11.9 of the Partnership  Agreement the General  Partners and/or their Affiliates
will return to the  Partnership an appropriate  amount of the  Acquisition  Fees
paid to them without interest. In addition,  the General Partners will receive a
Placement Fee from each Operating Partnership in connection with the Acquisition
by the Partnership of a Preferred Equity Investment therein. See note 4 above.

      (6) The  Partnership  will pay all  Acquisition  Expenses  not paid by the
Operating  Partnerships.  To the extent that Acquisition Expenses payable by the
Partnership  are less than 0.25% of Gross  Proceeds,  the General  Partners will
receive the difference.

      (7) The  Partnership  initially  expects  to  reserve  1.0%  of the  Gross
Proceeds  as a reserve  for  working  capital  ("Reserves").  In  addition,  the
Operating  Partnerships  are  expected  to  maintain  working  capital  reserves
independent  of those  maintained  by the  Partnership  to the  extent  that the
Special General  Partner and the Developer  determine that the same is necessary
or advisable. See "Investments Objectives and Policies--Interim  Investments and
Reserves."

                             MANAGEMENT COMPENSATION

      The  following  table sets forth the types and estimates of the amounts of
all  fees,  compensation,  income,  distributions  and other  payments  that the
General Partners and their Affiliates will or may receive in connection with the
business and operations of the Partnership and the Operating Partnerships.  Such
fees, compensation, income, distributions and other payments were not determined
by arm's length bargaining. See "Conflicts Of Interest."

<TABLE>
<CAPTION>

                                          Entity or Entities Receiving               Method of Determination
 Form of Compensation                     Compensation or Reimbursement            and Estimated Dollar Amount
 --------------------                     --------------------------------         ---------------------------

                                              OFFERING STAGE
<S>                                <C>                                         <C> 

 Selling Commissions ..............         Selling Agent, an Affiliate        7% of the aggregate purchase price of BUC$
                                            of Pru-Bache Properties            sold by the Partnership (assuming no volume
                                                                               discounts); actual amount depends upon 
                                                                               number of BUC$ sold; up to $4,050,200
                                                                               if maximum number of BUC$ is sold without
                                                                               any quantity discount. (1)

 Non-Accountable Expense Allowance..        General Partners (3)               The amount, if any, by which Organization 
                                                                               and Offering Expenses are less than 2.5% of
                                                                               Gross Proceeds; not determinable at this
                                                                               time. (2)

                                            ACQUISITION STAGE (4)

 Acquisition Fees ..................        General Partners (3)               4% of the Gross Proceeds in consideration of
                                                                               the services of the General Partners in
                                                                               selecting and evaluating Preferred Equity
                                                                               Investments for acquisition by the Partnership,
                                                                               negotiating the terms of the Partnership's
                                                                               acquisition of Preferred Equity Investment, and
                                                                               closing the acquisition of Preferred Equity
                                                                               Investments by the Partnership; up to $178,800 if the
                                                                               minimum sub scripton is sold and $2,314,400 if the
                                                                               maxmium subscription is sold. (5)

 Placement Fees ....................        General Partners (3)               An amount equal to up to 2% of the Gross Proceeds
                                                                               payable by the Operating Partnerships in
                                                                               reimbursement of expenses incurred and services
                                                                               performed by the General Partners in connection with
                                                                               the administration of the acquisition of Preferred
                                                                               Equity Investments, estimated to be $89,400 if the
                                                                               minimum subscription is sold and $1,157,200 if the
                                                                               maxmium subscription is sold.
</TABLE>

                                      -17-

<PAGE>



<TABLE>
<CAPTION>

                                                      
                                          Entity or Entities Receiving               Method of Determination
 Form of Compensation                     Compensation or Reimbursement            and Estimated Dollar Amount
 --------------------                     -----------------------------            ---------------------------  
<S>                                          <C>                                <C>
 Non-Accountable Acquisition Expense        General Partners (3)               An amount, if any, by which Acquisition Expenses
 Allowance .........................                                           paid by the Partnership are less than .25% of
                                                                               Gross Proceeds; not determin able at this time.

