IMPORTANT

Offer to Purchase for Cash
Up to 11,500 Units of Limited Partnership Interest
in

VMS INVESTORS FIRST-STAGED EQUITY X.X. XX,
a Delaware limited partnership
for
$55 Net Per Unit
by

XXXXXX RIVER PROPERTIES, L.L.C.
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THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK TIME, ON OCTOBER 27,
1998, UNLESS THE OFFER IS EXTENDED.
-------------------------------------------------------------------------------

IMPORTANT

Xxxxxx River Properties, L.L.C., a Delaware limited liability company
(the "Purchaser"), is offering to purchase up to 11,500 of the outstanding
units of limited partnership interest ("Units") in VMS Investors First-Staged
Equity X.X. XX, a Delaware limited partnership (the "Partnership"), at a
purchase price of $55 per Unit (the "Purchase Price"), net to the seller in
cash, without interest, upon the terms and subject to the conditions set forth
in this Offer to Purchase and in the related Assignment of Partnership Interest
(which, together with any supplements or amendments, collectively constitute
the "Offer"). The Purchase Price is subject to adjustment under certain
circumstances, as described herein. Holders of Units (each, a "Limited
Partner") who tender their Units in response to the Offer will not be obligated
to pay any commissions or partnership transfer fees. The Purchaser is an
affiliate of MAERIL, Inc., which is the general partner of the Partnership (the
"General Partner").

Limited Partners are urged to consider the following factors:

o The Purchaser and the General Partner are both affiliates of
and controlled by Insignia Properties Trust ("IPT"), which is
controlled by Insignia Financial Group, Inc. ("Insignia").

o The net asset value per Unit most recently estimated by an
affiliate of the General Partner was $86 as of June 30, 1998,
and the net liquidation value per Unit (the "Estimated
Liquidation Value") estimated by the Purchaser (which is an
affiliate of the General Partner) in connection with the
Offer is $90.09. The outstanding mortgage debt encumbering
the Partnership's properties ($9,011,000 as of June 30, 1998)
significantly exceeds both the estimate prepared by the
General Partner's affiliate and the Purchaser's estimate of
the aggregate value of the Partnership's properties as of
June 30, 1998, and the General Partner expects that the
properties will be foreclosed upon and the Partnership will
be liquidated within six months of the date of the Offer.
Accordingly, both the net asset value estimate prepared by
the General Partner's affiliate and the Estimated Liquidation
Value prepared by the Purchaser value the Partnership's
properties at zero and thus reflect the estimated value of
the Partnership's net current assets (which consist
principally of cash) as of June 30, 1998. Nonetheless, the
Purchaser does not believe that the Estimated Liquidation
Value represents a fair estimate of the market value of a
Unit, primarily due to the fact that such estimate does not
take into account legal and other expenses that would be
incurred in connection with a liquidation of the Partnership.
See Section 13. Accordingly, the Purchaser does not believe
that the Estimated Liquidation Value should be viewed as
representative of the amount a Limited Partner can
realistically expect to obtain on a sale of a Unit or as a
result of a liquidation of the Partnership in the near term.

o The Purchaser will have the right to vote all Units acquired
pursuant to the Offer. Accordingly, if the Purchaser (which
is an affiliate of the General Partner) is successful in
acquiring a significant number of Units, it will be able to
significantly influence all voting decisions with respect to
the Partnership, including decisions regarding liquidation,
amendments to the Limited Partnership Agreement, removal and
replacement of the General Partner and mergers,
consolidations and other extraordinary transactions.

o The Purchaser (which is an affiliate of the General Partner)
is making the Offer with a view to making a profit.
Accordingly, there is a conflict between the desire of the
Purchaser (which is an affiliate of the General Partner) to
purchase Units at a low price and the desire of the Limited
Partners to sell their Units at a high price.

THE OFFER IS NOT CONDITIONED ON FINANCING OR UPON ANY MINIMUM
AGGREGATE NUMBER OF UNITS BEING TENDERED.

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

Any Limited Partner desiring to tender Units should complete and sign
the Assignment of Partnership Interest in accordance with the Instructions to
the Assignment of Partnership Interest and mail or deliver the signed
Assignment of Partnership Interest to the Depositary. A Limited Partner may
tender any or all of the Units owned by that Limited Partner; provided,
however, that because of restrictions in the Partnership's Limited Partnership
Agreement, (i) a partial tender of Units must be for a minimum of fifteen Units
and (ii) in order for a partial tender to be valid, after a sale of Units
pursuant to the Offer, the tendering Limited Partner must continue to hold a
minimum of fifteen Units. Tenders of fractional Units will not be permitted,
except by a Limited Partner who is tendering all of the Units owned by that
Limited Partner.

Questions and requests for assistance or for additional copies of this
Offer to Purchase and the Assignment of Partnership Interest may be directed to
the Information Agent at the address and telephone numbers set forth below and
on the back cover of this Offer to Purchase. No soliciting dealer fees or other
payments to brokers for tenders are being paid by the Purchaser (which is an
affiliate of the General Partner).

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

For More Information or for Further Assistance Please Call:

Beacon Hill Partners, Inc.

(000) 000-0000

September 29, 1998

TABLE OF CONTENTS

PAGE

INTRODUCTION.................................................................................................... 1
The Purchaser; Affiliation with the General Partner......................................................... 1
Some Factors to Be Considered by Limited Partners........................................................... 1
Reasons for and Effects of the Offer........................................................................ 3
Certain Tax Considerations.................................................................................. 4
Originally Anticipated Term of the Partnership; General Policy Regarding Sales
and Refinancings of Partnership Properties; Alternatives........................................... 4
Conditions.................................................................................................. 4
Distributions............................................................................................... 4
Outstanding Units........................................................................................... 4

THE OFFER....................................................................................................... 5
Section 1. Terms of the Offer; Expiration Date; Proration.................................................. 5
Section 2. Acceptance for Payment and Payment for Units.................................................... 6
Section 3. Procedure for Tendering Units................................................................... 6
Valid Tender............................................................................................ 6
Signature Requirements.................................................................................. 7
Delivery of Assignment of Partnership Interest.......................................................... 7
Appointment as Proxy; Power of Attorney................................................................. 7
Assignment of Interest in Future Distributions.......................................................... 8
Determination of Validity; Rejection of Units; Waiver of Defects; No Obligation
to Give Notice of Defects.......................................................................... 8
Backup Federal Income Tax Withholding................................................................... 8
FIRPTA Withholding...................................................................................... 8
Binding Obligation...................................................................................... 8
Section 4. Withdrawal Rights............................................................................... 8
Section 5. Extension of Tender Period; Termination; Amendment.............................................. 9
Section 6. Certain Federal Income Tax Matters.............................................................. 9
General................................................................................................. 9
Gain or Loss Generally.................................................................................. 10
Unrealized Receivables and Certain Inventory............................................................ 10
Passive Activity Loss Limitation........................................................................ 11
Partnership Termination................................................................................. 11
Backup Withholding and FIRPTA Withholding............................................................... 11
Section 7. Effects of the Offer............................................................................ 12
Limitations on Resales.................................................................................. 12
Effect on Trading Market; Registration Under Section 12(g) of the Exchange Act.......................... 12
Control of Limited Partner Voting Decisions by Purchaser; Effect of Relationship
with General Partner............................................................................... 12
Section 8. Future Plans of Insignia, IPT and the Purchaser................................................. 13
Section 9. Certain Information Concerning the Partnership.................................................. 13
General................................................................................................. 14
Originally Anticipated Term of Partnership; Alternatives................................................ 14
General Policy Regarding Sales and Refinancings of Partnership Properties............................... 14
Selected Financial and Property-Related Data............................................................ 14
Cash Distributions History.............................................................................. 17
Operating Budgets of the Partnership.................................................................... 17
Section 10. Conflicts of Interest and Transactions with Affiliates......................................... 18
Conflicts of Interest with Respect to the Offer......................................................... 18
Voting by the Purchaser................................................................................. 18

Financing Arrangements.................................................................................. 18
Transactions with Affiliates............................................................................ 19
Section 11. Certain Information Concerning the Purchaser, IPLP, IPT and Insignia........................... 19
The Purchaser........................................................................................... 19
IPT and IPLP............................................................................................ 19
Insignia................................................................................................ 20
Section 12. Source of Funds................................................................................ 22
Section 13. Background of the Offer........................................................................ 23
Affiliation With the General Partner.................................................................... 23
Determination of Purchase Price......................................................................... 23
Section 14. Conditions of the Offer........................................................................ 27
Section 15. Certain Legal Matters.......................................................................... 28
General................................................................................................. 28
Antitrust............................................................................................... 28
Margin Requirements..................................................................................... 28
Section 16. Fees and Expenses.............................................................................. 28
Section 17. Miscellaneous.................................................................................. 28

SCHEDULE I - Information Regarding the Managers of the Purchaser......................................S-1

SCHEDULE II - Information Regarding the Trustees and Executive Officers of IPT.........................S-2

SCHEDULE III - Information Regarding the Directors and Executive Officers of Insignia...................S-4

SCHEDULE IV - IPT Partnerships.........................................................................S-7

TO THE LIMITED PARTNERS OF
VMS INVESTORS FIRST-STAGED EQUITY X.X. XX

INTRODUCTION

Xxxxxx River Properties, L.L.C. (the "Purchaser"), which is a Delaware
limited liability company and an affiliate of the General Partner (as defined
below), hereby offers to purchase up to 11,500 of the outstanding units of
limited partnership interest ("Units"), representing approximately 46% of the
Units outstanding, in VMS Investors First-Staged Equity X.X. XX, a Delaware
limited partnership (the "Partnership"), at a purchase price of $55 per Unit
(the "Purchase Price"), net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Assignment of Partnership Interest (which, together with any
supplements or amendments, collectively constitute the "Offer"). The Offer is
not conditioned on any aggregate minimum number of Units being tendered. A
Limited Partner may tender any or all of the Units owned by that Limited
Partner; provided, however, that because of restrictions in the Partnership's
Limited Partnership Agreement (the "Limited Partnership Agreement"), (i) a
partial tender of Units must be for a minimum of fifteen Units and (ii) in
order for a partial tender to be valid, after a sale of Units pursuant to the
Offer, the tendering Limited Partner must continue to hold a minimum of fifteen
Units. Accordingly, any Limited Partner that owns fifteen or fewer Units must
tender all or none of its Units. Tenders of fractional Units will not be
permitted, except by a Limited Partner who is tendering all of the Units owned
by that Limited Partner. The Purchaser (which is an affiliate of the General
Partner) will pay all charges and expenses of Beacon Hill Partners, Inc., who
will serve as the Purchaser's information agent for the Offer (the "Information
Agent"), and Xxxxxx Trust Company of New York, who will act as depositary for
the Offer (the "Depositary").

The Purchaser; Affiliation with the General Partner. MAERIL, Inc.,
which is the general partner of the Partnership (the "General Partner"), is a
direct, wholly-owned subsidiary of Insignia Properties Trust, a Maryland real
estate investment trust ("IPT"). The Purchaser is a recently formed,
wholly-owned subsidiary of Insignia Properties, L.P., a Delaware limited
partnership ("IPLP"), which is the operating partnership of IPT. IPT is the
sole general partner of IPLP (owning approximately 70% of the total equity
interests in IPLP), and Insignia Financial Group, Inc., a Delaware corporation
("Insignia"), is the sole limited partner of IPLP (owning approximately 30% of
the total equity interests in IPLP). Insignia and its affiliates also own
approximately 57% of the outstanding common shares of IPT. For more than the
past three years, Insignia/ESG, Inc. (formerly known as Insignia Commercial
Group, Inc.) ("I/ESG"), which is an affiliate of IPT and the Purchaser, has
provided property management services to the Partnership, and Insignia
(directly or through affiliates) has performed asset management, partnership
administration and investor relations services for the Partnership. By reason
of these relationships, the General Partner has conflicts of interest in
considering the Offer. The General Partner has indicated in a Statement on
Schedule 14D-9 (the "Schedule 14D-9") filed with the Securities and Exchange
Commission (the "Commission") that it is remaining neutral and making no
recommendation as to whether Limited Partners should tender their Units in
response to the Offer. LIMITED PARTNERS ARE URGED TO READ THIS OFFER TO
PURCHASE AND THE RELATED MATERIALS AND THE SCHEDULE 14D-9 CAREFULLY AND IN
THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS. See Sections 10
and 13.

Some Factors to Be Considered by Limited Partners. In considering the
Offer, Limited Partners may wish to consider the following factors:

Potential Adverse Aspects of the Offer for Limited Partners

o The Purchaser and the General Partner are affiliates of and
controlled by IPT, which is controlled by Insignia. See
Sections 11 and 13. The General Partner has conflicts of
interest in considering the Offer, including (i) as a result
of the fact that a sale or liquidation of the Partnership's
assets would result in a decrease or elimination of the fees
paid to the General Partner and/or its affiliates and (ii)
the fact that as a consequence of the Purchaser's ownership
of Units, the Purchaser (which is an affiliate of the General
Partner) may have incentives to seek to maximize the value of
its ownership of Units, which in turn may result in a
conflict for the General Partner in attempting to reconcile
the interests of the Purchaser (which is an affiliate of the
General Partner) with the interests of the other Limited
Partners. See Section 10.

o The General Partner has advised the Purchaser (which is an
affiliate of the General Partner) that the General Partner
presently expects that unless a workout agreement can be
negotiated, the mortgage lender for the Partnership's
properties will foreclose upon the Partnership's properties
sometime during the fourth quarter of 1998 or the first
quarter of 1999. If such a foreclosure occurs, the General
Partner expects that the Partnership would be liquidated
shortly thereafter. In the event such liquidation occurs, the
Limited Partners are entitled to a distribution of the
Partnership's remaining assets (after payment of outstanding
recourse liabilities) pursuant to the Limited Partnership
Agreement; however, there can be no assurance that such
liquidation will in fact occur or as to the timing of such
liquidation. Limited Partners who tender their Units pursuant
to the Offer would forego any distributions made by the
Partnership on or after the date on which the Purchaser
purchases such Units, including distributions in respect of
any such liquidation. See Sections 3, 9 and 13.

o As with any rational investment decision, the Purchaser
(which is an affiliate of the General Partner) is making the
Offer with a view to making a profit. Accordingly, there is a
conflict between the desire of the Purchaser (which is an
affiliate of the General Partner) to purchase Units at a low
price and the desire of the Limited Partners to sell their
Units at a high price.

o If the Purchaser is successful in acquiring a significant
number of Units pursuant to the Offer, the Purchaser (which
is an affiliate of the General Partner) will have the right
to vote those Units and thereby significantly influence all
voting decisions with respect to the Partnership, including
decisions concerning liquidation, amendments to the Limited
Partnership Agreement, removal and replacement of the General
Partner and mergers, consolidations and other extraordinary
transactions. This means that (i) non-tendering Limited
Partners could be prevented from taking action they desire
but that IPT (which is an affiliate of the General Partner)
opposes and (ii) IPT (which is an affiliate of the General
Partner) may be able to take action desired by IPT but
opposed by the non-tendering Limited Partners.

