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AMERICAN INDUSTRIAL PROPERTIES REIT
April 28, 1994
Dear Fellow Shareholder:
As we discussed in our last letter, we have been diligently pursuing
financing to recapitalize the Trust for future growth and to maximize the value
of your investment. Our efforts have resulted in what the Trust Managers believe
is an important and positive step toward this recapitalization.
KIDDER AGREES TO ARRANGE FINANCING
We are pleased to announce that on April 21, 1994, the Trust entered into
an agreement with Kidder Peabody Mortgage Capital Corporation ("Kidder") in
connection with arranging a financing of up to $30,000,000 secured by first
mortgage liens on the Trust's properties.1 The financing will have a maturity of
between five to seven years at an interest rate expected to be approximately
10%, subject to market conditions. Kidder will have the exclusive right to
arrange financing for the Trust's properties for a six-month period. We believe
this financing, if arranged, would allow the Trust to accomplish several
important objectives:
- The financing would allow the Trust to complete the defeasance of the
remaining Zero Coupon Notes (which carry a rate of 12.7%) which would
release the Trust from the many operating and financing impediments
caused by the Zeros.
- Based on current interest rates, it would allow the Trust to refinance
some of the existing first lien mortgages at lower interest costs to the
Trust.
- The financing would enable the Trust to invest in additional industrial
distribution properties which, based on current interest rates and
available opportunities, we believe could be acquired for attractive
investment returns.
We are very pleased to have reached this financing agreement with Kidder.
Over the past several years, Kidder has successfully provided growth capital to
many participants in the real estate investment trust industry. We believe this
agreement is supportive of our recapitalization strategy which is critical to
the Trust's growth and to the future reinstatement of quarterly distributions to
shareholders.
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1This financing is conditioned upon, among other things, credit
underwriting and due diligence and subject to the receipt of necessary consents
and waivers from other lenders.
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DON'T BE MISLED BY KOETHER AND HOLDINGS
Koether and American Holdings have asserted that liquidation or an
"auction" of the Trust assets is in your best interests. We don't agree. We
believe that many real estate markets are in the early stages of recovery and
that the Trust's commitment to a strategy of recapitalization and growth is the
best course of action to maximize the value of your investment.
Our program has been carefully designed to allow the Trust and its
shareholders an opportunity to participate in the growth taking place in the
real estate investment trust industry. We urge you to support your Trust's
future by voting FOR the proposed merger.
CAUTION!
Many of you may have received a mailing from American Holdings requesting
that you re-execute a BLUE PROXY CARD. If you want to vote FOR management's
proposal, do not vote a BLUE PROXY CARD! If you have voted a BLUE PROXY CARD and
wish to vote with our plan, rather than for Koether's agenda, please execute and
return the enclosed WHITE PROXY CARD today. REMEMBER, ONLY YOUR LATEST DATED
PROXY CARD COUNTS!
On behalf of your Trust Managers,
/s/ CHARLES W. WOLCOTT
Charles W. Wolcott
President and CEO
IMPORTANT
1. Be sure to vote only on the WHITE PROXY CARD. WE URGE YOU NOT TO SIGN ANY
BLUE PROXY CARDS YOU RECEIVE FROM AMERICAN HOLDINGS OR ITS ASSOCIATES.
2. If your shares are held in "street name," only your broker or banker can vote
your shares and only upon receipt of your specific instructions. Please
return the WHITE PROXY CARD in the envelope provided or contact the person
responsible for your account and instruct that individual to vote a WHITE
PROXY CARD on your behalf today.
3. If you have executed American Holdings' blue proxy card, you have every right
to change your vote by signing, dating and returning the enclosed WHITE PROXY
CARD. Any proxy may be revoked by a later-dated proxy. Only your latest-dated
proxy will count at the Special Meeting of Shareholders.
4. If you have any questions or need assistance in voting your shares, please
feel free to contact me, Charles Wolcott, at our toll-free number,
1-800-550-6053, or contact D.F. King & Co. Inc. at 1-800-669-5550.
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AMERICAN INDUSTRIAL PROPERTIES REIT
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST MANAGERS OF
AMERICAN INDUSTRIAL PROPERTIES REIT
SPECIAL MEETING MAY 10, 1994
The undersigned hereby appoints W. H. Bricker and Charles W. Wolcott, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes either of them to represent and to vote all of the
undersigned's Shares of Beneficial Interest in the Trust, held of record on
March 4, 1994, at the Special Meeting of Shareholders to be held on May 10,
1994 or at any postponements or adjournments thereof, on the proposals below,
as directed.
(1) THE ADOPTION AND APPROVAL OF THE MERGER AGREEMENT AND THE MERGER
THEREUNDER OF AMERICAN INDUSTRIAL PROPERTIES REIT (THE "TRUST")
WITH AND INTO A MARYLAND CORPORATION WHICH IS A WHOLLY-OWNED
SUBSIDIARY OF THE TRUST.
/ / FOR: / / AGAINST: / / ABSTAIN:
(2) IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE SPECIAL MEETING OR ANY POSTPONEMENTS OR ADJOURNMENTS
THEREOF.
/ / FOR: / / AGAINST: / / ABSTAIN:
This Proxy, when properly executed, will be voted in the manner described
above. If no direction is made, this Proxy will be voted FOR the first proposal
and at the discretion of the Proxies with respect to the second proposal.
Please sign exactly as your name appears on your Share certificate. When Shares
are held in more than one name, all parties should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by an authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
_________________________ ______
Signature of Shareholder Date
_________________________ ______
Signature if Shares held Date
in more than one name
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE.
