JMB 245 PARK AVENUE ASSOCIATES LTD - 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, 2003 Commission File Number 0-13545

JMB/245 PARK AVENUE ASSOCIATES, LTD.
------------------------------------------------------
(Exact name of registrant as specified in its charter)

Illinois 36-3265541
(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 312-915-1960

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 12b-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 . . . . . . . . . . . . . . . . . . 4

Item 3. Legal Proceedings. . . . . . . . . . . . . . . 4

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

PART II

Item 5. Market for the Registrant's
Common Equity, Related Security
Holder Matters and Issuer Purchases
of Equity Securities . . . . . . . . . . . . . 5

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

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

Item 7A. Quantitative and Qualitative
Disclosures About Market Risk. . . . . . . . . 11

Item 8. Financial Statements and
Supplementary Data . . . . . . . . . . . . . . 12

Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . 28

Item 9A. Controls and Procedures. . . . . . . . . . . . 28

PART III

Item 10. Directors and Executive Officers
of the Registrant. . . . . . . . . . . . . . . 28

Item 11. Executive Compensation . . . . . . . . . . . . 30

Item 12. Security Ownership of Certain
Beneficial Owners and Management and
Related Security Holder Matters. . . . . . . . 31

Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . . 32

Item 14. Principal Accountant Fees and Services . . . . 32

PART IV

Item 15. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . . 33

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 35

i

PART I

ITEM 1. BUSINESS

Unless otherwise indicated, all references to "Notes" are to Notes to
Consolidated Financial Statements of JMB/245 Park Avenue Associates, Ltd.
contained in this report. Capitalized terms used herein, but not defined,
have the same meanings as used in the Notes.

The registrant, JMB/245 Park Avenue Associates, Ltd. (the
"Partnership"), is a limited partnership formed in 1983 and currently
governed by the Revised Uniform Limited Partnership Act of the State of
Illinois for the original purpose of acquiring and owning an approximate
48.25% interest in 245 Park Avenue Company, a New York general partnership,
("245 Park" or the "Joint Venture") which owned and operated an office
building located at 245 Park Avenue, New York, New York. The Partnership
was admitted to the Joint Venture through the purchase of one of the
existing unaffiliated joint venture partner's interests. The unaffiliated
venture partners (the "O&Y partners") were affiliates of Olympia & York
Developments, Ltd. ("O&Y"). On May 7, 1984, the Partnership commenced a
private offering of $124,300,000 in Limited Partnership Interests (the
"Interests") pursuant to a Private Placement Memorandum (the "Private
Placement Memorandum") in accordance with Rules 501-503 and 506 of
Regulation D of the Securities Act of 1933. A total of 1,000 Interests
were sold at $124,300 per Interest (except for twenty interests which were
sold net of any selling commission) of which $10,500 per Interest was due
upon admission, with the remaining purchase price paid in annual
installments from 1985 through 1990. The offering closed on June 28, 1984.

The holders of Interests (herein after "Holders" or "Holders of Interests")
in the Partnership share in their portion of the benefits of ownership of
the Partnership's real property investment according to the number of
Interests held.

As a result of the financial difficulties of the O&Y partners, in
October 1995 each of the O&Y partners and certain other O&Y affiliates (but
not the Joint Venture) filed for bankruptcy protection from creditors under
Chapter 11 of the United States Bankruptcy Code. During 1996, the O&Y
partners and these certain other O&Y affiliates restructured their
ownership interests in various office buildings, including their interest
in the 245 Park Avenue office building. In connection with such
restructuring, the Joint Venture filed for bankruptcy under Chapter 11 of
the United States Bankruptcy Code in April 1996 seeking approval of a plan
of reorganization by its creditors and the partners of the Joint Venture,
including the Partnership, and in August 1996, the Third Amended Joint Plan
of Reorganization and Disclosure Statement (the "Plan") was filed with the
Bankruptcy Court. The Plan was accepted by the various classes of claims
and equity holders and confirmed by the Court on September 20, 1996. The
Plan became effective on November 21, 1996 ("Effective Date") upon
completion of several additional steps. The conditions to the Plan
included, but were not limited to, the completion of significant
refinancing and capital transactions regarding 245 Park Avenue as well as
other properties. Pursuant to the terms of the Plan, the Partnership owned
through JMB 245 Park Avenue Holding Company, LLC ("245 Park Holding") an
approximate 5.4% general partner interest (slightly diluted from the
original ownership percentage by notes converted to equity) represented by
5,673.751 Class A Units in Brookfield Financial Properties, L.P. ("BFP,
LP"), formerly known as World Financial Properties, L.P. The managing
general partner of BFP, LP is an entity affiliated with certain O&Y
creditors and the proponents of the Plan governing the restructuring and,
subject to the partnership agreement of BFP, LP and the JMB Transaction
Agreement (discussed below), has full authority to manage its affairs. 245
Park Holding is a limited liability company in which the Partnership is a
99% member and WFP Property G.P. Corp. ("WFP, GP"), which is an affiliate
of the managing general partner of BFP, LP, is a 1% member.

BFP, LP's principal assets are majority and controlling interests in
the following office buildings:

APPROXIMATE RENTABLE AREA
PROPERTY AND LOCATION (Includes Office and Retail Space)

One World Financial Center 1,600,000 square feet
New York, New York

Two World Financial Center 2,500,000 square feet
New York, New York

Three World Financial Center 2,100,000 square feet
New York, New York

Four World Financial Center 1,800,000 square feet
New York, New York

One Liberty Plaza 2,200,000 square feet
New York, New York

245 Park Avenue 1,700,000 square feet
New York, New York

300 Madison Avenue 1,200,000 square feet
New York, New York

53 State Street 1,150,100 square feet
Boston, Massachusetts

75 State Street 1,000,000 square feet
Boston, Massachusetts

The One, Two and Four World Financial Center and 53 State Street
office buildings are owned subject to ground leases of the underlying land.

The Partnership's interest in BFP, LP was pledged as collateral for
certain notes payable (collectively "the JMB Notes") which aggregated
approximately $89,337,000 in principal and interest at December 31, 2002,
(immediately prior to repayment), to JMB Realty Corporation ("JMB"). The
security agreements for the JMB Notes required mandatory payment of
principal and interest out of any net proceeds received upon the
redemption, refinancing or other disposition of, or any distribution made
with respect to, the Partnership's interest in BFP, LP.

On December 31, 2002 (the "Redemption Date") 245 Park Holding entered
into a redemption agreement (the "Partial Redemption") by and among 245
Park Holding, WFP, GP and BFP, LP pursuant to which 245 Park Holding
transferred and BFP, LP thereby redeemed 5,106.376 Class A Units from 245
Park Holding, or 90% of its approximate 5.4% interest (the "Redeemed
Interest"), in BFP, LP, and 245 Park Holding received a distribution of
approximately $56,109,000 (the "Redemption Distribution"). 245 Park
Holding's remaining interest in BFP, LP consists of 567.375 Class A Units
(the "Retained Interest"). In accordance with the 245 Park Holding limited
liability company agreement, 245 Park Holding distributed approximately
$55,548,000 (99% of the Redemption Distribution) to the Partnership and
approximately $561,000 (1% of the Redemption Distribution) to WFP, GP. The
Partnership received its share of the Redemption Distribution on the
Redemption Date and in accordance with the security agreements relating to
the JMB Notes, the Partnership then paid to JMB approximately $55,548,000
as repayment toward the JMB Notes. The Partnership reversed previously
accrued interest of approximately $4,158,000 and accordingly, four of the
five notes outstanding were retired. Interest on the remaining JMB Note
accrues at a rate of 2% per annum and is compounded annually. The
remaining JMB Note is secured by the Partnership's interest in BFP, LP.
The unpaid principal and accrued and deferred interest balance on the
remaining JMB Note at December 31, 2003 was approximately $30,131,000.

The Partnership recognized approximately $79,194,000 of net gain in
2002 on the Partial Redemption for financial reporting purposes. No gain
was recognized by the Partnership for Federal income tax purposes.

