SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO/T-A
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
Amendment No. 1
(Name of Subject Company)
1999 Broadway Associates Limited Partnership
A Delaware limited partnership
at $10,000 Net Per Unit
by
Equity Resource Dover Fund Limited Partnership,
a Massachusetts limited partnership
Equity Resource Investments LLC
Eggert Dagbjartsson
Limited Partnership Units
Eggert Dagbjartsson, Executive Vice President
Equity Resource Investments LLC
44 Brattle Street
Cambridge, MA 02138
(617) 876-4800
Calculation of Filing Fee
Transaction Valuation* Amount of Filing Fee
$500,000 $58.85
- ----------------------------------------------------------------- -----------------------------
* For purposes of calculating the filing fee only. This calculation
assumes the purchase of 50 Units at a purchase price of $10,000 per Unit
in the Partnership.
[x] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: $147.12 Filing Party: Equity Resource Dover Fund LP
Form of Registration No.: Schedule TO/T Date Filed: April 20, 2005
AMENDMENT NO. 1
This Amendment No. 1 amends and supplements the Tender Offer Statement
on Schedule TO (the "Schedule TO") by Equity Resource Dover Fund, Limited
Partnership, a Massachusetts limited partnership, Eggert Dagbjartsson, its
general partner and Equity Resource Investments LLC, its manager (collectively
the "Purchaser") to purchase 50 units (the "Units") of limited partnership
interests in 1999 Broadway Associates Limited Partnership, a Delaware limited
partnership (the "Partnership"), at $10,000 for each Unit, net to the seller in
cash, without interest, less the amount of any distributions declared or paid
from any source by the Partnership with respect to the Units after April 20,
2005 (without regard to the record date), upon the terms and subject to the
conditions set forth in the Offer to Purchase (the "Offer to Purchase") and in
the related Agreement of Sale, copies of which are attached hereto as Exhibits
(a)(l) and (a)(3) (which are herein collectively referred to as the "Offer").
The information in the Offer to Purchase, including all schedules and annexes
thereto, is hereby expressly incorporated herein by reference in response to all
the items of this Statement, except as otherwise set forth below.
ITEMS 1, 4 AND 12
Items 1, 4 and 12 of the Schedule TO/T, which incorporate by reference
the information contained in the Offer to Purchase, are hereby amended as
follows:
ITEM 1--SUMMARY TERM SHEET
Question 4 of Summary Term Sheet is amended in its entirety to read as
follows:
"How much are you offering to pay for my securities and what is the form of
payment? Will I have to pay fees or commissions? Dover Fund is offering to
purchase 50 Units ("Units") of limited partnership interests in 1999
Broadway Associates Limited Partnership, a Delaware limited partnership (the
"Partnership"). Dover Fund is offering to pay a purchase price of $10,000
for each Unit, to the seller in cash, without interest, less the amount of
any distributions declared or paid from any source by the Partnership with
respect to the Units after April 20, 2005 (without regard to the record
date), upon the terms and subject to the conditions set forth in this Offer
to Purchase (the "Offer to Purchase") and in the Agreement of Sale, as each
may be supplemented or amended from time to time (which together constitute
the "Offer"). The Purchaser will pay all transfer fees charged by the
general partner of the Partnership. If any distributions are declared or
paid from any source by the Partnership while the Offer is open, the
Purchaser will amend the Offer to disclose the event and to extend the Offer
so that 10 business days remain in the offer prior to the expiration of the
Offer. If you tender your Units in the Offer and you were not entitled to
receive any distribution declared or paid from any source by the Partnership
with respect to your Units after April 20, 2005, the amount paid to you in
the Offer will not be reduced by the amount of any distribution you were not
entitled to receive. Limited partners who hold their units in a brokerage
account or in trust may be required to pay commissions or similar payments
if they tender their Units. Limited partners should consult their advisors
concerning such brokerage fees, commissions or similar expenses associated
with the tender their Units."
