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

Riverside Park Associates Limited Partnership

(Name of Subject Company (Issuer))

AIMCO Properties, L.P.
Apartment Investment and Management Company
AIMCO-GP, Inc.
AIMCO/Riverside Park Associates GP, LLC

(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 Number 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
$11,764,091	$361.16

* For purposes of calculating the fee only. This amount assumes the purchase of 182.59 units of limited partnership interest of the subject partnership for $64,429 per unit. Based on the current fee rate of $30.70 per million, the fee is $361.16.

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

þ    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

TABLE OF CONTENTS

Offer to Purchase

Letter of Transmittal and Related Instructions

Letter

Appraisal

 Offer to Purchase

 Letter of Transmittal and Related Instructions

 Letter to the Limited Partners

 Appraisal

 Appraisal

SCHEDULE TO

     This Tender Offer Statement and Rule 13e-3 Transaction 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 Riverside Park Associates Limited Partnership, a Delaware limited partnership (the “Partnership”), at a price of $64,429 per unit in cash, subject to the conditions set forth in the Offer to Purchase dated October 1, 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 7. Certain Information Concerning Your Partnership” in the Offer to Purchase is incorporated herein by reference. The Partnership’s principal executive offices are located at 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 Riverside Park Associates Limited Partnership, of which 567.79 units were issued and outstanding as of December 31, 2006.

     (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 AIMCO/Riverside Park Associates GP, LLC, a Delaware limited liability company (“Riverside Park GP”). Aimco-GP is the general partner of Aimco OP and a wholly owned subsidiary of Aimco. Riverside Park GP is the managing 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 Riverside Park GP 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 Riverside Park GP 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 6. 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 Riverside Park GP nor, to the best of their knowledge, any of the persons listed in Annex I to the Offer to Purchase (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining further violations of or prohibiting activities subject to federal or state securities laws or finding any violation with respect to such laws.

ITEM 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.

     (a) and (b) The information set forth under “Special Factors – Valuation of Units – Prior Tender Offers and Private Purchases,” “– Purpose, Alternatives and Reasons for the Offer” and “– 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 “Special Factors – Effects of the Offer,” “– Purpose, Alternatives and Reasons for the Offer” and “– Future Plans and Proposals” 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 9. Source of Funds” and “– Section 13. 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 7. 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 12. 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 October 1, 2007.
(a)(2)	Letter of Transmittal and related Instructions.
(a)(3)	Letter from Aimco OP to the Limited Partners of Riverside Park Associates Limited Partnership.
(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 Riverside Park Apartments, effective October 24, 2005, prepared by KTR Newmark Real Estate Services LLC – New York, NY.
(c)(2)	Appraisal of Riverside Park Apartments, effective May 25, 2006, prepared by Robert D. Wright, MAI – Springfield, PA.
(d)	Not applicable.
(g)	None.
(h)	None.

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

     SCHEDULE 13E-3, ITEM 2. SUBJECT COMPANY INFORMATION.

     (d) The information set forth under “The Offer – Section 7. Certain Information Concerning Your Partnership – Distributions” in the Offer to Purchase is incorporated herein by reference.

     (e) Not applicable.

     (f) The information set forth under “Special Factors – Valuation of Units – Prior Tender Offers and Private Purchases” in the Offer to Purchase is incorporated herein by reference.

     SCHEDULE 13E-3, ITEM 4. TERMS OF THE TRANSACTION.

     (c) The information set forth under “Special Factors – Purpose, Alternatives and Reasons for the Offer” in the Offer to Purchase is incorporated herein by reference.

     (d)-(e) The information set forth under “The Offer – Section 10. Dissenters’ Rights” in the Offer to Purchase is incorporated herein by reference.

     (f) Not applicable.

     SCHEDULE 13E-3, ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

     (c) The information set forth under “Special Factors – Purpose, Alternatives and Reasons for the Offer” in the Offer to Purchase is incorporated herein by reference.

     (e) Not applicable.

     SCHEDULE 13E-3, ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

     (b) The information set forth under “Special Factors – Future Plans and Proposals” in the Offer to Purchase is incorporated herein by reference.

     (c)(8) The information set forth under “Special Factors – Effects of the Offer” in the Offer to Purchase is incorporated herein by reference

     SCHEDULE 13E-3, ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS.

     (a) The information set forth under “Special Factors – Purpose, Alternatives and Reasons for the Offer – General” in the Offer to Purchase is incorporated herein by reference.

     (b) The information set forth under “Special Factors – Purpose, Alternatives and Reasons for the Offer – Alternatives” in the Offer to Purchase is incorporated herein by reference.

     (c) The information set forth under “Special Factors – Purpose, Alternatives and Reasons for the Offer” in the Offer to Purchase is incorporated herein by reference.

     (d) The information set forth under “Special Factors – Material Federal Income Tax Matters” and “– Effects of the Offer” in the Offer to Purchase is incorporated herein by reference.

     SCHEDULE 13E-3, ITEM 8. FAIRNESS OF THE TRANSACTION.

     (a)-(f) The information set forth under “Special Factors – Fairness of the Offer” in the Offer to Purchase is incorporated herein by reference.

     SCHEDULE 13E-3, ITEM 9. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS.

     (a) The information set forth under “Special Factors – Summary of 2005 Independent Appraisal” and “– Fairness of the Offer” in the Offer to Purchase is incorporated herein by reference.

     (b) The information set forth under “Special Factors – Summary of 2005 Independent Appraisal” in the Offer to Purchase is incorporated herein by reference.

     (c) The information set forth under “Special Factors – Summary of 2005 Independent Appraisal” in the Offer to Purchase is incorporated herein by reference.

     SCHEDULE 13E-3, ITEM 10. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

     (c) The information set forth under “The Offer – Section 13. Fees and Expenses” in the Offer to Purchase is incorporated herein by reference.

     SCHEDULE 13E-3, ITEM 12. THE SOLICITATION OR RECOMMENDATION.

     (d)-(e) The information set forth under “Special Factors – Fairness of the Offer” in the Offer to Purchase is incorporated herein by reference.

     SCHEDULE 13E-3, ITEM 13. FINANCIAL STATEMENTS.

     The information set forth under “The Offer – Section 7. Certain Information Concerning Your Partnership” in the Offer to Purchase and Item 7 of Part II of the Partnership’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006 and Item 1 of Part I of the Partnership’s Quarterly Report on Form 10-QSB for the quarter ended July 30, 2007 are incorporated herein by reference.

     SCHEDULE 13E-3, ITEM 14. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

     (b) Not applicable.

     SCHEDULE 13E-3, ITEM 15. ADDITIONAL INFORMATION.

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

     SCHEDULE 13E-3, ITEM 16. EXHIBITS.

     (f) Not applicable.

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: October 1, 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
AIMCO/RIVERSIDE PARK ASSOCIATES GP, LLC
By: AIMCO PROPERTIES, L.P.
	By:	AIMCO-GP, INC.
		Its General Partner
By:	/s/ Martha L. Long
	Martha L. Long
	Senior Vice President

EXHIBIT INDEX

Exhibit No.	Description
(a)(1)	Offer to Purchase dated October 1, 2007.
(a)(2)	Letter of Transmittal and related Instructions.
(a)(3)	Letter from Aimco OP to the Limited Partners of Riverside Park Associates Limited Partnership.
(c)(1)	Appraisal of Riverside Park Apartments, effective October 24, 2005, prepared by KTR Newmark Real Estate Services LLC – New York, NY.
(c)(2)	Appraisal of Riverside Park Apartments, effective May 25, 2006, prepared by Robert D. Wright, MAI – Springfield, PA.

EX-99.(A)(1)

OFFER TO PURCHASE

AIMCO Properties, L.P.

is offering to purchase any and all limited partnership units in

Riverside Park Associates Limited Partnership

for $64,429 per unit in CASH

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

You will not pay any partnership transfer fees if you tender your 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 made or declared by your partnership after the date we commenced our offer and prior to the expiration of our offer.

OUR OFFER AND YOUR WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON OCTOBER 29, 2007, UNLESS WE EXTEND THE DEADLINE.

The general partner of your partnership 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 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 “Risk Factors” beginning on page 22 of this Offer to Purchase for a description of risk factors that you should consider in connection with our offer, including the following:

•  Upon completion of this offer, your partnership will terminate the registration of its limited partnership units under the Securities Exchange Act of 1934 and will no longer file reports with the Securities and Exchange Commission. As a result, it may become more difficult for you to obtain information about the partnership, its results of operations and financial condition.

•  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 the fair market value for your units.

•  Our offer price does not ascribe any value to potential future improvements in the fair market value or operating performance of your partnership’s property, including any prospective increase in value or property income that may result from the redevelopment of Riverside Park Apartments. Our offer price might be higher if it took into account any potential improvements in the fair market value or property income.

•  Our offer price is based on our internal valuation of the gross property value of your partnership’s property. However, a 2006 appraisal indicates a higher property value than our valuation and, accordingly, a higher value per unit. For a more detailed description of our valuation process, see “Special Factors — Valuation of Units.”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of this transaction, passed upon the merits of this transaction, or passed upon the adequacy or accuracy of the disclosure in this Offer to Purchase. Any representation to the contrary is a criminal offense.

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) 217-9608.

•  Our offer price is not based on a third-party valuation and was not determined through any arms-length negotiations. Other persons might ascribe a value to your limited 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.

•  Holding your units may result in greater future value. If your partnership’s property were sold in the future and the net proceeds from the sale were distributed to the limited partners, the amount of such distributions per unit might exceed our current offer price.

•  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.

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

•  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.

•  If we do not acquire all of the outstanding units in your partnership, 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.

•  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 property owned by your partnership.

•  We and our affiliates own a majority of the outstanding units of your partnership. As a result, we and our affiliates control the voting decisions with respect to your partnership including, but not limited to, the removal of a general partner, most amendments to the partnership agreement and the sale of all or substantially all of your partnership’s assets.

•  The general partner makes no recommendation as to whether you should tender your units because each limited partner’s circumstances may differ from those of other limited partners.

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:
1200 Wall Street, 3rd Floor	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) 217-9608

October 1, 2007

TABLE OF CONTENTS

	Page
Summary Term Sheet		1
Special Factors		3
Purpose, Alternatives and Reasons for the Offer		3
Effects of the Offer		4
Material Federal Income Tax Matters		6
Valuation of Units		8
Summary of 2006 Independent Appraisal		10
Summary of 2005 Independent Appraisal		13
Fairness of the Offer		16
Conflicts of Interest and Transactions with Affiliates		18
Future Plans and Proposals		20
Risk Factors		22
There will be a reduction of available information about your partnership as a result of this offer		22
Our offer price is based on our internal valuation of the gross property value of your partnership’s property. However, a 2006 appraisal indicates a higher property value and, accordingly, a higher value per unit.		22
Our offer price may not represent the price you could obtain for your units in an open market		22
Our offer price does not reflect future prospects		22
Our offer price was determined without any arms-length negotiations, which might result in a higher value for your partnership units.		23
Our offer price for your units may be less than the liquidation value attributable to your units		23
Continuation of the partnership; no time frame regarding sale of property		23
Holding your units may result in greater future value		23
Your partnership has a significant balloon payment due on its mortgage debt		24
The general partner faces conflicts of interest with respect to this offer		24
Your general partner is not making a recommendation regarding this offer		24
Your general partner faces conflicts of interest relating to management fees		24
If we do not acquire all of the outstanding units in this offer, we may make a future offer at a higher price		24
Your U.S. federal tax liability resulting from a sale of your units could exceed our offer price		24
If you tender your units in this offer, you will no longer be entitled to distributions from your partnership		25
You could recognize gain in the event of a future reduction in your partnership’s liabilities		25
We could delay acceptance of, and payment for, your units		25
The Offer		25
1. Terms of the Offer; Expiration Date		25
2. Acceptance for Payment and Payment for Units		26
3. Procedure for Tendering Units		26
4. Withdrawal Rights		29
5. Extension of Tender Offer Period; Termination; Amendment; No Subsequent Offering Period		29
6. Information Concerning Us and Certain of Our Affiliates		30
7. Certain Information Concerning Your Partnership		31
8. Voting Power		34
9. Source of Funds		34
10. Dissenters’ Rights		35
11. Conditions to the Offer		35
12. Certain Legal Matters		36
13. Fees and Expenses		37
ANNEX I — OFFICERS AND DIRECTORS		I-1

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 AIMCO/Riverside Park Associates GP, LLC, a Delaware limited liability company, the general partner of your partnership, Riverside Park Associates Limited Partnership. The general partner of the Aimco Operating Partnership is AIMCO GP, Inc., a Maryland corporation (“Aimco-GP”), which is a wholly owned subsidiary of Apartment Investment and Management Company, a Maryland corporation (“Aimco”). Aimco, Aimco-GP, the Aimco Operating Partnership, the general partner and the partnership are referred to herein, collectively, as the “Aimco Entities.”

•  The Offer.  Upon the terms and subject to the conditions set forth in this Offer to Purchase, we are offering to acquire any and all of the limited partnership units of Riverside Park Associates Limited Partnership, your partnership, for $64,429 per unit in cash. See “The Offer — Section 1. Terms of the Offer; Expiration Date.”

•  Termination of Registration.  On August 29, 2001, we commenced an offer to purchase any and all limited partnership units in your partnership. At the time of the commencement of the offer, there were more than 300 unitholders. Rule 13e-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires the filing of a transaction statement with the Securities and Exchange Commission (the “SEC”) in connection with an offer that has a purpose or reasonable likelihood of causing securities registered under the Exchange Act to be held of record by fewer than 300 persons. If there are fewer than 300 holders of record of any class of registered securities, SEC rules permit the termination of registration and, accordingly, the cessation of the obligation to file periodic reports with the SEC under the Exchange Act. Rule 13e-3 is intended to provide investors with additional information in connection with a transaction that might result in a termination of such registration. In our August 2001 offer to purchase, we indicated that if the number of units tendered in response to the offer would otherwise result in there being fewer than 320 unitholders, we would prorate our purchases and acquire only 99% of the units tendered by each person. On this basis, we did not file a Rule 13e-3 transaction statement with the SEC for that offer. However, when the offer was completed, we inadvertently failed to implement the 99% proration, which resulted in there being less than 300 holders of limited partnership units. As a result of our failure to implement the 99% proration, our August 2001 offer violated Rule 13e-3. Upon subsequently becoming aware of the mistake, the managing general partner determined that the partnership should not terminate its registration under the Exchange Act, and would continue to file periodic reports with the SEC until such time, if any, as another transaction was effected that complied with the requirements of Rule 13e-3. In connection with this offer, we have filed a Rule 13e-3 transaction statement with the SEC, and the partnership will terminate registration after this offer is completed and will cease filing periodic reports with the SEC. As a result, it may become more difficult for you to obtain information about your partnership, its results of operations and financial condition. See “Special Factors — Purpose, Alternatives and Reasons for the Offer,” “— Effects of the Offer” and “— Future Plans and Proposals.” If the offer is not consummated for any reason, including any of the conditions described in “The Offer — Section 11. Conditions to the Offer,” the partnership will not terminate its registration.

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

•  your partnership’s property income for the 12 months ended June 30, 2007, net of an allowance for capital replacements;

•  our estimate of an appropriate capitalization rate for such property income;

•  the location, condition and debt structure of your partnership’s property;

•  the current economic conditions in the local market in which the property is located;

•  our estimate of the fees and expenses expected to be incurred by your partnership if its property is sold; and

•  your partnership’s other assets and liabilities.

•  Fairness of the Offer.  Although the Aimco Entities have interests that may conflict with those of the partnership’s unaffiliated limited partners, each of the Aimco Entities believes that the offer price and the offer are fair to the

1

unaffiliated limited partners of your partnership. This determination is based on the information and the factors set forth under “Special Factors — Fairness of the Offer.”

•  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 “Special Factors — Fairness of the Offer.”

•  Who We Are.  We are AIMCO Properties, L.P., the operating partnership of Aimco, a New York Stock Exchange-listed company. We and our affiliates currently own 383.41 units, or 67.74% of the total outstanding units of your partnership. See “The Offer — Section 6. Information Concerning Us and Certain of Our Affiliates.”

•  Conflicts of Interest.  OP Property Management, LLC (which is our affiliate) receives fees for managing your partnership’s property, and the general partner of your partnership (which is 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 liquidating the partnership and terminating these fees. See “Special Factors — Conflicts of Interest and Transactions with Affiliates” and “The Offer — Section 7. Certain Information Concerning Your Partnership.”

•  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 “Special Factors — Material Federal Income Tax Matters.”

•  Expiration Date.  Our offer expires on October 29, 2007, unless extended, and you can tender your units until our offer expires. See “The Offer — Section 1. Terms of the Offer; Expiration Date.”

•  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. 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 November 29, 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.”

•  Availability of Funds.  We intend to pay the purchase price for any units tendered from our existing cash balances or borrowings under our line of credit. See “The Offer — Section 9. 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 and the absence of certain changes in the financial markets. See “The Offer — Section 11. Conditions to the Offer.”

•  Remaining as a Limited Partner.  If you do not tender all of your units, you will remain a limited partner in your partnership. Consummation of the offer will not affect the operations, business or financial position of your partnership. However, it is expected that, after this offer, the partnership will terminate registration under the Exchange Act and will cease to file periodic reports with the SEC. As a result, it may become more difficult for you to obtain information about the partnership, its results of operations and financial condition. See “Special Factors — Effects of the Offer.”

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•  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.

SPECIAL FACTORS

In reviewing this offer and before deciding whether or not to tender any of your units, you should consider carefully the information discussed in this Special Factors section of this Offer to Purchase.

Purpose, Alternatives and Reasons for the Offer

Purpose.  We are in the business of acquiring direct and indirect interests in apartment properties such as the property owned by your partnership. Our purpose in undertaking the offer at this time is to increase our ownership interest in your partnership.

Alternatives.  Before deciding to proceed with this offer, the Aimco Entities considered alternative transactions that would result in the Aimco Operating Partnership acquiring an increased ownership in the partnership. The following is a brief discussion of the alternatives the Aimco Entities considered:

Merger.  The Aimco Entities considered a merger of the partnership with a wholly owned subsidiary of the Aimco Operating Partnership in which unaffiliated limited partners would receive a cash payment, but rejected this alternative because:

•  the merger would not allow individual limited partners to decide whether or not they wanted to participate; and

•  the merger would not be on an arms-length basis and would therefore create a risk that the managing general partner would be subject to claims by limited partners that it had breached its fiduciary duties to the limited partners by authorizing a merger on terms that were not fair to limited partners.

Exchange Offer.  The Aimco Entities considered an offer to exchange units in your partnership for units of limited partnership interest in the Aimco Operating Partnership, but rejected this alternative because:

•  an exchange offer would be more expensive and take longer than a cash offer; and

•  our historical experience has been that when we have offered limited partners of other partnerships an opportunity to receive cash or units of limited partnership interest in the Aimco Operating Partnership, the limited partners who tendered usually preferred the cash option.

Reasons.  We have decided to make the offer at this time because we think interests in the partnership will be a good investment. We believe that the pending redevelopment of Riverside Park Apartments is likely to result in improvements in operating income and an increase in value of the property, and we would like to increase our proportionate benefit from those improvements.

The offer is being made in compliance with the filing, dissemination and disclosure requirements of Rule 13e-3 under the Exchange Act. Rule 13e-3 under the Exchange Act requires the filing of a transaction statement with the SEC in connection with an offer that has a purpose or reasonable likelihood of causing securities registered under the Exchange Act to be held of record by fewer than 300 persons. If there are fewer than 300 holders of record of any class of registered securities, SEC rules permit the termination of registration and, accordingly, the cessation of the obligation to file periodic reports with the SEC under the Exchange Act. Rule 13e-3 is intended to provide investors with additional information in connection with a transaction that might result in a termination of such registration. On August 29, 2001, we commenced an offer to purchase any and all limited partnership units in your partnership. At the time of the commencement of the offer, there were more than 300 unitholders. In the August 2001 offer to purchase, we indicated that if the number of units tendered in response to the offer would otherwise result in there being fewer than 320 unitholders, we would prorate our purchases and acquire only 99% of the units tendered by each person. On this basis, we did not file a Rule 13e-3 transaction statement with the SEC for that offer. However, when the offer was completed, we inadvertently failed to implement the 99% proration, which resulted in there being less than 300 holders of

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limited partnership units. As a result of our failure to implement the 99% proration, our August 2001 offer violated Rule 13e-3. Upon subsequently becoming aware of the mistake, we determined that the partnership should not terminate its registration under the Exchange Act, and would continue to file periodic reports with the SEC until such time, if any, as another transaction was effected that complied with the requirements of Rule 13e-3. In connection with this offer, we have filed a Rule 13e-3 transaction statement with the SEC.

Effects of the Offer

Expected Benefits of the Offer to Unaffiliated Limited Partners.  The Aimco Entities believe that the offer has the following principal advantages to the unaffiliated limited partners:

Liquidity.  There is no established trading market for the limited partnership units, and the offer provides liquidity for tendering limited partners.

Option to Retain Units.  The offer allows each limited partner the opportunity to tender any or all of his or her units, or to retain all of their units. Limited Partners who retain their units will participate in future distributions from the partnership, which are expected to increase as a result of the pending redevelopment, as well as future increases in property value.

Elimination of Costs Associated with SEC Filing Requirements.   The partnership will terminate registration after this offer is completed, and will cease filing periodic reports with the SEC. As a result, the partnership will no longer incur costs associated with preparing, auditing and filing these reports. We estimate these expenses to be approximately $23,000 per year. This represents approximately 4.00% of the partnership’s general and administrative expenses and 0.18% of the partnership’s total expenses (based on 2006 expenses of approximately $565,000 and $13,091,000, respectively).

Expected Benefits of the Offer to the Partnership.  The Aimco Entities believe that the offer has the following principal advantages to your partnership:

Elimination of Costs Associated with SEC Filing Requirements.   The partnership will terminate registration after this offer is completed, and will cease filing periodic reports with the SEC. As a result, the partnership will no longer incur costs associated with preparing, auditing and filing these reports. We estimate these expenses to be approximately $23,000 per year. This represents approximately 4.00% of the partnership’s general and administrative expenses and 0.18% of the partnership’s total expenses (based on 2006 expenses of approximately $565,000 and $13,091,000, respectively).

Expected Benefits of the Offer to the Aimco Entities.  The Aimco Entities believe that the offer has the following principal advantages to the Aimco Entities (excluding your partnership):

Increased Interest in Your Partnership’s Net Income.  If we acquire all of the units that we are seeking in the offer, our interest in your partnership’s net income (which was a net gain of $363,000 for the six months ended June 30, 2007) and net book value (($21,785,000) as of June 30, 2007) will increase to 100%. Aimco, through its wholly owned subsidiaries, Aimco-GP and AIMCO-LP, Inc., holds approximately a 91% interest in the Aimco Operating Partnership as of June 30, 2007. As a result, the Aimco Operating Partnership will receive a greater proportionate benefit from any future increase in property income, as well as appreciation of the property, after consummation of the offer.

Increased Participation in Future Distributions.  If we acquire units in the offer, we will increase our proportionate participation in any subsequent distributions to limited partners.

Expected Detriments of the Offer to Unaffiliated Limited Partners.  The Aimco Entities believe that the offer has the following principal detriments to the unaffiliated limited partners:

No Separate Representation of Limited Partners.  The general partner is our subsidiary. In structuring the offer and the consideration, no one separately represented the interests of the limited partners and the offer price was determined without an arms-length negotiation. Although the general partner has a fiduciary duty to the limited partners, it also has responsibilities to its sole member, which is an affiliate of Aimco, that could conflict with the interests of the limited partners. The general partner did not appoint, nor did we ask it to appoint, a party to represent only the interests of the limited partners. Our offer price could be higher if it were subject to independent negotiations.

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Adverse Effect on Marketability.  If a substantial number of units are purchased pursuant to the offer, the result will be a reduction in the number of limited partners in your partnership. A reduction in the number of securityholders might result in a reduction in the liquidity and volume of activity in the trading market for the partnership units.

Termination of SEC Registration.  The units are currently 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 SEC and to comply with the SEC’s proxy rules. Upon consummation of this offer, your partnership will terminate the registration of its limited partnership units under Section 12(g) of the Exchange Act. Upon such termination of registration, your partnership will no longer file reports with the SEC, such as annual reports on Form 10-KSB containing annual audited financial statements and quarterly reports on Form 10-QSB containing unaudited quarterly financial statements. Additionally, your partnership will not be required to provide current reports on Form 8-K describing certain material events. In addition, it will no longer be subject to certain provisions of the Sarbanes-Oxley Act of 2002 and the liability provisions of the Exchange Act. As a result, you regularly will have access only to the limited information that your partnership’s agreement of limited partnership requires your managing general partner (which is our subsidiary) to provide to unitholders each year, which consists primarily of tax information. In particular, you will continue to receive a Schedule K-1 as well as audited financial statements with respect to your partnership each year. A Schedule K-1 is an information statement that contains tax information for the fiscal year of your partnership, such as your allocation of income, deductions, credits, gains and losses of your partnership for federal income tax purposes. In comparison, the periodic reports filed by your partnership under the Exchange Act contain your partnership’s annual and quarterly financial statements prepared in accordance with generally accepted accounting principles. These periodic reports filed under the Exchange Act also include information regarding your partnership’s business and property and a discussion regarding your partnership’s financial condition and results of operations. The lack of filing periodic reports could affect the already limited secondary market which currently exists for units in your partnership and may result in others not tendering for such units.

Reduce Participation in Future Distributions.  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 property owned by your partnership. Our offer price does not ascribe any value to potential future improvements in the fair market value or operating performance of your partnership’s property that may result from the proposed redevelopment of Riverside Park Apartments.

Taxable Gain to Limited Partners.  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 that 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.

Expected Detriments of the Offer to the Partnership.  The Aimco Entities believe that the offer has the following principal detriments to your partnership:

No Separate Representation of Limited Partners.  The general partner is our subsidiary. In structuring the offer and the consideration, no one separately represented the interests of the limited partners and the offer price was determined without an arms-length negotiation. Although the general partner has a fiduciary duty to the limited partners, it also has responsibilities to its sole member, which is an affiliate of Aimco, that could conflict with the interests of the limited partners. The general partner did not appoint, nor did we ask it to appoint, a party to represent only the interests of the limited partners. The offer price could be higher if it were subject to independent negotiations.

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Expected Detriments of the Offer to the Aimco Entities.  The Aimco Entities believe that the offer has the following principal detriments to the Aimco Entities (excluding your partnership):

Increased Participation in Any Future Losses.  If we acquire all of the units that we are seeking in the offer, as the sole limited partner of the partnership, the Aimco Operating Partnership will bear the burden of all future losses and decreases in value of Riverside Park Apartments.

Increased Burden of Property Management Fees.  If we acquire all of the units that we are seeking in the offer, an affiliate of the Aimco Operating Partnership will continue to receive a property management fee on Riverside Park Apartments, but such fee will be borne completely by the Aimco Operating Partnership and will no longer be shared with the limited partners.

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 financial statements of your partnership as a result of the offer.

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.

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.

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),

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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 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 paying 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.

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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.

Tax Consequences to the General Partner of Your Partnership and its Affiliates, including the Aimco Operating Partnership.  The sale of your units pursuant to this offer will not be a taxable transaction for the general partner of your partnership or its affiliates, including the Aimco Operating Partnership. Consequently, the general partner of your partnership and its affiliates will not recognize gain or loss in connection with this offer.

Valuation of Units

Determination of Offer Price.  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 liquidation of your partnership’s property. We determined our offer price by estimating the net equity value of your partnership based on our valuation of your partnership’s property using the direct capitalization method. Although this method is a widely accepted way of valuing real estate, there are a number of other methods available to value real estate, each of which may result in different valuations of a property. The direct capitalization method involves applying a capitalization rate to property income. A capitalization rate is a percentage commonly applied to property income by purchasers of real estate to determine the present value of income-producing property. The lower the capitalization rate, the higher the value produced, and the higher the capitalization rate, the lower the value produced. We used the capitalization rate provided by Property & Portfolio Research (“PPR”), an independent real estate research and investment consulting firm, as of June 30, 2007 for the northern Virginia market. This capitalization rate was 4.92%.

Property income is the difference between the revenues from the property and related costs and expenses, excluding income derived from sources other than regular activities and before income deductions. Income deductions include interest, income taxes, prior-year adjustments, charges to reserves, write-offs of intangibles, adjustments arising from major changes in accounting methods and other material and nonrecurring items. In this respect, property income differs from net income disclosed in the partnership’s financial statements, which does not exclude these income sources and deductions.

We determined our offer price as follows:

•  First, we estimated the gross value of your partnership’s property using the direct capitalization method. For the 12 month period ended June 30, 2007, total property income was approximately $7,300,000. We deducted from this amount a capital replacement reserve of $350 per apartment unit (approximately $430,000) to arrive at net property income of approximately $6,870,000. We then divided net property income by the capitalization rate of 4.92% to derive an estimated gross property value of approximately $139,600,000, which we rounded up to $140,000,000.

•  Second, we calculated the net equity value of your partnership by adding to the estimated gross property value the value of the non-real estate assets of your partnership and deducting its liabilities, including mortgage debt, debt prepayment penalties, debt owed by your partnership to the general partner or its affiliates, accounts payable and accrued expenses and certain other costs, including a contingency reserve that would be set aside for any expenses attributable to the property that are payable subsequent to the sale of the property.

•  Finally, we allocated 99% of this net equity value to limited partners, which is the percentage of net proceeds that would be distributed to limited partners in the event of a liquidation of your partnership under the partnership agreement, and divided this by the number of outstanding limited partnership units to determine a net equity value per unit.

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The net equity value per unit determined in this manner, as indicated below, results in an estimated net equity value per unit of $64,429.

Estimated gross valuation of partnership property	$	140,000,000
Plus: Cash and cash equivalents		14,214
Plus: Other partnership assets		868,940
Less: Mortgage debt, including accrued interest		(80,950,427	)
Less: Debt prepayment penalty		(13,178,752	)
Less: Loans from Affiliates of the general partner		(4,559,258	)
Less: Payables to Affiliates of the general partner		(27,735	)
Less: Accounts payable and accrued expenses		(2,044,291	)
Less: Other liabilities		(487,678	)
Less: Contingency Reserve		(2,800,000	)
Estimated net equity value of your partnership	$	36,835,013
Percentage of net equity value allocated to holders of units		99	%
Estimated net equity value of units	$	36,466,663
Total number of units		566
Net equity value per unit	$	64,429

Comparison of Offer Price to Alternative Consideration.  To assist holders of units in evaluating the offer, your general partner, which is our affiliate, has compared the offer price against: (a) other cash tender offer prices and private purchase prices since January 1, 2004 that the general partner has knowledge of, and (b) prices at which the units have been sold on the secondary market that the general partner has knowledge of. The results of this comparison are summarized in the chart below.

Comparison Table	Per Unit
Cash offer price	$	64,429
Alternatives
Highest cash tender offer or private purchase price	$	22,220	(1)
Highest price on secondary market	$	67,523	(2)

(1)	Highest prior tender offer or private purchase since January 1, 2004. See discussion below regarding private purchase of 0.5 units for a purchase price of $22,220.
(2)	Highest sale price on the secondary market since January 1, 2004, as reported by Direct Investment Spectrum and American Partnership Board.

Prior Tender Offers and Private Purchases.  We have not conducted any prior tender offers for units in your partnership in the past three years. On March 11, 2005, we purchased 0.5 units in your partnership for a purchase price of $22,220. We have not purchased any additional units in your partnership in the past three years. 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, we are not aware of any tender offers by unaffiliated third parties that have been commenced or completed in the past three years.

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 sell his or her units 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.

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Set forth below are the high and low secondary sales prices of units during the year ended December 31, 2007 (through May 31), the year ended December 31, 2006 and the year ended December 31, 2005, 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 often are reduced by commissions and other secondary market transaction costs. 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 Ended December 31, 2007 (through May 31):	$	56,000	$	54,000
Year Ended December 31, 2006:	$	67,523	$	49,000
Year Ended December 31, 2005:	$	55,000	$	52,000

No high and low sales prices of units during the year ended December 31, 2004 were reported by either Direct Investments Spectrum or the American Partnership Board, which is the only other independent, third-party source from which we currently have information regarding secondary sales, nor did the American Partnership Board report such sales prices during the years ended December 31, 2007 (through August 31), December 31, 2006 and 2005. Other sources may contain prices for the units that equal or exceed the sales prices reported by Direct Investments Spectrum and The American Partnership Board.

Summary of 2006 Independent Appraisal

Set forth below is a summary of the 2006 appraisal conducted by Robert D. Wright, MAI (“Wright”). The summary below includes a description of the procedures followed by Wright, his 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 Wright in appraising the value of Riverside Park Apartments. Wright concluded that the market value of the fee simple estate of Riverside Park Apartments, as of May 25, 2006, was $149,000,000. This report is provided for disclosure purposes of a historic event and does not represent the current conditions at the property nor current market value.

Selection and Qualifications of Independent Appraiser.  Wright was hired by Reilly Mortgage Group, Inc. (the “Lender”), in connection with the refinancing of mortgages encumbering your partnership’s property, to estimate the market value of the fee simple estate of Riverside Park Apartments as of May 25, 2006, and to prepare a real estate appraisal report presenting the data, reasoning and analyses used in the appraisal process to develop an opinion of value. Wright is a Certified General Real Estate Appraiser in the state of Virginia and has been a self-employed appraiser since 1981.

Wright performed a complete appraisal of Riverside Park Apartments. Wright has represented that his report was prepared in conformance with the Code of Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute and the Appraisal Foundation and Freddie Mac appraisal guidelines and the appraisal requirements of the Lender. Neither the assignment to make the appraisal nor the compensation for it was contingent upon the appraised value of the property. Wright’s analysis was based on an inspection of the property, a review of available operating history and consideration of local market data on or about May 25, 2006. The summary set forth below describes the material conclusions reached by Wright based on the values determined under the valuation approaches and subject to the assumptions and limitations described below.

Summary of Valuation Approaches and Methodologies Employed.  The following summary describes the material approaches and analyses employed by Wright in preparing the appraisal. Wright relied on the Income Approach to valuation and the Sales Comparison Approach.

The purpose of the Income 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

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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. Wright utilized only the direct capitalization method. Freddie Mac Appraisal Guidelines prohibit the use of discounted cash flow analysis in appraisals to be submitted to Freddie Mac.

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 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.

Valuation Under Income Approach.  Under the Income Approach, Wright performed a direct capitalization analysis to derive a value for Riverside Park Apartments, which involved (1) calculating potential gross annual income from the property; (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 Riverside Park Apartments.

Wright performed a market rent analysis for the property to derive a projected annual rental income. Market rents were estimated based on the property’s rent roll, recent leasing history, street rents and market data. Wright calculated EGI by adding apartment rental collections to other income and then making adjustments, including adjustments based on an estimated stabilized physical vacancy of 5.5% and a 1.0% collection loss. Under this analysis, Wright arrived at an EGI of $15,658,906. Once the EGI was established, operating expenses were deducted from the EGI in order to arrive at an NOI of approximately $8,940,506. Wright performed a pro forma analysis of revenue and expenses for the property to derive the subject property’s stabilized NOI. Wright relied on the subject’s historical operating statements from January 2002 through April 2006 for this estimate. Wright derived an overall capitalization rate of 6.0% based upon analysis of comparable sales, which ranged from approximately 5.4% to 7.3%, and a synthesis of mortgage interest and equity dividend rates, which ranged from approximately 5.5% to 6.15%. Using an overall capitalization rate of 6.00%, Wright determined that the direct capitalization method indicated a value of $149,000,000 (after rounding) for Riverside Park Apartments.

Valuation Under Sales Comparison Approach.  Wright compared Riverside Park Apartments with six multifamily apartment complexes with similar characteristics that were sold between March 2004 and December 2005 and located in Riverside Park’s real estate market area. Due to the variations between properties, these sales were compared to the property on the basis of sale price per unit and a gross income multiplier calculation. The unadjusted sales prices of the comparable sale property ranged from $97,030 to $176,251 per unit. Emphasizing these comparables, Wright considered a value indicator of $121,000 per unit to be appropriate. With 1,222 units at $121,000 per unit, Wright determined the market value of Riverside Park Apartments using the Sales Comparison Approach to be $147,900,000 (after rounding). Wright used a gross income multiplier of 8.9, which was based on the relationship between each property’s income potential and sale price. With the potential gross income of $16,631,175 and a gross income multiplier of 8.9, Wright determined the property’s market value using the gross income multiplier to be $148,000,000 (after rounding). Wright gave equal weight to the per unit value calculation and the gross income multiplier value calculation to arrive at a market value for Riverside Park Apartments of $147,900,000 under the Sales Comparison Approach. Wright assumed a marketing and exposure period of six to twelve months.

Reconciliation of Values and Conclusions of Appraisal.  The final step in the appraisal process was to reconcile the Sales Comparison Approach and the Income 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. Wright concluded a market value of $147,900,000 under the Sales Comparison Approach and a market value of $149,000,000 under the Income Approach. After reconciling the various factors, Wright determined a final estimate of market value of $149,000,000 for Riverside Park Apartments as of May 25, 2006 in its appraisal report dated June 28, 2006.