In connection with the Partial Redemption, the limited partnership
agreement of BFP, LP was amended (the "Amendment") to, among other things,
provide for the right of the Partnership to consent to the nomination of an
independent director to the board of directors of Brookfield Properties
Corporation ("BPC"), the parent company of the managing general partner of
BFP, LP. The Amendment also generally provides that in the event either
(i) a sale or other disposition of the 245 Park Avenue Building by BFP, LP
results in the recognition by the Partnership of gain for Federal income
tax purposes, or (ii) as a result of a merger or consolidation of BFP, LP,
the Partnership thereafter holds less than one-half of its Retained
Interest in a form which does not give rise to a material amount of gain
for Federal income tax purposes, the Partnership may elect to sell to BFP,
LP, or BFP, LP may elect to redeem from the Partnership, the Retained
Interest at its fair market value (as defined in the BFP, LP partnership
agreement) per Class A Unit, but in no event less than 80% ($8,790), and no
greater than 120% ($13,186), of the Redemption Distribution per Class A
Unit in the Partial Redemption.

Under the terms of the Amendment, BFP, LP is obligated to use its
commercially reasonable efforts, in any agreement of merger or
consolidation entered into by BFP, LP on or before December 2007, to the
extent that the consideration is comprised in whole or in part of equity
interests, to provide for the Partnership to obtain its share of such
equity interests in a form such that the Partnership will not recognize a
material amount of gain for Federal income tax purposes. If BFP, LP,
having used its commercially reasonable efforts, is unable to provide for
the Partnership to receive such an equity interest, BFP, LP must pay to the
Partnership, in addition to the Partnership's share of the merger
consideration, a cash amount equal to the percentage of the merger
consideration in the form of equity multiplied by a number which is $14
million in 2003 and reduces by $1.5 million per year through the year 2007.

BFP, LP has had the right to sell the 245 Park Avenue property without
the consent of the Partnership since January 2000. BFP, LP has notified
the Partnership that it sold a 49% interest in the 245 Park Avenue property
to an unaffiliated third party on October 2, 2003. As a result of such
transaction, and subject to the terms of the transaction, a substantial
amount of gain for Federal income tax purposes could be allocated to the
Holders of Interests without any distribution of cash. The tax
consequences, while having a significant effect on the General Partners and
Holders of Interests for Federal income tax purposes, do not effect the
consolidated financial statements of the Partnership. The Partnership is
not expecting to receive any significant proceeds from the sale of the 49%
interest in 245 Park Avenue. As discussed below, it is unlikely that the
Holders of Interests ever will receive any significant portion of their
original investment.

BFP, LP has a substantial amount of indebtedness outstanding. If any
of the buildings in which BFP, LP has an interest are sold, any proceeds
would be first applied to repayment of the mortgage and other indebtedness
of BFP, LP. In any event, any net proceeds obtained by the Partnership
could then be available to satisfy the remaining JMB Note. Only after such
applications would any remaining proceeds be available to be distributed to
the Holders of Interests. Similarly, in the event of a sale or other
disposition of the Retained Interest (including a redemption pursuant to an
election discussed above), the Partnership's share of the proceeds of such
sale or disposition would be available to satisfy the remaining JMB Note.
Only after such application would remaining proceeds, if any, be available
to be distributed to the Holders of Interests.

As a result, it is unlikely that the Holders of Interests ever will
receive any significant portion of their original investment. However, it
is expected that Holders of Interests will be allocated a substantial
amount of gain for Federal income tax purposes as a result of transactions
which have occurred or may occur over the remaining term of the
Partnership. These transactions include (i) a full or partial sale or
other disposition of the 245 Park Avenue property or other properties in
which BFP, LP owns an interest; (ii) a sale or other disposition of the
Partnership's interest in BFP, LP (including a redemption of the Retained
Interest); or (iii) a significant reduction in the indebtedness of the 245
Park Avenue property or other indebtedness of the Partnership for Federal
income tax purposes. Moreover, none of these transactions is expected to
result in Holders of Interests receiving any significant cash
distributions. The amount of gain for Federal income tax purposes to be
allocated to a Holder of Interests over the remaining term of the
Partnership is expected to be, at a minimum, equal to all or most of the
amount of such Holder's deficit capital account for tax purposes. Such
gain may be offset by suspended losses from prior years (if any) that have
been allocated to the Holder of Interests. The actual tax liability of
each Holder of Interests will depend on such Holder's own tax situation.

The Partnership has no employees.

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

ITEM 2. PROPERTIES

The Partnership owns an indirect, minority interest in the properties
referred to under Item 1 above to which reference is hereby made for a
description of said properties. The Partnership's interest in BFP, LP is
pledged as collateral for a note payable to JMB with principal and deferred
interest aggregating approximately $30,131,000 at December 31, 2003.

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
the fourth quarter of 2003.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED SECURITY
HOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

As of January 1, 2004, there were 872 record holders of the 982
Interests outstanding 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. In addition, the Interests have not been
registered under the Securities Act of 1933, as amended, or (with certain
exceptions) under state securities laws. Transfers of the Interests must
be made in compliance with applicable federal and state securities laws and
are subject to the restrictions on transfers set forth in Article 14 (pages
15-17) of the Amended and Restated Agreement of Limited Partnership of the
Partnership, which are incorporated herein by reference to Exhibit 99 to
this annual report. A sale or other transfer of an Interest may result in
material adverse Federal income tax consequences.

The Partnership has not made any distributions since 1989. The
Partnership's interest in BFP, LP is pledged as collateral for a note
payable with accrued and deferred interest (with principal and interest
aggregating approximately $30,131,000 at December 31, 2003) to JMB, which
requires mandatory payment of principal and interest out of (i) any
distributions received from BFP, LP, and (ii) any net proceeds received
upon the sale, refinancing or other disposition of the Partnership's
interest in BFP, LP. Reference is made to the section entitled "Investment
in Unconsolidated Venture" in the Notes and Item 7 for a discussion of the
restrictions on the distributions (if any) to the Partnership from BFP, LP.

ITEM 6. SELECTED FINANCIAL DATA
JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
and Consolidated Venture

DECEMBER 31, 2003, 2002, 2001, 2000 AND 1999 (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 but not defined in this Item 7 have the same
meanings as used in Item 1. Business or in the Notes.

The Partnership's future liquidity and ability to continue as a going
concern are dependent upon additional advances from JMB Realty Corporation
("JMB") and there is no assurance that such advances will continue to be
made.

Prior to repayment to JMB (described below) the Partnership had three
term loan notes payable to JMB. One (the "LIBOR Note") of the term loan
notes had an outstanding principal balance of $16,042,000 and bore interest
at a variable rate related to LIBOR plus 2.625% per annum. The other two
term loan notes had an aggregate outstanding principal balance of
approximately $27,195,000 and bore interest at 2% per annum, which accrued
and compounded annually. JMB Realty Corporation ("JMB") had made various
advances to the Partnership, evidenced by a demand note, to make principal
and interest payments on the term loan notes and to pay operating costs of
the Partnership. As of December 31, 2002, JMB had advanced approximately
$12,376,000 on this demand note. Interest accrued on these advances at the
annual rate of prime (as such prime rate changed from time to time) plus
1%. At December 31, 2002, principal and accrued interest on this demand
note aggregated approximately $16,765,000.

Effective January 3, 2001, the Partnership and JMB agreed to extend
the maturity date of the term loan notes from December 31, 1998 to
January 2, 2006 and otherwise to follow literally the various terms of the
notes. As a result, the parties agreed that the Partnership would be
required to pay default interest on each of the three term loan notes (at
the prime rate plus 3% per annum) for the period from the maturity date of
December 31, 1998 to January 3, 2001, the effective date on which JMB and
the Partnership agreed to extend each of the notes. Accordingly,
incremental interest cost relating to the default interest rate aggregating
approximately $7.7 million was recorded as expense in the year ended
December 31, 2000. Under the extended notes, interest accrued under the
same terms as applicable to the term loan notes prior to December 31, 1998.

