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, 1996         Commission file #0-16976  




                         ARVIDA/JMB PARTNERS, L.P.
          (Exact name of registrant as specified in its charter)



                Delaware                         36-3507015                
      (State of organization)           (IRS Employer Identification No.)  



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




Registrant's telephone number, including area code 312/440-4800




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 a shorter period that
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes   X     No      





                             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. . . . . . . . . . . . . . . . . . . . . .    20




PART II    OTHER INFORMATION


Item 1.    Legal Proceedings . . . . . . . . . . . . . . . . . .    26

Item 6.    Exhibits and Reports on Form 8-K. . . . . . . . . . .    29





<TABLE>
PART I.  FINANCIAL INFORMATION

     ITEM 1.  FINANCIAL STATEMENTS

                                             ARVIDA/JMB PARTNERS, L.P.
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES

                                            CONSOLIDATED BALANCE SHEETS

                                     SEPTEMBER 30, 1996 AND DECEMBER 31, 1995

                                                    (UNAUDITED)

                                                      ASSETS
                                                      ------

<CAPTION>
                                                                                SEPTEMBER 30,     DECEMBER 31,
                                                                                     1996            1995     
                                                                                -------------     ----------- 
<S>                                                                             <C>              <C>          
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . .       $ 12,944,584      20,171,289 
Restricted cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         13,550,544      13,852,395 
Trade and other accounts receivable (net of allowance for doubtful 
  accounts of $246,324 at September 30, 1996 and $236,052 at 
  December 31, 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . .          8,864,063      28,056,262 
Mortgages receivable, net. . . . . . . . . . . . . . . . . . . . . . . . .          1,243,946       1,994,583 
Real estate inventories. . . . . . . . . . . . . . . . . . . . . . . . . .        202,285,303     199,372,799 
Property and equipment, net. . . . . . . . . . . . . . . . . . . . . . . .         79,699,815      71,842,531 
Investments in and advances to joint ventures, net . . . . . . . . . . . .          3,628,728      13,955,093 
Equity memberships . . . . . . . . . . . . . . . . . . . . . . . . . . . .          6,598,144       7,367,266 
Amounts due from affiliates. . . . . . . . . . . . . . . . . . . . . . . .            967,503       1,131,697 
Prepaid expenses and other assets. . . . . . . . . . . . . . . . . . . . .          7,523,451       8,695,326 
                                                                                 ------------    ------------ 

          Total assets . . . . . . . . . . . . . . . . . . . . . . . . . .       $337,306,081     366,439,241 
                                                                                 ============    ============ 

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

Liabilities:
  Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . .       $    150,893       3,972,987 
  Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .         20,244,981      22,918,450 
  Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         19,646,749      23,825,499 
  Accrued expenses and other liabilities . . . . . . . . . . . . . . . . .         17,483,731      12,718,654 
  Notes and mortgages payable, net . . . . . . . . . . . . . . . . . . . .         39,403,096      70,338,364 
                                                                                 ------------    ------------ 
  Commitments and contingencies 

          Total liabilities. . . . . . . . . . . . . . . . . . . . . . . .         96,929,450     133,773,954 
                                                                                 ------------    ------------ 

Partners' capital accounts:
  General Partner and Associate Limited Partners:
    Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . .             20,000          20,000 
    Cumulative net income. . . . . . . . . . . . . . . . . . . . . . . . .         35,657,309      34,994,723 
    Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . .        (34,492,286)    (33,912,035)
                                                                                 ------------    ------------ 
                                                                                    1,185,023       1,102,688 
                                                                                 ------------    ------------ 
  Limited Partners:
    Capital contributions, net of offering costs . . . . . . . . . . . . .        364,841,815     364,841,815 
    Cumulative net income. . . . . . . . . . . . . . . . . . . . . . . . .         26,889,201       8,815,556 
    Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . .       (152,539,408)   (142,094,772)
                                                                                 ------------    ------------ 
                                                                                  239,191,608     231,562,599 
                                                                                 ------------    ------------ 
          Total partners' capital accounts . . . . . . . . . . . . . . . .        240,376,631     232,665,287 
                                                                                 ------------    ------------ 

          Total liabilities and partners' capital. . . . . . . . . . . . .       $337,306,081     366,439,241 
                                                                                 ============    ============ 
<FN>
                                    The accompanying notes are an integral part
                                    of these consolidated financial statements.
</TABLE>




<TABLE>
                                             ARVIDA/JMB PARTNERS, L.P.
                                       CONSOLIDATED STATEMENTS OF OPERATIONS

                              THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

                                                    (UNAUDITED)

<CAPTION>
                                                          THREE MONTHS ENDED             NINE MONTHS ENDED     
                                                             SEPTEMBER 30                   SEPTEMBER 30       
                                                      --------------------------    -------------------------- 
                                                          1996           1995           1996           1995    
                                                      -----------     ----------    -----------    ----------- 
<S>                                                  <C>             <C>           <C>            <C>          
Revenues:
  Housing. . . . . . . . . . . . . . . . . . . . .    $54,010,856     52,852,200    154,106,035    153,272,951 
  Homesites. . . . . . . . . . . . . . . . . . . .      6,388,362      8,095,500     14,809,610     20,592,114 
  Land and property. . . . . . . . . . . . . . . .      5,093,464      2,233,962     19,853,665     27,456,635 
  Operating properties . . . . . . . . . . . . . .      6,726,081      6,138,199     22,300,362     21,344,683 
  Brokerage and other operations . . . . . . . . .      7,142,108      6,633,496     20,931,980     21,367,572 
                                                      -----------     ----------    -----------    ----------- 
        Total revenues . . . . . . . . . . . . . .     79,360,871     75,953,357    232,001,652    244,033,955 
                                                      -----------     ----------    -----------    ----------- 
Cost of revenues:
  Housing. . . . . . . . . . . . . . . . . . . . .     48,047,779     46,283,942    132,596,690    129,390,715 
  Homesites. . . . . . . . . . . . . . . . . . . .      4,238,549      4,582,978     10,182,604     12,705,371 
  Land and property. . . . . . . . . . . . . . . .      1,371,878        763,071     13,298,625     11,715,187 
  Operating properties . . . . . . . . . . . . . .      6,771,381      6,688,270     21,119,659     20,803,206 
  Brokerage and other operations . . . . . . . . .      6,510,860      6,307,434     19,346,466     20,033,598 
                                                      -----------     ----------    -----------    ----------- 
        Total cost of revenues . . . . . . . . . .     66,940,447     64,625,695    196,544,044    194,648,077 
                                                      -----------     ----------    -----------    ----------- 
Gross operating profit . . . . . . . . . . . . . .     12,420,424     11,327,662     35,457,608     49,385,878 
Selling, general and administrative expenses . . .     (5,206,752)    (4,959,400)   (14,993,374)   (17,408,010)
Writedowns to the carrying value of
  real estate inventories and
  other assets . . . . . . . . . . . . . . . . . .          --        (8,544,668)         --        (8,544,668)
                                                      -----------     ----------    -----------    ----------- 
        Net operating income . . . . . . . . . . .      7,213,672     (2,176,406)    20,464,234     23,433,200 

Interest income. . . . . . . . . . . . . . . . . .        344,098        231,171      1,125,991        842,833 
Equity in earnings (losses) of 
  unconsolidated ventures. . . . . . . . . . . . .        (18,076)       (51,131)      (134,989)     1,028,054 
Interest and real estate taxes, net. . . . . . . .       (836,180)    (1,069,026)    (2,719,005)    (3,382,471)
                                                      -----------     ----------    -----------    ----------- 
        Income (loss) before cumulative effect
          due to change in accounting for 
          long-lived assets. . . . . . . . . . . .      6,703,514     (3,065,392)    18,736,231     21,921,616 

