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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
DAMSON/BIRTCHER REALTY INCOME FUND I
(NAME OF SUBJECT COMPANY)
GRAPE INVESTORS, LLC
A DELAWARE LIMITED LIABILITY COMPANY
ARLEN CAPITAL ADVISORS, LLC
(BIDDER)
LIMITED PARTNERSHIP INTERESTS
(TITLE OF CLASS OF SECURITIES)
(CUSIP Number of Class of Securities)
Don Augustine, Manager
Arlen Capital Advisors, LLC
1650 Hotel Circle North - Suite 200
San Diego, California 92108
(619) 686-2002
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
AMENDMENT NO. 1 TO SCHEDULE 14D-1
This Amendment No. 1 amends the Offer to Purchase on Schedule 14D-1 filed with
the Securities and Exchange Commission on June 10, 1997 (the "Schedule 14D-1")
by Grape Investors, LLC, a Delaware limited partnership (the "Purchaser"),
relating to the Offer by the Purchaser to purchase up to 20,000 limited
partnership interests ("Interests") in Damson/Birtcher Realty Income Fund I, a
Pennsylvania Limited Partnership (the "Partnership"), for a purchase price of
$1,467 for each .01 percent interest to (i) add Arlen Capital Advisors, LLC as
an additional bidder, (ii) extend the term of the Offer and (iii) to include the
amended information set forth below. Terms not otherwise defined herein shall
have the meaning ascribed to them in the Schedule 14D-1 and the Offer to
Purchase.
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TERMS OF THE OFFER.
Terms of the Offer is hereby amended to read as follows:
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THIS OFFER WILL EXPIRE AT 12:00 MIDNIGHT, PACIFIC DAYLIGHT TIME,
ON AUGUST 29, 1997, UNLESS THE OFFER IS EXTENDED.
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INTRODUCTION (page 1 of the Offer)
Introduction is hereby amended to read as follows:
INTRODUCTION
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According to the records provided to us by the General Partner you currently own
[XXX]% OF THE OUTSTANDING INTERESTS IN THE PARTNERSHIP
We are offering to purchase those Interests for
$[XXX] CASH
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GRAPE IS NOT AN AFFILIATE OF THE GENERAL PARTNERS OR THE PARTNERSHIP
BEFORE SELLING YOUR INTERESTS TO GRAPE, PLEASE CONSIDER THE FOLLOWING FACTORS:
- - The Partnership's Annual Report for 1996 filed with the SEC on Form 10-K
indicates that the appraised value of the Partnership's remaining
properties have an estimated net asset value of $35,711,000 or $3,674 per
$10,000 of original investor subscription. (Net asset value represents the
appraised value of the Partnership's properties, cash and all other assets
less secured loans payable and all other liabilities.) Grape's net asset
value of the Partnership's remaining properties was estimated to be
$22,422,447 or $2,307 per $10,000 of original investor subscription. The
net asset value was then reduced by Grape's administrative and tender offer
costs to arrive at an adjusted net asset value of $1,929. A 22% discount
factor was then applied to the adjusted net asset value to arrive at
Grape's offer price of $1,467 for each .01 percent of Interests, which is
equal to approximately $1,500 per $10,000 of original investor
subscription.
- - No independent person has been retained to evaluate or render any opinion
with respect to the fairness of Grape's offer and no representation is made
as to such fairness or other measures of value that may be relevant to the
Limited Partners. We urge you to consult your own financial and tax
advisors in connection with Grape's offer.
- - Although Grape cannot predict the future value of the Partnership assets on
a per Interest basis, the purchase price could differ significantly from
the net proceeds that would be realized from a current sale of the
Properties owned by the Partnership or from that which may be realized upon
future liquidation of the Partnership.
- - Grape is making the offer with a view to making a profit. Accordingly,
there is a conflict between Grape's desire to acquire your Interests at a
low price and your desire to sell your Interests at a high price. Grape's
intent is to acquire the Interests at a discount to the value Grape might
ultimately realize from owning the Interests.
- - The tax consequences of the Offer to a particular Limited Partner may be
different from those of other Limited Partners and we urge you to consult
your own tax advisor in connection with the Offer.
- - Limited Partners who sell their Interests will be giving up the opportunity
to participate in any future potential benefits represented by ownership of
Interests, including the right to participate in any future distribution of
cash or property.
- - If the Purchaser is successful in purchasing more than 10 percent of the
outstanding Interests, the Purchaser will be in a position to exert a
strong influence upon the General Partners and the operation of the
Partnership.
PURCHASE PRICE
When you consider the illiquid market (which is essentially nothing more
than a "matching service" that attempts to bring buyers and sellers
together), the secondary cost of selling commissions, payment of the
transfer fee, your annual cost of tax reporting, and the cost of a trustee
if Interests are held in an IRA or pension plan, the sale of your Interests
for $1,500 cash per original $10,000 investment may be a good choice for
you despite the fact that the net asset value of the Partnership has been
estimated at $3,674 per original investment.