Assumptions, Limitations and Qualifications of Wright’s Valuation.  This appraisal was prepared for use by the Lender for mortgage underwriting purposes. Other uses of this appraisal were not intended. This appraisal does not reflect present

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conditions at the subject property nor a present valuation. In preparing the appraisal, Wright relied on the accuracy and completeness of all information supplied or otherwise made available to him. As of May 25, 2006, the date of Wright’s inspection, a substantial renovation of the property was in process. At the Lender’s request, the appraisal assumed habitable condition prior to renovation, and did not consider the cost to complete the renovation of units already gutted for rehabilitation. Additionally, the property’s actual physical vacancy rate (20.6%) was elevated as of the date of valuation since the owners had commenced lease terminations to create vacancies for the renovation. At the Lender’s request, stabilized occupancy was assumed without adjustment for rent loss during lease-up. This appraisal was completed without the benefit of current engineering and environmental site assessment reports. If subsequently completed reports revealed the need for significant immediate repairs or if significant environmentally hazardous conditions exist, this valuation would be adversely impacted. Except as set forth herein, neither we, any of our affiliates nor the partnership imposed any conditions or limitations on the scope of Wright’s investigation or the methods and procedures to be followed in preparing the appraisal. In addition to the previously stated requests by the Lender regarding assumptions of habitable condition and stabilized occupancy, Wright’s appraisal report and opinion of value were made subject to the following assumptions and limiting conditions:

•  the legal description used in the appraisal report is assumed to be correct;

•  no survey of the property was made by Wright and no responsibility is assumed in connection with such matters. Sketches in the report are included only to assist the reader in visualizing the property;

•  no responsibility is assumed for matters of a legal nature affecting title to the property nor is an opinion of title rendered. The title was assumed to be good and marketable;

•  information furnished by others is assumed to be true, correct and reliable. A reasonable effort was made to verify such information; however, Wright assumed no responsibility for its accuracy;

•  all mortgages, liens, encumbrances, leases and servitude were disregarded unless specified otherwise in the report;

•  the property was appraised as though under responsible ownership and competent management;

•  it was assumed that there were no hidden or unapparent conditions of the property, subsoil, or structures which would render it more or less valuable. No responsibility was assumed for such conditions or for engineering which may be required to discover such factors;

•  it was assumed that there was full compliance with all applicable federal, state and local environmental regulations and laws as of the date of the appraisal unless non-compliance was stated, defined and considered in the appraisal report;

•  it was assumed that all applicable zoning and use regulations and restrictions were complied with, unless a non-conformity was been stated, defined and considered in the appraisal report;

•  it was assumed that all required licenses, consents or other legislative or administrative authority from any local, state or national governmental or private entity or organization were or could be obtained or renewed for any use on which the value estimate contained in the appraisal report is based;

•  it was assumed that the utilization of the land (and improvements) was within the boundaries or property lines of the property described and that there was no encroachment or trespass unless noted within the report;

•  unless otherwise stated in the appraisal report, the existence of radon air pollution or hazardous material, which may or may not have been present on the property, was not observed by the appraiser. The appraiser was not qualified to detect such substances. The presence of substances such as asbestos, ureaformaldehyde foam insulation, or other potentially hazardous materials or environmental hazards may affect the value of the property. The value estimate was predicated on the assumption that there was no such material or condition on or in the property that would have caused a loss in value;

•  the appraiser will not be required to give testimony or appear in court because of having made this appraisal, with reference to the property in question, unless arrangements have been previously made;

•  possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event only with the proper written qualifications and only in its entirety;

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•  the distribution of the total valuation in this report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used;

•  one (or more) of the signatories of this appraisal report is a member (or candidate) of the Appraisal Institute. The bylaws and regulations of the Institute require each member and candidate to control the use and distribution of each appraisal report signed by such member or candidate. Therefore, except as hereinafter provided, the party for whom this appraisal was prepared may distribute copies of this appraisal report, in its entirety, to such third parties as may be selected by the party for whom this appraisal report was prepared; however, selected portions of this appraisal report shall not be given to third parties without the prior written consent of the signatories of this appraisal report; and

•  in the event that this appraisal contains a valuation of an estate in land that is less than the entire fee simple estate, it is noted that (i) the value reported for such estate relates to a fractional interest only in the real estate involved; and, (ii) the value of this fractional interest plus the value of all other fractional interests may or may not equal the value of the entire fee simple estate considered as a whole.

Availability of Appraisal Report.  You may obtain a full copy of Wright’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 and Rule 13e-3 Transaction Statement on Schedule TO and is available on the SEC’s site on the World Wide Web at http://www.sec.gov.

Summary of 2005 Independent Appraisal

Set forth below is a summary of the independent appraisal of Riverside Park Apartments conducted in October 2005 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 Riverside Park Apartments. KTR concluded that the market value of the leased fee simple estate of Riverside Park Apartments, as of October 24, 2005, is $122,300,000.

Selection and Qualifications of Independent Appraiser.  We hired KTR to estimate the market value of the fee simple estate of Riverside Park Apartments, free and clear of financing, as of October 24, 2005, 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 leading real estate valuation, engineering and environmental due diligence firm and employs one of the largest in-house staffs of appraisers and analysts. KTR is an affiliate of Newmark Knight Frank, a full service, global commercial real estate service provider headquartered in New York.

We paid KTR a fee of $5,514 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, in return for total fees of approximately $260,000 over the last two years. 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 Riverside Park Apartments. KTR has represented that its report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice, the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute and Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended. 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 Riverside Park 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

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described below. KTR concluded that the market value of the fee simple estate of Riverside Park Apartments, as of October 24, 2005, is $122,300,000.

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 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 Riverside Park 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 Riverside Park 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 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 Riverside Park 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 6.0% and a 1.0% collection loss. Under this analysis, KTR arrived at an EGI of $14,691,643. Once the EGI was established, operating expenses were deducted from the EGI in order to arrive at an NOI of approximately $8,256,197. 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 2002 through September 2005 for this estimate. KTR derived an overall capitalization rate of 6.75% based upon analysis of comparable sales, which ranged from approximately 6.5% to 7.0%, and the average rates for institutional and non-institutional grade properties

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applied by institutional investors and advisors to real estate pension and portfolio funds when acquiring real estate, which ranged from approximately 6.3% to 7.5%. Using an overall capitalization rate of 6.75%, KTR determined that the direct capitalization method indicated a value of $122,300,000 (after rounding) for Riverside Park Apartments.

Valuation Under Sales Comparison Approach.  KTR compared Riverside Park Apartments with five multifamily apartment complexes with similar characteristics that were sold between December 2002 and July 2005 and located in Riverside Park’s 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 Riverside Park with respect to age, condition and amenities, KTR made adjustments to the sales price per unit of each comparable property to reflect differences from Riverside Park in location, age and condition, number of units and average unit size. Based on the available data, KTR concluded a value range of $62,361 to $127,953 before adjustments. After adjustments, the sales prices per unit ranged from $81,069 to $106,445, with an average adjusted sales price of $97,042 per unit. Two of the comparables whose adjusted prices per unit were $102,362 and $102,969 were considered most similar to Riverside Park. Emphasizing these comparables, KTR considered a value indicator of $100,000 per unit to be appropriate. With 1,222 units at $100,000 per unit, KTR determined the market value of Riverside Park Apartments using the sales comparison approach to be $122,000,000 (after rounding). KTR assumed a marketing and exposure period of six to twelve months.

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 $122,000,000 under the sales comparison approach and a market value of $122,300,000 under the income capitalization approach. After reconciling the various factors, KTR determined a final estimate of market value of $122,300,000 for Riverside Park Apartments as of October 24, 2005 in its appraisal report dated November 23, 2005.

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. As of October 24, 2005, the date of KTR’s inspection, approximately 142 apartment units were in the process of being renovated and were not available for leasing. We instructed KTR to appraise Riverside Park Apartments without giving consideration to the renovation. KTR appraised the property on a stabilized basis and assumed that all 142 units that were under renovation were available for leasing and in similar condition to the property’s remaining units. 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

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•  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 and Rule 13e-3 Transaction Statement on Schedule TO and is available on the SEC’s site on the World Wide Web at http://www.sec.gov.

Fairness of the Offer

Factors in Favor of Fairness Determination.  The Aimco Entities (including the managing general partner on behalf of your partnership) believe the offer price and the structure of the transaction are fair to the unaffiliated limited partners. In support of such determination, the Aimco Entities considered the following factors and information:

•  the offer price is based on the Aimco Entities’ estimate of the net equity value of the units ($64,429);

•  each limited partner has an opportunity to make an individual decision on whether to tender his or her units (and how many to tender) or to continue to hold his or her units;

•  there is no established trading market for the limited partnership units, and the offer would provide immediate liquidity for tendering limited partners;

•  although our offer price reflects estimated prepayment penalties on mortgage debt, our offer price does not take into account other transaction costs that would ordinarily be incurred in connection with a sale of the property;

•  our offer price exceeds the most recent price at which the units sold in the secondary market ($56,000 through May 31, 2007);

•  our offer price exceeds the $44,440 per unit purchase price paid by the Aimco Operating Partnership in a negotiated purchase of 0.5 units in your limited partnership on March 11, 2005;

•  our offer price exceeds the book value per unit, which was ($35,840.99) at June 30, 2007;

•  our offer price is based on our estimate of gross property value for your partnership’s property ($140,000,000), which is higher than the gross property value determined by KTR in its 2005 appraisal ($122,300,000);

•  our offer price does not reflect any discount for minority interests; and

•  the partnership has not received any firm offers from third parties to purchase Riverside Park Apartments, or for any other extraordinary transaction during the past two years with which to compare the offer.

Factors Not in Favor of Fairness Determination.  In addition to the foregoing factors, the Aimco Entities considered the following countervailing factors:

•  our offer price does not ascribe any value to potential future improvements in the fair market value or operating performance of your partnership’s property, including any prospective increase in value or property income that may result from the redevelopment of Riverside Park Apartments; our offer price might be higher if it took into account any potential improvements in fair market value or property income;

•  in determining our offer price, we used the Aimco Entities’ estimate of the net equity value of the units, which may not represent the price you could obtain for your units in an open market;

•  our offer price is lower than the highest price at which the units have been sold in the secondary market ($67,523 in the year ended December 31, 2006);

•  our estimate of the net equity value of the units is based on our estimate of the gross property value of your partnership’s property ($140,000,000), which is lower than the value determined by Wright, an independent appraiser, in May 2006 ($149,000,000);

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•  an unaffiliated representative was not retained to act solely on behalf of unaffiliated limited partners for purposes of negotiating the terms of the offer on an independent, arms length basis, which might have resulted in a higher offer price;

•  the general partner has substantial conflicts of interest with respect to our offer resulting from the fiduciary duties it owes to the Aimco Operating Partnership to avoid paying an excessive price for the limited partnership units, and the fiduciary duties it owes to the limited partners of the partnership, who have an interest in receiving the highest price possible for tendered units;

•  the terms of the offer were not approved by any independent directors; and

•  our offer does not require the approval or consent of any unaffiliated limited partners.

The Aimco Entities are of the opinion that the internal valuation of your partnership’s property, based on the direct capitalization method, is a reasonable approximation of the going concern value and liquidation value of the property. The Aimco Operating Partnership determined its offer price based on its estimate of the proceeds that would be available for distribution to limited partners in the event of a liquidation of the partnership’s property, as further described in the section “Special Factors — Valuation of Units,” and quantified the net equity value of all units, in the event of liquidation, to be $36,466,663.00. The Aimco Entities did not consider going concern value separately from liquidation value because they do not believe that there is a distinction between going concern value and liquidation value for an interest in a limited partnership in which the only asset is an apartment property such as Riverside Park Apartments. In calculating the offer price, a net equity value per unit was estimated based on the gross property value of Riverside Park Apartments. For income-producing properties such as your partnership’s property, the sale price in the event of liquidation is expected to be equal to the going concern value of the property, which is based on its operating income. In some markets, where there is a great demand for apartments to be converted into condominiums, it is possible that sale prices for apartment properties may be higher than their operating income would justify. In these situations, the liquidation value may exceed the going concern value. Your partnership’s property is not in a market where the demand for condominium conversions has resulted in this effect. Accordingly, the general partner did not consider the two values separately.

The 2006 appraisal conducted by Wright supported a value of $149,000,000 for Riverside Park Apartments based primarily on the income capitalization approach. We valued the property at $140,000,000. There are material differences between our valuation approach and Wright’s valuation approach, including the following:

•  the 2006 appraisal was conducted without regard for the redevelopment of Riverside Park Apartments and therefore used a stabilized vacancy number rather than an actual vacancy percentage while our valuation includes data for the 12 months ended June 30, 2007, and takes account of the current effects of the redevelopment, including actual vacancy loss. Actual vacancy loss (adjusted for the effects of construction accounting) is considerably higher than the estimated stabilized figure used in the 2006 appraisal;

•  the 2006 appraisal estimated a higher expense figure to account for the “as is” condition of the property, including both repairs and maintenance and capital replacements; and

•  the 2006 appraisal used a capitalization rate of 6.0% based upon analysis of comparable sales and a synthesis of mortgage interest and equity dividend rates, while we used the capitalization rate provided by PPR (4.92%), as of June 30, 2007, for the northern Virginia market.

Procedural Fairness.  Each of the Aimco Entities has interests in the offer or has relationships that present conflicts of interest in connection with the offer and considered these conflicts of interest along with the other factors enumerated above in making its fairness determination. See “Special Factors — Conflicts of Interest and Transactions with Affiliates.” In light of these conflicts of interest with respect to the offer, the Aimco Entities took into account the absence of the following procedural safeguards: (1) an unaffiliated representative to act solely on behalf of your partnership or the unaffiliated limited partners in negotiating the terms of this offer; (2) the approval of the offer by a majority of independent directors; and (3) the approval of the offer by a majority of the limited partners unaffiliated with the Aimco Entities. The Aimco Operating Partnership is a partnership managed by a general partner rather than a board of directors. The general partner is a corporation, the board of which is comprised entirely of affiliates of the Aimco Entities. As a result, there were no unaffiliated parties available to act as, or to hire, an unaffiliated representative for the unaffiliated limited partners. Furthermore, each limited partner has an opportunity to make an individual decision whether or not to tender, and there is no coercive aspect to the offer. For some limited

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partners, liquidity may be very important, and the recognition of taxable income may not be a concern. For other limited partners, immediate liquidity may not be as desirable as deferring the recognition of taxable income.

The Aimco Entities do not believe any of the procedural safeguards were necessary with respect to determining that the offer price is fair because our offer price was determined in accordance with customary valuation methods. Despite the absence of these procedural safeguards, the Aimco Entities are of the opinion that the offer price is fair to the limited partners because:

•  our offer price is based on our internal valuation of the gross property value of your partnership’s property ($140,000,000);

•  our offer price is greater than the most recent price at which the units sold in the secondary market; and

•  this Offer to Purchase includes all information material to a limited partner’s decision whether or not to accept our offer.

Your general partner is our affiliate. We and your general partner are subsidiaries of Aimco. As a result, your general partner has a conflict of interest and makes no recommendation as to whether or not you should tender or refrain from tendering your units in this offer. While the general partner believes that the terms of our offer are fair, the general partner also believes that you must make your own decision whether or not to participate in this offer. 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 your financial position, your need or desire for liquidity, other financial opportunities available to you, and your tax position and the tax consequences to you of selling your units. 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.

None of the Aimco Entities (or any of their affiliates) have any plans or arrangements to tender any units. 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 sale of your units pursuant to this offer will not be a taxable transaction to any of the Aimco Entities. Consequently, the Aimco Entities will not recognize gain or loss 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 “Special Factors — Conflicts of Interest and Transactions with Affiliates.”

Your partnership did not receive any report, opinion or appraisal with respect to the fairness of this offer or the offer price being offered to limited partners. However, the partnership did receive the appraisal prepared by KTR, as described above.

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. 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 the other Aimco Entities), 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 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 of your partnership received total fees and reimbursements (excluding property management fees) of approximately $646,000 in 2004, $951,000 in 2005 and

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$2,522,000 in 2006. Total fees and reimbursements (excluding property management fees) for the six months ended June 30, 2007 were approximately $2,672,000. The property manager is entitled to receive four percent of gross receipts from the partnership’s property as compensation for providing property management services. The property manager received property management fees of approximately $568,000 in 2004, $530,000 in 2005 and $494,000 in 2006. Property management fees for the six months ended June 30, 2007 were approximately $227,000. 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 7. 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 the general market area 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 Aimco/Bethesda and us for the management and administration of all partnership activities. The partnership agreement provides for (i) certain payments to our affiliates for services, (ii) reimbursement of certain expenses incurred by our affiliates on behalf of the partnership and (iii) an annual partnership and investor service fee of $110,000 subject to a 6% annual increase.

We and the general partner of your partnership, which is our affiliate, are entitled to receive 4% of gross receipts from your partnership’s property as compensation for providing property management services, and received property management fees of approximately $568,000 in 2004, $530,000 in 2005 and $494,000 in 2006. Property management fees for the six months ended June 2007 were approximately $227,000. We were eligible to receive reimbursement of accountable administrative expenses amounting to approximately $489,000 in 2004, $595,000 in 2005, $1,157,000 in 2006, and 1,287,000 in the six months ended June 30, 2006. These amounts include the annual partnership and investor service fee discussed above of approximately $279,000 in 2004, $296,000 in 2005 and $314,000 in 2006. We expect the annual partnership and investor service fee to be approximately $333,000 in 2007. Also included in these amounts are fees related to construction management services for certain capital improvement expenditures (not related to the redevelopment project) provided by an affiliate of the general partner of approximately $36,000 in 2004, $10,000 in 2005, $78,000 in 2006, and $42,000 in the six months ended June 30, 2007. The construction management service fees are calculated based on a percentage of current additions to investment property. In connection with the redevelopment project, an affiliate of the general partner received a redevelopment supervision fee of $124,000 for the year ended December 31, 2005, $570,000 for the year ended December 31, 2006, and $960,000 for the six months ended June 30, 2007, calculated as 6% of the actual redevelopment costs. The total redevelopment supervision fee is estimated to be approximately $6,900,000 based on current estimated redevelopment costs.

In accordance with the partnership agreement, an affiliate of the general partner loaned the partnership approximately $287,000 in 2004, $850,000 in 2005 and $5,641,000 in 2006 to cover capital improvements (including the redevelopment of Riverside Park Apartments), property taxes and operating expenses. During the six months ended June 30, 2007, an affiliate of the general partner advanced the partnership approximately $1,024,000 to fund the redevelopment and operating expenses at Riverside Park Apartments. Interest accrues at the prime rate plus 2% (10.25% at June 30, 2007). During the year ended December 31, 2006, the partnership repaid the outstanding advances and accrued interest of approximately $7,042,000 from

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proceeds from the additional financing obtained on Riverside Park Apartments. Interest expense amounted to less than $1,000 in 2004, approximately $61,000 in 2005 and approximately $203,000 in 2006. Interest expense amounted to approximately $1,000 for the six months ended June 30, 2007. At June 30, 2007, the amount of the outstanding advances and accrued interest was approximately $1,025,000. Subsequent to June 30, 2007, an affiliate of the general partner advanced the partnership approximately $3,573,000 to fund the redevelopment and operating expenses at Riverside Park Apartments.

In connection with the additional financing obtained on your partnership’s property, the partnership paid an affiliate of the general partner approximately $300,000 in 2006 for services provided.

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 your general partner. The partnership was charged by Aimco and its affiliates approximately $156,000, $171,000, and $292,000 during the years ended December 31, 2004, 2005 and 2006, respectively, for insurance coverage and fees associated with policy claims administration. During the six months ended June 30, 2007, the partnership was charged by Aimco and its affiliates approximately $424,000 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.

Future Plans and Proposals

As described above under “Special Factors — Purpose, Alternatives 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.

Upon consummation of this offer, your partnership will terminate the registration of its limited partnership units under the Exchange Act and will no longer file reports with the SEC. As a result, it may become more difficult for you to obtain information about your partnership, its results of operations and financial condition. See “Special Factors — Effects of the Offer.”

In March 2005, the partnership began a major redevelopment project at Riverside Park Apartments intended to help it compete with other properties in its local market. The redevelopment is expected to consist of renovation and appliance upgrades to each apartment unit and the addition of a new clubhouse and fitness center. The general partner estimates that project costs will be approximately $142,000,000. Based on current redevelopment plans, the general partner expects the redevelopment to be completed in April 2011. During the construction period, certain expenses are being capitalized and depreciated over the remaining life of the property. The partnership expects to fund the redevelopment from operations, advances from us and third party debt. At the present time, there can be no assurance that the redevelopment will proceed as currently planned or that the redevelopment as currently planned will be successfully completed in the anticipated timeframe. Many factors could cause the redevelopment to be delayed or to cost the partnership more than currently anticipated. Such factors include local economic conditions, interest rates, shortages of materials or skilled labor, labor disputes, unforeseen environmental or engineering problems, work stoppages, scheduling problems, weather interference or natural disasters.

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Based on the general partner’s current estimates, if the redevelopment project is completed in the timeframe and at the cost to the partnership that the general partner anticipates, the redevelopment would result in an increase in annual reportable net operating income from approximately $8.8 million for the year ended December 31, 2006 to approximately $17.3 million following completion of the redevelopment. The general partner also estimates that completion of the redevelopment, in the anticipated timeframe and at the projected cost, would result in an increase in average annual rental rates of approximately 69%. During the course of the redevelopment, however, we will be unable to rent units as they come under construction. The general partner anticipates lost revenue of approximately $14.3 million as a result of the loss of estimated rents. These projections are estimates only, and are subject to the risks set forth above, as well as other risks that the general partner may not currently anticipate and that may be beyond its or the partnership’s control, such as changes in market rental rates or other market conditions, including the general economic climate in the local market and the competition for tenants in such market.

Additional expenditures for improvements may be incurred only if cash is available from operations, partnership reserves or advances from the general partner’s affiliates. Due to the extent of the redevelopment project planned at the property for the next several years, it is not expected that the partnership will have any distributable cash flow during the redevelopment period.

Except as set forth herein, neither we nor the general partner have any other present plans or proposals which relate to or would result in any extraordinary transaction, such as a merger, reorganization or liquidation, involving your partnership; any purchase or sale or transfer of a material amount of your partnership’s assets; any change in composition of your partnership’s senior management or personnel or their compensation; any material change in your partnership’s present capitalization, indebtedness or distribution policy; or any other material change in your partnership’s organizational structure or business. 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 7. 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.

If any of the transactions referred to above occur and financial benefits accrue to the 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 therein. Limited partners may vote on a liquidation, and we will be able to 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.

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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:

There will be a reduction of available information about your partnership as a result of this offer.

Upon consummation of this offer, your partnership will terminate the registration of its limited partnership units under the Exchange Act and will no longer file reports with the SEC, such as annual reports on Form 10-KSB containing annual audited financial statements and quarterly reports on Form 10-QSB containing unaudited quarterly financial statements. In addition, it will no longer be subject to certain provisions of the Sarbanes-Oxley Act of 2002 and the liability provisions of the Exchange Act. The lack of such filings could adversely affect the already limited secondary market which currently exists for units in your partnership and may discourage future offers to purchase your units. In such a case, you would regularly have access only to the information your partnership’s agreement of limited partnership requires your general partner (which is our affiliate) to provide each year, which consists primarily of tax information. See “Special Factors — Effects of the Offer — Expected Detriments of the Offer to Unaffiliated Limited Partners — Termination of SEC Registration” and “Special Factors — Future Plans and Proposals.”

Our offer price is based on our internal valuation of the gross property value of your partnership’s property. However, a 2006 appraisal indicates a higher property value and, accordingly, a higher value per unit.

Our offer price is based on our estimate of the net equity value per unit, which is equal to the amount that would be distributed to limited partners in the event of a hypothetical winding up of the partnership, assuming that the partnership’s property is sold at a price equal to our estimate of its gross property value. Our starting point in this process is our estimate of the gross property value for Riverside Park Apartments. The gross property value is directly comparable to the gross sale price if the property were sold. In determining gross property value, we started with the property income for your partnership from the 12 month period ended June 30, 2007 and made certain adjustments for capital expenditures. We then divided net property income by a capitalization rate of 4.92% to derive an estimated gross property value of $139,600,000, which we rounded up to $140,000,000. For a more detailed description of our valuation process and the independent appraisal, see “Special Factors — Valuation of Units.”

In 2006, in connection with refinancings of mortgages encumbering your partnership’s properties, the lender obtained an appraisal of Riverside Park Apartments which indicated an appraised value that is higher than our estimated gross property value. The lender appraisal is dated May 25, 2006, and indicates an appraised value of $149,000,000 for the Riverside Park Apartments compared to our estimate of $140,000,000. If our offer price had been based on this appraisal instead of our estimate of gross property value, our offer price per unit would be slightly higher.

Our offer price may not represent the price you could obtain for your units in an open market.

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 “Special Factors — Valuation of Units.”

Our offer price does not reflect future prospects.

Our offer price does not ascribe any value to potential future improvements in the fair market value or operating performance of your partnership’s property, including any prospective increase in value or property income that may result from the redevelopment of Riverside Park Apartments. In March 2005, the Partnership began a major redevelopment project at Riverside Park Apartments intended to make the property more competitive with other properties in its local market. The redevelopment is expected to consist of renovation and appliance upgrades to each apartment unit and the addition of a new clubhouse and fitness center. Based on current plans, the general partner expects the redevelopment to be complete in April 2011. Your general partner believes that the redevelopment, if completed, of Riverside Park Apartments will increase the net operating income at the property and will permit it to remain competitive with other rental properties in the local market. Based on current estimates, if the redevelopment project is completed in the anticipated timeframe and at the projected cost, the general partner estimates that the redevelopment would result in an increase in annual reportable net operating income from approximately $8.8 million for the year ended December 31, 2006 to approximately $17.3 million following completion of the

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redevelopment. The general partner also estimates that completion of the redevelopment would result in an increase in average annual rental rates of approximately 69%. During the course of the redevelopment, however, we will be unable to rent units as they come under construction. The general partner anticipates lost revenue of approximately $14.3 million as a result of the loss of estimated rents. Our offer price might be higher if it took into account the redevelopment or any potential improvements in the fair market value or property income. For more information regarding the redevelopment, see “Special Factors — Future Plans and Proposals” and “The Offer — Section 7. Certain Information Concerning Your Partnership — Investment Objectives and Policies; Sale or Financing of Investments.”

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 and liquidate, 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 liquidation 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.

Our offer price for your units may be less than the liquidation value attributable to your units.

The actual proceeds obtained from liquidation are highly uncertain and could be more than our estimate. Other persons could derive different estimates of the liquidation value. If your partnership were to sell its assets and liquidate, 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 liquidation of your partnership. In addition, your partnership would generally make liquidating 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 liquidating 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 liquidate 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 believes the redevelopment of Riverside Park Apartments will result in increases in future rental income from the property, and appreciation in property value. As a result, the general partner has no current intention of pursuing a sale of the property.

Holding your units may result in greater future value.

Although a liquidation 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 liquidated. Your general partner believes that the redevelopment of Riverside Park Apartments, if completed, will increase the net operating income at the property and will permit it to remain competitive with other rental properties in the local market. However, our offer price does not ascribe any value to the redevelopment, and if the operating performance of the property improves as currently anticipated, you could receive more value for your units in the future. For more information regarding the redevelopment, see “Special Factors — Future Plans and Proposals” and “The Offer — Section 7. Certain Information Concerning Your Partnership — Investment Objectives and Policies; Sale or Financing of Investments.” In addition, 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 were 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. For partnerships in which we control the general partner and have made tender offers, it has not been unusual for those partnerships to subsequently sell a property at a price in excess of the value we used to determine our tender offer price.

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Your partnership has a significant balloon payment due on its mortgage debt.

Your partnership has a balloon payment of approximately $70,738,000 due on its mortgage in July 2020. Your partnership will have to refinance such debt, sell assets or otherwise obtain additional funds prior to the balloon payment date, or it will be in default and could lose its property to foreclosure.

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. The directors and officers of your general partner have fiduciary duties to its sole member, which is an affiliate of Aimco. At the same time, the general partner of your partnership has fiduciary duties to all of the limited partners. The duties of the general partner to the partnership and its limited partners may come into conflict with the duties of the directors and officers of the general partner to the Aimco Operating Partnership, as sole member of the general partner. Because 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. Consequently, there is a risk that our estimate of the value of the units (and our offer price) is lower than the value that would be determined by an independent third party.

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. Although the general partner believes the offer is fair, you must 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 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 subsidiaries receive fees for managing your partnership and its property, a conflict of interest exists between continuing the partnership and receiving such fees, and liquidating the partnership and terminating such fees. We and the general partner of your partnership received total fees (excluding property management fees) of approximately $2,672,000 during the six months ended June 30, 2007. The property manager, which is our affiliate, is entitled to receive three percent of residential rent collections and five percent of commercial income from the partnership’s property as compensation for providing property management services. It received property management fees of approximately $227,000 during the six months ended June 30, 2007.

If we do not acquire all of the outstanding units in this offer, 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 that 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

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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.

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.

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.

THE OFFER

1.   Terms of the Offer; Expiration Date

Upon the terms and subject to the conditions of the offer, we will accept (and thereby purchase) any and all 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 October 29, 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.

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.

The offer is conditioned on satisfaction of certain conditions. The offer is not conditioned upon any minimum number of units being tendered. See “The Offer — Section 11. 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, any and all units validly

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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 we intend to pay for tendered units that have been accepted for payment as promptly as practicable, which we expect will be within three business days after expiration of the offer, by executing the letter of transmittal, you will agree that the transfer of units will be deemed to take effect as of the first day of the calendar quarter in which the offer expires. 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.

The offer to purchase is being mailed on or about October 1, 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.

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, any and all units validly tendered as promptly as practicable, which we expect will be within three business days after 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.

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 November 29, 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.

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

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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 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, 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

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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 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, or (b) the purchase, acquisition, holding, sale, tender or voting of one or more units in your partnership (collectively, the “Released Claims”); provided, however, that the Released Claims are not intended to include any claim based upon violations of federal or state securities laws in connection with this offer.

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. 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 of 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. We reserved the right to interpret the terms and conditions of the offer (including the letter of transmittal) in a reasonable manner. 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 “Special Factors — Material Federal Income Tax Matters.”

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

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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 “Special Factors — 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 November 29, 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. Neither we, the Information Agent, nor any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.

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, and (iii) 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 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 extension will be followed by a press release or public announcement which will be issued no later than 9:00 a.m., New York City time, on the next business day after the 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

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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.   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 an equity interest in and consolidated 156,958 units in 676 apartment properties;

•  owned an equity interest in and did not consolidate 11,741 units in 101 apartment properties; 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-KSB for the year ended December 31, 2006 and our Quarterly Report on Form 10-QSB for the quarterly period ended

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June 30, 2007 (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 “Special Factors — Purpose, Alternatives and Reasons for the Offer,” “— Conflicts of Interest and Transactions with Affiliates” and “The Offer — Section 7. Certain Information Concerning 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) has 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.

7.   Certain Information Concerning Your Partnership

General.  Your partnership was organized on May 14, 1986 under the laws of the State of Delaware. Its primary business is real estate ownership and related operations. Your partnership was formed for the purpose of operating and holding for investment an apartment complex known as “Riverside Park.” Your partnership’s investment portfolio currently consists of one residential apartment complex. Your partnership currently has approximately 267 limited partners.

General Partner.  The general partner of your partnership is AIMCO/Riverside Park Associates GP, LLC, a wholly owned subsidiary of Aimco/Bethesda Holdings, Inc., a Delaware corporation (“Aimco/Bethesda”), which is an affiliate of Aimco. The principal executive office of the general partner is located at 55 Beattie Place, P.O. Box 1089, Greenville, South Carolina 29602, and its phone number is (864) 239-1000. The names, positions and business addresses of the directors and executive officers of the general partner (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.

Our affiliate serves as manager of the property owned by your partnership. We and the general partner of your partnership received total fees and reimbursements (excluding property management fees) of approximately $646,000 in 2004, $951,000 in 2005 and $2,522,000 in 2006. Total fees and reimbursements (excluding property management fees) for the six months ended June 30, 2007 were approximately $2,672,000. The property manager is entitled to receive 4% of gross receipts from the partnership’s property as compensation for providing property management services. It received property management fees of approximately $568,000 in 2004, $530,000 in 2005 and $494,000 in 2006. Property management fees for the six months ended June 30, 2007 were approximately $227,000.

Ownership and Voting.  We, together with Insignia Financial Group, Inc. (which is our affiliate), own 383.41 units, or 67.74% of the total 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. In general, 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. See “Special Factors — Effects of the Offer” and “The Offer — Section 8. Voting Power.”

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 the 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. After taking into account the foregoing considerations, your general partner has no present intention of seeking a sale of your partnership’s property.

In March 2005, the partnership began a major redevelopment project at Riverside Park Apartments intended to help it compete with other properties in its local market. The redevelopment is expected to consist of renovation and appliance upgrades to each apartment unit and the addition of a new clubhouse and fitness center. The general partner estimates that project costs will be approximately $142,000,000. Based on current redevelopment plans, the general partner expects the redevelopment to be completed in April 2011. The partnership expects to fund the redevelopment from operations, advances

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from us and our affiliates and third party debt. Although there can be no assurance as to the effect of these expenditures on the future performance of the property, these expenditures are expected to improve the desirability of the property to tenants. 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 the 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 interior and exterior building improvements, cabinet, floor covering and appliance replacements and other replacements and renovations in the ordinary course of business. During the six months ended June 30, 2007, the partnership completed approximately $17,419,000 of capital improvements primarily arising from the redevelopment of Riverside Park Apartments, which includes capitalization of construction period interest of approximately $1,848,000, real estate taxes of approximately $208,000 and other construction period operating costs of approximately $148,000. These improvements were funded from operations, partnership reserves and advances from an affiliate of the general partner. Certain other routine capital expenditures are anticipated during the remainder of 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property. The additional capital expenditures will be incurred only if cash is available from operations, partnership reserves, or advances from us and our affiliates. 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 of 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 June 30,						For the Year Ended December 31,
	2007			2006			2006			2005			2004
	(Unaudited)
	(In thousands, except per unit data)
Operating Data:
Total Revenues		6,108			6,288			12,510			13,313			14,320
Income (loss) from Continuing Operations		363			(395	)		(284	)		(155	)		(5	)
Net income (loss)		363			(395	)		(284	)		(155	)		(5	)
Income (loss) from Continuing Operations per limited partnership unit		621.91			(676.68	)		(485.87	)		(265.02	)		(8.83	)
Net income (loss) per limited partnership unit		621.91			(676.68	)		(485.87	)		(265.02	)		(8.83	)
Distributions per limited partnership unit		—			—			—			—			2,030.04
Deficit of earnings to fixed charges		(1,464	)		(1,059	)		(1,893	)		(899	)		(5	)

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	For the Six Months Ended June 30,						For the Year Ended December 31,
	2007			2006			2006			2005			2004
	(Unaudited)
	(In thousands, except per unit data)
Balance Sheet Data:
Cash and Cash Equivalents		126			174			15,246			174			576
Real Estate, Net of Accumulated Depreciation		61,098			33,207			45,638			31,714			32,244
Total Assets		63,422			34,717			62,642			33,023			33,916
Notes Payable		80,489			51,214			80,489			52,224			54,135
General Partners’ Deficit		(1,499	)		(1,513	)		(1,510	)		(1,501	)		(1,496	)
Limited Partners’ Deficit		(20,286	)		(20,746	)		(20,638	)		(20,363	)		(20,213	)
Partners’ Deficit		(21,785	)		(22,259	)		(22,148	)		(21,864	)		(21,709	)
Total Distributions		—			—			—			—			(1,185	)
Book value per limited partnership unit		(35,840.99	)		(36,653.71	)		(36,462.90	)		(35,977.03	)		(35,712.01	)
Cash Flow Data:
Net (decrease) increase in cash and cash equivalents		(15,210	)		—			15,072			(402	)		(397	)
Net cash provided by operating activities		2,412			2,498			3,385			4,170			3,631

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.

	Date of
Property	Purchase	Type of Ownership	Primary Use
Riverside Park Apartments Fairfax County, Virginia	05/15/86	Fee ownership subject to first and second mortgages	Apartment 1,229 units

Accumulated Depreciation Schedule.  The following shows the gross carrying value and accumulated depreciation of your partnership’s property as of December 31, 2006.

	Gross		Accumulated		Depreciable		Method of		Federal
Property	Carrying Value		Depreciation		Life		Depreciation		Tax Basis
	(In thousands)								(In thousands)
Riverside Park Apartments	$	108,152	$	62,514		5-30 years		Straight line	$	36,118

Schedule of Mortgages.  The following shows certain information regarding the outstanding first mortgage encumbering your partnership’s property as of December 31, 2006.

	Principal									Principal
	Balance at		Stated							Balance
	December 31,		Interest			Period		Maturity		Due at
Property	2006		Rate			Amortized		Date		Maturity
	(In thousands)									(In thousands)
Riverside Park Apartments
1st mortgage(1)	$	50,489		7.45	%		360 months		07/01/20	$	44,909
2nd mortgage(1)	$	30,000		5.90	%		360 months		07/01/20	$	25,829
	$	80,489								$	70,738

(1) Fixed rate mortgage.