Potentially Beneficial Aspects of the Offer for Limited Partners

o Although there are some limited resale mechanisms available
to Limited Partners wishing to sell their Units, there is no
formal trading market for Units. At present, Limited Partners
may seek to negotiate private sales or sales through a
trading system such as the American Partnership Board, which
publishes sell offers by Limited Partners in respect of
Units. Accordingly, THE OFFER AFFORDS LIMITED PARTNERS AN
OPPORTUNITY TO DISPOSE OF THEIR UNITS FOR CASH WHICH
OTHERWISE MIGHT NOT BE AVAILABLE TO THEM.

o THE OFFER MAY BE ATTRACTIVE TO LIMITED PARTNERS WHO HAVE AN
IMMEDIATE NEED FOR CASH. The Purchase Price is approximately
56% greater than the highest reported sales price of any Unit
during the past six months (based on published information
and information provided by the General Partner).
Furthermore, reported secondary market sales prices do not
take into account commissions and transfer fees typically
payable by a Limited Partner in connection with a secondary
market sale. Therefore, the actual proceeds received by a
Limited Partner who sells Units in the secondary market are
typically significantly less than the reported sales prices.

o LIMITED PARTNERS WHO SELL UNITS PURSUANT TO THE OFFER WILL
NOT BE CHARGED ANY SALES COMMISSIONS (WHICH GENERALLY RANGE
FROM 3% TO 10% OF THE SALES PRICE) OR PARTNERSHIP TRANSFER
FEES (WHICH ARE TYPICALLY $100 PER TRANSFER). The Purchaser
will pay all transfer fees imposed by the Partnership in
connection with sales of Units pursuant to the Offer.

o Real estate markets in the United States generally have
recovered and experienced an upward trend since the end of
the last recession. That recovery and upward trend might
continue. On the other hand, real estate markets also may be
adversely affected by a variety of factors, including
possible fluctuations in interest rates, economic slowdowns
and overbuilding. Accordingly, ownership of Units continues
to be a speculative investment. THE OFFER MAY PROVIDE LIMITED
PARTNERS WITH THE OPPORTUNITY TO LIQUIDATE THEIR INTERESTS IN
THE PARTNERSHIP AND REPLACE THEM WITH INVESTMENTS THAT ARE
LESS SPECULATIVE.

o The Offer may be attractive to Limited Partners who wish to
avoid in the future the expenses, delays and complications in
filing personal income tax returns which may be caused by
ownership of Units. In addition, A LIMITED PARTNER WHO SELLS
100% OF ITS UNITS PURSUANT TO THE OFFER WILL NO LONGER BE
SUBJECT TO THE PASSIVE ACTIVITY LOSS LIMITATION WITH RESPECT
TO "SUSPENDED" LOSSES ATTRIBUTABLE TO THOSE UNITS AND,
THEREFORE, WILL BE ABLE TO UTILIZE FULLY ANY SUCH LOSSES.

o The Offer may be attractive to those Limited Partners who
have become disenchanted with real estate investments
generally, and in particular with the perceived illiquidity
of investments made through limited partnerships, because it
may afford an immediate opportunity for those Limited
Partners to liquidate their investments in the Partnership.
On the other hand, Limited Partners who tender their Units
will be giving up the opportunity to participate in any
potential future benefits represented by the ownership of
those Units, including, for example, the right to participate
in any future distributions of cash or property, whether from
operations, the proceeds of a sale or refinancing of one or
more of the Partnership's properties or in connection with
any future liquidation of the Partnership. Instead, any such
distributions of cash or property with respect to Units
tendered in the Offer and purchased by the Purchaser will be
paid to the Purchaser.

The Purchaser (which is an affiliate of the General Partner) makes no
recommendation to any Limited Partner as to whether to tender or refrain from
tendering Units and has been advised by the General Partner that the General
Partner also expects to make no recommendation. Each Limited Partner must make
its own decision, based on the Limited Partner's particular circumstances, as
to whether to tender Units and, if so, how many Units to tender. Limited
Partners should consult with their respective advisors regarding the financial,
tax, legal and other implications of accepting the Offer. LIMITED PARTNERS ARE
URGED TO READ THIS OFFER TO PURCHASE AND THE RELATED MATERIALS CAREFULLY AND IN
THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS.

Reasons for and Effects of the Offer. The Purchaser's purpose in
making the Offer is to increase IPT's equity interest in the Partnership,
primarily for investment purposes and with a view to making a profit. Although
the number of Units sought in the Offer will not give the Purchaser (which is
an affiliate of the General Partner) absolute control over the Partnership, if
the Purchaser is successful in acquiring all or a substantial portion of the
Units it is tendering for, it will be in a position to exercise significant
influence over the outcome of any vote by Limited Partners. See Sections 8, 10
and 13.

Certain Tax Considerations. A sale by a Limited Partner pursuant to
the Offer will result in taxable gain (or loss) equal to the excess (deficit)
of the amount realized by the Limited Partner for the Units sold over (under)
such Limited Partner's adjusted tax basis in those Units, which may be taxable
as ordinary income or loss, capital gain or loss or gain from real estate
depreciation recapture. If a Limited Partner has suspended "passive losses"
from the Partnership or other passive activity investments, such Limited
Partner generally may deduct these losses up to the amount of any gain from the
sale. A sale pursuant to the Offer of all of a Limited Partner's Units will
terminate his or her investment in the Partnership and, commencing with the
year following the year of sale, the Limited Partner will no longer receive
Partnership tax information or have to report the complicated tax information
currently required of Limited Partners. See Section 6.

Originally Anticipated Term of the Partnership; General Policy
Regarding Sales and Refinancings of Partnership Properties; Alternatives.
According to the Partnership's Prospectus dated May 15, 1986, the then general
partner (predecessor to the current General Partner) anticipated that the
Partnership would sell and/or refinance its properties five to eight years
after their acquisition, depending on the then current real estate and money
markets, economic climate and income tax consequences to the Limited Partners.
In general, the General Partner regularly evaluates the Partnership's
properties by considering various factors, such as the Partnership's financial
position and real estate and capital markets conditions. The General Partner
monitors each property's specific locale and sub-market conditions evaluating
current trends, competition, new construction and economic changes. The General
Partner oversees each asset's operating performance and continuously evaluates
the physical improvement requirements. In addition, the financing structure for
each property, tax implications and the investment climate are all considered.
Any of these factors, and possibly others, could potentially contribute to any
decision by the General Partner to sell, refinance, upgrade with capital
improvements or hold a particular Partnership property. The General Partner has
advised the Purchaser (which is an affiliate of the General Partner) that, due
to decreases in occupancy at both of the Partnership's properties, the
Partnership does not have the funds to satisfy its debt obligations. The
General Partner currently is attempting to negotiate a workout agreement with
the mortgage lender for the properties, but presently expects that the
properties will be foreclosed upon by the lender sometime during the fourth
quarter of 1998 or the first quarter of 1999. In the event that the lender
forecloses on the properties, the General Partner expects that the Partnership
will be liquidated and any remaining cash, after payment of all recourse
liabilities, will be distributed to Limited Partners in accordance with the
Limited Partnership Agreement. Under the Limited Partnership Agreement the term
of the Partnership will continue until December 31, 2026, unless sooner
terminated as provided in the Limited Partnership Agreement or by law. Limited
Partners could, as an alternative to tendering their Units, take a variety of
possible actions, including voting to liquidate the Partnership or amending the
Limited Partnership Agreement to authorize Limited Partners to cause the
Partnership to merge with another entity or engage in a "roll-up" or similar
transaction.

Conditions. The Offer is not conditioned on any aggregate minimum
number of Units being tendered. Certain other conditions do apply, however.
See Section 14.

Distributions. The Partnership made cash distributions to Limited
Partners of $19.85 per Unit in 1997. Prior to the 1997 distribution, the
Partnership had not made a distribution since its inception. In total, original
investors in the Partnership have received distributions of only $19.85 in
respect of their original $1,000 investment made in 1986. See Section 9. The
potential for future distributions was considered by the Purchaser (which is an
affiliate of the General Partner) when establishing the Purchase Price. Limited
Partners who tender their Units in response to the Offer will retain any
distributions made through September 29, 1998, and will be entitled to receive
and retain any subsequent distributions made by the Partnership prior to the
date on which the Purchaser pays for tendered Units pursuant to the Offer,
although any such subsequent distribution will result in a reduction of the
Purchase Price. See Section 1. However, tendering Limited Partners will not be
entitled to receive or retain any distributions in respect of tendered Units
which are made on or after the date on which the Purchaser pays for such Units
pursuant to the Offer, regardless of the fact that the record date (as opposed
to the payment date) for any such distribution may be a date prior to the date
of purchase. See Section 3.

Outstanding Units. According to information supplied by the
Partnership, as of September 1, 1998 there were 25,186 Units issued and
outstanding, which were held of record by 1,537 Limited Partners. None of IPLP,
IPT or Insignia currently owns any Units.

THE OFFER

SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE; PRORATION. Upon the
terms and subject to the conditions of the Offer, the Purchaser (which is an
affiliate of the General Partner) will accept for payment (and thereby
purchase) up to 11,500 Units that are validly tendered on or prior to the
Expiration Date and not withdrawn in accordance with the procedures set forth
in Section 4. For purposes of the Offer, the term "Expiration Date" shall mean
12:00 midnight, New York City time, on October 27, 1998, unless the Purchaser
(which is an affiliate of the General Partner) in its sole discretion shall
have extended the period of time for which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date on which the
Offer, as extended by the Purchaser, shall expire. See Section 5 for a
description of the Purchaser's right to extend the period of time during which
the Offer is open and to amend or terminate the Offer.

THE PURCHASE PRICE WILL AUTOMATICALLY BE REDUCED BY THE AGGREGATE
AMOUNT OF DISTRIBUTIONS PER UNIT, IF ANY, MADE BY THE PARTNERSHIP TO LIMITED
PARTNERS ON OR AFTER SEPTEMBER 29, 1998, AND PRIOR TO THE DATE ON WHICH THE
PURCHASER PAYS FOR UNITS PURCHASED PURSUANT TO THE OFFER.

If, prior to the Expiration Date, the Purchaser (which is an affiliate
of the General Partner) increases the consideration offered to Limited Partners
pursuant to the Offer, the increased consideration will be paid for all Units
accepted for payment pursuant to the Offer, regardless of whether the Units
were tendered prior to the increase in the consideration offered.

If more than 11,500 Units are validly tendered prior to the Expiration
Date and not properly withdrawn prior to the Expiration Date in accordance with
the procedures specified in Section 4, the Purchaser (which is an affiliate of
the General Partner) will, upon the terms and subject to the conditions of the
Offer, accept for payment and pay for an aggregate of 11,500 of the Units so
tendered, pro rata according to the number of Units validly tendered by each
Limited Partner and not properly withdrawn on or prior to the Expiration Date,
with appropriate adjustments to avoid (i) purchases of fractional Units and
(ii) purchases that would violate Section T of the Limited Partnership
Agreement (which generally requires that (i) a partial tender of Units must be
for a minimum of fifteen Units and (ii) in order for a partial tender to be
valid, after a sale of Units pursuant to the Offer, the tendering Limited
Partner must continue to hold a minimum of fifteen Units ). If the number of
Units validly tendered and not properly withdrawn on or prior to the Expiration
Date is less than or equal to 11,500 Units, the Purchaser (which is an
affiliate of the General Partner) will purchase all Units so tendered and not
withdrawn, upon the terms and subject to the conditions of the Offer.

If proration of tendered Units is required, then, subject to the
Purchaser's obligation under Rule 14e-1(c) under the Securities Exchange Act of
1934 (the "Exchange Act") to pay Limited Partners the Purchase Price in respect
of Units tendered or return those Units promptly after the termination or
withdrawal of the Offer, the Purchaser (which is an affiliate of the General
Partner) does not intend to pay for any Units accepted for payment pursuant to
the Offer until the final proration results are known. NOTWITHSTANDING ANY SUCH
DELAY IN PAYMENT, NO INTEREST WILL BE PAID ON THE PURCHASE PRICE.

The Offer is conditioned on satisfaction of certain conditions. See
Section 14, which sets forth in full the conditions of the Offer. The Purchaser
(which is an affiliate of the General Partner) reserves the right (but in no
event shall be obligated), in its sole discretion, to waive any or all of those
conditions. If, on or prior to the Expiration Date, any or all of the
conditions have not been satisfied or waived, the Purchaser reserves the right
to (i) decline to purchase any of the Units tendered and terminate the Offer,
(ii) waive all of the unsatisfied conditions and, subject to complying with
applicable rules and regulations of the Commission, 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, and/or
(iv) amend the Offer.

This Offer to Purchase and the related Assignment of Partnership
Interest are being mailed by the Purchaser (which is an affiliate of the
General Partner) to the persons shown by the Partnership's records to have been
Limited

Partners or (in the case of Units owned of record by Individual Retirement
Accounts ("IRAs") and qualified plans) beneficial owners of Units as of
September 1, 1998.

SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS. Upon the
terms and subject to the conditions of the Offer, the Purchaser (which is an
affiliate of the General Partner) will accept for payment (and thereby
purchase) and will pay for all Units validly tendered and not withdrawn in
accordance with the procedures specified in Section 4, as promptly as
practicable following the Expiration Date. A tendering beneficial owner of
Units whose Units are owned of record by an IRA or other qualified plan will
not receive direct payment of the Purchase Price; rather, payment will be made
to the custodian of such account or plan. In all cases, payment for Units
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of a properly completed and duly executed Assignment of Partnership
Interest and any other documents required by the Assignment of Partnership
Interest. See Section 3. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE BY REASON OF ANY DELAY IN MAKING SUCH PAYMENT.

For purposes of the Offer, the Purchaser (which is an affiliate of the
General Partner) will be deemed to have accepted for payment pursuant to the
Offer, and thereby purchased, validly tendered Units if, as and when the
Purchaser (which is an affiliate of the General Partner) gives verbal or
written notice to the Depositary of the Purchaser's acceptance of those Units
for payment pursuant to the Offer. Upon the terms and subject to the conditions
of the Offer, payment for Units accepted for payment pursuant to the Offer will
be made by deposit of the Purchase Price with the Depositary, which will act as
agent for tendering Limited Partners for the purpose of receiving payments from
the Purchaser and transmitting those payments to Limited Partners whose Units
have been accepted for payment.

If any tendered Units are not purchased for any reason, the Assignment
of Partnership Interest with respect to such Units will be destroyed by the
Purchaser (which is an affiliate of the General Partner). If for any reason
acceptance for payment of, or payment for, any Units tendered pursuant to the
Offer is delayed or the Purchaser is unable to accept for payment, purchase or
pay for Units tendered pursuant to the Offer, then, without prejudice to the
Purchaser's rights under Section 14, the Depositary may, nevertheless, on
behalf of the Purchaser (which is an affiliate of the General Partner) retain
tendered Units, and those Units may not be withdrawn except to the extent that
the tendering Limited Partners are entitled to withdrawal rights as described
in Section 4; subject, however, to the Purchaser's obligation under Rule
14e-1(c) under the Exchange Act to pay Limited Partners the Purchase Price in
respect of Units tendered or return those Units promptly after termination or
withdrawal of the Offer.

The Purchaser (which is an affiliate of the General Partner) reserves
the right to transfer or assign, in whole or from time to time in part, to one
or more of the Purchaser's affiliates, the right to purchase Units tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer or prejudice the rights of
tendering Limited Partners to receive payment for Units validly tendered and
accepted for payment pursuant to the Offer.

SECTION 3. PROCEDURE FOR TENDERING UNITS.

Valid Tender. In order for a tendering Limited Partner to participate
in the Offer, its Units must be validly tendered and not withdrawn on or prior
to the Expiration Date. To validly tender Units, a properly completed and duly
executed Assignment of Partnership Interest and any other documents required by
the Assignment of Partnership Interest must be received by the Depositary, at
its address set forth on the back cover of this Offer to Purchase, on or prior
to the Expiration Date. A Limited Partner may tender any or all of the Units
owned by that Limited Partner; provided, however, that because of restrictions
in the Limited Partnership Agreement, (i) a partial tender of Units must be for
a minimum of fifteen Units and (ii) in order for a partial tender to be valid,
after a sale of Units pursuant to the Offer, the tendering Limited Partner must
continue to hold a minimum of fifteen Units). Accordingly, any Limited Partner
that owns fifteen or fewer Units must tender all or none of its Units. Tenders
of fractional Units will not be permitted, except by a Limited Partner who is
tendering all of the Units owned by that Limited Partner. No alternative,
conditional or contingent tenders will be accepted.

Signature Requirements. If the Assignment of Partnership Interest is
signed by the registered holder of the Units and payment is to be made directly
to that holder, then no signature guarantee is required on the Assignment of
Partnership Interest. Similarly, if the Units are tendered for the account of a
member firm of a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc. or a commercial bank, savings
bank, credit union, savings and loan association or trust company having an
office, branch or agency in the United States (each an "Eligible Institution"),
no signature guarantee is required on the Assignment of Partnership Interest.
HOWEVER, IN ALL OTHER CASES, ALL SIGNATURES ON THE ASSIGNMENT OF PARTNERSHIP
INTEREST MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. Please contact the
Information Agent for assistance in obtaining a signature guarantee.

Delivery of Assignment of Partnership Interest. The method of delivery
of the Assignment of Partnership Interest and all other required documents is
at the option and risk of the tendering Limited Partner, and delivery will be
deemed made only when actually received by the Depositary. In all cases,
sufficient time should be allowed to assure timely delivery.