        Cumulative effect due to change 
          in accounting for long-lived 
          assets . . . . . . . . . . . . . . . . .          --             --             --        (2,200,000)
                                                      -----------     ----------    -----------    ----------- 

        Net income (loss). . . . . . . . . . . . .    $ 6,703,415     (3,065,392)    18,736,231     19,721,616 
                                                      ===========     ==========    ===========    =========== 

        Net income (loss) per 
          Limited Partnership 
          Interest . . . . . . . . . . . . . . . .    $     16.42          (7.52)         44.74          47.71 
                                                      ===========     ==========    ===========    =========== 

        Cash distributions per 
          Limited Partnership 
          Interest . . . . . . . . . . . . . . . .    $     --             --             25.85          13.49 
                                                      ===========     ==========    ===========    =========== 















<FN>
              The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>




<TABLE>
                                             ARVIDA/JMB PARTNERS, L.P.
                                              (A LIMITED PARTNERSHIP)
                                             AND CONSOLIDATED VENTURES

                                       CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

                                                    (UNAUDITED)

<CAPTION>
                                                                                      1996              1995    
                                                                                  ------------      ----------- 
<S>                                                                              <C>               <C>          
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 18,736,231       19,721,616 
Charges (credits) to net income not requiring (providing) cash:
  Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . .     4,268,610        4,142,937 
  Equity in (earnings) losses of unconsolidated ventures . . . . . . . . . . . .       134,989       (1,028,054)
  Provision for doubtful accounts. . . . . . . . . . . . . . . . . . . . . . . .       (10,272)             797 
  Loss (gain) on disposition of property and equipment . . . . . . . . . . . . .        (8,591)      (3,558,118)
  Writedowns to the carrying value of real estate
    inventories and other assets . . . . . . . . . . . . . . . . . . . . . . . .         --           8,544,668 
  Cumulative effect due to change in accounting for
    long-lived assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         --           2,200,000 
Changes in:
  Restricted cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       301,851       (1,123,041)
  Trade and other accounts receivable. . . . . . . . . . . . . . . . . . . . . .    19,202,471        2,499,213 
  Real estate inventories:
    Additions to real estate inventories . . . . . . . . . . . . . . . . . . . .  (152,167,117)    (171,146,574)
    Cost of sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   156,077,919      153,811,273 
    Capitalized interest . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (3,841,138)      (6,305,017)
    Capitalized real estate taxes. . . . . . . . . . . . . . . . . . . . . . . .    (2,982,168)      (3,346,249)
  Equity memberships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       769,122        1,311,007 
  Amounts due from affiliates. . . . . . . . . . . . . . . . . . . . . . . . . .       164,194          303,283 
  Prepaid expenses and other assets. . . . . . . . . . . . . . . . . . . . . . .       922,522         (230,059)
  Accounts payable, accrued expenses and other liabilities . . . . . . . . . . .     2,018,785        1,730,068 
  Deposits and unearned income . . . . . . . . . . . . . . . . . . . . . . . . .    (4,178,750)       2,075,961 
                                                                                  ------------      ----------- 

          Net cash provided by operating activities. . . . . . . . . . . . . . .    39,408,658        9,603,711 
                                                                                  ------------      ----------- 
Cash flows from investing activities:
  Mortgages receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       750,637          222,122 
  Acquisitions of property and equipment . . . . . . . . . . . . . . . . . . . .   (11,892,813)      (9,682,156)
  Proceeds from sales and disposals of property and equipment. . . . . . . . . .        24,863        7,027,220 
  Joint venture distributions (contributions), net . . . . . . . . . . . . . . .       (14,276)       1,212,594 
  Payments from (advances to) joint ventures . . . . . . . . . . . . . . . . . .     4,167,035          (50,590)
  Proceeds from sale of joint venture interest . . . . . . . . . . . . . . . . .     6,111,440            --    
                                                                                  ------------      ----------- 
          Net cash used in investing activities. . . . . . . . . . . . . . . . .      (853,114)      (1,270,810)
                                                                                  ------------      ----------- 
Cash flows from financing activities:
  Proceeds from notes and mortgages payable. . . . . . . . . . . . . . . . . . .    30,980,173       46,816,477 
  Payments of notes and mortgages payable. . . . . . . . . . . . . . . . . . . .   (61,915,441)     (70,755,693)
  Distributions to General Partner and Associate Limited Partners. . . . . . . .      (580,251)        (302,689)
  Distributions to Limited Partners. . . . . . . . . . . . . . . . . . . . . . .   (10,444,636)      (5,448,464)
  Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (3,822,094)           --    
                                                                                  ------------      ----------- 
          Net cash used in financing activities. . . . . . . . . . . . . . . . .   (45,782,249)     (29,690,369)
                                                                                  ------------      ----------- 
Decrease in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . .    (7,226,705)     (21,357,468)

Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . . . . .    20,171,289       22,024,390 
                                                                                  ------------      ----------- 
Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . .  $ 12,944,584          666,922 
                                                                                  ============      =========== 
Supplemental disclosure of cash flow information:
  Cash paid for mortgage and other interest, net of amounts capitalized. . . . .  $      --               --    
                                                                                  ============      =========== 
  Non-cash investing and financing activities:
    Distribution of land from joint venture. . . . . . . . . . . . . . . . . . .  $      --             717,472 
                                                                                  ============      =========== 







<FN>
              The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>




                         ARVIDA/JMB PARTNERS, L.P.
                          (A LIMITED PARTNERSHIP)
                         AND CONSOLIDATED VENTURES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

                        SEPTEMBER 30, 1996 AND 1995

                                (UNAUDITED)

     Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1995,
which are included in the Partnership's 1995 Annual Report on Form 10-K
(File No. 0-16976) filed on March 25, 1996, 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 1995 Annual Report.

GENERAL

     Capitalized Interest and Real Estate Taxes

     Interest, including the amortization of loan fees, of $3,841,138 and
$6,439,468 was incurred for the nine months ended September 30, 1996 and
1995, respectively, of which $3,841,138 and $6,305,017 was capitalized,
respectively.  Interest payments, including amounts capitalized, of
$3,749,061 and $6,037,837 were made during the nine months ended September
30, 1996 and 1995, respectively.  Interest, including the amortization of
loan fees, of $1,005,182 and $2,051,043 was incurred for the three months
ended September 30, 1996 and 1995, respectively, of which $1,005,182 and
$2,034,716 was capitalized, respectively.  Interest payments of $879,166
and $1,757,846 were made during the three months ended September 30, 1996
and 1995, respectively.  The decrease in interest incurred for the three
and nine months ended September 30, 1996 as compared to the same periods in
1995 is due to a decrease in the average amount of borrowings outstanding
during those periods.  

     Real estate taxes of $5,701,173 and $6,594,269 were incurred for the
nine months ended September 30, 1996 and 1995, respectively, of which
$2,982,168 and $3,346,249 were capitalized, respectively.  Real estate tax
payments of $407,426 and $584,581 were made during the nine months ended
September 30, 1996 and 1995, respectively.  Real estate taxes of $1,932,966
and $2,213,260 were incurred for the three months ended September 30, 1996
and 1995, respectively, of which $1,096,786 and $1,160,561 were
capitalized, respectively.  Real estate tax payments of $195,761 and
$209,576 were made during the three months ended September 30, 1996 and
1995, respectively.  The preceding analysis of real estate taxes does not
include real estate taxes incurred or paid with respect to the Partner-
ship's club facilities and other operating properties as these taxes are
included in cost of revenues for operating properties. 

