EXHIBIT 99.7

REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Chi-Town Partners, L.P.
and St. Elmo's Partners, L.P.:

We have audited the accompanying combined balance sheet of Chi-Town
Partners, L.P. and St. Elmo's Partners, L.P. as of December 31, 1996 and the
related combined statements of income, changes in partners' capital and cash
flows for the year then ended. These financial statements are the responsibility
of the management of Chi-Town Partners, L.P. and St. Elmo's Partners, L.P. Our
responsibility is to express an opinion on these combined financial statements
based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. 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
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Chi-Town
Partners, L.P. and St. Elmo's Partnership, L.P. as of December 31, 1996 and the
combined results of their operations and their cash flows for the year then
ended in conformity with generally accepted accounting principles.

Coopers & Lybrand L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 31, 1997, except for Note 8
as to which the date is July 16, 1997

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)
COMBINED BALANCE SHEETS
JUNE 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996

JUNE 30, DECEMBER 31,
1997 1996
------------- -------------

(UNAUDITED)
ASSETS
Investments in real estate, at cost:
Land............................................................................. $ 4,227,379 $ 4,227,379
Buildings........................................................................ 24,689,163 24,704,079
Furniture, fixtures and equipment................................................ 6,132,878 6,115,468
Tenant improvements.............................................................. 904,091 744,172
Construction-in-progress......................................................... 967,703 71,674
------------- -------------
36,921,214 35,862,772
Less accumulated depreciation.................................................... (5,089,379) (4,094,571)
------------- -------------
Total real estate, net......................................................... 31,831,835 31,768,201
Cash and cash equivalents.......................................................... 2,189,555 3,438,483
Accounts and notes receivable, net of allowance of $15,994 and $17,500 as of June
30, 1997 and December 31, 1996, respectively..................................... 989,526 588,099
Due from affiliate................................................................. 205 --
Prepaid expenses and other assets.................................................. 191,473 87,343
Goodwill, net of accumulated amortization of $301,222 and $248,772 as of June 30,
1997 and December 31, 1996, respectively 1,248,778 1,300,278
Deferred costs, net of accumulated amortization of $420,040 and $314,852 as of June
30, 1997 and December 31, 1996, respectively..................................... 692,844 769,464
------------- -------------
Total assets................................................................... $ 37,144,216 $ 37,951,868
------------- -------------
------------- -------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage note payable............................................................ $ 15,284,994 $ 15,499,994
Accounts payable and accrued expenses............................................ 2,644,380 2,785,546
Due to affiliates................................................................ 3,905 277,822
Other liabilities................................................................ 77,299 83,153
------------- -------------
Total liabilities.............................................................. 18,010,578 18,646,515
Commitments and contingencies
Partners' capital.................................................................. 19,133,638 19,305,353
------------- -------------
Total liabilities and partners' capital........................................ $ 37,144,216 $ 37,951,868
------------- -------------
------------- -------------

The accompanying notes are an integral part of these combined financial
statements.

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)
COMBINED STATEMENTS OF INCOME
FOR THE SIX-MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1996

JUNE 30, DECEMBER 31,
1997 1996
------------ -------------

(UNAUDITED)
Revenues:
Hotel operations................................................................... $ 8,639,121 $ 16,366,213
Office rental income............................................................... 541,178 1,216,726
Parking operations................................................................. 409,459 873,685
Other.............................................................................. 388,350 812,642
------------ -------------

Total revenues................................................................. 9,978,108 19,269,266
------------ -------------

Expenses:
Hotel operating.................................................................... 5,753,770 11,149,622
Office operating................................................................... 257,834 548,328
Parking operating.................................................................. 276,469 515,878
Real estate taxes.................................................................. 634,982 1,188,984
Interest........................................................................... 775,438 1,460,069
Depreciation....................................................................... 994,808 1,993,885
Amortization....................................................................... 156,522 272,048
------------ -------------

Total expenses................................................................. 8,849,823 17,128,814
------------ -------------

Net income........................................................................... $ 1,128,285 $ 2,140,452
------------ -------------
------------ -------------

The accompanying notes are an integral part of these combined financial
statements.

