SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Materials Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

INTERSTATE GENERAL COMPANY L.P.
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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[X] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing:

1) Amount previously paid:
_____________________________

2) Form, Schedule or Registration Statement No:
_____________________________

3) Filing party:
_____________________________

4) Date filed:

_____________________________

INTERSTATE GENERAL COMPANY L.P.
222 Smallwood Village Center
St. Charles, Maryland 20602

Dear IGC Unitholder:

As we announced earlier this year, we propose to transfer the
principal real estate operations of Interstate General Company L.P. ("IGC") to
American Community Properties Trust ("ACPT") and to distribute to the partners
of IGC, including IGC Unitholders, all of the common shares of ACPT (the
"Restructuring").

The purpose of the Restructuring is to create an attractive investment
vehicle for the principal real estate assets and operations of IGC that will not
be burdened with the operating losses and capital needs of American Family
Homes, Inc. ("AFH") and Interstate Waste Technologies, Inc. ("IWT") or with the
wetlands litigation. In addition, ACPT, as a type of business trust whose
principal income is dividends from corporations, should be a more attractive
investment for pension funds and mutual funds than is IGC as a master limited
partnership. We expect that ACPT will have greater access to capital markets
than IGC has had.

ACPT acts as a self-managed holding company that owns all of the
outstanding equity interests in American Rental Management Company ("American
Management"), American Land Development US, Inc. ("American Land") and
Interstate General Properties Group S.E. ("IGP Group") and all of the
outstanding common stock of American Rental Properties Trust ("American
Rental"). In the Restructuring, American Rental, through its subsidiary
partnership American Housing Properties L.P. ("American Housing"), will acquire
IGC's partnership interests in United States investment apartment properties and
its land in the United States presently intended for development as apartment
properties. American Rental, a Maryland real estate investment trust, is
expected to be taxed as a real estate investment trust ("REIT"). American
Management will acquire IGC's United States property management services
operations. It is a Delaware corporation and will be taxed as a corporation.
American Land will acquire IGC's principal United States community development
assets and operations, principally land in St. Charles, Maryland, that is being
developed as a planned community. American Land is a Maryland corporation and
will be taxed as a corporation. IGP Group will acquire IGC's interests in its
affiliate Interstate General Properties Limited Partnership S.E. ("IGP") which
will continue to hold its interests in Puerto Rico investment apartment
properties, and in Puerto Rico management services, community development and
homebuilding assets. IGP Group intends to qualify as a Puerto Rico special
partnership that is expected to be taxed as a corporation for U.S. tax purposes
and as a partnership for Puerto Rico income tax purposes.

After these asset transfers have been completed, IGC will distribute
all of the outstanding common shares of ACPT to the general and limited partners
(including Unitholders) of IGC pro rata in accordance with their percentage
interest in IGC. IGC Unitholders in the aggregate will receive 99% of ACPT's
common shares on the basis of

one ACPT common share for every two IGC Units held. Based on the number of IGC
Units currently outstanding, approximately 5,200,000 ACPT common shares will be
distributed. As of December 31, 1996, the Net Asset Value per common share of
ACPT is estimated by IGC to be $21.18, based on appraisals of land assets and
valuations of interests in apartment properties, management contracts and other
assets.

Concurrently with the Restructuring, American Rental, through American
Housing and IGP Group, through IGP, will offer to acquire all of the limited
partnership interests held by investors in the U.S. and Puerto Rico apartment
partnerships. In return, the investors will receive equity interests in American
Housing and IGP that will be convertible into common shares of ACPT. If this is
successful, ACPT will have greater flexibility in apartment operations and the
investors will have access to a liquid security. The Restructuring is not
conditioned upon completion of this exchange offer.

Also in connection with the Restructuring, ACPT will seek to raise up
to $40 million in additional equity capital through a private offering of
preferred shares (the "Private Offering"). Proceeds from the Private Offering
would be used to pay down existing bank debt and for working capital. The terms
of the preferred shares will be negotiated with purchasers, but they may include
rights to preferred distributions, cumulative distributions, and/or liquidation
preferences. The preferred shares also may be convertible into common shares at
a negotiated conversion ratio. The Private Offering, if completed, would result
in dilution of the percentage interest of all ACPT shareholders including the
Wilson Family, whose percentage ownership would likely be reduced below 40%.
Regardless of the outcome of the Private Offering, the Wilson Family will take
such other actions as may be necessary to reduce its percentage interest to
below 40% in order to permit American Rental to qualify as a REIT.

After the Restructuring, IGC will continue to own certain assets that
in management's view do not fit ACPT's business plan. These include the Towne
Center land in St. Charles, Maryland, which has been the subject of the wetlands
litigation, certain land in Pomfret, Maryland, St. Mary's County, Maryland, and
Prince William County, Virginia, a 50% interest in a partnership that owns land
in Brandywine, Maryland, all of the shares of AFH and IWT, all of the voting
stock of HDA Management Corporation, a note in the amount of $9.03 million
payable by a subsidiary of ACPT, as well as fractional interests in Housing
Development Associates, S.E., Chastleton Apartment Associates, L.P. and
Coachman's L.P. Our goal is to place AFH and IWT on a sound financial footing so
that they can be sold or distributed to IGC Unitholders. To enhance its
prospects, the Caribbean operations of IWT have been transferred to a separate
company, Caribe Waste Technologies, Inc. ("CWT"), the common stock of which will
be held in a trust for the benefit of IGC Unitholders (the "CWT Trust").

The assets retained by IGC will have substantial value, however, for
the foreseeable future the continuing operations are not expected to generate
profits or to

-ii-

enable IGC to make distributions to IGC Unitholders. Accordingly, prior to
completing the Restructuring IGC will seek to obtain financing backed by its
retained assets. We will seek to continue IGC's listings on the American Stock
Exchange and Pacific Stock Exchange, which may include implementing a reverse
split with respect to outstanding IGC Units. Even with adequate financing to
fund IGC's operations for the foreseeable future, continued listing may not be
possible due to the disposition of a substantial portion of IGC's assets. Should
this prove to be the case, it is management's view that after the Restructuring
IGC should be liquidated over a reasonable period of time during which IGC will
be able to satisfy its existing obligations including those relating to the
wetlands litigation. Accordingly, we propose to liquidate IGC in the event that
it is no longer possible to continue its listing on the American and Pacific
exchanges. Pending completion of the liquidation, we would expect IGC Units to
trade in the over-the-counter market. However, the liquidation process does not
preclude the possibility of IGC management soliciting offers to purchase all
outstanding IGC Units or of IGC offering to redeem outstanding Units following a
delisting.

We encourage you to read carefully this Information
Statement/Prospectus. The Restructuring is subject to the approval of the IGC
Unitholders. Attached to the accompanying Information Statement/Prospectus is a
form of Written Consent of the IGC Unitholders (the "Consent") for the
authorization and approval of the Restructuring.

THE BOARD OF DIRECTORS OF INTERSTATE GENERAL MANAGEMENT CORPORATION,
IGC'S MANAGING GENERAL PARTNER, BY UNANIMOUS VOTE, HAS APPROVED THE
RESTRUCTURING AND RECOMMENDS THAT THE IGC UNITHOLDERS EXECUTE CONSENTS APPROVING
THE RESTRUCTURING.

Please complete, sign, date and return the enclosed Consent as soon as
possible and, in any event, no later than , 1998.

We expect the Restructuring to be approved on , 1998,
and carried out shortly thereafter.

Sincerely,

James J. Wilson
Chairman and Chief
Executive Officer

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Subject to completion, dated , 1997

Information Statement/Prospectus

Distribution of up to 5,250,000 Common Shares
of
American Community Properties Trust
to the
Unitholders of Interstate General Company L.P.
________________

This Prospectus relates to a proposal to transfer the principal real
estate assets and operations of Interstate General Company L.P. ("IGC") to
American Community Properties Trust ("ACPT") and to distribute to the partners
of IGC, including holders (the "IGC Unitholders") of Class A Units of IGC ("IGC
Units"), all of the common shares of beneficial interest of ACPT (the "Common
Shares").

The purpose of these transactions is to establish ACPT as an
independent, publicly traded entity the principal income of which is dividends
from corporations controlled by ACPT. ACPT will not have any operating income.
ACPT was formed as a real estate investment trust under Article 8 of the
Maryland Corporations and Associations Law (the "Maryland Trust Law") but is
expected to be taxed as a partnership. Under the Maryland Trust Law, at least
75% of the value of ACPT's assets must be held, directly or indirectly, in real
estate assets, mortgages and mortgage related securities, government securities,
and cash and cash equivalent items.

ACPT is expected to be more attractive to investors generally, and to
institutional investors such as pension funds and mutual funds in particular,
than is IGC as a master limited partnership. ACPT will not have any interest in
American Family Homes, Inc. ("AFH") or Interstate Waste Technologies, Inc.
("IWT"), which will continue to be held by IGC. To enhance its prospects, the
Caribbean operations of IWT have been transferred to a separate company, Caribe
Waste Technologies, Inc. ("CWT"), the common stock of which will be held in a
trust for the benefit of IGC Unitholders (the "CWT Trust"). In addition, IGC
will retain the properties in St. Charles, Maryland, that currently are the
subject of wetlands litigation, certain parcels of land in Pomfret, Maryland,
St. Mary's County, Maryland and Prince William County, Virginia, a 50% interest
in a partnership that owns land in Brandywine, Maryland, all of the voting stock
of HDA Management Corporation ("HDAMC"), and fractional interests in Housing
Development Associates S.E. ("HDA"), Chastleton Apartment Associates
("Chastleton") and Coachman's L.P. IGC also will retain a note (the "LDA Note")
in the amount of $9.03 million payable by Land Development Associates, S.E.,
ACPT's affiliate that holds land development assets in Puerto Rico.

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor offers
to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful; prior
to registration or qualification under the securities laws of any such State.

The distribution of Common Shares (the "Distribution") will be
undertaken on or about , 1998, following completion of the
transfer of assets to ACPT (the "Asset Transfers"), to IGC Unitholders of record
on , 1998 (the "Record Date") on the basis of one Common Share for every
two IGC Units held, as well as to the general partners of IGC, Interstate
General Management Corporation ("IGMC") and Interstate Business Corporation
("IBC"), in accordance with their respective 1/3% and 2/3% general partnership
interests. No consideration will be required to be paid by IGC Unitholders to
receive Common Shares, nor will they be required to surrender or exchange IGC
Units in order to receive Common Shares. ACPT intends to apply for listing of
the Common Shares on the American Stock Exchange (the "AMEX") and the Pacific
Stock Exchange (the "PSE").

IGC will seek to continue the listing of the IGC Units on the AMEX and
the PSE, which may include a reverse split with respect to the outstanding IGC
Units. Continued listing may not be possible, however, due to the disposition
of a substantial portion of IGC's assets as a result of the Asset Transfers and
the Distribution. If either listing is terminated, IGC's managing general
partner, IGMC, proposes that IGC be dissolved and liquidated over a reasonable
period that will permit IGC to discharge its liabilities including obligations
relating to the wetlands matter (the "Liquidation"). However, the liquidation
process does not preclude the possibility of IGC management soliciting offers to
purchase all outstanding IGC Units or of IGC offering to redeem outstanding IGC
Units following a delisting.

This Prospectus is also an Information Statement which, together with
a form of Written Consent of IGC Unitholders, is being furnished to IGC
Unitholders in connection with the solicitation by IGMC of written consents for
the authorization and approval of the proposed Asset Transfers, the Distribution
and, in the event IGC is delisted from the AMEX or PSE, the Liquidation
(collectively, the "Restructuring").

On , 1998, the last reported sale price of the IGC Units
on the AMEX was $ per IGC Unit.

The Information Statement/Prospectus does not cover resales of ACPT
Common Shares received by IGC Unitholders in the Restructuring, and no person is
authorized to make use of this Information Statement/Prospectus in connection
with any such resale.

______________________________

This Information Statement/Prospectus and the accompanying form of
Written Consent are first being mailed to IGC Unitholders on or about
, 1998. A Written Consent may be revoked at any time prior to the time the
approval of the Restructuring becomes effective. See "The IGC Consent
Solicitation -- Voting, Approval Date and Revocation of Consent."

-2-

SEE "RISK FACTORS" ON PAGE 26 FOR CERTAIN FACTORS RELEVANT TO THE
RESTRUCTURING AND INVESTMENT IN THE COMMON SHARES, INCLUDING:

. ABSENCE OF DISSENTERS' APPRAISAL RIGHTS; ALL IGC UNITHOLDERS WILL
BE BOUND BY THE VOTE OF THE HOLDERS OF A MAJORITY OF THE
OUTSTANDING IGC UNITS AND A MAJORITY OF THE VOTES CAST BY IGC
UNITHOLDERS NOT AFFILIATED WITH THE FAMILY OF JAMES J. WILSON
(THE "WILSON FAMILY").

. ABSENCE OF ANY PUBLIC MARKET FOR COMMON SHARES PRIOR TO THE
DISTRIBUTION.

. THE PRICES AT WHICH THE COMMON SHARES AND IGC UNITS TRADE AFTER
THE DISTRIBUTION MAY BE HIGHER OR LOWER THAN THE PRICES AT WHICH
THE IGC UNITS TRADED BEFORE THE DISTRIBUTION.

. CERTAIN TRANSACTIONS INVOLVED IN THE RESTRUCTURING WILL RESULT IN
THE IMPOSITION OF TAX, AND THE INCOME OF CERTAIN ACPT
SUBSIDIARIES WILL BE SUBJECT TO TAXATION.

. TAXATION OF AN ACPT SUBSIDIARY AS A CORPORATION IF IT FAILS TO
QUALIFY AS A REIT.

. LIMITATION ON PERCENTAGE OWNERSHIP OF COMMON SHARES AND OTHER
TRANSFER RESTRICTIONS.

. CONFLICTS OF INTEREST ARISING OUT OF RELATIONSHIPS WITH CERTAIN
ACPT SHAREHOLDERS AND MEMBERS OF MANAGEMENT.

. POSSIBLE DELISTING OF IGC UNITS FROM THE AMEX OR PSE.

. POSSIBLE LIQUIDATION OF IGC.

. POSSIBLE EFFECT OF PROVISIONS IN ACPT'S ORGANIZATIONAL DOCUMENTS
THAT MAY HAVE THE EFFECT OF DISCOURAGING A CHANGE IN CONTROL.

____________________________

-3-

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

____________________________

The date of this Information Statement/Prospectus is , 1998.

-4-

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN OR INCORPORATED BY REFERENCE INTO
THIS INFORMATION STATEMENT/PROSPECTUS IN CONNECTION WITH THE OFFERING OF
SECURITIES MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ACPT OR IGC. NEITHER THE
DELIVERY OF THIS INFORMATION STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF THE
COMMON SHARES OFFERED HEREBY SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF ACPT OR IGC SINCE THE DATE
HEREOF OR THAT THE INFORMATION SET FORTH OR INCORPORATED BY REFERENCE HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS INFORMATION
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO PURCHASE, ANY SECURITIES IN ANY JURISDICTION IN WHICH, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION OF AN OFFER.

AVAILABLE INFORMATION

IGC is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by IGC can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's Regional Offices at Seven World Trade Center, 13th
Floor, New York, New York 10048 and CitiCorp. Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60621-2511. Copies of such material can be
obtained by mail from the Public Reference Section of the Commission at 450 West
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such reports,
proxy statements and other information may also be obtained from the web site
that the Commission maintains at http://www.sec.gov. In addition, reports,
proxy statements and other information concerning IGC may be inspected at the
offices of the American Stock Exchange, Inc., 86 Trinity Place, New York, New
York 10006-1829.

Reports, proxy statements and other information concerning IGC may
also be obtained electronically through a variety of databases, including, among
others, the Commission's Electronic Data Gathering and Retrieval ("EDGAR")
program, Knight-Rider Information Inc., Federal Filing/Dow Jones and
Lexis/Nexis.

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ACPT has filed with the Commission a Registration Statement on Form S-
4 (together with all amendments, supplements and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Common Shares to be issued pursuant to
the Restructuring. This Information Statement/Prospectus does not contain all
of the information set forth in the Registration Statement, certain parts of
which have been omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement. Any statements contained herein concerning the
provisions of any document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission are not necessarily complete, and in each
instance reference is made to the copy of such document so filed. Each such
statement is qualified in its entirety by such reference.

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Table of Contents

PAGE
----

Available Information........................................................ 5

Summary......................................................................14
Overview................................................................14
Recommendation of the Board of Directors of IGMC........................15
Solicitation of Consents................................................15
Principal Advantages of the Restructuring...............................16
Broad Market for Common Shares than for IGC Units..................16
No History of Wetlands Litigation..................................16
No Adverse Financial Effects from AFH and IWT......................16
Simplified Tax Reporting...........................................16
Enhanced Financing Opportunities...................................16
Election of Trustees by Shareholders...............................17
Principal Disadvantages of the Restructuring............................17
Possible Delisting of IGC Units; Liquidation.......................17
No Distributions to IGC Unitholders................................17
Tax Liabilities....................................................17
Restrictions on Accumulation of Common Shares......................18
Mechanics of the Restructuring..........................................18
The Asset Transfers................................................18
The Distribution...................................................19
Assets Retained by IGC.............................................19
Possible Liquidation of IGC.............................................19
Background of Restructuring; Consideration of Alternatives..............20
The Private Offering....................................................20
The Exchange Offer......................................................20
No Dissenters' Appraisal Rights.........................................20
Tax Consequences of the Restructuring for U.S. Unitholders
and Shareholders...................................................21
Tax Consequences of the Restructuring for Puerto Rico
Unitholders and Shareholders...........................................21
Comparative Rights of IGC Unitholders and Shareholders..................21
Summary of Selected Historical and Pro Forma
Financial Information..............................................23

Risk Factors and Other Considerations........................................25
Restructuring Risks.....................................................25
No Dissenters' Appraisal Rights....................................25
Control of ACPT....................................................25
Conflicts of Interest..............................................25
Absence of Existing Trading Market for Common Shares...............26

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Limited Trading Market for IGC Units; Possible
Liquidation.........................................................26
Change in Value of Securities............................................26
Failure of American Rental to Qualify as a REIT..........................26
Antitakeover Effects.....................................................27
Potential Effects of Issuance of Additional Shares.......................27
Dependence on Key Personnel; Withdrawal of James J.
Wilson from Management..............................................28
Change in the Rights of IGC Unitholders..................................28
Possible Adverse Effect of Market Interest Rates on
Price of Common Shares..............................................29
ERISA Risks..............................................................29
Approvals Required to Effect the Restructuring...........................29

Real Estate Financing Risks...................................................30
Rising Interest Rates....................................................30
Debt Financing and Potential Adverse Effects on Cash
Flows and Distributions.............................................30
Construction Loans and Risks Associated with Sale or
Foreclosure.........................................................30
Changes in Policies Without Shareholder Approval; No
Limitation of Debt..................................................31

Real Estate Investment Risk...................................................31
General Risks............................................................31
Operating Risks..........................................................32
Development of St. Charles...............................................33
Termination of HUD Subsidiary Contracts; New
Apartment Development...............................................33
Competition..............................................................34
Possible Environmental Liabilities.......................................34
Effect of Americans with Disabilities Act Compliance
on Cash Flow and Distribution.......................................35
Change in Laws...........................................................35
Uninsured Loss...........................................................36
Risks Involved in Property Ownership Through
Partnerships and Joint Ventures.....................................36
Risks Associated with Illiquidity of Real Estate.........................36
Risks Associated with Acquisition, Redevelopment,
Development and Construction

Tax Related Risks.............................................................37
Asset Transfers..........................................................37
Corporate Level Taxes....................................................38

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Classification of American Rental as a REIT.........................38
Classification of IGP Group for Puerto Rico Tax
Purposes.......................................................39
Possible Tax Liabilities in Excess of Cash
Distributions..................................................39
Classification of ACPT as a Partnership.............................39
Section 704(c) Allocations and Section 754 Election.................40
Changes in Law......................................................40
Other Income Tax Considerations.....................................41

The IGC Consent Solicitation..................................................41
Matters Presented for Consent............................................41
Recommendation of the Board of Directors of IGMC.........................41
Record Date and Outstanding IGC Units....................................41
Required Consent.........................................................42
Voting, Approval Date and Revocation of Consent..........................42
Solicitation of Consents; Solicitation Expenses..........................43
No Dissenters' Appraisal Rights..........................................43

Organizational Charts.........................................................44
The Restructuring.............................................................47
Reasons for the Restructuring............................................47
The Asset Transfers......................................................47
The Distribution.........................................................49
Relationship between IGC and ACPT after the Distribution.................50
NationsBank Letter of Credit.............................................51
Assets Retained by IGC...................................................52
The Possible Liquidation of IGC..........................................52
Approvals Required to Effect the Restructuring...........................53
Background of the Restructuring; Consideration of
Alternatives............................................................53
The Exchange Offering....................................................55
The Private Offering.....................................................57
Approvals Required to Effect the Restructuring...........................57
Principal Advantages of Restructuring....................................57
Principal Disadvantages of Restructuring.................................58

ACPT Pro Forma Combined Financial Data........................................60
ACPT..........................................................................67

Distribution Policy...........................................................67

Capitalization................................................................68

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Market Prices and Distributions.............................................. 69

Selected Combined Financial and Operating Data of ACPT....................... 71

Management's Discussion and Analysis of Results of
Operations and Financial Condition...................................... 73
General................................................................. 73
For the Six Months Ended June 30, 1997 and 1996......................... 73
For the Years Ended December 31, 1996 and 1995.......................... 75
For the Years Ended December 31, 1995 and 1994.......................... 76
Liquidity and Capital Resources......................................... 77
Funds from Operations................................................... 78

Business and Properties of ACPT.............................................. 80
Rental Apartment Properties............................................. 80
United States...................................................... 80
Puerto Rico........................................................ 82
Government Regulation.............................................. 85
Competition........................................................ 85
Condominium Conversion.................................................. 85
Puerto Rico........................................................ 86
United States...................................................... 86
Community Development................................................... 86
St. Charles........................................................ 88
Parque Escorial.................................................... 89
Commercial Rental Properties............................................ 90
Property Management..................................................... 90
Homebuilding in Puerto Rico............................................. 90
Policies With Respect to Certain Activities............................. 91

Legal Proceedings............................................................ 93
ACPT.................................................................... 93
IGC..................................................................... 93
Wetlands Litigation................................................ 93
Other Litigation................................................... 94

IGC Pro Forma Combined Financial Data........................................ 95

IGC After the Restructuring..................................................101
No Change in Partnership Structure......................................101
Description of IGC's Continuing Business................................101
Interstate Waste Technologies...........................................102
American Family Homes...................................................103
Capital Resources of IGC Following the Restructuring....................103

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Listing of IGC Units................................................. 103
Creditors Rights..................................................... 104

Management................................................................ 105
Funding for Continued Operations..................................... 105
Management of IGC.................................................... 105
Board of Trustees.................................................... 106
Trustees and Executive Officers...................................... 108
Committees of the Board of Trustees.................................. 109
Compensation of Trustees............................................. 109
Executive Compensation............................................... 109
Employment Agreements................................................ 109
Share Incentive Plans................................................ 110
Treatment of IGC Options and Unit Appreciation Rights................ 111
Retirement Plans..................................................... 112

Ownership of Common Shares................................................ 112

Transactions with Related Parties......................................... 114
Service Agreement.................................................... 114
Consulting Agreement................................................. 114
Banc One Financing................................................... 114
Joint Litigation with Charles County................................. 115
Services of Whitman, Requardt........................................ 115
Nationsbank Letter of Credit for Chastleton.......................... 115
Other Transactions................................................... 116
Income Tax Considerations................................................. 116
Federal Income Tax Considerations.................................... 116
Federal Income Tax Classification of ACPT....................... 117
Federal Income Tax Classification of American Rental............ 121
Federal Income Tax Classification of American Land
and American Management.................................... 131
Federal Income Tax Classification of IGP Group.................. 131
Federal Income Tax Consequences of the Distribution............. 132
Federal Income Taxation of ACPT and Shareholders................ 133
Federal Tax Consideration with Respect to the
Liquidation of IGC.............................................. 144
Certain State Income Tax Consequences and Puerto Rico
Income Tax Considerations....................................... 145
Certain State Tax Considerations..................................... 145
Certain Puerto Rico Income Tax Consequences.......................... 145
Puerto Rico Income Tax Classification of ACPT and
IGP Group.................................................. 146
Puerto Rico Income Taxation of the Distribution................. 146

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Puerto Rico Income Taxation of ACPT............................. 147
Puerto Rico Income Taxation of IGP Group........................ 148
Puerto Rico Counsel's Opinions of Puerto Rico................... 148
Taxation of ACPT and IGP Group............................. 149
Certain Puerto Rico Income Tax Consequences to
Shareholders.............................................. 149

Description of Shares of Beneficial Interest.............................. 150
General.............................................................. 150
Common Shares........................................................ 151
Preferred Shares..................................................... 152
Transfer Agent....................................................... 152

Certain Provisions of Maryland Law and of ACPT's
Declaration of Trust and Bylaws...................................... 152
Classification of the Board of Trustees.............................. 152
Independent Trustees................................................. 153
Removal of Trustees.................................................. 153
Required Minimum Distributions....................................... 153
Supermajority Voting................................................. 154
Business Combinations................................................ 154
Control Share Acquisitions........................................... 155
Amendment of Declaration of Trust and Bylaws......................... 156
Limitation of Liability and Indemnification.......................... 156
Dissolution of ACPT.................................................. 157
Possible Antitakeover Effect of Certain
Provisions of Maryland Law and of the
Declaration of Trust and Bylaws................................. 157
Maryland Asset Requirements.......................................... 157

Comparative Rights of IGC Unitholders and Shareholders.................... 158
General.............................................................. 158
Management........................................................... 158
Required Minimum Distributions....................................... 158
Voting Rights........................................................ 159
Meetings............................................................. 159
Amendment of Declaration of Trust, Bylaws, and
Partnership Agreement........................................... 159
Limited Liability.................................................... 160
Dissolution of the Partnership and ACPT.............................. 160
Liquidation Rights................................................... 160
Limitations of Liability of General Partners and Trustees............ 161
Indemnification...................................................... 161
Ownership Limitations................................................ 161

-12-

Legal Matters............................................................. 161

Appraisals................................................................ 162
Properties Retained by IGC........................................... 162
Properties Transferred to ACPT....................................... 164
General.............................................................. 167

Reports to Shareholders................................................... 168

Glossary.................................................................. 168

Financial Statements...................................................... F-1

-13-

- --------------------------------------------------------------------------------

SUMMARY

The following is a summary of certain information contained elsewhere
in this Information Statement/Prospectus. Reference is made to, and this Summary
is qualified in its entirety by, the more detailed information contained
elsewhere in this Information Statement/Prospectus. As used in this Information
Statement/Prospectus, the term "IGC" means Interstate General Company L.P., a
Delaware limited partnership, the term "ACPT" means American Community
Properties Trust, a Maryland investment trust, the term "IGMC" means Interstate
General Management Corporation, a Delaware corporation, and the managing general
partner of IGC, the term "IBC" means Interstate Business Corporation, a Delaware
corporation and a general partner of IGC. Unless otherwise defined herein,
capitalized terms used in this Summary have the meanings ascribed to them
elsewhere in this Information Statement/Prospectus. IGC Unitholders are urged to
read this Information Statement/Prospectus in its entirety.

OVERVIEW

This Information Statement/Prospectus relates to a proposal to
transfer the principal real estate operations and assets of IGC to ACPT and to
distribute to the partners of IGC, including the IGC Unitholders, all of the
Common Shares of ACPT. ACPT was formed as a real estate investment trust under
Article 8 of the Maryland Trust Law but is expected to be taxed as a
partnership. Under the Maryland Trust Law, at least 75% of the value of ACPT's
assets must be held, directly or indirectly, in real estate assets, mortgages
and mortgage related securities, government securities, and cash and cash
equivalent items. The purpose of these transactions is to create an attractive
investment vehicle the principal income of which is dividends from corporations,
which should be a more attractive investment for pension funds and mutual funds
than is IGC as a master limited partnership. ACPT will not have any operating
income. Management expects that ACPT will have greater access to capital markets
than IGC has had. In addition, ACPT will not be burdened with the operating
losses and capital needs of AFH and IWT or the IGC wetlands litigation. The
contemplated transactions will include (i) the transfer to ACPT of substantially
all of IGC's U.S. community development, investment apartment property, property
management services assets, its similar assets in Puerto Rico and its Puerto
Rico homebuilding operations (the "Asset Transfers"), (ii) the distribution of
all of the Common Shares of ACPT to the partners of IGC, including the IGC
Unitholders (the "Distribution") and (iii) if necessary under the circumstances
described herein, the liquidation of IGC through the orderly disposition over
time of its remaining assets (the "Liquidation"). These transactions are
sometimes collectively referred to herein as the "Restructuring."

Concurrently, ACPT through its subsidiaries, American Housing and IGP,
will offer to acquire all of the limited partnership interests held by investors
in the U.S. and Puerto Rico housing partnerships, respectively (the "Exchange
Offer"). In return, the investors will receive equity interests in American
Housing and IGP that will be convertible into Common Shares of ACPT. The
Restructuring is not conditioned upon completion of the Exchange Offer, but the
Exchange Offer is conditioned on completion of the Asset Transfers and the
Distribution. In addition, in connection with the Restructuring ACPT will seek
to raise up to $40 million in additional equity capital through a private
offering of preferred shares (the "Private Offering"). See "The Restructuring --
The Private Offering."

- --------------------------------------------------------------------------------

-14-

- --------------------------------------------------------------------------------

For a graphical depiction of the transactions constituting the
Restructuring, see "Organizational Charts."

RECOMMENDATION OF THE BOARD OF DIRECTORS OF IGMC.

The Board of Directors of IGMC, by unanimous vote, has approved the
Restructuring, believes that the terms of the Restructuring are in the best
interests of the IGC Unitholders, and recommends that IGC Unitholders execute
Consents approving the Restructuring. See "The IGC Consent Solicitation --
Recommendation of the Board of Directors of IGMC."

SOLICITATION OF CONSENTS.

IGMC is soliciting the consent of the IGC Unitholders to the
Restructuring and has fixed the close of business on , 1998 as the
record date for determination of IGC Unitholders entitled to vote on the
Restructuring. The affirmative consent of (i) the holders of a majority of all
of the issued and outstanding IGC Units, including IGC Units controlled by
members of the Wilson Family, and (ii) holders of a majority of the Units voted
on the Restructuring other than Units controlled by members of the Wilson
Family, are required to approve the Restructuring. See "The IGC Consent
Solicitation -- Required Consent."

No meeting of IGC Unitholders will be held in order to vote on the
Restructuring. IGC Unitholders may vote on the Restructuring only by completing
----
and returning the enclosed consent card. IGMC has fixed the close of business
on , 1998 (the "Approval Date") as the date on which duly completed
consent cards must be received by IGMC in order for the vote represented by such
consent cards to be effective. Consent cards received by IGMC after the
Approval Date will not be counted. If a consent card is signed and returned by
the Approval Date without voting instructions, the holder of all IGC Units
represented by the consent card will be considered to have consented to the
approval of the Restructuring. IGMC may extend the Approval Date at its
discretion. See "The IGC Consent Solicitation -- Voting, Appraisal Date and
Revocation of Consent."

Any consent card completed and returned may nevertheless be revoked by
the person giving it by delivering notice of revocation of such consent, or a
duly executed consent card bearing a later date, to the Secretary of IGMC at any
time prior to the Approval Date. See "The IGC Consent Solicitation -- Voting,
Approval Date and Revocation of Consent."

Approval of the Restructuring will constitute the approval of each
component of the Restructuring -- the Asset Transfers, the Distribution, and, if
necessary, the Liquidation -- and no separate vote will be taken on any
individual component. See "The IGC Consent Solicitation."

- --------------------------------------------------------------------------------

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- --------------------------------------------------------------------------------

PRINCIPAL ADVANTAGES OF THE RESTRUCTURING.

Broader Market for Common Shares than for IGC Units.
---------------------------------------------------

Limited partnership interests which require holders to recognize trade
or business income and losses from partnership operations are generally not
regarded as attractive investments for institutions such as mutual funds and
pension funds. ACPT, as a holding company, will receive income principally in
the form of dividends and distributions from its subsidiaries, and its Common
Shares should be a more attractive investment for certain investors than IGC
Units even though ACPT is expected to be treated as a partnership for federal
income tax purposes. Enlarging the group of potential investors for ACPT Common
Shares should produce a more liquid market than currently exists for IGC Units.

No History of Wetlands Litigation.
---------------------------------

IGC, which was convicted of federal Clean Water Act violations (which
conviction is currently under appeal), will retain the four parcels of land that
were involved in that litigation and the one additional parcel that was the
subject of a civil suit that was dismissed without prejudice (collectively, the
"Wetlands Properties"). None of the land to be transferred to ACPT was so
implicated and ACPT is not a party to such proceedings. See "Legal
Proceedings -- IGC" and "IGC After the Restructuring -- Creditors Rights."

No Adverse Financial Effects from AFH and IWT.
---------------------------------------------

AFH and IWT have had operating losses and capital needs that have had
adverse effects upon IGC's operating results and financial condition. These are
expected to continue for the foreseeable future. Both AFH and IWT will remain as
subsidiaries of IGC and thus their financial results will not affect ACPT. ACPT
will have no obligation to provide financial support to AFH and IWT. See "IGC
After the Restructuring -- Description of IGC's Continuing Business."

Simplified Tax Reporting.
------------------------

Because ACPT will derive income principally from dividends from
corporations, the items to be reported for federal tax purposes by ACPT
Shareholders generally will be limited to dividends and credits for withholding
taxes paid by IGP Group in Puerto Rico. Shareholders will not have to report
ordinary income or losses from trade or business activity as is currently the
case with IGC. See "Income Tax Considerations -- Federal Income Tax
Considerations -- Federal Income Tax Classification of ACPT."

Enhanced Financing Opportunities.
--------------------------------

The removal of the adverse financial effects of AFH and IWT and the
absence of involvement in the wetlands litigation should provide ACPT with
opportunities to obtain financing for its operations from banks and other
lenders on terms that generally are more favorable than those currently
available to IGC.
- --------------------------------------------------------------------------------

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- --------------------------------------------------------------------------------

Election of Trustees by Shareholders.
------------------------------------

ACPT will be managed by its Board of Trustees, the members of which
will be elected by ACPT shareholders. ACPT also will hold annual meetings of
shareholders. See "Comparative Rights of IGC Unitholders and Shareholders."

See "The Restructuring -- Principal Advantages of the Restructuring."

PRINCIPAL DISADVANTAGES OF THE RESTRUCTURING.

Possible Delisting of IGC Units; Liquidation.
--------------------------------------------

IGC intends to take steps to continue the listing of the IGC Units on
the AMEX and the PSE following the Restructuring, which may include a reverse
split with respect to the outstanding IGC Units that may have the effect of
increasing the trading price of IGC Units. However, continued listing may not be
possible due to the disposition of a substantial portion of IGC's assets. If
either listing is terminated, IGMC proposes that, as part of the Restructuring,
IGC be dissolved and liquidated. Consent to the Restructuring will also
constitute approval of the Liquidation in the event of a delisting by either
exchange. The period of the Liquidation of IGC would be expected to last for a
period of time no shorter than the period during which IGC remains on probation
as a result of the wetlands litigation (if such litigation is not ultimately
resolved in IGC's favor) and to enable IGC to satisfy obligations to its
creditors. During the Liquidation period, IGC Units would be expected to trade
on the over-the-counter market. However, the liquidation process does not
preclude the possibility of IGC management soliciting offers to purchase all
outstanding IGC Units or of IGC offering to redeem outstanding IGC Units
following a delisting. See "Risk Factors -- Limited Trading Market for IGC;
Possible Liquidation" and "The Restructuring -- Possible Liquidation of IGC."

No Cash Distributions to IGC Unitholders.
----------------------------------------

Unless IGC prevails in its appeal of the wetlands conviction, or IWT
receives one or more contracts to develop a waste treatment facility, the
operations and assets remaining with IGC after the Restructuring may not
generate significant profits or enable IGC to make quarterly distributions to
the IGC Unitholders. It is possible that IGC may recognize taxable income
without generating sufficient cash to enable IGC to make a distribution to the
IGC Unitholders in an amount at least equal to the IGC Unitholder's tax
liability arising from their share of IGC taxable income.

Tax Liabilities.
---------------

- --------------------------------------------------------------------------------

-17-

- --------------------------------------------------------------------------------

in gain will be recognized on this transfer. Each IGC Unitholder will recognize
that IGC Unitholder's allocable share of such gain. Management is continuing to
explore ways to minimize or eliminate the amount of gain to be recognized on the
Asset Transfers. See "Income

Tax Considerations -- Federal Income Tax Considerations -- Federal Income Tax
Classification of IGP Group -- Asset Transfers."

In addition, the income of certain ACPT corporate subsidiaries will be
subject to taxation at the subsidiary level.

Restrictions on Accumulation of Common Shares.
---------------------------------------------

In order to preserve American Rental's qualification as a REIT, ACPT's
Declaration of Trust and Bylaws provide that a person (other than certain
existing IGC Unitholders) may not directly or indirectly own more than 2% of the
outstanding Common Shares. See "Income Tax Considerations -- Federal Income Tax
Classification of American Rental."

See "The Restructuring -- Principal Disadvantages of the
Restructuring."

MECHANICS OF THE RESTRUCTURING.

The Asset Transfers.
-------------------

ACPT acts as a self-managed holding company that owns all of the
outstanding equity interests in American Land, American Management, and IGP
Group and all of the common stock of American Rental. Through the Asset
Transfers, IGC will transfer its principal real estate operations and assets to
ACPT and these subsidiary entities. American Rental, through American Housing,
will acquire IGC's partnership interests in United States investment apartment
properties and its land in the United States presently intended for development
as apartment properties. American Rental is expected to be taxed as a REIT.
American Management will acquire IGC's United States property management
services operations. American Management will be taxed as a corporation.
American Land will acquire IGC's principal United States community development
assets and operations, principally 4,500 acres of land in St. Charles, Maryland
that is being developed as a planned community and IGC's interest in a
partnership that is entitled to receive certain fees resulting from the 1988
sale of a cable television company. American Land is a Maryland corporation and
will be taxed as a corporation. IGP Group will acquire IGC's interests in its
affiliate IGP, which will continue to hold its partnership interests in Puerto
Rico investment apartment properties, and in Puerto Rico management services,
community development and homebuilding assets. IGP Group intends to qualify as a
Puerto Rico special partnership that will be taxed as a corporation for U.S. tax
purposes and as a partnership for Puerto Rico income tax purposes. The general
partner interest in IGP currently held by James J. Wilson will be transferred to
a subsidiary of ACPT. As a result, ACPT will own indirectly 100% of the
partnership interests in IGP. See "The Restructuring --The Asset Transfers" and
"Business and Properties of ACPT." See "Income Tax Considerations -- Federal
Income Tax Considerations -- Federal Income Tax Classification of IGP Group --
Asset Transfers."

- --------------------------------------------------------------------------------

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- --------------------------------------------------------------------------------

The Distribution.
----------------

Following the Asset Transfers, ACPT will issue to IGC sufficient
Common Shares to enable IGC to make the Distribution. In the Distribution, IGC
will distribute all Common Shares held by it to the IGC Unitholders and its
general partners -- IGMC and IBC -- pro rata in accordance with their percentage
partnership interests in IGC. Each IGC Unitholder will receive one Common Share
for every two IGC Units held. The aggregate of approximately 5,200,000 Common
Shares distributed to IGC Unitholders will equal 99% of the Common Shares
outstanding immediately following the Distribution, corresponding to the IGC
Unitholders' aggregate 99% partnership interest in IGC. Common Shares
representing the remaining 1% of such Common Shares will be distributed to IGMC
and IBC in accordance with their respective 1/3% and 2/3% partnership interests
in IGC, with IGMC receiving approximately 17,500 Common Shares and IBC receiving
approximately 34,500 Common Shares. See "The Restructuring -- The Distribution."

Assets Retained by IGC.
----------------------

After the Restructuring, IGC will continue to own certain assets that
in management's view do not fit ACPT's business plan. These include the Wetlands
Properties, certain parcels of land in Pomfret, Maryland, the Westbury community
in St. Mary's County, Maryland ("Westbury"), and the Montclair community in
Prince William County, Virginia ("Montclair"), a 50% interest in Brandywine
Investment Associates L.P., which owns land in Brandywine, Maryland, the LDA
Note, all of the shares of AFH and IWT, all of the voting stock of HDAMC, as
well as fractional interests in HDA, Chastleton, and Coachman's L.P., and
beneficial interest in the CWT Trust (collectively the "Retained Assets"). As a
result of the wetlands conviction, the Wetlands Properties are encumbered by an
obligation to impose a conservation easement and therefore may not be developed
at present. Any encumbrances will be removed if the wetlands conviction is
reversed. See "IGC After the Restructuring -- Description of IGC's Continuing
Business."

POSSIBLE LIQUIDATION OF IGC.

Management of IGC believes that the assets retained by IGC after the
Restructuring will have substantial value that will permit IGC to finance its
continuing operations. IGC expects to require approximately $3 million in
financing during 1998. If this financing is obtained, IGC intends to take steps
to continue the listing of the IGC Units on the AMEX and the PSE. Such actions
may include a reverse split with respect to the outstanding IGC Units that may
have the effect of increasing the trading price of IGC Units. Despite obtaining
financing sufficient to fund IGC's continuing operations, continued listing may
not be possible due to the disposition of a substantial portion of IGC's assets.
Should this prove to be the case, it is management's view that IGC should be
liquidated after the Restructuring. Accordingly, management proposes to
liquidate IGC in the event that it is no longer possible to continue its listing
on the American and Pacific exchanges. However, the final consummation of the
Liquidation and dissolution of IGC would be subject to the relisting of IGC
Units on the AMEX and PSE in the event that the wetlands litigation is
ultimately resolved in IGC's favor. The period of the Liquidation of IGC would
be expected to last for a period no shorter than the period of time during which
IGC remains on probation as a result of the wetlands litigation (if such
litigation is not ultimately resolved in IGC's favor) and to enable IGC to
satisfy obligations to its creditors. During the Liquidation period, IGC Units
would be expected to trade on the

- --------------------------------------------------------------------------------

-19-

- --------------------------------------------------------------------------------

over-the-counter market. However, the liquidation process does not preclude the
possibility of IGC management soliciting offers to purchase all outstanding IGC
Units or of IGC offering to redeem outstanding IGC Units following a delisting.
See "The Restructuring -- Possible Liquidation of IGC."

BACKGROUND OF THE RESTRUCTURING; CONSIDERATION OF ALTERNATIVES.

For a description of the background of the Restructuring, see "The
Restructuring -- Background of the Restructuring; Consideration of
Alternatives."

THE PRIVATE OFFERING.

In connection with the Restructuring, ACPT will seek to raise up to
$40 million in additional equity capital through the Private Offering of
preferred shares. Proceeds from the Private Offering would be used to pay down
existing bank debt and for working capital. The terms of the preferred shares
will be negotiated with purchasers, but they may include rights to preferred
distributions, cumulative distributions, and/or liquidation preferences. The
preferred shares also may be convertible into Common Shares at a negotiated
conversion ratio. The Private Offering, if completed, would result in dilution
of the percentage interest of all ACPT shareholders including the Wilson Family,
whose percentage ownership would likely be reduced below 40%. Regardless of the
outcome of the Private Offering, the Wilson Family will take such other actions
as may be necessary to reduce its percentage interest to below 40% in order to
permit American Rental to qualify as a REIT. See "The Restructuring -- The
Private Offering."

THE EXCHANGE OFFER.

Concurrently with the Restructuring, American Rental, through American
Housing, and IGP Group, through IGP, will offer to acquire all of the limited
partnership interests held by investors in the U.S. and Puerto Rico apartment
partnerships. In return, the investors will receive equity interests in American
Housing and IGP Group that will be convertible into Common Shares of ACPT. See
"The Restructuring -- The Exchange Offer."

NO DISSENTERS' APPRAISAL RIGHTS.

Under the Delaware Revised Uniform Limited Partnership Act (the
"Delaware Act") and the Partnership Agreement of IGC, IGC Unitholders who object
to the Restructuring will have no right to seek a judicial appraisal of the fair
value of their IGC Units and to compel IGC to pay such amount in cash in
exchange for their IGC Units as a consequence of the consummation of the
Restructuring, nor will such rights be voluntarily accorded to IGC Unitholders
by IGC. Thus, approval of the Restructuring by the requisite vote of IGC
Unitholders will bind all IGC Unitholders, including those who object. See "The
Restructuring -- No Dissenters' Appraisal Rights."

- --------------------------------------------------------------------------------

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TAX CONSEQUENCES OF THE RESTRUCTURING FOR U.S. UNITHOLDERS AND SHAREHOLDERS.

IGC will recognize approximately $10.6 million in gain for federal tax
purposes as a result of the Asset Transfers, and each IGC Unitholder will
recognize that IGC Unitholder's share of such gain. IGC will not recognize gain
or loss for federal tax purposes upon the Distribution. Following the
Distribution, each Shareholder, in general, will take into account his allocable
share of ACPT's taxable income or loss in computing his individual federal
income tax liability. See "Risk Factors -- Tax Related Risks" and "Income Tax
Considerations."

TAX CONSEQUENCES OF THE RESTRUCTURING FOR PUERTO RICO UNITHOLDERS AND
SHAREHOLDERS.

Puerto Rico Shareholders will recognize income upon the receipt of the
Common Shares and cash distributed in lieu of fractional Shares distributed by
IGC. The receipt of the Common Shares and cash will be taxable at ordinary
income tax rates to the extent of earnings and profits of IGC or as non-taxable
returns of capital or as gain from the sale or exchange of property, depending
upon the circumstances of the distribution.

COMPARATIVE RIGHTS OF IGC UNITHOLDERS AND SHAREHOLDERS.

As a result of the Restructuring, IGC Unitholders will receive Common
Shares of ACPT and will continue to hold IGC Units. ACPT is a Maryland
investment trust, and IGC is a Delaware limited partnership. The following table
compares certain rights of IGC Unitholders currently to rights of holders of
Common Shares if the Restructuring occurs. See "Comparative Rights of IGC
Unitholders and Shareholders." When used in this table, "majority vote" means a
majority of the IGC Units or Common Shares outstanding.

IGC UNITHOLDERS SHAREHOLDERS

RIGHT TO ELECT No right to elect directors of IGMC. Shareholders vote to elect Trustees;
MANAGEMENT IGC Unitholder approval by majority classified Board of Trustees with
vote is required to permit the voluntary staggered three-year terms.
withdrawal of, or admission of a general
partner.

RIGHT TO REMOVE The IGC Unitholders may remove any Shareholders may remove members of
MANAGEMENT general partner, with or without cause, the Board of Trustees for cause by
by majority vote. majority vote and for any reason by
two-thirds vote.

REQUIRED MINIMUM IGC is required to distribute in cash 55% ACPT is required to distribute an
DISTRIBUTION of the net taxable income allocated to amount equal to 45% of net taxable
IGC Unitholders. income allocated to Shareholders less
the amount of certain taxes paid by
ACPT.

OWNERSHIP
LIMITATIONS There is no limitation on the number of No Shareholder (except certain existing
IGC Units that any Unitholder may own. IGC Unitholders) may own more than
2% of the outstanding Common
Shares.

- --------------------------------------------------------------------------------

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- --------------------------------------------------------------------------------

GENERAL VOTING IGC Unitholder approval by majority Shareholder approval by majority vote
RIGHTS REGARDING vote is required for (i) sale of all or is required for (i) a sale of all or
GOVERNANCE substantially all of the assets, (ii) merger substantially all of ACPT's assets, (ii)
or consolidation, and (iii) certain merger or consolidation of ACPT and
amendments to the Partnership (iii) removal of a Trustee for cause.
Agreement, including certain issuances of The Board of Trustees has exclusive
additional limited partnership interests. authority to increase or decrease the
IGMC has exclusive authority to issue aggregate number of Common Shares
IGC Units without limitation as to that the ACPT has authority to issue.
amount.

SUPERMAJORITY VOTING Unanimous vote of IGC Unitholders is A two-thirds vote of Shareholders is
RIGHTS required for certain actions, including required to (i) remove Trustees other
actions that would cause loss of limited than for cause, (ii) amend the
liability, treatment of IGC as a Declaration of Trust (including
corporation for tax purposes, or, except required minimum distribution
in the case of merger or dissolution, provisions) and (iii) dissolve ACPT.
delisting of IGC Units from any national
securities exchange. Approval by two-
thirds vote of IGC Unitholders (excluding
general partners and their affiliates) is
required for reduction of minimum
amount of cash flow required to be
distributed to IGC Unitholders.

DISSOLUTION Requires consent of IGC Unitholders by Requires approval of Shareholders by
majority vote, except for involuntary two-thirds vote.
withdrawal of a general partner.

LIQUIDATION RIGHTS IGC Unitholders share ratably in Shareholders share ratably in any
accordance with percentage interests in assets remaining after satisfaction of
any assets remaining after satisfaction of obligations to creditors and any
obligations to creditors and any liquidation preferences of Preferred
liquidation preferences of preferred Shares.
Units.

These substantive and procedural differences affect the rights of IGC
Unitholders and holders of Common Shares. Specifically, as described in the
table above, ACPT's policies with respect to investments, financings, affiliate
transactions, and certain other activities may be amended or revised from time
to time at the discretion of the Board of Trustees. As a result, although no
such change is currently contemplated, the investment policies of ACPT may be
altered so that ACPT no longer invests in apartment properties.

- --------------------------------------------------------------------------------

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SUMMARY COMBINED HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA

The following table presents summary historical combined financial data
derived from ACPT's audited Combined Financial Statements for the three most
recent years ended December 31, 1996 and unaudited Combined Financial Statements
as of and for the six months ended June 30, 1997, and summary pro forma
condensed combined financial information derived from ACPT's unaudited Pro Forma
Combined Financial Data. ACPT's Combined Financial Statements present the
financial position, results of operations and cash flows of ACPT as if it were a
separate company operating for all the periods presented. The pro forma
financial data set forth below may not necessarily be indicative of the results
that would have been achieved had the transfer and distribution transactions
been consummated as of the date indicated or that may be achieved in the future.
The net asset values set forth below are management's estimate of the fair value
of ACPT's net assets to its beneficial owners. The information in the table
should be read in conjunction with "Selected Historical Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Pro Forma Combined Financial Data" and the Combined Financial
Statements of ACPT included elsewhere herein. ACPT's fiscal year ends on
December 31.