                                                OPERATIONAL STAGE (6)

 Participating Interest in Cash Flow        General Partners (3)               0.5% annually of the aggregate Invested Assets
                                                                               (see "Glossary"), payment of half of which for any
                                                                               year will be subordinated to the distribution to BUC$
                                                                               of Cash Available for Distribution for that year in
                                                                               an amount equal to 8% per annum on their Adjusted
                                                                               Contributions; estimated to be not more than $261,817
                                                                               per year if the maximum number of BUC$ is sold and
                                                                               sufficient Preferred Equity Investments are acquired
                                                                               to utilize the Gross Proceeds of such sale; any
                                                                               amount of such Distribution not made for any year
                                                                               will be deferred without interest and will be paid
                                                                               only out of Sale or Refinancing Proceeds after
                                                                               BUC$holders have received their Priority Return and a
                                                                               return of their Original Contributions.

 Share of Distributions of Operating        Special General Partner as         0.01% of all distributions by the Operating
 Cash Flow by the Operating                  Special Limited Partner of        Partnerships of operating cash flow from the
 Partnerships ......................        Operating Partnerships (3)         Properties for any fiscal year after distribution
                                                                               to the Partnership of amounts sufficient to satisfy
                                                                               its Preferred Equity Return with respect to such year
                                                                               and all prior years. Actual amounts depend upon the
                                                                               results of operations of the Properties and cannot be
                                                                               estimated at this time. See Allocations and
                                                                               Distributions."

 Distributive Share of Distributions        General Partners (3)               2% of all distributions by the Partnership of Cash   
 of Cash Available for Distribution                                            Available for Distribution for any year After payment
 by the Partnership ................                                           of the Participating Interest in Cash Flow; actual   
                                                                               amounts received depend upon the results of          
                                                                               operations of the Partnership and cannot be         
                                                                               estimated at this time. See "Allocations and         
                                                                               Distributions."

 Accountable Operating Expense              General Partners (3)               The lesser of (i) actual costs incurred in providing
 Reimbursement .....................                                           goods and materials acquired and services performed
                                                                               for the Partnership, or (ii) with respect to services
                                                                               performed for the Partnership, 90% of the amount that
                                                                               an independent third party would charge for such
                                                                               services.

                                                        18
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                          Entity or Entities Receiving               Method of Determination
 Form of Compensation                     Compensation or Reimbursement            and Estimated Dollar Amount
 --------------------                     --------------------------------         ---------------------------
<S>                                      <C>                                   <C>  
                                                  SALE OR REFINANCING STAGE

Subordinated Interest in                    General Partners and               Subordinated Interest in Disposition Proceeds be paid
Disposition Proceeds ...............         Affiliates (3)                    by the Partnership upon sale of a Property or
                                                                               Preferred Equity Investment if the General Partners
                                                                               or their Affiliates provide substantiai services in
                                                                               connection therewith, in an amount equal to the
                                                                               lesser of (i) 3% of the gross sales price, or (ii)
                                                                               one-half of the normal and competitive rate
                                                                               customarily charged by unaffiliated parties rendering
                                                                               similar services, in each case only after the
                                                                               BUC$holders have received an amount equal to their
                                                                               Adjusted Contributions plus payment of an annual
                                                                               cumulative simple interest return thereon of 6% (as
                                                                               such return may have been satisfied through prior
                                                                               distributions of Cash Available for Distribution).
                                                                               (7)


 Share of Proceeds of Sale or               Special General Partner as         0.01% of all distributions by each Operating
 Refinancing of Properties by the           Special Limited Partner of         Partnership of the net proceeds of the Sale or
 Operating Partnerships ............        Operating Partnerships (3)         or Refinancing of Properties after distribution to
                                                                               the Partnership of amounts of Sale or Refinancing
                                                                               Proceeds (i) sufficient to pay any unsatisfied
                                                                               portion of its Preferred Equity Return for the year
                                                                               of distribution and all prior years and (ii) equal in
                                                                               the aggregate to the amount of the Preferred Equity
                                                                               Investment; actual amounts depend upon the net
                                                                               proceeds of the Sale or Refinancing of Properties and
                                                                               other factors and are not determinable at this time.

