UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-K/A

                                 AMENDMENT NO. 2

        FOR ANNUAL AND TRANSITION REPORTS PUSUANT TO SECTIONS 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

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

                   For the fiscal year ended December 31, 2004

                                       OR

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

                     For the transition period from ____ to ____

                         Commission file number 0-50268

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

                    Delaware                                  11-3636084
        -------------------------------                   -------------------
        (State or Other Jurisdiction of                    (I.R.S. Employer
         Incorporation or Organization)                   Identification No.)

7 Bulfinch Place, Suite 500, Boston, Massachusetts               02114
--------------------------------------------------               -----
    (Address of Principal Executive Offices)                   (Zip Code)

                                 (617) 570-4600
                                 --------------
              (Registrant's telephone number, including area code)

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

           Securities registered pursuant to Section 12(g) of the Act:
                     Units of Limited Partnership Interest

      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 |_|

      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. |_|

      Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).

                                 Yes |_| No |X|

      There is no public market for the Units of Limited Partnership Interest.
Accordingly, information with respect to the aggregate market value of Units of
Limited Partnership Interest has not been supplied.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None.
<PAGE>

                              EXPLANATORY PARAGRAPH

      This Form 10-K/A Amendment No. 2 is being filed for the purpose of
restating the Partnership's consolidated balance sheets at December 31, 2004 and
2003 and the related consolidated statements of cash flows for the years ended
December 31, 2004, 2003 and 2002. Conforming changes have been made to
management's discussion and analysis of financial condition and results of
operations included in this Form 10-K/A Amendment No. 2. See Note 13 in the
notes to the consolidated financial statements for further information relating
to the restatement. This Form 10-K/A Amendment No. 2 has not been updated for
events or information subsequent to the date of filing of the original Form 10-K
and Form 10-K/A Amendment No. 1 except in connection with the foregoing.
Accordingly, this Form 10-K/A Amendment No. 2 should be read in conjunction with
the Partnership's filings made with the SEC subsequent to the filing of the
original Form 10-K and Form 10-K/A Amendment No.1.

TABLE OF CONTENTS

                                                                            Page
                                                                            ----

FORWARD-LOOKING STATEMENTS.....................................................1

   PART I

   ITEM 1.    BUSINESS.........................................................2

   ITEM 2.    PROPERTIES......................................................14

   ITEM 3.    LEGAL PROCEEDINGS...............................................25

   ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............25

   PART II

   ITEM 5.    MARKET FOR LIMITED PARTNERSHIP UNITS, RELATED
              SECURITY HOLDER MATTERS AND ISSUER PURCHASES
              OF EQUITY SECURITIES............................................26

   ITEM 6.    SELECTED CONSOLIDATED FINANCIAL DATA............................28

   ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS.............................29

   ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
              MARKET RISK.....................................................39

   ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (as restated).......40

   ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
              ACCOUNTING AND FINANCIAL DISCLOSURE.............................40

   ITEM 9A.   CONTROLS AND PROCEDURES.........................................41

   ITEM 9B.   OTHER INFORMATION...............................................41

<PAGE>

   PART III

   ITEM 10.   MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT...............42

   ITEM 11.   EXECUTIVE COMPENSATION..........................................44

   ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
              MANAGEMENT AND RELATED SECURITY HOLDER MATTERS..................44

   ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................45

   ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES..........................47

   PART IV

   ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES......................48

<PAGE>

                           FORWARD-LOOKING STATEMENTS

      In addition to historical information, this document contains
forward-looking statements. Forward-looking statements include information
relating to our intent, belief or current expectations, primarily, but not
exclusively, with respect to:

      o     economic outlook;
      o     capital expenditures;
      o     cash flow;
      o     operating performance;
      o     financing activities;
      o     industry developments, including trends affecting our business; and
      o     financial condition and results of operations.

      We identify forward-looking statements in this registration statement by
using words or phrases such as "anticipate," "believe," "estimate," "expect,"
"intend," "may be," "objective," "plan," "predict," "project" and "will be" and
similar words or phrases (or the negative thereof).

      The forward-looking information involves important risks and uncertainties
that could cause our actual results, performance or achievements to differ
materially from our anticipated results, performance or achievements expressed
or implied by such forward-looking statements. These risks and uncertainties
include, but are not limited to:

      o     occupancy rates and market rents, which may be adversely affected by
            economic and market conditions which are beyond our control,
            including the financial condition of our tenants;
      o     uncertainties relating to potential changes in interest rates and
            the availability of financing;
      o     uncertainties relating to our property portfolio;
      o     uncertainties relating to our operations;
      o     uncertainties relating to unexpected capital expenditures;
      o     uncertainties relating to domestic and international economic and
            political conditions; and
      o     uncertainties regarding the impact of regulations, changes in
            government policy, rules or laws and industry competition.

      Although we believe the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, we cannot assure you that such
expectations will be attained or that any deviations will not be material. We
disclaim any obligation or undertaking to disseminate to you any updates or
revisions to any forward-looking statement contained in this registration
statement to reflect any change in our expectations or any changes in events,
conditions or circumstances on which any statement is based.

<PAGE>

                                     PART I

ITEM 1. BUSINESS

General

      Your partnership is a Delaware limited partnership that owns commercial
properties, most of which are net-leased to investment grade corporate tenants,
as well as other real estate assets. Your partnership commenced operations on
January 1, 2002 following the completion of a transaction that we refer to as
the exchange, involving the merger into wholly-owned subsidiaries of your
partnership of 90 limited partnerships, each of which owned commercial
properties, and the acquisition by your partnership of various assets, including
those related to the management or capital structure of those partnerships. See
"Structure Chart" below. Each of the 90 partnerships, which we refer to as the
"Newkirk partnerships", was organized and sponsored by Integrated Resources,
Inc. between 1978 and 1984 and owned one or more commercial properties that we
refer to as the "Newkirk properties". Integrated Resources filed for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in February 1991 and
is no longer in existence. Members of the Newkirk Group, which consists of
affiliates of Apollo Real Estate Fund III, L.P., executive officers of Winthrop
Financial Associates, and affiliates of Vornado Realty Trust, first acquired
interests in the Newkirk partnerships in 1997.

      Your partnership's initial capital structure consisted of units of limited
partnership interest, which we refer to as units, that were issued in the
exchange. These units were not registered under the Securities Act of 1933 (the
"Securities Act") in reliance on an exemption from registration under that Act.
There is no public market for the units, and there are substantial restrictions
on the transfer of units.

      As of March 29, 2005, there were 6,266,388 units outstanding. 6,121,990
units were originally issued in the exchange, 188,908 of which have subsequently
been repurchased by your partnership, including 48,024 units repurchased by your
partnership in March 2005 upon completion of a tender offer by your partnership.
The balance of the outstanding units were issued in transactions completed
subsequent to the exchange.

Description of Assets

      General. As of December 31, 2004, your partnership owned an interest in
188 of the Newkirk properties, subordinated interests in a securitized pool of
notes evidencing first mortgage indebtedness secured by certain of your
partnership's properties as well as other properties, limited partnership
interests in various partnerships that own commercial net-leased properties,
including 22 properties that are owned by partnerships whose operations are
consolidated for financial reporting purposes with those of your partnership,
substantially all of the interests in two entities that hold unsecured debt
obligations of your partnership, an interest in a management company that
provides services for your partnership as well as other real estate
partnerships, ground leases, remainder interests or the right to acquire
remainder interests in various properties and miscellaneous other assets. In
addition, your partnership or an affiliate of your partnership's general partner
controls the general partner of the real estate limited partnerships in which
your partnership owns limited partnership interests, and your partnership has an
option to acquire in the future second mortgage debt secured by a substantial
number of your partnership's properties as well as the properties owned by 9
other partnerships. As of December 31, 2004, your partnership's commercial
properties including discontinued operations represented approximately 86% of
the total value of your partnership's assets.


                                       2
<PAGE>

      Properties. The table below summarizes as of December 31, 2004,
information on the 188 Newkirk properties and 22 properties owned by 7 limited
partnerships whose operations are consolidated for financial reporting purposes
with those of your partnership. We refer to the partnerships that own the 22
properties as the consolidated partnerships and their properties as the
consolidated properties.

      Property Type                         Number                Square Footage
      -------------                         ------                --------------

      Office                                    37                     7,352,000
      Retail                                   152                     5,427,000
      Other                                     21                     5,257,000
                                              ----                    ----------
               TOTAL                           210                    18,036,000
                                              ====                    ==========

      Below is a listing of tenants which accounted for 3% or more of the
aggregate rental revenues including discontinued operations in 2004 from the
Newkirk properties and the consolidated properties:

<TABLE>
<CAPTION>
                                          Square Feet            2004          Percentage of Aggregate
      Tenant                                Leased            Revenues ($)         Rental Revenues
      ------                                ------            ------------         ---------------
      <S>                                  <C>                <C>                        <C>
      Raytheon (1)                         2,287,000          $40,421,161                15.8%
      Albertson's, Inc.                    2,810,000           26,683,143                10.4%
      USF&G/The St Paul Co.                  530,000           25,532,490                10.0%
      Honeywell International                728,000           19,799,257                 7.7%
      Federal Express                        592,000           14,811,521                 5.8%
      Owens-Illinois                         707,000           13,363,280                 5.2%
      Entergy Gulf States                    489,000           12,212,147                 4.8%
      Safeway, Inc.                          736,000            8,543,296                 3.3%
      Hibernia Bank                          403,000            8,196,314                 3.2%
</TABLE>

----------
(1)   Property leased to Raytheon represented approximately 14.3% of your
      partnership's total assets as of December 31, 2004. Raytheon is a public
      company subject to the reporting requirements under the Securities
      Exchange Act of 1934. As of December 31, 2004, no other lessee leased
      property representing more than 10% of your partnership's total assets.


                                       3
<PAGE>

      The following chart sets forth certain information as of December 31, 2004
concerning lease expirations on the Newkirk properties and the consolidated
properties (assuming no renewals) from 2005 to 2014:

<TABLE>
<CAPTION>
                Number of Properties    Approximate Aggregate
                      at which            sq/ft. Covered by               Rental for             Percentage of Total
                   Lease Expires           Expiring Leases          Leases Expiring ($) (1)     Annualized Rental (1)
                   -------------           ---------------          -----------------------     ---------------------
<S>                      <C>                   <C>                        <C>                          <C>
2005                     20                      842,000                    4,539,102                   1.84%
2006                     25                    2,187,000                   25,913,320                  10.53%
2007                     32                    3,006,000                   37,459,732                  15.22%
2008                     65                    6,856,000                  100,333,437                  40.78%
2009                     44                    2,686,000                   57,261,438                  23.27%
2010                      4                      955,000                    3,817,042                   1.55%
2011                      5                      316,000                    3,831,905                   1.56%
2012                      9                      395,000                    3,187,136                   1.30%
2013                      1                       40,000                      869,774                   0.35%
2014                      1                      282,000                    7,189,086                   2.92%
</TABLE>

----------
(1)   Based on rent from continuing operations for the year ended December 31,
      2004.

      Please see "ITEM 2. PROPERTIES" for more detailed information regarding
your partnership's properties.

      Limited Partnership Interests in Other Partnerships. Your partnership owns
between 32.1% and 68.68% of the limited partnerships interests in the
consolidated partnerships as well as between .7% and 45.29% of the limited
partnerships interests in 9 other partnerships that own commercial net leased
properties. We refer to these latter partnerships as the unconsolidated
partnerships.

      General Partner Interests. Your partnership or an affiliate of your
general partner controls each of the general partners of (i) the 7 consolidated
partnerships, (ii) the 9 unconsolidated partnerships and (iii) 5 other
partnerships that own commercial net leased properties. Your partnership has
only a negligible economic interest, if at all, in each general partner entity
that it controls.

      The Management Company. Your partnership holds a 50.01% interest in
Newkirk Capital LLC ("Newkirk Capital"). Newkirk Capital's wholly-owned
subsidiary, Newkirk Asset Management LLC, provides asset management services for
your partnership and 9 other limited partnerships, the general partners of which
are controlled by your partnership. In 2004 and 2003, approximately $6,738,000
and $7,168,000, respectively, of asset management fees were paid, or accrued for
payment, to Newkirk Asset Management. For financial statement purposes,
management fees received from the partnerships that own the Newkirk properties
and the consolidated properties are eliminated in consolidation. Management fees
eliminated in consolidation aggregated approximately $6,406,000 and $6,750,000
in 2004 and 2003, respectively. Newkirk Asset Management also provides services
in connection with the sale, refinancing and re-leasing of properties owned by
your partnership and other partnerships for additional fees. All of the fees
paid to Newkirk Asset Management inure to the benefit of your partnership and
its partners. Your partnership realizes the benefits of the fee payments through
its ownership interest in Newkirk Capital and through its ownership of Newkirk
Finco LLC (discussed below). A substantial portion of these fees are not
reflected in your partnership's financial statements as they are eliminated in
consolidation.


                                       4
<PAGE>

      Pursuant to the terms of Newkirk Capital's Limited Liability Company
Agreement, Administrator LLC, which holds the 49.99% interest in Newkirk
Capital, is entitled to receive 100% of the distributions paid by Newkirk
Capital until Administrator LLC receives $2,568,000 annually and thereafter, the
balance of the distributions are paid to your partnership. Administrator LLC is
owned by former principals and employees of Integrated Resources, Inc. and is
not affiliated with the Newkirk Group. Those individuals owned various assets,
including interests in the general partners, related to the Newkirk
partnerships. In 1997, entities controlled by those individuals sold to members
of the Newkirk Group assets related to the Newkirk partnerships which assets
were eventually acquired by your partnership in the exchange. As part of the
1997 transaction members of the Newkirk Group made a $40 million loan to
Administrator LLC. For financial statement purposes this note is valued at $11.4
million. The priority distribution to Administrator LLC enables Administrator
LLC to pay interest on the promissory note evidencing the loan. The note is held
by Newkirk Finco LLC which is wholly-owned by your partnership. Accordingly,
your partnership effectively receives 100% of the fees paid to Newkirk Capital.
The note bears interest at a rate of 6.42% per annum and matures on November 20,
2009. Prior to maturity, the note requires payments of interest only. The note
is secured solely by Administrator LLC's 49.99% membership interest in Newkirk
Capital and is otherwise non-recourse. Accordingly, if Administrator LLC were to
default on the note, Newkirk Finco LLC would have the ability to foreclose on
Administrator LLC's interest in Newkirk Capital. To ensure payment of interest
on the note, Administrator LLC has directed Newkirk Capital to pay directly to
Newkirk Finco LLC all distributions payable to Administrator LLC in respect of
its interest in Newkirk Capital. As owner of Newkirk Finco LLC, your partnership
will receive as interest payments the amount of any distributions made by
Newkirk Capital to Administrator LLC. Your partnership's ownership interest in
Newkirk Capital is pledged to Administrator LLC to secure certain obligations
owed to Administrator LLC by the Newkirk Group. Creditworthy affiliates of the
Newkirk Group have agreed to indemnify your partnership for losses that it may
incur as a result of the failure of the Newkirk Group to satisfy such
obligations.

      First Mortgage Interests. Your partnership owns the three most junior
classes of interests in a securitized pool of first mortgages which includes 29
first mortgage loans encumbering a total of 59 of the Newkirk properties, 2 of
the consolidated properties and 1 other property owned by partnerships that are
controlled by affiliates of your partnership's general partner. In general, the
classes of interests in the pool of first mortgage loans represent priorities of
payments. When a payment is made by your partnership on one of these loans, the
first amounts are used to make the required payments to the holders of senior
interests. As a result, if the number of loan defaults results in loan payments
insufficient to fully satisfy the payments due on all interests, payments will
be made in the order of priority until all required payments are made. If there
is a default in the payment due on any interest the entire loan is in default.
However, in determining whether and when to exercise various remedies upon a
default, the servicer (the entity that manages the trust fund into which the
loans are pooled) must take into consideration what is best for all interest
holders.

      The interests held by your partnership are subordinate to interests which
had an original principal balance of $371,506,000 and a balance at December 31,
2004 of $150,728,533. The following table provides certain information with
respect to each of the first mortgage interests held by your partnership. Class
E Class F Class G Certificate Certificate Certificate


                                       5
<PAGE>

                                     Class E          Class F          Class G
                                   Certificate      Certificate      Certificate
                                   -----------      -----------      -----------

Contractual Principal Amount
   at December 31, 2004             $4,824,000       $3,859,000       $5,794,000
Interest Rate                          8.33%            8.38%            8.33%
Rating (Standard & Poor's)              BB                B            Not Rated

      Unsecured Loans. Your partnership beneficially owns 97.775% of the
interests in NK-Leyden Loan, L.P. which holds a $1,905,000 unsecured note of
your partnership and 97.324% of the interests in NK-Dautec Loan, L.P., which
holds a $1,075,000 unsecured note of your partnership. Your partnership acquired
these interests in connection with the exchange in order to substantially reduce
debt service costs associated with two properties owned by your partnership and
to eliminate potential conflicts relating to the unsecured loans in each case,
by owning a significant portion of the entity to which your partnership is
indebted. The remaining interests in these two entities are held by unaffiliated
third parties.

      The $1,905,000 note provides for the payment of interest only at a basic
rate of 8% per annum until maturity on December 31, 2006. Additional interest,
which together with the basic interest can aggregate up to 25% per annum, is
payable after the establishment of reserves. Interest is payable solely out of
excess cash flow (as defined under the loan) from a property owned by your
partnership in Toledo, Ohio. Your partnership has the right to extend the loan
for 10 years. In that event the unpaid balance on the loan (including accrued
but unpaid interest) will thereafter bear interest at 18% per annum and be
required to be self-amortized over the remaining term of the loan. The principal
amount outstanding on this note at December 31, 2004 and 2003 was $1,905,000.
For financial statement purposes, the principal balance and interest income are
eliminated in consolidation.

      The $1,075,000 note matures on May 1, 2008 and provides for payments of
principal and interest solely out of excess cash flow (as defined under the
loan) from a property owned by your partnership in New Kingston, Pennsylvania.
The basic interest rate is 8% per annum and additional interest, which together
with the basic interest can aggregate up to 18% per annum, is payable if excess
cash flow exceeds specified levels. The principal amount outstanding on this
note at December 31, 2004 and December 31, 2003 was $553,728 and $685,958,
respectively. For financial statement purposes, the principal balance and
interest income are eliminated in consolidation. See Item 3 for information
about a pending lawsuit with respect to this property.

      The Subordinate Mortgage Interests. In addition to being encumbered by
first mortgage loans, 189 of your partnership's Newkirk properties (including
properties being marketed for sale that are included in discontinued operations)
are encumbered by second mortgage loans which as of December 31, 2004 had an
outstanding balance, including accrued interest, of approximately $366,022,000.
Prior to the transactions described below, affiliates of your partnership's
general partner, through a limited partnership called T-Two Partners, owned
subordinated beneficial interests in these and certain other second mortgage
loans. Senior beneficial interests in the second mortgage loans were held by an
unaffiliated entity and three junior tranches of such senior beneficial
interests were held by certain members of the Newkirk Group. Also prior to the
transactions described below, the owners of T-Two Partners had an option, which
we refer to as the put option, to require your partnership to purchase T-Two
Partners in December 2007 in exchange for units in your partnership and your
partnership had an option, which we refer to as the call option, to purchase
T-Two Partners in January 2008 in exchange for units in your partnership.


                                       6
<PAGE>

      On November 24, 2003, your partnership obtained a $208,473,427 loan from
Bank of America that bears interest at a rate elected by your partnership equal
to either (1) LIBOR plus 450 basis points or (2) the prime rate charged by Bank
of America plus 250 basis points. The loan was obtained to replace your
partnership's existing loan from Bank of America, and effectively reduced the
interest rate on such borrowing from a minimum of 8.5% to a floating rate which
is presently 7.01% and that will in no event exceed 9.5%, after giving effect to
the three-year interest rate protection agreement entered into by your
partnership. The loan is scheduled to mature on November 24, 2006, subject to
two one-year extensions. The loan requires monthly payments of interest only
which in January 2005 was approximately $1,002,000 per month. In addition,
mandatory prepayments of principal are required from the proceeds of property
sales and refinancings and other asset sales, as well as up to $1,312,500 per
quarter to the extent that T-Two Partners does not make the required principal
payments on the T-Two Loan that is described below. Your partnership can prepay
the loan in whole or in part at any time together with a premium of 1/2% if such
prepayment occurs between November 25, 2004 and November 24, 2005 and thereafter
with no premium. In addition, your partnership and T-Two Partners may prepay up
to $50,000,000 annually of this loan and the T-Two Loan without a premium. The
loan is secured by substantially all of the assets of your partnership, and
contains customary financial and other covenants consistent with the prior loan
from Bank of America. The loan balance at December 31, 2004 was $165,328,277.

      On November 24, 2003, at the same time as your partnership obtained its
loan from Bank of America, T-Two Partners obtained a $316,526,573 loan from Bank
of America. We refer to this loan as the T-Two Loan. The interest rate, maturity
date and principal terms of the T-Two Loan are the same as your partnership's
loan. T-Two Partners used part of the proceeds of the T-Two Loan to purchase the
senior beneficial interests in the second mortgage loans encumbering your
partnership's and certain other partnerships' properties so that T-Two Partners
is now the 100% beneficial owner of these second mortgage loans. We refer to
these senior beneficial interests as the T-1 Certificate. The T-Two Loan is
secured by all the assets of T-Two Partners, including the second mortgage loans
receivable from your partnership. Your partnership guaranteed repayment of the
T-Two Loan to Bank of America. In consideration for your partnership's
guarantee, the owners of T-Two Partners agreed to the elimination of their put
option, and to provide a credit line to your partnership bearing interest at
LIBOR plus 450 basis points. Any amounts advanced to your partnership under the
credit line would have to be repaid in full before your partnership could
purchase the interests in T-Two Partners if your partnership exercises the
purchase option described below. The loan balance at December 31, 2004 was
$275,191,415.

      Your partnership's call option had previously provided for the acquisition
of the interests in T-Two Partners in January 2008 in exchange for a number of
units in your partnership to be determined at the time of exercise based on an
agreed-upon formula. Your partnership and the owners of T-Two Partners modified
your partnership's option in certain respects. First, the option can now be
exercised by your partnership at any time between November 24, 2006 and November
24, 2009. Second, the purchase price is payable in cash rather than units in
your partnership. Finally, the formula for determining the purchase price
payable by your partnership if it exercises the option has been revised in a
manner that your partnership's general partner believes to be significantly more
favorable to your partnership than the formula previously in effect.
Specifically, the purchase price is calculated as follows: the sum of
$316,526,573 plus T-Two Partners' costs of obtaining the T-Two Loan
(approximately $7,346,000) and administering the trust that holds the second
mortgage loans, together with interest on the foregoing sum at the effective
rate of interest paid by T-Two Partners on the T-Two Loan, less all payments
made from and after November 24, 2003 on the second mortgage loans.


                                       7
<PAGE>

      T-Two Partners will reimburse your partnership for approximately
$7,346,000 of closing costs incurred in connection with the Bank of America loan
and the T-Two Loan, together with interest thereon at a rate equal to LIBOR plus
450 basis points.

      Your partnership as well as T-Two Partners are currently in discussions to
restructure the Bank of America Loan and the T-Two Loan in a transaction that
would, among other things, reduce the interest rates on these loans. No
agreement has been reached and there is no assurance that a restructuring will
be consummated.

      All of the above transactions were entered into in connection with the
settlement of an action that had been brought in the Connecticut Superior Court
against your partnership's general partner and various of its affiliates. See
"ITEM 3. LEGAL PROCEEDINGS."

      On November 23, 2003, your partnership also acquired from T-Two Partners a
second mortgage loan on a property in El Segundo, California in which your
partnership has a 53% interest. The mortgage loan was acquired for $6,250,000
which represented its principal balance and accrued interest. The mortgage loan
bears interest at 8.0% per annum and matures in December 2023.


                                       8
<PAGE>

STRUCTURE CHART

      Set forth below is a chart setting forth the structure of your
partnership.

                          MASTER PARTNERSHIP STRUCTURE

<TABLE>
<S>                                                   <C>                                    <C>
          ----------------------------                ---------------------------            ---------------------------
           Former Limited Partners of
          the Newkirk Partnerships (1)                        MLP GP LLC (2)                     The Newkirk Group (3)
            (Other than the Newkirk
            Group) and other Limited
                   Partners
          ----------------------------                ---------------------------            ---------------------------
              LIMITED PARTNER      \              GENERAL PARTNER  |           LIMITED PARTNER /
                                    \                              |                          /
                              18.9%  \                             |                         /  81.1%
                                      \                            |                        /
                                       \                           |                       /
                                        \                          |                      /
                             -------------------------------------------------------------------------

                                                          THE NEWKIRK MASTER
                                                         LIMITED PARTNERSHIP

                             -------------------------------------------------------------------------
                                  /            /        |          |            \                    \
                                 /            /         |          |             \                    \
                                /            /          |          |              \                    \
                               /            /           |          |               \                    \
                              /  100%      /  100%      |          |  100%          \  100%              \  50.01%
                             /            /             |          |                 \                    \
-------------------------------    -------------------  | ------------------    ---------------------    -----------------------
Subsidiary Limited Partnerships    Limited Partnership  | Newkirk GP LLC (6)    Newkirk Finco LLC (7)    Newkirk Capital LLC (8)
which hold the Newkirk             interests (5)        |
properties (4)                                          |
-------------------------------    -------------------  | ------------------    ---------------------    -----------------------
                                                        |
                                                        |
                 |-------------------|------------------|------------------|----------------|----------|
                 |  100%             |  100%            |  97.775%         |  97.324%       |          |  100%
                 |                   |                  |                  |                |          |
          ----------------   -----------------   ---------------   ---------------   ------------------------------------
          NK-Remainder       Option to Acquire   NK-Leyden         NK-Dautec         NK First Loan E Certificate LLC
          Interest LLC (9)   Subordinate         Loan, L.P. (11)   Loan, L.P. (11)   NK First Loan F Certificate LLC
                             Mortgage                                                NK First Loan G Certificate LLC (12)
                             Interests (10)
          ----------------   -----------------   ---------------   ---------------   ------------------------------------
</TABLE>


                                       9
<PAGE>

(1)   As a result of the exchange, the outstanding limited and general
      partnership interests in the Newkirk partnerships held by "accredited
      investors" (as that term is defined pursuant to Regulation D under the
      Securities Act) were converted into the right to receive units. Limited
      partners in Newkirk partnerships who were not "accredited investors"
      received a one-time cash payment in exchange for their limited partnership
      interests.

(2)   This entity is the general partner of your partnership, but has no
      economic interest in your partnership. It is owned by affiliates of
      Vornado Realty Trust and executives of Winthrop Financial Associates.

(3)   The Newkirk Group consists of affiliates of Apollo Real Estate Investment
      Fund III, L.P., executive officers of Winthrop Financial Associates and
      affiliates of Vornado Realty Trust. See "ITEM 12. SECURITY OWNERSHIP OF
      CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SECURITY HOLDER
      MATTERS" for more information on the allocation of units in your
      partnership among members of The Newkirk Group.

(4)   As part of the exchange, which took place on January 1, 2002, each Newkirk
      partnership was merged with and into a separate newly formed limited
      partnership that is wholly owned by your partnership, as a result of which
      your partnership became the owner of the properties and other assets
      previously owned by the Newkirk partnerships, subject to the liabilities
      of such partnerships.

(5)   Consists of limited partnership interests in the consolidated partnerships
      and the unconsolidated partnerships. See "- Description of Assets -
      Properties" above.

(6)   Controls the general partner interests in (i) 3 of the consolidated
      partnerships, (ii) 4 of the unconsolidated partnerships and (iii) 5
      additional partnerships that own net leased property. See "- Description
      of Assets - The Management Company" above.

(7)   Holds a non-recourse note from the minority partner in Newkirk Capital
      LLC, your partnership's management company, secured solely by the minority
      partner's membership interest in Newkirk Capital LLC. See "- Description
      of Assets - The Management Company" above.

(8)   Performs management services for your partnership and 9 other affiliated
      partnerships for which it receives fees. See "- Description of Assets -
      The Management Company" above.

(9)   Owns ground leases, or owns or has the right to acquire remainder
      interests, in the land underlying certain properties owned by your
      partnership and other real estate limited partnerships.

(10)  The subordinated mortgage interests are held by T-Two Partners, L.P.,
      which is owned by NK-CR Holdings LLC and Holdings Subsidiary LLC,
      affiliates of The Newkirk Group. Your partnership has the right to acquire
      T-Two Partners, L.P. between November 2006 and November 2009. See "-
      Description of Assets - The Subordinate Mortgage Interests" above.


                                       10
<PAGE>

(11)  Holds an unsecured debt obligation of your partnership. See "- Description
      of Assets - Unsecured Loans" above.

(12)  Own subordinated interests in a securitized pool of first mortgage
      indebtedness with respect to 29 first mortgage loans encumbering a total
      of 59 of the Newkirk properties, two of the consolidated properties and
      one other property owned by affiliated partnerships. See "- Description of
      Assets - First Mortgage Interests" above.

Description of Indebtedness

      See "- Description of Assets - The Subordinate Mortgage Interests" for a
description of your partnership's loan with Bank of America and the related
T-Two Loan to T-Two Partners. The loan requires your partnership and T-Two
Partners to maintain an aggregate minimum consolidated debt service coverage
ratio (i.e., the ratio of your partnership's and T-Two Partners' consolidated
net cash revenues from investments, exclusive of debt payable to T-Two Partners,
before property-level debt service to their total consolidated debt service) of
at least 1.15 during the initial 36 month term and at least 1.25 during the
extension periods. Your partnership and T-Two Partners are also required to
maintain an aggregate minimum debt service coverage ratio (i.e., the ratio of
your partnership's and T-Two Partners' net cash revenue from investments,
exclusive of debt payable to T-Two Partners, after property-level debt service
to unconsolidated debt service) of at least 1.75 during the initial 36 month
term or 2.0 during the extension periods. If your partnership's and T-Two
Partners' aggregate debt service coverage ratio falls below 1.75 during the
initial 36 month term or 2.0 during the extension periods, then all cash flow of
your partnership and T-Two Partners will be deposited into a cash sweep account
as additional collateral for the loan and your partnership would be prohibited
from making distributions. As of December 31, 2004, your partnership's and T-Two
Partners aggregate consolidated debt service coverage ratio was 1.39 and their
debt service coverage ratio was 2.85. Your partnership's general partner
believes that your partnership will be able to maintain the required ratios and
does not anticipate that the maintenance of these ratios will have an adverse
impact on your partnership's financial condition.

