Mendik Real Estate Limited Partnership – ‘10-K’ for 12/31/93

As of:  Thursday, 3/31/94   ·   For:  12/31/93   ·   Accession #:  783996-94-1   ·   File #:  0-15463

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Annual Report   —   Form 10-K
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 1: 10-K        Annual Report                                         44    222K 

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION                                
Washington, D.C. 20549                                                          

FORM 10-K                                                                       

X  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange   
Act of 1934  [Fee Required]                                                     

For the fiscal year ended December 31, 1993 or Transition Report Pursuant to    
Section 13 or 15(d) of the Securities Exchange Act of 1934  [Fee Required]      

For the transition period from                      to                          

Commission file number:  33-7707                                                

MENDIK REAL ESTATE LIMITED PARTNERSHIP                                          
Exact name of registrant as specified in its charter                            

State or other jurisdiction of incorporation    New York                        
I.R.S. Employer Identification No.              11-2774249                      

Address of principal executive offices          388 Greenwich Street            
                                  New York, New York
Zip Code                                        10013                           

Registrant's telephone number, including area code:  (212) 464-2465             

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

Securities registered pursuant to Section 12(g) of the Act:                     

Units of Limited Partnership Interest Title of Class                            

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 shorter period that the registrant  
was required to file such reports), and (2) has been subject to such filing     
requirements for the past 90 days.                                              

Yes  X      No                                                                  

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-K is not contained herein, and will not be contained, to the    
best of the Registrant's knowledge, in definitive proxy or information          
statements incorporated by reference in Part III of this Form 10-K or any       
amendment to this Form 10-K.  [ X ]                                             

The aggregate market value of Units held by non-affiliates of the registrant at 
March 28, 1994 was $196,645,000, computed by reference to the price at which    
Units were originally sold by the registrant.                                   

Documents Incorporated by Reference:  None                                      

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PART I                                                                          

Item 1.  Business                                                               

General                                                                         

Mendik Real Estate Limited Partnership (the "Partnership" or "Registrant") is a 
New York limited partnership which was formed in October 1985 pursuant to an    
agreement of limited partnership (as amended, the "Partnership Agreement") for  
the purpose of acquiring, maintaining and operating income-producing commercial 
office buildings in the Greater New York Metropolitan Area.  NY Real Estate     
Services 1 Inc., a Delaware corporation ("NYRES1") (formerly known as Hutton    
Real Estate Services XV, Inc.), and Mendik Corporation, a New York corporation  
("Mendik Corporation"), are the general partners (together, the "General        
Partners") of the Registrant. (See Item 10.)                                    

Commencing May 7, 1986, the Partnership began offering up to a maximum of       
1,000,000 units of limited partnership interest (the "Units") at $500 per Unit  
with a minimum required purchase of 10 Units or $5,000 (four Units for an       
Individual Retirement Account or Keogh Plan).  Investors who purchased the      
Units ("Investor Limited Partners") are not required to make any further        
capital contributions to the Partnership.  Upon completion of the offering on   
September 18, 1987 the Partnership had accepted subscriptions for 395,169 Units 
for gross aggregate cash proceeds to the Partnership of $197,584,500.  Net      
proceeds to the Partnership after deducting selling commissions, organization   
expenses, and other expenses of the offering were approximately $172,766,598.   
These proceeds were used to:  (i) repay the principal amount of and interest on 
interim financing obtained by the Partnership to fund the acquisition of a      
property located at 1351 Washington Boulevard, Stamford, Connecticut (the       
"Stamford Property"); (ii) acquire the leasehold interests in a property        
located on Mamaroneck Avenue in Harrison, New York (the "Saxon Woods Corporate  
Center") and in a property located at 330 West 34th Street, New York, New York  
(the "34th Street Property") and; (iii) acquire an approximate 60% interest in  
Two Park Company, the joint venture which owns a property located at Two Park   
Avenue, New York, New York (the "Park Avenue Property").                        

The Stamford Property, Saxon Woods Corporate Center, 34th Street Property and   
Park Avenue Property are each referred to as a "Property" and collectively      
referred to as the "Properties."  See Item 2 of this Report and Note 5 to the   
Consolidated Financial Statements for a further description of the Properties.  
The Partnership does not intend to acquire any additional properties.           

Following the acquisition of the Properties, a renovation program was           
undertaken by the Partnership to upgrade each of the Properties to maximize its 
investment potential.  As of December 31, 1990, these renovations, exclusive of 
ongoing tenant improvement work in connection with the leasing of space, were   
substantially complete at all the Properties.  See Item 2 of this Report.       

The Partnership's primary investment objectives with respect to the Properties  
(in no particular order of priority) are (i) capital appreciation, (ii)         
distributions of Net Cash From Operations (as defined in the Partnership        
Agreement), and (iii) preservation and protection of capital.  The attainment   
of the Partnership's investment objectives has been adversely affected by the   
significant downturn in the commercial office real estate market in the Greater 
New York Metropolitan Area.  See Item 7 of this Report.  The attainment of such 
objectives in the future will depend on many factors, including an improvement  
in such market conditions.  There can be no assurance that such objectives will 
be met.                                                                         

Overview -- Real Estate Market                                                  

Over the past several years, the commercial real estate market in the Greater   
New York Metropolitan Area weakened considerably as the national and local      
economies slowed.  As a result of the downturn, businesses have experienced     
varying degrees of financial and operating difficulties and many have downsized 
their operations.  The number of jobs in New York City declined for the fifth   
straight year in 1993.  By way of comparison, the United States has regained    
all the jobs lost since the recession started in early 1990.  The unemployment  
rate in New York City in December 1993 was 10.5% as compared to 11% in December 
1992 and 5.0% in December 1987.  This compares to unemployment rates for the    
entire United States of 6.4%, 7.3% and 5.7% in December 1993, 1992 and 1987,    
respectively.  In January 1994, the City's unemployment rate increased to       
10.8%.                                                                          

As businesses have reduced personnel located in the Greater New York            
Metropolitan Area or have relocated outside of the area, the demand for office  
space in the area has declined and vacancy rates have risen.  In addition, the  
number of tenants attempting to sublease their commercial office space has      
increased significantly, thereby exacerbating the oversupply of office space in 
the Greater New York Metropolitan Area.  The weakness in the marketplace has    
heightened competition among landlords, resulting in generally lower rents and  
increasingly generous tenant concession packages in the form of tenant          
improvements and free-rent periods.  The significant rise in the cost of tenant 
improvements to be funded by landlords under both new and renewal leases has    
sharply increased the demand for capital by landlords, including the            
Partnership.  This increased demand for capital comes at a time when banks and  

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other sources of capital have sharply curtailed their lending and investment    
activities.  In addition, pressure from regulatory agencies has further eroded  
lending institutions' abilities to invest in real estate or finance real estate 
projects.                                                                       

The lack of liquidity has led to a dramatic decline in the volume of real       
estate sales and financings reducing the ability of independent appraisers to   
use "comparable sales" to establish valuations.  In addition, the few sales     
that have occurred have been at significantly reduced prices.  As a result,     
appraisers have relied increasingly on conservative assumptions in order to     
assess a property's value.  Based on the assumptions of generous concession     
packages for new and renewal leases, longer free rent periods as well as        
stagnant rental rates, appraised values have declined sharply.                  

Over the past several years, a strategic plan was developed and implemented to  
enable each Property, to the extent possible, to meet expenses as they come due 
using operating revenues generated by that Property and loan proceeds from      
mortgages secured by that Property.  The Partnership has attempted to limit the 
use of its working capital reserves to fund operating costs and debt service at 
each of the Properties.  See Item 7 of this Report for a discussion of the      
Partnership's plan.  See Item 2 of this Report for a description of the         
Partnership's current leasing strategy at each of the Properties.               

Competition                                                                     

Each of the Properties is subject to competition from similar types of          
properties located in the same vicinity.  The business of owning and operating  
commercial office buildings in the Greater New York Metropolitan Area is highly 
competitive, and the Partnership competes with a number of established          
companies, some of which have greater resources than the Partnership.  Current  
economic conditions have increased the competition for tenants.                 

Both of the General Partners and their respective affiliates participate        
directly or through other partnerships or investment vehicles in the            
acquisition, ownership, operation, and sale of properties which may be in       
direct competition with one or more of the Properties.                          

Employees The Partnership has no employees.  See Item 13 of this Report.        

Item 2. Properties                                                              

Saxon Woods Corporate Center                                                    

Valuation.  The Partnership's investment in the leasehold interest in the Saxon 
Woods Corporate Center at acquisition was $20,664,379, excluding acquisition    
expenses of $536,454.  The Property's appraised value as of January 21, 1986    
was $22,000,000.  The appraised value of the leasehold interest as of December  
31, 1993 was $15,000,000, as compared to appraised values of $14,000,000 at     
December 31, 1992 and $12,000,000 at December 31, 1991.                         

Location.  Saxon Woods Corporate Center is located on Mamaroneck Avenue in      
Harrison, New York, approximately 18 miles north of New York City in            
Westchester County.  The office park is located near the Mamaroneck Avenue exit 
of Hutchinson River Parkway, approximately one mile north of Interstate 95,     
which is the major artery connecting New York City to Westchester County and    
Connecticut.  Westchester County Airport is located approximately three miles   
north of the site.                                                              

Site and Improvements.  Saxon Woods Corporate Center consists of two five-story 
office buildings.  The building at 550 Mamaroneck Avenue consists of            
approximately 112,000 net rentable square feet and the building at 600          
Mamaroneck Avenue contains approximately 125,000 net rentable square feet,      
based on current standards of measurement.  The buildings are situated on a     
15.28 acre site, which provides ground-level parking for more than 800 cars.    

Ground Lease.  The parcel of land underlying each building is leased from an    
unaffiliated ground lessor pursuant to a ground lease which terminates in       
September 2027 and provides the Partnership with the option to renew for two    
25-year periods and one 39-year period.  Each ground lease provides for an      
annual net rental of $170,000, with an increase of $20,000 every five years     
commencing in January 1996.                                                     

Renovations.  During the period from 1986 through 1993, the Partnership         
expended approximately $8.9 million on capitalized renovations, including       
tenant improvement construction, funded from cash flow, Partnership reserves,   
and borrowings.                                                                 

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Financing.  Through January 1994, the Partnership had borrowed approximately    
$4.7 million and made commitments to borrow an additional $362,000 under the    
$6.5 million non-recourse line of credit secured by the Partnership's leasehold 
interest in the Saxon Woods Corporate Center (the "Saxon Woods Line of          
Credit"). Reference is made to Note 6 to the Financial Statements, which is     
incorporated herein by reference thereto, for additional information regarding  
the Saxon Woods Line of Credit.                                                 

Leasing.  The Property's occupancy rates as of February 28, 1994, 1993 and 1992 
were 75%, 67% and 42%, respectively.  The vacancy rate in Westchester County,   
where the Saxon Woods Corporate Center is located, was 20.9% as of December 31, 
1993, as compared to a vacancy rate of 15.1% at December 31, 1992.  The         
Property's combined occupancy rate was lower than in the surrounding area       
primarily as a result of IBM's having vacated its more than 100,000 square feet 
of space in the Property (which constituted approximately 43% of the space in   
the Property) upon expiration of its lease in November 1988 in order to         
consolidate into other existing locations in Westchester County.  This          
departure coincided with a severe and prolonged downturn in the Westchester     
County commercial real estate market.  Although the Property's occupancy rate   
had risen since the departure of IBM, the Partnership experienced the loss of   
General Accident Insurance Company of America which vacated its 28,000 square   
feet in the Property (which constituted approximately 12% of the space in the   
Property) to relocate to the company's newly-constructed headquarters building  
upon expiration of its lease in July 1991.  During 1993, utilizing funds        
available under the Saxon Woods Line of Credit, the Partnership entered into    
leasing transactions covering approximately 30,000 square feet at the Property  
including lease extensions and expansions by existing tenants.  This activity   
is in addition to the leases for approximately 65,000 square feet that were     
signed during 1992.  During 1994, the General Partners will continue to market  
the Property's available space to commercial office tenants and fund the costs  
of any additional leases utilizing proceeds from the Saxon Woods Line of        
Credit.                                                                         

Stamford Property                                                               

Valuation.  The Stamford Property was acquired by the Partnership for           
$31,250,000, excluding acquisition expenses of $313,125.  The Property's        
appraised value as of October 17, 1985 was $34,000,000.  The appraised value of 
the Property as of December 31, 1993 was $9,150,000, compared to appraised      
values of $10,600,000 as of December 31, 1992 and $14,100,000 as of December    
31, 1991.                                                                       

Location.  The Stamford Property is located at 1351 Washington Boulevard in the 
northwestern section of downtown Stamford, Connecticut approximately one mile   
north of the Stamford railroad station and Interstate 95, which is the major    
east/west freeway in the city, and 3.5 miles south of the Merritt Parkway,      
which bisects the city.  In addition to fronting on Washington Boulevard, the   
Stamford Property is bounded by North Street, Franklin Street and Stanley       
Court.  Stamford is located on the Long Island Sound in southwestern            
Connecticut, approximately 34 miles northeast of New York City.                 

Site and Improvements.  The office building and adjacent parking garage are     
located on a 1.73 acre parcel of land.  The ten-story office building contains  
approximately 220,000 net rentable square feet, based on current standards of   
measurement.  The above-ground parking garage provides over 550 parking spaces. 

Renovations.  During the period from 1985 through 1993, the Partnership         
expended approximately $10 million on capitalized renovations, including tenant 
improvement construction, funded from cash flow, Partnership reserves, and      
borrowings.                                                                     

Financing.  Reference is made to Note 6 to the Financial Statements, which is   
incorporated herein by reference thereto, for information regarding the terms   
of the $12.5 million non-recourse first mortgage loan to which the Stamford     
Property is subject (the "Stamford Loan").  The Partnership failed to make full 
payment of debt service due on February 10, 1994 and March 10, 1994 with        
respect to the Stamford Loan.  Consequently, the Partnership is in default      
under the terms of the Stamford Loan and the property's lender, New York Life   
Insurance Company ("New York Life"), may elect to exercise its remedies under   
the loan agreement including accelerating the maturity date of the principal    
balance of the loan and electing to foreclose on its mortgage.  The General     
Partners are now seeking a short-term agreement from New York Life, pursuant to 
which New York Life would forbear from exercising its remedies under the        
mortgage and Mendik Realty Company, Inc. ("Mendik Realty") would continue to    
defer its management fees and leasing commissions with respect to the Property. 
The Partnership would then attempt to sell the Property during the forbearance  
period.  However, in light of the fact that the appraised value of the Property 
at December 31, 1993 was less than the mortgage, and New York Life is unlikely  
to accept a pay off of its mortgage at a discount, it is unlikely that such a   
sale would result in any cash proceeds being available for distribution.  If    
the Partnership were unable to sell the Property and pay off the Stamford Loan  
within the forbearance period, the Partnership would transfer the deed in lieu  
of a foreclosure in order to provide an orderly and efficient transfer of title 
to the Property to New York Life.  See Item 7.                                  

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Leasing.  The Property's occupancy rates as of February 28, 1994, 1993 and      
1992, were 57%, 60% and 60%, respectively.  Fairfield County, where the         
Stamford Property is located, has suffered from one of the highest metropolitan 
area vacancy rates in the country over the past six years as the vacancy rate   
increased from 17% in 1986 to 24.2% as of December 31, 1992.  As of December    
31, 1993, the vacancy rate in Fairfield County had declined slightly to 21%.    
Major tenants at the Stamford Property include D&B Computing Services, Inc.     
("D&B") which leases 43,100 square feet (20% of the total leasable area in the  
Property) under a lease that expired on December 31, 1993.  Effective January   
1, 1994, the Partnership signed a ten-year lease extension with D&B whereby D&B 
will remain a tenant in the property through December 31, 2003.  However, the   
rental rate D&B is paying under the terms of the extension represents a         
substantial reduction in the rate paid previously, reflecting current market    
conditions in Stamford.  The property's other major tenant is Automatic Data    
Processing, Inc. ("ADP") which leases 34,700 square feet (16% of the total      
leasable area in the Property) under a lease expiring June 30, 1994.  ADP has   
subleased approximately two-thirds of its space in the Property.  The           
Partnership has entered into negotiations with ADP regarding a possible         
extension of the lease covering its portion of the space.  The Partnership has  
also begun discussions with certain of ADP's subtenants in connection with new  
leases to extend the subtenants' tenancy beyond the expiration of ADP's lease.  
Based on current market conditions, it is likely that any lease extensions or   
renewals will be at lower rates than the Partnership currently receives,        
further adversely affecting the revenue generated by the Property.  Currently,  
a lease for one of ADP's subtenants that occupies 8,200 square feet is close to 
being completed.                                                                

The General Partners leasing strategy at the Property has been to market the    
Property's available space to potential tenants on an "as is" basis which would 
not require the Partnership to make additional investments for tenant           
improvement construction and would enable the Partnership to conserve its       
limited working capital reserves.  The strategy was adopted recognizing that    
beginning in 1994, when the original modification was to expire, the            
Partnership would not have sufficient resources to meet its debt service        
payments and did not want to jeopardize any additional investment in the        
Property.  Leases signed on an "as is" basis are likely to be at annual rental  
rates substantially below existing market rates.  In addition, leasing space on 
an "as is" basis may have put and may continue to put the Partnership at a      
disadvantage compared to other landlords that provide allowances for tenant     
improvements.  The occupancy rate at the Property, which is lower than that in  
the surrounding area, may have been and may continue to be adversely affected   
by the extremely competitive nature of the Stamford real estate market and the  
availability of space in newer buildings in the area as compared to the         
Partnership's older but renovated Property.                                     