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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				Average
	Rental Rates				Annual
	(per unit)				Occupancy
Property	2006		2005		2006			2005
Riverside Park Apartments	$	11,857	$	11,369		77	%		85	%

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.  The following table shows, for each of the years indicated, the distributions paid per unit of limited partnership interest for such years.

Year Ended December 31	Amount
2004	$	2,030.04
2005	$	—
2006	$	—
2007 (through June 30)	$	—

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 four percent of the gross receipts from the partnership’s property for providing property management services. See “Special Factors — Conflicts of Interest and Transactions with Affiliates.”

	Partnership Fees		Property
Year	and Expenses		Management Fees
2004	$	646,000	$	568,000
2005	$	951,000	$	530,000
2006	$	2,522,000	$	494,000
2007 (through June 30)	$	2,672,000	$	227,000

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.

8.   Voting Power

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 all or substantially all of your partnership’s assets. We, together with Insignia Financial Group, Inc. (which is our affiliate), own 383.41 units, or 67.74% of the outstanding units of your partnership. Because we and our affiliates 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 “Special Factors — Effects of the Offer.”

9.   Source of Funds

We expect that approximately $11.8 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 13. Fees and Expenses.”

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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 $30 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 tendered pursuant to these offers. As of June 30, 2007, we had cash and cash equivalents of approximately $258 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 AIMCO/Bethesda 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.

10.   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.

11.   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), if any of the following shall occur:

•  any change shall have occurred or been threatened in the business, properties, 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 your partnership of more than $10,000 per year, or a decrease in value of an asset of your partnership, or the incurrence of a liability with respect to your partnership, in an amount in excess of $100,000 (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, (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

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(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.

The foregoing conditions are for our sole benefit and may be asserted by us or may be waived by us at any time in our reasonable discretion prior to the expiration of this offer. We will not assert any condition which has not been satisfied solely as a result of our own actions. 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 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.

12.   Certain Legal Matters

General.  Except as set forth in this Section 12, 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 and Rule 13e-3 Transaction 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

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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 12.

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.

13.   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		40,000
Printing Fees		1,200
Tax and Accounting Fees		1,500
Postage		1,500
Depositary		500
Total	$	52,200

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 and Rule 13e-3 Transaction Statement on Schedule TO, pursuant to Sections 13(e)(4), 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 7. Certain Information Concerning Your Partnership.”

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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:
1200 Wall Street, 3rd Floor	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) 217-9608

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ANNEX I

OFFICERS AND DIRECTORS

The names and positions of the executive officers of Aimco, Aimco-GP, and the general partner of your partnership, and the names of the directors of Aimco, are 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 managers of the general partner of your partnership are Harry G. Alcock and Martha L. Long. 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 and Aimco-GP
Jeffrey W. Adler	Executive Vice President — Conventional Property Operations of Aimco, Aimco-GP and the General Partner
Harry G. Alcock	Executive Vice President and Chief Investment Officer of Aimco, Aimco-GP and the General Partner; Manager of the General Partner
Timothy J. Beaudin	Executive Vice President and Chief Development Officer of Aimco, Aimco-GP and the General Partner
Miles Cortez	Executive Vice President, General Counsel and Secretary of Aimco, Aimco-GP and the General Partner
Patti K. Fielding	Executive Vice President — Securities and Debt, and Treasurer of Aimco, Aimco-GP and the General Partner
Lance J. Graber	Executive Vice President — Aimco Capital Asset Management and Transactions, East, of Aimco and Aimco-GP; Executive Vice President of the General Partner
Thomas M. Herzog	Executive Vice President and Chief Financial Officer of Aimco, Aimco-GP and the General Partner; Director of Aimco-GP
James G. Purvis	Executive Vice President — Human Resources of Aimco, Aimco-GP and the General Partner
David Robertson	Executive Vice President, President and Chief Executive Officer — Aimco Capital, of Aimco, Aimco-GP and the General Partner
Robert Y. Walker, IV	Executive Vice President and Conventional Operations Chief Financial Officer of Aimco, Aimco-GP and the General Partner
Scott W. Fordham	Senior Vice President and Chief Accounting Officer of Aimco, Aimco-GP and the General Partner
Martha L. Long	Senior Vice President — Partnership Transactions of Aimco, Senior Vice President of Aimco-GP and Manager of the General Partner
Stephen B. Waters	Vice President 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

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Unless otherwise indicated below, the business address of each person is 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237.

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 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.
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.
Timothy J. Beaudin	Mr. Beaudin was appointed Executive Vice President and Chief Development Officer of Aimco 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. 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. 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. He focuses on transactions related to Aimco’s portfolio of properties in the eastern portion of the United States.

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Name	Principal Occupations for the Last Five Years
Thomas M. Herzog.	Mr. Herzog was appointed Executive Vice President of Aimco 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. 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.
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.
Robert Y. Walker, IV	Mr. Walker has served as Executive Vice President and Conventional Operations Chief Financial Officer of Aimco and of the Managing 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 NHP. During 2002 and 2003, she served as Senior Vice President of Continuous Improvement. Ms. Long has been a Manager 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 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 Cambridge Associates, Inc. 1 Winthrop Square, Suite 500 Boston, MA 02110	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.

I-3

Name	Principal Occupations for the Last Five Years
Richard S. Ellwood 12 Auldwood Lane Rumson, NJ 07660	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.
Thomas L. Keltner	Mr. Keltner was first elected as a Director of Aimco in April 2007 and 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.
J. Landis Martin 199 Broadway Suite 4300 Denver, CO 80202	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, a publicly held wireless communications company.
Robert A. Miller	Mr. Miller was first elected as a Director of Aimco in April 2007 and 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.

I-4

Name	Principal Occupations for the Last Five Years
Thomas L. Rhodes 215 Lexington Avenue 4th Floor New York, NY 10016	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., a publicly held real estate investment trust.
Michael A. Stein 22021 20th Avenue SE Bothell, WA 98021	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:

1200 Wall Street, 3^rd Floor

Lyndhurst, NJ 07071

By Overnight Courier:

1200 Wall Street, 3^rd Floor

Lyndhurst, NJ 07071.

By Hand:

1200 Wall Street, 3^rd Floor

Lyndhurst, NJ 07071

For information, please call:

By Telephone:

TOLL FREE: (800) 217-9608

By Fax:

(201) 460-0050

EX-99.(A)(2)

LETTER OF TRANSMITTAL

To Tender Units of Limited Partnership Interest In

Riverside Park Associates Limited Partnership

(the “Partnership”)

Pursuant to the Offer to Purchase

Dated October 1, 2007

by

AIMCO PROPERTIES, L.P.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON OCTOBER 29, 2007, UNLESS EXTENDED (the “Expiration Date”). THE OFFER PRICE IS $64,429 PER UNIT.

IF YOU HAVE THE CERTIFICATE ORIGINALLY ISSUED TO REPRESENT YOUR INTEREST IN THE PARTNERSHIP PLEASE SEND IT TO THE INFORMATION AGENT WITH THIS LETTER OF TRANSMITTAL.

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) 217-9608
	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) 217-9608 (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 (as amended or supplemented from time to time, the “Offer to Purchase”) dated October 1, 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 amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offer to Purchase, 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, 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 present and 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.

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, misstatements and omissions to disclose, breach of contract, violations of any state or federal statutes, rules or regulations,

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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 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 or (b) the purchase, acquisition, holding, sale, tender or voting of one or more Units in the Partnership.

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 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 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. Subject to and effective upon acceptance for

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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 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
Payor’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

10

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.

11

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.

12

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 subdivision 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

13

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

14

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) 217-9608
	By Fax:
	(201) 460-0050

EX-99.(A)(3)

AIMCO PROPERTIES, L.P.

c/o The Altman Group, Inc.

1200 Wall Street, 3rd Floor

Lyndhurst, NJ 07071

(800) 217-9608

October 1, 2007

Dear Limited Partner:

We are offering to purchase any and all units in your partnership, Riverside Park Associates Limited Partnership, for $64,429 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 October 29, 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 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 managing 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 managing 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.

You should be aware that, upon completion of this offer, your partnership will terminate the registration of its limited partnership units under the Securities Exchange Act of 1934, as amended, and will no longer file reports with the Securities and Exchange Commission, such as annual reports on Form 10-KSB and quarterly reports on Form 10-QSB. You will, however, continue to receive a Schedule K-1 as well as audited financial statements with respect to your partnership pursuant to the terms of your partnership’s agreement of limited partnership.

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) 217-9608.

Very truly yours,

AIMCO PROPERTIES, L.P.

EX-99.(C)(1)

Exhibit (c)(1)

COMPLETE APPRAISAL
SUMMARY APPRAISAL REPORT
OF
RIVERSIDE PARK APARTMENTS
2000 HUNTINGTON AVENUE
ALEXANDRIA, VIRGINIA 22303

PREPARED FOR:

AIMCO
4582 S. ULSTER STREET PARKWAY, SUITE 1100
DENVER, COLORADO 80237

AS OF:
OCTOBER 24, 2005

Ms. Martha Long
Senior Vice President	November 23, 2005
Apartment Investment and Management Company
4582 S. Ulster Street Parkway, Suite 1100
Denver, Colorado 80237

Re: Riverside Park Apartments
2000 Huntington Ave
Alexandria, Virginia 22303

Dear Ms. Long:

At your request, KTR Newmark Real Estate Services LLC has appraised the above referenced property. The purpose of the appraisal is to estimate the Market Value of the Fee Simple Estate of the subject property, free and clear of financing, as of October 24, 2005. The date of value corresponds to the date the subject property was most recently inspected by the appraiser.

The subject property consists of a 28.17-acre tract of land improved with a 1,222-unit garden-style apartment complex known as the Riverside Park Apartments. Construction of the improvements was reportedly completed in 1971. The structural improvements were observed to be in average physical condition and consist of three 16-story concrete block construction with brick exterior walls and bitumen roofs. Amenities common to all units include electric kitchen appliances, patio/balcony in all 1-bedroom and 2-bedroom apartments, cable TV, and mini-blinds. Community amenities include controlled access entry, on-site management/leasing office, a swimming pool, fitness center, tennis court and laundry facilities. The Riverside Park Apartments contain 1,020,136 rentable square feet which suggests an average unit size of 835 square feet.

As of the date of inspection, the subject property was in the initial stages of a renovating program. Approximately 142 units were in the process of being upgraded and not available for lease. The appraisers were instructed to appraise the property without consideration given to the pending renovation. The property is being appraised on a stabilized basis, without consideration given to the proposed renovation. See “Special Assumption” in the Basic Assumptions and Limiting Conditions section of the ensuing appraisal report.

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

KTR Newmark Real Estate Services LLC
5477 Glen Lakes Drive, Dallas, TX 75231 Tel: 214.363.3373 Fax: 214.369.4388
www.ktrnewmark.com

Ms. Martha Long	November 23, 2005
AIMCO	Page 2

of discussion contained in this report is specific to the needs of the client and for the intended use stated herein.

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 Fee Simple Estate of the subject property, without consideration given to the pending renovation (see “Special Assumption”), as of October 24, 2005, is:

ONE HUNDRED TWENTY-TWO MILLION THREE HUNDRED THOUSAND DOLLARS
($122,300,000)

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 NEWMARK REAL ESTATE SERVICES LLC
By:	Steven J. Goldberg, MAI, CCIM	By:	Jackson L. Aills
	Senior Vice President for the Firm		Appraiser

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Page i

CERTIFICATE OF VALUE

We, Steven J. Goldberg. MAI. and Jackson L. Aills, certify that to the best of our 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 our personal, unbiased professional analyses, opinions, and conclusions.

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

Our 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

Our 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 (FlRREA) effective August 9, 1990.

Jackson L. Aills made a personal a personal inspection of the property that is the subject of this appraisal, Steven J. Goldberg, MAI did not inspect the subject property.

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.

We 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, Steven J. Goldberg, MAI, has 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.

No one other than the undersigned assisted in the preparation of this report.

As of the this appraisal, Steven J. Goldberg, MAI and Jackson L. Aills are certified as a General Real Estate Appraisers in the State of Texas (Certification Numbers TX-I320987-G and TX-I326637-G).

As of the date of this report, Steven J. Goldberg is temporarily certified to conduct business in the State of Virginia as a General Real Estate Appraiser (Temp Permit #4001-010350).

KTR NEWMARK REAL ESTATE SERVICES LLC
By:	Steven J. Goldberg, MAI	By:	Jackson L. Aills
	Senior Vice President for the Firm		Appraiser

KTR Newmark

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	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 have 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.

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	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.

Special Assumption

As of the date of inspection, the subject property was in the process of being renovated. As of the date of inspection, the subject had 142 “down” units that were in the process of being upgraded. At the client’s request, no consideration has been given to the renovation that is in progress. The property is appraised on a stabilized basis assuming all of the units currently undergoing renovation are available for lease and in similar condition to the property’s remaining units.

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Page iv

SUBJECT PROPERTY PHOTOGRAPH

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Page v

TABLE OF CONTENTS

Title Page
Letter of Transmittal
Certificate of Value		i
Basic Assumptions and Limiting Conditions	ii
Subject Photograph	iv
Table of Contents		v
Executive Summary		1
Introduction and Premises of the Appraisal		2
Regional Overview		4
Neighborhood Overview		9
Site Analysis		11
Real Estate Taxes		12
Zoning		13
Description of Improvements		13
Apartment Market Overview		16
Economic Rent Analysis		17
Highest and Best Use		23
Valuation Procedure		24
Income Capitalization Approach		25
Sales Comparison Approach		30
Reconciliation and Final Value Conclusion		32
ADDENDA
Subject Photographs
Comparable Rental Photographs
Comparable Sale Photographs
Regional Location Map
Neighborhood Map
Comparable Rentals Map
Comparable Sales Map
Qualifications

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Page 1

EXECUTIVE SUMMARY

Property:	Riverside Park Apartments
Location:	2000 Huntington Avenue, Alexandria, New York
Assessors Parcel ID No:	0833-01-0101– District 06-02-00
Purpose of Appraisal:	To estimate the Market Value of the subject property as of the date of value. As previously indicated, no consideration is given to the renovation that is in progress. See “Special Assumption” in Basic Assumptions and Limiting Conditions section of this report.
Date of Value:	October 24, 2005
Date of Report:	November 23, 2005
Interest Appraised:	Fee Simple Estate
Description of Property:	The subject property consists of a 28.17-acre tract of land improved with a 1222-unit garden-style apartment complex known as the Riverside Park Apartments. Construction of the improvements was reportedly completed in 1971. Riverside Park Apartments contain 1,020,136 rentable square feet which suggests an average unit size of 835 square feet.
Location:	The subject property is located in an unincorporated section of Fairfax County, Virginia, one-half mile south of the City of Alexandria and Interstate I-495. The US Postal Service has identified this property as being in Alexandria for mailing purposes.
Zoning:	The subject site is zoned as a R-30 residential district by the County of Fairfax. The intended use of land in this zoning district is multifamily residential development at a density not to exceed 30 units per acre.
Flood Zone:	According to the Federal Emergency Management Agency (FEMA), the property is located within Zone A, an area outside any special flood hazard areas as defined by FEMA. FEMA Map No. 5155250150D, dated 03/02/1994.
Highest and Best Use:	Multifamily residential development.
Marketing Period:	Less than 12 months

Final Estimate of Market Value, by Approach (see “Special Assumption”)

Cost Approach:		N/A
Sales Comparison Approach:	$	122,000,000
Income Approach:	$	122,300,000
Final Estimate of Market Value:	$	122,300,000

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	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. Sales utilized were confirmed with a principal or representative involved with the sale. 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 Fee Simple Estate of the subject property as of October 24, 2005. It is for the internal use of AIMCO to facilitate asset evaluation.
Property Rights Appraised	The property interest appraised is that of the Fee Simple Estate. A Fee Simple Estate is defined by The Dictionary of Real Estate Appraisal, Second Edition, Appraisal Institute as:
	“Absolute ownership unencumbered by any other interest or estate, subject only to the limitations of the four powers of government (eminent domain, escheat, police power and taxation)”.
Marketing Period	The value conclusion reported herein assumes a marketing period of less than one year. According to the Korpacz Real Estate Investor Survey, 3rd Quarter 2005, indicates that apartment properties in the national market have an average marketing time of 5.92 months up slightly from 5.44 months a year ago. This estimate seems reasonable, given recent market activity in the influencing area and the profile of the subject property.
Property History	Property tax records indicate that AIMCO Riverside Park, LLC is the current owner of record. The current owner acquired title to the property from Riverside Park Associates on July 8, 2000. No details pertaining the conveyance were provided to the appraisers. No conveyances involving the subject property were noted within the three-year period preceding the effective date of value. To our knowledge there are no contracts of sale

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Page 3

	pending as of the date this report was prepared, nor are we aware that the property is listed for sale.
Most Likely Buyer	National and regional investors typically purchase multifamily properties of this size in markets such as the subject.
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 condition 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.”

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Page 4

REGIONAL OVERVIEW

Overview	The subject property is located in an unincorporated section of Fairfax County, Virginia within the Washington DC Metropolitan Statistical Area (MSA). The Washington D.C. Metropolitan Statistical Area (MSA) together with Maryland’s Baltimore MSA comprise the Washington-Baltimore Consolidated Metropolitan Statistical Area (CMSA). This CMSA includes 32 jurisdictions combining the District of Columbia, 17 Virginia cities and counties, 12 Maryland cities and counties, and two West Virginia counties. In 1993, the City of Fredericksburg, along with Spotsylvania and King George Counties, was added to the Washington D.C. MSA.
	The Baltimore-Washington region is often referred to as the “Common Market.” This area is considered to be one of the nation’s strongest growth regions. These two metropolitan areas complement each other profoundly. The Baltimore MSA is a growing “traditional” region with a major port, broad employment base, and extensive financial services. Washington has the Federal government, trade associations, legal services, and a growing private sector. Each area’s characteristics work well together to create a distinctive economic environment.
	A proper understanding of the locations within the larger area begins with a discussion of Washington D.C. While this section focuses on the Washington D.C. MSA, a number of relevant economic, social, political, and environmental characteristics as well as the area’s interrelationship with Northern Virginia will be delineated. This information is intended to provide the necessary background for understanding economic and demographic forces affecting development and property values throughout the area.
	Washington’s economy has been shaped by the presence of the Federal Government and related activities. As a consequence, the region has been able to adapt to changes in the United States economy more so than Baltimore, which has had to re-tool its heavy industrial, harbor related industries to maintain its market share in its respective areas. Historically, the Washington area has grown as the Federal Government has grown. In the past two decades, it has attracted a more diverse, predominately white-collar employment and commercial base as major corporations strive to have a presence where some influence (real or perceived) can be had on the affairs of government.
	The Washington D.C. MSA includes the District of Columbia as well as the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park and the counties of Arlington, Clarke, Culpeper, Fairfax, Fauquier, King George, Loudoun, Prince William, Spotsylvania, Stafford, and Warren in Virginia. The Maryland counties of Calvert, Charles, Frederick, Montgomery, and Prince George’s and the West Virginia counties of Berkeley and Jefferson are also included.

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Population Population trends affect employment, retail spending, housing, bank deposits, and many other essential demand parameters analyzed in determining real estate productivity. Population growth, stability, or decline is a strong indicator of real estate viability within an area. The following population and employment data represents historic trends of the counties that comprise the Washington DC MSA.

POPULATION — WASHINGTON DC MSA

County/City	1990		2000		2003		1990 – 2003 Growth Rate
District of Columbia		606,900		572,059		570,803		-0.2	%
Alexandria		111,183		128,283		135,185		5.4	%
Fairfax		19,701		21,498		22,187		3.2	%
Falls Church		9,578		10,377		10,901		5.0	%
Fredericksburg		19,027		19,279		18,829		-2.3	%
Manassas Park		6,734		10,290		11,604		12.8	%
Manassas		27,957		35,135		37,231		6.0	%
Arlington		170,936		189,453		192,774		1.8	%
Clarke		12,101		12,652		13,277		4.9	%
Culpeper		27,791		34,262		36,712		7.2	%
Fairfax		818,505		969,749		1,021,838		5.4	%
Fauquier		48,741		55,139		59,745		8.4	%
King George		13,527		16,803		17,775		5.8	%
Loudoun		86,129		169,599		217,048		28.0	%
Prince William		215,686		280,813		315785		12.5	%
Spotsylvania		57,403		90,395		104,705		15.8	%
Stafford		61,236		92,446		106,329		15.0	%
Warren		26,142		31,584		33,345		5.6	%
Calvert		51,372		74,563		81,739		9.6	%
Charles		101,154		120,546		129,441		7.4	%
Frederick		150,208		195,277		212,344		8.7	%
Montgomery		763,191		873,341		912,723		4.5	%
Prince Georges		723,104		801,515		827,310		3.2	%
Berkeley		59,253		75,905		82,844		9.1	%
Jefferson		35,926		42,190		45,276		7.3	%
Total MSA		4,223,485		4,923,153		5,217,750		6.0	%

Source: ESRI BIS; Compiled By KTR Newmark

As indicated, the counties of Manassas Park, Loundoun, Prince William, Spotsylvania and Stafford realized the greatest population gains from 1990 to 2003. This demonstrates that the growth pattern of the MSA is between Fredericksburg and Washington DC.
DEMOGRAPHIC COMPOSITION OF THE MSA POPULATION

<15 years		21.0	%
15-24 years		13.0	%
25-44 years		32.1	%
45-64 years		24.6	%
65> years		9.3	%
Median Age	35.7 years

	Approximately 23.0% of the Washington DC MSA population had received a four-year college degree in 2000. The median household income for the Washington DC MSA is $62,336.
Employment	Employment in the MSA has traditionally been dominated by government, trade and service oriented sectors that account for over two- thirds of the metropolitan employment. The U.S Bureau of Labor

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Statistics was consulted to determine the breakdown of employment by industry in the region. The following table provides this information.

EMPLOYMENT BY SECTOR
WASHINGTON DC MSA

	Number of		Percentage of			12-Month
Industry	Employees		Employment			Percent Change
Construction and Mining		170,000		5.9	%		2.2	%
Manufacturing		72,900		2.5	%		-3.1	%
Trade, Transportation and Utilities		412,500		14.4	%		0.1	%
Information		107,800		3.8	%		-2.9	%
Financial Activities		157,900		5.5	%		3.1	%
Professional and Business Services		595,800		20.8	%		3.3	%
Educational and Health Services		306,600		10.7	%		1.2	%
Leisure and Hospitality		236,900		8.3	%		1.1	%
Other Services		162,500		5.7	%		0.1	%
Government		641,900		22.4	%		1.6	%
Total		2,864,800		100.0	%		1.4	%

Growth in the government sector has remained relatively stable over the last 10 years, while the other employment sectors continue to expand. In 1970, government employment (local, state and federal) accounted for almost 40 percent of the total jobs in the metropolitan area or twice as many as the service sector. In 1980, the Reagan Administration put a halt to government job growth, and by 1989, there were only 23,600 more government workers than in 1980. Currently, government employment accounts for 22.4% of all jobs. Conversely, the service segment continues to expand and now accounts for more than the government sector. The service sector is greatly influenced by a healthy tourist industry. The nation’s capital remains one of the largest tourist attractions in the country. Over 19,000,000 tourists visit Washington D.C. and the surrounding areas each year.

Resulting in the historic stability of the Federal Government on the local economy, unemployment for the Washington D.C. MSA has traditionally been lower than that of the United States. The chart below, which includes agricultural employment, illustrates the employment status of Washington MSA in relation to the State and the United States.

EMPLOYMENT STATISTICS — DECEMBER 2003

	US		Virginia		Washington DC MSA
Civilian Labor Force		146,501,000		3,796,900		2,843,400
No. Employed		138,556,000		3,658,300		2,759,000
No. Unemployed		7,945,000		138,600		84,400
Unemployment Rate		5.4		3.6		3.0

The following table illustrates the non-governmental major employers in the Alexandria region.

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MAJOR EMPLOYERS – ALEXANDRIA

Employer	# of Employees
U.S. Department of Defense		8,102
City of Alexandria		2,173
Alexandria Public Schools		2,008
Alexandria Hospital		1,600
WMATA		1,077
Northern Virginia Community College		960
Institute for Defense Analysis		800
U.S. Department of Agriculture		659
Boat Owners Assoc. of the U.S.		580
Public Broadcasting System		550
U.S. Postal Service		426

Source: Alexandria Chamber of Commerce

	Also of importance to the area is the military. The Marine Corps Combat Development Command – Quantico has 9,100 military personnel while the Naval Surface Warfare Center in Dahlgren has 3,422 and Fort A.P. Hill 309 military personnel. It is significant to note that these figures are not included in the tables above.
Transportation	The Washington metropolitan area is a major destination on the Eastern Seaboard. It lies along the route of Interstate 95, which extends from southern Florida to northern Maine. Washington D.C. is surrounded by Interstate 495, which is known as the Beltway. About 100 miles west of Interstate 95 is Interstate 81 also traversing the area in a roughly north-south orientation. Major westbound highways are Interstate 66 from Washington D.C. and Interstate 61 out of Richmond, Virginia.
	Many major and secondary roadways in the Washington D.C. area as a whole are overburdened by traffic, especially during morning and evening “rush hours.” Development of high occupancy vehicle (HOV) lanes has alleviated the problem to some degree over the years. Local commuter transportation is a particular concern.
	In recent years, commuting patterns have expanded. Previously most traffic was going from the suburbs to the city and back. Now approximately 40 percent of commuter traffic travels from suburb to suburb. As a result, road patterns connecting suburban communities are being developed in addition to improving major thoroughfares to and from Washington D.C. Plans exist for major improvements to a number of major and minor area arteries. The Springfield Interchange, where I- 95, I-395 and I-495 come together, is undergoing construction to improve traffic flow. This is one of the largest construction projects in the nation with an estimated cost of approximately $675 million when completed. The project consists of building more than 50 bridges and widening Interstate 95 to 24 lanes between the Beltway and Franconia. Project completion is anticipated for March, 2007.
	The Alexandria region affords easy access to major metropolitan areas on the east coast via Interstate 95. This major artery highway bi-sects the area and provides six lanes from north to south travel along the eastern

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seaboard. There are currently nine interchanges in the region. Interstate 95 also connects with 12 other interstate highway systems. Other major arteries include U.S. Route 1 and U.S. Route 301 (north/south) as well as U.S. Route 17 and State Route 3 (east/west). The subject property with frontage on Interstate 95 benefits from this visibility and access.

MetroRail provides rail service to the District and the closer suburban areas. Land uses and property values have intensified and increased in the vicinity of Metro Stations. The area commuter has embraced the Metro System as a viable alternative to major traffic tie-ups. Service extends as far west as Vienna, Virginia, as far south as Franconia/Springfield and as far north as Shady Grove, Maryland. When complete, a total of 103 miles will be included in the system. Augmenting the Metro System, Amtrak provides access to intermediate and long range destinations, including Fredericksburg, Virginia. As ridership increases, additional pressure may be taken off the highway system. Bus service (MetroBus) is also available throughout the region. From Fredericksburg, express commuter buses make regular trips into Washington D.C. Demand for transportation in combination with highway commuter lanes has led to the practice known as “slugging” whereby commuters needing a ride wait in predetermined areas to “slug” or ride with others in private vehicles who are headed in the same destination.

Another commuter rail system, the Virginia Railway Express (VRE), offers “rush hour” services on two lines. This first extends west of the district to the Manassas area, with the second traveling south to Fredericksburg. The service offer eight trains daily into Washington and now features double-decker busses to accommodate the strong demand. This service has connected the outlying Virginia suburbs with the MetroRail System providing further access to Crystal City, L’Enfant Station and Union Station. Commuting times are estimated at 75 minutes from Fredericksburg to Union Station and 55 minutes from Manassas to Union Station. Proposed stations include Fairfax Station, Cherry Hill, Widewater, and Spotsylvania.

There are three major international airports in the Washington area. Baltimore-Washington International Airport is midway between Baltimore and Washington. The Ronald Reagan Washington National Airport is on the south side of the Potomac River in Alexandria near the downtown business district. It has long operated at capacity and was for many years the preferred destination and departure point due to its convenience to the downtown area. The third, Washington Dulles International Airport, is approximately 25 miles west of Washington in Loudoun County at the Fairfax County line. In addition to these three, Richmond International Airport is south of the subject property and offers national and international flights. Local airports include the Fredericksburg Airport and the Stafford Airport.

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	Transportation facilities for air, road and rail traffic have been well developed though there is a constant effort in the case of commuter rail and highway development to play “catch-up” with the economic and population growth of the region. Adequate transportation systems and linkages are important to the convenience of local residents and are essential for the orderly and timely development of commercial, residential, and industrial projects.
Conclusion	The proximity to Washington D.C. cannot be overstated when discussing the demographics of the region. The presence of government employment and the numerous military installations create as recession-proof an area as can be found in the United States. For this reason, there exists a fairly dependable, continuing source of demand for goods and services.
	The natural beauty and temperate climate of the region offers a positive environment for residents and businesses alike. Transportation routes are continually upgraded to improve congestion problems throughout the region. Local officials are exploring and implementing new and creative ways to alleviate traffic difficulties and efficiently moving people and goods within the region. The quality of life should continue to be attractive to residents and businesses alike.

NEIGHBORHOOD OVERVIEW

Location:	The subject property is situated in an unincorporated section of Fairfax County, one half mile south of the City of Alexandria and I-495. Situated in close proximity to Washington, DC, the subject property is accessible to neighborhood services and employment centers. The location of the subject property is rated as excellent.
Access:	Primary roadways in the neighborhood include the Huntington Avenue and Richmond Highway, or Route 1. Richmond Highway provides access to Alexandria and Washington DC, while Huntington Avenue provides westerly access. Richmond Highway provides access to Interstate 495, part of the Capital Beltway system, and from there to Interstate 95 and the entire eastern seaboard. In addition, the subject property is located a few hundred yards from the Huntington Avenue station of the Yellow Line of the Washington Metro subway system, providing quick access to Capital Hill and connecting trains elsewhere in the region. The well-managed network of infrastructure renders good access to and within the neighborhood.
	The subject neighborhood is accessible to retail services and employment centers. Numerous business parks are located within a short commute of the subject neighborhood. The majority of regional financial firms have their offices approximately 1 mile northwest of the subject property in Alexandria. Capital Hill itself is approximately seven miles north of the

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	subject property. Commercial and retail uses and other area employers are abundant along Richmond Highway, and many specialty shops and boutiques are located in Alexandria proper. Travel time to Capital Hill is approximately 30 to 40 minutes by subway. Public services, including schools and medical facilities, are in close proximity.
Land Use:	The subject neighborhood is a relatively new but rapidly maturing residential district. The area realized much of its growth from the 1970s through the early 1990s. Most of the apartments in the area were built in the 1970s and 1980s. As the growth pattern of the Washington, DC area continues to expand around the Metro system, much of the land in the subject neighborhood has been developed. Approximately 85% of the land area is developed with limited land available to accommodate additional development. Multifamily and commercial development is prevalent along the primary roadways. Underutilized land in the form of public green belts, parks and athletic fields are in close proximity to the subject property along the Potomac River to the east. The predominate land use in the neighborhood is residential, consisting of both single and multifamily developments.
Adjacent Land Uses:	South:      Multifamily/Retail
	North:      Multifamily
	East:        Road/Park
	West:      Single-family residences
New Construction:	Due to the limited availability of vacant land suitable for development, only limited new construction was noted in the immediate vicinity of the subject property. A limited number of recently completed apartment complexes were observed on in-fill sites throughout the area. A significant amount of development is occurring to the north of the subject property in the city of Arlington where more land is available and public transportation much more convenient to Capital Hill. New residential construction, both single- and multi-family, continues at a pace above the national average throughout the Washington, DC MSA.
Change in Current Use	The neighborhood can be classified as being in the growth stage of its life cycle. As a result of its good location in the Washington, DC MSA growth in the area is anticipated to continue, in the form of new development on vacant and underutilized sites.
Conclusion	The property is located in the southern growth pattern of the Washington, DC MSA, within the County of Fairfax. The area is easily accessible form all parts of Washington, DC due to its proximity to Interstate 495, which is part of the Washington, DC beltway system. As a result of its good location, the area has proven to be a desirable residential and commercial location. Major employers are located in close proximity to the subject neighborhood, and subway service provides quick access to Capital Hill. The presence of major employers in the area has enhanced the desirability of the neighborhood as a residential location. Area residents are offered a

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broad range of services and excellent access to other parts of the Washington, DC metropolitan area.

SITE ANALYSIS

Location	The site is located in the County of Fairfax, one half mile south of the City of Alexandria and one mile south of Washington, DC. Interstate 495 is located approximately one half mile north of the subject.
Size	The site is rectangular in shape and consists of a total land area of 28.17 acres.
Excess Land	None
Topography	Generally level and on grade with the bounding street
Site Improvements	The 28.17-acre site is improved with a 1,222-unit garden-style apartment community known as the Riverside Park Apartments. See Description of the Improvements section of this report for details concerning site improvements.
Street Improvements	Huntington Avenue is a neighborhood collector street that provides access from the main road of Richmond Highway. Richmond Highway provides access to Interstate 495 and the rest of the Washington, DC metropolitan area.
Desirability of Location	Excellent
Access to Major Arteries	Excellent
Access to Local Arteries	Excellent
Curb Appeal	Average
Ingress/Egress	Good – Adequate road frontage along a minor neighborhood collector street.
Visibility from Road	Excellent
Public Transportation	Excellent
Neighborhood Appearance	Average
Flood Zone Map	According to the Federal Emergency Management Agency, the property is within Zone C, outside any special Flood Hazard Areas (FEMA Map No. 5155250150D, Dated 03/02/1994).
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

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	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.
Land Use Restrictions	The appraisers are unaware of any deed restrictions that 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 that would disclose any land use restrictions that may exist.
Utilities	All municipal utilities (water and sewer) and private services (electric, gas, telephone) are available to the site.
Police and Fire Protection	Provided to the site by the County of Fairfax
Conclusion	The subject represents a desirable site for multifamily development.

REAL ESTATE TAXES

Assessor’s Parcel No:	0833-01-0101 (Fairfax County Appraisal District)
Ad Valorem Tax rate (2004)	$1.13 per $100 of assessed value
Equalization Rate	100%
Payment Due Date	Taxes are paid annually in arrears and due by January 31 (i.e. 2005 taxes are due by January 31, 2006)
2005 Assessed Value	$86,050,800
Tax Analysis:	The subject property is situated within the taxing jurisdictions of the Fairfax County, Virginia. The County government assesses the property for all of the applicable taxing jurisdictions. Property assessments are determined annually and typically certified in the 3rd quarter of the year. After assessments for the county tax roll have been certified, tax rates for each taxing jurisdiction are determined. The assessment and tax rate data presented above is reflective of the 2003 tax year.
	The 2005 assessment of $86,050,800 represents a 5.8% increase from the 2004 assessment of $81,341,455. A review of assessments for competing apartment properties located in the influencing area suggest that the subject’s current assessment is equitable. The current assessment is processed against the most current tax rate for valuation purposes.
Estimated Tax Liability	$972,000, rounded. ($86,050,800 x 1.13/$100 of value = $972,374)

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ZONING

Zoning:	The site is zoned R-30 by the County of Fairfax.
Permitted Use	The R-30 zoning designation is intended to accommodate condominiums and apartments at a density of 30 units per acre.
Maximum Height:	150 feet, the Zoning Board can increase the limit upon request
Maximum Density:	30 units per acre, or total of 845 units.
Set Backs:	Front Yard — 20 feet Side Yard – 10 feet Rear Yard – 25 feet
Parking Requirements	No requirements
Comments:	It appears the property does not conform to existing zoning regulations, but due to the age of the property it is assumed it is exempt under the applicable “grandfather” clause.

DESCRIPTION OF IMPROVEMENTS

The subject improvements consist of a 1,222-unit garden-style apartment complex known as the Riverside Park Apartments. The following offers a description of the improvements. The complex is comprised of three separate buildings on 28.17 acres of land.

KTR Site Inspector:	Jackson L. Aills
Date of Inspection:	October 24, 2005
Property Contact:	Nicole Stamand — On-site Manager
Year Built:	1971
Number Units:	1,222
Configuration/Stories:	Garden-style complex, three 16 story buildings
Net Rentable Area:	1,020,136 square feet

EXTERIOR

Foundations:	Reinforced concrete slabs, on grade
Frame:	Steel
Exterior Walls:	Brick
Roof:	Flat, modified bitumen
Doors and Windows:	Exterior entrance doors are hollow core metal. Interior doors are hollow core wood. The windows are single-pane glass set in aluminum frames.
HVAC:	Each unit has a combination electric heater/air conditioning unit for which the tenant is responsible for electricity.

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Plumbing:	Kitchens contain sink and dishwasher. Bathrooms contain porcelain toilet and sink and fiberglass bathtub/shower combinations. Hot water is provided by one central gas-fired boiler, located in Building 2.
Electrical:	Property is sub-metered for electric, electricity is paid by the tenant.
Parking and Walkways:	The parking areas and internal roadways are concrete paved. The streets and parking areas have concrete curbs. Walkways are concrete paved. There is adequate on-site parking provided, some of which is covered. Garage units are also available for lease.

