SC TO-T

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE TO

(Rule 14d-100)

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934

Angeles Partners XI

(Name of Subject Company (Issuer))

AIMCO Properties, L.P.
Apartment Investment and Management Company
AIMCO-GP, Inc.
Angeles Realty Corporation II

(Names of Filing Persons (Offerors))

Limited Partnership Units

(Title of Class of Securities)

None

(CUSIP Number of Class of Securities)

Martha L. Long
Apartment Investment and Management Company
55 Beattie Place
PO Box 1089
Greenville, South Carolina 29602
(864) 239-1000

(Name, Address, and Telephone Numbers of Person

Authorized to Receive Notices and Communications on Behalf of Filing Persons)

Copy to:
Jonathan L. Friedman, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, California 90071
(213) 687-5000

Calculation of Filing Fee

Transaction valuation*	Amount of filing fee
$7,487,044	$229.85

* For purposes of calculating the fee only. This amount assumes the purchase of 4,358 units of limited partnership interest of the subject partnership for $1,718.00 per unit. Based on the current fee rate of $30.70 per million, the fee is $229.85.

o Check the 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:	Filing Party:
Form or Registration No.:	Date Filed:

o Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

þ third-party tender offer subject to Rule 14d-1

o issuer tender offer subject to Rule 13e-4

o going-private transaction subject to Rule 13e-3

o amendment to Schedule 13D under Rule 13d-2

Check the following box if the filing is a final amendment reporting the results of the tender offer: o

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TABLE OF CONTENTS

	ITEM 1. SUMMARY TERM SHEET
	ITEM 2. SUBJECT COMPANY INFORMATION
	ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON
	ITEM 4. TERMS OF THE TRANSACTION
	ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
	ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
	ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
	ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
	ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED
	ITEM 10. FINANCIAL STATEMENTS
	ITEM 11. ADDITIONAL INFORMATION
	ITEM 12. EXHIBITS
	ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3
SIGNATURE
EXHIBIT INDEX
Offer to Purchase
Letter of Transmittal and Related Instructions
Letter to the Limited Partners
Appraisal

SCHEDULE TO

     This Tender Offer Statement on Schedule TO (the “Schedule TO”) relates to the offer by AIMCO Properties, L.P., a Delaware limited partnership, to purchase units of limited partnership interest (“Units”) of Angeles Partners XI, a California limited partnership (the “Partnership”), at a price of $1,718.00 per unit in cash, subject to the conditions set forth in the Offer to Purchase dated August 28, 2007 (the “Offer to Purchase”) and in the related Letter of Transmittal (the “Letter of Transmittal” and, together with the Offer to Purchase, as each may be supplemented or amended from time to time, the “Offer”). Copies of the Offer to Purchase and the Letter of Transmittal are filed with the Schedule TO as Exhibits (a)(1) and (a)(2), respectively. The item numbers and responses thereto below are in accordance with the requirements of Schedule TO. Unless defined herein, capitalized terms used and not otherwise defined herein have the respective meanings ascribed to such terms in the Offer to Purchase.

ITEM 1. SUMMARY TERM SHEET.

     The information set forth under “Summary Term Sheet” in the Offer to Purchase is incorporated herein by reference.

ITEM 2. SUBJECT COMPANY INFORMATION.

          (a) The information set forth under “The Offer — Section 14. Certain Information Concerning Your Partnership” in the Offer to Purchase is incorporated herein by reference. The Partnership’s business address is 55 Beattie Place, P.O. Box 1089, Greenville, South Carolina 29602, and its phone number is (864) 239-1000.

          (b) This Schedule TO relates to the units of limited partnership interest of Angeles Partners XI, of which 39,627 units were issued and outstanding as of June 30, 2007.

          (c) Not applicable.

ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.

(a)-(c) This Schedule TO is being filed by Apartment Investment and Management Company, a Maryland corporation (“Aimco”), AIMCO Properties, L.P., a Delaware limited partnership (“Aimco OP”), Aimco-GP, Inc., a Delaware corporation (“Aimco-GP”), and Angeles Realty Corporation II, a California corporation (“Angeles Realty”). Aimco-GP is the general partner of Aimco OP and a wholly owned subsidiary of Aimco. Angeles Realty is the general partner of the Partnership and is a wholly owned subsidiary of Aimco. The principal business of Aimco, Aimco-GP, and Aimco OP is the ownership, acquisition, development, expansion and management of multi-family apartment properties. The principal business of Angeles Realty is managing the affairs of the Partnership. The business address of Aimco, Aimco-GP and Aimco OP is 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237, and their telephone number is (303) 757-8101. The principal address of Angeles Realty is 55 Beattie Place, P.O. Box 1089, Greenville, South Carolina 29602, and its phone number is (864) 239-1000.

     The information set forth under “The Offer — Section 8. Information Concerning Us and Certain of Our Affiliates” and Annex I of the Offer to Purchase is incorporated herein by reference.

     During the last five years, none of Aimco, Aimco-GP, Aimco OP or Angeles Realty nor, to the best of their knowledge, any of the persons listed in Annex I of 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 4. TERMS OF THE TRANSACTION.

     (a) The information set forth in the Offer to Purchase and in the related Letter of Transmittal is incorporated herein by reference.

ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

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     (a) and (b) The information set forth under “Summary Term Sheet — Conflicts of Interest”; “The Offer — Section 9. Background and Reasons for the Offer” and “The Offer — Section 11. Conflicts of Interest and Transactions with Affiliates” in the Offer to Purchase is incorporated herein by reference.

ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

     (a), (c)(1)-(7) The information set forth under “The Offer — Section 9. Background and Reasons for the Offer”; “The Offer — Section 12. Future Plans of the Purchaser” and “The Offer — Section 7. Effects of the Offer; Effect on Trading Market; Registration under Section 12(g) of the Exchange Act” in the Offer to Purchase is incorporated herein by reference.

ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

     (a), (b) and (d) The information set forth under “The Offer — Section 16. Source of Funds” and “The Offer — Section 20. Fees and Expenses” in the Offer to Purchase is incorporated herein by reference.

ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

     The information set forth under “The Offer — Section 14. Certain Information Concerning Your Partnership; Ownership and Voting” in the Offer to Purchase is incorporated herein by reference.

ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

     Not applicable.

ITEM 10. FINANCIAL STATEMENTS.

          (a) Not applicable.

          (b) Not applicable.

ITEM 11. ADDITIONAL INFORMATION.

          (a) The information set forth under “The Offer — Section 19. Certain Legal Matters” in the Offer to Purchase is incorporated herein by reference.

          (b) The information set forth in the Offer to Purchase and in the related Letter of Transmittal is incorporated herein by reference.

ITEM 12. EXHIBITS.

(a)(1)	Offer to Purchase dated August 28, 2007.
(a)(2)	Letter of Transmittal and related Instructions.
(a)(3)	Letter from Aimco OP to the Limited Partners of Angeles Partners XI.
(b)(1)	Amended and Restated Secured Credit Agreement, dated as of November 2, 2004, by and among AIMCO, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 4.1 to AIMCO’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, is incorporated herein by reference).
(b)(2)	First Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of June 16, 2005, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers, and Bank of America, N.A., Keybank National Association, and the lenders listed therein (Exhibit 10.1 to AIMCO’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 22, 2005, is incorporated herein by reference).
(b)(3)	Second Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of March 22, 2006, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the borrowers, and Bank of America, N.A., Keybank National Association, and the lenders listed therein (Exhibit 10.1 to AIMCO’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 27, 2006, is incorporated herein by reference).
(c)(1)	Appraisal of Fox Run Apartments, effective as of January 19, 2007, prepared by KTR Valuation & Consulting Services, LLC.

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(d)	Not applicable.
(g)	None.
(h)	None.

ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.

     Not applicable.

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SIGNATURE

     After due inquiry and to the best of its knowledge and belief, the undersigned hereby certify that the information set forth in this statement is true, complete and correct.

Date: August 28, 2007

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By:	/s/ Martha L. Long
	Martha L. Long
	Senior Vice President
AIMCO-GP, INC.
By:	/s/ Martha L. Long
	Martha L. Long
	Senior Vice President
AIMCO PROPERTIES, L.P.
By:	AIMCO-GP, INC.
	Its General Partner

By:	/s/ Martha L. Long
	Martha L. Long
	Senior Vice President

ANGELES REALTY CORPORATION II
By:	/s/ Martha L. Long
	Martha L. Long
	Senior Vice President

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EXHIBIT INDEX

Exhibit No.	Description
(a)(1)	Offer to Purchase dated August 28, 2007.
(a)(2)	Letter of Transmittal and related Instructions.
(a)(3)	Letter from Aimco OP to the Limited Partners of Angeles Partners XI.
(c)(1)	Appraisal of Fox Run Apartments, effective as of January 19, 2007, prepared by KTR Valuation & Consulting Services, LLC.

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EX-99.(A)(1)

Exhibit 99(a)(1)

OFFER TO PURCHASE

AIMCO Properties, L.P.

is offering to purchase 4,358 limited partnership units in

Angeles Partners XI

for $1,718.00 per unit in CASH

Upon the terms and subject to the conditions set forth herein, we will accept units validly tendered in response to our offer.

If more than 4,358 units are validly tendered (and not properly withdrawn) on or prior to the expiration date, we will purchase 4,358 units from tendering unitholders on a pro rata basis. There are 1,045 holders in your partnership as of August 20, 2007.

You will not pay any partnership transfer fees if you tender units pursuant to this Offer. You will pay any other fees or costs, including any transfer taxes.

Our offer price will be reduced for any distributions subsequently made or declared by your partnership prior to the expiration of our offer.

OUR OFFER AND YOUR WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON SEPTEMBER 25, 2007, UNLESS WE EXTEND THE DEADLINE.

See “Risk Factors” beginning on page 4 of this Offer to Purchase for a description of risk factors that you should consider in connection with our offer, including the following:

•  IF YOU WANT TO TENDER YOUR UNITS IN THE OFFER, YOU MUST SIGN A LETTER OF TRANSMITTAL IN WHICH YOU RELEASE US FROM ALL LIABILITY, EXCEPT AS OTHERWISE PROVIDED IN “THE OFFER — SECTION 3. PROCEDURE FOR TENDERING UNITS,” WITH RESPECT TO ANY AND ALL CLAIMS THROUGH THE DATE OF EXECUTION OF THE LETTER OF TRANSMITTAL, INCLUDING, BUT NOT LIMITED TO, THOSE CLAIMS THAT WERE BROUGHT OR THAT COULD HAVE BEEN BROUGHT IN THE NUANES AND HELLER LITIGATION AND IRRESPECTIVE OF WHETHER YOU PREVIOUSLY REQUESTED EXCLUSION FROM THE SETTLEMENT OR WHAT HAPPENS IN CONNECTION WITH THE PENDING APPEAL CHALLENGING THE SETTLEMENT. YOU WILL ALSO ASSIGN TO US YOUR RIGHTS IN ANY FUTURE CLAIMS AND DISTRIBUTIONS, PROVIDED, HOWEVER, YOU WILL STILL BE ENTITLED TO RECEIVE YOUR PRO RATA SHARE OF THE SETTLEMENT FUND IN THE NUANES AND HELLER LITIGATION EVEN IF YOU TENDER, PROVIDED THAT YOU ARE OTHERWISE ELIGIBLE, AND IF AND WHEN APPROVAL OF THE SETTLEMENT AND JUDGMENT ENTERED THERETO BECOME FINAL.

•  Our offer price was determined without any arms-length negotiations, which might result in a higher value for your partnership units.

•  Our offer price is based on an independent appraisal that was completed in January 2007 and indicated an appraised value of $102,300,000 for Fox Run Apartments; a more recent appraisal might indicate a higher property value and, accordingly, a higher price per unit.

•  There is no established or regular trading market for your units, nor is there a reliable standard for determining the fair market value of the units. Accordingly, our offer price may not represent fair market value for your units.

(Continued on next page)

If you decide to accept our offer, you must complete and sign the enclosed letter of transmittal in accordance with the instructions thereto and mail or deliver the signed letter of transmittal and any other required documents to The Altman Group, Inc., which is acting as Information Agent in connection with our offer, at one of its addresses set forth on the back cover of this Offer to Purchase. Questions and requests for assistance or for additional copies of this Offer to Purchase or the letter of transmittal may also be directed to the Information Agent at (800) 467-0821.

August 28, 2007

(Continued from prior page)

•  Your general partner and the property manager are affiliates of ours and, therefore, your general partner has substantial conflicts of interest with respect to our offer.

•  We are making this offer with a view to making a profit and, therefore, there is a conflict between our desire to purchase your units at a low price and your desire to sell your units at a high price.

•  Continuation of your partnership will result in our affiliate continuing to receive management fees from your partnership. Such fees would not be payable if your partnership were sold.

•  We may conduct a future offer at a higher price, although we have no obligation or current intention to do so.

•  For any units that we acquire from you, you will not receive any future distributions from operating cash flow of your partnership or upon a sale or refinancing of the property owned by your partnership.

•  The general partner makes no recommendation as to whether you should tender your units.

The general partner does not make any recommendation regarding whether you should accept this offer. You are encouraged to carefully review this Offer to Purchase and any other information available to you and to seek the advice of your independent lawyer, tax advisor and/or financial advisor with respect to your particular circumstances before deciding whether or not to accept this offer.

THE INFORMATION AGENT FOR THE OFFER IS:

THE ALTMAN GROUP, INC.

By Mail:	By Overnight Courier:	By Hand:
P.O. Box 268	1200 Wall Street, 3rd Floor	1200 Wall Street, 3rd Floor
Lyndhurst, NJ 07071	Lyndhurst, NJ 07071	Lyndhurst, NJ 07071

For information, please call:

TOLL FREE: (800) 467-0821

TABLE OF CONTENTS

	Page
Summary Term Sheet		1
Risk Factors		4
If you tender your units in this offer, you will release us from all liability and assign to us your rights in any and all claims through and including the date of execution of the letter of transmittal		4
Our offer price was determined without any arms-length negotiations, which might result in a higher value for your partnership units		4
The appraisal on which we based our offer price was completed in January 2007; a more recent appraisal might indicate a higher property value and, accordingly, a higher price per unit		4
Our offer price may not represent fair market value for your units		4
Our offer price for your units may be less than the value attributable to your units from a sale of your partnership’s property		5
Continuation of the partnership; no time frame regarding sale of property		5
Holding your units may result in greater future value		5
The general partner faces conflicts of interest with respect to this offer		5
Your general partner is not making a recommendation regarding this offer		5
Your general partner faces conflicts of interest relating to management fees		6
We may make a future offer at a higher price		6
Your U.S. federal tax liability resulting from a sale of your units could exceed our offer price		6
You may recognize taxable gain for release and assignment of claims		6
If you tender your units in this offer, you will no longer be entitled to distributions from your partnership		6
We control your partnership		6
You could recognize gain in the event of a future reduction in your partnership’s liabilities		7
We could delay acceptance of, and payment for, your units		7
The Offer		8
1.  Terms of the Offer; Expiration Date; Proration		8
2.  Acceptance for Payment and Payment for Units		9
3.  Procedure for Tendering Units		9
4.  Withdrawal Rights		12
5.  Extension of Tender Offer Period; Termination; Amendment; No Subsequent Offering Period		12
6.  Material Federal Income Tax Matters		13
7.  Effects of the Offer		15
8.  Information Concerning Us and Certain of Our Affiliates		16
9.  Background and Reasons for the Offer		17
10.  Position of the General Partner of Your Partnership With Respect to the Offer		22
11.  Conflicts of Interest and Transactions with Affiliates		23
12.  Future Plans of the Purchaser		25
13.  The Lawsuit and the Settlement		26
14.  Certain Information Concerning Your Partnership		31
15.  Voting Power		34
16.  Source of Funds		35
17.  Dissenters’ Rights		35
18.  Conditions to the Offer		35
19.  Certain Legal Matters		37
20.  Fees and Expenses		37
ANNEX I		I-1

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SUMMARY TERM SHEET

This summary term sheet highlights the material information regarding our offer, but it does not describe all of the details thereof. We urge you to read this entire Offer to Purchase, which contains the full details of our offer. We have also included in the summary term sheet references to the sections of this Offer to Purchase where a more complete discussion may be found. Unless otherwise indicated, references in this Offer to Purchase to “we,” “our,” “us” or “Aimco Operating Partnership” refer to AIMCO Properties, L.P., a Delaware limited partnership, and references to “general partner” refer to Angeles Realty Corporation II, a California corporation.

•  The Offer.  Upon the terms and subject to the conditions set forth in this Offer to Purchase, we are offering to acquire limited partnership units of Angeles Partners XI, your partnership, for $1,718.00 per unit in cash. See “The Offer — Section 1. Terms of the Offer; Expiration Date; Proration,” “ — Section 7. Effects of the Offer” and “— Section 9. Background and Reasons for the Offer.”

•  Release and Assignment of Future Claims.  This offer is not being made as part of the settlement of a class and derivative litigation entitled Nuanes et al. v. Insignia Financial Group, Inc. et al. and Heller v. Insignia Financial Group, Inc. et al. on behalf of your partnership and limited partners in your partnership and others (the “Nuanes and Heller litigation”).

In connection with the settlement, the Court of Appeals on March 21, 2005 vacated the order approving the settlement and remanded the matter back to the trial court for further findings on the basis that the “state of the record is insufficient to permit meaningful appellate review.” On June 30, 2006, the trial court made additional findings and entered an order finally approving the settlement again and entered judgment thereto. On August 31, 2006, a second appeal was filed from that order.

IF YOU WANT TO TENDER YOUR UNITS IN THE OFFER, YOU MUST SIGN A LETTER OF TRANSMITTAL IN WHICH YOU RELEASE US FROM ALL LIABILITY, EXCEPT AS OTHERWISE PROVIDED IN “THE OFFER — SECTION 3. PROCEDURE FOR TENDERING UNITS,” WITH RESPECT TO ANY AND ALL CLAIMS THROUGH AND INCLUDING THE DATE OF EXECUTION OF THE LETTER OF TRANSMITTAL, INCLUDING, BUT NOT LIMITED TO, THOSE CLAIMS THAT WERE BROUGHT OR THAT COULD HAVE BEEN BROUGHT IN THE NUANES AND HELLER LITIGATION AND IRRESPECTIVE OF WHETHER YOU PREVIOUSLY REQUESTED EXCLUSION FROM THE SETTLEMENT OR WHAT HAPPENS IN CONNECTION WITH THE PENDING APPEAL CHALLENGING THE SETTLEMENT YOU WILL ALSO ASSIGN TO US YOUR RIGHTS IN ANY FUTURE CLAIMS AND DISTRIBUTIONS, EXCEPT AS DESCRIBED BELOW.

IF YOU DID NOT REQUEST EXCLUSION FROM THE SETTLEMENT, YOU WILL STILL BE ENTITLED TO RECEIVE YOUR PRO RATA SHARE OF THE SETTLEMENT FUND ($10.32 PER UNIT), EVEN IF YOU TENDER YOUR UNITS PURSUANT TO THIS OFFER, PROVIDED THAT YOU ARE OTHERWISE ELIGIBLE AND IF AND WHEN APPROVAL OF THE SETTLEMENT AND THE JUDGMENT ENTERED THERETO BECOME FINAL. OTHERWISE YOU WILL NOT BE ENTITLED TO RECEIVE A PRO RATA SHARE OF THE SETTLEMENT FUND.

For additional information regarding the litigation and the settlement, see “The Offer — Section 13. The Lawsuit and the Settlement.”

•  Factors in Determining the Offer Price.  In determining the offer price per unit we principally considered:

•  The January 2007 appraisal of your partnership’s property;

•  The recent financial performance of your partnership’s property compared to the financial performance assumptions included in the January 2007 appraisal;

•  The current economic factors affecting the local markets of each of your partnership’s property;

•  The location, condition and debt structure of your partnership’s property, including the prepayment penalty associated with the mortgages for the property;

•  Your partnership’s other assets and liabilities;

•  Prices at which units have recently sold to the extent such information is available to us; and

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•  The absence of a trading market for the units. See “The Offer — Section 9. Background and Reasons for the Offer; Comparison of Offer Price to Alternative Consideration.”

•  Expiration Date.  Our offer expires on September 25, 2007, unless extended, and you can tender your units until our offer expires. See “The Offer — Section 1. Terms of the Offer; Expiration Date; Proration.”

•  Right to Extend the Expiration Date.  We can extend the expiration date of the offer in our reasonable discretion. We reserve the right to extend the offer subject to customary conditions. In the event we extend the offer, we will issue a press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day after the scheduled expiration date of the offer, in accordance with Rule 14e-1(d) of the Securities Exchange Act of 1934 (the “Exchange Act”). See “The Offer — Section 5. Extension of Tender Offer Period; Termination; Amendment; No Subsequent Offering Period.”

•  How to Tender.  To tender your units, complete the accompanying letter of transmittal and send it, along with any other documents required by the letter of transmittal, to the Information Agent, The Altman Group, Inc., at one of the addresses set forth on the back of this Offer to Purchase. See “The Offer — Section 3. Procedure for Tendering Units.”

•  Withdrawal Rights.  You can withdraw your units at any time prior to the expiration of the offer, including any extensions. In addition, you can withdraw your units at any time on or after October 26, 2007 if we have not already accepted units for purchase and payment. If you properly withdraw all of the units you previously tendered in the offer, the corresponding letter of transmittal, including your release and assignment of future claims contained therein, will be deemed revoked and of no force or effect. See “The Offer — Section 4. Withdrawal Rights.”

•  How to Withdraw.  To withdraw your units, you need to send a notice of withdrawal to the Information Agent, identifying yourself and the units to be withdrawn. See “The Offer — Section 4. Withdrawal Rights.”

•  Tax Consequences.  Your sale of units in this offer will be a taxable transaction for federal income tax purposes. The consequences to each limited partner may vary and you should consult your tax advisor on the precise tax consequences to you. See “The Offer — Section 6. Material Federal Income Tax Matters.”

•  Availability of Funds.  We intend to pay the purchase price of any units tendered from our existing cash balances or borrowings under our line of credit. See “The Offer — Section 16. Source of Funds.”

•  Conditions to the Offer.  There are a number of conditions to our offer, including the absence of competing tender offers, that there be no material change with respect to our financial condition, the absence of certain changes in the financial markets and there being at least 320 unitholders outstanding upon the consummation of the offer. See “The Offer — Section 18. Conditions to the Offer.”

•  Remaining as a Limited Partner.  If you do not tender your units, you will remain a limited partner in your partnership. We have no plans to alter the operations, business or financial position of your partnership or take your partnership private. See “The Offer — Section 7. Effects of the Offer.”

•  Who We Are.  We are AIMCO Properties, L.P., the operating partnership of Apartment Investment and Management Company, a New York Stock Exchange-listed company. See “The Offer — Section 8. Information Concerning Us and Certain of Our Affiliates.” We and our affiliates currently own 28,451 units, or 71.80%, of the outstanding units of your partnership.

•  Conflicts of Interest.  Our affiliate receives fees for managing your partnership’s property and the general partner of your partnership (which is also our affiliate) is entitled to receive asset management fees and reimbursement of certain expenses involving your partnership and its property. As a result, a conflict of interest exists between continuing the partnership and receiving these fees, and the sale of the partnership and the termination of these fees because if your partnership were sold, our management affiliate and your general partner would not continue to receive the fees they currently receive. See “The Offer — Section 11. Conflicts of Interest and Transactions with Affiliates” and “— Section 14. Certain Information Concerning Your Partnership.”

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•  No General Partner Recommendation.  The general partner of your partnership makes no recommendation as to whether you should tender or refrain from tendering your units. Each limited partner should make his or her own decision whether or not to tender. You are encouraged to carefully review this Offer to Purchase and any other information available to you and to seek advice from your independent lawyer, tax advisor and/or financial advisor with respect to your particular circumstances before deciding whether or not to accept this offer. See “The Offer — Section 10. Position of the General Partner of Your Partnership With Respect to the Offer.”

•  No Subsequent Offering Period.  We do not currently intend to have a subsequent offering period after the expiration date of the initial offering period (including any extensions). See “The Offer — Section 5. Extension of Tender Offer Period; Termination; Amendment; No Subsequent Offering Period.”

•  Additional Information.  For assistance in tendering your units, please contact our Information Agent at one of the addresses or the telephone number set forth on the back cover page of this Offer to Purchase.

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RISK FACTORS

Before deciding whether or not to tender any of your units, you should consider carefully the following risks and disadvantages of the offer:

If you tender your units in this offer, you will release us from all liability and assign to us your rights in any and all claims through and including the date of execution of the letter of transmittal.

IF YOU WANT TO TENDER YOUR UNITS IN THE OFFER, YOU MUST SIGN A LETTER OF TRANSMITTAL, IN WHICH YOU RELEASE US FROM ALL LIABILITY, EXCEPT AS OTHERWISE PROVIDED IN “THE OFFER — SECTION 3. PROCEDURE FOR TENDERING UNITS,” WITH RESPECT TO ANY AND ALL CLAIMS THROUGH AND INCLUDING THE DATE OF EXECUTION OF THE LETTER OF TRANSMITTAL, INCLUDING, BUT NOT LIMITED TO, THOSE CLAIMS THAT WERE BROUGHT OR THAT COULD HAVE BEEN BROUGHT IN THE NUANES AND HELLER LITIGATION, DESCRIBED MORE FULLY IN “THE OFFER — SECTION 13. THE LAWSUIT AND THE SETTLEMENT,” AND ASSIGN TO US YOUR RIGHTS IN ANY FUTURE CLAIMS AND DISTRIBUTIONS EXCEPT AS OTHERWISE DESCRIBED HEREIN.

BY EXECUTING THE ENCLOSED LETTER OF TRANSMITTAL, YOU WILL RELEASE CLAIMS ARISING OUT OF THE SETTLEMENT OF THE NUANES AND HELLER LITIGATION IRRESPECTIVE OF WHETHER YOU PREVIOUSLY REQUESTED EXCLUSION FROM THE SETTLEMENT AND IRRESPECTIVE OF WHAT HAPPENS IN CONNECTION WITH THE PENDING APPEAL CHALLENGING THE SETTLEMENT AND JUDGMENT ENTERED THERETO. IF YOU TENDER, HOWEVER, YOU WILL STILL BE ENTITLED TO YOUR PRO RATA SHARE OF THE SETTLEMENT FUND IN THE NUANES AND HELLER LITIGATION, EVEN IF YOU TENDER YOUR UNITS PURSUANT TO THIS OFFER, PROVIDED THAT YOU ARE OTHERWISE ELIGIBLE, AND IF AND WHEN APPROVAL OF THE SETTLEMENT AND JUDGMENT ENTERED THERETO BECOME FINAL.

On March 21, 2005, the Court of Appeals vacated the trial court’s order approving the settlement in the Nuanes and Heller litigation and remanded to the trial court for further findings on the basis that the “state of the record is insufficient to permit meaningful appellate review.” On June 30, 2006, the trial court made additional findings and entered an order finally approving the settlement again and entered judgment thereto. On August 31, 2006, a second appeal was filed from that order. For additional information regarding the litigation and the settlement, see “The Offer — Section 13. The Lawsuit and the Settlement.”

Our offer price was determined without any arms-length negotiations, which might result in a higher value for your partnership units.

Our offer price was determined without any arms-length negotiations. If your partnership were to sell its assets, the value of the assets would be determined through negotiations with third parties, who may be willing to pay more for your partnership’s property than the value implied by our offer price. Although the actual proceeds you might receive in a sale are uncertain, they could exceed our offer price. Similarly, other persons might ascribe a value to your partnership units that is higher than our offer price. As a result, you might be able to sell your units to a third party at a price that exceeds our offer price.

The appraisal on which we based our offer price was completed in January 2007; a more recent appraisal might indicate a higher property value and, accordingly, a higher price per unit.

Our offer price is based on our estimate of the proceeds that would be available for distribution to limited partners in the event of a sale of your partnership’s property, except that we have not deducted any amounts for closing costs, including broker’s fees. Our starting point in this process is our estimated value for your partnership’s property. In determining our estimate of property value, we started with the January 2007 appraised value of your partnership’s property as determined by an independent appraiser. For a more detailed description of our valuation process and the independent appraisal, see “The Offer — Section 9. Background and Reasons for The Offer; Valuation of Units.”

Our offer price may not represent fair market value for your units.

There is no established or regular trading market for your units, nor is there another reliable standard for determining the fair market value of the units. Our offer price does not necessarily reflect the price that you would receive in an open market for your units. Such prices could be higher than our offer price. See “The Offer — Section 9. Background and Reasons for the Offer;

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Comparison of Offer Price to Alternative Consideration”, “— Prior Tender Offers and Private Purchases” and “— Prices on Secondary Market.”

Our offer price for your units may be less than the value attributable to your units from a sale of your partnership’s property.

The actual proceeds obtained from a sale of your partnership’s property are highly uncertain and could be more than our estimate. Other persons could derive different estimates of the value attributable to your units from a sale of your partnership’s property. If your partnership were to sell its assets, the value of the assets would be determined through negotiations with third parties, who may use different valuation methods to determine the value of your partnership’s assets. Accordingly, our offer price could be less than the net proceeds that you would realize upon an actual sale of your partnership. In addition, your partnership would generally make distributions in accordance with the partners’ respective positive capital account balances, regardless of whether such distributions are proportionate to the percentage of partnership units held by a limited partner. Our offer price is based upon an estimated average per-unit value and not upon your capital account balance. Accordingly, the amount that you receive pursuant to our offer may be less than the amount you would have received in a distribution of the partnership.

Continuation of the partnership; no time frame regarding sale of property.

Your general partner, which is our affiliate, is proposing to continue to operate your partnership and not to attempt to sell it at the present time. It is not known when the property owned by your partnership may be sold. The general partner of your partnership from time to time considers whether the property should be sold or otherwise disposed of after consideration of relevant factors, including prevailing economic conditions, availability of favorable financing and tax considerations, with a view to achieving maximum capital appreciation for your partnership. At the current time, your general partner believes that selling your partnership’s property would not be advantageous given market conditions, the condition of the property and tax considerations. In particular, the general partner considered changes in the local rental market resulting from local economic conditions (such as unemployment, availability of alternative rental properties, vacancy rates and changes in market rental rates), the potential for appreciation in the value of a property given current local market conditions and trends for the sale of multi-family residential properties (such as the current expected sales price of a property given supply and demand and recent sales of comparable properties in surrounding neighborhoods, the local competitive climate for property sales, development plans for new construction and trends in local and regional real estate markets), the partnership’s operating cash flow requirements and the potential tax liability to limited partners on the sale of a property.

Holding your units may result in greater future value.

Although a sale of your partnership is not currently contemplated in the near future, you might receive more value if you retain your units until your partnership is sold. At the current time, the general partner of your partnership believes that selling your partnership’s property would not be advantageous given market conditions, the condition of the property and tax considerations. If your partnership’s property was sold in the future and the net proceeds from the sale were distributed to the limited partners, the per unit amount of such distributions might exceed our current offer price.

The general partner faces conflicts of interest with respect to this offer.

The general partner of your partnership is our affiliate and, therefore, has substantial conflicts of interest with respect to our offer. We are making this offer with a view to making a profit. There is a conflict between our desire to purchase your units at a low price and your desire to sell your units at a high price. We determined our offer price without negotiation with any other party, including any general or limited partner.

Your general partner is not making a recommendation regarding this offer.

The general partner of your partnership (which is our affiliate) makes no recommendation as to whether or not you should tender or refrain from tendering your units because each limited partner’s circumstances may differ from those of other limited partners. You should make your own decision whether or not to participate in the offer based upon a number of factors, including several factors that may be personal to you, such as your financial position, your need or desire for liquidity, other financial opportunities available to you, your tax position and the tax consequences to you of selling your units. You are encouraged to

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carefully review this Offer to Purchase and any other information available to you and to seek advice from your independent lawyer, tax advisor and/or financial advisor with respect to your particular circumstances before deciding whether or not to accept this offer.

