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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities Exchange Act of 1934
BRAUVIN REAL ESTATE FUND L.P. 5
(Name of Subject Company)
Brauvin Real Estate Fund L.P. 5
(Names of Person(s) Filing Statement)
Limited Partnership Interests
(Title of Class of Securities)
Not Applicable
(CUSIP Number of Class of Securities)
Thomas E. Murphy, Treasurer and
Chief Financial Officer
Brauvin Ventures, Inc.
30 North LaSalle Street, Suite 3100
Chicago, Illinois 60602
(312) 759-7666
(Name, address and telephone number of
person authorized to receive notices
and communications on behalf of the
person(s) filing statement)
With a copy to:
Beth M. Gottlieb, Esq.
Holleb & Coff
55 East Monroe, Suite 4100
Chicago, Illinois 60603
(312) 807-4692
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Item 1. Security and Subject Company
The name of the subject company is Brauvin Real Estate
Fund L.P. 5, a Delaware limited partnership (the
"Partnership"). Jerome J. Brault and Brauvin Ventures,
Inc., an Illinois corporation, are the general partners of
the Partnership (the "General Partners"). The principal
executive offices of the Partnership and the General
Partners are located at 30 North LaSalle Street, Suite 3100,
Chicago, Illinois 60602. The title of the class of equity
securities to which this statement relates is the units of
limited partnership interest of the Partnership (the
"Units").
Item 2. Tender Offer of the Bidder
This Statement relates to a tender offer by MacKenzie
Patterson Special Fund, L.P., MacKenzie Patterson Special
Fund 3, LLC, MacKenzie Patterson Special Fund 4, LLC,
Accelerated High Yield Institutional Investors, Ltd.,
Accelerated High Yield Growth Fund II, Ltd., Moraga-Dewaay
Fund, LLC, Previously Owned Mortgage Partnerships Income
Fund, L.P., MP Value Fund 4, L.P. and Steven Gold
(collectively, the "Bidder" or the "Purchaser") disclosed in
a Tender Offer Statement on Schedule 14D-1 (the "Schedule
14D-1"), dated May 12, 1999 to purchase up to 2,470 Units at
a purchase price equal to $170 per Unit, less the amount of
any distributions declared or made with respect to the Units
between May 12, 1999 and June 25, 1999 or such other date to
which this Offer (as hereinafter defined) may be extended
upon the terms and subject to the conditions set forth in
the Offer to Purchase dated May 12, 1999 and the related
Letter of Transmittal (the "Offer to Purchase" or the
"Offer").
Based on the information in the Schedule 14D-1, the
business address of the person authorized to receive notices
and communications on behalf of the Purchaser is Christine
Simpson, MacKenzie Patterson, Inc., 1640 School Street,
Moraga, California 94556.
Item 3. Identity and Background
(a) The name and address of the Partnership, which is
the person filing this Statement, is set forth in Item 1
above.
(b) There is no material contract, agreement,
arrangement or understanding or any material actual or
potential conflict of interest between: (i) the Partnership
and the General Partners; (ii) the Partnership and the
Purchaser; or (iii) the General Partners and the Purchaser.
The General Partners are entitled to receive distributions
of the Partnership's operating cash flow and net sale or
refinancing proceeds, which amounts are subordinated to
certain preferential returns due the limited partners of the
Partnership (the "Limited Partners"), as outlined in the
Partnership's Amended and Restated Limited Partnership
Agreement, as amended to date (the "Agreement"). In
addition, an affiliate of the General Partners is
compensated for providing property management services to
the Partnership. The Partnership paid this affiliate of the
General Partners approximately $100,000 for the year ended
December 31, 1998 and approximately $26,000 for the three
months ended March 31, 1999, for such services, pursuant to
the terms of the Agreement. In addition, should the General
Partners or their affiliates provide services to the
Partnership in connection with the sale or refinancing of
one of the Partnership's real properties, they will be
entitled to a fee for such services; however, it will be
subordinated to certain preferential distributions due to
the Limited Partners, as set forth in the Agreement.
Item 4. The Solicitation or Recommendation
(a) Recommendation of the General Partners. The
Partnership is not expressing an opinion and is remaining
neutral towards the Offer to Purchase.
(b) Background; Reasons for Recommendation. In
deciding to remain neutral on the Offer to Purchase, the
General Partners considered the fact that the Partnership
engaged Landauer Associates, Inc. ("Landauer"), an entity
unaffiliated with the Partnership and the General Partners,
to undertake a due diligence and market pricing analysis of
the Partnership's real properties--Crown Point Shopping
Center, a 42% joint venture interest in Strawberry Fields
Shopping Center and a 53% joint venture interest in Sabal
Palm Square. The General Partners recently received the
valuation information from Landauer. By taking the
appraised value of the assets, and the cash and cash
equivalents held by the Partnership, as of December 31,
1998, and then deducting the mortgage balances, the
anticipated selling costs, the Partnership's other
liabilities and the estimated wind-up costs of the
Partnership, the Partnership determined that the net
liquidation value per Unit as of such date was approximately
$329.35. This value per Unit is an estimate and the
ultimate amount actually received by the Limited Partners
will be affected by items including, but not limited to, the
timing of the liquidation of the assets, changes in market
conditions, necessary reserves of the Partnership and the
sale prices that can be negotiated. This estimated amount
does not include any prior distributions or returns of
capital to the Limited Partners.
