-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QomdgSa8yE0f0IrHrSglrhVm2s8mx5B2cgXgxyvoIqDS3PmgLjccWfTrerF2IKqq 6YDXO6KpWubvNvlBbE8yMg== 0000950136-98-001332.txt : 19980803 0000950136-98-001332.hdr.sgml : 19980803 ACCESSION NUMBER: 0000950136-98-001332 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19980730 SROS: NONE GROUP MEMBERS: COOPER RIVER PROPERTIES LLC GROUP MEMBERS: COOPER RIVER PROPERTIES, L.L.C. GROUP MEMBERS: INSIGNIA FINANCIAL GROUP, INC. GROUP MEMBERS: INSIGNIA PROPERTIES TRUST GROUP MEMBERS: INSIGNIA PROPERTIES, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED CAPITAL PROPERTIES V CENTRAL INDEX KEY: 0000725614 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 942918560 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-52103 FILM NUMBER: 98674436 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: POST OFFICE BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED CAPITAL PROPERTIES V CENTRAL INDEX KEY: 0000725614 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 942918560 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: SEC FILE NUMBER: 005-52103 FILM NUMBER: 98674437 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: POST OFFICE BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: COOPER RIVER PROPERTIES LLC CENTRAL INDEX KEY: 0001066016 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA PLAZA STREET 2: P O BOX 19059 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 2128788022 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P O BOX 19059 CITY: GREENVILLE STATE: SC ZIP: 29602 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: COOPER RIVER PROPERTIES LLC CENTRAL INDEX KEY: 0001066016 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA PLAZA STREET 2: P O BOX 19059 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 2128788022 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P O BOX 19059 CITY: GREENVILLE STATE: SC ZIP: 29602 SC 14D1 1 SCHEDULE 14D-1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1) ------------------ CONSOLIDATED CAPITAL PROPERTIES V (Name of Subject Company) COOPER RIVER PROPERTIES, L.L.C. INSIGNIA PROPERTIES, L.P. INSIGNIA PROPERTIES TRUST INSIGNIA FINANCIAL GROUP, INC. (Bidders) UNITS OF LIMITED PARTNERSHIP INTEREST (Title of Class of Securities) NONE (Cusip Number of Class of Securities) ------------------ JEFFREY P. COHEN SENIOR VICE PRESIDENT INSIGNIA FINANCIAL GROUP, INC. 375 PARK AVENUE, SUITE 3401 NEW YORK, NEW YORK 10152 (212) 750-6070 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidders) COPY TO: JOHN A. HEALY, ESQ. ROGERS & WELLS 200 PARK AVENUE NEW YORK, NEW YORK 10166 (212) 878-8000 ------------------ CALCULATION OF FILING FEE - ------------------------------------------------------------------------------- Transaction Valuation*: $1,320,000 Amount of Filing Fee: $264 - ------------------------------------------------------------------------------- * For purposes of calculating the fee only. This amount assumes the purchase of 40,000 units of limited partnership interest ("Units") of the subject partnership for $33 per Unit. The amount of the filing fee, calculated in accordance with Section 14(g)(3) and Rule 0-11(d) under the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the aggregate of the cash offered by the bidders. o Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount Previously Paid: Not Applicable Filing Party: Not Applicable Form or Registration No.: Not Applicable Date Filed: Not Applicable - ------------------------------------------------------------------------------- - --------------- -------- CUSIP No. NONE 14D-1 AND 13D/A Page 2 - --------------- -------- =============================================================================== 1. Name of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons COOPER RIVER PROPERTIES, L.L.C. - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (a)[ ] (b)[X] - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Sources of Funds AF - ------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) [ ] - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization DELAWARE - ------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 46,631.8 - ------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares [ ] - ------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row 7 26.0% - ------------------------------------------------------------------------------- 10. Type of Reporting Person OO =============================================================================== - --------------- -------- CUSIP No. NONE 14D-1 AND 13D/A Page 3 - --------------- -------- =============================================================================== 1. Name of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons INSIGNIA PROPERTIES, L.P. - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (a)[ ] (b)[X] - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Sources of Funds WC - ------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) [ ] - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization DELAWARE - ------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 46,631.8 - ------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares [ ] - ------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row 7 26.0% - ------------------------------------------------------------------------------- 10. Type of Reporting Person PN =============================================================================== - --------------- -------- CUSIP No. NONE 14D-1 AND 13D/A Page 4 - --------------- -------- =============================================================================== 1. Name of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons INSIGNIA PROPERTIES TRUST - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (a)[ ] (b)[X] - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Sources of Funds NOT APPLICABLE - ------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) [ ] - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization MARYLAND - ------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 46,631.8 - ------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares [ ] - ------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row 7 26.0% - ------------------------------------------------------------------------------- 10. Type of Reporting Person OO =============================================================================== - --------------- -------- CUSIP No. NONE 14D-1 AND 13D/A Page 5 - --------------- -------- =============================================================================== 1. Name of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons INSIGNIA FINANCIAL GROUP, INC. - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (a)[ ] (b)[X] - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Sources of Funds NOT APPLICABLE - ------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) [ ] - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization DELAWARE - ------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 46,631.8 - ------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares [ ] - ------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row 7 26.0% - ------------------------------------------------------------------------------- 10. Type of Reporting Person CO =============================================================================== - --------------- -------- CUSIP No. NONE 14D-1 AND 13D/A Page 6 - --------------- -------- =============================================================================== 1. Name of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons ANDREW L. FARKAS - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (a)[ ] (b)[X] - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Sources of Funds NOT APPLICABLE - ------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) [ ] - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization UNITED STATES - ------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 46,631.8 - ------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares [ ] - ------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row 7 26.0% - ------------------------------------------------------------------------------- 10. Type of Reporting Person IN =============================================================================== SCHEDULE 14D-1/AMENDMENT NO. 1 TO SCHEDULE 13D This Tender Offer Statement on Schedule 14D-1 (the "Statement") also constitutes Amendment No. 1 to the Statement on Schedule 13D previously filed by Madison River Properties, L.L.C., Insignia Properties, L.P. ("IPLP"), Insignia Properties Trust ("IPT"), Insignia Financial Group, Inc. ("Insignia") and Andrew L. Farkas in connection with their beneficial ownership of Units (as defined below). The item numbers and responses thereto set forth below are in accordance with the requirements of Schedule 14D-1. ITEM 1. SECURITY AND SUBJECT COMPANY. (a) The name of the subject company is Consolidated Capital Properties V, a California limited partnership (the "Partnership"). The address of the Partnership's principal executive offices is One Insignia Financial Plaza, Greenville, South Carolina 29602. (b) This Statement relates to an offer by Cooper River Properties, L.L.C., a Delaware limited liability company (the "Purchaser"), to purchase up to 40,000 of the outstanding units of limited partnership interest ("Units") of the Partnership at a purchase price of $33 per Unit, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 30, 1998 (the "Offer to Purchase") and the related Assignment of Partnership Interest (which, together with any supplements or amendments, collectively constitute the "Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2) hereto, respectively. The information set forth in the Offer to Purchase under "Introduction" is incorporated herein by reference. (c) The information set forth in the Offer to Purchase in Section 13 ("Background of the Offer") is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a)-(d), (g) This Statement is being filed by the Purchaser, IPLP, IPT and Insignia (collectively, the "Bidders"), and solely, insofar as the filing also constitutes Amendment No. 1 to the Schedule 13D, by Mr. Farkas. The information set forth in the Offer to Purchase under "Introduction," in Section 11 ("Certain Information Concerning the Purchaser, IPLP, IPT and Insignia") and in Schedules I, II and III to the Offer to Purchase is incorporated herein by reference. (e)-(f) During the last five years, none of the Bidders nor, to the best of their knowledge, any of the persons listed in Schedules I, II and III to the Offer to Purchase (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining further violations of or prohibiting activities subject to federal or state securities laws or finding any violation with respect to such laws. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. (a)-(b) The information set forth in the Offer to Purchase under "Introduction," in Section 10 ("Conflicts of Interest and Transactions with Affiliates") and in Section 13 ("Background of the Offer") is incorporated herein by reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) The information set forth in the Offer to Purchase in Section 10 ("Conflicts of Interest and Transactions with Affiliates") and in Section 12 ("Source of Funds") is incorporated herein by reference. (b)-(c) Not applicable. 7 ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (a)-(b), (e) The information set forth in the Offer to Purchase under "Introduction" and in Section 8 ("Future Plans of Insignia, IPT and the Purchaser") is incorporated herein by reference. (c) The information set forth in the Offer to Purchase in Section 8 ("Future Plans of Insignia, IPT and the Purchaser"), in Section 10 ("Conflicts of Interest and Transactions with Affiliates") and in Section 13 ("Background of the Offer") is incorporated herein by reference. (d) Not applicable. (f)-(g) The information set forth in the Offer to Purchase in Section 7 ("Effects of the Offer") is incorporated herein by reference. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a)-(b) The information set forth in the Offer to Purchase under "Introduction," and in Section 11 ("Certain Information Concerning the Purchaser, IPLP, IPT and Insignia") is incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. The information set forth in the Offer to Purchase under "Introduction," in Section 7 ("Effects of the Offer"), Section 10 ("Conflicts of Interest and Transactions with Affiliates"), Section 11 ("Certain Information Concerning the Purchaser, IPLP, IPT and Insignia") and Section 13 ("Background of the Offer") is incorporated herein by reference. ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth in the Offer to Purchase under "Introduction" and in Section 16 ("Fees and Expenses") is incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. The information set forth in the Offer to Purchase in Section 11 ("Certain Information Concerning the Purchaser, IPLP, IPT and Insignia") is incorporated herein by reference. In addition, the following are expressly incorporated in this Statement by reference: (i) the audited financial statements of Insignia set forth at Part I-Item 8 of Insignia's Annual Report on Form 10-K for the year ended December 31, 1997, which is on file with the Commission; and (ii) the unaudited financial statements of Insignia set forth at Part I-Item 1 of Insignia's Quarterly Report on Form 10-Q/A for the period ended March 31, 1998, which is on file with the Commission. ITEM 10. ADDITIONAL INFORMATION. (a) Not applicable. (b)-(d) The information set forth in the Offer to Purchase in Section 15 ("Certain Legal Matters") is incorporated herein by reference. (e) None. (f) The information set forth in the Offer to Purchase and the related Assignment of Partnership Interest, copies of which are filed as Exhibits (a)(1) and (a)(2) hereto, respectively, is incorporated herein by reference in its entirety. 8 ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Offer to Purchase, dated July 30, 1998. (a)(2) Assignment of Partnership Interest and Related Instructions. (a)(3) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(4) Cover Letter, dated July 30, 1998, from the Purchaser to the Limited Partners of the Partnership. (b) Not applicable. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) Not applicable. (z)(1) Summaries of appraisals referred to in the Offer to Purchase in Section 13 ("Background of the Offer"). (z)(2) Agreement of Joint Filing, dated July 30, 1998, among the Purchaser, IPLP, IPT, Insignia and Andrew L. Farkas. 9 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: July 30, 1998 COOPER RIVER PROPERTIES, L.L.C. INSIGNIA FINANCIAL GROUP, INC. By: /s/ JEFFREY P. COHEN By: /s/ FRANK M. GARRISON ------------------------------- ------------------------------- Jeffrey P. Cohen Frank M. Garrison Manager Executive Managing Director INSIGNIA PROPERTIES, L.P. SOLELY FOR PURPOSES OF, AND INSOFAR AS THIS FILING CONSTITUTES, AMENDMENT By: Insignia Properties Trust, NO. 1 TO THE STATEMENT ON SCHEDULE its General Partner 13D By: /s/ JEFFREY P. COHEN /s/ ANDREW L. FARKAS ------------------------------- ---------------------------------- Jeffrey P. Cohen ANDREW L. FARKAS Senior Vice President INSIGNIA PROPERTIES TRUST By: /s/ JEFFREY P. COHEN ------------------------------- Jeffrey P. Cohen Senior Vice President KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints Jeffrey P. Cohen his true and lawful attorney-in-fact and agent to sign in any and all capacities this Amendment No. 1 and all further amendments to the Statement on Schedule 13D and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting to such attorney-in-fact and agent full power and authority to do all such other acts and execute all such other documents as he may deem necessary or desirable in connection with the foregoing, as fully as the undersigned might or could do in person, hereby ratifying and confirming that such attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof. /s/ ANDREW L. FARKAS - ----------------------------- Andrew L. Farkas Dated: July 30, 1998 10 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- (a)(1) Offer to Purchase, dated July 30, 1998. (a)(2) Assignment of Partnership Interest and Related Instructions. (a)(3) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(4) Cover Letter, dated July 30, 1998, from the Purchaser to the Limited Partners of the Partnership. (z)(1) Summaries of appraisals referred to in the Offer to Purchase in Section 13 ("Background of the Offer"). (z)(2) Agreement of Joint Filing, dated July 30, 1998, among the Purchaser, IPLP, IPT, Insignia and Andrew L. Farkas. 11 EX-99.(A)(1) 2 OFFER TO PURCHASE Offer to Purchase for Cash Up to 40,000 Units of Limited Partnership Interest in CONSOLIDATED CAPITAL PROPERTIES V, a California limited partnership for $33 Net Per Unit by COOPER RIVER PROPERTIES, L.L.C. - ------------------------------------------------------------------------------- THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK TIME, ON AUGUST 26, 1998, UNLESS THE OFFER IS EXTENDED. - ------------------------------------------------------------------------------- IMPORTANT Cooper River Properties, L.L.C., a Delaware limited liability company (the "Purchaser"), is offering to purchase up to 40,000 of the outstanding units of limited partnership interest ("Units") in Consolidated Capital Properties V, a California limited partnership (the "Partnership"), at a purchase price of $33 per Unit (the "Purchase Price"), net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Assignment of Partnership Interest (which, together with any supplements or amendments, collectively constitute the "Offer"). The Purchase Price is subject to adjustment under certain circumstances, as described herein. Holders of Units (each, a "Limited Partner") who tender their Units in response to the Offer will not be obligated to pay any commissions or partnership transfer fees. The Purchaser is an affiliate of ConCap Equities, Inc., which is the general partner of the Partnership (the "General Partner"). Limited Partners are urged to consider the following factors: o The Purchaser and the General Partner are both affiliates of and controlled by Insignia Properties Trust ("IPT"), which is controlled by Insignia Financial Group, Inc. ("Insignia"). IPT, through its operating partnership Insignia Properties, L.P. ("IPLP"), currently owns 46,632 Units (including 43,796 Units which were originally acquired by an affiliate of the General Partner and Insignia, at a purchase price of $30 per Unit pursuant to a tender offer commenced in December 1997). o The net asset value per Unit most recently estimated by the General Partner was $49 as of June 30, 1998, and the net liquidation value per Unit (the "Estimated Liquidation Value") estimated by the Purchaser (which is an affiliate of the General Partner) in connection with the Offer is $48.77. The Purchaser does not believe, however, that either the General Partner's net asset value estimate or the Estimated Liquidation Value represents a fair estimate of the market value of a Unit, primarily due to the fact that such estimates do not take into account timing considerations, market uncertainties and legal and other expenses that would be incurred in connection with a liquidation of the Partnership. See Section 13. Accordingly, the Purchaser does not believe that such estimates should be viewed as representative of the amount a Limited Partner can realistically expect to obtain on a sale of a Unit in the near term. o The Purchaser will have the right to vote all Units acquired pursuant to the Offer. Accordingly, if the Purchaser (which is an affiliate of the General Partner) is successful in acquiring a significant number of Units, it will be able to significantly influence the outcome of all voting decisions with respect to the Partnership, including decisions regarding liquidation, amendments to the Limited Partnership Agreement, removal and replacement of the General Partner and mergers, consolidations and other extraordinary transactions. Because IPT already owns (through IPLP) approximately 26% of the outstanding Units, however, it will be able to significantly influence the outcome of all voting decisions with respect to the Partnership regardless of the number of Units the Purchaser acquires pursuant to the Offer. o The Purchaser (which is an affiliate of the General Partner) is making the Offer with a view to making a profit. Accordingly, there is a conflict between the desire of the Purchaser (which is an affiliate of the General Partner) to purchase Units at a low price and the desire of the Limited Partners to sell their Units at a high price. THE OFFER IS NOT CONDITIONED ON FINANCING OR UPON ANY MINIMUM AGGREGATE NUMBER OF UNITS BEING TENDERED. ---------------------------------------- Any Limited Partner desiring to tender Units should complete and sign the Assignment of Partnership Interest in accordance with the Instructions to the Assignment of Partnership Interest and mail or deliver the signed Assignment of Partnership Interest to the Depositary. A Limited Partner may tender any or all of the Units owned by that Limited Partner; provided, however, that because of restrictions in the Partnership's Limited Partnership Agreement, a partial tender of Units must be for a minimum of twelve Units (other than Limited Partners who are residents of Missouri, who must tender a minimum of twenty Units). Tenders of fractional Units will not be permitted, except by a Limited Partner who is tendering all of the Units owned by that Limited Partner. Questions and requests for assistance or for additional copies of this Offer to Purchase and the Assignment of Partnership Interest may be directed to the Information Agent at the address and telephone numbers set forth below and on the back cover of this Offer to Purchase. No soliciting dealer fees or other payments to brokers for tenders are being paid by the Purchaser (which is an affiliate of the General Partner). ---------------------------------------- For More Information or for Further Assistance Please Call: Beacon Hill Partners, Inc. at (800) 854-9486 July 30, 1998 TABLE OF CONTENTS PAGE INTRODUCTION............................................................... 1 The Purchaser; Affiliation with the General Partner.................... 1 Some Factors to Be Considered by Limited Partners...................... 1 Reasons for and Effects of the Offer................................... 3 Certain Tax Considerations............................................. 3 Originally Anticipated Term of the Partnership; General Policy Regarding Sales and Refinancings of Partnership Properties; Alternatives...................................... 4 Conditions............................................................. 4 Distributions.......................................................... 4 Outstanding Units...................................................... 4 THE OFFER.................................................................. 5 Section 1. Terms of the Offer; Expiration Date; Proration............. 5 Section 2. Acceptance for Payment and Payment for Units............... 6 Section 3. Procedure for Tendering Units.............................. 6 Valid Tender....................................................... 6 Signature Requirements............................................. 6 Delivery of Assignment of Partnership Interest..................... 7 Appointment as Proxy; Power of Attorney............................ 7 Assignment of Interest in Future Distributions..................... 7 Determination of Validity; Rejection of Units; Waiver of Defects; No Obligation to Give Notice of Defects.............. 8 Backup Federal Income Tax Withholding.............................. 8 FIRPTA Withholding................................................. 8 Binding Obligation................................................. 8 Section 4. Withdrawal Rights.......................................... 8 Section 5. Extension of Tender Period; Termination; Amendment......... 9 Section 6. Certain Federal Income Tax Matters......................... 9 General............................................................ 9 Gain or Loss Generally............................................. 10 Unrealized Receivables and Certain Inventory....................... 10 Passive Activity Loss Limitation................................... 10 Partnership Termination............................................ 11 Backup Withholding and FIRPTA Withholding.......................... 11 Section 7. Effects of the Offer....................................... 12 Limitations on Resales............................................. 12 Effect on Trading Market; Registration Under Section 12(g) of the Exchange Act........................................... 12 Control of Limited Partner Voting Decisions by Purchaser; Effect of Relationship with General Partner................... 12 Section 8. Future Plans of Insignia, IPT and the Purchaser............ 13 Section 9. Certain Information Concerning the Partnership............. 13 General............................................................ 14 Originally Anticipated Term of Partnership; Alternatives........... 14 General Policy Regarding Sales and Refinancings of Partnership Properties.................................................... 14 Selected Financial and Property-Related Data....................... 14 Cash Distributions History......................................... 16 Operating Budgets of the Partnership............................... 17 Section 10. Conflicts of Interest and Transactions with Affiliates.... 18 Conflicts of Interest with Respect to the Offer.................... 18 Voting by the Purchaser............................................ 18 i Financing Arrangements............................................. 18 Transactions with Affiliates....................................... 19 Section 11. Certain Information Concerning the Purchaser, IPLP, IPT and Insignia......................................... 19 The Purchaser...................................................... 19 IPT and IPLP....................................................... 19 Insignia........................................................... 21 Section 12. Source of Funds........................................... 22 Section 13. Background of the Offer................................... 23 Affiliation With the General Partner............................... 23 Previous Tender Offer.............................................. 24 Determination of Purchase Price.................................... 24 Section 14. Conditions of the Offer................................... 29 Section 15. Certain Legal Matters..................................... 30 General............................................................ 30 Antitrust.......................................................... 31 Margin Requirements................................................ 31 Section 16. Fees and Expenses......................................... 31 Section 17. Miscellaneous............................................. 