     Property and Equipment and Other Assets

     Depreciation expense of $4,019,257 and $3,697,257 was incurred for the
nine months ended September 30, 1996 and 1995, respectively.  Amortization
of other assets, excluding loan fees, of $36,541 and $136,349 was incurred
for the nine months ended September 30, 1996 and 1995, respectively. 
Amortization of loan fees, which is included in interest expense, of
$212,812 and $309,331 was incurred for the nine months ended September 30,
1996 and 1995, respectively.  Depreciation expense of $1,350,783 and
$1,143,216 was incurred for the three months ended September 30, 1996 and
1995, respectively.  Amortization of other assets, excluding loan fees, of
$10,503 and $47,015 was incurred for the three months ended September 30,
1996 and 1995, respectively.  Amortization of loan fees, which is included
in interest expense, of $62,079 and $84,777 was incurred in for the three
months ended September 30, 1996 and 1995, respectively.

     Partnership Records

     During March 1996, the Partnership made a distribution for 1995 of
$10,419,160 to its Holders of Interests ($25.79 per Interest) and $578,835
to the General Partner and Associate Limited Partners, collectively.  In
addition, during 1996, the Partnership remitted each Holder's share of a
North Carolina non-resident withholding tax on behalf of each of the
Holders.  Such payments, which totalled $25,476 (approximately $.06 per
Interest), were deemed distributions to the Holders.  Distributions
totalling $1,416 were also paid during 1996 on behalf of the General
Partner and Associate Limited Partners, collectively, a portion of which
was also remitted to the North Carolina tax authorities on their behalf. 
These distributions are the primary cause for the decrease in Cash and cash
equivalents at September 30, 1996 as compared to December 31, 1995.

     Reclassifications

     Certain reclassifications have been made to the 1995 financial
statements to conform to the 1996 presentation.

NOTES AND MORTGAGES PAYABLE

     At September 30, 1996, the Partnership's credit facility consists of a
term loan in the original amount of $85,252,520, a revolving line of credit
facility up to $20 million, an income property term loan in the original
amount of $18,233,326 and a $15 million letter of credit facility.  For the
nine month period ended September 30, 1996, the effective interest rate for
the combined term loan, income property term loan and revolving line of
credit facility was approximately 8.3% per annum.

     Under the term loan agreement, the Partnership made scheduled
principal payments of $10 million in March 1994, February 1995 and February
1996 and $5 million principal payments in July 1995 and July 1996.  The
term loan agreement also provides for additional principal repayments based
upon a specified percentage of available cash flow and upon the sale of
certain assets.  The Partnership's lender waived the requirement for
principal payments based upon a specified percentage of available cash flow
for the year ended December 31, 1995.  During the nine month period ended
September 30, 1996, the Partnership made additional term loan payments
based upon the sale of certain assets totalling approximately $9.0 million.

Included in the $9.0 million is a $2 million principal paydown made from a
portion of the proceeds from the sale of the Partnership's 20% joint
venture interest in Coto de Caza.  The remaining balance outstanding on the
term loan is due in July 1997.  Under the income property term loan,
principal payments of $0.1 million are required to be paid monthly until
maturity.  The income property term loan and the revolving line of credit
were scheduled to mature in March 1996 and December 1995, respectively. 
During March 1996, the Partnership's lenders reached an agreement with each
other whereby one of the lenders purchased the other's participating
interest in the Partnership's credit facilities.  In addition, during March
1996, the successor lender agreed to renew the Partnership's revolving line
of credit, income property term loan and letter of credit facility through
July 1997.  At September 30, 1996, all of the term loan proceeds had been
borrowed with a remaining balance outstanding of $8,562,010.  The balances
outstanding on the revolving line of credit facility, the income property
term loan and the letter of credit facility at September 30, 1996 are $0,
$11,866,746 and $5,248,480, respectively.

     During April 1996, the Partnership refinanced the loan on its retail
property located in its Weston Community with a different lender. The
outstanding principal balance on such loan of approximately $8.1 million is
included in Notes and mortgages payable at September 30, 1996.  In
addition, $3.0 million of subordinated debt attributable to the Cullasaja
Joint Venture is included in Notes and mortgages payable at September 30,
1996.

     The Partnership also has a $24.0 million revolving construction line
of credit for the buildings and certain amenities within the Partnership's
condominium project on Longboat Key, Florida known as Arvida's Grand Bay. 
This line of credit currently bears interest at the lender's prime rate
(8.25% at September 30, 1996) plus 1/2% per annum and matures in January
1997.  At September 30, 1996, approximately $1.3 million was outstanding
under this line of credit.  The Partnership currently anticipates that this
amount will be repaid with proceeds from the sale of condominium units. 
Proceeds from closings of these condominium units during 1996 significantly
contributed to the decrease in Trade and other accounts receivable on the
accompanying Consolidated Balance Sheets at September 30, 1996 as compared
to December 31, 1995.

     During January 1996, the Partnership executed a note for a $7.5
million construction loan for the construction and development of a second
retail shopping center located in its Weston Community.  This note
currently bears interest at the lender's prime rate (8.25% at September 30,
1996) plus 1/2% per annum and matures in July 1997.  At September 30, 1996,
approximately $3.9 million was outstanding under this loan.  The proceeds
from such loan have been and are expected to continue to be the primary
source of the estimated funds required for the completion of the shopping
center.  The construction and development of this project is the primary
cause for the increase in Property and equipment on the accompanying
Consolidated Balance Sheets at September 30, 1996 as compared to December
31, 1995.  The construction of the shopping center is expected to be
completed by December 31, 1996.

     During September 1996, the Partnership and Starwood/Florida Funding,
L.L.C. ("Starwood") entered into a commitment for a term loan to be made to
the Partnership in the amount of $160 million, consisting of an $80 million
secured senior tranche and an $80 million secured mezzanine tranche.  Under
the terms of the commitment, the senior tranche will have an interest rate,
at the Partnership's option, of the London Inter-Bank Offering Rate (LIBOR)
plus 3.25% per annum or the Chase Manhattan Bank's prime rate (or, if
greater, the federal funds rate plus .625%) plus 1.25% per annum.  Interest
calculated based on LIBOR shall be payable at the end of each LIBOR period
but no less frequently than quarterly.  Interest calculated based on Chase
Manhattan Bank's prime rate (or the federal funds rate) shall be payable
monthly.  Scheduled annual principal payments of $10 million (subject to
reduction under certain circumstances) plus additional principal payments
depending upon the net cash flow of the Partnership will be required under
the senior tranche prior to maturity.  The mezzanine tranche will bear
interest at a rate of 15% per annum, payable quarterly in arrears.  No
principal payments will be required on the mezzanine tranche prior to
maturity.

     The term loan will be secured by recorded mortgages on the
Partnership's real property assets as well as assignments of other
Partnership assets, including equity memberships, joint venture interests
or joint venture proceeds (to the extent permitted under the applicable
joint venture agreements) and unrestricted cash balances.  Under the term
loan, the Partnership will be required to maintain a certain net worth as
well as to comply with a specified debt service coverage ratio.  The term
loan will also include certain restrictions on the Partnership's incurrence
of additional indebtedness and will be cross-defaulted with other
indebtedness of the Partnership outstanding from time to time.  The term
loan limits distributions to Holders of Interests (other than the
distribution contemplated from the proceeds of the term loan) to a maximum
of $26.39 per Interest in 1997 and 1998 and to a maximum of $47.50 per
Interest each year thereafter of the term loan.  The term loan will be
prepayable in whole or in part, subject to a prepayment premium of 1%,
except that prepayments (whether voluntary or be acceleration of maturity)
of amounts under the mezzanine tranche during the first three years of the
term loan generally will require the payment of a yield maintenance premium
on the amount prepaid for that three year period.  The maturity date for
the term loan will be June 30, 2002.