AMERICAN COMMUNITY PROPERTIES TRUST
SUMMARY COMBINED FINANCIAL AND OPERATING DATA
(In thousands, except for per share, lot, acre and unit amounts)

SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31,
-------------------------- -----------------------------------------
PRO FORMA (1) HISTORICAL PRO FORMA (1) HISTORICAL
------------- ---------- ------------- ------------------------
1997 1997 1996 1996 1995 1994
---- ---- ---- ---- ---- ----
(UNAUDITED) (UNAUDITED) (UNAUDITED)

INCOME STATEMENT DATA:
Revenues $ 25,154 $ 13,201 $ 69,615 $ 43,692 $27,363 $34,899
Expenses 23,763 11,390 53,170 26,139 21,500 26,566
Income taxes 645 8 3,760 3,424 1,369 3,304
Minority interest (76) (13) (2,406) (306) (511) (680)
Net income (2) 670 1,790 10,279 12,891 3,983 4,349
Pro forma earnings per share (3) 0.13 0.35 1.98 2.49 0.77 0.85
Pro forma weighted average
shares outstanding (3) 5,180 5,180 5,180 5,180 5,179 5,114

AS OF DECEMBER 31,
AS OF JUNE 30, 1997 1996
----------------------------- ------------------
PRO FORMA (1) HISTORICAL HISTORICAL
------------- ---------- ------------------
(UNAUDITED) (UNAUDITED)

BALANCE SHEET DATA:
Total assets $228,794 $116,958 $121,243
Recourse debt 49,475 39,350 42,482
Total liabilities 224,521 98,442 102,826
Capital 4,273 18,516 18,417

AS OF DECEMBER 31, 1996
---------------------------
(UNAUDITED)

Net asset value ("NAV") (4) $109,694
Pro forma NAV per share (3,4) $ 21.18
Pro forma shares outstanding (3,4) 5,180
NAV assuming Exchange Offer
is completed (4) $141,862
Pro forma NAV per share assuming
Exchange Offer is completed (3,4) $ 21.18
Pro forma shares outstanding
assuming Exchange Offer is
completed (3,4) 6,699

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SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
-------------- ----------------------------------
1997 1996 1995 1994
---- ---- ---- ----
(UNAUDITED)

OTHER FINANCIAL DATA:
Cash flow provided by (used in) -
Operating activities 5,635 15,964 (5,368) 14,421
Investing activities (1,349) (426) 3,635 (3,690)
Financing activities (4,884) (16,777) 4,037 (11,428)

(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)

Funds from operations ("FFO") (5) $ 2,912 $ 15,424 $ 5,462 $ 5,772
Earnings before interest, taxes,
depreciation and amortization
("EBITDA") (6) 6,378 32,351 15,355 16,816

SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
-------------- ----------------------------------
1997 1996 1995 1994
---- ---- ---- ----
(UNAUDITED)

OTHER OPERATING DATA (7):
Rental apartment units managed 8,139 8,139 8,085 8,085
Rental apartment units owned 5,291 5,291 6,155 6,155
Residential lots sold 46 406 113 101
Residential lots transferred to company's
rental property operations -- -- 54 --
Commercial and business park acres 9 5 20 76
Undeveloped acres sold 381 -- 2 20

(1) Reflects the (i) consumation of the Distribution; (ii) the Exchange Offer;
and (iii) closing of the Banc One financing. See "ACPT Pro Forma Financial
Statements."
(2) The net income for 1996 includes a $932,000 reduction for the extraordinary
item - early extinguishment of debt.
(3) Pro Forma earnings per share were based on pro forma shares outstanding as
determined by dividing IGC's weighted average Units outstanding by the
Unitholders' percent ownership, 99%, and dividing the result by two.
(4) Estimated by management based on appraisals of land assets, valuations of
interests in apartment partnerships, management contracts and other assets net
of liabilities, exclusive of accrued income taxes. Such determinations have been
reviewed and considered by Robert A. Stanger & Co. Inc. in connection with the
issuance of the fairness opinion. See "Appraisals" and "The Exchange Offer."
(5) Modified - See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
(6) EBITDA was calculated by adding back to combined net income the interest
expense, provisions for taxes, amortization of interest in cost of sales,
depreciation and amortization and ACPT's share of its unconsolidated
susidiaries' interest expense and depreciation and amortization. EBITDA should
not be considered an alternate to net income, cash flows from operations, or any
other operating or liquidity performance measure prescribed by generally
accepted accounting principals ("GAAP").
(7) See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

- --------------------------------------------------------------------------------

-24-

RISK FACTORS AND OTHER CONSIDERATIONS

Prospective investors in Common Shares should consider a number of
factors that may bear on the value of the Common Shares, the amount of cash
distributions to the Shareholders, and other matters affecting an investment in
Common Shares. These factors include the matters described below.

RESTRUCTURING RISKS

NO DISSENTERS' APPRAISAL RIGHTS.

IGC Unitholders who object to the Restructuring will have no
dissenters' appraisal rights (i.e., the right, instead of receiving Common
----
Shares, to seek a judicial determination of the "fair value" of their IGC Units
and to compel IGC to purchase IGC Units for cash in that amount) under Delaware
law or the Partnership Agreement of IGC, nor will such rights be voluntarily
accorded to the IGC Unitholders. All IGC Unitholders will be bound by the vote
of IGC Unitholders owning a majority of the outstanding IGC Units and a majority
of the votes cast by IGC Unitholders not affiliated with the Wilson Family, and
objecting IGC Unitholders will have no alternative to receipt of the Common
Shares in the Restructuring other than selling their IGC Units in the market.
See "The IGC Consent Solicitation."

CONTROL OF ACPT.

Through their control of certain of the Shareholders, members of the
Wilson Family will be able to exert substantial control over votes on matters
affecting ACPT. However, members of the Wilson Family collectively will not own
a majority interest in ACPT. See "The Restructuring -- The Private Offering."

CONFLICTS OF INTEREST.

ACPT is subject to various conflicts of interest arising out of its
relationships with certain Shareholders, members of Management, and their
affiliates. As a result of these conflicts of interest, certain actions or
decisions by these parties may have an adverse effect on the interests of the
Shareholders. ACPT has adopted a policy that it will not, without the approval
of a majority of independent Trustees, (i) acquire from or sell to any Trustee,
officer, employee, or Shareholder who owns more than 2% of the Common Shares (an
"Affiliated Shareholder") or any entity in which a Trustee, officer, employee or
Affiliated Shareholder of ACPT beneficially owns more than a 1% interest, or any
affiliate of any of the foregoing, any property or other assets of ACPT, (ii)
make any loan to or borrow from any of the foregoing persons, or (iii) engage in
any other transaction with any of the foregoing persons. See "Business and
Properties of ACPT -- Policies with Respect to Certain Activities -- Affiliate
Transaction Policy."

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ABSENCE OF EXISTING TRADING MARKET FOR COMMON SHARES.

Prior to this Distribution, there will be no public market for the
Common Shares or any securities of ACPT. Although ACPT intends to apply for
listing of the Common Shares on the AMEX and the PSE, no assurance can be given
that such listing will occur and, if so, that a trading market will develop.

LIMITED TRADING MARKET FOR IGC UNITS; POSSIBLE LIQUIDATION.

As a result of the disposition of a substantial portion of IGC's
assets in the Restructuring, the IGC Units may no longer qualify for listing on
the AMEX and the PSE. Management of IGC believes that the assets retained by IGC
after the Restructuring will permit IGC to continue significant operations and
IGC intends to take steps to continue the listing of the IGC Units on the AMEX
and the PSE. Such actions may include a reverse split with respect to the
outstanding IGC Units that may have the effect of increasing the trading price
of IGC Units. However, if the IGC Units are delisted from either exchange IGC
may be dissolved and liquidated over a period which shall be no shorter than the
duration of the probation of IGC as a result of the wetlands litigation (if such
litigation is not ultimately resolved in IGC's favor) during which time the IGC
Units would be expected to trade in the over-the-counter market. However, the
liquidation process does not preclude the possibility of IGC management
soliciting offers to purchase all outstanding IGC Units or of IGC offering to
redeem outstanding IGC Units following a delisting. Even if the IGC Units remain
listed, the Restructuring may have an adverse effect upon the liquidity of the
trading market for the IGC Units. See "The Restructuring -- Possible Liquidation
of IGC" and "IGC After the Restructuring -- Listing of IGC Units."

CHANGE IN VALUE OF SECURITIES.

It is possible that the aggregate of the prices at which the Common
Shares and IGC Units trade after the Distribution (whether or not IGC is
liquidated) may be less than the price at which the IGC Units traded prior to
the Distribution. However, management of IGC and ACPT believe that the combined
trading price of the Common Shares and the IGC Units after the Distribution will
exceed the trading price of the IGC Units prior to the Distribution.

FAILURE OF AMERICAN RENTAL TO QUALIFY AS A REIT.

If American Rental fails to qualify as a REIT, then it will be taxed
as a corporation. In such event, American Rental would be liable for certain
federal, state and local income taxes. However, the recommendation of IGMC that
IGC Unitholders vote in favor of the Restructuring is premised on steps being
taken to qualify American Rental as a REIT. See "-- Tax Related Risks --
Classification of American Rental as a REIT."

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ANTITAKEOVER EFFECTS.

The provisions of ACPT's Declaration of Trust on classification of the
Board of Trustees, restrictions on the transfer of Common Shares, the ability to
issue preferred shares, certain control share acquisition and business
combination statutes applicable to ACPT could have the affect of delaying,
deferring or preventing a transaction or a change in control of ACPT that might
involve a premium price for holders of Common Shares or otherwise be in their
best interest. See "Certain Provisions of Maryland Law and of ACPT's
Declaration of Trust and Bylaws."

To ensure that American Rental will not fail to qualify as a REIT
under the ownership limit and other tests under the Code, ACPT's Declaration of
Trust, subject to certain exceptions, authorizes the trustees to take such
actions as are necessary and desirable to preserve American Rental's
qualification as a REIT and to limit any person (other than certain current IGC
Unitholders) to direct or indirect ownership of no more than 2% of the
outstanding Common Shares (the "Ownership Limit"). The foregoing restrictions on
transferability and ownership will continue to apply until (i) the Board of
Trustees determines that it is no longer in the best interests of ACPT for
American Rental to attempt to qualify, or to continue to qualify, as a REIT and
(ii) there is an affirmative vote of two-thirds of the votes entitled to be cast
on such matter at a regular or special meeting of the Shareholders. The
Ownership Limit may have the effect of delaying, deferring or preventing a
transaction or a change in control of ACPT that might involve a premium price
for the Common Shares or otherwise be in the best interest of the Shareholders.
See "Certain Provisions of Maryland Law and of ACPT's Declaration of Trust and
Bylaws."

POTENTIAL EFFECTS OF ISSUANCE OF ADDITIONAL SHARES.

ACPT's Declaration of Trust authorizes the Board of Trustees to (i)
amend the Declaration of Trust, without shareholder approval, to increase or
decrease the aggregate number of shares of beneficial interest or the number of
shares of beneficial interest of any class, including Common Shares, that ACPT
has the authority to issue, (ii) cause the company to issue additional
authorized but unissued Common or Preferred Shares and (iii) classify or
reclassify any unissued Common Shares and Preferred Shares and to set the
preferences, rights and other terms of such classified or unclassified shares.
ACPT intends to issue in the Private Offering Preferred Shares, the terms of
which will be negotiated with the purchasers but may include rights to
preferential distributions, cumulative distributions and/or liquidation
preferences. See "The Restructuring -- The Private Offering." In addition, ACPT
may issue up to 1,519,488 Common Shares to the limited partners of the U.S. and
Puerto Rico Apartment Partnerships in connection with the Exchange Offer. See
"The Restructuring -- The Exchange Offer."

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Although the Board of Trustees has no such intention to do so at the
present time, it could establish a class or series of shares of beneficial
interest that could, depending on the terms of such series, delay, defer or
prevent a transaction or a change in control of ACPT that might involve a
premium price for the Common Shares or otherwise be in the best interest of the
Shareholders. See "Description of Shares of Beneficial Interest" and "Certain
Provisions of Maryland Law and of ACPT's Declaration of Trust and Bylaws."

DEPENDENCE ON KEY PERSONNEL; WITHDRAWAL OF JAMES J. WILSON FROM MANAGEMENT.

ACPT is dependent on the efforts of its executive officers,
particularly Messrs. J. Michael Wilson, Edwin L. Kelly, Francisco Arrivi Cros
and Paul Resnik. The loss of their services could have an adverse effect on the
operations of ACPT. Prior to the Restructuring, each of Messrs. Kelly, Arrivi
and Resnik will enter into an employment agreement with ACPT. Certain assets of
IGC are not being contributed to ACPT and certain of the executive officers of
ACPT, including Messrs. Wilson and Kelly, may devote some of their management
time towards those excluded assets. See "Management."

In addition, James J. Wilson, the current Chief Executive Officer of
IGC, will not be a Trustee or officer of ACPT. The loss of Mr. Wilson's
management services could have an adverse effect on the operations of ACPT.
However, in order to provide continuity of management Mr. Wilson will enter into
a consulting agreement with ACPT pursuant to which he will provide limited
consulting services over a period of ten years following the Restructuring. See
"Transactions with Related Parties -- Consulting Agreement."

CHANGE IN THE RIGHTS OF IGC UNITHOLDERS.

The rights of Shareholders will differ from the rights of IGC
Unitholders in several material respects. In particular, Common Shareholders
cannot exercise control over ACPT, which has no partners, as they can IGC by
removing a general partner by majority vote. However, Shareholders will vote
annually to elect approximately one third of the Trustees and they can remove
any Trustee for cause by a majority vote and for any reason by two-thirds vote.
ACPT is obligated to distribute annually an amount equal to 45% of net taxable
income allocated to Shareholders less the amount of certain taxes paid by ACPT,
whereas as IGC is obligated to distribute 55% of net taxable income. In
addition, no Shareholder (except certain existing IGC Unitholders) may own more
than 2% of the outstanding Common Shares. See "Comparative Rights of IGC
Unitholders and Shareholders."

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POSSIBLE ADVERSE EFFECT OF MARKET INTEREST RATES ON PRICE OF COMMON SHARES.

One of the factors that will influence the market price of the Common
Shares in public markets will be the annual distribution rate on the Common
Shares. An increase in market interest rates may lead prospective purchasers of
the Common Shares to disinvest in ACPT in favor of higher yielding investments
which may adversely affect the market price of the Common Shares.

ERISA RISKS.

The Employment Retirement Income Security Act of 1974, as amended
("ERISA") and section 4975 of the Code prohibit certain transactions that
involve (i) certain pension, profit-sharing, employee benefit, or retirement
plans or individual retirement accounts (each, a "Plan") and (ii) the assets of
a Plan. A "party in interest" or "disqualified person" with respect to a Plan
will be subject to (x) an initial 5% excise tax on the amount involved in any
prohibited transaction involving the assets of the Plan and (y) an excise tax
equal to 100% of the amount involved if any prohibited transaction is not
corrected. Consequently, the fiduciary of a Plan contemplating an investment in
the Common Shares should consider whether ACPT, any other person associated with
the issuance of the Common Shares, or any affiliate of the foregoing is or might
become a "party in interest" or "disqualified person" with respect to the Plan.
In such a case, the acquisition or holding of Common Shares by or on behalf of
the Plan could be considered to give rise to a prohibited transaction under
ERISA and the Code.

Regulations of the Department of Labor that define "plan assets" (the
"Plan Asset Regulations") provide that in some situations, when a Plan acquires
an equity interest in an entity, the Plan's assets include both the equity
interest and an undivided interest in each of the underlying assets of the
entity, unless one or more exceptions specified in the Plan Asset Regulations
are satisfied. In such a case, certain transactions that ACPT might enter into
in the ordinary course of its business and operations might constitute
"prohibited transactions" under ERISA and the Code. The assets of ACPT should
not be deemed to be "plan assets" of any Plan that invests in the Common Shares.

APPROVALS REQUIRED TO EFFECT THE RESTRUCTURING.

In addition to obtaining the approval of the IGC Unitholders, the
consummation of the Restructuring is subject to obtaining the approvals of
certain government entities, including HUD, certain of IGC's lenders, and
certain of the limited partner investors in the U.S. Apartment Partnerships.
Management of IGC expects to obtain all necessary approvals in a timely manner.
However there can be no assurance that such approvals will be obtained on terms
and conditions acceptable to IGC. See "The Restructuring -- Approvals Required
to Effect the Restructuring."

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REAL ESTATE FINANCING RISKS

Following the Restructuring, the business of ACPT will be subject to
certain real estate financing risks that currently affect the business of IGC,
including the following:

RISING INTEREST RATES.

ACPT has, and may in the future incur, indebtedness that bears
interest at variable rates. Any increase in variable rates would adversely
affect ACPT's cash flow and the amounts available for distributions to
Shareholders. ACPT may in the future engage in transactions to limit its
exposure to rising interest rates as appropriate and cost effective.

DEBT FINANCING AND POTENTIAL ADVERSE EFFECTS ON CASH FLOWS AND DISTRIBUTIONS.

ACPT will be subject to risks normally associated with debt financing,
including the risk that ACPT's cash flow will be insufficient to pay
distributions at expected levels and meet required payments of principal and
interest, the risk that indebtedness on the apartment properties (which will not
have been fully amortized at maturity in all cases) will not be able to be
refinanced or that the terms of such refinancing will not be as favorable as the
terms of existing indebtedness. Upon consummation of the Restructuring, ACPT
expects to have outstanding indebtedness of approximately $91,000,000 (which
does not include aggregate unconsolidated debt of the U.S. and Puerto Rico
Apartment Partnerships of $116,000,000 that will be consolidated for financial
reporting purposes if the Exchange Offer is completed). If principal payments
due at maturity cannot be refinanced, extended, or paid with proceeds of other
capital transactions, such as the issuance of Preferred Shares in the Private
Offering, ACPT expects that its cash flow will not be sufficient in all years to
pay distributions at expected levels and to repay all maturing debt.
Furthermore, if prevailing interest rates or other factors at the time of
refinancing result in higher interest rates upon refinancing, the interest
expense relating to such refinanced indebtedness would increase, which would
adversely affect ACPT's cash flow and the amounts available for distributions to
its Shareholders. If a property or properties are mortgaged to secure payment of
indebtedness and ACPT is unable to meet mortgage payments, the property could be
foreclosed upon by or otherwise transferred to the mortgagee with a consequent
loss of income and asset value to ACPT.

CONSTRUCTION LOANS AND RISKS ASSOCIATED WITH SALE OR FORECLOSURE.

If new developments are financed through construction loans, there is
a risk that upon completion of construction, permanent financing for newly
developed properties may not be available or may be available only on
disadvantageous terms. In the event that ACPT is unable to obtain permanent
financing for a developed property on

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favorable terms, it could be forced to sell such property at a loss or the
property could be foreclosed upon by the lender and result in loss of income and
asset value to ACPT.

CHANGES IN POLICIES WITHOUT SHAREHOLDER APPROVAL.

The investment, financing, borrowing and distribution policies of ACPT
and its policies with respect to all other activities, including growth,
capitalization and operations, will be determined by the Board of Trustees.
Although ACPT's Board of Trustees has no present intention to do so, these
policies may be amended or revised at any time and from time to time at the
discretion of the Board of Trustees without a vote of the shareholders of ACPT.
A change in these policies could adversely affect ACPT's financial condition,
results of operations or the market price of the Common Shares. See "Business
and Properties of ACPT -- Policies with Respect to Certain Activities."

REAL ESTATE INVESTMENT RISKS

Following the Restructuring, the business of ACPT will be subject to
certain real estate investment risks that currently affect the business of IGC,
including the following:

GENERAL RISKS.

Real property investments are subject to varying degrees of risk. The
yields available from equity investments in real estate depend in large part on
the amount of income generated and expenses incurred. If ACPT's assets do not
generate revenues sufficient to meet operating expenses, including debt service,
development costs, tenant improvements, leasing commissions and other capital
expenditures, ACPT may have to borrow additional amounts to cover fixed costs
and ACPT's cash flow and ability to make distributions to its Shareholders will
be adversely affected.

The community development and homebuilding businesses of ACPT will
continue to be influenced by the risks generally incident to the real estate
business, which is affected by many factors. These include the level of interest
rates (which will affect the availability, cost and terms of both short- and
long-term financing for ACPT and other homebuilders and developers and long-term
financing for potential purchasers of homes and apartment projects) and changes
in the national economy and in the local economies in which ACPT will operate.
Although such factors are generally favorable at present, any sharp rise in
interest rates or downturn in the national or local economy can be expected to
have an adverse effect on ACPT's operations and profitability. Such factors have
tended to be cyclical in nature. Other factors that could affect ACPT's business
include the availability of materials and labor and changes in the costs
thereof, the availability of adequate land for residential development and
consumer preferences and demands in relation to the ownership of housing and the
relative economics of owning and renting, curtailments of access to or
unavailability of sewer or water

-31-

connections due to local moratoria, and the possible adverse effects of
legislative, regulatory, administrative, judicial or enforcement changes or
other actions that may arise in the future at the national, state or local
levels in the areas, among others, involving tax laws, environmental controls
and rent regulations. These factors also effect, to some degree, ACPT's
management services operations and the value of its real estate holdings. The
business of ACPT also will be affected by competition from other residential
homebuilders and land developers, some of which have greater experience and
resources than ACPT, and from sellers of existing homes and developed lots, and
from condominium conversions.

ACPT's revenues and the value of its rental properties may be
adversely affected by a number of factors, including the national, state and
local economic climate and real estate conditions (such as oversupply of or
reduced demand for space and changes in market rental rates); the perceptions of
prospective tenants of the safety, convenience and attractiveness of the
properties; the ability of the owner to provide adequate management, maintenance
and insurance; the ability to collect on a timely basis all rent from tenants;
the expense of periodically renovating, repairing and reletting spaces; and
increasing operating costs (including real estate taxes and utilities) which may
not be passed through to tenants. Certain significant expenditures associated
with investments in real estate (such as mortgage payments, real estate taxes,
insurance and maintenance costs) are generally not reduced when circumstances
cause a reduction in rental revenues from the property. In addition, real estate
values and income from properties are also affected by such factors as
compliance with laws, including tax laws, interest rate levels and the
availability of financing. Also, the amount of available net rentable square
feet of commercial property is often affected by market conditions and may
therefore fluctuate over time.

OPERATING RISKS.

ACPT's rental apartment properties are subject to operating risks
common to rental apartments in general, any and all of which may adversely
affect occupancy or rental rates. The apartment properties are subject to
increases in operating expenses such as cleaning, electricity, heating,
ventilation and air conditioning, elevator repair and maintenance, insurance and
administrative costs, and other general costs associated with security,
landscaping, repairs and maintenance. If operating expenses increase, the local
rental market may limit the extent to which rents may be increased to meet
increased expenses without decreasing occupancy rates. While ACPT implements
cost-saving incentive measures at each of its apartment properties, ACPT's
ability to make distributions to Shareholders could be adversely affected if
operating expenses increase without a corresponding increase in revenues.

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DEVELOPMENT OF ST. CHARLES.

ACPT's interest in St. Charles, in which more than 4,500 acres of land
remain to be developed, is one of ACPT's most valuable assets. ACPT's success in
large part will be dependent upon the continued successful development of St.
Charles. In addition to the risks generally incident to real estate businesses,
there are particular risks associated with the development of St. Charles. These
risks include (i) the need to obtain additional zoning and other approvals of
the Planning Commission and the County Commissioners of Charles County, Maryland
(the "Planning Commission", the "County Commissioners" and the "County,"
respectively) to permit the full development of St. Charles; (ii) the
possibility that the continued and timely development of St. Charles may be
affected by environmental laws and regulations applicable to "wetlands"; and
(iii) the failure or delay of other residential, commercial and industrial
developers active in the area to proceed with projects that would be beneficial
to ACPT. St. Charles has been zoned as a planned unit development that allows
construction of approximately 24,730 housing units and 1,390 acres of commercial
and industrial development. The County has agreed to provide sufficient water
and sewer connections for all housing units remaining to be developed in St.
Charles. However, IGC, SCA and ACPT are involved in litigation with the County
regarding the cost of water and sewer fees and impact fees previously paid by
IGC and SCA. See "Litigation -- IGC -- Other Litigation."

As has been the case in other areas of the country, concerns also have
been raised recently regarding the future development of land in St. Charles
owned by ACPT and others that may be classified as wetlands. (The U.S. Army
Corps of Engineers (the "Corps") regulations define "wetlands" as areas
saturated by surface or ground water sufficient to support vegetation typically
adapted for life in saturated soil conditions.) However, ACPT obtains
jurisdictional determinations from the Corps prior to development of any
properties and has developed certain environmental policies and procedures to
avoid violations. While ACPT does not believe that any of the foregoing factors
will materially adversely affect the planned development of St. Charles on a
timely basis, no assurance can be made that this will be the case. See "Business
and Properties of ACPT -- Community Development" and "Legal Proceedings."

TERMINATION OF HUD SUBSIDY CONTRACTS; NEW APARTMENT DEVELOPMENT.

To the extent subsidized units continue to comprise a major portion of
its apartment properties historically, changes in government regulations could
significantly affect the status of the ACPT's existing U.S. and Puerto Rico
apartment properties and its development of future projects. The federal
government has virtually eliminated subsidy programs for new construction of low
and moderate income housing by profit-motivated developers such as ACPT.
Historically, a large portion of the apartment projects undertaken by IGC,
particularly in Puerto Rico, have been supported by federal rent subsidies. No
new construction of apartment projects is expected in Puerto Rico and any new
apartment properties developed by ACPT in the United States most likely

-33-

will offer market rate rents which may adversely affect the ability of ACPT to
successfully rent such properties. New rental apartment projects also may be
affected by certain newly enacted tax law changes.

The subsidy contracts for ACPT's existing investment apartment
properties are scheduled to expire between 1997 and 2020. Under a recently
enacted law, such contracts may be renewed by the United States Department of
Housing and Urban Development ("HUD") on a year to year basis and ACPT may seek
to have expiring subsidy contracts for certain properties renewed.
Alternatively, ACPT may convert to condominiums those apartment properties in
Puerto Rico the subsidy contracts for which expire over the next several years.
Two such conversions are currently in progress. However, because the Code rules
governing REITs would impose a substantial tax penalty on any conversion of
ACPT's U.S. apartment properties into condominiums, ACPT does not intend to
convert any U.S. apartment properties with subsidy contracts that expire in the
near future. ACPT intends to offer units in such properties for rent at market
rates, which may adversely affect the occupancy rates in such properties. See
"Business and Properties of ACPT -- Condominium Conversions."

COMPETITION.

Real estate development carries risks from competition by other
entities and fluctuations in the housing market. ACPT's apartments in St.
Charles that have market rate rents are impacted by the supply and demand for
competing rental apartments in the area. Likewise, the local housing market
affects performance: when for-sale housing becomes more affordable due to lower
mortgage interest rates or softening home prices, this can adversely impact the
performance of rental apartments. ACPT's land development for home sales also
faces competition. The number of residential building permits issued by Charles
County has increased yearly from 1993, and there are approximately 30
subdivisions competing for new home buyers within five miles of St. Charles.
Competition in the San Juan metropolitan area with ACPT's Parque Escorial
planned community for lot sales for residential building comes primarily from
small-scale condominium projects, as Parque Escorial is one of only two master
planned communities currently under development in the area. See "Business and
Properties of ACPT."

POSSIBLE ENVIRONMENTAL LIABILITIES.

Under various federal, state, and local environmental laws, ordinances
and regulations, a current or previous owner or operator of real property may be
liable for the costs of remediation of hazardous or toxic substance on, under or
in such property. Such laws often impose liability whether or not the owner or
operator knew of, or was responsible for, the presence of such hazardous or
toxic substances. In addition, the presence of hazardous or toxic substances, or
the failure to remediate such property properly, may adversely affect the
owner's ability to borrow using such real property as

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collateral. Persons who arrange for the disposal or treatment of hazardous or
toxic substances may also be liable for the costs of removal or remediation of
hazardous substances at the disposal or treatment facility, whether or not such
facility is or ever was owned or operated by such person. Certain environmental
laws and common law principles could be used to impose liability for release of
and exposure to hazardous substances, including asbestos-containing materials
("ACMs") into the air, and third parties may seek recovery from owners or
operators of real properties for personal injury or property damage associated
with exposure to released hazardous substances, including ACMs. Management of
ACPT believes that its properties and operations in St. Charles will not be
materially adversely affected by hazardous or toxic substances on such
properties. Phase I Environmental Site Assessments have been prepared for
substantially all undeveloped parcels in St. Charles which revealed no
significant environmental concerns. Remediation has been completed at three
sites in Parque Escorial and the Puerto Rico Department of Natural Resources has
determined that such sites no longer contain environmental hazards. In addition,
approximately ten acres of land in Canovanas that is used as a burial ground for
horses may not be developed for a period of five years after burials cease.
Environmental assessments prepared for the remaining undeveloped land in Parque
Escorial and Canovanas revealed no significant environmental concerns.

EFFECT OF AMERICANS WITH DISABILITIES ACT COMPLIANCE ON CASH FLOW AND
DISTRIBUTION.

Under the Americans with Disabilities Act of 1990 (the "ADA"), all
public accommodations and commercial facilities are required to meet certain
federal requirements related to access and use by disabled persons. Compliance
with the ADA requirements could require removal of access barriers and non-
compliance could result in imposition of fines by the U.S. government or an
award of damages to private litigants. Although ACPT believes that its
properties are substantially in compliance with these requirements, a
determination that ACPT is not in compliance with the ADA could result in the
imposition of fines or an award of damages to private litigants. If ACPT were
required to make unanticipated expenditures to comply with the ADA, ACPT's cash
flow and the amounts available for distributions to its shareholders may be
adversely affected.

CHANGE IN LAWS.

Because increases in income, service or transfer taxes are generally
not passed through to tenants under leases, such increases may adversely affect
ACPT's cash flow and its ability to make distributions to shareholders. ACPT's
properties also are subject to various federal, state and local regulatory
requirements and to state and local fire and life-safety requirements. Failure
to comply with these requirements could result in the imposition of fines by
governmental authorities or awards of damages to private litigants. ACPT
believes that its properties are currently in compliance with all such
regulatory requirements. However, there can be no assurance that these
requirements

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will not be changed or that new requirements will not be imposed which would
require significant unanticipated expenditures by ACPT and could have an adverse
effect on ACPT's cash flow and expected distributions.

UNINSURED LOSS.

ACPT will initially carry comprehensive liability, fire, flood, (where
appropriate), extended coverage and rental loss insurance with respect to its
properties with policy specifications and insured limits customarily carried for
similar properties. There are, however, certain types of losses (such as from
hurricanes, wars or earthquakes) that may be either uninsurable, only partially
insurable, or not economically insurable. Should an uninsured loss or a loss in
excess of insured limits occur, ACPT could lose both its capital invested in a
property, as well as the anticipated future revenue from such property, and
would continue to be obligated on any mortgages indebtedness or other
obligations related to the property. Any such loss would adversely affect the
business of ACPT and its financial condition and results of operations.

RISKS INVOLVED IN PROPERTY OWNERSHIP THROUGH PARTNERSHIPS AND JOINT VENTURES.

ACPT participates with other entities in property ownership through
joint ventures or partnerships. Partnership or joint venture investments may,
under certain circumstances, involve risks not otherwise present, including the
possibility that ACPT's partners or co-venturers might at any time have economic
or other business interests or goals that are inconsistent with the business
interests or goals of ACPT, and that such partners or co-venturers may be in a
position to take action contrary to the instructions or the requests of ACPT or
contrary to ACPT's policies or objectives, including ACPT's policy with respect
to maintaining American Rental's qualification as a REIT. ACPT will, however,
seek to maintain sufficient control of such partnerships or joint ventures to
permit ACPT's business objectives to be achieved. There is no limitation under
ACPT's organizational documents as to the amount of available funds that may be
invested in partnerships or joint ventures.

In addition, ACPT may in the future acquire either a limited
partnership interest in a property partnership without partnership management
responsibility or a co-venturer interest or co-general partnership interest in a
property partnership with shared responsibility for managing the affairs of a
property partnership or joint venture and, therefore, will not be in a position
to exercise sole decision-making authority regarding the property partnership or
joint venture.

RISKS ASSOCIATED WITH ILLIQUIDITY OF REAL ESTATE.

Equity real estate investments are relatively illiquid. Such
illiquidity will tend to limit the ability of ACPT to vary its portfolio
promptly in response to changes in

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economic or other conditions. In addition, the Code limits the ability of a REIT
to sell properties held for fewer than four years, including converting
apartment properties into condominiums, which may affect American Rental's
ability to sell properties without adversely affecting returns to holders of
Common Shares.

RISKS ASSOCIATED WITH ACQUISITION, REDEVELOPMENT, DEVELOPMENT AND CONSTRUCTION.

ACPT intends to acquire residential properties to the extent that they
can be acquired on advantageous terms and meet ACPT's investment criteria.
Acquisitions of residential properties entail risks that investments will fail
to perform in accordance with expectations. Estimates of the costs of
improvements to bring an acquired property up to standards established for the
market position intended for that property may prove inaccurate. In addition,
there are general investment risks associated with any new real estate
investment.

ACPT intends to continue redevelopment, development and construction
of residential buildings. Risks associated with ACPT's redevelopment,
development and construction activities may include: abandonment of
redevelopment or development opportunities; construction costs of a property
exceeding original estimates, possibly making the property uneconomical;
occupancy rates and rents at a newly renovated or completed property may not be
sufficient to make the property profitable; financing may not be available on
favorable terms for redevelopment or development of a property; permanent
financing may not be available on lease-up or a project may not be completed on
schedule, resulting in increased debt service activities; and most development
projects, regardless of whether they are ultimately successful, typically
require a substantial portion of management's time and attention. Redevelopment
or development activities are also subject to risks relating to the inability to
obtain, or delays in obtaining, all necessary zoning, land-use, building,
occupancy and other required governmental permits and authorizations.

TAX RELATED RISKS

ASSET TRANSFERS.

Management intends to structure the Asset Transfers in the most tax
efficient manner consistent with applicable law and the business objectives of
ACPT and IGC. Gain will be recognized by IGC on the transfer of its interest in
IGP to IGP Group in an amount equal to the appreciation in certain property
indirectly owned by IGP. It is estimated that approximately $6.8 million in gain
will be recognized on this transfer. Gain also will be recognized by IGC on the
transfer of certain interests in the U.S. Apartment Partnerships as a result of
American Housing's assumption of liabilities in excess of the tax basis of the
property contributed to American Housing. It is estimated that approximately
$3.8 million in gain will be recognized on this transfer.

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Each IGC Unitholder will recognize that IGC Unitholder's allocable share of such
gain. Management is continuing to explore ways to minimize or eliminate the
amount of gain to be recognized on the Asset Transfers. See "Income Tax
Considerations -- Federal Income Tax Considerations -- Federal Income Tax
Classification of IGP Group -- Asset Transfers."

CORPORATE LEVEL TAXES.

Prior to the Restructuring, IGC has had no significant federal tax
obligations because entities treated as partnerships for federal tax purposes
are not subject to income taxes at the entity level. After the Restructuring,
certain activities that were previously conducted through partnership entities
will be contributed to corporations or other entities treated as corporations
for federal tax purposes. Although Management has attempted in the Restructuring
to reduce the "double" taxation that generally occurs when a corporation
distributes its profits to its Shareholders, significant amounts of corporate-
level taxes may be imposed upon American Land and American Management, and could
be imposed upon American Rental if it does not qualify as a REIT and upon ACPT
if it does not qualify as a partnership for federal tax purposes. See "Income
Tax Considerations -- Federal Income Tax Considerations -- Federal Income Tax
Classification of ACPT."

CLASSIFICATION OF AMERICAN RENTAL AS A REIT.

American Rental intends to elect to be treated as a REIT for federal
tax purposes. Counsel is of the opinion that (i) American Rental has been
organized in conformity with the requirements for qualification as a REIT
beginning with its taxable year ending December 31, 1998, and (ii) its proposed
method of operations described in this Information Statement/Prospectus will
enable it to satisfy the requirements for such qualification. The rules
governing REITs are highly technical and require ongoing compliance with a
variety of tests that depend, among other things, on future operating results.
Counsel will not monitor American Rental's compliance with these requirements.
While American Rental intends to satisfy these tests, no assurance can be given
that American Rental will qualify as a REIT for any particular year, or that the
applicable law will not change and adversely affect American Rental, ACPT, and
its Shareholders. See "Income Tax Considerations -- Federal Income Tax
Considerations -- Federal Income Tax Classification of American Rental --
Failure to Qualify as a REIT."

If American Rental does not qualify as a REIT, it would be classified
as an association taxable as a corporation, and American Rental would be taxable
on its profits at the applicable corporate rate and distributions to ACPT
generally would be taxable to the Shareholders as dividends. Treatment of
American Rental as an association taxable as a corporation would result in a
material reduction in the anticipated cash flow to Shareholders and would have a
significant adverse effect on the value of the Common Shares.

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CLASSIFICATION OF IGP GROUP FOR PUERTO RICO TAX PURPOSES.

IGP Group will be treated as a corporation for federal tax purposes
and intends to qualify as a special partnership for Puerto Rico income tax
purposes. As a special partnership for Puerto Rico income tax purposes, all of
IGP Group's Puerto Rico source income will be taxable to its partner ACPT, which
will be treated as a foreign corporation for Puerto Rico tax purposes. For
United States tax purposes, each Shareholder will be considered to have paid his
allocable share of any Puerto Rico income taxes paid by ACPT on its Puerto Rico
source income. Such taxes may give rise to a foreign tax credit (subject to
applicable limitations) or to a deduction for United States income tax purposes.
If IGP Group fails to qualify as a special partnership and is treated as a
corporation for Puerto Rico income tax purposes it would be subject to Puerto
Rico income tax on its Puerto Rico source income, and ACPT and the Shareholders
would not be treated as having paid any taxes to Puerto Rico with respect to the
Puerto Rico source income of IGP Group. Treatment of IGP Group as a corporation
for Puerto Rico tax purposes would have a significant adverse effect on the
value of the Common Shares.

POSSIBLE TAX LIABILITIES IN EXCESS OF CASH DISTRIBUTIONS.

A Shareholder generally is subject to federal income tax on his
allocable share of ACPT's taxable income without regard to distributions. In the
case of certain Puerto Rico Shareholders, see "Income Tax Considerations --
Federal Income Tax Considerations -- Federal Income Taxation of ACPT and
Shareholders -- Puerto Rico Shareholders." ACPT is required to distribute to
Shareholders amounts equal to 45% of taxable income allocable to Shareholders
less the amount of certain taxes paid by ACPT in Puerto Rico and other foreign
countries and certain taxes paid by American Rental. However, there can be no
assurance that ACPT will make distributions in any given year that provide
Shareholders with sufficient cash to meet their federal income tax liabilities
with respect to their share of ACPT's income. This discussion assumes that ACPT
will be treated as a partnership for federal income tax purposes. See
"Distribution Policy" and "Income Tax Considerations -- Federal Income Tax
Considerations -- Federal Income Tax Classification of ACPT."

In addition, following the Restructuring it is possible that IGC may
recognize taxable income without receiving sufficient cash to enable IGC to make
a distribution to the IGC Unitholders in an amount at least equal to the IGC
Unitholder's tax liability arising from their share of IGC taxable income.

CLASSIFICATION OF ACPT AS A PARTNERSHIP.

The federal income tax treatment contemplated for ACPT and the
Shareholders will be available only if ACPT is classified as a "partnership" for
federal income tax purposes and not as an "association" taxable as a
corporation. Counsel is of

-39-

the opinion that, under current laws and regulations and interpretations
thereof, ACPT will be classified as a "partnership" for federal income tax
purposes. Counsel's opinion, however, depends upon the continued satisfaction of
certain conditions by ACPT, as described in "Income Tax Considerations --
Federal Income Tax Considerations -- Federal Income Tax Classification of ACPT."
There can be no assurance that these conditions will continue to be met.

If ACPT were to be classified as an association taxable as a
corporation for any year, ACPT would be taxable on its profits at the applicable
corporate rate and distributions to the Shareholders generally would be taxable
as dividends. In addition, Shareholders may not be eligible for foreign tax
deductions or credits with respect to Puerto Rico taxes paid by ACPT. See
"Income Tax Considerations -- Federal Income Tax Considerations -- Federal
Income Taxation of ACPT and Shareholders -- Foreign Tax Credit." Treatment of
ACPT as an association taxable as a corporation would result in a material
reduction in the anticipated cash flow to Shareholders and would have a
significant adverse effect on the value of the Common Shares. See "Income Tax
Considerations -- Federal Income Tax Considerations -- Federal Income Tax
Classification of ACPT."

SECTION 704(C) ALLOCATIONS AND SECTION 754 ELECTION.

There will be "unrealized gain" on certain contributed property held
by ACPT (i.e., the excess of the fair market value of the property at the time
it is contributed to ACPT pursuant to the Asset Transfers over ACPT's basis in
the property). The unrealized gain will be determined by and allocated to each
asset by the Trustees. These determinations may affect substantially the amount
and timing of gain or loss recognized by Shareholders in the event that ACPT
were to sell its interest in American Land, American Management, American
Rental, or IGP Group. However, ACPT does not expect to sell its interests in
such entities. See "Income Tax Considerations -- Federal Income Tax
Considerations -- Federal Income Taxation of ACPT and Shareholders -- Section
704(c) Allocations."

ACPT will not make an election under Section 754 of the Code.
Therefore, persons who purchase Common Shares from Shareholders will not receive
a special basis adjustment with respect to their share of property held by ACPT
to reflect the purchase price of such Common Shares. It is possible that in
certain circumstances, the trading market for the Common Shares could be
adversely affected. See "Income Tax Considerations -- Federal Income Tax
Considerations -- Federal Income Taxation of ACPT and Shareholders -- Section
754 Election."

CHANGES IN LAW.

Significant changes were made to the Code, including changes relating
to the treatment of partnerships and REITs, by the Taxpayer Relief Act of 1997
(Pub. L.

-40-

105-34) ("1997 Act"). It may be some time before the IRS issues regulations or
other formal guidance under the 1997 Act. It is possible that such regulations
or other formal guidance could interpret the relevant law in a manner that is
contrary to this discussion or contrary to the opinion of Counsel, and such
interpretation could be applied retroactively. It is also possible that there
will be further significant changes in the future.

OTHER INCOME TAX CONSIDERATIONS.

There are other significant tax considerations associated with an
investment in ACPT. See "Income Tax Considerations."

THE IGC CONSENT SOLICITATION

MATTERS PRESENTED FOR CONSENT.

This Information Statement/Prospectus is being furnished to the
holders of IGC Units in connection with the solicitation by IGMC of the consents
of IGC Unitholders to the approval of the Restructuring, including the Asset
Transfers, the Distribution and, in the event IGC Units are delisted from the
AMEX or the PSE, the Liquidation. Completion of the enclosed consent card does
not represent an IGC Unitholder's approval or disapproval of any other action by
IGC or IGMC.

RECOMMENDATION OF THE BOARD OF DIRECTORS OF IGMC.

RECORD DATE AND OUTSTANDING IGC UNITS.

IGMC has fixed the close of business on , 1998 as the
record date (the "Record Date") for the determination of holders of IGC Units
entitled to notice of and to vote on the Restructuring. At the close of
business on the Record Date, there were IGC Units issued and
outstanding.

As of the Record Date, the directors and executive officers of IGMC
and IGC, together with their affiliates, collectively beneficially own % of
the outstanding IGC Units, and members of the Wilson Family collectively
beneficially own % of the outstanding IGC Units. IGMC expects that all such
directors and executive officers, and members of the Wilson Family, will vote
all IGC Units owned by them in favor of the Restructuring.

-41-

REQUIRED CONSENT.

Pursuant to Section 6.3(b) and Section 9.1 of the Partnership
Agreement, IGC may not dispose of all or substantially all of its assets or
dissolve and liquidate without the consent of the holders of a majority of the
issued and outstanding IGC Units (a "Majority Vote"). Because the Restructuring
would constitute a disposal of substantially all of the assets of IGC and, in
the event of a delisting, would involve the liquidation of IGC, a Majority Vote
is required to approve the Restructuring. In addition, IGMC also has conditioned
consummation of the Restructuring upon the receipt of the affirmative consent of
the holders of a majority of the IGC Units voted on the Restructuring, other
than IGC Units controlled by members of the Wilson Family.

Accordingly, the affirmative consent of (i) the holders of a majority
of all of the issued and outstanding IGC Units, including IGC Units controlled
by members of the Wilson Family and (ii) the holders of a majority of the IGC
Units voted on the Restructuring other than IGC Units controlled by members of
the Wilson Family, are required to approve the Restructuring.

VOTING, APPROVAL DATE AND REVOCATION OF CONSENT.

Approval of the Restructuring will constitute the approval of each
component of the Restructuring -- the Asset Transfers, the Distribution and, if
necessary, the Liquidation -- and no separate vote will be taken on any
individual component. Certain of the Asset Transfers do not require IGC
Unitholder approval and may be completed prior to voting on the Restructuring.
See "The Restructuring -- The Asset Transfers."

-42-

SOLICITATION OF CONSENTS; SOLICITATION EXPENSES.

IGC will bear the cost of soliciting consents for the Restructuring,
including expenses incurred in connection with the filing of this Information
Statement/Prospectus. In addition to solicitation by mail, directors and
officers of IGMC and officers and employees of IGC may solicit consents from IGC
Unitholders personally or by telephone, telegram or facsimile. Such directors,
officers and employees will not receive any additional compensation for their
solicitation efforts.

NO DISSENTERS' APPRAISAL RIGHTS.

IGC Unitholders who object to the Restructuring will have no
dissenters' appraisal rights (i.e., the right, instead of receiving Common
----
Shares, to seek a judicial determination of the "fair value" of their IGC Units
and to compel IGC to purchase IGC Units for cash in that amount) under state law
or the Partnership Agreement, nor will such rights be voluntarily accorded to
the IGC Unitholders, and objecting IGC Unitholders will have no alternative to
receipt of Common Shares in the Restructuring other than selling their IGC Units
in the market. The IGC Units are currently listed on the AMEX and the PSE under
the ticker symbol "IGC."

NO MEETING OF IGC UNITHOLDERS WILL BE HELD TO VOTE ON THE RESTRUCTURING. IGC
UNITHOLDERS MAY VOTE ONLY BY COMPLETING AND RETURNING THE ACCOMPANYING CONSENT
CARD. HOLDERS OF IGC UNITS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE
ACCOMPANYING CONSENT CARD AND RETURN IT PROMPTLY TO IGC IN THE ENCLOSED POSTAGE-
PREPAID ENVELOPE. CONSENT CARDS RECEIVED AFTER WILL NOT BE COUNTED.

-43-

ORGANIZATIONAL CHART

IGC PRIOR TO THE RESTRUCTURING

The following chart depicts the organizational structure of IGC and
its subsidiaries immediately prior to the Restructuring. St. Charles Operating
Co. LLC owns the Wetlands Properties, including the Towne Center South land, and
IGC directly holds the Westbury and Montclair land.

[CHART APPEARS HERE AS DESCRIBED BELOW]

A. IGP
(1) Escorial Builders
(2) El Monte
(3) LDA
(4) 11 Puerto Rico Apartment Partnerships - Limited Partners

B. HDAMC

C. St. Charles Operating Co. L.L.C.

D. HDA

E. SCA
(1) Brandywine

F. Pomfret L.L.C.

G. 13 U.S. Apartment Partnerships - Limited Partners

H. Chastleton

I. Maryland Cable

J. AFH

K. IWT

L. St. Charles Commuity L.L.C.

M. Coachman's

(1) James J. Wilson is a general partner without a percentage interest in IGP
and is entitled to certain preferential distributions therefrom.
(2) IGC holds all of the voting stock of HDAMC.
(3) Includes Caribbean business transferred to CWT.

-44-

ORGANIZATIONAL CHART

ACPT FOLLOWING THE RESTRUCTURING

The following chart depicts the organizational structure of ACPT and
its subsidiaries and reflects the issuance of American Housing Units to the
limited partners of the U.S. Apartment Partnerships and IGP B Units to the
limited partners of the Puerto Rico Apartment Partnerships pursuant to the
Exchange Offer.

[CHART APPEARS HERE AS DESCRIBED BELOW]

A. American Rental - 200 Preferred Shareholders
(1) American housing - Rolled-Up Partners
(i) 13 U.S. Apartment Partnerships

B. American Management

C. American Land
(1) St. Charles Community L.L.C.
(2) Maryland Cable

D. IGP Group
(1) IGP - Rolled-Up Partners (Y% Class B Units)
(i) LDA
(ii) El Monte
(iii) Escorial Builders
(iv) 11 Puerto Rico Apartment Partnerships

(1) ACPT will hold all of the common stock of American Rental.

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ORGANIZATIONAL CHART

IGC FOLLOWING THE RESTRUCTURING

The following chart depicts the organizational structure of IGC and
its subsidiaries immediately following the Restructuring. St. Charles Operating
Co. LLC will continue to own the Wetlands Properties, including the Towne Center
South land, and IGC will directly hold the Westbury and Montclair land.

[CHART APPEARS HERE AS DESCRIBED BELOW]

A. HDA

B. Coachman's

C. chastleton

D. HDAMC

E. SCA
(1) Brandywine

F. St. Charles Operating Co. LLC

G. AFH

H. Pomfret LLC

I. IWT

(1) Held for the benefit of IGC Unitholders. IGC will exercise no management
control over the CWT Trust or CWT.

(2) IGC holds all of the voting stock of HDAMC

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THE RESTRUCTURING

REASONS FOR THE RESTRUCTURING.

The purpose of the Restructuring is to create an attractive investment
vehicle that will not be burdened with the operating losses and capital needs of
AFH and IWT and will not be a party to IGC's wetlands litigation. In addition,
ACPT, whose principal income is dividends from corporations, should be a more
attractive investment for pension funds and mutual funds than is IGC as a master
limited partnership. Tax reporting for Shareholders will be simplified compared
to that of IGC Unitholders. Management expects that ACPT will have greater
access to capital markets than IGC has had.

THE ASSET TRANSFERS.

ACPT acts as a self-managed holding company and will own all of the
outstanding equity interests in American Land, American Management and IGP Group
and all of the common stock in American Rental. Through the Asset Transfers, IGC
will transfer its principal real estate operations and assets to ACPT and these
subsidiary entities.

American Rental.
---------------

American Rental will acquire IGC's partnership interests in United
States investment apartment properties and its land in the United States
presently intended for development as apartment properties. The partnership
interests in 13 investment apartment properties ("U.S. Apartment Partnerships")
will be held by American Rental indirectly through American Housing, in which
American Rental will have a 99% general partner interest. American Housing
Management Company, a wholly owned subsidiary of American Rental, will have a 1%
limited partner interest. See "Business and Properties of ACPT -- Rental
Apartment Properties -- United States" for a description of the United States
apartment properties. American Rental is expected to be taxed as a REIT. In
order to maintain its REIT qualification, American Rental will issue preferred
shares to 200 employees of American Management which in the aggregate will
represent a liquidation value of $200,000 and provide for a 10% cumulative
preferred dividend.

American Management.
-------------------

American Management, which currently is a wholly-owned subsidiary of
IGC, will acquire IGC's United States asset management services operations which
provide management services for the United States apartment properties and for
other rental apartments not owned by IGC. IGC will then transfer all of the
outstanding stock

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of American Management to ACPT prior to the Distribution. American Management
will be taxed as a corporation.

The transfer of the management business of IGC to American Management
prior to the Distribution does not require approval of the IGC Unitholders. In
the event that the Restructuring is not consummated, American Management will
remain a separate corporate subsidiary of IGC that will conduct IGC's management
operations.

American Land.
-------------

American Land will acquire IGC's principal United States community
development assets and operations. These will include the following:

1) IGC's 100% interest in St. Charles Community LLC which holds
approximately 4,500 acres of land in St. Charles, Maryland. This
constitutes substantially all of the land formerly held by St. Charles
Associates, a partnership in which IGC holds a 99% partnership interest and
IBC holds a 1% partnership interest, except for a 50% interest in
Brandywine Investment Associates L.P., which holds 277 acres of land held
for development in Brandywine, Maryland, that will continue to be held by
St. Charles Associates. IGC also will retain land in Pomfret, Maryland and
the Montclair and Westbury land. See "ACPT," "Business and Properties of
ACPT -- Community Development" and "Legal Proceedings."

2) IGC's 41.0346% interest in Maryland Cable Limited Partnership
("Maryland Cable"), which in 1988 sold all of its cable television system
assets in St. Charles. Pursuant to the sales agreement for the cable
assets, Maryland Cable is entitled to receive, until January 2000, a fee
for each residential unit built in St. Charles that becomes available for
installation of cable television. In addition, St. Charles Associates,
which under the sales agreement is entitled to a separate fee for each unit
that becomes available for cable installation, will assign such rights
directly to St. Charles Community LLC.

American Land is a Maryland corporation and will be taxed as a
corporation.

IGP Group.
---------

IGP Group will acquire IGC's 99% limited partnership interest and 1%
general partnership interest in IGP. Prior to the Restructuring, James J.
Wilson, who currently is a general partner, without a percentage interest, of
IGP and is entitled to preferential cash distributions and allocations of
certain tax items from the partnerships in which IGP holds interests, will
transfer his interest in IGP to a subsidiary of ACPT.

