Exhibit (a)(3)





May 31, 2007

TO:           UNIT HOLDERS OF CENTURY PROPERTIES FUND XVI

SUBJECT:      OFFER TO PURCHASE UNITS

Dear Unit Holder:

As described in the enclosed Offer to Purchase and related Letters of
Transmittal (the "Offer") the Purchasers named in the attached Offer
(collectively the "Purchasers") are offering to purchase up to 25,988.4 Units of
limited partnership interest (the "Units") in CENTURY PROPERTIES FUND XVI (the
"Partnership") at a purchase price equal to:

                                  $25 per Unit
                                  ------------

The Offer will provide you with an opportunity to liquidate all, or a portion
of, your investment in CENTURY PROPERTIES FUND XVI without the usual transaction
costs associated with market sales or partnership transfer fees. Reasons you may
wish to sell your Units include:

o        NO DISTRIBUTIONS SINCE 2004! The Partnership has not made any
         distributions since 2004. It has stated that "there can be no assurance
         that the Partnership will generate sufficient funds from operations
         after planned capital expenditures to permit any distributions to its
         partners in 2007 or subsequent periods."

o        UNCERTAINTY OF PARTNERSHIP TERMINATION. Our offer provides you with the
         opportunity to receive a guaranteed amount of money in a specified time
         period. The general partner has given no indication when the
         partnership will be liquidating. The Partnership term extends through
         December 31, 2025! Therefore, investors may not see liquidity for some
         time.

o        ILLIQUIDITY OF UNITS. The relative illiquidity of the Units resulting
         from the absence of a formal trading market makes the Units difficult
         to sell.

o        NO FUTURE IRS FILING REQUIREMENTS. The tax year in which you sell your
         Units will be the final year for which you will be obligated to file a
         K-1 for the Partnership with your tax return. This may represent a
         reduction in costs associated with filing complicated tax returns. Your
         decision to sell may have other favorable or unfavorable tax
         consequences and potential sellers should consult their individual tax
         advisers.

o        ELIMINATION OF RETIREMENT ACCOUNT FEES. If you sell your Units, you may
         avoid incurring fees for having this investment in your IRA or
         retirement account. Because many custodians have transfer restrictions
         against limited partnership units or charge additional fees for holding
         this type of asset, many investors are faced with the task of searching
         for a way to avoid these fees. Once our cash payment is sent directly
         to your retirement account, you are free to consolidate your retirement
         accounts or transfer the funds to a custodian that offers lower fees.


After carefully reading the enclosed Offer, if you elect to tender your Units,
mail (using the enclosed pre-addressed, postage paid envelope) or fax (then
mail) a duly completed and executed copy of the Letter of Transmittal (printed
on pink paper) and change of address forms, and any other documents required by
the Letter of Transmittal, to the Depositary for the Offer at:

                         MacKenzie Patterson Fuller, LP
                               1640 School Street
                            Moraga, California 94556
                            Facsimile: (925) 631-9119

If you have any questions or need assistance, please call the Depositary at
800-854-8357.

This Offer expires (unless extended) July 6, 2007.