As filed July 2, 1999
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as
permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Brauvin Real Estate Fund L.P. 4
(Name of Registrant as Specified in Its Charter)
Accelerated High Yield Institutional Investors, LTD.
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
<PAGE>
(3) Per unit price or other underlying value of transaction:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0- 11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
MacKenzie Patterson, Inc.
on behalf of
AHY Institutional Investors, Ltd.
1640 School Street, Suite 100
San Francisco, CA 94556
(925) 631-9100
Would you give your broker authorization to sell your
house at 70% of its appraised value?
Dear Brauvin Real Estate Fund L.P. 4 Investor,
By now, you should have received a Solicitation Statement from the General
Partners dated June 14, 1999, soliciting the Limited Partners to vote to
authorize the sale of all the Partnership's properties with the result being
liquidation of the Partnership.
While we applaud the intention to liquidate the partnership,
We strongly suggest that the partners reject the
request to sell at such a low value!
The proposed transaction sets a minimum sale price of $27,937,000 for the
properties of the Partnership, Brauvin Real Estate Fund L.P. 5 and Brauvin
Income Properties L.P. 6; $8,940,050 would be Brauvin 4's pro rata share, but as
we have interpreted, the requested approval would allow the 70% to be figured on
the total transaction,
It is entirely possible that Brauvin 4's properties could
be sold for less than 70% of appraisal!
And these prices will be reduced for any expenses incurred to close the
transaction!
We believe it important that the limited partners consider the following
regarding issues we think were inadequately discussed in the Solicitation
Statement. Please review these points before making any decision whether to vote
for or against the proposed transaction.
o How did the General Partners come up with a floor of 70% of appraised
value? We are still asking ourselves that question. In a telephone
discussion with us, the Vice President and Secretary, James Brault,
explained that the General Partners need "Flexibility" in order to
market the properties efficiently.
We believe that allowing the General Partners to sell at 70%
of value grants them excessive discretion.
We believe the intent of the limited partnership agreement was to give the
investors the right to vote on a liquidation of the partnership based upon some
certain knowledge of what the results would be. Granting the General Partners
this kind of discretion,
could result in Brauvin 4 investors receiving No distribution at all!
o Why would we want to give the General Partners the kind of flexibility
that allows him to sell real estate at a 30% discount from its
appraised value? How could that possibly be in the best interests of
the investors?
o How much will you receive if the Partnership sells the properties at
70% of their appraised value? Within the solicitation, the General
Partners estimated that if the properties were sold at the appraised
value, Limited Partners would receive a liquidating distribution of
$320.03/unit, net of expenses associated with the solicitation and
required reserves. Would investors receive 70% of $320.03 if the
properties are sold for 70% of appraised value? NO!! Just review the
pro forma liquidation basis below: (These figures are taken from the
proxy statement, and we believe the results below to be a reliable
indication of distributable assets given the assumptions used. However,
we cannot guarantee the presentation is valid nor that the numbers are
accurate.)
<PAGE>
<TABLE>
Based on 70% of Based on 90% of Based on 100% of Based on 110% of
Appraised Value Appraised Value Appraised Value Appraised Value
(sale price @ (sale price @ (sale price @ (sale price @
$8,940,050) $11,494,350) $12,771,500) $14,048,650)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in Sabel Palm Joint Venture: $(361,607) $ (34,350) $85,187 $ 119,722
Cash & Cash Equivalents: 752,613 752,613 752,613 752,613
Real estate assets held for sale: 8,960,325 11,541,825 12,824,250 14,112,225
Rent receivable (net of allowances): 193,998 193,998 193,998 193,998
Escrow deposits: 14,392 14,392 14,392 14,392
Other Assets: 4,037 4,037 4,037 4,037
---------------------------------------------------------------------------------------
Total Assets: 9,563,758 12,472,515 13,874,477 15,196,987
LIABILITIES:
Mortgage Note Payable $11,000,831 $11,000,831 $11,000,831 $11,000,831
Accounts payable & Accrued expenses 190,463 190,463 190,463 190,463
Tenant security deposits 63,878 63,878 63,878 63,878
Deferral on gain on real estate 0 892,962 892,962 2,064,156
Estimated losses through liquidation 213,785 213,785 213,785 213,785
Due to Affiliates 45,331 45,331 45,331 45,331
Minority Interest in Strawberry Joint Venture (947,957) (358,277) (358,277) (316,658)
---------------------------------------------------------------------------------------
Total Liabilities: 10,566,331 12,048,973 12,048,973 13,261,786
Net Assets in Liquidation $(1,002,573) $423,542 $1,825,504 $1,935,201
---------------------------------------------------------------------------------------
What will LP's receive per Unit:
(add back non-cash items)
Deferral on gain on real estate 0 892,962 892,962 2,064,15
Investment in Sabel Palm Joint Venture 361,607 34,350 0 0
---------------------------------------------------------------------------------------
LP's Equity: $(640,966) $1,350,854 $2,718,466 $3,999,357
Probable Distribution/Unit: $(67.12) $141.45 $284.66 $418.78
(9,550 outstanding units)
</TABLE>
(Please note that the 90% estimated value, was only adjusted for the sale price
and their participation in Sabel Joint Venture. The Partnership was unable to
direct us as to the methods upon which they calculate the Deferral on gain on
real estate, Investment in Sabel Joint Venture, and Minority Interest in
Strawberry Fields Joint Venture. Thus, the figures were either held constant or
estimated based on the previous assumptions.)
o As stated above, we do not oppose the sale of the properties, only the
request of the General Partners to be able to sell for as low a price
as 70% of appraised value.
We recommend that the General Partners amend their proposal so
that they seek Limited Partner approval to sell the Partnership's
properties for not less than 90% of appraised value
If that minimum cannot be met, the General Partners can then solicit permission
to sell the properties at a lower price, but only once the sale agreement has
been reached. By handling the sale in this manner, we believe that the Limited
Partners would be better informed of the entire sale process and have a clear
picture of what they may receive (in distributions) once the Partnership comes
to a close.
o Please note that according to the most recently reported trading
activity in leading industry publications, the Partnership Spectrum and
the Dow Jones Investment Advisor1, had shown average trading prices for
the Brauvin 4 units equal to $135.50/unit and $250/unit respectively.
These trading prices do not include commissions paid by the seller.
Even we, MacKenzie Patterson, offered $170 per Brauvin 4 unit which was
not reduced by selling commissions or transfer fees. The possibility
exists that partners will get LESS than these amounts if the General
Partners's request is granted. Why would you approve a sales price of
70% of the appraised value which equates to receiving only a minimum
distribution, when partners could have sold at substantially higher
prices in the market place?
o If you have already sent in your ballot, it's not too late to withdraw
your vote! As a Limited Partner, you have the right to change your
mind.
<PAGE>
Should you have any questions regarding any information disclosed in this
letter, please call MacKenzie Patterson, Inc. at
(925)631-9100!
Or, if you have any concerns regarding your investment after reading this
material, please call your managing General Partner
Jerome Brault at (312)759-7660.
Thank You for taking the time to read this material!
- --------
1 Partnership Spectrum, Partnership Profiles, Inc., March/April 1999; The
Dow Jones Investment Advisor, Dow Jones Financial Publishing Corp., May 1999.
Please note, that these trades are sporadic, and are not a reliable indicator of
intrinsic value.
