CARLYLE REAL ESTATE LTD PARTNERSHIP XIII - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

For the fiscal year
ended December 31, 2002 Commission File Number 0-12791

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

Illinois 36-3207212
(State of organization) (I.R.S. Employer Identification No.)

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

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

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

Name of each exchange on
Title of each class which registered
- ------------------- ------------------------------

None None

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

LIMITED PARTNERSHIP INTERESTS
(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 (the "Act") during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule WP-2 of the Act). Yes [ ] No [ X ]

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the
common equity was last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrant's most
recently completed second fiscal quarter. Not applicable.

Documents incorporated by reference: None

TABLE OF CONTENTS

Page
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PART I

Item 1. Business . . . . . . . . . . . . . . . . . . 1

Item 2. Properties . . . . . . . . . . . . . . . . . 11

Item 3. Legal Proceedings. . . . . . . . . . . . . . 11

Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . 11

PART II

Item 5. Market for the Partnership's Limited
Partnership Interests and Related
Security Holder Matters. . . . . . . . . . . 12

Item 6. Selected Financial Data. . . . . . . . . . . 13

Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . 15

Item 7A. Quantitative and Qualitative Disclosures
about Market Risk. . . . . . . . . . . . . . 20

Item 8. Financial Statements and
Supplementary Data . . . . . . . . . . . . . 21

Item 9. Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure . . . . . . . . . . 37

PART III

Item 10. Directors and Executive Officers . . . . . . 37

Item 11. Executive Compensation . . . . . . . . . . . 40

Item 12. Security Ownership of Certain
Beneficial Owners and Management
and Related Security Holder Matters. . . . . 41

Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . 42

Item 14. Controls and Procedures. . . . . . . . . . . 42

PART IV

Item 15. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . 43

SIGNATURES and CERTIFICATIONS . . . . . . . . . . . . . . 45

i

PART I

ITEM 1. BUSINESS

Unless otherwise indicated, all references to "Notes" are to Notes to
Financial Statements contained in this report. Capitalized terms used
herein, but not defined, have the same meanings as used in the Notes.

The registrant, Carlyle Real Estate Limited Partnership-XIII (the
"Partnership"), is a limited partnership formed in late 1982 and currently
governed by the Revised Uniform Limited Partnership Act of the State of
Illinois to invest in improved income-producing commercial and residential
real property. The Partnership sold 366,177.57 limited partnership
interests (the "Interests") at $1,000 per Interest commencing on June 9,
1983, pursuant to a Registration Statement on Form S-11 under the
Securities Act of 1933 (Registration No. 2-81125 and No. 2-87033). The
offering closed on May 22, 1984. No holder of Interests (hereinafter,
"Holder" or "Holder of Interests") has made any additional capital
contribution after such date. The Holders of Interests share in their
portion of the benefits of ownership of the Partnership's real property
investments according to the number of Interests held.

The Partnership has been engaged solely in the business of the
acquisition, operation and sale and disposition of equity real estate
investments. The Partnership invested in income-producing residential and
commercial properties that were rented or leased to various tenants. These
real property investments consisted of office buildings, shopping centers,
apartment buildings and a mixed use complex. Such real estate investments
have been held by fee title, leasehold estates and/or through joint venture
partnership interests. The Partnership's real estate investments were
located throughout the nation and it had no real estate investments located
outside of the United States. A presentation of information about industry
segments, geographic regions, raw materials or seasonality is not
applicable and would not be material to an understanding of the
Partnership's business taken as a whole. The names, locations and certain
other information concerning the Partnership's real property investments is
provided in the table below.

Pursuant to the Partnership Agreement, the Partnership is required to
terminate no later than December 31, 2033. The Partnership is self-
liquidating in nature. At sale of a particular property, the net proceeds,
if any, are generally distributed or reinvested in existing properties
rather than invested in acquiring additional properties. The Partnership
commenced selling or otherwise disposing of its real property investments
in late 1989 and continued during the 1990's, so that through 1997 the
Partnership had sold or otherwise disposed of 19 of its real property
investments. During 1998, the Partnership sold its partnership interest in
the Carrollwood Station Apartments, a 336-unit garden apartment complex,
and transferred title to its interest in the Long Beach Plaza, a shopping
center in which the Partnership owned approximately 559,000 square feet of
space, in consideration of a discharge from the mortgage loan securing that
property. By the end of 1998, the Partnership had sold or disposed of all
but two of its real property investments. These last two real property
investments consisted of an interest in 1290 Avenue of the Americas and 237
Park Avenue, both of which are office buildings located in New York, New
York. These two properties, together with another New York office
building, 2 Broadway, originally were owned by joint ventures in which
affiliates (the "Olympia and York affiliates") of Olympia & York
Development, Ltd. ("O&Y") were joint venture partners. As described below,
the Partnership's interests in 1290 Avenue of the Americas and 237 Park
Avenue, which were owned through various joint venture partnerships,
including JMB/NYC Office Building Associates, L.P. ("JMB/NYC"), were sold
in March 2001 and January 2002, respectively.

JMB/NYC was a limited partnership among Carlyle-XIII Associates, L.P.,

and its affiliates, Carlyle-XIV Associates, L.P. and Property Partners,
L.P., as limited partners and Carlyle Managers, Inc. as the sole general
partner. The Partnership was a 25% shareholder of Carlyle Managers, Inc.
and held, indirectly as a limited partner of Carlyle-XIII Associates, L.P.,
an approximate 25% limited partnership interest in JMB/NYC. The sole
general partner of Carlyle-XIII Associates, L.P. was Carlyle Investors,
Inc., of which the Partnership was a 25% shareholder. The general partner
in each of JMB/NYC and Carlyle-XIII Associates, L.P. was an affiliate of
the Partnership. JMB/NYC, Carlyle-III Associates, L.P., Carlyle Managers,
Inc. and Carlyle Investors, Inc. were dissolved in September and October
2002.

In October 1994, the Partnership together with two other partnerships
sponsored by JMB Realty Corporation (collectively, the "Affiliated
Partners"), through JMB/NYC, entered into an agreement (the "Agreement")
with the Olympia & York affiliates who were the venture partners in the
joint ventures (the "Joint Ventures") that owned the 237 Park Avenue, 1290
Avenue of the Americas and 2 Broadway Buildings, to resolve certain
disputes among the Affiliated Partners and the Olympia & York affiliates.
In general, the parties agreed to: (i) restructure the first mortgage loan
secured by the properties; (ii) sell the 2 Broadway Building; (iii) reduce
or eliminate approval rights of JMB/NYC with respect to virtually all
property management, leasing, sale or refinancing of the properties; (iv)
amend the Joint Ventures' agreements to eliminate any funding obligations
by JMB/NYC and (v) establish a new preferential cash distribution level for
the Olympia & York affiliates. In accordance with the Agreement and in
anticipation of the sale of the 2 Broadway Building, the unpaid first
mortgage indebtedness previously allocated to the 2 Broadway Building was
allocated in 1994 to the 237 Park Avenue and 1290 Avenue of the Americas
Buildings.

As part of the Agreement, JMB/NYC and the Olympia & York affiliates
agreed to file a pre-arranged bankruptcy plan for reorganization under
Chapter 11 of the Bankruptcy Code in order to facilitate the restructuring
of the Joint Ventures between JMB/NYC and the Olympia & York affiliates and
the debt encumbering the two properties remaining after the sale of 2
Broadway. In June 1995, the 2 Broadway Joint Venture filed its
pre-arranged bankruptcy plans for reorganization, and in August 1995, the
bankruptcy court entered an order confirming its plans of reorganization.
In September 1995, the sale of the 2 Broadway Building was completed. Such
sale did not result in any distributable proceeds to JMB/NYC or the Olympia

York affiliates.

Bankruptcy filings for the Joint Ventures owning the 237 Park Avenue
and 1290 Avenue of the Americas properties were made in April 1996, and in
August 1996, an Amended Plan of Reorganization and Disclosure Statement
(the "Plan") was filed with the Bankruptcy Court for these Joint Ventures.
The Plan was accepted by the various classes of debt and equity holders and
confirmed by the Court on September 20, 1996 and became effective
October 10, 1996 ("Effective Date").

The Plan provided that JMB/NYC had an indirect limited partnership
interest which, before taking into account significant preferences to other
partners, equaled approximately 4.9% of the reorganized and restructured
ventures owning 237 Park and 1290 Avenue of the Americas (the
"Properties"). Neither O&Y nor any of its affiliates retained any direct
or indirect continuing interest in the Properties. The new ownership
structure gave control of the Properties to an unaffiliated real estate
investment trust ("REIT") owned primarily by holders of the first mortgage
debt that encumbered the Properties prior to the bankruptcy. JMB/NYC had,
under certain limited circumstances, through January 1, 2001, rights of
consent regarding sale of the Properties or the consummation of certain
other transactions that would have significantly reduced indebtedness of
the Properties. In general, at any time on or after January 2, 2001, an
affiliate of the REIT had the right to purchase JMB/NYC's interest in the
Properties for an amount based on a formula relating to the operations of
the Properties (the "Formula Price").

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

Pursuant to an indemnification agreement, the Affiliated Partners were
jointly and severally obligated to indemnify the REIT to the extent of $25
million to ensure their compliance with the terms and conditions relating
to JMB/NYC's indirect limited partnership interests in the restructured and
reorganized joint ventures that owned the Properties. The Affiliated
Partners contributed approximately $7,800,000 (of which the Partnership's
share was approximately $1,900,000) to JMB/NYC, which was deposited into an
escrow account as collateral for such indemnification. These funds were
invested in stripped U.S. Government obligations with a maturity date of
February 15, 2001. Subsequent to that date, the remaining escrowed funds
were invested in short-term U.S. Government obligations. Due to the
Restructuring discussed below, during 1999 the maximum potential obligation
was reduced to $14,285,000 and a portion of the collateral (approximately
$4,460,000 in face amount) was released in 1999 to JMB/NYC. On March 23,
2001, JMB/NYC's indirect interest in the 1290 Partnership was sold, and as
a result, the indemnification obligation was terminated and the remaining
collateral (approximately $5,700,000 face amount of which the Partnership's
share was approximately $1,436,000) was released in March 2001 to JMB/NYC.
The Partnership's share of the reduction of the maximum unfunded obligation
under the indemnification agreement recognized as income during the years
1999, 2000 and 2001 was a result of (i) interest earned on amounts
contributed by the Partnership and held in escrow by JMB/NYC, (ii) the
Partnership's share of the agreed upon reduction of the maximum obligation
in November 1999 in connection with the Restructuring discussed below, and
(iii) the Partnership's share of the remaining indemnification obligation
that was released in March 2001 in connection with the sale of JMB/NYC's
indirect interest in the 1290 Partnership. Interest income earned reduced
the Partnership's share of the maximum unfunded obligation under the
indemnification agreement, which had been reflected as a liability.

