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DAMSON/BIRTCHER REALTY INCOME FUND - II
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BIRTCHER/LIQUIDITY PROPERTIES
915 Broadway, Fifth Floor
New York, New York 10010
February 8, 1997
Dear Limited Partner:
Birtcher/Liquidity Properties (the "General Partner") has become aware
that an entity named Madison Partnership Liquidity Investors XVI, LLC ("Madison
LLC") has recently sent an unsolicited tender offer to the limited partners of
Damson/Birtcher Realty Income Fund-II (the "Partnership") to purchase up to
4.9% of the Partnership's outstanding limited partnership interests for
approximately $305 per $1,000 of original subscription amount (the "Offer").
The General Partner believes that each limited partner should consider
each of the factors listed below in making a decision whether to tender to
Madison LLC. The factors that the General Partner believes to be significant
are:
o The Offer was not discussed with, and is not sponsored or
endorsed by, the General Partner. Madison LLC did not afford
the General Partner an opportunity to negotiate on behalf of
the limited partners. In fact, the General Partner does not
know who owns or controls Madison LLC or how it obtained your
name, address and ownership interest in the Partnership. The
General Partner believes that Madison LLC is affiliated with a
limited partner of the Partnership that recently purchased an
interest in the Partnership.
o The Offer price of approximately $305 per $1,000 of original
investment is below the price of recent bid prices and trade
prices on the secondary market for limited partnership
interests. Limited partners seeking immediate cash for their
interests should check the secondary market prior to making
any decision to tender. Please keep in mind that the
secondary market itself is an inefficient market that the
General Partner does not believe has generally reflected the
true value of Partnership interests. Please also keep in mind
that the secondary market may not be able to accommodate
substantial sales of limited
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Limited Partner
February 8, 1997
Page 2
partnership interests over a short period of time at current
prevailing prices.
o On January 29, 1997, the Partnership filed with the Securities
and Exchange Commission ("SEC") a preliminary Information
Statement pursuant to which it will seek the consent of the
limited partners to dissolve the Partnership and liquidate its
remaining properties. Pending the SEC's review, you will be
receiving your Information Statement in the next few weeks.
If the limited partners consent to the dissolution, the
General Partner would be authorized and directed to settle and
close the Partnership's business in an orderly fashion and
dispose of and convey to one or more buyers the Partnership's
property as soon as practicable, consistent with obtaining
reasonable value for the properties.
o Among other things, the Information Statement sets forth the
General Partner's estimate that the Partnership's remaining
properties could be sold for an aggregate price ranging from
approximately $25 million to $30 million. If the properties
are sold for an aggregate price within this range, the limited
partners would receive aggregate sale proceeds of between $450
to $540 per $1,000 invested in the Partnership. The Madison
LLC Offer is for $305 per $1,000 invested in the Partnership.
o The General Partner's estimates are based upon a variety of
assumptions that are subject to significant uncertainties and
contingencies. Such estimates are inherently imprecise and
there can be no assurance they can be realized.
o The timing of property sales and distributions of sale
proceeds are and will be determined solely by the General
Partner. There is no current agreement or understanding to
sell or dispose of any property, and there can be no assurance
as to when any or all of the remaining Partnership properties
can be sold or disposed of or when any sales proceeds will
actually be distributed. Accordingly, limited partners who do
not accept the
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Limited Partner
February 8, 1997
Page 3
Offer may not receive any distribution of sale proceeds for a
significant period of time following the Offer.
o The General Partner's estimates of sales proceeds do not take
into account Partnership operating expense or net income or
net loss of the Partnership for any period prior to the time
the remaining properties are sold, which could affect the
amount of sales proceeds available for distribution.
Therefore, the actual proceeds to be received by the limited
partners may vary materially from the estimates, and therefore
possibly be substantially less. The General Partner's
estimates do not take into account future distributions from
operations of the Partnership's properties, if any.
In light of the factors discussed above, and because each limited
partner's need for short-term liquidity may vary significantly, the General
Partner expresses no opinion and is remaining neutral with respect to the
financial terms contained in the Offer.
If you have any questions about the Offer that you want to address to
the General Partner, please call The Herman Group at 800-657-8814.
Very truly yours,
BIRTCHER/LIQUIDITY PROPERTIES