INTERIOR

Walls and Ceilings:	Walls are painted sheetrock and the gypsum ceilings are covered with a sprayed-on textured surface.
Floors:	Interior floors are carpet over padding in living areas and bedrooms with sheet vinyl in the kitchens and bathroom.
Kitchen Equipment:	Built-in wood cabinets with laminate counter tops and stainless steel sink. Appliances include a combination range/oven, exhaust fan, dishwasher and refrigerator/freezer.

PROJECT AMENITIES

Security:	No
Swimming Pool:	Yes (3)
Fitness Center:	Yes
Clubroom:	Yes
Tennis Court:	Yes(3)
On-site Management Office:	Yes
Laundry Room:	Yes
Microwave:	In some units
Compactor:	No
Fireplace:	No
Ceiling Fans:	In living area
Cable TV:	Yes
Balconies/Patios:	Yes
Perimeter Fencing:	Yes
Access Controlled Entry:	Yes
Other:	Covered and garage parking, washer/dryer connections, indoor spa and sauna, jogging/bike trail.

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

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RIVERSIDE PARK APARTMENTS – UNIT MIX

Unit Type	Mix		Size (SF)		Total Area (SF)
Studio		14		300		4,200
Studio		140		500		70,000
Studio		70		550		38,500
1-bedroom		741		832		616,512
2-bedroom		257		1,132		290,924
Totals/Average		1,222		835		1,020,136

CONDITION/MAINTENANCE

Overall Condition:	Average
Landscaping:	Good
Parking:	Adequate
Sidewalks/Curbs:	Average
Walls/Fences:	Average
Refuse Area:	Average
Basement:	N/A
Health Club:	Average
Club Room:	Average
Exterior Walls:	Good
Roofs:	Average
Stairs:	Average
Lobby/Hallways:	Average
Entry Doors:	Average
Patios/Balconies:	Average
Elevators:	N/A
Apartment Interiors:
Overall:	Average
Kitchen Equipment:	Good
Mechanical Equipment:	Average
Bathroom:	Average
Walls/Ceilings:	Average
Layout:	Average
Light and View Quality:	Average
Cosmetic Repairs:	Our physical inspection revealed that the subject property is in average condition.

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Deferred Maintenance:	No material elements of deferred maintenance were noted during the appraiser’s inspection of the property and on-site management reported none.
Comparability:	Similar to competing properties of the same vintage.
Observed Effective Age:	20 years (similar to the actual age of the improvements)
Economic Life:	45 years (per Marshall Valuation Service Manuel)
Remaining Economic Life:	25 years
General Comments:	Based on our inspection, the subject property is considered to be of average quality construction and to be in average condition overall. It competes effectively with other properties of the same vintage.

APARTMENT MARKET OVERVIEW

MACROMARKET OVERVIEW

The following apartment market analysis is designed to provide the reader an understanding of the Washington, DC area apartment market. According to 2005 M/PF YieldStar Report, Washington, DC is among the nation’s top-tier apartment market performers, and remains a Grade A in its raking system. (Each market receives a letter grade of A, B or C). Here, a Grade A ranking means maintaining the solid fundamentals seen recently.

The Washington, DC apartment market continues to cruise along, maintaining its Grade A rating for 2005. However, the metro’s future momentum score is not a impressive as its current status score, primarily reflecting that ongoing construction is fairly aggressive compared to the volume of product that will be delivered in most other markets.

Properties now underway in greater Washington total just over 10,000 which will inflate the metro’s existing inventory by 2 percent. The volume of apartments scheduled for near-term delivery actually had been considerably higher than that 10,000-unit figure, but quite a few of the projects that started construction announced as apartment developments now are planning market entry as condominiums. Most of the properties that switched from apartment to condo status are located within the District or in the closer-in Virginia suburbs.

Late 2004 occupancy in metro Washington stood at 96 percent. Top-performing neighborhoods – all with occupancy rates over the 97 percent mark – included the District plus the northern Virginia cluster of North Arlington County, Central Fairfax County and Southwest Fairfax County. The one comparatively soft spot for occupancy in late 2004 was Rockville/Gaithersburg, which recorded occupancy below 93 percent.

Effective rents in Washington, DC climbed nearly 4 percent over the past year. The biggest increases were in Reston/Herndon at nearly 9 percent and both North and South Arlington County at about 6 percent. Struggling to catch up in terms of occupancy, Rockville/Gaithersburg likewise was the weak link in terms of rent performance: effective rates dropped about 1 percent on a year-over-year basis.

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MICROMARKET OVERVIEW

The appraisers surveyed four competitive properties in the immediate vicinity of the subject property. These properties are outlined in detail in the forthcoming Economic Rent Analysis section of this report. The occupancy levels reported for these properties range from 95% to 97% as presented in the following chart. The weighted average occupancy of the sampling surveyed equates to 96%.

SUMMARY OF COMPETITIVE OCCUAPNCY LEVELS

Property Name	No. of Units		Occupancy
Belle Haven Towers		569		96	%
London Park Towers		458		94	%
3001 Park Center Apartments		325		95	%
Foxchase Apartments		423		96	%
Total/Avg		441		95	%

The subject’s immediate market area is a strong performer in comparison to overall market trends realized in the greater Washington DC region. The subject’s specific location benefits from its proximity to employment centers, services, regional transportation network and public transportation. The future prospects for rental housing in the influencing area are positive.

ECONOMIC RENT ANALYSIS

Four competitive properties follow. They are located in the influencing area of the subject property and define the range of property type and rents available. The information regarding the rent comparables was obtained through physical inspections and interviews of rental agents and property managers. The rents commanded by competitive properties in the influencing area are utilized to determine the economic rent potential for the subject property.

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Rent Comparable #1
Address:	Belle Haven Towers
	6034 Richmond Highway
	Alexandria, Virginia
Number of Units:	569
Year Built:	1970 +/-
Description:	Six story mid-rise apartment building with bitumen roof and asphalt- paved parking area.
Amenities:	Apartment features include electric kitchen appliances, eat-in kitchens, mini-blinds, patio/balcony and large closets. Property features include a pool, tennis court, laundry facilities and on-site management.

Rental Data:

Unit Type	Bathrooms		SF		Monthly Rent		Rent PSF
Studio		1		366	$	828	$	2.26
1-bedroom		1		540	$	1,005	$	1.86
1-bedroom		1		655	$	960	$	1.47
2-bedroom		1		754	$	994	$	1.32
2-bedroom		1		760	$	1,083	$	1.43
2-bedroom		1		790	$	1,130	$	1.43
2-bedroom		1		845	$	1,200	$	1.42
2-bedroom		1.5		894	$	1,248	$	1.40
2-bedroom		1		1,168	$	1,385	$	1.19
2-bedroom		2		1,168	$	1,472	$	1.26
Average				794	$	1,131	$	1.42

Occupancy:	96%
Concessions:	None
Comments:	This property is located less than 1/2 mile southwest of the subject property. The above rents represent average rents. Carpeted units have higher rents, new kitchen cabinets and appliances. Gas and water are included in rent. This property is similar to the subject property in terms of location and amenities; however, in terms of physical characteristics it is rated as being superior.

Riverside Park Apartments
Alexandria, Virginia November 23, 2005
Page 19

Rent Comparable #2
Address:	London Park Towers
	5375 Duke Street
	Alexandria, Virginia
No. of Units	458
Year Built:	1963
Description:	Mid-rise apartment with three 16 story buildings, brick exterior walls, bitumen roofs and asphalt-paved parking area.
Amenities:	Apartment features include kitchen appliances, patio/balconies, ceiling fans, washer/dryer, and fireplaces. Community features include controlled community access, pool (2), Jacuzzi, fitness center, tennis court, paved fitness trails, and on-site management.
Rental Data:

Unit Type	Bathrooms		SF		Monthly Rent		Rent PSF
Studio		1.0		650	$	932	$	1.43
1-bedroom		1.0		800	$	1,094	$	1.37
2-bedroom		2.0		1,000	$	1,475	$	1.48
3-bedroom		2.0		1,200	$	1,660	$	1.38
Average				889	$	1,290	$	1.45

Occupancy:	94%
Concessions:	$500 off first month rent on a 2BR 2BA apartment
Comments:	This property is located 3.5 miles northwest of the subject property off of Interstate 395. Its location at a heavily traveled intersection is superior to the subject property. It is similar to the subject property in terms of age and physical characteristics.

Riverside Park Apartments
Alexandria, Virginia November 23, 2005
Page 20

Rent Comparable #3
Address:	3001 Park Center Apartments
	3001 Park Center Drive
	Alexandria, Virginia
Number of Units:	325
Age:	1989
Description:	Two, 12-story mid-rise apartment buildings with brick exterior walls, bitumen roof and asphalt-paved parking.
Amenities:	Apartment features include electric kitchen appliances, washer and dryer, patio/balcony, mini-blinds, and walk-in closets. Property features include pool, Jacuzzi, sauna, tennis court, fitness center, clubhouse, and on-site management.
Rental Data:

Unit Type	Bathrooms		SF		Monthly Rent		Rent PSF
Studio		1.0		650	$	1,149	$	1.77
1-bedroom		1.0		850	$	1,436	$	1.69
2-bedroom		2.0		1,196	$	1,596	$	1.33
2-bedroom		2.0		1,027	$	1,685	$	1.64
2-bedroom		2.0		1,134	$	1,728	$	1.52
2-bedroom		2.0		1,378	$	1,935	$	1.40
Average				1,039	$	1,588	$	1.53

Occupancy:	95%
Concessions:	None
Comments:	This property is located four miles northwest of the subject property. Its location is similar to the subject property in terms of visibility off of a heavier traveled roadway. It is located in a slightly inferior location, but is in superior condition by virtue of its more recent construction.

Riverside Park Apartments
Alexandria, Virginia November 23, 2005
Page 21

Rent Comparable #4
Address	Foxchase Apartments
	320 North Jordan Street
	Alexandria, Virginia
Number of Units:	423
Age:	1970 +/-
Description:	Garden-style apartment complex with brick exterior walls, composition asphalt roofs, and asphalt paved surface parking.
Amenities:	Apartment features include kitchen appliances, storage units, ceiling fans and patio/balcony. Property features include fitness centers (3), swimming pools (4), tennis courts (8) swimming pool, playground, and on-site management.
Rental Data:

Unit Type	Bathrooms		SF		Monthly Rent		Rent PSF
Studio		1.0		460	$	939	$	2.04
1-bedroom		1.0		585	$	1,024	$	1.75
2-bedroom		2.0		1,100	$	1,475	$	1.34
2-bedroom		2.5		1,160	$	1,575	$	1.36
Average				826	$	1,253	$	1.52

Occupancy:	96%
Concessions:	None
Comments:	This property is situated one mile north of Old Town Alexandria, about two miles northwest of the subject. It is rated as being superior to the subject in terms of age and physical appearance.

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Alexandria, Virginia	Page 22

ANALYSIS

The subject property is situated in a good suburban Washington, DC location off of Route 1, also known as Richmond Highway, approximately ¹/2 mile South of Interstate 95. It is competitive with other properties in terms of location, condition, amenities, and unit size. The tables below illustrate the comparables with the most similar floor plans in relation to the subject’s floor plans.

STUDIOS

Property	Unit Type	SF		Monthly Rent		Rent PSF
Subject	Studio		300	$	815	$	2.72
Subject	Studio		500	$	807	$	1.61
Subject	Studio		550	$	850	$	1.55
Belle Haven Towers	Studio		366	$	828	$	2.26
London Park Towers	Studio		650	$	932	$	1.43
3001 Park Center	Studio		650	$	1,149	$	1.77
Foxchase	Studio		460	$	939	$	2.04

ONE-BEDROOM FLOOR PLANS

Property	Unit Type	SF		Monthly Rent		Rent PSF
Subject	1-bedroom		832	$	984	$	1.18
Belle Haven Towers	1-bedroom		754	$	994	$	1.32
Belle Haven Towers	1-bedroom		760	$	960	$	1.26
London Park Towers	1-bedroom		800	$	1,094	$	1.37
3001 Park Center	1-bedroom		850	$	1,436	$	1.69
Foxchase	1-bedroom		585	$	1,024	$	1.75

TWO-BEDROOM FLOOR PLANS

Property	Unit Type	SF		Monthly Rent		Rent PSF
Subject	2-bedroom		1,132	$	1,289	$	1.14
Belle Haven Towers	2-bedroom		894	$	1,248	$	1.40
Belle Haven Towers	2-bedroom		1,168	$	1,385	$	1.19
London Park Towers	2-bedroom		1,000	$	1,475	$	1.48
3001 Park Center	2-bedroom		1,196	$	1,596	$	1.33
3001 Park Center	2-bedroom		1,134	$	1,728	$	1.52
Foxchase	2-bedroom		1,100	$	1,475	$	1.34

The subject is most similar to the Belle Haven Apartments in terms of location, age and physical attributes. The subject is inferior to London Park Towers, 3001 Park Center and Foxchase in terms of overall physical condition and appeal to market. The comparable properties tend to overstate the units size for marketing purposes, as such the comparables generally require downward adjustments for unit size as unit size does not appear to be an influencing factor in this market. In general, the subject’s rental rates should be aligned below the rents demonstrated by the comparables.

As indicated above, the rent for the subject’s one and two bedroom floor plans are appropriately below the range of rents illustrated by the comparable properties. Based on a review of market rental data and rents actually commanded at the subject property, the subject’s studios, one and two bedroom quoted rent structure appears reasonable.

Based upon the rents illustrated by the competing properties and rent actually commanded by the subject property, the following rents will be processed as the property’s economic rent potential for valuation purposes. The following table summarizes the economic rent structure estimated for the subject property.

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Alexandria, Virginia	Page 23

ECONOMIC RENT POTENTIAL

Unit Type	Mix		Size (SF)		Quoted Rent		Total Rent		Annual Rent
Studio		14		300	$	815	$	11,410	$	136,920
Studio		140		500	$	807	$	112,980	$	1,355,760
Studio		70		550	$	850	$	59,500	$	714,000
1-bedroom		741		832	$	984	$	729,144	$	8,749,728
2-bedroom		257		1,132	$	1,289	$	331,273	$	3,975,276
Totals/Average		1,222		835	$	1,018	$	1,244,307	$	14,931,684

HIGHEST AND BEST USE

HIGHEST AND BEST USE AS IF VACANT

Surrounding Land Uses	Predominately multifamily developments along Huntington Avenue and single-family residential subdivisions to the west. Multifamily developments are also prevalent along the Richmond Highway frontage to the east.
Physically Possible	Being situated on a heavier traveled neighborhood collector street, the subject site benefits from visibility to traffic and enjoys good accessibility. Multifamily use would benefit from the site’s exposure to passing traffic.
Legally Permissible	Multifamily use is the intended use of the site.
Financial Feasible	Multifamily development has been occurring throughout the Washington, DC area over the past ten years. The number of new units projected to be brought to market this year is the highest it has been for well over a decade. Given the continued growth of federal government, demand for new housing is expected to continue to be strong.
Conclusion	Multifamily Development

HIGHEST AND BEST USE AS IMPROVED

Current Improvements	The subject property is improved with a 1,222-unit multifamily apartment complex. The existing improvements contribute significantly to overall property value indicating that the value of the improved property greatly exceeds the value of the site assuming it to be vacant.
Conclusion	Continued use of the existing improvements

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Alexandria, Virginia	Page 24

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. As numerous sales of properties similar to the subject have occurred in the Hampton Roads area, 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 Fee Simple 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.

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Alexandria, Virginia	Page 25

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.

Revenue: As presented in the Economic Rent Analysis section of this report, the monthly economic rent potential is estimated at $1,244,307. The annual gross rent potential estimated for the apartment units total $14,931,684.

Loss to Lease: Loss to lease considers a loss in income due to leases in effect, whereby effective rental rates are lower than asking, or market, rental rates. As a percentage of the property’s gross rent potential, the historical loss to lease was less than 0.5% in 2002 and increased to 4.4% in 2003, and 5.4% in 2004. Based on the most recent history at the subject property, we have deducted a loss to lease expense of 5.0% of the potential gross income or $746,584.

Vacancy and Credit Loss: The subject property was in the process of being renovated. As of the date of inspection, had 142 “down” units that were being renovated. Excluding these units, the subject occupancy was of 89%. At the client’s request, we have appraised the subject assuming all of the units are available for lease and in similar condition to the remaining units.

For the years 2002, 2003 and 2004 the average occupancy at the subject property was 93%, 95% and 94%, respectively. Properties identified as income comparables within the Economic Rent Analysis section of this report illustrate occupancy levels that range from 94 % to 96%.

Based on the subject’s historical and current level of occupancy, tempered against the weighted average occupancy reported by competing properties in the influencing area, a vacancy factor of 6.0% is estimated for the subject property. In addition, a 1.0% allowance for credit loss is assessed. The combined vacancy and credit loss allowance equates to 7.0%.

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Alexandria, Virginia	Page 26

Concessions: Rent concessions in the market are prevalent in an attempt to bolster occupancy at area apartments. Concessions usually consist of reduced or free rent over a portion of the lease term. As a percentage of the property’s gross rent potential, concessions amounted to 0.8% in 2002, 0.3% in 2003 and 0.6% in 2004. On a stabilized basis, concessions are projected at 0.5% of the estimated gross rent potential or $74,663.

Utility Income: Included in this category is the revenue received from tenants paying or reimbursing ownership for their share of electricity usage, including electricity used to power heating and air conditioning systems in each unit. Based on the historical and budgeted utility income receipts, we have estimated Utility Income to be $879,840, or $720 per unit.

Total Ancillary/Miscellaneous Income: This is income that comes from laundry machines, vending machines, cable TV, and leasing of the rooftop antenna. Also included within this category is the revenue received from such items as application fees, forfeited deposits, and late fees. In addition, this category includes corporate housing and commercial rent. For the years 2002, 2003 and 2004 ancillary income equated to 5.2%, 5.5% and 5.4% of gross potential rent, respectively. Based on historical income, we have estimated ancillary income at 5.0% of gross potential rent, or $746,584.

Expenses: In order to project expenses for valuation purposes, the expenses historically incurred in the operation of the subject property have been reviewed. The operating budget for the current year has also been considered. Typical operating expenses for garden apartments in the Washington, DC area, as reported by IREM have been reviewed and analyzed. The following table summarizes the operating history for the subject property and outlines the operating budget for the current year.

SUMMARY OF OPERATING HISTORY AND BUDGET – RIVERSIDE PARK APARTMENTS

	Year End 2002						Year End 2003						Year End 2004						Year to Date 9/2005
	Total			Per Unit			Total			Per Unit			Total			Per Unit			Total			Per Unit
INCOME:
Gross Potential Rent	$	13,583,384		$	11,116		$	13,881,645		$	11,360		$	14,361,202		$	11,752		$	14,455,451		$	11,829
Loss to Lease	$	(47,656	)	$	(39	)	$	(612,153	)	$	(501	)	$	(777,225	)	$	(636	)	$	0		$	0
Vacancy/Collection Loss	$	(890,406	)	$	(729	)	$	(718,953	)	$	(588	)	$	(872,173	)	$	(714	)	$	(1,982,440	)	$	(1,622	)
Concessions	$	(112,336	)	$	(92	)	$	(47,694	)	$	(39	)	$	(82,017	)	$	(67	)	$	(443,060	)	$	(363	)
Utility Recovery	$	845,334		$	692		$	816,564		$	668		$	857,083		$	701		$	961,192		$	787
Other Income	$	706,901		$	578		$	769,988		$	630		$	779,032		$	638		$	656,417		$	537
Total Property Income	$	14,085,221		$	11,526		$	14,089,397		$	11,530		$	14,265,902		$	11,674		$	13,647,560		$	11,168
EXPENSES:
Payroll	$	692,065		$	566		$	800,108		$	655		$	978,500		$	801		$	960,124		$	786
Repairs & Maintenance	$	813,789		$	666		$	1,001,582		$	820		$	1,029,227		$	842		$	1,038,776		$	850
Administration	$	209,584		$	172		$	238,746		$	195		$	221,244		$	181		$	283,723		$	232
Management Fees	$	570,420		$	467		$	565,975		$	463		$	568,003		$	465		$	549,153		$	449
Utilities	$	1,226,263		$	1,003		$	1,413,621		$	1,157		$	1,360,717		$	1,114		$	1,507,719		$	1,234
Turnover Expenses	$	232,748		$	190		$	347,875		$	285		$	339,468		$	278		$	240,005		$	196
Insurance	$	249,179		$	204		$	259,777		$	213		$	286,944		$	235		$	296,032		$	242
Real Estate Taxes	$	867,194		$	710		$	862,760		$	706		$	972,634		$	796		$	911,915		$	746
Marketing/Leasing	$	118,148		$	97		$	161,100		$	132		$	152,819		$	125		$	198,135		$	162
Reserves	$	0		$	0		$	0		$	0		$	0		$	0		$	0		$	0
Total Expenses	$	4,979,390		$	4,075		$	5,651,544		$	4,625		$	5,909,556		$	4,836		$	5,985,581		$	4,898
Net Operating Income	$	9,105,831		$	7,452		$	8,437,853		$	6,905		$	8,356,346		$	6,838		$	7,661,979		$	6,270

Payroll: This expense covers salaries, payroll taxes, and workers compensation insurance for on site management, leasing, and maintenance personnel. The subject property’s year-end 2002, 2003 and 2004 expenses were $692,065, $800,108 and $978,500, or $566, $655 and $801 per unit. The annualized 2005 payroll expenses are $977,600, or $800 per unit. A

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Alexandria, Virginia	Page 27

	payroll expense of $800 per unit, or $977,600 is estimated for the subject property.
Repair & Maintenance:	This category includes supplies and repairs for the HVAC units, electrical, and plumbing, in addition to appliance parts, and contract services. The subject property’s 2002, 2003 and 2004 repairs and maintenance expenses were $813,789 $1,001,582 and $1,029,227 or $666 $820 and $842 per unit, respectively. The annualized 2005 repair and maintenance expense is $1,038,776, or $850 per unit. The repairs and maintenance expense is estimated at $850 per unit, or $1,038,700.
Administrative Office	Administrative office expenses, telephone, management unit expenses, computer maintenance and supplies, professional fees and miscellaneous expenses are covered in this category. The subject property’s 2002, 2003 and 2004 administrative expenses were $209,584, $238,746 and $221,244 or $172, $195 and $181 per unit. The annualized 2005 expense is $283,723, or $232 per unit. Based on the actual administrative expenses for the subject property, the appraisers have estimated this expense at $195 per unit, or $238,290.
Management	A typical management fee on a property of this type is 3% to 4% of the effective gross income. A market-oriented fee of 4.0% is considered reasonable. Based on the preceding estimate of Effective Gross Income, the subject’s management fee is estimated to be $587,666 or $481 per unit.
Utilities	The subject property’s 2002, 2003 and 2004 utilities expense were $1,226,263 $1,413,621 and $1,360,717 or $1,003, $1,157 and $1,114 per unit. The annualized 2005 expense is $1,507,719, or $1,234 per unit. Utilities are estimated at $1,200 per unit, or $1,466,400.
Turnover Expenses	Included in this category is the cost of painting, carpet cleaning, counter-top re-surfacing, etc., on apartment units as they are vacated and released to new tenants. The subject property’s 2002, 2003 and 2004 turnover expenses were $232,748 $347,875 and $339,468 or $190, $285 and $278 per unit. The annualized 2005 expense is $240,005, or $196 per unit. A turnover expense of $275 per unit, or $336,050 is estimated for the valuation pro forma.
Insurance	This expense item covers the building and includes fire, extended coverage, vehicle, and owner’s liability. The subject property’s 2002, 2003 and 2004 insurance expenses were $249,179 $259,777 and $286,944 or $204, $213 and $235 per unit. The annualized 2005 expense equates to $296,032, or $242 per unit. An insurance expense of $240 per unit is estimated.
Taxes	As discussed in the Real Estate Tax section, the tax burden for the 2004-2005 tax period is estimated at $972,000 or $795 per unit.

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Alexandria, Virginia	Page 28

Marketing	Included in this category are all newspaper and printed advertising, payments to locator services, leasing commissions, and resident referrals. The subject property’s 2002, 2003 and 2004 advertising expenses were $118,148, $161,100 and $152,819 or $97, $132 and $125 per unit, respectively. A marketing expense of $130 per unit, or $158,860 is estimated for the subject property.
Reserves for Replacements	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. Reserves for replacement for a property of this vintage typically range from $200 to $300 per unit. A reserve for replacement allowance of $300 per unit, or $366,600 is estimated for the subject property.
Total Expenses	Total expenses have been estimated at $6,435,446 or $5,266 per unit inclusive of reserves. The subject property’s projected operating expenses (exclusive of reserves and adjusting for taxes) is appropriately aligned with the range exhibited by the comparable expenses. The resulting operating expense ratio equates to approximately 43.8%.
Net Operating Income	The Net Operating Income is that amount of the income remaining after paying all operating expenses. This affords the owner capital to satisfy debt service, if any, and provide a return on owner’s equity. We have estimated the NOI to be $8,256,197. The subject’s income and expense pro forma is summarized below (numbers rounded where applicable).

OPERATING PRO FORMA

	Pro Forma			Per Unit
Gross Potential Rent	$	14,931,684		$	12,219
Loss to Lease	($	746,584	)	($	611	)
Vacancy/Collection Loss	($	1,045,218	)	($	855	)
Concessions	($	74,663	)	($	61	)
Utility Recovery	$	879,840		$	720
Other Income	$	746,584		$	611
Total Property Income	$	14,691,643		$	12,023
Payroll	$	977,600		$	800
Repairs & Maintenance	$	1,038,700		$	850
Administration	$	238,290		$	195
Management Fees	$	587,666		$	481
Utilities	$	1,466,400		$	1,200
Turnover Expenses	$	336,050		$	275
Insurance	$	293,280		$	240
Real Estate Taxes	$	972,000		$	795
Marketing/Leasing	$	158,860		$	130
Reserves	$	366,600		$	300
Total Expenses	$	6,435,446		$	5,266
Net Operating Income	$	8,256,197		$	6,756

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.

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Alexandria, Virginia	Page 29

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.
Market Extraction	The following table summarizes the market derived overall rates. The sales are further detailed in the Sales Comparison Approach.

SUMMARY OF MARKET DERIVED OVERALL RATES

	Sale 1	Sale 2	Sale 3	Sale 4	Sale 5
Name	The Alexandria	Reserve at Park Place	Montclair	Castlegate	Ashford at Woodlake
Sale Date	30-Jul-05	25-Mar-05	10-Feb-04	23-Dec-03	26-Feb-04
YOC	1967	1971	1987	1980	1971
OAR	6.6%	6.1%	7.0%	8.0%	10.1%

The sales exhibit overall rates that range from 6.1% to 10.1% and produce an average of 7.6%. The sales represent recent transactions of apartment complexes that are similar in location and amenities to the subject. The comparable properties are situated in locations that demonstrate generally similar demographic characteristics of the subject neighborhood. The capitalization rates indicated by the sales data are representative of an appropriate rate that would be applicable to the subject property. Based on the most recent indicators exhibited by market data, a capitalization rate in the range of approximately 6.5% to 7.0% is suggested. A rate of 6.75% is concluded.

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 3rd Quarter 2005 Korpacz Real Estate Investor Survey, prepared by Price Waterhouse Coopers, capitalization rates for institutional grade apartment properties range from 4.0% to 8.0% with an average of 6.28%. According to the same survey, non-institutional grade properties exhibit a range of cap rates of 4.5% to 10.5% with an average of 7.48%. The subject property is an older, Class “B“ property located in an average submarket. Although not a newer Class “A”, institutional grade property, the subject property would likely appeal to a multitude of national and regional investors. An appropriate capitalization rate for the subject property would likely fall within the range indicated by the average rates for institutional and non-institutional grade properties or in the range of approximately 6.3% to 7.5%.

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Page 30

Conclusion Based on the indicators exhibited by the sales data and confirmed through review of investor surveys, an appropriate cap rate for the subject property is concluded to be 6.75%.

Valuation: Capitalizing the estimated Net Operating Income of $8,301,185 by a 6.75% rate results in a value conclusion of $122,300,000, rounded $8,256,197 NOI ÷ 6.75% OAR = $122,314,030).

Final Value: $ 122,300,000

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 multifamily apartment building sales, which are summarized in the following table, have been examined and analyzed. All of the sales are apartments within the influencing area of the subject property. The appraisal indicators exhibited by the sales data outlined in the following chart are utilized for purposes of estimating a value for the subject via the Sale Comparison Approach.

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: This approach relies on an active market. Sufficient data from the Washington DC area exists to formulate a value via the Sales Comparison Approach. Below are four sale comparables of similar vintage garden style apartments with similar characteristics to the subject property.

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Page 31

SUMMARY OF COMPARABLE BUILDING SALES

Project Name	The Alexandria	Reserve at Park Place	Montclair	Castlegate	Skyline Towers
Sale No.	1	2	3	4	5
Address	140 South Van Dorn	5802 Annapolis Road	3505 Sheffield Manor	13803 Castle Blvd.	5597 Seminary Rd.
Location	Alexandria, VA	Bladensburg, MD	Silver Springs, MD	Silver Springs, MD	Alexandria, VA
Sale Price	$195,000,000	$28,000,000	$27,250,000	$ $32,900,000	$113,750,000
Date of Sale	07/30/05	03/25/05	02/10/04	12/23/03	12/19/02
Year Built	1967	1971	1987	1980	1971
No. of Units	1,524	449	256	374	939
No. of Stories	14.0	10.0	3.0	3.0	26.0
Net Rentable Area (NRA)	1,447,800	362,136	235,616	372,512	1,365,700
Average Unit Size (SF)	950	807	920	996	1,454
Operating Expense Ratio	36.4%	55.8%	39.6%	40.5%	$14,014,668
Overall Capitalization Rate	6.56%	6.10%	7.01%	8.00%	$6,336,543
EGIM	9.69	7.25	8.61	7.44	$7,678,125
NOI Per Unit	$8,400	$3,801	$7,462	$7,037	45.2%
NOI Per SF	$8.84	$4.71	$8.11	$7.07	6.75%
Price per Unit	$127,953	$62,361	$106,445	$87,968	8.12
Price per Sq. Ft. (GLA)	$134.69	$77.32	$115.65	$88.32	$8,177

The unit of comparison used in this analysis was the price per unit and all the sales were analyzed on this basis. The sales indicate per unit prices ranging from $62,361 to $127,953. All of the comparables represent sales of apartments that are of similar construction componentry as the subject. All of the sales are generally similar to the subject with respect their age, condition and amenities. Situated in throughout the Washington, DC metro area, the primary difference between the comparables and the subject are location, age and condition, and average unit size. The most value influencing difference between the subject and the comparable sales is location.

In this analysis we have adjusted the sale price of the comparables based on these factors. The following table summarizes the adjustments made to the comparable sales:

Sale No.	1	2	3	4	5
Name	The Alexandria	Reserve at Park Place	Montclair	Castlegate	Skyline Towers
Location	140 South Van Dorn Alexandria, VA	5802 Annapolis Road Bladensburg, MD	3505 Sheffield Manor Silver Springs, MD	13803 Castle Blvd. Silver Springs, MD	5597 Seminary Rd. Alexandria, VA
Sale Date	30-Jul-05	25-Mar-05	10-Feb-04	23-Dec-03	19-Dec-02
Sale Price	$195,000,000	$28,000,000	$27,250,000	$32,900,000	$113,750,000
No. of Units	1,524	449	256	374	939
Average Unit Size	950	807	920	996	1,454
Year Built	1967	1971	1987	1980	1971
Price per Unit	$127,953	$62,361	$106,445	$87,968	$121,140
Adjustments Time	0%	0%	0%	0%	0%
Time Adjusted Price per Unit	$127,953	$62,361	$106,445	$87,968	$121,140
Location	-10.0%	30.0%	20.0%	20.0%	0.0%
Age/Condition/Quality	0.0%	0.0%	-10.0%	-5.0%	0.0%
No. of Units	0.0%	0.0%	0.0%	0.0%	0.0%
Unit Size	-10.0%	0.0%	-10.0%	-10.0%	-15.0%
Total Adjustments (%)	-20.0%	30.0%	0.0%	5.0%	-15.0%
Adjusted Price per Unit	$102,362	$81,069	$106,445	$92,366	$102,969

The adjusted per unit indicators fall within a tighter range than the unadjusted per unit prices. After adjustments, the comparable sales developed a range of $81,069 to $106,445 per unit with an average adjusted sales price of $97,042 per unit. Sale Nos. 1 and 5 are the most similar to the subject in terms of location and overall physical characteristic. Emphasizing these sales, a value indicator of $100,000 per unit is considered appropriate. Thus, a current value conclusion of $122,000,000 is suggested for the subject. This amount is supported by the comparable sales.

1,222 units x $100,000 per unit average = $122,200,000, or $122,000,000 rounded

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Page 32

As such, the Market Value of the subject property’s Fee Simple Interest via the Sales Comparison Approach is therefore estimated at:

Value via the Sales Comparison Approach $ 122,000,000

RECONCILIATION

Cost Approach		N/A
Income Capitalization Approach	$	122,300,000
Sales Comparison Approach	$	122,000,000

Income and Sales 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. The local market is active in terms of investment sales of similar apartment complexes and sufficient sales data was available to develop a defensible value via the Sales Comparison Approach. The value derived through use of the Sales Comparison Approach supports the value concluded for the property via the Income Capitalization Approach. Due to the income producing nature of the subject property, the results of the Income Capitalization Approach are emphasized.

FINAL ESTIMATE OF VALUE $ 122,300,000

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

ADDENDA

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

SUBJECT PHOTOGRAPHS

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

SUBJECT PROPERTY FACING NORTH

VIEW OF SUBJECT BUILDINGS AND PARKING AREAS

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

SUBJECT LEASING OFFICE

INTERIOR OF TYPICAL LOBBY

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

INTERIOR OF TYPICAL UNIT (3BR)

INTERIOR OF TYPICAL KITCHEN (3BR)

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

SWIMMING POOL AND TENNIS COURTS

FACING NORTH FROM HUNTINGTON AVENUE

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

COMPARABLE RENTAL PHOTOGRAPHS

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

COMPARABLE NO. 1 – FOXCHASE

COMPARABLE NO. 2 – BELLE HAVEN

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

COMPARABLE NO. 3 – HUNTINGTON GATEWAY

COMPARABLE NO. 4 – MT. VERNON

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

COMPARABLE SALE PHOTOGRAPHS

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

Sale No. 1 — The Alexandria

Sale No. 2— Reserve at Park Place

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

Sale No. 3 — Montclair

Sale No. 4 — Castlegate

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

Sale No. 5 — Skyline Towers

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

REGIONAL LOCATION MAP

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

NEIGHBORHOOD MAP

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

COMPARABLE RENTALS MAP

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

COMPARABLE SALES MAP

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

QUALIFICATIONS

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

STEVEN J. GOLDBERG, MAI, CCIM
SENIOR VICE PRESIDENT

STEVEN J. GOLDBERG is Manager of the Dallas Appraisal Division of KTR Newmark Real Estate Services LLC. His responsibilities include staff supervision, appraisal management, maintaining product quality, marketing and client development. In his current capacity, Mr. Goldberg oversees all valuation assignments involving real estate assets located in the Southwest region.

Mr. Goldberg has over 22 years of nationwide experience in real estate valuation, investment analysis and evaluation consultation. He has performed appraisals throughout the United States and has extensive experience in most markets situated in the Southwest and Southeast regions of the country. Mr. Goldberg’s particular area of expertise is in the appraisal and analysis of multifamily apartment projects. In addition to his expertise in the multifamily market, Mr. Goldberg has extensive experience in the appraisal of other income-producing properties including office buildings, retail properties, lodging facilities, industrial properties and mixed-use projects.

Mr. Goldberg has performed marketability, consultation and feasibility reports, has served as an expert witness and has testified in various state and federal courts. These activities have been performed on behalf of real estate investors, life insurance companies, pension funds, investment banking firms, foreign and domestic financial institutions, mortgage bankers, conduit lenders, real estate advisors, law firms and governmental agencies.

Mr. Goldberg received his Bachelor of Business Administration Degree from the University of Texas in Austin, with major concentrations in both Finance and Real Estate/Urban Land Development. He is a designated member of the Appraisal Institute and the Commercial Investment Real Estate Institute having been awarded the MAI designation in 1989 and the CCIM designation in 1994. He has attended numerous continuing education courses and has completed the requirements under the continuing education program of the Appraisal Institute.

Mr. Goldberg is state certified as a General Real Estate Appraiser in Texas and Arizona. He is also a licensed Real Estate Broker in the State of Texas. He is affiliated with the North Texas Commercial Association of Realtors, International Council of Shopping Centers and Mortgage Bankers Association.

Riverside Park Apartments	November 23, 2005
Alexandria, Virginia	Addenda

QUALIFICATIONS OF THE APPRAISER
JACKSON L. AILLS

Jackson L. Aills is an associate of the Dallas Valuation Division for KTR Newmark Real Estate Services LLC (KTR). Mr. Aills has experience in the appraisal of a wide variety of property types, including retail, industrial, office, condominium units, multi-family projects and residential subdivisions. Analyses of special purpose properties have included automobile dealerships, churches, financial branch facilities, nursing homes, assisted living and residential care facilities, truck terminals, hotel developments, self-storage facilities and apartments. Appraisal reports have been utilized for mortgage underwriting, litigation, feasibility analyses, and corporate management decisions.

