Document:

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                                                                  Exhibit 10.13
August 31, 2000

High Equity Partners L.P. - Series 86
100 Jericho Quadrangle, Suite 214
Jericho, NY  11753-2727

Attn: Mr. Peter Braverman

RE:  Valuation Analysis for High Equity Partners L.P. - Series86
     ("the Partnership")

Gentlemen:

By letter dated June 14, 2000, the Partnership retained Insignia/ESG, Inc.
("Insignia") to undertake four separate valuation analyses with respect to the
Partnership on behalf of the Partnership. The engagement letter states that the
Partnership proposes to be converted (the "Transaction") into a real estate
investment trust (the "REIT") as described by the Partnership's management in
Amendment No.2 to the Registration Statement on Form S-4 of the REIT. We have
assumed that in the Transaction, each Partnership Unit would be exchanged for
two REIT shares. In each of the analyses, the value arrived at is expressed as
an amount per proposed REIT share. The following summarizes the specific
analyses that the Partnership asked us to perform.

1. An examination of the secondary market trading history ("Secondary Market
Trading History Analysis") of the existing units of limited partnership
interest in the Partnership (the "Partnership Units") on the limited secondary
markets;

2. An analysis of the value of the net assets of the Partnership, and the
amount of cash available for distribution to partners, were the Partnership to
liquidate all of its real estate (the "Properties") and other assets
("Liquidation Analysis");

3. An analysis of the value of the Partnership Units, on a going concern basis,
based upon the future cash flow to be received by partners ("Going Concern
Analysis");

4. On the assumption that the Partnership was converted to the REIT, an
analysis of the expected range in which the REIT shares would trade based upon
an examination of comparable publicly traded real estate investment trusts
("Conversion and Comparable Company Analysis").
<PAGE>

In performing these analyses, we reviewed the documents provided to us by the
Partnership which are identified on Schedule A to this letter and we have
relied upon and assumed, without independent verification or investigation, the
accuracy and completeness of all financial and other information provided to or
discussed with us by the Partnership, its general partner and their respective
employees, representatives and affiliates. With respect to forecasts of the
future financial condition and operating results of the Partnership and the
proposed REIT provided to or discussed with us, we assumed, at the direction of
the management of the Partnership, without independent verification or
investigation, that such forecasts were reasonably prepared on bases reflecting
the best currently available information, estimates and good faith judgments of
the management of the Partnership. Except for the appraisals provided to us by
the Partnership referred to below, we have also relied upon assurances of the
management of the Partnership that they are unaware of any facts that would
make the historical information or forecasts incomplete or misleading. We have
neither made nor obtained any independent evaluations or appraisals of the
assets or the liabilities (contingent or otherwise) of the Partnership. The
analyses do not address the tax consequences of any aspect of the proposed
Transaction (other than transfer taxes assumed with the disposition of real
estate upon liquidation). We are not expressing any opinion as to the
underlying evaluation, future performance or long-term viability of the
Partnership or the proposed REIT, or the price at which Partnership Units or
proposed REIT shares will trade, whether or not the Transaction occurs. Our
analyses are necessarily based on the information available to us and general
economic, financial and securities market conditions and circumstances as they
exist and can be evaluated by us on the date hereof. It should be understood
that, although subsequent developments may affect our analyses, we do not have
any obligation to update, revise or reaffirm the analyses.

OVERVIEW OF CUSHMAN AND WAKEFIELD APPRAISAL METHODS

Insignia was provided with Cushman & Wakefield's ("Cushman") appraised values
as of June 30, 2000 for the Properties ("Appraised Values"). The valuation
approach selected by Cushman for the Properties varies based on each Property's
particular demise, encumbrances and the market conditions affecting it. With
the exception of the Properties identified as Tri-Columbus and Melrose Crossing
I, Cushman employed a discounted cash flow approach with, in most cases,
support from the sales comparison approach.

Under the discounted cash flow approaches, the cash flows for the Properties
for the next 10 years were projected. At the end of the 10th year a terminal
value ("Terminal Value") was added to the cash flow by capitalizing the
projected 11th year net operating income at a rate ("Appraised Cap Rate")
selected by Cushman and then deducting the anticipated costs associated with
selling the Properties ("Selling Costs"). The cash flows were then discounted
to present utilizing a discount rate ("Appraised Discount Rate") selected by
Cushman.
<PAGE>

The values for Melrose Crossing I were determined based on the replacement cost
approach.

