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Summary of Investments

The  following is a table which sets forth all real estate  related  investments
presently  made or  committed  to be made by the  Account as of the date of this
prospectus.

Real Property Investments
                                    Long-Term
                      Cash payments made                  Indebtedness
                      or to be made (a)             Amount        Rate
Shopping Centers
Northridge Mall
Milwaukee, Wis. (b)........   $5,838,000              none          N/A

Southridge Mall
Greendale/Greenfield
Milwaukee, Wis. (b)........    6,170,000        $2,072,700        8.35%

Office Building
1225 Connecticut Avenue
Washington, D.C. (b)........   9,000,000         1,143,100        6.98%
-----------------------------------------------------------------------

                             $21,008,000        $3,215,800


Mortgage Loan and Land Sale-Leaseback Investments
                                                Cash payments made
                                                 or to be made (a)
Shopping Centers
Monmouth Mall
Eatontown, New Jersey (b)......................    $11,154,000


(a) Includes cash down  payments,  amounts  funded or committed to be funded for
mortgage loans,  prepayment  premiums,  special reserves and other cash payments
made or expected to be made out of the Account's net assets but does not include
acquisition  and mortgage  placement  fees,  mortgage  financing  fees and other
acquisition,  placement or financing  costs.  (b) The interest of the Account in
this  investment  is owned by the Account  through a joint  venture.  The amount
shown for the property  under "Cash  payments made or to be made"  includes only
the cash  investment of the Account in the joint venture for this investment and
does not reflect any  investment by any other joint  ventures in the  investment
owned by the joint venture.  For real property  investments in which the Account
has an equity  interest,  the amount shown for the  investment  under  Long-Term
Indebtedness reflects the Account's  proportionate share, based upon its percent
interest in the joint venture,  of the amount of financing  which is encumbering
the property held by the joint venture.

The Account's investments in Northridge Mall and Southridge Mall and in the land
sale-leaseback  investment and first leasehold mortgage loan secured by Monmouth
Mall have been made through two joint venture  partnerships,  the other partners
of which include institutional  investors.  The percent interest of each partner
in these two joint  ventures  is  determined  generally  based on the timing and
amount of capital contributed by all partners.

The Account made a capital  contribution of approximately  $12,008,000 in return
for an approximate 5.92 percent interest in N/S Associates, which owns interests
in Northridge Mall and Southridge Mall, and made an initial capital contribution
of $10,000,000 in return for an  approximate  6.97 percent  interest in Monmouth
Associates,  which owns the  underlying  land  subject to a ground lease of, and
holds a first  leasehold  mortgage on,  Monmouth Mall. JMB Group Trust IV, which
had been  advised by an  affiliate  of the  Investment  Adviser but is currently
advised by an unaffiliated  third party,  owns the majority  percent interest in
each of N/S Associates and Monmouth Associates.

In May 1994,  Monmouth  Associates agreed to finance the cost of a renovation of
Monmouth  Mall. The maximum  amount of the  renovation  loan is $29,100,000  and
through  December 31, 1997,  Monmouth  Associates had funded  $25,905,000 of the
renovation  loan for Monmouth Mall.  Fundings of principal on the loan have been
made from cash reserves held by Monmouth Associates, cash flow from interest and
ground rent payments received from the borrower/lessee and capital contributions
made to Monmouth  Associates by its partners pro rata base upon their respective
interests. The aggregate amount of capital contributions to finance the loan, is
approximately $9,830,000.  The Account's share of these capital contributions is
approximately  $685,000.  The aggregate amount of the renovation loan, including
accrued and deferred interest of approximately $1,300,000, is currently expected
to be no greater than $29,100,000.  Remaining fundings for the renovation loan
are expected  to be made  from  cash  flow  and  funds  currently  held by
Monmouth Associates.  Monmouth Associates may also be required to make certain
additional loans to pay a portion  of the costs of  certain  tenant
improvements  or other ordinary  capital  expenditures.  In addition,  Monmouth
Associates may provide additional financing to the borrower/lessee in order to
pay costs to be incurred in  connection  with the  replacement  of a department
store tenant at Monmouth Mall.

The renovation is nearing  completion with tenant improvement work and retainage
work remaining.  The occupancy of mall shops and outparcel space at the shopping
center as of December 31, 1997 was approximately 85 percent.  However,  the mall
shops and outparcel space are approximately 90 percent leased.

In general, joint venture partnership agreements for N/S Associates and Monmouth
Associates  provide that decisions  concerning the joint ventures and their real
estate  investments  are to be made by the vote or approval of the joint venture
partner  or  partners  holding  a  majority  of  the  percent  interests  in the
respective joint ventures.

Under the respective joint venture partnership agreements, in the event that one
or more,  but less than all, of the joint venture  partners  propose to sell the
joint  venture's  entire interest in a real estate related  investment  during a
specified  period  commencing  generally  not earlier than the end of the fourth
year after the funding of the investment and ending 10 years after such funding,
each other joint venture  partner not  approving  such sale will have a right of
first offer to purchase  such  investment  on the terms set forth in a notice of
the proposed  sale from the joint venture  partners  desiring such sale. If more
than one joint venture  partner elects to exercise a right of first offer,  each
of the  joint  venture  partners  making  such  election  will have the right to
purchase an interest in such investment based upon the proportion of its percent
interest in the respective joint venture to the aggregate  percent  interests of
all joint venture  partners  making such election.  If no Joint venture  partner
elects  to  exercise  the  right of first  offer,  the  joint  venture  partners
approving  the sale may  effect  such  sale on behalf  of the  respective  joint
venture  for a sales  price of not less than 90  percent of the  proposed  sales
price and on other terms at least as favorable to the  respective  joint venture
as those set forth in the notice of proposed sale.

In general,  each joint venture  partner may sell its interest in the respective
joint  venture  subject to each other  joint  venture  partner's  right of first
refusal to purchase the interest,  and any such sale may not be made without the
consent  of all  other  joint  venture  partners  unless  it is to be made to an
affiliate  of the  selling  joint  venture  partner or to certain  institutional
investors,  a "Fortune 500" corporation or an affiliate thereof, or to an entity
of similar  financial  standing or  sophistication  of the  foregoing  or of the
selling joint venture partner.