     The term loan will allow up to $50 million of financing that is senior
to the term loan including $20 million of project financing for Weston. 
The term loan will not restrict any transfers of general or limited
partnership interests in the Partnership.  However, Starwood will have the
right to consent or not consent to any transfer of the General Partner's
interest in the Partnership to an entity not controlled by, controlling or
under common control with the General Partner; a corporate restructuring,
merger or change of control of either the Partnership or the General
Partner; or a termination of the existing Management, Advisory and
Supervisory Agreement between the Partnership and Arvida Company, provided
that Starwood's consent shall not be unreasonably withheld.  If Starwood
withholds its consent to any of the foregoing, Starwood shall have the
right to accelerate the maturity date of the term loan.  If Starwood
consents to any of the foregoing events, it would be entitled to be paid an
amount equal to 1% of the then outstanding principal.  Any new manager or
management agreement will be subject to Starwood's prior reasonable
approval.

     The Partnership will be required to pay Starwood a loan fee of $1.6
million upon closing of the term loan.  The Partnership will also be
obligated to pay various other expenses in connection with the term loan,
including Starwood's costs incurred in connection with the term loan up to
a specified maximum amount.  Under the terms of the commitment, the
Partnership had agreed not to pursue or negotiate any other offers with a
third party for a financing similar in size or purpose as the term loan,
and, except under certain limited circumstances, in the event the
Partnership were to enter into an agreement with a third party on or before
December 1, 1996 (subject to extension under certain circumstances) for
similar financing, the Partnership would be obligated to pay Starwood a
break-up fee between $2.4 and $4.4 million plus certain expenses.  The
closing of the term loan is subject to the satisfaction (or waiver) of
various conditions, and if such conditions are met the closing would occur
during the fourth quarter of 1996.  However, there is no assurance that
such conditions will be satisfied or that the term loan will be closed. 
The foregoing description of the term loan is based on the provisions of
the commitment and are subject to possible change during the negotiation of
loan documents.

     The Partnership expects to use the proceeds from the term loan from
Starwood to paydown the remaining outstanding balance on the Partnership's
existing bank term loan and to make a non-taxable distribution, including a
non-taxable distribution of $350 per Interest to the Holders.

     Raleigh Capital Associates, L.P., an entity which purportedly owns
approximately 19.7% of the total outstanding Interests, and certain
entities (collectively "Raleigh") have expressed their opposition to the
term loan with Starwood and have filed a lawsuit in a Delaware court
seeking, among other things, an injunction preventing the completion of the
term loan with Starwood.  To date, the Delaware court has ruled that
Raleigh does not have voting rights associated with the Interests it
acquired and therefore has no standing to bring such a lawsuit.  Raleigh is
appealing this ruling.  In addition, a similar lawsuit has been filed in an
Illinois Court.  Reference is made to Part II, Item 1. Legal Proceedings
for a discussion of such lawsuits.  In addition, Raleigh has filed
preliminary proxy materials with the Securities and Exchange Commission in
connection with a possible solicitation for the removal and replacement of
Arvida/JMB Managers, Inc. ("Managers") as the General Partner of the
Partnership.  Raleigh has stated that, if successful in removing and
replacing Managers as the General Partner, Raleigh's replacement general
partner would reject the term loan with Starwood.  However, as stated
above, a Delaware court has ruled that Raleigh does not have voting rights
associated with the Interests it has acquired, and as of the date of this
report Raleigh has not commenced a solicitation of consents.


INVESTMENTS IN AND ADVANCES TO JOINT VENTURES

     During March 1996, the Partnership closed on the sale of its 20% joint
venture interest in Coco de Caza, including the related promissory note for
advances previously made to the joint venture, to unaffiliated third
parties for a sales price of $12 million.  This transaction is reflected in
Land and property revenues for the nine months ended September 30, 1996 on
the accompanying Consolidated Statements of Operations and is the primary
cause for the decrease in Investments in and advances to joint ventures on
the accompanying Consolidated Balance Sheets at September 30, 1996 as
compared to December 31, 1995.


TRANSACTIONS WITH AFFILIATES

     The Partnership, subject to certain limitations, may engage affiliates
of the General Partner for property management, insurance and certain other
administrative services to be performed in connection with the
administration of the Partnership and its assets.  The total of such costs
for the nine months ended September 30, 1996 was approximately $296,300,
all of which was paid as of September 30, 1996.  The total of such costs
for the nine months ended September 30, 1995 was approximately $399,400. 
In addition, the General Partner and its affiliates are entitled to
reimbursements for salaries and salary-related costs relating to the
administration of the Partnership and the operation of the Partnership's
properties.  Such costs were approximately $99,000 and $73,300 for the nine
months ended September 30, 1996 and 1995, respectively, all of which were
paid as of September 30, 1996.

     The Partnership receives reimbursements from or reimburses other
affiliates of the General Partner engaged in real estate activities for
certain general and administrative costs including, and without limitation,
salary and salary-related costs relating to work performed by employees of
the Partnership and certain out-of-pocket expenditures incurred on behalf
of such affiliates.  For the nine month period ended September 30, 1996,
the amount of such costs incurred by the Partnership on behalf of these
affiliates totalled approximately $189,100.  At September 30, 1996,
approximately $105,600 was owed to the Partnership, of which approximately
$104,700 was received as of November 4, 1996.  For the nine month period
ended September 30, 1995, the Partnership was entitled to reimbursements of
approximately $426,200.

     The Partnership and Arvida/JMB Partners, L.P.-II (a publicly-held
limited partnership affiliated with the General Partner) each employ
project related and administrative personnel who perform services on behalf
of both partnerships.  In addition, certain out-of-pocket expenditures
related to such services and other general and administrative costs are
incurred and charged to each partnership as appropriate.  The Partnership
receives reimbursements from or reimburses Arvida/JMB Partners, L.P.-II for
such costs (including salary and salary-related costs).  For the nine month
periods ended September 30, 1996 and 1995, the Partnership was entitled to
receive approximately $1,242,300 and $2,092,900, respectively, from
Arvida/JMB Partners, L.P.-II.  At September 30, 1996, approximately $27,400
was owed to the Partnership, all of which was received as of November 4,
1996.  In addition, for the nine month periods ended September 30, 1996 and
1995, the Partnership was obligated to reimburse Arvida/JMB Partners, L.P.-
II approximately $113,700 and $195,900, respectively, all of which was paid
as of September 30, 1996.

     Arvida Company ("Arvida"), pursuant to an agreement with the
Partnership, provides development, construction, management and other
personnel and services to the Partnership for all of its projects and
operations.  Pursuant to such agreement, the Partnership reimburses Arvida
for all of its salary and salary-related costs incurred in connection with
work performed on behalf of the Partnership, subject to certain
limitations.  The total of such costs for the nine month periods ended
September 30, 1996 and 1995 were approximately $5,020,500 and $4,714,200,
respectively, all of which was paid as of September 30, 1996.  In addition,
Arvida owed the Partnership approximately $40,400 at September 30, 1996
resulting from an excess reimbursement, all of which was received as of
November 4, 1996.

     The Partnership pays for certain general and administrative costs on
behalf of its equity clubs, homeowners associations and maintenance
associations.  The Partnership receives reimbursements from these entities
for such costs.  For the nine month periods ended September 30, 1996 and
1995, the Partnership was entitled to receive approximately $557,900 and
$341,600, respectively, from these entities.  At September 30, 1996,
approximately $179,300 was owed to the  Partnership, of which approximately
$25,500 was received as of November 4, 1996.  In addition, the Partnership
owes its equity clubs for certain costs incurred by the clubs which are
obligations of the Partnership.  For the nine month period ended September
30, 1996, the Partnership was obligated to reimburse its equity clubs
approximately $13,700.  At September 30, 1996, approximately $16,000 was
unpaid (including amounts owed from previous periods), of which
approximately $1,700 was paid as of November 4, 1996.

