UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2012~~2013

Commission File Number: 000-51291

Behringer Harvard Short-Term Opportunity Liquidating Trust (Exact Name of Registrant as Specified in Its Charter)

(Exact Name of Registrant as Specified in Its Charter)

Delaware	71-0897614
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer
	Identification No.)

15601 Dallas Parkway, Suite 600, Addison, Texas 75001 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (866) 655-1620

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (866) 655-1620

Securities registered pursuant to section 12(b) of the Act:

None

Securities registered pursuant to section 12(g) of the Act:

None *

Indicate by check ~~mark~~ mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o¨ No x

Indicate by check ~~mark~~ mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o¨ No o¨*

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes o No o*

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.45 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o*

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o*

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer o¨ Accelerated filer o¨ Non-accelerated filer o¨ (Do not check if a smaller reporting company) Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

~~While~~State ~~there is no established market therefore,~~ the aggregate market value of ~~limited~~the voting ~~partnership~~and ~~interests~~non-voting common equity held by ~~nonaffiliates~~non-affiliates ofcomputed ~~the~~by ~~Behringer~~reference ~~Harvard~~to ~~Short-Term~~the ~~Opportunity Fund~~price Iat LPwhich asthe ofcommon ~~June~~equity 30was last sold, ~~2012~~or (the ~~last~~average ~~business~~bid ~~day~~and ofasked ~~its~~price ~~most~~of ~~recently~~such ~~completed~~common ~~second~~equity ~~fiscal~~as ~~quarter)~~of ~~was~~June $430,~~321,536,~~ ~~assuming a market value of $0~~2013.40 ~~per~~Not ~~unit of limited partnership interest~~applicable.*

As of March 19, ~~2013~~2014, there were 10,803,839 units of beneficial interest in Behringer Harvard Short-Term Opportunity Liquidating Trust outstanding.

*Behringer Harvard Short-Term Opportunity Liquidating Trust is the transferee of the assets and liabilities of Behringer Harvard Short-Term Opportunity Fund I LP and files reports under ~~the~~ the Securities and Exchange Commission file number for Behringer Harvard Short-Term Opportunity Fund I LP. Behringer Harvard Short-Term Opportunity Fund I LP filed a Form 15 on February 11, 2013 indicating its notice of termination of registration and filing requirements.

BEHRINGER HARVARD SHORT-TERM OPPORTUNITY LIQUIDATING TRUST

FORM 10-K

Year Ended December 31, ~~2012~~2013

		Page
PART I	~~PART I~~
Item 1.	Business.	4
Item 1A.	Risk Factors.	8
Item 1B.	Unresolved Staff Comments.	2524
Item 2.	Properties.	2524
Item 3.	Legal Proceedings.	2624
Item 4.	Mine Safety Disclosures.	2624
PART II	~~PART II~~
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	2724
Item 6.	Selected Financial Data.	2925
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2925
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk.	3728
Item 8.	Financial Statements and Supplementary Data.	3729
Item 9.	Changes in and Disagreements ~~With~~with Accountants on Accounting and Financial Disclosure.	3729
Item 9A.	Controls and Procedures.	3829
Item 9B.	Other Information.	3829
PART III	~~PART III~~
Item 10.	Directors, Executive Officers and Corporate Governance.	3930
Item 11.	Executive Compensation.	4232
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	4232
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	4333
Item 14.	Principal Accountant Fees and Services.	4434
PART IV	~~PART IV~~
Item 15.	Exhibits, Financial Statement Schedules.	4535
Signatures		4636

Forward-Looking Statements

Certain statements in this Annual Report on Form 10-K constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements include discussion and analysis of the financial condition of Behringer Harvard Short-Term Opportunity Liquidating Trust (which may be referred to herein as the “Liquidating Trust,” “we,” “us,” or “our”) as successor in interest to Behringer Harvard Short-Term Opportunity Fund I LP (which may be referred to herein as the “Partnership”) and our subsidiaries, including our ability to rent space on favorable terms, to address our debt maturities and to fund our liquidity requirements, the value of our assets, our anticipated capital expenditures, the amount and timing of anticipated future distributions to our beneficiaries and other matters. Words such as “may,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “could,” “should” and variations of these words and similar expressions are intended to identify forward-looking statements.

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of our management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution our beneficiaries not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under “ Item 1A. Risk Factors” in this Annual Report on Form 10-K and the factors described below:

adverse market and economic challenges experienced by the U.S. economy or real estate industry as a whole and the local economic conditions in the markets in which our properties are located;

the availability of cash flow from operating activities for capital expenditures;

our level of debt and the terms and limitations imposed on us by our debt agreements;

the availability of credit generally, and any failure to refinance or extend our debt as it comes due or a failure to satisfy the conditions and requirements of that debt;

the need to invest additional equity in connection with debt refinancings as a result of reduced asset values and requirements to reduce overall leverage;

future increases in interest rates;

our ability to retain our executive officers and other key personnel of our managing trustee, our property manager and their affiliates;

conflicts of interest arising out of our relationships with our managing trustee and its affiliates;

changes in the level of financial assistance or support provided by our sponsor or its affiliates; and

unfavorable changes in laws or regulations impacting our business or our assets.

Forward-looking statements in this Annual Report on Form 10-K reflect our management’s view only as of the date of this Report, and may ultimately prove to be incorrect or false. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results except as required by applicable law. We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act.

Cautionary Note

The representations, warranties and covenants made by us in any agreement filed as an exhibit to this Annual Report on Form 10-K are made solely for the benefit of the parties to the agreement, including, in some cases, for the purpose of allocating risk among the parties to the agreement, and should not be deemed to be representations, warranties or covenants to or with any other parties. Moreover, these representations, warranties or covenants should not be relied upon as accurately describing or reflecting the current state of our affairs.

PART I

Explanatory Note

As more fully described below, ~~subsequent to December 31, 2012 but prior to the date of filing of this Annual Report~~ on ~~Form 10-K~~February 11, 2013, ~~the~~ Behringer Harvard Short-Term Opportunity Fund I LP (referred to herein as the “Partnership”) completed its liquidation pursuant to a Plan of Liquidation adopted by its general partners. The plan provides for the formation of a liquidating trust for the purpose of completing the liquidation of the assets of the Partnership. On February 11, 2013, ~~the~~ Behringer Harvard Short-Term Opportunity Liquidating Trust (referred to herein as the “Liquidating Trust,” “we,” “us,” or “our”) was formed, and the Partnership transferred all of its remaining assets and liabilities ~~to the Liquidating Trust.~~ ~~This Annual Report on Form 10-K, including the accompanying unaudited consolidated financial statements and notes thereto as of December 31, 2012 with respect~~ to the ~~Partnership, is being prepared and filed by the~~ Liquidating Trust ~~as successor in interest to the Partnership~~.

Item 1.

Business.

General Description of Business

The Partnership was a limited partnership formed in Texas on July 30, 2002. Its general partners were Behringer Harvard Advisors II LP (“Behringer Advisors II”) and Robert M. Behringer (each a “General Partner” and collectively, the “General Partners”). It was funded through capital contributions from its General Partners and an initial limited partner on September 20, ~~2002~~ 2002 (the date of inception). It offered its limited partnership units pursuant to a public offering which commenced on February 19, 2003 and terminated on February 19, 2005 (the “Offering”). The Offering was a best efforts continuous offering, and the Partnership admitted new investors until the termination of the Offering.

The Partnership used the proceeds from the Offering, after deducting offering expenses, to acquire interests in twelve properties, including seven office building properties ~~(one of which has been converted to a data center)~~, one shopping/service center, aone hotel redevelopment with an adjoining condominium development, two development properties and undeveloped land. The Partnership engaged an unaffiliated third party to manage the day-to-day operations of the hotel. As of December 31, ~~2012~~2013, two of the twelve properties acquired remain in the Partnership’s portfolio. The Partnership ~~disposed~~did not dispose of ~~four~~any ~~properties~~property during the twelve months ended December 31, ~~2012~~2013. ~~and~~As asof aDecember ~~result~~31, 2013, only the hotel (and its retail component), approximately five acres of land and the back-end promoted interest in distributable cash to one ~~two~~ sold ~~properties~~property remain in the portfolio, which has been transferred to the Liquidating Trust as described below. We will not purchase any additional properties for our portfolio.

Effective as of January 31, 2013, Mr. Behringer ceased to be a general partner of the Partnership due to a permanent disability resulting in an Event of Withdrawal under the Partnership’s Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”). Effective that same date, Mr. Behringer also resigned as Chairman of Behringer Advisors II.

On February 11, 2013, the sole remaining General Partner, Behringer Advisors II, in its sole discretion organized us as a Delaware statutory trust for the purpose of winding up the Partnership’s affairs and liquidating the Partnership’s assets, including, but not limited to, the sale of its remaining real estate assets, to make appropriate provision for the Partnership’s remaining obligations and to make special distributions to our investors of available liquidation proceeds.

Our office is located at 15601 Dallas Parkway, Suite 600, Addison, Texas 75001, and our toll-free telephone number is (866) 655-~~1620~~3600. The name Behringer Harvard is the property of Behringer Harvard Holdings, LLC (“Behringer Holdings”) and is used by permission.

Liquidation of the Partnership

On February 11, 2013 (the “Effective Date”), the Partnership completed its liquidation pursuant to a Plan of Liquidation (the “Plan”) adopted by Behringer Advisors II, as its General Partner pursuant to its authority under the Partnership Agreement, which provided for our formation as a liquidating trust for the purpose of completing the liquidation of the assets of the Partnership.

In furtherance of the Plan, the Partnership entered into a Liquidating Trust Agreement (the “Liquidating Trust Agreement”) with the Partnership’s General Partners, Behringer Advisors II, as managing trustee (the “Managing Trustee”), and CSC Trust Company of Delaware, as resident trustee (the “Resident Trustee”). As of the Effective Date, each of the holders of limited partnership units in the Partnership received a pro rata beneficial interest unit in the Liquidating Trust in exchange for such holder’s interest in the Partnership.

In accordance with the Plan and the Liquidating Trust Agreement, the Partnership transferred all of its remaining assets and ~~liabilities~~ liabilities to the Liquidating Trust to be administered, disposed of or provided for in accordance with the terms and conditions set forth in the Liquidating Trust Agreement. On the Effective Date, the Partnership filed a Form 15 with the Securities and Exchange Commission (“SEC”) to terminate the registration of the limited partnership units in the Partnership under the Exchange Act and announced it would cease filing reports under that Act. On March 28, 2013 we were granted No-Action relief from the SEC regarding our proposed modified reporting. A copy of the No-Action letter is publicly available through the SEC’s website. Accordingly , our Managing Trustee will file with the SEC annual reports on Form 10-K that contain unaudited financial statements based on the liquidation basis of accounting and current reports on Form 8-K to disclose material events relating to us. For purposes of the financial statements included in this Annual Report on Form 10-K, under the liquidation basis of accounting, all assets were adjusted to their estimated fair value (on an undiscounted basis) and liabilities, including estimated costs associated with implementing the Plan, were adjusted to their estimated settlement amounts as of January 1, 2013. We chose to adjust items to their fair values as of January 1, 2013 as a matter of convergence, efficiency and materiality.

The Liquidating Trust will terminate upon the earliest of (i) the distribution of all of our assets in accordance with the terms of the Liquidating ~~Trust~~ Trust Agreement, or (ii) the expiration of a period of three years from the Effective Date. The term may be extended beyond the ~~three~~ three-year term if our Managing Trustee determines that an extension is reasonably necessary to wind up our affairs.

Market Outlook

~~During~~2013 ~~2012,~~marked the ~~U.S.~~fourth ~~economic recovery,~~consecutive ~~although~~year ~~still~~of ~~slow~~growth byfor ~~most measures, survived uncertainties over~~ the ~~general~~U.S. ~~election~~economy and the ~~fiscal~~lodging ~~cliff and exhibited visible improvements in many fundamentals~~industry. ~~One~~Overall, of the ~~more~~lodging ~~important~~industry ~~factors~~benefited ~~was~~from ~~the stabilization of the housing sector,~~ a ~~sector that~~navigable ~~historically has been important in prior~~ economic ~~recoveries~~landscape. InIndustry ~~the~~demand ~~second~~increased ~~half~~by ~~of the year, home price indexes for the largest 20 cities in the U~~2.~~S. had recovered to 2003 levels. While these are still not at pre-recession highs~~2%, ~~these are levels that show improvement in inventories, foreclosures~~ and ~~distressed~~was ~~sales.~~slightly ~~With~~offset ~~recent~~by ~~government initiatives to encourage private investment of single family homes, many analysts are projecting~~ a ~~faster pace to clear the supply of foreclosed and vacant properties~~0.7% ~~Other improvements~~increase ~~were made~~ in ~~factory output, particularly autos and other durable goods, corporate profits and modest gains in employment~~supply. ~~Regarding~~ ~~employment,~~Smith ~~the economy averaged 165,000 new jobs in the fourth quarter of 2012, higher than prior quarters, but because~~Travel ~~that~~Research isindicates ~~barely exceeding new workers entering the market, it is a level~~ that isduring ~~consistent~~2013 ~~with a slow, gradual recovery. Also helping~~ the U.S. ~~are~~hotel ~~improvements,~~industry's oroccupancy atincreased ~~least~~1.5% ~~stabilization,~~to ~~of global economic issues~~62.3% ~~The~~while ~~European~~the ~~debt~~national ~~crisis, which created~~overall ~~uncertainty~~ADR ~~over~~increased ~~sovereign~~3.9% ~~defaults~~to $110.35 and ~~departures~~RevPar ~~from~~grew ~~the~~5.9% ~~Euro~~to ~~and~~$68.69. ~~European~~Smith ~~Union~~Travel ~~that~~Research ~~were~~indicates ~~constant~~that ~~drags~~during on2013 the ~~U.S. economy~~occupancy ~~for~~increased ~~the~~1.1% ~~last~~to ~~couple~~66.1% offor ~~years,~~our ~~has~~competitive ~~now~~set ~~reached~~in ~~a point where~~ the ~~worst~~Dallas ofhotel ~~the~~market ~~scenarios~~while ~~appear less likely. Global growth, as forecast by~~ the ~~World~~ADR ~~Bank,~~increased ~~is projected at 2~~9.41% ~~for~~to ~~2013~~$174.33 ~~This~~and ~~compares~~RevPar grew ~~to an expected 2~~10.3% ~~for 2012 and while less than earlier projections, is not expected~~ to ~~be a serious drag on the U~~$115.S20.

~~Offsetting~~Hotel ~~these~~operations ~~factors~~depend ~~and~~on likely contributors to a slower, moderate recovery are uneven private consumption, as individual savings rates continue to rise; continued decline in new business creation, as investors are reluctant to increase their risk capital; and decreases in the ~~labor~~state ~~force, as the long~~of ~~term unemployed are not returning to~~ the ~~work~~overall ~~force~~economy ~~and~~which ~~may~~can besignificantly ~~structurally~~impact ~~unemployed.~~hotel ~~Also,~~operational ~~there~~performance ~~is concern over the consequences~~ and ~~uncertainty related to political gridlock~~thus, ~~which~~impact ~~was~~our ~~reported~~financial ~~as a major factor in the negative GDP report for the fourth quarter of 2012~~position. ~~The~~As ~~debate over the debt limit appears to be continuing for an extended period and risks a downgrade of U.S. credit and~~such, ~~increased borrowing costs. The federal government has not passed a budget in~~ the ~~last~~hotel ~~four~~industry ~~years~~is ~~and~~expected ~~appears~~ to becontinue ~~in a prolonged debate over spending and tax levels. We believe that businesses and consumers tend~~ to besee ~~very~~modest ~~conservative~~growth ~~when~~in ~~confronted with these kinds of issues, which could disrupt what could otherwise be a stronger recovery~~2014. OnShould ~~a net basis,~~ we ~~believe~~experience ~~the U.S. economy can overcome~~ a ~~certain~~significant ~~degree~~decline ofin ~~these issues, and with most analysts, we expect a moderate, but uneven U.S. growth for the near~~operational ~~term. However~~performance, ~~these~~it ~~issues~~may ~~have~~affect ~~the~~our ~~potential~~ability to bemake ~~very~~distributions ~~significant~~ to ~~the~~our ~~economy~~beneficiaries.

Our primary objectives will be to continue to preserve value, protecting and selling our remaining assets, providing for our liabilities and distributing the remaining proceeds. Our ability to dispose of our properties will be subject to various factors, including the ability of ~~potential~~ potential purchasers to access capital debt financing. If we are unable to sell a property when we determine to do so, it could have a significant adverse effect on ~~our cash flows and results of operations. Given~~ the ~~disruptions~~timing ~~in the capital markets and the current lack~~ of ~~available~~ ~~credit,~~ our ~~ability~~final toliquidating ~~dispose~~distributions ofto our ~~properties may be delayed, or we may receive lower than anticipated returns~~beneficiaries.

Unit Valuation

The Partnership Agreement required that the General Partners annually provide the Partnership’s limited partners with an estimate of the amount a holder of limited partnership units would receive if its properties were sold at their fair market values as of the close of the fiscal year, and the proceeds from the sale of the properties (without reduction for selling expenses), together with other funds of the Partnership, were distributed in a liquidation. As of December 29, 2011, the General Partners estimated a value of $0.40 per limited partnership unit.

On December 14, 2012, one of the Partnership’s General Partners, Behringer Advisors II, adopted an estimated value per limited partnership unit of $1.93 per unit. As part of the General Partner’s valuation process, and as required by the Partnership Agreement, the General Partner obtained the opinion of an independent third party, Robert A. Stanger & Co., Inc. (“Stanger”), that the estimated valuation was reasonable and was prepared in accordance with appropriate methods for valuing real estate. Stanger, founded in 1978, is a nationally recognized investment banking firm specializing in real estate, REITs and direct participation programs such as the Partnership’s.

Stanger’s opinion was expressed from a financial point of view and was subject to various limitations. Stanger relied on information provided by the General Partner without independent verification and did not perform appraisals, did not inspect the properties or review engineering or structural studies, environmental studies, and did not make independent local market inquiries. Stanger relied on information from the General Partner regarding lease terms and the physical condition and capital expenditure requirements of each property. Please see Item 5. “Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities” for additional information regarding our most recent estimated unit valuation.

On the Effective Date, when the Partnership’s assets and liabilities were transferred to us, the economic value of each beneficial interest unit was equivalent to the economic value of one limited partnership unit in the Partnership. The most recent estimated value per limited partnership unit as of December 14, 2012 should not be relied upon after such date, as we continue to sell our remaining assets. Because we are actively in the process of completing the disposition of our remaining properties as soon as practicable, we will not continue the Partnership’s practice of making annual estimated valuations under the terms of the Liquidating Trust Agreement.

Disposition Policies and Objectives

The Liquidating Trust Agreement provides for a three -year period to liquidate our remaining assets. Our Managing Trustee is working diligently to liquidate these assets in a manner that makes sense for our beneficiaries, and expects that the disposition of these assets will be completed before the end of this three -year period. However, we intend to hold our various real properties until such time as sale or other disposition appears to be advantageous to achieve our disposition objectives or until it appears that such objectives will not be met. In deciding whether to sell our properties, we will consider factors such as potential capital appreciation, cash flow, ~~future~~ future capital expenditure costs and federal income tax considerations. We will also consider the current state of the general economy, and whether waiting to dispose of a property will allow us to realize additional value for our beneficiaries. Our Managing ~~Trustee~~ Trustee may exercise its discretion as to the timing of the sale of a property. We will have no obligation to sell ~~properties~~our properties at any particular time, except upon the termination of our existence on February 11, 2016, or, after such date if our Managing Trustee determines that an extension is reasonably necessary to wind up our affairs.

Pursuant to the Liquidating Trust Agreement, our primary objective is limited to conserving value, protecting and selling our remaining assets, providing ~~for~~ for our liabilities and distributing the remaining proceeds ~~therefrom~~there from. Thus, cash flow from operations will not be invested in ~~the~~ the acquisition of properties. ~~Thus,~~We we are intended to be self-liquidating in nature. However, at the discretion of our Managing Trustee, cash flow and/or net sales proceeds may be held as working capital to pay expenses or other liabilities of the Liquidating Trust or used to make capital improvements to our existing properties.

The Liquidating Trust will not pay, directly or indirectly, any commission or fee, except as specifically permitted under Article VI of the Liquidating Trust Agreement, to our Managing Trustee or its affiliates in connection with the distribution of proceeds from the sale, exchange or financing of our properties.

Although not required to do so, we will generally seek to sell our real estate properties for cash. We may, however, accept terms of payment from a buyer that include purchase money obligations secured by mortgages as partial payment, depending upon then-prevailing economic conditions customary in the area in which the property being sold is located, credit of the buyer and available financing alternatives. Some properties we sell may be sold on an installment basis under which only a portion of the sale price will be received in the year of sale, with subsequent payments spread over a number of years. In such event, our full distribution of the net proceeds of any sale may be delayed until the notes are paid, sold or financed.

Generally, we do not anticipate selling our assets until we feel it is the right time to dispose of an asset, or we feel that the economy has improved, and we have the opportunity to realize additional value. Our Managing Trustee intends to use all reasonable efforts to realize value for our beneficiaries. We are diligently working to increase net operational performance at our hotel property and renew or secure retail leases with quality tenants to increase net operating income and the ultimate value of our assets and to execute on other value creation strategies.

Conflicts of Interest

We are subject to various conflicts of interest arising out of our relationship with our Managing Trustee and its affiliates, including conflicts related to the arrangements pursuant to which our Managing Trustee and its affiliates will be compensated by us. All of our agreements and arrangements with our Managing Trustee and its affiliates, including those relating to compensation, are not the result of arm’s-length negotiations. Some of the conflicts of interest in our transactions with our Managing Trustee and its affiliates are described below.

Our Managing Trustee is Behringer Advisors II, one of the former General Partners of the Partnership. Mr. Robert M. Behringer, the other former General Partner of the Partnership, owns a controlling interest in Behringer Holdings, a Delaware limited liability company that indirectly owns all of the outstanding equity interests of Behringer Advisors II, our property managers and Behringer Securities LP (“Behringer Securities”), the dealer manager for the Offering. Robert S. Aisner, ~~Robert J. Chapman, Gerald J. Reihsen, III,~~ Gary S. Bresky and M. Jason Mattox are executive officers of Harvard Property Trust, LLC (“HPT”), the sole general partner of Behringer Advisors II, and Behringer Securities. In addition, Mr. Bresky is an executive officer of Behringer Securities.

Because we will be operated by our Managing Trustee, conflicts of interest will not be resolved through arm’s-length negotiations, but through the exercise of our Managing Trustee’s judgment consistent with its fiduciary responsibility to our beneficiaries and our disposition objectives and policies. For a description of some of the risks related to these conflicts of interest, see ~~the~~ “Item 1A. “Risk Factors” ~~section~~ of this Annual Report on Form 10-K. For a discussion of the conflict resolution policies, see ~~the~~ “Item 13. “Certain Relationships and Related Transactions, and Director Independence” ~~section~~ of this Annual Report on Form 10-K.

Interests in Other Real Estate Programs

Our Managing Trustee and its affiliates (collectively, “Behringer”) are sponsors, general partners and advisors of other Behringer ~~Harvard~~ programs, including real estate programs that have investment objectives similar to ours, and we expect that they will organize other such programs in the future. Our Managing Trustee and such affiliates have legal and financial obligations with respect to these other programs that are similar to their obligations to us. As general partners of other programs, they may have contingent liabilities for the obligations of other programs structured as partnerships, as well as our obligations, which, if such obligations were enforced against them, could result in substantial reduction of their net worth.

Other Activities of Our Managing Trustee and its Affiliates

We rely on our Managing Trustee and its affiliates for the day-to-day operation of our business. As a result of their interests in other Behringer ~~Harvard~~ programs and the fact that they have also engaged and will continue to engage in other business activities, our Managing Trustee and its affiliates will have conflicts of interest in allocating their time between us and other Behringer ~~Harvard~~ programs and other activities in which they are involved. In addition, our Liquidating Trust Agreement does not specify any minimum amount of time or level of attention that our Managing Trustee must devote to us. However, our Managing Trustee believes that it and its affiliates have sufficient personnel to discharge fully their responsibilities to all of the Behringer ~~Harvard~~ programs and other ventures in which they are involved.

Competition in Leasing Properties

Conflicts of interest will exist to the extent that we own properties in the same geographic areas where properties owned by our Managing Trustee, its affiliates or other Behringer ~~Harvard~~ programs are located. In such a case, a conflict could arise in the leasing of our properties in in the event that we and another Behringer ~~Harvard~~ program were to compete for the same tenants in negotiating leases, or a conflict ~~could~~ could arise in connection with the resale of properties in the event that we and another Behringer ~~Harvard~~ program were to attempt to sell similar properties at the same time. Conflicts of interest may also exist at such time as we or our affiliates managing properties on our behalf seek to employ developers, contractors or building managers, and other circumstances. Our Managing Trustee will seek to reduce conflicts relating to the employment of developers, contractors or building managers by making prospective ~~employees~~ employees aware of all such properties seeking to employ such persons. In addition, our Managing Trustee will seek to reduce conflicts ~~that~~ that may arise with respect to properties available for sale or rent by making prospective purchasers or tenants aware of all such properties. However, these conflicts cannot be fully avoided in that there may be differing compensation arrangements established for employees at different properties or differing terms for resale or leasing of the various properties.

Affiliated Property Managers

Our properties ~~are~~may be or have been managed and leased by HPT Management Services LLC, Behringer Harvard Short-Term Management Services, LLC or Behringer Harvard Real Estate Services, LLC, our affiliated property managers, or their affiliates (individually or collectively referred to as “Property Manager”). The Partnership’s agreements with our Property Manager expired in June 2010, but automatically extended for successive seven year terms. We succeeded to these agreements on the Effective Date. We can terminate the agreements only in the event of gross negligence or willful misconduct on the part of the Property Manager or upon sale of the property. HPT Management Services LLC and Behringer Harvard Real Estate Services, LLC also serve, and will continue to serve, as property manager for properties owned by affiliated real estate programs, some of which may be in competition with our properties. Management fees to be paid to our Property Manager are based on a percentage of the rental income received by the managed properties.

Regulations

Our investments are subject to various federal, state and local laws, ordinances and regulations, including, among other things, zoning regulations, land use controls, environmental controls relating to air and water quality, noise pollution and indirect environmental impacts such as increased motor vehicle activity. We believe that we have all permits and approvals necessary under current law to operate our investments.

Environmental

As an owner of real estate, we are subject to various environmental laws of federal, state and local governments. Compliance with existing laws has not had a material adverse effect on the ~~Partnership’s~~our financial condition or results of operations, and management does not believe it will have such an impact in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on properties in which we hold an interest.

Significant Tenants

As of December 31, ~~2012~~2013, ~~four~~ retail tenants at ~~Hotel Palomar accounted for 10% or more of~~ our ~~aggregate~~hotel ~~annual rental revenues from our consolidated properties. Exhale Enterprises VIII~~property, ~~Inc.,~~Hotel ~~a New York based spa~~Palomar, accounted for ~~33%~~less or $0.2 million of our rental revenue for the year ended December 31, 2012 under a lease that expires April 2020. DD+JJ Productions, LLC, a local full service salon, accounted for approximately 24% or more than ~~$0.1 million of our rental revenue under a lease that expires April 2022. Mint Dentistry, a local dental office, accounted for approximately 14~~10% ~~or less than $0.1 million~~ of our ~~rental~~aggregate annual revenues ~~under~~from ~~a lease that expires January 2020. In addition, Brackets, LLC, a local restaurant, accounted for 11% or less than $0.1 million of~~ our ~~rental revenues~~ ~~for~~consolidated ~~the year ended December 31, 2012 under a lease that expired during 2012~~properties. During the year ended December 31, 2011, Brackets, LLC accounted for 27% or approximately $0.2 million, Exhale Enterprises VIII, Inc. accounted for approximately 24% or less than $0.2 million and DD+JJ Productions, LLC accounted for approximately 20% or less than $0.2 million of our rental revenue.

Employees

We have no employees. The employees of our Managing Trustee, Behringer Advisors II, and other affiliates of Behringer Holdings perform a full range of of real estate services for us, including property management, accounting, legal, asset management and investor relations.

We are dependent on our affiliates for services that are essential to us, including disposition decisions, property management and leasing services and other general and administrative responsibilities. In the event that these companies are unable to provide these services to us, we would be required to obtain such services from other sources.

Financial Information About Industry Segments

Our current business consists only of owning, managing, operating, leasing, developing, and disposing of real estate assets. We internally evaluate all of our real estate assets as one industry segment, and, accordingly, we do not report segment information.

Available Information

We electronically file an annual report on Form 10-K and current reports on Form 8-K and all amendments to those reports with the ~~Securities~~SEC. The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F. Street, NE, Washington, ~~Exchange~~D.C. ~~Commission~~20549, (“on official business days during the hours of 10:00 am to 3:00 pm. The public may obtain information on the operation of the Public Reference Room by calling the SEC”) at 1-800-SEC-0330. Copies of our filings with the SEC, as well as the Partnership’s prior filings, may be obtained from the web site maintained for us by our ~~managing~~Managing ~~trustee~~Trustee at http://www.~~behringerharvard~~behringerinvestments.com or at the SEC’s ~~web~~website ~~site~~ at http://www.sec.gov. Access to these filings is free of charge. As part of the creation of the ~~Liquidating~~ Liquidating Trust, we requested, and on ~~March~~ March 28, 2013 were granted, No-Action relief from the SEC regarding our proposed modified reporting. In accordance with this No-Action relief, we are not required to file ~~Quarterly~~quarterly ~~Reports~~reports on Form 10-Q with the SEC. A copy of the No-Action letter may also be obtained through the SEC’s website. We are not incorporating our website or any information from the website into this Form 10-K.

~~Item 1A. Risk Factors.~~7

~~Risks~~Item ~~Related~~1A. toRisk ~~our Liquidation and your Investment in Behringer Harvard Short-Term Opportunity Liquidating Trust~~Factors.

~~The~~Risks ~~factors~~Related ~~described below~~to ~~represent~~ our ~~principal~~Liquidation ~~risks. Other factors may exist that we do not consider to be significant based on information that~~and isyour ~~currently~~Investment ~~available~~in orBehringer ~~that~~Harvard weShort-Term ~~are~~Opportunity ~~not~~Liquidating currently able to anticipate. The occurrence of any of the risks discussed below could have a material adverse effect on our business, financial condition, results of operations and ability to pay distributions to our unitholders.Trust

~~Our~~The ~~units~~factors ~~have~~described below ~~limited~~represent our principal risks. Other factors may exist that we do not consider to be significant based on information that ~~transferability~~is ~~and~~currently ~~lack~~available ~~liquidity~~or that we are not currently able to anticipate. The occurrence of any of the risks discussed below could have a material adverse effect on our business, financial condition, results of operations and ability to pay distributions to our beneficiaries.

~~There~~Our ~~is no established trading market for our~~ units ofhave ~~beneficial interests, and we do not expect that one will develop. Except for certain~~limited ~~transfers~~transferability by will, intestate succession or operation of law, or from a qualified account to a non-qualified account if necessary to allow holders of beneficial interests to comply with certain IRA required minimum distribution requirements under the Internal Revenue Code, if applicable, beneficial interests in the Liquidating Trust are not transferable, and ~~beneficiaries~~lack ~~do not have authority or power to sell or in any other manner dispose of their beneficial interests~~liquidity.

WeThere ~~are~~is ~~limited~~no established intrading ~~the~~market ~~number~~for ~~and~~our ~~type~~units of ~~properties~~beneficial ininterests, ~~which~~and we ~~have~~ ~~invested~~do ~~and~~not ~~the~~expect ~~value~~that ofone ~~the~~will ~~beneficiaries’~~develop. Except ~~investments~~for certain transfers by will, intestate succession or operation of law, or from a qualified account to a non-qualified account if necessary ~~fluctuate~~to allow holders of beneficial interests to comply with certain individual retirement account (“IRA”) minimum distribution requirements under the ~~performance~~Internal ofRevenue Code, if applicable, beneficial interests in the ~~specific~~Liquidating ~~investments~~Trust ~~made~~are not transferable, and our beneficiaries do not have authority or power to sell or in any other manner dispose of their beneficial interests.

~~Currently,~~We weare ~~hold two~~limited ~~real estate investments, resulting~~ in ~~less diversification in terms of~~ the number ofand ~~investments~~type ~~owned,~~of ~~the~~properties ~~geographic regions~~ in which ~~our~~we have ~~investments~~invested ~~are located~~ and the ~~types~~value of ~~investments~~our ~~that~~beneficiaries’ weinvestments ~~made. As~~will ~~a result, the likelihood of our profitability~~fluctuate ~~being~~with ~~affected by~~ the performance of ~~any one of our investments has increased. The investment in our units will be subject to greater risk to~~ the ~~extent~~specific ~~that we lack a diversified portfolio of~~ investments~~. In~~ ~~addition, our fixed operating expenses, as a percentage of gross income, are higher, and our financial condition and ability to pay distributions may be adversely affected~~made.

8The Partnership formerly held interests in twelve properties. However, as of December 31, 2013, we hold only two of the twelve properties. The reduction in number of properties held has resulted in less diversification in terms of the number of investments owned, the geographic regions in which our investments are located and the types of investments that we made. As a result, the likelihood of our profitability being affected by the performance of any one of our investments has increased. The investment in our units will be subject to greater risk to the extent that we lack a diversified portfolio of investments. In addition, our fixed operating expenses, as a percentage of gross income, have increased as a result of the reduction in number of properties held, and our financial condition and ability to pay distributions may be adversely affected.

Our beneficiaries should view their investments as long-term in nature.

Our units lack a public trading market and are subject to transfer restrictions. Although our Liquidating Trust Agreement provides for a three -year period to liquidate the remaining ~~four~~ assets, the Managing Trustee is working diligently to liquidate these assets in a manner ~~that~~ that makes sense for ~~the~~our beneficiaries, and expects that disposition of these assets will be completed before the end of this three -year period. However, we may choose to wait to sell any or all of the properties we now hold and our existence may be ~~extended~~ extended beyond the three -year term if our Managing Trustee determines that an extension is reasonably necessary to wind up our affairs. We expect that net proceeds from the sale of our properties will generally be distributed to our beneficiaries unless needed for working capital resources and capital improvements. For each of these reasons, our beneficiaries should view their investment in units strictly as a long-term investment.

If we lose or are unable to obtain key personnel, our ability to implement our disposition strategies could be delayed or hindered.

Our success depends to a significant degree upon the continued contributions of certain key personnel of the general partner of Behringer Advisors II, HPT, who would be difficult to replace. Although HPT has employment agreements with its key personnel, these agreements are terminable at will, and we cannot guarantee that such persons will remain affiliated with HPT or us. If any of HPT’s key personnel were to cease employment, our operating results could suffer. We believe that our future success depends, in large part, upon HPT’s ability to hire and retain highly skilled managerial, operational and marketing personnel. Competition for such personnel is intense, and we cannot assure beneficiaries that HPT will be successful in attracting and retaining such skilled personnel. Further, our Managing Trustee intends to establish strategic relationships with firms that have special expertise in certain services or as to real properties in certain geographic regions. Maintaining such relationships will be important for us to effectively compete. We cannot assure beneficiaries that our Managing Trustee will be successful in attracting and retaining such relationships. If we lose or are unable to obtain the services of key personnel or do not establish or maintain appropriate strategic relationships, our ability to implement our strategies could be delayed or hindered.

~~Robert~~The ~~S. Aisner and the other~~ executive officers of HPT have a dominant role in determining what is in our best interests and, therefore, we will not have the benefit of independent consideration of issues affecting our operations.

Our Managing Trustee is Behringer Advisors II. Behringer Advisors II is managed by its general partner, HPT~~, for which Mr~~. ~~Aisner serves as President and Chief Executive Officer.~~ Therefore, ~~Mr. Aisner together with~~ the ~~other~~ executive officers of HPT ~~has~~ have a dominant role in determining what is in the best interests of us and our beneficiaries. Since no person other than Mr Robert S. Aisner and the other executive officers of HPT have any direct control over our management, we do not have the benefit of independent consideration of issues affecting our operations. Therefore, Mr. Aisner and the other executive officers of HPT alone will determine the propriety of their own actions, which could result in a conflict of interest when they are faced with any significant decision relating to our affairs.

~~Our Managing Trustee has a limited net worth consisting of assets that are not liquid, which may adversely affect the ability of our Managing Trustee to fulfill its financial obligations to us.~~8

~~The~~Our ~~net worth of our~~ Managing Trustee has ~~consists~~a ~~primarily~~limited ~~of interests in real estate, partnerships and closely held businesses. Accordingly, the~~ net worth consisting of ~~our~~assets ~~Managing~~that ~~Trustee~~are ~~is illiquid and~~ not ~~readily marketable. This illiquidity~~liquid, ~~and~~which ~~the fact that our Managing Trustee and its affiliates have commitments to other Behringer Harvard programs,~~ may adversely affect the ability of our Managing Trustee to fulfill its financial obligations to us.

~~Our~~The ~~rights~~net worth of our Managing Trustee consists primarily of interests in real estate, partnerships and closely held businesses. Accordingly, the ~~rights~~net worth of our ~~beneficiaries~~Managing Trustee is illiquid and not readily marketable. This illiquidity, and the fact that our Managing Trustee and its affiliates have commitments to ~~recover~~other ~~claims~~Behringer ~~against~~programs, may adversely affect the ability of our Managing Trustee ~~are~~to ~~limited~~fulfill its financial obligations to us.

Our ~~Liquidating Trust~~rights ~~Agreement~~and ~~provides that our Managing Trustee will have no liability for any action or failure to act that~~ the ~~Managing~~rights ~~Trustee in~~of ~~good faith determines was in~~ our ~~best~~beneficiaries ~~interest, provided its action or failure~~ to ~~act~~recover ~~did~~claims ~~not constitute gross negligence, willful misconduct or fraud. As a result, we and our beneficiaries may have more limited rights~~ against our Managing Trustee ~~than~~ ~~might~~are ~~otherwise exist under common law~~limited. ~~In addition, we may be obligated to fund the defense costs incurred by our Managing Trustee in some cases.~~

WeOur ~~may~~Liquidating Trust Agreement provides that our Managing Trustee will have no liability for any action or failure to act that the Managing Trustee in good faith determines was in our best interest, provided that its action or failure to act did not ~~successfully~~constitute gross negligence, ~~provide~~willful ~~beneficiaries~~misconduct ~~with~~or fraud. As a ~~liquidity~~result, ~~event~~we and our beneficiaries may have more limited rights against our Managing Trustee than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by our Managing Trustee in some cases.

~~Our~~We ~~current~~have ~~timeframe~~terminated our ~~for~~regular ~~liquidating~~monthly isdistributions ~~by 2016. Market conditions~~ and ~~other~~future ~~factors~~distributions ~~could~~will ~~cause~~be usdetermined toat ~~delay~~the ~~liquidation~~sole ~~beyond~~discretion ~~this~~of ~~period. If liquidation~~our isManaging ~~delayed, your units will continue to be illiquid~~Trustee.

IfThe ~~our~~terms ~~liquidation~~of the Liquidating ~~costs~~Trust orAgreement ~~unpaid~~do ~~liabilities~~not ~~are~~contemplate ~~greater~~that ~~than~~we will make monthly distributions. Rather, it is expected that from time to time we ~~expect~~will make special cash distributions to our beneficiaries, including in connection with the disposition of our remaining assets, to the extent that such cash will not be needed to provide for our liabilities (including contingent liabilities), in the sole discretion of our Managing Trustee. Liquidating distribution amounts of net proceeds received from sales of our remaining assets will generally depend on our anticipated cash needs to satisfy liquidating and other expenses, financial condition and capital requirements, and other factors our Managing Trustee may deem relevant. Our ability to pay distributions to our beneficiaries may be ~~delayed and/or~~adversely ~~reduced~~affected by the risks described herein.

~~Before~~We making the final liquidating distribution to our beneficiaries, we will need to pay or arrange for the payment of all of our transaction costs in the liquidation, and all other costs and all valid claims of our creditors. Our Managing Trustee may ~~also decide to acquire one or more insurance policies covering unknown or contingent claims against us, for which we would pay a premium which has~~ not ~~yet~~ ~~been~~successfully ~~determined.~~provide Our Managing Trustee may also decide to establish a reserve fund to pay these contingent claims. The total amount of transaction costs in the liquidation is not yet known. In addition, if the claims of our ~~creditors are greater than we have anticipated or we decide to acquire one or more insurance policies covering unknown or contingent claims against us, our liquidating distributions to our~~ beneficiaries ~~may~~with ~~be delayed and/or reduced. Further, if~~ a ~~reserve~~liquidity ~~fund is established, payment of liquidating distributions to our beneficiaries may be delayed and/or reduced~~event.

