EXHIBIT 9(a)
FJS PROPERTIES FUND I, L.P.
264 ROUTE 537 EAST
COLTS NECK, NJ 07722
(908)542-9209
December 1, 1997
Re: FJS Properties Fund I, L.P. - Tender Offer
Dear Limited Partner:
We are aware that you have, or shortly will receive a tender offer
for your Units of Limited Partnership Interests in FJS Properties Fund I, L.P.
As the company affected by such offer, we are required by Securities and
Exchange Commission rules and regulations to review this offer and to provide
you with our recommendation as to your acceptance or rejection of such offer.
We recommend that you reject this offer because this offer is
substantially less than our estimate of the actual value of your Limited
Partnership Units. Our basis for this recommendation is as follows:
A current liquidation of the Partnership, and a distribution of all
assets to the partners as provided in the partnership agreement would in all
likelihood provide for a distribution of $151 per Unit.
To value the Pavilion Apartments two factors were considered. In
February, 1994, an appraisal of the Project was prepared in connection with the
refinance of the first mortgage. This appraisal was prepared for Long Beach Bank
by Michael R. Slade, MAI, SRA, CRE of Callaway & Price, Inc. While we recognize
this appraisal was prepared for financing purposes and not for an actual sale,
we feel it provides a valid approximation of the value of the project free and
clear of any financing. The value stated in the appraisal is $7,500,000, or
approximately $2,690,000 in excess of the current balance of the first mortgage.
Secondly, subsequent to our receipt of the tender offer, we have discussed a
potential sale of the Pavilion Apartments, and have received a written offer for
the purchase of the project. This provides for a purchase price of $2,000,000
cash in excess of the existing first mortgage. While the Partnership has not
committed to sell the project at this time, and such a sale would require the
consent of the mortgage holder, we believe that this purchaser has both the
intent and capability to acquire the property at that price.
We have therefore conservatively estimated the current value of the
Pavilion Apartments at $2,000,000 in excess of the first mortgage. This plus the
approximately $550,000 of liquid assets reflected in the Partnership's 10Q for
the quarter ending September 30, 1997, yields an aggregate of $2,550,000, or
approximately $151 per Unit, which would be available for distribution.
This $151 conservative valuation significantly exceeds the $75 per
Unit which has been offered.
We would also point out that during the first three quarters of 1997
the Partnership has distributed $5.53 per Unit of cash flow. Annualized this
equates to a cash distribution of $7.37 per Unit, which on a $75 investment (the
amount being offered) is a 9.8% cash on cash return. Thus a Limited Partner who
elects not to sell his units for $75 per Unit would be receiving, based on an
annualization of the first three quarters of 1997, amounts equal to a 9.8%
return on $75, while still retaining the ability to share in a larger
liquidating distribution when the Pavilion Apartments are sold.
Based on the above, your Partnership recommends that you reject the
tender offer for your limited partnership Units as insufficient consideration
for their worth.
Should you have any questions regarding this matter please feel free
to call me at (908)542-9209.
Very truly yours,
FJS Properties Fund I, L.P.
by: FJS Properties, Inc., General Partner
By:_______________________________
Andrew C. Alson, President
ACA/kb
Enclosure