The values for the Tri-Columbus property were based on a direct capitalization
of income approach through which Cushman capitalized estimated stabilized net
operating income at the Appraised Cap Rate selected by Cushman.

For the properties held through joint venture interests, Cushman provided a
second set of values ("Discounted J.V. Values") which contemplate a 25% to 30%
discount ("Joint Venture Discounts") to the Appraised Values in consideration
of the illiquidity associated with the ownership structure. The Discounted J.V.
Values together with the Appraised Values for the non-joint venture Properties
together constitute the Adjusted Appraisals ("Adjusted Appraisals").

1. SECONDARY MARKET TRADING HISTORY ANALYSIS

The Secondary Market Trading History Analysis is intended to value the
Partnerships based on the recent trading prices of Partnership Units. These
secondary markets cannot be characterized as either efficient or liquid
markets, and Partnership Units are expected to trade at a discount to
liquidation value or value based upon a going-concern analysis of the
Partnership. The information provided to us by the Partnership included the
high sale price and low sale price per Partnership Unit during each two months
of trading from April 1, 1996 to May 31, 2000, together with a weighted average
price per Partnership Unit for the same period. The ranges of values indicated
by this analysis are based upon that secondary market trading data, with
particular consideration given to the weighted average trading prices in May,
2000, the most recent month for which data was provided. Also considered are
the trends in prices over the period for which data was provided. The resulting
range of values per REIT share from the Secondary Market Trading History
Analysis is indicated to be $39.18 to $44.19 per share.

 2. LIQUIDATION ANALYSIS

The Liquidation Analysis is intended to value the Partnership's net assets
assuming a complete liquidation of the Partnership on a current basis. For
purposes of this analysis, we assumed that the non-joint venture Properties
would sell at their Appraised Values and that interests in joint ventures would
sell at the values indicated in the Adjusted Appraisals.

The Liquidation Analysis assumes an adjustment for the anticipated property
disposition costs consisting of estimated transfer taxes, brokerage commissions
and closing costs ("Disposition Costs"). To the extent Properties were
appraised based on a discounted cash flow methodology, Disposition Costs were
assumed to be equal to Selling Costs utilized by Cushman in determining
Terminal Value. For Properties valued based on either a direct capitalization
method or replacement cost method, Disposition Costs were assumed to be 5% of
Adjusted Appraisals.
<PAGE>

Consideration was also given for the non-real estate assets of the Partnership.
The net assets considered were the Assets and Liabilities reported on the
Balance Sheet at June 30, 2000 included in the Form 10-Q of the Partnership for
the period ended June 30, 2000 and were included at the value set forth on the
Balance Sheet with the exception of the assets classified as Other Assets on
the Balance Sheets. The only Other Assets included were those that were deemed
to have value upon liquidation, i.e. furniture, fixtures & equipment and
receivables.

The fee giveback obligation was also considered to be realized by the limited
partners of the Partnership at full value as of June 30, 2000.

Finally, consideration was given for the partnership dissolution costs that
were estimated at $500,000 for the Partnership.

No general partner liquidation fees or priority distributions were considered,
as the partnership liquidation values would not provide for same under the
terms of the Partnership Agreement.

The resulting range of values per proposed REIT share based on the Liquidation
Analysis is indicated to be $66.17 to $74.62 per share.

3. GOING-CONCERN ANALYSIS

Insignia was provided with the distribution history of the Partnership. In
addition, pro forma financial statements showing forecasts of Partnership cash
flows, expenses and potential distributions were also provided to us by the
Partnership for the period ending December 31, 2001.

The Going-Concern Analysis is intended to value the Partnership as a going-
concern assuming its current asset base. The most significant component of the
value of the Partnership as a going-concern is the distributions to the
partners, which are assumed to be equal to the cash flow from the Partnership's
real estate assets. For purposes of this analysis, the Properties' cash flows
were attributed values based on the Appraised Values.