Interest was due and payable monthly on the LIBOR Note with the outstanding
principal due and payable on January 2, 2006. All principal and accrued
and compounded interest on the other term loan notes were due and payable
on January 2, 2006. Further, all outstanding interest as of December 31,
2000 on the LIBOR Note (approximately $10.8 million) was due and payable
immediately. In 2001, the Partnership issued a new demand note payable to
JMB, secured by the Partnership's interest in BFP, LP and bearing interest
at the prime rate (as such prime rate changed from time to time) plus 1%
per annum with interest accruing and compounding quarterly. Through
December 31, 2002, JMB had advanced approximately $12,903,000 to the
Partnership pursuant to the new demand note. The Partnership used the
advances to pay the outstanding interest on the LIBOR Note through
December 31, 2002 of approximately $12,903,000.

On December 31, 2002 (the "Redemption Date") 245 Park Holding entered
into a redemption agreement (the "Partial Redemption") by and among 245
Park Holding, WFP, GP and BFP, LP pursuant to which 245 Park Holding
transferred and BFP, LP thereby redeemed 5,106.376 Class A Units from 245
Park Holding, or 90% of its approximate 5.4% interest (the "Redeemed
Interest"), in BFP, LP, and 245 Park Holding received a distribution of
approximately $56,109,000 (the "Redemption Distribution"). 245 Park
Holding's remaining interest in BFP, LP consists of 567.375 Class A Units
(the "Retained Interest"). In accordance with the 245 Park Holding limited
liability company agreement, 245 Park Holding distributed approximately
$55,548,000 (99% of the Redemption Distribution) to the Partnership and
approximately $561,000 (1% of the Redemption Distribution) to WFP, GP.

The Partnership received its share of the Redemption Distribution on
the Redemption Date, and in accordance with the security agreements
relating to the JMB Notes, the Partnership then paid to JMB approximately
$55,548,000 as repayment toward the JMB Notes consisting of the following:
(i) the new demand note balance, including accrued interest, of
approximately $14,267,000, (ii) the LIBOR Note balance, including accrued
interest, of approximately $16,098,000, (iii) approximately $8,418,000,
including principal and accrued interest on the other two term loan notes
and (iv) the original demand note principal balance and accrued interest of
approximately $16,765,000. The Partnership also reversed previously
accrued interest of $4,158,000 (of which approximately $483,000 was related
to one of the term loan notes). Accordingly, four of the five JMB Notes
were retired. The unpaid principal and accrued interest balance on the
remaining JMB Note at December 31, 2003 and 2002 was approximately
$30,131,000 and $29,631,000, respectively. The remaining JMB Note, which
is secured by the Partnership's interest in BFP, LP, accrues interest at 2%
per annum, with the interest compounded annually.

The Partnership recognized a net gain in 2002 of approximately
$79,194,000 on the Partial Redemption for financial reporting purposes. No
gain was recognized on the Partial Redemption by the Partnership for
Federal income tax purposes.

In connection with the Partial Redemption, the limited partnership
agreement of BFP, LP was amended (the "Amendment") to, among other things,
provide for the right of the Partnership to consent to the nomination of an
independent director to the board of directors of Brookfield Properties
Corporation ("BPC"), the parent company of the managing general partner of
BFP, LP. The Amendment also generally provides that in the event either
(i) a sale or other disposition of the 245 Park Avenue Building by BFP, LP
results in the recognition by the Partnership of gain for Federal income
tax purposes, or (ii) as a result of a merger or consolidation of BFP, LP,
the Partnership thereafter holds less than one-half of its Retained
Interest in a form which does not give rise to a material amount of gain
for Federal income tax purposes, the Partnership may elect to sell to BFP,
LP, or BFP, LP may elect to redeem from the Partnership, the Retained
Interest at its fair market value (as defined in the BFP, LP partnership
agreement) per Class A Unit, but in no event less than 80% ($8,790), and no
greater than 120% ($13,186), of the Redemption Distribution per Class A
Unit in the Redemption.

Under the terms of the Amendment, BFP, LP is obligated to use its
commercially reasonable efforts, in any agreement of merger or
consolidation entered into by BFP, LP on or before December 2007, to the
extent that the consideration is comprised in whole or in part of equity
interests, to provide for the Partnership to obtain its share of such
equity interests in a form such that the Partnership will not recognize a
material amount of gain for Federal income tax purposes. If BFP, LP,
having used its commercially reasonable efforts, is unable to provide for
the Partnership to receive such an equity interest, BFP, LP must pay to the
Partnership, in addition to the Partnership's share of the merger
consideration, a cash amount equal to the percentage of the merger
consideration in the form of equity multiplied by a number which is $14
million in 2003 and reduces by $1.5 million per year through the year 2007.

BFP, LP has had the right to sell the 245 Park Avenue property without
the consent of the Partnership since January 2000. BFP, LP has notified
the Partnership that it sold a 49% interest in the 245 Park Avenue property
to an unaffiliated third party on October 2, 2003. As a result of such
transaction, and subject to the terms of the transaction, a substantial
amount of gain for Federal income tax purposes could be allocated to the
Holders of Interests without any distribution of cash. Further, the tax
consequences, while having a significant effect on the General Partners and
Holders of Interests for Federal income tax purposes, do not effect the
consolidated financial statements of the Partnership. The Partnership is
not expecting to receive any significant proceeds from the sale of the 49%
interest in 245 Park Avenue. As discussed below, it is unlikely that the
Holders of Interests ever will receive any significant portion of their
original investment.

Persons who are interested in obtaining information concerning BPC
should be aware that it files periodic reports and other information, which
includes information about BFP, LP and its assets and operations, with the
U.S. Securities and Exchange Commission ("SEC") pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"). BPC's filings with the SEC are
available to the public through the SEC's Electronic Data Gathering,
Analysis and Retrieval system accessible through the SEC's web site at
http://www.sec.gov. Interested persons also may read and copy any report,
statement or other information that BPC has filed with the SEC at its
Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549, or
may call the SEC for more information on obtaining information from the
SEC's public reference rooms. This description is provided for
informational purposes only. The Partnership does not prepare, and is not
responsible for the preparation of, any of BPC's reports or other
information it files with the SEC. Those reports and other information are
not intended to be incorporated by reference into this report on Form 10-K,
and the Partnership has no responsibility for the accuracy of any
information included in BPC's reports or other information.

BFP, LP has a substantial amount of indebtedness outstanding. If any
of the buildings in which BFP, LP has an interest are sold, any proceeds
would be first applied to repayment of the mortgage and other indebtedness
of BFP, LP. In any event, any net proceeds obtained by the Partnership
could then be available to satisfy the remaining JMB Note. Only after such
applications would any remaining proceeds be available to be distributed to
the Holders of Interests. Similarly, in the event of a sale or other
disposition of the Retained Interest (including a redemption pursuant to an
election discussed above), the Partnership's share of the proceeds of such
sale or disposition would be available to satisfy the remaining JMB Note.
Only after such application would remaining proceeds, if any, be available
to be distributed to the Holders of Interests.

It is unlikely that the Holders of Interests ever will receive any
significant portion of their original investment. However, it is expected
that Holders of Interests will be allocated a substantial amount of gain
for Federal income tax purposes as a result of transactions which have
occurred or may occur over the remaining term of the Partnership. These
transactions include (i) a full or partial sale or other disposition of the
245 Park Avenue property or other properties in which BFP, LP owns an
interest; (ii) a sale or other disposition of the Partnership's interest in
BFP, LP (including a redemption of the Retained Interest); or (iii) a
significant reduction in the indebtedness of the 245 Park Avenue property
or other indebtedness of the Partnership for Federal income tax purposes.
Moreover, none of these transactions is expected to result in Holders of
Interests receiving any significant cash distributions. The amount of gain
for Federal income tax purposes to be allocated to a Holder of Interests
over the remaining term of the Partnership is expected to be, at a minimum,
equal to all or most of the amount of such Holder's deficit capital account
for tax purposes. Such gain may be offset by suspended losses from prior
years (if any) that have been allocated to the Holder of Interests. The
actual tax liability of each Holder of Interests will depend on such
Holder's own tax situation.

RESULTS OF OPERATIONS

The decrease in cash at December 31, 2003 as compared to December 31,
2002 is primarily due to payments for professional services and general and
administrative expenses in 2003, including amounts that were payable at
December 31, 2002.