     The Partnership, pursuant to an agreement, provides management and
other personnel and services to one of its equity clubs.  Pursuant to this
agreement, the Partnership is entitled to receive a management fee for the
services provided to the club.  For the nine months ended September 30,
1996 and 1995, the Partnership was entitled to receive approximately
$295,000 and $354,000.  At September 30, 1996, approximately $244,600 was
unpaid, none of which was received as of November 4, 1996.

     The Partnership also funds operating deficits of its equity clubs, as
required or deemed necessary.  Such amounts are expensed by the
Partnership, but may be reimbursed by these clubs from future cash flow. 
At September 30, 1996, the Partnership was owed approximately $126,800 for
such funding, none of which was paid as of November 4, 1996.

     The Partnership periodically incurs salary and salary-related costs on
behalf of an affiliate of the General Partner of the Partnership.  The
Partnership was entitled to receive approximately $228,000 and $394,000 for
such costs for the nine months ended September 30, 1996 and 1995,
respectively, of which approximately $259,400 (which includes amounts owed
from previous periods) was owed to the Partnership at September 30, 1996
and November 4, 1996.

     In accordance with the Partnership Agreement, the General Partner and
Associate Limited Partners have deferred a portion of their distributions
of net cash flow from the Partnership totalling approximately $1,587,700. 
This amount does not bear interest and is expected to be paid in future
periods subject to certain restrictions contained in the Partnership's
credit facility agreement.

     All amounts receivable from or payable to the General Partner or its
affiliates do not bear interest and are expected to be paid in future
periods.

COMMITMENTS AND CONTINGENCIES

     As security for performance of certain development obligations, the
Partnership is contingently liable under standby letters of credit and
performance bonds for approximately $5,248,500 and $6,181,500,
respectively, at September 30, 1996.  In addition, certain joint ventures
in which the Partnership holds an interest are also contingently liable
under bonds for approximately $1,020,000 at September 30, 1996.

     On June 24, 1996, a lawsuit entitled Irvin Weiss v. Arvida/JMB
Managers, Inc., Neil G. Bluhm, Lehman Brothers Inc. and Arvida/JMB
Partners, L.P. ("Weiss action") was filed in the County Department,
Chancery Division of the Circuit Court of Cook County, Illinois.  This
lawsuit is a purported class action lawsuit on behalf of Irvin Weiss and
all other Holders of Interests to bar (i) the General Partner and Mr. Bluhm
from taking any action to chill tender offers from non-affiliates, (ii) the
officers, directors and shareholders of the defendants from participating
in any special committee on tender offers, (iii) Lehman Brothers Inc. from
advising any such special committee, and (iv) defendants and their
affiliates from making tender offers.  On September 25, 1996, the claims of
Irvin Weiss were voluntarily dismissed.

     A complaint was filed in the County Department, Chancery Division of
the Circuit court of Cook County, Illinois on July 1, 1996, and most
recently amended on October 24, 1996, in the matter of Jack M. Carlstrom
and Lynne M. Carlstrom v. Arvida/JMB Managers, Inc., Neil G. Bluhm, Ira J.
Schulman, Burton E. Glazov, Stuart C. Nathan, A. Lee Sacks, John G.
Schreiber, Judd D. Malkin, Lehman Brothers Inc., Starwood Capital Group I,
L.P., Starwood/Florida Funding, L.L.C., Starwood Opportunity Fund IV, L.P.,
BSS Capital II, L.L.C., Barry Sternlicht, Walton Street Capital Acquisition
Co. III and Whitehall Street Real Estate Limited Partnership VII, and
Arvida/JMB Partners, L.P., nominal defendant ("Carlstrom action").  This
complaint, as amended, is brought derivatively on behalf of the Partnership
and individually on behalf of Jack M. Carlstrom and Lynne M. Carlstrom and
a purported class of all other Holders of Interests (excluding the
defendants, members of their immediate families, affiliates, subsidiaries,
agents, partners, members of their current or former management or that of
their affiliates, and any participant in the alleged conspiracy).  The
Carlstrom action has been filed in connection with the Partnership's
proposed $160 million term loan from Starwood/Florida Funding, L.L.C.
("Starwood financing") and seeks, among other things, to bar defendants
from taking any action to chill tender offers or offers for debt financing
from non-affiliates; to cause defendants to put the issue of the Starwood
financing to a vote of unitholders; to bar defendants from completing the
Starwood financing; to disband the Special Committee and allow the Holders
of Interests to vote on an "independent slate" of directors to compose a
new special committee; to require the director defendants to negotiate with
Raleigh with respect to the financing of the Partnership; and to cause the
Partnership and director defendants to auction the Partnership.  The
complaint, as amended, alleges, among other things, that the General
Partner breached its fiduciary duties owed plaintiffs and members of the
purported class by failing to negotiate for the financing with other
entities and entering into the Starwood financing in order to entrench
itself and maintain its control over the Partnership.  The complaint, as
amended, also alleges that the terms of the Starwood financing are
burdensome to the Partnership and which allegedly will cause a waste of the
Partnership's assets.  The Carlstrom action is brought as a four-count
complaint for breach of fiduciary duty on behalf of the class, breach of
fiduciary duty on behalf of the Partnership, conspiracy and collusion to
breach fiduciary duties on behalf of the class and the Partnership, and for
an injunction on behalf of the class and the Partnership.  In addition to
the relief described above, plaintiffs on behalf of themselves and members
of the purported class seek damages in a sum to be determined at trial,
attorneys' fees and costs, and such other relief as the Court may deem just
and proper.  The General Partner for itself and action for the Partnership
believes this action is groundless and has no merit, and intends to
vigorously defend this lawsuit.  The General Partner on behalf of itself
and various of the director defendants has filed a motion to dismiss which
is scheduled to be heard on November 19, 1996.  If the motion to dismiss is
not granted, the Court is scheduled to hold a hearing on December 12, 1996
on plaintiff's motion for preliminary injunction to stop the Starwood
financing.  The Court's order contemplates that if the motion to dismiss is
not granted, the Starwood financing will not close prior to December 14,
1996.

     On or about September 27, 1996, a lawsuit entitled Vanderbilt Income
and Growth Associates, L.L.C. and Raleigh Capital Associates L.P.,
individually and derivatively on behalf of Arvida/JMB Partners, L.P. V.
Arvida/JMB Managers, Inc., Judd D. Malkin, Neil G. Bluhm, Burton E. Glazov,
Stuart C. Nathan, A. Lee Sacks, John G. Schreiber, BSS Capital II, L.L.C.,
Starwood Capital Group I, L.P., Starwood/Florida Funding, L.L.C., Starwood
Opportunity Fund, IV, L.P. and Barry Sternlicht, Defendants, and Arvida/JMB
Partners, L.P., nominal defendant, was filed in the Court of Chancery of
the State of Delaware in and for New Castle County, Civil Action No. 15238
("Raleigh action").  The Raleigh action was filed as a verified complaint
for declaratory and injunctive relief.  Plaintiffs claimed that the
defendants in entering into the financing commitment letter for the
Starwood term financing violated, or aided and abetted, or participated in
the violation of, fiduciary duties owned to the Partnership and the Holders
of Interests, and put their personal interests ahead of the interests of
the Partnership and the Holders of Interests.  In the first claim for
relief, plaintiffs sought a declaratory judgment that the terms of the
financing be declared null, void and unenforceable.  In the second claim
for relief, plaintiffs asserted a claim derivatively on behalf of the
Partnership alleging, among other things, that the financing commitment
letter was not the product of a valid exercise of business judgment.  In
addition to relief described above, plaintiffs sought to preliminarily and
permanently enjoin any actions in furtherance of the financing commitment
letter, an award of compensatory damages, interest, costs and
disbursements, including reasonable attorneys' and experts' fees and such
other relief as the Court might deem just and proper.  The General Partner
and the Partnership filed a motion to dismiss the Raleigh action which was
granted on November 7, 1996.  In granting the motion, the Court held that
Raleigh was not a Limited Partner and did not have standing to file the
derivative claims.  The court further determined that Raleigh did not have
the right to vote.  Plaintiffs sought to reargue the issues, but the Court
denied plaintiffs' motion for reargument.  In order to permit the
plaintiffs an opportunity to appeal to the Delaware Supreme Court, the
Delaware court enjoined the closing of the Starwood term financing until
the Delaware Supreme Court has an opportunity to rule on Raleigh's appeal. 
The schedule on appeal contemplates that plaintiffs will file their opening
brief on or before November 15, 1996, defendants will file their answering
brief on or before November 26, 1996, and plaintiffs will file their reply
brief on or before December 3, 1996.  Oral argument is scheduled to be
heard by the Supreme Court on December 5, 1996.  The Partnership expects
that the Delaware Supreme Court will rule expeditiously on the matter,
although there can be no assurance thereof.

