United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report under Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarter ended September 30, 2017

Commission file #0-13545

JMB/245 PARK AVENUE ASSOCIATES, LTD.

(Exact name of registrant as specified in its charter)

Illinois

(State of organization)

36-3265541

(I.R.S. Employer Identification No.)

900 N. Michigan Ave., Chicago, Illinois

(Address of principal executive office)

60611

(Zip Code)

Registrant's telephone number, including area code: 312-915-1987

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 "Exchange Act") during the preceding 12 months (or for such a shorter period that 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 whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

	Large accelerated filer	[ ]		Accelerated filer	[ ]
	Non-accelerated filer	[ ]		Smaller reporting company	[ X ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [ X ]

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TABLE OF CONTENTS

Part I FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 4.	Controls and Procedures	12

Part II OTHER INFORMATION

Item 1.	Legal Proceedings	13

Item 1A.	Risk Factors	13

Item 6.	Exhibits	14

SIGNATURES		15

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Part I. Financial Information

Item 1. Financial Statements

JMB/245 PARK AVENUE ASSOCIATES, LTD.

(A Limited Partnership)

and Consolidated Venture

Consolidated Balance Sheets

September 30, 2017 and December 31, 2016

	September 30, 2017 (Unaudited)		December 31, 2016
Assets
Current assets:
Cash and cash equivalents (including $237,022 in reserve)	$	1,473,682	$	5,871
Accounts receivable		--		62,748
Total assets	$	1,473,682	$	68,619

Liabilities and Partners’ Capital Accounts (Deficits)
Current liabilities:
Accounts payable	$	14,406	$	18,105
Reserve for estimated tax payments		237,022		--
Demand note payable to an affiliate, including accrued interest of $1,366,571 at December 31, 2016		--		6,975,855

Commitments and contingencies

Total liabilities		251,428		6,993,960

Partners’ capital accounts (deficits):
General partners:
Capital contributions		26,664,247		26,664,247
Cumulative cash distributions		(480,000)		(480,000)
Cumulative net losses		(10,317,975)		(10,984,044)
Total general partners’ capital account		15,866,272		15,200,203
Limited partners (891 interests at September 30, 2017 and December 31, 2016):
Capital contributions, net of offering costs		113,057,394		113,057,394
Cumulative cash distributions		(10,473,555)		(7,520,000)
Cumulative net losses		(117,227,857)		(127,662,938)
Total limited partners’ capital account		(14,644,018)		(22,125,544)

Total partners’ capital accounts (deficits)		1,222,254		(6,925,341)

Total liabilities and partners’ capital accounts (deficits)	$	1,473,682	$	68,619

See accompanying notes to consolidated financial statements.

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JMB/245 PARK AVENUE ASSOCIATES, LTD.

(a Limited Partnership)

and Consolidated Venture

Consolidated Statements of Operations

Three and Nine Months Ended September 30, 2017 and 2016

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Income:
Annual preferred return	$	--	$	94,637	$	129,611	$	279,796
Redemption fee payment		--		--		3,900,000		--
Partnership redemption		--		--		7,406,368

Total income		--		94,637		11,435,979		279,796

Expenses:
Interest to an affiliate		--		78,218		154,826		231,494
Professional services		43,312		34,667		116,816		101,762
General and administrative		22,548		15,039		63,187		51,875

Total expenses		65,860		127,924		334,829		385,131

Net income (loss)	$	(65,860)	$	(33,287)	$	11,101,150	$	(105,335)

Net income (loss) per limited partnership interests	$	(70)	$	(35)	$	11,711	$	(110)

See accompanying notes to consolidated financial statements.

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JMB/245 PARK AVENUE ASSOCIATES, LTD.

(a Limited Partnership)

and Consolidated Venture

Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2017 and 2016

(Unaudited)

	2017		2016
Cash flows from operating activities:
Net income (loss)	$	11,101,150	$	(105,335)
Changes in:
Accounts receivable		62,748		1,028
Accounts payable		(3,699)		(1,232)
Interest payable to an affiliate		(1,366,571)		100,028
Net cash provided by (used in) operating activities		9,793,628		(5,511)

Cash flows from financing activities:
Fundings of demand note payable		30,000		10,000
Payments of demand note payable		(5,639,284)		--
Distributions to limited partners		(2,716,533)		--
Net cash provided by (used in) financing activities		(8,325,817)		10,000

Net increase in cash and cash equivalents		1,467,811		4,489

Cash and cash equivalents, beginning of period		5,871		3,231

Cash and cash equivalents, end of period	$	1,473,682	$	7,720

Supplemental cash flow disclosure:
Cash paid for interest	$	1,521,397	$	131,466

See accompanying notes to consolidated financial statements.

