UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549
                      ----------------------------------

                                  FORM 10-K

           |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                     FOR FISCAL YEAR ENDED DECEMBER 31, 1998

                                      OR

         |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

              For the transition period from ______ to _______ .


Commission File Number: 33-24129


             Historic Preservation Properties 1989 Limited Partnership
            ----------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Delaware                                         04-3021042
            --------                                         ----------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                            Identification No.)


45 Broad Street, Boston, Massachusetts                             02109
------------------------------------------                         -----
(Address of principal executive offices)                         (Zip Code)


Registrant's telephone number, including area code  (617) 338-6900
                                                    --------------

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
Yes |X| No |_|.

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

Voting stock held by non-affiliates of the registrant. Not applicable.

<PAGE>      

                 DOCUMENTS INCORPORATED BY REFERENCE



Part of the Form 10-K          Document
into which Incorporated        Incorporated by Reference

I                               Prospectus of the registrant  dated December 19,
                                1988 (the "Prospectus").

III                            The Prospectus.







                                      K-2
      HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP

                      1998 FORM 10-K ANNUAL REPORT

                            TABLE OF CONTENTS
                                                            Sequential
                                                  Page No.   Page No. 

PART I

      Item 1    Business                            K- 3        4
      Item 2    Properties                          K- 7        8
      Item 3    Legal Proceedings                   K- 7        8
      Item 4    Submission of Matters to a
                  Vote of Unit Holders              K- 7        8

PART II

      Item 5    Market for the Registrant's
                  Units and Related Unit
                  Holder Matters                    K- 8        9
      Item 6    Selected Financial Data             K- 9       10
      Item 7    Management's Discussion and
                  Analysis of Financial
                  Condition and Results of
                  Operations                        K-10       11
      Item 8    Financial Statements and
                  Supplementary Data                K-16       17
      Item 9    Changes In and Disagreements
                  with Accountants on Accounting
                  and Financial Disclosure          K-16       17

PART III

      Item 10   Director and Executive
                  Officer of the Registrant         K-17       18
      Item 11   Executive Compensation              K-18       19
      Item 12   Unit Ownership of Certain
                  Beneficial Owners and
                  Management                        K-18       19
      Item 13   Certain Relationships and
                  Related Transactions              K-19       20

PART IV

      Item 14   Exhibits, Financial Statement
                  Schedules and Reports on
                  Form 8-K                          K-20       21

SIGNATURES                                          K-21       22

SUPPLEMENTAL INFORMATION                            K-22       23



PART I

Item 1.    Business

Historic Preservation Properties 1989 Limited Partnership (HPP'89, also referred
to as the Partnership),  a Delaware limited partnership, was organized under the
Delaware  Revised Uniform Limited  Partnership Act on September 1, 1988, for the
purpose  of  investing  in a  diversified  portfolio  of real  properties  which
qualified for rehabilitation tax credits  (Rehabilitation  Tax Credits) afforded
by Section 47 of the Internal  Revenue Code of 1986, as amended (the Code),  and
rehabilitating  such  properties (or acquiring such properties in the process of
rehabilitation  and  completing  such  rehabilitation)  in a manner  intended to
render the cost of such rehabilitation eligible for classification as "Qualified
Rehabilitation  Expenditures",  as such term is  defined  in the Code,  and thus
eligible  for  Rehabilitation   Tax  Credits.   The  Partnership  was  initially
capitalized  with  contributions  of $100 from its general partner and $100 from
each of three initial  limited  partners.  On September 2, 1988, the Partnership
filed  a  Registration  Statement  on  Form  S-11,  File  Number  33-24129  (the
Registration  Statement),  with the  Securities  and  Exchange  Commission  (the
Commission) with respect to the public offering of units of limited  partnership
interest (Units) in the Partnership.  The Registration  Statement,  covering the
offering  of up to  100,000  Units at a  purchase  price of $1,000  per Unit (an
aggregate of  $100,000,000),  was declared  effective on December 19, 1988.  The
offering of Units terminated on December 29, 1989, at which time the Partnership
had received gross offering proceeds of $26,588,000 from 2,505 investors.

The general  partner of the  Partnership  is Boston  Historic  Partners  Limited
Partnership (the General  Partner),  a Massachusetts  limited  partnership.  The
general  partners of the General  Partner are (i) Portfolio  Advisory  Services,
Inc. (PAS), a Massachusetts corporation organized for the purpose of acting as a
general  partner  of  the  General  Partner,   and  (ii)  Terrence  P.  Sullivan
(Sullivan).  Limited  partnership  interests in the General  Partner are held by
investors  unaffiliated  with the General Partner  (except for an  approximately
one-half percent limited partnership interest which is owned by Sullivan).

The Partnership does not have any employees.

On October 1, 1995, HPP'89 engaged  Claremont  Management  Corporation  (CMC), a
Massachusetts  Corporation  previously  unaffiliated  and a related  party as of
March 15, 1996 through  ownership by a member The  Cosmopolitan at Mears Park to
provide asset management,  accounting and investor services for an annual fee of
$76,800 and reimbursement of all operating  expenses of providing such services.
Commencing  July 1,  1996,  the  annual  fee for such  services  was  reduced to
$67,200.  The contract with CMC, which originally  expired on June 30, 1997, was
renewed until June 30, 1998.  On July 1, 1998,  HPP'89  engaged Gunn  Financial,
Inc.  (GFI),  an  unaffiliated  Massachusetts  Corporation,   to  provide  asset
management,  accounting  and investor  services for an annual fee of $63,000 and
reimbursement  of  all  operating  expenses  of  providing  such  services.  The
agreement  expires on the  earlier of June 30,  2006 or the  liquidation  of the
Partnership,  as defined.  The Partnership's  only business is investing in real
properties for which the cost of  rehabilitating  such properties  qualifies for
Rehabilitation  Tax  Credits.  A  presentation  of  information  about  industry
segments  is not  applicable  and  would not be  helpful  in  understanding  the
Partnership's business taken as a whole. The Partnership's investment objectives
and policies are described on pages 28-36 of its  Prospectus  dated December 19,
1988 (the Prospectus)  under the caption  "Investment  Objectives and Policies",
which description is incorporated  herein by this reference.  The Prospectus was
filed with the Commission pursuant to Rule 424 (b) on January 5, 1989.

The Partnership originally invested an aggregate of $11,158,064 in three limited
partnerships (collectively, the "Investee Partnerships") through the acquisition
of general  partnership  interests in the Investee  Partnerships,  each of which
owned or acquired real  properties,  the  rehabilitation  of which qualified for
Rehabilitation Tax Credits.  The Partnership also originally invested $5,000,000
in a real property that the Partnership  purchased directly.  As of December 31,
1998,  100% of the  Limited  Partners'  capital  contributions  (net of  selling
commissions,  organizational and sales costs, acquisition fees and reserves) had
been invested in real property investments.

As discussed  below, in March 1996, the Partnership  contributed its interest in
the property it owned  directly to an Investee  Limited  Liability  Company,  of
which the Partnership maintained an interest.

The Investee  Partnerships and the Investee Limited Liability Company are herein
collectively  referred  to as "the  Investee  Entities".  Each  of the  Investee
Entities'  agreements  is different,  but in general,  provides for a sharing of
management  duties and decisions  among HPP'89 and the respective  local general
partners or other managing members and certain priorities to HPP'89 with respect
to return  on and  return  of  invested  capital.  Significant  Investee  Entity
decisions  require the approval of both HPP'89 and the local general partners or
other  managing  members.  In addition,  each  Investee  Entity has entered into
various  agreements with its local general partners or an other member, or their
affiliates, to provide development, management and other services, for which the
local general partners, other member, or their affiliates,  are paid fees by the
respective  Investee  Entity.  All the  Investee  Entities  are subject to first
mortgage  loans (except for Jenkins Court  Associates  Limited  Partnership,  as
discussed  below).  See  Management's   Discussion  and  Analysis  of  Financial
Condition  and Results of  Operations  included as part of this Annual report on
Form 10-K for further detail.

The  Investee  Entities of the HPP'89 are 402 Julia  Street  Associates  Limited
Partnership,  Jenkins Court Associates Limited Partnership,  The Cosmopolitan at
Mears Park Limited  Liability  Company and  Portland  Lofts  Associates  Limited
Partnership.

402 Julia  Street  Associates  Limited  Partnership  (402  Julia) is a  Delaware
limited partnership formed on July 25, 1989 to acquire, construct, rehabilitate,
operate and manage a 19,000 square foot site and the building  situated  thereon
and to  rehabilitate  the building into 24 residential  units and  approximately
3,500 net rentable square feet of commercial  space located thereon at 402 Julia
Street, New Orleans, Louisiana.

HPP'89  originally  contributed  $775,000 to the capital of 402 Julia and owns a
general partnership interest therein.  HPP'89's original investment in 402 Julia
represented   approximately   4%  of  the  aggregate  amount  which  HPP'89  has
contributed to the capital of its three Investee  Entities  acquired in 1989 and
to purchase its direct interest in the Cosmopolitan Building.

On September 16, 1993, the Partnership sold one-third of its general partnership
interest  in 402  Julia to the  developer  general  partner.  The  Partnership's
percentage interest in 402 Julia was thereby reduced from 98% to 65%.

Rehabilitation  Tax Credits  generated by 402 Julia and previously  allocated
to HPP'89 Limited  Partners  totaled  $248,796 since  inception.  As of March
31, 1995, 100% of these credits were fully vested.

Jenkins  Court  Associates  Limited  Partnership  (Jenkins  Court) is a Delaware
limited partnership which was formed on December 20, 1988 to acquire, construct,
rehabilitate,  operate and manage a 144,000 net rentable  square foot five-story
building  and 30,000 net  rentable  square feet of new retail  space,  including
storage areas and parking  facilities,  located at Old York Road and Rydal Road,
Jenkintown Borough, Pennsylvania.

HPP'89  contributed  $6,563,064  through the date of Jenkins  Court's Chapter 11
filing (see below) to the capital of Jenkins Court and had a general partnership
interest therein. HPP'89's investment in Jenkins Court represented approximately
36% of the aggregate amount which HPP'89  originally  contributed to the capital
of its three Investee  Entities  acquired during 1989 and to purchase its direct
interest in the Cosmopolitan Building.

Jenkins Court filed for protection  under Chapter 11 federal  bankruptcy laws on
November 23, 1994. On August 31, 1995,  after  maximum  vesting of the remaining
Rehabilitation  Tax  Credits  had been  achieved  for 1995 and  considering  the
unlikelihood of a successful plan of  reorganization,  Jenkins Court  negotiated
with the  mortgage  holder to transfer the deed and title of the property to the
mortgage  holder in lieu of  foreclosure.  The transfer of deed and title of the
property to the mortgage  holder resulted in a recapture of  Rehabilitation  Tax
Credits in 1995 of $44,451 to HPP'89,  of which  $44,007  was  allocated  to the
Limited  Partners of HPP'89.  Tax credits  allocated to the Limited  Partners of
HPP'89 totaling  $2,758,113  were vested on or before June 15, 1995.  Therefore,
98.5% of the Limited  Partners' tax credits were vested prior to the loss of the
property.

On  December  18,  1989,   HPP'89  acquired  the   Cosmopolitan   Building  (The
Cosmopolitan)  containing 255 residential units and  approximately  2,200 square
feet of commercial  space.  The building was renovated,  and certain  renovation
costs  qualified  for  Rehabilitation  Tax Credits.  HPP'89's  investment in The
Cosmopolitan represented  approximately 39% of the aggregate amount which HPP'89
originally contributed to the capital of its three Investee Entities acquired in
1989 and to purchase its direct interest in The Cosmopolitan.

Rehabilitation  Tax  Credits  generated  by the  purchase  of  the  Cosmopolitan
Building  and  previously   allocated  to  HPP'89's   limited  partners  totaled
$4,307,491 since  inception.  As of December 31, 1994, 100% of these tax credits
were fully vested.

In March 1996, the Partnership  contributed The  Cosmopolitan  and certain other
assets and  liabilities  to The  Cosmopolitan  at Mears  Park,  LLC  (TCAMP),  a
Delaware  limited  liability  company,  for a 50%  ownership  interest in TCAMP.
Concurrently, a party related to CMC contributed $650,000 in cash to TCAMP for a
50% ownership interest in TCAMP.  Simultaneously,  TCAMP issued a mortgage note,
the proceeds of which, along with the $650,000 cash  contribution,  were used to
settle in full the Partnership's mortgage note related to The Cosmopolitan.

Portland Lofts  Associates  Limited  Partnership  (Portland Lofts) is a Delaware
limited   partnership   formed  on  August  8,  1989  to   acquire,   construct,
rehabilitate, operate and manage three buildings containing 89 residential units
including 29,250 square feet of ground floor space useable as either  commercial
space or as home/studio space for artists,  located at 555 Northwest Park Avenue
in Portland, Oregon.

HPP'89  contributed  $3,820,000  through  December  31,  1998 to the  capital of
Portland  Lofts  and  owns a  general  partnership  interest  therein.  HPP'89's
investment  in Portland  Lofts  represents  approximately  21% of the  aggregate
amount which HPP'89 originally  contributed to the capital of its three Investee
Entities   acquired  in  1989  and  to  purchase  its  direct  interest  in  the
Cosmopolitan Building.

Rehabilitation  Tax Credits  generated  by Portland  Lofts and  allocated  to
HPP'89's  Limited Partners  totaled  $1,775,571 since inception.  As of April
1, 1996, 100% of these tax credits were fully vested.

The Investee  Entities are, and will continue to be, subject to competition from
existing and future projects in their respective  geographic  areas. The success
of the Partnership will depend on factors,  many of which are beyond the control
of the  Partnership  and which cannot be  predicted  at this time.  Such factors
include general economic and real estate market  conditions,  both on a national
basis  and in those  geographic  areas  where  the  projects  are  located,  the
availability  and cost of  borrowed  funds,  real  estate tax  rates,  operating
expenses,  energy costs and  government  regulations.  In addition,  other risks
inherent in real estate  investment  may influence  the ultimate  success of the
Partnership,  including  (i)  possible  reduction  of  rental  income  due to an
inability to maintain high occupancy  levels or adequate rental levels,  or (ii)
possible  adverse  changes in general  economic  conditions  and  adverse  local
conditions,  such as  competitive  overbuilding,  or a decrease in employment or
adverse  changes in real estate laws,  including  building codes. In particular,
changes in federal and state income tax laws affecting real estate  ownership or
limited partnerships could have a material and adverse effect on the business of
the Partnership.

Item 2.    Properties

See Item 1 above.

Item 3.    Legal Proceedings

The  Partnership  and its  Investee  Entities  are not  party  to,  to the  best
knowledge of the General Partner, any material pending legal proceedings.

Item 4.    Submission of Matters to a Vote of Unit Holders.

No matters were submitted to a vote of Unit holders.



<PAGE>


                                 PART II

Item 5.    Market for Registrant's Units and Related Unit Holder Matters.

(a)   There is no established  public market for the Units and no such market is
      expected to  develop.  Trading in the Units is limited  and  sporadic  and
      occurs solely through private transactions.