National appraisal assignments have included properties in Florida, South Carolina, North Carolina, Arkansas, California, Colorado, Georgia, Illinois, Iowa, Louisiana, Massachusetts, Mississippi, Tennessee, Oklahoma, Texas and Washington.

Mr. Aills has previous real estate background with Realty Services International, Inc., MortgageRamp, Inc., and the Nation Appraisal Group.

Mr. Aills is certified as a General Real Estate Appraiser in the states of Texas (TX-1326637-G). Mr. Aills has a Bachelor of Business Administration in General Business from the University of Mississippi, Oxford, Mississippi. Mr. Aills has completed all Level I course work offered by the Appraisal Institute including Real Estate Principles, Basic Valuation Procedures, Capitalization Theory and Techniques, (Part A and B), Case Studies in Real Estate Valuation, Report Writing and Valuation Analysis, Standards of Professional Practice; and Rates, Litigation Valuation Overview.

Professional designations and memberships include Candidate for Member of Appraisal Institute (MAI), North Texas Chapter of the Appraisal Institute and Certified General Real Estate Appraiser in Texas.

EX-99.(C)(2)

Exhibit (c)(2)

APPRAISAL

of

RIVERSIDE PARK APARTMENTS
2000 Huntington Avenue, Alexandria (outside)
Fairfax County, VA 22303

Date of Valuation
May 25, 2006

Prepared by

ROBERT D. WRIGHT, MAI
MULTIFAMILY VALUATIONS
Eleven South Brookside Road
Springfield, Pennsylvania 19064 • (610) 543-0303

ROBERT D. WRIGHT, MAI

MULTIFAMILY VALUATIONS

June 28, 2006

Scott Kyriakakis
Reilly Mortgage Group, Inc.
2010 Corporate Ridge Parkway, Suite 1000
McLean, VA 22102

     REFERENCE: RIVERSIDE PARK APARTMENTS
2000 Huntington Avenue, Alexandria (outside)
Fairfax County, VA 22303
1,222 apartment units plus commercial retail and office space

Dear Mr. Kyriakakis:

In accordance with your request, I have prepared an appraisal of the captioned property. The purpose of the appraisal was to estimate the Market Value of the subject property as currently operated as a rental apartment project as of May 25, 2006. The subject property is currently being readied for a major renovation plan that will re-position the subject property. Per the client/lender’s request, the subject property has been appraised assuming habitable condition with stabilized occupancy. This report has been prepared in conformance with the Code of Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute and the Appraisal Foundation. This report has also been prepared in accordance with Freddie Mac appraisal guidelines and the appraisal requirements of Reilly Mortgage Group, Inc. Neither the assignment to make this appraisal nor the compensation for it is contingent upon the appraised value of the subject. This is a complete appraisal transmitted in a self-contained narrative format.

Based upon an inspection of the subject, a review of available operating history and in consideration of local market data, the subject’s estimated Market Value as of May 25, 2006 assuming habitable condition with stabilized occupancy is:

ONE HUNDRED FORTY NINE MILLION DOLLARS
($ 149,000,000)

A substantial renovation of the subject is in process. This appraisal assumes habitable condition prior to renovation in accordance with the client’s request. The cost to complete the renovation of units already gutted for rehabilitation is not considered herein. It is noted that the subject’s actual physical vacancy rate (20.6%) was elevated as of the date of inspection/valuation since the owners had commenced lease terminations to create vacancies for the proposed renovation.

GENERAL APPRAISER CERTIFICATION IN PA, NJ, NY, DE, MD, DC & VA

11 South Brookside Road/Springfield, PA 19064 · (610)543-0303 · Fax (610)543-5978 ·Email: RDW@RobertDWright.com

Scott Kyriakakis	June 28, 2006
Reilly Mortgage Group, Inc.	Page 2 of 2

This appraisal assignment was completed without the benefit of current engineering and environmental site assessment reports. If subsequently completed reports reveal the need for significant immediate repairs or if significant environmentally hazardous conditions exist, this valuation would be adversely impacted.

The estimated exposure time implicit in this value estimate is 6 to 12 months. Definition and support of this value conclusion along with descriptive information and exhibits are contained in the attached narrative report. This appraisal is subject to the certification, limiting conditions and general assumptions included at the end of this report.

Respectfully submitted,

/s/ Robert D. Wright

Robert D. Wright, MAI

VA Certified General Real Estate Appraiser
Certification #4001-001391

TABLE OF CONTENTS

SUMMARY OF SALIENT FACTS & CONCLUSIONS	1
PROPERTY RIGHTS APPRAISED	2
PURPOSE, INTENDED USE AND DATE OF APPRAISAL	2
DEFINITION OF MARKET VALUE	2
SCOPE OF THE APPRAISAL	4
REGIONAL DATA	4
FAIRFAX COUNTY DATA	12
NEIGHBORHOOD DESCRIPTION	20
RENTAL MARKET ANALYSIS	21
THE SUBJECT PROPERTY	28
HIGHEST AND BEST USE	35
VALUATION PREMISE	37
INCOME APPROACH	37
EXPENSE NOTES	59
CONSOLIDATED STATEMENT	66
EXPENSE COMPARABLES	67
CAPITALIZATION	68
SALES COMPARISON APPROACH	70
CORRELATION AND CONCLUSION	80
ESTIMATE OF REASONABLE EXPOSURE TIME	81
GENERAL ASSUMPTIONS	82
LIMITING CONDITIONS	83
CERTIFICATION	84
FREDDIE MAC FORM 439	85
ADDENDA

SUMMARY OF SALIENT FACTS & CONCLUSIONS

Subject Property	Riverside Park 2000 Huntington Avenue Alexandria, VA 22303
County	Fairfax
Census Tract Number	4204.00
Tax Parcel Identification	0833 01 0101
Owner of Record	AIMCO Riverside Park LLC
Land Area (acres)	28.1713	1804 Parking Spaces
Improvements	Three 15-story elevator-served masonry rental apartment towers totaling 1,222 residential units plus ancillary commercial office and retail space. The subject was partially renovated with upgraded kitchens, etc. in the 1980’s
Year Built	1968-70
Overall Condition	Average — “As Is“condition prior to renovation

Unit Mix & Sizes	Type(Bdrm)		# Units		Mix			Avg SF
	Eff/1 Bath			14		1.1	%		289
	Eff/1 Bath			140		11.5	%		500
	Eff/1 Bath			70		5.7	%		550
	1 Bdrm/1 Bath			741		60.6	%		820
	2 Bdrm/2 Bath			257		21.0	%		1,134
	Total			1222
Net Rentable Area		1,011,604	square feet					828 SF/Unit
Total Number of Rooms		4,199						3.4 Rooms/Unit

Date of Inspection	25-May-06
Valuation Premise	The appraiser has estimated the market value of the subject assuming habitable condition on a stabilized basis at market rents and expenses free and clear of existing financing.

Conclusions

Income Approach			$	149,000,000
Potential Gross Income (net of concessions)			$	16,631,175
Vacancy & Collection Losses	6.5	%		(972,269	)
Effective Gross Income				15,658,906
Expenses & Reserves	40.4	%		(6,718,400	)	$5,498 per unit
Net Operating Income			$	8,940,506
Overall Capitalization Rate				6.0	%
Sales Comparison Approach			$	147,900,000
Cost Approach			Not Applied
Final Value Conclusion			$	149,000,000
Value per unit			$	121,931
PGIM				9.0
Overall Rate				6.0	%

This appraisal assignment was completed without the benefit of current engineering and environmental site assessment reports. If subsequently completed reports reveal the need for significant immediate repairs or if significant environmentally hazardous conditions exist, this valuation would be adversely impacted. The subject’s vacancy rate was elevated as of the inspection/valuation date.

RIVERSIDE PARK APARTMENTS 1

PROPERTY RIGHTS APPRAISED

This appraisal is for the fee simple ownership interest in the real property. It is noted that while the subject is operated as a rental apartment project with individual apartment leases encumbering each apartment, these leases have remaining terms of 1 year or less and are at or close to the estimated market rent levels for these units. Since no significant leasehold interest exists at the subject, the value of the leased fee is considered to be equivalent to the fee simple value.

PURPOSE, INTENDED USE AND DATE OF APPRAISAL

The purpose of this appraisal is to provide an opinion of the subject’s market value of the real property in its “As Is” condition assuming assumes habitable condition prior to renovation with stabilized operations as of the effective date of value, May 25, 2006. It is understood that the intended use of this appraisal is for Freddie Mac mortgage underwriting by Reilly Mortgage Group, Inc., the intended user. Other uses of this appraisal are not intended.

DEFINITION OF MARKET VALUE

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, 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:

a)	a buyer and seller are typically motivated;
b)	both parties are well informed or well advised, and acting in what they consider their best interests;
c)	a reasonable time is allowed for exposure in the open market;
d)	payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and
e)	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.

Source: Federal Register, vol. 55, no. 163, August 22, 1990, pages 34228 and 34229.

RIVERSIDE PARK APARTMENTS 2

LOCATION MAP: Riverside Park

SCOPE OF THE APPRAISAL

This appraisal included an interior and exterior inspection of the subject by Robert D. Wright, MAI on May 25, 2005. A total of 25 units were inspected by the appraiser. The appraiser inspected 40 units during a previous inspection in May 2005. Research included field inspection of comparable properties and interviews of rental agents, owners, managers, real estate agents and appraisers. Information was also obtained from sales data services, assessment office records and the appraiser’s personal data files.

The Income Approach and Market Approach have been applied with supporting data. The Cost Approach is not applied since investors and lenders do not typically rely upon this approach for valuation of an older vintage rental project like the subject. The omission of the Cost Approach from this valuation is not considered to weaken the reliability of this appraisal. An Insurable Value has been included in the addenda per the client’s request.

REGIONAL DATA

The subject is located in Fairfax County, VA and has an Alexandria mailing address. This area is part of the Washington, DC metropolitan region which includes areas of Maryland, West Virginia and Northern Virginia comprising about 5,600 square miles. The U.S. Office of Management and Budget defines the Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area (MSA) as including: the District of Columbia; the Maryland counties of Calvert, Charles, Frederick, Montgomery and Prince George’s; the Virginia counties of Arlington, Clarke, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, Stafford and Warren; the West Virginia county of Jefferson; and the Virginia cities of Alexandria, Fairfax City, Falls Church, Fredericksburg, Manassas and Manassas Park. Although separately governed, these cities and counties share common historical, geographic and socioeconomic trends. This region represents the southern end of the densely populated Northeast Corridor, which runs from Washington north to Boston and includes metropolitan Baltimore, Philadelphia, and New York.

The Washington, DC MSA is at the hub of a well-developed highway network that allows access to the major urban centers of the northeast corridor. I-95, a major north-south route, connects with the Washington Beltway, I-495, which encircles the city. Paralleling I-95 northeast of the city is the Baltimore-Washington Parkway. I-95 and the parkway connect the two cities of Baltimore and Washington. I-95 then continues north to Philadelphia, New Jersey and New York. I-95 south of Washington connects with Richmond. Route 50 intersects with New York Avenue and the Beltway and continues east to Annapolis. I-270 northwest of Washington connects with the Beltway in Montgomery County. It connects the city with I-70 in Frederick, Maryland. I-70 continues west to the Pennsylvania Turnpike.

Besides a well-developed highway network, the region is served by an integrated public transportation system administered by the Washington Metropolitan Transit Authority. The centerpiece of the “Metro” system is a modern rapid rail transit network with lines emanating from downtown Washington into the suburbs. Bus routes provide transportation between rail lines and into other parts of the region. Union Station in Washington is a major terminal for inter-city and commuter rail transportation supplied by Amtrak, Maryland Area Rail Company (MARC) and Virginia Rail. Reagan National Airport, Dulles International and Baltimore-Washington International airports all provide air service to the Washington region.

RIVERSIDE PARK APARTMENTS 4

Population

The Washington, DC regional population has grown 27.8% or an average rate of 1.6% per year since 1990. Census data collected in 2000 indicated that population growth in the region has been significantly greater than previously estimated. There are currently about 5.3 million people in the greater Washington, DC area. Following is a summary of population growth within the region:

Washington, DC MSA Population
1980-2011

The District of Columbia is the largest and most densely populated city in the Washington region claiming 11% of the total regional population in 2005. This is down from 15% in 1990. This region has experienced significant expansion into emerging suburban communities such as Prince William and southeastern Loudoun Counties in Virginia and portions of Frederick, Howard, Anne Arundel and Charles Counties in Maryland. This pattern is similar to other older regions of the north and northeast where loss of population in urban areas and an increase in suburban population have occurred. The following table shows the average annual percentage change in population for each of the component areas of the Washington, DC MSA since 1990.

RIVERSIDE PARK APARTMENTS 5

Washington, DC MSA Population 1990-2006

							%/yr.			Density/
County/City	1990		2000		2006		90-06			Square Mile
District of Columbia		606,900		572,059		546,363		-0.7	%		8,957
Calvert County, MD		51,372		74,563		90,418		3.6	%		421
Charles County, MD		101,154		120,546		141,109		2.1	%		307
Frederick County, MD		150,208		195,277		224,502		2.5	%		339
Montgomery County, MD		762,394		873,341		935,134		1.3	%		1,890
Prince George’s County, MD		723,901		801,515		855,332		1.0	%		1,760
Alexandria City, VA		111,526		128,283		132,028		1.1	%		8,802
Arlington County, VA		170,997		189,453		189,755		0.7	%		7,298
Clarke County, VA		12,101		12,652		14,199		1.0	%		81
Fairfax City, VA		20,065		21,498		23,098		0.9	%		3,850
Fairfax County, VA		817,677		969,749		1,017,547		1.4	%		2,570
Falls Church City, VA		9,192		10,377		11,222		1.3	%		5,611
Fauquier County, VA		48,646		55,139		64,927		1.8	%		100
Fredericksburg City, VA		19,023		19,279		21,288		0.7	%		1,935
Loudoun County, VA		86,575		169,599		265,149		7.2	%		511
Manassas City, VA		27,754		35,135		38,066		2.0	%		3,807
Manassas Park City, VA		7,483		10,290		12,571		3.3	%		6,286
Prince William County, VA		215,140		280,813		360,616		3.3	%		1,067
Spotsylvania County, VA		57,407		90,395		119,084		4.7	%		297
Stafford County, VA		61,331		92,446		122,436		4.4	%		454
Warren County, VA		26,142		31,584		35,038		1.8	%		164
Jefferson County, WV		35,926		42,190		49,562		2.0	%		236
Totals		4,122,914		4,796,183		5,269,444		1.5	%		937

Source: U.S. Census Bureau and Claritas Inc.

The Washington, DC regional population is expected to grow 7.9% to 5,685,999 by 2011 according to Claritas projections.

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Housing Units

The total number of housing units in the region, like the population, has steadily increased during the past two decades. The total number of housing units increased 27.2% or 1.5% per year between 1990 and 2006 from 1,633,371 to 2,077,935. The following chart summarizes housing growth in the region since 1980 and includes a 2011 projection.

Washington, DC MSA Housing Units
1980-2011

Sources: U.S. Census Bureau and Claritas Inc.

Housing growth within the region follows population growth trends with both the total number of housing units and population increasing at an average rate of approximately 1.5% per year since 1990. The District of Columbia population decreased at an average annual rate of 0.7% while the total number of housing units decreased at an average annual rate of 0.2%. Between 2000 and 2006, the District of Columbia population decreased 4.5% while housing units decreased 2.1%. Counties and select Virginia cities in this region reported population growth ranging from 0.7% to 7.2% per year and housing unit increases of 0.4% to 6.8% per year since 1990. Loudoun County, Virginia is at the upper end of these ranges. The close-in counties bordering Washington, DC exhibited smaller growth rates in population and housing due to their built-up conditions. The following table shows the average annual percentage change in the number of housing units for each of the component areas of the Washington, DC MSA since 1990.

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Washington, DC MSA Housing Units 1990-2006

							%/yr.
County/City	1990		2000		2006		1990-2006
District of Columbia		278,489		274,845		269,149		-0.2	%
Calvert County, MD		18,974		27,576		33,079		3.5	%
Charles County, MD		34,487		43,903		51,884		2.6	%
Frederick County, MD		54,872		73,017		83,980		2.7	%
Montgomery County, MD		297,939		334,632		359,416		1.2	%
Prince George’s County, MD		267,874		302,378		320,639		1.1	%
Alexandria City, VA		58,347		64,251		68,253		1.0	%
Arlington County, VA		84,904		90,426		91,098		0.4	%
Clarke County, VA		4,531		5,388		6,107		1.9	%
Fairfax City, VA		7,850		8,204		8,825		0.7	%
Fairfax County, VA		307,682		359,411		385,494		1.4	%
Falls Church City, VA		4,493		4,725		4,949		0.6	%
Fauquier County, VA		17,682		21,046		24,923		2.2	%
Fredericksburg City, VA		8,061		8,888		9,740		1.2	%
Loudoun County, VA		33,066		62,160		95,386		6.8	%
Manassas City, VA		10,160		12,114		12,906		1.5	%
Manassas Park City, VA		2,485		3,365		4,150		3.3	%
Prince William County, VA		74,598		98,052		127,063		3.4	%
Spotsylvania County, VA		20,485		33,329		43,773		4.9	%
Stafford County, VA		20,563		31,405		41,549		4.6	%
Warren County, VA		11,223		13,299		14,700		1.8	%
Jefferson County, WV		14,606		17,623		20,872		2.3	%
Totals		1,633,371		1,890,037		2,077,935		1.6	%

U.S. Census Bureau and Claritas Inc.

The housing market in the greater Washington, DC region has been strong with increases to supply and rising property values.

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Households

The total number of households in the region increased 26.5% or 1.5% per year between 1990 and 2006 from 1,566,134 to 1,980,700. The average household size decreased slightly from 2.7 to 2.61 during the same period. The following chart summarizes changes in the regional households. The total number of regional households is expected to increase 7.9% or 1.5% per year between 2006 and 2011.

Washington, DC MSA Households
1980-2011

Source: U.S. Census Bureau and Claritas Inc.

Income

The median household income in the Washington, DC MSA increased 60.9% or 3.0% per year between 1989 and 2006 from $45,877 to $73,796. The following chart summarizes income growth in the region. The median household income for the region is projected to increase 11.1% or 2.1% per year from $73,796 in 2006 to $81,996 in 2011.

Washington, DC MSA
Median Household Income
1979-2011

Source: U.S. Census Bureau and Claritas Inc.

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Economy and Employment

A strong regional economy continues to fuel growth in the Washington, DC MSA. The number of regional workers has grown significantly over the past year. The labor force for the Washington region increased 2.7% from 2,847,750 in April 2005 to 2,924,171 in April 2006. The following chart summarizes labor force data since 1996.

Washington, DC MSA Labor Force
1996-2005

Source: U.S. Department of Labor, Bureau of Labor Statistics

The unemployment rate for the region was 2.9% in April 2006 which is down from 3.3% in April 2005 according to figures obtained from the U.S. Department of Labor. The Washington region typically has a much lower unemployment rate than Washington, DC itself. The following chart shows the region’s average annual unemployment rate since 1996.

Washington, DC MSA
Unemployment Rate
1996-2005

Source: U.S. Department of Labor, Bureau of Labor Statistics

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Continued growth in regional population and housing is anticipated due to the stability of the economic base of this region. The net increase in at-place regional jobs was 76,300 or 2.7% between March 2005 and March 2006. Jobs in the service industries comprise the bulk of employment within this region with government-related employment continuing as a staple of area employment.

Washington, DC MSA Employment By Industry

Industry	March 2005		March 2006		Change		% of Total
Construction & Mining		177,600		186,300		8,700		6.3	%
Manufacturing		65,300		64,700		-600		2.2	%
Trade, Transportation & Utilities		400,100		408,300		8,200		13.8	%
Information		100,300		99,500		-800		3.4	%
Financial Activities		158,600		161,800		3,200		5.5	%
Professional & Business Services		631,400		660,200		28,800		22.3	%
Educational & Health Services		311,400		319,800		8,400		10.8	%
Leisure & Hospitality		238,900		248,800		9,900		8.4	%
Other Services		165,600		168,400		2,800		5.7	%
Government		629,900		637,600		7,700		21.6	%
Total Non-farm		2,879,100		2,955,400		76,300		100.0	%

Source: U.S. Department of Labor, Bureau of Labor Statistics

Government-related employment is a large sector in the number of industry workers. The government and related bureaucracy are also the engines that power the other industries, especially the service-related industries. Service related industries account for nearly half of all employed individuals. This region is noted for its relative lack of industrial and warehouse facilities as compared to other large metropolitan areas.

Suburban economic centers developed around the central core of Washington in the 1980’s. Emerging economic centers in the Virginia suburbs include Ballston-Rosslyn in Arlington and Tysons Corner in Fairfax County. Rockville-Gaithersburg in Montgomery County and Greenbelt-Laurel in Prince George’s County are examples of regional growth centers in the Maryland suburbs. The continued linkage of the Baltimore-Washington Corridor as a primary population area should have a significant impact on the economy of the Washington area in the future.

The Washington metropolitan area is a strategic location given its status as the seat of the federal government and the massive federal bureaucracy. Movement and growth of the government affects employment of government workers and workers in other industries, particularly the service industries. The economic downturn of the early 1990’s had a short-term negative effect on the Washington area economy. Employment loss abated and many new economic developments have since been completed. The population of the region and its housing growth has continued, especially in the far-reaching Maryland and Virginia suburbs, although Washington, DC itself experienced population loss. Long-term economic prospects are still considered good.

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FAIRFAX COUNTY DATA

A well-developed highway network permitting access to the major urban centers of the northeast corridor serves Fairfax County and the surrounding area. Interstate 66 crosses in an east-to-west direction connecting west into Manassas and Prince William County and to the east into the Washington Capital Beltway and into Downtown Washington, DC. Route 267 (Dulles Toll Road) provides access east to the Capital Beltway and west into Loudoun County and the Dulles International Airport. The Capital Beltway connects Washington with the Baltimore area to the north and Richmond to the south. Air travel is convenient as well. Dulles International Airport connects Fairfax County with major cities worldwide.

Despite the fact that there are more than 50 square miles of parkland, much of Fairfax County has been developed for residential and commercial purposes. High-density development in Fairfax County has been focused around the areas closest to Arlington County, Alexandria and Washington, DC. There has also been significant residential development along the Route 66/Route 50 Corridor as far west as Centreville. Fairfax County has a large and diversified industry base. The county is home to six Fortune 500 company headquarters: Capital One Financial, Gannett Corporation, General Dynamics, Nextel, NVR and Sallie Mae. Along with its strength in government and defense technology, the county has a large and growing number of commercial IT, financial, software, communications and technology management service providers. In addition to being a major employment center, Fairfax County is also home to a number of educational institutions including George Mason University, University of Virginia and Virginia Tech.

Population

The following population statistics demonstrate the changes that have taken place in Fairfax County and adjacent Arlington County and Alexandria City since 1980, and include a 2011 projection.

Fairfax, Arlington, and Alexandria
Population 1980-2011

Sources: U.S. Census Bureau & Claritas, Inc.

Population growth in Fairfax County has out-paced that of Arlington and Alexandria. This is due to the availability of vacant land in outlying areas of western and northern Fairfax County.

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Housing Units

The following housing unit statistics compare the changes that have taken place in Fairfax County, Arlington and Alexandria, including a 2011 projection. The total number of housing units in Fairfax County increased 25.3% or an average of 1.4% per year between 1990 and 2006.

Fairfax, Arlington, and Alexandria
Housing Units 1980-2011

Sources: U.S. Census Bureau & Claritas, Inc.

A total of 20,365 multifamily building permits were issued in Fairfax County between 1998 and 2005 for an average of 2,546 per year during that period. Arlington County and the City of Alexandria have seen less multifamily development than Fairfax County because of their more built-up conditions. The following table shows the number of multifamily building permits issued in Fairfax County, Arlington County and the City of Alexandria between 1998 and 2005.

Multifamily Building Permits 1998-2005

Area	1998		1999		2000		2001		2002		2003		2004		2005
Fairfax		2,708		3,272		1,998		2,623		2,991		880		3,816		2,077
Arlington		342		827		730		749		0		0		0		1,097
Alexandria		584		414		714		928		864		52		672		820

Source: U.S. Census Bureau

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Households

The total number of households in Fairfax County increased 26.8% or an average of 1.5% per year between 1990 and 2006. The following chart summarizes household data for Fairfax, Arlington and Alexandria, and includes a 2011 projection.

Fairfax, Arlington, and Alexandria
Households 1980-2011

Sources: U.S. Census Bureau & Claritas, Inc.

Income

Fairfax County, Arlington County and Alexandria are home to many professionals and upper income wage earners as reflected by 2006 median household income estimates. Following is a summary of median household income levels for the local areas, including a 2011 projection.

Fairfax, Arlington, and Alexandria
Median Household Income 1979-2011

Sources: U.S Census Bureau & Claritas, Inc.

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Economy and Employment

Between 1996 and 2005, the Fairfax County labor force grew at a rate of 3.3% per year, Arlington County at 1.6% per year, and the City of Alexandria at a rate of 1.6% per year. The Fairfax County labor force totaled 596,891 in March 2006, up 3.5% from the March 2005 total of 576,871.

Fairfax, Arlington, and Alexandria
Labor Force 1996-2005

Source: U.S. Department of Labor, Bureau of Labor Statistics

Employment among Fairfax County residents increased 3.8% between March 2005 and March 2006 from 562,225 to 583,595. Employment among both Alexandria and Arlington residents increased 3.8% during the same period. Fairfax County has seen generally steady employment levels over the past five years. The following chart summarizes employment growth in Fairfax County, Arlington County and Alexandria.

Fairfax, Arlington, and Alexandria
Employment 1996-2005

Source: U.S. Department of Labor, Bureau of Labor Statistics

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Unemployment rates are derived from a U.S. Department of Labor household survey which measures the number of individuals receiving unemployment benefits that are actively seeking employment. The unemployment rate for Fairfax County decreased from 2.5% in March 2005 to 2.2% in March 2006. Similarly, the Arlington County unemployment rate decreased from 2.5% to 2.1% and the Alexandria City unemployment rate decreased from 2.9% to 2.4% during the same period.

Fairfax, Arlington, and Alexandria
Unemployment Rates 1996-2005

Source: U.S. Department of Labor, Bureau of Labor Statistics

The low unemployment rate in the County of Fairfax is attributed to the large concentration of employment opportunities within the county and in the surrounding areas. Dulles International Airport, various business and industrial parks scattered throughout the county and the large number of potential employers in McLean, Tysons Corner, Fair Lakes, Vienna, Fairfax and other sites throughout the county provide ample employment opportunities for tenants of the subject property. Fairfax County is home to over 29,000 businesses and over 580,000 employed residents. As noted earlier, Fairfax County also has a large number of technology-based companies. International businesses also have a strong presence in the county. The area has strong ties to the federal government and government-related employment which will provide a strong employment based into the future.

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Following is a list of the top private sector employers in Fairfax County.

Employer	Industry	Employees
Inova Health System	Health Care	10,000 +
Northrop Grumman IT	Professional, Scientific, Technical Services	5,000-9,999
Booz Allen Hamilton	Professional, Scientific, Technical Services	5,000-9,999
SAIC	Professional, Scientific, Technical Services	5,000-9,999
Freddie Mac	Finance and Insurance	3,000-4,999
Computer Sciences Corp.	Professional, Scientific, Technical Services	3,000-4,999
Lockheed Martin	Professional, Scientific, Technical Services	3,000-4,999
Sprint Nextel	Information, Telecommunications	3,000-4,999
General Dynamics	Professional, Scientific, Technical, Manufacturing	2,000 – 2,999
Raytheon	Professional, Scientific, Technical Services	2,000 – 2,999
ExxonMobil	Wholesale Trade (Petroleum Products)	2,000 – 2,999
Navy Federal Credit Union	Finance and Insurance	2,000 – 2,999
IBM	Professional, Scientific, Technical, Computers	2,000 – 2,999
Accenture	Professional, Scientific, Technical Services	2,000 – 2,999
BAE Systems	Professional, Scientific, Technical, Transportation	2,000 – 2,999
Gannett Co.	Information, Newspapers	2,000 – 2,999
Verizon	Professional, Scientific, Technical, Telecom	2,000 – 2,999
The MITRE Corporation	Professional, Scientific, Technical Services	2,000 – 2,999

Source: Fairfax County Economic Development Authority, May 2006

Many technology and telecommunications companies have located in Northern Virginia, especially Tysons Corner/Dulles/and farther westward along Route 7 on the way to Leesburg. This Internet hub has resulted in a large number of skilled workers attracted into the area which has ramped up housing demand and rent levels. The decline in the technology center in the early 1990’s resulted in numerous layoffs at local companies in Western Fairfax and Eastern Loudoun Counties. Since then, a recovery has occurred as other firms have established themselves in these areas.

Fairfax County as a whole included 229,524,736 SF of non-residential space in 2004 consisting of 41,150,059 SF of industrial space, 103,520,646 SF of office space, 33,857,377 SF of retail space and 37,698,795 SF of institutional space. Employment in Fairfax County is dominated by the service sector which employs nearly 45% of the entire workforce. Federal, state and local governments account for 12% of Fairfax County’s workforce.

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The following is a summary of the county’s major industries.

FAIRFAX COUNTY EMPLOYMENT BY INDUSTRY

Rank	Industry	% of Employment
1.	Professional, Scientific and Technical Services	21%
2.	Retail	10%
3.	Health and Social Services	8%
4.	Accommodation and Food Services	7%
5.	Education	7%
6.	Information/Telecommunications	7%
7.	Management and Administrative Services	7%
8.	Construction	6%
9.	Finance and Insurance	4%
10.	Public Administration	4%
11.	Other	18%
	TOTAL	100%

Source: Virginia Employment Commission (VEC), 2004

The general outlook for Fairfax County is for overall stability due to the county’s diversified economy. In summary, Fairfax County’s location in the Washington metropolitan region has made the county a highly desirable business and residential location. Fairfax County has maintained high-quality residential neighborhoods while supporting well-managed growth. This moderate growth is expected to continue.

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NEIGHBORHOOD MAP: Riverside Park

NEIGHBORHOOD DESCRIPTION

The subject is located east of Richmond Highway (Route 1) and north of Huntington Avenue in an unincorporated area of Fairfax County just south of the City of Alexandria. Cameron Run, a tidal creek, separates the subject’s location in Fairfax County from the City of Alexandria. Interchange 1 of the Capital Beltway, also known as Interstate 95, is within one half mile of the subject. The subject has excellent access to Alexandria, the Pentagon, downtown Washington, DC and the surrounding suburbs. Uses in the subject’s immediate neighborhood include Huntington Gateway (Rental #1) to the south, a high-rise condominium project to the southwest, commercial buildings to the east, a car dealership adjacent to the east, single-family detached dwellings adjacent to the west, and townhouses to the southwest and southeast. The subject consists of one large site bounded by Cameron Run Terrace and Old Richmond Highway to the east, Cameron Run to the north, single family homes to the west, and Huntington Avenue to the south. Huntington Avenue connects with Richmond Highway to the east and with Telegraph Road (Route 611) to the west. Huntington Park is located west of the subject along the banks of Cameron Run. The Huntington Metro Station is located about 1/2 mile west of the subject just south of Huntington Avenue with a parking area adjacent to the station.

The City of Alexandria is located one-half mile north of the subject. Significant development has occurred and is occurring along the Eisenhower Corridor just north of the subject in Alexandria including the Carlyle area less than one mile north of the subject. Major projects include the Patent and Trademark office development with 2.5 million square feet of office space and the proposed Hoffman Center with nearly 4 million square feet of office space planned. A new Woodrow Wilson Bridge crossing the Potomac River one mile east of the subject and connecting Alexandria with Prince George’s County is currently under construction. The completion of this bridge will allow for easier access to Maryland and the District of Columbia. Two of the former Hunting Towers buildings, (now known as Hunting Point on the Potomac — Rental #3), five Hunting Terrace Buildings and two nearby office buildings were demolished to allow for construction of the new bridge, which is planned for completion in 2007. The subject’s U.S. Route 1/Interstate 95/495 Interchange will see construction and improvements over the next few years as part of the construction of the new bridge. The new bridge and upgraded Capital Beltway are expected to have a positive effect on the subject’s area as access across the Potomac River into Maryland and the District is improved.

As noted previously, the subject property is located in an unincorporated area of Fairfax County and has an Alexandria mailing address. This is a suburban Washington, D.C. area with convenient access to major employment centers, schools, recreational facilities and community shopping centers. Nearby uses include elevator apartment and condominium projects, commercial shopping centers, single family detached dwellings, office buildings and the Belle Haven Country Club. The subject is within close proximity to Penn Daw Plaza, Builders Square Plaza and Beacon Mall all of which are located south of the subject within 1 to 2 miles. Old Town Alexandria with its attractive employment, entertainment, retail and recreational amenities and rich historic significance lies just one mile north of the subject.

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In conclusion, the subject possesses a desirable suburban Washington, D.C. location in the Mount Vernon Planning District of Fairfax County, Virginia. Proximity to the City of Alexandria and the Capital Beltway to the north accords the subject a convenient semi-urban appeal. The numerous employment opportunities in this area should attract potential tenants desiring to live in close proximity to their place of employment. The subject appeals to middle to upper middle income workers desiring rental housing with good accessibility to shopping, schools, employment centers and major roads. It is expected that the subject’s area will continue to generate adequate economic demand to support the subject as an elevator apartment rental project.

RENTAL MARKET ANALYSIS

The appraiser considered numerous market rate rental projects in the Washington, DC market. The subject’s rental market has been characterized by increasing rents and stable occupancy levels. The overall reported vacancy rate among the fourteen comparables surveyed and reporting vacancy data was 2.9%. The following table summarizes the rent comparables utilized in this appraisal.

Summary of Comparable Rentals

	Project Name	# Units		Yr Blt		# Vac		Vac Rate			Studio Rent		1BR Rent		2BR Rent		Utilities Included
1	Huntington Gateway		443		1990		7		1.6	%	$	1,145-$1,390	$	1,140-$1,625	$	1,540-$1,930	Cold water
2	Belle Haven Towers		569		1964-73		9		1.6	%	$	829-$950	$	960-$1,157	$	1,186-$1,415	Varies
3	Hunting Point on the Potomac		530		1948		60		11.3	%	$	869-$941	$	1,054-$1,190	$	1,400-$1,473	All
4	Carydale East		233		1965		5		2.1	%	$	760-$848	$	928-$1,059	$	1,238-$1,389	All
5	Meridian at Carlyle		403		2001		4		1.0	%	$	1,230-$1,630	$	1,475-$1,865	$	1,930-$2,430	None
6	The Reserve at Eisenhower		250		2001		5		2.0	%		–	$	1,450-$1,970	$	1,785-$1,935	None
7	Meridian at Braddock Station		480		1991-2002		4		0.8	%	$	1,195	$	1,285-$1,365	$	1,675-$1,830	None
8	The Summit		142		1980		2		1.4	%		–	$	1,335-$1,454	$	1,631-$1,795	All
9	3001 Park Center		326		1989		4		1.2	%		–	$	1,065-$1,585	$	1,585-$2,130	None
10	London Park Towers		458		1963		15		3.3	%	$	896-$1,010	$	1,056-$1,207	$	1,465-$1,552	All
11	Southern Towers		2,293		1964		8		0.3	%	$	775-$860	$	945-$1,020	$	1,250-$1,395	All
12	Eos 21 Apartments		1,200		1963-67		98		8.2	%	$	930	$	1,100-$1,150	$	1,420-$1,465	Ht., ckg., electricity
13	Cascade at Landmark		227		1990		6		2.6	%		–	$	1,212-$1,650	$	1,495-$1,766	None
14	Carlyle Mill		317		2002		4		1.3	%		–	$	1,585-$1,900	$	1,830-$2,400	None
	Market Totals/Averages		7,871				231		2.9	%	$	760-$1,630	$	928-$1,900	$	1,186-$2,430
Subject: Riverside Park (5/06)			1,222		1968-70		252		20.6	%	$780-$895 est.		$990 est.		$1,290 est.		None (RUBS)

An analysis was completed using data from Rentals #1, #2, #3, #4, #10 and #11 comparing the average rent levels in February 1996 for studio, 1BR and 2BR units to the average rent levels for the same unit sizes in May 2006. The average studio rents increased 60.5% or 4.6% per year from $557 to $894. The average 1BR rents increased 51.8% or 4.1% per year from $701 to $1,064. The increase in 2BR rents was 57.4% or 4.4% per year from $884 to $1,392. The vacancy level measured among the 4,526 units used in this analysis was unchanged at 2.3%.

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Increased economic development and rising incomes fueled rapid rental increases in the Fairfax County rental market between 1998 and January 2001. Rents appear to have peaked in early 2001. According to the Fairfax County 2005 Rental Housing Complex Census Analysis, the annual average monthly rent in Fairfax County since 1990 was as follows:

Fairfax County Annual Rent Growth

Year	Avg Rent		% Change			Year			Avg Rent		% Change
1991	$	747		1.8	%		1998		$	849		6.1	%
1992	$	739		-1.1	%		2000	*	$	989		16.5	%
1993	$	753		1.9	%		2001		$	1,129		14.2	%
1994	$	767		1.9	%		2002		$	1,157		2.5	%
1995	$	792		3.3	%		2003		$	1,168		1.0	%
1996	$	800		1.0	%		2004		$	1,157		-0.9	%
1997	$	809		4.3	%		2005		$	1,202		*	*

*	2000 % Change Reflects Rent Growth for Two Years
**	Due to a change in methodology, the percent change from the prior year is not comparable.

