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)
Marc B. Abrams
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 March 2, 1999, filed by MacKenzie
Patterson Special Fund, L.P., MacKenzie Specified Income
Fund, L.P., MacKenzie Fund VI, L.P., Accelerated High Yield
Institutional Investors, L.P., Previously Owned Partnerships
Income Fund II, L.P., MP Income Fund 12, LLC, MP Income Fund
14, LLC, and Cal-Kan, Inc. (collectively, the "Purchaser"),
to purchase up to 2,425 Units at a price of $550 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 March 2, 1999 (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, which is anticipated
to be mailed to all Unitholders on or about March 15, 1999.
(b) Reasons for the Managing General Partner's Position.
The reasons for the Managing General Partners' Position
are set forth in its letter which is anticipated to be
mailed to all Unitholders on or about March 15, 1999, a copy
of which is attached hereto as Exhibit 9(a), which is
incorporated herein by reference.
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
Unitholders 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) During 1998, 0RP purchased 234 Units from
Unitholders at a prices ranging from $425 to $500 per share.
Since January 1, 1999, ORP has purchased a total of 53 Units
at prices ranging from $500 to $550 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: March 15, 1999
OXFORD RESIDENTIAL PROPERTIES I
LIMITED PARTNERSHIP
By:Oxford Residential Properties I
Corporation,
Managing General Partner
By:/s/ Marc B. Abrams
--------------------------------
Marc B. Abrams,
Senior Vice President
EXHIBIT INDEX
Exhibit No. Description
(a) Letter to Unitholders
EXHIBIT (a)
March 12, 1999
To Assignee Unit Holders:
We are writing regarding a recent offer made by parties who
are not affiliated with Oxford Residential Properties I Limited
Partnership ("ORP") to purchase up to 2,425 Assignee Units
("Units"). ORP's Managing General Partner recommends that you
REJECT this offer since, among other things, the offer price
represents a substantial discount to the net asset value of the
Units. The basis for the Managing General Partner's
recommendation is set forth in the attached communication.
If, after reviewing this letter and attachment, you wish to
sell your Units, you should consider your alternatives. In this
regard, you may wish to call Oxford 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. While the Managing General Partner will
consider, on behalf of ORP, offers made by Unit Holders, this is
not an offer to purchase Units.
Please contact our Investor Services Group at the number shown
above if you have any questions.
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
Enclosure
March 12, 1999
To All Unit Holders
of
Oxford Residential Properties I Limited Partnership ("ORP")
On March 2, 1999, a group of bidders (the "MacKenzie Group")
announced an offer to purchase up to 2,425 units of ORP at a price
of $550 per assignee unit of limited partnership ("Unit"), less
certain distributions. The MacKenzie Group has no affiliation
with ORP or its Managing General Partner. The offer was made
without prior notice to, or consultation with, the Managing
General Partner of ORP. It was recently mailed to you by ORP's
transfer agent as required by applicable SEC rules.
For the reasons indicated below, the Managing General Partner
recommends that you retain your Units and REJECT the MacKenzie
Group's offer. We believe that you will realize a better return
on your investment by holding your Units as their distributions
and value increase. If, after reviewing this letter, you wish to
sell your Units, you should consider your alternatives. In this
regard, you may wish to call Oxford 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. While the Managing General Partner will
consider, on behalf of ORP, offers made by Unit Holders, this is
not an offer to purchase Units. See "Purchase of Units by ORP."
The MacKenzie Group has made two prior tender offers for ORP
Units at lower prices. Each time a new offer is made, the price
is increased significantly. Their first offer, which commenced on
April 4, 1995, was at $260 per Unit, and on July 28, 1998, they
commenced a second offer at $425 per Unit. During the course of
each offer, the MacKenzie Group increased the offer price several
times. These actions demonstrate that the prices offered by the
MacKenzie Group from time to time have not represented the fair
value of the Units.
The Managing General Partner and its affiliates currently own
approximately 21% of the Units. The Managing General Partner
considers the MacKenzie Group's offer price to be inadequate for
its own Units, and recommends that other Unit Holders reject the
offer.