The decrease in accounts payable at December 31, 2003 as compared to
December 31, 2002 is primarily due to the timing of payment of certain
legal fees of the Partnership related to the partial redemption of the
Partnership's interest in BFP, LP in December 2002.

The increase in note payable to an affiliate at December 31, 2003 as
compared to December 31, 2002 is due to the addition to the note principal
of the interest for 2003.

Interest and other income for the year ended December 31, 2001
primarily consists of the Partnership's share of the property management
fees from the 245 Park Avenue property. The Partnership's right to receive
such fees terminated at the end of 2001.

The decrease in interest expense for the year ended December 31, 2003
as compared to the same period in 2002 is primarily due to the repayments
toward the JMB Notes made on December 31, 2002. The decrease in interest
expense for the year ended December 31, 2002 as compared to the year ended
December 31, 2001 is due to lower average interest rates on the outstanding
principal balances of the LIBOR Note and the demand notes payable to JMB.

The decrease in professional services for the year ended December 31,
2003 as compared to the same period in 2002 is primarily due to fees for
legal services related to the partial redemption of the Partnership's
interest in BFP, LP in 2002, partially offset by an increase in costs for
accounting services rendered in 2003 in connection with the partial
redemption of the Partnership's interest in BFP, LP in December 2002. The
decrease in professional services for the year ended December 31, 2002 as
compared to the year ended December 31, 2001 is primarily due to legal fees
incurred related to the extension of the Partnership's term loan notes in
2001 and also partially due to lower costs for accounting services in 2002,
partially offset by professional services for legal services related to the
partial redemption of the Partnership's interest in BFP, LP in 2002.

The increase in general and administrative expense for the year ended
December 31, 2002 as compared to the year ended December 31, 2001 is
primarily due to an increase in reimbursements to an affiliate of the
Corporate General Partner for portfolio management services in 2002.

The elimination of the recognition by the Partnership of a share of
earnings (loss) from operations of unconsolidated venture and venture
partner's share of venture operations for the year ended December 31, 2003
is due to the partial redemption of the Partnership's interest in BFP, LP
in December 2002. Because the Partnership has no future funding
obligations, is currently not expecting to receive distributions, has no
influence or control over the day-to-day affairs of BFP, LP and its
investment in BFP, LP has been reduced to less than 1%, subsequent to the
Redemption Date, the Partnership has discontinued the application of the
equity method of accounting, recorded its investment at zero and no longer
recognizes its share of earnings or losses from BFP, LP. The increases in
Partnership's share of earnings (loss) from operations of unconsolidated
venture and venture partner's share of venture operations for the year
ended December 31, 2002 as compared to the year ended December 31, 2001 is
primarily due to the write-off of capitalized financing costs by BFP, LP in
the third quarter of 2001.

INFLATION

Due to the low levels of inflation in recent years and the limited
business activity of the Partnership, inflation generally has not had a
material effect on it.

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, 2003
and thus has concluded that there are no critical accounting policies.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
and Consolidated Venture

INDEX

Independent Auditors' Report

Consolidated Balance Sheets, December 31, 2003 and 2002

Consolidated Statements of Operations, years ended
December 31, 2003, 2002 and 2001

Consolidated Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 2003, 2002 and 2001

Consolidated Statements of Cash Flows, years ended
December 31, 2003, 2002 and 2001

Notes to Consolidated Financial Statements

Schedules not filed:

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

INDEPENDENT AUDITORS' REPORT

The Partners
JMB/245 Park Avenue Associates, Ltd.:

We have audited the consolidated financial statements of JMB/245 Park
Avenue Associates, Ltd., a limited partnership (the "Partnership"), and
consolidated venture as listed in the accompanying index. These
consolidated financial statements are the responsibility of the General
Partners of the Partnership. Our responsibility is to express an opinion
on these consolidated 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 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
JMB/245 Park Avenue Associates, Ltd. and consolidated venture as of
December 31, 2003 and 2002, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 2003, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements have been prepared
assuming that JMB/245 Park Avenue Associates, Ltd. will continue as a going
concern. As described in the notes to the financial statements, the
Partnership is dependent upon additional advances from JMB under the demand
loans. This uncertainty and the fact that the Partnership has a net
capital deficiency raise substantial doubt about its ability to continue as
a going concern. The General Partners' plans in regard to these matters
are also described in the notes to the financial statements. The
accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

KPMG LLP

Chicago, Illinois
March 23, 2004

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
and Consolidated Venture

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2003 AND 2002

ASSETS
------

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
and Consolidated Venture

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
and Consolidated Venture

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)

YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
and Consolidated Venture

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

JMB/245 PARK AVENUE ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
and Consolidated Venture

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001

OPERATIONS AND BASIS OF ACCOUNTING

GENERAL

As a result of the 1996 restructuring and until December 31, 2002,
JMB/245 Park Avenue Associates, Ltd. (the "Partnership") owned through JMB
245 Park Avenue Holding Company, LLC ("245 Park Holding") an approximate
5.4% general partner interest (slightly diluted from the original ownership
percentage by notes converted to equity) represented by 5,673.751 Class A
Units in Brookfield Financial Properties, L.P. ("BFP, LP"), formerly known
as World Financial Properties, L.P. On December 31, 2002, 90% of 245 Park
Holding's interest in BFP, LP was redeemed, as described in "Investment in
Unconsolidated Venture" below. BFP, LP is a joint venture that holds
equity investments in commercial office buildings located primarily in New
York, New York and Boston, Massachusetts. Business activities consist of
rentals to a variety of commercial companies and the ultimate sale or
disposition of such real estate. 245 Park Holding is a limited liability
company in which the Partnership is a 99% member and WFP Property G.P.
Corp. ("WFP, GP"), which is an affiliate of the managing general partner of
BFP, LP, is a 1% member. The accompanying consolidated financial
statements include the accounts of the Partnership and its majority-owned
limited liability company, 245 Park Holding, which was formed November 21,
1996 ("Effective Date"). Prior to the Effective Date, the Partnership held
an approximate 48.25% interest in 245 Park Avenue Company ("245 Park" or
the "Joint Venture"), which owned the 245 Park Avenue office building in
New York, New York (see "Investment in Unconsolidated Venture" below). The
effect of all transactions between the Partnership and its consolidated
venture has been eliminated.

The equity method of accounting was applied in the accompanying
consolidated financial statements with respect to the Partnership's
interest in BFP, LP subsequent to the Effective Date through December 31,
2002 (the "Redemption Date") when the Partnership's indirect interest in
BFP, LP was reduced to less than 1%. Because the Partnership has no future
funding obligations, is currently not expecting to receive distributions,
has no influence or control over the day-to-day affairs of BFP, LP. and its
investment in BFP, LP has been reduced to less than 1%, subsequent to the
Redemption Date, the Partnership has discontinued the application of the
equity method of accounting, recorded its investment at zero and will no
longer recognize its share of earnings or losses from BFP, LP.

In April 2002, the FASB issued Statement No. 145 which, among other
things, rescinds the requirement that gains and losses on extinguishments
of debt be classified as extraordinary items. The Company adopted
Statement No. 145 effective October 1, 2002, which required
reclassifications of prior extraordinary gains on extinguishment of debt.
The adoption of Statement No. 145 did not have an effect on the
Partnership's financial statements presented.

The Partnership's records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to reflect the Partnership's
accounts in accordance with accounting principles generally accepted in the
United States of America ("GAAP") and to consolidate the accounts of 245
Park Holding as described above. Such GAAP and consolidation adjustments
are not recorded on the records of the Partnership. The net effect of
these items for the year ended December 31, 2002 is summarized as follows:

2002
--------------------------
TAX BASIS
GAAP BASIS (UNAUDITED)
----------- ------------
Total assets. . . . . . . . . . . . . . . $ 356,639 (159,851,605)

Partners' capital accounts (deficits):
General partners. . . . . . . . . . . . (11,211,468) (50,753,934)
Limited partners. . . . . . . . . . . . (18,184,204) (133,298,916)

Net earnings (losses):
General partners. . . . . . . . . . . . 1,302,374 (5,867,736)
Limited partners. . . . . . . . . . . . 86,398,604 3,040,539

Net earnings (loss) per limited
partnership interest. . . . . . . . . . 87,536 3,081
============ ============

The tax basis information for 2003 is not available as of the date of
this report.