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)
COMBINED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE SIX-MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1996

Balance, December 31, 1995..................................................... $20,339,901
Distributions.................................................................. (3,175,000)
Net income..................................................................... 2,140,452
----------
Balance, December 31, 1996..................................................... 19,305,353
Distributions (unaudited)...................................................... (1,300,000)
Net income (unaudited)......................................................... 1,128,285
----------
Balance, June 30, 1997 (unaudited)............................................. $19,133,638
----------
----------

The accompanying notes are an integral part of these combined financial
statements.

CHI-TOWN PARTNERS, L.P.
AND ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX-MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1996

JUNE 30, DECEMBER 31,
1997 1996
------------- -------------

(UNAUDITED)
Cash flows from operating activities:
Net income....................................................................... $ 1,128,285 $ 2,140,452
Adjustments to reconcile net income to cash provided
by operating activities:
Loss on disposition of fixed asset............................................. -- 2,399
Depreciation and amortization.................................................. 1,151,330 2,265,933
Provision for bad debts........................................................ 4,631 10,000
Changes in assets and liabilities:
Increase in accounts receivable................................................ (406,058) (74,444)
Increase due from affiliate.................................................... (205) --
Decrease (increase) in prepaid and other assets................................ (104,130) 117,915
Increase (decrease) in accounts payable and accrued expenses................... (141,166) 741,375
Increase (decrease) in amounts due to affiliates............................... (273,917) 86,631
Increase (decrease) in other liabilities....................................... (5,854) 4,715
------------- -------------
Net cash provided by operating activities.................................. 1,352,916 5,294,976
------------- -------------
Cash flows from investing activities:
Additions to property and equipment.............................................. (1,058,442) (1,712,080)
Increase in deferred costs and other............................................. (28,402) (133,894)
------------- -------------
Net cash used in investing activities...................................... (1,086,844) (1,845,974)
------------- -------------
Cash flows from financing activities:
Proceeds from mortgage note payable.............................................. -- 128,706
Repayment of mortgage note payable............................................... (215,000) (380,000)
Distributions to partners........................................................ (1,300,000) (3,175,000)
------------- -------------
Net cash used in financing activities...................................... (1,515,000) (3,426,294)
------------- -------------
Increase (decrease) in cash........................................................ (1,248,928) 22,708
Cash and cash equivalents, beginning of year....................................... 3,438,483 3,415,775
------------- -------------
Cash and cash equivalents, end of year............................................. $ 2,189,555 $ 3,438,483
------------- -------------
------------- -------------
Supplemental cash flow information:
Cash paid for interest........................................................... $ 725,658 $ 1,466,292
------------- -------------
------------- -------------

The accompanying notes are an integral part of these combined financial
statements.

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(Delaware Limited Partnerships)

Notes to Combined Financial Statements

1. PARTNERSHIPS ORGANIZATION AND OPERATIONS:

Chi-Town Partners, L.P. and St. Elmo's Partners, L.P. (together, "the
Partnerships") were formed to acquire, own and operate real estate operations.
The financial statements are presented on a combined basis due to common
ownership and control.

The percentage interest of the general and limited partners of Chi-Town
Partners, L.P. at December 31, 1996 are as follows:

PERCENTAGE
INTEREST
-----------

General Partners:
AG Chi-Town Acquisition Corp.................................................... .50%
AE-Huron, Inc................................................................... .50%
Limited Partners:
AG Chi-Town Partners, L.P....................................................... 97.00%
AE-Huron Associates, L.P........................................................ 2.00%
-----------
100.00%
-----------
-----------

Net losses of Chi-Town Partners, L.P. are allocated as follows:

(a) First, to those partners who were previously allocated income in
accordance with their percentage interests to the extent of and in
proportion to such allocations which have not been previously eliminated by
prior loss allocations.

