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
(Amendment No. ___)
BRAUVIN REAL ESTATE FUND L.P. 4
(Name of Subject Company)
Brauvin Real Estate Fund L.P. 4
(Name 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 Real Estate Fund L.P. 4
30 North LaSalle Street, Suite 3100
Chicago, Illinois 60602
(312) 759-7660
(Name, address and telephone number of
person authorized to receive notices
and communications on behalf of the
person(s) filing statement)
With a copy to:
Leslee M. Cohen, Esq.
Much Shelist Freed Denenberg Ament & Rubenstein, P.C.
200 North LaSalle Street, Suite 2100
Chicago, Illinois 60601
(312) 621-1707
[ ] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
Item 1. Subject Company Information.
The name of the subject company is Brauvin Real Estate Fund L.P. 4, a
Delaware limited partnership (the "Partnership"). The principal executive
offices of the Partnership are located at 30 North LaSalle Street, Suite
3100, Chicago, Illinois 60602 and the telephone number of such offices is
(312) 759-7660. The general partners of the Partnership are Jerome J. Brault
and Brauvin Ventures, Inc., an Illinois corporation (the "General Partners").
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"). The number of Units outstanding as of the date hereof is 9,550.
Item 2. Identity and Background of Filing Person.
This statement is being filed by the Partnership
This Statement relates to a tender offer by MP Falcon Growth Fund, LLC;
Accelerated High Yield Institutional Investors, Ltd.; MP Value Fund 7, LLC;
MP Value Fund 4, LLC; MP Dewaay Fund, LLC; Moraga Fund 1, L.P.; Moraga Gold,
LLC; MP Income Fund 13, LLC, Steven Gold and Previously Owned Partnerships
Income Fund II, L.P. (collectively, the "Bidder" or the "Purchaser")
disclosed in a Tender Offer Statement on Schedule TO (the "Schedule TO"),
dated June 21, 2001 to purchase up to 4,770 Units at a purchase price equal
to $100 per Unit, less the amount of any distributions declared or made with
respect to the Units between June 21, 2001 and July 27, 2001 or such other
date to which the Offer (as hereinafter defined) may be extended, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
June 21, 2001, and the related Letter of Transmittal (the "Offer to Purchase"
or the "Offer"). The number of Units subject to the Offer will be reduced to
the extent necessary to cause the number of Units purchased in the Offer,
when added to the number of Units transferred within the 12 months preceding
the closing of the Offer, not to equal or exceed 50% of the outstanding
Units.
Based on the information in the Schedule TO, the business address of the
person authorized to receive notices and communications on behalf of the
Purchaser is Christine Simpson, MacKenzie Patterson, Inc., 1640 School Street,
Moraga, California 94556.
Item 3. Past Contacts, Transactions, Negotiations and Agreements.
There is no material 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 Amended and 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 $119,918 for the year ended
December 31, 2000 and $26,544 for the three months ended March 31, 2001, for
such services, pursuant to the terms of the Agreement. Further, 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. The Partnership is entitled to
engage in various other transactions involving affiliates of the General
Partners, as described in the sections of the Partnership's Prospectus, dated
March 1, 1985, as supplemented, entitled "Compensation Table" and "Conflicts
of Interest" at pages 10 to 15 and the section of the Agreement entitled
"Rights, Duties and Obligations of the General Partners" at pages A-14 to
A-17.
Item 4. The Solicitation or Recommendation.
(a) Solicitation or Recommendation. The Partnership is not expressing
an opinion and is remaining neutral towards the Offer to Purchase.
(b) Reasons. In deciding to remain neutral on the Offer to Purchase,
the General Partners considered the fact that, in 1998, the Partnership
engaged a nationally known, independent appraisal firm (the "Appraisal Firm")
to value the Partnership's assets. The Partnership owns two rental
properties, a 58% interest in a joint venture which owns a third rental
property and a 47% interest in a joint venture which owns a fourth rental
property. The General Partners received the valuation information in
November 1998. By taking the appraised value of the assets, and the cash and
cash equivalents held by the Partnership as of June 1999, and then deducting
the mortgage balances, the anticipated selling costs, the Partnership's other
liabilities and the estimated wind-up costs of the Partnership, the
Partnership estimated that the net liquidation value per Unit as of such date
was approximately $320, which did not include any prior distributions or
returns of capital to the Limited Partners.
The General Partners have determined to pursue the disposition of the
Partnership's assets and the Appraisal Firm is assisting the General Partners
in determining the appropriate method and timing for such disposition. In
1999, the Partnership solicited the votes of the Limited Partners to approve
a sale of all of the Partnership's real estate assets and to subsequently
liquidate the Partnership. The Limited Partners approved the proposed sale,
authorizing the General Partners to cause the sale of the its properties for
not less than a minimum price equal to 70% of the aggregate appraised value
of such properties.
To date, over 250 potential purchasers have been contacted regarding the
sale of the properties and, of those contacted, approximately 120 have
registered to receive packages on one or more of the properties. In addition,
the properties are listed on the Internet at Loopnet.com, the largest
commercial real estate website in the nation.
