AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                         SHELBOURNE PROPERTIES III L.P.

            This Amendment, dated as of March 16, 2004 ("Amendment") to the
Second Amended and Restated Agreement of Limited Partnership, dated as of April
16, 2001 (as amended from time to time, the "Partnership Agreement") of
Shelbourne Properties III L.P. (the "Partnership"), is made and entered into by
and among (i) Shelbourne Properties III GP, Inc., as general partner ("SPGP"),
(ii) Shelbourne Properties III, Inc., HX Investors, L.P. and Shelbourne
Management LLC (together with SPGP, the "Partners") and (iii) Shelbourne
Properties GP, Inc. ("Newco").

            WHEREAS, pursuant to that certain agreement dated as of January 15,
2003, as amended March 16, 2004, by and among Presidio Capital Investment
Company, LLC, a Delaware limited liability company ("PCIC"), certain
subsidiaries of PCIC listed on the signature pages thereto, NorthStar Capital
Investment Corp., Shelbourne Management LLC, Shelbourne Properties I, Inc.,
Shelbourne Properties II, Inc., Shelbourne Properties III, Inc., Shelbourne
Properties I L.P., Shelbourne Properties II L.P., Shelbourne Properties III
L.P., and HX Investors, L.P. (the "ACCOR Agreement"), the Partnership intends to
effect a Complete Redemption (as defined in the ACCOR Agreement).

            WHEREAS, the parties deem it advisable to amend the Partnership
Agreement to reflect (i) the admission of Newco as a general partner and (ii)
the withdrawal of SPGP as a general partner, effective concurrently with the
Complete Redemption.

            NOW, THEREFORE, in consideration of the foregoing, the mutual
promises of the parties hereto, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

      1. Effective immediately prior to the Complete Redemption, Newco is hereby
admitted as a general partner of the Partnership with a 1% interest in the
profits and losses of the Partnership (provided that until the Complete
Redemption Newco's interest shall be limited to an interest in the Excluded
Properties, as such term is defined in the ACCOR Agreement) and, immediately
following the Complete Redemption, Newco shall be the sole general partner of
the Partnership.

      2. Effective concurrently with the Complete Redemption, SPGP hereby
withdraws as a general partner of the Partnership.

      3. As soon as practicable following the Complete Redemption, SPGP shall
file an amendment to the Partnership's Certificate of Limited Partnership
reflecting the admission of Newco as a general partner of the Partnership and
the withdrawal of SPGP as a general partner of the Partnership.



      4. Each of the Partners consents to the admission of Newco as a general
partner and the withdrawal of SPGP as a general partner as provided in this
Agreement.

      5. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one
original agreement binding on all parties hereto, notwithstanding that all the
parties shall not have signed the said counterpart.

      6. This Amendment shall be governed in all respects by the laws of the
State of Delaware (but not including the choice of law rules thereof).

      7. Except as hereby expressly modified, the Partnership Agreement, as
amended, shall otherwise be unchanged, shall remain in full force and effect,
and is hereby ratified and confirmed in all respects.


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      IN WITNESS WHEREOF, each of the undersigned has executed or has caused
this Amendment to be duly executed on its behalf as of the day and year first
written above.


                                              SHELBOURNE PROPERTIES III GP, INC.

                                              By: /s/ Peter Braverman
                                                  ------------------------------
                                                  Peter Braverman
                                                  Executive Vice President


                                              SHELBOURNE PROPERTIES III, INC.

                                              By: /s/ Peter Braverman
                                                  ------------------------------
                                                  Peter Braverman
                                                  Executive Vice President


                                              SHELBOURNE MANAGEMENT LLC

                                              By: /s/ Steven B. Kauff
                                                  ------------------------------
                                              Name:  Steven B. Kauff
                                              Title: Authorized Signatory


                                              HX INVESTORS L.P.

                                              By: Exeter Capital Corporation,
                                                  its general partner

                                              By: /s/ Peter Braverman
                                                  ------------------------------
                                              Name:  Peter Braverman
                                              Title: Executive Vice President


                                              SHELBOURNE PROPERTIES GP, INC.

                                              By: /s/ Steven B. Kauff
                                                  ------------------------------
                                              Name:  Steven B. Kauff
                                              Title: Vice President


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