Your general partner faces conflicts of interest relating to management fees.

Because we or our affiliates receive fees for managing your partnership and its property, a conflict of interest exists between continuing the partnership and receiving such fees, and the sale of the partnership and the termination of such fees. Also, a decision of the limited partners of your partnership to remove, for any reason, the general partner of your partnership or the property manager of your partnership’s property would result in a decrease or elimination of the substantial fees to which they are entitled for services provided to your partnership.

We may make a future offer at a higher price.

It is possible that we may conduct a future offer at a higher price, although we have no obligation or current intention to do so. Our decision to conduct a future offer will depend on, among other things, the performance of the partnership, prevailing economic conditions, and our interest in acquiring additional units.

Your U.S. federal tax liability resulting from a sale of your units could exceed our offer price.

For U.S. federal income tax purposes, your sale of units for cash will be a taxable sale, with the result that you will recognize taxable gain or loss measured by the difference between the amount realized on the sale and your adjusted tax basis in the units of limited partnership interest of your partnership you transfer to us. The “amount realized” with respect to a unit of limited partnership interest that you transfer to us will be equal to the sum of the amount of cash received by you for the unit sold pursuant to the offer plus the amount of partnership liabilities allocable to your unit. Depending on your basis in the units and your tax position, your tax liability resulting from a sale of units to us pursuant to the offer could exceed our offer price. The particular tax consequences for you of our offer will depend upon a number of factors related to your tax situation, including your adjusted tax basis in the units you transfer to us, whether you dispose of all of your units, and whether you have available suspended passive losses, credits or other tax items to offset any gain recognized as a result of your sale of your units. We may also be required by federal, state or local tax laws to withhold a portion of our offer price. Because the income tax consequences of tendering units will not be the same for everyone, you should consult your tax advisor to determine the tax consequences of the offer to you.

You may recognize taxable gain for release and assignment of claims.

If you tender units in this offer, a portion of the price paid to you may be deemed a payment for your release and assignment of claims. The proper treatment for federal income tax purposes of your receipt of any deemed payments for your release and assignment of claims is uncertain. No opinion or assurance can be given that the Internal Revenue Service (the “IRS”) will not challenge the treatment of any deemed payments for your release and assignment of claims as additional consideration for the units, and assert that such amount should be treated as an ordinary income payment in exchange for your release and/or assignment of current and future claims. You should consult your tax advisor regarding the tax consequences to you with respect to your right to, and your receipt of, any deemed payments for your release and assignment of claims.

If you tender your units in this offer, you will no longer be entitled to distributions from your partnership.

If you tender your units in response to our offer, you will transfer to us all right, title and interest in and to all of the units we accept, and the right to receive all distributions in respect of such units on and after the date on which we accept such units for purchase. Accordingly, for any units that we acquire from you, you will not receive any future distributions from operating cash flow of your partnership or upon a sale or refinancing of the property owned by your partnership.

We control your partnership.

Decisions with respect to the day-to-day management of your partnership are the responsibility of the general partner. The general partner of your partnership is our affiliate and we control the management of your partnership. Under your partnership’s agreement of limited partnership, limited partners holding a majority of the outstanding units must approve certain extraordinary transactions, including the removal of the general partner, most amendments to the partnership agreement and the sale of

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all or substantially all of your partnership’s assets. We and our affiliates own 28,451 units, or 71.80%, of the total outstanding units of your partnership. Because we and our affiliates own a majority of the outstanding units, we have the ability to control any votes of the limited partners.

You could recognize gain in the event of a future reduction in your partnership’s liabilities.

Generally, a decrease in your share of partnership liabilities is treated, for federal income tax purposes, as a deemed cash distribution. Although the general partner of your partnership does not have any current plan or intention to reduce the liabilities of your partnership, it is possible that future economic, market, legal, tax or other considerations may cause the general partner to reduce your share of the partnership liabilities. If you retain all or a portion of your units and your share of the partnership liabilities were to be reduced, you would be treated as receiving a hypothetical distribution of cash resulting from a decrease in your share of the liabilities of the partnership. Any such hypothetical distribution of cash would be treated as a nontaxable return of capital to the extent of your adjusted tax basis in your units and thereafter as gain. Gain recognized by you on the disposition of retained units with a holding period of 12 months or less may be classified as short-term capital gain and subject to taxation at ordinary income tax rates.

We could delay acceptance of, and payment for, your units.

We reserve the right to extend the period of time during which our offer is open and thereby delay acceptance for payment of any tendered units. The offer may be extended in our reasonable discretion, and no payment will be made in respect of tendered units until the expiration of the offer and acceptance of units for payment. We will pay for or return tendered units promptly after expiration of the offer.

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THE OFFER

1.   Terms of the Offer; Expiration Date; Proration

We are offering to purchase up to 4,358 limited partnership units (which represents approximately 11% of total units outstanding) in your partnership for $1,718.00 per unit in cash, upon the terms and subject to the conditions of the offer. The purchase price per unit will automatically be reduced by the aggregate amount of distributions per unit, if any, made or declared by your partnership on or after the commencement of our offer and prior to the date on which we acquire your units pursuant to our offer. If the offer price is reduced in this manner, we will notify you and, if necessary, we will extend the offer period so that you will have at least ten business days from the date of our notice to withdraw your units.

If, prior to the expiration date, we increase the consideration offered pursuant to the offer, the increased consideration will be paid for all units accepted for payment pursuant to the offer, whether or not the units were tendered prior to the increase in consideration.

Upon the terms and subject to the conditions to the offer, we will accept (and thereby purchase) units that are validly tendered on or prior to the expiration date and not withdrawn in accordance with the procedures set forth in “The Offer — Section 4. Withdrawal Rights.” For purposes of the offer, the term “expiration date” shall mean midnight, New York City time, on September 25, 2007, unless we in our reasonable discretion shall have extended the period of time for which the offer is open. See “The Offer — Section 5. Extension of Tender Offer Period; Termination; Amendment; No Subsequent Offering Period,” for a description of our right to extend the period of time during which the offer is open and to amend or terminate the offer.

If more than 4,358 units are validly tendered (and not properly withdrawn) on or prior to the expiration date in accordance with the procedures set forth in “The Offer — Section 4. Withdrawal Rights,” we will purchase 4,358 units from tendering unitholders on a pro rata basis (subject to any necessary adjustment for fractional units). There are 1,045 unitholders in your partnership as of August 20, 2007. See “The Offer — Section 7. Effects of the Offer — Effect on Trading Market; Registration Under 12(g) of the Exchange Act.”

If more units than can be purchased under your partnership agreement are tendered and not withdrawn, we will accept for payment and pay for the maximum number of units validly tendered that would not violate the terms of your partnership agreement, and the number of units accepted from each tendering unitholder will be prorated according to the number of units so tendered, with appropriate adjustments to avoid purchases of fractional units. See “The Offer — Section 2. Acceptance for Payment and Payment for Units.”

The offer is not conditioned upon any minimum number of units being tendered. However, the offer is conditioned on satisfaction of certain conditions, including among other things, there being at least 320 unitholders remaining after our purchase of all units validly tendered and not properly withdrawn prior to the expiration date in accordance with the procedures set forth in “The Offer — Section 4. Withdrawal Rights.” See “The Offer — Section 18. Conditions to the Offer,” which sets forth in full the conditions to the offer. We reserve the right (but in no event shall we be obligated), in our reasonable 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, we reserve the right to (i) decline to purchase any of the units tendered, terminate the offer and return all tendered units to tendering limited partners, (ii) waive all the unsatisfied conditions and purchase, subject to the terms of the offer, units validly tendered, (iii) extend the offer and, subject to your withdrawal rights, retain the units that have been tendered during the period or periods for which the offer is extended, or (iv) amend the offer. Although the payment date will occur after expiration of the offer, in the books and records of the partnership the change in ownership of tendered units will be made retroactive to the first day of the calendar quarter in which the offer expires. For tax, accounting and financial reporting purposes, the transfer of tendered units will be deemed to take effect on the first day of the calendar quarter in which the offer expires. Accordingly, all profits and losses relating to any tendered units will be allocated to us from and after this date. If we waive any material conditions to our offer, we will notify you and, if necessary, we will extend the offer period so that you will have at least five business days from the date of our notice to withdraw your units.

This offer is being mailed on or about August 28, 2007 to the persons shown by your partnership’s records to have been limited partners or, in the case of units owned of record by Individual Retirement Accounts and qualified plans, beneficial owners of units.

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2.   Acceptance for Payment and Payment for Units

Upon the terms and subject to the conditions of the offer, we will purchase, by accepting for payment, and will pay for, units validly tendered as promptly as practicable, which we expect will be within three business days after the expiration of the offer. A tendering beneficial owner of units whose units are owned of record by an Individual Retirement Account or other qualified plan will not receive direct payment of the offer 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 Information Agent of a properly completed and duly executed letter of transmittal and other documents required by the letter of transmittal. See “The Offer — Section 3. Procedure for Tendering Units.” UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE BY REASON OF ANY DELAY IN MAKING SUCH PAYMENT.

If more than 4,358 units are validly tendered (and not properly withdrawn) on or prior to the expiration date in accordance with the procedures set forth in “The Offer — Section 4. Withdrawal Rights,” we will purchase 4,358 units from tendering unitholders on a pro rata basis (subject to any necessary adjustment for fractional units). There are 1,045 unitholders in your partnership as of August 20, 2007. See “The Offer — Section 18. Conditions of the Offer.”

For purposes of the offer, we will be deemed to have accepted for payment pursuant to the offer, and thereby purchased, validly tendered units, if, as and when we give verbal or written notice to the Information Agent of our acceptance of those units for payment pursuant to the offer. Payment for units accepted for payment pursuant to the offer will be made through the Information Agent, which will act as agent for tendering limited partners for the purpose of receiving cash payments from us and transmitting cash payments to tendering limited partners.

If any tendered units are not accepted for payment by us for any reason, the letter of transmittal with respect to such units not purchased may be destroyed by the Information Agent or us or returned to you. You may withdraw tendered units until the expiration date (including any extensions). In addition, if we have not accepted units for payment by October 26, 2007, you may then withdraw any tendered units. After the expiration date, the Information Agent may, on our behalf, retain tendered units, and those units may not be otherwise withdrawn, if, for any reason, acceptance for payment of, or payment for, any units tendered pursuant to the offer is delayed or we are unable to accept for payment, purchase or pay for units tendered pursuant to the offer. Any such action is subject, however, to our obligation under Rule 14e-1(c) under the Exchange Act, to pay you the offer price in respect of units tendered or return those units promptly after termination or withdrawal of the offer.

We reserve the right to transfer or assign, in whole or in part, to one or more of our affiliates, the right to purchase units tendered pursuant to the offer, but no such transfer or assignment will relieve us of our obligations under the offer or prejudice your rights to receive payment for units validly tendered and accepted for payment pursuant to the offer. In addition, if we assign the right to purchase the tendered limited partnership units to an affiliate that is not currently identified as a filing person while our offer remains ongoing, we will revise our offer materials accordingly and will include those affiliates as filing persons and signatories on the relevant Schedule TO.

3.   Procedure for Tendering Units

Valid Tender.  To validly tender units pursuant to the offer, a properly completed and duly executed letter of transmittal, and any other required documents must be received by the Information Agent, at one of its addresses set forth on the back cover of this Offer to Purchase, on or prior to the expiration date. You may tender all or any portion of your units. No alternative, conditional or contingent tenders will be accepted.

Signature Requirements.  If the letter of transmittal is signed by the registered holder of a unit and payment is to be made directly to that holder, then no signature guarantee is required on the letter of transmittal. Similarly, if a unit is 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 letter of transmittal. However, in all other cases, all signatures on the letter of transmittal must be guaranteed by an Eligible Institution.

In order for you to tender in the offer, your units must be validly tendered and not withdrawn on or prior to the expiration date.

The method of delivery of the letter of transmittal and all other required documents is at your option and risk and delivery will be deemed made only when actually received by the Information Agent. If delivery is by mail, registered

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mail with return receipt requested is recommended. In all cases, sufficient time should be allowed to assure timely delivery.

Appointment as Proxy; Power of Attorney.  By executing the letter of transmittal, you are irrevocably appointing us and our designees as your proxy, in the manner set forth in the letter of transmittal and each with full power of substitution, to the fullest extent of your rights with respect to the units tendered by you and accepted for payment by us. 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, we accept the tendered units for payment. Upon such acceptance for payment, all prior proxies given by you 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). We and our designees will, as to those units, be empowered to exercise all voting and other rights as a limited partner as we, in our sole discretion, may deem proper at any meeting of limited partners, by written consent or otherwise. By executing the letter of transmittal, you agree to execute all such documents and take such other actions as shall be reasonably required to enable the units tendered to be voted in accordance with our directions. The proxy granted by you to us will remain effective and be irrevocable for a period of ten years following the termination of our offer.

By executing the letter of transmittal, you also irrevocably constitute and appoint us and our designees as your attorneys-in-fact, each with full power of substitution, to the fullest extent of your rights with respect to the units tendered by you and accepted for payment by us. Such appointment will be effective when, and only to the extent that, we pay for your units and will remain effective and be irrevocable for a period of ten years following the termination of our offer. You will agree not to exercise any rights pertaining to the tendered units without our prior consent. Upon such payment, all prior powers of attorney granted by you 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, we and our designees each will have the power, among other things, (i) to transfer ownership of such units on the partnership books maintained by your general partner (and execute and deliver any accompanying evidences of transfer and authenticity it may deem necessary or appropriate in connection therewith), (ii) upon receipt by the Information Agent of the offer consideration, to become a substituted limited partner, to receive any and all distributions made by your partnership on or after the date on which we acquire such units, and to receive all benefits and otherwise exercise all rights of beneficial ownership of such units in accordance with the terms of our offer, (iii) to execute and deliver to the general partner of your partnership a change of address form instructing the general partner to send any and all future distributions to which we are 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 you or upon your order representing a distribution to which we are entitled pursuant to the terms of our offer, in each case, in your name and on your behalf.

Assignment of Interest in Future Distributions.  By executing the letter of transmittal, you will irrevocably assign to us and our assigns all of your right, title and interest in and to any and all distributions made by your partnership from any source and of any nature, including, without limitation, distributions in the ordinary course, distributions from sales of assets, distributions upon liquidation, winding-up, or dissolution, payments in settlement of existing or future litigation (other than with respect to your pro rata share of the settlement fund in the Nuanes and Heller settlement, provided that you are otherwise eligible, and if and when approval of the settlement and judgment entered thereto become final) and all other distributions and payments from and after the expiration date of our offer, in respect of the units tendered by you and accepted for payment and thereby purchased by us. If, after the unit is accepted for payment and purchased by us, you receive any distribution from any source and of any nature, including, without limitation, distributions in the ordinary course, distributions from sales of assets, distributions upon liquidation, winding-up or dissolution, payments in settlement of existing or future litigation and all other distributions and payments, from your partnership in respect of such unit, you will agree to forward promptly such distribution to us.

Release of Claims.  By executing the letter of transmittal, effective upon acceptance for payment of the units tendered by you, you will, on behalf of yourself, your heirs, estate, executor, administrator, successors and assigns, and your partnership, fully, finally and forever release, relinquish and discharge us and our predecessors, successors and assigns and our present and former parents, subsidiaries, affiliates, investors, insurers, reinsurers, officers, directors, employees, agents, administrators, auditors, attorneys, accountants, information and solicitation agents, investment bankers, and other representatives, including but not limited to the Aimco Operating Partnership (collectively, the “Releasees”), from any and all claims and causes of action, whether brought individually, on behalf of a class, or derivatively, demands, rights, or liabilities, including, but not limited to, claims for negligence, gross negligence, professional negligence, breach of duty of care or loyalty, or breach of duty of candor, fraud, breach of fiduciary duty, mismanagement, corporate waste, malpractice, misrepresentation, whether intentional or negligent, misstatements and omissions to disclose, breach of contract, violations of any state or federal statutes, rules or

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regulations, whether known claims or unknown claims through and including the date of execution of the letter of transmittal, including, but not limited to, those claims that arise out of or relate to (a) the ownership of one or more units in your partnership, including but not limited to, any and all claims related to the management of your partnership or the property owned by your partnership (whether currently or previously), the payment of management fees or other monies to the general partner of your partnership and its affiliates, prior acquisitions or tender offers and the prior settlement, (b) the purchase, acquisition, holding, sale, tender or voting of one or more units in your partnership, or (c) any of the facts, circumstances, allegations, claims, causes of action, representations, statements, reports, disclosures, transactions, events, occurrences, acts, omissions or failures to act, of whatever kind or character whatsoever, irrespective of the state of mind of the actor performing or omitting to perform the same, that have been or could have been alleged in any pleadings, amended pleading, argument, complaint, amended complaint, brief, motion, report or filing in the Nuanes and Heller litigation (collectively, the “Released Claims”); provided, however, that the Released Claims are not intended to include (i) any claim based upon violations of federal or state securities laws in connection with this offer, and (ii) any right to your pro rata share of the settlement fund in the Nuanes and Heller settlement, provided that you are otherwise eligible, and if and when approval of the settlement and judgment entered thereto become final.

In addition, you will expressly waive and relinquish, to the fullest extent permitted by law and consistent with the releases described herein, the provisions, rights and benefits of Section 1542 of the Civil Code of California (“Section 1542”), which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

You will have also waived any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, that is similar, comparable or equivalent to Section 1542. You may hereafter discover facts in addition to or different from those which you now know or believe to be true with respect to the subject matter of the Released Claims, but you will be deemed to have fully, finally and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, that now exist or heretofore have existed upon any theory of law or equity now existing, including, but not limited to, conduct that is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery of the existence of such different or additional facts.

You will acknowledge and agree that the releases contained in the letter of transmittal are intended to include the Released Claims, which you may have and which you do not know or suspect to exist in your favor against the Releasees and that the releases contained in the letter of transmittal extinguish those claims. You will represent and warrant to the Releasees that you have been advised by your attorney of the effect and import of the provisions of Section 1542, and that you have not assigned or otherwise transferred or subrogated any interest in the Released Claims.

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 our offer will be determined by us, in our reasonable discretion, which determination shall be final and binding on all parties. We reserve the absolute right to reject any or all tenders of any particular unit determined by us not to be in proper form or if the acceptance of or payment for that unit may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive or amend any of the conditions to the offer that we are legally permitted to waive as to the tender of any particular unit and to waive any defect or irregularity in any tender with respect to any particular unit of any particular limited partner. If we waive any of the conditions to the offer with respect to the tender of a particular unit or with respect to a particular limited partner, we will waive such condition with respect to all other tenders of units or all other limited partners in this offer as well. Our interpretation of the terms and conditions to the offer (including the letter of transmittal) will be final and binding on all parties. No tender of units will be deemed to have been validly made unless and until all defects and irregularities have been cured or waived. Neither we, the Information Agent, nor any other person will be under any duty to give notification of any defects or irregularities in the tender of any unit or will incur any liability for failure to give any such notification.

Backup Federal Income Tax Withholding.  To prevent the possible application of back-up federal income tax withholding with respect to payment of the offer price, you must provide us with your correct taxpayer identification number. See the instructions to the letter of transmittal and “The Offer — Section 6. Material Federal Income Tax Matters.”

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State and Local Withholding.  If you tender any units pursuant to this offer, we may be required under state or local tax laws to deduct and withhold a portion of our offer price. You should consult your tax advisor concerning whether any state or local withholding would be required on a disposition of your units and whether such amounts may be available to you as a credit on your state or local tax returns.

FIRPTA Withholding.  To prevent the withholding of federal income tax in an amount equal to 10% of the amount realized on the disposition (the amount realized is generally the offer price plus the partnership liabilities allocable to each unit purchased), you must certify that you are not a foreign person if you tender units. See the instructions to the letter of transmittal and “The Offer — Section 6. Material Federal Income Tax Matters.”

Transfer Taxes.  The amount of any transfer taxes (whether imposed on the registered holder of units or any person) payable on account of the transfer of units will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted.

Binding Agreement.  A tender of a unit pursuant to any of the procedures described above and the acceptance for payment of such unit will constitute a binding agreement between the tendering limited partner and us on the terms set forth in this Offer to Purchase and the letter of transmittal.

4.   Withdrawal Rights

You may withdraw your tendered units at any time prior to the expiration date, including any extensions thereof, or on or after October 26, 2007 if the units have not been previously accepted for payment. If you properly withdraw all of the units you previously tendered in the offer, the corresponding letter of transmittal, including your release and assignment of future claims contained therein, will be deemed revoked and of no force or effect.

For a withdrawal to be effective, a written notice of withdrawal must be timely received by the Information Agent at one of its addresses 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 number of units to be withdrawn and the name of the registered holder of such units, if different from the person who tendered. In addition, the notice of withdrawal must be signed by the person who signed the letter of transmittal in the same manner as the letter of transmittal was signed.

If purchase of, or payment for, a unit is delayed for any reason, or if we are unable to purchase or pay for a unit for any reason, then, without prejudice to our rights under the offer, tendered units may be retained by the Information Agent, subject, however, to our obligation, pursuant to Rule 14e-1(c) under the Exchange Act, to pay the offer price in respect of units tendered or return those units promptly after termination or withdrawal of our offer.

Any units properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of our offer. However, withdrawn units may be re-tendered at any time prior to the expiration date by following the procedures described in “The Offer — Section 3. Procedure for Tendering Units.”

All questions as to the validity and form (including time of receipt) of notices of withdrawal will be determined by us in our reasonable discretion, which determination will be final and binding on all parties. Neither the Information Agent, any other person, nor we 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.

5.   Extension of Tender Offer Period; Termination; Amendment; No Subsequent Offering Period

We expressly reserve the right, in our reasonable discretion, at any time and from time to time, (i) to extend the period of time during which our offer is open and thereby delay acceptance for payment of, and the payment for, any unit, (ii) to terminate the offer and not accept any units not theretofore accepted for payment or paid for if any of the conditions to the offer are not satisfied or if any event occurs that might reasonably be expected to result in failure to satisfy such conditions, (iii) upon the occurrence of any of the conditions specified in “The Offer — Section 18. Conditions to the Offer” to delay the acceptance for payment of, or payment for, any units not already accepted for payment or paid for, and (iv) to amend our offer in any respect (including, without limitation, by increasing or decreasing the consideration offered, increasing or decreasing the units being sought, or both). We will not assert any of the conditions to the offer (other than those relating to necessary governmental approvals) subsequent to the expiration of the offer. Notice of any such extension, termination or amendment will promptly be disseminated to you in a manner reasonably designed to inform you of such change. In the case of an extension of the offer, the

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extension may 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 scheduled expiration date of our offer, in accordance with Rule 14e-1(d) under the Exchange Act.

If we extend the offer, or if we delay payment for a unit (whether before or after its acceptance for payment) or are unable to pay for a unit pursuant to our offer for any reason, then, without prejudice to our rights under the offer, the Information Agent 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 “The Offer — Section 4. Withdrawal Rights,” subject, however, to our obligation, pursuant to Rule 14e-1(c) under the Exchange Act, to pay the offer price in respect of units tendered or return those units promptly after termination or withdrawal of the offer.

If we make a material change in the terms of our offer, or if we waive a material condition to our offer, we will extend the offer and disseminate additional tender offer materials to the extent required by Rules 14d-4 and 14e-1 under the Exchange Act. The minimum period during which the offer must remain open following any material change in the terms of the offer, other than a change in price or a change in percentage of securities sought or a change in any dealer’s soliciting fee, if any, will depend upon the facts and circumstances, including the materiality of the change, but generally will be five business days. With respect to a change in price or, subject to certain limitations, a change in the percentage of securities sought or a change in any dealer’s soliciting fee, if any, a minimum of ten business days from the date of such change is generally required to allow for adequate dissemination to limited partners. Accordingly, if, prior to the expiration date, we increase (other than increases of not more than two percent of the outstanding units) or decrease the number of units being sought, or increase or decrease the offer price, and if the offer is scheduled to expire at any time earlier than the tenth business day after the date that notice of such increase or decrease is first published, sent or given to limited partners, the offer will be extended at least until the expiration of such ten business days. 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.

Pursuant to Rule 14d-11 under the Exchange Act, subsequent offering periods may be provided in tender offers for “any and all” outstanding units of a partnership. A subsequent offering period is an additional period of from three to twenty business days following the expiration date of the offer, including any extensions, in which limited partners may continue to tender units not tendered in the offer for the offer price. We do not currently intend to offer a subsequent offering period.

6.   Material Federal Income Tax Matters

The following summary is a discussion of the material United States federal income tax consequences of the offer that may be relevant to (i) limited partners who tender some or all of their units for cash pursuant to our offer, and (ii) limited partners who do not tender any of their units pursuant to our offer. This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, rulings issued by the IRS, and judicial decisions, all as of the date of this Offer to Purchase, all of which are subject to change or alternative construction, possibly with retroactive effect. Any such change or alternative construction could affect the continuing accuracy of this summary. This summary is based on the assumption that your partnership is operated in accordance with its organizational documents, including its certificate of limited partnership and agreement of limited partnership. This summary does not purport to discuss all aspects of federal income taxation that may be important to a particular person in light of its investment or tax circumstances, or to certain types of investors subject to special tax rules (including financial institutions, broker-dealers, insurance companies, and, except to the extent discussed below, tax-exempt organizations and foreign investors, as determined for United States federal income tax purposes), nor (except as otherwise expressly indicated) does it describe any aspect of state, local, foreign or other tax laws. This summary assumes that the units are held by the limited partners for investment purposes (commonly referred to as “capital assets”), and are not held by partners for sale to customers as dealer property under the Code. No advance ruling has been or will be sought from the IRS regarding any matter discussed in this Offer to Purchase. Further, no opinion of counsel has been or will be obtained with regard to the offer.

The United States federal income tax treatment of a limited partner participating in the offer depends in some instances on determinations of fact and interpretations of complex provisions of United States federal income tax law for which no clear precedent or authority may be available. Accordingly, you should consult your tax advisor regarding the United States federal, state, local and foreign tax consequences of selling the interests in your partnership represented by your units pursuant to our offer or of a decision not to sell in light of your specific tax situation.

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Tax Consequences to Limited Partners Tendering Units for Cash.  The sale of a unit of limited partnership interest pursuant to this offer will be a taxable transaction for United States federal income tax purposes. You will recognize gain or loss on a sale of a unit of limited partnership interest of your partnership equal to the difference, if any, between (i) your “amount realized” on the sale and (ii) your adjusted tax basis in the unit sold. The “amount realized” with respect to a unit will be equal to the sum of the amount of cash received by you for the unit sold pursuant to the offer plus the amount of partnership liabilities allocable to your unit (as determined under Section 752 of the Code). Thus, your tax liability resulting from a sale of a unit could exceed the cash received upon such sale.

Adjusted Tax Basis.  If you acquired your units for cash, your initial tax basis in such units was generally equal to your cash investment in your partnership increased by your share of partnership liabilities at the time you acquired such units. Your initial tax basis generally has been increased by (i) your share of partnership income and gains, and (ii) any increases in your share of partnership liabilities, and has been decreased (but not below zero) by (i) your share of partnership cash distributions, (ii) any decreases in your share of partnership liabilities, (iii) your share of partnership losses, and (iv) your share of nondeductible partnership expenditures that are not chargeable to capital. For purposes of determining your adjusted tax basis in your units immediately prior to a disposition of your units, your adjusted tax basis in your units will include your allocable share of partnership income, gain or loss for the taxable year of disposition. If your adjusted tax basis is less than your share of partnership liabilities (e.g., as a result of the effect of net loss allocations and/or distributions exceeding the cost of your unit), your gain recognized with respect to a unit pursuant to the offer will exceed the cash proceeds realized upon the sale of such unit, and may result in a tax liability to you that exceeds the cash received upon such sale.

Character of Gain or Loss Recognized Pursuant to the Offer.  Except as described below, the gain or loss recognized by you on a sale of a unit pursuant to the offer generally will be treated as a long-term capital gain or loss if you held the unit for more than one year. Long-term capital gains recognized by individuals and certain other noncorporate taxpayers generally will be subject to a maximum United States federal income tax rate of 15%. If the amount realized with respect to a unit of limited partnership interest of your partnership that is attributable to your share of “inventory items” or “unrealized receivables” of your partnership exceeds the tax basis attributable to those assets, such excess will be treated as ordinary income. Among other things, “unrealized receivables” include depreciation recapture for certain types of property. In addition, the maximum United States federal income tax rate applicable to persons who are noncorporate taxpayers for net capital gains attributable to the sale of depreciable real property (which may be determined to include an interest in a partnership such as your units) held for more than one year is currently 25% (rather than 15%) with respect to that portion of the gain attributable to depreciation deductions previously taken on the property. Certain limitations apply to the use of capital losses.

If you tender a unit of limited partnership interest of your partnership in the offer, you will be allocated a share of partnership taxable income or loss for the year of tender with respect to any units sold. You will not receive any future distributions on units tendered on or after the date on which such units are accepted for purchase and, accordingly, you may not receive any distributions with respect to such accreted income. Such allocation and any partnership cash distributions to you for that year will affect your adjusted tax basis in your unit and, therefore, the amount of your taxable gain or loss upon a sale of a unit pursuant to the offer.

Passive Activity Losses.  The passive activity loss rules of the Code limit the use of losses derived from passive activities, which generally include investments in limited partnership interests such as your units. An individual, as well as certain other types of investors, generally may not use losses from passive activities to offset nonpassive activity income received during the taxable year. Passive losses that are disallowed for a particular tax year are “suspended” and may be carried forward to offset passive activity income earned by the investor in future taxable years. In addition, such suspended losses may be claimed as a deduction, subject to other applicable limitations, upon a taxable disposition of the investor’s interest in such activity. Accordingly, if your investment in your units is treated as a passive activity, you may be able to reduce gain from the sale of your units pursuant to the offer with passive losses in the manner described below. You are urged to consult your tax advisor concerning whether, and the extent to which, you have available “suspended” passive activity losses from your partnership or other investments that may be used to reduce gain from the sale of units pursuant to the offer.

Release and Assignment of Claims.  If you tender units in this offer, a portion of the price paid to you may be deemed a payment for your release and assignment of claims. The proper treatment for federal income tax purposes of your receipt of any deemed payments for your release and assignment of claims is uncertain. No opinion or assurance can be given that the IRS will not challenge the treatment of any deemed payments for your release and assignment of claims as additional consideration for the units, and assert that such amount should be treated as an ordinary income payment in exchange for your release and/or

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assignment of current and future claims. You should consult your tax advisor regarding the tax consequences to you with respect to your right to, and your receipt of, any deemed payments for your release and assignment of claims.

Information Reporting, Backup Withholding and FIRPTA.  If you tender any units, you must report the transaction by filing a statement with your United States federal income tax return for the year of the tender which provides certain required information to the IRS. The Information Agent may also be required to report the transaction to the IRS. To prevent the possible application of United States federal back-up withholding tax (currently, 28%) with respect to the payment of the offer consideration, you are generally required to provide us a completed Substitute IRS Form W-9, included with the letter of transmittal. Back-up withholding is not an additional tax. Any amounts withheld under the back-up withholding rules may be refunded or credited against your United States federal income tax liability, if any, provided that the required information is furnished to the IRS.

Gain realized by a foreign person on the sale of a unit pursuant to the offer will be fully subject to United States federal income tax under the Foreign Investment in Real Property Tax Act of 1980. In addition, if we acquire an interest held by a foreign person, we will be required to deduct and withhold 10% of the amount realized by such foreign person on the disposition. Amounts withheld would be creditable against a foreign person’s United States federal income tax liability and, if in excess thereof, a refund could be claimed from the IRS by filing a United States income tax return. Foreign persons must provide the appropriate IRS Form W-8 to the Information Agent.