Question 7 of Summary Term Sheet is amended in its entirety to read as
follows:
"Can the offer be extended or amended and under what circumstances? Yes, we
may elect to extend the offer in order to extend the period of time during
which the offer is open and/or to amend the offer in any respect (including,
without limitation, by increasing or decreasing the offer price). If the
Offer is amended with less than 10 business days remaining in the offering
period, the Offer will be extended to give limited partners at least 10
business days following the filing of the amendment to consider the amended
offer. If you do not tender your Units during the initial
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offering period, you will not have the opportunity to accept the offer. See
'THE OFFER--Section 5--Extension of Tender Period; Termination; Amendment.""
ITEM 4--TERMS OF THE TRANSACTION
Paragraph 1 of "The Offer" is amended to read as follows:
"Equity Resource Dover Fund, Limited Partnership, a Massachusetts limited
partnership, Eggert Dagbjartsson, its general partner and Equity Resource
Investments LLC, its manager (collectively "Dover Fund" or the "Purchaser"),
hereby offers to purchase 50 Units ("Units") of limited partnership
interests in 1999 Broadway Associates Limited Partnership, a Delaware
limited partnership (the "Partnership"). Dover Fund is offering to pay a
purchase price of $10,000 for each Unit, to the seller in cash, without
interest, less the amount of any distributions declared or paid from any
source by the Partnership with respect to the Units after April 20, 2005
(without regard to the record date), upon the terms and subject to the
conditions set forth in this Offer to Purchase (the "Offer to Purchase") and
in the Agreement of Sale, as each may be supplemented or amended from time
to time (which together constitute the "Offer".) Neither Dover Fund, Equity
Resource Investments LLC, Dover Fund's manager nor Eggert Dagbjartsson,
Dover Fund's general partner is an affiliate of the Partnership or the
general partner of the Partnership. The Units sought to be purchased
pursuant to the Offer represent, to the best knowledge of the Purchaser,
approximately 10.9% of all Units outstanding as of the date of the Offer."
Paragraph 6 of "The Offer-Introduction" is amended to read as follows:
"No Selling Commissions Units sold in the informal market "matching service"
usually require payment of a selling commission of the greater of $200 or
8.75%. If you accept the Offer, you will not pay any selling commission.
Limited partners who hold their units in a brokerage account or in trust
may, however, be required to pay commissions or similar payments if they
tender their Units. Limited partners should consult their advisors
concerning such brokerage fees, commissions or similar expenses associated
with the tender their Units."
Paragraph 9 of "The Offer-Risk Factors" is amended to read as follows:
"The Purchaser has not engaged a depository to hold tendered units until
payment. A depository is an independent agent who holds tendered units until
payment. The Purchaser has not engaged a depository for the Offer and the
transfer of units will not be dependent on a depository's determination that
payment has been made. The primary risk associated with the Purchaser's
decision to not engage a depository is that the Purchaser could assume
ownership of tendered units before all terms of the Offer (including payment
for the Units) are complete since it is the Purchaser and not the
independent Depository who will be responsible for the transfer of Units and
payment to those Limited Partners who tender Units. The Purchaser will not,
however, accept Units tendered under the Offer until the Offer has expired
and all conditions of the Offer have either been satisfied or waived."
"The Offer-Section 1-Terms of the Offer" is amended in its entirety to read
as follows:
"Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for up to 50 Units that are validly tendered
on or prior to the Expiration Date (as defined below). The term "Expiration
Date" means 12:00 midnight, Eastern Time, on May 20, 2005, unless the
Purchaser extends the period of time for which the Offer is open, in which
event the term "Expiration Date" shall mean the latest date on which the
Offer, as so extended by the Purchaser, shall expire.
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The Offer is conditioned on satisfaction of certain conditions. See
"Offer--Section 15--Certain Conditions of the Offer," which sets forth in
full the conditions of the Offer. The Purchaser will not be required to
accept for payment or to pay for any Units tendered, and may amend or
terminate the Offer if the Agreement of Sale is not properly completed and
duly executed.