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JMB/245 PARK AVENUE ASSOCIATES, LTD.

(a Limited Partnership)

and Consolidated Venture

Notes to Consolidated Financial Statements

September 30, 2017 and 2016

(Unaudited)

General

Readers of this quarterly report should refer to the Partnership's audited financial statements for the fiscal year ended December 31, 2016, which are included in the Partnership's 2016 Annual Report on Form 10-K (File No. 0-13545) filed on March 15, 2017, as certain footnote disclosures which would substantially duplicate those contained in such audited financial statements have been omitted from this report. Capitalized terms used but not defined in this quarterly report have the same meanings as in the Partnership's 2016 Annual Report on Form 10-K.

JMB/245 Park Avenue Associates, Ltd. (the "Partnership"), through JMB 245 Park Avenue Holding Company, LLC ("245 Park Holding"), owned an approximate .5% general partner interest in Brookfield Financial Properties, L.P. ("BFP, LP"), formerly known as World Financial Properties, L.P. until December 29, 2014. The ownership was represented by 567.375 Class A Units. Business activities consisted primarily 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 BFP Property GP Corp. ("BFP GP"), which is an affiliate of the managing general partner of BFP, LP, is a 1% member.

On December 29, 2014, BFP, LP transferred 48.5% of the membership interests in BFP 245 Park Co., LLC, which owned an indirect interest in the property commonly known as 245 Park Avenue, New York, NY, to BFP-JMB 245 Park, L.P., a Delaware limited partnership (“BFP/JMB”). Immediately following such transfer, 245 Park’s Holdings’ interest in BFP, LP, as represented by the Class A Units in BFP, LP, was redeemed in exchange for an interest in BFP/JMB represented by Class J shares of BFP/JMB. 245 Park Holding no longer holds any interest in BFP, LP, or in BFP/JMB.

Upon execution of the limited partnership agreement of BFP/JMB, BFP, LP made a distribution to 245 Park Holding of approximately $2.53 million, which in turn distributed $2.5 million to the Partnership and $0.3 million to BFP, GP. BFP, LP owned all of the common shares and 245 Park Holding owned all of the Class J shares of BFP/JMB. 245 Park Holding was deemed to have made a capital contribution and investment for the Class J shares of approximately $7.5 million. The Class J shares accrued a cumulative annual preferred return of 5% which had a preference on any distributions by BFP/JMB to BFP, LP not attributable to a capital event. The unpaid preferred return and unpaid investment attributable to the Class J shares had a preference on any distributions by BFP/JMB to BFP, LP attributable to a capital event.

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BFP, LP could have caused BFP/JMB to redeem all or any portion of the Class J shares held by 245 Park Holding at any time for a payment equal to any cumulative unpaid preferred return plus the proportionate remaining unpaid investment attributable to the Class J shares, plus, during the initial five years following the transaction, an additional payment as follows: (i) with respect to a redemption on or following December 29, 2016 and prior to December 29, 2017, $3,939,394, (ii) with respect to a redemption on or following December 29, 2017 and prior to December 29, 2018, $2,626,263, (iii) with respect to a redemption on or following December 29, 2018 and prior to December 29, 2019, $1,313,131 and (iv) with respect to a redemption on or following December 29, 2019, $0. At any time thereafter, 245 Park Holding could have caused BFP/JMB to redeem all or any portion of the Class J shares at any time for a payment equal to any cumulative unpaid preferred return plus the proportionate remaining unpaid investment attributable to the Class J shares.

As previously disclosed, BFP, LP marketed for sale an interest in the 245 Park Avenue property. On May 5, 2017 the sale occurred.

As a consequence and under the terms of the December 29, 2014 Partnership Agreement, in a May 2, 2017 Redemption Notice, the Board of Managers of BFP/JMB issued a notice to 245 Park Holding directing BFP/JMB to redeem all of the outstanding Class J Units of 245 Park Holding. The Redemption Notice provided that on May 5, 2017 (the “Redemption Date”) the Board of Managers of BFP/JMB would cause BFP/JMB to redeem 7,481,180 Class J Units, as of May 2, 2017. The dollar amount of the unpaid preferred capital that was redeemed pursuant to the redemption was $7,481,180. On the Redemption Date, BFP/JMB paid to 245 Park Holding the sum of (a) the Redemption Amount plus (b) the Unpaid Preferred Return from the date of its Redemption Notice through and including the Redemption Date on the Class J Units being redeemed. As a result, the Partnership received its 99% of the redemption amount of $7,481,180, plus an additional $3,939,394 for a total of $11,420,574, which was recognized as income for financial reporting purposes. Such funds became available, among other things, to retire its indebtedness, pay operating costs and those costs related to the termination of its affairs and pay distributions to, or make any required estimated tax payments on behalf of, Holders.

