Atlanta was the first market area chosen for our condo conversion strategy because the local apartment market had experienced one of the most severe downturns in the eastern United States. A combination of stagnant job growth, overbuilding, and a flight to mortgages had resulted in record high apartment vacancies and free rent concessions. Vacancy rates plus free rent had reached 20 to 30 percent for most properties. Local professionals were quoted as saying: "They never have seen it so bad." Many institutional investors had redlined Atlanta. Despite all this bad news, Atlanta is an important economic hub and has one of the largest and most diverse economies in the East. We believed Atlanta would recover and its growth would exceed the national average.

Henderson Park is a well located ideal condominium conversion. We closed on the transaction August 27, 2003, have completed significant interior and exterior renovations, and are 90% sold. We assembled a first rate team in Atlanta headed by our local partner, Rob Johnston. Rob is President of First Communities, a full service property management firm in Atlanta. Like any local market partner we work with, Rob has a significant personal investment in the project and shares in the General Partner profit structure. While he has oversight responsibilities on the entire project, he is directly handling the property management and interior construction on the project.

Henderson Park Condominiums began selling in February of 2004. As of March 2005, we are close to 80% sold after two price increases.