SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to Section
14(d)(4) of the Securities Exchange Act of 1934
OXFORD RESIDENTIAL PROPERTIES I
LIMITED PARTNERSHIP
(Name of Subject Company)
Oxford Residential Properties I Limited Partnership
(Name(s) of Person(s) Filing Statement)
Assignee Units
(Title of Class of Securities)
Not Applicable
(CUSIP Number of Class of Securities)
Robert B. Downing
7200 Wisconsin Avenue
Suite 1100
Bethesda, Maryland 20814
(301) 654-3100
(Name, address and telephone number of
persons authorized to receive notices
and communications on behalf of the
persons filing statement)
With a copy to:
Robert B. Robbins, Esq.
Shaw Pittman Potts & Trowbridge
2300 N Street, N.W.
Washington, D.C. 20037
Item 1. Security and Subject Company
This Schedule 14D-9 (the "Statement") relates to
Assignee Units of limited partnership (the "Units") of
Oxford Residential Properties I Limited Partnership, a
Maryland limited partnership (the "Partnership"). The
Partnership is the subject company. Oxford Residential
Properties I Corporation, a Maryland corporation, is the
managing general partner (the "Managing General Partner") of
the Partnership. The address of the principal executive
offices of the Partnership and of the Managing General
Partner is 7200 Wisconsin Avenue, Suite 1100, Bethesda,
Maryland 20814.
Item 2. Tender Offer of the Bidder
The tender offer to which this Statement relates was
disclosed in a Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1"), dated July 28, 1998, filed by MacKenzie
Patterson Special Fund, L.P., MacKenzie Specified Income
Fund, L.P., MacKenzie Fund VI, L.P., Previously Owned
Partnerships Income Fund II, L.P., MP Income Fund 12, LLC,
MP Income Fund 14, LLC, Cal-Kan, Inc., Moraga Gold, LLC, and
Steven Gold (collectively, the "Purchaser"), to purchase up
to 2,430 Units at a price of $425 per Unit, net to the
seller in cash (the "Purchase Price"), upon the terms and
subject to the conditions set forth in an Offer to Purchase
dated July 28, 1998 (the "Offer to Purchase") and the
related Letter of Transmittal (which, together with any
supplements or amendments, collectively constitute the
"Offer"). The address of the Purchaser is C. E. Patterson,
MacKenzie Patterson, Inc., 1640 School Street, Moraga,
California 94556.
Item 3. Identity and Background
(a) The name and address of the Partnership, which is
the person filing this Statement, are set forth in
Item 1 above.
(b) None.
Item 4. The Solicitation or Recommendation
(a) Position of the Managing General Partner.
The Managing General Partner, on behalf of the
Partnership, is recommending that holders of Units (the
"Unitholders") reject the Offer. The Managing General
Partner's position is being provided to Unitholders in a
letter from the Partnership mailed to all Unitholders on
August 13, 1998.
(b) Reasons for the Managing General Partner's
Position.
The offered price is well below the estimated net asset
value of ORP's Units. Further, it is below the price of
recent transactions reported to have been made in the
secondary market. The Managing General Partner believes that
Unit Holders will realize a better return on their
investment by holding their Units as their value increases.
Based on its real estate experience, knowledge of the
real estate markets in which ORP's properties are located
and recent improvements in the operating performance of the
properties, the Managing General Partner believes that the
net asset value of ORP is significantly higher than the
amount estimated by the MacKenzie Patterson Group and,
therefore, their offer price represents a significant
discount to the net asset value of ORP. The Managing
General Partner is also aware of reports of a recent third
party valuation of ORP that concluded ORP's net asset value
was significantly higher than the estimated net asset value
included in the MacKenzie Patterson Group's offering
materials, and substantially higher than the $425 offer from
the MacKenzie Patterson Group. Further, even the MacKenzie
Patterson Group's offering materials acknowledge that the
$425 price is well below their estimated net asset value.
The Managing General Partner believes the underlying
motivation of the MacKenzie Patterson Group is to acquire
Units at a significant discount to net asset value.
However, if Unit Holders nevertheless are inclined to
sell their Units, they should consider their alternatives.
They may wish to call ORP's Investor Services at 248-614-
4550, either to make an offer to ORP to purchase or redeem
their Units or to obtain a list of companies that engage in
secondary market transactions. As previously reported in
its quarterly reports, ORP has been acquiring Units at
market prices for the past two years and will consider
offers made by Unit Holders who wish to sell their Units
from time to time. The offer prices that will be considered
for acceptance will be determined exclusively by the
Managing General Partner with reference to prevailing
secondary market prices. While the Managing General Partner
will consider, on behalf of ORP, offers made by Unit
Holders, this is not an offer to purchase Units.