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As a result, ACPT will own individually 100% of IGP. IGP Group intends to
qualify as a Puerto Rico special partnership and is expected to be taxed as a
corporation for U.S. tax purposes and as a partnership for Puerto Rico income
tax purposes. IGP's assets and operations will continue to include:

1) an 80% partnership interest in Land Development Associates S.E.,
a Puerto Rico special partnership ("LDA"), which holds approximately 312
acres of land in the planned community of Parque Escorial and 543 acres in
Canovanas, Puerto Rico, which presently is being held for future
development;

2) a 50% partnership interest in Escorial Builders Associates S.E.
("Escorial Builders"), which is engaged in the construction of condominiums
in the planned community of Parque Escorial; and

3) a 1% interest in El Monte Properties S.E., a Puerto Rico special
partnership which owns El Monte Mall Complex, a 169,000 square foot office
and retail complex in San Juan, Puerto Rico.

4) general partner interests in 11 Puerto Rico apartment
partnerships (the "Puerto Rico Apartment Partnerships"). See "Business and
Properties of ACPT -- Rental Apartment Properties -- Puerto Rico."

THE DISTRIBUTION.

In connection with the Asset Transfers, ACPT will issue to IGC
sufficient Common Shares to enable IGC to make the Distribution. In the
Distribution, IGC will distribute all Common Shares held by it to the IGC
Unitholders and its general partners -- IGMC and IBC -- pro rata in accordance
with each partner's percentage interest in IGC. The aggregate of approximately
5,200,000 Common Shares distributed to IGC Unitholders will equal 99% of the
Common Shares outstanding immediately following the Distribution, corresponding
to the IGC Unitholders' aggregate 99% partnership interest in IGC. Common Shares
representing the remaining 1% of such Common Shares will be distributed to IGMC
and IBC in accordance with their respective 1/3% and 2/3% partnership interests
in IGC, with IGMC receiving approximately 17,500 Common Shares and IBC receiving
approximately 34,500 Common Shares.

IGC will effect the Distribution as soon as practicable following
approval of the Restructuring (such date, the "Distribution Date") by delivering
all outstanding Common Shares to Registrar and Transfer Company (the
"Distribution Agent") for distribution to those persons who are holders of
record of IGC Units as of the close of business on the Record Date. The
Distribution will be made on the basis of one ACPT Common Share for every two
IGC Units outstanding on the Record Date. The actual

-49-

total number of Common Shares to be distributed will depend on the number of IGC
Units outstanding on the Record Date. Based upon IGC Units outstanding as of the
Record Date, approximately 5,200,000 Common Shares will be distributed to
holders of IGC Units.

No certificates or scrip representing fractional Common Shares will be
issued to IGC Unitholders as part of the Distribution. The Distribution Agent
will aggregate fractional Common Shares into whole Common Shares and sell them
in the open market at then prevailing prices on behalf of IGC Unitholders who
otherwise would be entitled to receive fractional Common Share interests, and
such persons will receive a check in payment for the amount of their allocable
share of the total sale proceeds. Such sales are expected to be made as soon as
practicable after the distribution of Common Share certificates to IGC
Unitholders.

Holders of IGC Units on the Record Date will not be required to pay
cash or other consideration, to surrender or exchange certificates representing
IGC Units or to take any other action in order to receive Common Shares pursuant
to the Distribution. All holders of IGC Units will continue to hold their IGC
Units and, if such holders are holders of record on the Record Date, they will
also receive Common Shares. The Distribution will not otherwise change the
number of, or the rights associated with, the outstanding IGC Units.

RELATIONSHIP BETWEEN IGC AND ACPT AFTER THE DISTRIBUTION.

No Overlapping Management.
-------------------------

Following completion of the Distribution, IGMC will remain the
managing general partner of IGC and no changes will be made to the Partnership
Agreement of IGC. No Trustee, officer or employee of ACPT will also be a
director or officer of IGMC or officer or employee of IGC. However, certain
Trustees of ACPT will be Trustees of the CWT Trust.

Service Agreement.
-----------------

Following completion of the Distribution, American Management will
provide certain administrative services and support, including rental of office
space, bookkeeping and accounting services and regulatory reporting services, to
IGC pursuant to a service agreement between American Management and IGC (the
"Service Agreement"). IGC will compensate American Management on a cost
reimbursement basis for expenses incurred by American Management in providing
such services. The Service Agreement will have an initial term of five years and
may be renewed at the option of the parties.

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Banc One Financing.
------------------

On September 19, 1997, IGC refinanced substantially all of its U.S.
land development recourse indebtedness pursuant to a Master Loan Agreement dated
August 1, 1997 by and among IGC, ACPT, St. Charles Community LLC and Banc One
Capital Partners IV, Ltd. ("Banc One"). To date approximately $14 million in
proceeds of this $20 million facility were used as follows: $6.8 million to
satisfy existing indebtedness to NationsBank, $1.7 million to Puerto Rico income
taxes, $2.5 million for various accounts payable, and $3 million to pay in full
the wetlands fine. In addition, the Banc One facility provides for up to $4
million in community development financing for Fairway Village, and $2 million
for payment of IGC's wetlands remediation expenses.

The loan bears interest at prime plus 2.5% and requires semi-annual
principal payments of $1 million during the first year and $1.5 million
thereafter until maturity at the end of the seventh year. The loan is secured by
substantially all of IGC's assets, excluding the assets that will remain in IGC
following the Restructuring. During the first 2 years of the loan Banc One is
generally entitled to receive 50% of the net sales proceeds of any collateral as
a mandatory principal curtailment with the percentages increasing to 60% in year
3, 70% in year 4, 80% in year 5, 90% in year 6 and 100% in year 7. In connection
with the loan, IGC granted Banc One an option to purchase 150,000 IGC Units at
an exercise price of $3.0016 per unit (the "Strike Price"). During any year that
the loan remains outstanding, IGC is required to grant Banc One 75,000
additional options with an exercise price equal to the lesser of the Strike
Price or the market price on the date of grant.

Following the Restructuring, and upon approval of Banc One, ACPT will
assume the obligation to grant options. IGC will remain liable to Banc One for
outstanding indebtedness but will be released from its other covenant
obligations. Pursuant to the Service Agreement, ACPT will indemnify and hold
harmless IGC from any liability under the Banc One loan.

NATIONSBANK LETTER OF CREDIT.

NationsBank has issued in the name of IGC a standby letter of credit
in the face amount of $4.2 million which serves as collateral for municipal
bonds in the principal amount of $4.2 million issued by a District of Columbia
agency that finance the Chastleton Apartments. IGC's obligations under the
letter of credit are secured by an assignment of certain notes payable by
Brandywine Investment Associates L.P. and by IGP's partnership interests in
three Puerto Rico Apartment Partnerships. Additional collateral has been
provided by IBC and IBC has undertaken to replace the NationsBank letter of
credit with a letter of credit secured only by assets of IBC.

-51-

ASSETS RETAINED BY IGC.

After the Restructuring, IGC will continue to own certain assets that
in management's view do not fit ACPT's business plan. These include the Wetlands
Properties, certain parcels of land in Pomfret, Maryland, Westbury, Montclair, a
50% interest in Brandywine Investment Associates L.P., which owns land in
Brandywine, Maryland, all of the shares of AFH, IWT, all of the voting stock of
HDAMC, the LDA Note, as well as fractional interests in HDA, Chastleton, and
Coachman's L.P. (collectively the "Retained Assets"). As a result of the
wetlands conviction, the Wetlands Properties are encumbered by an obligation to
impose a conservation easement and therefore may not be developed at present.
Any encumbrances will be removed if the wetlands conviction is reversed. See
"IGC After the Restructuring -- Description of IGC's Continuing Business."

POSSIBLE LIQUIDATION OF IGC.

Management of IGC believes that the assets retained by IGC after the
Restructuring will have substantial value that will permit IGC to finance its
continuing operations. IGC expects to require approximately $3 million in
financing during 1998. If this financing is obtained, IGC intends to take steps
to continue the listing of the IGC Units on the AMEX and the PSE. Such actions
may include a reverse split with respect to the outstanding IGC Units that may
have the effect of increasing the trading price of IGC Units. Despite obtaining
financing sufficient to fund IGC's continuing operations, continued listing may
not be possible due to the disposition of a substantial portion of IGC's assets.
Should this prove to be the case, it is management's view that IGC should be
liquidated after the Restructuring. Accordingly, management proposes to
liquidate IGC in the event that it is no longer possible to continue its listing
on the American and Pacific exchanges. However, the final consummation of the
Liquidation and dissolution of IGC would be subject to the relisting of IGC
Units on the AMEX and PSE in the event that the wetlands litigation is
ultimately resolved in IGC's favor and to enable IGC to satisfy obligations to
its creditors. The period of the Liquidation of IGC would be expected to last
for a period no shorter than the period of time during which IGC remains on
probation as a result of the wetlands litigation, if such litigation is not
ultimately resolved in IGC's favor. During the Liquidation period, IGC Units
would be expected to trade on the over-the-counter market. However, the
liquidation process does not preclude the possibility of IGC management
soliciting offers to purchase all outstanding IGC Units or of IGC offering to
redeem outstanding IGC Units following a delisting.

-52-

APPROVALS REQUIRED TO EFFECT THE RESTRUCTURING.

In addition to obtaining approval of the IGC Unitholders, the
consummation of the Restructuring is subject to obtaining approvals of certain
government entities, including HUD, certain of IGC's lenders, including Banc
One, and certain of the limited partner investors in the U.S. Apartment
Partnerships. Management of IGC expects to obtain all necessary approvals in a
timely manner. However there can be no assurance that such approvals will be
obtained on terms and conditions acceptable to IGC.

BACKGROUND OF THE RESTRUCTURING; CONSIDERATION OF ALTERNATIVES.

Disadvantages of Current Structure.
----------------------------------

Though IGC's limited partnership structure yields significant tax
advantages, certain disadvantages of the structure have increasingly affected
the attractiveness of IGC as an investment vehicle. In developing plans for the
Restructuring, IGC management has sought to minimize disadvantages of the
current structure while preserving many of the tax advantages.

A significant disadvantage of the partnership structure is its
complexity. For example, IGC is managed by its managing general partner, IGMC,
but also has another general partner, IBC, which was necessary initially to
establish IGC as a partnership for federal income tax purposes. Also for
partnership tax reasons, IGC's principal subsidiaries, SCA and IGP, are not
wholly owned by IGC.

As a partnership, IGC also has limited appeal to certain tax-exempt
investors, such as pension funds and many mutual funds. These entities generally
do not invest in limited partnerships because allocations to such investors of a
partnership's active trade or business income are not tax-exempt. Such tax-
exempt investors favor investments in securities that generate only passive
income such as dividends.

In addition, with the expiration on December 31, 1997 of a ten-year
transition period established by the Omnibus Budget Reconciliation Act of 1987,
certain current sources of IGC income (principally management fees) will not be
qualifying income for a publicly traded partnership. Thus to remain classified
as a partnership, IGC management recognized the need to restructure certain of
its investments whether or not the Restructuring takes place.

Alternatives Considered.
------------------------

The structural disadvantages coupled with the 1996 conviction and
sentencing in the wetlands litigation led IGC management to begin examining
various restructuring alternatives.

-53-

During the Fall of 1996, IGC management consulted with legal counsel
and tax advisors and identified the REIT as a possible investment vehicle.

In December 1996, IGC management announced that it had determined to
pursue development and implementation of a plan to restructure the publicly
traded partnership by placing IGC's multifamily housing assets into a publicly
traded REIT and disposing of land development assets to Wilson Family entities.
With the land transfers the Wilson Family would receive a reduced ownership in
the REIT. The announcement explained that the plan would be considered by a
special committee consisting of members of the IGMC Board of Directors who are
neither members of the Wilson Family nor employees of IGC and that it would be
subject to satisfactory resolution of various U.S. and Puerto Rico tax and legal
issues.

During the first quarter of 1997 the special committee and certain
Unitholders expressed concern that it may be difficult to establish a fair value
for assets that would be transferred to Wilson Family entities in exchange for
diminished ownership of the REIT. Also Puerto Rico tax considerations dictated
dividing IGC's multifamily housing assets between separate U.S. and Puerto Rico
REITs. As a result, the committee expressed concern that two REITs would lack
sufficient assets and income to create a strong trading market for their
securities. Accordingly, the special committee directed IGC management to
develop an alternative plan.

In April 1997, after consideration by the special committee, IGC
management announced a modified plan to convert IGC into an entity that would
benefit from rules that govern REITs. The proposed entity would have been
similar to the current proposal for ACPT, except that only AFH, IWT and the
Wetlands Properties would have been excluded. However, the proposed entity would
retain a right to receive shares of IWT as soon as IWT contracted to begin a
solid waste disposal facility and an option to purchase the Wetlands Properties
at book value if the wetlands litigation were favorably resolved.

The modified plan also contemplated the possibility of making an offer
to the limited partners in the Apartment Partnerships to exchange their
partnership interests for interests in a U.S. or Puerto Rico partnership that
would hold the apartment properties. During the first six months of 1997, IGC
management discussed this possibility with the limited partners'
representatives. The plan seemed feasible only if the U.S. and Puerto Rico
partnership interests were convertible into a liquid security that was more
attractive than IGC Units.

On May 8, 1997, IGC retained Robert A. Stanger & Co. ("Stanger") to
assist in refining the structure and providing opinions regarding the fairness
of the Exchange Offer and asset transfers. In June 1997 Stanger provided IGC a
draft report in which it proposed that IGC not be converted into ACPT with
rights to AFH, IWT and the Wetlands Properties. Stanger instead recommended that
management examine the

-54-

possibility of IGC continuing as a separate publicly traded partnership with
AFH, IWT and the Wetlands Properties, while creating and distributing to its
Unitholders shares of ACPT.

During the third quarter of 1997, IGC management and the special
committee evaluated Stanger's recommendation and determined that IGC may require
more than AFH, IWT and the Wetlands Properties to remain a viable publicly
traded company. At the same time, in connection with the Banc One financing, IGC
initiated the Restructuring by organizing ACPT and separating ownership of the
Wetlands Properties and other land development assets into two limited liability
companies owned by IGC and ACPT, respectively.

Also during the third quarter, IGC management began preparing this
Information Statement/Prospectus. On August 15, 1997, IGC announced that it
intended to file with the Commission in September documents describing the ACPT
Distribution. Postponement of the Banc One financing and resolution of the
treatment of certain tax, legal and accounting issues delayed completion of the
initial filing until November 14.

THE EXCHANGE OFFER.

Concurrently with the Restructuring, ACPT will make the Exchange
Offer, pursuant to which American Housing will offer to acquire all of the
limited partnership interests held by third party investors in the U.S.
Apartment Partnerships in exchange for units representing assignment of
beneficial ownership of limited partnership interests in American Housing
("American Housing Units"), and IGP will offer to acquire all of the limited
partnership interests held by third party investors in the Puerto Rico Apartment
Partnerships in exchange for Class B units representing assignment of beneficial
ownership of limited partnership interests in IGP ("IGP B Units"). The IGP B
Units will be entitled to receive distributions out of income derived by IGP
from the Puerto Rico Apartment Partnerships and not from IGP's other assets,
including management fees and the land interests held by LDA. The American
Housing Units and the IGP B Units will be convertible into Common Shares of ACPT
at the conversion ratio described below.

In exchange for each limited partner's interest in an Apartment
Partnership, American Housing or IGP, as the case may be, will offer to such
limited partner the number of American Housing Units or IGP B Units equal to the
net asset value (the "Net Asset Value") of such limited partnership interest
divided by $21.18, which is the Net Asset Value assigned to each American
Housing Unit and IGP B Unit in order to correspond to the Net Asset Value per
ACPT Common Share, as described below. ACPT has determined the Net Asset Value
of each apartment partnership as of December 31, 1996, based upon the sum of (i)
the value of each partnership's income producing real estate assets as
established by a valuation prepared by Stanger as of December 31, 1996 and (ii)
the fair market value of non-real estate assets including

-55-

cash, accounts receivable, marketable securities and other miscellaneous assets,
less (a) the amount of debt outstanding including mortgage debt and other
liabilities and (b) the amount of consolidation costs allocable to such
partnership. The resulting Net Asset Value of each apartment partnership has
been allocated by ACPT among the limited partners of such partnership (and
American Housing or IGP, as the case may be, as general partner) based upon the
terms of the partnership agreement applicable to liquidations.

Each American Housing Unit and each IGP B Unit will be convertible at
the option of the holder into one Common Share of ACPT (the "Conversion Ratio").
ACPT has determined the total Net Asset Value of ACPT as of December 31, 1996,
to be $109,694,000, based upon the sum of (i) the Net Asset Value of the
interests in the U.S. and Puerto Rico Apartment Partnerships owned by ACPT at
the time of the Exchange Offer, aggregating $35,360,000; (ii) the value ascribed
to the operations of American Management by ACPT based upon a four multiple
applied to operating cash flow, resulting in a value of $3,944,000; (iii) the
appraised value of the land assets held by American Land, less outstanding debt,
adjusted for ACPT's ownership interest in such assets, resulting in an aggregate
net value of $47,394,000; (iv) the value ascribed to the management operations
in Puerto Rico by ACPT based upon a four multiple applied to operating cash
flow, resulting in a value of $6,628,000; (v) the appraised value of the land
assets in Puerto Rico held by LDA, adjusted for debt outstanding and ACPT's
ownership interest in such assets, resulting in an aggregate net value of
$15,791,000; (vi) the value of other assets of ACPT, including cash, accounts
receivable, and other assets aggregating $12,257,000 (including intercompany
receivables); less (a) the amount of debt and other liabilities outstanding
aggregating $10,680,000 (excluding tax liabilities of $9,312,000 for which
management expects that tax credits will be available to Shareholders upon
payment) and (b) the amount of consolidation costs allocable to ACPT in the
Restructuring and the Exchange Offer aggregating $1,000,000.

ACPT divided the total Net Asset Value of ACPT by the 5,180,194 Common
Shares expected to be outstanding after completion of the Distribution to arrive
at a Net Asset Value per Common Share of $21.18. The Conversion Ratio applicable
to the American Housing Units and the IGP B Units may be adjusted from time to
time in the event that the aggregate amount of distributions made by American
Housing with respect to the American Housing Units or IGP with respect to the
IGP B Units exceeds the aggregate amount of distributions made by ACPT to
holders of Common Shares.

ACPT expects to receive from Stanger an opinion that the allocation of
American Housing Units and IGP B Units and the Conversion Ratio are fair, from a
financial point of view, to the limited partners of the U.S. and Puerto Rico
Apartment Partnerships and Shareholders of ACPT.

If all limited partners of the U.S. and Puerto Rico Apartment
Partnerships were to participate in the Exchange Offer and subsequently convert
all the American

-56-

Housing Units and IGP B Units received thereby, such persons would receive in
the aggregate 1,519,488 Common Shares, or 22.68% of all Common Shares
outstanding after such conversions, based on the Exchange Ratio (excluding any
adjustments).

THE PRIVATE OFFERING.

In connection with the Restructuring, ACPT will seek to raise up to
$40 million in additional equity capital through the Private Offering of
Preferred Shares. Proceeds from the Private Offering would be used to pay down
existing bank debt and for working capital. A Banc One affiliate has expressed
interest in placing the Preferred Shares and ACPT has granted Banc One a right
of first refusal to serve as placement agent. The terms of the preferred shares
will be negotiated with purchasers, but they may include rights to preferred
distributions, cumulative distributions, and/or liquidation preferences. The
preferred shares also may be convertible into Common Shares at a negotiated
conversion ratio. The Private Offering, if completed, would result in dilution
of the percentage interest of all ACPT shareholders including the Wilson Family,
whose percentage ownership would likely be reduced below 40%. Regardless of the
outcome of the Private Offering, the Wilson Family will take such other actions
as may be necessary to reduce its percentage interest to below 40% in order to
permit American Rental to qualify as a REIT.

PRINCIPAL ADVANTAGES OF THE RESTRUCTURING.

Broader Market for Common Shares than for IGC Units.
---------------------------------------------------

Limited partnership interests which require holders to recognize trade
or business income and losses from partnership operations are generally not
attractive investments for institutions such as mutual funds and pension funds.
ACPT, as a holding company, will receive income principally in the form of
dividends and distributions from its subsidiaries, and its Common Shares should
be a more attractive investment even though ACPT is expected to be treated as a
partnership for federal income tax purposes. Enlarging the group of potential
investors for ACPT Common Shares should produce a more liquid market than
currently exists for IGC Units.

No History of Involvement in Wetlands Litigation.
------------------------------------------------

IGC, which was convicted of federal Clean Water Act violations (which
is currently under appeal), will retain the four parcels of land that were
involved in that litigation and the one additional parcel that was the subject
of a civil suit that was dismissed without prejudice (collectively, the
"Wetlands Properties"). None of the land to be transferred to ACPT was so
implicated and ACPT is not a party to such proceedings. See "Legal Proceedings
- -- IGC" and "IGC After the Restructuring -- Creditors Rights."

-57-

No Adverse Financial Effects from AFH and IWT.
---------------------------------------------

Simplified Tax Reporting.
------------------------

Because ACPT will derive income principally from dividends from
corporations, the items to be reported for federal tax purposes by ACPT
Shareholders generally will be limited to dividends and credits for withholding
taxes paid by IGP Group in Puerto Rico. Shareholders will not have to report
ordinary income or losses from trade or business activity as is currently the
case with IGC. See "Income Tax Reporting -- Federal Income Tax Classification of
ACPT."

Enhanced Financing Opportunities.
--------------------------------

Election of Trustees by Shareholders.
------------------------------------

PRINCIPAL DISADVANTAGES OF THE RESTRUCTURING.

Possible Delisting of IGC Units.
-------------------------------

-58-

wetlands litigation (if such litigation is not ultimately resolved in IGC's
favor) and to enable IGC to satisfy obligations to all of its credit holders.
During the Liquidation period, IGC Units would be expected to trade on the over-
the-counter market. However, the liquidation process does not preclude the
possibility of IGC management soliciting offers to purchase all outstanding IGC
Units or of IGC offering to redeem outstanding IGC Units following a delisting.

No Cash Distributions to IGC Unitholders.
----------------------------------------

Tax Liabilities.
---------------

Gain will be recognized by IGC on the transfer of its interest in IGP
to IGP Group in an amount equal to the appreciation in certain property
indirectly owned by IGP. It is estimated that approximately $6.8 million in gain
will be recognized on this transfer. Gain also will be recognized by IGC on the
transfer of certain interests in the U.S. Apartment Partnerships as a result of
American Housing's assumption of liabilities in excess of the tax basis of the
property contributed to American Housing. It is estimated that approximately
$3.8 million in gain will be recognized on this transfer. Each IGC Unitholder
will recognize that IGC Unitholder's allocable share of such gain. Management is
continuing to explore ways to minimize or eliminate the amount of gain to be
recognized on the Asset Transfers. See "Income Tax Considerations -- Federal
Income Tax Considerations -- Federal Income Tax Classification of IGP Group --
Asset Transfers."

In addition, the income of certain ACPT corporate subsidiaries will be
subject to taxation at the subsidiary level.

Restrictions on Accumulation of Common Shares.
---------------------------------------------

-59-

ACPT PRO FORMA COMBINED FINANCIAL DATA

The unaudited Pro Forma Combined Financial Data of ACPT reflect the following
transactions and adjustments in the case of the Pro Forma Combined Statements of
Operations for the six months ended June 30, 1997 and for the fiscal year ended
December 31, 1996 as if such transactions and adjustments had been completed at
the beginning of the applicable period and, in the case of the Pro Forma
Combined Balance Sheet as of June 30, 1997, as if such transactions and
adjustments occurred or such agreements were in effect as of such date:

* Consummation of the distribution of the Common Shares of beneficial
interest of ACPT.
* Consummation of the acquisition of all of the limited partnership
interests held by investors in certain U.S. and Puerto Rico housing
partnerships in exchange for equity interests in American Housing and
IGP (but not the conversion of such interests into Common Shares).
* Closing of Banc One financing.
* Increased general and administrative costs to operate ACPT on a stand-
alone basis.

The Pro Forma Combined Financial Data of ACPT are unaudited and presented
for informational purposes only and may not reflect ACPT's future results of
operations and financial position or what the results of operations and
financial position of ACPT would have been had such transactions occurred as of
the date indicated. Such pro forma information is based upon the combined
historical balance sheets and statements of income of ACPT. ACPT's unaudited Pro
Forma Combined Financial Data and notes thereto should be read in conjunction
with ACPT's Combined Financial Statements and notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained elsewhere herein.

-60-

AMERICAN COMMUNITY PROPERTIES TRUST ("ACPT")
PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(In thousands)
(Unaudited)

ACPT PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS ACPT
---------- ----------- ---------

REVENUES
Community development-land sales $ 5,567 $ 5,567
Equity in earnings from partnerships
and developer fees 650 $ (621) (A) 29
Rental property revenues 4,300 14,142 (A) 18,442
Management and other fees, substantially
all from related entities 2,269 (1,544) (A) 725
415 (24) (A) 391
------- -------
Total revenues 13,201 25,154
------- -------

EXPENSES
Cost of land sales 3,459 3,459
Selling and marketing 64 64
General and administrative 3,252 (6) (A) 3,496
250 (D)
Interest expense 1,900 4,398 (A) 6,298
Rental properties operating expense 1,768 5,296 (A) 7,064
Depreciation and amortization 941 2,435 (A) 3,376
Write-off of deferred project costs 6 6
------- -------
Total expenses 11,390 23,763
------- -------

INCOME BEFORE PROVISION FOR INCOME
TAXES AND MINORITY INTEREST 1,811 1,391

PROVISION FOR INCOME TAXES 8 6 (A) 645
631 (E)
------- -------

INCOME BEFORE MINORITY INTEREST 1,803 746
MINORITY INTEREST (13) 78 (A) (76)
(141) (F)
------- -------

NET INCOME $ 1,790 $ 670
======= =======

NET INCOME PER SHARE $.13
=======

WEIGHTED AVERAGE SHARES OUTSTANDING 5,180
=======

This pro forma statement should be read with the accompanying notes.

-61-

AMERICAN COMMUNITY PROPERTIES TRUST ("ACPT")
PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands)
(Unaudited)

ACPT PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS ACPT
----------- ----------- -----------

REVENUES
Community development-land sales $13,674 $13,674
Equity in earnings from partnerships
and developer fees 16,643 $(1,713) (A) 14,784
(146) (B)
Rental property revenues 7,577 28,734 (A) 37,329
1,018 (B)
Management and other fees, substantially
all from related entities 4,816 (1,844) (A) 2,895
(77) (B)
Interest and other income 982 (49) (A) 933
------- -------
Total revenues 43,692 69,615
------- -------

EXPENSES
Cost of land sales 9,378 9,378
Selling and marketing 226 226
General and administrative 6,810 500 (D) 7,310
Interest expense 4,433 8,859 (A) 13,490
198 (B)
Rental properties operating expense 3,245 11,780 (A) 15,507
482 (B)
Depreciation and amortization 1,726 5,086 (A) 6,938
126 (B)
Write-off of deferred project costs 321 321
------- -------
Total expenses 26,139 53,170
------- -------

INCOME BEFORE PROVISION FOR INCOME
TAXES AND MINORITY INTEREST 17,553 16,445

PROVISION FOR INCOME TAXES 3,424 336 (E) 3,760
------- -------

INCOME BEFORE MINORITY INTEREST 14,129 12,685
MINORITY INTEREST (306) 119 (A) (2,406)
(53) (B)
(2,166) (F)
------- -------

INCOME FROM CONTINUING OPERATIONS $13,823 $10,279
======= =======

INCOME FROM CONTINUING OPERATIONS
PER SHARE $ 1.98
=======

WEIGHTED AVERAGE SHARES OUTSTANDING 5,180
=======

This pro forma statement should be read with the accompanying notes.

-62-

AMERICAN COMMUNITY PROPERTIES TRUST ("ACPT")
PRO FORMA COMBINED FINANCIAL DATA
(In thousands)
(Unaudited)

ASSETS
------

ACPT PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS ACPT
----------- ----------- -----------

CASH AND CASH EQUIVALENTS
Unrestricted $ 1,545 $ 2,719 (A) $ 4,652
388 (C)
Restricted 813 668 (A) 1,481
------- --------
2,358 6,133
------- --------

ASSETS RELATED TO RENTAL PROPERTIES
Operating properties, net 38,724 115,998 (A) 154,722
Investment in unconsolidated rental
property partnerships 8,180 (8,180) (A) --
Other receivables, net 373 (353) (A) 20
------- --------
47,277 154,742
------- --------

ASSETS RELATED TO COMMUNITY DEVELOPMENT
Land and development costs
Puerto Rico 36,751 36,751
St. Charles, Maryland 21,735 21,735
Other United States locations -- --
Notes receivable on lot sales and other,
substantially all due from affiliates 6,167 6,167
------- --------
64,653 64,653
------- --------

ASSETS RELATED TO HOMEBUILDING
Investment in joint venture 452 452
------- --------
452 452
------- --------

OTHER ASSETS
Receivables and other 1,734 596 (C) 2,330
Property, plant and equipment, net 484 484
-------- --------
2,218 2,814
-------- --------
TOTAL ASSETS $116,958 $228,794
======== ========

This pro forma statement should be read with the accompanying notes.

-63-

AMERICAN COMMUNITY PROPERTIES TRUST ("ACPT")
PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 1997
(In thousands)
(Unaudited)

LIABILITIES AND CAPITAL
-----------------------

ACPT PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS ACPT
---------- ----------- ----------

LIABILITIES RELATED TO RENTAL PROPERTIES
Recourse debt $ 1,004 $ -- $ 1,004
Non-recourse debt 39,308 116,171 (A) 155,479
Accounts payable and accrued liabilities 2,912 1,753 (A) 4,665
-------- --------
43,224 161,148
-------- --------

LIABILITIES RELATED TO COMMUNITY
DEVELOPMENT
Recourse debt 38,346 16,538 (C) 48,471
(6,413) (C)
Non-recourse debt 2,258 2,258
Accounts payable, accrued liabilities
and deferred income 4,947 (1,597) (C) 3,350
-------- --------
45,551 54,079
-------- --------

OTHER LIABILITIES
Accounts payable and accrued liabilities 2,450 (390) (C) 2,810
750 (D)
Notes payable and capital leases 191 191
Accrued income tax liability-current 3,084 (1,700) (C) 2,351
967 (E)
Accrued income tax liability-deferred 3,942 3,942
-------- --------
9,667 9,294
-------- --------
TOTAL LIABILITIES 98,442 224,521
-------- --------

CONTRIBUTED CAPITAL 18,516 (7,072) (A) 4,273
(5,454) (C)
(750) (D)
(967) (E)
-------- --------
TOTAL LIABILITIES AND CONTRIBUTED CAPITAL $116,958 $228,794
======== ========

This pro forma statement should be read with the accompanying notes.

-64-

AMERICAN COMMUNITY PROPERTIES TRUST ("ACPT")
NOTES TO PRO FORMA COMBINED FINANCIAL DATA

(A) Reflects the exchange of apartment limited partnership interests held by
U.S. and Puerto Rico investors for equity interests in American Housing
Properties L.P. ("American Housing") and Interstate General Properties
Limited Partnership S.E. ("IGP"), respectively. Exchange results in ACPT's
consolidation of all assets, liabilities, revenues, and expenses of the
apartment limited partnerships, which are not currently consolidated by
Interstate General Company L.P. ("IGC") and the elimination of accounting
for the apartment partnerships under the equity method. The exchange will
include the following apartment partnerships: United States - Brookside
Gardens Limited Partnership, Essex Apartments Associates Limited
Partnership, Huntington Associates Limited Partnership, Crossland
Associates Limited Partnership, and Bannister Associates Limited
Partnership; and Puerto Rico - Colinas De San Juan Associates Limited
Partnership, Valle Del Sol Limited Partnership, New Center Associates
Limited Partnership, Carolina Associates Limited Partnership, San Anton
Associates, Turabo Limited Dividend Partnership, Monserrate Associates
Limited Partnership, Jardines De Caparra Associates Limited Partnership,
Bayamon Gardens Associates Limited Partnership, Monte De Oro Limited
Partnership, and Alturas Del Senorial Associates Limited Partnership. The
Exchange Offer is contingent on approval by the limited partners.

(B) Reflects the consolidation of revenues and expenses of four U.S. apartment
limited partnerships for the period January 1, 1996 through March 31, 1996.
IGC acquired a controlling interest in the partnerships on March 31, 1996,
and consolidated the revenues and expenses thereafter.

(C) Reflects the September 1997 closing of a $20 million loan from Banc One of
which $16.5 million was advanced. The following is an analysis of the
sources and uses of the debt proceeds (in thousands):

SOURCES
-------

Proceeds received at closing $16,538
=======

USES
----

Working capital $ 388
Recourse debt repayment 6,413
Accounts payable and accrued liabilities 1,987
Taxes payable 1,700
Deferred finance costs 596
Capital contribution to IGC 5,454
-------
$16,538
=======

-65-

(D) Reflects the increase in general and administrative expenses to operate
ACPT on a stand-alone basis.

(E) Reflects provision for income taxes for American Management and American
Land. A deferred tax asset for American Management and American Land
exists and relates to SCA land and IGC land as it did in connection with
IGC's original organizational structure. The deferred tax asset has not
been recorded in the accompanying pro forma combined balance sheet as it
has been reduced by a valuation allowance of an equal amount.

(F) Reflects income related to minority interest to investors who exchanged
limited partner interests in housing partnerships for equity interests.

-66-

ACPT

ACPT was formed under the Maryland Trust Law as a real estate
investment trust but is expected to be taxed as a partnership. The provisions of
the Maryland Trust Law require at least 75% of the value of ACPT's assets to be
held, directly or indirectly, in real estate assets, mortgages or mortgage
related securities, government securities, cash and cash equivalent items,
including high-grade short term securities and receivables. ACPT was organized
on March 17, 1997, to carry out the Restructuring and, if the Restructuring is
completed, will continue in effect perpetually unless dissolved by action of the
Shareholders. ACPT will be wholly-owned by IGC until completion of the
Distribution. Following the completion of the Restructuring, ACPT will be
engaged in four principal lines of business formerly conducted by IGC: (i)
ownership of rental apartment properties in the United States and Puerto Rico,
(ii) community development in the United States and Puerto Rico, (iii) property
management services in the United States and Puerto Rico, and (iv) development
of commercial rental properties and/or ground leases in Puerto Rico. In
addition, ACPT will be engaged in limited condominium building operations in
Puerto Rico.

The mailing address of ACPT is 222 Smallwood Village Center, St.
Charles, Maryland 20602 and its telephone number is (301) 843-8600.

DISTRIBUTION POLICY

Under the terms of its Declaration of Trust, ACPT is required to make
minimum annual distributions to Shareholders such that the minimum aggregate
amount of all distributions made each year will equal 45% of the net taxable
income allocated to Shareholders in such year, provided that the amount of the
required minimum distribution will be reduced by the amount of taxes paid by
ACPT in Puerto Rico and other foreign countries and certain federal taxes paid
by American Rental with respect to undistributed capital gains. The minimum
distribution may consist of cash dividends and/or distributions of other
property. Any distributions in addition to the required minimum distribution
will be made at the discretion of the Board of Trustees. In making such
determinations, the Board of Trustees will take into account various factors,
including ACPT's anticipated needs for cash for future expansion and
development, current and anticipated expenses, obligations and contingencies,
and other similar working capital considerations.

ACPT and its subsidiaries expect to coordinate the declaration and
payment of dividends and other distributions from such entities in such a manner
that all dividends will be paid by the lower tier entities to ACPT on the same
day that ACPT declares a distribution to Shareholders of record on such date.
Thus, each Shareholder's distribution from ACPT will correspond with its
allocable share of taxable income associated with ACPT's receipt of dividends
from the other entities. See "Income Tax Considerations --

-67-

Federal Income Tax Considerations -- Federal Income Taxation of ACPT and
Shareholders -- Coordination of Allocations and Distributions."

CAPITALIZATION

The following table sets forth the capitalization of ACPT as of June
30, 1997, and pro forma capitalization as of June 30, 1997, after giving effect
to the transactions described in the "ACPT Pro Forma Combined Financial Data."
The capitalization of ACPT should be read in conjunction with ACPT's Combined
Financial Statements and the notes thereto, the "ACPT Pro Forma Combined
Financial Data" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," each contained elsewhere herein.

As of June 30, 1997
---------------------
(In thousands)

Actual Pro Forma (1)
------ -------------

Recourse Debt $39,350 $ 49,475
Non-recourse debt 41,566 157,737
Capital 18,516 4,273
------- --------
Total capitalization $99,432 $211,485
======= ========

(1) Pro forma for (i) the consummation of the Distribution, (ii) the
consummation of the Exchange Offer and (iii) closing of the Banc One
financing. See "ACPT Pro Forma Combined Financial Data."

-68-

MARKET PRICES AND DISTRIBUTIONS

At the date hereof, there is no public trading market for the Common
Shares. ACPT intends to apply for listing of the Common Shares offered hereby on
the AMEX and the PSE.

The IGC Units are listed for trading on the AMEX and the PSE under the
ticker symbol "IGC." The following table sets forth, for the periods indicated,
the closing sale price of the IGC Units as reported on the AMEX in such periods
(and paid in the subsequent period). As of October 1, 1997, the record number of
IGC Unitholders was approximately 300.

1994 High Low Distribution
- ---- --- --- ------------

1st Quarter 7-3/4 6 $ ---
2nd Quarter 7-5/8 6-1/4 $.05
3rd Quarter 9-1/8 6-7/8 $.05
4th Quarter 8-7/8 6 $ ---

1995 High Low Distribution
- ---- --- --- ------------

1st Quarter 7-1/2 3-1/4 (1)
2nd Quarter 4-3/8 3-1/4 $ ---
3rd Quarter 4-3/4 3-1/2 $ ---
4th Quarter 4-1/8 2-15/16 $ ---

_____________
(1) On February 6, 1995, IGC distributed to its Unitholders 5,128,372 Equus
Units, representing in the aggregate beneficial ownership of a 99% limited
partnership interest in Equus.

-69-

1996 High Low Distribution
- ---- --- --- ------------

1st Quarter 4 3 $ ---
2nd Quarter 3-7/8 2-3/4 $.06
3rd Quarter 3 2-3/8 $.05
4th Quarter 3-1/2 2-5/16 $ ---

1997 High Low Distribution
- ---- ---- --- ------------

1st Quarter 3-7/8 2-7/8 $ ---
2nd Quarter 3-13/16 2-15/16 $ ---
3rd Quarter 4 2-7/8 $ ---
4th Quarter to 4-3/4 3-3/4 $ ---
November 5, 1997

-70-

SELECTED COMBINED HISTORICAL FINANCIAL AND OPERATING DATA OF ACPT

The following table sets forth financial and operating information of ACPT
(as defined in Note 1 to the Combined Historical Financial Statements) on a
historical combined basis.

The combined income statement data for the June 30, 1996 and 1997 periods
and for 1992 and 1993 and the combined balance sheet data for June 30, 1996 and
1997 and for 1992, 1993 and 1994 have been derived from unaudited combined
financial statements of ACPT which, in the opinion of management, include all
material adjustments necessary for those periods and were prepared as if ACPT
were a separate entity for all periods presented. The historical combined
financial and operating data is not necessarily indicative of ACPT's future
results of operations or financial condition. The data set forth below should
be read in conjunction with the unaudited Pro Forma Financial Data of ACPT and
the notes thereto; the audited Combined Financial Statements of ACPT and the
notes thereto; and Management's Discussion and Analysis of Financial Condition
and Results of Operations of ACPT included elsewhere in this Information
Statement/Prospectus.

Six Months
Ended June 30, Year Ended December 31,
------------------------ -----------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In thousands, except per share amounts)

Income Statement Data

Land sales $ 5,567 $ 9,739 $13,674 $15,441 $21,168 $16,434 $ 3,289
Rental property revenues 4,300 3,240 7,577 4,642 4,537 2,113 --
Equity in earnings from partnerships
and developer fees 650 15,796 16,643 2,693 5,038 3,901 2,808
Management and other fees 2,269 3,270 4,816 3,894 3,507 4,494 3,856
Interest and other income 415 535 982 693 649 757 4,033

Total revenues 13,201 32,580 43,692 27,363 34,899 27,699 13,986

Cost of land sales 3,459 6,624 9,378 7,801 12,934 11,066 2,735
Interest expense 1,900 2,902 4,433 4,263 4,337 2,042 1,122
General and administrative expense 3,252 3,950 6,810 6,769 6,619 6,288 5,839
Other operating expenses 2,779 2,084 5,518 2,667 2,676 2,419 5,528

Total expenses 11,390 15,560 26,139 21,500 26,566 21,815 15,224
Minority interest (13) (475) (306) (511) (680) (122) (81)
Income tax provision
(benefit) 8 5,339 3,424 1,369 3,304 (1,120) (2) 351
Net income (loss) 1,790 11,206 12,891 (1) 3,983 4,349 6,882 (2) (1,670)(3)

-71-

As of June 30, Year Ended December 31,
------------------------ ----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---- ---- ---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In thousands)

Balance Sheet Data

Assets related to rental properties $ 47,277 $ 52,070 $ 51,524 $ 34,961 $34,884 $ 38,746 $20,147
Assets related to community
development 64,653 62,608 63,981 60,290 50,471 56,154 58,140

Total assets 116,958 122,909 121,243 102,654 92,846 100,616 81,388

Debt related to rental properties
Recourse 1,004 1,241 1,139 1,334 1,559 1,857 7,313
Non-recourse 39,308 39,179 39,508 22,650 22,771 22,457 --

Debt related to community
development
Recourse 38,346 41,244 41,343 52,341 44,751 47,217 48,960
Non-recourse 2,258 2,062 2,153 2,034 4,270 14,775 9,927
Total liabilities 98,442 103,935 102,826 91,140 84,312 96,146 81,472

Capital 18,516 18,974 18,417 11,514 8,534 4,470 (84)

Six Months
Ended June 30, Year Ended December 31,
----------------- ----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

Operating Data

Rental apartment units
managed at end of period 8,139 8,085 8,139 8,085 8,085 8,029 7,907
Units under construction -- 54 -- 54 -- 56 --

Community Development
Residential lots sold 46 314 406 113 101 180 74
Residential lots transferred
to Company's rental
property operations -- -- -- 54 -- 56 --
Commercial and business
park acres sold 9 5 5 20 76 12 1
Undeveloped acres sold 381 -- -- 2 20 27 46

(1) Includes a $932,000 reduction for an extraordinary item-early
extinguishment of debt.
(2) Includes a $1,371,000 benefit for the cumulative effect of a change in
accounting principle to reflect the adoption of SFAS No. 109,
"Accounting for Income Taxes".
(3) Includes a $2,336,000 reduction for a provision for restructure.

-72-

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION

GENERAL.

ACPT was formed on March 17, 1997 as a new business without prior
operations in order to succeed to the principal real estate assets and
businesses of IGC as a result of the Restructuring. The following discussion
and analysis of results of operations of ACPT for the years ended December 31,
1996 and 1995 and the six months ended June 30, 1997 and 1996 reflects the
actual results of operations for such periods associated with the assets and
businesses of IGC that will be transferred to ACPT in the Restructuring. This
discussion should be read in conjunction with the Combined Financial Statements
of ACPT and accompanying notes appearing elsewhere in this Information
Statement/Prospectus. In particular, Note 1 to the Combined Financial
Statements of ACPT details the assets and businesses that are the subject of the
following discussion and analysis.

Historically, ACPT's operations and financial results have been
significantly affected by the cyclical nature of the real estate industry.
Accordingly, ACPT's historical financial statements may not be indicative of
future results.

FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996.

Community Development Operations.
--------------------------------

Community development land sales revenue decreased 43% to $5,567,000
(of which $3,070,000 were to affiliates) during the first six months of 1997
compared to $9,739,000 (of which $6,706,000 were to affiliates) during the first
six months of 1996 primarily due to a decrease of residential lot sales in
Puerto Rico. These lots are sold to homebuilders in bulk and there were fewer
sales transactions. The timing of these sales cause fluctuations when comparing
quarterly results. Even though the sales revenues were down, the gross margin
during the first six months of 1997 increased to 38% compared to 32% in the 1996
period. This increase is primarily due to the mix of sales. Commercial lot
sales as a percent of total lot sales were 9% and 0% during the first six months
of 1997 and 1996, respectively. U.S. commercial land sales produce the highest
gross margins since their sales prices are higher and they require less
development than the business park and residential land. In addition, during
the 1997 period, 53% of the sales revenue was generated by an undeveloped bulk
parcel with a low acquisition cost.

-73-

Rental Property Revenues, Net of Operating Expenses.
---------------------------------------------------

Rental properties revenues, net of operating expenses, increased 38%
to $2,532,000 during the first six months of 1997 as compared to $1,839,000
during the same period in 1996. As of April 1, 1996, four additional
partnerships were consolidated when they became majority owned through an
acquisition of additional limited partnership interests.

Equity in Earnings from Partnerships and Developer Fees.
-------------------------------------------------------

Equity in earnings decreased $15,146,000 to $650,000 during the first
six months of 1997 from $15,796,000 during the first six months of 1996. During
March 1996, ACPT completed the sale of four Puerto Rico apartment projects. The
properties, totalling 918 rental units, were sold under the 1990 Low Income
Housing Preservation and Resident Homeownership Act ("LIHPRHA"). This decrease
was primarily due to the $14,538,000 earned on the LIHPRHA sale during the 1996
period and the elimination of the equity in earnings in the four partnerships
consolidated during the 1997 period.

Management and Other Fees.
-------------------------

Management and other fees decreased $1,001,000, (31%), in the first
six months of 1997 compared to 1996. This decrease was due primarily to special
management fees of $1,362,000 earned in the first quarter of 1996 from the
LIHPRHA transaction and the elimination of the management fees in the four
partnerships consolidated during the entire first six months in 1997, offset in
part by fees of $619,000 earned from the refinancing of two apartment complexes
in the first six months of 1997.

Interest Expense.
----------------

Interest expense decreased $1,002,000 to $1,900,000 during the first
six months of 1997 compared to $2,902,000 during the same period in 1996. This
decrease is primarily attributable to $500,000 of loan fees incurred during the
first six months of 1996 and reduced outstanding debt balances during the 1997
period, offset in part by interest attributable to the additional four
properties consolidated April 1, 1996, as discussed above.

General and Administrative Expense.
----------------------------------

General and administrative expenses decreased by $698,000 to
$3,252,000 in the first six months of 1997 compared to $3,950,000 during the
same period in 1996 as a result of management's continued focus on cost
efficiency.

-74-

FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995.

Community Development Operations.
--------------------------------

Community development land sales decreased in 1996 as compared with
1995 by approximately $1,767,000 due primarily to reduction of commercial lot
sales, offset in part by increased residential lot sales in Puerto Rico.
Community development land sales to affiliates (primarily IGC homebuilding
operations) were $10,066,000 in 1996 as compared to $4,108,000 in 1995. The
U.S. residential lot sales volume has continued to be unfavorably impacted by
competitive market conditions. The effect of this decline in U.S. residential
lot sales was offset by 1996 residential lot sales in Puerto Rico.

The gross profit margins for 1996 and 1995 were 31% and 49%,
respectively. This decrease in gross profit margin was due primarily to the
change in the mix of sales. U.S. commercial sales as a percent of land sales
revenue were 0% in 1996 as compared to 24% in 1995. U.S. commercial land sales
produce the highest gross margins since their sales prices are higher and they
require less development than business park and residential land.

Rental Property Revenues Net of Operating Expenses.
--------------------------------------------------

Rental property revenues, net of operating expenses, increased 47% to
$4,332,000 during 1996 as compared to $2,947,000 during 1995. As of April 1,
1996, four additional partnerships were consolidated when they became majority
owned through an acquisition of limited partnership interests.

Equity in Earnings from Partnerships and Developer Fees.
-------------------------------------------------------

Equity in earnings from partnerships increased to $16,643,000 during
1996 from $2,693,000 during 1995. This increase is attributable to ACPT's share
of a 1996 gain from the sale of four properties. There were no similar
transactions in 1995.

Management and Other Fees.
-------------------------

Management and other fees increased 24% to $4,816,000 during 1996 from
$3,894,000 during 1995. This was due primarily to $1,362,000 of fees earned in
1996 from the sale of four properties, offset by the elimination of $153,000 of
management fees earned from the four partnerships consolidated as of April 1,
1996, the negotiated reduction of $100,000 per year effective June 1, 1996 on
one of the management contracts and an additional $197,000 of deferred
management fees that were recognized in 1995.

-75-

Interest Expense.
----------------

Interest expense increased $170,000 to $4,433,000 during 1996 from
$4,263,000 during 1995 primarily due to the consolidation of the four additional
rental properties partnerships, offset in part by the reduction of non-rental
property loan balances.

General and Administrative Expense.
----------------------------------

General and administrative expenses increased less than 1% to
$6,810,000 during 1996 as compared to $6,769,000 in 1995 primarily as a result
of management's continued focus on cost efficiency of these expenses.

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994.

Community Development Operations.
--------------------------------

Land sales revenues decreased by 27% to $15,441,000 during 1995 as
compared to $21,168,000 during 1994 due primarily to the sale of a shopping
center site in Puerto Rico in 1994.

The gross profit margins for 1995 and 1994 were 49% and 39%,
respectively. This increase in gross profit margin was due primarily to the
change in the mix of sales. Commercial sales as a percent of land sales revenue
were 24% and 6% for 1995 and 1994, respectively. U.S. commercial land sales
produce the highest gross margins since their sales prices are higher and they
require less development than the business park and residential land.

Rental Property Revenues Net of Operating Expenses.
--------------------------------------------------

Rental property revenues, net of operating expenses, increased 5% to
$2,947,000 during 1995 as compared to $2,813,000 during 1994. This increase is
primarily due to increased occupancy rates.

Equity in Earnings from Partnerships and Developer Fees.
-------------------------------------------------------

Equity in earnings decreased 47% to $2,693,000 during 1995 from
$5,038,000 during 1994. This increase is primarily due to $4,807,000 of cash
distributions received by ACPT from property refinancings. There were no
similar transactions in 1995.

-76-

Management and Other Fees.
-------------------------

Management and other fees increased 11% to $3,894,000 during 1995 from
$3,507,000 during 1994 due to the income recognition of reserves on fees
receivable from the management of certain apartment projects from prior years
which were determined to be collectible until 1995.

Interest Expense.
----------------

Interest expense decreased 2% to 4,263,000 during 1995 as compared to
$4,337,000 during 1994 primarily due to the reduction of loan balances in 1995
attributable to the assets that did not qualify for interest capitalization
under development during that period.

General and Administrative Expense.
----------------------------------

General and administrative expenses increased by $150,000 to
$6,769,000 in 1995 as compared to $6,619,000 during 1994. This 2% increase was
primarily attributable to general inflation.

LIQUIDITY AND CAPITAL RESOURCES.

ACPT has historically met its liquidity requirements principally from
cash flow generated from home and land sales, property management fees,
distributions from residential rental partnerships and from bank financing
providing funds for development and working capital.

Over the past several years, cash flows have been constrained because
of the terms of its existing debt agreements and the reluctance of new lending
opportunities as a result of the wetlands litigation (see "Legal Proceedings --
IGC -- Wetlands Litigation"). As a result, substantially all of the cash
generated has been used to pay debt service requirements with existing lenders.
This resulted in limited opportunities for new construction and development.
The recently closed Banc One financing provided funding to commence construction
in Fairway Village, the third village in St. Charles, and will allow ACPT to
retain a greater portion of its U.S. land sales proceeds. ACPT currently has
other development projects in various stages of completion. Substantially all
of the projects under construction have sufficient development loans in place to
complete the construction.

ACPT's principal demand for liquidity are expected to be the continued
funding of its current debt service and operating cost requirements. After the
Distribution, management expects to obtain additional funding which can be used
to fund new community development projects. Such sources of funding may
include, but are not limited to, excess operating cash flows, secured or
unsecured financings, private or

-77-

public offerings of debt or equity securities and proceeds from sales of
properties. Once the initial funding is obtained, management anticipates that
ACPT will establish a pipeline of development that can provide a steady cash
stream to fund debt service requirements and additional development. There is
no assurance that sufficient funds will be obtained to provide funding for the
initial pipeline of development or to meet its current debt service needs.