State and Local Withholding.  If you tender any units pursuant to this offer, we may be required under state or local tax laws to deduct and withhold a portion of our offer price. You should consult your tax advisor concerning whether any state or local withholding would be required on a disposition of your units and whether such amounts may be available to you as a credit on your state or local tax returns.

Tax Consequences to the General Partner of Your Partnership and its Affiliates, including the Aimco Operating Partnership.  The general partner of your partnership and its affiliates will not recognize gain or loss in connection with this offer.

7.   Effects of the Offer

The general partner of your partnership is our affiliate and we have control over the management of your partnership. We also are affiliated with the company that currently manages the property owned by your partnership. In addition, we and our affiliates own 28,451 units, or 71.80%, of the outstanding limited partnership units of your partnership. Because we and our affiliate own a majority of the outstanding units and control your partnership’s general partner, we control the outcome of most voting decisions with respect to your partnership. In general, and subject to our fiduciary duties, we will vote the units owned by us in whatever manner we deem to be in our best interests, which may not be in the interest of other limited partners. This could (1) prevent non-tendering limited partners from taking action that they desire but that we oppose and (2) enable us to take action desired by us but opposed by non-tendering limited partners. We also are affiliated with the company that currently manages, and has managed for some time, the property owned by your partnership. In the event that we acquire a substantial number of units pursuant to this offer, removal of the property manager may become more difficult or impossible.

Distributions to Us.  If we acquire units in the offer, we will participate in any subsequent distributions to limited partners to the extent of the units purchased.

Partnership Status.  The rules regarding whether a partnership is treated as a “publicly traded partnership” taxable as a corporation are not certain. We believe that our purchase of units in accordance with the terms of our offer should not adversely affect the issue of whether your partnership is classified as a partnership for federal income tax purposes.

Business.  Our offer will not affect the operation of the property owned by your partnership. We will continue to control the general partner of your partnership and the property manager, both of which will remain the same. Consummation of the offer will not affect your agreement of limited partnership, the operations of your partnership, the business and property owned by your partnership or any other matter relating to your partnership, except it would result in us increasing our ownership of units. We have no current intention of changing the fee structure for your general partner or the manager of your partnership’s property.

Effect on Trading Market; Registration Under Section 12(g) of the Exchange Act.   If a substantial number of unitholders tender their units pursuant to the offer, the result will be a reduction in the number of limited partners in your partnership. In the

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case of certain kinds of equity securities, a reduction in the number of securityholders might be expected to result in a reduction in the liquidity and volume of activity in the trading market for the security. In the case of your partnership, however, there is no established public trading market for the units and, therefore, we do not believe a reduction in the number of limited partners will materially further restrict your ability to find purchasers for your units through secondary market transactions.

The units are registered under Section 12(g) of the Exchange Act, which means, among other things, that your partnership is required to file periodic reports with the Securities and Exchange Commission (“SEC”) and to comply with the SEC’s proxy rules. We do 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, your partnership could apply to de-register the units under the Exchange Act. Your partnership has 1,045 unitholders as of August 20, 2007. We are offering to purchase up to 4,358 units (which represents approximately 11% of total units outstanding) to assure that there is no reasonable likelihood that the partnership would have fewer than 300 unitholders as a result of the offer. See “The Offer — Section 18. Conditions of the Offer.”

Accounting Treatment.  Upon consummation of the offer, we will account for our investment in any acquired units under the purchase method of accounting. There will be no effect on the accounting treatment of your partnership as a result of the offer.

8.   Information Concerning Us and Certain of Our Affiliates

General.  We are AIMCO Properties, L.P., a Delaware limited partnership and the operating partnership of Aimco. Together with our subsidiaries, we conduct substantially all of the operations of Aimco, a Maryland corporation. Aimco is a real estate investment trust that owns and manages multifamily apartment properties throughout the United States. Aimco’s Class A Common Stock is listed and traded on the New York Stock Exchange under the symbol “AIV.” As of June 30, 2007, we owned or managed 1,216 apartment properties containing 209,507 apartment units located in 47 states, the District of Columbia and Puerto Rico. As of June 30, 2007, we:

•  owned an equity interest in and consolidated 156,958 units in 676 apartment properties, of which 156,240 units were also managed by us;

•  owned an equity interest in and did not consolidate 11,741 units in 101 apartment properties, of which 5,465 units were also managed by us; and

•  provided services to or managed, for third party owners, 40,808 units in 439 apartment properties, primarily pursuant to long term, non-cancelable agreements (including 37,283 units in 399 properties that are asset managed only, and not property managed), although in certain cases we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund.

Our general partner is AIMCO-GP, Inc., a Delaware corporation, which is a wholly owned subsidiary of Aimco. Our principal executive office is located at 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237, and our telephone number is (303) 757-8101.

The names, positions and business addresses of the directors and executive officers of Aimco (which is our affiliate), as well as a biographical summary of the experience of such persons for the past five years or more, are set forth on Annex I attached hereto and are incorporated herein by reference.

We and Aimco are both subject to the information and reporting requirements of the Exchange Act and, in accordance therewith, file reports and other information with the SEC relating to our business, financial condition and other matters, including the complete financial statements summarized below. Such reports and other information may be inspected at the public reference facilities maintained by the SEC at One Station Place, 100 F Street, N.E., Washington, D.C. 20549. Copies of such material can also be obtained from the Public Reference Room of the SEC in Washington, D.C. at prescribed rates. The SEC also maintains a site on the World Wide Web at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. In addition, information filed by Aimco with the New York Stock Exchange may be inspected at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005.

For more information regarding Aimco and the Aimco Operating Partnership, please refer to our Annual Report on Form 10-K for the year ended December 31, 2006 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2007

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(particularly the management’s discussion and analysis of financial condition and results of operations) and other reports and documents we have filed with the SEC.

Except as described in “The Offer — Section 9. Background and Reasons for the Offer,” “— Section 11. Conflicts of Interest and Transactions with Affiliates” and “— Section 14. Certain Information Concerning Your Partnership; Beneficial Ownership of Interests in Your Partnership,” neither we nor, to the best of our knowledge, any of the persons listed on Annex I attached hereto, (i) beneficially own or have a right to acquire any units, (ii) have effected any transaction in the units in the past 60 days, or (iii) have any contract, arrangement, understanding or relationship with any other person with respect to any securities of your partnership, including, but not limited to, contracts, arrangements, understandings or relationships concerning 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. Neither we nor our affiliates intend to tender any units beneficially owned in this offer.

9.   Background and Reasons for the Offer

General.  We are in the business of acquiring direct and indirect interests in apartment properties such as the property owned by your partnership. Our offer provides us with an opportunity to increase our ownership interest in your partnership’s property while providing you and other investors with an opportunity to liquidate your current investment.

As part of the settlement of the Nuanes and Heller litigation, we commenced cash tender offers in November 2003 and November 2004 to acquire limited partnership units in your partnership for $125.52 per unit and $359.55 per unit, respectively, and acquired 907 and 2,181 units, respectively. This offer is not being made as part of the settlement.

Alternative Transactions Considered by Us.  At the present time, we have decided to proceed with this offer. From time to time in the past, we have considered proposing a number of alternative transactions, including the purchase of your partnership’s property or a merger of your partnership in which you would receive cash in exchange for your units. We decided not to pursue these alternative transactions because, in each case, we determined that a tender offer would be a less expensive means of acquiring additional interests in your partnership. In the future, however, we may consider purchasing your partnership’s property or effecting such a merger. See “The Offer — Section 12. Future Plans of the Purchaser.” We also considered an offer to exchange units in your partnership for limited partnership interests in the Aimco Operating Partnership. However, because of the expense and delay associated with making such an exchange offer, we decided to make an offer for cash only. In addition, our historical experience has been that when we have offered limited partners an opportunity to receive cash or limited partnership interests in the Aimco Operating Partnership, the limited partners who tender usually prefer the cash option.

Determination of Offer Price and Valuation of Units.  Our offer price is based on our estimate of the proceeds that would be available for distribution to limited partners in the event of a sale of your partnership’s property. Our starting point in this process is the appraised value determined by KTR Valuation & Consulting Services, LLC, an independent third-party appraiser (“KTR”). In its report dated January 19, 2007, KTR determined a final market value for Fox Run Apartments of $102,300,000 as of January 19, 2007. For a more detailed description of the independent appraisal of your partnership’s property, see “The Offer— Section 9. Background and Reasons for the Offer — Summary of January 2007 Independent Appraisal.” A summary of KTR’s valuation for your partnership’s property is set forth below.

Our estimate of the gross property value for your partnership’s property is $102,300,000. To determine our offer price, we then calculated a net equity value for your partnership based on such gross property value by adding the value of the non-real estate assets of your partnership and deducting its liabilities, including the mortgage debt (including any prepayment penalty associated with such mortgage debt) and certain other costs as indicated below, each calculated as of July 31, 2007.

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Finally, we allocated 99% of this net equity value to limited partners, which is the percentage of net proceeds that would be paid to limited partners pursuant to your partnership’s agreement of limited partnership in the event of a sale of your partnership. The net equity value per unit determined in this manner as indicated below, resulting in an estimated net equity value per unit of $1,718.00.

Gross valuation of partnership properties	$	102,300,000
Plus: Cash and cash equivalents		272,882
Plus: Other partnership assets		618,140
Less: Loans to partners		(424,910	)
Less: Mortgage debt, including accrued interest		(29,498,396	)
Less: Debt prepayment penalty		(1,750,876	)
Less: Accounts payable and accrued expenses		(543,005	)
Less: Affiliate Payables		(179,523	)
Less: Contingency Reserve		(2,046,000	)
Estimated net valuation of your partnership		68,748,312
Percentage of estimated net valuation allocated to holders of units		99.00	%
Estimated net valuation of units	$	68,060,829
Total number of units		39,627
Estimated valuation per unit	$	1,718.00

Comparison of Offer Price to Alternative Consideration.  To assist holders of units in evaluating the offer, your general partner, which is our affiliate, has attempted to compare the offer price against: (a) all cash tender offer prices or private purchase prices since January 1, 2004 that the general partner has knowledge of, excluding this offer, and (b) prices at which the units have been sold on the secondary market that the general partner has knowledge of. The general partner of your partnership believes that analyzing the alternatives in terms of estimated value, based upon currently available data and, where appropriate, reasonable assumptions made in good faith, establishes a reasonable framework for comparing alternatives. Because the value of the consideration for alternatives to the offer is dependent upon varying market conditions, no assurance can be given that the estimated values reflect the actual range of possible values. The results of these comparative analyses are summarized in the chart below.

Comparison Table	Per Unit
Cash offer price	$	1,718.00
Alternatives
Highest prior cash tender offer or private purchase price	$	521.19	(1)
Highest price on secondary market	$	605.00	(2)

(1)	Highest prior cash tender offer or private purchase price offered since January 1, 2004.
(2)	Highest sale price on the secondary market since January 1, 2004, as reported by Direct Investments Spectrum and American Partnership Board.

Prior Tender Offers and Private Purchases.  In November 4, 2004, we commenced a tender offer to purchase units of your partnership at a price of $359.55 per unit (which was subsequently adjusted to $521.19 per unit by subsequent payment to tendering unitholders). We acquired 2,181 units, representing approximately 5.50% of the outstanding limited partner units of your partnership, pursuant to that offer.

From time to time, we become aware of tender offers by unaffiliated third parties to acquire units in your partnership in exchange for cash. Although we are not always informed when such third party offers commence or have occurred, your general partner is aware of the following third party offer in the past three years: (1) On March 22, 2006, Peachtree Partners and/or its assigns initiated a mini-tender offer for units in your partnership at an offer price of $400.00 per unit, less an administrative fee of $200.00 per tendering limited partner; (2) On October 20, 2006, Peachtree Partners and/or its assigns initiated a mini-tender offer for units in your partnership at an offer price of $450.00 per unit, less an administrative fee of $200.00 per tendering limited

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partner; (3) On February 9, 2007, Peachtree Partners and/or its assigns initiated a mini-tender offer for units in your partnership at an offer price of $500.00 per unit, less an administrative fee of $200.00 per tendering limited partner; and (4) On April 6, 2007, MPF-NY 2007, LLC, MPF Badger Acquisition Co., LLC, MPF Special Fund 8, LLC, MacKenzie Patterson Special Fund 7, LLC, MacKenzie Patterson Special Fund 5, LLC, MPF DeWaay Premier Fund, LLC, MPF DeWaay Premier Fund 3, LLC, MPF Flagship Fund 12, LLC, MPF Acquisition Co., LLC, MPF DeWaay Fund 5, LLC and SCM Special Fund, LLC initiated a tender offer for units in your partnership at an offer price of $521.00 per unit, less the amount of any distributions declared or made with respect to the units prior to the expiration date of such offer.

Since January 1, 2004, we have purchased in private transactions 104 units at a price of $125.52 per unit in 2004, 245 units at a price of $521.19 per unit in 2005, 5 units at a price of $521.19 per unit in 2006, 50 units at a price of $521.19 per unit on March 26, 2007, 7 units at a price of $521.19 per unit on June 14, 2007 and 8 units at a price of $521.19 per unit on July 27, 2007.

Prices on Secondary Market.  Secondary market sales information is not a reliable measure of value because of the limited number of any known trades. Except for offers made by us and unaffiliated third parties, privately negotiated sales and sales through intermediaries are the only means that may be available to a limited partner to liquidate an investment in units (other than our offer) because the units are not listed or traded on any securities exchange or quoted on Nasdaq, on the Electronic Bulletin Board, or in “pink sheets.” Secondary sales activity for the units, including privately negotiated sales, has been limited and sporadic.

Set forth below are the high and low secondary sales prices of units for the periods listed below, as reported by Direct Investments Spectrum (formerly known as The Partnership Spectrum), which is an independent, third-party source. The gross sales prices reported by Direct Investments 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 price. Direct Investments Spectrum represents only one source of secondary sales information, and other services may contain prices for the units that equal or exceed the sales prices reported by Direct Investments Spectrum. We do not know whether the information compiled by Direct Investments Spectrum is accurate or complete.

Sales Prices of Partnership Units, as Reported by Direct Investments Spectrum

	High		Low
Year Ending December 31, 2007 (through May 31):	$	605.00	$	595.00
Year Ended December 31, 2006:	$	395.00	$	265.00
Year Ended December 31, 2005:	$	289.57	$	266.00
Year Ended December 31, 2004:	$	211.11	$	207.05

Set forth in the table below are the high and low sales prices of units for the periods listed below, as reported by the American Partnership Board, which is an independent, third-party source. The gross sales prices reported by American Partnership Board 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 American Partnership Board represents one source of secondary sales information, and other services may contain prices for units that equal or exceed the sales prices reported by the American Partnership Board. We do not know whether the information compiled by the American Partnership Board is accurate or complete.

Sales Prices of Partnership Units, as Reported by The American Partnership Board

	High		Low
Year Ending December 31, 2007 (through July 31):	$	—	$	—
Year Ended December 31, 2006:	$	—	$	—
Year Ended December 31, 2005:	$	289.57	$	289.57
Year Ended December 31, 2004:	$	211.11	$	207.05

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     Summary of January 2007 Independent Appraisal.

Set forth below is a summary of the independent appraisal of Fox Run Apartments conducted in January 2007 by KTR. The summary below includes a description of the procedures followed by KTR, its findings and recommendations, bases for and methods of arriving at such findings and recommendations, instructions received from, or limitations imposed by (if any), us or our affiliates, and the conclusions reached by KTR in appraising the value of Fox Run Apartments. KTR concluded that the market value of the leased fee simple estate of Fox Run Apartments, as of January 19, 2007, is $102,300,000.

Selection and Qualifications of Independent Appraiser.  We hired KTR to estimate the market value of the leased fee estate of Fox Run Apartments, free and clear of financing, as of January 19, 2007, and to prepare a real estate appraisal report presenting the data, reasoning and analyses used in the appraisal process to develop its opinion of value. KTR is a real estate valuation, engineering and environmental due diligence firm and employs in-house staffs of appraisers and analysts. KTR is an affiliate of The First American Corporation.

We paid KTR a fee of $4,000.00 for the appraisal. During the prior two years, no material relationship has existed between KTR and your partnership or any of its affiliates, including Aimco Properties, L.P, although KTR has performed real estate appraisals for your partnership’s affiliates, including the Aimco Operating Partnership, from time to time. KTR has certified in its appraisal report that its compensation was not contingent upon the reporting of a predetermined value or direction in value that favors us, the amount of value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event.

KTR performed a complete appraisal of Fox Run Apartments. KTR has represented that its report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice as promulgated by the Appraisal Standards Board of the Appraisal Foundation, the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute and Title XI (and amendments) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 effective August 9, 1990. We furnished the appraiser with all of the necessary information requested by KTR in connection with the appraisal. The information furnished to the appraiser was true, correct and complete in all material respects. In preparing its valuation of Fox Run Apartments, KTR’s analysis included, without limitation, an inspection of the premises, interviews with knowledgeable market participants, a review of historical income and expense statements, the current rent roll and other relevant financial and market information. The summary set forth below describes the material conclusions reached by KTR based on the values determined under the valuation approaches and subject to the assumptions and limitations described below. KTR concluded that the market value of the fee simple estate of Fox Run Apartments, as of January 19, 2007, is $102,300,000.

Summary of Valuation Approaches and Methodologies Employed.  The following summary describes the material approaches and analyses employed by KTR in preparing the appraisal. KTR relied principally on the income capitalization approach to valuation and secondarily on the sales comparison approach. Although the sales comparison approach is considered a reliable method for valuing property, the income capitalization approach is the primary approach used for valuing income-producing property, such as your partnership’s property.

The purpose of the income capitalization approach is to value a property by analyzing the anticipated future income and expenses of the property over an anticipated investment (or holding) period. This approach is widely applied in appraising income-producing properties. Under this approach, the value of a property is estimated by deducting an appropriate vacancy and collection allowance rate and all applicable expenses from the property’s anticipated gross annual income to arrive at a projected net operating income (“NOI”), which is then capitalized at an interest rate (the capitalization rate) commensurate with the risk inherent in the ownership of the property. The reliability of this approach is dependent on the reliability of the net income estimate and the capitalization rate. There are two primary income capitalization methods: (1) direct capitalization analysis, which converts a single year’s NOI into an indication of value and (2) discounted cash flow analysis, which estimates the value of a property by discounting to present value the forecasted net income of the property over the course of an anticipated investment period and the estimated proceeds from a hypothetical sale of such property at the end of such investment period. KTR utilized only the direct capitalization method.

The estimated value of a property derived using the sales comparison approach represents the probable price at which a property would be sold by a willing seller to a willing buyer at arms-length as of the date of value. The sales comparison approach analyzes recent sales of comparable improved properties in surrounding or competing areas to derive units of comparison that are then used to indicate a value for the subject property. Adjustments are made to the sales prices of comparable properties for differences from the subject property, such as terms of financing, date of sale, location and physical characteristics. Obtaining data with a high degree of comparability is most important for this method. The reliability of this

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method is dependent upon the availability of comparable sales data, the verification of such sales data, the degree of comparability, the extent of adjustment necessary for differences and the absence of non-typical conditions affecting the sales prices.

The cost approach method estimates the replacement or reproduction cost of the improvements on a property, less the estimated depreciation (physical, functional and economic), plus the estimated market value of the land, in order to arrive at a final indication of value for a property. This approach is based on the premise that an informed purchaser would not pay more for a property than the cost of constructing a building of similar utility and condition. The cost approach method is considered a reliable indicator of value for (a) new properties, (b) special use properties and (c) properties where the cost of reproducing the improvements is easily and accurately quantified, and there is no external or economic obsolescence. KTR noted the physical deterioration of Fox Run Apartments due to age, normal wear and usage, and concluded that the cost approach would not be a reliable approach to value for the property due to the inherent inaccuracies and subjectivity involved in estimating the substantial degrees of physical deterioration.

Valuation Under Income Capitalization Approach.  Under the income capitalization approach, KTR performed a direct capitalization analysis to derive a value for Fox Run Apartments, which involved (1) calculating potential gross annual income from the dwelling units; (2) estimating vacancy and credit loss to arrive at the property’s annual effective gross income (“EGI”); (3) estimating operating expenses to arrive at the stabilized NOI; (4) developing the overall capitalization rate; and (5) dividing NOI by the overall capitalization rate to arrive at a value for Fox Run Apartments.

KTR performed a market rent analysis for the property to derive a projected annual rental income. The analysis included both a review of the subject’s current asking and actual rent rates as well as a comparison with comparable apartment properties. KTR calculated EGI by adding apartment rental collections to other income and then making adjustments, including adjustments based on an estimated stabilized physical vacancy of 4.0% and a 1.0% collection loss. Under this analysis, KTR arrived at an EGI of $9,726,235. Once the EGI was established, operating expenses were deducted from the EGI in order to arrive at an NOI of approximately $5,624,579. KTR performed a pro forma analysis of revenue and expenses for the property to derive the subject property’s stabilized NOI. KTR relied on the subject’s historical operating statements from 2003 through November 2006 and the budget for 2007 for this estimate. KTR derived an overall capitalization rate of 5.5% based upon analysis of comparable sales, which ranged from approximately 4.9% to 7.0%, and the average rates for institutional grade properties applied by institutional investors and advisors to real estate pension and portfolio funds when acquiring real estate, which ranged from approximately 3.5% to 8.0%. Using an overall capitalization rate of 5.5%, KTR determined that the direct capitalization method indicated a value of $102,300,000 (after rounding) for Fox Run Apartments.

Valuation Under Sales Comparison Approach.  KTR compared Fox Run Apartments with five local apartment complexes with similar characteristics that were sold between January 2006 and September 2006 and located in Fox Run Apartments’ real estate market area. The unit of comparison used was the sales price per unit, and all the comparable sales were analyzed on this basis. Although all of the comparables were of similar construction and were generally similar to Fox Run Apartments with respect to age, condition and amenities, KTR made adjustments to the sales price per unit of each comparable property to reflect differences from Fox Run Apartments in location, quality, condition and unit mix/average unit size. The most value influencing difference between the subject and the comparable sales is the amount of net operating income generated on a per unit basis. Based on the available data, KTR concluded that the sales prices per unit ranged from $103,543 to $144,964 after adjustments, with an average adjusted sales price of $131,998 per unit. The estimated capitalization rate for Fox Run Apartments is 5.5%. This is the rate reflected by two of the comparables whose adjusted prices per unit were $131,784 and $131,782. Noting that a similar subject value is suggested by these comparables, KTR considered the estimated unit value per unit for Fox Run Apartments to be $132,000. With 776 units at $132,000 per unit, KTR determined the market value of Fox Run Apartments using the sales comparison approach to be $102,400,000 (after rounding).

Reconciliation of Values and Conclusions of Appraisal.  The final step in the appraisal process was to reconcile the sales comparison approach and the income capitalization approach values to arrive at a final value conclusion. The reconciliation of the two approaches involved weighing the valuation techniques in relation to their substantiation by market and other sources of data, the relativity and applicability of the approaches to the property type, and the purpose of the valuation. KTR concluded a market value of $102,400,000 under the sales comparison approach and a market value of $102,300,000 under the income capitalization approach. After reconciling the various factors, KTR determined a final estimate of market value of $102,300,000 for Fox Run Apartments as of January 19, 2007 in its appraisal report dated March 9, 2007.

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Assumptions, Limitations and Qualifications of KTR’s Valuation.  In preparing the appraisal, KTR relied, without independent verification, on the accuracy and completeness of all information supplied or otherwise made available to it by or on behalf of the partnership. Except as set forth herein, neither we, any of our affiliates nor the partnership imposed any conditions or limitations on the scope of KTR’s investigation or the methods and procedures to be followed in preparing the appraisal. KTR’s appraisal report and opinion of value were made subject to the following assumptions and limiting conditions:

•  The information and data contained in the appraisal report that were obtained from public record and other reliable sources were assumed to be satisfactory evidence upon which the final conclusion of value was based;

•  Any sketches, plats, diagrams or previous surveys appearing in the report were only for the purpose of assisting the reader in visualizing the property;

•  All information known to us and relative to the valuation were assumed to be accurately furnished, and KTR assumed that there were no undisclosed leases, agreements, liens or other encumbrances affecting the use of the property;

•  Ownership and management were assumed to be competent and in responsible hands;

•  KTR did not assume responsibility for the accuracy of any information identified as being furnished or prepared by others, and such information was assumed to be reliable;

•  It was assumed that there were no substances such as asbestos, urea-formaldehyde foam insulation, other chemicals, toxic wastes, or other potentially hazardous materials in existence or present on or in the property;

•  No consideration was given to the effect of state, local or federal income and gains taxes or of occupancy, hotel, capital levy, gift, estate, succession, inheritance or similar taxes which may be imposed upon any owner, lessee, or mortgagee by reason of any sale, conveyance, transfer, leasing, hypothetication, mortgage, pledge or other disposition of the property; and

•  KTR assumed the accuracy of the square footage and unit mix as indicated on the rent roll and marketing brochures that were provided to KTR.

Availability of Appraisal Report.  You may obtain a full copy of KTR’s appraisal upon request, without charge, by contacting the Information Agent at one of the addresses or the telephone number on the back cover of this Offer to Purchase. Copies of the appraisal for the property are also available for inspection and copying at the principal executive offices of the partnership during regular business hours by any interested unitholder or his or her designated representative at his or her cost. In addition, a copy of the appraisal has been filed with the SEC as an exhibit to the Tender Offer Statement on Schedule TO and is available on the SEC’s site on the World Wide Web at http://www.sec.gov.

10.  Position of the General Partner of Your Partnership With Respect to the Offer

The general partner of your partnership is remaining neutral and makes no recommendation as to whether you should tender or refrain from tendering your units in the offer. The general partner of your partnership makes no recommendation with respect to the offer for the following reasons:

•  Tendering units pursuant to the offer would increase the voting power of Aimco and its affiliates, including the voting power with respect to the removal of the general partner of your partnership. A decision to remove, for any reason, the general partner of your partnership from its current position as a general partner of your partnership would result in a decrease or elimination of the substantial management fees paid to the general partner of your partnership for managing your partnership and to the general partner’s affiliates for managing the partnership;

•  The offeror is our affiliate and desires to purchase units at a low price, and you desire to sell the units at a high price. As an affiliate of the offeror, the general partner of your partnership has an indirect financial interest in the offer; and

•  The general partner is unable to make a recommendation because each limited partner’s circumstances may differ from those of other limited partners. These circumstances, which would impact the desirability of tendering units in the offer, include a limited partner’s financial position, his need or desire for liquidity, other financial opportunities available to him, and his tax position and the tax consequences to him of selling his units.

You must make your own decision whether or not to participate in any offer, based upon a number of factors, including several factors that may be personal to you, such as your financial position, your need or desire for liquidity, your preferences

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regarding the timing of when you might wish to sell your units, other financial opportunities available to you, and your tax position and the tax consequences to you of selling your units. Without quantifying or otherwise attaching any particular weight to any of the following factors or information, you may want to consider the following:

•  The offer gives you an opportunity to make an individual decision on whether to tender your units or to continue to hold them;

•  The offer price;

•  The offer price is based on an appraisal of your partnership’s property that was completed in January 2007, and may not reflect the current fair market value of these property;

•  The prices at which the units have recently sold, to the extent such information is available;

•  The trading market for your units may not be a reliable measure of value;

•  An analysis of possible alternative transactions, including a property sale, or a liquidation of the partnership;

•  The financial condition and results of operations of your partnership; and

•  The fact that if your partnership were sold — as opposed to continuing — the general partner (which is our affiliate) and the property manager (which is our affiliate) would not receive the substantial fees they currently receive.

You are encouraged to carefully review this Offer to Purchase and any other information available to you and to seek advice from your independent lawyer, tax advisor and/or financial advisor with respect to your particular circumstances before deciding whether or not to accept this offer.

Neither the general partner of your partnership or its affiliates have any plans or arrangements to tender any units. Except as otherwise provided in “The Offer — Section 12. Future Plans of the Purchaser,” the general partner does not have any present plans or proposals which relate to or would result in an extraordinary transaction, such as a merger, reorganization or liquidation, involving your partnership; a purchase or sale or transfer of a material amount of your partnership’s assets; or any changes in your partnership’s present capitalization, indebtedness or distribution policies. The general partner of your partnership and its affiliates will not recognize gain or loss for U.S. federal income tax purposes in connection with this offer. For information relating to certain relationships between your partnership and its general partner, on one hand, and Aimco and its affiliates, on the other, and conflicts of interests with respect to the tender offer, see “The Offer — Section 9. Background and Reasons for the Offer” and “— Section 11. Conflicts of Interest and Transactions with Affiliates.” See also “The Offer — Section 9. Background and Reasons for the Offer; Comparison to Alternative Consideration” for certain information regarding transactions with respect to units of your partnership.

11.   Conflicts of Interest and Transactions with Affiliates

Conflicts of Interest with Respect to the Offer.  The general partner of your partnership is an affiliate of Aimco. As a result, the general partner has substantial conflicts of interest with respect to the offer. As a consequence of our ownership of units, we may have incentives to seek to maximize the value of our ownership of units, which in turn may result in a conflict for your general partner in attempting to reconcile our interests with the interests of the other limited partners. The conflicts of interest include the fact that a decision to remove, for any reason, the general partner of your partnership from its current position as a general partner of your partnership would result in a decrease or elimination of the substantial management fees paid to the general partner of your partnership for managing your partnership. Additionally, we desire to purchase units at a low price and you desire to sell units at a high price. Such conflicts of interest in connection with the offer differ from those conflicts of interest that exist in connection with the general partner’s management of your partnership. Your general partner has filed a Solicitation/Recommendation Statement on Schedule 14d-9 with the SEC, which indicates that it is remaining neutral and making no recommendation as to whether limited partners should tender their units in the offer. YOU 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 YOUR UNITS.

Conflicts of Interest That Currently Exist for Your Partnership.  Conflicts of interest exist between the general partner of your partnership and its affiliates (including us), on the one hand, and you and the other limited partners of the partnership, on the other. The directors and officers of your general partner have fiduciary duties to manage the general partner in a manner beneficial to its stockholder, which is an affiliate of Aimco. At the same time, the general partner of your partnership has

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fiduciary duties to manage your partnership in a manner beneficial to all of the limited partners. Such conflicts of interest might arise in the following situations, among others:

•  The partnership pays fees and reimburses expenses to the general partner and its affiliates for costs incurred in managing and operating the partnership and its property. We and the general partner received total fees and reimbursements (excluding property management fees) of approximately $302,000 in 2004, $586,000 in 2005 and $624,000 in 2006. Total fees and reimbursements (excluding property management fees) for the six months ended June 30, 2007 were approximately $454,000. The property manager is entitled to receive five percent of gross receipts from the partnership’s property for providing property management services. It received management fees of approximately $417,000 in 2004, $439,000 in 2005 and $473,000 in 2006. Management fees for the six months ended June 30, 2007 were approximately $246,000. We have no current intention of changing the fee structure for your general partner or the manager of your partnership’s property.

•  In determining to sell a property owned by your partnership, the general partner takes into consideration, among other factors: (i) Aimco’s objectives, including its liquidity needs and its relative desire to retain or dispose of properties within its entire portfolio, including the property owned by your partnership, and (ii) the investment objectives of your partnership. See “The Offer — Section 14. Certain Information Concerning Your Partnership; Investment Objectives and Policies; Sale or Financing of Investments.”

•  Decisions of the general partner with respect to the amount and timing of cash expenditures, borrowings, issuances of additional interests and reserves in any quarter will affect whether or the extent to which there is available cash to make distributions in a given quarter.

Competition Among Properties.  Because Aimco and your partnership both invest in apartment properties, these properties may compete with one another for tenants. Furthermore, you should bear in mind that Aimco may acquire properties in general market areas where your partnership’s property is located. We believe that this concentration of properties in a general market area will facilitate overall operations through collective advertising efforts and other operational efficiencies. In managing Aimco’s properties, we will attempt to reduce conflicts between competing properties by referring prospective customers to the property considered to be most conveniently located for the customer’s needs.

