Fair Value Disclosures

6 Months Ended

Jun. 30, 2011

Fair Value Disclosures

Fair Value Disclosures

12. FAIR VALUE DISCLOSURES

The Partnership has determined the fair value based on a hierarchy that gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy under the accounting principle are described below:

Level 1.	Quoted prices in active markets for identical assets or liabilities.
Level 2.	Quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, and inputs other than quoted prices that are observable for the investment.
Level 3.	Unobservable inputs for which there is little, if any, market activity for the investment. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation and the use of discounted cash flow models to value the investment.

The fair value hierarchy is based on the lowest level of input that is significant to the fair value measurements. The Partnership's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

Fair Value on a Nonrecurring Basis – Vacant Phoenix, AZ Property

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following table presents the assets and liabilities carried on the balance sheet by caption and by level within the fair valuation hierarchy (as described above) as of June 30, 2011, for which a nonrecurring change in fair value has been recorded during the three month period ended June 30, 2011 for the vacant Phoenix, AZ property.

									Three Month Period Ended
	Carrying Value at June 30, 2011								June 30, 2011
	Total		Level 1		Level 2		Level 3		Total Losses
Vacant Phoenix, AZ property	$	—	$	—	$	—	$	—	$	(540,118	)

Investment property measured at fair value on a nonrecurring basis relates to land, building and improvements that were held for investment. Losses of $540,118 represent an impairment charge related to these assets recorded during the three month period ended June 30, 2011. The fair value of these assets was determined by management and incorporates management's knowledge of comparable properties, past experience and future expectations.