FUNDS FROM OPERATIONS.

Funds from operations ("FFO"), based on the revised definition adopted
by the Board of Governors of the National Association of Real Estate Investment
Trusts ("NAREIT") and as used herein, means net income (determined in accordance
with generally accepted accounting principles or "GAAP"), excluding
extraordinary losses from debt restructuring and sales of property, plus
depreciation and amortization of real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures. FFO was developed by NAREIT as
a relative measure of performance and liquidity of an equity REIT in order to
recognize that income-producing real estate historically has not depreciated on
the basis determined under GAAP. ACPT calculates its FFO using NAREIT's
definition of FFO adjusted to include the gains from sale of property sold in
the normal course of business. ACPT believes that its FFO presentation more
properly reflects its operating results.

FFO is used by industry analysts as a supplemental measure of an
equity REIT's performance. American Rental, a subsidiary of ACPT, consisting of
36% of ACPT's assets will operate as a qualified REIT and therefore FFO is shown
for comparison purposes. However, ACPT will operate as a trust which will be
considered a partnership for Federal tax purposes. FFO should not be considered
an alternative to net income or other measurements under generally accepted
accounting principles as an indicator of operating performance, or to cash flows
from operating, investing or financing activities as a measure of liquidity.

-78-

Six Months
Ended June 30, Years Ended December 31,
-------------- ------------------------
1997 1996 1995 1994
---- ---- ---- ----
(In thousands)

Combined net income $1,790 $ 12,891 $3,983 $4,349
Extraordinary item-early extinguishment
of debt -- 932 -- --
Gains or loss on sales of property -- -- -- 120
Depreciation and amortization 941 1,726 841 843
Amortization of deferred financing costs
and depreciation of furniture fixtures
and equipment (322) (888) (253) (255)
Adjustment for investments in unconsolidated
partnerships and joint ventures 503 (12,329) 891 715
Other (a) -- 13,092 -- --
------ -------- ------ ------
Combined Funds from Operations $2,912 $ 15,424 $5,462 $5,772
====== ======== ====== ======

Weighted Average Shares Outstanding 5,180 5,180 5,179 5,114
====== ======== ====== ======

(a) Represents ACPT's share of gain on the sale of four properties recognized
by an unconsolidated partnership.

-79-

BUSINESS AND PROPERTIES OF ACPT

Following completion of the Restructuring, ACPT will be engaged in
four principal lines of business formerly conducted by IGC:(i) ownership of
rental apartment properties in the United States and Puerto Rico, (ii) community
development in the United States and Puerto Rico, (iii) property management
services in the United States and Puerto Rico, and (iv) development of
commercial rental properties and/or ground leases in Puerto Rico. In addition,
ACPT will be engaged in limited condominium building operations in Puerto Rico.
Set forth below is a brief description of these businesses as they will be owned
and conducted following the Restructuring.

RENTAL APARTMENT PROPERTIES.

United States.
-------------

ACPT, indirectly through its REIT subsidiary American Rental and
American Rental's limited partnership subsidiary American Housing, will hold
interests in 13 U.S. Apartment Partnerships that own and operate apartment
facilities in Maryland and Virginia. The U.S. Apartment Partnerships own a
total of 2,246 rental units. Each of the apartment properties is financed by a
mortgage that is non-recourse to the apartment partnership. HUD provides rent
subsidies to residents of 993 of the apartment units. In addition, 110 units
are leased pursuant to HUD's Low Income Housing Tax Credit program, and 200
other units are leased under income guidelines set by the Maryland Community
Development Administration. The remaining units are leased at market rates.

The partnership agreements of the U.S. Apartment Partnerships provide
that American Housing currently receives between 50% and 99.9% of distributable
surplus cash from operations, refinancings or dispositions as general partner in
seven of the partnerships. In two of these partnerships, American Housing also
receives 25.5% of the distributable surplus cash from operations as a limited
partner. In five of the partnerships, American Housing receives 0% to 5% of the
distributable surplus cash from operations as general partner until the limited
partners have received cash distributions equal to their contributed capital.
Thereafter, American Housing as general partner will share in 50% of the
distributable cash flow from operations, refinancings and dispositions. In two
of these partnerships, American Hosing currently also receives 51% of the cash
distributions as limited partner. Once the limited partners have received cash
distributions equal to their contributions and American Housing's general
partner's distributions increase to 50%, American Housing's limited partner
distributions will decrease to 50%, American Housing's limited partner
distributions will decrease to 25.5%. American Housing directly and indirectly
currently receives 100% of the distributable cash flow from operations in one of
the partnerships. If the Exchange Offer is completed, American Housing will
hold up to 100% of the interests in each U.S. Apartment Partnership.

-80-

The table below sets forth the name of each U.S. Apartment
Partnership; the number of rental units in the property owned by such
partnership; the project cost; the percentage of such units under lease; and the
expiration date for any subsidy contract:

6/30/97
No. of Project Expiration
Apt. Cost Occupancy of Subsidy
Units (in thousands) at 6/30/97 Contract
------ -------------- ----------- ----------

Bannister Associates Limited
Partnership (1,2) 208 $ 5,080 95% 1998
Brookside Gardens Limited
Partnership (6) 56 2,686 80% N/A
Crossland Associates Limited
Partnership (5) 96 3,342 77% N/A
Fox Chase Apartments General
Partnership (7) 176 7,875 89% N/A
Headen House Associates Limited
Partnership (1) 136 6,003 98% 2000
Huntington Associates Limited
Partnership (1) 204 10,444 98% 2000
Lakeside Apartments Limited
Partnership (8) 54 4,105 81% N/A
Lancaster Apartment Limited
Partnership (3) 104 4,943 83% N/A
New Forest Apartments General
Partnership (7) 256 13,738 90% N/A
Palmer Apartments Associates
Limited Partnership (4) 152 5,720 86% 2000
Wakefield Terrace Associates
Limited Partnership (1,2) 204 6,438 89% 1998
Wakefield Third Age Associates
Limited Partnership (1,2) 104 3,142 97% 1998
Essex Apartments Associates
Limited Partnership (1) 496 19,212 99% 2000
----- -------

2,246 $92,728
===== =======

(1) Receives subsidies under Section 8 of the National Housing Act.
(2) Receives interest subsidies under Section 236 of the National Housing Act.
(3) Not subsidized, but 51% of the units are subject to income guidelines set
by the Maryland Community Development Administration ("MCDA").
(4) 56 units are subsidized and 96 units are not subsidized, but 51% of the
non-subsidized units are subject to income guidelines MCDA.
(5) Not subsidized.
(6) Not subsidized, but all units are set aside for low to moderate income
tenants over 62 years of age under provisions set by the Low Income Housing
Tax Credit ("LIHTC") program.
(7) Not subsidized, but 20% of the units are subject to income guidelines set
by Sections 4a and 103b of the Internal Revenue Code of 1954.
(8) Not subsidized, but all units are set aside for low to moderate income
tenants over 55 years of age under provisions set by the LIHTC program.

-81-

Puerto Rico.
-----------

In addition, ACPT, indirectly through its partnership subsidiary IGP
Group, and IGP Group's partnership subsidiary IGP, will hold interests in 11
Puerto Rico Apartment Partnerships that own and operate a total of 14 apartment
facilities in Puerto Rico. The Puerto Rico Apartment Partnerships own a total
of 3,045 rental units, all of which are subject to rent subsidies from HUD. The
Monte de Oro and New Center properties are financed by mortgages that are
recourse to IGP, but the other properties held by the Puerto Rico Apartment
Partnerships are financed by mortgages that are non-recourse to the partners.

Four of the partnership agreements of the Puerto Rico Apartment
Partnerships provide that IGP currently receives 50% of the net cash flow from
operations. In the remaining seven partnerships, IGP receives a 0% to 5%
interest in profits, losses and net cash flow from operations until such time as
the limited partners have received cash distributions equal to their capital
contributions. Thereafter, IGP will share in 50% to 60% of cash distributions
from operations, refinancing and disposition. As a result of loans made to six
of the Puerto Rico Apartment Partnerships, IGP also holds notes payable by such
partnerships that are required to be paid prior to the making of other
distributions. If the Exchange Offer is completed, IGP will hold up to 100% of
the interests in each Puerto Rico Apartment Partnership.

-82-

The table below sets forth the name of each Puerto Rico Apartment
Partnership; the number of rental units in the property owned by such
partnership; the project cost; the percentage of such units under lease; and the
expiration date for any subsidy contract:

6/30/97
No. of Project Expiration
Apt. Cost Occupancy of Subsidy
Units (in thousands) at 6/30/97 Contract
------ -------------- ---------- ----------

San Anton 184 $ 4,573 99% 1998
Monte de Oro (1) 196 6,625 41% 1997
New Center (1) 196 6,660 65% 1998
Monserrate I 304 11,352 99% 1999
Alturas del Senorial 124 4,661 100% 1999
Jardines de Caparra 198 7,307 99% 2000
Colinas de San Juan 300 11,994 99% 2001
Bayamon Gardens 280 13,559 100% 2011
Vistas del Turabo 96 3,351 100% 2021
Monserrate II (2) 304 12,194 100% 2020
Santa Juana (2) 198 7,421 98% 2020
Torre De Las Cumbres (2) 155 6,585 100% 2020
De Diego (2) 198 7,489 99% 2020
Valle del Sol 312 15,211 100% 2003
----- --------

3,045 $118,982
===== ========

(1) Property being converted into condominiums. See "-- Condominium
Conversions."
(2) This property is owned by Carolina Associates L.P., a Maryland limited
partnership in which IGP holds a 50% interest.

Government Regulation.
---------------------

HUD subsidies are provided principally under Sections 8 and 236 of the
National Housing Act. Under Section 8, the government pays to the applicable
apartment partnership the difference between market rental rates (determined in
accordance with government procedures) and the amounts that the government deems
the residents are able to afford. Under Section 236, the government provides
interest subsidies directly to the applicable apartment partnership through a
reduction in the property's mortgage interest rate and with a corresponding
reduction in resident rental

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rates. In order to comply with the requirements of Section 8 and Section 236,
residents are screened by American Management or IGP for eligibility under HUD
guidelines. Subsidies are provided according to the terms of long-term
contracts between the federal government and the apartment partnerships.

Cash flow from those projects whose mortgage loans are still insured
by FHA, or financed through the housing agencies in Maryland, Virginia, Puerto
Rico or Washington, D.C. (the "State Financing Agencies") are subject to
guidelines and limits established by the apartment partnerships' regulatory
agreements with HUD and the State Financing Agencies. The regulatory agreements
also require that if the cash from operations generated by an apartment property
has exceeded the allowable cash distributions, the surplus must be deposited
into restricted escrow accounts held by the mortgagee of the property and
controlled by HUD or the applicable State Financing Agency. Funds in these
restricted escrow accounts may be used for maintenance and capital improvements
with the approval of HUD and/or the State Finance Agency.

The federal government has virtually eliminated subsidy programs for
new construction of low and moderate income housing by profit-motivated
developers such as ACPT. As a result, no new construction of apartment projects
is expected in Puerto Rico and any new apartment properties developed by ACPT in
the U.S. most likely will offer market rate rents.

The subsidy contracts for ACPT's investment apartment properties are
scheduled to expire between 1997 and 2020. In addition, the long term subsidy
contracts for six Puerto Rico properties that are scheduled to expire in 2011,
2020 or 2021 may be cancelled by the applicable Puerto Rico Apartment
Partnership in 2000 (for contracts to expire in 2020) or 2001 (for contracts to
expire in 2011 or 2021) and thereafter every five years until expiration. Under
a recently enacted law, HUD may renew expiring subsidy contracts on a year to
year basis, and ACPT may seek to have the contracts for certain properties
renewed.

HUD also is seeking Congressional authority to convert expired
contracts to resident-based vouchers. This would allow residents to choose
where they wish to live. This can potentially impact the income stream of
certain properties. However, ACPT will actively maintain its properties in a
manner designed to preserve their values and retain residents.

HUD also is exploring a program known as "portfolio re-engineering" or
"mark-to-market." This would assist owners of Section 8 and HUD-insured
properties that could not meet loan obligations under the proposed resident-
based voucher system. ACPT will monitor the progress of this proposal and its
impact on the properties in which it holds interests through the apartment
partnerships.

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Upon the termination or cancellation of any existing subsidy
contracts, ACPT may choose to convert apartment units in Puerto Rico for sale as
condominiums. Substantially all of its units were designed for this potential.
However, because of the adverse tax consequences that would result from the
conversion of apartment properties in the U.S. into condominiums, ACPT
anticipates that its U.S. apartment properties with subsidy contracts would be
offered at market rate rents upon expiration of the applicable subsidy
contracts. See "-- Condominium Conversion."

Competition.
-----------

ACPT's investment properties that receive rent subsidies are not
subject to the market conditions that affect occupancy at properties with market
rate rents. These subsidized properties average approximately 99% occupancy
rates year round. ACPT's apartments in St. Charles that have market rate rents
are impacted by the supply and demand for competing rental apartments in the
area, as well as the local housing market. When for sale housing becomes more
affordable due to lower mortgage interest rates or softening home prices, this
can adversely impact the performance of rental apartments. Conversely, when
mortgage interest rates rise or home prices increase, the market for rental
units may benefit.

CONDOMINIUM CONVERSION.

Puerto Rico.
-----------

Most of the apartment properties in Puerto Rico were designed, located
and maintained with the expectation that they might be converted into
condominiums upon the expiration of subsidy contracts 20 to 40 years after
construction. The existing debt on most of the Puerto Rico apartment properties
is low when compared to present values. In addition, the demand for centrally
located residential units within the San Juan metropolitan area, coupled with
the acceptance of the condominium concept in Puerto Rico, make condominium
conversions of the Puerto Rico apartment units an attractive strategy.

ACPT's indirect subsidiary IGP has a record of success in this
conversion procedure, having previously converted 1,800 units in Puerto Rico
owned by IGP and certain affiliates. These were properties which proved to be
unsuccessful as market rent apartments. Their conversion to condominiums
permitted IGP and the affiliates to profit from these properties despite a
relatively high debt structure.

Currently, IGP is in the process of converting the Monte de Oro and
New Center properties into condominiums. In compliance with HUD regulations,
tenants at Monte de Oro and New Center (each of which has 196 units) have been
notified of their obligation to vacate their units by December 1997 and March
1998, respectively, which are the dates on which the subsidy contracts for the
properties expire. Upon expiration

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of the subsidy contracts, the tenants remaining in the buildings will be given
vouchers by HUD which tenants can use to relocate to other properties.
Construction of the improvements to be made at the properties will commence as
soon as practicable following vacancy and is expected to be completed in six
months. Interim financing required to complete the improvements has been
obtained. All units at both properties are targeted to be sold by late 1999.

The subsidy contracts for eight of the properties owned by the Puerto
Rico Apartment Partnerships expire no later than 2003, and the contracts for the
remaining properties may be cancelled by the applicable partnership in either
2000 or 2001 and every five years thereafter. ACPT may determine to convert
some or all of such properties into condominiums upon the expiration or
cancellation of the contracts.

United States.
-------------

Because of the risk that sales of condominium units by American
Housing would constitute "prohibited transactions" under the rules governing
REITs, which would subject the profits from such sales to a 100% tax, ACPT
currently does not intend to convert any of the properties owned by the U.S.
Apartment Partnerships into condominiums. See "Income Tax Considerations --
Federal Income Tax Considerations -- Federal Income Tax Classification of
American Rental -- Taxation of American Rental as a REIT."

COMMUNITY DEVELOPMENT.

ACPT's community development assets will consist of more than 4,800
acres of developed and undeveloped land located in the master planned
communities of St. Charles, Maryland, and Parque Escorial, in Carolina, Puerto
Rico. The land in both communities will be developed by ACPT and its affiliates
for a variety of residential uses, including single-family homes, townhomes,
condominiums and apartments, and commercial and industrial uses. ACPT may also
develop for residential use certain land adjacent to the site of a planned
commercial development in Canovanas, Puerto Rico.

St. Charles.
-----------

ACPT, indirectly through American Land, will own the more than 4,500
acres of the planned community of St. Charles. St. Charles contains a total of
approximately 9,100 acres (approximately 14 square miles) located in Charles
County, Maryland, 23 miles southeast of Washington, D.C.

St. Charles is comprised of five separate villages: Smallwood
Village, completed, Westlake Village, which has been substantially completed,
Fairway Village, currently under construction, and Piney Reach and Wooded Glen.
Each village consists of individually planned neighborhoods, and includes
schools, churches, recreation

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centers, sports facilities, and a shopping center. Other amenities include
parks, lakes, hiking trails and bicycle paths. St. Charles also includes an 18-
hole public golf course. Each community is planned for a mix of residential
housing, including detached homes, townhomes, multiplex units and rental
apartments. Typical lot sizes for detached homes range from 5,000 to 8,000
square feet.

IGC's development of St. Charles as a planned unit development ("PUD")
began in 1972 when a comprehensive planned unit development for St. Charles was
approved by the County. This master plan contemplates construction of
approximately 24,730 housing units and 1,390 acres of commercial and industrial
development. At September 30, 1997, there were approximately 11,000 completed
housing units in St. Charles including Carrington Neighborhood which began prior
to 1972 and is not included in the PUD. In addition there are schools,
recreation facilities, commercial, office and retail space in excess of 4.2
million square feet. In St. Charles, ACPT, through outside planners, engineers,
architects and contractors, obtains necessary approvals for land development,
plans individual neighborhoods in accordance with regulatory requirements,
constructs roads, utility facilities and community facilities. ACPT develops
lots for sale for detached homes, townhomes, apartment complexes, and commercial
and industrial development.

The third village, Fairway Village, so named for the existing 18-hole
public golf course which it surrounds, is currently being developed. Its master
plan provides for 3,346 dwelling units consisting of 1,287 acres of land
including an industrial park and 40 acre commercial center.

The last two villages, Wooded Glen and Piney Reach, which include
approximately 3,000 acres, are planned for development after the completion of
Fairway Village. The total number and mix of residential units must be approved
by the County Commissioners before development can begin on these two villages
and there can be no assurances that the total of 24, 730 units in the master
plan can be attained.

Government Approvals

The St. Charles master plan has been incorporated in Charles County's
comprehensive zoning plan. In addition, the Charles County government has
agreed to provide sufficient water and sewer connections for the balance of the
housing units to be developed in St. Charles. Specific development plans for
each village in St. Charles is subject to approval of the County Planning
Commission. Such approvals have previously been received for the villages of
Smallwood, Westlake and Fairway. Approvals have not yet been sought on the
final two villages.

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Competition

Competition among residential communities in Charles County is
intense. Currently, there are approximately 30 subdivisions competing for new
home buyers within five miles of St. Charles. This is the result of several
major national and regional homebuilders having been attracted by the growing
marketplace. Charles County residential building permits have increased yearly
from 1993, with 962 in 1993, 964 in 1994, 965 in 1995, and 1,090 in 1996. In
this very price sensitive market, IGC attempts to position St. Charles to
provide among the lowest priced building lots and homes while offering more
amenities than the competition. ACPT intends to continue this strategy.

Environmental Impact

Management of ACPT believes that the St. Charles master plan can be
completed with respect to ACPT's properties without material adverse
environmental impact and in compliance with governmental regulations. In
preparation for immediate and future development, Phase I Environmental Site
Assessments have been prepared for substantially all of the undeveloped parcels.
The historical use of the land has been farming and forestry and no significant
environmental concerns were found. Jurisdictional determinations for wetlands
have been approved by the Corps for Sheffield Neighborhood, the next phase of
residential development containing 1,642 dwelling units. Management has
developed an Environmental Policy Manual and has established an Environmental
Review Committee and an Environmental Compliance Officer to anticipate
environmental impacts and avoid regulatory violations. However, development can
be delayed while plans are being reviewed by local, state and federal agencies
for environmentally sensitive areas.

As a result of the Restructuring, the property held by ACPT in St.
Charles will not be subject to the wetlands litigation of IGC. See "The
Restructuring -- Reasons for the Restructuring."

Parque Escorial.
---------------

ACPT, indirectly through IGP Group and IGP will hold an 80% interest
in LDA, the partnership that in 1989 acquired the 431 acre site of the former El
Comandante Race Track. LDA has developed and sold 119 acres, and continues to
own 312 acres of developed and undeveloped land at this site which has been
established as the planned community of Parque Escorial. Parque Escorial is
located approximately six miles from the central business district in San Juan,
Puerto Rico. The master plan for Parque Escorial was approved in 1992 and
contemplates the construction of 2,700 dwelling units of various types on 312
acres and the development of 120 acres for commercial, office and light
industrial uses.

-88-

Development of Parque Escorial began in 1994 with the sale of 61 acres
of commercial land to Wal-Mart, which is now designing the second phase of a
480,000 square foot shopping center on the tract. Wal-Mart and Sam's Club
stores, each consisting of 125,000 square feet, opened in 1995. An additional
12 acres of commercial land have been sold subsequently by LDA for prices up to
$1.1 million per acre. Residential development began in 1996 after contracts
for 516 housing units were settled. The first 216 of these units will be "walk-
up" condominiums built and sold by a joint venture that will be 50% owned by IGP
Group.

Government Approvals

Parque Escorial's master plan has been approved but specific site
plans are subject to planning commission review and approval. LDA has secured
agreements with the Puerto Rico Aqueduct and Sewer Authority to provide for
adequate water and sewer capacity for the first 1400 units, which includes the
commercial space.

Competition

The scarcity of developable land in the San Juan metropolitan area
creates a favorable market for home sales at Parque Escorial. Competition for
home sales is expected primarily from small scale condominium projects in areas
considered to be similar or less desirable than Parque Escorial. Furthermore,
it is one of only two master planned communities currently under development in
the San Juan metropolitan area. The other is the 500-acre Encantada, which is
marketed toward higher income homebuyers. Parque Escorial's home prices appeal
primarily to entry level purchasers. In addition, Encantada's developer is
building all the homes in the community, while Parque Escorial features three
separate homebuilders in its first phase, providing more selections for the
consumer.

Environmental Impact

Management of IGC believes that the Parque Escorial master plan can be
completed without material adverse environmental impact and in compliance with
government regulations. All of the necessary agencies have endorsed Parque
Escorial's environmental impact statement. Wal-Mart has provided mitigation for
11.87 acres of wetlands impacted by their development of the shopping center
site and other land.

COMMERCIAL RENTAL PROPERTIES.

LDA also owns a parcel of land of approximately 540 acres adjacent to
the El Comandante Race Track in Canovanas, Puerto Rico. At present, LDA is
evaluating the viability of developing and/or leasing the land for a fully
integrated entertainment complex consisting of movie studios, an amphitheater
with a capacity of 20,000, and an amusement park. Preliminary agreements have
already been executed

-89-

pursuant to which LDA will construct and lease movie studio facilities to an
entity specializing in renting such facilities. Portions of the land may also
be developed for residential use if commercial development or leasing is not
feasible.

PROPERTY MANAGEMENT.

ACPT, indirectly through its subsidiary American Management, will own
and operate the United States property management business currently operated by
IGC. In connection with this business, American Management will earn fees from
the management of 4,176 rental apartment units, including 2,246 units owned by
the U.S. Apartment Partnerships. Management fees for the U.S. apartment
properties are based on a percentage of rents ranging from 2.25% to 10.95%. The
management contracts for these properties have terms of one or two years and are
customarily renewed upon expiration but may be terminated on 30 days notice by
either party. Management fees for other apartment properties range from 2.5% to
4.5% of rents.

In addition, IGP will earn fees from the management of 3,045 rental
apartment units owned by the 11 Puerto Rico Apartment Partnerships. Management
fees for the apartment properties owned by the Puerto Rico Apartment
Partnerships, like those in the U.S., are based on a percentage of rents ranging
from 2.25% to 10.95% and the management contracts for these properties have
terms of one or two years and are customarily renewed upon expiration. IGP also
is entitled to receive up to an aggregate of $192,000 annually in certain
incentive management fees with respect to six properties owned by the Puerto
Rico Apartment Partnerships. Upon the conversion of such units to condominiums,
the number of units under management, and the corresponding management fees,
will be reduced. However, IGP would receive fees in connection with managing
the conversion process.

IGP currently manages 855 rental apartments owned by a non-profit
entity which acquired the units from IGP in 1996 under the provisions of
LIHPRHA. The management agreements for these properties expire April 1, 2001
but management expects the agreement to be renewed for an additional five year
period. In addition, IGP manages 531 units owned by the Puerto Rico Housing
Finance Agency. These units are expected to be converted to condominiums in
1998 under the management of IGP, which would receive a fee for its services.

HOMEBUILDING IN PUERTO RICO.

ACPT, through IGP Group, holds a 50% interest in Escorial Builders
S.E., a Puerto Rico partnership ("Escorial Builders"), which is a construction
joint venture at Parque Escorial. The remaining interest in the joint venture
is held by an unrelated third party which is the general contractor for the
project. Escorial Builders has acquired lots at Parque Escorial on which it is
building 216 "walk-up" condominium units. Delivery of the units is expected to
occur over an 18 month period commencing

-90-

in November 1997. Escorial Builders is not expected to develop any additional
projects. However, IGP Group, on its own or through joint ventures, may
construct additional projects if an appropriate opportunity arises.

POLICIES WITH RESPECT TO CERTAIN ACTIVITIES.

The following is a discussion of ACPT's policies with respect to
investment in real estate, affiliate transactions and certain other activities.
ACPT's policies with respect to these activities have been established by the
ACPT Board of Trustees and may be amended or revised from time to time at the
discretion of the ACPT Board of Trustees without a vote of the Shareholders. No
assurance can be given that ACPT's investment objectives will be attained or
that the value of ACPT will not decrease.

Investment Policies.
-------------------

Investments in Real Estate or Interests in Real Estate

ACPT's primary business objective is to maximize Shareholder value by
investing, holding and developing assets that will generate cash available for
distribution to its Shareholders. ACPT's policy is to acquire or develop assets
where ACPT believes that opportunities exist for acceptable investment returns
in areas that utilize the expertise of its management, primarily community
development and commercial and residential rental properties.

ACPT may also participate with other entities in property ownership,
through joint ventures or other types of common ownership. Equity investments
may be subject to existing mortgage financing and other indebtedness which have
priority over the equity interests of ACPT.

Investment in Real Estate Mortgages

While ACPT intends to emphasize equity real estate investments, it
may, in its discretion, invest in mortgages or other real estate interests
consistent with its general business strategy. ACPT may also invest in
participating or convertible mortgages if the ACPT Board concludes that ACPT and
its Shareholders may benefit from the cash flow or any appreciation in the value
of the subject property. Such mortgages are similar to equity participations.
The mortgages in which ACPT may invest may be either first mortgages or junior
mortgages and may or may not be insured by a governmental agency.

Securities of or Interests in Persons Primarily Engaged in Real Estate
Activities and Other Issuers

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ACPT also may invest in securities of entities engaged in real estate
activities or securities of other issuers, including for the purpose of
exercising control over such entities, although it does not intend to do so.

Affiliate Transaction Policy.
----------------------------

ACPT has adopted a policy that it will not, without the approval of a
majority of independent Trustees, (i) acquire from or sell to any Trustee,
officer, employee, or Shareholder who owns more than 2% of the Common Shares (an
"Affiliated Shareholder") or any entity in which a Trustee, officer, employee or
Affiliated Shareholder of ACPT beneficially owns more than a 1% interest, or any
affiliate of any of the foregoing, any property or other assets of ACPT, (ii)
make any loan to or borrow from any of the foregoing persons, or (iii) engage in
any other transaction with any of the foregoing persons.

Certain Other Policies.
----------------------

ACPT intends to operate in a manner that will not subject it to
regulation under the Investment Company Act of 1940. ACPT does not intend to
(i) invest in the securities of other issuers for the purpose of exercising
control over such issuer, (ii) underwrite securities of other issuers, or (iii)
actively trade in loans or other investments.

ACPT may make investments other than as previously described, although
it does not currently intend to do so. ACPT has authority to purchase or
otherwise reacquire shares Common Shares or any of its other securities in the
open market or otherwise and may engage in such activities in the future. The
ACPT Board of Trustees has no present intention of causing ACPT to repurchase
any Common Shares, and any such action would be taken only in conformance with
applicable federal and state laws.

ACPT may in the future make loans to third parties, including, without
limitation, loans to joint ventures in which it participates. ACPT has not
engaged in trading, underwriting or agency distribution or sale of securities of
other issuers, and ACPT does not intend to do so in the future. ACPT's policies
with respect to such activities may be reviewed and modified from time to time
by the ACPT Board of Trustees without the vote of the Shareholders.

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LEGAL PROCEEDINGS

ACPT.

None.

IGC.

Wetlands Litigation.
-------------------

In 1994, the U.S. Attorney for the District of Maryland ("U.S.
Attorney") commenced a federal grand jury investigation regarding actions by IGC
in developing certain parcels in St. Charles, Maryland. The parcels were
identified by the U.S. Army Corps of Engineers (the "Corps") as wetlands within
its regulatory jurisdiction. In October 1995, the grand jury issued an
indictment charging IGC, SCA and IGC's Chairman, James J. Wilson, with four
felony and four misdemeanor counts of violations of Section 404 (wetlands) of
the U.S. Clean Water Act. The charges related to discharge of fill materials
into wetlands within the Corps' regulatory jurisdiction without a permit. The
violations charged were to have occurred on four parcels totaling approximately
50 acres out of the approximately 4,400 acres IGC had developed in St. Charles.
At the same time, the U.S. Attorney filed a civil action charging nine separate
civil violations of the U.S. Clean Water Act with respect to the four parcels
involved in the criminal action and one additional parcel. The civil action was
dismissed without prejudice, and thus may be refiled.

On February 29, 1996, IGC, SCA and Mr. Wilson were convicted in the
U.S. District Court for the District of Maryland (the "District Court") on the
four felony counts. On June 17, 1996, Mr. Wilson was sentenced to 21 months
imprisonment, one year of supervised release and a $1,000,000 fine. IGC and SCA
were fined $2,000,000 and $1,000,000, respectively, placed on probation for five
years and ordered to implement a wetlands restoration and mitigation plan, which
IGC's engineers estimate would cost $2,000,000 to $3,000,000. IGC has paid the
aggregate $3,000,000 in fines on behalf of itself and SCA. The Wetlands
Properties subject to this litigation are being retained by IGC which will
remain responsible for restoration and mitigation costs. As a result of the
conviction, the Wetlands Properties are encumbered by a an obligation to impose
a conservation easement and therefore may not be developed at present.

If the wetlands conviction is overturned, IGC would receive a full
refund of the $3,000,000 in fines, and any conservation easements encumbering
the Wetlands Properties would be removed. ACPT would not be entitled to any
portion of the fine refund. Appeals were filed with the U.S. Court of Appeals
for the Fourth Circuit ("Appeals Court"), and Mr. Wilson's prison sentence was
stayed pending the outcome of the appeals. The Appeals Court heard the oral
arguments on March 3, 1997, and a ruling is expected during the fourth quarter
of 1997. Management believes that IGC,

-93-

SCA and Mr. Wilson have numerous and legitimate grounds for the appeal. The
appeal may result in the conviction being upheld, overturned or remanded to the
District Court for retrial. In the event that the criminal conviction is
overturned as a result of the appeal, the U.S. Department of Justice may appeal
such decision of the Appeals Court to the United States Supreme Court. In
addition, the U.S. Attorney may refile at any time the civil action relating to
the Wetlands Properties that was dismissed without prejudice by the District
Court. Any determination in a civil action adverse to IGC may result in the
imposition of fines and substantial remediation costs on IGC.

On October 23, 1997, the District Court denied a motion by IGC and SCA
to stay, pending resolution of IGC's and SCA's appeal, the restoration and
mitigation obligations with respect to the Towne Center South land and an
additional parcel. IGC and SCA have appealed this decision to the Appeals Court.

Other Litigation.
----------------

In 1994, SCA and IGC, as its general partner, filed two claims against
Charles County, Maryland and its County Commissioners in the Maryland Tax Court,
a state administrative agency, seeking compensation for school sites that SCA
previously had deeded to the County. The actions seek to enforce an agreement
settling litigation between the parties that was entered into in 1989 as well as
rights under Charles County law. Under the terms of the settlement agreement,
the County agreed to credit SCA for school sites contributed and to repay to SCA
any excess school impact fees paid. IGC and SCA seek $5,500,000, equal to the
fair market value of the school sites. SCA's and IGC's claims have not yet been
decided by the Tax Court. Any recovery will be for the benefit of IGC and not
ACPT.

In a separate proceeding, SCA and IGC, as its general partner, filed
suit in 1997 against Charles County and its County Commissioners in the Circuit
Court for Charles County to enforce another provision of the 1989 settlement
agreement. IGC and SCA claim that the County has failed to conduct an
appropriate water and sewer connection fee study as the basis on which to set
such fees for the St. Charles communities. This matter has been the subject of
extensive previous litigation, and in 1992 the Circuit Court for Charles County
rendered judgment in favor of SCA and IGC requiring the County to conduct an
appropriate study. That decision was affirmed in 1995 by the Court of Special
Appeals of Maryland. The litigation filed by SCA and IGC in 1997 seeks to
enforce the prior court orders that require the County to conduct the
appropriate water and sewer connection fee study, to reduce the connection fees
paid prospectively in the St. Charles communities, and to obtain repayment of
excess fees paid in the past. The matter has not yet been decided by the
Circuit Court for Charles County. SCA has assigned its rights under the
settlement agreement to ACPT. However, any damages awarded in respect of excess
sewer connection fees paid prior to the Distribution would be retained by SCA.

-94-

IGC PRO FORMA CONSOLIDATED FINANCIAL DATA

The unaudited Pro Forma Consolidated Financial Data of IGC reflects
IGC and its continuing businesses subsequent to the Restructuring and the
Distribution for the six months ended June 30, 1997 and for the year ended
December 31, 1996, as if the Restructuring and the Distribution had been
completed at the beginning of the applicable period and as of June 30, 1997, as
if the Restructuring and the Distribution were in effect as of such date. The
Pro Forma Consolidated Financial Data of IGC are unaudited and provided for
informational purposes only and do not purport to be indicative of the results
that actually would have been obtained if the Restructuring and the Distribution
had been effected on the dates indicated or of the results that may be obtained
in the future.

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INTERSTATE GENERAL COMPANY L.P. ("IGC")
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(In thousands)
(Unaudited)

IGC PRO FORMA
HISTORICAL (A,B,D) ACPT (B,C,D) IGC (E)
------------------ ------------ ---------

REVENUES
Community development-land sales $ 5,689 $ 5,567 $ 122
Homebuilding-home sales 3,642 -- 3,642
Equity in earnings from partnerships
and developer fees 1,259 650 609
Investment in gaming properties 549 -- 549
Rental property revenues 4,300 4,300 --
Management and other fees, substantially
all from related entities 2,269 2,269 --
Interest and other income 597 415 182
------- ------- -------
Total revenues 18,305 13,201 5,104
------- ------- -------

EXPENSES
Cost of land sales 3,604 3,459 145
Cost of home sales 3,563 -- 3,563
Selling and marketing 571 64 507
General and administrative 3,532 3,252 280
Interest expense 1,926 1,900 26
Rental properties operating expense 1,768 1,768 --
Depreciation and amortization 1,089 941 148
Wetlands litigation expenses 68 -- 68
Write-off of deferred project costs 6 6 --
------- ------- -------
Total expenses 16,127 11,390 4,737
------- ------- -------

INCOME BEFORE PROVISION FOR INCOME
TAXES AND MINORITY INTEREST 2,178 1,811 367

PROVISION FOR INCOME TAXES 112 8 104
------- ------- -------

INCOME BEFORE MINORITY INTEREST 2,066 1,803 263
MINORITY INTEREST (13) (13) --
------- ------- -------

NET INCOME $ 2,053 $ 1,790 $ 263
======= ======= =======

NET INCOME PER SHARE $ .20 $ .35 $ .03
======= ======= =======

WEIGHTED AVERAGE SHARES OUTSTANDING 10,257 5,180 10,257
======= ======= =======

This pro forma statement should be read with the accompanying notes.

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INTERSTATE GENERAL COMPANY L.P. ("IGC")
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands)
(Unaudited)

IGC PRO FORMA
HISTORICAL (A,B,D) ACPT (B,C,D) IGC (E)
------------------ ------------ ---------

REVENUES
Community development-land sales $15,697 $13,674 $ 2,023
Homebuilding-home sales 8,660 -- 8,660
Equity in earnings from partnerships
and developer fees 16,605 16,643 (38)
Investment in gaming properties 4 -- 4
Rental property revenues 7,577 7,577 --
Management and other fees, substantially
all from related entities 4,816 4,816 --
Interest and other income 1,257 982 275
------- ------- -------
Total revenues 54,616 43,692 10,924
------- ------- -------

EXPENSES
Cost of land sales 11,296 9,378 1,918
Cost of home sales 8,661 -- 8,661
Selling and marketing 1,320 226 1,094
General and administrative 7,338 6,810 528
Interest expense 4,507 4,433 74
Rental properties operating expense 3,245 3,245 --
Depreciation and amortization 1,997 1,726 271
Wetlands litigation expenses 973 -- 973
Write-off of deferred project costs 562 321 241
------- ------- -------
Total expenses 39,899 26,139 13,760
------- ------- -------

INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES AND MINORITY INTEREST 14,717 17,553 (2,836)

PROVISION FOR INCOME TAXES 3,634 3,424 210
------- ------- -------

INCOME (LOSS) BEFORE MINORITY INTEREST 11,083 14,129 (3,046)
MINORITY INTEREST (306) (306) --
------- ------- -------

INCOME (LOSS) FROM CONTINUING OPERATIONS $10,777 $13,823 $(3,046)
======= ======= =======

INCOME (LOSS) FROM CONTINUING OPERATIONS
PER SHARE $ 1.05 $ 2.67 $ (.30)
======= ======= =======

WEIGHTED AVERAGE SHARES OUTSTANDING 10,257 5,180 10,257
======= ======= =======

This pro forma statement should be read with the accompanying notes.

-97-

INTERSTATE GENERAL COMPANY L.P. ("IGC")
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997
(In thousands)
(Unaudited)

ASSETS
------

IGC PRO FORMA
HISTORICAL (D) ACPT (C,D) IGC (E)
-------------- ---------- ---------

CASH AND CASH EQUIVALENTS
Unrestricted $ 1,575 $ 1,545 $ 30
Restricted 900 813 87
-------- -------- -------
2,475 2,358 117
-------- -------- -------

ASSETS RELATED TO COMMUNITY DEVELOPMENT
Land and development costs
Puerto Rico 36,751 36,751 --
St. Charles, Maryland 26,691 21,735 4,956
Other United States locations 15,146 -- 15,146
Notes receivable on lot sales and other,
substantially all due from affiliates 15,636 6,167 9,469
-------- -------- -------
94,224 64,653 29,571
-------- -------- -------

ASSETS RELATED TO RENTAL PROPERTIES
Operating properties, net 38,724 38,724 --
Investment in unconsolidated rental
property partnerships 8,180 8,180 --
Other receivables, net 711 373 338
-------- -------- -------
47,615 47,277 338
-------- -------- -------

ASSETS RELATED TO HOMEBUILDING
Homebuilding construction and land 1,578 -- 1,578
Investment in joint venture 452 452 --
Receivables and other 119 -- 119
-------- -------- -------
2,149 452 1,697
-------- -------- -------

OTHER ASSETS
Goodwill, net 1,919 -- 1,919
Deferred costs regarding waste
technology and other projects,
receivables and other 4,914 1,734 3,180
Property, plant and equipment, net 1,163 484 679
-------- -------- -------
7,996 2,218 5,778
-------- -------- -------
TOTAL ASSETS $154,459 $116,958 $37,501
======== ======== =======

This pro forma statement should be read with the accompanying notes.

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INTERSTATE GENERAL COMPANY L.P. ("IGC")
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997
(In thousands)
(Unaudited)

LIABILITIES AND PARTNERS' CAPITAL
---------------------------------

IGC PRO FORMA
HISTORICAL (D) ACPT (C,D) IGC (E)
-------------- ---------- ---------

LIABILITIES RELATED TO COMMUNITY
DEVELOPMENT
Recourse debt $ 39,682 $ 38,346 $ 1,336
Non-recourse debt 2,258 2,258 --
Accounts payable, accrued liabilities
and deferred income 5,151 4,947 204
-------- -------- -------
47,091 45,551 1,540
-------- -------- -------

LIABILITIES RELATED TO RENTAL PROPERTIES
Recourse debt 1,004 1,004 --
Non-recourse debt 39,308 39,308 --
Accounts payable and accrued liabilities 2,912 2,912 --
-------- -------- -------
43,224 43,224 --
-------- -------- -------

LIABILITIES RELATED TO HOMEBUILDING
Recourse debt 242 -- 242
Accounts payable, accrued liabilities
and deferred income 2,271 -- 2,271
-------- -------- -------
2,513 -- 2,513
-------- -------- -------

OTHER LIABILITIES
Accounts payable and accrued liabilities 3,627 2,450 1,177
Notes payable and capital leases 650 191 459
Accrued income tax liability-current 3,086 3,084 2
Accrued income tax liability-deferred 4,338 3,942 396
-------- -------- -------
11,701 9,667 2,034
-------- -------- -------
TOTAL LIABILITIES 104,529 98,442 6,087
-------- -------- -------

PARTNERS' CAPITAL 49,930 18,516 31,414
-------- -------- -------

TOTAL LIABILITIES AND PARTNERS'
CAPITAL $154,459 $116,958 $37,501
======== ======== =======

This pro forma statement should be read with the accompanying notes.

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INTERSTATE GENERAL COMPANY L.P. ("IGC")
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL DATA

(A) Certain amounts presented for December 31, 1996 in the Pro Forma
Consolidated Balance Sheet and Pro Forma Consolidated Statement of Income
have been reclassified to conform with the June 30, 1997 presentation.

(B) Land sales occurred during the six months ended June 30, 1997 and the year
ended December 31, 1996, as IGC's land business sold lots to its
homebuilding business. Gross profit on these sales, historically
eliminated in consolidation, has been included in IGC and ACPT's historical
results for these periods based upon the estimated fair market value of the
land (based on comparable sales to third parties).

(C) Reflects the registration, initiation of operations, and distribution of
all Common Shares of American Community Properties Trust ("ACPT"). ACPT,
which was formed on March 17, 1997, is expected to carry out the
restructuring of IGC. IGC expects to transfer its principal operations to
ACPT and distribute to the partners of IGC, including its Unitholders, all
the Common Shares of ACPT.

(D) As of and during the six months ended June 30, 1997 and during the year
ended December 31, 1996, an intercompany note receivable and intercompany
debt existed between IGC and LDA. Interest income and expense and the note
receivable and payable amounts, historically eliminated in consolidation,
have been included in IGC and ACPT's historical results for these periods.

(E) Reflects IGC's remaining operations after the reclassifications as
described in (C) and (D). Column balances equal "IGC Historical" column
balances less "ACPT" column balances. IGC's remaining operations include
the U.S. homebuilding business, waste technology business, land subject to
the wetlands conviction and certain other parcels of land.

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IGC AFTER THE RESTRUCTURING

NO CHANGE IN PARTNERSHIP STRUCTURE.

After the Restructuring, IGC will remain a publicly-traded limited
partnership under the existing Partnership Agreement. No amendments to the
Partnership Agreement are being made as a part of the Restructuring. IGC's
executive offices are located at 222 Smallwood Village Center, St. Charles,
Maryland 20602.

DESCRIPTION OF IGC'S CONTINUING BUSINESS.

After the Restructuring, IGC will continue to own the Retained Assets,
which in management's view do not fit ACPT's business plan. These assets
include the Wetlands Properties, the LDA Note, all of the shares of AFH and IWT,
all of the voting stock of HDAMC, an indirect 50% interest in Brandywine
Investment Associates L.P., which owns land in Brandywine, Maryland, a 100%
interest in Pomfret LLC, which owns land in Pomfret, Maryland, the Montclair
land, and the Westbury land, as well as fractional interests in HDA, Chastleton
and Coachman's L.P. and the beneficial interest in the CWT Trust. Management of
IGC believes that the Retained Assets will enable IGC to continue significant
operations following the Distribution. However, unless IGC prevails in its
appeal of the wetlands conviction or IWT receives one or more contracts to
develop a waste treatment facility, IGC's operations may not generate
significant profits or enable IGC to make distributions to IGC Unitholders.
American Management will perform certain administrative and support services for
IGC pursuant to the Service Agreement. See "Transactions with Related Parties -
- - Service Agreement."

Real Estate Development.
-----------------------

Brandywine

SCA, in which IGC holds a 99% interest, owns a 50% interest in
Brandywine Investment Associates L.P., a Maryland limited partnership.
Brandywine Associates owns Brandywine Village, a 277 acre tract in Prince
George's County, Maryland. The property currently is in the planning,
engineering and approval phase, and consists of two approved comprehensive
design zones that permit residential, retail commercial, office commercial and
light industrial uses. The value of IGC's interest in Brandywine Village has
been appraised at $8,885,000 as of June 9, 1997. See "Appraisals."

Pomfret

IGC holds a 100% interest in Pomfret LLC, which owns an 812 acre tract
in Charles County, Maryland. The site, which currently is in the planning
phase, is zoned for low density residential use, which would permit 812 one acre
home sites or up to

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1,420 single family detached units with a central sewer system. The value of
IGC's interest in the Pomfret land has been appraised at $3,248,800 as of
December 31, 1996. See "Appraisals."

Montclair

IGC currently owns 77 townhome lots in the planned 4,000 residential
unit development of Montclair in Prince William County, Virginia. The lots are
approved and engineered and IGC is seeking a third party builder to purchase
them. The value of IGC's interest in Montclair has been appraised at $1,574,000
as of May 12, 1997. See "Appraisals."

Westbury

IGC owns approximately 340 lots for residential use in the master
planned community of Westbury in St. Mary's County, Maryland. IGC's holdings
consist of 38 townhome and 54 single family lots that currently are under
development, plus an additional 250 lots that have been approved for single
family use and that IGC anticipates will be developed over the next several
years. The value of IGC's interest in 51 of the Phase II single family lots has
been appraised at $210,000 as of May 20, 1997. See "Appraisals."

Wetlands Properties

As a result of the wetlands conviction, the Wetlands Properties are
encumbered by an obligation to impose a conservation easement and therefore may
not be developed. Any easements will be removed if the wetlands conviction is
ultimately reversed. The Wetlands Properties include the Towne Center South
land in St. Charles, which prior to the wetlands litigation was held by IGC for
commercial development.

Interstate Waste Technologies; CWT Trust.
----------------------------------------

Following the Distribution, IGC plans to continue the development and
expansion of the waste treatment facility development business currently
conducted by IWT. In addition, IGC will provide funding for the CWT Trust and
thereby fund development of the waste treatment facility business of CWT. IGC's
objective is to establish the waste treatment business in a single viable
operating company that can be sold or spun off as a separate company to IGC
Unitholders in the future. CWT has been invited by the government of the
Caribbean nation of St. Marteen to submit a proposal for the development of a
waste treatment facility that would use IWT's innovative waste disposal and
conversion technology.

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American Family Homes.
---------------------

Management of IGC intends to seek a buyer, merger candidate or
strategic investing partner for AFH. However, there can be no assurance that
any such transaction will be consummated on terms acceptable to IGC. In the
interim, AFH will continue its homebuilding activities in Virginia, North
Carolina and South Carolina.

CAPITAL RESOURCES OF IGC FOLLOWING THE RESTRUCTURING.

In the event that the wetlands conviction is ultimately upheld, IGC,
in addition to the total of $3 million in fines imposed on IGC and SCA which
already have been paid by IGC, will be responsible for paying the costs incurred
in implementing the restoration and remediation plan ordered by the district
court. IGC estimates that the costs of the restoration plan will be
approximately $2 to $3 million. The terms of the Banc One credit facility
provide that IGC may borrow up to $2 million solely for use to pay remediation
costs resulting from the wetlands litigation. See "Transactions with Related
Parties -- Banc One Financing".

The appeal of IGC's wetlands conviction to the Appeals Court may
result in the conviction being upheld, overturned or remanded to the District
Court for retrial. In the event that the criminal conviction is overturned as a
result of the appeal to the Appeals Court, the U.S. Department of Justice may
appeal such decision of the Appeals Court to the United States Supreme Court.
In addition, the U.S. Attorney may refile at any time the civil action relating
to the Wetlands Properties that was dismissed without prejudice by the District
Court. Any determination in a civil action adverse to IGC may result in the
imposition of substantial fines and remediation costs on IGC.

Management of IGC believes that the Banc One credit facility and the
value of the Retained Assets will be sufficient to pay the remediation and
restoration costs imposed by the wetlands conviction or any damages resulting
from a civil suit. IGC would sell, or borrow against the value of, the Retained
Assets to the extent necessary to fund any costs relating to the wetlands
litigation that exceed the amount available under the Banc One credit facility.

In the event that the wetlands conviction is ultimately resolved in
favor of IGC, the $3 million in fines already paid by IGC would be fully
refunded to IGC. ACPT would not be entitled to any portion of such refund.

LISTING OF IGC UNITS.

Management of IGC believes that the assets retained by IGC after the
Distribution will enable IGC to continue significant operations, and IGC intends
to take steps to continue the listing of the IGC Units on the AMEX and the PSE.
Such actions may include a reverse split with respect to the outstanding IGC
Units that may have the

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effect of increasing the trading price of IGC Units. Continued listing may not
be possible, however, due to the disposition of a substantial portion of IGC's
assets. Should this prove to be the case, it is management's view that IGC
should be liquidated after the Restructuring. Accordingly, IGC proposes to
liquidate IGC in the event that it is no longer possible to continue its listing
on the American and Pacific exchanges. However, the final consummation of the
Liquidation and dissolution of IGC would be subject to the relisting of IGC
Units on the AMEX and PSE in the event that the wetlands litigation is
ultimately resolved in IGC's favor. The period of the Liquidation of IGC would
be expected to last for a period no shorter than the period during which IGC
remains on probation as a result of the wetlands litigation, if such litigation
is not ultimately resolved in IGC's favor. During the Liquidation period, IGC
Units would be expected to trade on the over-the-counter market. However, the
liquidation process does not preclude the possibility of IGC management
soliciting offers to purchase all outstanding IGC Units or of IGC offering to
redeem outstanding IGC Units following a delisting.

CREDITORS RIGHTS.

If, in a lawsuit by an unpaid creditor or representative of creditors
of IGC, such as a trustee in bankruptcy, a court were to find that, at the time
IGC made the Distribution, IGC (i) was insolvent, (ii) was rendered insolvent by
reason of the Distribution, (iii) was engaged in a business or transaction for
which IGC's assets constituted unreasonably small capital, or (iv) intended to
incur, or believed that it would incur, obligations beyond its ability to pay
such obligations as they matured, such court could void the Distribution as a
fraudulent transfer or conveyance and require recipients of Common Shares to
return them (or equivalent amounts) to IGC or to a fund for the benefit of its
creditors.

As described below, IGC's management believes that following the
Distribution IGC will be solvent, will have sufficient capital for carrying on
its business and will be able to pay its obligations, including those related to
the wetlands litigation, as they become due. There can be no assurance,
however, that a court would value IGC's assets on the same basis to determine
whether IGC was insolvent at the time of, or after giving effect to, the
Distribution, or that, regardless of the method of valuation, a court would not
determine that IGC was insolvent at such time, that it was engaged in a business
for which its remaining assets constituted unreasonably small capital or that
IGC was generally unable to pay its obligations as they became due.

In addition, the Delaware Act prohibits limited partnerships from
making distributions to limited partners to the extent that, after giving effect
to such distribution, certain liabilities of the partnership exceed the fair
value of its assets. The Delaware Act further provides that recipients of a
distribution who knew at the time of such distribution that such distribution
violated the Delaware Act are liable to the partnership for the amount of the
distribution. However, limited partners receiving an unlawful distribution who
were unaware at the time of such distribution that it was unlawful are not
liable to

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the partnership. IGC's management believes that after giving effect to the
Distribution, IGC's liabilities will not exceed the fair value of its assets and
therefore that the Distribution will not violate the Delaware Act.

