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 INCOME PROPERTIES L.P. 6
(Name of Subject Company)
Brauvin Income Properties L.P. 6
(Names(s) 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 6, Inc.
30 North LaSalle Street, Suite 3100
Chicago, Illinois 60602
(Name, address and telephone number of
person authorized to receive notices
and communications on behalf of the
persons filing statement)
With a copy to:
Don S. Hershman, Esq.
Holleb & Coff
55 East Monroe, Suite 4100
Chicago, Illinois 60603
(312) 807-4660
<PAGE>
Item 1. Security and Subject Company
The name of the subject company is Brauvin Income Properties
L.P. 6, a Delaware limited partnership (the "Partnership"). Jerome
J. Brault and Brauvin 6, 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 Accelerated High
Yield Pension Investors, L.P.; Accelerated High Yield Institutional
Investors, L.P.; Accelerated High Yield Institutional Fund, L.P.;
Mackenzie Patterson Value Fund 5, LLC; and Mackenzie Patterson
Special Fund, L.P. (collectively, the "Bidder" or the "Purchaser")
disclosed in a Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1"), dated October 15, 1998 to purchase up to 784
Units at a purchase price equal to $475 per Unit, less the amount
of any distributions declared or made with respect to the Units
between October 15, 1998 (the "Offer Date") and November 13, 1998
or such other date to which this Offer may be extended (the
"Expiration Date") (the "Offer Consideration"), upon the terms and
subject to the conditions set forth in the Offer to Purchase dated
October 15, 1998 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 Purchasers is Mackenzie Patterson,
Inc., 1640 School Street, Moraga, California 94556 (the
"Depositary").
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 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 $130,000 for the year ended December
31, 1997 and approximately $65,000 for the six months ended June
30, 1998, 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 on September 9, 1998, the Partnership
retained Landauer Associates, Inc. ("Landauer") to undertake a due
diligence and market pricing analysis of two of the Partnership's
real properties Delchamps Plaza Shopping Center and Shoppes on
the Parkway. Further, the Partnership recently engaged Valuation
Research Corporation ("Valuation") to appraise the Partnership's
smallest property, Ponderosa Unit No. 886, located in Garfield
Heights, Ohio. The engagement letter with Landauer is included as
Exhibit (a)(2) to this Schedule 14D-9 and describes the scope of
the engagement. The General Partners believe they cannot make a
recommendation to the Limited Partners until they have received the
information from Landauer and Valuation (both of which are
unaffiliated with the Partnership and the General Partners). The
valuations of these properties are expected to be completed by the
end of the calendar year. 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 of 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
retained Landauer and Valuation to undertake due diligence and
market pricing analyses of the Partnership's real properties.
Until such analyses are completed, the Partnership will not make a
decision whether to proceed with a sale and disposition of these
properties, and 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
(a)(2) Engagement Letter dated September 9, 1998 by and
among Landauer Associates, Inc. and the Partnership
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.
October 26, 1998
BRAUVIN INCOME PROPERTIES L.P. 6
By: Brauvin 6, Inc.,
Corporate General Partner
By: /s/ Jerome J. Brault
Jerome J. Brault,
President
By: /s/ Jerome J. Brault
Jerome J. Brault,
General Partner
<PAGE>
Exhibit 9.(a)(1)
Brauvin Real Estate Funds
30 N. LaSalle Street
Suite 3100
Chicago, IL 60602
October 26, 1998
Dear Limited Partner, Brauvin Income Properties L.P. 6:
On October 15, 1998, the General Partners received an unsolicited
tender offer to purchase up to 10% of the outstanding Limited
Partnership Units of the fund for $475 per Unit. The offer is
being made in part by an entity that currently owns a nominal
economic interest in the Partnership.
At this time the General Partners have not made a decision as to
the particular merits or risks associated with the tender offer to
the Limited Partners.
However, the General Partners would like to point out, as
previously reported to you in the 1997 Annual Report, we are
exploring various alternatives to sell the Partnership's assets.
Further, as reported in the August 15, 1998 Second Quarter Report,
the Partnership has engaged a nationally known appraisal firm to
value the Partnership's assets. Additionally, the firm will assist
us in determining the appropriate method and timing for the
disposition of the Partnership's assets. The appraisal of the
assets is expected to be completed by the end of the calendar year.
We believe an informed determination of the true value of the Units
can be made at that time. The value of the Units after the receipt
of the appraisal may be more or less than the current tender offer.