(b) As of March 15, 1999, there were 2,520 holders of Units.

The Amended and  Restated  Agreement  of Limited  Partnership  (the  Partnership
Agreement)  requires  that any Cash Flow (as  defined  therein)  be  distributed
quarterly  to the  investor  limited  partners  (Limited  Partners) in specified
proportions  and priorities  and that Sale or  Refinancing  Proceeds (as defined
therein) be distributed as and when available.  There are no restrictions on the
Partnership's  present or future ability to make  distributions  of Cash Flow or
Sale or Refinancing  Proceeds.  For the years ended December 31, 1998,  1997 and
1996, no distributions of Cash Flow or Sale or Refinancing Proceeds were paid or
accrued to the Limited Partners.



<PAGE>


Item 6.    Selected Financial Data.


                                                                     Periods
Ended December 31,


                           1998      1997      1996        1995       1994
                         ---------  --------  ---------  ----------  ---------
                                             (Unaudited)(Unaudited) (Unaudited)

Revenue                  $ 6,667   $  8,912   $552,395 $ 2,164,691  $ 2,188,421

Net Income (Loss)        $60,571   $(96,522)  $473,848 $(1,928,010) $(1,391,927)


Net Income (Loss)per
weighted average Unit
outstanding:
   Loss before 
   extraordinary gain    $  2.26   $  (3.59)  $(324.25)$  (71.79)    $   (51.83)
   Extraordinary gain          -   $      -   $ 341.89 $       -     $        -
   Net Income (Loss)     $  2.26   $  (3.59)  $  17.64 $  (71.79)    $   (51.83)


Total Assets as of 
December 31,            $849,087   $783,736   $892,540 $17,160,719  $19,092,470

Long Term Debt,
excluding discount
as of December 31,      $    0     $    0    $       0 $17,579,606  $18,496,144

Cash  Distributions  per
weighted average Unit  
Outstanding             $    0     $    0    $       0 $         0  $         0 
Rehabilitation Tax  
Credit per Unit         $    0     $    0    $       0 $         0  $         0




See Item 7 for a  discussion  of the  factors  that may  materially  affect  the
foregoing information in future years.





<PAGE>


Item 7.    Management's  Discussion and Analysis of Financial  Condition and 
           Results of Operations.

Liquidity and Capital  Resources.  The  Partnership  terminated  its offering of
Units on December 29, 1989, at which time Limited  Partners had purchased 26,588
Units, representing gross capital contributions of $26,588,000.  The Partnership
originally  invested an aggregate of $11,158,064 in three Investee  Partnerships
which owned or acquired real properties,  the  rehabilitation of which qualified
for  Rehabilitation  Tax  Credits.  The  Partnership  also  originally  invested
$5,000,000 in The Cosmopolitan, real property that the Partnership had purchased
directly,  and was required to place a total of $2,000,000 in an escrow  account
with the mortgage lender for this property for the purpose of funding  operating
deficits.

Such amounts originally contributed represent  approximately 100% of the Limited
Partners'  capital   contributions  after  deduction  of  selling   commissions,
organizational and sales costs,  acquisition fees and reserves.  The Partnership
does not expect to make any additional investments in new real estate.

The Cosmopolitan is a 255 unit  residential  property with  traditional,  annual
operating leases to individuals that expire within one year of signing. This 255
unit building operates in a very competitive lowertown St. Paul market.

On January 5, 1995,  the  Partnership  resolved a dispute with the holder of the
Cosmopolitan's  mortgage over certain amounts in an escrow account. As a result,
the Partnership  received  approximately  $286,000 from the escrow account which
was used to fund and reserve for the general and administrative  expenses of the
Partnership,  and obtained the  opportunity to purchase the mortgage note at the
fair market value of the property,  in exchange for the release of the principal
funds from the escrow account as a payment  toward the mortgage  principal and a
reduction of the mortgage term by three years.  Effective March 15, 1996, HPP'89
contributed The Cosmopolitan, and certain other assets and liabilities, to TCAMP
(a  Limited  Liability  Company)  for a 50%  ownership  interest.  Concurrently,
another member contributed  $650,000 cash to TCAMP for a 50% ownership interest.
Simultaneously,  TCAMP issued a mortgage  note in the amount of  $7,000,000  the
proceeds of which along with the $650,000  contributed cash, were used to settle
in full HPP'89's  mortgage note payable  related to the  Cosmopolitan  Building.
TCAMP's mortgage bears interest at 9.14%;  amortizes over a 25 year schedule and
requires  monthly  payments  of  principal,   interest,   real  estate  tax  and
replacement  reserve deposits  totaling  $94,550;  the mortgage matures in March
2003,  at which time all unpaid  principal  and accrued  interest is due.  After
March 14, 1996,  HPP'89 no longer had any  operations  directly  related to real
estate activity or generated cash from rental activity of The  Cosmopolitan.  As
of March 15, 1996,  the  Partnership  accounts for its investment in TCAMP under
the equity method of accounting.

Jenkins Court filed for protection  under Chapter 11 Federal  Bankruptcy laws on
November 23, 1994. On August 31, 1995,  after  maximum  vesting of the remaining
Rehabilitation  Tax Credits had been  achieved  for 1995,  and  considering  the
unliklihood of a successful  plan of  reorganization,  Jenkins Court  negotiated
with the  mortgage  holder to transfer the deed and the title of the property to
the mortgage holder, in lieu of foreclosure.

Although Jenkins Court no longer owns its investment property and will no longer
have property operations, the Jenkins Court partnership will remain in existence
until the  resolution  of  certain  partnership  assets and  liabilities.  These
liabilities include a $250,000 default loan and accrued interest thereon,  which
has been  provided  by HPP'89 and  secured  by the  developer's  interest  in an
unaffiliated limited partnership. As a result of the Chapter 11 proceedings, The
Partnership  is not expected to be liable as a general  partner of Jenkins Court
for any remaining obligations of Jenkins Court.

Due to the foreclosure proceeding related to Jenkins Court, HPP'89 no longer has
an  investment  in the  property.  As of December 31, 1995,  the  investment  in
Jenkins Court and its  corresponding  reserve,  both totaling  $5,471,055,  were
eliminated from the balance sheet.

In May 1996,  Portland  Lofts reached a settlement  agreement with the holder of
its mortgage note and an unsecured note. According to the Settlement  Agreement,
Portland Lofts was allowed until, July 31, 1996, to pay $5,400,000 to the holder
in full satisfaction of both the mortgage note and an unsecured note.

On June 20, 1996, Portland Lofts issued a promissory mortgage note in the amount
of  $5,625,000  and a  promissory  note to a general  partner  in the  amount of
$340,000 to provide  sufficient  funds to pay in full the $5,400,000  settlement
amount  with the holder in full  satisfaction  of both the  mortgage  note,  the
unsecured note payable and all related closing costs.  The transaction  resulted
in an extraordinary  gain on extinguishment  of debt of $1,656,579.  The current
mortgage note on the property:  bears interest at 9.0%; amortizes over a 25-year
schedule;  requires monthly  payments of principal and interest of $47,205;  and
matures on July 1, 2006, at which time all unpaid principal and interest is due.

402 Julia is a mix-use property with 24 residential  units and 3,500 square feet
of commercial space. On September 16, 1993, HPP'89 sold one-third of its general
partnership interest in 402 Julia to the developer general partner for $185,000.
HPP'89's  percentage  of interest in 402 Julia was thereby  reduced  from 98% to
65%. The terms of the sale  required an initial  payment of $100,000,  which was
received in September  1993, and requires annual payments of $3,500 through 2016
and a final  payment of $4,500 in 2017. On July 17, 1998,  402 Julia  refinanced
its mortgage debt by issuing a promissory  note to a new lender in the amount of
$1,100,000  bearing interest at 6.69%,  amortizing over 30 years and maturing in
August  2008,  at which time all  unpaid  interest  and  principal  is due.  The
mortgage  note  requires  monthly  payments of principal and interest and escrow
deposits (real estate tax and  insurance) in the aggregate  amount of $7,091 and
$1,312, respectively.

The short-term liquidity of the Investee Entities, with the exception of Jenkins
Court,  depends on their  ability to generate  sufficient  rental income to fund
operating expenses and debt service requirements.  TCAMP, Portland Lofts and 402
Julia have stabilized  operations and, after considering the effects of TCAMP's,
Portland Lofts' and 402 Julia's recent respective refinancings,  are expected to
generate  cash flow.  For the year ended  December  31,  1998,  the  Partnership
received  distributions  from  Portland  Lofts and TCAMP  totaling  $156,000 and
$75,000,  respectively.  For the year ended December 31, 1997,  the  Partnership
received  distributions  from Portland  Lofts of $156,000 and for the year ended
December 31, 1996, the Partnership  received  distributions  from Portland Lofts
and TCAMP totaling $26,000 and $98,200, respectively.

As of December 31, 1998 and 1997, the  Partnership  had $170,981 and $175,288 of
total cash.  HPP'89's cash is used primarily to fund general and  administrative
expenses of managing the public  fund.  The  Partnership's  only source of short
term  liquidity is from  distributions  received from Investee  Entities and the
proceeds  from  the  previous  sale of a  partial  interest  in 402  Julia.  The
Partnership  expects  to fund its  expenses  with cash flow  distributions  from
Portland Lofts and TCAMP.

Distributions  from TCAMP to the  Partnership  and the other member of TCAMP are
subject to the order of distributions as specified in the operating agreement of
TCAMP. Until the other member's original $650,000 capital  contribution has been
reduced to zero, to the extent that the  Partnership  accumulates  from whatever
sources operating reserve amounts greater than $140,000 at the end of any fiscal
year, the  Partnership is required to contribute  such excess within thirty days
of the end of such fiscal year to TCAMP as additional  capital  contributions to
be distributed by TCAMP to its other member as a return of its original  capital
contribution.

As of December 31,  1997,  the  outstanding  balance of TCAMP's  other  member's
unreturned original $650,000 capital contribution was $223,773.  On February 27,
1998,  the  Partnership  contributed to TCAMP  $35,288,  representing  operating
reserves  in excess of  $140,000  at  December  31,  1997.  The funds  were then
distributed  from TCAMP to its other member as a return of its original  capital
contribution.  On May 18, 1998, TCAMP's other member's original $650,000 capital
contribution was reduced to zero,  thereby  eliminating any future  requirements
for the Partnership to make additional capital contributions to TCAMP.

In late 1998, a dispute  developed between HPP'89 and the other member regarding
distributions from TCAMP. The dispute could result in a significant delay and/or
reduction of anticipated distributions by TCAMP to HPP'89, which, in turn, could
have a detrimental  effect on HPP'89's short term  liquidity.  HPP'89 intends to
pursue all of its rights to distributions under the TCAMP Operating Agreement.

Cash  flow  generated  from  the  Partnership's  investment  properties  and the
Partnership's share of the proceeds from the sale of such properties is expected
to be the source of future long-term liquidity.

Results of Operations.  As a result of the  contribution of The  Cosmopolitan to
TCAMP for a 50% ownership interest in TCAMP, subsequent to March 14, 1996 HPP'89
no longer had operations  directly  related to real estate  activity.  As of the
date of contribution, the Partnership accounts for its investment in TCAMP under
the equity method of accounting.

Due to the foreclosure proceeding related to Jenkins Court, HPP'89 no longer has
an  investment  in the  property.  As of December 31, 1995,  the  investment  in
Jenkins Court and its  corresponding  reserve,  both totaling  $5,471,055,  were
eliminated from the balance sheet.

The Partnership  accounts for its  investments in its three  remaining  investee
entities  under the  equity  method.  In  general,  under the  equity  method of
accounting for  investments,  the investment is recorded at cost and the current
allocable  portion of earnings  (losses)  of an  Investee  Entity is recorded as
income  (loss)  with a  corresponding  increase  (decrease)  to  the  investment
account.  The allocable portion of losses of an Investee Entity are not recorded
after the  respective  investment  account  is reduced  to zero.  The  allocable
portion of earnings of an Investee  Entity are not recorded until all previously
unrecorded losses are absorbed.  The Partnership's  allocable share of operating
income and/or losses in investee entities range from 50% to 99%.

Distributions  received are recorded as  reductions to the  investment  account.
Distributions  received  from an Investee  Entity  whose  respective  investment
account has been reduced to zero are recorded as income.

As of December 31,  1998,  402 Julia  leased 100% of its  residential  units and
commercial  space. 402 Julia has benefited from a relatively  strong New Orleans
market and  continues to record stable  operations in recent years.  The average
occupancy  has decreased  slightly  compared to prior years due to the increased
availability  of low mortgage rates in the single family home market.  402 Julia
rents units to residential tenants, half of which are under short-term operating
leases with the remaining rented under month-to-month arrangements. For the year
ended December 31, 1998, 402 Julia recorded a net loss of approximately  $26,500
which included depreciation and amortization of approximately $56,000.

At  December  31,  1998,  Portland  Lofts had  leased  approximately  88% of its
residential  apartment  units and 95% of the  commercial  space  for a  combined
occupancy of 90%. Portland Lofts rents space to residential  tenants principally
under  month-to-month  arrangements  and to commercial  tenants under  operating
leases of varying terms  expiring  through  2004.  As of December 31, 1998,  the
Partnership  had entered into seventeen  commercial  leases.  The  Partnership's
largest  commercial  tenant  occupancies 23% of the commercial space at December
31, 1998,  representing only 5.8% of the total square feet of the property.  For
the year  ended  December  31,  1998,  Portland  Lofts  recorded  net  income of
approximately  $4,500  of  which  included   depreciation  and  amortization  of
approximately $286,000.

TCAMP operates in the competitive  lowertown  district of St. Paul.  Despite the
availability  of low  mortgage  rates in the single  family  house  market,  the
building has  increased  rental rates with the market and  maintained  occupancy
above 95% for several years.

TCAMP has achieved stable occupancy and had an economic occupancy of 97% for the
year ended  December  31,  1998.  TCAMP  recorded  net  income of  approximately
$268,000,  which included depreciation and amortization expense of approximately
$271,000,  for the year ended  December 31, 1998. In 1990, the  Partnership  had
fully reserved  against its investment in Portland Lofts, due to the substantial
doubt it would  continue as a going  concern.  Accordingly,  since the  Portland
Lofts  investment  was  fully  reserved  for,  the  Partnership  had  cumulative
unrecorded  losses of $1,325,926  associated  with the investment as of December
31, 1995.  Principally as a result of an extraordinary gain on extinguishment of
debt, Portland Lofts generated net income of $1,547,514 in 1996, of which HPP'89
has been  allocated  $1,532,039.  This  allocated net income  allowed  HPP'89 to
recover all of its cumulative  unrecorded  losses from Portland Lofts.  HPP'89's
net  income in equity  recognized  in 1996,  after  recovery  of all  cumulative
unrecorded losses, from the Portland Lofts Investment,  totaled $206,113.  As of
December  31, 1996,  the net balance of HPP'89's  investment  in Portland  Lofts
totaled approximately $180,100.