MANAGEMENT

MANAGEMENT OF IGC.

IGMC will continue as the managing general partner of IGC after the
Restructuring, and James J. Wilson will continue as the Chairman of the Board of
IGMC and the Chief Executive Officer of IGC. However, following the
Distribution, no Trustee or officer of ACPT will serve as a director or officer
of IGMC. Consequently, J. Michael Wilson, Thomas Wilson, Donald Blakeman, Jorge
Colon-Nevares, Edwin Kelly, Paul Resnik, Carlos R. Rodriguez and Francisco
Arrivi Cros, who currently are directors and/or officers of IGMC and who are or
will be Trustees and/or officers of ACPT will resign from their positions at IGC
prior to the Distribution. Following the Distribution, the directors of IGC, in
addition to James Wilson, will be , , and
, and the principal executive officers of IGC will be ,
, and .

BOARD OF TRUSTEES.

The business and affairs of ACPT will be managed under the direction
of the Board of Trustees. At the effective time of the Restructuring, the Board
of Trustees will have four members, all of whom will be persons who will be
employees of ACPT or a member of the Wilson Family. In addition, three other
persons who will not be employees of ACPT or any affiliated company or a member
of the Wilson Family have agreed to serve as Trustees beginning immediately
after the completion of the Restructuring.

Pursuant to the terms of the Declaration of Trust, the Trustees are
divided into three classes. One class will hold office initially for a term
expiring at the annual meeting of Shareholders to be held in 1999, a second
class will hold office initially for a term expiring at the annual meeting of
Shareholders to be held in 2000, and a third class will hold office initially
for a term expiring at the annual meeting of Shareholders to be held in 2001.
At each annual meeting of Shareholders, the successors to the class of Trustees
whose terms expire at that meeting will be elected to hold office for a term
continuing until the annual meeting of Shareholders held in the third year
following the year of their election and the election and qualification of their
successors. See "Certain Provisions of Maryland Law and ACPT's Declaration of
Trust and Bylaws."

-105-

TRUSTEES AND EXECUTIVE OFFICERS.

The following table sets forth certain information with respect to the
persons who will be the Trustees and the executive officers of ACPT at the
effective time of the Restructuring and the persons who have agreed to serve as
Trustees immediately following the completion of the Restructuring. Additional
biographical information follows the table. All executive officers are elected
by the Board of Trustees and may be removed, with or without cause, at the
discretion of the Board of Trustees.

NAME AGE POSITION TERM EXPIRES
---- --- -------- ------------

J. Michael Wilson 32 Trustee, Chairman and
Chief Executive Officer

Edwin L. Kelly 55 Trustee, President and
Chief Operating Officer

Francisco Arrivi Cros 52 Trustee; Executive Vice
President and Treasurer

Donald G. Blakeman 65 Trustee(1)

Thomas Shafer Trustee(1)

Thomas B. Wilson 35 Trustee

Jorge Colon Nevares Trustee(1)

Paul A. Resnik 50 Senior Vice President

Carlos R. Rodriguez 52 Vice President

_______________________

(1) To become Trustees immediately following completion of the Restructuring.

J. MICHAEL WILSON has been a Director of IGMC since December 1996 and
in January 1997 was named its Vice Chairman, Chief Financial Officer and
Secretary, and Chief Financial Officer of IGC. He has been President and Chief
Operating Officer of IBC since 1994 and a director since 1991. He served as
Vice President of IBC from 1991 to 1994. He has been a director of Wilson
Securities Corporation since 1991, and President since March 1996. He was Vice
President of Wilson Securities Corporation from 1991 to 1996. He has been Vice
President of IWT since 1994. He served as Real Estate Finance Division Loan
Administrator for Chase Manhattan Bank in New York from 1989 to 1991. He
graduated from Manhattan College, New York with a degree in Business Finance in
1989.

-106-

EDWIN L. KELLY was named President and Chief Operating Officer of IGMC
and IGC in January 1997. He previously served as Senior Vice President and
Treasurer of IGC and Senior Vice President of IGMC since their formation in
1986. He has served in various executive positions with IGC and its predecessor
companies since 1974, including as a Director of IGMC from 1986 to present.
Prior to joining Interstate, he was a manager in the Consulting Division of
Arthur Andersen & Co.

FRANCISCO ARRIVI CROS was Senior Vice President of IGC from 1990 to
1996 and since 1997 has been Executive Vice President of IGC. He was named as a
director of IGMC in April 1997. He also has served as President of IGP since
1996. Before joining IGC, he was Vice President of The Chase Manhattan Bank
N.A. in Puerto Rico from 1977 to 1990, and manager of its Real Estate Finance
Division from 1985 to 1990.

DONALD G. BLAKEMAN has been a Director of IGMC since its inception in
1986. He served as Executive Vice President of IGMC and IGC from 1986-1996. He
was Secretary of IGMC from 1990 to 1995. He served in various executive
positions with IGC and its predecessor companies from 1968 to 1996. He was
named President of Equus and Equus Management Company ("EMC") in January 1996,
and in connection with those roles he resigned as an officer of IGC in August
1996. He has served as a Director of EMC since its formation in 1994.

THOMAS SHAFER is a registered Professional Engineer specializing in
real estate evaluation and land development. He has been a partner of Whitman,
Requardt and Associates, LLP, an engineering and architectural firm, since 1976
and its managing partner since 1989. Mr. Shafer serves on the Business Advisory
Committee of Mayor Kurt Schmoke of Baltimore and as the President and Chairman
of the Board of the Charles Village Community Benefits District and the Charles
Village Community Foundation, Inc. Mr. Shafer is a member of the Urban Land
Institute, the National Society of Professional Engineers and the American Water
Works Association. His firm has provided engineering services to IGC in
connection with the St. Charles development for thirty years. Mr. Shafer will
retire as an active partner of Whitman, Requardt on December 31, 1997.

THOMAS B. WILSON has been a Director of IGMC since December 1995. He
has been a Vice President of IBC since 1994. Since 1994, he has been President
of El Comandante Operating Company, Inc. ("ECOC"), which leases El Comandante
Race Track in Puerto Rico from a subsidiary of Equus.

JORGE COLON NEVARES has been a director of IGMC since 1989. He serves
as a Director of ECOC, which leases El Comandante Race Track in Puerto Rico from
a subsidiary of Equus. Since 1978, he has been President and Chief Executive
Officer of Wendco of Puerto Rico, Inc., the franchisee of Wendy's for Puerto
Rico. He is an officer and a Director of Multisystems Restaurants, Inc. and
Twenty First Century

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Restaurants, Inc., the franchisee for Sizzler and T.G.I. Friday's in Puerto
Rico. He is a Director of the Foundation for the University of Puerto Rico and
Chairman of the Board of Trustees for Universidad Central del Caribe School of
Medicine.

PAUL A. RESNIK has been Senior Vice President of IGC since 1993 and
Vice President of IGMC since 1989. He served as Vice President of IGC from 1987
to 1993. From 1986 to 1987 he was Vice President of Multi-Management, Inc., a
property management and real estate development company in Cleveland, Ohio.
From 1978 to 1986 he was General Manager of Naiman Development Company, a
developer of commercial properties and property management company in Cleveland,
Ohio.

CARLOS R. RODRIGUEZ has been Vice President of IGC since February
1989. From 1984 to 1989, he was Senior Vice President/Construction Manager of
SORO Construction Control, Inc., a construction management company in Houston,
Texas. From 1980 to 1984 he was Vice President/Construction of Motley &
Associates, a real estate development company in Houston, Texas.

COMMITTEES OF THE BOARD OF TRUSTEES.

Following the Restructuring, the Board of Trustees will have the
following committees:

Audit Committee.
---------------

The Audit Committee will consist of no fewer than two members, each of
whom will be an Independent Trustee. The responsibilities of the Audit
Committee will include making recommendations concerning the engagement of
independent public accountants, reviewing with the independent public
accountants the plans for and results of the annual audit engagement, approval
of any other professional services provided by the independent public
accountants, approval of the fees paid to the independent public accountants for
audit and non-audit services, and periodically reviewing, with the assistance of
the independent public accountants, the adequacy of ACPT's internal accounting
controls.

Compensation Committee.
----------------------

The Compensation Committee will consist of no fewer than two members,
each of whom will be an Independent Trustee. The Compensation Committee will be
responsible for the administration of the Share Incentive Plan and for approving
the compensation of the executive officers of ACPT.

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Nominating Committee.
--------------------

The Board of Trustees does not have a standing committee for the
recommendation of nominees for election to the Board of Trustees. This function
is performed by the entire Board of Trustees.

COMPENSATION OF TRUSTEES.

Trustees that will not receive salaries from ACPT will receive
directors' fees established by the Board of Trustees. Initially, these Trustees
will be compensated at a rate of $5,000 per quarter, $1,400 per meeting and out
of pocket travel reimbursements for meeting attendance. Trustees who are not
employees of ACPT also are eligible to receive Share based incentive
compensation under the Trustees Share Plan described below.

EXECUTIVE COMPENSATION.

The following table sets forth the estimated annualized base salary
expected to be paid following the Restructuring to each of ACPT's executive
officers

ESTIMATED ANNUAL
NAME POSITION BASE SALARY

J. Michael Wilson Chairman, Chief Executive $ 90,000
Officer

Edwin L. Kelly President, Chief Operating 225,000
Officer

Francisco Arrivi Cros Executive Vice President, 225,000
Treasurer

Paul Resnik Senior Vice President 169,700

Carlos R. Rodriguez Vice President 133,500

All Executive Officers
as a Group $843,200

Subsequent to completion of the Restructuring ACPT intends to adopt one or more
incentive plans for its key employees in addition to the Share Incentive Plan
described below.

EMPLOYMENT AGREEMENTS.

Each of Messrs. Kelly, Arrivi and Resnik will enter into an employment
agreement (the "Employment Agreements") with American Management to become

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effective on the date of the Distribution. The Employment Agreement of Messrs.
Kelly and Arrivi will replace employment agreements that they currently have
with IGC. Pursuant to the Employment Agreements, Mr. Kelly will serve as
President and Chief Operating Officer and will be paid an annual base salary of
$225,000, Mr. Arrivi will serve as Executive Vice President and will be paid an
annual base salary of $225,000, and Mr. Resnik will serve as Senior Vice
President and will be paid an annual base salary of $169,700. The Employment
Agreements will provide for salary raises at the discretion of the Board of
Trustees. Each of the Employment Agreements is annually renewable by the Board
of Trustees.

Under the terms of the Employment Agreements, if the executive's
employment with American Management is terminated by American Management other
than for "cause" (as defined in the Employment Agreement), or is terminated by
the executive for "good reason" (as defined in the Employment Agreement) the
terminated executive will be entitled to continue to receive his base salary for
months following the date of termination. The Employment Agreement also
provides for payment to the covered executive of severance compensation in an
amount equal to months base salary if within two years of any "change in
control" (as defined in the Employment Agreement) the covered executive is
terminated by American Management for any reason or voluntarily resigns.

SHARE INCENTIVE PLANS.

ACPT has adopted the 1997 Share Incentive Plan (the "Share Incentive
Plan") and the 1997 Trustees Share Incentive Plan (the "Trustee Share Plan") to
provide for Common Share-based incentive compensation for officers, key
employees and Trustees. The Share Incentive Plan and the Trustee Share Plan
will be substantially similar to the existing plans of IGC. The summaries of
the Share Incentive Plan and Trustee Share Plan set forth below are qualified in
their entirety by reference to the text of the Plans, copies of which have been
filed as exhibits to the Registration Statement of which this Information
Statement/Prospectus is a part.

Employee Plan.
-------------

Under the Share Incentive Plan, the Compensation Committee of the
Board of Trustees may grant to key employees the following types of Share-based
incentive compensation awards ("Awards"): (i) options to purchase a specified
number of Common Shares ("ACPT Options"), (ii) forfeitable Common Shares that
vest upon the occurrence of certain vesting criteria ("Restricted Shares"), or
(iii) Share Appreciation Rights ("ACPT Rights") that entitle the holder to
receive upon exercise an amount payable in cash, Common Shares or other property
(or any combination of the foregoing) equal to the difference between the market
value of Common Shares and a base price fixed on the date of grant. A total of
208,000 Common Shares has been reserved for issuance under the Share Incentive
Plan.

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The Share Incentive Plan authorizes the Compensation Committee to
determine the exercise price and manner of payment for ACPT Options and the base
price for ACPT Rights. The Compensation Committee also is authorized to
determine the duration and vesting criteria for Awards, including whether
vesting will be accelerated upon a change in control of ACPT.

Rights of key employees under Awards are not transferable other than
to immediate family members or by will or the laws of intestate succession.

Trustees Plan.
-------------

The Trustee Share Plan authorizes the Board of Trustees, in its
discretion, to grant to eligible Trustees Awards of the same types and terms of
Awards as provided under the Share Incentive Plan. Only Trustees who are not
employees of ACPT or any affiliated company are eligible to receive Awards under
the Trustee Share Plan. A total of 52,000 Common Shares have been reserved for
issuance under the Trustee Share Plan.

TREATMENT OF IGC OPTIONS AND UNIT APPRECIATION RIGHTS.

In connection with the Distribution, holders of options to purchase
IGC Units ("IGC Options") which have been awarded prior to the Distribution
Date, whether or not such IGC Options have vested, will receive ACPT Options to
purchase one Common Share for every two IGC Options. Likewise, holders of IGC
Unit Appreciation Rights ("IGC Rights") awarded prior to the Distribution Date,
whether vested or not, will receive one ACPT Right for every two IGC Rights.
Holders of IGC Rights or Options will not be required to pay any additional
consideration for, and will not be required to surrender or exchange their IGC
Rights or Options to obtain, such ACPT Rights or Options. Any ACPT Options or
Rights issued in respect of IGC Options or Rights that have not vested at the
time of the Distribution will vest at the same time as the corresponding IGC
Options or Rights.

Consequently, the following Trustees and officers of ACPT who
currently hold IGC Options or Rights will be issued the following number of ACPT
Options or Rights in connection with the Distribution: Francisco Arrivi Cros --
10,000 ACPT Options and 75,000 ACPT Rights; Paul Resnik -- 50,000 ACPT Rights;
Edwin L. Kelly -- 40,000 ACPT Rights; and Carlos R. Rodriguez -- 6,000 ACPT
Options and 4,800 ACPT Rights.

The exercise price for each such ACPT Option, or the base price for
each such ACPT Right, as the case may be, will be equal to (a) the exercise
price of the IGC Options or base price of the IGC Rights in respect of which
such ACPT Options or Rights were issued, multiplied by (b) the percentage
obtained by dividing (i) the average closing price of Common Shares on the AMEX
for the 20 trading days immediately following, but not including, the
Distribution Date (the "ACPT Average") by (ii) the sum of (A) the ACPT Average
and (B) the average closing sale price of IGC Units on the principal exchange on
which they are traded, or, if not traded on an exchange, in the

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over-the-counter market, for the 20 trading days immediately following, but not
including, the Distribution Date (the "IGC Average") multiplied by two. In
addition, the exercise price or base price of each such IGC Option or Right will
be adjusted to equal (a) such exercise price or base price, multiplied by (b)
the percentage obtained by dividing (i) two times the IGC Average by (ii) the
sum of (A) two times the IGC Average and (B) the ACPT Average.

The costs associated with the adjusted IGC Rights and Options
following the Distribution will continue to be borne by IGC, and the cost
associated with the ACPT Rights and Options issued will be borne by ACPT.

RETIREMENT PLANS.

In connection with the Restructuring, all of the current employees of
IGC (except employees of AFH, IWT and James J. Wilson) will become employees of
American Management. American Management will continue and assume all of IGC's
obligations under the retirement savings plan currently maintained by IGC (the
"Retirement Plan"). Employees are generally eligible to participate when they
complete one year of service. The Retirement Plan is a defined contribution
plan which provides for contributions by American Management for the accounts of
eligible employees in amounts equal to 4% of base salaries and wages not in
excess of the U.S. Social Security taxable wage base, and 8% of salaries
(limited to $150,000) that exceeded that wage base. Eligible employees also may
make voluntary contributions to their accounts and self-direct the investment of
their account balances in various investment funds that may be selected under
the plan.

OWNERSHIP OF COMMON SHARES

The following table sets forth certain information with regard to the
beneficial ownership of IGC Units as of October 1, 1997 and the projected
beneficial ownership of Common Shares after giving effect to the Restructuring
based on beneficial ownership of IGC Units as of October 1, 1997, by: (i) each
person who beneficially owns more than 5% of the outstanding IGC Units or would
beneficially own more than 5% of the outstanding Common Shares, (ii) each
Trustee and each named executive officer of ACPT, (iii) each director and named
executive officer of IGMC, (iv) all Trustees and executive officers of ACPT as a
group and (v) all directors and executive officers of IGMC as a group. Except
as otherwise indicated, each person named in the table will have sole voting and
sole investment power with respect to all of the Common Shares shown as
beneficially owned by such person.

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Beneficial Ownership (1)
------------------------
Number of Number of
Name of Beneficial Owner IGC Units Common Shares Percent
- ------------------------ --------- ------------- -------

J. Michael Wilson (2) 215,495 107,748 2.08

Edwin L. Kelly 111,214 55,607 1.07

Francisco Arrivi Cros (3) 10,000 5,000 *

Donald G. Blakeman 377,389 188,695 3.64

Thomas Shafer

Thomas B. Wilson 172,795 86,398 1.67

Jorge Colon Nevares 32,000 16,000 *

Paul Resnik 10,000 5,000 *

Carlos R. Rodriguez (3) 6,000 3,000 *

All Trustees and executive officers of ACPT
as a group (10 persons) (2) (3)

James J. Wilson (4) (5) 30,679 15,340 *

Joel H. Cowan (5) 40,256 20,128 *

All Directors and executive officers of IGMC
as a group (10 persons) (2) (3) 1,005,828 509,914 9.17

Bessemer Interstate Corporation
245 Peachtree Center Avenue #804
Atlanta, GA 30303 522,208 261,104 5.04

Interstate Business Corporation
222 Smallwood Village Center
St. Charles, MD 20602 3,080,515 1,540,258 29.75

Wilson Securities Corporation
222 Smallwood Village Center
St. Charles, MD 20602 1,172,203 586,102 11.32

__________________________
* less than 1%

(1) The beneficial ownership of IGC Units and Common Shares is determined on
the basis of IGC Units directly and indirectly owned by directors and
executive officers of IGMC and Trustees and executive officers of ACPT and
IGC Units to be issued to such persons under options which are exercisable
within the next 60 days. The percentage of ownership is based on the
aggregate number of IGC Units outstanding as of November 1, 1997, plus all
IGC Units issuable upon exercise of options within the next 60 days, for a
total of 10,354,185. At a distribution ratio of one to two, the number of
Common Shares expected to be outstanding immediately following the
Distribution is approximately 5,200,000. The total number of outstanding
ACPT shares does not reflect the results of the Exchange Offer or Private
Offering.

(2) Includes 42,700 IGC Units (.42%) attributable to IGC Units held by Wilson
Family Limited Partnership, a partnership for which J. Michael Wilson
serves as a general partner.

(3) Includes IGC Units subject to options exercisable under the IGC Employees
and Directors Plans of 10,000 and 6,000 for Francisco Arrivi Cros and
Carlos Rodriguez, respectively.

(4) Includes 100 IGC Units (0%) held by his wife, Barbara A. Wilson.

(5) Will remain director of IGMC following its restructuring.

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TRANSACTIONS WITH RELATED PARTIES

SERVICE AGREEMENT.

Following completion of the Distribution, American Management will
provide certain administrative services and support, including rental of office
space, bookkeeping and accounting services and regulatory reporting services, to
IGC pursuant to the Service Agreement. IGC will compensate American Management
on a cost reimbursement basis for expenses incurred by American Management in
providing such services. The Service Agreement will have an initial term of
five years and may be renewed at the option of the parties.

CONSULTING AGREEMENT.

American Management will enter into a consulting and retirement
compensation agreement with IGC's founder and Chief Executive Officer, James J.
Wilson, to become effective on the date of the Restructuring (the "Consulting
Agreement"). The Consulting Agreement will provide for annual cash payments
during the first two years of $500,000 and annual cash payments for eight years
thereafter of $200,000. However, if Mr. Wilson dies or ACPT is sold during the
term of the Consulting Agreement, the agreement provides for a lump sum payment
equal to the lesser of $400,000 and the aggregate of annual payments then
payable under the agreement. During the Consulting Agreement term Mr. Wilson
will remain available to provide consulting services requested from time to time
by the Board of Trustees. Pursuant to the Consulting Agreement, American
Management will reimburse the reasonable costs and expenses incurred by Mr.
Wilson in providing requested consulting services. Mr. Wilson is the father of
J. Michael Wilson and Thomas B. Wilson.

BANC ONE FINANCING.

On September 19, 1997 IGC refinanced substantially all of its U.S.
land development recourse indebtedness pursuant to a Master Loan Agreement dated
August 1, 1997 by and among IGC, ACPT, St. Charles Community LLC and Banc One.
To date approximately $14 million in proceeds of this $20 million facility were
used as follows: $6.8 million to satisfy existing indebtedness to NationsBank,
$1.7 million to pay Puerto Rico income tax, $2.5 million for various accounts
payable, and $3 million to pay in full the wetlands fine. In addition, the Banc
One facility provides for up to $4 million in community development financing
for Fairway Village, and $2 million for payment of wetlands remediation
expenses.

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the first 2 years of the loan Banc One is generally entitled to receive 50% of
the net sales proceeds of any collateral as a mandatory principal curtailment
with the percentages increasing to 60% in year 3, 70% in year 4, 80% in year 5,
90% in year 6 and 100% in year 7.

In connection with the loan, IGC granted Banc One an option to
purchase 150,000 IGC Units at an exercise price of $3.0016 per unit. During any
year that the loan remains outstanding, IGC is required to grant Banc One 75,000
additional options with an exercise price equal to the lesser of the Strike
Price or the market price on the date of grant.

JOINT LITIGATION WITH CHARLES COUNTY.

In connection with the land transfers, SCA has assigned to ACPT its
rights under the 1989 settlement agreement with Charles County. However, with
respect to pending litigation to enforce the settlement agreement, SCA has
retained its claim for any monetary damages for excess sewer connection fees and
impact fees paid prior to the Distribution that may be awarded in as a result of
such litigation. See "Legal Proceedings -- IGC -- Other Litigation."

SERVICES OF WHITMAN, REQUARDT.

Whitman, Requardt & Associates LLP, an engineering and consulting firm
of which Thomas Shafer is the managing partner, has regularly performed
engineering, surveying, inspection and environmental assessment services for IGC
and its predecessors with respect to the St. Charles land assets for over 30
years and will continue to provide such services for ACPT following the
Restructuring. Mr. Shafer will become a Trustee of ACPT upon completion of the
Distribution. Whitman, Requardt has charged IGC $300,000 for services performed
in 1997, and as of October 31, 1997, IGC owes Whitman, Requardt $75,000 for
services rendered. Following the Distribution ACPT will assume any outstanding
amounts payable to Whitman, Requardt.

NATIONSBANK LETTER OF CREDIT.

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assignment of certain notes payable by Brandywine Investment Associates L.P. and
by IGP's partnership interests in three Puerto Rico Apartment Partnerships.
Additional collateral has been provided by IBC and IBC has undertaken to replace
the NationsBank letter of credit with a letter of credit secured only by assets
of IBC.

PAYMENTS TO IBC FOR SERVICES PROVIDED BY J. MICHAEL WILSON.

J. Michael Wilson, the Chairman of ACPT and President of IBC, will
remain on the payroll of IBC following the Restructuring. ACPT will reimburse
IBC for one half of Mr. Wilson's salary, up to $90,000, plus the amount of
related costs, including FICA and FUTA taxes, incident to such salary.

OTHER TRANSACTIONS.

For a description of other related party transactions involving ACPT,
see Note 9 to the Combined Financial Statements of ACPT.

INCOME TAX CONSIDERATIONS

FEDERAL INCOME TAX CONSIDERATIONS.

This section summarizes the material federal income tax considerations
applicable to the Distribution, holding and disposition of Common Shares and the
possible Liquidation of IGC. This discussion is not a complete analysis of all
the tax considerations and, in particular, does not address all aspects of
taxation that may be relevant to certain types of Shareholders subject to
special treatment under federal income tax laws (for example, life insurance
companies, certain tax exempt organizations, financial institutions, foreign
corporations, and non-resident alien individuals). This discussion and the
discussions that follow relating to certain State and Puerto Rico tax
considerations do not address the tax considerations applicable to (1) the Asset
Transfers, (2) the issuance, holding, or disposition of American Rental
Preferred Shares, or (3) the exchange of limited partnership interests held by
investors in the U.S. Apartment Partnerships or the Puerto Rico Apartment
Partnerships for limited partnership interests in American Housing or IGP
pursuant to the Exchange Offer. This discussion also does not address foreign
tax laws or any United States federal, state, or Puerto Rico tax laws other than
those pertaining to income tax. This discussion assumes that the Shareholders
will hold the Common Shares as capital assets within the meaning of Section 1221
of the Code. Except as noted, the discussion further assumes that Shareholders
will not be Puerto Rico resident individuals, entities organized under the laws
of Puerto Rico, persons engaged in a trade or business in Puerto Rico or trusts
resident in Puerto Rico (a "Puerto Rico Shareholder"). PROSPECTIVE SHAREHOLDERS
ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISERS REGARDING THE TAX
CONSEQUENCES OF THE DISTRIBUTION, HOLDING AND DISPOSITION OF COMMON SHARES.

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No rulings have been requested from the IRS with respect to the
matters discussed in this section. Counsel has assisted in the preparation of,
and has reviewed, the discussion in this section. Counsel is of the opinion
that the discussion fairly summarizes the federal income tax considerations that
are likely to be material to a Shareholder. Although the opinion of Counsel
represents Counsel's best judgement as to the matters discussed herein, it does
not bind the IRS or in any way constitute an assurance that the federal income
tax consequences described herein will be followed by the IRS.

The summary of federal income tax consequences is based on the
provisions of the Code, the United States Department of the Treasury regulations
(the "Regulations"), published rulings of the IRS and judicial decisions as
currently in effect, all of which are subject to change and could be applied
retroactively at any time. Significant changes were made to the Code, including
changes relating to the treatment of partnerships and REITs, by the Taxpayer
Relief Act of 1997 (Pub. L. 105-34) ("1997 Act"). It may be some time before
Regulations or other formal guidance is issued under the 1997 Act. Such
Regulations could interpret the relevant law in a manner that is contrary to
this discussion or contrary to the opinion of Counsel and such interpretation
could be applied retroactively.

FEDERAL INCOME TAX CLASSIFICATION OF ACPT.

Federal Income Tax Classification of ACPT. ACPT has been organized as
-----------------------------------------
an entity that will be treated as a partnership for tax purposes, in part to
avoid the "double" taxation that occurs when a corporation distributes its
profits to its Shareholders and to minimize the aggregate Puerto Rico and
federal income tax imposed on the Puerto Rico source income of IGP Group and its
subsidiaries. Under current law, a partnership is not a taxable entity and
incurs no federal income tax liability. Instead, each partner is required to
take into account in computing such partner's income tax liability such
partner's allocable share of the partnership's income whether or not the
partnership makes a distribution of cash corresponding to such income. Because
American Land and American Management will be classified as corporations for
federal income tax purposes, it generally will not be possible to avoid this
"double" federal income taxation with respect to amounts distributed by American
Land or American Management to ACPT. However, as discussed in greater detail
below, so long as American Rental qualifies as a REIT for federal income tax
purposes, ACPT and its Shareholders will be able to avoid such "double" taxation
with respect to amounts distributed by American Rental to ACPT and, so long as
IGP Group is treated as a partnership for Puerto Rico tax purposes, ACPT and its
Shareholders effectively may be able to avoid a portion of such "double"
taxation through foreign tax credits (or deductions) with respect to Puerto Rico
taxes paid by ACPT with respect to IGP Group's Puerto Rico source income. See
"-- Federal Income Taxation of American Rental," "-- Puerto Rico Income Tax
Classification of IGP Group," and "-- Federal Income Taxation of ACPT and
Shareholders -- Foreign Tax Credit." The achievement of these objectives,
however,

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depends entirely upon ACPT being classified as a partnership and American Rental
being classified as a REIT (rather than either entity being classified as a
"corporation" or an "association" taxable as a corporation) for federal income
tax purposes and IGP Group being treated as a special partnership for Puerto
Rico income tax purposes.

If it were determined that either ACPT or American Rental is taxable
as a corporation, the anticipated tax advantages to ACPT and the Shareholders
would be materially and adversely affected. If ACPT were classified as a
corporation or as an association taxable as a corporation, the profits of ACPT
would be taxed to ACPT as if it were a corporation at the rates applicable to
corporations. Moreover, distributions to the Shareholders would be treated as
corporate distributions, taxable at ordinary income tax rates to the extent of
earnings and profits, or as non-taxable returns of capital or distributions
taxable at capital gains rates, depending upon the circumstances of the
distribution. If American Rental were classified as a corporation or as an
association taxable as a corporation, the profits of American Rental would be
taxed to American Rental as if it were a corporation at the rates applicable to
corporations. Moreover, distributions to ACPT would be treated as corporate
distributions, taxable at ordinary income tax rates, as non-taxable returns of
capital, as distributions taxable at capital gains rates, or as partially or
wholly deductible dividends received by a corporation, depending upon the
circumstances of the distribution. Thus, classification of ACPT or American
Rental as a corporation for federal income tax purposes would frustrate the
objective of eliminating "double" taxation on American Rental profits that are
distributed to ACPT.

IF IGP Group and the Puerto Rico Apartment Partnerships qualify as
special partnerships under Puerto Rico law, they will be treated as partnerships
for Puerto Rico income tax purposes and will not be subject to income tax in
Puerto Rico. Instead, IGP Group's income (primarily in the form of rental
payments with respect to apartments and other real property located in Puerto
Rico and including IGP Group's share of the income of each of the Puerto Rico
Apartment Partnerships) will be taxable to ACPT. ACPT will be treated as a
foreign corporation for Puerto Rico income tax purposes and will be subject to
Puerto Rico income tax on its allocable share of IGP Group's income. To the
extent that ACPT pays Puerto Rico taxes with respect to its Puerto Rico source
income, the Shareholders will be considered to have paid their allocable share
of such Puerto Rico tax which, subject to applicable limitations, may give rise
to a foreign tax credit or a deduction for federal income tax purposes (see "--
Federal Income Taxation of ACPT and Shareholders -- Foreign Tax Credit," below).
However, if IGP Group were treated as a corporation for Puerto Rico tax
purposes, it would be subject to income tax on its Puerto Rico source income and
the Puerto Rico income tax paid by IGP Group would not be treated as taxes paid
by ACPT and would not give rise to foreign tax credits or deductions to the
Shareholders. In addition, such foreign tax credits or deductions generally
would not be available to the Shareholders if ACPT were treated as a corporation
for U.S. tax purposes, regardless of how IGP Group is treated for Puerto Rico
tax purposes.

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The basic source of criteria for classification of an entity for
federal tax purposes is Sections 301.7701-1 through 301.7701-4 of the
Regulations. The Regulations provide that for federal tax purposes, a
partnership is a "business entity" with at least two members that is not treated
as a corporation under Section 301.7701-2(b) of the Regulations. A "business
entity" is any entity recognized for federal tax purposes that is not properly
classified as a trust under Section 301.7701-4 of the Regulations or otherwise
subject to special treatment under the Code. The Regulations clarify that
although some arrangements are called trusts under local law, the term "trusts"
for federal tax purposes generally is limited to arrangements to protect or
conserve property for beneficiaries, and does not include other arrangements,
often known as business or commercial trusts, which are created by the
beneficiaries simply as a device to carry on a profit-making business that
normally would have been carried on though business organizations that are
classified as partnerships or corporations under the Code.

U.S. business entities formed pursuant to a State statute are
classified as corporations under Section 301.7701-2(b) of the Regulations if
such statute describes or refers to the entity as "incorporated" or as a
"corporation," "body corporate," "body politic," "joint stock company," or
"joint stock association." In addition, corporations include all insurance
companies, certain entities conducting banking activities, entities wholly owned
by a State or political subdivision thereof, certain designated foreign
entities, business entities that are specifically taxable as corporations under
another provision of the Code, and certain entities that "elect" under the
Regulations to be treated as corporations for federal tax purposes.

A business entity that is not classified as a corporation under
Section 301.7701-2(b) generally is treated as an "eligible entity" for purposes
of electing its classification for federal tax purposes under Section 301.7701-
3. Unless it elects otherwise, a domestic eligible entity formed after January
1, 1997, is classified as a partnership if it has two or more members or is
disregarded as an entity separate from its owner if it has a single owner.

Even if it satisfies the other requirements to be treated as a
partnership, an organization generally will be taxed as a corporation if it is a
"publicly traded partnership." A partnership is publicly traded if, among other
things, its interests are traded on an established securities market. This rule
does not apply if at least 90% of the organization's income constitutes
"qualifying income." Qualifying income includes interest, dividends and "real
property rents."

ACPT is a Maryland investment trust which has been organized to carry
on a profit-making business. Therefore, ACPT will qualify as a "business
entity" for purposes of the Regulations. Further, ACPT does not come within
those entities classified as corporations under Section 301.7701-2(b) of the
Regulations, and, subject to the discussion below, is not treated as a
corporation under any provision of the Code

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other than Code Section 7701. Thus, as a domestic eligible entity with more
than one member, it will be classified as a partnership absent an affirmative
election to be treated as a corporation for tax purposes.

If the Common Shares are traded on AMEX and/or the PSE, ACPT will be
regarded as a publicly traded partnership. Therefore, for ACPT to qualify as a
partnership for federal income tax purposes, at least 90% of ACPT's income must
be qualifying income. Because ACPT initially will hold only interests in
American Rental, American Land, American Management and IGP Group, it is
anticipated that virtually all of ACPT's income will be in the form of
dividends, including REIT dividends. The Board of Trustees has represented that
at least 90% of ACPT's income will consist of "real property rents," interest
and dividends.

Counsel's Opinion of Federal Income Tax Classification of ACPT.
--------------------------------------------------------------

Covington and Burling is of the opinion, subject to the following
assumptions and representations, that under the Code, the Regulations, published
rulings of the IRS, and judicial decisions, ACPT will be treated as a
"partnership" for federal income tax purposes. In rendering this opinion,
Counsel has reviewed ACPT's Declaration of Trust, Bylaws, and such other
documents as Counsel has considered necessary for purposes of this opinion.

This opinion is based on the assumption that 90% or more of ACPT's
income will be "qualifying income" within the meaning of Section 7704 of the
Code. Counsel has relied on the Trustees' representation that at least 90% of
ACPT's income will consist of dividends. There can be no assurance that the
Trustees' representation accurately predicts the sources of ACPT's income and
that at least 90% of ACPT's income will be qualifying income.

Counsel's opinion further relies upon the following representations
made by the Board of the Trustees of ACPT:

(i) At all times while acting as Trustees of ACPT, the Trustees will
operate ACPT or cause ACPT to be operated in accordance with applicable
provisions of the Act, the Declaration of Trust, and this Information
Statement/Prospectus, including, without limitation, compliance with the
representations herein.

(ii) ACPT shall not make an election to be classified as an association
taxable as a corporation for federal income tax purposes.

(iii)ACPT shall take no action that would cause it to be treated other
than as a partnership for federal income tax purposes under Treas. Reg.
(S)(S)301.7701-1 through 301.7701-4.

(iv) At least 90% of ACPT's gross income will constitute "qualifying
income," as that term is defined in Code Section 7704(d).

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Counsel's opinion is based on the assumption that any successor Trustees of ACPT
will make and satisfy the above representations.

Counsel's opinion further relies upon the following representations
made by ACPT:

(i) ACPT will cause IGP Group to be operated in accordance with applicable
provisions of its Articles of Incorporation, Bylaws, and this Information
Statement/Prospectus, including, without limitation, compliance with the
following representations.

(ii) IGP Group shall take such actions as may be necessary to preserve its
status as a special partnership under applicable Puerto Rico law.

(iii)IGP Group shall make a timely election to be classified as an
association taxed as a corporation for federal income tax purposes.

(iv) IGP Group shall take no action that would cause it to be taxed other
than as a corporation for federal tax purposes.

Counsel's opinion further relies upon the following representations
made by ACPT:

(i) ACPT will cause American Land to be operated in accordance with
applicable provisions of its Articles of Incorporation, Bylaws, and as described
in this Information Statement/Prospectus, including, without limitation,
compliance with the following representations.

(ii) American Land shall take no action that would cause it to be taxed
other than as a corporation for federal tax purposes.

FEDERAL INCOME TAX CLASSIFICATION OF AMERICAN RENTAL.

American Rental will be formed as a Maryland real estate investment
trust and will elect to be treated as a REIT for federal income tax purposes for
its taxable year ending December 31, 1998, and for each subsequent taxable year.
An eligible entity that files an election under Code Section 856(c)(1) to be
treated as a REIT is treated as having made an election under the Regulations to
be classified as an association taxable as a corporation, effective as of the
first day the entity is treated as a REIT. The following is a summary of the
material federal income tax considerations affecting ACPT and its Shareholders
relating to American Rental's treatment as a REIT for federal tax purposes. See
also "-- Federal Income Taxation of ACPT and Shareholders."

REIT Qualification.
------------------

American Rental may elect to be treated as a REIT if it satisfies
certain detailed requirements imposed by the Code. If American Rental qualifies
for taxation as a REIT, it generally will not be subject to corporate income tax
to the extent American Rental currently distributes its REIT taxable income to
its shareholders. This treatment

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effectively eliminates the "double" taxation (i.e., taxation at both the
corporate and shareholder levels) imposed on investments in most regular
corporations. A qualifying REIT, however, may be subject to certain excise and
other taxes, as well as to normal corporate tax on taxable income that is not
currently distributed to its shareholders. See "-- Taxation of American Rental
as a REIT." In addition, if American Rental fails to qualify as a REIT in any
taxable year, it will be subject to federal income tax at regular corporate
rates on all of its taxable income. The current maximum federal tax rate for
corporations is 35%.

General REIT Qualification Requirements.
---------------------------------------

American Rental must be organized as an entity that would, if it does
not maintain its REIT status, be taxable as a domestic corporation. It cannot
be a financial institution or an insurance company, and it must be managed by
one or more trustees or directors. American Rental expects to meet each of
these requirements. American Rental also expects to satisfy the requirements
that are described below concerning share ownership and reporting, the nature
and amounts of American Rental's income and assets, and the levels of required
annual distributions.

Share Ownership, Reporting.
--------------------------

Beneficial ownership of a REIT must be evidenced by transferable
shares or transferable certificates of beneficial interest, which must be held
by 100 or more persons, determined without reference to any rules of
attribution. The "100 person" test must be met for approximately 92% of the
days in each taxable year. All of the voting common stock of American Rental
will be held by ACPT, and non-voting preferred stock will be issued to 200
individual shareholders. The preferred stock will have a liquidation value of
$1,000 per share and will have a 10% cumulative dividend. Thus, at the time of
the Distribution, the stock of American Rental will be held by more than 100
persons. The preferred stock cannot be transferred to any person who already
owns ACPT preferred shares.

In addition, not more than 50% of the value of the American Rental
stock may be held, directly or indirectly, applying certain constructive
ownership rules, by five or fewer individuals at any time during the last half
of each of American Rental's taxable years ("closely held" test). The Private
Offering, if completed, would result in dilution of the percentage interest of
all ACPT shareholders including the Wilson Family, whose percentage ownership
would likely be reduced below 40%. Regardless of the outcome of the Private
Offering, the Wilson Family will take such other actions as may be necessary to
reduce its percentage interest to below 40% in order to permit American Rental
to qualify as a REIT. See "The Restructuring -- The Private Offering."

American Rental is not required to satisfy the "100 person" and
"closely held" tests until its second taxable year for which an election is made
to be taxed as a

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REIT. American Rental believes that its stock will be owned by a sufficient
number of investors and in appropriate proportions to permit it to continue to
satisfy both of these requirements.

To monitor American Rental's compliance with the share ownership
requirements discussed above, American Rental is required to maintain records
disclosing the actual ownership of its stock. To do so, American Rental must
demand written statements each year from the record holders of certain
percentages of its stock in which the record holders are to disclose the actual
owners of the shares (i.e., the persons required to include in gross income the
REIT dividends). A list of those persons failing or refusing to comply with
this demand must be maintained as part of American Rental's records.
Shareholders who fail or refuse to comply with the demand must submit a
statement with their tax returns disclosing the actual ownership of the shares
and certain other information.

The 1997 Act replaced the rule that disqualified a REIT for any year
in which the REIT failed to comply with the above-described Regulations relating
to ascertaining ownership, with a penalty for such failure ($25,000, or $50,000
for intentional violations). Further, the 1997 Act provides that a REIT that
complies with such Regulations to ascertain ownership and which did not know, or
have reason to know, that it failed the "closely held" test will be treated as
having met the "closely held" test.

Sources of Gross Income.
-----------------------

In order to qualify as a REIT for a particular year, American Rental
also must meet three tests governing the sources of its income. These tests are
designed to ensure that a REIT derives its income principally from passive real
estate investments. In evaluating a REIT's income, the REIT will be treated as
receiving its proportionate share of the income produced by any partnership in
which the REIT invests, and any such income will retain the character that it
has in the hands of the partnership. The Code allows American Rental to own and
operate a number of its properties through wholly-owned subsidiaries which are
"qualified REIT subsidiaries." A qualified REIT subsidiary is not treated as a
separate corporation, and all of its assets, liabilities and items of income,
deduction and credit are treated as assets, liabilities and such items of the
REIT.

75% Gross Income Test.
---------------------

At least 75% of a REIT's gross income for each taxable year must be
derived from specified classes of income that principally are real estate
related. The permitted categories of principal importance to American Rental
are: (i) rents from real property, (ii) interest on loans secured by real
property, (iii) gain from the sale of real property or loans secured by real
property (excluding gain from the sale of property held

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primarily for sale to customers in the ordinary course of American Rental's
trade or business, referred to below as "dealer property"); (iv) income from the
operation and gain from the sale of certain property acquired in connection with
the foreclosure of a mortgage securing that property ("foreclosure property"),
(v) distributions on, or gain from the sale of, shares of other qualifying
REITS, (vi) abatements and refunds of real property taxes, and (vii) "qualified
temporary investment income" (described below). In evaluating American Rental's
compliance with the 75% income test (as well as the 95% income test described
below), gross income does not include gross income from "prohibited
transactions." A prohibited transaction is one involving a sale of dealer
property, not including foreclosure property and certain dealer property held by
the REIT for at least four years.

American Rental expects that substantially all of its share of the
operating gross income of American Housing will be considered rent from real
property. Rent from real property is qualifying income for purposes of the 75%
income test only if certain conditions are satisfied. Rent from real property
includes charges for services customarily rendered to tenants and rent
attributable to personal property leased together with the real property as long
as the personal property rent is less than 15% of the total rent. American
Rental does not expect to earn material amounts in these categories. Rent from
real property generally does not include rent based on the income or profits
derived from the property. American Rental and American Housing do not intend
to lease property and receive rentals based on the tenants' net income or
profit. However, rent based on a percentage of gross income is permitted as
rent from real property, and American Rental and American Housing may have
leases where rent is based on a percentage of gross income. Also excluded is
rent received from a person or corporation in which American Rental (or American
Housing or ACPT or any of either entity's 10% or greater owners) directly or
indirectly through the constructive ownership rules contained in Section 318 of
the Code owns a 10% or greater interest.

Also excluded from rent from real property is "impermissible tenant
services income" in excess of a one percent de minimus rule discussed below,
which is not treated as allowable rent from real property for purposes of the
75% income test (as well as the 95% income test described below). Generally,
impermissible tenant service income includes any amounts received directly or
indirectly by a REIT for services furnished or rendered by the REIT to its
tenants or for managing or operating the rental property. However,
impermissible tenant service income does not include amounts received by the
REIT for services performed by an "independent contractor" from whom the REIT
does not derive any income or any amounts received by the REIT for any services
provided by the REIT that are "usually or customarily rendered" in connection
with the rental of space for occupancy only and are not considered rendered
primarily for the convenience of the tenant (applying standards that govern in
evaluating whether rent from real property would be unrelated business taxable
income when received by a tax-exempt owner of the property). If the REIT's
impermissible tenant services income from a property exceeds one percent of all
amounts received or accrued from such

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property, all the amounts received by the REIT from that property fail to
qualify as rent from real property for purposes of the 75% and 95% income tests.

American Rental will hold its interests in the U.S. Apartment
Partnerships indirectly through American Housing, in which American Rental will
have a 99% general partner interest and a wholly-owned subsidiary of American
Rental will have a 1% limited partnership interest. Property management
services for the U.S. Apartment Partnerships and for other rental apartments not
owned by IGC or ACPT will be provided by American Management, a Delaware
corporation in which ACPT owns all of the stock. American Rental and American
Housing believe that the only material services to be provided to tenants by
them or by American Management will be those services usually or customarily
rendered in connection with the rental of space for occupancy only. American
Rental, American Housing and American Management will not provide services that
might be considered rendered primarily for the convenience of tenants, such as
hotel, health care or extensive recreational or social services. Consequently,
American Rental believes that substantially all of its proportionate share of
American Housing's rental income will be qualifying income under the 75% income
test, and that the provision of services by American Rental, American Housing or
American Management will not cause such rental income to fail to be included
under that test.

Upon American Rental's ultimate sale of properties, any gains realized
also are expected to constitute qualifying income, in the form of gain from the
sale of real property (not involving a prohibited transaction).

95% Gross Income Test.
---------------------

In addition to earning 75% of its gross income from the sources listed
above, at least an additional 20% of American Rental's gross income for each
taxable year must come either from those sources, or from dividends, interest or
gains from the sale or other disposition of stock or other securities that do
not constitute dealer property. The 1997 Act expanded the types of income
qualifying for the 95% test (but not the 75% test) to include income from
certain hedging instruments and gain on the disposition of such instruments.
The 95% test permits a REIT to earn a significant portion of its income from
traditional "passive" investment sources that are not necessarily real estate
related. The term "interest" (under both the 75% and 95% tests) does not
include amounts that are based on the income or profits of any person. American
Rental believes it will meet the 95% Gross Income Test on an annual basis.

Failing the 75% or 95% Tests; Reasonable Cause.
----------------------------------------------

As a result of the 75% and 95% tests, REITs generally are not
permitted to earn more than 5% of their gross income from active sources (such
as brokerage commissions or other fees for services rendered). This type of
income will not qualify

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for the 75% test or 95% test but it is not expected that American Rental would
have a significant amount of such income and other nonqualifying income is
expected to be at all times less than 5% of American Rental's annual gross
income. While American Rental does not anticipate that it will earn substantial
amounts of nonqualifying income, if nonqualifying income exceeds 5% of American
Rental's gross income, American Rental could lose its status as a REIT.

If American Rental fails to meet either the 75% or 95% income tests
during a taxable year, it may still qualify as a REIT for that year if (i) it
reports the source and nature of each item of its gross income in its federal
income tax return for that year; (ii) the inclusion of any incorrect information
in its return is not due to fraud with intent to evade tax; and (iii) the
failure to meet the tests is due to reasonable cause and not to willful neglect.
However, in that case, American Rental would be subject to a 100% tax based on
the greater of the amount by which it fails either the 75% or 95% income tests
for such year. See "-- Taxation of American Rental as a REIT."

Character of Assets Owned.
-------------------------

On the last day of each calendar quarter, American Rental must meet
two tests concerning the nature of its investments. For these purposes,
American Rental will be deemed to own its proportionate share of American
Housing's assets (including American Housing's proportionate share of the U.S.
Apartment Partnerships). First, at least 75% of the value of the total assets
of American Rental generally must consist of real estate assets, cash, cash
items (including receivables) and government securities. For this purpose,
"real estate assets" include interests in real property, interests in loans
secured by mortgages on real property or by certain interests in real property,
shares in other REITs and certain options, but exclude mineral, oil or gas
royalty interests. The temporary investment of new capital in debt instruments
also qualifies under this 75% asset test, but only for the one-year period
beginning on the date American Rental receives the new capital. Second,
although the balance of American Rental's assets generally may be invested
without restriction, American Rental will not be permitted to own (i) securities
of any one non-governmental issuer that represent more than 5% of the value of
American Rental's total assets or (ii) more than 10% of the outstanding voting
securities of any single issuer. A REIT, however, may own 100% of the stock of
a qualified REIT subsidiary, in which case the assets, liabilities and items of
income, deduction and credit of the subsidiary are treated as those of the REIT.

Generally, a REIT's "total assets" means the gross assets of the REIT
determined in accordance with generally accepted accounting principles. A REIT
generally is required to revalue its assets at the end of a quarter in which it
acquires any security or property other than cash and similar items. However, a
revaluation of assets generally is not required at the end of any quarter during
which there has been no such acquisition. A REIT is required to keep sufficient
records of its investments so as to be able to show that it has complied with
these requirements during the taxable year.

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American Rental anticipates that it will comply with these asset
tests.

Annual Distributions to Shareholders.
------------------------------------

To maintain REIT status, American Rental generally must distribute to
its shareholders in each taxable year at least 95% of its net ordinary income
(capital gain is not required to be distributed). More precisely, American
Rental must distribute at least an amount equal to (i) 95% of the sum of (a) its
"REIT Taxable Income" before deduction of dividends paid and excluding any net
capital gain and (b) any net income from foreclosure property less the tax on
such income, minus (ii) certain limited categories of "excess noncash income."
REIT Taxable Income is defined to be the taxable income of the REIT, computed as
if it were an ordinary corporation with certain modifications. For example, the
deduction for dividends paid is allowed, but neither net income from foreclosure
property, nor net income from prohibited transactions, is included. In
addition, the REIT may carry over, but not carry back, a net operating loss for
15 years following the year in which it was incurred.

The 1997 Act permits a REIT to elect to retain and pay income tax on
net long-term capital gains it receives during the tax year. If American Rental
were to make such an election, ACPT and the Shareholders would include in their
income as long-term capital gains their proportionate share of the undistributed
long-term capital gains as designated by American Rental. Generally, the
shareholders of an electing REIT are deemed to have paid their share of the tax
paid by the REIT with respect to the undistributed capital gains. Also, the
basis of the shareholders' shares in the REIT are increased by the amount of the
undistributed capital gains (less the amount of capital gains tax paid by the
REIT) included in the shareholders' long-term capital gains. These new
provisions (in particular, the shareholder credit for taxes paid and the
resulting shareholder basis adjustment) should apply to the Shareholders if
American Rental were to make such an election even though the Shareholders hold
their interests in the REIT indirectly through ACPT.

A REIT may satisfy the 95% distribution test with dividends paid
during the taxable year and with certain dividends paid after the end of the
taxable year. Dividends paid by American Rental in January that were declared
during the last calendar quarter of the prior year and were payable to
shareholders (including ACPT) on a date during the last calendar quarter of that
prior year are treated as paid on December 31 of the prior year. Other dividends
declared before the due date of American Rental's tax return for the taxable
year (including extensions) also will be treated as paid in the prior year for
American Rental, if they are paid (i) within 12 months of the end of such
taxable year and (ii) no later than American Rental's next regular distribution
payment. Dividends that are paid after the close of a taxable year and do not
qualify under the above-mentioned rule governing payments made in January will
be taxable to ACPT and the Shareholders in the year paid, even through they may
be taken into account by American Rental for a prior year. A nondeductible
excise tax equal to 4% will be

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imposed on American Rental for each calendar year to the extent that dividends
declared and distributed or deemed distributed before December 31 are less than
the sum of (a) 85% of American Rental's "ordinary income" for such year, plus
(b) 95% of American Rental's capital gain net income for such year, plus (c)
income not distributed in earlier years minus (d) distributions in excess of
income in earlier years.

