Question
April 20, 2006
Mr.James Ferkingstad
PremergerNotification Office
Bureauof Competition
Room303
FederalTrade Commission
600 Pennsylvania Avenue, N, W.
Washington, DC 20580
Re: Confirmation of Advice Regarding Exemptionfir Acquisition of Apartment Buildings
Dear Mr. Ferkingstad:
On Friday, April 7, 2006 you and I spoke regardinga proposed transaction that is the purchase of numerous apartment buildings or100% of the outstanding partnership interests of a limited partnership that controls,directly or indirectly, separate, single purpose limited liability companiesand limited partnerships whose sole asset in each case is an apartmentbuilding. I any writing to confirm your advice with respect to whether that transactionis reportable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,as amended and the rules (the "Rules") promulgated thereunder.
Theproposed transaction involves the purchase of approximately 58 apartmentbuildings, each owned by a separate, single purpose limited partnership orlimited liability company, Each limited partnership and limited liabilitycompany is controlled by a single parent limited. partnership that holds,either directly or in certain cases indirectly, 100% of the outstandingpartnership interests or limited liability company interests, The parentlimited partnership does not hold the voting securities or non-corporateinterests of any entity other than these separate, single purpose limitedpartnerships and limited liability companies, or any other assets. Eachseparate, single purpose limited partnership and limited liability company ownsthe land on which the apartment building is situated as well as theimprovements. The apartment building is the only asset held by each separate,single purpose limited partnership and limited liability company, other thancash held in the form of deposits from residents. The apartments are leased tounrelated third parties for residential purposes. Neither the parent limited partnershipnor any of the single purpose entities; conducts any business other thanleasing of the units For residential purposes and does not lease to any thirdparty any of the apartment building for conducting other businesses, e.g,retail or industrial.
The acquiring, person proposes to eitheracquire the apartment buildings directly, or acquire 100% of the partnershipinterest of the parent limited partnership. The size of the transaction and thesize of the parties exceed the notification threshold requirements.
You advised me, that it is the .FederalTrade Commission's policy not to require pre-merger notification of theacquisition of apartment buildings because the acquisition comes within theexemption from reporting contained at Rule 802.2(d). In addition, under Rule802.4, the acquisition of 100% of the partnership interests of the parentlimited partnership would also be exempt because the parent limitedpartnership's assets consists only of 100% of the outstanding interest in theentities that directly own the apartment buildings.
If myunderstanding is not correct, please call me at (redacted) to clarify thismatter. Thank you again for your assistance.