DAVIDSON DIVERSIFIED REAL ESTATE II LIMITED PARTNERSHIP, SC 14D1, 1999-12-02

DAVIDSON DIVERSIFIED REAL ESTATE II LIMITED PARTNERSHIP
SC 14D1, 1999-12-02
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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SCHEDULE 14D-1
TENDER OFFER STATEMENT

PURSUANT TO SECTION 14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
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DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.

(NAME OF SUBJECT COMPANY)

ERP OPERATING LIMITED PARTNERSHIP
(BIDDER)

LIMITED PARTNERSHIP INTERESTS

(TITLE OF CLASS OF SECURITIES)

NONE

(CUSIP NUMBER OF CLASS OF SECURITIES)

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COPY TO:
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BRUCE C. STROHM, ESQ. DON S. HERSHMAN, ESQ.
EQUITY RESIDENTIAL PROPERTIES TRUST HOLLEB & COFF
TWO NORTH RIVERSIDE PLAZA 55 EAST MONROE STREET
CHICAGO, ILLINOIS 60606 CHICAGO, ILLINOIS 60606
(312) 474-1300 (312) 807-4600
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)

CALCULATION OF FILING FEE

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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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$4,674,000 $934.80
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* For purposes of calculating the filing fee only. Assumes the purchase of 820
Units at a purchase price equal to $5,700 per Unit in cash.

Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.

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Amount Previously Paid: Filing Party:
Form or Registration Number: Date Filed:
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CUSIP NO. None 14D-1 PAGE 1 OF 5 PAGES
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
ERP OPERATING LIMITED PARTNERSHIP: 36-3894853

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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):

(a) / /

(b) /X/

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3. SEC USE ONLY

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4. SOURCES OF FUNDS (SEE INSTRUCTIONS):

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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f): / /

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6. CITIZENSHIP OR PLACE OF ORGANIZATION:

ILLINOIS

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7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:

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8. CHECK IF THE AGGREGATE IN ROW (7) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS)
/ /

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9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7):

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10. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):

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Page 2 of 5 pages

ITEM 1. SECURITY AND SUBJECT COMPANY.

(a) This Schedule relates to units of limited partnership interest (the
"Units") in DAVIDSON DIVERSIFIED REAL ESTATE II, L.P., a Delaware limited
partnership (the "Issuer"), the subject company. The address of the Issuer's
principal executive offices is Colorado Center, Tower Two, 2000 South Colorado
Boulevard, Suite 2-1000, Denver, Colorado 80222.

(b) This Schedule relates to the offer by ERP OPERATING LIMITED PARTNERSHIP
(the "Purchaser") to purchase, in cash, up to 820 Units at a purchase price
equal to $5,700 per Unit, less the amount of any distributions declared or made
with respect to the Units between November 15, 1999 and December 30, 1999 or
such other date to which this Offer may be extended (the "Expiration Date"),
upon the terms and subject to the conditions set forth in the Offer to Purchase
(the "Offer to Purchase") dated December 2, 1999 (the "Offer Date"), and the
related Letter of Transmittal, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively. The Issuer had 1,224.25 Units issued and
outstanding held by approximately 1,022 holders of Units (the "Unitholders") as
of December 31, 1998, according to its Annual Report on Form 10-KSB.

(c) The information set forth under the captions
"Introduction--Establishment of the Offer Price," "Effects of the Offer" and
"Background and Reasons for the Offer" in the Offer to Purchase is incorporated
herein by reference.

ITEM 2. IDENTITY AND BACKGROUND.

(a)-(d) This Schedule is being filed by the Purchaser, an Illinois limited
partnership. The principal business of the Purchaser is the ownership,
acquisition, development, expansion and management of multi-family apartment
properties. The information set forth in "Introduction," "Certain Information
Concerning the Purchaser" and in Schedule I is incorporated herein by reference.

(e)-(g) The information set forth in "Certain Information Concerning the
Purchaser" and Schedule I is incorporated herein by reference. During the last
five years, neither the Purchaser nor, to the best of the knowledge of the
Purchaser, any person named on Schedule I nor any affiliate of the Purchaser,
including its general partner: (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors); or (ii) was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding were or are subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, Federal or state securities laws or finding any violation of such laws.

ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.

(a)-(b) See the discussion under the caption "Certain Information Concerning
the Purchaser" in the Offer to Purchase for information concerning purchases of
Units by the Purchaser. Since January 1, 1996, there have been no transactions
between the Purchaser and the Issuer or, to the knowledge of the Purchaser, any
of the Issuer's affiliates or general partners, or any directors or executive
officers of any such affiliates or general partners.

ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

(a) The information set forth under the caption "Source of Funds" in the
Offer to Purchase is incorporated herein by reference.

(b)-(c) Not Applicable.

ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.

(a)-(g) The information set forth under the caption "Future Plans" in the
Offer to Purchase is incorporated herein by reference. Other than as set forth
therein, the Purchaser has no plans or proposals that would relate to or would
result in any of the transactions, changes or other results described in Items
5(a) through (g) of Schedule 14D-1.
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PAGE 3 OF 5 PAGES

ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

(a)-(b) The information set forth in "Certain Information Concerning the
Purchaser" in the Offer to Purchase is incorporated herein by reference.

ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.

The information set forth in "Certain Information Concerning the Purchaser"
in the Offer to Purchase is incorporated herein by reference.

ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

None.

ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.

The information set forth under the caption "Certain Information Concerning
the Purchaser" in the Offer to Purchase is incorporated herein by reference.

ITEM 10. ADDITIONAL INFORMATION.

(a) None.

(b)-(c) The information set forth in "Certain Legal Matters" in the Offer to
Purchase is incorporated herein by reference.

(d) None.

(e) The information set forth in "Certain Legal Matters" in the Offer to
Purchase is incorporated herein by reference.

(f) Reference is hereby made to the Offer to Purchase and the related Letter
of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2), respectively, and which are incorporated herein in their entirety by
reference.

ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.

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(a)(1) Offer to Purchase, dated December 2, 1999.

(a)(2) Letter of Transmittal.

(a)(3) Form of Letter to Unitholders, dated December 2, 1999.

(a)(4) Notice of Withdrawal.

(b)-(f) Not Applicable.
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PAGE 4 OF 5 PAGES

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.

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Dated: December 2, 1999
ERP OPERATING LIMITED PARTNERSHIP

By: EQUITY RESIDENTIAL PROPERTIES TRUST,
GENERAL PARTNER

By: /s/ BRUCE C. STROHM
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Its: EXECUTIVE VICE PRESIDENT, GENERAL
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COUNSEL AND SECRETARY
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PAGE 5 OF 5 PAGES

EXHIBIT INDEX

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EXHIBIT DESCRIPTION
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(a)(1) Offer to Purchase, dated December 2, 1999.

(a)(2) Letter of Transmittal.

(a)(3) Form of Letter to Unitholders, dated December 2, 1999.

(a)(4) Notice of Withdrawal.

(b)-(f) Not Applicable.
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EXHIBIT 99.(a)(1) EXHIBIT (a)(1)

TENDER OFFER
OFFER TO PURCHASE FOR CASH UP TO 820
UNITS OF LIMITED PARTNERSHIP INTEREST
OF

DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.
AT

$5,700 PER UNIT
ERP OPERATING LIMITED PARTNERSHIP
(THE "PURCHASER")
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THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 4:00 P.M.,
CENTRAL STANDARD TIME, ON DECEMBER 30, 1999, UNLESS THE OFFER IS EXTENDED.
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ERP OPERATING LIMITED PARTNERSHIP (the "Purchaser") hereby seeks to acquire
units of limited partnership interest and the rights attendant to the Litigation
as hereinafter defined (the "Units") in DAVIDSON DIVERSIFIED REAL ESTATE II,
L.P., a Delaware limited partnership (the "Partnership"). The Purchaser is not
affiliated with the Partnership or its general partner (the "General Partner").
The Purchaser hereby offers to purchase up to 820 Units at a purchase price
equal to $5,700 per Unit (the "Offer Price"), less the amount of any
distributions declared or made with respect to the Units between November 15,
1999 and December 30, 1999, or such other date to which this Offer may be
extended (the "Expiration Date"), in cash, without interest, upon the terms and
subject to the conditions set forth in this Offer to Purchase (the "Offer to
Purchase") dated December 2, 1999 (the "Offer Date") and in the related Letter
of Transmittal, as each may be supplemented or amended from time to time (which
together constitute the "Offer"). The 820 Units sought pursuant to the Offer
represent 67% of the Units outstanding as of December 31, 1998. The Purchaser
and its affiliates currently do not own any Units. If all of the Units sought
hereunder are purchased, the Purchaser would hold 67% of the outstanding Units.

Holders of Units (the "Unitholders") are urged to consider the following
factors:

- The Offer Price of $5,700 per Unit exceeds the offer price for the Units
previously made by AIMCO Properties, L.P., the parent corporation of the
General Partner, by $443.95 per Unit except for any legal fees, costs and
expenses Unitholders may be required to pay in connection with the
Litigation. The Purchaser is making the Offer for investment purposes and
with the intention of making a profit from the ownership of the Units. In
establishing the purchase price of $5,700 per Unit, the Purchaser is
motivated to establish the lowest price which might be acceptable to
Unitholders consistent with the Purchaser's objectives. There is no
public market for the Units, and neither the Unitholders nor the
Purchaser has any accurate means for determining the actual present value
of the Units. In addition, each Unitholder may have certain rights and
claims under the class and derivative action litigation entitled ROSALIE
NUANES, ET AL. V. INSIGNIA FINANCIAL GROUP, ET AL. (the "Litigation").
The Purchaser will acquire with the purchase of the Units each
Unitholder's rights and claims, if any, under the Litigation. Although
there can be no certainty as to the actual present value of the Units,
the Purchaser has estimated, solely for the purposes of determining an
acceptable Offer price, that the Units could have an estimated value

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of $5,700 per Unit. It should be noted, however, that the Purchaser has
not made an independent appraisal of the Units or the Partnership's
properties. Accordingly, there can be no assurance that this estimate
accurately reflects an approximate value of the Units or that the

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actual amounts which may be realized by Unitholders may not vary
substantially from this estimate. A Unitholder may receive more value if
it retains its Units until the Partnership is liquidated.

- A tendering Unitholder will not be required to pay any expenses, except
any personal income tax on the sale of tendered Units, if any, in
connection with the tendering of Units to the Purchaser. The Purchaser
will pay any and all other fees, commissions, charges and expenses
incurred in connection with the Offer.

- Unitholders who tender their Units will give up the opportunity to
participate in any future benefits from the ownership of Units, including
potential future distributions by the Partnership, and the purchase price
per Unit payable to a tendering Unitholder by the Purchaser may be less
than the total amount which might otherwise be received by the Unitholder
with respect to the Unit over the remaining term of the Partnership.

- The Purchaser is not affiliated with the Partnership or the General
Partner. However, as a result of consummation of the Offer, the Purchaser
may be in a position to significantly influence all Partnership decisions
on which Unitholders may vote 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 the Partnership's assets. The
Purchaser will vote the Units acquired in the Offer in its own interest,
which may be different from or in conflict with the interests of the
remaining Unitholders.

THE OFFER TO PURCHASE IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF UNITS
BEING TENDERED. IF, AS OF THE EXPIRATION DATE, MORE THAN 820 UNITS ARE VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN, THE PURCHASER WILL ONLY ACCEPT FOR PURCHASE
ON A PRO RATA BASIS 820 UNITS, SUBJECT TO THE TERMS AND CONDITIONS HEREIN.

The Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time: (i) to extend the period of time during which the
Offer is open and thereby delay acceptance for payment of, and the payment for,
any Units; (ii) upon the occurrence of any of the conditions specified in
Section 14 of the Offer to Purchase, to terminate the Offer and not accept for
payment any Units not theretofore accepted for payment or paid for, or to delay
the acceptance for payment of, or payment for, any Units not theretofore
accepted for payment or paid for; and (iii) to amend the Offer in any respect.
Notice of any such extension, termination or amendment will promptly be
disseminated to Unitholders in a manner reasonably designed to inform
Unitholders of such change in compliance with Rule 14d-4(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In the case of an
extension of the Offer, such extension will be followed by a press release or
public announcement which will be issued no later than 9:00 a.m., central
standard time, on the next business day after the scheduled Expiration Date, in
accordance with Rule 14e-1(d) under the Exchange Act.

December 2, 1999

IMPORTANT

Any Unitholder desiring to tender any or all of such Unitholder's Units
should complete and sign the Letter of Transmittal (a copy of which is enclosed
with this Offer to Purchase, printed on yellow paper) in accordance with the
instructions in the Letter of Transmittal and mail, deliver or telecopy the
Letter of

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Transmittal and any other required documents to MMS Escrow and Transfer
Agency, Inc. (the "Depositary") at the address or facsimile number set forth
below.

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By Hand or Overnight Courier: By Mail:
MMS Escrow and Transfer Agency, Inc. MMS Excrow and Transfer Agency, Inc.
1845 Maxwell St., Suite 101 P.O. Box 7090
Troy, MI 48084 Troy, MI 48007-7090
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By Facsimile: (248) 614-4536

Please call the Depositary with any questions at (888) 292-4264.

Questions or requests for assistance or additional copies of this Offer to
Purchase or the Letter of Transmittal may be directed to the Purchaser at (312)
474-1300.

NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION OR ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR TO PROVIDE ANY INFORMATION OTHER
THAN AS CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. NO SUCH
RECOMMENDATION, INFORMATION OR REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN
AUTHORIZED.

The Partnership is subject to the information and reporting requirements of
the Exchange Act and in accordance therewith is required to file reports and
other information with the Securities and Exchange Commission (the "Commission")
relating to its business, financial condition and other matters. Such reports
and other information are available on the Commission's electronic data
gathering and retrieval (EDGAR) system, at its internet web site at
HTTP://WWW.SEC.GOV, and may be inspected at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and are available for inspection and copying at
the regional offices of the Commission located in Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade Center,
13th Floor, New York, New York 10048. Copies of such material can also be
obtained from the Public Reference Room of the Commission in Washington, D.C. at
prescribed rates.

The Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1 (including exhibits) pursuant to Rule 14d-3 of the General
Rules and Regulations under the Exchange Act, furnishing certain additional
information with respect to the Offer. Such statement and any amendments
thereto, including exhibits, may be inspected and copies may be obtained from
the offices of the Commission in the manner specified above.