Future Offers.  We are not obligated to make another tender offer for units in your partnership. We have no current plans to conduct future tender offers for the units in your partnership, but our plans may change based on future circumstances, including tender offers made by third parties. Any such future offers that we make could be at prices that are more or less than the current offer price.

Transactions with Affiliates.  Your partnership has no employees and is dependent on the general partner and us for the management and administration of all partnership activities. The partnership agreement provides for certain payments to us for services and reimbursement of certain expenses incurred by us on behalf of the partnership.

We and the general partner of your partnership are entitled to receive 5% of gross receipts from the partnership’s property for providing property management services, and received management fees of approximately $417,000 in 2004, $439,000 in 2005 and $473,000 in 2006. Management fees for the six months ended June 30, 2007 were approximately $246,000. We were eligible to receive reimbursement of accountable administrative expenses amounting to approximately $205,000 in 2004, $431,000 in 2005, $331,000 in 2006 and $149,000 for the six months ended June 30, 2007. The portion of these reimbursements included in investment property is construction management services provided by an affiliate of the general partner of approximately $66,000 in 2004, $292,000 in 2005, $193,000 in 2006 and approximately $64,000 during the six months ended June 30, 2007. At June 30, 2007 approximately $146,000 of reimbursements for services remain unpaid.

During the year ended December 31, 2005, an affiliate of the general partner advanced to the partnership approximately $1,288,000 to cover capital improvements and operations at Fox Run Apartments. There were no advances from the general partner during the years ended December 31, 2006 or 2004, and there were no advances from the general partner for the six months ended June 30, 2007. Approximately $388,000 of outstanding advances and accrued interest were repaid during the year ended December 31, 2006 from amounts released from a restricted escrow. There were no such repayments during the year ended December 31, 2005. During the six months ended June 30, 2007, the partnership repaid approximately $685,000, which included approximately $91,000 of interest. Interest is charged at prime plus 2% (10.25% at June 30, 2007). Interest expense was approximately $114,000 and $51,000 for the years ended December 31, 2006 and 2005, respectively. There were no advances from the general partner or associated interest expense during the year ended December 31, 2004. Interest expense was

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approximately $41,000 for the six months ended June 30, 2007. Total advances and accrued interest of approximately $421,000 remain unpaid at June 30, 2007.

The partnership agreement provides for a fee equal to 7.5% of “net cash flow from operations,” as defined in the partnership agreement, to be paid to the general partner for executive and administrative management services. One half of this fee is to be accrued and not paid unless the limited partners have received distributions equal to a 5% cumulative annual return on their adjusted capital investment as defined in the partnership agreement. This return criteria has not been met. During the six months ended June 30, 2007, a fee of approximately $22,000 was earned and is included in due to affiliates. During the years ended December 31, 2006, 2005 and 2004, no fees were earned or paid. In addition, at June 30, 2007, the partnership has accrued approximately $21,000 of partnership management fees, representing one half of the fees earned in 2000, 2001 and 2002 which are included in due to affiliates on the accompanying consolidated balance sheet. This amount plus one half of the fee earned during the six months ended June 30, 2007 will remain accrued until the criteria for payment has been met.

The partnership insures its property up to certain limits through coverage provided by Aimco which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty, general liability and vehicle liability. The partnership insures its property above the Aimco limits through insurance policies obtained by Aimco from insurers unaffiliated with the general partner. During the years ended December 31, 2006, 2005 and 2004, the partnership paid Aimco and its affiliates approximately $179,000, $104,000 and $97,000, respectively, and approximately $242,000 for the six months ended June 30, 2007 for hazard insurance coverage and fees associated with policy claims administration. Additional charges will be incurred by the partnership during 2007 as other insurance policies renew later in the year.

12.   Future Plans of the Purchaser

As described above under “The Offer — Section 9. Background and Reasons for the Offer,” your general partner is our affiliate and, therefore, we have the ability to control the management of your partnership. In addition, we are affiliated with the manager of your partnership’s property. We currently intend that, upon consummation of the offer, we will hold the units acquired and your partnership will continue its business and operations substantially as they are currently being conducted. The offer is not expected to have any effect on partnership operations.

Although we are not obligated to do so, we may make future tender offers. However, we have no current plans to conduct future tender offers for units in your partnership. We may acquire additional units or sell units after completion or termination of the offer. Any acquisition may be made through private purchases, through one or more future tender or exchange offers or by any other means deemed advisable. Any acquisition may be at a price higher or lower than the price to be paid for the units purchased pursuant to this offer, and may be for cash, limited partnership interests in the Aimco Operating Partnership or other consideration. We may consider selling some or all of the units we acquire pursuant to this offer to persons not yet determined, which may include our affiliates. We may also attempt to buy your partnership’s property or attempt to acquire additional units through merger or other consolidation, although we have no present intention to do so. There can be no assurance, however, that we will initiate or complete, or will cause your partnership to initiate or complete, any subsequent transaction during any specific time period following the expiration of the offer or at all.

Except as set forth herein, we do not have any present plans or proposals which relate to or would result in an extraordinary transaction, such as a merger, reorganization or liquidation, involving your partnership; a purchase or sale or transfer of a material amount of your partnership’s assets; any changes in composition of your partnership’s senior management or personnel or their compensation; any changes in your partnership’s present capitalization, indebtedness or distribution policy; or any other material changes in your partnership’s structure or business. We or our affiliates may loan funds to your partnership. If any such loans are made, upon default of such loans, we or our affiliates could seek to enforce remedies that are available to us under applicable law. However, we expect that, consistent with your general partner’s fiduciary obligations, the general partner will seek and review opportunities, including opportunities identified by us, to engage in transactions which could benefit your 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. As discussed under “The Offer — Section 14. Certain Information Concerning Your Partnership; Investment Objectives and Policies; Sale or Financing of Investments,” the general partner regularly evaluates the real estate and capital markets. The general partner may consider refinancing the partnership’s existing indebtedness to the extent that the general partner is able to obtain a lower interest rate or if such indebtedness is approaching maturity. Furthermore, in the event that the general partner receives an attractive offer for your partnership’s property, the general partner would give due consideration to such an offer.

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We have been advised that the possible future transactions the general partner might consider on behalf of your 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. 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 its limited partners, we will participate in those benefits to the extent of our ownership of units. The agreement of limited partnership prohibits limited partners from voting on actions taken by the partnership, unless otherwise specifically permitted by the partnership agreement. Limited partners may vote on a liquidation, and if we acquire a substantial number of units in this offer, we and our affiliates will be able to significantly influence or control the outcome of any such vote. Our primary objective in seeking to acquire the units 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.

13.   The Lawsuit and the Settlement

Background.  In March 1998, holders of limited partnership units in the partnerships managed by affiliates of Insignia Financial Group (collectively, “Insignia”) commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the “Nuanes action”) in the Superior Court of the State of California for the County of San Mateo (the “Court”). The plaintiffs named as defendants, among others, your partnership, its general partner and several of their affiliated partnerships and corporate entities, as well as Aimco, who had announced a merger with Insignia. The action originally asserted claims on behalf of a putative class of limited partners in over 50 limited partnerships, including your partnership (collectively, the “Partnerships”) and derivatively on behalf of those same Partnerships (which are named as nominal defendants) challenging, among other things, the acquisition of interests in certain general partner entities by Insignia; past tender offers by Insignia to acquire limited partnership units; Insignia’s management of the Partnerships; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into Aimco (hereinafter, the “Insignia Merger”).

Procedural History.  On June 25, 1998, your general partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs filed an amended complaint. The general partner filed demurrers to the amended complaint which were heard in February 1999. Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement, settling claims, subject to court approval, on behalf of your partnership and all limited partners who owned units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Court, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing, the Court received various objections to the settlement, including a challenge to the Court’s preliminary approval based upon the alleged lack of authority of prior lead counsel to enter the settlement.

On December 14, 1999, the general partner and its affiliates terminated the proposed settlement. In February 2000, counsel for some of the named plaintiffs filed a motion to disqualify plaintiffs’ lead and liaison counsel who negotiated the proposed settlement on behalf of plaintiffs. On June 27, 2000, the Court entered an order disqualifying them from the case. An appeal was taken from part of the June 27, 2000 order on October 5, 2000. Subsequently, certain plaintiffs, specifically, BEJ Equity Partners and J-B Investment Partners, withdrew as plaintiffs.

On December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the putative class. Plaintiffs filed a third amended complaint on January 19, 2001 and the general partner and its affiliates filed a demurrer to the third amended complaint. On July 10, 2001, the Court issued an order granting in part and denying in part defendants’ demurrer. Among other things, the Court sustained defendants’ demurrer without leave to amend as to those derivative claims involving partnerships in which the named plaintiffs did not own an interest. The Court subsequently denied plaintiffs’ motion for reconsideration.

The fourth amended complaint was filed on September 7, 2001. It was brought by plaintiffs who owned interests in four of the Partnerships. Plaintiffs Jeffrey Homburger, Sean O’Reilly and Norman and Doris Rosenberg formally withdrew from the case on August 20, 2001. The general partner and affiliated defendants filed a demurrer to the fourth amended complaint, which the Court granted in part on January 28, 2002. The Court dismissed without leave to amend plaintiffs’ state securities fraud claim under California’s Corporate Code Section 25400(b), plaintiffs’ contract claim arising out of the partnership agreements, plaintiffs’ derivative claim for statutory unfair competition as to those partnerships in which plaintiffs lack representation, plaintiffs’ conversion claim and plaintiffs’ claim under California’s Corporation Code Section 15636.

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Only some of the remaining claims in the fourth amended complaint relate to the partnership. Plaintiffs alleged that affiliates of the general partner have issued false and misleading tender offers beginning in 1998 and continuing through to the present for units in the partnership. Plaintiffs allege violations of state securities fraud statutes and common law fraud against both Aimco and Insignia. Specifically, plaintiffs allege that the tender offers have been misleading because they failed to disclose:

•  that third parties would not use a property’s historical income, but would instead use a property’s projected income, in calculating a property’s value based on the capitalization method.

•  that the property income figures used in the capitalization method were artificially lower because Aimco charges management fees allegedly in excess of the market.

•  that Aimco allegedly deducted all capital expenditures from property income despite an alleged Aimco policy of deducting only $250 to $300 per apartment unit.

•  the rating for the condition of each property, any adjustment made to the capitalization rate as a result, the interest rate on mortgage debt for each property and any corresponding adjustments in the capitalization rates.

•  that Aimco allegedly negotiated lower capitalization rates for valuing properties it owns in connection with a revolving credit facility.

•  that Aimco failed to disclose that the valuation methods and/or policies it used for its own business purposes allegedly differ from those used in the tender offers.

•  internal valuations of the properties it used in connection with the Insignia merger or the capitalization rates used in connection with those valuations.

Plaintiffs alleged that the general partner breached its fiduciary duty by assisting Insignia and Aimco in making the tender offers by providing financial information, failing to correct supposedly misleading information given to unitholders, recommending that the prices offered were fair and preventing third parties from making tender offers. Plaintiffs have also included a statutory unfair competition claim against all the defendants, a claim for tortious interference with contract, unjust enrichment and judicial dissolution.

The Heller Complaint.  During the third quarter of 2001, a complaint was filed against the same defendants that are named in the Nuanes action, captioned Heller v. Insignia Financial Group, Inc., et al. (the “Heller action”). The Heller complaint was filed in order to preserve derivative claims that were dismissed without leave to amend in the Nuanes action by the Court’s July 10, 2001 order. The first amended complaint in the Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty; unfair competition; conversion, unjust enrichment; and judicial dissolution. On January 28, 2002, however, the Court, on motion by the general partner and its affiliates, struck the Heller complaint as a violation of its July 10, 2001 order in the Nuanes action. On March 27, 2002, plaintiffs in the Heller action filed a notice of appeal of the Court’s January 28, 2002 order striking the complaint.

The Settlement of the Nuanes and Heller Complaints.  On December 20, 2002, the parties to the above-entitled litigation executed a Stipulation of Settlement of the two actions. That settlement was the result of over one year of negotiations and the involvement of two separate settlement judges. Class counsel and defendants’ counsel first met with the Honorable William J. Cahill, Retired California Superior Court Judge, on two separate occasions. Counsel also met on four separate occasions with the Honorable Margaret J. Kemp, California Superior Court Judge, before reaching a settlement in principle. The parties initially met with Judge Cahill on two occasions in the fall of 2000, but were ultimately unsuccessful in reaching a definitive settlement agreement. At the Court’s direction, they renewed formal settlement discussions before Judge Kemp. The parties first attended a settlement conference before Judge Kemp in September or October 2002 and then subsequently met with her on October 28, 2002, November 26, 2002 and December 2, 2002. The parties reached final agreement on the material terms of the settlement at the last settlement conference with Judge Kemp on December 2, 2002 and put the terms of that agreement on the record in open court.

In each of the conferences described above, counsel from Lieff Cabraser Heimann & Bernstein LLP, Farella Braun & Martel LLP & Berman Devalerio Pease & Tobacco attended on behalf of the named plaintiffs and the putative settlement class; counsel from Skadden Arps Slate Meagher & Flom LLP attended on behalf of Aimco and its affiliated entities, including your general partner, and Orrick Herrington & Sutcliffe attended on behalf of the remaining defendants. Former Aimco Executive

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Vice President Patrick Foye also attended each of these meetings. Mr. Vincent Gresham of the Law Offices of Vincent Gresham also participated on behalf of plaintiffs and the putative settlement class in those settlement discussions before the Hon. Cahill, Retired. At these meetings, discussions included possible transactions that could provide liquidity to investors and form the basis of a settlement, the use of a settlement fund and the amount of such fund, the timing and distribution of any settlement fund, selection and use of an appraiser and disclosures that would accompany any contemplated transaction(s). The participants considered but ultimately rejected a merger or roll-up of the various partnerships as possible alternatives to cash tender offers. The parties ultimately concluded, however, that a merger or roll-up could be potentially complicated and time consuming and that a cash tender offer would be a less coercive form of providing liquidity to those investors who desired it.

Terms of the Settlement.  Under the terms of the settlement, we made cash tender offers for all outstanding limited partnership interests in your partnership and 40 other partnerships (the “Tender Offer Partnerships”) and accompanied each of those offers with executive summaries of appraisals of partnership properties prepared by an independent appraiser appointed by the Court. Our affiliate has paid 50% of the costs of the appraisals, with the other 50% paid from the settlement fund. The appraiser was paid $619,100 for the appraisals. Under the settlement, we had the option of making a second round of tender offers (in our sole and absolute discretion) to purchase all remaining outstanding limited partnership interests, at the same price, or at a higher or lower price, within 18 months of the order finally approving the settlement. In November and December 2004, we commenced a second round of cash tender offers for all outstanding limited partnership units in 14 Tender Offer Partnerships. That 18-month period has expired, and this offer does not constitute one of the second round of tender offers.

In addition, as part of the settlement, we agreed to create a settlement fund for the benefit of settlement class members in the principal amount of $9.9 million. The settlement class members consist of all limited partners in the Tender Offer Partnerships, including your partnership, who owned units as of December 20, 2002, and who did not validly request exclusion from the settlement. After deducting attorneys’ fees and other settlement costs, including a portion of the costs of appraisal and certain costs of administration of the settlement fund, we allocated the remaining amount in the settlement fund among the Tender Offer Partnerships, pursuant to the terms of the settlement, pro rata based on partnership revenue for the year ended December 31, 2002 allocable to units held by members of the settlement class, as set forth below:

			(C)
			Ownership				Allocated
			Percentage of		(D)		Portion of
(A)	(B)		Settlement		Adjusted		Settlement
Partnership	Revenue(1)		Class(2)		Revenue(3)		Fund(4)
Angeles Income Properties, Ltd. II	$	6,721,398		38.11%	$	2,561,680.99	2.12	%
Angeles Income Properties, Ltd. III		757,234		47.99%		363,400.46	0.30	%
Angeles Income Properties, Ltd. 6		3,314,969		57.18%		1,895,539.00	1.57	%
Angeles Opportunity Properties, Ltd.		2,487,492		50.42%		1,254,256.40	1.04	%
Angeles Partners VII		1,382,326		32.28%		446,158.51	0.37	%
Angeles Partners IX		3,053,411		32.79%		1,001,090.64	0.83	%
Angeles Partners X		2,363,419		40.94%		967,701.17	0.80	%
Angeles Partners XI		8,102,088		37.05%		3,002,068.40	2.49	%
Angeles Partners XII		17,579,608		30.85%		5,423,897.42	4.50	%
Century Properties Fund XIV		5,754,231		33.27%		1,914,451.55	1.59	%
Century Properties Fund XV		7,891,876		35.11%		2,770,502.79	2.30	%
Century Properties Fund XVI		3,129,310		38.59%		1,207,704.29	1.00	%
Century Properties Fund XVII		13,989,178		39.81%		5,568,998.68	4.62	%
Century Properties Fund XVIII		4,652,589		44.57%		2,073,721.09	1.72	%
Century Properties Fund XIX		15,838,890		41.77%		6,615,207.49	5.48	%
Century Properties Growth Fund XXII		18,750,167		44.10%		8,268,717.87	6.86	%
Consolidated Capital Growth Fund		11,095,122		35.45%		3,933,281.02	3.26	%
Consolidated Capital Institutional Properties		17,492,318		34.85%		6,095,971.72	5.05	%
Consolidated Capital Institutional Properties/2		4,531,076		50.40%		2,283,507.96	1.89	%
Consolidated Capital Institutional Properties/3		11,898,507		46.92%		5,583,341.99	4.63	%

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			(C)
			Ownership				Allocated
			Percentage of		(D)		Portion of
(A)	(B)		Settlement		Adjusted		Settlement
Partnership	Revenue(1)		Class(2)		Revenue(3)		Fund(4)
Consolidated Capital Properties III		3,319,845		48.56%		1,612,222.94	1.34	%
Consolidated Capital Properties IV		26,375,116		43.55%		11,486,890.81	9.52	%
Consolidated Capital Properties VI		1,790,898		49.39%		884,610.64	0.73	%
Davidson Diversified Real Estate I, L.P.		926,289		57.35%		531,230.56	0.44	%
Davidson Diversified Real Estate II, L.P.		6,679,248		50.21%		3,353,945.59	2.78	%
Davidson Diversified Real Estate III, L.P.		4,914,862		59.79%		2,938,470.22	2.44	%
Davidson Growth Plus, L.P.		5,497,496		42.55%		2,339,052.86	1.94	%
Davidson Income Real Estate, L.P.		4,824,647		55.50%		2,677,466.62	2.22	%
Fox Strategic Housing Income Partners		2,905,478		59.32%		1,723,635.91	1.43	%
Johnstown/Consolidated Income Partners		1,109,711		45.50%		504,939.49	0.42	%
Multi-Benefit Realty Fund 87-1		3,584,756
Class A Investors		1,993,125		35.01%		697,750.93	0.58	%
Class B Investors		1,591,632		47.59%		757,524.59	0.63	%
National Property Investors III		8,886,583		25.79%		2,291,879.79	1.90	%
National Property Investors 4		7,248,900		24.52%		1,777,282.20	1.47	%
National Property Investors 5		4,610,576		36.17%		1,667,480.41	1.38	%
National Property Investors 6		10,168,298		34.73%		3,531,813.61	2.93	%
National Property Investors 7		7,235,037		31.17%		2,255,187.60	1.87	%
National Property Investors 8		4,334,235		38.98%		1,689,580.96	1.40	%
Shelter Properties I Limited Partnership		4,908,445		20.51%		1,006,722.11	0.83	%
Shelter Properties II Limited Partnership		5,148,389		29.25%		1,505,669.73	1.25	%
Shelter Properties III Limited Partnership		5,155,756		35.20%		1,814,826.22	1.50	%
Shelter Properties IV Limited Partnership		9,682,744		31.49%		3,048,820.05	2.53	%
Shelter Properties V Limited Partnership		13,237,273		28.68%		3,796,475.63	3.15	%
Shelter Properties VI Limited Partnership		8,475,852		34.45%		2,920,007.57	2.42	%
Shelter Properties VII Limited Partnership		1,497,429		37.87%		567,007.84	0.47	%
Total	$	313,303,073			$	120,611,694.00	100.00	%

(1)	For the year ended December 31, 2002.
(2)	Excludes units owned by Aimco and its affiliates and other limited partners who have requested exclusion from the settlement class.
(3)	Determined, for each partnership, by multiplying the amount of revenue (column (B)) by the percentage of outstanding units held by members of the settlement class (column (C)).
(4)	Determined, for each partnership, by dividing the amount of adjusted revenue (column (D)) by the total amount of adjusted revenue for all partnerships.

The amount allocated to a Tender Offer Partnership was then divided by the total number of outstanding units owned by settlement class members in such Tender Offer Partnership (excluding units held by us and our affiliates), and the resulting amount was included in the offer price for units in that Tender Offer Partnership. For each unit validly tendered in the offers and accepted by us, an amount equal to the portion of the settlement fund included in the per unit offer price was deducted from the settlement fund and paid to us (other than units tendered by limited partners who have requested exclusion from the settlement class). All limited partners who tendered their units in response to the offers received the same price per unit, including those persons who may have requested exclusion from the settlement class.

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Any balance remaining will be paid to settlement class members who have retained any units based on the allocation method used in the litigation settlement offers, provided that the Court’s order approving the settlement and entering judgment thereto is affirmed on appeal and is final. If the Court’s order is reversed or vacated by virtue of the appeal, however, you will not be entitled to receive a pro rata share of the settlement fund.

The general partners of the Tender Offer Partnerships have also agreed, as part of the settlement, to waive their right to seek reimbursement and/or indemnification for the full amount of fees and costs incurred in the defense of the class and derivative litigation; provided, however, that they may charge fees and costs to your partnership and the other partnerships involved in the litigation in an amount not to exceed $1,500,000 (which is approximately 50% of the outstanding fees and costs).

In consideration for the terms described above, plaintiffs and settlement class members agreed, among other things, to dismiss the Nuanes action and the Heller action with prejudice, release the defendants from all liability with respect to all claims and causes of action, whether brought individually, on behalf of a class, or derivatively, whether known or unknown, that have been asserted or that could have been asserted that arise out of or relate to (i) those matters and claims set forth in the complaints in the Heller and Nuanes actions, (ii) ownership of one or more units in any of the Tender Offer Partnerships, (iii) the purchase, acquisition, holding, sale, tender or voting of one or more units in any of the Tender Offer Partnerships, and (iv) any of the facts, circumstances, allegations, claims, causes of action, representations, statements, reports, disclosures, transactions, events, occurrences, acts, omissions or failures to act, of whatever kind or character whatsoever, irrespective of the state of mind of the actor performing or omitting to perform the same, that have been or could have been alleged in any pleadings, amended pleading, argument, complaint, amended complaint, brief, motion, report or filing in either the Nuanes action or the Heller action, provided, however, that the released claims are not intended to include any unrelated claims that are unique to a particular settlement class member (e.g., a settlement class member slips and falls on property owned by one of our affiliates, loses or did not receive a distribution check distributed to other limited partners in your partnership, or is an employee and has an employee related claim). Settlement class members also covenanted and agreed not to bring any action, claim, suit, or proceeding against any of the defendants in the class and derivative litigation that concerns any of the matters which are the subject of the settlement and that the stipulation of settlement will act as a bar to any such claim, action, suit or proceeding. The plaintiffs and settlement class members also agreed that they would not oppose a request that the Court withdraw the finding regarding Robert A. Stanger & Co. made in the June 27, 2000 order disqualifying lead and liaison counsel.

Under the terms of the settlement, neither we nor our affiliates admit to any wrongdoing, and we deny liability under all claims brought in the litigation. The final settlement of the lawsuit is the product of good faith, arm’s length negotiations between settlement class counsel and counsel for the defendants. These negotiations resulted in the settlement set forth in the Stipulation.

Proceedings Related To The Settlement.  On April 4, 2003, the Court preliminarily approved the settlement and, on June 13, 2003, entered an order finally approving the settlement and dismissing both the Heller and Nuanes litigation with prejudice. On August 12, 2003, an objector filed an appeal of the court’s order approving the settlement and is seeking to reverse or vacate the Court’s order and the judgment entered thereto. On November 24, 2003, the objector appealing the settlement and judgment entered thereto filed an application requesting the Court order Aimco to withdraw the settlement tender offers, refrain from making further offers pending the appeal and auction any units tendered to third parties. The objector contended that our prior offer did not conform with the terms of the Settlement. Alternatively, counsel for the objector has requested the Court on behalf of a settlement class member to order Aimco to pay all non-tendering settlement class members their pro rata share of the Settlement Fund whether or not the settlement and judgment entered thereto is vacated on appeal and to notify settlement class members that the releases and covenant not to sue are not binding unless the settlement and judgment entered thereto is affirmed on appeal. On December 18, 2003, the Court heard oral argument on the applications brought on behalf of the objector and denied them in their entirety. On February 23, 2004, an appeal was also taken from certain portions of the Court’s December 2003 orders denying injunctive relief in connection with the settlement offers and assessing fees against objector’s counsel for the Court’s use of a referee.

On March 21, 2005, the Court of Appeals issued opinions in both pending appeals. With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial court’s order and remanded to the trial court for further findings on the basis that the “state of the record is insufficient to permit meaningful appellate review.” The matter was transferred back to the trial court on June 21, 2005. With regard to the second appeal, the Court of Appeals reversed the order assessing fees against objector’s counsel for the Court’s use of a referee. In addition, on April 26, 2005, the Court of Appeals lifted the stay of a pending appeal related to the Heller action and the trial court’s order striking the complaint. With respect to the related Heller

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appeal, that had been previously stayed while the appeal of the settlement was pending, the Court of Appeals reversed the trial court’s order striking the first amended complaint on July 28, 2005.

On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion. On June 30, 2006, the trial court entered an order reaffirming its approval of the class action settlement of both the Nuanes and Heller actions and entered judgment thereto. The substantive terms of the settlement agreement remain unchanged. The trial court also entered supplemental orders on July 1, 2006, denying Objector’s Motion to File a Complaint in Intervention, Objector’s Motion for Leave of Discovery and Objector’s Motion to Dissolve the Anti-Suit Injunction. Notice of Entry of Judgment was served on July 10, 2006 and Objector filed another appeal on August 31, 2006, challenging the Court’s various orders, including its June 30, 2006 order finally approving the settlement and entering judgment thereto. On December 14, 2006, Objector filed his Appellant’s Brief.

The general partner of your partnership and its affiliates, as well as counsel for the settlement class, both filed Respondents’ Briefs on May 17, 2007. On August 3, 2007, Objector filed reply briefs. No hearing has been scheduled on the matter.

14.   Certain Information Concerning Your Partnership

General.  Your partnership was organized on February 14, 1983 under the laws of the State of California. Its primary business is real estate ownership and related operations. Your partnership was formed for the purpose of making investments in income-producing commercial and residential real estate. Your partnership’s investment portfolio currently consists of one residential apartment complex. Your partnership has 1,045 limited partners as of August 20, 2007. The general partner of your partnership is Angeles Realty Corporation II, which is an affiliate of Aimco. Our affiliate serves as manager of the property owned by your partnership.

There are 39,627 units outstanding, which are held of record by 1,045 limited partners as of August 20, 2007. The general partner’s principal executive offices are located at 55 Beattie Place, P.O. Box 1089, Greenville, South Carolina 29602, and our telephone number is (864) 239-1000.

For additional information about your partnership, please refer to its annual report, particularly Item 2 of Form 10-KSB, which contains detailed information regarding the property owned, including mortgages, rental rates and taxes. In addition, your partnership is subject to the information and reporting requirements of the Exchange Act and information about your partnership can be obtained in the same manner as information can be obtained about us, as set forth in “The Offer — Section 8. Information Concerning Us and Certain of Our Affiliates.”

Investment Objectives and Policies; Sale or Financing of Investments.  In general, your general partner (which is our affiliate) regularly evaluates the partnership’s property by considering various factors, such as the partnership’s financial position and real estate and capital markets conditions. The general partner monitors a property’s specific locale and sub-market conditions (including stability of the surrounding neighborhood), evaluating current trends, competition, new construction and economic changes. It oversees the operating performance of the property and continuously evaluates the physical improvement requirements. In addition, the financing structure for the property (including any prepayment penalties), tax implications, availability of attractive mortgage financing to a purchaser, 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 the partnership property. Although the future operating results of your partnership and future sales price of the property owned by your partnership are uncertain, the operating performance of your partnership’s property may improve in the future or the private resale market for properties could improve over time, which, in turn, may result in higher property values, making a sale of your partnership’s property a more attractive option in the future. Such values, however, are also a function of the interest rate environment at the time. Another significant factor considered by your general partner is the likely tax consequences of a sale of a property for cash. Such a transaction would likely result in tax liabilities for many limited partners.

Term of Your Partnership.  Under your partnership’s agreement of limited partnership, the term of the partnership will continue until December 31, 2035, unless sooner terminated as provided in the agreement or by law.

Capital Replacements.  Your partnership has an ongoing program of capital improvements, replacements and renovations, including carpet replacement, structural improvements, building refurbishments, general enhancements, parking lot resurfacing and other replacements and renovations in the ordinary course of business. The capital expenditures will be incurred only if cash is available from operations or from partnership reserves. Although there can be no assurance as to the effect of

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capital expenditures on the future performance of the property, these expenditures are expected to improve the desirability of the property to tenants.

Fox Run Apartments.  During the six months ended June 30, 2007, the partnership completed approximately $764,000 of capital improvements at Fox Run Apartments, primarily consisting of concrete, heating and structural upgrades, kitchen and bath resurfacing, installation of washers and dryers and floor covering, balcony, water heater, and appliance replacements. These improvements were funded from operating cash flow.

The partnership regularly evaluates the capital improvement needs of the property. While the partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property. Capital expenditures will be incurred only if cash is available from operations or from partnership reserves. To the extent that capital improvements are completed, the partnership’s distributable cash flow, if any, may be adversely affected at least in the short term.

Competition.  There are other residential properties within the market area of your partnership’s property. The number and quality of competitive properties in such an area could have a material effect on the rental market for the apartments at your partnership’s property and the rents that may be charged for such apartments. While Aimco is a significant factor in the United States in the apartment industry, competition for apartments is local. According to data published by the National Multi-Housing Council, we believe Aimco is one of the largest owners and managers of multifamily apartment properties in the United States.

Financial Data.  The selected financial information for your partnership set forth below for the six months ended June 30, 2007 and 2006 is based on unaudited financial statements. The selected financial information of your partnership set forth below for the years ended December 31, 2006, 2005 and 2004 is based on audited financial statements. This information should be read in conjunction with such financial statements, including the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Your Partnership” in the Annual Report on Form 10-KSB of your partnership for the year ended December 31, 2006 and the Quarterly Report on Form 10-QSB for the quarter ended June 30, 2007. These reports and other information may be inspected at the public reference facilities maintained by the SEC at One Station Place, 100 F Street, N.E., Washington, D.C. 20549. Copies of such material can also be obtained from the Public Reference Room of the SEC in Washington, D.C. at prescribed rates. The SEC also maintains a site on the World Wide Web at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC.