American Rental will be taxed at regular corporate rates to the extent
that it retains any portion of its taxable income (e.g., if American Rental
distributes only the required 95% of its taxable income, it would be taxed on
the retained 5%). Under certain circumstances, American Rental may not have
sufficient cash or other liquid assets to meet the distribution requirement.
This could arise because of competing demands for American Rental's funds, or
because of timing differences between tax reporting and cash receipts and
disbursements (i.e., income may have to be reported before cash is received, or
expenses may have to be paid before a deduction is allowed). In addition, cash
associated with taxable income may be used to make non-deductible payments of
principal on liabilities, resulting in taxable income without associated funds
to make a distribution. Although this may be alleviated to some extent by
depreciation deductions, such deductions will not be available after property is
fully depreciated for tax purposes (that is, after the applicable cost recovery
period). Although American Rental does not anticipate any difficulty in meeting
the 95% distribution requirement, no assurance can be given that necessary funds
will be available.

If American Rental fails to meet the 95% distribution requirement
because of an adjustment to American Rental's taxable income by the IRS,
American Rental may be able to cure the failure retroactively by paying a
"deficiency dividend" (as well as applicable interest and penalties) within a
specified period.

American Rental is required to make the distributions described above
to its shareholders, including ACPT, in order to retain its status as a REIT.
Although ACPT will distribute amounts equal to 45% of its taxable income, less
the amount of taxes paid by ACPT, there can be no assurance that each
Shareholder will receive sufficient cash distributions to satisfy such
Shareholder's tax liability arising from the ownership of Common Shares. See
"Distribution Policy."

Taxation of American Rental as a REIT.
-------------------------------------

American Rental will adopt the calendar year for federal income tax
purposes and will use the accrual method of accounting. For each taxable year
in which American Rental qualifies as a REIT, it generally will be taxed only on
the portion of its taxable income that it retains (which will include
undistributed net capital gain), because American Rental will be entitled to a
deduction for its dividends paid to shareholders during the taxable year. A
dividend-paid deduction is not available for dividends that are considered
preferential within any given class of shares or as between classes. American
Rental does not anticipate that it will pay any such preferential dividends.

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American Rental would be subject to tax on any income or gain from
foreclosure property at the highest corporate rate (currently 35%). A
confiscatory tax of 100% applies to any net income from prohibited transactions.
In addition, if American Rental fails to meet either the 75% or 95% source of
income tests described above but still qualifies for REIT status under the
reasonable cause exception to those tests, a 100% tax would be imposed equal to
the amount obtained by multiplying (i) the greater of the amount, if any, by
which it failed either the 75% income test or the 95% income test, by (ii) the
ratio of American Rental's REIT Taxable Income to American Rental's gross income
(excluding capital gain and certain other items). American Rental also will be
subject to the minimum tax on items of tax preference (excluding items
specifically allocable to ACPT Shareholders). Finally, under regulations that
are to be promulgated, American Rental also may be taxed at the highest regular
corporate tax rate on any built-in gain (i.e., the excess of value over adjusted
tax basis) attributable to assets that American Rental acquires in certain tax-
free corporate transactions, to the extent the gain is recognized during the
first ten years after American Rental acquires such assets.

Failure to Qualify as a REIT.
----------------------------

For any taxable year in which American Rental fails to qualify as a
REIT, it would be taxed at the usual corporate rates on all of its taxable
income. Distributions to its shareholders would not be deductible in computing
that taxable income, and distributions would no longer be required. Any
corporate level taxes generally would reduce the amount of cash available to
American Rental for distribution to ACPT and the Shareholders and, because the
shareholders would continue to be taxed on their proportionate share of the
taxable dividends received by ACPT, the net after tax yield to the Shareholders
from their investment in ACPT likely would be reduced substantially. As a
result, American Rental's failure to qualify as a REIT during any taxable year
could have a material adverse effect upon ACPT and its Shareholders. If
American Rental loses its REIT status, unless certain relief provisions apply,
American Rental will not be eligible to elect REIT status again until the fifth
taxable year which begins after the first year for which American Rental's
election was terminated.

If, after forfeiting its REIT status, American Rental later qualifies
and elects to be taxed as a REIT again, American Rental may face significant
adverse tax consequences. Prior to the end of the year in which American Rental
sought to qualify again as a REIT, American Rental would be required to make
distributions sufficient to eliminate any earnings and profits accumulated
during its period of non-REIT status. Moreover, immediately prior to the
effectiveness of the election to return to REIT status, American Rental would be
treated as having disposed of all of its assets in a taxable transaction,
triggering taxable gain with respect to American Rental's appreciated assets.
In that event, however, American Rental would be permitted to elect an
alternative treatment under which those gains would be taken into account only
as and when they actually are recognized upon sales of the appreciated property
occurring within a ten-year period. American Rental would be required to
distribute at least 95% of any such

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recognized gains, but it would not receive the benefit of a dividends paid
deduction to reduce those taxable gains. Thus, any such gains on appreciated
assets would be subject to "double" taxation (i.e., at the corporate level as
well as the Shareholder level when distributed).

Counsel's Opinion Relating to Qualification of American Rental as a REIT.
------------------------------------------------------------------------

Based on certain assumptions and representations that are summarized
below, Counsel is of the opinion that (i) American Rental has been organized in
conformity with the requirements for qualification as a REIT beginning with its
taxable year ending December 31, 1998, and (ii) its proposed method of
operations described in this Information Statement/Prospectus will enable it to
satisfy the requirements for such qualification. The rules governing REITs are
highly technical and require ongoing compliance with a variety of tests that
depend, among other things, on future operating results. Counsel will not
monitor American Rental's compliance with these requirements. While American
Rental expects to satisfy these tests and will use its best efforts to do so, no
assurance can be given that American Rental will qualify as a REIT for any
particular year, or that the applicable law will not change and adversely affect
American Rental, ACPT, and its Shareholders. See "-- Failure to Qualify as a
REIT."

Counsel's opinion relies upon the following representations made by
ACPT:

(i) ACPT will cause American Rental to be operated in accordance with
applicable provisions of its Declaration of Trust and Bylaws, and as described
in this Information Statement/Prospectus, including, without limitation,
compliance with the following representations relating to American Rental.

(ii) At all times while acting as general partner of American Housing,
American Rental will operate American Housing or cause American Housing to be
operated in accordance with the applicable provisions of applicable law, the
American Housing Partnership Agreement, and as described in this Information
Statement/Prospectus, including, without limitation, compliance with the
following representations relating to American Housing.

(iii) ACPT will cause American Management to be operated in accordance
with the applicable provisions of Articles of Incorporation and Bylaws and as
described in this Information Statement/Prospectus, including, without
limitation, compliance with the following representations relating to American
Management.

(iv) American Rental will elect to be treated as a REIT for federal income
tax purposes for its taxable year ending December 31, 1998, and for each
subsequent year.

(v) American Rental will not engage in any "prohibited transactions" as
defined in Code Section 857(b)(6)(B)(iii) (relating to certain sales or other
disposition of property in the ordinary course of business);

(vi) American Rental shall take such actions as are necessary to preserve
its status as a REIT, including, without limitation:

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(1) Compliance with all of the requirements set forth in Code Section
856(a), including those relating to management, beneficial ownership, and type
of entity;
(2) Compliance with the "95% of Gross Income" requirements set forth
in Code Section 856(c)(2);
(3) Compliance with the "75% of Gross Income" requirements set forth
in Code Section 856(c)(3);
(4) Compliance with the limitations on total assets requirements set
forth in Code Section 856(c)(4); and
(5) Compliance with such other requirements as may be necessary in
order to maintain American Rental's status as a REIT.

(vi) American Housing represents that it will meet the income requirements
described in paragraphs (v)(2) and (3), above, and the total assets requirements
described in paragraph (v)(4), above, for each of its taxable years ending after
December 31, 1997.

(vii) American Housing and American Management each represents that all
services rendered by such entities or their agents or employees to tenants of
American Housing shall be limited to those usually or customarily rendered in
connection with the rental of rooms or other space for occupancy only, as those
terms are defined for purposes of applying Code Section 856(d)(2) and Treas.
Reg. (S)1.512(b)-1(c)(5).

FEDERAL INCOME TAX CLASSIFICATION OF AMERICAN LAND AND AMERICAN MANAGEMENT.

American Land and American Management are Maryland and Delaware
corporations, respectively, which will be treated as corporations for federal
tax purposes. Neither corporation will be eligible to elect to be treated as a
partnership or to be disregarded as a separate entity for federal tax purposes
under the Regulations.

FEDERAL INCOME TAX CLASSIFICATION OF IGP GROUP.

IGP Group is a Puerto Rico corporation that intends to qualify as a
special partnership under the Puerto Rico Code. It is a "business entity" that
is not classified as a corporation under Section 301.7701-2(b) of the
Regulations, and therefore it is an "eligible entity" for purposes of electing
its classification for federal tax purposes under Section 301.7701-3 of the
Regulations (see discussion under "-- Federal Income Tax Classification of
ACPT"). Unless it elects otherwise, a foreign eligible entity formed on or
after January 1, 1997: (1) is classified as a partnership if it has two or more
members and at least one member does not have limited liability; (2) is
classified as an association taxable as a corporation if all members have
limited liability; and (3) is disregarded as an entity separate from its owners
if it has a single owner that does not have limited liability. A member of a
foreign eligible entity has limited liability if the member has no personal
liability for the debts of or claims against the entity by reason of being a
member. This determination generally is based solely on the statute or law
pursuant to which the entity is organized. Under Puerto Rico law, stockholders
of a Puerto Rico corporation and members of a special partnership have limited
liability. Therefore, so

-131-

long as IGP Group has ACPT as its sole member, it will be treated as an
association taxable as a corporation for federal tax purposes, unless IGP Group
makes an election to be disregarded as an entity separate from its owner under
Section 301.7701-3 of the Regulations. IGP Group does not anticipate making
such an election.

The discussion that follows is based on the assumption that both IGC
and ACPT will be classified as partnerships and that American Rental will be
classified as a REIT for federal income tax purposes. If that were not the
case, most of this discussion would be inapplicable. IGC believes that it
qualifies as a partnership and has filed its tax returns on that basis. In
connection with this Information Statement/Prospectus, Counsel has not examined
the classification of IGC as a partnership for federal income tax purposes.

Asset Transfers.
---------------

Management intends to structure the Asset Transfers in the most tax
efficient manner consistent with applicable law and the business objectives of
IGC. Gain will be recognized by IGC on the transfer of IGP to IGP Group in an
amount equal to the appreciation in certain property indirectly owned by IGP.
It is estimated that approximately $6.8 million in gain will be recognized on
this transfer. Gain also will be recognized by IGC on the transfer of certain
interests in the U.S. Apartment Partnerships as a result of American Housing's
assumption of liabilities in excess of the tax basis of the property contributed
to American Housing. It is estimated that approximately $3.8 million in gain
will be recognized on this transfer. Each IGC Unitholder will recognize that
IGC Unitholder's allocable share of such gain. Management is continuing to
explore ways to minimize or eliminate the amount of gain to be recognized on the
Asset Transfers.

FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION.

The Distribution.
----------------

A Shareholder will not recognize gain or loss upon receipt of Common
Shares in the Distribution. Gain is not recognized on a distribution of
property from a partnership to a partner except to the extent that any money
distributed exceeds the adjusted basis of such partner's interest in the
partnership immediately before the distribution. Generally, a distribution of a
"marketable security" is treated as a distribution of money equal to the fair
market value of such marketable security, for purposes of determining whether
gain is recognized on such distribution. However, the amount treated as money
upon a distribution of a marketable security is reduced by the excess of the
distributee partner's proportionate share of (i) net gain that would be
recognized if all of the partnership's marketable securities would have been
sold immediately before the distribution, over (ii) net gain that would be
recognized if all of the partnership's marketable securities would have been
sold immediately after the

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distribution. Because IGC will distribute all of its marketable securities in
the Distribution, the amount treated as a distribution of cash to each
unitholder will be reduced by such Unitholder's gain that would be recognized
upon the sale of such property.

A Shareholder's initial tax basis in his Common Shares generally will
be equal to IGC's tax basis in those Common Shares. If, however, IGC's tax
basis in those Common Shares exceeds the Shareholder's adjusted tax basis in his
IGC Units, the Shareholder's initial tax basis in his Common Shares generally
will be equal to his adjusted tax basis in his IGC Units immediately before the
Distribution. Each Shareholder's adjusted tax basis in his IGC Units will be
reduced by an amount equal to his initial basis in the Common Shares. A
Shareholder's holding period for the Common Shares will include IGC's holding
period for those Common Shares. IGC will not recognize gain or loss upon the
Distribution.

A Shareholder who receives cash in lieu of fractional Common Shares
will recognize gain. The amount of gain recognized will not exceed the amount
of cash received. ACPT will provide Shareholders with information indicating the
amount of any gain which must be recognized on the receipt of cash in lieu of
fractional Common Shares interests.

FEDERAL INCOME TAXATION OF ACPT AND SHAREHOLDERS.

In General.
----------

As a partnership for federal income tax purposes, ACPT is not subject
to federal income tax. ACPT has adopted the accrual method of accounting and
has adopted the calendar year as its taxable year.

Each item of ACPT's income, gain, loss, deduction or credit will flow
through to the Shareholders. Each Shareholder must report his allocable share
of these items on his individual tax return. Such items are allocated among the
Shareholders in accordance with their interest in ACPT and for the period for
which each Shareholder holds his interest. ACPT must furnish each Shareholder
of record, on the form prescribed by the IRS, the information necessary to
prepare the Shareholder's federal income tax returns with respect to income
derived from his interest in ACPT.

Each Shareholder is taxed on his allocable share of ACPT's taxable
income or loss, without regard to distributions of cash or property from ACPT to
the Shareholder. Although ACPT intends to distribute amounts substantially
equal to its taxable income, there can be no assurance that ACPT will distribute
to a Shareholder sufficient cash for the Shareholder to satisfy his federal
income tax liability with respect to his allocable share.

-133-

It is anticipated that ACPT's income will consist almost entirely of
dividends from American Rental, American Land, American Management, and IGP
Group.

Tax Basis of Common Shares.
--------------------------

A Shareholder's initial tax basis in his Common Shares generally will
be equal to IGC's tax basis in those Common Shares (unless IGC's tax basis in
the Common Shares exceeds the Shareholder's tax basis in his IGC Units). See "-
- - Federal Income Tax Consequences of the Distribution." The Shareholder's tax
basis will be increased by (i) his allocable share of ACPT's income (including
income that is not taxable) and (ii) his share of any increase in non-recourse
liabilities incurred by ACPT (i.e., any liability of ACPT for which no partner
has any personal liability). His tax basis will be reduced (but not below zero)
by (i) any cash distributed to him; (ii) ACPT's tax basis in any property
distributed to him; (iii) his allocable share of ACPT's losses; (iv) his share
of any decrease in non-recourse liabilities incurred by ACPT; and (v) his share
of non-deductible expenditures of ACPT that are not properly chargeable to
capital. There may be other special situations affecting the tax basis.

Income and Loss Allocations.
---------------------------

The manner in which items of ACPT's income, gains, losses, deductions,
credits and other tax items are allocated among the partners (including the
Shareholders) pursuant to the provisions of the Declaration of Trust is
described in detail above. Such allocations are recognized for federal income
tax purposes if (i) they are in accordance with the partners' respective
interests in ACPT or have "substantial economic effect" within the meaning of
the Code and applicable Regulations, and (ii) they are applied without
retroactive effect.

ACPT's allocations to the Shareholders pursuant to the Declaration of
Trust will be recognized for federal income tax purposes to the extent that
such allocations do not result in the Shareholders having deficits in their
capital accounts. It is not anticipated that ACPT will generate, nor is it an
objective of ACPT to generate, losses that could result in deficit capital
accounts. However, it is possible that ACPT could make a distribution that
causes a Shareholder to have a deficit capital account.

If any allocation of ACPT's items pursuant to the Declaration of Trust
is determined not to be in accordance with the Shareholders' interests in ACPT
(or otherwise not to have "substantial economic effect" under the Code and
Regulations), then ACPT's items would be allocated among the partners in
accordance with their "interests in ACPT" based on all the relevant facts and
circumstances. Such a determination could result in the income, gains, losses,
deductions, or credits allocated under the Declaration of Trust being
reallocated. Such reallocation, however, would not affect distributions under
the Declaration of Trust. Thus, such a reallocation could

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result in an increased share of taxable income being allocated to a Shareholder,
without any corresponding increase in cash distributions over those contemplated
in the Declaration of Trust.

The Declaration of Trust authorizes the Board of Trustees to make any
changes in ACPT's allocation provisions determined to be necessary under the
Regulations in order for ACPT's allocation provisions to be respected for
federal income tax purposes. It is possible that such a change in the
allocation provisions could result in additional taxable income being allocated
to existing Shareholders, without any corresponding increase in cash
distributions to such Shareholders. However, no provision may be added that
would require the Shareholders to restore negative capital accounts. In
addition, in implementing any such change, the Board of Trustees is to use its
best efforts to ensure that the underlying economic arrangement intended by the
Declaration of Trust -- that all distributions and allocations be in accordance
with percentage interests in ACPT -- is preserved to the extent practicable.

Coordination of Allocations and Distributions.
----------------------------------------------

ACPT has adopted the daily closing-of-the-books convention in
allocating ACPT's income and loss. In addition, ACPT, American Land, American
Management, American Rental, and IGP Group expect to coordinate the declaration
and payment of dividends and other distributions from such entities in such a
manner that all dividends will be paid by the lower-tier entities to ACPT on the
same day that ACPT declares a dividend to the Shareholders of record on such
date. Thus, each Shareholder's dividend distribution from ACPT will correspond
with their allocable share of ACPT's taxable income associated with the receipt
of dividends from the other entities. If dividends are not so coordinated, it
is possible that if a Shareholder sells or otherwise disposes of his Common
Shares prior to a record date, ACPT would make the cash distributions to the
Shareholder's transferee even though the Shareholder would be taxed on the
income.

Section 704(c) Allocations.
--------------------------

Under Section 704(c) of the Code, tax items relating to the unrealized
gain (or loss) ("Precontribution Gain (or Loss)") with respect to property
contributed ("Contributed Property") by a partner ("Contributing Partner") to a
Partnership must be allocated to the Contributing Partners when the partnership
sells or otherwise disposes of its interests in the Contributed Property. The
Precontribution Gain (or Loss) is generally equal to the difference between the
fair market value of the Contributed Property at the time of the contribution
and the Contributing Partner's tax basis in the property at that time.

The Board of Trustees will determine the amount of Precontribution
Gain (or Loss) allocable to each asset originally contributed to IGC or
contributed by IGC to ACPT, and each Shareholder's share thereof. These
determinations may affect substan-

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tially the amount and timing of gain or loss recognized by Shareholders in the
event that ACPT were to sell its interest in American Land, American Management,
American Rental, or IGP Group. However, ACPT does not expect to sell its
interests in such entities.

ACPT will not make an election under Section 754 of the Code to adjust
the tax basis of its property upon sales and certain other transfers of Common
Shares (Section 743 of the Code) or in the event of a distribution of property
to the Shareholders (Section 734 of the Code). Therefore, persons who purchase
Common Shares from Shareholders will not receive a special basis adjustment with
respect to their share of property held by ACPT to reflect the purchase price of
such Common Shares. Thus, if ACPT sells all or a portion of its interests in
the lower-tier entities, a Shareholder who purchases Common Shares after the
Distribution will recognize his proportionate share of ACPT's gain or loss
regardless of whether such gain or loss is attributable to appreciation or
depreciation in the value of the interests sold by ACPT that occurred before the
Shareholder acquired its Common Shares. If ACPT were to sell its interests in
American Land, American Management, American Rental, or IGP Group, the
proportionate share of the gain or loss recognized by a Shareholder could vary
depending on whether or not such Shareholder purchased its Common Shares from a
person that originally contributed property to IGC. It is possible that in
certain circumstances, the trading market for the Common Shares could be
adversely affected. However, ACPT does not expect to sell its interests in such
entities.

Passive Loss and Income.
-----------------------

It is not anticipated that ACPT will have a taxable loss for any
taxable year. All of ACPT's gross income from dividends (including all
distributions from American Rental) or from the disposition of ACPT's interests
in the lower-tier entities will constitute "portfolio income" and will not be
included in "passive activity gross income" under the rules relating to
restrictions on passive activity losses.

Taxation of Foreign Investors.
-----------------------------

The rules governing federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships and other foreign
Shareholders (collectively, "Non-U.S. Shareholders") are complex and no attempt
will be made herein to discuss such rules. Prospective Non-U.S. Shareholders
should consult with their own tax advisers to determine the impact of federal,
state and local income tax laws with regard to an investment in Common Shares,
including any reporting requirements, as well as the tax treatment of such an
investment under the laws of their home country.

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Taxation of Shareholder Distributions Other than in Liquidation.
---------------------------------------------------------------

A Shareholder will not recognize taxable income when he receives a
cash distribution from ACPT if the amount of the distribution does not exceed
his tax basis in his Common Shares. See "-- Tax Basis of Common Shares."
Because of the coordination of the declaration and payment of dividends and
other distributions between ACPT and the entities in which it holds an interest,
each Shareholder's basis in its Common Shares should be increased by the
Shareholder's share of ACPT's taxable income associated with the receipt of a
cash distribution from ACPT. See "--Coordination of Allocations and
Distributions." Generally, ACPT anticipates that the increase in basis should
be equal to the amount of the cash distribution. However, if the cash
distributed to the Shareholder exceeds the Shareholder's tax basis in his Common
Shares, the excess will be taxable to him as though it were gain on the sale or
exchange of his Common Shares. See "-- Sale or Exchange of Common Shares." A
Shareholder generally will not recognize income upon receipt from ACPT of a
distribution of property other than a distribution of money or a
disproportionate distribution of marketable securities. A distribution may
reduce the Shareholder's tax basis in his Common Shares. See "-- Tax Basis of
Common Shares."

Foreign Tax Credit.
------------------

For United States tax purposes, each Shareholder will be considered to
have paid his allocable share of any income taxes paid to Puerto Rico by ACPT.
Puerto Rico taxes treated as paid by such Shareholder or allocable to such
Shareholder will be considered foreign income taxes paid by such Shareholder
with respect to which such Shareholder may claim a foreign tax credit (subject
to applicable limitations) or a deduction for United States federal income tax
purposes. The limitation on the foreign tax credit is designed to ensure that a
United States taxpayer cannot use foreign taxes to offset more of his United
States tax liability for a taxable year than is attributable to his foreign
source income (e.g., because the effective rate is higher than United States
rates). For certain Shareholders, the marginal Puerto Rico income tax rate may
be higher than the marginal United States tax rate. Accordingly, for
Shareholders whose only source of foreign income is ACPT, the taxes payable to
Puerto Rico by ACPT might not be fully creditable as a result of this limitation
under the Code. Taxable income of ACPT for federal income tax and Puerto Rico
income tax purposes also may differ because each tax is calculated under the
respective tax accounting and entity classification provisions of the
jurisdictions that in some cases are not the same. For example, for Puerto Rico
income tax purposes IGP Group intends to qualify as a special partnership and
the tax items of IGP Group would then flow through to ACPT for Puerto Rico
income tax purposes. However, for federal tax purposes, IGP Group is treated as
a corporation and none of IGP Group's tax items will flow through to ACPT.

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Termination of ACPT for Tax Purposes.
------------------------------------

If 50% or more of the capital and profits interests in ACPT are sold
or exchanged within a twelve-month period, ACPT will be deemed to have been
terminated for federal income tax purposes. In this regard, however, a Common
Share that changes hands several times during a twelve-month period will be
counted only once for purposes of determining whether a termination has
occurred.

If ACPT is considered to have terminated, ACPT would be deemed to have
contributed it's assets and liabilities to a new partnership in exchange for an
interest in the new partnership; and immediately thereafter the terminated
partnership would be deemed to have distributed the interests in the new
partnership to the Shareholders of record as of the date of the termination.

Generally, a Shareholder would not recognize any taxable gain or loss
as a result of the deemed pro rata distribution of new partnership interests
incident to a constructive termination of ACPT. See "-- Federal Income Tax
Considerations --Federal Income Taxation of ACPT and Shareholders -- Dissolution
of ACPT." If the Shareholder's taxable year were other than the calendar year,
the inclusion of more than one year of ACPT's income in a single taxable year of
the Shareholder could result. Finally, a termination of ACPT could cause ACPT
or its assets to become subject to any unfavorable statutory or regulatory
changes enacted prior to the termination but previously not applicable to ACPT
or its assets because of protective "transitional" rules. There could be other
federal income tax consequences, favorable and unfavorable, resulting from a
termination of ACPT.

Under the 1997 Act, regulatory authority was granted to provide for
gain recognition on a transfer of appreciated property to a partnership in cases
where unrealized gain could be transferred to a foreign partner. It does not
appear that this provision would apply to ACPT or the Shareholders. However, no
regulations have been issued under this provision.

Backup Withholding.
------------------

Distributions to Shareholders whose Common Shares are held on their
behalf by a "broker" may constitute "reportable payments" under the federal
income tax rules regarding "backup withholding." Backup withholding, however,
would apply only if (i) the Shareholder failed to furnish his Social Security
number or other taxpayer identification number ("TIN") to the "payor" (e.g., the
"broker"), (ii) the IRS notified the payor that the Shareholder furnished an
incorrect TIN, (iii) there were a "notified payee certification failure" as
described in the Code, or (iv) there were a failure by the Shareholder to
certify that he is not subject to backup withholding. If backup withholding
were applicable to a Shareholder, the payor would be required to withhold 31% of
each distribution to such Shareholder and to pay such amount to the IRS on

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behalf of such Shareholder. The amount withheld pursuant to backup withholding
is not itself an additional tax. Rather, the tax liability of the Shareholder
subject to backup withholding will be credited with the amount of tax withheld.

Sale or Exchange of Common Shares.
---------------------------------

A Shareholder will realize gain or loss on a sale or other disposition
of his Common Shares based on the difference between the amount realized on the
sale and his adjusted tax basis for the Common Shares. The amount realized
includes the Shareholder's share of ACPT's liabilities. A selling Shareholder's
tax basis in the Common Shares will be adjusted for the amount of income or loss
allocable to, and distributions made to, such Shareholder in the taxable year in
which the disposition occurs. See "-- Tax Basis of Common Shares." To the
extent the gain or loss is not treated as ordinary income or loss under the
rules described below, the gain or loss ordinarily will be treated as capital
gain or loss and a long-term capital gain or loss if the holding period for the
Common Shares is more than one year.

The gain or loss may give rise to ordinary income or loss to the
extent it is attributable to "substantially appreciated inventory items" or
"unrealized receivables" (as defined in Section 751 of the Code). "Unrealized
receivables" include rights to payment for services rendered or to be rendered,
franchises, trademarks, Section 1245 property, Section 1250 property and stock
in certain foreign corporations as described in Section 1248. Under the current
ownership structure, it is unlikely that ACPT will have any "substantially
appreciated inventory items" or "unrealized receivables."

Under an IRS ruling, a Shareholder might be required to maintain an
aggregate adjusted tax basis in all of his Common Shares even if he acquired his
Common Shares in separate transactions. If this rule applies to Shareholders,
when a Shareholder disposes of a portion of his Common Shares, the Shareholder
would have to allocate his aggregate tax basis between the disposed-of Common
Shares and the retained Common Shares by some equitable apportionment method.
In that case, it effectively would preclude a Shareholder from controlling the
timing of the recognition of the inherent gain or loss in his Common Shares by
selecting specific Common Shares for sale. It is unclear how a Shareholder
would determine the holding period of the disposed-of Common Shares in such
circumstances. Because of the uncertainties relating to the holding period and
basis, a Shareholder considering a subsequent purchase of additional Common
Shares should consult his own tax advisor as to the possible consequences of the
subsequent purchases.

Dissolution of ACPT.
-------------------

Upon the dissolution and liquidation of ACPT, any assets remaining
after payment of, or provision for payment of, ACPT's debts and liabilities will
be distributed to ACPT's partners (including Shareholders) of record first in
proportion to the positive

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balances in their capital accounts and then pro rata in accordance with their
percentage interests.

A Shareholder generally will not recognize gain or loss on a
liquidating distribution. However, a Shareholder will recognize gain to the
extent that he receives money (including his proportionate share of any
reduction in ACPT's non-recourse liability) in excess of his basis in his Common
Shares. The gain will be a capital gain, except to the extent of any
"unrealized receivables" and "substantially appreciated inventory." See "--
Federal Income Tax Considerations -- Federal Income Taxation of ACPT and
Shareholders -- Sale or Exchange of Common Shares."

A Shareholder may recognize a capital loss on liquidation only if the
Shareholder receives only money, unrealized receivables, and inventory. The
loss may not exceed the difference between (i) the Shareholder's adjusted tax
basis in his Common Shares and (ii) the sum of (x) the amount of money received
and (y) his tax basis of such unrealized receivables and inventory. If the
Shareholder also receives any property other than money, unrealized receivables
or inventory, he will not recognize any loss upon the distribution. He will
have a tax basis in the property received in liquidation equal to his adjusted
tax basis in his Common Shares reduced by any money distributed to him.

Puerto Rico Shareholders.
------------------------

Individuals who are bona fide residents of Puerto Rico during the
entire taxable year ("Puerto Rico Residents") will be subject to United States
income tax at applicable United States rates with respect to their allocable
share of ACPT's income derived from United States sources. A corporate
Shareholder organized under the laws of Puerto Rico ("Puerto Rico Corporation")
will be subject to United States income tax at applicable United States rates
with respect to its allocable share of ACPT's income that is effectively
connected with the conduct of a United States trade or business. A Puerto Rico
Corporation will generally be subject to a 30% tax on its allocable share of
ACPT's "fixed or determinable annual or periodic gains, profits, and income"
from United States sources. Distributions made by IGP Group to ACPT will not be
United States source income or effectively connected with a United States trade
or business. ACPT generally is required to withhold U.S. tax at the rate of 30%
with respect to a Puerto Rico Resident's or a Puerto Rico Corporation's
allocable share of dividends received from American Land, American Management,
or American Rental.

Under the Foreign Investment in Real Property Tax Act of 1980, as
amended ("FIRPTA"), ACPT must withhold 35% of the amount of a Puerto Rico
Corporation's allocable share of ACPT's gain from the sale of a United States
real property interest ("USRPI"), including a disposition of an interest in
certain entities where over 50 percent of the value of such entity's assets
consist of U.S. real property interests. A USRPI generally is an interest in
real property located in the United States or Virgin Islands. An interest in a
"domestically-controlled REIT" is not a USRPI. The

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term "domestically-controlled REIT" means a REIT in which at all times during a
specified testing period (generally, the lesser of the 5-year period ending on
the date of the disposition or the period in which the REIT was in existence)
less than 50% in value of the stock was held directly or indirectly by foreign
persons.

Any distribution by a REIT to a non-resident alien individual or
foreign corporation, to the extent attributable to gain from sales or exchanges
by the REIT of USRPI, is treated as gain recognized by such non-resident alien
individual or foreign corporation from the sale or exchange of a USRPI. In
certain circumstances, a distribution of a USRPI to the Shareholders could give
rise to a recognition of any unrealized gain (the excess of the fair market
value over basis) of the USRPI distributed, multiplied by the "foreign ownership
percentage". The term "foreign ownership percentage" means that percentage of
the stock of the REIT which was held (directly or indirectly) by foreign persons
at the time during the applicable testing period during which the direct and
indirect ownership of stock by foreign persons was greatest.

The United States Department of the Treasury may promulgate
Regulations reducing the withholding rate to 28%, probably only in the case of
individuals. Future Regulations also may require ACPT to withhold 10% of the
fair market value of any USRPI that is distributed to a foreign person if the
transaction would constitute a taxable distribution under FIRPTA.

A Puerto Rico Resident generally will be subject to United States tax
on the gain or loss resulting from the disposition of a Common Share only to the
extent that the gain or loss is from United States sources. As a general rule,
any gain or loss from the disposition of personal property is not United States
source income if the seller is not a United States resident. For most purposes,
partnership interests are regarded as personal property. However, it is
possible that a disposition of a partnership interest would be considered a
disposition of partnership assets rather than partnership interests. The IRS
has ruled that a partner was subject to United States tax on the gain or loss
resulting from the disposition of a partnership interest to the extent that the
partner's allocable share of the partnership's unrealized gain or loss is
effectively connected with a United States trade or business when the
partnership was engaged in a United States trade or business through a fixed
place of business or a permanent establishment and was not a publicly traded
partnership. The ruling does not indicate whether the same holding would obtain
in the case of a disposition of an interest in a publicly traded partnership or
whether gain or loss on such an interest would be sourced as United States or
foreign, based on the assets and activities of the partnership. Generally, the
determination of the residence of the seller is made at the partner level,
except as provided in Regulations that have not yet been promulgated.
Legislative history indicates that Regulations may provide that the
determination will be made at the partnership level in the case of a publicly
traded partnership.

-141-

In general, Puerto Rico Corporations that have gain from the sale of
Common Shares are subject to United States taxation at capital gains rates only
if the gain is effectively connected with the conduct of a United States trade
or business. Under FIRPTA, if a Common Share is considered a USRPI, the gain or
loss from the disposition of the Common Share is treated as effectively
connected with a trade or business conducted in the United States. A Common
Share will be considered a USRPI generally if at any time during the five-year
period preceding the disposition (i) the Puerto Rico Corporation owns directly
or by attribution more than 5% of ACPT's Common Shares and (ii) the fair market
value of ACPT's USRPIs was at least 50% of the fair market value of ACPT's
worldwide real property interests and ACPT's other assets used in a trade or
business.

As discussed above, if ACPT becomes engaged in a United States trade
or business through a fixed place of business or a permanent establishment, any
gain or loss recognized by a Puerto Rico Corporation upon the disposition of a
Common Share may be treated as effectively connected with the conduct of a
United States trade or business to the extent that the Shareholder's allocable
share of ACPT's unrealized gain or loss is effectively connected with a United
States trade or business.

Certain Federal Income Tax Consequences to Tax Exempt Organizations.
-------------------------------------------------------------------

Virtually all of ACPT's taxable income will consist of dividends
(including REIT dividends). Therefore, a tax exempt entity that is a
Shareholder generally will not be subject to tax on distributions from ACPT or
gain realized on the sale of Common Shares. A tax exempt entity may be subject
to tax, however, to the extent that it has financed the acquisition of its
Common Shares with "acquisition indebtedness" within the meaning of the Code.

Information Return Filing Requirements.
--------------------------------------

A Shareholder who sells or exchanges a Common Share must notify ACPT
of such transaction in writing within 30 days of the transaction (or, if
earlier, by January 15 of the year following the calendar year in which the
transaction occurs). The transferor Shareholder does not have to notify ACPT if
a broker must provide an information return under Section 6045 of the Code. The
transferor Shareholder must provide (i) his name and address and the name and
address of the transferee; (ii) his TIN and, if known, the transferee's TIN; and
(iii) the date of the sale or exchange. If a transferor Shareholder fails to
notify ACPT, he may be subject to a $50 penalty for the failure.

In addition, ACPT must notify the IRS of any sale or exchange of a
Common Share (of which ACPT was notified or had knowledge). ACPT does not have
to notify the IRS if a broker must provide an information return under Section
6045 of the Code. If ACPT knows of a sale or exchange but does not know who is
the

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beneficial owner of the Common Shares, it may treat the record-holder as the
transferor or the transferee as the case may be. ACPT must report to the IRS
the names, addresses, and TINs of ACPT, the transferee and the transferor, the
date of the transaction, and any additional information required by the
applicable information return or its instructions. ACPT also must provide that
information to the transferor and the transferee. In addition, ACPT must inform
the transferor and the transferee that this information has been given to the
IRS, that a portion of any gain or loss must be treated as ordinary income or
loss and that the transferor is required to attach a statement relating to the
sale or exchange to his income tax return.

If ACPT fails to furnish the required information to the transferor or
the transferee, it may be subject to a penalty of $50 per failure up to an
annual maximum of $100,000. If ACPT fails to provide the required information
to the IRS, ACPT would be subject to a penalty of $50 per failure up to an
annual maximum of $100,000. Because ACPT will be a publicly traded partnership,
it is uncertain whether ACPT will be able to comply with these requirements in
every instance.

Audit of Partnership Tax Returns and Further Proceedings.
--------------------------------------------------------

Although ACPT is not required to pay any federal income tax, it is
required to file an information tax return for each taxable year setting forth
its income, gains, losses, deductions, credits, tax preference items and its
other applicable tax attributes. The IRS may audit the tax treatment of ACPT's
items of income, loss, deduction, and credit at the partnership level in a
unified administrative proceeding. The IRS will make any adjustments it
believes to be appropriate. An audit of ACPT may also result in the audit of a
Shareholder's tax return, which may not be restricted to adjustments to items of
ACPT.

The IRS is required to mail a notice at the outset of the
administrative proceeding and at the time of any adjustment to: (i) any
Shareholder who has at least a 1% interest in ACPT's profits, (ii) any
Shareholder designated by a "notice group," and (iii) the "Tax Matters Partner"
of ACPT. A notice group is any group of Shareholders who have an aggregate
profits interest in ACPT of at least 5% and have designated a Shareholder to
receive separate notice on behalf of the group. The Trustee will be ACPT's Tax
Matters Partner. As the Tax Matters Partner, the Trustee will receive notice on
behalf of, and will provide notice to, those Shareholders who have an interest
of less than 1% in ACPT's profits. The Trustee may extend the statutory period
of limitations for assessment of adjustments attributable to "partnership items"
and may enter into a binding settlement with the IRS. The Trustee's settlement
will be binding on a Shareholder unless the Shareholder (i) has at least a 1%
interest in ACPT's profits, (ii) is a member of a notice group, or (iii)
notifies the IRS that the Trustee is not authorized to act on his behalf.

-143-

If the IRS and the Trustee fail to settle an audit proceeding, then
the Trustee may choose to litigate the matter. In that event, the Trustee would
select the court in which such litigation would occur (including a court where
prepayment of the taxes is required). A Shareholder would have the right to
participate in such litigation and would be bound by the outcome of the
litigation even if the Shareholder elected not to participate. Because the
Shareholders would be affected by the outcome of any administrative or judicial
proceedings with respect to ACPT, the Trustee will provide the Shareholders with
appropriate notices of federal income tax proceedings with respect to ACPT.
Shareholders who wish to pursue their own contest are free to do so at their own
expense. Each Shareholder should consult with his tax advisor with respect to
the impact of these procedures on his particular case.

Penalty for Substantial Understatement; Deduction of Interest.
-------------------------------------------------------------

If there is a "substantial understatement" of his tax liability, a
Shareholder may be liable for a penalty equal to 20% of the underpayment of tax
resulting from the substantial understatement. There will be substantial
understatement if the Shareholder fails to report the greater of $5,000 ($10,000
for certain corporations) or 10% of the tax required to be shown on the return
for the taxable year. In determining whether a Shareholder's tax liability has
been substantially understated, a Shareholder's items of income and loss arising
from ACPT, as well as items of income and loss from other activities, will be
taken into account. For this purpose, the amount of an understatement does not
include any portion of the understatement (i) for which there existed
"substantial authority" for the position of the taxpayer or (ii) for which the
taxpayer "adequately disclosed" the relevant facts on his return and there was a
"reasonable basis" for the tax treatment.

ACPT anticipates that its tax returns will be prepared in a manner
that will not result in the imposition of the 20% penalty. However, due to the
complexity involved in applying the tax laws to particular transactions and the
fact that the determination of whether a particular Shareholder's tax liability
is substantially understated is dependent on the Shareholder's individual
circumstances, there can be no assurance that the substantial understatement
penalty could not be imposed on a Shareholder with respect to items arising from
ACPT. Any interest imposed on the tax deficiencies of individuals is "personal"
interest that will be nondeductible.

FEDERAL TAX CONSIDERATIONS WITH RESPECT TO THE LIQUIDATION OF IGC.

Upon the dissolution and liquidation of IGC, any assets remaining
after payment of, or provision for payment of, IGC's debts and liabilities will
be distributed to IGC's partners (including Unitholders) of record first in
proportion to the positive balances in their capital accounts and then pro rata
in accordance with their percentage interests.

-144-

A Unitholder generally will not recognize gain or loss on a
liquidating distribution. However, a Unitholder will recognize gain to the
extent that he receives money (including his proportionate share of any
reduction in IGC's non-recourse liability) in excess of his basis in his Units.
The gain will be a capital gain, except to the extent of any "unrealized
receivables" and "substantially appreciated inventory." See "-- Federal Income
Tax Considerations -- Federal Income Taxation of ACPT and Shareholders -- Sale
or Exchange of Common Shares."

A Unitholder may recognize a capital loss on liquidation only if the
Unitholder receives only money, unrealized receivables, and inventory. The loss
may not exceed the difference between (i) the Unitholder's adjusted tax basis in
his Units and (ii) the sum of (x) the amount of money received and (y) his tax
basis of such unrealized receivables and inventory. If the Unitholder also
receives any property other than money, unrealized receivables or inventory, he
will not recognize any loss upon the distribution. The Unitholder will have a
tax basis in the property received in liquidation equal to his adjusted tax
basis in his Units reduced by any money distributed to him.

CERTAIN STATE INCOME TAX AND PUERTO RICO INCOME TAX
CONSIDERATIONS

This section discusses certain state income tax and Puerto Rico income
tax considerations applicable to the Distribution, holding and disposition of
Common Shares. The following discussion of taxation is intended only as a
descriptive summary and does not purport to be a complete analysis or listing of
all potential state and Puerto Rico income tax effects. Shareholders may be
subject to Puerto Rico, state or local tax based on their residence or ACPT's
activities. INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS AS TO
THEIR INDIVIDUAL TAX STATUS WITH RESPECT TO THE COMMON SHARES AND ANY
DISTRIBUTIONS RECEIVED THEREFROM.

CERTAIN STATE TAX CONSIDERATIONS.

If ACPT is treated as having income from Maryland sources a
Shareholder may be required to file a Maryland income tax return. ACPT will
advise Shareholders of the amount, if any, of their share of ACPT's income that
is attributable to Maryland sources.

CERTAIN PUERTO RICO INCOME TAX CONSIDERATIONS.

This summary of Puerto Rico income tax consequences is based on the
provisions of the Puerto Rico Internal Revenue Code of 1994 ("Puerto Rico
Code"), as amended, applicable to taxable years after June 30, 1995, Puerto Rico
Department of the Treasury ("Puerto Rico Treasury") regulations, published and
private rulings and judicial decisions as currently in effect. These sources
are all subject to change and such change

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could be applied retroactively at any time. In addition, it may be some time
before Regulations or other formal guidance is issued under the Puerto Rico
Code. Such Regulations could interpret the relevant law in a manner that is
contrary to this discussion or contrary to the opinion of Puerto Rico Counsel
(defined below) an such interpretation could be applied retroactively. Insofar
as this section of the Information Statement/Prospectus describes Puerto Rico
law, it represents the opinion of Fiddler, Gonzalez & Rodriguez, LLP ("Puerto
Rico Counsel").

No rulings have been requested from the Puerto Rico Treasury with
respect to the matters discussed in this section. Puerto Rico Counsel has
assisted in the preparation of, and has reviewed, the discussion in this
section. Although the opinion of Puerto Rico Counsel represents Puerto Rico
Counsel's best judgment as to the matters discussed herein, it does not bind the
Puerto Rico Treasury or in any way constitute an assurance that the Puerto Rico
income tax consequences described herein will be followed by the Puerto Rico
Treasury. Puerto Rico Counsel does not purport to be expert in, or generally
familiar with, the laws of any jurisdiction other than the applicable laws of
the Commonwealth of Puerto Rico and, therefore, expresses no opinion as to
matters not governed by such laws.

PUERTO RICO INCOME TAX CLASSIFICATION OF ACPT AND IGP GROUP.

IGP Group intends to file an election and to qualify for special
partnership status under Puerto Rico income tax law. As a special partnership
IGP Group would be treated as a partnership for Puerto Rico income tax purposes.
Under current law, a special partnership is not a taxable entity and incurs no
income tax liability. Instead, each partner is required to take into account in
computing such partner's income tax liability such partner's allocable share of
the partnership's income whether or not the partnership makes a distribution
corresponding to such income. Treatment as a special partnership for Puerto
Rico income tax purposes avoids the "double" income taxation that occurs when a
corporation distributes its profits to its shareholders and minimizes the
aggregate Puerto Rico income tax imposed on IGP Group and its subsidiaries.

If it were determined that IGP Group is taxable as a corporation,
however, the anticipated tax advantages to ACPT and the Shareholders would be
materially and adversely affected. If IGP Group were classified as a
corporation, the profits of IGP would be taxed to IGP Group at the applicable
corporate tax rate. Moreover, distributions to ACPT would be treated as
corporate distributions, taxable at ordinary income tax rates to the extent of
earnings and profits, or as non-taxable returns of capital or distributions
taxable at capital gains rates, depending upon the circumstances of the
distribution.

Based on the belief that IGP Group's only asset and source of income
will be its interest in IGP and that IGP Group duly elects to be treated as a
special partnership under the Puerto Rico Code, Puerto Rico Counsel is of the
opinion that (i)

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IGP Group may be organized in conformity with the requirements for qualification
as a special partnership beginning with its taxable year ending December 31,
1998, and (ii) its proposed methods of operation described in this Information
Statement/Prospectus will enable it to satisfy the requirements for such
qualification. The rules governing special partnerships are highly technical
and require ongoing compliance with a variety of tests that depend, among other
things, on the nature of future partnership income. Counsel will not monitor
IGP Group's compliance with these requirements. While IGP Group intends to
satisfy these tests, no assurance can be given that IGP Group will qualify as a
special partnership for any particular year, or that the applicable law will not
change and adversely affect IGP Group, ACPT and/or its Shareholders.

If IGP Group does not qualify as a special partnership, (i) it would
be classified as a corporation, (ii) it would be taxable on its profits at the
applicable corporate rate, and (iii) distributions to ACPT, to the extent they
arise from earnings and profits, would be taxable to the Shareholders as
dividends. Treatment of IGP Group as a corporation would result in a material
reduction in the anticipated cash flow to Shareholders and would have a
significant adverse effect on the value of the Common Shares.

PUERTO RICO INCOME TAXATION OF THE DISTRIBUTION.

United States Shareholders.
--------------------------

Puerto Rico Counsel understands that IGC is not and will not be
engaged in a trade or business in Puerto Rico for Puerto Rico income tax
purposes. Accordingly, a Shareholder who is (i) either an individual resident
in the United States or a corporation or partnership organized under the laws of
a state of the United States, (ii) not engaged in a trade or business in Puerto
Rico (a "United States Shareholder"), and (iii) not a Puerto Rico Shareholder
will not recognize income upon receipt of Common Shares in the Distribution or
cash in lieu of fractional shares.

Puerto Rico Shareholders.
------------------------

The distribution of Common Shares and cash in lieu of fractional Share
interests will be treated as a taxable distribution for Puerto Rico income tax
purposes. If the value of the Common Shares and cash received in the
Distribution is equal to or less than the current or accumulated earnings and
profits of IGC, the value of the Common Shares and cash received will be treated
as a taxable dividend. If the value of the Common Shares and cash received in
the Distribution exceeds the current or accumulated earnings and profits of IGC,
a portion of the value of the Common Shares and cash received in the
Distribution by a Puerto Rico Shareholder will be treated as a taxable dividend.
The value of the Common Shares and cash received in the Distribution in excess
of the amount treated as a taxable dividend will be treated first as a return of
capital to the extent of the Puerto Rico Shareholder's adjusted tax basis for

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Puerto Rico income tax purposes in his IGC Units, and then as gain from the sale
or exchange of property.

If IGC's tax basis in ACPT and cash distributed in lieu of Common
Share interests is equal to or less than the current or accumulated earnings and
profits of IGC, then the entire value of the Common Shares and cash received in
the Distribution by a Puerto Rico Shareholder will be treated as a taxable
dividend to the Puerto Rico Shareholder.

PUERTO RICO INCOME TAXATION OF ACPT.

Under the Puerto Rico Code, ACPT is and will be taxable as a foreign
corporation. As such, it will pay Puerto Rico income tax on certain of its
Puerto Rico source income, including its distributive share of IGP Group's net
taxable income. ACPT may seek rulings from the Treasury to establish that under
the Puerto Rico Code (i) it will be considered not to be engaged in a Puerto
Rico trade or business, (ii) the tax rate at which its distributive share of IGP
Group's net income will be taxed (presumably 29%) and (iii) that distributions
by ACPT to United States Shareholders will not be subject to income and
withholding taxes.

Under the Puerto Rico Code ACPT will not be considered to be engaged
in a Puerto Rico trade or business solely by reason of being a partner in IGP
Group, and, accordingly, (i) the tax rate at which its distributive share of IGP
Group's taxable income will be taxed is twenty-nine percent (29%), and (ii) the
distributions by ACPT to United States Shareholders will not be subject to
income and withholding taxes.

If for purposes of the Puerto Rico Code, ACPT were treated as engaged
in a trade or business in Puerto Rico, then ACPT will be subject to Puerto Rico
income tax (and in certain circumstances a branch profits tax) on its
distributive share of income or loss (subject to certain limitations) of IGP
Group (and any other income derived by ACPT from sources within Puerto Rico on
income which is effectively connected with a trade or business in Puerto Rico)
at the regular graduated tax rates. In certain circumstances, United States
Shareholders would be subject to income and withholding tax on the distribution
by ACPT of its earnings and profits and the redemption of Common Shares.

PUERTO RICO INCOME TAXATION OF IGP GROUP.

IGP Group intends to qualify as a special partnership under the Puerto
Rico Code. As a special partnership, IGP Group is not subject to Puerto Rico
income tax. Instead, IGP Group's partners, including ACPT, are subject to
taxation on their distributive share of IGP Group's taxable income or loss. To
maintain its status as a special partnership under the Puerto Rico Code, IGP
Group must derive 70% or more of its gross income from Puerto Rico sources and
70% or more of its gross income must be

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derived from the sale and/or lease of buildings and structures to third parties
and land development, among other activities.

PUERTO RICO COUNSEL'S OPINIONS OF PUERTO RICO TAXATION OF ACPT AND IGP GROUP.

Puerto Rico Counsel is of the opinion, subject to the following
assumptions and representations, that under the Puerto Rico Code, regulations
promulgated thereunder, applicable private and published rulings, and judicial
decisions, that IGP Group will be treated as a special partnership.

This opinion is based on the following assumptions (i) that IGP Group
duly elects to be treated as a special partnership under the Puerto Rico Code;
(ii) that at least 70% of IGP's income is and will continue to be income from
activities listed in Section 1330(a) as described in the rulings issued by the
Puerto Rico Treasury on November 7, 1988 and December 11, 1996; (iii) that IGP
Group's sole asset and source of income will be IGP; (iv) that IGP Group will be
operated in accordance with its Articles of Incorporation, Bylaws, and this
Information Statement/Prospectus; and (v) that IGP Group shall take such actions
as may be necessary to preserve its status as a special partnership under
Section 1330(a). Puerto Rico Counsel does not purport to be expert on, or
generally familiar with, the laws of any jurisdiction other than the applicable
laws of the Commonwealth of Puerto Rico, and, therefore, expresses no opinion as
to matters not governed by such laws.

CERTAIN PUERTO RICO INCOME TAX CONSEQUENCES TO SHAREHOLDERS.

United States Shareholders.
--------------------------

The Puerto Rico Code provides that distributions by a foreign
corporation or partnership (i.e. ACPT) which is not engaged in a trade or
----
business in Puerto Rico will not constitute income from sources within Puerto
Rico. Accordingly, under the Puerto Rico Code and provided ACPT is not engaged
in a trade or business in Puerto Rico, distributions to United States
Shareholders will not be subject to income and withholding taxes in Puerto Rico.

Any gain recognized by a United States Shareholder upon a sale or
other disposition of a Common Share will not be subject to Puerto Rico income
tax under the Puerto Rico Code if the sale or exchange takes place outside of
Puerto Rico (all rights title and interest must be transferred outside Puerto
Rico). Consequently, any gain realized by a United States Shareholder from a
disposition of a Common Share on AMEX and/or the PSE will not be subject to
Puerto Rico income tax under the Puerto Rico Code.