Nonetheless, for those investors who are primarily interested in
liquidating their 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 tender
offer you will no longer have ownership interest in the
Partnership's assets and thus will not share in any potential
changes in their value.
Ultimately each of you has to make the determination as to whether
to sell now at the current tender price or wait to see the results
from the appraisal of the assets. We do recommend, however, that
if you choose to sell your interest at this time, you consider
other options for sale including the informal secondary market for
partnership units. If you would like further details regarding the
informal secondary market please consult with your broker or
registered representative.
If you choose to accept the tender offer, payment will come
directly from the outside group of investors.
As a reference point, on August 15, 1998, Brauvin Income Properties
L.P. 6 paid you an annualized yield of 8% based on your current
capital account.
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
<PAGE>
Exhibit 9.(a)(2)
Landauer Real Estate Consultants
Landauer Associates, Inc.
225 West Washington Street
Suite 1500
Chicago, IL 60606
(312) 899-0100
Fax (312) 899-0006
September 9, 1998
Mr. Jerome J. Brault
Brauvin Real Estate Fund L.P. 6
c/o Brauvin Real Estate Funds
30 N. LaSalle St., Suite 3100
Chicago, IL 60602
Dear Mr. Brault:
Thank you for providing Landauer Associates, Inc. ("Landauer") with
the opportunity to present the following proposal for professional
services to Brauvin Real Estate Fund L.P. 6 (the "Seller"). This
letter is intended to describe the terms and conditions under which
Landauer will be authorized by Seller to initiate and complete a
two-phased engagement respecting a certain commercial properties
more fully described below (the "Properties"). Phase I of the
engagement will be a market pricing analysis; under Phase II of the
engagement Landauer will be engaged to arrange the sale of the
Properties.
The Properties includes the following:
DelChamps Plaza Shopping Center: a 59,389 square foot shopping
center located in Tuscaloosa, AL;
Shoppes on the Parkway: a 86,866 square foot shopping center
located on Hilton Head Island, SC.
Scope of Services
The services to be provided by Landauer to Seller under this
agreement can be grouped generally into two distinct phases: PHASE
I: Due Diligence and Market Pricing Analysis; PHASE II:
Marketing. PHASE II will be further sub-divided into three
sub-phases: PHASE IIa: Pre-Marketing; PHASE IIb: Marketing and
PHASE IIc: Post-Marketing.
The specific services that Landauer hereby agrees to provide under
each of these phases includes the following:
PHASE I: Due Diligence and Market Pricing
The specific services to be provided under Phase I shall include
the following:
Investigate and report on the market conditions for the Properties
in their respective sub-markets;
Investigate and report on the economic and demographic conditions
in each sub-market;
Inspect the Properties, investigate the market for rental
comparables, operating expense levels and other factors affecting
income Properties;
Review the operating history of the Properties;
Provide ten-year cash flow projections;
Research the market or sales comparable Properties to establish
appropriate rates of return and ranges of selling prices per square
foot.
The deliverable report under Phase I of the engagement will be a
limited summary report, which will include Sales Comparables and a
ten-year cash flow or stabilized operating analysis, as applicable.
Appropriate pricing parameters will be concluded. The report will
be prepared in conformance with and subject to the requirements of
the Code of Professional Ethics and Standards of Professional
Practice of the Appraisal Institute, and subject to our Assumptions
and Limiting Conditions. Upon your request, the deliverable under
Phase I of the engagement may be expanded to include complete MAI
appraisal report(s).
We anticipate the timing for PHASE I to be approximately six (6) to
eight (8) weeks. In the event you request complete appraisal
reports the anticipated timing for completion of PHASE I would
increase by approximately two (2) weeks.
Should we be required to prepare for and/or give testimony at any
legal proceedings relative to the work performed under Phase I of
the engagement, the fees for such activity will be in addition to
the fees quoted in this agreement. In such an event, we will
accrue, on a time-billed basis, all time expended in the giving of
depositions, attending pre-trial meetings and preparation,
attending and giving testimony in court, and other meetings and
conversations with you or your representatives or other counsel
pertinent to any legal proceedings on this matter, which time will
be accrued at the normal hourly billing rate for each Landauer
professional involved. This accrued time will be billed separately
from the aforementioned fee, plus any out-of-pocket expenses that
may be incurred in this subsequent activity.
PHASE II: Properties Marketing
In the event that Seller, in its sole discretion, determines to
proceed with a sale and disposition of the Properties, it is
understood and agreed that Seller will retain Landauer to represent
seller in such sale and disposition of the Properties on an
exclusive basis as more fully described below.