31 SCHEDULE I - Information Regarding the Managers of the Purchaser...... S-1 SCHEDULE II - Information Regarding the Trustees and Executive Officers of IPT.......................................... S-2 SCHEDULE III - Information Regarding the Directors and Executive Officers of Insignia..................................... S-4 SCHEDULE IV - IPT Partnerships......................................... S-7 ii TO THE LIMITED PARTNERS OF CONSOLIDATED CAPITAL PROPERTIES V INTRODUCTION Cooper River Properties, L.L.C. (the "Purchaser"), which is a Delaware limited liability company and an affiliate of the General Partner (as defined below), hereby offers to purchase up to 40,000 of the outstanding units of limited partnership interest ("Units"), representing approximately 22% of the Units outstanding, in Consolidated Capital Properties V, a California limited partnership (the "Partnership"), at a purchase price of $33 per Unit (the "Purchase Price"), net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Assignment of Partnership Interest (which, together with any supplements or amendments, collectively constitute the "Offer"). The Offer is not conditioned on any aggregate minimum number of Units being tendered. A Limited Partner may tender any or all of the Units owned by that Limited Partner; provided, however, that because of restrictions in the Partnership's Limited Partnership Agreement (the "Limited Partnership Agreement"), a partial tender of Units must be for a minimum of twelve Units (other than Limited Partners who are residents of Missouri, who must tender a minimum of twenty Units). Accordingly, any Limited Partner that owns twelve or fewer Units (or, for Missouri residents, twenty or fewer Units) must tender all or none of its Units. Tenders of fractional Units will not be permitted, except by a Limited Partner who is tendering all of the Units owned by that Limited Partner. The Purchaser (which is an affiliate of the General Partner) will pay all charges and expenses of Beacon Hill Partners, Inc., who will serve as the Purchaser's information agent for the Offer (the "Information Agent"), and Harris Trust Company of New York, who will act as depositary for the Offer (the "Depositary"). The Purchaser; Affiliation with the General Partner. ConCap Equities, Inc., which is the general partner of the Partnership (the "General Partner"), is a wholly-owned subsidiary of Insignia Properties Trust, a Maryland real estate investment trust ("IPT"). The Purchaser is a newly-formed, wholly-owned subsidiary of Insignia Properties, L.P., a Delaware limited partnership ("IPLP"), which is the operating partnership of IPT. IPT is the sole general partner of IPLP (owning approximately 66% of the total equity interests in IPLP), and Insignia Financial Group, Inc., a Delaware corporation ("Insignia"), is the sole limited partner of IPLP (owning approximately 34% of the total equity interests in IPLP). Insignia and its affiliates also own approximately 68% of the outstanding common shares of IPT. For more than the past three years, Insignia Residential Group, L.P. ("IRG") and Insignia Commercial Group, Inc. ("ICG"), which are affiliates of the Purchaser and the General Partner, have provided property management services to the Partnership, and Insignia (directly or through affiliates) has performed asset management, partnership administration and investor relations services for the Partnership. By reason of these relationships, the General Partner has conflicts of interest in considering the Offer. The General Partner has indicated in a Statement on Schedule 14D-9 (the "Schedule 14D-9") filed with the Securities and Exchange Commission (the "Commission") that it is remaining neutral and making no recommendation as to whether Limited Partners should tender their Units in response to the Offer. LIMITED PARTNERS ARE URGED TO READ THIS OFFER TO PURCHASE AND THE RELATED MATERIALS AND THE SCHEDULE 14D-9 CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS. See Sections 10 and 13. Some Factors to Be Considered by Limited Partners. In considering the Offer, Limited Partners may wish to consider the following factors: Potential Adverse Aspects of the Offer for Limited Partners o The Purchaser and the General Partner are affiliates of and controlled by IPT, which is controlled by Insignia. The General Partner has conflicts of interest in considering the Offer, including (i) as a result of the fact that a sale or liquidation of the Partnership's assets would result in a decrease or elimination of the fees paid to the General Partner and/or its affiliates and (ii) the fact that as a consequence of the Purchaser's ownership of Units, the Purchaser (which is an affiliate of the General Partner) may have incentives to seek to maximize the value of its ownership of Units, which in turn may result in a conflict for the General Partner in attempting to reconcile the interests of the Purchaser (which is an affiliate of the General Partner) with the interests of the other Limited Partners. See Section 10. o The net asset value per Unit most recently estimated by the General Partner was $49 as of June 30, 1998, and the net liquidation value per Unit (the "Estimated Liquidation Value") estimated by the Purchaser (which is an affiliate of the General Partner) in connection with the Offer is $48.77. See Section 13 for a discussion of why the Purchaser (which is an affiliate of the General Partner) believes that such estimates are not necessarily indicative of the fair market value of a Unit. THE PURCHASER (WHICH IS AN AFFILIATE OF THE GENERAL PARTNER) MAKES NO REPRESENTATION AND EXPRESSES NO OPINION AS TO THE FAIRNESS OR ADEQUACY OF THE PURCHASE PRICE. o As with any rational investment decision, the Purchaser (which is an affiliate of the General Partner) is making the Offer with a view to making a profit. Accordingly, there is a conflict between the desire of the Purchaser (which is an affiliate of the General Partner) to purchase Units at a low price and the desire of the Limited Partners to sell their Units at a high price. o If the Purchaser is successful in acquiring a significant number of Units pursuant to the Offer, the Purchaser (which is an affiliate of the General Partner) will have the right to vote those Units and thereby significantly influence all voting decisions with respect to the Partnership, including decisions concerning liquidation, amendments to the Limited Partnership Agreement, removal and replacement of the General Partner and mergers, consolidations and other extraordinary transactions. Because IPT already owns (through IPLP) approximately 26% of the outstanding Units, however, it will be able to significantly influence the outcome of all voting decisions with respect to the Partnership regardless of the number of Units the Purchaser acquires pursuant to the Offer. This means that (i) non-tendering Limited Partners could be prevented from taking action they desire but that IPT (which is an affiliate of the General Partner) opposes and (ii) IPT (which is an affiliate of the General Partner) may be able to take action desired by IPT but opposed by the non-tendering Limited Partners. Potentially Beneficial Aspects of the Offer for Limited Partners o Although there are some limited resale mechanisms available to Limited Partners wishing to sell their Units, there is no formal trading market for Units. At present, Limited Partners may seek to negotiate private sales or sales through a trading system such as the American Partnership Board, which publishes sell offers by Limited Partners in respect of Units. Accordingly, THE OFFER AFFORDS LIMITED PARTNERS AN OPPORTUNITY TO DISPOSE OF THEIR UNITS FOR CASH WHICH OTHERWISE MIGHT NOT BE AVAILABLE TO THEM. o THE OFFER MAY BE ATTRACTIVE TO LIMITED PARTNERS WHO HAVE AN IMMEDIATE NEED FOR CASH. Although the Purchase Price is approximately 40% less than the highest reported secondary market sales price of any Unit during the past six months (based on published information and information provided by the General Partner), the General Partner has information that indicates the highest reported sales price represented a single, isolated transaction for a minimal number of Units and such sales price was materially higher than the range of sales prices for all other transactions during the six-month period. The Purchase Price is approximately 3% greater than the highest reported sales price for other transactions during the six-month period. See Section 13. In addition, reported secondary market sales prices do not take into account commissions and transfer fees typically payable by a Limited Partner in connection with a secondary market sale. Therefore, the actual proceeds received by a Limited Partner who sells Units in the secondary market are typically significantly less than the reported sales prices. o LIMITED PARTNERS WHO SELL UNITS PURSUANT TO THE OFFER WILL NOT BE CHARGED ANY SALES COMMISSIONS (WHICH GENERALLY RANGE FROM 3% TO 10% OF THE SALES PRICE) OR PARTNERSHIP TRANSFER FEES (WHICH ARE TYPICALLY $100 PER TRANSFER). The Purchaser will pay all transfer fees imposed by the Partnership in connection with sales of Units pursuant to the Offer. 2 o Real estate markets in the United States generally have recovered and experienced an upward trend since the end of the last recession. That recovery and upward trend might continue. On the other hand, real estate markets also may be adversely affected by a variety of factors, including possible fluctuations in interest rates, economic slowdowns and overbuilding. Accordingly, ownership of Units continues to be a speculative investment. THE OFFER MAY PROVIDE LIMITED PARTNERS WITH THE OPPORTUNITY TO LIQUIDATE THEIR INTERESTS IN THE PARTNERSHIP AND REPLACE THEM WITH INVESTMENTS THAT ARE LESS SPECULATIVE. o The Offer may be attractive to Limited Partners who wish to avoid in the future the expenses, delays and complications in filing personal income tax returns which may be caused by ownership of Units. In addition, A LIMITED PARTNER WHO SELLS 100% OF ITS UNITS PURSUANT TO THE OFFER WILL NO LONGER BE SUBJECT TO THE PASSIVE ACTIVITY LOSS LIMITATION WITH RESPECT TO "SUSPENDED" LOSSES ATTRIBUTABLE TO THOSE UNITS AND, THEREFORE, WILL BE ABLE TO UTILIZE FULLY ANY SUCH LOSSES. o The Offer may be attractive to those Limited Partners who have become disenchanted with real estate investments generally, and in particular with the perceived illiquidity of investments made through limited partnerships, because it may afford an immediate opportunity for those Limited Partners to liquidate their investments in the Partnership. On the other hand, Limited Partners who tender their Units will be giving up the opportunity to participate in any potential future benefits represented by the ownership of those Units, including, for example, the right to participate in any future distributions of cash or property, whether from operations, the proceeds of a sale or refinancing of one or more of the Partnership's properties or in connection with any future liquidation of the Partnership. Instead, any such distributions of cash or property with respect to Units tendered in the Offer and purchased by the Purchaser will be paid to the Purchaser. The Purchaser (which is an affiliate of the General Partner) makes no recommendation to any Limited Partner as to whether to tender or refrain from tendering Units and has been advised by the General Partner that the General Partner also expects to make no recommendation. Each Limited Partner must make its own decision, based on the Limited Partner's particular circumstances, as to whether to tender Units and, if so, how many Units to tender. Limited Partners should consult with their respective advisors regarding the financial, tax, legal and other implications of accepting the Offer. LIMITED PARTNERS ARE URGED TO READ THIS OFFER TO PURCHASE AND THE RELATED MATERIALS CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS. Reasons for and Effects of the Offer. The Purchaser's purpose in making the Offer is to increase IPT's equity interest in the Partnership, primarily for investment purposes and with a view to making a profit. Although the number of Units sought in the Offer will not give the Purchaser (which is an affiliate of the General Partner) absolute control over the Partnership, if the Purchaser is successful in acquiring all or a substantial portion of the Units it is tendering for, it will be in a position to exercise significant influence over the outcome of any vote by Limited Partners. Because IPT already owns (through IPLP) approximately 26% of the outstanding Units, however, it will be able to significantly influence the outcome of all voting decisions with respect to the Partnership regardless of the number of Units the Purchaser acquires pursuant to the Offer. See Sections 8, 10 and 13. Certain Tax Considerations. A sale by a Limited Partner pursuant to the Offer will result in taxable gain (or loss) equal to the excess (deficit) of the amount realized by the Limited Partner for the Units sold over (under) such Limited Partner's adjusted tax basis in those Units. In the case of a Limited Partner who is an individual and who has held Units since their issuance by the Partnership, the sale is expected to result in a gain, which may be taxable as ordinary income, capital gain or gain from real estate depreciation recapture. If a Limited Partner has suspended "passive losses" from the Partnership or other passive activity investments, such Limited Partner generally may deduct these losses up to the amount of any gain from the sale. A sale pursuant to the Offer of all of a Limited Partner's Units will terminate his or her investment in the Partnership and, commencing with the year following the year of sale, the Limited Partner will no longer receive Partnership tax information or have to report the complicated tax information currently required of Limited Partners. See Section 6. 3 Originally Anticipated Term of the Partnership; General Policy Regarding Sales and Refinancings of Partnership Properties; Alternatives. According to the Partnership's Prospectus dated December 15, 1983, the then general partners (predecessors to the current General Partner) anticipated that the Partnership would sell and/or refinance its properties three to seven years after their acquisition, depending upon the then current real estate and money markets, economic climate and income tax consequences to the Limited Partners. In general, the General Partner regularly evaluates the Partnership's properties by considering various factors, such as the Partnership's financial position and real estate and capital markets conditions. The General Partner monitors each property's specific locale and sub-market conditions evaluating current trends, competition, new construction and economic changes. The General Partner oversees each asset's operating performance and continuously evaluates the physical improvement requirements. In addition, the financing structure for each property, tax implications and the investment climate are all considered. Any of these factors, and possibly others, could potentially contribute to any decision by the General Partner to sell, refinance, upgrade with capital improvements or hold a particular Partnership property. Based on the above considerations, the General Partner has determined that it is not in the best interest of Limited Partners to sell or refinance any of the Partnership's properties at the present time. Under the Limited Partnership Agreement the term of the Partnership will continue until December 31, 2013, unless sooner terminated as provided in the Limited Partnership Agreement or by law. Limited Partners could, as an alternative to tendering their Units, take a variety of possible actions, including voting to liquidate the Partnership or causing the Partnership to merge with another entity or engage in a "roll-up" or similar transaction. Conditions. The Offer is not conditioned on any aggregate minimum number of Units being tendered. Certain other conditions do apply, however. See Section 14. Distributions. The last distribution made by the Partnership was in 1990 ($25.00 per Unit). In total, original investors in the Partnership have received distributions of only $55.37 in respect of their original $250 investment made in 1983. See Section 9. However, the Partnership is currently generating positive cash flow from operations, and the Purchaser (which is an affiliate of the General Partner) believes that the Partnership will continue to generate positive cash flow from operations, depending upon the real estate, capital markets and general economic conditions at the time. Although the Limited Partnership Agreement requires that the General Partner maintain minimum working capital reserves, and the General Partner has advised the Purchaser (which is an affiliate of the General Partner) that no cash distributions to Limited Partners are expected in the near term in order to satisfy such reserve requirement, the potential for future distributions was considered by the Purchaser (which is an affiliate of the General Partner) when establishing the Purchase Price. Limited Partners who tender their Units in response to the Offer will retain any distributions made through July 30, 1998, and will be entitled to receive and retain any subsequent distributions made by the Partnership prior to the date on which the Purchaser pays for tendered Units pursuant to the Offer, although any such subsequent distribution will result in a reduction of the Purchase Price. See Section 1. However, tendering Limited Partners will not be entitled to receive or retain any distributions in respect of tendered Units which are made on or after the date on which the Purchaser pays for such Units pursuant to the Offer, regardless of the fact that the record date (as opposed to the payment date) for any such distribution may be a date prior to the date of purchase. See Section 3. Outstanding Units. According to information supplied by the Partnership, as of July 1, 1998 there were 179,537 Units issued and outstanding, which were held of record by 3,897 Limited Partners. IPLP currently owns 46,632 (representing approximately 26%) of the outstanding Units. 4 THE OFFER SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE; PRORATION. Upon the terms and subject to the conditions of the Offer, the Purchaser (which is an affiliate of the General Partner) will accept for payment (and thereby purchase) up to 40,000 Units that are validly tendered on or prior to the Expiration Date and not withdrawn in accordance with the procedures set forth in Section 4. For purposes of the Offer, the term "Expiration Date" shall mean 12:00 midnight, New York City time, on August 26, 1998, unless the Purchaser (which is an affiliate of the General Partner) in its sole discretion shall have extended the period of time for which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date on which the Offer, as extended by the Purchaser, shall expire. See Section 5 for a description of the Purchaser's right to extend the period of time during which the Offer is open and to amend or terminate the Offer. THE PURCHASE PRICE WILL AUTOMATICALLY BE REDUCED BY THE AGGREGATE AMOUNT OF DISTRIBUTIONS PER UNIT, IF ANY, MADE BY THE PARTNERSHIP TO LIMITED PARTNERS ON OR AFTER JULY 30, 1998 AND PRIOR TO THE DATE ON WHICH THE PURCHASER PAYS FOR UNITS PURCHASED PURSUANT TO THE OFFER. If, prior to the Expiration Date, the Purchaser (which is an affiliate of the General Partner) increases the consideration offered to Limited Partners pursuant to the Offer, the increased consideration will be paid for all Units accepted for payment pursuant to the Offer, regardless of whether the Units were tendered prior to the increase in the consideration offered. If more than 40,000 Units are validly tendered prior to the Expiration Date and not properly withdrawn prior to the Expiration Date in accordance with the procedures specified in Section 4, the Purchaser (which is an affiliate of the General Partner) will, upon the terms and subject to the conditions of the Offer, accept for payment and pay for an aggregate of 40,000 of the Units so tendered, pro rata according to the number of Units validly tendered by each Limited Partner and not properly withdrawn on or prior to the Expiration Date, with appropriate adjustments to avoid (i) purchases of fractional Units and (ii) purchases that would violate Section 5.01 of the Limited Partnership Agreement (which generally requires that a Limited Partner transfer a minimum of twelve Units (other than Limited Partners who are residents of Missouri, who must tender a minimum of twenty Units)). If the number of Units validly tendered and not properly withdrawn on or prior to the Expiration Date is less than or equal to 40,000 Units, the Purchaser (which is an affiliate of the General Partner) will purchase all Units so tendered and not withdrawn, upon the terms and subject to the conditions of the Offer. If proration of tendered Units is required, then, subject to the Purchaser's obligation under Rule 14e-1(c) under the Securities Exchange Act of 1934 (the "Exchange Act") to pay Limited Partners the Purchase Price in respect of Units tendered or return those Units promptly after the termination or withdrawal of the Offer, the Purchaser (which is an affiliate of the General Partner) does not intend to pay for any Units accepted for payment pursuant to the Offer until the final proration results are known. NOTWITHSTANDING ANY SUCH DELAY IN PAYMENT, NO INTEREST WILL BE PAID ON THE PURCHASE PRICE. The Offer is conditioned on satisfaction of certain conditions. See Section 14, which sets forth in full the conditions of the Offer. The Purchaser (which is an affiliate of the General Partner) reserves the right (but in no event shall be obligated), in its sole discretion, to waive any or all of those conditions. If, on or prior to the Expiration Date, any or all of the conditions have not been satisfied or waived, the Purchaser reserves the right to (i) decline to purchase any of the Units tendered and terminate the Offer, (ii) waive all of the unsatisfied conditions and, subject to complying with applicable rules and regulations of the Commission, purchase all Units validly tendered, (iii) extend the Offer and, subject to the right of Limited Partners to withdraw Units until the Expiration Date, retain the Units that have been tendered during the period or periods for which the Offer is extended, and/or (iv) amend the Offer. This Offer to Purchase and the related Assignment of Partnership Interest are being mailed by the Purchaser (which is an affiliate of the General Partner) to the persons shown by the Partnership's records to have been Limited Partners or (in the case of Units owned of record by Individual Retirement Accounts ("IRAs") and qualified plans) beneficial owners of Units as of July 1, 1998. 5 SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS. Upon the terms and subject to the conditions of the Offer, the Purchaser (which is an affiliate of the General Partner) will accept for payment (and thereby purchase) and will pay for all Units validly tendered and not withdrawn in accordance with the procedures specified in Section 4, as promptly as practicable following the Expiration Date. A tendering beneficial owner of Units whose Units are held of record in an IRA or other qualified plan will not receive direct payment of the Purchase Price; rather, payment will be made to the custodian of such account or plan. In all cases, payment for Units purchased pursuant to the Offer will be made only after timely receipt by the Depositary of a properly completed and duly executed Assignment of Partnership Interest and any other documents required by the Assignment of Partnership Interest. See Section 3. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE BY REASON OF ANY DELAY IN MAKING SUCH PAYMENT. For purposes of the Offer, the Purchaser (which is an affiliate of the General Partner) will be deemed to have accepted for payment pursuant to the Offer, and thereby purchased, validly tendered Units if, as and when the Purchaser (which is an affiliate of the General Partner) gives verbal or written notice to the Depositary of the Purchaser's acceptance of those Units for payment pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Units accepted for payment pursuant to the Offer will be made by deposit of the Purchase Price with the Depositary, which will act as agent for tendering Limited Partners for the purpose of receiving payments from the Purchaser and transmitting those payments to Limited Partners whose Units have been accepted for payment. If any tendered Units are not purchased for any reason, the Assignment of Partnership Interest with respect to such Units will be destroyed by the Purchaser (which is an affiliate of the General Partner). If for any reason acceptance for payment of, or payment for, any Units tendered pursuant to the Offer is delayed or the Purchaser is unable to accept for payment, purchase or pay for Units tendered pursuant to the Offer, then, without prejudice to the Purchaser's rights under Section 14, the Depositary may, nevertheless, on behalf of the Purchaser (which is an affiliate of the General Partner) retain tendered Units, and those Units may not be withdrawn except to the extent that the tendering Limited Partners are entitled to withdrawal rights as described in Section 4; subject, however, to the Purchaser's obligation under Rule 14e-1(c) under the Exchange Act to pay Limited Partners the Purchase Price in respect of Units tendered or return those Units promptly after termination or withdrawal of the Offer. The Purchaser (which is an affiliate of the General Partner) reserves the right to transfer or assign, in whole or from time to time in part, to one or more of the Purchaser's affiliates, the right to purchase Units tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Purchaser of its obligations under the Offer or prejudice the rights of tendering Limited Partners to receive payment for Units validly tendered and accepted for payment pursuant to the Offer. SECTION 3. PROCEDURE FOR TENDERING UNITS. Valid Tender. In order for a tendering Limited Partner to participate in the Offer, its Units must be validly tendered and not withdrawn on or prior to the Expiration Date. To validly tender Units, a properly completed and duly executed Assignment of Partnership Interest and any other documents required by the Assignment of Partnership Interest must be received by the Depositary, at its address set forth on the back cover of this Offer to Purchase, on or prior to the Expiration Date. A Limited Partner may tender any or all of the Units owned by that Limited Partner; provided, however, that because of restrictions in the Limited Partnership Agreement, a partial tender of Units must be for a minimum of twelve Units (other than Limited Partners who are residents of Missouri, who must tender a minimum of twenty Units). Accordingly, any Limited Partner that owns twelve or fewer Units (or, for residents of Missouri, twenty or fewer Units) must tender all or none of its Units. Tenders of fractional Units will not be permitted, except by a Limited Partner who is tendering all of the Units owned by that Limited Partner. No alternative, conditional or contingent tenders will be accepted. Signature Requirements. If the Assignment of Partnership Interest is signed by the registered holder of the Units and payment is to be made directly to that holder, then no signature guarantee is required on the Assignment of Partnership Interest. Similarly, if the Units are tendered for the account of a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial 6 bank, savings bank, credit union, savings and loan association or trust company having an office, branch or agency in the United States (each an "Eligible Institution"), no signature guarantee is required on the Assignment of Partnership Interest. HOWEVER, IN ALL OTHER CASES, ALL SIGNATURES ON THE ASSIGNMENT OF PARTNERSHIP INTEREST MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. Please contact the Information Agent for assistance in obtaining a signature guarantee. Delivery of Assignment of Partnership Interest. The method of delivery of the Assignment of Partnership Interest and all other required documents is at the option and risk of the tendering Limited Partner, and delivery will be deemed made only when actually received by the Depositary. In all cases, sufficient time should be allowed to assure timely delivery. Appointment as Proxy; Power of Attorney. By executing an Assignment of Partnership Interest, a tendering Limited Partner irrevocably appoints the Purchaser (which is an affiliate of the General Partner), and its managers and designees