In November 1999, JMB/NYC closed a transaction (the "Restructuring")
pursuant to which, among other things, JMB/NYC's interests in 237 Park
Avenue ("237 Park") and 1290 Avenue of the Americas ("1290 Avenue of the
Americas") were restructured. Under the Restructuring, the partnership
that owned 237 Park was converted to a limited liability company ("237 Park
LLC"). The membership interest in 237 Park LLC owned by 237/1290 Upper
Tier Associates, L.P. (the "Upper Tier Partnership"), in which JMB/NYC was
a limited partner with a 99% interest, was contributed to a partnership
(the "237 Partnership") that acquired the other membership interests in 237
Park LLC from the REIT and one of its affiliates. In exchange for its
interest in 237 Park LLC, the Upper Tier Partnership received a limited
partnership interest in the 237 Partnership having a fair market value
(determined in accordance with the partnership agreement of the 237
Partnership) of approximately $500,000. (JMB/NYC's total investment in the
237 Partnership was significantly less than 1% of the 237 Partnership.)
The 237 Partnership owned a portfolio of investments in addition to 237
Park. JMB/NYC had the right, during the month of July of each calendar
year commencing with 2001, to cause a sale of the interest in the 237
Partnership for a price equal to the greater of the fair market value of
such interest (determined in accordance with the partnership agreement of
the 237 Partnership) and a specified amount, of which JMB/NYC's share would
be $500,000. JMB/NYC elected not to exercise its right to cause a sale of
its interest in the 237 Partnership during July 2001. In addition, the
general partner of the 237 Partnership had the right, during the month of
January of each calendar year commencing with 2002, to purchase the
interest in the 237 Partnership for a price equal to the greater of the
fair market value of such interest (determined as described above) and a
specified amount, of which JMB/NYC's share would be $650,000. In January
2002, the general partner of the 237 Partnership exercised its right to
acquire JMB/NYC's indirect interest in the 237 Partnership and JMB/NYC
received $650,000 in sale proceeds. Such amount was paid to the limited
partners of JMB/NYC as holders of a tranche of the Purchase Note as
discussed below. The Partnership received its share of sale proceeds,
approximately $159,000, in March 2002.

Due to the January 2002 sale of the Partnership's indirect interest in
the 237 Partnership, which was the Partnership's last investment property,
the distributions received in excess of recorded investment of $661,228
were reduced to zero and included as part of the gain on sale in 2002. The

distributions received in excess of recorded investment were created by the
1999 retirement of the Partnership's obligations to fund, on demand,
$200,000 and $200,000 to Carlyle Investors, Inc. and Carlyle Managers,
Inc., respectively, of additional paid-in capital. Such obligations when
retired included accrued but unpaid interest. The Partnership recognized
approximately $824,000 and $47,698,000 of gain for financial reporting and
Federal income tax purposes, respectively, during 2002 as a result of the
sale of the Partnership's indirect interest in the 237 Partnership.

JMB/NYC's indirect interest through the Upper Tier Partnership in the
partnership (the "1290 Partnership") that owned 1290 Avenue of the Americas
was also modified, although the REIT continued to own the controlling
interest in the property. In general, the REIT had the right to sell 1290
Avenue of the Americas or engage in certain other transactions during the
period January 1, 2000 through February 28, 2001, provided that JMB/NYC
received the greater of (i) an amount based on a formula relating to the
operations of the property (the "1290 Formula Price") and (ii) $4,500,000.
No such transaction occurred during that period. An affiliate of the REIT
also had the right, during the month of March of each calendar year
commencing with 2001, to purchase JMB/NYC's indirect interest in the 1290
Partnership for the greater of (x) the 1290 Formula Price and (y)
$1,400,000. On March 2, 2001, JMB/NYC was notified that an affiliate of
the REIT intended to exercise its right to purchase JMB/NYC's indirect
interest in the 1290 Partnership and on March 23, 2001, the sale was
completed and JMB/NYC received approximately $1,400,000 at closing (of
which the Partnership's share was approximately $340,000). Such amount was
paid in May of 2001 to the limited partners of JMB/NYC as holders of a
tranche of the Purchase Note as discussed below. In addition, JMB/NYC
received the remaining collateral (approximately $5,700,000, of which the
Partnership's share was approximately $1,436,000) held pursuant to the
indemnification agreement, including interest earned thereon, upon closing
of the sale of its interest in the 1290 Partnership. The Partnership
recognized approximately $343,000 and $31,700,000 of gain for financial
reporting and Federal income tax purposes, respectively, during 2001 as a
result of the sale of the Partnership's indirect interest in the 1290
Partnership. The Partnership received its share of the sale proceeds and
collateral amount in May 2001.

A portion of the purchase price for JMB/NYC's indirect interests in
the 1290 Avenue of the Americas and 237 Park Avenue office buildings was
represented by a certain promissory note (the "Purchase Note") bearing
interest at 12-3/4% per annum. The Purchase Note was secured by JMB/NYC's
indirect interests in the 237 Partnership (prior to its sale in January
2002) and the 1290 Partnership (prior to its sale in March 2001) owned
through the Upper Tier Partnership and was non-recourse to JMB/NYC. The
Purchase Note required payment of principal and interest out of
distributions made to JMB/NYC from the 1290 Partnership and the 237
Partnership and proceeds from sales of JMB/NYC's indirect interests in
those partnerships. Unpaid interest on the Purchase Note accrued and was
deferred, compounded monthly. Unpaid principal and interest were due at
maturity on January 2, 2001. As expected, JMB/NYC did not have funds to
pay the Purchase Note at its maturity. The limited partners of JMB/NYC, as
creditors, and the holder of the Purchase Note agreed to certain steps if
the Purchase Note were not repaid within one year of its maturity as
discussed below. For financial reporting purposes, the outstanding
principal and accrued and deferred interest on the Purchase Note at the
date of debt extinguishment and final liquidation and termination of
JMB/NYC, September 30, 2002, was approximately $186,347,000, including
interest at the default rate (as defined) of 12-3/4% per annum.

In December 1999, the Affiliated Partners advanced a total of
approximately $425,000 (of which the Partnership advanced approximately
$105,000) to the limited partners of JMB/NYC, which was used to acquire a
$5,425,000 tranche of the Purchase Note and the related security agreement
for the collateralization of such tranche. As a result of this purchase,
such limited partners, as creditors of JMB/NYC, were entitled to receive up

to $5,425,000 in proceeds otherwise payable to JMB/NYC in respect of its
indirect interests in the 1290 Partnership or the 237 Partnership, which
were owned through the Upper Tier Partnership. Such amounts received by
the limited partners generally were distributable to the Affiliated
Partners in proportion to their respective advances made to purchase the
tranche (i.e., 25% to the Partnership and 75% in the aggregate to the other
Affiliated Partners). In connection with their purchase of the $5,425,000
tranche of the Purchase Note, the limited partners of JMB/NYC agreed with
the holder of the Purchase Note that in the event JMB/NYC had not repaid
all amounts due and owing under the Purchase Note within one year after its
maturity on January 2, 2001, the holder would take the appropriate steps
necessary to foreclose upon and obtain JMB/NYC's interest in the Upper Tier
Partnership in lieu of seeking any other damages. After the sales of
JMB/NYC's indirect interests in the 1290 Partnership and the 237
Partnership, which were the primary assets of the Upper Tier Partnership,
and the application of JMB/NYC's share of the proceeds from such sales to
amounts due under the Purchase Note, there were no significant assets, if
any, securing repayment of the balance due under the Purchase Note, which
was considered uncollectible. Accordingly, the holder did not seek to
foreclose on JMB/NYC's interest in the Upper Tier Partnership. JMB/NYC
recognized gain on debt extinguishment for financial reporting purposes
during 2002 equal to the remaining unpaid principal and accrued interest on
the Purchase Note of approximately $186,347,000. JMB/NYC had discontinued
accruing interest expense relating to the Purchase Note for Federal income
tax purposes primarily during 1989 and 1990 and, as a result, recognized
gain on debt extinguishment for Federal income tax purposes of
approximately $62,216,000 during 2002. For Federal income tax purposes the
Partnership's share of such gain was approximately $14,412,000. During
1996, the Partnership discontinued the equity method of accounting for
JMB/NYC for financial reporting purposes. The Partnership did not
recognize any portion of JMB/NYC's share of the gain related to the
Purchase Note for financial reporting purposes as no proceeds were received
by the Partnership.

Also in December 1999, JMB/NYC was entitled to receive refinancing
proceeds, as defined, of approximately $446,000 in respect of its indirect
interest in the 1290 Partnership as a result of a refinancing of the
mortgage note secured by the 1290 Avenue of Americas office building.
These proceeds were used by JMB/NYC to make a payment of approximately
$443,000 on the Purchase Note tranche held by its limited partners. The
Partnership received $103,761 in May of 2002 as a return of its December
1999 advance to the limited partners of JMB/NYC out of the refinancing
proceeds.

On or about October 13, 2000, the Corporate General Partner of the
Partnership received a demand letter and notice of planned environmental
remedial activities from counsel for National Office Partners Limited
Partnership (hereinafter, "NOP"). In the notice, NOP advised the
Partnership that NOP had discovered contamination on a site adjacent to the
office building formerly known as the 1001 Fourth Avenue Plaza office
building (the "1001 Property"). The 1001 Property had been owned by 1001
Fourth Avenue Associates ("Associates"), an Illinois general partnership,
until it transferred ownership of the property to its mortgage lender
pursuant to a deed in lieu of foreclosure in November 1993. Associates had
as its partners the Partnership with a 99.9% partnership interest and the
Corporate General Partner with a 0.1% partnership interest. Associates was
dissolved in 1993. In its notice, NOP advised that it had discovered soil
and possible groundwater contamination on its property that it believed had
emanated from underground fuel storage tanks allegedly operated by
Associates. NOP advised that its site was contaminated with petroleum
hydrocarbons in excess of Washington state cleanup levels and that
contaminated soil would need to be excavated and disposed of off-site. NOP
also stated that impacted groundwater, if any, would be addressed as
necessary. NOP advised that it had incurred costs of investigation and
would incur costs for remedial action at the site and would seek to recover
from the responsible party or parties, among other things, the costs of
investigation and remediation, attorneys' fees, and other costs in
connection with this matter.

On November 30, 2001, NOP sent the Partnership, and five other
allegedly responsible parties, a further demand letter purporting to
quantify the amount of remedial action costs incurred by NOP through the
date of the letter. In the letter, NOP stated that it had incurred
$2,050,561 in recoverable remedial action costs that allegedly covered,
among other things, costs of investigation, removal costs for 88,570 tons
of soil, consulting fees and attorneys' fees incurred to the date of the
letter. In the 2001 demand letter, NOP stated that it would also seek all
additional future costs as they are incurred, including any additional
costs related to future required investigation and remediation of any
groundwater contamination and any costs incurred by NOP as a result of any
recontamination of the NOP property that might arise from the contamination
alleged to have occurred as a result of a release from the 1001 Property
site. The Partnership engaged counsel and developed information sufficient
to respond to the issues raised by NOP's demands.

In July 2002, NOP, the Partnership and other allegedly responsible
parties reached a proposed settlement of this matter. However, the
settlement negotiations broke down over the nature and scope of various
parties' commitments at that time. For the quarter ended June 30, 2002,
the Partnership recorded as a liability its share of the proposed
settlement payment to NOP.

In February 2003, a settlement of this matter was reached involving
NOP, the Partnership and other allegedly responsible parties. The
settlement provides, among other things: that the Partnership contribute
$350,000 of the total $1,460,000 paid by the allegedly responsible parties
in settlement of the matter; a release among the parties for any liability
for the contamination on the NOP site allegedly originating at any time
from the underground storage tank system on the 1001 Property site, subject
to NOP's rights to pursue Seafo, Inc. ("Seafo"), one of the allegedly
responsible parties and the current owner of the 1001 Property, under
certain circumstances for recontamination; NOP's indemnification of the
Partnership against any and all claims by any person incurred in connection
with hazardous substances that may migrate to the NOP site from the
underground storage tank system on the 1001 Property after the effective
date of the settlement agreement; the commitment by Seafo to use its best
efforts at its sole expense to complete expeditiously all necessary
investigation, remedial action and closure reporting to obtain a no further
action letter from the Washington State Department of Ecology concerning
the alleged releases associated with the underground storage tank system on
the 1001 Property; Seafo's release of all of the parties to the settlement
agreement for all liability and responsibility relating to any hazardous
substances allegedly originating at any time from the underground storage
tank system; and a Seafo covenant that it shall not allege that any of the
other parties has any obligation or duty under the common law or any
statute or contract to take any action or pay any sum of money relating to
hazardous substances originating from the underground storage tank system.