     The Partnership was named a defendant in a number of homeowner
lawsuits, certain of which purported to be class actions, that allegedly in
part arose out of or related to Hurricane Andrew, which on August 24, 1992
resulted in damage to a former community development known as Country Walk.

The homeowner lawsuits alleged, among other things, that the damage
suffered by the plaintiffs' homes and/or condominiums within Country Walk
was beyond what could have been reasonably expected from the hurricane
and/or was a result of the defendants' alleged defective design,
construction, inspection and/or other improper conduct in connection with
the development, construction and sales of such homes and condominiums,
including alleged building code violations.  The various plaintiffs sought
varying and, in some cases, unspecified amounts of compensatory damages and
other relief.  In certain of the lawsuits injunctive relief and/or punitive
damages were sought.

     Several of these lawsuits allege that the Partnership was liable,
among other reasons, as a result of its own alleged acts of misconduct or
as a result of the Partnership's assumption of Arvida Corporation's
liabilities in connection with the Partnership's purchase of Arvida
Corporation's assets from Disney in 1987, which included certain assets
related to the Country Walk development.  Pursuant to the agreement to
purchase such assets, the Partnership obtained indemnification by Disney
for certain liabilities relating to facts or circumstances arising or
occurring prior to the closing of the Partnership's purchase of the assets.

Over 80% of the Arvida-built homes in Country Walk were built prior to the
Partnership's ownership of the Community.  Where appropriate, the
Partnership has tendered or will tender each of the above-described
lawsuits to Disney for defense and indemnification in whole or in part
pursuant to the Partnership's indemnification rights.  Where appropriate,
the Partnership has also tendered these lawsuits to its various insurance
carriers for defense and coverage.  The Partnership is unable to determine
at this time to what extent damages in these lawsuits, if any, against the
Partnership, as well as the Partnership's cost of investigating and
defending the lawsuits, will ultimately be recoverable by the Partnership
either pursuant to its rights of indemnification by Disney or under
contracts of insurance.

     One of the Partnership's insurance carriers has been funding
settlements of various litigation related to Hurricane Andrew.  In some,
but not all, instances, the insurance carrier has provided the Partnership
with written reservation of rights letters.  The aggregate amount of the
settlements funded to date by this carrier is approximately $8.0 million. 
The insurance carrier that funded these settlements pursuant to certain
reservations of rights has stated its position that it has done so pursuant
to various non-waiver agreements.  The carrier's position was that these
non-waiver agreements permitted the carrier to fund settlements without
barring the carrier from raising insurance coverage issues or waiving such
coverage issues.  On May 23, 1995, the insurance carrier rescinded the
various non-waiver agreements currently in effect regarding the remainder
of the Hurricane Andrew litigation, allegedly without waiving any future
coverage defenses, conditions, limitations, or rights.  For this and other
reasons, the extent to which the insurance carrier may recover any of these
proceeds from the Partnership is uncertain.  Therefore, the accompanying
consolidated financial statements do not reflect any accruals related to
this matter.

     Currently, the Partnership is involved in two subrogation lawsuits. 
On April 19, 1993, a subrogation claim entitled Village Homes at Country
Walk Master Maintenance Association, Inc. v. Arvida Corporation et al., was
filed in the 11th Judicial Circuit for Dade County.  Plaintiffs filed this
suit for the use and benefit of American Reliance Insurance Company
("American Reliance").  In this suit, as amended, plaintiffs seek to
recover damages and pre- and post-judgment interest in connection with
$10,873,000 American Reliance has allegedly paid, plus amounts it may have
to pay in the future, to the condominium association at Country Walk in the
wake of Hurricane Andrew.  Disney is also a defendant in this suit.  The
Partnership believes that the amount of this claim that allegedly relates
to units it built and sold is approximately $3,600,000.  Plaintiffs also
seek a declaratory judgement seeking to hold the Partnership and other
defendants responsible for amounts American Reliance must pay in the future
to its insured as additional damages beyond the $10,873,000 previously
paid.  The Partnership has filed motions directed to the complaint, as
amended, and the litigation is in the discovery stage.  The Partnership
intends to vigorously defend itself.  On or about May 10, 1996, a
subrogation claim entitled Juarez et al. v. Arvida Corporation et al. was
filed in the Circuit Court of the Eleventh Judicial Circuit in and for Dade
County.  Plaintiffs filed this suit for the use and benefit of American
Reliance.  In this suit, plaintiffs seek to recover damages, pre-and post-
judgment interest, costs and any other relief the Court may deem just and
proper in connection with $3,200,000 American Reliance allegedly paid on
specified claims at Country Walk in the wake of Hurricane Andrew.  Disney
is also a defendant in this suit.  The Partnership is advised that the
amount of this claim that allegedly relates to units it sold is
approximately $350,000.  The Partnership intends to defend itself
vigorously in this matter.  The Partnership was also involved in a 
subrogation action brought by the Insurance Company of North America
("INA") arising out of a claim that INA allegedly paid on a single home in
Country Walk.  The Partnership has settled this claim for approximately
$5,600 with the settlement being funded by the Partnership's insurance
carrier.  The Metropolitan Property and Casualty Company ("Metropolitan")
has advised the Partnership of its intent to file a subrogation action
allegedly in connection with an unspecified number of Arvida-built homes.
Currently, Metropolitan has advised the Partnership of three claims,
totalling approximately $505,000.  The Partnership could be named in other
subrogation actions, and in such event, the Partnership intends to
vigorously defend itself in such actions.

     In addition, the Partnership has been advised by Merrill Lynch that
various investors have sought to compel Merrill Lynch to arbitrate claims
brought by certain investors of the Partnership representing approximately
5% of the total of approximately 404,000 Interests outstanding.  Merrill
Lynch has asked the Partnership and its General Partner to confirm an
obligation of the Partnership and its General Partner to indemnify Merrill
Lynch in these claims against all loss, liability, claim, damage and
expense, including without limitation attorneys' fees and expenses, under
the terms of a certain Agency Agreement dated September 15, 1987 ("Agency
Agreement") with the Partnership relating to the sale of Interests through
Merrill Lynch on behalf of the Partnership.  These claimants have sought
and are seeking to arbitrate claims involving unspecified damages against
Merrill Lynch based on Merrill Lynch's alleged violation of applicable
state and/or federal securities laws and alleged violations of the rules of
the National Association of Securities Dealers, Inc., together with pendent
state law claims.  The Partnership believes that Merrill Lynch has resolved
some of these claims through litigation and otherwise, and that Merrill
Lynch is defending other claims.  The Agency Agreement generally provides
that the Partnership and its General Partner shall indemnify Merrill Lynch
against losses occasioned by any actual or alleged misstatements or
omissions of material facts in the Partnership's offering materials used in
connection with the sale of Interests and suffered by Merrill Lynch in
performing its duties under the Agency Agreement, under certain specified
conditions.  The Agency Agreement also generally provides, under certain
conditions, that Merrill Lynch shall indemnify the Partnership and its
General Partner for losses suffered by the Partnership and occasioned by
certain specified conduct by Merrill Lynch in the course of Merrill Lynch's
solicitation of subscriptions for, and sale of, Interests.  The Partnership
is unable to determine the ultimate investment of investors who have filed
arbitration claims as to which Merrill Lynch might seek indemnification in
the future.  At this time, and based upon the information presently
available about the arbitration statements of claims filed by some of these
investors, the Partnership and its General Partner believe that they have
meritorious defenses to demands for indemnification made by Merrill Lynch
and intend to vigorously pursue such defenses.  Although there can be no
assurance regarding the outcome of the claims for indemnification, at this
time, based on information presently available about such arbitration
statements of claims, the Partnership and its General Partner do not
believe that the demands for indemnification by Merrill Lynch will have a
material adverse effect on the financial condition of the Partnership.

