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Exhibit 1
Aetna Real Estate Associates, L.P.
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P.O. Box 7090
Troy, MI 48007-7090
July 18, 2000
Dear Unitholder:
By now you should have received materials describing the tender offer by Oak
Investors, LLC ("Oak") to purchase up to 1,000,000 limited partnership
depositary units ("Units"), or 7.9% of the total Units outstanding of Aetna
Real Estate Associates, L.P. (the "Partnership"), at a price of $8.00 per Unit
(the "Offer"). Under Oak's Offer, your total proceeds will be reduced by any
cash distributions paid by the Partnership after June 1, 2000. Therefore, if
you accept the Offer, you will not receive the special distribution that will
be paid to investors in the near future resulting from the recent sale of one
of the three buildings at Westgate Distribution Center ("Westgate") in the
approximate amount of $.38 per Unit. Please note that there is no affiliation
between the Partnership and Oak, and the Offer was not solicited by the
Partnership or its management.
Why does Oak want to purchase your Units? The answer is simple. They want to
profit from the ownership of your Units.
The reasons that would allow them to profit from the ownership of your Units
are straightforward. As discussed below, Oak is attempting to acquire your
Units at a significant discount and expects to make substantial profits from
the future sale of the Partnership's remaining seven properties, as well as
potential cash distributions from operations.
AFTER CAREFULLY REVIEWING THE OAK OFFER, WE FIRMLY BELIEVE THAT THE OFFER IS
INADEQUATE AND DOES NOT REFLECT THE UNDERLYING VALUE OF YOUR UNITS. THEREFORE,
IT IS NOT IN YOUR BEST INTEREST TO ACCEPT THE OFFER. WE RECOMMEND THAT YOU
REJECT THE OAK OFFER AND NOT SIGN THE ASSIGNMENT FORM SENT TO YOU.
In evaluating the Offer, you should consider, among other things, the following
factors:
. Marketing and Sale of the Partnership's Properties. As discussed in the
Partnership's investor correspondence, the General Partners have commenced a
plan to market the Partnership's remaining properties. To date, seven of the
Partnership's 14 properties and a building from another property have been
sold. Five properties were sold during 1999, and Unitholders received two
special distributions totaling $3.14 per Unit. In addition, two other
properties, Windmont Apartments ("Windmont") and Lincoln Square Apartments
("Lincoln"), and one of the three buildings at the Westgate property have
been sold since the beginning of this year. The properties were sold for net
sales proceeds of approximately $32.8 million. Unitholders received a
special cash distribution of $2.10 per Unit in April 2000 as a result of the
sales of the Windmont and Lincoln properties. In addition, a special cash
distribution in the approximate amount of $.38 per Unit will be paid to
Unitholders in the near future due to the sale of the Westgate building.
Unitholders who sell their Units to Oak will not receive this distribution.
With respect to the Partnership's remaining seven properties, the General
Partners are negotiating the sales of two properties and have begun the
process of marketing two additional properties.
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. The Right to Any Future Cash Distributions Will be Lost. To date,
Unitholders who have owned their Units since the inception of the
Partnership have received total cash distributions of approximately $18.20
per original $20 Unit. Unitholders who sell their Units to Oak will lose
their right to future distributions from cash flow, as well as distributions
from any future sales of the properties, including the cash distribution of
approximately $.38 per Unit that will be paid in the near future as a result
of the sale of the Westgate building.
. Estimated Value of the Partnership's Units is Greater than the Offer. The
price of $8.00 per Unit being offered by Oak pursuant to the Offer is
approximately 49% of the Partnership's net asset value ("NAV") of $16.41 per
Unit as of March 31, 2000. The Partnership's estimate of NAV was based upon
the independently appraised values of the properties, adjusted for the
Partnership's remaining assets and liabilities as of March 31, 2000. It
should be noted that the NAV is only an estimate of value and the actual
amount realizable upon sale may be different.
. Oak is Making the Offer with a View of Making a Profit. There is a conflict
of interest between the desire of Oak to purchase the Units at a low price
and Unitholders' desire to sell their Units at a high price.
Because the personal, tax and financial position of each Unitholder is
different, we advise that you consult with your tax and other advisors before
making a decision as to whether to accept or reject the Offer.
IN SUMMARY, WE DO NOT BELIEVE THAT THE OAK OFFER IS IN YOUR BEST INTEREST. WE
RECOMMEND THAT YOU DO NOT TENDER ANY UNITS AND DO NOT SIGN THE ASSIGNMENT FORM
SENT TO YOU BY OAK.
We will, of course, keep you informed of significant events concerning the
Partnership. If you have any questions, please call Partnership Investor
Services at (617) 342-4225 or the Partnership's administrative agent at (248)
637-7900.
Very truly yours,
/s/ Mark J. Marcucci
/s/ Daniel R. Leary
Mark J. Marcucci Daniel R. Leary
President President
AREA GP Corporation Aetna/AREA Corporation