The Partnership made a distribution of $2,500 per unit in June 2017 and is making a final distribution of approximately $2,000 per unit later in November. From the distribution of $2,500 per unit declared in June, $237,022 has been reserved by the Partnership pending determination of the required estimated tax payment. Amounts reserved will be paid to Holders of Interests with the final distribution. In September, the Partnership remitted $725,205 to the state of New York on behalf of certain Holders for estimated tax payments. Such amount has been recorded as a distribution and will be reflected in the final distribution checks.

The Partnership is expected to wind up its affairs by the end of this year.

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As a result of the sale and redemption, it is expected that Holders of Interests will be allocated a substantial amount of gain for Federal and state income tax purposes. The amount of gain for Federal and state income tax purposes is expected to be, at a minimum, equal to all or most of the amount of each Holder’s deficit capital account for tax purposes. For each Holder, such gain may be offset by suspended losses from prior years (if any) that have been allocated to the Holder of Interests. The Partnership cannot determine the ultimate tax liability of each Holder and each Holder is encouraged to seek tax advice relative to its liability. The actual tax liability of each Holder of Interests will depend on Holder’s individual tax situation.

The accompanying consolidated financial statements include the accounts of the Partnership and its majority-owned limited liability company, 245 Park Holding. The effect of all transactions between the Partnership and its consolidated venture has been eliminated.

The Partnership 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 or BFP/JMB, because the Partnership has no future funding obligations to BFP, LP or BFP/JMB, and has no influence or control over the day-to-day affairs of BFP, LP or BFP/JMB.

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 these estimates.

Before the sale of the property, the Partnership's future liquidity and ability to continue as a going concern was dependent upon JMB for continued advances and the receipt of the cumulative annual preferred return on the Class J shares of BFP/JMB. JMB's advances, as well as consolidated balances from prior notes, were evidenced by a demand note (the "Demand Note"), dated December 1, 2004, which Demand Note was secured by the Partnership's indirect interest in BFP/JMB. JMB was under no obligation to make further advances and had the right to require repayment of the Demand Note together with accrued and unpaid interest at any time. This uncertainty and the fact that the Partnership has a net capital deficiency raised substantial doubt about the Partnership's ability to continue as a going concern. No adjustments to these consolidated financial statements for this uncertainty were made.

Transactions with Affiliates

The operations of the Partnership since 2005 have been primarily funded by cash advances from JMB which totaled $2,157,000 as of September 30, 2017 (of which $30,000 was funded during the nine months ended September 30, 2017) and which, together with the amount owed and rolled over from prior notes, were evidenced by the Demand Note. The Partnership made payments in the amount of $1,521,397 to the accrued interest on the Demand Note during the nine months ended September 30, 2017. The Demand Note, which had an outstanding balance of unpaid principal and accrued interest of $7,045,714, was paid in full on June 15, 2017. The Demand Note accrued interest at prime plus 1 percent, with interest compounded quarterly and included in principal, and was secured by the Partnership's interest in BFP/JMB.

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In accordance with the Partnership Agreement, JMB Park Avenue, Inc., the Corporate General Partner, and its affiliates are entitled to receive payment or 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. Additionally, the Corporate General Partner and its affiliates are entitled to reimbursements for portfolio management, legal and accounting services. The Partnership incurred costs of $23,808 and $24,727 for the nine months ended September 30, 2017 and 2016, for these services, which are included in general and administrative expenses on the consolidated statements of operations. The Partnership owed the Corporate General Partner and its affiliates $10,417 and $2,789 for these services at September 30, 2017 and December 31, 2016, respectively, which are included in accounts payable on the consolidated balance sheets.

Any reimbursable amounts currently payable to the Corporate General Partner and its affiliates do not bear interest.

Adjustments

In the opinion of the Corporate General Partner, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation (assuming the Partnership continues as a going concern) have been made to the accompanying financial statements as of September 30, 2017 and December 31, 2016, and for the three and nine months ended September 30, 2017 and 2016.

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Part I. Financial Information

Item 2.

Management’s Discussion and Analysis of Financial Condition and of Operations

Liquidity and Capital Resources

Capitalized terms used herein but not defined have the same meanings as in the Partnership's 2016 Annual Report on Form 10-K.

