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AMERICAN INDUSTRIAL PROPERTIES
REIT
6220 NORTH BELTLINE, SUITE 205
IRVING, TEXAS 75063
(214) 550-6053
March { }, 1994
SPECIAL MEETING-April 26, 1994
Dear Fellow Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders
of American Industrial Properties REIT (the "Trust") to be held on Tuesday,
April 26, 1994, at 9:00 a.m. Central Daylight Time, at the Four Seasons Hotel,
Irving, Texas. Your Trust Managers look forward to personally greeting those
Shareholders who are able to attend.
At this important meeting of the Trust, as set forth in the
accompanying Notice of Special Meeting of Shareholders and Proxy
Statement/Prospectus, Shareholders will be asked to approve a proposal to merge
the Trust with and into its wholly-owned subsidiary for the purpose of
reorganizing the Trust into a Maryland corporation.
As discussed in detail in the Proxy Statement/Prospectus, your Trust
Managers are recommending approval of the proposal.
Pursuant to the Merger Agreement, each Shareholder will receive one
share of common stock in the Company for every five shares held in the Trust.
As discussed in detail in the Proxy Statement/Prospectus, your Trust
Managers believe that the proposed action of reorganizing the Trust as a
Maryland corporation will result in an improved capital and organizational
structure with which to raise new investment capital, greater protection for
Shareholders from personal liability for the Trust's debt obligations and
relief from certain operating restrictions peculiar to the Texas REIT Act under
which the Trust is currently organized. Accordingly, we strongly recommend that
you vote FOR the proposal.
As also discussed in the enclosed Proxy Statement/Prospectus,
reorganizing the Trust as a Maryland Corporation may have certain adverse
effects on Shareholders in that Shareholders may be subject to dilution in the
event that the Company issues additional securities. In addition, the Board of
Directors of the Company will have an increased ability to change the
investment, financing, borrowing and other policies of the Company without
Stockholder approval.
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If the proposal is approved, it is anticipated that the Company's
shares will continue to trade on the New York Stock Exchange under the symbol
IND. The Company is expected to continue to qualify as a real estate investment
trust for federal income tax purposes.
YOUR VOTE IS IMPORTANT!
Adoption of the proposal to reorganize the Trust as a Maryland
corporation requires the affirmative vote of holders of 66 2/3% of the Trust's
outstanding shares. The sole stockholder of the Company, which is the Trust,
acting through the Trust Managers, and the Board of Directors of the Company
have unanimously approved the merger. Because of the high voting requirement
(mandated by the Trust's governing documents), your vote is extremely
important! Accordingly, no matter how many shares you own, please sign, date
and mail your enclosed proxy card promptly, using the postage-paid envelope
provided. Your cooperation is appreciated and will save the Trust the
considerable expense of repeated mailings.
If you have any questions or need assistance with your proxy, please
feel free to call us at our toll-free number (800) 550-6053.
On behalf of your Trust Managers, we thank you for your cooperation
and continued support.
Very truly yours,
Charles W. Wolcott
President and CEO
YOUR VOTE IS IMPORTANT! WHETHER YOU PLAN TO ATTEND THE MEETING OR NOT, PLEASE
SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED PROXY. YOU ARE STRONGLY URGED TO
CAREFULLY READ THE ENCLOSED PROXY STATEMENT/PROSPECTUS PRIOR TO VOTING.