Source: Fairfax County 2005 Rental Housing Complex Census Analysis

The following table displays average monthly rent by planning district. The average rent in the subject’s Mount Vernon Planning District is $1,006, the lowest average rent for any planning district.

Fairfax County Average Monthly Rent by Planning District

Planning District	2005
Annandale	$	1,192
Baileys	$	1,113
Bull Run	$	1,197
Fairfax	$	1,295
Jefferson	$	1,156
Lincolnia	$	1,141
Lower Potomac	$	1,016
McLean	$	1,445
Mount Vernon	$	1,006
Pohick	$	1,309
Rose Hill	$	1,368
Springfield	$	1,168
Upper Potomac	$	1,296
Vienna	$	1,276
Fairfax County Totals	$	1,202

Source: Fairfax County 2005 Rental Housing Complex Census Analysis

The average rent for low-rise units was $1,183 compared to $1,218 for mid-rise units, $1,232 for high-rise units and $1,516 for townhouse units. Low-rise units include projects with apartment buildings 4 stories or less and may be garden or elevator projects.

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The following table summarizes 2005 vacancy rates for each Fairfax County Planning District. The subject’s Mount Vernon Planning District had a 6.5% vacancy rate in January 2005 as indicated below.

Fairfax County Vacancy Rates By Planning District

Planning District	Units Surveyed		Vacancy Rate
Annandale		3,873		4.5	%
Baileys		5,522		4.7	%
Bull Run		6,505		5.7	%
Fairfax		6,877		10.1	%
Jefferson		5,613		6.2	%
Lincolnia		2,448		6.4	%
Lower Potomac		1,474		6.2	%
McLean		3,014		5.0	%
Mount Vernon		9,910		6.5	%
Pohick		954		2.0	%
Rose Hill		2,612		4.0	%
Springfield		1,730		3.3	%
Upper Potomac		11,647		9.9	%
Vienna		2,445		2.2	%
Fairfax County Totals		64,624		6.8	%

Source: Fairfax County 2005 Rental Housing Complex Census Analysis

According to the 2005 Fairfax County Rental Housing Complex Census Analysis, the Fairfax County vacancy rate was 6.8% in 2005 up slightly from 5.6% in 2004. The countywide vacancy rate was 2.5% in 2001, 1.6% in 2000, 5.5% in 1998, 5.0% in 1997 and 5.4% in 1996. The countywide vacancy rate fluctuated between 4.7% and 6.2% between 1992 and 1995.

An analysis of vacancy rate by unit type reveals that the average annual vacancy rate during 2005 for Efficiency, 1BR and 2BR units was 3.7%, 6.9% and 6.5%, respectively. Vacancy rates by type of structure are illustrated in the following table:

Fairfax County Vacancy Rates By Structure Type

Structure Type	Units		Vacancy Rate
Low-Rise		51,315		7.0	%
Mid-Rise		5,084		5.3	%
High-Rise		4,668		5.5	%
Townhouse		3,557		6.4	%
TOTAL		64,624		6.8	%

Source: Fairfax County 2005 Rental Housing Complex Census Analysis

As indicated in the above table, 79.4% of rental units in Fairfax County are low-rise units while mid-rise units comprise 7.9%, high-rise units 7.2% and rental townhouse units 5.5% of the total.

RIVERSIDE PARK APARTMENTS

23

The Delta Associates Year First Quarter 2006 Class A Apartment Market Report reported a vacancy rate of 2.3% at stabilized Class A rental properties in Northern Virginia in March 2006. The combined Northern Virginia Class A and Class B vacancy rate at projects no longer in initial lease-up remained constant at 2.2% between March 2005 and March 2006. Delta indicated an increase of 5.1% in the average effective rent for all stabilized Class A and Class B properties in Northern Virginia between March 2005 and March 2006.

A total of 20,365 multifamily building permits were issued in Fairfax County between 1998 and 2005 for an average of 2,546 per year during that period. Arlington County and the City of Alexandria have seen less multifamily development than Fairfax County because of their more built-up conditions. The following table shows the number of multifamily building permits issued in Fairfax County, Arlington County and the City of Alexandria between 1998 and 2005.

Multifamily Building Permits 1998-2005

Area	1998		1999		2000		2001		2002		2003		2004		2005
Fairfax		2,708		3,272		1,998		2,623		2,991		880		3,816		2,077
Arlington		342		827		730		749		0		0		0		1,097
Alexandria		584		414		714		928		864		52		672		820

Source: U.S. Census Bureau

The following table summarizes the number of units by planning district in Fairfax County. The subject’s Mount Vernon Planning District has 15.3% of the County’s units. Previous reports did not include the publicly-owned complex units. The elimination of the 2,020 publicly-owned units included in the 2005 Report reveals a decrease of 330 units between January 2004 and January 2005.

Fairfax County Rental Units By Planning District, January 2005

Planning District	2005
Annandale		3,873
Baileys		5,522
Bull Run		6,505
Fairfax		6,877
Jefferson		5,613
Lincolnia		2,448
Lower Potomac		1,474
McLean		3,014
Mount Vernon		9,910
Pohick		954
Rose Hill		2,612
Springfield		1,730
Upper Potomac		11,647
Vienna		2,445
Fairfax County Totals		64,624

Source: Fairfax County 2005 Rental Housing Complex Census Analysis

RIVERSIDE PARK APARTMENTS 24

A number of apartment complexes are under construction or planned for construction in Fairfax County. The subject’s immediate sub-market has not seen significant recent additions to supply due to the essentially built-out nature of the area.

All of the projects in the pipeline are Class A luxury projects with much higher rents than the subject. None of these projects compete directly with the subject in its current condition. It is anticipated that all of the projects in the pipeline will be absorbed over time. New projects in the pipeline are not expected to have a detrimental long-term effect on the subject’s rental rates or occupancy levels.

The following summary of additions to multifamily supply in Fairfax County is based upon our research of the market over time, newspaper articles, conversations with local planners and developers, and the First Quarter 2006 Class A Apartment Market Report produced by Delta Associates.

RIVERSIDE PARK APARTMENTS 25

Northern Virginia Multifamily Pipeline

Project Name	Location	Status	Units in Pipeline
Under Construction/Lease-up
Camden Fairfax Corner	Fairfax	Lease-up		326
Meridian at Eisenhower	Alexandria	U/C		369
Camden Monument Place	Fairfax	U/C		350
Metropolitan Reston Apartments	Reston	U/C		288
Jefferson at Sullivan Place	Springfield	U/C		498
Camden Potomac Yard	Arlington	U/C		378
Airport Plaza Phase III	Crystal City	U/C		412
Liberty Center	Ballston	U/C		235
One Metropolitan Park — Phase I	Pentagon City	U/C		399
Rosslyn Towers	Rosslyn	U/C		224
Bailey’s	Shirlington	U/C		244
Quincy Plaza	VA Square	U/C		474
Carlyle — Phase I	Alexandria	U/C		224
Columbus Mews	Alexandria	U/C		75
Northampton Place — Phase II	Alexandria	U/C		275
Total Under Construction/Lease-up				4,771
Projects Planned w/in 3 Years
Skyline Area (Bailey’s)	Alex/Arl/Fairfax	Planned		385
Views of Clarendon	Clarendon	Planned		46
Two Metropolitan Park — Phase II-VIII	Pentagon City	Planned		300
North Tract Lofts	Crystal City	Planned		190
Rosslyn Ridge	Rosslyn	Planned		142
Total Planned w/in 3 Years				1,063
Three Year Pipeline Total				5,834
Longer Term Pipeline (3+ Years)
Carlyle — Phase II	Alexandria	Longer Term		175
Jefferson at Kings Crossing	Alexandria	Longer Term		543
TBA	Alexandria	Longer Term		200
Huntington Metro Station	Alexandria	Longer Term		180
TBA	Clarendon	Longer Term		265
Central Place	Rosslyn	Longer Term		350
Clarendon Center	Clarendon	Longer Term		279
Three Metropolitan Park	Pentagon City	Longer Term		410
Four Metropolitan Park	Pentagon City	Longer Term		348
Five Metropolitan Park	Pentagon City	Longer Term		386
Six Metropolitan Park	Pentagon City	Longer Term		520
Seven Metropolitan Park	Pentagon City	Longer Term		395
Eight Metropolitan Park	Pentagon City	Longer Term		455
Dulles Station — Building H and J	Reston	Longer Term		368
Munson Hill Towers Redevelopment	Falls Church	Longer Term		200
TBA	Fairfax	Longer Term		500
Merrifield Town Center	Merrifield	Longer Term		925
Arrowbrook Centre	Centerville	Longer Term		800
Total Longer Term (3+ Years)				7,299
Total Pipeline				13,133

RIVERSIDE PARK APARTMENTS 26

Absorption rates of recently built apartment projects in Fairfax County, Arlington County and Alexandria were researched as indicators of demand for newly built apartments. The chart below is a summary of the absorption history at a number of rental apartment projects in Fairfax County that have been developed over the past several years.

Northern Virginia Absorption

Project	Location	Total Units		Year Built		Monthly Absorption Rate
The Clarendon (High-Rise)	Arlington		160		2005		12
Camden Fairfax Corner*	Fairfax		488		2005		22
Lofts 590	Arlington		202		2005		14
The Metropolitan at Pentagon Row	Arlington		326		2004		22
The Clarendon (Midrise)	Arlington		132		2004		12
Metropolitan at Fairfax	Herndon		223		2004		25
Metropolitan at Arlington	Arlington		183		2003		14
Gallery at Rosslyn	Rosslyn		276		2003		18
The Reserve at Clarendon Centre	Clarendon		252		2003		23
Van Metre Woodland Park — Phase II	Herndon		252		2003		25
Meridian at Braddock Station II	Alexandria		297		2002		21
Reserve at Eisenhower	Alexandria		226		2002		10
Metropolitan at Alexandria	Alexandria		404		2002		11
Archstone Van Dorn	Alexandria		296		2002		24
Jefferson at Carlyle Mill	Alexandria		315		2002		18
Warwick House Phase II	Crystal City		212		2002		12
Meridian at Courthouse Commons III	Courthouse		292		2002		23
Gallery at Virginia Square	Virginia Square		230		2002		21
Residences at Market Common	Clarendon		300		2002		23
Metropolitan at Pentagon City I	Pentagon City		325		2002		21
The Atherton	Ballston		123		2002		15
Avalon at Arlington Square II	Arlington		309		2002		13
Reserve at Potomac Yard	Alexandria		588		2001		40
Esplanade at Park Center	Alexandria		392		2001		30
Meridian at Carlyle	Alexandria		403		2001		37
Pentagon Row	Pentagon City		504		2001		24
Ballston Place	Ballston		383		2001		33
Avalon at Arlington Square I	Arna Valley		510		2001		40
Millbrook at Mark Center Phase I	Alexandria		272		2000		13
2201 Wilson Boulevard	Courthouse		219		2000		37
Average Absorption Rate							22

* In lease-up phase

RIVERSIDE PARK APARTMENTS 27

THE SUBJECT PROPERTY

Property Identification

Riverside Park Apartments
2000 Huntington Avenue, Alexandria (outside)
Fairfax County, VA 22303

Tax Account Number

0833 01 0101

Census Tract

4204.00

Property History

The subject is currently in title to AIMCO Riverside Park LLC. No sale of the subject has occurred within the last five years according to tax data obtained from Win2Data for Fairfax County, VA. Fairfax County tax assessment data indicates a transfer of the subject in June 2000 for $0 in consideration. This transfer may have involved an ownership name change or some other non arms-length transaction. The last arms length sale of the subject appears to have occurred in July 1986 when the subject reportedly sold for $59,125,000. According to the subject’s management, the property is not currently under an agreement of sale nor is the subject listed for sale.

Assessment and Real Estate Tax Data

Real estate taxes are based upon the Fairfax County Assessor’s estimate of market value (703-222-8234). Properties are reassessed annually with the assessed values set at 100% of fair market value. Assessments are established on a calendar year basis. Tax rates are set between April and June of each year and are applied to the assessment which is in effect on the preceding January 1. The subject’s 2006 assessment will be utilized by Fairfax County to calculate the subject’s tax liability for the current calendar year. The current assessment, rates and taxes are reported below. The following Map Reference Number identifies the subject’s parcel: 0833-01-0101. The 2006 county tax rate is $0.89 per $100 of assessed value. In addition, the subject’s rate includes $.001 per $100 of assessed value as a Gypsy Moth Control tax. The overall tax rate for the subject is $0.90.

Real estate tax assessments have been increasing for the subject between 2003 and 2006 and have also been rising since 2000. Over the 2003 through 2006 period, the tax rate has declined from $1.161 in 2003 to $1.131 in 2004 to $1.001 in 2005 to $0.90 in 2006. Thus, as assessments have been increasing for the majority of properties, the tax rate for Fairfax County has been adjusted downward to lessen the impact of these higher assessments. The subject’s real estate tax expense actually decreased in 2005 and 2006.

RIVERSIDE PARK APARTMENTS 28

The subject’s parcel is currently assessed at $90,090,900 or $73,724 per unit. Since the assessed value differs from the value appraised herein, a check of the reasonableness of the subject’s assessment has been made. The following apartment projects from the subject’s sub-market were researched for tax assessment information. These comparables represent a wide array of assessments that bracket the subject’s current assessment and proposed assessment.

Real Estate Tax Assessment Comparables

					Assessment
#	Project Name	Year Built	# Units		Per Unit
1	Munson Hill	1963		279	$	65,442
2	Fairfax Towers	1977		415	$	97,045
3	Belle Haven Towers	1964/73		569	$	85,275
4	Ravenwood Towers	1962		310	$	98,247
Subject	Riverside Park (2006)	1968-70		1222	$	73,724
Subject	Riverside Park (estimated)	1968-70		1222	$	92,155

The appraiser also researched recent Fairfax County sales to determine the increase in assessment subsequent to sale. Ravenwood Towers which sold in August 2004 for $32,670,000 saw its assessment increase by 24% to $28,282,660 in 2005. Skyline Towers, which sold for a recorded price of $165,500,000 in December 2005, saw its assessment increase 30.6% to $74,260,000 for 2006. The subject’s assessment for purposes of this appraisal is estimated at 25% above the current assessment rounded to $112,614,000 or $92,155 per unit since an appraisal assumes a sale of the subject property. If the subject were sold at the value appraised herein, it is likely that in the tax year following the sale (2007) the assessment would be adjusted to a level more closely reflecting the recorded sales price.

The following table summarizes the subject’s current, historical and projected real estate tax assessments and expenses.

Real Estate Tax Calculations	2003		2004			2005			2006			2007 (Projected)
Land Assessment	$	28,106,000	$	34,216,000		$	36,660,000		$	73,320,000
Improvement Assessment	$	42,067,215	$	47,125,455		$	49,390,800		$	16,770,900
Total Assessment	$	70,173,215	$	81,341,455		$	86,050,800		$	90,090,900		$	112,614,000
Indicated Assessment Increase		—		15.9	%		5.8	%		4.7	%		25.0	%
Current Real Estate Tax Rate		1.161		1.131			1.001			0.900			0.900
Indicated Real Estate Tax Expense	$	814,711	$	919,972		$	861,369		$	810,818		$	1,013,526
Rounded	$	814,700	$	920,000		$	861,400		$	810,800		$	1,013,500
Real Estate Tax Expense/Unit	$	667	$	753		$	705		$	664		$	829
Indicated Increase		—		12.9	%		-6.4	%		-5.9	%		25.0%

RIVERSIDE PARK APARTMENTS 29

The subject’s 2006 assessment of $90,090,900 will be in effect through December 31, 2006 or for approximately six months of the 12-month projection period. The subject’s assessment is projected by the appraiser to increase to $112,614,000 for the January 1, 2007-December 31, 2007 period which includes the remaining six months of the subject’s 12-month projection period assuming a sale of the subject. In estimating the subject’s real estate tax expense for the 12-month projection period, a blended assessment including the current assessment for the first six months and the projected 2007 assessment for the final six months has been utilized. The following table displays the subject’s projected real estate tax expense assuming stable tax rates.

Annual Real Estate Tax Expense 2006	$	810,800
Monthly Real Estate Tax Expense 2006	$	67,567
Number of Months in Projection		6
First Portion of Real Estate Tax Projection			$	405,402
Annual Real Estate Tax Expense 2007	$	1,013,500
Projected Monthly Real Estate Tax in 2007	$	84,458
Number of Months in Projection		6
Second Portion of Real Estate Tax Projection			$	506,748
Weighted Average Real Estate Tax Expense			$	912,150
	Rounded		$	912,200

If the subject’s assessment were increased 25% to $112,614,000 in 2007, a rent increase of about $14 per month would be required to offset the increased real estate tax expense.

Site Data

The subject consists of one parcel located south of Cameron Run (a tidal creek), west of Route 1 and north of Huntington Avenue. The subject site is irregularly shaped and contains 28.1713 acres. Site topography is primarily level but gently slopes to the north. Access is direct to the site from the east side of Old Richmond Highway and the north side of Huntington Avenue, both of which are easily accessible from Route 1 and Richmond Highway.

The subject has a total of 1,804 open on-site parking spaces according to a count provided by the subject’s community manager. The parking space total includes about 28 handicapped spaces and 40 motorcycle spaces. The subject’s parking areas are scattered throughout the site in and around the subject’s three 15-story towers. The subject’s parking ratio of 1.5 spaces per unit is considered adequate for this market. Ingress and egress from two driveway entrances is considered safe and adequate.

In addition to the subject’s apartment buildings, the subject site is improved with concrete sidewalks and walkways leading to the building entrances. The subject’s driveways and parking areas are asphalt and are in average overall condition. Exterior lighting for the parking areas is considered adequate. Each of the subject’s three buildings has its own swimming pool. A fitness center is located in Building II and an aerobics room is located in Building III. Additionally, tennis courts, a volleyball/basketball court and a picnic area are on the subject site. The subject has three commercial tenants, one of which is located in Building I and two are located in Building II. Commercial tenants include a dentist, a convenience-type store and a dry cleaner.

RIVERSIDE PARK APARTMENTS 30

Landscaping consists of trees, grass and plantings that appear to be well-maintained. Concrete sidewalks and asphalt driveways and parking areas are in overall average condition. The subject site is located in 3 different flood zones; C, A and AE. Flood insurance is typically required for properties located in Zones A and AE. Flood insurance is not required for properties in a Zone C flood area. See the attached Flood Plain Map illustrating the subject’s location relative to flood areas. It is assumed that the subject property carries flood insurance if required. All typical utilities are available to the subject including sewer, water, gas, electricity, telephone and cable. Typical utility easements traverse the subject site.

The subject’s parcel is physically suited for its current use as a 1,222 unit rental apartment project with ancillary commercial uses. The site improvements are rated in average overall condition.

Improvement Data

The subject is improved with three 15-story elevator-served rental apartment buildings constructed between 1968 and 1970 with a total of 1,222 residential apartment units. In addition to the rental apartments, the subject has 7 commercial spaces of which 3 are currently occupied. There are no plans to lease the vacant four commercial spaces. Each of the subject’s buildings has a central laundry room equipped with contractor owned and operated laundry equipment. The rental office is located in Building I which is the first building after entering the subject from the north side of Huntington Avenue. The subject property is maintained in overall average condition. The subject was partially renovated in the 1980’s with upgraded kitchens, etc. All of the subject’s balconies underwent restoration in recent years to restore them to good condition. According to the available operating statements for the subject, about $1.5 million in capital improvements were completed at the subject between January 2002 and April 2006. In addition, carpet and appliance replacements have been ongoing. Following is a summary of the subject’s unit mix and unit sizes. The unit sizes were obtained from measurements taken by the undersigned during prior inspections of the subject. The subject has a variety of floor plans.

									Sq. ft.
No. of	Unit Rm. Count						Total		Area		Net Rentable
Units	Tot.		BR		b		Rooms		Per Unit		Area
14		2.0		E		1		28		289		4,046
140		2.0		E		1		280		500		70,000
70		2.0		E		1		140		550		38,500
741		3.5		1		1		2594		820		607,620
257		4.5		2		2		1157		1134		291,438
1222	TOTAL							4198				1,011,604

RIVERSIDE PARK APARTMENTS 31

Summary of Construction Components

Foundation	Masonry
Structural System	Reinforced concrete
Exterior Walls	Brick
Roof	Flat rubber roof
Interior Walls	Painted sheetrock
Floor Coverings	Carpeting over hardwood floors in living areas. Ceramic tile flooring and wainscot in bathrooms. Vinyl tile flooring in kitchen.
Heating	Individual electric heat pump or resistance fan coil units. Tenants are responsible for electricity usage for heat.
Cooling	Individual electric heat pump or unit chillers. Tenants are responsible for electricity usage for cooling.
Hot Water	Central gas-fired domestic hot water heaters
Elevator	Twelve passenger elevators
Plumbing Fixtures	Stainless steel kitchen sink. Tub with shower and ceramic tile surround, sink and toilet.
Kitchen Features	Wood cabinetry and plastic-laminate countertops. Cabinets exhibit a variety of styles depending on replacement style at the time of unit renovation. Four-burner electric range, refrigerators, garbage disposals and microwave ovens in all units. Dishwashers in 1BR and 2BR units.
Utilities	The subject’s residents are billed for their utility usage under a Ratio Utility Billing System (RUBS). The RUBS program at the subject charges tenants for their use of electricity, water and sewer usage and trash removal. The subject started billing tenants for trash removal in 2005.
Amenities	Each building has a swimming pool and there are six tennis courts on the site. Other facilities include a fitness center in Building II and an aerobics room in Building III. A volleyball/basketball court is located on site along with a picnic area.
Laundry	Each of the three buildings has a common laundry room with coin- operated equipment that is contractor owned and operated.

RIVERSIDE PARK APARTMENTS 32

Summary of Construction Components (continued)

Security/Fire Safety	Gated entrance with watchman, fire alarms, back-up gas generator, smoke detectors, emergency lighting
Condition	The subject’s improvements in “As Is” condition prior to renovation are rated in overall average condition with repairs and replacements made as necessary. Some window ledges were in need of repair.

A substantial renovation of the subject is in process. Building #1 with 366 units will be the first building to be renovated with a contract construction cost of $20,100,000 or $54,918 per unit. Projected costs for the remaining two buildings were not available. This valuation has estimated the subject’s “As Is” market value prior to renovation in accordance with the client’s request.

This appraisal assignment was completed without the benefit of current engineering and environmental site assessment reports. If subsequently completed reports reveal the need for significant immediate repairs or if significant environmentally hazardous conditions exist, this valuation would be adversely impacted.

The subject is estimated to have an effective age of 20 years and an estimated remaining economic life of 35 years.

Planned Renovations

The subject’s ownership plans to extensively renovate the subject property. Building #1 with 366 units will be the first building to be renovated with a contract construction cost of $20,100,000 or $54,918 per unit. Projected costs for the remaining two buildings were not available. The planned renovations will increase the project size slightly from the current 1,222 units to 1,229 units and reposition the subject from its current Class C status to a Class B+ project (Class B project with Class A amenities). A new 10,000 square foot free-standing athletic facility/clubhouse leasing center will be built on the site adjacent to Building II. The subject’s 14^th and 15^th floors will be upgraded with Class A features while 1^st through 13^th floors will be renovated to Class B standards. Washers and dryers will be installed in each unit as part of the rehab plan. The subject’s kitchens will be “opened-up” to the living room creating a more open, contemporary floor plan. Appliances will be replaced in all units, new counter tops will be installed, internet wiring will be run to each unit and kitchen cabinets and flooring will be replaced. The subject’s windows are planned for replacement, new sliding glass doors will be installed in each unit with a balcony, the roofs will be replaced, the heat pumps will be replaced along with many other property upgrades. These renovations will re-position the subject property in the market and enhance the subject’s overall income potential. Renovation construction began in June 2006 with initial occupancy of renovated units in September 2006. The owner anticipates delivering approximately 20 renovated units per month.

This valuation has estimated the market value of the subject property assuming habitable condition prior to renovation in accordance with the client’s request. Stabilized occupancy is assumed although the vacancy rate is elevated due to the renovation.

RIVERSIDE PARK APARTMENTS 33

Zoning Discussion

The subject is under the zoning jurisdiction of Fairfax County. Land use is regulated by the Zoning Ordinance of Fairfax County (Office of Zoning, 703-385-7820) adopted June 12, 1978 and effective August 14, 1978. The subject is located in an R-30 Residential District. The R-30 District is established to provide for multiple family dwellings at a density not to exceed 30 dwelling units per acre; to provide affordable dwelling unit developments at a density not to exceed 36 dwelling units per acre; and to allow other selected uses which are compatible with the residential character of the district. Permitted uses in the R-30 District include: affordable dwelling unit developments, churches, chapels, temples, etc.; multiple family dwellings; and public uses. Special permit uses include: institutional uses; community uses; commercial recreation uses; and outdoor recreation uses.

The subject is located in Fairfax County in the R-30 Residential District which was established to provide for multi-family dwellings. The following is an analysis of major requirements of the zoning ordinance as compared to the subject’s existing development. This comparison is based on information supplied by the owner and obtained from public records and site inspection by the appraiser.

Requirement	Zoning Code	Subject
Minimum Lot Area	3 acres	28.1713 acres
Maximum Density (Dwelling Units/Acre)	30 units/acre	43.4 units/acre
Maximum Height Permitted	150 feet	150+/- feet
Parking Requirements (1.6 Spaces/Unit)	1,966	1,804

Section 15-101 of the Fairfax County Zoning Ordinance states:

“Notwithstanding the definition of nonconforming building or use presented in Article 20, a building or use shall not be deemed a nonconforming use if such was a conforming building or use prior to the effective date of this Ordinance, and such building or use would otherwise be a conforming use under the provisions of this Ordinance except that it does not meet the minimum district or lot size or minimum yard requirements of the zoning district in which located.”

In other words, since the subject’s density was permitted at the time of original construction, i.e. lot size was sufficient, the subject’s building density does not technically render the property as nonconforming. The subject’s parking provides less than that required by the current ordinance, therefore the subject is considered to be a legal nonconforming use.

Section 15-103 of the current ordinance addresses the issue of the damage of a nonconforming structure. Under the current ordinance an existing building may be restored if it is damaged to a degree not exceeding 50% of its current appraised value. Since parking relates to the subject as a whole, this 50% would apply to the total project value of the subject’s buildings less foundation costs. The maximum time period for restoration is two years.

RIVERSIDE PARK APARTMENTS 34

Many properties like the subject in this market are legally non-conforming due to changes in the zoning ordinance. This condition does not have a significant impact on the subject’s value or marketability. If the site were vacant, buildings of the same height as the subject (approximately 150 feet) could be constructed; however, they would be limited by the lot size of 28.1713 acres to a maximum yield of 845 units requiring 1,352 parking spaces.

HIGHEST AND BEST USE

Highest and best use may be defined as the reasonably probable and legal use of vacant land or improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. Among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital, and coordination, is generally regarded as the highest and best use of the land as though vacant. Analysis of the highest and the best use of a property as improved implies that the existing improvements should be renovated or retained as is so long as it continues to contribute to the total market value of the property, or until the return from a new improvement would more than offset the cost of demolishing the existing building and constructing a new one. (Appraisal Institute: The Appraisal of Real Estate, Eleventh Edition, 1996, pp. 50 and 51.)

Highest and best use of a site as though vacant assumes that a parcel of land is vacant or can be made vacant by demolition of existing improvements. Highest and best use of property as improved pertains to the use that should be made of the property as it exists. When a site contains improvements, the highest and best use may be determined to be different from the existing use. The existing use will continue unless and until land value in its highest and best use exceeds the sum of the value of the entire property in its existing use and the cost to remove the improvements. Since the subject’s improvements contribute value to the subject over and above the value of the land as if vacant, the Highest and Best Use of the subject as improved is the underlying premise to this valuation. To estimate the highest and best use of a property, four fundamental criteria must be addressed. The highest and best use must be legally permissible, physically possible, financially feasible, and maximally productive. Following is a discussion of each of these points as they apply to the subject as improved.

Legally Permissible: The subject’s existing 1,222-unit elevator apartment project with some commercial space is considered to be a legally permissible use. Based upon the preceding zoning analysis the subject, while developed beyond the maximum permitted density of 30 units per acre in the R-30 zone, is considered to be a legal, non-conforming use/structure. Expansion of the existing improvements is not permitted although the subject could be rebuilt if less than 50% of its current appraised value were damaged or destroyed. Conversion to a condominium or cooperative ownership is a legally permissible alternate use for the subject as improved. An analysis of the subject as a potential condominium conversion candidate is beyond the scope of this valuation.

RIVERSIDE PARK APARTMENTS 35

Physically Possible: The improvements were originally constructed for multi-tenant residential use and appear suitable for their current rental occupancy. The existing condition of the improvements is average. The subject is an adequately maintained rental apartment project and with good management should successfully compete with most nearby rental projects. An extensive renovation of the subject property is in process; however, this analysis has considered the subject in “As Is” condition operating as a rental property prior to renovation.

Financially Feasible and Maximally Productive: A review of comparable sales data indicates that some recent rental project acquisitions in the most desirable locations in the Washington, DC Metro area were motivated by condominium conversion. This trend includes newly built developments with separate utilities as well as older vintage projects. The subject’s utility allocation with utilities separately metered would normally lend itself to condominium conversion; however, its older vintage and unit mix detract from its condominium potential. Brokers report that the market for condominium conversions has begun to cool in recent months. The current owners of the subject property are likely to continue the subject’s use as an elevator rental apartment use well into the future and in fact, plan to renovate the subject and re-position it in the local rental sub-market.

Based upon the above analysis of the subject property and current market conditions, the maximally productive use of the subject is for continued operation as a market rate rental apartment project. The subject has a history of increasing income and relatively high occupancy rates prior to the onset of move-outs in anticipation of the renovation plan. In conclusion, the highest and best use of the subject, as improved, is for continued operation as a 1,222-unit elevator-style rental apartment project with a limited amount of commercial office and retail space.

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VALUATION PREMISE

This appraisal is for the subject’s Market Value under its Highest and Best Use as discussed above. In order to estimate the subject’s Market Value, the appraisal process is utilized. This process is an orderly program by which the problem is defined; the work necessary to solve the problem is planned; and the data involved is acquired, classified, analyzed and translated into an estimate of value. The Income Approach and Sales Comparison Approach have been applied in this appraisal. The Cost Approach is not applied since investors and lenders do not rely upon this approach for valuation of a property that was built approximately 36 years ago like the subject. An Insurable Value has been included in the addenda per the client’s request.

The Income Approach is based upon the present worth of the subject’s income potential as measured by capitalization of net income. The Market Approach consists of an analysis of comparable improved sales. The Income Approach includes analyses of comparable rental and expense data. The subject’s actual operating history during the January 2002 through April 2006 period has been considered. Net operating income has been converted into a value conclusion through Direct Capitalization.

The Income Approach and Sales Comparison Approach have been employed for indications of the subject’s Market Value as a rental project. The following pages contain our application of the Income Approach and Sales Comparison Approach to value.

INCOME APPROACH

In the Income Approach, the following steps have been employed:

1)	Estimate of gross income — The subject’s estimated gross income potential is based upon an analysis of the local rental market. An adjustment for vacancy and collection losses is also considered for an estimate of effective gross income. Income from various forms of other income including month to month fees, commercial rent, utility income (RUBS), laundry income, cable TV income, late charges, etc. has also been projected.
2)	Estimate of expenses — The subject’s expenses are estimated based upon the subject’s actual history of expenses during the January 2002 through April 2006 period and the experience of other similar properties in the northern Virginia market. This data is considered adequate to make an estimate of the subject’s expenses over the next 12 months assuming stabilized operations and the subject’s “As Is” condition prior to renovation.
3)	Capitalization of net income for an indication of Market Value — The selection of an appropriate capitalization technique and rate is based upon the characteristics of the subject’s income stream and the nature of the investment. The most appropriate method is dictated by the practices most commonly used by the typical purchaser of properties like the subject. Direct capitalization through Derivation from Comparable Sales and by the Band of Investment Technique has been applied.

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Estimate of Gross Income

The subject’s projected gross income consists primarily of rental income from 1,222 rental units that include three different efficiency-style units, 1-bedroom and 2-bedroom units. The current rent roll dated May 25, 2006 has been analyzed in light of comparable rentals to provide a basis for an estimate of the subject’s economic rents assuming “As Is” condition prior to renovation. It should be noted that the subject’s planned renovation has required the ownership to position the project’s occupancy for renovation construction. As a result, some units are being intentionally vacated so that apartments can be renovated. The May 25, 2006 rent roll shows 252 vacant units including down units while the May 13, 2005 rent roll indicated 168 vacant units and the December 16, 2004 showed 70 vacant units. Due to the elevated vacancies at the subject as of the date of this valuation, the scheduled rents of the May 25, 2006 rent roll are elevated since the vacant units are included at their market rents which would generally be above their actual rents. These vacant units are generally in rentable condition. The following pages contain detailed descriptions of these comparable rental projects. The following chart summarizes the current street rents of the rent comparables.

Summary of Comparable Rentals

	Project Name	# Units	Yr Blt	# Vac	Vac Rate	Studio Rent	1BR Rent	2BR Rent	Utilities Included
1	Huntington Gateway	443	1990	7	1.6%	$1,145-$1,390	$1,140-$1,625	$1,540-$1,930	Cold water
2	Belle Haven Towers	569	1964-73	9	1.6%	$829-$950	$960-$1,157	$1,186-$1,415	Varies
3	Hunting Point on the Potomac	530	1948	60	11.3%	$869-$941	$1,054-$1,190	$1,400-$1,473	All
4	Carydale East	233	1965	5	2.1%	$760-$848	$928-$1,059	$1,238-$1,389	All
5	Meridian at Carlyle	403	2001	4	1.0%	$1,230-$1,630	$1,475-$1,865	$1,930-$2,430	None
6	The Reserve at Eisenhower	250	2001	5	2.0%	—	$1,450-$1,970	$1,785-$1,935	None
7	Meridian at Braddock Station	480	1991-2002	4	0.8%	$1,195	$1,285-$1,365	$1,675-$1,830	None
8	The Summit	142	1980	2	1.4%	—	$1,335-$1,454	$1,631-$1,795	All
9	3001 Park Center	326	1989	4	1.2%	—	$1,065-$1,585	$1,585-$2,130	None
10	London Park Towers	458	1963	15	3.3%	$896-$1,010	$1,056-$1,207	$1,465-$1,552	All
11	Southern Towers	2,293	1964	8	0.3%	$775-$860	$945-$1,020	$1,250-$1,395	All
12	Eos 21 Apartments	1,200	1963-67	98	8.2%	$930	$1,100-$1,150	$1,420-$1,465	Ht., ckg., electricity
13	Cascade at Landmark	227	1990	6	2.6%	—	$1,212-$1,650	$1,495-$1,766	None
14	Carlyle Mill	317	2002	4	1.3%	—	$1,585-$1,900	$1,830-$2,400	None
	Market Totals/Averages	7,871		231	2.9%	$760-$1,630	$928-$1,900	$1,186-$2,430
Subject: Riverside Park (5/06)		1,222	1968-70	252	20.6%	$780-$895est.	$990est.	$1,290est.	None (RUBS)

The rentals cited herein include a variety of rental projects ranging in age from 1948 to new Class A projects built in the last few years. Market rents have been estimated based on the subject’s rent roll, recent leasing history, street rents and market data.

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Estimate of Apartment Income

The subject’s economic rents on an “As Is” basis are estimated in consideration of current and past scheduled rents and the rental rates reported at the comparable rental projects. Economic rents for the subject condition are generally within the range of the current streets and are reasonable based upon the subject’s recent history and comparable rental data. The projected economic rents are toward the lower end of the range of rents exhibited by the rent comparables by unit type. Some of the subject’s apartments have already been renovated and lease for $100 per month premiums. Some of the subject’s units also are leased at $10 per month premiums for floor level or for premium views. These premiums are included in the scheduled rent ranges below. The following chart contains a summary of the estimated economic rents assuming “As Is” condition prior to renovation as compared to the subject’s current scheduled rents according to the May 25, 2006 rent roll and the reported street rents.

No. of	Unit Room Count						Total		SF Area		No. Units				Scheduled Rents						Total		Market		Total
Units	Tot		BR		ba		Rooms		Per Unit		Vacant		Street Rents		Min		Max		Avg		Rents		Rents		Rents
14		2		E		1		28		289		0	$	739-779	$	750	$	819	$	785	$	10,996	$	780	$	10,920
140		2		E		1		280		500		3	$	859-889	$	720	$	949	$	844	$	118,096		860	$	120,400
70		2		E		1		140		550		20	$	929-959	$	787	$	1,009	$	885	$	61,962		895	$	62,650
741		3.5		1		1		2594		820		122	$	949-1,049	$	764	$	1,180	$	976	$	723,531		990	$	733,590
257		4.5		2		2		1157		1134		107	$	1,299-1,329	$	1,118	$	1,489	$	1,291	$	331,851		1,290	$	331,530
1222	< TOTALS >							4199				252									$	1,246,436			$	1,259,090

Potential gross apartment rent is projected at $1,259,090 per month or $15,109,080 per year. The above economic rents include no utilities since the subject’s residents are billed for their utility usage under a Ratio Utility Billing System (RUBS). The RUBS program at the subject charges tenants for their use of electricity, water and sewer usage and trash removal.