9Our current timeframe for liquidating is by 2016. Market conditions and other factors could cause us to delay liquidation beyond this period. If liquidation is delayed, your units will continue to be illiquid.

~~There~~If ~~can~~our beliquidation costs noor ~~assurance~~unpaid ~~that~~liabilities ~~the~~are ~~plan~~greater ofthan ~~liquidation~~we ~~will~~expect, ~~result~~our inliquidating ~~greater~~distributions ~~returns~~ to our beneficiaries onmay ~~their~~be ~~investment~~delayed ~~within~~and/or ~~a reasonable period of time, than our beneficiaries would receive through other alternatives reasonably available to us~~reduced.

~~While~~Before ~~the~~making ~~Partnership’s~~the ~~General~~final ~~Partners~~liquidating ~~each~~distribution ~~believed~~to ~~that~~our abeneficiaries, we will need to pay or arrange for the payment of all of our transaction costs in the liquidation, ~~would~~and beall ~~more~~other ~~likely~~costs toand ~~provide~~all valid claims of our ~~beneficiaries~~creditors. ~~with~~Our Managing Trustee may also decide to acquire one or more insurance policies covering unknown or contingent claims against us, for which we would pay a ~~greater~~premium ~~return~~which onhas ~~their~~not ~~investment~~yet ~~within~~been determined. Our Managing Trustee may also decide to establish a ~~reasonable~~reserve ~~period~~fund to pay these contingent claims. The total amount of ~~time~~transaction ~~than~~costs ~~our~~in ~~beneficiaries~~the ~~would~~liquidation ~~receive~~is ~~through~~not ~~other~~yet ~~alternatives~~known. In ~~reasonably~~addition, ~~available~~if the claims of our creditors are greater than we have anticipated or we decide to usacquire atone ~~the~~or ~~time~~more insurance policies covering unknown or contingent claims against us, ~~such~~our ~~belief~~liquidating ~~relied~~distributions ~~upon~~to ~~certain~~our ~~assumptions~~beneficiaries may be delayed and/or ~~judgments~~reduced. ~~concerning~~Further, ~~future~~if ~~events~~a ~~which~~reserve fund is established, payment of liquidating distributions to our beneficiaries may be ~~unreliable~~delayed and/or ~~incorrect~~ reduced.

~~The~~There can be no assurance that the plan of liquidation ~~may~~will ~~lead~~result in greater returns to ~~litigation~~our ~~which~~beneficiaries ~~could~~on ~~result~~their ininvestment ~~substantial~~within ~~costs~~a ~~and~~reasonable ~~distract~~period of time than our ~~Managing~~beneficiaries ~~Trustee~~would receive through other alternatives reasonably available to us.

~~Historically,~~While ~~extraordinary company actions by a company, such as~~ the ~~plan~~Partnership’s General ofPartners ~~liquidation,~~each ~~may~~believed ~~sometimes lead to securities class action lawsuits being filed against~~ that ~~company. We may become involved in this type of litigation as~~ a ~~result~~liquidation of the ~~plan~~Partnership ofthrough ~~liquidation.~~a Astransfer of ~~March~~assets ~~28, 2013,~~and noliabilities ~~such lawsuits relative~~ to ~~the plan of liquidation have been filed. However, if such~~ a ~~lawsuit~~liquidating trust iswould ~~filed~~be ~~against~~more ~~us, the litigation is~~ likely to beprovide ~~expensive~~our ~~and,~~beneficiaries ~~even~~with ifa wegreater ~~ultimately~~return ~~prevail,~~on ~~the~~their ~~process~~investment ~~will~~within ~~divert~~a ~~our~~reasonable ~~Managing~~period ~~Trustee’s~~of ~~attention~~time ~~from~~than ~~implementing the plan of liquidation and otherwise operating~~ our ~~business.~~beneficiaries Ifwould wereceive dothrough ~~not~~other ~~prevail~~alternatives inreasonably ~~any~~available ~~such~~to ~~lawsuit which may be filed against~~ us inat the ~~future~~time, ~~we may be liable for damages. In~~ such ~~event,~~belief werelied upon ~~cannot~~certain ~~predict~~assumptions ~~the~~and ~~amount~~judgments ofconcerning ~~any such~~future ~~damages;~~events ~~however,~~which ~~they~~ may be ~~significant~~unreliable ~~and~~or ~~may reduce our cash available for distribution to our beneficiaries~~incorrect.

~~Beneficiaries could~~The bePlan ~~liable~~may lead to litigation ~~the~~which ~~extent~~could ofresult ~~liquidating~~in ~~distributions~~substantial ~~received~~costs ~~from~~and usdistract ~~if contingent reserves are insufficient to satisfy~~ our ~~liabilities~~Managing Trustee.

IfHistorically, weextraordinary actions ~~fail~~by a company, such as the plan of liquidation, may sometimes lead to ~~create~~securities class action lawsuits being filed against anthat ~~adequate~~company. ~~contingency~~We ~~reserve~~may ~~for~~become ~~payment~~involved in this type of ~~our~~litigation ~~expenses~~as ~~and~~a ~~liabilities~~result of the Plan. As of March 27, or2014, ifno such lawsuits relating to the ~~contingency~~Plan ~~reserve~~have ~~and~~been ~~the~~filed. ~~assets~~However, ~~held by~~if ussuch ~~are~~a ~~less~~lawsuit ~~than~~is ~~the~~filed ~~amount~~against ~~ultimately~~us, ~~found~~the ~~payable~~litigation inis ~~respect~~likely ofto ~~expenses~~be expensive and, ~~liabilities~~even if we ultimately prevail, ~~each~~the ofprocess will divert our ~~beneficiaries~~Managing ~~could~~Trustee’s attention from implementing the Plan and otherwise operating our business. If we do not prevail in any such lawsuit which may be ~~held~~filed ~~liable~~against ~~for~~us in the ~~payment~~future, towe may ~~creditors~~be ofliable for damages. In such ~~beneficiary’s~~event, ~~pro~~we ~~rata~~cannot ~~portion~~predict the amount of ~~the~~any ~~excess~~such damages; however, ~~limited~~they tomay ~~the~~be ~~amounts~~significant and ~~previously~~may ~~received~~reduce byour ~~each~~cash ~~beneficiary~~available infor ~~distributions~~distribution ~~from~~to usour beneficiaries.

If a court holds at any time that we have failed to make adequate provision for our expenses and liabilities or if the amount ultimately required to be paid in respect of such liabilities exceeds the amount available from contingency reserve and our assets, our creditors could seek an injunction to prevent us from making distributions under the plan of liquidation on the grounds that the amounts to be distributed are needed to provide for the payment of our expenses and liabilities. Any such action could delay or substantially diminish the cash distributions to be made to beneficiaries under the Liquidating Trust Agreement.9

~~The~~Our ~~prior~~beneficiaries ~~performance~~could ofbe ~~real~~liable ~~estate~~to ~~investment~~the ~~programs~~extent ~~sponsored by affiliates~~ of ~~our~~liquidating ~~Managing~~distributions ~~Trustee~~received orfrom ~~former~~us ~~General~~if ~~Partners~~contingent ~~may~~reserves ~~not~~are beinsufficient anto ~~indication of~~satisfy our ~~future results~~liabilities.

~~Investors~~Similar ~~should~~to ~~not~~the liquidation ~~rely~~of ~~upon~~any ~~the~~fund, ~~past~~including ~~performance~~had ofwe ~~other~~remained ~~real~~as ~~estate~~a ~~investment~~partnership, ~~programs~~if ~~sponsored~~we byfail ~~Mr.~~to ~~Behringer,~~create an adequate contingency reserve for payment of our expenses ~~Managing~~and ~~Trustee~~liabilities, or ~~their~~if the contingency reserve and the assets held by us are less than the amount ultimately found payable ~~respective~~in ~~affiliates~~respect of expenses and liabilities, toeach ~~predict~~of our ~~future~~beneficiaries ~~results.~~could To be ~~successful~~held inliable ~~this~~for ~~market,~~the wepayment ~~must~~to creditors of such beneficiary’s pro rata portion of the excess, ~~among~~limited ~~other~~to ~~things:~~the amounts previously received by each beneficiary in distributions from us.

·If ~~attract,~~a ~~integrate,~~court ~~motivate~~holds at any time that we have failed to make adequate provision for our expenses and ~~retain~~liabilities ~~qualified~~or ~~personnel~~if the amount ultimately required to ~~manage~~be paid in respect of such liabilities exceeds the amount available from contingency reserve and our ~~day-~~assets, our creditors could seek an injunction to~~-day~~ ~~operations;~~prevent us from making distributions under the Plan on the grounds that the amounts to be distributed are needed to provide for the payment of our expenses and liabilities. Any such action could delay or substantially diminish the cash distributions to be made to our beneficiaries under the Liquidating Trust Agreement.

·The ~~continue~~prior toperformance of ~~build~~real ~~and~~estate ~~expand~~investment programs sponsored by affiliates of our ~~operations~~Managing ~~structure~~Trustee toor ~~support~~former General Partners may not be an indication of our ~~business~~future results.

WeInvestors ~~cannot~~should ~~guarantee~~not rely ~~that~~upon wethe ~~will~~past ~~succeed in~~performance ~~achieving~~of ~~these~~other ~~goals,~~real ~~and~~estate investment programs sponsored by Mr. Behringer, our ~~failure~~Managing Trustee, or their respective affiliates, to dopredict soour ~~could~~future ~~cause~~results. ~~investors~~To tobe ~~lose~~successful ~~all~~in orthis amarket, ~~portion~~we ofmust, ~~their~~among ~~investment.~~other things:

If· weattract, ~~lose~~integrate, ormotivate ~~are~~and ~~unable to~~retain ~~obtain~~qualified ~~key~~ personnel, ~~our ability~~ to ~~implement~~manage our ~~investment~~day-to-day ~~strategies~~operations; ~~could be delayed or hindered.~~ and

~~Our~~We success depends to a significant degree upon the continued contributions of certain key personnel of the general partner of Behringer Advisors II and HPT, who would be difficult to replace. Although HPT has employment agreements with its key personnel, these agreements are terminable at will, and we cannot guarantee that ~~such~~we ~~persons~~ will ~~remain affiliated with HPT or us. If any of HPT’s~~succeed ~~key personnel were to cease employment, our operating results could suffer. We believe that our future success depends,~~ in ~~large part,~~achieving ~~upon~~these ~~HPT’s ability to hire and retain highly skilled managerial~~goals, ~~operational~~ and ~~marketing personnel. Competition for such personnel is intense, and we cannot assure investors that HPT will be successful in attracting and retaining such skilled personnel. Further,~~ our ~~Managing~~failure ~~Trustee intends~~ to ~~establish~~do ~~strategic~~so ~~relationships~~could ~~with~~cause ~~firms~~investors ~~that have special expertise in certain services or as~~ to real properties in certain geographic regions. Maintaining such relationships will be important for us to effectively compete. We cannot assure investors that our Managing Trustee will be successful in attracting and retaining such relationships. If we lose all or ~~are~~a ~~unable~~portion ~~to obtain the services~~ of ~~key~~their ~~personnel or do not establish or maintain appropriate strategic relationships, our ability to implement our strategies could be delayed or hindered~~investment.

10Risks Related to Our Business in General

~~Risks~~Market ~~Related~~disruptions have impacted and may continue to ~~Our~~adversely ~~Business~~impact inmany ~~General~~aspects of our operating results and operating condition.

~~Recent~~Although economic and market ~~disruptions~~ conditions in the United States have ~~impacted~~generally ~~and~~improved ~~may~~over ~~continue~~the topast ~~adversely~~two years, the overall market recovery remains uncertain. The previous economic downturn had a significant negative impact ~~many~~and ~~aspects~~continues ofto affect both us and our ~~operating~~tenants. ~~results~~Our business is affected by market and ~~operating~~economic ~~condition~~challenges experienced by the U.S. economy or real estate industry as a whole or by the local economic condition in the market in which our property is located.

The ~~financial~~capital ~~and real estate~~ markets ~~have undergone pervasive and fundamental disruptions. The disruptions have had and may continue to have an adverse~~ ~~impact~~began ~~on the availability of credit~~ to ~~businesses,~~substantially ~~generally,~~open ~~and~~up ~~real estate~~ in ~~particular,~~2012 and ~~have~~access ~~resulted in and could lead~~ to ~~further weakening of~~ the ~~U.S.~~equity and ~~global~~debt ~~economies. Our business is affected by market and economic challenges experienced by the U.S. economy or real estate industry as a whole or by the local economic conditions in the~~ markets incontinued ~~which~~to ~~our~~improve ~~properties are located, including the current dislocations~~ in ~~the credit markets and general global economic recession~~2013. ~~Availability~~The ofcurrent ~~debt financing secured by commercial real estate has declined as a result of tightened underwriting standards. These~~ conditions ~~have~~ ~~and may continue to materially affect the value of our investment properties and will likely continue to affect our ability to pay distributions, the availability or the terms of financing that we~~ have or may anticipate utilizing, and our ability to make principal and interest payments on, or refinance, any outstanding debt when due. These challenging economic conditions will also continue to impact the ability of certain of our tenants to enter into new leasing transactions on terms acceptable to us or satisfy rental payments under existing leases. Specifically, the current conditions have had, or similar conditions existing in the future may continue to have, the following consequences:

the financial condition of our tenants may be adversely affected, which results in us having to increase concessions, reduce rental rates or make capital improvements in order to maintain occupancy levels or to negotiate for reduced space needs, which could result in a decrease in our occupancy levels;

credit spreads for major sources of capital could widen as investors demand higher risk premiums, resulting in lenders increasing the cost for debt financing;

a reduction in the amount of capital that is available to finance real estate, which, in turn, could lead to a decline in real estate values generally, slow real estate transaction activity, reduce the loan to value ratio upon which lenders are willing to lend, and result in difficulty refinancing our debt;

· our ability to borrow on terms and conditions that we find acceptable, or at all, may be limited, which could reduce our ability to refinance existing debt, reduce our returns from our acquisition and ~~development activities and~~ increase our future interest expense;

· the value of ~~some of~~ our ~~properties~~property has likely decreased below the ~~amounts~~amount we paid for them, which may limit our ability to dispose of assets at attractive prices or to obtain debt financing secured by our ~~properties~~property and may reduce the availability of unsecured loans; and

·For ~~the~~these ~~value~~ and ~~liquidity~~other reasons, ofwe ~~our~~cannot ~~short-term~~assure ~~investments~~you ~~and~~that ~~cash~~we ~~deposits~~will ~~could~~ be ~~reduced~~profitable asor athat ~~result~~we ofwill ~~the~~realize ~~dislocation~~growth ofin the ~~markets~~value ~~for~~of our ~~short-term~~ investments~~, increased volatility in market rates for such investments or other factors~~.

For these and other reasons, we cannot assure you that we will be profitable or that we will realize growth in the value of our investments. Further, in light of the current economic conditions, we cannot provide assurance that we will be able to resume regular distributions in the future.10

We have incurred indebtedness and other borrowings, which may increase our business risks.

We have acquired and developed real properties by using either existing financing or borrowing new funds. In addition, we have incurred or increased our debt by obtaining loans secured by some or all of our real properties. We have incurred debt on a particular real property if we believe the property’s projected cash flow is sufficient to service the mortgage debt. Incurring debt increases the risk of loss since defaults on indebtedness secured by a property may result in foreclosure actions initiated by lenders and our loss of the property securing the loan which is in default. For tax purposes, a foreclosure of any of our properties would be ~~treated~~ treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds. We may give full or partial guarantees to lenders of mortgage debt to the entities that own our properties. When we provide a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity. If any ~~mortgages contain cross-collateralization or cross-default provisions, there is a risk that more than one real property may be affected by a default. If any~~ of our properties are ~~foreclosed~~ foreclosed upon due to a default, our ability to pay distributions to our ~~limited~~beneficiaries ~~partners~~ will be adversely affected. Our approach to investing in properties utilizing leverage in order to accomplish our investment objectives may present more risks to investors than comparable real estate programs which have a longer intended duration and which do not utilize borrowing to the same degree.

11Our indebtedness adversely affects our financial health and operating flexibility.

~~Our~~At ~~indebtedness~~December ~~adversely~~31, 2013, ~~affects~~the Liquidating Trust had notes payable of approximately $40.7 million in principal amount, of which $31 million was secured by properties and the Liquidating Trust, as successor in interest to the Partnership, has guaranteed payment of certain customary nonrecourse carveouts in favor of the lender. As a result of this indebtedness, we are required to use a material portion of our cash ~~financial~~flow ~~health~~to service principal and ~~operating~~interest ~~flexibility~~on our debt, which will limit the cash flow available for other purposes.

AtOur ~~December~~level ~~31,~~of ~~2012,~~debt and the ~~Partnership~~limitations ~~had~~imposed ~~notes~~on ~~payable~~us ofby ~~approximately~~our ~~$41.1~~debt ~~million~~agreements incould ~~principal~~have ~~amount,~~significant ofadverse ~~which~~consequences ~~$31 million~~to ~~was~~us ~~secured by properties~~ and the ~~Partnership~~value ~~guaranteed payment~~ of ~~certain customary nonrecourse carveouts in favor of the lender. As a result~~our ~~of this indebtedness~~units, weregardless ~~are required to use a material portion~~ of our ~~cash~~ability ~~flow~~ to ~~service~~refinance ~~principal~~or ~~and~~extend ~~interest on~~ our debt, ~~which~~ ~~will limit the cash flow available for other purposes.~~including:

~~Our~~· ~~level~~limiting ~~of debt and the limitations imposed on us by~~ our ~~debt~~ability ~~agreements~~to ~~could~~borrow ~~have~~additional ~~significant~~amounts ~~adverse~~for ~~consequences~~working tocapital, uscapital ~~and~~expenditures, ~~the~~debt ~~value~~service ~~of our units~~requirements, ~~regardless~~ execution of our ~~ability~~business toplan ~~refinance~~ or ~~extend~~other ~~our debt, including:~~purposes;

· limiting our ability to ~~borrow~~use ~~additional~~operating ~~amounts~~cash ~~for~~flow ~~working~~in ~~capital,~~other ~~capital~~areas ~~expenditures,~~of ~~debt~~our ~~service~~business ~~requirements,~~because ~~execution~~we must dedicate a substantial portion of ~~our~~these ~~business~~funds ~~plan~~to orservice ~~other~~our ~~purposes~~debt;

· ~~limiting~~increasing our ~~ability~~vulnerability to ~~use~~general ~~operating~~adverse ~~cash~~economic ~~flow~~and inindustry ~~other areas of our business because we must dedicate a substantial portion of these funds to service our debt~~conditions;

· ~~increasing~~limiting our ~~vulnerability~~ability to ~~general~~capitalize ~~adverse~~on ~~economic~~business opportunities and ~~industry~~to ~~conditions~~react to competitive pressures and adverse changes in governmental regulation;

· limiting our ability to ~~capitalize~~fund oncapital ~~business~~expenditures, ~~opportunities~~tenant ~~and~~improvements ~~to react to competitive pressures~~ and ~~adverse~~leasing ~~changes in governmental regulation~~commissions; and

· limiting our ability toor ~~fund~~increasing ~~capital~~the ~~expenditures,~~costs ~~tenant~~to ~~improvements~~refinance ~~and~~our ~~leasing commissions; and~~indebtedness.

·In ~~limiting~~addition, a breach of the financial and operating covenants in our ~~ability~~debt oragreements ~~increasing~~could ~~the~~cause ~~costs~~a todefault ~~refinance~~and accelerate payment, which could have a material adverse effect on our ~~indebtedness~~financial condition.

InWe ~~addition,~~may anot ~~breach of~~be ~~the~~able ~~financial and operating covenants in our debt agreements could cause a default and accelerate payment, which could have~~to arefinance ~~material~~or ~~adverse~~repay ~~effect on~~ our ~~financial condition~~indebtedness.

We have debt that we may not be able to refinance or repay. As of December 31, 2013, approximately $1.3 million of principal payments, which includes scheduled debt maturities and monthly principal payments, has matured or is scheduled to mature in the next twelve months. We may face significant challenges refinancing our current debt on acceptable terms if at all due to (1) reduced values of our investments, (2) limited cash flow from operations, (3) our debt level, (4) the cost and terms of new or refinanced indebtedness and (5) material changes in lending parameters, including lower loan-to-value standards. Our indebtedness also requires us to use a material portion of our cash flow to service principal and interest, which limits the cash flow available for other business expenses or opportunities.

WeFurther, we may not have ~~debt~~the ~~that~~funds ~~we may~~necessary ~~not~~to berepay ~~able~~our debt as it matures. Failure to refinance or ~~repay.~~extend Asour ofdebt ~~December~~as 31it comes due, ~~2012~~or a failure to satisfy the conditions and requirements of that debt, ~~approximately~~could $1result in an event of default.~~3 million~~ We have experienced, and may continue to experience, defaults or events of ~~principal~~default ~~payments~~with respect to our existing indebtedness, which ~~includes~~requires us to either restructure ~~scheduled~~the debt ~~maturities~~in ~~and~~a ~~monthly~~way ~~principal~~that ~~payments,~~is ~~has~~supported ~~matured~~by orthe isunderlying ~~scheduled~~asset values of the properties collateralizing the debt or to ~~mature~~purchase inor pay off the ~~next~~debt ~~twelve~~at ~~months~~a discount. WeIn ~~will face~~situations ~~significant~~where ~~challenges~~we ~~refinancing~~are ~~our~~not ~~current~~able to restructure the debt onor ~~acceptable~~to ~~terms~~purchase ifor pay off the debt at ~~all~~a ~~due~~discount, we may have to ~~(1)~~transfer ~~reduced~~the ~~values~~underlying ofproperty ~~our~~to ~~investments~~the lender. We can provide no assurance that, with respect to ~~(2)~~any ~~limited~~other ~~cash~~indebtedness ~~flow~~that ~~from~~we ~~operations~~may be unable to repay, ~~(3)~~we ~~our~~will be able to restructure that debt ~~level~~or to purchase or pay off that debt at a discount, ~~(4)~~which could result in lenders accelerating that debt or foreclosing on the ~~cost~~related ~~and~~property. ~~terms~~If our debt is accelerated, the value of ~~new~~our assets may not be sufficient to repay the debt in full. If we are unable to refinance or ~~refinanced~~repay ~~indebtedness~~our debt as it comes due and ~~(5)~~maintain ~~material changes~~sufficient incash ~~lending~~flow, ~~parameters~~our business, ~~including~~financial ~~lower~~condition ~~loan-to-value~~and ~~standards~~results of operations will be materially and adversely affected. ~~Our~~Furthermore, ~~indebtedness~~even ~~also~~if ~~requires~~we usare able to ~~use~~obtain aextensions ~~material~~on ~~portion~~our existing debt, those extensions may include ofoperational ~~our~~and ~~cash~~financial ~~flow~~covenants significantly more restrictive than the covenants on existing indebtedness. Any extensions will also require us to ~~service~~pay ~~principal~~certain fees to, and ~~interest~~expenses of, ~~which~~our ~~limits~~lenders. ~~the~~Any fees and cash flow ~~available~~restrictions ~~for~~will ~~other~~affect ~~business~~our ability ~~expenses~~to orfund ~~opportunities~~our ongoing operations.

Further, we may not have the funds necessary to repay our debt as it matures. Failure to refinance or extend our debt as it comes due, or a failure to satisfy the conditions and requirements of that debt, could result in an event of default. We have experienced, and may continue to experience, defaults or events of default with respect to our existing indebtedness, which has required us to either restructure the debt in a way that is supported by the underlying asset values of the properties collateralizing the debt or to purchase or pay off the debt at a discount. In situations where we are not able to restructure the debt or to purchase or pay off the debt at a discount, we may have to transfer the underlying property to the lender. We can provide no assurance that, with respect to any other indebtedness that we may be unable to repay, we will be able to restructure that debt or to purchase or pay off that debt at a discount, which could result in lenders accelerating that debt or foreclosing on the related property. If our debt is accelerated, the value of our assets may not be sufficient to repay the debt in full. If we are unable to refinance or repay our debt as it comes due and maintain sufficient cash flow, our business, financial condition and results of operations will be materially and adversely affected. Furthermore, even if we are able to obtain extensions on our existing debt, those extensions may include operational and financial covenants significantly more restrictive than the covenants on existing indebtedness. Any extensions will also require us to pay certain fees to, and expenses of, our lenders. Any fees and cash flow restrictions will affect our ability to fund our ongoing operations.11

~~Recent~~Disruptions ~~disruptions~~ in the financial markets and adverse economic conditions could adversely affect ~~our ability to secure debt financing on attractive terms and dispose of our properties and have affected~~ the value of our investments.

The ~~commercial~~recent ~~real~~market ~~estate debt markets have recently experienced~~ volatility aswill alikely ~~result~~make ~~of certain factors, including~~ the ~~tightening~~valuation of underwriting standards by lenders and credit rating agencies and the significant inventory of unsold collateralized mortgage backed securities in the market. Credit spreads for major sources of capital widened significantly as investors have demanded a higher risk premium. This resulted in lenders increasing the cost for debt financing. An increase in the overall cost of borrowings, either by increases in the index rates or by increases in lender spreads, may result in our investment ~~operations~~properties ~~generating lower overall economic returns and a reduced level of cash flow. We expect this potential impact to be~~ more ~~pronounced upon refinancing any fixed rate indebtedness~~difficult. There ~~As a result of current economic conditions, potential purchasers~~ may be ~~unable~~significant ~~to obtain financing~~uncertainty onin ~~acceptable~~the ~~terms. In addition~~valuation, ~~the~~or ~~recent dislocations~~ in the ~~debt~~stability ~~markets~~of ~~have reduced~~ the ~~amount~~value, of ~~capital~~our properties that iscould ~~available to~~result ~~finance real estate, which,~~ in ~~turn: (1) has led to~~ a ~~decline~~substantial decrease in ~~real estate values generally; (2) slowed real estate transaction activity; (3) reduced~~ the ~~loan to~~ value ~~upon which lenders are willing to extend debt; and (4) resulted in~~ ~~difficulty~~of ~~in refinancing debt as it becomes due. If the current debt market environment persists, it may be difficult for us to refinance~~ our ~~debt coming due~~properties.

12If debt is unavailable at reasonable rates, we may not be able to refinance our properties.

~~Further,~~When ~~the~~we ~~recent~~place debt ~~market~~on ~~volatility~~properties, ~~will~~we ~~likely~~run ~~make~~ the ~~valuation~~risk of ~~our~~being ~~investment~~unable ~~properties~~to ~~more~~refinance ~~difficult. There~~the ~~may~~properties bewhen ~~significant~~the ~~uncertainty in~~loans ~~the~~come ~~valuation~~due, or ~~in the stability~~ of ~~the~~being ~~value,~~unable ofto ~~our~~refinance on ~~properties~~favorable ~~that~~terms. ~~could~~If ~~result~~interest inrates aare ~~substantial~~higher ~~decrease~~when in the ~~value of our~~ properties~~. As~~ aare ~~result~~refinanced, we may not be able to ~~recover~~finance the ~~carrying amount of our~~ properties, and weour ~~may~~income could be ~~required to~~reduced. ~~recognize~~If ~~impairment~~this ~~charges~~occurs, ~~which~~it ~~will~~may ~~reduce~~prevent ~~our~~us ~~reported~~from ~~earnings~~borrowing more money.

~~The~~Future ~~pervasive and fundamental~~financing ~~disruptions~~could ~~that~~be ~~the~~impacted ~~global~~by ~~financial~~negative ~~markets~~capital have undergone have led to extensive and unprecedented governmental intervention. Such intervention has, in certain cases, been implemented on an “emergency” basis, suddenly and substantially eliminating market ~~participants’ ability to continue to implement certain strategies or manage the risk of their outstanding positions~~conditions. In addition, these interventions have typically been unclear in scope and application, resulting in confusion and uncertainty, which in itself has been materially detrimental to the efficient functioning of the markets, as well as previously successful investment strategies. Legislators continue to propose new restrictions affecting moratoriums on loan payments, limits on the ability of lenders to enforce loan provisions, including the collection of interest at rates agreed upon in the loan documents and involuntary modifications of loan agreements. It is impossible to predict what, if any, additional interim or permanent governmental restrictions may be imposed or the effect of such restrictions on us and our results of operations. There is likely to be increased regulation of the financial markets.

IfAlthough ~~debt~~the iscurrent outlook ~~unavailable~~on financing trends appears relatively stable, there are risks. Potential changes in the U.S. Federal Reserve’s atmonetary ~~reasonable~~policy could further affect interest rates, wewhile ~~may~~the ~~not~~U.S. bepolitical ~~able~~deadlock over the debt ceiling, tax policy and government spending levels can affect the overall level of domestic economic growth. Any of these domestic issues or the resurfacing of global issues could slow growth or push the U.S. into a recession, which could affect the amount of capital available or the costs charged for financings. Our ability to borrow funds to refinance current debt, including any financing provided by Behringer, could be affected by our ~~properties.~~inability to secure permanent financing on reasonable terms, if at all.

~~When~~Gains weand ~~place debt~~distributions onupon ~~properties,~~resale ~~we run the risk~~ of ~~being~~our ~~unable to refinance the~~ properties ~~when the loans come due, or of being unable to refinance on favorable terms. If interest rates~~ are ~~higher when the properties are refinanced, we may not be able to finance the properties, and our income could be reduced~~uncertain. ~~If this occurs, it may prevent us from borrowing more money.~~

~~Future~~Although ~~financing~~gains from ~~could~~the besales ~~impacted~~of byproperties ~~negative~~typically ~~capital~~represent ~~market~~a ~~conditions~~substantial portion of any profits attributable to a real estate investment, we cannot assure investors that we will realize any gains on the resales of our properties. In addition, the amount of taxable gain allocated to investors with respect to the sale of a property could exceed the cash proceeds received from such sale.

~~Recently,~~Proceeds ~~the~~from ~~U.S. credit markets and~~ the ~~sub-prime residential mortgage market experienced severe dislocations and liquidity disruptions. Sub-prime~~ ~~mortgage~~sale ~~loans have experienced increasing rates~~ of ~~delinquency, foreclosure and loss. These and other related events have had~~ a ~~significant~~property ~~impact~~will onbe ~~the~~distributed ~~capital~~to ~~markets~~our ~~associated~~beneficiaries ~~not~~if ~~only with sub-prime mortgage-backed securities, asset-backed securities and collateralized debt obligations, but also with~~ the ~~U.S.~~Managing ~~housing~~Trustee, ~~credit~~in ~~and~~its ~~financial~~sole ~~markets as a whole. Consequently~~discretion, ~~there is~~has ~~greater~~determined ~~uncertainty regarding our ability to access the credit market in order to attract financing on reasonable terms. Our~~that ~~ability~~such toproceeds ~~borrow~~are ~~funds~~not toneeded ~~refinance current debt, including any financing provided by our Sponsor, could be adversely affected by our inability~~ to ~~secure permanent financing on reasonable terms, if at all.~~fund:

~~Gains~~· ~~and~~working ~~distributions upon~~capital ~~resale of our properties are uncertain.~~ reserves;

~~Although~~· ~~gains~~capital ~~from the~~improvements ~~sales of properties typically represent a substantial portion of any profits attributable~~ to ~~a real estate investment, we cannot assure investors that we will realize any gains on the resales of~~ our existing properties.; ~~In addition, the amount of taxable gain allocated to investors with respect to the sale of a property could exceed the cash proceeds received from such sale.~~or

~~Proceeds~~· ~~from~~required ~~the~~principal ~~sale of~~and ainterest ~~property~~payments ~~will be distributed~~ to ~~investors~~our ifexisting ~~the Managing Trustee, in its sole discretion, has determined that such proceeds are not needed to fund:~~properties.

·Because ~~working~~we ~~capital~~cannot be certain about the precise net realizable value of our assets and the ultimate amount of our liabilities, we are not able to predict accurately the aggregate cash amounts which will ultimately be distributed to our beneficiaries or the timing of any such distributions. The amount and timing of remaining distributions will be determined by our Managing Trustee based on funds available, net proceeds realized from the remaining assets, the timing of asset sales, whether our total assets exceed total liabilities at such time, whether we have provided for the level of reserves; deemed necessary or appropriate and other considerations.

·The ~~capital~~provisions ~~improvements~~of the Delaware Statutory Trust Act applicable to statutory trusts do not grant our ~~existing~~beneficiaries ~~properties;~~any orvoting rights, and our beneficiaries’ rights are limited under our Liquidating Trust Agreement.

·A ~~required~~vote ~~principal~~of ~~and~~a majority of the units of beneficial interest ~~payments~~is sufficient to ~~our~~take ~~existing~~the ~~properties.~~following actions:

~~Because~~· ~~we cannot be certain about the precise net realizable value of our assets and the ultimate amount of our liabilities, we are not able~~ to ~~predict~~ ~~accurately~~amend ~~the aggregate cash amounts which will ultimately be distributed to~~ our ~~beneficiaries~~Liquidating orTrust the timing of any such distributions. The amount and timing of remaining distributions will be determined by our Managing Trustee based on funds available, net proceeds realized from the remaining assets, the timing of asset sales, whether our total assets exceed total liabilities at such time, whether we have provided for the level of reserves deemed necessary or appropriate and other considerations.Agreement;

~~The~~· ~~provisions of the Delaware Statutory Trust Act applicable~~ to ~~statutory~~dissolve ~~trusts do not grant beneficiaries any voting rights,~~ and ~~beneficiaries’ rights~~terminate ~~are~~the ~~limited under our~~ Liquidating Trust ~~Agreement.~~;

A· ~~vote of a majority of the units of beneficial interest is sufficient~~ to ~~take~~remove ~~the~~our ~~following~~Managing ~~actions:~~Trustee; and

· to ~~amend~~authorize ~~our~~a merger or a consolidation of the Liquidating Trust ~~Agreement;~~.

·These are the only significant voting rights granted to ~~dissolve~~our ~~and~~beneficiaries ~~terminate~~under ~~the~~our Liquidating Trust; Agreement. Therefore, our beneficiaries’ voting rights in our operations are limited.

·Our Managing Trustee will make all decisions with respect to ~~remove~~our management and determine all of our major policies, including our financing, growth, investment strategies and distributions. Our Managing Trustee; may revise these and other policies without a vote of the beneficiaries. Therefore, our beneficiaries will be relying almost entirely on our Managing Trustee for our management and the operation of our business. Our Managing Trustee may only be removed under certain conditions, as set forth in our Liquidating Trust Agreement.

~~· to authorize a merger or a consolidation of the Liquidating Trust.~~12

~~These~~Payment ~~are~~of ~~the~~fees ~~only significant voting rights granted~~ to our Managing ~~beneficiaries~~Trustee ~~under~~and ~~our~~its ~~Liquidating~~affiliates ~~Trust~~will ~~Agreement.~~reduce ~~Therefore,~~cash ~~beneficiaries’~~available ~~voting~~for ~~rights in our operations are limited~~distribution.

13Our Managing Trustee and its affiliates will perform services for us in connection with the management and leasing of our properties and the administration of our other investments. They will be paid fees for these services, which will reduce the amount of cash available for distribution to our beneficiaries.

~~Our~~The ~~Managing~~failure ~~Trustee will make all decisions with respect to our management and determine all~~ of ~~our~~any ~~major policies, including our financing, growth,~~bank ~~investment~~in ~~strategies~~which ~~and~~we ~~distributions.~~deposit ~~Our Managing Trustee may revise these and other policies without a vote of the beneficiaries. Therefore, beneficiaries will be relying almost entirely on~~ our ~~Managing~~funds ~~Trustee~~could ~~for~~reduce ~~our management and~~ the ~~operation~~amount of ~~our~~cash ~~business. Our~~we ~~Managing~~have ~~Trustee~~available ~~may~~to ~~only~~pay ~~be removed under certain conditions, as set forth in our Liquidating Trust Agreement~~distributions.

~~Payment~~We ofhave ~~fees~~diversified our cash and cash equivalents among several banking institutions in an attempt to ~~our~~minimize exposure to any one of these entities. ~~Managing~~However, ~~Trustee~~the Federal Deposit Insurance Corporation, or FDIC, generally only insures limited amounts per depositor per insured bank. We have cash and ~~its~~cash ~~affiliates~~equivalents ~~will~~and restricted cash deposited in interest bearing transaction accounts at certain financial institutions in excess of federally insured levels. If any of the banking institutions in which we have deposited funds ultimately fails, we may lose the portion of our deposits that exceed the federally insured levels. The loss of our deposits could reduce the amount of cash we have available ~~for~~to ~~distribution.~~distribute and could result in a decline in the value of your investment.

~~Our~~Financing ~~Managing Trustee~~arrangements ~~and~~involving ~~its~~balloon ~~affiliates~~payment ~~will~~obligations ~~perform~~may ~~services~~adversely ~~for~~affect ~~us in connection with the management and leasing of~~ our ~~properties and the administration of our other investments~~operations. ~~They will be paid fees for these services, which will reduce the amount of cash available for distribution to beneficiaries.~~

Our fixed-term financing arrangements generally require us to make “balloon” payments at maturity. During the interest only period, the amount of each scheduled payment is less than that of traditional amortizing loans. The ~~failure~~principal balance of ~~any~~the ~~bank~~loan will not be reduced (except in ~~which~~the wecase ~~deposit~~of prepayments) because there are no scheduled monthly payments of principal during this period. Our ability to make a balloon payment at maturity is uncertain and may depend upon our ~~funds~~ability ~~could~~to ~~reduce~~obtain additional financing or our ability to sell the ~~amount~~property ofor ~~cash~~other properties in our portfolio. At the time the balloon payment is due, we ~~have~~may ~~available~~or may not be able to refinance ~~pay~~the ~~distributions~~balloon ~~and~~payment on terms as favorable as the original loan or sell the property at a price sufficient to make ~~additional~~the balloon ~~investments~~payment. The effect of a refinancing or sale could affect the rate of return to our beneficiaries and the projected time of disposition of our assets. In addition, payments of principal and interest made to service our debts may adversely affect our operations. Any of these results would have a significant, negative impact on your investment.

WeIncreases ~~have diversified our cash and cash equivalents among several banking institutions~~ in an attempt to minimize exposure to any one of these entities. However, the Federal Deposit Insurance Corporation, or FDIC, generally only insures limited amounts per depositor per insured bank. We have cash and cash equivalents and restricted cash deposited in interest ~~bearing transaction accounts at certain financial institutions~~ inrates ~~excess~~could ofincrease ~~federally insured levels. If any of~~ the ~~banking~~amount ~~institutions in which we have deposited funds ultimately fails, we may lose the portion~~ of our ~~deposits~~debt ~~that~~payments ~~exceed~~and ~~the~~adversely ~~federally~~affect ~~insured levels. The loss of~~ our ~~deposits~~operating ~~could reduce the amount of~~ cash ~~we have available to distribute and could result in a decline in the value of your investment~~flow.

~~Financing~~We ~~arrangements~~may borrow money ~~involving~~that ~~balloon~~bears ~~payment~~interest ~~obligations~~at variable rates which may ~~adversely~~expose ~~affect~~us to increases in costs in a rising interest rate environment. Accordingly, increases in interest rates would increase our ~~operations~~interest costs, which could have a material adverse effect on our operating cash flow. In addition, if rising interest rates cause us to need additional capital to repay indebtedness in accordance with its terms or otherwise, we may be required to liquidate one or more of our investments in properties at times which may not permit realization of the maximum return on such investments.

~~Our~~To ~~fixed-term~~hedge ~~financing arrangements~~against ~~generally require us to make “balloon” payments at maturity. During the~~ interest rate ~~only period~~fluctuations, ~~the~~we ~~amount of~~may ~~each~~use ~~scheduled~~derivative ~~payment~~financial isinstruments ~~less than~~ that of traditional amortizing loans. The principal balance of the loan will not be reduced (except in the case of prepayments) because there are no scheduled monthly payments of principal during this period. Our ability to make a balloon payment at maturity is uncertain and may ~~depend upon our ability to obtain additional financing or our ability to sell the property or other properties in our portfolio. At the time the balloon payment is due, we may or may not~~ be ~~able~~costly to refinance the balloon payment on terms as favorable as the original loan or sell the property at a price sufficient to make the balloon payment. The effect of a refinancing or sale could affect the rate of return to unitholders and ~~the~~ineffective ~~projected time of disposition of our assets. In addition, payments of principal~~ and ~~interest made to service our debts~~ may ~~adversely~~reduce ~~affect~~the ~~our~~overall ~~operations. Any~~returns ~~of these results would have a significant, negative impact~~ on your investment.