Northridge Mall
Milwaukee, Wisconsin

Northridge  Mall,  located in Milwaukee,  Wisconsin,  was completed in 1972. The
mall shops and four adjacent  department  stores  comprising the shopping center
contain approximately 1,013,000 square feet of gross leasable area, of which N/S
Associates owns approximately  394,000 square feet. The remaining 619,000 square
feet of gross  leasable area are occupied by four  department  stores,  three of
which own their own stores and a portion of the parking area.  These four stores
are  Younkers,   which  leases  its  store  from  an  unaffiliated  third  party
(approximately  165,000 square feet), J.C. Penney (approximately  153,000 square
feet), Sears (approximately 148,000 square feet) and Boston Store (approximately
153,000 square feet). Existing operating covenants for occupancy of their stores
by Younkers  extend through  January 1999 and by Boston Store through 2000. J.C.
Penney and Sears, whose operating  covenants expired in August 1992, continue to
operate their respective stores at the shopping center.

The shopping  center is located on an  approximate  105-acre  site, of which N/S
Associates owns  approximately  32 acres, at the northwest  corner of West Brown
Deer Road and North 76th  Street on the north side of  Milwaukee.  The  shopping
center is a two-level center of masonry construction and contains a large center
court  atrium with a fountain  and  skylights.  The entire  parking lot contains
parking for approximately 7,800 automobiles.

Real estate taxes on the portion of the shopping  center owned by N/S Associates
were  approximately  $1,875,000  for the 1997 tax year and are  estimated  to be
approximately  $1,800,000  for the 1998 tax year. By contesting  the real estate
taxes,  the  manager of the  property  was able to achieve a  reduction  in real
estate taxes for 1996. In 1997,  real estate taxes  decreased as a result of the
removal of the public school funding from the property tax bill.

The shopping  center is subject to competition  from other retail  properties in
the  vicinity.  In the  opinion of the  Investment  Adviser,  the portion of the
shopping center owned by N/S Associates is adequately insured.

The  portion  of the  shopping  center  owned  by  N/S  Associates  consists  of
approximately  388,000  square  feet of mall  space and  11,000  square  feet of
storage space.  The mall space is currently  approximately 75 percent leased and
occupied by 90 tenants.  Tenant  leases for mall space have minimum  terms,  not
including renewal options, ranging from one to twenty years, with current annual
base rents ranging from  approximately  $11 to $199 per square foot. The current
average annual base rent for mall space is approximately $18.96 per square foot.
The average  annual  occupancy  rates  (based upon  occupancy at the end of each
month during the year) and approximate average annual base rents per square foot
for the mall space for the past five years are as follows:

                                    Average Annual
             Average Annual               Base Rent
Year         Occupancy Rate         Per Square Foot
1993                    87%                  $22.30
1994                    80%                  $22.65
1995                    90%                  $22.78
1996                    80%                  $19.86
1997                    72%                  $18.96

Substantially  all of the  leases  contain  provisions  pursuant  to  which  N/S
Associates is entitled to  participate  in tenant gross  receipts  above certain
minimum  amounts,  and most leases  entitle N/S  Associates to receive  tenants'
contributions for operating expenses and real estate taxes.  Certain of the more
recent leases provide for N/S Associates' participation in tenant gross receipts
above certain minimum amounts without receipt by N/S Associates of any specified
annual base rent or tenant  contributions for operating  expenses or real estate
taxes.

N/S Associates  acquired its interest in the shopping center in April 1988 for a
purchase price of approximately  $89,653,000 paid in cash at closing, subject to
the  existing  mortgage  loans  with a then  outstanding  aggregate  balance  of
approximately  $18,454,000.  At closing, N/S Associates established a reserve of
approximately  $8.9  million  that  has  been  used to pay for  certain  capital
improvements  made at the shopping center,  including  certain asbestos removal,
construction of a food court and center and side court improvements.

It is expected that additional  asbestos removal will be undertaken from time to
time. For 1998 N/S Associates has currently budgeted  approximately $401,000 for
tenant  improvements  and  asbestos  abatement  for  certain  tenant  spaces  at
Northridge  Mall. Such amount is expected to be paid out of the cash flow of the
property.

In February  1995,  N/S  Associates  repaid the two  mortgage  loans  secured by
Northridge Mall, as well as the mortgage loan secured by Southridge Mall, out of
the proceeds of a new loan in the principal  amount of $35,000,000  secured by a
mortgage on Southridge  Mall. In addition,  approximately  $2,900,000 of the net
proceeds  from  the new  mortgage  loan  was  used to pay  tenant  improvements,
asbestos   abatement  and  other  capital  costs  incurred  for  Northridge  and
Southridge Malls during 1995.

The portion of the shopping  center owned by N/S  Associates is being managed by
an affiliate of the Investment  Adviser under an agreement  pursuant to which it
is obligated to manage the property and collect all receipts from  operations of
the  property.  The  affiliate of the  Investment  Adviser is paid an annual fee
equal to 3.75 percent of the gross  receipts of the property plus  reimbursement
of certain direct expenses in connection with the management of the property.

Northridge Mall has been adversely affected by a perception that it is an unsafe
place to shop.  This  perception  has resulted in declining  sales and occupancy
over the past several  years.  Occupancy  has also been  affected by  continuing
tenant  bankruptcies.  To counter the negative  image for  Northridge  Mall, N/S
Associates made certain capital improvements  including parking lot lighting and
improved interior lighting, and implemented  operational programs to improve the
shopping center's safety and appearance, as well as instituted certain marketing
efforts to enhance its image. In addition,  N/S Associates  continues to seek to
increase  occupancy by aggressively  marketing space for new and renewal tenants
through leasing  incentives,  as well as cooperating  with existing  tenants who
need short-term  rent reductions in order to maintain  occupancy of their space.
Certain positive sales trends appear to indicate a modest improvement,  however,
elimination of the negative perception is expected to take some time.