 Distributive share of Sale and             General Partners (3)               2% of all distributions of Sale or Refinancing
 Refinancing Proceeds distributed                                              Proceeds by the Partnership until the BUC$holders
 by the Partnership ................                                           have received distributions of Sale or Refinancing
                                                                               Proceeds from the Partnership in an aggregate amount
                                                                               equal to (i) their Priority Return for any year not
                                                                               there tofore satisfied through the distribution by
                                                                               the Partnership to s of Cash Available for
                                                                               Distribution and prior distributions of Sale or
                                                                               Refinancing Proceeds and (ii) an amount equal to the
                                                                               aggregate Adjusted Contributions of the BUC$ holders;
                                                                               thereafter, 15% of such distributions of Sale or
                                                                               Refinancing Proceeds; actual amounts depend upon the
                                                                               net proceeds of the Sale or Refinancing of Properties
                                                                               and other factors and are not determinable at this
                                                                               time. See "Allocations and Distributions."
                                                                  19
</TABLE>




<PAGE>




      (1) The estimated amounts are based on the assumption that all of the BUC$
will be sold directly by the Selling Agent. In addition,  the  Partnership  will
reimburse the Selling Agent for certain accountable  expenses in connection with
the offering of BUC$. In no event will the total underwriting compensation to be
paid, including underwriting commissions,  sales commissions and public offering
expense reimbursements,  exceed 10% of the Gross Proceeds,  except that up to an
additional 0.5% of the Gross Proceeds may be paid in  reimbursement of bona fide
due diligence expenses.

      (2) A portion of the nonaccountable  expense allowance may be deemed to be
underwriting  compensation.  See Note 1 above. The General Partners and/or their
Affiliates will pay all  Organization  and Offering  Expenses of the Partnership
excluding  underwriting  and  sales  commissions  in excess of 2.5% of the Gross
Proceeds. See "Plan of Distribution."

      (3)  All  fees,   compensation   and  interests  in  Cash   Available  for
Distribution  and Sale or  Refinancing  Proceeds  will be allocated  between the
General Partners as they shall determine from time to time.

      (4) Pursuant to Section  15.8 of the  Partnership  Agreement,  the General
Partners must commit to Preferred  Equity  Investments a percentage of the Gross
Proceeds  equal to 82.5% of Gross  Proceeds.  In the  event  that the  Preferred
Equity Investments would otherwise be insufficient, the Acquisition Fees payable
by the Partnership  will be decreased by an amount necessary for compliance with
Section 15.8.

      (5)  Acquisition  Fees  will be  paid to The  General  Partners  or  their
Affiliates by the Partnership as proceeds from the offering are received without
regard  to  the  results  of  the  Partnership's  operations.  However,  if  The
Partnership  is  required  to return any  uninvested  Net  Proceeds  pursuant to
Section 11.9 of the  Partnership  Agreement,  The General  Partners and/or their
Affiliates  will  return  to  the  Partnership  an  appropriate  portion  of the
Acquisition Fees paid to Them without interest.

(6) It is expected that each Operating  Partnership will pay property management
fees which will be competitive for similar  services in the same geographic area
to a property  manager  that is not an Affiliate  of the General  Partners.  See
"Management of Properties."  In the unlikely event that the General  Partners or
their  Affiliates  provide  supervisory  property  management  services  for the
Partnership's  Properties,  they  will be  enticed  to  receive  a fee  which is
competitive for similar  services in the same geographic area, but not exceeding
SO of the annual Gross Revenues from the Properties.

