0504015 Informal Interpretation

From: (redacted)
Sent: Wednesday, April 27, 2005 10:40 AM
To: Verne, B. Michael
Subject: 802.2 Real Estate Exemptions

Dear Mike,

Could you give clarification on the application of the 802.2 real estateexemptions as follows?

1. Property A consists of residential property (condominium units) and agarage. A proposed sale by Seller, however, contemplates only the sale of thegarage located on Property A to Buyer (the condominium units will be soldseparately to the public as individual units for residential purposes). Thegarage is intended for use - for a fee - by both the residents of the buildingand the general public. Ownership interests in the LLC which owns the garagewill be sold as part of the transaction; a garage business will not be sold aspart of the transaction.

* Would the sale ofthe garage contained within residential and office property, but sold separatelyfrom such residential or office property, qualify for the 802.2(d)(2)(iii)exemption?

2. Property B consists of residential property and qualifies for the 802.2(d)exemption. Property C is situated next to Property B, and has generated totalrevenues of less than $5 million during the preceding 36 months. Please assumeproperties B and C have the same UPE and the Size of Transaction and Partytests would be met.

* I understand thatif C were sold on its own, it would qualify for the 802.2(c) unproductive realproperty exemption. If both properties are sold in a transaction to the sameAcquiring Person, however, could Property C still qualify? Since it is adjacentto Property B (not unproductive real property that is included in thetransaction), I presume C can not qualify for the exemption, but wanted todetermine if B's exempt status had any effect on the analysis.