Purchaser reserves the right (but shall not be obligated) to waive any or
all of these conditions. If any or all of those conditions have not been
satisfied or waived by the Expiration Date, Purchaser reserves the right
(but shall not be obligated) to (i) terminate the Offer and return all
tendered Units to tendering Limited Partners, (ii) waive all of the
unsatisfied conditions and, subject to complying with applicable rules and
regulations of the SEC, purchase all Units validly tendered, (iii) extend
the Offer and, subject to the right of Limited Partners to withdraw Units
until the Expiration Date, retain the Units that have been tendered during
the period or periods for which the Offer is extended or (iv) otherwise
amend the Offer. If any material conditions are waived, the Purchaser will
amend the Offer to disclose its waiver. If the amendment is filed with less
than ten (10) business days remaining in the Offer, the Purchaser will
extend the offer giving limited partners at least ten (10) business days
following the amendment to consider the amended offer."
"The Offer-Section 2-Proration; Acceptance for Payment and Payment for
Units" is amended in its entirety to read as follows:
"If fewer than 50 Units are validly tendered and not properly withdrawn
prior to the Expiration Date, the Purchaser, upon the terms and subject to
the conditions of the Offer, will accept for payment all of those Units so
tendered.
The Purchaser will pay for shares properly tendered promptly after the
expiration of the offer in accordance with Rule 14e-l(c).
If more than 50 Units are validly tendered and not properly withdrawn on or
prior to the Expiration Date, the Purchaser, upon the terms and subject to
the conditions of the Offer, will accept for payment 50 Units so tendered,
on a pro rata basis, with appropriate adjustments to avoid tenders of
fractional Units. As a result, if Units are purchased on a prorated basis,
the total number of Units accepted for payment will be based on the highest
number up to 50 Units under which Units can be accepted without the tender
of fractional Units.
In the event that proration is required, the Purchaser will determine the
precise number of Units to be accepted and will announce the final results
of proration as soon as practicable, but in no event, later than five (5)
business days following the Expiration Date. A letter announcing the final
results of proration will be mailed to all tendering limited partners and a
press release announcing the final results of proration will be released.
Purchaser will not pay for any Units tendered until after the final results
of proration have been determined.
If, prior to the Expiration Date, the Purchaser increases the Offer Price,
the increased Offer Price will be paid for all Units accepted for payment
pursuant to the Offer, whether or not those Units were tendered prior to
such increase."
Paragraph 1 of "The Offer-Section 6-Tax Consequences is amended to read as
follows:
"The following is a summary of the federal income tax consequences of a sale
of Units pursuant to the Offer based on the fact that the Partnership is a
partnership for federal income tax purposes and not a "publicly traded
partnership" as defined in Section 7704 of the Internal Revenue Code of
1986, as amended (the "Code"). "Publicly traded partnerships", as defined in
Section 7704, are partnerships that are traded on an established securities
market or readily tradable on a secondary market. Publicly traded
partnerships are taxed as corporations. "
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"The Offer-Section 7-Purpose and Effects of the Offer" is amended in its
entirety to read as follows:
"The Purchaser is making the Offer for investment purposes with a view
towards making a profit. Its intent is to acquire Units at a discount to the
value that it might ultimately realize from owning Units. No independent
party has been retained by the Purchaser to evaluate or render any opinion
with respect to the fairness of the Offer Price and no representation is
made as to the fairness of the Offer Price. In establishing the Offer Price,
the Purchaser primarily consider two factors: prices previously paid for
Units and the Property's current potential value.
Over the past twelve months, the Purchaser has acquired 5 Units in the
Partnership at a price of $5,000 per Unit. Prior to that, an affiliate of
the Purchaser acquired 23.5 Units through a November 21, 2001 tender offer.
It acquired those Units at a price of $20,000 per Unit. These are the only
trades of Units that the Purchaser is aware of over that period. The change
in price between the 2001 tender offer and the acquisition of Units in the
past twelve months was based on the market weakness and tenant issues
discussed in the Partnership's recent financial statements and in section 10
of the Offer. While many of these issues still exist, recent operating
improvements, including an increase in both rental income and occupancy, led
the Purchaser to reanalyze the Partnership.
In this analysis, the Purchaser attempted to estimate the value of Units.