Appointment as Proxy; Power of Attorney. By executing an Assignment of
Partnership Interest, a tendering Limited Partner irrevocably appoints the
Purchaser (which is an affiliate of the General Partner), and its managers and
designees as the Limited Partner's proxies, in the manner set forth in the
Assignment of Partnership Interest, each with full power of substitution, to
the full extent of the Limited Partner's rights with respect to the Units
tendered by the Limited Partner and accepted for payment by the Purchaser
(which is an affiliate of the General Partner). Each such proxy shall be
considered coupled with an interest in the tendered Units. Such appointment
will be effective when, and only to the extent that, the Purchaser (which is an
affiliate of the General Partner) accepts the tendered Units for payment. Upon
such acceptance for payment, all prior proxies given by the Limited Partner
with respect to the Units will, without further action, be revoked, and no
subsequent proxies may be given (and if given will not be effective). The
Purchaser (which is an affiliate of the General Partner) and its managers and
designees will, as to those Units, be empowered to exercise all voting and
other rights of the Limited Partner as they in their sole discretion may deem
proper at any meeting of Limited Partners, by written consent or otherwise. The
Purchaser (which is an affiliate of the General Partner) reserves the right to
require that, in order for Units to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of the Units, the Purchaser must be
able to exercise full voting rights with respect to the Units, including voting
at any meeting of Limited Partners then scheduled or acting by written consent
without a meeting.

By executing an Assignment of Partnership Interest, a tendering
Limited Partner also irrevocably constitutes and appoints the Purchaser and its
managers and designees as the Limited Partner's attorneys-in-fact, each with
full power of substitution, to the full extent of the Limited Partner's rights
with respect to the Units tendered by the Limited Partner and accepted for
payment by the Purchaser. Such appointment will be effective when, and only to
the extent that, the Purchaser accepts the tendered Units for payment. The
tendering Limited Partner agrees not to exercise any rights pertaining to the
tendered Units without the prior consent of the Purchaser. Upon such acceptance
for payment, all prior powers of attorney granted by the Limited Partner with
respect to such Units will, without further action, be revoked, and no
subsequent powers of attorney may be granted (and if granted will not be
effective). Pursuant to such appointment as attorneys-in-fact, the Purchaser
and its managers and designees each will have the power, among other things,
(i) to transfer ownership of such Units on the Partnership books maintained by
the General Partner (and execute and deliver any accompanying evidences of
transfer and authenticity any of them may deem necessary or appropriate in
connection therewith), (ii) upon receipt by the Depositary (as the tendering
Limited Partner's agent) of the Purchase Price, to become a substituted Limited
Partner, to receive any and all distributions made by the Partnership on or
after the date on which the Purchaser purchases such Units, and to receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Units in accordance with the terms of the Offer, (iii) to execute and deliver
to the General Partner a change of address form instructing the General Partner
to send any and all future distributions to which the Purchaser is entitled
pursuant to the terms of the Offer in respect of tendered Units to the address
specified in such form, and (iv) to endorse any check payable to or upon the
order of such Limited Partner representing a distribution to which the
Purchaser is entitled pursuant to the terms of the Offer, in each case in the
name and on behalf of the tendering Limited Partner.

Assignment of Interest in Future Distributions. By executing an
Assignment of Partnership Interest, a tendering Limited Partner irrevocably
assigns to the Purchaser (which is an affiliate of the General Partner) and its
assigns all of the right, title and interest of the Limited Partner in and to
any and all distributions made by the Partnership on or after the date on which
the Purchaser purchases such Units, in respect of the Units tendered by such
Limited Partner and accepted for payment by the Purchaser, regardless of the
fact that the record date for any such distribution may be a date prior to the
date of such purchase. The Purchaser will seek to be admitted to the
Partnership as a substituted Limited Partner upon consummation of the Offer.

Determination of Validity; Rejection of Units; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Units pursuant to the Offer will be determined by the Purchaser
(which is an affiliate of the General Partner), in its sole discretion, which
determination shall be final and binding. The Purchaser (which is an affiliate
of the General Partner) reserves the absolute right to reject any or all
tenders of any particular Units determined by it not to be in proper form or if
the acceptance of or payment for those Units may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser (which is an affiliate of the
General Partner) also reserves the absolute right to waive or amend any of the
conditions of the Offer that it is legally permitted to waive as to the tender
of any particular Units and to waive any defect or irregularity in any tender
with respect to any particular Units of any particular Limited Partner. The
Purchaser's interpretation of the terms and conditions of the Offer (including
the Assignment of Partnership Interest and the Instructions thereto) will be
final and binding. No tender of Units will be deemed to have been validly made
until all defects and irregularities have been cured or waived. None of the
Purchaser (which is an affiliate of the General Partner), the Information
Agent, the Depositary or any other person will be under any duty to give
notification of any defects or irregularities in the tender of any Units or
will incur any liability for failure to give any such notification.

Backup Federal Income Tax Withholding. To prevent the possible
application of backup federal income tax withholding of 31% with respect to
payment of the Purchase Price, each tendering Limited Partner must provide the
Purchaser (which is an affiliate of the General Partner) with the Limited
Partner's correct taxpayer identification number by completing the Substitute
Form W-9 included in the Assignment of Partnership Interest. See the
Instructions to the Assignment of Partnership Interest and Section 6.

FIRPTA Withholding. To prevent the withholding of federal income tax
in an amount equal to 10% of the amount of the Purchase Price plus Partnership
liabilities allocable to each Unit purchased, each tendering Limited Partner
must complete the FIRPTA Affidavit included in the Assignment of Partnership
Interest certifying the Limited Partner's taxpayer identification number and
address and that such Limited Partner is not a foreign person. See the
Instructions to the Assignment of Partnership Interest and Section 6.

Binding Obligation. A tender of Units pursuant to and in accordance
with the procedures described in this Section 3 and the acceptance for payment
of such Units will constitute a binding agreement between the tendering Limited
Partner and the Purchaser (which is an affiliate of the General Partner) on the
terms set forth in this Offer to Purchase and in the Assignment of Partnership
Interest.

SECTION 4. WITHDRAWAL RIGHTS. Tenders of Units pursuant to the Offer
are irrevocable, except that Units tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date and, unless already accepted
for payment as provided in this Offer to Purchase, may also be withdrawn at any
time after November 27, 1998. For withdrawal to be effective, a written or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at its address set forth on the back cover of this Offer to
Purchase. Any such notice of withdrawal must specify the name of the person who
tendered the Units to be withdrawn and must be signed by the person(s) who
signed the Assignment of Partnership Interest in the same manner as the
Assignment of Partnership Interest was signed (including signature guarantees
by an Eligible Institution). Units properly withdrawn will be deemed not to be
validly tendered for purposes of the Offer. Withdrawn Units may be re-tendered,
however, by following the procedures described in Section 3 at any time prior
to the Expiration Date.

If payment for Units is delayed for any reason or if the Purchaser
(which is an affiliate of the General Partner) is unable to pay for Units for
any reason, then, without prejudice to the Purchaser's rights under the Offer,

tendered Units may be retained by the Depositary and may not be withdrawn
except to the extent that tendering Limited Partners are entitled to withdrawal
rights as set forth in this Section 4; subject, however, to the Purchaser's
obligation, pursuant to Rule 14e-1(c) under the Exchange Act, to pay Limited
Partners the Purchase Price in respect of Units tendered or return those Units
promptly after termination or withdrawal of the Offer.

All questions as to the validity and form (including time of receipt)
of notices of withdrawal will be determined by the Purchaser (which is an
affiliate of the General Partner), in its sole discretion, which determination
shall be final and binding. None of the Purchaser, the Information Agent, the
Depositary or any other person will be under any duty to give notification of
any defects or irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification.

SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT. The
Purchaser (which is an affiliate of the General Partner) expressly reserves the
right, in its sole discretion, at any time and from time to time, (i) to extend
the period of time during which the Offer is open and thereby delay acceptance
for payment of, and the payment for, validly tendered Units, (ii) to terminate
the Offer if any condition referred to in Section 14 has not been satisfied or
upon the occurrence of any event specified in Section 14 and (iii) to amend the
Offer in any respect (including, without limitation, by increasing the
consideration offered, increasing or decreasing the number of Units being
sought, or both). Notice of any such extension, termination or amendment will
be disseminated promptly to Limited Partners in a manner reasonably designed to
inform Limited Partners of such change in compliance with Rule 14d-4(c) under
the Exchange Act. In the case of an extension of the Offer, the extension will
be followed by a press release or public announcement which will be issued no
later than 9:00 a.m., New York City time, on the next business day after the
then scheduled Expiration Date, in accordance with Rule 14e-1(d) under the
Exchange Act.

If the Purchaser (which is an affiliate of the General Partner)
extends the Offer, or if the Purchaser (whether before or after its acceptance
for payment of Units) is delayed in its payment for Units or is unable to pay
for Units pursuant to the Offer for any reason, then, without prejudice to the
Purchaser's rights under the Offer, the Depositary may retain tendered Units
and those Units may not be withdrawn except to the extent tendering Limited
Partners are entitled to withdrawal rights as described in Section 4; subject,
however, to the Purchaser's obligation, pursuant to Rule 14e-1(c) under the
Exchange Act, to pay Limited Partners the Purchase Price in respect of Units
tendered or return those Units promptly after termination or withdrawal of the
Offer.

If the Purchaser (which is an affiliate of the General Partner) makes
a material change in the terms of the Offer or the information concerning the
Offer or waives a material condition of the Offer, the Purchaser will extend
the Offer and disseminate additional tender offer materials to the extent
required by Rules 14d-4(c) and 14d-6(d) under the Exchange Act. The minimum
period during which an offer must remain open following a material change in
the terms of the offer or information concerning the offer will depend upon the
facts and circumstances, including the relative materiality of the change in
the terms or information. In the Commission's view, an offer should remain open
for a minimum of five business days from the date the material change is first
published, sent or given to securityholders, and if material changes are made
with respect to information that approaches the significance of price or the
percentage of securities sought, a minimum of ten business days may be required
to allow for adequate dissemination to securityholders and investor response.
As used in this Offer to Purchase, "business day" means any day other than a
Saturday, Sunday or a federal holiday, and consists of the time period from
12:01 a.m. through 12:00 midnight, New York City time.

SECTION 6. CERTAIN FEDERAL INCOME TAX MATTERS.

General. The following summary is a general discussion of certain of
the federal income tax consequences of a sale of Units pursuant to the Offer.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), applicable Treasury regulations thereunder, administrative rulings,
practice and procedures and judicial authority, all as of the date of the
Offer. All of the foregoing are subject to change, and any such change could
affect the continuing accuracy of this summary. This summary does not discuss
all aspects of federal income taxation that may be relevant to a particular
Limited Partner in light of such Limited Partner's specific circumstances or to
certain types of Limited Partners subject to special treatment under the
federal income tax laws (for example,

foreign persons, dealers in securities, banks, insurance companies and
tax-exempt organizations), nor (except as otherwise expressly indicated) does
it describe any aspect of state, local, foreign or other tax laws. Sales of
Units pursuant to the Offer will be taxable transactions for federal income tax
purposes, and also may be taxable transactions under applicable state, local,
foreign and other tax laws. EACH LIMITED PARTNER SHOULD CONSULT ITS OWN TAX
ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO SUCH LIMITED PARTNER OF
SELLING UNITS PURSUANT TO THE OFFER.

Gain or Loss Generally. In general, a Limited Partner will recognize
gain or loss on a sale of Units pursuant to the Offer equal to the difference
between (i) the Limited Partner's "amount realized" on the sale and (ii) the
Limited Partner's adjusted tax basis in the Units sold. Generally, a Limited
Partner's adjusted tax basis with respect to a Unit equals its cost, increased
by the amount of income and the amount of Partnership liabilities (as
determined under Code Section 752) allocated to the Unit, and decreased by (i)
any distributions made with respect to such Unit, (ii) the amount of deductions
or losses allocated to the Unit and (iii) any decrease in the amount of
Partnership liabilities (as determined under Code Section 752) allocated to the
Unit. Thus, the amount of a Limited Partner's adjusted tax basis in tendered
Units will vary depending upon the Limited Partner's particular circumstances.
The "amount realized" with respect to a Unit will be a sum equal to the amount
of cash received by the Limited Partner for the Unit pursuant to the Offer,
plus the amount of the Partnership's liabilities allocable to the Unit (as
determined under Code Section 752).

A portion of the gain or loss recognized by a Limited Partner on a
sale of a Unit pursuant to the Offer generally will be treated as a capital
gain or loss, if (as is generally expected to be the case) the Unit was held by
the Limited Partner as a capital asset. Under the IRS Restructuring and Reform
Act of 1998, the capital gains rate for individuals and other non-corporate
taxpayers is 20% for sales of capital assets held for more than one year.
However, any gain from the sale of such assets attributable to the recapture of
depreciation with respect to real property (other than certain depreciation
recapture taxable as ordinary income) is taxed at a maximum rate of 25%.
Corporate taxpayers are taxed at a maximum marginal rate of 35% for both
capital gains and ordinary income. The maximum marginal federal income tax rate
for ordinary income of individuals and other noncorporate taxpayers is 39.6%.
Capital losses are deductible only to the extent of capital gains, except that,
subject to the passive activity loss limitations discussed below, non-corporate
taxpayers may deduct up to $3,000 of capital losses in excess of the amount of
their capital gains against ordinary income. Excess capital losses generally
can be carried forward to succeeding years (a corporation's carryforward period
is five years and a non-corporate taxpayer can carry forward such losses
indefinitely); and a corporation is permitted to carry back excess capital
losses to the three preceding taxable years, provided the carryback does not
increase or produce a net operating loss for any of those years.

A tendering Limited Partner will be allocated a pro rata share of the
Partnership's taxable income or loss for the year of sale with respect to the
Units sold in accordance with the provisions of the Limited Partnership
Agreement concerning transfers of Units. Such allocation and any cash
distributed by the Partnership to the Limited Partner for that year will affect
the Limited Partner's adjusted tax basis in Units and, therefore, the amount of
such Limited Partner's taxable gain or loss upon a sale of Units pursuant to
the Offer.

Unrealized Receivables and Certain Inventory. A portion of the gain or
loss upon the sale of Units may be attributable to unrealized receivables. If
any portion of the amount of gain or loss realized by a Limited Partner is
attributable to "unrealized receivables" (which includes certain depreciation
recapture) or "substantially appreciated inventory" as defined in Code Section
751, then a portion of the Limited Partner's gain or loss may be ordinary
rather than capital. In addition, a portion of such gain may be taxed at the
25% rate discussed above. A Limited Partner who tenders Units which are
purchased pursuant to the Offer must file an information statement with such
Limited Partner's federal income tax return for the year of the sale which
provides the information specified in Treasury Regulation ss. 1.751-1(a)(3). A
selling Limited Partner also must notify the Partnership of the date of the
transfer and the names, addresses and tax identification numbers of the
transferor(s) and transferee within 30 days of the date of the transfer (or, if
earlier, by January 15 of the following calendar year).

Passive Activity Loss Limitation. Under Code Section 469, a
non-corporate taxpayer or personal service corporation generally can deduct
"passive losses" in any year only to the extent of the person's passive income
for that year. Closely held corporations (other than personal service
corporations) may offset such losses against active income as well as passive
activity income for that year. A portion of any post-1986 losses of Limited
Partners from the Partnership may have been passive losses. Thus, Limited
Partners may have "suspended" passive losses from the Partnership (i.e.,
post-1986 net taxable losses in excess of statutorily permitted "phase-in"
amounts which have not been used to offset income from other passive activities
or from the Partnership). Substantially all gain or loss from a sale of Units
pursuant to the Offer will be passive income or loss.

If a Limited Partner sells less than all of its Units pursuant to the
Offer, suspended passive losses, if any (including a portion of any loss
recognized on the sale of Units), can be currently deducted (subject to other
applicable limitations) to the extent of the Limited Partner's passive income
from the Partnership for that year (including any gain recognized on the sale
of Units) plus any other passive income for that year. If, on the other hand, a
Limited Partner sells 100% of its Units pursuant to the Offer, any "suspended"
losses and any losses recognized upon the sale of the Units will be offset
first against any other net passive gain to the Limited Partner from the sale
of the Units and any other net passive activity income from other passive
activity investments, and the balance of any "suspended" net losses from the
Units will no longer be subject to the passive activity loss limitation and,
therefore, will be deductible by such Limited Partner from its other income
(subject to any other applicable limitations), including ordinary income. If a
tendering Limited Partner has suspended passive losses from the Partnership,
such Limited Partner must sell all of its Units to receive these tax benefits.
If more than 11,500 of the outstanding Units are tendered, some tendering
Limited Partners may not be able to sell 100% of their Units pursuant to the
Offer because of proration of the number of Units to be purchased by the
Purchaser. See Section 1.

