SECURITIES AND EXCHANGE COMMISSION

                        Washington, D.C.  20549



                              FORM 10Q/A

                            AMENDMENT NO. 1


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



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



                                     IRS Employer Identification      
Commission File No. 0-10494                 No. 36-3102608            



     The undersigned registrant hereby amends the following section of its
Report for the quarter ended September 30, 1997 on Form 10-Q as set forth
in the pages attached hereto:


      Item 1.  Financial Statements.

                          Pages 3 through 13


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


                      CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI

                      BY:   JMB Realty Corporation
                            Corporate General Partner



                            By:  GAILEN J. HULL
                                 Gailen J. Hull, Senior Vice President
                                 and Principal Accounting Officer



Dated:  November 24, 1997



<PAGE>


<TABLE>
PART I.  FINANCIAL INFORMATION
     ITEM 1.  FINANCIAL STATEMENTS
                               CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
                                          (A LIMITED PARTNERSHIP)
                                         AND CONSOLIDATED VENTURES

                                        CONSOLIDATED BALANCE SHEETS
                                 SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
                                                (UNAUDITED)

                                                  ASSETS
                                                  ------
<CAPTION>
                                                                           SEPTEMBER 30,   DECEMBER 31,
                                                                              1997            1996     
                                                                          -------------    ----------- 
<S>                                                                      <C>              <C>          
Current assets:
  Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . .      $  3,712,482      3,697,163 
  Rents and other receivables (net of allowance for 
    doubtful accounts of $1,712,383 and $1,495,915 at 
    September 30, 1997 and December 31, 1996, respectively) . . . . .           465,915        628,039 
  Escrow deposits and restricted funds. . . . . . . . . . . . . . . .         4,228,341      3,678,237 
  Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . .           769,570      1,167,702 
                                                                           ------------    ----------- 
          Total current assets. . . . . . . . . . . . . . . . . . . .         9,176,308      9,171,141 
                                                                           ------------    ----------- 
Mortgage notes receivable (net of reserve for 
 uncollectibility of $327,774). . . . . . . . . . . . . . . . . . . .         1,867,695      1,867,695 
                                                                           ------------    ----------- 
Investment property:
    Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             --         4,845,861 
    Buildings and improvements. . . . . . . . . . . . . . . . . . . .             --        60,783,454 
                                                                           ------------    ----------- 
                                                                                  --        65,629,315 
    Less accumulated depreciation . . . . . . . . . . . . . . . . . .             --        23,002,534 
                                                                           ------------    ----------- 
        Total investment property, net
          of accumulated depreciation . . . . . . . . . . . . . . . .             --        42,626,781 
    Properties held for sale or disposition . . . . . . . . . . . . .        96,547,851     66,102,154 
                                                                           ------------    ----------- 
        Total investment properties . . . . . . . . . . . . . . . . .        96,547,851    108,728,935 
                                                                           ------------    ----------- 
Investment in unconsolidated venture, at equity . . . . . . . . . . .         1,041,865        628,276 
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . .         3,686,193      3,802,233 
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . .         1,536,044      2,965,832 
Venture partner's deficit in venture. . . . . . . . . . . . . . . . .           405,564        405,564 
                                                                           ------------    ----------- 
                                                                           $114,261,520    127,569,676 
                                                                           ============    =========== 


<PAGE>


                               CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
                                          (A LIMITED PARTNERSHIP)
                                         AND CONSOLIDATED VENTURES
                                        CONSOLIDATED BALANCE SHEETS
                           LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
                           -----------------------------------------------------
                                                                          SEPTEMBER 30,    DECEMBER 31,
                                                                              1997            1996     
                                                                          -------------    ----------- 
Current liabilities:
  Current portion of long-term debt . . . . . . . . . . . . . . . . .      $ 47,398,009        517,413 
  Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . .         3,112,502      3,005,313 
  Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . .           615,497        612,197 
  Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . .         3,272,111      1,883,331 
  Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . .           670,668        713,459 
                                                                           ------------    ----------- 
        Total current liabilities . . . . . . . . . . . . . . . . . .        55,068,787      6,731,713 
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . .           187,997        215,186 
Long-term debt, less current portion. . . . . . . . . . . . . . . . .        84,127,509    130,058,240 
Deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . .           176,069        200,749 
                                                                           ------------    ----------- 
Commitments and contingencies