An adjustment was made to give effect for the joint venture illiquidity that
would impact the Terminal Values of the joint venture Properties. This
adjustment was made for the joint venture Properties that were valued by
Cushman pursuant to the discounted cash flow methodology, by applying to the
Terminal Value the same Joint Venture Discount utilized by Cushman in
determining the appraised liquidation value and discounting it to the present
utilizing the Appraised Discount Rate. For joint venture Properties appraised
under the direct capitalization approach, an adjustment was made to give effect
to the joint venture illiquidity that would affect the implied Terminal Values
of these Properties. This value was then discounted to the present at 12%.
<PAGE>

Consideration was also given for the non-real estate assets of the Partnership.
The net assets considered were the Assets and Liabilities cited on the Balance
Sheet as of June 30, 2000 included in the Form 10-Q of the Partnership for the
period ended June 30, 2000, and were included at the value set forth in the
Balance Sheet with the exception of the assets classified as Other Assets on
the Balance Sheet of the Partnership at June 30, 2000. The only Other Assets
included were those that were deemed to have value upon liquidation, i.e.
furniture fixtures & equipment and receivables.

An adjustment was also made to reflect the going-concern reserve requirements.
A general reserve of $1,000,000 was to be maintained by the Partnership and
then liquidated in 8 years. An adjustment was thus made equal to the cost of
maintaining this reserve. The net cost was assumed to be 12% of the reserve per
annum. A further adjustment was made for anticipated capital expenditures at
properties that were valued under either the replacement cost or direct
capitalization approaches, as no capital reserves were considered in the
appraisals for these properties. The reserves were based on actual anticipated
capital requirements over the next five years as estimated by the management of
the Partnership, and were discounted to present from the anticipated date of
expenditure utilizing a discount rate of 5%. A 5% discount rate was selected as
it is the approximate rate at which the reserved funds are expected to earn
interest.

Finally, an adjustment was made for the cost of asset management fees and
administrative costs. The values of these costs were derived by capitalizing
the anticipated annual cost of these expenses for the year ending December 31,
2001. The capitalization rates employed were equal to the weighted average
Appraised Discount Rate/Appraised Cap Rate for the Properties.

The resulting range of values per proposed REIT share based on the
Going-Concern Analysis is indicated to be $55.36 to $62.42 per share.

4. CONVERSION AND COMPARABLE COMPANY ANALYSIS

The Conversion and Comparable Company Analysis endeavors to determine the range
of value for the proposed REIT's shares.

The methodology employed in determining the REIT's value consisted of applying
to the Projected Funds from Operations ("Projected FFO") of the REIT a range of
multiples (the "FFO Multiples") which are consistent with the FFO Multiples at
which comparable real estate investment trusts are currently trading in the
marketplace. Funds from Operations were calculated in accordance with the
guidelines set out by the National Association of Real Estate Investment Trusts
("NAREIT"). While no directly comparable companies were identified, by
adjusting and applying the median Projected FFO multiple for
small-capitalization real estate investment trusts, those with an implied
market capitalization less than $250 million, a range of reasonable FFO
Multiples was established. The range of FFO Multiples determined to be 5.4 to
6.7.
<PAGE>

The Projected FFO of the REIT is comprised of two components: (1) Pro-forma FFO
("Pro-Forma FFO") for the assets currently owned ("Current Assets") by the
Partnership and (2) Anticipated FFO ("Anticipated FFO") for assets projected to
be acquired by the REIT in the future ("New Assets").

The Pro-Forma FFO is based on the actual operating results of the Current
Assets for the 12 month period ending June 30, 2000, as adjusted for the
anticipated increase in Asset Management Fees resulting from the higher
Adjusted Appraisals as compared to the 1998 appraised values.

Anticipated FFO is based on the projected operating results of the New Assets,
as decreased by the rise in the asset management fees resulting from the
acquisition of the New Assets. The New Assets are assumed to be acquired in two
ways: (1) by utilizing all available cash less a reserve equal to 3% of the
Adjusted Appraisals to buy New Assets and (2) by leveraging the Current Assets
and the New Assets to a level of 75% with debt which carries an interest rate
of 8%. The New Assets are assumed to generate net operating income equal to
10.5% of their gross purchase price.

The resulting range of values per proposed REIT share based on the Conversion
and Comparable Company Analysis are indicated to be $45.02 to $55.85 per share.

Estimates of value of the proposed REIT shares are not intended and should not
be construed as a prediction of estimates as to the trading price of the
proposed REIT shares upon or after consummation of the Transaction.