After a careful review, ORP's Managing General Partner strongly
recommends that you REJECT the MacKenzie Group offer, for the
following reasons:
The MacKenzie Offer Price Is Inadequate
The Managing General Partner believes that the MacKenzie
Group's offer price of $550 per Unit represents a substantial
discount to net asset value per Unit. An independent
valuation firm recently estimated the net asset value per Unit
to be $839, or approximately 53% higher than the MacKenzie
Group's offer price. See "The Price is Inadequate," below.
Future Transactions May Improve ORP's Value and Liquidity
The value of the properties and the Units has increased
significantly in recent years. The Managing General Partner
expects to capture this increased value with a future
refinancing and/or liquidity transaction, as the existing
mortgage debt becomes prepayable and the prepayment penalties
decline to relatively small amounts during the next 2-3 years.
(See "Future Transactions May Improve ORP's Value and
Liquidity," below.)
The MacKenzie Offer Price is Inadequate
The Managing General Partner believes that Unit Holders will
realize a better return on their investment by holding their Units
rather than selling them, particularly at $550 per share. Based
on its real estate experience, including 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 value of ORP's
assets, on a per Unit basis, is significantly higher than $550.
This belief is based on the most recently-reported net operating
income of ORP's properties (less a replacement reserve for capital
improvements), divided by capitalization rates that the Managing
General Partner believes currently are consistent with those
applicable to properties of quality, age and location comparable
to those in ORP's portfolio.
The Managing General Partner's views are based on its own
estimates as to the value of ORP's assets, and do not represent a
judgment as to the market value of the Units themselves. Like
most owners of real estate partnerships, ORP does not engage in
annual valuations of its assets because of the expense of annual
appraisals, and, more importantly, because there is no business
need for such valuations, except in the context of periodic
refinancings of ORP's debt. Accordingly, the Managing General
Partner has not prepared or ordered an appraisal or valuation of
the properties or the Units, nor has it published a specific net
asset value per Unit for ORP.
The Valuations Group, an independent valuation firm, has
estimated the net asset value per Unit of ORP to be $839 as of
September 30, 1998, which value was calculated using ORP's
financial statements reported in its SEC Form 10-Q filed for the
period ended September 30, 1998. According to The Valuations
Group, the estimated net asset value per Unit is the net cash
proceeds that would be available for distribution to Unit Holders
on a per-Unit basis, assuming all assets were sold and all
liabilities retired. This value is only an estimate and does not
necessarily represent the prices that would be obtained in the
event all of ORP's properties were sold and its assets liquidated.
We reference this valuation not to endorse the valuation
conclusion or the underlying methodology used to reach such
conclusion, but to inform you that an independent firm has placed
an estimated net asset value on the Units that is substantially
higher than the MacKenzie Group's offer price of $550 per Unit.
There are several independent firms that will, for a fee,
prepare valuation reports that provide estimates of the fair
market value of a non-controlling, minority interest in a
partnership. We can provide you with the names of some of these
firms if you are interested in obtaining such a report. As is the
case with most appraisals, the values reflected in these reports
are based on numerous assumptions, some or all of which may not
materialize.
You should also be aware that, in the unlikely event that more
than 2,425 Units are tendered to the MacKenzie Group in connection
with their recent offer, 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.
Future Transactions May 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 $283,000, or 10%, for the quarter
ended September 30, 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 incurred. 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 decrease to very small amounts over the next
two years. We anticipate that any such refinancing may create the
opportunity for ORP to distribute significant net refinancing
proceeds to ORP's Unit Holders, which for most Unit Holders should
be tax-deferred. Based on current interest rates and estimated
property values, the amount of this distribution could potentially
exceed the $550 per Unit offered by the MacKenzie 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.
Alternatively, a refinancing in which ORP did not increase the
amount of its mortgage debt may offer ORP the opportunity to lower
the cost of its debt and to increase its 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 $550 offer
price. For these reasons, the Managing General Partner cannot
recommend a sale at this time.