	For the
	Six Months Ended						For the Year Ended
	June 30,						December 31,
	2007			2006			2006			2005			2004
	(unaudited)
				(in thousands, except per unit data)
Operating Data:
Total Revenues	$	4,980		$	4,648		$	9,472		$	8,767		$	8,550
Income from Continuing Operations		781			485			1,137			738			825
Net income		781			485			1,137			738			825
Income from Continuing Operations per limited partnership unit		19.51			12.11			28.41			18.45			20.62
Net income per limited partnership unit		19.51			12.11			28.41			18.45			20.62
Distributions per limited partnership unit		—			—			—			—			—
Ratio of earnings to fixed charges		173.99	%		143.54	%		151.62	%		133.35	%		136.98	%

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	For the
	Six Months Ended						For the Year Ended
	June 30,						December 31,
	2007			2006			2006			2005			2004
	(unaudited)
				(in thousands, except per unit data)
Balance Sheet Data:
Cash and Cash Equivalents	$	290		$	274		$	589		$	288		$	291
Real Estate, Net of Accumulated Depreciation		10,507			10,609			10,572			10,396			9,303
Total Assets		11,727			11,835			11,965			12,173			11,156
Notes Payable		29,489			30,649			30,079			31,200			32,248
General Partner’s Deficit		(510	)		(524	)		(518	)		(529	)		(536	)
Limited Partners’ Deficit		(18,696	)		(20,115	)		(19,469	)		(20,595	)		(21,326	)
Partners’ Deficit		(19,206	)		(20,639	)		(19,987	)		(21,124	)		(21,862	)
Total Distributions		—			—			—			—			—
Book value per limited partnership unit		(471.80	)		(507.61	)		(491.31	)		(519.72	)		(538.17	)
Cash Flow Data:
Net (decrease) increase in cash and cash equivalents	$	(299	)	$	(14	)	$	301		$	(3	)	$	(95	)
Net cash provided by operating activities		1,641			1,225			3,067			2,390			1,937

Description of Property.  The following shows the location, the date of purchase, the nature of your partnership’s ownership interest in and the use of your partnership’s property as of December 31, 2006.

Property	Date of Purchase	Type of Ownership	Use
Fox Run Apartments	5/27/83	Fee ownership subject to a first mortgage(1)	Apartments 776 units
Plainsboro, New Jersey

(1) Property is held by a wholly owned limited partnership.

Accumulated Depreciation Schedule.  The following shows the gross carrying value and accumulated depreciation of your partnership’s property as of December 31, 2006 (with dollar amounts in thousands).

	Gross Carrying		Accumulated				Method of
Property	Value		Depreciation		Depreciable Life		Depreciation		Federal Tax Basis
	(In thousands)								(In thousands)
Fox Run Apartments	$	42,744	$	32,172		5-30 yrs		S/L	$	12,238

Schedule of Mortgages.  The following shows certain information regarding the outstanding mortgages encumbering your partnership’s property as of December 31, 2006 (with dollar amounts in thousands).

	Principal Balance
	At December 31,		Stated Interest			Period		Maturity		Principal Balance
Property	2006		Rate			Amortized		Date		Due At Maturity
	(In thousands)									(In thousands)
Fox Run Apartments 1st mortgage	$	30,079		6.76	%(1)		20 yrs		12/2021	$	—

(1) Fixed rate mortgage.

Average Rental Rates and Occupancy.  The following shows the average rental rates and occupancy percentages for your partnership’s property during the periods indicated.

	Average Annual
	Rental Rates				Average Annual
	(Per unit)				Occupancy
Property	2006		2005		2006			2005
Fox Run Apartments	$	11,551	$	11,169		97	%		93	%

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Property Management.  Your partnership’s property is managed by one of our affiliates. Pursuant to the management agreement between the property manager and your partnership, the property manager operates your partnership’s property, establishes rental policies and rates and directs marketing activities. The property manager also is responsible for maintenance, the purchase of equipment and supplies, and the selection and engagement of all vendors, suppliers and independent contractors.

Distributions.  No distributions were made by the partnership for the years ended December 31, 2006, 2005 or 2004, and no distributions were made during the six months ended June 30, 2007.

Compensation Paid to the General Partner and its Affiliates.  The following table shows, for each of the years indicated, approximate amounts paid to your general partner and its affiliates on a historical basis. The general partner is reimbursed for actual direct costs and expenses incurred in connection with the operation of the partnership. The property manager is entitled to receive fees for transactions involving your partnership and its property and is entitled to receive five percent of the gross receipts from the partnership’s property for providing property management services. See “The Offer — Section 11. Conflicts of Interest and Transactions with Affiliates.”

	Partnership		Property
	Fees and		Management
Year	Expenses		Fees
2004	$	302,000	$	417,000
2005	$	586,000	$	439,000
2006	$	624,000	$	473,000
2007 (through June 30)	$	454,000	$	246,000

Legal Proceedings.  From time to time, your partnership may be a party to a variety of legal proceedings related to its ownership of the property which arise in the ordinary course of business. See also “The Offer — Section 13. The Lawsuit and the Settlement.”

Beneficial Ownership of Interests in Your Partnership.  We and our affiliates, AIMCO IPLP, L.P. and Cooper River Properties, LLC, collectively have voting and dispositive power with respect to 28,451, or 71.80%, of the outstanding limited partner units of your partnership, along with an approximate 1% general partnership interest held by the general partner. We have purchased in private transactions 7 units at a price of $521.19 per unit on June 14, 2007 and 8 units at a price of $521.19 per unit on July 27, 2007. Except as set forth in this Offer to Purchase, neither we, nor, to the best of our knowledge, any of our affiliates, (i) beneficially own or have a right to acquire any units, (ii) have effected any transactions in the units in the past 60 days, or (iii) have any contract, arrangement, understanding or relationship with any other person with respect to any securities of your partnership, including, but not limited to, contracts, arrangements, understandings or relationships concerning 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. See “The Offer — Section 9. Background and Reasons for the Offer; Prior Tender Offers and Private Purchases.”

Additional Information Concerning Your Partnership.  Your partnership files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document your partnership files at the SEC’s public reference room in Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Your partnership’s most recent SEC filings are also available to the public at the SEC’s web site at http://www.sec.gov.

The above discussion relating to capital expenditures at the property and valuation of the property is forward-looking information developed by the general partner. These expectations incorporated various assumptions including, but not limited to, revenue (including occupancy rates), various operating expenses, general and administrative expenses, depreciation expenses, and working capital levels. While the general partner deemed such expectations to be reasonable and valid at the date made, there is no assurance that the assumed facts will be validated or that the results will actually occur. Any estimate of the future performance of a business, such as your partnership’s business, is forward-looking and based on assumptions some of which inevitably will prove to be incorrect.

15.   Voting Power

Decisions with respect to the day-to-day management of your partnership are the responsibility of the general partner. Because the general partner of your partnership is our affiliate, we control the management of your partnership. Under your partnership’s agreement of limited partnership, limited partners holding a majority of the outstanding units must approve certain

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extraordinary transactions, including the removal of the general partner, most amendments to the partnership agreement and the sale of all or substantially all of your partnership’s assets. We and our affiliates own 28,451 units or 71.80%, of the outstanding units of your partnership. Because we and our affiliate own a majority of the outstanding units and control your partnership’s general partner, we control the outcome of most voting decisions with respect to your partnership. See “The Offer — Section 7. Effects of the Offer.”

16.   Source of Funds

We expect that approximately $7.5 million will be required to purchase all of the limited partnership units that we are seeking in this offer exclusive of fees and expenses. For more information regarding fees and expenses, see “The Offer — Section 20. Fees and Expenses.”

In addition to this offer, we intend to make concurrent offers to acquire interests in several other limited partnerships. If such transactions were fully subscribed for cash, we would be required to pay approximately $32.2 million for such units. If for some reason we did not have such funds available, we might extend these offers for a period of time sufficient for us to obtain additional funds, or we could terminate the offers. However, we do not expect these offers to be fully subscribed. Additionally, we believe that we will have sufficient cash on hand and available sources of financing to acquire all units we are offering to purchase pursuant to these offers. At June 30, 2007, we had cash and cash equivalents of approximately $258.0 million, and availability under our credit facility of approximately $256.2 million. We intend to repay any amounts borrowed to finance the offer out of future working capital.

We have a $450 million revolving credit facility with a syndicate of financial institutions. The Aimco Operating Partnership, Aimco and an Aimco subsidiary, AIMCO/Bethesda Holdings, Inc., are the borrowers. The annual interest rate under the credit facility is based on either LIBOR or a base rate, plus, in either case, an applicable margin. The margin ranges between 1.125% and 1.75% in the case of LIBOR-based loans and between 0% and 0.25% in the case of base rate loans, based upon AIMCO’s leverage ratio. The default rate of interest for the loan is equal to the rate described above plus 3%. The credit facility matures on May 1, 2009.

17.   Dissenters’ Rights

Neither the agreement of limited partnership of your partnership nor applicable law provides any right for you to have your units appraised or redeemed in connection with, or as a result of, our offer. You have the opportunity to make an individual decision on whether or not to tender your units in the offer.

No provisions have been made with regard to the offer to allow you or other limited partners to inspect the books and records of the partnership or to obtain counsel or appraisal services at our expense or at the expense of your partnership. However, you have the right under your partnership’s agreement of limited partnership to obtain a list of the limited partners in your partnership.

18.   Conditions to the Offer

We will not be required to accept for payment and pay for any units tendered pursuant to our offer, may postpone the purchase of, and payment for, units tendered, and may terminate or amend our offer if at any time on or after the date of this Offer to Purchase and at or before the expiration of our offer (including any extension thereof), any of the following shall occur:

•  any change shall have occurred or been threatened in the business, property, assets, liabilities, indebtedness, capitalization, condition (financial or otherwise), operations, licenses or franchises, management contract, or results of operations or prospects of your partnership or local markets in which your partnership owns or operates its property, including any fire, flood, natural disaster, casualty loss, or act of God that is adverse to your partnership or the value of your units to us, which change would, individually or in the aggregate, result in an adverse effect on net operating income of more than 10% per year, or a decrease in partners’ capital (or an increase in partners’ deficit) that exceeds 10% of total assets (a “Material Adverse Effect”); or

•  there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or the over-the-counter market in the United States, (ii) a decline in the closing share price of Aimco’s Class A Common Stock of more than 5.0%, measured from the close of business on the last trading day preceding the date of this offer and the close of business on the last trading day preceding the expiration of this offer,

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(iii) any extraordinary or material adverse change in the financial, real estate or money markets or major equity security indices in the United States such that there shall have occurred at least a 25 basis point increase in LIBOR, or at least a 5.0% decrease in the S&P 500 Index, the Morgan Stanley REIT Index, or the price of the 10-year Treasury Bond or the price of the 30-year Treasury Bond, in each case, measured from the close of business on the last trading day preceding the date of this offer and the close of business on the last trading day preceding the expiration of this offer, (iv) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (v) any limitation (whether or not mandatory) by any governmental authority on, or any other material event which, in either case, could reasonably be expected to affect the extension of credit by banks or other lending institutions, 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

•  there shall have been threatened in writing, instituted or pending any action, proceeding, application or counterclaim by any Federal, state, local or foreign government, governmental authority or governmental agency, or by any other person, before any governmental authority, court or regulatory or administrative agency, authority or tribunal, which (i) challenges or seeks to challenge the acquisition by us of the units, restrains, prohibits or delays the making or consummation of the offer, prohibits the performance of any of the contracts or other arrangements entered into by us (or any of our affiliates) seeks to obtain any material amount of damages as a result of the transactions contemplated by the offer, (ii) seeks to make the purchase of, or payment for, some or all of the units pursuant to the offer illegal or results in a delay in our ability to accept for payment or pay for some or all of the units, (iii) seeks to prohibit or limit the ownership or operation by us or any of our affiliates of the entity serving as your general partner (which is our affiliate) or to remove such entity as the general partner of your partnership, or seeks to impose any material limitation on our ability or any of our affiliates to conduct your partnership’s business or own such assets, (iv) seeks to impose material limitations on our ability or any of our affiliates to acquire or hold or to exercise full rights of ownership of the units including, but not limited to, the right to vote the units purchased by us on all matters properly presented to unitholders or (v) 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

•  there shall be any action taken, or any statute, rule, regulation, order or injunction shall be sought, proposed, enacted, promulgated, entered, enforced or deemed applicable to the offer, your partnership, any general partner of your partnership, us or any affiliate of our or your partnership, or any other action shall have been taken, proposed or threatened, by any government, governmental authority or court, that, directly or indirectly, results in any of the consequences referred to in clauses (i) through (v) of the immediately preceding paragraph; or

•  a tender or exchange offer for any units shall have been commenced or publicly proposed to be made by another person or “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934), or it shall have been publicly disclosed or we shall have otherwise learned that (i) any person or group shall have acquired or proposed or be attempting to acquire beneficial ownership of more than four percent of the units, or shall have been granted any option, warrant or right, conditional or otherwise, to acquire beneficial ownership of more than four percent of the units, or (ii) any person or group shall have entered into a definitive agreement or an agreement in principle or made a proposal with respect to a merger, consolidation, purchase or lease of assets, debt refinancing or other business combination with or involving your partnership; or

•  there shall have occurred any event, circumstance, change, effect or development that, individually or in the aggregate with any other events, circumstances, changes, effects or developments, has had an adverse effect on our financial condition in an amount in excess of $10,000,000, which does not result from actions or inactions by us or our affiliates; or

•  the offer to purchase may have an adverse effect on Aimco’s status as a REIT; or

•  there would be 320 or fewer unitholders outstanding as a result of the consummation of the offer.

The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to such conditions; provided, however, that we may not assert a condition which has not been satisfied solely as a result of our own actions or inactions. The failure by us at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, and the waiver of any such right with respect to any particular facts or circumstances shall not be deemed a waiver with respect to any other facts or circumstances. If we waive any of the conditions to the offer with respect to the tender of a particular unit, we will waive such condition with respect to all other tenders of units in this offer as well. All conditions to our offer will be

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satisfied or waived on or before the expiration of our offer. We will not waive a material condition to the offer on the expiration date. If we waive any material conditions to our offer, we will notify you and, if necessary, we will extend the offer period so that you will have at least five business days from the date of our notice to withdraw your units.

19.   Certain Legal Matters

General.  Except as set forth in this Section 19, we are not aware of any licenses or regulatory permits that would be material to the business of your partnership, taken as a whole, and that might be adversely affected by our acquisition of units as contemplated herein, or any filings, approvals or other actions by or with any domestic or foreign governmental authority or administrative or regulatory agency that would be required prior to the acquisition of units by us pursuant to the offer, other than the filing of a Tender Offer Statement on Schedule TO with the SEC (which has already been filed) and any required amendments thereto. While 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 your partnership or its business, or that certain parts of its 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 us to elect to terminate the offer without purchasing units thereunder. Our obligation to purchase and pay for units is subject to certain conditions, including conditions related to the legal matters discussed in this Section 19.

Antitrust.  We do not believe that the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, is applicable to the acquisition of units contemplated by our 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 our offer.

State Laws.  We are not aware of any jurisdiction in which the making of our offer is not in compliance with applicable law. If we become aware of any jurisdiction in which the making of the offer would not be in compliance with applicable law, we will make a good faith effort to comply with any such law. If, after such good faith effort, we 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 with securities or blue sky laws that require the offer to be made by a licensed broker or dealer, the offer shall be made on behalf of us, if at all, only by one or more registered brokers or dealers licensed under the laws of that jurisdiction.

20.   Fees and Expenses

You will not pay any partnership transfer fees if you tender your units. Except as set forth herein, we will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of units pursuant to the offer. We have retained The Altman Group, Inc. to act as Information Agent in connection with our offer. The Information Agent may contact holders of units by mail, telephone, telex, telegraph and personal interview and may request brokers, dealers and other nominee limited partners to forward materials relating to the offer to beneficial owners of the units. We will pay the Information Agent reasonable and customary compensation for its services in connection with the offer, plus reimbursement for out-of-pocket expenses, and will indemnify it against certain liabilities and expenses in connection therewith, including liabilities under the Federal securities laws. We will also pay all costs and expenses of printing and mailing the offer and any related legal fees and expenses. The partnership will not be responsible for paying any of the fees or expenses incurred by us in connection with this offer.

The following is an itemized statement of the aggregate estimated expenses incurred and to be incurred in this offer by us:

Information Agent Fees	$	7,500
Legal Fees		30,000
Printing Fees		4,600
Tax and Accounting Fees		1,500
Postage		5,900
Depositary		500
Total	$	50,000

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No person has been authorized to give any information or to make any representation on behalf of us not contained herein, or in the letter of transmittal and, if given or made, such information or representation must not be relied upon as having been authorized.

The general partner does not make any recommendation regarding whether you should accept this offer. You are instead encouraged to carefully review this Offer to Purchase and any other information available to you and to seek advice from your independent lawyer, tax advisor and/or financial advisor with respect to your particular circumstances before deciding whether or not to accept this offer.

We have filed with the SEC a Tender Offer Statement on Schedule TO, pursuant to Section 14(d)(1) and Rule 14d-3 under the Exchange Act, furnishing certain additional information with respect to our offer, and may file amendments thereto. Your partnership has filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 pursuant to Section 14(d)(4) and Rule 14d-9 under the Exchange Act, furnishing certain additional information about your partnership’s and the general partner’s position concerning our offer, and your partnership may file amendments thereto. The Schedules TO and 14D-9 and any amendments to either Schedule, including exhibits, may be inspected and copies may be obtained at the same place and in the same manner as described in “The Offer — Section 14. Certain Information Concerning Your Partnership.”

The letter of transmittal 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 Information Agent at one of its addresses set forth below.

THE INFORMATION AGENT FOR THE OFFER IS:
THE ALTMAN GROUP, INC.

By Mail:	By Overnight Courier:	By Hand:
P.O. Box 268	1200 Wall Street, 3rd Floor	1200 Wall Street, 3rd Floor
Lyndhurst, NJ 07071	Lyndhurst, NJ 07071	Lyndhurst, NJ 07071

For information, please call:

TOLL FREE: (800) 467-0821

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ANNEX I

OFFICERS AND DIRECTORS

The names and positions of the executive officers of Apartment Investment and Management Company (“Aimco”); AIMCO-GP, Inc. (“Aimco-GP”) and Angeles Realty Corporation II, the general partner of your partnership (the “General Partner”) are set forth below. The directors of Aimco are also set forth below. All of the executive officers of Aimco also serve as executive officers of Aimco-GP. The two directors of Aimco-GP are Terry Considine and Thomas M. Herzog. The directors of the General Partner of your partnership are Harry G. Alcock and Martha L. Long. Unless otherwise indicated, the business address of each executive officer and director is 4582 South Ulster Parkway, Suite 1100, Denver, Colorado 80237. Each executive officer and director is a citizen of the United States of America.

Name	Position
Terry Considine	Chairman of the Board, Chief Executive Officer and President of Aimco
Jeffrey W. Adler	Executive Vice President — Conventional Property Operations of Aimco
Harry G. Alcock	Executive Vice President and Chief Investment Officer of Aimco; Executive Vice President and Director of the General Partner
Timothy J. Beaudin	Executive Vice President and Chief Development Officer of Aimco and the General Partner
Miles Cortez	Executive Vice President, General Counsel and Secretary of Aimco and the General Partner
Patti K. Fielding	Executive Vice President — Securities and Debt, and Treasurer of Aimco and the General Partner
Lance J. Graber	Executive Vice President — Aimco Capital Asset Management and Transactions, East, of Aimco; Executive Vice President of the General Partner
Thomas M. Herzog	Executive Vice President and Chief Financial Officer of Aimco and the General Partner
James G. Purvis	Executive Vice President — Human Resources of Aimco
David Robertson	Executive Vice President, President and Chief Executive Officer — Aimco Capital of Aimco
Robert Y. Walker, IV	Executive Vice President and Conventional Operations Chief Financial Officer of Aimco and the General Partner
Scott W. Fordham	Senior Vice President and Chief Accounting Officer of Aimco and the General Partner
Martha L. Long	Senior Vice President — Partnership Transactions of Aimco; Director of the General Partner
Stephen B. Waters	Vice President and Principal Financial Officer of the General Partner
James N. Bailey	Director of Aimco
Richard S. Ellwood	Director of Aimco
Thomas L. Keltner	Director of Aimco
J. Landis Martin	Director of Aimco
Robert A. Miller	Director of Aimco
Thomas L. Rhodes	Director of Aimco
Michael A. Stein	Director of Aimco

Name	Principal Occupations for the Last Five Years
Terry Considine	Mr. Considine has been Chairman of the Board and Chief Executive Officer of Aimco since July 1994. Mr. Considine also serves as Chairman of the Board of Directors and Chief Executive Officer of American Land Lease, Inc., another publicly held real estate investment trust. Mr. Considine devotes substantially all of his time to his responsibilities at Aimco.
Jeffrey W. Adler	Mr. Adler was appointed Executive Vice President — Conventional Property Operations in February 2004. Previously he served as Senior Vice President of Risk Management of Aimco from January 2002 until November 2002, when he added the responsibility of Senior Vice President, Marketing. Prior to joining Aimco, from 2000 to 2002, Mr. Adler was Vice President, Property/Casualty for Channelpoint, a software company.

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Name	Principal Occupations for the Last Five Years
Harry G. Alcock	Mr. Alcock was appointed Executive Vice President and Chief Investment Officer of Aimco in October 1999. Mr. Alcock has had responsibility for acquisition and financing activities of Aimco since July 1994, serving as a Vice President from July 1996 to October 1997 and as a Senior Vice President from October 1997 to October 1999. Mr. Alcock was appointed Director of the General Partner in October 2004 and was appointed Executive Vice President of the General Partner in February 2004.
Timothy J. Beaudin	Mr. Beaudin was appointed Executive Vice President and Chief Development Officer of Aimco and the General Partner in October 2005. Prior to joining Aimco and beginning in 1995, Mr. Beaudin was with Catellus Development Corporation, a San Francisco, California-based real estate investment trust. During his last five years at Catellus, Mr. Beaudin served as served as executive vice president, with management responsibility for development, construction and asset management.
Miles Cortez	Mr. Cortez was appointed Executive Vice President, General Counsel and Secretary of Aimco in August 2001 and of the General Partner in February 2004. Prior to joining Aimco, Mr. Cortez was the senior partner of Cortez Macaulay Bernhardt & Schuetze LLC, a Denver law firm, from December 1997 through September 2001. Mr. Cortez served as President of the Colorado Bar Association from 1996 to 1997 and President of the Denver Bar Association from 1982 to 1983.
Patti K. Fielding	Ms. Fielding was appointed Executive Vice President — Securities and Debt of Aimco in February 2003 and of the General Partner in February 2004. Ms. Fielding was appointed Treasurer of Aimco in January 2005. She is responsible for debt financing and the treasury department. From January 2000 to February 2003, Ms. Fielding served as Senior Vice President — Securities and Debt. Ms. Fielding joined Aimco as Vice President in February 1997.
Scott W. Fordham	Mr. Fordham was appointed Senior Vice President and Chief Accounting Officer of Aimco in January 2007. From January 2006 through December 2006, Mr. Fordham served as vice president and chief accounting officer of Brandywine Realty Trust. Prior to the merger of Prentiss Properties Trust with Brandywine Realty Trust, Mr. Fordham served as senior vice president and chief accounting officer of Prentiss Properties Trust and was in charge of the corporate accounting and financial reporting groups. Prior to joining Prentiss Properties Trust in 1992, Mr. Fordham worked in public accounting with PricewaterhouseCoopers LLP. Mr. Fordham is a certified public accountant.
Lance J. Graber	Mr. Graber has been Executive Vice President — Aimco Capital Asset Management and Transactions, East, since October 1999 and focuses on transactions related to Aimco Capital’s portfolio of affordable properties in the eastern portion of the country. Mr. Graber was appointed Executive Vice President of the General Partner in February 2004. Prior to joining Aimco, Mr. Graber was a Director at Credit Suisse First Boston from 1994 to May 1999.
Thomas M. Herzog	Mr. Herzog was appointed Executive Vice President of Aimco and the General Partner in July 2005 and Chief Financial Officer in November 2005. In January 2004, Mr. Herzog joined Aimco as Senior Vice President and Chief Accounting Officer. Prior to joining Aimco, Mr. Herzog was at GE Real Estate, serving as Chief Accounting Officer & Global Controller from April 2002 to January 2004 and as Chief Technical Advisor from March 2000 to April 2002. Prior to joining GE Real Estate, Mr. Herzog was at Deloitte & Touche LLP from 1990 until 2000.
James G. Purvis	Mr. Purvis was appointed Executive Vice President — Human Resources of Aimco in February 2003 and of the General Partner in February 2004. Prior to joining Aimco, from October 2000 to February 2003, Mr. Purvis served as the Vice President of Human Resources at SomaLogic, Inc. a privately held biotechnology company in Boulder, Colorado. From July 1997 to October 2000, Mr. Purvis was the principal consultant for O(3)C Global Organization Solutions, a global human resources strategy and technology consulting company based in Colorado and London.
David Robertson	Mr. Robertson has been Executive Vice President of Aimco since February 2002 and President and Chief Executive Officer of Aimco Capital since October 2002. Prior to joining Aimco, from 1991 to 1996, Mr. Robertson was a member of the investment-banking group at Smith Barney. Since February 1996, Mr. Robertson has been Chairman of Robeks Corporation, a privately held chain of specialty food stores.

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Name	Principal Occupations for the Last Five Years
Robert Y. Walker, IV	Mr. Walker has served as Executive Vice President and Conventional Operations Chief Financial Officer of Aimco and the General Partner since January 2007. Mr. Walker was appointed Senior Vice President of Aimco in August 2005 and became the Chief Accounting Officer of Aimco in November 2005. From June 2002 until he joined Aimco, Mr. Walker served as senior vice president and chief financial officer at Miller Global Properties, LLC, a Denver-based private equity, real estate fund manager. From May 1997 to June 2002, Mr. Walker was employed by GE Capital Real Estate, serving as global controller from May 2000 to June 2002.
Martha L. Long	Martha L. Long has been with Aimco since October 1998 and has served in various capacities. From 1998 to 2001, she served as Senior Vice President and Controller of Aimco and the General Partner. During 2002 and 2003, she served as Senior Vice President of Continuous Improvement. Ms. Long has been a Director and Senior Vice President of the General Partner since February 2004.
Stephen B. Waters	Mr. Waters was appointed Vice President of the General Partner in April 2004. Mr. Waters is also the Principal Financial Officer of the General Partner. Mr. Waters previously served as a Director of Real Estate Accounting since joining Aimco in September 1999. Mr. Waters has responsibilities for real estate and partnership accounting with Aimco.
James N. Bailey	Mr. Bailey was first elected as a Director of Aimco in June 2000 and is currently Chairman of the Nominating and Corporate Governance Committee and a member of the Audit and Compensation and Human Resources Committees. Mr. Bailey co-founded Cambridge Associates, LLC, an investment consulting firm, in 1973 and currently serves as its Senior Managing Director and Treasurer. He is also a director of The Plymouth Rock Company, SRB Corporation, Inc., Direct Response Corporation and Homeowners Direct Company, all four of which are insurance companies. In addition, he is a director of Getty Images, Inc., a publicly held company. He has also been a member of a number of Harvard University alumni affairs committees, including, the Overseers Nominating Committee and The Harvard Endowment Committee. Mr. Bailey is a member of the Massachusetts Bar and the American Bar Associations.
Thomas L. Keltner	Mr. Keltner was first elected as a Director of Aimco in April 2007. Mr. Keltner is currently a member of the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. In March 2007, Mr. Keltner became the Executive Vice President and Chief Executive Officer — Americas and Global Brands for Hilton Hotels Corporation. Mr. Keltner joined Hilton Hotels Corporation in 1999 and has served in various roles. Mr. Keltner has more than 20 years of experience in the areas of hotel development, acquisition, disposition, franchising and management. Prior to joining Hilton Hotels Corporation, from 1993 to 1999 Mr. Keltner served in several positions with Promus Hotel Corporation, including President, Brand Performance and Development. Before joining Promus Hotel Corporation, he served in various capacities with Holiday Inn Worldwide, Holiday Inns International and Holiday Inns, Inc. In addition, Mr. Keltner was President of Saudi Marriott Company, a division of Marriott Corporation, and was a management consultant with Cresap, McCormick and Paget, Inc.
Richard S. Ellwood	Mr. Ellwood was first elected as a Director of Aimco in July 1994. Mr. Ellwood is currently a member of the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. Mr. Ellwood was the founder and President of R.S. Ellwood & Co., Incorporated, which he operated as a real estate investment banking firm until December 31, 2004. Prior to forming his firm, Mr. Ellwood had 31 years experience on Wall Street as an investment banker, serving as: Managing Director and senior banker at Merrill Lynch Capital Markets from 1984 to 1987; Managing Director at Warburg Paribas Becker from 1978 to 1984; general partner and then Senior Vice President and a director at White, Weld & Co. from 1968 to 1978; and in various capacities at J.P. Morgan & Co. from 1955 to 1968. Mr. Ellwood currently serves as a director of Felcor Lodging Trust, Incorporated, a publicly held company.

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Name	Principal Occupations for the Last Five Years
J. Landis Martin	Mr. Martin was first elected as a Director of Aimco in July 1994 and is currently Chairman of the Compensation and Human Resources Committee. Mr. Martin is a member of the Audit and Nominating and Corporate Governance Committees. Mr. Martin is also the Lead Independent Director of Aimco’s Board. Mr. Martin is the founder of Platte River Ventures LLC, a private equity firm. In November 2005, Mr. Martin retired as Chairman and CEO of Titanium Metals Corporation, a publicly held integrated producer of titanium metals, where he served since January 1994. Mr. Martin served as President and CEO of NL Industries, Inc., a publicly held manufacturer of titanium dioxide chemicals, from 1987 to 2003. Mr. Martin is also a director of Halliburton Company, a publicly held provider of products and services to the energy industry and Crown Castle International Corporation. Mr. Martin was a director of Tremont Corporation until February 2003, Special Metals Corporation until December 2003 and Trico Maine Services, Inc. until February 2005.
Robert A. Miller	Mr. Miller was first elected as a Director of Aimco in April 2007. Mr. Miller is currently a member of the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. Mr. Miller has served as the President of Marriott Leisure since 1997. Prior to Marriott Leisure, from 1984 to 1988, Mr. Miller served as Executive Vice President & General Manager of Marriott Vacation Club International and then as its President from 1988 to 1997. In 1984, Mr. Miller and a partner sold their company, American Resorts, Inc., to Marriott. Mr. Miller co-founded American Resorts, Inc. in 1978, and it was the first business model to encompass all aspects of timeshare resort development, sales, management and operations. Prior to founding American Resorts, Inc., from 1972 to 1978 Mr. Miller was Chief Financial Officer of Fleetwing Corporation, a regional retail and wholesale petroleum company. Prior to joining Fleetwing, Mr. Miller served for five years as a staff accountant for Arthur Young & Company. Mr. Miller is past Chairman of the American Resort Development Association (ARDA) and currently serves as Chairman of the ARDA International Foundation.
Thomas L. Rhodes	Mr. Rhodes was first elected as a Director of Aimco in July 1994 and is currently a member of the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. Mr. Rhodes is Chairman of National Review magazine where he served as President since November 1992 and as a Director since 1988. From 1976 to 1992, he held various positions at Goldman, Sachs & Co., was elected a General Partner in 1986 and served as a General Partner from 1987 until November 1992. Mr. Rhodes is Chairman of the Board of Directors of The Lynde and Harry Bradley Foundation and Vice Chairman of American Land Lease, Inc., publicly held real estate investment trust.
Michael A. Stein	Mr. Stein was first elected as a Director of Aimco in October 2004 and is currently the Chairman of the Audit Committee. Mr. Stein is a member of the Compensation and Human Resources and Nominating and Corporate Governance Committees. Mr. Stein is Senior Vice President and Chief Financial Officer of ICOS Corporation, a biotechnology company based in Bothell, Washington. He joined ICOS in January 2001. From October 1998 to September 2000, Mr. Stein was Executive Vice President and Chief Financial Officer of Nordstrom, Inc. From 1989 to September 1998, Mr. Stein served in various capacities with Marriott International, Inc., including Executive Vice President and Chief Financial Officer from 1993 to 1998. Prior to joining Marriott, Mr. Stein spent 18 years at Arthur Andersen LLP, where he was a partner and served as the head of the Commercial Group within the Washington, D.C. office. Mr. Stein serves on the Board of Directors of Getty Images, Inc., a publicly held company, and the Board of Trustees of the Fred Hutchinson Cancer Research Center.