For the year ended  December 31, 1997,  Portland  Lofts  allocated a net loss of
$173,710  and paid cash  distributions  of  $156,000  to  HPP'89.  During  1997,
HPP'89's  investment in Portland  Lofts was reduced to zero due to allocation of
losses and distributions received. Accordingly, HPP'89 has cumulative unrecorded
losses at December 31, 1997 totaling $95,391 and recorded distributions received
of $54,203 as equity income of Investee Entities.  Although HPP'89's  investment
in  Portland  Lofts has been  reduced  to zero,  Portland  Lofts has  stabilized
operations and will continue to provide distributions to HPP'89.

For the year ended December 31, 1998, the  Partnership  was allocated net income
of $4,404 from the Portland Lofts investment,  reducing the unrecorded losses to
$90,987  at  December  31,  1998.  For the year ended  December  31,  1998,  the
Partnership  received  distributions  of $156,000 from Portland  Lofts which are
recorded as equity income of Investee Entities.

The  Partnership  recorded  net  income,  under  generally  accepted  accounting
principles,  of $60,571 for the year ended December 31, 1998,  compared to a net
loss of $96,522 for the year ended December 31, 1997. This increase is primarily
due to the increase in equity in income of investee entities of $210,651, offset
by an increase in operating  administrative expenses of $51,313. The increase in
the Partnership's share of equity in income from investee entities is mainly due
to the activity  from  Portland  Lofts and an increase in TCAMP's  allocated net
income,  offset by an increase in 402 Julia's  allocated  net loss. As mentioned
above,  the  Partnership's  net  investment  balance in Portland  Lofts had been
reduced  to zero in the third  quarter  of 1997,  as a result of  allocated  net
losses and distributions  received.  Therefore,  for the year ended December 31,
1997,  the  Partnership  had recorded a net loss from Portland  Lofts of $78,314
offset by  distributions  of $54,206  received  in excess of the net  investment
balance  compared  to  distributions  of $156,000  recorded as equity  income of
investee  entities for the year ended December 31, 1998 from Portland Lofts. The
increase in TCAMP's  allocated  net income of $35,630 for 1998 compared to 1997,
is primarily  due to increased  revenue due to higher rental rates and furniture
rental,  offset by a slight increase in operating expenses.  The increase in 402
Julia's net loss of $6,749 for 1998 compared to 1997, is primarily attributed to
the  amortization  of the deferred  loan  commitment  fee related to 402 Julia's
original  mortgage  which  was  refinanced  in July of  1998.  The  increase  in
operating  and  administrative  expense  for 1998  compared to 1997 is due to an
increased overhead requirement of the Partnership.

The  Partnership  recorded  a net  loss,  under  generally  accepted  accounting
principles,  of $96,522 for the year ended  December 31,  1997,  compared to net
income of $473,848 for the year ended December 31, 1996. This $570,370  decrease
is primarily  attributable to transactions  relating to the contribution in 1996
of The  Cosmopolitan  to TCAMP and a  decrease  in  HPP'89's  share of equity in
income of investee  entities.  The  contribution of The Cosmopolitan to TCAMP in
1996 resulted in a provision for  impairment of real estate of  $8,437,963,  the
difference  between the carrying value and the fair market value of the property
at transfer,  and an extraordinary gain on extinguishment of debt of $9,182,017,
the amount outstanding under the mortgage payable and the amount accepted by the
lender from TCAMP in full  settlement.  The decrease in HPP'89's share of equity
in income of investee entities is primarily due to the allocated net income from
Portland Lofts in 1996.  Portland  Lofts' net income for the year ended December
31, 1996 was primarily  attributable to the extraordinary gain on extinguishment
of debt,  the  difference  between  the amount  outstanding  under the  mortgage
payable and previous  agreed  settlement  amount with the holder of the mortgage
and the unsecured note.

Inflation and Other Economic Factors

Recent  economic  trends  have  kept  inflation  relatively  low,  although  the
Partnership  cannot  make any  predictions  as to  whether  recent  trends  will
continue.  The assets of the  Partnership,  principally  investments in Investee
Entities,  are highly leveraged in view of the fact that each Investee  property
is subject to a long-term  first  mortgage loan.  Operating  expenses and rental
revenue of each Investee property are subject to inflationary factors. Low rates
of inflation  could result in slower  rental rate  increases,  and to the extent
that these  factors are  outpaced by increases  in property  operating  expenses
(which  could  arise as a result of general  economic  circumstances  such as an
increase in the cost of energy or fuel, or from local  economic  circumstances),
the operations of the Partnership and its Investees could be adversely affected.
Actual  deflation in prices  generally  would, in effect,  increase the economic
burden of the mortgage debt service with a corresponding adverse effect.

High rates of inflation,  on the other hand,  raise the  operating  expenses for
projects,  and to the extent they cannot be passed on to tenants  through higher
rents,  such increases  could also  adversely  affect  Partnership  and Investee
operations. Although, to the extent rent increases are commensurable, the burden
imposed by the mortgage leverage is reduced with a favorable effect.  Low levels
of new  construction  of similar  projects and high levels of interest rates may
foster  demand for existing  properties  through  increasing  rental  income and
appreciation in value.

Year 2000 Issues

The Partnership  and its Investee  Entities have analyzed the effect of the Year
2000 on their respective  financial and computer  systems and have  incorporated
and/or  expect to have  incorporated  the necessary  modifications  to avert any
negative  consequences.  The Partnership does not anticipate Year 2000 issues to
have any material  effect on its  operations  or the  operations of the Investee
Entities, or incur substantial costs to address Year 2000 issues.

Item 8.    Financial Statements and Supplementary Data.

See the Financial  Statements of the Partnership included as part of this Annual
Report on Form 10-K.

Item 9.    Changes in and  Disagreements  with Accountants on Accounting and 
           Financial Disclosure.


           None.


































                                PART III

Item 10.   Director and Executive Officer of the Registrant.

           (a) and (b)  Identification of Director and Executive Officer.

The  following  table sets forth the name and age of the director and  executive
officer of PAS and the offices held by such person.

    Name                        Office             Age

Terrence P. Sullivan      President and Director    52

     Mr.  Sullivan  has served as a director  and  executive  officer of PAS,
which is a general  partner  of the  General  Partner  since  November  1986.
Since  that  time,  he  has  also  been a  general  partner  of  the  General
Partner.  He will  continue to serve in the  capacity  indicated  above until
his  successor is elected and  qualified.  Mr.  Sullivan is also an executive
officer of Boston Capital Planning Group, Inc. (Boston Capital  Planning),  a
Massachusetts corporation.


           (c)  Certain Significant Employees.

                None.

           (d)  Family Relationships.

                None.

           (e)  Business Experience.

The background  and experience of the executive  officer and director of PAS and
Boston Capital Planning identified above in Items 10(a) and 10(b) is as follows:

Terrence P. Sullivan,  52, is the founder and sole shareholder of Boston Capital
Planning,  a financial  consulting  and real estate  syndication  firm,  and its
wholly-owned subsidiary,  Boston Bay Capital, Inc. (Boston Bay Capital). Founded
in 1979, Boston Bay Capital was an NASD-Registered broker/dealer specializing in
placement of interests in real estate  limited  partnerships  which own historic
and  restoration  properties.  From 1979 through  December 31, 1986,  Boston Bay
Capital  participated  in the placement of limited  partnership  interests in 98
real estate programs,  approximately 60 of which were historic rehabilitation or
restoration  partnerships,  placing  a total of  approximately  $140,000,000  in
equity.  In addition,  Boston Bay Capital served as dealer manager in connection
with the sale of Units of limited partnership interest in Historic  Preservation
Properties Limited Partnership,  Historic  Preservation  Properties 1988 Limited
Partnership, the Partnership, and Historic Preservation Properties 1990 L.P. Tax
Credit  Fund,  four public  programs  sponsored  by the  General  Partner and an
affiliate  of the General  Partner.  Such public  programs  sold an aggregate of
approximately $82 million of Units of limited partnership interest. From 1972 to
1978, Mr.  Sullivan was Tax Shelter  coordinator for the Boston office of White,
Weld & Co.,  Inc.,  an investment  banking firm.  Mr.  Sullivan  graduated  from
Worcester  Polytechnic  Institute  in 1968 with a Bachelor of Science  degree in
mechanical engineering.

He  received  a  Masters  in  Business  Administration  from the  University  of
Massachusetts (Amherst) in 1971. Mr. Sullivan serves as a general partner of BBC
Restoration Properties II Limited Partnership. In addition, an entity controlled
by Mr. Sullivan serves as the general partner of  Institutional  Credit Partners
Limited  Partnership  (ICP), a partnership  organized to invest in a diversified
portfolio  of  properties  which  qualify for  low-income  housing tax  credits,
Rehabilitation Tax Credits,  or both. In 1989, ICP completed a private placement
of  $5,790,000  of  limited  partnership  interest  to  corporations  and  other
institutional investors.

           (f)  Involvement in Certain Legal Proceedings.

                None.

Item 11.   Executive Compensation.

The director and executive  officer of PAS and Boston Capital Planning  receives
no remuneration from the Partnership.

Under the  Partnership  Agreement,  the General  Partner and its  affiliates are
entitled to receive  various fees,  expense  reimbursements,  commissions,  cash
distributions,  allocations  of taxable  income or loss and tax credits from the
Partnership.  The amounts of these items and the times at which they are payable
to the General  Partners and their  affiliates  are described on pages 13-15 and
36-39 of the Prospectus under the captions  "Management  Compensation" and "Cash
Distributions and Net Profits and Net Losses", respectively,  which descriptions
are incorporated herein by this reference.

There were no expense  reimbursements  paid to or  accrued,  for the years ended
December 31, 1998, 1997 and 1996.

For the years ended December 31, 1998, 1997 and 1996 the  Partnership  allocated
to the General Partner unaudited taxable income (losses) of $872, $(120,227) and
$(104,578),  respectively.  See  Note 4 of  Notes to  Financial  Statements  for
additional  information  about  transactions  between  the  Partnership  and the
General Partner and its affiliates.

Item 12.   Unit Ownership of Certain Beneficial Owners and Management.

           (a)  Unit Ownership of Certain Beneficial Owners.

No person or group is known by the  Partnership  to be the  beneficial  owner of
more  than 5% of the  outstanding  Units  at March  15,  1999.  Pursuant  to the
Partnership  Agreement,  the voting  rights of the Limited  Partners are limited
and, in some circumstances, are subject to the prior receipt of certain opinions
of counsel or judicial decisions.

Under  the  Partnership  Agreement,  the  right to manage  the  business  of the
Partnership is vested solely in the General  Partner,  although the consent of a
majority in interest  of the  Limited  Partners is required  for the sale at one
time of all or substantially all of the Partnership's assets and with respect to
certain other matters. See Item 1 above for a description of the General Partner
and its general partners.

           (b)  Unit Ownership of Management.

No  director  or  executive  officer of PAS,  Boston  Capital  Planning or their
affiliates had any beneficial  ownership of Units as of March 15, 1999. However,
a former Vice President of Boston Capital Planning  purchased 20 Units ($20,000)
in the Partnership  during 1989. No officer or director of PAS or Boston Capital
Planning,  nor any  general  partner of the  General  Partner,  nor any of their
respective affiliates, possesses the right to acquire Units.

           (c) Change in Control.

There exists no arrangement  known to the Partnership  which may at a subsequent
date result in a change in control of the Partnership.

Item 13.   Certain Relationships and Related Transactions.

See Note 4 of Notes to Financial  Statements for information about  transactions
between the Partnership and the General Partner and its affiliates.



























                                 PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

    (a) The following documents are filed as part of this report:

    1.     Financial  Statements  - The  Financial  Statements  listed on the
           accompanying  Index to  Financial  Statements  and  Schedules  are
           filed as part of this Annual Report.

    2.     Financial  Statement  Schedules - The Financial  Statement  Schedules
           listed on the accompanying Index to Financial  Statements is filed as
           part of this Annual Report.

    3.     Exhibits - The Exhibits listed on the accompanying  Index to Exhibits
           are filed as part of this  Annual  Report  and  incorporated  in this
           Annual Report as set forth in said Index.

    (b)    Reports  on Form  8-K - The  Partnership  did not  file  any  Current
           Reports on Form 8-K during the fourth quarter of 1998.


<PAGE>


                               SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.

                  HISTORIC PRESERVATION PROPERTIES 1989
                  LIMITED PARTNERSHIP

                  By:   Boston Historic Partners Limited
                         Partnership, General Partner

                        By:  Portfolio Advisory Services,
                             Inc., General Partner

Date:  March 15, 1999             By:  /s/Terrence P. Sullivan 
                                       Terrence P. Sullivan,
                                       President

                        and


Date:  March 15, 1999             By:  /s/Terrence P. Sullivan
                                       Terrence P. Sullivan,
                                       General Partner


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following  persons on behalf of the Registrant and in the
capacities and on the dates indicated.

Signature                    Title


                             Individual General Partner of Boston
                             Historic Partners Limited
/s/Terrence P. Sullivan      Partnership and President, Principal
Terrence P. Sullivan         Executive Officer and Director of
                             Portfolio Advisory Services, Inc.,
Date: March 15, 1999         General Partner of Boston Historic
                             Partners Limited Partnership.

                             Principal Financial and Principal
                             Accounting Officer of Portfolio
/s/Terrence P. Sullivan      Advisory Services, Inc., General
Terrence P. Sullivan         Partner of Boston Historic Partners
                             Limited Partnership
Date: March 15, 1999




<PAGE>


Supplemental  Information  to be  Furnished  with Reports  Filed  Pursuant to
Section  15(d)  of  the  Act  by   Registrants   Which  Have  Not  Registered
Securities Pursuant to Section 12 of the Act.

An annual report will be furnished to Unit holders  subsequent to filing of this
Form 10-K.









                 SECURITIES AND EXCHANGE COMMISSION

                       Washington, D.C.  20549

                              FORM 10-K

            Annual Report Pursuant to Section 13 or 15(d)
               of the Securities Exchange Act of 1934

      Historic Preservation Properties 1989 Limited Partnership




                              EXHIBITS


<PAGE>


      HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP

                          Index to Exhibits

Exhibit No.                         Title of Documents

    3(a)                  Certificate   of  Limited   Partnership   of  Historic
                          Preservation Properties 1989 Limited Partnership dated
                          as of August  30,  1988  (filed as an  exhibit  to the
                          Partnership's  Registration  Statement  of Form  S-11,
                          File No. 33-24129, and incorporated herein by
                          this reference).

    3(b)                  Agreement   of   Limited   Partnership   of   Historic
                          Preservation Properties 1989 Limited Partnership dated
                          as of August  30,  1988  (filed as an  exhibit  to the
                          Partnership's  Registration  Statement  on Form  S-11,
                          File No. 33-24129, and incorporated herein by
                          this reference).