The net earnings (loss) per limited partnership interest is based upon
the number of limited partnership interests outstanding at the end of the
period. Deficit capital accounts will result, through the remaining
duration of the Partnership, in net gain for financial reporting and
Federal income tax purposes to the General Partners and Limited Partners.

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

No provision for Federal or state income taxes has been made as the
liability for such taxes is that of the partners rather than the
Partnership.

INVESTMENT IN UNCONSOLIDATED VENTURE

In December 1983, the Partnership acquired an interest in 245 Park,
which owned a 46-story office building located at 245 Park Avenue, New
York, New York. The Partnership acquired its approximate 48.25% ownership
interest in 245 Park for approximately $63,927,000 from an affiliate of the
joint venture partners. In addition to the Partnership, the other partners
(the "O&Y partners") of 245 Park included Olympia & York 245 Park Ave.
Holding Company, L.P., Olympia & York Equity Company, L.P., and Olympia &
York 245 Corp., all of which were affiliates of Olympia & York
Developments, Ltd. ("O&Y").

As a result of the financial difficulties of the O&Y partners, in
October 1995 each of the O&Y partners and certain other O&Y affiliates (but
not the Joint Venture) filed for bankruptcy protection from creditors under
Chapter 11 of the United States Bankruptcy Code. During 1996, the O&Y
partners and these certain other O&Y affiliates restructured their
ownership interests in various office buildings, including their interest
in the 245 Park Avenue office building. In connection with such
restructuring, 245 Park filed for bankruptcy under Chapter 11 of the United
States Bankruptcy Code in April 1996 seeking approval of a plan of
reorganization by its creditors and the partners of 245 Park, including the

Partnership, and in August 1996, the Third Amended Joint Plan of
Reorganization and Disclosure Statement (the "Plan") was filed with the
Bankruptcy Court. The Plan was accepted by the various classes of claims
and equity holders and confirmed by the Court on September 20, 1996. The
Plan became effective on November 21, 1996 ("Effective Date") upon
completion of several additional steps. The conditions to the Plan
included, but were not limited to, the completion of significant
refinancing and capital transactions regarding the 245 Park Avenue office
building as well as other properties. Pursuant to the terms of the Plan,
the Partnership owned through 245 Park Holding an approximate 5.4% general
partner interest (slightly diluted from the original ownership percentage
by notes converted to equity) in a newly formed partnership, BFP, LP,
represented by 5,673.751 Class A Units. The managing general partner of
BFP, LP is an entity affiliated with certain O&Y creditors and the
proponents of the Plan governing the restructuring. BFP, LP's principal
assets currently are wholly-owned or majority and controlling interests in
office buildings (including the 245 Park Avenue office building), most of
which are located in New York, New York.

Prior to repayment to JMB (described below) the Partnership had three
term loan notes payable to JMB. One (the "LIBOR Note") of the term loan
notes had an outstanding principal balance of $16,042,000 and bore interest
at a variable rate related to LIBOR plus 2.625% per annum. The other two
term loan notes had an aggregate outstanding principal balance of
approximately $27,195,000 and bore interest at 2% per annum, which accrued
and compounded annually. JMB Realty Corporation ("JMB") had made various
advances to the Partnership, evidenced by a demand note, to make principal
and interest payments on the term loan notes and to pay operating costs of
the Partnership. As of December 31, 2002, JMB had advanced approximately
$12,376,000 on this demand note. Interest accrued on these advances at the
annual rate of prime (as such prime rate changed from time to time) plus
1%. At December 31, 2002, principal and accrued interest on this demand
note aggregated approximately $16,765,000.

Effective January 3, 2001, the Partnership and JMB agreed to extend
the maturity date of the term loan notes from December 31, 1998 to
January 2, 2006 and otherwise to follow literally the various terms of the
notes. As a result, the parties agreed that the Partnership would be
required to pay default interest on each of the three term loan notes (at
the prime rate plus 3% per annum) for the period from the maturity date of
December 31, 1998 to January 3, 2001, the effective date on which JMB and
the Partnership agreed to extend each of the notes. Accordingly,
incremental interest cost relating to the default interest rate aggregating
approximately $7.7 million was recorded as expense in the year ended
December 31, 2000. Under the extended notes, interest accrued under the
same terms as applicable to the term loan notes prior to December 31, 1998.

Interest was due and payable monthly on the LIBOR Note with the outstanding
principal due and payable on January 2, 2006. All principal and accrued
and compounded interest on the other term loan notes were due and payable
on January 2, 2006. Further, all outstanding interest as of December 31,
2000 on the LIBOR Note (approximately $10.8 million) was due and payable
immediately. In 2001, the Partnership issued a new demand note payable to
JMB, secured by the Partnership's interest in BFP, LP and bearing interest
at the prime rate (as such prime rate changed from time to time) plus 1%
per annum with interest accruing and compounding quarterly. Through
December 31, 2002, JMB had advanced approximately $12,903,000 to the
Partnership pursuant to the new demand note. The Partnership used the
advances to pay the outstanding interest on the LIBOR Note through
December 31, 2002 of approximately $12,903,000.

The Partnership's interest in BFP, LP was pledged as collateral for
the term loan notes and demand notes (collectively (the "JMB Notes") which
aggregated approximately $89,337,000 in principal and interest at
December 31, 2002 (prior to repayment) to JMB. The security agreements for
the JMB Notes required mandatory payment of principal and interest out of
any net proceeds received upon the sale, refinancing or other disposition
of, or any distribution made with respect to, the Partnership's interest in
BFP, LP.

On December 31, 2002 (the "Redemption Date") 245 Park Holding entered
into a redemption agreement (the "Partial Redemption") by and among 245
Park Holding, WFP, GP and BFP, LP pursuant to which 245 Park Holding
transferred and BFP, LP thereby redeemed 5,106.376 Class A Units from 245
Park Holding, or 90% of its approximate 5.4% interest (the "Redeemed
Interest"), in BFP, LP, and 245 Park Holding received a distribution of
approximately $56,109,000 (the "Redemption Distribution"). 245 Park
Holding's remaining interest in BFP, LP consists of 567.375 Class A Units
(the "Retained Interest"). In accordance with the 245 Park Holding limited
liability company agreement, 245 Park Holding distributed approximately
$55,548,000 (99% of the Redemption Distribution) to the Partnership and
approximately $561,000 (1% of the Redemption Distribution) to WFP, GP.

The Partnership received its share of the Redemption Distribution on
the Redemption Date, and in accordance with the security agreements
relating to the JMB Notes, the Partnership then paid to JMB approximately
$55,548,000 as repayment toward the JMB Notes consisting of the following:
(i) the new demand note balance, including accrued interest, of
approximately $14,267,000, (ii) the LIBOR Note balance, including accrued
interest, of approximately $16,098,000, (iii) approximately $8,418,000,
including principal and accrued interest on the other two term loan notes
and (iv) the original demand note principal balance and accrued interest of
approximately $16,765,000. The Partnership also reversed previously
accrued interest of $4,158,000 (of which approximately $483,000 was related
to one of the term loan notes). Accordingly, four of the five JMB Notes
were retired. The unpaid principal and accrued interest balance on the
remaining JMB Note at December 31, 2003 and 2002, was approximately
$30,131,000 and $29,631,000, respectively. Interest on the remaining JMB
Note accrues at a rate of 2% per annum and is compounded annually. The
remaining JMB Note is secured by the Partnership's interest in BFP, LP.

The Partnership recognized a net gain in 2002 of approximately
$79,194,000 on the Partial Redemption for financial reporting purposes. No
gain was recognized by the Partnership for Federal income tax purposes.

BFP, LP has had the right to sell the 245 Park Avenue property without
the consent of the Partnership since January 2000. BFP, LP has notified
the Partnership that it sold a 49% interest in the 245 Park Avenue property
to an unaffiliated third party on October 2, 2003. As a result of such
transaction, and subject to the terms of the transaction, a substantial
amount of gain for Federal income tax purposes could be allocated to the
Holders of Interests without any distribution of cash. Further, the tax
consequences, while having a significant effect on the General Partners and
Holders of Interests for Federal income tax purposes, do not effect the
consolidated financial statements of the Partnership. The Partnership is
not expecting to receive any significant proceeds from the sale of the 49%
interest in 245 Park Avenue.