In 2000, the Partnership received three offers for its Raleigh Springs
Marketplace property and ultimately accepted an offer for $6.5 million.
After entering into a purchase contract providing for a 45-day period in
which the buyer could formally accept or reject the sale, the potential
purchaser terminated the contract and the parties renegotiated the contract
at a $5.835 million purchase price, which the potential buyer rejected in
March 2001. The property is again being marketed for sale. The Partnership
has received an offer for the property for $6.2 million from a third party.
The Partnership is currently negotiating the terms of this offer and
assessing the credibility of the buyers.
In 2001, the Partnership received an offer to purchase the Strawberry
Fields Shopping Center property, a portion of which the Partnership owns
through a joint venture with an affiliate of the Partnership, at a purchase
price of $5.585 million. In addition, Syms, a national discount clothing
retailer, exercised its right of first refusal on the sale of the property.
Accordingly, the Partnership executed a purchase and sale agreement with Syms
for $5.585 million in the second quarter of 2001. The contract remains
subject to standard contingencies and is anticipated to close shortly in
July, 2001.
In September 2000, after receiving six purchase offers, negotiations
were completed with respect to a contract for the sale of the Sabal Palm
Square property, a portion of which the Partnership owns through a joint
venture with its affiliate. The proposed purchase price for the property was
$3.36 million. However, the buyer terminated the contract within the due
diligence period set forth in the contract. The Partnership is continuing
the market the property for sale. As a result of two dark (but rent paying)
anchor spaces representing approximately 62% of the property, Sabal Palm
Square has been difficult to sell and the Partnership is reviewing a number
of potential possibilities to sublease either or both of the dark anchors.
However, Winn-Dixie and Walgreens, the lessees of such anchors which have
vacated their spaces prior to their lease termination dates, have been
selective in their review of potential subtenants so as to restrict potential
competition. The prior contract price of $3.36 million was in excess of the
1998 appraised value of $3.2 million, but was only slightly above the amount
of debt associated with the property. The Partnership has not received any
offers for the purchase of its Fortune Professional Building property;
however, the Partnership has recently replaced both the on-site leasing agent
as well as the local representative marketing the property for sale. The
occupancy level at the property at March 31, 2001 was 70%, compared to 56% at
December 30, 2000 and 89% at March 31, 2000.
Based on (a) the contract price for Strawberry Fields of $5.585 million,
(b) the offer prices received for the Raleigh Springs Marketplace property at
$6.2 million and the Sabal Palm Square property at $3.36 million, both of
which have been assessed by management as an estimate of the net realizable
value of such properties, and (c) the carrying value of the Fortune
Professional Building at $1.35 million, the General Partners' current
estimate of the amount to be received by the Limited Partners in the ultimate
liquidation of the Partnership is $330 per Unit. In calculating this
estimate, the Partnership added to the above property values cash and cash
equivalents of approximately $103 per Unit held by the Partnership at March
31, 2001, then deducted mortgage balances, anticipated selling costs of the
properties and the Partnership's other liabilities at March 31, 2001, and
estimated wind-up costs of the Partnership. The General Partners are unable
to determine the ultimate amount to be actually received by the Limited
Partners upon the sale of all of the Partnership's assets. Such amount will
be affected by items including, but not limited to, the timing of the
liquidation of the assets, changes in market conditions, necessary reserves
of the Partnership and the sale prices that can be negotiated.
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
unless the Limited Partner transfers all of his 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.
(c) Intent to Tender. Neither the Partnership nor either of the
General Partners or, to the knowledge of the Partnership, any affiliate of
the Partnership or either of the General Partners intends to tender the Units
that are held of record or beneficially by such person to the Purchaser.
Item 5. Person/Assets, Retained, Employed, Compensated or Used.
None.
Item 6. Interest in Securities of the Subject Company.
During the past sixty days, none of the persons referred to in Item
1008(b) of Regulation M-A effected any transactions in the subject securities.
Item 7. Purpose of the Transaction and Plans or Proposals.
(a) The Partnership has not undertaken or engaged in any negotiations
in response to the Offer to Purchase which relates to: (i) a tender offer
or other acquisition of the Partnership's Units by the Partnership or any
other person; (ii) any extraordinary transaction, such as a merger,
reorganization or liquidation, involving the Partnership; (iii) a purchase,
sale or transfer of a material amount of assets by the Partnership; or (iv)
any material change in the present dividend rate or policy, or indebtedness
or capitalization of the Partnership.
(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.
None.
Item 9. Exhibits.
(a) (1) Letter to Limited Partners.
SIGNATURE
After due 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.
July 10, 2001
BRAUVIN REAL ESTATE FUND L.P. 4
By: Brauvin Ventures, Inc.,
Corporate General Partner
By: /s/ Jerome J. Brault
Jerome J. Brault,
President
By: /s/ Jerome J. Brault
Jerome J. Brault,
General Partner
July 10, 2001
Dear Limited Partner, Brauvin Real Estate Fund L.P. 4:
Please be advised that, on June 20, 2001, the General Partners received an
unsolicited tender offer to purchase up to 4,770 of the outstanding Limited
Partnership Units of the Partnership for $100 per Unit. The offer is being
made by a group that beneficially owns the economic interests with respect
to approximately 18.95% of the outstanding Units. You have recently received
information regarding this offer.