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TABLE OF CONTENTS

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PAGE
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INTRODUCTION................................................ 6

TENDER OFFER................................................ 8

Section 1. Terms of the Offer............................. 8

Section 2. Proration; Acceptance for Payment and Payment
for Units................................................. 8

Section 3. Procedures for Tendering Units................. 9

Section 4. Withdrawal Rights.............................. 11

Section 5. Extension of Tender Period; Termination;
Amendment................................................. 12

Section 6. Certain Federal Income Tax Consequences........ 12

Section 7. Effects of the Offer........................... 14

Section 8. Background and Reasons for the Offer........... 16

Section 9. Future Plans................................... 19

Section 10. The Business of the Partnership................ 19

Section 11. Conflicts of Interest.......................... 20

Section 12. Certain Information Concerning the Purchaser... 20

Section 13. Source of Funds................................ 21

Section 14. Conditions of the Offer........................ 21

Section 15. Certain Legal Matters.......................... 22

Section 16. Fees and Expenses.............................. 24

Section 17. Dissenters' Rights............................. 24

Section 18. Miscellaneous.................................. 24

SCHEDULE I--THE PURCHASER AND THE RESPECTIVE PRINCIPALS OF
ITS GENERAL PARTNER....................................... 25
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INTRODUCTION

The Purchaser hereby offers to purchase up to 820 Units at a purchase price
of $5,700 per Unit, less the amount of any distributions declared or paid with
respect to the Units between November 15, 1999 and the Expiration Date (the
"Offer Price"), in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer. Unitholders who tender their Units will not
be obligated to pay any Partnership transfer fees, or any other fees, expenses
or commissions in connection with the tender of Units. The Purchaser will pay
all such costs and all charges and expenses of the Depositary in connection with
the Offer.

Unitholders are urged to consider the following factors:

- The Offer Price of $5,700 per Unit exceeds the offer price for the Units
previously made by an affiliate of the General Partner by $443.95 per
Unit except for any legal fees, costs and expenses Unitholders may be
required to pay in connection with the Litigation. The Purchaser is
making the Offer for investment purposes and with the intention of making
a profit from the ownership of the Units. In establishing the purchase
price of $5,700 per Unit, the Purchaser is motivated to establish the
lowest price which might be acceptable to Unitholders consistent with the
Purchaser's objectives. There is no public market for the Units, and
neither the Unitholders nor the Purchaser has any accurate means for
determining the actual present value of the Units. Although there can be
no certainty as to the actual present value of the Units, the Purchaser
has estimated, solely for the purposes of determining an acceptable Offer
price, that the Units could have an estimated value of $5,700 per Unit.
It should be noted, however, that the Purchaser has not made an
independent appraisal of the Units or the Partnership's properties.
Accordingly, there can be no assurance that this estimate accurately
reflects an approximate value of the Units or that the actual amounts
which may be realized by holders for the Units may not vary substantially
from this estimate. A Unitholder may receive more value if it retains its
Units until the Partnership is liquidated.

- The Purchaser is not affiliated with the Partnership or the General
Partner. However, as a result of consummation of the Offer, the Purchaser
may be in a position to significantly influence all Partnership decisions
on which Unitholders may vote 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 the Partnership assets. The
Purchaser will vote the Units acquired in the Offer in its own interest,
which may be different from or in conflict with the interests of the
remaining Unitholders.

The Offer will provide Unitholders with an opportunity to liquidate their
investment without the usual transaction costs associated with market sales.
Unitholders may have a more immediate need to use the cash now tied up in an
investment in the Units and wish to sell them to the Purchaser. Unitholders who
sell all of their Units will also eliminate the need to file form K-1
information with their federal tax returns for years after 1999, unless the
Expiration Date of the Offer is extended.

For further information concerning the Purchaser, see Section 12 below and
Schedule I.

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ESTABLISHMENT OF THE OFFER PRICE

The Purchaser has set the Offer Price at $5,700 per Unit, less the amount of
any distributions declared or made with respect to the Units between the
November 15, 1999 and the Expiration Date. In determining the Offer Price, the
Purchaser analyzed a number of quantitative and qualitative factors, including:
(i) the Partnership's Annual Report on Form 10-KSB for the year ended
December 31, 1998; (ii) the Partnership's Quarterly Reports on Form 10-QSB;
(iii) prices reported from private sales of Units; and (iv) tender offer
statements, solicitation/recommendation statements and beneficial ownership
reports on Schedules 14D-1, 14D-9 and 13D.

The Purchaser is offering to purchase Units which are an illiquid investment
and is not offering to purchase the Partnership's underlying assets. The
Purchaser has relied solely on publicly available information in making its
estimate of the value of the Units. The Purchaser's estimated value of the Units
was calculated solely for purposes of formulating the Offer and cannot be relied
upon as representing an amount which might actually be realized upon a
liquidation of the Partnership, whether now or at any time in the future.

The Partnership currently owns four residential apartment complexes and one
commercial property: Big Walnut Apartments, a 251-unit complex in Columbus,
Ohio, LaFontenay Apartments, a 260-unit complex in Louisville, Kentucky, The
Trails Apartments, a 248-unit complex in Nashville, Tennessee, and Greensprings
Manor Apartments, a 582-unit complex in Indianapolis, Indiana; and Shoppes at
River Rock, a 120,000 square foot commercial property in Murfreesboro,
Tennessee.

The Offer Price represents the price at which the Purchaser is willing to
purchase Units. No independent person has been retained to evaluate or render
any opinion with respect to the fairness of the Offer Price and no
representation is made by the Purchaser or any affiliate of the Purchaser as to
such fairness. Other measures of the value of the Units may be relevant to
Unitholders. Unitholders are urged to consider carefully all of the information
contained herein and consult with their own advisors, tax, financial or
otherwise, in evaluating the terms of the Offer before deciding whether to
tender Units.

In a tender offer that will terminate on December 30, 1999, if not extended,
an affiliate of the General Partner seeks to acquire a total of 1,035 Units for
a net price to sellers equal to $5,256.05 per Unit, $443.95 per Unit less than
the offer being made by the Purchaser (the "Competing Tender Offer"), except
that in the Competing Tender Offer, the affiliate of the General Partner has
agreed to pay the legal fees, costs and expenses of counsel for the plaintiffs
to the Litigation. If you accept this Offer, you may be required to pay these
amounts in connection with the Litigation. The Competing Tender Offer consists
of: (i) an initial tender offer for all of the units not owned by the General
Partner or its affiliates in each partnership; and (ii) a second tender offer
made within 18 months of the first tender offer for those non-affiliate owned
units not previously tendered (the "Second Tender Offer"). In the Competing
Tender Offer, an affiliate of the General Partner has offered to purchase for
cash up to $50,000,000 of units from 49 limited partnerships involved in the
Litigation. The total amount being offered for units in all such limited
partnerships is approximately $480,000.000. If more than $50,000,000 of units in
all such limited partnerships are tendered in the aggregate, Apartment
Investment and Management Company ("AIMCO") may offer you its stock for all
amounts of tendered units in excess of $50,000,000, subject to the terms and
conditions contained in the Competing Tender Offer.

GENERAL BACKGROUND INFORMATION

Certain information contained in this Offer to Purchase which relates to, or
represents, statements made by the Partnership or the General Partner, has been
derived from information provided in reports filed by the Partnership with the
Commission and Tender Offer Documents filed with the Commission on November 15,
1999 by AIMCO Properties, L.P., an affiliate of the General Partner.

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According to publicly available information, there were 1,224.25 Units
issued and outstanding held by approximately 1,622 Unitholders at December 31,
1998.

If, prior to the Expiration Date, the Purchaser increases the consideration
offered to Unitholders pursuant to the Offer, such increased consideration will
be paid with respect to all Units that are purchased pursuant to the Offer,
whether or not such Units were tendered prior to such increase in consideration.

Each Unitholder must make his or her own decision based on his or her
particular circumstances. Unitholders should consult with their respective
advisors about the financial, tax, legal and other implications to them of
accepting the Offer. UNITHOLDERS ARE URGED TO READ THIS OFFER TO PURCHASE AND
THE ACCOMPANYING LETTER OF TRANSMITTAL AND THE OTHER ACCOMPANYING MATERIALS
CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS.

TENDER OFFER

SECTION 1. TERMS OF THE OFFER. Upon the terms and subject to the conditions
of the Offer, the Purchaser will accept for payment and pay for Units validly
tendered on or prior to the Expiration Date and not withdrawn in accordance with
Section 4 of this Offer to Purchase. The term "Expiration Date" shall mean
4:00 p.m., central standard time, on December 30, 1999, unless and until the
Purchaser has extended the period of time for which the Offer is open, in which
event the term "Expiration Date" shall mean the latest time and date on which
the Offer, as so extended by the Purchaser, shall expire.

The Offer is conditioned on satisfaction of certain conditions. See Section
14, which sets forth in full the conditions of the Offer. The Purchaser reserves
the right (but shall not be obligated), in its sole discretion and for any
reason, to waive any or all of such conditions. If, by the Expiration Date, any
or all of such conditions have not been satisfied or waived, the Purchaser
reserves the right (but shall not be obligated) to: (i) decline to purchase any
of the Units tendered, terminate the Offer and return all tendered Units to
tendering Unitholders; (ii) waive all the unsatisfied conditions and, subject to
complying with applicable rules and regulations of the Commission, purchase all
Units validly tendered; (iii) extend the Offer and, subject to the right of
Unitholders to withdraw Units until the Expiration Date, retain the Units that
have been tendered during the period or periods for which the Offer is extended;
or (iv) to amend the Offer.

The Purchaser does not anticipate and has no reason to believe that any
condition or event will occur that would prevent the Purchaser from purchasing
tendered Units as offered herein.

SECTION 2. PRORATION; ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS. The
Purchaser is offering to purchase 820 Units in the Partnership. If the Purchaser
were to purchase the 820 Units being offered for, it would own 67% of the
outstanding Units.

If Units are validly tendered and not properly withdrawn on or before the
Expiration Date and the purchase of all such Units would result in there being
less than 320 Unitholders, the Purchaser will purchase only 99% of the total
number of Units so tendered by each Unitholder with adjustments rounded up or
down, at the sole discretion of the Purchaser, to avoid the purchase of
fractional Units, if possible.

If more than 820 Units are validly tendered on or prior to the Expiration
Date and not properly withdrawn on or prior to the Expiration Date, the
Purchaser will only accept for payment, upon the terms and subject to the
conditions of the Offer, and pay for an aggregate of 820 Units so tendered, pro
rata according to the number of Units validly tendered and not properly
withdrawn on or prior to the Expiration Date, with appropriate adjustments to
avoid: (i) purchases of fractional Units; and (ii) purchases that would violate
Section 12 of the Partnership Agreement. If the number of Units validly tendered
and not properly withdrawn on or prior to the Expiration Date is less than or
equal to 820 Units,

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the Purchaser will purchase all Units as tendered and not properly withdrawn,
upon the terms and subject to the conditions of the Offer.

In the event the proration of tendered Units is required, and because of the
difficulty of determining the proration results, the Purchaser may not be able
to announce the final results of such proration until at least approximately
seven business days after the Expiration Date. Subject to the Purchaser's
obligation under Rule 14(e)-1(c) under the Exchange Act, to pay Unitholders the
Purchase Price in respect of Units tendered or return those Units promptly after
the termination or withdrawal of the Offer, the Purchaser does not intend to pay
for any Units accepted for payment pursuant to the Offer until the final
proration results are known.

Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment, and will pay for, Units
validly tendered and not withdrawn in accordance with Section 4, as promptly as
practicable following the Expiration Date. In all cases, payment for Units
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other documents required by the Letter of
Transmittal.

For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) tendered Units when, as and if the Purchaser
gives oral or written notice to the Depositary of the Purchaser's acceptance for
payment of such Units pursuant to the Offer. Upon the terms and subject to the
conditions of the Offer, payment for Units purchased pursuant to the Offer will
in all cases be made by deposit of the Offer Price with the Depositary, which
will act as agent for the tendering Unitholders for the purpose of receiving
payment from the Purchaser and transmitting payment to tendering Unitholders.

Under no circumstances will interest be paid on the Offer Price by reason of
any delay in making such payment.

If any tendered Units are not purchased for any reason, the Letter of
Transmittal with respect to such Units not purchased will be of no force or
effect. If, for any reason whatsoever, acceptance for payment of, or payment
for, any Units tendered pursuant to the Offer is delayed or the Purchaser is
unable to accept for payment, purchase or pay for Units tendered pursuant to the
Offer, then, without prejudice to the Purchaser's rights under Section 14 (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary
may, nevertheless, on behalf of the Purchaser, retain tendered Units, subject to
any limitations of applicable law, and such Units may not be withdrawn except to
the extent that the tendering Unitholders are entitled to withdrawal rights as
described in Section 4.

If, prior to the Expiration Date, the Purchaser shall increase the
consideration offered to Unitholders pursuant to the Offer, such increased
consideration shall be paid for all Units accepted for payment pursuant to the
Offer, whether or not such Units were tendered prior to such increase.

SECTION 3. PROCEDURES FOR TENDERING UNITS.

VALID TENDER. For Units to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (a copy of which is
enclosed with this Offer to Purchase, printed on yellow paper) with any other
documents required by the Letter of Transmittal must be received by the
Depositary at its address on or prior to the Expiration Date. A Unitholder may
tender any or all Units owned by such Unitholder.

In order for a tendering Unitholder to participate in the Offer, Units must
be validly tendered and not withdrawn prior to the Expiration Date, which is
4:00 p.m., central standard time, on December 30, 1999, or such date to which
the Offer may be extended.

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The method of delivery of the Letter of Transmittal and all other required
documents is at the option and risk of the tendering Unitholder and delivery
will be deemed made only when actually received by the Depositary.

BACKUP FEDERAL INCOME TAX WITHHOLDING. To prevent the possible application
of 31% backup federal income tax withholding with respect to payment of the
Offer Price for Units purchased pursuant to the Offer, a tendering Unitholder
must provide the Depositary with such Unitholder's correct taxpayer
identification number and make certain certifications that such Unitholder is
not subject to backup federal income tax withholding. Each tendering Unitholder
must insert in the Letter of Transmittal the Unitholder's taxpayer
identification number or social security number in the space provided on the
Letter of Transmittal. The Letter of Transmittal also includes a substitute Form
W-9, which contains the certifications referred to above. (See the Instructions
to the Letter of Transmittal.)

FIRPTA WITHHOLDING. To prevent the withholding of federal income tax in an
amount equal to 10% of the sum of the Offer Price plus the amount of Partnership
liabilities allocable to each Unit tendered, each Unitholder must complete the
FIRPTA Affidavit included in the Letter of Transmittal certifying such
Unitholder's taxpayer identification number and address and that the Unitholder
is not a foreign person. (See the Instructions to the Letter of Transmittal and
"Section 6. Certain Federal Income Tax Consequences.")

ASSIGNMENT OF INTEREST IN FUTURE DISTRIBUTIONS. By executing the Letter of
Transmittal, a Unitholder will irrevocably assign to the Purchaser and its
assigns all of the Unitholder's right, title and interest in and to any and all
distributions made by the Partnership from any source and of any nature,
including, without limitation, distributions in the ordinary course,
distributions from sales of assets, distributions upon liquidation, winding-up
or dissolution, payments in settlement of existing or future litigation, and all
other distributions and payments from and after the expiration date of the
Offer, in respect of the Units tendered by the Unitholder and accepted for
payment and thereby purchased by the Purchaser. If, after the Unit is accepted
for payment and purchased by the Purchaser, or at any time after the date of
this Offer with respect to the Litigation, the Unitholder receives any
distribution from any source and of any nature, including, without limitation,
distributions in the ordinary course, distributions from sales of assets,
distributions upon liquidation, winding-up or dissolution, payments in
settlement of existing or future litigation and all other distributions and
payments, from the Partnership in respect of its Unit, it will agree to forward
promptly such distribution to the Purchaser.