as the Limited Partner's proxies, in the manner set forth in the Assignment of Partnership Interest, each with full power of substitution, to the full extent of the Limited Partner's rights with respect to the Units tendered by the Limited Partner and accepted for payment by the Purchaser (which is an affiliate of the General Partner). Each such proxy shall be considered coupled with an interest in the tendered Units. Such appointment will be effective when, and only to the extent that, the Purchaser (which is an affiliate of the General Partner) accepts the tendered Units for payment. Upon such acceptance for payment, all prior proxies given by the Limited Partner with respect to the Units will, without further action, be revoked, and no subsequent proxies may be given (and if given will not be effective). The Purchaser (which is an affiliate of the General Partner) and its managers and designees will, as to those Units, be empowered to exercise all voting and other rights of the Limited Partner as they in their sole discretion may deem proper at any meeting of Limited Partners, by written consent or otherwise. The Purchaser (which is an affiliate of the General Partner) reserves the right to require that, in order for Units to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of the Units, the Purchaser must be able to exercise full voting rights with respect to the Units, including voting at any meeting of Limited Partners then scheduled or acting by written consent without a meeting. By executing an Assignment of Partnership Interest, a tendering Limited Partner also irrevocably constitutes and appoints the Purchaser and its managers and designees as the Limited Partner's attorneys-in-fact, each with full power of substitution, to the full extent of the Limited Partner's rights with respect to the Units tendered by the Limited Partner and accepted for payment by the Purchaser. Such appointment will be effective when, and only to the extent that, the Purchaser accepts the tendered Units for payment. The tendering Limited Partner agrees not to exercise any rights pertaining to the tendered Units without the prior consent of the Purchaser. Upon such acceptance for payment, all prior powers of attorney granted by the Limited Partner with respect to such Units will, without further action, be revoked, and no subsequent powers of attorney may be granted (and if granted will not be effective). Pursuant to such appointment as attorneys-in-fact, the Purchaser and its managers and designees each will have the power, among other things, (i) to transfer ownership of such Units on the Partnership books maintained by the General Partner (and execute and deliver any accompanying evidences of transfer and authenticity any of them may deem necessary or appropriate in connection therewith), (ii) upon receipt by the Depositary (as the tendering Limited Partner's agent) of the Purchase Price, to become a substituted Limited Partner, to receive any and all distributions made by the Partnership on or after the date on which the Purchaser purchases such Units, and to receive all benefits and otherwise exercise all rights of beneficial ownership of such Units in accordance with the terms of the Offer, (iii) to execute and deliver to the General Partner a change of address form instructing the General Partner to send any and all future distributions to which the Purchaser is entitled pursuant to the terms of the Offer in respect of tendered Units to the address specified in such form, and (iv) to endorse any check payable to or upon the order of such Limited Partner representing a distribution to which the Purchaser is entitled pursuant to the terms of the Offer, in each case in the name and on behalf of the tendering Limited Partner. Assignment of Interest in Future Distributions. By executing an Assignment of Partnership Interest, a tendering Limited Partner irrevocably assigns to the Purchaser (which is an affiliate of the General Partner) and its assigns all of the right, title and interest of the Limited Partner in and to any and all distributions made by the Partnership on or after the date on which the Purchaser purchases such Units, in respect of the Units tendered by such Limited Partner and accepted for payment by the Purchaser, regardless of the fact that the record date for any 7 such distribution may be a date prior to the date of such purchase. The Purchaser will seek to be admitted to the Partnership as a substituted Limited Partner upon consummation of the Offer. Determination of Validity; Rejection of Units; Waiver of Defects; No Obligation to Give Notice of Defects. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Units pursuant to the Offer will be determined by the Purchaser (which is an affiliate of the General Partner), in its sole discretion, which determination shall be final and binding. The Purchaser (which is an affiliate of the General Partner) reserves the absolute right to reject any or all tenders of any particular Units determined by it not to be in proper form or if the acceptance of or payment for those Units may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser (which is an affiliate of the General Partner) also reserves the absolute right to waive or amend any of the conditions of the Offer that it is legally permitted to waive as to the tender of any particular Units and to waive any defect or irregularity in any tender with respect to any particular Units of any particular Limited Partner. The Purchaser's interpretation of the terms and conditions of the Offer (including the Assignment of Partnership Interest and the Instructions thereto) will be final and binding. No tender of Units will be deemed to have been validly made until all defects and irregularities have been cured or waived. None of the Purchaser (which is an affiliate of the General Partner), the Information Agent, the Depositary or any other person will be under any duty to give notification of any defects or irregularities in the tender of any Units or will incur any liability for failure to give any such notification. Backup Federal Income Tax Withholding. To prevent the possible application of backup federal income tax withholding of 31% with respect to payment of the Purchase Price, each tendering Limited Partner must provide the Purchaser (which is an affiliate of the General Partner) with the Limited Partner's correct taxpayer identification number by completing the Substitute Form W-9 included in the Assignment of Partnership Interest. See the Instructions to the Assignment of Partnership Interest and Section 6. FIRPTA Withholding. To prevent the withholding of federal income tax in an amount equal to 10% of the amount of the Purchase Price plus Partnership liabilities allocable to each Unit purchased, each tendering Limited Partner must complete the FIRPTA Affidavit included in the Assignment of Partnership Interest certifying the Limited Partner's taxpayer identification number and address and that such Limited Partner is not a foreign person. See the Instructions to the Assignment of Partnership Interest and Section 6. Binding Obligation. A tender of Units pursuant to and in accordance with the procedures described in this Section 3 and the acceptance for payment of such Units will constitute a binding agreement between the tendering Limited Partner and the Purchaser (which is an affiliate of the General Partner) on the terms set forth in this Offer to Purchase and in the Assignment of Partnership Interest. SECTION 4. WITHDRAWAL RIGHTS. Tenders of Units pursuant to the Offer are irrevocable, except that Units tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless already accepted for payment as provided in this Offer to Purchase, may also be withdrawn at any time after September 28, 1998. For withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at its address set forth on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Units to be withdrawn and must be signed by the person(s) who signed the Assignment of Partnership Interest in the same manner as the Assignment of Partnership Interest was signed (including signature guarantees by an Eligible Institution). Units properly withdrawn will be deemed not to be validly tendered for purposes of the Offer. Withdrawn Units may be re-tendered, however, by following the procedures described in Section 3 at any time prior to the Expiration Date. If payment for Units is delayed for any reason or if the Purchaser (which is an affiliate of the General Partner) is unable to pay for Units for any reason, then, without prejudice to the Purchaser's rights under the Offer, tendered Units may be retained by the Depositary and may not be withdrawn except to the extent that tendering Limited Partners are entitled to withdrawal rights as set forth in this Section 4; subject, however, to the Purchaser's obligation, pursuant to Rule 14e-1(c) under the Exchange Act, to pay Limited Partners the Purchase Price in respect of Units tendered or return those Units promptly after termination or withdrawal of the Offer. 8 All questions as to the validity and form (including time of receipt) of notices of withdrawal will be determined by the Purchaser (which is an affiliate of the General Partner), in its sole discretion, which determination shall be final and binding. None of the Purchaser, the Information Agent, the Depositary or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT. The Purchaser (which is an affiliate of the General Partner) expressly reserves the right, in its sole discretion, at any time and from time to time, (i) to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and the payment for, validly tendered Units, (ii) to terminate the Offer if any condition referred to in Section 14 has not been satisfied or upon the occurrence of any event specified in Section 14 and (iii) to amend the Offer in any respect (including, without limitation, by increasing the consideration offered, increasing or decreasing the number of Units being sought, or both). Notice of any such extension, termination or amendment will be disseminated promptly to Limited Partners in a manner reasonably designed to inform Limited Partners of such change in compliance with Rule 14d-4(c) under the Exchange Act. In the case of an extension of the Offer, the extension will be followed by a press release or public announcement which will be issued no later than 9:00 a.m., New York City time, on the next business day after the then scheduled Expiration Date, in accordance with Rule 14e-1(d) under the Exchange Act. If the Purchaser (which is an affiliate of the General Partner) extends the Offer, or if the Purchaser (whether before or after its acceptance for payment of Units) is delayed in its payment for Units or is unable to pay for Units pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may retain tendered Units and those Units may not be withdrawn except to the extent tendering Limited Partners are entitled to withdrawal rights as described in Section 4; subject, however, to the Purchaser's obligation, pursuant to Rule 14e-1(c) under the Exchange Act, to pay Limited Partners the Purchase Price in respect of Units tendered or return those Units promptly after termination or withdrawal of the Offer. If the Purchaser (which is an affiliate of the General Partner) makes a material change in the terms of the Offer or the information concerning the Offer or waives a material condition of the Offer, the Purchaser will extend the Offer and disseminate additional tender offer materials to the extent required by Rules 14d-4(c) and 14d-6(d) under the Exchange Act. The minimum period during which an offer must remain open following a material change in the terms of the offer or information concerning the offer will depend upon the facts and circumstances, including the relative materiality of the change in the terms or information. In the Commission's view, an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to securityholders, and if material changes are made with respect to information that approaches the significance of price or the percentage of securities sought, a minimum of ten business days may be required to allow for adequate dissemination to securityholders and investor response. As used in this Offer to Purchase, "business day" means any day other than a Saturday, Sunday or a federal holiday, and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. SECTION 6. CERTAIN FEDERAL INCOME TAX MATTERS. General. The following summary is a general discussion of certain of the federal income tax consequences of a sale of Units pursuant to the Offer. This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable Treasury regulations thereunder, administrative rulings, practice and procedures and judicial authority, all as of the date of the Offer. All of the foregoing are subject to change, and any such change could affect the continuing accuracy of this summary. This summary does not discuss all aspects of federal income taxation that may be relevant to a particular Limited Partner in light of such Limited Partner's specific circumstances or to certain types of Limited Partners subject to special treatment under the federal income tax laws (for example, foreign persons, dealers in securities, banks, insurance companies and tax-exempt organizations), nor (except as otherwise expressly indicated) does it describe any aspect of state, local, foreign or other tax laws. Sales of Units pursuant to the Offer will be taxable transactions for federal income tax purposes, and also may be taxable transactions under applicable state, local, foreign and other tax laws. EACH LIMITED PARTNER SHOULD CONSULT ITS 9 OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO SUCH LIMITED PARTNER OF SELLING UNITS PURSUANT TO THE OFFER. Gain or Loss Generally. In general, a Limited Partner will recognize gain or loss on a sale of Units pursuant to the Offer equal to the difference between (i) the Limited Partner's "amount realized" on the sale and (ii) the Limited Partner's adjusted tax basis in the Units sold. Generally, a Limited Partner's adjusted tax basis with respect to a Unit equals its cost, increased by the amount of income and the amount of Partnership liabilities (as determined under Code Section 752) allocated to the Unit, and decreased by (i) any distributions made with respect to such Unit, (ii) the amount of deductions or losses allocated to the Unit and (iii) any decrease in the amount of Partnership liabilities (as determined under Code Section 752) allocated to the Unit. Thus, the amount of a Limited Partner's adjusted tax basis in tendered Units will vary depending upon the Limited Partner's particular circumstances. The "amount realized" with respect to a Unit will be a sum equal to the amount of cash received by the Limited Partner for the Unit pursuant to the Offer, plus the amount of the Partnership's liabilities allocable to the Unit (as determined under Code Section 752). A portion of the gain or loss recognized by a Limited Partner on a sale of a Unit pursuant to the Offer generally will be treated as a capital gain or loss, if (as is generally expected to be the case) the Unit was held by the Limited Partner as a capital asset. Under the IRS Restructuring and Reform Act of 1998, the capital gains rate for individuals and other non-corporate taxpayers is 20% for sales of capital assets held for more than one year. However, any gain from the sale of such assets attributable to the recapture of depreciation with respect to real property (other than certain depreciation recapture taxable as ordinary income) is taxed at a maximum rate of 25%. Corporate taxpayers are taxed at a maximum marginal rate of 35% for both capital gains and ordinary income. The maximum marginal federal income tax rate for ordinary income of individuals and other noncorporate taxpayers is 39.6%. Capital losses are deductible only to the extent of capital gains, except that, subject to the passive activity loss limitations discussed below, non-corporate taxpayers may deduct up to $3,000 of capital losses in excess of the amount of their capital gains against ordinary income. Excess capital losses generally can be carried forward to succeeding years (a corporation's carryforward period is five years and a non-corporate taxpayer can carry forward such losses indefinitely); and a corporation is permitted to carry back excess capital losses to the three preceding taxable years, provided the carryback does not increase or produce a net operating loss for any of those years. Limited Partners who purchased their interests from the Partnership in the original issuance of the Units are expected to recognize taxable gain on the sale in an amount in excess of the Purchase Price. A tendering Limited Partner will be allocated a pro rata share of the Partnership's taxable income or loss for the year of sale with respect to the Units sold in accordance with the provisions of the Limited Partnership Agreement concerning transfers of Units. Such allocation and any cash distributed by the Partnership to the Limited Partner for that year will affect the Limited Partner's adjusted tax basis in Units and, therefore, the amount of such Limited Partner's taxable gain or loss upon a sale of Units pursuant to the Offer. Unrealized Receivables and Certain Inventory. If any portion of the amount of gain realized by a Limited Partner is attributable to "unrealized receivables" (which includes certain depreciation recapture) or "substantially appreciated inventory" as defined in Code Section 751, then a portion of the Limited Partner's gain may be ordinary rather than capital and, in addition, a portion of such gain may be taxed at the 25% rate discussed above. A portion of the gain upon the sale of Units may be attributable to unrealized receivables. A Limited Partner who tenders Units which are purchased pursuant to the Offer must file an information statement with such Limited Partner's federal income tax return for the year of the sale which provides the information specified in Treasury Regulation ss. 1.751-1(a)(3). A selling Limited Partner also must notify the Partnership of the date of the transfer and the names, addresses and tax identification numbers of the transferor(s) and transferee within 30 days of the date of the transfer (or, if earlier, by January 15 of the following calendar year). Passive Activity Loss Limitation. Under Code Section 469, a non-corporate taxpayer or personal service corporation generally can deduct "passive losses" in any year only to the extent of the person's passive income for that year. Closely held corporations (other than personal service corporations) may offset such losses against active income as well as passive activity income for that year. A substantial portion of any post-1986 losses of Limited Partners from the Partnership may have been passive losses. Thus, Limited Partners may have "suspended" passive 10 losses from the Partnership (i.e., post-1986 net taxable losses in excess of statutorily permitted "phase-in" amounts which have not been used to offset income from other passive activities or from the Partnership). Substantially all gain from a sale of Units pursuant to the Offer will be passive income. If a Limited Partner sells less than all of its Units pursuant to the Offer, suspended passive losses, if any, can be currently deducted (subject to other applicable limitations) to the extent of the Limited Partner's passive income from the Partnership for that year (including any gain recognized on the sale of Units) plus any other passive income for that year. If, on the other hand, a Limited Partner sells 100% of its Units pursuant to the Offer, any "suspended" losses will be offset first against any other net passive gain to the Limited Partner from the sale of the Units and any other net passive activity income from other passive activity investments, and the balance of any "suspended" net losses from the Units will no longer be subject to the passive activity loss limitation and, therefore, will be deductible by such Limited Partner from its other income (subject to any other applicable limitations), including ordinary income. If a tendering Limited Partner has suspended passive losses from the Partnership, such Limited Partner must sell all of its Units to receive these tax benefits. If more than 40,000 of the outstanding Units are tendered, some tendering Limited Partners may not be able to sell 100% of their Units pursuant to the Offer because of proration of the number of Units to be purchased by the Purchaser. See Section 1. Partnership Termination. Section 708(b) of the Code provides that a partnership terminates for income tax purposes if there is a sale or exchange of 50% or more of the total interest in partnership capital and profits within a twelve-month period (although successive transfers of the same interest within a twelve-month period will be treated as a single transfer for this purpose). In the event of a termination, the Partnership's tax year would close and the Partnership would be treated for income tax purposes as if it had contributed all of its assets and liabilities to a "new" partnership in exchange for an interest in the "new" partnership. The Partnership would then be treated as making a distribution of the interests in the "new" partnership to the new partners and the remaining partners, followed by the liquidation of the Partnership. Because the "new" partnership would be treated as having acquired its assets on the date of the deemed contribution, a new depreciation recovery period would begin on such date, the Partnership's annual depreciation deductions over the next few years would be substantially reduced, and the Partnership would have greater taxable income (or less tax loss) than if no tax termination occurred. In addition, depreciation may be required to be allocated to those Limited Partners that have a higher tax basis. A tax termination of the Partnership would also terminate any partnership in which the Partnership holds a majority interest (50% or more). The Limited Partnership Agreement prohibits transfers of Units if a transfer, when considered with all other transfers during the same applicable twelve-month period, would cause a termination of the Partnership for tax purposes. The Purchaser believes that even if the maximum number of Units is purchased pursuant to the Offer, those transfers will not cause a tax termination of the Partnership. Backup Withholding and FIRPTA Withholding. Limited Partners (other than tax-exempt persons, corporations and certain foreign individuals) who tender Units may be subject to 31% backup withholding unless those Limited Partners provide a taxpayer identification number ("TIN") and certify that the TIN is correct or properly certify that they are awaiting a TIN. A Limited Partner may avoid backup withholding by properly completing and signing the Substitute Form W-9 included as part of the Assignment of Partnership Interest. If a Limited Partner who is subject to backup withholding does not properly complete and sign the Substitute Form W-9, the Purchaser will withhold 31% from payments to such Limited Partner. Gain realized by a foreign Limited Partner on the sale of a Unit pursuant to the Offer will be subject to federal income tax. Under Code Section 1445, the transferee of an interest held by a foreign person in a partnership which owns United States real property generally is required to deduct and withhold a tax equal to 10% of the amount realized on the disposition. In order to comply with this requirement, the Purchaser will withhold 10% of the amount realized by a tendering Limited Partner unless the Limited Partner properly completes and signs the FIRPTA Affidavit included as part of the Assignment of Partnership Interest certifying the Limited Partner's TIN and address, and that such Limited Partner is not a foreign person. Amounts withheld would be creditable against a foreign Limited Partner's federal income tax liability and, if in excess thereof, a refund could be obtained from the Internal Revenue Service by filing a U.S. income tax return. 