    3(c)                  Amended   and    Restated    Agreement   of   Limited
                          Partnership of Historic Preservation  Properties 1989
                          Limited  Partnership  dated as of December  19, 1988,
                          as  currently  in  effect,   other  than   amendments
                          thereto  which  provide  solely for the  admission or
                          withdrawal  of investors  as limited  partners of the
                          Partnership    (filed   as   an    exhibit   to   the
                          Partnership's  Registration  Statement  of Form S-11,
                          File No.  33-2419,  and  incorporated  herein by this
                          reference).

    4(a) See Exhibits 3(a), 3(b) and 3(c).

   10(a)                  Sales Agency Agreement  between Historic  Preservation
                          Properties  1989  Limited  Partnership  and Boston Bay
                          Capital,  Inc.,  dated  December  19,  1989  (filed as
                          Exhibit No. 10(a) to the Partnership's Form 10-K as of
                          December  31,  1989 and  incorporated  herein  by this
                          reference).

   10(b)                  Escrow Deposit Agreement between Historic Preservation
                          Properties  1989 Limited  Partnership  and  Wainwright
                          Bank and Trust Company dated  December 19, 1989 (filed
                          as Exhibit No. 10(b) to the Partnership's Form 10-K as
                          of December 31, 1989 and  incorporated  herein by this
                          reference).


<PAGE>


                          Index to Exhibits

                             (Continued)

Exhibit No.                         Title of Documents






   10(c)                  Documents  relating  to the  acquisition  of a general
                          partnership   interest  in  Jenkins  Court  Associates
                          Limited  Partnership  (filed as part of Post-Effective
                          Amendment  No.  1 to  the  Partnership's  Registration
                          Statement  of  Form  S-11,  File  No.  33-24129,   and
                          incorporated herein by this reference).

   10(d)                  Documents  relating  to the  acquisition  of a general
                          partnership  interest  in  Portland  Lofts  Associates
                          Limited  Partnership  (filed as part of Post-Effective
                          Amendment  No.  2 to  the  Partnership's  Registration
                          Statement  on  Form  S-11,  File  No.  33-24129,   and
                          incorporated herein by this reference).

   10(e)                  Documents  relating  to the  acquisition  of a general
                          partnership  interest in 402 Julia  Street  Associates
                          Limited Partnership (filed as a part of Post-Effective
                          Amendment  No.  2 to  the  Partnership's  Registration
                          Statement  on  Form  S-11,  File  No.  33024129,   and
                          incorporated by this reference).

   10(f)                  Documents   relating  to  the   acquisition   of  the
                          Cosmopolitan Building, St. Paul, Minnesota.

                               I.   Purchase   and   Sale   Agreement   between
                                    Historic   Landmarks  Realty  Growth  Fund:
                                    The   Cosmopolitan   (the   "Seller"),   as
                                    Seller,    and    Historic     Preservation
                                    Properties  1989 Limited  Partnership  (the
                                    "Partnership"),   as  Buyer,  dated  as  of
                                    July   14,   1989   (filed   as   part   of
                                    Post-Effective   Amendment  No.  2  to  the
                                    Partnership's   Registration  Statement  on
                                    Form   S-11,   File   No.   33-24129,   and
                                    incorporated herein by this reference).

                               II.  Amendment  to  Purchase  and Sale  Agreement
                                    dated  September,  1989,  between the Seller
                                    and the  Partnership  (filed as Exhibit  No.
                                    10(f) to the  Partnership's  Form 10-K as of
                                    December 31, 1989 and incorporated herein by
                                    this reference).

                               III. Loan  Agreement   dated  December  18,  1989
                                    between the  Partnership and Meritor Savings
                                    Bank  (filed  as  Exhibit  No.  10(f) to the
                                    Partnership's  Form 10-K as of December  31,
                                    1989  and   incorporated   herein   by  this
                                    reference).

                               IV.  Allonge to First  Loan Note and Second  Loan
                                    Note dated  December 18,  1989,  between the
                                    Partnership  and Meritor Savings Bank (filed
                                    as Exhibit  No.  10(f) to the  Partnership's
                                    Form  10-K  as  of  December  31,  1989  and
                                    incorporated herein by this reference).

                               V.   Mortgage,        Security        Agreement,
                                    Modification,  Consolidation  and Amendment
                                    Agreement    dated   December   18,   1989,
                                    between   the   Partnership   and   Meritor
                                    Savings  Bank (filed as Exhibit  No.  10(f)
                                    to  the  Partnership's   Form  10-K  as  of
                                    December 31, 1989 and  incorporated  herein
                                    by this reference).

                               VI.  Security  Agreement  dated December 18, 1989
                                    between the  Partnership and Meritor Savings
                                    Bank  (filed  as  Exhibit  No.  10(f) to the
                                    Partnership's  Form 10-K as of December  31,
                                    1989  and   incorporated   herein   by  this
                                    reference).

                               VII. Assignment  of  Leases,   Consolidation  and
                                    Modification  Agreement  dated  December 18,
                                    1989  between  the  Partnership  and Meritor
                                    Savings  Bank (filed as Exhibit No. 10(f) to
                                    the  Partnership's  Form 10-K as of December
                                    31,  1989 and  incorporated  herein  by this
                                    reference).

                               VIII.Assignment  of  Depository   accounts  dated
                                    December  18, 1989  between the  Partnership
                                    and Meritor  Savings  Bank (filed as Exhibit
                                    No. 10(f) to the Partnership's  Form 10-K as
                                    of December 31, 1989 and incorporated herein
                                    by this reference).

                               IX.  Assignment     and     Subordination     of
                                    Management  and Leasing  Consolidation  and
                                    Modification  Agreement  dated December 18,
                                    1989  between the  Partnership  and Meritor
                                    Savings  Bank (filed as Exhibit  No.  10(f)
                                    to  the  Partnership's   Form  10-K  as  of
                                    December 31, 1989 and  incorporated  herein
                                    by this reference).


                               X.   Management and Leasing Agreement dated as of
                                    October 17, 1989 between the Partnership and
                                    McKenna  Management   Associates  (filed  as
                                    Exhibit 10(f) to the Partnership's Form 10-K
                                    as of  December  31,  1989 and  incorporated
                                    herein by this reference).

   10(g)                  Documents  relating  to  $400,000  loan  to  Portland
                          Lofts Associated Limited Partnership

                               I.   Promissory  Note,  dated December 29, 1989,
                                    delivered  by  Portland  Lofts   Associates
                                    Limited      Partnership     to     Capital
                                    Consultants,  Inc.  (filed as Exhibit 10(g)
                                    to  the  Partnership's   Form  10-K  as  of
                                    December 31, 1989 and  incorporated  herein
                                    by this reference).

                               II.  Deed of Trust and Security  Agreement  dated
                                    December 29, 1989,  between  Portland  Lofts
                                    Associates  Limited  Partnership and Capital
                                    Consultants,  Inc.  (filed  as  Exhibit  No.
                                    10(g) to the  Partnership's  Form 10-K as of
                                    December 31, 1989 and incorporated herein by
                                    this reference).

                               III. Assignment  of Surplus  dated  December  29,
                                    1989,  delivered  by Joseph W.  Angel II and
                                    Lynne I. Angel to Capital Consultants,  Inc.
                                    (filed   as   Exhibit   No.   10(g)  to  the
                                    Partnership's  Form 10-K as of December  31,
                                    1989  and   incorporated   herein   by  this
                                    reference).

                               IV.  Guaranty  of Note and  Deed of  Trust  dated
                                    December  29,  1989,  delivered by Joseph W.
                                    Angel II and  Dennis M.  Gilman  to  Capital
                                    Consultants,  Inc.  (filed  as  Exhibit  No.
                                    10(g) to the  Partnership's  Form 10-K as of
                                    December 31, 1989 and incorporated herein by
                                    this reference).

   10(h)                  Management  Agreement  dated  August 20, 1989  between
                          Portland  Lofts  Associates  Limited  Partnership  and
                          Great Northwest Management (filed as Exhibit No. 10(h)
                          to the Partnership's Form 10-K as of December 31, 1989
                          and incorporated herein by this reference).

   10(i)                  Documents  relating to  Settlement  of Fleet  National
                          Bank  Loan  to  Jenkins   Court   Associates   Limited
                          Partnership (all dated as of February 7, 1991).

                               I.   Settlement  Agreement between Fleet National
                                    Bank ("Fleet") and Jenkins Court  Associates
                                    Limited Partnership ("Jenkins Court") (filed
                                    as Exhibit  No.  10(i) to the  Partnership's
                                    Form  10-K  as  of  December  31,  1991  and
                                    incorporated herein by this reference).

                               II.  Agreement  between  Fleet and Jenkins  Court
                                    (filed   as   Exhibit   No.   10(i)  to  the
                                    Partnership's  Form 10-K as of December  31,
                                    1991 and incorporated herein by this
                                    reference).

                               III. $250,000  Promissory  Note of Jenkins Court
                                    (filed  as   Exhibit   No.   10(i)  to  the
                                    Partnership's  Form  10-K  as  of  December
                                    31,  1991 and  incorporated  herein by this
                                    reference).

                               IV.  $20,820,000  Amended and Restated Promissory
                                    Note of Jenkins  Court (filed as Exhibit No.
                                    10(i) to the  Partnership's  Form 10-K as of
                                    December 31, 1991 and incorporated herein by
                                    this reference).

                               V.   Open  End  Mortgage  Modification  Agreement
                                    between  Fleet and Jenkins  Court  (filed as
                                    Exhibit No. 10(i) to the Partnership's  Form
                                    10-K   as   of   December   31,   1991   and
                                    incorporated herein by this reference).

                               VI.  Assignment  Modification  Agreement  between
                                    Fleet and  Jenkins  Court  (filed as Exhibit
                                    No. 10(i) to the Partnership's  Form 10-K as
                                    of December 31, 1991 and incorporated herein
                                    by this reference).

   10(j)                  Documents  relating  to Amended  Settlement  of Fleet
                          Loan to Jenkins  Court  (all dated as of January  29,
                          1992).

                               I.   First   Amended  and  Restated   Settlement
                                    Agreement  between  Fleet and Jenkins Court
                                    (filed  as   Exhibit   No.   10(j)  to  the
                                    Partnership's  Form  10-K  as  of  December
                                    31,  1991 and  incorporated  herein by this
                                    reference).

                               II.  First   Allonge  to  Amended  and   Restated
                                    Promissory  Note of Jenkins  Court (filed as
                                    Exhibit No. 10(j) to the Partnership's  Form
                                    10-K   as   of   December   31,   1991   and
                                    incorporated herein by this reference).

                               III. Open  End  Mortgage  Modification  Agreement
                                    between  Fleet and Jenkins  Court  (filed as
                                    Exhibit No. 10(j) to the Partnership's  Form
                                    10-K   as   of   December   31,   1991   and
                                    incorporated herein by this reference).

                               IV.  Assignment  Modification  Agreement  between
                                    Fleet and  Jenkins  Court  (filed as Exhibit
                                    No. 10(j) to the Partnership's  Form 10-K as
                                    of December 31, 1991 and incorporated herein
                                    by this reference).

                               V.   Closing  Letter  between  Fleet and Jenkins
                                    Court  (filed as Exhibit  No.  10(j) to the
                                    Partnership's  Form  10-K  as  of  December
                                    31,  1991 and  incorporated  herein by this
                                    reference).

   10(k)                  Agreement  for  Extension of Debt and Related  Matters
                          between Security  Pacific Bank Oregon,  Portland Lofts
                          Associates Limited Partnership and Joseph W. Angel, II
                          dated May 7, 1991 (filed as Exhibit  No.  10(k) to the
                          Partnership's  Form 10-K as of  December  31, 1991 and
                          incorporated herein by this reference).

   10(l)                  Documents  related to the Second  Amended  Settlement
                          of Fleet  Loan to Jenkins  Court  dated as of July 2,
                          1992.
                               I.   Second  Amended  and  Restated   Settlement
                                    Agreement  between  Fleet and Jenkins Court
                                    (filed  as   Exhibit   No.   10(l)  to  the
                                    Partnership's  Form  10-K  as  of  December
                                    31,  1992 and  incorporated  herein by this
                                    reference).

10(m)                     Documents   relating   to  the   Amended   $6,800,000
                          Construction   Loan  to  Portland  Lofts   Associates
                          Limited Partnership (all dated as of March 31, 1992).

                               I.   Promissory   Note  of   Portland   Lofts  to
                                    Security   Pacific  Bank  Oregon   (Security
                                    Pacific)  (now  Bank of  America)  (filed as
                                    Exhibit No. 10(m) to the Partnership's  Form
                                    10-K   as   of   December   31,   1992   and
                                    incorporated herein by this reference).

                               II.  Deed of Trust and Security Agreement between
                                    Portland  Lofts and Security  Pacific (filed
                                    as Exhibit  No.  10(m) to the  Partnership's
                                    Form  10-K  as  of  December  31,  1992  and
                                    incorporated herein by this reference).

                               III. Assignment   of   Leases   and   Conditional
                                    Assignment  of Rentals by Portland  Lofts to
                                    Security Pacific (filed as Exhibit No. 10(m)
                                    to  the   Partnership's   Form  10-K  as  of
                                    December 31, 1992 and incorporated herein by
                                    this reference).

                               IV.  Guarantees   of  Note  and  Deed  of  Trust
                                    delivered by East Bank  Development,  Inc.,
                                    Joseph W. Angel,  II,  Dennis M. Gilman and
                                    Martin  J.  Soloway  to  Security   Pacific
                                    (filed  as   Exhibit   No.   10(m)  to  the
                                    Partnership's  Form  10-K  as  of  December
                                    31,  1992 and  incorporated  herein by this
                                    reference).

                               V.   Arbitration Agreement between Portland Lofts
                                    and Security  Pacific  (filed as Exhibit No.
                                    10(m) to the  Partnership's  Form 10-K as of
                                    December 31, 1992 and incorporated herein by
                                    this reference).

   10(n)                  Management  Agreement  dated  April  1,  1992  between
                          Portland Lofts Associates Limited  Partnership and C &
                          R  Realty   (filed  as  Exhibit   No.   10(n)  to  the
                          Partnership's  Form 10-K as of  December  31, 1992 and
                          incorporated herein by this reference).

   10(o)                  Documents  relating  to the sale of a portion  of the
                          general  partnership  interest  in 402  Julia  Street
                          Associates  Limited  Partnership (all dated September
                          16, 1993)

                               I.   Second Amendment to the Amended and Restated
                                    Agreement  of  Limited  Partnership  of  402
                                    Julia Street Associates Limited  Partnership
                                    (filed   as   Exhibit   No.   10(o)  to  the
                                    Partnership's  Form 10-K as of December  31,
                                    1993  and   incorporated   herein   by  this
                                    reference).

                               II.  Assignment and Assumption  Agreement between
                                    the Partnership, and Henry M. Lambert and R.
                                    Carey Bond.  (filed as Exhibit No.  10(o) to
                                    the  Partnership's  Form 10-K as of December
                                    31,  1993 and  incorporated  herein  by this
                                    reference).

                               III. Security  Agreement between the Partnership,
                                    and  Lambert  and Bond (filed as Exhibit No.
                                    10(o) to the  Partnership's  Form 10-K as of
                                    December 31, 1993 and incorporated herein by
                                    this reference).