In connection with the sale of JMB/NYC's interest in the 237
Partnership in January 2002, Holders of Interests recognized in 2002
approximately $59,233,000 of net gain for Federal income tax purposes,
including their share of gain recognized on the extinguishment of the
indebtedness under the Purchase Note. For certain Holders of Interests
such taxable income may be offset by their suspended passive activity
losses (if any). Each Holder's tax consequences will depend on his own tax
situation.

The Partnership was not able to wind up and terminate in 2002 because
of the unresolved environmental issues relating to the 1001 Property. As a
result of the February 2003 settlement of the environmental matter at the
1001 Fourth Avenue Plaza office building, the Partnership currently
anticipates that its liquidation and termination will occur during 2003,
barring any unexpected circumstances. Sale proceeds and other funds, if
any, that will be distributed in connection with the liquidation and
termination of the Partnership will be minimal. Due to the unresolved
environmental issues involving the 1001 Property during 2002, a
distribution of any such funds did not occur in 2002. The Partnership is
currently pursuing the availability of expanded insurance coverage for
unforseen future liability.

The Partnership has made the real property investments set forth in the following table:

The Partnership has no employees.

The terms of transactions between the Partnership, the General
Partners and their affiliates are set forth in Items 11 and 13 below to
which reference is hereby made for a description of such transactions.

ITEM 2. PROPERTIES

As a result of the restructuring that occurred in 1999, the
Partnership owned through JMB/NYC (i) an indirect interest in 1290 Avenue
of the Americas, and (ii) an indirect interest in 237 Park Avenue and
certain other investments. JMB/NYC's interest in 1290 Avenue of the
Americas was sold on March 23, 2001 and JMB/NYC's interest in 237 Park
Avenue was sold on January 31, 2002.

The following is certain information concerning 237 Park Avenue and
1290 Avenue of the Americas.

PROPERTY AND LOCATION NET RENTABLE AREA

237 Park Avenue Building 1,140,000 square feet
New York, New York

1290 Avenue of the Americas Building 2,000,000 square feet
New York, New York

ITEM 3. LEGAL PROCEEDINGS

The Partnership is not subject to any material pending legal
proceedings.

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

There were no matters submitted to a vote of security holders during
2002.

PART II

ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS

As of January 1, 2003, there were 36,442 record holders of Interests
in the Partnership. There is no public market for Interests and it is not
anticipated that a public market for Interests will develop. Consequently,
a Holder may not be able to sell or otherwise liquidate his or her
Interests. Upon request, the Corporate General Partner may provide
information relating to a prospective transfer of Interests to an investor
desiring to transfer his Interests. The price to be paid for the
Interests, as well as any other economic aspects of the transaction, will
be subject to negotiation by the investor. There are certain conditions
and restrictions on the transfer of Interests, including, among other
things, the requirement that the substitution of a transferee of Interests
as a Limited Partner of the Partnership be subject to the written consent
of the Corporate General Partner, which may be granted or withheld in its
sole and absolute discretion. The rights of a transferee of Interests who
does not become a substituted Limited Partner will be limited to the rights
to receive his share of profits or losses and cash distributions from the
Partnership, and such transferee will not be entitled to vote such
Interests or have other rights of a Limited Partner. No transfer will be
effective until the first day of the next succeeding calendar quarter after
the requisite transfer form satisfactory to the Corporate General Partner
has been received by the Corporate General Partner. The transferee
consequently will not be entitled to receive any cash distributions or any
allocable share of profits or losses for tax purposes until such next
succeeding calendar quarter. Profits or losses from operations of the
Partnership for a calendar year in which a transfer occurs will be
allocated between the transferor and the transferee based upon the number
of quarterly periods in which each was recognized as the Holder of the
Interests, without regard to the results of the Partnership's operations
during particular quarterly periods and without regard to whether cash
distributions were made to the transferor or transferee. Profits or losses
arising from the sale or other disposition of Partnership properties will
be allocated to the recognized Holder of the Interests as of the last day
of the quarter in which the Partnership recognized such profits or losses.
Cash distributions to a Holder of Interests arising from the sale or other
disposition of Partnership properties will be distributed to the recognized
Holder of the Interests as of the last day of the quarterly period with
respect to which such distribution is made.

Reference is made to Item 6. Selected Financial Data below for a
discussion of cash distributions made to the Holders of Interests. The
purchase money note issued by JMB/NYC in connection with its acquisition of
interests in the 237 Park Avenue and 1290 Avenue of the Americas investment
properties required that any distributions payable to JMB/NYC with respect
to such investment properties be applied to reduce the outstanding
principal and interest on the purchase money note. Reference is made to
the Note entitled "Investment Properties -- JMB/NYC" for a further
discussion of the purchase price note and to the Note entitled "Partnership
Agreement" for a discussion of the provisions of the Partnership Agreement
relating to cash distributions. It is not expected that any significant
distributions will be made by the Partnership to the Holders of Interests.

ITEM 6. SELECTED FINANCIAL DATA

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

DECEMBER 31, 2002, 2001, 2000, 1999 and 1998 (a)

(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)

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

LIQUIDITY AND CAPITAL RESOURCES

Capitalized terms used herein but not defined have the same meanings
as in the Notes.

As a result of the public offering of Interests as described in
Item 1. Business in this report, the Partnership had approximately
$326,000,000 (after deducting selling expenses) and other offering costs
with which to make investments in income-producing commercial and
residential real property, to pay legal fees and other costs (including
acquisition fees) related to such investments and to satisfy working
capital requirements. A portion of the proceeds was utilized to acquire
the properties described in Item 1. Business above.

At December 31, 2002, the Partnership had cash and cash equivalents of
approximately $2,383,000. These funds were available for working capital
requirements and reserves, payment of liabilities, including the payment of
$350,000 relating to a settlement of the environmental matter at the 1001
Fourth Avenue Plaza office building (discussed below), payment of costs
related to a completion of the liquidation, winding up and termination of
the Partnership and a possible future distribution to the General Partners
and Holders of Interests. As discussed below, JMB/NYC sold its indirect
interest in the 237 Partnership in January 2002. The Partnership received
its share of the proceeds from such sale, approximately $159,000, in March
2002. In addition, the Partnership received approximately $104,000 in May
of 2002 as a return of its December 1999 advance to the limited partners of
JMB/NYC. In September of 2002, the Partnership received final dividends of
approximately $28,000 and $35,000 from Carlyle Investors, Inc. and Carlyle
Managers, Inc., respectively, and a final distribution of approximately
$3,700 from Carlyle-XIII Associates, L.P., related to the dissolution and
liquidation of these companies following the sale of JMB/NYC's indirect
interest in the 237 Partnership.

On or about October 13, 2000, the Corporate General Partner of the
Partnership received a demand letter and notice of planned environmental
remedial activities from counsel for National Office Partners Limited
Partnership (hereinafter, "NOP"). In the notice, NOP advised the
Partnership that NOP had discovered contamination on a site adjacent to the
office building formerly known as the 1001 Fourth Avenue Plaza office
building (the "1001 Property"). In its notice, NOP advised that it had
discovered soil and possible groundwater contamination on its property that
it believed had emanated from underground fuel storage tanks allegedly
operated on behalf of the Partnership. NOP advised that its site was
contaminated with petroleum hydrocarbons and that contaminated soil would
need to be excavated and disposed of off-site. NOP also stated that
impacted groundwater, if any, would be addressed as necessary. NOP advised
that it would seek to recover from the responsible party or parties, among
other things, the costs of investigation and remediation, attorneys' fees,
and other costs in connection with this matter.

On November 30, 2001, NOP sent the Partnership, and five other
allegedly responsible parties, a further demand letter purporting to
quantify the amount of remedial action costs incurred by NOP through the
date of the letter. In the letter, NOP stated that it had incurred
$2,050,561 in recoverable remedial action costs that allegedly covered,
among other things, costs of investigation, removal costs for 88,570 tons
of soil, consulting fees and attorneys' fees incurred to the date of the
letter. In the 2001 demand letter, NOP stated that it would also seek all
additional future costs as they are incurred. The Partnership engaged
counsel and developed information sufficient to respond to the issues
raised by NOP's demands.

In July 2002, NOP, the Partnership and other allegedly responsible
parties reached a proposed settlement of this matter. However, the
settlement negotiations broke down over the nature and scope of various
parties' commitments at that time. For the quarter ended June 30, 2002,
the Partnership recorded as a liability its share of the proposed
settlement payment to NOP.

In February 2003, a settlement of this matter was reached involving
NOP, the Partnership and other allegedly responsible parties. The
settlement provides, among other things: that the Partnership contribute
$350,000 of the total $1,460,000 paid by the allegedly responsible parties
in settlement of the matter; a release among the parties for any liability
for the contamination on the NOP site allegedly originating at any time
from the underground storage tank system on the 1001 Property site, subject
to NOP's rights to pursue Seafo, Inc. ("Seafo"), one of the allegedly
responsible parties and the current owner of the 1001 Property, under
certain circumstances for recontamination; NOP's indemnification of the
Partnership against any and all claims by any person incurred in connection
with hazardous substances that may migrate to the NOP site from the
underground storage tank system on the 1001 Property after the effective
date of the settlement agreement; the commitment by Seafo to use its best
efforts at its sole expense to complete expeditiously all necessary
investigation, remedial action and closure reporting to obtain a no further
action letter from the Washington State Department of Ecology concerning
the alleged releases associated with the underground storage tank system on
the 1001 Property; Seafo's release of all of the parties to the settlement
agreement for all liability and responsibility relating to any hazardous
substances allegedly originating at any time from the underground storage
tank system; and a Seafo covenant that it shall not allege that any of the
other parties has any obligation or duty under the common law or any
statute or contract to take any action or pay any sum of money relating to
hazardous substances originating from the underground storage tank system.
The Partnership paid its portion of the settlement cost ($350,000) in
February 2003.

In November 1999, JMB/NYC closed a transaction (the "Restructuring")
pursuant to which, among other things, JMB/NYC's interests in 237 Park
Avenue ("237 Park") and 1290 Avenue of the Americas ("1290 Avenue of the
Americas") were restructured. Under the Restructuring, the partnership
that owned 237 Park was converted to a limited liability company ("237 Park
LLC"). The membership interest in 237 Park LLC owned by 237/1290 Upper
Tier Associates, L.P. (the "Upper Tier Partnership"), in which JMB/NYC was
a limited partner with a 99% interest, was contributed to a partnership
(the "237 Partnership") that acquired the other membership interests in 237
Park LLC from the REIT and one of its affiliates. In exchange for its
interest in 237 Park LLC, the Upper Tier Partnership received a limited
partnership interest in the 237 Partnership having a fair market value
(determined in accordance with the partnership agreement of the 237
Partnership) of approximately $500,000. The general partner of the 237
Partnership had the right, during the month of January of each calendar
year commencing with 2002, to purchase the interest in the 237 Partnership
for a price equal to the greater of the fair market value of such interest
(determined in accordance with the partnership agreement of the 237
Partnership) and a specified amount, of which JMB/NYC's share would be
$650,000. In January 2002, the general partner of the 237 Partnership
exercised its right to acquire JMB/NYC's indirect interest in the 237
Partnership and JMB/NYC received $650,000 in sale proceeds. Such amount
was paid to the limited partners of JMB/NYC as holders of a tranche of the
Purchase Note as discussed below. The Partnership received its share of
sale proceeds, approximately $159,000, in March 2002.