     On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, and amended on or about February 20,
1996, entitled Council of Villages, Inc. et al v. Arvida/JMB Partners,
Arvida/JMB Managers, Inc., Arvida/JMB Partners, Ltd., Broken Sound Club,
Inc., and Country Club Maintenance Association, Inc.  The multi-count
complaint, as amended, is brought as a class action, and individually, on
behalf of various residents of the Broken Sound Community, and alleges that
defendants engaged in various acts of misconduct in, among other things,
the establishment, operation, management and marketing of the Broken Sound
golf course and recreational facilities, as well as the alleged improper
failure to turn over such facilities to the Broken Sound homeowners on a
timely basis.  Plaintiffs seek, through various theories, including but not
limited to breach of ordinance, breach of fiduciary duty, fraud, unjust
enrichment and civil theft, damages in excess of $45 million, the
appointment of a receiver for the Broken Sound Club, other unspecified
compensatory damages, the right to seek punitive damages, treble damages,
prejudgment interest, attorneys' fees and costs.  The Partnership believes
that the lawsuit is without merit and intends to vigorously defend itself
in this matter.

     On or about July 30, 1996, Savoy v. Arvida/JMB Partners, Arvida/JMB
Managers, Inc., Arvida/JMB Partners, Ltd., and Broken Sound Club, Inc. was
filed against the Partnership and others in the Circuit Court of the 15th
Judicial Circuit, in and for Palm Beach County, Florida.  The lawsuit is
filed as a three-count complaint for dissolution of the Broken Sound Club,
Inc. ("Club"), and seeks, among other things, the appointment of a
custodian or receiver for the Club, a determination that certain acts be
deemed wrongful, the return to the Club of in excess of $2.5 million in
alleged "operating profits", an injunction against the charging of certain
dues, an injunction requiring the Club to produce certain financial
statements, and such other relief as the Court deems just, fair and proper.

The Partnership believes the lawsuit is without merit and intends to
vigorously defend itself.

     The Partnership owns a 50% joint venture interest in 31 commercial/
industrial acres in Pompano Beach, Florida, which is encumbered by a
mortgage loan in the principal amount of approximately $4 million at
September 30, 1996.  During April 1992, as a result of the Partnership's
previous determination that the development of the land was no longer
economically profitable, the Partnership and its joint venture partner each
tendered payment in the amount of approximately $3.1 million to the lender
for their respective shares of the guarantee payment required under the
loan agreement and certain other holding costs, the majority of which
reduced the outstanding mortgage loan to its current balance.  The venture
also intended at that time to convey title to the property to the lender;
however, such conveyance is pending until resolution of certain general
development obligations of the venture as well as certain environmental
issues.  The Partnership had been negotiating with the lender regarding the
scope of the development work required to be done.   Negotiations with the
lender were unsuccessful.  On January 6, 1995, the lender filed a lawsuit
entitled Bankers Trust Company v. Arvida/JMB Partners, L.P., Pompano
Realty, Ltd., Arvida Pompano Associates Joint Venture, Arvida/JMB Managers,
Inc. and Pompano Realty, Inc., in the Circuit Court of the Seventeenth
Judicial Circuit, in and for Broward County, Florida.  In the lawsuit, as
amended, the lender asserts, among other things, that the mortgage loan is
with recourse to the joint venture partners as a result of the partners'
failure to perform in accordance with the terms of the loan agreement.  The
lender is demanding payment of the outstanding loan balance plus interest
thereon.  The Partnership believes this claim is without merit and is
vigorously defending the lawsuit.

     The Partnership is also a defendant in several actions brought against
it arising in the normal course of business.  It is the belief of the
General Partner, based on knowledge of facts and advice of counsel, that
the claims made against the Partnership in such actions will not result in
any material adverse effect on the Partnership's consolidated financial
position or results of operations.

     The Partnership may be responsible for funding certain other ancillary
activities for related entities in the ordinary course of business which
the Partnership does not currently believe will have any material adverse
effect on its consolidated financial position or results of operations.


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     The Partnership adopted the Financial Accounting Standard's Board's
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of", effective January 1, 1995.  As a
result, an impairment loss of $2.2 million was recorded to the carrying
value of its Cullasaja Community located near Highlands, North Carolina. 
As a result of this adjustment, Cullasaja's carrying value is recorded at
approximately $7.4 million and $7.1 million at September 30, 1996 and
December 31, 1995, respectively.


ADJUSTMENTS

     In the opinion of the General Partner, all adjustments (consisting
solely of normal recurring adjustments) necessary for a fair presentation
have been made to the accompanying consolidated financial statements as of
September 30, 1996 and December 31, 1995 and for the three and nine months
ended September 30, 1996 and 1995.



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 consolidated
financial statements ("Notes") contained in this report for additional
information concerning certain of the Partnership's investments.

     At September 30, 1996 and December 31, 1995, the Partnership had cash
and cash equivalents of approximately $12,945,000 and $20,171,000,
respectively.  The decrease in cash and cash equivalents at September 30,
1996 as compared to December 31, 1995 is due primarily to required debt
service payments as well as distributions to partners and Holders of
Interests of approximately $11 million made in March 1996.  Bank
overdrafts, which represent checks in transit, of approximately $151,000
and $3,973,000 at September 30, 1996 and December 31, 1995, respectively,
were repaid from cash on hand during October 1996 and January 1996,
respectively.

     Reference is made to the Notes and Mortgages Payable section of the
Notes to the Consolidated Financial Statements for a discussion of the
changes in Trade and other accounts receivable and Notes and mortgages
payable as of September 30, 1996 as compared to December 31, 1995.

     During June and July of 1996, the Holders of Interests received
several unsolicited offers to purchase their Interests in the Partnership. 
The General Partner of the Partnership established a special committee (the
"Special Committee") to review such offers and make a recommendation to the
Holders of Interests with respect to the offers.  In addition, the
Partnership engaged Lehman Brothers Inc. ("Lehman") as a financial advisor
to assist the Special Committee in evaluating and responding to the offers.

Lehman was asked to render its estimate of the present discounted value
("Estimated Liquidation Value") of an Interest based on the assumption that
the Partnership commences an orderly liquidation in October 1997 and
completes that liquidation by October 2002.  Lehman arrived at an Estimated
Liquidation Value as of July 2, 1996 ranging from $565 to $610 per
Interest.  This Estimated Liquidation Value relied upon the Partnership's
estimate of the gross cash distributions that a Holder of Interests would
receive through the assumed liquidation period, discounted to reflect the
present value of such distributions.  Based upon the estimate of the total
gross distributions, the General Partner calculated that each Holder would
receive total distributions from October 1996 through October 2002 in
excess of $1,000 per Interest.  A supplemental discussion of certain
assumptions and other factors which should be considered when analyzing the
projected budgets which are the basis of such estimate of gross
distributions can be found in the Partnership's Schedule 14D-9 dated July
3, 1996, as amended, which was filed with the Securities and Exchange
Commission.  The Partnership began incurring significant expenditures in
connection with various tender offers for Interests during the third
quarter of 1996 and may incur significant additional costs in the future in
connection therewith.