Partnership Termination. Section 708(b) of the Code provides that a
partnership terminates for income tax purposes if there is a sale or exchange
of 50% or more of the total interest in partnership capital and profits within
a twelve-month period (although successive transfers of the same interest
within a twelve-month period will be treated as a single transfer for this
purpose). In the event of a termination, the Partnership's tax year would close
and the Partnership would be treated for income tax purposes as if it had
contributed all of its assets and liabilities to a "new" partnership in
exchange for an interest in the "new" partnership. The Partnership would then
be treated as making a distribution of the interests in the "new" partnership
to the new partners and the remaining partners, followed by the liquidation of
the Partnership. Because the "new" partnership would be treated as having
acquired its assets on the date of the deemed contribution, a new depreciation
recovery period would begin on such date, the Partnership's annual depreciation
deductions over the next few years would be substantially reduced, and the
Partnership would have greater taxable income (or less tax loss) than if no tax
termination occurred. In addition, depreciation may be required to be allocated
to those Limited Partners that have a higher tax basis. A tax termination of
the Partnership would also terminate any partnership in which the Partnership
holds a majority interest (50% or more).

The Limited Partnership Agreement prohibits transfers of Units if a
transfer, when considered with all other transfers during the same applicable
twelve month period, would cause a termination of the Partnership for tax
purposes. The Purchaser believes that even if the maximum number of Units is
purchased pursuant to the Offer, those transfers will not cause a tax
termination of the Partnership.

Backup Withholding and FIRPTA Withholding. Limited Partners (other
than tax-exempt persons, corporations and certain foreign persons) who tender
Units may be subject to 31% backup withholding unless those Limited Partners
provide a taxpayer identification number ("TIN") and certify that the TIN is
correct or properly certify that they are awaiting a TIN. A Limited Partner may
avoid backup withholding by properly completing and signing the Substitute Form
W-9 included as part of the Assignment of Partnership Interest. If a Limited
Partner who is subject to backup withholding does not properly complete and
sign the Substitute Form W-9, the Purchaser will withhold 31% from payments to
such Limited Partner.

Xxxx realized by a foreign Limited Partner on the sale of a Unit
pursuant to the Offer will be subject to federal income tax. Under Code Section
1445, the transferee of an interest held by a foreign person in a partnership
which owns United States real property generally is required to deduct and
withhold a tax equal to 10% of the

amount realized on the disposition. In order to comply with this requirement,
the Purchaser will withhold 10% of the amount realized by a tendering Limited
Partner unless the Limited Partner properly completes and signs the FIRPTA
Affidavit included as part of the Assignment of Partnership Interest certifying
the Limited Partner's TIN and address, and that such Limited Partner is not a
foreign person. Amounts withheld would be creditable against a foreign Limited
Partner's federal income tax liability and, if in excess thereof, a refund
could be obtained from the Internal Revenue Service by filing a U.S. income tax
return.

SECTION 7. EFFECTS OF THE OFFER.

Limitations on Resales. The Limited Partnership Agreement prohibits
transfers of Units if a transfer, when considered with all other transfers
during the same applicable twelve-month period, would cause a termination of
the Partnership for federal income tax purposes. This provision may limit sales
of Units in the secondary market and in private transactions for the
twelve-month period following completion of the Offer. The General Partner has
advised the Purchaser that the Partnership will not process any requests for
recognition of substitution of Limited Partners upon a transfer of Units during
such twelve-month period which the General Partner believes may cause a tax
termination in contravention of the Limited Partnership Agreement. In
determining the number of Units for which the Offer is made (representing
approximately 46% of the outstanding Units), the Purchaser (which is an
affiliate of the General Partner) took this restriction into account so as to
permit normal historical levels of transfers to occur following the transfers
of Units pursuant to the Offer without violating this restriction.

Effect on Trading Market; Registration Under Section 12(g) of the
Exchange Act. If a substantial number of Units are purchased pursuant to the
Offer, the result will be a reduction in the number of Limited Partners. In the
case of certain kinds of equity securities, a reduction in the number of
security-holders might be expected to result in a reduction in the liquidity
and volume of activity in the trading market for the security. In this case,
however, there is no established public trading market for the Units and,
therefore, the Purchaser (which is an affiliate of the General Partner) does
not believe a reduction in the number of Limited Partners will materially
further restrict the Limited Partners' ability to find purchasers for their
Units through secondary market transactions. See Section 13 for certain limited
information regarding recent secondary market sales of the Units.

The Units are registered under Section 12(g) of the Exchange Act,
which means, among other things, that the Partnership is required to file
periodic reports with the Commission and to comply with the Commission's proxy
rules. The Purchaser (which is an affiliate of the General Partner) does not
expect or intend that consummation of the Offer will cause the Units to cease
to be registered under Section 12(g) of the Exchange Act. If the Units were to
be held by fewer than 300 persons, the Partnership could apply to de-register
the Units under the Exchange Act. Because the Units are widely held, however,
the Purchaser (which is an affiliate of the General Partner) believes that,
even if it purchases the maximum number of Units in the Offer, after that
purchase the Units will be held of record by more than 300 persons.

Control of Limited Partner Voting Decisions by Purchaser; Effect of
Relationship with General Partner. The Limited Partnership Agreement provides
that the General Partner has absolute discretion as to whether to admit an
assignee of Units to the Partnership as a substituted Limited Partner. The
Purchaser (which is an affiliate of the General Partner) will seek to be
admitted to the Partnership as a substituted Limited Partner upon consummation
of the Offer and, if admitted, will have the right to vote each Unit purchased
pursuant to the Offer. Even if the Purchaser (which is an affiliate of the
General Partner) is not admitted to the Partnership as a substituted Limited
Partner, however, the Purchaser nonetheless will have the right to vote each
Unit purchased in the Offer pursuant to the irrevocable appointment by
tendering Limited Partners of the Purchaser and its managers and designees as
proxies with respect to the Units tendered by such Limited Partners and
accepted for payment by the Purchaser. See Section 3. As a result, the
Purchaser (which is an affiliate of the General Partner) could be in a position
to significantly influence all voting decisions with respect to the
Partnership. In general, IPLP and the Purchaser (which are affiliates of the
General Partner) will vote the Units owned by them in whatever manner they deem
to be in the best interests of IPT, which, because of their relationship with
the General Partner, also may be in the interest of the General Partner, but
may not be in the interest of other Limited Partners. This could (i) prevent
nontendering Limited Partners from taking action they desire but that IPT
opposes and (ii) enable IPT to take action desired by IPT but opposed by
non-tendering Limited Partners. Under the Limited Partnership Agreement,
Limited

Partners holding a majority of the Units are entitled to take action with
respect to a variety of matters including: removal of the General Partner and
in certain circumstances election of a new or successor general partner;
dissolution of the Partnership; sale of all or substantially all of the assets
of the Partnership; and most types of amendments to the Limited Partnership
Agreement.

The Offer will not result in any change in the compensation payable to
the General Partner or its affiliates. However, as a result of the Offer, the
Purchaser (which is an affiliate of the General Partner) will participate, in
its capacity as a Limited Partner, in any subsequent distributions to Limited
Partners to the extent of the Units purchased pursuant to the Offer.

SECTION 8. FUTURE PLANS OF INSIGNIA, IPT AND THE PURCHASER. IPT,
through the Purchaser (which is an affiliate of the General Partner), is
seeking to acquire Units pursuant to the Offer in order to increase its equity
interest in the Partnership, primarily for investment purposes and with a view
to making a profit. Following the completion of the Offer, IPT and/or persons
related to or affiliated with it may acquire additional Units. Any such
acquisition may be made through private purchases, through one or more future
tender or exchange offers or by any other means deemed advisable. Any such
acquisition may be at a price higher or lower than the price to be paid for the
Units purchased pursuant to the Offer, and may be for cash or other
consideration. Insignia and IPT (which are affiliates of the General Partner)
also may consider disposing of some or all of the Units the Purchaser acquires
pursuant to the Offer, either directly or by a sale or other disposition of one
or more interests in IPT or IPLP, depending among other things on the
requirements from time to time of Insignia, IPT and their affiliates in light
of liquidity, strategic, tax and other considerations.

The General Partner has advised the Purchaser (which is an affiliate
of the General Partner) that the General Partner expects that unless a workout
agreement can be negotiated, the mortgage lender will foreclose upon the
Partnership's properties during the fourth quarter of 1998 or during the first
quarter of 1999, and the Partnership subsequently will be liquidated shortly
thereafter (as described in Section 9). In the event such liquidation does not
occur, IPT and the Purchaser expect that consistent with the General Partner's
fiduciary obligations, the General Partner will seek and review opportunities
(including opportunities identified by IPT and the Purchaser) to engage in
transactions which could benefit the Partnership, such as sales or refinancings
of assets or a combination of the Partnership with one or more other entities,
with the objective of seeking to maximize returns to Limited Partners.

IPT and the Purchaser (which are affiliates of the General Partner)
have been advised that the possible future transactions the General Partner
expects to consider on behalf of the Partnership include (i) payment of
extraordinary distributions; (ii) refinancing, reducing or increasing existing
indebtedness of the Partnership; (iii) sales of assets, individually or as part
of a complete liquidation; and (iv) mergers or other consolidation transactions
involving the Partnership. Any such merger or consolidation transaction could
involve other limited partnerships in which the General Partner or its
affiliates serve as general partners, or a combination of the Partnership with
one or more existing, publicly traded entities (including, possibly, affiliates
of IPT (which is an affiliate of the General Partner) or IPT itself), in any of
which Limited Partners might receive cash, common stock or other securities or
consideration. There is no assurance, however, as to when or whether any of the
transactions referred to above might occur. If any such transaction is effected
by the Partnership and financial benefits accrue to the Limited Partners of the
Partnership, the Purchaser (and thus IPT) will participate in those benefits to
the extent of its ownership of Units. A merger or other consolidation
transaction and certain kinds of other extraordinary transactions would require
a vote of the Limited Partners, and if the Purchaser is successful in acquiring
a significant number of Units pursuant to the Offer (or otherwise), IPT will be
able to significantly influence the outcome of any such vote. IPT's primary
objective in seeking to acquire the Units through the Purchaser pursuant to the
Offer is not, however, to influence the vote on any particular transaction, but
rather to generate a profit on the investment represented by those Units.

SECTION 9. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP. Except as
otherwise indicated, information contained in this Section 9 is based upon
documents and reports publicly filed by the Partnership with the Commission.

General. The Partnership was organized on February 28, 1986 under the
laws of the State of Delaware. Its principal executive offices are located at
Xxx Xxxxxxxx Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, and its
telephone number at that address is (000) 000-0000.

The Partnership's primary business is owning, operating, acquiring and
disposing of properties.

The Partnership has a 99% limited partner interest in a limited
partnership, Centinella GP, L.P. ("Centinella GP"), which in turn has a 1%
general partner interest in two partnerships, VMS 1985-253, LP and VMS
1985-254, LP (collectively, the "Sub-tier Partnerships"). The Partnership also
has a 99% limited partner interest in each of the Sub-tier Partnerships. The
General Partner has a 1% general partner interest in Centinella GP and
therefore controls Centinella GP and the Sub-tier Partnerships. The Sub-tier
Partnerships hold ground leases on land underlying two medical facilities in
Inglewood, California, and the ground lessors (which are not affiliates of the
General Partner) have the right to purchase such properties in each of 2010 and
2030 at prices equal to their then fair market value, provided that both
properties are purchased simultaneously.

Originally Anticipated Term of Partnership; Alternatives. According to
the Partnership's Prospectus dated May 15, 1986, the then general partner
(predecessor to the current General Partner) anticipated that the Partnership
would sell and/or refinance its properties five to eight years after their
acquisition, depending on the then current real estate and money markets,
economic climate and income tax consequences to the Limited Partners. Under the
Limited Partnership Agreement, the term of the Partnership will continue until
December 31, 2026, unless sooner terminated as provided in the Limited
Partnership Agreement or by law. Limited Partners could, as an alternative to
tendering their Units, take a variety of possible actions, including voting to
liquidate the Partnership or amending the Limited Partnership Agreement to
authorize Limited Partners to cause the Partnership to merge with another
entity or engage in a "roll-up" or similar transaction.

General Policy Regarding Sales and Refinancings of Partnership
Properties. In general, the General Partner regularly evaluates the
Partnership's properties by considering various factors, such as the
Partnership's financial position and real estate and capital markets
conditions. The General Partner monitors each property's specific locale and
sub-market conditions evaluating current trends, competition, new construction
and economic changes. The General Partner oversees each asset's operating
performance and continuously evaluates the physical improvement requirements.
In addition, the financing structure for each property, tax implications and
the investment climate are all considered. Any of these factors, and possibly
others, could potentially contribute to any decision by the General Partner to
sell, refinance, upgrade with capital improvements or hold a particular
Partnership property. The General Partner has advised the Purchaser (which is
an affiliate of the General Partner) that, due to decreases in occupancy at
both of the Partnership's properties, the Partnership does not have the funds
to satisfy its debt obligations. The General Partner currently is attempting to
negotiate a workout agreement with the mortgage lender for the properties, but
presently expects that the properties will be foreclosed upon by the lender
sometime during the fourth quarter of 1998 or the first quarter of 1999. In the
event that the lender forecloses on the properties, the General Partner expects
that the Partnership will be liquidated and any remaining cash, after payment
of all recourse liabilities, will be distributed to Limited Partners in
accordance with the Limited Partnership Agreement.

Selected Financial and Property-Related Data. Set forth below is a
summary of certain financial and statistical information with respect to the
Partnership and its properties, all of which has been excerpted or derived from
the Partnership's Annual Reports on Form 10-KSB for the years ended December
31, 1997, 1996, 1995, 1994 and 1993 and the Partnership's Quarterly Reports on
Form 10-QSB for the periods ended June 30, 1998 and 1997. More comprehensive
financial and other information is included in such reports and other documents
filed by the Partnership with the Commission, and the following summary is
qualified in its entirety by reference to such reports and other documents and
all the financial information and related notes contained therein.

VMS INVESTORS FIRST-STAGED EQUITY X.X. XX
SELECTED FINANCIAL DATA
(in thousands, except Unit data)

SIX MONTHS ENDED FISCAL YEAR ENDED
JUNE 30, DECEMBER 31,
----------------------- ------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ------------ ----------- ----------- ----------- ---------- ----------
(UNAUDITED)

Statements of Operations Data:
Rental Income................. $ 1,143 $ 1,158 $ 2,310 $ 2,420 $ 2,348 $ 3,117 $ 4,108
Other Income.................. $ 57 $ 65 $ 130 $ 127 $ 72 $ 1 $ 1,174
Total Revenues............. $ 1,200 $ 1,223 $ 2,440 $ 2,547 $ 2,420 $ 3,118 $ 5,282
Income (Loss) from Operations
(before extraordinary item) $ 98 $ 60 $ 39 $ 221 $ 281 $ (209) $ (1,815)
Net Income (Loss)............. $ 98 $ 60 $ 39 $ 221 $ 281 $ 7,115 $ (1,349)
Net Income (Loss) per Unit.... $ 3.85 $ 2.34 $ 1.53 $ 8.70 $ 11.05 $ 275.99 $ (53)

AS OF AS OF
JUNE 30, DECEMBER 31,
----------------------- ------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ------------ ----------- ----------- ----------- ---------- ----------
(UNAUDITED)
Balance Sheets Data:
Total Assets.................. $ 10,019 $ 10,099 $ 10,051 $ 10,536 $ 10,444 $ 10,741 $ 22,931
Total Liabilities............. $ 9,203 $ 9,332 $ 9,333 $ 9,357 $ 9,477 $ 10,055 $ 29,360
Limited Partners' Equity
(Deficit).................... $ 810 $ 761 $ 713 $ 1,174 $ 964 $ 686 $ (6,430)
Units Outstanding............. 25,186 25,186 25,186 25,186 25,186 25,186 25,186
Book Value per Unit........... $ 32.16 $ 30.22 $ 28.31 $ 46.61 $ 38.28 $ 27.24 $(255.30)

Description of Properties. Set forth below is a table showing the
location, the date of purchase, the nature of the Partnership's ownership
interest in and the use of each of the Partnership's properties.