OTHER REQUIREMENTS. By executing a Letter of Transmittal as set forth
above, a tendering Unitholder irrevocably appoints the designees of the
Purchaser as such Unitholder's proxies, in the manner set forth in the Letter of
Transmittal, each with full power of substitution, to the full extent of such
Unitholder's rights with respect to the Units tendered by such Unitholder and
accepted for payment by the Purchaser. Such appointment will be effective when,
and only to the extent that, the Purchaser accepts such Units for payment. Upon
such acceptance for payment, all prior proxies given by such Unitholder with
respect to such Units will, without further action, be revoked, and no
subsequent proxies may be given (and if given will not be effective). The
designees of the Purchaser will, with respect to such Units, be empowered to
exercise all voting and other rights of such Unitholder as they in their sole
discretion may deem proper at any meeting of Unitholders, by written consent or
otherwise. In addition, by executing a Letter of Transmittal, a Unitholder also
assigns to the Purchaser all of the Unitholder's rights to receive distributions
from the Partnership with respect to Units which are accepted for payment and
purchased pursuant to the Offer, other than those distributions declared or paid
during the period commencing on the Offer Date and terminating on the Expiration
Date.

DETERMINATION OF VALIDITY; REJECTION OF UNITS; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Units pursuant to the procedures described above will be determined by the
Purchaser, in its

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<PAGE>
sole discretion, which determination shall be final and binding. The Purchaser
reserves the absolute right to reject any or all tenders if not in proper form
or if the acceptance of, or payment for, the Units tendered may, in the opinion
of the Purchaser's counsel, be unlawful. The Purchaser also reserves the right
to waive any defect or irregularity in any tender with respect to any particular
Units of any particular Unitholder, and the Purchaser's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and the
Instructions thereto) will be final and binding. Neither the Purchaser, the
Depositary, nor any other person will be under any duty to give notification of
any defects or irregularities in the tender of any Units or will incur any
liability for failure to give any such notification.

A tender of Units pursuant to any of the procedures described above will
constitute a binding agreement between the tendering Unitholder and the
Purchaser upon the terms and subject to the conditions of the Offer, including
the tendering Unitholder's representation and warranty that: (i) such Unitholder
owns the Units being tendered within the meaning of Rule 14e-4 under the
Exchange Act; and (ii) the tender of such Units complies with Rule 14e-4.
Rule 14e-4 requires, in general, that a tendering security holder actually be
able to deliver the security subject to the tender offer, and is of concern
particularly to any Unitholders who have granted options to sell or purchase the
Units, hold option rights to acquire such securities, maintain "short" positions
in the Units (i.e., have borrowed the Units) or have loaned the Units to a short
seller. Because of the nature of limited partnership interests, the Purchaser
believes it is unlikely that any option trading or short selling activity exists
with respect to the Units. In any event, a Unitholder will be deemed to tender
Units in compliance with Rule 14e-4 and the Offer if the holder is the record
owner of the Units and the holder: (i) delivers the Units pursuant to the terms
of the Offer; (ii) causes such delivery to be made; (iii) guarantees such
delivery; (iv) causes a guaranty of such delivery; or (v) uses any other method
permitted in the Offer (such as facsimile delivery of the Transmittal Letter).

SECTION 4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section
4, all tenders of Units pursuant to the Offer are irrevocable, provided that
Units tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment as provided in this
Offer to Purchase, may also be withdrawn at any time on or after February 11,
2000.

For withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at the address or the
facsimile number set forth in the attached Letter of Transmittal. Any such
notice of withdrawal must specify the name of the person who tendered the Units
to be withdrawn and must be signed by the person(s) who signed the Letter of
Transmittal in the same manner as the Letter of Transmittal was signed.

If purchase of, or payment for, Units is delayed for any reason or if the
Purchaser is unable to purchase or pay for Units for any reason, then, without
prejudice to the Purchaser's rights under the Offer, tendered Units may be
retained by the Depositary on behalf of the Purchaser and may not be withdrawn
except to the extent that tendering Unitholders are entitled to withdrawal
rights as set forth in this Section 4, subject to Rule 14e-1(c) under the
Exchange Act, which provides that no person who makes a tender offer shall fail
to pay the consideration offered or return the securities deposited by or on
behalf of security holders promptly after the termination or withdrawal of the
tender offer.

All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. Neither the
Purchaser, the Depositary, nor any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
will incur any liability for failure to give any such notification.

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Any Units properly withdrawn will be deemed not to be validly tendered for
purposes of the Offer. Withdrawn Units may be re-tendered, however, by following
the procedures described in Section 3 at any time prior to the Expiration Date.

SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT. The
Purchaser expressly reserves the right, in its sole discretion, at any time and
from time to time: (i) to extend the period of time during which the Offer is
open and thereby delay acceptance for payment of, and the payment for, any Units
by giving oral or written notice of such extension to the Depositary; (ii) upon
the occurrence or failure to occur of any of the conditions specified in Section
14, to delay the acceptance for payment of, or payment for, any Units not
heretofore accepted for payment or paid for, or to terminate the Offer and not
accept for payment any Units not theretofore accepted for payment or paid for,
by giving oral or written notice of such termination to the Depositary; and
(iii) to amend the Offer in any respect (including, without limitation, by
increasing or decreasing the consideration offered or the number of Units being
sought in the Offer or both or changing the type of consideration) by giving
oral or written notice of such amendment to the Depositary. Any extension,
termination or amendment will be followed as promptly as practicable by public
announcement, the announcement in the case of an extension to be issued no later
than 9:00 a.m., central standard time, on the next business day after the
previously scheduled Expiration Date, in accordance with the public announcement
requirement of Rule 14d-4(c) under the Exchange Act. Without limiting the manner
in which the Purchaser may choose to make any public announcement, except as
provided by applicable law (including Rule 14d-4(c) under the Exchange Act), the
Purchaser will have no obligation to publish, advertise or otherwise communicate
any such public announcement. The Purchaser may also be required by applicable
law to disseminate to Unitholders certain information concerning the extensions
of the Offer and any material changes in the terms of the Offer.

If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Units) is delayed in its payment for Units
or is unable to pay for Units pursuant to the Offer for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Depositary may
retain tendered Units on behalf of the Purchaser, and such Units may not be
withdrawn except to the extent tendering Unitholders are entitled to withdrawal
rights as described in Section 4. However, the ability of the Purchaser to delay
payment for Units that the Purchaser has accepted for payment is limited by
Rule 14e-1 under the Exchange Act, which requires that the Purchaser pay the
consideration offered or return the securities deposited by or on behalf of
holders of securities promptly after the termination or withdrawal of the Offer.

If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which an
offer must remain open following a material change in the terms of the offer or
information concerning the offer, other than a change in price or a change in
percentage of securities sought, will depend upon the facts and circumstances,
including the relative materiality of the change in the terms or information.
With respect to a change in price or a change in percentage of securities sought
(other than an increase of not more than 2% of the securities sought), however,
a minimum ten business day period is generally required to allow for adequate
dissemination to security holders and for investor response. As used in this
Offer to Purchase, "business day" means any day other than a Saturday, Sunday or
a federal holiday, and consists of the time period from 12:01 a.m. through 12:00
midnight, central standard time.

SECTION 6. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. THE FEDERAL INCOME TAX
DISCUSSION SET FORTH BELOW IS INCLUDED HEREIN FOR GENERAL INFORMATION ONLY AND
DOES NOT PURPORT TO ADDRESS ALL ASPECTS OF TAXATION THAT MAY BE RELEVANT TO A
PARTICULAR UNITHOLDER. For example, this discussion does not address the effect
of any applicable foreign, state, local or other tax laws other than federal
income tax laws. Certain Unitholders (including trusts, foreign persons,
tax-exempt organizations or corporations subject to special rules, such as

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<PAGE>
life insurance companies, securities dealers or S corporations) may be subject
to special rules not discussed below. This discussion is based on the Internal
Revenue Code of 1986, as amended (the "Code"), existing regulations, court
decisions and Internal Revenue Service ("IRS") rulings and other pronouncements,
all of which may be subject to change, perhaps with retroactive effect. EACH
UNITHOLDER TENDERING UNITS SHOULD CONSULT SUCH UNITHOLDER'S OWN TAX ADVISOR AS
TO THE PARTICULAR TAX CONSEQUENCES TO SUCH UNITHOLDER OF ACCEPTING THE OFFER,
INCLUDING THE APPLICATION OF THE ALTERNATIVE MINIMUM TAX AND FEDERAL, FOREIGN,
STATE, LOCAL AND OTHER TAX LAWS.

The following discussion is based on the assumption that the Partnership is
treated as a partnership for federal income tax purposes and is not a "publicly
traded partnership" as that term is defined in the Code.

GAIN OR LOSS. A taxable Unitholder will recognize a gain or loss on the
sale of such Unitholder's Units in an amount equal to the difference between:
(i) the amount realized by such Unitholder on the sale; and (ii) such
Unitholder's adjusted tax basis in the Units sold. The amount realized by a
Unitholder will include the amount of cash received in exchange for the Units
plus the Unitholder's share of the Partnership's liabilities, if any, allocable
to the Units sold (as determined under Code Section 752 and the regulations
thereunder). If the Unitholder reports a loss on the sale, such loss generally
could not be currently deducted by such Unitholder except against such
Unitholder's capital gains from other investments, assuming the Units were a
capital asset in the Unitholder's hands. In addition, such loss would be treated
as a passive activity loss. (See "Suspended Passive Activity Losses" below.)

The adjusted tax basis of a Unitholder in the Units will depend upon
individual circumstances. (See "Partnership Allocations in Year of Sale" below.)
Each Unitholder who plans to tender hereunder should consult with the
Unitholder's own tax advisor as to the Unitholder's adjusted tax basis in the
Unitholder's Units and the resulting tax consequences of a sale.

If any portion of the amount realized by a Unitholder is attributable to
such Unitholder's share of "unrealized receivables" or "substantially
appreciated inventory items" as defined in Code Section 751, a corresponding
portion of such Unitholder's gain or loss will be treated as ordinary gain or
loss. It is possible that the basis allocation rules of Code Section 751 may
result in a Unitholder's recognizing ordinary income with respect to the portion
of the Unitholder's amount realized on the sale of a Unit that is attributable
to such items while recognizing a capital loss with respect to the remainder of
the Unit.

The proper federal income tax treatment of amounts received in respect of a
Unitholder's claims in the Litigation is unclear. If any portion of the amount
realized by a Unitholder upon a sale of a Unit pursuant to the Offer is
attributable to the release of such Unitholder's claims in the Litigation, a
corresponding amount of such Unitholder's amount realized may be treated as
ordinary income. Moreover, such recognition of ordinary income by a Unitholder
may cause such Unitholder to recognize a capital loss on the sale of such Unit
(if the remaining amount realized is less than such Unitholder's adjusted tax
basis in the Unit). Although the Purchaser is not specifically allocating any
portion of the Offer Price to the acquisition of a Unitholder's claims in the
Litigation, the absence of such an allocation will not preclude the IRS from
asserting, and no assurance can be given that the IRS will not assert, that some
portion of the Offer Price represents a payment by the Purchaser to acquire such
claims. Each Unitholder should consult its own tax advisor regarding the tax
consequences of its release or sale of its claims in the Litigation.

A tax-exempt Unitholder (other than an organization described in Code
Sections 501(c)(7) (social club), 501(c)(9) (voluntary employee benefit
association), 501(c)(17) (supplementary unemployment benefit trust), or
501(c)(20) (qualified group legal services plan)) should not be required to
recognize

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unrelated trade or business income upon the sale of its Units pursuant to the
Offer, assuming that such Unitholder does not hold its Units as a "dealer" and
such Units, are not treated as debt-financed property.

PARTNERSHIP ALLOCATIONS IN YEAR OF SALE. A tendering Unitholder will be
allocated the Unitholder's pro rata share of the annual taxable income and
losses from the Partnership with respect to the Units sold for the period
through the date of sale, even though such Unitholder will assign to the
Purchaser its rights to receive certain cash distributions with respect to such
Units. Such allocations and any Partnership distributions for such period would
affect a Unitholder's adjusted tax basis in the tendered Units and, therefore,
the amount of gain or loss recognized by the Unitholder on the sale of the
Units.

POSSIBLE TAX TERMINATION. The Code provides that if 50% or more of the
capital and profits interests in a partnership are sold or exchanged within a
12-month period, such partnership generally will terminate for federal income
tax purposes. It is possible that the Partnership could terminate for federal
income tax purposes as a result of consummation of the Offer. If so, the
Partnership will be treated as having made a liquidating distribution of an
undivided interest in all of its assets and liabilities to the remaining
Unitholders, the partners of the Partnership after consummation of the Offer
(i.e., the nontendering Unitholders and the Purchaser) would be treated as
having recontributed their interests in Partnership assets to the Partnership,
and the capital accounts of all partners would be restated. A Unitholder would
recognize gain on the liquidating distribution only to the extent that the
amount of cash deemed distributed to the Unitholder exceeded the Unitholder's
basis in the Units. Depending on the Unitholders' bases in their Units and the
Partnership's tax basis in its property, a tax termination could affect, perhaps
adversely, the amount of depreciation deductions reported by the Partnership for
the period following the date of such termination. A tax termination of the
Partnership also could have an adverse effect on Unitholders whose tax year is
not on a calendar year, of the inclusion of more than one year of Partnership
tax items in one tax return of such Unitholders, resulting in a "bunching" of
income. In addition, a tax termination could have an adverse effect on
non-tendering Unitholders who subsequently dispose of their Units at a gain of
requiring them to treat a greater portion of such gain as ordinary income (due
to the application of Code Section 735) than would otherwise be required absent
a tax termination of the Partnership.

SUSPENDED "PASSIVE ACTIVITY LOSSES". A Unitholder who sells all of the
Unitholder's Units would be able to deduct "suspended" passive activity losses
from the Partnership, if any, in the year of sale free of the passive activity
loss limitation. As a limited partner of the Partnership, which was engaged in
real estate activities, the ability of a Unitholder, who or which is subject to
the passive activity loss rules, to claim tax losses from the Partnership was
limited. Upon sale of all of the Unitholder's Units, such Unitholder would be
able to use any "suspended" passive activity losses first against gain, if any,
on sale of the Unitholder's Units and then against income from any other source.

FOREIGN UNITHOLDERS. Gain realized by a foreign Unitholder on a sale of a
Unit pursuant to the Offer will be subject to federal income tax. Under Code
Section 1445, the transferee of a partnership interest held by a foreign person
is generally required to deduct and withhold a tax equal to 10% of the amount
realized on the disposition. The Purchaser will withhold 10% of the amount
realized by a tendering Unitholder from the purchase price payment to be made to
such Unitholder unless the Unitholder properly completes and signs the FIRPTA
Affidavit included as part of the Letter of Transmittal certifying the
Unitholder's TIN, that such Unitholder is not a foreign person and the
Unitholder's address. Amounts withheld would be creditable against a foreign
Unitholder's federal income tax liability and, if in excess thereof, a refund
could be obtained from the IRS by filing a U.S. income tax return.

SECTION 7. EFFECTS OF THE OFFER.

