively,   the  "Six  Partnerships").   The  plaintiffs  allege  that  the
Defendants  conspired to sell hotels to the Six Partnerships for inflated prices
and that they charged the Six Partnerships  excessive management fees to operate
the Six Partnerships'  hotels. The plaintiffs further allege that the Defendants
committed  fraud,  breached  fiduciary  duties,  and violated the  provisions of
various  contracts.   The  plaintiffs  are  seeking  unspecified   damages.  The
Defendants, which do not include the Six Partnerships,  believe that there is no
truth to the  plaintiffs'  allegations and that the lawsuit is totally devoid of
merit. The Defendants intend to vigorously defend against the claims asserted in
the lawsuit.  They have filed an answer to the plaintiffs' petition and asserted
a number of defenses. A related case concerning Courtyard by Marriott II Limited
Partnership,  ("Courtyard II") was filed by the plaintiff's  lawyers in the same
court,  involves  similar  allegations  against  the  Defendants,  and has  been
certified as a class action. As a result of this development, Courtyard II is no
longer involved in the above-mentioned  lawsuit, Case No. 98-CI-04092.  In March
of this year,  Palm Investors and Equity  Resources filed petitions to intervene
in the Haas  case  with  respect  to  units of  Courtyard  by  Marriott  Limited
Partnership ("CBMI"). In response to these efforts, two other CBMI partners Jack
L. Walker and Murray F. Weiss,  ("Walker & Weiss") filed a petition to intervene
and certify the CBMI  partners as a class.  On April 29, 1999,  the court denied
this petition and refused to certify the CBMI case as a class action, because of
a prior filed class action case  involving  CBMI in  Delaware.  Although the Six
Partnerships  have not been named as Defendants in the lawsuit,  the partnership
agreements relating to the Six Partnerships include an indemnity provision which
requires the Six  Partnerships,  under certain  circumstances,  to indemnify the
general partners against losses, judgments, expenses, and fees.

On April 1,  1999,  Equity  Resource  Fund X,  Equity  Resource  Fund XII,  Palm
Investors,   L.L.C.,  and  Repp  Properties,   L.P.,  limited  partners  in  the
Partnership  and in Courtyard  II,  filed a derivative  lawsuit on behalf of the
Partnership and Courtyard II against Marriott International, Inc., Host Marriott
Corporation,  various of their  subsidiaries,  and several of their  current and
former  executives.  The  plaintiffs  filed this  lawsuit in the 150th  Judicial
District of Bexar County,  Texas and the case is styled Equity  Resource Fund X,
et al. v. CBM One  Corporation,  et al., Case No.  99-CI-04765.  The  plaintiffs
allege that the defendants  conspired to profit at the partnerships'  expense by
entering into  agreements,  including  management  agreements and ground leases,
that were unfair and not commercially reasonable. The plaintiffs further allege,
among other things, that the defendants  committed fraud,  breaches of fiduciary
duties and violated  provisions of the various  agreements.  The  plaintiffs are
seeking disgorgement of all fees and rents paid under the management  agreements
and  leases,  cancellation  or  reformation  of these  agreements,  damages  and
replacement of the general  partners.  The  defendants  believe that there is no
truth to the  plaintiffs'  allegations and that the lawsuit is totally devoid of
merit.  The defendants have filed an answer to the complaint,  asserted a number
of defenses,  and intend to vigorously defend against the claims asserted in the
derivative  lawsuit.  The derivative lawsuit is presently scheduled for trial on
January 10, 2000.


ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                  a.       Exhibits:

                           None.

                  b. Reports on Form 8-K:

                           None.








<PAGE>


                                    SIGNATURE


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this Form  10-Q to be signed on its  behalf by the
undersigned, thereunto duly authorized.


                              COURTYARD BY MARRIOTT
                               LIMITED PARTNERSHIP

                                                     By:      CBM ONE LLC
                                                              General Partner



                  July 30, 1999                      By:      /s/ Earla L. Stowe
                                                              ------------------
                                                              Earla L. Stowe
                                                              Vice President and
                                                              Chief Accounting
                                                              Officer