~~Increases~~From time to time, we may use derivative financial instruments to hedge exposures to changes in interest rates ~~could~~on ~~increase~~loans ~~the~~secured ~~amount~~by our assets. Derivative instruments may include interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements. Our actual hedging decisions will be determined in light of ~~our~~the ~~debt~~facts ~~payments~~and circumstances existing at the time of the hedge and ~~adversely~~may ~~affect~~differ from time to time. There is no assurance that our ~~operating~~hedging ~~cash~~strategy ~~flow~~will achieve our objectives.

WeTo ~~have~~the ~~borrowed~~extent ~~money~~ that we ~~bears~~use ~~interest~~derivative atfinancial ~~variable~~instruments ~~rates,~~to ~~and~~hedge against interest rate fluctuations, we are exposed to ~~increases~~credit inrisk, ~~costs~~basis inrisk and alegal ~~rising~~enforceability ~~interest~~risks. ~~rate~~In ~~environment.~~this ~~Accordingly~~context, ~~increases~~ incredit ~~interest~~risk ~~rates~~is ~~would~~the ~~increase~~failure ~~our~~of ~~interest~~the ~~costs,~~counterparty ~~which~~to ~~could~~perform ~~have~~under the terms of the derivative contract. If the fair value of a ~~material~~derivative ~~adverse~~contract ~~effect~~is onpositive, ~~our~~the ~~operating~~counterparty ~~cash~~owes us, which creates credit ~~flow~~risk for us. InBasis ~~addition,~~risk ifoccurs ~~rising~~when ~~interest~~the ~~rates~~index ~~cause~~upon uswhich tothe ~~need~~contract ~~additional~~is ~~capital~~based tois ~~repay~~more ~~indebtedness~~or inless ~~accordance~~variable ~~with~~than ~~its~~the ~~terms~~index upon which the hedged asset or ~~otherwise~~liability is based, wethereby ~~may~~making bethe ~~required~~hedge toless ~~liquidate~~effective. ~~one~~Finally, orlegal ~~more~~enforceability ofrisks ~~our~~encompass general ~~investments~~contractual inrisks, ~~properties~~including atthe ~~times~~risk ~~which~~that ~~may~~the ~~not~~counterparty ~~permit~~will ~~realization~~ breach the terms of, or fail to perform its obligations under, the ~~maximum~~derivative ~~return~~contract. onWe ~~such~~may ~~investments~~be unable to manage these risks effectively.

ToWe ~~hedge against interest rate fluctuations, we~~ may ~~use~~enter into derivative contracts ~~financial instruments~~ that ~~may~~could beexpose ~~costly~~us ~~and~~to ~~ineffective~~contingent ~~and~~liabilities ~~may~~in ~~reduce~~ the ~~overall returns on your investment~~future.

~~From~~Our ~~time~~derivative ~~to time,~~financial weinstruments may ~~use~~require ~~derivative~~us ~~financial~~to ~~instruments~~fund tocash ~~hedge~~payments ~~exposures~~upon tothe ~~changes~~early intermination ~~interest~~of ~~rates~~a onderivative ~~loans~~agreement ~~secured~~caused by ~~our~~an ~~assets.~~ event of default ~~Derivative~~or ~~instruments~~other ~~may~~early ~~include~~termination ~~interest~~event. ~~rate~~The amount due would be equal to the unrealized loss of the open swap ~~contracts,~~positions ~~interest~~with ~~rate~~the ~~cap~~respective counterparty orand ~~floor~~could ~~contracts,~~also ~~futures~~include orother ~~forward~~fees ~~contracts~~and charges. In addition, some of these derivative arrangements may require that ~~options~~we ormaintain ~~repurchase~~specified ~~agreements~~percentages of cash collateral with the counterparty to fund potential liabilities under the derivative contract. ~~Our~~ ~~actual~~We ~~hedging~~may ~~decisions~~have ~~will~~to bemake ~~determined~~cash payments in ~~light~~order to maintain the required percentage of collateral with the ~~facts~~counterparty. These economic losses would be reflected in our results of operations, and ~~circumstances existing~~our atability to fund these obligations would depend on the ~~time~~liquidity of ~~the~~our ~~hedge~~respective assets and ~~may~~access ~~differ~~to ~~from~~capital ~~time~~at tothe time. ~~There~~Our isdue nodiligence ~~assurance~~may ~~that~~not ~~our~~reveal ~~hedging~~all ~~strategy~~of ~~will~~an ~~achieve~~entity’s ~~our~~liabilities ~~objectives~~and may not reveal other weaknesses in the entity’s business.

To the extent that we use derivative financial instruments to hedge against interest rate fluctuations, we are exposed to credit risk, basis risk and legal enforceability risks. In this context, credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. Basis risk occurs when the index upon which the contract is based is more or less variable than the index upon which the hedged asset or liability is based, thereby making the hedge less effective. Finally, legal enforceability risks encompass general contractual risks, including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract. We may be unable to manage these risks effectively.13

WeLenders may require us to enter into ~~derivative contracts~~restrictive covenants that ~~could~~may ~~expose~~have usan toadverse ~~contingent~~effect ~~liabilities~~on inour ~~the future~~operations.

~~Our~~In ~~derivative~~connection ~~financial~~with ~~instruments~~obtaining ~~may~~certain ~~require~~financing, ~~us to fund cash payments upon the early termination of~~ a ~~derivative~~lender ~~agreement~~could ~~caused~~impose byrestrictions anon ~~event~~us ofthat ~~default or~~affect ~~other~~our ~~early~~ability ~~termination event. The amount due would be equal~~ to ~~the~~incur ~~unrealized~~additional ~~loss~~debt ofand ~~the open swap positions with the respective~~our ~~counterparty~~operating ~~and could also include other fees and charges~~policies. InLoan ~~addition,~~documents ~~some~~we ofenter ~~these~~into ~~derivative arrangements~~ may ~~require~~contain ~~that we~~customary ~~maintain~~negative ~~specified~~covenants ~~percentages~~that ofmay ~~cash~~limit ~~collateral~~our ~~with~~ability ~~the counterparty~~ to ~~fund potential liabilities under the derivative contract.~~further Weleverage ~~may have to make cash payments in order to maintain~~ the ~~required percentage of collateral with the counterparty. These economic losses would be reflected in our results of operations~~property, ~~and our ability~~ to ~~fund~~discontinue ~~these~~insurance ~~obligations~~coverage, ~~would~~replace ~~depend on the liquidity of~~ our ~~respective~~Managing ~~assets~~Trustee ~~and~~or ~~access~~impose toother ~~capital at the time~~limitations. ~~Our~~Any ~~due~~such ~~diligence~~restriction or limitation may ~~not~~have ~~reveal all of~~ an ~~entity’s~~adverse ~~liabilities and~~effect ~~may~~on ~~not~~our ~~reveal other weaknesses in the entity’s business~~operations.

14Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act.

~~Lenders~~We ~~may~~are ~~require~~not usregistered, and do not intend to ~~enter~~register, ~~into~~as ~~restrictive~~an ~~covenants~~investment ~~that~~company ~~may~~under ~~have~~the anInvestment ~~adverse~~Company ~~effect~~Act of 1940, as amended (“Investment Company Act”), based on ~~our~~exclusions ~~operations~~that we believe are available to us. If we were obligated to register as an investment company, we would have to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:

In· connection with obtaining certain financing, a lender could impose restrictions on us that affect our ability to incur additional debt and our operating policies. Loan documents we enter into may contain customary negative covenants that may limit our ability to further leverage the property, to discontinue insurance coverage, replace our Managing Trustee or impose other limitations. ~~Any such restriction or limitation may have an adverse effect~~ on ~~our~~capital ~~operations.~~structure;

~~Your~~· ~~investment~~restrictions ~~return may~~on bespecified ~~reduced if we are required to register as an investment company under the Investment Company Act.~~investments;

We· ~~are~~prohibitions ~~not registered, and do not intend to register, as an investment company under the Investment Company Act of 1940, as amended (“Investment Company Act”), based~~ on ~~exclusions~~transactions ~~that we believe are available to us. If we were obligated to register as an investment company, we would have to comply~~ with aaffiliates; ~~variety of substantive requirements under the Investment Company Act imposing, among other things:~~and

· ~~limitations~~compliance onwith ~~capital~~reporting, ~~structure;~~record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations.

·In ~~restrictions~~order to be excluded from regulation under the Investment Company Act, we must engage primarily in the business of acquiring and owning real estate assets or real estate-related assets. We rely on ~~specified~~exemptions ~~investments;~~or exclusions provided by the Investment Company Act for the direct ownership, or the functional equivalent thereof, of certain qualifying real estate assets or by engaging in business through one or more majority-owned subsidiaries, as well as other exemptions or exclusions. The position of the SEC staff generally requires us to maintain at least 55% of our assets directly in qualifying real estate interests in order for us to maintain our exemption. Mortgage-backed securities may or may not constitute qualifying real estate assets, depending on the characteristics of the mortgage-backed securities, including the rights that we have with respect to the underlying loans.

·To ~~prohibitions~~maintain oncompliance with ~~transactions~~the ~~with~~Investment ~~affiliates;~~Company Act exemption, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income or loss generating assets that we might not otherwise have acquired.

·The ~~compliance~~method we use to classify our assets for purposes of the Investment Company Act is based in large measure upon no-action positions taken by the SEC staff in the past. These no-action positions were issued in accordance with ~~reporting,~~factual ~~record~~situations ~~keeping~~that may be substantially different from the factual situations we may face, ~~voting~~and a number of these no-action positions were issued more than ten years ago. No assurance can be given that the SEC staff will concur with our classification of our assets. In addition, ~~proxy~~the ~~disclosure~~SEC ~~and~~staff ~~other~~may, in ~~rules~~the ~~and~~future, ~~regulations~~issue further guidance that ~~would~~may ~~significantly~~require ~~change~~us to re-classify our ~~operations~~assets for purposes of qualifying for exemption from regulation under the Investment Company Act. If we are required to re-classify our assets, we may no longer be in compliance with the exemption from the definition of an “investment company” provided by Section 3(c)(5)(C) of the Investment Company Act.

InIf ~~order to be excluded from regulation under the Investment Company Act,~~ we ~~must~~are ~~engage primarily in the business of acquiring and owning real estate~~required ~~assets~~to orregister ~~real~~as ~~estate-related~~an ~~assets.~~investment Wecompany ~~rely~~but onfail ~~exemptions~~to ordo ~~exclusions provided by the Investment Company Act for the direct ownership~~so, orwe ~~the~~would ~~functional~~be ~~equivalent~~prohibited ~~thereof,~~from ~~of certain qualifying real estate assets or by~~ engaging in ~~business~~our ~~through one or more majority-owned subsidiaries~~business, asand ~~well~~criminal asand civil ~~other~~actions ~~exemptions~~could orbe ~~exclusions.~~brought ~~The~~against ~~position of the SEC staff generally requires~~ us. In toaddition, ~~maintain at least 55% of~~ our ~~assets~~contracts ~~directly~~will inbe ~~qualifying~~unenforceable ~~real~~unless ~~estate~~a ~~interests~~court inrequired ~~order for us to maintain our exemption.~~enforcement, ~~Mortgage-backed~~and ~~securities~~a ~~may~~court orcould ~~may~~appoint ~~not~~a ~~constitute~~receiver ~~qualifying~~to ~~real~~take ~~estate~~control ~~assets, depending on the characteristics~~ of ~~the~~us ~~mortgage-backed securities,~~and ~~including~~liquidate ~~the~~our ~~rights that we have with respect to the underlying loans~~business.

ToRisks ~~maintain~~Related ~~compliance with the Investment Company Act exemption, we may be unable~~ to ~~sell~~Investments assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income or loss generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire interests in ~~entities that we would otherwise~~Real ~~want to acquire and would be important to our investment strategy.~~ Estate

~~The~~Our ~~method~~operating ~~we use to~~results ~~classify~~will ~~our~~be ~~assets~~affected ~~for purposes of the Investment Company Act is based in large measure upon no-action positions taken~~ by ~~the SEC~~economic ~~staff~~and inregulatory ~~the~~changes ~~past. These no-action positions were issued in accordance with factual situations~~ that may behave ~~substantially~~an ~~different from~~adverse ~~the~~impact ~~factual~~on ~~situations we may face, and a number of these no-action positions were issued more than ten years ago. No assurance can be given that~~ the ~~SEC~~real ~~staff~~estate ~~will~~market ~~concur with our classification of our assets. In addition, the SEC staff may,~~ in ~~the future~~general, ~~issue~~ ~~further guidance that may require us to re-classify our assets for purposes of qualifying for exemption from regulation under~~and ~~the~~we ~~Investment~~cannot ~~Company~~assure ~~Act.~~investors Ifthat we ~~are~~will ~~required~~be toprofitable ~~re-classify~~or ~~our~~that ~~assets,~~ we ~~may~~will norealize ~~longer~~growth be in ~~compliance with~~ the ~~exemption from~~value ~~the definition~~ of anour ~~“investment~~real ~~company”~~estate ~~provided by Section 3(c)(5)(C) of the Investment Company Act~~properties.

IfOur weoperating ~~are required~~results ~~to register as an investment company but fail to do so, we~~ will be ~~prohibited~~subject ~~from~~to ~~engaging~~risks ingenerally ~~our~~incident ~~business, and criminal and civil actions could be brought against us. In addition, our contracts will be unenforceable unless a court required enforcement, and a court could appoint a receiver~~ to ~~take~~the ~~control~~ownership of usreal ~~and~~estate, ~~liquidate our business.~~ including:

~~Risks~~· ~~Related~~changes toin ~~Investments~~general ineconomic ~~Real Estate~~or local conditions;

~~Our~~· ~~operating results will be affected by economic and regulatory~~ changes ~~that may have an adverse impact on the real estate market~~ in ~~general,~~supply ~~and~~of ~~we cannot~~or ~~assure~~demand ~~investors~~for ~~that~~similar ~~we will be profitable~~ or ~~that~~competing weproperties ~~will realize growth~~ in ~~the~~an ~~value of our real estate properties.~~area;

~~Our~~· ~~operating~~ability ~~results will be subject~~ to ~~risks~~collect ~~generally~~rent ~~incident~~from ~~to the ownership of real estate, including:~~tenants;

· ~~changes~~increasing invacancy ~~general~~rates ~~economic~~ or ~~local~~ability ~~conditions~~to rent space on favorable terms;

~~· changes in supply of or demand for similar or competing properties in an area;~~14

15· changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive;

· ~~ability~~the toilliquidity ~~collect~~of ~~rent~~real ~~from~~estate ~~tenants~~investments generally;

· ~~increasing~~changes ~~vacancy~~in ~~rates~~tax, orreal ~~ability~~estate, toenvironmental ~~rent~~and ~~space~~zoning ~~on favorable terms~~laws; and

· ~~changes~~periods inof high interest rates and ~~availability~~tight ofmoney ~~permanent mortgage funds that may render the sale of a property difficult or unattractive;~~supply.

·The ~~the~~return ~~illiquidity~~on of our real estate ~~investments~~assets ~~generally;~~also may be affected by a continued or exacerbated general economic slowdown experienced by the local economies where our properties are located, including:

· ~~changes~~poor ineconomic ~~tax,~~conditions ~~real~~may ~~estate,~~result ~~environmental~~in ~~and~~defaults ~~zoning~~by ~~laws~~tenants; ~~and~~

· ~~periods~~job oftransfers ~~high~~and ~~interest~~layoffs ~~rates~~may ~~and~~cause ~~tight~~vacancies ~~money~~to ~~supply.~~increase; and

~~The~~· ~~return~~increasing onconcessions, ~~our~~reduced ~~real estate~~rental ~~assets~~rates ~~also~~or capital improvements may be ~~affected~~required byto amaintain ~~continued~~ or ~~exacerbated~~limit ~~general~~a ~~economic~~decline ~~slowdown~~in ~~experienced~~occupancy ~~by the local economies where our properties are located, including:~~levels.

·For ~~poor~~these ~~economic~~and ~~conditions~~other ~~may~~reasons, ~~result~~we incannot assure ~~defaults~~investors bythat ~~tenants~~we will be profitable or that we will realize growth in the value of our real estate properties;.

·Our ~~job~~remaining ~~transfers~~properties are ~~and~~located ~~layoffs~~in ~~may~~the ~~cause~~Dallas, ~~vacancies~~Texas tometropolitan ~~increase;~~area. ~~and~~As a result of this limited diversification of the geographic locations of our properties, our operating results will be affected by economic changes that have an adverse impact on the real estate market in that area.

·The ~~increasing~~remaining ~~concessions~~properties that we hold in our portfolio are located in the Southwest United States, ~~reduced~~more ~~rental~~specifically, ~~rates~~in orthe ~~capital~~Dallas, ~~improvements~~Texas ~~may~~metropolitan area. Consequently, because of the lack of geographic diversity among our current assets, our operating results and ability to pay distributions are likely to be ~~required~~impacted by economic changes affecting the real estate market in the Dallas, Texas area. An investment in our units will be subject to ~~maintain~~greater orrisk ~~limit~~to the extent that we lack a ~~decline~~geographically indiversified ~~occupancy~~portfolio ~~levels~~of properties.

~~For~~We ~~these~~may ~~and~~be ~~other~~unable ~~reasons,~~to ~~we cannot~~secure ~~assure~~funds ~~investors~~for ~~that~~future wetenant ~~will~~improvements, bewhich ~~profitable~~could oradversely ~~that~~impact weour ~~will~~ability ~~realize~~to ~~growth~~pay inspecial ~~the~~distributions ~~value~~to of our ~~real estate properties~~beneficiaries.

~~Our~~When ~~remaining~~tenants ~~properties~~do not ~~are~~renew ~~located~~their inleases ~~the~~or ~~Dallas,~~otherwise ~~Texas~~vacate ~~metropolitan~~their ~~area.~~space Aswe amay ~~result~~be ofrequired ~~this~~to ~~limited~~expend ~~diversification~~substantial offunds for tenant improvements and tenant refurbishments to the ~~geographic~~vacated ~~locations~~space ofin order to attract replacement tenants. We generally maintain working capital reserves ~~our~~for the properties we own. If these reserves or any reserves otherwise established are insufficient to meet our cash needs, we may have to obtain financing from either affiliated or unaffiliated sources to fund our ~~operating~~cash ~~results~~requirements. We cannot assure investors that sufficient financing will be ~~affected~~available byor, ~~economic~~if ~~changes~~available, ~~that~~will ~~have~~be anavailable ~~adverse~~on ~~impact~~economically feasible terms or on ~~the~~terms ~~real~~acceptable to ~~estate~~us. ~~market~~Any borrowing will require us to pay interest expense, and therefore our financial condition and our ability to pay special indistributions ~~that~~to ~~area~~our beneficiaries may be adversely affected.

~~The~~We ~~remaining~~may ~~properties that~~be weunable ~~have~~to ~~acquired~~sell a ~~are~~property ~~located~~if inor ~~the~~when ~~Southwest~~we ~~United~~decide ~~States,~~to ~~more~~do ~~specifically~~so, inwhich ~~the~~could ~~Dallas,~~adversely ~~Texas~~impact ~~metropolitan area. Consequently, because of the lack of geographic diversity among~~ our ~~current assets, our operating results and~~ ability to pay special distributions ~~are likely~~ to ~~be impacted by economic changes affecting the real estate market in the Dallas, Texas area. An investment in~~ our ~~units will be subject to greater risk to the extent that we lack a geographically diversified portfolio of properties~~beneficiaries.

The real estate market is affected, as set forth above, by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We ~~may~~cannot predict whether we will be ~~unable~~able to ~~secure~~sell ~~funds~~any property for ~~future~~the ~~tenant~~price ~~improvements~~or on the terms set by us, ~~which~~or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. If we are unable to sell a property when we determine to do so, it could ~~adversely~~have ~~impact~~a significant adverse effect on our cash flow, results of operations and our ability to pay special distributions to our beneficiaries.

~~When~~We ~~tenants do not renew their leases or otherwise vacate their space we~~ may be ~~required to expend substantial funds for tenant improvements and tenant~~unable ~~refurbishments~~ to ~~the~~sell ~~vacated~~a ~~space~~property in order to attract replacement tenants. We generally maintain initial working capital reserves of 1% of the contract price of the properties we own. If these reserves or any reserves otherwise established are insufficient to meet our cash needs, we may have to obtain financing from either affiliated or unaffiliated sources to fund our cash requirements. We cannot assure investors that sufficient financing will be available or, if available, will be available on ~~economically~~acceptable ~~feasible~~ terms orand ~~on terms acceptable to us. Any borrowing will require us to pay interest expense~~conditions, ~~and~~if ~~therefore~~at ~~our financial condition and our ability to pay special distributions to our beneficiaries may be adversely affected~~all.

We ~~may~~intend to hold our real properties and other investments until our Managing Trustee decides that a sale or other disposition is consistent with our disposition objectives or until it appears that these objectives will not be ~~unable~~met. Otherwise, our Managing Trustee may exercise its discretion as to whether and when to sell a property, ifand orwe ~~when~~will wehave ~~decide~~no obligation to dosell soproperties at any particular time, ~~which~~except ~~could~~upon ~~adversely~~the ~~impact~~termination of our ~~ability~~existence toin ~~pay~~2016, ~~special~~or ~~distributions~~after such date if our Managing Trustee determines that an extension is reasonably necessary to wind up our ~~beneficiaries~~affairs.

The real estate market is affected, as set forth above, by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms set by us, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. If we are unable to sell a property when we determine to do so, it could have a significant adverse effect on our cash flow, results of operations and our ability to pay special distributions to our beneficiaries.15

We may besuffer ~~unable~~adverse toconsequences ~~sell~~due ato ~~property~~the onfinancial ~~acceptable~~difficulties, ~~terms~~bankruptcy ~~and~~or ~~conditions,~~insolvency ifof atour ~~all~~tenants.

WeRecent ~~intend~~economic conditions have caused, and may continue to ~~hold~~cause, our tenants to experience financial difficulties, including bankruptcy, insolvency or ~~real~~a ~~properties~~general ~~and~~downturn ~~other~~in ~~investments~~their ~~until~~business. ~~our~~We ~~Managing~~cannot ~~Trustee~~assure ~~decides~~you that aany ~~sale~~tenant orthat ~~other~~files ~~disposition~~for isbankruptcy ~~consistent~~protection ~~with~~will ~~our~~continue ~~disposition~~to ~~objectives~~pay us rent. A bankruptcy filing by or ~~until~~relating itto ~~appears~~one of our tenants or a lease guarantor would bar efforts by us to collect pre-bankruptcy debts from that ~~these~~tenant ~~objectives~~or ~~will~~lease ~~not~~guarantor, beor ~~met~~its property, unless we receive an order permitting us to do so from the bankruptcy court. ~~Otherwise~~ In addition, ~~our~~we ~~Managing~~cannot ~~Trustee~~evict ~~may~~a tenant solely because of bankruptcy. The bankruptcy of a tenant or lease ~~exercise~~guarantor ~~its~~could ~~discretion~~delay asour efforts to ~~whether~~collect past due balances under the relevant leases, and ~~when~~could toultimately ~~sell~~preclude collection of these sums. If a ~~property~~lease is assumed by a tenant in bankruptcy, ~~and~~all pre-bankruptcy balances due under the lease must be paid to us in full. If, however, a lease is rejected by a tenant in bankruptcy, we ~~will~~would have noonly ~~obligation~~a general, unsecured claim for damages. An unsecured claim would only be paid to ~~sell~~the ~~properties~~extent atthat ~~any~~funds ~~particular~~are available and only in the same percentage as is paid to all ~~time~~other holders of general, ~~except~~unsecured ~~upon~~claims. Restrictions under the ~~termination~~bankruptcy oflaws ~~our~~further ~~existence~~limit inthe ~~2016,~~amount ~~or,~~of ~~after~~any ~~such~~other ~~date~~claims that we can make if ~~our~~a ~~Managing~~lease ~~Trustee~~is ~~determines~~rejected. ~~that~~As ana ~~extension~~ result, it is ~~reasonably~~likely ~~necessary~~that towe ~~wind~~would uprecover ~~our~~substantially ~~affairs~~less than the full value of the remaining rent during the term.

16Properties that have significant vacancies could be difficult to sell, which could diminish the return on an investment.

WeA property may ~~suffer adverse~~incur ~~consequences~~vacancies ~~due~~either toby the ~~financial~~continued ~~difficulties,~~default ~~bankruptcy~~of tenants under their leases or ~~insolvency~~the expiration of tenant leases. If vacancies continue for a long period of time, we may suffer reduced revenues resulting in a reduction in the total return to our ~~tenants~~beneficiaries. In addition, the resale value of the property could be diminished because the market value of a particular property will depend principally upon the value of the leases of such property.

~~The~~We ~~current~~are ~~economic conditions~~dependent ~~have~~on ~~caused, and may continue to cause, our~~ tenants ~~to experience financial difficulties, including bankruptcy, insolvency~~ ~~or a general downturn in their business. We cannot assure you that any tenant that files~~ for ~~bankruptcy protection will continue to pay us rent. A bankruptcy filing by or relating to one of~~ our ~~tenants~~revenue, orand a lease ~~guarantor~~terminations ~~would~~could ~~bar~~reduce ~~efforts by us to collect pre-bankruptcy debts from that tenant~~ or ~~lease~~prevent ~~guarantor,~~special ordistributions ~~its property, unless we receive an order permitting us~~ to ~~do so from the bankruptcy court. In addition, we cannot evict a tenant solely because of bankruptcy. The bankruptcy of a tenant or lease guarantor could delay~~ our ~~efforts to collect past due balances under the relevant leases, and could ultimately preclude collection of these sums~~beneficiaries. If a lease is assumed by a tenant in bankruptcy, all pre-bankruptcy balances due under the lease must be paid to us in full. If, however, a lease is rejected by a tenant in bankruptcy, we would have only a general, unsecured claim for damages. An unsecured claim would only be paid to the extent that funds are available and only in the same percentage as is paid to all other holders of general, unsecured claims. Restrictions under the bankruptcy laws further limit the amount of any other claims that we can make if a lease is rejected. As a result, it is likely that we would recover substantially less than the full value of the remaining rent during the term.

~~Properties~~The ~~that~~success ~~have~~of our real property investments is materially dependent on the financial stability of our tenants. A default by a significant tenant ~~vacancies~~on ~~could~~its belease ~~difficult~~payments to ~~sell,~~us ~~which~~would ~~could~~cause ~~diminish~~us to lose the ~~return~~revenue onassociated with such lease and cause us to have to find an alternative source of revenue to meet mortgage payments and prevent a foreclosure if the property is subject to a mortgage. In the event of a tenant default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-letting our property. If significant leases are terminated, we cannot assure investors that we will be able to lease the property for the rent previously received or sell the property without incurring a loss.

AIf ~~property~~we ~~may~~sell ~~incur vacancies~~any ~~either by the continued default~~ of ~~tenants under their leases or the expiration of tenant leases. If vacancies continue~~our ~~for~~properties ~~a long period of time, we may suffer reduced revenues resulting~~ in ~~a reduction~~ tenant-in-common ~~the total return to our beneficiaries. In addition~~transactions, ~~the~~those ~~resale~~sales ~~value~~may ~~of the property could~~ be ~~diminished~~viewed ~~because~~as ~~the~~sales ~~market value~~ of asecurities, ~~particular~~and ~~property~~we ~~will~~would ~~depend~~retain ~~principally~~potential liability ~~upon~~after the ~~value~~sale ofunder ~~the~~applicable ~~leases~~securities ~~of such property~~laws.

We ~~are~~may ~~dependent~~sell ~~on tenants~~properties ~~for~~in ~~our~~tenant-in-common ~~revenue~~transactions. If we do make such sales, they may be viewed as sales of securities, and ~~lease~~as ~~terminations~~a result, if the purchasers in the tenant-in-common transaction had post-closing claims, they could ~~reduce~~bring orclaims ~~prevent~~under ~~special~~applicable ~~distributions~~securities tolaws. Those claims could have a material adverse effect upon our ~~beneficiaries.~~business and results of operations.

~~The~~If ~~success~~we ofset ~~our real~~aside ~~property investments is materially dependent on the financial stability of our tenants. A default by a significant tenant~~insufficient onworking ~~its~~capital lease payments to us would cause us to lose the revenue associated with such lease and cause us to have to find an alternative source of revenue to meet mortgage payments and prevent a foreclosure if the property is subject to a mortgage. In the event of a tenant defaultreserves, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-letting our property. If significant leases are terminated, we cannot assure investors that we will be ~~able~~required to ~~lease~~ ~~the~~defer ~~property~~necessary ~~for the rent previously received or sell the~~ property ~~without incurring a loss~~improvements.

If we ~~sell~~do ~~any~~not estimate enough reserves for working capital to supply needed funds for capital improvements throughout the life of ~~our properties~~the ininvestment ~~tenant-~~in~~-common~~ ~~transactions~~a property, ~~those~~we ~~sales~~ may be ~~viewed~~required asto ~~sales~~defer necessary improvements to the property that may cause the property to suffer from a greater risk of ~~securities~~obsolescence or a decline in value, ~~and~~or wea ~~would~~greater ~~retain~~risk of decreased cash flow as a result of fewer potential ~~liability~~tenants being ~~after~~attracted to the ~~sale~~property. ~~under~~If ~~applicable~~this ~~securities~~happens, ~~laws~~we may not be able to maintain projected rental rates for affected properties, and our results of operations may be negatively impacted.

WeUninsured ~~may~~losses ~~sell properties~~relating into ~~tenant-in-common~~real ~~transactions.~~property Ifor weexcessively doexpensive ~~make~~premiums ~~such~~for ~~sales,~~insurance ~~they~~coverage may beadversely ~~viewed~~affect asinvestors’ ~~sales of securities, and as a result, if the purchasers in the tenant-in-common transaction had post-closing claims, they could bring claims under applicable securities laws~~returns. ~~Those~~ ~~claims could have a material adverse effect upon our business and results of operations.~~

IfOur Managing Trustee will attempt to ensure that all of our properties are adequately insured to cover casualty losses. However, there are types of losses which are generally catastrophic in nature and are related to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters which may be uninsurable, not economically insurable or may be insurable subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential terrorist acts could sharply increase the premiums we ~~set~~pay ~~aside~~for ~~insufficient~~coverage against property and casualty claims. Additionally, mortgage lenders in some cases have begun to ~~working~~insist ~~capital~~that ~~reserves~~specific coverage against terrorism be purchased by commercial property owners as a condition for providing mortgage loans. It is uncertain whether such insurance policies will be available, or available at reasonable cost, which could inhibit our ability to finance or refinance our properties. In such instances, we may be required to ~~defer~~provide ~~necessary~~other financial support, either through financial assurances or self-insurance, to cover potential losses. We cannot assure investors that we will have adequate coverage for such losses. In the event that any of our properties incur a casualty loss which is not fully covered by insurance, the value of our assets will be reduced by any such uninsured loss. In addition, other than the working capital reserve or other reserves we may establish, we have no source of funding to repair or reconstruct any uninsured damaged property, ~~improvements~~and we cannot assure our beneficiaries that any such sources of funding will be available to us for such purposes in the future. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in less cash available for distribution to our beneficiaries.

If we do not estimate enough reserves for working capital to supply needed funds for capital improvements throughout the life of the investment in a property, we may be required to defer necessary improvements to the property that may cause the property to suffer from a greater risk of obsolescence or a decline in value, or a greater risk of decreased cash flow as a result of fewer potential tenants being attracted to the property. If this happens, we may not be able to maintain projected rental rates for affected properties, and our results of operations may be negatively impacted.16

~~Uninsured~~Concentration ~~losses~~of ~~relating~~our toremaining ~~real~~investments in one property orclass ~~excessively~~may ~~expensive~~leave ~~premiums~~our ~~for~~profitability ~~insurance~~vulnerable ~~coverage~~to ~~may~~a ~~adversely~~downturn ~~affect~~in ~~investors’~~such ~~returns~~sector.

~~Our~~A ~~Managing~~significant ~~Trustee~~portion ~~will attempt to ensure that all~~ of our ~~properties~~remaining ~~are~~investments ~~adequately insured to cover casualty losses. However, there~~ are ~~types~~held ~~of losses which are generally catastrophic~~ in ~~nature~~one ~~and~~property ~~are~~class. ~~related~~As toa ~~wars~~result, ~~acts~~we ofwill ~~terrorism, earthquakes, floods, hurricanes, pollution or environmental matters which may~~ be ~~uninsurable, not economically insurable or may be insurable~~ subject to ~~limitations, such as large deductibles or co-payments. Insurance~~ risks ~~associated~~inherent ~~with~~in ~~potential terrorism acts could sharply increase the premiums~~investments ~~we pay for coverage against property and casualty claims. Additionally, mortgage lenders~~ in ~~some cases have begun to insist that specific coverage against terrorism be purchased by commercial property owners as~~ a ~~condition~~single ~~for~~type ~~providing~~of ~~mortgage loans~~property. ~~It is~~The ~~uncertain~~potential ~~whether~~effects ~~such~~on ~~insurance~~our ~~policies~~revenues ~~will~~and becorresponding ~~available,~~cash or available atfor ~~reasonable~~distribution ~~cost, which could inhibit our ability~~ to ~~finance or refinance~~ our ~~properties. In such instances, we may be required to provide other financial support, either through~~beneficiaries ~~financial~~resulting ~~assurances~~from ora ~~self-insurance,~~downturn toin ~~cover potential losses. We cannot assure investors that we will have adequate coverage for such losses. In~~ the ~~event~~businesses ~~that~~conducted ~~any~~in ofthis ~~our~~single ~~properties~~asset ~~incur~~class acould ~~casualty loss which is not fully covered by insurance, the value of our assets will~~ be ~~reduced~~more bypronounced ~~any such uninsured loss. In addition, other~~ than ~~the~~if ~~working capital reserve or other reserves~~ we ~~may~~had ~~establish, we have no source of funding to repair or reconstruct any uninsured damaged property, and we cannot assure limited~~more ~~partners~~fully ~~that~~diversified ~~any~~our ~~such sources of funding will be available to us for such purposes in the future~~investments. ~~Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in less cash available for distribution to beneficiaries.~~

17The costs of compliance with environmental laws and other governmental laws and regulations may adversely affect our income and the cash available for any distributions.

AAll ~~concentration~~real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of ~~our~~underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal ~~investments~~of insolid ~~any~~and ~~one~~hazardous ~~property~~materials, ~~class~~and the remediation of contamination associated with disposals. Some of these laws and regulations may ~~leave~~impose ~~our~~joint ~~profitability~~and ~~vulnerable~~several liability on tenants, owners or operators for the costs of investigation or remediation of contaminated properties, regardless of fault or the legality of the original disposal. In addition, the presence of these substances, or the failure to aproperly ~~downturn~~remediate inthese substances, may adversely affect our ability to sell or rent such ~~sector~~property or to use the property as collateral for future borrowing.

AtSome ~~any~~of ~~one~~these ~~time,~~laws and aregulations have been amended so as to require compliance with new or more stringent standards as of future dates. Compliance ~~significant~~with ~~portion~~new or more stringent laws or regulations or stricter interpretation of existing laws may require material expenditures by us. We cannot assure our ~~investments~~beneficiaries ~~could~~that befuture inlaws, ~~one~~ordinances ~~property~~or ~~class.~~regulations Aswill anot ~~result~~impose any material environmental liability, weor that the current environmental condition of our properties will not be ~~subject~~affected toby ~~risks~~the ~~inherent~~operations inof ~~investments~~the tenants, inby athe ~~single~~existing ~~type~~condition of ~~property.~~the ~~The~~land, ~~potential~~by ~~effects~~operations onin ~~our~~the ~~revenues~~vicinity ~~and~~of ~~corresponding~~the ~~cash~~properties, ~~available~~such ~~for~~as ~~distribution~~the topresence ~~our~~of ~~unitholders~~underground storage ~~resulting~~tanks, ~~from~~or aby ~~downturn~~the inactivities ~~the~~of ~~businesses~~unrelated ~~conducted~~third inparties. aIn ~~single~~addition, ~~asset~~there ~~class~~are ~~could~~various belocal, ~~more~~state ~~pronounced~~and ~~than~~federal iffire, health, life-safety and similar regulations with which we ~~had~~may ~~more~~be ~~fully~~required to comply, and which may subject us to liability in the form ~~diversified~~of ~~our~~fines ~~investments~~or damages for noncompliance.

~~The~~Discovery ~~costs~~ of ~~compliance~~previously ~~with~~undetected ~~environmental~~environmentally ~~laws~~hazardous ~~and~~conditions ~~other governmental laws and regulations~~ may adversely affect our ~~income~~operating ~~and the cash available for any distributions~~results.

~~All~~Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property ~~and~~may be liable for the ~~operations~~cost ~~conducted~~of onremoval ~~real~~or ~~property~~remediation ~~are~~of ~~subject~~hazardous toor ~~federal~~toxic substances on, ~~state~~under ~~and~~or ~~local~~in ~~laws~~such ~~and~~property. ~~regulations~~The ~~relating~~costs toof ~~environmental~~removal ~~protection~~or ~~and~~remediation ~~human~~could ~~health~~be ~~and safety~~substantial. ~~These~~Such laws ~~and~~often ~~regulations~~impose ~~generally~~liability ~~govern~~whether ~~wastewater~~or ~~discharges,~~not ~~air~~the ~~emissions~~owner or operator knew of, ~~the~~or ~~operation~~was responsible ~~and~~for, ~~removal~~the presence of ~~underground~~such ~~and~~hazardous ~~above-ground~~or ~~storage~~toxic ~~tanks,~~substances. ~~the~~Environmental ~~use,~~laws ~~storage,~~also ~~treatment,~~may ~~transportation~~impose ~~and~~restrictions ~~disposal~~on ofthe ~~solid~~manner ~~and~~in which ~~hazardous~~property ~~materials~~may be used or businesses may be operated, and these restrictions may require substantial expenditures. Environmental laws provide for sanctions in the ~~remediation~~event of ~~contamination~~noncompliance ~~associated~~and ~~with~~may ~~disposals.~~be ~~Some~~enforced ofby ~~these~~governmental ~~laws~~agencies ~~and~~or, ~~regulations~~in ~~may~~certain ~~impose~~circumstances, ~~joint~~by private parties. Certain environmental laws and ~~several~~common law principles could be used to impose liability onfor ~~tenants~~release of and exposure to hazardous substances, ~~owners~~including orasbestos-containing ~~operators~~materials ~~for~~into the ~~costs~~air, ofand ~~investigation~~third parties may seek recovery from owners or ~~remediation~~operators of ~~contaminated~~real properties~~, regardless~~ offor ~~fault~~personal injury or ~~the~~property ~~legality~~damage ofassociated ~~the~~with ~~original~~exposure ~~disposal~~to released hazardous substances. The Incost ~~addition~~of defending against claims of liability, ~~the~~of ~~presence~~compliance with environmental regulatory requirements, of ~~these~~remediating ~~substances~~any contaminated property, or ~~the~~of ~~failure~~paying ~~to properly~~personal ~~remediate~~injury ~~these~~claims ~~substances,~~could ~~may~~materially adversely affect our ~~ability~~business, toassets ~~sell~~ or ~~rent~~results ~~such~~of operations ~~property~~and, orconsequently, toamounts ~~use~~available ~~the~~for ~~property~~distribution asto ~~collateral for~~our ~~future borrowing~~beneficiaries.

~~Some~~Our ofcosts ~~these laws~~associated ~~and regulations have been amended so as to require compliance~~ with ~~new~~complying ~~or more stringent standards as of future dates. Compliance~~ with new or more stringent laws or regulations or stricter interpretation of existing laws may require material expenditures by us. We cannot assure beneficiaries that future laws, ordinances or regulations will not impose any material environmental liability, or that the ~~current~~Americans environmental condition of our properties will not be affected by the operations of the tenants, by the existing condition of the land, by operations in the vicinity of the properties, such as the presence of underground storage tanks, or by the activities of unrelated third parties. In addition, there are various local, state and federal fire, health, life-safety and similar regulations with ~~which~~Disabilities weAct may beaffect ~~required~~cash toavailable ~~comply, and which may subject us to liability in the form of fines or damages~~ for ~~noncompliance~~distributions.

