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               [LETTERHEAD OF AMERICAN REAL ESTATE PARTNERS, L.P.]

Contact: John P. Saldarelli
         Secretary and Treasurer
         914-242-7700

                              FOR IMMEDIATE RELEASE

AMERICAN REAL ESTATE PARTNERS, L.P. ANNOUNCES THE PROPOSAL OF AN AMENDMENT TO
ITS PARTNERSHIP AGREEMENT TO PERMIT IT TO MAKE NON-REAL ESTATE INVESTMENTS.

MT. KISCO, NEW YORK -- June 21, 1996 -- American Real Estate Partners, L.P.
(NYSE:ACP) ("AREP") today announced that the Board of Directors of its General
Partner (the "Board") approved an amendment to AREP's partnership agreement
which will permit AREP to make non-real estate investments. Mr. Carl C. Icahn is
Chairman of the Board of the General Partner and controls High Coast Limited
Partnership ("High Coast"), which beneficially owns approximately 50.6% of
AREP's Depositary Units. High Coast has indicated to AREP that it will consent
to such amendment, which requires approval of a majority in interest.

The Amendment will permit AREP to invest in securities issued by companies that
are not necessarily engaged as one of their primary activities in the ownership,
development or management of real estate and to further diversify its portfolio
while remaining in the real estate business. In making its announcement, AREP
noted that it intends to continue to seek to invest its assets available for
investment in undervalued assets in the real estate market, including
residential development projects, land parcels for future residential and
commercial development, non-performing loans, commercial properties, real estate
securities including limited partnership units and securities issued by real
estate investment trusts and real estate operating and development companies,
which transactions may include those from and with affiliates of the General
Partner provided the terms thereof are fair and reasonable to the Partnership.
While AREP believes opportunistic real estate investments continue to remain
available, such investments have become more competitive to source and the
increased competition has had an adverse impact on the spreads and the ability
to find quality assets that provide returns sought by AREP. In approving the
Amendment, the Audit Committee of the Board received a study from Coopers &
Lybrand L.L.P. which, among other things, confirmed AREP's view that the
availability of capital and competition in the real estate markets has increased
significantly over the last 12 to 24 months, making it more difficult to earn
higher yields sought by AREP.

AREP believes that it is in the best interests of AREP and its unitholders for
AREP to be permitted to invest a portion of AREP's funds in assets outside the
real estate market that may provide returns on its funds in excess of those
available to AREP in the current real estate market or those currently received
on investments in government securities. AREP also noted it will conduct its
activities in such a manner so as not to be deemed an investment company under
the Investment Company Act of 1940. Generally, this means that no more than 40%
of AREP's total assets will be invested in securities. AREP further noted that
it intends not only to use its available cash to make investments, but also to
sell some of its existing portfolio properties and to use these proceeds to
reinvest in undervalued assets, whether real estate related or otherwise.

AREP noted in its preliminary Information Statement filed today with the
Securities and Exchange Commission that it is in a unique position to utilize
the expertise of Carl Icahn, the Chairman of the Board of its General Partner
and its principal Unitholder, and Icahn's affiliates. AREP anticipates that
under Icahn's guidance it will pursue appropriate opportunities in undervalued
situations for the purpose of maximizing returns and diversifying its portfolio.
Such transactions may include transactions with affiliates of Icahn, provided
the terms thereof are fair and reasonable to the Partnership. AREP reported that
Mr. Icahn had confirmed that neither he nor his affiliates would receive any
fees from the Partnership for services rendered in connection with non-real
estate related investments by the Partnership. AREP noted that, although risks
exist in this policy and there can be no assurances of positive results, it
continues to seek to enhance long-term unitholder value through investment.

American Real Estate Partners, L.P. is a master limited partnership primarily
engaged in acquiring and managing real estate, with the primary focus on office,
retail, industrial, hotel and residential properties.