BALCOR REALTY INVESTORS-83
P.O. Box 7190
Deerfield, Illinois 60015-7190
April 10, 1996
Dear Investor:
As you know, on March 11, 1996, Metropolitan Acquisition VII, L.L.C.
("Metropolitan") announced an unsolicited offer to purchase up to approximately
30% of the outstanding limited partnership interests ("Units") of Balcor Realty
Investors-83 (the "Partnership") at a price of $225 per Unit. In our letter to
you dated March 22, 1996, we informed you that we were expressing no opinion
and remaining neutral with respect to Metropolitan's offer. While our position
with respect to the offer has not changed, we wanted to provide you with
certain additional information that may be useful to you in evaluating the
offer.
As you may recall, in our March 22 letter, we informed you that an
unaffiliated third party had contacted The Balcor Company to discuss the
potential for a sale of substantially all of the remaining properties of the
Partnership. While these discussions did not lead to a definitive offer for
the sale of all of the Partnership's properties, this third party, Equity
Residential Properties Trust ("Equity"), made a non-binding proposal to the
Partnership on April 8, 1996 to purchase two of the Partnership's seven
remaining properties (we had inadvertently and erroneously advised you in our
March 22 letter that only six properties were still owned by the Partnership;
we apologize for the error). We are in serious negotiations with Equity and
intend to sign a letter of intent with them.
The proposed, aggregate sales prices of the two properties included in the
Equity proposal is $23,849,423. Taking into account closing costs, mortgage
indebtedness, and prorations, assuming that all of the sales of the
Partnership's properties contemplated by the Equity proposal are consummated
and provided that there are no adjustments to the sales prices as contained in
the Equity proposal, we estimate that the net proceeds per Unit available for
distribution will be approximately $104 (see attachment hereto for
computation). Keep in mind that Metropolitan's offer is $225 per Unit and that
the Partnership will continue to own five properties if the sales contemplated
by the Equity proposal are consummated.
You should keep in mind that, as we advised you in our March 22, 1996
letter, the mid-April, 1996 distribution payable to you in the amount of $18.00
per Unit will be deducted from Metropolitan's offering price for your Units if
you elect to tender your Units to Metropolitan.
Also, in the March 22 letter, we advised you that one of the Partnership's
seven remaining assets was under a letter of intent. When we sign a letter of
intent with Equity, of the seven remaining assets three will be under letter of
intent. This illustrates our belief that the market for multifamily housing
properties has become increasingly favorable to sellers of these properties.
Please note that the sale of the properties to Equity is contingent upon
many factors, including the negotiation of mutually acceptable sales contracts.
Therefore, there can be no assurance that any sales to Equity will ultimately
be completed. Even in the event that all of the contemplated sales are
consummated, there can be no assurance that the distribution level described
above will actually be paid to the limited partners.
Please note that pursuant to an amendment dated April 8, 1996,
Metropolitan has extended their offer and cannot purchase any tendered Units
prior to April 12, 1996. If you wish to withdraw any Units tendered to
Metropolitan at any time prior to 5:00 p.m., Eastern Standard Time, on
April 12, 1996, you may do so by complying with the withdrawal procedures set
forth in the Metropolitan offer.
Your General Partner will continue to act in the manner that it believes
to be in the best interests of the Partnership.
Very truly yours,
/s/Thomas E. Meador
Thomas E. Meador
Chairman, Balcor Partners - XIII,
the General Partner
BALCOR REALTY INVESTORS - 83
CALCULATION OF DISTRIBUTABLE PROCEEDS FROM
PROPOSED SALE TO EQUITY RESIDENTIAL
Proposed Mortgage Distributable
Name of Property Purchase Price(1) Debt(2) Proceeds
- ---------------- -------------- ---- --------
Eagle Crest I $9,270,000 ($7,097,000) $2,173,000
Desert Sands Village$14,579,423 (8,945,000) 5,634,423
----------- ----------- ----------
Total $23,849,423 ($16,042,000) $7,807,423
==========
Number of Limited Partnership Units: 75,005
Total Distributable Proceeds per
Limited Partnership Unit ($7,807,423 / 75,005) $104.09
=======
- ---------------------
(1)Equity Residential will pay mortgage assumption fees (if any) and related
closing costs. There are no brokerage commissions. We are assuming that
prorations or other closing costs payable by the Partnership (if any) will come
from Partnership working capital.
(2)Estimated loan balance assuming a June, 1996 closing.