(b) Second, to all partners in accordance with their percentage
interests, except that no losses are allocated to the limited partners if
such allocation causes or increases a deficit capital account balance of the
limited partners ("Excess Losses"). Such losses which cannot be allocated to
the limited partners are allocated to the general partners.

Net profits of the Chi-Town Partners, L.P. are allocated as follows:

(a) First, to the general partners to the extent of prior Excess Losses
not previously eliminated through allocations of income.

(b) Second, to all partners in proportion to and to the extent of prior
losses allocated to them not previously eliminated through prior allocations
of income.

Cash distributions are distributable among the partners according to their
percentage interests.

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

1. PARTNERSHIPS ORGANIZATION AND OPERATIONS: (CONTINUED)
The percentage interests of the general and limited partners of St. Elmo's
Partners, L.P. at December 31, 1996 are as follows:

PERCENTAGE
INTEREST
-----------

General partners:
St. Elmo's Acquisition Corp..................................................... .50%
AE--Georgetown, Inc............................................................. .50%
Limited partners:
AG St. Elmo's Partners, L.P..................................................... 94.43%
AE--Georgetown Associates, L.P.................................................. 4.57%
-----------
100.00%
-----------
-----------

Net losses of the St. Elmo's Partners, L.P. are allocated as follows:

(a) First, to those partners who were previously allocated income in
accordance with their percentage interest to the extent of and in proportion
to such allocations which have not been previously eliminated by prior loss
allocations.

Net profits of the St.Elmo's Partners, L.P. are allocated as follows:

(a) First, to the general partners to the extent of prior Excess losses
not previously eliminated through allocations of income.

(b) Second, to all partners in proportion to and to the extent of prior
losses allocated to them not previously eliminated through prior allocations
of income.

Pursuant to the partnership agreement, distributions of cash flow are
generally allocated in accordance with the partners' percentage interests.
However, pursuant to the terms of a separate agreement between St. Elmo's
Partners, L.P. and the operating general partner, St. Elmo's Partners, L.P. is
obligated to make an additional distribution to the operating general partner
during any period in which the minimum required internal rate of return, as
defined in the agreement, is achieved and a cash flow distribution is made to
the partners.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

CASH AND CASH EQUIVALENTS:

Cash and cash equivalents include all cash balances and highly liquid
investments having initial maturities of three months or less.

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
PROPERTY AND EQUIPMENT:

Property and equipment are recorded at cost for both Chi-Town Partners, L.P.
and St. Elmo's Partners, L.P. Chi-Town Partners, L.P. property and equipment
includes interest on funds borrowed to finance the renovation. Cost of major
additions and betterments are capitalized; maintenance and repairs, which do not
improve or extend the life of the respective assets, are charged to operations
as incurred. When property is retired or otherwise disposed of, the cost of the
property and the related accumulated depreciation are removed from the accounts
and any resultant gains or losses are reflected in income for the period.

Depreciation is computed using the estimated useful lives of the assets. For
buildings and improvements, depreciation is computed on the straight-line basis
over 39 years. Depreciation of furniture, fixtures and equipment is computed
using the 200% declining balance method, over a 3 to 7 year period.

During 1996, the Partnerships adopted Statement of Financial Accounting
Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of". The adoption of this pronouncement
had no material effect on the financial position or results of operations of the
Partnerships.

DEFERRED COSTS:

Deferred costs are recorded at cost and consist of Partnership organization
costs, deferred leasing costs, franchise fees and deferred loan costs.
Amortization of deferred costs is on a straight-line basis over the following
periods:

Organization costs................... 60 months
Deferred leasing costs............... Underlying lease terms
Franchise Fee........................ 245 months
Deferred loan costs.................. Life of the loan

REVENUE RECOGNITION:

Revenue is recognized from rooms, restaurant, parking, offices and other
ancillary services as earned.