        Total liabilities . . . . . . . . . . . . . . . . . . . . . .       139,560,362    137,205,888 
                                                                           ------------    ----------- 
Deferred gain on sale of investment property. . . . . . . . . . . . .         1,867,695      1,867,695 
                                                                           ------------    ----------- 
Venture partner's subordinated equity in venture. . . . . . . . . . .         2,646,909      2,600,108 
                                                                           ------------    ----------- 
Partners' capital accounts (deficits):
  General partners:
    Capital contributions . . . . . . . . . . . . . . . . . . . . . .             1,000          1,000 
    Cumulative net earnings (losses). . . . . . . . . . . . . . . . .       (13,524,164)   (12,895,787)
    Cumulative cash distributions . . . . . . . . . . . . . . . . . .        (1,116,446)    (1,116,446)
                                                                           ------------    ----------- 
                                                                            (14,639,610)   (14,011,233)
                                                                           ------------    ----------- 
  Limited partners:
    Capital contributions, net of offering costs. . . . . . . . . . .       121,935,233    121,935,233 
    Cumulative net earnings (losses). . . . . . . . . . . . . . . . .       (92,041,094)   (76,960,040)
    Cumulative cash distributions . . . . . . . . . . . . . . . . . .       (45,067,975)   (45,067,975)
                                                                           ------------    ----------- 
                                                                            (15,173,836)       (92,782)
                                                                           ------------    ----------- 
        Total partners' capital accounts (deficits) . . . . . . . . .       (29,813,446)   (14,104,015)
                                                                           ------------    ----------- 
                                                                           $114,261,520    127,569,676 
                                                                           ============    =========== 
<FN>
                       See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>


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

                                   CONSOLIDATED STATEMENTS OF OPERATIONS

                          THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

                                                (UNAUDITED)

<CAPTION>
                                                     THREE MONTHS ENDED           NINE MONTHS ENDED     
                                                       SEPTEMBER 30                 SEPTEMBER 30        
                                                 -------------------------- --------------------------- 
                                                      1997          1996          1997          1996    
                                                 ------------    ----------   -----------   ----------- 
<S>                                             <C>             <C>          <C>            <C>         
Income:
  Rental income . . . . . . . . . . . . . . . .  $  6,866,180     8,246,365    20,175,954    24,966,834 
  Interest income . . . . . . . . . . . . . . .        74,172        51,325       446,345       154,669 
                                                 ------------    ----------    ----------   ----------- 
                                                    6,940,352     8,297,690    20,622,299    25,121,503 
                                                 ------------    ----------    ----------   ----------- 
Expenses:
  Mortgage and other interest . . . . . . . . .     3,309,606     4,002,929     9,839,106    11,986,287 
  Depreciation. . . . . . . . . . . . . . . . .         --        1,547,869     1,009,322     4,703,851 
  Property operating expenses . . . . . . . . .     3,969,973     4,540,630    11,445,025    13,682,037 
  Professional services . . . . . . . . . . . .         3,936        86,365       176,385       233,283 
  Amortization of deferred expenses . . . . . .       256,614       196,195       749,897       814,315 
  General and administrative. . . . . . . . . .        89,295        98,524       335,783       322,525 
  Provision for value impairment. . . . . . . .         --            --       13,143,000         --    
  Provision for unrealizable venture 
    partner deficit . . . . . . . . . . . . . .         --            --            --        8,500,000 
                                                 ------------    ----------    ----------   ----------- 
                                                    7,629,424    10,472,512    36,698,518    40,242,298 
                                                 ------------    ----------    ----------   ----------- 
        Operating earnings (loss) . . . . . . .      (689,072)   (2,174,822)  (16,076,219)  (15,120,795)

Partnership's share of operations of 
  unconsolidated venture  . . . . . . . . . . .       117,154        52,578       413,589       150,257 
Venture partner's share of venture's 
  operations. . . . . . . . . . . . . . . . . .        13,923       262,478       (46,801)    1,157,431 
                                                 ------------    ----------   -----------   ----------- 

        Net operating earnings (loss) . . . . .      (557,995)   (1,859,766)  (15,709,431)  (13,813,107)

Gain on sale of investment property . . . . . .         --        2,698,346         --        2,898,346 
                                                 ------------    ----------   -----------   ----------- 
        Net earnings (loss) . . . . . . . . . .  $   (557,995)      838,580   (15,709,431)  (10,914,761)
                                                 ============    ==========   ===========   =========== 