The following is a schedule of expiration of leases  (exclusive of storage space
and assuming no renewals or cancellations) as of Dec. 31 1997:

Year of         Number   Annual
Expiration         of    Square
of Leases      Tenants     Feet
-------------------------------
1998..........      34   90,172
1999..........      24   55,034
2000..........      10   13,110
2001..........      12   20,239
2002..........      11   16,607
2003..........       5   17,780
2004..........       5   14,335
2005..........       4   13,754
2006..........       6   16,629
2007..........       2    6,759
2008..........       5   21,763
-------------------------------

Southridge Mall
Greendale/Greenfield (Milwaukee),
Wisconsin

Southridge  Mall,  completed in 1970, is located in the Village of Greendale and
City of  Greenfield  south of  Milwaukee,  Wisconsin.  The mall  shops  and five
adjacent department stores comprising the shopping center contain  approximately
1,250,000  square feet of gross  leasable  area,  of which N/S  Associates  owns
approximately  430,000  square  feet,  including  the  space  leased  to  Kohl's
Department Store, one of the anchor tenants, and approximately 2,000 square feet
of storage  space.  The  remaining  approximately  820,000  square feet of gross
leasable area are occupied by four department  stores,  three of which own their
own stores and a portion of the parking  area.  These four stores are  Younkers,
which leases its store from an unaffiliated third party  (approximately  210,000
square  feet),   Boston  Store   (approximately   219,000  square  feet),  Sears
(approximately  215,000  square  feet) and J.C.  Penney  (approximately  176,000
square  feet).  Existing  operating  covenants  for occupancy of their stores by
Younkers  extend  through  January 1999 and by Boston Store through  2000.  J.C.
Penney and Sears,  whose operating  covenants have expired,  continue to operate
their respective stores at Southridge Mall.

The shopping center is located on an  approximately  105-acre site, of which N/S
Associates  owns  approximately  34 acres,  at the  intersection  of West Grange
Avenue and South 76th Street in Milwaukee  County.  It is a two-level  center of
masonry  construction  and  contains a large center court atrium with a fountain
and skylights.  The entire parking lot contains parking for approximately  7,223
automobiles.

Real estate taxes on the portion of the shopping  center owned by N/S Associates
were  approximately  $3,502,000  for the 1997 tax year and are  estimated  to be
approximately  $3,511,000  for the 1998 tax year. By contesting  the real estate
taxes,  the  manager of the  property  was able to achieve a  reduction  in real
estate taxes for 1996.

The shopping  center is subject to competition  from other retail  properties in
the  vicinity.  In the  opinion of the  Investment  Adviser,  the portion of the
shopping center owned by N/S Associates is adequately insured.

The portion of the  shopping  center  owned by N/S is  approximately  97 percent
leased  and  occupied  by 99  tenants.  During  the  third  quarter  of 1995 N/S
Associates  and Kohl's  entered into an amendment of its lease.  Pursuant to the
lease  amendment the term of Kohl's lease had been extended from 2001 until 2015
and the tenant space had been increased by  approximately  19,000 square feet to
approximately 85,000 square feet, exclusive of storage space. Kohl's is required
to pay annual base rent of $9.25 per square foot, as well as one-half of its pro
rata share for real estate taxes and a fixed amount for common area  maintenance
expense.  Kohl's is also obligated to pay as additional rent a percentage of its
gross  receipts  in  excess  of a  minimum  amount  of  annual  sales  which was
determined after the tenant occupied the entire leased space. N/S Associates was
responsible for paying the costs of asbestos removal for the tenant space, which
is complete as of December  31,  1997.  Kohl's was  obligated to pay other costs
associated  with the  leased  space,  including  tenant  improvements  and lease
buy-out and relocation costs of other tenants. The lease amendment also contains
an  operating  covenant  pursuant to which  Kohl's is  obligated  to operate its
retail store at Southridge Mall until 2005, subject to earlier termination under
certain circumstances. Although the lease amendment reduces Kohl's overall rent,
the  expansion  of its space and the  extension of its lease term is expected to
stabilize the shopping center on a long-term basis by ensuring Kohl's  continued
occupancy and therefore its continued  contribution to customer  traffic.  Other
tenant leases  (exclusive of storage  space) have minimum  terms,  not including
renewal  options,  ranging from 3 to 15 years,  with  current  annual base rents
ranging  from  approximately  $11 to $225 per square foot.  The current  average
annual base rent for mall space is approximately $20.87 per square foot.

The average  annual  occupancy  rates  (based upon  occupancy at the end of each
month during the year) and approximate average annual base rents per square foot
for tenant space (inclusive of Kohl's  Department Store but exclusive of storage
space) for the past five years are as follows:

           Average Annual             Base Rent
Year       Occupancy Rate       Per Square Foot
1993                  90%                $21.20
1994                  91%                $20.90
1995                  95%                $20.40
1996                  90%                $23.79
1997                  95%                $20.87

Substantially  all of the  leases  contain  provisions  pursuant  to  which  N/S
Associates is entitled to  participate  in tenant gross  receipts  above certain
minimum amounts and to receive tenants' contributions for operating expenses and
real estate taxes.  N/S Associates  acquired its interest in the shopping center
in April 1988 for a purchase price of approximately  $96,865,000 paid in cash at
closing,  subject to the existing  first  mortgage loan with a then  outstanding
balance of approximately  $18,536,000.  N/S Associates  established a reserve of
approximately $7,250,000 which has been used for certain capital improvements at
the shopping center including, among other things, asbestos abatement and center
and side court  improvements.  For 1998, N/S  Associates has currently  budgeted
approximately $1,309,000 for tenant improvements, asbestos abatement and capital
improvements  at Southridge  Mall. Such amount is expected to be paid out of the
cash flow from the property.

In February 1995, N/S Associates  repaid the mortgage loan secured by Southridge
Mall, as well as the two mortgage  loans secured by Northridge  Mall, out of the
proceeds  of a new loan in the  principal  amount of  $35,000,000  secured  by a
mortgage on  Southridge  Mall.  In  addition,  approximately  $2,900,000  of net
proceeds from the new mortgage loan were used to pay for tenant improvements and
other  capital costs  incurred for  Northridge  and  Southridge  Malls.  The new
mortgage  loan has a term of seven  years,  bears  interest at 8.35  percent per
annum and requires monthly  payments of interest only aggregating  approximately
$2,923,000  per annum  prior to  maturity  in  February  2002,  when the  entire
principal  amount and any accrued and unpaid  interest  will be due and payable.
The new mortgage loan permits only a prepayment in full,  subject to the payment
of a premium of the greater of 1 percent of the outstanding principal balance of
the loan and an  amount  calculated  pursuant  to a  defined  yield  maintenance
formula.  The remedies under the new mortgage loan are generally  limited to the
property securing the loan.