Further, the price offered by the MacKenzie Patterson
Group will be reduced by the amount of any distributions
declared or made with respect to the Units between July 28,
1998 and August 31, 1998. The Managing General Partner
recently approved an increase in ORP's semi-annual
distribution, payable on August 28, 1998, from $10 per Unit
to $15 per Unit, a fifty (50%) percent increase, which is
disclosed in the Form 10 Q filed by ORP on August 13, 1998.
Based on the net $410 offer price, this distribution equates
on an annualized basis to approximately a 7.3% current
yield.
Also, in the event that more than 2,430 Units are
tendered to the MacKenzie Patterson Group, tendering Unit
Holders would be able to sell only a portion of their
tendered Units and may be left holding a fraction of their
current ownership.
The Managing General Partner and its affiliates are the
owners of approximately 20% of the Units. The Managing
General Partner considers the MacKenzie Patterson Group's
offer price to be inadequate for its own Units, and
recommends that other Unit Holders reject the offer.
ORP's financial condition and operating results have
continued to improve due to improvements in the performance
of its properties. The aggregate net operating income
before debt service and refurbishment expenses ("NOI") of
the four properties in ORP's portfolio increased by
$118,000, or 13%, for the quarter ended March 31, 1998,
compared with the same period in 1997, and by $207,000, or
5.7%, for the year ended December 31, 1997 compared to 1996
operating results.
As a result of these improvements in operations, the
value of these properties has increased in recent years, as
has the properties' ability to support higher levels of
mortgage debt. The timing of any refinancing of ORP's
mortgage debt, however, needs to be carefully planned for
several reasons. First, in order to prepay the existing
mortgage debt, a prepayment penalty may be required.
Second, the Managing General Partner wishes to ensure that
the recent improvements in operating performance are fully
reflected in any valuation undertaken in connection with any
such refinancing.
ORP expects a refinancing of its existing mortgage debt
to become increasingly attractive in the near future as the
prepayment penalties reduce to very small amounts during the
next two and one-half years. The Managing General Partner
anticipates that any such refinancing may offer the
opportunity for ORP to make a significant distribution of
net refinancing proceeds to its Unit Holders, which for most
Unit Holders should be tax-deferred. Based on today's
interest rates and estimated property values, the amount of
this distribution could possibly exceed the $425 per unit
offered by the MacKenzie Patterson Group. In addition, in
contrast to a sale or redemption, Unit Holders who benefited
from a refinancing would continue to receive semi-annual
distributions of cash flow from ORP's operations after such
a refinancing and ORP would continue to own all of its
properties. Over the last two years, ORP has doubled the
amount of its distribution paid to Unit holders and, as
discussed above, it recently declared an additional increase
in the amount of the distribution paid to Unit Holders.
Alternatively, a refinancing in which ORP did not
increase the amount of its mortgage debt also may offer the
opportunity for ORP to lower the cost of its debt and to
increase ORP's cash flow and distributions. This, in turn,
may permit ORP to increase the liquidity of its Units
through the use of publicly-traded vehicle such as a real
estate investment trust. The value and liquidity of the
Units could also be enhanced through a listing of the Units
on a national stock exchange.
The Managing General Partner is not currently engaged
in any negotiations regarding any such refinancing or other
liquidity transaction. While there can be no assurance that
any such refinancing or other transaction will occur, the
Managing General Partner believes that the prospects for a
refinancing or other transaction are good and, therefore,
Unit Holders should be able to realize a value for their
Units in excess of the $425 offer price. For these reasons,
the Managing General Partner cannot recommend a sale at this
time, particularly at $425 per unit.
Item 5. Persons Retained, Employed or to Be Compensated
ORP has asked its transfer agent, MMS Escrow & Transfer
Agency, Inc., to answer routine telephone inquiries from
Unit Holders in connection with the Offer and the Managing
General Partner's response to the Offer. The transfer agent
will not make solicitations and is authorized to describe
only the written recommendations of the Managing General
Partner. The transfer agent will receive no compensation
for this service, apart from the compensation otherwise
received by the transfer agent for the services it regularly
performs as transfer agent.
Item 6. Recent Transactions and Intent with Respect to
Securities
(a) On August 11, 1998, ORP purchased 13 Units from
Unit Holders at a price of $425 per share.
(b) To the extent known by the Managing General Partner, neither
the Partnership nor any executive officer, director, affiliate or
subsidiary intend to tender to the Purchaser.
Item 7. Certain Negotiations and Transactions of the Subject
Company
(a) The Partnership has not engaged in any negotiation in
response to the Offer that relates to or would result in: (i) an
extraordinary transaction, such as a merger or reorganization,
involving the Partnership; (ii) a purchase, sale or transfer of a
material amount of assets by the Partnership; (iii) a tender offer
for or other acquisition of securities by or of the Partnership;
or (iv) any material change in the present capitalization or
dividend policy of the Partnership.