The information set forth in this letter does not constitute and should not be
construed as a recommendation to any holder of Partnership Units with respect
to the proposed Transaction. The analyses do not address the merits of the
proposed Transaction or consider any alternatives to the proposed Transaction.
This letter has been prepared for the Partnership, and should not be
reproduced, summarized, described or referred to without the prior written
consent of Insignia; provided, however, that this letter may be summarized and
reproduced in full in the Registration Statement on Form S-4 to be filed by the
Partnership.

                                                     Insignia/ESG, Inc.

                                                     By:_______________________

                                                     Title:____________________

                                                     Name:_____________________

<PAGE>

                                   SCHEDULE A

LIST OF PARTNERSHIP-PROVIDED INFORMATION AND MATERIALS

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ITEM                                    DESCRIPTION
-------------------------------------------------------------------------------

Appraisals                              Narrative appraisals of each of the
                                        Partnership's properties prepared by
                                        Cushman & Wakefield as of June 30, 2000

-------------------------------------------------------------------------------
Forms 10-K                              Form 10-K for the Partnership for the
                                        year ended December 31, 1999

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Forms 10-Q                              Form 10-Q for the Partnership for the
                                        quarter ended June 30, 2000

-------------------------------------------------------------------------------
Capital Plans                           Descriptions of the anticipated capital
                                        improvements requirements at of the
                                        Partnership's properties for the next 5
                                        years

-------------------------------------------------------------------------------
Asset Management Fees                   The Partnership's and the proposed
                                        REIT's anticipated asset management
                                        fees based on the Appraised Values

-------------------------------------------------------------------------------
Administrative Expenses                 The Partnership's and the proposed
                                        REIT's anticipated Administrative Costs
                                        based on historical costs and
                                        management's estimation of future costs
                                        assuming a 3% inflationary factor

-------------------------------------------------------------------------------
Pro-Forma FFO                           A projection of the Partnership's and
                                        the REIT's funds from operations based
                                        on the assets currently owned by the
                                        Partnership.

-------------------------------------------------------------------------------
Anticipated FFO                         A projection of the increase in the
                                        REIT's funds from operations based on
                                        the acquisition of New Assets assuming
                                        75% leverage of the Partnership's
                                        Current Assets and New Assets, and use
                                        of approximately 80% of the
                                        Partnership's current cash reserves for
                                        the acquisition of New Assets. Leverage
                                        was assumed to be 75% and bear interest
                                        at an average rate of 8%, and New
                                        Assets were assumed to generate net
                                        operating income of 10.5% of their
                                        gross cost. Asset Management Fees were
                                        assumed to be based upon 1.25% of
                                        the prospective value of the New
                                        Assets.
-------------------------------------------------------------------------------
<PAGE>

-------------------------------------------------------------------------------
Projected FFO                           The total FFO assumed to be generated
                                        by the proposed REIT in the future.
                                        Calculated by adding the Pro-Forma FFO
                                        and Anticipated FFO.

-------------------------------------------------------------------------------
Going-Concern Reserve Requirements      An estimate of the cost of the
                                        maintenance and use of the cash
                                        reserves projected for the Partnership
                                        assuming the proposed REIT conversion
                                        does not occur.

-------------------------------------------------------------------------------
Form S-4                                Amendment No. 2 to the Registration
                                        Statement on Form S-4 filed by the REIT
                                        in April 2000

-------------------------------------------------------------------------------
Pro-Forma Partnership Income Statements Pro-forma stabilized income statements
                                        for the Partnership assuming the
                                        proposed REIT conversion does not
                                        occur. These statements reflect
                                        operations for the twelve month period
                                        ended June 30, 2000 as adjusted for
                                        major known changes in property
                                        operations, changes in the Asset
                                        Management Fees based on the increased
                                        Appraised Going- Concern Values, and
                                        increased administrative costs assuming
                                        an inflationary factor of 3%.

-------------------------------------------------------------------------------
Secondary Market Trading History        Chart of number and prices of
                                        Partnership Units sold from April 1,
                                        1996 through May 31, 2000 as reported
                                        by Partnership Spectrum.

-------------------------------------------------------------------------------
Fee Giveback Obligations                The General Partner's current fee
                                        giveback obligations stipulated in The
                                        Class Action Settlements, as defined in
                                        the Form S-4.

-------------------------------------------------------------------------------
Going Concern Distributions             Estimates of the distributions by the
                                        Partnership if the Partnership were to
                                        be a going concern.