The portion of the shopping  center owned by N/S  Associates is being managed by
an affiliate of the Investment  Adviser under an agreement  pursuant to which it
is obligated to manage the property and collect all receipts from  operations of
the  property.  The affiliate of the  Investment  Adviser is paid a fee equal to
3.75 percent of the gross receipts of the property plus reimbursement of certain
direct expenses in connection with the management of the property.

The  following  is a  schedule  of  expiration  of leases  (inclusive  of Kohl's
Department  Store but  exclusive  of storage  space and  assuming no renewals or
cancellations) as of Dec. 31 1997:

Year of        Number
Expiration         of    Square
of Leases     Tenants      Feet
-------------------------------
1998..........     24    66,192
1999..........      7    19,570
2000..........     20    42,859
2001..........     23    50,787
2002..........     10    17,690
2003..........      9    32,651
2004..........      8    27,154
2005..........      9    21,072
2006..........      9    25,367
2007..........      5    13,374
2008..........      7    21,245
2009..........      1     7,507
2015..........      1    85,247
-------------------------------

Monmouth Mall
Eatontown, New Jersey

In October 1988 Monmouth Associates (i) acquired certain land underlying a super
regional  shopping center in Eatontown,  New Jersey known as Monmouth Mall, (ii)
leased the land to the owner of the  shopping  center  pursuant  to a  long-term
ground lease,  and (iii) made a first mortgage loan to the owner of the shopping
center  secured  by the  leasehold  estate  and the  improvements  thereon.  The
borrower  under the first  leasehold  mortgage  loan and lessee under the ground
lease  (hereinafter the  "borrower/lessee")  is a partnership whose partners are
not affiliated with Monmouth Associates or any of its joint venture partners.

The shopping  center is being  reconfigured  in connection  with the  renovation
discussed  below.  Upon completion of the  renovation,  the shopping center will
contain  approximately  1,503,000  square feet of gross  leasable area, of which
approximately  614,000  square  feet will  consist of mall shops  (approximately
470,000  square  feet),  a fifteen  screen cinema  (approximately  77,000 square
feet),  outparcel buildings  (approximately  17,000 square feet) and storage and
basement area  (approximately  50,000 square feet). The remaining gross leasable
area includes four department stores,  which are Macy's  (approximately  262,000
square  feet),  J.C.  Penney   (approximately   203,000  square  feet),  Stern's
(approximately  265,000  square feet) and Lord & Taylor  (approximately  159,000
square feet).  Existing operating  covenants of the anchor department stores for
reimbursement  of a specified  amount of common area  maintenance  expenses  and
operation of a retail  business at their stores (which may be different from the
current retail business),  generally extend to 1998 for Stern's, 2005 for Macy's
and Lord & Taylor,  and 2006 for J.C.  Penney,  with  certain  option or renewal
rights thereafter in favor of Abraham & Straus and Lord & Taylor.

Federated Department Stores completed its merger with Macy's. Macy's covenant to
operate a  department  store  (in  addition  its  covenant  to  operate a retail
business)  expired  in  1995.  Preliminary   discussions  with  Macy's  continue
regarding a possible extension of their operating covenant,  but there can be no
assurance any such  extension will be finalized.  The Macy's store  continues to
operate at Monmouth Mall.

The shopping center is located on an approximately  104-acre site located at the
intersection  of Routes 35 and 36 and  Wyckoff  Road in  Eatontown,  New Jersey.
Macy's owns its own  department  store and  approximately  2 acres of underlying
land,  and  J.C.  Penney  owns  its own  store  and  approximately  12  acres of
underlying  land. The remaining  approximately  90 acres of land  underlying the
shopping  center were  acquired by Monmouth  Associates  subject to the right of
Stern's to acquire  the land  underlying  its store.  Stern's,  which  currently
leases its store and the  approximately  14 acres of underlying land for nominal
base rent, has the right to acquire the  underlying  land at any time after 1998
and to  acquire  its store at any time  after  2028,  in each  case for  nominal
consideration.  The  shopping  center is a  multi-level  super  regional  center
constructed of structural  steel framing with concrete block facing.  The entire
parking  lot (a portion of which is owned by certain of the  department  stores)
contains combined surface and deck parking for approximately 8,225 automobiles.

The Lord & Taylor lease provides for annual base rent of  approximately  $60,000
and an initial term of 16 years ending in 2006 with six 10-year  renewal options
at the  same  annual  base  rent.  Each  of Lord &  Taylor  and  Stern's  pays a
percentage of its gross receipts above a certain minimum amount as well as a pro
rata share of the real estate taxes as additional  rent. Sony Theaters  operates
the cinema under a lease that commenced in 1994 and provides for an initial term
of 21 years  with a current  annual  base rent of  approximately  $711,000  with
specified  periodic  increases.  The lease  also  requires  the  tenant to pay a
specified amount of operating expense reimbursements and a pro rata share of the
real estate taxes, as well as a percentage of its gross receipts above a certain
minimum  amount as  additional  rent.  The lease also  provides  for five 5-year
renewal options with specified increases in annual base rent. In addition to its
own department  store,  Macy's also leases  approximately  36,400 square feet of
space from the borrower/lessee for its children's store at the shopping center.

Real  estate  taxes  on  the  portion  of  the  shopping  center  owned  by  the
borrower/lessee  were  approximately  $2,356,000  for the  1997 tax year and are
budgeted to be  approximately  $2,426,000  for the 1998 tax year.  The  shopping
center is  subject to  competition  from other  retail  properties  in the area,
including an approximately  1,300,000 square foot shopping center that opened in
the general  vicinity in August 1990. In the opinion of the Investment  Adviser,
the portion of the shopping  center owned by the  borrower/lessee  is adequately
insured.