Before the sale of the property, the Partnership's future liquidity and ability to continue as a going concern was dependent upon JMB for continued advances and the receipt of the cumulative annual preferred return on the Class J shares of BFP/JMB. This uncertainty and the fact that the Partnership had a net capital deficiency raised substantial doubt about the Partnership's ability to continue as a going concern. The operations of the Partnership since 2005 have been primarily funded by cash advances from JMB which totaled $2,157,000 as of September 30, 2017 (of which $30,000 was funded during the nine months ended September 30, 2017) and which, together with the amount owed and rolled over from prior notes, were evidenced by the Demand Note. The Partnership made payments in the amount of $1,521,397 to the accrued interest on the Demand Note during the six months ended June 30, 2017. The Demand Note, which had an outstanding balance of unpaid principal and accrued interest of $7,045,714, was paid in full on June 15, 2017. The Demand Note accrued interest at prime plus 1 percent, with interest compounded quarterly and included in principal, and was secured by the Partnership's interest in BFP/JMB.

As a result of the sale and redemption, the Partnership has obligations for estimated tax payments to the state of New York on behalf of certain Holders of Interests. Notwithstanding any such obligations, the Partnership believes that the Holders of Interests have the ultimate responsibility for the timely filing of state and Federal tax returns and the payment of all related taxes.

As previously disclosed, BFP, LP marketed for sale an interest in the 245 Park Avenue property. On May 5, 2017 the sale occurred.

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The Partnership made a distribution of $2,500 per unit in 2017 and is making a final distribution of approximately $2,000 per unit later in November. From the distribution of $2,500 per unit declared in June, $237,022 has been reserved by the Partnership pending determination of the required estimated tax payment. Amounts reserved will be paid to Holders of Interests with the final distribution. In September, the Partnership remitted $725,205 to the state of New York on behalf of certain Holders for estimated tax payments. Such amount has been recorded as a distribution and will be reflected in the final distribution checks.

The Partnership is expected to wind up its affairs by the end of this year.

Results of Operations

The operations of the Partnership since 2005 have primarily been funded by cash advances from JMB which totaled $2,157,000 as of September 30, 2017 (of which $30,000 was funded during the nine months ended September 30, 2017) and which, together with the amount owed and rolled over from Replacement Note 1, were evidenced by the Demand Note, which was paid in full on June 15, 2017.

The decrease in demand note payable to an affiliate at September 30, 2017 as compared to December 31, 2016 and the related decrease in interest to an affiliate for the three and nine months ended September 30, 2017 as compared to the same period in 2016 is due to the full payment on the demand note on June 15, 2017.

The decrease in the annual preferred return and the related increase in redemption fee payment and partnership redemption for the nine months ended September 30, 2017 is due to the Redemption Notice dated May 2, 2017 and the redemption payment of approximately $11,400,000.

The increase in professional services for the three and nine months ended September 30, 2017 as compared to the same period in 2016 is due to the timing of billings on accounting services.

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Item 4. Controls and Procedures

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-15(e) of the Securities Exchange Act of 1934 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.

Changes in Internal Control over Financial Reporting

There were no significant changes to our internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) of the Securities Exchange Act of 1934) during the three months ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings

The Partnership is not subject to any material pending legal proceedings.

Item 1A. Risk Factors

There has been no known material changes from risk factors as previously disclosed in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2016.

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Item 6. Exhibits

a.	Exhibits.

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

	3.2.	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 herein by reference to Exhibit 3-B to the Partnership's Report for March 31, 1995 on Form 10-Q (File No. 0-13545) dated May 11, 1995.

	4.1.	Security Agreement, dated May 7, 2001, by JMB/245 Park Avenue Associates, Ltd. in favor of JMB Realty Corporation is hereby incorporated herein by reference to the Partnership's Report for September 30, 2004 on Form 10-Q (File No. 0-13545) dated November 10, 2004.

	4.2.	Promissory Note, payable on demand, dated December 1, 2004, is hereby incorporated herein by reference to the Partnership's Report for December 1, 2004 on Form 8-K (File No. 0-13545), dated December 7, 2004.

	10.4	Limited Partnership Agreement of BFP-JMB 245 Park, L.P. dated as of December 29, 2014 is hereby incorporated by reference to Exhibit 10.1 on Form 8-K (File No. 0-13545) filed on December 31, 2014.

	10.5	Assignment and Redemption Agreement between Brookfield Financial Properties, L.P. and JMB 245 Park Avenue Holding Company, LLC dated December 29, 2014 is hereby incorporated herein by reference to Exhibit 10.2 on Form 8-K (File No. 0-13545) filed on December 31, 2014.

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

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

	32	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant 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:	November 9, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person in the capacities and on the date indicated.

GAILEN J. HULL

By:

Gailen J. Hull, Chief Financial Officer

and Principal Accounting Officer

Date:

November 9, 2017

JMB 245 PARK AVENUE ASSOCIATES LTD 10-Q