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Questions and requests for assistance or for additional copies of this Offer to Purchase and the letter of transmittal 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 offer is:

THE ALTMAN GROUP, INC.

By Mail:

P.O. Box 268

Lyndhurst, NJ 07071

By Overnight Courier:

1200 Wall Street, 3rd Floor

Lyndhurst, NJ 07071.

By Hand:

1200 Wall Street, 3rd Floor

Lyndhurst, NJ 07071

For information, please call:

By Telephone:

TOLL FREE: (800) 467-0821

By Fax:

(201) 460-0050

EX-99.(A)(2)

Exhibit 99(a)(2)

LETTER OF TRANSMITTAL

To Tender Units of Limited Partnership Interest In

Angeles Partners XI

(the “Partnership”)

Pursuant to the Offer to Purchase

Dated August 28, 2007

by

AIMCO PROPERTIES, L.P.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON SEPTEMBER 25, 2007, UNLESS EXTENDED (the “Expiration Date”). THE OFFER PRICE IS $1,718.00 PER UNIT.

The Information Agent for the offer is:

THE ALTMAN GROUP, INC.

By Mail:	By Overnight Courier:	By Hand:
1200 Wall Street, 3rd Floor	1200 Wall Street, 3rd Floor	1200 Wall Street, 3rd Floor
Lyndhurst, NJ 07071	Lyndhurst, NJ 07071	Lyndhurst, NJ 07071
	By Telephone:
	TOLL FREE (800) 467-0821
	By Fax:
	(201) 460-0050

To participate in the offer, you must send a duly executed copy of this Letter of Transmittal and any other documents required by this Letter of Transmittal so that such documents are received by The Altman Group, Inc., the Information Agent, on or prior to the Expiration Date. The method of delivery of this Letter of Transmittal and all other required documents is at your option and risk, and delivery will be deemed made only when actually received by the Information Agent. If delivery is by mail, registered mail with return receipt requested is recommended. In all cases, sufficient time should be allowed to assure timely delivery. Delivery of this Letter of Transmittal or any other required documents to an address other than as set forth above does not constitute valid delivery.

For information or assistance in connection with the offer or the completion of this Letter of Transmittal, please contact the Information Agent at (800) 467-0821 (toll free).

The instructions accompanying this Letter of Transmittal should be read carefully before this Letter of Transmittal is completed.

WHEN TENDERING, YOU MUST SEND ALL PAGES OF THIS LETTER OF TRANSMITTAL, INCLUDING EXECUTED TAX CERTIFICATIONS (BOXES A AND B).

DESCRIPTION OF UNITS TENDERED
Name(s), Address(es), Number of Units Owned and Tax Identification Number of Registered Holder(s).	Total Number of
(Please indicate changes or corrections to the name, address, number of units owned	Units Tendered
and tax identification number printed below.)	(#)

SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 2, 4 and 8)

To be completed ONLY if the consideration for the purchase price of Units accepted for payment is to be issued in the name of someone other than the undersigned.

o  Issue consideration to:

Name:

(Please Type or Print)

Address:

(Include Zip Code)

(Tax Identification or Social Security No.)

(See Substitute Form W-9)

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 2, 4 and 8)

To be completed ONLY if the consideration for the purchase price of Units accepted for payment is to be sent to someone other than the undersigned or to the undersigned at an address other than that shown above.

o  Mail Consideration to:

Name:

(Please Type or Print)

Address:

(Include Zip Code)

NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

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Ladies and Gentlemen:

The undersigned hereby acknowledges that he or she has received (i) the Offer to Purchase (the “Offer to Purchase”) dated August 28, 2007 (the “Offer Date”) relating to the offer by AIMCO Properties, L.P. (the “Purchaser”) to purchase Limited Partnership Interests (the “Units”) in the Partnership and (ii) this Letter of Transmittal and the Instructions hereto, as each may be supplemented or amended from time to time (collectively, the “Offer”).

The general partner of your Partnership does not make any recommendation regarding whether you should accept the Offer. You are encouraged to carefully review the Offer to Purchase and any other information available to you and to seek advice from your independent lawyer, tax advisor and/or financial advisor with respect to your particular circumstances before deciding whether or not to accept the Offer.

Upon the terms and subject to the conditions set forth in the Offer to Purchase, and this Letter of Transmittal, the undersigned hereto hereby tenders to the Purchaser the Units set forth in the box above entitled “Description of Units Tendered,” including all interests in any limited partnership represented by such units (collectively, the “Units”), at the price indicated on the Offer and any supplement thereto, less the amount of distributions, if any, made by the Partnership from the Offer Date until the Expiration Date (the “Offer Price”), net to the undersigned in cash, without interest.

By executing this Letter of Transmittal, the undersigned hereby acknowledges that the general partner does not make any recommendation regarding whether the undersigned should accept the Offer, and the undersigned hereto represents and warrants to the Purchaser that the undersigned has received the Offer.

Subject to and effective upon acceptance for payment of any of the Units tendered hereby in accordance with the terms of the Offer, the undersigned hereto hereby irrevocably sells, assigns, transfers, conveys and delivers to, or upon the order of, the Purchaser all right, title and interest in and to such Units tendered hereby that are accepted for payment pursuant to the Offer, including, without limitation, (i) all of the undersigned’s interest in the capital of the Partnership, and the undersigned’s interest in all profits, losses and distributions of any kind to which the undersigned shall at any time be entitled in respect of the Units, including, without limitation, distributions in the ordinary course, distributions from sales of assets, distributions upon liquidation, winding-up, or dissolution, payments in settlement of existing or future litigation (other than with respect to your pro rata share of the settlement fund in the Nuanes and Heller settlement, provided that you are otherwise eligible and if and when the settlement and judgment entered thereto become final), and all other distributions and payments from and after the Expiration Date of the Offer, in respect of the Units tendered by the undersigned and accepted for payment and thereby purchased by the Purchaser; (ii) all other payments, if any, due or to become due to the undersigned in respect of the Units, under or arising out of the agreement and certificate of limited partnership of the Partnership (the “Partnership Agreement”), or any agreement pursuant to which the Units were sold (the “Purchase Agreement”), whether as contractual obligations, damages, insurance proceeds, condemnation awards or otherwise; (iii) all of the undersigned’s claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under or arising out of the Partnership Agreement or Purchase Agreement or the undersigned’s ownership of the Units, including, without limitation, all voting rights, rights of first offer, first refusal or similar rights, and rights to be substituted as a limited partner of the Partnership; and (iv) all rights to bring future claims, if any, of the undersigned whether on behalf of the Partnership, individually or on behalf of a putative class (including without limitation any claims against limited partners of the Partnership, the general partner(s) and/or any affiliates thereof) under, arising out of or related to the Partnership Agreement, the Purchase Agreement, the undersigned’s status as a limited partner, the terms or conditions of the Offer, the management of the Partnership, monies loaned or advanced, services rendered to the Partnership or its partners, or any other claims arising out of or related to the undersigned’s ownership of Units in the Partnership.

Further, the undersigned hereto, on behalf of himself or herself, his or her heirs, estate, executor, administrator, successors and assigns, and the Partnership, fully, finally and forever releases, relinquishes and discharges the Purchaser and its predecessors, successors and assigns and its present and former parents, subsidiaries, affiliates, investors, insurers, reinsurers, officers, directors, employees, agents, administrators, auditors, attorneys, accountants, information and solicitation agents, investment bankers, and other representatives, including but not limited to Apartment Investment and Management Company and the general partner of the Partnership (collectively, the “Releasees”), from any and all claims and causes of action, whether brought individually, on behalf of a class, or derivatively, demands, rights, or liabilities, including, but not limited to, claims for negligence, gross negligence, professional negligence, breach of duty of care or loyalty, or breach of duty of candor, fraud, breach of fiduciary duty, mismanagement, corporate waste, malpractice, misrepresentation, whether intentional or negligent,

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misstatements and omissions to disclose, breach of contract, violations of any state or federal statutes, rules or regulations, whether known claims or unknown claims, through and including the date of execution of the letter of transmittal, including, but not limited to, those claims that arise out of or relate to (a) those matters and claims set forth in the Nuanes and Heller class and derivative litigation described in the Offer to Purchase or the Stipulation of Settlement executed in connection therewith, (b) the ownership of one or more Units in the Partnership, including but not limited to, any and all claims related to the management of the Partnership or the properties owned by the Partnership (whether currently or previously), the payment of management fees or other monies to the general partner of the Partnership and its affiliates, prior acquisitions or tender offers and the prior settlement, (c) the purchase, acquisition, holding, sale, tender or voting of one or more Units in the Partnership, or (d) any of the facts, circumstances, allegations, claims, causes of action, representations, statements, reports, disclosures, transactions, events, occurrences, acts, omissions or failures to act, of whatever kind or character whatsoever, irrespective of the state of mind of the actor performing or omitting to perform the same, that have been or could have been alleged in any pleadings, amended pleading, argument, complaint, amended complaint, brief, motion, report or filing in the Nuanes and Heller class and derivative litigation (collectively, the “Released Claims”); provided, however, that the Released Claims are not intended to include (i) any claim based on violations of federal or state securities laws in connection with the Offer, and (ii) any right to your pro rata share of the settlement fund in the Nuanes and Heller settlement, provided that you are otherwise eligible and if and when the settlement and judgment entered thereto become final.

The undersigned hereto expressly waives and relinquishes, to the fullest extent permitted by law and consistent with the releases contained herein, the provisions, rights and benefits of Section 1542 of the Civil Code of California (“Section 1542”), which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

The undersigned hereto waives any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, that is similar, comparable or equivalent to Section 1542. The undersigned acknowledges and agrees that it may hereafter discover facts in addition to or different from those which it now knows or believes to be true with respect to the subject matter of the Released Claims, but the undersigned shall be deemed to have fully, finally and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, that now exist or heretofore have existed upon any theory of law or equity now existing, including, but not limited to, conduct that is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery of the existence of such different or additional facts.

The undersigned hereto agrees that the releases contained herein are intended to include the Released Claims, which the undersigned may have and which the undersigned does not know or suspect to exist in its favor against the Releasees and that the releases contained herein extinguish those claims. The undersigned hereto represents and warrants to the Releasees that the undersigned has been advised by its attorney of the effect and import of the provisions of Section 1542, and that the undersigned has not assigned or otherwise transferred or subrogated any interest in the Released Claims.

The undersigned hereto irrevocably appoints the Purchaser and its designees as his or her proxy, each with full power of substitution, to the fullest extent of the undersigned’s rights with respect to the Units tendered by him or her and accepted for payment by the Purchaser. 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, we accept the tendered units for payment. Upon such acceptance for payment, all prior proxies and consents given by the undersigned hereto with respect to the Units will, without further action, be revoked, and no subsequent proxies or consents may be given (and if given will not be effective). The Purchaser and its designees are, as to those Units, empowered to exercise all voting and other rights as a limited partner as the Purchaser, in its discretion, may deem proper at any meeting of limited partners, by written consent or otherwise. By executing this Letter of Transmittal, the undersigned agrees to execute all such documents and take such other actions as shall be reasonably required to enable the Units tendered to be voted in accordance with the Purchaser’s directions. The proxy granted by the undersigned hereto to the Purchaser will remain effective and be irrevocable for a period of ten years following the Expiration Date of the Offer.

The undersigned hereto hereby irrevocably constitutes and appoints the Purchaser and any designees of the Purchaser as the true and lawful agent and attorney-in-fact of the undersigned with respect to such Units, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to do all such acts and things necessary or expedient to deliver such Units and transfer ownership of such Units on the partnership books maintained by the general partner

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of the Partnership, together with all accompanying evidence of transfer and authenticity to, or upon the order of, the Purchaser, to sign any and all documents necessary to authorize the transfer of the Units to the Purchaser including, without limitation, the “Transferor’s (Seller’s) Application for Transfer” created by the National Association of Securities Dealers, Inc., if required, and upon receipt by the Information Agent (as the undersigned’s agent) of the Offer Price, to become a substitute limited partner, to receive any and all distributions made or declared by the Partnership from and after the Expiration Date of the Offer (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, all in accordance with the terms of the Offer. This appointment is effective upon purchase of the Units by the Purchaser and will remain effective and be irrevocable for a period of ten years following the Expiration Date of the Offer. Upon purchase of the Units pursuant to the Offer, all prior powers of attorney given by the undersigned hereto with respect to such Units will be revoked and no subsequent powers of attorney may be given (and if given will not be deemed effective).

In addition to and without limiting the generality of the foregoing, the undersigned hereto hereby irrevocably (i) requests and authorizes (subject to and effective upon acceptance for payment of any Unit tendered hereby) the Partnership and its general partner to take any and all actions as may be required to effect the transfer of the undersigned’s Units to the Purchaser (or its designee) and to admit the Purchaser as a substitute limited partner in the Partnership under the terms of the Partnership Agreement; (ii) empowers the Purchaser and its 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 unitholder 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 unitholder; (iii) agrees not to exercise any rights pertaining to the Units without the prior consent of the Purchaser; and (iv) requests and consents to the transfer of the Units, to be effective on the books and records of the Partnership as of the effective date set forth in the Offer.

Notwithstanding any provision in the Partnership Agreement or any Purchase Agreement to the contrary, the undersigned hereto hereby directs the general partner of the Partnership to make all distributions after the Purchaser accepts the tendered Units for payment to the Purchaser or its designee; provided, however, that the undersigned will still be entitled to receive the undersigned’s pro rata share, if any, of proceeds from the settlement of the Nuanes and Heller litigation, which is subject to the settlement and judgment entered thereto becoming final. Subject to and effective upon acceptance for payment of any Unit tendered hereby, the undersigned hereby requests that the Purchaser be admitted to the Partnership as a substitute limited partner under the terms of the Partnership Agreement. Upon request, the undersigned will execute and deliver additional documents deemed by the Information Agent or the Purchaser to be necessary or desirable to complete the assignment, transfer and purchase of Units tendered hereby and will hold any distributions received from the Partnership after the Expiration Date in trust for the benefit of the Purchaser and, if necessary, will promptly forward to the Purchaser any such distributions immediately upon receipt. The Purchaser reserves the right to transfer or assign, in whole or in part, from time to time, to one or more of its 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 unitholders to receive payment for Units validly tendered and accepted for payment pursuant to the Offer.

By executing this Letter of Transmittal, the undersigned hereto represents that either (i) the undersigned is not a plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or an entity deemed to hold “plan assets” within the meaning of 29 C.F.R. Section 2510.3-101 of any such plan, or (ii) the tender and acceptance of Units pursuant to the Offer will not result in a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

The undersigned hereto understands that a tender of Units to the Purchaser will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer. The undersigned recognizes that under certain circumstances set forth in the Offer, the Purchaser may not be required to accept for payment any or all of the Units tendered hereby. In such event, the undersigned understands that any Letter of Transmittal for Units not accepted for payment may be returned to the undersigned or destroyed by the Purchaser (or its agent). This tender is irrevocable, except that Units tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date, or unless already accepted for payment, any time after 60 days from the Offer Date.

The undersigned has been advised that the Purchaser is an affiliate of the general partner of the Partnership. The undersigned hereto has made his or her own decision to tender Units.

The undersigned hereto hereby represents and warrants for the benefit of the Partnership and the Purchaser that the undersigned owns the Units tendered hereby and has full power and authority and has taken all necessary action to validly

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tender, sell, assign, transfer, convey and deliver the Units tendered hereby and that when the same are accepted for payment 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 and that the transfer and assignment contemplated herein are in compliance with all applicable laws and regulations.

All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned hereto, and any obligations of the undersigned shall be binding upon the heirs, personal representatives, trustees in bankruptcy, legal representatives, and successors and assigns of the undersigned.

The undersigned hereto further represents and warrants that, to the extent a certificate evidencing the Units tendered hereby (the “original certificate”) is not delivered by the undersigned together with this Letter of Transmittal, (i) the undersigned has not sold, transferred, conveyed, assigned, pledged, deposited or otherwise disposed of any portion of the Units, (ii) the undersigned has caused a diligent search of its records to be taken and has been unable to locate the original certificate, (iii) if the undersigned shall find or recover the original certificate evidencing the Units, the undersigned will immediately and without consideration surrender it to the Purchaser; and (iv) the undersigned shall at all times indemnify, defend, and save harmless the Purchaser and the Partnership, its successors, and its assigns from and against any and all claims, actions, and suits whether groundless or otherwise, and from and against any and all liabilities, losses, damages, judgments, costs, charges, counsel fees, and other expenses of every nature and character by reason of honoring or refusing to honor the original certificate when presented by or on behalf of a holder in due course of a holder appearing to or believed by the partnership to be such, or by issuance or delivery of a replacement certificate, or the making of any payment, delivery, or credit in respect of the original certificate without surrender thereof, or in respect of the replacement certificate.

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IMPORTANT: WHEN TENDERING, YOU MUST SEND ALL PAGES OF THIS LETTER OF
TRANSMITTAL, INCLUDING EXECUTED TAX CERTIFICATIONS ON NEXT PAGE.

SIGNATURE BOX
(SEE INSTRUCTION 2)

Please sign exactly as your name is printed on the front of this Letter of Transmittal. For joint owners, each joint owner must sign. (See Instruction 2).

The undersigned hereto hereby represents, warrants and agrees as set forth in this Letter of Transmittal and tenders the Units indicated in this Letter of Transmittal to the Purchaser pursuant to the terms of the Offer.

X

(Signature of Owner)

X

(Signature of Joint Owner)

Name and Capacity (if other than individuals):

Title:

Address:

(City) (State) (Zip)          

Area Code and Telephone No. (Day):

                         (Evening):

SIGNATURE GUARANTEE

(If Required)

(SEE INSTRUCTION 2)

YOU DO NOT NEED TO HAVE YOUR SIGNATURE GUARANTEED UNLESS YOU ARE A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, OFFICER OF A CORPORATION OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY.

Name and Address of Eligible Institution:

Authorized Signature: X

Name:

Title: ­ ­ Date: ­ ­

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TAX CERTIFICATIONS
(See Instruction 5)

Please refer to the attached Instructions for completing Boxes A and B below.

BOX A
REQUESTER’S NAME: AIMCO PROPERTIES, L.P.
SUBSTITUTE FORM W-9 Department of the Treasury Internal Revenue Service (IRS)	Part 1 — PLEASE PROVIDE YOUR TIN IN THE BOX AT THE RIGHT	Social Security Number OR Taxpayer Identification Number o Exempt
Payer’s Request for Taxpayer Identification Number (TIN)	Check appropriate box: o Disregarded Entity o Individual/Sole Proprietor
	o Corporation o Partnership o Other ­ ­ (If you are an LLC, check the box marked “Other”, write LLC, and also check one of the other boxes to indicate your tax status (e.g., disregarded entity, individual/sole proprietor, corporation, partnership).
Please fill in your name and address below. Name Business Name Address (number and street) City, State and Zip Code	Part 2 — Certification — Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), (2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, (b) I have not been notified by the IRS that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. person (as defined for U.S. federal income tax purposes).
	Certification Instructions — You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of under reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding, you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). If you are exempt from backup withholding, check the box in Part 1 and see the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9”.
	Signature:­ ­		Date:­ ­

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BOX B
FIRPTA AFFIDAVIT

Under Section 1445(e)(5) of the Internal Revenue Code and Treas. Reg. 1.1445 11T(d), a transferee must withhold tax equal to 10% of the amount realized with respect to certain transfers of an interest in a partnership if 50% or more of the value of its gross assets consists of U.S. real property interests and 90% or more of the value of its gross assets consists of U.S. real property interests plus cash equivalents, and the holder of the Units is a foreign person. To inform AIMCO Properties, L.P. that no withholding is required with respect to the unitholder’s Units in the Partnership, the undersigned hereby certifies the following under penalties of perjury:

(i) Unless this box o is checked, the unitholder, if an individual, is a U.S. citizen or a resident alien for purposes of U.S. income taxation, and if other than an individual, is not a foreign corporation, foreign partnership, foreign estate or foreign trust (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);

(ii) The unitholder is not a disregarded entity as defined in Treas. Reg. Section 1.1445-2(b)(2)(iii);

(iii) The unitholder’s U.S. social security number (for individuals) or employer identification number (for non individuals) is correct as furnished in the blank provided for that purpose in Box A;

(iv) The unitholder’s home address (for individuals), or office address (for non individuals), is correctly printed (or corrected) is correct as furnished in the blank provided for that purpose in Box A.

The undersigned understands that this certification may be disclosed to the IRS by AIMCO Properties, L.P. and that any false statements contained herein 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: ­ ­ Date ­ ­

THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.

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INSTRUCTIONS
FOR COMPLETING LETTER OF TRANSMITTAL

1. Requirements of Tender.  To be effective, a duly completed and signed Letter of Transmittal (or facsimile thereof) and any other required documents must be received by the Information Agent at one of its addresses (or its facsimile number) set forth herein on or before the date and time of the Expiration Date, unless extended. To ensure receipt of the Letter of Transmittal and any other required documents, it is suggested that you use overnight courier delivery or, if the Letter of Transmittal and any other required documents are to be delivered by United States mail, that you use certified or registered mail, return receipt requested.

Our records indicate that you own the number of Units set forth in the box above entitled “Description of Units Tendered” under the column entitled “Name(s), Address(es), Number of Units Owned and Tax Identification Number of Registered Holder(s).” If you would like to tender only a portion of your Units, please so indicate in the space provided in the box above entitled “Description of Units Tendered.”

WHEN TENDERING, YOU MUST SEND ALL PAGES OF THE LETTER OF TRANSMITTAL, INCLUDING EXECUTED TAX CERTIFICATIONS (BOXES A and B).

THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING UNITHOLDER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE INFORMATION AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.

2. Signature Requirements.

Individual and Joint Owners.  After carefully reading and completing the Letter of Transmittal, to tender Units, unitholders must sign at the “X” in the Signature Box of the Letter of Transmittal. The signature(s) must correspond exactly with the names printed (or corrected) on the front of the Letter of Transmittal. No signature guarantee on the Letter of Transmittal is required if the Letter of Transmittal is signed by the unitholder (or beneficial owner in the case of an IRA). If any tendered Units are registered in the names of two or more joint owners, all such owners must sign this Letter of Transmittal.

IRAs/Eligible Institutions.  For Units held in an IRA account, the beneficial owner should sign in the Signature Box and no signature guarantee is required. Similarly, no signature guarantee is required if Units are tendered for the account of a member firm of a registered national security exchange, a member firm 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”).

Trustees, Corporations, Partnership and Fiduciaries.  Trustees, executors, administrators, guardians, attorneys-in-fact, officers of a corporation, authorized partners of a partnership or other persons acting in a fiduciary or representative capacity must sign at the “X” in the Signature Box and have their signatures guaranteed by an Eligible Institution by completing the signature guarantee set forth in the Signature Box of the Letter of Transmittal. If the Letter of Transmittal is signed by trustees, administrators, guardians, attorneys-in-fact, officers of a corporation, authorized partners of a partnership or others acting in a fiduciary or representative capacity, such persons should, in addition to having their signatures guaranteed, indicate their title in the Signature Box and must submit proper evidence satisfactory to the Purchaser of their authority to so act (see Instruction 3 below).

3. Documentation Requirements.  In addition to the information required to be completed on the Letter of Transmittal, additional documentation may be required by the Purchaser under certain circumstances including, but not limited to, those listed below. Questions on documentation should be directed to the Information Agent at its telephone number set forth herein.

Deceased Owner (Joint Tenant)	— Copy of death certificate.
Deceased Owner (Others)	— Copy of death certificate (see also Executor/Administrator/Guardian below).

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Executor/Administrator/Guardian	— Copy of court appointment documents for executor or administrator; and
	(a) a copy of applicable provisions of the will (title page, executor(s)’ powers, asset distribution); or
	(b) estate distribution documents.
Attorney-in-Fact	— Current power of attorney.
Corporation/Partnership	— Corporate resolution(s) or other evidence of authority to act. Partnership should furnish a copy of the partnership agreement.
Trust/Pension Plans	— Unless the trustee(s) are named in the registration, a copy of the cover page of the trust or pension plan, along with a copy of the section(s) setting forth names and powers of trustee(s) and any amendments to such sections or appointment of successor trustee(s).

4. Special Payment and Delivery Instructions.  If consideration is to be issued in the name of a person other than the person signing the Signature Box of the Letter of Transmittal or if consideration is to be sent to someone other than such signer or to an address other than that set forth on the Letter of Transmittal in the box entitled “Description of Units Tendered,” the appropriate boxes on the Letter of Transmittal should be completed.

5. Tax Certifications.  The unitholder(s) tendering Units to the Purchaser pursuant to the Offer must furnish the Purchaser with the unitholder(s)’ taxpayer identification number (“TIN”) and certify as true, under penalties of perjury, the representations in Box A and Box B. See attached Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for guidance in determining the proper TIN to give the Purchaser.

U.S. Persons.  A unitholder that is a U.S. citizen or a resident alien individual, a domestic corporation, a domestic partnership, a domestic trust or a domestic estate (collectively, “U.S. Persons”), as those terms are defined in the Code, should follow the instructions below with respect to certifying Box A and Box B.

Box A — Substitute Form W-9.

Part (i), Taxpayer Identification Number.  Tendering unitholders must certify to the Purchaser that the TIN provided in Box A is correct. If a correct TIN is not provided, penalties may be imposed by the Internal Revenue Service (the “IRS”), in addition to the unitholder being subject to backup withholding.

Part (ii), Backup Withholding.  In order to avoid Federal income tax backup withholding, the tendering unitholder must certify, under penalty of perjury, that such unitholder is not subject to backup withholding. Certain unitholders (including, among others, all corporations and certain exempt non-profit organizations) are not subject to backup withholding. Backup withholding is not an additional tax. If withholding results in an overpayment of taxes, a refund may be obtained from the IRS. Do not check the box in Box A, Part (ii), unless you have been notified by the IRS that you are subject to backup withholding.

When determining the TIN to be furnished, please refer to the following as a guide:

Individual accounts — should reflect owner’s TIN.

Joint accounts — should reflect the TIN of the owner whose name appears first.

Trust accounts — should reflect the TIN assigned to the trust.

IRA custodial accounts — should reflect the TIN of the custodian (not necessary to provide).

Custodial accounts for the benefit of minors — should reflect the TIN of the minor.

Corporations, partnership or other business entities — should reflect the TIN assigned to that entity.

Single member limited liability company — should reflect the TIN of the owner of the Units for federal income tax purposes.

Non-U.S. Persons.  In order for a unitholder that is not a U.S. Person (“Non-U.S. Person”) to qualify as exempt, such unitholder must submit a completed Form W-8BEN “Certificate of Foreign Status,” Form W-8ECI “Certificate of Foreign

11

Person’s Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a U.S. Trade or Business,” or Form W-8IMY “Certificate of Foreign Intermediary, Foreign Flow Through Entity or Certain U.S. Branches for United States Tax Withholding” signed under penalties of perjury attesting to such exempt status. Such forms may be obtained from the IRS at www.irs.gov.

Box B — FIRPTA Affidavit.  Section 1445 of the Code requires that each unitholder transferring interests in a partnership with real estate assets meeting certain criteria certify under penalty of perjury the representations made in Box B, or be subject to withholding of tax equal to 10% of the amount realized for interests purchased. Tax withheld under Section 1445 of the Code is not an additional tax. If withholding results in an overpayment of tax, a refund may be obtained from the IRS. Part (i) should be checked only if the tendering unitholder is not a U.S. Person, as described therein.

6. Conditional Tenders.  No alternative, conditional or contingent tenders will be accepted.

7. Validity of Letter of Transmittal.  All questions as to the validity, form, eligibility (including time of receipt) and acceptance of a Letter of Transmittal and other required documents will be determined by the Purchaser and such determination will be final and binding. The Purchaser’s interpretation of the terms and conditions of the Offer (including these Instructions for this Letter of Transmittal) will be final and binding. The Purchaser will have the right to waive any irregularities or conditions as to the manner of tendering. Any irregularities in connection with tenders, unless waived, must be cured within such time as the Purchaser shall determine. This Letter of Transmittal will not be valid until any irregularities have been cured or waived. Neither the Purchaser nor the Information Agent are under any duty to give notification of defects in a Letter of Transmittal and will incur no liability for failure to give such notification.

8. Assignee Status.  Assignees must provide documentation to the Information Agent which demonstrates, to the satisfaction of the Purchaser, such person’s status as an assignee.

9. Transfer Taxes.  The amount of any transfer taxes (whether imposed on the registered holder or such person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted.

12

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 type of number to give the payer.

		Give the SOCIAL
		SECURITY number
For this type of account:		of —
1.	Individual	The individual
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account(1)
3.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)
4.	a. The usual revocable savings trust (grantor is also trustee)	The grantor-trustee(1)
	b. So-called trust account that is not a legal or valid trust under state law	The actual owner(1)
5.	Sole proprietorship or single-owner LLC	The owner(3)

		Give the EMPLOYER
		IDENTIFICATION number
For this type of account:		of —
6.	A valid trust, estate, or pension trust	The legal entity (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(4)
7.	Corporate or LLC electing corporate status on Form 8832	The corporation
8.	Association, club, religious, charitable, educational or other tax-exempt organization	The organization
9.	Partnership or multi-member LLC	The partnership
10.	A broker or registered nominee	The broker or nominee
11.	Account with the 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	The public entity

(1)	List first and circle the name of the person whose number you furnish. If only one person on a joint account has a Social Security number, that person’s number must be furnished.
(2)	Circle the minor’s name and furnish the minor’s Social Security number.
(3)	You must show your individual name. You may also enter your business name or “doing business” name on the second line. You may use your Social Security number or Employer Identification number.
(4)	List first and circle the name of the valid trust, estate or pension trust.

Note:   If no name is circled when is more than one name, the number will be considered to be that of the first name listed.

13

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER (TIN) ON SUBSTITUTE FORM W-9
(Section references are to the Internal Revenue Code)
Page 2

Obtaining a Number

If you do not have a taxpayer identification number, apply for one immediately. To apply for an SSN, obtain Form SS-5, Application for a Social Security Card, from your local Social Security Administration office or get this form online at www.socialsecurity.gov/online/ss-5.pdf. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/businesses/ and clicking on Employer ID Numbers under Related Topics. You can get Forms W-7 and SS-4 from the IRS by visiting www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

Payees and Payments Exempt From Backup Withholding

Payees specifically exempt from backup withholding (if the payee properly establishes its entitlement to such exemption through the provision of the requisite documentation to the extent required by Treasury regulations) on all payments include the following:

(1) An organization exempt from tax under section 501(a), or an individual retirement plan (“IRA”), or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2).

(2) The United States or any of its agencies or instrumentalities.

(3) A State, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities.

(4) A foreign government or any of its political subdivisions, agencies or instrumentalities.

(5) An international organization or any of its agencies or instrumentalities.

Payees specifically exempted from backup withholding on interest and dividend payments include the following:

(6) A corporation.

(7) A foreign central bank of issue.

(8) A dealer in securities or commodities required to register in the United States or a possession of the United States.

(9) A real estate investment trust

(10) An entity registered at all times during the tax year under the Investment Company Act of 1940.

(11) A common trust fund operated by a bank under section 584 (a).

(12) A financial institution.

(13) A middleman known in the investment community as a nominee or custodian.

(14) A trust exempt from tax under section 664 or described in section 4947.

Payments that are not subject to information reporting are generally also not subject to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A, and 6050N, and the regulations under those sections. Exempt payees should complete a Substitute Form W-9 to avoid possible erroneous backup withholding.

