Carlyle Real Estate Ltd Partnership XIV/IL – ‘10-Q’ for 6/30/02

On:  Tuesday, 8/13/02, at 7:30pm ET   ·   As of:  8/14/02   ·   For:  6/30/02   ·   Accession #:  892626-2-281   ·   File #:  0-15962

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Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                      22     98K 
 2: EX-3.A      Articles of Incorporation/Organization or By-Laws     33    175K 
 3: EX-3.B      Articles of Incorporation/Organization or By-Laws      4     19K 
 4: EX-99       Miscellaneous Exhibit                                  1      5K 

10-Q   —   Quarterly Report
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION          
Washington, D.C.  20549         

FORM 10-Q         

Quarterly Report Under Section 13 or 15(d)          
of the Securities Exchange Act of 1934          

For the quarter ended June 30, 2002   Commission file number 0-15962            

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

Illinois                    36-3256340          
(State of organization)      (IRS Employer Identification No.)      

900 N. Michigan Ave., Chicago, IL           60611                           
(Address of principal executive office)     (Zip Code)                          

Registrant's telephone number, including area code 312/915-1987                 

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 [   ]             

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TABLE OF CONTENTS         

PART I     FINANCIAL INFORMATION                                                

Item 1.    Financial Statements . . . . . . . . . . . . . . .     3             

Item 2.    Management's Discussion and                                          
Analysis of Financial Condition and                       
Results of Operations. . . . . . . . . . . . . . .    15  

PART II    OTHER INFORMATION                                                    

Item 3.    Defaults Upon Senior Securities. . . . . . . . . .    20             

Item 6.    Exhibits and Reports on Form 8-K . . . . . . . . .    21             

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PART I.  FINANCIAL INFORMATION                                                  

ITEM 1.  FINANCIAL STATEMENTS                                         

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV         
(A LIMITED PARTNERSHIP)         

BALANCE SHEETS          

JUNE 30, 2002 AND DECEMBER 31, 2001         

(UNAUDITED)         

ASSETS          
------          

                               JUNE 30,       DECEMBER 31,
                            2002            2001
                            ------------     -----------

Current assets:                                                                 
Cash and cash equivalents . . . . .   $ 12,761,168      12,576,851          
Interest and other receivables. . .         18,849          67,160          
                            ------------    ------------
Total current assets. . . . .     12,780,017      12,644,011    
                            ------------    ------------

Other assets. . . . . . . . . . . . .          --            210,375            
                            ------------    ------------
                            $ 12,780,017      12,854,386
                            ============    ============

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CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV         
(A LIMITED PARTNERSHIP)         

BALANCE SHEETS - CONTINUED          

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)         
-----------------------------------------------------         

                               JUNE 30,       DECEMBER 31,
                            2002            2001
                            ------------     -----------

Current liabilities:                                                            
Accounts payable. . . . . . . . . .   $     25,584          92,410          
Current portion of long-term debt .     43,169,456      41,300,490          
                            ------------    ------------
Total current liabilities . .     43,195,040      41,392,900    

Distributions received in excess                                                
of recorded investment, net . . . .          --          1,322,572          
                            ------------    ------------
Commitments and contingencies                                                   

Total liabilities . . . . . .     43,195,040      42,715,472    

Partners' capital accounts                                                      
(deficits):                                                                   
General partners:                                                           
Capital contributions . . . . . .          1,000           1,000        
Cumulative net earnings                                                 
(losses) . . . . . . . . . . . .    (14,769,706)    (14,698,315)      
Cumulative cash distributions . .     (2,117,798)     (2,117,798)       
                            ------------    ------------
                              (16,886,504)    (16,815,113)
                            ------------    ------------
Limited partners:                                                           
Capital contributions,                                                  
net of offering costs. . . . . .    351,746,836     351,746,836       
Cumulative net earnings                                                 
(losses) . . . . . . . . . . . .   (263,799,077)   (263,316,531)      
Cumulative cash distributions . .   (101,476,278)   (101,476,278)       
                            ------------    ------------
                              (13,528,519)    (13,045,973)
                            ------------    ------------
Total partners' capital                                         
accounts (deficits) . . . .    (30,415,023)    (29,861,086) 
                            ------------    ------------
                            $ 12,780,017      12,854,386
                            ============    ============

See accompanying notes to financial statements.         

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                                CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV                            
                                           (A LIMITED PARTNERSHIP)                                       

                                          STATEMENTS OF OPERATIONS                                       

                              THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001                          
                                                 (UNAUDITED)                                             

                                                      THREE MONTHS ENDED            SIX MONTHS ENDED     
                                                            JUNE 30                      JUNE 30         
                                                   -------------------------   ------------------------- 
                                                       2002          2001          2002          2001    
                                                   -----------    ----------    ----------    ---------- 
                                                                                                         
Income:                                                                                                  
  Interest income . . . . . . . . . . . . . . . .  $    55,638       119,843       114,960       237,957 
  Other income. . . . . . . . . . . . . . . . . .        --            --           14,926         --    
                                                   -----------    ----------    ----------    ---------- 
                                                        55,638       119,843       129,886       237,957 
                                                   -----------    ----------    ----------    ---------- 
Expenses:                                                                                                
  Mortgage interest . . . . . . . . . . . . . . .      934,483       934,483     1,868,966     1,868,966 
  Professional services . . . . . . . . . . . . .       96,960       120,834       198,960       240,559 
  General and administrative. . . . . . . . . . .      179,536       223,844       257,004       361,240 
                                                   -----------    ----------    ----------    ---------- 
                                                     1,210,979     1,279,161     2,324,930     2,470,765 
                                                   -----------    ----------    ----------    ---------- 
                                                    (1,155,341)   (1,159,318)   (2,195,044)   (2,232,808)
Partnership's share of the reduction of the                                                              
  maximum unfunded obligation under and                                                                  
  income related to termination of the                                                                   
  indemnification agreement . . . . . . . . . . .        --            --            --        7,144,354 
Partnership's share of operations of                                                                     
  unconsolidated ventures . . . . . . . . . . . .        --          (36,777)        --          (43,191)
                                                   -----------    ----------    ----------    ---------- 
      Earnings (loss) before Partnership's share                                                         
        of gains on sale of investment properties                                                        
        and extraordinary items . . . . . . . . .   (1,155,341)   (1,196,095)   (2,195,044)    4,868,355 
Partnership's share of gains on sale of                                                                  
  indirect partnership interests. . . . . . . . .        --            --        1,641,107       686,076 
                                                   -----------    ----------    ----------    ---------- 
      Earnings (loss) before extra-                                                                      
        ordinary items. . . . . . . . . . . . . .   (1,155,341)   (1,196,095)     (553,937)    5,554,431 

Extraordinary items:                                                                                     
  Partnership's share of extraordinary items                                                             
    from unconsolidated ventures. . . . . . . . .        --        7,628,296         --        7,628,296 
                                                   -----------    ----------    ----------    ---------- 
      Net earnings (loss) . . . . . . . . . . . .  $(1,155,341)    6,432,201      (553,937)   13,182,727 
                                                   ===========    ==========    ==========    ========== 

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                                CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV                            
                                           (A LIMITED PARTNERSHIP)                                       