      Your partnership is also required to maintain a consolidated leverage
ratio (i.e., the ratio of (i) your partnership's and T-Two Partners' allocable
share of all indebtedness with respect to investments plus the outstanding
balance under the loan and the T-Two Loan, but exclusive of the mortgage
indebtedness of your partnership owed to T-Two Partners, to (ii) your
partnership's allocable share of its investments, with your partnership's
properties being valued based on discounted cash flow, during the first, second
and third years of the initial term of the loan and during the extension
periods, if any, of not more than 70%, 67%, 65%, 60% and 55%, respectively. In
addition, your partnership is required to maintain minimum liquid assets of at
least $5,000,000 and a minimum consolidated net worth, with your partnership's
properties being valued based on discounted cash flow, equal to $500,000,000
during the initial loan term, $525,000,000 during the first extended term and
$550,000,000 during the second extended term. The loan also limits your
partnership's ability to incur any direct debt or contingent liabilities.

      See "ITEM 2. PROPERTIES" for information on your partnership's mortgage
indebtedness.


                                       11
<PAGE>

Unit Repurchase

      In 2004, your partnership purchased from its limited partners 20,472 units
at a price of $35 per unit, less distributions in some cases. Your partnership
had purchased 115,000 units from its limited partners for $35 per unit in
February 2003 and 5,412 units in 2002.

      In February 2005, your partnership commenced a tender offer to purchase up
to 99,455 units of limited partnership interest at a price of $42.50 per unit.
In March 2005, your partnership acquired 48,024 units pursuant to the tender
offer.

Business Objectives and Strategies; Future Intentions

      In general, your partnership seeks to enhance the value of your units by
availing itself of investment and development opportunities relating to existing
properties as well as by seeking other potential strategic transactions such as
the sale of your partnership to a third party.

Industry Segments and Seasonality

      Your partnership's primary business is the ownership and management of
commercial net-leased properties. Most of your partnership's tenants are
investment-grade corporate tenants. The largest single tenant leased multiple
properties and accounted for approximately 15.8% of your partnership's rental
revenues from the Newkirk properties and the consolidated properties for 2004.
Reference is made to " - Description of Assets - Properties" above for
additional information on your partnership's most significant tenants. Our
business is not seasonal.

Competition

      Numerous lessors and developers compete with your partnership's properties
in attracting tenants and corporate users. The principal means of competition
are rent charged, location, services provided and the nature and condition of
the facility to be leased. Some of these competing properties may be newer or
better located than your partnership's properties. The number of competitive
commercial properties in a particular area could have a material effect on your
partnership's ability to lease or develop space. In addition, your partnership
may not be in a position to materially benefit from any real estate market
appreciation for a number of years due to the fixed rate renewal term rates
under the various lease agreements encumbering the properties. Likewise, your
partnership will remain subject, after the initial lease terms expire, to
downturns in the real estate market and general economic conditions. Your
partnership does not operate outside of the United States.

Environmental Regulations

      Under various federal, state and local laws and regulations, an owner or
operator of real estate may be held liable for the costs of removal or
remediation of hazardous or toxic substances located on or in the property.
These laws often impose such liability without regard to whether the owner knows
of, or was responsible for, the presence of such hazardous or toxic substances.
The cost of any required remediation or removal of such substances may be
substantial. In addition, the owner's liability as to any property is generally
not limited under such laws and regulations and could exceed the value of the
property and/or the aggregate assets of the owner. The presence of such
substances, or the failure to remediate such substances properly, may also
adversely affect the owner's ability to sell or lease the property or to borrow


                                       12
<PAGE>

using the property as collateral. Under such laws and regulations, an owner or
entity who arranges for the disposal or treatment of hazardous or toxic
substances at a disposal or treatment facility may also be liable for the costs
of removal or remediation of all such substances at such facility, whether or
not such facility is owned or operated by such person. Some laws and regulations
impose liability for the release of certain materials into the air or water from
a property, including asbestos, and such release can form the basis for
liability to third parties for personal injury or other damages. Other laws and
regulations can limit the development of and impose liability for the
disturbance of wetlands or the habitats of threatened or endangered species.

      Almost all of your partnership's properties are net-leased, and tenants
are therefore generally required to pay all of the expenses relating to the
leased property. Accordingly, your partnership's general partner believes that
compliance with federal, state and local provisions otherwise relating to the
properties or the environment will not have a material effect on the capital
expenditures, earnings or competitive position of your partnership. However, no
assurance can be given that material environmental liabilities do not exist,
that despite the leases in place your partnership will not be held liable for
environmental liabilities, that any prior owner or operator of a property or
land held for development did not create any material environmental condition
not known to your partnership, that a material environmental condition does not
otherwise exist as to any one or more of your partnership's properties or land
held for development, or that future uses and conditions (including changes in
applicable environmental laws and regulations and the uses and conditions of
properties in the vicinity, such as leaking underground storage tanks and the
activities of the tenants) will not result in the imposition of environmental
liability. No material expenditures have been made by your partnership to date
relating to environmental matters.

Employees

      Your partnership has no employees. Winthrop Financial Associates, A
Limited Partnership, executive officers of which jointly own your partnership's
general partner with an affiliate of Vornado Realty Trust, provides the services
of some of its employees, including the executive officers of the manager of
your partnership's general partner, to perform accounting, asset management and
investor relation services for us. Your partnership anticipates that each
executive officer of the manager of our general partner will devote a
significant portion of his or her time to the business of Winthrop Financial
Associates and its other affiliates. Winthrop receives an annual fee which was
originally fixed at $1,800,000 (subject to adjustment based on increases in the
CPI) for its services to your partnership and to 9 other partnerships, the
general partners of which are controlled by your partnership. The CPI adjustment
for 2004 was 2.3% bringing the fee to $1,881,952.


                                       13
<PAGE>

ITEM 2. PROPERTIES

General

      Substantially all of the Newkirk properties and the consolidated
properties are net-leased to investment grade corporate tenants. At December 31,
2004 your partnership had three vacant properties that were not subject to
leases. These properties contained an aggregate of 245,000 square feet or
approximately 1.4% of the total space of all properties. Your partnership's
remaining properties are net leased to various tenants. The leases are similar
in many respects and generally: (i) provide for fixed rent payments and obligate
the tenant to pay all capital and operating expenses for a property; (ii)
obligate the tenant to perform all responsibilities (other than the payment of
debt service) relating to the property; (iii) require the tenant to maintain
insurance against casualty and liability losses; (iv) permit the tenant to
sublet the property; and (v) afford the tenant in many instances the right to
terminate the lease at certain points during the primary term if it determines
that continued use and occupancy of the property would be uneconomic or
unsuitable. Many of the leases grant the tenant an option to purchase the
property upon the expiration of the primary term of the lease and at the end of
one or more renewal terms for a purchase price equal to the fair market value of
such property. Your partnership maintains insurance on properties that are not
leased and the general partner believes that your partnership's properties are
adequately covered by insurance.

      The following table sets forth certain information on the Newkirk
properties and the consolidated properties as of December 31, 2004, including
discontinued operations. Except as otherwise indicated in the table, the
ownership interest is a fee interest in the underlying land.

<TABLE>
<CAPTION>
                                                    Approximate           2005                                             Lease
                                                     Leaseable       Annualized Base                                     Expiration/
                                                      Building      Rent Per sq. ft.                                       Option
                          Location                 Square Footage          ($)             Principal Tenant              Expiration
                          --------                 --------------          ---             ----------------              ----------
<S>                 <C>                               <C>                <C>          <C>                                 <C>
OFFICE:
Arkansas            Little Rock                        36,000            11.34        Entergy Gulf States                 2010/2030
                    Pine Bluff                         27,000            12.54        Entergy Gulf States                 2010/2030

California          El Segundo(4)                     185,000            16.10        Raytheon                            2008/2038
                    El Segundo(4)                     185,000            16.10        Raytheon                            2008/2038
                    Long Beach(1)(3)                  478,000            35.51        Raytheon                            2008/2038
                    Walnut Creek(1)                    55,000            37.52        Hercules Credit, Inc.               2007/2037

Colorado            Colorado Springs                   71,000            31.13        Federal Express Corporation         2008/2038

Connecticut         Clinton(1)(7)                      41,000            17.35        Cheeseborough Ponds/Ragu            2008/2033

Florida             Orlando(1)                        184,000             5.22        Martin Marietta Corporation         2008/2038
                    Orlando(1)                        357,000            12.97        Harcourt Brace & Company            2009/2039

Indiana             Columbus (1)                      390,000            10.00        Cummins Engine Company  Inc.        2009/2039
</TABLE>


                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                    Approximate           2005                                             Lease
                                                     Leaseable       Annualized Base                                     Expiration/
                                                      Building      Rent Per sq. ft.                                       Option
                          Location                 Square Footage          ($)             Principal Tenant              Expiration
                          --------                 --------------          ---             ----------------              ----------
<S>                 <C>                             <C>                  <C>          <C>                                 <C>
Kentucky            Owensboro (1) (7)                 443,000            10.52        Cheeseborough Ponds/Ragu            2008/2033

Louisiana           New Orleans (1) (8)               222,000            20.86        Hibernia Bank                       2008/2033
                    New Orleans (1) (8)               181,000            20.19        Hibernia Bank                       2008/2033

Maryland            Baltimore(1)                      530,000            48.74        USF&G/The Saint Paul Co.            2009/2039

Missouri            Bridgeton(1)                       54,000            10.58        The Kroger Co.                      2006/2031

New Jersey          Carteret                           96,000            18.25        Pathmark                            2011/2036
                    Elizabeth                          30,000            25.73        Summit Bank                         2008/2038
                    Morris Township(1)(5)             225,000            26.20        Allied Signal Corp.                 2008/2038
                    Morris Township(1)(5)              50,000            29.41        Allied Signal Corp.                 2008/2038
                    Morris Township(1)(5)             137,000            25.99        Allied Signal Corp.                 2008/2038
                    Morristown(1)                     316,000            27.87        Allied Signal Corp.                 2008/2038
                    Plainsboro(1)                       2,000            77.97        Summit Bank                         2008/2038

Nevada              Las Vegas                         282,000            27.43        Nevada Power Company                2014/2039

Ohio                Miamisburg(1)                      61,000            11.62        Reed Elsevier, Inc.                 2008/2038
                    Miamisburg(1)                      86,000             6.01        Reed Elsevier, Inc.                 2008/2038
                    Toledo(1)                         707,000            18.89        Owens-Illinois                      2006/2036

Pennsylvania        Allentown                          71,000             6.05        First Union Corp.                   2010/2025

Tennessee           Johnson City                       64,000            10.58        SunTrust Bank                       2006/2031
                    Kingport                           43,000            10.98        American Electric Power             2008/2038
                    Memphis(1)                        521,000            27.56        Federal Express Corporation         2009/2039
                    Memphis(1)                         75,000            16.57        The Kroger Co.                      2008/2038

Texas               Beaumont(1)                       426,000            26.46        Entergy Gulf States                 2007/2037
                    Beaumont                           50,000            29.10        Allied Lakewood Bank                2007/2037
                    Bedford (14)                      207,000                -        Vacant                                  -
                    Dallas (3 buildings)              185,000            16.39        Allied Lakewood Bank                2007/2037
                    Garland (11)                      279,000             5.40        Raytheon                            2006/2036
                                                    ---------            -----

           TOTAL/AVERAGE OFFICE                     7,352,000            21.31
                                                    =========            =====

RETAIL:
Alabama             Dothan(1)                          54,000             4.98        Albertson's Inc.                    2005/2035
                    Florence(1)                        42,000            15.65        The Kroger Co.                      2008/2038
                    Hunstville(1)                      60,000             7.45        Albertson's Inc.                    2007/2037
                    Huntsville(1)                      58,000             5.98        Albertson's Inc.                    2006/2036
                    Montgomery(1)                      54,000             3.97        Albertson's Inc.                    2005/2010
                    Montgomery                         66,000            10.35        Albertson's Inc.                    2007/2037
                    Tuscaloosa(1)                      53,000             4.22        Albertson's Inc.                    2005/2020

Arizona             Bisbee(1)                          30,000             9.06        Safeway, Inc.                       2009/2039
                    Mesa (6)                            3,000             6.60        CSK Auto                            2009/2039
                    Tucson(1)                          37,000             9.77        Safeway, Inc.                       2009/2039
</TABLE>


                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                    Approximate           2005                                             Lease
                                                     Leaseable       Annualized Base                                     Expiration/
                                                      Building      Rent Per sq. ft.                                       Option
                          Location                 Square Footage          ($)             Principal Tenant              Expiration
                          --------                 --------------          ---             ----------------              ----------
<S>                 <C>                             <C>                  <C>          <C>                                 <C>
California          Atascadero (6)                      4,000             8.02        CSK Auto                            2009/2039
                    Beaumont (6)                        4,000             7.61        CSK Auto                            2009/2039
                    Corona(1)                           9,000            26.43        GoodYear Tire                       2007/2037
                    Downey                             39,000            12.90        Alberston's Inc.                    2007/2037
                    El Toro (12)                       11,000            11.74        GoodYear Tire                       2009/2039
                    Huntington Beach                   44,000            12.61        Albertson's Inc.                    2009/2039
                    Indio(1)                           10,000            22.70        GoodYear Tire                       2007/2037
                    Lancaster                          42,000            12.75        Albertson's Inc.                    2009/2039
                    Livermore(1) (13)                  53,000             5.22        Albertson's Inc.                    2006/2036
                    Lomita(1)                          33,000            10.24        Albertson's Inc.                    2008/2033
                    Mammoth Lakes(1)                   44,000            18.33        Safeway, Inc.                       2007/2037
                    Morgan Hill (12)                   10,000             6.90        GoodYear Tire                       2009/2039
                    Paso Robles (6)                     7,000             4.70        CSK Auto                            2009/2039
                    Pinole(1)                          58,000             7.16        Albertson's Inc.                    2011/2036
                    Pleasanton                        175,000             6.73        Federated Department Stores         2012/2040
                    Redlands (12)                      11,000             5.52        GoodYear Tire                       2009/2039
                    San Diego(1)                      226,000             7.08        Nordstrom, Inc.                     2016/2036
                    Santa Monica                      150,000             5.74        Federated Department Stores         2012/2040
                    Santa Rosa (13)                    22,000             5.25        Albertson's Inc.                    2006/2036
                    Simi Valley(1)                     40,000            12.03        Albertson's Inc.                    2008/2038
                    Tustin (1) (9)                     72,000             1.99        Mervyn's                            2009/2033
                    Union City (12)                    10,000             7.32        GoodYear Tire                       2009/2039
                    Ventura(1)                         40,000            19.92        City of Buenaventura                2013/2013
                    Yorba Linda (12)                   11,000             7.62        GoodYear Tire                       2009/2039

Colorado            Aurora(13)                         41,000             6.96        Albertson's Inc.                    2005/2035
                    Aurora(1)                          42,000             5.06        Albertson's Inc.                    2006/2036
                    Aurora(1)                          24,000            21.26        Safeway, Inc.                       2007/2037
                    Littleton(13)                      29,000             6.50        Albertson's Inc.                    2005/2035
                    Littleton                          39,000            12.17        Albertson's Inc.                    2009/2039

Florida             Bradenton                          60,000            12.16        Albertson's Inc.                    2007/2037
                    Cape Coral                         30,000            14.85        Albertson's/Lucky Stores            2008/2038
                    Casselberry(1)                     68,000            11.26        Albertson's Inc.                    2007/2037
                    Gainesville                        41,000            12.53        Albertson's/Lucky Stores            2008/2038
                    Largo(13)                          54,000             4.00        Albertson's Inc.                    2005/2035
                    Largo                              40,000            14.86        Albertson's/Lucky Stores            2008/2038
                    Largo                              30,000            12.95        Albertson's/Lucky Stores            2008/2038
                    Orlando(1)                         58,000             5.67        Albertson's Inc.                    2006/2036
                    Pinellas Park                      60,000            11.74        Albertson's Inc.                    2007/2037
                    Port Richey(1)                     54,000             5.09        Albertson's Inc.                    2005/2035
                    Tallahassee(1)(13)                 54,000             3.05        Albertson's Inc.                    2005/2035
                    Venice (13)                        42,000             5.76        Albertson's Inc.                    2006/2036

Georgia             Atlanta(1)                          6,000            28.94        Bank South, N.A.                    2009/2039
                    Atlanta(1)                          4,000            32.56        Bank South, N.A.                    2009/2039
                    Chamblee(1)                         5,000            31.30        Bank South, N.A.                    2009/2039
</TABLE>


                                       16
<PAGE>

<TABLE>
<CAPTION>
                                                    Approximate           2005                                             Lease
                                                     Leaseable       Annualized Base                                     Expiration/
                                                      Building      Rent Per sq. ft.                                       Option
                          Location                 Square Footage          ($)             Principal Tenant              Expiration
                          --------                 --------------          ---             ----------------              ----------
<S>                 <C>                             <C>                  <C>          <C>                                 <C>
                    Cumming(1)                         14,000            22.58        Bank South, N.A.                    2009/2039
                    Duluth(1)                           9,000            23.18        Bank South, N.A.                    2009/2039
                    Forest Park(1)                     15,000            21.71        Bank South, N.A.                    2009/2039
                    Jonesboro(1)                        5,000            25.51        Bank South, N.A.                    2009/2039
                    Stone Mountain (1)                  6,000            26.95        Bank South, N.A.                    2009/2039

Idaho               Boise                              37,000            15.76        Albertson's Inc.                    2007/2037
                    Boise(1)                           43,000             8.05        Albertson's Inc.                    2008/2038

Illinois            Freeport                           30,000            12.77        Albertson's/Lucky Stores            2008/2038
                    Rock Falls                         28,000            14.57        Albertson's/Lucky Stores            2008/2038

Indiana             Carmel                             39,000             4.11        Marsh Supermarkets, Inc.            2008/2038
                    Lawrence                           29,000             6.72        Marsh Supermarkets, Inc.            2008/2038

Kentucky            Louisville(1)                      10,000            11.57        The Kroger Co.                      2006/2011
                    Louisville(1)                      40,000            16.45        The Kroger Co.                      2006/2036

Louisiana           Baton Rouge                        58,000            12.21        Albertson's Inc.                    2007/2037
                    Minden                             35,000            11.55        Safeway, Inc.                       2007/2037

Montana             Billings(1)                        41,000             9.05        Safeway, Inc.                       2007/2015
                    Bozeman(1)(13)                     21,000             4.31        Albertson's Inc.                    2005/2030

Nebraska            Omaha                              73,000             5.32        Albertson's Inc.                    2006/2036
                    Omaha                              66,000            10.71        Albertson's Inc.                    2007/2037
                    Omaha                              67,000            10.99        Albertson's Inc.                    2007/2037

Nevada              Las Vegas(13)                      38,000             4.45        Albertson's Inc.                    2005/2035
                    Las Vegas(1)                       60,000             7.57        Albertson's Inc.                    2011/2021
                    Las Vegas(1)                       38,000            14.13        Albertson's Inc.                    2008/2023
                    Las Vegas (6)                       3,000             8.25        CSK Auto                            2009/2039
                    Reno(1)                            42,000            13.16        Albertson's Inc.                    2007/2037

New Jersey          Garwood(1)                         52,000            11.91        Pathmark                            2006/2021

New Mexico          Albuquerque(1)                     35,000            18.70        Safeway, Inc.                       2007/2037
                    Farmington (6)                      3,000             5.20        CSK Auto                            2009/2039
                    Las Cruces                         30,000            14.64        Albertson's Inc.                    2007/2037

New York            Portchester(1)                     59,000            18.89        Pathmark                            2008/2023

North Carolina      Charlotte                          34,000             2.90        Food Lion Stores, Inc.              2008/2038
                    Concord                            32,000             6.09        Food Lion Stores, Inc.              2008/2038
                    Jacksonville                       23,000             3.63        Food Lion Stores, Inc.              2008/2038
                    Jefferson(1)                       23,000             3.17        Food Lion Stores, Inc.              2008/2013
                    Lexington(1)                       23,000             6.02        Food Lion Stores, Inc.              2008/2038
                    Thomasville                        21,000             5.07        Food Lion Stores, Inc.              2008/2038
</TABLE>


                                       17
<PAGE>

<TABLE>
<CAPTION>
                                                    Approximate           2005                                             Lease
                                                     Leaseable       Annualized Base                                     Expiration/
                                                      Building      Rent Per sq. ft.                                       Option
                          Location                 Square Footage          ($)             Principal Tenant              Expiration
                          --------                 --------------          ---             ----------------              ----------
<S>                 <C>                             <C>                  <C>          <C>                                 <C>
Ohio                Cincinnati(1)                      26,000            14.39        The Kroger Co.                      2006/2011
                    Columbus(1)                        34,000            23.44        The Kroger Co.                      2006/2036
                    Franklin                           29,000             3.83        Marsh Supermarkets, Inc.            2008/2038

Oklahoma            Lawton(1)                          31,000            10.84        Safeway, Inc.                       2009/2039

Oregon              Beaverton                          42,000            13.02        Albertson's Inc.                    2009/2039
                    Grants Pass(1)                     34,000             8.65        Safeway, Inc.                       2009/2039
                    Portland                           42,000             8.29        Albertson's Inc.                    2006/2036
                    Salem                              52,000             7.81        Albertson's Inc.                    2009/2039

Pennsylvania        Doylestown                          4,000            38.81        Meritor Savings Bank                2008/2038
                    Lansdale                            4,000            41.04        Meritor Savings Bank                2008/2038
                    Lima                                4,000            44.66        Meritor Savings Bank                2008/2038
                    Philadelphia                       50,000            13.96        Pathmark                            2010/2035
                    Philadelphia                        4,000            36.58        Meritor Savings Bank                2008/2038
                    Philadelphia                        4,000            52.19        Meritor Savings Bank                2008/2038
                    Philadelphia                        4,000            11.77        Meritor Savings Bank                2008/2038
                    Philadelphia                        4,000            42.99        Meritor Savings Bank                2008/2038
                    Philadelphia                        4,000            49.12        Meritor Savings Bank                2008/2038
                    Philadelphia                        4,000            38.81        Meritor Savings Bank                2008/2038
                    Philadelphia                        4,000            39.09        Meritor Savings Bank                2008/2038
                    Philadelphia                        4,000            55.26        Meritor Savings Bank                2008/2038
                    Richboro                            4,000            36.02        Meritor Savings Bank                2008/2038
                    Wayne                               4,000            52.75        Meritor Savings Bank                2008/2038

South Carolina      Moncks Corner(1)                   23,000             2.69        Food Lion Stores, Inc.              2008/2018

Tennessee           Chattanooga(1)                     42,000            16.81        The Kroger Co.                      2008/2038
                    Paris(1)                           31,000            15.04        The Kroger Co.                      2008/2038

Texas               Carrolton(1)                       61,000             8.24        Skaggs Alpha Beta                   2006/2036
                    Dallas(1)                          68,000             7.89        The Kroger Co.                      2006/2019
                    Dallas (6)(16)                      3,000             0.92        Rent a Tire                           2005
                    El Paso (6)                         3,000             7.79        CSK Auto                            2009/2039
                    El Paso (6)                         3,000             6.44        CSK Auto                            2009/2039
                    Fort Worth(1)                      44,000            13.72        Safeway, Inc.                       2007/2037
                    Garland                            40,000            17.05        Safeway, Inc.                       2007/2037
                    Granbury(1)                        35,000            12.15        Safeway, Inc.                       2007/2037
                    Grand Prairie(1)                   49,000            10.02        Safeway, Inc.                       2009/2039
                    Greenville(1)                      48,000             4.20        Safeway, Inc.                       2006/2036
                    Hillsboro(1)                       35,000             9.62        Safeway, Inc.                       2007/2037
                    Houston(1)                         52,000            14.45        The Kroger Co.                      2006/2036
                    Lubbock(1)(13)                     54,000             2.66        Albertson's Inc.                    2005/2035
                    Lubbock (6)                         3,000             8.52        CSK Auto                            2009/2039
                    Midland                            60,000            10.53        Albertson's Inc.                    2009/2039
                    Rockdale(16)                       44,000             2.78        Wal-Mart Stores, Inc.               2005/2035
                    Taylor(16)                         62,000             0.86        Wal-Mart Stores, Inc.               2005/2035
                    Texarkana (13)                     46,000             4.72        Albertson's Inc.                    2006/2036
                    Woodville(16)                      44,000             0.91        Wal-Mart Stores, Inc.               2005/2035
</TABLE>


                                       18
<PAGE>

<TABLE>
<CAPTION>
                                                    Approximate           2005                                             Lease
                                                     Leaseable       Annualized Base                                     Expiration/
                                                      Building      Rent Per sq. ft.                                       Option
                          Location                 Square Footage          ($)             Principal Tenant              Expiration
                          --------                 --------------          ---             ----------------              ----------
<S>                 <C>                             <C>                  <C>          <C>                                 <C>
Utah                Bountiful(1)                       50,000             5.76        Albertson's Inc.                    2011/2016
                    Sandy(1)                           42,000             4.78        Albertson's Inc.                    2006/2016

Virginia            Staunton(1)                        23,000             7.20        Food Lion Stores, Inc.              2008/2038

Washington          Bothell(1)(13)                     28,000             3.45        Albertson's Inc.                    2005/2035
                    Edmonds(1)(13)                     35,000             3.49        Albertson's Inc.                    2005/2025
                    Everett                            35,000            17.22        Albertson's Inc.                    2007/2037
                    Federal Way                        42,000             9.76        Albertson's Inc.                    2007/2037
                    Graham(1)                          45,000             9.22        Safeway, Inc.                       2009/2039
                    Kent                               42,000            12.99        Albertson's Inc.                    2009/2039
                    Milton(1)                          45,000            10.63        Safeway, Inc.                       2009/2039
                    Port Orchard(1)                    28,000             4.52        Albertson's Inc.                    2005/2025
                    Redmond(1)                         45,000            11.26        Safeway, Inc.                       2009/2039
                    Spokane(13)                        42,000             5.16        Albertson's Inc.                    2005/2035
                    Spokane(1)                         39,000             9.63        Safeway, Inc.                       2009/2039
                    Woodinville(1)                     30,000             5.77        Albertson's Inc.                    2006/2031

Wyoming             Cheyenne(13)                       31,000             3.85        Albertson's Inc.                    2006/2036
                    Evanston                           10,000             3.91        Key Bancshares of Wyoming             2009
                    Evanston (15)                      28,000                -        Vacant                                  -
                                                    ---------            -----

           TOTAL/AVERAGE RETAIL                     5,427,000             9.41
                                                    =========            =====

OTHER:

Arizona             Flagstaff                          10,000               --        Vacant  (2)                            --
                    Sun City                           10,000            15.00        Furr's Restaurant Group (2)           2012

California          Colton                            668,000             3.52        Stater Bros. Markets                2008/2038
                    El Segundo(4)                     959,000            16.10        Raytheon                            2008/2038
                    Long Beach(1)(3)                  201,000            14.88        Raytheon                            2008/2038
                    Palo Alto(1)                      123,000            32.37        Xerox Corporation                   2008/2013

Colorado            Ft. Collins                        10,000            24.96        Lithia Motors (2)                     2012

Florida             Orlando(1)                        205,000             5.89        Walgreen Co.                        2006/2031

Maine               North Berwick                     821,000             3.03        United Technologies Corp.           2010/2035

New Mexico          Carlsbad                           10,000            15.00        Furr's Restaurant Group (2)           2012

New York            Saugerties (10)                    52,000             2.35        Rotron, Inc.                        2009/2029

Pennsylvania        New Kingston(1)                   430,000             2.84        Hershey Foods Corporation           2008/2038

South Carolina      Myrtle Beach(1)                    37,000             3.88        Food Lion Stores, Inc.              2008/2028
</TABLE>


                                       19
<PAGE>

<TABLE>
<CAPTION>
                                                    Approximate           2005                                             Lease
                                                     Leaseable       Annualized Base                                     Expiration/
                                                      Building      Rent Per sq. ft.                                       Option
                          Location                 Square Footage          ($)             Principal Tenant              Expiration
                          --------                 --------------          ---             ----------------              ----------
<S>                 <C>                            <C>                   <C>          <C>                                 <C>
Tennessee           Franklin(1)                       289,000             5.10        United Technologies Corp.           2008/2038
                    Memphis                           780,000             3.67        Sears Roebuck & Company             2007/2037

Texas               Lewisville                        256,000             5.89        Xerox Corporation                   2008/2038
                    Corpus Christi                     10,000            15.00        Furr's Restaurant Group (2)           2012
                    El Paso                            10,000            15.00        Furr's Restaurant Group (2)           2012
                    McAllen                            10,000            15.00        Furr's Restaurant Group (2)           2012
                    Victoria                           10,000            15.00        Furr's Restaurant Group (2)           2012

Wisconsin           Windsor(1)                        356,000             7.52        Walgreen Co.                        2007/2032
                                                   ----------            -----

           TOTAL/AVERAGE OTHER                      5,257,000             7.54
                                                   ==========            =====

           GRAND TOTAL/AVERAGE                     18,036,000            13.72
                                                   ==========            =====
</TABLE>

----------

(1)   Land held in land estate or pursuant to ground lease.
(2)   See "- Property Matters" below for information on these properties.
(3)   55% interest owned by your partnership.
(4)   53% interest owned by your partnership.
(5)   99% interest owned by your partnership.
(6)   49.9% interest owned by your partnership.
(7)   62.2% interest owned by your partnership.
(8)   45.19% interest owned by your partnership.
(9)   68.68% interest owned by your partnership.
(10)  57.75% interest owned by your partnership.
(11)  60.5% interest owned by your partnership.
(12)  32.1% interest owned by your partnership.
(13)  Your partnership received notice from Albertson's, Inc. ("Albertsons")
      exercising a purchase option in accordance with their lease on fifteen of
      your partnership's properties. Your partnership rejected this offer. The
      tenant could have elected to terminate the lease on July 1, 2004 for ten
      properties, October 1, 2004 for 3 properties and February 1, 2005 for 2
      properties but extended its lease for eighteen months until December 31,
      2005, March 31, 2006 and July 31, 2006, respectively. Rent during the
      eighteen month period is at the renewal rates. Albertsons still has a
      series of five year renewal options. As a condition of the rejection of
      the Albertson's purchase offer, your partnership was required to pay off
      the existing first mortgage debt of approximately $4,231,000, 40 days
      prior to the purchase option sale dates of July 1, 2004, October 1, 2004
      and February 1, 2005, respectively.
(14)  The lease on this property expired June 30, 2004 and the property is now
      vacant.
(15)  The lease on this property expired March 31, 2004 and the property is now
      vacant.
(16)  The tenant has notified your partnership that they will not renew their
      lease. Annualized base rent per square foot reflects rent through the
      remaining term of the lease.