   10(p)                  Agreement  for  Extension  of Loan from  Fleet Bank to
                          Jenkins Court Associates Limited Partnership (dated as
                          of June 15,  1993)  (filed as Exhibit No. 10(p) to the
                          Partnership's  Form 10-K as of  December  31, 1993 and
                          incorporated herein by this reference).

   10(q)                  Agreement   for   Extension   of  Loan  from  Capital
                          Consultants,   Inc.  to  Portland  Lofts   Associates
                          Limited  Partnership  (dated  January 3, 1994) (filed
                          as Exhibit No. 10(q) to the  Partnership's  Form 10-K
                          as of December  31, 1993 and  incorporated  herein by
                          this reference).

   10(r)                  Documents  relating to the  $15,000  loan to Portland
                          Lofts  Associates  Limited   Partnership  (all  dated
                          March 2, 1992)

                               I.   Rehabilitation    Loan   Agreement   between
                                    Portland  Lofts  and the  City  of  Portland
                                    (acting   by  and   through   the   Portland
                                    Development  Commission)  (filed as  Exhibit
                                    No. 10(r) to the Partnership's  Form 10-K as
                                    of December 31, 1993 and incorporated herein
                                    by this reference).

                               II.  Promissory  Note between  Portland Lofts and
                                    the City of Portland  (acting by and through
                                    the Portland Development  Commission) (filed
                                    as Exhibit  No.  10(r) to the  Partnership's
                                    Form  10-K  as  of  December  31,  1993  and
                                    incorporated herein by this reference).

                               III. Trust Deed  between  Portland  Lofts and the
                                    City of Portland  (acting by and through the
                                    Portland  Development  Commission) (filed as
                                    Exhibit No. 10(r) to the Partnership's  Form
                                    10-K   as   of   December   31,   1993   and
                                    incorporated herein by this reference).

10(s)                     Documents   relating  to  the  settlement  of  amounts
                          payable between Portland Lofts and Richard E.
                          Ragland, AIA

                               I.   Letter of agreement signed by Portland Lofts
                                    and Ragland (dated March 17, 1994) (filed as
                                    Exhibit No. 10(s) to the Partnership's  Form
                                    10-K   as   of   December   31,   1993   and
                                    incorporated herein by this
                                    reference).

                               II.  Promissory  Note between  Portland Lofts and
                                    Ragland (dated  February 22, 1994) (filed as
                                    Exhibit No. 10(s) to the Partnership's  Form
                                    10-K   as   of   December   31,   1993   and
                                    incorporated herein by this
                                    reference).
                               III. Release of Claims between Portland Lofts and
                                    Ragland (dated  February 22, 1994) (filed as
                                    Exhibit No. 10(s) to the Partnership's  Form
                                    10-K   as   of   December   31,   1993   and
                                    incorporated herein by this
                                    reference).

                               IV.  Release of All Claims  between  Ragland  and
                                    Portland  Lofts (dated March 1, 1994) (filed
                                    as Exhibit  No.  10(s) to the  Partnership's
                                    Form  10-K  as  of  December  31,  1993  and
                                    incorporated herein by this
                                    reference).

   10(t)                  Documents  relating to the amendment of loan documents
                          by and between Historic  Preservation  Properties 1989
                          Limited  Partnership  and Mellon Bank, N.A. (all dated
                          December  28,  1994,  but  executed  January 4, 1995),
                          (filed as Exhibit 10(t) to the Partnership's Form 10-K
                          as of December 31, 1994 and incorporated herein by the
                          reference).

                               I.   First   Amendment  to  Note   Mortgage  and
                              Assignment of Leases.

                               II.  Second Amendment to Loan Agreement

                               III. Letter Agreement on Payment of Legal Fees

   10(u)                  Letter  Agreement  on  Management   Functions  by  and
                          between Historic Preservation  Properties 1989 Limited
                          Partnership  and  Jenkins  Court   Investors   Limited
                          Partnership  (dated  September  8,  1994),  (filed  as
                          Exhibit  10(u) to the  Partnership's  Form  10-K as of
                          December  31,  1994 and  incorporated  herein  by this
                          reference).

  10(v)                   Stipulation  of Settlement,  and Transfer Deed,  dated
                          August 31, 1995, by and among Jenkins Court Associates
                          Limited  Partnership,  Miles S. Katzen,  Jenkins Court
                          Investors Limited Partnership,  MSK Associates,  Inc.,
                          Jane Katzen,  Frank  Seidman,  the Jane II Corporation
                          and Jenkins Court  Pennsylvania L.P, (filed as Exhibit
                          10(v) to the  Partnership's  Form 10-K as of  December
                          31, 1995 and incorporated herein by this reference).

  10(w)                   Asset Management Agreement,  dated October 1, 1995, by
                          and among  Historic  Preservation  Properties  Limited
                          Partnership,  Historic  Preservation  Properties  1988
                          Limited Partnership,  Historic Preservation Properties
                          1989  Limited   Partnership,   Historic   Preservation
                          Properties  1990 L.P.  Tax Credit  Fund and  Claremont
                          Management Corporation, (filed as Exhibit 10(w) to the
                          Partnership's  Form 10-K as of  December  31, 1995 and
                          incorporated herein by this reference).

  10(x)                   Property Management Agreement, dated November 1, 1995,
                          by and between Historic  Preservation  Properties 1989
                          L.P. and Claremont Management  Corporation,  (filed as
                          Exhibit  10(x) to the  Partnership's  Form  10-K as of
                          December  31,  1995 and  incorporated  herein  by this
                          reference).

   10 (y)                 First  Amendment  to Loan  Documents,  dated  June 1,
                          1995,  by  and  between   Portland  Lofts  Associates
                          Limited  Partnership and Capital  Consultants,  Inc.,
                          (filed as  Exhibit  10(y) to the  Partnership's  Form
                          10-K as of December 31, 1995 and incorporated  herein
                          by this reference).

  10 (z)                 Documents  relating  to the  organization  and 
                          management  of The Cosmopolitan at Mears  Park, LLC.
                          1996 (filed as Exhibit  10(z)  to  the Partnership's
                          Form 10-K as of December 31, 1996 and incorporated  
                          herein by this reference).

                          I.   Operating  Agreement of the Cosmopolitan at Mears
                               Park, LLC, dated March 15, 1996 (filed as Exhibit
                               10(z)  to  the  Partnership's  Form  10-K  as  of
                               December 31, 1996 and incorporated herein by this
                               reference).

                          II.  Management  Agreement between The Cosmopolitan at
                               Mears   Park,   LLC  and   Claremont   Management
                               Corporation,  dated  March  20,  1996  (filed  as
                               Exhibit 10 (z) to the Partnership's  Form 10-K as
                               of December 31, 1996 and  incorporated  herein by
                               this reference).

  10 (aa)                 Documents   relating  to  the   refinancing   of  The
                          Cosmopolitan   at  Mears  Park,  LLC  Mortgage  Debt.
                          (filed as Exhibit 10 (aa) to the  Partnership's  Form
                          10-K as of December 31, 1996 and incorporated  herein
                          by this reference).

                          I.   Promissory Note between the Cosmopolitan at Mears
                               Park, LLC and Heller Financial, Inc., dated March
                               20,  1996  (filed  as  Exhibit  10  (aa)  to  the
                               Partnership's  Form 10-K as of December  31, 1996
                               and incorporated herein by this reference).

                          II.  Mortgage,   Assignment   of  Rents  and  Security
                               Agreement between the Cosmopolitan at Mears Park,
                               LLC and Heller  Financial,  Inc., dated March 20,
                               1996   (filed   as   Exhibit   10   (aa)  to  the
                               Partnership's  Form 10-K as of December  31, 1996
                               and incorporated herein by this reference).

                          III. Letter  Agreement   between  Patrick  Carney  and
                               Heller Financial regarding Personal Liability for
                               carve-outs to  non-recourse  language dated March
                               20,  1996  (filed  as  Exhibit  10  (aa)  to  the
                               Partnership's  Form 10-K as of December  31, 1996
                               and incorporated herein by this reference).

  10 (bb)                 Settlement  Agreement  of  the  Amended  Construction
                          Loan to Portland  Lofts  Associates,  L.P.,  (Amended
                          Construction  Loan  Agreement  filed as  Exhibit  No.
                          10(m) to the  Partnership's  Form 10-K as of December
                          31,   1992)   (filed  as   Exhibit  10  (bb)  to  the
                          Partnership's  Form 10-K as of December  31, 1996 and
                          incorporated herein by this reference).

  10 (cc)                 Documents   relating  to  the   refinancing   of  the
                          Portland Lofts  Associates,  L.P. Mortgage Debt, (all
                          dated as of June 20, 1996).

                          I.   Promissory    Note   between    Portland    Lofts
                               Associates,  L.P.  and  Bank  of  America  Oregon
                               (filed as Exhibit 10 Form 10-K as of December 31,
                               1996 and incorporated herein by this reference).

                          II.  The  Standing  Loan  Agreement  between  Portland
                               Lofts Associates, L.P. and Bank of America Oregon
                               (filed as  Exhibit  10 (cc) to the  Partnership's
                               Form   10-K  as  of   December   31,   1996   and
                               incorporated herein by this reference).

                          III. The Deed of  Trust,  with  Assignment  of  Rents,
                               Security  Agreement  and Fixture  Filing  between
                               Portland  Lofts  Associates,  L.P.  and  Bank  of
                               America  Oregon  (filed as Exhibit 10 (cc) to the
                               Partnership's  Form 10-K as of December  31, 1996
                               and incorporated herein by this reference).

                          IV.  The Payment  Guaranty between Joseph W. Angel, II
                               and Bank of America  Oregon  (filed as Exhibit 10
                               (cc)  to  the  Partnership's   Form  10-K  as  of
                               December 31, 1996 and incorporated herein by this
                               reference).

                          V.   The Payment  Guaranty  between Lynne I. Angel and
                               Bank of America  Oregon (filed as Exhibit 10 (cc)
                               to the Partnership's Form 10-K as of December 31,
                               1996 and incorporated herein by this reference).

   10 (dd)                Promissory  Note between  Portland  Loft  Associates,
                          L.P.  and  Joseph   Angel  and  Lynne  Angel,   dated
                          December  18,  1996  (filed as Exhibit 10 (dd) to the
                          Partnership's  Form 10-K as of December  31, 1996 and
                          incorporated herein by this reference).

   10 (ee)                Forbearance  Agreement between Historic  Preservation
                          Properties  1989,  L.P.  and East  Bank  Angel  Joint
                          Venture,  dated July 1, 1997 (filed as Exhibit 10(ee)
                          to the  Partnership's  Form 10-K as of  December  31,
                          1997 and incorporated herein by this reference).

   10 (ff)                Asset   Management    agreement    between   Historic
                          Preservation   Properties   1989,   L.P.   and   Gunn
                          Financial Incorporated, dated July 1, 1998.

   10 (gg)                Documents  relating  to the  refinancing  of 402
                          Julia Street  Associates,  L.P.'s Mortgage Debt, dated
                          July 9, 1998.

                          I.  Multifamily Note between 402 Julia Street 
                              Associates, L.P.'s and Investment Property 
                              Mortgage,  L.L.C.


                          II. Multifamily Mortgage, Assignment of Rents and
                              Security Agreement between 402 Julia Street and
                              Investment Property Mortgage L.L.C.

   22                     List of Investee  Partnerships  (filed as Exhibit No.
                          22 to the Partnership's  Form 10-K as of December 31,
                          1989 and incorporated herein by this reference).

   28(ii)(a)              Pages  13-25,  28-36  and  36-39 of the  Partnership's
                          Prospectus  dated  December  19,  1988 (filed with the
                          Commission  pursuant to Rule 424(b) on January 5, 1989
                          and incorporated herein by this reference).

   28(ii)(b)              Supplement  No.  1 to  the  Partnership's  Prospectus
                          dated   January   20,   1989  (filed  as  a  part  of
                          Post-Effective  Amendment No. 1 to the  Partnership's
                          Registration   Statement  on  Form  S-11,   File  No.
                          33-24129, and incorporated herein by this reference).






   28(ii)(c)              Supplement  No.  2 to  the  Partnership's  Prospectus
                          dated June 30, 1989 (filed as part of  Post-Effective
                          Amendment  No.  2 to the  Partnership's  Registration
                          Statement  on  Form  S-11,   File  No.  33-24129  and
                          incorporated herein by this reference).

   28(ii)(d)              Supplement  No.  3 to  the  Partnership's  Prospectus
                          dated   July   25,   1989   (filed   as  a  part   of
                          Post-Effective  Amendment No. 2 to the  Partnership's
                          Registration   Statement  on  Form  S-11,   File  No.
                          33-24129, and incorporated herein by this reference).

   28(ii)(e)              Supplement  No.  4 to  the  Partnership's  Prospectus
                          dated   September  13,  1989  (filed  as  a  part  of
                          Post-Effective  Amendment No. 2 to the  Partnership's
                          Registration   Statement  on  Form  S-11,   File  No.
                          33-24129, and incorporated herein by this reference).

   28(ii)(f)              Supplement  No.  5 to  the  Partnership's  Prospectus
                          dated   September  19,  1989  (filed  as  a  part  of
                          Post-Effective  Amendment No. 2 to the  Partnership's
                          Registration   Statement  on  Form  S-11,   File  No.
                          33-24129, and incorporated herein by this reference).