The Partnership owns an interest in a 42-story, 635,737 (net rentable)
square foot office tower (the "Office Tower") and an eight-story parking
garage (the "Garage") located in downtown Denver, Colorado. The Office Tower
and Garage are collectively known as the "Property". According to the
Partnership's most recent financial statements, the Property has a heavy
concentration of tenants in the technology and telecommunications
industries, both of which have been experiencing severe decline. Notably,
Lucent Technologies, which leases 12% of the Property, has vacated its space
and is marketing it for sublease. Lucent's lease is scheduled to expire
December 2005, at which time the Partnership will be required to re-tenant
the space.
Because of the decline in the Denver real estate market, the Partnership may
be unable to find a new tenant or tenants at rental rates that will generate
cash flow sufficient to meet its debt service obligations, in which case the
Partnership may be required to raise additional capital or sell the
property. This risk makes it difficult to establish a market value for
Units, especially when you consider that opportunities to resell Units and
mitigate any subsequent decline in value (should a decline occur) are
limited given the illiquid nature of limited partnership units (see below).
The method the Purchaser ultimately relied on in establishing the Offer
Price was based on an estimate of the Property's value using the recent sale
of a property located at 1700 Broadway in Denver (the "Comparison
Property"). The Comparison Property is a high-rise office tower located
three blocks from the Property. The Comparison Property was built in 1954
(approximately thirty years prior to the Property), but has undergone an
extensive renovation.
The Comparison Property was sold in June 2004 at a price of $87 per square
foot. The Purchaser multiplied this per square foot sale price by the
635,737 square feet of rentable space in the Office Tower to come up with a
property value of $55,309,119. The Purchaser assigned no additional value to
the Garage since spaces in the Garage are assigned to tenants of the Office
Tower and generate no additional revenue. In establishing the Offer Price,
the Purchaser deducted 3% selling commissions from the $55,309,119 value to
come up with a net property value of $53,649,845. It then added other assets
of $5,506,000 and deducted liabilities of $50,946,000 (taken from the
Partnership's most recent 10-K) to come up with a $8,209,548 net asset value
(NAV) for the Partnership. Limited partners own a 99% economic interest in
the Partnership. There are 460 limited partnership Units. Based on this
ownership interest, the Partnership NAV of $8,209,548 translates into a per
Unit NAV of $17,847.
The Purchaser chose the Comparison Property method in establishing the Offer
Price based on its belief that the risks associated with owning Partnership
Units are related primarily to overall weakness in the Denver office market
(in 2004, the Downtown Denver market experienced negative absorption of
approximately 256,000 square feet of space). Since the Purchaser believes
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that it is market weakness and not weakness specific to the Property that is
causing the risks associated with owning Units, the Purchaser believes that
recent property sales best take the market weakness into account. The
Comparison Property was sold in June 2004. That is the most recent sale of a
high-rise office building in the Denver market that the Purchaser is aware
of. Though previous sales generated higher prices per square foot, the fact
that the sale of the Comparison Property is the most recent sale along with
the fact that the Comparison Property is located in close proximity to the
Property, the Purchaser believes it is appropriate to use the Comparison
Property sale price in estimating the NAV of Units in the Partnership.
Limited partners should remember that this NAV figure is based on
assumptions that if changed, would alter the value of Units. The Purchaser
used the sale price of the Comparison Property in determining the offer
price based solely on its proximity to the Property and the fact that its
sale is the most recent sale that the Purchaser is aware of. Using the same
approach but a different sale price would result in a different net asset
value for Units. Additionally, using a different valuation approach would
also result in a different net asset value for Units. For example, the
Property's 2004 net operating income was $6,018,000 (calculated by deducting
operating expenses of $5,578,000 for income of $11,596,000). Using a direct
capitalization approach, applying a 9% cap rate to this 2004 net operating
income and deducting 3% selling commissions would result in an NAV of
$42,219 per Unit. Applying the same approach to the Property's 2004 net
operating income adjusted to reflect potential lost revenue through lease
terminations in 2005 would result in an NAV of ($977). The Purchaser used a
9% cap rate in these direct capitalization approached based on its own
analysis and understanding of historical cap rate in office markets like the
Denver office market.