The mall shops and  outparcel  space at the  shopping  center are  currently  90
percent  leased by 155  tenants  with  current  annual base rents  ranging  from
approximately  $2 to $225 per square foot and a current average annual base rent
of  approximately  $23.64 per square foot.  Leases for mall shops and  outparcel
space have minimum terms, not including  renewal  options,  ranging from 5 to 15
years. Due to the renovation of the shopping center discussed below, the current
occupancy of the mall shops and outparcel space is approximately 85 percent. The
average  annual  occupancy  rates (based upon occupancy at the end of each month
during the year) and  approximate  average annual base rents per square foot for
the mall shops and outparcel space for the past five years are as follows:

                            Average Annual
           Average Annual        Base Rent
Year       Occupancy Rate  Per Square Foot
1993                  81%           $19.95
1994                  67%           $21.40
1995                  69%           $24.76
1996                  75%           $24.90
1997                  85%           $23.64

Substantially all of the leases contain provisions pursuant to which tenants are
required to pay  specified  percentages  of their gross  receipts  above certain
minimum  amounts  as  additional  rent and to pay  their  pro rata  share of the
operating expenses and real estate taxes of the shopping center.

The Limited owns a number of apparel store tenants who have the following leases
of mall space at Monmouth Mall:

                                                      Current
                                         Square        Annual          Original
    Tenant                                 Feet     Base Rent            Term
-------------------------------------------------------------------------------
The Limited                               8,470      $199,045          12 years
The Limited Too                           3,952        92,872          12 years
Lerner New York                           7,045       140,900          12 years
Express/Bath & Body Works                10,957       128,745          12 years
Structure                                 5,849       137,451          12 years
Victoria's Secret                         6,908       162,338          12 years
Lane Bryant                               4,137        60,000          13 years
Mozzarellas Cafe                          5,051       114,425          15 years
--------------------------------------------------------------------------------

In October 1988, Monmouth  Associates (i) purchased  approximately 88.5 acres of
land  underlying the shopping center (subject to the right of Stern's to acquire
the  approximately  14 acres underlying its store) for $13,000,000 paid in cash;
(ii) leased the land back to the borrower/lessee  pursuant to a long-term ground
lease;  and  (iii)  made a  first  mortgage  loan  in the  principal  amount  of
$128,920,000  to the  borrower/lessee  secured by the  leasehold  estate and the
improvements  thereon. The ground lease, which has a term of 75 years commencing
in October 1988  (subject to earlier  termination  in the event of a sale of the
land as described below),  provides for monthly base rent aggregating $1,170,000
annually with minimum  payments of $650,000.  The ground lease also provides for
contingent rent (payable  quarterly out of the excess,  if any, of substantially
all of the gross receipts from the operations of the shopping center received by
the  borrower/lessee  over  certain  base  amounts)  equal  to the  sum of (x) a
specified  annual  amount  (commencing  in the fourth lease year at $390,000 per
annum and  increasing in the sixth lease year to $520,000 per annum),  increased
until  paid at the  "applicable  rate"  of  interest  payable  under  the  first
leasehold  mortgage  loan  described  below (such mount as so  increased  herein
called the "rent shortfall amount"),  plus (y) 15 percent of the balance of such
excess gross receipts  remaining  after  deducting the aggregate  amount paid at
such time of the rent shortfall  amount under the ground lease and the "interest
shortfall amount" under the first leasehold mortgage loan as described below.

The first leasehold  mortgage loan has a term of 15 years to October 2003, which
may be extended from time to time at the option of Monmouth Associates for up to
an additional 20 years,  subject to  acceleration  of the loan in the event of a
joint sale of the property or a purchase by either  Monmouth  Associates  or the
borrower/lessee of the other party's entire interest in the property.

The first leasehold mortgage loan provides for monthly payments of base interest
at a base rate of 5.98  percent  per annum  for the first two loan  years,  7.97
percent  per annum for the third loan year and 5 percent per annum for each loan
year thereafter.  The first leasehold  mortgage loan also provides for quarterly
payments  of  contingent  interest  (payable  out  of the  excess,  if  any,  of
substantially  all of the gross  receipts  from the  operations  of the shopping
center received by the  borrower/lessee  over certain base amounts) equal to the
sum of (x) the difference  between the amount of interest payable on the loan at
the  "applicable  rate"  and that  payable  at the base  rate  described  above,
increased until paid at the applicable rate (such amount as so increased  herein
called the "interest shortfall  amount"),  plus (y) 45 percent of the balance of
such excess gross receipts  remaining after deducting the aggregate  amount paid
at such  time of the rent  shortfall  amount  under  the  ground  lease  and the
interest   shortfall  amount  under  the  first  leasehold  mortgage  loan.  The
"applicable  rate"  under the loan is 5.98  percent  per annum for the first two
loan  years,  7.97  percent  per annum for the next  three  loan  years and 8.97
percent per annum for each loan year thereafter.

In May 1994,  Monmouth  Associates agreed to finance the cost of a renovation of
Monmouth Mall. The maximum amount of the renovation  loan is $29,100,000  and as
of December  31, 1997  fundings of  $25,905,000  have been made.  Certain of the
fundings  for the  renovation  loan have been made out of cash  reserves and the
cash  flow  of  Monmouth  Associates  as  well  as  out  of  additional  capital
contributions  to Monmouth  Associates  made pro rata based upon the  respective
interests of its joint venture partners.  The Account's share of such additional
capital contributions would be approximately $727,000 based upon its approximate
6.97  percent  interest  in  Monmouth  Associates  of  which  $685,000  had been
contributed  as of December  31, 1997.  The  renovation  of the shopping  center
included,  among other  things,  the addition of a food court and cinema and the
re-merchandising of approximately 300,000 square feet of space was substantially
completed in 1995.

The  renovation  loan will  mature  contemporaneously  with the first  leasehold
mortgage  loan in  October  2003,  subject to (i)  acceleration  in the event of
default or certain  other  events,  including a joint sale of the entire fee and
leasehold  interests in Monmouth Mall, or (ii) extension of the loan maturity by
Monmouth  Associates under certain  circumstances for up to 20 years on the same
loan terms prior to the extension (other than the maturity date). The renovation
loan is secured by a leasehold mortgage  subordinated to the leasehold mortgages
securing  the first  leasehold  mortgage  loan and certain  other loans made for
tenant   improvements   or   other   ordinary   capital   expenditures   and  is
cross-defaulted with those loans as well as the ground lease. The remedies under
the  renovation  loan  are  generally  limited  to  the  property  securing  the
obligation.  Payment of principal and accrued interest of the renovation loan is
subordinated  to the  payment  of certain  other  amounts  payable  to  Monmouth
Associates in connection with the ground lease and the first leasehold  mortgage
loan.