<PAGE>


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

                             CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED




                                                     THREE MONTHS ENDED           NINE MONTHS ENDED     
                                                       SEPTEMBER 30                 SEPTEMBER 30        
                                                 -------------------------- --------------------------- 
                                                      1997          1996          1997          1996    
                                                  -----------    ----------   -----------   ----------- 

        Net earnings (loss) per limited 
          partnership interest:
            Net operating earnings
              (loss). . . . . . . . . . . . . .   $     (3.90)       (12.98)      (109.74)       (96.44)
            Gain on sale of invest-
              ment property . . . . . . . . . .         --            19.43         --            20.87 
                                                  -----------    ----------    ----------   ----------- 
                                                  $     (3.90)         6.45       (109.74)       (75.57)
                                                  ===========    ==========    ==========   =========== 

        Cash distributions per limited 
          partnership interest. . . . . . . . .   $     --            --            --            --    
                                                  ===========    ==========    ==========   =========== 




















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


<PAGE>


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

                                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                               NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

                                                (UNAUDITED)

<CAPTION>
                                                                                1997            1996    
                                                                            ------------    ----------- 
<S>                                                                        <C>             <C>          
Cash flows from operating activities:
  Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $(15,709,431)   (10,914,761)
  Items not requiring (providing) cash or cash equivalents:
    Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1,009,322      4,703,851 
    Amortization of deferred expenses . . . . . . . . . . . . . . . . . . .      749,897        814,315 
    Long-term debt - deferred accrued interest. . . . . . . . . . . . . . .    1,686,680      2,265,241 
    Partnership's share of operations of unconsolidated 
      venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (413,589)      (150,257)
    Venture partner's share of venture's operations . . . . . . . . . . . .       46,801     (1,157,431)
    Provision for value impairment. . . . . . . . . . . . . . . . . . . . .   13,143,000          --    
    Provision for unrealizable venture partner deficit. . . . . . . . . . .        --         8,500,000 
    Gain on sale of investment property . . . . . . . . . . . . . . . . . .        --        (2,898,346)
  Changes in:
    Rents and other receivables . . . . . . . . . . . . . . . . . . . . . .      162,124        863,609 
    Escrow deposits and restricted funds. . . . . . . . . . . . . . . . . .     (991,513)    (2,839,151)
    Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . .      398,132        992,183 
    Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . .      878,282        437,142 
    Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . .      221,468        213,844 
    Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . .        3,300        (19,186)
    Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . .    1,388,780          3,111 
    Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . .      (42,791)      (388,802)
    Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . .      (27,189)       (23,097)
    Deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . .      (24,680)       (22,564)
                                                                            ------------    ----------- 
        Net cash provided by (used in) operating activities . . . . . . . .    2,478,593        379,701 
                                                                            ------------    ----------- 
Cash flows from investing activities:
  Collection of notes receivable. . . . . . . . . . . . . . . . . . . . . .        --           200,000 
  Additions to investment properties. . . . . . . . . . . . . . . . . . . .   (1,385,716)    (1,508,264)
  Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . .     (782,152)      (233,370)
  Cash proceeds from sale of investment property. . . . . . . . . . . . . .        --           700,715 
                                                                            ------------    ----------- 
        Net cash provided by (used in) investing activities . . . . . . . .   (2,167,868)      (840,919)
                                                                            ------------    ----------- 



<PAGE>


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


                             CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)



                                                                                1997            1996    
                                                                            ------------    ----------- 
Cash flows from financing activities:
  Principal payments on long-term debt. . . . . . . . . . . . . . . . . . .     (295,406)      (346,020)
  Venture partners' contributions to venture. . . . . . . . . . . . . . . .        --           245,000 
                                                                            ------------    ----------- 
          Net cash provided by (used in) financing activities . . . . . . .     (295,406)      (101,020)
                                                                            ------------    ----------- 
          Net increase (decrease) in cash and
            cash equivalents. . . . . . . . . . . . . . . . . . . . . . . .       15,319       (562,238)

          Cash and cash equivalents, beginning of year. . . . . . . . . . .    3,697,163      3,928,706 
                                                                            ------------    ----------- 

          Cash and cash equivalents, end of period. . . . . . . . . . . . . $  3,712,482      3,366,468 
                                                                            ============    =========== 

Supplemental disclosure of cash flow information:
  Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $  6,763,646     10,769,007 
                                                                            ============    =========== 