The Partnership's future liquidity and ability to continue as a going
concern is dependent upon additional advances from JMB and there is no
assurance that such advances will be made.

NOTE PAYABLE TO AN AFFILIATE

Note payable to an affiliate consists of the following at December 31,
2003 and 2002:
2003 2002
----------- -----------
Note payable (term loan) bearing
interest at 2% per annum, compounded
annually; secured by the Partnership's
interest in BFP, LP; no payments until
December 1998 when the entire principal
amount and accrued compounded interest
were scheduled to be due (as discussed
above); extended, effective January 3,
2001, to January 2, 2006 . . . . . . . $25,500,000 25,000,000
=========== ===========

Accrued and unpaid interest due to an affiliate was $4,631,375 at
December 31, 2003 and 2002.

PARTNERSHIP AGREEMENT

Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are generally allocated 94% to
the Holders and 6% to the General Partners. Profits from the sale or other
disposition of all or substantially all of the Partnership's interest in
BFP, LP or of all or substantially all of the 245 Park Avenue office
building or other real property owned by BFP, LP will be allocated to the
General Partners in an amount equal to the greater of 1% of such profits or
any cash from the proceeds of such sale or other disposition distributed to
the General Partners, plus an additional amount of such profits to
eliminate deficits, if any, in the General Partners' capital accounts. The
remainder of such profits will be allocated to the Holders. All losses
from the sale of all or substantially all of the Partnership's interest in
BFP, LP or of all or substantially all of the 245 Park Avenue office
building or other real property owned by BFP, LP will be allocated 99% to
the Holders and 1% to the General Partners. All such profits or losses
will be allocated among the Holders in proportion to the number of
Interests held. For Federal income tax purposes, all interest expense
recognized on the JMB Notes is allocated to a General Partner.

The General Partners are not required to make any additional capital
contributions except under certain limited circumstances upon dissolution
and termination of the Partnership. Distributions of "Distributable Cash"
(as defined) of the Partnership generally will be made 94% to the Holders
of Interest and 6% to the General Partners. Distributions of "Sale
Proceeds" or "Financing Proceeds" (as defined) will be made first to the
Holders in an amount equal to their contributed capital, next to the
General Partners in an amount equal to their capital contributions, and the
balance 70% to the Holders and 30% to the General Partners. Distributions
would be made to the General Partners and Holders of Interests generally
only after the satisfaction of all Partnership liabilities.

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 real property investments. Fees,
commissions and other expenses required to be paid by the Partnership to
the General Partners and their affiliates as of and for the years ended
December 31, 2003, 2002 and 2001 are as follows:

UNPAID AT
DECEMBER 31,
2003 2002 2001 2003
------- ------ ------ ------------
Reimbursement (at cost)
for legal services . . . . $14,737 6,920 9,613 1,229
Reimbursement (at cost)
for portfolio management
services . . . . . . . . . 11,349 42,746 2,673 1,696
Reimbursement (at cost)
for out-of-pocket
expenses . . . . . . . . . -- 1,213 -- --
------- ------ ------ ------
$26,086 50,879 12,286 2,925
======= ====== ====== ======

Any reimbursable amounts currently payable to the General Partners and
their affiliates do not bear interest.

Reference is made to the Notes, "Investment in Unconsolidated Venture"
and "Notes Payable to an Affiliate" above for a discussion of certain loans
and notes payable by the Partnership to JMB and related collateral held by
JMB.

SUMMARY FINANCIAL INFORMATION OF UNCONSOLIDATED VENTURE

Summary financial information for BFP, LP as of and for the year ended
December 31, 2002 is as follows:

2002
-----------
(000's)
Assets:
Commercial properties . . . . . . . . . . . . . . . $ 3,035,552
Other assets. . . . . . . . . . . . . . . . . . . . 865,374
-----------
Total assets . . . . . . . . . . . . . . . . . . $ 3,900,926
===========

Liabilities and Partners' Capital:
Accounts payable and other liabilities. . . . . . . $ 98,053
Long term debt. . . . . . . . . . . . . . . . . . . 2,767,308
Venture Partners' equity. . . . . . . . . . . . . . 1,029,790
-----------
Total liabilities. . . . . . . . . . . . . . . . $ 3,895,151
===========
Partnership's capital. . . . . . . . . . . . . . $ 5,775
===========
Represented by:
Invested capital. . . . . . . . . . . . . . . . . . $ 31,725
Units retired / transferred . . . . . . . . . . . . (54,285)
Cumulative net earnings . . . . . . . . . . . . . . 28,335
-----------
$ 5,775
===========

Total income. . . . . . . . . . . . . . . . . . . . . $ 464,532
Expenses. . . . . . . . . . . . . . . . . . . . . . . 371,495
-----------
Net income. . . . . . . . . . . . . . . . . . . . . . $ 93,037
===========
Partnership's share:
Equity in earnings of BFP, LP . . . . . . . . . . . $ 5,047
===========

BFP, LP adopted fresh start accounting in connection with the
restructuring, which resulted in the restatement of all of its assets and
liabilities to reflect their reorganization value. Through the Redemption
Date, the Partnership amortized the difference between its historical basis
in 245 Park and its underlying equity (which was transferred to the basis
in BFP, LP on the Effective Date) over a period not to exceed forty years.
The amortization for the years ended December 31, 2002 and 2001 was
$2,455,143 and $2,455,143, respectively. On the Redemption Date
(December 31, 2002) the Partnership's interest in BFP, LP was reduced to
less than 1%. As a consequence and as described above, effective
December 31, 2002, the Partnership has discontinued the application of the
equity method of accounting, recorded its investment at zero and will no
longer recognize its share of earnings or losses from BFP, LP. The
Partnership has no obligation to make future contributions to BFP, LP.

The total income, expenses and net income before extraordinary item
for the year ended December 31, 2001 was $513,422,000, $392,739,000, and
$120,683,000, respectively.

SUPPLEMENTARY QUARTERLY DATA (UNAUDITED)

2003
----------------------------------------------
At 3/31 At 6/30 At 9/30 At 12/31
---------- ---------- ---------- ----------
Total income. . . . . . .$ 701 373 182 123
========== ========== ========== ==========

Net earnings (loss) . . .$ (205,549) (192,862) (155,307) (164,326)
========== ========== ========== ==========

Net earnings (loss)
per Interest. . . . . .$ (196) (184) (148) (157)
========== ========== ========== ==========

2002
----------------------------------------------
At 3/31 At 6/30 At 9/30 At 12/31
---------- ---------- ---------- ----------
Total income. . . . . . .$ 2,164 1,821 1,532 1,120
========== ========== ========== ==========
Earnings (loss) before
gain on redemption
of interest in
BFP, LP. . . . . . . . .$1,014,331 1,343,277 1,193,954 4,955,719
Gain on redemption of
Partnership's interest
in BFP, LP (net of
venture partner's
share of gain) . . . . . -- -- -- 79,193,697
---------- ---------- ---------- ----------
Net earnings
(loss). . . . . . .$1,014,331 1,343,277 1,193,954 84,149,416
========== ========== ========== ==========
Net earnings (loss)
per Interest:
Earnings (loss)
before gain on
redemption of
interest in BFP,
LP . . . . . . . . . .$ 958 1,269 1,128 4,747
Gain on redemption of
Partnership's
interest in BFP,
LP (net of
venture partner's
share of gain) . . . . -- -- -- 79,434
---------- ---------- ---------- ----------
Net earnings
(loss) per
Interest. . . . . .$ 958 1,269 1,128 84,181
========== ========== ========== ==========

On December 31, 2002, 245 Park Holding (in which the Partnership has a
99% interest) entered into a transaction whereby 90% of 245 Park Holding's
interest in BFP, LP was redeemed. As a result of the partial redemption,
the Partnership recognized $79,193,697 of net gain for financial reporting
purposes in the fourth quarter of 2002.