34th Street Property                                                            

Valuation.  The Partnership's investment in the leasehold interest in the 34th  
Street Property at acquisition was $34,883,132, excluding acquisition expenses  
of $728,268.  The Property's appraised value as of November 1, 1986 was         
$39,000,000.  The appraised value of the leasehold interest as of December 31,  
1993 was $9,800,000 compared to appraised values of $12,500,000 at December 31, 
1992 and $23,000,000 as of December 31, 1991.                                   

Location.  The 34th Street Property is located at 330 West 34th Street, New     
York, New York, which is between Eighth and Ninth Avenues in Manhattan's Penn   
Plaza district, five blocks west of the Empire State Building, one-half block   
west of Pennsylvania Station and three blocks east of the Jacob Javits          
Convention Center.                                                              

The Penn Plaza district is located in midtown Manhattan and comprises the       
seven-block area that surrounds Pennsylvania Station, New York City's largest   
transportation hub.  Pennsylvania Station serves as the western terminus for    
the Long Island Railroad, the Manhattan terminal for the Amtrak rail system and 
the eastern terminus for the New Jersey Transit rail system.  In addition,      
several major arteries of the New York City subway system have stops in and     
around Pennsylvania Station, providing access to passengers from the New York   
City boroughs of Brooklyn, Queens and the Bronx.  Madison Square Garden, New    
York City's largest spectator arena, is located above Pennsylvania Station.     

Site and Improvements.  The 34th Street Property consists of an 18-story        
structure and a two-story attached annex containing in the aggregate            
approximately 627,000 net rentable square feet, based on current standards of   
measurement.  The 46,413 square foot site also includes an above-ground parking 
area containing 39 spaces that is currently leased to an independent garage     
operator.                                                                       

Ground Lease.  Per the terms of the ground lease agreement, the annual ground   
lease payment to the unaffiliated ground lessor for the parcel of land          
underlying the 34th Street Property increased from $1.25 million to $2.25       
million effective January 1, 1992.  Reference is made to Note 5 to the          
Financial Statements, which is incorporated herein by reference thereto, for    
additional information on the ground lease.                                     

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Renovations.  During the period from 1987 through 1993, the Partnership         
expended approximately $9.6 million on capitalized renovations, including       
tenant improvement construction, funded from cash flow, Partnership reserves,   
and borrowings.                                                                 

Financing.    On August 12, 1993, the Partnership entered into a modification   
of the 34th Street Line of Credit which will allow the Partnership to pay off   
the 34th Street Line of Credit at a substantial discount by payment of the sum  
of $6.5 million at any time through June 30, 1994.  Should the Partnership be   
unable to pay off the 34th Street Line of Credit, the forbearance agreement     
provides that the Partnership will assign its leasehold interest to the         
Property to the lender, at the lender's election, in lieu of a foreclosure.     
Reference is made to Item 7 and Note 6 to the Financial Statements, which is    
incorporated herein by reference thereto, for additional information regarding  
the 34th Street Line of Credit.                                                 

In order further to supplement the Property's cash flow, beginning in January   
1992, Mendik Realty agreed to defer its management fees of approximately        
$170,000 a year that would otherwise have been payable with respect to the 34th 
Street Property, although it had no obligation to do so.  Pursuant to the       
forbearance agreement, these fees will continue to be deferred.  The            
Partnership's obligation to pay the management fees deferred by Mendik Realty,  
will be on a non-recourse basis to the Partnership and will bear interest at a  
rate per annum equal to the prime rate of Morgan Guaranty Trust Company of New  
York less 1.25%.  Principal and interest will be payable on December 31, 2025,  
or such earlier date on which the term of the Partnership terminates, subject   
to a mandatory prepayment from the net proceeds from the sale of any of the     
Properties, after repayment of all debt secured by the Property sold.  In       
addition, Mendik Realty agreed to defer its leasing commission with respect to  
the long-term lease with the City of New York as discussed below and any        
further leasing commissions associated with additional leasing activity at the  
Property.  See Item 7.                                                          

Leasing.   On February 17, 1993, the Partnership signed a long-term lease with  
the City of New York effective August 1, 1992 for approximately 300,000 square  
feet or approximately 48% of the Property's leasable area.  The term of the     
lease is for eight years and six months expiring on February 28, 2001.  The     
City has the right to terminate the lease without penalty provided the City     
gives the Partnership one year's notice of its intent to terminate the lease.   
The City will also be required to pay the Partnership for certain improvement   
costs as defined in the lease.  The City will make annual base rental payments  
of approximately $5.4 million and will pay its proportionate share of increases 
in real estate taxes and operating expenses.  Approximately $1.25 million has   
been spent by the Partnership for tenant improvement costs required under the   
terms of the lease.  The funds utilized for such purpose had been held as       
security by the unaffiliated ground lessor.                                     

The General Partners have been marketing the Property's remaining available     
space to light-industrial type tenants on an "as is" basis.  Rental rates for   
light-industrial type tenants are substantially less than the rental rates      
received from commercial office tenants.  Effective January 1, 1993, the        
Partnership signed a ten-year lease with Tiger Button Company, Inc. for         
approximately 25,000 square feet in the Property.  In addition, effective July  
1, 1993, the Partnership signed a nine and one-half year lease with G. Dinan &  
Co., Inc. for approximately 26,000 square feet.  The General Partners believe   
that renting space on an "as is" basis to light-industrial type tenants may be  
an effective means to generate additional cash flow from the Property without   
requiring a significant current investment in tenant improvements.  The         
Property's occupancy rates as of February 28, 1994, 1993 and 1992, were 61%,    
57% and 50%, respectively.  The Midtown West District, where the 34th Street    
Property is located has seen the vacancy rate for primary office space increase 
from 9.6% at December 31, 1987 to 16.2% at December 31, 1993.  It should be     
noted that the Property's occupancy rate is not comparable with office          
buildings in the Midtown West District due to the Partnership's strategy of     
marketing space to light-industrial type tenants rather than commercial office  
tenants.  However, the Property's occupancy rate continues to be below the      
average occupancy rate for office space in the area in which it is located      
primarily because of past uncertainty surrounding the City's tenancy, the       
character of the City's tenancy, the nature of the services the City provides,  
and the Partnership's strategy of conserving its limited resources.             

Park Avenue Property                                                            

Valuation.  Two Park Company, the joint venture in which the Partnership has an 
approximate 60% interest, acquired the Park Avenue Property for $151,500,000.   
The Property's appraised value as of September 1, 1987 was $165,000,000.  The   
appraised value of the Property as of December 31, 1993 was $115,000,000,       
compared to appraised values of $125,000,000 as of December 31, 1992 and        
$135,000,000 as of December 31, 1991.  The Partnership's investment in its      
interest in Two Park Company at acquisition was $95,965,732, including          
$35,820,000 which represents the Partnership's share of first mortgage debt to  
which the Property was subject when the Partnership acquired its interest and   
excluding $1,722,532 of acquisition expenses.  The appraised value of the       
Partnership's interest in the Property as of December 31, 1993 was $68,655,000, 
compared to appraised values of $74,625,000 as of December 31, 1992,            
$80,595,000 as of December 31, 1991 and $98,505,000 as of September 1, 1987.    

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Location.  The Park Avenue Property is located at Two Park Avenue, New York,    
New York, on an approximately one-acre site that occupies the entire western    
frontage of Park Avenue between East 32nd and East 33rd Streets in midtown      
Manhattan.  The Park Avenue Property is located four blocks east of             
Pennsylvania Station and nine blocks south of Grand Central Station, New York   
City's largest transportation hubs.  Grand Central Station serves as the        
Manhattan terminal for the Metro North rail system.  In addition to a subway    
stop located below the building, several major arteries for the New York City   
subway system have stops in and around Grand Central Station and Pennsylvania   
Station, providing access to passengers from the New York City boroughs of      
Brooklyn, Queens and the Bronx.                                                 

Site and Improvements.  The improvements to the Park Avenue Property consist of 
a 28-story office building that contains approximately 956,000 net rentable     
square feet, based on current standards of measurement.  The building includes  
two lower levels consisting of a subway concourse, a small tenant garage        
containing approximately 43 spaces, rentable storage areas and mechanical       
facilities.                                                                     

Renovations.  During the period from 1987 through 1993, a total of              
approximately $39.7 million was capitalized by Two Park Company on renovations. 

Financing.  Reference is made to Note 6 to the Financial Statements, which is   
incorporated herein by reference thereto, for information regarding the         
non-recourse first mortgage, non-recourse second mortgage and non-recourse      
third mortgage secured by the Park Avenue Property which aggregate $75 million. 

Leasing.  The Property's occupancy rates as of February 28, 1994, 1993 and      
1992, were 89%, 90% and 92%, respectively.  The vacancy rate for primary office 
space in the Grand Central District of Midtown Manhattan, where the Park Avenue 
Property is located, has increased from 10.2% at December 31, 1987 to 18.4% at  
December 31, 1992.  At December 31, 1993, the vacancy rate in the Grand Central 
District had declined slightly to 17.6%.  During 1994, the General Partners     
will continue to market the Property's available space to commercial office     
tenants.                                                                        

Major tenants at the Park Avenue Property are Times Mirror Magazines, Inc. and  
its affiliate Newsday, Inc. which, in the aggregate, lease 259,043 square feet  
(approximately 27% of the total leasable area in the Property) under two leases 
expiring on June 30, 2004 and National Benefit Life Insurance Company which     
leases 99,800 square feet (approximately 10% of the total leasable area in the  
Property) under a lease expiring on May 30, 1998.  The base rental income under 
the leases with Times Mirror Magazines, Inc. and Newsday, Inc., and National    
Benefit Life Insurance Company represented approximately 18% and 8%,            
respectively, of the Partnership's consolidated rental income in 1993.          

Item 3. Legal Proceedings                                                       

Neither the Partnership nor any of the Properties is currently subject to any   
material legal proceedings.                                                     

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

During the fourth quarter of 1993, no matter was submitted to a vote of         
security holders through the solicitation of proxies or otherwise.              

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PART II                                                                         

Item 5. Market for the Partnership's Limited Partnership Units and Related      
Security Holder Matters                                                         

As of December 31, 1993, there were 19,815 holders of Units.  No public trading 
market has developed for the Units, and it is not anticipated that such a       
market will develop in the future.  The transfer of Units is subject to         
significant restrictions, including the requirement that an Investor Limited    
Partner may transfer his Units only with the consent of the General Partners,   
which consent may be withheld in the sole and absolute discretion of the        
General Partners.                                                               

During the first quarter of 1989, a decision was made by the General Partners   
to establish reserves in the amount of what would otherwise be Net Cash From    
Operations to help meet anticipated Partnership requirements.  For the years    
ended December 31, 1993 and 1992, no distributions were paid to the Partners,   
and the Partnership does not contemplate making any distributions during 1994.  
See Item 7 of this Report.                                                      

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Item 6.  Selected Financial Data                                                

The following financial data of the Partnership has been selected by the        
General Partners and derived from financial statements which have been audited  
by KPMG Peat Marwick, independent public accountants whose report thereon is    
included elsewhere herein.  The information set forth below should be read in   
conjunction with the Partnership's financial statements and notes thereto and   
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations," also included elsewhere herein.                                    

                                                                [Download Table]


At or For The Year Ended December 31                                           

                    1993        1992        1991        1990        1989       

(Dollars in                                                                    
thousands, except                                                              
for per Unit                                                                   
data) (1)                                                                      
                                                                               
Total income (2)    $ 34,616    $ 34,437    $ 36,318    $ 35,931    $ 34,385   

Operating income                                                               
before non-cash                                                                
expenses (2)(3)        1,541       2,454       3,472       4,804       6,291   

Net Loss (4)          11,407 (7)  52,416 (7)   8,063       5,755       3,112   

Total assets (2)     237,798     247,773     299,247     305,674     293,195   

Total Mortgage and                                                             
Notes Payable (2)    107,043     105,655     103,056     100,000      83,000   

Net cash provided                                                              
(used) by operating                                                            
activities (2)         1,375       1,824         622         410      (1,987)  

Net Loss per Unit (5)  28.58 (7)  131.31 (7)   20.20       14.42        7.80   

Cash distributions                                                             
per Unit (5)(6)           --          --          --          --          --   

Net asset value                                                                
per Unit (5)           $  99 (8)  $  121 (8)  $  162 (8)  $  242 (8)  $  500(9)
<FN>                                                                           
(1) Selected Financial Data and the Consolidated Financial Statements include  
the accounts of Two Park Company, a joint venture of which the Partnership owns
an approximate 60% interest.                                                   

(2) Includes the approximate 40% interest in Two Park Company not owned by the 
Partnership.                                                                   

(3) Excludes an unrealized loss on properties held for disposition recognized  
in 1992 and 1993.  Operating income before depreciation and amortization, on a 
consolidated basis, has been cited in Item 7.                                  

(4) Excludes the approximately 40% interest in Two Park Company not owned by   
the Partnership.                                                               

(5) 395,169 Units outstanding.                                                 

(6) During the first quarter of 1989, a decision was made by the General       
Partners to establish reserves in the amount of what would otherwise be Net    
Cash From Operations to help meet anticipated Partnership requirements.        

(7) Includes an unrealized loss on properties held for disposition of          
$4,240,608 and $43,166,559 at December 31, 1993 and 1992, respectively.  See   
Item 7.                                                                        

(8) The calculation of net asset value assumes a hypothetical sale of the      
Properties at their appraised values and the distribution of the net proceeds  
of such sales, together with the Partnership's working capital, to the         
Partners.  The calculation does not take into account various factors, such as 
the lack of a public market for resales of Units, the price at which Units may 
be resold, and significant expenses which would be incurred in selling the     
Properties and distributing the proceeds.                                      

(9) Pursuant to Section 19(d) of the Partnership Agreement, the General        
Partners determined that there were not significant increases or decreases in  
the value of Partnership assets and were permitted to report the net asset     
value of each Unit at par, or $500.                                            

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

Liquidity and Capital Resources                                                 

The commercial real estate market in the Greater New York Metropolitan Area     
remains weak.  As vacancy rates have risen, increased competition among         
landlords has led to lower rents and increasingly generous tenant concession    
packages in the form of tenant improvements and free-rent periods.  The         
significant cost of tenant improvements required to be funded under both new    
and renewal leases has sharply increased the demand for capital by landlords,   
including the Partnership.  Expenditures for tenant improvements have           
contributed to the Partnership's reduced liquidity.  In order to conserve the   
Partnership's limited resources, the General Partners have pursued a strategy   
intended to position each of the Partnership's four properties, to the extent   
possible, to meet its operating and other expenses as they come due using only  
the operating income generated by that Property, and, if necessary, proceeds    
from borrowings secured by such Property.                                       

During 1993, the Partnership funded operating costs, the cost of tenant         
improvements, leasing commissions, and building capital improvements from five  
sources:  (i) positive cash flow generated by the approximately 60% joint       
venture interest in the Park Avenue Property and the Partnership's leasehold    
interest in the Saxon Woods Corporate Center, (ii) Partnership reserves, (iii)  
funds provided by certain unsecured loans and the deferral of property          
management fees by certain affiliates of the General Partners, (iv) additional  
borrowings from the $6.5 million Saxon Woods Line of Credit and (v) a portion   
of the $1.25 million security deposit maintained by the unaffiliated ground     
lessor for the 34th Street Property.  It is expected that the availability of   
funds from certain of these sources will be reduced in the future.              