This valuation has estimated the subject’s c “As Is” market value prior to renovation in accordance with the client’s request. As a result, the subject’s economic rents are based upon current conditions at the subject assuming stabilized property conditions. As of May 25, 2006, 252 of the subject’s 1,222 units were reported as vacant. This elevated vacancy rate is attributed to the subject’s ownership’s decision to allow units to remain vacant in anticipation of the pending renovation program.

Concessions

The subject’s operating history indicates concessions of $111,403 (0.8%) in 2002, $75,143 (0.6%) in 2003, $101,870 (0.8%) in 2004, $439,950 (3.0 %) in 2005 and $391,275 (2.6%) for annualized 2006 (four months). None of the fourteen rent comparables surveyed for this appraisal reported the use of concessions. The lack of concessions in the market is evidence of a strong rental market. Based on the subject’s reported history and in consideration of market data, rent concessions have been projected at 1.0% of gross apartment rent for this projection.

RIVERSIDE PARK APARTMENTS 54

Vacancy and Collection Loss

The subject’s May 25, 2006 rent roll shows 252 vacant units (20.6%) including down units. As noted previously, the subject’s renovation has required the ownership to position the project for the upcoming construction. As a result, some units are being intentionally vacated so that apartments can be renovated. The May 13, 2005 rent roll indicated 168 vacant units while the December 16, 2004 exhibited 70 vacant units. The December 2004 rent roll is more reflective of the subject’s vacancy rate on a stabilized basis which is the premise of this appraisal despite the subject’s current elevated vacancy rate. The subject’s vacancy history was reported as follows: 5.4% in 2002; 4.1% in 2003 and 5.6% in 2004. These vacancy rates reflect the subject’s occupancy prior to the onset of increased move-outs prior to the renovation currently underway as reflected in the subject’s 2005 vacancy loss rate of 15.9% and annualized 2006 rate of 24.2%. Following is a summary of the vacancy rates reported at the rent comparables which indicate a sub-market vacancy rate of 2.9%.

	Project Name	# Units		Yr Blt		# Vac		Vac Rate
1	Huntington Gateway		443		1990		7		1.6	%
2	Belle Haven Towers		569		1964-73		9		1.6	%
3	Hunting Point on the Potomac		530		1948		60		11.3	%
4	Carydale East		233		1965		5		2.1	%
5	Meridian at Carlyle		403		2001		4		1.0	%
6	The Reserve at Eisenhower		250		2001		5		2.0	%
7	Meridian at Braddock Station		480		1991-2002		4		0.8	%
8	The Summit		142		1980		2		1.4	%
9	3001 Park Center		326		1989		4		1.2	%
10	London Park Towers		458		1963		15		3.3	%
11	Southern Towers		2,293		1964		8		0.3	%
12	Eos 21 Apartments		1,200		1963-67		98		8.2	%
13	Cascade at Landmark		227		1990		6		2.6	%
14	Carlyle Mill		317		2002		4		1.3	%
	Market Totals/Averages		7,871				231		2.9	%

Some under-reporting of vacancies at the rent comparables is assumed. For the purposes of this valuation, the subject’s vacancy loss rate is projected at 5.5% based on the subject’s history between 2002 and 2004 ranging from 4.1% to 5.6% and in consideration of the market.

RIVERSIDE PARK APARTMENTS 55

Collection losses at the subject were 1.1% in 2002, 1.3% in 2003, 0.7% in 2004, 0.4% in 2005 and 0.2% for annualized 2006. A collection loss rate of 1.0% is projected for the subject. The appraiser has applied a combined vacancy and collection loss allowance of 6.5% against the economic apartment rent potential for the subject. The following chart summarizes the subject’s history of rental apartment income, concessions, vacancies and collection losses along with the undersigned’s projections:

SUMMARY OF APARTMENT RENTAL INCOME

Riverside Park	01-Jan-02			01-Jan-03			01-Jan-04			01-Jan-05			2006 Annualized			Appraiser's
1222 UNITS	31-Dec-02			31-Dec-03			31-Dec-04			31-Dec-05			4 months			Projection
Potential Gross Apartment Rent	$	13,440,333		$	13,208,382		$	13,514,635		$	14,493,249		$	14,967,078		$	15,109,080
Less Concessions		(111,403	)		(75,143	)		(101,870	)		(439,950	)		(391,275	)		(151,091	)
Adjusted Potential Gross Apartment Rent	$	13,328,930		$	13,133,239		$	13,412,765		$	14,053,299		$	14,575,803		$	14,957,989
Less Vacancies		(715,498	)		(537,419	)		(754,981	)		(2,236,930	)		(3,532,614	)		(822,689	)
Less Collection Losses		(150,549	)		(170,902	)		(88,156	)		(54,741	)		(28,149	)		(149,580	)
Total Vacancy and Collection Losses		(866,047	)		(708,321	)		(843,137	)		(2,291,671	)		(3,560,763	)		(972,269	)
Effective Gross Apartment Rent	$	12,462,883		$	12,424,918		$	12,569,628		$	11,761,628		$	11,015,040		$	13,985,720
Vacancy Percentage		-5.4	%		-4.1	%		-5.6	%		-15.9	%		-24.2	%		-5.5	%
Collection Loss Percentage		-1.1	%		-1.3	%		-0.7	%		-0.4	%		-0.2	%		-1.0	%
Total V & C Percentage		-6.5	%		-5.4	%		-6.3	%		-16.3	%		-24.4	%		-6.5	%

The appraiser’s gross apartment rent is only 1.0% above the May 25, 2006 rent roll that includes market rents for vacant units.

Commercial Income

As currently configured, the subject’s commercial component consists of 3 commercial units located in grade level spaces in Buildings I and II. The commercial space contains approximately 3,133 square feet of occupied space according to square foot figures reported by management. The following is a summary of the subject’s commercial leases along with unit sizes, current lease terms, current scheduled monthly rent per lease information provided to the undersigned effective May 25, 2006 and rent per square foot.

						Scheduled
		Lease				Monthly Rent
Location	Tenant	Area(s.f.)		Expiration		Rent		P.S.F.
1-107	D.F. Reynolds &
	J.G. Zaletel, DDS		1,134		12/31/2001	$	1,600	$	16.93
2-103	Variety Mart		1,710		12/31/2006	$	2,357	$	16.54
2-100	Riverside Cleaners		289		4/30/2004	$	801	$	33.26
TOTAL			3,133			$	4,758	$	18.22

* Tenants with expired leases are occupying space on a “month-to-month” basis

RIVERSIDE PARK APARTMENTS 56

The subject’s commercial units are rented on a similar basis as the apartments with utilities paid by the tenant. The subject’s dentist, convenience store and dry cleaner have occupied space at the subject for many years and the income stream is considered stable. The rental rates for the above-cited commercial tenants are virtually the same as the lease rates from an appraisal completed by the undersigned four years ago in June 2002.

Summary of Commercial Rent Comparables

COMMERCIAL RENT COMPARABLE #1
Shirlington House Apartments
140 South Van Dorn Street
Arlington County, VA

This is a 436-unit 10-story elevator-served apartment project that has a convenience store. The current lease rate for the convenience store at this project, which occupies a 1,050 SF space, is $18,336 per year or $17.46 per square foot plus a $35 per month water charge. This building has a comparable location.

COMMERCIAL RENT COMPARABLE #2
Mt. Zephyr Business Park
8305 Richmond Highway
Alexandria, Fairfax County, VA

This two-story professional office building has 1,450 square feet of medical office space available and is offered at a lease rate of $20.45 per square foot on a net basis. This first-floor space represents a sub-lease through November 2007. This comparable has frontage along Route 1 south of the subject in the Hybla Valley area of Fairfax County. The quality of the space is slightly superior relative to the subject property. Location is generally similar although exposure on Route 1 is superior to the subject.

COMMERCIAL RENT COMPARABLE #3
Franconia Professional Center
6180 Old Franconia Road
Alexandria, Fairfax County, VA

This 48,000 plus square foot office building built in 1988 has 8,899 square feet available for lease with unit sizes ranging from 453 square feet to 1,960 square feet. The asking lease rates for these office suites range from $18.00 to $20.00 per square foot on a net basis. The location of this office building is inferior to the subject’s since it is not in as close a proximity to the City of Alexandria and the Capital Beltway as the subject. Exposure is considered superior to the subject property.

RIVERSIDE PARK APARTMENTS 57

The scheduled lease rates of the subject’s three commercial spaces range from $16.54 per square foot to $33.26 per square foot. The cleaner’s lease rate is at a higher average square foot figure due to the small size of the space at only 289 square feet. The cited commercial lease comparables generally support the lease rates of the subject’s current existing commercial tenants.

The subject’s three commercial units are rented similar to a residential unit with utilities paid for by the tenants. The average per square foot rent is $18.22 for the three occupied spaces at their scheduled rents. Based upon scheduled rents for the three spaces, commercial lease income is projected at $57,096 annually or $18.22 per square foot. A 10% vacancy and collection loss allowance is applied to this gross income projection equating in effective commercial income of $51,386 per year.

Riverside Park	01-Jan-02		01-Jan-03		01-Jan-04		01-Jan-05		2006 Annualized		Appraiser's
1222 UNITS	31-Dec-02		31-Dec-03		31-Dec-04		31-Dec-05		4 months		Projection
Commercial Rent	$	95,395	$	61,109	$	69,342	$	61,881	$	57,108	$	51,386

OTHER INCOME

Other income is produced at the subject in various forms including month-to-month fees, short term lease fees, utility/RUBS income, net corporate rent, laundry income, cable TV income, telephone income, antenna income, miscellaneous income, late charges, NSF charges, non-refundable administrative fees, deposit forfeitures, pet fees, lease cancellation fees and application fees. Some of the other charges at the subject include the following: application fees — $40; $300 security deposit; $250 administrative fee; 10% late fee after the 5^th of the month; termination fees equal to 1.5 months rent.

The subject’s history and projection of total other income including commercial income is shown on the following chart:

SUMMARY OF OTHER INCOME CATEGORIES

Riverside Park	01-Jan-02			01-Jan-03			01-Jan-04		01-Jan-05		2006 Annualized		Appraiser's
1222 UNITS	31-Dec-02			31-Dec-03			31-Dec-04		31-Dec-05		4 months		Projection
Month to Month	$	70,618		$	75,828		$	51,850	$	41,287	$	44,931	$	56,300	Based on 2003-2005 history
Short Term Lease Fee	$	8,261		$	42,336		$	23,470	$	14,373	$	11,871	$	26,700	Based on 2003-2005 history
Commercial Rent	$	95,395		$	61,109		$	69,342	$	61,881	$	57,108	$	51,386	2006 history less 10% V&CL
RUBS income — electricity	$	589,054		$	582,941		$	629,481	$	559,589	$	473,376	$	590,700	Based on 2003-2005 history
RUBS income — water/sewer	$	256,280		$	233,623		$	227,621	$	205,960	$	189,375	$	222,400	Based on 2003-2005 history
RUBS income — trash, misc.	$	0		$	0		$	0	$	110,743	$	86,781	$	98,800	Based on 2003-2005 history
Net Corporate Rent	$	(2,268	)	$	28,216		$	14,362	$	1,973	$	2,460	$	2,000	Based on 2005 history
Laundry Income	$	202,842		$	195,941		$	221,665	$	176,912	$	169,548	$	198,200	Based on 2003-2005 history
Cable TV income	$	56,232		$	42,702		$	54,903	$	41,723	$	53,316	$	46,400	Based on 2003-2005 history
Telephone Income	$	29,414		$	18,022		$	27,869	$	23,066	$	44,244	$	23,000	Based on 2003-2005 history
Antenna income	$	19,702		$	15,766		$	17,720	$	12,935	$	12,636	$	12,600	Based on 2005 history
Miscellaneous Income	$	18,452		$	(83,203	)	$	11,692	$	16,958	$	45,633	$	14,300	Based on 2004-2005 history
Late Charges	$	78,001		$	141,788		$	61,766	$	63,768	$	56,718	$	62,800	Based on 2004-2005 history
NSF Charges	$	7,250		$	6,480		$	4,770	$	3,395	$	3,255	$	4,900	Based on 2003-2005 history
Non-refundable Administrative Fees	$	72,680		$	88,140		$	75,050	$	80,000	$	53,250	$	81,100	Based on 2003-2005 history
Pet fees	$	16,816		$	18,853		$	22,741	$	25,766	$	21,183	$	22,500	Based on 2003-2005 history
Lease Cancellation	$	87,989		$	157,493		$	148,214	$	84,579	$	56,634	$	130,100	Based on 2003-2005 history
Application Fees	$	18,685		$	29,972		$	27,570	$	29,340	$	24,540	$	29,000	Based on 2003-2005 history
Total Effective Gross Other Income	$	1,625,403		$	1,656,007		$	1,690,086	$	1,554,248	$	1,406,859	$	1,673,186

Since these other income categories are reported on an effective gross basis, no adjustment for vacancy and collection losses is required.

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Income Conclusion

Following is a summary of the appraiser’s income projection for the subject assuming habitable condition with stabilized operations. The subject property is currently operated at an elevated vacancy rate of 20.6% in anticipation of a substantial renovation that was recently begun. Currently, 252 units are vacant as the subject’s buildings are being readied for a rehab program that was recently started in June 2006. This valuation is based upon the subject’s “As Is” condition before the start of renovation as of the date of this inspection (May 25, 2006) in accordance with the client’s instructions.

			Potential					Effective
Potential Gross Apartment Rent			$	15,109,080
Less Concessions	1.0	%		(151,091	)
Adjusted Potential Gross Apartment Rent				14,957,989
Total Vacancy & Collection Losses	6.5	%				(972,269	)
Effective Gross Apartment Rent									13,985,720
Effective Gross Other Income				1,673,186					1,673,186
Total Gross Income			$	16,631,175				$	15,658,906

EXPENSE NOTES

The appraiser analyzed expense statements for comparable properties along with the subject’s January 1, 2002 through April 30, 2006 history. The owner’s income and expense statements have been converted into the consolidated statement shown at the end of this section. In making this projection, consideration has been given to current rates where applicable, the reported history at the subject and comparable expense data. The following explanatory notes are for the one-year projection period beginning on the effective date of this appraisal based upon the subject’s “As Is” condition prior to renovation with stabilized operations.

Fixed Expenses

1. Real estate taxes are based upon the Fairfax County Assessor’s estimate of market value (703-222-8234). Properties are reassessed annually with the assessed values set at 100% of fair market value. Assessments are established on a calendar year basis. Tax rates are set between April and June of each year and are applied to the assessment which is in effect on the preceding January 1. The subject’s 2006 assessment will be utilized by Fairfax County to calculate the subject’s tax liability for the current calendar year. The current assessment, rates and taxes are reported below. The following Map Reference Number identifies the subject’s parcel: 0833-01-0101. The 2006 county tax rate is $0.89 per $100 of assessed value. In addition, the subject’s rate includes $.001 per $100 of assessed value as a Gypsy Moth Control tax. The overall tax rate for the subject is $0.90.

Real estate tax assessments have been increasing for the subject between 2003 and 2006 and have also been rising since 2000. Over the 2003 through 2006 period, the tax rate has declined from $1.161 in 2003 to $1.131 in 2004 to $1.001 in 2005 to $0.90 in 2006. Thus, as assessments have been increasing for the majority of properties, the tax rate for Fairfax County has been adjusted downward to lessen the impact of these higher assessments. The subject’s real estate tax expense actually decreased in 2005 and 2006.

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The subject’s parcel is currently assessed at $90,090,900 or $73,724 per unit. Since the assessed value differs from the value appraised herein, a check of the reasonableness of the subject’s assessment has been made. The following apartment projects from the subject’s sub-market were researched for tax assessment information. These comparables represent a wide array of assessments that bracket the subject’s current assessment and proposed assessment.

Real Estate Tax Assessment Comparables

						Assessment
#	Project Name	Year Built		# Units		Per Unit
1	Munson Hill		1963		279	$	65,442
2	Fairfax Towers		1977		415	$	97,045
3	Belle Haven Towers		1964/73		569	$	85,275
4	Ravenwood Towers		1962		310	$	98,247
Subject	Riverside Park (2006)		1968-70		1222	$	73,724
Subject	Riverside Park (estimated)		1968-70		1222	$	92,155

The appraiser also researched recent Fairfax County sales to determine the increase in assessment subsequent to sale. Ravenwood Towers which sold in August 2004 for $32,670,000 saw its assessment increase by 24% to $28,282,660 in 2005. Skyline Towers, which sold for a recorded price of $165,500,000 in December 2005, saw its assessment increase 30.6% to $74,260,000 for 2006. The subject’s assessment for purposes of this appraisal is estimated at 25% above the current assessment rounded to $112,614,000 or $92,155 per unit since an appraisal assumes a sale of the subject property. If the subject were sold at the value appraised herein, it is likely that in the tax year following the sale (2007) the assessment would be adjusted to a level more closely reflecting the recorded sales price.

The following table summarizes the subject’s current, historical and projected real estate tax assessments and expenses.

Real Estate Tax Calculations	2003		2004			2005			2006			2007 (Projected)
Land Assessment	$	28,106,000	$	34,216,000		$	36,660,000		$	73,320,000
Improvement Assessment	$	42,067,215	$	47,125,455		$	49,390,800		$	16,770,900
Total Assessment	$	70,173,215	$	81,341,455		$	86,050,800		$	90,090,900		$	112,614,000
Indicated Assessment Increase		—		15.9	%		5.8	%		4.7	%		25.0	%
Current Real Estate Tax Rate		1.161		1.131			1.001			0.900			0.900
Indicated Real Estate Tax Expense	$	814,711	$	919,972		$	861,369		$	810,818		$	1,013,526
Rounded	$	814,700	$	920,000		$	861,400		$	810,800		$	1,013,500
Real Estate Tax Expense/Unit	$	667	$	753		$	705		$	664		$	829
Indicated Increase		—		12.9	%		-6.4	%		-5.9	%		25.0	%

RIVERSIDE PARK APARTMENTS 60

The subject’s 2006 assessment of $90,090,900 will be in effect through December 31, 2006 or for approximately six months of the 12-month projection period. The subject’s assessment is projected by the appraiser to increase to $112,614,000 for the January 1, 2007-December 31, 2007 period which includes the remaining six months of the subject’s 12-month projection period assuming a sale of the subject. In estimating the subject’s real estate tax expense for the 12-month projection period, a blended assessment including the current assessment for the first six months and the projected 2007 assessment for the final six months has been utilized. The following table displays the subject’s projected real estate tax expense assuming stable tax rates.

Annual Real Estate Tax Expense 2006	$	810,800
Monthly Real Estate Tax Expense 2006	$	67,567
Number of Months in Projection		6
First Portion of Real Estate Tax Projection			$	405,402
Annual Real Estate Tax Expense 2007	$	1,013,500
Projected Monthly Real Estate Tax in 2007	$	84,458
Number of Months in Projection		6
Second Portion of Real Estate Tax Projection			$	506,748
Weighted Average Real Estate Tax Expense			$	912,150
	Rounded		$	912,200

If the subject’s assessment were increased 25% to $112,614,000 in 2007, a rent increase of about $14 per month would be required to offset the increased real estate tax expense.

2. Other taxes or assessments expenses were reported as $1,824 in 2002, $2,070 in 2003, $2,398 in 2004 and $8,431 in 2005. The projected expense is based upon the subject’s average 2004-2005 history at $5,400 per year or $4 per unit.

3. Insurance expenses were $249,179 in 2002, $259,777 in 2003, $286,943 in 2004 and $297,294 in 2005. The expense is projected at 3% above the 2005 history at $306,200 or $251 per unit. This projection is considered reasonable in consideration of six of the cited expense comparables which indicated insurance expenses ranging from $218 to $307 per unit.

4. License expenses were reported as $37,009 in 2002, $45,806 in 2003, $50,178 in 2004 and $37,610 in 2005. The projected expense is based upon the subject’s average 2003-2005 history plus 5% at $46,800 or $38 per unit. This expense includes business license fees which are charged at a rate of $.26 per $100 of effective gross income (EGI) plus other miscellaneous taxes. Four of the attached expense comparables exhibit license-related expenses in a tight range of $35 to $40 per unit bracketing the projected expense for the subject property.

RIVERSIDE PARK APARTMENTS 61

Operational Expenses

7. Gas expenses totaled $155,149 in 2002, $149,985 in 2003, $175,400 in 2004 and $260,667 in 2005. Gas service is provided by Washington Gas Energy Services (888-236-9437). Gas costs continue to fluctuate based on seasonal climate changes, supply and demand and world events and have recently trended higher. The subject passes the cost of most utilities onto the tenants (RUBS). Despite this, the subject’s owner remains responsible for some utility costs associated with common areas. The projected expense is based upon the subject’s most recent full-year 2005 history plus 10% at $286,700 per year or $235 per unit.

8. Electricity expenses were $875,075 in 2002, $906,456 in 2003, $867,882 in 2004 and $876,614 in 2005. The majority of the cost for electricity at the subject is recouped through the RUBS with electricity income at $559,589 in 2005. The subject’s supplier, Dominion Virginia Power (888-667-3000), reports that no rate increases are anticipated through 2010 due to a rate freeze. Electricity expenses are projected based upon the subject’s 2005 history plus 5% at $920,400 per year or $753 per unit. Based on the projection of RUBS electricity income herein, net electricity expenses equate to about $317,025 or $259 per unit.

9. Water and sewer service is provided to the subject by the Fairfax County Water Authority (703-698-5800) and the Fairfax County Department of Public Works (703-246-5015), respectively. The water rate increased 3.4% while sewer rates increased 2.5% effective April 1, 2006. Water and sewer expenses were reported as follows: $196,039 in 2002, $357,181 in 2003, $317,436 in 2004 and $277,596 in 2005. The projected expense is based upon the subject’s average 2003-2005 history plus 5% at $333,300 per year or $273 per unit.

10. Trash removal expenses were reported as follows: $93,879 in 2002; $102,861 in 2003; $85,425 in 2004 and $86,493 in 2005. Six of the eight expense comparables indicate trash removal expenses ranging from $68 to $82 per unit. The expense is projected at 3% above the 2005 history at $89,100 per year or $73 per unit. Trash removal services are provided by Potomac Disposal Services of Virginia, LLC. It is noted that the subject bills tenants for trash removal (RUBS) which is included as other income.

11. Pest control expenses were reported as follows: $5,487 in 2002; $8,367 in 2003; $7,382 in 2004 and $16,520 in 2005. The projected expense is based upon the subject’s average 2003 through annualized 2005 history plus 5% at $11,300 per year or $9 per unit.

12. Building maintenance and repairs expenses were $211,217 in 2002, $374,755 in 2003, $396,860 in 2004 and $380,561 in 2005. The expense is projected in consideration of the subject’s average history for this expense item between 2003 and annualized 2005 plus 5% at $403,300 per year or $330 per unit. In addition to building maintenance and repairs, a separate expense for replacement reserves is projected later in this analysis. Replacement reserves are projected at $442 per unit. Total repairs and maintenance plus reserves are $772 per unit which should be adequate to properly maintain the subject.

RIVERSIDE PARK APARTMENTS

62

13. Interior and exterior decorating expenses were $121,852 in 2002, $190,124 in 2003, $186,153 in 2004 and $128,603 in 2005. The projected expense is based upon the subject’s average history between 2003 and 2005 plus 5% at $176,700 per year or $145 per unit. The projected expense is supported by the expense comparables which ranged from $109 to $200 per unit excluding three extremes.

14. Cleaning expenses were reported as follows: $293,865 in 2002; $323,022 in 2003; $334,236 in 2004 and $352,008 in 2005. The projected expense is based upon the subject’s average history between 2003 and 2005 plus 5% at $353,200 per year or $289 per unit.

16. Elevator maintenance expenses were $48,269 in 2002, $45,609 in 2003, $47,496 in 2004 and $48,681 in 2005. The projected expense is based upon the subject’s 2005 history plus 3% at $50,100 per year or $41 per unit. The subject property is served by twelve passenger elevators. Apex Elevator Corporation provides elevator maintenance services at the subject property.

17. Pool maintenance expenses were reported as follows: $37,366 in 2002; $52,950 in 2003; $61,396 in 2004 and $41,480 in 2005. The projected expense is based upon the subject’s 2003-2005 history plus 5% at $54,500 per year or $45 per unit. American Pool Service, Inc provides pool management services at the subject property. Two expense comparables indicated pool expenses at $47 per unit in support of this projection.

18. Parking area maintenance and snow removal expenses have fluctuated widely over the reported history as follows: $34,484 in 2003; $4,760 in 2004 and $11,203 in 2005. The projected expense is stabilized based upon the average 2003-2005 history plus 5% at $17,700 per year or $14 per unit. No separate expense for this item was reported during the 2002 history.

19. Gardening expenses were $73,601 in 2002, $78,635 in 2003, $85,133 in 2004 and $51,502 in 2005. The projected expense is stabilized based upon the average 2003-2005 history plus 5% at $75,300 per year or $62 per unit. Complete Landscaping provides gardening-related services at the subject property. Five expense comparables indicated gardening expenses ranging from $48 to $87 per unit in support of this projection.

20. Non-resident management fees typically range from 3% to 6% of effective gross annual income (EGI). The subject’s history for this expense item reflects nonresident management fees at 4% of gross collections. The subject property is professionally managed by an entity related to ownership and is not representative of an arms-length market rate fee. The appraiser interviewed three local management companies for this assignment (Equity Management, Gates Hudson Associates and CT Management) to determine an appropriate market management fee rate. These managers indicated that the subject could be managed for a fee between 2% and 2.75%. For the purposes of this analysis, it is estimated that the subject could be managed for a 2.5% fee in consideration of the subject’s large project size with 1,222 units, location and rent levels. At 2.5% of the effective gross income projected herein, nonresident management fees equate to $320 per unit.

RIVERSIDE PARK APARTMENTS 63

21-30. Payroll expenses are projected in consideration of the subject’s actual history between January 2002 and April 2006. The appraiser was provided with a payroll schedule dated May 31, 2006 showing 23 employees including 13 office employees and 10 maintenance employees. The following chart summarizes the subject’s history for payroll related expenses and the appraiser’s projection for these various expense items:

PAYROLL SUMMARY

Riverside Park	01-Jan-02			01-Jan-03			01-Jan-04			01-Jan-05			2006 Annualized			Appraiser’s
1222 UNITS	31-Dec-02			31-Dec-03			31-Dec-04			31-Dec-05			4 months			Projection
21 Resident manager’s salary	$	378,092		$	365,964		$	405,215		$	474,829		$	524,397		$	489,100
25 Engineer’s salary	$	120,451		$	205,483		$	235,957		$	249,084		$	97,164		$	256,600
29 Other salaries	$	14,248		$	61,778		$	112,295		$	81,620		$	64,110		$	84,100
Subtotal Salaries	$	512,791		$	633,225		$	753,467		$	805,533		$	685,671		$	829,800
30 Payroll taxes & benefits	$	153,106		$	149,886		$	188,072		$	223,548		$	261,234		$	207,500
Payroll taxes % of Salaries		29.9	%		23.7	%		25.0	%		27.8	%		38.1	%		25.0	%
22 Resident manager’s apt. allowance	$	26,167		$	0		$	0		$	0		$	0		$	0
24 Apartment allowances	$	0		$	16,996		$	36,960		$	51,729		$	39,369			39,400
28 Security related expenses	$	165,552		$	177,457		$	168,546		$	181,060		$	186,714		$	186,700
Total Payroll and Related Expenses	$	512,791		$	633,225		$	1,147,045		$	1,261,870		$	1,172,988		$	1,263,400
Per Unit	$	420		$	518		$	939		$	1,033		$	960		$	1,034

Resident manager’s salaries and engineer’s salaries are projected based upon the subject’s most recent 2005 history plus 3% to account for increased salary expenses at $489,100 and $256,600 per year, respectively. Other salaries are also projected based upon the subject’s 2005 history plus 3% at $84,100 per year or $69 per unit. Payroll taxes and benefits are projected at 25% of resident manager, engineer and other salaries based on the history. Security related expenses are projected based upon the subject’s annualized 2006 history at $186,700 per year or $153 per unit. In addition to salary-related expenses, the appraiser projected quarters allowances based upon the annualized 2006 history at $39,400 per year or $32 per unit. The appraiser was provided with a list of employee units that includes two rent-free units and three partially discounted units. The total payroll and related expenses for the subject are projected at $1,263,400 per year or $1,034 per unit. The projected expense is bracketed by the older vintage expense comparables that range from $857 to $1,245 per unit.

31. Advertising expenses were reported as follows: $91,929 in 2002; $118,542 in 2003, $105,403 in 2004 and $165,010 in 2005. The projected expense is based upon the subject’s 2005 history plus 3% at $170,000 per year or $139 per unit with support from the attached expense comparables which ranged from $91 to $224 per unit with an average of $141 per unit.

32. Telephone expenses were $49,003 in 2002, $60,043 in 2003, $57,144 in 2004 and $56,507 in 2005. The projected expense is based upon the subject’s average 2003-2005 history plus 5% at $60,800 per year or $50 per unit. Seven of the attached expense comparables indicate telephone expenses ranging from $28 to $54 per unit bracketing the projected expense.

33. Legal and Audit expenses were reported as $39,964 in 2002, $44,020 in 2003, $21,277 in 2004 and $46,009 in 2005. The projected expense is based upon the subject’s average 2003-2005 history plus 5% at $39,000 per year or $32 per unit.

35. Office/Model rent expenses were $22,092 in 2002, $38,848 in 2003, $37,382 in 2004 and $37,359 in 2005. The projected expense is based upon the subject’s 2005 history plus 3% at $38,500 per year or $32 per unit.

RIVERSIDE PARK APARTMENTS 64

36. Administrative and miscellaneous expenses were $133,708 in 2002, $133,130 in 2003, $169,295 in 2004 and $191,149 in 2005. The projected expense is based upon the subject’s average 2003-2005 history plus 5% at $172,800 per year or $141 per unit. Six of the attached expense comparables exhibit administrative and miscellaneous expenses ranging from $113 to $142 per unit bracketing the projected expense.

37-42. Replacement reserves have been calculated based upon straight-line recapture of short-lived components over their useful lives. The underlying premise is that periodic installments are made into a reserve account to provide sufficient funds to replace components at the ends of their useful lives. Replacement reserves for the subject in its current “As Is” condition are computed as follows:

REPLACEMENT RESERVES

Item	# Units		$/Unit		Total		Life		Reserve
Carpets — Units		1222	$	1,000	$	1,222,000		7	$	174,600
Carpets — Hallways		1		180,000		180,000		7		25,700
Ranges & Refrigerators		1222		770		940,940		12		78,400
Microwave Ovens		1222		150		183,300		10		18,300
Dishwashers		988		190		187,720		10		18,800
Garbage Disposal		1222		50		61,100		10		6,100
HVAC units		2477		650		1,610,050		12		134,200
Hot water heaters		3		200,000		600,000		10		60,000
Roofs		1804		200		360,800		15		24,100
Total Reserves			$	442					$	540,200

Total projected expenses and reserves are $6,718,400 or $5,498 per unit. This estimate is supported by the subject’s history and comparable expense data presented on the following pages. The attached expense comparables exhibit total expenses on a per unit basis ranging from $5,078 to $6,157 with varying utility allocations. The subject with most utilities included in the expense history and much of it recouped by the owner via RUBS, the subject’s expenses with utilities on a net basis equate to $4,752 per unit.