DATE OF
PROPERTY PURCHASE TYPE OF OWNERSHIP USE
---------------------------- -------- --------------------------- ---------------------

Centinella I 06/01/86 Fee ownership(1) Medical Facility
Inglewood, California (subject to a ground lease (39,459 sq.ft.)
and first mortgage)

Centinella II 06/01/86 Fee ownership(1) Medical Facility
Inglewood, California (subject to a ground lease (63,103 sq.ft.)
and first mortgage)

-----------------
(1) The Sub-tier Partnerships lease 21,536 square feet of land underlying
Centinella I and 25,266 square feet of land underlying Centinella II. The
ground lessors which lease the land to the Sub-tier Partnerships have the
right to purchase the medical facilities in 2010 and 2030 at the then fair
market values, provided that the properties are purchased simultaneously.
The leases expire in 2052.

Accumulated Depreciation Schedule. Set forth below is a table showing
the gross carrying value, accumulated depreciation and federal tax basis of
each of the Partnership's properties as of December 31, 1997 ($ amounts in
thousands).

GROSS
CARRYING ACCUMULATED FEDERAL
PROPERTY VALUE DEPRECIATION RATE METHOD TAX BASIS
----------------------------------- -------------- ------------- ------------ ---------- ------------

Centinella I $ 4,751 $2,577 (1) (1) $ 1,784
Centinella II 8,183 3,700 (1) (1) 2,786
------- ------ ------
TOTALS $12,934 $6,277 $4,570
======= ====== ======

(1) Personal property is depreciated on a 150% declining balance basis over 5-7
years. Commercial buildings and improvements are depreciated on a
straight-line basis over 21-28 years.

Schedule of Mortgages. Set forth below is a table showing certain
information regarding the outstanding mortgages encumbering each of the
Partnership's properties as of December 31, 1997 ($ amounts in thousands).

PRINCIPAL PRINCIPAL
BALANCE AT STATED BALANCE
DECEMBER 31, INTEREST PERIOD MATURITY DUE AT
PROPERTY 1997 RATE AMORTIZED DATE MATURITY
---------------------------------------- --------------- --------------- --------------- -------------- ---------------

Centinella I
1st mortgage $3,468 (1) 25 yrs. 04/01/01 $3,300
Centinella II
1st mortgage 5,601 (1) 25 yrs. 04/01/01 5,329
------ ------
TOTALS $9,069 $8,629
--------- ====== ======

(1) The interest rates adjust monthly and payments adjust every six months
based on the 11th District Cost of Funds Index plus 4%, as provided in the
loan documents. The current adjusted interest rate, 8.96%, will remain in
effect until the next adjustment date.

Average Annual Rental Rate and Occupancy. Set forth below is a table
showing the average annual rental rates and occupancy percentages for each of
the Partnership's properties during the past two years.

PROPERTY AVERAGE ANNUAL RENTAL RATE AVERAGE ANNUAL OCCUPANCY
--------------------------- ------------------------------------ -------------------------
1997 1996 1997 1996
-------------- -------------- ---- ----

Centinella I(1) $ 26.91/sq.ft. $ 26.18/sq.ft. 68% 79%
Centinella II(2) $ 27.14/sq.ft. $ 27.35/sq.ft. 93% 95%

(1) The decrease in occupancy at Centinella I can be attributed to the
neighborhood in which this property is located. The property is a medical
office building located near the regional hospital. Several medical offices
vacated the property due to rumors that the hospital would be re-locating.
The current plan is not to re-locate the hospital; the General Partner
therefore is hopeful that occupancy will improve. The new owner of the
hospital is hoping to expand and has requested that certain improvements be
made at Centinella I in order to make it more attractive.
Lobby enhancements have been started as the first phase of these
improvements.
(2) Although occupancy at Centinella II was relatively high at December 31,
1997, in the third quarter of 1998 the anchor tenant at Centinella II will
be vacating its current space, which approximates 48,000 square feet
(approximately 76% of the total leasable square feet of the property). The
General Partner believes that cash on hand will be sufficient to cover debt
service payments temporarily. The General Partner is confident that at
least part of this space will be re-leased prior to the end of 1998.
Additionally, repairs and improvements are planned to update the appearance
of the property and help attract new tenants. However, there is no
guarantee that the General Partner will be successful in leasing the space.

Schedule of Real Estate Taxes and Rates. Set forth below is a table
showing the real estate taxes and rates for 1997 for each of the Partnership's
properties.

1997 1997
PROPERTY BILLING RATE
--------------------------------- ----------- ------
Centinella I $ 31,000 1.34%
Centinella II $ 50,000 1.34%

Other Information. The Partnership is subject to the information
reporting requirements of the Exchange Act and accordingly is required to file
reports and other information with the Commission relating to its business,
financial results and other matters. Such reports and other documents may be
inspected at the Commission's Public Reference Section, Room 1024, 000 Xxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, where copies may be obtained at
prescribed rates, and at the regional offices of the Commission located in the
Citicorp Center, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
and 7 World Trade Center, New York, New York 10048. Copies should be available
by mail upon payment of the Commission's customary charges by writing to the
Commission's principal offices at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000. The Commission also maintains a web site that contains reports, proxy
and other information filed electronically with the Commission, the address of
which is xxxx://xxx.xxx.xxx.

Cash Distributions History. The Partnership made cash distributions to
Limited Partners of $19.85 per Unit in 1997. Prior to the 1997 distribution,
the Partnership had not made a distribution since its inception. In total,
original investors in the Partnership have received distributions of only
$19.85 in respect of their original $1,000 investment made in 1986.

Operating Budgets of the Partnership. A summary of the fiscal 1997 and
1998 operating budgets and the audited results of operations for fiscal 1997 of
the Partnership are set forth in the table below. The budgeted amounts provided
below are figures that were not computed in accordance with generally accepted
accounting principles ("GAAP"). Historically, budgeted operating results of
operations for a particular fiscal year have differed significantly in certain
respects from the audited operating results for that year. In particular, items
that are categorized as capital expenditures for purposes of preparing the
operating budgets are often re-categorized as expenses when the financial
statements are audited and presented in accordance with GAAP. Therefore, the
summary operating budget presented for fiscal 1998 should not necessarily be
considered as indicative of what the audited operating results for fiscal 1998
will be. Furthermore, any estimate of the future performance of a business,
such as the Partnership's business, is forward-looking and based on numerous
assumptions, some of which inevitably will prove to be incorrect. For this
reason, it is probable that the Partnership's future operating results will
differ from those projected in the operating budget, and those differences may
be material. Therefore, such information should not be relied on by Limited
Partners.

FISCAL 1997 FISCAL 1997 FISCAL 1998
BUDGETED AUDITED BUDGETED
----------- ----------- -----------

Total Revenues from Property Operations........................... $ 2,513,000 $ 2,440,000 $ 2,021,000
Total Operating Expenses ......................................... $ 1,751,000 $ 1,052,000 $ 792,000
Net Operating Income.............................................. $ 762,000 $ 1,388,000 $ 1,229,000
Capital Expenditures.............................................. $ 422,000 $ 49,000 $ 629,000

SECTION 10. CONFLICTS OF INTEREST AND TRANSACTIONS WITH AFFILIATES.
The General Partner and its affiliates have conflicts of interest with respect
to the Offer as set forth below.

Conflicts of Interest with Respect to the Offer. The General Partner
has conflicts of interest with respect to the Offer, including conflicts
resulting from its affiliation with IPT and the Purchaser. The General Partner
also would have a conflict of interest (i) as a result of the fact that a sale
or liquidation of the Partnership's assets would result in a decrease or
elimination of the fees paid to the General Partner and/or its affiliates and
(ii) as a consequence of the Purchaser's ownership of Units, because the
Purchaser (which is an affiliate of the General Partner) may have incentives to
seek to maximize the value of its ownership of Units, which in turn may result
in a conflict for the General Partner in attempting to reconcile the interests
of the Purchaser (which is an affiliate of the General Partner) with the
interests of the other Limited Partners. In addition, the Purchaser (which is
an affiliate of the General Partner) is making the Offer with a view to making
a profit. Accordingly, there is a conflict between the desire of the Purchaser
(which is an affiliate of the General Partner) to purchase Units at a low price
and the desire of the Limited Partners to sell their Units at a high price. The
General Partner has indicated in the Schedule 14D-9 that it is remaining
neutral and making no recommendation as to whether Limited Partners should
tender their Units pursuant to the Offer. LIMITED PARTNERS ARE URGED TO READ
THIS OFFER TO PURCHASE AND THE SCHEDULE 14D-9 AND THE RELATED MATERIALS
CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS.

Voting by the Purchaser. The Limited Partnership Agreement provides
that the General Partner has absolute discretion as to whether to admit an
assignee of Units to the Partnership as a substituted Limited Partner. The
Purchaser (which is an affiliate of the General Partner) will seek to be
admitted to the Partnership as a substituted Limited Partner upon consummation
of the Offer and, when admitted, will have the right to vote each Unit
purchased pursuant to the Offer. Even if the Purchaser (which is an affiliate
of the General Partner) is not admitted to the Partnership as a substituted
Limited Partner, however, the Purchaser nonetheless will have the right to vote
each Unit purchased in the Offer pursuant to the irrevocable appointment by
tendering Limited Partners of the Purchaser (which is an affiliate of the
General Partner) and its managers and designees as proxies with respect to the
Units tendered by such Limited Partners and accepted for payment by the
Purchaser. See Section 3. As a result, if the Purchaser (which is an affiliate
of the General Partner) is successful in acquiring a significant number of
Units pursuant to the Offer, the Purchaser will have the right to vote those
Units and thereby significantly influence all voting decisions with respect to
the Partnership. In general, IPLP and the Purchaser (which are affiliates of
the General Partner) will vote the Units owned by them in whatever manner they
deem to be in IPT's best interests, which, because of their relationship with
the General Partner, also may be in the interest of the General Partner, but
may not be in the interest of other Limited Partners. This could (i) prevent
non-tendering Limited Partners from taking action they desire but that IPT
opposes and (ii) enable IPT to take action desired by IPT but opposed by
non-tendering Limited Partners. Under the Limited Partnership Agreement,
Limited Partners holding a majority of the Units are entitled to take action
with respect to a variety of matters including: removal of the General Partner
and in certain circumstances election of a new or successor general partner;
dissolution of the Partnership; sale of all or substantially all of the assets
of the Partnership; and most types of amendments to the Limited Partnership
Agreement. See Section 7.

Financing Arrangements. The Purchaser (which is an affiliate of the
General Partner) expects to pay for the Units it purchases pursuant to the
Offer with funds provided by IPLP as capital contributions. IPLP in turn
intends to use its cash on hand and, if necessary, funds available to it under
its credit facility (as described in Section 12) to make such contributions.
See Section 12. It is possible, however, that in connection with its future
financing activities, IPT or IPLP may cause or request the Purchaser (which is
an affiliate of the General Partner) to pledge the Units as collateral for
loans, or otherwise agree to terms which provide IPT, IPLP and the Purchaser
with incentives to generate substantial near-term cash flow from the
Purchaser's investment in the Units. This could be the case, for example, if a
loan has a "balloon" maturity after a relatively short time or bears a high or
increasing interest rate. In such a situation, the General Partner may
experience a conflict of interest in seeking to reconcile the best interests of
the Partnership with the need of its affiliates for cash flow from the
Partnership's activities.

Transactions with Affiliates. The Partnership paid I/ESG fees for
property management services in the amounts of approximately $145,000, $146,000
and $139,000 for the years ended December 31, 1997, 1996 and 1995,
respectively, and has paid I/ESG property management fees equal to $64,000
during the first six months of 1998. The Partnership reimbursed the General
Partner and its affiliates (including Insignia) for expenses incurred in
connection with asset management and partnership administration services
performed by them for the Partnership for the years ended December 31, 1997,
1996 and 1995 in the amounts of $89,000, $76,000 and $136,000, respectively,
and has reimbursed them for such services in the amount of $32,000 through June
30, 1998 (including reimbursements paid to an affiliate of the General Partner
in the amounts of $8,000 for the year ended December 31, 1997 (for commercial
lease commissions) and $4,000 for the six months ended June 30, 1998 (for costs
incurred in connection with construction oversight services).

SECTION 11. CERTAIN INFORMATION CONCERNING THE PURCHASER, IPLP, IPT
AND INSIGNIA.

The Purchaser. The Purchaser (which is an affiliate of the General
Partner) is a recently formed entity controlled by IPT and organized for the
purpose of making tender offers (including the Offer). The Purchaser is a
wholly-owned subsidiary of IPLP. The Purchaser (which is an affiliate of the
General Partner) has not engaged in any business activity other than in
connection with the Offer and certain other tender offers for units of limited
partnership interests in other IPT Partnerships (as defined below).

The principal executive offices of the Purchaser (which is an
affiliate of the General Partner) are located at One Insignia Financial Plaza,
P.O. Box 19059, Greenville, South Carolina 29602, and its telephone number is
(000) 000-0000. For certain information concerning the managers of the
Purchaser (which is an affiliate of the General Partner), see Schedule I to
this Offer to Purchase.

IPT and IPLP. IPT was formed by Insignia in May 1996 for the purpose
of acquiring and owning interests in multi-family residential properties,
principally through ownership of limited and general partner interests in real
estate limited partnerships (including the Partnership). IPT has been organized
and operates in a manner that will qualify it to be taxed as a real estate
investment trust ("REIT") under the Code. Substantially all of IPT's
investments are held through IPLP, which is the operating partnership of IPT.
IPT is presently the sole general partner and Insignia is presently the sole
limited partner of IPLP. IPT has engaged Insignia to provide certain investment
banking and related services to IPT and IPLP, including in connection with the
Offer.

Substantially all of IPT's assets consist of (i) interests in entities
which comprise or control the managing general partners of real estate limited
partnerships, including the Partnership (the "IPT Partnerships"), which
interests are held by IPT directly or through wholly-owned subsidiaries, and
(ii) limited partner interests in the IPT Partnerships, which interests are
held through IPLP. The IPT Partnerships own, in the aggregate, 349 properties
containing approximately 73,000 residential apartment units and approximately
5.8 million square feet of commercial space. See Schedule IV for a list of the
IPT Partnerships in which IPT has a material investment.

On September 17, 1998, Angeles Mortgage Investment Trust, an
unincorporated California business trust whose Class A shares were traded on
the American Stock Exchange under the symbol ANM ("AMIT"), was merged with and
into IPT, with IPT being the surviving entity (the "AMIT Merger"). As a result
of the AMIT Merger, IPT's common shares are now listed and traded on the
American Stock Exchange under the symbol FFO.

IPT is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning IPT's business, principal properties, capital
structure, material pending legal proceedings, operating results, financial
condition, directors and officers (including their remuneration and stock
options granted to them), the principal holders of IPT's securities, any
material interests of such persons in transactions with IPT and certain other
matters is required to be disclosed in proxy statements and annual reports
distributed to IPT's shareholders and filed with the Commission. Such reports,
proxy statements and other information may be inspected and copied at the
Commission's public reference facilities and should also be available for
inspection in the same manner as set forth with respect to the Partnership in
Section 9.

The principal executive offices of IPT and IPLP are located at One
Insignia Financial Plaza, P.O. Box 19059, Greenville, South Carolina 29602, and
the telephone number of each is (000) 000-0000. For certain information
concerning the trustees and executive officers of IPT, see Schedule II to this
Offer to Purchase. IPLP does not have any officers or employees.

Set forth below is certain consolidated financial information with
respect to IPT, IPLP and its consolidated subsidiaries for its fiscal years
ended December 31, 1997 and 1996 and the six-month periods ended June 30, 1998
and 1997. More comprehensive financial and other information is included in
IPT's Registration Statement on Form S-4, as most recently amended on August
10, 1998 (including management's discussion and analysis of financial condition
and results of operations), and in other reports and documents filed by IPT
with the Commission. The financial information set forth below is qualified in
its entirety by reference to such reports and documents filed with the
Commission and the financial statements and related notes contained therein.
These reports and other documents may be examined and copies thereof may be
obtained in the manner set forth above.