LIMITATIONS ON RESALES. The Partnership Agreement restricts transfers of
Units if, among other things, in the opinion of counsel to the Partnership a
transfer would cause a termination of the Partnership

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for federal income tax purposes (which termination will occur when Units
representing 50% or more of the total Partnership capital and profits are
transferred within a 12-month period). Consequently, sales of Units in the
secondary market and in private transactions during the 12-month period
following completion of the Offer may be restricted, and the Partnership may not
process any requests for recognition of transfers of Units during such 12-month
period which the General Partner believes may cause a tax termination. See
"Section 6. Certain Federal Income Tax Consequences" and "Section 14. Conditions
of the Offer."

EFFECT ON TRADING MARKET. The Partnership's Annual Report on Form 10-KSB
for the year ended December 31, 1998 states that "[t]here is no established
market for the Units and it is not anticipated that any will develop in the
future." A reduction in the number of Unitholders may further restrict the
Unitholders' ability to find purchasers for their Units on any secondary market.

CONTROL OF UNITHOLDER VOTING DECISIONS BY PURCHASER. Subject to the terms
of the Partnership Agreement, the Purchaser will have the right to vote each
Unit purchased pursuant to the Offer. If the Purchaser is successful in
acquiring a significant number of Units pursuant to the Offer, the Purchaser
could be in a position to significantly influence Partnership decisions on which
investor limited partners may vote. If all Units sought by the Purchaser are
tendered and accepted for payment pursuant to the Offer, the Purchaser will own
67% of the outstanding Units. This would effectively: (i) prevent non-tendering
Unitholders from taking action desired by them that the Purchaser opposes; and
(ii) enable the Purchaser to take action desired by it but opposed by
non-tendering Unitholders. Under the terms of the Partnership Agreement, a
majority in interest of the investor limited partners are entitled to take
action with respect to a variety of matters, including: (i) removal of the
General Partner; (ii) termination and dissolution of the Partnership;
(iii) sale of all or substantially all of the Partnership's properties; and
(iv) most types of amendments to the Partnership Agreement. Although the
Purchaser has no current intentions with regard to any of these matters, it will
vote the Units acquired pursuant to the Offer in its interest, which may not be
in the best interests of the non-tendering Unitholders.

RECOGNITION OF TAXABLE GAIN ON A SALE OF YOUR UNITS. The sale of Units for
cash will be a taxable sale, with the result that a selling Unitholder will
recognize taxable gain or loss measured by the difference between the amount
realized on the sale and its adjusted tax basis in the Units transferred to the
Purchaser. The "amount realized" with respect to a Unit transferred to the
Purchaser will be equal to the sum of the amount of cash received by a selling
Unitholder for the Unit sold pursuant to the Offer plus the amount of
Partnership liabilities allocable to the Unit. The particular tax consequences
for a selling Unitholder of the Offer will depend upon a number of factors
related to each tax situation, including the tax basis in the Units transferred
to the Purchaser, whether all of the Units are disposed of and whether the
Unitholder has available suspended passive losses, credits or other tax items to
offset any gain recognized as a result of the sale of Units. Therefore,
depending on the basis in the Units and a Unitholder's tax position, the taxable
gain and any tax liability resulting from a sale of Units to the Purchaser
pursuant to the Offer could exceed the Offer Price. As the income tax
consequences of tendering Units will not be the same for everyone, each
Unitholder should consult its own tax advisor to determine the tax consequences
of the Offer.

OTHER POTENTIAL EFFECTS. The Units are registered under Section 12(g) of
the Exchange Act, which requires, among other things that the Partnership
furnish certain information to its Unitholders and to the Commission and comply
with the Commission's proxy rules in connection with meetings of, and
solicitation of consents from, Unitholders. Registration and reporting
requirements could be terminated by the Partnership if the number of record
holders falls below 300, or below 500 if the Partnership's total assets are
below $10 million for three consecutive preceding fiscal years. The Partnership
reported total assets of approximately $25 million as of its most recent fiscal
year end and a total of approximately 1,622 limited partners. Because the
Purchaser will not purchase Units so that there are less than 320 Unitholders
(see "Section 2. Proration; Acceptance for Payment and Payment for Units"), the
Purchaser does not believe

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that the purchase of Units pursuant to the Offer will result in the Units
becoming eligible for deregistration under the Exchange Act.

SECTION 8. BACKGROUND AND REASONS FOR THE OFFER.

GENERAL. The Purchaser is in the business of owning, acquiring, developing,
expanding and managing multi-family apartment properties as well as acquiring
direct and indirect interests in apartment properties such as the properties
owned by the Partnership. The Offer provides the Purchaser with an opportunity
to purchase ownership interests in the Partnership while providing Unitholders
with an opportunity to liquidate their current investment. The Purchaser is very
familiar with the residential real estate industry, feels that the price being
offered by the General Partner in its tender offer is low and wants to purchase
the Units with the intention of later being able to sell them at a higher price
and/or to receive any distributions made by the Partnership.

On November 15, 1999, AIMCO Properties, L.P., an affiliate of the General
Partner, commenced a tender offer for 1,035 Units for a net price to the
Unitholders equal to $5,256.05 per Unit, $443.95 per Unit less than the offer
being made by the Purchaser except for any legal fees, costs and expenses
Unitholders may be required to pay in connection with the Litigation. The
Competing Tender Offer is being conducted in connection with a proposed
settlement, which is subject to final court approval, of class and derivative
action litigation brought on behalf of the limited partners of 50 limited
partnerships, including those of the Partnership. If limited partnership
interests tendered for cash on a combined basis from these partnerships subject
to the class and derivative action litigation exceed $50,000,000, the affiliate
of the General Partner will only pay for $50,000,000 of limited partnership
interests in cash on a pro rata basis, according to the value of the limited
partnership interests tendered by each person, and may offer AIMCO's stock to
you for all amounts of tendered units in excess of $50,000,000, subject to the
terms and conditions contained in the Competing Tender Offer.

Other tender offers have been made by the General Partner or its affiliates.
Other tender offers may have been made by or are currently being made by
unaffiliated third parties to acquire less than 5% of the Units in the
Partnership. The Purchaser is unaware of any such mini-tender offers or the
amounts offered, terms, tendering parties or number of Units involved.

PURPOSE OF THE OFFER. The purpose of the Offer is to enable the Purchaser
to acquire significant interests in the Partnership for investment purposes
based on its expectation that there may be underlying value in the Partnership's
properties. The Purchaser does not currently intend to change current management
or the operation of the Partnership and does not have current plans for any
extraordinary transaction involving the Partnership. However, these plans could
change at any time in the future. If the Purchaser's plans with respect to the
Partnership change in the future, the ability of the Purchaser to influence
actions on which investor limited partners may have a right to vote will depend
on the Unitholders' response to the Offer (i.e., the number of Units tendered).
If the Purchaser acquires only a few Units pursuant to the Offer, it would not
be in a position to influence matters over which investor limited partners have
a right to vote. Conversely, if all the Units sought or tendered and accepted
for payment pursuant to the Offer, the Purchaser will own 67% of the issued and
outstanding Units and, as a result, should be in a position to exert significant
control over matters on which investor limited partners have a right to vote.
The purchase of the Units will allow the Purchaser to benefit from any of the
following: (a) any cash distributions from Partnership operations in the
ordinary course of business; (b) any distribution of net proceeds from the sale
of any Partnership properties; and (c) any distributions of net proceeds from
the liquidation of the Partnership.

DETERMINATION OF OFFER PRICE. In establishing the Offer Price, the
Purchaser reviewed certain publicly available information including, among other
things: (i) the Partnership's Annual Report on Form 10-KSB for the year ended
December 31, 1998; (ii) the Partnership's Quarterly Reports on Form 10-QSB;

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<PAGE>
(iii) prices reported from private sales of Units; and (iv) tender offer
statements, solicitation/recommendation statements and beneficial ownership
reports on Schedules 14D-1, 14D-9 and 13D. The Purchaser's determination of the
Offer Price was based on its review and analysis of the foregoing information
and the other financial information.

VALUATION OF UNITS. The Purchaser determined the Offer Price by reviewing
the analysis in the Competing Tender Offer. The Purchaser believes that the
methodology used by AIMCO Properties, L.P., being an affiliate of the General
Partner, in the Competing Tender Offer is reasonable, but that some of the
assumed variables may be too conservative. The Purchaser expresses no opinion as
to the value of the Litigation. Hence the Purchaser valued the Units at $5,700
each, $443.95 more per Unit than offered by AIMCO Properties, L.P. except for
any legal fees, costs and expenses Unitholders may be required to pay in
connection with the Litigation.

PRICES ON SECONDARY MARKET. Secondary market sales information is not a
reliable measure of value because of the limited amount of any known trades. At
present, privately negotiated sales and sales through intermediaries are the
only means which may be available to a limited partner to liquidate an
investment in Units (other than the Offer and the Competing Tender Offer)
because the Units are not listed or traded on any exchange or quoted on NASDAQ,
on the Electronic Bulletin Board, or in "pink sheets." Secondary sales activity
for the Units, including privately negotiated sales, has been limited and
sporadic.

The prices in the table below are based solely on information reported by
the General Partner in the Competing Tender Offer based on information provided
by sellers and buyers of Units transferred in sale transactions (i.e., excluding
transactions believed to result from the death of a limited partner, rollover to
an IRA account, establishment of a trust, trustee to trustee transfers,
termination of a benefit plan, distributions from a qualified or nonqualified
plan, uniform gifts to minors, abandonment of units or similar non-sale
transactions). According to the General Partner, the transfer paperwork
submitted to the General Partner often did not include the requested price
information or contained conflicting information as to the actual sales price.
Sale prices not reported or disclosed could exceed the reported prices. Set
forth in the table below are the high and low sales prices of Units for the
quarterly periods from January 1, 1996 to September 30, 1998, as reported by the
General Partner and in the Competing Tender Offer:

SALES PRICES OF PARTNERSHIP UNITS,
AS REPORTED BY THE GENERAL PARTNER

<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
Fiscal Year Ended December 31, 1998:
Third Quarter...................................... $7,242.00 $3,200.00
Second Quarter..................................... 6,409.00 2,500.00
First Quarter...................................... 5,500.00 5,400.00
Fiscal Year Ended December 31, 1997:
Fourth Quarter..................................... 7,391.00 700.00
Third Quarter...................................... 8,100.00 3,000.00
Second Quarter..................................... 3,000.00 1,200.00
First Quarter...................................... 6,500.00 3,000.00
Fiscal Year Ended December 31, 1996:
Fourth Quarter..................................... 5,000.00 2,800.00
Third Quarter...................................... 4,000.00 3,000.00
Second Quarter..................................... 6,200.00 2,450.00
First Quarter...................................... 4,000.00 937.50
</TABLE>

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<PAGE>
Set forth below are the high and low sale prices of Units for the years
ended December 31, 1997 and 1998 and for the first seven months of 1999, as
reported by The Partnership Spectrum, which is an independent, third-party
source and presented in the Competing Tender Offer. The gross sales prices
reported by The Partnership Spectrum do not necessarily reflect the net sales
proceeds received by sellers of Units, which typically are reduced by
commissions and other secondary market transaction costs to amounts less than
the reported price. The Partnership Spectrum represents only one source of
secondary sales information, and other services may contain prices for the Units
that equal or exceed sales prices reported in The Partnership Spectrum. The
Purchaser does not know whether the information compiled by The Partnership
Spectrum and presented in the Competing Tender Offer is accurate or complete.

SALES PRICES OF PARTNERSHIP UNITS,
AS REPORTED BY THE PARTNERSHIP SPECTRUM

<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
Fiscal Year Ending December 31, 1999--First Seven
Months............................................... $5,500.00 $5,313.33
Fiscal Year Ended December 31, 1998.................... 7,802.00 3,712.00
Fiscal Year Ended December 31, 1997.................... 8,100.00 6,350.00
</TABLE>

Set forth in the table below are the high and low sales prices of Units for
the year ended December 31, 1998 and the nine months ended September 30, 1999,
as reported by the American Partnership Board, which is an independent,
third-party source and presented in the Competing Tender Offer. The gross sales
prices reported by American Partnership Board do not necessarily reflect the net
sales proceeds received by sellers of Units, which typically are reduced by
commissions and other secondary market transaction costs to amounts less than
the reported prices. The American Partnership Board represents one source of
secondary sales information, and the other services may contain prices for Units
that equal or exceed sales prices reported by the American Partnership Board.
The Purchaser does not know whether the information compiled by the American
Partnership Board and presented in the Competing Tender Offer is accurate or
complete.

SALES PRICES OF PARTNERSHIP UNITS,
AS REPORTED BY THE AMERICAN PARTNERSHIP BOARD

<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
Nine Months ended September 30, 1999................... $5,387.00 $5,101.00
Fiscal Year Ended December 31, 1998.................... 7,173.00 6,900.00
</TABLE>

ESTIMATED LIQUIDATION PROCEEDS. Liquidation value is a measure of the price
at which the assets of the Partnership would sell if disposed of in an
arm's-length transaction between a willing buyer and the Partnership, each
having access to relevant information regarding the historical revenues and
expenses of the business. The General Partner estimated the liquidation value of
the Units using the same direct capitalization method and assumptions as
undertaken by AIMCO Properties, L.P. in valuing the Units for the Competing
Tender Offer. The liquidation analysis assumed that the Partnership's properties
were sold to an independent, third-party buyer at the current property value and
that other balance sheet assets (excluding amortizing assets) and liabilities of
the Partnership are sold at their book value, and that the net proceeds of sale
are allocated to the limited partners in accordance with the Partnership
Agreement.

The liquidation analysis assumed that the assets of the Partnership were
sold in a single transaction. Should the assets have been liquidated over time,
even at prices equal to those projected, distributions to the limited partners
from cash flow from operations might be reduced because the Partnership's fixed
costs, such as general and administrative expenses, are not proportionally
reduced with the liquidation of assets. However, for simplification purposes,
the Competing Tender Offer assumed that the sale of the assets occurred
concurrently. The liquidation analysis assumed that the assets are disposed of
in an orderly

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<PAGE>
manner and were not sold in forced or distressed sales where sellers might be
expected to dispose of their interests at substantial discounts to their actual
fair market value.

SECTION 9. FUTURE PLANS. The Purchaser currently intends that, upon
consummation of the Offer, the Partnership will continue its business and
operations substantially as they are currently being conducted. The Offer is not
expected to have any effect on Partnership operations.

Although the Purchaser has no present intention to do so, it may acquire
additional Units or sell Units after completion or termination of the Offer. Any
acquisition may be made through private purchases, through one or more future
tender or exchange offers, by merger, consolidation or by any other means deemed
advisable. Any acquisition may be at a price higher or lower than the price to
be paid for the Units purchased pursuant to the Offer, and may be for cash,
shares of beneficial interest in the Purchaser or other consideration. The
Purchaser also may consider selling some or all of the Units it acquires
pursuant to the Offer to persons not yet determined, which may include its
affiliates. The Purchaser may also attempt to buy the Partnership's property,
although it has no present intention to do so. There can be no assurance,
however, that the Purchaser will initiate or complete, or will cause the
Partnership to initiate or complete, any subsequent transaction during any
specific time period following the expiration of the Offer or at all.

