SECOND AMENDMENT TO FORBEARANCE AGREEMENT


         SECOND  AMENDMENT TO  FORBEARANCE  AGREEMENT  dated as of September 27,
2000 by and among HISTORIC PRESERVATION  PROPERTIES 1989 LIMITED PARTNERSHIP,  A
Delaware  limited  partnership  ("HPP"),  and EAST BANK ANGEL JOINT VENTURE,  an
Oregon general partnership (the "Developer").

                                    RECITALS

A.      HPP and the Developer are the partners of the Portland Lofts  Associates
Limited Partnership, a Delaware limited partnership, pursuant to the Amended and
Restated Agreement of Limited  Partnership of the Partnership dated as of August
30, 1989 (the "Partnership Agreement").

B.       The parties entered into a Forbearance Agreement, dated as of July 1,
1997,  clarifying  their  understanding  regarding  certain  provisions  of  the
Partnership Agreement and amending the Partnership Agreement as set forth in the
Forbearance Agreement.

C. The parties entered into the First Amendment to Forbearance Agreement,  dated
as of June 21, 2000, amending the Forbearance Agreement.

D. The  parties  desire to amend the  Forbearance  Agreement  again as set forth
below.

E.  Capitalized  terms used  herein  and not  otherwise  defined  shall have the
meaning set forth in the Partnership Agreement.


         NOW,  THEREFORE,  in consideration of the mutual covenants contained in
this  Amendment,  the  parties  agree to amend  the  Forbearance  Agreement  and
Partnership Agreement as follows:

1. The parties acknowledge and ratify the provisions of Section 5.12 of the
Partnership Agreement,  as amended by the Forbearance Agreement,  subject to the
changes described herein.

2. Provided that HPP receives  distributions  of no less than $13,000 per month,
HPP  agrees  that it will  forbear  its right to  exercise  its Put Right  until
January 1, 2001.

3. In all other respects,  the provisions of the Partnership Agreement,
including,  without  limitation,  Section  5.12 as modified  by the  Forbearance
Agreement and herein, and Section 9.09 are hereby ratified and confirmed.

<PAGE>

         IN WITNESS WHEREOF, the Partners have executed this Amendment as of the
date first above written.

                              HISTORIC PRESERVATION PROPERTIES 1989
                              LIMITED PARTNERSHIP

                              BY:  Boston Historic Partners Limited Partnership,
                                   General Partner

                                   By: Portfolio Advisory Services, Inc.,
                                       General Partner

                                       By:
                                             Terrence P. Sullivan, President

                                       and

                                       By:
                                           Terrence P. Sullivan, General Partner


                              EAST BANK ANGEL JOINT VENTURE

                              By:
                                  Joseph W. Angel, Partner

                              and

                              By:  PACIFIC STAR CORPORATION, Partner

                                   By:
                                       Joseph W. Angel, President