      Property Matters. On January 22, 2002, Kmart Corporation, a tenant at 12
of your partnership's properties, filed for protection under Chapter 11 of the
United States Bankruptcy Code. Kmart had the right to either accept or reject
the leases. Kmart elected to reject the leases, which caused an immediate
termination of such leases. Your partnership re-leased 9 of the properties to
Furr's Restaurant Group for 10-year lease terms, one of the properties to Lithia
Motors for a 10-year lease term and another property for use as a restaurant for


                                       20
<PAGE>

a 5-year lease term. The tenant of the restaurant subsequently defaulted on its
lease. Your partnership pursued a claim against Kmart in the Bankruptcy Court.
The Bankruptcy Court has ordered that your partnership be awarded a Lease
Rejection Claim of $3,000,000. The claim will be satisfied in accordance with
the terms of Kmart's confirmed plan of reorganization. As part of this plan,
your partnership received 17,830 common shares of Kmart Holding Corporation
stock on January 1, 2005 having an estimated value of $1,783,000. Your
partnership subsequently sold the stock on February 15, 2005 for $1,767,991.
Your partnership anticipates receiving additional stock at a future time to
satisfy the remaining balance of the claim. In January 2003, Furr's Restaurant
Group filed for protection under Chapter 11 of the Bankruptcy Code and
subsequently rejected the lease on 3 sites. The remaining sites continue to be
leased to Furr's through 2012, and your partnership pursued a claim against
Furr's in the Bankruptcy Court for the 3 rejected sites. On May 14, 2004 your
partnership was awarded a net total of $304,967 on this claim by the Bankruptcy
Court. Furr's also has the right to reject the lease that now covers the
remaining sites. The aggregate annual rent for the 7 sites that are presently
leased is approximately $1,269,600 compared to the approximately $1,885,000 that
was scheduled to be received from Kmart on the 12 properties during its first
renewal term, which would have begun in February 2003. Your partnership has
purchased the land underlying all of the 12 original Kmart sites for $250,000.
In 2003, your partnership sold two of the vacant sites for $2,525,000. After
satisfying existing mortgage indebtedness and closing costs, there were no net
proceeds to your partnership. In 2004, your partnership sold two more vacant
sites for $2,100,000. There were approximately $1,955,000 of net proceeds to
your partnership after paying closing costs. On January 6, 2005, your
partnership sold the remaining vacant property and received net proceeds of
approximately $2,181,000.

      In November 2002, your partnership received notice from the tenant of a
property located in Stuart, Florida exercising the economic discontinuance
provisions of its lease. Under the terms of the notice, the tenant proposed to
terminate the lease effective July 11, 2003 and to purchase the property for
$631,000, an amount which would have been insufficient to satisfy existing
mortgage indebtedness. Your partnership rejected the offer and satisfied the
existing first mortgage of approximately $531,000. Your partnership sold the
property for a net sales price of approximately $1,800,000 in October 2004.
Approximately $1,189,000 of proceeds were used to make principal payments on
your partnership's loan with Bank of America and T-Two Partners.

      In January 2004, your partnership sold the property owned by it in
Morristown, New Jersey for $36,500,000. After satisfying existing mortgage
indebtedness and closing costs, the net sales proceeds were approximately
$7,532,000 which was applied to a principal payment on your partnership's loan
with Bank of America.

      In January 2004, your partnership sold the multi-tenanted office building
owned by it in Dallas, Texas for $13,000,000. After closing costs and
adjustments, the net sales proceeds were approximately $11,939,000, $8,954,000
of which was applied to a principal payment on your partnership's loan with Bank
of America.

      In 2004, your partnership sold 21 retail properties owned by it and others
which were formerly leased to CSK Auto for approximately $4,538,000. After
closing costs and adjustments, the net sales proceeds were approximately
$4,152,000, approximately $1,459,000 of which was used to pay off debt to T-Two
Partners.


                                       21
<PAGE>

      In March 2004, your partnership sold 3 retail properties formerly leased
to Key Bancshares of Wyoming for $1,948,000. After closing costs and
adjustments, the net sales proceeds were approximately $1,860,000, approximately
$1,351,000 of which was used to pay off debt to T-Two Partners and Bank of
America.

      In April 2004, your partnership sold a property located in Philadelphia,
Pennsylvania for $300,000. After payment of closing costs, your partnership used
sale proceeds to pay approximately $83,000 of principal owed to T-Two Partners
and approximately $138,000 to Bank of America. The lease on this property had
been terminated effective July 1, 2003. The tenant made a $276,576 early
termination payment, $160,803 of which was applied to payoff the existing first
mortgage indebtedness.

      Also in April 2004, your partnership sold 2 properties owned by it in
Aurora, Colorado and Mint Hill, North Carolina for $2,945,000 and $402,000,
respectively. After closing costs, your partnership paid approximately $557,000
towards principal on your note owed to T-Two Partners and $1,716,000 on your
note to Bank of America. The Aurora, Colorado property had formerly been leased
to Alberston's Inc. and your partnership had previously rejected an offer by
Alberston's to purchase the property pursuant to the economic discontinuance
provisions of the lease.

      In May 2004, your partnership sold a property located in Champaign,
Illinois to Lucky Stores, Inc. Lucky Stores, Inc. was the tenant at the property
and exercised their option to purchase the property pursuant to the lease. The
purchase price was approximately $879,000. Your partnership also received a
$942,189 lease termination payment. Your partnership used approximately $782,000
to pay down your loan with T-Two Partners and $212,000 to pay down your loan
with Bank of America.

      On July 29, 2004, your partnership sold 25 properties to Vornado Realty
Trust, a limited partner in your partnership and an affiliate of your
partnership's general partner, for a sales price of $63,800,000. The price paid
by Vornado Realty Trust was in excess of an offer received from an unaffiliated
third party. Your partnership used sales proceeds of $31,541,000 to pay off
contract right debt of which approximately $31,016,000 was paid to T-Two
Partners and approximately $23,733,000 to pay down the note payable to Bank of
America.

      During the second quarter of 2004, your partnership recorded a $9,600,000
impairment loss on a property located in Bedford, Texas. The impairment loss,
which is included in loss from discontinued operations in the Statement of
Operations, was recorded as a result of the existing tenant notifying your
partnership of their intention not to renew their existing lease that expired
June 30, 2004. Your partnership is attempting to sell the property.

      During the third quarter of 2004, your partnership recorded a $3,200,000
impairment loss on a property located in New Kingston, Pennsylvania which is
included in loss for discontinued operations. Your partnership is negotiating a
contract to sell the property and anticipates closing in the second quarter of
2005.

      Land Estates and Ground Leases. As indicated above, your partnership holds
either an estate for years with an option to lease the land upon expiration of
the estate for years or leases a number of its properties pursuant to ground
leases. Where your partnership holds an estate for years, the arrangement is for
a stated period of time, which is typically one day longer


                                       22
<PAGE>

than the primary term of the underlying lease. At the expiration of the estate
for years, title to the land will automatically vest in a remainderman. Your
partnership then has the option to lease the land from the remainderman for a
stated period of time, which would in all cases exceed the aggregate number of
years that a building lessee could extend its underlying lease by exercising all
of its renewal terms. In general, the rentals due under the ground leases are
nominal through the last renewal term of the improvements lease and then
increase to fair market rent. The remainderman in almost all cases has
subordinated its interest in the land to any first mortgage encumbering the
property, but has not, in any case, subordinated its interest in the land to the
second mortgage encumbering the property. Any second mortgage encumbers your
partnership's option to lease the land at the expiration of your partnership's
estate for years, and will encumber the leasehold interest in the land created
upon any exercise of the option to lease by your partnership. Your partnership
is continually seeking to acquire the "remainder" interests in its properties in
an effort to acquire fee title to the properties.

      With respect to those properties subject to a ground lease, your
partnership has the right to extend the ground lease for at least as long as the
aggregate number of years that a building lessee could extend its underlying
lease by exercising all of its renewal terms. In general, the ground rent is
passed through to the building lessee under the improvements lease.

      In June 2004, your partnership acquired the land underlying a property
located in Bedford, Texas. The land was acquired from an unrelated third party
for approximately $2,600,000.

Mortgage Indebtedness of Your Partnership

      Mortgage Loans. Of your partnership's properties, all but 77 properties
are secured by one or more first mortgage loans. As of December 31, 2004, the
first mortgage indebtedness (exclusive of indebtedness on properties being
marketed for sale that are included in discontinued operations), together with
the second mortgage indebtedness on a property in El Segundo, California, in
which your partnership has a 53% interest, had an aggregate outstanding
principal balance of $478,939,000 with interest at rates ranging from 5.0% per
annum to 10.4% per annum and maturities at various dates from March 1, 2005 to
January 1, 2024. Most of these mortgage loans are prepayable only with a yield
maintenance payment or prepayment penalty. The weighted average interest rate on
these loans is 8% per annum, and there were no variable rate loans at December
31, 2004.

      The following is a summary of scheduled principal maturities, by year,
under the mortgage debt described in the previous paragraph.

               Year                                         Amount
               ----                                         ------

               2005...............................     $  98,397,000
               2006...............................       131,481,000
               2007...............................        91,720,000
               2008...............................        68,399,000
               2009...............................        34,221,000
               Thereafter.........................        54,721,000
                                                       -------------
               Total..............................     $ 478,939,000
                                                       =============


                                       23
<PAGE>

      Second Mortgage Loans. A number of your partnership's properties are
encumbered by second mortgage loans. As of December 31, 2004, this second
mortgage indebtedness, which is referred to in our financial statements as
contract right mortgage notes, had an aggregate outstanding principal balance,
excluding discontinued operations of $263,072,000, with interest at rates
ranging from 8.11% per annum to 13.9% per annum and matured at various dates
from January 1, 2008 to January 1, 2025. Each of the loans is prepayable at any
time without premium or penalty subject to the prior or simultaneous
satisfaction of the underlying first mortgage loans. The weighted average
interest rate on these mortgage loans is 10.7% per annum. There are no variable
interest rates on these loans.

      The following is a summary of scheduled principal payable as of December
31, 2004, by year, under the junior mortgage debt described in the previous
paragraph.

               Year                                         Amount
               ----                                         ------

               2005...............................     $   9,213,000
               2006...............................        10,244,000
               2007...............................        17,963,000
               2008...............................        21,214,000
               2009...............................        19,609,000
               Thereafter.........................       184,829,000
                                                       -------------
               Total..............................     $ 263,072,000
                                                       =============

      All rights of the mortgagee under each of the second mortgages are fully
subject and subordinate to the rights granted the holders of the first
mortgages. The second mortgages generally grant the mortgagee a security
interest in and include a subordinate assignment of, among other things, your
partnership's interest in its underlying lease. Each second mortgage contains an
assignment of your partnership's interest in all rents, income, revenues,
claims, issues and profits from and in respect of all of the property encumbered
by that second mortgage.

      Substantially all of the second mortgages contain restrictions affecting
the ability of the applicable property-owning subsidiary of your partnership to
refinance its existing first mortgage loan or incur additional financing during
the primary term of the relevant lease. The principal restriction on such first
mortgage financing is a debt service coverage test under which the scheduled
rental payments from the properties at the time of such financing must be at
least 103% of your partnership's aggregate debt service payments due under the
second mortgage and such financing (except that if a lease is no longer in
effect, the debt service coverage test may be satisfied based on the scheduled
rent payments that otherwise would have been payable under the lease for the
period that the financing is to be in place). There is also a general risk that
a property encumbered by a second mortgage will not generate sufficient cash
flow to satisfy the debt service payments on the second mortgage loan after
satisfying payments on the first mortgage encumbering the property. However, the
combination of the Newkirk properties pursuant to the exchange has lessened this
risk to your partnership by substantially increasing the capital resources of
your partnership and thereby enhancing your partnership's ability to respond to
the capital needs of any particular property. In addition, as described under
"ITEM 1. BUSINESS - Description of Assets - The Subordinate Mortgage Interests,"
your partnership has an option to acquire the interests in T-Two Partners and
thereby effectively eliminate substantially all of its subordinate indebtedness.


                                       24
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

      In July 2002, an action was commenced in the Connecticut Superior Court
against, among others, your partnership's general partner and various affiliates
of your partnership's general partner. Plaintiffs are four limited partners of
three of the Newkirk partnerships. In order to avoid the expenses, distraction,
and uncertainties of litigation, the defendants entered into a settlement
agreement dated December 31, 2003 to settle the litigation. On April 16, 2004,
the Court approved the settlement. The settlement provides for the following
material terms: (i) the Newkirk Group will convey to unitholders of the Newkirk
partnerships who are unaffiliated with the general partner and who received
limited partnership units in the exchange, units in your partnership equal to 1%
of the outstanding units; (ii) your partnership will pay $1.5 million to an
escrow agent for the benefit of unaffiliated unitholders who were entitled to
receive units in the exchange transaction; and (iii) your partnership will pay
$2.0 million to an escrow agent for the benefit of unitholders of the Newkirk
partnerships who were entitled to receive cash in the exchange. Your partnership
accrued $3.5 million with respect to this matter, which is included in general
and administrative expense in the consolidated statement of operations for the
year ended December 31, 2003. In April 2004, your partnership paid out $3.5
million with respect to this matter. A hearing has been set for April 11, 2005,
at which time it is expected that the Court will approve the allocation of the
1% of outstanding units for distribution.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report through the solicitation of
proxies or otherwise.


                                       25
<PAGE>

                                     PART II

ITEM 5. MARKET FOR LIMITED PARTNERSHIP UNITS, RELATED SECURITY HOLDER MATTERS
        AND ISSUER PURCHASES OF EQUITY SECURITIES

General

      There is no established public trading market for the units. As of
December 31, 2004, there were 1,360 holders of record of units.

Distributions

      Since January 1, 2003 your partnership has made the following
distributions aggregating approximately $80,837,000.

                  Date                         Per Unit Distribution
                  ----                         ---------------------

                  2/03                                  $.75
                  4/03                                 $2.22 (1)
                  5/03                                  $.80
                  8/03                                  $.85
                 11/03                                  $.90
                  2/04                                 $1.75
                  5/04                                 $1.80
                  9/04                                 $1.85
                 11/04                                 $1.90

----------
(1)   This distribution represents proceeds from the sale of your partnership's
      property that was leased to Kaiser Aluminum.

      Your partnership currently anticipates making regular quarterly
distributions in respect of your partnership's operations as well as special
distributions in respect of future property sales. However, future distributions
are dependent upon many factors, including your partnership's earnings, capital
requirements, property sales, financial condition and available cash flow. In
this regard, your partnership's Bank of America loan requires your partnership
to maintain liquid assets of at least $5,000,000 and a minimum consolidated net
worth equal to $500,000,000 during the initial loan term and up to $550,000,000
during the last extended term. In addition, under the terms of the loan, your
partnership is prohibited from making distributions if its unconsolidated debt
service coverage ratio falls below 1.75 during the initial period of the loan or
2.0 during the extension periods. These and other restrictions relating to the
Bank of America loan that are discussed above under "ITEM 1. BUSINESS -
Description of Indebtedness" could impact your partnership's ability to make
distributions in the future.


                                       26
<PAGE>

Purchase of Units

      Your partnership repurchased 1,729 of its units during the fourth quarter
of 2004.

                                    Units
                                 Repurchased           Price Per Unit
                                 -----------           --------------

                October               597                $   35.00
                November            1,132                $   35.00
                December               --                       --
                                    -----
                                    1,729
                                    =====


                                       27
<PAGE>

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

      The following financial data are derived from the audited consolidated
financial statements of your partnership for the years ended December 31, 2004,
2003 and 2002 and from the combined consolidated financial statements of Newkirk
RE Holdings, LLC and Newkirk NL Holdings, LLC ("Predecessor Entity") for the
years ended December 31, 2001 and 2000. The financial data set forth below
should be read in conjunction with "ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" below and "The Consolidated
Financial Statements" and the notes thereto appearing elsewhere in this report.

      During the years ended December 31, 2001 and 2000 the Predecessor Entity
acquired additional limited partnership interests in entities it had recorded on
an equity basis. At the point sufficient limited partnership interests were
acquired to assert control over the limited partnership the Predecessor Entity
consolidated the respective limited partnership resulting in the recognition of
cash balances and other assets and liabilities as shown below.

<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                                  (In thousands, except unit data)
                            ---------------------------------------------------------------------------

                                2004            2003            2002            2001            2000
                                                                            Predecessor     Predecessor
-------------------------------------------------------------------------------------------------------
<S>                         <C>             <C>             <C>             <C>             <C>
Total Revenue               $  249,528      $  262,153      $  251,886      $  258,975      $   35,255

Income from Continuing
   Operations                   97,942          89,903          93,891          46,387          40,004

Income from Continuing
   Operations per Unit           15.50           14.20           15.34              --              --

Total Assets                 1,237,129       1,384,094       1,476,623       1,476,922         434,974

Long Term Debt                 907,339       1,104,231       1,238,494       1,024,539         157,058

Cash Distributions
   per Unit                 $     7.30      $     5.52      $    32.16      $       --      $       --
</TABLE>


                                       28
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

      The discussion of cash flows in the Liquidity and Capital Resources
section of Management's Discussion and Analysis of Financial Condition and
Results of Operations for the years ended December 31, 2004, 2003 and 2002
reflects a restatement for the change in restricted cash of ($3,068,000),
$2,961,000 and ($8,109,000) to adjust as provided by investing activities.

Liquidity and Capital Resources

      At December 31, 2004 your partnership owned an interest in 188 Newkirk
properties and limited partnership interests in seven partnerships which own 22
properties whose operations are consolidated for financial reporting purposes.
Almost all of the properties are leased to one or more tenants pursuant to net
leases. Approximately 90% of the original lease terms expire between 2005 and
2009. There are three properties which are vacant and not leased which represent
approximately 245,000 square feet of your partnership's Newkirk properties. The
remaining 17,791,000 square feet or 98.6% are leased. Your partnership also
holds subordinated interests in a securitized pool of notes evidencing first
mortgage indebtedness secured by certain of your partnership's properties as
well as other properties, limited partnership interests in various partnerships
that own commercial net-leased properties, an interest in a management company
that provides services for your partnership as well as other real estate
partnerships, ground leases, remainder interests or the right to acquire
remainder interests in various properties and miscellaneous other assets. In
addition, your partnership, or an affiliate of your general partner, controls
the general partner of the real estate limited partnerships in which your
partnership owns limited partnership interests, and your partnership has an
option to acquire in the future second mortgage debt secured by a substantial
number of your partnership's properties as well as the properties owned by eight
other partnerships.

      Your partnership receives rental income from its properties which is its
primary source of liquidity. Pursuant to the terms of the leases, the tenants
are responsible for substantially all of the operating expenses with respect to
the properties, including maintenance, capital improvements, insurance and
taxes. If a tenant fails to exercise its renewal option or exercises its option
to terminate its lease early, your partnership will be required to either sell
the property or procure a new tenant. If your partnership attempts to procure a
new tenant, it will be competing for new tenants in the then current rental
markets, which may not be able to support terms as favorable as those contained
in the original lease options.

      The level of liquidity based on cash and cash equivalents experienced a
$11,386,000 decrease at December 31, 2004 as compared to December 31, 2003. The
decrease was due to net cash provided by operating activities of $154,440,000
and net cash provided by investing activities of $92,035,000, which were more
than offset by net cash used in financing activities of $257,861,000. Net cash
provided by investing activities included $98,771,000 of net proceeds from
disposal of real estate, which were partially offset by land acquisitions of
$2,557,000, an increase in restricted cash of $3,068,000 and investments in
limited partnership interests of $1,111,000. Net cash used in financing
activities consisted primarily of mortgage loan and contract right mortgage loan
payoffs of $48,350,000, principal payments on mortgage, contract right and notes
payable of $152,813,000 and partner distributions of $46,106,000. At December
31, 2004, your partnership had $29,533,000, of which $8,216,000 is restricted,
in cash reserves which were invested primarily in money market mutual funds.


                                       29
<PAGE>

A summary of your partnership's obligations excluding discontinued operations is
as follows:

<TABLE>
<CAPTION>
                                                                 (in thousands)
                                                             Payment due by period
                                   --------------------------------------------------------------------------
                                                    Less than          1-3             3-5          More than
                                      Total          1 year           years           years          5 years
                                      -----          ------           -----           -----          -------
<S>                                <C>             <C>             <C>             <C>             <C>
Mortgage Notes and                 $  489,955      $  109,413      $  223,201      $  102,620      $   54,721
   Accrued Interest Payable
Contract Right Mortgage
   Notes and Accrued Interest         354,197          22,060          47,525          53,247         231,365
   Payable
Note Payable                          165,328              --         165,328              --              --
Ground Lease Obligations                9,309           3,013           4,174           1,944             178
                                   ----------      ----------      ----------      ----------      ----------

Total                              $1,018,789      $  134,486      $  440,228      $  157,811      $  286,264
                                   ==========      ==========      ==========      ==========      ==========
</TABLE>

Off-Balance Sheet Arrangements

      On November 24, 2003, at the same time as your partnership obtained its
loan from Bank of America, T-Two Partners obtained a $316,526,573 loan from Bank
of America. We refer to this loan as the T-Two Loan. The interest rate, maturity
date and principal terms of the T-Two Loan are the same as your partnership's
loan. The T-Two Loan is secured by all the assets of T-Two Partners, including
the second mortgage loans receivable from your partnership. Your partnership
guaranteed repayment of the T-Two Loan to Bank of America. Currently, your
partnership believes it has no exposure to loss under the guarantee since the
T-Two Loan is over collateralized. In consideration for your partnership's
guarantee, the owners of T-Two Partners agreed to the elimination of their put
option, and to provide a credit line to your partnership bearing interest at
LIBOR plus 450 basis points. Any amounts advanced to your partnership under the
credit line would have to be repaid in full before your partnership could
purchase the interests in T-Two Partners if your partnership exercises the
purchase option described below. There are no amounts that have been advanced
under the credit line.

      Your partnership's call option had previously provided for the acquisition
of the interests in T-Two Partners in January 2008 in exchange for a number of
units in your partnership to be determined at the time of exercise based on an
agreed-upon formula. Your partnership and the owners of T-Two Partners modified
your partnership's option in certain respects. First, the option can now be
exercised by your partnership at any time before November 24, 2009 or at any
other time mutually agreed upon by the parties. Second, the purchase price is
payable in cash rather than units in your partnership. Finally, the formula for
determining the purchase price payable by your partnership if it exercises the
option has been revised in a manner that your partnership's general partner
believes to be significantly more favorable to your partnership than the formula


                                       30
<PAGE>

previously in effect. Specifically, the purchase price is calculated as follows:
the sum of $316,526,573 plus T-Two Partners' costs of obtaining the T-Two Loan
(approximately $7,346,000) and administering the trust that holds the second
mortgage loans, together with interest on the foregoing sum at the effective
rate of interest paid by T-Two Partners on the T-Two Loan, less all payments
made from and after November 24, 2003 on the second mortgage loans.

      Your partnership has determined that T-Two Parners is a variable interest
entity but that your partnership is not the primary beneficiary of the variable
interest entity.

Other Matters

      Your partnership received notice from Albertson's indicating that it
intended to exercise its right to terminate the lease for the supermarket
property located in Stuart, Florida. In accordance with the economic
discontinuance provision of its lease, Albertson's made a rejectable offer to
purchase the property for an amount stipulated in the lease of approximately
$631,000. Your partnership elected to reject the offer. As a result of the
rejection, your partnership was required to payoff the first mortgage
encumbering the property, which had a balance of approximately $531,000. Your
partnership satisfied the first mortgage using its cash reserves. Your
partnership sold this property in October 2004 for a sale price of $1,950,000.

      Your partnership received notice from Albertsons exercising a purchase
option in accordance with their lease on fifteen of your partnership's
properties. Your partnership rejected this offer. If your partnership accepted
the offer, the sale would have been effective July 1, 2004 for 10 properties,
October 1, 2004 for 3 properties and February 1, 2005 for 2 properties. Since
your partnership rejected this offer, the tenant elected to extend its lease for
eighteen months until December 31, 2005, March 31, 2006 or July 31, 2006,
respectively. Rent during the eighteen month period is at the renewal rates.
Alberstons still has a series of five year renewal options.

      In January 2004, your partnership sold the property owned by it in
Morristown, New Jersey for $36,500,000. After satisfying existing mortgage
indebtedness and closing costs, the net sales proceeds were approximately
$7,532,000 which was applied to a principal payment on your partnership's loan
with Bank of America.

      In January 2004, your partnership sold the multi-tenanted office building
owned by it in Dallas, Texas for $13,000,000. After closing costs and
adjustments, the net sales proceeds were approximately $11,939,000, $8,954,000
of which was applied to a principal payment on your partnership's loan with Bank
of America.

      In 2004, your partnership sold 21 retail properties owned by it and others
which were formerly leased to CSK Auto for approximately $4,538,000. After
closing costs and adjustments, the net sales proceeds were approximately
$4,152,000, approximately $1,459,000 of which was used to pay off debt to T-Two
Partners.

      In March 2004, your partnership sold 3 retail properties formerly leased
to Key Bancshares of Wyoming for $1,948,000. After closing costs and
adjustments, the net sales proceeds were approximately $1,860,000, approximately
$1,351,000 of which was used to pay off debt to T-Two Partners and Bank of
America.


                                       31
<PAGE>

      In April 2004, your partnership sold a property located in Philadelphia,
Pennsylvania for $300,000. After payment of closing costs, your partnership used
sale proceeds to pay approximately $83,000 of principal owed to T-Two Partners
and approximately $138,000 to Bank of America. The lease on this property had
been terminated effective July 1, 2003. The tenant made a $276,576 early
termination payment, $160,803 of which was applied to payoff the existing first
mortgage indebtedness.

      Also in April 2004, your partnership sold 2 properties owned by it in
Aurora, Colorado and Mint Hill, North Carolina for $2,945,000 and $402,000,
respectively. After closing costs, your partnership paid approximately $557,000
towards principal on your note owed to T-Two Partners and $1,716,000 on your
note to Bank of America. The Aurora, Colorado property had formerly been leased
to Alberston's Inc. and your partnership had previously rejected an offer by
Alberston's to purchase the property pursuant to the economic discontinuance
provisions of the lease.

      In May 2004, your partnership sold a property located in Champaign,
Illinois to Lucky Stores, Inc. Lucky Stores, Inc. was the tenant at the property
and exercised their option to purchase the property pursuant to the lease. The
purchase price was approximately $879,000. Your partnership also received a
$942,189 lease termination payment. Your partnership used approximately $782,000
to pay down your loan with T-Two Partners and $212,000 to pay down your loan
with Bank of America.

      During the second quarter of 2004, your partnership recorded a $9,600,000
impairment loss on a property located in Bedford, Texas. The impairment loss,
which is included in loss from discontinued operations in the Statement of
Operations, was recorded as a result of the existing tenants' lease expiring
June 30, 2004. Your partnership is attempting to sell the property.

      In June 2004, your partnership acquired the land underlying one of its
properties in Bedford, Texas. The land was acquired from an unaffiliated party
for $2,555,000.

      In June 2004, your partnership acquired for $297,500, pursuant to a tender
offer, approximately 9.85% of the total limited partnership units outstanding in
one partially owned consolidated partnership. The partnership currently owns
approximately 45.2% of the limited partnership.

      In July 2004, your partnership acquired for $472,500 and $325,000,
pursuant to two separate tender offers, approximately 7% and 4.5% of the total
limited partnership units outstanding in two partially owned partnerships. Your
partnership currently owns approximately 62.2% in one of the partnerships whose
operations are consolidated and 45.3% in the other partnership.

      During the third quarter of 2004, your partnership recorded a $3,200,000
impairment loss on a property located in New Kingston, Pennsylvania which is
included in loss from discontinued operations. Your partnership is negotiating a
contract to sell the property and anticipates closing in the second quarter of
2005.


                                       32
<PAGE>

      On July 29, 2004, your partnership sold 25 properties to Vornado, a
limited partner in your partnership and an affiliate of your partnership's
general partner, for a sales price of $63,800,000. The price paid by Vornado
Realty Trust was in excess of an offer received from an unaffiliated third
party. Your partnership used sales proceeds of $31,500,000 to pay off contract
right debt and $23,700,000 to pay down the note payable netting approximately
$8,600,000 of cash. For financial reporting purposes, your partnership
recognized a net gain on the sale of the properties of approximately
$38,700,000.

Results of Operations

Comparison of the year ended December 31, 2004 to the year ended December 31,
2003.

Income from Continuing Operations

      Income from continuing operations increased by $8,039,000 to $97,942,000
for the year ended December 31, 2004 from $89,903,000 for the year ended
December 31, 2003. As more fully described below, this increase is attributable
to a decrease in total expenses of $20,205,000 and an increase in equity in
income from investments in limited partnerships of $608,000 which was partially
offset by an increase in minority interest expense of $149,000 and a decrease in
total revenue of $12,625,000.

Rental Income

      Rental income decreased by $12,701,000 or approximately 5% to $246,062,000
for the year ended December 31, 2004 from $258,763,000 for the year ended
December 31, 2003. The decrease was primarily due to lower rental income
resulting from property sales and lease renewals at rates that are lower than
the primary term rates. Leased square footage at December 31, 2004 and 2003 is
approximately 99%.