INCOME TAXES:

The taxable income or loss of the Partnerships are included in the income
tax returns of the partners; accordingly, no provision for income tax expense or
benefit is reflected in the accompanying combined financial statements.

The Partnerships' tax returns and the amount of allocable profits or losses
are subject to examination by Federal and state taxing authorities. The tax
liability of the partners could be modified if such an examination resulted in
changes to the Partnerships profits or losses.

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
CREDIT RISK:

In the normal course of business, the Partnerships grant credit to office
tenants and hotel customers who are primarily either tourists or corporate
travelers. The Partnerships primarily invest their excess cash at federally
insured commercial banks or brokerage houses in interest-bearing instruments.
Cash available in these accounts may, at times, exceed FDIC and SIPC insurance
limits.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

For instruments including cash, accounts receivable and payable and
accruals, it was assumed that the carrying amount approximated fair value
because of their short maturity. The carrying amount of the mortgage notes
payable are assumed to approximate fair value because they bear interest at a
floating rate.

ACQUISITION OF THE GEORGETOWN INN HOTEL:

Upon St. Elmo's Partners, L.P. acquiring The Georgetown Inn Hotel in
Washington, D.C. the purchase price was allocated to assets and liabilities
acquired based on their estimated fair values. This resulted in approximately
$1,550,000 of cost in excess of net tangible assets acquired, which is being
amortized on a straight-line basis over 15 years.

USE OF ESTIMATES:

The preparation of the combined financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the combined financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

UNAUDITED COMBINED FINANCIAL STATEMENTS:

The unaudited combined balance sheet as of June 30, 1997 and the unaudited
combined statements of income, changes in partners' capital and cash flows for
the six months ended June 30, 1997, in the opinion of management, have been
prepared on the same basis as the audited combined financial statements and
include all significant adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation of the results of these interim
periods. Operating results for the six month period ended June 30, 1997 is not
necessarily indicative of the results for the entire year.

3. RELATED PARTIES:

Chi-Town Partners L.P. has engaged an affiliate of the operating general
partner to perform property management and other services for Chi-Town Partners,
L.P. Pursuant to the management agreement between the parties, the affiliate
receives the following fees:

- A Base Annual Management Fee of 3% of the Gross Operating Revenues
received by the Partnership, as defined in the agreement. For the
six-months ended June 30, 1997 and the year ended December 31, 1996,
$211,630 and $388,217 has been charged to expense of which $194,111 and
$354,240 is included in hotel operating expenses and $17,519 and $33,977
is included in office operating expenses, respectively.

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

3. RELATED PARTIES: (CONTINUED)
In addition, for each Fiscal Year beginning with July 1, 1994, Chi-Town
Partners, L.P. shall pay the affiliate an Incentive Fee equal to 10% of
the amount by which Operating Profit, as defined in the agreement, for
such Fiscal Year exceeds the Operating Profit Hurdle with respect to such
Fiscal Year, but in no event shall the sum of the Base Annual Management
Fee plus the Incentive Fee exceed 4% of the Gross Operating Revenues for
such Fiscal Year.

If the Operating Profit for a Fiscal Year is less than the Operating Profit
Hurdle with respect to such Fiscal Year, the Base Annual Management Fee shall be
reduced by an amount equal to 10% of such difference, but in no event shall the
Base Annual Management Fee be less than 2% of Gross Operating Revenues for such
Fiscal Year.

Operating Profit Hurdles are as follows:

FISCAL YEAR OPERATING PROFIT
ENDING JUNE 30, HURDLE
---------------- ----------------------

1996........................................................... $ 4,574,759
1997........................................................... 5,211,617
1998........................................................... 5,712,092

For the fiscal year ended June 30, 1996, the Operating Profit Hurdle was
achieved;. accordingly, the Chi-Town Partners, L.P. recognized an incentive fee
of $38,919.