11 SECTION 7. EFFECTS OF THE OFFER. Limitations on Resales. The Limited Partnership Agreement prohibits transfers of Units if a transfer, when considered with all other transfers during the same applicable twelve-month period, would cause a termination of the Partnership for federal or any applicable state income tax purposes. This provision may limit sales of Units in the secondary market and in private transactions for the twelve-month period following completion of the Offer. The General Partner has advised the Purchaser that the Partnership will not process any requests for recognition of substitution of Limited Partners upon a transfer of Units during such twelve-month period which the General Partner believes may cause a tax termination in contravention of the Limited Partnership Agreement. In determining the number of Units for which the Offer is made (representing approximately 22% of the outstanding Units), the Purchaser (which is an affiliate of the General Partner) took this restriction into account so as to permit normal historical levels of transfers to occur following the transfers of Units pursuant to the Offer without violating this restriction. Effect on Trading Market; Registration Under Section 12(g) of the Exchange Act. If a substantial number of Units are purchased pursuant to the Offer, the result will be a reduction in the number of Limited Partners. In the case of certain kinds of equity securities, a reduction in the number of security-holders might be expected to result in a reduction in the liquidity and volume of activity in the trading market for the security. In this case, however, there is no established public trading market for the Units and, therefore, the Purchaser (which is an affiliate of the General Partner) does not believe a reduction in the number of Limited Partners will materially further restrict the Limited Partners' ability to find purchasers for their Units through secondary market transactions. See Section 13 for certain limited information regarding recent secondary market sales of the Units. The Units are registered under Section 12(g) of the Exchange Act, which means, among other things, that the Partnership is required to file periodic reports with the Commission and to comply with the Commission's proxy rules. The Purchaser (which is an affiliate of the General Partner) does not expect or intend that consummation of the Offer will cause the Units to cease to be registered under Section 12(g) of the Exchange Act. If the Units were to be held by fewer than 300 persons, the Partnership could apply to de-register the Units under the Exchange Act. Because the Units are widely held, however, the Purchaser (which is an affiliate of the General Partner) believes that, even if it purchases the maximum number of Units in the Offer, after that purchase the Units will be held of record by more than 300 persons. Control of Limited Partner Voting Decisions by Purchaser; Effect of Relationship with General Partner. The Limited Partnership Agreement provides that the General Partner has absolute discretion as to whether to admit an assignee of Units to the Partnership as a substituted Limited Partner. The Purchaser (which is an affiliate of the General Partner) will seek to be admitted to the Partnership as a substituted Limited Partner upon consummation of the Offer and, if admitted, will have the right to vote each Unit purchased pursuant to the Offer. Even if the Purchaser (which is an affiliate of the General Partner) is not admitted to the Partnership as a substituted Limited Partner, however, the Purchaser nonetheless will have the right to vote each Unit purchased in the Offer pursuant to the irrevocable appointment by tendering Limited Partners of the Purchaser and its managers and designees as proxies with respect to the Units tendered by such Limited Partners and accepted for payment by the Purchaser. See Section 3. As a result, the Purchaser (which is an affiliate of the General Partner) could be in a position to significantly influence all voting decisions with respect to the Partnership. Because IPT already owns (through IPLP) approximately 26% of the outstanding Units, however, it will be able to significantly influence the outcome of all voting decisions with respect to the Partnership regardless of the number of Units the Purchaser acquires pursuant to the Offer. In general, IPLP and the Purchaser (which are affiliates of the General Partner) will vote the Units owned by them in whatever manner they deem to be in the best interests of IPT, which, because of their relationship with the General Partner, also may be in the interest of the General Partner, but may not be in the interest of other Limited Partners. This could (i) prevent non-tendering Limited Partners from taking action they desire but that IPT opposes and (ii) enable IPT to take action desired by IPT but opposed by non-tendering Limited Partners. Under the Limited Partnership Agreement, Limited Partners holding a majority of the Units are entitled to take action with respect to a variety of matters, including: removal of the General Partner and in certain circumstances election of a new or successor general partner; dissolution of the Partnership; the sale of all or 12 substantially all of the assets of the Partnership; and most types of amendments to the Limited Partnership Agreement. The Offer will not result in any change in the compensation payable to the General Partner or its affiliates. However, as a result of the Offer, the Purchaser (which is an affiliate of the General Partner) will participate, in its capacity as a Limited Partner, in any subsequent distributions to Limited Partners to the extent of the Units purchased pursuant to the Offer. SECTION 8. FUTURE PLANS OF INSIGNIA, IPT AND THE PURCHASER. IPT, through the Purchaser (which is an affiliate of the General Partner), is seeking to acquire Units pursuant to the Offer in order to increase its equity interest in the Partnership, primarily for investment purposes and with a view to making a profit. Following the completion of the Offer, IPT and/or persons related to or affiliated with it may acquire additional Units. Any such acquisition may be made through private purchases, through one or more future tender or exchange offers or by any other means deemed advisable. Any such acquisition may be at a price higher or lower than the price to be paid for the Units purchased pursuant to the Offer, and may be for cash or other consideration. Insignia and IPT (which are affiliates of the General Partner) also may consider disposing of some or all of the Units the Purchaser acquires pursuant to the Offer, either directly or by a sale or other disposition of one or more interests in IPT or IPLP, depending among other things on the requirements from time to time of Insignia, IPT and their affiliates in light of liquidity, strategic, tax and other considerations. Neither IPT nor the Purchaser (which are affiliates of the General Partner) has any present plans or intentions with respect to an extraordinary transaction, such as a merger, reorganization or liquidation of the Partnership or a sale or refinancing of any of the Partnership's properties. However, IPT and the Purchaser expect that consistent with the General Partner's fiduciary obligations, the General Partner will seek and review opportunities (including opportunities identified by IPT and the Purchaser) to engage in transactions which could benefit the Partnership, such as sales or refinancings of assets or a combination of the Partnership with one or more other entities, with the objective of seeking to maximize returns to Limited Partners. IPT and the Purchaser (which are affiliates of the General Partner) have been advised that the possible future transactions the General Partner expects to consider on behalf of the Partnership include (i) payment of extraordinary distributions; (ii) refinancing, reducing or increasing existing indebtedness of the Partnership; (iii) sales of assets, individually or as part of a complete liquidation; and (iv) mergers or other consolidation transactions involving the Partnership. Any such merger or consolidation transaction could involve other limited partnerships in which the General Partner or its affiliates serve as general partners, or a combination of the Partnership with one or more existing, publicly traded entities (including, possibly, affiliates of IPT (which is an affiliate of the General Partner) or IPT itself), in any of which Limited Partners might receive cash, common stock or other securities or consideration. There is no assurance, however, as to when or whether any of the transactions referred to above might occur. If any such transaction is effected by the Partnership and financial benefits accrue to the Limited Partners of the Partnership, the Purchaser (and thus IPT) will participate in those benefits to the extent of its ownership of Units. A merger or other consolidation transaction and certain kinds of other extraordinary transactions would require a vote of the Limited Partners, and if the Purchaser is successful in acquiring a significant number of Units pursuant to the Offer (or otherwise), IPT will be able to significantly influence the outcome of any such vote. Because IPT already owns (through IPLP) approximately 26% of the outstanding Units, however, it will be able to significantly influence the outcome of all voting decisions with respect to the Partnership regardless of the number of Units the Purchaser acquires pursuant to the Offer. IPT's primary objective in seeking to acquire the Units through the Purchaser pursuant to the Offer is not, however, to influence the vote on any particular transaction, but rather to generate a profit on the investment represented by those Units. SECTION 9. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP. Except as otherwise indicated, information contained in this Section 9 is based upon documents and reports publicly filed by the Partnership with the Commission. 13 General. The Partnership was organized on June 30, 1983 under the laws of the State of California. Its principal executive offices are located at One Insignia Financial Plaza, Greenville, South Carolina 29602, and its telephone number at that address is (864) 239-2747. The Partnership's primary business is real estate ownership and related operations. The Partnership was formed to acquire, own, operate, improve, lease and otherwise manage for investment purposes a diversified portfolio of primarily multi-family residential properties, but also including shopping centers, industrial projects, office buildings and other similar income producing properties. The Partnership's investment portfolio currently consists of two residential apartment complexes: a 253-unit complex in West Chicago, Illinois and a 201-unit complex in Corpus Christi, Texas; and one commercial property: an 86,000 square foot office building in Columbus, Ohio. Originally Anticipated Term of Partnership; Alternatives. According to the Partnership's Prospectus dated December 15, 1983, the then general partners (predecessors to the current General Partner) anticipated that the Partnership would sell and/or refinance its properties three to seven years after their acquisition, depending upon the then current real estate and money markets, economic climate and income tax consequences to the Limited Partners. Under the Limited Partnership Agreement, the term of the Partnership will continue until December 31, 2013, unless sooner terminated as provided in the Limited Partnership Agreement or by law. Limited Partners could, as an alternative to tendering their Units, take a variety of possible actions including voting to liquidate the Partnership or causing the Partnership to merge with another entity or engage in a "roll-up" or similar transaction. General Policy Regarding Sales and Refinancings of Partnership Properties. In general, the General Partner regularly evaluates the Partnership's properties by considering various factors, such as the Partnership's financial position and real estate and capital markets conditions. The General Partner monitors each property's specific locale and sub-market conditions evaluating current trends, competition, new construction and economic changes. The General Partner oversees each asset's operating performance and continuously evaluates the physical improvement requirements. In addition, the financing structure for each property, tax implications and the investment climate are all considered. Any of these factors, and possibly others, could potentially contribute to any decision by the General Partner to sell, refinance, upgrade with capital improvements or hold a particular Partnership property. There are no plans to sell or refinance any of the Partnership's properties at the present time. Selected Financial and Property-Related Data. Set forth below is a summary of certain financial and statistical information with respect to the Partnership and its properties, all of which has been excerpted or derived from the Partnership's Annual Reports on Form 10-KSB for the years ended December 31, 1997, 1996 and 1995, and a Form 10-K for the years ended December 31, 1994 and 1993 and the Partnership's Quarterly Reports on Form 10-QSB for the periods ended March 31, 1998 and 1997. More comprehensive financial and other information is included in such reports and other documents filed by the Partnership with the Commission, and the following summary is qualified in its entirety by reference to such reports and other documents and all the financial information and related notes contained therein. 14 CONSOLIDATED CAPITAL PROPERTIES V SELECTED FINANCIAL DATA (in thousands, except Unit data)
THREE MONTHS ENDED FISCAL YEAR ENDED MARCH 31, DECEMBER 31, ----------------------- ---------------------------------------------------------- 1998 1997 1997 1996 1995 1994 1993 ---------- ------------ ----------- ----------- ----------- ---------- -------- (UNAUDITED) Statements of Operations Data: Rental Income................. $ 1,064 $ 1,084 $ 4,220 $ 3,985 $ 4,727 $ 4,765 $ 4,747 Other Income.................. $ 46 $ 65 $ 204 $ 167 $ 281 $ 188 $ 150 Total Revenues............. $ 1,110 $ 1,149 $ 4,424 $ 4,152 $ 5,008 $ 4,953 $ 4,897 Income (Loss) from Operations (before extraordinary item) $ (1) $ (83) $ (411) $ (877) $(2,067) $(2,075) $(1,700) Net Income (Loss)............. $ (1) $ (83) $ (411) $(1,152) $(2,067) $(1,800) $(1,700) Net Income (Loss) per Unit.... $ -- $ (.46) $ (2.28) $ (6.40) $(11.49) $(10.00) $ (9.43)
AS OF AS OF MARCH 31, DECEMBER 31, ----------------------- ---------------------------------------------------------- 1998 1997 1997 1996 1995 1994 1993 ---------- ------------ ----------- ----------- ----------- ---------- -------- (UNAUDITED) Balance Sheets Data: Total Assets.................. $ 8,554 $ 9,078 $ 8,816 $ 9,260 $10,135 $11,978 $14,548 Total Liabilities............. $11,729 $11,924 $11,990 $12,023 $11,746 $11,522 $12,292 Limited Partners' Equity (Deficit)................... $(3,102) $(2,773) $(3,101) $(2,689) $(1,537) $ 528 $ 2,326 Units Outstanding............. 179,537 179,617 179,537 179,617 179,617 179,617 179,617 Book Value per Unit........... $(17.28) $(15.44) $(17.27) $(14.97) $ (8.56) $ 2.94 $ 12.95
Description of Properties. Set forth below is a table showing the location, the date of purchase, the nature of the Partnership's ownership interest in and the use of each of the Partnership's properties.
DATE OF PROPERTY PURCHASE TYPE OF OWNERSHIP USE -------- -------- ----------------- --- Aspen Ridge Apartments 08/09/84 Fee ownership Residential Apartments West Chicago, Illinois (subject to first mortgage) (253 units) Sutton Place Apartments 07/06/84 Fee ownership Residential Apartments Corpus Christi, Texas (subject to first mortgage) (201 units) 51 North High Building 12/20/84 Fee ownership Office Building Columbus, Ohio (subject to first mortgage) 86,000 sq. ft.
Accumulated Depreciation Schedule. Set forth below is a table showing the gross carrying value, accumulated depreciation and federal tax basis of each of the Partnership's properties as of December 31, 1997 ($ amounts in thousands).
GROSS CARRYING ACCUMULATED FEDERAL PROPERTY VALUE DEPRECIATION RATE METHOD TAX BASIS -------- ----- ------------ ---- ------ --------- Aspen Ridge Apartments $ 8,301 $ 5,419 5-19 yrs. S/L $ 3,057 Sutton Place Apartments 5,972 3,887 5-19 yrs. S/L 2,774 51 North High Building 6,720 4,751 3-19 yrs. S/L 3,243 --------- ----------- -------- TOTALS $ 20,993 $ 14,057 $ 9,074 ========= =========== ========
15 Schedule of Mortgages. Set forth below is a table showing certain information regarding the outstanding mortgages encumbering each of the Partnership's properties as of December 31, 1997 ($ amounts in thousands).
PRINCIPAL PRINCIPAL BALANCE AT STATED BALANCE DECEMBER 31, INTEREST PERIOD MATURITY DUE AT PROPERTY 1997 RATE AMORTIZED DATE MATURITY -------- ---- ---- --------- ---- -------- Aspen Ridge Apartments $ 5,750 7.33% (a) 11/2003 $ 5,750 Sutton Place Apartments 2,772 9.13% 27 yrs. 10/2003 2,581 51 North High Building 2,623 9.00% 20 yrs. 06/2004 1,687 ------- ------- TOTALS $11,145 $10,018 ======= =======
(a) Interest only. Average Annual Rental Rate and Occupancy. Set forth below is a table showing the average annual rental rates and occupancy percentages for each of the Partnership's properties during the past two years.
PROPERTY AVERAGE ANNUAL RENTAL RATE AVERAGE ANNUAL OCCUPANCY -------- -------------------------- ------------------------ 1997 1996 1997 1996 ---- ---- ---- ---- Aspen Ridge Apartments $ 8,153/unit $ 7,852/unit 95% 93% Sutton Place Apartments $ 6,013/unit $ 5,801/unit 94% 93% 51 North High Building $ 14.74/sq.ft. $ 14.23/sq.ft. 95% 89%
Schedule of Real Estate Taxes and Rates. Set forth below is a table showing the real estate taxes and rates for 1997 for each of the Partnership's properties.
1997 1997 PROPERTY BILLING RATE -------- ------- ---- Aspen Ridge Apartments $ 243,000* 8.5% Sutton Place Apartments $ 147,000 3.0% 51 North High Building $ 70,000 5.4%
- ---------------- * Represents an estimate. Other Information. The Partnership is subject to the information reporting requirements of the Exchange Act and accordingly is required to file reports and other information with the Commission relating to its business, financial results and other matters. Such reports and other documents may be inspected at the Commission's Public Reference Section, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, where copies may be obtained at prescribed rates, and at the regional offices of the Commission located in the Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center, New York, New York 10048. Copies should be available by mail upon payment of the Commission's customary charges by writing to the Commission's principal offices at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a web site that contains reports, proxy and other information filed electronically with the Commission, the address of which is http://www.sec.gov. 16 Cash Distributions History. The following table sets forth the cash distributions to the Limited Partners and the General Partner made by the Partnership since 1983. The last distribution made by the Partnership was in 1990 ($25.00 per Unit). In total, original investors in the Partnership have received distributions of only $55.37 in respect of their original $250 investment made in 1983.
PER UNIT DISTRIBUTION TO DISTRIBUTION TO AGGREGATE YEAR LIMITED PARTNERS GENERAL PARTNER DISTRIBUTION(1) ---- ---------------- --------------- --------------- 1998** 0 0 0 1997 0 0 0 1996 0 0 0 1995 0 0 0 1994 0 0 0 1993 0 0 0 1992 0 0 0 1991 0 0 0 1990 $25.00 0 $4,500,000 1989 21.33 0 3,840,000 1988 0 0 0 1987 2.50 0 450,000 1986 2.71 0 510,000 1985 2.34 0 440,000 1984 1.49 290,000 1983 0 0 0
- ----------------- (1) Pursuant to the Limited Partnership Agreement, operating cash distributions by the Partnership are allocated 96% to the Limited Partners and 4% to the General Partner, after payment of a 9% partnership management fee to the General Partner. Distributions of surplus funds are allocated 96% to the Limited Partners and 4% to the General Partner, after Limited Partners receive 100% return of their investment plus a 12% per year cumulative return. ** Through July 30, 1998. Operating Budgets of the Partnership. A summary of the fiscal 1997 and 1998 operating budgets and the audited results of operations for fiscal 1997 of the Partnership are set forth in the table below. The budgeted amounts provided below are figures that were not computed in accordance with generally accepted accounting principles ("GAAP"). Historically, budgeted operating results of operations for a particular fiscal year have differed significantly in certain respects from the audited operating results for that year. In particular, items that are categorized as capital expenditures for purposes of preparing the operating budgets are often re-categorized as expenses when the financial statements are audited and presented in accordance with GAAP. Therefore, the summary operating budget presented for fiscal 1998 should not necessarily be considered as indicative of what the audited operating results for fiscal 1998 will be. Furthermore, any estimate of the future performance of a business, such as the Partnership's business, is forward-looking and based on numerous assumptions, some of which inevitably will prove to be incorrect. For this reason, it is probable that the Partnership's future operating results will differ from those projected in the operating budget, and those differences may be material. Therefore, such information should not be relied on by Limited Partners.
FISCAL 1997 FISCAL 1997 FISCAL 1998 BUDGETED AUDITED BUDGETED -------- ------- -------- Total Revenues from Property Operations........................... $4,366,000 $4,424,000 $4,522,000 Total Operating Expenses ......................................... $2,417,000 $2,919,000 $2,527,000 Net Operating Income.............................................. $1,949,000 $1,505,000 $1,995,000 Capital Expenditures.............................................. $ 757,000 $ 786,000 $ 268,000
17 SECTION 10. CONFLICTS OF INTEREST AND TRANSACTIONS WITH AFFILIATES. The General Partner and its affiliates have conflicts of interest with respect to the Offer as set forth below. Conflicts of Interest with Respect to the Offer. The General Partner has conflicts of interest with respect to the Offer, including conflicts resulting from its affiliation with IPT and the Purchaser. The General Partner also would have a conflict of interest (i) as a result of the fact that a sale or liquidation of the Partnership's assets would result in a decrease or elimination of the fees paid to the General Partner and/or its affiliates and (ii) as a consequence of the Purchaser's ownership of Units, because the Purchaser (which is an affiliate of the General Partner) may have incentives to seek to maximize the value of its ownership of Units, which in turn may result in a conflict for the General Partner in attempting to reconcile the interests of the Purchaser (which is an affiliate of the General Partner) with the interests of the other Limited Partners. In addition, the Purchaser (which is an affiliate of the General Partner) is making the Offer with a view to making a profit. Accordingly, there is a conflict between the desire of the Purchaser (which is an affiliate of the General Partner) to purchase Units at a low price and the desire of the Limited Partners to sell their Units at a high price. The General Partner has indicated in the Schedule 14D-9 that it is remaining neutral and making no recommendation as to whether Limited Partners should tender their Units pursuant to the Offer. LIMITED PARTNERS ARE URGED TO READ THIS OFFER TO PURCHASE AND THE SCHEDULE 14D-9 AND THE RELATED MATERIALS CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS. Voting by the Purchaser. The Limited Partnership Agreement provides that the General Partner has absolute discretion as to whether to admit an assignee of Units to the Partnership as a substituted Limited Partner. The Purchaser (which is an affiliate of the General Partner) will seek to be admitted to the Partnership as a substituted Limited Partner upon consummation of the Offer and, when admitted, will have the right to vote each Unit purchased pursuant to the Offer. Even if the Purchaser (which is an affiliate of the General Partner) is not admitted to the Partnership as a substituted Limited Partner, however, the Purchaser nonetheless will have the right to vote each Unit purchased in the Offer pursuant to the irrevocable appointment by tendering Limited Partners of the Purchaser (which is an affiliate of the General Partner) and its managers and designees as proxies with respect to the Units tendered by such Limited Partners and accepted for payment by the Purchaser. See Section 3. As a result, if the Purchaser (which is an affiliate of the General Partner) is successful in acquiring a significant number of Units pursuant to the Offer (or otherwise), the Purchaser will have the right to vote those Units and thereby significantly influence all voting decisions with respect to the Partnership. Because IPT already owns (through IPLP) approximately 26% of the outstanding Units, however, it will be able to significantly influence the outcome of all voting decisions with respect to the Partnership regardless of the number of Units the Purchaser acquires pursuant to the Offer. In general, IPLP and the Purchaser (which are affiliates of the General Partner) will vote the Units owned by them in whatever manner they deem to be in IPT's best interests, which, because of their relationship with the General Partner, also may be in the interest of the General Partner, but may not be in the interest of other Limited Partners. This could (i) prevent non-tendering Limited Partners from taking action they desire but that IPT opposes and (ii) enable IPT to take action desired by IPT but opposed by non-tendering Limited Partners. Under the Limited Partnership Agreement, Limited Partners holding a majority of the Units are entitled to take action with respect to a variety of matters, including: removal of the General Partner and in certain circumstances election of a new or successor general partner; dissolution of the Partnership; the sale of all or substantially all of the assets of the Partnership; and most types of amendments to the Limited Partnership Agreement. See Section 7. Financing Arrangements. The Purchaser (which is an affiliate of the General Partner) expects to pay for the Units it purchases pursuant to the Offer with funds provided by IPLP as capital contributions. IPLP in turn intends to use its cash on hand and, if necessary, funds available to it under its credit facility (as described in Section 12) to make such contributions. See Section 12. It is possible, however, that in connection with its future financing activities, IPT or IPLP may cause or request the Purchaser (which is an affiliate of the General Partner) to pledge the Units as collateral for loans, or otherwise agree to terms which provide IPT, IPLP and the Purchaser with incentives to generate substantial near-term cash flow from the Purchaser's investment in the Units. This could be the case, for example, if a loan has a "balloon" maturity after a relatively short time or bears a high or increasing interest rate. In such a situation, the General Partner may experience a conflict of interest in seeking to reconcile the best interests of the Partnership with the need of its affiliates for cash flow from the Partnership's activities. 18 Transactions with Affiliates. The Partnership paid IRG and ICG property management fees for property management services in the amounts of approximately $215,000, $204,000 and $246,000 for the years ended December 31, 1997, 1996 and 1995, respectively, and has paid IRG and ICG property management fees equal to $59,000 during the first three months of 1998. The Partnership reimbursed the General Partner and its affiliates (including Insignia) for expenses incurred in connection with asset management and partnership administration services performed by them for the Partnership during 1997, 1996 and 1995 in the amounts of $151,000, $158,000 and $173,000, respectively, and has reimbursed them for such services in the amount of $30,000 through March 31, 1998. The reimbursement amounts for the three months ended March 31, 1998 and the years ended December 31, 1997 and 1996 include $2,000, $33,000 and $4,000, respectively, which amounts were paid to an affiliate of the General Partner for costs incurred in connection with construction oversight services. The Partnership also paid $69,000 and $9,000 for the years ended December 31, 1997 and 1996, respectively, and $1,000 for the three months ended March 31, 1998, to an affiliate of the General Partner for commercial lease commissions. In 1997 and 1996, the Partnership paid an affiliate of the General Partner approximately $5,500 and $36,000, respectively, for loan costs incurred in connection with refinancing the debt encumbering two of the Partnership's properties. For the period July 1, 1995 through August 31, 1997, the Partnership insured its properties under a master policy through an agency affiliated with the General Partner, but with an insurer unaffiliated with the General Partner. An affiliate of the General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the then current year's master policy. That agent assumed the financial obligations to the affiliate of the General Partner who received payments on these obligations from the agent. Insignia and the General Partner believe that the aggregate financial benefit derived by Insignia and its affiliates from such arrangement was immaterial. SECTION 11. CERTAIN INFORMATION CONCERNING THE PURCHASER, IPLP, IPT AND INSIGNIA. The Purchaser. The Purchaser (which is an affiliate of the General Partner) is a newly formed entity controlled by IPT and organized for the purpose of making the Offer. The Purchaser is a wholly-owned subsidiary of IPLP. The Purchaser (which is an affiliate of the General Partner) has not engaged in any business activity other than in connection with the Offer and certain other tender offers for units of limited partnership interests in other IPT Partnerships (as defined below) being made contemporaneously with the Offer, and has no significant assets or liabilities at the present time. Upon consummation of the Offer and such other offers, the Purchaser's only significant assets will be the Units it acquires pursuant to the Offer and the other limited partnership units it acquires pursuant to such other offers. The principal executive offices of the Purchaser (which is an affiliate of the General Partner) are located at One Insignia Financial Plaza, P.O. Box 19059, Greenville, South Carolina 29602, and its telephone number is (864) 239-1300. For certain information concerning the managers of the Purchaser (which is an affiliate of the General Partner), see Schedule I to this Offer to Purchase. IPT and IPLP. IPT was formed by Insignia in May 1996, for the purpose of acquiring and owning interests in multi-family residential properties, principally through ownership of limited and general partner interests in real estate limited partnerships (including the Partnership). IPT has been organized and operates in a manner that will qualify it to be taxed as a real estate investment trust ("REIT") under the Code. Substantially all of IPT's investments are held through IPLP, which is the operating partnership of IPT. IPT is presently the sole general partner and Insignia is presently the sole limited partner of IPLP. IPT has engaged Insignia to provide certain investment banking and related services to IPT and IPLP, including in connection with the Offer. Substantially all of IPT's assets consist of (i) interests in entities which comprise or control the managing general partners of real estate limited partnerships, including the Partnership (the "IPT Partnerships"), which interests are held by IPT directly, and (ii) limited partner interests in the IPT Partnerships, which interests are held through IPLP. The IPT Partnerships own, in the aggregate, 349 properties containing approximately 73,000 residential apartment units and approximately 5.9 million square feet of commercial space. See Schedule IV for a list of the IPT Partnerships in which IPT has a material investment. 19 On July 18, 1997, IPT, Insignia, MAE GP Corporation (which at the time was an affiliate of IPT but has subsequently been merged into IPT, see Section 13) ("MAE GP"), and Angeles Mortgage Investment Trust, an unincorporated California business trust ("AMIT"), entered into a definitive merger agreement (the "AMIT Merger Agreement"), pursuant to which AMIT is to be merged with and into IPT, with IPT being the surviving entity, in a stock for stock transaction (the "AMIT Merger"). AMIT is a public company whose Class A shares trade on the American Stock Exchange under the symbol ANM. Insignia and its affiliates currently own 96,800 (or approximately 3.7%) of the 2,617,000 outstanding AMIT Class A shares and all of the 1,675,113 outstanding AMIT Class B shares. If the AMIT Merger is consummated, IPT will become a publicly traded company (IPT has applied to list its shares on the American Stock Exchange, which listing would be subject to completion of the AMIT Merger), and it is anticipated that Insignia and its affiliates will own approximately 57% of post-merger IPT, the former AMIT shareholders (other than Insignia and its affiliates) will own approximately 16% of post-merger IPT, and the current unaffiliated shareholders of IPT will own the remaining 27% of post-merger IPT (see, however, the discussion of the merger of Insignia and AIMCO in the following subsection of this Section 9 captioned "Insignia"). The AMIT Merger is expected to be completed in the third quarter of 1998. However, consummation of the AMIT Merger is subject to several conditions, including approval of the AMIT Merger Agreement and the AMIT Merger by the shareholders of AMIT. Accordingly, there can be no assurance as to when the AMIT Merger will occur, or that it will occur at all. The principal executive offices of IPT and IPLP are located at One Insignia Financial Plaza, P.O. Box 19059, Greenville, South Carolina 29602, and the telephone number of each is (864) 239-1300. For certain information concerning the trustees and executive officers of IPT, see Schedule II to this Offer to Purchase. IPLP does not have any officers or employees. Set forth below is certain consolidated financial information with respect to IPT and IPLP. INSIGNIA PROPERTIES TRUST SELECTED CONSOLIDATED FINANCIAL INFORMATION (in thousands, except share and unit data)