PHASE IIa: Pre-marketing.
Utilizing the data and information gathered and analyzed under
Phase I of the engagement, Landauer's capital markets professionals
will prepare a professional confidential Information Memorandum and
supporting materials (the "Marketing Materials"). The Marketing
Materials will serve as the basis of presentation for the marketing
of the Properties. During the Pre-Marketing phase of the
engagement Landauer will begin to source indications of interest
from potential buyers. We anticipate the timing of the
Pre-Marketing phase to be approximately two (2) weeks.
PHASE IIb: Marketing.
In the marketing phase of the project, Landauer will draw on its
regional, national and international network in the commercial real
estate industry for the purpose of constructing a targeted list of
potential purchasers of the Properties. Upon approval of the list
by you and the proposed marketing approach, including appropriate
confidentiality procedures, Landauer will contact decision-makers
within the organizations identified on the list and will arrange
and organize meetings with such individuals. Landauer will make
confidential presentations to such individuals for the purpose of
soliciting offers and will make available to them the Firm's base
of knowledge and expertise in support of market pricing. Landauer
will assist in coordinating and managing site visits and
information requests on the part of prospective purchasers.
Landauer will assist you in assessing the relative merits of
competing offers by drawing on the company's depth of experience
and expertise in the real estate capital markets. We anticipate the
timing of the Marketing phase to be approximately three (3) months.
PHASE IIc: Post Marketing.
Upon selection of a suitable buyer, or buyers, for the Properties,
Landauer capital markets professionals will work with Seller in
facilitating the buyer's due diligence process as well as the
contract negotiations and preparation of documentation in
connection with facilitating an expeditious closing. We anticipate
the timing of the Post-Marketing phase to be approximately three
(3) months from date of execution of a purchase and sale agreement
to closing.
Terms and Conditions
Exclusive Engagement
Subject to the termination provisions detailed below, Seller hereby
grants to Landauer the exclusive right to represent Seller in the
sale of the Properties for a period commencing the date upon which
this agreement is executed and continuing for twelve (12) months
thereafter (the "Exclusive Period"). Seller agrees to direct all
inquiries regarding the sale of the Properties to the attention of
Landauer, and Landauer agrees to promptly respond to such
inquiries, during the Exclusive Period.
Termination
Notwithstanding anything contained herein to the contrary, this
agreement may be terminated at anytime by either party upon 30 days
written notice to the other party. Any termination shall not
affect Landauer's rights to be reimbursed for its reasonable
out-of-pocket expenses, such as travel, communications, printing
and similar matters necessary to carry out the services hereunder.
Absent specific written approval from you such expenses shall not
exceed $3,000 in the aggregate.
Fees Survive Termination in Certain Events
If Seller should enter into a written agreement to close the sale
of the Properties before the termination of this agreement, but the
closing does not occur until after the termination of such period,
Landauer shall be entitled to be paid the compensation in
accordance with the terms of this agreement whenever such closing
occurs.
If Seller closes the sale of the Properties with a party with whom
Landauer dealt during the term of this agreement, and provided that
such party, prior to termination of this agreement, evidenced a
bona fide interest based upon Landauer's efforts and a closing of
the sale with such party, or any affiliate or subsidiary thereof,
takes place within twelve (12) months after the termination of this
Agreement, Landauer shall be entitled to the compensation provided
for in this agreement. For purposes of this agreement, the term
"bona fide interest" shall mean any party who requests and receives
Marketing Materials from Landauer.
The provisions of this paragraph shall in no way be deemed to limit
Landauer's right in the previous paragraph.
If Landauer elects to terminate this agreement, the foregoing two
paragraphs shall be of no force or effect.
Notwithstanding anything to the contrary contained in this
Agreement, to the extent any Properties is sold, transferred or
conveyed to any lender that currently has a mortgage loan on any of
the Properties, no fee shall be payable to Landauer under Phase II
of the engagement. This paragraph shall in no way be interpreted
to inhibit the ability of Landauer to collect fees as earned
specifically under Phase I of the engagement as more fully
described below.
Fees
Phase I Fees: The fee for completion of Phase I of the engagement
will be $12,900. In the event Seller elects to extend services
under Phase I to include full appraisals the fee will be increased
to $14,300.
