EXHIBIT (a)(1)
HCW PENSION REAL ESTATE FUND LIMITED PARTNERSHIP
C/O HCW GENERAL PARTNER, LTD.
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
September 1, 2005
Dear Limited Partner:
As you may be aware by now, MPF DeWaay Fund 2, LLC, MPF Income Fund 22,
LLC, MPF Income Fund 16, LLC, SCM Special Fund, LLC, Sutter Opportunity Fund 3
Tax Exempt, LLC, Sutter Opportunity Fund 3, LLC, MPF-NY 2005, LLC, and Moraga
Gold, LLC (collectively, the "MacKenzie Group"), initiated an unsolicited tender
offer to buy units of limited partnership interest ("Units") in HCW Pension Real
Estate Fund Limited Partnership (the "Partnership") on August 19, 2005.
The Partnership, through its general partner, HCW General Partner,
Ltd., is required by the rules of the Securities and Exchange Commission to make
a recommendation whether you should accept or reject this offer or to state that
the Partnership is remaining neutral with respect to this offer. The general
partner does not express any opinion, and is remaining neutral, with respect to
the MacKenzie Group's offer, because the general partner does not have a
reliable indicator of the fair value of the Units. The Partnership has not
recently conducted an analysis of the value of its Units, but the Partnership
notes that the MacKenzie Group estimates the liquidation value of the
Partnership to be $578.00 per Unit. The Partnership does not have a recent
appraisal of its property, Lewis Park Apartments, with which to conduct a
liquidation value analysis of the Partnership. In addition, the general partner
is of the opinion that secondary market sales information is not a reliable
measure of value in this instance because of the limited number of reported
trades. THEREFORE, THE GENERAL PARTNER IS REMAINING NEUTRAL AND DOES NOT EXPRESS
ANY OPINION WITH RESPECT TO THE MACKENZIE GROUP OFFER.
However, we call your attention to the following considerations:
o The general partner has commenced general discussions regarding
the sale of the property with a potential buyer. If these
discussions move forward, the general partner believes that they
could result in a sale in 2006. However, the general partner
cannot guarantee that the property will be sold in 2006 or at
all.
o The MacKenzie Group's offer to purchase estimates the
liquidation value of the Partnership to be $578.00 per Unit.
However, the MacKenzie Group is only offering $300.00 per Unit.
o The $300.00 per Unit offer price will be reduced by the amount
of any distributions declared or made between August 19, 2005
and September 30, 2005, which may be further extended.
o Any increase in the MacKenzie Group's ownership of Units as a
result of the MacKenzie Group's offer may affect the outcome of
Partnership decisions, in that the increase will concentrate
ownership of Units. Affected decisions may include any decision
in which limited partners unaffiliated with the general partner
are given an opportunity to object.
o AIMCO Properties, L.P. ("AIMCO Properties") and its affiliates,
which collectively hold 5,620 Units, or approximately 35.81% of
the outstanding Units, do not intend to tender any of their
Units in the MacKenzie Group's offer.
o The MacKenzie Group's offer is limited to 3,000 Units. If more
than 3,000 Units are tendered in response to their offer, the
MacKenzie Group will accept the Units on a pro rata basis.
Therefore, an investor who tenders all of its Units might not
fully dispose of its investment in the Partnership.
o The MacKenzie Group's offer to purchase provides limited past
sale price information with which to compare their offer price.
The American Partnership Board has reported high and low sales
prices of $125.00 and $98.55 per Unit, respectively, for the
period from January 2003 through August 2005. The Direct
Investments Spectrum has reported high and low sales prices of
$142.00 and $80.00 per Unit, respectively, for the period from
January 2002 through May 2005. In addition, AIMCO Properties
commenced tender offers in August 2001 at a price per Unit of
$82, in May 2000 at a price per Unit of $478.00, in November
1999 at a price per Unit of $448.00, in May 1999 at a price per
Unit of $475.00, and in September 1998 at a price per Unit of
$475.00.
o On August 1, 2005, AIMCO Properties acquired two Units through
direct purchases at a purchase price of $82.00 per Unit.
Each limited partner should make its own decision as to whether or not
it should tender or refrain from tendering its Units in an offer in light of its
unique circumstances, including (i) its investment objectives, (ii) its
financial circumstances including the tolerance for risk and need for liquidity,
(iii) its views as to the Partnership's prospects and outlook, (iv) its own
analysis and review of all publicly available information about the Partnership,
(v) other financial opportunities available to it, (vi) its own tax position and
tax consequences, and (vii) other factors that the limited partner may deem
relevant to its decision. Under any circumstances, limited partners should be
aware that a sale of their Units in the Partnership will have tax consequences
that could be adverse.
PLEASE CONSULT WITH YOUR TAX ADVISOR ABOUT THE IMPACT OF A SALE ON YOUR
OWN PARTICULAR SITUATION AND THE EFFECT OF ANY NEGATIVE CAPITAL ACCOUNTS.
If you need further information about your options, please contact
Martha Long at AIMCO Properties at (864) 239-1000. You can also contact The
Altman Group, Inc., 1200 Wall Street, 3rd Floor, Lyndhurst, New Jersey 07071,
and its toll free telephone number is (800) 217-9608. The facsimile number of
The Altman Group, Inc. is (201) 460-0050.
Sincerely,
HCW General Partner, Ltd.
General Partner
By: IH, Inc.
Managing General Partner
By: /s/ MARTHA L. LONG
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Martha L. Long, Senior Vice President