Purchases of Units by ORP
The Managing General Partner recommends that Unit Holders
retain their Units, rather than sell them at the $550 offer price.
However, as previously reported, ORP has indicated that it will
consider offers from Unit Holders who wish to sell their Units,
despite the Managing General Partner's recommendation that they
not sell.
The Managing General Partner believes that purchases at
appropriate prices of Units offered by Unit Holders benefit ORP.
First, such purchases provide those investors who desire to sell
all or a portion of their investment in ORP (despite the Managing
General Partner's recommendation that they not sell their Units)
with an opportunity to do so. Second, these purchases provide
long-term benefits to the remaining Unit Holders.
All Units purchased by ORP are retired; they are not being
acquired for anyone's investment account. The Managing General
Partner believes that retiring Units purchased by ORP benefits
remaining Unit Holders by reducing the aggregate number of Units
outstanding at a price that is substantially less than the net
asset value of these Units.
ORP does not itself set a price at which Units will be
purchased, and makes no representation that the offers it accepts
reflect prevailing market prices. In making its determination as
to what offers to accept, ORP's Managing General Partner gives
consideration to prevailing secondary market prices. This means
that ORP will not accept offers it believes are too high in
relation to prevailing secondary market prices, or in relation to
other factors. It is not a representation that any offers
accepted by ORP reflect prevailing secondary market prices.
Secondary market prices, and therefore the prices that may be
accepted by ORP, are likely to vary and may, in the future, be
more or less than any offer currently accepted by ORP or the price
offered by the MacKenzie Group.
ORP has acquired a total of 1,676 Units since July 1995,
including 234 Units acquired during 1998 at prices ranging from
$425 - $505 per Unit, and 53 Units acquired in 1999 at prices
ranging from $500 - $550 per Unit. ORP anticipates that the
aggregate consideration for purchases made while the MacKenzie
Group offer is outstanding will not exceed $66,000, which ORP will
fund from its working capital.
The Managing General Partner wishes to emphasize that it does
not recommend that Unit Holders sell their Units at any prices at
which the MacKenzie Group or ORP has purchased Units. The
Managing General Partner has made the decision to purchase Units
from Unit Holders at these prices because the Unit Holders,
without being solicited to do so, decided that they wished to sell
their Units, and because it was in the best interests of ORP to
buy the Units at the prices offered to ORP. The fact that ORP has
purchased Units at the prices indicated above does not mean that
the Managing General Partner recommends that other Unit Holders
sell at these prices.
Sales on the Informal Secondary Market
As we also indicated, you may wish to investigate the prices
that may be offered for Units in the informal secondary market.
Upon request, we will provide you with a list of companies that
engage in secondary market transactions. Please be aware that the
informal secondary market in which Units are intermittently
transferred is not a liquid or efficient market. The prices that
may be offered may be more or less than the MacKenzie Group's
offer price or any offer accepted by ORP, and are not necessarily
indicative of the fair value of the Units. You also should be
aware that sales in the secondary market are likely to include
material transaction costs which would reduce the net proceeds
that a Unit Holder would receive in such a transaction. If you
make inquiries regarding prices available in the secondary market,
you should thoroughly investigate the terms of and costs of any
transaction before you proceed. The amounts paid by ORP and the
MacKenzie Group are not reduced by these transaction costs.
How to Evaluate Your Options
The Managing General Partner 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. A distribution
of $15 per Unit was paid on March 1, 1999. Based on the $550
offer price, ORP's current distribution level equates on an
annualized pre-tax basis to approximately a 5.5% current, cash-on-
cash yield.
In determining whether or not to sell your Units, you may wish
to consider the feasibility of using the net proceeds of any such
sale to acquire another investment that generates a current
annualized yield of at least 5.5%, all or a portion of which may
be sheltered from current income tax depending on your individual
tax situation, and that has the potential for appreciation in
value. In this regard, it should be noted that ORP's
distributions are not guaranteed, and may decline in the event of
unforeseen circumstances, but also that ORP's distributions may
increase if the performance of ORP's properties continues to
improve.