THREE MONTHS ENDED Year Ended Year Ended MARCH 31, 1998 December 31, 1997 December 31, 1996 -------------- ----------------- ----------------- (unaudited) (audited) (audited) Statements of Operations Data: Revenues.......................................... $ 5,757 $ 16,826 $ 9,705 Income Before Extraordinary Item.................. $ 2,054 $ 6,074 $ 3,557 Net Income........................................ $ 2,080 $ 6,004 $ 2,425 Supplemental Data: Funds From Operations(1).......................... $ 7,439 $ 20,939 $ 12,563 IPT Common Shares Outstanding..................... $19,427,760 $18,573,151 $11,168,036 IPLP Units Outstanding............................ $ 9,934,476 $ 9,415,947 $ 8,399,499 ----------- ----------- ----------- IPT Common Shares and IPLP Units Outstanding(2)... $29,362,236 $27,989,098 $19,567,535 =========== =========== =========== Balance Sheets Data: Cash.............................................. $ 23,338 $ 37,432 $ 4,928 Investments in IPT Partnerships(3)................ $ 177,681 $ 159,469 $ 118,741 Long-Term Debt.................................... $ 21,957 $ 19,300 $ 19,730 Shareholders' Equity(4)........................... $ 206,298 $ 200,659 $ 121,068
- -------------- (1) Funds from Operations represent income or loss from real estate operations, which is net income or loss in accordance with GAAP, excluding gains or losses from debt restructuring or sales of property, plus depreciation and provision for impairment. (2) Assumes all outstanding IPLP units are exchanged for IPT Common Shares. (3) As of March 31, 1998, represented IPT's investment in 41 of the 124 IPT Partnerships which IPT accounts for using the equity method. Of the remaining 83 IPT Partnerships, IPT accounts for 81 using the cost method and two using the consolidation method. (4) Includes Insignia's minority interest in IPLP. 20 Insignia. Insignia is a fully integrated real estate services organization. Insignia is the largest manager of multi-family residential properties in the United States and is among the largest managers of commercial properties. Insignia's real estate services include property management, providing all of the day-to-day services necessary to operate a property, whether residential or commercial; asset management, including long-term financial planning, monitoring and implementing capital improvement plans, and development and execution of refinancings and dispositions; real estate leasing and brokerage; maintenance and construction services; marketing and advertising; investor reporting and accounting; and investment banking, including assistance in workouts and restructurings, mergers and acquisitions, and debt and equity securitizations. Insignia provides property and/or asset management services for approximately 3,800 properties, which include approximately 272,000 residential units (including cooperative and condominium units), and in excess of 208 million square feet of retail, commercial and industrial space, located in over 500 cities in 48 states, Italy, the United Kingdom and Germany. Insignia currently provides partnership administration services to approximately 900 limited partnerships having approximately 350,000 limited partners. Insignia is a public company whose stock is traded on the New York Stock Exchange under the symbol IFS. On March 17, 1998, Insignia and Apartment Investment and Management Company, a Maryland corporation ("AIMCO") entered into a definitive merger agreement, (as amended and restated, the "AIMCO Merger Agreement"), pursuant to which substantially all of Insignia's residential real estate operations and ownership interests, including its interests in IPT and IPLP, are to be merged with and into AIMCO, with AIMCO as the surviving corporation (the "AIMCO Merger"). AIMCO is a public REIT whose Class A shares trade on the New York Stock Exchange under the symbol AIV. The AIMCO Merger is expected to be completed in the third quarter of 1998. However, consummation of the AIMCO Merger is subject to certain conditions, including the approval of the shareholders of Insignia. Accordingly, there can be no assurance as to when the AIMCO Merger will occur, or that it will occur at all. Assuming the AIMCO Merger is consummated, AIMCO will succeed to Insignia's ownership of IPT and IPLP, and thus IPT (and the Partnership) will thereafter be controlled by AIMCO. In addition, AIMCO is required pursuant to the AIMCO Merger Agreement to acquire all of the outstanding shares of IPT not owned by Insignia by causing IPT to merge with and into AIMCO (or a subsidiary of AIMCO) as soon as practicable after the consummation of the AIMCO Merger, in which event IPT would cease to exist as a separate entity and AIMCO would effectively own all of the Units acquired by the Purchaser pursuant to the Offer. Insignia is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is required to file periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Certain information, as of particular dates, concerning Insignia's business, principal properties, capital structure, material pending legal proceedings, operating results, financial condition, directors and officers (including their remuneration and stock options granted to them), the principal holders of Insignia's securities, any material interests of such persons in transactions with Insignia and certain other matters is required to be disclosed in proxy statements and annual reports distributed to Insignia's shareholders and filed with the Commission. Such reports, proxy statements and other information may be inspected and copied at the Commission's public reference facilities and should also be available for inspection in the same manner as set forth with respect to the Partnership in Section 9. Insignia's principal executive offices are located at One Insignia Financial Plaza, Greenville, South Carolina 29602, and its telephone number is (864) 239-1000. For certain information concerning the directors and executive officers of Insignia, see Schedule III to this Offer to Purchase. Set forth below is certain consolidated financial information with respect to Insignia and its consolidated subsidiaries for its fiscal years ended December 31, 1997, 1996 and 1995 and the three-month periods ended March 31, 1998 and 1997. More comprehensive financial and other information is included in Insignia's Annual Report on Form 10-K for the year ended December 31, 1997 (including management's discussion and analysis of financial condition and results of operations) and in other reports and documents filed by Insignia with the Commission. The financial information set forth below is qualified in its entirety by reference to such reports and 21 documents filed with the Commission and the financial statements and related notes contained therein. These reports and other documents may be examined and copies thereof may be obtained in the manner set forth above. INSIGNIA FINANCIAL GROUP, INC. SELECTED CONSOLIDATED FINANCIAL INFORMATION (in thousands, except per share data)
THREE MONTHS ENDED YEAR ENDED MARCH 31, DECEMBER 31, ------------------------- ------------------------------------ 1998 1997 1997 1996 1995 ----------- ------------ ------------ ------------ --------- (unaudited) Statements of Operations Data: Total Revenues.................................. $ 130,458 $ 67,912 $ 400,843 $ 227,074 $ 123,032 Income Before Taxes and Extraordinary Item...... $ 3,486 $ 3,340 $ 17,055 $ 14,946 $ 10,093 Net Income...................................... $ 1,917 $ 2,004 $ 10,233 $ 8,564 $ 5,806 Earnings Per Share.............................. $ 0.06 $ 0.06 $ 0.32 $ 0.26 $ 0.20
AS OF AS OF MARCH 31, DECEMBER 31, ------------------------- -------------------------------------- 1998 1997 1997 1996 1995 ----------- ------------ ------------ ------------ ----------- (unaudited) Balance Sheets Data: Cash and Cash Equivalents....................... $ 73,143 $ 69,821 $ 88,847 $ 54,614 $ 49,846 Receivables..................................... $ 151,919 $ 52,455 $ 122,180 $ 46,040 $ 26,445 Total Assets................................ $ 922,810 $ 486,809 $ 800,223 $ 492,402 $ 245,409 Accounts Payable................................ $ 17,347 $ 2,417 $ 13,705 $ 1,711 $ 1,497 Commissions Payable............................. $ 56,404 $ 18,264 $ 51,285 $ 18,736 $ 602 Accrued and Sundry Liabilities.................. $ 114,524 $ 32,186 $ 102,009 $ 40,741 $ 25,619 Long-Term Debt.................................. $ 258,422 $ 68,905 $ 189,704 $ 69,140 $ 42,996 Total Liabilities........................... $ 446,697 $ 121,772 $ 356,703 $ 130,328 $ 70,714 Redeemable Convertible Preferred Stock.......... -- -- -- -- $ 15,000 Redeemable Convertible Preferred Securities of Subsidiary Trust........................... $ 144,137 143,943 $ 144,065 $ 144,169 -- Minority Interest in Consolidated Subsidiaries.. $ 65,082 $ -- $ 61,546 -- $ 2,682 Shareholders' Equity........................ $ 266,894 $ 221,094 $ 237,909 $ 217,905 $ 157,013
Except as otherwise set forth herein, none of the Purchaser (which is an affiliate of the General Partner), IPLP, IPT, Insignia or, to the best of the Purchaser's knowledge, any of the persons listed on Schedules I, II or III hereto, or any affiliate of the foregoing, (i) beneficially owns or has a right to acquire any Units, (ii) has effected any transaction in the Units in the last 60 days, or (iii) has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Partnership, including, but not limited to, contracts, arrangements, understandings or relationships concerning the transfer or voting thereof, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies. Andrew L. Farkas, who is the Chairman of the Board, Chief Executive Officer and President of Insignia and a trustee of IPT, beneficially owns approximately 28% of Insignia's outstanding common stock and, as a result, may be deemed to beneficially own the Units owned by IPLP. SECTION 12. SOURCE OF FUNDS. The Purchaser (which is an affiliate of the General Partner) expects that approximately $1,500,000 will be required to purchase 40,000 Units, if tendered, and to pay related fees and expenses. The Purchaser (which is an affiliate of the General Partner) expects to obtain all of those funds from IPLP, which in turn intends to use its cash on hand and borrowings from its credit facility with a commercial bank and financial institution. The Purchaser has not conditioned the Offer on obtaining financing. 22 The following is a summary description of the existing credit facility (the "Facility") provided for the benefit of IPLP pursuant to the Credit Agreement, dated as of December 30, 1997 (the "Credit Agreement"), among IPLP, as borrower, Lehman Commercial Paper, Inc., as syndication agent, First Union National Bank, as administrative agent and the lenders from time to time parties thereto (the "Lenders"). This summary description does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, a copy of which has been filed as an exhibit to the Purchaser's Tender Offer Statement on Schedule 14D-1 filed with the Commission. Pursuant to the Credit Agreement, the Lenders have made available to IPLP a revolving credit facility of up to $50.0 million at any one time outstanding. Loans under the Facility (the "Loans") may be utilized to finance certain permitted investments and refinance certain investments made prior to the date of the Credit Agreement. The Facility matures in a single installment on December 30, 2000. Loans bear interest, at IPLP's election, (i) at a rate equal to the higher of (a) the rate announced from time to time by First Union National Bank as its base lending rate or (b) the daily effective federal funds rate as quoted by First Union National Bank; or (ii) at rates based on the London interbank offered rate, as adjusted for certain reserve and other requirements applicable to lenders, for one-, two-, three- or six-month periods plus an interest margin of 2.50%. As of the date hereof, IPT has no outstanding indebtedness under the Facility. IPT is obligated to pay a commitment fee at a rate of 0.25% per annum on the undrawn portion of the Facility. Such commitment fee is payable quarterly in arrears and calculated based on the actual number of days elapsed over a 365-day year. The Loans are subject to mandatory prepayment only to the extent that the aggregate outstanding principal amount of the Loans on any day exceeds the amount of the Facility then in effect. Voluntary prepayments of the Loans and voluntary reductions of the Facility are permitted in whole or in part at the option of IPLP, in minimum principal amounts, without premium or penalty, subject to reimbursement of certain of the Lenders' costs under certain conditions. IPLP's obligations under the Facility have been guaranteed by IPT and such guaranty is secured by a first priority pledge of and security interest in the capital stock or other equity interests held by IPT in each of the subsidiaries of IPT which directly or indirectly, owns or controls the general partner interest (including an interest in the General Partner) in any Real Estate Entity (as defined below) in which IPLP, directly or indirectly owns a limited partner interest (including the Partnership). In addition, the Facility is secured by a first priority pledge of and security interest in all limited partnership interests from time to time owned by IPLP and the equity interests from time to time held by IPLP in any subsidiary of IPLP which itself owns limited partnership interests. The Credit Agreement defines a "Real Estate Entity" as any limited partnership, limited liability company, corporation or other entity which has as its principal business the ownership of real property or debt secured by real property. Thus, the IPT Partnerships (including the Partnership) constitute Real Estate Entities for purposes of the Credit Agreement. The Facility contains representations and warranties, conditions precedent, covenants, events of default and other provisions customarily found in similar transactions. SECTION 13. BACKGROUND OF THE OFFER. Affiliation With the General Partner. Upon the Partnership's formation in 1983, Consolidated Capital Equities Corporation ("CCEC"), a Colorado corporation, was the corporate general partner and Consolidated Capital Group, a California general partnership, was the non-corporate general partner. As a result of a succession of agreements, CCEC became the Partnership's managing general partner. In 1988, through a series of transactions, Southmark Corporation acquired control of CCEC. In December 1988, CCEC filed for reorganization under Chapter 11 of the United States Bankruptcy Code. In 1990, as part of CCEC's reorganization plan, the General Partner acquired CCEC's general partner interests in the Partnership and in 15 other affiliated public limited partnerships (the "Affiliated Partnerships") and the General Partner replaced CCEC as the managing general partner 23 of the Partnership (and as the managing general partner of each of the Affiliated Partnerships). The selection of the General Partner as the general partner of the Partnership (and of each of the Affiliated Partnerships) was approved by a majority of the Limited Partners in the Partnership (and by a majority of the limited partners in each of the Affiliated Partnerships) pursuant to solicitations commenced in August 1990. Insignia acquired the stock of the General Partner through two transactions in December 1994 and October 1995, and contributed that stock to IPT in December 1996 in connection with IPT's formation. Previous Tender Offer. In February 1998, Madison River Properties, L.L.C. ("Madison River") acquired 43,796 (or approximately 24%) of the outstanding Units, at a purchase price of $30 per Unit, pursuant to a tender offer commenced in December 1997. Madison River was affiliated with IPLP, IPT, Insignia and the General Partner at the time. Determination of Purchase Price. In establishing the Purchase Price, the Purchaser (which is an affiliate of the General Partner) reviewed certain publicly available information and certain information made available to it by the General Partner and its other affiliates, including among other things: (i) the Limited Partnership Agreement, as amended to date; (ii) the Partnership's Annual Report on Form 10-KSB for the year ended December 31, 1997 and the Partnership's Quarterly Report on Form 10-QSB for the period ended March 31, 1998; (iii) unaudited results of operations of the Partnership's properties for the period since the beginning of the Partnership's current fiscal year; (iv) the operating budgets prepared by IRG and ICG with respect to the Partnership's properties for the year ending December 31, 1998; (v) independent appraisals of two of the Partnership's properties; and (vi) other information obtained by IRG, ICG, Insignia and other affiliates in their capacities as providers of property management, asset management and partnership administration services to the Partnership. The Purchaser's determination of the Purchase Price was based on its review and analysis of the foregoing information, the other financial information and analyses concerning the Partnership summarized below. In determining the Purchase Price, the Purchaser did not rely upon any material, non-public information concerning the Partnership not summarized below or elsewhere in this Offer to Purchase. Trading History of Units. Secondary market sales activity for the Units, including privately negotiated sales, has been limited and sporadic. According to information obtained from the General Partner, from July 1, 1996 to June 30, 1998 an aggregate of 3,780 Units (representing less than 2.2% of the total outstanding Units) was transferred in sale transactions (excluding the transfers of Units to IPLP by Insignia in connection with the formation of IPT and the Units acquired by an affiliate of IPT and Insignia pursuant to a tender offer commenced in December 1997). Set forth in the table below are the high and low sales prices of Units for the quarterly periods from July 1, 1996 to June 30, 1998 as reported by the General Partner and by The Partnership Spectrum, which is an independent, third-party source. The gross sales prices reported by The Partnership Spectrum do not necessarily reflect the net sales proceeds received by sellers of Units, which typically are reduced by commissions and other secondary market transaction costs to amounts less than the reported prices; thus the Purchaser does not know whether the information compiled by The Partnership Spectrum is accurate or complete. The transfer paperwork submitted to the General Partner often does not include the requested price information or contains conflicting information as to the actual sales price; accordingly, Limited Partners should not rely upon this information as being completely accurate. 24 CONSOLIDATED CAPITAL PROPERTIES V REPORTED SALES PRICES OF PARTNERSHIP UNITS
AS REPORTED BY AS REPORTED BY THE GENERAL PARTNER(A) THE PARTNERSHIP SPECTRUM(B) ---------------------- --------------------------- LOW SALES HIGH SALES LOW SALES HIGH SALES PRICE PRICE PRICE PRICE PER UNIT PER UNIT PER UNIT PER UNIT -------- -------- -------- -------- Fiscal Year Ended December 31, 1998: Second Quarter.................................... (c) (c) $27 $33 First Quarter..................................... $14 $55(d) 28 32 Fiscal Year Ended December 31, 1997: 19 19 Fourth Quarter.................................... 10 20 Third Quarter ................................... 6 22 21 23 Second Quarter.................................... 8 26 19 22 First Quarter .................................... 8 20 20 26 Fiscal Year Ended December 31, 1996: Fourth Quarter ................................... 10 40 19 21 Third Quarter..................................... 5 24 15 20
- -------------------- (a) Although the General Partner requests and records information on the prices at which Units are sold, it does not regularly receive or maintain information regarding the bid or asked quotations of secondary market makers, if any. The General Partner processes transfers of Units 12 times per year - on the first day of each month. The prices in the table are based solely on information provided to the General Partner by sellers and buyers of Units transferred in sale transactions (i.e., excluding transactions believed to result from the death of a Limited Partner, rollover to an IRA account, establishment of a trust, trustee to trustee transfers, termination of a benefit plan, distributions from a qualified or non-qualified plan, uniform gifts, abandonment of Units or similar non- sale transactions). (b) The gross sales prices reported by The Partnership Spectrum do not necessarily reflect the net sales proceeds received by sellers of Units, which typically are reduced by commissions and other secondary market transaction costs to amounts less than the reported prices. The Purchaser (which is an affiliate of the General Partner) does not know whether the information compiled by The Partnership Spectrum is accurate or complete. (c) No Units were reported by the General Partner as having been sold during the quarter. (d) The General Partner has information that indicates this reported sales price represented a single, isolated transaction for a minimal number of Units and such sales price was materially higher than the range of sales prices for all other transactions during the quarter. The Purchase Price is approximately 3% greater than the highest reported sales price of $32 per Unit for other transactions during the six-month period prior to June 30, 1998. The Purchaser (which is an affiliate of the General Partner) believes that, although secondary market sales information probably is not a reliable measure of value because of the limited and inefficient nature of the market for Units, this information may be relevant to a Limited Partner's decision as to whether to tender its Units pursuant to the Offer. At present, privately negotiated sales and sales through intermediaries (e.g., through the trading system operated by American Partnership Board, Inc., which publishes sell offers by holders of Units) are the only means available to a Limited Partner to liquidate an investment in Units (other than the Offer) because the Units are not listed or traded on any exchange or quoted on NASDAQ. General Partner's Estimate of Net Asset Value. The General Partner prepared an estimate of the Partnership's net asset value per Unit in connection with an offer to purchase up to 4.9% of the outstanding Units commenced by a party unaffiliated with the Purchaser, IPLP, IPT or Insignia in July 1998. The General Partner's estimate of the Partnership's net asset value per Unit as of June 30, 1998 was $49 per Unit. The General Partner estimates net asset value based on a hypothetical sale of all of the Partnership's properties and the distribution to the Limited Partners and the General Partner of the proceeds of such sales, net of related indebtedness and transaction costs, together with the Partnership's cash, proceeds from temporary investments, and all other assets that are believed to have liquidation value, after provision in full for all of the Partnership's other known liabilities. The net asset value estimate prepared by the General Partner does not take into account (i) timing considerations or (ii) costs associated with winding up the Partnership. Therefore, the Purchaser believes that the General Partner's estimate of net asset value per Unit does not necessarily represent either the fair market value of a Unit or the amount a Limited Partner reasonably could expect to receive if the Partnership's properties were sold and the Partnership was liquidated. For this reason, the Purchaser considered the General Partner's net asset value 25 estimate to be less meaningful in determining the Purchase Price than the pro forma liquidation analysis described below. Appraisals. Two of the Partnership's properties were appraised in 1996 by independent, third party appraisers (either Joseph J. Blake & Associates ("Blake") or Koeppel Tener Real Estate Services, Inc. ("KTR")) in connection with refinancings of those properties. According to the appraisal reports, the scope of the appraisals included an inspection of each property and an analysis of the respective surrounding markets. In each case, the applicable independent appraiser relied principally on the income capitalization approach to valuation and secondarily on the sales comparison approach, and represented that its report was prepared in accordance with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice, and in compliance with the Appraisal Standards set forth in the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (known as "FIRREA"). The estimated market value of the fee simple estate of each of the Partnership's properties specified in those appraisal reports are set forth in the table below, and copies of the summaries of those appraisals have been filed as exhibits to the Purchaser's Tender Offer Statement on Schedule 14D-1 filed with the Commission.