                                    STATEMENTS OF OPERATIONS - CONTINUED                                 

                                                      THREE MONTHS ENDED            SIX MONTHS ENDED     
                                                            JUNE 30                      JUNE 30         
                                                   -------------------------   ------------------------- 
                                                       2002          2001          2002          2001    
                                                   -----------    ----------    ----------    ---------- 
Net earnings (loss) per limited                                                                          
 partnership interest:                                                                                   
  Earnings (loss) before Partnership's share                                                             
    of gains on sale of investment properties                                                            
    and extraordinary items . . . . . . . . . . .  $    (2.78)         (2.87)        (5.29)        11.68 
  Partnership's share of gains on sale of                                                                
    indirect partnership interests. . . . . . . .        --            --             4.08          1.70 
                                                   -----------    ----------    ----------    ---------- 
      Earnings (loss) per limited partnership                                                            
        interest before extraordinary items . . .        (2.78)        (2.87)        (1.21)        13.38 

Extraordinary items:                                                                                     
  Partnership's share of extraordinary items                                                             
    from unconsolidated ventures. . . . . . . . .        --            18.88         --            18.88 
                                                   -----------    ----------    ----------    ---------- 

      Net earnings (loss) per limited                                                                    
        partnership interest. . . . . . . . . . .  $     (2.78)        16.01         (1.21)        32.26 
                                                   ===========    ==========    ==========    ========== 

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

<fn>                                                                                                     
                               See accompanying notes to financial statements.                           

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CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV         
(A LIMITED PARTNERSHIP)         

STATEMENTS OF CASH FLOWS          

SIX MONTHS ENDED JUNE 30, 2002 AND 2001         
(UNAUDITED)         

                                   2002         2001
                                  -----------   ----------
Cash flows from operating activities:                                           
Net earnings (loss) . . . . . . . . . . .  $  (553,937)  13,182,727         
Items not requiring (providing) cash or                                     
cash equivalents:                                                         
Long-term debt - deferred accrued                                       
interest. . . . . . . . . . . . . . .    1,868,966    1,868,966     
Partnership's share of the reduction                                    
of the maximum unfunded obligation                                  
under and income related to the                                     
termination of the indemnification                                  
agreement . . . . . . . . . . . . . .        --      (7,144,354)    
Partnership's share of operations of                                    
unconsolidated ventures . . . . . . .        --          43,191     
Partnership's share of gains on sale                                    
of indirect partnership interests . .   (1,641,107)    (686,076)    
Extraordinary items . . . . . . . . . .        --      (7,628,296)      
Changes in:                                                                 
Interest and other receivables. . . . .       48,311       11,178       
Other assets. . . . . . . . . . . . . .        2,491        --          
Accounts payable and other current                                      
liabilities . . . . . . . . . . . . .      (66,826)      65,386     
                                  -----------   ----------
Net cash provided by (used in)                              
  operating activities. . . . . .     (342,102)    (287,278)
                                  -----------   ----------
Cash flows from investing activities:                                           
Partnership's distributions from                                            
unconsolidated ventures . . . . . . . .        --       3,779,855       
Cash proceeds from Partnership's share                                      
of gains on sale of indirect                                            
partnership interests . . . . . . . . .      318,535      686,076       
Return of Partnership's advance to                                          
affiliated entity . . . . . . . . . . .      207,884        --          
Partnership's contribution to                                               
unconsolidated venture. . . . . . . . .        --          (7,147)      
                                  -----------   ----------
Net cash provided by (used in)                              
 investing activities. . . . . .      526,419    4,458,784
                                  -----------   ----------
Net increase (decrease) in                                  
 cash and cash equivalents . . .      184,317    4,171,506
Cash and cash equivalents,                                  
 beginning of year . . . . . . .   12,576,851    8,599,183
                                  -----------   ----------
Cash and cash equivalents,                                  
 end of period . . . . . . . . .  $12,761,168   12,770,689
                                  ===========   ==========

Supplemental disclosure of cash flow                                            
information:                                                                  
Recognition of reduction of distribu-                                       
tions received in excess of recorded                                    
investment, net as gain . . . . . . . .  $ 1,322,572        --          
                                  ===========   ==========

See accompanying notes to financial statements.         

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CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV         
(A LIMITED PARTNERSHIP)         

NOTES TO FINANCIAL STATEMENTS         

JUNE 30, 2002 AND 2001          

(UNAUDITED)         

GENERAL                                                                         

Readers of this quarterly report should refer to the Partnership's    
audited financial statements for the year ended December 31, 2001 which are     
included in the Partnership's 2001 Annual Report on Form 10-K filed on          
April 1, 2002 (File No. 0-15962) as certain footnote disclosures which          
would substantially duplicate those contained in such audited financial         
statements have been omitted from this report.  Capitalized terms used but      
not defined in this quarterly report have the same meanings as in the           
Partnership's 2001 Annual Report on Form 10-K.                                  

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

The accompanying financial statements include for the six month period
ended June 30, 2001 operations of $(43,191) as the Partnership's share of       
total property operations of $(55,344) of unconsolidated properties which       
were classified as held for sale or disposition or sold in the past two         
years.                                                                          

Certain amounts in the 2001 financial statements have been            
reclassified to conform with the 2002 presentation.                             

TRANSACTIONS WITH AFFILIATES                                                    

The Partnership, pursuant to the Partnership Agreement, is permitted  
to engage in various transactions involving the Corporate General Partner       
and its affiliates including the reimbursement for salaries and salary-         
related expenses of its employees and certain of its officers, and for          
other direct expenses relating to the administration of the Partnership and     
the operation of the Partnership's investments.  Fees, commissions and          
other expenses required to be paid by the Partnership to the General            
Partners and their affiliates as of June 30, 2002 and for the six months        
ended June 30, 2002 and 2001 were as follows:                                   

                                               Unpaid at
                                                June 30,
                      2002        2001        2002
                        -------     ------     ---------
Reimbursement (at cost) for                                                     
out-of-pocket salary and                                                    
salary-related expenses and                                                 
other costs for the Partner-                                                
ship and its investment                                                     
properties. . . . . . . . . .     $50,649     64,019       21,816           
                       =======     ======       ======

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JMB/NYC                                                                         

JMB/NYC is a limited partnership among Carlyle-XIV Associates, L.P.,  
and its affiliates, Carlyle-XIII Associates, L.P. and Property Partners,        
L.P., as limited partners and Carlyle Managers, Inc. as the sole general        
partner.  The Partnership is a 50% shareholder of Carlyle Managers, Inc.        
The Partnership currently holds, indirectly as a limited partner of             
Carlyle-XIV Associates, L.P., an approximate 50% limited partnership            
interest in JMB/NYC.  The sole general partner of Carlyle-XIV Associates,       
L.P. is Carlyle Investors, Inc., of which the Partnership is a 50%              
shareholder.  The general partner in each of JMB/NYC and Carlyle-XIV            
Associates, L.P. is an affiliate of the Partnership.                            

As a result of the 1996 restructuring, JMB/NYC had an indirect limited
partnership interest which, before taking into account significant              
preferences to other partners, equaled approximately 4.9% of the                
reorganized and restructured ventures owning 237 Park and 1290 Avenue of        
the Americas (the "Properties").  Neither O&Y nor any of its affiliates         
retained any direct or indirect continuing interest in the Properties.  The     
new ownership structure gave control of the Properties to an unaffiliated       
real estate investment trust ("REIT") owned primarily by holders of the         
first mortgage debt that encumbered the Properties prior to the bankruptcy.     