INSIGNIA PROPERTIES TRUST SELECTED
CONSOLIDATED FINANCIAL INFORMATION (in
thousands, except share and unit data)

SIX MONTHS ENDED SIX MONTHS ENDED YEAR ENDED YEAR ENDED
JUNE 30, 1998 JUNE 30, 1997 DECEMBER 31, 1997 DECEMBER 31, 1996
---------------- ---------------- ----------------- -----------------
(unaudited) (unaudited) (audited) (audited)

Statements of Operations Data:
Revenues.......................... $ 12,977 $ 6,715 $ 16,826 $ 9,705
Income Before Extraordinary Item.. $ 9,164 $ 1,248 $ 6,074 $ 3,557
Net Income........................ $ 8,907 $ 1,248 $ 6,004 $ 2,425

Supplemental Data:
Funds From Operations(1).......... $ 16,825 $ 8,718 $ 20,939 $ 12,563

IPT Common Shares Outstanding..... 19,427,760 15,501,487 18,573,151 11,168,036
IPLP Units Outstanding............ 9,934,476 8,399,499 9,415,947 8,399,499
----------- ----------- ---------- ----------
IPT Common Shares and IPLP
Units Outstanding(2).......... 29,362,236 23,900,986 27,989,098 19,567,535
========== ========== ========== ==========

Balance Sheets Data:
Cash.............................. $ 14,639 $ 35,520 $ 37,432 $ 4,928
Investments in IPT Partnerships(3) $ 192,832 $ 124,951 $ 159,469 $ 118,741
Long-Term Debt.................... $ 21,951 $ 19,950 $ 19,300 $ 19,730
Shareholders' Equity(4)........... $ 212,697 $ 163,466 $ 200,659 $ 121,068

(1) Funds from Operations represent income or loss from real estate operations,
which is net income or loss in accordance with GAAP, excluding gains or
losses from debt restructuring or sales of property, plus depreciation and
provision for impairment.
(2) Assumes all outstanding IPLP units are exchanged for IPT Common Shares.
(3) As of June 30, 1998, represented IPT's investment in 41 of the 124 IPT
Partnerships which IPT accounts for using the equity method. Of the
remaining 83 IPT Partnerships, IPT accounts for 81 using the cost method
and two using the consolidation method.
(4) Includes Insignia's minority interest in IPLP.

Insignia. Insignia is a fully integrated real estate services
organization. Insignia is the largest manager of multi-family residential
properties in the United States and is among the largest managers of commercial
properties. Insignia's real estate services include property management,
providing all of the day-to-day services necessary to operate a property,
whether residential or commercial; asset management, including long-term
financial planning, monitoring and implementing capital improvement plans, and
development and execution of refinancings and dispositions; real estate leasing
and brokerage; maintenance and construction services; marketing and
advertising; investor reporting and accounting; and investment banking,
including assistance in workouts and restructurings, mergers and acquisitions,
and debt and equity securitizations.

Insignia provides property and/or asset management services for
approximately 3,800 properties, which include approximately 272,000 residential
units (including cooperative and condominium units), and in excess of 208
million square feet of retail, commercial and industrial space, located in over
500 cities in 48 states, Italy, the United Kingdom and Germany. Insignia
currently provides partnership administration services to approximately 900
limited partnerships having approximately 350,000 limited partners. Insignia is
a public company whose stock is traded on the New York Stock Exchange under the
symbol IFS.

On March 17, 1998, Insignia and Apartment Investment and Management
Company, a Maryland corporation ("AIMCO"), entered into a definitive merger
agreement (as amended and restated, the "AIMCO Merger Agreement"), pursuant to
which substantially all of Insignia's residential real estate operations and
ownership interests, including its interests in IPT and IPLP, are to be merged
with and into AIMCO, with AIMCO as the surviving corporation (the "AIMCO
Merger"). AIMCO is a public REIT whose Class A shares trade on the New York
Stock Exchange under the symbol AIV. The XXXXX Xxxxxx is expected to close in
early October 1998.

Assuming the AIMCO Merger is consummated, AIMCO will succeed to
Insignia's ownership of IPT and IPLP, and thus IPT (and the Partnership) will
thereafter be controlled by AIMCO. In addition, AIMCO is required pursuant to
the AIMCO Merger Agreement to acquire all of the outstanding shares of IPT not
owned by Insignia by causing IPT to merge with and into AIMCO (or a subsidiary
of AIMCO) as soon as practicable after the consummation of the AIMCO Merger, in
which event IPT would cease to exist as a separate entity and AIMCO would
effectively own all of the Units acquired by the Purchaser pursuant to the
Offer.

Insignia is subject to the information and reporting requirements of
the Exchange Act and in accordance therewith is required to file periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Certain information, as of
particular dates, concerning Insignia's business, principal properties, capital
structure, material pending legal proceedings, operating results, financial
condition, directors and officers (including their remuneration and stock
options granted to them), the principal holders of Insignia's securities, any
material interests of such persons in transactions with Insignia and certain
other matters is required to be disclosed in proxy statements and annual
reports distributed to Insignia's shareholders and filed with the Commission.
Such reports, proxy statements and other information may be inspected and
copied at the Commission's public reference facilities and should also be
available for inspection in the same manner as set forth with respect to the
Partnership in Section 9.

Insignia's principal executive offices are located at Xxx Xxxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, and its telephone number is
(000) 000-0000. For certain information concerning the directors and executive
officers of Insignia, see Schedule III to this Offer to Purchase.

Set forth below is certain consolidated financial information with
respect to Insignia and its consolidated subsidiaries for its fiscal years
ended December 31, 1997, 1996 and 1995 and the six-month periods ended June 30,
1998 and 1997. More comprehensive financial and other information is included
in Insignia's Annual Report on Form 10-K for the year ended December 31, 1997
(including management's discussion and analysis of financial condition and
results of operations) and in other reports and documents filed by Insignia
with the Commission. The financial information set forth below is qualified in
its entirety by reference to such reports and documents filed with the
Commission and the financial statements and related notes contained therein.
These reports and other documents may be examined and copies thereof may be
obtained in the manner set forth above.

INSIGNIA FINANCIAL GROUP, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except per share data)

SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
------------------------- -------------------------------------
1998 1997 1997 1996 1995
----------- ------------ ------------ ------------ ----------
(unaudited)

Statements of Operations Data:
Total Revenues.................................. $ 281,254 $ 154,527 $ 400,843 $ 227,074 $ 123,032
Income Before Taxes and Extraordinary Item...... $ 12,134 $ 7,630 $ 17,055 $ 14,946 $ 10,093
Net Income...................................... $ 6,674 $ 4,578 $ 10,233 $ 8,564 $ 5,806
Earnings Per Share.............................. $ 0.19 $ 0.14 $ 0.32 $ 0.26 $ 0.20

AS OF AS OF
JUNE 30, DECEMBER 31,
------------------------- -------------------------------------
1998 1997 1997 1996 1995
----------- ------------ ------------ ------------ ----------
(unaudited)
Balance Sheets Data:
Cash and Cash Equivalents....................... $ 57,807 $ 88,847 $ 88,847 $ 54,614 $ 49,846
Receivables..................................... $ 147,569 $ 122,180 $ 122,180 $ 46,040 $ 26,445
Total Assets................................ $ 954,189 $ 800,223 $ 800,223 $ 492,402 $ 245,409
Accounts Payable................................ $ 16,205 $ 13,705 $ 13,705 $ 1,711 $ 1,497
Commissions Payable............................. $ 54,467 $ 51,285 $ 51,285 $ 18,736 $ 602
Accrued and Sundry Liabilities.................. $ 105,658 $ 102,009 $ 102,009 $ 40,741 $ 25,619
Long-Term Debt.................................. $ 289,335 $ 189,704 $ 189,704 $ 69,140 $ 42,996
Total Liabilities........................... $ 465,665 $ 356,703 $ 356,703 $ 130,328 $ 70,714
Redeemable Convertible Preferred Stock.......... -- -- -- -- $ 15,000
Redeemable Convertible Preferred Securities
of Subsidiary Trust........................... $ 144,210 $ 144,065 $ 144,065 $ 144,169 --
Minority Interest in Consolidated Subsidiaries.. $ 66,484 $ 61,546 $ 61,546 -- $ 2,682
Shareholders' Equity........................ $ 277,830 $ 237,909 $ 237,909 $ 217,905 $ 157,013

Except as otherwise set forth herein, none of the Purchaser (which is
an affiliate of the General Partner), IPLP, IPT, Insignia or, to the best of
the Purchaser's knowledge, any of the persons listed on Schedules I, II or III
hereto, or any affiliate of the foregoing, (i) beneficially owns or has a right
to acquire any Units, (ii) has effected any transaction in the Units in the
last 60 days, or (iii) has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Partnership, including, but not limited to, contracts, arrangements,
understandings or relationships concerning the transfer or voting thereof,
joint ventures, loan or option arrangements, puts or calls, guarantees of
loans, guarantees against loss or the giving or withholding of proxies. Xxxxxx
X. Xxxxxx, who is the Chairman of the Board, Chief Executive Officer and
President of Insignia and a trustee of IPT, beneficially owns approximately 18%
of Insignia's outstanding common stock and, as a result, may be deemed to
beneficially own the Units owned by IPLP.

SECTION 12. SOURCE OF FUNDS. The Purchaser (which is an affiliate of
the General Partner) expects that approximately $1,000,000 will be required to
purchase 11,500 Units, if tendered, and to pay related fees and expenses. The
Purchaser (which is an affiliate of the General Partner) expects to obtain all
of those funds from IPLP, which in turn intends to use its cash on hand and
borrowings from its credit facility. The Purchaser has not conditioned the
Offer on obtaining financing.

The following is a summary description of the existing credit facility
(the "Facility") provided for the benefit of IPLP pursuant to the Credit
Agreement, dated as of December 30, 1997 (the "Credit Agreement"), among IPLP,
as borrower, Xxxxxx Commercial Paper, Inc., as syndication agent, First Union
National Bank, as administrative agent and the lenders from time to time
parties thereto (the "Lenders"). This summary description does not purport to
be complete and is qualified in its entirety by reference to the Credit
Agreement, a copy of

which has been filed as an exhibit to the Purchaser's Tender Offer Statement on
Schedule 14D-1 filed with the Commission.

Pursuant to the Credit Agreement, the Lenders have made available to
IPLP a revolving credit facility of up to $50 million at any one time
outstanding. Loans under the Facility (the "Loans") may be utilized to finance
certain permitted investments and refinance certain investments made prior to
the date of the Credit Agreement.
The Facility matures in a single installment on December 30, 2000.

Loans bear interest, at IPLP's election, (i) at a rate equal to the
higher of (a) the rate announced from time to time by First Union National Bank
as its base lending rate or (b) the daily effective federal funds rate as
quoted by First Union National Bank; or (ii) at rates based on the London
interbank offered rate, as adjusted for certain reserve and other requirements
applicable to lenders, for one-, two-, three- or six-month periods plus an
interest margin of 2.50%. As of the date hereof, IPT has $30 million of
outstanding indebtedness under the Facility.

IPT is obligated to pay a commitment fee at a rate of 0.25% per annum
on the undrawn portion of the Facility. Such commitment fee is payable
quarterly in arrears and calculated based on the actual number of days elapsed
over a 365-day year.

The Loans are subject to mandatory prepayment only to the extent that
the aggregate outstanding principal amount of the Loans on any day exceeds the
amount of the Facility then in effect. Voluntary prepayments of the Loans and
voluntary reductions of the Facility are permitted, in whole or in part, at the
option of IPLP in minimum principal amounts, without premium or penalty,
subject to reimbursement of certain of the Lenders' costs under certain
conditions.

IPLP's obligations under the Facility have been guaranteed by IPT and
such guaranty is secured by a first priority pledge of and security interest in
the capital stock or other equity interests held by IPT in each of the
subsidiaries of IPT which directly or indirectly owns or controls the general
partner interest (including an interest in the General Partner) in any Real
Estate Entity (as defined below) in which IPLP directly or indirectly owns a
limited partner interest (including the Partnership). In addition, the Facility
is secured by a first priority pledge of and security interest in all limited
partnership interests from time to time owned by IPLP and the equity interests
from time to time held by IPLP in any subsidiary of IPLP which itself owns
limited partnership interests. The Credit Agreement defines a "Real Estate
Entity" as any limited partnership, limited liability company, corporation or
other entity which has as its principal business the ownership of real property
or debt secured by real property. Thus, the IPT Partnerships (including the
Partnership) constitute Real Estate Entities for purposes of the Credit
Agreement.

The Facility contains representations and warranties, conditions
precedent, covenants, events of default and other provisions customarily found
in similar transactions.

SECTION 13. BACKGROUND OF THE OFFER.

Affiliation With the General Partner. Pursuant to an agreement dated
July 14, 1994, the General Partner replaced VMS Staged Equity II, Inc. as the
general partner of the Partnership. The substitution of MAERIL, Inc. as general
partner was finalized during the second quarter of 1996. The General Partner is
an affiliate of Insignia and was formerly a wholly-owned subsidiary of MAE GP
Corporation ("MAE GP"). Effective March 7, 1998, MAE GP was merged with and
into IPT, with IPT being the surviving entity.

Determination of Purchase Price. In establishing the Purchase Price,
the Purchaser (which is an affiliate of the General Partner) reviewed certain
publicly available information and certain information made available to it by
the General Partner and its other affiliates, including among other things: (i)
the Limited Partnership Agreement, as amended to date; (ii) the Partnership's
Annual Report on Form 10-KSB for the year ended December 31, 1997 and the
Partnership's Quarterly Report on Form 10-QSB for the period ended June 30,
1998; (iii) unaudited results of operations of the Partnership's properties for
the period since the beginning of the Partnership's current fiscal year and to
date in 1998; (iv) the operating budgets prepared by I/ESG with respect to

the Partnership's properties for the year ending December 31, 1998; and (v)
other information obtained by I/ESG, Insignia and other affiliates in their
capacities as providers of property management, asset management and
partnership administration services to the Partnership. The Purchaser's
determination of the Purchase Price was based on its review and analysis of the
foregoing information, the other financial information and analyses concerning
the Partnership summarized below. In determining the Purchase Price, the
Purchaser did not rely upon any material, non-public information concerning the
Partnership not summarized below or elsewhere in this Offer to Purchase.

Trading History of Units. Secondary market sales activity for the
Units, including privately negotiated sales, has been limited and sporadic.
According to information obtained from the General Partner, from July 1, 1996
to June 30, 1998 an aggregate of 165 Units (representing less than 1% of the
total outstanding Units) was transferred in sale transactions. Set forth in the
table below are the high and low sales prices of Units for the quarterly
periods from July 1, 1996 to June 30, 1998, as reported by the General Partner
and by The Partnership Spectrum, which is an independent, third-party source.
The gross sales prices reported by The Partnership Spectrum do not necessarily
reflect the net sales proceeds received by sellers of Units, which typically
are reduced by commissions and other secondary market transaction costs to
amounts less than the reported prices; thus the Purchaser does not know whether
the information compiled by The Partnership Spectrum is accurate or complete.
The transfer paperwork submitted to the General Partner often does not include
the requested price information or contains conflicting information as to the
actual sales price; accordingly, Limited Partners should not rely upon this
information as being completely accurate.