-------------------------------------------------------------------------------
Partnership Dissolution Costs           Estimates of the Partnership-level
                                        costs associated with the dissolution
                                        and winding up of the affairs of the
                                        Partnership.
-------------------------------------------------------------------------------<PAGE>

                                                                   Exhibit 10.10

August 31, 2000

High Equity Partners L.P. - Series 88
100 Jericho Quadrangle, Suite 214
Jericho, NY  11753-2727
         Attn: Mr. Peter Braverman

RE:  Valuation Analysis for High Equity Partners L.P. - Series 88  ("the
     Partnership")

Gentlemen:

By letter dated June 14, 2000, the Partnership retained Insignia/ESG, Inc.
("Insignia") to undertake four separate valuation analyses with respect to the
Partnership on behalf of the Partnership. The engagement letter states that the
Partnership proposes to be converted (the "Transaction") into a real estate
investment trust (the "REIT") as described by the Partnership's management in
Amendment No.2 to the Registration Statement on Form S-4 of the REIT. We have
assumed that in the Transaction, each Partnership Unit would be exchanged for
three REIT shares. In each of the analyses, the value arrived at is expressed as
an amount per proposed REIT share. The following summarizes the specific
analyses that the Partnership asked us to perform.

1. An examination of the secondary market trading history ("Secondary Market
Trading History Analysis") of the existing units of limited partnership interest
in the Partnership (the "Partnership Units") on the limited secondary markets;

2. An analysis of the value of the net assets of the Partnership, and the amount
of cash available for distribution to partners, were the Partnership to
liquidate all of its real estate (the "Properties") and other assets
("Liquidation Analysis");

3. An analysis of the value of the Partnership Units, on a going concern basis,
based upon the future cash flow to be received by partners ("Going Concern
Analysis");

4. On the assumption that the Partnership was converted to the REIT, an analysis
of the expected range in which the REIT shares would trade based upon an
examination of comparable publicly traded real estate investment trusts
("Conversion and Comparable Company Analysis").

<PAGE>

In performing these analyses, we reviewed the documents provided to us by the
Partnership which are identified on Schedule A to this letter and we have relied
upon and assumed, without independent verification or investigation, the
accuracy and completeness of all financial and other information provided to or
discussed with us by the Partnership, its general partner and their respective
employees, representatives and affiliates. With respect to forecasts of the
future financial condition and operating results of the Partnership and the
proposed REIT provided to or discussed with us, we assumed, at the direction of
the management of the Partnership, without independent verification or
investigation, that such forecasts were reasonably prepared on bases reflecting
the best currently available information, estimates and good faith judgments of
the management of the Partnership. We have also relied upon assurances of the
management of the Partnership that they are unaware of any facts that would make
the historical information or forecasts incomplete or misleading. Except for the
appraisals provided to us by the Partnership referred to below, we have neither
made nor obtained any independent evaluations or appraisals of the assets or the
liabilities (contingent or otherwise) of the Partnership. The analyses do not
address the tax consequences of any aspect of the proposed Transaction (other
than transfer taxes assumed with the disposition of real estate upon
liquidation). We are not expressing any opinion as to the underlying evaluation,
future performance or long-term viability of the Partnership or the proposed
REIT, or the price at which Partnership Units or proposed REIT shares will
trade, whether or not the Transaction occurs. Our analyses are necessarily based
on the information available to us and general economic, financial and
securities market conditions and circumstances as they exist and can be
evaluated by us on the date hereof. It should be understood that, although
subsequent developments may affect our analyses, we do not have any obligation
to update, revise or reaffirm the analyses.

OVERVIEW OF CUSHMAN AND WAKEFIELD APPRAISAL METHODS

Insignia was provided with Cushman & Wakefield's ("Cushman") appraised values as
of June 30, 2000 for the Properties ("Appraised Values"). The valuation approach
selected by Cushman for the Properties varies based on each Property's
particular demise, encumbrances and the market conditions affecting it. With the
exception of the Properties identified as Tri-Columbus, Melrose Crossing II and
three Super Valu properties, Cushman employed a discounted cash flow approach
with, in most cases, support from the sales comparison approach.

Under the discounted cash flow approaches, the cash flows for the Properties for
the next 10 years were projected. At the end of the 10th year a terminal value
("Terminal Value") was added to the cash flow by capitalizing the projected 11th
year net operating income at a rate ("Appraised Cap Rate") selected by Cushman
and then deducting the anticipated costs associated with selling the Properties
("Selling Costs"). The cash flows were then discounted to present utilizing a
discount rate ("Appraised Discount Rate") selected by Cushman.