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Puerto Rico Shareholders.
------------------------

Under the Puerto Rico Code, a Puerto Rico Shareholder will be taxed on
a distribution from ACPT to the extent of the current or accumulated earnings
and profits of ACPT. Distributions in excess of current or accumulated earnings
and profits of ACPT will be treated as a return of capital to the extent of the
Puerto Rico Shareholder's adjusted tax basis in his Common Shares, and then as
gain from the sale or exchange of property. Provided that the Common Share is a
capital asset in the hands of a Shareholder, the gain or loss will be a capital
gain or loss and a long-term capital gain or loss if the Common Share is held
for more than six months.

Upon a sale or other disposition of a Common Share, a Puerto Rico
Shareholder generally will recognize gain or loss equal to the difference
between the amount realized and his adjusted tax basis in the Common Share, both
computed applying the income tax principles of the Puerto Rico Code. Provided
that the Common Share is a capital asset in the hands of a Puerto Rico
Shareholder, the gain or loss will be a capital gain or loss and a long-term
capital gain or loss if the Common Share is held for more than six months.

Because ACPT will be treated as if it were a corporation for Puerto
Rico income tax purposes, a Puerto Rico Shareholder's tax basis in his Common
Shares will not be adjusted as a result of income or loss recognized by ACPT.

DESCRIPTION OF SHARES OF BENEFICIAL INTEREST

The following summary of the terms of the shares of beneficial
interest of ACPT does not purport to be complete and is subject to and qualified
in its entirety by reference to the Declaration of Trust and Bylaws of ACPT,
copies of which are exhibits to the Registration Statement of which this
Prospectus is a part. See "Additional Information."

GENERAL.

The Declaration of Trust of ACPT provides that ACPT may issue up to
10,000,000 Common Shares and 10,000,000 preferred shares of beneficial interest,
$0.01 par value per share ("Preferred Shares"). Upon completion of the
Restructuring, 5,200,000 Common Shares will be issued and outstanding. Assuming
completion of the Private Offering, Preferred Shares also will be issued and
outstanding following the Restructuring. As permitted by the Maryland Trust
Law, the Declaration of Trust contains a provision permitting the Board of
Trustees, without any action by the Shareholders, to amend the Declaration of
Trust to increase or decrease the aggregate number of shares of beneficial
interest or the number of shares of any class of shares of beneficial interest
that ACPT has authority to issue. ACPT believes that the power of

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the Board of Trustees to issue additional shares of beneficial interest will
provide ACPT with increased flexibility in structuring possible future
financings and acquisitions and in meeting other needs that might arise.

Although the Board of Trustees currently does not intend to do so, the
Declaration of Trust permits it, without the consent of the Shareholders, to
authorize ACPT to issue a class or series that could, depending on the terms of
such class or series, delay, defer or prevent a transaction or a change in
control of ACPT that might involve a premium price for the Common Shares and
might otherwise be in the best interests of the shareholders.

Both the Maryland Trust Law and ACPT's Declaration of Trust provide
that no Shareholder of ACPT will be personally liable for any obligation of ACPT
solely as a result of his status as a Shareholder of ACPT. ACPT's Bylaws
further provide that ACPT shall indemnify each Shareholder against any claim or
liability to which the Shareholder may become subject by reason of his being or
having been a Shareholder or former Shareholder and that ACPT shall pay or
reimburse each Shareholder or former shareholder for all legal and other
expenses reasonably incurred by him in connection with any claim or liability.

COMMON SHARES.

All Common Shares offered hereby will be duly authorized, fully paid
and nonassessable. Holders of Common Shares are entitled to receive dividends
on Common Shares if, as and when authorized and declared by the Board of
Trustees of ACPT out of assets legally available therefor. Subject to the
preferential rights of any other class or series of shares of beneficial
interest, holders of Common Shares are entitled to share ratably in the assets
of ACPT legally available for distribution to its Shareholders in the event of
its liquidation, dissolution or winding-up after payment of, or adequate
provision for, all known debts and liabilities of ACPT.

Each outstanding Common Share entitles the holder to one vote on all
matters submitted generally to a vote of Shareholders, including the election of
Trustees. Except as may be provided by the Board of Trustees with respect to any
other class or series of shares of beneficial interest, the holders of such
Common Shares possess the exclusive voting power. There is no cumulative voting
in the election of Trustees, which means that the holders of a majority of the
outstanding Common Shares can elect all of the Trustees then standing for
election and the holders of the remaining Common Shares will not be able to
elect any Trustees.

Holders of Common Shares have no preference, conversion, sinking fund,
redemption or appraisal rights and have no preemptive rights to subscribe for
any securities of ACPT. All Common Shares have equal dividend, distribution,
liquidation and other rights.

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To ensure that American Rental will not fail to qualify as a REIT
under the Code, the Declaration of Trust also authorizes the Trustees to take
such actions as are necessary and desirable to preserve American Rental's REIT
qualification and to limit any person (other than certain current IGC
Unitholders) to direct or indirect ownership of no more than 2% of the
outstanding Common Shares.

PREFERRED SHARES.

The Declaration of Trust authorizes the Board of Trustees to classify
any unissued Preferred Shares and to reclassify any previously classified but
unissued Preferred Shares of any series from time to time in one or more series.
Prior to issuance of shares of each series, the Board of Trustees is required to
set for each such series the terms, the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms or conditions of redemption for each such series. ACPT
currently plans to issue Preferred Shares in the Private Offering. See "The
Restructuring -- The Preferred Offering."

TRANSFER AGENT.

The transfer agent and registrar for ACPT's Common Shares and
Preferred Shares is Registrar and Transfer Company.

CERTAIN PROVISIONS OF MARYLAND LAW
AND OF ACPT'S DECLARATION
OF TRUST AND BYLAWS

The following summary of certain provisions of Maryland laws
applicable to ACPT and of the Declaration of Trust and Bylaws of ACPT is subject
to and qualified in its entirety by reference to such laws and to the
Declaration of Trust and Bylaws of ACPT.

CLASSIFICATION OF THE BOARD OF TRUSTEES.

The Declaration of Trust and Bylaws provide that the number of
Trustees of ACPT may be established by the Board of Trustees but may not be
fewer than three nor more than nine. At the completion of the Restructuring, it
is expected there will be seven Trustees. The Board of Trustees may increase or
decrease the number of Trustees by a vote of at least two-thirds of the members
of the Board of Trustees, provided that the number of Trustees shall never be
less than the number required by law and the Declaration of Trust and that the
tenure of office of a Trustee shall not be affected by any decrease in the
number of Trustees. Any vacancy on the Board of Trustees, including a vacancy
created by an increase in the number of Trustees (but excluding a

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vacancy caused by removal of a Trustee by Shareholders), will be filled by vote
of a majority of the remaining Trustees.

Pursuant to the Declaration of Trust, the Board of Trustees is divided
into three classes of Trustees. The initial terms of the first, second and
third class will expire in 1999, 2000 and 2001, respectively. At each
succeeding Annual Meeting of Shareholders beginning in 1999, Shareholders will
elect, by a plurality of all votes entitled to be cast, Trustees for a term of
three years to succeed the Trustees whose terms are expiring. ACPT believes
that classification of the Board of Trustees will help to assure the continuity
and stability of ACPT's business strategies and policies. Holders of Common
Shares will have no right to cumulative voting in the election of Trustees.

The classified board provisions could have the effect of making the
replacement of incumbent trustees more time consuming and difficult. At least
two Annual Meetings of Shareholders, instead of one, will generally be required
to effect a change in a majority of the Board of Trustees. The staggered terms
of Trustees may reduce the possibility of a tender offer or an attempt to change
control of ACPT or other transaction that might involve a premium price for
holders of Common Shares, even though a tender offer, change of control or other
transaction might be in the best interest of the Shareholders.

INDEPENDENT TRUSTEES.

ACPT's Declaration of Trust requires that no fewer than two of the
members of the Board of Trustees must not be employees of ACPT or any affiliated
company or a member of the Wilson Family.

REMOVAL OF TRUSTEES.

The Declaration of Trust provides that a Trustee may be removed for
cause upon the affirmative vote of a majority, and for any reason upon the
affirmative vote of two-thirds, of the votes entitled to be cast in the election
of Trustees. Any vacancy created by removal of a Trustee will be filled by vote
of the Shareholders.

REQUIRED MINIMUM DISTRIBUTIONS.

Under the Declaration of Trust, ACPT is required to make minimum
annual distributions to Shareholders such that the minimum aggregate amount of
all distributions made each year will equal 45% of the net taxable income
allocated to Shareholders in such year, provided that the amount of the required
minimum distribution will be reduced by the amount of taxes paid by ACPT in
Puerto Rico and other foreign countries and certain federal taxes paid by
American Rental with respect to undistributed capital gains. The minimum
distribution may consist of cash dividends and/or distributions of other
property.

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SUPERMAJORITY VOTING.

Generally, a majority of the votes entitled to be cast by Shareholders
is necessary to approve matters submitted to a vote of Shareholders other than
the election of Trustees, which requires a plurality vote. However, ACPT's
Declaration of Trust provides that a vote of two-thirds of all the Shareholder
votes entitled to be cast on the matter is required to approve the following
matters: (a) the revocation of ACPT's election to be taxed as a partnership; (b)
the removal of Trustees other than for cause; (c) the amendment of the
Declaration of Trust; and (d) the dissolution of ACPT. As permitted by the
Maryland Trust Law, the Declaration of Trust contains a provision permitting the
Board of Trustees, without any action by the Shareholders, to amend the
Declaration of Trust to increase or decrease the aggregate number of shares of
beneficial interest or the number of shares of any class of shares of beneficial
interest that ACPT has authority to issue.

BUSINESS COMBINATIONS.

The provisions of the Maryland General Corporation Law (the "MGCL")
governing certain types of business combinations (including a merger,
consolidation, share exchange or, in certain circumstances, an asset transfer or
issuance or reclassification of equity securities) (a "Business Combination"),
which also apply to real estate investment trusts formed under the Maryland
Trust Law such as ACPT, prohibits certain Business Combinations between a
Maryland investment trust and either (i) any person who beneficially owns,
directly or indirectly, ten percent or more of the voting power of the trust's
shares or is an affiliate of the trust who beneficially owned ten percent or
more of the voting power of the outstanding trust shares within the two-year
period prior to the date in question (an "Interested Shareholder") or (ii) an
affiliate of such an Interested Shareholder for five years after the most recent
date on which the Interested Shareholder became an Interested Shareholder. Any
Business Combination thereafter must be recommended by the board of trustees of
such trust, and approved by the affirmative vote of at least (a) 80% of the
votes entitled to be cast by outstanding voting shares of the trust and (b) two-
thirds of the voting shares entitled to be cast by holders of voting shares of
the trust other than shares held by the Interested Shareholder or an affiliate
of an Interested Shareholder, who will be a party to the Business Combination.
Such recommendation and approval is not necessary where the trust's common
shareholders receive a minimum price per share (as defined in the MGCL) for
their trust shares and the consideration is received in cash or in the same form
as previously paid by the Interested Shareholder for its shares. These
provisions of the MGCL do not apply, moreover, to Business Combinations that are
approved or exempted by a trust's board of trustees prior to the time that the
Interested Shareholder becomes an Interested Shareholder. The Business
Combination statute permits an investment trust to elect not to be governed by
its provisions. However, ACPT's Board of Trustees does not intend to elect not
be governed by the Business Combination provisions of the MGCL.

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CONTROL SHARE ACQUISITIONS.

The provisions of the MGCL which govern certain acquisitions of
Control Shares (as defined below), which also apply to real estate investment
trusts formed under the Maryland Trust Law such as ACPT, provides that Control
Shares of a Maryland investment trust acquired in a Control Share Acquisition
(as defined below) have no voting rights except to the extent approved by the
affirmative vote of two-thirds of the shares entitled to vote on the matter,
excluding shares of beneficial interest owned by the acquiror, or by officers or
trustees employed by the trust. "Control Shares" are defined by the MGCL as
voting shares of beneficial interest (which, in the case of ACPT would include
Common Shares) that, if aggregated with all other such shares of beneficial
interest previously acquired by the acquiror or in respect of which the acquiror
is able to exercise or direct the exercise of voting power (except solely by
virtue of a revocable proxy), would entitle the acquiror to exercise voting
power in electing trustees within one of the following ranges of voting power:
(i) one fifth or more but less than one-third of all voting power, (ii) one-
third or more but less than a majority of all voting power, or (iii) a majority
or more of all voting power. Control Shares include shares of the trust only to
the extent that the acquiror is entitled to exercise or direct the exercise of
voting power. A "Control Share Acquisition" is defined by the MGCL as the
acquisition of Control Shares, subject to certain exceptions.

A person who has made or proposes to make a Control Share Acquisition,
upon satisfaction of certain conditions (including an undertaking to pay
expenses), may compel the board of trustees of the trust to call a special
meeting of shareholders to be held within 50 days of the demand to consider the
voting rights of the shares. If no request for a meeting is made, the trust may
itself present the question for consideration at any shareholders meeting.

If voting rights are not approved at the meeting or if the acquiring
person does not deliver an acquiring person statement as required by statute,
then the trust may redeem any or all of the Control Shares (except those for
which voting rights, at its option, previously have been approved) for fair
value determined as of the date of the last Control Share Acquisition by the
acquiror or of a special shareholder meeting held to consider the voting rights
to be accorded such shares, without regard to the absence of voting rights for
the Control Shares. If voting rights for Control Shares are approved at a
shareholders meeting and the acquiror becomes entitled to vote a majority of the
shares entitled to vote, all other shareholders may exercise appraisal rights.
The fair value of the shares as determined for purposes of such appraisal rights
may not be less than the highest price per share paid by the acquiror in the
Control Share Acquisition.

The Control Share statute does not apply (a) to shares acquired in a
merger, consolidation or share exchange if the trust is a party to the
transaction or (b) to acquisitions approved or exempted by the declaration of
trust or bylaws of the trust.

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The Control Share statute permits an investment trust to elect not to
be governed by its provisions. However, ACPT's Board of Trustees does not
intend to elect not be governed by the Control Share provisions of the MGCL. In
addition, the restriction on ownership of Common Shares set forth in ACPT's
Declaration of Trust also would restrict the ability of any person to engage in
a Control Share Acquisition with respect to the Common Shares.

AMENDMENT OF DECLARATION OF TRUST AND BYLAWS.

The Declaration of Trust may only be amended upon the affirmative vote
of two-thirds of all of the votes entitled to be cast on any such proposed
amendment. In addition, the Declaration of Trust may be amended by the Board of
Trustees, without Shareholder approval to conform the Declaration of Trust to
the Maryland Trust Law. ACPT's Bylaws may be amended or altered exclusively by
the Board of Trustees.

LIMITATION OF LIABILITY AND INDEMNIFICATION.

The Maryland Trust Law permits a Maryland investment trust to include
in its declaration of trust a provision limiting the liability of its trustees
and officers to the trust and its shareholders for money damages except where
(a) it is proved that the person actually received an improper benefit or profit
in money, property or services, or (b) a judgment or other final adjudication
adverse to the person is entered in a proceeding based on a finding material to
the cause of action that the person engaged in active and deliberate dishonesty.
The Declaration of Trust of ACPT contains such a provision that limits liability
to the maximum extent permitted by Maryland law.

The Declaration of Trust and Bylaws of ACPT also obligate it, to the
maximum extent permitted under Maryland law, to indemnify and to pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any present or former Trustee or officer who is made a party to the
proceeding by reason of his service in that capacity and (b) any individual who,
while a Trustee of ACPT and at the request of ACPT, serves or has served another
investment trust corporation, partnership, joint venture, trust, employee
benefit plan or any other enterprise as a trustee, director, officer or partner
and who is made party to the proceeding by reason of his service in that
capacity, against any claim or liability to which he may become subject by
reason of such status. The Declaration of Trust and Bylaws also permit ACPT to
indemnify and advance expenses to any person who served a predecessor of ACPT in
any of the capacities described above and to any employee or agent of ACPT or a
predecessor of ACPT. The Bylaws require ACPT to indemnify each Trustee or
officer who has been successful, on the merits or otherwise, in the defense of
any proceeding to which he is made a party by reason of his service in that
capacity.

The Bylaws of ACPT require it, as a condition to advancing expenses,
to obtain (a) a written affirmation by the Trustee or officer of his good faith
belief that he

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has met the standard of conduct necessary for indemnification by ACPT as
authorized by the Bylaws and (b) a written statement by or on his behalf to
repay the amount paid or reimbursed by ACPT if it shall ultimately be determined
that the standard of conduct was not met.

The Maryland Trust Law permits a Maryland investment trust to
indemnify and advance expenses to its trustees, officers, employees and agents
to the same extent as permitted under the MGCL for directors and officers of
Maryland corporations. The MGCL authorizes a corporation to indemnify its
present and former directors and officers, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by them
in connection with any proceeding to which they may be made a party by reason of
their service unless it is established that (a) the act or omission was material
to the matter giving rise to the proceeding and (i) was committed in bad faith
or (b) was the result of active and deliberate dishonesty, (b) the director or
officer actually received an improper personal benefit in money, property or
services or (c) the director or officer in the case of any criminal proceeding
had reasonable cause to believe that the act or omission was unlawful. A
Maryland corporation, however, may not indemnify a director or officer for an
adverse judgment in a suit brought by or on behalf of the corporation.

DISSOLUTION OF ACPT.

Pursuant to ACPT's Declaration of Trust, ACPT may be dissolved upon
the affirmative vote of two-thirds of all of the votes entitled to be cast on
such matter.

POSSIBLE ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS OF MARYLAND LAW AND OF THE
DECLARATION OF TRUST AND BYLAWS.

The Control Share and Business Combination provisions of the MGCL and
the provisions of ACPT's Declaration of Trust relating to classification of the
Board of Trustees, the removal of Trustees, restrictions on ownership of Common
Shares, and the ability of the Board of Trustees to prescribe the terms of and
issue Preferred Shares could have the affect of delaying, deferring or
preventing a transaction or a change in control of ACPT that might involve a
premium price for holders of Common Shares or otherwise be in their best
interest.

MARYLAND ASSET REQUIREMENTS.

The Maryland Trust Law pursuant to which ACPT was formed requires at
least 75% of the value of ACPT's assets to be held, directly or indirectly, in
real estate assets, mortgages or mortgage related securities, government
securities, cash and cash equivalent items, including high-grade short term
securities and receivables. The Maryland Trust Law also prohibits ACPT from
using or applying land for farming, agricultural, horticultural or similar
purposes.

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COMPARATIVE RIGHTS OF IGC UNITHOLDERS AND SHAREHOLDERS

GENERAL.

IGC is a limited partnership formed under the Delaware Act and ACPT is
organized as a real estate investment trust under the Maryland Trust Law that
will be taxable as a partnership. The discussion of the comparative rights of
IGC Unitholders and Shareholders of ACPT set forth below does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Maryland Trust Law, the Delaware Act, the Partnership Agreement of IGC and the
Declaration of Trust and Bylaws of ACPT. Copies of these documents have been
filed as exhibits to the Registration Statement of which this Information
Statement/Prospectus is a part.

MANAGEMENT.

The Partnership Agreement of IGC provides that, with certain limited
exceptions, the Managing General Partner of IGC (which currently is IGMC) has
exclusive discretion to manage and control the business and affairs of IGC. The
Managing General Partner may be removed upon the affirmative vote of more than
fifty percent of the IGC Unitholders. The IGC Unitholders do not have any right
to elect the directors of the Managing General Partner.

The Declaration of Trust of ACPT provides that the management and
control of the business and affairs of ACPT are vested in its Board of Trustees
which is elected by the Shareholders. The Declaration of Trust of ACPT provides
for a classified Board consisting of three classes as nearly equal in number as
possible. At each Annual Meeting of Shareholders, one class of Trustees will be
elected for a term of three years. Trustees may be removed for cause upon a
majority vote, and for any reason by a two-thirds vote, of the Shares entitled
to vote in the election of Trustees. Vacancies created by removal will be
filled by Shareholder vote. Any other vacancy will be filled by a majority of
the Board of Trustees remaining in office.

REQUIRED MINIMUM DISTRIBUTIONS

Under the Partnership Agreement, IGC generally is required to make
annual cash distributions to IGC Unitholders equal to 55% of the net taxable
income (as defined in the Partnership Agreement) allocated to such IGC
Unitholders for such year.

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other foreign countries and certain federal taxes paid by American Rental with
respect to undistributed capital gains. The minimum distribution may consist of
cash dividends and/or distributions of other property.

VOTING RIGHTS.

Under the Partnership Agreement of IGC, IGC Unitholder approval by
majority vote is required for (i) sale of all or substantially all of the assets
of IGC, (ii) merger or consolidation, and (iii) certain amendments to the
Partnership Agreement, including issuances of additional limited partnership
interests. The Managing General Partner has the exclusive authority to issue
IGC Units without limitation as to amount.

In addition, certain actions including actions that would cause loss
of limited liability, treatment of IGC as a corporation for tax purposes, or,
except in the case of merger or dissolution, delisting of IGC Units from any
national securities exchange require a unanimous vote of IGC Unitholders.

Under the Declaration of Trust of ACPT, Shareholders have voting
rights with respect to (i) termination of partnership tax status, (ii) the
election and removal of Trustees; (iii) amendments of the Declaration of Trust,
(iv) the merger or consolidation of ACPT or the sale of substantially all of
ACPT's assets; and (v) the dissolution of ACPT; and (vi) such other matters with
respect to which the Board of Trustees may deem to require a Shareholder vote.
Each Common Share entitles its holder to cast one vote on all matters presented
generally to the Shareholders.

MEETINGS.

The Partnership Agreement of IGC does not provide for annual meetings
of the IGC Unitholders.

The Declaration of Trust of ACPT and the Maryland Trust Law require
that an Annual Meeting of Shareholders be duly held. The Bylaws of ACPT also
provide for the calling of special meetings under certain circumstances.

AMENDMENT OF DECLARATION OF TRUST, BYLAWS AND PARTNERSHIP AGREEMENT.

Under the Partnership Agreement, holders of IGC Units representing at
least 10% of the outstanding limited partnership interests may propose
amendments to the Partnership Agreement. Any proposed amendments require a
majority vote, except for amendments which (i) would adversely affect in any
material aspect the rights of the IGC Unitholders to exercise any right granted
to the Assignor Limited Partner by the Delaware Act (such as the right to
maintain a derivative action, the right to exercise voting power, and the right
to inspect and photocopy IGC's books and records) and assigned to the IGC
Unitholders, (ii) would result in the loss of limited liability of the

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Limited Partners or IGC Unitholders, (iii) would cause IGC to be treated as an
"association" taxable as a corporation for purposes of federal income taxation,
or (iv) would result in the delisting of the IGC Units by any securities
exchange on which the IGC Units are traded; all of which require unanimous
approval. In addition, any amendment that would reduce the minimum cash
distributions that IGC is required to make must be approved by a two-thirds vote
of IGC Unitholders.

The Declaration of Trust of ACPT may only be amended by the
affirmative vote of two-thirds of the outstanding Common Shares. The Bylaws of
ACPT may be amended exclusively by majority vote of the Board of Trustees.

LIMITED LIABILITY.

Under the Partnership Agreement, unless an IGC Unitholder participates
in the control of the business or in certain other limited circumstances, it
will not be responsible for the liabilities of IGC.

The personal liability of the Shareholders of ACPT is limited to the
fullest extent permitted from time to time by Maryland law. However, certain
jurisdictions may not recognize limitations on personal liability of
Shareholders to the extent such claims are not satisfied by ACPT. The Board of
Trustees believes that any risk of personal liability would generally be limited
to situations in which ACPT's public liability insurance coverage would be
insufficient to satisfy claims.

DISSOLUTION OF THE PARTNERSHIP AND ACPT.

Under the Partnership Agreement, dissolution of IGC requires the
consent of a majority of the IGC Unitholders.

Under the terms of the Declaration of Trust of ACPT, the Shareholders
may compel the dissolution of ACPT by the affirmative vote of two-thirds of the
votes entitled to be cast.

LIQUIDATION RIGHTS.

Under the Partnership Agreement, IGC Unitholders share ratably in
accordance with their percentage interests in any assets remaining after
satisfaction of obligations to creditors and any liquidation preferences of
preferred units.

In the event of liquidation of ACPT, the holders of Common Shares
would be entitled to share ratably in any assets remaining after satisfaction of
obligations to creditors and any liquidation preferences on any series of
Preferred Shares that may then be outstanding.

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LIMITATIONS OF LIABILITY OF GENERAL PARTNERS AND TRUSTEES.

The Partnership Agreement of IGC sets certain limits on the liability
of the General Partners and their affiliates to IGC and the IGC Unitholders.

The Declaration of Trust of ACPT provides that Trustees shall not be
liable to ACPT or the Shareholders for losses sustained or liabilities incurred
as a result of any acts or omissions of the Board of Trustees if the conduct of
the applicable person did not constitute active and deliberate dishonesty as
adjudicated by a court of competent jurisdiction, or if the Trustee actually
received an improper benefit or profit in money, property or services.

INDEMNIFICATION.

The Partnership Agreement of IGC indemnifies the General Partners and
their affiliates under certain circumstances.

The Declaration of Trust and Bylaws of ACPT provides that ACPT will
indemnify present and former Trustees and officers to the maximum extent
permitted by Maryland law.

OWNERSHIP LIMITATIONS.

There is no limitation on the number of IGC Units that any Unitholder
may own. In order to maintain the REIT status of American Rental, no
Shareholder (except certain existing IGC Unitholders) may own more than 2% of
the outstanding Common Shares.

LEGAL MATTERS

The validity of the issuance of the Common Shares being offered hereby
will be passed upon for ACPT by Covington & Burling. The federal income tax
consequences in connection with the Restructuring will be passed upon for ACPT
by Covington & Burling and the Puerto Rico income tax consequences in connection
with the Restructuring will be passed upon for ACPT by Fiddler, Gonzalez &
Rodriguez LLP.

EXPERTS

The combined balance sheets of ACPT as of December 31, 1996 and 1995,
the related combined statements of income and cash flows for each of the three
years in the period ended December 31, 1996, included in this Information
Statement/Prospectus and elsewhere in the Registration Statement have been
audited by

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Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
reports of said firm and upon the authority of said firm as experts in
accounting and auditing in giving said reports.

APPRAISALS

IGC has obtained appraisals of certain land assets being transferred
to ACPT and certain land assets that will be retained by IGC following the
Restructuring. The appraisal reports (the "Appraisal Reports") prepared for
these properties have been included as exhibits to the Registration Statement of
which this Information Statement/Prospectus is a part. The following discussion
is qualified in its entirety by reference to such Appraisal Reports.

PROPERTIES RETAINED BY IGC.

Brandywine Village, Brandywine, MD.
----------------------------------

SCA is the general partner of, and holds a 50% interest in, Brandywine
Investment Associates, L.P., which owns Brandywine Village, a 277 acre tract of
land in Brandywine, Prince George's County, Maryland. The property was acquired
in 1985 and comprises two approved comprehensive design zones that permit
residential, retail commercial, office commercial and light industrial uses.
The Gatewood Company, Inc. ("Gatewood") appraised the property on June 30, 1997
as having a total undiscounted prospective value of $11,900,000, which, when
discounted to present "as is" market value, produced an estimated market value
of $8,885,000 as of June 9, 1997. Pursuant to the terms of the partnership
agreement, SCA is entitled to a recovery of its advances, a priority return and
50% of the remaining cash flow. Accordingly, IGC's indirect 50% interest in the
Brandywine property has an appraised "as is" value of $4,442,500 as of June 9,
1997.

Gatewood employed the sales comparison approach to calculate present
"as is" market value whereby value is determined by comparison of sales of
reasonably similar properties to the subject properties. Gatewood also assumed
that final approvals for the construction of 234 lots and a local access road
would be obtained by developers within one year. Five separate property
components were identified by Gatewood based on applicable zoning restrictions:
8.53 acres commercial; 64.74 acres medium density residential; 7.87 acres high
density residential; and 46 acres office/light industrial. The Sales Comparison
Approach produced an aggregate undiscounted value of $11,900,000, which was then
discounted to a present "as is" market value of $ 8,885,000 to reflect the time
and costs required to support marketability, e.g., local infrastructure, and a
10% discount rate.

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Southlake at Montclair Subdivisions Section S-7 & Section S-4, Dumfries,
------------------------------------------------------------------------
VA.
- --
Section S-7 of Southlake at Montclair Subdivision consists of 13.189
acres of land located along the west side of South Lake Boulevard at its
intersection with Higgins Drive in the Southlake Montclair planned community in
Dumfries, Virginia. Section S-4 of Southlake at Montclair Subdivision consists
of 77 raw, recorded townhouse lots located along the east side of South Lake
Boulevard north of its intersection with Waterway Drive in the Southlake
Montclair planned community in Dumfries, Virginia. NBValuation Group, Inc.
("NBV") appraised Section S-4 as having a total undiscounted prospective value
of $1,925,000, which, when discounted to present "as is" market value, produced
an estimated market value of $620,000 as of May 12, 1997. NBV appraised Section
S-7 as having a total undiscounted prospective value of $2,544,000, which, when
discounted to present "as is" market value, produced an estimated market value
of $954,000 as of May 12, 1997.

NBV employed the developmental or anticipated use method whereby the
present "as is" market value of property is based on an estimate of the gross
sell-out of the subject lots on a finished, retail basis. The total of all
direct and indirect costs necessary to complete the land development required in
order to market the finished lots on a retail basis, in addition to all holding
period expenses that may reasonably be anticipated in connection with the
development and marketing process, are deducted from the estimated sale
proceeds. Further, the methodology takes into account absorption, related
holding period costs and anticipated profit. NBV assumed that Section S-7 would
yield 53 finished single-family lots, and that Section S-4 would produce 77
finished townhouse lots.

Westbury, Phase II (S) 2, Lexington Park, MD.
--------------------------------------------

Westbury, Phase II Section II comprises 26.992 acres of undeveloped
land off the north side of Pegg Road and Westbury Boulevard West in Lexington
Park, Maryland. Brick House Realty, Inc. ("Brick House") appraised the property
on May 30, 1997 as having a total undiscounted prospective market value of
$1,632,000 based on a proposed 51-lot subdivision on the property. Brick House
discounted this figure to a present "as is" market value of $348,813 as of May
20, 1997. Brick House, on request, further appraised the property as recorded
but undeveloped "paper lots" to be worth $678,000, and the value of the subject
property "as is" raw land to be worth $250,000.

Brick House employed the sales comparison approach discussed above to
determine present "as is" market value of the subject property. Brick House
estimated an average of $32,000 per lot for the 51 potential lots determined
from comparison to sales of reasonably similar type properties in the area.
Brick House calculated an aggregate prospective market value of $1,632,000,
which was then discounted to $348,813 to reflect the time expected to sell all
lots, the carrying cost during the sellout

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period, the marketing expense, developer's profit, other completion costs, and a
13% discount rate.

Pomfret Property, Waldorf, MD.
------------------------------

The Pomfret Property comprises 812.2 acres of land designated for
residential low density development located on the southern and northern sides
of Pomfret Road. The total assemblage is broken down into a Northern Section,
which contains 202.79 acres, and the Southern Section, which contains 609.38
acres. Smail Associates, Inc. ("Smail") appraised the property on February 14,
1997 as having a present "as is" market value of $3,248,800 as of December 31,
1996.

Smail used the sales comparison approach using the most comparable
date to arrive at a projected "as is" market value estimate per land use for the
Pomfret Property. Under this approach, recent sales of similar properties are
analyzed and each sale adjusted to reflect pertinent dissimilarities with the
subject property, including cash equivalency, market conditions, and other
factors warranting adjustment. Smail then calculated the net present value of
the projected income stream over the estimated lot sellout period based on the
retail value of finished lots, the projected absorption of finished lots, and
deductions representing the installation of infrastructure, costs of sales,
administrative costs, real estate taxes and an appropriate entrepreneurial
profit. Smail concluded that development of these parcels was not feasible at
that time and that the property should be held over for future development.
Smail, after making the appropriate adjustments, valued each acre at $4,000 to
yield an aggregate "as is" market value of $3,250,000 for the entire Pomfret
Property.

PROPERTIES TRANSFERRED TO ACPT.

Parque Escorial Planned Community, San Juan/Carolina, Puerto Rico.
------------------------------------------------------------------

Parque Escorial consists in its entirety of 439.79 cuerdas, or 431
acres, located south of 65th Infantry Avenue and Ramal Este Avenue in the Sabana
Llana and San Anton Wards of the municipalities of San Juan and Carolina, Puerto
Rico. Robert F. McCloskey Associates ("McCloskey Associates") appraised the
value of 204.28 cuerdas, or 198.15 acres, of saleable land of Parque Escorial as
of November 15, 1996, the effective date of the appraisal report, to be worth
$35,900,000 as of December 1, 1996.

McCloskey Associates employed the sales comparison approach, described
above, to determine the "as is" market value of the 198.15 acres of Parque
Escorial property under development. McCloskey Associates assumed the
completion of all infrastructure and facilities planned in connection with the
subject property and all approvals and endorsements for the development.
McCloskey Associates valued the Parque Escorial property based on an existing
five phase construction plan: Phase I -

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commercial center & service commercial; Phase II, III and V - residential; and
Phase IV - office park/commercial. McCloskey Associates calculated the "as is"
market value of the subject property, inclusive of development, financing and
sales costs, to be $18,400,000 for Phase I and IV and $25,100,000 for Phase II,
III, and future development. Applying the necessary discount for present value
considerations, McCloskey Associates determined the present "as is" market value
of the subject property to be $35,900,000.

Canovanas Property, Canovanas, Puerto Rico.
-------------------------------------------

The Canovanas Property consists of 559.71 cuerdas, or 542.92 acres, of
undeveloped property located south of State Road No. 3 Km. 16.2 in Canovanas,
Puerto Rico. The subject land comprises three contiguous parcels surrounding
the El Comandante-racetrack. McCloskey Associates appraised Canovanas Property
on July 2, 1995 as having a present "as is" value of $6,100,000 as of June 30,
1995.

McCloskey Associates used the sales comparison approach to calculate
the present "as is" market value of the subject property based on its present R-
I (low density residential) zoning and verified financing terms and sales
conditions of comparable properties, and then adjusted its calculations to
reflect the characteristics of the subject property. McCloskey Associates
assessed the subject property as comprised of three separate parcels. The
adjusted comparable sales of each parcel were then reconciled into a single
value estimate for the entire subject property. The aggregate prospective
market value of the parcels was calculated to be $10,525,000. Discounting the
prospective market value of the subject property to present "as is" market
value, McCloskey Associates calculated the value of the subject property to be
$6,100,000. McCloskey Associate's report does not address the development of
this property as an entertainment complex as presently envisioned.

Smallwood Village, Westlake Village, Wooded Glen, and Piney Reach of the
------------------------------------------------------------------------
St. Charles Planned Unit Development and Surrounding Environs, St. Charles, MD.
- -------------------------------------------------------------------------------

The subject property consists of remnant parcels in two completed
villages and two undeveloped villages, Wooded Glen and Piney Reach, in the St.
Charles PUD, and various surrounding environs including the Middletown Property
that were subsequently sold. The subject property comprises residential land
that includes finished lots, raw recorded lots, and raw acreage; industrial land
that includes finished sites and raw land; and commercial land. Wooded Glen and
Piney Reach total 3,079 acres, for which 10,000 residential units are planned.
The Middletown Property consists of 374 acres situated on the west side of
Middletown Road. Smail appraised the property on February 14, 1997 as having an
"as is" present market value of $40,835,000 as of December 31, 1996.

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Smail employed the sales comparison approach to estimate the retail
value of finished single-family and townhouse lots, an apartment site on the
subject property, all raw acreage, and commercial and industrial land parcels.
Smail applied the subdivision analysis method to calculate the "as is" market
value of 60 finished single-family lots in the Dorchester Neighborhood of
Westlake Village, 98 remaining townhouse lots in Huntington Ridge, and finished
industrial and commercial sites on the subject property. The subdivision
analysis approach is a hybrid of the cost, sales comparison and income
approaches to valuation in which the present value of the property is estimated
by projecting periodic income from the sale of finished lots, subtracting land
development, sales, carrying costs, and profit, and discounting the resultant
periodic cash flows to provide an indication of present value. For purposes of
its appraisal, Smail identified the subject property according to whether it was
residential, industrial or commercial land.

Smail appraised 60 finished lots in the Dorchester Neighborhood based
on sales prices for comparable units ranging from $35,672 to $48,000 per lot.
Smail Associates appraised the finished Huntington Ridge townhouse units as
having a $32,000 finished lot value based on comparable sales. Discounting the
prospective market price to present "as is" market value,

Fairway Village (Residential), St. Charles MD.
----------------------------------------------

Fairway Village (Residential) consists of approximately 1,287 acres of
land containing a total of 3,346 residential units to be developed in five
stages containing 837 townhouse units, 922 large single-family lots, 499 medium
single-family lots, 252 small single-family lots, and 836 apartment units
located on the east and west sides of St. Charles Parkway near its southern
terminis at White Plains Regional Park in Waldorf, Maryland. James B. Hooper,
P.A. ("Hooper") appraised the property on May 25, 1997 as having an aggregate
"as is" present market value of $19,263,000 as of that date.

Hooper employed the market data approach, a variant of the sales
comparison approach, whereby the appraiser analyses recent sales of similar
properties to estimate the value of the apartment units on the subject property.
The relevant sales are then adjusted for dissimilarities between sale properties
and the subject property to arrive at an indication of value. Using this
approach, Hooper determined the apartment units to have an overall gross retail
value of $7,524,000, which was discounted to present "as is" market value of
$3,014,000. Hooper used the market data approach to calculate the value of the
837 townhouse units on the subject property to be $11,300,000. This figure was
then discounted to an "as is" present market value of $4,888,000 to reflect a
16-year absorption period, sales expenses, and soft costs. Applying the same
methodology, Hooper appraised the gross retail value of the single-family
detached residence units to be $31,308,000, which was then discounted to an "as

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is" present market value of $11,361,000. Accordingly, Hooper calculated the
total aggregate "as is" market value of the subject property to be $19,263,000.

Fairway Village (Commercial), St. Charles.
-----------------------------------------

Fairway Village (Commercial) consists of approximately 38 acres of
land, more or less within the Sheffield and Gleneagles Neighborhoods, that has
been designated for commercial, office, and business usage within the Fairway
Village Neighborhood. Hooper appraised the property as having an aggregate "as
is" present market value of $3,960,000 as of October 31, 1997.

Hooper used the market data approach discussed above to determine the
value of the subject property. Relying on sales of comparable properties, and
then adjusting the data to reflect relevant dissimilarities with the subject
property, Hooper estimated the gross retail value of the property to be
$8,276,000. Hooper then discounted the gross retail value based on an initial
3-year carrying period and an anticipated 4-year absorption period once sales
commence. Hooper employed a discount factor of 14% for the 3-year holding
period, which, along with a discount for the absorption period, generated an "as
is" market value of $3,960,000.

GENERAL.

The appraisers of the properties described above generally made a
number of assumptions, including that the title was marketable and that the
properties were free and clear of all liens and encumbrances (except certain
mortgages thereon), and in compliance with applicable building, environmental,
zoning and similar laws. In preparing their Appraisal Reports, the appraisers
relied upon operating, financial and other information provided by IGC and other
sources.

Care should be exercised in evaluating the conclusions of the
Appraisal Reports. An appraisal is only an estimate of value and should not be
relied upon as a measure of realizable value. As with any appraisal, methods
and assumptions used by the appraisers in preparing the Appraisal Reports were
those that the appraisers, in their professional judgment, concluded were
appropriate. There can be no assurance, however, that such assumptions will
materialize or that other or different methods or assumptions might not be
appropriate. Moreover, the current appraised value of the property is not a
prediction of the value that the property may have at any time in the future.
Future values of property will depend on a variety of factors, including the
economic success of the property, the impact of inflation on property values,
local competitive circumstances and general economic conditions.

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REPORTS TO SHAREHOLDERS

ACPT will furnish to each Shareholder of record, within 90 days of the
close of each fiscal year, an annual report containing information substantially
as submitted by ACPT to the SEC on its annual report on Form 10-K, including a
report of the activities of ACPT and a statement showing any cash from
operations or proceeds of capital transactions distributed or to be distributed
in respect of such fiscal year. Such annual report also will contain certain
financial statements of ACPT for such fiscal year, including a balance sheet and
statements of income, [partners' equity,] and changes in financial position,
each of which will be audited by a nationally recognized firm of independent
public accountants. In addition, within 45 days after the end of each fiscal
quarter (except the fourth quarter), ACPT will furnish to each Shareholder of
record a quarterly report containing information substantially as submitted by
ACPT to the SEC on its quarterly report on Form 10-Q, including an unaudited
balance sheet and statements of income and changes in financial position. Each
such annual and quarterly report also will include a statement setting forth (i)
any transactions between IGC and ACPT, or any affiliate of either of them; (ii)
the amount of any fees, commissions, compensation and other remuneration paid or
accrued to ACPT; and (iii) a description of any services rendered to IGC by
ACPT, or any affiliate of either of them. The financial information contained
in all such reports will be prepared on the accrual basis of accounting in
accordance with generally accepted accounting principles and, where appropriate,
will include a reconciliation to information furnished to Shareholders for tax
purposes.

Within 75 days after the close of each taxable year, ACPT will furnish to
each Shareholder of record information required for federal and state income tax
reporting purposes. Such information will be furnished in summary form so that
certain complex calculations normally required of partners can be avoided.
ACPT's ability to furnish such summary information may depend on the cooperation
of Shareholders in supplying certain information to ACPT.

GLOSSARY

The meanings of certain capitalized and specialized terms used in this
Prospectus are set forth below. Terms defined in the singular form shall
similarly refer to the plural and vice versa.

"ACMs" means asbestos-containing materials.

"ACPT" means American Community Properties Trust, a Maryland real
estate investment trust formed under the Maryland Trust Law.

"ADA" means the Americans with Disabilities Act of 1990.

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"AFH" means American Family Homes, Inc., a Delaware corporation.

"American Housing" means American Housing Properties, L.P., a Maryland
limited partnership.

"American Land" means American Land Development US, Inc., a Maryland
corporation.

"American Management" means American Rental Management Company, a
Delaware corporation and the property manager for the properties owned by
American Rental.

"American Rental" means American Rental Properties Trust, a Maryland
real estate investment trust.

"AMEX" means the American Stock Exchange.

"Appeals Court" means the U.S. Court of Appeals for the Fourth
Circuit.

"Approval Date" means , 1997.

"Asset Transfers" means the transfers of IGC's principal operations
and assets to ACPT.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission" means the Securities and Exchange Commission.

"Common Shares" means the common shares of beneficial interest of
ACPT.

"Consent" means the form of Written Consent of the IGC Unitholders for
the authorization and approval of the Restructuring.

"County" means Charles County, Maryland.

"County Commissioners" means the County Commissioners of Charles
County, Maryland.

"Distribution" means the distribution of all of the Common Shares of
ACPT to the partners of IGC including the IGC Unitholders.

"EDGAR" means the Commission's Electronic Data Gathering and Retrieval
program.

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"Equus" means Equus Gaming Company L.P., a Virginia limited
partnership.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations thereunder.

"Escorial Builders" means Escorial Builders Associates S.E., a Puerto
Rico partnership principally engaged in the construction of condominiums.

"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.

"FHA" means the Federal Housing Administration.

"HDA" means Housing Development Associates S.E., a Puerto Rico special
partnership.

"HUD" means the United States Department of Housing and Urban
Development.

"IBC" means Interstate Business Corporation, a Delaware corporation
and a general partner of IGC.

"IGC" means Interstate General Company, L.P., a Delaware limited
partnership.

"Restructuring" means the series of transactions in which ACPT will
succeed to substantially all of the community development, homebuilding, rental
apartment and management services businesses of IGC and certain of its
affiliates.

"IGC Unit" means a Class A unit of beneficial interest in IGC.

"IGC Unitholder" means a holder of IGC Units.

"IGMC" means Interstate General Management Corporation, a Delaware
corporation and the managing general partner of IGC.

"IGP" means Interstate General Properties L.P., a Maryland limited
partnership.

"Independent Trustees" means members of the Board of Trustees of ACPT
who are not employees of ACPT or any affiliated company or members of the Wilson
Family.

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"IRS" means the Internal Revenue Service.

"IWT" means Interstate Waste Technologies, Inc., a Delaware
corporation.

"LDA" means Land Development Associates S.E., a Puerto Rico
partnership.

"Liquidation" means the liquidation of IGC if it is delisted from
either the AMEX or the PSE as a result of the Restructuring.

"Majority Vote" means the vote or consent of the holders of IGC Units
representing a majority of all issued and outstanding IGC Units entitled to
vote.

"Maryland Trust Law" means Article 8 of the Maryland Corporations and
Associations Law.

"MGCL" means Maryland General Corporation Law.

"Parque Escorial" means the planned community of Parque Escorial
located approximately six miles from the central business district in San Juan,
Puerto Rico.

"Plan" means a pension, profit-sharing, employee benefit, or
retirement plan, or individual retirement account under ERISA.

"Plan Asset Regulations" means regulations of the Department of Labor
that define the assets of a Plan under ERISA.

"Planning Commission" means the Charles County Planning Commission.

"Preferred Shares" means preferred shares of beneficial interest in
ACPT, par value $0.01 per share.

"Puerto Rico Apartment Partnerships" means the 14 Puerto Rico
apartment partnerships in which IGP holds partnership interests.

"Registration Statement" means the Form S-4 Registration Statement
filed by ACPT with the Commission.

"Regulations" means Regulations of the Treasury Department
interpreting the Code.

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"REIT" means a real estate investment trust within the meaning of
Section 856 of the Code.

"Securities Act" means the Securities Act of 1933, as amended, and
applicable regulations thereunder.

"St. Charles" means the planned community in Charles County, Maryland,
that has been under development by IGC and its predecessors since 1968.

"State Finance Agencies" means the FHA, or housing finance agencies in
Puerto Rico, Washington, D.C., Virginia or Maryland.

"U.S. Apartment Partnerships" means the 13 investment apartment
properties in which IGC holds partnership interests that will be transferred to
American Rental under the Restructuring.

"U.S. Attorney" means the U.S. Attorney for the District of Maryland.

"Wetlands" means (following the definition in the U.S. Army Corps of
Engineers regulations) areas saturated by surface or ground water sufficient to
support vegetation typically adapted for life in saturated soil conditions.
Wetlands generally include swamps, marshes, bogs and similar areas.

-172-

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Unitholders of Interstate General Company L.P.:

We have audited the accompanying combined historical balance sheets (as
defined in Note 1 to the combined historical financial statements and referred
to as "American Community Properties Trust") of assets and liabilities to be
transferred by Interstate General Company L.P. and subsidiaries to American
Community Properties Trust (a Maryland investment trust) and subsidiaries as of
December 31, 1996 and 1995, and the related combined historical statements of
income and cash flows for each of the three years in the period ended December
31, 1996. These combined historical financial statements are the responsibility
of the management of American Community Properties Trust. Our responsibility is
to express an opinion on these combined historical financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

The accompanying combined historical statements were prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the registration statement on Form S-4 of
American Community Properties Trust), as described in Note 1, and are not
intended to be a complete presentation of the financial position, results of
operations or cash flows of Interstate General Company L.P.

In our opinion, the combined historical financial statements referred to
above present fairly, in all material respects, the financial position of
American Community Properties Trust as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accounting
principles.

ARTHUR ANDERSEN LLP

Washington, D.C.
November 14, 1997

F-1

AMERICAN COMMUNITY PROPERTIES TRUST
COMBINED STATEMENTS OF INCOME
(In thousands)

Six Months Ended
June 30, Year Ended December 31,
--------------------------------------------------
1997 1996 1996 1995 1994
-------- -------- -------- --------- ---------
(unaudited)

REVENUES
Community development-land sales
to non-affiliates $ 2,497 $ 3,033 $ 3,608 $11,333 $19,523
to affiliates 3,070 6,706 10,066 4,108 1,645
Equity in earnings from partnerships
and developer fees 650 15,796 16,643 2,693 5,038
Rental property revenues 4,300 3,240 7,577 4,642 4,537
Management and other fees, substantially
all from related entities 2,269 3,270 4,816 3,894 3,507
Interest and other income 415 535 982 693 649
------- ------- ------- ------- -------
Total revenues 13,201 32,580 43,692 27,363 34,899
------- ------- ------- ------- -------

EXPENSES
Cost of land sales 3,459 6,624 9,378 7,801 12,934
Selling and marketing 64 107 226 131 109
General and administrative 3,252 3,950 6,810 6,769 6,619
Interest expense 1,900 2,902 4,433 4,263 4,337
Rental properties operating expense 1,768 1,401 3,245 1,695 1,724
Depreciation and amortization 941 576 1,726 841 843
Write-off of deferred project costs 6 -- 321 -- --
------- ------- ------- ------- -------
Total expenses 11,390 15,560 26,139 21,500 26,566
------- ------- ------- ------- -------

INCOME BEFORE PROVISION FOR INCOME
TAXES AND MINORITY INTEREST 1,811 17,020 17,553 5,863 8,333
PROVISION FOR INCOME TAXES 8 5,339 3,424 1,369 3,304
------- ------- ------- ------- -------

INCOME BEFORE MINORITY INTEREST 1,803 11,681 14,129 4,494 5,029
MINORITY INTEREST (13) (475) (306) (511) (680)
------- ------- ------- ------- -------

INCOME BEFORE EXTRAORDINARY ITEM 1,790 11,206 13,823 3,983 4,349
EXTRAORDINARY ITEM-EARLY
EXTINGUISHMENT OF DEBT -- -- (932) -- --
------- ------- ------- ------- -------
NET INCOME $ 1,790 $11,206 $12,891 $ 3,983 $ 4,349
======= ======= ======= ======= =======

The accompanying notes are an integral part of these combined statements.

F-2

AMERICAN COMMUNITY PROPERTIES TRUST
COMBINED BALANCE SHEETS
(In thousands)

A S S E T S
-----------

June 30, December 31,
----------- ------------------
1997 1996 1995
----------- -------- --------
(unaudited)

CASH AND CASH EQUIVALENTS
Unrestricted $ 1,545 $ 2,143 $ 3,382
Restricted 813 895 2,045
-------- -------- --------
2,358 3,038 5,427
-------- -------- --------

ASSETS RELATED TO RENTAL PROPERTIES
Operating properties, net of accumulated
depreciation of $21,164, $20,658 and $5,124,
as of June 30, 1997, December 31, 1996 and 1995,
respectively 38,724 39,219 23,348
Investment in unconsolidated rental property
partnerships 8,180 11,693 10,898
Other receivables, net of reserves of $4, $52 and $261
as of June 30, 1997, December 31, 1996 and
and 1995, respectively 373 612 715
-------- -------- --------
47,277 51,524 34,961
-------- -------- --------

ASSETS RELATED TO COMMUNITY DEVELOPMENT
Land and development costs
Puerto Rico 36,751 35,068 33,773
St. Charles, Maryland 21,735 22,024 22,039
Other United States locations -- 1,636 1,636
Notes receivable on lot sales and other,
substantially all due from affiliates 6,167 5,253 2,842
-------- -------- --------
64,653 63,981 60,290
-------- -------- --------

ASSETS RELATED TO HOMEBUILDING
Investment in joint venture 452 275 250
Receivables and other -- -- 9
-------- -------- --------
452 275 259
-------- -------- --------

OTHER ASSETS
Receivables and other 1,734 1,938 1,172
Property, plant and equipment, less accumulated
depreciation of $1,817, $1,770 and $1,636 as of
June 30, 1997, December 31, 1996 and 1995,
respectively 484 487 545
-------- -------- --------
2,218 2,425 1,717
-------- -------- --------
TOTAL ASSETS $116,958 $121,243 $102,654
======== ======== ========

The accompanying notes are an integral part of these combined balance sheets.

