Valuations and appraisals of the Property are subjective. The Partnership may from time to time obtain a valuation or appraisal of the Property when determined to be appropriate, in its discretion; provided, however, that the Partnership is under no obligation to do so. Any determination of the value of the Property may involve subjective analysis which provides no more than a speculative estimate of value. Valuations and appraisals may result in adjustments of the carrying value of the Partnership’s investment. Accordingly, there can be no assurance that the Partnership’s net asset value, as calculated based upon such valuation, appraisals and/or opinions, will be accurate on any particular date, nor can there be any assurance that the sale of the Property would be at a price equivalent to the last estimated or appraised value of such property or asset. No assurance that the Property will be refinanced or sold within the timeframes set forth in the financial projections, if at all. Any successful refinancing or sale of the Property will require a high percentage of occupancy, completion of construction, or material appreciation in the Property, or all of them, which may not be within the Partnership’s control. The ability to sell the Property will be subject to numerous risks, including the availability of competing properties, the level of interest from the pool of potential buyers of multifamily properties, fluctuations in local property values, and the availability of acquisition financing. The ability to refinance its Property at the maturity of its mortgage financing will also be subject to numerous risks, including fluctuations in interest rates, adverse changes to other mortgage loan terms, the condition of the global, national and local credit markets, and the availability and willingness of banks and other credit sources to provide such financing. A failure to refinance or sell the Property on acceptable terms will have a material adverse effect on the return on the Limited Partners’ (including the Company’s) investment in the Partnership. Economic and Political Risks General economic conditions may affect the Partnership’s activities. Economic and business conditions may deteriorate which, among other things, will affect the Property, including the demand for the level of rental rates and occupancy that can be achieved at multifamily real estate locations; the availability and terms of financing may become scarce; the ability to operate and maintain any real estate in a profitable manner (including meeting capital expenditure requirements) may deteriorate; United States and local economic conditions may deteriorate; and the ability of the real estate to compete effectively in areas such as access, location, quality, and rental rates may deteriorate. This may have a material adverse effect on the Partnership’s ability to achieve its investment objectives. The Partnership will be exposed to the direct and indirect consequences of political, economic, social, diplomatic and other factors. Governmental approvals, actions, and initiatives, including the need for compliance with environmental and safety requirements may become more difficult to obtain, and changes in laws and regulations or the interpretation thereof may negatively affect the Property investments. The United States, State of California, and local jurisdictions in which the Properties are or will be located may face economic, social and/or political instability resulting from, among other things (many of which may be unforeseeable), (a) changes in governmental policies, (b) popular unrest, or (c) adverse inter-jurisdictional governmental relations. This may have a material adverse effect on the Partnership’s ability to achieve its investment objectives. Other Risks There are other risks associated with an investment in the Company, including conflicts of interest, certain legal and regulatory matters, U.S. Federal income tax considerations, and ERISA considerations. For additional information on these factors, please see sections “Conflicts of Interest”, “Certain Legal and Regulatory Matters”, “Certain U.S. Federal Income Tax Considerations”, and “Certain ERISA Considerations
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