JMB/NYC had, under certain limited circumstances, through January 1, 2001       
rights of consent regarding sale of the Properties or the consummation of       
certain other transactions that would have significantly reduced                
indebtedness of the Properties.  In general, at any time on or after            
January 2, 2001, an affiliate of the REIT had the right to purchase             
JMB/NYC's interest in the Properties for an amount based on a formula           
relating to the operations of the Properties (the "Formula Price").             

The restructuring and reorganization discussed above eliminated any   
potential additional obligation of the Partnership in the future to provide     
additional funds under its previous joint venture agreements (other than        
that related to a certain indemnification agreement provided in connection      
with such restructuring).                                                       

Pursuant to an indemnification agreement, the Affiliated Partners were
jointly and severally obligated to indemnify the REIT to the extent of $25      
million to ensure their compliance with the terms and conditions relating       
to JMB/NYC's indirect limited partnership interests in the restructured and     
reorganized joint ventures that owned the Properties.  The Affiliated           
Partners contributed approximately $7,800,000 (of which the Partnership's       
share was approximately $3,900,000) to JMB/NYC, which was deposited into an     
escrow account as collateral for such indemnification.  These funds were        
invested in stripped U.S. Government obligations with a maturity date of        
February 15, 2001.  Subsequent to that date, the remaining escrowed funds       
were invested in short-term U.S. Government obligations.  Due to the            
Restructuring discussed below, during 1999 the maximum potential obligation     
was reduced to $14,285,000 and a portion of the collateral (approximately       
$4,460,000 in face amount) was released in 1999 to JMB/NYC.  On March 23,       
2001, JMB/NYC's indirect interest in the 1290 Partnership was sold, and as      
a result, the indemnification obligation was terminated and the remaining       
collateral (approximately $5,700,000 face amount of which the Partnership's     
share was approximately $2,900,000) was released in March 2001 to JMB/NYC.      
The Partnership's share of the reduction of the maximum unfunded obligation     
under the indemnification agreement recognized as income is a result of (i)     
interest earned on amounts contributed by the Partnership and held in           
escrow by JMB/NYC, (ii) the Partnership's share of the agreed upon              
reduction of the maximum obligation in November 1999 in connection with the     
Restructuring discussed below, and (iii) the Partnership's share of the         
remaining indemnification obligation that was released in March 2001 in         
connection with the sale of JMB/NYC's indirect interest in the 1290             
Partnership.  Interest income earned reduced the Partnership's share of the     
maximum unfunded obligation under the indemnification agreement, which had      
been reflected as a liability.                                                  

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In November 1999, JMB/NYC closed a transaction (the "Restructuring")  
pursuant to which, among other things, JMB/NYC's interests in 237 Park          
Avenue ("237 Park") and 1290 Avenue of the Americas ("1290 Avenue of the        
Americas") were restructured.  Under the Restructuring, the partnership         
that owns 237 Park was converted to a limited liability company ("237 Park      
LLC").  The membership interest in 237 Park LLC owned by 237/1290 Upper         
Tier Associates, L.P. (the "Upper Tier Partnership"), in which JMB/NYC has      
been a limited partner with a 99% interest, was contributed to a                
partnership (the "237 Partnership") that acquired the other membership          
interests in 237 Park LLC from the REIT and one of its affiliates.  In          
exchange for the interest in 237 Park LLC, the Upper Tier Partnership           
received a limited partnership interest in the 237 Partnership having a         
fair market value (determined in accordance with the partnership agreement      
of the 237 Partnership) of approximately $500,000.  (JMB/NYC's total            
investment in the 237 Partnership (prior to its sale in January 2002) was       
significantly less than 1% of the 237 Partnership.)  The 237 Partnership        
owned a portfolio of investments in addition to 237 Park.  JMB/NYC had the      
right, during the month of July of each calendar year commencing with 2001,     
to cause a sale of the interest in the 237 Partnership for a price equal to     
the greater of the fair market value of such interest (determined in            
accordance with the partnership agreement of the 237 Partnership) and a         
specified amount, of which JMB/NYC's share would be $500,000.  JMB/NYC          
elected not to exercise its right to cause a sale of its interest in the        
237 Partnership during July 2001.  In addition, the general partner of the      
237 Partnership had the right, during the month of January of each calendar     
year commencing with 2002, to purchase the interest in the 237 Partnership      
for a price equal to the greater of the fair market value of such interest      
(determined as described above) and a specified amount, of which JMB/NYC's      
share would be $650,000.  In January 2002, the general partner of the 237       
Partnership exercised its right to acquire JMB/NYC's indirect interest in       
the 237 Partnership, and JMB/NYC received $650,000 in sale proceeds.  Such      
amount was paid to the limited partners of JMB/NYC as holders of a tranche      
of the Purchase Note as discussed below.  The Partnership received its          
share of sale proceeds, approximately $320,000 in March 2002.  Due to the       
January 2002 sale of the Partnership's indirect interest in the 237             
Partnership, which was the Partnership's last investment property               
associated with JMB/NYC, the distributions received in excess of recorded       
investment were reduced to zero and included as part of the gain on sale in     
2002.  The distributions received in excess of recorded investment were         
created by the 1999 retirement of the Partnership's obligations to Carlyle      
Investors, Inc. and Carlyle Managers, Inc.                                      

JMB/NYC's indirect interest through the Upper Tier Partnership in the 
partnership (the "1290 Partnership") that owned 1290 Avenue of the Americas     
was also modified, although the REIT continued to own the controlling           
interest in the property. In general, the REIT had the right to sell 1290       
Avenue of the Americas or engage in certain other transactions during the       
period January 1, 2000 through February 28, 2001, provided that JMB/NYC         
received the greater of (i) an amount based on a formula relating to the        
operations of the property (the "1290 Formula Price") and (ii) $4,500,000.      
No such transaction occurred during that period.  An affiliate of the REIT      
also had the right, during the month of March of each calendar year             
commencing with 2001, to purchase JMB/NYC's indirect interest in the 1290       
Partnership for the greater of (x) the 1290 Formula Price and (y)               
$1,400,000.  On March 2, 2001, JMB/NYC was notified that an affiliate of        
the REIT intended to exercise its right to purchase JMB/NYC's indirect          
interest in the 1290 Partnership and on March 23, 2001, the sale was            
completed and JMB/NYC received approximately $1,400,000 at closing (of          
which the Partnership's share was approximately $686,000).  Such amount was     
paid in May of 2001 to the limited partners of JMB/NYC as holders of a          
tranche of the Purchase Note as discussed below.  In addition, JMB/NYC          
received the remaining collateral (approximately $5,700,000, of which the       
Partnership's share was approximately $2,900,000) held pursuant to the          
indemnification agreement, including interest earned thereon, upon closing      
of the sale of its interest in the 1290 Partnership.  The Partnership           
received its share of the sale proceeds and collateral amount in May 2001.      