     Following receipt of the Estimated Liquidation Value, the Special
Committee determined that, with respect to the Holders of Interests who
have the expectation of retaining their Interests through an anticipated
orderly liquidation of the Partnership's assets by October 2002 and who
have no current or anticipated need for liquidity, these offers were
inadequate and not in the best interests of such Holders of Interests.  The
Special Committee recommended that such Holders reject these offers and not
tender their Interests pursuant to these offers.  With respect to all other
Holders of Interests, the Special Committee has expressed no opinion and
remained neutral with respect to these offers.

     Lehman has updated its Estimated Liquidation Value as of October 1,
1996 (the "Revised Estimated Liquidation Value").  The Revised Estimated
Liquidation Value assumes that the Partnership obtains $160 million of
financing with terms and conditions which are generally in accordance with
the provisions of the commitment for such financing with Starwood/Florida
Funding, L.L.C. ("Starwood"), which is discussed in detail below.  Lehman's
Revised Estimated Liquidation Value also assumes that the proceeds of the
$160 million financing will be used, in part, to make a distribution of
$350 per Interest to the Holders of Interests.  In arriving at the Revised
Estimated Liquidation Value, Lehman relied upon the Partnership's estimate
of the gross cash distributions that the Holders would receive through the
assumed liquidation period.  These estimated gross distributions were then
discounted to reflect the present value of such distributions as of October
1, 1996, which ranges from $610 to $630 per Interest, depending on the
different discount rates used.

     One offer for Interests in the Partnership was made by Raleigh Capital
Associates L.P. ("Raleigh") commencing in June 1996.  Raleigh's offer was
for up to 185,000 Interests, which represents approximately 46% of the
outstanding Interests.  Raleigh's offer had a final price of $461 per
Interest and expired on August 1, 1996.  Raleigh has reported that it
acquired a total of 79,696 Interests pursuant to such offer, which
represents approximately 19.7% of the total outstanding Interests.

     Other offers were made by Walton Street Capital Acquisition Co. III,
L.L.C. ("Walton") and Boreas Partners, L.P. ("Boreas"), each of which was
also for up to approximately 46% of the outstanding Interests.  However,
each of the Walton and Boreas offers were withdrawn and no Interests were
purchased pursuant to either such offer.

     In September 1996, Smithtown Bay, LLC ("Smithtown") made an
unsolicited offer for up to 4.9% of the total outstanding Interests at a
purchase price of $480 per Interest.  Smithtown's offer expired on
September 30, 1996.  Smithtown acquired less than 0.4% of the total
outstanding Interests pursuant to such offer.  

     In addition, during October 1996, Raleigh commenced another
unsolicited offer to acquire up to 100,000 Interests, which represents
approximately 24.8% of the outstanding Interests, in the Partnership at a
purchase price of $500 per Interest.  Based on its analysis and its
consultation with its advisors, the Special Committee determined that with
respect to Holders of Interests who have the expectation of retaining their
Interests through an anticipated orderly liquidation of the Partnership's
assets by October 2002 and who have no current or anticipated need for
liquidity, the Raleigh offer is inadequate and not in the best interest of
such Holders.  The Special Committee has recommended that such Holders
reject the Raleigh offer and not tender their Interests pursuant to such
offer.  With respect to all other Holders of Interests, the Special
Committee has expressed no opinion and remained neutral with respect to the
Raleigh offer.

     During September 1996, the Partnership and Starwood entered into a
commitment for a term loan to be made to the Partnership in the amount of
$160 million, consisting of an $80 million secured senior tranche and an
$80 million secured mezzanine tranche.  Under the terms of the commitment,
the senior tranche will have an interest rate, at the Partnership's option,
of the London Inter-Bank Offering Rate (LIBOR) plus 3.25% per annum or the
Chase Manhattan Bank's prime rate (or, if greater, the federal funds rate
plus .625%) plus 1.25% per annum.  Interest calculated based on LIBOR shall
be payable at the end of each LIBOR period but no less frequently than
quarterly.  Interest calculated based on Chase Manhattan Bank's prime rate
(or the federal funds rate) shall be payable monthly.  Scheduled annual
principal payments of $10 million (subject to reduction under certain
circumstances) plus additional principal payments depending upon the net
cash flow of the Partnership will be required under the senior tranche
prior to maturity.  The mezzanine tranche will bear interest at a rate of
15% per annum, payable quarterly in arrears.  No principal payments will be
required on the mezzanine tranche prior to maturity.

     The term loan will be secured by recorded mortgages on the
Partnership's real property assets as well as assignments of other
Partnership assets, including equity memberships, joint venture interests
or joint venture proceeds (to the extent permitted under the applicable
joint venture agreements) and unrestricted cash balances.  Under the term
loan, the Partnership will be required to maintain a certain net worth as
well as to comply with a specified debt service coverage ratio.  The term
loan will also include certain restrictions on the Partnership's incurrence
of additional indebtedness and will be cross-defaulted with other
indebtedness of the Partnership outstanding from time to time.  The term
loan limits distributions to Holders of Interests (other than the
distribution contemplated from the proceeds of the term loan) to a maximum
of $26.39 per Interest in 1997 and 1998 and to a maximum of $47.50 per
Interest each year thereafter of the term loan.  The term loan will be
prepayable in whole or in part, subject to a prepayment premium of 1%,
except that prepayments (whether voluntary or by acceleration of maturity)
of amounts under the mezzanine tranche during the first three years of the
term loan generally will require the payment of a yield maintenance premium
on the amount prepaid for that three year period.  The maturity date for
the term loan will be June 30, 2002.

     The term loan will allow up to $50 million of financing that is senior
to the term loan including $20 million of project financing for Weston. 
The term loan will not restrict any transfers of general or limited
partnership interests in the Partnership.  However, Starwood will have the
right to consent or not consent to any transfer of the General Partner's
Interest in the Partnership to an entity not controlled by, controlling or
under common control with the General Partner; a corporate restructuring,
merger or change of control of either the Partnership or the General
Partner; or a termination of the existing Management, Advisory and
Supervisory Agreement between the Partnership and Arvida Company, provided
that Starwood's consent shall not be unreasonably withheld.  If Starwood
withholds its consent to any of the foregoing, Starwood shall have the
right to accelerate the maturity date of the term loan.  If Starwood
consents to any of the foregoing events, it would be entitled to be paid an
amount equal to 1% of the then outstanding principal.  Any new manager or
management agreement will be subject to Starwood's prior reasonable
approval.

     The Partnership will be required to pay Starwood a loan fee of $1.6
million upon closing of the term loan.  The Partnership will also be
obligated to pay various other expenses in connection with the term loan,
including Starwood's costs incurred in connection with the term loan up to
a specified maximum amount.  Under the terms of the commitment, the
Partnership had agreed not to pursue or negotiate any other offers with a
third party for a financing similar in size or purpose as the term loan,
and, except under certain limited circumstances, in the event the
Partnership were to enter into an agreement with a third party on or before
December 1, 1996 (subject to extension under certain circumstances) for
similar financing, the Partnership would be obligated to pay Starwood a
break-up fee between $2.4 and $4.4 million plus certain expenses.  The
closing of the term loan is subject to the satisfaction (or waiver) of
various conditions, and if such conditions are met the closing would occur
during the fourth quarter of 1996.  However, there is no assurance
undersigned thereunto duly authorized.


                 ARVIDA/JMB PARTNERS, L.P.

                 BY:   Arvida/JMB Managers, Inc.
                       (The General Partner)




                       By:   GAILEN J. HULL
                             Gailen J. Hull, Vice President
                       Date: November 8, 1996


     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 8, 1996