Under  the  terms  of the  ground  lease,  as  amended  in  connection  with the
renovation  loan,  upon a  joint  sale  or  refinancing  of  the  land  and  the
improvements thereon,  Monmouth Associates generally will be entitled to receive
out of the proceeds of such sale or  refinancing  the sum of (a) any accrued and
unpaid rent shortfall amount plus $13,000,000 (and any other amounts invested in
the land),  plus (b) after  payment of principal and any accrued and unpaid base
interest on the first  leasehold  mortgage  loan and the  renovation  loan,  the
return to the  borrower/lessee  of payments  made to cover any cost  overruns in
connection with the renovation,  and payment of any outstanding additional loans
by Monmouth  Associates and any advances by the  borrower/lessee to pay the cost
of certain capital or tenant  improvements  described  below,  together with any
accrued and unpaid  interest  thereon,  17.5 percent of such  remaining  sale or
refinancing  proceeds until Monmouth  Associates has received aggregate payments
under the ground  lease  equal to an  internal  rate of return of 11 percent per
annum on its investment in the land,  plus (c)  thereafter,  12.5 percent of any
such remaining sale or refinancing  proceeds. In general, the remedies under the
ground lease are limited to the property securing such obligation.

Under the terms of the first  leasehold  mortgage loan, as amended in connection
with the renovation  loan,  upon a joint sale or refinancing of the land and the
improvements thereon, Monmouth Associates will be entitled to receive out of the
proceeds of such sale or  refinancing,  after  deducting  the accrued and unpaid
rent shortfall  amount plus  $13,000,000  (and any other amounts invested in the
land) payable to Monmouth  Associates pursuant to the terms of the ground lease,
the sum of (a)(i) any accrued and unpaid  interest  shortfall  amount,  (ii) the
outstanding  principal  amount of the  first  leasehold  mortgage  loan plus any
accrued and unpaid base  interest  thereon,  and (iii)  after  repayment  of the
outstanding  principal amount of the renovation loan, and any accrued and unpaid
interest thereon,  the return to the  borrower/lessee  of payments made to cover
any cost  overruns in  connection  with the  renovation,  and  repayment  of any
additional loans by Monmouth  Associates and any advances by the borrower/lessee
to pay the cost of  certain  capital  or tenant  improvements  described  below,
together  with any accrued and unpaid  interest  thereon,  52.5  percent of such
remaining  sale or refinancing  proceeds until Monmouth  Associates has received
aggregate  payments under the first leasehold mortgage loan equal to an internal
rate of return of 11  percent  per annum on the  principal  amount of such loan,
plus (b)  thereafter,  37.5 percent of any such  remaining  sale or  refinancing
proceeds.  In the event that the loan continues  until its stated  maturity date
(as it may be extended  from time to time)  without a joint sale of the property
or a sale of Monmouth  Associates'  entire  interest in the  property,  Monmouth
Associates  will be entitled to receive an amount that would provide it the same
consideration  payable to it as the first leasehold  mortgage lender (but not as
the ground lessor) under a joint sale of the property described above,  assuming
that the  property  were sold for its  appraised  fair market  value.  Aggregate
interest  payable may not exceed a specified  simple interest rate per annum. In
general, except for a prepayment in connection with a joint sale of the property
or a sale to the borrower/lessee of Monmouth  Associates' entire interest in the
property as described below, no prepayment of the first leasehold  mortgage loan
may be made. In general,  the remedies under the first  leasehold  mortgage loan
are limited to the property  securing such obligation.  The  borrower/lessee  is
obligated,  at its own expense,  to remove any asbestos  from the portion of the
shopping center owned by the borrower/lessee under certain circumstances.

Monmouth  Associates also is required to make other  additional loans to finance
the  cost of 60  percent  of  tenant  improvements  or  other  ordinary  capital
expenditures  that exceed the amounts reserved by the  borrower/lessee  for such
expenditures,  provided  that the  borrower/lessee  advances  the  remaining  40
percent of such expenditures.  The interest payable on any such additional loans
(as well as on any advances made by the borrower/lessee) is to be at the greater
of the applicable rate under the first leasehold mortgage loan as in effect from
time to time or the market rate of interest charged by institutional lenders for
similar loans.  These  additional  loans generally  require payments of interest
only  until  maturity  of the  first  leasehold  mortgage  loan  (including  any
extension thereof described above), at which time the outstanding  principal and
any  accrued  and unpaid  interest  under the  additional  loans will be due and
payable.  The  additional  loans  may be  prepaid  prior to  maturity  without a
prepayment charge. Pursuant to such requirements, Monmouth Associates has loaned
the  borrower/lessee an aggregate of approximately  $3,085,000 at fixed interest
rates ranging from 8.25 percent to 10.5 percent per annum in connection with the
cost of tenant improvements and ordinary capital expenditures,  including tenant
lease expenditures and termination  payments. In connection with the termination
of a previous  department  store  lease,  Monmouth  Associates  has  advanced an
additional  $1,250,000  as an  expansion/renovation  loan,  which  together with
accrued  interest  through October 1991, bears interest at 13 percent per annum,
and has permitted the borrower/lessee to defer payment of approximately $729,000
of base  interest,  which also  bears  interest  at 13 percent  per annum on the
deferred amount. These loan amounts have been advanced out of interest and lease
payments received under the first leasehold mortgage loan and ground lease along
with the reserves of Monmouth Associates.

The  mortgage  loan  and  renovation  loan,  as well as the  ground  lease,  all
discussed above,  accrue interest at a higher rate than the actual cash payments
of interest.  In April 1992 Monmouth  Associates put these loans on non-accrual,
based on the uncertainty as to the  collectibility of such contingent  interest.
During 1995,  accrued interest,  from the periods prior to April 1992,  totaling
$3,576,000 was written off due to the uncertainty as to  collectibility of these
accrued amounts.

