<PAGE> 1
Exhibit 8.1
[Proskauer Rose LLP Letterhead]
[_________________], 2000
American Spectrum Realty, Inc.
1800 East Deere Avenue
Santa Ana, California 92705
Ladies and Gentlemen:
We have acted as counsel to American Spectrum Realty, Inc., a
Maryland corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-4 under the Securities Act of 1933 (the
"Registration Statement") originally filed with the Securities and Exchange
Commission on August 14, 2000 (File No.333-43686), as amended through the date
hereof. The Registration Statement pertains to the solicitation of consent of
limited partners (the "Limited Partners") of Sierra Pacific Development Fund,
Sierra Pacific Development Fund II, Sierra Pacific Development Fund III, Sierra
Pacific Institutional Properties V, Sierra Pacific Pension Investors '84, Nooney
Income Fund Ltd., L.P., Nooney Income Fund Ltd., II, L.P. and Nooney Real
Property Investors-Two, L.P. (the "Funds") to consolidate the Funds into the
Company by contributing the assets of the Funds to the Company in exchange for
capital stock or notes of the Company (the "Solicitation to Consolidate"). You
have requested our opinion on certain federal income tax matters in connection
with the Solicitation to Consolidate.
In connection with the opinions rendered below, we have examined
such documents as we have deemed necessary or appropriate for purposes of this
opinion.
<PAGE> 2
American Spectrum Realty, Inc.
[______________], 2000
Page 2
In connection with the opinions rendered below, we have assumed
generally that:
1. each of the documents examined as referred above has been duly
authorized, executed, and delivered; is authentic, if an original, or is
accurate, if a copy; and has not been amended;
2. during each taxable year, including the taxable year ending
December 31, 2002, the Company will operate in such a manner that will make the
representations contained in the Representation Letter, dated [__________] and
executed by the president of the Company (the "Representation Letter), true for
such years;
3. the Company will not make any amendments to its organizational
document, after the date of this opinion that would affect the Company's
qualification as a real investment trust (a "REIT") for any taxable year;
In connection with the opinions rendered below, we also have relied
upon the correctness of the representations in the Representation Letter.
For purposes of our opinion, we made such factual and legal
inquiries, including examination of the documents set forth above, as we have
deemed necessary or appropriate for purposes of our opinion. For purposes of
rendering our opinion, however, we have not made an independent investigation of
the facts contained in the documents and assumptions set forth above, the
representations set forth in the Representation Letter, or the Prospectus. We
consequently have relied upon the representations in the Representation Letter
that the information presented in such documents or otherwise furnished to us is
accurate and assumed that the information presented in such documents or
otherwise furnished to us is accurate and complete in all material facts
relevant to our opinion.
In addition, to the extent that any of the representations provided
to us in the Representation Letter are with respect to matters set forth in the
Internal Revenue Code of 1986, as amended (the "Code"), or the Treasury
regulations thereunder (the "Regulations"), we have reviewed with the
individuals making such representation the relevant portion of the Code and the
applicable Regulations and are reasonably satisfied that such individuals
understand such provisions and are capable of making such representations.
Based on the documents and assumptions set forth above, the
representations set forth in the Representation Letter, and the discussion in
the Prospectus under the caption "Federal Income Tax Considerations" (which is
incorporated herein by reference), we are of the opinion that:
<PAGE> 3
American Spectrum Realty, Inc.
[______________], 2000
Page 3
(a) commencing with the Company's taxable year ending December
31, 2002, the Company will be organized in conformity with the
requirements for qualification as a REIT pursuant to section 856
through 860 of the Code, and the Company's proposed method of operation
will enable it to continue to meet the requirements for qualification
and taxation as a REIT under the Code;
(b) the descriptions of the law and the legal conclusions
contained in the Prospectus under the caption "Federal Income Tax
Considerations" are correct in all material respects, and the
discussion contained therein fairly summarizes the federal tax
considerations that are material to Limited Partners.
We assume no obligation to advise you of any changes in our opinion subsequent
to the delivery of this opinion letter. The Company's qualification and taxation
as a REIT depends upon the Company's ability to meet on a continuing basis,
through actual annual operating and other results, the various requirements
under the Code with regard to, among other things, the sources of its gross
income, the composition of its assets, the level of its distributions to
stockholders, and the diversity of its stock ownership. We will not review on a
continuing basis the Company's compliance with the documents or assumptions set
forth above, or the representations set forth in the Representation Letter.
Accordingly, no assurance can be given that the actual results of the Company's
operations the sources of its income, the nature of its assets, the level of the
Company's distributions to its stockholders and the diversity of the Company's
stock ownership for any given taxable year will satisfy the requirements for
qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the Code
and the Regulations, published administrative interpretations thereof, and
published court decisions. The Internal Revenue Service has not issued
Regulations or administrative interpretations with respect to various provisions
of the Code relating to REIT qualification. No assurance can be given that the
law will not change in a way that will prevent the Company from qualifying as a
REIT under the Code.
The foregoing opinions are limited to the federal income tax
matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
state or locality. We undertake no obligation to update the opinions expressed
herein after the date of this letter. This opinion letter is solely for the
information and use of the addressees and may not be relied upon for any purpose
by any other person without our express written consent.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement and to the use of our
name under the caption "Legal Matters" in the Consent Solicitation
Statement/Prospectus included therein. In giving this consent, we do not admit
that we are within the category of persons whose consent is required by Section
7 of the Securities Act of 1933 or the rules and regulations promulgated
thereunder by the Securities and Exchange Commission.