           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                             FINANCIAL STATEMENTS
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996





                          ANNUAL REPORT ON FORM 10-K

                      Items 14 (a) (1) and (2) and 14 (d)


                         INDEX TO FINANCIAL STATEMENTS


                                                                      Page

Financial Statements of Historic Preservation
  Properties 1989 Limited Partnership

   Independent Auditors' Report........................................F-4
   Balance Sheets as of December 31, 1998 and 1997.....................F-5
   Statements of Operations for the Years Ended
    December 31, 1998, 1997 and 1996...................................F-6
   Statements of Changes in Partners' Equity (Deficit) for the
    Years Ended December 31, 1998, 1997 and 1996.......................F-7
   Statements of Cash Flows for the Years Ended
    December 31, 1998, 1997 and 1996...................................F-8
   Notes to Financial Statements.......................................F-10
   Independent Auditors' Report on Accompanying Information............F-18
   Financial Statement Schedule:
    Real Estate and Accumulated Depreciation Held
       Directly and by Investee Entities...............................F-19

Financial Statements of The Cosmopolitan at Mears Park, LLC
  (the St. Paul, Minnesota
  Investee Entity)

   Independent Auditors' Report........................................F-21
   Balance Sheets as of December 31, 1998 and 1997.....................F-22
   Statements of Operations for the Years Ended December 31, 1998 
    and 1997 and for  the Period March 15, 1996 (Inception) through 
    December 31, 1996                                                  F-23
   Statements of Changes in Members' Equity (Deficit) for the Years 
    Ended December 31, 1998 and 1997 and the Period March 15, 1996
    (Inception) through December 31, 1996                              F-24
   Statements  of Cash Flows for the Years Ended  December 31, 1998
    and 1997 and for the Period March 15, 1996 (Inception) through 
    December 31, 1996                                                  F-25
   Notes to Financial Statements.......................................F-27

Financial Statements of Portland Lofts Associates
  Limited Partnership (the Portland, Oregon
  Investee Partnership)

   Independent Auditors' Report........................................F-32
   Balance Sheets as of December 31, 1998 and 1997.....................F-33
   Statements of Operations for the Years Ended
    December 31, 1998, 1997 and 1996...................................F-34
   Statements of Changes in Partners' Equity for the
    Years Ended December 31, 1998, 1997 and 1996.......................F-35
   Statements of Cash Flows for the Years Ended
    December 31, 1998, 1997 and 1996...................................F-36
   Notes to Financial Statements.......................................F-38





                                      F-2
                   INDEX TO FINANCIAL STATEMENTS (Continued)


                                                                       Page

Financial Statements of 402 Julia Street Associates
  Limited Partnership (the New Orleans, Louisiana
  Investee Partnership)

   Independent Auditors' Report........................................F-43
   Balance Sheets as of December 31, 1998 and 1997.....................F-44
   Statements of Operations for the Years Ended
    December 31, 1998, 1997 and 1996...................................F-45
   Statements of Changes in Partners' Equity (Deficit) for the
    Years Ended December 31, 1998, 1997 and 1996.......................F-46
   Statements of Cash Flows for the Years Ended
    December 31, 1998, 1997 and 1996...................................F-47
   Notes to Financial Statements.......................................F-48









































                                      F-3



                         INDEPENDENT AUDITORS' REPORT


The Partners
Historic Preservation Properties 1989 Limited Partnership
Boston, Massachusetts

We have  audited  the  accompanying  balance  sheets  of  Historic  Preservation
Properties 1989 Limited  Partnership  (the  Partnership) as of December 31, 1998
and 1997, and the related  statements of operations,  partners' equity (deficit)
and cash flows for the years then  ended.  These  financial  statements  are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

Because we were not engaged to audit the  statements of  operations,  changes in
partners'  equity (deficit) and cash flows for the year ended December 31, 1996,
we did not extend our auditing  procedures to enable us to express an opinion on
the results of operations,  changes in partners' equity (deficit) and cash flows
of Historic Preservation  Properties 1989 Limited Partnership for the year ended
December 31, 1996. Accordingly, we express no opinion on them.

In our opinion,  the  financial  statements  referred to in the first  paragraph
present fairly,  in all material  respects,  the financial  position of Historic
Preservation  Properties  1989 Limited  Partnership  as of December 31, 1998 and
1997,  and the results of its  operations  and its cash flows for the years then
ended in conformity with generally accepted accounting principles.


Lefkowitz, Garfinkel, Champi & DeRienzo P.C.

Providence, Rhode Island
February 16, 1999





















                                      F-4
<PAGE>

           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                                BALANCE SHEETS
                          DECEMBER 31, 1998 AND 1997


                                    ASSETS
                                                      1998           1997
                                                  -------------  --------------

INVESTMENTS IN INVESTEE ENTITIES                  $ 4,074,023     $ 4,000,210
   Less reserve for realization of investments
    in Investee Entities                           (3,469,267)     (3,469,267)
                                                  -------------  --------------
                                                      604,756         530,943

CASH EQUIVALENTS                                      170,981         175,288
OTHER ASSETS                                           73,350          77,505
                                                  -------------  --------------
                                                  $   849,087    $    783,736
                                                  =============  ==============


                       LIABILITIES AND PARTNERS' EQUITY

LIABILITIES
   Accounts payable and accrued expenses          $    38,342    $     33,562
                                                  -------------  --------------

        Total liabilities                              38,342          33,562
                                                  -------------  --------------

COMMITMENTS AND CONTINGENCIES (Notes 3 and 4)

PARTNERS' EQUITY
   Limited Partners' Equity - Units of  Investor
    Limited Partnership Interest, $1,000 stated
    value per Unit-Issued and outstanding 26,588
    units                                           1,033,973         974,008
    
   General Partner's Deficit                         (223,228)       (223,834)
                                                  -------------  --------------

        Total partners' equity                        810,745         750,174
                                                  -------------  --------------
                                                  $   849,087    $    783,736
                                                  =============  ==============















  The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>

           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


                                         1998       1997        1996
                                       ---------  ---------   ---------
                                                              (Unaudited)
REVENUE:
   Rental and related income             $      --    $      --    $   533,027
   Interest and other income                 6,667        8,912         19,368
                                         ---------    ---------    -----------
                                             6,667        8,912        552,395
                                         ---------    ---------    -----------

EXPENSES:
   Operating and administrative            215,621      164,308        177,397
   Property operating expenses:
      Other property operating                  --           --         57,709
      Management fees                           --           --         21,940
      Repairs and maintenance                   --           --         52,728
      Utilities                                 --           --         84,691
      Real estate taxes                         --           --         85,698
      Insurance                                 --           --          7,295
      Depreciation and amortization             --           --        124,804
                                         ---------    ---------    -----------
                                           215,621      164,308        612,262


PROVISION FOR IMPAIRMENT OF REAL
   ESTATE                                       --           --     (8,437,963)
                                         ---------    ---------    -----------


LOSS FROM OPERATIONS                      (208,954)    (155,396)    (8,497,830)


INTEREST EXPENSE                                --           --        508,073


EQUITY IN INCOME
   OF INVESTEE ENTITIES                    269,525       58,874        297,734
                                         ---------    ---------    -----------

NET INCOME (LOSS) BEFORE EXTRAORDINARY
   GAIN                                     60,571      (96,522)    (8,708,169)

EXTRAORDINARY GAIN ON
    EXTINGUISHMENT OF DEBT                      --           --      9,182,017
                                         ---------    ---------    -----------



NET INCOME (LOSS)                        $  60,571    $ (96,522)   $   473,848
                                         =========    =========    ===========

NET INCOME (LOSS) ALLOCATED
   TO GENERAL PARTNER                    $     606    $    (965)   $     4,738
                                         =========    =========    ===========

NET INCOME (LOSS) ALLOCATED
   TO LIMITED PARTNERS                   $  59,965    $ (95,557)   $   469,110
                                         =========    =========    ===========


NET   INCOME   (LOSS)   PER   UNIT  OF
INVESTOR LIMITED PARTNERSHIP   INTEREST,
BASED  ON 26,588 UNITS
ISSUED AND OUTSTANDING:

INCOME (LOSS) BEFORE  EXTRAORDINARY GAIN $   2.26     $  (3.59)    $  (324.25)

   EXTRAORDINARY GAIN                           -            -         341.89
                                         ---------    ---------    -----------

   NET INCOME (LOSS)                     $   2.26     $  (3.59)    $    17.64
                                         =========    =========    ===========



  The accompanying notes are an integral part of these financial statements.

                                      F-6
<PAGE>

           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                   STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 and 1996



                               Units of
                               Investor    Investor
                               Limited     Limited      General
                              Partnership  Partners'   Partner's
                                Interest     Equity     Deficit      Total
                               ---------   ---------  ----------  ----------

BALANCE, December 31, 1995
(Unaudited)                  26,588   $   600,455    $(227,607)   $ 372,848


   Net Income (Unaudited)        --       469,110        4,738      473,848
                             ------   -----------    ---------    ---------


BALANCE, December 31, 1996   26,588     1,069,565     (222,869)     846,696
(Unaudited)


  Net Loss                       --       (95,557)        (965)     (96,522)
                             ------   -----------    ---------    ---------

BALANCE, December 31,1997    26,588       974,008     (223,834)     750,174


  Net Income                     --        59,965          606       60,571
                             ------   -----------    ---------    ---------

BALANCE, December 31, 1998   26,588    $1,033,973     (223,228)     810,745
                             ======   ===========    =========    =========






















  The accompanying notes are an integral part of these financial statements.

                                      F-7
<PAGE>

           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                           STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

                                              1998        1997         1996
                                            ----------  ----------  ----------  
                                                                  (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                       $  60,571   $  (96,522) $  473,848
   Adjustments to reconcile net income
    (loss) to
    net cash provided by operating
       activities:
      Depreciation and amortization                -           -      124,804
      Amortization of discount on mortgage         -           -      233,893
    payable
      Provision for impairment of real
    estate at transfer of
         ownership interest in real estate         -           -    8,437,963
    to investee entity
      Extraordinary gain on extinguishment         -           -   (9,182,017)
    of debt
      Deferred interest expense added to
          the principal of mortgage                -           -       78,237
    payable
      Equity in income in investee
   entities (over) under
       distributions received                 (38,525)    97,126     (173,534)
      Decrease (increase) in other assets      4,155      23,650      (23,306)
      Increase (decrease) in accounts
payable and accrued expenses                   4,780     (12,282)      87,087
                                            ----------  ----------  -----------
Net cash provided by operating activities     30,981      11,972       56,975
                                            ----------  ----------  -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchase of furniture and equipment          -           -       (2,694)
      Cash payment at transfer of
   ownership interest in
       Investment in real estate to                -           -     (679,567)
   investee entity
      Contribution to investee entity        (35,288)          -            -
                                            ----------  ----------  -----------
        Cash used in investing activities    (35,288)          -     (682,261)
                                            ----------  ----------  -----------

NET INCREASE (DECREASE) IN CASH  .
AND CASH EQUIVALENTS                          (4,307)     11,972     (625,286)

CASH AND CASH EQUIVALENTS, BEGINNING OF     
YEAR                                         175,288     163,316      788,602
                                            ----------  ----------  -----------


CASH AND CASH EQUIVALENTS, END OF YEAR       170,981     175,288      163,316
                                          ==========  ==========  ===========


SUPPLEMENTAL CASH FLOW INFORMATION:
      Cash paid for interest                $      -    $      -    $ 301,349
                                            ==========  ==========  ===========














  The accompanying notes are an integral part of these financial statements.

                                      F-8
<PAGE>

           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                     STATEMENTS OF CASH FLOWS (CONTINUED)
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996



NON-CASH INVESTING ACTIVITY:

On March 15, 1996,  Historic  Preservation  Properties 1989 Limited  Partnership
contributed the following  assets and  liabilities to The  Cosmopolitan at Mears
Park, LLC:

        Land                               $     1,009,000
        Building and improvements                6,074,104
        Furniture and equipment                    200,994
        Cash and cash equivalents                  144,633
        Cash, security deposits                     94,093
        Real estate tax escrow                     168,416
        Rent receivable                              6,533
        Deferred financing fees                    233,397
        Mortgage note payable                   (7,650,000)
        Accounts payable and                     
         accrued expenses                         (184,799)
        Security deposits                          (96,371)

































  The accompanying notes are an integral part of these financial statements.

                                      F-9
<PAGE>

           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                            NOTES TO FINANCIAL STATEMENTS
                FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


(1)   Organization and General Partner - BHP

      Historic  Preservation  Properties 1989 Limited  Partnership  (HPP'89) was
      formed on  September 1, 1988 under the Delaware  Revised  Uniform  Limited
      Partnership  Act.  The  purpose  of HPP'89  is to invest in a  diversified
      portfolio of real  properties,  for which certain costs of  rehabilitation
      have  qualified  for  rehabilitation  tax  credits   (Rehabilitation   Tax
      Credits).

      Boston  Historic  Partners  Limited  Partnership  (BHP),  a  Massachusetts
      limited  partnership,  is the general partner of HPP'89. BHP was formed in
      November  1986 for the purpose of  organizing,  syndicating  and  managing
      publicly offered real estate limited partnerships  (Public  Rehabilitation
      Partnerships).  As of December 31, 1998,  BHP had  established  three such
      partnerships, including HPP'89. Officers of Boston Capital Planning Group,
      Inc.  (BCPG),  an affiliate of BHP, were the initial  limited  partners of
      HPP'89. The initial limited partners withdrew as limited partners upon the
      first admission of Investor Limited Partners (Limited Partners).  Prior to
      admission of the Limited Partners,  all costs incurred by HPP'89 were paid
      by BHP. On May 3, 1989, the first Limited Partners were admitted to HPP'89
      and operations commenced.

      The Amended and  Restated  Agreement of Limited  Partnership  (Partnership
      Agreement) of HPP'89 generally provides that all net profits,  net losses,
      tax  credits  and cash  distributions  of HPP'89  from  normal  operations
      subsequent to admission of Limited  Partners shall be allocated 99% to the
      Limited  Partners  and 1% to BHP.  Proceeds  from  sales  or  refinancings
      generally will be distributed 100% to the Limited Partners until they have
      received  an amount  equal to their  Adjusted  Capital  Contributions  (as
      defined  in  the  Partnership   Agreement)  plus,   priority  returns  and
      additional   incentive  priority  returns  for  certain  Limited  Partners
      admitted to HPP'89 on or prior to certain specified dates.

(2)   Summary of Significant Accounting Policies

      Investments in Investee Entities

      HPP'89  accounts  for  its  investments  in  its  four  investee  entities
      (Investee Entities) under the equity method. In general,  under the equity
      method of accounting for  investments,  the investment is recorded at cost
      and the  current  allocable  portion of  earnings  (losses) of an Investee
      Entity  is  recorded  as  income  (loss)  with  a  corresponding  increase
      (decrease) to the investment  account.  The allocable portion of losses of
      an  Investee  Entity  are not  recorded  after the  respective  investment
      account is reduced  to zero.  The  allocable  portion  of  earnings  of an
      Investee  Entity are not recorded until all previously  unrecorded  losses
      are absorbed.

      Distributions  received  are  recorded  as  reductions  to the  investment
      account.  Distributions  received from an Investee Entity whose respective
      investment account has been reduced to zero are recorded as income.

      Expenditures  attributable to HPP'89's investments  (primarily  evaluation
      and acquisition  fees and interest  expense  incurred during  construction
      periods) are treated as additional investment basis and are amortized on a
      straight-line  basis over the  estimated  life of the investee  assets (40
      years).

      Use of Estimates

      The  preparation  of financial  statements  in conformity  with  generally
      accepted  accounting  principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure  of  contingent  assets  and  liabilities  at the  date  of the
      financial  statements  and the  reported  amounts of revenue and  expenses
      during the  reporting  period.  Actual  results  could  differ  from those
      estimates.





                                     F-10
           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


(2)   Summary of Significant Accounting Policies (Continued)

      Investment in Real Estate and Depreciation

      Investment  in real  estate was held for lease and stated at cost  through
      the date of contribution to TCAMP (see Note 3).  Depreciation was computed
      on a  straight-line  basis over 40 years for real  property and over seven
      years for personal property.

      Cash, Cash Equivalents and Concentration of Credit Risk

      HPP'89  considers all highly liquid  investments  with a maturity of three
      months or less when purchased to be cash equivalents. At December 31, 1998
      and 1997, cash equivalents totaled $170,981 and $175,288, respectively.

      At  December  31,  1998 and 1997,  HPP'89 had  approximately  $71,000  and
      $77,600,  respectively, of cash equivalents on deposit in a bank in excess
      of amounts insured by the Federal Deposit Insurance Corporation.