Due to the January 2002 sale of the Partnership's indirect interest in
the 237 Partnership, which was the Partnership's last investment property,
the distributions received in excess of recorded investment of $661,228
were reduced to zero and included as part of the gain on sale in 2002. The
distributions received in excess of recorded investment were created by the

1999 retirement of the Partnership's obligations to fund, on demand,
$200,000 and $200,000 to Carlyle Investors, Inc. and Carlyle Managers,
Inc., respectively, of additional paid-in capital. Such obligations when
retired included accrued but unpaid interest. The Partnership recognized
approximately $824,000 and $47,698,000 of gain for financial reporting and
Federal income tax purposes, respectively, during 2002 as a result of the
sale of the Partnership's indirect interest in the 237 Partnership.

JMB/NYC's indirect interest through the Upper Tier Partnership in the
partnership (the "1290 Partnership") that owned 1290 Avenue of the Americas
was also modified, although the REIT continued to own the controlling
interest in the property. An affiliate of the REIT also had the right,
during the month of March of each calendar year commencing with 2001, to
purchase JMB/NYC's indirect interest in the 1290 Partnership for the
greater of (x) a price based on the property operations and (y) $1,400,000.

On March 2, 2001, JMB/NYC was notified that an affiliate of the REIT
intended to exercise its right to purchase JMB/NYC's indirect interest in
the 1290 Partnership and on March 23, 2001, the sale was completed and
JMB/NYC received approximately $1,400,000 at closing (of which the
Partnership's share was approximately $340,000). Such amount was paid in
May of 2001 to the limited partners of JMB/NYC as holders of a tranche of
the Purchase Note as discussed below. In addition, JMB/NYC received the
remaining collateral (approximately $5,700,000, of which the Partnership's
share was approximately $1,436,000) held pursuant to the indemnification
agreement, including interest earned thereon, upon closing of the sale of
its interest in the 1290 Partnership. The Partnership recognized
approximately $343,000 and $31,700,000 of gain for financial reporting and
Federal income tax purposes, respectively, during 2001 as a result of the
sale of the Partnership's indirect interest in the 1290 Partnership. The
Partnership received its share of the sale proceeds and collateral amount
in May 2001.

A portion of the purchase price for JMB/NYC's indirect interests in
the 1290 Avenue of the Americas and 237 Park Avenue office buildings was
represented by a certain promissory note (the "Purchase Note") bearing
interest at 12-3/4% per annum. The Purchase Note was secured by JMB/NYC's
indirect interests in the 237 Partnership (prior to its sale in January
2002) and the 1290 Partnership (prior to its sale in March 2001) owned
through the Upper Tier Partnership and was non-recourse to JMB/NYC. The
Purchase Note required payment of principal and interest out of
distributions made to JMB/NYC from the 1290 Partnership and the 237
Partnership and proceeds from sales of JMB/NYC's indirect interests in
those partnerships. Unpaid interest on the Purchase Note accrued and was
deferred, compounded monthly. Unpaid principal and interest were due at
maturity on January 2, 2001. As expected, JMB/NYC did not have funds to
pay the Purchase Note at its maturity. The limited partners of JMB/NYC, as
creditors, and the holder of the Purchase Note agreed to certain steps if
the Purchase Note were not repaid within one year of its maturity as
discussed below. For financial reporting purposes, the outstanding
principal and accrued and deferred interest on the Purchase Note at the
date of debt extinguishment and final liquidation and termination of
JMB/NYC, September 30, 2002, was approximately $186,347,000, including
interest at the default rate (as defined) of 12-3/4% per annum.

In December 1999, the Affiliated Partners advanced a total of
approximately $425,000 (of which the Partnership advanced approximately
$105,000) to the limited partners of JMB/NYC, which was used to acquire a
$5,425,000 tranche of the Purchase Note and the related security agreement
for the collateralization of such tranche. As a result of this purchase,
such limited partners, as creditors of JMB/NYC, were entitled to receive up
to $5,425,000 in proceeds otherwise payable to JMB/NYC in respect of its
indirect interests in the 1290 Partnership or the 237 Partnership, which
were owned through the Upper Tier Partnership. Such amounts received by
the limited partners generally were distributable to the Affiliated
Partners in proportion to their respective advances made to purchase the
tranche (i.e., 25% to the Partnership and 75% in the aggregate to the other

Affiliated Partners). In connection with their purchase of the $5,425,000
tranche of the Purchase Note, the limited partners of JMB/NYC agreed with
the holder of the Purchase Note that in the event JMB/NYC had not repaid
all amounts due and owing under the Purchase Note within one year after its
maturity on January 2, 2001, the holder would take the appropriate steps
necessary to foreclose upon and obtain JMB/NYC's interest in the Upper Tier
Partnership in lieu of seeking any other damages. After the sales of
JMB/NYC's indirect interests in the 1290 Partnership and the 237
Partnership, which were the primary assets of the Upper Tier Partnership,
and the application of JMB/NYC's share of the proceeds from such sales to
amounts due under the Purchase Note, there were no significant assets, if
any, securing repayment of the balance due under the Purchase Note, which
was considered uncollectible. Accordingly, the holder did not seek to
foreclose on JMB/NYC's interest in the Upper Tier Partnership. JMB/NYC
recognized gain on debt extinguishment for financial reporting purposes
during 2002 equal to the remaining unpaid principal and accrued interest on
the Purchase Note of approximately $186,347,000. JMB/NYC had discontinued
accruing interest expense relating to the Purchase Note for Federal income
tax purposes primarily during 1989 and 1990 and, as a result, recognized
gain on debt extinguishment for Federal income tax purposes of
approximately $62,216,000 during 2002. For Federal income tax purposes the
Partnership's share of such gain was approximately $14,412,000. During
1996, the Partnership discontinued the equity method of accounting for
JMB/NYC for financial reporting purposes. The Partnership did not
recognize any portion of JMB/NYC's share of the gain related to the
Purchase Note for financial reporting purposes as no proceeds were received
by the Partnership. The Partnership received $103,761 in May of 2002 as a
return of its December 1999 advance to the limited partners of JMB/NYC.

Pursuant to an indemnification agreement, the Affiliated Partners were
jointly and severally obligated to indemnify the REIT to the extent of
$25,000,000 to ensure their compliance with the terms and conditions
relating to JMB/NYC's indirect limited partnership interests in the
restructured and reorganized joint ventures that owned the Properties. The
Affiliated Partners contributed approximately $7,800,000 (of which the
Partnership's share was approximately $1,900,000) to JMB/NYC, which was
deposited into an escrow account as collateral for such indemnification.
These funds were invested in stripped U.S. Government obligations with a
maturity date of February 15, 2001. Subsequent to that date, the remaining
escrowed funds were invested in short-term U.S. Government obligations.
Due to the Restructuring, the maximum potential obligation was reduced to
$14,285,000, and a portion of the collateral (approximately $4,460,000 in
face amount) was released in 1999 to JMB/NYC. As a result of the sale of
JMB/NYC's indirect interest in the 1290 Partnership, the maximum
indemnification obligation was reduced to $0 and the remaining collateral
(approximately $5,700,000 face amount, of which the Partnership's share was
approximately $1,436,000) was released in March 2001 to JMB/NYC. The
Partnership's share of the reduction of the maximum unfunded obligation
under the indemnification agreement recognized as income during the years
2000 and 2001 was a result of (i) interest earned on amounts contributed by
the Partnership and held in escrow by JMB/NYC, and (ii) the Partnership's
share of the remaining indemnification obligation that was released in
March 2001 in connection with the sale of JMB/NYC's indirect interest in
the 1290 Partnership. Interest income earned reduced the Partnership's
share of the maximum unfunded obligation under the indemnification
agreement, which had been reflected as a liability.

In connection with the sale of JMB/NYC's interest in the 237
Partnership in January 2002, Holders of Interests recognized in 2002
approximately $59,233,000 of net gain for Federal income tax purposes,
including their share of gain recognized on the extinguishment of the
indebtedness under the Purchase Note. For certain Holders of Interests
such taxable income may be offset by their suspended passive activity
losses (if any). Each Holder's tax consequences will depend on his own tax
situation.

The Partnership was not able to wind up and terminate in 2002 because
of the unresolved environmental issues relating to the 1001 Property. As a
result of the February 2003 settlement of the environmental matter at the
1001 Fourth Avenue Plaza office building, the Partnership currently
anticipates that its liquidation and termination will occur during 2003,
barring any unexpected circumstances. Sale proceeds and other funds, if
any, that will be distributed in connection with the liquidation and
termination of the Partnership will be minimal. Due to the unresolved
environmental issues involving the 1001 Property during 2002, a
distribution of any such funds did not occur in 2002. The Partnership is
currently pursuing the availability of expanded insurance coverage for
unforseen future liability.

RESULTS OF OPERATIONS

The decrease in cash and cash equivalents at December 31, 2002 as
compared to December 31, 2001 is due in part to expenses of approximately
$425,000 incurred related to the environmental issues concerning the 1001
Property and also due to expenses paid in December of 2002 to facilitate
the possibility of forming a liquidating trust at the end of 2002 as a
possible successor to the Partnership.

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

The increase in accounts payable and accrued expenses at December 31,
2002 as compared to December 31, 2001 is primarily due to the accrual of
$350,000 during 2002 for a proposed settlement relating to the
environmental issues concerning the 1001 Property. As discussed above, the
settlement was completed and the Partnership paid $350,000 as its share of
the settlement payment in February 2003.

The decrease in distributions received in excess of recorded
investment at December 31, 2002 as compared to December 31, 2001 is due to
the reduction of such amount in connection with the sale of the indirect
interest in the 237 Partnership in January, 2002. The distributions
received in excess of recorded investment were created by the 1999
retirement of the Partnership's obligations to fund, on demand, $200,000
and $200,000 to Carlyle Investors, Inc. and Carlyle Managers, Inc.,
respectively, of additional paid-in capital. Such obligations, when
retired, included accrued but unpaid interest. Such investment has been
reduced to zero and included in the Partnership's share of gain on sale of
indirect partnership interest due to the sale of the Partnership's last
investment property in January 2002.

The decrease in interest income for the year ended December 31, 2002
as compared to the same periods in 2001 and 2000 is primarily due to lower
interest rates on invested funds in 2002.

The other income for the year ended December 31, 2002 consists
primarily of final dividends of approximately $28,000 and $35,000 received
from Carlyle Investors, Inc. and Carlyle Managers, Inc., respectively, in
September 2002 and also the return during the third quarter of 2002 of
$12,000 held in a payroll cash account of a property formerly owned by the
Partnership.

The increase in professional services for 2002 as compared to 2001 and
for 2001 as compared to 2000 is primarily due to legal and other
professional services incurred of approximately $425,000 during 2002 and of
approximately $205,000 during 2001 in regards to the environmental issues
concerning the 1001 Property.

The increase in general and administrative expenses, which includes
reimbursements to affiliates, for the year ended December 31, 2002 as
compared to the same period in 2001 is primarily due to the accrual of
$350,000 during 2002 for a proposed settlement relating to the 1001
Property and also partially due to expenses paid in December of 2002 to
facilitate the possibility of forming a liquidating trust at the end of
2002 as a possible successor to the Partnership.