Interest Income

      Interest income increased by $162,000 or approximately 5% to $3,134,000
for the year ended December 31, 2004 from $2,972,000 for the year ended December
31, 2003. The increase was primarily due to interest income of $456,000 on a
loan to T-Two Partners, which was partially offset by a decrease in interest
income of $107,000 on a note held by Newkirk Finco LLC and decreases in overall
invested cash balances.

Management Fee Income

      Management fee income decreased by $86,000 or approximately 21% to
$332,000 for the year ended December 31, 2004 from $418,000 for the year ended
December 31, 2003. The decrease is attributable to fewer properties under
management.

Interest Expense and Gain (Loss) from the Early Extinguishment of Debt

      Interest expense and gain (loss) from the early extinguishment of debt
decreased by $13,832,000 or approximately 13% to $88,971,000 for the year ended
December 31, 2004 compared to $102,803,000 for the year ended December 31, 2003.
The decrease was primarily due to loan payoffs of $48,350,000, normal scheduled
principal payments of $109,785,000 and payments on the note payable to Bank of
America of $43,028,000 and assumption of debt on a sold property of $28,460,000.


                                       33
<PAGE>

Depreciation

      Depreciation expense remained relatively consistent at $36,044,000 for the
year ended December 31, 2004 compared to $36,067,000 for the year ended December
31, 2003.

General and Administrative

      General and administrative expenses decreased by $5,053,000 or
approximately 57% to $3,765,000 for the year ended December 31, 2004 compared to
$8,818,000 for the year ended December 31, 2003. The decrease is primarily the
result of a $4,437,000 decrease in legal costs due to a $3,600,000 legal
settlements in 2003.

Amortization Expense

      Amortization expense decreased by $1,934,000 or approximately 41% to
$2,796,000 for the year ended December 31, 2004 as compared to $4,730,000 for
the year ended December 31, 2003. The decrease in amortization expense is
primarily the result of the refinancing of the Bank of America debt.

Ground Rent

      Ground rent expense increased by $16,000 to $3,067,000 for the year ended
December 31, 2004 as compared to $3,051,000 for the year ended December 31,
2003. The increase in ground rent expense is primarily the result of increases
in ground rent rates for two partnerships.

State and Local Taxes

      State and local tax expense increased by $621,000 or approximately 82% to
$1,379,000 for the year ended December 31, 2004 compared to $758,000 for the
year ended December 31, 2003. The increase is the result of higher taxable
income in several states with partnership income tax requirements.

Equity in Income from Investments in Limited Partnerships

      Equity in income from investments in limited partnerships increased by
$608,000 or approximately 30% to $2,662,000 for the year ended December 31, 2004
compared to $2,054,000 for the year ended December 31, 2003. This increase was
due to additional purchases of equity positions in limited partnerships.

Minority Interest Expense

      Minority interest expense increased by $149,000 or approximately 1% to
$18,226,000 for the year ended December 31, 2004 compared to $18,077,000 for the
year ended December 31, 2003. The increase was the result of increased
profitability at the non-wholly owned partnerships.


                                       34
<PAGE>

Discontinued Operations

      During the year ended December 31, 2004, your partnership sold 58
properties for a combined net sales price of $127,231,000. Your partnership
recognized a net gain on disposal of these properties of $49,350,000. During the
year ended December 31, 2003, your partnership sold fourteen properties for a
combined net sales price of $156,409,000. Your partnership recognized a net gain
on disposal of these properties of $29,514,000. The sale and operations of these
properties for all periods presented have been recorded as discontinued
operations in compliance with the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or
Disposal of Long Lived Assets."

Comparison of the year ended December 31, 2003 to the year ended December 31,
2002.

Income from Continuing Operations

      Income from continuing operations decreased by $3,988,000 to $89,903,000
for the year ended December 31, 2003 from $93,891,000 for the year ended
December 31, 2002. As more fully described below, this decrease is attributable
to an increase in total expenses of $8,927,000 and an increase in minority
interest expense of $7,382,000, which was partially offset by an increase in
total revenue of $10,267,000 and an increase in equity in income from
investments in limited partnerships of $2,054,000.

Rental Income

      Rental income increased by $10,922,000 or approximately 4% to $258,763,000
for the year ended December 31, 2003 from $247,841,000 for the year ended
December 31, 2002. The increase was primarily due to five newly acquired
consolidated partnerships which contributed approximately $13,810,000 in rental
income. This increase was partially offset by lower rental income received from
properties previously leased by Kmart of $555,000 and lower rental income on
lease renewals or renegotiations of $2,333,000.

Interest Income

      Interest income decreased by $311,000 or approximately 9% to $2,972,000
for the year ended December 31, 2003 from $3,283,000 for the year ended December
31, 2002. The decrease was due to the payoff of a loan receivable and overall
lower interest rates on the invested cash balances.

Management Fee Income

      Management fee income decreased by $344,000 or approximately 45% to
$418,000 for the year ended December 31, 2003 from $762,000 for the year ended
December 31, 2002. The decrease is attributable to fewer properties under
management.

Interest Expense and Gain (Loss) from the Early Extinguishment of Debt

      Interest expense and gain (loss) from the early extinguishment of debt
decreased by $4,061,000 or approximately 4% to $102,803,000 for the year ended
December 31, 2003 compared to $106,864,000 for the year ended December 31, 2002.
The decrease was primarily due to loan payoffs of $266,599,000, normal scheduled
principal payments of $120,111,000 and payments on the note payable of
$34,110,000 and assumption of debt on a sold property of $94,918,000, which were
only partially offset with proceeds from new debt of $262,338,000.


                                       35
<PAGE>

Depreciation

      Depreciation expense increased by $10,077,000 or approximately 39% to
$36,067,000 for the year ended December 31, 2003 compared to $25,990,000 for the
year ended December 31, 2002. The increase is primarily attributable to changing
the estimated useful lives of the real estate and additional depreciation
expense from five newly acquired consolidated partnerships. A significant
percentage of the increase in depreciation expense relating to the change in
estimated useful lives is offset by a corresponding decrease in minority
interest expense.

General and Administrative

      General and administrative expenses increased by $2,302,000 or
approximately 35% to $8,818,000 for the year ended December 31, 2003 compared to
$6,516,000 for the year ended December 31, 2002. The increase is the result of
$3,600,000 incurred related to legal settlements. This increase was partially
offset by one-time organizational expenses relating to the formation of your
partnership in 2002.

Amortization Expense

      Amortization expense increased by $635,000 or approximately 16% to
$4,730,000 for the year ended December 31, 2003 as compared to $4,095,000 for
the year ended December 31, 2002. The increase in amortization expense is the
result of the refinancing of the Bank of America debt which was partially offset
by savings from loans which have been paid off.

Ground Rent

      Ground rent expense increased by $56,000 to $3,051,000 for the year ended
December 31, 2003 as compared to $2,995,000 for the year ended December 31,
2002. The increase in ground rent expense is the result of the addition of new
properties in 2003 partially offset by land purchases made in 2003.

State and Local Taxes

      State and local tax expense decreased by $82,000 or approximately 10% to
$758,000 for the year ended December 31, 2003 compared to $840,000 for the year
ended December 31, 2002. The decrease is the result of tax savings in the State
of New Jersey.

Equity in Income from Investments in Limited Partnerships

      Equity in income from investments in limited partnerships is the result of
the January 2003 purchase of equity positions in five new partnerships which are
not consolidated with your partnership for financial reporting purposes.

Minority Interest Expense

      Minority interest expense increased by $7,382,000 or approximately 69% to
$18,077,000 for the year ended December 31, 2003 compared to $10,695,000 for the
year ended December 31, 2002. The increase was the result of minority interests
in the amount of $5,365,000 related to the five newly consolidated partnerships.
The remaining increase of $2,027,000 related to increased profitability at the
previous partially owned partnerships.


                                       36
<PAGE>

Discontinued Operations

      During the year ended December 31, 2003, your partnership sold fourteen
properties for a combined net sales price of $156,409,000. Your partnership
recognized a net gain on disposal of these properties of $29,514,000. During the
year ended December 31, 2002, your partnership sold two properties for a
combined net sales price of approximately $3,200,000. Your partnership
recognized a net loss on disposal of these properties of $983,000. The sale and
operations of these properties for all periods presented have been recorded as
discontinued operations in compliance with the provisions of SFAS No. 144.

Critical Accounting Policies

      The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions in certain circumstances
that affect amounts reported in the accompanying consolidated financial
statements and related notes. In preparing these consolidated financial
statements, management has made its best estimates and judgments of certain
amounts included in the consolidated financial statements, giving due
consideration to materiality. Your partnership does not believe there is a great
likelihood that materially different amounts would be reported related to the
accounting policies described below. However, application of these accounting
policies involves the exercise of judgment and use of assumptions as to future
uncertainties and, as a result, actual results could differ from these
estimates.

      Impairment of long-lived assets. At December 31, 2004, your partnership
had $1,032,797,000 of real estate (net) and $27,536,000 of real estate held for
sale (net), which combined, account for approximately 86% of your partnership's
total assets. Buildings and improvements are carried at cost net of adjustments
for depreciation and amortization. The fair values of your partnership's
buildings and improvements are dependent on the performance of the properties.

      Your partnership evaluates recoverability of the net carrying value of its
real estate and related assets at least annually, and more often if
circumstances dictate. If there is an indication that the carrying value of a
property might not be recoverable, your partnership prepares an estimate of the
future undiscounted cash flows expected to result from the use of the property
and its eventual disposition, generally over a five-year holding period. In
performing this review, management takes into account, among other things, the
existing occupancy, the expected leasing prospects of the property and the
economic situation in the region where the property is located.

      If the sum of the expected future undiscounted cash flows is less than the
carrying amount of the property, your partnership recognizes an impairment loss
and reduces the carrying amount of the asset to its estimated fair value. Fair
value is the amount at which the asset could be bought or sold in a current
transaction between willing parties, that is, other than in a forced or
liquidation sale. Management estimates fair value using discounted cash flows or


                                       37
<PAGE>

market comparables, as most appropriate for each property. Independent certified
appraisers are utilized to assist management when warranted. During the years
ended December 31, 2004 and December 31, 2003, your partnership recorded
$13,065,000 and $1,560,000, respectively, in allowances for impairment.

      Because the cash flows used to evaluate the recoverability of the assets
and their fair values are based upon projections of future economic events, such
as property occupancy rates, rental rates, operating cost inflation and market
capitalization rates, which are inherently subjective, the amounts ultimately
realized at disposition may differ materially from the net carrying values at
the balance sheet dates. The cash flows and market comparables used in this
process are based on good faith estimates and assumptions developed by
management.

      Unanticipated events and circumstances may occur, and some assumptions may
not materialize; therefore, actual results may vary from the estimates, and
variances may be material. The Partnership may provide additional write-downs,
which could be material in subsequent years if real estate markets or local
economic conditions change.

      Useful lives of long-lived assets. Building and improvements and certain
other long-lived assets are depreciated or amortized over their useful lives.
Depreciation and amortization are computed using the straight-line method over
the useful life of the building and improvements. The cost of properties
represents the initial cost of the properties to your partnership plus
acquisition and closing costs less impairment adjustments.

      Recently Issued Accounting Standards. In December of 2004, the FASB issued
SFAS No.153, "Exchange of Nonmonetary Assets - An Amendment of APB Opinion 29."
The amendments made by SFAS No.153 are based on the principle that exchanges of
nonmonetary assets should be measured based on the fair value of the assets
exchanged. Further, the amendments eliminate the narrow exception for
nonmonetary exchanges of similar productive assets and replaced it with a
broader exception of exchanges of nonmonetary assets that do not have commercial
substance. SFAS No.153 is effective for nonmonetary asset exchanges occurring in
fiscal periods beginning after June 15, 2005. Your partnership does not believe
the adoption of SFAS No.153 will have a material impact on your partnership's
consolidated financial statements.

      In June 2005, the FASB ratified the EITF's consensus on Issue 04-5,
"Determining Whether a General Partner, or the General Partners as a Group,
Controls a Limited Partnership or Similar Entity When the Limited Partners Have
Certain Rights." Issue 04-5 provides a framework for determining whether a
general partner controls, and should consolidate, a limited partnership or a
similar entity. It is effective after June 29, 2005, for all newly formed
limited partnerships and for any pre-existing limited partnerships that modify
their partnership agreements after that date. General partners of all other
limited partnerships will apply the consensus no later than the beginning of the
first reporting period in fiscal years beginning after December 15, 2005. The
Partnership has not completed the process of evaluating the impact that will
result from the adoption of the consensus in EITF 04-5 on the Partnership's
consolidated financial statements.


                                       38
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Your partnership has both fixed and variable rate debt, as well as one
interest rate cap. All financial instruments were entered into for other than
trading purposes. A change in interest rates on the fixed rate portion of the
debt portfolio or the interest rate cap impacts the net financial instrument
position, but has no impact on interest incurred or cash flows. A change in
interest rates on the variable portion of the debt portfolio impacts the
interest incurred and cash flows, but does not impact the net financial
instrument position.

      The fair value of your partnership's debt, based on discounted cash flows
at the current market conditions and interest rates for the remaining term of
such debt was less than the aggregate carrying amount by approximately
$9,300,000 at December 31, 2004. The change in the fair value of your
partnership's debt as of December 31, 2004 reflects the impact of the T-Two
Partners refinancing affected by your partnership in November 2003.

      At December 31, 2004, your partnership had one loan which had a variable
interest rate. The loan which had an outstanding balance of $165.3 million at
December 31, 2004, was obtained in November 2003 and has a three-year term.
Interest on the outstanding balance accrues at a rate equal to, at your
partnership's option, either, (i) LIBOR rate (as defined) plus 450 basis points
or (ii) the bank's prime rate plus 250 basis points. Your partnership purchased
an interest rate cap on the loan so that the interest rate would be capped at
9.5%.

      Your partnership elected to pay the loan based on the LIBOR rate. The
following table shows what the annual effect of a change in the LIBOR rate
(2.51% at December 31, 2004) will have on interest expense based upon increases
up to the cap of 9.5% all in interest rate.

                                                 Change in LIBOR
                                                 (In thousands)
                                   ---------------------------------------------
                                     1%                2%                  2.49%
                                     --                --                  -----

Additional interest expense        $1,653            $3,307               $4,117


                                       39
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      See "Index to Financial Statements" under "ITEM 15. EXHIBITS AND FINANCIAL
STATEMENT SCHEDULES"

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

      None.


                                       40
<PAGE>

ITEM 9A. CONTROLS AND PROCEDURES

      In accordance with Exchange Act Rules 13a-15 and 15d-15, your partnership
carried out an evaluation, under the supervision and with the participation of
the Chief Executive Officer and Chief Financial Officer of your general
partner's manager, as well as other key members of your partnership's
management, of the effectiveness of your partnership's disclosure controls and
procedures as of the end of the period covered by this report. Based on that
evaluation, the Partnership's Chief Executive Officer and Chief Financial
Officer concluded that the Partnership's disclosure controls and procedures were
not effective, as of the end of the period covered by this report, solely
because of the restatement described in Note 13 of the consolidated financial
statements.

      No change occurred in your partnership's internal controls concerning
financial reporting during the fourth quarter of the fiscal year ended December
31, 2004 that has materially affected, or is reasonably likely to materially
affect, your partnership's internal controls over financial reporting.

ITEM 9B. OTHER INFORMATION

      None.


                                       41
<PAGE>

                                    PART III

ITEM 10. MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The general partner of your partnership is MLP GP LLC, a Delaware limited
liability company, that is owned by affiliates of Vornado Realty Trust and
executive officers of Winthrop Financial Associates. In addition, Winthrop
Financial Associates performs asset management services for your partnership.
MLP GP LLC has no assets, liabilities or equity and does not have an equity
interest in your partnership.

      The manager of your partnership's general partner is Newkirk MLP Corp.,
the principal officers of which are Michael L. Ashner, Chief Executive Officer;
Peter Braverman, Executive Vice President; Thomas C. Staples, Chief Financial
Officer; and Carolyn Tiffany, Chief Operating Officer. Such persons also serve
in those capacities for Winthrop Financial Associates. These officers manage and
control the day-to-day operations of your partnership on behalf of your
partnership's general partner. However, significant transactions, whether by
your partnership or any subsidiary partnership, such as sales, acquisitions,
debt refinancings and mergers, require the consent of the members of the general
partner under the limited liability company agreement of the general partner.

      The principal occupations and relevant affiliations of the officers of
your partnership's general partner are as follows:

      Michael L. Ashner. Mr. Ashner, age 52, serves as the Chief Executive
Officer of Newkirk MLP Corp., the manager of the general partner of your
partnership, a position he has held since January 2002 as well as the Chief
Executive Officer of Winthrop Financial Associates, a Limited Partnership and
its affiliates ("WFA"), a position he has held since January 1996. Mr. Ashner
has been the Chief Executive Officer of First Union Real Estate Equity and
Mortgage Investments, a publicly traded real estate investment trust which we
refer to as First Union, since December 31, 2003 and Chairman since April 2004.
Mr. Ashner has also served as the Chief Executive Officer of Shelbourne
Properties I, Inc ("Shelbourne I"), Shelbourne Properties II, Inc. ("Shelbourne
II") and Shelbourne Properties III, Inc. ("Shelbourne III"), three separate
publicly traded real estate investment trusts listed on the American Stock
Exchange that were recently liquidated. Since 1981, Mr. Ashner has been Chairman
of Exeter Capital Corporation, a firm that has organized and administered real
estate limited partnerships. Mr. Ashner also currently serves on the Boards of
Directors of the following publicly traded companies: GB Holdings, Inc and
Atlantic Entertainment Holdings, Inc., hotel and casino operators, and NBTY
Inc., a manufacturer, marketer and retailer of nutritional supplements.

      Peter Braverman. Mr. Braverman, age 53, has served as the Executive Vice
President of Newkirk MLP Corp. since January 2002. Mr. Braverman has also served
as the Executive Vice President of WFA since January 1996. Mr. Braverman has
been the President of First Union since August 2004 and was the Executive Vice
President of First Union from January 2004 to such date. Mr. Braverman has also
served as the Executive Vice President of Shelbourne Properties I, II and III.

      Thomas C. Staples. Mr. Staples, age 49, has been the Chief Financial
Officer of Newkirk MLP Corp. since January 2002. Mr. Staples has been with WFA
since 1995 and has served as its Chief Financial Officer since January 1999. Mr.
Staples has also been the Chief Financial Officer of First Union since January
2004. Since August 2002, Mr. Staples has also served as Assistant Treasurer of
Shelbourne I, Shelbourne II and Shelbourne III. Mr. Staples is a certified
public accountant.


                                       42
<PAGE>

      Carolyn Tiffany. Ms. Tiffany, age 38, has been the Chief Operating Officer
and Secretary of Newkirk MLP Corp. since January 2002 and First Union since
January 2004. Since December 1997, Ms. Tiffany has served as the Chief Operating
Officer of WFA. Ms. Tiffany also served as Vice President, Treasurer, Secretary
and Chief Financial Officer of Shelbourne I, Shelbourne II and Shelbourne III.

      One or more of the above persons are also directors or officers of a
general partner (or general partners of a general partner) of a number of
limited partnerships which either have a class of securities registered pursuant
to Section 12(g) of the Securities and Exchange Act of 1934, or are subject to
the reporting requirements of Section15(d) of such Act.

      Except as indicated above, neither your partnership nor your general
partner or its manager has any significant employees within the meaning of Item
401(c) of Regulation S-K. There are no family relationships among the officers
and directors of the general partner.

Compliance with Section 16(a) of the Exchange Act.

      Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to your partnership under Rule 16a-34(e) during your partnership's
most recent fiscal year and Forms 5 and amendments thereto furnished to your
partnership with respect to its most recent fiscal year, your partnership is not
aware of any manager, officer or beneficial owner of more than ten percent of
the units of limited partnership interest in your partnership that failed to
file on a timely basis, as disclosed in the above Forms, reports required by
Section 16(a) of the Exchange Act during the most recent fiscal year or prior
fiscal years.

Code of Ethics

      Your partnership has adopted a Code of Ethics that applies to the chief
executive officer and chief financial officer of the manager of your
partnership's general partner, who perform functions similar to principal
executive officer and principal financial officer, respectively, for the
partnership. A copy of the Code of Ethics will be provided without charge to any
person who requests it by writing to the attention of Thomas Staples at the
address set forth on the cover page to this Form 10-K.

      Your partnership has no directors and is not a "listed-issuer" under Item
401 to Regulation S-K. Accordingly, your partnership does not have an audit
committee or an audit committee financial expert under Item 401 of Regulation
S-K.


                                       43
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

      Your partnership has no employees. Winthrop Financial Associates, an
affiliate of your general partner and of the Newkirk Group, provides the
services of some of its employees, including the executive officers of the
manager of your partnership's general partner, to perform asset management
services. Winthrop Financial Associates receives an annual fee which was
originally fixed at $1,800,000 (subject to adjustment based on increases in the
CPI) for its services to your partnership and 15 other affiliated partnerships.
The CPI adjustment for 2004 was 2.3% bringing the fee to $1,881,952. See "ITEM
1. BUSINESS - Employees."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED SECURITY HOLDER MATTERS

Security Ownership.

      The following table sets forth the number of units held as of March 24,
2005 by (i) each person that, to our knowledge, beneficially owns more than 5%
of the total number of units, (ii) each officer or director of Newkirk MLP
Corp., the manager of your partnership's general partner, and (iii) the
directors and executive officers of Newkirk MLP Corp. as a group.

<TABLE>
<CAPTION>
Name and Address of                                                            Percent of
Beneficial Owner                                      Number of Units         Total Units
----------------                                      ---------------         -----------
<S>                                                <C>                           <C>
Michael L. Ashner                                  3,657,210 (2) (3) (5)         58.36%
Apollo Real Estate Investment Fund III, L.P.
Apollo Real Estate Advisors III, L.P.
Apollo Real Estate Management III, L.P. (1)

Vornado Realty Trust                               1,422,400 (3) (4) (5)          22.7%
888 Seventh Avenue
New York, NY  10019

Peter Braverman                                            0                        --

Thomas Staples                                             0                        --

Carolyn Tiffany                                            0                        --

All executive officers and directors               3,657,230 (2) (3) (5)         58.36%
as a group (4 individuals)
</TABLE>

----------
(1)   The address for Apollo Real Estate Investment Fund III, L.P. ("Apollo
      Fund"), Apollo Real Estate Advisors III, L.P. ("Apollo Advisors"), and
      Apollo Real Estate Management III, L.P. ("Apollo Management") is 2
      Manhattanville Road, Purchase, New York 10577. The address for Mr. Ashner
      and Mr. Braverman is Two Jericho Plaza, Wing A, Suite 111, Jericho, New
      York 11753. The address for Mr. Staples and Ms. Tiffany is 7 Bulfinch
      Place, Suite 500, Boston, Massachusetts 02114.


                                       44
<PAGE>

(2)   Comprised of units that are held by Newkirk RE Holdings LLC, Newkirk NL
      Holdings LLC, Newkirk Tender Holdings LLC, Marbax Venture LLC, AP-WIN
      Associates, L.L.C., AP-III WEM WIN Tender LLC and AP-IV WEM WIN Tender
      LLC, each of which is directly or indirectly controlled by either
      WEM-Brynmawr Associates LLC, WEM Fund 1998 Limited Partnership or WEM-WIN
      Tender Associates (the "WEM Entities") and by Apollo Fund. For purposes of
      Section 13 of the Securities Exchange Act of 1934 (the "Exchange Act"), as
      the sole manager of each of the WEM Entities, Mr. Ashner may be deemed to
      be the beneficial owner of all units beneficially owned by the WEM
      Entities. In addition, for purposes of Section 13 of the Exchange Act, as
      the general partner of Apollo Fund, Apollo Advisors may be deemed to be
      the beneficial owner of all units beneficially owned by Apollo Fund, and
      all such units may be deemed to be beneficially owned by Apollo Management
      as the day-to-day manager of Apollo Fund.

(3)   Due to the relationships between the individual and entities referred to
      on this chart and in notes (2) and (4) thereto, such individual and
      entities may be deemed to constitute a "group" for purposes of Section
      13d-3 of the Exchange Act.

(4)   Comprised of units that are held by VNK Corp., Vornado Newkirk L.L.C. and
      Vornado Realty L.P., each of which is controlled by Vornado Realty Trust.

(5)   Pursuant to the terms of a court-approved settlement of an action, a total
      of approximately 61,220 units will be transferred by members of the
      Newkirk Group to other unitholders. Following such transfer the number of
      units beneficially owned by Mr. Ashner and the Apollo entities, Vornado
      Realty Trust and all executive officers and directors as a group will be
      reduced to approximately 3,608,234 (57.58%), 1,410,156 (22.50%) and
      3,608,234 (57.58%), respectively.

      Changes in Control.

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

      Securities Authorized for Issuance under Equity Compensation Plans.

      The partnership has no securities authorized for issuance under any equity
compensation plans.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ACQUISITION OF LIMITED PARTNERSHIP INTERESTS

      In April 2004, the Partnership exercised an option to purchase from the
Newkirk Group additional limited partnership interests in two partnerships that
own net leased properties in exchange for 15,539 units. Additional information
on this transaction is contained in Item 7 of Amendment No. 3 to our Form 10
under the heading "Acquisition of Limited Partnership Interests" which is
incorporated herein by reference.

MORTGAGE INDEBTEDNESS AND OTHER INDEBTEDNESS

      Members of the Newkirk Group own approximately 53% of the second mortgage
indebtedness encumbering properties owned by your partnership in El Segundo,
California. During 2004, your partnership incurred approximately $715,000 of
interest expense on this


                                       45
<PAGE>

mortgage indebtedness, $66,000 of which was paid to members of the Newkirk Group
and the balance of which was added to the principal balance of the mortgage
indebtedness. At December 31, 2004, your partnership owed approximately
$15,232,000 on the second mortgage to members of the Newkirk Group.

T-TWO PARTNERS

      See "ITEM 1. BUSINESS - Description of Assets - The Subordinate Mortgage
Interests" for a description of T-Two Partners, its ownership of second mortgage
loans on your partnership's properties. During 2004, your partnership incurred
approximately $25,041,000 of interest expense payable to T-Two Partners,
$20,058,500 of which was applied to make payments on the T-Two Loan that is
guaranteed by your partnership. T-Two Partners is owned by NK-CR Holdings and
Holdings Subsidiary, both of which are owned by members of the Newkirk Group.

MORTGAGE ON PROPERTY OF AFFILIATE

      See "ITEM 1. BUSINESS - Description of Assets - First Mortgage Interests"
for information on a securitized pool of first mortgages held by your
partnership that is partially secured by properties owned by partnerships that
are controlled by affiliates of your partnership's general partner.

ASSET MANAGEMENT AGREEMENT

      See "ITEM 1. BUSINESS - Description of Assets - The Management Company"
for a description of fees paid to Winthrop Financial Associates by Newkirk Asset
Management LLC for services rendered for your partnership and certain other
partnerships.

SALE OF PROPERTY

      See "ITEM 2. PROPERTIES - Property Matters" for information on the sale in
July 2004 of 25 properties to Vornado, an affiliate of your partnership's
general partner.


                                       46
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

      The aggregate fees for professional services rendered by Imowitz, Koenig &
Co. during 2004 and 2003 were as follows:

      Audit Fees. Fees for the audit of your partnership's annual financial
statements, the reviews of the financial statements in the Partnership's Forms
10-Q, the review of the financial statements in the Partnership's Form 10 and
amendments thereto, and other services in connection with statutory and
regulatory filings and engagements were $330,000 and $338,000 in 2004 and 2003,
respectively.

      Audit Related Fees. The aggregate audit-related fees billed during 2004
and 2003 for assurance and related services that were reasonably related to the
performance of the audit or review of your partnership's financial statements
and not reported under "Audit Fees" were in the amount of $0 and $15,000,
respectively, billed by Imowitz, Koenig & Co. and covered agreed upon procedures
related to a bank financing in 2003.

      Tax Fees. Fees for tax services relating to tax compliance were $241,000
and $366,000 in 2004 and 2003, respectively.

      All Other Fees. None.


                                       47
<PAGE>

                                     PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

      (a)   Financial Statements

            1.    See "Index to Financial Statements" below.

            2.    The following financial statement schedule should be read in
                  conjunction with the financial statements included in Item 8
                  of this Annual Report on Form 10-K.

                  III - Real Estate and Accumulated Depreciation as of December
                  31, 2004.

                  Schedules other than those listed above are omitted because
                  they are not applicable or the information required is
                  included in the consolidated financial statements or the notes
                  thereto.

      (b)   Exhibits

Exhibit No.                         Description
-----------                         -----------

* 2.1              Agreement and Plan of Merger between the Newkirk Master
                   Limited Partnership and each of the Merger Partnerships set
                   forth on Schedule A, dated December 6, 2001.

* 2.2              Assignment and Assumption Agreement by and between Newkirk
                   Stock LLC, The Newkirk Master Limited Partnership, Newkirk NL
                   Holdings LLC and VNK Corp. dated as of December 26, 2001.

* 2.3              Assignment and Assumption Agreement by and between Newkirk
                   Eastgar LLC, Newkirk Partner Interest LLC, The Newkirk Master
                   Limited Partnership and Newkirk MLP Unit LLC dated as of
                   December 26, 2001.

* 2.4              Assignment and Assumption Agreement by and between Vornado
                   Realty L.P., Vornado Newkirk L.L.C., The Newkirk Master
                   Limited Partnership, and Newkirk MLP Unit LLC, dated as of
                   December 26, 2001.

* 2.5              Assignment and Assumption Agreement between Newkirk RE
                   Associates LLC, The Newkirk Master Limited Partnership,
                   Newkirk RE Holdings and Vornado Newkirk L.L.C. dated as of
                   December 26, 2001.

* 2.6              Assignment and Assumption Agreement by and between Newkirk
                   Associates LLC, The Newkirk Master Limited Partnership,
                   Newkirk NL Holdings LLC and Vornado Newkirk L.L.C. dated as
                   of December 26, 2001.

* 2.7              Agreement and Plan of Merger by and between The Newkirk
                   Master Limited Partnership, Lanmar Associates Limited
                   Partnership and Newkirk Lanmar L.P., dated as of December 6,
                   2001.