Park Avenue Property - Although the Partnership has continued to lease space at 
the Property, with the continuing softness in the real estate market, new and   
renewal leases generally have been signed at rental rates significantly less    
than the rental rates received on certain expiring leases.  The Property's cash 
flow, however, is expected to remain stable for the foreseeable future because  
rental rate increases negotiated in leases signed in earlier years have offset  
the lower market rental rates reflected in the leases recently signed by the    
Partnership.                                                                    

At December 31, 1993, the unrestricted cash balance at the Property was         
approximately $5 million over and above a reserve for real estate taxes.  The   
Park Avenue Property currently generates, and is expected to generate in the    
future, sufficient revenue to cover operating expenses and debt service         
obligations.  The indebtedness secured by the Park Avenue Property currently    
matures in 1998 (or 1996 at the option of the lender).  The Partnership         
expects, as the maturity of the loan approaches, to commence negotiations to    
extend the existing loan or to seek refinancing.  However, as a result of the   
current lack of liquidity in the financial marketplace, no assurances can be    
made that the Partnership will be able to extend with the existing lender or    
refinance with a new lender, on terms acceptable to the Partnership or at all.  

Saxon Woods Corporate Center - The Partnership expects that cash flow from the  
Saxon Woods Corporate Center will cover operating expenses and debt service     
obligations in 1994.  Although the Saxon Woods Line of Credit is in the amount  
of up to $6.5 million, as a result of Section 13(d) (xviii) of the Partnership  
Agreement which prohibits the Partnership from incurring indebtedness secured   
by a Property in excess of 40% of the then-appraised value of such Property (or 
40% of the value of such Property as determined by the lender as of the date of 
financing or refinancing, if such value is lower) (the "Borrowing Limitation"), 
the Partnership is permitted to borrow only $6 million based on the most recent 
appraisal of the Saxon Woods Corporate Center which as of December 31, 1993 was 
$15 million.  The loan agreement provides that all available cash flow from the 
Property will be used for expenses incurred at the Property prior to borrowing  
any additional funds under the Saxon Woods Line of Credit.  The General         
Partners expect that additional leasing activity, the costs of which partially  
will be funded by borrowing amounts remaining available under the Saxon Woods   
Line of Credit, may result in an increase in the appraised value of the         
Property thereby enabling the Partnership to borrow the additional amounts      
available under the Saxon Woods Line of Credit up to the full amount of $6.5    
million.  There can be no assurance that future appraisals will reflect an      
increase in the Property's value which would enable the Partnership to borrow   
additional funds.  As of                                                        

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December 31, 1993, the Partnership had borrowed $4,542,677 under the Saxon      
Woods Line of Credit.  In January 1994 the Partnership borrowed an additional   
$138,000 and had made commitments to borrow an additional $362,000 which would  
increase the total borrowings on the Saxon Woods Line of Credit to $5,042,677.  

The indebtedness secured by the Saxon Woods Corporate Center currently matures  
in 1996.  The Partnership expects, as the maturity of the loan approaches, to   
commence negotiations to extend the existing loan or to seek refinancing.       
However, as a result of the current lack of liquidity in the financial          
marketplace, no assurances can be made that the Partnership will be able to     
extend with the existing lender or refinance with a new lender, on terms        
acceptable to the Partnership or at all.                                        

34th Street Property - On February 17, 1993, the Partnership signed a long-term 
lease with the City of New York effective August 1, 1992 for approximately      
300,000 square feet in the 34th Street Property.  The City has the right to     
terminate the lease without penalty provided the City gives the Partnership one 
year's notice of its intent to terminate the lease.  The City will also be      
required to pay the Partnership for certain improvement costs as defined in the 
lease.  The terms of the lease call for the City to make annual base rental     
payments of approximately $5.4 million and pay its proportionate share of       
increases in real estate taxes and operating expenses.  Per the terms of the    
lease, approximately $1.25 million is being spent by the Partnership for tenant 
improvements required under the terms of the lease.  In order to fund the       
tenant improvements required by the City lease, the Partnership negotiated an   
agreement with the unaffiliated ground lessor pursuant to which the ground      
lessor agreed to make available the $1.25 million that was being held as        
security under the ground lease.  As of December 31, 1993, virtually all of     
these funds had been spent.  The ground lessor also agreed to waive the lease   
requirement that the Partnership deposit an additional $1 million as security   
with the ground lessor in connection with the increase in the annual ground     
rent in 1992 to $2.25 million.                                                  

During 1992, the cash flow from the 34th Street Property did not cover its debt 
service obligations after payment of operating expenses, and it was not         
expected to meet its debt service obligations in 1993.  As a result, in order   
to conserve the Partnership's limited working capital reserves and induce The   
First National Bank of Chicago ("FNBC"), the Property's lender, to modify the   
mortgage's terms, the Partnership suspended its interest payments to FNBC       
beginning in September 1992.  On August 12, 1993, the Partnership entered into  
a forbearance agreement which modified the terms of the 34th Street Line of     
Credit.  Pursuant to the forbearance agreement FNBC agreed to forbear through   
June 30, 1994 from exercising its remedies under the loan agreement as a result 
of the Partnership's failure to pay interest.  The forbearance agreement will   
also allow the Partnership to pay off the 34th Street Line of Credit for $6.5   
million at any time through June 30, 1994, a substantial discount to the 34th   
Street Line of Credit's current outstanding balance and below the Property's    
December 31, 1993 appraised value of $9.8 million.  As of December 31, 1993,    
there was $15 million of principal and approximately $1.3 million of accrued    
interest outstanding on the 34th Street Line of Credit.  Also through June 30,  
1994, the Partnership will be permitted to make interest payments to FNBC only  
to the extent of available cash flow from the 34th Street Property.  Since the  
forbearance agreement went into effect, the Partnership has not made any        
interest payments to FNBC.  The General Partners are seeking to obtain either   
debt or equity financing even if such financing would entail the Partnership's  
transferring all or a portion of its interest in the Property to the party      
providing the financing.  In the event the Partnership obtains from a third     
party an offer to provide financing of less than the $6.5 million required by   
FNBC, the Partnership would explore with FNBC a pay off at a further discount.  
Should the Partnership be unable to pay off the 34th Street Line of Credit by   
June 30, 1994, the forbearance agreement provides that the Partnership will     
assign its interest in the Property and in the ground lease to the Property to  
FNBC, at FNBC's election, in lieu of foreclosure.  The forbearance agreement    
with FNBC provides the Partnership with an opportunity to pay off the 34th      
Street Line of Credit at a substantial discount while at the same time          
establishing a cost-effective means to ensure an orderly and efficient transfer 
of the Property to FNBC in the event the 34th Street Line of Credit cannot be   
paid off.  The Partnership has no assurances that it will be able to obtain the 
financing necessary to pay off the 34th Street Line of Credit and any such pay  
off will depend on numerous factors including general market conditions.  Chief 
among these is the fact that many traditional sources of real estate financing  
such as banks, insurance companies and pension funds have dramatically          
curtailed their investment in commercial office properties.  Consequently, only 
a limited number of investors is likely to be available, further hampering the  
Partnership's ability to secure a refinancing.  Should the Partnership be       
unable to complete a refinancing, it will likely result in the loss of the      
Partnership's investment in the Property.                                       

In order to improve the 34th Street Property's cash flow, beginning in January  
1992, Mendik Realty voluntarily agreed to defer its management fees of          
approximately $170,000 a year that would otherwise have been payable with       
respect to the 34th Street Property.  In addition, Mendik Realty agreed to      
defer its leasing commission with respect to the signing of the long-term lease 
with the City of New York and any further leasing commissions associated with   
additional leasing activity at the Property.  Both of these provisions will     
remain in effect pursuant to the terms of the forbearance agreement with FNBC.  

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The forbearance agreement requires the Partnership to deposit all receipts from 
the Property into a lockbox at FNBC.  FNBC will approve all releases from the   
lockbox to fund Property costs.  As of December 31, 1993, approximately $1      
million was in the lockbox account maintained at FNBC which was utilized to     
fund real estate taxes due in January 1994.                                     

Stamford Property - As described in Note 6 to the Financial Statements, the     
Partnership previously restructured the loan secured by the Stamford Property   
in 1991.  As part of the terms of the restructured loan, Mendik Corporation and 
an affiliate of NYRES1 loaned $50,000 and $110,000, respectively, to the        
Partnership in each of 1991, 1992 and 1993.  The loans were required to be      
deposited in an escrow account and may be used only to pay costs and expenses   
related to the Stamford Property.  Mendik Realty also agreed to defer its       
management fees of approximately $70,000 a year in connection with the Stamford 
Property in each of calendar years 1991, 1992 and 1993.                         

The restructuring was intended to enable the Stamford Property to generate      
sufficient cash flow to meet its operating expenses and debt service            
obligations through 1993 without utilizing the Partnership's working capital    
reserves in the hope that the Stamford real estate market would recover and     
that, as leases at the Property expired, the Partnership would be able to enter 
into new or renewal leases at rental rates in excess of the rates being paid by 
existing tenants under current leases.  However, the Stamford real estate       
market has continued to deteriorate resulting in a further erosion of market    
lease rates.  While the cash flow from the Stamford Property, together with the 
loans by Mendik Corporation and an affiliate of NYRES1 and the management fee   
deferrals by Mendik Realty, were sufficient to cover the Property's operating   
expenses and debt service obligations in 1993, due to a decline in the          
Property's revenue following the extension of D&B's lease, the Partnership      
failed to make full payment of debt service due on February 10, 1994 and March  
10, 1994 with respect to the Stamford Loan.  In order to preserve its limited   
working capital reserves, the Partnership currently does not intend to fund any 
operating shortfalls out of reserves.  As a result of the Partnership's failure 
to make these interest payments, the Partnership is in default under the terms  
of the Stamford Loan and the property's lender, New York Life Insurance Company 
("New York Life"), may elect to exercise its remedies under the loan agreement  
including accelerating the maturity date of the principal balance of the loan   
and electing to foreclose on its mortgage.  The General Partners are now        
seeking a short-term agreement from New York Life, pursuant to which New York   
Life would forbear from exercising its remedies under the Stamford Loan and     
Mendik Realty would continue to defer its management fees and leasing           
commissions with respect to the Property.  The Partnership would then attempt   
to sell the Property during the forbearance period.  However, in light of the   
fact that the appraised value of the Property at December 31, 1993 was less     
than the mortgage, and New York Life is unlikely to accept a pay off of its     
mortgage at a discount, it is unlikely that such a sale would result in any     
cash proceeds being available for distribution.  If the Partnership were unable 
to sell the Property and pay off the Stamford Loan within the forbearance       
period, the Partnership would transfer the deed in lieu of a foreclosure in     
order to provide an orderly and efficient transfer of title to the Property to  
New York Life.                                                                  

During the latter part of 1992, the General Partners concluded that the         
Partnership may be unable to hold the 34th Street Property and the Stamford     
Property on a long-term basis.  As a result, the Partnership determined to      
account for each Property as held for disposition.  Accordingly, as of December 
31, 1993, these Properties are being carried at the lower of their depreciated  
cost or estimated market value resulting in the Partnership's recording an      
unrealized loss of approximately $43.2 million in 1992 and an additional $4.2   
million loss in 1993.                                                           

Cash Reserves - The Partnership's consolidated cash reserves decreased by       
$82,686 to $10,346,684 at December 31, 1993 from $10,429,370 at December 31,    
1992.  During 1993, approximately $2.8 million was expended for property        
improvements at the Park Avenue and 34th Street Properties, and Saxon Woods     
Corporate Center.  These expenditures were offset by approximately $1.4 million 
in additional borrowings under the Saxon Woods Line of Credit and approximately 
$1.4 million of cash flow from operations which includes the release of the     
previously-restricted security deposit held by the 34th Street Property's       
unaffiliated ground lessor.  In addition to the cash reserves, at December 31,  
1993, the Partnership had $2,390,734 in restricted cash under various           
agreements including the FNBC lockbox required under the forbearance agreement. 
As a result of the additional borrowings under the Saxon Woods Line of Credit,  
mortgage notes payable increased from $105,654,502 at December 31, 1992 to      
$107,042,677 at December 31, 1993 on a consolidated basis.                      

Results of Operations                                                           

1993 vs. 1992                                                                   
During the year ended December 31, 1993, the Partnership realized               
operating income before non-cash expenses, on a consolidated basis, of          
approximately $1,541,000 as compared to operating income of approximately       
$2,454,000 for the corresponding period in 1992.                                

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As a result of the Partnership's decision to carry the 34th Street Property and 
Stamford Property at the lower of their depreciated cost or estimated market    
value, the Partnership recorded an unrealized loss on properties held for       
disposition of $4,240,608 and $43,166,559 for the years ended December 31, 1993 
and 1992, respectively.  Including the unrealized losses, the Partnership       
sustained a net loss after depreciation and amortization of $11,406,548 for the 
year ended December 31, 1993 as compared to $52,415,692, for 1992.  If the      
Partnership had not recorded the unrealized losses in 1993 and 1992, the        
Partnership would have recorded losses of $7,165,940 and $9,249,133 for the     
years ended December 31, 1993 and 1992, respectively.                           

Consolidated rental income for the year ended December 31, 1993 was $34,333,599 
as compared with $34,094,669 for the corresponding period in 1992.              
Consolidated rental income remained stable from 1992 to 1993 as the income from 
the new leases signed in the Saxon Woods Corporate Center offset a decline in   
rental income from the Two Park Avenue Property that resulted from leases being 
renewed at the lower market rental rates.  Consolidated interest income for     
1993 was $282,740 as compared to $342,409 for the corresponding period in 1992. 
The decline is due to lower interest rates earned on the Partnership's cash     
balance and the Partnership's maintaining a lower average cash balance during   
1993.                                                                           

Consolidated property operating expenses for 1993 increased slightly from 1992. 
Depreciation and amortization decreased in 1993 primarily due to the reduction  
in the carrying value of the 34th Street Property and Stamford Property         
effective December 31, 1992.  Interest expense increased slightly during 1993   
from the corresponding period in 1992 due to the increase in the principal      
balance outstanding under the Saxon Woods Line of Credit.                       

1992 vs. 1991                                                                   

During 1992, the Partnership realized operating income before non-cash          
expenses, on a consolidated basis, of  approximately $2,454,000 as compared to  
approximately $3,472,000 in 1991.                                               

As a result of the Partnership's decision to carry the 34th Street Property and 
Stamford Property at the lower of their cost or market value, the Partnership   
recorded an unrealized loss on properties held for disposition of $43,166,559.  
Including the unrealized loss,  the Partnership sustained a net loss after      
depreciation and amortization of $52,415,692 for the year ended December 31,    
1992.  If the Partnership had not recorded the unrealized loss, the Partnership 
would have recorded a net loss after depreciation and amortization of           
$9,249,133 for the year ended December 31, 1992 as compared to a net loss of    
$8,062,874 for the year ended December 31, 1991.                                

Consolidated rental income for the year ended December 31, 1992 decreased by    
approximately 5% or $1,612,082 from the year ended December 31, 1991 primarily  
as a result of a decline in occupancy at the Park Avenue Property.              
Consolidated interest income for the year ended December 31, 1992 decreased by  
$268,988 from the year ended December 31, 1991 due to lower interest rates      
earned on the Partnership's cash balance and the Partnership's maintaining a    
lower average cash balance during 1992.                                         

Consolidated property operating expenses for the year ended December 31, 1992   
were virtually unchanged from the year ended December 31, 1991.  It should be   
noted that although the annual ground lease rent for the 34th Street Property   
increased by $1 million, pursuant to the terms of the Property's ground lease,  
such increase was more than offset by reductions in property maintenance        
expenses at the four Properties.  Interest expense during 1992 was also         
virtually unchanged from 1991 due to a decrease in the interest rate on the     
34th Street Line of Credit which was offset by an increase in the principal     
balance outstanding under the Saxon Woods Line of Credit.  Consolidated general 
and administrative expenses decreased by $260,962 from 1991 to 1992 primarily   
due to reduced legal fees.                                                      

Item 8.  Financial Statements and Supplementary Data                            

See Index of the Consolidated Financial Statements and Financial Statement      
Schedules at Item 14, filed as part of this Report.                             