Privacy Act Notice.  Section 6109 requires you to furnish your correct taxpayer identification number to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return and may also provide this information to various government agencies for tax enforcement or litigation purposes. The IRS may also disclose this

14

information to other countries under a tax treaty. You must provide your taxpayer identification number whether or not you are required to file a tax return. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not furnish a tax identification number to a payer. Certain penalties may also apply.

Penalties

(1) 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) Civil Penalty for False Information With Respect to Withholding.  If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

(3) Criminal Penalty for Falsifying Information.  Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

(4) Misuse of Taxpayer Identification Numbers.  If the requester discloses or uses taxpayer identification numbers in violation of federal law, the requester may be subject to civil and criminal penalties.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE IRS

15

Questions and requests for assistance or for additional copies of this Offer to Purchase and the letter of transmittal 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:

THE ALTMAN GROUP, INC.

By Mail:	By Overnight Courier:	By Hand:
1200 Wall Street, 3rd Floor	1200 Wall Street, 3rd Floor	1200 Wall Street, 3rd Floor
Lyndhurst, NJ 07071	Lyndhurst, NJ 07071	Lyndhurst, NJ 07071
	By Telephone:
	TOLL FREE (800) 467-0821
	By Fax:
	(201) 460-0050

EX-99.(A)(3)

Exhibit 99(a)(3)

AIMCO PROPERTIES, L.P.
c/o The Altman Group, Inc.
1200 Wall Street, 3rd Floor
Lyndhurst, NJ 07071
(800) 467-0821

August 28, 2007

Dear Limited Partner:

We are offering to purchase up to 4,358 units in your partnership, Angeles Partners XI, for $1,718.00 per unit in cash. Our offer is being made pursuant to the enclosed Offer to Purchase and related Letter of Transmittal, which set forth all the terms and conditions of the offer. You should carefully review the Offer to Purchase, Letter of Transmittal and any other information available to you prior to making a decision whether or not to tender your units. The offer is scheduled to expire on September 25, 2007, unless otherwise extended. Our offer is not subject to any minimum number of units being tendered. You will not be required to pay any partnership transfer fees in connection with any sale of your units pursuant to our offer. Our offer price will be reduced for any distributions subsequently made by your partnership prior to the expiration of our offer.

If more than 4,358 units are validly tendered (and not properly withdrawn) on or prior to the expiration date, we will purchase 4,358 units from tendering unitholders on a pro rata basis.

If we purchase your tendered units, you will receive cash, but you may recognize a gain or loss for federal income tax purposes. If you retain your units, you will continue to be a limited partner. However, you may not be able to liquidate your investment until the partnership terminates.

As with any investment decision, there are advantages and disadvantages to you of accepting or declining our offer. The general partner of your partnership is remaining neutral and makes no recommendation as to whether you should tender or refrain from tendering your units in any offer. The general partner believes that you must make your own decision whether or not to participate in any offer, based upon a number of factors described in the Offer to Purchase.

If you desire to tender any of your units in response to our offer, you should complete and sign the enclosed Letter of Transmittal in accordance with the instructions and mail or deliver it and any other required documents to The Altman Group, Inc., which is acting as Information Agent in connection with this offer, at the address set forth on the back cover of the enclosed Offer to Purchase. If you have any questions, please contact the Information Agent, toll free, at (800) 467-0821.

Very truly yours,

AIMCO PROPERTIES, L.P.

EX-99.(C)(1)

Exhibit 99(c)(1)

COMPLETE APPRAISAL
SUMMARY APPRAISAL REPORT OF
FOX RUN APARTMENTS
PLAINSBORO, NEW JERSEY 08536

PREPARED FOR:

AIMCO
4582 S. ULSTER STREET PARKWAY
DENVER, COLORADO 80237

As of:

January 19, 2007

KTR JOB NO. 7-6-06519C

March 9, 2007

Ms. Martha Long
Senior Vice President
Apartment Investment and Management Company
4582 S. Ulster Street Parkway, Suite 1100
Denver, Colorado 80237

Re:	Fox Run Apartments
	60 Fox Run Drive
	Plainsboro, New Jersey 08536

Dear Ms. Long:

At your request, KTR Valuation & Consulting Services, LLC has appraised the above referenced property. The purpose of the appraisal is to estimate the Market Value of the leased fee interest in the subject property, free and clear of financing, as of January 19, 2007.

The subject property consists of a 46.409-acre site improved with a 776-unit garden apartment complex comprised of 58 two-story buildings. The property is known as Fox Run Apartments and was constructed in 1972 and 1973. The property contains a mix of one and two-bedroom unit types, with an average unit size of 713 square feet. The property has a good suburban location in a primarily residential setting near parks and schools. Quality and condition are average.

The following report contains information considered relevant to the valuation of the property and the methods by which collected data have been analyzed in arriving at our value conclusion. Our analysis included an inspection of the premises, interviews with knowledgeable market participants, a review of historical income and expense statements, the current rent roll, and other relevant financial and market information. As an income-producing property, greatest reliance is placed upon the value derived through the Income Capitalization Approach, with support provided by the conclusion rendered through implementation of the Sales Comparison Approach.

This appraisal report has been prepared in order to comply with the reporting requirements set forth under Standards Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice (USPAP) for a Complete Appraisal in Summary Report format. As such, it presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation not presented herein has been retained in the appraiser’s file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated herein.

Continued...

33 Wood Avenue South, Suite 600, Iselin, NJ 08830

t e l 732.321.4235 • f a x 732.321.6562

w w w . f i r s t a m . c o m

Ms. Martha Long	March 9, 2007
Apartment Investment and Management Company	Page 2

The attached Summary Appraisal Report describes our investigation and analyses, together with Certification, Basic Assumptions and Limiting Conditions, upon which we have based our opinion that the market value of the Leased Fee Estate of the subject property, as of January 19, 2007, was:

ONE HUNDRED TWO MILLION THREE HUNDRED THOUSAND DOLLARS
($ 102,300,000)

It has been a pleasure to be of service to you. Please do not hesitate to call with any questions you may have regarding our assumptions, observations or conclusion.

Very truly yours,

KTR VALUATION & CONSULTING SERVICES, LLC

By:	John J. DeFoe, MAI
	Senior Managing Director
	NJ Certification #RG01246

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page i

CERTIFICATE OF VALUE

I, John J. DeFoe, MAI certify that to the best of my knowledge and belief:

The statements of fact contained in this appraisal are true and correct.

The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions.

I have no present or prospective interest in the property that is the subject property of this appraisal, and I have no personal interest or bias with respect to the parties involved.

My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event

My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) as promulgated by the Appraisal Standards Board of the Appraisal Foundation, the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute, and Title XI (and amendments) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) effective August 9, 1990.

I have made a personal inspection of the property that is the subject of this appraisal. No one provided significant professional assistance in the completion of this appraisal.

This appraisal was not prepared in conjunction with a request for a specific value or a value within a given range or predicated upon loan approval.

I have the knowledge and experience necessary to perform this appraisal assignment and have previously appraised this type of property.

As of the date of this appraisal, I have completed the requirements under the continuing education program of the Appraisal Institute.

The use of this report is subject to the requirements of the Appraisal Institute relating to review its duly authorized representatives.

KTR VALUATION & CONSULTING SERVICES, LLC

By:	John J. DeFoe, MAI
	Senior Managing Director
	NJ Certification #RG01246

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page ii

BASIC ASSUMPTIONS AND LIMITING CONDITIONS

This Appraisal Report is subject to underlying assumptions and limiting conditions qualifying the information contained in the Report as follows:

The valuation estimates apply only to the property specifically identified and described in the ensuing Report.

Information and data contained in the Report, although obtained from public record and other reliable sources and where possible, carefully checked by the Appraiser, are accepted as satisfactory evidence upon which rests the final expression of property value.

The Appraiser has made no legal survey nor has he commissioned one to be prepared and therefore, reference to a sketch, plat, diagram or previous survey appearing in the Report is only for the purpose of assisting the reader in visualizing the property.

It is assumed that all information known to the client and relative to the valuation has been accurately furnished and that there are no undisclosed leases, agreements, liens or other encumbrances affecting the use of the property.

Ownership and management are assumed to be competent and in responsible hands.

No responsibility beyond reasonableness is assumed for matters of a legal nature, whether existing or pending.

Information identified as being furnished or prepared by others is believed to be reliable but no responsibility for its accuracy is assumed.

The Appraiser, by reason of this appraisal, shall not be required to give testimony as an expert witness in any legal hearing or before any court of law unless justly and fairly compensated for such service.

By reason of the Purpose of the Appraisal or Function of the Report herein set forth, the value reported is only applicable to the Property Rights Appraised and the Appraisal Report should not be used for any other purpose.

Disclosure of the contents of this report is governed by the by-laws and Regulations of the Appraisal Institute.

Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation or other potentially hazardous materials may affect the value of the property. Any value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired.

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page iii

In arriving at the value set forth in this appraisal no consideration has been given to the effect of state, local or federal income and gains taxes or of occupancy, hotel, capital levy, gift, estate, succession, inheritance or similar taxes which may be imposed upon any owner, lessee, or mortgagee by reason of any sale, conveyance, transfer, leasing, hypothecation, mortgage, pledge or other disposition of the appraised property.

The appraiser was not provided architectural plans for the subject property, thus the square footage as indicated on the rent roll, marketing brochures, and unit mix provided by the client has been utilized. In the event this information is inaccurate, we reserve the right to modify this appraisal if so warranted.

This report has been prepared exclusively for the use of our client, Apartment Investment and Management Company. It is not to be relied upon by any third party for any purpose.

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page iv

SUBJECT PROPERTY PHOTOGRAPH

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page v

LOCATION MAP

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page vi

TABLE OF CONTENTS

Title Page
Letter of Transmittal
Certificate of Value		i
Basic Assumptions and Limiting Conditions	ii
Subject Photograph	iv
Location Map		v
Table of Contents	vi
Executive Summary		1
Introduction and Premises of the Appraisal		2
Economic Overview		4
Site Analysis		13
Description of Improvements		16
Apartment Market Overview		18
Economic Rent Analysis		20
Highest and Best Use		26
Valuation Procedure		27
Income Capitalization Approach		28
Sales Comparison Approach		33
Reconciliation and Final Value Conclusion		35

ADDENDA

Additional Subject Photographs
Tax Map
Aerial Photograph
Appraiser Qualifications

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 1

EXECUTIVE SUMMARY

Property:	Fox Run Apartments
Location:	60 Fox Run Drive, Plainsboro, New Jersey 08536
Purpose of Appraisal:	To estimate the Market Value of the subject property as of the date of value.
Date of Value:	January 19, 2007
Date of Report:	March 9, 2007
Interest Appraised:	Leased Fee Estate
Description of Property:	The subject property consists of a 46.409-acre site improved with a 776- unit garden apartment complex comprised of 58 two-story buildings. The property is known as Fox Run Apartments and was constructed in 1972 and 1973. The property contains a mix of one and two-bedroom unit types, with an average unit size of 713 square feet. The property has a good suburban location in a primarily residential setting near parks and schools. Quality and condition are average.
Zoning:	The subject site is located within the PCD Planned Development Zone. The subject is a legal conforming use within this district.
Flood Zone:	According to the FEMA Flood Insurance Rate Map Number 340275 0004B, dated June 19, 1985, all or nearly all the subject site is located within Zone C, an area of minimal flooding. It appears that a small area of the southern portion of the site which borders Plainsboro Pond may lie within Zone A, an area of 100-year flooding. Since this Portion of the site is unimproved, its potential location in a flood zone does not diminish the utility or marketability of the existing improvements. A survey is recommended to definitively determine the subject’s flood zone status.
Highest and Best Use:	Multifamily residential development.
Marketing Period:	Less than 12 months

Final Estimate of Market Value, by Approach
Cost Approach:		N/A
Sales Comparison Approach:	$	102,400,000
Income Approach:	$	102,300,000
Final Estimate of Market Value:	$	102,300,000

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page 2

INTRODUCTION AND PREMISES OF THE APPRAISAL

SCOPE OF THE ASSIGNMENT

According to the Appraisal Institute’s Code of Professional Ethics and Uniform Standards of Professional Appraisal Practice, the scope of the appraisal is cited as “the extent of the process of collecting, confirming, and reporting data” included in an appraisal report. The scope of this appraisal employs all applicable appraisal techniques and constitutes a Complete Appraisal as defined by USPAP. The presentation of data, analyses and conclusions are presented in summary report format.

The data included in this report has been researched from the subject property’s influencing market. County and City officials were interviewed regarding taxes, zoning requirements, flood zone information, demographic data, planned construction, recently completed developments, and other economic impacting events. Market participants, including real estate brokers and property managers, were consulted regarding market parameters and activity. Lenders as well as investor surveys were consulted regarding investment parameters. The Sales Comparison and Income Capitalization Approaches to value have been performed in estimating the Market Value of the subject. Leasing agents for the competitive complexes were interviewed regarding property specific information. Supply and demand factors affecting the local market have been analyzed.

PURPOSE AND USE OF APPRAISAL

The purpose of the appraisal is to estimate the market value of the leased fee estate in the subject property as of January 19, 2007. It is for the internal use of AIMCO to facilitate asset evaluation.

PROPERTY RIGHTS APPRAISED

The property interest appraised is that of the Leased Fee Estate. A Leased Fee Estate is defined by The Dictionary of Real Estate Appraisal, Second Edition AIREA, as:

“An ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others; the rights of lessor (the leased fee owner) and leased fee are specified by contract terms contained within the lease.”

MARKETING PERIOD

The value conclusion reported herein assumes a marketing period of less than one year. According to the Korpacz Real Estate Investor Survey, 4th Quarter 2006, apartment properties in the national market have an average marketing time of 5.73 months. This estimate seems reasonable, given the recent market activity and the subject profile.

PROPERTY HISTORY

The subject property is owned by Fox Run XI. The current improvements were reportedly constructed in 1972 and 1973. There have been no transfers of ownership within the three-year period prior to the date of value. It is our understanding that the subject property is not listed for sale and we are not aware of any contracts of sale pending at this time.

MOST LIKELY BUYER

National and regional investors typically purchase multifamily properties of this size in markets such as the subject.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 3

DEFINITION OF MARKET VALUE

Market Value, as approved and adopted by the Appraisal Foundation in the Uniform Standards of Professional Appraisal Practice is as follows:

“The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.

Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1.	buyer and seller are typically motivated;
2.	both parties are well-informed or well advised, and acting in what they consider their best interests;
3.	a reasonable time is allowed for exposure in the open market;
4.	payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and
5.	the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.”

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 4

ECONOMIC BASE ANALYSIS

The subject property is situated in the Township of Plainsboro, Middlesex County, New Jersey. Middlesex County is located in Northern New Jersey.

Generally defined as the eleven-county region in New Jersey (Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Passaic, Somerset, Sussex and Union), Northern New Jersey is an integral component of the larger New York Metropolitan area. Centrally located in the Boston to Washington corridor, the region combines excellent transportation links, a diverse and educated work force, a range of housing and proximity to New York City and Philadelphia.

The region is one of contrast and change. In the west, Hunterdon and Sussex counties remain basically rural with much of the area composed of farmland, forests, rolling hills and valleys, and lakes and rivers, although suburbia has begun to put pressure on open space. To the east, in Morris, Somerset and Passaic Counties, the land use is more suburban, with a heavier concentration of population and industry. Passaic County, the birthplace of the American Industrial Revolution, has an old industrial base and a population largely concentrated in Clifton, Passaic and Paterson, three of New Jersey’s larger cities. Morris and Somerset counties are more suburban, with smaller manufacturing bases. Monmouth County is the region’s summer playground, with its beaches on the Atlantic Ocean. Home to major corporate headquarters, financial institutions and research and development activity, these counties have a highly skilled labor force and some of the lowest unemployment rates in the state. Bergen, Essex, Hudson, Middlesex and Union counties are suburban to urban, housing 68.0% of the region’s population and 41.0% of the state’s population. Separated from New York by the Hudson River and Raritan Bay, the eastern portions of these counties (especially Bergen and Hudson) contain some of the most densely developed land in the nation.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 5

REGIONAL MAP

New Jersey is the nation’s most densely populated state. Approximately 6 million people live in Northern New Jersey and the region houses two thirds of the entire state population. At this point, future growth in many areas is restricted by land costs and infrastructure limitations including traffic congestion, water and sewer shortages and waste disposal restraints. Out migration from the heavily urbanized northeastern counties to the suburban and rural western and southern counties is expected to continue in the coming decade. Growth will be concentrated in the central counties of Middlesex and Somerset along the established transportation corridors of I-287, I-78 and Route 1. New household formations are expected to be concentrated in Bergen, Morris and Middlesex counties. These three counties will gain 153,000, well over half of the total number of new households.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 6

Northern New Jersey Population Projections

											% Change
County	1998		2005		2008		2010		2015		1998-2005
Bergen		875,200		905,600		918,800		928,800		953,500		3.47	%
Essex		766,400		778,400		783,600		787,000		800,600		1.57	%
Hudson		570,100		586,300		599,500		605,700		624,300		2.84	%
Hunterdon		125,900		134,300		137,500		13,900		148,200		6.67	%
Middlesex		731,400		773,300		792,400		804,300		840,600		5.73	%
Monmouth		617,900		658,300		674,500		685,400		714,100		6.54	%
Morris		470,700		500,500		512,500		520,600		545,400		6.33	%
Passaic		494,900		498,600		501,100		503,800		505,300		75.00	%
Somerset		291,300		326,800		340,400		348,600		377,100		12.19	%
Sussex		146,600		155,800		159,400		162,100		171,200		6.28	%
Union		509,900		521,600		526,800		530,700		536,100		2.29	%

Source: NJ Dept. of Labor

According to estimates from the US Bureau of the Census, the number of persons living in the region rose by 103,080 from April 2000 to total 5,800,716 in July 2002, an increase of 1.8% compared with the state’s 2.1%. Within the region, Middlesex County posted the largest numeric gain, increasing by 25,387 to 775,549. Other counties with significant growth included Monmouth (14,535), Somerset (12,396) and Bergen (10,973). Population growth was positive for the entire 11-county Northern New Jersey Region. Per capita income in the 11-county northern region was an estimated $42,638 in 2001 (the latest data available on a county level), higher than both the state ($38,625) and nation ($30,413). Incomes in the region are high due, in significant part, to well paying jobs in New York City where many residents work and to the presence of a number of major corporate headquarters, financial institutions and research and development facilities. Seven of the top ten counties with the highest per capita incomes in the state are located in the region. Bergen, Hunterdon, Morris, and Somerset are ranked among the top 50 of the nation’s highest per capita counties.

Transportation

The metropolitan region benefits from a vast transportation infrastructure that has historically provided its framework for growth. The Port of New York/New Jersey is the nation’s largest in terms of both total tonnage and the dollar value of freight hauled. Port Newark/Elizabeth accounts for more than 75% of the total tonnage that moves through New York Harbor and occupies an area in excess of 2,200 acres, providing docking services for over 2,500 ships annually. It is directly accessible to Newark International Airport, the New Jersey Turnpike (Interstate 95) and connecting highways. A dredging project is underway that will provide a 45-foot depth, permitting the next generation of container ships to access the port. In 2001, the Port of New York/New Jersey handled 20 million tons of general cargo including nearly 3.3 million TEUs (20-foot equivalent units) of containerized cargo.

Port Newark and the Elizabeth Port Authority Marine Terminal operate as one fully integrated marine terminal, forming the largest and most comprehensive collection of maritime cargo handling facilities on the East Coast of North America. The entire complex is part of Foreign-Trade Zone No. 49, operated by the Port Authority of New York & New Jersey. Located on the western shore of Newark Bay in Essex and Union counties in New Jersey, the Newark/Elizabeth facility encompasses a full range of maritime commerce activities: major container handling terminals, automobile processing and storage facilities, liquid and solid bulk terminals, break bulk facilities, warehousing and distribution buildings, trucking firms, and an on-dock rail terminal.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 7

The leading airports in the area are Newark International Airport in northern New Jersey, and Kennedy International and LaGuardia Airports in New York City’s Borough of Queens, and Philadelphia International Airport, in Philadelphia, Pennsylvania.

Newark International Airport was recently renamed Newark Liberty International Airport, and is currently undergoing a $3.8 billion development program that includes the recently completed extension of the AirTrain system, completion of a second International Arrivals Facility, modernizing passenger terminals, improving airport access, expanding roadways, additional parking, and improving runways and taxiways.

Public mass transit needs are served by extensive commuter rail and bus networks, which are primarily designed to provide commuter service between the suburbs and Manhattan. The NJ Transit and the PATH railway systems service the New Jersey suburbs. Covering a service area of 5,325 square miles, NJ Transit is the nation’s third largest provider of bus, rail and light rail transit, linking major points in New Jersey, New York and Philadelphia. The agency’s fleet of 2,025 buses, 614 trains and 45 light rail vehicles serves more than 380,500 customers daily. On 238 bus routes and 12 rail lines statewide, NJ Transit provides nearly 224 million passenger trips each year.

Significant interstate highways serving the Northern New Jersey region include Interstate 95, which connects the area with other cities along the eastern seaboard, Interstate 80, which extends west to Pennsylvania from a junction in northern New Jersey with Interstate 95; Interstate 78, which provides access to New York City via Staten Island and to Pennsylvania to the west; Interstate 287 (completed in late 1993) which provides a western circumferential route around New York City for long distance auto and truck traffic; and Interstate 87, which provides access to New York City from upstate New York and Canada.

Economy and Employment

Northern New Jersey enjoys a highly diverse economy. As of 2003, the New Jersey Department of Labor estimated a work force totaling 2,989,400.

Companies with a presence in the region include a significant number of pharmaceutical companies, such as Aventis Pharma AG and Novartis Pharmeceuticals, which both have their U.S. headquarters in New Jersey, and a thriving R&D sector. New Jersey ranks first nationally in the manufacturing of pharmaceutical products, with 40% of all new drugs approved by the Federal Drug Administration coming from the state. The eastern most counties of Hudson, Essex, and Union include a large industrial sector.

Employment growth by sector for the entire state over the past year is summarized in the following table.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 8

New Jersey Non-farm Employment Estimates

Sector	Dec. ’05		Dec. ’06		Change
Total Nonfarm		4,101,500		4,122,000		20,500
Total Private Sector		3,446,900		3,462,600		15,700
Goods Producing		499,300		489,400		-9,900
Natural Resources and Mining		1,800		1,900		100
Construction		172,600		173,400		800
Manufacturing		324,900		314,100		-10,800
Service-Providing		3,602,200		3,632,600		30,400
Private Service-Providing		2,947,600		2,973,200		25,600
Trade, Transportation, & Utilities		910,600		909,100		-1,500
Information		97,400		94,400		-3,000
Financial Activities		283,800		284,800		1,000
Professional and Business Services		597,900		607,700		9,800
Educational and Health Services		569,300		580,700		11,400
Leisure and Hospitality		329,900		335,900		6,000
Other Services		158,700		160,600		1,9100
Total Government		654,600		659,400		4,800

Source: NJ Department of Labor

New Jersey’s non-farm employment increased by 20,500, or nearly 0.5%, in 2006. State employment is at an all-time high. The state has regained all of the jobs lost during the national recession, and added more jobs. The December 2006 unemployment rate was 4.2% for the state, and 4.5% for the nation.

With a continued economic rebound expected, the State Department of Labor projects regional employment growth of 11% by 2008, with the majority of new jobs coming in the services, professional/technical and sales sectors.

Conclusion

The region is experiencing positive growth in all sectors of the economy, excluding manufacturing, which is being restructured primarily in response to foreign competition. Employment is at an all time high, above the records set during the boom of the late 1990’s. Services and trade should remain strong due to the region’s location, extensive transportation network, and a highly educated workforce that continue to attract new businesses. Furthermore, the region’s wholesale trade should benefit from strong growth in many emerging economies and in international trade.

County Analysis

Middlesex County is situated within the central-easterly portion of New Jersey and is bordered by Union County to the north, Somerset County and Mercer County to the west, Monmouth County to the south, and Raritan Bay and Staten Island, New York to the east. The county seat, the City of New Brunswick, lies approximately 32 miles southwest of New York City and 70 miles northeast of Philadelphia. The county is comprised of 25 municipalities and contains approximately 318 square miles, making it the 12th largest in size among the state’s 21 counties.

The county is traversed by many major roadways, including the New Jersey Turnpike (Interstate 95), the Garden State Parkway, Interstate 287, and U.S. Routes 1, 9, 18, 27, 35, and 130. Passenger rail and bus lines provide access to Philadelphia, Trenton, Newark, New York City, and various other points. Passenger rail service is provided by New Jersey Transit that provides service along the Northeast

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 9

Corridor line, the North Jersey Coast Line, and the Raritan Valley Line. Amtrak also provides service between Philadelphia and Newark along the Northeast Corridor line. New Jersey Transit and Suburban Transit provide bus service within the county as well as to New York and Philadelphia. Newark International Airport, John F. Kennedy International Airport (in New York City), and LaGuardia Airport (also located in New York City) provide service to county residents.

The northern half of the county is densely developed. The southern portion is more rural, with large tracts of vacant and agricultural land and lower density residential development.

Land use within the county is summarized as follows:

Middlesex County Land Use

Class	# Parcels		% Valuation
Vacant		20,729		4.00
Residential		172,682		57.98
Farm		1,819		.33
Commercial		7,885		13.28
Industrial		2,180		19.10
Apartment		669		5.32
Total		205,964

Source: NJ Municipal Data Book

Much of the rural land in the county’s southern areas is being converted to residential or commercial uses. This trend is expected to continue, as businesses and population seek to escape the congestion and social problems of the state’s urbanized northern areas.

Population

The county enjoys steady population growth, due in large part to the ongoing migration from the urbanized northeastern portion of the state to areas south and west. Population growth since 1970 is summarized as follows:

Middlesex County Population Trends

1990	2000	2005	2010
671,747	750,162	800,915	848,816

Source: DemographicsNow

Income

DemographicsNow estimates that median household income in the county was $68,685 as of 2005. Average household income was $103,075.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 10

Employment

Growth in employment in the county has coincided with population growth. Much of this employment growth has been in the service sector. Service sector employment gains have been due largely to job growth in health and engineering, management and accounting services. Hospitals account for half of the jobs in health services.

Over the last ten years, Middlesex County’s unemployment rate has been consistently lower than the state and national rates. As of December 2006, the county had an unadjusted unemployment rate of 3.4%, below the state unadjusted unemployment rate of 3.9%.

Major employers in the county are summarized below.

Major Middlesex County Employers

Company	Employees
Telecordia Technology		4,000 - 4,249
Bristol-Myers Squibb		3,750 - 3,999
Merrill Lynch & Company		3,250 - 3,499
Prudential Insurance Company		3,000 - 3,249
Silverline Building Products		3,000 - 3,249
Johnson & Johnson		2,750 - 2,999
Robert Wood Johnson University Hospital		2,750 - 2,999
AT & T		2,500 - 2,749
J.F.K. Medical Center		2,500 - 2,749
St. Peter’s University Hospital		2,250 - 2,499
Dow Jones & Company		1,750 - 1,999
Raritan Bay Medical Center		1,750 - 1,999
White Consolidated Industries		1,750 - 1,999
Amerada Hess Corporation		1,500 - 1,749
Siemens AG		1,500 - 1,749

Source: Middlesex County Office of Economic Development

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 11

AREA MAP

Municipal and Neighborhood Analysis

Plainsboro Township, located in southern Middlesex County, is a growing suburban municipality. Growth has resulted in large part from the township’s location along the dynamic Route One corridor (the state’s largest office submarket).

The township comprises 12.01 square miles and is characterized by agricultural and low-density residential land uses, although there is a significant commercial component in the form of retail, hotel and office development along the Route One corridor.

Median household income as of the 2000 census was $72,097. Population as of 2000 was 20,215, up 42.2% from 1990. Many residents are attracted to the township because of the quality of the local school district, which is consistently ranked among the best in the state.

The subject is located in the southern portion of the township. Other properties in the neighborhood include single-family residences, schools, parks, the township municipal building, and a small business park. Plainsboro Pond borders the subject to the south. The Princeton Junction train station, located less than two miles south of the subject in West Windsor, provides commuter access to New York City. Route One, which features a high concentration of retail and office uses, is located approximately two miles west of the subject.

The subject is very well located for apartment use, given the nature of its neighborhood and its convenient access to shopping and employment.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 12

NEIGHBORHOOD MAP

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 13

SITE ANALYSIS

Location	The site is located along the southern side of Plainsboro Road, approximately 500 feet of its intersection with Edgemere Avenue. The site also features a small amount of frontage along the eastern side of Pond View Road. The site is bordered to the south by Plainsboro Pond.
Size	The site comprises 46.409 acres.
Excess Land	None
Topography	The site’s topography varies, but is generally level and at street grade.
Street Improvements	Plainsboro Road is an asphalt paved, two-way lane, concrete curbed thoroughfare.
Desirability of Location	Good
Access to Major Arteries	Good
Access to Local Arteries	Good
Curb Appeal	Good
Ingress/Egress	Average
Visibility from Road	Average
Public Transportation	Average
Neighborhood Appearance	Good
Easements	The appraisers were not provided with a site survey or title documents that provide information on the existence of easements and encroachments. Other than typical utility easements, visual observation of the site did not reveal the existence of adverse easements or encroachments. However in the absence of a site survey and title documents, the appraiser makes no representation as to the presence of adverse easements or encroachments.
Soil Conditions	Visual observation does not indicate any surface or subsurface soil conditions that are unusual for the area. Based on our inspection, it appears that the soil is of adequate load bearing capacity to support the subject improvements. No major foundation cracks were visible upon inspection of the subject improvements that would indicate the subsoil conditions are not stable. No nuisances or hazards were noted.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 14

Flood Zone:	According to the FEMA Flood Insurance Rate Map Number 3402750004B, dated June 19, 1985, all or nearly all the subject site is located within Zone C, an area of minimal flooding. It appears that a small area of the southern portion of the site along Plainsboro Pond may lie within Zone A, an area of 100-year flooding. Since this portion of the site is unimproved, its potential location in a flood zone does not diminish the utility or marketability of the existing improvements. A survey is recommended to definitively determine the subject’s flood zone status.
Land Use Restrictions	The appraisers are unaware of any deed restrictions, which may adversely affect the utility of the subject site; however, this is not a guarantee that such restrictions may exist. Therefore, it is recommended that a current title policy be obtained for the subject property, which would disclose any land use restrictions that may exist.
Zoning:	The subject site is located within the PCD Planned Development Zone. The subject is a legal conforming use within this district.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 15

REAL ESTATE TAXES

The subject is within the taxing jurisdiction of Plainsboro Township. Taxes are on a calendar year basis. The subject’s assessment and tax information is summarized as follows.

Assessor’s I.D.	Block 2001, Lots 3 & 17
Equalization Rate	92.63%
Total Assessment	$45,396,000
Tax rate per $100 of Value	$2.049 (2006 rate, 2007 rate not yet established).
Annual Taxes	$930,164
Payment Due Date	Paid quarterly on a calendar year basis.

The most recent municipal revaluation occurred in 2005. There is no revaluation planned for the near future. Applying the equalization rate to the assessment results in the assessor’s market value estimate of $49,007,881. This is 52.1% below our market value estimate of $102,300,000. As a result, there is the chance that the subject’s tax burden could increase significantly upon reassessment.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 16

DESCRIPTION OF IMPROVEMENTS

The subject site is improved with a 776-unit garden apartment complex known as the Fox Run Apartments. Construction of the improvements was reportedly completed in 1972 and 1973. The property contains a mix of one and two-bedroom units types, with an average units size of 713 square feet. The units are located in 58 buildings located along both sides of Fox Run Drive, a private thoroughfare which runs through entire site and leads to Plainsboro Road.