(7)  The  General  Partners  or  their  Affiliates  are  entitled  to  receive a
Subordinated  Interest in Disposition Proceeds only on those sales in which such
entity participates and provides substantial services, including but not limited
to any one or more of the following: preparing a brochure or presentation on the
Property or Preferred Equity Investment to be sold, structuring the terms of the
sale transaction,  finding  prospective  purchasers and negotiating the sale. If
non-Affiliates  participate  in a sale,  the  subordination  requirement  of The
Partnership   Agreement   shall  apply  only  to  Affiliates   involved  in  the
transaction.  In addition,  the Partnership  Agreement limits the payment to all
parties  upon the sale of a  Property  to no more than 6% of the gross  sales of
such Property.

                                       20



<PAGE>




the General Partner shares in certain Partnership distributions and tax benefits
in a manner disproportionate to their capital contributions, the General Partner
is being compensated directly out of the plan's assets,  rather than Partnership
assets,  in exchange  for the  provisions  of services  to the plan,  i.e.,  for
establishing  the  Partnership  and making it available as an  investment to the
plan. If this were the case, then absent a specific exemption  applicable to the
transaction,  a prohibited  transaction  could be  determined  to have  occurred
between the investing  plan and the General  Partner.  Accordingly,  the General
Partners  will not  permit a plan to invest in the  Partnership  if any  General
Partner or an Affiliate thereof is a fiduciary of such plan.

     Based on the  foregoing,  and  because  BUC$ are  expected to be held by at
least 100 persons who are  independent of the Partnership and independent of one
another, counsel will render an opinion as of the date of the Prospectus that it
is more likely than not that the underlying  assets of the Partnership  will not
be considered to be plan assets for s,  the transactions  described in
this Prospectus that the Partnership  might enter into with the General Partners
or their Affiliates will not constitute  "prohibited  transactions" under ERISA,
and the receipt of any  Distribution  or tax allocation by the General  Partners
disproportionate to their capital contributions will not constitute  "prohibited
transactions."

                               DESCRIPTION OF BUC$

The BUC$ will  represent  all of the economic and virtually all of the ownership
rights  attributable  to Limited  Partnership  Interests  held by  Related  BUC$
Associates,  Inc., an Affiliate of the Related General Partner, which is serving
as the depositary for such Limited Partnership Interests and as Assignor Limited
Partner.  Each BUC will  represent a Limited  Partnership  Interest of $20. BUC$
will be issued in registered form only and will generally be freely transferable
(see below)  commencing 45 days after the Final Closing Date, unless the General
Partners,  in  their  discretion,  allow  earlier  transfers,  and  except  when
transfers  would be restricted  under federal or state  securities  laws. If the
General  Partners  believe that it is in the best  interest of the  Partnership,
they  intend  to apply to list the BUC$ for  trading  on  NASDAQ  or a  national
exchange.  There can be no  assurance  that the BUC$ will be listed or quoted or
that, if listed or quoted, a market in the BUC$ will develop.

     Subscribers for BUC$ in the Offering will become  assignees of the Assignor
Limited  Partner upon the closing of the sale of the BUC$  purchased by them. At
such closing, the $20 purchase price (less volume discounts, if any, and Selling
Commissions)  for  each  BUC  will  be  contributed  to the  Partnership  and by
amendment to the Partnership Agreement, the Assignor Limited Partner will become
a Limited Partner with respect to a corresponding  amount of Limited Partnership
Interests.  By operation of the Partnership  Agreement,  the Limited Partnership
Interests  thereby  acquired by the Assignor Limited Partner are assigned to the
subscribers for the BUC$ and the Assignor  Limited Partner  simultaneously  will
cause to be issued BUC$  registered in the names of the BUC$ purchasers or their
nominees.