- Construction management fees of 5% of the cost of building and tenant
improvements. For the six-months ended June 30, 1997 and the year ended
December 31, 1996, construction management fees totaled $42,203 and
$25,900, respectively, and are included in the cost of the property on the
accompanying balance sheet and depreciated in accordance with the method
described in Note 2.

- The affiliate receives leasing commissions in amounts which vary depending
upon the economic terms of the underlying leases and whether or not
outside brokerage commissions are paid. There were no leasing commissions
paid for the six-months ended June 30, 1997 and the year ended December
31, 1996.

At June 30, 1997 and December 31, 1996, $55,172 and $22,446, respectively,
in unpaid fees were due to the affiliate.

St. Elmo's Partners, L.P. has engaged an affiliate of the operating general
partner to perform property management and other services for St. Elmo's
Partners, L.P. Pursuant to the management agreement between the parties, the
affiliate receives the following fees:

- A base annual management fee of 3% of the gross operating revenues
received by St. Elmo's Partners, L.P, as defined in the agreement. For the
six-months ended June 30, 1997 and the year ended December 31, 1996,
$48,376 and $107,341, respectively, has been charged to expenses and is
included in operating expenses.

In addition, for each fiscal year beginning with August 1, 1994, St.
Elmo's Partners, L.P. shall pay the affiliate an incentive fee equal to
10% of the amount by which operating profit, as defined in the agreement,
for such fiscal year exceeds the operating profit hurdle with respect to
such fiscal year,

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

3. RELATED PARTIES: (CONTINUED)
but in no event shall the sum of the base annual management fee plus the
incentive fee exceed 4% of the gross operating revenues for such fiscal
year.

If the operating profit for a fiscal year is less than the operating
profit hurdle with respect to such fiscal year, the base annual management
fee shall be reduced by an amount equal to 10% of such difference, but in
no event shall the base annual management fee be less than 2% of gross
operating revenues for such fiscal year.

Operating profit hurdles are as follows:

FISCAL YEAR OPERATING PROFIT
ENDING JULY 31, HURDLE
---------------- ----------------------

1996........................................................... $ 1,458,779
1997........................................................... 1,514,181
1998........................................................... 1,571,850

- Construction management fees of 5% of the cost of building and tenant
improvements. For the six-months ended June 30, 1997 and the year ended
December 31, 1996, $21,103 and $16,169, respectively, of construction
management fees were earned by the affiliate.

At June 30, 1997 and December 31, 1996, $0 and $16,169, respectively, in
unpaid fees were due to the affiliate.

4. MORTGAGE NOTE PAYABLE:

Chi-Town Partners, L.P. has a note payable to a credit company. The loan is
non-recourse to the partners and is collateralized by a first mortgage on
Chi-Town Partners, L.P. real property and substantially all of the Chi-Town
Partners, L.P. other assets. The loan was structured to include a $3,500,000
capital loan component as well as a $8,500,000 construction loan component. The
maximum amount outstanding under this loan facility during 1996 was $11,794,994.
The mortgage note payable is due on February 28, 2000, with two options to
Chi-Town Partners, L.P. to extend the maturity date by one year upon payment of
$24,000 per option. The options are conditional upon Chi-Town Partners, L.P.
full performance of all loan conditions and requirements and a debt service
coverage ratio of not less than 1.5 to 1 based on the then current capped
interest rates. In addition, the mortgage note payable contains prepayment
penalties during the first three years.

Interest on the note is payable monthly in arrears. The interest rate is
3.75% above either the one, three or six month LIBOR rate which is periodically
chosen by the Chi-Town Partners, L.P. The interest rate on the note is 9.53% at
December 31, 1996 pursuant to a six-month LIBOR contract entered into by
Chi-Town Partners, L.P. on August 29, 1996.