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

Not applicable.                                                                 

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PART III                                                                        

Item 10.  Directors and Executive Officers of the Registrant                    

The Partnership has no officers or directors.  Mendik Corporation and NYRES1,   
as General Partners, jointly manage and control the affairs of the Partnership  
and have general responsibility and authority in all matters affecting its      
business.                                                                       

Mendik Corporation                                                              

Mendik Corporation was incorporated under the laws of the State of New York on  
November 13, 1985.  All of the capital stock of Mendik Corporation is owned by  
Bernard H. Mendik.  Pursuant to Section 22(b) of the Partnership Agreement, Mr. 
Mendik has contributed to the capital of Mendik Corporation $2.5 million in the 
form of a demand promissory note, which represents the only substantial asset   
of Mendik Corporation.  Mr. Mendik has a net worth in excess of such amount.    
Mendik Corporation maintains its principal office at 330 Madison Avenue, New    
York, New York 10017.                                                           

The executive officers and sole director of Mendik Corporation (none of whom    
has a family relationship with another) are:                                    

Name                Age     Office                                      

Bernard H. Mendik   64      Chairman and Director                       
David R. Greenbaum  42      President                                   
Christopher G. Bonk 39      Senior Vice President and Treasurer         
Michael M. Downey   52      Senior Vice President                       
David L. Sims       47      Senior Vice President                       
Kevin R. Wang       36      Senior Vice President                       
John J. Silberstein 33      Senior Vice President and Secretary         

All officers and directors of Mendik Corporation, except for John J.            
Silberstein, have been officers or directors of the corporation since its       
incorporation in November 1985.  All officers of Mendik Corporation hold the    
same position in Mendik Realty.                                                 

Bernard H. Mendik has been an owner/manager and developer of office and         
commercial properties since 1957.  Mr. Mendik was named Chairman of Mendik      
Realty in 1990.  Prior to his appointment as Chairman, Mr. Mendik had served as 
President of Mendik Realty since 1978.                                          

David R. Greenbaum was appointed President of Mendik Realty in 1990.  Prior to  
his appointment as President, Mr. Greenbaum had served as Executive Vice        
President of Mendik Realty since 1982.                                          

Christopher G. Bonk has been with Mendik Realty since 1981, most recently as    
Senior Vice President and Treasurer.                                            

Michael M. Downey has been with Mendik Realty since 1978, most recently as      
Senior Vice President of Operations.                                            

David L. Sims has been with Mendik Realty since 1984, most recently as Senior   
Vice President of Leasing.                                                      

Kevin R. Wang has been with Mendik Realty since 1985, most recently as Senior   
Vice President of Leasing.                                                      

John J. Silberstein has been with Mendik Realty since 1989, most recently as    
Senior Vice President and Secretary.  Prior thereto, Mr. Silberstein had been   
associated with the law firm of Skadden, Arps, Slate, Meagher & Flom since      
1986.                                                                           

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NYRES1                                                                          

NYRES1 is a Delaware Corporation formed on September 9, 1985, and is an         
indirect wholly-owned subsidiary of Lehman Brothers, Inc. ("Lehman").           

On July 31, 1993, Shearson Lehman Brothers, Inc. ("Shearson") sold certain of   
its domestic retail brokerage and asset management businesses to Smith Barney,  
Harris Upham & Co. Incorporated ("Smith Barney").  Subsequent to the sale,      
Shearson changed its name to Lehman Brothers Inc.  The transaction did not      
affect the ownership of the Partnership or the General Partners.  However, the  
assets acquired by Smith Barney included the name "Hutton."  Consequently,      
effective October 22, 1993, Hutton Real Estate Services XV, Inc. changed its    
name to NY Real Estate Services 1 Inc. to delete any references to "Hutton."    

Pursuant to Section 22(b) of the Partnership Agreement, an affiliate of Lehman  
has contributed to the capital of NYRES1 $2.5 million in the form of a demand   
promissory note, which represents the only substantial asset of NYRES1.  Such   
affiliate has a net worth in excess of such amount.                             

Certain officers and directors of NYRES1 are now serving (or in the past have   
served) as officers or directors of entities which act as general partners of a 
number of real estate limited partnerships which have sought protection under   
the provisions of the Federal Bankruptcy Code.  The partnerships which have     
filed bankruptcy petitions own real estate which has been adversely affected by 
the economic conditions in the markets in which the real estate is located and, 
consequently, the partnerships sought the protection of the bankruptcy laws to  
protect the partnerships' assets from loss through foreclosure.                 

The executive officers and sole director of NYRES1 (none of whom has a family   
relationship with another) are:                                                 

Name                Age     Office                                      

Kenneth L. Zakin    46      Director and President                      
Mark Sawicki        31      Vice President and Chief Financial Officer  

Kenneth L. Zakin has been an officer of NYRES1 since 1989.  Mark Sawicki has    
been an officer of NYRES1 since October 1990.                                   

Kenneth L. Zakin is a Senior Vice President of Lehman and has held such title   
since November 1988.  He is currently a senior manager in Lehman's Capital      
Preservation and Restructuring ("CPR") Group and was formerly group head of the 
Commercial Property Division of Shearson Lehman Brothers' Direct Investment     
Management Group responsible for the management and restructuring of limited    
partnerships owning commercial properties throughout the United States.  From   
January 1985 through November 1988, Mr. Zakin was a Vice President of Shearson  
Lehman Brothers Inc.  Mr. Zakin is a member of the Bar of the State of New York 
and previously practiced as an attorney in New York City from 1973 to 1984      
specializing in the financing, acquisition, disposition, syndication and        
restructuring of real estate transactions.  Mr. Zakin is currently an associate 
member of the Urban Land Institute, a member of the New York District Council   
Advisory Services Committee, and is a Director of Lexington Corporate           
Properties, Inc.  He received a Juris Doctor degree from St. John's University  
School of Law in 1973 and a B.A. degree from Syracuse University in 1969.       

Mark Sawicki is a Vice President of Lehman and has been a member of the CPR     
Group since August 1988.  Mr. Sawicki has been involved in the management,      
restructuring, and administration of real estate limited partnerships and has   
assisted in the budgeting, auditing, and portfolio review of the CPR Group.     
Prior to joining Lehman, Mr. Sawicki was a Senior Credit Analyst with Republic  
National Bank of New York where he was responsible for the credit review of     
Middle Market and Fortune 500 companies.  Mr. Sawicki also worked in London     
with the accounting firm of Arthur Young as an auditor and as a junior          
consultant on a project for the National Health Service.  Mr. Sawicki received  
his Bachelor's degree in 1985 from New York University, College of Business and 
Public Administration, with a concentration in Finance.  He also completed the  
Diploma Program in Real Estate Investment Analysis at the Real Estate Institute 
of N.Y.U. in December 1991.                                                     

Item 11.  Executive Compensation                                                

Neither of the General Partners nor any of their officers or directors received 
any compensation from the Partnership.  See Item 13 below of this Report with   
respect to certain transactions of the General Partners and their affiliates    
with the Partnership.                                                           

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Item 12.  Security Ownership of Certain Beneficial Owners and Management        

As of March 30, 1994, no person was known by the Partnership to be the          
beneficial owner of more than five percent of the Units.                        

Set forth below is a chart indicating, as of March 30, 1994, the name and the   
amount and nature of beneficial ownership of Units held by the General Partners 
and officers and directors thereof.  Only those General Partners and officers   
and directors thereof which beneficially own any Units are listed.  No General  
Partner or any officer or director thereof, or the officers and directors of    
the General Partners as a group, beneficially owns in excess of 1% of the total 
number of Units outstanding.                                                    

Beneficial Ownership of Units                                                   

Name of Beneficial                                                      
Owner                               Number of Units Owned               

Bernard H. Mendik                   1,276 (1)                           
David R. Greenbaum                    485 (2)                           
Kevin R. Wang                          20 (3)                           
Christopher G. Bonk                    49                               
Michael M. Downey                      33                               
David L. Sims                          16                               
     -----
The General Partners and all                                            
officers and directors thereof                                          
as a group (10 persons)             1,879 (1)(2)(3)                     
     =====
_________________________                                                       

(1) Includes 1,027 Units owned by Mr. Mendik, 200 Units held in trust for Mr.   
Mendik's children and 49 Units owned by Mendik Realty.  Does not include 40     
Units owned by Mr. Mendik's wife, as to which he disclaims beneficial           
ownership.                                                                      

(2) Includes 285 Units owned by Mr. Greenbaum and 200 Units owned by Mr.        
Greenbaum's wife.                                                               

(3) Does not include four Units owned by Mr. Wang's wife, as to which he        
disclaims beneficial ownership.                                                 

Item 13.  Certain Business Relationships and Related Transactions               

As a result of the suspension of cash distributions, neither NYRES1 nor Mendik  
Corporation received Net Cash from Operations with respect to the year ended    
December 31, 1993.  $57,032.50 of the Partnership's net loss for the 1993       
fiscal year was allocated to each of NYRES1 and Mendik Corporation.  For a      
description of the shares of Net Cash From Operations and Sale or Refinancing   
Proceeds (as defined in the Partnership Agreement) and the allocation of items  
of income and loss to which the General Partners, the special limited partner,  
and the Investor Limited Partners are respectively entitled, see Note 4 of      
Notes to Consolidated Financial Statements.                                     

Pursuant to Section 12 of the Partnership Agreement, Mendik Realty has agreed   
to limit its payment of leasing commissions at any Property in any year to not  
more than 3% of the gross operating revenues of that Property in such year less 
leasing commissions paid to other brokers in connection with that Property in   
such year.  Any excess will be deferred but is payable only if and to the       
extent such limit is not exceeded in the year paid.  As of December 31, 1993,   
there was a contingent liability of approximately $316,337 to Mendik Realty as  
a result of leasing commissions earned in prior periods from the 34th Street    
Property and Park Avenue Property.  There is no such contingent liability with  
respect to any of the other Properties.  During 1993, the Partnership paid      
$454,373 to Mendik Realty, on a consolidated basis, in connection with leasing  
commissions earned in prior periods from the Park Avenue Property.              

TBC, a former affiliate of NYRES1, provides partnership accounting services and 
investor relations services to the Partnership.  In May 1993, TBC was sold to   
Mellon Bank Corporation and is no longer an affiliate of NYRES1.  During 1993,  
TBC earned from the Partnership $65,254 for such services and received          
reimbursement for out-of-pocket expenses of $981.                               

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B&B Park Avenue L.P., a limited partnership of which Mendik Corporation is a    
general partner, owns the remaining 40% interest in Two Park Company, the joint 
venture that owns the Park Avenue Property.                                     

Mendik Realty, an affiliate of Mendik Corporation, receives fees for the        
management of the Partnership's Properties and is reimbursed for the cost of    
on-site building management staff.  During 1993, Mendik Realty earned           
management fees of $700,725 from the Partnership and were reimbursed $527,019   
for the cost of on-site building management salaries.                           

During 1993, the General Partners or their affiliates made certain loans to the 
Partnership and Mendik Realty deferred certain management fees payable to it by 
the Partnership in connection with the Stamford Property and the 34th Street    
Property.  During 1994, Mendik Realty will continue to defer fees and leasing   
commissions in connection with the Stamford Property and 34th Street Property.  
See the information under the captions "Stamford Property" and "34th Street     
Property" in Item 2 of this Report.  See Note 8 of Notes to the Consolidated    
Financial Statements.                                                           

Building Management Service Corporation ("BMSC"), an affiliate of Mendik        
Corporation, performs cleaning and related services for the properties at cost. 
As of January 1, 1993, Guard Management Service Corporation ("GMSC"), an        
affiliate of Mendik Corporation, began providing security services at the Park  
Avenue Property and Saxon Woods Corporate Center, which services will be        
provided by GMSC at cost.  During 1993, GMSC and BMSC earned from the           
Partnership $4,581,196 for such services.                                       

See Note 8 of Notes to Consolidated Financial Statements for additional         
information concerning amounts paid or accrued to the General Partners and      
their affiliates during the years ended December 31, 1993, 1992 and 1991 and    
all balances unpaid at December 31, 1993.                                       

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PART IV                                                                         

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

(a) (1),(2) See page 20.                                                        

(3) See Index to Exhibits contained herein.                             

(b)     Reports on Form 8-K.                                                    

      No reports on Form 8-K were filed in the fourth quarter of fiscal year
1993.                                                                           

(c)     See Index to Exhibits contained herein.                                 

(d)     See page 20.                                                            

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INDEX TO EXHIBITS                                                               

Exhibit No.                                                             

3 (a) Amended and Restated Certificate and Agreement of Limited     
Partnership of the Partnership (included as Exhibit A to the Prospectus of      
Registrant dated April 7, 1986 included as Exhibit 28(b) to the 1986 Annual     
Report on Form 10-K of the Partnership and incorporated herein by reference     
thereto).                                                                       

   (b) Amendments to Amended and Restated Certificate and Agreement of
Limited Partnership of the Partnership (included as Exhibit A to the Prospectus 
Amendment of Registrant dated April 29, 1987 included as Exhibit 29(c) to the   
1989 Annual Report on Form 10-K of the Partnership and incorporated herein by   
reference thereto).                                                             

  10 (a) Form of Property Management Agreement between the Partnership and
Mendik Realty Company, Inc. (included as Exhibit 10(a) to Amendment No. 2 to    
the Registration Statement (Registration No. 33-01779) (the "Registration       
Statement") and incorporated herein by reference thereto).                      

 (b) James Felt Realty Services appraisal of the Stamford Property
(included as Exhibit 10(b) to the Registration Statement and incorporated       
herein by reference thereto).                                                   

  (c) Contract of Sale, dated June 25, 1985, between 1351 Washington
Blvd. Limited Partnership, Bernard H. Mendik and Hutton Real Estate Services    
XV, Inc. and related assignments (included as Exhibit 10(f) to Amendment No. 1  
to the Registration Statement and incorporated herein by reference thereto).    

       (d) Cushman & Wakefield, Inc. appraisal of Saxon Woods Corporate Center
(included as Exhibit 10(g) to Amendment No. 2 to the Registration Statement and 
incorporated herein by reference thereto).                                      

    (e) Copies of Ground Leases relating to Saxon Woods Corporate Center
(included as Exhibit 10(h) to Amendment No. 2 to the Registration Statement and 
incorporated herein by reference thereto).                                      

(f) Memorandum of Contract, dated December 24, 1985, between The
Prudential Insurance Company of America and 550/600 Mamaroneck Company relating 
to the acquisition of Saxon Woods Corporate Center (included as Exhibit 10(i)   
to Amendment No. 2 to the Registration Statement and incorporated by reference  
thereto).                                                                       

  (g) The Weitzman Group, Inc. appraisal of the 330 West 34th Street
property (included as Exhibit 10(j) to Post-Effective Amendment No. 2 to the    
Registration Statement and incorporated herein by reference thereto).           

       (h) Copy of Ground Lease relating to the 34th Street property (included
as Exhibit 10(k) to Post-Effective Amendment No. 1 to the Registration          
Statement and incorporated herein by reference thereto).                        

    (i) Agreement of Assignment of Contract of Sale, dated September 25,
1986, between 330 West 34th Street Associates and M/H 34th Street Associates    
(included as Exhibit 10(l) to Post-Effective Amendment No. 1 to the             
Registration Statement and incorporated herein by reference thereto).           

       (j) Agreement, dated December 5, 1986, between Park Fee Associates, The
Mendik Company, Chase Investors Management Corporation New York and M/H Two     
Park Associates relating to the acquisition of the Park Avenue Property         
(included as Exhibit 10(m) to Post-Effective Amendment No. 1 to the             
Registration Statement and incorporated by reference thereto).                  

    (k) James Felt Realty Services appraisal of the Park Avenue Property
(included as Exhibit 10(n) to Post-Effective Amendment No. 7 to the             
Registration Statement and incorporated herein by reference thereto).           

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Exhibit No.                                                                     

    (l) Exhibits (l) through (aa) to the Partnership's Form 10-K for the
fiscal year ended December 31, 1990 are incorporated herein by reference        
thereto.                                                                        

(m) Loan Agreement of $6,500,000 to Mendik Real Estate Limited  
Partnership from Friesch-Groningsche Hypotheekbank Realty Credit Corporation    
dated September 25, 1991 secured by the Saxon Woods Corporate Center (included  
as Exhibit 10(m) to the Partnership's Form 10-K for the fiscal year ended       
December 31, 1991 and incorporated herein by reference thereto).                