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A portion of the purchase price for JMB/NYC's indirect interests in   
the 1290 Avenue of the Americas and 237 Park Avenue office buildings is         
represented by a certain promissory note (the "Purchase Note") bearing          
interest at 12-3/4% per annum.  The Purchase Note was secured by JMB/NYC's      
indirect interests in the 237 Partnership (prior to its sale in January         
2002) and the 1290 Partnership (prior to its sale in March 2001) and is         
non-recourse to JMB/NYC.  The Purchase Note requires payment of principal       
and interest out of distributions made to JMB/NYC from the 1290 Partnership     
and the 237 Partnership and proceeds from sales of JMB/NYC's indirect           
interests in those partnerships.  Unpaid interest accrues and is deferred,      
compounded monthly.  Unpaid principal and interest were due at maturity on      
January 2, 2001.  As expected, JMB/NYC did not have funds to pay the            
Purchase Note at its maturity.  The limited partners of JMB/NYC, as             
creditors, and the holder of the Purchase Note agreed to certain steps if       
the Purchase Note were not repaid within one year of its maturity as            
discussed below.  The outstanding principal and accrued and deferred            
interest on the Purchase Note at June 30, 2002, was approximately               
$180,531,000, including interest at the default rate (as defined) of 12-        
3/4% per annum.                                                                 

In December 1999, the Affiliated Partners advanced a total of         
approximately $425,000 (of which the Partnership advanced approximately         
$210,000) to the limited partners of JMB/NYC, which was used to acquire a       
$5,425,000 tranche of the Purchase Note and the related security agreement      
for the collateralization of such tranche.  As a result of this purchase,       
such limited partners, as creditors of JMB/NYC, were entitled to receive up     
to $5,425,000 in proceeds otherwise payable to JMB/NYC in respect of its        
indirect interests in the 1290 Partnership or the 237 Partnership, which        
were owned through the Upper Tier Partnership.  Such amounts received by        
the limited partners are distributable to the Affiliated Partners in            
proportion to their respective advances made to purchase the tranche (i.e.,     
50% to the Partnership and 50% in the aggregate to the other Affiliated         
Partners).  In connection with their purchase of the $5,425,000 tranche of      
the Purchase Note, the limited partners of JMB/NYC agreed with the holder       
of the Purchase Note that in the event JMB/NYC had not repaid all amounts       
due and owing under the Purchase Note within one year after its maturity on     
January 2, 2001, the holder would take the appropriate steps necessary to       
foreclose upon and obtain JMB/NYC's interest in the Upper Tier Partnership      
in lieu of seeking any other damages.  As a result of the sales of              
JMB/NYC's indirect interests in the 1290 Partnership and the 237                
Partnership, which were the primary assets of the Upper Tier Partnership,       
and the application of JMB/NYC's share of the proceeds from such sales to       
amounts due under the Purchase Note, it is unlikely that the holder will        
seek to foreclose on JMB/NYC's interest in the Upper Tier Partnership.  The     
Partnership received $207,884 in May of 2002 as a return of its December        
1999 advance to the limited partners of JMB/NYC.                                

JMB/PIPER                                                                       

U.S. Bancorp Piper Jaffray Inc. ("PJI"), which occupied 335,684 square
feet or approximately 46% of the building's rentable square feet, vacated       
the majority of its space (approximately 222,000 square feet) and moved to      
a recently completed office tower upon expiration of its lease on May 31,       
2000.  However, PJI extended a portion of its former space (approximately       
114,000 square feet) through May 31, 2002, although the new rental rates,       
while at market rates, were significantly less than rental rates under the      
previous PJI lease.  Additionally, Piper executed new long-term leases          
representing an additional approximately 170,000 square feet.  The property     
manager had been actively pursuing replacement tenants for the balance of       
the vacant space; however, given the extremely competitive nature of the        
downtown Minneapolis market due to a significant amount of new office           
construction, not all of the PJI space had been released quickly enough to      
generate sufficient cash flow to fund the required debt service payments.       
As a result, Piper did not make the required debt service payments under        
the mortgage loan since June 1, 2000, and was in monetary default under         
such loan.  Such default led to the appointment of a receiver and a             
foreclosure sale of the property as described below.                            

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The mortgage loan had an original principal amount of $100,000,000.   
Prior to the default, the lender was essentially entitled to all operating      
cash flow (as defined) in excess of fixed interest and certain other costs.     
Prior to default, no such cash flow was generated.  As of April 2, 2001         
(prior to transfer of title to the property), aggregate amounts due to the      
lender were approximately $109,000,000, including certain default interest.     

On a monthly basis, Piper was required to deposit the property        
management fee into an escrow account to be used (including interest earned     
thereon) for future leasing costs to the extent cash flow was not               
sufficient to cover such items or to be applied to the outstanding loan         
balance in the event of a default.  During July 2000, the escrow balance of     
approximately $5,146,000 was applied to the outstanding principal balance       
of the loan, as a result of the default.  The manager of the property           
(which was an affiliate of the Corporate General Partner through November       
1994) had agreed to defer receipt of its management fee and receive the         
payment thereof out of the amount available from the escrow account, if         
any.  As of July 2000, the manager had deferred approximately $5,395,000        
($1,839,000 of which represented deferred fees due to an affiliate of the       
Corporate General Partner through November 1994) of management fees.            
However, in conjunction with the appointment of the receiver at the             
property and the application of the funds in the escrow account to the          
outstanding loan balance, the obligation to pay the deferred fees was           
released.  As a result, such fees were written off during 2000.                 

JMB/Piper, on behalf of Piper, had been negotiating with the lender to
transfer title to the property through a deed in lieu of foreclosure.           
JMB/Piper and the lender were unable to reach an agreement related to such      
a transaction.  Consequently, and as a result of the monetary default           
discussed above, the lender began legal proceedings to realize upon its         
security in the building.  In consideration for, among other things, Piper      
and all of its constituent partners (collectively, the "Defendants") being      
released under the loan documents upon the expiration of the redemption         
period for foreclosure on the property and for payment of the Defendants'       
expenses, within certain limitations, in connection with the transaction,       
the Defendants executed a stipulation agreement consenting to a foreclosure     
sale of the property, including the fee interest in the land underlying the     
building.  On July 20, 2000, the Court approved the stipulation agreement       
and appointed a receiver on behalf of the lender.  On September 26, 2000, a     
sheriff's sale of the property occurred at which the lender received a          
sheriff's certificate of sale, subject to redemption of the property.  On       
October 2, 2000, the court approved such sale, subject to redemption of the     
property at any time within six months from the date of such sale.  No such     
redemption occurred and title to the property transferred to the lender         
effective April 2, 2001.                                                        

As a result of the transfer of the property to the lender, the        
Partnership realized an extraordinary gain related to its share of the          
forgiveness of indebtedness and the write off of deferred mortgage fees in      
the net amount of approximately $7,600,000 for financial reporting              
purposes.  The Partnership also recognized approximately $20,897,000 of         
gain for Federal income tax purposes in 2001 as a result of the transfer        
with no corresponding distributable proceeds.  The Defendants have no           
future liability for any representations, warranties and covenants as a         
result of the transfer.                                                         

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JMB/900                                                                         

During 1999, JMB/900, through Progress Partners, sold the 900 Third   
Avenue Building to an unaffiliated third party.  As is customary in such        
transactions, Progress Partners agreed to certain representations,              
warranties and covenants with a stipulated survival period, which expired       
on September 15, 2000.  As required by the sale agreement, Progress             
Partners had placed $2,000,000 into an escrow account for possible payment      
to the buyer in the event of a breach of such representations, warranties,      
covenants and for certain other costs.  As a result of a claim made by the      
buyer under the sale contract, in September 2000, Progress Partners             
received only a portion, approximately $1,800,000, of such amount placed in     
escrow, plus interest earned thereon.  Progress Partners was able to settle     
such claim with the buyer and the remaining amount (approximately $200,000)     
held in escrow, including interest earned thereon, was received by Progress     
Partners in the first quarter of 2001.                                          

The Partnership's share of cash remaining at the venture              
(approximately $900,000) was distributed to the Partnership in May 2001.        