APPRAISED DATE OF PROPERTY NAME VALUE APPRAISAL APPRAISER - ------------- ----- --------- --------- Aspen Ridge Apartments $9,100,000 04/12/96 KTR Sutton Place Apartments $4,700,000 06/06/96 Blake
Purchaser's Estimate of Gross Real Estate Value. In estimating the gross real estate value of the Partnership's properties, the Purchaser utilized the capitalization of income approach for the residential properties and a discounted cash flow analysis for the commercial property. The estimate of the gross real estate value of the Partnership's properties prepared by the Purchaser does not purport to be an estimate of the aggregate fair market value of the Units themselves, nor should it be viewed as such by Limited Partners. Neither the Purchaser nor any of its affiliates prepared any estimates of the values of the Partnership's properties based upon any other valuation method. The following is a description of the methodology employed by the Purchaser in preparing such estimates for the residential properties owned by the Partnership (as used below, "net operating income" is calculated before depreciation, amortization, debt service payments and certain capital expenditure items): RESIDENTIAL PROPERTIES ASPEN RIDGE APARTMENTS. In estimating the value of this property, the Purchaser reviewed the income ($834,367) generated by the property for the five months ended May 31, 1998 (comprised of $789,803 of gross rental income and $44,564 of other income), and then deducted from this amount the total operating expenses of the property for the first five months of 1998 ($416,926), resulting in the Purchaser's estimate of net operating income for the first five months of 1998 ($417,441). The Purchaser then annualized this amount, resulting in estimated annual net operating income of $1,001,850, and then reduced that annualized net operating income amount by $150 per apartment unit, representing the Purchaser's estimate of the adjustment that would be imputed by a third party purchaser in underwriting the operating expenses, including normal replacement reserves, of the property for valuation purposes. Finally, the Purchaser capitalized its estimated adjusted net operating income amount ($963,900) at a 10.25% capitalization rate, resulting in an estimated gross property value of $9,403,902. SUTTON PLACE APARTMENTS. In estimating the value of this property, the Purchaser reviewed the income ($476,864) generated by the property for the five months ended May 31, 1998 (comprised of $459,818 of gross rental income and $17,046 of other income), and then deducted from this amount the total operating expenses of the property for the first five months of 1998 ($299,220), resulting in the Purchaser's estimate of net operating income for the first five months of 1998 ($177,644). The Purchaser then annualized this amount, resulting in estimated annual net operating income of $426,342, and then increased that annualized net operating income amount by $350 per apartment unit, representing the Purchaser's estimate of the adjustment that would be imputed by a third party purchaser in underwriting the operating expenses, including normal replacement reserves, of the property for 26 valuation purposes. Finally, the Purchaser capitalized its estimated adjusted net operating income amount ($496,692) at a 10.25% capitalization rate, resulting in an estimated gross property value of $4,845,776. COMMERCIAL PROPERTY The following is a description of the methodology employed by the Purchaser in preparing the estimate of the value of the commercial property owned by the Partnership: 51 NORTH HIGH BUILDING. In estimating the value of this property, the Purchaser performed the following analysis. The Purchaser calculated estimated annual cash flow through December 31, 2007 based on various assumptions, including, among others, (i) market rents at various points in time, as adjusted for inflation, (ii) lease expiration dates and renewal rates for existing tenants, (iii) tenant improvement allowances for new leases and lease renewals and (iv) length of new leases. The Purchaser, in order to arrive at a present value of the estimated annual cash flows for years one through ten, utilized the estimated annual cash flow for year one and applied a discount rate of 12% in order to determine the present value of the estimated annual cash flows for each of years one through ten. Next, the Purchaser capitalized the estimated net operating income amount for each of years one through ten at a 10.5% capitalization rate, then subtracted 3% for estimated sale transaction costs, resulting in an estimated net liquidation value for the property for each of years one through ten. The Purchaser, in order to arrive at a present value of the estimated net liquidation value for years one through ten, utilized the estimated net liquidation value for year one and applied a discount rate of 12% in order to determine the present value of the estimated net liquidation values for each of years two through ten. The Purchaser then calculated an annual property value for each of the ten years based on the sum of the present values of (A) estimated cash flow and (B) estimated net liquidation value. Finally, the Purchaser totalled the annual property values for each of the ten years and then divided that amount by ten, resulting in an estimated property value of $5,286,152. Based on the individual estimates of the gross values of the Partnership's properties described above, the Purchaser estimated that the current aggregate gross real estate value of the Partnership's properties is $19,535,830 (the "Gross Real Estate Value Estimate"). The property-specific capitalization rates used by the Purchaser in the valuation estimates described above were based upon the Purchaser's, IPT's and Insignia's general knowledge of the revenues and expenses associated with operating multi-family and commercial properties in the markets in which the Partnership's properties are located, their general knowledge of property values in those markets and their experience in the real estate market in general. Although there are several other methods of estimating the value of real estate of this type, the Purchaser believes that these approaches represent reasonable methods of estimating the aggregate gross value of the Partnership's properties (without taking into account the costs of disposing of the multi-family properties), subject to the substantial uncertainties inherent in any estimate of value. The use of other assumptions, however, particularly as to the applicable capitalization rate, could produce substantially different results. In valuing the commercial property owned by the Partnership, the Purchaser employed a discounted cash flow analysis based on software programs traditionally used and determined as reasonable by others in the industry, such as "Argus" or "Project." This method relies on a number of assumptions, including, among others, (i) rental rates for new leases and lease renewals, (ii) tenant improvement allowances for new leases and lease renewals, (iii) brokers' commissions, (iv) lease periods, (v) capital expenditures and (vi) discount rates applied to future cash flows. The use of assumptions or variables that differ from those described above, particularly the applicable discount rate, could produce substantially different results. None of the Purchaser, IPT or Insignia solicited any offers or inquiries from prospective buyers of the Partnership's properties in connection with preparing the Purchaser's estimates of the fair market values of those properties, and the actual amounts for which the Partnership's properties might be sold could be significantly higher or significantly lower than the Purchaser's estimates. The Gross Real Estate Value Estimate does not take into account (i) the debt encumbering the Partnership's properties or the other liabilities of the Partnership, (ii) cash and other assets held by the Partnership, (iii) real estate transaction costs that would be incurred on a sale of the Partnership's multi-family properties, such as brokerage commissions and other selling and closing expenses, (iv) timing considerations or (v) costs associated with winding up the Partnership. For this reason, the Purchaser considers the Gross Real Estate Value Estimate to be less 27 meaningful in evaluating the Purchase Price offered by the Purchaser than its pro forma estimate of the net liquidation value per Unit described below. Purchaser's Pro Forma Estimate of Net Liquidation Value per Unit. The Purchaser is offering to purchase Units, which are a relatively illiquid investment, and is not offering to purchase the Partnership's underlying assets or assume any of its liabilities. Consequently, the Purchaser does not believe that the per-Unit amount which might be distributed to Limited Partners following a future sale of all the Partnership's properties necessarily reflects the present fair value of a Unit. Conversely, the realizable value of the Partnership's assets clearly is a relevant factor in determining the price a prudent purchaser would offer for Units. In considering this factor, the Purchaser made a pro forma calculation of the amount each Limited Partner might receive in a theoretical orderly liquidation of the Partnership (which may not be realistically possible, particularly in the near term, due to real estate market conditions, the general difficulty of disposing of real estate in a short period of time, and other general economic factors), based on the Gross Real Estate Value Estimate described above and the other considerations described below. The Purchaser based its pro forma liquidation analysis on the Gross Real Estate Value Estimate (and thus on the Purchaser's estimates of the values of the Partnership's properties described above), as opposed to the appraised values of the Partnership's properties or the General Partner's net asset value estimate (each, as described above), because the Purchaser believes that the Gross Real Estate Value Estimate represents the best estimate, based on currently available information, of the values of the Partnership's properties. In estimating the pro forma net liquidation value per Unit, the Purchaser adjusted its Gross Real Estate Value Estimate of $19,535,830 to reflect the Partnership's other assets and liabilities (excluding prepaid and deferred expenses and security deposits). Specifically, the Purchaser added the amounts of cash, accounts receivable and escrow deposits shown on the Partnership's unaudited balance sheet at June 30, 1998 ($1,577,843), and subtracted the mortgage debt encumbering the Partnership's properties ($11,078,010) and all other liabilities shown on that balance sheet ($709,490). The Purchaser then deducted from that amount $569,987, representing a reserve equal to 4% of the gross real estate value of the Partnership's multi-family properties (which represents the Purchaser's estimate of the probable costs of brokerage commissions, real estate transfer taxes and other disposition expenses). Such expenses were factored into the Purchaser's calculation of the value of the Partnership's commercial property (as described herein). The result, $8,756,186, represents the Purchaser's pro forma estimate of the aggregate net liquidation proceeds (before provision for the costs described in the following sentence) which could be realized on an orderly liquidation of the Partnership, based on the assumptions implicit in the calculations described above. The Purchaser did not, however, deduct any amounts in respect of the legal and other costs which the Purchaser expects would be incurred in a liquidation, including costs of negotiating purchase and sale contracts, possibly conducting a consent solicitation in order to obtain the Limited Partners' approvals for the sales as may be required by the Limited Partnership Agreement, and winding up the Partnership, because of the difficulty of estimating those amounts. To complete its pro forma estimate of the amount of the theoretical liquidation proceeds that would be distributable per Unit, the Purchaser divided the estimated aggregate net liquidation proceeds of $8,756,186 by the 179,537 Units reported as outstanding by the General Partner as of July 1, 1998. The resulting estimated pro forma liquidation value was $48.77 per Unit (the "Estimated Liquidation Value"), before provision for the legal and other costs of liquidating the Partnership described in the last sentence of the preceding paragraph. The Purchaser's pro forma liquidation analysis described above is merely theoretical and does not itself reflect the value of the Units because (i) there is no assurance that any such liquidation in fact will occur in the foreseeable future and (ii) any liquidation in which the estimated fair market values described above might be realized would take an extended period of time (at least a year, and quite possibly significantly longer), during which time the Partnership and its partners would continue to be exposed to the risk of fluctuations in asset values because of changing market conditions and other factors. For any property sales in which the Partnership is required to indemnify the buyer for matters arising after the closing, a portion of the sales proceeds could be held by the Partnership until all possible claims were satisfied, further extending the delay in the receipt by the Limited Partners of liquidation proceeds. In light of these factors, the Purchaser (which is an affiliate of the General Partner) believes the actual current value of the Units is substantially less than its estimate of the Estimated Liquidation Value. Conversely, there is a substantial possibility that the per-Unit value realized in an orderly 28 liquidation could be greater than the Estimated Liquidation Value. A reduction in either operating expenses or capital expenditures from the levels reflected in the property value calculations above would result in a higher liquidation value under the method described above. Similarly, a higher liquidation value would result if a buyer applied lower capitalization rates (reflecting a willingness to accept a lower rate of return on its investment) to the applicable net operating income generated by the Partnership's properties than the capitalization rates applied by the Purchaser. For example, a 5% increase or decrease in the value of the Partnership's properties would produce a corresponding increase or decrease in the Estimated Liquidation Value of approximately $5 per Unit. Furthermore, the analysis described above is based on a series of assumptions, some of which may not be correct. Accordingly, this analysis should be viewed merely as indicative of the Purchaser's approach to valuing Units and not as any way predictive of the likely result of any future transactions. Litigation. On March 24, 1998, certain persons claiming to own limited partner interests in certain limited partnerships (including the Partnership) whose general partners (the "General Partners") are affiliates of Insignia (the "Partnerships") filed a purported class and derivative action in California Superior Court in the County of San Mateo (the "Complaint") against Insignia, the General Partners (including the General Partner), certain persons and entities who purportedly formerly controlled the General Partners, and additional entities affiliated with and individuals who are officers, directors and/or principals of several of the defendants. The complaint contains allegations that, among other things, (i) the defendants breached their fiduciary duties to the plaintiffs by selling or agreeing to sell their "fiduciary positions" as stockholders, officers and directors of the General Partners for a profit and retaining said profit rather than distributing it to the plaintiffs; (ii) the defendants breached their fiduciary duties by mismanaging the Partnerships and misappropriating the assets of the Partnerships by (a) manipulating the operations of the Partnerships to depress the trading price of limited partnership units (the "Units") of the Partnerships; (b) coercing and fraudulently inducing unitholders to sell Units to certain of the defendants at depressed prices; and (c) using the voting control obtained by purchasing Units at depressed prices to entrench certain of the defendants' positions of control over the Partnerships; and (iii) the defendants breached their fiduciary duties to the plaintiffs by (a) selling assets of the Partnerships such as mailing lists of unitholders; and (b) causing the General Partners to enter into exclusive arrangements with their affiliates to sell goods and services to the General Partners, the unitholders and tenants of Partnership properties. The complaint also alleges that the foregoing allegations constitute violations of various California securities, corporate and partnership statutes, as well as conversion and common law fraud. The complaint seeks unspecified compensatory and punitive damages, an injunction blocking the sale of control of the General Partners to AIMCO and a court order directing the defendants to discharge their fiduciary duties to the plaintiffs. As of the date of this Offer to Purchase, defendants have not served or filed a reply to the complaint. IPT and Insignia believe that the allegations contained in the Complaint are without merit and intend to vigorously contest the plaintiffs' action. SECTION 14. CONDITIONS OF THE OFFER. Notwithstanding any other term of the Offer, the Purchaser (which is an affiliate of the General Partner) will not be required to accept for payment or to pay for any Units tendered if all authorizations, consents, orders or approvals of, or declarations or filings with, or expirations of waiting periods imposed by, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, necessary for the consummation of the transactions contemplated by the Offer shall not have been filed, occurred or been obtained prior to the Expiration Date. Furthermore, notwithstanding any other term of the Offer and in addition to the Purchaser's right to withdraw the Offer at any time before the Expiration Date, the Purchaser (which is an affiliate of the General Partner) will not be required to accept for payment or pay for any Units not theretofore accepted for payment or paid for and may terminate or amend the Offer as to such Units if, at any time on or after the date of the Offer and before the Expiration Date, any of the following conditions exists: (a) a preliminary or permanent injunction or other order of any federal or state court, government or governmental authority or agency shall have been issued and shall remain in effect which (i) makes illegal, delays or otherwise directly or indirectly restrains or prohibits the making of the Offer or the acceptance for payment, purchase of or payment for any Units by the Purchaser (which is an affiliate of the General Partner), (ii) imposes or confirms limitations on the ability of the Purchaser effectively to exercise full rights of ownership of any Units, including without limitation the right to vote any Units acquired by the Purchaser pursuant to the Offer or otherwise on all matters properly presented to the Partnership's Limited Partners, (iii) requires divestiture by the Purchaser 29 of any Units, (iv) causes any material diminution of the benefits to be derived by the Purchaser as a result of the transactions contemplated by the Offer, or (v) might materially adversely affect the business, properties, assets, liabilities, financial condition, operations, results of operations or prospects of the Purchaser or the Partnership; (b) there shall be any action taken, or any statute, rule, regulation or order proposed, enacted, enforced, promulgated, issued or deemed applicable to the Offer by any federal or state court, government or governmental authority or agency, which might, directly or indirectly, result in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above; (c) any change or development shall have occurred or been threatened since the date of the Offer to Purchase, in the business, properties, assets, liabilities, financial condition, operations, results of operations or prospects of the Partnership, which is or may be materially adverse to the Partnership, or the Purchaser (which is an affiliate of the General Partner) shall have become aware of any fact that does or may have a material adverse effect on the value of the Units; (d) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United States, (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) any limitation by any governmental authority on, or other event which might affect, the extension of credit by lending institutions or result in any imposition of currency controls in the United States, (iv) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the United States, (v) a material change in United States or other currency exchange rates or a suspension of, or imposition of a limitation on, the markets thereof, or (vi) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; or (e) it shall have been publicly disclosed or the Purchaser (which is an affiliate of the General Partner) shall have otherwise learned that (i) more than ten percent of the outstanding Units have been or are proposed to be acquired by another person (including a "group" within the meaning of Section 13(d)(3) of the Exchange Act), or (ii) any person or group that prior to such date had filed a Statement with the Commission pursuant to Section 13(d) or (g) of the Exchange Act has increased or proposes to increase the number of Units beneficially owned by such person or group as disclosed in such Statement by two percent or more of the outstanding Units. The foregoing conditions are for the sole benefit of the Purchaser (which is an affiliate of the General Partner) and may be asserted by the Purchaser regardless of the circumstances giving rise to such conditions or may be waived by the Purchaser in whole or in part at any time and from time to time in its sole discretion. Any determination by the Purchaser (which is an affiliate of the General Partner) concerning the events described above will be final and binding upon all parties. SECTION 15. CERTAIN LEGAL MATTERS. General. The Purchaser (which is an affiliate of the General Partner) is not aware of any filings, approvals or other actions by any domestic or foreign governmental or administrative agency that would be required prior to the acquisition of Units by the Purchaser (which is an affiliate of the General Partner) pursuant to the Offer, other than the filing of a Tender Offer Statement on Schedule 14D-1 with the Commission (which has already been filed) and any required amendments thereto. Should any such approval or other action be required, it is the Purchaser's present intention that such additional approval or action would be sought. Although there is no present intent to delay the purchase of Units tendered pursuant to the Offer pending receipt of any such additional approval or the taking of any such action, there can be no assurance that any such additional approval or action, if needed, would be obtained without substantial conditions or that adverse consequences might not result to the Partnership's business, or that certain parts of the Partnership's business might not have to be disposed of or other substantial conditions complied with in order to obtain such approval or action, any of which could cause the Purchaser (which is an affiliate of the General Partner) to elect to terminate the Offer without purchasing Units thereunder. 