* 3                Certificate of Limited Partnership of the Newkirk Master
                   Limited Partnership.

* 4.1              Agreement of Limited Partnership of The Newkirk Master
                   Limited Partnership, by and among MLP GP LLC, Newkirk Manager
                   Corp. and all other persons who shall, pursuant to the
                   Exchange or otherwise become limited partners of the
                   Partnership, dated as of October 23, 2001.

* 4.2              Additional provisions incorporated by reference into the
                   Agreement of Limited Partnership of the Newkirk Master
                   Limited Partnership.

* 4.3              Limited Liability Agreement of MLP GP LLC.


                                       48
<PAGE>

Exhibit No.                         Description
-----------                         -----------

*  10.1           Amended and Restated Cash Participation Agreement, dated as
                  of January 1, 2002, by and among Newkirk GP LLC, Newkirk
                  Capital LLC, Newkirk RE Associates LLC, Newkirk Stock LLC,
                  Newkirk Associates LLC, Vornado Realty L.P., Vornado Newkirk
                  L.L.C., VNK Corp., on the one hand, and Administrator LLC, as
                  agent for itself and as agent for the persons listed on
                  Schedule A thereto.

*  10.2           Amended and Restated Pledge Agreement, dated as of January 1,
                  2002, by and between The Newkirk Master Limited Partnership
                  and Administrator LLC, for itself and as agent for the
                  parties listed on Schedule A thereto.

*  10.3           Put-Call Option Agreement, dated as of January 1, 2002, by
                  and among The Newkirk Master Limited Partnership,, NK-CR
                  Holdings LLC and Holdings Subsidiary LLC.

*  10.4           Asset Management Agreement dated as of January 1, 2002, by
                  and between Newkirk Asset Management LLC and Winthrop
                  Financial Associates.

*  10.5           Loan Agreement, dated January 30, 2002, among The Newkirk
                  Master Limited Partnership and Bank of America and the
                  lenders party thereto.

*  10.6           Promissory Note, dated as of January 30, 2002, by The Newkirk
                  Master Limited Partnership in favor of Bank of America.

*  10.7           Security Agreement, dated as of January 30, 2002, between The
                  Newkirk Master Limited Partnership and Bank of America.

*  10.8           Ownership Interest Pledge and Security Agreement, dated as of
                  January 30, 2002, from The Newkirk Master Limited
                  Partnership, Newkirk GP Holding LLC and General Partners of
                  Participating Limited Partnerships to Bank of America.

*  10.9           Ownership Interest Pledge and Security Agreement, dated as of
                  January 30, 2002, from The Newkirk Master Limited Partnership
                  to Bank of America.

*  10.10          Ownership Interest Pledge and Security Agreement, dated as of
                  January 30, 2002, from The Newkirk Master Limited Partnership
                  to Bank of America.

*  10.11          Ownership Interest Pledge and Security Agreement, dated as of
                  January 30, 2002, from The Newkirk Master Limited Partnership
                  to Bank of America.

** 10.12          Indemnity Agreement, dated as of January 30, 2002, among
                  Newkirk NL Holdings, LLC, Newkirk MLP Corp., Vornado Realty,
                  L.P., Vornado Newkirk, LLC, VNK Corp., Apollo Real Estate
                  Fund III, L.P., The Newkirk Master Limited Partnership and
                  Bank of America.

*** 10.13         Master Loan Agreement, dated November 24,2003, among The
                  Newkirk Master Limited Partnership, T-Two Partners, L.P., and
                  Bank of America and the lender's party thereto.

*** 10.14         Master Promissory Note, dated as of November 24, 2003, by The
                  Newkirk Master Limited Partnership in favor of Bank of
                  America.

*** 10.15         Security Agreement, dated as of November 24, 2003, between
                  The Newkirk Master Limited Partnership and Bank of America.

*** 10.16         Ownership Interest Pledge and Security Agreement, dated as of
                  November 24, 2003, from The Newkirk Master Limited
                  Partnership, Newkirk GP Holding LLC and General Partners of
                  certain Limited Partnerships Bank of America.


                                       49
<PAGE>

Exhibit No.                         Description
-----------                         -----------

*** 10.17         Ownership Interest Pledge and Security Agreement (GMAC
                  Partnerships), dated as of November 24, 2003, from The
                  Newkirk Master Limited Partnership to Bank of America.

*** 10.18         Ownership Interest Pledge and Security Agreement
                  (Subsidiaries), dated as of November 24, 2003, from The
                  Newkirk Master Limited Partnership to Bank of America.

*** 10.19         Ownership Interest Pledge and Security Agreement (Finco and
                  Capital), dated as of November 24, 2003, from The Newkirk
                  Master Limited Partnership to Bank of America.

*** 10.20         Amended and Restated Indemnity Agreement, dated as of
                  November 24, 2003, among Newkirk NL Holdings, LLC, Newkirk
                  MLP Corp., Vornado Realty, L.P., Vornado Newkirk, LLC, VNK
                  Corp., Apollo Real Estate Fund III, L.P., The Newkirk Master
                  Limited Partnership and Bank of America.

*** 10.21         Guaranty from The Newkirk Master Limited Partnership to Bank
                  of America.

**** 10.22        Amended Stipulation of Settlement of Albert McCall, et. al.,
                  v. Newkirk Capital LLC, et al.

***** 14          Code of Ethics.

* 21              List of subsidiaries of the Registrant.

31.1              Certificates of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

31.2              Certificates of Chief Financial Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

32.1              Chief Executive Officer's Certificate, pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

32.2              Chief Financial Officer's Certificate, pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

----------

*         Previously filed as an Exhibit to Form 10 filed on April 30, 2003.

**        Previously filed as an Exhibit to Amendment No. 1 to Form 10 filed on
          September 10, 2003.

***       Incorporated by reference to Exhibits filed with Form 8-K dated
          November 24, 2003.

****      Previously filed as an Exhibit to Amendment No. 2 to Form 10 filed on
          February 12, 2004.

*****     Previously filed as an Exhibit to Form 10-K for the year ended
          December 31, 2003, filed on April 5, 2004.


                                       50
<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.

Dated: August 4, 2005

                                          THE NEWKIRK MASTER LIMITED PARTNERSHIP

                                          By: MLP GP LLC, its General Partner

                                          By: Newkirk MLP Corp., its Manager


                                          By:    /s/ Michael L. Ashner
                                                 -------------------------------
                                          Name:  Michael L. Ashner
                                          Title: Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated:

<TABLE>
<CAPTION>
         Signature                                    Title                                        Date
         ---------                                    -----                                        ----
<S>                                 <C>                                                        <C>

By: /s/ Michael L. Ashner           Chief Executive Officer of the Manager of the              August 4, 2005
    ---------------------------     General Partner of the Registrant
    Michael L. Ashner


By: /s/ Thomas Staples              Chief Financial Officer of the Manager of the              August 4, 2005
    ---------------------------     General Partner of the Registrant
    Thomas Staples
</TABLE>


                                       51
<PAGE>

Item 8. Financial Statements and Supplementary Data

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                                 Page
                                                                                                                 ----
<S>                                                                                                         <C>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AS OF AND FOR THE YEARS ENDED
    DECEMBER 31, 2004, 2003 AND 2002                                                                             F - 1

FINANCIAL STATEMENTS

Consolidated Balance Sheets at December 31, 2004 and 2003 (as restated)                                          F - 2

Consolidated Statements of Operations for the Years Ended December 31, 2004, 2003 and 2002                       F - 3

Consolidated Statements of Partners' Equity for the Years Ended December 31, 2004, 2003 and 2002                 F - 4

Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 2003 and 2002 (as restated)    F - 5 to F - 7

Notes to Consolidated Financial Statements (as restated for Note 13)                                        F - 8 to F - 33
</TABLE>

<PAGE>

             Report of Independent Registered Public Accounting Firm

To the Partners of
The Newkirk Master Limited Partnership

We have audited the accompanying consolidated balance sheets of The Newkirk
Master Limited Partnership (a Delaware limited partnership) (the "Partnership")
as of December 31, 2004 and 2003 and the related consolidated statements of
operations, partners' equity and cash flows for each of the years in the
three-year period ended December 31, 2004. These consolidated financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Partnership as
of December 31, 2004 and 2003, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 2004, in
conformity with accounting principles generally accepted in the United States of
America.

As discussed in Note 13, the accompanying consolidated balance sheets as of
December 31, 2004 and 2003 and the related consolidated statements of cash flows
for each of the years in the three-year period ended December 31, 2004 have been
restated.

In connection with our audits of the consolidated financial statements referred
to above, we audited the financial statement schedule listed under Item 15. In
our opinion, this financial statement schedule, when considered in relation to
the consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information stated therein.


                                                   /s/ Imowitz Koenig & Co., LLP

New York, New York
January 31, 2005
(July 25, 2005 as to the
effects of the restatement
discussed in Note 13)


                                      F-1
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                           CONSOLIDATED BALANCE SHEETS
                  AS OF DECEMBER 31, 2004 AND DECEMBER 31, 2003
                        (In thousands, except unit data)

<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                                      2004            2003
                                                                                   -----------     -----------
ASSETS                                                                             (As Restated - See Note 13)
<S>                                                                                <C>             <C>
Real estate investments:
      Land                                                                         $    32,172     $    37,674
      Land estates                                                                      43,997          45,204
      Buildings and improvements                                                     1,502,013       1,572,552
                                                                                   -----------     -----------

         Total real estate investments                                               1,578,182       1,655,430

      Less accumulated depreciation and amortization                                  (545,385)       (526,193)
                                                                                   -----------     -----------

         Real estate investments, net                                                1,032,797       1,129,237

Real estate held for sale, net of accumulated depreciation of
      $9,713 and $16,691                                                                27,536          59,481

Cash and cash equivalents                                                               21,317          32,703
Restricted cash                                                                          8,216           5,148
Receivables (including $8,687 and $8,491 from related parties)                          68,661          66,981
Deferred rental income receivable                                                       27,052          30,864
Equity investments in limited partnerships                                              11,107           8,492
Deferred financing costs, net of accumulated amortization
      of $34,991 and 29,638                                                             15,072          22,993
Other assets (including $10,111 and $9,800 from related parties)                        25,127          27,240
Other assets of discontinued operations                                                    244             955
                                                                                   -----------     -----------

         Total Assets                                                              $ 1,237,129     $ 1,384,094
                                                                                   ===========     ===========

LIABILITIES, MINORITY INTERESTS AND EQUITY

Liabilities:

Mortgage notes payable (including $14,871 and $14,237
      to a related party)                                                          $   478,939     $   602,919
Note payable                                                                           165,328         208,356
Contract right mortgage notes payable (including $178,529
      and $208,385 to related parties)                                                 263,072         292,956
Accrued interest payable (including $71,279 and $87,996 to related parties)            102,141         121,250
Accounts payable and accrued expenses                                                    3,758          15,427
Liabilities of discontinued operations                                                  17,497          40,769
                                                                                   -----------     -----------

         Total Liabilities                                                           1,030,735       1,281,677

Contingencies

Minority interests                                                                       2,609           3,553
Partners' equity (6,314,458 and 6,319,391 limited partnership units outstanding
      at December 31, 2004 and 2003, respectively)                                     203,785          98,864
                                                                                   -----------     -----------

         Total Liabilities, Minority Interests and Equity                          $ 1,237,129     $ 1,384,094
                                                                                   ===========     ===========
</TABLE>

                 See Notes to Consolidated Financial Statements.


                                      F-2
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                      (In thousands, except per unit data)

<TABLE>
<CAPTION>
                                                                        December 31,    December 31,    December 31,
                                                                            2004            2003            2002
                                                                        ------------    ------------    ------------
<S>                                                                     <C>             <C>             <C>
Revenue:
      Rental income                                                     $   246,062     $   258,763     $   247,841
      Interest income                                                         3,134           2,972           3,283
      Management fees                                                           332             418             762
                                                                        -----------     -----------     -----------

         Total revenue                                                      249,528         262,153         251,886
                                                                        -----------     -----------     -----------

Expenses:
      Interest (including $23,511, $11,306 and $8,620 to
         related parties, respectively)                                      88,981         102,775         112,593
      (Gain) loss from early extinguishment of debt                             (10)             28          (5,729)
      Depreciation                                                           36,044          36,067          25,990
      General and administrative (including $1,882, $1,843 and
          $1,800 to a related party, respectively)                            3,765           8,818           6,516
      Amortization                                                            2,796           4,730           4,095
      Ground rent                                                             3,067           3,051           2,995
      State and local taxes                                                   1,379             758             840
                                                                        -----------     -----------     -----------

         Total expenses                                                     136,022         156,227         147,300
                                                                        -----------     -----------     -----------

Income from continuing operations before equity in income
      from investments in limited partnerships and minority interest        113,506         105,926         104,586

      Equity in income from investments in limited partnerships               2,662           2,054              --
      Minority interest                                                     (18,226)        (18,077)        (10,695)
                                                                        -----------     -----------     -----------

Income from continuing operations                                            97,942          89,903          93,891
                                                                        -----------     -----------     -----------

Discontinued operations:
      Income from discontinued operations                                     3,581          27,307          29,954
      Impairment loss                                                       (13,065)         (1,560)             --
      Gain (loss) from disposal of real estate                               49,350          29,514            (983)
                                                                        -----------     -----------     -----------

         Income from discontinued operations                                 39,866          55,261          28,971
                                                                        -----------     -----------     -----------

Net income                                                              $   137,808     $   145,164     $   122,862
                                                                        ===========     ===========     ===========

Income from continuing operations per limited partnership unit          $     15.50     $     14.20     $     15.34
Income from discontinued operations per limited partnership unit               6.31            8.73            4.74
                                                                        -----------     -----------     -----------

Net income per limited partnership unit                                 $     21.81     $     22.93     $     20.08
                                                                        ===========     ===========     ===========

Distributions per limited partnership unit                              $      7.30     $      5.52     $     32.16
                                                                        ===========     ===========     ===========

Weighted average limited partnership units                                6,317,753       6,329,204       6,119,942
                                                                        ===========     ===========     ===========
</TABLE>

                 See Notes to Consolidated Financial Statements.


                                      F-3
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP

                   CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                        (In thousands, except unit data)

                                                    Limited
                                                  Partnership         Partners'
                                                     Units             Equity
                                                  -----------        ----------

Equity contributions                               6,121,990         $   61,949

Minority interest charge                                  --              6,147

Distributions                                             --           (196,880)

Limited partner buyouts                               (5,412)              (182)

Net income                                                --            122,862
                                                  ----------         ----------

Balance at December 31, 2002                       6,116,578             (6,104)

Acquisition of entities under common control         317,813            (13,637)

Minority interest charge                                  --             12,109

Distributions                                             --            (34,731)

Limited partner buyouts                             (115,000)            (3,937)

Net income                                                --            145,164
                                                  ----------         ----------

Balance at December 31, 2003                       6,319,391             98,864

Equity contributions                                  15,539                836

Minority interest charge                                  --             13,101

Distributions                                             --            (46,106)

Limited partner buyouts                              (20,472)              (718)

Net income                                                --            137,808
                                                  ----------         ----------

Balance at December 31, 2004                       6,314,458         $  203,785
                                                  ==========         ==========

                 See Notes to Consolidated Financial Statements.


                                      F-4
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                             For the Years Ended December 31,
                                                                             2004          2003          2002
                                                                           ---------     ---------     ---------
                                                                                (As Restated - See Note 13)
<S>                                                                        <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

       Net income                                                          $ 137,808     $ 145,164     $ 122,862
           Adjustments to reconcile net income to net cash provided
              by operating activities:
              Amortization of deferred costs and land estates                 10,220        13,889         9,819
              Depreciation expense                                            36,823        40,339        34,023
              (Gain) loss on disposal of real estate                         (49,350)      (29,514)          983
              Net (gain) loss from early extinguishment of debt                6,269        (8,705)       (6,282)
              Impairment loss                                                 13,065         1,560            --
              Minority interest expense                                       18,462        18,858        10,685
              Equity in undistributed earnings of limited partnership         (2,273)       (1,562)           --

       Changes in operating assets and liabilities:
           Increase in receivables and deferred rental income                 (1,987)      (10,714)       (1,100)
           (Decrease) increase in accounts payable and accrued expenses       (5,238)        3,344       (16,698)
           Decrease in accrued interest-mortgages
              and contract rights                                            (10,819)      (13,613)      (13,276)
           Decrease in other assets                                            1,460         1,871         5,044
                                                                           ---------     ---------     ---------

                 Net cash provided by operating activities                   154,440       160,917       146,060
                                                                           ---------     ---------     ---------
</TABLE>

                                                                     (Continued)

                 See Notes to Consolidated Financial Statements.


                                      F-5
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                                 (In thousands)
                                   (Continued)

<TABLE>
<CAPTION>
                                                                               For the Years Ended December 31,
                                                                               2004          2003          2002
                                                                            ---------     ---------     ---------
                                                                                 (As Restated - See Note 13)
<S>                                                                         <C>           <C>           <C>
CASH FLOWS FROM INVESTING ACTIVITIES:

      Cash related to formation of partnership                              $      --     $      --     $  10,776
      Land additions                                                           (2,557)       (2,518)       (2,904)
      (Increase) decrease in restricted cash                                   (3,068)        2,961        (8,109)
      Net proceeds from disposal of real estate                                98,771        61,491         3,208
      Cash related to previously unconsolidated limited partnerships               --           650            --
      Investments in limited partnership interests                             (1,111)       (1,307)           --
                                                                            ---------     ---------     ---------

              Net cash provided by investing activities                        92,035        61,277         2,971
                                                                            ---------     ---------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES:

      Payments to satisfy notes payable                                            --      (253,281)      (24,153)
      Payments to satisfy mortgage notes                                      (12,180)       (7,265)     (115,537)
      Payments to satisfy contract right mortgage notes
        and accrued interest                                                  (36,170)       (6,053)      (52,619)
      Principal payments of mortgage notes                                   (109,776)     (119,541)     (104,640)
      Principal payments of notes payable                                     (43,028)      (34,110)      (20,123)
      Principal payments of contract right mortgage notes                          (9)         (570)       (1,090)
      Proceeds from new debt                                                       --       262,338       411,403
      Mortgage prepayment penalties                                              (326)         (400)       (4,710)
      Distributions to partners                                               (46,106)      (34,731)     (196,880)
      Limited partner redemptions                                                (718)       (3,937)         (182)
      Distributions to minority interests                                      (9,715)       (8,734)       (4,261)
      Deferred financing costs                                                    167        (8,550)      (10,896)
                                                                            ---------     ---------     ---------

              Net cash used in financing activities                          (257,861)     (214,834)     (123,688)
                                                                            ---------     ---------     ---------

Net (decrease) increase in cash and cash equivalents                          (11,386)        7,360        25,343

Cash and Cash Equivalents at Beginning of Year                                 32,703        25,343            --
                                                                            ---------     ---------     ---------

Cash and Cash Equivalents at End of Year                                    $  21,317     $  32,703     $  25,343
                                                                            =========     =========     =========

Supplemental Disclosure of Cash Flow Information:
      Cash paid for state and local taxes$                                      1,353     $   1,072     $     542
                                                                            =========     =========     =========
      Cash paid for interest                                                $ 104,021     $ 124,342     $ 174,488
                                                                            =========     =========     =========
</TABLE>

                 See Notes to Consolidated Financial Statements.


                                      F-6
<PAGE>
                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                                   (CONTINUED)

Supplemental Information

In March 2003, in connection with the disposal of real estate, the purchaser of
a property assumed $94,918,000 of the Partnership's debt.

In January 2004, in connection with the sale of a property, the purchaser of the
property assumed $28,460,000 of associated Partnership debt.

In April 2004, the Partnership issued 15,539 units in the Partnership to holders
of minority interests in two partially owned consolidated partnerships.

                 See Notes to Consolidated Financial Statements.


                                      F-7
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - ORGANIZATION AND BUSINESS

      The Newkirk Master Limited Partnership (the "Partnership") was organized
      in October 2001 as a limited partnership under the Delaware Revised
      Uniform Limited Partnership Act. The Partnership's term is perpetual
      unless it is otherwise dissolved in accordance with the terms of the
      Partnership's partnership agreement. The Partnership commenced operations
      on January 1, 2002 following the completion of a transaction (the
      "Exchange") involving the merger into wholly-owned subsidiaries of the
      Partnership of 90 limited partnerships, each of which owned commercial
      properties (the "Newkirk Partnerships"), and the acquisition by the
      Partnership of various assets, including those related to the management
      or capital structure of the Newkirk Partnerships. The Partnership was
      formed to facilitate and consummate the Exchange and for the purpose of
      directly or indirectly (whether through a subsidiary or otherwise),
      investing in, acquiring, owning, holding, managing, operating, selling,
      exchanging and otherwise disposing of interests in real estate and assets
      related to real estate and to engage in activities and transactions as the
      general partner deems necessary or advisable to promote the business of
      the Partnership.

      As part of the Exchange, each Newkirk Partnership was merged with and into
      a separate newly-formed limited partnership that is wholly-owned by the
      Partnership; the Newkirk Partnerships ceased to exist following completion
      of the merger. Each Newkirk Partnership owned one or more commercial
      properties that are generally net leased to a single tenant. As a result
      of the Exchange, the Partnership owns the properties and other assets
      formerly owned by the Newkirk Partnerships, subject to the liabilities of
      such partnerships. In addition, as part of the Exchange, the "Newkirk
      Group" contributed certain assets to the Partnership. The Newkirk Group,
      which managed the Newkirk Partnerships, is comprised of certain affiliates
      of Apollo Real Estate Fund III, L.P., ("Apollo"), Vornado Realty Trust
      ("Vornado") and senior executives of Winthrop Financial Associates, A
      Limited Partnership ("WFA"). At December 31, 2004, the Newkirk Group owned
      approximately 79% of the Partnership.

      The limited partners of the Partnership consist of former limited partners
      of the Newkirk Partnerships, former limited partners that elected to
      participate in the Exchange of an additional limited partnership that was
      affiliated with the Newkirk Partnerships and affiliates of the Newkirk
      Group. The general partner of the Partnership is MLP GP LLC, ("General
      Partner"), a Delaware limited liability company owned by affiliates of the
      Newkirk Group. MLP GP LLC does not receive any compensation for managing
      the Partnership. MLP GP LLC has no assets, liabilities or equity and has
      no economic interest in the Partnership. WFA,


                                      F-8
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - ORGANIZATION AND BUSINESS (Continued)

      which performed asset management services for the Newkirk Partnerships,
      performs asset management services for the Partnership.

      As of January 1, 2002, balances related to the exchange of Units in the
      Partnership for the various assets of the combined entity and other
      contributing unit holders were as follows:

                                                            2002
                                                       --------------
                                                       (In thousands)

            Real estate, net                            $ 1,233,756
            Real estate held for sale                       113,982
            Cash and cash equivalents                        10,776
            Receivables                                      78,376
            Deferred costs, net                              19,957
            Other assets                                     34,377
            Other assets of discontinued operations             880
            Mortgage notes payable                         (776,633)
            Contract right mortgage notes payable          (325,264)
            Accrued interest                               (188,567)
            Accounts payable and accrued expenses           (15,189)
            Liabilities of discontinued operations         (123,078)
            Minority interest                                (1,424)
                                                        -----------
            Partners' equity                            $    61,949
                                                        ===========

      At December 31, 2004, the Partnership owned the following:

      (i)   Net-Leased Properties:

      Ownership of 210 commercial properties located throughout the United
      States of America, substantially all of which are net-leased to a single
      tenant.

      (ii)  Other Assets:

            (a)   Limited partnership interests in (i) seven consolidated
                  partnerships ("Consolidated Partnerships") which represent
                  between 32.1% and 68.68% of the partnership's operating
                  interest and (ii) nine unconsolidated partnerships
                  ("Unconsolidated Partnerships") which represent between .7%
                  and 45.29%.


                                      F-9
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - ORGANIZATION AND BUSINESS (Continued)

            (b)   The Partnership or an affiliate of the General Partner of the
                  Partnership control general partnership interests in (i) seven
                  Consolidated Partnerships, (ii) nine Unconsolidated
                  Partnerships and (iii) five Other Partnerships that own
                  commercial net leased properties. Other Partnerships are
                  partnerships that were controlled by the Newkirk Group and
                  were not merged into the Partnership.

            (c)   A 50.01% interest in Newkirk Capital LLC whose wholly-owned
                  subsidiary, Newkirk Asset Management LLC, provides asset
                  management and other services to the Partnership and the Other
                  Partnerships. Prior to the Exchange, Newkirk Asset Management
                  LLC provided these services to the Newkirk Partnerships and
                  the Other Partnerships. Newkirk Capital LLC and Newkirk Asset
                  Management LLC have retained WFA to perform certain of the
                  services provided to the Partnership and the Other
                  Partnerships. The fees payable to Newkirk Asset Management LLC
                  and Newkirk Capital LLC are retained by the Partnership.

            (d)   A note receivable from Administrator LLC, a 49.99% owner of
                  Newkirk Capital LLC.


                                      F-10
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - ORGANIZATION AND BUSINESS (Continued)

            (e)   The right to acquire T-Two Partners, L.P., ("T-Two Partners")
                  from its current owners, affiliates of the Newkirk Group.

            (f)   Land interests comprised of ground leases, remainder interests
                  or the right to acquire remainder interests in the land
                  underlying certain properties owned by the Partnership and
                  other real estate limited partnerships.

            (g)   An interest in NK-Leyden Loan, L.P. and NK-Dautec Loan, L.P.,
                  each of which hold an unsecured note of the Partnership.

            (h)   Interests in entities which hold a securitized pool of 29
                  first mortgage loans encumbering 61 Partnership properties and
                  1 property owned by another limited partnership.

      In 2004, 2003 and 2002, the Partnership acquired from its limited partners
      20,472, 115,000 and 5,412, respectively, of its units of limited
      partnership interest.


                                      F-11
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Basis of Presentation

      The accompanying consolidated financial statements present the
      consolidated financial position, results of operations and cash flows of
      the Partnership and its controlled subsidiaries. All significant
      intercompany transactions, receivables and payables have been eliminated
      in consolidation. Minority interests relate to the interest in certain
      partnerships not owned by the Partnership. The Partnership accounts for
      its investments in partnerships and joint ventures, in which it does not
      have a controlling interest, using the equity method of accounting. Equity
      investments are recorded initially at cost and subsequently adjusted for
      the Partnership's share of the net income or loss and cash contributions
      to and distributions from these partnerships and joint ventures.

      The Partnership has accounted for the Exchange as an exchange of equity
      interests between entities under common control and initially recognized
      the assets and liabilities contributed at the carrying amounts of the
      contributing entities.

      Use of Estimates

      The preparation of consolidated financial statements in conformity with
      accounting principles generally accepted in the United States of America
      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 revenues and expenses during the reporting periods.
      Actual results could differ from those estimates.

      Real Estate

      Investments in real estate are stated at historical cost basis less
      accumulated depreciation and amortization. Depreciation of buildings and
      improvements is computed on a straight-line basis over their estimated
      useful lives, which range from fourteen to forty years. Amortization of
      the land estates is computed on a straight-line basis over their estimated
      useful lives, which range from twenty-two to thirty years.

      During 2003, the Partnership made a change to its accounting estimates
      with respect to the depreciable lives of its real estate assets. The
      change in accounting estimates resulted in a decrease in net income of
      approximately $6.8 million and a decrease in net income of approximately
      $1.08 per limited partnership unit for the year ended December 31, 2003.


                                      F-12
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Real Estate (Continued)

      The Partnership's real estate investments are reviewed for impairment if
      events or changes in circumstances indicate that the carrying amount of
      the real estate may not be recoverable. In such an event, a comparison is
      made of the current and projected operating cash flows of such real estate
      on an undiscounted basis to the carrying amount of such real estate. Such
      carrying amount would be adjusted, if necessary, to estimated fair value
      to reflect impairment in the value of the real estate. Real estate assets
      for which the Partnership has committed to a plan to dispose of the
      assets, whether by sale or abandonment, are reported at the lower of
      carrying amount or fair value less cost to sell. Preparation of projected
      cash flows is inherently subjective and is based on the Partnership's best
      estimate of assumptions concerning expected future conditions.

      Upon acquisitions of real estate, the Partnership assesses the fair value
      of acquired assets (including land, buildings, tenant improvements, and
      identified intangibles such as above and below market acquired in-place
      leases) and acquired liabilities, and allocates purchase price based on
      these assessments.

      The Partnership accounts for properties as held for sale under the
      provisions of Statement of Financial Accounting Standards ("SFAS") No.
      144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
      ("SFAS No. 144"), when all criteria of SFAS No. 144 have been met.

      Cash and Cash Equivalents

      The Partnership considers all highly liquid investments with original
      purchase maturity dates of three months or less to be cash equivalents.

      Restricted Cash

      Restricted cash includes reserves for tenant improvements, leasing
      commissions and related costs established pursuant to the Partnership's
      note payable agreement.

      Concentration of Credit Risk

      Substantially all of the Partnership's cash and cash equivalents consist
      of money market mutual funds which invest in U.S. Treasury Bills and
      repurchase agreements with original maturity dates of three months or
      less.

      The Partnership maintains cash with one banking institution, which amounts
      at times exceed federally insured limits.


                                      F-13
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Interest Rate Protection Agreements

      SFAS No. 133, "Accounting for Derivative Instruments and Hedging
      Activities," requires the recording of all derivative instruments as
      either assets or liabilities depending on the rights and obligations under
      the contracts. Derivative instruments are measured at fair value, with the
      resulting gain or loss being recognized either in earnings or equity in
      the period of change, depending on whether the contract is designated as a
      hedge or not. The Partnership invests in interest rate caps in order to
      cap the maximum interest rate payable on its variable rate debt. The
      interest rate caps are not designated as hedging instruments, and are
      measured at fair value, with the resulting gain or loss being recognized
      in interest expense in the period of change.

      Receivables

      Receivables consist of rent from tenants and other receivables which are
      deemed collectable by the Partnership. No provision for doubtful accounts
      was considered necessary based upon the Partnership's evaluation of the
      collectability of these amounts.