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NO SELLING COMMISSION
Interests sold in the informal market "matching service" usually require
payment of a selling commission of the greater of $200 or 10 percent. If
you sell to Grape, you will NOT pay any selling commission.
NO TRANSFER FEE
Grape will be responsible for paying the $25 transfer fee.
PAYMENT OF THE PURCHASE AMOUNT
A cash payment for your Interest will be made to you within 10 business
days following the Expiration Date provided Grape has received from you a
properly completed and duly executed Agreement of Sale.
SECTION 7. PURPOSE AND EFFECTS OF THE OFFER. (PAGE 5 OF THE OFFER)
Section 7 is hereby amended to read as follows:
PURPOSE OF THE OFFER. The Purchaser is making the Offer for investment
purposes with a view towards making a profit. The Purchaser's intent is to
acquire the Interests at a discount to the value that the Purchaser might
ultimately realize from owning the Interests. No independent person has been
retained by Grape to evaluate or render any opinion with respect to the fairness
of the Purchase Price and no representation is made as to such fairness.
The Purchaser established the Purchase Price based on its own
independent analysis of the Partnership, which included a valuation of the
properties and other assets owned by the Partnership and by a subjective
determination of the financial condition of the Partnership. The Purchaser
derived the Purchase Price per Interest from its analysis of financial
information which was available from information in the Form 10-Ks and Form
10-Qs. In determining the estimated value of the Interests, the Purchaser first
calculated the estimated current value of the Partnership's properties from a
net operating income analysis. In performing the net income analysis, the
Purchaser made a reduction in the 1996 revenues, expenses, and net operating
income of the Partnership to reflect the sale of Arlington Executive Plaza on
November 21, 1996. In determining the appropriate discount rate to apply to the
Partnership, the Purchaser considered several factors, including: (i) the
illiquid nature of the investment; (ii) the terms and conditions of the
Partnership Agreement; and (iii) property occupancy and income levels. Based
upon these factors, the Purchaser believes a discount rate of 11 percent was
appropriate for the Purchaser's valuation of the Units. The resulting
discounted value of the Partnership's operations was added to the Partnership's
net current assets, and the Partnership's total estimated asset value was then
allocated to the Limited Partners in accordance with the Purchaser's
hypothetical liquidation of the Partnership's properties. The liquidation
proceeds were then reduced by the Purchaser's administrative and transfer costs.
The Purchaser's resulting estimated current value was $1,467 per .01 percent
interests or, approximately $1,500 per $10,000 of original investor
subscription.
DAMSON/BIRTCHER REALTY INCOME FUND I
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PROPERTY FAIR MARKET VALUE NET ASSET VALUE
Revenues: Partnership Equity 22,422,447
Rental Income (1) 5,740,724 General Partner's share of liquidation proceeds 0
Limited Partners Equity 22,422,447
Expenses: Number of LP Interests at Original $10,000 Investment 9,718
Operating Expenses (1) (1,688,944) Net Asset Value per Original $10,000 Investment $2,307
Property Taxes (1) (623,279)
General & Administrative (1)(2) (460,195)
Net Operating Income (1) 2,968,306
Capitalization rate for property NOI 11% GRAPE'S OFFER
FMV of Property 26,984,600 (All figures based on original $10,000 Investment)
PARTNERSHIP EQUITY
FMV of Property (3) 26,984,600 Net Asset Value $2,307
Secured Loan Payable 2,932,000) Administrative and Tender Offer Costs (5) ($378)
Selling Costs (2.5%) (674,615) Adjusted Net Asset Value $1,929
Est. Property Disposition Fees (4) (809,538) Discount to value (22.2%) ($429)
Net Current Assets (146,000) Grape's Offer $1,500
Partnership Equity 22,422,447
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(1) Adjustments have been made to reflect the sale of Arlington Executive Plaza
on November 21, 1996. Due to the lack of property-by-property disclosure
in the Partnership's 10-K, the Arlington property's contribution to
revenues, expenses, and net operating income is an estimate based on its
contribution to the total appraised value, as disclosed in the
Partnership's 1996 10-K.
(2) One-half G&A is assumed to be property expenses
(3) As reported in the Partnership's 1996 10-K, an independent appraisal on
January 1, 1997, valued the Partnership's remaining properties at
$35,711,000
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(4) The Partnership, in certain circumstances, can earn a property disposition
fee equal to 50% of the competitive real estate commissions that would be
charged by an unaffiliated third party.
(5) Assumes a purchase of 2.5% of the outstanding Interests in the Partnership.
SIGNATURE
After due 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 8, 1997 GRAPE INVESTORS, LLC
By: Arlen Capital Advisors, LLC
its Manager
By: /s/ DON AUGUSTINE
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Don Augustine, Manager