Except as set forth herein, the Purchaser does not have any present plans or
proposals which relate to or would result in an extraordinary transaction, such
as a merger, reorganization or liquidation, involving the Partnership or any of
the Partnership's subsidiaries; a sale or transfer of a material amount of the
Partnership's assets (or assets of the Partnership's subsidiaries); any changes
in composition of the Partnership's senior management or personnel or their
compensation; any changes in the Partnership's present capitalization or
distribution policy; or any other material changes in the Partnership's
structure or business. See "Section 7. Effects of the Offer--Control of
Unitholder Voting Decisions by Purchaser" for Purchaser's ability to control the
Partnership.

SECTION 10. THE BUSINESS OF THE PARTNERSHIP. Davidson Diversified Real
Estate II, L.P. was organized on June 11, 1984, under the laws of the State of
Delaware. Its primary business is operating and holding real properties for
investment. It was formed for the purpose of making investments in various types
of real properties which offer potential capital appreciation and cash
distributions to its limited partners.

The Partnership's currently owns four residential apartment complexes and
one commercial property: Big Walnut Apartments, a 251-unit complex in Columbus,
Ohio, LaFontenay Apartments, a 260-unit complex in Louisville, Kentucky, The
Trails Apartments, a 248-unit complex in Nashville, Tennessee, and Greensprings
Manor Apartments, a 582-unit complex in Indianapolis, Indiana; and Shoppes at
River Rock, a 120,000 square foot commercial property in Murfreesboro,
Tennessee.

The Managing General Partner of the Partnership is Davidson Diversified
Properties, Inc., which is a wholly owned subsidiary of Apartment Investment and
Management Company ("AIMCO"). A wholly-owned subsidiary of AIMCO serves as
manager of the properties owned by the Partnership. The Partnership's principal
executive offices are located at Colorado Center, Tower Two, 2000 South Colorado
Boulevard, Suite 2-1000, Denver, Colorado 80222, and its telephone number at
that address is (303) 757-8101.

For additional information about the Partnership, please refer to the annual
and quarterly reports prepared by it which were previously sent to Unitholders,
particularly Item 2 of the Annual Report on Form 10-KSB, which contains detailed
information regarding the properties owned, including mortgages, rental rates
and taxes.

BENEFICIAL OWNERSHIP OF INTERESTS IN THE PARTNERSHIP. The Purchaser: (i)
does not beneficially own or have a right to acquire any Units; (ii) has not
effected any transactions in the Units in the past 60 days; or

19
<PAGE>
(iii) does not have any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Partnership,
including, but not limited to, contracts, arrangements, understandings or
relationships concerning transfer or voting thereof, joint ventures, loan or
option arrangements, puts or calls, guarantees of loans, guarantees against loss
or the giving or withholding of proxies.

Information included herein concerning the Partnership is derived from the
Partnership's publicly-filed reports and as reported in the Competing Tender
Offer.

SECTION 11. CONFLICTS OF INTEREST.

CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER. The Purchaser desires to
purchase Units at a low price and Unitholders desire to sell units at a high
price. Such conflicts of interest in connection with the Offer and the operation
of the Purchaser differ from those conflicts of interest that currently exist
for the Partnership. UNITHOLDERS ARE URGED TO READ THIS OFFER TO PURCHASE AND
ANY SCHEDULE 14D-9 FILED BY THE GENERAL PARTNER AND THE RELATED MATERIALS
CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS.

COMPETITION AMONG PROPERTIES. Because the Purchaser and the Partnership
both invest in apartment properties, these properties may compete with one
another for tenants. Furthermore, the Purchaser owns and may acquire additional
properties in general market areas where the Partnership properties are located.

FUTURE OFFERS. Although the Purchaser has no current plans to conduct
future tender offers for the Units, these plans may change based on future
circumstances. Any such future offers that the Purchaser might make could be for
consideration that is more or less than the consideration currently being
offered.

SECTION 12. CERTAIN INFORMATION CONCERNING THE PURCHASER. The Purchaser is
ERP OPERATING LIMITED PARTNERSHIP. For information concerning the Purchaser and
the respective principals of its general partner, Equity Residential Properties
Trust, please refer to Schedule I attached hereto. The principal business of the
Purchaser is the ownership, acquisition, development, expansion and management
of multi-family properties. The principal business address of the Purchaser is
Two North Riverside Plaza, Chicago, Illinois 60606.

The Purchaser has available sufficient amounts of liquid capital necessary
to fund the acquisition of all Units subject to the Offer, the expenses to be
incurred in connection with the Offer, and all other anticipated costs of the
Purchaser.

Except as otherwise set forth herein: (i) neither the Purchaser nor, to the
best knowledge of the Purchaser, the persons listed on Schedule I nor any
affiliate of the Purchaser beneficially owns or has a right to acquire any
Units; (ii) neither the Purchaser nor, to the best knowledge of the Purchaser,
the persons listed on Schedule I nor any affiliate of the Purchaser, or any
director, executive officer or subsidiary of any of the foregoing has effected
any transaction in the Units within the past 60 days; (iii) neither the
Purchaser nor, to the best knowledge of the Purchaser, the persons listed on
Schedule I nor any affiliate of the Purchaser has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Partnership, including but not limited to, contracts,
arrangements, understandings or relationships concerning the transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies,
consents or authorizations; (iv) there have been no transactions or business
relationships which would be required to be disclosed under the rules and
regulations of the Commission between any of the Purchaser or, to the best
knowledge of the Purchaser, the persons listed on Schedule I, or any affiliate
of the Purchaser on the one hand, and the Partnership or its affiliates, on the
other hand;

20
<PAGE>
and (v) there have been no contracts, negotiations or transactions between the
Purchaser, or to the best knowledge of the Purchaser any affiliate of the
Purchaser on the one hand, the persons listed on Schedule I, and the Partnership
or its affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets.

The Purchaser is subject to the information and reporting requirements of
the Exchange Act and in accordance therewith is required to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Such reports and other information are available on
the Commission's electronic data gathering and retrieval (EDGAR) system, at its
internet web site at
HTTP://WWW.SEC.GOV, and may be inspected at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and are available for inspection and copying at
the regional offices of the Commission located in Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade Center,
13th Floor, New York, New York 10048. Copies of such material can also be
obtained from the Public Reference Room of the Commission in Washington, D.C. at
prescribed rates.

SECTION 13. SOURCE OF FUNDS. The Purchaser expects that approximately
$4,674,000 would be required to purchase 820 Units, if tendered, and an
additional $125,000 may be required to pay related fees and expenses. The
Purchaser anticipates funding all of the purchase price and related expenses
through its existing liquid capital reserves.

SECTION 14. CONDITIONS OF THE OFFER. Notwithstanding any other term of the
Offer, the Purchaser shall not be required to accept for payment or to pay for
any Units tendered if all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
court, administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, necessary for the consummation of the
transactions contemplated by the Offer shall not have been filed, occurred or
been obtained on or before the Expiration Date.

The Purchaser shall not be required to accept for payment or pay for any
Units not theretofore accepted for payment or paid for and may terminate or
amend the Offer as to such Units if, at any time on or after the date of the
Offer and before the Expiration Date, any of the following conditions exists:

(a) a preliminary or permanent injunction or other order of any federal
or state court, government or governmental authority or agency shall have
been issued and shall remain in effect which: (i) makes illegal, delays or
otherwise directly or indirectly restrains or prohibits the making of the
Offer or the acceptance for payment of or payment for any Units by the
Purchaser; (ii) imposes or confirms limitations on the ability of the
Purchaser effectively to exercise full rights of ownership of any Units,
including, without limitation, the right to vote any Units acquired by the
Purchaser pursuant to the Offer or otherwise on all matters properly
presented to the Unitholders; (iii) requires divestiture by the Purchaser of
any Units; (iv) causes any material diminution of the benefits to be derived
by the Purchaser as a result of the transactions contemplated by the Offer;
or (v) might materially adversely affect the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of the Purchaser or the Partnership;

(b) there shall be any action taken, or any statute, rule, regulation or
order proposed, enacted, enforced, promulgated, issued or deemed applicable
to the Offer by any federal or state court, government or governmental
authority or agency, other than the application of the waiting period
provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, which might, directly or indirectly, result in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;

(c) any change or development shall have occurred or been threatened
since the date hereof, in the business, properties, assets, liabilities,
financial condition, operations, results of operations or

21
<PAGE>
prospects of the Partnership, which, in the reasonable judgment of the
Purchaser, is or may be materially adverse to the Partnership, or the
Purchaser shall have become aware of any fact that, in the reasonable
judgment of the Purchaser, does or may have a material adverse effect on the
value of the Units;

(d) there shall have occurred: (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States; (ii) a declaration
of a banking moratorium or any suspension of payments in respect of banks in
the United States; (iii) any limitation by any governmental authority on, or
other event which might affect, the extension of credit by lending
institutions or result in any imposition of currency controls in the United
States; (iv) a commencement of a war or armed hostilities or other national
or international calamity directly or indirectly involving the United
States; (v) a material change in United States or other currency exchange
rates or a suspension of a limitation on the markets thereof; or (vi) in the
case of any of the foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof;

(e) it shall have been publicly disclosed or the Purchaser shall have
otherwise learned that: (i) more than 50% of the outstanding Units have been
or are proposed to be acquired by another person (including a "group" within
the meaning of Section 13(d)(3) of the Exchange Act); or (ii) any person or
group that prior to such date had filed a Statement with the Commission
pursuant to Sections 13(d) or (g) of the Exchange Act has increased or
proposes to increase the number of Units beneficially owned by such person
or group as disclosed in such Statement by 2% or more of the outstanding
Units; or

(f) the court in the Litigation shall fail to approve the assignment of
each Unitholder's rights and claims, if any, in the Litigation to the
Purchaser.

The foregoing conditions are for the sole benefit of the Purchaser and may
be asserted by the Purchaser regardless of the circumstances giving rise to such
conditions or may be waived by the Purchaser in whole or in part at any time and
from time to time in its sole discretion. Any termination by the Purchaser
concerning the events described above will be final and binding upon all
parties.

SECTION 15. CERTAIN LEGAL MATTERS.

GENERAL. Except as set forth in this Section 15, the Purchaser is not aware
of any filings, approvals or other actions by any domestic or foreign
governmental or administrative agency that would be required prior to the
acquisition of Units by the Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is the Purchaser's present intention
that such additional approval or action would be sought. While there is no
present intent to delay the purchase of Units tendered pursuant to the Offer
pending receipt of any such additional approval or the taking of any such
action, there can be no assurance that any such additional approval or action,
if needed, would be obtained without substantial conditions or that adverse
consequences might not result to the Partnership's business, or that certain
parts of the Partnership's business might not have to be disposed of or held
separate or other substantial conditions complied with in order to obtain such
approval or action, any of which could cause the Purchaser to elect to terminate
the Offer without purchasing Units thereunder. The Purchaser's obligation to
purchase and pay for Units is subject to certain conditions, including
conditions related to the legal matters discussed in this Section 15.

ANTITRUST. The Purchaser does not believe that the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, is applicable to the acquisition
of Units pursuant to the Offer.

MARGIN REQUIREMENTS. The Units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, such regulations are not applicable to the Offer.

22
<PAGE>
STATE TAKEOVER LAWS. A number of states have adopted anti-takeover laws
which purport, to varying degrees, to be applicable to attempts to acquire
securities of corporations which are incorporated in such states or which have
substantial assets, security holders, principal executive offices or principal
places of business therein. These laws are directed at the acquisition of
corporations and not partnerships. The Purchaser, therefore, does not believe
that any anti-takeover laws apply to the transactions contemplated by the Offer.

Although the Purchaser has not attempted to comply with any state
anti-takeover statutes in connection with the Offer, the Purchaser reserves the
right to challenge the validity or applicability of any state law allegedly
applicable to the Offer and nothing in this Offer nor any action taken in
connection herewith is intended as a waiver of such right. If any state
anti-takeover statute is applicable to the Offer, the Purchaser might be unable
to accept for payment or purchase Units tendered pursuant to the Offer or be
delayed in continuing or consummating the Offer. In such case, the Purchaser may
not be obligated to accept for purchase or pay for any Units tendered.

THE LITIGATION. On March 24, 1998, certain persons claiming to own limited
partner interests in certain of the limited partnerships for which subsidiaries
of AIMCO Properties, L.P. act as general partner (including the Partnership)
filed the purported class and derivative action against Insignia Financial
Group, Inc., AIMCO, the general partners of the partnerships, certain persons
and entities who purportedly formerly controlled the general partners and
additional entities affiliated with and individuals who are officers, directors
and/or principals of several of the defendants. The compliant contains
allegations that, among other things: (i) the defendants breached fiduciary
duties owed to the plaintiffs, or aided and abetted in those purported breaches,
by selling or agreeing to sell their "fiduciary positions" as stockholders,
officers and directors of the general partners for a profit and retaining said
profit rather than distributing it to the plaintiffs; (ii) the defendants
breached fiduciary duties, or aided and abetted in those purported breaches, by
mismanaging the partnerships and misappropriating assets of the partnerships by
(a) manipulating the operations of the partnerships to depress the trading price
of limited partnership units of the partnerships, (b) coercing and fraudulently
inducing unitholders to sell units to certain of the defendants at depressed
prices, and (c) using the voting control obtained by purchasing units at
depressed prices to entrench certain of the defendants' positions of control
over the partnerships; and (iii) the defendants breached their fiduciary duties
to the plaintiffs by (a) selling assets of the partnerships, such as mailing
lists of unitholders, and (b) causing the general partners to enter into
exclusive arrangements with their affiliates to sell goods and services to the
general partners, the unitholders and tenants of properties owned by the
partnerships. The complaint also alleges that the foregoing allegations
constitute violations of various California securities, corporate and
partnership statutes, as well as conversion and common law fraud. The complaint
seeks unspecified compensatory and punitive damages, an injunction blocking the
sale of control of the general partners and a court order directing the
defendants to discharge their fiduciary duties to the plaintiffs. On June 25,
1998, the defendants filed motions seeking dismissal of the action. In lieu of
responding to the motion, plaintiffs filed an amended complaint. On October 14,
1998, the AIMCO and Insignia defendants filed demurrers to the amended
complaint. The demurrers (which are requests to dismiss the action as a matter
of law) were heard on February 8, 1999, but no decision has been reached by the
court.

Pending decision on defendants' motions, the parties began arm's-length
negotiations relating to a potential settlement of the Litigation. The parties
reached agreement upon the principal terms of the settlement by executing a
Memorandum of Understanding on October 22, 1999. On November 1, 1999, the
parties executed a Stipulation of Settlement setting forth the terms of the
settlement. The settlement provides the basis for the terms contained in the
Competing Tender Offer. A hearing to approve the settlement has been scheduled
for December 10, 1999 in the Superior Court of the State of California, County
of San Mateo. The Purchaser cannot presently anticipate the outcome of such
hearing or its effect on the proposed settlement.