      Loans Receivable

      The Partnership evaluates the collectability of both interest and
      principal of each of its loans, if circumstances warrant, to determine
      whether it is impaired. A loan is considered to be impaired, when based on
      current information and events, it is probable that the Partnership will
      be unable to collect all amounts due according to the existing contractual
      terms. When a loan is considered to be impaired, the amount of the loss
      accrual is calculated by comparing the recorded investment to the value
      determined by discounting the expected future cash flows at the loan's
      effective interest rate. Interest on impaired loans is recognized on a
      cash basis. Loans receivable are included with "other assets" in the
      accompanying consolidated balance sheets.

      Investments in Debt Securities and Mortgage Loans

      Investments in debt securities are classified as held-to-maturity and
      reported at amortized cost. Investment in mortgage loans is included with
      "other assets" in the accompanying consolidated balance sheets.


                                      F-14
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Deferred Financing Costs

      Deferred financing costs consists primarily of fees paid in connection
      with the financing of the Partnership's properties and are deferred and
      amortized over the terms of the related agreements on a straight line
      basis which approximates the effective interest method as a component of
      interest expense.

      Investments in Partnerships

      The Partnership evaluates its investments in partially-owned entities in
      accordance with Financial Accounting Standards Board ("FASB")
      Interpretation No. 46 (revised December 2003), Consolidation of Variable
      Interest Entities, or FIN 46R. If the partially-owned entity is a
      "variable interest entity," or a "VIE," and the Partnership is the
      "primary beneficiary" as defined in FIN 46R, the Partnership would account
      for such investment as if it were a consolidated subsidiary.

      For a partnership investment which is not a VIE or in which the
      Partnership is not the primary beneficiary, the Partnership follows the
      accounting set forth in AICPA Statement of Position No. 78-9 - Accounting
      for Investments in Real Estate Ventures (SOP 78-9). In accordance with
      this pronouncement, the Partnership accounts for its investments in
      partnerships and joint ventures in which it does not have a controlling
      interest using the equity method of accounting. Factors that are
      considered in determining whether or not the Partnership exercises control
      include important rights of partners in significant business decisions,
      including dispositions and acquisitions of assets, financing, operations
      and capital budgets, other contractual rights, and ultimate removal of the
      general partner in situations where the Partnership is the general
      partner. To the extent that the Partnership is deemed to control these
      entities, these entities would be consolidated. Determination is made on a
      case-by-case basis.

      The Partnership accounts for the purchase of minority interests at fair
      value utilizing the purchase method of accounting in accordance with SFAS
      No. 141, "Business Combinations".

      Revenue Recognition

      The Partnership's lease agreements are operating leases and generally
      provide for varying rents over the lease terms. The Partnership records
      rental income for the full term of each lease on a straight-line basis.
      Accordingly, deferred rental income is recorded from tenants for the
      amount that is expected to be collected over the remaining lease term
      rather than currently. When a property is acquired, the term of existing
      leases is considered to commence as of the acquisition date for purposes
      of this calculation. Deferred rental income recorded amounted to $27.1
      million and $30.9 million for the Partnership at December 31, 2004 and
      2003, respectively.


                                      F-15
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Income Taxes

      Taxable income or loss of the Partnership is reported in the income tax
      returns of its partners. Accordingly, no provision for income taxes is
      made in the consolidated financial statements of the Partnership. However,
      the Partnership is required to pay certain state and local entity level
      taxes which are expensed as incurred.

      Net Income per Unit

      Net income per Unit is computed by dividing net income by 6,317,753,
      6,329,204 and 6,119,942 weighted average Units outstanding during the
      years ended December 31, 2004, 2003 and 2002, respectively.

      Distributions; Allocations of Income and Loss

      As provided in the partnership agreement, distributions are allocated to
      the limited partners based on their ownership of Units. No distributions,
      or net income or loss allocation, are made to the general partner. Income
      and loss for financial reporting purposes is allocated to limited partners
      based on their ownership of Units. Special allocation rules affect the
      allocation of taxable income and loss. The Partnership paid distributions
      of $46,106,000 ($7.30 per Unit), $34,731,000 ($5.52 per Unit) and
      $196,880,000 ($32.16 per Unit) to its limited partners during the years
      ended December 31, 2004, 2003 and 2002, respectively.

      Segment Reporting

      The Partnership has one reportable segment, net-leased commercial real
      estate. The Partnership evaluates performance based on net operating
      income, which is income before depreciation, amortization, interest and
      non-operating items.

      Fair Value of Financial Instruments

      Financial instruments held by the Partnership include cash and cash
      equivalents, receivables, accounts payable and long-term debt. The fair
      value of cash and cash equivalents, receivables and accounts payable
      approximates their current carrying amounts due to their short-term
      nature. The fair value of long-term debt, which has fixed interest rates,
      was determined based upon current market conditions and interest rates.
      The fair value of the mortgage notes payable approximates fair value for
      debt with similar terms and conditions due to yield maintenance
      requirements and prepayment penalties. The fair value of the Partnership's
      contract right mortgage notes payable, including those in discontinued
      operations, is


                                      F-16
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      approximately $356.7 million, which is $9.3 million less than the
      aggregate carrying amount at December 31, 2004. The fair value of the
      Partnership's interest rate cap is approximately $0.3 million and is
      included in deferred costs at December 31, 2004. Such fair value estimates
      are not necessarily indicative of the amounts that would be realized upon
      disposition of the Partnerships' financial instruments.

      Reclassifications

      Certain prior year amounts have been reclassified to conform to the 2004
      presentation, including the reporting of discontinued operations for those
      assets that have been disposed of or classified as held for sale in
      accordance with SFAS No. 144.

      Recently Issued Accounting Standards

      In December of 2004, the FASB issued SFAS No.153, "Exchange of Nonmonetary
      Assets - An Amendment of APB Opinion 29." The amendments made by SFAS No.
      153 are based on the principle that exchanges of nonmonetary assets should
      be measured based on the fair value of the assets exchanged. Further, the
      amendments eliminate the narrow exception for nonmonetary exchanges of
      similar productive assets and replace it with a broader exception of
      exchanges of nonmonetary assets that do not have commercial substance.
      SFAS No.153 is effective for nonmonetary asset exchanges occurring in
      fiscal periods beginning after June 15, 2005. The Partnership does not
      believe the adoption of SFAS No.153 will have a material impact on the
      Partnership's consolidated financial statements.

      In June 2005, the FASB ratified the EITF's consensus on Issue 04-5,
      "Determining Whether a General Partner, or the General Partners as a
      Group, Controls a Limited Partnership or Similar Entity When the Limited
      Partners Have Certain Rights." Issue 04-5 provides a framework for
      determining whether a general partner controls, and should consolidate, a
      limited partnership or a similar entity. It is effective after June 29,
      2005, for all newly formed limited partnerships and for any pre-existing
      limited partnerships that modify their partnership agreements after that
      date. General partners of all other limited partnerships will apply the
      consensus no later than the beginning of the first reporting period in
      fiscal years beginning after December 15, 2005. The Partnership has not
      completed the process of evaluating the impact that will result from the
      adoption of the consensus in EITF 04-5 on the Partnership's consolidated
      financial statements.


                                      F-17
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 - REAL ESTATE INVESTMENTS

      Most of the Partnership's properties are net-leased to a single commercial
      tenant. The properties are located throughout the United States. The
      leases are similar in many respects and generally provide for fixed rent
      payments and obligate the tenant to pay all capital and operating expenses
      for a property; obligate the tenant to perform all responsibilities (other
      than the payment of debt service) relating to the property; require the
      tenant to maintain insurance against casualty and liability losses; permit
      the tenant to sublet the property; and afford the tenant in many instances
      the right to terminate the lease at certain points during the primary term
      if it determines that its continued use and occupancy of the property
      would be uneconomic or unsuitable.

      The Partnership's ability to maintain and operate its properties and
      satisfy its contractual obligations is dependent upon the performance by
      the tenants of their obligations under their lease agreements with the
      Partnership. Under certain conditions (including the destruction of the
      property), many of the tenants have an option to purchase the property
      upon the expiration of the primary term of the lease and at the end of one
      or more renewal terms for a price stated in the lease agreement.

      The Partnership's properties are encumbered by mortgage notes payable and
      subordinated contract rights payable.

      The future minimum lease payments that are scheduled to be received under
      non-cancellable operating leases are as follows (in thousands):

                      2005                      $    247,502
                      2006                           236,733
                      2007                           203,245
                      2008                           149,180
                      2009                            50,337
                      Thereafter                      48,804
                                                ------------
                                                $    935,801
                                                ============

      Three tenants accounted for approximately 38%, 36% and 38% of the
      aggregate rental revenues from continuing operations of the Partnership in
      2004, 2003 and 2002, respectively.


                                      F-18
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 - REAL ESTATE INVESTMENTS (Continued)

      The Partnership owns the fee interest in the land on which certain of its
      properties are located, leases the land pursuant to ground leases or holds
      an estate for years with an option to lease the land upon expiration of
      the estate for years. Certain land interests held by the Newkirk Group
      comprised of ground leases, remainder interests or the right to acquire
      remainder interests in the land underlying certain properties were
      contributed to the Partnership in connection with the Exchange.

      The rent payable under the ground leases is as follows (in thousands):

                        2005                    $   3,013
                        2006                        2,401
                        2007                        1,773
                        2008                        1,147
                        2009                          798
                        Thereafter                    177
                                                ---------
                                                $   9,309
                                                =========

Note 4 - NOTES AND CONTRACT RIGHTS PAYABLE

      The Partnership, excluding discontinued operations, had outstanding
      mortgage notes payable and contract right mortgage notes payable with an
      aggregate principal balance of $742.0 million and $895.9 million at
      December 31, 2004 and 2003, respectively. The mortgage notes are at fixed
      interest rates with payments of principal and interest generally due
      either monthly, quarterly or semi-annually. All the mortgage notes are
      collateralized by the Partnership's real estate; some of the mortgage
      notes are cross-collateralized.

      An aggregate of $478.9 million as of December 31, 2004 in indebtedness
      under the mortgage notes mature at various dates from 2005 to 2024.
      Prepayment of most of the mortgage notes is permitted only with a yield
      maintenance payment or prepayment penalty as defined in the mortgage note
      agreements. Interest rates on the mortgages ranged from 5.0% to 10.4%,
      with a weighted average interest rate of 8.1% at December 31, 2004.
      Interest rates on the mortgages ranged from 4.2% to 11.3% with a weighted
      average interest rate of 8.0% at December 31, 2003.


                                      F-19
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - NOTES AND CONTRACT RIGHTS PAYABLE (Continued)

      The contract right mortgage notes aggregating $263.1 million as of
      December 31, 2004 mature at various dates from 2008 to 2024. The
      Partnership has the option to prepay some of these mortgage notes at a
      discount. All of the contract right mortgages are prepayable at any time
      without premium or penalty subject to the prior or simultaneous
      satisfaction of the underlying first mortgage loans. Interest rates ranged
      from 8.11% to 13.9%, with a weighted average interest rate of 10.7% at
      December 31, 2004. Interest rates ranged from 8.11% to 16.25%, with a
      weighted average interest rate of 10.3% at December 31, 2003.

      Mortgage notes payable and contract right mortgage notes payable
      aggregating approximately $1.1 billion and accrued interest thereon were
      assumed as part of the Exchange. These notes were recorded at their fair
      value as of the various dates of acquisition. This accounting method
      resulted in recorded interest expense that was $5.5 million, $3.8 million
      and $4.0 million greater than the contractual interest expense for the
      years ended December 31, 2004, 2003 and 2002, respectively. The effect of
      utilizing this accounting method was to reduce the balance of mortgage and
      contract rights notes payable. The cumulative reduction in liabilities
      related to utilizing this accounting method was $38.7 million and $56.1
      million at December 31, 2004 and 2003, respectively.

      During November 2003, the Partnership obtained a $208.5 million loan,
      which had an outstanding balance of $165.3 million and $208.4 million at
      December 31, 2004 and 2003, respectively. The note payable bears interest
      at a rate elected by the Partnership equal to either (1) LIBOR plus 450
      basis points or (2) the prime rate charged by the bank plus 250 basis
      points. The note payable was obtained to replace the Partnership's
      existing note payable and effectively reduced the interest rate on such
      borrowing from a minimum of 8.5% to a floating rate which was 7.01% (LIBOR
      plus 450 basis points) at December 31, 2004 and that will in no event
      exceed 9.5%, after giving effect to the three-year interest rate
      protection agreement entered into by the Partnership. The note payable is
      scheduled to mature on November 24, 2006, subject to two one-year
      extensions. The note payable requires monthly payments of interest only.
      In addition, mandatory prepayments of principal are required from the
      proceeds of property sales and refinancings and other asset sales, as well
      as up to approximately $1.3 million per quarter to the extent that T-Two
      Partners does not make the required principal payments on the T-Two Loan
      that is described in Note 6. The Partnership can prepay the note payable
      in whole or in part at any time together with a premium of 1/2% if such
      prepayment occurs on or before November 24, 2005 and with no premium after
      November 24, 2005. In addition, the Partnership and T-Two Partners may
      prepay up to $50.0


                                      F-20
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - NOTES AND CONTRACT RIGHTS PAYABLE (Continued)

      million annually of this Loan and the T-Two Loan without a premium. The
      note payable is secured by substantially all of the assets of the
      Partnership, and contains customary financial and other covenants.

      In connection with the Partnership's refinancings, real estate sales and
      repayments of mortgage debt during 2004, the Partnership has recognized a
      net loss from early extinguishment of debt of $6.3 million, which is
      included in discontinued operations. The net loss from early
      extinguishment of debt consisted of loss from debt extinguishment of $6.0
      million, plus mortgage prepayment penalties of $0.3 million. During 2003,
      the Partnership recognized a net gain from early extinguishment of debt of
      $8.7 million, which is included in discontinued operations. The net gain
      from early extinguishment of debt consisted of gains from debt
      extinguishment of $9.1 million, net of mortgage prepayment penalties of
      $0.4 million. During 2002, the Partnership recognized a net gain on the
      early extinguishment of debt of $6.3 million of which $0.5 million is in
      discontinued operations.

      Scheduled payments of principal at December 31, 2004, for the next five
      years and thereafter through maturity, are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                     Contract Right
                                 Mortgage             Note              Mortgage          Principal       Accrued
              Year            Notes Payable         Payable           Notes Payable         Total         Interest           Total
      ------------------      -------------       -----------        --------------      -----------     ----------       ----------
<S>                            <C>                <C>                 <C>                <C>             <C>              <C>
      2005                     $    98,397        $         -         $    9,213         $   107,610     $   23,863       $  131,473
      2006                         131,481            165,328             10,244             307,053         13,739          320,792
      2007                          91,720                  -             17,963             109,683          5,579          115,262
      2008                          68,399                  -             21,214              89,613          6,451           96,064
      2009                          34,221                  -             19,609              53,830          5,973           59,803
      Thereafter                    54,721                  -            184,829             239,550         46,536          286,086
                               -----------        -----------         ----------         -----------     ----------       ----------
                               $   478,939        $   165,328         $  263,072         $   907,339     $  102,141       $1,009,480
                               ===========        ===========         ==========         ===========     ==========       ==========
</TABLE>


                                      F-21
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 - EQUITY INVESTMENTS IN LIMITED PARTNERSHIPS

      The equity investments in limited partnerships consists of the following
      (in thousands):

                                                            2004         2003
                                                          --------     --------

      Balance, beginning of year                          $  8,492     $     --
      Investments in limited partnerships                      342        6,930
      Equity in income of limited partnerships               2,662        2,054
      Distributions from limited partnerships                 (389)        (492)
                                                          --------     --------

      Balance, end of year                                $ 11,107     $  8,492
                                                          ========     ========

      The partnership has paid a premium for its allocable share of the
      underlying limited partnerships which is being amortized into the equity
      income of the limited partnerships. The amortization expense amouted to
      $126, $42 and $0 for the years ended December 31, 2004, 2003 and 2002
      respectively.

      The limited partnerships condensed combined statements of operations for
      the years ended December 31, 2004 and 2003 and condensed combined balance
      sheets as of December 31, 2004 and 2003 are as follows (in thousands):

                                                     Year Ended     Year Ended
                                                     December 31,   December 31,
                                                         2004           2003
                                                     ------------   ------------
                                                             (Unaudited)

      Condensed Statements of Operations:

      Rental revenue and interest income               $26,571        $26,528

      Interest expense                                  11,051         12,052

      Administrative expenses                               77             54

      Depreciation expense                               3,501          3,400

      Amortization expense                                 525            525
                                                       -------        -------

      Net income                                       $11,417        $10,497
                                                       =======        =======


                                      F-22
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 - INVESTMENT IN LIMITED PARTNERSHIPS (Continued)

                                                      December 31,  December 31,
                                                          2004          2003
                                                       ---------     ---------
                                                             (Unaudited)

      Condensed Balance Sheets:

      Cash                                             $   1,690     $   1,681
      Real estate, net                                    84,598        87,066
      Other assets                                         3,318         3,709
                                                       ---------     ---------

      Total assets                                     $  89,606     $  92,456
                                                       =========     =========

      Accounts payable and other liabilities           $   1,920     $   2,355
      Mortgages payable                                  110,399       123,491
      Partners' deficit                                  (22,713)      (33,390)
                                                       ---------     ---------

      Total liabilities and partners' deficit          $  89,606     $  92,456
                                                       =========     =========

Note 6 - RELATED PARTY TRANSACTIONS

      WFA, an affiliate of the Newkirk Group, performs asset management services
      for the Partnership and received a fee of $1.9 million, $1.8 million and
      $1.8 million for the years ended December 31, 2004, 2003 and 2002,
      respectively.

      The Partnership provides certain asset management, investor and
      administrative services to some of the Unconsolidated Partnerships and the
      Other Partnerships. Control of the general partners of these partnerships
      was acquired by Partnership. The Partnership earned $0.3 million, $0.4
      million and $0.8 million of management fees for these services for the
      years ended December 31, 2004, 2003 and 2002, respectively. The
      Partnership had receivables for management fees of $0.9 million and $1.1
      million due from these partnerships at December 31, 2004 and 2003,
      respectively.

      The Partnership had a loan receivable and accrued interest of $0.2 million
      at December 31, 2002 and earned interest income of $0.2 million for the
      year ended December 31, 2002 from Cenland Associates Limited Partnership,
      one of the Other Partnerships. In February 2003, the Partnership received
      the remaining amount due on this loan.

      The Partnership has an ownership interest in the three most junior
      tranches of a securitized pool of first mortgages which includes 29 first
      mortgage loans encumbering 61 Partnership properties and 1 other property
      controlled by affiliates


                                      F-23
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6 - RELATED PARTY TRANSACTIONS (Continued)

      of the general partner. The Partnership's ownership interest, net of
      discount, ammounted to $10.1 million and $9.8 million at December 31, 2004
      and 2003, respectively, and the Partnership earned interest income of $1.2
      million per year for the years ended December 31, 2004, 2003 and 2002
      related to this ownership interest.

      Affiliates and executives of the Newkirk Group owned $17.3 million of a
      $145.2 million Real Estate Mortgage Investment Conduit ("REMIC") which was
      secured by the contract rights payable. The affiliates and executives of
      the Newkirk Group earned $2.2 million and $2.5 million of interest income
      during 2003 and 2002. The affiliates and executives were repaid in 2003
      when T-Two Partners purchased the T-1 Certificate as discussed in the
      following paragraph.

      T-Two Partners, an affiliate of the Newkirk Group, is the 100% beneficial
      owner of certain of the contract rights. T-Two Partners owned the portion
      of the contract rights referred to as the T-2 Certificate and during 2003
      purchased the portion of the contract rights referred to as the T-1
      Certificate. The Partnership incurred $25.0 million, $13.8 million and
      $12.5 million ($2.2 million, $3.2 million and $3.9 million of which is
      included in discontinued operations, respectively) of interest expense on
      these contract rights during 2004, 2003 and 2002, respectively. Contract
      right mortgage notes and accrued interest payable includes $249.5 million
      and $296.0 million due to T-Two Partners at December 31, 2004 and December
      31, 2003, respectively. The Partnership had the right to acquire T-Two
      Partners' interest in the contract rights in January 2008 by acquiring
      T-Two Partners in exchange for Units. The Newkirk Group had the right to
      require the Partnership to purchase this interest in December 2007 in
      exchange for Units. During 2003, as described below, the Partnership and
      the owners of T-Two Partners modified these rights.

      The Partnership's call option had previously provided for the acquisition
      of the interests in T-Two Partners in January 2008 in exchange for a
      number of units in the Partnership to be determined at the time of
      exercise based on an agreed-upon formula. The Partnership and the owners
      of T-Two Partners modified the Partnership's option in certain respects.
      First, the option can now be exercised by the Partnership at any time
      between November 24, 2006 and November 24, 2009. Second, the purchase
      price is payable in cash rather than units in the Partnership. Finally,
      the formula for determining the purchase price payable by the Partnership
      if it exercises the option has been revised in a manner that the
      Partnership's general partner believes to be significantly more favorable
      to the Partnership than the formula previously in effect. Specifically,
      the purchase price is calculated as follows: the sum of $316,526,573 plus
      T-Two Partners' costs of obtaining the T-Two Loan (approximately
      $7,346,000) and administering the trust that holds the


                                      F-24
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6 - RELATED PARTY TRANSACTIONS (Continued)

      second mortgage loans, together with interest on the foregoing sum at the
      effective rate of interest paid by T-Two Partners on the T-Two Loan, less
      all payments made from and after November 24, 2003 on the second mortgage
      loans.

      During November 2003, the Partnership obtained a $208.5 million loan,
      which had an outstanding balance of $165.3 million at December 31, 2004.
      At the same time that the Partnership obtained the loan, T-Two Partners
      obtained a $316.5 million loan. This loan is referred to as the T-Two
      Loan. The owners of T-Two Partners agreed to eliminate their put option
      which could require the Partnership to purchase T-Two Partners in December
      2007 and the Partnership agreed to guarantee repayment of the T-Two Loan.
      Currently, the Partnership believes that it has no exposure to loss under
      the guarantee since the T-Two Loan is over collateralized. T-Two Partners
      also agreed to provide a credit line to the Partnership bearing interest
      at LIBOR plus 450 basis points. If the Partnership exercises the option,
      the purchase price is to be calculated as follows: the sum of $316.5
      million plus T-Two Partners' costs of obtaining the T-Two Loan
      (approximately $7.3 million to the extent not reimbursed) and
      administering the trust that holds the contract rights, together with
      interest on the foregoing sum at the effective rate of interest paid by
      T-Two Partners on the T-Two Loan, less all payments made from and after
      November 24, 2003 on the contract rights.

      The Partnership has determined that T-Two Partners is a VIE, but that the
      Partnership is not the primary beneficiary of the VIE and therefore is not
      consolidated.

      T-Two Partners will reimburse the Partnership for approximately $7.3
      million of closing costs incurred in connection with the note payable and
      the T-Two Loan, together with interest thereon at a rate equal to LIBOR
      plus 450 basis points. The Partnership earned interest income of $0.5
      million and $37,000 on this obligation during 2004 and 2003, respectively.

      An affiliate of the general partner owns a portion of the second mortgage
      indebtedness of a property in which the Partnership has an interest. The
      second mortgage payable and accrued interest owned by the affiliate
      aggregated $15.2 million and $14.6 million at December 31, 2004 and
      December 31, 2003, respectively. Included in interest expense is $0.7
      million related to this second mortgage payable for 2004 and 2003.


                                      F-25
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6 - RELATED PARTY TRANSACTIONS (Continued)

      On July 29, 2004, the Partnership sold 25 properties for a combined net
      sales price of $63.8 million to Vornado, which is a limited partner in the
      Partnership and an affiliate of the Partnership's general partner. After
      satisfying existing mortgage debt of $31.5 million, the net sales proceeds
      were approximately $32.3 million. The Partnership recognized a net gain on
      the sale of these properties of $38.7 million.

      Also see Note 8 for related party acquisitions.


                                      F-26
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7 - CONTINGENCIES

      Legal

      In July 2002, an action was commenced in the Connecticut Superior Court
      against, among others, the Partnership's general partner and various
      affiliates of the Partnership's general partner. Plaintiffs are four
      limited partners of three of the Newkirk Partnerships. In order to avoid
      the expenses, distraction, and uncertainties of litigation, the defendants
      entered into a settlement agreement dated December 31, 2003 to settle the
      litigation. On April 16, 2004, the Court approved the settlement. The
      settlement provides for the following material terms: (i) the Newkirk
      Group will convey to unitholders of the Newkirk Partnerships who are
      unaffiliated with the general partner and who received limited partnership
      units in the Exchange, units in the Partnership equal to 1% of the
      outstanding units; (ii) the Partnership will pay $1.5 million to an escrow
      agent for the benefit of unaffiliated unitholders who were entitled to
      receive units in the exchange transaction; and (iii) the Partnership will
      pay $2.0 million to an escrow agent for the benefit of unitholders of the
      Newkirk Partnerships who were entitled to receive cash in the Exchange.
      The Partnership accrued $3.5 million with respect to this matter, which is
      included in general and administrative expense in the consolidated
      statement of operations for the year ended December 31, 2003. In April
      2004, the Partnership paid out $3.5 million with respect to this matter. A
      hearing has been set for April 11, 2005, at which time it is expected that
      the Court will approve the allocation of the 1% of outstanding units for
      distribution.

Note 8 - ACQUISITIONS

      On January 1, 2003, the Partnership acquired from an affiliate of the
      general partner, limited partnership interests in nine limited
      partnerships that own net-leased commercial properties. The limited
      partnership interests acquired by the Partnership ranged between 4.9% and
      57.75% of each partnership and were acquired in exchange for 317,813
      limited partnership units of the Partnership. In August 2003, the
      Partnership acquired approximately an additional 10.05% interest in one of
      these limited partnerships for a cash purchase price of $525,000,
      increasing the partnership interest to 23.55% from 13.5%. These interests
      were aquired from unaffiliated limited partners. In April 2004, the
      Partnership exercised an option to purchase additional limited partnership
      interests in two of the partnerships in exchange for 15,539 units. The
      values of the net-leased real estate partnerships and the Partnership
      units were determined without arms-length negotiations. Independent
      appraisals were obtained on the value of the properties owned by the
      limited partnerships. The Partnership has accounted for the acquisition on
      a historical cost basis. Four of the limited partnerships have been


                                      F-27
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 - ACQUISITIONS (Continued)

      consolidated into the Partnership's financial statements and five of the
      limited partnerships are being accounted for under the equity method of
      accounting.

      In January 2003, balances related to the issuance of 317,813 Units in the
      Partnership for the various assets contributed to the Partnership were as
      follows:

                                                             2003
                                                        --------------
                                                        (In thousands)

            Real estate investments, net                   $ 36,836
            Cash and cash equivalents                           382
            Receivables                                       3,557
            Deferred costs, net                               1,512
            Equity investments in limited partnerships        6,335
            Mortgage notes payable                          (61,057)
            Accrued interest payable                         (1,134)
            Accounts payable and accrued expenses               (68)
                                                           --------

            Partners' equity                               $(13,637)
                                                           ========

      In June 2004, the Partnership acquired for $297,500, pursuant to a tender
      offer, approximately 9.85% of the total limited partnership units
      outstanding in one partially owned consolidated partnership. The
      Partnership currently owns approximately 45.2% of the limited partnership.

      In July 2004, the Partnership acquired for $472,500 and $325,000, pursuant
      to two separate tender offers, approximately 7% and 4.5% of the total
      limited partnership units outstanding in two partially owned partnerships.
      The Partnership currently owns approximately 62.2% in one of the
      partnerships whose operations are consolidated and 45.3% in the other
      partnership.

      In January 2003, the Partnership acquired the land underlying the property
      owned by one of the partnerships. The land was acquired from a company
      affiliated with the general partner for $1.0 million, $50,000 of which was
      paid in cash and the balance in the form of a $950,000 note due September
      8, 2008. The note bore interest at the rate of 6.0% per annum, compounded
      annually, and was payable interest-only until maturity, at which time the
      full balance of the note was to be due. In October 2003, the note was
      satisfied by the Partnership from cash reserves. The purchase price for
      the land sale was determined without arms-length negotiations. An
      independent appraisal was obtained on the value of the land that was
      acquired.

      In April and June 2003, the Partnership acquired 30.6% and 46.1%,
      respectively, of the outstanding limited partnership interests in two
      Other Partnerships. The partnership interests were acquired for an
      aggregate cash purchase price of $711,250. The Partnership previously
      owned 1.5% and 3.8%, respectively, of the outstanding limited partnership
      interests in these two partnerships. The Partnership controls the general
      partners of each of these partnerships. The Partnership has consolidated
      these partnerships in accordance with the guidance provided by Statement
      of Position 78-9 "Accounting for Investments in Real Estate Ventures".

      In May and June 2003, the Partnership purchased the remainder interest in
      the land underlying 26 properties for an aggregate purchase price of $1.2
      million and, as a result, now owns a fee interest in the underlying land.
      The improvements on 24 of


                                      F-28
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 - ACQUISITIONS (Continued)

      the properties are owned by the Partnership and the improvements on the
      two other properties are owned by one of the Unconsolidated Partnerships
      in which the Partnership owns limited partnership interests and controls
      the general partner.

      In June 2004, the Partnership acquired the land underlying one of its
      properties in Bedford, Texas. The land was acquired from an unaffiliated
      party for approximately $2.6 million.

Note 9 - DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

      During the year ended December 31, 2004, the Partnership sold fifty-eight
      properties for a combined net sales price of $127.2 million. The
      Partnership recognized a net gain on sale of these properties of $49.4
      million. During the year ended December 31, 2003, the Partnership sold
      fourteen properties for a combined net sales price of $156.4 million. The
      Partnership recognized a net gain on sale of these properties of $29.5
      million. During the year ended December 31, 2002, the Partnership sold two
      properties for a combined net sales price of $3.2 million. The Partnership
      recognized a net loss on sale of these properties of $1.0 million. The
      sale and operations of these properties for all periods presented have
      been recorded as discontinued operations in accordance with the provisions
      of SFAS No. 144. In addition, the Partnership has classified various
      properties which have met all of the criteria of SFAS No. 144 as real
      estate held for sale in the accompanying consolidated balance sheets and
      has classified the operations of the properties and the sold properties as
      discontinued operations in the accompanying consolidated statements of
      operations.