The values for Melrose Crossing II were determined based on the replacement cost
approach.

<PAGE>

The values for Tri-Columbus and three Super Valu properties were based on a
direct capitalization of income approach through which Cushman capitalized
estimated stabilized net operating income at the Appraised Cap Rate selected by
Cushman.

For the properties held through joint venture interests, Cushman provided a
second set of values ("Discounted J.V. Values") which contemplate a 25% to 35%
discount ("Joint Venture Discounts") to the Appraised Values in consideration of
the illiquidity associated with the ownership structure. The Discounted J.V.
Values together with the Appraised Values for the non-joint venture Properties
together constitute the Adjusted Appraisals ("Adjusted Appraisals").

1. SECONDARY MARKET TRADING HISTORY ANALYSIS

The Secondary Market Trading History Analysis is intended to value the
Partnerships based on the recent trading prices of Partnership Units. These
secondary markets cannot be characterized as either efficient or liquid markets,
and Partnership Units are expected to trade at a discount to liquidation value
or value based upon a going-concern analysis of the Partnership. The information
provided to us by the Partnership included the high sale price and low sale
price per Partnership Unit during each two months of trading from April 1, 1996
to May 31, 2000, together with a weighted average price per Partnership Unit for
the same period. The ranges of values indicated by this analysis are based upon
that secondary market trading data, with particular consideration given to the
weighted average trading prices in May, 2000, the most recent month for which
data was provided. Also considered are the trends in prices over the period for
which data was provided. The resulting range of values per REIT share from the
Secondary Market Trading History Analysis is indicated to be $31.52 to $35.55
per share.

2. LIQUIDATION ANALYSIS

The Liquidation Analysis is intended to value the Partnership's net assets
assuming a complete liquidation of the Partnership on a current basis. For
purposes of this analysis, we assumed that the non-joint venture Properties
would sell at their Appraised Values and that the interests in joint ventures
would sell at the values indicated in the Adjusted Appraisal.

The Liquidation Analysis assumes an adjustment for the anticipated property
disposition costs consisting of estimated transfer taxes, brokerage commissions
and closing costs ("Disposition Costs"). To the extent Properties were appraised
based on a discounted cash flow methodology, Disposition Costs were assumed to
be equal to Selling Costs utilized by Cushman in determining Terminal Value. For
Properties valued based on either a direct capitalization method or replacement
cost method, Disposition Costs were assumed to be 5% of Adjusted Appraisals.

Consideration was also given for the non-real estate assets of the Partnership.
The net assets considered were the Assets and Liabilities reported on the
Balance Sheet at June

<PAGE>

30, 2000 included in the Form 10-Q of the Partnership for the period ended
June 30, 2000 and were included at the value set forth on the Balance Sheet with
the exception of the assets classified as Other Assets on the Balance Sheets.
The only Other Assets included were those that were deemed to have value upon
liquidation, i.e. furniture, fixtures & equipment and receivables.

The fee giveback obligation was also considered to be realized by the limited
partners of the Partnership at full value as of June 30, 2000.

Finally, consideration was given for the partnership dissolution costs that were
estimated at $500,000 for the Partnership.

No general partner liquidation fees or priority distributions were considered,
as the partnership liquidation values would not provide for same under the terms
of the Partnership Agreement.

The resulting range of values per proposed REIT share based on the Liquidation
Analysis is indicated to be $43.83 to $49.42 per share.

3. GOING-CONCERN ANALYSIS

Insignia was provided with the distribution history of the Partnership. In
addition, pro forma financial statements showing forecasts of Partnership cash
flows, expenses and potential distributions were also provided to us by the
Partnership for the period ending December 31, 2001.

The Going-Concern Analysis is intended to value the Partnership as a going-
concern assuming its current asset base. The most significant component of the
value of the Partnership as a going-concern is the distributions to the
partners, which are assumed to be equal to the cash flow from the Partnership's
real estate assets. For purposes of this analysis, the Properties' cash flows
were attributed values based on the Appraised Values.