The Phase I Fee is not contingent upon the finding of a specific
value or values nor upon the occurrence of any outside event or
third party act, and is due and payable upon the rendering of
services agreed to herein and delivery of the final report(s). In
the event the assignment is terminated prior to the issuance of the
final report(s), our reimbursement will be based upon the quoted
fee and the proportion of the assignment that has been completed
and the expenses incurred to date.
Phase II Fee: Seller agrees to pay Landauer, and Landauer agrees
to accept from Seller, a contingent placement fee (the "Placement
Fee") for all of the services described herein under PHASE II,
including Landauer's part in structuring and arranging the sale of
the Properties. The Placement Fee shall be an amount equal to 2%
of the Gross Sales Price of the Properties.
For purposes of this paragraph, Gross Sales Price shall mean the
purchase price for the Properties as stated in the agreement of
purchase and sale without deduction for closing expenses,
adjustments or costs of any kind.
The Placement Fee will be earned by and payable to Landauer as, if
and when the closing of the sale of the Properties occurs without
regard to any portion of the purchase price which, by the terms and
conditions of the purchase and sale agreement, may be paid on a
deferred basis.
In the event that a sale of the Properties is consummated with more
than one buyer, the Placement Fee shall be earned by and payable to
Landauer upon each individual Property's respective closing.
Landauer agrees to provide a credit against the Placement Fee for
any and all fees received in connection with Phase I of the
engagement.
Sharing of Information
Seller shall make available to Landauer, on a timely basis, the
documents and other information which are necessary or appropriate
for the fulfillment of its assignment hereunder and the property
marketing of the transaction. All documents and information
supplied to Landauer by Seller shall, to the best of Seller's
knowledge, be complete and accurate and Seller shall correct any
information which it learns is incomplete or inaccurate. Seller's
non-public documents and information shall be treated as
proprietary and as confidential and Landauer, its agents, employees
and representatives shall so treat such documents and information.
All such documents and information supplied to Landauer by Seller
shall at all times remain the Properties of Seller and Landauer
agrees to promptly return same to Seller upon request, and except
as authorized by Seller in connection with the marketing of the
Properties Landauer shall not use such information except in
connection with the engagement.
To the extent that Landauer prepares any market pricing analysis or
other report ("Analysis") regarding the economics or pricing of the
Properties, Seller acknowledges and agrees that such Analysis will
be an estimate only and will not constitute a representation,
warranty, covenant or guaranty, either express or implied,
regarding future events or performance.
Landauer will at all times keep Seller fully apprised of the
progress and status of each phase of the project. In addition to
providing Seller immediate information updates on an as requested
basis, Landauer will provide Seller with a formal written status
report on a bi-weekly basis.
Approval of Offer(s)
Seller, in its sole discretion, reserves the right to accept or
reject any offer with respect to the sale of the Properties.
Miscellaneous
In the event that an agreement of purchase and sale for the
Properties is duly executed but later terminated solely as the
result of Seller's willful and wrongful breach of such agreement
exclusive of any breach caused by events of Force Majeure, Landauer
may, at its option, extend the Exclusive Period for a twelve month
period from the date of such termination.
In the event that any action, suit or other proceeding in law or in
equity is brought in connection with any term or provision in this
agreement, and such action results in award of a judgment for money
damages or in the granting of any injunction or restraining order,
all expenses (including reasonable attorney's fees) of the
prevailing party in such action, suit or other proceeding shall be
paid promptly by the non-prevailing party. It is agreed by the
parties that any such action, suit or other proceeding shall take
place in, and be subject to the laws of, the state of Illinois.
The party executing this agreement on behalf of Seller represents
and warrants that he is duly authorized to bind Seller with respect
to the terms and conditions of this agreement.
This agreement contains the entire agreement of the parties hereto
and replaces any prior agreements or understandings with respect to
the subject matter hereof. It may not be changed, amended or
modified except by an instrument in writing signed by the parties
hereto.
Provided the terms and conditions of this agreement meet with your
approval, please evidence your acceptance of this agreement by
executing on behalf of Seller, and returning one copy to my
attention.
On behalf of Landauer Associates, Inc. we want to thank you again
for providing us with the opportunity to present this proposal for
professional services. We look forward to representing you and
working with you toward an expeditious and successful closing of
this transaction.
Sincerely,
LANDAUER ASSOCIATES, INC.
/s/ Cary Uretz
Cary A. Uretz
Managing Director
Capital Markets Group
AGREED AND ACCEPTED:
Brauvin Income Properties L.P. 6
By: Brauvin 6, Inc.
By: /s/ James L. Brualt
Title: Vice President
Date: 9/15/98