The Partnership recently filed preliminary solicitation
materials with the Securities and Exchange Commission
outlining a strategy, developed with Landauer, on how to
best realize the underlying value of the Partnership's
assets. At such time as the regulatory agencies have
completed their review of these materials, the Partnership
will seek the Limited Partners' vote to allow the
Partnership to undertake a program to sell the Partnership's
properties and distribute the net proceeds to the Limited
Partners.
In reviewing the Offer to Purchase, the General
Partners were unable to determine how the Bidder will deal
with the provision of the Agreement prohibiting a Limited
Partner to transfer less than five Units or make any
transfer of his Units if after such transfer he owns less
than five Units, as the Offer to Purchase is silent on this
matter. However, should a Limited Partner desire liquidity
at this time, the Offer to Purchase gives the Limited
Partner such an opportunity.
Item 5. Persons Retained, Employed or to Be Compensated
None.
Item 6. Recent Transactions and Intent with Respect to
Securities
(a) None.
(b) Not applicable.
Item 7. Certain Negotiations and Transactions by the Subject
Company
(a) The Partnership has not engaged in any
negotiation in response to the Offer to Purchase which
relates to or would result in: (i) an extraordinary
transaction, such as a merger or reorganization, involving
the Partnership; (ii) a purchase, sale or transfer of a
material amount of assets by the Partnership; (iii) a tender
offer for or other acquisition of securities by or of the
Partnership; or (iv) any material change in the present
capitalization or dividend policy of the Partnership.
As described in Item 4 of this Statement, the
Partnership has developed a strategy on how best to realize
the Partnership's assets' underlying value. Until the
regulatory agencies have completed their review of the
preliminary solicitation materials, the Partnership will
remain neutral towards the Offer.
(b) There are no transactions, resolutions,
agreements in principle or signed contracts in response to
the Offer to Purchase that relate to or would result in one
or more of the events referred to in Item 7(a).
Item 8. Additional Information to Be Furnished
None.
Item 9. Materials to Be Filed as Exhibits
(a)(1) Letter to Limited Partners.
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
June 7, 1999
BRAUVIN REAL ESTATE FUND L.P. 5
By: Brauvin Ventures, Inc.,
Corporate General Partner
By: /s/ Jerome J. Brault
Jerome J. Brault,
President
By: /s/ Jerome J. Brault
Jerome J. Brault,
General Partner
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Exhibit (a)(1)
June 7, 1999
Dear Limited Partner, Brauvin Real Estate Fund L. P. 5:
The General Partners are pleased to submit the Annual Report
for Brauvin Real Estate Fund L.P. 5 which summarizes the
activities of the Partnership for the year ended December
31, 1998.
In addition, on May 12, 1999, the General Partners received
an unsolicited tender offer to purchase up to 25% of the
outstanding Limited Partnership Units of the Partnership for
$170.00 per Unit. The offer is being made in part by a
group that currently owns approximately 7.4% of limited
economic interest in the Partnership. You have recently
received information regarding this offer.
At this time, the General Partners have not made a decision
as to the particular merits or risks to you, as a Limited
Partner, associated with the tender offer.
Please be advised, however, that as part of the General
Partners' exploration of liquidation alternatives of the
Partnership, an appraisal firm engaged by the Partnership,
Landauer Associates, Inc. ("Landauer") completed appraisals
of each of the Partnership's properties. Additionally, the
Partnership engaged Landauer to assist it in determining the
appropriate method and timing for the disposition of the
Partnership's properties. Based primarily on the
independent appraisals of the assets, the estimated net
liquidation value of each Limited Partnership Unit as of
December 31, 1998 is approximately $329.35 per Unit. This
estimate was calculated by adding the appraised value of the
assets, cash and cash equivalents held by the Partnership,
and then deducting the current mortgage balances, the
anticipated selling costs, the other liabilities and the
estimated wind up costs of the Partnership. We would like
to caution that this value per Unit is an estimate, and the
ultimate amount that you will receive will be affected by
items including, but not limited to, the timing of
liquidation of the assets, changes in market conditions,
necessary Partnership reserves and the sale prices that can
be negotiated. The value, therefore, could be more or less
than that currently estimated. Please note that this
estimated amount does not include any prior distributions or
returns of capital.
Further, the Partnership recently filed preliminary
solicitation materials with the Securities and Exchange
Commission outlining a strategy, developed with Landauer, on
how to best realize the underlying value of the
Partnership's assets. At such time as the regulatory
agencies have completed their review of these materials, the
Partnership will seek your vote to allow the Partnership to
undertake a program to sell the Partnership's properties and
distribute the net proceeds to you, as a Limited Partner.
We will keep you advised of our progress.
You will have to make the determination as to whether to
wait to received the solicitation materials to understand
the Partnership's plan for the ultimate liquidation of the
properties, or sell your interest now at the tender offer
price. We do recommend, however, that if you choose to sell
your interest prior to liquidation, you consider other
options for sale, including the informal secondary market
for the Units. If you would like further details regarding
the informal secondary market, please consult with your
broker or registered representative. Nonetheless, if you
are primarily interested in liquidating your Units
immediately, the tender offer gives you this opportunity.
Additionally, there can be no assurance that a better offer
for the purchase of your Units may be available now or in
the future. Please be advised that by accepting this or any
other potential tender offer, you will no longer have
ownership interest in the Partnership's assets; thus, you
will not share in any potential change in their value. If
you choose to pursue the tender offer, payment will come
directly from the outside group of investors.
As always, if you have any questions regarding your
investment, please do not hesitate to contact us.
Sincerely,
/s/ Jerome J. Brault
Jerome J. Brault
Managing General Partner
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