~~Discovery~~Our properties may be subject to the Americans with Disabilities Act of ~~previously~~1990, as amended (the “Disabilities Act”). Under the Disabilities ~~undetected~~Act, ~~environmentally~~all ~~hazardous~~places ~~conditions~~of ~~may~~public ~~adversely~~accommodation ~~affect~~are ~~our~~required ~~operating~~to ~~results~~comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. The Disabilities Act’s requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. We will attempt to place the burden on the seller or other third party, such as a tenant, to ensure compliance with the Disabilities Act. However, we cannot assure investors that we have acquired properties or will be able to allocate responsibilities in this manner. If we cannot, our funds used for Disabilities Act compliance may affect cash available for distributions and the amount of distributions, if any.

~~Under~~If ~~various~~we ~~federal, state~~sell ~~and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be~~properties ~~liable~~by ~~for~~providing ~~the~~financing ~~cost~~to ~~of removal or remediation of hazardous or toxic substances on~~purchasers, ~~under~~we orwill inbear ~~such property. The costs of removal or remediation could be substantial. Such laws often impose liability whether or not~~ the ~~owner~~risk ~~or operator knew~~ of, ordefault was responsible for, the presence of such hazardous or toxic substances. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures. Environmental laws provide for sanctions in the event of noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for release of and exposure to hazardous substances, including asbestos-containing materials into the ~~air, and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with exposure to released hazardous substances~~purchaser. The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution to beneficiaries.

~~Our~~If ~~costs~~we ~~associated~~decide ~~with~~to sell ~~complying~~any ~~with~~of our properties, we intend to use our best efforts to sell them for cash. However, in some instances we may sell our properties by providing financing to purchasers. When we provide financing to purchasers, we will bear the ~~Americans~~risk ~~with~~of ~~Disabilities~~default ~~Act~~by the purchaser and will be subject to remedies provided by law, which could negatively impact our distributions to our beneficiaries. There are no limitations or restrictions on our ability to take purchase money obligations. We may, ~~affect~~therefore, ~~cash~~take ~~available~~a purchase money obligation secured by a mortgage as part payment for ~~distributions~~the purchase price. The terms of payment to us generally will be affected by custom in the area where the property being sold is located and the then-prevailing economic conditions. If we receive promissory notes or other property in lieu of cash from property sales, the distribution of the proceeds of sales to our beneficiaries will be delayed until the promissory notes or other property are actually paid, sold, refinanced or otherwise disposed of. In some cases, we may receive initial down payments in cash and other property in the year of sale in an amount less than the selling price and subsequent payments will be spread over a number of years. If any purchaser defaults under a financing arrangement with us, it could negatively impact our ability to pay distributions to our beneficiaries.

Our properties may be subject to the Americans with Disabilities Act of 1990, as amended (the “Disabilities Act”). Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. The Disabilities Act’s requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. We will attempt to place the burden on the seller or other third party, such as a tenant, to ensure compliance with the Disabilities Act. However, we cannot assure investors that we have acquired properties or will be able to allocate responsibilities in this manner. If we cannot, our funds used for Disabilities Act compliance may affect cash available for distributions and the amount of distributions, if any.17

18We may have to make significant capital expenditures to maintain lodging facilities.

IfHotels have wean ~~sell~~ongoing ~~properties by~~need ~~providing~~for ~~financing~~renovations toand ~~purchasers~~other capital improvements, including replacement of furniture, fixtures and equipment. Generally, we will ~~bear~~be responsible for the ~~risk~~costs of ~~default~~these bycapital improvements, which gives rise to the ~~purchaser.~~following risks:

If· wecost ~~decide~~overruns to sell any of our properties, we intend to use our best efforts to sell them for cash. However, in some instances we may sell our properties by providing financing to purchasers. When we provide financing to purchasers, we will bear the risk of default by the purchaser and will be subject to remedies provided by law, which could negatively impact our distributions to beneficiaries. There are no limitations or restrictions on our ability to take purchase money obligations. We may, therefore, take a purchase money obligation secured by a mortgage as part payment for the purchase price. The terms of payment to us generally will be affected by custom in the area where the property being sold is located and the then-prevailing economic conditions. If we receive promissory notes or other property in lieu of cash from property sales, the distribution of the proceeds of sales to our beneficiaries will be delayed until the promissory notes or other property are actually paid, sold, refinanced or otherwise disposed of. In some cases, we may receive initial down payments in cash and other property in the year of sale in an amount less than the selling price and subsequent payments will be spread over a number of years. If any purchaser defaults under a financing arrangement with us, it could negatively impact our ability to pay distributions to beneficiaries.delays;

We· ~~may~~renovations ~~have~~can be disruptive to ~~make~~operations ~~significant capital~~and ~~expenditures~~can todisplace ~~maintain~~revenue ~~lodging~~at ~~facilities.~~the hotels, including revenue lost while rooms under renovation are out of service;

~~Hotels~~· ~~have~~the ancost ~~ongoing need~~of ~~for~~funding renovations and ~~other~~the ~~capital~~possibility ~~improvements,~~that ~~including~~financing ~~replacement~~for ofthese ~~furniture,~~renovations ~~fixtures~~may ~~and~~not ~~equipment. Generally, we will~~ be ~~responsible~~available ~~for~~on ~~the~~attractive ~~costs~~terms ofor ~~these~~at ~~capital~~all; ~~improvements, which gives rise to the following risks:~~and

· ~~cost~~the ~~overruns~~risk ~~and~~that ~~delays;~~the return on our investment in these capital improvements will be less than expected.

·If we ~~renovations~~have ~~can~~insufficient becash ~~disruptive~~ to ~~operations~~fund ~~and~~needed ~~can~~capital ~~displace revenue at the hotels~~expenditures, ~~including~~then ~~revenue~~we ~~lost~~will ~~while~~need ~~rooms~~to ~~under~~borrow ~~renovation~~money ~~are~~to ~~out~~fund offuture ~~service;~~capital improvements.

·We are ~~the~~dependent ~~cost of funding renovations and the possibility that financing for these renovations may not be available~~ on ~~attractive~~third-party ~~terms~~managers orof atlodging ~~all; and~~facilities.

·We depend on independent management companies to adequately operate our hotel. We may not have the ~~risk~~authority ~~that~~to require any hotel to be operated in a particular manner or to govern any particular aspect of the ~~return~~daily onoperations of any hotel (for instance, setting room rates). Thus, even if we believe our ~~investment~~hotel is being operated inefficiently or in ~~these~~a ~~capital~~manner ~~improvements~~that ~~will~~does not result in satisfactory occupancy rates, revenue per available room and average daily rates, we may not be ~~less~~able ~~than~~to ~~expected~~force the management company to change its method of operation of our hotel. We can only seek remedies against a management company to the extent that it violates the terms of the applicable management agreement and such remedies are provided for under the terms of the management agreement. In the event that we need to replace any of our management companies, we may be required by the terms of the management agreement to pay substantial termination fees and may experience significant disruptions at the affected hotels.

IfRisks ~~we have insufficient~~Related ~~cash~~ to ~~fund~~Conflicts ~~needed~~of ~~capital expenditures, then we will need to borrow money to fund future capital improvements.~~Interest

We will ~~are~~be ~~dependent~~subject onto ~~third-party managers~~conflicts of ~~lodging~~interest ~~facilities~~arising out of our relationships with our Managing Trustee and its affiliates, including the material conflicts discussed below.

~~We depend on independent~~Our ~~management~~Managing ~~companies~~Trustee toand ~~adequately~~certain ~~operate~~of ~~our~~its ~~hotel.~~key Wepersonnel ~~may~~will ~~not~~face ~~have~~competing ~~the~~demands ~~authority~~relating to ~~require~~their ~~any hotel to be operated in a particular manner or to govern any particular aspect of the daily operations of any hotel (for instance~~time, ~~setting room rates). Thus, even if we believe our hotel is being operated inefficiently or in a manner that does not result in satisfactory occupancy rates, revenue per available room~~ and ~~average~~this ~~daily rates, we~~ may ~~not~~cause ~~be able to force the management company to change its method of operation of~~ our ~~hotel. We can only seek remedies against a management company to the extent that it violates the terms of the applicable~~investment ~~management~~returns ~~agreement and such remedies are provided for under the terms of the management agreement. In the event that we need~~ to replace any of our management companies, we may be required by the terms of the management agreement to pay substantial termination fees and may experience significant disruptions at the affected hotelssuffer.

~~Risks~~Our Managing ~~Related~~Trustee and certain of its key personnel and their respective affiliates are general partners and sponsors of other real estate programs having investment objectives and legal and financial obligations similar to ~~Conflicts~~ours and may have other business interests as well. Because these persons have competing interests on their time and resources, they may have conflicts of ~~Interest~~interest in allocating their time between our business and these other activities. During times of intense activity in other programs and ventures, they may devote less time and resources to our business than is necessary or appropriate. If this occurs, the returns on our investments may suffer.

WeOur Managing Trustee will beface ~~subject to~~ conflicts of interest ~~arising~~relating ~~out~~to ofjoint ~~our~~ventures, ~~relationships~~which ~~with~~could ~~our~~result ~~Managing~~in ~~Trustee~~a ~~and~~disproportionate ~~its~~benefit to ~~affiliates,~~a ~~including~~Behringer ~~the~~program ~~material conflicts~~or ~~discussed~~third ~~below~~party other than us.

~~Our~~We have ~~Managing~~entered ~~Trustee~~into ~~and~~joint ventures with third parties having investment objectives similar to ours for the acquisition, development ~~certain~~or improvement of ~~its~~properties. ~~key~~We ~~personnel~~have ~~will~~also ~~face~~purchased ~~competing~~and ~~demands~~developed ~~relating~~properties toin ~~their~~joint ~~time~~ventures or in partnerships, ~~and~~co-tenancies or ~~this~~other ~~may~~co-ownership ~~cause~~arrangements ~~our~~with ~~investment~~the ~~returns~~sellers toof ~~suffer~~the properties, affiliates of the sellers, developers or other persons. Such investments may involve risks not otherwise present with other methods of investment in real estate, including, for example:

~~Our~~· ~~Managing~~the ~~Trustee and~~possibility ~~certain~~that of its key personnel and their respective affiliates are general partners and sponsors of other real estate programs having investment objectives and legal and financial obligations similar to ours and may have other business interests as well. Because these persons have competing interests on their time and resources, they may have conflicts of interest in allocating their time between our ~~business and these other activities. During times of intense activity in other programs and ventures~~co-venturer, ~~they~~co-tenant ~~may devote less time and resources to our business than is necessary~~ or ~~appropriate.~~partner Ifin ~~this~~an ~~occurs,~~investment ~~the~~might ~~returns~~become ~~on our investments may suffer.~~bankrupt;

~~Our~~· ~~Managing~~the ~~Trustee~~possibility ~~will face~~that ~~conflicts~~the ofinvestment ~~interest~~requires ~~relating~~additional tocapital ~~joint~~that ~~ventures~~we and/or our partner do not have, which ~~could~~lack ~~result~~of incapital acould ~~disproportionate~~affect ~~benefit~~the toperformance aof ~~Behringer~~the ~~Harvard program~~investment and/or ~~third~~dilute ~~party~~our ~~other~~interest ~~than~~if ~~us.~~the partner were to contribute our share of the capital;

We· ~~have~~that ~~entered~~such ~~into joint ventures with third parties having investment objectives similar to ours for the acquisition~~co-venturer, ~~development~~co-tenant or ~~improvement of~~partner ~~properties.~~may Weat ~~have~~any ~~also~~time ~~purchased~~have ~~and~~economic ~~developed properties in joint ventures~~ or inbusiness ~~partnerships,~~interests ~~co-tenancies~~ or ~~other~~goals ~~co-ownership arrangements~~which ~~with~~are ~~the sellers of the properties, affiliates of the sellers, developers~~ or ~~other~~which ~~persons.~~become ~~Such~~inconsistent ~~investments may involve risks not otherwise present~~ with ~~other~~our ~~methods~~business ofinterests ~~investment~~or ~~in real estate, including, for example:~~goals;

· ~~the possibility~~ that ~~our~~such co-venturer, co-tenant or partner may be in ana ~~investment~~position ~~might~~to ~~become~~take ~~bankrupt~~action contrary to our instructions or requests or contrary to our policies or objectives;

· the possibility that the investment requires additional capital that we and/or our partner do not have, which lack of capital could affect the performance of the investment and/or dilute our interest if the partner were to contribute our share of the capital;18

19· the possibility that we may incur liabilities as the result of the action taken by our co-venturer, co-tenant or partner; or

· that such ~~co-venturer,~~partner ~~co-tenant~~may orexercise ~~partner~~buy/sell ~~may~~rights atthat ~~any~~force ~~time~~us ~~have~~to ~~economic~~either oracquire ~~business~~the ~~interests~~entire investment, or ~~goals~~dispose ~~which~~of ~~are~~our orshare, ~~which~~at ~~become~~a ~~inconsistent~~time ~~with~~and ~~our~~price ~~business~~that ~~interests~~may ornot ~~goals;~~be consistent with our investment objectives.

·Actions by ~~that~~ such a co-venturer, co-tenant or partner ~~may~~might behave inthe aresult ~~position~~of tosubjecting ~~take~~the ~~action~~property ~~contrary~~ to ~~our~~liabilities ~~instructions~~in orexcess ~~requests~~of orthose contemplated ~~contrary~~and tomay ~~our~~have ~~policies~~the oreffect ~~objectives;~~of reducing beneficiaries’ returns.

·Affiliates of ~~the~~our ~~possibility~~Managing Trustee have sponsored, or are currently sponsoring, registered public offerings on behalf of TIER REIT, Inc., (“TIER REIT”) (formerly Behringer Harvard REIT I, Inc.), Behringer Harvard Opportunity REIT I, Inc. (“Behringer Harvard Opportunity REIT I”), Behringer Harvard Opportunity REIT II, Inc. (“Behringer Harvard Opportunity REIT II”), Behringer Harvard Multifamily REIT I, Inc. (“Behringer Harvard Multifamily REIT”) and Behringer Harvard Mid-Term Value Enhancement Fund I LP (“Behringer Harvard Mid-Term Value Enhancement Fund”). Behringer Harvard Advisors I LP (an entity that weis ~~may~~under ~~incur~~common ~~liabilities~~control with our Managing Trustee, Behringer Advisors II), acts as ~~the~~managing ~~result~~trustee of ~~the~~Behringer Harvard ~~action~~Mid-Term ~~taken~~Value byEnhancement ~~our~~Liquidating coTrust (successor in interest to Behringer Harvard Mid-~~venturer~~Term Value Enhancement Fund). Because our Managing Trustee or its affiliates have advisory and management arrangements with other Behringer programs, ~~co-tenant~~it is likely that they will encounter opportunities to acquire or ~~partner;~~sell properties to the benefit of one of the Behringer programs, but not others. Our Managing Trustee or its affiliates may make decisions to sell certain properties, which decisions might disproportionately benefit a Behringer program other than us.

·The Managing ~~that~~Trustee ~~such~~and ~~partner~~certain ~~may~~of ~~exercise~~its ~~buy/sell~~affiliates ~~rights~~face ~~that~~conflicts ~~force~~of usinterest tocaused ~~either~~by ~~acquire~~their ~~the~~compensation ~~entire~~arrangements ~~investment,~~with ~~or dispose of our share~~us, atwhich could aresult ~~time~~in ~~and~~actions ~~price~~ that ~~may~~are not bein ~~consistent~~the ~~with~~long-term ~~our~~best ~~investment~~interests ~~objectives~~of our beneficiaries.

~~Actions~~Our Managing byTrustee ~~such~~and acertain ~~co-venturer~~of its affiliates, ~~co-tenant~~ orincluding ~~partner~~our ~~might~~Property ~~have~~Manager, are entitled to substantial fees from us under the ~~result~~terms of ~~subjecting~~our ~~the~~Liquidating Trust Agreement and property tomanagement ~~liabilities~~agreement. inThese ~~excess~~fees ofwere ~~those~~not ~~contemplated~~negotiated at arm’s length and ~~may~~reduce ~~have~~ the ~~effect~~amount of ~~reducing~~cash ~~beneficiaries’~~available ~~returns~~for distributions.

~~Affiliates of our Managing~~These ~~Trustee~~fees ~~have~~could ~~sponsored,~~influence or are currently sponsoring, registered public offerings on behalf of Behringer Harvard REIT I, Inc. (“Behringer Harvard REIT I”), Behringer Harvard Opportunity REIT I, Inc. (“Behringer Harvard Opportunity REIT I”), Behringer Harvard Opportunity REIT II, Inc. (“Behringer Harvard Opportunity REIT II”), Behringer Harvard Multifamily REIT I, Inc. (“Behringer Harvard Multifamily REIT”) and Behringer Harvard Mid-Term Value Enhancement Fund I LP (“Behringer Harvard Mid-Term Value Enhancement Fund”). Behringer Harvard Advisors I LP (an entity that is under common control with our Managing Trustee,’s ~~Behringer~~advice ~~Advisors~~to ~~II)~~us, ~~acts~~as well as ~~managing~~the ~~trustee~~judgment of ~~Behringer Harvard Mid-Term Value Enhancement Liquidating Trust (successor in interest to Behringer Harvard Mid-Term Value Enhancement Fund). Because our Managing Trustee or~~ its affiliates ~~have~~performing ~~advisory and management arrangements with other Behringer Harvard programs, it is likely that they~~services ~~will~~for ~~encounter opportunities to acquire or sell properties to the benefit of one of the Behringer Harvard programs, but not others~~us. ~~Our~~ ~~Managing~~Among ~~Trustee~~other ~~or its affiliates may make decisions to buy or sell certain properties~~matters, ~~which~~these ~~decisions~~compensation ~~might~~arrangements ~~disproportionately benefit~~could aaffect ~~Behringer~~their ~~Harvard~~judgment ~~program~~with ~~other~~respect ~~than us.~~to:

If· wecontinuing, ~~enter~~renewing ~~into~~or ~~a joint~~enforcing ~~venture~~our agreements with ~~another Behringer Harvard program or joint venture,~~ our Managing Trustee ~~may have a conflict of interest when determining when~~ and whether to sell a particular real estate property, and beneficiaries may face certain additional risks. For example, if we enter into a joint venture with a Behringer Harvard real estate investment trust (“REIT”) that subsequently becomes listed on a national exchange, such REIT would automatically become a perpetual life entity at the time of listing and might not continue to have similar goals and objectives with respect to the resale of properties as it had prior to being listed. In addition, if that Behringer Harvard REIT was not listed on a securities exchange by the time set forth in its ~~charter~~affiliates, ~~its~~including ~~organizational documents might provide for an immediate liquidation of its assets. In~~ the ~~event~~advisory ofmanagement ~~such~~agreement ~~liquidation, any joint venture between us~~ and ~~that Behringer Harvard REIT might also be required to sell its properties at such time even though we may not otherwise desire to do so. Although~~ the ~~terms~~property ofmanagement ~~any joint venture~~ agreement between us and another Behringer Harvard program would grant us a right of first refusal to buy such properties, it is unlikely that we would have sufficient funds to exercise our right of first refusal under these circumstances.;

~~Since~~· ~~our~~property ~~Managing Trustee and its affiliates control us and either control or serve as advisor to other Behringer Harvard programs~~sales, agreements and transactions between the parties with respect to any joint venture between or among such parties will not have the benefit of arm’s length negotiation of the type normally conducted between unrelated co-venturers. Under these joint venture arrangements, neither co-venturer may have the power to control the venture, and under certain circumstances, an impasse could be reached regarding matters pertaining to the joint venture, which ~~might~~reduce ~~have a negative influence on~~ the ~~joint~~asset ~~venture~~management and ~~decrease~~property ~~potential~~management ~~returns~~fees topayable ~~beneficiaries. In the event that a co-venturer has a right of first refusal~~ to ~~buy out the other co-venturer, it may be unable to finance such buy-out at that time. It may also be difficult for us to sell~~ our ~~interest~~Managing inTrustee ~~any such joint venture~~ or ~~partnership~~its oraffiliates asbut aalso ~~co-tenant in~~entitle ~~property.~~them ~~In addition,~~ to ~~the~~real ~~extent~~estate ~~that our co-venturer, partner or co-tenant is an affiliate of our Managing Trustee, certain conflicts of interest will exist.~~commissions;

~~The~~· ~~Managing~~borrowings ~~Trustee~~to ~~and certain~~refinance ~~of its affiliates face conflicts of interest caused by their compensation arrangements with us~~properties, which ~~could~~increase ~~result in actions that are not in~~ the ~~long-term~~debt ~~best~~financing ~~interests~~fees ofpayable to our ~~unitholders.~~Managing Trustee;

~~Our~~· ~~Managing~~determining ~~Trustee and~~the ~~certain~~compensation ofpaid ~~its~~to ~~affiliates,~~employees ~~including~~for ~~our~~services ~~Property~~provided ~~Manager, are entitled~~ to ~~substantial fees from~~ us, ~~under~~which ~~the~~could ~~terms~~be ofinfluenced ~~our Liquidating~~in ~~Trust~~part ~~Agreement~~by ~~and~~whether ~~property~~or ~~management~~not ~~agreement.~~the ~~These~~Managing ~~fees~~Trustee ~~were~~is ~~not~~reimbursed ~~negotiated~~by atus ~~arm’s~~for ~~length and reduce~~ the ~~amount~~related ofsalaries ~~cash~~and ~~available~~benefits; ~~for distributions.~~and

~~These~~· ~~fees~~whether ~~could~~and ~~influence our~~when ~~Managing~~we ~~Trustee’s~~seek ~~advice~~ to ~~us,~~sell asour ~~well as the judgment of its affiliates performing services for us. Among other matters~~assets, ~~these~~ ~~compensation~~which ~~arrangements~~sale could ~~affect~~entitle ~~their~~our ~~judgment~~Managing ~~with~~Trustee ~~respect~~real ~~to:~~estate commissions.

·The fees ~~continuing,~~our ~~renewing~~Managing orTrustee ~~enforcing~~receives ~~our~~in ~~agreements~~connection with ~~our~~transactions ~~Managing~~involving ~~Trustee~~the ~~and~~management ~~its~~of ~~affiliates~~an asset are based on the cost of the investment, including the ~~advisory~~amount ~~management~~budgeted ~~agreement~~for the development, construction, and improvement of each asset, and are not based on the ~~property~~quality ~~management~~of ~~agreement;~~the investment or the quality of the services rendered to us. This may influence our Managing Trustee to recommend riskier transactions to us.

·We may ~~property~~be ~~sales,~~restricted ~~which~~in ~~reduce~~our ~~the~~ability ~~asset management and property management fees payable~~ to replace our ~~Managing~~Property ~~Trustee~~Manager orunder ~~its~~certain ~~affiliates but also entitle them to real estate commissions;~~circumstances.

·Under the ~~borrowings~~terms toof ~~refinance~~our ~~properties~~property management agreement, ~~which~~we ~~increase~~may terminate the ~~debt~~agreement ~~financing~~upon ~~fees~~30 ~~payable~~days’ tonotice in the event of (and only in the event of) a showing of willful misconduct, gross negligence, or deliberate malfeasance by our Property Manager in the performance of their duties. Our Managing Trustee; may find the performance of our Property Manager to be unsatisfactory. However, such performance by the Property Manager may not reach the level of “willful misconduct, gross negligence, or deliberate malfeasance.” As a result, we may be unable to terminate the property management agreement at the desired time, which may have an adverse effect on the management and profitability of our properties.

20Our Managing Trustee and certain of its key personnel face conflicts of interest related to the positions they hold with affiliated entities, which could diminish the value of the services they provide to us.

·Certain of ~~determining~~the key personnel of Behringer Advisors II are also officers of our Property Manager, our dealer manager and other affiliated entities. As a result, these individuals owe fiduciary duties to these other entities, which may conflict with the ~~compensation~~fiduciary ~~paid~~duties that they owe to ~~employees~~us ~~for~~and ~~services~~our ~~provided~~investors. Conflicts with our business and interests are most likely to arise from involvement in activities related to (1) allocation of management time and services between us and the other entities, ~~which~~(2) ~~could~~the betiming ~~influenced~~and interms of ~~part~~the sale of an asset, (3) development of our properties by ~~whether~~affiliates, or(4) ~~not~~investments ~~the~~with affiliates of our Managing Trustee, (5) compensation isto ~~reimbursed~~our byManaging usTrustee, ~~for~~and ~~the~~(6) ~~related~~our ~~salaries~~relationship with our dealer manager and ~~benefits;~~Property Manager.

~~· whether and when we seek to sell our assets, which sale could entitle our Managing Trustee real estate commissions.~~19

~~The fees our Managing~~Because ~~Trustee~~we ~~receives~~rely inon ~~connection~~affiliates ~~with~~of ~~transactions~~Behringer ~~involving~~Holdings for the ~~management~~provision of anproperty ~~asset~~management ~~are~~services, ~~based~~if onBehringer ~~the~~Holdings ~~cost~~is ofunable to ~~the~~meet ~~investment~~its obligations, ~~including~~ ~~the~~we ~~amount~~may ~~budgeted~~be ~~for~~required ~~the~~to ~~development,~~find ~~construction,~~alternative ~~and~~providers ~~improvement~~ of ~~each~~these ~~asset~~services, ~~and~~which ~~are~~could ~~not~~result ~~based~~in ona ~~the quality~~significant ofand ~~the~~costly ~~investment~~disruption ~~or the quality~~ of ~~the services rendered to us. This may influence~~ our ~~Managing Trustee to recommend riskier transactions to us~~business.

WeBehringer Holdings, ~~may~~through beone ~~restricted in~~or more of its subsidiaries, owns and controls our ~~ability~~Property toManager. ~~replace~~The operations of our Property Manager rely ~~under~~substantially ~~certain~~on ~~circumstances~~Behringer Holdings. In light of the common ownership of this entity and its reliance on Behringer Holdings, we consider the financial condition of Behringer Holdings when assessing the financial condition of our Property Manager. In the event that Behringer Holdings would be unable to meet its obligations as they become due, we might be required to find alternative service providers, which could result in a significant and costly disruption of our business.

~~Under the terms of~~There ~~our~~is ~~property~~no ~~management~~separate ~~agreement,~~counsel wefor ~~may~~us ~~terminate the agreement upon 30 days’ notice in the event of (~~and ~~only in the event of) a showing of willful misconduct, gross negligence, or deliberate malfeasance by~~ our ~~Property Manager in the performance of their duties. Our Managing Trustee may find the performance of our Property Manager to be unsatisfactory. However~~affiliates, ~~such~~which ~~performance by~~could ~~the Property Manager may not reach the level of “willful misconduct, gross negligence, or deliberate malfeasance.” As a~~ result, wein ~~may~~conflicts ~~be unable to terminate the property management agreement at the desired time, which may have an adverse effect on the management and profitability~~ of ~~our properties~~interest.

~~Our~~DLA Piper LLP (US) acts as legal counsel to us, and is also expected to represent our Managing Trustee and ~~certain~~some of its ~~key~~affiliates from ~~personnel~~time ~~face~~to ~~conflicts~~time. There is a possibility in the future that the interests of ~~interest~~the ~~related~~various toparties may become adverse and, under the ~~positions~~Code ~~they~~of ~~hold~~Professional ~~with~~Responsibility ~~affiliated~~of ~~entities~~the legal profession, DLA Piper LLP (US) may be precluded from representing any one or all of such parties. If any situation arises in which our interests appear to be in conflict with those of our Managing Trustee ~~could~~or ~~diminish~~its affiliates, additional counsel may be retained by one or more of the ~~value~~parties to assure that their interests are adequately protected. Moreover, should such a conflict not be readily apparent, or otherwise not recognized, DLA Piper LLP (US) may inadvertently act in derogation of the ~~services~~interest ~~they~~of ~~provide~~the toparties which could affect us. and, therefore, our beneficiaries, and our ability to meet our investment objectives.

~~Certain of the key~~Federal ~~personnel~~Income ofTax ~~Behringer~~Risks Advisors II are also officers of our Property Manager, our dealer manager and other affiliated entities. As a result, these individuals owe fiduciary duties to these other entities, which may conflict with the fiduciary duties that they owe to us and our investors. Conflicts with our business and interests are most likely to arise from involvement in activities related to (1) allocation of management time and services between us and the other entities, (2) the timing and terms of the sale of an asset, (3) development of our properties by affiliates, (4) investments with affiliates of our Managing Trustee, (5) compensation to our Managing Trustee, and (6) our relationship with our dealer manager and Property Manager.

~~Because we rely on affiliates~~There ofcan ~~Behringer~~be ~~Holdings~~no ~~for~~assurance that the ~~provision~~Liquidating ofTrust ~~property~~will ~~management, if Behringer Holdings is unable to meet its obligations, we may~~ be ~~required~~treated toas ~~find alternative providers of these services, which could result in~~ a ~~significant~~partnership ~~and~~for ~~costly~~federal ~~disruption~~income oftax ~~our business~~purposes.

~~Behringer Holdings,~~The ~~through~~Liquidating ~~one~~Trust oris ~~more~~intending to be treated as a continuation of ~~its~~the ~~subsidiaries,~~Partnership ~~owns~~and classified as a partnership for federal income tax purposes, and ~~controls~~therefore ~~our~~income, ~~Property~~gains, ~~Manager.~~losses, ~~The~~deductions ~~operations~~and ofcredits ~~our~~(if ~~Property~~any) ~~Manager~~realized ~~rely~~by ~~substantially~~the Liquidating Trust will onbe ~~Behringer~~allocated ~~Holdings~~among the beneficiaries for federal tax purposes in the same manner as previously allocated by the Partnership. Further, with Inthe ~~light~~transfer of all of the ~~common~~Partnership’s ~~ownership~~remaining ofassets ~~this~~to ~~entity~~the Liquidating Trust and ~~its~~the ~~reliance~~assumption onby ~~Behringer~~the ~~Holdings~~Liquidating Trust of all of the Partnership’s remaining liabilities, weit ~~consider~~is contemplated that there will be no change to the adjusted ~~financial~~basis ~~condition~~ of ~~Behringer~~any ~~Holdings~~beneficiary’s ~~when~~interest ~~assessing~~in the ~~financial~~Liquidating ~~condition~~Trust ofand ~~our~~the ~~Property~~beneficiaries ~~Manager.~~will Ineach ~~the~~have ~~event~~an ~~that~~adjusted ~~Behringer~~basis with ~~Holdings~~respect ~~would~~to besuch ~~unable~~beneficiary’s beneficial interest in the Liquidating Trust equal to ~~meet~~the ~~its~~adjusted ~~obligations~~basis asof ~~they~~such ~~become~~beneficiary’s limited ~~due~~partnership interest in the Partnership immediately prior to the Effective Date. On a yearly basis, wethe ~~might~~Managing Trustee bewill ~~required~~cause the Liquidating Trust to ~~find~~continue ~~alternative~~to ~~service~~issue ~~providers~~a Schedule K-1 to each beneficiary. However, there can ~~which~~be ~~could~~no ~~result~~assurance inthat the Liquidating Trust will be treated as a ~~significant~~partnership ~~and~~for ~~costly~~federal ~~disruption~~income tax purposes. We will advise you if we learn that the tax treatment of ~~our~~the ~~business~~Liquidating Trust is other than as described herein.

~~There~~The state isand nolocal ~~separate~~tax consequences of the transfer of assets to the Liquidating Trust may be different from the federal income tax ~~counsel~~consequences ~~for~~of ussuch ~~and~~transfer. In ~~our~~addition, ~~affiliates~~any items of income, ~~which~~gain, ~~could~~loss, ~~result~~deduction inor ~~conflicts~~credit of ~~interest.~~the Liquidating Trust, and any distribution made by the Liquidating Trust, may be treated differently for state and local tax purposes than for federal income tax purposes.

~~DLA Piper LLP (US)~~The ~~acts~~Internal asRevenue ~~legal~~Service ~~counsel~~may tochallenge ~~us, and is also expected to represent~~ our ~~Managing~~characterization ~~Trustee and some~~ of ~~its~~material ~~affiliates~~tax ~~from~~aspects ~~time to time. There is a possibility in the future that the interests~~ of ~~the~~an ~~various~~investment parties may become adverse and, under the Code of Professional Responsibility of the legal profession, DLA Piper LLP (US) may be precluded from representing any one or all of such parties. If any situation arises in ~~which~~ our ~~interests~~units ~~appear to be in conflict with those~~ of ~~our Managing Trustee or its affiliates,~~beneficial additional counsel may be retained by one or more of the parties to assure that their interests are adequately protected. Moreover, should such a conflict not be readily apparent, or otherwise not recognized, DLA Piper LLP (US) may inadvertently act in derogation of the interest ~~of the parties which could affect us and, therefore, our limited partners’ ability to meet our investment objectives~~.

~~Federal~~An investment ~~Income~~in ~~Tax~~units ~~Risks~~involves material income tax risks. Beneficiaries are urged to consult with their own tax advisor with respect to the federal, state and foreign tax considerations of an investment in our units. We will not seek any rulings from the Internal Revenue Service regarding any of the tax issues discussed herein. Further, although we have obtained an opinion from our counsel regarding the material federal income tax issues relating to an investment in our units, investors should be aware that the opinion represents only our counsel’s best legal judgment, based upon representations and assumptions referred to therein and conditioned upon the existence of certain facts. Our counsel’s tax opinion has no binding effect on the Internal Revenue Service or any court. Accordingly, we cannot assure investors that the conclusions reached in the tax opinion, if contested, would be sustained by any court. In addition, our counsel is unable to form an opinion as to the probable outcome of the contest of certain material tax aspects, including whether we will be characterized as a “dealer” so that sales of our assets would give rise to ordinary income rather than capital gain, and whether we are required to qualify as a tax shelter under the Internal Revenue Code. Our counsel also gives no opinion as to the tax considerations to investors of tax issues that have an impact at the individual or beneficiary level. Accordingly, investors are urged to consult with and rely upon their own tax advisors with respect to tax issues that have an impact at the beneficiary or individual level.

~~There~~Investors may ~~can~~realize betaxable noincome ~~assurance that~~without ~~the~~cash ~~Liquidating~~distributions, ~~Trust~~and ~~will~~may behave ~~treated~~to asuse afunds ~~partnership~~from ~~for~~other ~~federal~~sources ~~income~~to pay their tax ~~purposes~~liabilities.

~~The Liquidating Trust~~Beneficiaries iswill ~~intending~~be required to bereport ~~treated~~their asallocable ashare ~~continuation~~ of ~~the~~our ~~Partnership~~taxable ~~and classified as a partnership for federal~~ income ~~tax~~on ~~purposes, and~~their ~~therefore~~personal income, ~~gains, losses, deductions and credits (if any) realized by the Liquidating Trust will be allocated among the beneficiaries for federal~~ tax ~~purposes~~return inregardless ~~the same manner as previously allocated by the Partnership. Further, with the transfer~~ of ~~all of the Partnership’s remaining assets to the Liquidating Trust and the assumption by the Liquidating~~whether ~~Trust~~they ofhave ~~all~~received ofany ~~the~~cash ~~Partnership’s~~distributions ~~remaining~~from ~~liabilities,~~us. itIt is ~~contemplated~~possible that ~~there~~units ~~will be no change to the adjusted basis~~ of ~~any~~beneficial ~~beneficiary’s~~ interest ~~in the Liquidating Trust and the beneficiaries~~ will ~~each~~be ~~have~~allocated ~~an adjusted basis with~~taxable ~~respect~~income ~~to such beneficiary’s beneficial interest~~ in ~~the~~excess ~~Liquidating Trust equal to the adjusted basis~~ of ~~such~~their ~~beneficiary’s limited~~cash ~~partnership interest in the Partnership immediately prior to the Effective Date~~distributions. On aWe ~~yearly~~cannot ~~basis,~~assure ~~the~~beneficiaries ~~Managing Trustee will cause the Liquidating Trust to continue to issue a schedule K-1 to each beneficiary. However, there can be no assurance~~ that ~~the~~cash ~~Liquidating~~flow ~~Trust~~ will be ~~treated~~available ~~as a partnership~~ for ~~federal~~distribution in ~~income~~any ~~tax purposes~~year. We ~~will advise~~As ~~you~~a ifresult, webeneficiaries ~~learn~~may ~~that~~have ~~the~~to ~~tax~~use ~~treatment~~funds offrom ~~the~~other ~~Liquidating~~sources ~~Trust~~to ispay ~~other~~their ~~than~~tax ~~as described herein~~liability.

2120

~~The state and local~~We ~~tax~~could ~~consequences of the transfer of assets to the Liquidating Trust may~~ be ~~different~~characterized ~~from~~as ~~the~~a ~~federal~~publicly ~~income~~traded ~~tax consequences of such transfer. In addition~~partnership, ~~any~~which ~~items~~would ofhave ~~income,~~an ~~gain,~~adverse ~~loss, deduction or credit of the Liquidating Trust, and any distribution made by the Liquidating Trust, may be treated differently for state and local~~ tax ~~purposes~~effect ~~than~~on ~~for federal income tax purposes~~investors.

~~The~~If the Internal Revenue Service ~~may~~were ~~challenge~~to ~~our~~classify ~~characterization~~us ofas ~~material~~a ~~tax~~publicly ~~aspects~~traded partnership, we could be taxable as a corporation, and distributions made to beneficiaries could be treated as portfolio income rather than passive income. Our counsel has given its opinion that we will not be classified as a publicly traded partnership, which is defined generally as a partnership whose interests are publicly traded or frequently transferred. However, this opinion is based only upon certain representations of anour ~~investment~~former General Partners and the provisions in our ~~units~~Liquidating ofTrust ~~beneficial~~Agreement ~~interest~~that attempt to comply with certain safe harbor standards adopted by the Internal Revenue Service. We cannot assure beneficiaries that the Internal Revenue Service will not challenge this conclusion or that we will not, at some time in the future, be treated as a publicly traded partnership due to the following factors:

An· ~~investment in units involves material income tax risks. Beneficiaries are urged to consult with their own tax advisor with respect to~~ the ~~federal, state~~complex ~~and~~nature ~~foreign tax considerations~~ of ~~an investment in our units. We will not seek any rulings from~~ the Internal Revenue Service ~~regarding~~ ~~any~~safe of the tax issues discussed herein. Further, although we have obtained an opinion from our counsel regarding the material federal income tax issues relating to an investment in our units, investors should be aware that the opinion represents only our counsel’s best legal judgment, based upon representations and assumptions referred to therein and conditioned upon the existence of certain facts. Our counsel’s tax opinion has no binding effect on the Internal Revenue Service or any court. Accordingly, we cannot assure investors that the conclusions reached in the tax opinion, if contested, would be sustained by any court. In addition, our counsel is unable to form an opinion as to the probable outcome of the contest of certain material tax aspects, including whether we will be characterized as a “dealer” so that sales of our assets would give rise to ordinary income rather than capital gain, and whether we are required to qualify as a tax shelter under the Internal Revenue Code. Our counsel also gives no opinion as to the tax considerations to investors of tax issues that have an impact at the individual or beneficiary level. Accordingly, investors are urged to consult with and rely upon their own tax advisors with respect to tax issues that have an impact at the beneficiary or individual level.harbors;

~~Investors~~· ~~may~~the ~~realize taxable~~lack ~~income~~of ~~without~~interpretive ~~cash~~guidance ~~distributions,~~with ~~and~~respect ~~may have~~ to ~~use~~such ~~funds~~provisions; ~~from other sources to pay their tax liabilities.~~ and

~~Beneficiaries~~· ~~will be~~the ~~required~~fact tothat ~~report their allocable share of our taxable income on their personal income tax return regardless of whether they have received~~ any ~~cash~~determination ~~distributions~~in ~~from~~this ~~us.~~regard ~~It is possible that units of beneficial interest~~ will necessarily be ~~allocated~~based ~~taxable~~upon ~~income in~~facts ~~excess of their cash distributions. We cannot assure investors~~ that ~~cash flow will be available for distribution in any year. As a result, investors may~~ have tonot ~~use~~yet ~~funds from other sources to pay their tax liability~~occurred.

WeThe deductibility ~~could~~of losses will be ~~characterized as~~subject ato ~~publicly~~passive ~~traded~~loss ~~partnership~~limitations, ~~which~~and ~~would~~therefore ~~have~~their andeductibility ~~adverse~~will ~~tax~~be ~~effect on investors~~limited.