The Partnership's share of the reduction of the maximum unfunded
obligation under and income related to termination of the indemnification
agreement recognized as income during 2001 of $3,572,177 is a result of the
sale of JMB/NYC's indirect interest in the 1290 Partnership in March of
2001 and a release of the Partnership's and other Affiliated Partners'
indemnification obligation relating to the interest in the 1290
Partnership, as well as interest earned during 2001 on amounts contributed
by the Partnership and held in escrow by JMB/NYC. Such interest income
earned reduced the Partnership's proportionate share of the maximum
unfunded obligation under the indemnification agreement. The Partnership's
share of the reduction of the maximum unfunded obligation under the
indemnification agreement recognized as income of $89,468 for the year
ended December 31, 2000 is a result of interest earned on amounts
contributed by the Partnership and held in escrow for JMB/NYC.

The Partnership's share of gain on sale of indirect partnership
interest for the year ended December 31, 2002 is primarily the aggregate of
the Partnership's share (approximately $159,000) of JMB/NYC's gain from the
sale of its indirect partnership interest in the 237 Partnership in January
2002 and the reduction of the distributions received in excess of recorded
investment (approximately $661,000), and is also partially due to a final
liquidating distribution of cash generated from sales proceeds of
approximately $3,700 received from Carlyle-XIII Associates, L.P. in
September 2002. The Partnership's share of gain on sale of indirect
partnership interest for the year ended December 31, 2001 is the
Partnership's share of JMB/NYC's gain from the sale of its indirect
partnership interest in the 1290 Partnership on March 23, 2001.

INFLATION

Due to the low level of inflation in recent years, inflation generally
has not had a material effect on rental income or property operating
expenses.

Inflation will not significantly impact the Partnership in the future
since the Partnership no longer has any real property investments and
expects to complete its liquidation, winding up and termination in 2003,
barring unforseen circumstances.

USE OF ESTIMATES AND CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions. These estimates and
assumptions affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Critical accounting policies are those that
are both significant to the overall presentation of the Partnership's
financial condition and results of operations and require management to
make difficult, complex or subjective judgments. The Partnership made no
significant estimates or assumptions for the year ended December 31, 2002
and thus has concluded that there are no critical accounting policies.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership does not believe that it is exposed to market risk
relating to interest rate changes.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

INDEX

Independent Auditors' Report

Balance Sheets, December 31, 2002 and 2001

Statements of Operations, years ended December 31,
2002, 2001 and 2000

Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 2002, 2001 and 2000

Statements of Cash Flows, years ended December 31,
2002, 2001 and 2000

Notes to Financial Statements

SCHEDULES NOT FILED:

All schedules have been omitted as the required information is
inapplicable or the information is presented in the financial statements or
related notes.

INDEPENDENT AUDITORS' REPORT

The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII:

We have audited the financial statements of Carlyle Real Estate
Limited Partnership - XIII, a limited partnership, (the Partnership), as
listed in the accompanying index. These financial statements are the
responsibility of the General Partners of the Partnership. Our
responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates
made by the General Partners of the Partnership, 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 financial statements referred to above present
fairly, in all material respects, the financial position of the Partnership
at December 31, 2002 and 2001, and the results of its operations and its
cash flows for each of the years in the three-year period ended
December 31, 2002, in conformity with accounting principles generally
accepted in the United States of America.

KPMG LLP

Chicago, Illinois
March 17, 2003

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

BALANCE SHEETS

DECEMBER 31, 2002 AND 2001

ASSETS
------

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

STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

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

STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

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

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

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

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2002, 2001 AND 2000

OPERATIONS AND BASIS OF ACCOUNTING

GENERAL

The Partnership held, indirectly through Carlyle Associates, L.P., an
approximate 25% interest in JMB/NYC Office Building Associates, L.P.
("JMB/NYC"), which in turn owned an indirect interest in the 1290 Avenue of
the Americas property. Due to the Restructuring in November 1999, JMB/NYC
owned an indirect interest in the partnership that owns 237 Park Avenue and
certain other investments (JMB/NYC's investment was significantly less than
1% of such partnership).

The equity method of accounting had been applied with respect to the
Partnership's 25% indirect interest in JMB/NYC through Carlyle-XIII
Associates, L.P. through the confirmation and acceptance of the Amended
Plan of Reorganization and Disclosure Statement (the "Plan") on October 10,
1996 ("Effective Date"). As of October 10, 1996, the Partnership reversed
those previously recognized losses resulting from its interest in JMB/NYC
that it is no longer obligated to fund due to the conversion of JMB/NYC's
general partnership interest to a limited partnership interest in the joint
ventures which owned 1290 Avenue of the Americas and 237 Park Avenue
(collectively, the "Properties") and the terms of the restructuring. The
Partnership had no future funding obligations (other than that related to a
certain indemnification agreement provided in connection with the
restructuring that was terminated upon sale of JMB/NYC's interest in the
1290 Partnership) and had no influence or control over the day-to-day
affairs of the joint ventures which owned the Properties subsequent to the
Effective Date. Under the terms of the Plan, the new ownership structure
gave control of the Properties to an unaffiliated real estate investment
trust ("REIT") owned primarily by holders of the first mortgage loan that
encumbered the properties prior to bankruptcy. Accordingly, the Partnership
discontinued the application of the equity method of accounting for the
indirect interests in the Properties and additional losses from the
investment in unconsolidated venture were not recognized.

The Partnership records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying financial statements have been prepared from such records
after making appropriate adjustments to present the Partnership's accounts
in accordance with accounting principles generally accepted in the United
States of America ("GAAP"). Such GAAP adjustments are not recorded on the
records of the Partnership. The effect of these items for the years ended
December 31, 2002 and 2001 is summarized as follows:

2002 2001
----------------------------------------------
TAX BASIS TAX BASIS
GAAP BASIS (UNAUDITED) GAAP BASIS (UNAUDITED)
---------- ----------- ---------- ----------
Total assets. . . . . $2,383,473 42,398,875 3,537,236 43,527,055

Partners' capital
accounts (deficits):
General partners. . 25,164 -- 74,412 (2,818,209)
Limited partners. . 2,007,283 41,990,093 2,571,346(15,812,848)

Net earnings (loss):
General partners. . (49,248) 2,818,209 119,921 1,155,720
Limited partners. . (564,063) 57,802,941 3,135,382 31,129,141

Net earnings (loss)
per limited part-
nership interest . . (1.62) 165.32 8.95 88.82
========== =========== =====================

The net earnings (loss) per limited partnership interest is based upon
the limited partnership interests outstanding at the end of the period.
Deficit capital accounts could result, through the duration of the
Partnership, in net gain for financial reporting and Federal income tax
purposes to the General Partners and Holders of Interests. Holders of
Interest may have, on termination of the Partnership, an additional capital
gain or loss depending on the Holders' basis in their Interests for Federal
income tax purposes.

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

Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement.
Partnership distributions from unconsolidated ventures are considered cash
flow from operating activities only to the extent of the Partnership's
cumulative share of net earnings. In addition, the Partnership records
amounts held in U.S. Government obligations at cost, which approximates
market. For the purposes of these statements, the Partnership's policy is
to consider all such amounts held with original maturities of three months
or less ($2,383,473 and $3,409,779 at December 31, 2002 and 2001,
respectively) as cash equivalents, which includes investments in an
institutional mutual fund that holds U.S. Government obligations, with any
remaining amounts (generally with original maturities of one year or less)
reflected as short-term investments being held to maturity.

No provision for state or Federal income taxes has been made as the
liability for such taxes is that of the partners rather than the
Partnership. However, in certain instances, the Partnership has been or
may be required under applicable law to remit directly to the tax
authorities amounts representing withholding from distributions paid to
partners.

The Partnership acquired, either directly or through joint ventures,
interests in nine apartment complexes, three shopping centers, ten office
buildings and a multi-use complex. All twenty-three real property
investments have been sold or disposed of as of December 31, 2002.

VENTURE AGREEMENT - GENERAL

The Partnership at December 31, 2002 is no longer a party to any
operating joint venture agreements.

INVESTMENT PROPERTIES

JMB/NYC

JMB/NYC was a limited partnership among Carlyle-XIII Associates, L.P.,

and its affiliates, Carlyle-XIV Associates, L.P. and Property Partners,
L.P., as limited partners and Carlyle Managers, Inc. as the sole general
partner. The Partnership was a 25% shareholder of Carlyle Managers, Inc.
and held, indirectly as a limited partner of Carlyle-XIII Associates, L.P.,
an approximate 25% limited partnership interest in JMB/NYC. The sole
general partner of Carlyle-XIII Associates, L.P. was Carlyle Investors,
Inc., of which the Partnership was a 25% shareholder. The general partner
in each of JMB/NYC and Carlyle-XIII Associates, L.P. was an affiliate of
the Partnership. JMB/NYC, Carlyle-III Associates, L.P., Carlyle Managers,
Inc. and Carlyle Investors, Inc. were dissolved in September and October
2002.

Pursuant to an indemnification agreement, the Partnership and two
other partnerships sponsored by JMB Realty Corporation (together with the
Partnership, the "Affiliated Partners") were jointly and severally
obligated to indemnify an unaffiliated real estate investment trust
("REIT") owned primarily by holders of the first mortgage debt that
encumbered the Properties prior to the bankruptcy to the extent of $25
million to ensure their compliance with the terms and conditions relating
to JMB/NYC's indirect limited partnership interests in the restructured and
reorganized joint ventures that owned the Properties. The Affiliated
Partners contributed approximately $7,800,000 (of which the Partnership's
share was approximately $1,900,000) to JMB/NYC, which was deposited into an
escrow account as collateral for such indemnification. These funds were
invested in stripped U.S. Government obligations with a maturity date of
February 15, 2001. Subsequent to that date, the remaining escrowed funds
were invested in short-term U.S. Government obligations. Due to the
Restructuring discussed below, during 1999 the maximum potential obligation
was reduced to $14,285,000 and a portion of the collateral (approximately
$4,460,000 in face amount) was released in 1999 to JMB/NYC. On March 23,
2001, JMB/NYC's indirect interest in the 1290 Partnership was sold, and as
a result, the indemnification obligation was terminated and the remaining
collateral (approximately $5,700,000 face amount of which the Partnership's
share was approximately $1,436,000) was released in March 2001 to JMB/NYC.
The Partnership's share of the reduction of the maximum unfunded obligation
under the indemnification agreement recognized as income during the years
1999, 2000 and 2001 was a result of (i) interest earned on amounts
contributed by the Partnership and held in escrow by JMB/NYC, (ii) the
Partnership's share of the agreed upon reduction of the maximum obligation
in November 1999 in connection with the Restructuring discussed below, and
(iii) the Partnership's share of the remaining indemnification obligation
that was released in March 2001 in connection with the sale of JMB/NYC's
indirect interest in the 1290 Partnership. Interest income earned reduced
the Partnership's share of the maximum unfunded obligation under the
indemnification agreement, which had been reflected as a liability.

In November 1999, JMB/NYC closed a transaction (the "Restructuring")
pursuant to which, among other things, JMB/NYC's interests in 237 Park
Avenue ("237 Park") and 1290 Avenue of the Americas ("1290 Avenue of the
Americas") were restructured. Under the Restructuring, the partnership
that owned 237 Park was converted to a limited liability company ("237 Park
LLC"). The membership interest in 237 Park LLC owned by 237/1290 Upper
Tier Associates, L.P. (the "Upper Tier Partnership"), in which JMB/NYC was

a limited partner with a 99% interest, was contributed to a partnership
(the "237 Partnership") that acquired the other membership interests in 237
Park LLC from the REIT and one of its affiliates. In exchange for its
interest in 237 Park LLC, the Upper Tier Partnership received a limited
partnership interest in the 237 Partnership having a fair market value
(determined in accordance with the partnership agreement of the 237
Partnership) of approximately $500,000. The general partner of the 237
Partnership had the right, during the month of January of each calendar
year commencing with 2002, to purchase the interest in the 237 Partnership
for a price equal to the greater of the fair market value of such interest
(determined as described above) and a specified amount, of which JMB/NYC's
share would be $650,000. In January 2002, the general partner of the 237
Partnership exercised its right to acquire JMB/NYC's indirect interest in
the 237 Partnership and JMB/NYC received $650,000 in sale proceeds. Such
amount was paid to the limited partners of JMB/NYC as holders of a tranche
of the Purchase Note as discussed below. The Partnership received its
share of sale proceeds, approximately $159,000, in March 2002.