An adjustment was made to give effect for the joint venture illiquidity that
would impact the Terminal Values of the joint venture Properties. This
adjustment was made for the joint venture Properties that were valued by Cushman
pursuant to the discounted cash flow methodology, by applying to the Terminal
Value the same Joint Venture Discount utilized by Cushman in determining the
appraised liquidation value and discounting it to the present utilizing the
Appraised Discount Rate. For joint venture Properties appraised under the direct
capitalization approach, an adjustment was made to give effect to the joint
venture illiquidity that would affect the implied Terminal Values of these
Properties. This value was then discounted to the present at 12%.

Consideration was also given for the non-real estate assets of the Partnership.
The net assets considered were the Assets and Liabilities cited on the Balance
Sheet as of June 30, 2000 included in the Form 10-Q of the Partnership for the
period ended June 30,

<PAGE>

2000, and were included at the value set forth in the Balance Sheet with the
exception of the assets classified as Other Assets on the Balance Sheet of the
Partnership at June 30, 2000. The only Other Assets included were those that
were deemed to have value upon liquidation, i.e. furniture fixtures & equipment
and receivables.

An adjustment was also made to reflect the going-concern reserve requirements. A
general reserve of $1,000,000 was to be maintained by the Partnership and then
liquidated in 8 years. An adjustment was thus made equal to the cost of
maintaining this reserve. The net cost was assumed to be 12% of the reserve per
annum. A further adjustment was made for anticipated capital expenditures at
properties that were valued under either the replacement cost or direct
capitalization approaches, as no capital reserves were considered in the
appraisals for these properties. The reserves were based on actual anticipated
capital requirements over the next five years as estimated by the management of
the Partnership, and were discounted to present from the anticipated date of
expenditure utilizing a discount rate of 5%. A 5% discount rate was selected as
it is the approximate rate at which the reserved funds are expected to earn
interest.

Finally, an adjustment was made for the cost of asset management fees and
administrative costs. The values of these costs were derived by capitalizing the
anticipated annual cost of these expenses for the year ending December 31, 2001.
The capitalization rates employed were equal to the weighted average Appraised
Discount Rate/Appraised Cap Rate for the Properties.

The resulting range of values per proposed REIT share based on the Going-Concern
Analysis is indicated to be $31.44 to $35.46 per share.

4. CONVERSION AND COMPARABLE COMPANY ANALYSIS

The Conversion and Comparable Company Analysis endeavors to determine the range
of value for the proposed REIT's shares.

The methodology employed in determining the REIT's value consisted of applying
to the Projected Funds from Operations ("Projected FFO") of the REIT a range of
multiples (the "FFO Multiples") which are consistent with the FFO Multiples at
which comparable real estate investment trusts are currently trading in the
marketplace. Funds from Operations were calculated in accordance with the
guidelines set out by the National Association of Real Estate Investment Trusts
("NAREIT"). While no directly comparable companies were identified, by adjusting
and applying the median Projected FFO multiple for small-capitalization real
estate investment trusts, those with an implied market capitalization less than
$250 million, a range of reasonable FFO Multiples was established. The range of
FFO Multiples determined to be 5.4 to 6.7.

The Projected FFO of the REIT is comprised of two components: (1) Pro-forma FFO
("Pro-Forma FFO") for the assets currently owned ("Current Assets") by the
Partnership and (2) Anticipated FFO ("Anticipated FFO") for assets projected to
be acquired by the REIT in the future ("New Assets").

<PAGE>

The Pro-Forma FFO is based on the actual operating results of the Current Assets
for the 12 month period ending June 30, 2000, as adjusted for the anticipated
increase in Asset Management Fees resulting from the higher Adjusted Appraisals
as compared to the 1998 appraised values.

Anticipated FFO is based on the projected operating results of the New Assets,
as decreased by the rise in the asset management fees resulting from the
acquisition of the New Assets. The New Assets are assumed to be acquired in two
ways: (1) by utilizing all available cash less a reserve equal to 3% of the
Adjusted Appraisals to buy New Assets and (2) by leveraging the Current Assets
and the New Assets to a level of 75% with debt which carries an interest rate of
8%. The New Assets are assumed to generate net operating income equal to 10.5%
of their gross purchase price.

The resulting range of values per proposed REIT share based on the Conversion
and Comparable Company Analysis are indicated to be $32.06 to $39.78 per share.

Estimates of value of the proposed REIT shares are not intended and should not
be construed as a prediction of estimates as to the trading price of the
proposed REIT shares upon or after consummation of the Transaction.