(b) There are no transactions, Managing General Partner
resolutions, agreements in principle or signed contracts in
response to the Offer that relate to or would result in one or
more of the events referred to in Item 7(a).
Item 8. Additional Information to Be Furnished
None
Item 9. Materials to Be Filed as Exhibits
(a) Letter to Unitholders.
(b) Not applicable.
(c) Not applicable.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.
Dated: August 13, 1998
OXFORD RESIDENTIAL PROPERTIES I
LIMITED PARTNERSHIP
By: Oxford Residential
Properties I Corporation
Managing General Partner
By: /S/ Robert B. Downing
____________________________
Robert B. Downing
Executive Vice President
EXHIBIT INDEX
Exhibit No. Description
(a) Letter to Unitholders
Should this be limited to the
portion incorporated by
reference?
To All Unit Holders
of
Oxford Residential Properties I Limited Partnership ("ORP")
On July 28, 1998, a group of bidders (the "MacKenzie Patterson
Group") announced an offer to purchase up to 2,430 units of ORP at
a price of $425 per assignee unit of limited partnership ("Unit").
The MacKenzie Patterson Group has no affiliation with ORP. The
offer was made without prior notice to, or consultation with, the
Managing General Partner of ORP, and was recently mailed to you by
ORP's transfer agent in accordance with applicable SEC rules.
The Managing General Partner of ORP has reviewed the offer
carefully, and strongly recommends that you REJECT the MacKenzie
Patterson Group offer, because:
1. The MacKenzie Price Is Inadequate
The MacKenzie Patterson Group's offer price is well below ORP's
net asset value, whether determined by the Managing General
Partner, the MacKenzie Patterson Group or independent valuation
firms, and it is below recent secondary market transaction
prices. Further, the offer price is reduced by certain
distributions. The Managing General Partner recently approved
an increase in the amount of ORP's semi-annual distribution,
payable on August 28, 1998, from $10 per Unit to $15 per Unit,
which would reduce the purchase price payable by the MacKenzie
Patterson Group to $410. On an annualized basis, this
distribution equates to approximately a 7.3% current yield on
the net $410 offer price. We believe that Unit Holders who wish
to sell their Units may be able to receive a better price
elsewhere. See "Alternatives For Your Units," below.
2. Future Transactions May Improve ORP's Value and Liquidity
The value of ORP's portfolio has been increasing rapidly in
recent years. The Managing General Partner hopes to capture
this increased value with a future refinancing and/or liquidity
transaction, such as a REIT or stock exchange listing.
3. Alternatives for Your Units
We believe that the price offered by the MacKenzie Patterson
Group is inadequate, and that you will realize a better return
on your investment by holding your Units as their distributions
and value increases. However, if, after reviewing this letter,
you nevertheless are inclined to sell your Units, you should
consider your alternatives. In this regard, you may wish to
call Investor Services at 248-614-4550, either to make an offer
to ORP to purchase or redeem your Units or to obtain a list of
companies that engage in secondary market transactions. The
Managing General Partner wishes to remind Unit Holders that, as
previously reported in its quarterly reports, ORP has been
acquiring Units at market prices for the past two years and will
consider offers made by Unit Holders who wish to sell their
Units from time to time. The offer prices that will be
considered for acceptance will be determined exclusively by the
Managing General Partner with reference to prevailing secondary
market prices. While the Managing General Partner will
consider, on behalf of ORP, offers made by Unit Holders, this is
not an offer to purchase Units.
Another alternative is to sell your Units in the informal
secondary market. Upon request, we will provide you with a list
of companies that engage in secondary market transactions.
The Price is Inadequate
The MacKenzie Patterson Group's offer price is well below the
estimated net asset value of ORP's Units. Further, it is below the
price of recent transactions reported to have been made in the
secondary market. We believe that you will realize a better return
on your investment by holding your Units as their value increases.
Based on its real estate experience, knowledge of the real estate
markets in which ORP's properties are located and recent
improvements in the operating performance of the properties, the
Managing General Partner believes that the net asset value of ORP
is significantly higher than the amount estimated by the MacKenzie
Patterson Group and, therefore, their offer price represents a
significant discount to the net asset value of ORP. The Managing
General Partner is also aware of reports of a recent third party
valuation of ORP that concluded ORP's net asset value was
significantly higher than the estimated net asset value included in
the MacKenzie Patterson Group's offering materials, and
substantially higher than the $425 offer from the MacKenzie
Patterson Group. Further, even the MacKenzie Patterson Group's
offering materials acknowledge that the $425 price is well below
their estimated net asset value. The Managing General Partner
believes the underlying motivation of the MacKenzie Patterson Group
is to acquire Units at a significant discount to net asset value.