In determining its offer price of $10,000 per unit, the Purchaser applied a
43% illiquidity discount to the $17,847 per Unit NAV. Applying an
illiquidity discount is standard for real estate limited partnerships.
According to the Direct Investments Spectrum, a national reporting service
covering limited partnerships, the average annual discounts applied to real
estate limited partnership since 1992 have ranged from 25% to 44%. The
Purchaser chose an illiquidity discount at the top of the average annual
range of discounts primarily because of the risks discussed above. Other
measures of value may be relevant to a Limited Partner, and all Limited
Partners are urged to carefully consider all of the information contained in
the Offer to Purchase and Agreement of Sale and to consult with their own
advisors (tax, financial, or otherwise) in evaluating the terms of the Offer
before deciding whether to tender Units. The Offer is being made as a
speculative investment by the Purchaser based on its belief that there is
inherent underlying value in the assets of the Partnership. The purpose of
the Offer is to allow the Purchaser to benefit to the greatest extent
possible from any one or a combination of the following:
. any cash distributions, whether those distributions are classified as a
return on, or a return of, capital, from the operations in the ordinary
course of the Partnership;
. any distributions of net proceeds from the sale of assets by the
Partnership;
. any distributions of net proceeds from the liquidation of the
Partnership;
. any cash from any redemption of the Units by the Partnership, and
. any proceeds that may be received from any lawsuit brought by the
Limited Partners, which lawsuit relates to the Partnership or its General
Partner (the Purchaser is not aware of any lawsuit at this time and is not
planning that action in the future).
Price Range of Units; Lack of Public Market. At present, privately
negotiated sales and sales through intermediaries (e.g., through the trading
system operated by the American Partnership Board, which publishes sell
offers by holders of Units) are the only means available to a Limited
Partner to liquidate an investment in Units (other than by accepting the
Offer) because the Units
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are not listed or traded on any national securities exchange or quoted on
NASDAQ. The Purchaser and its affiliates have purchased 5 Units in the
Partnership in the past twelve months."
The final paragraph of "The Offer-Section 10- Certain Information Concerning
the Partnership" is amended to read as follows:
"Other Information. The Partnership is subject to the reporting requirements
of the Exchange Act and accordingly is required to file reports and other
information with the SEC relating to its business, financial results and
other matters. These reports and other documents may be inspected at the
SEC's Public Reference Section, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, where copies may be obtained at prescribed rate.
Copies should be available by mail upon payment of the SEC's customary
charges by writing to the SEC's principal offices at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC also maintains a web site that contains
reports, proxy and other information filed electronically with the SEC, the
address of which is http://www.sec.gov. These reports and other documents
are no longer available at the regional offices of the SEC."
ITEM 12. EXHIBITS
(a)(5) Agreement of Sale and Assignment
(a)(6) Cover Letter
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: May 6, 2005 Equity Resource Dover Fund Limited Partnership,
a Massachusetts limited partnership
By: /s/ Eggert Dagbjartsson
------------------------------------
Eggert Dagbjartsson
General Partner
Equity Resource Investments LLC
A Massachusetts limited liability company
By: /s/ Eggert Dagbjartsson
------------------------------------
Eggert Dagbjartsson
Managing Director
Eggert Dagbjartsson
By: /s/ Eggert Dagbjartsson
------------------------------------
Eggert Dagbjartsson
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EXHIBIT INDEX
Sequential
Exhibit No. Description Page Number
- ----------- ----------------------------------------- --------------------
(a)(1) - Offer to Purchase, dated April 20, 2005*
(a)(2) - Transmittal letter, dated April 20, 2005*
(a)(3) - Agreement of Sale and Assignment*
(a)(4) Summary Advertisement*
(a)(5) Agreement of Sale and Assignment
(a)(6) Cover Letter Dated May 6, 2005
(b) - Not applicable.
(c) - Not applicable.
(d) - Not applicable.
(e) - Not applicable.
(f) - Not applicable.
(g) Not applicable
(h) Not applicable.
* Previously Filed
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