IfUnits of ~~the~~beneficial ~~Internal~~interest ~~Revenue Service~~will ~~were~~be toallocated ~~classify~~their uspro asrata ashare ~~publicly~~of ~~traded~~our ~~partnership,~~tax welosses. ~~could~~Section be469 ~~taxable~~of asthe aInternal ~~corporation,~~Revenue ~~and~~Code ~~distributions~~limits the ~~made~~allowance of deductions for losses attributable to ~~investors~~ ~~could~~passive beactivities, ~~treated~~which are defined generally as ~~portfolio~~activities ~~income~~in ~~rather~~which the ~~than~~taxpayer ~~passive~~does ~~income.~~not ~~Our~~materially ~~counsel~~participate. ~~has~~Any ~~given~~tax ~~its~~losses ~~opinion~~allocated ~~that~~to weinvestors will ~~not~~ be ~~classified~~characterized as apassive ~~publicly~~losses, ~~traded partnership~~and accordingly, ~~which~~the isdeductibility ~~defined~~of ~~generally~~such aslosses awill ~~partnership~~be ~~whose~~subject ~~interests~~to ~~are~~these ~~publicly traded or frequently transferred~~limitations. ~~However,~~Losses ~~this~~from ~~opinion~~passive isactivities ~~based~~are generally deductible only ~~upon~~to ~~certain~~the ~~representations~~extent of ~~our~~a ~~former~~taxpayer’s ~~General~~income ~~Partners~~or gains from passive activities and ~~the~~ ~~provisions~~will innot ~~our~~be ~~Liquidating~~allowed ~~Trust~~as ~~Agreement~~an ~~that~~offset against ~~attempt~~other toincome, ~~comply~~including ~~with~~salary ~~certain~~or ~~safe~~other ~~harbor~~compensation ~~standards~~for ~~adopted~~personal byservices, ~~the~~active ~~Internal~~business income or “portfolio ~~Revenue~~income,” ~~Service.~~which Weincludes ~~cannot~~non-business ~~assure~~income ~~investors~~derived ~~that~~from ~~the~~dividends, ~~Internal~~interest, ~~Revenue~~royalties, ~~Service~~annuities ~~will~~and ~~not~~gains ~~challenge~~from ~~this~~the ~~conclusion~~sale of orproperty ~~that~~held wefor ~~will not~~investment. Accordingly, atbeneficiaries ~~some~~may ~~time~~receive inno ~~the~~current ~~future,~~benefit befrom ~~treated~~their asshare aof ~~publicly~~tax ~~traded~~losses ~~partnership~~unless they ~~due~~are tocurrently ~~the~~being ~~following~~allocated ~~factors:~~passive income from other sources.

·The Internal ~~the~~Revenue ~~complex~~Service ~~nature~~may challenge our allocations of ~~the~~profit ~~Internal~~and ~~Revenue~~loss, ~~Service~~and ~~safe~~any ~~harbors;~~reallocation of items of income, gain, deduction and credit could reduce anticipated tax benefits.

·Counsel has given its opinion that it is more likely than not that partnership items of income, gain, loss, deduction and credit will be allocated among our beneficiaries substantially in accordance with the ~~lack~~allocation provisions of ~~interpretive~~the ~~guidance~~Liquidating Trust Agreement. We cannot assure investors, however, that the Internal Revenue Service will not successfully challenge the allocations in the Liquidating Trust Agreement and reallocate items of income, gain, loss, deduction and credit in a manner that reduces anticipated tax benefits. The tax rules applicable to allocation of items of taxable income and loss are complex. The ultimate determination of whether allocations adopted by us will be respected by the Internal Revenue Service will depend upon facts which will occur in the future and which cannot be predicted with certainty or completely controlled by us. If the allocations we use are not recognized, beneficiaries could be required to report greater taxable income or less taxable loss with respect to ~~such~~an ~~provisions;~~investment in us and, as a result, pay more tax and associated interest and penalties. Our beneficiaries might also be required to incur the costs of amending their individual returns.

·We may ~~the~~be ~~fact~~characterized ~~that~~as a dealer, and if so, any ~~determination~~gain inrecognized ~~this~~upon ~~regard~~a ~~will~~sale ~~necessarily~~of bereal ~~based~~property ~~upon~~would ~~facts~~be ~~that~~taxable ~~have~~to ~~not~~investors ~~yet~~as ordinary ~~occurred~~income.

~~The~~If we ~~deductibility~~are deemed for tax purposes to be a dealer, defined as one who holds property primarily for sale to customers in the ordinary course of business, with respect to one or more of our properties, any gain recognized upon a sale of such real property will ~~losses~~be taxable to investors as ordinary income and will also constitute unrelated business taxable income (“UBTI”) to investors who are tax-exempt entities. The resolution of our status in this regard is dependent upon facts that will not be ~~subject~~known until the time a property is sold or held for sale. Under existing law, whether property is held primarily for sale to ~~passive~~customers in ~~loss~~the ~~limitations~~ordinary course of business must be determined from all the facts and circumstances surrounding the particular property at the time of disposition. These include the number, frequency, regularity and ~~therefore~~nature ~~their~~of ~~deductibility~~dispositions of real estate by the holder and activities of the holder of the property in selling the property or preparing the property for sale. Accordingly, our counsel is unable to render an opinion as to whether we will be ~~limited.~~considered to hold any or all of our properties primarily for sale to customers in the ordinary course of business.

Units of beneficial interest will be allocated their pro rata share of our tax losses. Section 469 of the Internal Revenue Code limits the allowance of deductions for losses attributable to passive activities, which are defined generally as activities in which the taxpayer does not materially participate. Any tax losses allocated to investors will be characterized as passive losses, and accordingly, the deductibility of such losses will be subject to these limitations. Losses from passive activities are generally deductible only to the extent of a taxpayer’s income or gains from passive activities and will not be allowed as an offset against other income, including salary or other compensation for personal services, active business income or “portfolio income,” which includes non-business income derived from dividends, interest, royalties, annuities and gains from the sale of property held for investment. Accordingly, investors may receive no current benefit from their share of tax losses unless they are currently being allocated passive income from other sources.21

22We may be audited by the Internal Revenue Service, which could result in the imposition of additional tax, interest and penalties.

~~The~~Our federal income tax returns may be audited by the Internal Revenue Service. Any audit of us could result in an audit of beneficiaries’ tax return that may ~~challenge~~require ~~our~~adjustments ~~allocations~~of items unrelated to an investment in us, in addition to adjustments to various items. In the event of ~~profit~~any ~~and~~such ~~loss~~adjustments, beneficiaries might incur attorneys’ fees, court costs and other expenses contesting deficiencies asserted by the Internal Revenue Service. Beneficiaries may also be liable for interest on any ~~reallocation~~underpayment and penalties from the date their tax was originally due. The tax treatment of all items ofwill ~~income~~generally be determined at the Liquidating Trust level in a single proceeding rather than in separate proceedings with each partner, ~~gain~~and our Managing Trustee is primarily responsible for contesting federal income tax adjustments proposed by the Internal Revenue Service. In this connection, ~~deduction~~our Managing Trustee may extend the statute of limitations as to all beneficiaries and, ~~credit~~in certain circumstances, may bind the beneficiaries to a settlement with the Internal Revenue Service. Further, our Managing Trustee may cause us to elect to be treated as an electing large partnership. If they do, we could ~~reduce~~take ~~anticipated~~advantage ~~tax~~of ~~benefits~~simplified flow-through reporting of items. Adjustments to items would continue to be determined at the Liquidating Trust level, however, and any such adjustments would be accounted for in the year they take effect, rather than in the year to which such adjustments relate. Our Managing Trustee will have the discretion in such circumstances either to pass along any such adjustments to the beneficiaries or to bear such adjustments at the Liquidating Trust level.

~~Counsel has given~~State ~~its opinion that it is more likely than not that partnership items of income, gain, loss, deduction~~ and ~~credit~~local ~~will~~taxes be allocated among our beneficiaries substantially in accordance with the allocation provisions of the Liquidating Trust Agreement. We cannot assure investors, however, that the Internal Revenue Service will not successfully challenge the allocations in the Liquidating Trust Agreement and ~~reallocate items of income, gain, loss, deduction and credit in~~ a ~~manner~~requirement ~~that reduces anticipated tax benefits. The tax rules applicable~~ to ~~allocation~~withhold ofstate ~~items~~taxes ofmay ~~taxable~~apply, ~~income~~ and ~~loss~~if ~~are~~so, ~~complex.~~the ~~The~~amount ~~ultimate determination~~ of ~~whether allocations~~net ~~adopted~~cash byfrom usoperations ~~will be respected by the Internal Revenue Service will depend upon facts which will occur in the future~~payable ~~and which cannot be predicted with certainty or completely controlled by us. If the allocations we use are not recognized, beneficiaries could be required~~ to ~~report~~investors ~~greater~~would ~~taxable income or less taxable loss with respect to an investment in us and, as a result, pay more tax and associated interest and penalties. Our beneficiaries might also~~ be ~~required to incur the costs of amending their individual returns~~reduced.

WeThe state in which a beneficiary resides may beimpose ~~characterized~~an income tax upon such beneficiary’s share of our taxable income. Further, states in which we will own our properties may impose income taxes upon its share of our taxable income allocable to any property located in that state. Many states have also implemented or are implementing programs to require entities classified as apartnerships to ~~dealer~~withhold and pay state income taxes owed by non-resident partners relating to income-producing properties located in their states, and ifwe somay be required to withhold state taxes from cash distributions otherwise payable. Beneficiaries may also be required to file income tax returns in some states and report their share of income attributable to ownership and operation by the Liquidating Trust of properties in those states. Moreover, ~~any~~despite ~~gain~~our ~~recognized~~pass-through treatment for U.S. federal income tax purposes, certain states may impose income or franchise taxes upon our income and not treat us as a ~~sale~~pass-through entity. The imposition of ~~real~~such taxes ~~property~~will reduce the amounts distributable to our beneficiaries. In the event we are required to withhold state taxes from cash distributions, the amount of the net cash from operations otherwise payable would be ~~taxable~~reduced. toIn ~~investors~~addition, assuch ~~ordinary~~collection ~~income~~and filing requirements at the state level may result in increases in our administrative expenses that would have the effect of reducing cash available for distribution. Beneficiaries are urged to consult with their own tax advisors with respect to the impact of applicable state and local taxes and state tax withholding requirements on an investment in our units.

~~If we are deemed for~~Legislative ~~tax purposes to be a dealer, defined as one who holds property primarily for sale to customers in the ordinary course of business, with respect to one~~ or ~~more~~regulatory ofaction ~~our~~could ~~properties,~~adversely ~~any~~affect ~~gain recognized upon a sale of such real property will be taxable to~~ investors ~~as ordinary income and will also constitute UBTI to investors who are tax-exempt entities~~. The resolution of our status in this regard is dependent upon facts that will not be known until the time a property is sold or held for sale. Under existing law, whether property is held primarily for sale to customers in the ordinary course of business must be determined from all the facts and circumstances surrounding the particular property at the time of disposition. These include the number, frequency, regularity and nature of dispositions of real estate by the holder and activities of the holder of the property in selling the property or preparing the property for sale. Accordingly, our counsel is unable to render an opinion as to whether we will be considered to hold any or all of our properties primarily for sale to customers in the ordinary course of business.

WeIn ~~may~~recent beyears, numerous ~~audited~~legislative, byjudicial and administrative changes have been made in the provisions of the federal income tax laws applicable to investments similar to an investment in our units. Additional changes to the ~~Internal~~tax ~~Revenue~~laws ~~Service~~are likely to continue to occur, ~~which~~and we cannot assure investors that any such changes will not adversely affect the taxation of a beneficiary. Any such changes could have ~~result~~an adverse effect on an investment in our units or on the ~~imposition~~market value or the resale potential of ~~additional~~our properties. Investors are urged to consult with their own tax advisor with respect to the impact of recent legislation on their investment in units and the status of legislative, ~~interest~~regulatory or administrative developments and ~~penalties~~proposals and their potential effect on an investment in our units. Investors should also note that our counsel’s tax opinion assumed that no legislation that will be applicable to an investment in our units would be enacted after the commencement of the Offering on February 19, 2003.

~~Our~~ Congress ~~federal~~has ~~income tax~~passed ~~returns~~major ~~may be audited by the Internal Revenue Service. Any audit of us could result in an audit of an investor’s tax~~federal ~~return~~tax ~~that~~legislation ~~may~~regarding ~~require~~taxes ~~adjustments~~applicable ~~of items unrelated~~ to anrecipients ~~investment in us, in addition to adjustments to various items. In the event~~ of ~~any~~qualified ~~such adjustments, an investor might incur attorneys’ fees, court costs and other expenses contesting deficiencies asserted by the Internal Revenue Service~~dividends. ~~Investors~~Effective ~~may also be liable~~ for ~~interest~~2013 ~~on any underpayment and penalties from~~ the ~~date~~ ~~their~~highest ~~tax~~marginal ~~was originally due. The~~ tax ~~treatment of all items will generally be determined at the Liquidating Trust level~~rate infor aindividuals ~~single~~was ~~proceeding~~increased ~~rather~~to ~~than in separate proceedings with each investor~~39.6%, and ~~our Managing Trustee is primarily responsible~~ for ~~contesting~~individuals ~~federal~~in ~~income~~this tax ~~adjustments~~bracket ~~proposed by~~ the ~~Internal~~rate ~~Revenue~~on ~~Service.~~qualified Individends ~~this~~was ~~connection, our Managing Trustee~~increased ~~may~~to ~~extend~~20%. ~~the~~The ~~statute~~tax ofchanges ~~limitations~~did ~~as to all investors and~~not, ~~in certain circumstances~~however, ~~may~~reduce ~~bind~~ the ~~investors~~corporate totax ~~a settlement with the Internal Revenue Service~~rates. ~~Further~~Therefore, ~~our~~the ~~Managing~~maximum ~~Trustee~~corporate ~~may~~tax ~~cause~~rate usof to35% ~~elect~~has not tobeen ~~be treated as an electing large partnership~~affected. If ~~they~~Even ~~do,~~with wethe ~~could~~rate ~~take advantage~~ of ~~simplified~~15% ~~flow-through~~on ~~reporting~~qualified ofdividends ~~items.~~received ~~Adjustments~~by tosome ~~items~~individuals, ~~would~~the ~~continue~~combined tomaximum ~~be determined~~corporate atfederal ~~the~~tax ~~Liquidating~~rate ~~Trust level, however,~~ and ~~any~~individual ~~such~~tax ~~adjustments~~rate ~~would~~on bequalified ~~accounted~~corporate ~~for~~dividends inis ~~the~~44.75% ~~year they take effect~~and, ~~rather than~~with in the ~~year~~effect toof ~~which~~state ~~such~~income ~~adjustments relate. Our Managing Trustee will have the discretion in such circumstances either~~taxes, tocan ~~pass~~exceed ~~along any such adjustments to the beneficiaries or to bear such adjustments at the Liquidating Trust level~~50%.

~~State~~Although ~~and~~entities classified ~~local~~as ~~taxes~~partnerships for federal income tax purposes continue to receive substantially better tax treatment than entities ~~and~~taxed as corporations, it is possible that future legislation would make a ~~requirement~~partnership structure a less advantageous organizational form for investment in real estate, or that it could become more advantageous for us to ~~withhold~~elect ~~state~~to ~~taxes~~be ~~may~~taxed ~~apply~~for federal income tax purposes as a corporation or a real estate investment trust (“REIT”). Pursuant to our Liquidating Trust Agreement, our ~~and~~Managing ifTrustee sohas the authority to make any tax elections on our behalf that, in its sole judgment, are in our best interest. This authority includes the ~~amount~~ability to elect to cause us to be taxed as a corporation or to qualify as a REIT for federal income tax purposes. Our Managing Trustee has the authority under our Liquidating Trust Agreement to make those elections without the necessity of ~~net~~obtaining ~~cash~~the ~~from~~approval of our beneficiaries. In addition, our Managing Trustee has the authority to amend our Liquidating Trust Agreement without the consent of beneficiaries in order to facilitate our operations ~~payable~~so as to be able to qualify us as a REIT, corporation or other tax status that it elects for us. Our Managing Trustee has fiduciary duties to us and to all investors and would only cause such changes in our organizational structure or tax treatment if it determines in good faith that such changes beare ~~reduced.~~in the best interest of our investors.

~~The state in which~~There anare ~~investor~~special ~~resides~~considerations ~~may~~that ~~impose~~apply ~~an income tax upon its share of our taxable income. Further, states in which we will own our properties may impose income taxes upon its share of our taxable income allocable~~ to ~~any~~pension ~~property located in that state. Many states have also implemented~~ or ~~are~~profit ~~implementing~~sharing ~~programs~~trusts to require entities classified as partnerships to withhold and pay state income taxes owed by non-resident partners relating to income-producing properties located in their states, and we may be required to withhold state taxes from cash distributions otherwise payable. Investors may also be required to file income tax returns in some states and report their share of income attributable to ownership and operation by the Liquidating Trust of properties in those states. Moreover, despite our pass-through treatment for U.S. federal income tax purposes, certain states may impose income or ~~franchise~~ ~~taxes~~IRAs ~~upon~~investing our income and not treat us as a pass-through entity. The imposition of such taxes will reduce the amounts distributable to our beneficiaries. In the event we are required to withhold state taxes from cash distributions, the amount of the net cash from operations otherwise payable would be reduced. In addition, such collection and filing requirements at the state level may result in ~~increases in~~ our administrative expenses that would have the effect of reducing cash available for distribution. Investors are urged to consult with their own tax advisors with respect to the impact of applicable state and local taxes and state tax withholding requirements on an investment in our units.

23If investors are investing the assets of a pension, profit sharing, 401(k), Keogh or other qualified retirement plan or the assets of an IRA in our units of beneficial interest, they should be satisfied that, among other things:

~~Legislative or regulatory action could adversely affect investors.~~ 22

In· ~~recent~~their ~~years, numerous legislative, judicial and administrative changes have been made in the provisions of the federal income tax laws applicable to investments similar to an~~ investment inis ~~our~~consistent units. Additional changes to the tax laws are likely to continue to occur, and we cannot assure investors that any such changes will not adversely affect the taxation of a beneficiary. Any such changes could have an adverse effect on an investment in our units or on the market value or the resale potential of our properties. Investors are urged to consult with their ~~own~~fiduciary ~~tax~~obligations ~~advisor~~under ~~with respect to~~ the ~~impact~~Employee ofRetirement ~~recent~~Income ~~legislation~~Security onAct ~~their~~(“ERISA”) ~~investment in units~~ and the ~~status~~Internal ofRevenue legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our units. Investors should also note that our counsel’s tax opinion assumed that no legislation that will be applicable to an investment in our units would be enacted after the commencement of the Offering on February 19, 2003.Code;

~~Congress previously~~· ~~passed~~their ~~major~~investment ~~federal~~is ~~tax~~made ~~legislation~~in ~~regarding~~accordance taxes applicable to recipients of dividends. One of the changes reduced the tax rate to certain recipients of dividends paid by corporations to individuals to a maximum of 15% through 2012. The tax changes did not, however, reduce the corporate tax rates. Therefore, the maximum corporate tax rate of 35% was not affected. Even with ~~the~~ ~~reduction of~~ the ~~rate~~documents ~~on dividends received by the individuals, the combined maximum corporate federal tax rate~~ and ~~individual~~ ~~tax~~instruments ~~rate~~governing ontheir ~~qualified~~plan ~~corporate~~or ~~dividends was 44.75% and~~IRA, ~~with~~including ~~the~~their ~~effect~~plan’s ofinvestment ~~state income taxes, could exceed 50%.~~policy;

~~Under~~· ~~recently~~their enacted legislation, for taxable years beginning after December 31, 2012, capital gains will be taxed at a maximum rate of 20% and dividend income will be taxed at ordinary income rates. Additionally, a U.S. person that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, generally will be subject to a 3.8% tax (the "Medicare tax") on the lesser of (1) the U.S. person's "net investment ~~income"~~satisfies ~~for~~ the ~~relevant~~prudence ~~taxable year~~ and ~~(2)~~diversification ~~the~~requirements ~~excess~~ of the U.S. person's modified adjusted gross income for the taxable year over a certain threshold. A U.S. person's net investment income for these purposes will generally include income and gain allocable to such U.S. person and/or any gain realized with respect to a disposition of our units of beneficial interest. If you are a U.S. person that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the Medicare tax to your investment in the ordinary shares.ERISA;

~~Although~~· ~~entities~~their classified as partnerships for federal income tax purposes continue to receive substantially better tax treatment than entities taxed as corporations, it is possible that future legislation would make a partnership structure a less advantageous organizational form for investment in ~~real~~will ~~estate,~~not orimpair ~~that it could become more advantageous for us to elect to be taxed for federal income tax purposes as a corporation or a REIT. Pursuant to our Liquidating Trust Agreement, our Managing Trustee has~~ the ~~authority~~liquidity to make any tax elections on our behalf that, in its sole judgment, are in our best interest. This authority includes the ability to elect to cause us to be taxed as a corporation or to qualify as a REIT for federal income tax purposes. Our Managing Trustee has the authority under our Liquidating Trust Agreement to make those elections without the necessity of ~~obtaining~~ the ~~approval~~plan of our beneficiaries. In addition, our Managing Trustee has the authority to amend our Liquidating Trust Agreement without the consent of beneficiaries in order to facilitate our operations so as to be able to qualify us as a REIT, corporation or other tax status that it elects for us. Our Managing Trustee has fiduciary duties to us and to all investors and would only cause such changes in our organizational structure or tax treatment if it determines in good faith that such changes are in the best interest of our investors.IRA;

~~There~~· ~~are~~they ~~special~~will ~~considerations that~~be ~~apply~~able to ~~pension~~value orthe ~~profit~~assets ~~sharing~~of ~~trusts~~the orplan ~~IRAs~~annually ~~investing~~ in ~~our~~accordance ~~units.~~with ERISA requirements;

If· ~~investors~~their ~~are~~investment ~~investing the~~will ~~assets~~not ofconstitute a ~~pension,~~prohibited ~~profit~~transaction ~~sharing,~~under ~~401(k),~~Section ~~Keogh~~406 orof ~~other~~ERISA ~~qualified retirement plan~~ or ~~the~~Section ~~assets~~4975 of anthe ~~IRA~~Internal inRevenue ~~our~~Code; ~~units of beneficial interest, they should be satisfied that, among other things:~~and

· their investment iswill ~~consistent~~likely ~~with~~produce ~~their~~UBTI ~~fiduciary~~for ~~obligations~~the ~~under~~plan ~~ERISA~~or IRA and, ~~the~~therefore, ~~Internal~~is ~~Revenue~~not ~~Code;~~likely to be an appropriate investment for an IRA. (Due to our intended method of operation, it is likely that we will generate UBTI.)

·We may ~~their~~dissolve ~~investment~~the isLiquidating ~~made~~Trust inif ~~accordance~~our ~~with~~assets ~~the~~are ~~documents~~deemed ~~and~~to ~~instruments~~be ~~governing their~~ “plan assets” or ~~IRA,~~if ~~including~~we ~~their~~engage ~~plan’s~~in ~~investment~~prohibited ~~policy;~~transactions.

·If our ~~their~~assets ~~investment~~were ~~satisfies~~deemed ~~the~~to ~~prudence~~be assets of any qualified plans that is one of our investors, known as “plan assets,” our Managing Trustee would be considered to be a plan fiduciary and ~~diversification~~certain ~~requirements~~contemplated transactions between our Managing Trustee or its affiliates and us may be deemed to be prohibited transactions subject to excise taxation under Section 4975 of the Internal Revenue Code. Additionally, if our assets were deemed to be plan assets, ERISA;’s fiduciary standards would extend to the Managing Trustee as a plan fiduciary with respect to our investments. We have not requested an opinion of our counsel regarding whether or not our assets would constitute plan assets under ERISA, nor have we sought any rulings from the U.S. Department of Labor (“Department of Labor”) regarding classification of our assets.

·Department of ~~their~~Labor regulations defining plan assets for purposes of ERISA contain exemptions that, if satisfied, would preclude assets of an entity such as ours from being treated as plan assets. We cannot assure investors that our Liquidating Trust Agreement and the Offering have been structured so that the exemptions in such regulations would apply to us, and although our Managing Trustee intends that an investment by a qualified plan in units will not ~~impair~~be deemed an investment in our assets, we can make no representations or warranties of any kind regarding the ~~liquidity~~consequences of an investment in our units by qualified plans in this regard. Plan fiduciaries are urged to consult with and rely upon their own advisors with respect to this and other ERISA issues which, if decided adversely to us, could result in prohibited transactions, which would cause the ~~plan~~imposition of excise taxation and the imposition of co-fiduciary liability under Section 405 of ERISA in the event actions undertaken by us are deemed to be non-prudent investments or ~~IRA;~~prohibited transactions.

·In the ~~they~~event ~~will~~our beassets ~~able~~are deemed to ~~value~~constitute ~~the~~plan assets, ofor ~~the~~if ~~plan~~certain ~~annually~~transactions inundertaken ~~accordance~~by ~~with~~us are deemed to constitute prohibited transactions under ERISA ~~requirements;~~or the Internal Revenue Code and no exemption for such transactions applies or is obtainable by us, our Managing Trustee has the right, but not the obligation, upon notice to all beneficiaries, but without the consent of any beneficiary to:

· ~~their~~compel ~~investment will not constitute~~ a ~~prohibited~~termination ~~transaction~~and ~~under~~dissolution ~~Section 406~~ of ~~ERISA or Section 4975 of~~ the ~~Internal~~Liquidating ~~Revenue Code~~Trust; or

· ~~their~~restructure ~~investment~~our ~~will~~activities ~~likely~~to ~~produce~~the ~~UBTI~~extent ~~for~~necessary to comply with any exemption in the ~~plan~~Department orof ~~IRA~~Labor ~~and,~~regulations ~~therefore,~~or isany ~~not~~prohibited ~~likely~~transaction toexemption begranted anby ~~appropriate~~the ~~investment~~Department ~~for~~of anLabor ~~IRA.~~or ~~(Due~~any tocondition ~~our~~that ~~intended~~the ~~method~~Department of ~~operation,~~Labor itmight isimpose ~~likely~~as ~~that~~a wecondition ~~will~~to ~~generate~~granting ~~UBTI~~a prohibited transaction exemption.)

~~We may dissolve the Liquidating~~Adverse ~~Trust~~tax ifconsiderations ~~our~~may ~~assets~~result ~~are~~because ~~deemed~~of tominimum bedistribution ~~“plan assets” or if we engage in prohibited transactions~~requirements.

If an ~~our~~investor ~~assets~~purchased ~~were deemed~~units tothrough bean ~~assets~~IRA, or if an investor is a trustee of ~~qualified~~an ~~plans~~IRA ~~investing~~or asother ~~limited~~fiduciary ~~partners,~~of ~~known~~a asretirement “plan ~~assets~~that invested in units,” the investor must consider the limited liquidity of an investment in our ~~Managing~~units ~~Trustee would~~as beit ~~considered~~relates to beapplicable minimum adistribution ~~plan~~requirements ~~fiduciary~~under ~~and~~the ~~certain~~Internal ~~contemplated~~Revenue ~~transactions~~Code. ~~between~~If units are held and our ~~Managing~~properties ~~Trustee~~have ornot ~~its~~yet ~~affiliates~~been sold ~~and~~at ussuch ~~may~~time beas ~~deemed~~mandatory todistributions beare ~~prohibited~~required ~~transactions~~to ~~subject~~begin to ~~excise~~an ~~taxation~~IRA ~~under~~beneficiary ~~Section~~or ~~4975~~qualified plan participant, Sections 408(a)(6) and 401(a)(9) of the Internal Revenue Code~~. Additionally,~~ ifwill ~~our~~likely ~~assets~~require ~~were~~that ~~deemed~~a todistribution-in-kind of the units be made to the IRA beneficiary or qualified plan ~~assets,~~participant. ~~ERISA’s~~Any ~~fiduciary~~such ~~standards~~distribution-in-kind ~~would~~of ~~extend~~units tomust be included in the ~~Managing~~taxable ~~Trustee~~income of the IRA beneficiary asor aqualified plan ~~fiduciary~~participant for the year in which the units are received at the fair market value of the units without any corresponding cash distributions with ~~respect~~which to ~~our~~pay ~~investments.~~the Weincome ~~have~~tax ~~not~~liability ~~requested~~attributable anto ~~opinion~~any ofsuch ~~our~~distribution. ~~counsel~~Also, ~~regarding~~fiduciaries ~~whether~~of ora ~~not~~retirement ~~our~~plan ~~assets~~should ~~would~~consider ~~constitute~~that, ~~plan~~for ~~assets~~distributions subject to mandatory income tax withholding under ~~ERISA~~Section 3405 of the Internal Revenue Code, ~~nor~~the fiduciary may have wean ~~sought~~obligation, ~~any~~even ~~rulings~~in ~~from~~situations ~~the~~involving ~~U.S.~~in-kind ~~Department~~distributions of ~~Labor~~units, ~~(“Department~~to liquidate a portion of ~~Labor”)~~the ~~regarding~~in-kind ~~classification~~units ofdistributed ~~our~~in ~~assets~~order to satisfy such withholding obligations. There may also be similar state and/or local tax withholding or other obligations that should be considered.

2423

~~Department of Labor~~UBTI ~~regulations~~is ~~defining~~likely plan assets for purposes of ERISA contain exemptions that, if satisfied, would preclude assets of an entity as ours from being treated as plan assets. We cannot assure investors that our Liquidating Trust Agreement and the Offering have been structured so that the exemptions in such regulations would apply to ~~us, and although our Managing Trustee intends that an investment by a qualified plan in units will not~~ be ~~deemed~~generated an investment in our assets, we can make no representations or warranties of any kind regarding the consequences of an investment in our units by qualified plans in this regard. Plan fiduciaries are urged to consult with ~~and rely upon their own advisors with~~ respect to ~~this and other ERISA issues which, if decided adversely to us, could result in prohibited transactions, which would cause the imposition of excise taxation and the imposition of co~~tax-~~fiduciary liability~~exempt ~~under Section 405 of ERISA in the event actions undertaken by us are deemed to be non-prudent investments or prohibited transactions~~investors.

InWe intend ~~the~~to ~~event~~incur indebtedness. This will cause a portion of our ~~assets are~~income ~~deemed~~allocable to ~~constitute~~tax-exempt ~~plan~~investors ~~assets,~~to orbe ifrecharacterized as ~~certain~~UBTI. ~~transactions~~Further, ~~undertaken~~in bythe usevent we are deemed to ~~constitute~~be ~~prohibited~~a ~~transactions under~~“dealer” ~~ERISA~~in orreal ~~the~~property, ~~Internal~~defined ~~Revenue~~as ~~Code~~one ~~and~~who noholds ~~exemption~~real estate primarily for ~~such~~sale ~~transactions~~to ~~applies~~customers orin isthe ~~obtainable~~ordinary bycourse usof business, the gain realized on the sale of our ~~Managing~~properties ~~Trustee~~that is allocable ~~has~~to ~~the~~tax-exempt ~~right,~~investors ~~but~~would ~~not~~be ~~the~~characterized ~~obligation~~as UBTI. If we generate UBTI, ~~upon~~a ~~notice~~trustee of a charitable remainder trust that has invested in us will lose its exemption from income taxation with respect to all ~~beneficiaries,~~of ~~but~~its ~~without~~income for the ~~consent~~tax ofyear ~~any~~in question. A tax-exempt beneficiary other than a charitable remainder trust that has UBTI in any tax year from all sources of more than $1,000 will be subject to: taxation on such income and be required to file tax returns reporting such income.

·Item ~~compel~~1B. Unresolved Staff ~~a termination and dissolution of the Liquidating Trust; or~~Comments.

· restructure our activities to the extent necessary to comply with any exemption in the Department of Labor regulations or any prohibited transaction exemption granted by the Department of Labor or any condition that the Department of Labor might impose as a condition to granting a prohibited transaction exemptionNone.

~~Adverse~~Item ~~tax considerations may result because of minimum distribution requirements~~2. Properties.

~~If an investor purchased~~As ~~units~~of ~~through~~December ~~an IRA~~31, ~~or if an investor is a trustee of an IRA or other fiduciary of a retirement plan that invested in units~~2013, ~~the~~ ~~investor must consider~~ the ~~limited~~Liquidating ~~liquidity~~Trust ofowned an ~~investment~~interest in ~~our~~(i) ~~units~~Hotel asPalomar, ita ~~relates~~hotel towith ~~applicable~~adjoining ~~minimum~~retail ~~distribution requirements~~space ~~under the Internal Revenue Code. If units are held~~ and ~~our properties have not yet been sold at such time as mandatory distributions are required to begin to an IRA beneficiary or qualified plan participant, Sections 408~~(aii)~~(6) and 401(a)(9) of the~~ ~~Internal~~approximately ~~Revenue~~five ~~Code~~acres ~~will likely require that a distribution-in-kind~~ of ~~the~~land units be made to the IRA beneficiary or qualified plan participant. Any such distribution-in-kind of units must be included in the taxable income of the IRA beneficiary or qualified plan participant for the year in which the units are received at ~~the~~1221 Coit ~~fair market value of the units without any corresponding cash distributions with which to pay the income tax liability attributable to any such distribution~~Road. ~~Also,~~The ~~fiduciaries~~following oftable apresents ~~retirement plan~~certain ~~should~~additional ~~consider~~information ~~that,~~about ~~for distributions subject to mandatory income tax withholding under Section 3405 of~~ the ~~Internal Revenue~~ ~~Code,~~properties ~~the~~as ~~fiduciary may have an obligation, even in situations involving in-kind distributions~~ of ~~units~~December 31, to liquidate a portion of the in-kind units distributed in order to satisfy such withholding obligations. There may also be similar state and/or local tax withholding or other obligations that should be considered. 2013:

UBTI is likely to be generated with respect to tax-exempt investors.

Date

Ownership

Property name

Location

Acquired

Rooms/acres

Description

Interest

Hotel Palomar

Dallas, Texas

11/08/04

198 rooms

hotel

1221 Coit Road- Land

Dallas, Texas

10/04/04

5 acres

developed land

We intend to incur indebtedness. This will cause a portion of our income allocable to tax-exempt investors to be recharacterized as UBTI. Further, in the event we are deemed to be a “dealer” in real property, defined as one who holds real estate primarily for sale to customers in the ordinary course of business, the gain realized on the sale of our properties that is allocable to tax-exempt investors would be characterized as UBTI. If we generate UBTI, a trustee of a charitable remainder trust that has invested in us will lose its exemption from income taxation with respect to all of its income for the tax year in question. A tax-exempt beneficiary other than a charitable remainder trust that has UBTI in any tax year from all sources of more than $1,000 will be subject to taxation on such income and be required to file tax returns reporting such income. ____________

~~Item~~Each of ~~1B.~~the ~~Unresolved~~properties ~~Staff~~was ~~Comments~~transferred to us on the Effective Date. The following information generally applies to all of our properties:

~~None.~~· we believe all of our properties are adequately covered by insurance and suitable for their intended purposes;

~~Item~~· 2.we ~~Properties.~~have no plans for any material renovations, improvements or development of our properties, except in accordance with planned budgets;

As· ofour ~~December~~properties ~~31, 2012,~~are ~~the~~located ~~Partnership owned interests~~ in amarkets ~~hotel~~where ~~with~~we ~~adjoining~~are ~~retail~~subject ~~space~~to ~~and~~competition ~~approximately~~in ~~five~~attracting ~~acres~~new oftenants ~~land~~and atretaining ~~1221 Coit Road.~~current ~~The~~tenants; ~~following table presents certain additional information about the properties as of December 31, 2012:~~and

Date

Ownership

Property name

Location

Acquired

Rooms/acres

Description

Interest

Hotel Palomar

Dallas, Texas

11/08/04

198 rooms

hotel

1221 Coit Road- Land

Dallas, Texas

10/04/04

5 acres

developed land

Item 3.

Legal Proceedings.

~~Each~~We are not a party to, and none of ~~the~~our properties ~~was~~ ~~transferred~~are subject to, usany onmaterial ~~the~~pending ~~Effective~~legal ~~Date~~proceedings. ~~The~~Nor ~~following~~are ~~information~~we ~~generally~~aware ~~applies~~of toany such ~~all~~legal ofor ~~our~~regulatory ~~properties:~~proceedings contemplated by governmental authorities.

25Item 4. Mine Safety Disclosures.

~~· we believe all of our properties are adequately covered by insurance and suitable for their intended purposes;~~None.

~~· we have no plans for any material renovations, improvements or development of our properties, except in accordance with planned budgets;~~PART II

·Item ~~our~~5. ~~properties~~Market ~~are~~for ~~located~~Registrant’s inCommon ~~markets~~Equity, ~~where~~Related weStockholder ~~are~~Matters ~~subject to competition in attracting new tenants~~ and ~~retaining~~Issuer ~~current~~Purchases ~~tenants;~~of ~~and~~Equity Securities.

·Market ~~depreciation is provided on a straight-line basis over the estimated useful lives of the buildings.~~Information

~~Dispositions~~There is no established trading market for our units of beneficial interests, and we do not expect that one will develop. Except for certain transfers by will, intestate succession or operation of law, or from a qualified account to a non-qualified account if necessary to allow holders of beneficial interests to comply with certain IRA minimum distribution requirements under the Internal Revenue Code, if applicable, beneficial interests in the Liquidating Trust are not transferable, and our beneficiaries do not have authority or power to sell or in any other manner dispose of their beneficial interests.

On May 17, 2012, Behringer Harvard Mountain Village, LLC, a wholly-owned subsidiary of the Partnership, entered into a Deed in Lieu of Foreclosure Agreement with Credit Union Liquidity Services, LLC (“CULS”) effective May 8, 2012, whereby ownership of our 23-unit condominium property (“Cassidy Ridge”) was transferred to CULS, resulting in full settlement of the outstanding debt to the lender. As a result, a gain on troubled debt restructuring of $7.1 million was recognized which is included in the consolidated statement of operations for the year ended December 31, 2012. On September 29, 2006 the borrower entered into a loan agreement with CULS to borrow a total principal amount of up to $27.7 million to construct Cassidy Ridge (“Cassidy Ridge Loan Agreement”). The outstanding principal balance, together with all accrued but unpaid interest, was due and payable on the maturity date of October 1, 2011. The loan, which was recourse to the Partnership, had an outstanding principal balance of approximately $28.4 million at May 17, 2012.Holders

~~On June 8, 2012, Mockingbird~~As ~~Commons, LLC (the “Mockingbird Commons Partnership”) entered into a Deed in Lieu~~ of ~~Foreclosure~~March ~~Agreement with Westdale Capital Investors I~~19, ~~Ltd (“Mockingbird Lender”) whereby 39 luxury high-rise condominiums and 1.4 acres of excess land located in Dallas~~2014, ~~Texas~~we ~~(“Palomar~~had ~~Residences”) were transferred to the Mockingbird Lender~~10,803,839 ~~resulting~~beneficial ininterest ~~full~~units ~~settlement of the~~ outstanding ~~debt.~~that Aswere aheld ~~result,~~by a ~~gain~~total ~~on troubled debt restructuring~~ of ~~$1.0~~approximately ~~million~~4,400 ~~was recognized of which $0.9 million~~beneficiaries ~~is included in discontinued operations on the statement~~ of ~~operations for the year ended December 31, 2012~~record. ~~The outstanding principal balance under the loan agreement was approximately $19.4 million at June 8, 2012.~~

On August 16, 2012, 1221 Coit Road was sold for a contract sales price of $20.0 million and on August 17, 2012, 250/290 John Carpenter was sold for a contract sales price of $22.8 million. Proceeds from the sales of these properties were used to fully satisfy the existing indebtedness associated with the properties and additional liabilities of the fund.24

~~Item 3. Legal Proceedings.~~Distributions

WeAs is common in real estate-related direct investments, when a fund enters its final disposition phase and sells assets, thereby reducing the asset base available to generate distributable cash, it is normal for monthly distributions to cease, and for further distributions to come only in the form of special distributions as assets are ~~not~~sold. As a ~~party~~result, the terms of the Liquidating Trust Agreement contemplates that from time to time we will make special cash distributions to our beneficiaries, including in connection with the disposition of our remaining assets, to the extent that such cash will not be needed to provide for our liabilities (including contingent liabilities). Because we cannot be certain about the precise net realizable value of our assets and ~~none~~the ultimate amount of our ~~properties~~liabilities, we are ~~subject~~not able to predict accurately the aggregate cash amounts which will ultimately be distributed to our beneficiaries or the timing of any such distributions. The amount and timing of remaining distributions will be determined by our Managing Trustee based on funds available, net proceeds realized from the remaining assets, the timing of asset sales, whether our total assets exceed total liabilities at such time, whether we have provided for the level of reserves deemed necessary or appropriate and other considerations. We did not pay any ~~material~~distributions ~~pending~~to ~~legal~~our ~~proceedings~~beneficiaries during the year ended December 31, 2013 and 2012.