23
<PAGE>
SECTION 16. FEES AND EXPENSES. Except as set forth in this Section 16, the
Purchaser will not pay any fees or commissions to any broker, dealer or other
person for soliciting tenders of units pursuant to the Offer. The Purchaser has
retained the MMS Escrow and Transfer Agency, Inc. to act as Depositary in
connection with the Offer. The Purchaser will pay the Depositary reasonable and
customary compensation for its services in connection with the Offer, plus
reimbursement for out-of-pocket expenses, and will indemnify the Depositary
against certain liabilities and expenses in connection therewith, including
liabilities under the federal securities laws. The Purchaser will also pay all
costs and expenses of printing, publication and mailing of the Offer and all
costs of transfer.

SECTION 17. DISSENTERS' RIGHTS. Neither the Partnership Agreement nor
applicable law provides any right for a Unitholder to have its Units appraised
or redeemed in connection with, or as a result of, the Offer. Each Unitholder
has the opportunity to make an individual decision on whether or not to tender
its Units in the Offer.

SECTION 18. MISCELLANEOUS. THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS
BE ACCEPTED FROM OR ON BEHALF OF) UNITHOLDERS IN ANY JURISDICTION IN WHICH THE
MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH
THE LAWS OF SUCH JURISDICTION. THE PURCHASER IS NOT AWARE OF ANY JURISDICTION
WITHIN THE UNITED STATES IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE
THEREOF WOULD BE ILLEGAL.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED HEREIN OR IN THE LETTER
OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.

December 2, 1999

ERP OPERATING LIMITED PARTNERSHIP

24
<PAGE>
SCHEDULE I--THE PURCHASER AND THE
RESPECTIVE PRINCIPALS OF ITS GENERAL PARTNER

The following table and biographies provide certain information with respect
to the trustees and executive officers of the Purchaser's general partner,
Equity Residential Properties Trust (the "Trust"), as of November 30, 1999.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- --------
<S> <C> <C>
Samuel Zell............................... 57 Chairman of the Board of Trustees (term
expires in 2002)

Douglas Crocker II........................ 59 President, Chief Executive Officer and
Trustee (term expires in 2001)

John W. Alexander......................... 52 Trustee (term expires in 2000)

Stephen O. Evans.......................... 54 Executive Vice President--Strategic
Investments and Trustee (term expires in
2002)

Henry H. Goldberg......................... 61 Trustee (term expires in 2002)

Errol R. Halperin......................... 58 Trustee (term expires in 2000)

James D. Harper, Jr....................... 65 Trustee (term expires in 2001)

Boone A. Knox............................. 62 Trustee (term expires in 2002)

Edward Lowenthal.......................... 54 Trustee (term expires in 2000)

Jeffrey H. Lynford........................ 51 Trustee (term expires in 2000)

Sheli Z. Rosenberg........................ 57 Trustee (term expires in 2001)

Gerald A. Spector......................... 52 Executive Vice President, Chief Operating
Officer and Trustee (term expires in
2001)

Michael N. Thompson....................... 50 Trustee (term expires in 2001)

B. Joseph White........................... 52 Trustee (term expires in 2000)

Alan W. George............................ 41 Executive Vice President--Acquisitions

Edward J. Geraghty........................ 49 Executive Vice President--Development and
President--Eastern Property Division

Michael J. McHugh......................... 43 Executive Vice President, Chief Accounting
Officer and Treasurer

David J. Neithercut....................... 43 Executive Vice President and Chief
Financial Officer

Gregory H. Smith.......................... 48 Executive Vice President and President--
Central Property Division

Leslie B. Fox............................. 41 Executive Vice President and President--
Lexford Division

Bruce C. Strohm........................... 44 Executive Vice President, General Counsel
and Secretary

Frederick C. Tuomi........................ 44 Executive Vice President and President--
Western Property Division
</TABLE>

25
<PAGE>
The following is a biographical summary of the experience of the trustees
and executive officers of the Trust.

Samuel Zell has been Chairman of the Board of the Trust since March 1993.
Since January 1999, Mr. Zell has been chairman of Equity Group Investments, LLC,
an investment company ("EGI LLC"). For more than five years prior to 1999,
Mr. Zell had been chairman of the board of directors of Equity Group
Investments, Inc., an owner, manager and financier of real estate and
corporations ("EGI"). He is also chairman of the board of directors of Jacor
Communications, Inc., an owner and operator of radio stations ("Jacor"),
American Classic Voyages Co., an owner and operator of cruise lines, Anixter
International Inc., a provider of integrated network and cabling systems
("Anixter"), Manufactured Home Communities, Inc., a real estate investment trust
("REIT") specializing in the ownership and management of manufactured home
communities ("MHC"), Chart House Enterprises, Inc., an owner and operator of
restaurants, and Capital Trust, Inc., a specialized finance company ("Capital
Trust"). Mr. Zell is chairman of the board of trustees of Equity Office
Properties Trust, a REIT specializing in the ownership and management of office
buildings ("EOP"). He is a director of Fred Meyer, Inc., an owner and operator
of supermarkets, Davel Communications, Inc., an operator of public payphones,
and Ramco Energy plc, an independent oil company based in the United Kingdom.

Douglas Crocker II has been Chief Executive Officer, President and a Trustee
of the Trust since March 1993. Mr. Crocker has been a director of Wellsford Real
Properties, Inc. ("WRP"), a publicly traded real estate merchant banking firm
since its formation in June 1997, Ventas, Inc., a real estate company focusing
on the ownership and acquisition of health care properties, since
November 1998, and was a director of Horizon Group Inc., an owner, developer and
operator of outlet retail properties from July 1996 to June 1998. Mr. Crocker
has been president and chief executive officer of First Capital Financial
Corporation, a sponsor of public limited real estate partnerships ("First
Capital"), since December 1992, and a director of First Capital since
January 1993. He was an executive vice president of Equity Financial and
Management Company ("EF&M"), a subsidiary of EGI, providing strategic direction
and services for EGI's real estate and corporate activities from November 1992
until March 1997. Mr. Crocker chairs and serves on boards or committees of
various multi-family housing associations, including the National Multi-Housing
Council and the Multifamily Council of the Urban Land Institute, and is a member
of the Board of Governors of the National Association of Real Estate Investment
Trusts ("NAREIT").

John W. Alexander has been a Trustee of the Trust since May 1993 and is the
president of Mallard Creek Capital Partners, Inc., an investment company with
interests in real estate and development entities. He is also a partner of
Meringoff Equities, a real estate investment and development company, and a
director of Jacor.

Stephen O. Evans has been Executive Vice President--Strategic Investments
and a Trustee of the Trust since December 23, 1997, the date of the merger of
Evans Withycombe Residential, Inc. ("Evans"), a multifamily property REIT, into
the Purchaser ("Evans Merger"). Prior to the Evans Merger, Mr. Evans served as
the chairman of the board and chief executive officer of Evans since its
formation in May 1994. Mr. Evans founded Evans Withycombe, Inc., the predecessor
of Evans, in 1977 and served as its chairman of the board and chief executive
officer from 1977 to 1994. Mr. Evans is a member of NAREIT, Lambda Alpha, a
national land economic fraternity, and the Urban Land Institute.

Henry H. Goldberg has been a Trustee of the Trust since January 1995.
Mr. Goldberg is chairman of the board, chief executive officer and founder of
The Artery Group, L.L.C., a diversified real estate company.

Errol R. Halperin has been a Trustee of the Trust since May 1993.
Mr. Halperin has been an attorney at the law firm of Rudnick & Wolfe since 1979,
serving as a senior partner and a member of the firm's policy committee since
1981, and a director of Elkay Manufacturing Company, a manufacturer of stainless

26
<PAGE>
steel sinks, faucets, water coolers and cabinets, since 1980. Mr. Halperin
specializes in federal income tax counseling and real estate and corporate
transactions.

James D. Harper, Jr. has been a Trustee of the Trust since May 1993.
Mr. Harper is the president of JDH Realty Co., a real estate development and
investment company, and is the principal partner in AH Development, S.E. and AH
HA Investments, S.E., special limited partnerships formed to develop over 400
acres of land in Puerto Rico. He is a trustee of EOP and a director of Burnham
Pacific Properties Inc., a REIT that owns, develops and manages commercial real
estate properties in California, and American Health Properties, Inc., a REIT
specializing in health care facilities. Mr. Harper is also a trustee of the
Urban Land Institute.

Boone A. Knox has been a Trustee of the Trust since October 19, 1998, the
date of the merger of Merry Land & Investment Company, Inc. ("Merry Land"), a
multifamily property REIT, into the Purchaser ("Merry Land Merger"). Mr. Knox
has been a director of Merry Land Properties, Inc. ("MRYP"), a publicly traded
diversified real estate company, since its formation as part of the Merry Land
Merger. Prior to the Merry Land Merger, Mr. Knox had been chairman of the board
of Merry Land since December 1996. Mr. Knox has served as chairman of the board
of directors of Regions Bank, Central Georgia since January 1997, and has been a
director of Cousins Properties Incorporated, a REIT specializing in the
ownership, development and management of retail and office buildings, since
1969, and The InterCept Group, Inc., a data processing company for community
banks, since February 1998.

Edward Lowenthal has been a Trustee of the Trust since June 1997, shortly
after the merger of Wellsford Residential Property Trust ("Wellsford"), a
multifamily property REIT, and the Purchaser on May 30, 1997 ("Wellsford
Merger"). Mr. Lowenthal has been the president, chief executive officer and a
director of WRP since its formation in January 1997, and had been the president
and chief executive officer and a trustee of Wellsford since its formation in
July 1992 until the Wellsford Merger. Mr. Lowenthal is a director of Corporate
Renaissance Group, Inc., a mutual fund, Omega Healthcare, Inc., a healthcare
REIT, Omega Worldwide, Inc., a health care finance company, and Great Lakes
REIT, Inc., an office building REIT. He is also a member of the Board of
Governors of NAREIT and a member of the New York bar.

Jeffrey H. Lynford has been a Trustee of the Trust since June 1997, shortly
after the Wellsford Merger. Mr. Lynford has been the chairman of the board and
secretary of WRP since its formation in January 1997, and had been the chairman
of the board and secretary of Wellsford since its formation in July 1992 until
the Wellsford Merger, and the chief financial officer of Wellsford from
July 1992 until December 1994. Mr. Lynford currently serves as a trustee
emeritus of the National Trust for Historic Preservation and as a director of
five mutual funds: Cohen & Steers Equity Income Fund, Inc., Cohen & Steers
Realty Income Fund, Inc., Cohen & Steers Realty Shares, Inc., Cohen & Steers
Special Equity Fund, Inc. and Cohen & Steers Total Return Realty Fund, Inc. He
is also a member of the New York bar.

Sheli Z. Rosenberg has been a Trustee of the Trust since March 1993.
Ms. Rosenberg has been chief executive officer and president of EGI LLC since
January 1999. From November 1994 until 1999, Ms. Rosenberg had been chief
executive officer, president and a director of EGI. Ms. Rosenberg had been a
principal of the law firm of Rosenberg & Liebentritt, P.C. ("R&L") from 1980 to
1997. Ms. Rosenberg is a trustee of EOP and is a director of Capital Trust,
Jacor, MHC, Anixter, CVS Corporation, a drugstore chain, Illinois Power Co., a
supplier of electricity and natural gas in Illinois, and its parent holding
company, Illinova Corp.

Gerald A. Spector has been a Trustee and Executive Vice President of the
Trust since March 1993 and Chief Operating Officer of the Trust since February
1995. Mr. Spector was Treasurer of the Trust from March 1993 through February
1995. From January 1973 until January 1996, Mr. Spector was an officer of EF&M,
most recently serving as vice president from November 1994 through
January 1996. From September 1990 through November 1994, Mr. Spector was
executive vice president and chief operating

27
<PAGE>
officer of EF&M. Mr. Spector was executive vice president and chief operating
officer of EGI from January 1991 through January 1994.

Michael N. Thompson has been a Trustee of the Trust since October 19, 1998,
the date of the Merry Land Merger. Mr. Thompson has been president, chief
operating officer and a director of MRYP since its formation as part of the
Merry Land Merger. Prior to the Merry Land Merger, Mr. Thompson served as
executive vice president and chief operating officer of Merry Land since
December 1996, and as a vice president of Merry Land from August 1992 until
December 1996.

B. Joseph White has been a Trustee of the Trust since May 1993. Mr. White
has been a professor at the University of Michigan Business School since 1987
and has served as the dean since 1991. Mr. White is a director of Kelly
Services, Inc., a temporary services firm, Gordon Food Service, Inc., a
midwestern food distribution company, the Cummins Engine Foundation, the
philanthropic arm of Cummins Engine Co., a diesel engine manufacturer, and
several mutual funds managed by Alger Management, Inc., including the Alger
Fund, Alger American Fund, Alger Retirement Fund, Spectra Fund, and Castle
Convertible Fund.

Alan W. George has been Executive Vice President--Acquisitions of the Trust
since February 1997, Senior Vice President--Acquisitions of the Trust from
December 1995 until February 1997 and Vice President Acquisitions and asset
manager of the Purchaser from August 1993 until December 1995.

Edward J. Geraghty has been Executive Vice President--Development of the
Trust since March 1998 and President--Eastern Property Division since April
1999. Mr. Geraghty was a managing director--real estate of The Travelers
Investment Group, Inc. from June 1995 to March 1998. Mr. Geraghty was an officer
of The Travelers Realty Investment Company, a subsidiary of The Travelers
Insurance Company, from July 1989 to January 1995, most recently serving as an
executive vice president from December 1992 to June 1995.

Michael J. McHugh has been an Executive Vice President of the Trust since
January 1998, and Chief Accounting Officer and Treasurer of the Trust since
February 1995. Mr. McHugh was Senior Vice President of the Trust from February
1995 until January 1998. From May 1990 until January 1995, Mr. McHugh was a
senior vice president and chief financial officer of First Capital.

David J. Neithercut has been Executive Vice President and Chief Financial
Officer of the Trust since February 1995. Mr. Neithercut had been Vice
President--Financing of the Trust from September 1993 until February 1995.
Mr. Neithercut was a senior vice president--finance of EGI from January 1995
until February 1995, and a vice president--finance of Equity Asset
Management, Inc., a subsidiary of EGI providing real estate ownership services,
from October 1990 until December 1994.

Gregory H. Smith has been Executive Vice President of the Trust since
December 1994 and President--Central Property Division since April 1999.
Mr. Smith was a senior vice president of Strategic Realty Advisors, Inc., a real
estate and advisory company, from January 1994 until December 1994. Mr. Smith
was employed at VMS Realty Partners, a sponsor of public and private real estate
limited partnerships, from June 1989 until December 1993, most recently serving
as first vice president.

Leslie B. Fox has been Executive Vice President of the Trust and
President--Lexford Division since October 1999. Ms. Fox was Executive Vice
President and Chief Operating Officer of Lexford Residential Trust from
December 1997 to October 1999. Ms. Fox was Executive Vice President--Investment
Management of Lexford Residential Trust from June 1997 to December 1997.
Ms. Fox was President and Chief Operating Officer of Asset Investors Corporation
and Commercial Assets, Incorporated, two real estate investment trusts from
October 1996 to May 1997.

Bruce C. Strohm has been Executive Vice President and General Counsel of the
Trust since March 1995 and Secretary of the Trust since November 1995.
Mr. Strohm was a Vice President of the Trust from March 1993 through March 1995
and an Assistant Secretary of the Trust from March 1995 through

28
<PAGE>
November 1995. Mr. Strohm was a vice president of R&L from January 1988 to
March 1995, most recently serving as a member of the firm's management
committee.