       (n) Appraisal of the 34th Street Property as of January 1992 by Cushman
& Wakefield, Inc. (included as Exhibit 10(n) to the Partnership's Form 10-K for 
the fiscal year ended December 31, 1991 and incorporated herein by reference    
thereto).                                                                       

     (o) Letter Opinion of Value of the Park Avenue Property as of January
1992 by Cushman & Wakefield, Inc. (included as Exhibit 10(o) to the             
Partnership's Form 10-K for the fiscal year ended December 31, 1991 and         
incorporated herein by reference thereto).                                      

       (p) Letter Opinion of Value of the Stamford Property as of January 1992
by Cushman & Wakefield, Inc. (included as Exhibit 10(p) to the Partnership's    
Form 10-K for the fiscal year ended December 31, 1991 and incorporated herein   
by reference thereto).                                                          

     (q) Letter Opinion of Value of the Saxon Woods Corporate Center as of
January 1992 by Cushman & Wakefield, Inc. (included as Exhibit 10(q) to the     
Partnership's Form 10-K for the fiscal year ended December 31, 1991 and         
incorporated herein by reference thereto).                                      

   (r) Modification effective January 1, 1991 of the $12,500,000 first
mortgage loan secured by the Stamford Property between New York Life Insurance  
Company and the Partnership (included as Exhibit 10(r) to the Partnership's     
Form 10-K for the fiscal year ended December 31, 1991 and incorporated herein   
by reference thereto).                                                          

 (s) Reimbursement Agreement dated as of January 1, 1991 among the
Partnership, Mendik Realty, Mendik Corporation and SLH Lending Corp. related to 
the deferral of management fees and loans made to the Partnership with respect  
to the Stamford Property (included as Exhibit 10(s) to the Partnership's Form   
10-K for the fiscal year ended December 31, 1991 and incorporated herein by     
reference thereto).                                                             

       (t) Agreement dated as of January 1, 1992 among the Partnership, Mendik
Realty, Mendik Corporation and SLH Lending Corp. (included as Exhibit 10(a) to  
the Partnership's Form 10-Q for the quarter ended June 30, 1992 and             
incorporated herein by reference thereto).                                      

       (u) Appraisal of the 34th Street Property as of January 1993 by Cushman
& Wakefield, Inc. (included as Exhibit 10(u) to the Partnership's Form 10-K for 
the fiscal year ended December 31, 1992 and incorporated herein by reference    
thereto).                                                                       

     (v) Letter Opinion of Value of the Park Avenue Property as of January
1993 by Cushman & Wakefield, Inc. (included as Exhibit 10(v) to the             
Partnership's Form 10-K for the fiscal year ended December 31, 1992 and         
incorporated herein by reference thereto).                                      

       (w) Letter Opinion of Value of the Stamford Property as of January 1993
by Cushman & Wakefield, Inc. (included as Exhibit 10(w) to the Partnership's    
Form 10-K for the fiscal year ended December 31, 1992 and incorporated herein   
by reference thereto).                                                          

     (x) Letter Opinion of Value of the Saxon Woods Corporate Center as of
January 1993 by Cushman & Wakefield, Inc. (included as Exhibit 10 (x) to the    
Partnership's Form 10-K for the fiscal year ended December 31, 1992 and         
incorporated herein by reference thereto).                                      

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Form 10-K - Item 14 (a) (1) and (2)                                             

MENDIK REAL ESTATE LIMITED PARTNERSHIP                                          

INDEX OF THE CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT          
SCHEDULES                                                                       

The following consolidated financial statements of Mendik Real Estate Limited   
Partnership and Consolidated Venture are included in Item 8:                    

Independent Auditors' Report                                F-1         

Consolidated Balance Sheets December 31, 1993 and 1992      F-2         

Consolidated Statements of Operations for the years                     
ended December 31, 1993, 1992 and 1991                      F-3         

Consolidated Statements of Changes in Partners'                         
Capital (Deficit) for the years ended December 31,                      
1993, 1992 and 1991                                         F-4         

Consolidated Statements of Cash Flows for the years                     
ended December 31, 1993, 1992 and 1991                      F-5         

Notes to Consolidated Financial Statements                  F-6         

Schedule XI - Real Estate and accumulated depreciation      F-20        

All other schedules for which provision is made in the applicable       
accounting regulations of the Securities and Exchange Commission have been      
omitted since (1) the information required is disclosed in the financial        
statements and the notes thereto; (2) the schedules are not required under the  
related instructions; or (3) the schedules are inapplicable.                    

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SIGNATURES                                                                      

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange  
Act of 1934, the Registrant has duly caused this report to be signed on its     
behalf by the undersigned, thereunto duly authorized.                           

MENDIK REAL ESTATE LIMITED PARTNERSHIP                                  

BY: Mendik Corporation General Partner                                  

Date:  March 30, 1994           BY:     s/David R. Greenbaum/                   
          Name:   David R. Greenbaum
 Title:  President

BY: NY Real Estate Services 1 Inc.  General Partner                     

Date:  March 30, 1994           BY:     s/Kenneth L. Zakin/                     
        Name:   Kenneth L. Zakin
              Title:  Director and President

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

NY REAL ESTATE SERVICES 1 INC.  A General Partner                       

Date:  March 30, 1994           BY:     s/Kenneth L. Zakin/                     
        Name:   Kenneth L. Zakin
              Title:  Director and President

Date:  March 30, 1994           BY:     s/Mark Sawicki/                         
    Name:   Mark Sawicki
          Title:  Vice President and
                       Chief Financial Officer

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

MENDIK CORPORATION A General Partner                                    

Date:  March 30, 1994           BY:     s/Bernard H. Mendik/                    
         Name:   Bernard H. Mendik
             Title:  Chairman and Director

Date:  March 30, 1994           BY:     s/David R. Greenbaum/                   
          Name:   David R. Greenbaum
 Title:  President

Date:  March 30, 1994           BY:     s/Christopher G. Bonk/                  
           Name:   Christopher G. Bonk
                           Title:  Senior Vice President and Treasurer

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Independent Auditors' Report                                                    

The Partners Mendik Real Estate Limited Partnership                             

We have audited the consolidated financial statements of Mendik Real Estate     
Limited Partnership and Consolidated Venture (a New York Limited Partnership)   
as listed in the accompanying index.  In connection with our audits of the      
consolidated financial statements, we also have audited the financial statement 
schedule as listed in the accompanying index.  These consolidated financial     
statements and financial statement schedule are the responsibility of the       
Partnership's management.  Our responsibility is to express an opinion on these 
consolidated financial statements and financial statement schedule based on our 
audits.                                                                         

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

In our opinion, the consolidated financial statements referred to above present 
fairly, in all material respects, the financial position of Mendik Real Estate  
Limited Partnership and Consolidated Venture at December 31, 1993 and 1992, and 
the results of their operations and their cash flows for each of the years in   
the three-year period ended December 31, 1993 in conformity with generally      
accepted accounting principles.  Also in our opinion, the related financial     
statement schedule, when considered in relation to the consolidated financial   
statements taken as a whole, presents fairly, in all material respects, the     
information set forth therein.                                                  

KPMG PEAT MARWICK                                                               

Boston, Massachusetts February 15, 1994                                         

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                                                                [Download Table]

Consolidated Balance Sheets                                                 
December 31, 1993 and 1992                                                  

Assets                                        1993             1992         
                                                                            
Real estate investments, at cost:                                           
    Land                                      $ 27,137,084     $ 27,137,084 
    Buildings and improvements                 200,255,154      199,950,071 

                                               227,392,238      227,087,155 
Less-accumulated depreciation                  (44,575,753)     (37,519,673)

                                               182,816,485      189,567,482 

Properties held for disposition                 18,950,000       23,000,000 

Cash and cash equivalents                       10,346,684       10,429,370 
Restricted cash                                  2,390,734        1,914,814 
Rents and other receivables (includes                                       
    deferred rent receivable of                                             
    $14,366,146 in 1993 and $13,636,701                                     
    in 1992)                                    15,162,790       15,443,756 
Prepaid expenses                                    26,861           26,861 
Other assets, net of accumulated                                            
    amortization of $5,035,517 in 1993                                      
    and $3,942,909 in 1992                       8,104,716        7,390,775 

        Total Assets                          $237,798,270     $247,773,058 


Liabilities and Partners' Capital                                           

Liabilities:                                                                
                                                                            
    Accounts payable and accrued expenses     $  1,335,734     $  1,899,711 
    Due to affiliates                            1,349,919          506,787 
    Security deposits payable                    1,007,873          567,635 
    Accrued interest payable                     2,090,609        1,050,428 
    Mortgage and notes payable                 107,042,677      105,654,502 
    Deferred interest payable                      798,777          722,986 

        Total Liabilities                      113,625,589      110,402,049 

Minority interest                               42,946,374       44,738,154 

Partners' Capital (Deficit):                                                
    General Partners                            (1,425,360)      (1,311,295)
    Special Limited Partner                       (471,998)        (471,998)
    Limited Partners                            83,123,665       94,416,148 

        Total Partners' Capital                 81,226,307       92,632,855 

        Total Liabilities and Partners'                                     
        Capital                               $237,798,270     $247,773,058 

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                                                                [Download Table]

Consolidated Statements of Operations                                        
For the years ended December 31, 1993, 1992 and 1991                         

Income                          1993            1992            1991         
                                                                             
Rent                            $ 34,333,599    $ 34,094,669    $ 35,706,751 
Interest                             282,740         342,409         611,397 

    Total Income                  34,616,339      34,437,078      36,318,148 

Expenses                                                                     
                                                                             
Property operating                22,408,960      21,426,266      21,936,330 
Depreciation and amortization     10,498,610      12,730,570      12,671,588 
Interest                          10,194,343      10,090,564      10,182,127 
General and administrative           472,146         466,505         727,467 
Unrealized loss on properties                                                
    held for disposition           4,240,608      43,166,559               - 

    Total Expenses                47,814,667      87,880,464      45,517,512 

Loss before minority interest    (13,198,328)    (53,443,386)     (9,199,364)
Minority interest in loss of                                                 
   consolidated venture            1,791,780       1,027,694       1,136,490 

    Net Loss                    $(11,406,548)   $(52,415,692)    $(8,062,874)

Net Loss Allocated:                                                          
                                                                             
To the General Partners         $   (114,065)   $   (524,156)    $   (80,629)
To the Limited Partners          (11,292,483)    (51,891,536)     (7,982,245)

                                $(11,406,548)   $(52,415,692)    $(8,062,874)

Per limited partnership unit                                                 
    (395,169) outstanding            $(28.58)       $(131.31)        $(20.20)

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Consolidated Statements of Partners' Capital (Deficit)                         

For the years ended December 31, 1993, 1992 and 1991                           

                                                      Special                  
                        Limited         General       Limited     Total        
                        Partners'       Partner's     Partner's   Partners'    
                        Capital         Deficit       Deficit     Capital      
                                                                               
Balance at                                                                     
December 31, 1990       $154,289,929    $(706,510)    $(471,998)  $153,111,421 
Net loss                  (7,982,245)     (80,629)            -     (8,062,874)

Balance at                                                                     
December 31, 1991        146,307,684     (787,139)     (471,998)   145,048,547 
Net loss                 (51,891,536)    (524,156)            -    (52,415,692)

Balance at                                                                     
December 31, 1992         94,416,148   (1,311,295)     (471,998)    92,632,855 
Net loss                 (11,292,483)    (114,065)            -    (11,406,548)

Balance at                                                                     
December 31, 1993       $ 83,123,665  $(1,425,360)    $(471,998)   $81,226,307 

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Consolidated Statements of Cash Flows                                       
For the years ended December 31, 1993, 1992 and 1991                        

Cash Flows from Operating                                                   
     Activities:                1993            1992            1991        
                                                                            
Net loss                        $(11,406,548)   $(52,415,692)   $(8,062,874)
Adjustments to reconcile                                                    
net loss to net cash provided                                               
by operating activities:                                                    
    Depreciation and                                                        
    amortization                  10,498,610      12,730,570     12,671,588 
    Minority interest in                                                    
    loss of consolidated                                                    
    venture                       (1,791,780)     (1,027,694)    (1,136,490)
    Unrealized loss on                                                      
    properties held for                                                     
    disposition                    4,240,608      43,166,559              - 
    Increase (decrease) in                                                  
    cash arising from changes                                               
    in operating assets and                                                 
    liabilities:                                                            
      Restricted cash               (475,920)        509,771       (624,318)
      Rent and other receivables     280,966      (1,014,255)      (815,277)
      Prepaid expenses                     -         333,021       (143,435)
      Other assets                (1,806,549)     (1,141,102)      (982,965)
      Accounts payable and                                                  
      accrued expenses              (563,977)         59,024     (1,092,048)
      Due to affiliates              843,132         196,493         80,914 
      Accrued interest payable     1,040,181         279,400         70,966 
      Security deposits payable      440,238         115,741        (35,160)
      Deferred interest payable       75,791          31,985        691,001 

Net cash provided by operating                                              
    activities                     1,374,752       1,823,821        621,902 

Cash Flows from Investing                                                   
Activities:                                                                 
                                                                            
    Additions to real estate                                                
    investments                   (2,845,613)     (3,408,765)    (3,498,245)

Net cash used for investing                                                 
activities                        (2,845,613)     (3,408,765)    (3,498,245)

Cash Flows from Financing Activities:                                       
                                                                            
    Minority interest -                                                     
    cash distribution                      -      (1,311,337)             - 
    Proceeds from mortgage note                                             
    payable                        1,388,175       2,598,075      3,056,427 

Net cash provided by                                                        
financing activities               1,388,175       1,286,738      3,056,427 

Net increase (decrease) in cash                                             
and cash equivalents                 (82,686)       (298,206)       180,084 
Cash and cash equivalents at                                                
beginning of period               10,429,370      10,727,576     10,547,492 

Cash and cash equivalents                                                   
at end of period                 $10,346,684     $10,429,370    $10,727,576 


Supplemental Disclosure of                                                  
Cash Flow Information:                                                      
                                                                            
Cash paid during the period                                                 
for interest                     $ 9,154,162     $ 9,779,179    $ 9,420,160 

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Notes to Consolidated Financial Statements                                      
December 31, 1993, 1992 and 1991                                                

1. Organization                                                                 

Mendik Real Estate Limited Partnership (the "Partnership") was organized as a   
limited partnership under the laws of the State of New York pursuant to a       
Certificate and Agreement of Limited Partnership dated and filed October 30,    
1985 (the "Partnership Agreement") and subsequently amended and restated on     
February 25, 1986. The Partnership was formed for the purpose of acquiring,     
maintaining and operating income producing commercial office buildings in the   
Greater New York Metropolitan Area. The general partners of the Partnership are 
Mendik Corporation and NYRES1 (See below). The Partnership will continue until  
December 31, 2025, unless sooner terminated in accordance with the terms of the 
Partnership Agreement. The Partnership offered Class A units to taxable         
investors and Class B units to tax exempt investors.                            

On July 31, 1993, Shearson Lehman Brothers Inc. sold certain of its domestic    
retail brokerage and asset management businesses to Smith Barney, Harris Upham  
& Co. Incorporated ("Smith Barney").  Subsequent to the sale, Shearson Lehman   
Brothers Inc. changed its name to Lehman Brothers Inc.  The transaction did not 
affect the ownership of the general partners.  However, the assets acquired by  
Smith Barney included the name "Hutton."  Consequently, effective October 22,   
1993, Hutton Real Estate Services XV, Inc., a general partner, changed its name 
to NY Real Estate Services 1 Inc. ("NYRES1") to delete any reference to         
"Hutton."                                                                       

2. Liquidity                                                                    

The commercial real estate market in the Greater New York Metropolitan Area     
remains weak.  As vacancy rates continue to rise, increased competition among   
landlords has led to lower rents and increasingly generous tenant concession    
packages in the form of tenant improvements and free-rent periods. The          
significant cost of tenant improvements required to be funded under both new    
and renewal leases has sharply increased the demand for capital by landlords,   
including the Partnership.  Expenditures for tenant improvements have           
contributed to the Partnership's reduced liquidity.  In order to conserve the   
Partnership's limited resources, the General Partners have pursued a strategy   
intended to position each of the Partnership's four properties, to the extent   
possible, to meet its operating and other expenses as they come due using only  
the operating income generated by that property, and if necessary, proceeds     
from borrowings secured by such property.                                       

During 1993, the Partnership funded operating costs, the cost of tenant         
improvements, leasing commissions and building capital improvements from five   
sources:  (i) positive cash flow generated by the approximately 60% joint       
venture interest in the Park Avenue Property and the Partnership's leasehold    
interest in the Saxon Woods Corporate Center, (ii) Partnership reserves, (iii)  
funds provided by certain unsecured loans and the deferral of property          
management fees by certain affiliates of the General Partners, (iv) additional  
borrowings from the $6.5 million Saxon Woods Line of Credit and (v) a portion   
of the $1.25 million security deposit maintained by the unaffiliated ground     
lessor for the 330 West 34th Street Property. It is expected that the           
availability of funds from some of these sources will be reduced in the future. 

Park Avenue Property - Although the Partnership has continued to lease space at 
the Property, with the continuing softness in the real estate market, new and   
renewal leases generally have been signed at rental rates significantly less    
than the rental rates received on certain expiring leases.  The Property's cash 
flow, however, is expected to remain stable for the foreseeable future because  
rental rate increases negotiated in leases signed in earlier years have offset  
the lower market rental rates reflected in the leases recently signed by the    
Partnership.                                                                    

At December 31, 1993, the unrestricted cash balance at the Property was         
approximately $5 million over and above a reserve for real estate taxes.  The   
Park Avenue Property currently generates, and is expected to generate in the    
future, sufficient revenue to cover operating expenses and debt service         
obligations.  The indebtedness secured by the Park Avenue Property currently    
matures in 1998 (or 1996 at the option of the lender).  The Partnership         
expects, as the maturity of the loan approaches, to commence negotiations to    
extend the existing loan or to seek refinancing.  However, as a result of the   
current lack of liquidity in the financial marketplace, no assurances can be    
made that the Partnership will be able to extend with the existing lender or    
refinance with a new lender, on terms acceptable to the Partnership or at all.  