~~Item~~Recent 4.Sales of ~~Mine~~Unregistered ~~Safety Disclosures.~~Securities

None.

26Item 6. Selected Financial Data.

~~PART~~The following IIselected financial data should be read in conjunction with “Item 1A. Risk Factors,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the notes thereto beginning on page F-1 of this Annual Report on Form 10-K. The results for the period from January 1, 2013 (a date we used as a matter of convergence, efficiency and materiality) through December 31, 2013 are not comparable to any prior period because we began operations as of an effective date of February 11, 2013 (amounts in thousands).

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

	Year Ended
Selected Financial Data	December 31, 2013
STATEMENT OF NET ASSETS:
Total assets	$	62,065
Net assets in liquidation (1)	$	16,214
Net asset value per unit	$	1.50

~~Market~~(1) ~~Information~~The net assets in liquidation as of December 31, 2013 of $16.2 million plus cumulative liquidating distributions paid through December 31, 2013 of $21 million (which includes the amount paid to the Partnership’s limited partners prior to the transfer of its assets and liabilities to the Liquidating Trust), would result in liquidating distributions paid to our beneficiaries per unit of approximately $3.62 per unit (including $2.12 per unit paid to the Partnership’s limited partners prior to the transfer its of assets and liabilities to the Liquidating Trust).

There is no established trading market for our units of beneficial interests, and we do not expect that one will develop. Except for certain transfers by will, intestate succession or operation of law, or from a qualified account to a non-qualified account if necessary to allow holders of beneficial interests to comply with certain IRA required minimum distribution requirements under the Internal Revenue Code, if applicable, beneficial interests in the Liquidating Trust are not transferable, and beneficiaries do not have authority or power to sell or in any other manner dispose of their beneficial interests.

	Year Ended
	December 31, 2013
Statement of Changes in Net Assets:
Net assets in liquidation at beginning of period	$	11,417
Change in estimated costs in excess of estimated receipts during liquidation		(214	)
Net increase (decrease) in fair value		(1,624	)
Changes in other assets/liabilities		6,635
Liquidating distributions to beneficiaries		-
Change in net assets in liquidation		4,797
Net assets in liquidation at end of period	$	16,214

~~The~~Item ~~Partnership~~7. ~~Agreement required that the General Partners annually provide the Partnership~~Management’s ~~limited~~Discussion ~~partners~~and ~~with~~Analysis ~~an estimate~~ of ~~the~~Financial ~~amount~~Condition ~~a holder of limited partnership units would receive if the properties were sold at their fair market values as of the close of the fiscal year,~~ and ~~the~~Results ~~proceeds from the sale~~ of ~~the properties (without reduction for selling expenses), together with other funds of the Partnership, were distributed in a liquidation~~Operations.

~~On December 14, 2012,~~The ~~one~~following ofdiscussion ~~the~~and ~~Partnership’s~~analysis ~~General~~should ~~Partners,~~be ~~Behringer~~read ~~Advisors~~in IIconjunction ~~LP,~~with ~~adopted~~“Item ~~an estimated value of $1~~6.93 ~~per~~Selected ~~limited~~Financial ~~partnership unit. As~~Data” ~~part of the General Partner’s valuation process,~~ and asour ~~required by the Partnership Agreement, the General~~consolidated ~~Partner~~financial ~~obtained~~statements ~~the opinion of Stanger, an independent third party, that the estimated valuation was reasonable~~ and ~~was~~related ~~prepared in~~notes ~~accordance~~included ~~with appropriate methods for valuing real estate. Stanger, founded~~ in ~~1978,~~this isAnnual aReport ~~nationally~~on ~~recognized investment~~Form ~~banking firm specializing in real estate, REITs and direct participation programs such as the Partnership~~10-K.

~~Stanger’s opinion~~Overview ~~was expressed from a financial point of view~~ and ~~was~~Background subject to various limitations. Stanger relied on information provided by the General Partner without independent verification and did not perform appraisals, did not inspect the properties or review engineering or structural studies, environmental studies, and did not make independent local market inquiries. Stanger relied on information from the General Partner regarding lease terms and the physical condition and capital expenditure requirements of each property.

~~Process~~On the ~~and~~Effective ~~Methodology~~Date, the Partnership completed its liquidation pursuant to the Plan adopted by Behringer Advisors II, as its General Partner pursuant to its authority under the Partnership Agreement, which provided for our formation as a liquidating trust for the purpose of completing the liquidation of the assets of the Partnership.

~~The objective in determining~~In anfurtherance ~~estimated~~of ~~value~~the ~~per~~Plan, ~~unit~~the isPartnership toentered ~~arrive~~into atthe aLiquidating ~~value~~Trust ~~that~~Agreement iswith ~~reasonable using what~~ the Partnership’s General ~~Partner~~Partners, Behringer ~~deems~~Advisors toII, beas ~~appropriate valuation~~Managing ~~methodologies~~Trustee, and ~~assumptions~~CSC ~~under~~Trust ~~then~~Company ~~current~~of ~~circumstances~~Delaware, inas ~~accordance with~~ the ~~valuation~~Resident ~~methodology~~Trustee. ~~required by~~As of the ~~Partnership~~Effective ~~Agreement. In~~Date, each ~~arriving~~of at the ~~estimated~~holders ~~value~~of ~~per~~ limited partnership ~~unit,~~units in the ~~General~~Partnership ~~Partner utilized~~received ~~valuation~~a ~~methodologies~~pro ~~that~~rata itbeneficial ~~believes~~interest ~~are~~unit ~~standard and acceptable~~ in the ~~real~~Liquidating Trust ~~estate~~in ~~industry~~exchange for ~~the~~such ~~types~~holder’s ofinterest ~~assets held~~in by the Partnership. ~~The following is a summary of the valuation methodologies used by the General Partner.~~

~~Investments in~~In ~~Real~~accordance ~~Estate:~~with Asthe anPlan ~~opportunity~~and ~~style~~the ~~fund~~Liquidating ~~with~~Trust ~~varying asset types~~Agreement, the ~~General~~Partnership ~~Partner~~transferred ~~estimated~~all ~~the~~of ~~value~~its ofremaining ~~the~~assets ~~investments~~and liabilities into ~~real~~the ~~estate~~Liquidating byTrust ~~using~~to abe ~~variety~~administered, disposed of ~~methods~~or provided for ~~purposes~~in ofaccordance ~~calculating~~with the ~~estimated~~terms ~~value~~and ~~per~~conditions ~~unit. In~~set forth ~~calculating~~in ~~values~~the ~~for~~Liquidating ~~all~~Trust ofAgreement. On the ~~real~~Effective ~~estate assets~~Date, the ~~General~~Partnership ~~Partner~~filed ~~assumed~~a ~~that~~Form ~~such~~15 ~~assets~~with ~~were~~the ~~sold~~SEC asto ofterminate ~~January~~the 1,registration ~~2013. The~~of ~~new~~the ~~estimated~~limited ~~per-unit~~partnership ~~value~~units ~~reflects~~in the ~~current~~Partnership ~~challenging~~under ~~economic~~the ~~climate~~Exchange ~~that~~Act ~~continues~~and toannounced ~~impact~~it ~~the real~~would ~~estate~~cease ~~and~~filing ~~capital~~reports ~~markets,~~under ~~and~~that Act. ~~opportunistic~~On ~~investing~~March in28, ~~particular. An~~2013 ~~opportunity-style~~we ~~fund~~were ~~like~~granted ~~the~~No-Action ~~Partnership generally~~relief ~~acquires~~from ~~assets with~~ the ~~intention~~SEC ofregarding ~~spending~~our ~~capital~~proposed tomodified ~~enhance~~reporting. ~~and~~A ~~reposition~~copy orof ~~develop these assets for appreciation.~~the ~~However,~~No-Action ~~the~~letter ~~difficult~~is ~~economic~~publicly ~~and~~available ~~capital~~through ~~market~~the ~~conditions~~SEC’s ofwebsite. ~~recent~~Accordingly, ~~years~~our ~~have~~Managing ~~severely~~Trustee ~~impacted~~will ~~valuations~~file inwith athe ~~broad range~~SEC ofannual ~~real~~reports ~~estate~~on ~~classes,~~Form ~~including~~10-K ~~those~~that incontain ~~which~~unaudited ~~the~~financial ~~Partnership~~statements ~~was~~based ~~invested. The~~on ~~markets~~the ~~for~~liquidation ~~commercial~~basis ~~real~~of ~~estate fluctuate,~~accounting and ~~values~~current reports ~~are~~on ~~expected~~Form 8-K to ~~continually~~disclose ~~change~~material inevents ~~the~~relating ~~future~~to us.

For the improved operating property within the portfolio and the value of the promoted interest in two properties that the Partnership sold in 2011, the General Partner estimated the values using appraisals performed by a third party. In estimating the value of developed land, the General Partner used the purchase option price currently available to an independent third party.25

~~Other~~The Liquidating ~~Assets~~Trust ~~and Liabilities:~~will ~~The~~terminate ~~carrying~~upon ~~value~~the earliest of a(i) ~~majority~~the distribution of ~~the~~all ~~other~~of our assets ~~and~~in ~~liabilities~~accordance ~~are~~with ~~considered~~the toterms beof the ~~equal~~Liquidating toTrust ~~fair~~Agreement, ~~value due~~or to(ii) ~~their~~the ~~short~~expiration ~~maturities~~of a period of three years from the Effective Date. The ~~valuation~~term ~~also~~may ~~includes~~be extended beyond the ~~carrying~~three-year ~~value~~term ofif ~~the~~our ~~current~~Managing ~~assets~~Trustee ~~and~~determines ~~liabilities on~~that aan ~~consolidated~~extension ~~basis~~is reasonably necessary to wind up our affairs.

~~The estimated value~~Hotel ~~per~~Palomar ~~unit~~(and ofits ~~the~~retail ~~Partnership’s limited partnership units does not reflect a liquidity discount for the fact that the units are not currently traded on a national securities exchange~~component), aapproximately ~~discount~~five ~~for~~acres ~~the non-assumability or prepayment obligations associated with certain~~ of ~~the~~land ~~debt,~~and ~~or a discount for~~ the ~~corporate~~back-end ~~level~~promoted ~~overhead~~interest ~~and~~in ~~other~~distributable ~~costs~~cash to ~~that~~one ~~may~~sold beproperty ~~incurred,~~remain ~~including~~in ~~any costs of any sale of~~ the ~~assets~~portfolio. ~~Others~~ ~~using~~We ~~different~~will ~~assumptions~~not ~~and~~purchase ~~estimates~~any ~~could~~additional ~~derive~~properties ~~a different estimated value per unit, and these differences could be significant. The markets~~ for ~~real~~our ~~estate can fluctuate and values are expected to change in the future~~portfolio.

27Use of Estimates in the Preparation of Financial Statements

~~Allocation~~The preparation of ~~Estimated~~our ~~Value~~financial statements in conformity with generally accepted accounting principles (“GAAP”) and under the liquidation basis of accounting requires management to make estimates and assumptions that affect the reported amounts of assets (including net assets in liquidation) and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On a regular basis, we will evaluate these estimates. These estimates will be based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

~~The estimated value per limited partnership unit was allocated~~Liquidation ~~amongst~~Basis ~~the~~of ~~asset types as follows:~~Accounting

Real estate assets	$	5.05
Debt		(3.91	)
Other		0.79
Estimated net asset value per unit	$	1.93

Under the liquidation basis of accounting, all assets were adjusted to their estimated fair value (on an undiscounted basis) and liabilities, including estimated costs associated with implementing the Plan, were adjusted to their estimated settlement amounts as of January 1, 2013. We chose to adjust items to their fair values as of January 1, 2013 as a matter of convergence, efficiency and materiality. Actual values realized for assets and settlements of liabilities may differ materially from the amounts estimated. Estimated future cash flows from property operations were made based on the anticipated sales dates of our remaining assets. Due to the uncertainty in the timing of the anticipated sales dates and the cash flows therefrom, operations may differ materially from amounts estimated. These amounts are presented in the accompanying statement of net assets included in the consolidated financial statements. The net assets represent the estimated liquidation value of our remaining assets available to our beneficiaries upon liquidation. The actual settlement amounts realized for assets and liabilities may differ materially, perhaps in adverse ways, from the amounts estimated.

~~Limitations~~In accordance with our Liquidating Trust Agreement, we continue to actively manage our property portfolio to seek to achieve higher occupancy rates, and control operating expenses. We continually evaluate our existing portfolio and adjust our net real estate liquidation value accordingly. When we become aware of ~~Estimated~~market ~~Value~~conditions ~~Per~~or ~~Unit~~other circumstances that indicate that the present value of our properties materially differs from our expected net sales price, we will adjust our liquidation value accordingly. Under the terms of our Liquidating Trust Agreement, we will not acquire any new properties and are focused on liquidating our remaining assets.

~~As with any valuation~~Asset ~~methodology,~~(Liability) ~~the~~for ~~General~~Estimated ~~Partner’s~~Receipts ~~methodology~~(Costs) isin ~~based~~Excess ~~upon a number~~ of ~~estimates~~Estimated ~~and~~Costs assumptions that may prove later to be inaccurate or incomplete. Further, different parties with different assumptions and estimates could derive a different estimated value per unit. The estimated per share limited partnership unit determined by the General Partner neither represents the fair value according to generally accepted accounting principles in the United States (~~“GAAP”~~Receipts) of ~~the~~during assets less liabilities, nor does it represent the amount the units would trade at on a national securities exchange or the amount a unit holder would obtain if he tried to sell his units or if the Partnership liquidated its assets. Accordingly, with respect to the estimated value per unit, the Fund can give no assurance that:Liquidation

·Under the aliquidation ~~unit~~basis ~~holder~~of ~~would~~accounting, bewe ~~able~~are required to ~~resell~~estimate ~~his~~the orcash ~~her~~flows ~~units~~from atoperations ~~this~~and accrue the costs associated with implementing the liquidation of our remaining assets in compliance with the Plan and our Liquidating Trust Agreement. We currently estimate that we will have estimated ~~value;~~costs of liquidation in excess of operating cash flows from our estimated receipts. We believe that our projected sales proceeds will cover the deficit. These amounts can vary significantly due to, among other things, the timing and estimates for executing and renewing leases, along with the estimates of tenant improvements incurred and paid, the timing of property sales, the timing and amounts associated with discharging known and contingent liabilities and the costs associated with winding up our operations. These costs are estimated and are expected to be paid over the liquidation period.

·The change ain ~~unit~~the ~~holder~~asset ~~would~~(liability) ~~ultimately~~for ~~realize~~estimated ~~distributions~~receipts ~~per~~(costs) ~~unit~~in ~~equal~~excess toof ~~the~~ estimated ~~value~~costs ~~per~~(receipts) ~~unit~~during ~~upon~~ liquidation of for the ~~assets~~year ~~and~~ended ~~settlement~~December of31, ~~its~~2013 ~~liabilities~~was oras afollows ~~sale~~(amounts ofin ~~the Partnership;~~thousands):

· the units would trade at the estimated value per unit on a national securities exchange; or

	January 1,			Cash Payments			Change in			December 31,
	2013			and (Receipts)			Estimates			2013

Asset:
Estimated net inflows from consolidation of operating activities	$	2,211		$	(778	)	$	(195	)	$	1,238
Liabilities:
Liquidation costs		(1,375	)		442			137			(796	)
Capital expenditures		(1,480	)		229			(49	)		(1,300	)
Total liabilities		(2,855	)		671			88			(2,096	)
Total liabilities for estimated cost in excess of estimated receipts during liquidation	$	(644	)	$	(107	)	$	(107	)	$	(858	)

~~· the methodology used to estimate the value per unit would be acceptable to FINRA or under ERISA for compliance with their respective reporting requirements.~~26

~~On the Effective Date,~~Net ~~when~~Assets ~~the Partnership’s assets and liabilities were transferred to us, the economic value of each beneficial interest unit was equivalent to the economic value of one limited partnership unit~~ in the Partnership. The most recent estimated value per limited partnership unit as of December 14, 2012 should not be relied upon after such date, as we continue to sell our remaining assets. Because we are actively in the process of completing the disposition of our remaining properties as soon as practicable, we will not continue the Partnership’s practice of making annual estimated valuations under the terms of the Liquidating Trust Agreement.Liquidation

~~Holders~~The net assets in liquidation as of December 31, 2013 of $16.2 million plus cumulative liquidating distributions paid through December 31, 2013 of $21 million (which includes the amount paid to the Partnership’s limited partners prior to the transfer of its assets and liabilities to the Liquidating Trust), would result in liquidating distributions paid to our beneficiaries of approximately $3.62 per unit (including $2.12 per unit paid to the Partnership’s limited partners prior to the transfer its of assets and liabilities to the Liquidating Trust). These estimates for liquidating distributions per unit include projections of costs and expenses expected to be incurred during the period required to complete liquidation of our remaining assets in compliance with the Plan and our Liquidating Trust Agreement. These projections could change materially based on the timing of sales, the performance of underlying assets and any changes in the underlying assumptions of projected cash flows.

~~As of March 19, 2013,~~Factors weWhich ~~had~~May ~~10,803,839~~Influence ofFuture ~~beneficial~~Changes ~~interest~~in ~~units~~Net ~~outstanding~~Assets ~~that~~in ~~were held by a total of approximately 4,350 beneficiaries.~~Liquidation

~~Distributions~~Rental Income

~~As is common in real~~The ~~estate~~amount related direct investments, when a fund enters its final disposition phase and sells assets, thereby reducing the asset base available to generate distributable cash, it is normal for monthly distributions to cease, and for further distributions to come only in the form of ~~special~~rental ~~distributions~~income asgenerated ~~assets~~by ~~are sold. As a result, the terms of the Liquidating Trust Agreement contemplates that from time to time we will make special cash distributions to~~ our ~~beneficiaries,~~properties including inour ~~connection~~hotel ~~with the~~depends ~~disposition~~on of our ~~remaining~~ability ~~assets,~~ to ~~the~~maintain ~~extent that such cash will not be needed to provide for our liabilities (including contingent liabilities). Because we cannot be certain about~~ the ~~precise~~occupancy ~~net realizable value of our assets and the ultimate amount~~rates of ~~our~~currently ~~liabilities,~~leased wespace ~~are~~and ~~not able~~ to ~~predict~~lease ~~accurately~~currently ~~the~~available ~~aggregate~~space ~~cash amounts which will ultimately be distributed to our beneficiaries or the timing of any such distributions. The amount~~ and ~~timing~~space ~~of remaining distributions will be determined by our Managing Trustee based on funds~~ available, ~~net proceeds realized~~ from ~~the~~unscheduled ~~remaining~~lease ~~assets,~~terminations ~~the~~at ~~timing of asset sales, whether~~the ~~our~~existing ~~total~~rental ~~assets~~rates. ~~exceed~~Negative ~~total~~trends ~~liabilities~~in atone ~~such~~or ~~time,~~more ~~whether~~of wethese ~~have~~factors ~~provided~~could ~~for~~adversely ~~the~~affect ~~level~~our ofrental ~~reserves~~income ~~deemed~~in ~~necessary~~future ~~or appropriate and other considerations~~periods.

~~Recent~~Transfer to ~~Sales~~the ofLiquidating ~~Unregistered Securities~~Trust

~~None.~~Pursuant to the Plan, on February 11, 2013, the Partnership transferred the following remaining assets and liabilities, which were valued as of January 1, 2013, to the Liquidating Trust (amounts in thousands):

	January 1,
	2013
Real estate investments:
Real estate held for sale	$	49,602
Cash and cash equivalents		5,286
Restricted cash		154
Accounts receivable, net		861
Prepaid expenses and other assets		745
Notes payable		(31,876	)
Notes payable to related party		(8,801	)
Accounts payable		(544	)
Payables to related parties		(1,997	)
Accrued liabilities		(1,369	)
Liability for estimated costs in excess of estimated receipts during liquidation		(644	)
Net assets in liquidation	$	11,417

~~Item~~Changes in 6.Net ~~Selected~~Assets ~~Financial~~in ~~Data.~~Liquidation

~~As of December 31, 2012, the~~For Partnership owned interests in a hotel and approximately five acres of land at 1221 Coit Road. The Partnership had ownership in four properties as of December 31, 2011 and ownership interests in ten properties as of December 31, 2010, 2009 and 2008. During the year ended December 31, 2012 the Partnership sold two office properties and returned Cassidy Ridge and Palomar Residences to the respective lenders. During the year ended December 31, 2011 the Partnership sold three office properties and a single family home development and returned a shopping/service center and undeveloped land back to the respective lenders. The following data should be read in conjunction with the consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this Annual Report on Form 10-K. The selected data below as of and for each of the five years in the period ended December 31, 2012 has been derived from the financial statements (in thousands, except per unit amounts).2013

	2012			2011			2010			2009			2008
Total assets	$	40,672		$	116,026		$	203,308		$	203,009		$	199,918
Notes payable	$	41,095		$	123,742		$	165,123		$	156,024		$	153,987
Other liabilities		4,700			13,064			12,337			12,589			10,740
Partners' capital (deficit)		2,443			(14,472	)		29,961			36,513			34,874
Noncontrolling interest		(7,566	)		(6,308	)		(4,113	)		(2,117	)		317
Total liabilities and equity	$	40,672		$	116,026		$	203,308		$	203,009		$	199,918
	2012			2011			2010			2009			2008
Total revenues	$	14,619		$	20,501		$	15,093		$	13,412		$	16,418
Income (loss) from continuing operations		3,285			(34,664	)		(6,627	)		(7,880	)		(7,732	)
Loss from discontinued operations		(2,258	)		(15,568	)		(12,087	)		(7,592	)		(23,971	)
Gain on sale of discontinued operations		15,629			75			-			-			-
Net income (loss)		16,656			(50,157	)		(18,714	)		(15,472	)		(31,703	)
Net loss attributable to noncontrolling interest		259			2,016			2,100			2,434			1,159
Net income (loss) attributable to the Partnership	$	16,915		$	(48,141	)	$	(16,614	)	$	(13,038	)	$	(30,544	)
Basic and diluted net income (loss) per limited partnership unit	$	1.57		$	(4.45	)	$	(1.54	)	$	(1.21	)	$	2.83
Distributions declared per limited partnership unit	$	-		$	-		$	-		$	0.14		$	0.28

Net assets in liquidation increased $4.8 million during the year ended December 31, 2013. The primary reason for the increase in net assets was related to the back-end promoted interests on the sale of Landmark I & II which we sold in 2011. During 2013, we recorded an accounts receivable of approximately $6.3 million related to the back-end promoted interests. We received payment of $6.2 million in January 2014.

~~Item 7. Management’s Discussion~~ Liquidity and ~~Analysis~~Capital ofResources ~~Financial Condition and Results of Operations.~~

~~The~~Our ~~following~~total ~~discussion~~assets and ~~analysis~~net ~~should~~assets bein ~~read~~liquidation inwere ~~conjunction~~$62.1 ~~with~~million and $16.2 million, respectively, at December 31, 2013. Our ability to meet our obligations is contingent upon the ~~accompanying~~sale ~~consolidated~~of ~~financial~~our ~~statements~~remaining ~~and~~assets. We estimate that the ~~notes~~net ~~thereto~~proceeds ~~with~~from the sale of ~~respect~~our remaining assets will be adequate to pay our ~~predecessor~~obligations; inhowever ~~interest,~~we ~~the~~cannot ~~Partnership,~~provide any assurance as to the prices we will receive for the disposition of ~~December 31, 2012~~our remaining assets or the net proceeds there from.

~~Critical~~Current Sources ~~Accounting~~of ~~Policies~~Capital and ~~Estimates~~ Liquidity

~~Management’s~~We ~~discussion~~anticipate, ~~and~~but ~~analysis~~cannot ofassure, ~~financial~~that ~~condition~~our ~~and~~cash ~~results~~flow offrom operations ofand ~~the~~sale ~~Partnership~~of ~~are based upon~~ our ~~consolidated~~remaining ~~financial statements,~~assets ~~which~~will ~~have~~be ~~been~~sufficient ~~prepared~~during inthe liquidation ~~accordance~~period ~~with~~to ~~GAAP.~~fund ~~The preparation of these financial statements requires~~ our ~~management to~~cash ~~make~~needs ~~estimates~~for ~~and~~payment ~~assumptions that affect the reported amounts~~ of ~~assets, liabilities, revenues and~~ expenses, and ~~related disclosure~~capital ~~of contingent assets and liabilities~~expenditures. OnAlthough ~~a regular basis,~~ we ~~evaluate~~can ~~these~~provide ~~estimates,~~no ~~including investment impairment.~~assurances, ~~These~~we ~~estimates~~currently ~~are~~expect ~~based on management’s historical industry experience and on various other assumptions that are believed~~ to besell ~~reasonable~~all ~~under~~of ~~the~~our ~~circumstances.~~assets ~~Actual~~by ~~results~~February ~~may differ from these estimates~~2016.

~~Principles~~Other ofLiquidity ~~Consolidation~~Needs ~~and Basis of Presentation~~

~~The consolidated financial~~We ~~statements~~believe ~~include~~that ~~the~~we ~~Partnership’s~~will ~~accounts and the accounts of its subsidiaries. All inter-company transactions, balances and profits~~ have ~~been~~sufficient ~~eliminated~~capital inresources ~~consolidation. Interests in entities acquired are evaluated based on applicable GAAP, which includes the consolidation of variable interest entities (“VIEs”) in which the Partnership is deemed~~ to besatisfy ~~the~~our ~~primary beneficiary.~~liquidity Ifneeds ~~the~~during ~~interest in~~ the ~~entity~~liquidation is determined not to be a VIE, then the entities are evaluated for consolidation based on legal form, economic substance, and the extent to which the Partnership has control and/or substantive participating rights under the respective ownership agreementperiod.

There are judgments and estimates involved in determining if an entity in which the Partnership has made an investment is a VIE and if so, if it is the primary beneficiary. The entity is evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility and using a discount rate to determine the net present value of those future losses. A change in the judgments, assumptions and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment on the equity method that should in fact be consolidated, the effects of which could be material to the Partnership’s financial statements.27

29As of December 31, 2013, we estimate that we will have approximately $2.1 million of commitments and expenditures during the liquidation period. However, there can be no assurance that we will not exceed the amounts of these estimated expenditures or that we will be able to obtain additional sources of financing on commercially favorable terms, or at all. A material adverse change in the net cash provided by operating activities or net proceeds expected from the liquidation of our remaining assets may affect our ability to fund these items.

~~Impairment~~Liquidating distributions will be determined in our Managing Trustee’s sole discretion and are dependent on a number of ~~Long-Lived~~factors, ~~Assets~~including the amount of funds available for distribution, our financial condition, our capital expenditures, and other factors our Managing Trustee may deem relevant.

~~Prior to the Effective~~We ~~Date,~~currently ~~management~~have ~~monitored~~limited ~~events~~exposure ~~and~~to ~~changes in circumstances indicating that~~ the ~~carrying~~credit ~~amounts of the real estate assets may not be recoverable~~markets. ~~Examples~~The oflack ~~the types~~ of ~~events~~available ~~and~~credit ~~circumstances~~may ~~that~~affect ~~would~~our ~~cause~~ability ~~management~~ to ~~assess~~dispose ~~assets~~of ~~for potential~~additional ~~impairment~~properties ~~include,~~due ~~but were not limited~~ to: apotential ~~significant~~purchasers ~~decrease in the market price of an asset; a significant adverse change in the manner in which the asset was~~ being ~~used;~~unable anto ~~accumulation~~obtain of costs in excess of the acquisition basis plus construction of the property; major vacancies and the resulting loss of revenues; natural disasters; a change in the projected holding period; legitimate purchase offers and changes in the global and local markets or economic conditionsfinancing. ~~Assets~~We ~~may~~ have atno ~~times~~exposure ~~been concentrated in limited geographic locations and,~~ to ~~the~~money ~~extent~~market ~~that~~mutual ~~the~~funds ~~Partnership’s portfolio was concentrated in limited geographic~~and ~~locations,~~we ~~downturns~~monitor specifically related to such regions may have resulted in tenants defaulting on their lease obligations at a portion of its properties within a short time period, which might result in asset impairments. When such events or changes in circumstances were present, management assessed potential impairment by comparing estimated future undiscounted operating cash flows expected to be generated over the ~~life~~depository ofinstitutions ~~the asset and from its eventual disposition to the carrying amount of the asset. In the event~~ that ~~the~~hold ~~carrying~~our ~~amount exceeded the estimated future undiscounted operating~~ cash flows, the Partnership recognized an impairment loss to adjust the carrying amount of the asset to its estimated fair value. Management considered projected future undiscounted cash flows, trends, strategic decisions regarding future development plans, and ~~other factors in their assessment of whether impairment conditions existed. While management believes estimates of future~~ cash ~~flows~~equivalents ~~were~~on ~~reasonable,~~a ~~different assumptions~~regular ~~regarding~~basis ~~factors such as market rents, economic conditions,~~ and ~~occupancy~~believe ~~rates~~that ~~could~~we ~~significantly affect these estimates. A change in these estimates and assumptions could~~ have ~~resulted in understating or overstating the book value of our~~placed ~~investments,~~our ~~which~~deposits ~~could~~with becreditworthy ~~material to the~~ financial ~~statements~~institutions.

~~Real Estate~~Off-Balance ~~Inventory~~Sheet Arrangements

~~Real estate inventory~~There ~~was~~are ~~stated~~no atoff-balance ~~the~~sheet ~~lower~~arrangements ofthat ~~cost~~are orreasonably ~~fair~~likely ~~market~~to ~~value~~have ~~and~~a ~~consisted~~current ofor ~~developed~~future ~~land,~~material ~~condominiums~~effect ~~and~~on ~~constructed~~our ~~homes. In addition~~financial ~~to land acquisition costs~~condition, ~~land~~changes ~~development~~in ~~costs~~financial ~~and construction costs~~condition, ~~costs~~revenues ~~included~~or ~~interest and real estate taxes~~expenses, ~~which were~~results ~~capitalized during the period beginning with the commencement~~ of ~~development~~operations, ~~and~~liquidity, ~~ending~~capital ~~with~~expenditures ~~the~~or ~~completion of construction~~capital resources.

~~Inventory Valuation~~Contractual ~~Adjustment~~ Obligations

~~For real estate inventory,~~The atfollowing ~~each~~table ~~reporting~~sets ~~date,~~forth ~~management~~certain ~~compared~~information ~~the~~concerning ~~estimated fair value less costs to sell to~~ the ~~carrying~~Liquidating ~~value.~~Trust’s Ancontractual ~~adjustment~~obligations ~~was recorded~~and ~~to the extent that the fair value less costs to sell was less than the carrying value. Management determined the estimated~~commercial ~~fair~~commitments ~~value~~as ~~based on comparable sales in the normal course~~ of ~~business~~December ~~under~~31, ~~existing~~2013, and ~~anticipated~~outlines ~~market~~expected ~~conditions. This evaluation took into consideration estimated~~ future ~~selling~~payments ~~prices,~~to ~~costs~~be ~~spent~~made toby ~~date,~~the ~~estimated~~Liquidating ~~additional~~Trust ~~future~~under ~~costs~~such obligations and ~~management’s plans~~commitments ~~for~~(in ~~the property.~~thousands):

Overview and Background


	Payments due by period (1)
	Totals		2014		2015		2016		2017		2018		Thereafter
Notes payable	$	41,096	$	10,282	$	30,814	$	-	$	-	$	-	$	-
Interest		4,995		3,273		1,722		-		-		-		-
Total	$	46,091	$	13,555	$	32,536	$	-	$	-	$	-	$	-

~~During~~(1) ~~2012,~~Does the U.S. economic recovery, although still slow by most measures, survived uncertainties over the general election and the fiscal cliff and exhibited visible improvements in many fundamentals. One of the more important factors was the stabilization of the housing sector, a sector that historically has been important in prior economic recoveries. In the second half of the year, home price indexes for the largest 20 cities in the U.S. had recovered to 2003 levels. While these are still not atinclude ~~pre-recession~~discount ~~highs, these are levels that show improvement in inventories, foreclosures and distressed sales. With recent government initiatives to encourage private investment~~ of ~~single~~approximately ~~family homes, many analysts are projecting a faster pace to clear the supply of foreclosed and vacant properties~~$0. Other improvements were made in factory output, particularly autos and other durable goods, corporate profits and modest gains in employment. Regarding employment, the economy averaged 165,000 new jobs in the fourth quarter of 2012, higher than prior quarters, but because that is barely exceeding new workers entering the market, it is a level that is consistent with a slow, gradual recovery. Also helping the U.S. are improvements, or at least stabilization, of global economic issues. The European debt crisis, which created uncertainty over sovereign defaults and departures from the Euro and European Union that were constant drags on the U.S. economy for the last couple of years, has now reached a point where the worst of the scenarios appear less likely. Global growth, as forecast by the World Bank, is projected at 2.4% ~~for 2013~~million. ~~This~~Includes ~~compares to an expected 2~~$8.3%8 ~~for~~million ~~2012~~notes ~~and~~payable ~~while less than earlier projections, is not expected~~ to berelated ~~a serious drag on the U~~party.S.

~~Offsetting~~New ~~these~~Accounting factors and likely contributors to a slower, moderate recovery are uneven private consumption, as individual savings rates continue to rise; continued decline in new business creation, as investors are reluctant to increase their risk capital; and decreases in the labor force, as the long term unemployed are not returning to the work force and may be structurally unemployed. Also, there is concern over the consequences and uncertainty related to political gridlock, which was reported as a major factor in the negative GDP report for the fourth quarter of 2012. The debate over the debt limit appears to be continuing for an extended period and risks a downgrade of U.S. credit and increased borrowing costs. The federal government has not passed a budget in the last four years and appears to be in a prolonged debate over spending and tax levels. We believe that businesses and consumers tend to be very conservative when confronted with these kinds of issues, which could disrupt what could otherwise be a stronger recovery. On a net basis, we believe the U.S. economy can overcome a certain degree of these issues, and with most analysts, we expect a moderate, but uneven U.S. growth for the near term. However, these issues have the potential to be very significant to the economy.Pronouncements

~~Our~~In ~~primary~~February 2013, ~~objectives~~the ~~will~~FASB beissued toASU ~~continue to~~2013-04, ~~preserve~~Obligations ~~value,~~Resulting ~~protecting~~from Joint and ~~selling~~Several ~~our~~Liability ~~remaining~~Arrangements ~~assets,~~for ~~providing~~Which ~~for~~the ~~our~~Total Amount ~~liabilities~~of ~~and~~the ~~distributing~~Obligation Is Fixed at the ~~remaining~~Reporting ~~proceeds~~Date. ~~Our~~ ~~ability~~The update requires an entity to ~~dispose~~measure obligations resulting from joint and several liability arrangements for which the total amount of ~~our~~the ~~properties~~obligation ~~will~~within bethe ~~subject~~scope toof ~~various~~this ~~factors~~guidance is fixed at the reporting date, ~~including~~as the ~~ability~~sum of ~~potential~~the ~~purchasers~~amount the reporting entity agreed to ~~access~~ ~~capital~~pay ~~debt~~on ~~financing.~~the Ifbasis weof ~~are~~its ~~unable~~arrangement toamong ~~sell~~its aco-obligors and ~~property~~any ~~when~~additional weamount ~~determine~~the reporting entity expects to dopay ~~so,~~on itbehalf ~~could~~of ~~have~~its aco-obligors. ~~significant~~The ~~adverse~~guidance in the update also requires ~~effect~~an onentity ~~our~~to ~~cash~~disclose ~~flows~~the nature and ~~results~~amount of ~~operations~~the obligation as well as other information about those obligations. ~~Given~~This ~~the~~guidance is ~~disruptions~~effective infor the ~~capital~~first ~~markets~~interim ~~and~~or ~~the~~annual ~~current~~period ~~lack~~beginning ofon ~~available credit,~~or ~~our~~after ~~ability~~December to15, ~~dispose~~2013. The adoption of ~~our~~this ~~properties~~guidance ~~may~~is not beexpected ~~delayed,~~to orhave wea ~~may~~material ~~receive~~impact ~~lower~~on ~~than~~our ~~anticipated~~financial ~~returns~~statements or disclosures.

30Inflation

~~Our remaining operating~~The real estate ~~asset,~~market ~~Hotel~~has ~~Palomar,~~not isbeen ~~located~~affected significantly by inflation in ~~Dallas,~~the ~~Texas.~~past ~~Smith~~several ~~Travel~~years ~~Research~~due ~~indicates that~~to the ~~national~~relatively ~~overall~~low ~~occupancy~~ inflation rate. ~~for~~The ~~hospitality~~majority ~~properties~~of inour ~~the~~leases ~~United~~contain ~~States~~inflation ~~increased~~protection ~~from~~provisions ~~60.1%~~applicable ~~in 2011~~ to ~~61%~~reimbursement ~~in 2012~~billings ~~and~~for ~~the~~common ~~national~~area maintenance ~~overall~~charges, ~~Average~~real ~~Daily~~estate ~~Rate~~tax ~~(“ADR”)~~and ~~increased~~insurance ~~from~~reimbursements ~~$101.64~~on ina ~~2011~~per tosquare ~~$106.10~~foot ~~during~~basis, ~~2012.~~or ~~The forecast~~in ~~for~~some ~~the~~cases, ~~2013~~annual ~~Dallas~~reimbursement of ~~hotel~~operating ~~market~~expenses ~~indicates~~above ~~modest~~a ~~increases~~certain inper ~~occupancy~~square ~~and~~foot ~~ADR~~allowance.

~~Current~~Item ~~economic conditions discussed above make it difficult to predict future operating results~~7A. ~~There~~Quantitative can be no assurance that we will not experience further declines in revenues or earnings for a number of reasons, including, but not limited to the possibility of greater than anticipated weakness in the economy and ~~the~~Qualitative ~~continued~~Disclosures ~~impact~~About ofMarket ~~the trends mentioned above~~Risk.

~~Results~~We may be exposed to interest rate changes primarily from variable interest rate debt incurred to acquire and develop properties, issue loans and make other permitted investments. Our management’s objectives, with regard to interest rate risks, are to limit the impact of ~~Operations~~interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve these objectives, we borrow primarily at fixed rates or variable rates with the lowest margins available and in some cases, with the ability to convert variable rates to fixed rates. With regard to variable rate financing, we will assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. We may enter into derivative financial instruments such as options, forwards, interest rate swaps, caps or floors to mitigate our interest rate risk on a related financial instrument or to effectively lock the interest rate portion of our variable rate debt. None of the Partnership’s approximately $40.7 million in notes payable at December 31, 2013 were subject to variable interest rates.

~~Fiscal year ended December 31, 2012 as compared to the fiscal year ended December 31, 2011~~28

~~As of December 31, 2012,~~At ~~the Partnership owned interests in Hotel Palomar and approximately five acres of land at 1221 Coit Road. The Partnership had ownership in four properties as of~~ December 31, ~~2011. During the year ended December 31~~2013, ~~2012~~ the ~~Partnership~~Liquidating ~~sold~~Trust ~~two~~did ~~office properties~~not ~~and~~have ~~returned~~any ~~Cassidy~~foreign ~~Ridge~~operations and ~~Palomar~~thus ~~Residences~~were tonot ~~the~~exposed respective lenders. During the year ended December 31, 2011 the Partnership sold three office properties and a single family home development and returned a shopping/service center and undeveloped land back to ~~the~~foreign ~~respective~~currency ~~lenders~~fluctuations. ~~All investments in partnerships and joint ventures were consolidated with and into our accounts.~~

~~Continuing~~Item ~~Operations~~8. Financial Statements and Supplementary Data.

~~Rental Revenue.~~The ~~Rental~~information ~~revenue~~required ~~for~~by ~~the~~this ~~years~~Item ~~ended~~8 ~~December~~is ~~31,~~hereby ~~2012~~incorporated ~~and~~by ~~2011~~reference ~~was~~to ~~$0.6~~our ~~million~~unaudited ~~and~~financial ~~$0.8 million,~~statements ~~respectively,~~beginning ~~and~~on ~~was~~page ~~comprised~~F-1 of ~~revenue,~~this ~~including~~Annual ~~adjustments~~Report ~~for~~on ~~straight-line~~Form ~~rent and amortization of above~~10-~~and below-market leases~~K. The decrease in rental revenue for the year ended December 31, 2012 was primarily due to the loss of a retail tenant at Hotel Palomar. We expect rental revenue to remain at current levels until we lease the vacant retail space.

