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SUPPLEMENT TO
OFFER TO PURCHASE FOR CASH
AIMCO
AIMCO Properties, L.P.
is offering to purchase any and all units of limited partnership interests in
DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.
FOR $3,305.00 PER UNIT IN CASH
Upon the terms and subject to the conditions set forth herein, we will accept
any and all units validly ten dered in response to our offer. If units are
validly tendered and not properly withdrawn prior to the expiration date and
the purchase of all such units would result in there being less than 320
unitholders, we will purchase only 99% of the total number of units so tendered
by each limited partner.
Our offer price will be reduced for any distributions subsequently made by your
partnership prior to the expiration of our offer.
We have extended our offer; our offer and your with drawal rights will expire
at 5:00 P.M., New York City time, on September 20, 2000, unless we extend the
deadline.
You will not pay any partnership transfer fees if you tender your units. You
will pay any other fees and costs, including any transfer taxes.
Our offer is not subject to a minimum number of units being tendered.
SEE "RISK FACTORS" IN THE OFFER TO PURCHASE, DATED AUGUST 7, 2000, FOR
A DESCRIPTION OF RISK FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH OUR
OFFER, INCLUDING THE FOLLOWING:
o We determined the offer price of $3,305.00 per unit without
any arms-length negotiations. Accordingly, our offer price
may not reflect the fair market value of your units.
o In November 1999, we offered to buy your units for $3,376.10
per unit. Since November 1999, your partnership has paid
distributions of $546.76 per unit from operations.
o In November 1999, an independent investment banking firm
estimated that the net asset value, going concern value and
liquidation value of your partnership were $4,109, $3,271,
and $3,645 per unit, respectively.
(continued on next page)
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If you desire to accept our offer, you should 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 River Oaks Partnership Services, Inc., which is acting as
Information Agent in connection with our offer, at one of
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its addresses set forth on the back cover of this Supplement. QUESTIONS AND
REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE OFFER TO PURCHASE, THIS
SUPPLEMENT OR THE LETTER OF TRANSMITTAL MAY ALSO BE DIRECTED TO THE INFORMATION
AGENT AT (888) 349-2005.
September 6, 2000
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(Continued from prior page)
o As of June 30, 1998, your general partner (which is our
subsidiary) estimated the net asset value of your units, to
be $11,182 per unit and an affiliate of your general partner
estimated the net liquidation value of your units to be
$6,749.46 per unit.
o 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.
o Although your partnership's agreement of limited partnership
provides for termination in the year 2007, the prospectus
pursuant to which the units were sold in 1983 indicated that
the properties owned by your partnership might be sold within
3 to 7 years of their acquisition if conditions permitted.
o Your general partner and the property manager of the
properties are subsidiaries of ours and, therefore, the
general partner has substantial conflicts of interest with
respect to our offer.
o 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 was liquidated.
o It is possible that we may conduct a future offer at a higher
price.
o 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.
o If we acquire a substantial number of units, we will increase
our ability to influence voting decisions with respect to
your partnership and may control such voting decisions,
including but not limited to 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.
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INTRODUCTION
On August 7, 2000, we commenced an offer to acquire all of the
outstanding units of your partnership, in exchange for $3,305.00 in cash per
unit, net to the seller, without interest, less the amount of distributions, if
any, made by your partnership in respect of any unit from August 7, 2000 until
the expiration date. If units are validly tendered and not properly withdrawn
prior to the expiration date and the purchase of all such units would result in
there being less than 320 unitholders, we will purchase only 99% of the total
number of units so tendered by each limited partner. Our offer is made upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
August 7, 2000, this Supplement and in the accompanying letter of transmittal.
We will pay any transfer fees imposed for the transfer of units by
your partnership. However, you will have to pay any governmental transfer taxes
that apply to your sale. You will also have to pay any fees or commissions
imposed by your broker in assisting you to tender your units, or by any
custodian or other trustee of any Individual Retirement Account or benefit plan
which is the owner of record of your units. Although the fees charged for
transferring units from an Individual Retirement Account vary, such fees are
typically $25-$50 per transaction.
We have retained River Oaks Partnership Services, Inc. to act as the
Information Agent in connection with our offer. We will pay all charges and
expenses in connection with the services of the Information Agent. The offer is
not conditioned on any minimum number of the units being tendered. However,
certain other conditions do apply. See "The Offer - Section 17. Conditions of
the Offer," in the Offer to Purchase. Under no circumstances will we be
required to accept any unit if the transfer of that unit to us would be
prohibited by the agreement of limited partnership of your partnership.
We have extended the expiration date of our offer to 5:00 p.m., New
York City time, on September 20, 2000. If you desire to accept our offer, you
must complete and sign the letter of transmittal in accordance with the
instructions contained therein, and forward or hand deliver the enclosed
acknowledgment and agreement, together with any other required documents, to
the Information Agent. If you have already tendered your units in accordance
with the original letter of transmittal, you need not take any further action
to continue to tender your units. You may withdraw your tender of units
pursuant to the offer at any time prior to the expiration date of our offer
and, if we have not accepted such units for payment, on or after October 9,
2000.
We expressly reserve the right, in our reasonable discretion, at any
time and from time to time, 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. Notice of any such extension will promptly be disseminated to you in a
manner reasonably designed to inform you of such change. Further, any extension
may be followed by a press release or public announcement which will be issued
no later than 9:00 a.m., New York City time, on the next business day after the
scheduled expiration date of our offer, in accordance with Rule 14e-1(d) under
the Securities Exchange Act of 1934.
Our Offer to Purchase, dated August 7, 2000, is hereby further
supplemented as follows:
1. Since May 1, 2000, we have purchased in privately negotiated
transactions the following units in your partnership:
<TABLE>
<CAPTION>
DATE NUMBER OF UNITS SALE PRICE PER UNIT
---- --------------- -------------------
<S> <C> <C>
May 1 0 n/a
June 1 0 n/a
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2. The current executive officers of the general partner of your
partnership are the same as the executive officers of AIMCO.
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The letter of transmittal and any other required documents should be
sent or delivered by each unitholder or such unitholder'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:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
For information, please call:
TOLL FREE: (888) 349-2005
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