The General Partners have not made a decision as to the particular merits or
risks to you, as a Limited Partner, associated with the tender offer.
However, the General Partners would like to provide you with certain updated
information and estimates of the per Unit proceeds that may become available
upon the sale of the Partnership's properties and the liquidation of the
Partnership. As detailed and conditioned below, the General Partners'
current estimate of the amount to be received by the Limited Partners in the
ultimate liquidation of the Partnership is $330 per Unit.
As you know, in 1998, the Partnership engaged a nationally known appraisal
firm that was unaffiliated with the Partnership and the General Partners to
appraise the Partnership's properties.
Further, in 1999, the Partnership solicited the votes of the Limited Partners
to approve a sale of all of the Partnership's real estate assets and to
subsequently liquidate the Partnership. The Limited Partners approved the
proposed sale, authorizing the General Partners to cause the sale of the
Partnership's properties for not less than a minimum price equal to 70% of
the aggregate appraised value of such properties.
To date, over 250 potential purchasers have been contacted regarding the sale
of the properties and, of those contacted, approximately 120 have registered
to receive packages on one or more of the properties. In addition, the
properties are listed on the Internet at Loopnet.com, the largest commercial
real estate website in the nation. Through these efforts, the Partnership
has recently entered into a purchase and sale agreement with Syms, a national
discount clothing retailer, to sell the Strawberry Fields Shopping Center
property for $5.585 million. We anticipate that this sale will close shortly
in July, 2001. In addition, in 2000 the Partnership accepted an offer for
its Raleigh Springs Marketplace property at a purchase price of $6.5 million.
However, after extensive negotiations, the contract price was revised to
$5.835 million. Ultimately, the potential purchaser terminated the contract
during its allotted due diligence period. We have, however, recently
received a new offer for the property at a purchase price of $6.2 million,
which we are currently negotiating. During 2000, Sabal Palm was placed under
contract twice. However, both contracts were terminated by the potential
purchasers during due diligence. We continue to actively market this
property. The Partnership has not received any offers for the purchase of
its Fortune Professional Building property; however, we have recently
replaced both the on site leasing agent as well as the local representative
marketing the property for sale.
Based on (a) the contract price for Strawberry Fields of $5.585 million,
(b) the offer prices received for the Raleigh Springs Marketplace property at
$6.2 million and the Sabal Palm Square property at $3.36 million, both of
which have been assessed by management as an estimate of the net realizable
value of such properties, and (c) the carrying value of the Fortune
Professional Building at $1.35 million, the General Partners' current
estimate of the amount to be received by the Limited Partners in the ultimate
liquidation of the Partnership is $330 per Unit. In calculating this
estimate, we added to the above property values cash and cash equivalents of
approximately $103 per Unit held by the Partnership at March 31, 2001, then
deducted mortgage balances, anticipated selling costs of the properties and
the Partnership's other liabilities at March 31, 2001, and estimated wind-up
costs of the Partnership. Please note that the General Partners are unable
to determine the ultimate amount to be actually received by the Limited
Partners upon the sale of all of the Partnership's assets. Such amount will
be affected by items including, but not limited to, the timing of the
liquidation of the assets, changes in market conditions, necessary reserves
of the Partnership and the sale prices that can be negotiated.
You will have to make the determination as to whether to wait for the
liquidation of the Partnership's assets or to sell your interest now at the
tender offer price. We do recommend, however, that if you choose to sell
your interest prior to liquidation, you consider other options for sale,
including the informal secondary market for the Units. If you would like
further details regarding the informal secondary market, please consult with
your broker or registered representative.
In addition, please consider that in establishing their offer price of $100
per Unit, the bidders, by their own admission, were motivated to establish
the lowest price that might be acceptable to you and have estimated that
each Unit could have a value of $121, although they have not made an
independent appraisal of the units or the Partnership's properties and are
not qualified to appraise real estate. Furthermore, the bidders review
of independent secondary market reporting publications found that, although
only 50 Units were reported to have been sold during the months of November
2000 through April 2001, the sale prices ranged from $150 to $166 per Unit.
However, the bidders do not know whether such sales information is accurate
or complete.
Nonetheless, if you are primarily interested in liquidating your 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 or any other potential tender offer, you will no longer have an economic
interest in the Partnership's assets; thus, you will not share in any
potential change in their value. If you choose to pursue the tender offer,
payment will come directly from the outside group of investors.
As always, if you have any questions regarding your investment, please do not
hesitate to contact us.
Sincerely,
Jerome J. Brault
Managing General Partner
Some of the statements made herein are forward-looking and concern the value
of the Partnership and the salability of its properties. While the General
Partners have made its best efforts to be accurate in making these forward-
looking statements, any such statements are subject to risks and
uncertainties that could cause the actual values and results to vary
materially. These risks include, without limitation, fluctuations in the
economy and the real estate market and the availability of financing.
Readers are cautioned not to place undue reliance on such forward-looking
statements.