Frederick C. Tuomi has been Executive Vice President of the Trust since
January 1994 and President--Western Property Division since April 1999.
Mr. Tuomi had been president of RAM Partners, Inc., a subsidiary of Post
Properties, Inc., a multifamily property REIT, from March 1991 to January 1994.

<PAGE>
EXHIBIT 99.(a)(2) EXHIBIT (a)(2)

LETTER OF TRANSMITTAL

TO TENDER UNITS

DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.

PURSUANT TO THE OFFER TO PURCHASE
DATED DECEMBER 2, 1999
BY
ERP OPERATING LIMITED PARTNERSHIP

WE ARE OFFERING TO PURCHASE UNITS IN YOUR PARTNERSHIP FOR $5,700 PER UNIT.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 4:00 P.M., CENTRAL
STANDARD TIME, ON DECEMBER 30, 1999 (THE "EXPIRATION DATE") UNLESS EXTENDED.

- --------------------------------------------------------------------------------

THE DEPOSITARY FOR THE OFFER IS:
MMS ESCROW AND TRANSFER AGENCY, INC.

<TABLE>
<S> <C>
By Hand or Overnight Courier: By Mail:
MMS Escrow and Transfer Agency, Inc. MMS Escrow and Transfer Agency, Inc.
1845 Maxwell St., Suite 101 P.O. Box 7090
Troy, MI 48084 Troy, MI 48007
By Facsimile: (248) 614-4536
-------------------------------------------
</TABLE>

If you require additional information, please call the Depositary at (888)
292-4264.

To participate in the Offer, a duly executed copy of this Letter of
Transmittal and any other documents required by this Letter of Transmittal must
be received by the Depositary on or prior to the Expiration Date. Delivery of
this Letter of Transmittal or any other required documents to an address other
than as set forth above does not constitute valid delivery. The method of
delivery of all documents is at the election and risk of the tendering
Unitholder. Please use the pre-addressed, postage-paid envelope provided.

IF YOU HAVE THE CERTIFICATE ORIGINALLY ISSUED TO REPRESENT YOUR INTEREST IN
THE PARTNERSHIP, PLEASE SEND IT TO THE DEPOSITARY WITH THIS LETTER OF
TRANSMITTAL

This Letter of Transmittal is to be completed by holders of Units of limited
partnership interest in DAVIDSON DIVERSIFIED REAL ESTATE II, L.P., a Delaware
limited partnership (the "Partnership"), pursuant to the procedures set forth in
the Offer to Purchase (as defined below). Capitalized terms used herein and not
defined herein have the meanings ascribed to such terms in the Offer to
Purchase.
<PAGE>
PLEASE CAREFULLY READ THE ACCOMPANYING INSTRUCTIONS

Ladies and Gentlemen:

The undersigned hereby tenders to ERP OPERATING LIMITED PARTNERSHIP (the
"Purchaser") all of the units of limited partnership interest and the rights
attendant to the Litigation (as hereinafter defined) (the "Units") in the
Partnership held by the undersigned or, if less than all such Units, the number
set forth below in the signature box, at a purchase price equal to $5,700 per
Unit, less the amount of any distributions made or declared with respect to the
Units between November 15, 1999 and the Expiration Date, and upon the other
terms and subject to the conditions set forth in the Offer to Purchase (the
"Offer to Purchase") dated December 2, 1999 (the "Offer Date") and in this
Letter of Transmittal, as each may be supplemented or amended from time to time
(which together constitute the "Offer"). Receipt of the Offer to Purchase is
hereby acknowledged. The undersigned recognizes that, if more than 820 Units are
validly tendered prior to or on the Expiration Date and not properly withdrawn,
the Purchaser will, upon the terms of the Offer, accept for payment from among
those Units tendered prior to or on the Expiration Date 820 Units on a pro rata
basis, with adjustments to avoid purchases of certain fractional Units, based
upon the number of Units validly tendered prior to the Expiration Date and not
withdrawn. The undersigned also recognizes that if the purchase of the Units
would result in there being less than 320 Unitholders, the Purchaser will
purchase only 99% of the total number of Units so tendered by each limited
partner with adjustments rounded up or down, at the sole discretion of the
Purchaser, to avoid the purchase of fractional Units, if possible. Subject to
and effective upon acceptance for payment of any of the Units tendered hereby,
the undersigned hereby sells, assigns and transfers to, or upon the order of,
Purchaser all right, title and interest in and to such Units which are purchased
pursuant to the Offer.

The undersigned hereby irrevocably constitutes and appoints the Purchaser as
the true and lawful agent and attorney-in-fact and proxy of the undersigned with
respect to such Units, with full power of substitution (such power of attorney
and proxy being deemed to be an irrevocable power and proxy coupled with an
interest), to deliver such Units and transfer ownership of such Units, on the
books of the Partnership, together with all accompanying evidences of transfer
and authenticity, to or upon the order of the Purchaser and, upon payment of the
purchase price in respect of such Units by the Purchaser, to exercise all voting
rights and to receive all benefits and otherwise exercise all rights of
beneficial ownership of such Units all in accordance with the terms of the
Offer. Subject to and effective upon the purchase of any Units tendered hereby,
the undersigned hereby requests that the Purchaser be admitted to the
Partnership as a "substitute Limited Partner" under the terms of the Agreement
of Limited Partnership of the Partnership. Upon the purchase of Units pursuant
to the Offer, all prior proxies, releases and consents given by the undersigned
with respect to such Units will be revoked and no subsequent proxies, releases
or consents may be given (and if given will not be deemed effective). In
addition, by executing this Letter of Transmittal, the undersigned assigns to
the Purchaser all of the undersigned's rights to receive distributions from the
Partnership with respect to Units which are purchased pursuant to the Offer,
other than distributions declared or paid through the Expiration Date and to
change the address of record for such distributions on the books of the
Partnership. The undersigned assigns its rights and claims under the litigation
entitled ROSALIE NUANES, ET AL. V. INSIGNIA FINANCIAL GROUP, ET AL. (the
"Litigation") to the Purchaser. Upon request, the undersigned will execute and
deliver, and irrevocably directs any custodian to execute and deliver, any
additional documents deemed by the Purchaser to be necessary or desirable to
complete the assignment, transfer and purchase of such Units.

The undersigned irrevocably constitutes and appoints the Purchaser and any
designees of the Purchaser as the true and lawful agent and attorney-in-fact of
the undersigned with respect to such Units, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to withdraw any or all of such Units that have been previously
tendered in response to any tender or exchange offer provided that the price per
Unit being offered by the Purchaser is equal to or higher than the price per
Unit being offered in the previous tender or exchange offer. This appointment is
effective immediately and shall continue to be effective unless and until such
Units are withdrawn from the Offer by the undersigned prior to the Expiration
Date.
<PAGE>
The undersigned hereby represents and warrants that the undersigned owns the
Units tendered hereby within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, and has full power and authority to validly
tender, sell, assign and transfer the Units tendered hereby, and that when any
such Units are purchased by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale or transfer thereof, and such Units will not be
subject to any adverse claim. Upon request, the undersigned will execute and
deliver any additional documents deemed by the Purchaser to be necessary or
desirable to complete the assignment, transfer and purchase of Units tendered
hereby.

All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligations of the undersigned
shall be binding upon the heirs, personal representatives, trustees in
bankruptcy, legal representatives, and successors and assigns of the
undersigned.

The undersigned further represents and warrants that, to the extent a
certificate evidencing the Units tendered hereby (the "original certificate") is
not delivered by the undersigned together with this Letter of Transmittal:
(i) the undersigned represents and warrants to the Purchaser that the
undersigned has not sold, transferred, conveyed, assigned, pledged, deposited or
otherwise disposed of any portion of the Units; (ii) the undersigned has caused
a diligent search of the records to be taken and has been unable to locate the
original certificate; (iii) if the undersigned shall find or recover the
original certificate evidencing the Units, the undersigned will immediately and
without consideration surrender it to the Purchaser; and (iv) the undersigned
shall at all times indemnify, defend, and save harmless the Purchaser and the
Partnership, its successors, and its assigns from and against any and all
claims, actions, and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages, judgments, costs, charges, counsel
fees, and other expenses of every nature and character by reason of honoring or
refusing to honor the original certificate when presented by or on behalf of a
holder in due course of a holder appearing to or believed by the Partnership to
be such, or by issuance or delivery of a replacement certificate, or the making
of any payment, delivery, or credit in respect of the original certificate
without surrender thereof, or in respect of the replacement certificate.

The undersigned understands that a tender of Units to the Purchaser will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned recognizes
the right of the Purchaser to effect a change of distribution address to Two
North Riverside Plaza, Chicago, Illinois 60606. The undersigned recognizes that
under certain circumstances set forth in the Offer to Purchase, the Purchaser
may not be required to accept for payment any of the Units tendered hereby. In
such event, the undersigned understands that any Letter of Transmittal for Units
not accepted for payment will be destroyed by the Purchaser. All authority
herein conferred or agreed to be conferred shall survive the death or incapacity
of the undersigned and any obligations of the undersigned shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
<PAGE>
- --------------------------------------------------------------------------------

SIGNATURE BOX
(PLEASE COMPLETE BOXES A, B, C AND D ON THE FOLLOWING PAGES AS NECESSARY)

Please sign and print your name and insert your Taxpayer Identification
Number or Social Security Number, address, telephone number and number of
Units being tendered in the spaces provided below. For joint owners, each
joint owner must sign and provide the above-listed information. (See
Instruction 1) The signatory hereby certifies under penalties of perjury the
statements in Box B, Box C and, if applicable, Box D.

X __________________________________
(Signature of Owner) Date

If the undersigned is tendering less than all Units held, the number of
Units tendered is set forth below. Otherwise, all Units held by the
undersigned are tendered hereby.

X __________________________________
(Signature of Owner) Date

Name (Printed) _____________________
Taxpayer I.D. or Social # __________
Address ____________________________
______________________________

Telephone No. (day) ________________
(eve) ___________________

______________Units Being Tendered

----------------------------------------------------------------------------

BOX A

MEDALLION SIGNATURE GUARANTEE
(REQUIRED FOR ALL SELLERS)
(SEE INSTRUCTION 1)

Name and Address of Eligible Institution ___________________________________
Authorized Signature _____ Title ________________________________________
Name ______________________ Date ________________________________________

- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------

BOX B

SUBSTITUTE FORM W-9

(SEE INSTRUCTION 3--BOX B)

The person signing this Letter of Transmittal hereby certifies the
following to the Purchaser under penalties of perjury:

(i) The TIN set forth in the Signature Box is the correct TIN of
the Unitholder, or if this box [ ] is checked, the Unitholder has
applied for a TIN. If the Unitholder has applied for a TIN, a TIN has
not been issued to the Unitholder, and either: (a) the Unitholder has
mailed or delivered an application to receive a TIN to the appropriate
IRS Center or Social Security Administration Office; or (b) the
Unitholder intends to mail or deliver an application in the near future
(it being understood that if the Unitholder does not provide a TIN to
the Purchaser within sixty (60) days, 31% of all reportable payments
made to the Unitholder thereafter will be withheld until a TIN is
provided to the Purchaser); and

(ii) Unless this box [ ] is checked, the Unitholder is not subject
to backup withholding either because the Unitholder: (a) is exempt from
backup withholding; (b) has not been notified by the IRS that the
Unitholder is subject to backup withholding as result of a failure to
report all interest or dividends; or (c) has been notified by the IRS
that such Unitholder is no longer subject to backup withholding.

Note: Place an "X" in the box in (ii) if you are unable to certify that
the Unitholder is not subject to backup withholding.

----------------------------------------------------------------------------

BOX C

FIRPTA AFFIDAVIT

(SEE INSTRUCTION 3--BOX C)

Under Section 1445(e)(5) of the Internal Revenue Code and Treas. Reg.
1.1445-11T(d), a transferee must withhold tax equal to 10% of the amount
realized with respect to certain transfers of an interest in a partnership
if 50% or more of the value of its gross assets consists of U.S. real
property interests and 90% or more of the value of its gross assets consists
of U.S. real property interests plus cash equivalents, and the holder of the
partnership interest is a foreign person. To inform the Purchaser that no
withholding is required with respect to the Unitholder's interest in the
Partnership, the person signing this Letter of Transmittal hereby certifies
the following under penalties of perjury:

(i) Unless this box [ ] is checked, the Unitholder, if an
individual, is a U.S. citizen or a resident alien for purposes of U.S.
income taxation, and if other than an individual, is not a foreign
corporation, foreign partnership, foreign estate or foreign trust (as
those terms are defined in the Internal Revenue Code and Income Tax
Regulations); (ii) the Unitholder's U.S. social security number (for
individuals) or employer identification number (for non-individuals) is
correctly printed in the Signature Box; and (iii) the Unitholder's home
address (for individuals), or office address (for non-individuals), is
correctly printed in the Signature Box. If a corporation, the
jurisdiction of incorporation is ____________________________. The
person signing this Letter of Transmittal understands that this
certification may be disclosed to the IRS by the Purchaser and that any
false statements contained herein could be punished by fine,
imprisonment, or both.

------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------

BOX D

SUBSTITUTE FORM W-8

(SEE INSTRUCTION 4--BOX D)

By checking this box [ ], the person signing this Letter of Transmittal
hereby certifies under penalties of perjury that the Unitholder is an
"exempt foreign person" for purposes of the backup withholding rules under
the U.S. federal income tax laws, because the Unitholder:

(i) Is a nonresident alien individual or a foreign corporation,
partnership, estate or trust;

(ii) If an individual, has not been and plans not to be present in
the U.S. for a total of 183 days or more during the calendar year; and

(iii) Neither engages, nor plans to engage, in a U.S. trade or
business that has effectively connected gains from transactions with a
broker or barter exchange.

------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. TENDER, SIGNATURE REQUIREMENTS; DELIVERY. After carefully reading and
completing this Letter of Transmittal, in order to tender Units, a Unitholder
must sign at the "X" in the Signature Box of this Letter of Transmittal and
insert the Unitholder's correct Taxpayer Identification Number or Social
Security Number ("TIN"), address, telephone number and number of Units being
tendered in the spaces provided below the signature. If this Letter of
Transmittal is signed by the registered Unitholder of the Units, a Medallion
signature guarantee on this Letter of Transmittal is required. Similarly, if
Units are tendered for the account of a member firm of a registered national
securities exchange, a member firm of the National Association of Securities
Dealers, Inc. or a commercial bank, savings bank, credit union, savings and loan
association or trust company having an office, branch or agency in the United
States (each an "Eligible Institution"), a Medallion signature guarantee is
required. In all other cases, signatures on this Letter of Transmittal must be
Medallion guaranteed by an Eligible Institution, by completing the Signature
Guarantee set forth in Box A of this Letter of Transmittal. A Medallion
Signature Guarantee is provided by your bank or brokerage house. If you obtain a
Medallion Signature Guarantee from a bank, brokerage house or trust company, a
Corporate Resolution (with a raised corporate seal) from the bank, brokerage
house or trust company must be included (stating that the Guarantor is an
authorized signatory). If any tendered Units are registered in the names of two
or more joint holders, all such holders must sign this Letter of Transmittal. If
this Letter of Transmittal is signed by trustees, administrators, guardians,
attorneys-in-fact, officers of corporations, or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing and must
submit proper evidence satisfactory to the Purchaser of their authority to so
act. For Units to be validly tendered, a properly completed and duly executed
Letter of Transmittal, together with any required signature guarantees in Box A,
and any other documents required by this Letter of Transmittal, must be received
by the depositary prior to or on the Expiration Date at its address or facsimile
number set forth on the front of this Letter of Transmittal. No alternative,
conditional or contingent tenders will be accepted. All tendering Unitholders by
execution of this Letter of Transmittal waive any right to receive any notice of
the acceptance of their tender.