  Non-cash investing and financing activities:
    Sale of investment property:
      Total sales proceeds, net of selling expenses . . . . . . . . . . . . $      --         6,446,787 
      Principal balance and deferred accrued interest
        due on mortgage payable . . . . . . . . . . . . . . . . . . . . . .        --        (5,746,072)
                                                                            ------------    ----------- 
          Cash proceeds from sale of investment property,
            net of selling expenses . . . . . . . . . . . . . . . . . . . . $      --           700,715 
                                                                            ============    =========== 
    Escrowed funds applied by lender to long-term debt. . . . . . . . . . . $    441,409         --     
                                                                            ============    =========== 







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


<PAGE>


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

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      SEPTEMBER 30, 1997 AND 1996

                              (UNAUDITED)

GENERAL

     Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1996, which
are included in the Partnership's 1996 Annual Report, as certain footnote
disclosures which would substantially duplicate those contained in such
audited financial statements have been omitted from this report.

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

     The Partnership adopted Statement of Financial Accounting Standards
No. 121 ("SFAS 121") "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of" as required in the first
quarter of 1996.  The Partnership's policy is to consider a property to be
held for sale or disposition when the Partnership has committed to a plan
to sell or dispose of such property and active marketing activity has
commenced or is expected to commence in the near term or the Partnership
has concluded that it may dispose of the property by no longer funding
operating deficits or debt service requirements of the property thus
allowing the lender to realize upon its security.  In accordance with SFAS
121, any properties identified as "held for sale or disposition" are no
longer depreciated.  As of September 30, 1997, the Partnership and its
consolidated ventures have or have previously committed to plans to sell or
dispose of all their remaining investment properties.  Accordingly, all
consolidated properties have been classified as held for sale or
disposition in the accompanying consolidated financial statements as of the
respective date of such plan's adoption.  The results of operations, net of
venture partner's share, for the nine months ended September 30, 1997 and
1996 for these properties and for properties sold or disposed of in the
past two years were ($15,732,261) and (13,420,987), respectively.  In
addition, the accompanying consolidated financial statements include
$413,589 and $150,257, respectively, of the Partnership's share of total
property operations of $3,013,278 and $1,094,718 for its unconsolidated
property for the nine months ended September 30, 1997 and 1996,
respectively, which is held for sale or disposition.

     During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued.  As the Partnership's
capital structure only has general and limited partnership interests, the
Partnership does not expect any significant impact on its consolidated
financial statements upon adoption of these standards when required at the
end of 1997.



<PAGE>


TRANSACTIONS WITH AFFILIATES

     The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments.  Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of September 30, 1997 and for the nine months ended
September 30, 1997 and 1996 were as follows:

                                                          Unpaid at  
                                                        September 30,
                                   1997        1996         1997     
                                 --------    -------    -------------
Property management 
 and leasing fees . . . . . .    $204,085    140,173          --     
Insurance commissions . . . .      24,915     27,639          --     
Reimbursement (at cost)
 for out-of-pocket salary 
 and salary-related expenses
 related to the on-site
 and other costs for the 
 Partnership and its
 investment properties. . . .      38,187     63,621        23,020   
                                 --------    -------        ------   
                                 $267,187    231,433        23,020   
                                 ========    =======        ======   

     The Corporate General Partner has deferred payment of partnership
management fees of $11,936.  In addition, distributions to the General
Partners of the first quarter 1991 net cash flow of the Partnership
aggregating $7,161 have been deferred.  The General Partners and their
affiliates have also deferred payment of the Partnership's share of
property management and leasing fees of approximately $171,000 for the
Partnership's unconsolidated venture, which is not included in the
consolidated financial statements.  These amounts do not bear interest and
are expected to be paid in future periods.


RIVERFRONT OFFICE BUILDING

     In 1996, Blue Cross Blue Shield, occupying approximately 88,000 square
feet, or approximately 26% of the leasable space of the building, notified
the venture that it would be vacating the premises upon its lease
expiration, originally set for March 1998.  As a result, the venture
entered into a termination agreement with Blue Cross Blue Shield whereby
the tenant would vacate certain spaces by certain dates before its lease
expiration date for a set payment.  Although the venture has incurred
substantial lease-up costs as a result of the Blue Cross Blue Shield lease
expiration, the venture has been able to fulfill the debt service
requirements of the restructured loan.  Additionally, the Cambridge,
Massachusetts market, in which the property operates, has been improving. 
As a result, the Partnership has recently been successful in attracting new
tenants to the property such that as of September 30, 1997, the property is
98% occupied.  However, if future operating shortfalls are greater than
expected and funding of deficits becomes necessary, the Partnership would
make a decision to commit additional funds to this investment property
based on, among other things, the likelihood of the return of such
additional investments plus a reasonable profit thereon.  The ability of
this investment property to provide liquidity to the Partnership is
dependent on the property's value and the satisfaction of certain
preference levels to the unaffiliated venture partner pursuant to the joint
venture agreement.