Due to the January 2002 sale of the Partnership's indirect interest in
the 237 Partnership, which was the Partnership's last investment property,
the distributions received in excess of recorded investment of $661,228
were reduced to zero and included as part of the gain on sale in 2002. The
distributions received in excess of recorded investment were created by the
1999 retirement of the Partnership's obligations to fund, on demand,
$200,000 and $200,000 to Carlyle Investors, Inc. and Carlyle Managers,
Inc., respectively, of additional paid-in capital. Such obligations when
retired included accrued but unpaid interest. The Partnership recognized
approximately $824,000 and $47,698,000 of gain for financial reporting and
Federal income tax purposes, respectively, during 2002 as a result of the
sale of the Partnership's indirect interest in the 237 Partnership.

JMB/NYC's indirect interest through the Upper Tier Partnership in the
partnership (the "1290 Partnership") that owned 1290 Avenue of the Americas
was also modified, although the REIT continued to own the controlling
interest in the property. An affiliate of the REIT had the right, during
the month of March of each calendar year commencing with 2001, to purchase
JMB/NYC's indirect interest in the 1290 Partnership for the greater of (x)
a price based on the property operations and (y) $1,400,000. On March 2,
2001, JMB/NYC was notified that an affiliate of the REIT intended to
exercise its right to purchase JMB/NYC's indirect interest in the 1290
Partnership and on March 23, 2001, the sale was completed and JMB/NYC
received approximately $1,400,000 at closing (of which the Partnership's
share was approximately $340,000). Such amount was paid in May of 2001 to
the limited partners of JMB/NYC as holders of a tranche of the Purchase
Note as discussed below. In addition, JMB/NYC received the remaining
collateral (approximately $5,700,000, of which the Partnership's share was
approximately $1,436,000) held pursuant to the indemnification agreement,
including interest earned thereon, upon closing of the sale of its interest
in the 1290 Partnership. The Partnership recognized approximately $343,000
and $31,700,000 of gain for financial reporting and Federal income tax
purposes, respectively, during 2001 as a result of the sale of the
Partnership's indirect interest in the 1290 Partnership. The Partnership
received its share of the sale proceeds and collateral amount in May 2001.

A portion of the purchase price for JMB/NYC's indirect interests in
the 1290 Avenue of the Americas and 237 Park Avenue office buildings was
represented by a certain promissory note (the "Purchase Note") bearing
interest at 12-3/4% per annum. The Purchase Note was secured by JMB/NYC's
indirect interests in the 237 Partnership (prior to its sale in January
2002) and the 1290 Partnership (prior to its sale in March 2001) owned
through the Upper Tier Partnership and was non-recourse to JMB/NYC. The
Purchase Note required payment of principal and interest out of
distributions made to JMB/NYC from the 1290 Partnership and the 237
Partnership and proceeds from sales of JMB/NYC's indirect interests in
those partnerships. Unpaid interest on the Purchase Note accrued and was
deferred, compounded monthly. Unpaid principal and interest were due at
maturity on January 2, 2001. As expected, JMB/NYC did not have funds to
pay the Purchase Note at its maturity. The limited partners of JMB/NYC, as

creditors, and the holder of the Purchase Note agreed to certain steps if
the Purchase Note were not repaid within one year of its maturity as
discussed below. For financial reporting purposes, the outstanding
principal and accrued and deferred interest on the Purchase Note at the
date of debt extinguishment and final liquidation and termination of
JMB/NYC, September 30, 2002, was approximately $186,347,000, including
interest at the default rate (as defined) of 12-3/4% per annum.

In December 1999, the Affiliated Partners advanced a total of
approximately $425,000 (of which the Partnership advanced approximately
$105,000) to the limited partners of JMB/NYC, which was used to acquire a
$5,425,000 tranche of the Purchase Note and the related security agreement
for the collateralization of such tranche. As a result of this purchase,
such limited partners, as creditors of JMB/NYC, were entitled to receive up
to $5,425,000 in proceeds otherwise payable to JMB/NYC in respect of its
indirect interests in the 1290 Partnership or the 237 Partnership, which
were owned through the Upper Tier Partnership. Such amounts received by
the limited partners generally were distributable to the Affiliated
Partners in proportion to their respective advances made to purchase the
tranche (i.e., 25% to the Partnership and 75% in the aggregate to the other
Affiliated Partners). In connection with their purchase of the $5,425,000
tranche of the Purchase Note, the limited partners of JMB/NYC agreed with
the holder of the Purchase Note that in the event JMB/NYC had not repaid
all amounts due and owing under the Purchase Note within one year after its
maturity on January 2, 2001, the holder would take the appropriate steps
necessary to foreclose upon and obtain JMB/NYC's interest in the Upper Tier
Partnership in lieu of seeking any other damages. After the sales of
JMB/NYC's indirect interests in the 1290 Partnership and the 237
Partnership, which were the primary assets of the Upper Tier Partnership,
and the application of JMB/NYC's share of the proceeds from such sales to
amounts due under the Purchase Note, there were no significant assets, if
any, securing repayment of the balance due under the Purchase Note, which
was considered uncollectible. Accordingly, the holder did not seek to
foreclose on JMB/NYC's interest in the Upper Tier Partnership. JMB/NYC
recognized gain on debt extinguishment for financial reporting purposes
during 2002 equal to the remaining unpaid principal and accrued interest on
the Purchase Note of approximately $186,347,000. The Partnership had
discontinued accruing interest expense relating to the Purchase Note for
Federal income tax purposes primarily during 1989 and 1990 and, as a
result, recognized gain on debt extinguishment for Federal income tax
purposes of approximately $62,216,000 during 2002. For Federal income tax
purposes the Partnership's share of such gain was approximately
$14,412,000. During 1996, the Partnership discontinued the equity method
of accounting for JMB/NYC for financial reporting purposes. The
Partnership did not recognize any portion of JMB/NYC's share of the gain
related to the Purchase Note for financial reporting purposes as no
proceeds were received by the Partnership. The Partnership received
$103,761 in May of 2002 as a return of its December 1999 advance to the
limited partners of JMB/NYC.

In connection with the sale of JMB/NYC's interest in the 237
Partnership in January 2002, Holders of Interests recognized in 2002
approximately $59,233,000 of net gain for Federal income tax purposes,
including their share of gain recognized on the extinguishment of the
indebtedness under the Purchase Note. For certain Holders of Interests
such taxable income may be offset by their suspended passive activity
losses (if any). Each Holder's tax consequences will depend on his own tax
situation.

1001 FOURTH AVENUE PLAZA

On or about October 13, 2000, the Corporate General Partner of the
Partnership received a demand letter and notice of planned environmental
remedial activities from counsel for National Office Partners Limited
Partnership (hereinafter, "NOP"). In the notice, NOP advised the
Partnership that NOP had discovered contamination on a site adjacent to the
office building formerly known as the 1001 Fourth Avenue Plaza office
building (the "1001 Property"). In its notice, NOP advised that it had
discovered soil and possible groundwater contamination on its property that
it believed had emanated from underground fuel storage tanks allegedly
operated on behalf of the Partnership. NOP advised that its site was
contaminated with petroleum hydrocarbons and that contaminated soil would
need to be excavated and disposed of off-site. NOP also stated that
impacted groundwater, if any, would be addressed as necessary. NOP advised
that it would seek to recover from the responsible party or parties, among
other things, the costs of investigation and remediation, attorneys' fees,
and other costs in connection with this matter.

On November 30, 2001, NOP sent the Partnership, and five other
allegedly responsible parties, a further demand letter purporting to
quantify the amount of remedial action costs incurred by NOP through the
date of the letter. In the letter, NOP stated that it had incurred
$2,050,561 in recoverable remedial action costs that allegedly covered,
among other things, costs of investigation, removal costs for 88,570 tons
of soil, consulting fees and attorneys' fees incurred to the date of the
letter. In the 2001 demand letter, NOP stated that it would also seek all
additional future costs as they are incurred. The Partnership engaged
counsel and developed information sufficient to respond to the issues
raised by NOP's demands.

In July 2002, NOP, the Partnership and other allegedly responsible
parties reached a proposed settlement of this matter. However, the
settlement negotiations broke down over the nature and scope of various
parties' commitments at that time. For the quarter ended June 30, 2002,
the Partnership recorded as a liability its share of the proposed
settlement payment to NOP.

In February 2003, a settlement of this matter was reached involving
NOP, the Partnership and other allegedly responsible parties. The
settlement provides, among other things: that the Partnership contribute
$350,000 of the total $1,460,000 paid by the allegedly responsible parties
in settlement of the matter; a release among the parties for any liability
for the contamination on the NOP site allegedly originating at any time
from the underground storage tank system on the 1001 Property site, subject
to NOP's rights to pursue Seafo, Inc. ("Seafo"), one of the allegedly
responsible parties and the current owner of the 1001 Property, under
certain circumstances for recontamination; NOP's indemnification of the
Partnership against any and all claims by any person incurred in connection
with hazardous substances that may migrate to the NOP site from the
underground storage tank system on the 1001 Property after the effective
date of the settlement agreement; the commitment by Seafo to use its best
effort at its sole expense to expeditiously complete all necessary
investigation, remedial action and closure reporting to obtain a no further
action letter from the Washington State Department of Ecology concerning
the alleged releases associated with the underground storage tank system on
the 1001 Property; Seafo's release of all of the parties to the settlement
agreement for all liability and responsibility relating to any hazardous
substances allegedly originating at any time from the underground storage
tank system; and a Seafo covenant that it shall not allege that any of the
other parties has any obligation or duty under the common law or any
statute or contract to take any action or pay any sum of money relating to
hazardous substances originating from the underground storage tank system.

PARTNERSHIP AGREEMENT

Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are allocated 96% to the Holders
of Interests and 4% to the General Partners. Profits from the sale of
investment properties are allocated to the General Partners to the greatest
of (i) 1% of such profits, (ii) the amount of cash distributions to the
General Partners, or (iii) an amount which will reduce the General
Partners' capital account deficits (if any) to a level consistent with the
gain anticipated to be realized from the sale of properties. Losses from
the sale of properties are allocated 1% to the General Partners. The
remaining profits and losses are allocated to the Holders of Interests.

The General Partners are not required to make any additional capital
contributions except under certain limited circumstances upon termination
of the Partnership. Distributions of "Net cash receipts" of the
Partnership are allocated 90% to the Holders of Interests and 10% to the
General Partners (of which 6.25% constitutes a management fee to the
Corporate General Partner for services in managing the Partnership).