WELLS FARGO CENTER                                                              

The mortgage note secured by the property (with a balance, including  
accrued interest, of approximately $185,000,000 at June 30, 2002), as           
extended, bears interest at 10% per annum and matures September, 2003.  All     
excess cash flow is being escrowed for future tenant improvements and           
principal payments.  In addition, upon sale or refinancing of the property      
subsequent to September 1, 1999, the mortgage loan requires payment of          
participation interest (as defined) of any excess proceeds.                     

As modified, the amended and restated promissory note secured by the  
Partnership's interest in the limited liability company, which has an           
adjusted principal balance of approximately $21,988,000, and accrued            
interest of approximately $21,182,000 at June 30, 2002, has a scheduled         
maturity date in September 2003.  The note accrues interest at 17% per          
annum and requires payments of cash flow distributable to the Partnership       
by the limited liability company from either property operations or sales       
proceeds as well as a portion of the property management fee paid to the        
unaffiliated member in the limited liability company.  The loan is              
nonrecourse and secured solely by the Partnership's interest in the limited     
liability company.                                                              

During April 2001, the Partnership received notice of non-monetary    
defaults from the lender under the note.  The Partnership acknowledged          
certain of the defaults described in the notice of defaults.  In December       
2001, the lender assigned all of its rights and interests under the loan to     
an affiliate of the lender.  On December 17, 2001, the Partnership              
acknowledged and consented to the plans of the affiliate of the lender to       
foreclose on the Partnership's interest in the limited liability company on     
or before December 31, 2002 and waived any notice or additional notice of       
foreclosure to which it may have been entitled under the terms and              
conditions of the loan documents or the California Commercial Code.  The        
Partnership also agreed that, upon consummation of the foreclosure sale,        
any and all offsets, defenses and claims against the lender and certain         
other parties shall be waived and released.  In addition, the Partnership       
irrevocably appointed the affiliate of the lender, or any designee of the       
affiliate of the lender, as the sole and exclusive proxy of the Partnership     
to vote and exercise any and all voting and related rights and to take any      
other action that the affiliate of the lender deems necessary to protect        
and preserve its security interest in the Partnership's interest in the         
limited liability company.  The affiliate of the lender agreed that it          
shall not execute any agreement or document or otherwise take any action        
which would impose or result in any personal liability of or recourse to        
the Partnership.  Upon the foreclosure of the Partnership's interest in the     

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limited liability company, the Partnership will have no further right,          
title, or interest in the limited liability company.  The foregoing             
releases, waivers, and irrevocable proxy were given by the Partnership          
solely to facilitate the foreclosure sale and if the foreclosure sale is        
not consummated for any reason on or before December 31, 2002, the same         
shall be deemed void with the same effect as if never given.                    

Due to the restructuring of the Partnership's interest in Wells Fargo 
Center - South Tower in 1996, the Partnership has ceased loss recognition       
relative to its real estate investment and has reversed those previously        
recognized losses that the Partnership is no longer obligated to fund.  The     
Partnership has no future funding obligation for its investment in Wells        
Fargo Center - South Tower.  Accordingly, the Partnership has discontinued      
the application of the equity method of accounting and additional losses        
from the investment in Wells Fargo Center - South Tower will not be             
recognized.                                                                     

UNCONSOLIDATED VENTURES - SUMMARY INFORMATION                                   

Summary income statement information for JMB/Piper, JMB/Piper II and  
JMB/900 for the six months ended June 30, 2001 is as follows:                   

                                    2001
                                     -----------

Total income from properties                                                
(unconsolidated). . . . . . . . . . . . . .      $ 3,894,705            
                                     ===========

Operating profit (loss) of ventures . . . . .      $   (55,344)             
Extraordinary items . . . . . . . . . . . . .       15,247,014              
                                     -----------
Net earnings (loss) . . . . . . . . . . . . .      $15,191,670              
                                     ===========

Partnership's share of income (loss). . . . .      $ 7,592,541              
                                     ===========

ADJUSTMENTS                                                                     

In the opinion of the Corporate General Partner, all adjustments      
(consisting solely of normal recurring adjustments) necessary for a fair        
presentation have been made to the accompanying figures as of June 30, 2002     
and for the three and six months ended June 30, 2002 and 2001.                  

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PART I.  FINANCIAL INFORMATION                                                  

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF                      
 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Reference is made to the notes (the "Notes") to the accompanying      
financial statements for additional information concerning certain of the       
Partnership's investment properties.                                            

At June 30, 2002, the Partnership had cash and cash equivalents of    
approximately $12,761,000.  Such funds were available for working capital       
requirements and potential future distributions to the General Partners and     
Holders of Interests.  As discussed below, JMB/NYC sold its indirect            
interest in the 237 Partnership in January 2002.  The Partnership received      
its share of the proceeds from such sale (approximately $320,000) in March      
2002.  In May 2002, the Partnership received approximately $208,000 as a        
return of its 1999 advance to the limited partners of JMB/NYC.  The Wells       
Fargo Center - South Tower investment property is restricted as to the use      
of excess cash flows by an escrow agreement negotiated pursuant to loan         
modifications.  It is currently expected that the Partnership's interest in     
the Wells Fargo Center - South Tower investment property will be foreclosed     
upon before the end of 2002 as a result of certain defaults under the loan      
secured by such interest.  The Partnership does not consider its remaining      
investment property to be a potential source of future cash generated from      
sales or operations.                                                            

The Partnership has not budgeted any amounts for its share of tenant  
improvements and other capital expenditures as it has no funding                
obligations for its remaining investment property.                              

In November 1999, JMB/NYC closed a transaction (the "Restructuring")  
pursuant to which, among other things, JMB/NYC's interests in 237 Park          
Avenue ("237 Park") and 1290 Avenue of the Americas ("1290 Avenue of the        
Americas") were restructured.  Under the Restructuring, the partnership         
that owns 237 Park was converted to a limited liability company ("237 Park      
LLC").  The membership interest in 237 Park LLC owned by 237/1290 Upper         
Tier Associates, L.P. (the "Upper Tier Partnership"), in which JMB/NYC has      
been a limited partner with a 99% interest, was contributed to a                
partnership (the "237 Partnership") that acquired the other membership          
interests in 237 Park LLC from the REIT and one of its affiliates.  In          
exchange for the interest in 237 Park LLC, the Upper Tier Partnership           
received a limited partnership interest in the 237 Partnership having a         
fair market value (determined in accordance with the partnership agreement      
of the 237 Partnership) of approximately $500,000.  (JMB/NYC's total            
investment in the 237 Partnership (prior to its sale in January 2002) was       
significantly less than 1% of the 237 Partnership.)  The 237 Partnership        
owned a portfolio of investments in addition to 237 Park.  JMB/NYC had the      
right, during the month of July of each calendar year commencing with 2001,     
to cause a sale of the interest in the 237 Partnership for a price equal to     
the greater of the fair market value of such interest (determined in            
accordance with the partnership agreement of the 237 Partnership) and a         
specified amount, of which JMB/NYC's share would be $500,000.  JMB/NYC          
elected not to exercise its right to cause a sale of its interest in the        
237 Partnership during July 2001.  In addition, the general partner of the      
237 Partnership had the right, during the month of January of each calendar     
year commencing with 2002, to purchase the interest in the 237 Partnership      
for a price equal to the greater of the fair market value of such interest      
(determined as described above) and a specified amount, of which JMB/NYC's      
share would be $650,000.  In January 2002, the general partner of the 237       
Partnership exercised its right to acquire JMB/NYC's indirect interest in       
the 237 Partnership, and JMB/NYC received $650,000 in sale proceeds.  Such      
amount was paid to the limited partners of JMB/NYC as holders of a tranche      
of the Purchase Note as discussed below.  The Partnership received its          
share of sale proceeds, approximately $320,000, in March 2002.  Due to the      
January 2002 sale of the Partnership's indirect interest in the 237             
Partnership, which was the Partnership's last investment property               
associated with JMB/NYC, the distributions received in excess of recorded       
investment were reduced to zero and included as part of the gain on sale in     