F-3

AMERICAN COMMUNITY PROPERTIES TRUST
COMBINED BALANCE SHEETS
(In thousands)

LIABILITIES AND CAPITAL
-----------------------

June 30, December 31,
-------- -----------------
1997 1996 1995
-------- ---- ----
(unaudited)

LIABILITIES RELATED TO RENTAL PROPERTIES
Recourse debt $ 1,004 $ 1,139 $ 1,334
Non-recourse debt 39,308 39,508 22,650
Accounts payable and accrued liabilities 2,912 2,155 743
-------- -------- --------
43,224 42,802 24,727
-------- -------- --------

LIABILITIES RELATED TO COMMUNITY DEVELOPMENT
Recourse debt 38,346 41,343 52,341
Non-recourse debt 2,258 2,153 2,034
Accounts payable, accrued liabilities
and deferred income 4,947 4,678 3,822
-------- -------- --------
45,551 48,174 58,197
-------- -------- --------

OTHER LIABILITIES
Accounts payable and accrued liabilities 2,450 2,676 3,092
Notes payable and capital leases 191 157 41
Accrued income tax liability - current 3,084 3,976 461
Accrued income tax liability - deferred 3,942 5,041 4,622
-------- -------- --------
9,667 11,850 8,216
-------- -------- --------
TOTAL LIABILITIES 98,442 102,826 91,140
-------- -------- --------

CAPITAL 18,516 18,417 11,514
-------- -------- --------

TOTAL LIABILITIES AND CAPITAL $116,958 $121,243 $102,654
======== ======== ========

The accompanying notes are an integral part of these combined balance sheets.

F-4

AMERICAN COMMUNITY PROPERTIES TRUST
COMBINED STATEMENTS OF CASH FLOWS
(In thousands)

Six Months Ended
June 30, Year Ended December 31,
---------------------------------------------------
1997 1996 1996 1995 1994
-------- --------- --------- --------- --------
(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,790 $ 11,206 $ 12,891 $ 3,983 $ 4,349
Adjustments to reconcile net income
to net cash provided by
(used by) operating activities:
Extraordinary item -- -- 932 -- --
Depreciation and amortization 941 576 1,726 841 843
Provision for deferred income taxes (1,099) (41) 419 646 1,339
Equity in earnings from unconsolidated
partnerships and developer fees (697) (15,815) (16,718) (2,693) (5,038)
Distributions from
unconsolidated partnerships 4,967 14,845 15,666 1,216 7,076
Cost of sales-community development 3,459 6,624 9,378 7,801 12,934
Development and construction
expenditures (3,217) (5,907) (10,658) (15,066) (7,533)
Equity in loss from homebuilding
joint venture 48 19 75 -- --
Write-off of deferred project cost 6 -- 321 -- --
Changes in notes and accounts
receivable (471) (2,982) (3,065) (1,738) 660
Changes in accounts payable,
accrued liabilities and deferred
income (92) 6,830 4,997 (358) (209)
------- -------- -------- -------- -------

Net cash provided by (used in)
operating activities 5,635 15,355 15,964 (5,368) 14,421
------- -------- -------- -------- -------

CASH FLOWS FROM INVESTING ACTIVITIES:
Change in assets related to unconsolidated
rental property partnerships (763) 641 (84) 555 (260)
Change in restricted cash 82 558 1,150 3,588 (3,201)
(Additions to) dispositions of rental
operating properties (350) (1,461) (1,275) 658 (404)
(Acquisitions) dispositions of other assets, net (93) 315 (117) (746) 345
Contributions to homebuilding joint venture (225) (84) (100) (250) --
Acquisition of rental property partnership
interests -- -- -- (170) (170)
------- -------- -------- -------- -------

Net cash (used in) provided by
investing activities (1,349) (31) (426) 3,635 (3,690)
------- -------- -------- -------- -------

The accompanying notes are an integral part of these combined statements.

F-5

AMERICAN COMMUNITY PROPERTIES TRUST
COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
(In thousands)

Six Months Ended
June 30, Year Ended December 31,
-------------------------------------------------
1997 1996 1996 1995 1994
------- ------- ------- ------- -----
(unaudited)

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from (payments on) debt
financing (3,193) (10,141) (10,809) 5,040 (8,835)
Cash distributions to Unitholders -- (622) (1,140) -- (1,020)
Cash (distributions to) contributions
from IGC, net (1,691) (3,104) (4,828) (1,174) (2,104)
Exercise of employee and director IGC Unit options -- -- -- 171 531
------ ------- ------- ------ -------

Net cash (used in) provided by
financing activities (4,884) (13,867) (16,777) 4,037 (11,428)
------ ------- ------- ------ -------

NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (598) 1,457 (1,239) 2,304 (697)

CASH AND CASH EQUIVALENTS
BEGINNING OF YEAR 2,143 3,382 3,382 1,078 1,775
------ ------- ------- ------ -------

CASH AND CASH EQUIVALENTS END OF YEAR 1,545 4,839 2,143 3,382 1,078
====== ======= ======= ====== =======

The accompanying notes are an integral part of these combined statements.

F-6

AMERICAN COMMUNITY PROPERTIES TRUST
NOTES TO COMBINED FINANCIAL STATEMENTS

(1) ORGANIZATION AND BASIS OF PRESENTATION

Interstate General Company L.P. ("IGC") was formed as a Delaware limited
partnership in 1986. Directly and through predecessors, IGC has been engaged in
business since 1957. IGC has traded publicly as a master limited partnership
since February 1987 on the American Stock Exchange and Pacific Stock Exchange.
Company Management and the Board of Directors of IGC's Managing General Partner
are presently undertaking steps to restructure IGC as an investment trust during
1997.

IGC is a diversified real estate organization specializing in Community
Development, Investment Apartment Properties, Asset Management Services and
Homebuilding. IGC owns and participates in these operations directly and
through the following subsidiaries: Interstate General Properties, S.E.
("IGP"); St. Charles Associates Limited Partnership ("SCA"); Land Development
Associates, S.E. ("LDA"); and American Family Homes, Inc. ("AFH"). IGC's assets
and operations are concentrated primarily in the metropolitan areas of
Washington, D.C. and San Juan, Puerto Rico. Additionally, its homebuilding
operations are active in Virginia, North Carolina and South Carolina. Through
its wholly owned subsidiary Interstate Waste Technologies, Inc. ("IWT"), IGC is
involved in the pre-development of municipal waste treatment facilities.

American Community Properties Trust ("ACPT"), American Rental Properties
Trust ("American Rental"), American Rental Management Company ("American
Management"), American Land Development U.S., Inc. ("American Land") and
Interstate General Properties Group, S.E. ("IGP Group") are or will be formed to
carry out the restructuring of IGC. IGC expects to transfer its principal
operations to ACPT and distribute to the partners of IGC, including its
Unitholders, all the common shares of ACPT (the "Restructuring").

ACPT is a Maryland investment trust that is expected to be taxed as a
partnership. It is a self-managed holding company that owns all of the
outstanding equity interests in American Rental, American Management, American
Land, and IGP Group.

American Rental.
- ---------------

IGC expects to transfer to American Rental its partnership interests in
United States investment properties and its land in the United States presently
intended for development as apartment properties. The partnership interests in
13 investment apartment properties ("U.S. Apartment Partnerships") will be held
by American Rental indirectly through a newly formed entity American Housing
Properties L.P. ("American Housing"), a Maryland partnership, in which American
Rental will have a 99% general partner interest and American Management will
have a 1% limited partner interest.

American Management.
- -------------------

F-7

IGC expects to transfer to American Management its United States asset
management services operations. The United States property management services
operations provide management services for the United States apartment
properties and for other rental apartments not owned by IGC.

American Land.
- -------------

IGC expects to transfer to American Land its principal United States
community development assets and operations. These will include the following:

1. IGC's 100% interest in a newly formed entity St. Charles Community LLC
which holds 4,500 acres of land in St. Charles, Maryland. This
constitutes all of the land formerly held by St. Charles Associates, a
partnership in which IGC holds a 99% partnership interest and
Interstate Business Corporation ("IBC") holds a 1% partnership
interest, except for 277 acres of land held for development in
Brandywine, Maryland, an 800 acre tract held for development in
Pomfret, Maryland, 90 acres and 27 acres, respectively, in the
communities of Montclair and Westbury and the Wetlands Properties.

2. IGC's 41.0346% interest in Maryland Cable Limited Partnership which
holds receivables from the 1988 sale of IGC's cable television assets.

IGP Group.
- ---------

IGC expects to transfer to IGP Group its 99% limited partnership interest
and 1% general partner interest in Interstate General Properties Limited
Partnership S.E., a Maryland partnership ("IGP"). IGP's assets and operations
will continue to include:

1. an 80% partnership interest in Land Development Associates S.E., a
Puerto Rico special partnership ("LDA"), which holds 312 acres of land
in the planned community of Parque Escorial and 543 acres of land in
Canovanas;

2. a 50% partnership interest in Escorial Builders Associates S.E.
("Escorial Builders"), which is engaged in the construction of
condominiums in the planned community of Parque Escorial;

3. a 1% interest in El Monte Properties S.E., a Puerto Rico special
partnership which owns El Monte Mall Complex, a 169,000 square foot
office complex in San Juan, Puerto Rico; and

4. general partner interests in 11 Puerto Rico apartment partnerships.

After these asset transfers have been completed, IGC expects to distribute
all of the outstanding common shares of ACPT to the general and limited partners
(including Unitholders) of IGC pro rata in accordance with their percentage
interest in IGC (the "Distribution"). Unitholders in the aggregate will receive
99% of ACPT's common shares.

F-8

BASIS OF PRESENTATION
- ---------------------

The accompanying financial statements of ACPT have been presented on a
combined historical cost basis because of affiliated ownership, common
management and because assets and liabilities of IGC are expected to be
transferred to ACPT, a newly formed entity with no prior operations. IGC's
historical basis in the assets and liabilities of ACPT has been carried over to
the combined financial statements. Certain assets and liabilities of IGC will
not be contributed to ACPT and, therefore, these financial statements are not
intended to represent the financial positions and results of operations of IGC
or any entity included therein. In management's opinion, these financial
statements include the assets, liabilities, revenues and expenses associated
with the portions of IGC intended to be transferred to ACPT. All significant
intercompany balances and transactions have been eliminated in the presentation.
Changes in the capital account represent the net income of ACPT, the exercise of
employee and director options, asset transfers less cash distributions to
Unitholders and net cash (distributions to) contributions from IGC.

The combined financial statements include the accounts of ACPT and its
majority owned partnerships and subsidiaries, after eliminating intercompany
transactions. All of the entities included in the combined financial statements
are hereinafter referred to collectively as the "Company" or "ACPT". As of June
30, 1997, the combined group includes ACPT, American Rental, American
Management, American Land and IGP Group. The following entities are
consolidated with American Rental: Lancaster Apartments Limited Partnership, New
Forest Apartments Partnership, Fox Chase Apartments General Partnership, Palmer
Apartments Associates Limited Partnership, Headen House Associates Limited
Partnership, Wakefield Terrace Associates Limited Partnership and Wakefield
Third Age Associates Limited Partnership.

The combined historical financial statements as of June 30, 1997 and for
the six months ended June 30, 1997 and 1996 are unaudited; however, in the
opinion of management, all adjustments (consisting solely of normal recurring
adjustments) necessary for a fair presentation of the combined financial
statements for these interim periods have been included. The results for the
interim period ended June 30, 1997 are not necessarily indicative of the results
to be obtained for the full year.

F-9

An analysis of the activity in the capital account for the three years
ended December 31, 1996 is as follows (in thousands):

Balance, December 31, 1993 $ 4,470

Net income 4,349
Employee IGC Unit options exercised 531
Assets transferred to Company, net 2,308
Cash distributions to Unitholders (1,020)
Cash (distributions to) contributions from IGC, net (2,104)
-------

Balance, December 31, 1994 $ 8,534

Net income 3,983
Employee and director IGC Unit options exercised 171
Cash (distributions to) contributions from IGC, net (1,174)
-------

Balance, December 31, 1995 $11,514

Net income 12,891
Exchange of assets between Company and Unitholder (20)
Cash distributions to Unitholders (1,140)
Cash (distributions to) contributions from IGC, net (4,828)
-------

Balance, December 31, 1996 $18,417
=======

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies is as follows:

SALES AND PROFIT RECOGNITION AND COST CAPITALIZATION
----------------------------------------------------

Community development land sales are recognized at closing only when
sufficient down payments have been obtained, possession and other attributes of
ownership have been transferred to the buyer, and ACPT has no significant
continuing involvement.

The costs of acquiring and developing land are allocated to these assets
and charged to cost of sales as the related inventories are sold. ACPT's
interest costs related to land assets are allocated to these assets based on
their development stage and relative book value. The portion of interest
allocated to land during the development and construction period is capitalized.
Remaining interest costs are expensed. ACPT carries land and development costs
at the lower of cost or net realizable value.

F-10

SELLING AND MARKETING EXPENSES
------------------------------

Selling and marketing expenses consist primarily of advertising costs,
which include costs of printed materials, signs, displays, and general marketing
costs. These costs are expensed as incurred.

MANAGEMENT FEES
---------------

ACPT records management fees in the period in which services are rendered.
Management fees received from consolidated entities are shown as a reduction in
rental properties operating expense.

DEPRECIATION AND AMORTIZATION
-----------------------------

Buildings are depreciated over 35 to 40 years using the straight-line
method or the double declining balance method with a mid-life switch to
straight-line. Furniture, fixtures and equipment are depreciated over five to
seven years using the straight-line method. Deferred expenses are amortized
over the period of estimated benefit using the straight-line method.

Amortization of intangible assets, pre-operating costs and similar
deferrals totalled $337,000, $276,000 and $228,000 for the years ended December
31, 1996, 1995 and 1994, respectively.

INVESTMENT IN RENTAL PROPERTY PARTNERSHIPS
------------------------------------------

ACPT's investment in rental property partnerships consists of long-term
receivables, nominal capital contributions, working capital loans and ACPT's
share of unconsolidated partnership income and losses. The working capital
loans receive priority distributions from the cash flow generated from the
operations of the partnerships. The long-term receivables represent loans to
the partnerships for payment of construction and development costs in excess of
the project mortgages. Substantially all of the long-term receivables are non-
interest bearing and have been discounted at an effective rate of 14% based on
the projected maturity date which will occur upon the refinancing, sale or other
disposition of the partnerships' properties. The discount, which represents
deferred sponsor and developer fees, is netted in the combined financial
statements against the long-term receivables.

Certain partnerships are accumulating cash from operations in excess of the
maximum distribution amounts permitted by U.S. Department of Housing and Urban
Development ("HUD") and other regulatory authorities. This cash, accumulated in
restricted cash accounts, will be available to pay the long-term receivables due
to ACPT and to make cash distributions to ACPT and the limited partners when the
partnerships' projects are refinanced or sold.

CASH AND CASH EQUIVALENTS
-------------------------

Cash and cash equivalents include cash on hand, unrestricted deposits with
financial institutions and short-term investments with original maturities of
three months or less.

F-11

INCOME TAXES
------------

ACPT does not expect to be subject to U.S. income taxes under current law.
Its Unitholders are expected to be taxed directly on their share of ACPT's
income. Subsequent to the completion of the Distribution, American Land and
American Management are expected to be subject to tax at the applicable
corporate rates. American Rental, which expects to qualify as a real estate
investment trust, does not expect to be subject to tax under current law.
Furthermore, IGP is expected to be subject to Puerto Rico income tax on its
Puerto Rico source income.

The historical combined financial statements of ACPT have been presented
without effect for income taxes of American Land, American Management and
American Rental because IGC is not currently subject to U.S. income tax on its
U.S. source income.

USE OF ESTIMATES
----------------

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

IMPAIRMENT OF LONG LIVED ASSETS
-------------------------------

ACPT adopted SFAS No. 121, "Accounting for the Impairment of Long Lived
Assets and for Long Lived Assets to be Disposed of" which requires impairment
losses to be recorded on long lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amount. SFAS No. 121 also
addresses the accounting for long-lived assets that are expected to be disposed
of. The adoption of SFAS No. 121 had no effect on the financial results of
ACPT.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
----------------------------------------------

In February 1997, the Financial Accounting Standards Board issued SFAS No.
128 "Earnings Per Share", which is effective for fiscal years ending after
December 15, 1997, including interim periods. Earlier adoption is not
permitted. However, an entity is permitted to disclose pro forma earnings per
share amounts computed under SFAS No. 128 in the notes to the financial
statements in periods prior to adoption. The statement requires restatement of
all prior-period earnings per share data presented after the effective date.
ACPT plans to adopt SFAS No. 128 in December 1997 and the impact is not expected
to be significant.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130
"Reporting Comprehensive Income", which is effective for fiscal years beginning
after December 15, 1997. The statement establishes standards for reporting and
display of comprehensive income and its components. ACPT plans to adopt SFAS
No. 130 in 1998 and the impact is not expected to be significant.

F-12

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131
"Disclosures about Segments of an Enterprise and Related Information", which is
effective for fiscal years beginning after December 15, 1997. ACPT plans to
adopt SFAS No. 131 in 1998 and the impact is not expected to be significant.

(3) FINANCING AND CASH MANAGEMENT MATTERS

The Company has historically met its liquidity requirements principally
from cash flow generated from home and land sales, property management fees,
distributions from residential rental partnerships and from bank financing
providing funds for development and working capital.

Over the past several years, cash flows have been constrained because of
the terms of its existing debt agreements and the reluctance of new lending
opportunities as a result of the Wetlands litigation (see Note 5). As a result,
substantially all of the cash generated has been used to pay debt service
requirements with existing lenders. This resulted in limited opportunities for
new construction and development. The recently closed Banc One financing
provided funding to commence construction in Fairway Village, the third village
in St. Charles, and will allow ACPT to retain a greater portion of its U.S. land
sales proceeds. ACPT currently has other development projects in various stages
of completion. Substantially all of the projects under construction have
sufficient development loans in place to complete the construction.

ACPT's principal demand for liquidity are expected to be the continued
funding of its current debt service and operating requirements. After the
Distribution, management expects to obtain additional funding which can be used
to fund new community development projects. There is no assurance that
sufficient funding will be obtained to meet its future debt service or other
operating cash flow needs.

F-13

(4) INVESTMENT IN UNCONSOLIDATED PARTNERSHIPS

HOUSING PARTNERSHIPS
--------------------

The following information summarizes financial data and principal
activities of unconsolidated housing partnerships which ACPT accounts for under
the equity method. The information is presented to show the effect of the sale
of four apartment projects in 1996 and the elimination of four apartment
projects that were initially combined on April 1, 1996 and are currently
included in ACPT's combined financial statements (in thousands).

Partnership Status
------------------------------------------------------

Activity Prior to Activity
Comparable Consolidation Prior to
Partnership of Four Sale of Four
Results Partnerships Apartments Total
------------- ----------------- ------------- -------

SUMMARY FINANCIAL POSITION:
Total Assets
December 31, 1996 113,514 -- -- 113,514
December 31, 1995 118,065 8,368 11,886 138,319
Total Non-Recourse Debt
December 31, 1996 109,593 -- -- 109,593
December 31, 1995 110,927 16,764 14,631 142,322
Total Other Liabilities
December 31, 1996 9,751 -- -- 9,751
December 31, 1995 8,561 1,290 2,814 12,665
Total Equity
December 31, 1996 (5,800) -- -- (5,800)
December 31, 1995 (7,325) (9,686) (5,559) (22,570)
Company's Investment
December 31, 1996 11,973 -- -- 11,973
December 31, 1995 10,776 111 454 11,341

SUMMARY OF OPERATIONS:
Total Revenue
Year Ended December 31, 1996 28,751 1,018 1,103 30,872
Year Ended December 31, 1995 28,400 3,988 4,470 36,858
Year Ended December 31, 1994 28,872 4,029 4,264 37,165
Net Income
Year Ended December 31, 1996 1,454 135 109 1,698
Year Ended December 31, 1995 1,662 539 299 2,500
Year Ended December 31, 1994 1,994 727 72 2,793
Company's recognition of equity in
earnings and developer fees
Year Ended December 31, 1996 1,936 145 -- 2,081
Year Ended December 31, 1995 2,178 507 8 2,693
Year Ended December 31, 1994 4,721 318 (1) 5,038

F-14

Partnership Status
------------------------------------------------------
Activity
Prior to Activity
Comparable Consolidation Prior to
Partnership of Four Sale of Four
Results Partnerships Apartments Total
------------- -------------- -------------- ------

SUMMARY OF OPERATING CASH FLOWS:
Cash flows from operating activities
Year Ended December 31, 1996 6,751 220 387 7,358
Year Ended December 31, 1995 6,646 1,114 853 8,613
Year Ended December 31, 1994 5,476 1,294 645 7,415
Company's share of cash flows
from operating activities
Year Ended December 31, 1996 2,564 134 170 2,868
Year Ended December 31, 1995 2,632 712 387 3,731
Year Ended December 31, 1994 2,159 750 287 3,196
Company's share of cash distributions
from operations and/or refinancings
Year Ended December 31, 1996 347 154 -- 501
Year Ended December 31, 1995 736 480 -- 1,216
Year Ended December 31, 1994 6,753 323 -- 7,076

SUMMARY OF 1996 SALES TRANSACTION:
Gain on Sale $ -- $ -- $39,934 $ 39,934
Company's Equity and Earnings Recognition
Six Months Ended June 30, 1996 -- -- 14,538 14,538
Year Ended December 31, 1996 -- -- 14,637 14,637
Total Distribution of Sales Proceeds -- -- 36,235 36,235
Company's Share of Sales Proceeds
Distribution -- -- 15,165 15,165

COMPARABLE PARTNERSHIP RESULTS: The unconsolidated rental properties
partnerships as of December 31, 1996 include 17 partnerships owning 4,159 rental
units in 20 apartment complexes. ACPT holds a general partner interest in these
partnerships and generally shares in zero to 5% of profits, losses and cash flow
from operations until such time as the limited partners have received cash
distributions, equal to their capital contributions. Thereafter, ACPT generally
shares in 50% of cash distributions from operations.

Lakeside Apartments was placed in service in 1996. The remaining complexes
owned by Alturas Del Senorial Associates Limited Partnership, Bannister
Associates Limited Partnership, Bayamon Gardens Associates Limited Partnership,
Brookside Gardens, Carolina Associates Limited Partnership, Chastleton
Apartments Associates, Coachman's Limited Partnership, Colinas de San Juan
Associates Limited Partnership, Crossland Associates Limited Partnership, Essex
Apartments Associates, Huntington Associates Limited Partnership, Jardines de
Caparra Associates Limited Partnership, Monserrate Associates Limited
Partnership, Monte de Oro Associates Limited Partnership, New Center Associates
Limited Partnership, San Anton Associates Limited Partnership, Turabo Limited
Dividend Partnership and Valle del Sol Limited Partnership were placed in
service prior to 1995.

F-15

ACTIVITY PRIOR TO CONSOLIDATION OF FOUR PARTNERSHIPS: On April 1, 1996,
ACPT acquired a controlling interest in four partnerships owning 596 rental
units, Wakefield Third Age L.P., Wakefield Terrace Associates L.P., Palmer
Apartments L.P. and Headen House Associates L.P. Effective April 1, 1996, the
results of operations and balance sheets of these partnerships are consolidated
in the accompanying financial statements.

ACTIVITY PRIOR TO SALE OF FOUR APARTMENTS: In March 1996, ACPT completed
the sale of four Puerto Rico apartment properties. The four properties, Las
Americas I, Las Americas II, Las Lomas and Monacillos, totaling 918 units were
purchased by non-profit organizations with financing provided by HUD through
capital grants authorized by the Low Income Housing Preservation and Resident
Homeownership Act ("LIHPRHA"). ACPT retained the management contract for these
properties. Prior to the sale, the properties were accounted for using the
equity method of accounting.

HOMEBUILDING JOINT VENTURE
--------------------------

ACPT holds a 50% joint venture interest in Escorial Builders S.E. Escorial
Builders was formed in 1995 to purchase lots from ACPT and construct homes for
resale. During 1996 and 1997, it purchased 98 and 118 lots, respectively. The
profit on these lots are deferred until sold by Escorial Builders to a third
party. ACPT's share of the losses and its investment are included with ACPT's
investment properties in the accompanying combined financial statements. The
table summarizes Escorial Builders' financial information (in thousands):

Total Total Total Company's
Assets Liabilities Equity Investment
-------- ------------ ------ -----------

SUMMARY OF FINANCIAL POSITION:
December 31, 1996 5,586 5,047 539 275
December 31, 1995 613 113 500 250

Total Net Company's Share
Revenues (Loss) of Net (Loss)
-------- ----------- ---------------

SUMMARY OF OPERATIONS:
Year Ended December 31, 1996 -- (151) (75)
Year Ended December 31, 1995 -- -- --

Company's Share
Cash Flows of Cash Flows
From From
Operating Operating
Activities Activities
------------ ---------------

SUMMARY OF OPERATING CASH FLOWS:
Year Ended December 31, 1996 (4,361) (2,181)
Year Ended December 31, 1995 (324) (162)

F-16

(5) DEBT AND EXTRAORDINARY ITEM - EARLY EXTINGUISHMENT OF DEBT

DEBT
----

ACPT's outstanding debt is collateralized primarily by land, land
improvements, housing, receivables, investments in partnerships, and rental
properties. In certain cases, there are cross-collateral and cross-default
provisions pursuant to the debt agreements. The following table summarizes the
indebtedness expected to be transferred to ACPT as of December 31, 1996 and 1995
(in thousands):

Maturity Interest Outstanding
----------------
Dates Rates December 31,
----------------
From/To From/To 1996 1995
--------- --------- ------- -------

Related to community
development:
Recourse debt Demand/ 9.0%/ $41,343 $52,341
10-28-99 10.0%
Non-recourse debt 08-02-09 P+1.5% 2,153 2,034

Related to investment
properties:
Recourse debt Demand 7.35% 1,139 1,334
Non-recourse debt 10-01-19/ 6.85%/ 39,508 22,650
10-01-28 8.500%
General:
Notes payable and capital leases Demand/ 7.4%/ 157 41
------- -------
02-01-01 12.00%
Total debt $84,300 $78,400
======= =======

P = Prime lending interest rate.

ACPT's loans contain various financial and technical provisions.

ACPT's weighted average interest rate during 1996 on its variable rate debt
was 9.73%

As of December 31, 1996, the $41,343,000 of recourse debt related to
community development assets is fully collateralized by substantially all of the
community development assets. Approximately $8,873,000 of this amount is
further secured by investments in apartment rental partnerships.

As of December 31, 1996, recourse investment property debt is secured by a
letter of credit issued to ACPT pursuant to the terms of a sales contract. The
non-recourse investment properties debt is collateralized by apartment projects.
Mortgage notes payable of $7,366,000 have stated interest rates of 7.5% and
7.75%. After deducting interest payments provided by HUD, the effective
interest rate over the life of the loan is 1%.

As of December 31, 1996, a principal payment of $2,000,000 on $8,873,000 of
debt outstanding to NationsBank was past due. This event of default could have
caused cross-defaults on several of ACPT's other debt facilities. In September
1997, ACPT closed a $20 million loan from Banc One and ACPT used a portion of
the proceeds to pay down past due NationsBank debt. As a result, ACPT currently
has no events of default on its outstanding debt instruments.

F-17

The stated maturities (assuming no accelerations) of ACPT's indebtedness at
December 31, 1996 are as follows (in thousands):

1997 $24,387
1998 9,189
1999 1,710
2000 513
2001 577
Thereafter 47,924
-------
$84,300
=======

The interest costs incurred were accounted for as follows (in thousands):

December 31,
-----------------------
1996 1995 1994
------ ------ -------

Expensed $4,433 $4,263 $ 4,337
Capitalized 4,394 3,665 2,830
------ ------ -------
$8,827 $7,928 $ 7,167
====== ====== =======

EXTRAORDINARY ITEM - EARLY EXTINGUISHMENT OF DEBT
-------------------------------------------------

On December 23, 1996, ACPT completed the restructuring of two non-recourse
mortgages that will provide an interest savings of approximately $12,000,000
over the life of the loan. The new mortgage notes payable of $18,700,000 bear
average annual interest rate over the life of the loans at approximately 6.8%
compared to approximately 9.7% for the old loans. Prepayment fees of $932,000
were paid to the prior lender and charged as an extraordinary item in the
accompanying financial statements. The loans are secured by the rental
properties owned by two consolidated partnerships.

(6) OTHER COMMITMENTS AND CONTINGENT LIABILITIES

WETLANDS LITIGATION
-------------------

On February 29, 1996, IGC, SCA and James J. Wilson were convicted on four
felony counts of violations of Section 404 (wetlands) of the U.S. Clean Water
Act relating to discharge without a permit of fill material into wetlands within
the U.S. Army Corps of Engineers' regulatory jurisdiction. The nine civil
violations of the U.S. Clean Water Act filed by the U.S. Attorney were dismissed
without prejudice. On June 17, 1996, IGC and SCA were fined $2,000,000 and
$1,000,000, respectively, placed on probation for five years and ordered to
implement a wetlands restoration and mitigation plan proposed by the government.
IGC provided a bond for these fees secured by its ownership interest in six
partnerships that own rental properties. Mr. Wilson was fined $1,000,000 and
sentenced to 21 months imprisonment and one year of supervised release. Appeals
were filed and Mr. Wilson's sentence was stayed pending appeal by the Court of
Appeals. Oral arguments were heard before the Court of Appeals on March 3,
1997.

The wetlands properties subject to this litigation are being retained by
IGC which will remain responsible for restoration and mitigation costs. IGC has
paid the aggregate $3,000,000 in fines on behalf of itself and SCA. IGC's
management and its legal counsel believe that they will prevail upon appeal and
that the fine will be refunded.

F-18

However, if, in a lawsuit by an unpaid creditor or representative of
creditors of IGC, such as a trustee in bankruptcy, a court were to find that, at
the time IGC made the Distribution, IGC (i) was insolvent, (ii) was rendered
insolvent by reason of the Distribution, (iii) was engaged in a business or
transaction for which IGC's assets constituted unreasonably small capital, or
(iv) intended to incur, or believed that it would incur, obligations beyond its
ability to pay such obligations as they matured, such court could void the
Distribution as a fraudulent transfer or conveyance and require recipients of
Common Shares to return them (or equivalent amounts) to IGC or to a fund for the
benefit of its creditors.

IGC's management believes that, based on financial information currently
available, following the Distribution IGC will be solvent, will have sufficient
capital for carrying on its business and will be able to pay its obligations,
including those related to the wetlands litigation, as they become due. There
can be no assurance, however, that a court would value IGC's assets on the same
basis to determine whether IGC was insolvent at the time of, or after giving
effect to, the Distribution, or that, regardless of the method of valuation, a
court would not determine that IGC was insolvent at such time, that it was
engaged in a business for which its remaining assets constituted unreasonably
small capital or that IGC was generally unable to pay its obligations as they
became due.

In the event that the wetlands conviction is ultimately upheld, IGC, in
addition to the total $3,000,000 in fines imposed on IGC and SCA which have
already been paid by IGC, will be responsible for paying the costs incurred in
implementing the restoration and remediation plan ordered by the district court.
IGC estimates that the costs of the restoration plan will be approximately
$2,000,000 to $3,000,000. The terms of the Banc One credit facility provide
that IGC may borrow up to $2,000,000 solely for use to pay remediation costs
resulting from the wetlands litigation. However, ACPT will assume the repayment
responsibility for the amounts drawn by IGC for remediation purposes.
Management of IGC intends to dispose of the retained land or borrow against its
value to the extent necessary to pay remediation costs.

In the event that the wetlands conviction is ultimately resolved in favor
of IGC, the $3,000,000 in fines already paid by IGC would be fully refunded to
IGC. ACPT would not be entitled to any portion of such refund but would
continue to assume the responsibility of the amounts previously drawn.

In the normal course of business, ACPT is involved in various types of
pending or unasserted claims. In the opinion of management, these will not have
a material impact on the financial condition or future operations of ACPT.

OTHER
-----

As of December 31, 1996, ACPT is guarantor of $6,747,000 of letters of
credit and surety bonds for land development completion.

IGP Group has assigned the receivables and cash proceeds from three
apartment properties to serve as collateral for a letter of credit in the amount
of $4,569,000 issued for the benefit of Chastleton Apartment Associates Limited
Partnership, an entity related to IBC and IGC.

F-19

(7) LEASES

ACPT operates certain property and equipment under leases, some with
purchase options that expire at various dates through 2005. ACPT is also
obligated under several non-cancelable operating leases for office space and
equipment. Future minimum lease payments are as follows (in thousands):

Operating Capitalized
Leases Leases
--------- -----------

1997 $ 417 $ 54
1998 400 55
1999 384 45
2000 368 30
2001 287 12
Thereafter 506 --
------ ----
Total minimum lease payments $2,362 196
Less amount representing interest 39
----
Present value of lease payments 157

Rental expense under noncancelable operating leases was $441,000 in 1996,
$393,000 in 1995 and $393,000 in 1994 and is included in general and
administrative expenses in the accompanying combined statement of income.

(8) RETIREMENT PLAN

ACPT will continue and assume all of IGC's obligations under the retirement
plan currently maintained by IGC (the "Retirement Plan"). Employees are
generally eligible to participate when they complete one year of service. The
Retirement Plan is a defined contribution plan which provides for contributions
by ACPT for the accounts of eligible employees in amounts equal to 4% of base
salaries and wages not in excess of the U.S. Social Security taxable wage base,
and 8% of salaries (limited to $150,000) that exceeded that wage base. Eligible
employees also may make voluntary contributions to their accounts and self-
direct the investment of their account balances in various investment funds that
may be selected under the plan.

Contributions to the Retirement Plan were $317,000, $349,000 and $407,000
for the years ended December 31, 1996, 1995 and 1994, respectively.

(9) RELATED PARTY TRANSACTIONS

Certain officers, trustees and one consultant of ACPT and Interstate
Business Corporation ("IBC"), a general partner of IGC, have ownership interests
in various entities that conduct business with ACPT. Ownership or relationship
with the entities engaged in business with ACPT are reflected below:

F-20

Partner, Officer or
Director Ownership or Relationship
- -------------------------- -------------------------

IBC, general partner of Partner of El Monte Properties S.E. ("El
IGC Monte"), G.L. Limited Partnership ("Rolling
Hills"), Smallwood Village Associates
("SVA"), Smallwood Village Office Building
Associates ("SVOBA"), Village Lake L.P.
("Village Lake"), General Partner of Darby Station
Limited Partnership ("Darby Station");
member of Deer Valley Limited Liability
Company ("Deer Valley")

James J. Wilson ("JJW"), Shareholder of Wilson Securities Corporation,
Chief Executive Officer ("WSC"); Officer and Director of CP Capitol
and Chairman of the Board Corporation ("CP"), owned by WSC, holder of
of IGC's managing general notes receivable that are secured by the
partner existing general partners' interest in
Capital Park

James M. Wilson ("JMW"), Shareholder, Officer and Director of IBC,
Chairman, Chief Advanced Power Systems, Inc. ("APS") and WSC,
Executive Officer and Partner of SVOBA; Officer of CP; manager of
Trustee; Chief Financial Deer Valley
Officer and Director of
IGC's managing general
partner

Thomas B. Wilson ("TBW"), Shareholder, Officer and Director of IBC,
Trustee, Director of IGC's APS and WSC; President and Chief Operating
managing general partner Officer of El Comandante Operating Company
("ECOC"); manager of Deer Valley

Jorge Colon-Nevares, Partner of Twenty First Century Homes S.E.
Trustee, Director of IGC's ("Twenty First Century"); owner of Compri
managing general partner Caribe Development Corp. ("Compri")

Thomas J. Shafer, Trustee Senior partner of Whitman, Requardt and
Associates Engineers ("Whitman, Requardt")

F-21

MANAGEMENT SERVICES
-------------------

The management services provided to the related parties described above are
summarized below (in thousands):

REVENUE FOR THE YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
Decrease
Related Management (Increase) Total
Party Fees in Reserve Recognized
------- ---------- -------------- ----------

1996:
Chastleton (B) IBC $ 74 $ 310 $ 384
Coachman's (B) IBC 26 4 30
Santa Maria WSC 113 -- 113
El Monte IBC 109 -- 109
Rolling Hills (B) IBC 90 (53) 37
Village Lake (B) IBC 24 (16) 8
Capital Park JJW, JMW 193 -- 193
SVA and SVOBA IBC, JMW, TBW 25 -- 25
IBC JMW, TBW 12 -- 12
---- --------- ----------
666 245 911
==== ========= ==========

1995:
Chastleton IBC $ 73 $ (71) $ 2
Coachman's IBC 26 74 100
Santa Maria WSC 67 -- 67
El Monte IBC 100 -- 100
Rolling Hills IBC 83 352 435
Village Lake IBC 25 26 51
Capital Park JJW, JMW 239 -- 239
SVA and SVOBA IBC, JMW, TBW 61 3 64
IBC JMW, TBW 30 -- 30
---- --------- ----------
$704 $ 384 $1,088
==== ========= ==========

1994:
Chastleton IBC $ 75 $ (67) $ 8
Coachman's IBC 24 (24) --
Santa Maria WSC 60 -- 60
El Monte IBC 99 -- 99
Rolling Hills IBC 101 (53) 48
Village Lake IBC 18 68 86
Capital Park JJW, JMW 282 -- 282
SVA and SVOBA IBC, JMW, TBW 65 -- 65
IBC JMW, TBW 28 -- 28
---- --------- ----------
$752 $ (76) $ 676
==== ========= ==========

F-22

OUTSTANDING RECEIVABLE AT (d)
----------------------------------------------------------------------
December 31, 1996 December 31, 1995
------------------------------- ------------------------------------
Receivable Receivable
(a) Reserve Balance (a) Reserve Balance
---------- -------- ------- ---------- ------- -------

Chastleton(B,C) $ 36 $ (36) $ -- $347 $(347) $ --
Coachman's(B,C) 15 (15) -- 19 (19) --
Santa Maria 46 -- 46 -- -- --
El Monte 40 -- 40 28 -- 28
Rolling Hills(B,C) 53 (53) -- 280 -- 280
Village Lake(B,C) 16 (16) -- 49 -- 49
Capital Park 13 -- 13 24 -- 24
SVA -- -- -- 4 -- 4
---------- ----- ---- ---- ------ -------
$219 $(120) $ 99 $751 $(366) $ 385
========== ===== ==== ==== ====== =======

(a) The outstanding receivable balances consist of unpaid management
fees.
(b) On April 1, 1996, IBC transferred its remaining 1.1% limited
partnership interest in four housing partnerships to IGC for its
market value of $69,000 as partial satisfaction of a note receivable.
The balance of this note receivable and other receivables were
purchased by APS for a cash payment of $1,279,000. The collection of
the majority of these receivables was uncertain and $390,000 had been
reserved. This transaction resulted in income recognition of these
reserves during the second quarter of 1996.
(c) During the second quarter of 1997, an affiliate of IBC purchased the
management fees receivable due from Chastleton, Coachman's, Rolling
Hills, and Village Lake for a cash payment of $190,000. The
collection of these receivables had previously been questionable and
they had been fully reserved. This transaction resulted in income
recognition of $190,000.
(d) The aggregate maximum outstanding balance due from these entities for
management fees at any one time during the years 1996 and 1995 was
$754,000 and $789,000, respectively.

OFFICE SPACE RENT
-----------------

IGC rents executive office space and other property from affiliates both in
the United States and Puerto Rico pursuant to leases that expire through 2005.
ACPT's share of this rental expense for the years ended December 31, 1996, 1995
and 1994 was $361,000, $369,000 and $355,000, respectively.

In management's opinion, all leases with affiliated persons are on terms
generally available from unaffiliated persons for comparable property.

LAND SALES
----------

In March 1995, ACPT sold two parcels in the Parque Escorial development in
Puerto Rico to Compri for use in its operations. The terms of sale provided for
a sales price of $3,453,000, of which $693,000 was paid in cash, and the
remainder of which was satisfied by a note in the amount of $2,760,000. The
note is collateralized by the land parcels and commencing January 1, 1997 bears
interest at a rate of 10% per annum. Monthly payments of $27,000 commenced May
1, 1995 with a balloon payment due at maturity on April 1, 1998. During 1996,
two parcels totalling 7,395 square meters were released from the mortgage and
the monthly payments were reduced to $12,000 in exchange for $1,198,000 of
principal payments.

During the years ended December 31, 1996, 1995, and 1994, ACPT sold land to
IGC for use in its U.S. homebuilding operation, which is not a component of
ACPT, totalling $980,000, $875,000 and $1,645,000, respectively.

F-23

Concurrent with the transaction described above, ACPT executed a $3,397,000
contract of sale with Compri for three other land parcels. In April 1996,
Compri made a 20% cash payment and the remainder was satisfied by a note
collateralized by the land parcels. The note bears interest at a rate of 10%
per annum commencing upon the earlier of completion of certain infrastructure
improvements, Compri commences development or sells a portion of the land, and
is payable in thirty-five monthly installments of $27,000, with a balloon
payment due at maturity on April 1, 1999. The outstanding balance of the notes
receivable as of December 31, 1996 and December 31, 1995 were $3,544,000 and
$2,544,000, respectively.

In June 1996, ACPT sold Twenty First Century two parcels of land in the
residential area of Parque Escorial Development for $2,720,000.

In 1996, ACPT sold two parcels of land for an aggregate of approximately
$3,400,000, one each to IBC and Darby Station; the sale to IBC was for cash and
the one to Darby Station resulted in ACPT receiving a 20% cash down payment and
a note for $1,200,000. The transactions were done on an arms-length basis and
resulted in aggregate profits of approximately $2,100,000. The note receivable
was collected during the first six months of 1997.

As of December 31, 1995, a note receivable due from IBC generated from a
prior year land sale had a $335,000 outstanding balance that was paid in full
during 1996.

On June 30, 1997, ACPT sold 374 acres to Deer Valley for $3,000,000 and
recognized profit of $1,341,000. As payment for this parcel, ACPT received a
20% downpayment and assumption of a note.

OTHER
-----

During 1994, ACPT earned interest income of $154,000 from a note receivable
due from SVA.

James J. Wilson, as a general partner of IGP, is entitled to priority
distributions made by each housing partnership in which IGP is the general
partner. If IGP receives a distribution which represents 1% or less of a
partnership's total distribution, Mr. Wilson receives the entire distribution.
If IGP receives a distribution which represents more than 1% of a partnership's
total distribution, Mr. Wilson receives the first 1% of such total. Prior to
the Restructuring, Mr. Wilson will transfer his general partner interest in IGP
to a subsidiary of ACPT.

During 1996, the sale of four properties in Puerto Rico triggered a taxable
gain, a portion of which is passed through to the predecessor of IGC that
contributed those assets. IGC's partnership agreement provides for (1) an
allocation to that predecessor of the income tax payable in Puerto Rico on such
portion of the gain and (2) a reduction from its cash distributions in an amount
equivalent to the Puerto Rico income tax specifically allocated to the
predecessor. In accordance with these provisions, ACPT has recorded a
receivable from IBC of $881,000 and will recover the amount from future
distributions due to IBC. As of December 31, 1996, an outstanding balance of
$881,000 was due from IBC.

In 1994, IGP acquired HDA's minority partner interest. As a result of this
transaction, ACPT obtained a note receivable, including accrued interest, due
from ECOC. At December 31, 1996 and 1995, the outstanding balance due from ECOC
was $277,000 and $260,000, respectively.

Thomas J. Shafer will become a Trustee of ACPT subsequent to his retirement
from Whitman, Requardt, where he is currently a Senior Partner. Whitman,
Requardt provides engineering services to

F-24

ACPT related to its land development activities. The outstanding balance owed
to Whitman, Requardt at December 31, 1996 and 1995, was $324,000 and $218,000,
respectively.

(10) OPTIONS AND APPRECIATION RIGHTS

ACPT expects to adopt a share incentive plan (the "Share Incentive Plan")
and a Trustees share incentive plan (the "Trustee Share Plan") to provide for
Share-based incentive compensation for officers, key employees and Trustees.

Under the Share Incentive Plan, the Compensation Committee of the Board of
Trustees may grant to key employees the following types of share-based incentive
compensation awards ("Awards") (i) options to purchase a specified number of
shares ("Options"), (ii) forfeitable shares that vest upon the occurrence of
certain vesting criteria ("Restricted Shares"), or (iii) Share Appreciation
Rights ("Rights") that entitle the holder to receive upon exercise an amount
payable in cash, shares or other property (or any combination of the foregoing)
equal to the difference between the market value of shares and a base price
fixed on the date of grant. A total of 500,000 shares will be reserved for
issuance under the Share Incentive Plan.

The Share Incentive Plan authorizes the Compensation Committee to determine
the exercise price and manner of payment for Options and the base price for
Rights. The Compensation Committee also is authorized to determine the duration
and vesting criteria for Awards, including whether vesting will be accelerated
upon a change in control of ACPT.

Rights of key employees under Awards are not transferable other than to
immediate family members or by will or the laws of intestate succession.

The Trustee Share Plan authorizes the Board of Trustees, in its discretion,
to grant to eligible Trustees awards of the same types and terms of Awards as
provided under the Share Incentive Plan. Only Trustees who are not employees of
ACPT or any affiliated company are eligible to receive Awards under the Trustee
Share Plan. A total of 100,000 Shares will be reserved for issuance under the
Trustee Share Plan.

Since no Awards have been issued under these Plans, no liability has been
recorded in the accompanying balance sheets.

(11) INCOME TAXES

As a U.S. Company doing business in Puerto Rico, ACPT is subject to Puerto
Rico income tax on its Puerto Rico based income. The taxes reflected below are
a result of that liability.

F-25

ACPT is not subject to U.S. taxes as a wholly owned subsidiary of a limited
partnership. Therefore, the calculation below for the provision for income
taxes does not include the income from U.S. operations which is not subject to
income taxes. It does include the Puerto Rico source income which is subject to
income taxes in Puerto Rico at the statutory rate of 29%. The following table
reconciles the effective rate solely attributable to Puerto Rico source income:

December 31,
----------------------------------------------------
1996 1995 1994
--------------- --------------- ------------------
% of % of % of
Amount Income Amount Income Amount Income
------ ------- ------ ------- -------- --------
(In thousands, except amounts in %)

Provision for income taxes at the
statutory income tax rate $3,424 29% $1,369 29% $3,048 29%
Reduction of provision for partnership
income not taxable to Company -- -- -- -- (74) (1%)
Other items -- -- -- -- 330 3%
------ -- ------ ------ ------ --
$3,424 29% $1,369 29% $3,304 31%
====== == ====== ====== ====== ==

The provision for income taxes consists of the following:

YEARS ENDED DECEMBER 31,
------------------------
1996 1995 1994
------- ------- ------

Currently payable
United States $ -- $ -- $ --
Puerto Rico 3,005 723 1,964
Deferred 419 646 1,340
------ ------ ------
$3,424 $1,369 $3,304
====== ====== ======

The components of deferred taxes payable include the following:

AT DECEMBER 31,
----------------
1996 1995
-------- ------

Tax on amortization of deferred income related to long-term
receivables from partnerships operating in Puerto Rico $ 499 $ 562
Tax on equity in earnings of partnerships operating in Puerto Rico 2,337 2,135
Tax on land development costs capitalized for book purposes but
deducted currently for tax purposes 2,313 1,925
Tax on sale to related party deferred for book purposes
but currently taxable (108) --
------ ------
$5,041 $4,622
====== ======

F-26

Deferred income taxes reflect the "temporary differences" between amounts
of assets and liabilities for financial reporting purposes as determined in
accordance with SFAS No. 109 and such amounts as measured by tax laws.

The reconciliation between net income per books and net taxable income is as
follows:

December 31,
----------------------------
1996 1995 1994
-------- -------- --------
(In thousands)

Net income
per books $12,891 $ 3,983 $ 4,349
Built-in gain allocable
to Predecessors:
Current (3,526) (466) (1,957)
Deferred (415) (364) (296)
Difference in income or
losses from subsidiary
partnerships (826) (20) (1,801)
Capitalization of general
and administrative
expenses under the
Uniform Capitalization
Rules (246) 315 18
Differences in deferred
income (1,431) 349 417
Difference in cost of sales
due to interest related to
the acquisition of land,
deducted for tax purposes 513 505 1,663
Deferred income taxes 419 646 1,340
Losses from restructuring (200) (61) (336)
Other book to tax
reconciling items, none
of which is individually
significant (889) (1,269) (787)
------- ------- -------

Net taxable income
per federal return $ 6,290 $ 3,618 $ 2,610
======= ======= =======

(12) FAIR VALUE OF FINANCIAL INSTRUMENTS

The balance sheet carrying amounts of cash and cash equivalents,
receivables and other current assets approximate fair value due to the short-
term nature of these items. Fair value of long-term debt instruments was
determined by discounting future cash flows using ACPT's current market rates.
As of December 31, 1996, the fair value of long-term debt instruments was
$72,360,000.

F-27

(13) SUPPLEMENTAL CASH FLOW INFORMATION

Interest paid and income taxes paid were as follows for the years ended
December 31 (in thousands):

1996 1995 1994
------ ------ ------

Interest paid $7,004 $5,359 $5,980
Income taxes paid $ 371 $2,227 $ --

Significant non-cash financing and investing activities included the
following:

(a) In 1996, ACPT received partnership interests from a Unitholder valued
at $69,000 in satisfaction of $69,000 of notes receivable.

(b) In 1995, ACPT received land in exchange for land sold with a $134,000
book value.

(d) In 1994, ACPT received partnership interests from a Unitholder valued
at $2,446,000 in satisfaction of $2,446,000 of accounts and notes
receivable. The partnership interests were recorded at the
Unitholder's book value of $626,000.

F-28

INTERSTATE GENERAL COMPANY L.P.

CONSENT OF UNITHOLDERS TO PROPOSED
IGC RESTRUCTURING
----------------------------------

This consent card is being furnished by Interstate General Management
Corporation ("IGMC"), the managing general partner of Interstate General Company
L.P. ("IGC"), to the holders of IGC Units in connection with the solicitation of
consents to (i) the proposed transfer of IGC's principal real estate operations
and assets to American Community Properties Trust ("ACPT"), (ii) the pro rata
distribution of all of the Common Shares of ACPT to the partners of IGC
(including the IGC Unitholders), and (iii) if necessary, the liquidation of IGC,
(collectively the "Restructuring"), all as set forth more fully in the
accompanying Information Statement/Prospectus dated ______. No meeting of IGC
Unitholders will be held in connection with the Restructuring, thus IGC
Unitholders may vote on the Restructuring only by completing this consent card.
----

Please complete, sign, and date this consent card and return it
promptly to the Secretary of IGMC at 222 Smallwood Village Center, St. Charles,
Maryland 20602, but no later than ________. If this consent card is returned
without voting instructions, the holder of IGC Units represented by this consent
card will be considered to have consented to the Restructuring. Any consent
card completed and returned may be revoked by delivering notice of revocation of
such consent, or a duly executed consent card bearing a later date, to the
Secretary of IGMC prior to ________.

PLEASE MARK THE APPROPRIATE BOX:

[_] APPROVE OF THE PROPOSED RESTRUCTURING.

[_] DO NOT APPROVE OF THE PROPOSED RESTRUCTURING.

________________________________ ___________________________
NAME OF UNITHOLDER NUMBER OF UNITS HELD

________________________________ _________________, 1998
SIGNATURE DATE

____________________________________
TITLE OR AUTHORITY, IF APPLICABLE

NOTE: IF UNITS ARE REGISTERED IN MORE THAN ONE NAME, THE SIGNATURES OF ALL
SUCH PERSONS ARE REQUIRED. A CORPORATION SHOULD SIGN IN ITS FULL
CORPORATE NAME BY A DULY AUTHORIZED OFFICER, GIVING HIS OR HER TITLE.
A PARTNERSHIP SHOULD SIGN IN THE PARTNERSHIP NAME BY AN AUTHORIZED
PERSON. TRUSTEES, GUARDIANS, EXECUTORS AND ADMINISTRATORS SHOULD SIGN
IN THEIR OFFICIAL CAPACITY, GIVING FULL TITLE AS SUCH.

PLEASE COMPLETE, SIGN, AND DATE THIS CONSENT CARD AND RETURN IT
PROMPTLY. CONSENT CARDS RETURNED AFTER ________ WILL NOT BE COUNTED.