The Partnership Agreement provides that the General Partners shall
receive as a distribution of the proceeds (net after expenses and
liabilities and retained working capital) from the sale or refinancing of a
real property of up to 3% of the selling price of a property, and that the
remaining net proceeds for any property sold or refinanced be distributed
85% to the Holders of Interests and 15% to the General Partners. However,
prior to such distributions being made, the Holders of Interests are
entitled to receive 99% of net sale or refinancing proceeds and the General
Partners are entitled to receive 1% until the Holders of Interests (i) have
received cumulative cash distributions from the Partnership's operations
which, when combined with net sale or refinancing proceeds previously
distributed, equal a 6% annual return on the Holders' average capital
investment for each year (their initial capital investment as reduced by
net sale or refinancing proceeds previously distributed) and (ii) have
received cash distributions of net sale or refinancing proceeds in an
amount equal to the Holders' aggregate initial capital investment in the
Partnership. If upon the completion of the liquidation of the Partnership
and the distribution of all Partnership funds, the Holders of Interests
have not received the amounts in (i) and (ii) above, the General Partners
will be required to return all or a portion of the 1% distribution of net
sale or refinancing proceeds described above in an amount equal to such
deficiency in payments to the Holders of Interests pursuant to (i) and (ii)
above. The Holders of Interests have not received and are not expected to
receive distributions in the amounts described in (i) and (ii) above. As
of the date of this report, the General Partners have received $123,891 in
distributions of net sale proceeds which are expected to be returned in
connection with the liquidation and termination of the Partnership.

TRANSACTIONS WITH AFFILIATES

The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investment properties. Fees, commissions
and other expenses required to be paid by the Partnership to the General
Partners and their affiliates for the years ended December 31, 2002, 2001
and 2000 are as follows:

UNPAID AT
DECEMBER 31,
2002 2001 2000 2002
-------- ------ ------ ------------

Insurance commissions . . . . . .$ -- -- 1,697 --
Reimbursement (at cost) for
accounting services. . . . . . . 53,099 30,086 21,697 --
Reimbursement (at cost) for
portfolio management services. . 23,238 14,407 16,794 --
Reimbursement (at cost) for
legal services . . . . . . . . .116,469 41,929 19,093 --
Reimbursement (at cost) for
administrative charges and
other out-of-pocket expenses . . 29,801 12,288 4,043 --
-------- ------ ------ ------
$222,607 98,710 63,324 --
======== ====== ====== ======

In September of 2002, the Partnership received final dividends of
approximately $28,000 and $35,000 from Carlyle Investors, Inc. and Carlyle
Managers, Inc., respectively, and a final distribution of approximately
$3,700 from Carlyle-XIII Associates, L.P., related to the dissolution and
liquidation of these companies following the sale of JMB/NYC's indirect
interest in the 237 Partnership.

SUPPLEMENTARY QUARTERLY DATA (UNAUDITED)

2002
----------------------------------------------
3/31 6/30 9/30 12/31
---------- ---------- ---------- ----------

Total income. . . . . . $ 15,580 14,356 87,504 9,828
========== ========== ========== ==========
Earnings (loss) before
Partnership's share of
gain on sale of indirect
partnership interest . $ (146,158) (489,925) (314,014) (487,062)
Partnership's share of
gain on sale of indirect
partnership interest . 820,496 -- 3,352 --
---------- ---------- ---------- ----------
Net earnings (loss) . . $ 674,338 (489,925) (310,662) (487,062)
========== ========== ========== ==========
Net earnings (loss) per
Interest:
Earnings (loss) before
Partnership's share
of gain on sale of
indirect partnership
interest . . . . . . $ (.40) (1.34) (.86) (1.34)
Partnership's share of
gain on sale of
indirect partnership
interest . . . . . . 2.32 -- .01 --
---------- ---------- ---------- ----------
Net earnings (loss) $ 1.92 (1.34) (.85) (1.34)
========== ========== ========== ==========

2001
----------------------------------------------
3/31 6/30 9/30 12/31
---------- ---------- ---------- ----------

Total income. . . . . . $ 28,993 33,752 31,289 20,283
========== ========== ========== ==========
Earnings (loss) before
Partnership's share of
gain on sale of indirect
partnership interest . $3,437,804 (157,955) (109,262) (258,322)
Partnership's share of
gain on sale of indirect
partnership interest . 343,038 -- -- --
---------- ---------- ---------- ----------
Net earnings (loss) . . $3,780,842 (157,955) (109,262) (258,322)
========== ========== ========== ==========

Net earnings (loss) per
Interest:
Earnings (loss) before
Partnership's share of
gain on sale of
indirect partnership
interest . . . . . . $ 9.38 (.43) (.30) (.71)
Partnership's share of
gain on sale of
indirect partnership
interest . . . . . . .97 -- -- --
---------- ---------- ---------- ----------
Net earnings (loss) $ 10.35 (.43) (.30) (.71)
========== ========== ========== ==========

In the first quarter of 2001 the Partnership recognized approximately
$3.6 million of income as a result of the termination of an obligation of
the Partnership and the other Affiliated Partners to indemnify the REIT
under certain circumstances. The approximately $3.6 million in income
represents the Partnership's share of the remaining indemnification
obligation that was released in March 2001 in connection with the sale of
JMB/NYC's indirect interest in the 1290 Partnership.

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

There were no changes in or disagreements with accountants during
fiscal year 2002 and 2001.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

The Corporate General Partner of the Partnership is JMB Realty
Corporation ("JMB"), a Delaware corporation. Substantially all of the
outstanding shares of JMB are owned, directly or indirectly, by certain of
its officers, directors, members of their families and their affiliates.
JMB, as the Corporate General Partner, has responsibility for all aspects
of the Partnership's operations, subject to the requirement that purchases
and sales of real property must be approved by the Associate General
Partner of the Partnership, ABPP Associates, L.P., an Illinois limited
partnership with JMB as its sole general partner. The limited partners of
ABPP Associates, L.P. are generally current or former officers and
directors of JMB and their affiliates.

The Partnership is subject to certain conflicts of interest arising
out of its relationships with the General Partners and their affiliates as
well as the fact that the General Partners and their affiliates are engaged
in a range of real estate activities. Certain services have been and may
in the future be provided to the Partnership or its investment properties
by affiliates of the General Partners, including insurance brokerage and
administrative services. In general, such services are to be provided on
terms no less favorable to the Partnership than could be obtained from
independent third parties and are otherwise subject to conditions and
restrictions contained in the Partnership Agreement. The Partnership
Agreement permits the General Partners and their affiliates to provide
services to, and otherwise deal and do business with, persons who may be
engaged in transactions with the Partnership, and permits the Partnership
to borrow from, purchase goods and services from, and otherwise to do
business with, persons doing business with the General Partners or their
affiliates. The timing and amount of cash distributions and allocations of
profits and losses for tax purposes of the Partnership as well as the
amount of expenses charged to the Partnership for various services may be
affected by various determinations by the Corporate General Partner under
the Partnership Agreement. For example, the Corporate General Partner
makes or has made decisions concerning whether and when to sell (or consent
to the sale of) an investment property, the establishment and maintenance
of reasonable reserves and the determination of the sources (i.e., offering
proceeds, cash generated from operations or sale proceeds) and uses or
distribution of such reserves, the timing of expenditures and the
appropriate amount of reimbursements to the Corporate General Partner and
its affiliates for legal, accounting, portfolio management and other
services charged to the Partnership, and the timing and amount of the
allocation of certain tax items under the Partnership Agreement between the
General Partners, on the one hand, and the Holders of Interests, on the
other hand. As a result, the Corporate General Partner may have a conflict
of interest in making these and other decisions because of the involvement
of the Corporate General Partner and its affiliates in the transactions
with or involving the Partnership.

The names, positions held and length of service therein of the
directors and executive officers of the Corporate General Partner of the
Partnership are as follows:

SERVED IN
NAME OFFICE OFFICE SINCE
- ---- ------ ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Neil G. Bluhm President 5/03/71
Director 5/03/71
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Director 3/14/73
John G. Schreiber Director 3/14/73
H. Rigel Barber Chief Executive Officer 8/01/93
Executive Vice President 1/02/87
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Gailen J. Hull Senior Vice President 6/01/88
Chief Financial Officer 8/01/02

Effective May 31, 1996, the Board of Directors of JMB established a special
committee that includes Messrs. Malkin, Glazov, Nathan and Schreiber to
deal with all matters relating to tender offers for Interests.

There is no family relationship among any of the foregoing directors
or officers. The foregoing directors have been elected to serve until the
next annual meeting of the Corporate General Partner. All of the foregoing
officers have been elected to serve terms until the first meeting of the
Board of Directors held after the next annual meeting of the Corporate
General Partner. There are no arrangements or understandings between or
among any of said directors or officers and any other person pursuant to
which any director or officer was elected as such.

JMB is also the managing general partner of JMB Income Properties,
Ltd.-V ("JMB Income-V").

Most of the foregoing directors and officers are also officers and/or
directors of various affiliated companies of JMB. Most of such directors
and officers are also partners, directly or indirectly, in the Associate
General Partner in the Partnership.

The business experience during the past five years of each such
director and officer of the Corporate General Partner of the Partnership,
in addition to that described above, includes the following:

Judd D. Malkin (age 65), in addition to currently being the Chairman
and a director of JMB, was also its Chief Financial Officer from February
1996 until August 2002. He was also Chairman and Chief Financial Officer
of Carlyle Managers, Inc., the general partner of JMB/NYC until its
dissolution in September 2002. He is an individual general partner of JMB
Income-V. Mr. Malkin has been associated with JMB since October, 1969. He
is also a director of Chisox Corporation, which is the general partner of a
limited partnership that owns the Chicago White Sox, a Major League
Baseball team, and a director of CBLS, Inc., which is the general partner
of the general partner of a limited partnership that owns the Chicago
Bulls, a National Basketball Association team. Mr. Malkin was also Co-
Chairman of the Board of Directors of Urban Shopping Centers, Inc. from its
inception in 1993 until November 2000.

Neil G. Bluhm (age 65) was Executive Vice President of Carlyle
Managers, Inc., the general partner of JMB/NYC until its dissolution in
September 2002. He is an individual general partner of JMB Income-V. Mr.
Bluhm has been associated with JMB since August, 1970. Mr. Bluhm has also
been a principal of Walton Street Capital, L.L.C., which sponsors real
estate investment funds, since its inception in November 1994. He was also
Co-Chairman of the Board of Directors of Urban Shopping Centers, Inc. from
its inception in 1993 until November 2000. He is a member of the Bar of
the State of Illinois.

Burton E. Glazov (age 64) has been associated with JMB since June,
1971. He served as an Executive Vice President of JMB until December 1990,
when he retired. He is a member of the Bar of the State of Illinois.

Stuart C. Nathan (age 61) was, until August 2001, an Executive Vice
President of JMB and, until December 2000, an officer and/or director of
certain JMB affiliates, including being an Executive Vice President of
Carlyle Managers, Inc., which was the general partner of JMB/NYC until its
dissolution in September 2002. Mr. Nathan has been associated with JMB
since July, 1972. He is a member of the Bar of the State of Illinois.

John G. Schreiber (age 56) has been associated with JMB since
December, 1970. Mr. Schreiber is President of Centaur Capital Partners,
Inc., a family investment firm. He is also co-founder and partner of
Blackstone Real Estate Advisors, L.P., which manages large real estate
private equity funds. Mr. Schreiber is a trustee of AMLI Residential
Properties Trust and a director of Host Marriott Corporation and The Rouse
Company, as well as a director of a number of mutual funds advised by T.
Rowe Price Associates, Inc. He is also a director of The Brinkman Group,
Ltd. From February 1995 until November 2000, Mr. Schreiber was a director
of Urban Shopping Centers, Inc. Prior to his retirement as an officer of
JMB in 1990, Mr. Schreiber was Chairman of JMB/Urban Development Co. and an
Executive Vice President of JMB. He received an M.B.A. from Harvard
University Graduate School of Business in 1970.