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2002.  The distributions received in excess of recorded investment were         
created by the 1999 retirement of the Partnership's obligations to Carlyle      
Investors, Inc. and Carlyle Managers, Inc.                                      

JMB/NYC's indirect interest through the Upper Tier Partnership in the 
partnership (the "1290 Partnership") that owned 1290 Avenue of the Americas     
was also modified, although the REIT continued to own the controlling           
interest in the property. In general, the REIT had the right to sell 1290       
Avenue of the Americas or engage in certain other transactions during the       
period January 1, 2000 through February 28, 2001, provided that JMB/NYC         
received the greater of (i) an amount based on a formula relating to the        
operations of the property (the "1290 Formula Price") and (ii) $4,500,000.      
No such transaction occurred during that period.  An affiliate of the REIT      
also had the right, during the month of March of each calendar year             
commencing with 2001, to purchase JMB/NYC's indirect interest in the 1290       
Partnership for the greater of (x) the 1290 Formula Price and (y)               
$1,400,000.  On March 2, 2001, JMB/NYC was notified that an affiliate of        
the REIT intended to exercise its right to purchase JMB/NYC's indirect          
interest in the 1290 Partnership and on March 23, 2001, the sale was            
completed and JMB/NYC received approximately $1,400,000 at closing (of          
which the Partnership's share was approximately $686,000).  Such amount was     
paid in May 2001 to the limited partners of JMB/NYC as holders of a tranche     
of the Purchase Note as discussed below.  In addition, JMB/NYC received the     
remaining collateral (approximately $5,700,000, of which the Partnership's      
share was approximately $2,900,000) held pursuant to the indemnification        
agreement, including interest earned thereon, upon closing of the sale of       
its interest in the 1290 Partnership.  The Partnership received its share       
of the sale proceeds and collateral amount in May 2001.                         

A portion of the purchase price for JMB/NYC's indirect interests in   
the 1290 Avenue of the Americas and 237 Park Avenue office buildings is         
represented by a certain promissory note (the "Purchase Note") bearing          
interest at 12-3/4% per annum.  The Purchase Note was secured by JMB/NYC's      
indirect interests in the 237 Partnership (prior to its sale in January         
2002) and the 1290 Partnership (prior to its sale in March 2001) and is         
non-recourse to JMB/NYC.  The Purchase Note requires payment of principal       
and interest out of distributions made to JMB/NYC from the 1290 Partnership     
and the 237 Partnership and proceeds from sales of JMB/NYC's indirect           
interests in those partnerships.  Unpaid interest accrues and is deferred,      
compounded monthly.  Unpaid principal and interest were due at maturity on      
January 2, 2001.  As expected, JMB/NYC did not have funds to pay the            
Purchase Note at its maturity.  The limited partners of JMB/NYC, as             
creditors, and the holder of the Purchase Note agreed to certain steps if       
the Purchase Note were not repaid within one year of its maturity as            
discussed below.  The outstanding principal and accrued and deferred            
interest on the Purchase Note at June 30, 2002, was approximately               
$180,531,000, including interest at the default rate (as defined) of 12-        
3/4% per annum.                                                                 

In December 1999, the Affiliated Partners advanced a total of         
approximately $425,000 (of which the Partnership advanced approximately         
$210,000) to the limited partners of JMB/NYC, which was used to acquire a       
$5,425,000 tranche of the Purchase Note and the related security agreement      
for the collateralization of such tranche.  As a result of this purchase,       
such limited partners, as creditors of JMB/NYC, were entitled to receive up     
to $5,425,000 in proceeds otherwise payable to JMB/NYC in respect of its        
indirect interests in the 1290 Partnership or the 237 Partnership, which        
were owned through the Upper Tier Partnership.  Such amounts received by        
the limited partners are distributable to the Affiliated Partners in            
proportion to their respective advances made to purchase the tranche (i.e.,     
50% to the Partnership and 50% in the aggregate to the other Affiliated         
Partners).  In connection with their purchase of the $5,425,000 tranche of      
the Purchase Note, the limited partners of JMB/NYC agreed with the holder       
of the Purchase Note that in the event JMB/NYC had not repaid all amounts       
due and owing under the Purchase Note within one year after its maturity on     
January 2, 2001, the holder would take the appropriate steps necessary to       
foreclose upon and obtain JMB/NYC's interest in the Upper Tier Partnership      

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in lieu of seeking any other damages.  As a result of the sales of              
JMB/NYC's indirect interests in the 1290 Partnership and the 237                
Partnership, which were the primary assets of the Upper Tier Partnership,       
and the application of JMB/NYC's share of the proceeds from such sales to       
amounts due under the Purchase Note, it is unlikely that the holder will        
seek to foreclose on JMB/NYC's interest in the Upper Tier Partnership.  The     
Partnership received $207,884 in May of 2002 as a return of its December        
1999 advance to the limited partners of JMB/NYC.                                

Pursuant to the indemnification agreement, the Affiliated Partners    
were jointly and severally obligated to indemnify the REIT to the extent of     
$25 million to ensure their compliance with the terms and conditions            
relating to JMB/NYC's indirect limited partnership interests in the             
restructured and reorganized joint ventures that owned the Properties.  The     
Affiliated Partners contributed approximately $7,800,000 (of which the          
Partnership's share was approximately $3,900,000) to JMB/NYC, which was         
deposited into an escrow account as collateral for such indemnification.        
These funds were invested in stripped U.S. Government obligations with a        
maturity date of February 15, 2001.  Subsequent to that date, the remaining     
escrowed funds were invested in short-term U.S. Government obligations.         
Due to the Restructuring discussed above, during 1999 the maximum potential     
obligation was reduced to $14,285,000 and a portion of the collateral           
(approximately $4,460,000 in face amount) was released in 1999 to JMB/NYC.      
As a result of the sale of JMB/NYC's indirect interest in the 1290              
Partnership, the indemnification obligation was terminated and the              
remaining collateral (approximately $5,700,000 face amount of which the         
Partnership's share was approximately $2,900,000) was released in March         
2001 to JMB/NYC.  The Partnership's share of the reduction of the maximum       
unfunded obligation under the indemnification agreement recognized as           
income is a result of (i) interest earned on amounts contributed by the         
Partnership and held in escrow by JMB/NYC, (ii) the Partnership's share of      
the agreed upon reduction of the maximum obligation in November 1999 in         
connection with the Restructuring discussed above, and (iii) the                
Partnership's share of the remaining indemnification obligation that was        
released in March 2001 in connection with the sale of JMB/NYC's indirect        
interest in the 1290 Partnership.  Interest income earned reduced the           
Partnership's share of the maximum unfunded obligation under the                
indemnification agreement, which had been reflected as a liability.             