2. TRANSFER TAXES. The Purchaser will pay or cause to be paid all transfer
taxes, if any, payable in respect of Units accepted for payment pursuant to the
Offer.

3. U.S. PERSONS. A Unitholder who or which is a United States citizen or
resident alien individual, a domestic corporation, a domestic partnership, a
domestic trust or a domestic estate (collectively "United States Persons"), as
those terms are defined in the Internal Revenue Code and Income Tax Regulations,
should complete the following:

BOX B--SUBSTITUTE FORM W-9. In order to avoid 31% federal income tax
backup withholding, the Unitholder must provide to the Purchaser the
Unitholder's correct Taxpayer Identification Number or Social Security
Number ("TIN") in the space provided below the signature line and certify,
under penalties of perjury, that such Unitholder is not subject to such
backup withholding. The TIN that must be provided is that of the registered
Unitholder. If a correct TIN is not provided, penalties may be imposed by
the Internal Revenue Service ("IRS"), in addition to the Unitholder being
subject to backup withholding. Certain Unitholders (including, among others,
all corporations) are not subject to backup withholding. Backup withholding
is not an additional tax. If withholding results in an overpayment of taxes,
a refund may be obtained from the IRS.

BOX C--FIRPTA AFFIDAVIT. To avoid potential withholding of tax pursuant
to Section 1445 of the Internal Revenue Code, each Unitholder who or which
is a United States Person (as defined Instruction 3 above) must certify,
under penalties of perjury, the Unitholder's TIN and address, and that the
Unitholder is not a foreign person. Tax withheld under Section 1445 of the
Internal Revenue
<PAGE>
Code is not an additional tax. If withholding results in an overpayment of
tax, a refund may be obtained from the IRS.

BOX D--FOREIGN PERSONS. In order for a Unitholder who is a foreign
person (i.e., not a United States Person as defined in 3 above) to qualify
as exempt from 31% backup withholding, such foreign Unitholder must certify,
under penalties of perjury, the statement in BOX D of this Letter of
Transmittal attesting to that foreign person's status by checking the box
preceding such statement. However, such person will be subject to
withholding of tax under Section 1445 of the Code.

4. ORIGINAL CERTIFICATE. If you have the certificate originally issued to
represent your interest in the Partnership, please send it to the depositary
with this letter of transmittal.

5. ADDITIONAL COPIES OF OFFER TO PURCHASE AND LETTER OF
TRANSMITTAL. Requests for assistance or additional copies of the Offer to
Purchase and this Letter of Transmittal may be obtained from the Purchaser by
calling (312) 474-1300.

<PAGE>
EXHIBIT 99.(a)(3) EXHIBIT (a)(3)

December 2, 1999

TO: UNITHOLDERS OF DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.

SUBJECT: OFFER TO PURCHASE UNITS FOR $5,700 PER UNIT ON AN ALL CASH BASIS

THIS IS THE HIGHEST PRICE BEING OFFERED

As described in the enclosed Offer to Purchase and related Letter of
Transmittal (collectively, the "Offer"), ERP OPERATING LIMITED PARTNERSHIP (the
"Purchaser") is offering to purchase up to 820 units of limited partnership
interest (the "Units") in DAVIDSON DIVERSIFIED REAL ESTATE II, L.P., a Delaware
limited partnership (the "Partnership") at a purchase price equal to:

$5,700 per Unit--$443.95 ABOVE the offer you recently received
from an affiliate of the general partner of the Partnership

The Purchaser is in the business of acquiring, owning and operating
multi-family properties. It currently controls 1,073 multi-family properties in
35 states, consisting of 228,501 units.

The Offer provides Unitholders with an opportunity to liquidate all, or a
portion of, their investment in DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.

A TENDERING UNITHOLDER WILL NOT BE REQUIRED TO PAY ANY EXPENSES, EXCEPT ANY
PERSONAL INCOME TAX ON THE SALE OF THE TENDERED UNITS, IF ANY, IN CONNECTION
WITH THE TENDERING OF ITS UNITS TO THE PURCHASER. THE PURCHASER WILL PAY ANY AND
ALL OTHER FEES, COMMISSIONS, CHARGES AND EXPENSES INCURRED IN CONNECTION WITH
THE OFFER.

Please consider the following additional points in evaluating the Offer:

- ALL CASH CONSIDERATION. The Purchaser is offering to purchase 820 Units
of the Partnership on an all cash basis, while AIMCO Properties, L.P. in
a competing tender offer (the "Competing Tender Offer") is offering to
purchase for cash up to $50,000,000 of units from 49 limited partnerships
involved in the class and derivative action litigation entitled ROSALIE
NUANES, ET AL. V. INSIGNIA FINANCIAL GROUP, ET AL. (the "Litigation"),
which was brought on behalf of limited partners in partnerships,
including yours. In the Competing Tender Offer, the affiliate of the
General Partner has agreed to pay the legal fees, costs and expenses of
counsel for the plaintiffs to the Litigation. If you accept this Offer,
you may be required to pay these amounts in connection with the
Litigation. The Competing Tender Offer consists of: (i) an initial tender
offer for all of the units not owned by the General Partner or its
affiliates in each partnership; and (ii) a second tender offer made
within 18 months of the first tender offer for those non-affiliate owned
units not previously tendered (the "Second Tender Offer"). The total
amount being offered for units in all such limited partnerships is
approximately $480,000,000. If more than $50,000,000 of units in all such
limited partnerships are tendered in the aggregate, Apartment Investment
and Management Company may offer you its stock for all amounts of
tendered units in excess of $50,000,000, subject to the terms and
conditions contained in the Competing Tender Offer. Therefore, if you
tender your Units to AIMCO Properties, L.P., a possibility exists that
only a portion of your purchase consideration will be in cash. THE
PURCHASER'S OFFER PROVIDES YOU WITH BOTH THE HIGHEST PURCHASE PRICE FOR
YOUR UNITS AND ALL CASH CONSIDERATION.

- FAST, COMMISSION-FREE SALE. The Offer provides a Unitholder with the
opportunity to sell its Units without the commission costs (generally, up
to 10% of the sales price, subject to a $150-$200 minimum commission per
trade) paid by the seller in typical secondary market sales. With
secondary market matching services, the process to sell the Units will
not even begin until
<PAGE>
an interested buyer can be found, which cannot be assured and can take
days, weeks or even months.

- ELIMINATION OF RETIREMENT ACCOUNT FEES. If a Unitholder sells its Units,
1999 could be the final year in which it would incur fees for its IRA or
retirement account, unless the Offer is extended. Many custodians will
not allow the transfer of limited partnership units into new retirement
accounts. While many investors have consolidated their retirement
accounts and taken advantage of custodial services offered through
discount brokerage firms, they may have had to maintain separate
retirement accounts for limited partnership units because of custodial
restrictions on the transfer of such units. Once the Offer Price is sent
directly to a Unitholder's retirement account, it is free to consolidate
its retirement accounts or transfer the funds to a custodian that offers
lower fees.

- ELIMINATION OF K-1 TAX FILINGS. If a Unitholder sells its Units now,
1999 will be the final year for which it receives a K-1 tax form from the
Partnership, unless the Offer is extended. Many investors who have tax
professionals prepare their taxes find the cost of filing K-1s to be
burdensome, particularly if more than one limited partnership is owned.

- ILLIQUID UNITS. The relative illiquidity of the Units resulting from the
absence of a formal trading market means the Units are difficult to sell.

On November 15, 1999, AIMCO Properties, L.P. commenced a tender offer for up
to 1,035 Units for $5,256.05 per Unit. THE WITHDRAWAL PERIOD FOR THE AIMCO
PROPERTIES, L.P. OFFER EXTENDS TO ITS EXPIRATION DATE, WHICH IS CURRENTLY SET
FOR DECEMBER 30, 1999 BUT WHICH MAY BE EXTENDED. IF YOU TENDERED YOUR UNITS IN
THE AIMCO PROPERTIES, L.P. TENDER OFFER, YOU MAY STILL TENDER YOUR UNITS TO THE
PURCHASER BY COMPLETING THE ENCLOSED LETTER OF TRANSMITTAL AND COMPLETING THE
ENCLOSED NOTICE OF WITHDRAWAL AND DELIVERING IT TO THE INFORMATION AGENT FOR
AIMCO PROPERTIES, L.P.'S OFFER (WITH A COPY TO OUR DEPOSITARY) BEFORE THE
EXPIRATION DATE OF SUCH OFFER, DECEMBER 30, 1999, UNLESS EXTENDED.

After carefully reading the enclosed Offer, if you elect to tender your
Units, mail (using the enclosed pre-addressed, postage paid envelope) or
telecopy a duly completed and executed copy of the Letter of Transmittal (the
yellow form) and any other documents required by the Letter of Transmittal, to
the Depositary at:

<TABLE>
<S> <C>
By Hand or Overnight Courier: By Mail:

MMS Escrow and Transfer Agency, Inc. MMS Escrow and Transfer Agency, Inc.
1845 Maxwell St., Suite 101 P.O. Box 7090
Troy, MI 48084 Troy, MI 48007-7090
</TABLE>

By Facsimile: (248) 614-4536

If you have any questions or need assistance, please call the Depositary at
(888) 292-4264.

This Offer expires (unless extended) December 30, 1999

<PAGE>
Exhibit 99.(a)(4) Exhibit (a)(4)

INSTRUCTIONS FOR WITHDRAWAL
OF
PREVIOUSLY TENDERED UNITS OF LIMITED PARTNERSHIP INTEREST
IN
DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.

PLEASE NOTE THAT YOU MAY ONLY WITHDRAW UNITS TENDERED IN AN OUTSTANDING OFFER.
ANY UNITS TENDERED IN PRIOR OFFERS AND PAID FOR MAY NOT BE WITHDRAWN.

1. DELIVERY OF NOTICE OF WITHDRAWAL. If you are withdrawing Units previously
tendered pursuant to the offer to purchase, dated November 15, 1999 (the
"Offer to Purchase") by AIMCO Properties, L.P. (the "Purchaser") please
complete, execute, detach and send the attached "Notice of Withdrawal of
Previously Tendered Units" of DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.
("Notice of Withdrawal"), to:

<TABLE>
<S> <C>
By Hand or Overnight Courier: By Mail:
River Oaks Partnership River Oaks Partnership Services, Inc.
Services, Inc. P.O. Box 2065
111 Commerce Road S. Hackensack, NJ 07606-2065
Carlstadt, NJ 07072
Attn: Reorganization Dept.
By Facsimile: (201) 896-0910
Telephone: (888) 349-2005
</TABLE>

The Purchaser must receive the Notice of Withdrawal prior to December 30,
1999, the Expiration Date set forth in the Offer to Purchase, unless
extended. Receipt of the facsimile transmission of the Notice of Withdrawal
should be confirmed by telephone at the number set forth above. COPIES OF
ALL NOTICE OF WITHDRAWALS SHOULD ALSO BE SENT OR TRANSMITTED TO MMS ESCROW
AND TRANSFER AGENCY, INC. AT P.O. BOX 7090, TROY, MI 48007-7090 (IF BY
MAIL), 1845 MAXWELL ST., SUITE 101, TROY, MI 48084 (IF BY HAND OR OVERNIGHT
COURIER) OR FAXED TO (248) 614-4536.

2. INADEQUATE SPACE. If any space provided in the Notice of Withdrawal is
inadequate, all such additional information should be listed on a separate
schedule and attached as part of the Notice of Withdrawal.

3. SIGNATURE ON NOTICE OF WITHDRAWAL. The Notice of Withdrawal must be signed,
as applicable, by the person(s) who signed the Letter of Transmittal
relating to the Offer to Purchase, in the same manner as such Letter of
Transmittal was signed. The signatures must correspond exactly with the
name(s) as they appear on the Partnership records. If any Units tendered
pursuant to the Offer to Purchase are registered in the names of two or more
joint holders, all such holders must sign, as applicable, the Notice of
Withdrawal. If the Notice of Withdrawal is signed by any trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or
others acting in a fiduciary capacity, such persons should so indicate when
signing and must submit proper evidence of their authority to act.

4. GUARANTEE OF SIGNATURES. IN ORDER FOR A WITHDRAWAL TO BE EFFECTIVE, THE
NOTICE OF WITHDRAWAL MUST BE MEDALLION GUARANTEED AS PROVIDED IN THE LETTER
OF TRANSMITTAL.
<PAGE>
NOTICE OF WITHDRAWAL
OF
PREVIOUSLY TENDERED
UNITS OF LIMITED INTEREST
OF
DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.

<TABLE>
<S> <C>
TO: River Oaks Partnership Services, Inc.
111 Commerce Road P.O. Box 2065
Carlstadt, NJ 07072 S. Hackensack, NJ 07606-2065
Attn: Reorganization Dept.
Facsimile: (201) 896-0910
</TABLE>

Ladies and Gentlemen:

The following units of limited partnership interest (the "Units") of
Davidson Diversified Real Estate II, L.P. (the "Partnership") previously
tendered to AIMCO Properties, L.P. (the "Purchaser") are hereby withdrawn and
the release contained therein with respect to the litigation entitled ROSALIE
NUANES, ET AL. V. INSIGNIA FINANCIAL GROUP, ET AL. shall be of no further force
and effect. Unless otherwise indicated under the Section "Number of Units
Withdrawn," all Units tendered to the Purchaser are hereby withdrawn. Failure to
complete such Section shall be deemed to indicate the intent of the undersigned
that all Units tendered to the Purchaser be withdrawn.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

DESCRIPTION OF UNIT(S) WITHDRAWN
AND
SIGNATURE OF LIMITED PARTNERS

All registered holders of limited partnership units must sign exactly as name(s)
appear(s) on the Partnership records. See Instruction 3.

NUMBER OF UNITS WITHDRAWN: ___________________ (If all Units, leave blank)

X ________________________________ X ________________________________
(Signature of Owner) (Signature of Joint Owner)

Name and Capacity (if other than individuals): _________________________________
Title: _________________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
(City) (State) (Zip)

Area Code and Telephone No. (Day): _____________________________________________
(Evening): ___________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SIGNATURE GUARANTEE (IF REQUIRED)
(SEE INSTRUCTION 4)

Name and Address of Eligible Institution: ______________________________________
________________________________________________________________________________
________________________________________________________________________________
Authorized Signature: X ________________________________________________________
Name: __________________________________________________________________________
Title: _______________________________________ Date: ________________________