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The property was 89% and 90% occupied at December 31, 1993 and 1992,            
respectively.                                                                   

Saxon Woods Corporate Center - The Partnership expects that cash flow from the  
Saxon Woods Corporate Center will cover operating expenses and debt service     
obligations in 1994.  Although the Saxon Woods Line of Credit is in the amount  
of up to $6.5 million, as a result of Section 13(d) (xviii) of the Partnership  
Agreement which prohibits the Partnership from incurring indebtedness secured   
by a Property in excess of 40% of the then-appraised value of such Property (or 
40% of the value of such Property as determined by the lender as of the date of 
financing or refinancing, if such value is lower) (the "Borrowing Limitation"), 
the Partnership is permitted to borrow only $6 million based upon the most      
recent appraisal of the Saxon Woods Corporate Center which as of December 31,   
1993 was $15 million.  The loan agreement provides that all available cash flow 
from the Saxon Woods Corporate Center will be used for expenses incurred at the 
Saxon Woods Corporate Center prior to borrowing additional funds under the      
Saxon Woods Line of Credit.  The General Partners expect that additional        
leasing activity, the costs of which will be partially funded by borrowing      
amounts remaining available under the Saxon Woods Line of Credit, may result in 
an increase in the appraised value of the Property thereby enabling the         
Partnership to borrow the additional amounts available under the Saxon Woods    
Line of Credit up to the full amount of $6.5 million.  There can be no          
assurance that future appraisals will reflect an increase in the Property's     
value which would enable the Partnership to borrow additional funds.  As of     
December 31, 1993, the Partnership had borrowed $4,542,677 under the Saxon      
Woods Line of Credit.  In January 1994 the Partnership borrowed an additional   
$138,000 and had made commitments to borrow an additional $362,000 which would  
increase the total borrowings on the Saxon Woods Line of Credit to $5,042,677.  

The indebtedness secured by the Saxon Woods Corporate Center currently matures  
in 1996.  The Partnership expects, as the maturity of the loan approaches, to   
commence negotiations to extend the existing loan or to seek refinancing.       
However, as a result of the current lack of liquidity in the financial          
marketplace, no assurances can be made that the Partnership will be able to     
extend with the existing lender or refinance with a new lender, on terms        
acceptable to the Partnership or at all.                                        

The property was 72% and 67% occupied at December 31, 1993 and 1992,            
respectively.                                                                   

34th Street Property - On February 17, 1993, the Partnership signed a long-term 
lease with the City of New York effective August 1, 1992 for approximately      
300,000 square feet in the 34th Street Property.  The terms of the lease call   
for the City to make annual base rental payments of approximately $5.4 million  
and pay its proportionate share of increases in real estate taxes and operating 
expenses.  Approximately $1.25 million is being spent by the Partnership for    
tenant improvements under the terms of the lease.  As of December 31, 1993      
virtually all of these funds have been spent.  In order to fund the tenant      
improvements required by the City lease, the Partnership negotiated an          
agreement with the unaffiliated ground lessor pursuant to which the ground      
lessor agreed to make available the $1.25 million that was being held as        
security under the ground lease.  The ground lessor also agreed to waive the    
lease requirement that the Partnership deposit an additional $1 million as      
security with the ground lessor in connection with the increase in the annual   
ground rent in 1992 to $2.25 million.                                           

In order to improve the 34th Street Property's cash flow, beginning in January  
1992, Mendik Realty Company, Inc. ("Mendik Realty"), an affiliate of Mendik     
Corporation, voluntarily agreed to defer its management fees of approximately   
$170,000 a year that would otherwise have been payable with respect to the 34th 
Street Property.  The Partnership's obligation to pay the management fees       
deferred by Mendik Realty, will be on a non-recourse basis to the Partnership   
and will bear interest at a rate per annum equal to the prime rate of Morgan    
Guaranty Trust Company of New York less 1.25%.  Principal and interest will be  
payable on December 31, 2025, or such earlier date on which the term of the     
Partnership terminates, subject to a mandatory prepayment from the net proceeds 
from the sale of any of the Properties, after repayment of all debt secured by  
the Property sold.  In addition, Mendik Realty agreed to defer its leasing      
commission in the amount of $153,182 with respect to the signing of the         
long-term lease with the City of New York and any further leasing commissions   
associated with additional leasing activity at the Property.  Both of these     
provisions will remain in effect pursuant to the terms of the forbearance       
agreement with The First National Bank of Chicago ("FNBC") (see below).         
Additionally, the forbearance agreement gives FNBC control of the property's    
cash flow by requiring the Partnership to maintain a lockbox at FNBC.  FNBC     
will approve all releases of funds from the lockbox.  As of December 31, 1993,  
approximately $1 million was on deposit in the lockbox account maintained by    
FNBC.                                                                           

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During 1992, the cash flow from the 34th Street Property did not cover its debt 
service obligations after payment of operating expenses, and it was not         
expected to meet its debt service obligations in 1993.  As a result, in order   
to conserve the Partnership's limited working capital reserves and induce FNBC, 
the Property's lender, to modify the mortgage's terms, the Partnership          
suspended its interest payments to FNBC beginning in September 1992.  On August 
12, 1993, the Partnership entered into a forbearance agreement which modified   
the terms of the 34th Street Line of Credit.  Pursuant to the forbearance       
agreement, FNBC agreed to forbear through June 30, 1994 from exercising its     
remedies under the loan agreement as a result of the Partnership's failure to   
pay interest.  The forbearance agreement will also allow the Partnership to pay 
off the 34th Street Line of Credit for $6.5 million, a substantial discount to  
the current outstanding balance, at any time through June 30, 1994.  As of      
December 31, 1993, there was $15 million of principal and approximately $1.3    
million of accrued interest outstanding on the 34th Street Line of Credit.      
Also through June 30, 1994, the Partnership will be permitted to make interest  
payments to FNBC only to the extent of available cash flow from the 34th Street 
Property.  Since the forbearance agreement went into effect, the Partnership    
has not made any interest payments to FNBC.  The General Partners are seeking   
to obtain either debt or equity financing even if such financing would entail   
the Partnership's transferring all or a portion of its interest in the Property 
to the party providing the financing.  In the event the Partnership obtains     
from a third party an offer to provide financing of less than the $6.5 million  
required by FNBC, the Partnership would explore with FNBC a pay off at a        
further discount.  As of December 31, 1993, the 34th Street Property's          
appraised value was $9.8 million.  Should the Partnership be unable to pay off  
the 34th Street Line of Credit by June 30, 1994, the forbearance agreement      
provides that the Partnership will assign its interest in the property and in   
the ground lease to the Property to FNBC, at FNBC's election, in lieu of        
foreclosure.  The forbearance agreement with FNBC provides the Partnership with 
an opportunity to pay off the 34th Street Line of Credit at a substantial       
discount while at the same time establishing a cost-effective means to ensure   
an orderly and efficient transfer of the Property to FNBC in the event the 34th 
Street Line of Credit cannot be paid off.  The Partnership has no assurances    
that it will be able to obtain the financing necessary to pay off the 34th      
Street Line of Credit and any such pay off will depend on numerous factors      
including general market conditions.  Chief among these is the fact that many   
traditional sources of real estate financing such as banks, insurance companies 
and pension funds have dramatically curtailed their investment in commercial    
office properties. Consequently, only a limited number of investors is likely   
to be available, further hampering the Partnership's ability to secure a        
refinancing.  Should the Partnership be unable to complete a refinancing, it    
might result in the loss of the Partnership's investment in the Property.       

The property was 64% and 50% occupied at December 31, 1993 and 1992,            
respectively.                                                                   

Stamford Property - The Partnership previously restructured the loan secured by 
the Stamford Property in 1991.  As part of the terms of the restructured loan,  
Mendik Corporation and an affiliate of NYRES1 loaned in each of 1991, 1992 and  
1993 $50,000 and $110,000, respectively, to the Partnership. The loans were     
required to be deposited in an escrow account and may be used only to pay costs 
and expenses related to the Stamford Property. Mendik Realty also agreed to     
defer its management fees of approximately $70,000 a year in connection with    
the Stamford Property in each of calendar years 1991, 1992 and 1993.            

The restructuring was intended to enable the Stamford Property to generate      
sufficient cash flow to meet its operating expenses and debt service            
obligations through 1993 without utilizing the Partnership's working capital    
reserves in the hope that the Stamford real estate market would recover and     
that, as leases at the Property expired, the Partnership would be able to enter 
into new or renewal leases at rental rates in excess of the rates being paid by 
existing tenants under current leases.  However, the Stamford real estate       
market has continued to deteriorate resulting in a further erosion of market    
lease rates.  While the cash flow from the Stamford Property, together with the 
loans by Mendik Corporation and an affiliate of NYRES1 and the management fee   
deferrals by Mendik Realty, were sufficient to cover the Property's operating   
expenses and debt service obligations in 1993, due to a decline in the          
Property's revenue following the extension of D&B Computing Services, Inc.'s    
("D&B") lease, the Partnership failed to make full payment of debt service due  
on February 10, 1994 and March 10, 1994 with respect to the Stamford Loan.  In  
order to preserve its limited working capital reserves, the Partnership         
currently does not intend to fund any operating shortfalls out of reserves.  As 
a result of the Partnership's failure to make these interest payments, the      
Partnership is in default under the terms of the Stamford Loan and the          
Property's lender, New York Life Insurance Company ("New York Life"), may elect 
to exercise its remedies under the loan agreement including accelerating the    
maturity date of the principal balance of the loan and electing to foreclose on 
its mortgage.  The General Partners are now seeking a short-term agreement from 
New York Life, pursuant to which New York Life would forbear from exercising    
its remedies under the Stamford Loan and Mendik                                 
<PAGE                                                                           
Realty would continue to defer its management fees and leasing commissions with 
respect to the Property.  The Partnership would then attempt to sell the        
Property during the forbearance period.  However, in light of the fact that the 
appraised value of the Property at December 31, 1993 was less than the          
mortgage, and New York Life is unlikely to accept a pay off of its mortgage at  
a discount, it is unlikely that such a sale would result in any cash proceeds   
being available for distribution.  If the Partnership were unable to sell the   
Property and pay off the Stamford Loan within the forbearance period, the       
Partnership would transfer the deed in lieu of a foreclosure in order to        
provide an orderly and efficient transfer of title to the Property to New York  
Life.                                                                           

In addition to discussions with the Property's lender, the General Partners     
continue to negotiate with ADP regarding a possible extension of the lease      
covering a portion of its 35,000 square feet, which expires in June 1994.  The  
General Partners have also engaged ADP's existing subtenants in negotiations    
regarding new leases.  In the first quarter of 1994, one of ADP's subtenants    
that occupies approximately 8,200 square feet is close to signing a lease to    
remain in the Property.  The signing of these leases will not improve the       
Property's cash flow and enable the Partnership to meet its debt service        
obligations.  The Partnership also continues efforts to lease space in the      
Property on an "as is" basis.                                                   

The property was 57% and 60% occupied at December 31, 1993 and 1992,            
respectively.                                                                   

3. Summary of Significant Accounting Policies                                   

Consolidation. The consolidated financial statements include the accounts of the
Partnership and of Two Park Company, a joint venture in which the Partnership   
owns an approximate 60% interest. The joint venture was formed to own and       
operate a commercial office building.  Intercompany accounts and transactions   
between the Partnership and the venture have been eliminated in consolidation.  

Real Estate Investments. Real estate investments which consist of buildings, are
recorded at cost, less accumulated depreciation. Cost includes the initial      
purchase price of the properties plus closing costs, acquisition and legal      
fees, and capital improvements. Depreciation of the buildings is computed using 
the straight-line method over an estimated useful life of 25 to 35 years.       
Depreciation of personal property is computed under the straight-line method    
over an estimated useful life ranging from 5 to 10 years. Tenant improvements   
are amortized over the respective lease terms.                                  

During the latter part of 1992 certain events occurred which caused the General 
Partners to conclude that the Partnership may be unable to hold the 34th Street 
and Stamford properties on a long term basis.  As a result, the Partnership     
determined to account for each of these properties as held for disposition.     
Accordingly, as of                                                              

December 31, 1993 and 1992, these properties were carried at the lower of their 
depreciated cost or estimated market value.                                     

Lease Revenue. Rental income is recognized as earned under the leases.          
Accordingly, as certain leases of the Partnership provide for tenant occupancy  
during periods for which no rent or reduced rent is due, the Partnership        
accrues rental income for the full period of occupancy on a straight-line basis 
over the related lease terms.                                                   

The Partnership has determined that all leases associated with the rental of    
space at the investment properties are operating leases.                        

Leasing Commissions. Leasing commissions are capitalized and amortized over the 
respective lease terms.                                                         

Income Taxes. The Partnership allocates all profits, losses and other taxable   
items to the individual partners. No provision for income taxes is made in the  
financial statements as the liabilities for such taxes are those of the         
partners rather than the Partnership.                                           

Cash and Cash Equivalents. For the purposes of the statements of cash flows,    
cash and cash equivalents consist of short-term, highly liquid investments      
which have maturities of three months or less from the date of issuance.        

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Net Loss Per Limited Partnership Unit. Net loss per limited partnership unit is 
based upon the limited partnership units outstanding during the year and the    
loss allocated to the limited partners in accordance with the terms of the      
Partnership Agreement.                                                          

4. The Partnership Agreement                                                    

The Partnership Agreement provides that the net cash from operations, as        
defined, for each fiscal year will be distributed on a quarterly basis, 99% to  
the limited partners and 1% to the general partners (as defined) until each     
limited partner has received an amount equal to an 8% annual preferred return.  
The net cash from operations will then be distributed, 99% to the special       
limited partner, Bernard H. Mendik, and 1% to Mendik Corporation until the      
special limited partner has received his special preferred return (as defined). 
Thereafter, net cash from operations will be distributed 85% to the limited     
partners, 14% to the special limited partner and 1% to the general partners.    

Net proceeds from sales or refinancing will be distributed first to the limited 
partners until each limited partner has received an 8% cumulative annual return 
(as defined) and then an additional amount equal to his adjusted capital        
contribution (as defined). Second, the net proceeds from sale or refinancing    
will be distributed 99% to the special limited partner and 1% to the Mendik     
Corporation until the special limited partner has received any shortfall on his 
special cumulative return (as defined). Third, the net proceeds will be         
distributed to the general partners until the general partners have received    
their deferred incentive shares (as defined).  Thereafter, net proceeds will be 
distributed 75% to the limited partners, 20.33% to the special limited partner  
and 4.67% to the general partners.                                              

Taxable income and all depreciation for any fiscal year shall be allocated in   
substantially the same manner as net cash from operations except that           
depreciation allocated to the limited partners will be allocated solely to the  
Class A units (for taxable investors). Tax losses for any fiscal year will      
generally be allocated to the limited partners and special limited partner to   
the extent of their positive capital accounts and then 99% to the limited       
partners and 1% to the general partners.                                        

5. Real Estate Investments                                                      

The major tenants described below represented 49% of the Partnership's rental   
income in 1993.  See Note 2 for leasing activity.                               

The Stamford Property. In 1985, the Partnership acquired the Stamford Property, 
a ten-story office building containing approximately 220,000 net rentable       
square feet (based on current standards of measurement) and an attached parking 
garage located on 1351 Washington Blvd. in Stamford, Connecticut. The purchase  
price of the property was $31,250,000. The property was appraised at $9,150,000 
at December 31, 1993 as compared to $10,600,000 at December 31, 1992.           

Major tenants at the Stamford Property are Electronic Information Systems which 
leases 25,846 square feet (12% of the total leasable area in the property)      
under a lease expiring March 31, 1998, D&B which leases 43,100 square feet (20% 
of the total leasable area in the property) under a lease expiring December 31, 
1993, Automatic Data Processing, Inc. ("ADP") which leases 34,700 square feet   
(16% of the total leasable area in the property) under a lease expiring June    
30, 1994 and Wyatt Company, Inc. which leases, but does not occupy, 17,000      
square feet (8% of the total leasable area in the property) under a lease       
expiring August 31, 1995. ADP has subleased approximately 69% of its space.     

The Saxon Woods Corporate Center. In 1986, the Partnership acquired Saxon Woods 
Corporate Center, two office buildings located in Harrison, New York containing 
an aggregate of approximately 237,000 net rentable square feet (based on        
current standards of measurement), from an affiliate of the Partnership.        