As discussed in the Notes, JMB/Piper, on behalf of Piper, had been    
negotiating with the lender to transfer title to the Piper Jaffray Tower        
through a deed in lieu of foreclosure.  JMB/Piper and the lender were           
unable to reach an agreement related to such a transaction.  Consequently,      
and as a result of the monetary default under the mortgage loan secured by      
the property, the lender began legal proceedings to realize upon its            
security in the building.  In consideration for, among other things, Piper      
and all of its constituent partners (collectively, the "Defendants") being      
released under the loan documents upon the expiration of the redemption         
period for foreclosure on the property and for payment of the Defendants'       
fees in connection with the transaction, within certain limitations, the        
Defendants executed a stipulation agreement consenting to a foreclosure         
sale of the property, including the fee interest in the land underlying the     
building.  On July 20, 2000, the Court approved the stipulation agreement       
and appointed a receiver on behalf of the lender.  On September 26, 2000, a     
sheriff's sale of the property occurred at which the lender received a          
sheriff's certificate of sale.  On October 2, 2000, the court approved such     
sale subject to redemption of the property at any time within six months        
from the date of such sale.  No such redemption occurred and title to the       
property transferred to the lender effective April 2, 2001.                     

As a result of the transfer, the Partnership realized extraordinary   
gain related to its share of the forgiveness of indebtedness and the write      
off of deferred mortgage fees in the net amount of approximately $7,600,000     
for financial reporting purposes.  The Partnership also recognized              
approximately $20,897,000 of gain for Federal income tax purposes in the        
second quarter of 2001 as a result of the transfer with no corresponding        
distributable proceeds.  The Defendants have no future liability for any        
representations, warranties and covenants as a result of the transfer.          

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The Wells Fargo Center - South Tower continues to suffer from the     
effects of the high level of debt secured by the property, and provides no      
cash flow to the Partnership.  During April 2001, the Partnership received      
notice of non-monetary defaults from the lender under the amended and           
restated promissory note secured by the Partnership's interest in the           
limited liability company that owns the property.  The Partnership              
acknowledged certain of the defaults described in the notice of default.        
In December 2001, the lender assigned all of its rights and interests under     
the loan to an affiliate of the lender.  On December 17, 2001, the              
Partnership acknowledged and consented to the plans of the affiliate of the     
lender to foreclose on the Partnership's interest in the limited liability      
company on or before December 31, 2002 and waived any notice or additional      
notice of foreclosure to which it may have been entitled under the terms        
and conditions of the loan documents or the California Commercial Code.         
The Partnership also agreed that, upon consummation of the foreclosure          
sale, any and all offsets, defenses and claims against the lender and           
certain other parties shall be waived and released.  In addition, the           
Partnership irrevocably appointed the affiliate of the lender, or any           
designee of the affiliate of the lender, as the sole and exclusive proxy of     
the Partnership to vote and exercise any and all voting and related rights      
and to take any other action that the affiliate of the lender deems             
necessary to protect and preserve its security interest in the                  
Partnership's interest in the limited liability company.  The affiliate of      
the lender agreed that it shall not execute any agreement or document or        
otherwise take any action which would impose or result in any personal          
liability of or recourse to the Partnership.  Upon the foreclosure of the       
Partnership's interest in the limited liability company, the Partnership        
will have no further right, title, or interest in the limited liability         
company.  The foregoing releases, waivers, and irrevocable proxy were given     
by the Partnership solely to facilitate the foreclosure sale and if the         
foreclosure sale is not consummated for any reason on or before                 
December 31, 2002, the same shall be deemed void with the same effect as if     
never given.  In the event that the Partnership's interest in the limited       
liability company is foreclosed upon and transferred to the lender during       
2002, the Partnership expects to recognize a significant amount of income       
for both Federal income tax and financial reporting purposes in 2002 with       
no corresponding proceeds.  The amended and restated promissory note had an     
adjusted principal balance of approximately $21,988,000 and accrued             
interest of approximately $21,182,000 at June 30, 2002.                         

The Partnership's interest through JMB/NYC in 237 Park was sold in    
January 2002.  The Partnership's only remaining investment property is its      
interest in Wells Fargo Center - South Tower, and the Partnership does not      
expect to receive any proceeds from the operations or disposition of this       
investment property.  In December 2001, the Partnership consented to plans      
to foreclose on the Partnership's interest in the limited liability company     
on or before December 31, 2002.  In the event that the Partnership's            
interest in the Wells Fargo Center - South Tower is foreclosed upon during      
2002, the Partnership expects that its liquidation and termination will         
occur by December 31, 2002, barring unforeseen circumstances.                   

Although the Partnership expects to make a minimal liquidating cash   
distribution, aggregate distributions received by Holders of Interest over      
the entire term of the Partnership will be less than 30% of their original      
investment.  However, in connection with sales or other dispositions            
(including transfers to lenders) of properties (or interests therein) owned     
by the Partnership or its ventures, Holders of Interests will be allocated      
a substantial amount of gain for Federal income tax purposes, regardless of     
whether any proceeds are distributed from such sales or other dispositions.     

A portion of such gain will be recognized in 2002 as a result of the sale       
of JMB/NYC's indirect interest in the 237 Partnership, and the remainder of     
such gain will also be recognized in 2002 if the foreclosure of the             
Partnership's interest in Wells Fargo Center - South Tower is completed         
before the end of this year.  For certain Holders of Interests such taxable     
income may be offset by their suspended passive activity losses (if any).       
Each Holder's tax consequences will depend on his own tax situation.            

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RESULTS OF OPERATIONS                                                           

The decrease in interest, rents and other receivables at June 30, 2002
as compared to December 31, 2001 is primarily due to the collection of sale     
proceeds of approximately $43,000 held in escrow since the close of the         
sale of the Louis Joliet Mall which was recorded as a receivable at             
December 31, 2001.                                                              

The decrease in other assets at June 30, 2002 as compared to          
December 31, 2001 is due to the return of the Partnership's 1999 advance to     
the limited partners of JMB/NYC related to the tranche of the Purchase          
Note, as described more fully above.                                            

The decrease in accounts payable at June 30, 2002 as compared to      
December 31, 2001 is primarily due to the timing of payment for certain of      
the administrative expenses of the Partnership.                                 

The increase in current portion of long-term debt at June 30, 2002 as 
compared to December 31, 2001 is due to the accrual of interest on the          
mortgage note secured by the Wells Fargo Center property.                       

The decrease in distributions received in excess of recorded          
investment, net at June 30, 2002 as compared to December 31, 2001 is due to     
the reduction of such amount in connection with the sale of the indirect        
interest in the 237 Partnership in January 2002. The distributions received     
in excess of recorded investment was created by the 1999 retirement of the      
Partnership's obligations to Carlyle Investors, Inc. and Carlyle Managers,      
Inc.  Such investment has been reduced to zero and included in the              
Partnership's share of gain on sale of indirect partnership interest due to     
the sale of the Partnership's indirect interest in the 237 Partnership, the     
Partnership's last JMB/NYC related investment property, in January 2002.        