      Discontinued operations for the years ended December 31, 2004, 2003 and
      2002 are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                     2004         2003         2002
                                                   --------     --------     --------
<S>                                                <C>          <C>          <C>
      Revenue                                      $ 15,321     $ 32,971     $ 62,569

      Expenses                                       (5,461)     (14,397)     (33,168)
      Impairment loss on real estate                (13,065)      (1,560)          --
      Net (loss) gain from early extinguishment
         of debt                                     (6,279)       8,733          553
      Gain (loss) from disposal of real estate       49,350       29,514         (983)
                                                   --------     --------     --------

        Income from discontinued operations        $ 39,866     $ 55,261     $ 28,971
                                                   ========     ========     ========
</TABLE>


                                      F-29
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 - DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE (Continued)

      Expenses include interest expense to related parties of $2.2 million, $3.2
      million and $3.9 million for the years ended December 31, 2004, 2003 and
      2002, respectively.

      Other assets of discontinued operations at December 31, 2004 and 2003 are
      summarized as follows (in thousands):

                                                      2004            2003
                                                      ----            ----

      Receivables                                     $ 81            $734
      Other assets                                     163             221
                                                      ----            ----

                                                      $244            $955
                                                      ====            ====

      Liabilities of discontinued operations at December 31, 2004 and 2003 are
      summarized as follows:

                                                          2004       2003
                                                        -------    -------

      Mortgage notes and accrued interest payable       $ 5,672    $30,371

      Prepaid rent                                           --      4,772

      Contract right mortgage notes and accrued
        interest payable (including $11,825 and
        $5,626 to related parties)                       11,825      5,626
                                                        -------    -------

                                                        $17,497    $40,769
                                                        =======    =======


                                      F-30
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10 - INCOME TAXES

      The Partnership's taxable income for 2004 and 2003 differs from net income
      for financial reporting purposes as follows (in thousands):

<TABLE>
<CAPTION>
                                               2004          2003          2002
                                            ---------     ---------     ---------
<S>                                         <C>           <C>           <C>
      Net income for financial reporting
        purposes                            $ 137,808     $ 145,164     $ 122,862
           Depreciation and amortization       30,472        37,364        23,425
           Interest expense                     4,650        10,219         4,081
           Gain on sale of real estate         42,290        80,517         4,118
           Impairment loss                     13,065         1,560            --
           Other                               (8,538)           85         6,602
           Net loss (gain) from early
             extinguishment of debt             6,269        (4,266)      (10,992)
           Straight-line rent adjustment        5,139        (3,248)       (2,293)
                                            ---------     ---------     ---------

      Taxable income                        $ 231,155     $ 267,395     $ 147,803
                                            =========     =========     =========
</TABLE>

      The net basis of the Partnership's assets and liabilities for tax
      reporting purposes is approximately $818.0 million and $891.0 million
      lower than the amount reported for financial statement purposes at
      December 31, 2004 and 2003, respectively.

Note 11 - SUBSEQUENT EVENTS

      During January 2005, the Partnership sold one property to an unaffiliated
      third party for a net sales price of $2.3 million. For financial reporting
      purposes, the Partnership expects to recognize a net gain on sale of this
      property of approximately $0.6 million during 2005.


                                      F-31
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12 - SUMMARY OF QUARTERLY RESULTS (UNAUDITED)

      The following summary represents the results of operations for each
      quarter in 2004 and 2003:

      (In thousands, except per unit amounts)

<TABLE>
<CAPTION>
                                                              Quarters Ended
                                       -----------------------------------------------------------------
                                         March 31         June 30        September 30      December 31
                                         --------         -------        ------------      -----------
<S>                                    <C>              <C>              <C>              <C>
      2004

      Revenues                         $    62,634      $   62,264       $   62,716       $   61,914
                                       ===========      ==========       ==========       ==========
      Net income                       $    37,844 (1)  $   19,355 (2)   $   53,886 (3)   $   26,723 (4)
                                       ===========      ==========       ==========       ==========
      Net income per
        limited partnership unit       $     5.99       $    3.06        $     8.53       $     4.23
                                       ===========      ==========       ==========       ==========

      2003

      Revenues                         $    66,174      $   66,323       $   64,325       $   65,331
                                       ===========      ==========       ==========       ==========
      Net income                       $    65,330 (5)  $   34,097 (6)   $   26,180 (7)   $   19,557 (8)
                                       ===========      ==========       ==========       ==========
      Net income per
        limited partnership unit       $     10.27      $     5.40       $     4.14       $     3.09
                                       ===========      ==========       ==========       ==========
</TABLE>

(1)   Includes gain from disposal of real estate of $7.7 million.
(2)   Includes gain from disposal of real estate of $1.8 million and an
      impairment loss of $9.7 million.
(3)   Includes gain from disposal of real estate of $38.9 million, an impairment
      loss of $3.4 million and a net loss from early extinguishment of debt of
      $6.7 million.
(4)   Includes gain from disposal of real estate of $1.0 million.
(5)   Includes gain from disposal of real estate of $26.1 million and a net gain
      from early extinguishment of debt of $8.1 million.
(6)   Includes gain from disposal of real estate of $6.2 million.
(7)   Includes loss from disposal of real estate of $2.0 million.
(8)   Includes loss from disposal of real estate of $0.8 million.


                                      F-32
<PAGE>

                     THE NEWKIRK MASTER LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13 - RESTATEMENT

      Subsequent to the issuance of the Partnership's consolidated financial
      statements for the year ended December 31, 2004, management determined
      that the Partnership's consolidated balance sheets at December 31, 2004
      and 2003 and the related consolidated statements of cash flows for each of
      the three years in the period ended December 31, 2004 should be restated
      for the following (in thousands):

      1)    To reclassify $8,216, $5,148 and $8,109 from cash and cash
            equivalents to restricted cash, respectively.

      2)    To reclassify distributions from limited partnerships from investing
            activities to operating activities in the amount of $389 and $492.

      Also, the Partnership has changed the presentation of the consolidated
      statement of cash flows for each of the three years in the period ended
      and no longer separately discloses the cash flows pertaining to
      discontinued operations.

                                                     As Previously
                                                       Reported      As Restated
                                                     -------------   -----------
      Balance Sheet at December 31, 2004
      Cash and cash equivalents                         $29,533        $21,317
      Restricted cash                                        --          8,216

      Statement of Cash Flows for the Year Ended
        December 31, 2004
      Net cash provided by operating activities         154,051        154,440
      Net cash provided by investing activities          95,492         92,035

                                                     As Previously
                                                       Reported      As Restated
                                                     -------------   -----------
      Balance Sheet at December 31, 2003
      Cash and cash equivalents                         $37,851        $32,703
      Restricted cash                                        --          5,148

      Statement of Cash Flows for the Year Ended
        December 31, 2003
      Net cash provided by operating activities         160,425        160,917
      Net cash provided by investing activities          58,808         61,277

                                                     As Previously
                                                       Reported      As Restated
                                                     -------------   -----------
      Statement of Cash Flows for the Year Ended
        December 31, 2002
      Net cash provided by investing activities         $11,080        $ 2,971


                                      F-33
<PAGE>

                         THE NEWKIRK LIMITED PARTNERSHIP
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                              At December 31, 2004

<TABLE>
<CAPTION>
                                                                                                                   Cost capitalized
                                                                                                                    subsequent to
                                                                                    Initial Cost to Registrant        acquistion
                                                                          ---------------------------------------------------------
                                                                                                                     Land/Building
                                                                                           Land        Building and       and
Description       Location                        Encumbrances                Land        Estates      Improvements   Improvements
-----------------------------------------------------------------------------------------------------------------------------------
                                             Mortgage    Contract Right
Continuing Operations:
<S>          <C>                      <C>  <C>            <C>             <C>           <C>           <C>              <C>
Office       Little Rock              AR   $    306,196   $     430,337   $   244,068   $        --   $    2,596,681   $       --
Office       Pine Bluff               AR        282,812         349,600        37,723             0        2,997,699            0
Office       Sierra Vista             AR              0               0        20,012             0                0            0
Office       El Segundo               CA     28,260,147               0             0     1,466,543       38,918,858      551,095
Office       Long Beach               CA     42,163,444       7,127,294             0    15,161,774       71,426,082            0
Office       Walnut Creek             CA      2,851,607       2,832,588             0     1,339,403       12,740,691            0
Office       Colorado Spring          CO      4,155,550               0       384,876             0       13,537,369            0
Office       Clinton                  CT      1,282,874               0             0             0        1,470,761            0
Office       Orlando                  FL              0               0             0             0       15,198,784            0
Office       Orlando                  FL      9,113,078       9,074,642     2,015,271             0       39,647,028            0
Office       Columbus                 IN              0      10,813,570             0             0       53,535,792            0
Office       Owensboro                KY     14,162,276               0             0             0       15,716,112            0
Office       Carondelet               LA     13,383,608               0             0             0       11,441,815            0
Office       Tulane                   LA     10,762,326               0             0             0        9,200,848            0
Office       Baltimore                MD              0      53,545,257             0             0      138,489,552            0
Office       Bridgeton                MO        530,388         470,524             0       420,249        3,177,573            0
Office       Carteret                 NJ      5,382,338       1,652,759       482,890             0       10,450,068            0
Office       Elizabeth                NJ      1,196,806       1,000,772       131,054             0        4,761,579      125,000
Office       Morristown               NJ     13,521,257      12,119,523             0             0       61,910,388            0
Office       MorrisTownship           NJ     10,359,363       8,257,347             0             0       35,912,060            0
Office       MorrisTownship           NJ      2,300,894       1,834,020             0             0        7,976,343            0
Office       MorrisTownship           NJ      6,211,595       4,951,201             0             0       21,533,288            0
Office       Plainsboro               NJ        217,836         182,155        23,853             0          866,678       25,000
Office       Las Vegas                NV     19,625,028      10,509,093     1,993,597             0       42,579,675            0
Office       Miamisburg               OH              0       2,531,406             0       702,011        7,922,845            0
Office       Miamisburg               OH              0       1,364,191             0       251,821        6,454,696            0
Office       Toledo                   OH     46,808,386       6,536,878             0             0       95,878,252            0
Office       Allentown                PA      1,007,660               0        29,773             0        4,816,913            0
Office       Johnson City             TN              0       1,548,968       550,046             0        4,569,794            0
Office       Kingport                 TN        730,911         775,116        89,846             0        3,159,093            0
Office       Memphis                  TN     36,929,449      10,876,117        50,183             0       63,296,739      306,467
Office       Memphis                  TN      1,715,021       1,223,028             0       647,569        6,005,774            0
Office       Beaumont                 TX      2,438,258       1,798,513       318,642             0        9,484,884       47,730
Office       Beaumont                 TX     23,953,131       9,255,220             0             0       49,406,412            0
Office       Dallas                   TX      4,124,396       5,301,317       489,985             0       20,059,117      141,576
Office       Garland                  TX              0       2,542,341        60,079     1,676,696       11,406,998      188,162


                                           ----------------------------------------------------------------------------------------
                                            303,776,635     168,903,777     6,921,898    21,666,066      898,547,241    1,385,030
                                           ----------------------------------------------------------------------------------------

Retail       Dothan                   AL        120,207         259,059             0             0        1,622,392            0
Retail       Florence                 AL        910,151         649,053             0       343,661        3,187,227            0
Retail       Huntsville               AL              0         583,816             0             0        2,834,566            0

<CAPTION>
                         As of December 31, 2004
--------------------------------------------------------------------------------------------------

                 Land         Building and                    Accumulated       Date
    Land        Estates       Improvements        Total       Depreciation    Acquired     Life
--------------------------------------------------------------------------------------------------


<S>           <C>              <C>           <C>              <C>             <C>        <C>
$   244,068   $        --      $ 2,596,681   $    2,840,749   $    818,466    1/1/2002      40 yrs
     37,723             0        2,997,699        3,035,422      1,246,646    1/1/2002      40 yrs
     20,012             0                0           20,012              0    1/1/2002
    551,095     1,466,543       38,918,858       40,936,496     14,999,215    1/1/2002   26-40 yrs
          0    15,161,774       71,426,082       86,587,856     34,194,621    1/1/2002   27-40 yrs
          0     1,339,403       12,740,691       14,080,094      5,371,068    1/1/2002   27-40 yrs
    384,876             0       13,537,369       13,922,245      4,716,037    1/1/2002   38-40 yrs
          0             0        1,470,761        1,470,761        112,023    1/1/2003   20-40 yrs
          0             0       15,198,784       15,198,784      5,749,199    1/1/2002   38-40 yrs
  2,015,271             0       39,647,028       41,662,299     14,620,193    1/1/2002   38-40 yrs
          0             0       53,535,792       53,535,792     12,030,124    1/1/2002   38-40 yrs
          0             0       15,716,112       15,716,112      1,253,665    1/1/2003   20-40 yrs
          0             0       11,441,815       11,441,815      1,064,957    1/1/2003   20-40 yrs
          0             0        9,200,848        9,200,848        856,377    1/1/2003   20-40 yrs
          0             0      138,489,552      138,489,552     58,610,907    1/1/2002   14-40 yrs
          0       420,249        3,177,573        3,597,822      1,545,599    1/1/2002   25-40 yrs
    482,890             0       10,450,068       10,932,958      3,652,238    1/1/2002   38-40 yrs
    256,054             0        4,761,579        5,017,633      1,664,751    1/1/2002   38-40 yrs
          0             0       61,910,388       61,910,388     26,878,073    1/1/2002   20-40 yrs
          0             0       35,912,060       35,912,060     11,694,807    1/1/2002   20-40 yrs
          0             0        7,976,343        7,976,343      2,597,506    1/1/2002   20-40 yrs
          0             0       21,533,288       21,533,288      7,012,342    1/1/2002   20-40 yrs
     48,853             0          866,678          915,531        303,009    1/1/2002   38-40 yrs
  1,993,597             0       42,579,675       44,573,272      8,547,357    1/1/2002   38-40 yrs
          0       702,011        7,922,845        8,624,856      4,332,133    1/1/2002   22-40 yrs
          0       251,821        6,454,696        6,706,517      2,875,813    1/1/2002   22-40 yrs
          0             0       95,878,252       95,878,252     35,865,822    1/1/2002   38-40 yrs
     29,773             0        4,816,913        4,846,686      2,305,748    1/1/2002      40 yrs
    550,046             0        4,569,794        5,119,840        946,675    1/1/2002   38-40 yrs
     89,846             0        3,159,093        3,248,939        961,846    1/1/2002   38-40 yrs
    356,650             0       63,296,739       63,653,389     15,950,245    1/1/2002   38-40 yrs
          0       647,569        6,005,774        6,653,343      2,557,639    1/1/2002   27-40 yrs
    366,372             0        9,484,884        9,851,256      3,473,394    1/1/2002   38-40 yrs
          0             0       49,406,412       49,406,412      8,204,549    1/1/2002   38-40 yrs
    631,561             0       20,059,117       20,690,678      9,694,012    1/1/2002   38-40 yrs
    248,241     1,676,696       11,406,998       13,331,935      4,083,692    1/1/2002   29-40 yrs


--------------------------------------------------------------------------
  8,306,928    21,666,066      898,547,241      928,520,235    310,790,748
--------------------------------------------------------------------------

          0             0        1,622,392        1,622,392        739,170    1/1/2002      40 yrs
          0       343,661        3,187,227        3,530,888      1,357,323    1/1/2002   27-40 yrs
          0             0        2,834,566        2,834,566      1,291,657    1/1/2002   38-40 yrs
</TABLE>

<PAGE>

                         THE NEWKIRK LIMITED PARTNERSHIP
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                              At December 31, 2004

<TABLE>
<CAPTION>
                                                                                                                   Cost capitalized
                                                                                                                    subsequent to
                                                                                    Initial Cost to Registrant        acquistion
                                                                          ---------------------------------------------------------
                                                                                                                     Land/Building
                                                                                           Land        Building and       and
Description       Location                        Encumbrances                Land        Estates      Improvements   Improvements
-----------------------------------------------------------------------------------------------------------------------------------
                                             Mortgage    Contract Right
<S>          <C>                      <C>     <C>             <C>             <C>           <C>           <C>              <C>
Retail       Huntsville               AL        492,627         531,500             0             0        2,417,739            0
Retail       Montgomery               AL        578,710         624,377       269,635             0        2,840,225            0
Retail       Montgomery               AL         65,022         239,205             0             0        1,463,512            0
Retail       Tuscaloosa               AL         43,661         253,034             0             0        1,238,855            0
Retail       Bisbee                   AZ        714,914         339,456             0       333,266        2,127,157            0
Retail       Mesa                     AZ              0               0        45,834             0                0            0
Retail       Phoenix                  AZ              0               0        47,943             0                0            0
Retail       Springdale               AZ              0               0             0             0                0        3,670
Retail       Tucson                   AZ        816,227         387,562             0       380,494        2,428,605            0
Retail       Tucson                   AZ              0               0        48,430             0                0            0
Retail       Beaumont                 CA              0               0             0             0                0        3,830
Retail       Blythe                   CA              0               0             0             0                0        3,797
Retail       Corona                   CA        343,006         201,862             0       121,144        1,014,368            0
Retail       Downey                   CA        336,636         585,297       327,365             0        2,104,623            0
Retail       El Toro                  CA              0         290,702       141,727       319,982          285,471            0
Retail       Huntington Beach         CA        444,163       1,086,549       421,465             0        2,867,999            0
Retail       Indio                    CA        300,914         177,090             0       106,278          889,906            0
Retail       Lancaster                CA        429,728       1,051,235       407,766             0        2,774,789            0
Retail       Livermore                CA              0         519,248       138,725             0        2,903,113       41,717
Retail       Lomita                   CA        271,247         471,657             0       287,131        1,746,370            0
Retail       Loveland                 CA              0               0        18,581             0                0            0
Retail       Mammoth Lake             CA        976,202       1,234,214             0       700,534        4,857,298            0
Retail       Morgan Hill              CA              0         170,961        83,350       188,181          167,891            0
Retail       Pasadena                 CA              0               0        18,226             0                0            0
Retail       Pinole                   CA      1,609,002         426,706             0       190,365        3,930,655            0
Retail       Pleasanton               CA      5,988,751       1,077,582       480,348             0       13,118,825            0
Retail       Redlands                 CA              0         149,507        72,890       164,566          146,822            0
Retail       Rialto                   CA              0               0        14,673             0                0            0
Retail       San Diego                CA              0       3,405,562             0             0       15,656,895            0
Retail       San Dimas                CA              0               0        15,713             0                0            0
Retail       Santa Monica             CA      4,263,674         917,220       445,955             0        7,050,333            0
Retail       Santa Rosa               CA              0         207,862        48,484             0          931,273       20,590
Retail       Simi Valley              CA        609,586         497,668             0             0        2,778,433            0
Retail       Simi Valley              CA              0               0        16,828             0                0            0
Retail       Tustin                   CA              0               0       285,000             0          637,017            0
Retail       Union City               CA              0         190,864        93,053       210,089          171,481            0
Retail       Ventura                  CA      3,361,147       1,604,083             0             0        6,870,815            0
Retail       Yorba Linda              CA              0         198,675        96,861       218,686          211,064            0
Retail       Yucca Valley             CA              0               0        17,463             0                0            0
Retail       Aurora                   CO        556,458         703,531             0       400,072        2,768,775            0
Retail       Aurora                   CO         54,568         316,249       280,145             0        1,548,355            0


<CAPTION>
                         As of December 31, 2004
--------------------------------------------------------------------------------------------------

                 Land         Building and                    Accumulated       Date
    Land        Estates       Improvements        Total       Depreciation    Acquired     Life
--------------------------------------------------------------------------------------------------
<S>               <C>           <C>              <C>             <C>          <C>        <C>
          0             0        2,417,739        2,417,739        554,661    1/1/2002   38-40 yrs
    269,635             0        2,840,225        3,109,860        651,584    1/1/2002   38-40 yrs
          0             0        1,463,512        1,463,512        711,693    1/1/2002      40 yrs
          0             0        1,238,855        1,238,855        467,869    1/1/2002      40 yrs
          0       333,266        2,127,157        2,460,423      1,044,007    1/1/2002   27-40 yrs
     45,834             0                0           45,834              0    1/1/2002
     47,943             0                0           47,943              0    1/1/2002
      3,670             0                0            3,670              0    1/1/2002
          0       380,494        2,428,605        2,809,099      1,191,955    1/1/2002   27-40 yrs
     48,430             0                0           48,430              0    1/1/2002
      3,830             0                0            3,830              0    1/1/2002
      3,797             0                0            3,797              0    1/1/2002
          0       121,144        1,014,368        1,135,512        291,644    1/1/2002   22-40 yrs
    327,365             0        2,104,623        2,431,988        698,158    1/1/2002   38-40 yrs
    141,727       319,982          285,471          747,180         73,686    4/1/2003   20-40 yrs
    421,465             0        2,867,999        3,289,464        632,295    1/1/2002   38-40 yrs
          0       106,278          889,906          996,184        255,857    1/1/2002   26-40 yrs
    407,766             0        2,774,789        3,182,555        611,745    1/1/2002   38-40 yrs
    180,442             0        2,903,113        3,083,555      1,118,235    1/1/2002   38-40 yrs
          0       287,131        1,746,370        2,033,501        757,293    1/1/2002   25-40 yrs
     18,581             0                0           18,581              0    1/1/2002
          0       700,534        4,857,298        5,557,832      2,416,240    1/1/2002   27-40 yrs
     83,350       188,181          167,891          439,422         43,340    4/1/2003   20-40 yrs
     18,226             0                0           18,226              0    1/1/2002
          0       190,365        3,930,655        4,121,020      1,800,469    1/1/2002   30-40 yrs
    480,348             0       13,118,825       13,599,173      5,764,732    1/1/2002      40 yrs
     72,890       164,566          146,822          384,278         37,903    4/1/2003   20-40 yrs
     14,673             0                0           14,673              0    1/1/2002
          0             0       15,656,895       15,656,895      6,964,114    1/1/2002   38-40 yrs
     15,713             0                0           15,713              0    1/1/2002
    445,955             0        7,050,333        7,496,288      2,598,907    1/1/2002   38-40 yrs
     69,074             0          931,273        1,000,347        183,713    1/1/2002   38-40 yrs
          0             0        2,778,433        2,778,433        982,012    1/1/2002   38-40 yrs
     16,828             0                0           16,828              0    1/1/2002
    285,000             0          637,017          922,017         75,544    1/1/2002   35-40 yrs
     93,053       210,089          171,481          474,623         32,431    4/1/2003   20-40 yrs
          0             0        6,870,815        6,870,815      2,925,470    1/1/2002   20-40 yrs
     96,861       218,686          211,064          526,611         66,323    4/1/2003   20-40 yrs
     17,463             0                0           17,463              0    1/1/2002
          0       400,072        2,768,775        3,168,847      1,377,907    1/1/2002   27-40 yrs
    280,145             0        1,548,355        1,828,500        584,756    1/1/2002      40 yrs
</TABLE>

<PAGE>

                         THE NEWKIRK LIMITED PARTNERSHIP
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                              At December 31, 2004

<TABLE>
<CAPTION>
                                                                                                                   Cost capitalized
                                                                                                                    subsequent to
                                                                                    Initial Cost to Registrant        acquistion
                                                                          ---------------------------------------------------------
                                                                                                                     Land/Building
                                                                                           Land        Building and       and
Description       Location                        Encumbrances                Land        Estates      Improvements   Improvements
-----------------------------------------------------------------------------------------------------------------------------------
                                             Mortgage    Contract Right
<S>          <C>                      <C>     <C>             <C>             <C>           <C>           <C>              <C>
Retail       Aurora                   CO        150,064         378,760             0             0        1,687,582            0
Retail       Aurora                   CO              0               0        19,324             0                0            0
Retail       Colorado Springs         CO              0               0        20,139             0                0            0
Retail       Littleton                CO        138,343         273,793       226,074             0        1,885,393            0
Retail       Littleton                CO        380,788         931,514       361,327             0        2,458,779            0
Retail       Pueblo                   CO              0               0        15,588             0                0            0
Retail       Bradenton                FL        932,701         884,763       254,760             0        4,088,632       17,827
Retail       Cape Coral               FL              0         464,773       175,559             0        2,125,785            0
Retail       Casselberry              FL        546,914         950,899       411,929             0        3,953,110            0
Retail       Gainsville               FL              0         525,396       198,458             0        2,325,274            0
Retail       Homestead                FL              0               0        19,681             0                0            0
Retail       Largo                    FL         71,700         415,538       278,585             0        2,034,476            0
Retail       Largo, 66th              FL              0         404,691       152,864             0        2,008,829            0
Retail       Largo, Keene             FL              0         619,697       234,080             0        2,508,802            0
Retail       Orlando                  FL              0         553,723             0             0        2,661,472            0
Retail       Orlando                  FL              0               0        15,410             0                0            0
Retail       Pinellas Park            FL        660,179         712,118       288,344             0        3,158,143            0
Retail       Port Richey              FL        115,214         228,017             0             0        1,570,169            0
Retail       Tallahassee              FL              0         275,954             0             0        1,729,065            0
Retail       Venice                   FL              0         559,451        99,324             0        3,127,889       41,717
Retail       Atlanta (Dunwoody)       GA              0         266,145             0       120,697          813,389            0
Retail       Atlanta (Exec Park)      GA              0         337,407             0       153,014        1,031,179            0
Retail       Atlanta (Ponce de Leon)  GA              0         236,492             0       107,249          722,764            0
Retail       Cumming                  GA              0         597,388             0       270,916        1,825,733            0
Retail       Duluth                   GA              0         401,538             0       182,098        1,227,177            0
Retail       Forest Park (Clayton)    GA              0         600,912             0       272,514        1,836,502            0
Retail       Jonesboro                GA              0         232,566             0       105,469          710,765            0
Retail       Stone Mountain           GA              0         286,326             0       129,849          875,068            0
Retail       Boise                    ID        745,292         706,987       203,572             0        3,267,103       17,827
Retail       Boise                    ID        442,352         361,137        89,102             0        2,016,194            0
Retail       Freeport                 IL              0         393,374       148,591             0        1,999,052            0
Retail       Rock Falls               IL              0         414,929       156,731             0        2,052,332            0
Retail       Carmel                   IN              0         494,994        28,752             0        2,326,954       23,279
Retail       Lawrence                 IN              0         602,971        30,606             0        2,877,258       23,279
Retail       Louisville               KY        695,154         640,821             0       690,033        3,996,527            0
Retail       Baton Rouge              LA        630,525         680,280       232,849             0        3,094,520            0
Retail       Minden                   LA        622,050         427,997       342,304        76,762        1,961,545            0
Retail       Arnold                   MO              0               0             0             0                0        4,817
Retail       Independence             MO              0               0        15,561             0                0            0
Retail       Lee's Summit             MO              0               0             0             0                0        3,886
Retail       St. Louis                MO              0               0        18,418             0                0            0
Retail       Billings                 MT        563,861         712,891             0             0        2,805,610            0

<CAPTION>
                         As of December 31, 2004
--------------------------------------------------------------------------------------------------

                 Land         Building and                    Accumulated       Date
    Land        Estates       Improvements        Total       Depreciation    Acquired     Life
--------------------------------------------------------------------------------------------------
<S>               <C>           <C>               <C>            <C>          <C>        <C>
          0             0        1,687,582        1,687,582        432,057    1/1/2002      40 yrs
     19,324             0                0           19,324              0    1/1/2002
     20,139             0                0           20,139              0    1/1/2002
    226,074             0        1,885,393        2,111,467        610,427    1/1/2002   38-40 yrs
    361,327             0        2,458,779        2,820,106        542,076    1/1/2002   38-40 yrs
     15,588             0                0           15,588              0    1/1/2002
    272,587             0        4,088,632        4,361,219      1,339,453    1/1/2002   38-40 yrs
    175,559             0        2,125,785        2,301,344        806,375    1/1/2002   38-40 yrs
    411,929             0        3,953,110        4,365,039      1,311,349    1/1/2002   38-40 yrs
    198,458             0        2,325,274        2,523,732        882,046    1/1/2002   38-40 yrs
     19,681             0                0           19,681              0    1/1/2002
    278,585             0        2,034,476        2,313,061        768,345    1/1/2002      40 yrs
    152,864             0        2,008,829        2,161,693        762,009    1/1/2002   38-40 yrs
    234,080             0        2,508,802        2,742,882        951,664    1/1/2002   38-40 yrs
          0             0        2,661,472        2,661,472      1,212,781    1/1/2002   38-40 yrs
     15,410             0                0           15,410              0    1/1/2002
    288,344             0        3,158,143        3,446,487        773,019    1/1/2002   38-40 yrs
          0             0        1,570,169        1,570,169        508,368    1/1/2002   38-40 yrs
          0             0        1,729,065        1,729,065        743,547    1/1/2002      40 yrs
    141,041             0        3,127,889        3,268,930      1,204,815    1/1/2002   38-40 yrs
          0       120,697          813,389          934,086        360,751    1/1/2002   25-35 yrs
          0       153,014        1,031,179        1,184,193        457,345    1/1/2002   25-35 yrs
          0       107,249          722,764          830,013        320,558    1/1/2002   25-35 yrs
          0       270,916        1,825,733        2,096,649        809,742    1/1/2002   25-35 yrs
          0       182,098        1,227,177        1,409,275        544,273    1/1/2002   25-35 yrs
          0       272,514        1,836,502        2,109,016        814,519    1/1/2002   25-35 yrs
          0       105,469          710,765          816,234        315,236    1/1/2002   25-35 yrs
          0       129,849          875,068        1,004,917        388,107    1/1/2002   25-35 yrs
    221,399             0        3,267,103        3,488,502      1,070,320    1/1/2002   38-40 yrs
     89,102             0        2,016,194        2,105,296        712,605    1/1/2002   38-40 yrs
    148,591             0        1,999,052        2,147,643        758,891    1/1/2002   38-40 yrs
    156,731             0        2,052,332        2,209,063        778,512    1/1/2002   38-40 yrs
     52,031             0        2,326,954        2,378,985      1,019,160    1/1/2002   20-40 yrs
     53,885             0        2,877,258        2,931,143      1,260,185    1/1/2002   20-40 yrs
          0       690,033        3,996,527        4,686,560      2,018,484    1/1/2002   27-40 yrs
    232,849             0        3,094,520        3,327,369        709,924    1/1/2002   38-40 yrs
    342,304        76,762        1,961,545        2,380,611        495,470    1/1/2002   27-40 yrs
      4,817             0                0            4,817              0    1/1/2002
     15,561             0                0           15,561              0    1/1/2002
      3,886             0                0            3,886              0    1/1/2002
     18,418             0                0           18,418              0    1/1/2002
          0             0        2,805,610        2,805,610      1,077,520    1/1/2002   38-40 yrs
</TABLE>