Under the terms of the ground  lease,  at any time after  October 2001  Monmouth
Associates has the right, and at any time after October 2002 the borrower/lessee
has the right, to cause a joint sale of the land and the portion of the shopping
center owned by the  borrower/lessee,  subject to the right of first  refusal of
the other  party to the ground  lease to  acquire  the  entire  interest  in the
property of the party  proposing  such joint  sale.  In the event that the first
leasehold  mortgage loan continues until its stated maturity date (including any
extension of such maturity date described above),  the  borrower/lessee  has the
option to purchase Monmouth  Associates' interest in both the land and the first
leasehold  mortgage  loan for an aggregate  amount that would  provide  Monmouth
Associates  the same  consideration  payable  to it as ground  lessor  and first
leasehold  mortgage lender under a joint sale of the property  described  above,
assuming that the property were sold for its appraised fair market value.

In general, except for certain transfers by Monmouth Associates to an affiliate,
each of Monmouth Associates and the borrower/lessee may only transfer its entire
respective  interest  in the  property  (including  its  interest  in the  first
leasehold  mortgage  loan),  subject to the  consent of the other  party and the
other  party's  right of first  refusal to acquire  such  interest.  In general,
neither Monmouth  Associates nor the  borrower/lessee  may transfer a portion of
its interest in the property.

The portion of the shopping center owned by the borrower/lessee is being managed
by an affiliate of the  borrower/lessee  under a long-term agreement pursuant to
which it is  obligated  to manage the  property  and collect all  receipts  from
operations  of the  property  for a fee  equal  to 3.5  percent  of the base and
percentage  rents from the  property.  In  addition,  the manager is entitled to
compensation for leasing and re-leasing services at the shopping center.

1225 Connecticut Avenue
Washington, D.C.

In May  1990  the  Account  acquired  an  interest  in a newly  formed  Delaware
corporation  (the  Corporation)  owned  jointly with certain other  persons,  as
described  below.  The Corporation  has acquired an office  building  located in
Washington,  D.C. known as 1225 Connecticut Avenue, N.W. (1225 Connecticut),  an
eight-story reinforced concrete frame building containing 183,530 square feet of
rentable office space, 18,438 square feet of rentable retail space, 6,416 square
feet of below grade storage space and 100,024 square feet of subsurface  parking
space for over 300  automobiles.  The building,  which was completed in 1968, is
located on an  approximately  33,000  square foot site that  fronts  Connecticut
Avenue, 18th Street and "N" Street, N.W.

The office and retail space of 1225  Connecticut is currently 100 percent leased
and 95  percent  occupied  under  leases  having  original  minimum  terms  (not
including  renewal  options)  which vary in duration from 5-1/2 to 12 years with
current  annual  base  rents  ranging  from  approximately  $17.50 to $48.90 per
rentable  square foot.  The current  average annual base rent for the office and
retail  space is  approximately  $33.69 per square  foot.  The storage  space is
currently 100 percent leased and occupied under leases having  original  minimum
terms (not including  renewal  options) that vary in duration from 5 to 12 years
with the current annual base rents ranging from  approximately  $11.05 to $15.00
per square foot.  The current  average annual base rent for the storage space is
approximately  $11.30 per square foot. The average annual occupancy rates (based
upon occupancy at the end of each month during the year) and approximate average
annual base rents per square  foot for the office and retail  space for the past
five years are as follows:

                               Average Annual
           Average Annual           Base Rent
Year       Occupancy Rate     Per Square Foot
1993                  95%              $28.60
1994                  96%              $32.60
1995                 100%              $30.29
1996                 100%              $33.69
1997                  98%              $35.34

Substantially all of the office and retail leases contain provisions, subject to
certain limitations,  requiring tenants to pay, in addition to their annual base
rent,  their  pro-rata  share of real estate taxes and  operating  expenses over
certain base amounts. In addition,  leases covering a majority of the office and
retail space contain  provisions,  subject to certain  limitations,  pursuant to
which rents may be increased based upon changes in a consumer price index from a
base year.

Ernst & Young  currently  leases  approximately  87 percent of the office space.
Effective  January 1, 1995 per the terms of the Third Amendment to the Ernst and
Young lease,  the lease term of the fourth floor  premises  consisting of 26,328
square feet was amended to expire on June 30, 2007.  In addition,  the amendment
modified the monthly  base rent to $33.82 per average  square foot for the total
leased  premises of 159,664  square feet.  Effective  August 1, 1995,  Ernst and
Young  entered  into a Fourth  Amendment  to occupy  2,023 square feet of retail
space to expire June 30, 2007.  Effective March 16, 1998 Ernst and Young entered
into a Fifth Amendment to occupy an additional  9,909 square feet of space. As a
result, the Ernst & Young leases generally are as follows:

                               Current
                                Annual
                     Square       Base  Expiration
Tenant                 Feet       Rent         Date
Ernst & Young:
  Ground Floor        1,676     $17.50    June 2007
  2nd,4th,5th,6th,7th,
     & 8th floors   177,242      34.00    June 2007
  Retail Space        2,023      24.00    June 2007


In connection  with the  extension  and  expansion of its leases,  Ernst & Young
received certain leasing  incentives,  including a tenant improvement  allowance
and a rent  credit  for its fourth  floor  space for a portion of the lease term
commencing in 1995.  The primary lease for Ernst & Young covers  177,242  square
feet of space, not including the ground floor and retail space.

The real estate and vault taxes on 1225 Connecticut were approximately  $859,000
for the tax year  ended  September  30,  1997.  Such  taxes are  expected  to be
approximately  $848,000  for  the  tax  year  ended  September  30,  1998.  1225
Connecticut is subject to competition from several other commercial  projects in
its vicinity,  including a number of office  buildings  owned by entities either
sponsored or advised by an affiliate of the Investment  Adviser.  In the opinion
of the Investment Adviser, the building is adequately insured.