VMS INVESTORS FIRST-STAGED EQUITY X.X. XX
REPORTED SALES PRICES OF PARTNERSHIP UNITS

AS REPORTED BY AS REPORTED BY
THE GENERAL PARTNER(A) THE PARTNERSHIP SPECTRUM(B)
------------------------------ -------------------------------
LOW SALES HIGH SALES LOW SALES HIGH SALES
PRICE PRICE PRICE PRICE
PER UNIT PER UNIT PER UNIT PER UNIT
------------- -------------- ------------- ---------------

Fiscal Year Ended December 31, 1998:
Second Quarter.................................... $21 $34 (d) (d)
First Quarter..................................... 48 48 (d) (d)
Fiscal Year Ended December 31, 1997:
Fourth Quarter.................................... 44 45 (d) (d)
Third Quarter ................................... (c) (c) $55 $64
Second Quarter.................................... 30 30 50 57
First Quarter .................................... 18 40 50 50
Fiscal Year Ended December 31, 1996:
Fourth Quarter ................................... (c) (c) 46 50
Third Quarter..................................... (c) (c) (d) (d)

(a) Although the General Partner requests and records information on the
prices at which Units are sold, it does not regularly receive or maintain
information regarding the bid or asked quotations of secondary market
makers, if any. The General Partner processes transfers of Units only 12
times per year - on the first day of each month. The prices in the table
are based solely on information provided to the General Partner by sellers
and buyers of Units transferred in sale transactions (i.e., excluding
transactions believed to result from the death of a Limited Partner,
rollover to an IRA account, establishment of a trust, trustee to trustee
transfers, termination of a benefit plan, distributions from a qualified
or non-qualified plan, uniform gifts, abandonment of Units or similar
nonsale transactions).
(b) The gross sales prices reported by The Partnership Spectrum do not
necessarily reflect the net sales proceeds received by sellers of Units,
which typically are reduced by commissions and other secondary market
transaction costs to amounts less than the reported prices. The Purchaser
(which is an affiliate of the General Partner) does not know whether the
information compiled by The Partnership Spectrum is accurate or complete.
(c) No Units were reported by the General Partner as having been sold during
the quarter.
(d) No Units were reported by The Partnership Spectrum as having been sold
during the quarter.

The Purchaser (which is an affiliate of the General Partner) believes
that, although secondary market sales information probably is not a reliable
measure of value because of the limited and inefficient nature of the market
for Units, this information may be relevant to a Limited Partner's decision as
to whether to tender its Units pursuant to the Offer. At present, privately
negotiated sales and sales through intermediaries (e.g., through the trading
system operated by American Partnership Board, Inc., 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 the Offer) because the Units
are not listed or traded on any exchange or quoted on NASDAQ.

General Partner's Estimate of Net Asset Value. An affiliate of the
General Partner prepared an estimate of the Partnership's net asset value per
Unit in connection with an offer to purchase up to 4.9% of the outstanding
Units commenced by a party unaffiliated with the Purchaser, IPLP, IPT or
Insignia in September 1998. That estimate of the Partnership's net asset value
per Unit as of June 30, 1998 was $86. The net asset value estimate prepared by
the General Partner's affiliate values the Partnership's properties at zero and
thus reflects the estimated value of the Partnership's net current assets
(which consist principally of cash) as of June 30, 1998. The General Partner's
affiliate values the Partnership's properties at zero because the outstanding
mortgage debt of $9,011,000 at June 30, 1998 significantly exceeds such
affiliate's estimate of the aggregate value of the Partnership's properties
($6,231,000 as of June 30, 1998), and the General Partner expects that the
lender will foreclose upon the properties sometime during the next six months.
The net asset value estimate prepared by the General Partner's affiliate does
not take into account costs associated with winding up the Partnership.
Accordingly, the Purchaser does not believe that such affiliate's net asset
value estimate should be viewed as representative of the amount a Limited
Partner can realistically expect to obtain on a sale of a Unit or as a result
of a liquidation of the Partnership in the near term.

Purchaser's Estimate of Gross Real Estate Value. In estimating the
aggregate value of the Partnership's properties, the Purchaser utilized the
capitalization of income approach for the Partnership's properties. Neither the
Purchaser nor any of its affiliates prepared any estimates of the values of the
Partnership's properties based upon any other valuation method.

The following is a description of the methodology employed by the
Purchaser in preparing such estimates of the values of the properties owned by
the Partnership (as used below, "net operating income" is calculated before
depreciation, amortization, debt service payments and certain capital
expenditure items):

CENTINELLA I. In estimating the value of this property, the Purchaser
reviewed the income ($368,823) generated by the property for the six months
ended June 30, 1998 (comprised of $321,241 of gross rental income and $47,582
of other income), and then deducted from this amount the total operating
expenses of the property for the six months ($118,914), resulting in the
Purchaser's estimate of net operating income for the six months ($249,909). The
Purchaser then annualized this amount, resulting in estimated annual net
operating income of $499,818, and then decreased that annualized net operating
income amount by $200,000, representing the Purchaser's estimate of the
adjustment that would be imputed by a third party purchaser in underwriting the
operating expenses, including normal replacement reserves, and to reflect
rental revenues from current leases in effect on the property for valuation
purposes. The Purchaser then capitalized that estimated adjusted net operating
income amount ($299,818) at an 11.5% capitalization rate, resulting in an
estimated gross property value of $2,607,113.

CENTINELLA II. In estimating the value of this property, the Purchaser
reviewed the income ($763,559) generated by the property for the six months
ended June 30, 1998 (comprised of $751,797 of gross rental income and $11,762
of other income), and then deducted from this amount the total operating
expenses of the property for the six months ($223,370), resulting in the
Purchaser's estimate of net operating income for the six months ($540,189). The
Purchaser then annualized this amount, resulting in estimated annual net
operating income of $1,080,378, and then decreased that annualized net
operating income amount by $600,000, representing the Purchaser's estimate of
the adjustment that would be imputed by a third party purchaser in underwriting
the operating expenses, including normal replacement reserves, and to reflect
rental revenues from current leases in effect on the property for valuation
purposes. The Purchaser then capitalized that estimated adjusted net operating
income amount ($480,378) at a 12.5% capitalization rate, resulting in an
estimated gross property value of $3,843,000.

Based on the individual estimates of the gross values of the
Partnership's properties described above, the Purchaser estimated that the
current aggregate gross real estate value is $6,450,113 (the "Gross Real Estate
Value Estimate"). The property-specific capitalization rates used by the
Purchaser in the valuation estimates described above were based upon the
Purchaser's, IPT's and Insignia's general knowledge of the revenues and
expenses associated with operating commercial properties in the markets in
which the Partnership's properties are located, their general knowledge of
property values in those markets and their experience in the real estate market
in general.

The Gross Real Estate Value Estimate does not take into account (i)
the debt encumbering the Partnership's properties or the other liabilities of
the Partnership, (ii) cash and other assets held by the Partnership, (iii) real
estate transaction costs that would be incurred on a sale of the Partnership's
properties, such as brokerage commissions and other selling and closing
expenses, (iv) timing considerations or (v) costs associated with winding up
the Partnership. For this reason, the Purchaser considers the Gross Real Estate
Value Estimate to be less meaningful in evaluating the Purchase Price offered
by the Purchaser than its pro forma estimate of the net liquidation value per
Unit described below.

Purchaser's Pro Forma Estimate of Net Liquidation Value per Unit. The
Purchaser made a pro forma calculation of the amount each Limited Partner might
receive in a theoretical orderly liquidation of the Partnership (which may not
be realistically possible, particularly in the near term, due to real estate
market conditions, the general difficulty of disposing of real estate in a
short period of time, and other general economic factors), based on the Gross
Real Estate Value Estimate described above and the other considerations
described below.

In estimating the pro forma net liquidation value per Unit, the
Purchaser valued the Partnership's properties at zero because the debt
($9,011,000 as of June 30, 1998) significantly exceeds both the Purchaser's
Gross Real Estate Value Estimate ($6,450,113 as of June 30, 1998) and the
estimate of the aggregate value of the Partnership's properties prepared by the
General Partner's affiliate ($6,231,000 as of June 30, 1998). Therefore, the
Purchaser added the amounts of cash, accounts receivable and escrow deposits
shown on the Partnership's unaudited balance sheet at June 30, 1998
($2,461,000) (excluding the amount of restricted escrows which upon foreclosure
would be payable to the lender), and subtracted all other liabilities shown on
that balance sheet ($192,000). The result, $2,269,000, represents the
Purchaser's pro forma estimate of the aggregate net liquidation proceeds
(before provision for the costs described in the following sentence) which
could be realized on an orderly liquidation of the Partnership, based on the
assumptions implicit in the calculations described above. The Purchaser did
not, however, deduct any amounts in respect of the legal and other costs which
the Purchaser expects would be incurred in a liquidation and winding up the
Partnership because of the difficulty of estimating those amounts.

To complete its pro forma estimate of the amount of the theoretical
liquidation proceeds that would be distributable per Unit, the Purchaser
divided the estimated net liquidation proceeds of $2,269,000 by the 25,186
Units reported as outstanding by the General Partner as of September 1, 1998.
The resulting estimated pro forma liquidation value was $90.09 per Unit (the
"Estimated Liquidation Value"), before provision for the legal and other costs
of liquidating the Partnership described in the last sentence of the preceding
paragraph.

The Purchaser's pro forma liquidation analysis described above is
merely theoretical and does not itself reflect the value of the Units because
there is no assurance that any such liquidation in fact will occur as expected.
Therefore, the Purchaser (which is an affiliate of the General Partner)
believes the actual current value of the Units is substantially less than its
estimate of the Estimated Liquidation Value. Conversely, there is a substantial
possibility that the per-Unit value realized in an orderly liquidation could be
greater than the Estimated Liquidation Value. Furthermore, the analysis
described above is based on the assumption that a liquidation will occur in the
near term, which may not be correct. Accordingly, this analysis should be
viewed merely as indicative of the Purchaser's approach to valuing Units and
not as any way predictive of the likely result of any future transactions.

SECTION 14. CONDITIONS OF THE OFFER. Notwithstanding any other term of
the Offer, the Purchaser (which is an affiliate of the General Partner) will
not be required to accept for payment or to pay for any Units tendered if all
authorizations, consents, orders or approvals of, or declarations or filings
with, or expirations of waiting periods imposed by, any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign, necessary for the consummation of the transactions
contemplated by the Offer shall not have been filed, occurred or been obtained
prior to the Expiration Date. Furthermore, notwithstanding any other term of
the Offer and in addition to the Purchaser's right to withdraw the Offer at any
time before the Expiration Date, the Purchaser (which is an affiliate of the
General Partner) will not be required to accept for payment or pay for any
Units not theretofore accepted for payment or paid for and may terminate or
amend the Offer as to such Units if, at any time on or after the date of the
Offer and before the Expiration Date, any of the following conditions exists:

(a) a preliminary or permanent injunction or other order of any
federal or state court, government or governmental authority or agency shall
have been issued and shall remain in effect which (i) makes illegal, delays or
otherwise directly or indirectly restrains or prohibits the making of the Offer
or the acceptance for payment, purchase of or payment for any Units by the
Purchaser (which is an affiliate of the General Partner), (ii) imposes or
confirms limitations on the ability of the Purchaser effectively to exercise
full rights of ownership of any Units, including without limitation the right
to vote any Units acquired by the Purchaser pursuant to the Offer or otherwise
on all matters properly presented to the Partnership's Limited Partners, (iii)
requires divestiture by the Purchaser of any Units, (iv) causes any material
diminution of the benefits to be derived by the Purchaser as a result of the
transactions contemplated by the Offer, or (v) might materially adversely
affect the business, properties, assets, liabilities, financial condition,
operations, results of operations or prospects of the Purchaser or the
Partnership;

(b) there shall be any action taken, or any statute, rule, regulation
or order proposed, enacted, enforced, promulgated, issued or deemed applicable
to the Offer by any federal or state court, government or governmental
authority or agency, which might, directly or indirectly, result in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;

(c) any change or development shall have occurred or been threatened
since the date of the Offer to Purchase, in the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of the Partnership, which is or may be materially adverse to the
Partnership, or the Purchaser (which is an affiliate of the General Partner)
shall have become aware of any fact that does or may have a material adverse
effect on the value of the Units;

(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any limitation by any governmental authority on, or other
event which might affect, the extension of credit by lending institutions or
result in any imposition of currency controls in the United States, (iv) a
commencement of a war or armed hostilities or other national or international
calamity directly or indirectly involving the United States, (v) a material
change in United States or other currency exchange rates or a suspension of, or
imposition of a limitation on, the markets thereof, or (vi) in the case of any
of the foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof; or

(e) it shall have been publicly disclosed or the Purchaser (which is
an affiliate of the General Partner) shall have otherwise learned that (i) more
than ten percent of the outstanding Units have been or are proposed to be
acquired by another person (including a "group" within the meaning of Section
13(d)(3) of the Exchange Act), or (ii) any person or group that prior to such
date had filed a Statement with the Commission pursuant to Section 13(d) or (g)
of the Exchange Act has increased or proposes to increase the number of Units
beneficially owned by such person or group as disclosed in such Statement by
two percent or more of the outstanding Units.

The foregoing conditions are for the sole benefit of the Purchaser
(which is an affiliate of the General Partner) and may be asserted by the
Purchaser regardless of the circumstances giving rise to such conditions or may
be waived by the Purchaser in whole or in part at any time and from time to
time in its sole discretion. Any

determination by the Purchaser (which is an affiliate of the General Partner)
concerning the events described above will be final and binding upon all
parties.

SECTION 15. CERTAIN LEGAL MATTERS.

General. The Purchaser (which is an affiliate of the General Partner)
is not aware of any filings, approvals or other actions by any domestic or
foreign governmental or administrative agency that would be required prior to
the acquisition of Units by the Purchaser (which is an affiliate of the General
Partner) pursuant to the Offer, other than the filing of a Tender Offer
Statement on Schedule 14D-1 with the Commission (which has already been filed)
and any required amendments thereto. Should any such approval or other action
be required, it is the Purchaser's present intention that such additional
approval or action would be sought. Although there is no present intent to
delay the purchase of Units tendered pursuant to the Offer pending receipt of
any such additional approval or the taking of any such action, there can be no
assurance that any such additional approval or action, if needed, would be
obtained without substantial conditions or that adverse consequences might not
result to the Partnership's business, or that certain parts of the
Partnership's business might not have to be disposed of or other substantial
conditions complied with in order to obtain such approval or action, any of
which could cause the Purchaser (which is an affiliate of the General Partner)
to elect to terminate the Offer without purchasing Units thereunder.

Antitrust. The Purchaser (which is an affiliate of the General
Partner) does not believe that the Xxxx-ScottRodino Antitrust Improvements Act
of 1976, as amended, is applicable to the acquisition of Units contemplated by
the Offer.

Margin Requirements. The Units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, those regulations generally are not applicable to the Offer.

SECTION 16. FEES AND EXPENSES. Except as set forth in this Section 16,
the Purchaser (which is an affiliate of the General Partner) will not pay any
fees or commissions to any broker, dealer or other person for soliciting
tenders of Units pursuant to the Offer. The Purchaser (which is an affiliate of
the General Partner) has retained Beacon Hill Partners, Inc. to act as
Information Agent and Xxxxxx Trust Company of New York to act as Depositary in
connection with the Offer. The Purchaser (which is an affiliate of the General
Partner) will pay the Information Agent and the Depositary reasonable and
customary compensation for their respective services in connection with the
Offer, plus reimbursement for out-of-pocket expenses, and has agreed to
indemnify the Information Agent and the Depositary against certain liabilities
and expenses in connection therewith, including liabilities under the federal
securities laws. The Purchaser (which is an affiliate of the General Partner)
will also pay all costs and expenses of printing and mailing the Offer and its
legal fees and expenses.

SECTION 17. MISCELLANEOUS. The Purchaser (which is an affiliate of the
General Partner) is not aware of any jurisdiction in which the making of the
Offer is not in compliance with applicable law. If the Purchaser (which is an
affiliate of the General Partner) becomes aware of any jurisdiction in which
the making of the Offer would not be in compliance with applicable law, the
Purchaser will make a good faith effort to comply with any such law. If, after
such good faith effort, the Purchaser (which is an affiliate of the General
Partner) cannot comply with any such law, the Offer will not be made to (nor
will tenders be accepted from or on behalf of) Limited Partners residing in
such jurisdiction. In those jurisdictions whose securities or blue sky laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Purchaser (which is an affiliate of the
General Partner) by one or more registered brokers or dealers licensed under
the laws of that jurisdiction.

No person has been authorized to give any information or to make any
representation on behalf of the Purchaser (which is an affiliate of the General
Partner) not contained in this Offer to Purchase or in the Assignment of
Partnership Interest and, if given or made, such information or representation
must not be relied upon as having been authorized.

The Purchaser (which is an affiliate of the General Partner), IPLP,
IPT and Insignia have filed with the Commission a Tender Offer Statement on
Schedule 14D-1, pursuant to Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to the Offer, and may file
amendments thereto. The Schedule 14D-1 and any amendments thereto, including
exhibits, may be inspected and copies may be obtained at the same places and in
the same manner as set forth in Section 9 (except that they will not be
available at the regional offices of the Commission).

XXXXXX RIVER PROPERTIES, L.L.C.