On December 31, 2002, in conjunction with the partial redemption
described above, the Partnership repaid to JMB the balances outstanding on
four of the five JMB Notes outstanding. In addition, the Partnership
reversed previously accrued interest of approximately $4,158,000, which is
included in earnings (loss) before gain on redemption of interest in BFP,
LP at December 31, 2002.

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

There were no changes in, or disagreements with, accountants during
2003 and 2002.

ITEM 9A. CONTROLS AND PROCEDURES

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-15 of
the Securities Exchange Act of 1934 (the "Exchange Act") promulgated
thereunder, the principal executive officer and the principal financial
officer of the Partnership have evaluated the effectiveness of the
Partnership's disclosure controls and procedures as of the end of the
period covered by this report. 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 end of the period covered by this report 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 rules and
form of the Securities and Exchange Commission for this report. The
Partnership's disclosure controls and procedures do not include the
disclosure controls and procedures of BFP, LP, which the Partnership has no
ability to control.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Corporate General Partner of the Partnership, JMB Park Avenue,
Inc., an Illinois corporation, is a wholly-owned subsidiary of JMB
Investment Holdings - I, Inc., a Delaware corporation. All of the
outstanding shares of stock of JMB Investment Holdings - I, Inc. are owned,
indirectly, by JMB Realty Corporation, a Delaware corporation ("JMB") in
the business of real estate investment. Substantially all of the shares of
JMB are owned, directly or indirectly, by certain of its officers,
directors, members of their families and their affiliates. The Corporate
General Partner has responsibility for all aspects of the Partnership's
operations, subject to the requirement that the sale of all or
substantially all of the Partnership's interest in BFP, LP or of all or
substantially all of the 245 Park Avenue office building, unless required
by the terms of the BFP, LP venture agreement, must be approved by the
Associate General Partner of the Partnership, Park Associates, L.P., an
Illinois limited partnership with JMB Park Avenue, Inc. as the sole general
partner. The limited partners of the Associate General Partner are
generally JMB, current or former officers and directors of JMB, their
affiliates and current or former officers of Merrill Lynch, Pierce, Fenner
& Smith Incorporated.

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 affiliates of the General Partners are engaged in a
range of real estate activities. Certain services have been and may in the
future be provided to the Partnership by affiliates of the General
Partners, including 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 General Partners and their affiliates may be in
competition with the Partnership or its investment properties under certain
circumstances, including for tenants for properties and/or for the sale of
properties. Because the timing and amount of cash distributions and
profits and losses of the Partnership may be affected by various
determinations by the General Partners under the Partnership Agreement,
including whether and when to sell (or consent to the sale of) investment
property, the establishment and maintenance of reasonable reserves, the
timing of expenditures and the allocation of certain tax items under the
Partnership Agreement, the General Partners may have a conflict of interest
with respect to such determinations. The General Partners and their
affiliates may also have a conflict of interest with respect to matters
relating to the remaining JMB Note, including, among other things, the
enforcement of repayment of that note and the remedies available to JMB in
the event of a default under that note, as well as with respect to matters
concerning whether to continue to advance funds to the Partnership to
permit it to pay its expenses. Reference is made to the discussions under
"Investment in Unconsolidated Venture" and "Notes Payable to an Affiliate"
in the Notes for further information concerning the term loan and demand
notes.

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

SERVED IN
NAME OFFICE OFFICE SINCE
- ---- ------ ------------
Gary Nickele Vice President 12/18/90
Patrick J. Meara President and Director 12/22/00
H. Rigel Barber Vice President 03/26/84
Gailen J. Hull Vice President 03/26/84

There is no family relationship among any of the foregoing director or
officers. The foregoing director has been elected to serve a term until
the annual meeting of the Corporate General Partner to be held on
August 10, 2004. All of the foregoing officers have been elected to serve
terms until the first meeting of the Board of Directors held after the
annual meeting of the Corporate General Partner to be held on August 10,
2004. There are no arrangements or understandings between or among any of
said director or officers and any other person pursuant to which any
director or officer was elected as such.

The foregoing director and officers are also officers and/or directors
of JMB and various companies affiliated with JMB.

The business experience during the past five years of each such
director and officer of the Corporate General Partner of the Partnership
includes the following:

Gary Nickele (age 51) is Executive Vice President and General Counsel
of JMB and an officer and/or director of various JMB affiliates. 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.

Patrick J. Meara (age 41) has been a Senior Vice President of JMB
since January 1997. Prior to becoming President and Director of the
Corporate General Partner, Mr. Meara was a Vice President of the Corporate
General Partner from August 8, 2000 to December 22, 2000. He is also an
officer and/or director of various other JMB affiliates. He has been
associated with JMB, JMB Institutional Realty Corporation or their
affiliates since 1987. Mr. Meara is a Certified Public Accountant.

H. Rigel Barber (age 55) is Executive Vice President and Chief
Executive Officer of JMB and an officer of various JMB affiliates.
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.

Gailen J. Hull (age 55), in addition to being a Vice President of JMB
Park Avenue, Inc., has acted as the Chief Financial Officer of the
Partnership since August 2002. He also is Senior Vice President and, since
August 2002, Chief Financial Officer of JMB and an officer of various JMB
affiliates. Mr. Hull 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.

The Partnership is a limited partnership organized under the laws of
the State of Illinois, and the rights of its partners and Holders of
Interests are governed by its Partnership Agreement. Moreover, the
Interests are not publicly traded. In view of these facts, as well as the
limited business activity of the Partnership, the Corporate General Partner
has determined that it is not necessary for the Partnership to have either
an "audit committee financial expert" or a "code of ethics" as those terms
are defined in the rules and regulations of the Securities and Exchange
Commission.

ITEM 11. EXECUTIVE COMPENSATION

The officers and the director of the Corporate General Partner receive
no direct remuneration in such capacities from the Partnership. 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 as described under the section entitled
"Partnership Agreement" in the Notes. No such cash distributions were paid
to the General Partners in 2003. The General Partners are expected to be
allocated gain for tax purposes in 2003.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to the Partnership Agreement, the Partnership is permitted to
engage in various transactions involving affiliates of the Corporate
General Partner of the Partnership. Such transactions may involve
conflicts of interest for the General Partners or their affiliates,
including, among others, those discussed in Item 10. Directors and
Executive Officers above. Various relationships of the Partnership to the
Corporate General Partner (and its director and executive officers) and its
affiliates are also set forth above in Item 10.

The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses and out-of-pocket expenses relating to
the administration of the Partnership and operation of the Partnership's
real property investments. There were no such reimbursable expenses in
2003.

The General Partners and their affiliates are entitled to
reimbursements of salary and salary related expenses for legal, accounting
and certain other services. Such reimbursements will not exceed the lesser
of the actual cost of such services or the amount which the Partnership
would be required to pay independent parties for comparable services. For
2003, affiliates of the General Partners were entitled to reimbursements
for such expenses in the amount of $26,086 of which $2,925 was payable at
December 31, 2003.

The unpaid principal and accrued interest balance on the remaining JMB
Note at December 31, 2003 and 2002, was approximately $30,131,000 and
$29,631,000, respectively. The remaining JMB Note, which is secured by the
Partnership's interest in BFP, LP, accrues interest at 2% per annum, with
interest compounded annually.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Partnership has not adopted any pre-approval policies and
procedures. All audit and permitted non-audit services are approved by the
sole director of the Corporate General Partner of the Partnership before
the service is undertaken.

The aggregate fees billed for professional services by KPMG for 2003
and 2002 for these various services were:

Type of Fees 2003 2002
- ------------ -------- --------

Audit Fees. . . . . . . . . . . . . . . . $ 34,000 $ 61,400
Tax Fees. . . . . . . . . . . . . . . . . 27,500 62,750
-------- --------
$ 61,500 $124,150
======== ========

In the above table, in accordance with the SEC's definitions and
rules, "audit fees" are fees the Partnership paid KPMG for professional
services for the audit of the Partnership's consolidated financial
statements included in Form 10-K and review of financial statements
included in Form 10-Qs, and for services that are normally provided by the
accountant in connection with statutory and regulatory filings or
engagements; "tax fees" are fees for tax compliance, tax advice and tax
planning.

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 and
Supplementary Data filed with this report).

(2) Exhibits.