The buildings feature wood frame construction with vinyl siding and brick veneer exterior walls and pitched roofs covered with composition shingles. Amenities common to all units include standard kitchen appliances (refrigerator/freezer, oven/range, garbage disposal and dishwasher) and decks or patios. Some units (reportedly about 35%) have washers and dryers. Community amenities include an on-site management/leasing office, an in ground pool, tennis court, fitness center, and a business center.

Construction details are further summarized as follows.

KTR Newmark Site Inspector	John J. DeFoe
Date of Inspection	January 19, 2007
Property Contact	Rebecca Farrand - On-site Manager
Year Built	1972 & 1973
Number Units	776
Buildings, Stories	58 buildings, two-story
Parking	There is an adequate amount of open space parking in the numerous lots near the buildings.
Foundations:	Reinforced concrete
Frame:	Wood
Exterior Walls:	Vinyl and brick siding
Roof:	Pitched covered with composition shingles. Roofs over open stairways to second floor units are flat.
Doors and Windows:	Exterior entrance doors are solid core wood. Interior doors are hollow-core wood. Windows are sliding style. Sliding glass doors provide access to patios and balconies.
HVAC:	Units feature individual gas fired forced hot air heating and electric central air conditioning. Plumbing: Kitchens contain sink, dishwasher, and garbage disposal. Bathrooms contain toilets, and vanity sink and tub/shower combinations with ceramic tile surrounds.
Electrical:	Each apartment has its own breaker box and is separately metered for electricity.
Walls and Ceilings:	Walls and ceilings are painted sheetrock.
Floors:	Interior floors are carpet over padding in living areas and bedrooms with ceramic tile or vinyl flooring in the entrance area, kitchen, and bathrooms.
Kitchen Equipment:	Built-in cabinets are wood with laminate counter tops and stainless steel sink. Appliances include a gas stove/range, dishwasher, garbage disposal and refrigerator/freezer.

The following chart illustrates the property’s unit breakdown and size.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 17

SUBJECT PROPERTY UNIT MIX AND SIZES

Type	Number		Size(SF)		Total Size (SF)
1BR/1BA		624		675		421,200
2BR/1BA		72		835		60,120
2BR/1.5BA		80		900		72,000
Total/Avg.		776		713		553,320

The improvements are of good quality and in average condition, with no significant deferred maintenance noted. Appeal is good, given the layouts of the site and the apartment units.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 18

APARTMENT MARKET OVERVIEW

Apartments remain a staple in the portfolios of institutional investors. Although massive new development in some markets has resulted in diminished investor interest, demand remains very strong in markets with significant barriers to entry. The average overall capitalization rate reported by participants in the Korpacz Real Estate Investor Survey stood at 5.97% in the fourth quarter of 2006, 16 basis points below a year earlier. This reflects the continued strong demand from investors in the national apartment market.

Investors consider apartments to be attractive real estate investments for the following reasons:

1. The diversity of the tenant base in apartment properties reduces uncertainty with regard to releasing risk over time;

2. The strength of rental demand of apartment units is more readily determined from demographic data than most other property types;

3. The short-term nature of most apartment leases forces property managers to adjust rents to market on a regular basis; and

4. The relative stability of apartment cash flows makes multi-family properties a more liquid investment as compared to other types of commercial properties.

Investor demand for apartments in the New York region remains high, due to steady population and household growth, decreasing home affordability, and relatively limited potential for new development.

Northern New Jersey Market

The Northern New Jersey apartment market is considered among the stronger markets in the nation. This is due to the diversity of the regional economy, relatively high home ownership costs, and limited new development due to the scarcity of sites remaining to be developed.

Apartment development trends in Northern New Jersey are summarized in the following table.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 19

Northern New Jersey
Apartment Development Trends

	Units
Year	Completed
1999		2,100
2000		2,000
2001		1,150
2002		1,100
2003		2,250
2004		1,300
2005		350
2006*		1,000

Source: Marcus & Millichap

* Estimate

According to Marcus & Millichap, vacancy at mid-year 2006 was 4.1%, down 20 basis points from the prior year. Given the downturn in new construction, and continued household and population growth, vacancy is expected to decrease in the near future. In October 2006, Marcus & Millichap forecast a year-end vacancy rate of 3.9%.

Marcus & Millichap reports regional rent growth of 2.8% for 2006, to an average asking rent of $1,404. Effective rents are estimated to have increased by 3.1% during the year, to $1,349 per month. Given the current low vacancy rate, a low level of new development, and the continued increase in demand, further rent growth is expected in the near term.

Marcus & Millichap ranked the Northern New Jersey market 27 out of the nation’s 55 markets in terms of fundamental strength for 2006. This ranking is down twelve places from 2005. Improving economic conditions, restrained new development, and the increasing cost of home ownership are expected to maintain upward pressure on rent and occupancy levels.

Submarket Analysis

The local apartment market has been characterized by high occupancy levels and steadily increasing rents. Rent growth is attributed to ongoing population and household growth, a relatively low level of new apartment development, and steadily increasing home ownership costs.

Among the subject and its four most direct competitors, occupancy levels range from 95% to 97%, with a weighted average occupancy level of 96%.

Conclusion

Given the strength of the regional and local apartment markets, the outlook for the subject property is quite positive.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 20

ECONOMIC RENT ANALYSIS

Four competitive properties are presented on the following pages. They are located near the subject and are generally comparable to the subject in terms of physical characteristics. The information regarding the rent comparables was obtained through interviews of rental agents and property managers.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 21

Rent Comparable One

Address:	Hunters Glen 11-09 Hunters Glen Drive Plainsboro
Number of Units:	896
Description:	Two-story garden apartment complex which is very similar to subject in terms of age, design, quality, condition, and appeal.
In-Unit
Amenities:	Garbage disposal, dishwasher, washers and dryer in select units, patio/balconies, air conditioning and carpeting.
Common Area:	Fitness center, shared laundry rooms, swimming pool, playground, basketball court, and tennis court. Outdoor parking and bus shuttle to Princeton Junction train station.
Rental Summary:

									Min Rent		Max Rent
Unit Type	Min SF		Max SF		Min Rent		Max Rent		PSF		PSF
1 BR		695		695	$	939	$	1,039	$	1.35	$	1.49
2 BR		835		835	$	1,219	$	1,299	$	1.46	$	1.56
2 BR		920		920	$	1,329	$	1,409	$	1.44	$	1.53

Utilities:	Tenant pays for all utilities.
Concessions:	NA
Occupancy:	95%

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 22

Rent Comparable Two

Address:	Deer Creek 305 Deer Creek Drive Plainsboro
Number of Units:	288
Description:	Two-story garden apartment complex which is generally comparable to subject in terms of physical characteristics and appeal.
In-Unit
Amenities:	Garbage disposal, dishwasher, microwave, washers and dryer in select units, patio/balconies, air conditioning, ceiling fans and carpeting.
Common Area:	Fitness center, shared laundry room, swimming pool, paved jogging trail, sand volleyball court, and tennis court. Outdoor parking and bus shuttle to Princeton Junction train station.
Rental Summary:

									Min Rent		Max Rent
Unit Type	Min SF		Max SF		Min Rent		Max Rent		PSF		PSF
1 BR		695		695	$	929	$	1,019	$	1.34	$	1.47
2 BR		835		835	$	1,219	$	1,289	$	1.46	$	1.54
2 BR		920		920	$	1,319	$	1,409	$	1.43	$	1.53

Utilities:	Tenant pays for all utilities.
Concessions:	Varies
Occupancy:	95%
Comments:	There are $80 and $90 amenity fees per lease term for one and two-bedroom units respectively.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 23

Rent Comparable Three

Address:	Raven’s Crest 32-17 Ravens Crest Drive Plainsboro
Number of Units:	704
Description:	Two-story garden apartment complex which is generally comparable to subject in terms of physical characteristics and appeal.
In-Unit Amenities:	Individual HVAC controls, dishwasher, washers and dryer, patio/balconies, storage, and walk-in closets. Some units have fireplaces.
Common Area:	Package service, extra storage, swimming pool, playground, and tennis court and outdoor parking.
Rental Summary:

									Min Rent		Max Rent
Unit Type	Min SF		Max SF		Min Rent		Max Rent		PSF		PSF
1 BR		672		772	$	885	$	1,005	$	1.28	$	1.30
2 BR/1BA		880		880	$	1,130	$	1,195	$	1.28	$	1.36
2 BR/2BA		939		982	$	1,285	$	1,450	$	1.37	$	1.48
2 BR/2BA/den		1,131		1,131	$	1,450	$	1,500	$	1.28	$	1.33

Utilities:	Tenant pays for all utilities.
Concessions:	None
Occupancy:	96%
Comments:	There is a $175 annual recreational fee the first year and $50 a year after that. New tenants must pay a $45 inspection fee.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 24

Rent Comparable Four

Address:	Pheasant Hollow 19-12 Pheasant Hollow Drive Plainsboro
Number of Units:	440
Description:	A good quality two-story apartment property consisting of a 400 one and two- bedroom units built in 1981.
In-Unit
Amenities:	Garbage disposal, dishwasher, patio/balconies, air conditioning, and cable ready. Some units have fireplaces.
Common Area:	On site laundry room and tennis court with access to pool at Quail Ridge for fee. Outdoor parking and bus shuttle to Princeton train station or New Jersey Transit bus to New York City.
Rental Summary:

									Min Rent		Max Rent
Unit Type	Min SF		Max SF		Min Rent		Max Rent		PSF		PSF
1 BR		647		647	$	870	$	870	$	1.34	$	1.34
2 BR/1BA		854		854	$	1,119	$	1,119	$	1.31	$	1.31
2 BR/2BA		911		911	$	1,225	$	1,225	$	1.34	$	1.34

Utilities:	Tenant pays for all utilities.
Concessions:	$250 off first month rent for one-year lease.
Occupancy:	96%
Comments:	There are $80 and $90 amenity fees per lease term for one and two-bedroom units respectively.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 25

ANALYSIS

The tables below illustrate the comparables with the most similar floor plans in relation to the subject’s floor plans.

ONE-BEDROOM FLOOR PLANS

Comparable #	Unit Size (SF)		Rent/Month		Rent/SF
Subject Asking		675	$	949-$1,049	$	1.41-$1.55
Subject Average Contract		675	$	951	$	1.41
Hunters Glen		695	$	939-$1,039	$	1.35-$1.49
Deer Creek		695	$	929-$1,019	$	1.34-$1.47
Raven’s Crest		672 - 772	$	885-$1,005	$	1.28-$1.30
Pheasant Hollow		647	$	870	$	1.34

TWO-BEDROOM FLOOR PLANS

Comparable #	Unit Size (SF)		Rent/Month		Rent/SF
Subject Asking		835	$	1,209 - $1,319	$	1.45-$1.58
Subject Average Contract		835	$	1,191	$	1.43
Subject Asking		900	$	1,289 - $1,399	$	1.43-$1.55
Subject Average Contract		900	$	1,278	$	1.42
Hunters Glen		835 – 920	$	1,219 - $1,409	$	1.44-$1.56
Deer Creek		835 – 920	$	1,219 - $1,409	$	1.43-$1.54
Raven’s Crest		880 – 1,131	$	1,130 - $1,500	$	1.28-$1.48
Pheasant Hollow		854 - 911	$	1,119 - $1,225	$	1.31-$1.34

The subject’s asking and average contract rents are consistent with the comparable rents and one another. To estimate potential rental income for the upcoming year, average contact rents will be applied. These rents will be escalated by 1.5% to reflect estimated annual market rent growth of 3.0%.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 26

HIGHEST AND BEST USE

HIGHEST AND BEST USE AS IF VACANT

Surrounding Land Uses: Residential, Parks, Commercial

Physically Possible:	Site can support various types of development.
Legally Permissible:	Multifamily
Conclusion:	As if vacant, a garden apartment complex.

HIGHEST AND BEST USE AS IMPROVED

Current Improvement:	776-unit garden apartment complex constructed in 1972 & 1973.
Conclusion:	Continued apartment use.

Fox Run Apartments
Plainsboro, New Jersey January 19, 2007
Page 27

VALUATION

There are three traditional approaches that can be employed in establishing Market Value. These approaches and their applicability to the valuation of the subject property are summarized as follows:

THE COST APPROACH

This method estimates the replacement or reproduction cost of the improvements, less the estimated depreciation (physical, functional, economic), plus the estimated market value of the land, in order to arrive at a final value indication. This approach is based on the premise that an informed purchaser would pay no more for a property than the cost of constructing a building of similar utility and condition. The Cost Approach is a reliable indicator of value for: (a) new properties; (b) special use properties; and (c) properties where the cost of reproducing the improvement is easily and accurately quantified and there is no external or economic obsolescence. Due to the age of the improvements, they have incurred physical deterioration due to normal wear and usage. Given the inherent inaccuracies and subjectivity involved in estimating substantial degrees of physical deterioration, the cost approach is not considered a reliable, independent approach to value in this instance.

THE SALES COMPARISON APPROACH

Using this technique, the property value is indicated by comparing the subject to similar, nearby properties that have recently sold. Essentially, the procedure is to gather bona fide, recent arm’s length sales of comparable properties and compare the most important characteristics of the sales to the subject. Adjustments are then made to the comparable properties for differences such as terms of financing, date of sale, location, and physical characteristics.

Attaining data with a high degree of comparability is most important when this technique is utilized. The reliability is dependent upon the availability of comparable sales data, the verification of the sales data, the degree of comparability and extent of adjustment necessary for differences and the absence of non-typical conditions affecting the sales price. Given the availability of recent comparable sales, this approach has been employed in the valuation process.

THE INCOME CAPITALIZATION APPROACH

The Income Capitalization Approach is a process in which the anticipated flow of future benefits is capitalized into a value indication. The Income Capitalization Approach is widely applied in appraising income-producing properties. The reliability of this technique is dependent upon the reliability of the net income estimate and the capitalization rate. Since the subject is income producing realty and anticipated to continue to be so, this approach has been employed in the valuation of the Leased Fee Estate.

RECONCILIATION AND FINAL VALUE ESTIMATE

The final step in the Appraisal Process is the reconciliation of the value indicators into a single value estimate. In the reconciliation or correlation, the appraiser considers the relative applicability of each of the three approaches, examines the range between the value indications and places major emphasis on the approach that appears to produce the most reliable solution to the specific appraisal problem. The purpose of the appraisal, the type of property and the adequacy and reliability of the data are analyzed and appropriate weight is given to each of the approaches to value.

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page 28

INCOME CAPITALIZATION APPROACH

Investment properties are normally valued in proportion to their ability to produce income; hence, an analysis of the property in terms of its ability to provide a sufficient net annual return on invested capital is an important means of valuing any asset. Value is estimated by deducting an appropriate vacancy and collection allowance and all applicable expenses from the anticipated gross annual income to arrive at a projected net operating income, which is then capitalized at an interest rate, or investment, yield, commensurate with the risk inherent in the ownership of the property. Such a conversion of projected income considers competitive returns offered by alternative investments.

There are two primary income capitalization methods: Direct Capitalization, which converts a single year’s net operating income into an indication of value and the Discounted Cash Flow Analysis (DCF), which estimates the present worth through the process of discounting the forecasted net income and the reversionary sale over the course of an anticipated investment period. The Direct Capitalization technique is employed in this analysis.

DIRECT CAPITALIZATION

The basic steps in the Direct Capitalization method are as follows:

1.	Calculate POTENTIAL GROSS INCOME from the dwelling units;
2.	Estimate VACANCY AND CREDIT LOSS to arrive at Effective Gross Income;
3.	Estimate OPERATING EXPENSES to arrive at the stabilized Net Operating Income;
4.	Develop the OVERALL CAPITALIZATION RATE;
5.	Divide NOI by the CAP RATE to arrive at VALUE.

Potential Rental Income: Potential rental income is estimated based on current average contract rents. Rental income is not applied to the unit utilized as a leasing and administrative office. Our calculation of potential rental income is summarized below.

			Potential		Total Potential
Unit Type	Units		Rent		Rent
1BR/1BA		624	$	951	$	593,424
2BR/1BA		72	$	1,191	$	85,752
2BR/1.5BA		80	$	1,278	$	102,240
Total/Avg.		776	$	1,007	$	781,416

As indicated, potential rental income is $781,416 per month, or $9,376,992 per year. To reflect estimated annual market rent growth of 3.0% (our general inflation estimate), this amount will be escalated by 1.5%, resulting in estimated potential rental income of $9,517,647 for the upcoming year.

Vacancy and Credit Loss: As of the date of inspection, the subject property was 97% occupied. The cited competitors reflect a vacancy rate range of 95 to 96%. The vacancy loss is estimated at 4.0% of potential rental income. In addition, a 1.0% allowance for credit loss is assessed. The combined vacancy and credit loss allowance equates to 5.0%.

Concession Loss: There are some limited concessions employed in the subject market, despite high occupancy rates. Over the past four years concession loss ranged from 2.8 to 4.2% of potential rental income, with an average of 3.5%. For 2007, management budgeted concession loss of 0.3%. Based on the subject’s history and budget, concession loss is estimated at 3.0% of potential rental income.

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page 29

Utility Reimbursements: Utility reimbursements ranged from $591 to $596 per unit over the past three years. For 2007, management has budgeted utility reimbursement income of $588 per unit. Based on the subject’s operating history and management’s budget, estimated utility reimbursement income for the upcoming year is $600 per unit.

Other Income: Included within this category is the revenue received from such items as application fees, forfeited deposits, late fees, pet fees, and rent premiums for short term leasing. Over the past four years, other income at the subject ranged from $561 to $601 per unit. Management has budgeted other income of $646 per unit for 2007. Based on the subject’s operating history and 2007 budget, other income is estimated at $650 per unit for the upcoming year.

Expenses: In order to project expenses for valuation purposes, the expenses historically incurred in the operation of the subject property have been reviewed and analyzed. The 2007 budget has also been considered. In addition, we have given consideration to the median expenses reported in a recent IREM survey of garden apartment complexes in the subject area. The following table presents a summary of the subject’s expense history and budget as well as our projection for the upcoming year.

SUMMARY OF HISTORICAL OPERATIONS FOX RUN APARTMENTS

	2003						2004						2005						1 - 11/06 Annualized						2007 Budget						KTR FY 2008
Income	Total			Per Unit			Total			Per Unit			Total			Per Unit			Total			Per Unit			Total			Per Unit			Total			Per Unit
Potential Rental Income	$	8,679,229		$	11,185		$	8,852,060		$	11,407		$	8,959,468		$	11,546		$	9,162,569		$	11,807		$	9,454,411		$	12,184		$	9,517,647		$	12,265
Vacancy & Collection Loss		($625,276	)		($806	)		($969,680	)		($1,250	)		($725,703	)		($935	)		($384,995	)		($496	)		($417,355	)		($538	)		($475,882	)		($613	)
Concession Loss		($362,102	)		($467	)		($245,581	)		($316	)		($362,101	)		($467	)		($266,651	)		($344	)		($29,731	)		($38	)		($285,529	)		($368	)
Effective Rental Income	$	7,691,851		$	9,912		$	7,636,799		$	9,841		$	7,871,664		$	10,144		$	8,510,924		$	10,968		$	9,007,325		$	11,607		$	8,756,235		$	11,284
Utility Reimbursements	$	173,180		$	223		$	462,125		$	596		$	460,478		$	593		$	458,774		$	591		$	456,067		$	588		$	465,600		$	600
Other Income	$	455,533		$	587		$	461,738		$	595		$	435,597		$	561		$	466,102		$	601		$	501,362		$	646		$	504,400		$	650
Effective Gross Income	$	8,320,564		$	10,722		$	8,560,662		$	11,032		$	8,767,739		$	11,299		$	9,435,800		$	12,160		$	9,964,754		$	12,841		$	9,726,235		$	12,534
Expenses
Real Estate Taxes	$	1,104,345		$	1,423		$	1,120,407		$	1,444		$	955,030		$	1,231		$	1,022,477		$	1,318		$	1,083,524		$	1,396		$	958,069		$	1,235
Insurance	$	240,009		$	309		$	224,243		$	289		$	223,956		$	289		$	274,909		$	354		$	289,237		$	373		$	291,000		$	375
Repairs & Maintenance	$	513,176		$	661		$	535,108		$	690		$	610,901		$	787		$	556,952		$	718		$	570,647		$	735		$	582,000		$	750
Utilities	$	817,575		$	1,054		$	782,094		$	1,008		$	890,684		$	1,148		$	840,463		$	1,083		$	903,503		$	1,164		$	892,400		$	1,150
Payroll	$	402,145		$	518		$	434,359		$	560		$	517,326		$	667		$	479,871		$	618		$	510,509		$	658		$	504,400		$	650
Marketing	$	35,581		$	46		$	92,304		$	119		$	96,465		$	124		$	138,088		$	178		$	153,682		$	198		$	155,200		$	200
Management Fees	$	410,151		$	529		$	417,125		$	538		$	438,619		$	565		$	469,677		$	605		$	502,903		$	648		$	291,787		$	376
General & Adminstrative	$	174,643		$	225		$	188,485		$	243		$	221,606		$	286		$	211,694		$	273		$	178,757		$	230		$	194,000		$	250
Reserves	$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	232,800		$	300
Total	$	3,697,625		$	4,765		$	3,794,125		$	4,889		$	3,954,587		$	5,096		$	3,994,131		$	5,147		$	4,192,762		$	5,403		$	4,101,656		$	5,286
Net Operating Income	$	4,622,939		$	5,957		$	4,766,537		$	6,142		$	4,813,152		$	6,203		$	5,441,668		$	7,012		$	5,771,992		$	7,438		$	5,624,579		$	7,248

Real Estate Taxes:	Real Estate taxes are estimated by increasing the 2006 amount to reflect 3.0% annual inflation.
Insurance:	Based primarily on management’s budget, the insurance expense is estimated at $375 per unit.
Repairs & Maintenance:	This category includes all costs associated with the upkeep and maintenance of the property. Since 2003, this expense has ranged from $661 to $787 per unit, with $735 per unit budgeted for 2007. Based on the subject’s operating history and management’s budget, the repairs and maintenance expense is estimated at $750 per unit.
Utilities:	Based on the subject’s recent operating history and management’ sbudget, the estimated utilities expense is $1,150 per unit.

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page 30

Payroll:	This expense covers salaries, payroll taxes, and workers compensation insurance for on site management, leasing, and maintenance personnel. Based on the subject’s operating history and budget, the estimated payroll expense is $650 per unit.
Marketing:	Based on the subject’s recent operating history and management’s budget, the estimated marketing expense is $200 per unit.
Management Fees:	The estimated management fee is 3.0% of effective gross income. This amount is market consistent for apartment complexes of the subject’s size.
General & Administrative:	Office expenses, telephone, computer maintenance and supplies, professional fees and miscellaneous expenses are covered in this category. Based on the subject’s operating history and budget, a general& administrative expense of $250 per unit is estimated.
Reserves for Replacement:	In addition to the repairs and maintenance expenditures, the property will incur annual capital expenditures to keep it in prime condition. A reserve category is typical for multifamily property; therefore we have included reserves as an additional budget item. A reserve for replacement allowance of $300 per unit or $232,800 is estimated for the subject property.
Total Expenses:	Total expenses have been estimated at $4,101,656 or $5,286 per unit inclusive of reserves. The resulting operating expense ratio equates to approximately 42%.
Net Operating Income:	The Net Operating Income is that amount of the income remaining after paying all operating expenses. This affords the owner capital with which to satisfy the debt service, if any, and provide a return on the owners equity. We have estimated the NOI to be $5,624,579.

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page 31

INCOME AND EXPENSE PRO FORMA

Income	Total			Per Unit
Potential Rental Income	$	9,517,647		$	12,265
Vacancy & Collection Loss		($475,882	)		($613	)
Concession Loss		($285,529	)		($368	)
Effective Rental Income	$	8,756,235		$	11,284
Utility Reimbursements	$	465,600		$	600
Other Income	$	504,400		$	650
Effective Gross Income	$	9,726,235		$	12,534
Expenses
Real Estate Taxes	$	958,069		$	1,235
Insurance	$	291,000		$	375
Repairs & Maintenance	$	582,000		$	750
Utilities	$	892,400		$	1,150
Payroll	$	504,400		$	650
Marketing	$	155,200		$	200
Management Fees	$	291,787		$	376
General & Adminstrative	$	194,000		$	250
Reserves	$	232,800		$	300
Total	$	4,101,656		$	5,286
Net Operating Income	$	5,624,579		$	7,248

Capitalization: Capitalization rates express relationships between net income and total value. The rate employed must be consistent with and reflective of those rates currently employed by investors active in the market place.

In order to perform this analysis, estimates of an appropriate capitalization rate must be formed. By its nature this is a judgmental process, however, selected rates should approximate the investment perimeters expected to be employed by the most probable buyer for the subject property.

Several approaches are typically followed in selecting the investment parameters; review and analysis of alternative real estate and non-real estate investments; review and analysis of published real estate investor surveys; derivation of rates from empirical market data; and use of in-house experience with similar types of investments.

Most Probable Buyer

Considering the size and quality of the asset, the subject buyer would most likely attract national or regional investors.

Survey of Investors

The most useful approach used to estimate an approximate rate of return required by the most probable buyer is to analyze the current investment parameters applied by institutional investors and advisors to real estate pension and portfolio funds when acquiring real estate. According to the Fourth Quarter 2006 Korpacz Real Estate Investor Survey, capitalization rates for institutional grade apartment properties range from 3.5% to 8.0% with an average of 6.0%. The subject property is a very well

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page 32

	located garden apartment property. The subject property would likely appeal to a multitude of national and regional investors.
Market Extraction	The sales utilized in the Sales Comparison Approach reflect a capitalization rate range of 4.9% to 7.0%, with an average of 5.6%. The sales are of regional apartment properties. Given the subject’s location and physical attributes and considering the potential for the subject’s real estate tax expense to increase significantly in the event of a reassessment, a subject capitalization rate slightly below the average is appropriate.
Conclusion	Considering the investor surveys and the capitalization rates reflected by the comparable sales, an appropriate capitalization rate for the subject property is concluded to be 5.5%.
Valuation:	Capitalizing the estimated Net Operating Income of $5,624,579 at 5.5%results in a value conclusion of $102,265,073, rounded to $102,300,000.
Final Value:	$102,300,000

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page 33

THE SALES COMPARISON APPROACH

The Sales Comparison Approach to value is the process of comparing recent sales of competitive properties. The estimated value derived via this approach represents the probable price at which the subject property would be sold by a willing seller to a willing buyer as of the date of value.

To estimate the property value by the Sales Comparison Approach, five local apartment property sales, which are summarized in the following table, have been examined and analyzed.

The price per apartment unit has been relied upon as the unit of comparison in this approach. The comparative process involves judgment as to the similarity between the subject property and the comparable sale property with regard to a variety of factors affecting value such as location, age and condition of the structure, market conditions, rent levels, property rights conveyed, financing terms, conditions of sale, operational efficiencies and other factors.

ANALYSIS OF SALES: The comparable sales are summarized in the following table.

SUMMARY OF COMPARABLE BUILDING SALES

	Sale 1			Sale 2			Sale 3			Sale 4			Sale 5
	Crystal Ridge			Avalon at						Brookside
Name	Club			Aberdeen Station			Carlton Club			Gardens			Matawan Village
Location	Watchung, NJ			Aberdeen, NJ			Piscataway, NJ			Somerville, NJ			Matawan, NJ
Sale Date		9/06			6/06			4/06			1/06			1/06
Price Per Unit	$	247,006		$	198,621		$	82,569		$	103,193		$	96,528
OAR		5.0	%		5.5	%		5.5	%		4.9	%		7.0	%
NOI/Unit	$	12,350		$	10,924		$	4,541		$	5,056		$	6,757
Number of Units		334			290			436			642			72
Year Built		2003			2002			1965			1939			1950’s

The sales reflect per unit prices ranging from $82,569 to $247,006. The primary difference between the comparables and the subject are location, quality, condition and unit mix/average unit size.

The most value influencing difference between the subject and the comparable sales is the amount of net operating income generated on a per unit basis. In an attempt to quantify appropriate adjustments to the prices indicated by the comparables, we have analyzed the difference between the net operating income (NOI) per unit of the comparables relative to the NOI of the subject property. In this analysis we have adjusted the sale price of the comparables based on the percentage difference in net income. This factor takes into account the adjustments necessary for the aforementioned factors that are considered to have the most impact on value.

The adjustments applied to the comparable sales are summarized as follows.

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page 34

PRICE PER UNIT ANALYSIS

					Subject		Adjustment		Adjusted
Sale	Price/Unit		NOI/Unit		NOI/Unit		Factor		Price/Unit
1	$	247,006	$	12,350	$	7,248		0.59	$	144,964
2	$	198,621	$	10,924	$	7,248		0.66	$	131,784
3	$	82,569	$	4,541	$	7,248		1.60	$	131,782
4	$	103,193	$	5,056	$	7,248		1.43	$	147,918
5	$	96,528	$	6,757	$	7,248		1.07	$	103,543

The adjusted unit prices range from $103,543 to $144,964 with an average of $131,998. As discussed in the Income Capitalization Approach, the estimated capitalization rate for the subject is 5.5%. This is the rate reflected by Sales Two and Three (5.5%), which reflect adjusted unit prices of $131,784 and $131,782. A similar subject value is suggested. Accordingly, the estimated unit value for the subject is $132,000. Applied to the subject’s 776 units, this results in a total value estimate of $102,432,000, rounded to $102,400,000.

Value via the Sales Comparison Approach $102,400,000

Fox Run Apartments	January 19, 2007
Plainsboro, New Jersey	Page 35

RECONCILIATION

Cost Approach		N/A
Income Capitalization Approach	$	102,300,000
Sales Comparison Approach	$	102,400,000

Income Capitalization and Sales Comparison Approaches to value were employed in the appraisal of the subject property. Buyers and sellers rarely rely on the Cost Approach to price commercial real estate. Furthermore, the age of the improvements and subjectivity involved in estimating substantial degrees of physical deterioration reduces the reliability of this approach. As such, a Cost Approach was not employed.

The value derived from the Income Capitalization Approach is well documented and market oriented. Sufficient sales data was available from the local and regional markets in order to develop a Sales Comparison Approach. The value derived through use of the Sales Comparison Approach supports the value concluded for the property via the Income Approach. Due to the income producing nature of the subject property, the results of the Income Capitalization Approach are emphasized.

FINAL ESTIMATE OF VALUE: $102,300,000

ADDENDA

SUBJECT PHOTOGRAPHS

Plainsboro Road – Northwesterly View

Plainsboro Road – Southeasterly View

SUBJECT PHOTOGRAPHS

Fox Run Drive – Southwesterly View

Typical Building

SUBJECT PHOTOGRAPHS

Typical Building

View of Pond from Subject Property

SUBJECT PHOTOGRAPHS

Pool

Tennis Courts

SUBJECT PHOTOGRAPHS

Typical Kitchen

Typical Living Room

SUBJECT PHOTOGRAPHS

Typical Bathroom

AERIAL PHOTOGRAPH

John J. DeFoe, MAI

John is the manager of the New Jersey office of KTR Valuation & Consulting Services, LLC. His responsibilities include completion of appraisal and consulting assignments, staff supervision, appraisal review, and client development.

Since beginning his real estate career in 1988, John has appraised and analyzed all types of commercial real estate throughout the United States, including shopping centers, industrial properties, office buildings, apartments, and vacant land. Assignments have been performed for a variety of clients, including banks, mortgage conduits, insurance companies, government agencies, attorneys, and property owners. From 1998 through 2002, John managed KTR’s Los Angeles office. Prior to joining KTR, he was employed by several New York regional appraisal firms.

John received a Master of Science degree in Real Estate (concentration in Valuation and Analysis) from New York University in 1995 and a Bachelor of Arts degree in Economics (concentration in Finance) from Rutgers University in 1988. He has attended numerous courses and seminars offered by the Appraisal Institute.

John is a member of the Appraisal Institute and is a Certified General Real Estate Appraiser in the State of New Jersey.