SEPTEMBER 29, 1998

SCHEDULE I

INFORMATION REGARDING THE MANAGERS OF THE PURCHASER

Set forth in the table below are the name and the present principal occupations
or employment and the name, principal business and address of any corporation
or other organization in which such occupation or employment is conducted, and
the five-year employment history of each of the managers of the Purchaser. Each
person identified below is employed by Xxxxxxxx and is a United States citizen.
The principal business address of the Purchaser and, unless otherwise
indicated, the business address of each person identified below, is One
Insignia Financial Plaza, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000.

PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------

Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx has been a Manager of the Purchaser since its inception in
375 Park Avenue July 1998. For additional information regarding Xx. Xxxxx, see Schedule II.
Suite 3401
New York, NY 10152

Xxxx X. Xxxxxxx Xxxx X. Xxxxxxx has been a Manager of the Purchaser since July 1998. For
000 Xxxx Xxxxxx additional information regarding Xx. Xxxxxxx, see Schedule III.
New York, NY 10166

Xxxxxx Xxxxxx Xxxxxx Xxxxxx has been a Manager of the Purchaser since its inception in July
1998. For additional information regarding Xx. Xxxxxx, see Schedules II and
III.

S-1

SCHEDULE II

INFORMATION REGARDING THE
TRUSTEES AND EXECUTIVE OFFICERS OF IPT

Set forth in the table below are the name and the present principal occupations
or employment and the name, principal business and address of any corporation
or other organization in which such occupation or employment is conducted, and
the five-year employment history of each of the trustees and executive officers
of IPT. Each person identified below is employed by Xxxxxxxx and is a United
States citizen. The principal business address of IPT and, unless otherwise
indicated, the business address of each person identified below, is One
Insignia Financial Plaza, Greenville, South Carolina 29602. Trustees are
identified by an asterisk.

PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY

Xxxxxx X. Xxxxxx* Xxxxxx X. Xxxxxx has served as a Trustee of IPT and as Chairman
000 Xxxx Xxxxxx of the Board of Trustees and Chief Executive Officer of IPT since
Suite 3401 December 1996. For additional information regarding Xx. Xxxxxx,
New York, NY 10152 see Schedule III.

Xxxxx X. Xxxxx* Xxxxx X. Xxxxx has served as a Trustee of IPT since its inception
in May 1996, and has served as President and Director of IPT since
December 1996. For additional information regarding Xx. Xxxxx, see
Schedule III.

Xxxxx X. Xxxxxxxx* Xxxxx X. Xxxxxxxx has served as a Trustee of IPT since December
102 Woodmont Boulevard 1996. Xx. Xxxxxxxx has also served as an Executive Managing
Suite 400 Director of IPT since December 1996. For additional information
Nashville, TN 37205 regarding Xx. Xxxxxxxx, see Schedule III.

Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx has served as a Senior Vice President of IPT
000 Xxxx Xxxxxx since August 1997, and has served as Secretary of IPT since
Suite 3401 January 1998. From June until August 1997, Xx. Xxxxx served as
New York, NY 10152 a Vice President of IPT. Since April 1997, Xx. Xxxxx'x principal
occupation has been to serve as a Senior Vice President-Investment
Banking of Insignia. Prior to April 1997, Xx. Xxxxx'x principal
occupation was as an attorney with the law firm of Xxxxxx & Xxxxx,
New York, New York.

Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx has served as the Controller of IPT since August
1997. Since April 1995, Mr. Xxxxx' principal occupation has been
to serve as an accountant with Insignia. Prior to April 1995, Mr.
Xxxxx' principal occupation was as a senior auditor with the
accounting firm of Ernst & Young LLP.

Xxxxxxx X. Xxxxxxx, Xx. Xxxxxxx X. Xxxxxxx, Xx. has served as a Senior Vice President of
IPT since August 1997, and served as Vice President and Director
of Operations of IPT from December 1996 until August 1997.
Xx. Xxxxxxx'x principal employment has been with Insignia for
more than the past five years. From January 1994 to September
1997, Xx. Xxxxxxx served as Managing Director-- Partnership
Administration of Insignia.

S-2

PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY

Xxxxxx Xxxxxx Xxxxxx Xxxxxx has served as Vice President and Treasurer of IPT since
December 1996. Xx. Xxxxxx served as a Vice President of IPT from December
1996 until August 1997 and as Chief Financial Officer of IPT from May 1996
until December 1996. For additional information regarding Xx. Xxxxxx, see
Schedule III.

Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx has served as Chief Operating Officer of IPT since May 1997.
Since August 1994, Xx. Xxxxxx'x principal occupation has been to serve as President
of the various corporate general partners of partnerships controlled by Metropolitan
Asset Enhancement, L.P., which is an affiliate of Insignia.

S-3

SCHEDULE III

INFORMATION REGARDING THE
DIRECTORS AND EXECUTIVE OFFICERS OF INSIGNIA

Set forth in the table below are the name and the present principal occupations
or employment and the name, principal business and address of any corporation
or other organization in which such occupation or employment is conducted, and
the five-year employment history of each of the directors and executive
officers of Insignia. Unless otherwise indicated, each person identified below
is employed by Insignia and is a United States citizen. The principal business
address of Insignia and, unless otherwise indicated, the business address of
each person identified below, is One Insignia Financial Plaza, Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000. Directors are identified by an asterisk.

PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY

Xxxxxx X. Xxxxxx* Xxxxxx X. Xxxxxx has been a Director of Insignia since its inception in
000 Xxxx Xxxxxx July 1990. Xx. Xxxxxx has been Chairman and Chief Executive Officer
Suite 3401 of Insignia since January 1991 and President since May 1995. Mr.
New York, NY 10152 Xxxxxx has also been President of Metropolitan Asset Group, Ltd.
("MAG"), a real estate investment banking firm, since 1983.

Xxxxxx X. Xxxxxxx* Xxxxxx X. Xxxxxxx has been a Director of Insignia since May 1996. For
0000 Xxxxx Xxxxxx Xxxxx more than the past five years, Xx. Xxxxxxx'x principal occupation has
Santa Fe, NM 87501 been as a General Partner of First Security Company II, L.P., an
investment advisory firm.

Xxxxx X. Xxxxxx* Xxxxx X. Xxxxxx has been a Director of Insignia since August 1993. Mr.
000 Xxxx Xxxxxx Xxxxxx is the retired Chairman of the Board and Chief Executive Officer
New York, NY 10021 of Alexander's Inc., a real estate company. He also serves as a director
of Refac Technology Development Corporation, Noodle Kiddoodle, and
Containerways International Ltd.

Xxxxxx X. Xxxx* Xxxxxx X. Xxxx has been a Director of Insignia since August 1993.
000 Xxxx 00xx Xxxxxx Since February 1996, Xx. Xxxx has been a partner in the law firm of
New York, NY 10019 Akin, Gump, Xxxxxxx, Xxxxx & Xxxx, which represents Insignia and
certain of its affiliates from time to time. From January 1991 to
February 1996, Xx. Xxxx was a partner in the law firm LeBoeuf, Lamb,
Xxxxxx & XxxXxx.

Xxxxxxx X. Xxxxxxxx* Xxxxxxx X. Xxxxxxxx has been a Director of Insignia since August 1993.
000 Xxxx 00xx Xxxxxx For more than the past five years, Xx. Xxxxxxxx'x principal occupation
New York, NY 10022 has been as a self-employed consultant in the real estate business,
including ownership, management and lending.

Xxxxx X. Aston Xxxxx X. Aston's principal employment has been with Insignia for more
than the past five years. Xx. Xxxxx currently serves as Chief Financial
Officer of Insignia (since August 1996), with the Office of the Chairman
(since July 1994) and Executive Managing Director of Investment
Banking of Insignia (since January 1991).

Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx'x principal employment has been with Realty One, Inc.,
0000 Xxxxxxxx Xxxxx Xxxx. a wholly-owned subsidiary of Insignia ("Realty One"), for more than the
Cleveland, OH 44131 past five years. Xx. Xxxxx currently serves as Chairman and Chief
Executive Officer of Realty One (since October 1997).

S-4

PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY

Xxxxxxx X. Xxxxxxx Xx. Xxxxxxx currently serves as a Director and Chief Operating Officer of
0000 Xxxxxxxx Xxxxx Xxxx. Realty One (since October 1997). From 1994 to 1997, Xx. Xxxxxxx was
Cleveland, OH 44131 the President of Realty One. Prior to 1994, Xx. Xxxxxxx was the Chief
Financial Officer and Executive Vice President of Xxxxxxxx, Inc., a full
service advertising agency.

Xxxx X.X. Xxxxxxxxx Xxxx X.X. Xxxxxxxxx'x principal employment has been with Richard
Berkeley Square House Xxxxx for more than the past five years. Xx. Xxxxxxxxx currently serves
London W1X 6AN as a Managing Director of Insignia for Xxxxxxx Xxxxx (since Insignia's
England acquisition of Xxxxxxx Xxxxx in 1998) and has been a director of Xxxxxxx
Xxxxx since its inception in 1997. Xx. Xxxxxxxxx is a citizen of the United
Kingdom.

Xxxxxx X. Xxxxxx Xxxxxx Xxxxxx has been a Senior Vice President -- Human Resources of
Insignia since August 1997. Prior to August 1997, Xx. Xxxxxx'x
principal employment for more than the prior five years was as Director -- Human
Resources of E&Y Xxxxxxx Xxxxxxxxx Real Estate Group, New York, New York.

Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx'x principal employment has been with Xxxxxxx Xxxxx for
Berkeley Square House more than the past five years. Xx. Xxxxxxxx currently serves as Chief
London W1X 6AN Executive Officer of Xxxxxxx Xxxxx (since Insignia's acquisition of Xxxxxxx
Xxxxxxx Xxxxx in 1998). Xx. Xxxxxxxx is a citizen of the United Kingdom.

Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxxx'x principal employment has been with Insignia for
000 Xxxxxxxx Xxxxxxxxx more than the past five years. Xx. Xxxxxxxx currently serves as an
Suite 400 Executive Managing Director of Insignia (since July 1994) and as
Nashville, TN 37205 President of Insignia Financial Services, a division of Insignia (since July
1994).

Xxxx X. Xxxxxxx Xxxx X. Xxxxxxx has been General Counsel and Secretary of Insignia
000 Xxxx Xxxxxx since March 1998. Prior to that time, Xx. Xxxxxxx'x principal occupation
New York, NY 10166 was as a partner with the law firm of Nixon, Hargrave, Devans & Xxxxx,
LLP, New York, New York.

Xxxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx'x principal employment has been with Insignia for
000 Xxxx Xxxxxx more than the past five years. Xx. Xxxxxxxx currently serves as a
New York, NY 10166 Managing Director -- Investment Banking of Insignia (since July 1994).

Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx has been with the Office of the Chairman of Insignia
000 Xxxx Xxxxxx and has been Chairman of Insignia/ESG, Inc. since July 1996. Prior to
New York, NY 10166 July 1996, Xx. Xxxxxx'x principal employment for more than the prior
five years was as a founder and Chairman of Xxxxxx X. Xxxxxx
Company, Incorporated ("ESG"), a commercial property management and
brokerage firm located in New York, New York that was acquired by
Insignia in June 1996.

Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx'x principal employment has been with Insignia for
more than the past five years. Xx. Xxxxxxx currently serves as a Senior
Vice President of Insignia (since July 1994) and as Chief Information
Officer of Insignia (since January 1991).

S-5

PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY

Xxxxxx X.X. Xxxxxxx Xxxxxx Xxxxxxx'x principal employment has been with Xxxxxxx Xxxxx
Berkeley Square House Group Limited, a wholly-owned U.K. subsidiary of Insignia ("Xxxxxxx
Xxxxxx W1X 6AN Xxxxx"), for more than the past five years. Xx. Xxxxxxx currently serves
England as Chairman of Xxxxxxx Xxxxx (since Insignia's acquisition of Xxxxxxx Xxxxx
in 1998). Xx. Xxxxxxx is a citizen of the United Kingdom.

Xxxx Xxxxxxx Xxxx Xxxxxxx has been an Executive Managing Director of Insignia since
909 Third Avenue September 1995 and President of Insignia Residential Group since
New York, NY 10022 September 1997. Xx. Xxxxxxx has also served as President of Insignia
Management Services -- New York, Inc., a subsidiary of Insignia, since
September 1995. Prior to September 1995, Xx. Xxxxxxx'x principal
occupation was to serve as President and Chief Executive Officer of Xxxxxxx
Company, Inc., a residential property management firm located in New York,
New York which Insignia acquired in September 1995.

Xxxxxx Xxxx Xxxxxx Xxxx has been a Senior Vice President -- Finance of Insignia
since January 1997 and Controller of Insignia since June 1994. Prior to
June 1994, Xx. Xxxx was Senior Vice President and Controller of The
First Savings Bank, FSB located in Greenville, South Carolina.

Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx'x principal employment has been with Insignia for
more than the past five years. Xx. Xxxxxx currently serves as Chief
Operating Officer of Insignia Residential Group (since January 1997).

Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx has been a Managing Director of Insignia since
000 Xxxx Xxxxxx June 1996, President of Insignia Commercial Group since January 1997
New York, NY 10166 and President of Insignia/ESG, Inc. since June 1996. From February
1992 until July 1996, Xx. Xxxxxx'x principal employment was as President
of ESG. Xx. Xxxxxx currently serves as a Director of Liberty Property
Trust and Tower Realty, Inc.

Xxxxxx Xxxxxx Xxxxxx Xxxxxx'x principal employment has been with Insignia for more
than the past five years. Xx. Xxxxxx currently serves as Chief Operating
Officer (since August 1996) and Treasurer (since January 1992) of
Insignia. Xx. Xxxxxx has also served as the Chief Financial Officer and
Controller of MAG since September 1990.

S-6

SCHEDULE IV

IPT PARTNERSHIPS

Consolidated Capital Growth Fund
Consolidated Capital Institutional Properties
Consolidated Capital Institutional Properties/2
Consolidated Capital Institutional Properties/3
Consolidated Capital Properties III
Consolidated Capital Properties IV
Consolidated Capital Properties V
Consolidated Capital Properties VI
Johnstown/Consolidated Income Partners
Multi-Benefit Realty Fund 87-1
Shelter Properties I Limited Partnership
Shelter Properties II Limited Partnership
Shelter Properties III Limited Partnership
Shelter Properties IV Limited Partnership
Shelter Properties V Limited Partnership
Shelter Properties VI Limited Partnership
Shelter Properties VII Limited Partnership
National Property Investors III
National Property Investors 4
National Property Investors 5
National Property Investors 6
National Property Investors 7
National Property Investors 8
Century Properties Fund XIV
Century Properties Fund XV
Century Properties Fund XVI
Century Properties Fund XVII
Century Properties Fund XVIII
Century Properties Fund XIX
Century Properties Growth Fund XXII
Fox Strategic Housing Income Partners
Davidson Growth Plus, X.X.
Xxxxxxxx Diversified Real Estate II, X.X.
Xxxxxxxx Income Real Estate, L.P.
HCW Pension Real Estate Fund
Angeles Income Properties, Ltd. II
Angeles Income Properties, Ltd. IV
Angeles Income Properties, Ltd. 6
Angeles Opportunity Properties, Ltd.
Angeles Partners IX
Angeles Partners XII

S-7

Manually signed facsimile copies of the Assignment of Partnership
Interest will be accepted. The Assignment of Partnership Interest and any other
required documents should be sent or delivered by each Limited Partner or such
Limited Partner's broker, dealer, bank, trust company or other nominee to the
Depositary as set forth below.

The Depositary for the Offer is:

XXXXXX TRUST COMPANY OF NEW YORK

By Mail: By Facsimile: To Confirm: By Hand/Overnight Delivery:

Wall Street Station (000) 000-0000 (212) 701-0000 Xxxx Xxxxxx Plaza
P.O. Box 0000 00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000 Xxx Xxxx, Xxx Xxxx 00000

Questions and requests for assistance or for additional copies of this
Offer to Purchase and the Assignment of Partnership Interest may be directed to
the Information Agent at its telephone number and address listed below. You may
also contact your broker, dealer, bank, trust company or other nominee for
assistance concerning the Offer.

The Information Agent for the Offer is:

BEACON HILL PARTNERS, INC.

00 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000

(000) 000-0000
(Toll Free)

(000) 000-0000
(Call Collect)

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