3-A. Amended and Restated Agreement of Limited Partnership
of the Partnership is hereby incorporated by
reference to Exhibit 3-A to the Partnership's Report
for June 30, 2002 on Form 10-Q (File No. 0-13545)
dated August 21, 2002.

3-B. Amendment to the Amended and Restated Agreement of
Limited Partnership of JMB/245 Park Avenue
Associates, Ltd. by and between JMB Park Avenue, Inc.
and Park Associates, L.P. dated January 1, 1994 is
hereby incorporated by reference to Exhibit 3-B to
the Partnership's Form 10-Q Report for March 31, 1995
(File No. 0-13545) filed May 11, 1995.

4-A. Loan agreement dated June 27, 1984 between JMB/245
Park Avenue Associates and Continental Illinois
National Bank and Trust Company of Chicago is hereby
incorporated by reference to Exhibit 4-B to the
Partnership's Registration Statement on Form 10 (as
amended) of the Securities Exchange Act of 1934 (File
No. 0-13545) filed on April 29, 1985.

4-B. $25,000,000 Second Amended and Restated Promissory
Note and related documents dated August 1, 1995
between JMB/245 Park Avenue Associates and JMB Realty
Corporation, are hereby incorporated herein by
reference to Exhibit 4-V to the Partnership's Form
10-Q Report for September 30, 1995, (File No.
0-13545) filed on November 9, 1995.

4-C. Fourth Amendment to Loan Documents dated August 1,
1995 between JMB/245 Park Avenue Associates, Ltd. and
JMB Realty Corporation detailing amendments to the
term loans, are hereby incorporated herein by
reference to Exhibit 4-Y to the Partnership's Form
10-Q Report for September 30, 1995, (File No.
0-13545) filed on November 9, 1995.

4-D. Consent Agreement dated December 29, 1983 from
JMB/245 Park Avenue Associates, Ltd. to Continental
Illinois Bank of Chicago (Continental) detailing the
transactions for which the Partnership would obtain
Continental's consent, are hereby incorporated herein
by reference to Exhibit 4-Z to the Partnership's Form
10-Q Report for September 30, 1995, (File No.
0-13545) filed on November 9, 1995.

4-E. Third Amended and Restated Security Agreement dated
August 1, 1995 between JMB/245 Park Avenue
Associates, Ltd. and JMB Realty Corporation, are
hereby incorporated herein by reference to Exhibit
4-AA to the Partnership's Form 10-Q Report for
September 30, 1995, (File No. 0-13545) filed on
November 9, 1995.

4-F. Amendment No. 1 to $25,000,000 Second Amended and
Restated Promissory Note made effective January 3,
2001 between JMB/245 Park Avenue Associates, Ltd. and
JMB Realty Corporation is hereby incorporated herein
by reference to Exhibit 4-B to the Partnership's
Report for March 31, 2001 on Form 10-Q (File No.
0-13545) dated May 9, 2001.

10-A. Limited Liability Company Agreement of JMB 245 Park
Avenue Holding Company, LLC dated as of November 12,
1996 is hereby incorporated by reference to the
Partnership's Report for November 21, 1996 on Form
8-K (File No. 0-13545) filed on December 6, 1996.

10-B. Consent and Substitution of Collateral dated
November 21, 1996 is hereby incorporated herein by
reference to Exhibit 10-E to the Partnership's Report
for March 31, 1997 on Form 10-Q (File No. 0-13545)
filed on May 9, 1997.

10-C. Redemption Agreement between JMB 245 Park Avenue
Holding Company, LLC, WFP Property G.P. Corp. and
Brookfield Financial Properties, L.P., dated
December 31, 2002 is hereby incorporated herein by
reference to Exhibit 10.1 to the Partnership's Report
for December 31, 2002 on Form 8-K (File No. 0-13545)
filed on January 15, 2003.

10-D. Fourth Amended and Restated Agreement of Limited
Partnership of Brookfield Financial Properties, L.P.
dated as of December 31, 2002 is hereby incorporated
herein by reference to Exhibit 10.2 to the
Partnership's Report for December 31, 2002 on Form
8-K (File No. 0-13545) filed on January 15, 2003.

21. List of Subsidiaries of the Partnership.

31.1 Certification of Principal Executive Officer Pursuant
to Rule 13a-14(a)/Rule 15d-14(a) of the Securities
Exchange Act of 1934, as amended.

31.2 Certification of Principal Financial Officer Pursuant
to Rule 13a-14(a)/Rule 15d-14(a) of the Securities
Exchange Act of 1934, as amended.

32. Certifications of Chief Executive Officer and Chief
Financial Officer Pursuant to 18 U.S.C. Section 1850,
as adopted pursuant to section 906 of the Sarbanes-
Oxley Act of 2002.

99. Article 14 (pages 15-17) of the Partnership's Amended
and Restated Agreement of Limited Partnership is
filed herewith.

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

No annual report or proxy material for the fiscal year 2003 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.

JMB/245 PARK AVENUE ASSOCIATES, LTD.

By: JMB Park Avenue, Inc.
Corporate General Partner

GAILEN J. HULL
By: Gailen J. Hull
Vice President
Date: March 26, 2004

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 Park Avenue, Inc.
Corporate General Partner

PATRICK J. MEARA
By: Patrick J. Meara, President and Director
Principal Executive Officer
Date: March 26, 2004

GAILEN J. HULL
By: Gailen J. Hull, Vice President
Principal Accounting Officer
and Principal Financial Officer
Date: March 26, 2004

JMB/245 PARK AVENUE ASSOCIATES, LTD.

EXHIBIT INDEX

DOCUMENT
INCORPORATED
BY REFERENCE
-------------
3-A. Amended and Restated Agreement of
Limited Partnership of the
Partnership. Yes

3-B. Amendment to the Amended Limited
Partnership Agreement of Partnership
of JMB/245 Park Avenue Associates, Ltd. Yes

4-A. Loan agreement dated June 27,
1984 between JMB/245 Park Avenue
Associates and Continental Illinois
National Bank and Trust Company of
Chicago. Yes

4-B. $25,000,000 Second Amended and
Restated Promissory Note and
related documents dated August 1,
1995 between JMB/245 Park Avenue
Associates and JMB Realty Corporation Yes

4-C. Fourth Amendment to Loan Documents
dated August 1, 1995 between JMB/245
Park Avenue Associates, Ltd. and
JMB Realty Corporation Yes

4-D. Consent Agreement dated December 29,
1983 from JMB/245 Park Avenue Associates
to Continental Illinois Bank of
Chicago (Continental) Yes

4-E. Third Amended and Restated Security
Agreement dated August 1, 1995 between
JMB/245 Park Avenue Associates, Ltd.
and JMB Realty Corporation Yes

4-F. Amendment No. 1 to $25,000,000 Second
Amended and Restated Promissory Note
made effective January 3, 2001 between
JMB/245 Park Avenue Associates and
JMB Realty Corporation Yes

10-A. Limited Liability Company Agreement of
JMB 245 Park Avenue Holding Company, LLC
dated as of November 12, 1996. Yes

10-B. Consent and Substitution of Collateral
dated November 21, 1996 Yes

10-C. Redemption Agreement between JMB 245
Park Avenue Holding Company, LLC, WFP
Property G.P. Corp. and Brookfield
Financial Properties, L.P. Yes

10-D. Fourth Amended and Restated Agreement
of Limited Partnership of Brookfield
Financial Properties, L.P. Yes

DOCUMENT
INCORPORATED
BY REFERENCE
-------------

21. List of Subsidiaries of the Partnership. No

31.1. Certification of Principal Executive
Officer Pursuant to Rule 13a-14(a)/
Rule 15d-14(a) of the Securities
Exchange Act of 1934, as amended. No

31.2. Certification of Principal Financial
Officer Pursuant to Rule 13a-14(a)/
Rule 15d-14(a) of the Securities
Exchange Act of 1934, as amended. No

32. Certifications of Chief Executive
Officer and Chief Financial Officer
Pursuant to 18 U.S.C. Section 1850,
as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002. No

99. Article 14 (pages 15-17) of the
Partnership's Amended and Restated
Agreement of Limited Partnership No