H. Rigel Barber (age 54) was Vice President of Carlyle Managers, Inc.,
the general partner of JMB/NYC until its dissolution in September 2002.
Mr. Barber has been associated with JMB since March, 1982. He holds a J.D.
degree from the Northwestern Law School and is a member of the Bar of the
State of Illinois.

Gary Nickele (age 50) was Vice President of Carlyle Managers, Inc.,
the general partner of JMB/NYC until its dissolution in September 2002.
Mr. Nickele has been associated with JMB since February, 1984. He holds a
J.D. degree from the University of Michigan Law School and is a member of
the Bar of the State of Illinois.

Gailen J. Hull (age 54) has been associated with JMB since March,
1982. He holds a Masters degree in Business Administration from Northern
Illinois University and is a Certified Public Accountant.

ITEM 11. EXECUTIVE COMPENSATION

The executive officers and directors of the Corporate General Partner
receive no direct remuneration in such capacities from the Partnership.
The Partnership is required to pay a management fee to the Corporate
General Partner and the General Partners are entitled to receive a share of
cash distributions, when and as cash distributions are made to the Holders
of Interests, and a share of profits or losses. Reference is made to the
Note entitled "Partnership Agreement" for a description of such
distributions and allocations. In 2002, the General Partners received no
distributions and the Corporate General Partner received no management fee.

The General Partners received an allocation of Partnership profits for
Federal income tax purposes aggregating $2,818,209 in 2002. Such
allocation of profits reduces the deficit balances in the capital accounts
of the General Partners and an obligation under the terms of the
Partnership Agreement to make capital contributions in the amount of the
deficit balances in their capital accounts (determined for Federal income
tax purposes) upon termination of the Partnership.

If upon the completion of the liquidation of the Partnership and the
distribution of all Partnership funds, the Holders of Interest have not
received a certain specified amount of net sale or refinancing proceeds,
the General Partners will be required to return the net sale or refinancing
proceeds previously received by them, $123,891 as of the date of this
report. The Holders of Interests are not expected to receive the specified
amount of net sale or refinancing proceeds. Accordingly, the General
Partners will be required to return the $123,891 of sale or refinancing
proceeds prior to termination of the Partnership.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Partnership is permitted to engage in various transactions
involving the Corporate General Partner of the Partnership or its
affiliates, which may involve conflicts of interest for the General
Partners or their affiliates. For a discussion of certain potential
conflicts of interest involving the Corporate General Partner as well as a
description of its directors and officers, reference is made to Item 10.
Directors and Executive Officers in this report.

The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses or out-of-pocket expenses and salaries
and related salary expenses relating to the administration of the
Partnership and the acquisition and operation of the Partnership's real
property investments. In 2002, the Corporate General Partner of the
Partnership or its affiliates were paid $29,801 as reimbursement for such
out-of-pocket expenses. The Corporate General Partner or its affiliates
are also entitled to reimbursements for portfolio management, legal and
accounting services. Such costs for 2002 were $192,806, all of which was
paid at December 31, 2002.

ITEM 14. CONTROLS AND PROCEDURES

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14 of
the Securities Exchange Act of 1934 (the "Exchange Act") promulgated
thereunder, the principal executive officer and the principal financial
officer of the Corporate General Partner have evaluated the effectiveness
of the Partnership's disclosure controls and procedures as of a date within
90 days prior to the date of the filing of this report (the "Evaluation
Date") with the Securities and Exchange Commission ("SEC"). Based on such
evaluation, the principal executive officer and the principal financial
officer have concluded that the Partnership's disclosure controls and
procedures were effective as of the Evaluation Date to ensure that
information required to be disclosed in this report was recorded,
processed, summarized and reported within the time period specified in the
applicable SEC rules and form for this report. Furthermore, there have
been no significant changes in the internal controls or in other factors
that could significantly affect internal controls subsequent to the date of
their most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

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

(1) Financial Statements (See Index to Financial Statements
filed with this annual report).

(2) Exhibits.

3-A. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the
Prospectus, is hereby incorporated herein by
reference to Exhibit 3-A to the Partnership's
Report for June 30, 2002 on Form 10-Q (File No.
0-12791) dated August 12, 2002.

3-B. Acknowledgement of rights and duties of the
General Partners of the Partnership between ABPP
Associates, L.P. (a successor Associate General
Partner of the Partnership) and JMB Realty
Corporation as of December 31, 1995 is hereby
incorporated herein by reference to Exhibit 3-B
to the Partnership's Report for September 30,
1996 on Form 10-Q (File No. 0-12791) dated
November 8, 1996.

10-A. Agreement of Limited Partnership of Carlyle-XIII
Associates L.P. is hereby incorporated by
reference to Exhibit 19.1 to the Partnership's
Report on Form 10-Q (File No. 0-12791) dated
May 14, 1993.

10-B. Second Amended and Restated Articles of
Partnership of JMB/NYC Office Building
Associates, L.P. are hereby incorporated herein
by reference to Exhibit 10-J to the Partnership's
Report on Form 10-K (File No. 0-12791) for
December 31, 1993 dated March 28, 1994.

10-C. Amendment No. 1 to the Agreement of Limited
Partnership of Carlyle-XIII Associates, L.P. is
hereby incorporated by reference to Exhibit 10-U
to the Partnership's Report for March 31, 1995 on
Form 10-Q (File No. 0-12791) dated May 11, 1995.

10-D. Amendment No. 1 to the Second Amended and
Restated Articles of Partnership of JMB/NYC
Office Building Associates, L.P. is hereby
incorporated by reference to Exhibit 10-V to the
Partnership's Report for March 31, 1995 on
Form 10-Q (File No. 0-12791) dated May 11, 1995.

10-E. Indemnification agreement between Property
Partners, L.P., Carlyle-XIII Associates, L.P. and
Carlyle-XIV Associates, L.P. dated as of
October 10, 1996 is hereby incorporated by
reference to Exhibit 10-V to the Partnership's
Report for December 31, 1996 on Form 10-K (File
No. 0-12791) dated March 21, 1997.

10-F. Restructuring Agreement related to 237/1290 Upper
Tier Associates, L.P. dated October 27, 1999 is
incorporated herein by reference to Exhibit 10-W
to the Partnership's Report for December 31, 1999
on Form 10-K (File No. 0-12791) dated March 24,
2000.

10-G. Contribution Agreement between 237/120 Upper Tier
Associates, L.P. and Oak Hill Strategic Partners,
L.P. is incorporated herein by reference to
Exhibit 10-X to the Partnership's Report for
December 31, 1999 on Form 10-K (File No. 0-12791)
dated March 24, 2000.

10-H. Amendment and Release Agreement by and among
Metropolis Realty Trust, Inc., Property Partners,
L.P., Carlyle Associates-XIII Associates, L.P.
and Carlyle-XIV Associates, L.P. is incorporated
herein by reference to Exhibit 10-Y to the
Partnership's Report for December 31, 1999 on
Form 10-K (File No. 0-12791) dated March 24,
2000.

10-I. Third Amended and Restated Partnership Agreement
of 237/1290 Upper Tier Associates, L.P. by and
between 237/1290 Upper Tier GP Corp. Carlyle
Managers, Inc., a JMB/NYC Office Building
Associates, L.P. dated November 19, 1999 is
incorporated herein by reference to Exhibit 10-Z
to the Partnership's Report for December 31, 1999
on Form 10-K (File No. 0-12791) dated March 24,
2000.

10-J. Intercreditor Agreement among Michigan Avenue
L.L.C., Carlyle-XIII Associates, L.P. Carlyle-XIV
Associates, L.P. and Property Partners, L.P.
dated November 19, 1999 is incorporated herein by
reference to Exhibit 10-AA to the Partnership's
Report for December 31, 1999 on Form 10-K (File
No. 0-12791) dated March 24, 2000.

21. List of Subsidiaries.

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

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

----------------

No annual report or proxy material for the fiscal year 2002 has been
sent to the Partners of the Partnership. An annual report will be sent to
the Partners subsequent to this filing.

SIGNATURES

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII

By: JMB Realty Corporation
Corporate General Partner

GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 26, 2003

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

By: JMB Realty Corporation
Corporate General Partner

JUDD D. MALKIN
By: Judd D. Malkin, Director
Date: March 26, 2003

NEIL G. BLUHM
By: Neil G. Bluhm, Director
Date: March 26, 2003

H. RIGEL BARBER
By: H. Rigel Barber, Chief Executive Officer
Principal Executive Officer
Date: March 26, 2003

GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President and
Chief Financial Officer
Principal Accounting Officer and
Principal Financial Officer
Date: March 26, 2003

By: BURTON E. GLAZOV
Burton E. Glazov, Director
Date: March 26, 2003

CERTIFICATIONS
--------------

I, H. Rigel Barber, certify that:

1. I have reviewed this annual report on Form 10-K of Carlyle Real
Estate Limited Partnership - XIII;

2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent functions):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether material, that involves management or other
employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officer and I have indicated in
this annual report whether there were significant changes in
internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date:March 26, 2003

/s/ H. Rigel Barber
----------------------------
Principal Executive Officer

CERTIFICATIONS
--------------

I, Gailen J. Hull, certify that:

1. I have reviewed this annual report on Form 10-K of Carlyle Real
Estate Limited Partnership - XIII;

2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent functions):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officer and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date:March 26, 2003

/s/ Gailen J. Hull
----------------------------
Principal Accounting Officer

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII

EXHIBIT INDEX

Document
Incorporated
By Reference Page
------------ ----
3-A. Amended and Restated Agreement of
Limited Partnership set forth as
Exhibit A to the Prospectus Yes

3-B. Acknowledgement of rights and duties
of the General Partners of the
Partnership between ABPP Associates,
L.P. (a successor Associate General
Partner of the Partnership) and
JMB Realty Corporation as of
December 31, 1995 Yes

10-A. Agreement of Limited Partnership of
Carlyle-XIII Associates L.P. Yes

10-B. Second Amended and Restated Articles
of Partnership of JMB/NYC Office
Building Associates, L.P. Yes

10-C. Amendment No. 1 to the Agreement of
Limited Partnership of Carlyle-XIII
Associates, L.P. Yes

10-D. Amendment No. 1 to the Second Amended
and Restated Articles of Partnership
of JMB/NYC Office Building Associates,
L.P. Yes

10-E. Indemnification agreement between
Property Partners, L.P., Carlyle-XIII
Associates, L.P. and Carlyle-XIV
Associates, L.P. dated as of
October 10, 1996 Yes

10-F. Restructuring Agreement related to
237/1290 Upper Tier Associates, L.P.
dated October 27, 1999 Yes

10-G. Contribution Agreement between
237/120 Upper Tier Associates, L.P.
and Oak Hill Strategic Partners, L.P. Yes

10-H. Amendment and Release Agreement by
and among Metropolis Realty Trust, Inc.
Property Partners, L.P., Carlyle
Associates-XIII Associates, L.P. and
Carlyle-XIV Associates, L.P. Yes

10-I. Third Amended and Restated Partnership
Agreement of 237/1290 Upper Tier
Associates, L.P. by and between
237/1290 Upper Tier GP Corp. Carlyle
Managers, Inc., a JMB/NYC Office
Building Associates, L.P. dated
November 19, 1999 Yes

10-J. Intercreditor Agreement among
Michigan Avenue L.L.C., Carlyle-XIII
Associates, L.P. Carlyle-XIV Associates,
L.P. and Property Partners, L.P.
dated November 19, 1999 Yes

Document
Incorporated
By ReferencePage
----------------

21. List of Subsidiaries No

99. Certification Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act
of 2002 No