1
                                                                     EXHIBIT 5.1

                  [REED SMITH SHAW & MCCLAY LLP LETTERHEAD]

                                          June 4, 1998


Carey Diversified LLC
50 Rockefeller Plaza
New York, New York  10020

                 Re:      Registration Statement on Form S-8 for the
                          Carey Diversified LLC Employee Share Purchase Plan
                          (the "Plan")


Gentlemen:

                 We have acted as counsel to Carey Diversified LLC (the
"Company") in connection with the above-captioned Registration Statement
relating to 500,000 Limited Liability Company Listed Shares of the Company (the
"Shares") which may be purchased by employees, officers, managers and certain
affiliates of the Company under the Plan.  The Plan provides that either
unissued or reacquired Shares, or any combination thereof, may be purchased
under the Plan.  In rendering our opinion below, we have assumed that any
previously issued Shares reacquired by the Company and used under the Plan were
duly authorized, validly issued and fully paid at the time of their original
issuance.

                 In connection with this opinion, we have examined, among other
things:

                 (1)      Amended and Restated Limited Liability Company
Agreement of the Company, as amended to date;

                 (2)      the By Laws of the Company, as amended to date;

                 (3)      resolutions adopted by the Board of Directors of the
Company on April 7, 1998, adopting the Carey Diversified LLC Employee Share
Purchase Plan; and

                 (4)      the Carey Diversified LLC Employee Share Purchase
Plan, as currently in effect.

                 Based upon the foregoing and upon an examination of such other
documents, corporate proceedings, statutes, decisions and questions of law as
we considered necessary in order to enable us to furnish this opinion, and
subject to the assumption set forth above, we are pleased to advise you that in
our opinion:

                 (a)      The Company has been duly formed and is a validly
existing limited liability company under the laws of the State of Delaware; and

                 (b)      The Limited Liability Company Listed Shares being
registered and which may be sold by the Company pursuant to the provisions of
the Plan have been duly authorized,
   2
REED SMITH SHAW & MCCLAY LLP

Carey Diversified LLC
June 4, 1998
Page 2


and upon such sale in accordance with the provisions of the Plan such Shares
will be validly issued, fully paid and nonassessable.

                 We hereby consent to the filing of this opinion as an Exhibit
to the Registration Statement and to the use of our name in the Prospectus
under the caption "Legal Opinion".



                                        Very truly yours,

                                        /s/ Reed Smith Shaw & McClay LLP