The property was purchased by the affiliate for the purpose of facilitating the 
acquisition by the Partnership. The purchase price of $21,282,805 was paid from 
the proceeds of the Partnership's offering and consisted of the purchase price  
to the affiliate plus the acquisition and closing costs and costs associated    
with carrying the property.                                                     

The buildings are situated on a 15.28 acre site which is subject to two ground  
leases, each of which terminates in September 2027 and provides the lessee with 
the option to renew for two 25-year periods and one 39-year period.             

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Each ground lease provides for an annual net rental of $170,000 with an         
increase of $20,000 every five years, commencing January 1996. The property was 
appraised at $15,000,000 at December 31, 1993 as compared to $14,000,000 at     
December 31, 1992.                                                              

Major tenants at the Saxon Woods Corporate Center are Commodity Quotations      
which leases 24,540 square feet (10% of the total leasable area) under leases   
expiring October 31, 2001 and October 31, 1998. Commodity Quotations has the    
option to cancel the lease expiring October 31, 2001 at the end of the seventh  
year, October 23, 1998.  Icon Capital Corp. leases 29,040 square feet (12% of   
the total leasable area) under a lease expiring November 30, 2004.  Commodity   
Quotations and Icon Capital Corp represented approximately 13% and 16%,         
respectively, of the property's rental income in 1993.                          

The 34th Street Property. In 1987, the Partnership acquired the 34th Street     
Property, an eighteen-story office building containing approximately 627,000    
net rentable square feet (based on current standards of measurement) from an    
affiliate of the Partnership. The building was purchased by the affiliate for   
the purpose of facilitating the acquisition by the Partnership. The purchase    
price of $35,611,400 consisted of the purchase price to the affiliate plus the  
acquisition and closing costs and costs associated with carrying the property.  
The building is situated on a 46,413 square foot site.                          

The parcel of land underlying the 34th Street Property is leased from an        
unaffiliated third party pursuant to a ground lease with an initial term ending 
on December 31, 1999 that provided for annual lease payments of $1.25 million   
through December 31, 1991 and requires annual lease payments of $2.25 million   
for the remaining eight years. The ground lease may be renewed at the option of 
the Partnership for successive terms of 21, 30, 30, 30 and 39 years at annual   
rentals, determined at the commencement of each renewal term, equal to 7% of    
the then-market value of the land considered as if vacant, unimproved and       
unencumbered, valued at the highest and best use under then-applicable zoning   
and other land use regulations as office, hotel or residential property, but in 
no event less than the higher of (i) $2.75 million or (ii) the base rent for    
any consecutive 12-month period during the then-preceding renewal term.  The    
property was appraised at $9,800,000 at December 31, 1993. The appraised value  
at December 31, 1992 was $12,500,000.                                           

The major tenant at the 34th Street property is the City which leases 300,000   
square feet (48% of the total leasable area in the property) under a lease      
expiring February 28, 2001.  The City has the option to terminate its lease     
without penalty effective anytime from March 31, 1993 to February 28, 2001      
provided that the City gives the Partnership one year's notice of its intent to 
terminate the lease. The City will also be required to pay the Partnership for  
certain improvement costs as defined in accordance with the terms of the lease  
agreement.  The City represented approximately 92% of the property's total      
revenue in 1993.                                                                

The Park Avenue Property. In 1987, the Partnership indirectly acquired from an  
affiliate an approximate 60% interest in a joint venture, Two Park Company,     
formed in 1986 for the purpose of acquiring and operating a parcel of land      
located at Two Park Avenue, New York, New York, together with the 28-story      
office building and related improvements located thereon containing             
approximately 956,000 net rentable square feet (based on current standards of   
measurement). The affiliate acquired such interest to facilitate the            
acquisition by the Partnership. Two Park Company acquired the Park Avenue       
Property in 1986 from an unaffiliated seller for approximately $151.5 million,  
$60 million of which was financed by a first mortgage loan. The Partnership     
acquired its interest by contributing $61,868,264 in cash, and assuming its     
share of the $60 million loan secured by a first mortgage on the property. The  
remaining approximate 40% interest in Two Park Company is owned by B & B Park   
Avenue L.P., an affiliate of Mendik Corporation. At December 31, 1993, the      
property was appraised at $115,000,000 ($125,000,000 at December 31, 1992), and 
the appraised value of the property net of the minority interest was            
$68,655,000 ($74,625,000 at December 31, 1992).                                 

Major tenants at Two Park Avenue are Times Mirror Magazines, Inc. and its       
affiliate Newsday, Inc. which lease 262,774 square feet (28% of total leasable  
area in the property) under two leases expiring June 30, 2004 and National      
Benefit Life Insurance Company which leases 99,800 square feet (11% of total    
leasable area in the property) under a lease expiring May 30, 1998.  Times      
Mirror Magazines, Inc. and its affiliate Newsday, Inc. and National Benefit     
Life Insurance Company represented 32% and 14%, respectively, of the property's 
total rental income in 1993.                                                    

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6. Mortgage and Notes Payable                                                   

The Partnership is currently only able to incur additional indebtedness secured 
by the Saxon Woods Property (See Note 2).                                       

The Stamford Property The $12,500,000 non-recourse first mortgage loan is for a 
term of ten years and accrues interest at the rate of 10% per annum through     
December 10, 1993 and 10.3% thereafter (See below) (the "Stamford Loan"). While 
the $12,500,000 principal amount outstanding currently exceeds the Borrowing    
Limitation, it did not exceed the Borrowing Limitation when the loan was        
incurred.  The loan was modified effective January 1, 1991. Prior to            
modification interest only was payable in monthly installments of $104,167      
through July 10, 1991. Thereafter, constant monthly installments in the amount  
of $113,625 were to be applied first to the payment of interest, then the       
balance to the reduction of principal through the maturity date, July 10, 1996, 
at which time the balance of principal and any accrued interest was to be due   
and payable.                                                                    

Under the terms of the loan modification one-half of the monthly interest       
payments due under the loan from January 10, 1991 to December 10, 1991 are      
deferred until July 10, 1996, the loan's maturity date, and bear interest at    
the rate of 10% per annum (collectively, the "Deferred Interest"). During the   
period from December 10, 1991 to December 10, 1993, monthly payments of         
interest only were due at the rate of 10% per annum on the principal balance of 
the note. In addition, principal amortization payments previously required to   
be paid commencing August 10, 1991 have been deferred until the maturity of the 
loan. Commencing December 10, 1993 through the maturity date of the loan,       
interest is payable on the principal balance of the loan and the Deferred       
Interest at the rate of 10.3% per annum. If the Partnership prepays the         
Deferred Interest in full, interest under the loan will be reduced to 10% per   
annum. Deferred interest payable at December 31, 1993 is $798,777.              

The loan modification requires that in each of calendar years 1991, 1992 and    
1993, (i) Mendik Corporation will lend the Partnership $50,000, (ii) an         
affiliate of NYRES1 will lend the Partnership $110,000, and (iii) Mendik Realty 
Company, Inc. will defer management fees of approximately $70,000 a year        
payable to it in connection with services performed at the Stamford Property.   

The loans by Mendik Corporation and the affiliate of NYRES1 are required to be  
deposited in an escrow account and may be used only to pay building improvement 
costs, lease-up costs and operating expenses related to the Stamford Property.  
Accordingly, as of December 31, 1993, $281,071 is being held as restricted cash 
with respect to these loans and fees.  The loans and management fee deferral by 
Mendik Corporation, Mendik Realty and the affiliate of NYRES1 are on a          
non-recourse basis and bear interest at the prime rate less 1.25%. Principal    
and interest is payable on December 31, 2025, or upon termination of the        
Partnership if earlier, subject to a mandatory prepayment from the net proceeds 
from the sale of any of the properties, after repayment of all debt secured by  
the property sold.                                                              

The Partnership failed to make full payment of debt service due on February 10, 
1994 and March 10, 1994 with respect to the Stamford Loan due to a decline in   
the property's revenue following the extension of D&B's lease.  As a result,    
the Partnership is in default under the terms of the Stamford Loan.  The        
General Partners are currently attempting to negotiate a further modification   
of the property's loan, however, no agreement has been reached to date.  It     
appears unlikely that such efforts will be successful.  Should the Partnership  
be unable to secure a loan modification, the lender may elect to exercise its   
remedies under the loan agreement including accelerating the maturity date of   
the principal balance of the loan.  Should title to the property ultimately be  
transferred to the lender, it would result in the loss of the Partnership's     
investment in the property.                                                     

The Saxon Woods Corporate Center. In September 1991, the Partnership            
established a non-recourse line of credit of $6,500,000 (the "Saxon Woods line  
of credit") secured by the Partnership's leasehold interest in the property     
located at 550/600 Mamaroneck Avenue, Harrison, New York (the "Saxon Woods      
Property"). The Saxon Woods line of credit has a term of five (5) years, is     
secured by a first leasehold mortgage on the Saxon Woods Property and generally 
bears interest at the rate of 2.5% per annum in excess of the London Interbank  
Offered Rate ("LIBOR"). The interest rate was 5.875% at December 31, 1993.  In  
addition, the Partnership is required to pay 1/2% per annum on the undrawn      
balance of the Saxon Woods line of credit. As additional security for the       
repayment of the Saxon Woods line of credit, the Partnership deposited $500,000 
with the lender, which deposit was used by the Partnership to pay operating     
expenses in connection with the Saxon Woods Property prior to borrowing any     
sums under the Saxon Woods line of credit for                                   

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operating expenses.  The Saxon Woods line of credit provides the partnership    
with a source of funds to pay for those improvements necessary to lease         
additional space at the property.  In order to reduce the need for additional   
borrowings under the Saxon Woods line of credit, the Partnership has agreed to  
use all available cash flow from the Saxon Woods Property (which cash flow has  
been pledged to the lender) for all expenses incurred at the Saxon Woods        
Property prior to borrowing any additional funds under the Saxon Woods line of  
credit.                                                                         

Based on the current appraised value of the Saxon Woods Property, only          
$6,000,000 of the Saxon Woods line of credit is available to the Partnership    
due to the Borrowing Limitation. The General Partners believe that the Saxon    
Woods line of credit will provide the Partnership with a source of funds which  
should be sufficient to pay for those improvements necessary to lease           
additional space at the property and anticipated operating shortfalls. As of    
December 31, 1993, the Partnership had borrowed $4,542,677 under the Saxon      
Woods line of credit. In January 1994, the Partnership borrowed an additional   
$138,000 and have made commitments to borrow an additional $362,000.  The       
General Partners expect that additional leasing activity, the costs of which    
will be covered by borrowings from the Saxon Woods Line of Credit, may result   
in a further increase in the appraised value of the property thereby enabling   
the Partnership to borrow the additional amounts available under the Saxon      
Woods Line of Credit up to the full amount of $6,500,000. The Partnership has   
the option to request an updated appraisal at any time; however, there can be   
no assurance that subsequent appraised values for the Property will continue to 
increase.                                                                       

The Park Avenue Property. The $60,000,000 first mortgage is for a term of       
twelve years and accrues interest at the rate of 9.75% per annum. Interest only 
is payable in monthly installments until the maturity date (December 19, 1998)  
at which time the full amount of principal and any accrued interest shall be    
due and payable. On June 15, 1989, Two Park Company placed a second mortgage on 
the Park Avenue Property in the amount of $10,000,000.  Interest only is        
payable in monthly installments at a rate of 10.791% through June 15, 1992 and  
thereafter at the rate of 10.625% through December 19, 1998 at which time the   
full amount of principal and any accrued interest shall be due and payable.     

On December 26, 1990, Two Park Company placed a third mortgage on the Park      
Avenue Property in the amount of $5,000,000. Interest only is payable in        
monthly installments at a rate of 11.5% through its maturity date of December   
19, 1998 at which time the full amount of principal and any accrued interest    
shall be due and payable.  The lender has the right to accelerate the maturity  
date of the first, second and third mortgage loans (collectively the "Park      
Avenue Loans") to a date not earlier than December 19, 1996 upon at least 180   
days prior notice.                                                              

The loans are being treated as one loan and at any time upon request of Two     
Park Company, the lender will combine and consolidate all of the loans to make  
a non-recourse first mortgage loan in the principal amount of $75,000,000.      
While the $75,000,000 principal outstanding currently exceeds the Borrowing     
Limitation, it did not exceed the Borrowing Limitation when the loans were      
incurred.                                                                       

The 34th Street Property. On December 12, 1989, the Partnership entered into a  
loan agreement with First National Bank of Chicago (the "Bank"). The loan       
provides for a $30,000,000 credit facility in the form of a first mortgage      
secured by the Partnership's leasehold interest on the 34th Street Property     
(the "34th Street line of credit"). The lender agreed to advance amounts under  
the credit facility up to 40% of the lesser of the appraised value of the 34th  
Street Property or the value thereof as determined by the lender. The credit    
facility matures on May 31, 1997 and provided the Partnership with the          
flexibility to draw funds at 110 basis points over Libor, or 110 basis points   
over the Bank's C.D. rate or at the Bank's prime rate.  If the net operating    
income (as defined) for the property is less than 115% of the projected debt    
service for the property for any six month period, the lender may increase the  
interest rate to 125 basis points over Libor or 125 basis points over the       
Bank's C.D. rate. As of December 31, 1993, the Partnership had $15,000,000      
outstanding under the credit facility at Libor plus 1.25% per annum. The rate   
was fixed at 6.4375% for the period from March 20, 1992 to March 18, 1993.  The 
interest rate for the period March 19, 1993 through December 31, 1993 was 6%    
(see below).                                                                    

Of the $30,000,000 maximum principal amount of the credit facility, up to       
$20,000,000 was permitted to be used by the Partnership for building            
improvements, tenant improvement allowances and leasing commissions relating to 
the 34th Street Property, as well as closing costs, interest reserves and       
mortgage recording tax reserves with respect to the                             

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credit facility. The remaining $10,000,000, substantially all of which had been 
advanced by March 1991, was unrestricted and was allowed to be used by the      
Partnership for any purpose.                                                    

As of December 31, 1992, $15,000,000 had been advanced under the 34th Street    
line of credit. As a result of the default on the loan (See Note 2) and the     
decline in the appraised value of the 34th Street Property, the Partnership is  
currently prevented from borrowing any additional funds. While the $15,000,000  
principal amount outstanding currently exceeds the Borrowing Limitation and the 
appraised value, it did not exceed the Borrowing Limitation when the loan was   
incurred.                                                                       

The Partnership suspended its interest payments to the lender beginning with    
the September 1992 payment. On August 12, 1993, the Partnership entered into a  
forbearance agreement which modified the terms of the 34th Street Line of       
Credit with The First National Bank of Chicago ("FNBC"), under which $15        
million of principal and approximately $1.3 million of accrued interest is      
outstanding at December 31, 1993.  Pursuant to the forbearance agreement, FNBC  
agreed to forbear through June 30, 1994 from exercising its remedies under the  
loan agreement as a result of the Partnership's failure to pay interest.        
Subject to the terms of the forbearance agreement, the Partnership will have    
the ability to pay off the 34th Street Line of Credit for $6.5 million, a       
substantial discount to the current outstanding balance, at any time through    
June 30, 1994.  Also through June 30, 1994, the Partnership will be permitted   
to make interest payments, based upon the Corporate Base Rate or the prime rate 
beginning March 19, 1993, to FNBC only to the extent of available cash flow     
from the 34th Street Property.  No interest payments have been made by the      
Partnership since entering into the forbearance agreement.  If the Partnership  
is not successful in obtaining the financing necessary to pay off the 34th      
Street Line of Credit by June 30, 1994, the Partnership has agreed to assign    
its interest in the property and in the ground lease to the Property to FNBC,   
at FNBC's election, in lieu of foreclosure.  This agreement provides the        
Partnership with an opportunity to pay off the 34th Street Line of Credit at a  
substantial discount while at the same time establishing a cost-effective means 
to ensure an orderly and efficient transfer of the Property to FNBC in the      
event the 34th Street Line of Credit cannot be paid off.  The Partnership has   
no assurances that it will be able to obtain the financing necessary to pay off 
the 34th Street Line of Credit and any such pay off will depend on numerous     
factors including general market conditions.  Should the Partnership be unable  
to complete a refinancing, it might result in the loss of the Partnership's     
investment in the Property.                                                     

The deferral of management fees and leasing commissions by Mendik Realty will   
remain in effect pursuant to the terms of the forbearance agreement.            
Additionally, the forbearance agreement gives FNBC control of the property's    
cash flow by requiring the Partnership to maintain a lockbox at FNBC.  FNBC     
will approve all releases of funds from the lockbox.  As of December 31, 1993,  
approximately $1 million was on deposit in the lockbox account maintained by    
FNBC.                                                                           

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                                                                [Download Table]

Mortgage and notes payable at December 31, 1993 and 1992 are summarized as  
follows:                                                                    

                                                1993            1992        
                                                                            
Secured by Stamford Property, bearing interest                              
at a blended rate of 10.017%. The loan is                                   
currently in default.                           $ 12,500,000    $ 12,500,000

Secured by Saxon Wood Corporate Center,                                     
bearing interest at a blended rateof 7.302%.       4,542,677       3,154,502

Secured by Park Avenue Property,                                            
bearing interest at a blended rate of 10.134%.    75,000,000      75,000,000

Secured by 34th Street Property, bearing                                    
interest at a blended rate of 6.269%. The                                   
loan is currently in default.                     15,000,000      15,000,000

                                                $107,042,677    $105,654,502
                                                                [Download Table]

The following summarizes the scheduled maturities of the Partnership's mortgage
and notes payable.  The mortgage and notes payable secured by the Stamford and 
34th Street properties are presented as maturing in 1994 due to their default  
status.                                                                        

    Year                        Amount                                         
                                                                               
    1994                        $ 27,500,000                                   
    1995                                   -                                   
    1996                           4,542,677                                   
    1997                                   -                                   
    1998                          75,000,000                                   

                                $107,042,677                                   

<FN>                                                                           
If the Park Avenue Lender were to exercise its option to accelerate the        
scheduled maturity date of its loans to the earliest possible permitted date,  
then the amounts due in 1996 in the above table would be $79,542,677.          