<PAGE>

                         THE NEWKIRK LIMITED PARTNERSHIP
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                              At December 31, 2004

<TABLE>
<CAPTION>
                                                                                                                   Cost capitalized
                                                                                                                    subsequent to
                                                                                    Initial Cost to Registrant        acquistion
                                                                          ---------------------------------------------------------
                                                                                                                     Land/Building
                                                                                           Land        Building and       and
Description       Location                        Encumbrances                Land        Estates      Improvements   Improvements
-----------------------------------------------------------------------------------------------------------------------------------
                                             Mortgage    Contract Right
<S>          <C>                      <C>     <C>             <C>             <C>           <C>           <C>              <C>
Retail       Bozeman                  MT         67,122         144,655             0             0          905,925            0
Retail       Charlotte                NC              0         182,550        20,819             0          898,638       15,259
Retail       Concord                  NC              0         367,400        41,180             0        1,777,516       15,259
Retail       Jacksonville             NC              0         160,215        64,422             0          729,731            0
Retail       Jefferson                NC              0         139,630             0             0          635,971            0
Retail       Lexinton                 NC              0         265,357       106,705             0        1,208,617            0
Retail       Thomasville              NC              0         198,991        23,546             0        1,016,388       15,259
Retail       Omaha                    NE        525,693         914,004       257,838             0        4,414,646            0
Retail       Omaha                    NE        181,196         689,265       548,061             0        2,989,091            0
Retail       Omaha                    NE        622,584         671,713       242,848             0        3,055,569            0
Retail       Garwood                  NJ        495,554         735,121             0             0        3,802,120      607,569
Retail       Albuquerque              NM        786,458         541,116       261,712        97,050        2,480,017            0
Retail       Albuquerque              NM              0               0        16,692             0                0            0
Retail       Albuquerque              NM              0               0        15,482             0                0            0
Retail       LasCruces                NM        561,492         532,633       153,370             0        2,461,381       17,827
Retail       Las Vegas                NV        341,943         533,291             0             0        2,516,348            0
Retail       Las Vegas                NV        680,885         555,876             0             0        3,103,406            0
Retail       Las Vegas                NV              0         284,049       313,727             0        1,629,723            0
Retail       Las Vegas                NV              0               0        19,977             0                0            0
Retail       Reno                     NV        437,480         325,869             0             0        1,760,213            0
Retail       Portchester              NY      1,507,414       1,382,633             0             0        7,308,836            0
Retail       Cincinatti               OH        333,937         307,837             0             0        2,446,610            0
Retail       Columbus                 OH        714,460         658,617             0       608,625        3,531,942            0
Retail       Franklin                 OH              0         348,067        13,860             0        1,685,071       23,279
Retail       Lawton                   OK        758,774         360,282             0       353,712        2,257,661            0
Retail       Ponca City               OK              0               0        47,435             0                0            0
Retail       Still Water              OK              0               0        15,239             0                0            0
Retail       Beaverton                OR        438,882       1,073,630       416,452             0        2,833,900            0
Retail       Grants Pass              OR        686,492         325,961             0       320,017        2,042,594            0
Retail       Portland                 OR              0         580,807       555,800             0        2,156,029            0
Retail       Salem                    OR        325,333         795,857       308,707             0        2,100,707            0
Retail       Doylestown               PA        296,861         196,497        97,322             0          819,192          108
Retail       Lansdale                 PA        313,946         207,805       102,922             0          866,323          108
Retail       Lima                     PA        341,708         226,182       112,019             0          942,899          108
Retail       Philadelphia             PA        596,417         801,444       628,239             0        3,796,188            0
Retail       Philadelphia, 52nd       PA        375,881         248,801       123,229             0        1,037,260          108
Retail       Philadelphia, Broad      PA        399,374         264,352       130,925             0        1,102,037          108
Retail       Philadelphia, Bustle     PA        296,861         196,497        97,322             0          819,192          108
Retail       Philadelphia, Cottman    PA        422,866         279,901       138,629             0        1,166,885          108
Retail       Philadelphia, Frankford  PA        328,896         217,701       108,178             0          907,541          108
Retail       Philadelphia, Lehigh     PA        298,996         197,910        98,020             0          825,061          108
Retail       Philadelphia, N 5th      PA         89,699          59,373        29,406             0          247,488          104

<CAPTION>
                         As of December 31, 2004
--------------------------------------------------------------------------------------------------

                 Land         Building and                    Accumulated       Date
    Land        Estates       Improvements        Total       Depreciation    Acquired     Life
--------------------------------------------------------------------------------------------------
<S>               <C>           <C>               <C>            <C>          <C>        <C>
          0             0          905,925          905,925        412,744    1/1/2002      40 yrs
     36,078             0          898,638          934,716        239,582    1/1/2002   38-40 yrs
     56,439             0        1,777,516        1,833,955        473,896    1/1/2002   38-40 yrs
     64,422             0          729,731          794,153        180,607    1/1/2002   38-40 yrs
          0             0          635,971          635,971        157,402    1/1/2002   38-40 yrs
    106,705             0        1,208,617        1,315,322        299,131    1/1/2002   38-40 yrs
     38,805             0        1,016,388        1,055,193        270,975    1/1/2002   38-40 yrs
    257,838             0        4,414,646        4,672,484      1,464,453    1/1/2002   38-40 yrs
    548,061             0        2,989,091        3,537,152      1,383,430    1/1/2002   38-40 yrs
    242,848             0        3,055,569        3,298,417        700,988    1/1/2002   38-40 yrs
    607,569             0        3,802,120        4,409,689      1,054,934    1/1/2002   38-40 yrs
    261,712        97,050        2,480,017        2,838,779        626,431    1/1/2002   27-40 yrs
     16,692             0                0           16,692              0    1/1/2002
     15,482             0                0           15,482              0    1/1/2002
    171,197             0        2,461,381        2,632,578        806,360    1/1/2002   38-40 yrs
          0             0        2,516,348        2,516,348        524,651    1/1/2002   38-40 yrs
          0             0        3,103,406        3,103,406      1,096,870    1/1/2002   38-40 yrs
    313,727             0        1,629,723        1,943,450        613,320    1/1/2002      40 yrs
     19,977             0                0           19,977              0    1/1/2002
          0             0        1,760,213        1,760,213        502,803    1/1/2002   38-40 yrs
          0             0        7,308,836        7,308,836      2,653,440    1/1/2002   38-40 yrs
          0             0        2,446,610        2,446,610        898,904    1/1/2002   38-40 yrs
          0       608,625        3,531,942        4,140,567      1,782,891    1/1/2002   27-40 yrs
     37,139             0        1,685,071        1,722,210        738,028    1/1/2002   38-40 yrs
          0       353,712        2,257,661        2,611,373      1,108,057    1/1/2002   27-40 yrs
     47,435             0                0           47,435              0    1/1/2002
     15,239             0                0           15,239              0    1/1/2002
    416,452             0        2,833,900        3,250,352        624,777    1/1/2002   38-40 yrs
          0       320,017        2,042,594        2,362,611      1,002,502    1/1/2002   27-40 yrs
    555,800             0        2,156,029        2,711,829        982,461    1/1/2002   38-40 yrs
    308,707             0        2,100,707        2,409,414        463,133    1/1/2002   38-40 yrs
     97,430             0          819,192          916,622        214,823    1/1/2002   20-40 yrs
    103,030             0          866,323          969,353        227,181    1/1/2002   20-40 yrs
    112,127             0          942,899        1,055,026        247,263    1/1/2002   20-40 yrs
    628,239             0        3,796,188        4,424,427      1,126,514    1/1/2002      40 yrs
    123,337             0        1,037,260        1,160,597        272,007    1/1/2002   20-40 yrs
    131,033             0        1,102,037        1,233,070        288,996    1/1/2002   20-40 yrs
     97,430             0          819,192          916,622        214,823    1/1/2002   20-40 yrs
    138,737             0        1,166,885        1,305,622        306,000    1/1/2002   20-40 yrs
    108,286             0          907,541        1,015,827        237,990    1/1/2002   20-40 yrs
     98,128             0          825,061          923,189        216,362    1/1/2002   20-40 yrs
     29,510             0          247,488          276,998         64,901    1/1/2002   20-40 yrs
</TABLE>

<PAGE>

                         THE NEWKIRK LIMITED PARTNERSHIP
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                              At December 31, 2004

<TABLE>
<CAPTION>
                                                                                                                   Cost capitalized
                                                                                                                    subsequent to
                                                                                    Initial Cost to Registrant        acquistion
                                                                          ---------------------------------------------------------
                                                                                                                     Land/Building
                                                                                           Land        Building and       and
Description       Location                        Encumbrances                Land        Estates      Improvements   Improvements
-----------------------------------------------------------------------------------------------------------------------------------
                                             Mortgage    Contract Right
<S>          <C>                      <C>     <C>             <C>             <C>           <C>           <C>              <C>
Retail       Philadelphia, N Broad    PA        279,775         185,187        91,723             0          772,059          108
Retail       Richboro                 PA        275,504         182,360        90,321             0          760,258          108
Retail       Wayne                    PA        403,645         267,179       131,965             0        1,113,823          108
Retail       Moncks Corner            SC              0         118,443             0             0          539,472            0
Retail       Chattanooga              TN        977,656         697,193             0       369,150        3,423,619            0
Retail       Paris                    TN        647,013         461,403             0       244,304        2,265,754            0
Retail       Austin                   TX              0               0        47,126             0                0            0
Retail       Baytown                  TX              0               0        17,888             0                0            0
Retail       Bear Creek               TX              0               0        17,859             0                0            0
Retail       Carrolton                TX        348,651         606,251             0       369,067        2,878,867            0
Retail       Dallas                   TX        496,746         457,920             0             0        3,639,198            0
Retail       El Paso                  TX              0               0        18,500             0                0            0
Retail       El Paso                  TX              0               0        14,599             0                0            0
Retail       Fort Worth               TX        742,058         938,187             0       532,340        3,692,269            0
Retail       Garland                  TX      1,057,568         727,651             0       130,505        3,334,967            0
Retail       Granbury                 TX        689,136         474,155             0        85,040        2,173,176            0
Retail       Grand Prairie            TX        991,747         470,902             0       462,315        2,950,860            0
Retail       Grand Prairie            TX              0               0        16,029             0                0            0
Retail       Greenville               TX              0         290,427             0             0        1,431,281            0
Retail       Greenville               TX              0               0             0             0                0        2,012
Retail       Hillsboro                TX        582,172         400,559             0        71,841        1,835,821            0
Retail       Houston                  TX        682,976         629,594             0       639,638        3,705,420            0
Retail       Lubbock                  TX              0         240,876             0             0        1,509,270            0
Retail       Midland                  TX        506,837       1,239,865       480,935             0        3,272,686            0
Retail       Texarkana                TX              0         383,733        89,804             0        1,719,229       20,590
Retail       Bountiful                UT        183,069         470,695             0             0        3,363,558            0
Retail       Sandy                    UT        141,006         355,899             0             0        1,585,726            0
Retail       Herndon                  VA              0               0        17,741             0                0            0
Retail       Staunton                 VA              0         317,474       127,681             0        1,445,996            0
Retail       Bothell                  WA         50,506         185,806             0             0        1,136,801            0
Retail       Edmonds                  WA              0         208,279             0             0        1,305,028            0
Retail       Everett                  WA        770,522         730,920       210,463             0        3,377,702       17,827
Retail       Federal Way              WA        589,576         439,162       210,776             0        2,372,179            0
Retail       Graham                   WA        938,027         445,395             0       437,273        2,790,997            0
Retail       Kent                     WA        437,827       1,071,049       415,452             0        2,827,087            0
Retail       Milton                   WA      1,058,715         502,700             0       493,533        3,150,107            0
Retail       Port Orchard             WA         38,455         141,469             0             0          865,542            0
Retail       Puyallup                 WA              0               0        15,117             0                0            0
Retail       Redmond                  WA      1,052,283         499,646             0       490,535        3,130,967            0
Retail       Spokane                  WA        808,057         383,682             0       376,686        2,404,286            0
Retail       Spokane                  WA        113,584         417,859       355,128             0        2,556,552            0
Retail       Woodinville              WA        121,550         306,791             0             0        1,366,924            0

<CAPTION>
                         As of December 31, 2004
--------------------------------------------------------------------------------------------------

                 Land         Building and                    Accumulated       Date
    Land        Estates       Improvements        Total       Depreciation    Acquired     Life
--------------------------------------------------------------------------------------------------
<S>               <C>           <C>               <C>            <C>          <C>        <C>
     91,831             0          772,059          863,890        202,462    1/1/2002   20-40 yrs
     90,429             0          760,258          850,687        199,368    1/1/2002   20-40 yrs
    132,073             0        1,113,823        1,245,896        292,085    1/1/2002   20-40 yrs
          0             0          539,472          539,472        133,519    1/1/2002   38-40 yrs
          0       369,150        3,423,619        3,792,769      1,457,994    1/1/2002   27-40 yrs
          0       244,304        2,265,754        2,510,058        964,902    1/1/2002   27-40 yrs
     47,126             0                0           47,126              0    1/1/2002
     17,888             0                0           17,888              0    1/1/2002
     17,859             0                0           17,859              0    1/1/2002
          0       369,067        2,878,867        3,247,934      1,154,074    1/1/2002   25-40 yrs
          0             0        3,639,198        3,639,198      1,337,070    1/1/2002   38-40 yrs
     18,500             0                0           18,500              0    1/1/2002
     14,599             0                0           14,599              0    1/1/2002
          0       532,340        3,692,269        4,224,609      1,836,571    1/1/2002   27-40 yrs
          0       130,505        3,334,967        3,465,472        842,382    1/1/2002   29-40 yrs
          0        85,040        2,173,176        2,258,216        548,924    1/1/2002   29-40 yrs
          0       462,315        2,950,860        3,413,175      1,448,277    1/1/2002   27-40 yrs
     16,029             0                0           16,029              0    1/1/2002
          0             0        1,431,281        1,431,281      1,055,356    1/1/2002      40 yrs
      2,012             0                0            2,012              0    5/1/2003
          0        71,841        1,835,821        1,907,662        463,713    1/1/2002   29-40 yrs
          0       639,638        3,705,420        4,345,058      1,871,355    1/1/2002   27-40 yrs
          0             0        1,509,270        1,509,270        649,028    1/1/2002      40 yrs
    480,935             0        3,272,686        3,753,621        721,514    1/1/2002   38-40 yrs
    110,394             0        1,719,229        1,829,623        339,153    1/1/2002   38-40 yrs
          0             0        3,363,558        3,363,558      1,572,905    1/1/2002      40 yrs
          0             0        1,585,726        1,585,726        405,980    1/1/2002   38-40 yrs
     17,741             0                0           17,741              0    1/1/2002
    127,681             0        1,445,996        1,573,677        357,881    1/1/2002   38-40 yrs
          0             0        1,136,801        1,136,801        552,817    1/1/2002      40 yrs
          0             0        1,305,028        1,305,028        561,200    1/1/2002      40 yrs
    228,290             0        3,377,702        3,605,992      1,106,547    1/1/2002   38-40 yrs
    210,776             0        2,372,179        2,582,955        677,610    1/1/2002   38-40 yrs
          0       437,273        2,790,997        3,228,270      1,369,819    1/1/2002   27-40 yrs
    415,452             0        2,827,087        3,242,539        623,275    1/1/2002   38-40 yrs
          0       493,533        3,150,107        3,643,640      1,546,069    1/1/2002   27-40 yrs
          0             0          865,542          865,542        420,906    1/1/2002      40 yrs
     15,117             0                0           15,117              0    1/1/2002
          0       490,535        3,130,967        3,621,502      1,536,676    1/1/2002   27-40 yrs
          0       376,686        2,404,286        2,780,972      1,180,022    1/1/2002   27-40 yrs
    355,128             0        2,556,552        2,911,680      1,243,229    1/1/2002      40 yrs
          0             0        1,366,924        1,366,924        349,962    1/1/2002   38-40 yrs
</TABLE>

<PAGE>

                         THE NEWKIRK LIMITED PARTNERSHIP
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                              At December 31, 2004

<TABLE>
<CAPTION>
                                                                                                                   Cost capitalized
                                                                                                                    subsequent to
                                                                                    Initial Cost to Registrant        acquistion
                                                                          ---------------------------------------------------------
                                                                                                                     Land/Building
                                                                                           Land        Building and       and
Description       Location                        Encumbrances                Land        Estates      Improvements   Improvements
-----------------------------------------------------------------------------------------------------------------------------------
                                             Mortgage    Contract Right
<S>          <C>                      <C>   <C>             <C>            <C>           <C>             <C>            <C>
Retail       Cheyenne                 WY              0         219,756        50,959             0          984,564       20,590
Retail       Evanston                 WY              0         408,458        99,826             0        1,187,469            0
Retail       Evanston - Cons          WY              0         795,305       194,371             0        2,662,995            0

                                           ----------------------------------------------------------------------------------------
                                             58,193,603      68,569,747    15,698,738    12,154,681      322,167,146      963,107
                                           ----------------------------------------------------------------------------------------

Other        Jonesboro                AZ              0               0        17,184             0                0            0
Other        Sun City                 AZ              0               0        53,755             0        1,698,893       20,833
Other        Colton                   CA              0       7,210,793     1,974,116             0       20,756,195            0
Other        El Segundo               CA     73,247,246               0             0     3,801,120      100,873,472    1,428,379
Other        Irvine                   CA              0               0             0             0                0    1,000,000
Other        Long Beach               CA     17,729,816       2,997,042             0     6,375,556       30,034,817            0
Other        Palo Alto                CA      9,108,505       3,466,140             0             0       26,957,521            0
Other        Ft Collins               CO              0               0        62,458             0        1,973,910       20,833
Other        Orlando                  FL        857,579       1,533,623             0             0        9,128,285            0
Other        North Berwick            ME      7,764,829       3,219,973       274,873             0       22,304,939            0
Other        Carlsbad                 NM              0               0        49,505             0        1,565,013       20,833
Other        Saugerties               NY              0               0        32,120             0          676,932            0
Other        N Myrtle Beach           SC              0         267,219             0             0        1,577,826            0
Other        Franklin                 TN      2,920,574               0             0             0        8,805,302            0
Other        Memphis                  TN      3,833,418       2,332,005             0             0       19,233,942            0
Other        Corpus Christi           TX              0               0        60,757             0        1,923,062       20,833
Other        El Paso                  TX              0               0        40,030             0        1,265,089       20,834
Other        Lewisville               TX              0       1,890,726     1,952,399             0       15,502,972            0
Other        McAllen                  TX              0               0        36,013             0        1,138,486       20,834
Other        Round Rock               TX              0               0        16,164             0                0            0
Other        Victoria                 TX              0               0        59,995             0        1,896,077       20,833
Other        Windsor                  WI      1,153,382       2,681,113             0             0       13,985,024            0

                                           ----------------------------------------------------------------------------------------
                                            116,615,349      25,598,634     4,629,369    10,176,676      281,297,757    2,574,212
                                           ----------------------------------------------------------------------------------------

                                           ----------------------------------------------------------------------------------------
                                            478,585,587     263,072,158    27,250,005    43,997,423    1,502,012,144    4,922,349
                                           ----------------------------------------------------------------------------------------

             NK Remainder                       353,630

                                           ----------------------------------------------------------------------------------------
Total from Continuing Operations            478,939,217     263,072,158    27,250,005    43,997,423    1,502,012,144    4,922,349
                                           ----------------------------------------------------------------------------------------

Discontinued Operations:

                                           ----------------------------------------------------------------------------------------
Office       Bedford                  TX              0       4,361,020             0             0       12,542,065    2,555,275
                                           ----------------------------------------------------------------------------------------

<CAPTION>
                         As of December 31, 2004
--------------------------------------------------------------------------------------------------

                 Land         Building and                    Accumulated       Date
    Land        Estates       Improvements        Total       Depreciation    Acquired     Life
--------------------------------------------------------------------------------------------------
<S>            <C>             <C>              <C>            <C>            <C>        <C>
     71,549             0          984,564        1,056,113        194,225    1/1/2002   38-40 yrs
     99,826             0        1,187,469        1,287,295        417,421    1/1/2002   20-40 yrs
    194,371             0        2,662,995        2,857,366        936,102    1/1/2002   20-40 yrs

--------------------------------------------------------------------------
 16,661,845    12,154,681      322,167,146      350,983,672    120,112,649
--------------------------------------------------------------------------

     17,184             0                0           17,184              0    1/1/2002
     74,588             0        1,698,893        1,773,481        430,875    1/1/2002   38-40 yrs
  1,974,116             0       20,756,195       22,730,311     10,637,425    1/1/2002   20-40 yrs
  1,428,379     3,801,120      100,873,472      106,102,971     38,876,344    1/1/2002   26-40 yrs
  1,000,000             0                0        1,000,000              0    1/1/2003
          0     6,375,556       30,034,817       36,410,373     14,378,909    1/1/2002   27-40 yrs
          0             0       26,957,521       26,957,521      9,674,984    1/1/2002      40 yrs
     83,291             0        1,973,910        2,057,201        500,624    1/1/2002   38-40 yrs
          0             0        9,128,285        9,128,285      3,808,502    1/1/2002   38-40 yrs
    274,873             0       22,304,939       22,579,812     10,205,906    1/1/2002   38-40 yrs
     70,338             0        1,565,013        1,635,351        396,920    1/1/2002   38-40 yrs
     32,120             0          676,932          709,052         52,955    1/1/2003   15-40 yrs
          0             0        1,577,826        1,577,826        420,658    1/1/2002   38-40 yrs
          0             0        8,805,302        8,805,302      2,879,776    1/1/2002   38-40 yrs
          0             0       19,233,942       19,233,942      8,864,690    1/1/2002   30-40 yrs
     81,590             0        1,923,062        2,004,652        487,728    1/1/2002   38-40 yrs
     60,864             0        1,265,089        1,325,953        320,853    1/1/2002   38-40 yrs
  1,952,399             0       15,502,972       17,455,371      6,322,154    1/1/2002   38-40 yrs
     56,847             0        1,138,486        1,195,333        288,744    1/1/2002   38-40 yrs
     16,164             0                0           16,164              0    1/1/2002
     80,828             0        1,896,077        1,976,905        480,884    1/1/2002   38-40 yrs
          0             0       13,985,024       13,985,024      5,452,591    1/1/2002   38-40 yrs

--------------------------------------------------------------------------
  7,203,581    10,176,676      281,297,757      298,678,014    114,481,522
--------------------------------------------------------------------------

--------------------------------------------------------------------------
 32,172,354    43,997,423    1,502,012,144    1,578,181,921    545,384,919
--------------------------------------------------------------------------



--------------------------------------------------------------------------
 32,172,354    43,997,423    1,502,012,144    1,578,181,921    545,384,919
--------------------------------------------------------------------------



--------------------------------------------------------------------------
  2,555,275             0       12,542,065       15,097,340      4,876,493    1/1/2002   38-40 yrs
--------------------------------------------------------------------------
</TABLE>

<PAGE>

                         THE NEWKIRK LIMITED PARTNERSHIP
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                              At December 31, 2004

<TABLE>
<CAPTION>
                                                                                                                   Cost capitalized
                                                                                                                    subsequent to
                                                                                    Initial Cost to Registrant        acquistion
                                                                          ---------------------------------------------------------
                                                                                                                     Land/Building
                                                                                           Land        Building and       and
Description       Location                        Encumbrances                Land        Estates      Improvements   Improvements
-----------------------------------------------------------------------------------------------------------------------------------
                                             Mortgage    Contract Right
<S>          <C>                      <C>  <C>             <C>            <C>           <C>           <C>              <C>
Retail       Mesa, McKellips          AZ              0          34,376        12,986             0           92,722            0
Retail       Atascadero               CA              0          62,758        23,708             0          169,278            0
Retail       Beaumont                 CA              0          59,585        24,197             0          160,719            0
Retail       Paso Robles              CA              0          64,344        24,308             0          173,557            0
Retail       Farmington               NM              0          30,850        11,655             0           83,212            0
Retail       Las Vegas, Bonan         NV              0          48,479        18,315             0          130,761            0
Retail       Dallas, Jefferson        TX              0          45,129        17,050             0          121,728            0
Retail       El Paso, Alameda         TX              0          40,017        15,118             0          107,939            0
Retail       El Paso, Dyer            TX              0          35,257        13,320             0           95,100            0
Retail       Lubbock, 82nd            TX              0          42,485        16,050             0          114,594            0
Retail       Rockdale                 TX         36,425         126,802       134,651             0        1,049,237            0
Retail       Taylor                   TX         62,070         169,683       181,808             0        1,266,242            0
Retail       Woodville                TX         34,949         121,662       129,192             0        1,006,705            0

                                           ----------------------------------------------------------------------------------------
                                                133,444         881,427       622,358             0        4,571,794            0
                                           ----------------------------------------------------------------------------------------

Other        Flagstaff                AZ              0               0        63,079             0        1,993,639       20,834
Other        New Kingston             PA      5,466,250       3,967,524             0             0       14,879,873            0

                                           ----------------------------------------------------------------------------------------
                                              5,466,250       3,967,524        63,079             0       16,873,512       20,834
                                           ----------------------------------------------------------------------------------------

                                           ----------------------------------------------------------------------------------------
Total from Discontinued Operations            5,599,694       9,209,971       685,437             0       33,987,371    2,576,109
                                           ----------------------------------------------------------------------------------------

                                           ----------------------------------------------------------------------------------------
TOTALS                                     $484,538,911    $272,282,129   $27,935,442   $43,997,423   $1,535,999,515   $7,498,458
                                           ========================================================================================

<CAPTION>
                         As of December 31, 2004
--------------------------------------------------------------------------------------------------

                 Land         Building and                    Accumulated       Date
    Land        Estates       Improvements        Total       Depreciation    Acquired     Life
--------------------------------------------------------------------------------------------------
<S>           <C>             <C>              <C>            <C>            <C>        <C>
     12,986             0           92,722          105,708          2,711    4/1/2003   35-40 yrs
     23,708             0          169,278          192,986          4,950    4/1/2003   35-40 yrs
     24,197             0          160,719          184,916          4,700    1/1/2002   20-40 yrs
     24,308             0          173,557          197,865          5,075    4/1/2003   35-40 yrs
     11,655             0           83,212           94,867          2,433    4/1/2003   35-40 yrs
     18,315             0          130,761          149,076          3,823    4/1/2003   35-40 yrs
     17,050             0          121,728          138,778          3,559    4/1/2003   35-40 yrs
     15,118             0          107,939          123,057          3,157    4/1/2003   35-40 yrs
     13,320             0           95,100          108,420          2,781    4/1/2003   35-40 yrs
     16,050             0          114,594          130,644          3,350    4/1/2003   35-40 yrs
    134,651             0        1,049,237        1,183,888        339,306    1/1/2002      40 yrs
    181,808             0        1,266,242        1,448,050        630,614    1/1/2002   38-40 yrs
    129,192             0        1,006,705        1,135,897        325,223    1/1/2002      40 yrs

--------------------------------------------------------------------------
    622,358             0        4,571,794        5,194,152      1,331,682
--------------------------------------------------------------------------

     83,913             0        1,993,639        2,077,552        457,324    4/1/2003   35-40 yrs
          0             0       14,879,873       14,879,873      3,047,428    1/1/2002   38-40 yrs

--------------------------------------------------------------------------
     83,913             0       16,873,512       16,957,425      3,504,752
--------------------------------------------------------------------------

--------------------------------------------------------------------------
  3,261,546             0       33,987,371       37,248,917      9,712,927
--------------------------------------------------------------------------

--------------------------------------------------------------------------
$35,433,900   $43,997,423   $1,535,999,515   $1,615,430,838   $555,097,846
==========================================================================
</TABLE>

The aggregate cost for federal income tax purposes was approximately
$1,500,000,000.

<PAGE>

NEWKIRK MASTER LIMITED PARTNERSHIP

SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(amounts in thousands)

The following is a reconciliation of real estate assets and accumulated
depreciation:

<TABLE>
<CAPTION>
                                                         Year ended    Year ended    Year ended
                                                         December 31,  December 31,  December 31,
                                                            2004          2003          2002
                                                         -----------   -----------   ------------
<S>                                                      <C>           <C>            <C>
Real Estate
    Balance at beginning of year                         $1,655,430    $1,716,568     $       --
    Assets contributed in the exchange                           --            --      1,890,357
    Additions during the year:
       Land & land estates                                    2,557         5,611          2,904
       Buildings & improvements                               4,538        45,077             --
                                                         ----------    ----------     ----------
                                                          1,662,525     1,767,256      1,893,261

    Less: Reclassification to discontinued operations
       and disposition of assets                             84,343       111,826        176,693
                                                         ----------    ----------     ----------
    Balance at end of year                               $1,578,182    $1,655,430     $1,716,568
                                                         ==========    ==========     ==========

Accumulated Depreciation
    Balance at beginning of year                         $  526,193    $  512,678     $       --
    Accumulated depreciation contributed in
       the exchange                                              --            --        542,619
    Additions charged to operating expenses                  39,231        42,983         37,172
                                                         ----------    ----------     ----------
                                                            565,424       555,661        579,791

    Less: Reclassification to discontinued operations
       and disposition of assets                             20,039        29,468         67,113
                                                         ----------    ----------     ----------
    Balance at end of year                               $  545,385    $  526,193     $  512,678
                                                         ==========    ==========     ==========
</TABLE>

<PAGE>

                                  Exhibit Index

Exhibit No.                         Description
-----------                         -----------

31.1              Certificates of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

31.2              Certificates of Chief Financial Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

32.1              Chief Executive Officer's Certificate, pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

32.2              Chief Financial Officer's Certificate, pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.