~~Hotel~~Item ~~Revenue~~9. ~~Hotel~~ ~~revenue~~Changes ~~for~~in ~~the years ended December 31, 2012~~ and ~~2011~~Disagreements ~~was~~With ~~$14.0~~Accountants ~~million~~on ~~and~~Accounting ~~$14.2 million, respectively,~~ and ~~was comprised~~Financial ~~of revenue generated by the operations of Hotel Palomar~~Disclosure. The decrease in hotel revenue for the year ended December 31, 2012 is primarily due to the hotel hosting Dallas-Fort Worth area Super Bowl events in February 2011. For the year ended December 31, 2012, year over year occupancy and ADR at the hotel remained relatively flat. We expect revenue to increase modestly as the economy continues to improve.

~~Real Estate Inventory~~We ~~Sales.~~did ~~Real~~not ~~estate~~employ ~~inventory~~an ~~sales~~independent ~~for~~registered ~~the~~public ~~year~~accounting ~~ended~~firm ~~December~~to ~~31,~~perform ~~2011~~an ~~was~~audit ~~$5.6~~on ~~million and was primarily comprised of revenue generated by~~ the ~~sale~~financial ofstatements ~~home~~contained ~~inventory~~in ~~and developed land at our luxury home development, Bretton Woods. There was no inventory~~this ~~sales~~Annual ~~during~~Report ~~the~~on ~~year~~Form ~~ended December 31, 2012~~10-K.

~~Property~~Item ~~Operating Expenses~~9A. ~~Property~~Controls ~~operating expenses for the years ended December 31, 2012~~ and ~~2011 were $11~~Procedures.1 million and $11.8 million, respectively, and were comprised of expenses related to the daily operations of our properties. The decrease in property operating expenses for the year ended December 31, 2012 is primarily due to the disposal of development properties during the second quarter of 2012. We expect property operating expenses to remain constant in the near future.

~~Asset Impairment~~Evaluation ~~Loss. As a result~~ of ~~projected~~Disclosure ~~selling~~Controls ~~prices, an impairment loss of approximately $0.5 million~~ and ~~$1.4 million was recorded for the years ended December 31, 2012 and 2011, respectively, related to the land at 1221 Coit Road and the undeveloped land held in Melissa, Texas.~~Procedures

~~Inventory Valuation~~The ~~Adjustment.~~management ~~The~~of ~~inventory~~Behringer ~~valuation~~Advisors ~~adjustment~~II, ~~for~~as ~~the~~Managing ~~year~~Trustee ~~ended~~of ~~December~~the 31Liquidating Trust, ~~2011~~including ~~was~~its ~~$26.8~~Chief ~~million~~Executive Officer and ~~was~~Chief Financial ~~composed~~Officer, ~~of adjustments~~evaluated as of ~~$26.3~~December ~~million~~31, to2013 ~~adjust~~ the ~~value~~effectiveness of ~~the~~our ~~condominiums~~disclosure atcontrols ~~Cassidy~~and ~~Ridge~~procedures toas ~~their~~defined ~~fair~~in Exchange ~~value~~Act Rule 13a-15(e) and $0Rule 15d-15(e).5 ~~million~~Based ~~related to~~on that evaluation, the ~~luxury~~Chief ~~homes~~Executive Officer and ~~developed~~Chief ~~land~~Financial Officer ~~lots~~of atBehringer ~~Bretton~~Advisors ~~Woods.~~II ~~The~~concluded ~~U.S.~~that ~~housing~~our ~~market~~disclosure ~~continued~~controls toand ~~experience~~procedures, ~~its~~as ~~nationwide~~of ~~downturn~~December 31, 2013, were effective anfor ~~oversupply~~the purpose of ~~homes~~ensuring ~~available~~that ~~for~~information ~~sale,~~required ~~reduced~~to ~~availability,~~be ~~deterioration~~disclosed inby us the ~~credit~~reports ~~markets,~~filed ~~rising~~or ~~foreclosure~~submitted ~~activity,~~by us under the Exchange ~~reduced~~is ~~selling~~recorded, ~~prices~~processed, summarized and ~~relatively~~reported ~~high~~within ~~unemployment~~the ~~and~~time ~~deteriorating~~periods ~~conditions~~specified inby the ~~overall~~rules ~~economy.~~and ~~There~~forms ~~was~~of nothe ~~inventory~~Exchange Act and ~~valuation~~is ~~adjustments~~accumulated ~~during~~and communicated to the ~~year~~management ~~ended~~of ~~December~~Behringer 31Advisors II, ~~2012.~~as our Managing Trustee, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

~~Interest Expense.~~We ~~Interest expense~~believe, ~~net of amounts capitalized~~however, ~~for~~that ~~the~~a ~~years~~controls ~~ended December 31~~system, ~~2012~~no ~~and~~matter ~~2011~~how ~~was~~well ~~$3.4~~designed ~~million~~ and ~~$5.3 million~~operated, ~~respectively,~~ ~~and~~cannot ~~was~~provide ~~primarily~~absolute ~~comprised~~assurance ofthat ~~interest~~the objectives ~~expense and amortization~~ of ~~deferred financing fees. The decrease in interest expense during~~ the ~~year~~controls ~~ended~~systems ~~December~~are 31met, ~~2012~~and ~~was~~no ~~primarily~~evaluation ~~due~~of tocontrols ~~the~~can ~~disposal~~provide ofabsolute ~~development~~assurance ~~properties~~that ~~and~~all ~~the~~control ~~paydown of~~issues ~~loan~~and ~~balances.~~instances ~~Unless~~of wefraud ~~have~~or ~~additional~~error, ~~borrowings~~if ~~in the future~~any, wewithin ~~expect~~a ~~interest~~partnership ~~expense~~have tobeen ~~remain relatively constant~~detected.

~~Real Estate Taxes.~~Management’s ~~Real~~Annual ~~estate~~Report ~~taxes,~~on ~~net~~Internal ofControl ~~amounts~~Over ~~capitalized,~~Financial ~~for the years ended December 31, 2012 and 2011 were $0.9 million and $0.7 million, respectively, and were comprised of real estate taxes from each of the properties.~~Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). The Liquidating Trust’s management, including the Chief Executive Officer and Chief Financial Officer of Behringer Advisors II, as Managing Trustee of the Liquidating Trust, evaluated as of December 31, 2013 the effectiveness of our internal control over financial reporting using the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of Behringer Advisors II concluded that the Liquidating Trust’s internal controls, as of December 31, 2013, were effective in providing reasonable assurance regarding reliability of financial reporting.

~~Property and Asset~~Changes ~~Management~~in ~~Fees.~~Internal ~~Property~~Control ~~and~~Over ~~asset~~Financial management fees for years ended December 31, 2012 and 2011 were $0.8 million and $0.9 million, respectively, and were comprised of property and asset management fees from the consolidated properties. Asset management fees of approximately $50,000 were waived by Behringer Advisors II for the year ended December 31, 2011.Reporting

~~General and Administrative~~There ~~Expenses.~~has ~~General~~been ~~and~~no ~~administrative~~change ~~expenses~~in ~~for~~internal ~~the~~control ~~years~~over ~~ended~~financial ~~December 31, 2012~~reporting ~~and~~that ~~2011~~occurred ~~were~~during $1.2 million and $0.9 million, respectively. General and administrative expenses were comprised of auditing fees, transfer agent fees, tax preparation fees, directors’ and officers’ insurance premiums, legal fees, printing costs and other administrative expenses. The advisor waived reimbursement of general and administrative expenses of $0.3 million for the year ended December 31, 2013 that ~~2011.~~has ~~The liquidating~~materially ~~trust~~affected, ~~structure~~or is ~~intended~~reasonably likely to ~~reduce~~materially ~~future~~affect, ~~general~~our ~~and~~internal ~~administrative~~control ~~costs~~over financial reporting.

~~Depreciation~~Item ~~and Amortization Expense~~9B. ~~Depreciation~~Other and amortization expense for the years ended December 31, 2012 and 2011 was $1 million and $2 million, respectively, and included depreciation and amortization of buildings, furniture and equipment and real estate intangibles associated with the consolidated propertiesInformation. ~~The decrease in depreciation and amortization expense for the years ended December 31, 2012 was the result of certain furniture, fixtures and equipment becoming fully depreciated in 2011.~~

~~Gain on Troubled Debt Restructuring~~None. Gain on troubled debt restructuring for the year ended December 31, 2012 was $7.2 million and was the result of transferring ownership, through a deed in lieu of foreclosure, of Cassidy Ridge and the Palomar Residences to the respective lenders, resulting in full settlement of the outstanding debt to the lenders.

Net Income (Loss) Attributable to Noncontrolling Interest. Net income attributable to noncontrolling interest for the years ended December 31, 2012 and 2011 was $0.9 million and $1 million, respectively, and represented the other partners’ proportionate share of losses from investments in the partnerships that are consolidated.29

~~Fiscal~~PART ~~year ended December 31, 2011 as compared to the fiscal year ended December 31, 2010~~ III

~~The~~Item ~~Partnership had ownership interests in four properties and ten properties as of December 31, 2011 and 2010, respectively~~10. ~~All investments in partnerships and joint ventures were consolidated with and into the Partnership accounts. During the year ended December 31~~Directors, ~~2011,~~Executive ~~Landmark I~~Officers and IICorporate ~~and 5050 Quorum were sold and Plaza Skillman was returned to the lender~~Governance. In addition, during the year ended December 31, 2011, the remaining developed land lots and luxury homes at Bretton Woods, five previously leased condominiums as well as one model unit at the Palomar Residences were sold and the undeveloped land in Melissa, Texas was returned to the lender.

~~Continuing~~Managing ~~Operations~~Trustee

~~Rental Revenue.~~Prior ~~Rental~~to ~~revenue~~the ~~for~~Effective Date, the ~~years~~Partnership ~~ended~~operated ~~December~~under 31the direction of its General Partners, ~~2011~~Behringer Advisors II and ~~2010~~Mr. Robert ~~totaled~~M. $0Behringer.8 ~~million~~Since ~~and~~the ~~$0.7 million~~Effective Date, ~~respectively~~the Liquidating Trust operates under the direction of our Managing Trustee, ~~and~~Behringer Advisors II, which was ~~comprised~~formerly one of ~~revenue~~the General Partners. The Managing Trustee is assisted by the employees of HPT, ~~including~~the ~~adjustments~~general partner of Behringer Advisors II. We do not employ our own management personnel; instead, we pay fees and expense allocations to our Managing Trustee for ~~straight-line~~its ~~rent~~services. The Managing Trustee is responsible for the management and ~~amortization~~control of ~~above-~~our affairs, including acquisitions in the past, capital improvements, construction and ~~below-market~~property ~~leases~~management.

~~Hotel~~Our Managing ~~Revenue~~Trustee, Behringer Advisors II, is a Texas limited partnership formed in July 2002. The executive office of ~~Hotel~~Behringer ~~revenue~~Advisors II ~~for~~is ~~the~~located ~~years~~at ~~ended~~15601 ~~December~~Dallas 31Parkway, ~~2011~~Suite ~~and~~600, ~~2010~~Addison, ~~was~~Texas ~~$14~~75001.2 ~~million~~Behringer ~~and $12.7~~Advisors ~~million~~II is owned by HPT, ~~respectively~~its sole general partner, and ~~was comprised~~Behringer ofHarvard ~~revenue~~Partners, ~~generated~~LLC by(“Behringer Partners”), its sole limited partner. Behringer Holdings is the ~~hotel~~sole ~~operations~~owner of ~~Hotel~~HPT ~~Palomar.~~and ~~The~~Behringer ~~increase~~Partners. inBehringer ~~hotel~~Holdings ~~revenue~~also is ~~primarily~~the ~~due~~indirect toowner ~~the~~of ~~hotel~~our ~~hosting~~Property ~~Dallas-Fort~~Manager, ~~Worth~~Behringer ~~area~~Development ~~Super~~Company ~~Bowl~~LP, ~~events~~a inreal ~~February~~estate ~~2011~~development company, and Behringer Securities, our dealer manager.

~~Real~~Behringer ~~Estate~~Advisors ~~Inventory~~II ~~Sales~~was ~~Revenue.~~created ~~Real~~in ~~estate~~2002 ~~inventory sales revenue~~ for the ~~years ended~~sole ~~December~~purpose ~~31,~~of ~~2011~~acting ~~and~~as ~~2010~~one ~~was~~of ~~$5.6~~the ~~million~~Partnership’s ~~and~~General $1Partners.7 ~~million,~~It ~~respectively. Revenue for each year~~ is ~~primarily the result~~managed ofby ~~sales~~its ofexecutive ~~home~~officers, ~~inventory~~namely: ~~and developed land lots at Bretton Woods.~~

Property Operating Expenses. Property operating expenses for the years ended December 31, 2011 and 2010 were $11.8 million and $11.2 million, respectively, and were comprised of expenses related to the daily operations of our properties. The increase in operating expenses for the year ended December 31, 2011 is primarily due to certain costs for Cassidy Ridge no longer being capitalized as a result of construction being complete and increased activity at Hotel Palomar.

Name	Age	Position(s)
Robert S. Aisner	67	Chairman
Michael J. O’Hanlon	62	Chief Executive Officer and President
Gary S. Bresky	47	Chief Financial Officer
M. Jason Mattox	38	Executive Vice President
S. Jason Hall	47	Treasurer

~~Asset Impairment~~Robert ~~Loss~~S. AsAisner is the Chairman of Behringer Advisors II. Mr. Aisner has served as President (from May 2005 until February 2013), Chief Executive Officer (from June 2008 until May 2009 and from July 2009 until February 2013), and a ~~result~~director since June 2003 of ~~projected~~TIER ~~selling~~REIT, ~~prices~~(formerly Behringer Harvard REIT I, anInc). ~~asset~~In ~~impairment~~addition, ~~loss~~Mr. Aisner serves as Chairman (since January 2013) and a director (since June 2006) of ~~approximately~~Behringer $1Harvard Opportunity REIT I.~~4 million~~ ~~was~~Mr. ~~recognized~~Aisner also has served as Chairman (since January 2013) ~~for~~and ~~the~~a ~~year~~director ~~ended~~(since ~~December~~January ~~31,~~2007) ~~2011~~of ~~related~~Behringer toHarvard ~~the~~Opportunity ~~undeveloped~~REIT ~~land~~II ~~held~~and inas ~~Melissa~~Chief Executive Officer and a director of Behringer Harvard Multifamily REIT since August 2006. Furthermore, ~~Texas~~Mr. ~~There~~Aisner ~~was~~serves noas ~~asset~~a ~~impairment~~Class ~~loss~~II Director of Priority Senior ~~during~~Secured ~~the~~Income ~~year~~Fund, ~~ended~~Inc., ~~December 31~~a closed-end management investment company jointly advised by Behringer Holdings and Prospect Capital Management, ~~2010~~ LLC. Mr. Aisner is also Chief Executive Officer and President of other Behringer companies.

~~Inventory Valuation Adjustment~~Mr. Aisner ~~The~~has ~~inventory~~over ~~valuation~~30 ~~adjustments~~years ~~for~~of ~~the~~commercial ~~years~~real ~~ended~~estate ~~December~~experience 31with acquiring, ~~2011~~managing and ~~2010~~disposing ~~were~~of ~~$26.8~~properties ~~million~~located in the United States and $1other countries, including Germany, the Netherlands, England, the Bahamas and Australia.9 From 1996 until ~~million~~joining TIER REIT in 2003, ~~respectively~~Mr. ~~The~~Aisner ~~inventory~~served ~~valuation~~as ~~adjustment~~(i) ~~for~~Executive ~~the~~Vice ~~year~~President ~~ended~~of ~~December 31~~AMLI Residential Properties Trust, ~~2011~~ ~~was~~formerly ~~composed~~a New York Stock Exchange listed REIT that focused on the development, acquisition and management of ~~adjustments~~upscale apartment communities, ofwhich ~~$26.3~~serves ~~million~~as advisor and asset manager for institutional investors with respect to ~~adjust~~their multifamily real estate investment activities, (ii) President of AMLI Management Company, that oversees all of AMLI’s apartment operations in 80 communities, (iii) President of the ~~value~~AMLI Corporate Homes division that manages AMLI’s corporate housing properties, (iv) Vice President of AMLI Residential Construction, a division of AMLI that performs real estate construction services, and (v) Vice President of AMLI Institutional Advisors, the ~~condominiums~~AMLI atdivision ~~Cassidy~~that ~~Ridge~~serves as institutional advisor and asset manager for institutional investors with respect to their ~~fair~~multifamily ~~value~~real estate activities. Mr. Aisner also served on AMLI’s Executive Committee and $0Investment Committee from 1999 until 2003.5 ~~million~~From ~~related~~1994 tountil ~~the~~1996, Mr. Aisner owned and operated Regents Management, Inc., which had both a ~~luxury~~multifamily ~~homes~~development and ~~developed~~construction ~~land~~group, ~~lots~~and ata ~~Bretton~~general ~~Woods~~commercial property management group. ~~Inventory~~From ~~valuation~~1984 ~~adjustments~~to ~~for~~1994, ~~the~~he ~~year~~was employed ~~ended~~by ~~December~~HRW 31Resources, ~~2010~~Inc., ~~were composed~~a ofreal ~~non-cash~~estate ~~adjustments~~development toand ~~reduce~~management ~~the~~company, ~~carrying~~where ~~value~~he served as Vice President. Mr. Aisner received a Bachelor of ~~the~~Arts ~~luxury~~degree ~~homes~~from Colby College and ~~developed~~a ~~land~~Masters ~~lots~~of atBusiness ~~Bretton~~Administration ~~Woods~~degree ~~to their~~from ~~estimated~~the ~~fair~~University ~~value~~of New Hampshire.

Interest Expense. Interest expense for the years ended December 31, 2011 and 2010 was $5.3 million and $2.2 million, respectively, and was comprised of interest expense and amortization of deferred financing fees related to the notes associated with the acquisition and development of our consolidated properties. The increase in interest expense during the year ended December 31, 2011 is primarily due to interest costs for Cassidy Ridge no longer being capitalized as a result of the construction being completed and the accrual of default interest on certain matured loans during the period. The Partnership capitalized interest costs of $0.7 million and $2.2 million for Cassidy Ridge during the years ended December 31, 2011 and 2010, respectively.30

32Michael J. O’Hanlon has served as Chief Executive Officer and President of Behringer Advisors II since January 2012. Mr. O’Hanlon has also served as Chief Executive Officer and President of several other Behringer-sponsored programs, including Behringer Harvard Opportunity REIT I and Behringer Harvard Opportunity REIT II, since January 2012. In addition, Mr. O’Hanlon has served as a director of Behringer Harvard Opportunity REIT I and Behringer Harvard Opportunity REIT II since February 2013. From September 2010 to December 2011, Mr. O’Hanlon was President and Chief Operating Officer of Billingsley Company, a major Dallas, Texas-based owner, operator and developer that has interests in commercial office, industrial, retail, and multifamily properties. From November 2007 to October 2009, Mr. O’Hanlon served as Chief Executive Officer and President for Inland Western Retail Real Estate Trust, Inc., a public non-traded REIT, where he was responsible for an $8.5 billion national retail and office portfolio consisting of 335 properties and 51 million square feet. From January 2005 to October 2007, Mr. O’Hanlon served as head of Asset Management for Inland Real Estate Group of Companies. In total, Mr. O’Hanlon has over 30 years of management experience with public and private firms with commercial real estate portfolios, with a broad range of responsibilities including overseeing acquisitions, dispositions, restructurings, joint ventures and capital raising, and with experience with a diverse group of real estate-related investments including multifamily and debt-related investments. Mr. O’Hanlon received a Masters of Business Administration, Finance-Money and Financial Markets degree from Columbia University Graduate School of Business. Mr. O’Hanlon has also received a Bachelor of Science, Accounting degree from Fordham University. Mr. O’Hanlon has served and been an active member of the Real Estate Roundtable, NAREIT, ICSC and ULI.

~~Real~~Gary S. ~~Estate~~Bresky ~~Taxes~~is the Chief Financial Officer of Behringer Advisors II. Mr. Bresky also serves as Executive Vice President and ~~Real~~Chief ~~estate~~Financial ~~taxes~~Officer ~~for~~or ~~the~~in ~~years~~similar ~~ended~~executive ~~December~~capacities 31with other entities sponsored by Behringer Holdings, ~~2011~~including ~~and~~Behringer Harvard ~~2010~~Advisors ~~were~~I ~~$0.7~~LP, ~~million~~the ~~and~~managing $0trustee of Behringer Harvard Mid-Term Value Enhancement Liquidating Trust.~~8 million,~~ ~~respectively,~~He ~~and~~previously served ~~were~~as ~~comprised~~Chief Financial Officer of ~~real~~TIER ~~estate~~REIT ~~taxes~~(from June 2002 to May 2009), Behringer Harvard Opportunity REIT I (from ~~each~~November of2004 to ~~the~~November ~~properties~~2010), Behringer Harvard Opportunity REIT II (from January 2007 to November 2010) and Behringer Harvard Multifamily REIT I (from August 2006 to September 2009).

~~Property~~Mr. Bresky has ~~and~~been ~~Asset Management~~active ~~Fees.~~in ~~Property~~commercial real estate and ~~asset~~related ~~management~~financial ~~fees~~activities for ~~the~~over 20 years. ~~ended~~Prior ~~December 31~~to his employment with Behringer Advisors II, ~~2011~~Mr. ~~and~~Bresky ~~2010~~served ~~were~~as $0Senior Vice President of Finance with Harvard Property Trust, Inc.9 ~~million and~~from $01997 to 2001.7 ~~million~~In this capacity, ~~respectively~~Mr. ~~Asset~~Bresky ~~management~~was ~~fees~~responsible offor ~~approximately~~directing ~~$50,000~~all accounting and ~~$65,000~~financial ~~were~~reporting ~~waived~~functions byand ~~Behringer~~overseeing ~~Advisors~~all IItreasury management and banking functions for the ~~years~~company. ~~ended~~Mr. ~~December~~Bresky ~~31,~~also ~~2011~~was integral in analyzing deal and ~~2010,~~capital ~~respectively~~structures as well as participating in all major decisions related to any acquisition or sale of assets.

~~General and Administrative Expenses~~Mr. Bresky ~~General~~holds ~~and~~FINRA ~~administrative~~Series ~~expenses~~7, ~~for the years ended December 31~~24, ~~2011~~27 and ~~2010~~63 ~~were $0~~registrations.9 ~~million and $1~~Mr.~~1 million,~~ ~~respectively.~~Bresky ~~General~~received ~~and~~a ~~administrative~~Bachelor ~~expenses were comprised~~ of ~~auditing~~Arts ~~fees,~~degree ~~transfer~~from ~~agent~~the ~~fees,~~University ~~tax preparation~~of ~~fees,~~California ~~directors’~~– ~~and~~Berkeley ~~officers’ insurance premiums, legal fees, printing costs~~ and ~~other~~a ~~administrative~~Masters ~~expenses. The advisor waived reimbursement~~ of ~~general~~Business ~~and~~Administration ~~administrative~~degree ~~expenses~~from ~~of $0.3 million and $0.4 million for~~ the ~~years~~University ~~ended December~~of ~~31,~~Texas ~~2011~~at ~~and 2010, respectively~~Austin.

~~Depreciation and~~M. ~~Amortization~~Jason ~~Expense.~~Mattox ~~Depreciation~~is ~~and amortization expense for~~ the ~~years~~Executive ~~ended~~Vice ~~December 31, 2011~~President ~~and~~of ~~2010~~Behringer ~~was~~Advisors ~~$2 million~~II and ~~$2.2~~serves ~~million,~~in ~~respectively,~~a ~~and~~similar ~~includes~~capacity ~~depreciation~~with ~~and~~other ~~amortization~~Behringer companies. ofFrom ~~buildings,~~2002 ~~furniture~~until ~~and~~March ~~equipment~~2006, ~~and real~~Mr. ~~estate~~Mattox ~~intangibles~~served ~~associated~~as ~~with~~ the ~~wholly-owned~~Senior ~~properties~~Vice ~~and~~President ~~investments~~of inBehringer ~~partnerships~~Advisors II.

~~Net~~From 1997 ~~Loss~~until ~~Attributable to~~joining ~~Noncontrolling~~Behringer ~~Interest.~~Advisors ~~Net~~II ~~loss~~in ~~attributable~~2002, toMr. ~~noncontrolling~~Mattox ~~interest~~served ~~for~~as ~~the~~a ~~years~~Vice ~~ended~~President ~~December~~of 31Harvard Property Trust, ~~2011~~Inc. and ~~2010~~became ~~was~~a $1member ~~million~~of its Investment Committee in 1998. From 1999 until 2001, Mr. Mattox served as Vice President of Sun Resorts International, Inc., a recreational property investment company, coordinating marina acquisitions throughout the southern United States and $1the U.4S. ~~million~~Virgin Islands. From 1999 until 2001, ~~respectively~~in addition to providing services related to investing, acquisition, disposition and operational ~~represents~~activities, ~~the~~Mr. ~~other~~Mattox ~~partners’~~served ~~proportionate~~as ~~share~~an ofasset ~~losses~~manager ~~from~~with ~~investments~~responsibility for over one million square feet of Harvard Property Trust, Inc.’s commercial office assets in ~~the~~Texas ~~partnerships~~and ~~that~~Minnesota, ~~are~~overseeing ~~consolidated~~property performance, management offices, personnel and outsourcing relationships.

~~Cash~~Mr. Mattox ~~Flow~~is ~~Analysis~~a continuing member of the Building Owners and Managers Association and the National Association of Industrial and Office Properties. Mr. Mattox holds FINRA Series 7, 24 and 63 registrations. Mr. Mattox received both a Bachelor of Business Administration degree, with honors, and a Bachelor of Science degree, cum laude, from Southern Methodist University.

~~Fiscal~~S. Jason ~~year~~Hall ~~ended~~is ~~December~~Treasurer 31of Behringer Advisors II and, ~~2012~~in such capacity, Mr. Hall served as ~~compared~~principal accounting officer of the Partnership and now serves as principal accounting officer of the Liquidating Trust. Mr. Hall also serves as the Chief Accounting Officer and Treasurer for Behringer Harvard Opportunity REIT II and is responsible for its accounting and financial reporting. He has held the position of Director of Financial Reporting for other Behringer-sponsored programs since 2010. Mr. Hall joined Behringer in 2005 as SEC Reporting Manager. From 2000 to 2004, he served in a number of accounting positions, including Corporate Controller from 2003 to 2004, at Aegis Communications Group, Inc., then publicly traded on NASDAQ and the ~~fiscal~~nation’s seventh ~~year~~largest ~~ended~~provider ~~December~~of 31outsourced customer care services. Prior to joining Aegis Communications Group, ~~2011~~Mr. Hall spent five years as Corporate Controller for a private distribution company and three years in public accounting. Mr. Hall is a certified public accountant in the state of Texas and received a Bachelor of Business Administration in Finance from Angelo State University and a Master of Business Administration from Tarleton State University.

~~Cash used in operating~~Other ~~activities~~Personnel for the year ended December 31, 2012 was $7.4 million and was comprised primarily of net income of $16.7 million, adjusted for the gain on the sale of discontinued operations of $15.6 million, the gain on troubled restructuring of $8 million, changes in operating assets and liabilities of $3.2 million, offset by depreciation and amortization of $2.5 million. Cash used in operating activities for the year ended December 31, 2011 was $2.5 million and was comprised primarily of the net loss of $50.2 million, adjusted for asset impairment charges of $21.8 million, inventory valuation adjustments of $26.8 million, which was primarily composed of adjustments to the development of the condominiums at Cassidy Ridge, changes in operating assets and liabilities of $6.4 million and depreciation and amortization of $5.6 million offset by gains on troubled debt restructuring of $12.8 million.

~~Cash provided by investing~~The ~~activities~~Managing ~~for~~Trustee, ~~the~~Behringer ~~year~~Advisors ~~ended December 31~~II, ~~2012~~is ~~was~~assisted ~~$46~~by ~~million~~the officers and ~~was~~employees ~~primarily comprised~~ of ~~proceeds from the sale of 1221 Coit Road~~HPT, ~~250/290~~which ~~John~~is ~~Carpenter Freeway and condominiums at~~ the ~~Palomar~~general ~~Residences.~~partner ~~Cash~~of ~~provided by investing activities for~~Behringer ~~the~~Advisors II. ~~year~~HPT ~~ended December 31, 2011 was $23 million~~ and ~~was~~its ~~primarily~~affiliates ~~comprised~~will ofcontinue ~~proceeds~~to ~~from~~hire ~~the~~employees ~~sale~~as ~~of assets including Landmark I & II and 5050 Quorum~~needed.

~~Cash used in financing~~Advisory activities for the year ended December 31, 2012 was $36.6 million and consisted primarily of payments on notes payable, net of proceeds. Cash used in financing activities for the year ended December 31, 2011 was $19.2 million and consisted primarily of payments on the notes payable, net of proceeds, of $22.3 million offset by contributions from the General Partners of $3.7 million.Board

~~Fiscal~~The Liquidating ~~year~~Trust ~~ended December~~does ~~31,~~not ~~2011~~have asa ~~compared~~board toof ~~the~~directors. ~~fiscal~~The ~~year~~Partnership’s ~~ended~~General ~~December~~Partners were initially assisted by an advisory board, which was dissolved on March 31, ~~2010~~2008.

~~Cash used in operating activities for the year ended December~~ 31, 2011 was $2.5 million and was comprised primarily of the net loss of $50.2 million, adjusted for asset impairment charges of $21.8 million, inventory valuation adjustments of $26.8 million, which was primarily composed of adjustments to the development of the condominiums at Cassidy Ridge, changes in operating assets and liabilities of $6.4 million and depreciation and amortization of $5.6 million offset by gains on troubled debt restructuring of $12.8 million. Cash used in operating activities for the year ended December 31, 2010 was $17.8 million and was comprised primarily of the net loss of $18.7 million, adjusted for depreciation and amortization of $7.4 million, asset impairment loss of $5.1 million, inventory valuation adjustments of $1.9 million and the increase in real estate inventory of $14.2 million, which was primarily composed of development of the condominiums at Cassidy Ridge.

~~Cash provided by investing~~No ~~activities~~Audit ~~for~~Committee; ~~the~~No ~~year~~“Audit ~~ended~~Committee ~~December~~Financial 31, 2011 was $23 million and was primarily comprised of proceeds from the sale of assets including Landmark I & II and 5050 Quorum. Cash used in investing activities for the year ended December 31, 2010 was $1.2 million and was comprised of capital expenditures for real estate of $0.7 million and change in restricted cash of $0.5 million.Expert”

~~Cash~~The Liquidating ~~used~~Trust indoes ~~financing activities~~not, ~~for~~nor did the ~~year~~Partnership ~~ended~~as ~~December 31~~predecessor, ~~2011~~have ~~was~~a ~~$19.2~~board ~~million and consisted primarily~~ of ~~payments~~directors ~~on the notes payable~~and, ~~net of~~as ~~proceeds~~such, ofhas ~~$22.3~~no ~~million~~board ~~offset~~committees such byas ~~contributions~~an ~~from~~audit ~~the General Partners of $3~~committee.~~7 million.~~ ~~Cash~~Because ~~provided~~we bydo ~~financing activities~~not ~~was~~have ~~$19.0~~an ~~million~~audit incommittee, ~~2010~~we ~~and~~do ~~consisted~~not ~~primarily~~have ofan ~~proceeds~~“audit ~~from~~committee ~~notes~~financial ~~payable,~~expert.” The ~~net~~Managing ofTrustee ~~payments,~~is ofresponsible ~~$12.1~~for ~~million and~~managing ~~contributions~~the ~~from~~relationship ~~the~~with ~~General~~our ~~Partners~~independent ofregistered $7public ~~million~~accounting firm.

33Section 16(a) Beneficial Ownership Reporting Compliance

~~Liquidity~~Section 16(a) of the Exchange Act requires each director, officer, and ~~Capital~~individual ~~Resources~~beneficially owning more than 10% of a registered security of the Partnership to file with the SEC reports of security ownership and reports on subsequent changes in ownership of their securities within specified time frames. These specified time frames require the reporting of changes in ownership within two business days of the transaction giving rise to the reporting obligation. Reporting persons are required to furnish the Partnership with copies of all Section 16(a) forms filed with the SEC. Based upon our review of the reports furnished to the Partnership pursuant to Section 16(a) of the Exchange Act, to the best of our knowledge, all required Section 16(a) filings with respect to the securities of the Partnership were timely and correctly made by reporting persons during 2013 prior to the Effective Date when the Partnership filed a Form 15 with the SEC to terminate the registration of its limited partnership under the Exchange Act.

~~The effects of the~~Code ~~recent economic downturn caused the Partnership to reconsider their strategy for certain properties where the Partnership believed the principal balance~~ of the debt encumbering the property exceeded the value of the asset under current market conditions. In those cases where the Partnership believed the value of a property was not likely to recover in the near future, it believed there were more effective uses for its capital, and as a result debt service payments on certain property debt was ceased, resulting in defaults or events of default under the related loan agreements. The Partnership was in active negotiations with certain lenders to refinance or restructure debt in a manner that it believed was the best outcome for them and the unitholders and it resolved some of these recourse loans by negotiating agreements conveying the properties to the lender as it did with two properties during the year ended December 31, 2012 and two properties during the year ended December 31, 2011. There is no guarantee that we will not have to negotiate agreements conveying properties to lenders in the future.Ethics

~~The~~Behringer ~~Partnership’s~~Advisors ~~cash~~II, ~~and~~both ~~cash~~formerly ~~equivalents~~as ~~were~~a ~~$5.3~~General ~~million~~Partner atof ~~December~~the ~~31,~~Partnership ~~2012.~~and ~~Our~~now ~~principal~~as ~~demands~~Managing ~~for~~Trustee ~~funds~~of in the ~~next~~Liquidating ~~twelve~~Trust, ~~months~~adopted a ~~and~~code ~~beyond~~of ~~will~~ethics beapplicable ~~for~~to ~~the~~its ~~payment~~principal ofexecutive ~~operating expenses~~officer, ~~costs~~principal ~~associated~~financial ~~with~~officer, ~~lease-up~~principal ~~and~~accounting ~~capital~~officer, ~~improvements~~controller ~~for~~and ~~our~~other ~~remaining~~employees. ~~operating~~A ~~property~~copy ~~and~~of ~~for~~ the ~~payment~~code of ~~recurring~~ethics ~~debt~~of ~~service,~~Behringer ~~further~~Advisors ~~principal~~II ~~paydowns~~may ~~and~~be ~~reserve~~obtained ~~requirements on~~from our ~~outstanding~~web ~~indebtedness~~site asat ~~required by our lenders~~http://www. behringerinvestments.com. The ~~timing~~website ~~and amount of cash distributed to beneficial interest unitholders~~ will be ~~determined~~updated byto ~~the~~include ~~Managing~~any ~~Trustee~~material ~~and~~waivers ~~will~~or bemodifications ~~dependent~~to onthe acode ~~number~~ of ~~factors, including funds available for payment of distributions, financial condition and capital expenditures~~ethics.

InItem order to provide additional liquidity and execute the Partnership’s plan of selling assets and winding up operations over the next three years, it sold 1221 Coit Road and 250/290 John Carpenter Freeway during the year ended December 31, 201211. ~~Proceeds~~Executive ~~from the sale of these properties were used to fully satisfy the existing indebtedness associated with the properties and pay down additional liabilities of the fund~~Compensation. As a result of current liquidity needs and unstable credit market conditions limiting available resources through additional borrowings for a closed-end, finite life fund, we may have to sell a property under terms that are less advantageous than we could achieve with a longer holding period. However, there can be no assurance these future dispositions will occur, or, if they occur, that they will help us to achieve our liquidity objectives.

~~The~~Prior to the Effective Date, the Partnership ~~had notes~~operated ~~payable~~under ~~totaling~~the ~~$41~~direction of its General Partners.1 ~~million~~Since atthe ~~December~~Effective 31Date, ~~2012~~the Liquidating Trust operates under the direction of ~~which~~our ~~$31~~Managing ~~million~~Trustee, Behringer Advisors II, which was ~~secured~~formerly byone of the ~~hotel~~General ~~property~~Partners. As Weof ~~may~~December ~~use~~31, ~~proceeds~~2013, neither, the Partnership or the Liquidating Trust made any payments to Mr. Behringer as compensation ~~from~~for serving as General Partner of the ~~prior~~Partnership. ~~disposition~~The officers and employees of ~~properties~~HPT assist the Managing Trustee. The officers and employees of HPT do not devote all of their time to ~~continue~~managing ~~making~~us, and they do not receive any compensation from us for their services. We pay fees to our ~~scheduled~~Managing ~~debt~~Trustee, ~~service~~Behringer ~~payments~~Advisors ~~until~~II, and its other affiliates, as provided for in our Liquidating Trust Agreement, which fees are the ~~maturity~~same ~~dates~~as ofthose paid by the Partnership to Behringer Advisors II as General Partner. We do not ~~loans~~directly ~~are~~compensate ~~extended~~the executive officers of our Managing Trustee, nor do we reimburse our Managing Trustee for compensation paid to the ~~loans~~executive ~~are~~officers, ~~refinanced~~for orservices rendered to us. Reimbursement for the ~~outstanding~~costs ~~balances~~of salaries and benefits of the ~~loans~~employees of ~~are~~our ~~completely~~Managing Trustee relate to compensation paid ~~off.~~to ~~There~~the isManaging noTrustee’s ~~guarantee~~ employees that weprovide ~~will~~services beto ~~able~~us such as accounting, administrative or legal, for which our Managing Trustee or its affiliates are not entitled to ~~refinance~~a separate fee. Accordingly, we do not have, and our ~~borrowings~~Managing ~~with~~Trustee ~~more~~has not considered, a compensation policy or ~~less~~program ~~favorable~~for ~~terms~~itself, its affiliates, any of its employees or ~~extend~~any ~~the~~employees ~~maturity~~of ~~dates~~affiliates of ~~such~~our ~~loans~~Managing Trustee and we have not included a Compensation Discussion and Analysis in this Annual Report on Form 10-K. See “Item 13. Certain Relationships and Related Transactions, and Director Independence” for a description of the fees payable and expenses reimbursed to our affiliates.

~~The~~Item Mockingbird Commons Partnership entered into a promissory note payable to CULS, an unaffiliated third party, whereby the borrower was permitted to borrow up to $34 million (“Palomar Residences Loan Agreement”) to construct the Palomar Residences12. ~~The~~Security ~~borrower~~Ownership ~~did not pay the outstanding principal balance, together with all accrued, but unpaid interest due on the maturity date~~ of ~~October 1,~~Certain ~~2011,~~Beneficial asOwners the Partnership continued to negotiate with the lender. In December 2011, the parties had negotiated a recapitalization of the Palomar Residences Loan Agreement; however, the transaction ultimately was not approved by the credit union regulator and ~~could~~ ~~not~~Management ~~be completed. Subsequently, on January 5, 2012, the borrower received notice from the lender demanding immediate payment of the entire outstanding loan balance~~ and ~~all~~Related ~~accrued~~Stockholder ~~but unpaid interest~~Matters. The note was subsequently sold to the Mockingbird Lender on April 18, 2012. On June 8, 2012, the borrower entered into a Deed in Lieu of Foreclosure Agreement with the Mockingbird Lender whereby ownership of the Palomar Residences was transferred to the lender, resulting in full settlement of the outstanding debt. The outstanding principal balance under the Palomar Residences Loan Agreement, which was recourse to the Partnership, was approximately $19.4 million at June 8, 2012.