      Deferred Evaluation and Acquisition Costs

      Expenditures  related  to the  direct  purchase  of real  estate  had been
      capitalized  and were being  amortized on a  straight-line  basis over the
      estimated  life  of real  property  (40  years)  through  the  date of the
      contribution of real estate to TCAMP (see Note 3).

      Rental Income

      Until March 15, 1996, HPP'89 had a direct ownership interest in a property
      located  in St.  Paul,  Minnesota  (see  Note  3).  Revenue  under  annual
      operating leases from that property was recorded when due.

      Income Taxes

      No provision  (benefit) for income taxes is reflected in the  accompanying
      financial statements of HPP'89.  Partners of HPP'89 are required to report
      on their tax  returns  their  allocable  share of income,  gains,  losses,
      deductions and credits determined on a tax basis.

      Reclassification

      Certain  amounts in the 1997 and 1996  statements  of cash flows have been
      reclassified to conform with the 1998 presentation.

(3)   Investments  in  Investee  Entities  and Real  Estate;  Commitments  and 
      Contingencies
  
      During  1989,  HPP'89  acquired  general  partnership  interests  in three
      Investee  Entities,  as well as a direct interest in a property located in
      St.  Paul,  Minnesota.  Each such  Investee  Entity  placed a property  in
      service in December 1989 and commenced initial leasing activity.

      As discussed below, in March 1996, HPP'89  contributed land,  building and
      improvements  and furniture and equipment  related to its property located
      in St. Paul,  Minnesota  (the  Cosmopolitan  Building),  and certain other
      assets and liabilities, to a limited liability company for a 50% ownership
      interest in the Investee Entity.

      HPP'89's current allocable percentage of operating income and/or losses in
      the  Investee  Entities  ranges  from  50% to 99%.  Each  of the  Investee
      Entities' agreements is different but, in general,  provides for a sharing
      of management  duties and decisions among HPP'89 and the respective  local
      general partners or

                                        F-11
           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


(3)   Investments  in  Investee  Entities  and Real  Estate;  Commitments  and 
      Contingencies (Continued)

      other managing members,  and certain  priorities to HPP'89 with respect to
      return on and return of  invested  capital.  Significant  Investee  Entity
      decisions  require  the  approval  of both  HPP'89  and the local  general
      partners or other managing members. In addition,  each Investee Entity has
      entered  into  various  agreements  with its  local  general  partners  or
      members, or their affiliates, to provide development, management and other
      services,  for which the local general partners or other members (or their
      affiliates), are paid fees by the respective Investee Entity.

      Following is a summary of information  regarding the Investee Entities and
      HPP'89's investments therein:

      Jenkins Court Associates Limited Partnership (Jenkins Court) is a Delaware
      limited  partnership  which was formed on  December  20,  1988 to acquire,
      construct,  rehabilitate, operate and manage a 144,000 net rentable square
      foot five-story building and 30,000 net rentable square feet of new retail
      space, including storage areas and parking facilities, located at Old York
      Road and Rydal Road, Jenkintown Borough, Pennsylvania.

      HPP'89 contributed  $6,563,064 through the date of Jenkins Court's Chapter
      11 filing (see  below) to the  capital of Jenkins  Court and had a general
      partnership  interest  therein.   HPP'89's  investment  in  Jenkins  Court
      represented  approximately  36%  of  the  aggregate  amount  which  HPP'89
      originally  contributed  to the  capital  of its three  Investee  Entities
      acquired   during  1989  and  to  purchase  its  direct  interest  in  the
      Cosmopolitan Building.

      On November  23,  1994,  Jenkins  Court filed a petition  for relief under
      Chapter 11 of the  federal  bankruptcy  laws in United  States  Bankruptcy
      Court for the  jurisdiction of the Eastern  District of  Pennsylvania.  On
      August 31, 1995, after maximum vesting of the remaining Rehabilitation Tax
      Credits had been achieved for 1995 and considering  the  unlikelihood of a
      successful plan of  reorganization,  Jenkins Court and the mortgage holder
      entered into a settlement  agreement under which Jenkins Court transferred
      the deed and title of the  property to the mortgage  holder.  The mortgage
      holder   released   Jenkins  Court  and  its  guarantors  for  the  entire
      indebtedness,   and  Jenkins  Court   received   $25,000  to  pay  certain
      professional fees incurred during the bankruptcy proceedings. The transfer
      of deed and title of the  property to the  mortgage  holder  resulted in a
      recapture of  Rehabilitation  Tax Credits in 1995 of $44,451 to HPP'89, of
      which $44,007 was allocated to the Limited Partners of HPP'89. Tax credits
      allocated  to the Limited  Partners  of HPP'89  totaling  $2,758,113  were
      vested  on or  before  June 15,  1995.  Therefore,  98.4%  of the  Limited
      Partners' tax credits were vested prior to the loss of the property.

      Although Jenkins Court no longer owns investment  property or has property
      operations  after  August 31, 1995,  the Jenkins  Court  partnership  will
      remain in existence until the resolution of certain partnership assets and
      liabilities.   Partnership  assets  include   approximately   $312,000  of
      unsecured  receivables  from the developer and its  affiliates  which have
      been  fully  reserved  for at  December  31,  1998 and  1997;  partnership
      liabilities  include  approximately  $94,000 of trade  payables which have
      been fully  reserved  for at December  31, 1998 and 1997 since HPP'89 does
      not believe such amount will be recourse to HPP'89,  as well as a $250,000
      default  loan and  accrued  interest  thereon  which had been  provided by
      HPP'89 and secured by the developer's  interest in an unaffiliated limited
      partnership.

      402 Julia Street Associates Limited  Partnership (402 Julia) is a Delaware
      limited  partnership  formed  on  July  25,  1989 to  acquire,  construct,
      rehabilitate,  operate  and  manage  a  19,000  square  foot  site and the
      building  situated  thereon  and to  rehabilitate  the  building  into  24
      residential  units and  approximately  3,500 net  rentable  square feet of
      commercial  space  located  thereon  at 402  Julia  Street,  New  Orleans,
      Louisiana.  At December 31, 1998, 402 Julia had leased 100% (unaudited) of
      its residential units and commercial space.

      HPP'89  originally  contributed  $775,000  to the capital of 402 Julia and
      owns a general partnership interest therein.  HPP'89's original investment
      in 402 Julia  represented  approximately  4% of the aggregate amount which
      HPP'89  has  contributed  to the  capital of its three  Investee  Entities
      acquired in 1989 and to purchase its direct  interest in the  Cosmopolitan
      Building.

                                     F-12
              HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                      NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


(3)   Investments  in  Investee  Entities  and Real  Estate;  Commitments  and 
      Contingencies (Continued)

      On September 16, 1993,  HPP'89 sold  one-third of its general  partnership
      interest  in 402 Julia to the  developer  general  partner  for  $185,000.
      HPP'89's  percentage of interest in 402 Julia was thereby reduced from 98%
      to 65%.  The terms of the sale  required an initial  payment of  $100,000,
      which was received in September  1993,  and  requires  annual  payments of
      $3,500 through 2016 and a final payment of $4,500 in 2017. At December 31,
      1998 and 1997,  the  remaining  uncollected  payments  total  $67,500  and
      $71,000,  respectively,  which are  secured  by the  interest  sold to the
      developer  general  partner.  The sale  transaction  did not  generate any
      Investment Tax Credit recapture.

      Rehabilitation Tax Credits generated by 402 Julia and previously allocated
      to HPP'89 Limited Partners  totaled $248,796 since inception.  As of March
      31, 1995, 100% of these credits were fully vested.

      HPP'89  recorded  a net loss from the 402  Julia  Investment  of  $17,345,
      $10,596 and $3,327 for the years ended December 31, 1998,  1997, and 1996,
      respectively,  as well as  amortization  of  $3,252  for each of the years
      ended December 31, 1998, 1997 and 1996.

      Portland  Lofts  Associates  Limited  Partnership  (Portland  Lofts)  is a
      Delaware  limited  partnership  formed  on  August  8,  1989  to  acquire,
      construct,  rehabilitate, operate and manage three buildings containing 89
      residential  units and 29,250 square feet of ground floor space useable as
      either  commercial space or as home/studio  space for artists,  located at
      555  Northwest  Park Avenue in  Portland,  Oregon.  At December  31, 1998,
      Portland Lofts had leased approximately 88% (unaudited) of its residential
      apartment units and 95% (unaudited) of the commercial space for a combined
      occupancy of 90% (unaudited).

      HPP'89 contributed  $3,820,000 through December 31, 1998 to the capital of
      Portland Lofts and owns a general partnership  interest therein.  HPP'89's
      investment in Portland Lofts represents approximately 21% of the aggregate
      amount which  HPP'89  originally  contributed  to the capital of its three
      Investee  Entities acquired in 1989 and to purchase its direct interest in
      the Cosmopolitan Building.

      Rehabilitation  Tax Credits  generated by Portland  Lofts and allocated to
      HPP'89's Limited Partners totaled $1,775,571 since inception.  As of April
      1, 1996, 100% of these tax credits were fully vested.

      On May 21, 1996,  Portland Lofts and the holder of its mortgage note and a
      $550,000   unsecured  note  entered  into  a  Settlement   Agreement  (the
      Agreement)  to  resolve  claims  concerning  the  mortgage  note  and  the
      unsecured note (the Notes). According to the Agreement, Portland Lofts was
      allowed,  until July 31,  1996,  to pay  $5,400,000  to the holder in full
      satisfaction of the Notes.

      On June 20, 1996,  Portland  Lofts issued a promissory  mortgage note to a
      bank in the  amount  of  $5,625,000  and a  promissory  note to one of its
      general partners in the amount of $340,000 to provide  sufficient funds to
      pay in full the $5,400,000  settlement  amount with the holder, a separate
      $400,000  note  payable and all related  closing  costs.  The  transaction
      resulted in an extraordinary gain on extinguishment of debt of $1,656,579.

      In 1990,  HPP'89 had reserved  against its  investment  in Portland  Lofts
      reducing  such  investment  to  zero  due to the  substantial  doubt  that
      Portland Lofts may not be able to continue as a going concern.  Due to the
      debt settlement and refinancing  completed in June 1996, Portland Lofts is
      expected  to  continue  as a going  concern.  Generally,  under the equity
      method  of  accounting,  an  investment  may not be  carried  below  zero.
      Accordingly,  since the Portland Lofts  Investment was fully reserved for,
      HPP'89 had  cumulative  unrecorded  losses of  $1,325,926  at December 31,
      1995.  Principally as a result of the extraordinary gain on extinguishment
      of debt, Portland Lofts generated net income of $1,547,514 during the year
      ended December 31, 1996 of which HPP'89




                                        F-13
           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


(3)   Investments  in  Investee  Entities  and Real  Estate;  Commitments  and 
      Contingencies (Continued)

      has been allocated  $1,532,039.  Consequently,  HPP'89 was able to recover
      all of its cumulative  unrecorded losses from Portland Lofts and recognize
      income in equity from its investment in Portland Lofts of $206,113 for the
      year ended December 31, 1996.

      For the year ended December 31, 1997,  Portland Lofts allocated a net loss
      of  $173,710  and paid  cash  distributions  of  $156,000  to  HPP'89.  As
      mentioned  above,  generally,  under the equity method of  accounting,  an
      investment may not be carried below zero. During 1997, HPP'89's investment
      in  Portland  Lofts  was  reduced  to zero  due to  allocated  losses  and
      distributions received. Although HPP'89's investment in Portland Lofts has
      been  reduced to zero,  Portland  Lofts is expected to continue as a going
      concern and to continue to provide  distributions  to HPP'89.  At December
      31,  1997,  HPP'89  has  cumulative  unrecorded  losses  totaling  $95,392
      relating to the Portland Lofts investment.

      For the year ended  December 31, 1998,  HPP'89 was allocated net income of
      $4,404 from Portland Lofts,  thereby decreasing the cumulative  unrecorded
      loss relating to the Portland Lofts  investment to $90,988 at December 31,
      1998.

      For each of the years ended  December 31, 1998 and 1997,  HPP'89  received
      distributions of $156,000, from the Portland Lofts investment and recorded
      distributions received of $156,000 and $54,206, respectively, as equity in
      income of investee entities.

      The  Cosmopolitan at Mears Park, LLC (TCAMP) On December 18, 1989,  HPP'89
      acquired the Cosmopolitan  Building  containing 255 residential  units and
      approximately  2,200  square feet of  commercial  space.  The building was
      renovated,  and certain  renovation costs qualified for Rehabilitation Tax
      Credits.  HPP'89's  investment in The  Cosmopolitan  Building  represented
      approximately   39%  of  the  aggregate  amount  which  HPP'89  originally
      contributed to the capital of its three Investee Entities acquired in 1989
      and to purchase its direct interest in the Cosmopolitan  Building.  During
      the year ended  December 31, 1998 the economic  occupancy of TCAMP was 97%
      (unaudited).

      Rehabilitation  Tax Credits  generated by the purchase of the Cosmopolitan
      Building and previously  allocated to HPP'89's  Limited  Partners  totaled
      $4,307,491  since  inception.  As of December 31, 1994,  100% of these tax
      credits were fully vested.

      The mortgage HPP'89 assumed  relating to its purchase of the  Cosmopolitan
      Building had an original maturity date of December 18, 1999. On January 5,
      1995,  HPP'89  consummated  the  Second  Amendment  to the Loan  Agreement
      (Second  Amendment)  with the  holder  and  received  an option to buy the
      mortgage  note for the fair market  value of the  property.  In  exchange,
      HPP'89  agreed to reduce the maturity  date of the note from  December 18,
      1999 to December 18, 1996.

      Effective March 15, 1996,  HPP'89  contributed the Cosmopolitan  Building,
      and certain other assets and  liabilities,  to TCAMP (a Limited  Liability
      Company)  for a  50%  ownership  interest.  Concurrently,  another  member
      contributed   $650,000  cash  to  TCAMP  for  a  50%  ownership  interest.
      Simultaneously,  TCAMP issued a mortgage note in the amount of $7,000,000,
      the proceeds of which along with the $650,000  contributed  cash were used
      to  settle  in  full  HPP'89's   mortgage  note  payable  related  to  the
      Cosmopolitan Building. The fair value








                                     F-14
           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


(3)   Investments  in  Investee  Entities  and Real  Estate;  Commitments  and 
      Contingencies (Continued)

      of the  Cosmopolitan  Building  and  other  assets  contributed  by HPP'89
      approximated the fair value of liabilities  transferred to TCAMP by HPP'89
      and the  amount  paid by TCAMP to settle in full  HPP'89's  mortgage  note
      payable related to the Cosmopolitan Building. This transaction resulted in
      a provision  for  impairment  of real estate of  $8,437,963 to recognize a
      reduction  to fair  value at the  date of  contribution  to  TCAMP  and an
      extraordinary  gain on debt  extinguishment of $9,182,017 to recognize the
      difference  between the amount  outstanding under the mortgage payable and
      the amount accepted by the lender from TCAMP in full settlement.