The information set forth in this letter does not constitute and should not be
construed as a recommendation to any holder of Partnership Units with respect to
the proposed Transaction. The analyses do not address the merits of the proposed
Transaction or consider any alternatives to the proposed Transaction. This
letter has been prepared for the Partnership, and should not be reproduced,
summarized, described or referred to without the prior written consent of
Insignia; provided, however, that this letter may be summarized and reproduced
in full in the Registration Statement on Form S-4 to be filed by the
Partnership.

                                                         Insignia/ESG, Inc.

                                                     By:_________________

                                                     Title:________________

                                                     Name:_______________

<PAGE>

                                   SCHEDULE A

LIST OF PARTNERSHIP-PROVIDED INFORMATION AND MATERIALS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
ITEM                                                DESCRIPTION
--------------------------------------------------------------------------------
<S>                                                      <C>
Appraisals                                    Narrative appraisals of each of
                                              the Partnership's properties
                                              prepared by Cushman & Wakefield as
                                              of June 30, 2000

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

Forms                                         10-K Form 10-K for the Partnership
                                              for the year ended December 31,
                                              1999

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

Forms                                         10-Q Form 10-Q for the Partnership
                                              for the quarter ended June 30,
                                              2000

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

Capital                                       Plans Descriptions of the
                                              anticipated capital improvements
                                              requirements at of the
                                              Partnership's properties for the
                                              next 5 years

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

Asset                                         Management Fees The Partnership's
                                              and the proposed REIT's
                                              anticipated asset management fees
                                              based on the Appraised Values

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

Administrative                                Expenses The Partnership's and the
                                              proposed REIT's anticipated
                                              Administrative Costs based on
                                              historical costs and management's
                                              estimation of future costs
                                              assuming a 3% inflationary factor

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

Pro-Forma                                     FFO A projection of the
                                              Partnership's and the REIT's funds
                                              from operations based on the
                                              assets currently owned by the
                                              Partnership.

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

Anticipated                                   FFO A projection of the increase
                                              in the REIT's funds from
                                              operations based on the
                                              acquisition of New Assets assuming
                                              75% leverage of the Partnership's
                                              Current Assets and New Assets, and
                                              use of approximately 80% of the
                                              Partnership's current cash
                                              reserves for the acquisition of
                                              New Assets. Leverage was assumed
                                              to be 75% and bear interest at an
                                              average rate of 8%, and New Assets
                                              were assumed to generate net
                                              operating income of 10.5% of their
                                              gross cost. Asset Management Fees
                                              were assumed to be based upon
                                              1.25% of

<PAGE>

                                              the prospective value of the New
                                              Assets.
</TABLE>

Projected FFO                                 The total FFO assumed to be
                                              generated by the proposed REIT in
                                              the future. Calculated by adding
                                              the Pro-Forma FFO and Anticipated
                                              FFO.

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

Going-Concern                                 Reserve Requirements An estimate
                                              of the cost of the maintenance and
                                              use of the cash reserves projected
                                              for the Partnership assuming the
                                              proposed REIT conversion does not
                                              occur.

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

Form                                          S-4 Amendment No. 2 to the
                                              Registration Statement on Form S-4
                                              filed by the REIT in April 2000
--------------------------------------------------------------------------------

Pro-Forma Partnership Income Statements       Pro-forma stabilized income
                                              statements for the Partnership
                                              assuming the proposed REIT
                                              conversion does not occur. These
                                              statements reflect operations for
                                              the twelve month period ended June
                                              30, 2000 as adjusted for major
                                              known changes in property
                                              operations, changes in the Asset
                                              Management Fees based on the
                                              increased Appraised Going- Concern
                                              Values, and increased
                                              administrative costs assuming an
                                              inflationary factor of 3%.

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

Secondary Market Trading History              Chart of number and prices of
                                              Partnership Units sold from April
                                              1, 1996 through May 31, 2000 as
                                              reported by Partnership Spectrum.

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

Fee Giveback Obligations                      The General Partner's current fee
                                              giveback obligations stipulated in
                                              The Class Action Settlements, as
                                              defined in the Form S-4.

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

Going Concern Distributions                   Estimates of the distributions by
                                              the Partnership if the Partnership
                                              were to be a going concern.

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

Partnership Dissolution Costs                 Estimates of the Partnership-level
                                              costs associated with the
                                              dissolution and winding up of the
                                              affairs of the Partnership.

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

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