7. Rental Income Under Operating Leases                                         

                                                                [Download Table]

Based upon the leases currently in effect, future minimum rental income on    
non-cancelable operating leases of the Partnership's properties as of December
31, 1993 is as follows:                                                       

    Year                        Amount                                        
                                                                              
    1994                        $  29,691,825                                 
    1995                           29,421,385                                 
    1996                           28,592,083                                 
    1997                           27,339,953                                 
    1998                           24,167,816                                 
    Thereafter                     94,067,377                                 

                                 $233,280,439                                 

<FN>                                                                          
In addition to the minimum rental amounts, substantially all of the leases    
provide for escalation charges to tenants for operating costs, real estate    
taxes and electricity.  For the years ended December 31, 1993, 1992, and 1991,
these amounts were $3,524,411, $4,390,234, and $6,351,955, respectively, which
amounts are included in rental income.                                        

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8. Transactions With General Partners and Affiliates                            

                                                                [Download Table]

The following is a summary of the amounts paid or accrued to the general       
partners and their affiliates during the years ended December 31, 1993, 1992   
and 1991 and all balances unpaid at December 31, 1993:                         

                     Due To/From                                               
                     Affiliates                  Paid or Accrued               
                     at December 31, --------------------------------------    
                     1993            1993         1992          1991           
                                                                               
out of pocket                                                                  
expenses (1)         $         -     $       981  $     5,803   $   78,864     

administrative                                                                 
salaries and                                                                   
expenses and                                                                   
transfer agent                                                                 
fees (1) (2)              25,522          65,254       66,160      114,931     

management fees and                                                            
building personnel                                                             
salaries (3)             570,210       1,227,744    1,383,430    1,363,654     

cleaning and                                                                   
related services (4)(5)  (42,150)      4,166,977    3,607,725    3,686,434     

security (6)                   -         414,219            -            -     

leasing commissions (7)  316,337         770,710       61,932      153,325     

loans (8)                480,000               -            -            -     

                      $1,349,919      $6,645,885   $5,125,050   $5,397,208     
<FN>                                                                           
(1) The Boston Company ("TBC") provides accounting and investor communication  
functions to the Partnership.  TBC was a wholly owned subsidiary of Lehman     
Brothers Inc. until May of 1993 when it was acquired by Mellon Bank            
Corporation.  The Shareholder Services Group (a wholly owned subsidiary of     
American Express Company) provided transfer agent services through May 1991.   
Beginning in June 1991, these services are being provided by Service Data      
Corporation (a nonaffiliate).                                                  

(2) NYRES1, a general partner, is reimbursed for certain administrative        
salaries and expenses for services rendered in connection with maintaining     
Partnership operations.                                                        

(3) Mendik Realty, an affiliate of Mendik Corporation, receives fees for the   
management of the Partnership's Properties and is reimbursed for the cost of   
on-site building management staff. Salaries and benefits for building          
personnel, which has remained under the payroll of Mendik Realty, for the years
ended December 31, 1993, 1992 and 1991 totalled $527,019, $583,571 and         
$601,507, respectively.  Management fees paid or payable to Mendik Realty      
totalled $700,725, $799,859 and $762,147 for the years ended December 31, 1993,
1992 and 1991, respectively.  These amounts are included in the table.  Certain
management fees are being deferred as per the loan modifications discussed in  
Note 6.                                                                        

(4) Building Maintenance Service Corporation ("BMSC"), an affiliate of Mendik  
Corporation, performs cleaning and related services at the properties.  Such   
cleaning and related services are provided by BMSC at its cost.  Cleaning and  
related services payable to BMSC totalled $3,500,062, $2,910,428 and $3,068,973
for the years ended December 31, 1993, 1992 and 1991, respectively.  The       
indicated amounts above include salaries and benefits of the property          
engineering staff, which was transferred from the payroll of Mendik Realty to  
BMSC's payroll during the first quarter of 1992.  The salaries and benefits for
these employees were $584,942, $581,112 and $518,788 in 1993, 1992 and 1991,   
respectively.  These amounts are included in the table.  Included in the 1993  
amounts are certain amounts related to 1992 due to a difference between        
estimates and actual costs incurred for 1992.                                  

(5) BMSC provides metal and marble cleaning services to the Partnership at its 
cost, which were $81,973, $116,185 and $98,673 in 1993, 1992 and 1991,         
respectively. These amounts are included in the table.                         

(6) Effective January 1, 1993, Guard Maintenance Service Corporation ("GMSC"), 
an affiliate of Mendik Corporation, began providing security services to the   
Partnership at its cost, which in 1993 was $414,219.  This amount is included  
in the table.  Security services paid to unaffiliated third parties for the    
years ended December 31, 1993, 1992 and 1991 were $61,609, $545,365 and        
$543,112, respectively.  These amounts are not included in the table.          

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(7) Mendik Realty has agreed to limit the payment of its leasing commissions at
any Property in any year to not more than 3% of the gross operating revenues of
the Property in such year less leasing commissions paid to other brokers in    
connection with that property in such year.  Any excess will be deferred but is
payable only if and to the extent such limit is not exceeded in the year paid. 
During 1993, the Partnership paid $454,373 to Mendik Realty, on a consolidated 
basis, in connection with leasing commissions earned in prior periods from the 
Park Avenue Property.  As of December 31, 1993, there were deferred            
commissions, on a consolidated basis, of approximately $316,337 as a result of 
deferred leasing commissions from the 34th Street property and the Park Avenue 
property.  Certain leasing commissions are being deferred as per the loan      
modifications discussed in Note 6.                                             

(8) Mendik Corporation loaned the Partnership $150,000, and an affiliate of    
NYRES1 loaned the Partnership $330,000 pursuant to the Stamford loan           
modification discussed in Note 6.                                              

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                                                                [Download Table]

9. Reconciliation of Consolidated Financial Statement Net Loss and Partners'   
Capital to Federal Income Tax Basis Net Loss and Partners' Capital             

                                      Year ended December 31,                  
                                ---------------------------------------------- 
                                1993            1992            1991           
                                                                               
Financial statement                                                            
consolidated net loss           $11,406,548     $52,415,692     $ 8,062,874    

Financial statement write                                                      
down of real estate over                                                       
tax basis write down of                                                        
real estate                      (4,240,608)    (43,166,559)              -    

Tax basis depreciation over                                                    
(under) financial statement                                                    
depreciation                        971,960      (1,302,679)     (1,365,590)   

Tax basis rental income                                                        
(over) under financial                                                         
statement rental income             612,639         (63,668)        387,007    

Tax basis recognition of                                                       
loss of consolidated venture                                                   
over financial statement                                                       
recognition of loss of                                                         
consolidated venture                677,456         685,810       1,300,660    

Tax basis expenses over                                                        
(under) financial statement                                                    
expenses                            (14,086)         28,067          87,694    

Interest expense capitalized                                                   
for Federal income tax                                                         
purposes                            (38,850)        (76,561)       (617,356)   

Other                                57,584          21,569         (97,290)   

Federal income tax basis                                                       
net loss                        $ 9,432,643     $ 8,541,671      $7,757,999    


Reconciliation of financial statement partners' capital to federal income      
tax basis partners' capital:                                                   

                                      Year ended December 31,                  
                                -------------------------------------------    
                                1993            1992            1991           
                                                                               

Financial statement basis                                                      
partners'capital                $ 81,226,307    $ 92,632,855    $145,048,547   

Current year financial                                                         
statement net loss over                                                        
Federal income tax basis                                                       
net loss                           1,973,905      43,874,021         304,875   

Cumulative financial                                                           
statement net loss over                                                        
Federal income tax basis                                                       
net loss                          57,104,282      13,230,26      112,925,386   

Federal income tax basis                                                       
partners' capital               $140,304,494    $149,737,137    $158,278,808   

<FN>                                                                           
Because many types of transactions are susceptible to varying interpretations  
under Federal and state tax laws and regulations, the amounts reported above   
may be subject to change at a later date upon final determination by the taxing
authorities.                                                                   

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10. Supplementary Information                                                   

                                                                [Download Table]

Real estate taxes and maintenance and repairs included in property operating
expenses are as follows:                                                    

                                       Year ended December 31,              
                                ------------------------------------------  
                                1993            1992            1991        
                                                                            
    Maintenance and repairs     $1,843,145      $1,928,097      $1,510,354  

    Real estate taxes           $7,532,898      $7,685,349      $7,581,134  

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                                                        [Enlarge/Download Table]

MENDIK REAL ESTATE LIMITED PARTNERSHIP                                                                                             
(a New York limited partnership)                                                                                                   
and Consolidated Venture                                                                                                           
Schedule XI - Real Estate and Accumulated Depreciation                                                                             
December 31, 1993                                                                                                                  

                                          Cost                                                                                     
                                          Capitalized                                                                              
               Initial Cost               Subsequent To                          Gross Amount at Which                             
               To Partnership (A)         Acquisition                            Carried At Close Of Period (B)                    
               ------------------------   ---------------------                --------------------------------------              

                                          Buildings              Buildings                               Buildings                 
                                          And                    And           Write-down                And                       
Description    Encumbrances  Land         Improvements  Land     Improvements  Adjustment(C) Land        Improvements Total (2)    

Commercial                                                                                                                         
Properties:                                                                                                                        
Partnership                                                                                                                        
owned:                                                                                                                             
                                                                                                                                   
500/600                                                                                                                            
Mamaroneck                                                                                                                         
Avenue,                                                                                                                            
Harrison, NY   $ 4,542,677   $         -  $ 21,282,805  $     -  $ 8,891,588  $      -       $    -      $ 30,174,393  $ 30,174,393
Consolidated                                                                                                                       
Venture:                                                                                                                           
Two Park                                                                                                                           
Avenue                                                                                                                             
New York                                                                                                                           
City, NY        75,000,000    27,140,745   130,411,744   (3,661)  39,669,017         -         27,137,084  170,080,761  197,217,845

               $79,542,677   $27,140,745  $151,694,549  $(3,661) $48,560,605 $       -        $27,137,084 $200,255,154 $227,392,238
Properties                                                                                                                         
held for                                                                                                                           
disposition:                                                                                                                       
Partnership                                                                                                                        
owned:                                                                                                                             

1351                                                                                                                               
Washington                                                                                                                         
Blvd,                                                                                                                              
Stamford,                                                                                                                          
CT             $12,500,000   $2,740,707   $ 28,403,696  $44,468  $ 9,851,223 $(31,890,094)    $   621,285 $ 8,528,715  $  9,150,000

330 West                                                                                                                           
34th Street                                                                                                                        
New York                                                                                                                           
City, NY        15,000,000            -     35,611,400        -    9,211,091  (35,022,491)              -   9,800,000     9,800,000

               $27,500,000   $2,740,707   $ 64,015,096  $44,468  $19,062,314 $(66,912,585)    $   621,285  $18,328,715  $18,950,000


CONTINUED                                                Life on Which                                                             
                                                         Depreciation in                                                           
Commercial                                               Latest Income                                                             
Properties:                                              Statements                                                                
Partnership    Accumulated   Date of      Date Acquired  is                                                                        
owned:         Depreciation  Construction                computed                                                                  
                                                                                                                                   
500/600                                                                                                                            
Mamaroneck                                                                                                                         
Avenue,                                                                                                                            
Harrison, NY   $ 8,375,855   1969/1973    9/04/86       25 years                                                                   

Consolidated                                                                                                                       
Venture:                                                                                                                           
Two Park                                                                                                                           
Avenue                                                                                                                             
New York                                                                                                                           
City, NY       $36,199,898   1930         9/18/87       35 years                                                                   

               $44,575,753                                                                                                         

Commercial                                                                                                                         
Properties                                                                                                                         
held for                                                                                                                           
disposition:                                                                                                                       
Partnership                                                                                                                        
owned:                                                                                                                             
                                                                                                                                   
1351                                                                                                                               
Washington                                                                                                                         
Blvd,                                                                                                                              
Stamford,                                                                                                                          
CT             $         -    1971         11/01/85     25 years                                                                   

330 West                                                                                                                           
34th Street                                                                                                                        
New York                                                                                                                           
City, NY                 -    1925          4/23/87     25 years                                                                   

               $         -                                                                                                         

<FN>                                                                                                                               
(A)  The initial cost of the Partnership represents the original purchase price                                                    
of the properties, including amounts incurred subsequent to the acquisition                                                        
which were contemplated.  The initial cost included the purchase paid by the                                                       
Partnership and acquisition fees and expenses.                                                                                     

(B)  The aggregate costs of real estate at December 31, 1993 and 1992 for                                                          
Federal income tax purposes is $117,291,806 and $115,456,751, respectively.                                                        

(C)  During 1993 and 1992, the Partnership recognized a write-down in the book                                                     
values of the 1351 and 34th Street Properties totalling $4,240,608 and                                                             
$43,166,559, respectively.  The net book value adjusted for the write-down,                                                        
becomes the new carrying value for the property.                                                                                   

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MENDIK REAL ESTATE LIMITED PARTNERSHIP                                       

(a New York limited partnership)                                             
and Consolidated Venture                                                     
Schedule XI - Real Estate and Accumulated Depreciation (continued)           
December 31, 1993                                                            

A reconciliation of the carrying amount of real estate and accumulated       
depreciation for the years ended December 31, 1993, 1992 and 1991.           

Real Estate investments:                                                     
                                1993            1992            1991         
                                                                             
Beginning of year               $250,087,155    $308,743,581    $305,315,541 
Additions                          2,845,613       3,408,765       3,498,245 
Write-down adjustment             (5,404,498)    (61,508,087)              - 
Deletions                         (1,186,032)       (557,104)        (70,205)
End of year                     $246,342,238    $250,087,155    $308,743,581 

Accumulated Depreciation:                                                    
                                                                             
Beginning of year                $37,519,673     $44,749,922     $33,008,707 
Depreciation expense               9,406,002      11,668,383      11,811,420 
Write-down adjustment             (1,163,890)    (18,341,528)              - 
Deletions                         (1,186,032)       (557,104)        (70,205)
End of year                      $44,575,753     $37,519,673     $44,749,922 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		12/31/25		6		35
		11/30/04		34
		6/30/04		7		34
		12/31/03		5
		10/31/01		34
		2/28/01		6		34
		12/31/99		34
		12/19/98		36
		10/31/98		34
		10/23/98		34
		5/30/98		7		34
		3/31/98		33					10-Q,  NT 10-K,  NT 10-Q
		5/31/97		36
		12/19/96		36
		7/10/96		35
		8/31/95		33
		6/30/94		5		37			10-Q
Filed on:		3/31/94							10-Q
		3/30/94		16		24
		3/28/94		1
		3/10/94		4		35
		2/28/94		4		7
		2/15/94		25
		2/10/94		4		35
		1/1/94		5
For Period End:		12/31/93		1		44
		12/10/93		35
		10/22/93		15		30
		8/12/93		6		37
		7/31/93		15		30
		7/1/93		6
		3/31/93		34
		3/19/93		36		37
		3/18/93		36
		2/28/93		4		7
		2/17/93		6		31
		1/1/93		6		39
		12/31/92		3		44
		8/1/92		6		31
		6/30/92		20
		6/15/92		36
		3/20/92		36
		2/28/92		4		7
		1/1/92		5		20
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