<PAGE>


     The restructured loan secured by the building and improvements
requires that net cash flow after debt service and capital be paid into an
escrow account controlled by the lender to be used for future operating
shortfalls, principal payments and costs associated with additional leasing
as approved by the lender.  In this regard, in July 1997, $441,409 of
escrowed funds was applied by the lender against the outstanding mortgage
loan balance.  The agreement further prohibits the venture owning the
property from distributing excess cash flow after full funding of the
escrow accounts.  Such excess funds are to be retained and utilized for
operating shortfalls, principal payments and costs associated with
additional leasing as approved by the lender prior to withdrawing escrow
deposits.

     In addition, as a condition of the loan restructure discussed above,
the ground lease was amended and provides for the deferral of any and all
ground lease payments from February 1993 until the earlier of any future
mortgage loan prepayment date (resulting from a sale or refinancing of the
property) or December 31, 2007.  However, if the property produces certain
levels of gross receipts (as defined by the restructured loan) for the
years 1998 through 2003, the restructured loan allows for partial payments
of ground rent to be reinstated beginning in 1998.  The ground lessor is a
general partner of the venture partner.  At September 30, 1997, the total
amount of deferred and accrued ground lease expense is approximately
$809,800.

     As a result of the adoption of SFAS 121, the Partnership recorded a
provision for unrealizable venture partner deficit of $8,500,000 as a
result of the uncertainty of the Partnership recovering the deficit capital
account from future operations and ultimate sale of the property.  Such
provision was recorded as of January 1, 1996 based upon an analysis of the
property's discounted estimated future cash flows over the projected
holding period and was recorded to reduce the venture partner's deficit
account to its then estimated recoverable amount.  In addition, no
additional venture losses have been allocated to the venture partner as of
January 1, 1996.

767 THIRD AVENUE OFFICE BUILDING

     In October 1997, the Partnership sold its interest in the property to
the venture partner.

     At closing, the Partnership received net proceeds (before prorations
and closing costs) of $11,000,000 in cash for its 50% interest in the
property.  In addition, the $2,500,000 unsecured promissory note payable to
the venture partner was extinguished.  As a result of the sale, the
Partnership will recognize a gain of approximately $7,000,000 for financial
reporting purposes and approximately $19,000,000 for Federal income tax
purposes in 1997.

     Indebtedness of approximately $38,000,000 related to the investment
has been classified as long-term debt and $2,500,000 has been classified as
a current liability in the accompanying consolidated financial statements
at September 30, 1997.  The Partnership has no liability for any of the
amounts subsequent to the sale of its interest.


<PAGE>


MALL OF MEMPHIS

     Occupancy at the property is 75% at September 30, 1997.  The mall has
experienced a number of store closings, many prior to lease expiration,
primarily as a result of tenants filing for bankruptcy and liquidating.  In
addition, the property has been subjected to increased competition for
shoppers and tenants from strip centers and large discount stores in its
market area.  Although certain tenants continue to perform well, overall
tenant sales at the property have continued to decline.  Due to poor sales
performances, many tenants are electing not to renew their leases or are
renewing at lower rates.  Several other tenants whose leases are not due to
expire in the near term have approached the Partnership seeking rent
relief.  The Partnership has granted rent relief to certain tenants that
could demonstrate that without a reduction in their rent, they would no
longer be able to remain in business at the mall.  As a result of these
market and property conditions, the property's cash flow has been
decreasing and is expected to decline further in the future.