     Although  under  Delaware law, an assignee,  unlike a  substituted  limited
partner,  is not  entitled  to all the  statutory  rights of a limited  partner,
including  voting  rights  and the right to inspect  and copy the  Partnership's
books,  the  Partnership  has  granted  such  rights  to  s  under the
Partnership Agreement, to the fullest extent permitted by law.

     Following the termination of the Offering, s who wish to exchange
their BUC$ for Limited Partnership  Interests and become Limited Partners may do
so by executing and delivering to the  Partnership  subscription  agreements and
applications  (which are available  upon request from the General  Partners) and
making payment not to exceed $100 per transaction to cover expenses  involved in
the  transfer.  s  surrendering  BUC$ to  become  substituted  Limited
Partners will be admitted to the Partnership monthly following the submission of
all required  documents to the Assignor  Limited  Partner and acceptance of such
investors by the General  Partners.  Limited  Partnership  Interests will not be
listed for trading on any  securities  exchange or included for quotation on the
NASDAQ  System and it is not  anticipated  that a public market will develop for
Limited  Partnership  Interests.  There  are also  certain  restrictions  on the
transfers  of  Limited  Partnership  Interests.   See  "Summary  of  Partnership
Agreement--Transferability   of  Limited  Partnership  Interests."  Accordingly,
holders of Limited  Partnership  Interests  are  expected to  encounter  greater
difficulty in selling or pledging  their Limited Partnership  Interests  than
holders  of  BUC$.  Therefore,  Limited  Partnership  Interests  should  only be
considered as a long-term investment. BUC$ which have been exchanged for Limited
Partnership Interests will be cancelled and will not be reissued.  INVESTORS WHO
EFFECT  SUCH  AN  EXCHANGE  WILL  NOT  BE  ABLE  TO  RE-EXCHANGE  THEIR  LIMITED
PARTNERSHIP INTERESTS FOR BUC$.

Bankers Trust Company will act as the transfer agent and registrar for the BUC$.

     The  transferee  of BUC$ shall not be  recognized as an assignee of Limited
Partnership  Interests  unless and until the day such  transfer is received  and
recorded by the transfer  agent of the  Partnership  in respect of the BUC$. See
"Summary  of  Partnership   Agreement--Transferability  of  Limited  Partnership
Interests"  for a discussion of transfers of Limited  Partnership  Interests and
the restriction that no BUC may be sold, assigned or exchanged if such BUC, when
added  to the  total  of all  BUC$ and  Limited  Partnership  Interests  sold or
exchanged  within the prior 12 months,  would result in the  termination  of the
Partnership.

     The General  Partners have the ability,  without a vote of Limited Partners
or  s,  to  delist  BUC$ from  public  trading  markets,  to cause the
Assignor  Limited  Partner to cancel  all BUC$ and to cause the  holders of such
BUC$ to become substituted Limited Partners

                                       88

<PAGE>

in the  Partnership  to the extent of their  holdings  in BUC$  and/or to impose
additional  restrictions on transfers of BUC$ or Limited  Partnership  Interests
should the General  Partners deem it advisable or necessary to do so in order to
preserve the tax status of the Partnership as an entity taxable as a partnership
and not as a corporation  for federal  income tax purposes or, if necessary,  to
provide for continued  availability of tax benefits.  The  Partnership  does not
intend to redeem or repurchase any of the BUC$ or Limited Partnership  Interests
during the life of the Partnership.

                        SUMMARY OF PARTNERSHIP AGREEMENT

      The rights and obligations of the Partners in the Partnership are governed
by the  Partnership  Agreement,  the form of which is set out in its entirety at
the end of this Prospectus as Exhibit A. The s  will become  assignees
of the Assignor  Limited Partner of the  Partnership  and as such,  their rights
will also be governed  by the terms of the  Partnership  Agreement.  Prospective
investors  should  study the  Partnership  Agreement  carefully.  The  following
statements and other  statements in this  Prospectus  concerning the Partnership
Agreement  and  related  matters  are merely an  outline,  do not  purport to be
complete and in no way modify or amend the Partnership Agreement.

