High River Limited Partnership
                          767 Fifth Avenue, 47th Floor
                               New York, NY 10153

                                                                    July 8, 1999



Via Facsimile

McNeil Partners L.P.
McNeil Real Estate Management, Inc.
Robert A. McNeil
c/o William Frank, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York  10022


Ladies and Gentlemen:

         The  purpose  of this  letter is to inform  you that,  on or before the
fifth day following the satisfaction of the Commencement  Condition described in
the third paragraph hereof,  High River Limited  Partnership  ("High River") and
certain of its affiliates (collectively, the "High River Parties") will commence
tender offers (the "Offers") for the units of limited partnership  interest (the
"Units") of the limited partnerships (the "Partnerships") set forth in the table
below at the prices per Unit set forth in the table, net to the Limited Partners
in cash.  The High River  Parties  will offer to purchase any and all such Units
tendered to them by Limited Partners of each  Partnership,  provided that, after
giving effect to such  purchases,  the High River Parties will own more than 50%
of all outstanding limited partnership units of that Partnership  (including any
Units they already own).

         The  aggregate  payment to Limited  Partners  being offered by the High
River  Parties for all of the Units is  $15,000,000  higher  than the  estimated
aggregate  payment to  Limited  Partners  in the  proposed  transaction  with an
affiliate  of  Whitehall  Real Estate  Limited  Partnership  XI (the  "Whitehall
Transaction"),  as disclosed in your June 25, 1999 press release. The High River
Parties are able to offer Limited  Partners a higher payout because,  unlike the
Whitehall Transaction,  we are not offering to purchase McRemi (which we believe
has no value) or Fairfax Associates II, Ltd. or McNeil Summerhill I, L.P. (which
we believe were improperly  included in the Whitehall  Transaction  because they
are not part of the pending class action litigation). It is likely that the High
River Parties would have offered even higher prices for Units,  but for the deal
you made with Whitehall which burdens the  Partnerships  with an unnecessary and
wasteful  $18,000,000  "break up" fee (plus up to an  additional  $1,500,000  to
cover Whitehall's  expenses).  As our counsel informed you in a December 1, 1998
letter (a copy of which is attached),  the High River Parties believe that it is
inappropriate  to impose  any such fees on Limited  Partners  and would not have
attempted to impose a "break up" fee had we been permitted to participate in the
bidding process for the Partnerships.






         The sole condition (the  "Commencement  Condition") to the commencement
of the  Offers  by the  High  River  Parties  is that the  court  enter an order
rejecting in its entirety the proposed  settlement  of the pending  class action
litigation and directing further that any new settlement not be approved without
due notice to, and an opportunity to object by, Limited Partners. In addition to
the Offers  giving  Limited  Partners  the benefit of higher and faster per Unit
payouts than the Whitehall  Transaction,  this condition to the  commencement of
the Offers will preserve all existing  claims against the general partner of the
Partnerships  and  its  affiliates.  As soon as the  Commencement  Condition  is
satisfied,  the High River Parties will place in escrow the sum of $307,724,439,
which  represents the full purchase price for all Units in the  Partnerships not
already owned by the High River Parties.

         The following table compares the per Unit prices being offered for each
Partnership  by the High River Parties to the estimated per Unit payout from the
Whitehall Transaction:


                               WHITEHALL PAYOUT                  HIGH RIVER
                                   PER UNIT                    OFFERING PRICE
PARTNERSHIP                       (Estimated)                   PER UNIT (1)

MCNEIL IX                        $    424.00                    $      444.99

MCNEIL X                         $    234.00                    $      246.33

MCNEIL XI                        $    221.00                    $      232.48

MCNEIL XIV                       $    214.00                    $      225.21

MCNEIL XV                        $    160.00                    $      168.75

MCNEIL XX                        $     92.00                    $       94.82

MCNEIL XXIV                      $    347.00                    $      357.61

MCNEIL XXV                       $      0.50                    $        0.52

MCNEIL XXVI                      $      0.27                    $        0.28

MCNEIL XXVII                     $     10.54                    $       10.76

MCNEIL XII                       $     77.00                    $       83.62

MCNEIL XXI*                      $     99.00                    $      125.46

MCNEIL XXII*                     $      0.25                    $        0.26

MCNEIL XXIII*                    $      0.28                    $        0.31

(1)   Of course,  any distributions  made  with   respect  to  the  Units  after
      June 25, 1999 would be netted against  the  per  Unit  prices   offered by
      the High River Parties.







HEARTH HOLLOW                    $40,115.00                     $   42,713.43

MCNEIL MIDWEST                   $25,840.00                     $   29,117.01

REGENCY NORTH                    $75,916.00                     $   79,841.75


*Current Income Units Only

                                Very truly yours,

                                HIGH RIVER LIMITED PARTNERSHIP

                                By:  Riverdale LLC, its general partner


                                     By:  /s/  Carl C. Icahn
                                         ---------------------------------------
                                         Carl C. Icahn, Member