30 Antitrust. The Purchaser (which is an affiliate of the General Partner) does not believe that the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, is applicable to the acquisition of Units contemplated by the Offer. Margin Requirements. The Units are not "margin securities" under the regulations of the Board of Governors of the Federal Reserve System and, accordingly, those regulations generally are not applicable to the Offer. SECTION 16. FEES AND EXPENSES. Except as set forth in this Section 16, the Purchaser (which is an affiliate of the General Partner) will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Units pursuant to the Offer. The Purchaser (which is an affiliate of the General Partner) has retained Beacon Hill Partners, Inc. to act as Information Agent and Harris Trust Company of New York to act as Depositary in connection with the Offer. The Purchaser (which is an affiliate of the General Partner) will pay the Information Agent and the Depositary reasonable and customary compensation for their respective services in connection with the Offer, plus reimbursement for out-of-pocket expenses, and has agreed to indemnify the Information Agent and the Depositary against certain liabilities and expenses in connection therewith, including liabilities under the federal securities laws. The Purchaser (which is an affiliate of the General Partner) will also pay all costs and expenses of printing and mailing the Offer and its legal fees and expenses. SECTION 17. MISCELLANEOUS. The Purchaser (which is an affiliate of the General Partner) is not aware of any jurisdiction in which the making of the Offer is not in compliance with applicable law. If the Purchaser (which is an affiliate of the General Partner) becomes aware of any jurisdiction in which the making of the Offer would not be in compliance with applicable law, the Purchaser will make a good faith effort to comply with any such law. If, after such good faith effort, the Purchaser (which is an affiliate of the General Partner) cannot comply with any such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) Limited Partners residing in such jurisdiction. In those jurisdictions whose securities or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of the Purchaser (which is an affiliate of the General Partner) by one or more registered brokers or dealers licensed under the laws of that jurisdiction. No person has been authorized to give any information or to make any representation on behalf of the Purchaser (which is an affiliate of the General Partner) not contained in this Offer to Purchase or in the Assignment of Partnership Interest and, if given or made, such information or representation must not be relied upon as having been authorized. The Purchaser (which is an affiliate of the General Partner), IPLP, IPT and Insignia have filed with the Commission a Tender Offer Statement on Schedule 14D-1, pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional information with respect to the Offer, and may file amendments thereto. The Schedule 14D-1 and any amendments thereto, including exhibits, may be inspected and copies may be obtained at the same places and in the same manner as set forth in Section 9 (except that they will not be available at the regional offices of the Commission). COOPER RIVER PROPERTIES, L.L.C. JULY 30, 1998 31 SCHEDULE I INFORMATION REGARDING THE MANAGERS OF THE PURCHASER Set forth in the table below are the name and the present principal occupations or employment and the name, principal business and address of any corporation or other organization in which such occupation or employment is conducted, and the five-year employment history of each of the managers of the Purchaser. Each person identified below is employed by Insignia and is a United States citizen. The principal business address of the Purchaser and, unless otherwise indicated, the business address of each person identified below, is One Insignia Financial Plaza, Greenville, South Carolina 29602. PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME FIVE-YEAR EMPLOYMENT HISTORY - ---- ---------------------------- Jeffrey P. Cohen Jeffrey P. Cohen has been a Manager of the 375 Park Avenue Purchaser since its inception in July 1998. For Suite 3401 additional information regarding Mr. Cohen, see New York, NY 10152 Schedule II. Adam B. Gilbert Adam B. Gilbert has been a Manager of the 200 Park Avenue Purchaser since July 1998. For additional New York, NY 10166 information regarding Mr. Gilbert, see Schedule III. Ronald Uretta Ronald Uretta has been a Manager of the Purchaser since its inception in July 1998. For additional information regarding Mr. Uretta, see Schedules II and III. S-1 SCHEDULE II INFORMATION REGARDING THE TRUSTEES AND EXECUTIVE OFFICERS OF IPT Set forth in the table below are the name and the present principal occupations or employment and the name, principal business and address of any corporation or other organization in which such occupation or employment is conducted, and the five-year employment history of each of the trustees and executive officers of IPT. Each person identified below is employed by Insignia and is a United States citizen. The principal business address of IPT and, unless otherwise indicated, the business address of each person identified below, is One Insignia Financial Plaza, Greenville, South Carolina 29602. Trustees are identified by an asterisk. PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME FIVE-YEAR EMPLOYMENT HISTORY - ---- ---------------------------- Andrew L. Farkas* Andrew L. Farkas has served as a Trustee of IPT 375 Park Avenue and as Chairman of the Board of Trustees and Chief Suite 3401 Executive Officer of IPT since December 1996. For New York, NY 10152 additional information regarding Mr. Farkas, see Schedule III. James A. Aston* James A. Aston has served as a Trustee of IPT since its inception in May 1996, and has served as President and Director of IPT since December 1996. For additional information regarding Mr. Aston, see Schedule III. Frank M. Garrison* Frank M. Garrison has served as a Trustee of IPT 102 Woodmont Boulevard since December 1996. Mr. Garrison has also served Suite 400 as an Executive Managing Director of IPT since Nashville, TN 37205 December 1996. For additional information regarding Mr. Garrison, see Schedule III. Jeffrey P. Cohen Jeffrey P. Cohen has served as a Senior Vice 375 Park Avenue President of IPT since August 1997, and has served Suite 3401 as Secretary of IPT since January 1998. From June New York, NY 10152 until August 1997, Mr. Cohen served as a Vice President of IPT. Since April 1997, Mr. Cohen's principal occupation has been to serve as a Senior Vice President -- Investment Banking of Insignia. Prior to April 1997, Mr. Cohen's principal occupation was as an attorney with the law firm of Rogers & Wells, New York, New York. William D. Falls William D. Falls has served as the Controller of IPT since August 1997. Since April 1995, Mr. Falls' principal occupation has been to serve as an accountant with Insignia. Prior to April 1995, Mr. Falls' principal occupation was as a senior auditor with the accounting firm of Ernst & Young LLP. William H. Jarrard, Jr. William H. Jarrard, Jr. has served as a Senior Vice President of IPT since August 1997, and served as Vice President and Director of Operations of IPT from December 1996 until August 1997. Mr. Jarrard's principal employment has been with Insignia for more than the past five years. From January 1994 to September 1997, Mr. Jarrard served as Managing Director-- Partnership Administration of Insignia. S-2 PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME FIVE-YEAR EMPLOYMENT HISTORY - ---- ---------------------------- Ronald Uretta Ronald Uretta has served as Vice President and Treasurer of IPT since December 1996. Mr. Uretta served as a Vice President of IPT from December 1996 until August 1997 and as Chief Financial Officer of IPT from May 1996 until December 1996. For additional information regarding Mr. Uretta, see Schedule III. Carroll D. Vinson Carroll D. Vinson has served as Chief Operating Officer of IPT since May 1997. Since August 1994, Mr. Vinson's principal occupation has been to serve as President of the various corporate general partners of partnerships controlled by Metropolitan Asset Enhancement, L.P., which is an affiliate of Insignia. S-3 SCHEDULE III INFORMATION REGARDING THE DIRECTORS AND EXECUTIVE OFFICERS OF INSIGNIA Set forth in the table below are the name and the present principal occupations or employment and the name, principal business and address of any corporation or other organization in which such occupation or employment is conducted, and the five-year employment history of each of the directors and executive officers of Insignia. Unless otherwise indicated, each person identified below is employed by Insignia and is a United States citizen. The principal business address of Insignia and, unless otherwise indicated, the business address of each person identified below, is One Insignia Financial Plaza, Greenville, South Carolina 29602. Directors are identified by an asterisk. PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME FIVE-YEAR EMPLOYMENT HISTORY - ---- ---------------------------- Andrew L. Farkas* Andrew L. Farkas has been a Director of Insignia 375 Park Avenue since its inception in July 1990. Mr. Farkas has Suite 3401 been Chairman and Chief Executive Officer of New York, NY 10152 Insignia since January 1991 and President since May 1995. Mr. Farkas has also been President of Metropolitan Asset Group, Ltd. ("MAG"), a real estate investment banking firm, since 1983. Robert J. Denison* Robert J. Denison has been a Director of Insignia 1212 North Summit Drive since May 1996. For more than the past five years, Santa Fe, NM 87501 Mr. Denison's principal occupation has been as a General Partner of First Security Company II, L.P., an investment advisory firm. Robin L. Farkas* Robin L. Farkas has been a Director of Insignia 730 Park Avenue since August 1993. Mr. Farkas is the retired New York, NY 10021 Chairman of the Board and Chief Executive Officer of Alexander's Inc., a real estate company. He also serves as a director of Refac Technology Development Corporation, Noodle Kiddoodle, and Containerways International Ltd. Robert G. Koen* Robert G. Koen has been a Director of Insignia 125 West 55th Street since August 1993. Since February 1996, Mr. Koen New York, NY 10019 has been a partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, which represents Insignia and certain of its affiliates from time to time. From January 1991 to February 1996, Mr. Koen was a partner in the law firm LeBoeuf, Lamb, Greene & MacRae. Michael I. Lipstein* Michael I. Lipstein has been a Director of 110 East 59th Street Insignia since August 1993. For more than the past New York, NY 10022 five years, Mr. Lipstein's principal occupation has been as a self-employed consultant in the real estate business, including ownership, management and lending. James A. Aston James A. Aston's principal employment has been with Insignia for more than the past five years. Mr. Aston currently serves as Chief Financial Officer of Insignia (since August 1996), with the Office of the Chairman (since July 1994) and Executive Managing Director of Investment Banking of Insignia (since January 1991). Joseph T. Aveni Joseph T. Aveni's principal employment has been 6000 Rockside Woods Blvd. with Realty One, Inc., a wholly-owned subsidiary Cleveland, OH 44131 of Insignia ("Realty One"), for more than the past five years. Mr. Aveni currently serves as Chairman and Chief Executive Officer of Realty One (since October 1997). S-4 PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME FIVE-YEAR EMPLOYMENT HISTORY - ---- ---------------------------- Anthony M. Ciepiel Mr. Ciepiel currently serves as a Director and 6000 Rockside Woods Blvd. Chief Operating Officer of Realty One (since Cleveland, OH 44131 October 1997). From 1994 to 1997, Mr. Ciepiel was the President of Realty One. Prior to 1994, Mr. Ciepiel was the Chief Financial Officer and Executive Vice President of Griswold, Inc., a full service advertising agency. Hugh V.A. Ellingham Hugh V.A. Ellingham's principal employment has Berkeley Square House been with Richard Ellis for more than the past London W1X 6AN five years. Mr. Ellingham currently serves as a England Managing Director of Insignia for Richard Ellis (since Insignia's acquisition of Richard Ellis in 1998) and has been a director of Richard Ellis since its inception in 1997. Mr. Ellingham is a citizen of the United Kingdom. Albert J. Frazia Albert Frazia has been a Senior Vice President -- Human Resources of Insignia since August 1997. Prior to August 1997, Mr. Frazia's principal employment for more than the prior five years was as Director -- Human Resources of E&Y Kenneth Leventhal Real Estate Group, New York, New York. Alan C. Froggatt Alan C. Froggatt's principal employment has been Berkeley Square House with Richard Ellis for more than the past five London W1X 6AN years. Mr. Froggatt currently serves as Chief England Executive Officer of Richard Ellis (since Insignia's acquisition of Richard Ellis in 1998). Mr. Froggatt is a citizen of the United Kingdom. Frank M. Garrison Frank M. Garrison's principal employment has been 102 Woodmont Boulevard with Insignia for more than the past five years. Suite 400 Mr. Garrison currently serves as an Executive Nashville, TN 37205 Managing Director of Insignia (since July 1994) and as President of Insignia Financial Services, a division of Insignia (since July 1994). Adam B. Gilbert Adam B. Gilbert has been General Counsel and 200 Park Avenue Secretary of Insignia since March 1998. Prior to New York, NY 10166 that time, Mr. Gilbert's principal occupation was as a partner with the law firm of Nixon, Hargrave, Devans & Doyle, LLP, New York, New York. Jeffrey L. Goldberg Jeffrey L. Goldberg's principal employment has 200 Park Avenue been with Insignia for more than the past five New York, NY 10166 years. Mr. Goldberg currently serves as a Managing Director -- Investment Banking of Insignia (since July 1994). Edward S. Gordon Edward S. Gordon has been with the Office of the 200 Park Avenue Chairman of Insignia and has been Chairman of New York, NY 10166 Insignia/ESG, Inc. since July 1996. Prior to July 1996, Mr. Gordon's principal employment for more than the prior five years was as a founder and Chairman of Edward S. Gordon Company, Incorporated ("ESG"), a commercial property management and brokerage firm located in New York, New York that was acquired by Insignia in June 1996. Albert H. Gossett Albert H. Gossett's principal employment has been with Insignia for more than the past five years. Mr. Gossett currently serves as a Senior Vice President of Insignia (since July 1994) and as Chief Information Officer of Insignia (since January 1991). S-5 PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME FIVE-YEAR EMPLOYMENT HISTORY - ---- ---------------------------- Andrew J.M. Huntley Andrew Huntley's principal employment has been Berkeley Square House with Richard Ellis Group Limited, a wholly-owned London W1X 6AN U.K. subsidiary of Insignia ("Richard Ellis"), for England more than the past five years. Mr. Huntley currently serves as Chairman of Richard Ellis (since Insignia's acquisition of Richard Ellis in 1998). Mr. Huntley is a citizen of the United Kingdom. Neil Kreisel Neil Kreisel has been an Executive Managing 909 Third Avenue Director of Insignia since September 1995 and New York, NY 10022 President of Insignia Residential Group since September 1997. Mr. Kreisel has also served as President of Insignia Management Services -- New York, Inc., a subsidiary of Insignia, since September 1995. Prior to September 1995, Mr. Kreisel's principal occupation was to serve as President and Chief Executive Officer of Kreisel Company, Inc., a residential property management firm located in New York, New York which Insignia acquired in September 1995. Martha Long Martha Long has been a Senior Vice President -- Finance of Insignia since January 1997 and Controller of Insignia since June 1994. Prior to June 1994, Ms. Long was Senior Vice President and Controller of The First Savings Bank, FSB located in Greenville, South Carolina. Thomas R. Shuler Thomas R. Shuler's principal employment has been with Insignia for more than the past five years. Mr. Shuler currently serves as Chief Operating Officer of Insignia Residential Group (since January 1997). Stephen B. Siegel Stephen B. Siegel has been a Managing Director of 200 Park Avenue Insignia since June 1996, President of Insignia New York, NY 10166 Commercial Group since January 1997 and President of Insignia/ESG, Inc. since June 1996. From February 1992 until July 1996, Mr. Siegel's principal employment was as President of ESG. Mr. Siegel currently serves as a Director of Liberty Property Trust and Tower Realty, Inc. Ronald Uretta Ronald Uretta's principal employment has been with Insignia for more than the past five years. Mr. Uretta currently serves as Chief Operating Officer (since August 1996) and Treasurer (since January 1992) of Insignia. Mr. Uretta has also served as the Chief Financial Officer and Controller of MAG since September 1990. S-6 SCHEDULE IV IPT PARTNERSHIPS Consolidated Capital Growth Fund Consolidated Capital Institutional Properties Consolidated Capital Institutional Properties/2 Consolidated Capital Institutional Properties/3 Consolidated Capital Properties III Consolidated Capital Properties IV Consolidated Capital Properties V Consolidated Capital Properties VI Johnstown/Consolidated Income Partners Multi-Benefit Realty Fund 87-1 Shelter Properties I Limited Partnership Shelter Properties II Limited Partnership Shelter Properties III Limited Partnership Shelter Properties IV Limited Partnership Shelter Properties V Limited Partnership Shelter Properties VI Limited Partnership Shelter Properties VII Limited Partnership National Property Investors III National Property Investors 4 National Property Investors 5 National Property Investors 6 National Property Investors 7 National Property Investors 8 Century Properties Fund XIV Century Properties Fund XV Century Properties Fund XVI Century Properties Fund XVII Century Properties Fund XVIII Century Properties Fund XIX Century Properties Growth Fund XXII Fox Strategic Housing Income Partners Davidson Growth Plus, L.P. Davidson Diversified Real Estate II, L.P. Davidson Income Real Estate, L.P. HCW Pension Real Estate Fund Angeles Income Properties, Ltd. II Angeles Income Properties, Ltd. IV Angeles Income Properties, Ltd. 6 Angeles Opportunity Properties, Ltd. Angeles Partners IX Angeles Partners XII S-7 Manually signed facsimile copies of the Assignment of Partnership Interest will be accepted. The Assignment of Partnership Interest and any other required documents should be sent or delivered by each Limited Partner or such Limited Partner's broker, dealer, bank, trust company or other nominee to the Depositary as set forth below. The Depositary for the Offer is: HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Facsimile: To Confirm: By Hand/Overnight Delivery: Wall Street Station (212) 701-7636 (212) 701-7624 Wall Street Plaza P.O. Box 1023 88 Pine Street, 19th Floor New York, New York 10268-1023 New York, New York 10005
Questions and requests for assistance or for additional copies of this Offer to Purchase and the Assignment of Partnership Interest may be directed to the Information Agent at its telephone number and address listed below. You may also contact your broker, dealer, bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: BEACON HILL PARTNERS, INC. 90 Broad Street 20th Floor New York, New York 10004 (800) 854-9486 (Toll Free) (212) 843-8500 (Call Collect) EX-99.(A)(2) 3 ASSIGNMENT OF PARTNERSHIP INTEREST AND RELATED INSTRUCTIONS ASSIGNMENT OF PARTNERSHIP INTEREST FOR THE TENDER OF UNITS OF LIMITED PARTNERSHIP INTEREST IN CONSOLIDATED CAPITAL PROPERTIES V PURSUANT TO THE OFFER TO PURCHASE DATED JULY 30, 1998 - ------------------------------------------------------------------------------- THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK TIME, ON AUGUST 26, 1998 UNLESS THE OFFER IS EXTENDED - -------------------------------------------------------------------------------
The Depositary for the Offer is: HARRIS TRUST COMPANY OF NEW YORK By Mail: By Facsimile: To Confirm: By Hand/Overnight Delivery: Wall Street Station (212) 701-7636 (212) 701-7624 Receive Window P.O. Box 1023 Wall Street Plaza New York, New York 10268-1023 88 Pine Street, 19th Floor New York, New York 10005
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN COMPLETING THIS ASSIGNMENT OF PARTNERSHIP INTEREST, PLEASE CALL OUR INFORMATION AGENT, BEACON HILL PARTNERS, TOLL FREE AT (800) 854-9486. DELIVERY OF THIS ASSIGNMENT OF PARTNERSHIP INTEREST (OR A FACSIMILE COPY) OR ANY OTHER REQUIRED DOCUMENTS TO AN ADDRESS OR FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE VALID DELIVERY. PLEASE CAREFULLY READ THE ACCOMPANYING INSTRUCTIONS Ladies and Gentlemen: The undersigned hereby tenders to Cooper River Properties, L.L.C., a Delaware limited liability company (the "Purchaser"), the number of the undersigned's units of limited partnership interest ("Units") in Consolidated Capital Properties V, a California limited partnership (the "Partnership"), specified below, at a price of $33 per Unit (the "Purchase Price"), net to the seller in cash, upon the terms and subject to the conditions set forth in the offer to purchase dated July 30, 1998 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Assignment of Partnership Interest (which, together with any supplements or amendments, collectively constitute the "Offer"). The undersigned understands and agrees that the Purchase Price will automatically be reduced by the aggregate amount of distributions per Unit, if any, made by the Partnership on or after July 30, 1998 and prior to the date on which the Purchaser pays for the Units purchased pursuant to the Offer. Holders of Units ("Limited Partners") who tender their Units will not be obligated to pay any commissions or Partnership transfer fees, which commissions and Partnership transfer fees, if any, will be borne by the Purchaser. The Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates, the right to purchase Units tendered pursuant to the Offer. Subject to and effective upon acceptance for payment of and payment for the Units tendered hereby, the undersigned hereby sells, assigns and transfers to or upon the order of the Purchaser all right, title and interest in and to all of the Units tendered hereby. The undersigned understands that upon acceptance for payment of and payment for the tendered Units, the Purchaser will be entitled to seek admission to the Partnership as a substituted Limited Partner in substitution for the undersigned as to all the tendered Units. The undersigned irrevocably appoints the Purchaser and its managers and designees as the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to exercise all voting and other rights with respect to the Units tendered by the undersigned and purchased by the Purchaser. Such power of attorney and proxy shall be considered coupled with an interest in the tendered Units and is irrevocable. When the Units tendered hereby are accepted for payment pursuant to the Offer, all prior proxies and powers given by the undersigned with respect to the Units will, without further action, be revoked, and no subsequent proxies or powers may be given (and if given will not be effective). The Purchaser and its managers and designees will, with respect to the Units, be empowered to exercise all voting and other rights of the undersigned as they in their sole discretion may deem proper, whether at any meeting of the Partnership's Limited Partners, by written consent or otherwise, subject to the restrictions in the Limited Partnership Agreement of the Partnership. The foregoing proxy and power may be exercised by the Purchaser or any of the other persons referred to above acting alone. In addition to and without limiting the generality of the foregoing, the undersigned hereby irrevocably (a) appoints the Purchaser and its managers and designees (each an "Agent") as the undersigned's attorneys-in-fact, each with full power of substitution, with an irrevocable instruction to each Agent to execute all or any instrument of transfer and/or other documents in the Agent's discretion in relation to the Units tendered hereby and accepted for payment by the Purchaser, and to do all such other acts and things as may in the opinion of the Agent be necessary or expedient for the purpose of, or in connection with, the undersigned's acceptance of the Offer and to vest in the Purchaser, or as it may direct, those Units, effective when, and only to the extent that, the Purchaser accepts the tendered Units for payment; (b) authorizes and requests the Partnership and general partner (the "General Partner") to take any and all acts as may be required to effect the transfer of the undersigned's Units to the Purchaser (or its designee) and admit the Purchaser (or its designee) as a substituted Limited Partner in the Partnership; (c) assigns to the Purchaser and its assigns all of the right, title and interest of the undersigned in and to any and all distributions made by the Partnership from and after the expiration of the Offer in respect of the Units tendered by the undersigned; (d) grants to the Purchaser and its assigns the right to receive any and all distributions made by the Partnership on or after the date on which the Purchaser pays for the Units tendered by the undersigned (regardless of the record date for any such distribution), and to receive all benefits and otherwise exercise all rights of beneficial ownership of such Units; (e) empowers the Purchaser and the Agent to execute and deliver to the General Partner a change of address form instructing the General Partner to send any and all future distributions to the address specified in the form, and to endorse any check payable to or upon the order of such Limited Partner representing a distribution to which the Purchaser is entitled pursuant to the terms of the Offer, in each case in the name and on behalf of the tendering Limited Partner; and (f) agrees not to exercise any rights pertaining to the Units without the prior consent of the Purchaser. The undersigned hereby represents and warrants that the undersigned owns the Units tendered hereby and has full power and authority to validly tender, sell, assign and transfer the Units tendered hereby and that when the same are purchased by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and such Units will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Units tendered hereby. The undersigned understands that a tender of Units pursuant to the procedures described in the Offer to Purchase and in the Instructions to this Assignment of Partnership Interest will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. THIS TENDER IS IRREVOCABLE, EXCEPT THAT UNITS TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AS DESCRIBED IN SECTION 4 OF THE OFFER TO PURCHASE. PLEASE COMPLETE ALL SHADED AREAS SIGN HERE TO TENDER YOUR UNITS BOX A - ------------------------------------------------------------------------------- The undersigned hereby tenders the number of Units of Consolidated Capital Institutional Properties specified below pursuant to the terms of the Offer. The undersigned hereby certifies, under penalties of perjury, that the information and representations provided in Boxes A, B and C of this Assignment of Partnership Interest, which have been duly completed by the undersigned, are true and correct as of the date hereof. X ------------------------------------------------ X ------------------------------------------------ SIGNATURE(S) OF LIMITED PARTNER (A) DATE (B): ---------------------------------------- (MUST BE SIGNED BY REGISTERED LIMITED PARTNER EXACTLY AS NAME(S) APPEAR(S) IN THE PARTNERSHIP'S RECORDS. IF SIGNATURE IS BY AN OFFICER OF A CORPORATION, ATTORNEY-IN-FACT, AGENT, EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN OR OTHER PERSON(S) ACTING IN FIDUCIARY OR REPRESENTATIVE CAPACITY, PLEASE COMPLETE THE LINE CAPTIONED "CAPACITY (FULL TITLE)" AND SEE INSTRUCTION 5.) PRINT NAME(S) (H): ------------------------------- - ------------------------------------------------- CAPACITY (FULL TITLE) (I): ----------------------- ADDRESS (C): ------------------------------------- - ------------------------------------------------- (INCLUDE ZIP CODE) (THE ADDRESS PROVIDED ABOVE MUST BE THE REGISTERED ADDRESS OF THE LIMITED PARTNER) - ------------------------------- ----------------------------------- AREA CODE AND SOCIAL SECURITY NUMBER TELEPHONE NUMBER (D) OR TAXPAYER IDENTIFICATION (E) NUMBER OF NUMBER OF UNITS TENDERED (F): UNITS OWNED (G): ------------ ------------ (If no indication is given, all Units owned of record by the Limited Partner will be deemed tendered.) - ------------------------------------------------------------------------------- GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS - SECTION 1) AUTHORIZED SIGNATURE: --------------------------------------- NAME: ------------------------------------------------------- DATE: ------------------------------------------------------- NAME OF FIRM: ----------------------------------------------- ADDRESS: ---------------------------------------------------- AREA CODE AND TEL. NO.: ------------------------------------- - -------------------------------------------------------------------------------