The decrease in interest income for the three and six months ended    
June 30, 2002, as compared to the same periods in 2001 is primarily due to      
a lower average interest rate on invested funds during 2002.                    

The increase in other income for the six months ended June 30, 2002 as
compared to the same period in 2001 is due to the collection of an              
insurance settlement relating to a formerly owned property.                     

The decrease in professional services for the three and six months    
ended June 30, 2002 as compared to the same periods in 2001 is primarily        
due to lower costs for accounting services in 2002.                             

The decrease in general and administrative expenses for the six months
ended June 30, 2002, as compared to the same period in 2001 is primarily        
due to the payment in the first quarter of 2001 by the Partnership for          
state income taxes owed as a result of the sale of the Louis Joliet Mall,       
and also due to payment of a settlement amount for a dispute related to         
construction costs of a formerly owned property made in the second quarter      
of 2001.  The decrease in general and administrative expenses for the three     
months ended June 30, 2002, as compared to the same period in 2001 is           
primarily due to payment of the settlement amount for a dispute related to      
construction costs of a formerly owned property made in the second quarter      
of 2001.                                                                        

The Partnership's share of the reduction of the maximum unfunded      
obligation under and income related to termination of the indemnification       
agreement recognized as income during 2001 of $7,144,354 is a result of the     
sale of JMB/NYC's indirect interest in the 1290 Partnership in March of         
2001 and release of the Partnership's and other Affiliated Partners'            
indemnification obligation relating to the interest in the 1290                 
Partnership, as well as interest earned during 2001 on amounts contributed      
by the Partnership and held in escrow by JMB/NYC.  Such interest income         
earned reduced the Partnership's proportionate share of the maximum             
unfunded obligation under the indemnification agreement.                        

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The decrease in Partnership's share of operations of unconsolidated   
ventures for the three and six months ended June 30, 2002, as compared to       
the same periods in 2001 is due to the Partnership no longer having an          
ownership interest in the Piper Jaffray Tower in 2002 and also due to the       
Partnership's final share of operations received in 2001 in regards to the      
winding up of the affairs related to the Partnership's ownership interest       
in the 900 Third Avenue Building, as described more fully in the Notes.         

The Partnership's share of gain on sale of indirect partnership       
interest for the six months ended June 30, 2002 is the aggregate of the         
Partnership's share of JMB/NYC's gain from the sale of its indirect             
partnership interest in the 237 Partnership in January 2002 and the             
reduction of the distributions received in excess of recorded investment,       
net.  The Partnership's share of gain on sale of indirect partnership           
interest for the six months ended June 30, 2001 is the Partnership's share      
of JMB/NYC's gain from the sale of its indirect partnership interest in the     
1290 Partnership in March 2001.                                                 

The Partnership's share of extraordinary items from unconsolidated    
ventures for the three and six months ended June 30, 2001 are the net           
amount of the Partnership's share of gain on forgiveness of indebtedness of     
$8,039,165 and write-off of deferred mortgage fees of $410,869 resulting        
from the transfer of title to the Piper Jaffray Tower to the lender on          
April 2, 2001, as described more fully in the Notes.                            

PART II.  OTHER INFORMATION                                                     

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                              

During April 2001, the Partnership received notice of non-monetary    
defaults from the lender under the amended and restated promissory note         
secured by the Partnership's interest in the limited liability company that     
owns Wells Fargo Center - South Tower.  The Partnership acknowledged            
certain of the defaults described in the notice of default.  In December        
2001, the lender assigned all of its rights and interests under the loan to     
an affiliate of the lender.  On December 17, 2001, the Partnership              
acknowledged and consented to the plans of the affiliate of the lender to       
foreclose on the Partnership's interest in the limited liability company on     
or before December 31, 2002 and waived any notice or additional notice of       
foreclosure to which it may have been entitled under the terms and              
conditions of the loan documents or the California Commercial Code.  The        
note had an adjusted principal balance of approximately $21,988,000 and         
accrued interest of approximately $21,182,000 at June 30, 2002.  Reference      
is made to the subsection entitled "Wells Fargo Center" in the Notes to the     
Financial Statements filed with this report for a further discussion of the     
default under such note.                                                        

A portion of the purchase price for JMB/NYC's indirect interests in   
the 1290 Avenue of the Americas and 237 Park Avenue office buildings is         
represented by a certain promissory note (the "Purchase Note") bearing          
interest at 12-3/4% per annum.  Unpaid principal and interest were due at       
maturity on January 2, 2001.  As expected, JMB/NYC did not have funds to        
pay the Purchase Note at its maturity.  The outstanding principal and           
accrued and deferred interest on the Purchase Note at June 30, 2002, was        
approximately $180,531,000 including interest at the default rate (as           
defined) of 12-3/4% per annum.  Reference is made to the subsection             
entitled "JMB/NYC" in the Notes to the Financial Statements filed with this     
report for a further discussion of the default under the Purchase Note.         

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ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                             

(a)  Exhibits                                                   

       3-A.    Amended and Restated Agreement of Limited Partnership
is filed herewith.                    

    3-B.    Assignment Agreement by and among the Partnership,
              the General Partners and the Initial Limited Partner
is filed herewith.                    

     3-C.    Acknowledgement of rights and duties of the General
              Partners of the Partnership between ABPP Associates,
            L.P. (a successor Associate General Partner of the
       Partnership) and JMB Realty Corporation as of
               December 31, 1995 is incorporated herein by reference
               to the Partnership's Report for September 30, 1996 on
              Form 10-Q (File No. 0-15962) dated November 8, 1996.

      99.     Certification Pursuant to 18 U.S.C. Section 1350, as
               adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 is filed herewith.        

 (b)  No reports on Form 8-K were filed during the last quarter of
the period covered by this report.                                              

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SIGNATURES          

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV   

BY:   JMB Realty Corporation                    
(Corporate General Partner)         

By:   GAILEN J. HULL                
             Gailen J. Hull, Senior Vice President
Date: August 12, 2002               

Pursuant to the requirements of the Securities Exchange Act of 1934,  
this report has been signed below by the following person in the capacity       
and on the date indicated.                                                      

By:   GAILEN J. HULL                
               Gailen J. Hull, Chief Financial Officer
        and Principal Accounting Officer
Date: August 12, 2002               

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-Q’ Filing		Date		First		Last			Other Filings
		12/31/02		13		20
Filed as of:		8/14/02
Filed on:		8/13/02
		8/12/02		22
For Period End:		6/30/02		1		20
		5/31/02		11
		4/1/02		8					10-K405
		12/31/01		3		19			10-K405
		12/17/01		13		20			8-K
		6/30/01		5		20			10-Q
		4/2/01		12		20			10-K405,  8-K
		3/23/01		9		16
		3/2/01		10		16
		2/28/01		10		16
		2/15/01		9		17
		1/2/01		9		20
		1/1/01		9
		10/2/00		12		17
		9/26/00		12		17
		9/15/00		13
		7/20/00		12		17
		6/1/00		11
		5/31/00		11
		1/1/00		10		16
		9/1/99		13
		11/8/96		21
		9/30/96		21					10-Q
		12/31/95		21					10-K/A,  10-K405
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