      Distributions from TCAMP to HPP'89 and the other member are subject to the
      order of distributions  as specified in the Operating  Agreement of TCAMP.
      Until the other member's original  $650,000 capital  contribution has been
      repaid  in full,  to the  extent  that the  Partnership  accumulates  from
      whatever  sources  operating  reserve amounts greater than $140,000 at the
      end of any fiscal year,  the  Partnership  is required to contribute  such
      excess  within  thirty  days of the end of such  fiscal  year to  TCAMP as
      additional  capital  contributions to be distributed by TCAMP to its other
      member as a return of its original capital contribution.

      On February 27, 1998,  HPP'89  contributed to TCAMP $35,288,  representing
      operating  reserves in excess of $140,000 at December 31, 1997.  The funds
      were then  distributed  from TCAMP to its other  member as a return of its
      original  capital  contribution.  As of December 31, 1997, the outstanding
      balance  of  the  other  member's  unreturned  original  $650,000  capital
      contribution  was $223,773.  On May 18, 1998 the other  member's  original
      $650,000 capital contribution was reduced to zero, thereby eliminating any
      future requirements for HPP'89 to make additional capital contributions to
      TCAMP.

      As a result of the  contribution  of the  Cosmopolitan  to TCAMP for a 50%
      ownership  interest  in TCAMP,  HPP'89 no longer has  operations  directly
      related  to real  estate  activity.  As of March  15,  1996  (the  date of
      contribution),  the Partnership accounts for its investment in TCAMP under
      the equity method of accounting.

      HPP'89 recorded net income of $134,122,  $96,834 and $32,334 for the years
      ended  December  31,  1998 and  1997 and for the  period  March  15,  1996
      (inception)  through  December  31,  1996,  respectively,  from the  TCAMP
      Investment. HPP'89 received cash distributions of $75,000 and $98,200 from
      TCAMP for the year ended  December  31, 1998 and for the period  March 15,
      1996 (inception) through December 31, 1996, respectively. Generally, under
      the equity method of  accounting,  an  investment  cannot be carried below
      zero. At December 31, 1996, HPP'89 reduced its investment in TCAMP to zero
      and  recorded  distributions  received  of  $65,866 as equity in income of
      investee entities.

      HPP'89's  investments  in the Investee  Entities at December 31, 1998 and
      1997 are summarized as follows:

      Cumulative:                             1998           1997
                                        ------------   -------------

      Investments   and   advances    
      made in cash                      $  4,880,288   $   4,845,000
      Evaluation and acquisition costs       835,709         835,709
      Interest    capitalization    and                 
      other costs                             39,615         39,615
      Net  equity in loss of  Investee                  
      Entities                              (879,041)    (1,151,818)
      Reserves  for   realization   of                  
      investments                         (3,469,267)    (3,469,267)
      Amortization of certain costs          (49,728)       (46,476)
      Distributions    received   from     
      Investee Entities                     (511,200)      (280,200)
      Sale of one  third  interest  of                  
      Investee Entity                       (241,620)      (241,620)
                                       -------------    -------------
                                       $    604,756    $    530,943
                                        ============   =============

      The above summary of HPP'89's  investments  in Investee  Entities does not
      include its investment in Jenkins Court.


                                     F-15


           HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


(3)   Investments  in  Investee  Entities  and Real  Estate;  Commitments  and 
      Contingencies (Continued)

      The equity in income of Investee  Entities  reflected in the  accompanying
      statements of operations included income of $272,777, $62,126 and $300,986
      (unaudited)  for the  years  ended  December  31,  1998,  1997  and  1996,
      respectively,  and annual amortization of certain costs of $3,252, for the
      years ended December 31, 1998, 1997 and 1996 (unaudited), respectively.

      Summary  combined  balance sheets of the Investee  Entities as of December
      31, 1998 and 1997, and summary  combined  statements of operations for the
      years ended December 31, 1998, 1997 and 1996 are as follows:

                            COMBINED BALANCE SHEETS
                                    ASSETS

                                           1998          1997
                                        ------------  ------------
      Buildings and improvements,  (net
      of accumulated depreciation;
      $3,446,938, 1998; $2,896,633,
      1997)                            $  15,344,965   $ 15,855,990
      Land                                 2,041,326      2,041,326
      Other assets (net of accumulated
      amortization;$123,795, 1998;
      $105,860, 1997)                        600,899        469,949
      Cash and cash equivalents              287,348        173,000
                                        ------------    ------------

               Total assets            $  18,274,538   $ 18,540,265
                                        ============   ============

                       LIABILITIES AND PARTNERS' EQUITY

                                           1998          1997
                                        ------------  ------------
            Liabilities:
            Mortgage and notes payable $ 13,339,188   $13,412,706
            Other liabilities               726,135       735,828
                                        ------------  ------------
            Total liabilities            14,065,323    14,148,534
                                        ------------  ------------

            Partners' equity:
            HPP'89                        3,311,062     2,983,908
            Other partners                  898,153     1,407,823
                                        ------------  ------------
            Total partners' equity        4,209,215     4,391,731
                                        ------------  ------------

             Total   liabilities         
             and partners' equity      $ 18,274,538   $18,540,265
                                        ============  ============


                 Members'  equity  in TCAMP  has been  classified  as  partners'
      equity in the combined balance sheets.
















                                     F-16

              HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                      NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

(3)   Investments  in  Investee  Entities  and Real  Estate;  Commitments  and 
      Contingencies (Continued)


                       COMBINED STATEMENTS OF OPERATIONS

                                  1998         1997         1996
                               ------------  ----------  -----------
                                                         (Unaudited)
  Revenue:
        Rental revenue        $ 3,904,024 $  3,626,904   $ 3,006,379
        Interest and other
        income                     56,095       76,817        70,324
                              ------------  ----------    -----------
                                3,960,119    3,703,721     3,076,703
                               ------------  ----------   -----------

  Expenses:
      Interest expense          1,239,999    1,269,792     1,187,076
      Depreciation and 
      amortization                613,471      594,870       548,737
      Operating expenses        1,860,506    1,837,075     1,390,379
                               ------------  ----------   -----------
                                3,713,976    3,701,737     3,126,192
                               ------------  ----------  -----------

  Net income(loss)from   
  operations                      246,143       1,984        (49,489)
  Extraordinary  item: gain on        
  settlement of debt                    -           -      1,656,579
                               ------------  ----------   -----------
  Net income                   $  246,143    $  1,984    $ 1,607,090
                               ============  ==========  ===========
  Net income  allocated to
  other partners               $  121,182    $(87,472)   $ 1,561,047
                               ============  ==========  ===========
                               $  124,961    $ 89,456    $    46,043
                               ============  ==========  ===========

 (4)  Transactions With Related Parties and Commitments

      On October 1, 1995, HPP'89 engaged Claremont Management Corporation (CMC),
      a Massachusetts corporation previously unaffiliated and a related party as
      of March 15, 1996 through ownership by a member of TCAMP, to provide asset
      management,  accounting and investor services.  CMC provided such services
      for an annual  management  fee of $67,200  plus  reimbursement  of all its
      costs of providing these services.  The contract with CMC expired June 30,
      1998.  For the period  January 1, 1998  through  June 30, 1998 and for the
      years  ended  December  31,  1997 and 1996,  CMC was  reimbursed  $50,716,
      $73,850 and $61,635 (unaudited), respectively, for operating costs.

      Effective July 1, 1998,  HPP'89 engaged Gunn  Financial,  Inc.  (GFI),  an
      unaffiliated  Massachusetts  corporation,  to  provide  accounting,  asset
      management and investor services. GFI provides such services for an annual
      management fee of $63,000 plus reimbursement of all its costs of providing
      these services.  The agreement  expires on the earlier of June 30, 2006 or
      liquidation of the  Partnership,  as defined.  For the period July 1, 1998
      through December 31, 1998, GFI was reimbursed $56,109 for operating costs.

      On November 1, 1995, HPP'89 entered into a management  agreement with CMC,
      to manage the Cosmopolitan  Building.  CMC's management agreement required
      the payment of management  fees equal to the greater of $5,200  monthly or
      4% of gross receipts as defined in the agreements.  For the period January
      1, 1996  through  March 15,  1996,  CMC was paid  $21,940  (unaudited)  in
      property  management  fees.  On March 15, 1996,  the  property  management
      contract  between HPP'89 and CMC was terminated and TCAMP directly engaged
      CMC under similar management fee terms.

(5)   Fair Value of Financial Instruments

      The fair  values of cash  equivalents  and  accounts  payable  and accrued
      expenses at December 31, 1998 and 1997 approximate  their carrying amounts
      due to their short maturities.




                                     F-17

      Independent Auditors' Report on Accompanying Information


The Partners
Historic Preservation Properties 1989 Limited Partnership
Boston, Massachusetts


We have  audited,  in accordance  with  generally  accepted  auditing
standards,  the  financial  statements  as of and for the years ended
December 31, 1998 and 1997 of Historic  Preservation  Properties 1989
Limited  Partnership  (the  Partnership)  and have  issued our report
thereon  dated  February  16,  1999.  Our  audits  were  made for the
purpose of  forming  an opinion on the 1998 and 1997 basic  financial
statements  taken  as a  whole.  The  supplemental  schedule  is  the
responsibility of the  Partnership's  management and is presented for
the  purposes  of  complying   with  the   Securities   and  Exchange
Commission's  rules  and is not  part  of the  1998  and  1997  basic
financial  statements.  The  information  included  in this  schedule
has been subjected to the auditing  procedures  applied in the audits
of  the  1998  and  1997  basic  financial  statements,  and  in  our
opinion  fairly states in all material  respects the  financial  data
required  to be set forth  therein in  relation  to the 1998 and 1997
basic financial statements as a whole.


Lefkowitz, Garfinkel, Champi & DeRienzo P.C.



Providence, Rhode Island
February 16, 1999






















      HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
       REAL ESTATE & ACCUMULATED DEPRECIATION HELD DIRECTLY
                       BY INVESTEE ENTITIES
                         DECEMBER 31, 1998
                          (IN THOUSANDS)


                                                              Costs Capitalized
                                  Initial Costs                 Subsequent to 
                                                                 Acquisition

      Description                              Building
      and Ownership        Encum-             & Improve-   Improve-    Carrying
      Percentage          brances    Land       memts       ment         Cost 
                                                                        


Residential
Building/Commercial
Building
 402 Julia Street
 Associates L.P.
 New Orleans, Louisiana
65%                       $1,096    $ 133     $  282      $ 1,154     $  145
                                


Residential
Building/Commercial
Building
 Portland Lofts
 Associates L.P.
 Portland, Oregon
99%                        5,463      900        886       9,273        610


Residential Building
 The Cosmopolitan at
 Mears Park, LLC       
 St. Paul, Minnesota
50%                        6,780     1,009      6,074         368         -
                         --------   -------  ---------   ---------  --------
                     
Total                   $ 13,339    $2,042   $  7,242    $ 10,795   $   755
                        =========   =======  =========   =========  ========
                           
















     HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
       REAL ESTATE & ACCUMULATED DEPRECIATION HELD DIRECTLY
                       BY INVESTEE ENTITIES
                         DECEMBER 31, 1998
                          (IN THOUSANDS)


                                               Gross Amounts at
                                                 December 31,
                                                1998 (Note 1)

                                           Building               
      Description and                         &
    Ownership Percentage      Land         Improve-                Accumulated
                                            ments                  Depreciation
                                           (Note 3)      Total       (Note2)
                                                          

Residential
Building/Commercial 
Building
 402 Julia Street
 Associates L.P.
 New Orleans, Louisiana
65%                          $ 133      $  1,581       $ 1,714      $     356

Residential
Building/Commercial
Building
 Portland Lofts
 Associates L.P.
 Portland, Oregon
99%                            900        10,769        11,669           2,447


Residential Building
 The Cosmopolitan at 
 MearsPark, LLC
  St. Paul, Minnesota
50%                          1,009         6,442         7,451             644
                           --------       -------     ---------       ---------
                          


Total                     $  2,042     $ 18,792      $  20,834       $    3,447
                          =========    =========     ==========      ===========
                              













     HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
       REAL ESTATE & ACCUMULATED DEPRECIATION HELD DIRECTLY
                       BY INVESTEE ENTITIES
                         DECEMBER 31, 1998
                          (IN THOUSANDS)



        Description and            Construction               
                                       or               Interest     Life
      Ownership Percentage         Rehabilitation       Acquired    (Years)


Residential Building/Commercial
Building
 402 Julia Street Associates L.P.
  New Orleans, Louisiana
65%                                  8/1/89             7/25/89       40


Residential Building/Commercial
Building
 Portland Lofts Associates L.P.
 Portland, Oregon
99%                                 8/31/89             8/8/89        40


Residential Building
 The Cosmopolitan at Mears
 Park, LLC
 St. Paul, Minnesota
50%                                 12/18/89           3/15/96        34




            





     HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
       REAL ESTATE & ACCUMULATED DEPRECIATION HELD DIRECTLY
                 BY INVESTEE ENTITIES (CONTINUED)
                         DECEMBER 31, 1998
                          (IN THOUSANDS)

Note 1: The  aggregate  cost of each property on a tax  basis  net of the
        reduction  due  to the  rehabilitation tax credit at December 31, 1998,
        1997 and 1996 are as follows:
                                1998            1997             1996
                             -----------    -------------    -------------
                            
      Jenkintown,          
      Pennsylvania          $      -        $       -        $       -


      New Orleans,      
      Louisiana                1,457            1,457            1,457


      Portland, Oregon          4,207            4,207            9,799


      St. Paul, Minnesota      16,638           16,598           21,642
                             -----------    -------------    -------------
                             $ 22,302       $   22,262       $   32,898
                             =========      ===========      ===========


Note 2: The changes in accumulated depreciation for the years ended December 31,
        1998, 1997 and 1996 are as follows:
                                1998            1997             1996
                             -----------    -------------    -------------
                             
      Balance at   
      beginning of period    $  2,897       $   2,351        $   4,692


      Depreciation  during       
      the year                    550             546              620


      Transfer of property          -               -           (2,961)
                             -----------    -------------    -------------
                         
                             $  3,447            2,897            2,351
                             ===========    =============    =============










     HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
       REAL ESTATE & ACCUMULATED DEPRECIATION HELD DIRECTLY
                 BY INVESTEE ENTITIES (CONTINUED)
                         DECEMBER 31, 1998
                          (IN THOUSANDS)


Note 3: The   changes  in  total  costs  of  land, building and  improvements  
        for the years ended  December 31, 1998, 1997 and 1996 are as follows:

                                1998            1997             1996
                             -----------    -------------    -------------
                             

      Balance at   
      beginning of period    $ 20,794        $  20,774        $  29,103


      Additional                 
      improvements                 40               20              109


      Provisions for write 
      down of building &
      improvement
      (The Cosmopolitan)            -                -           (8,438)
                            ----------      -----------       -----------
                           
      Balance  at  end  of   
      period                 $ 20,834       $   20,794       $   20,774
                             ===========    =============    =============

                                      F-19