     Due to the vacancies discussed above and other property operating
considerations, the Partnership did not make the required debt service
payments that were due commencing August 1, 1997 on its first, second and
third mortgage notes secured by the property.  At September 30, 1997, these
notes had an aggregate principal balance of $39,898,009 and accrued but
unpaid interest of approximately $1,033,000.  As a result, the Partnership
is in default and these mortgage notes have been classified as current in
the accompanying consolidated financial statements.  The Partnership has
initiated discussions with the lender regarding a loan modification.  In
connection with these discussions, the Partnership made and the lender
accepted a cash flow debt service payment in October 1997 of $509,958.  If
the lender is unwilling to grant an acceptable loan modification for future
operating deficits, the Partnership would likely decide not to commit
additional amounts to the property.  Any decision to commit additional
funds to this investment property for any purpose will be based on, among
other things, the likelihood of the return of such additional investment
plus a reasonable profit thereon.  Failure to commit such funds or
restructure the mortgage loans would likely cause the lender to proceed to
realize on its security in the property.  This would result in the
Partnership no longer having an ownership interest in the property and
would result in a gain for Federal income tax purposes with no
corresponding distributable proceeds.

     Pursuant to the terms of a note payable to the former venture partner,
the Partnership guaranteed a portion of the debt service payments payable
on June 1, 1997 in the amount of $300,000.  As of the date of this report,
the Partnership has not made the debt service payment.  As a result, the
Partnership is in default and the $5,000,000 note payable has been
classified as current in the accompanying consolidated financial
statements.  Due to provisions of the associated underlying agreements, the
former venture partner may generally only realize upon its security (its
former partnership interest in the joint venture) in the event of default
by the Partnership.  However if the June 1997 guaranteed payment is not
paid, it is possible that the former venture partner may attempt to
exercise its remedies against the Partnership's other assets respecting the
guaranteed amounts.

     The current and anticipated market conditions outlined above caused
uncertainty regarding the Partnership's ability to recover the net carrying
value of the Mall of Memphis investment property through future operations
and sale.  Therefore, as of June 30, 1997, the Partnership recorded, as a
matter of prudent accounting practice, a provision for value impairment of
such investment of $13,143,000.  Such provision was recorded to reflect the
then estimated fair value of the property, less costs to sell. There can be
no assurance that the estimated fair value of the property would ultimately
be realized by the Partnership in any future sale or disposition
transaction.



<PAGE>


NATIONAL CITY CENTER

     Occupancy at the property is 90% at September 30, 1997.  The venture
is currently seeking replacement tenants for the vacant space in the
building.  However, there can be no assurance that any replacement tenants
will be obtained.

     In the first quarter of 1997, the venture successfully appealed its
1995 and 1994 real estate taxes and received a refund of approximately
$270,000.  Additionally, the venture was informed that it had successfully
appealed its 1996 real estate taxes (payable in 1997).  This will result in
a decrease in real estate taxes of approximately $165,000.  However,
portions of such refunds will cause the issuance of rent credits to the
tenants as the tenants are generally responsible for their allocable
portion of the real estate taxes pursuant to their lease agreements.

     The venture has been marketing the property for sale and has reached
an agreement in principle to sell the property to an unaffiliated third
party.  Such sale is expected to close by the end of 1997.  However, the
sale is subject to various contingencies including final documentation, and
therefore, there can be no assurance that a sale transaction will be
completed in the near term with this or any other purchaser.  If the sale
is completed on the proposed terms, the venture will recognize in 1997 a
gain for financial reporting and Federal income tax purposes, approximately
13.7% of which will be allocated to the Partnership.

YERBA BUENA OFFICE BUILDING

     In June 1992, title to the Yerba Buena Office Building in San
Francisco, California was transferred to the lender by the joint venture (a
partnership comprised of the Partnership, two other limited partnerships
sponsored by the Partnership's Corporate General Partner and four
unaffiliated limited partners).  In return for a smooth transition of title
and management of the property, the joint venture was able to negotiate the
right to share in future sale or refinancing proceeds, if any, above
certain specified levels.  In addition, the joint venture had a right of
first opportunity to purchase the property during the time frame of June
1995 through May 1998 should the lender wish to market the property for
sale.  The lender sold the property to an unaffiliated third party during
1996.  The sale price did not generate a level of distributable proceeds
where the joint venture would have been entitled to a share.  However, the
joint venture was not given an opportunity to purchase the property on the
same terms it was sold for.  The joint venture has filed a suit against the
lender for breach of its obligations.  There are no assurances that the
joint venture will recover any amounts as a result of this action.

ADJUSTMENTS

     In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of September 30,
1997 and for the three and nine months ended September 30, 1997 and 1996.