RIVERSIDE PARK APARTMENTS 65

CONSOLIDATED STATEMENT

Riverside Park	01-Jan-02			01-Jan-03			01-Jan-04			01-Jan-05			2006 Annualized			Appraiser’s			Projection
1222 UNITS	31-Dec-02			31-Dec-03			31-Dec-04			31-Dec-05			4 months			Projection			per Unit
Potential Gross Apartment Rent	$	13,440,333		$	13,208,382		$	13,514,635		$	14,493,249		$	14,967,078		$	15,109,080		$	12,364
Less Concessions		(111,403	)		(75,143	)		(101,870	)		(439,950	)		(391,275	)		(151,091	)		(124	)
Adjusted Potential Gross Apartment Rent	$	13,328,930		$	13,133,239		$	13,412,765		$	14,053,299		$	14,575,803		$	14,957,989			12,241
Less Vacancies		(715,498	)		(537,419	)		(754,981	)		(2,236,930	)		(3,532,614	)		(822,689	)		(673	)
Less Collection Losses		(150,549	)		(170,902	)		(88,156	)		(54,741	)		(28,149	)		(149,580	)		(122	)
Total Vacancy and Collection Losses		(866,047	)		(708,321	)		(843,137	)		(2,291,671	)		(3,560,763	)		(972,269	)		(796	)
Effective Gross Apartment Rent		12,462,883			12,424,918			12,569,628			11,761,628			11,015,040			13,985,720			11,445
Month to Month		70,618			75,828			51,850			41,287			44,931			56,300			46
Short Term Lease Fee		8,261			42,336			23,470			14,373			11,871			26,700			22
Commercial Rent		95,395			61,109			69,342			61,881			57,108			51,386			42
RUBS income — electricity		589,054			582,941			629,481			559,589			473,376			590,700			483
RUBS income — water/sewer		256,280			233,623			227,621			205,960			189,375			222,400			182
RUBS income — trash, misc.		0			0			0			110,743			86,781			98,800			81
Net Corporate Rent		(2,268	)		28,216			14,362			1,973			2,460			2,000			2
Laundry Income		202,842			195,941			221,665			176,912			169,548			198,200			162
Cable TV income		56,232			42,702			54,903			41,723			53,316			46,400			38
Telephone Income		29,414			18,022			27,869			23,066			44,244			23,000			19
Antenna income		19,702			15,766			17,720			12,935			12,636			12,600			10
Miscellaneous Income		18,452			(83,203	)		11,692			16,958			45,633			14,300			12
Late Charges		78,001			141,788			61,766			63,768			56,718			62,800			51
NSF Charges		7,250			6,480			4,770			3,395			3,255			4,900			4
Non-refundable Administrative Fees		72,680			88,140			75,050			80,000			53,250			81,100			66
Pet fees		16,816			18,853			22,741			25,766			21,183			22,500			18
Lease Cancellation		87,989			157,493			148,214			84,579			56,634			130,100			106
Application Fees		18,685			29,972			27,570			29,340			24,540			29,000			24
Total Effective Gross Other Income		1,625,403			1,656,007			1,690,086			1,554,248			1,406,859			1,673,186			1,369
Effective Gross Income		14,088,286			14,080,925			14,259,714			13,315,876			12,421,899			15,658,906			12,814
FIXED EXPENSES
1 Real Estate Taxes		827,851			814,711			919,972			861,369			913,053			912,200			746
2 Other taxes or assessments		1,824			2,070			2,398			8,431			5,913			5,400			4
3 Insurance		249,179			259,777			286,943			297,294			331,305			306,200			251
4 Licenses		37,009			45,806			50,178			37,610			49,212			46,800			38
5 Unsubordinated ground rent		0			0			0			0			0			0			0
Subtotal: Fixed Expenses	$	1,115,863		$	1,122,364		$	1,259,491		$	1,204,704		$	1,299,483		$	1,270,600		$	1,040
OPERATIONAL EXPENSES
6 Fuel		0			0			0			0			0			0			0
7 Gas		155,149			149,985			175,400			260,667			373,719			286,700			235
8 Electricity		875,075			906,456			867,882			876,614			923,889			920,400			753
9 Water & sewer		196,039			357,181			317,436			277,596			221,619			333,300			273
10 Trash removal		93,879			102,861			85,425			86,493			80,781			89,100			73
11 Pest control		5,487			8,367			7,382			16,520			11,385			11,300			9
12 Building maintenance & repairs		211,217			374,755			396,860			380,561			359,583			403,300			330
13 Interior & exterior decorating		121,852			190,124			186,153			128,603			149,604			176,700			145
14 Cleaning expenses		293,865			323,022			334,236			352,008			338,487			353,200			289
15 Supplies		0			0			0			0			0			0			0
16 Elevator maintenance		48,269			45,609			47,496			48,681			53,979			50,100			41
17 Pool maintenance		37,366			52,950			61,396			41,480			41,505			54,500			45
18 Parking area maint. & snow removal		0			34,484			4,760			11,203			17,550			17,700			14
19 Gardening		73,601			78,635			85,133			51,502			32,403			75,300			62
20 Nonresident management		569,665			565,975			568,003			536,258			495,498			391,500			320
21 Resident manager’s salary		378,092			365,964			405,215			474,829			524,397			489,100			400
22 Resident manager’s apt. allowance		26,167			0			0			0			0			0			0
23 Custodian’s salary		0			0			0			0			0			0			0
24 Custodian’s apt. allowance		0			16,996			36,960			51,729			39,369			39,400			32
25 Engineer’s salary		120,451			205,483			235,957			249,084			97,164			256,600			210
26 Recreation salary		0			0			0			0			0			0			0
27 Telephone operator’s salary		0			0			0			0			0			0			0
28 Security related expenses		165,552			177,457			168,546			181,060			186,714			186,700			153
29 Other salaries		14,248			61,778			112,295			81,620			64,110			84,100			69
30 Payroll taxes		153,106			149,886			188,072			223,548			261,234			207,500			170
31 Advertising		91,929			118,542			105,403			165,010			270,465			170,000			139
32 Telephone		49,003			60,043			57,144			56,507			51,531			60,800			50
33 Legal & audit		39,964			44,020			21,277			46,009			20,772			39,000			32
34 Corporate Unit Expenses		0			0			0			0			0			0			0
35 Office/Model Rent		22,092			38,848			37,382			37,359			23,436			38,500			32
36 Administrative & miscellaneous		133,708			133,130			169,295			191,149			180,615			172,800			141
Subtotal: Operational Expenses	$	3,875,776		$	4,562,551		$	4,675,108		$	4,826,090		$	4,819,809		$	4,907,600		$	4,016
REPLACEMENT RESERVES
37 Carpeting		0			58,045			72,112			73,692			0			200,300			164
38 Ranges, refrigerators, microwaves		18,455			17,074			31,947			5,750			10,062			96,700			79
39 Dishwashers, disposals		65,803			5,070			13,648			3,870			17,517			24,900			20
40 HVAC + HWH		0			0			0			0			0			194,200			159
41 Roof replacement		0			0			0			0			0			24,100			20
42 Paving/miscellaneous replacements		0			0			0			0			0			0			0
Subtotal: Replacement Reserves	$	84,258		$	80,189		$	117,707		$	83,312		$	27,579		$	540,200		$	442
TOTAL EXPENSES & RESERVES	$	5,075,897		$	5,765,104		$	6,052,306		$	6,114,106		$	6,146,871		$	6,718,400		$	5,498
OPERATING EXPENSE RATIO		33.9	%		39.0	%		40.1	%		39.2	%		38.5	%		40.4	%
NET OPERATING INCOME	$	9,012,389		$	8,315,821		$	8,207,408		$	7,201,770		$	6,275,028		$	8,940,506		$	7,316
Capitals excluded from above	$	633,862		$	384,880		$	207,733		$	168,775		$	288,750			—			—
Capitalized @														6.0	%		149,000,000		$	121,931

RIVERSIDE PARK APARTMENTS 66

EXPENSE COMPARABLES

Northern Virginia Elevator Apartment Expense Comparables

Presented on a Per Unit Basis

Comparable
Location	Arlington		Alexandria		Arlington		Arlington		Arlington		Arlington		Arlington		Arlington
Expense Year	2005		2003		2003		2003		2003		2002		2001		2001
# of Units	450-500		150-200		200-250		250-300		200-250		400-450		700-750		350-400
Average Unit Square Footage	753		697		841		682		833		906		844		968
Year Built	1963		1967		1959		1963		1966		1998		1994		1985
Utilities Included in Rent	All		All		All		All		All		None		W & S		None
FIXED EXPENSES
1 Real Estate Taxes		837		559		719		832		843		1,464		1,480		1,295
2 Other taxes or assessments		1		0		0		0		0		16		0		4
3 Insurance		281		218		239		292		307		229		94		80
4 Licenses		39		60		35		36		40		63		0		57
5 Unsubordinated ground rent		0		0		0		0		0		0		0		0
Subtotal: Fixed Expenses		1,157		838		993		1,159		1,190		1,773		1,574		1,436
OPERATIONAL EXPENSES
6 Fuel		0		0		0		0		28		0		0		0
7 Gas		385		350		528		322		331		0		0		0
8 Electricity		346		481		443		518		491		217		426		264
9 Water & sewer		283		434		223		281		74		74	Item 8			14
10 Trash removal		109		82		78		77		68		68		49		70
11 Pest control		9		29		51		31		39		4		0		11
12 Building maintenance & repairs		154		251		338		286		272		208		782		173
13 Interior & exterior decorating		239		109		195		148		200		63		373		148
14 Cleaning expenses		70		338		656		594		488		103		0		124
15 Supplies		24		1		0		0		0		0		0		0
16 Elevator maintenance		45		116		69		83		118		97		0		82
17 Pool maintenance		47		0		97		93		0		47		0		62
18 Parking area maint. & snow removal		28		49		37		51		53		0		1		16
19 Gardening		73		65		68		104		87		17		48		94
20 Nonresident management		437		525		354		369		429		601		574		553
21 Resident manager’s salary		551		386		485		404		279		1,258	Item 29			569
22 Resident manager’s apt. allowance		31		176		80		149		193		14		0		125
23 Custodian’s salary		135		0		0		0		0		0		0		151
24 Custodian’s apt. allowance		0		0		0		0		0		0		0		0
25 Engineer’s salary		281		252		291		190		268	Item 21		Item 29			363
26 Elevator operator’s salary		0		75		0		0		0		0		0		0
27 Telephone operator’s salary		0		0		0		0		0		0		0		0
28 Security personnel’s salary		3		52		162		120		0		0		19		91
29 Other salaries		29		57		36		60		47		0		1,368		0
30 Payroll taxes		216		74		96		62		70		290	Item 29			0
31 Advertising		113		224		136		91		192		143		92		94
32 Telephone		28		42		29		46		41		42		0		54
33 Legal & audit		9		74		79		96		86		41		31		3
34 Leased furniture		0		0		0		0		0		0		0		0
35 Office/Model Rent		0		0		0		0		0		108		0		148
36 Miscellaneous Administrative		124		136		113		115		113		64		142		82
Subtotal: Operational Expenses		3,767		4,377		4,645		4,291		3,968		3,460		3,906		3,292
REPLACEMENT RESERVES
37 Carpeting		0		0		0		0		0		0		106		0
38 Ranges & refrigerators		0		0		0		0		0		0		65		0
39 Dishwashers & disposals		0		0		0		0		0		0		0		0
40 Hot water heaters		0		0		0		0		0		0		0		0
41 Washers and dryers		0		0		0		0		0		0		0		0
42 Miscellaneous replacements		300		300		519		176		59		350		100		350
Subtotal: Replacement Reserves		300		300		519		176		59		350		272		350
TOTAL EXPENSES & RESERVES	$	5,225	$	5,214	$	6,157	$	5,626	$	5,217	$	5,583	$	5,752	$	5,078
TOTAL PAYROLL RELATED EXPENSES	$	1,245	$	1,071	$	1,150	$	985	$	857	$	1,563	$	1,387	$	1,299

RIVERSIDE PARK APARTMENTS 67

CAPITALIZATION

The projected first year Net Income Before Taxes and Debt Service has been capitalized into a value indication with an overall capitalization rate. The Overall Capitalization Rate has been derived through an application of Mortgage-Equity Theory known as the Band of Investment Technique and is further supported by market sales activity. The Band of Investment Technique utilizes a synthesis of mortgage interest and equity dividend rates based upon the following relationship:

R = mf + (l-m) Re
where: R = Overall Capitalization Rate
m = loan to value ratio
f = annual debt service constant
Re = equity dividend rate (cash-on-cash)

Interest only financing is commonly used for acquisitions in the current market. With interest only financing, an equity dividend rate of 5.5% is considered appropriate for the subject’s location, current market conditions and alternative investments such as corporate bonds and long-term treasury issues. Current mortgage terms are 6.15% interest rate; 10-year term, 30-year amortization and a 70% to 80% loan-to-value ratio. The subject’s overall capitalization rate utilizing this Market Rate financing (interest only) is calculated as follows:

Derivation of Overall Rate (Interest Only)
Interest Rate		6.15	%
Amortization	30 Years
Loan-to-Value Ratio		80	%
Equity Dividend Rate		5.5	%

	Constant				Portion
Mortgage		6.15	%	x		80.00	%	=	0.0492
Equity		5.50	%	x		20.00	%	=	0.0110
	Overall Rate								0.0602
	Rounded								6.0	%

In addition to Band of Investment, overall capitalization rates were extracted from available sales data. Following is a summary of overall rates reflected by the comparable sales.

Sale #	Project Name	Location	Units		Sale Date	Year Built		Exp %			Cap Rate
1	Skyline Towers	Fairfax, VA		939	Dec-05		1970		38.3	%		5.4	%
2	Arlington Overlook	Arlington, VA		711	Aug-04		1961		40.1	%		5.5	%
3	Ravenwood Towers	Fairfax, VA		310	Aug-04		1962		44.8	%		6.1	%
4	Georgian Towers	Montgomery, MD		885	Mar-04		1969		40.8	%		7.3	%
5	Chesterfield House	Arlington, VA		101	Nov-04		1968		49.2	%		5.5	%
6	The Alexandria	Alexandria, VA		1524	Jul-04		1963-67		39.7	%		6.0	%
Subject	Riverside Park			1222	N/A		1968-70		40.9	%	6.0%est

RIVERSIDE PARK APARTMENTS 68

The comparable sales represent the most similar and recent apartment project sales from the subject’s Northern Virginia and Montgomery County in Maryland markets that are part of the Washington, DC regional market. The cited sales represent the most similar vintage and similar scale projects available for analysis. With the subject’s large scale at 1,222 units, four of six sales had project sizes ranging from 711 to 1,524 units. The arrayed sales were built between 1961 and 1970 bracketing the subject’s 1968-1970 vintage. These projects were in similar condition relative to the subject with post-sale renovations planned in most cases. The subject’s capitalization rate is estimated at 6.0% based on current investor requirements in consideration of the above overall rate data indicated by the comparable sales in Northern Virginia that range from a low of 5.4% to 6.1%. Despite the increase in mortgage rates over the last twelve months, the lack of supply and the abundance of mortgage capital have maintained capitalization rates in this range. This capitalization rate is for the subject in its “As Is” condition prior to renovation. Area brokers report strong demand for apartments with capitalization rates at low levels due to the availability of favorable financing and in light of alternative investment options. A project of the subject’s scale is rare and would generate great interest among institutional investors. With support from the above sales data and in consideration of the 6.0% overall rate developed by the Band of Investment, the subject’s overall capitalization rate is applied as follows:

Direct Capitalization	Net Income / Overall Rate	=	Value Indication
	$8,940,506/ 6.0%	=	$	149,008,433
	Rounded		$	149,000,000

A substantial renovation of the subject was recently begun. This valuation has estimated the subject’s market value prior to renovation as of May 25, 2006 in accordance with the client’s request.

RIVERSIDE PARK APARTMENTS 69

SALES COMPARISON APPROACH

The Sales Comparison Approach is based on the premise that the market value of a property is directly related to the prices of comparable, competitive properties. The value of a property in the market is set by the availability of substitute properties of similar utility and desirability. Value is sustained when the relationships between land and the improvements on the land and between property and its environment are in balance. Externalities such as the neighborhood and the economy can affect property value positively or negatively.

A systematic, five step procedure for applying the sales comparison approach involves: 1) researching the market for data on the prices of comparable properties, 2) verifying that the data is accurate and representative of arm’s length transactions, 3) determining relevant units of comparison, 4) comparing the subject with the comparables and adjusting the comparables for differences, and 5) reconciling the multiple value indications into a single value or range of values.

In other words, the sales data must also conform to the underlying conditions of the Definition of Market Value as defined by the Office of the Comptroller of the Currency. (i.e., typical motivation, fully informed buyers and sellers, reasonable marketing period, etc.)

The appraiser has collected market data by researching courthouse records, assessment office data and personal data files. Information was also gathered during field inspections and discussions with buyers, sellers, appraisers, brokers and leasing agents. The following is a description of Market Sales Data relied upon in the Sales Comparison Approach. The expenses stated for these comparables include an allowance for replacement reserves.

RIVERSIDE PARK APARTMENTS 70

COMPARABLE SALES MAP: Riverside Park

COMPARABLE SALES DATA — Sales #1-#3

ITEM	COMPARABLE No. 1	COMPARABLE No. 2	COMPARABLE No. 3
Address	Skyline Towers 5597 Seminary Road	Arlington Overlook 1201 S. Scott Street	Ravenwood Towers 6166 Leesburg Pike
Proximity to subj.	Falls Church 4.9 mi.	Arlington 5 mi.	Falls Church 6.8 mi.
Map Code	Sale #1 Fairfax Co.	Sale #2 Arl. Co.	Sale #3 Fairfax Co.
Lot size	12.7 acres	14.38 acres	13.06 acres
Brief description of building improvements	No. Units: 939 No. Vac: 70e Year Built: 1970 A 26-story masonry elevator apartment project w/comm. space.	No. Units: 711 No. Vac: 46 Year Built: 1961 A 9-story elevator apartment project.	No. Units: 310 No. Vac: 11 Year Built: 1962 A 6-story masonry elevator apartment building.
Quality	Average	Average	Average
Condition	Average-Good	Average	Average
Recreational facilities	Fitness center, Clubhouse	Fitness Center, picnic area, playground	Fitness center, tennis courts.
Pool	Swimming pool	Swimming pool	Swimming pool
Parking	Parking garage	Adequate	Adequate
Tenant appeal	Falls Church area of Fairfax Co.	Arlington County location	Fairfax County near Arlington & Alex, VA
Grantor	Fairfield Skyline LLC	Archstone-Smith	Ravenwood Twrs Inc.
Grantee	EQR-Skyline Towers LLC	Fairfield Residential	Fairfield Residential

	No. of		UNIT ROOM COUNT						No. of		UNIT ROOM COUNT						No. of		UNIT ROOM COUNT
	Units		Tot.		BR		b		Units		Tot.		BR		b		Units		Tot.		BR		b
		156		2.5		E		1		168		2		E		1		55		2		E		1
Unit		364		4		1		1		322		3.5		1		1		155		3		1		1
breakdown		52		5		2		1.5		182		4.5		2		1		100		4.5		2		1
		209		5		2		2		32		4.5		2		1.5
		158		6		3		2		7		5.5		3		2

Util. paid by owner	Heat, HW, CG, Sewer	All utilities	All utilities
Data source	Broker, Assmt Records	Buyer, Broker	Buyer, Lender
Price	$165,500,000 þ Unf o F	$90,150,000 þ Unf o F	32,670,000 þ Unf o F
Sale — Listing — Offer	Sale	Sale	Sale
Date of sale	December 2005	August 2004	August 2004
Terms (Including conditions of sale and financing terms)	All cash to the seller. Purchased by Equity Residential, a large Real Estate Investment Trust (REIT). 65% of units have been rehabbed.	All cash to the seller. Buyer plans $13,800,000 in repairs and upgrades.	Buyer to obtain conventional financing.
Possible using data effective at time of sale
Gross Annual Income	$16,193,800	$9,500,000	$4,075,272
Gross Ann. Inc. Mult. (1)	10.2	9.5	8.0
Net Annual Income	$9,000,000	$5,000,000	$1,989,726
Expense Percentage (2)	38.3%	40.1%	44.8%
Overall Cap. Rate (3)	5.4%	5.5%	6.1%
Price per unit	$176,251 incl. Comm.	$126,793	$105,387
Price per room	$40,376	$36,579	$31,873
Price per SF net bldg. area	$160.87/sq. ft. bldg. area	$168.38 /sq. ft. bldg. area	$125.71 /sq. ft. bldg. area
COMMENTS	Economics based on data obtained from listing/ selling broker. Income other than apartment rent totaled $1.537M. This project has over 10,000 SF of comm.	Economics based on actual rent collection and pro forma expenses.	The buyers plan to renovate this building at a cost of about $15,000 per unit. Similar condition.
COMPARISON TO SUBJECT	Superior location. Superior condition. Similar vintage. Much higher avg. rents. Lower exp %. Avg Rent: $1437/mo	Smaller size project. Similar condition. Similar location. Similar average rent. Similar expense %. Avg Rent: $1113/mo	Much smaller project. Older vintage. Similar location. Similar average rent. Higher expense %. Avg Rent: $1096/mo

RIVERSIDE PARK APARTMENTS

72

RIVERSIDE PARK APARTMENTS 73

RIVERSIDE PARK APARTMENTS 74

COMPARABLE SALES DATA — Sales #4-#6

ITEM	COMPARABLE No. 4	COMPARABLE No. 5	COMPARABLE No. 6
Address	Georgian Towers	Chesterfield House	The Alexandria
	8750 Georgia Avenue	5055 S Chesterfield Road	140 South Van Dorn St.
Proximity to subj.	Silver Spring 14 mi.	Arlington 4.3 mi.	Alexandria 3.9 mi.
Map Code	Sale #4 Mont. Co. MD	Sale #5 Arlington Co.	Sale #6 Alex. City
Lot size	3.25 acres	2.05 acres	40.0785 acres
Brief description	No. Units: 885 No. Vac: 27	No. Units: 101 No. Vac: 5	No. Units: 1524 No. Vac: N/A
of building improvements	Year Built: 1969	Year Built: 1968	Year Built: 1963-67
	A 16-story brick	A 7-story masonry	A 4-6 story elevator
	elevator apartment	elevator apartment	apartment project
	project w/comm space.	project.	with balconies.
Quality	Average	Average	Average
Condition	Average	Average	Average-Good
Recreational facilities	Fitness center, rooftop	None	Fitness Center, tennis,
	sundeck, on-site deli		clubhouse, vball, etc.
Pool	None	Swimming pool	Swimming pools
Parking	Garage parking	127 spaces	Adequate
Tenant appeal	Silver Spring area of	Arlington County	Alexandria City
	Montgomery County	location	near Landmark Mall
Grantor	Watch Holdings LLC	Chesterfld Hse Assoc LP	Sterling Equities
Grantee	Stellar Management	Reserve at Chesterfld LLC	Orion Residential

	No. of		UNIT ROOM COUNT						No. of		UNIT ROOM COUNT						No. of		UNIT ROOM COUNT
	Units		Tot.		BR		b		Units		Tot.		BR		b		Units		Tot.		BR		b
		218		2.5		S		1		6		3		1		1		273		2.5		E		1
Unit		493		3.5		1		1		42		3		1		1		750		4		1		1
breakdown		172		4.5		2		2		48		4		2		1		474		5		2		1-2
		2		5.5		3		2		5	Retail							27		6		3		1.5

Util. paid by owner	All utilities	H&C water, Ht, Ckg	All-1361u; 163u+elec
Data source	Manager, Public Records	Broker, Public Records	Buyer, Public Records
Price	$91,000,000 þ Unf o F	$9,800,000 þ Unf o F	$195,000,000 þ Unf o F
Sale — Listing — Offer	Sale	Sale	Sale
Date of sale	March 2004	November 2004	July 2004
Terms	Purchased by NY- based	Assumed all cash	All cash to the
(Including conditions	investor. Reportedly	to the seller.	seller. Buyer plans
of sale and	part of a 1031 exchange.	Seller was original	upgrades. Subsequent
financing terms)	Recorded price of	owner.	to sale over 300 units
	$89.5M plus $1,500,000		were sold off as
	for immediate capitals.		condominiums.
Possible using data effective at time of sale
Gross Annual Income	$12,170,000 est.	$1,200,000	$21,150,000
Gross Ann. Inc. Mult. (1)	7.5	8.2	9.2
Net Annual Income	$6,600,000	$540,000	$11,700,000
Expense Percentage (2)	40.8%	49.2%	39.7%
Overall Cap. Rate (3)	7.3%	5.5%	6.0%
Price per unit	$102,825	$97,030	$127,953
Price per room	$29,782	$29,167	$33,580
Price gross bldg. area	$103.37 /sq. ft. bldg. area	$108.16 /sq. ft. bldg. area	$170.25 /sq. ft. bldg. area
COMMENTS	Economics based on	Economics based	Most of the units
	rents at time of sale +	on rents at time	at this property have
	commercial & other inc.	of sale and	been renovated.
	NOI estimate obtained	estimated expenses.	Some units were
	from party familiar with		converted to condo.
	transaction. Expenses
	estimated @ $5,600/u.		Superior condition.
COMPARISON	Inferior location.	Similar vintage.	Similar size project.
TO SUBJECT	Similar condition.	Similar condition.	Similar vintage.
	Similar vintage.	Similar location.	Similar location.
	Similar expense %.	Lower average rents.	Slightly higher rents.
	Similar rents.	Much higher expense %.	Similar expense %.
	Avg Rent: $1146/mo	Avg Rent: $990/mo	Avg Rent: $1156/mo

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RIVERSIDE PARK APARTMENTS 76

RIVERSIDE PARK APARTMENTS 77

Discussion of the Comparable Sales

The subject’s Market Value is estimated based upon recent sales of comparable apartment properties. The data described in detail on the previous pages was gathered from various sources and confirmed by the parties involved in each transaction. Three of these six properties have been previously appraised by Robert D. Wright, MAI. Due to the variations between properties, these sales have been compared to the subject on the basis of sale price per unit, per room, per square foot of net rentable area and Gross Income Multiplier for an indication of the subject’s value.

Elements of comparison are the characteristics of properties and transactions that cause prices paid for real estate to vary. This appraisal is for the subject’s fee simple title. Although apartment properties are sold subject to leases, the short-term nature of these leases renders the leased fee estate equivalent to the fee simple title. The real property rights conveyed for the comparable properties and the subject are similar.

The subject is being appraised in terms of cash or cash equivalent financing, i.e., conventional mortgage terms available in the market. In the case of the comparable properties, seller financing was not a factor in these transactions. Adjustments for conditions of sale reflect the motivations of the buyer and the seller. None of the sale properties were in distressed circumstances at the time of transfer. No adjustments for conditions of sale were needed.

The Value per Unit and Gross Income Multiplier are most commonly utilized for apartment properties. The Gross Income Multiplier requires no adjustment because it reflects the relationship between each property’s income potential and sale price regardless of time or conditions of sale. The Gross Income Multipliers for the five Northern Virginia sales range from 8.0 to 10.2 and average 9.0. The gross income multipliers reflected by the sales are generally higher for projects with lower expense percentages. The expense percentages for the sales range from 38.3% to 49.2%. It is noted that the expenses estimated for the subject and the expenses of the comparable sales include replacement reserves in this appraisal. The subject’s expense percentage at 40.4% in “As Is” condition prior to rehab is bracketed by the range of expense percentages reflected by the comparable sales.

In consideration of the subject’s relative income and expense characteristics in “As Is” condition prior to renovation, a Gross Income Multiplier of 8.9 is estimated for the subject. With the potential gross income of $16,631,175 and a Gross Income Multiplier of 8.9, the subject’s value indication is $148,017,458 rounded to $148,000,000. The comparable sale prices per unit range from $97,030 to $176,251 for a project with a significant commercial component which skewed the sales price higher (Sale #1 – Skyline Towers). In consideration of the subject’s relative characteristics in “As Is” condition, the estimated market value is $121,000 per unit. This equates to $147,900,000 on a rounded basis. The Gross Income Multiplier and the Value per Unit have been given equal weight herein for a Market Value of $147,900,000 in “As Is” condition prior to rehab assuming stabilized operations.

Georgian Towers (Sale #4) has been included for information but is not directly comparable since it is located in Silver Spring, MD rated inferior to the subject.

RIVERSIDE PARK APARTMENTS 78

Following is a summary of this analysis for the subject assuming “As Is” condition and stabilized operations.

Summary of the Sales Comparison Approach to Value

Property	Subject			Sale #1			Sale #2			Sale #3			Sale #4			Sale #5			Sale #6
							Arlington			Ravenwood			Georgian			Chesterfield			The Alexandria
Project Name	Riverside Park			Skyline Towers			Overlook			Towers			Towers			House
Sale Date		—		Dec-05			Aug-04			Aug-04			Mar-04			Nov-04			Jul-04
Consideration		—		$	165,500,000		$	90,150,000		$	32,670,000		$	91,000,000		$	9,800,000		$	195,000,000
Land Area (acres)		28.171			12.7			14.38			13.06			3.25			2.05			40.0785
Year Built		1971			1970			1961			1962			1969			1968			1963-67
Number of Units		1,222			939			711			310			885			101			1,524
Unit Mix Eff.		18.3	%		16.6	%		23.6	%		17.7	%		24.6	%		0.0	%		17.9	%
1-Bdrm		60.6	%		38.8	%		45.3	%		50.0	%		55.7	%		47.5	%		49.2	%
2-Bdrm		21.0	%		27.8	%		30.1	%		32.3	%		19.4	%		47.5	%		31.1	%
3-Bdrm +		0.0	%		16.8	%		1.0	%		0.0	%		0.2	%		5.0	%		1.8	%
Rent/Unit	$	1,134		$	1,437		$	1,113		$	1,096		$	1,146		$	990		$	1,156
Gross Income	$	16,631,175		$	16,193,800		$	9,500,000		$	4,075,272		$	12,170,000		$	1,200,000		$	21,150,000
Expense %		40.4	%		38.3	%		40.1	%		44.8	%		40.8	%		49.2	%		39.7	%
Net Income	$	8,940,506		$	9,000,000		$	5,000,000		$	1,989,726		$	6,600,000		$	540,000		$	11,700,000
PGIM		—			10.2			9.5			8.0			7.5			8.2			9.2
Overall Rate		—			5.4	%		5.5	%		6.1	%		7.3	%		5.5	%		6.0	%
$/Unit		—		$	176,251		$	126,793		$	105,387		$	102,825		$	97,030		$	127,953

Qualitative Analysis

Property Rights Conveyed	Fee Simple	Fee Simple	Fee Simple	Fee Simple	Fee Simple	Fee Simple
Conditions of Sale	Similar	Similar	Similar	Similar	Similar	Similar
Financing Terms	Market	Market	Market	Market	Market	Market
Market Conditions	Similar	Inferior	Inferior	Inferior	Inferior	Inferior
Economic Characteristics	Superior	Similar	Inferior	Similar	Inferior	Superior
Location	Superior	Similar	Similar	Inferior	Similar	Similar
Physical Condition	Superior	Similar	Similar	Similar	Similar	Superior
Unit Mix	Superior	Superior	Superior	Inferior	Superior	Superior
Overall Relationship to Subject	Superior	Superior	Inferior	Inferior	Inferior	Superior

Conclusions per Market Approach
Value Estimate	$	$147,900,000
Unit Value	$	121,031
Potential Gross Income Mult.		8.9

A substantial renovation of the subject is in process. This valuation has estimated the subject’s “As Is” market value prior to renovation in accordance with the client’s request. This appraisal assignment was completed without the benefit of current engineering and environmental site assessment reports. If subsequently completed reports reveal the need for significant immediate repairs or if significant environmentally hazardous conditions exist, this valuation would be adversely impacted.

RIVERSIDE PARK APARTMENTS 79

CORRELATION AND CONCLUSION

Income Approach	$	149,000,000
Sales Comparison Approach	$	147,900,000
Cost Approach	Not Applied

The Cost Approach is not typically relied upon for valuations of older rental projects in this market and has been excluded from this appraisal. An Insurable Value has been included in the addenda.

The Income Approach is ideally suited for estimating the subject’s value since most investors and lenders primarily rely upon this approach for income properties like the subject. This valuation is based on the subject’s economic income potential (“As Is” condition prior to renovation and stabilized occupancy) as supported by current operations and comparable rentals. A detailed rental and expense comparable study is included. This data is considered ample and generally reliable. The subject’s net income was converted into a value indication by direct capitalization utilizing an overall rate developed by the Band of Investment Technique. A value indication was also estimated by directly deriving the overall rate from market sales data. These two methods of deriving a capitalization rate were given consideration in estimating a capitalization rate to be applied against the net income estimate.

The Sales Comparison Approach is based upon an analysis of apartment project sales from Northern Virginia and Montgomery County in Maryland within the subject’s Washington, DC region. The sales prices on a per unit basis and the gross income multipliers were given consideration in this analysis.

The range in value conclusions derived through these indicators was reasonable. Since lenders and buyers for properties like the subject favor the Income Approach it has been given the most weight for the subject’s value conclusion.

Based upon an inspection of the subject, a review of available operating history and in consideration of local market data, the subject’s estimated Market Value as of May 25, 2006 assuming habitable condition with stabilized occupancy is:

ONE HUNDRED FORTY NINE MILLION DOLLARS
($149,000,000)

A substantial renovation of the subject is in process. This appraisal assumes habitable condition prior to renovation in accordance with the client’s request. The cost to complete the renovation of units already gutted for rehabilitation is not considered herein. It is noted that the subject’s actual physical vacancy rate (20.6%) was elevated as of the date of inspection/valuation since the owners had commenced lease terminations to create vacancies for the proposed renovation.

This appraisal assignment was completed without the benefit of current engineering and environmental site assessment reports. If subsequently completed reports reveal the need for significant immediate repairs or if significant environmentally hazardous conditions exist, this valuation would be adversely impacted.

RIVERSIDE PARK APARTMENTS 80

ESTIMATE OF REASONABLE EXPOSURE TIME

Reasonable Exposure Time is defined in the Uniform Standards of Professional Appraisal Practice as the length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past events assuming a competitive and open market.

Exposure time required for properties in this area is generally impacted by normal market factors such as availability of financing, cash positions of investors, individual property conditions, and the general economic climate. The estimate of reasonable exposure time is that period of time presumed to have occurred prior to the consummation of a sale of the subject property at the value estimate. Based upon conversations with apartment brokers active in this market most stabilized projects are marketed for about 3 to 6 months prior to contracting, another 3 to 6 months passes prior to settlement. This estimate takes into account the desirable nature of the subject’s location and improvements. Competition for properties like the subject would be considerable. While normal exposure time would typically be one year, the good demand for projects like the subject in this market could shorten the exposure time in half.

The estimate of reasonable exposure time is that period of time presumed to have occurred prior to the consummation of a sale of the subject property at the value estimate. Based on the above discussion, the subject’s exposure time would have been 6 to 12 months prior to sale as a rental project.

RIVERSIDE PARK APARTMENTS 81

GENERAL ASSUMPTIONS

1.	The legal description used in this report is assumed to be correct.
2.	No survey of the property has been made by the appraiser and no responsibility is assumed in connection with such matters. Sketches in this report are included only to assist the reader in visualizing the property.
3.	No responsibility is assumed for matters of a legal nature affecting title to the property nor is an opinion of title rendered. The title is assumed to be good and marketable.
4.	Information furnished by others is assumed to be true, correct and reliable. A reasonable effort has been made to verify such information; however, no responsibility for its accuracy is assumed by the appraiser.
5.	All mortgages, liens, encumbrances, leases and servitude have been disregarded unless so specified within the report. The property is appraised as though under responsible ownership and competent management.
6.	It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures which would render it more or less valuable. No responsibility is assumed for such conditions or for engineering which may be required to discover such factors.
7.	It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws as of the date of the appraisal unless non-compliance is stated, defined and considered in the appraisal report.
8.	It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a non-conformity has been stated, defined and considered in the appraisal report.
9.	It is assumed that all required licenses, consents or other legislative or administrative authority from any local, state or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based.
10.	It is assumed that the utilization of the land (and improvements) is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted within the report.

RIVERSIDE PARK APARTMENTS 82

11. Unless otherwise stated in the report, the existence of radon air pollution or hazardous material, which may or may not be present on the property, was not observed by the appraiser. The appraiser is not qualified to detect such substances. The presence of substances such as asbestos, ureaformaldehyde foam insulation, or other potentially hazardous materials or environmental hazards may affect the value of the property. The value estimate is predicated on the assumption that there is no such material or condition 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. If desired, the client is urged to retain an expert in this field.

LIMITING CONDITIONS

1.	The appraiser will not be required to give testimony or appear in court because of having made this appraisal, with reference to the property in question, unless arrangements have been previously made.
2.	Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event only with the proper written qualifications and only in its entirety.
3.	The distribution of the total valuation in this report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used.
4.	One (or more) of the signatories of this appraisal report is a member (or candidate) of the Appraisal Institute. The bylaws and regulations of the Institute require each member and candidate to control the use and distribution of each appraisal report signed by such member or candidate. Therefore, except as hereinafter provided, the party for whom this appraisal was prepared may distribute copies of this appraisal report, in its entirety, to such third parties as may be selected by the party for whom this appraisal report was prepared; however, selected portions of this appraisal report shall not be given to third parties without the prior written consent of the signatories of this appraisal report.
5.	In the event that this appraisal contains a valuation of an estate in land that is less than the entire fee simple estate, it is noted that (i) the value reported for such estate relates to a fractional interest only in the real estate involved; and, (ii) the value of this fractional interest plus the value of all other fractional interests may or may not equal the value of the entire fee simple estate considered as a whole.

RIVERSIDE PARK APARTMENTS 83

CERTIFICATION

I certify that, to the best of my knowledge and belief:

1.	The statements of fact contained in this appraisal are true and correct.
2.	The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions and conclusions.
3.	I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.
4.	I have no bias with respect to the property that is the subject of this report or to the parties involved with the assignment.
5.	My engagement in this assignment was not contingent upon developing or reporting predetermined results.
6.	My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
7.	My reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice.
8.	The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.
9.	I have made a personal inspection of the property that is the subject of this report.
10.	No one other than David S. Johnston and Christopher Wright provided significant real property appraisal assistance to the individual signing this report. David S. Johnston and Christopher Wright assisted with the collection and analysis of data and composition of this report.
11.	This appraisal has also been performed in accordance with Freddie Mac appraisal guidelines.
12.	As of the date of this report, Robert D. Wright has completed the continuing education requirements of the Appraisal Institute.

/s/ Robert D. Wright Robert D. Wright, MAI

VA Certified General Real Estate Appraiser

Certification #4001-001391

RIVERSIDE PARK APARTMENTS 84

	Statement of Limiting Conditions and
	Appraiser’s Certification

DEFINITION OF MARKET VALUE: The most probably 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, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as 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 each acting in what he considers his own bet interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 95) 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.

*Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third Party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market’s reaction to the financing or concessions based on the appraiser’s judgment.

STATEMENT OF LIMITING CONDITIONS AND APPRAISER’S CERTIFICATION

CONTINGENT AND LIMITING CONDITIONS: The appraiser’s certification that appears in the appraisal report is subject to the following conditions:

1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership.

2. The appraiser has provided a sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser’s determination of its size.

3. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in the appraisal report whether the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied, regarding this determination.

4. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand.

5. The appraiser has estimated the value of the land in the cost approach at its highest and best use and the improvements at their contributory value. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used.

6. The appraiser has note in the appraisal report any adverse conditions (such as needed repairs, depreciation, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property.

7. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties.

8. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice.

9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner.

10. The appraiser must provide his or her prior written consent before the lender/client, specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser’s identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower, the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without, having to obtain the appraiser’s prior written consent. The appraiser’s written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media.

Freddie Mac Form 439 (6/93, 10/98), Page 1 of 2 [Fannie Mae Form 1004B (6/93)]

APPRAISER’S CERTIFICATION: The appraiser certifies and agrees that:

1. I have researched the subject market area and have selected a minimum of three recent sales or properties most Similar and Proximate to the subject property for consideration in the sales comparison analysis and have made a dollar adjustment when appropriate to reflect the market reaction to those items of significant variation, if a significant item in a comparable property is superior to, or more favorable than, the subject property. I have made a negative adjustment to reduce the adjusted sales price of the comparable and, if a significant item in a comparable property is inferior to, or less favorable than the subject property, I have made a positive adjustment to increase the adjusted sales price of the comparable.

2. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct.

3. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which; are subject only to the contingent and limiting conditions specified in this form.

4. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property.

5. I have no present or contemplate future interest in the subject property, and neither my current of future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property.

6. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and for employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve mortgage loan.

7. I performed this appraisal in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of the Appraisal Foundation and that were in place as of the effective date of this appraisal, with the exception of the departure provision of those Standards, which does not apply. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value and the estimate I developed is consistent with the marketing time noted in the neighborhood section of this report, unless I have otherwise stated in the reconciliation section.

8. I have personally inspected the interior and exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware and have made adjustments for these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them. I have also commented about the effect of the adverse conditions on the marketability of the subject property.

9. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. No one other than David S. Johnston and Christopher Wright provided significant real property appraisal assistance to the individual signing this certification. David S. Johnston and Christopher Wright assisted with the collection and analysis of data and composition of this report. I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any items in the report; therefore, if an unauthorized change is made to the appraisal report, I will take no responsibility for it.

SUPERVISORY APPRAISER’S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have reviewed the appraisal report, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser’s certifications numbered 4 through 7 above, and am taking full responsibility for the appraisal and the appraisal report.

ADDRESS OF PROPERTY APPRAISED:	Riverside Park Apartments
	2000 Huntington Avenue, Alexandria, VA 22303

APPRAISER:		SUPERVISORY APPRAISER (only if required):
Signature:	/s/ Robert D. Wright	Signature:
Name:	Robert D. Wright, MAI	Name:
Date Signed:	June 28, 2006	Date Signed:
State Certification #:	4001 001391	State Certification #:
or State License #:		or State License #:
State:	Virginia	State:
Expiration Date of Certification or License:	02/29/2008	Expiration Date of Certification or License:
		o Did               o Did Not Inspect Property

Freddie Mac Form 439 (6/93, 10/98), Page 2 of 2 [Fannie Mae Form 1004B (6/93)]

ADDENDA

Unit Status Report
Rent Roll Site Plan
Building Plan
Unit Layouts
Subject and Neighborhood Photographs
Zoning Map and Excerpts
Flood Map
Certified Operating Statements
Legal Description
Tax Assessment Data
Commercial Leases
Insurable Value Estimate
Qualifications of the Appraiser