IMPORTANT! BOX B LIMITED PARTNERS MUST ALSO COMPLETE BOTH BOX B AND BOX C BELOW. - ----------------------------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART 1-- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND ---------------------------------- Form W-9 CERTIFY BY SIGNING AND DATING BELOW Social Security Number(s) or Department of Employer Identification Number (A) the Treasury Internal Revenue Service - ----------------------------------------------------------------------------------------------------------------------------------- PAYER'S PART 2 -- Certification -- Under penalties of perjury, I certify that: (1) The number shown on this form is my REQUEST FOR correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and (2) I am not TAXPAYER subject to back-up withholding either because I have not been notified by the Internal Revenue Service ("IRS") IDENTIFICATION that I am subject to back-up withholding as a result of failure to report all interest or dividends, or the NUMBER (TIN) IRS has notified me that I am no longer subject to back-up withholding. -------------------------------------------------------------------------------------------------------------- Certification Instructions -- You must cross out item (2) above if you have PART 3 -- been notified by the IRS that you are subject to back-up withholding because AWAITING TIN [ ] of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to back-up withholding you received another notification from the IRS that you are no longer subject to back-up withholding, do not cross out item (2). SIGNATURE (B): DATE (C): - -----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER *(TO BE COMPLETED ONLY IF THE BOX IN PART 3 ABOVE IS CHECKED) I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number within sixty days, 31 percent of all reportable payments made to me thereafter will be withheld until I provide a number. ---------------------------------- ---------------------------------- SIGNATURE SIGNATURE - ------------------------------------------------------------------------------- BOX C - ------------------------------------------------------------------------------- FIRPTA AFFIDAVIT -- CERTIFICATE OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the Purchaser that withholding of tax is not required upon this disposition of a U.S. real property interest, the undersigned hereby certifies the following on behalf of the tendering Limited Partner named above: 1. The Limited Partner, if an individual, is not a nonresident alien for purposes of U.S. income taxation, and if not an individual, is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); 2. The Limited Partner's Social Security Number (for individuals) or Employer Identification Number (for non-individuals) is (D): ; and 3. The Limited Partner's address is (E): -------------------------------------. I understand that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement I have made here could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete. - ---------------------------------- ---------------------------------- Signature (F) Signature Title: Title: ---------------------------- ---------------------------- - ------------------------------------------------------------------------------- INSTRUCTIONS TO ASSIGNMENT OF PARTNERSHIP INTEREST FOR CONSOLIDATED CAPITAL PROPERTIES V FORMING PART OF TERMS AND CONDITIONS OF THE OFFER - ------------------------------------------------------------------------------- IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE COMPLETING THE ASSIGNMENT OF PARTNERSHIP INTEREST, PLEASE CALL BEACON HILL PARTNERS TOLL FREE AT (800) 854-9486 OR COLLECT AT (212) 843-8500 - ------------------------------------------------------------------------------- 1. GUARANTEE OF SIGNATURES. If the Assignment of Partnership Interest is signed by the registered holder of the Units and payment is to be made directly to that holder, then no signature guarantee is required on the Assignment of Partnership Interest. Similarly, if the Units are tendered for the account of a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank, savings bank, credit union, savings and loan association or trust company having an office, branch or agency in the United States (each an "Eligible Institution"), no signature guarantee is required on the Assignment of Partnership Interest. HOWEVER, IN ALL OTHER CASES, ALL SIGNATURES ON THE ASSIGNMENT OF PARTNERSHIP INTEREST MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. A notarization is not the same thing as a signature guarantee, and a notarization of the Assignment of Partnership Interest will not be sufficient. IN THE MAJORITY OF CASES, THE LOCAL BANK AT WHICH YOU DO YOUR DAY TO DAY BANKING IS AN ELIGIBLE INSTITUTION AND WILL BE ABLE TO PROVIDE YOU WITH THE REQUIRED MEDALLION GUARANTEE. 2. DELIVERY OF ASSIGNMENT OF PARTNERSHIP INTEREST. The Assignment of Partnership Interest is to be completed by all Limited Partners who wish to tender Units in response to the Offer. For a Limited Partner validly to tender Units, a properly completed and duly executed Assignment of Partnership Interest (or a facsimile copy), along with the required signature guarantees by an Eligible Institution and any other required documents, must be received by the Depositary at one of its addresses set forth on the Assignment of Partnership Interest on or prior to the Expiration Date (as defined in the Offer to Purchase). THE METHOD OF DELIVERY OF THE ASSIGNMENT OF PARTNERSHIP INTEREST AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING LIMITED PARTNER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted, and no fractional Units will be purchased (except from a Limited Partner who is tendering all of the Units owned by that Limited Partner). All tendering Limited Partners, by execution of the Assignment of Partnership Interest, waive any right to receive any notice of the acceptance of their Units for payment. 3. INADEQUATE SPACE. If the space provided herein is inadequate, additional information may be provided on a separate signed schedule attached hereto. 4. MINIMUM TENDERS. A Limited Partner may tender any or all of his or her Units; provided, however, that because of restrictions in the Partnership's Limited Partnership Agreement, a partial tender of Units must be for a minimum of twelve Units (other than Limited Partners who are residents of Missouri, who must tender a minimum of twenty Units). Tenders of fractional Units will be permitted only by a Limited Partner who is tendering all Units owned by that Limited Partner. 5. SIGNATURES ON ASSIGNMENT OF PARTNERSHIP INTEREST. If the Assignment of Partnership Interest is signed by the registered Limited Partner(s), the signature(s) must correspond exactly with the name(s) as shown on the records of the Partnership, without alteration, enlargement or any change whatsoever. If any of the Units tendered hereby are held of record by two or more joint Limited Partners, each such Limited Partner must sign the Assignment of Partnership Interest. If the Assignment of Partnership Interest is signed by trustees, executors, administrators, guardians, attorneys-in-fact, agents, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Depositary of their authority to so act must be submitted. 6. WAIVER OF CONDITIONS. The Purchaser expressly reserves the absolute right, in its sole discretion, to waive any of the specified conditions of the Offer, in whole or in part, in the case of any Units tendered. 7. REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions or requests for assistance may be directed to Beacon Hill Partners, the Information Agent, at its address and telephone number set forth on the back cover of the Offer to Purchase. Copies of the Offer to Purchase and the Assignment of Partnership Interest may be obtained from the Information Agent. (Continued on Reverse Side) 8. SUBSTITUTE FORM W-9. Each tendering Limited Partner is required to provide the Depositary with a correct taxpayer identification number ("TIN"), generally the Limited Partner's social security or federal employer's identification number, on Substitute Form W-9, which is provided under "Important Tax Information" below. You must cross out item (2) in the Certification box on Substitute Form W-9 if you are subject to back-up withholding. Failure to provide the information on the form may subject the tendering Limited Partner to 31% federal income tax withholding on the payments made to the Limited Partner with respect to Units purchased pursuant to the Offer. The box in Part 3 of the form may be checked if the tendering Limited Partner has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked and the Depositary is not provided with a TIN within sixty (60) days, thereafter the Depositary will withhold 31% on all such payments of the Purchase Price until a TIN is provided to the Depositary. 9. FIRPTA AFFIDAVIT. To avoid potential withholding of tax pursuant to Section 1445 of the Internal Revenue Code in an amount equal to 10% of the purchase price for Units purchased pursuant to the Offer, plus the amount of any liabilities of the Partnership allocable to such Units, each Limited Partner who or which is a United States person must complete the FIRPTA Affidavit contained in the Assignment of Partnership Interest stating, under penalties of perjury, such Limited Partner's TIN and address, and that such Limited Partner is not a foreign person. Tax withheld under Section 1445 of the Internal Revenue Code is not an additional tax. If withholding results in an overpayment of tax, a refund may be obtained from the IRS. IMPORTANT: THE ASSIGNMENT OF PARTNERSHIP INTEREST (OR A FACSIMILE COPY) (TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE. ---------------- IMPORTANT TAX INFORMATION To prevent backup withholding on payments made to a Limited Partner or other payee with respect to Units purchased pursuant to the Offer, the Limited Partner is required to notify the Depositary of the Units of the Limited Partner's correct TIN by completing the form below, certifying that the TIN provided on Substitute Form W-9 is correct (or that such Limited Partner is awaiting a TIN) and that (1) the Limited Partner has not been notified by the Internal Revenue Service that the Limited Partner is subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified the Limited Partner that the Limited Partner is no longer subject to backup withholding. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Limited Partner. Backup withholding is not an additional tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. The Limited Partner is required to give the Depositary the TIN (e.g., social security number or employer identification number) of the record owner of the Units. If the Units are in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. Certain Limited Partners (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, that Limited Partner must submit to the Depositary a properly completed Internal Revenue Service Form W-8, signed under penalties of perjury, attesting to that Limited Partner's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional institutions. ---------------- INDIVIDUAL RETIREMENT ACCOUNT (IRAS) PLEASE NOTE THAT A TENDERING BENEFICIAL OWNER OF UNITS WHOSE UNITS ARE OWNED OF RECORD BY AN INDIVIDUAL RETIREMENT ACCOUNT (IRA) OR OTHER QUALIFIED PLAN WILL NOT RECEIVE DIRECT PAYMENT OF THE PURCHASE PRICE, RATHER, PAYMENT WILL BE MADE TO THE CUSTODIAN OF SUCH ACCOUNT OR PLAN. IF THE UNITS ARE HELD IN AN IRA ACCOUNT, THE CUSTODIAN OF THE ACCOUNT MUST SIGN THE ASSIGNMENT OF PARTNERSHIP INTEREST. EX-99.(A)(3) 4 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER--Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer. - --------------------------------------------------------------------------- GIVE THE TAXPAYER IDENTIFICATION FOR THIS TYPE OF ACCOUNT: NUMBER OF-- - --------------------------------------------------------------------------- 1. An individual's account The individual 2. Two or more individuals The actual owner of (joint account) the account or, if combined funds, the first individual on the account 3. Husband and wife The actual owner of (joint account) the account or, if joint funds, either person1 4. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 5. Adult and minor (joint The adult or, if the account) minor is the only contributor, the minor(1) 6. Account in the name of The ward, minor, or guardian or committee for a incompetent(3) designated ward, minor, or incompetent person(3) 7. a. The usual revocable The grantor-trustee(1) savings trust account (grantor is also trustee) b. So-called trust account that The actual owner(1) is not a legal or valid trust under State law 8. Sole proprietorship account The owner(4) - --------------------------------------------------------------------------- GIVE THE TAXPAYER IDENTIFICATION FOR THIS TYPE OF ACCOUNT: NUMBER OF-- - --------------------------------------------------------------------------- 9. A valid trust, estate or The legal entity (Do not pension trust furnish the identifyin number of the personal representative or truste unless the legal entity itself is not designated in th account title.)(5) 10. Corporate account The corporation 11. Religious, charitable, or The organization educational organization account 12. Partnership account held in The partnership the name of the business 13. Association, club, or other The organization tax-exempt organization 14. A broker or registered The broker or nominee nomine 15. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments - ------------------------------------------------------------------------------- (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number or employer identification number. (4) Show your individual name. You may also enter your business name. You may use your social security number or employer identification number. (5) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you do not have a taxpayer identification number or you do not know your number, obtain Form SS-5, Application for a Social Security Number Card (for individuals), or Form SS-4, Application for Employer Identification Number (for businesses and all other entities), at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: - - A corporation. - - A financial institution. - - An organization exempt from tax under section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), or an individual retirement plan. - - The United States or any agency or instrumentality thereof. - - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - - An international organization or any agency or instrumentality thereof. - - A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. - - A real estate investment trust. - - A common trust fund operated by a bank under section 584(a) of the Code. - - An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). - - An entity registered at all times under the Investment Company Act of 1940. - - A foreign central bank of issue. - - A futures commission merchant registered with the Commodity Futures Trading Commission. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - - Payments to nonresident aliens subject to withholding under section 1441 of the Code. - - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - - Payments of patronage dividends where the amount received is not paid in money. - - Payments made by certain foreign organizations. - - Payments made to an appropriate nominee. - - Section 404(k) payments made by an ESOP. Payments of interest not generally subject to backup withholding include the following: - - Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - - Payments of tax-exempt interest (including exempt-interest dividends under section 852 of the Code). - - Payments described in section 6049(b)(5) of the Code to nonresident aliens. - - Payments on tax-free covenant bonds under section 1451 of the Code. - - Payments made by certain foreign organizations. - - Payments of mortgage interest to you. - - Payments made to an appropriate nominee. Exempt payees described above should file substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS). Certain payments other than interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend, interest, or other payments to give correct taxpayer identification numbers to payers who must report the payments to the IRS. The IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file a tax return. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a correct taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail to furnish your correct taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS--If you fail to include any portion of an includible payment for interest, dividends, or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a penalty of 20% on any portion of an underpayment attributable to that failure unless there is clear and convincing evidence to the contrary. (3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you make a false statement with no reasonable basis that results in no imposition of backup withholding, you are subject to a penalty of $500. (4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE EX-99.(A)(4) 5 COVER LETTER FROM THE PURCHASER TO THE LIMITED PARTNERS OF THE PARTNERSHIP Exhibit (a)(4) COOPER RIVER PROPERTIES, L.L.C One Insignia Financial Plaza Greenville, South Carolina 29602 July 30, 1998 To: The Limited Partners of Consolidated Capital Properties V Enclosed for your review and consideration are documents relating to an offer by Cooper River Properties, L.L.C. ("Cooper River") to purchase your units of limited partnership interest in Consolidated Capital Properties V for $33 in cash per unit. This offer will expire midnight, New York City time on August 26, 1998 (unless extended by Cooper River). Cooper River is an affiliate of the General Partner of the Partnership. THE ENCLOSED DOCUMENTS CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY BEFORE YOU DECIDE WHETHER TO SELL YOUR UNITS TO COOPER RIVER PURSUANT TO THIS OFFER. If you have any questions concerning the terms of the offer, or need assistance in completing the forms necessary to tender your units, please contact our Information Agent, Beacon Hill Partners, at (800) 854-9486. Thank you. Sincerely, Cooper River Properties, L.L.C. EX-99.(Z)(1) 6 SUMMARIES OF APPRAISALS Consolidated Capital Properties V Summary of Appraisals (a) Aspen Ridge Apartments West Chicago, Illinois Aspen Ridge Apartments April 12, 1996 West Chicago, Illinois Page 1 SUMMARY OF SALIENT FACTS AND CONCLUSIONS PROPERTY NAME: Aspen Ridge Apartments LOCATION OF PROPERTY: 1440 South Neltnor Boulevard (Highway 59), West Chicago, DuPage County, Illinois PURPOSE OF THE APPRAISAL: To estimate the Market Value of the subject. PROPERTY RIGHTS APPRAISED: Fee Simple Estate HIGHEST AND BEST USE: As Vacant - To develop for multi-family use. As Improved - Considered to be that of the existing improvements. SITE DATA AND ZONING: The subject parcel is irregular in shape and contains approximately 12.028 acres of land zoned R-6 Multi-Family Development by the Village of West Chicago. IMPROVEMENT DATA: The subject consists of 253 units totaling 211,200 square feet of net rentable area. The structural improvements consist of 11 residential buildings and office and clubhouse buildings. Exterior finish consists of wood siding and brick veneer, pitched roofs, and concrete slab foundations. The improvements were completed in 1969. Additional amenities include a swimming pool, two tennis courts, asphalt parking areas, concrete walkways and landscaping. TENANT DATA: The Aspen Ridge Apartments cater primarily to adults and families employed in the surrounding area. Leases are typically signed for 12-month terms. The subject is 94% occupied as of the date of inspection. DATE OF VALUE ESTIMATE: March 19, 1996 Aspen Ridge Apartments April 12, 1996 West Chicago, Illinois Page 2 SUMMARY OF SALIENT FACTS AND CONCLUSIONS (Continued) SUMMARY OF STABILIZED PRO FORMA:
Totals Per Unit ------ -------- Potential Gross Income $2,050,277 $8,104 Vacancy & Credit Loss (102,514) (405) Employee discounts (16,800) (66) ---------- Effective Gross Income $1,930,963 $7,632 Operating Expenses 1,022,631 4,042 ---------- ------ Net Operating Income $ 908,332 $3,590
VALUE CONCLUSIONS The Income Capitalization Approach: $9,100,000 The Sales Comparison Approach: $8,800,000 FINAL VALUE ESTIMATE: $9,100,000 (b) Sutton Place Apartments Corpus Christi, Texas [Blake Logo] Joseph J. Blake and Associates, Inc. Real Estate Appraisers and Consultants 2121 San Jacinto Street, Suite #600 Dallas, TX 75201 Phone: (214) 988-7477 FAX: (214) 988-7495 June 5, 1996 Mr. Kenneth B. Dickey First Union National Bank of North Carolina One First Union Center, TW-8 Charlotte, North Carolina 28288-0600 Reference: Appraisal report of the Sutton Place Apartments, located at 8838 Everhart Road, City of Corpus Christi, Nueces County, Texas, 78411 Dear Mr. Dickey: In accordance with your request, we have inspected and appraised the Sutton Place Apartments referenced above. The subject is situated on a 9.731 (plus or minus) acre site that is zoned "A-1", Apartment House District and is located in the southeast quadrant of Everhart Road and Snowgoose Road in Corpus Christi, Texas. The 201-unit complex consists of 102 one-bedroom, 98 two-bedroom , and 1 three-bedroom apartment units situated in 24 walk-up, two-story, garden-style apartment buildings. The project's total net rentable area approximates 176,046 (plus or minus) square feet. The project also incorporates a leasing office, three laundry rooms, two swimming pools, a sand volleyball court, two tennis courts, 462 (plus or minus) open asphalt parking spaces, and landscaping. The improvements were reportedly constructed in 1980 and are in average condition. According to the engineering report conducted by Inspection and Valuation International, the subject suffers from an estimated $87,124 of deferred maintenance. Items listed include re-stripping the parking lot, replacing deteriorated and settled sections of asphalt pavement, concrete pavement repair, replacement of concrete sidewalk sections, recaulking of building joints, repairing wood balcony railings, and painting steel stairs and railings. A complete listing of the subject's deferred maintenance can be found in the Addenda section of the attached appraisal report. The purpose of this appraisal is to estimate the "as is" and "as cured" market values of the fee simple estate of the subject as of May 22, 1996. The property was last inspected on May 22, 1996 and our analysis has been based on information provided as of that date. The ensuing appraisal report has been prepared in conformity with and is subject to the requirements of the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute, the Uniform Standards of Professional Appraisal Practice (USPAP), as promulgated by the Appraisal Foundation, and FIRREA. The appraisal is subject to the attached Basic Assumptions and Limiting Conditions, and definition of market value. Corporate Headquarters: 1000 Woodbury Road, Suite 210, Woodbury, New York 11797 516-364-8080 Regional Offices: Boston, Chicago, Dallas, Los Angeles, Miami, New York City, San Francisco, Washington D.C., Woodbury. Mr. Kenneth B. Dickey June 5, 1996 Page 2 VALUATION ESTIMATE Therefore, in view of the pertinent facts mentioned herein, and based upon the analysis of data which has been considered in connection with this appraisal report, it is the opinion of the undersigned that the "as cured" market value of the fee simple estate of the Sutton Place Apartments, as of May 22, 1996, is: $4,800,000 FOUR MILLION EIGHT HUNDRED THOUSAND DOLLARS Additionally, we are of the opinion that the "as is" market value of the fee simple estate of the subject, as of May 22, 1996, is: $4,700,000 FOUR MILLION SEVEN HUNDRED THOUSAND DOLLARS Lastly, based on the data contained in the Marketing section of the report, the appraisers are of the opinion that the aforementioned values could be obtained within a 12-month marketing period. We invite your attention to the ensuing appraisal which documents our conclusions. If you have any questions or comments, please contact the undersigned. Respectfully submitted, JOSEPH J. BLAKE AND ASSOCIATES, INC. - ----------------------------------------------------------------------------- Arturo Singer, MAI Vice President/Regional Manager State Certified General Real Estate Appraiser No. TX-1322588-G - ----------------------------------------------------------------------------- Ronald A. Davis, Jr. Senior Associate State Certified General Real Estate Appraiser No. TX-1326758-G EXECUTIVE SUMMARY 1 - -----------------------------------------------------------------------------
Valuation Date: May 22, 1996 Property Name: Sutton Place Apartments Address: 8838 Everhart Road, Corpus Christi, Nueces County, Texas 78411 Purpose of the Appraisal: To estimate the "as is" and "as cured" market values of the fee simple estate of the subject. Site Data and Zoning: The subject's site is irregular in shape and consists of 423,884 (plus or minus) square feet or 9.731 (plus or minus) acres of land. The site is zoned "A-1", Apartment District. Based on our review of the zoning regulations, the subject appears to be a legal conforming use. Improvement Data: The improvements consist of a 201-unit apartment complex, built in 1980, with a net rentable area of 176,046 (plus or minus) square feet. Additional improvements include an office, three laundry rooms, two swimming pools, a sand volleyball court, two tennis courts, 462 (plus or minus) open asphalt parking spaces, and landscaping. As of the date of inspection the subject's improvements were in average condition. According to the engineering report conducted by Inspection and Valuation International, the subject suffers from an estimated $87,124 of deferred maintenance. Items listed include re-stripping the parking lot, replacing deteriorated and settled sections of asphalt pavement, concrete pavement repair, replacement of concrete sidewalk sections, recaulking of building joints, repairing wood balcony railings, and painting steel stairs and railings. Highest and Best Use: As Vacant -- Develop with a multi-family apartment complex. As Improved -- Existing use as multi-family apartment complex, subject to curing existing deferred maintenance.
Joseph J. Blake and Associates, Inc. Real Estate Appraisers and Consultants EXECUTIVE SUMMARY 2 - ----------------------------------------------------------------------------- MARKET VALUE ESTIMATES ESTIMATE OF "AS CURED" MARKET VALUE BY APPROACH:
Cost Approach: $4,750,000 Land: $ 750,000 Income Capitalization Approach: $4,800,000 Rental Revenue: $1,226,520 Vacancy and Collection @ 7%: (85,856) Miscellaneous Revenue: 44,220 ------------ Effective Gross Revenue: $1,184,884 Operating Expenses: (654,276) Reserves: (50,250) ------------ Net Operating Income: $ 480,357 Capitalization Rate: 10.0% Sales Comparison Approach: $4,750,000 RECONCILED VALUE ESTIMATE: $4,800,000 Value Per Unit: $ 23,881 Value Per Square Foot: $ 27.23 EGIM: 4.05x ESTIMATE OF "AS IS" MARKET VALUE BY APPROACH: Cost Approach: $4,650,000 Income Capitalization Approach: $4,700,000 Sales Comparison Approach: $4,650,000 RECONCILED VALUE ESTIMATE: $4,700,000 Value Per Unit: $ 23,383 Value Per Square Food: $ 26.70 EGIM: 3.97x Insurable Value: $4,475,000
Joseph J. Blake and Associates, Inc. Real Estate Appraisers and Consultants EX-99.(Z)(2) 7 AGREEMENT OF JOINT FILING Exhibit (z)(2) AGREEMENT OF JOINT FILING Cooper River Properties, L.L.C., Insignia Properties, L.P., Insignia Properties Trust, Insignia Financial Group, Inc. and Andrew L. Farkas hereby agree that the Amendment No. 1 to Statement on Schedule 13D to which this agreement is attached as an exhibit, and all further amendments thereto, shall be filed on behalf of each of them. This agreement is intended to satisfy the requirements of Rule 13d-1(f)(1)(iii) under the Securities Exchange Act of 1934, as amended. Dated: July 30, 1998 COOPER RIVER PROPERTIES, L.L.C. By: /s/ JEFFREY P. COHEN ------------------------------ Jeffrey P. Cohen Manager INSIGNIA PROPERTIES, L.P. By: Insignia Properties Trust, its General Partner By: /s/ JEFFREY P. COHEN ------------------------------ Jeffrey P. Cohen Senior Vice President INSIGNIA PROPERTIES TRUST By: /s/ JEFFREY P. COHEN ------------------------------ Jeffrey P. Cohen Senior Vice President INSIGNIA FINANCIAL GROUP, INC. By: /s/ FRANK M. GARRISON ------------------------------ Frank M. Garrison Executive Managing Director /s/ ANDREW L. FARKAS --------------------------------- ANDREW L. FARKAS -----END PRIVACY-ENHANCED MESSAGE-----