Under the terms of the note monthly principal payments of $25,000 are
required commencing the month following the earlier of (1) the funding of the
maximum amount of the loan, (2) the substantial completion of the property's
renovation or (3) the second anniversary of the loan. The renovation was

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

4. MORTGAGE NOTE PAYABLE: (CONTINUED)
deemed to be substantially complete prior to December 31, 1995; monthly
principal payments commenced in January 1996. Accordingly, mandatory principal
payments under the note are as follows:

YEAR AMOUNT
- ------------------------------------------------------------------------------- -------------

1997........................................................................... $ 300,000
1998........................................................................... 300,000
1999........................................................................... 300,000
2000........................................................................... 10,719,994
-------------
Total.......................................................................... $ 11,619,994
-------------
-------------

St. Elmo's Partners, L.P. has a non-recourse note payable to a bank which is
collateralized by a first mortgage on St. Elmo's Partners, L.P. real property as
well as a collateral interest in substantially all of St. Elmo's Partners, L.P.
other assets. Quarterly principal reductions of $20,000 are required and the
loan has a final maturity date of April 15, 2000. Mandatory principal payments
under this note are as follows:

YEAR AMOUNT
- -------------------------------------------------------------------------------- ------------

1997............................................................................ $ 80,000
1998............................................................................ 80,000
1999............................................................................ 80,000
2000............................................................................ 3,640,000
------------
$ 3,880,000
------------
------------

Interest on the note is payable monthly in arrears. Under the terms of the
note, St. Elmo's Partners, L.P. has two interest rate options. St. Elmo's
Partners, L.P. can elect that the entire principal balance or any portion
thereof in excess of $1,000,000 bear interest at LIBOR plus three percent for
specified periods up to one year ("LIBOR Advance"). Any outstanding balance of
the loan which is not a LIBOR Advance bears interest at the greater of the
Bank's prime rate plus one and one-quarter percent or the Federal Funds rate
plus one-half of one percent. The LIBOR Advance in effect at December 31, 1996
was for a period of 30 days and expired on January 2, 1997. The interest rate on
the note was 8.5625% at December 31, 1996.

5. OPERATING LEASES:

The Partnerships lease space to tenants under noncancelable operating leases
with terms of up to 10 years. The Partnerships perform credit evaluations of
their lessees and generally do not require collateral

CHI-TOWN PARTNERS, L.P. AND
ST. ELMO'S PARTNERS, L.P.
(DELAWARE LIMITED PARTNERSHIPS)

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

5. OPERATING LEASES: (CONTINUED)
other than security deposits for most tenants. Minimum future rentals expected
to be received under noncancelable leases over the next five years are as
follows:

YEAR ENDING
DECEMBER 31, AMOUNT
------------- ------------

1997............................................................................. $ 1,101,044
1998............................................................................. 1,111,516
1999............................................................................. 975,262
2000............................................................................. 694,562
2001............................................................................. 463,447

The above amounts do not include any percentage rents or additional rent
from leases which provide for pass-through of operating expenses or escalations
based upon increases in the consumer price index.

6. EMPLOYEE BENEFIT PLANS:

Certain employees of Chi-Town Partners, L.P. are covered by union-sponsored,
collectively bargained, multi-employer pension and healthcare benefit plans.
Contributions and cost are determined in accordance with the provisions of
negotiated labor contracts or terms of the plans. Pension expense for these
plans was $56,401 and $106,964 and healthcare expense was $141,690 and $365,520,
respectively, for the six-months ended June 30, 1997 and the year ended December
31, 1996.

7. CONTINGENCIES:

The Partnerships are party to certain legal actions arising in the ordinary
course of business. The Partnerships believe that the ultimate disposition of
these matters will not have a material effect on their combined financial
position or combined results of operations.

8. SUBSEQUENT EVENT:

During July 1997, the Partnerships sold their hotels to CapStar Hotel
Company.