Exhibit 99(a)(2)
EQUITY RESOURCE LEXINGTON FUND
14 Story Street
Cambridge, MA 02138
June 22, 2001
OFFER TO PURCHASE UNITS IN
CAPITAL REALTY INVESTORS II LTD. PARTNERSHIP
FOR $100 PER UNIT
Dear Limited Partner:
Enclosed with this letter is an offer to purchase limited partnership units in
Capital Realty Investors II Ltd. Partnership (the "Partnership") for $100 per
unit [See "THE OFFER--Introduction"]. This offer expires on July 23, 2001. If
you are interested in selling your units, please read the enclosed offer
carefully.
The Partnership currently holds limited partnership interests in fifteen limited
partnerships (the "Local Partnerships"). The majority of these Local
Partnerships own low-income housing projects that are subject to government
regulations limiting the amount of money that the Local Partnerships can
distribute to the Partnership. Government regulations also limit the properties'
rent levels and may limit the Local Partnerships' ability to refinance or sell
these properties. [See "THE OFFER--Section 10--Certain Information Concerning
the Partnership "].
BENEFITS OF A SALE
o Equity Resource Lexington Fund (the "Lexington Fund" or "Purchaser") is
currently offering to purchase your interest in the Partnership for $100
per unit. To our knowledge, THE LEXINGTON FUND'S OFFER PRICE IS ALMOST 100%
HIGHER THAN ANY PREVIOUS OFFER FOR UNITS IN THE PARTNERSHIP.
o For the year-ended December 31, 2000, the Partnership generated taxable
income of $301.74 per unit, resulting in substantial tax liability for
limited partners. While the Purchaser has no information regarding the
Partnership's future year-end income and distribution levels, it is
possible that future years will be similar to the year-ended December 31,
2000. Limited partners who sell their units will terminate their investment
in the Partnership and eliminate future tax liability associated with the
ownership of their units. Please see "THE OFFER--Section 6--Certain Tax
Consequences" for further information regarding the tax consequences of a
sale of your units.
o The Lexington Fund's offer provides liquidity to limited partners and will
give them an opportunity to liquidate this investment. The Partnership has
been in existence for over 15 years and the Purchaser anticipates that it
will continue to operate for the foreseeable future. By selling your
limited partnership units, you give yourself the opportunity to place the
proceeds from a sale into other, potentially better performing,
investments. You may also simplify your tax returns by eliminating future
K-1 reporting for these Partnerships.
o Limited partnership units are illiquid investments. When you consider the
illiquid secondary market (which is essentially nothing more than a
"matching service" that attempts to bring buyers and sellers together), the
cost of selling commissions, your annual cost of tax reporting, and the
cost of a trustee if Units are held in an IRA or pension plan, the sale of
your Units for cash may be a good choice for you.
RISKS OF A SALE
o No independent party has been retained by Lexington Fund or any other
person to evaluate or render any opinion to Limited Partners with respect
to the fairness of the Offer Price, and no representation is made as to any
fairness or other measures of value that may be relevant to Limited
Partners. In making the Offer, Lexington Fund has not based its valuation
of the properties owned by the Partnership on any third-party appraisal or
valuation and it is uncertain whether the Offer Price reflects the value
that would be realized upon the sale of Units by a Limited Partner to a
third party. We urge Limited Partners to consult their own financial and
tax advisors in connection with the Offer.
o Lexington Fund is making the Offer with a view toward making a profit.
Accordingly, there is a conflict between Lexington Fund's desire to acquire
your Units at a low price and your desire to sell your Units at a high
price. Lexington Fund's intent is to acquire the Units at a discount to the
value Lexington Fund might ultimately realize from owning the Units.
o Limited Partners who sell their Units will be giving up the opportunity to
participate in any future potential benefits associated with ownership of
Units, including the right to participate in any future distribution of
cash or property. A sale of Units in the Offer will be a taxable sale.
The tax consequences of the Offer to a particular Limited Partner may be
different from those of other Limited Partners and we urge you to consult
your own tax advisor in connection with the Offer.
THE PURCHASER
The Lexington Fund is in the business of acquiring fractional investment
interests for long-term retention and seeks to purchase Units in the Partnership
in advancement of that strategy. The Units acquired as a result of this offer
will be held as long-term investments and not with a view to a resale. The
Lexington Fund does not acquire General Partner positions and is not engaged in
property management.
Please read the enclosed offer carefully. It contains important information
concerning this offer, the Partnership and the Purchaser. If you wish to sell
your units, complete the enclosed Agreement of Sale according to the directions
on the back of the agreement, sign where indicated and return it in the
pre-addressed return envelope.
If you have any questions regarding this offer, please call Equity Resources
Group, Inc., the information agent for this offer, at (617) 876-4800, or e-mail
them at info@equityresources.com.
Sincerely,
Equity Resource Lexington Fund LP