However, if, after reviewing this letter, you nevertheless are
inclined to sell your Units, you should consider your alternatives.
In this regard, you may wish to call Investor Services at 248-614-
4550, either to make an offer to ORP to purchase or redeem your
Units or to obtain a list of companies that engage in secondary
market transactions. The Managing General Partner wishes to remind
Unit Holders that, as previously reported in its quarterly reports,
ORP has been acquiring Units at market prices for the past two
years and will consider offers made by Unit Holders who wish to
sell their Units from time to time. The offer prices that will be
considered for acceptance will be determined exclusively by the
Managing General Partner with reference to prevailing secondary
market prices. While the Managing General Partner will consider,
on behalf of ORP, offers made by Unit Holders, this is not an offer
to purchase Units.
Further, the price offered by the MacKenzie Patterson Group will
be reduced by the amount of any distributions declared or made with
respect to the Units between July 28, 1998 and August 31, 1998.
The Managing General Partner recently approved an increase in ORP's
semi-annual distribution, payable on August 28, 1998, from $10 per
Unit to $15 per Unit, a fifty (50%) percent increase. Based on the
net $410 offer price, this distribution equates on an annualized
basis to approximately a 7.3% current yield.
You also should be aware that, in the unlikely event that more
than 2,430 Units are tendered to the MacKenzie Patterson Group,
tendering Unit Holders would be able to sell only a portion of
their tendered Units and may be left holding a fraction of their
current ownership.
The Managing General Partner and its affiliates are the owners of
approximately 20% of the Units. The Managing General Partner
considers the MacKenzie Patterson Group's offer price to be
inadequate for its own Units, and recommends that other Unit
Holders reject the offer.
Future Transactions May Further Improve ORP's Value and Liquidity
ORP's financial condition and operating results have continued to
improve due to improvements in the performance of its properties.
The aggregate net operating income before debt service and
refurbishment expenses ("NOI") of the four properties in ORP's
portfolio increased by $118,000, or 13%, for the quarter ended
March 31, 1998, compared with the same period in 1997, and by
$207,000, or 5.7%, for the year ended December 31, 1997 compared to
1996 operating results.
As a result of these improvements in operations, the value of
these properties has increased in recent years, as has the
properties' ability to support higher levels of mortgage debt. The
timing of any refinancing of ORP's mortgage debt, however, needs to
be carefully planned for several reasons. First, in order to
prepay the existing mortgage debt, a prepayment penalty may be
required. Second, we wish to ensure that the recent improvements
in operating performance are fully reflected in any valuation
undertaken in connection with any such refinancing.
ORP expects a refinancing of its existing mortgage debt to become
increasingly attractive in the near future as the prepayment
penalties reduce to very small amounts during the next two and one-
half years. We anticipate that any such refinancing may offer the
opportunity for ORP to make a significant distribution of net
refinancing proceeds to its Unit Holders, which for most Unit
Holders should be tax-deferred. Based on today's interest rates
and estimated property values, the amount of this distribution
could possibly exceed the $425 per Unit offered by the MacKenzie
Patterson Group. In addition, in contrast to a sale or redemption,
Unit Holders who benefited from such a refinancing would continue
to receive semi-annual distributions of cash flow from ORP's
operations after such a refinancing and ORP would continue to own
all of its properties. Over the last two years, ORP has doubled
the amount of its distribution paid to Unit Holders and, as
discussed above, it recently declared an additional increase in the
amount of the distribution paid to Unit Holders.
Alternatively, a refinancing in which ORP did not increase the
amount of its mortgage debt may also offer the opportunity for ORP
to lower the cost of its debt and to increase ORP's cash flow and
distributions. This, in turn, may permit ORP to increase the
liquidity of its Units through the use of a publicly-traded vehicle
such as a real estate investment trust. The value and liquidity of
the Units could also be enhanced through a listing of the Units on
a national stock exchange.
The Managing General Partner is not currently engaged in any
negotiations regarding any such refinancing or other liquidity
transaction. While there can be no assurance that any such
refinancing or other transaction will occur, the Managing General
Partner believes that the prospects for a refinancing or other
transaction are good and, therefore, Unit Holders should be able to
realize a value for their Units in excess of the $425 offer price.
For these reasons, the Managing General Partner cannot recommend a
sale at this time, particularly at $425 per Unit.
If you have questions regarding the MacKenzie Patterson Group
offer or this letter, our Investor Services Department would be
pleased to assist you at (248) 614-4550.
Very truly yours,
Oxford Residential Properties I Limited Partnership
By: Oxford Residential Properties I Corporation,
Managing General Partner
By: /S/ Robert B. Downing
--------------------------------------
Robert B. Downing,
Executive Vice President