     BUC$ HOLDERS WILL BE BOUND BY THE PROVISIONS OF THE  PARTNERSHIP  AGREEMENT


Nature of Partnership

      Summit  Preferred  Equity L.P. is a limited  partnership  formed under the
Delaware Revised Uniform Limited  Partnership  Act. The Partnership  Agreement
authorizes the issuance and sale for cash of up to 2,893,000 Limited Partnership
Interests  and BUC$ representing  the  assignment  of such Limited  Partnership
Interests.   The  Initial  Limited  Partner  acquired  150  Limited  Partnership
Interests and will with.  draw as a Limited  Partner at the first closing of the
sale of BUC$.

The Responsibilities of the General Partners

      The General  Partners  have the  exclusive  management  and control of all
aspects of the business of the Partnership.  In the course of their  management,
the General Partners may acquire, hold, encumber, sell, dispose of and otherwise
deal with and invest in  Preferred  Equity  Investments  upon such terms as they
determine to be in the best interests of the  Partnership.  They may also employ
such persons, including, under certain circumstances,  Affiliates of the General
Partners, as they deem necessary or desirable for the efficient operation of the
Partnership. However, the Partnership Agreement provides that prior to the sale,
pledge  or  encumbrance  of  all or  substantially  all  of  the  assets  of the
Partnership,  Holders  holding  more than 50% of the total  outstanding  Limited
Partnership Interests and BUC$ must approve of such sale or pledge.  Neither the
Limited  Partners  nor the  s  shall have any  authority  to  transact
business for or participate  in the control of the business of the  Partnership.
The  authority  of the  General  Partners  is also  subject to  certain  express
restrictions  set  forth  in the  Partnership  Agreement.  None  of the  General
Partners will take any action which  constitutes  its voluntary  withdrawal from
the Partnership until the dissolution of the Partnership.

Tax Matters Partner

      The Related General Partner has been designated the "Tax Matters  Partner"
under Section 15.10 of the Partnership  Agreement to manage  administrative  tax
proceedings  conducted  at the  Partnership  level  by the IRS with  respect  to
Partnership   matters.  Any  Partner  has  the  right  to  participate  in  such
administrative proceedings relating to the determination of Partnership items at
the Partnership level. Expenses of such administrative proceedings undertaken by
the Tax Matters Partner will be paid for out of Partnership  assets. Each Holder
who  elects to  participate  in such  proceedings  will be  responsible  for any
expense incurred by such Holder in connection with such participation.  Further,
the cost to a Holder of any  adjustment,  and the cost of any resulting audit or
adjustment  of a  Holder's  tax  return,  will be borne  solely by the  affected
Holder. See "Federal Income Tax  Considerations--Tax  Returns,  Tax Information,
Audits and Proceedings"; and "Conflicts of Interest--Tax Matters Partner."

Liability of s and Limited Partners

      A 's  capital and a Limited Partner's capital are subject to the
risks of the Partnership's business. In general, limited partners are not liable
for a limited partnership's  obligations unless they take part in the management
or control of the business of the  partnership  and thereby  incur  liability as
general  partners.  In the  opinion of counsel  to the  Partnership,  no Limited
Partner  of the  Partnership  will have any  liability  under  Delaware  law for
obligations  of the  Partnership  in excess  of the  Limited  Partner's  capital
contribution and share of the Partnership's  assets and  undistributed  profits,
except for any duty to return  certain  distributions  and  returns of  capital,
unless  such  Limited  Partner  takes part in the  control of the  Partnership's
business.

     Under the  Delaware  Act,  the  exercise by Limited  Partners of the voting
rights  contemplated by the Partnership  does not constitute  taking part in the
management  or control of the  business  of the  Partnership.  In the opinion of

<PAGE>

counsel to the Partnership, the liability of the BUC$ holders will be no greater
than that of a Limited Partner of the Partnership.

                                       89