The Corporation has elected to qualify as a real estate  investment trust (REIT)
pursuant to sections  856 through 860 of the Internal  Revenue Code of 1986,  as
amended (the Code).  For each taxable year that the  Corporation  qualifies as a
REIT, the Corporation in general will not be subject to federal corporate income
tax or the District of Columbia  corporate  franchise tax on its regular taxable
income and will not be taxable on  long-term  capital  gain income to the extent
its income is  distributed  as  dividends.  If the  Corporation  were to fail to
qualify as a REIT, it would be taxed at rates  applicable to corporations on its
taxable income, whether or not distributed. Because it is a corporation, it will
not be subject to the  District  of  Columbia  franchise  tax on  unincorporated
businesses,  which is  imposed  on any trade or  business  conducted  within the
District by an unincorporated person, including a partnership.

The Account owns  approximately 16.3 percent of the outstanding shares of common
stock of the Corporation.  Approximately 44 percent of the outstanding shares of
common stock of the Corporation are owned by a publicly held real estate limited
partnership  affiliated with the Investment Adviser.  There is no other class of
stock of the  Corporation  authorized  or  outstanding,  and no other  shares of
common stock may be issued without the consent of  shareholders  owning at least
96 percent of the then  outstanding  shares of common stock of the  Corporation.
The major  shareholders  of the  Corporation  (including the Account)  owning in
excess of 99 percent of the Corporation's  outstanding stock have entered into a
shareholders' agreement which provides, among other things, that upon a proposed
sale of shares the non-selling  major  shareholders  shall have a right of first
refusal to buy out the selling major  shareholders'  shares in the  Corporation;
the  approval  of  shareholders  owning at least 96 percent  of the  outstanding
common stock of the  Corporation  is required to make certain  major  decisions;
and,  in  the  event  of a  disagreement  regarding  a  proposed  sale  of  1225
Connecticut,  the major  shareholders not desiring to sell would have a right of
first  refusal  to  purchase  the  other  major  shareholders'   shares  in  the
Corporation and if all of such shares are not acquired  pursuant to the exercise
of such  right of first  refusal,  the  Corporation  may  conclude a sale of the
property.

The Corporation  purchased 1225 Connecticut from the seller for a purchase price
of  approximately  $54,125,000,  consisting  of  $51,425,000  paid in  cash  and
approximately $2,700,000 of mortgage indebtedness then encumbering the property.
In  connection  with the  acquisition  of the  property,  the  Corporation  paid
approximately $2,130,000 for real estate brokerage commissions to an independent
third party and certain closing costs.  The Account  contributed  $9,000,000 for
its interest in the Corporation.

In January  1994 the  Corporation  refinanced  its mortgage  loan,  which had an
outstanding  principal  balance  of  approximately  $1,667,000  at the  time  of
refinancing,  with  a new  first  mortgage  loan  in  the  principal  amount  of
$7,000,000 that bears interest at 6.98 percent per annum.  The new loan requires
monthly payments of interest only aggregating  $488,600 per annum until maturity
in February  2001 when the entire  outstanding  principal  amount  together with
accrued  interest  will be due and payable.  Under  certain  circumstances,  the
principal amount of the loan may be prepaid in whole (but not in part),  subject
to a prepayment premium based upon the present value of the difference,  if any,
between  the  remaining  scheduled  monthly  payments on the loan at the date of
prepayment and the amount such monthly payments would be if the interest rate on
the loan were equal to the yield on a U.S. government security with a comparable
maturity  date.  Pursuant to the deed of trust  securing the mortgage  loan, the
Corporation is prohibited  from modifying  Ernst & Young's primary lease or from
entering into certain other tenant leases without the lender's consent. Prior to
selling the property or encumbering  the property with any additional  debt, the
Corporation  must  obtain the consent of the  lender,  which may be  arbitrarily
withheld.  However,  subject  to certain  restrictions,  the  Corporation  has a
one-time right to transfer title to the property  together with an assumption of
the mortgage loan. The excess net proceeds from the refinancing in the amount of
approximately $5,300,000 were used to pay a substantial portion of the costs for
lobby and other common area  renovation  costs,  a sprinkler  system and certain
tenant improvement costs related to the Ernst & Young lease extension.

The property is being managed  under an agreement  pursuant to which the manager
is  obligated  to manage  1225  Connecticut,  collect all of the  receipts  from
operations  and,  to the extent  available  from such  receipts,  pay all of the
expenses of the property.  The manager is paid a fee equal to 2.5 percent of the
gross revenues of the property,  plus  reimbursement for certain direct expenses
of the manager.  The property had been  managed by JMB  Properties  Company,  an
affiliate of the Investment  Adviser,  until December 1994,  when JMB Properties
Company sold substantially all of its assets to an unaffiliated third party, and
certain  management  personnel  of  JMB  Properties  Company  became  management
personnel  of the  third  party.  As a result  of  sale,  the  successor  to JMB
Properties  Company's assets now acts as manager of 1225 Connecticut on the same
terms that existed prior to the sale.

1225 Connecticut leases approximately 87% of the available space of the property
to one  tenant  under  leases,  all with  terms of 12 years.  For the year ended
December 31, 1997 such tenant represented approximately 74% of total revenues.

An  unaffiliated  third party  leases and  operates  the entire  parking  garage
(subject to certain  parking rights  provided for tenants of the property) for a
term extending  until November 2000. The lease provides for a fixed rent payment
of $577,560 a year provides that the lessee shall pay the operating  expenses of
the parking garage and does not provide such lessee with an option to extend the
term of the lease.

The  following is a schedule of expiration of leases for office and retail space
assuming no renewals or cancellations)as of December 31, 1997:

Year of
Expiration      Number of       Square
of Leases         Tenants         Feet
--------------------------------------
1998..........          2        5,666
2000..........          2       17,384
2001..........          1        3,026
2005..........          1        5,263
2007..........          9      188,929
--------------------------------------


For a description of all types of fees and  compensation  payable by the Account
to IDS Life or the  Investment  Adviser in connection  with the  acquisition  or
placement  of real estate  related  investments  on behalf of the  Account,  see
Compensation  of IDS  Life,  the  Investment  Adviser  and their  Affiliates  in
Connection  with Real  Estate  Related  Services  under the  Description  of the
Investment Adviser and Affiliates section.

For further information  regarding the Account's real estate related investments
and their operations see the  Management's  Discussion and Analysis of Financial
Condition and Results of Operations section.