~~Behringer Harvard~~We ~~Mountain~~do ~~Village,~~not ~~LLC~~have ~~entered~~any ~~into~~officers ~~the~~or ~~Cassidy Ridge Loan Agreement to construct Cassidy Ridge~~directors. The ~~outstanding~~Partnership’s ~~principal~~two ~~balance, together~~General ~~with all accrued~~Partners, ~~but~~Mr. ~~unpaid~~Behringer ~~interest was due~~ and ~~payable~~Behringer onAdvisors ~~the maturity date of October 1~~II, ~~2011, which amount was not~~ ~~paid~~each asowned ~~the~~50% ~~Partnership~~of ~~continued to negotiate with~~ the ~~lender.~~general Inpartnership ~~December 2011,~~interests ~~the parties had negotiated a recapitalization~~ of the ~~Cassidy~~Partnership. ~~Ridge~~Behringer ~~Loan~~Advisors ~~Agreement; however~~II, ~~the~~in ~~transaction~~its ~~ultimately~~capacity ~~was~~as ~~not~~our ~~approved by the credit union regulator and could~~Managing ~~not be completed. Subsequently~~Trustee, ondoes ~~January 5,~~not ~~2012,~~own ~~the~~any ~~borrower~~beneficial ~~received~~interest ~~notice~~in ~~from~~ the ~~lender~~Liquidating ~~demanding immediate payment of the entire outstanding principal balance of $27~~Trust.~~7 million~~ ~~and~~We ~~all~~do ~~accrued~~not ~~but~~maintain ~~unpaid~~any ~~interest.~~equity ~~On May~~compensation 17plans, ~~2012, the borrower entered into a Deed in Lieu of Foreclosure Agreement with CULS whereby ownership of Cassidy Ridge was~~and ~~transferred~~no toarrangements ~~the~~exist ~~lender,~~that ~~resulting in full settlement of the outstanding debt. The loan~~would, ~~which~~upon ~~was recourse to the Partnership~~operation, ~~had~~ anresult ~~outstanding~~in ~~principal~~a ~~balance~~change ofin ~~approximately $28~~control.~~4 million at May 17, 2012.~~

34The following table sets forth information as of March 19, 2014 regarding the beneficial ownership of units of our beneficial interest by each person known by us to own 5% or more of the outstanding beneficial interests, each of our directors or the directors of our Managing Trustee, each of our executive officers or the executive officers of our Managing Trustee, and our directors and executive officers, or the directors and executive officers of our Managing Trustee, as a group. The percentage of beneficial ownership is calculated based on 10,803,839 units of beneficial interest.

On August 16, 2012, 1221 Coit Road was sold for a contract sales price of $20.0 million and on August 17, 2012 250/290 John Carpenter was sold for a contract sales price of $22.8 million. Proceeds from the sales of these properties were used to fully satisfy the existing indebtedness associated with the properties and additional liabilities of the fund.32

On December 20, 2012 the Mockingbird Commons Partnership entered into a promissory note agreement with Great American Life Insurance Company (“Palomar Lender”) to borrow $31 million (the “Hotel Palomar Loan”). Proceeds from the loan and additional cash were used to pay off the outstanding principal balance of a $31.6 million note with Bank of America and all associated closing costs. The Hotel Palomar Loan bears interest at a fixed rate of 5.75% per annum and requires monthly payments of interest only during the first 18 months with 30-year amortization thereafter. The loan, which matures on December 19, 2015, contains two one year extension options if certain conditions are met and does not allow prepayment in whole or in part during the first 12 months. Prepayment in whole (but not in part) from months 13 through 30 will include a yield maintenance premium as defined under the terms of the loan. The Hotel Palomar Loan is secured by the associated property. We have guaranteed payment of certain recourse liabilities with respect to certain customary nonrecourse carveouts in favor of the Palomar Lender with respect to the loan.

		Beneficial Interest		Percent
		Units Beneficially		of
Title of Class	Beneficial owner	Owned		Class
Beneficial interest	Behringer Harvard Advisors II LP (1)(3)		-		*
Beneficial interest	Robert S. Aisner (1)(2)		386.74		*
Beneficial interest	Michael J. O'Hanlon (1)(2)		-		*
Beneficial interest	Gary S. Bresky (1)(2)		-		*
Beneficial interest	M. Jason Mattox (1)(2)		-		*
Beneficial interest	S. Jason Hall (1)(2)		-		*
Beneficial interest	All current executive officers as a group (5 persons)		386.74		*

On*Denotes ~~March~~less ~~29,~~than 2011, the Partnership entered into the Fifth Amended and Restated Promissory Note to amend the terms of a loan from Behringer Holdings (the “BHH Loan”) to a maximum borrowing amount of $25 million with all borrowings and accrued interest due on March 29, 2014. The outstanding principal balance under the BHH Loan at December 31, 2012 and December 31, 2011 was $8.8 million and $11.1 ~~million, respectively. Borrowings under the BHH Loan are being used principally to finance general working capital and capital expenditures. The BHH Loan is unsecured, has an interest rate of 5.0~~% per annum and requires no monthly payments of interest or principal. On July 5, 2012 the Partnership entered into the Note Modification Agreement and Assignment of Proceeds with Behringer Holdings whereby the maturity date of the BHH Loan was extended to May 31, 2014. In order to secure payment of the BHH Loan, the Partnership assigned net proceeds from the sale of 1221 Coit Road, 250/290 John Carpenter Freeway and the back-end promoted interest in distributable cash related to Landmark I & II and 5050 Quorum properties which were sold in 2011. On November 9, 2012 the Partnership entered into the Pledge and Security Agreement with Behringer Holdings whereby net proceeds from the sale of the remaining real estate and the remaining land at 1221 Coit Road, as well as the net proceeds previously assigned under the Note Modification Agreement and Assignment of Proceeds, were pledged as security for the payment of all obligations owed to Behringer Holdings or its subsidiaries, including principal, interest, fees or reimbursement of expenses. Unless approved, net proceeds from the sale of real estate, if not reinvested in remaining properties, are to be remitted to Behringer Holdings within 365 days of the sale. On December 28, 2012 the Partnership remitted net proceeds of $6 million to Behringer Holdings and its subsidiaries to completely payoff the BHH Cassidy Ridge Loan and for payment of fees, expenses, interest and principal on the BHH Loan.

~~While~~(1) ~~there~~The ~~have~~address ~~been signs~~ of ~~improvement in the overall economy, management does not expect conditions to improve significantly in the near future~~Messrs. As ~~a result~~Aisner, ~~we expect that we may continue to require this liquidity support from our Sponsor during 2013. Our Sponsor~~O’Hanlon, ~~subject to its approval~~Bresky, ~~may make available to us additional funds under the BHH Loan through 2013~~Mattox, ~~potentially~~Hall upand toBehringer ~~the~~Advisors ~~borrowing~~II ~~limits thereunder. There~~ is no15601 ~~guarantee~~Dallas ~~that~~Parkway, ~~our~~Suite ~~Sponsor~~600, ~~will~~Addison, ~~provide~~Texas ~~additional liquidity to us~~75001.

On(2) ~~October~~Messrs. 1Aisner, ~~2010~~O’Hanlon, ~~Behringer~~ ~~Harvard Mountain Village~~Bresky, ~~LLC~~Mattox ~~entered~~and ~~into~~Hall aare ~~loan~~Executive ~~with~~Officers ~~Behringer Harvard Holdings, LLC (the “BHH Cassidy Ridge Loan”). Proceeds from the loan were used to complete construction~~ of ~~the~~our ~~condominiums~~Managing ~~at Cassidy Ridge. The loan bears interest at 5% and matured on October 1~~Trustee, ~~2011.~~Behringer ~~The~~Advisors ~~Partnership completely paid off the outstanding principal of $0~~II.~~9 million and all accrued but unpaid interest on the loan on December 28, 2012.~~

~~The~~(3) ~~Hotel~~Behringer ~~Palomar Loan~~Harvard ~~requires~~Advisors ~~payments~~II of interest only during the first 18 months with 30-year amortization thereafter. Our remaining loans accrue interest that may be paid at any time. Further, the loan agreements stipulate that the Partnership comply with certain reporting and financial covenants. These covenants include, among other things, notifying the lender of any change in management and maintaining certain loan to value ratios. The Hotel Palomar Loan is ~~secured~~our byManaging ~~the associated real property and we have guaranteed payment of certain recourse liabilities with respect to certain customary nonrecourse carveouts in favor of the Palomar Lender~~Trustee. ~~At December 31, 2012 the Partnership or its subsidiaries were in default under loans made by the Mockingbird Commons Partnership noncontrolling interest partner in the amount of $1.3 million.~~

OnItem February 11, 2013, the Partnership’s sole remaining General Partner elected to liquidate the Partnership and transfer its remaining assets and liabilities to the Liquidating Trust as a cost saving alternative that the General Partners believed to be in the best interests of the investors13. ~~The~~Certain ~~expenses~~Relationships ~~associated with operating a public reporting entity, like the Partnership, are comparatively high~~ and ~~therefore~~Related detract from distributable proceeds and returns it can make to its investors. The reorganization into a liquidating trust enables us to reduce costs associated with public reporting obligations and related audit expenses that are not applicable to the Liquidating TrustTransactions, ~~helping to preserve capital throughout our disposition phase for the benefit of our investors. Cutting expenses~~ and ~~maximizing~~Director ~~investor returns is our primary focus~~Independence.

35Transactions with Related Persons

~~Net~~The Managing ~~Operating~~Trustee ~~Income~~and certain of its affiliates are entitled to receive fees and compensation in connection with the management and sale of our assets, which fees are the same as those previously paid by the Partnership to Behringer Advisors II as General Partner. In its former capacity as General Partner of the Partnership, Behringer Advisors II and certain of its affiliates have also received fees in the past in connection with the Partnership’s Offering and acquisitions.

~~Net~~For the ~~operating~~management ~~income~~and leasing of our properties, we pay the Property Manager property management and leasing fees equal to the lesser of: (~~“NOI”~~a) the isamounts acharged ~~non-GAAP~~by ~~financial~~unaffiliated ~~measure~~persons ~~that~~rendering iscomparable ~~defined~~services asin ~~total~~the ~~revenue~~same ~~less~~geographic ~~property~~area ~~operating~~or ~~expenses,~~(b)(1) ~~real estate~~for ~~taxes,~~commercial ~~property~~properties ~~management~~that ~~fees~~are ~~and~~not ~~the~~leased ~~cost~~on ofa ~~real~~long-term ~~estate~~net ~~inventory~~lease ~~sales~~basis, 4.5% ~~Management~~of ~~believes~~gross ~~that~~revenues, ~~NOI~~plus ~~provides~~separate anleasing ~~accurate measure~~fees of up ~~the~~to ~~operating~~1.5% ~~performance~~ of ~~our~~gross ~~operating~~revenues ~~assets~~based ~~because~~upon ~~NOI~~the ~~excludes~~customary ~~certain~~leasing ~~items~~fees ~~that~~applicable ~~are~~to ~~not~~the ~~associated~~geographic ~~with~~location ~~management~~ of the properties., ~~NOI~~and (2) in ~~should~~the ~~not~~case beof ~~considered~~commercial asproperties anthat ~~alternative~~are toleased on a long-term net ~~income~~lease basis (~~loss~~ten or more years), or1% anof ~~indication~~gross revenues plus a one-time initial leasing fee of ~~our~~3% ~~liquidity.~~of ~~NOI is~~gross ~~not~~revenues ~~indicative~~payable over the first five years of ~~funds~~the ~~available~~lease toterm. ~~meet~~We reimburse the costs and expenses incurred by our ~~cash~~Property ~~needs~~Manager oron our ~~ability~~behalf, toincluding ~~make~~the ~~distributions~~wages and ~~should~~salaries beand ~~reviewed~~other ~~in connection~~employee-related ~~with~~expenses ~~other~~of ~~GAAP~~all ~~measurements.~~on-site Toemployees ~~facilitate~~who ~~understanding~~are ofengaged ~~this~~in ~~financial~~the ~~measure~~operation, amanagement, ~~reconciliation~~maintenance ofand ~~NOI~~leasing toor ~~net~~access ~~loss~~control ~~attributable~~of our toproperties, ~~the~~including ~~Partnership~~taxes, ininsurance ~~accordance~~and ~~with~~benefits ~~GAAP~~relating ~~has~~to ~~been~~such ~~provided.~~employees, ~~Our~~and ~~calculations~~legal, travel and other out-of-pocket expenses that are directly related to the ~~Partnership’s~~management ~~NOI~~of ~~for~~specific properties. During the ~~years~~year ended December 31, ~~2012~~ 2013, ~~2011~~the ~~and~~Liquidating ~~2010~~Trust incurred ~~are~~property ~~presented~~management ~~below~~fees ~~(in~~payable ~~thousands)~~to the Property Manager of less than $0.1 million.

	2012			2011			2010
Total revenues	$	14,619		$	20,501		$	15,093
Operating expenses
Property operating expenses		11,144			11,825			11,168
Real estate taxes, net		918			679			765
Property and asset management fees		765			891			655
Cost of real estate inventory sales		-			5,414			1,718
Less: Asset management fees		(304	)		(410	)		(229	)
Total operating expenses		12,523			18,399			14,077
Net operating income	$	2,096		$	2,102		$	1,016
Reconciliation to Net loss
Net operating income	$	2,096		$	2,102		$	1,016
Less: Depreciation and amortization		(1,017	)		(2,008	)		(2,213	)
General and administrative expenses		(1,161	)		(896	)		(1,143	)
Interest expense, net		(3,394	)		(5,339	)		(2,224	)
Asset management fees		(304	)		(410	)		(229	)
Asset impairment loss (1)		(456	)		(1,412	)		-
Inventory valuation adjustment		-			(26,768	)		(1,886	)
Provision for income taxes		(137	)		(112	)		(166	)
Add: Interest income		295			179			132
Gain on troubled debt restructuring		7,163			-			125
Loss on derivative instruments, net		-			-			(39	)
Other income		200			-			-
Income (loss) from discontinued operations		13,371			(15,493	)		(12,087	)
Net income (loss)	$	16,656		$	(50,157	)	$	(18,714	)

We pay Behringer Advisors II or its affiliates an annual asset management fee of 0.5% of the contract purchase price of our assets. Any portion of the asset management fee may be deferred and paid in a subsequent year. For the year ended December 31, 2013, the Liquidating Trust incurred asset management fees of $0.2 million.

1)We may ~~Excludes~~pay ~~approximately~~Behringer ~~$20.4~~Advisors ~~million~~II ~~and~~or ~~$5.1~~its ~~million~~affiliates ofa ~~impairment~~debt ~~loss~~financing ~~included~~fee infor ~~loss~~certain ~~from~~debt ~~discontinued~~made ~~operations~~available ~~for~~to us. For the ~~years~~year ended December 31, ~~2011~~2013, ~~and~~the ~~2010,~~Liquidating ~~respectively~~Trust incurred no such debt financing fee.

~~Performance~~We may ~~Reporting~~reimburse ~~Required~~Behringer Advisors II for costs and expenses paid or incurred to provide services to us including direct expenses and the costs of salaries and benefits of certain persons employed by those entities and performing services for us, as permitted by the ~~Partnership~~Liquidating Trust Agreement. For the year ended December 31, 2013, the Liquidating Trust incurred such cost for administrative services totaling $0.2 million.

~~Section~~On ~~15.2~~March of29, 2011, the Partnership ~~Agreement~~entered into ~~required~~ the ~~Partnership~~Fifth toAmended ~~provide~~and ~~its~~Restated ~~limited~~Promissory ~~partners~~Note ~~with~~to ~~its~~amend ~~net~~the ~~cash~~terms ~~from~~of ~~operations,~~ a ~~non-GAAP~~loan ~~financial measure,~~from ~~which~~Behringer isHoldings ~~defined~~(the as“BHH ~~net~~Loan”) to ~~income,~~a ~~computed~~maximum inborrowing ~~accordance~~amount ~~with~~of ~~GAAP,~~$25 ~~plus~~million ~~depreciation~~with all borrowings and ~~amortization~~accrued interest due on ~~real~~March ~~estate~~29, ~~assets~~2014. On July 5, ~~adjustments~~ ~~for~~2012 ~~gains~~the Partnership ~~from~~entered into the ~~sale~~Note ofModification ~~assets~~Agreement and ~~gains~~Assignment onof Proceeds with Behringer Holdings whereby the ~~sale~~maturity date of ~~discontinued~~the ~~operations~~BHH Loan was extended to May 31, 2014. The ~~debt~~outstanding ~~service~~principal ~~and~~balance ~~capital~~under ~~improvements~~the BHH Loan at December 31, ~~(“Net~~2013 ~~Cash~~was ~~From~~$8.8 ~~Operations”)~~million. ~~Calculations~~Borrowings ofunder the ~~Partnership’s~~BHH ~~Net~~Loan ~~Cash~~were ~~From~~used ~~Operations~~principally ~~for~~to ~~the~~finance ~~years~~general ~~ended~~working capital and capital expenditures. ~~December 31,~~The ~~2012~~BHH Loan is unsecured, ~~2011~~has an interest rate of 5.0% per annum and ~~2010~~requires ~~are~~no ~~presented~~monthly ~~below~~payments ~~(in~~of ~~thousands):~~interest or principal.

36At December 31, 2013, we had payables to related parties of approximately $2.5 million. The balance at December 31, 2013 consisted primarily of management fees payable to the Advisor and accrued interest on the BHH Loan. We are dependent on Behringer Advisors II, our Property Manager, or their affiliates, for certain services that are essential to us, including disposition decisions, property management and leasing services and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services to us, we will be required to obtain such services from other sources.

	2012			2011			2010
Net income (loss)	$	16,656		$	(50,157	)	$	(18,714	)
Net loss attributable to noncontrolling interest		259			2,016			2,100
Adjustments
Real estate depreciation and amortization (1)		1,799			3,941			6,116
Asset impairment loss (1)		410			21,765			5,119
Inventory valuation adjustment		-			26,768			1,886
(Gain) loss on sale of assets (1)		(114	)		11			-
Gain on sale of discontinued operations (1)		(14,561	)		(75	)		-
Gain on troubled debt restructuring (1)		(7,741	)		(12,842	)		-
Debt service, net of amounts capitalized (1)		(4,632	)		(7,192	)		(5,382	)
Capital improvements (1)		(949	)		(1,035	)		(603	)
Net cash used in operations	$	(8,873	)	$	(16,800	)	$	(9,478	)

~~(1)~~Policies ~~This~~and ~~represents~~Procedures ~~our~~for ~~ownership~~Transactions with ~~portion~~Related ~~of the properties that we consolidate.~~Persons

~~Off-Balance~~The agreements ~~Sheet~~and ~~Arrangements~~arrangements among the Liquidating Trust, our Managing Trustee and its affiliates have been established by our Managing Trustee, and our Managing Trustee believes the amounts to be paid thereunder to be reasonable and customary under the circumstances. Additionally, our Managing Trustee has a fiduciary obligation to act in the best interests of both our beneficiaries and the investors in other affiliated programs and will use its best efforts to assure that we will be treated at least as favorably as any other affiliated program.

~~The~~Item ~~Partnership~~14. ~~had no~~Principal ~~off-balance~~Accountant ~~sheet~~Fees ~~arrangements~~and that are reasonably likely to have a current or future material effect on the financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources of the Partnership or the Liquidating Trust, as successor in interestServices.

~~Contractual Obligations~~None

The following table sets forth certain information concerning the Partnership’s contractual obligations and commercial commitments as of December 31, 2012, and outlines expected future payments to be made by the Liquidating Trust under such obligations and commitments (in thousands):34

	Payments due by period
	Totals		2013		2014		2015		2016		2017		Thereafter
Notes payable	$	41,095	$	1,294	$	8,987	$	30,814	$	-	$	-	$	-
Interest		6,184		2,551		1,911		1,722		-		-		-
Total	$	47,279	$	3,845	$	10,898	$	32,536	$	-	$	-	$	-

PART IV

~~Inflation~~Item 15. Exhibits and Financial Statement Schedules.

The real estate market has not been affected significantly by inflation in the past several years due to the relatively low inflation rate. The majority of the leases contain inflation protection provisions applicable to reimbursement billings for common area maintenance charges, real estate tax and insurance reimbursements on (a) ~~per~~List ~~square foot basis, or in some cases, annual reimbursement~~ of ~~operating~~Documents ~~expenses above a certain per square foot allowance~~Filed.

~~Item 7A~~1. ~~Quantitative~~Unaudited ~~and~~Financial ~~Qualitative Disclosures About Market Risk.~~Statements

WeThe ~~may~~list be exposed to interest rate changes primarily from variable interest rate debt incurred to acquire and develop properties, issue loans and make other permitted investments. Our management’s objectives, with regard to interest rate risks, are to limit the impact of ~~interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve these objectives, we borrow primarily at fixed rates or variable rates with~~ the ~~lowest~~financial ~~margins available and in some cases, with the ability to convert variable~~statements ~~rates~~filed to fixed rates. With regard to variable rate financing, we will assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. We may enter into derivative financial instruments such as ~~options,~~part ~~forwards,~~of ~~interest~~this ~~rate~~Annual ~~swaps,~~Report ~~caps~~on orForm ~~floors to~~10-K ~~mitigate~~is ~~our~~set ~~interest~~forth ~~rate risk~~ on apage ~~related financial instrument or to effectively lock the interest rate portion of our variable rate debt. None of the Partnership’s approximately $41.~~F-1 ~~million in notes payable at December 31, 2012 were subject to variable interest rates~~herein.

At2. ~~December~~Unaudited ~~31,~~Financial ~~2012, the~~Statement ~~Partnership did not have any foreign operations and thus were not exposed to foreign currency fluctuations.~~Schedules

~~Item~~Schedule III 8.- ~~Financial~~Real ~~Statements~~Estate and ~~Supplementary~~Accumulated ~~Data.~~Depreciation

~~The information required by this Item 8 is hereby incorporated by reference to our Financial Statements beginning on page F-1 of this Annual Report on Form 10-K~~3. Exhibits

~~Item~~The 9.list ~~Changes~~of inexhibits ~~and~~filed ~~Disagreements~~as part ~~With~~of ~~Accountants~~this Annual Report on ~~Accounting~~Form ~~and~~10-K ~~Financial~~is ~~Disclosure~~submitted in the Exhibit Index following the financial statements in response to Item 601 of Regulation S-K.

~~Not~~(b) ~~applicable~~Exhibits.

37The exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.

~~Item~~(c) ~~9A.~~Unaudited ~~Controls~~Financial ~~and~~Statement ~~Procedures~~Schedules.

~~Evaluation~~All financial statement schedules, except for Schedule III (see (a) 2. above), have been omitted because the required information of ~~Disclosure~~such ~~Controls~~schedules ~~and~~is not present ~~Procedures~~in amounts sufficient to require a schedule or is included in the financial statements.

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, the management of Behringer Advisors II, as Managing Trustee of the Liquidating Trust, including its Chief Executive Officer and Chief Financial Officer, evaluated as of December 31, 2012 the effectiveness of the Partnership’s disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of Behringer Advisors II concluded that the Partnership’s disclosure controls and procedures, as of December 31, 2012, were effective for the purpose of ensuring that information required to be disclosed by us in this report as successor in interest to the Partnership is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to the management of Behringer Advisors II, as our Managing Trustee, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. 35

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a partnership have been detected.SIGNATURES

~~Management’s~~Pursuant ~~Annual~~to ~~Report~~the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on ~~Internal~~its ~~Control~~behalf ~~over~~by ~~Financial~~the ~~Reporting~~undersigned, thereunto duly authorized.

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). The Liquidating Trust’s management, including the Chief Executive Officer and Chief Financial Officer of Behringer Advisors II, as Managing Trustee of the Liquidating Trust, evaluated as of December 31, 2012 the effectiveness of the Partnership’s internal control over financial reporting using the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of Behringer Advisors II concluded that the Partnership’s internal controls, as of December 31, 2012, were effective in providing reasonable assurance regarding reliability of financial reporting.

		Behringer Harvard Short-Term Opportunity Liquidating Trust

March 27, 2014	By:	/s/ Michael J. O’Hanlon
		Michael J. O’Hanlon
		Chief Executive Officer and President of Behringer Harvard Advisors II LP

~~Changes~~Pursuant into ~~Internal~~the ~~Control~~requirements ~~over~~of ~~Financial~~the Securities ~~Reporting~~Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

There has been no change in internal control over financial reporting that occurred during the year ended December 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

March 27, 2014	/s/ Michael J. O’Hanlon
	Michael J. O’Hanlon
	Chief Executive Officer and President of Behringer Harvard Advisors II LP (Principal Executive Officer)

March 27, 2014	/s/ Gary S. Bresky
	Gary S. Bresky
	Chief Financial Officer of Behringer Harvard Advisors II LP
	(Principal Financial Officer)

March 27, 2014	/s/ S. Jason Hall
	S. Jason Hall
	Treasurer of Behringer Harvard Advisors II LP
	(Principal Accounting Officer)

~~Item 9B. Other Information.~~36

OnINDEX ~~January~~TO ~~31,~~UNAUDITED ~~2013,~~FINANCIAL Mr. Robert M. Behringer informed the Partnership that, as of January 31, 2013, he has received a medical diagnosis of a condition affecting his speech causing Mr. Behringer to be permanently disabled. As a result, an Event of Withdrawal occurred under the Amended and Restated Agreement of Limited Partnership, and Mr. Behringer ceased to be a general partner of the Partnership. Behringer Advisors II remained as a general partner of the Fund. Mr. Behringer also informed the Partnership that he resigned as Chairman of Behringer Advisors II effective January 31, 2013. Mr. Robert S. Aisner was appointed Chairman of Behringer Advisors II on March 27, 2013.STATEMENTS

	Page
Unaudited Financial Statements

Consolidated Statement of Net Assets (Liquidation Basis) as of December 31, 2013	F-2

Consolidated Statement of Changes in Net Assets (Liquidation Basis) for the year ended December 31, 2013	F-3

Notes to Consolidated Financial Statements	F-4

Unaudited Financial Statement Schedules

Schedule III – Real Estate and Accumulated Depreciation for the year ended December 31, 2013	F-9

~~PART III~~F-1

~~Item~~Behringer ~~10.~~Harvard ~~Directors,~~Short-Term Opportunity ~~Executive~~Liquidating ~~Officers and Corporate Governance.~~Trust

~~Managing~~Consolidated ~~Trustee~~Statement of Net Assets

~~Prior~~(Liquidation to the Effective Date, the Partnership operated under the direction of its General Partners, Behringer Advisors II and Mr. Robert M. Behringer. Since the Effective Date, the Liquidating Trust operates under the direction of our Managing Trustee, Behringer Advisors II, which was formerly one of the General Partners. The Managing Trustee is assisted by the employees of HPT, the general partner of Behringer Advisors II. We do not employ our own management personnel; but instead we pay fees and expense allocations to our Managing Trustee for its services. The Managing Trustee is responsible for the management and control of our affairs, including acquisitions in the past, capital improvements, construction and property management.Basis)

~~Our~~December ~~Managing Trustee Behringer Advisors II is a Texas limited partnership formed in July 2002. The executive office of Behringer Advisors II is located at 15601 Dallas Parkway~~31, Suite 600, Addison, Texas 75001. Behringer Advisors II is owned by HPT, its sole general partner, and Behringer Harvard Partners, LLC (“Behringer Partners”), its sole limited partner. Behringer Holdings is the sole owner of HPT and Behringer Partners. Behringer Holdings also is the indirect owner of our Property Manager, Behringer Development, a real estate development company, and Behringer Securities, our dealer manager.2013

~~Behringer Advisors II was created in 2002 for the sole purpose of acting as one of the Partnership’s General Partners. It is managed by its executive officers, namely:~~(unaudited)

Name	Age	Position(s)
Robert S. Aisner	66	Chairman
Michael J. O’Hanlon	61	Chief Executive Officer and President
Gerald J. Reihsen, III	54	Executive Vice President
Gary S. Bresky	46	Chief Financial Officer
M. Jason Mattox	37	Executive Vice President
S. Jason Hall	46	Treasurer

(in thousands)

Robert S. Aisner is the Chairman of Behringer Advisors II. Mr. Aisner has served as President (from May 2005 until February 2013, Chief Executive Officer (from June 2008 until May 2009 and from July 2009 until February 2013), and a director since June 2003 of Behringer Harvard REIT I. In addition, Mr. Aisner serves as Vice Chairman (since January 2012) and a director (since June 2006) of Behringer Harvard Opportunity REIT I. Mr. Aisner also has served as Vice Chairman (since January 2012) and a director (since January 2007) of Behringer Harvard Opportunity REIT II, as Chief Executive Officer and a director of Behringer Harvard Multifamily REIT since August 2006 and as President (since April 2007) and Chief Executive Officer (since September 2008) of Adaptive Real Estate Investment Trust, Inc. (“AREIT”)(formerly, Behringer Harvard Multifamily REIT II, Inc.), currently in registration. Furthermore, Mr. Aisner serves as a Class II Director of Priority Senior Secured Income Fund, Inc., a closed-end management investment company jointly advised by Behringer Harvard and Prospect Capital Management, LLC. Mr. Aisner is also Chief Executive Officer and President of the other Behringer Harvard companies.

	December 31,
	2013
Assets
Real estate held for sale	$	47,978
Cash and cash equivalents		4,826
Restricted cash		783
Accounts receivable, net		7,758
Prepaid expenses and other assets		720
Total assets	$	62,065

Liabilities
Notes payable	$	31,876
Notes payable to related party		8,801
Accounts payable		325
Payables to related parties		2,503
Accrued liabilities		1,488
Liability for estimated costs in excess of estimated receipts during liquidation		858
Total liabilities		45,851
Net assets in liquidation	$	16,214

~~Mr.~~See ~~Aisner~~Notes has over 30 years of commercial real estate experience with acquiring, managing and disposing of properties located in the United States and other countries, including Germany, the Netherlands, England, the Bahamas and Australia. From 1996 until joining Behringer Harvard REIT I in 2003, Mr. Aisner served as (i) Executive Vice President of AMLI Residential Properties Trust, formerly a New York Stock Exchange listed REIT that focused on the development, acquisition and management of upscale apartment communities, which serves as advisor and asset manager for institutional investors with respect to ~~their~~Consolidated ~~multifamily~~Financial real estate investment activities, (ii) President of AMLI Management Company, that oversees all of AMLI’s apartment operations in 80 communities, (iii) President of the AMLI Corporate Homes division that manages AMLI’s corporate housing properties, (iv) Vice President of AMLI Residential Construction, a division of AMLI that performs real estate construction services, and (v) Vice President of AMLI Institutional Advisors, the AMLI division that serves as institutional advisor and asset manager for institutional investors with respect to their multifamily real estate activities. Mr. Aisner also served on AMLI’s Executive Committee and Investment Committee from 1999 until 2003. From 1994 until 1996, Mr. Aisner owned and operated Regents Management, Inc., which had both a multifamily development and construction group, and a general commercial property management group. From 1984 to 1994, he was employed by HRW Resources, Inc., a real estate development and management company, where he served as Vice President.Statements

Mr. Aisner served as an independent director of Behringer Harvard REIT I from June 2002 until February 2003 and as a management director from June 2003 until February 2012. Mr. Aisner received a Bachelor of Arts degree from Colby College and a Masters of Business Administration degree from the University of New Hampshire.F-2

39Behringer Harvard Short-Term Opportunity Liquidating Trust

~~Michael~~Consolidated J.Statement ~~O’Hanlon has served as Chief Executive Officer and President~~ of ~~Behringer Advisors II since January 2012. Mr. O’Hanlon also~~ ~~serves~~Changes as Chief Executive Officer and President of several other Behringer Harvard–sponsored programs, including Behringer Harvard Opportunity REIT I and Behringer Harvard Opportunity REIT II, effective January 2012. In addition, Mr. O’Hanlon has served as a director of Behringer Harvard Opportunity REIT I and Behringer Harvard Opportunity REIT II since February 2013. Prior to his appointment, Mr. O’Hanlon was an independent director of Adaptive REIT (formerly, Behringer Harvard Multifamily REIT II Inc.) from September 2011 through December 2011. From September 2010 to December 2011, Mr. O’Hanlon was President and Chief Operating Officer of Billingsley Company, a major Dallas, Texas based owner, operator and developer that has interests in ~~commercial~~Net office, industrial, retail, and multifamily properties. From November 2007 to October 2009, Mr. O’Hanlon served as Chief Executive Officer and President for Inland Western Retail Real Estate Trust, Inc., a public non-traded REIT, where he was responsible for an $8.5 billion national retail and office portfolio consisting of 335 properties and 51 million square feet. From January 2005 to October 2007, Mr. O’Hanlon served as head of Asset Management for Inland Real Estate Group of Companies. In total, Mr. O’Hanlon has over 30 years of management experience with public and private firms with commercial real estate portfolios, with a broad range of responsibilities including overseeing acquisitions, dispositions, restructurings, joint ventures and capital raising, and with experience with a diverse group of real estate-related investments including multifamily and debt-related investments. Mr. O’Hanlon received a Masters of Business Administration, Finance-Money and Financial Markets degree in 1979 from Columbia University Graduate School of Business. Mr. O’Hanlon has also received a Bachelor of Science, Accounting degree in 1973 from Fordham University. Mr. O’Hanlon has served and been an active member of the Real Estate Roundtable, NAREIT, ICSC and ULI.Assets

~~Gerald~~(Liquidation J. Reihsen, III serves as the Executive Vice President of Behringer Advisors II. Since 2001, Mr. Reihsen has served in this and similar executive capacities with the other Behringer Harvard companies, including serving as President of Behringer Securities through March 2012.Basis)

~~For~~December ~~over 20 years~~31, ~~Mr.~~ Reihsen’s business and legal background has centered on sophisticated financial and transactional matters, including commercial real estate transactions, real estate partnerships, and public and private securities offerings. For the period from 1985 to 2000, Mr. Reihsen practiced as an outside corporate securities attorney. After serving from 1986 to 1995 in the corporate department of Gibson, Dunn & Crutcher, LLP, a leading international commercial law firm, Mr. Reihsen established his own firm, Travis & Reihsen, where he served as a corporate/securities partner until 1998. In 1998, Mr. Reihsen became the lead partner in the corporate/securities section of the law firm Novakov Davis, where he served until 2000. In 2000, he practiced law as a principal of Block & Balestri, a corporate and securities law firm. In 2000 and 2001, Mr. Reihsen was employed as the Vice President – Corporate Development and Legal of Xybridge Technologies, Inc., a telecommunications software company that Mr. Reihsen helped guide through venture funding, strategic alliances with international telecommunications leaders and its ultimate sale to Zhone Technologies, Inc. Mr. Reihsen holds FINRA Series 7, 24, 27 and 63 registrations. Mr. Reihsen received a Bachelor of Arts degree, magna cum laude, from the University of Mississippi and a Juris Doctorate degree, cum laude, from the University of Wisconsin.2013

Gary S. Bresky is the Chief Financial Officer of Behringer Advisors II. Mr. Bresky also serves as Executive Vice President and Chief Financial Officer or in similar executive capacities with other entities sponsored by Behringer Holdings, including Behringer Harvard Advisors I LP who is the managing trustee of Behringer Harvard Mid-Term Value Enhancement Liquidating Trust. Mr. Bresky also serves as Executive Vice President of Behringer Harvard REIT I (~~since June 2002~~Unaudited), Behringer Harvard Opportunity REIT I (since June 2007), Behringer Harvard Opportunity REIT II (since January 2007) and Behringer Harvard Multifamily REIT I (since August 2006). He previously served as Chief Financial Officer of Behringer Harvard REIT I (from June 2002 to May 2009), Behringer Harvard Opportunity REIT I (from November 2004 to November 2010), Behringer Harvard Opportunity REIT II (from January 2007 to November 2010) and Behringer Harvard Multifamily REIT (from August 2006 to September 2009).

~~Mr. Bresky has been active~~ (in commercial real estate and related financial activities for over 15 years. Prior to his employment with Behringer Advisors II, Mr. Bresky served as Senior Vice President of Finance with Harvard Property Trust, Inc. from 1997 to 2001. In this capacity, Mr. Bresky was responsible for directing all accounting and financial reporting functions and overseeing all treasury management and banking functions for the company. Mr. Bresky also was integral in analyzing deal and capital structures as well as participating in all major decisions related to any acquisition or sale of assets.thousands)

From 1995 until 1996, Mr. Bresky worked in the Real Estate Group at Coopers & Lybrand LLP in Dallas, Texas, where he focused on finance and accounting for both public and private REITs. His experience included conducting annual audits, preparing public securities reporting compliance filings and real estate securities registration statements for his clients. From 1989 to 1994, Mr. Bresky worked with Ten West Associates, LTD and Westwood Financial Corporation in Los Angeles, California as a real estate analyst and asset manager for two commercial real estate portfolios totaling in excess of $185 million. From 1988 until 1989, Mr. Bresky worked as an analysts’ assistant for both Shearson-Lehman Bros., Inc. and Hambrecht and Quist Inc. assisting brokers in portfolio management. Mr. Bresky holds FINRA Series 7, 24, 27 and 63 registrations. Mr. Bresky received a Bachelor of Arts degree from the University of California – Berkeley and a Masters of Business Administration degree from the University of Texas at Austin.

	Year Ended
	December 31, 2013
Statement of Changes in Net Assets:
Net assets in liquidation at beginning of period	$	11,417
Change in estimated costs in excess of estimated receipts during liquidation		(214	)
Net increase (decrease) in fair value		(1,624	)
Changes in other assets/liabilities		6,635
Liquidating distributions to beneficiaries		-
Change in net assets in liquidation		4,797
Net assets in liquidation at end of period	$	16,214

40See Notes to Consolidated Financial Statements

M. Jason Mattox is the Executive Vice President of Behringer Advisors II and serves in a similar capacity with other Behringer Harvard companies. From 2002 until March 2006, Mr. Mattox served as the Senior Vice President of Behringer Advisors II.F-3

~~From 1997 until joining Behringer Advisors II in 2002, Mr~~1. ~~Mattox~~Business ~~served as a Vice President of Harvard Property Trust, Inc.~~ and became a member of its Investment Committee in 1998. From 1999 until 2001, Mr. Mattox served as Vice President of Sun Resorts International, Inc., a recreational property investment company, coordinating marina acquisitions throughout the southern United States and the U.S. Virgin Islands. From 1999 until 2001, in addition to providing services related to investing, acquisition, disposition and operational activities, Mr. Mattox served as an asset manager with responsibility for over one million square feet of Harvard Property Trust, Inc.’s commercial office assets in Texas and Minnesota, overseeing property performance, management offices, personnel and outsourcing relationships.Organization

Mr. Mattox is a continuing member of the Building Owners and Managers Association and the National Association of Industrial and Office Properties. Mr. Mattox holds FINRA Series 7, 24 and 63 registrations. Mr. Mattox received both a Bachelor of Business ~~Administration degree, with honors, and a Bachelor of Science degree, cum laude, from Southern Methodist University.~~

~~S. Jason Hall is Treasurer of~~ Behringer ~~Advisors II and, in such capacity, Mr. Hall served as principal accounting officer of the Behringer~~ Harvard Short-Term Opportunity Fund I LP ~~and~~(which ~~now~~may ~~serves~~be asreferred ~~principal~~to ~~accounting~~as ~~officer of~~ the ~~Liquidating~~“Partnership”) ~~Trust.~~was ~~Mr.~~a ~~Hall~~limited ~~also~~partnership ~~serves~~formed asin ~~the~~Texas ~~Senior~~on ~~Controller~~July ~~and~~30, ~~Director~~2002 ofand ~~Financial~~governed ~~Reporting~~by ~~for~~an ~~the~~Agreement ~~Behringer~~of ~~Harvard~~Limited ~~Opportunity REIT II~~Partnership, ~~Inc.~~as ~~and~~amended ~~is responsible for~~ (the ~~accounting~~“Partnership ~~and financial reporting~~Agreement”). Its Hegeneral ~~has~~partners ~~held~~were ~~the position of Director of Financial Reporting for the~~ Behringer Harvard ~~Opportunity~~ ~~REIT~~Advisors II, ~~Inc.~~LP ~~and other~~ (“Behringer ~~Harvard-sponsored~~Advisors ~~programs~~II”) ~~since~~and ~~2010.~~Robert MrM. ~~Hall joined~~ Behringer ~~Harvard in 2005~~(collectively, asthe ~~SEC~~“General ~~Reporting Manager~~Partners”). ~~From~~The ~~2000~~Partnership towas ~~2004,~~funded hethrough ~~served~~capital incontributions afrom ~~number~~the ofGeneral ~~accounting~~Partners ~~positions,~~and ~~including Corporate Controller from~~an ~~2003~~initial tolimited ~~2004,~~partner aton ~~Aegis~~September ~~Communications Group~~20, ~~Inc.,~~2002 ~~then publicly traded on NASDAQ and~~ (the ~~nation’s~~date ~~seventh largest provider~~ of ~~outsourced customer care services~~inception). ~~Prior~~It tooffered ~~joining~~its ~~Aegis~~limited ~~Communications~~partnership ~~Group,~~units ~~Mr.~~pursuant ~~Hall~~to ~~spent~~a public ~~five~~offering ~~years~~which ascommenced ~~Corporate~~on ~~Controller for~~February a19, ~~private~~2003 ~~distribution company~~ and ~~three~~was ~~years~~terminated inon ~~public~~February ~~accounting.~~19, ~~Mr.~~2005 ~~Hall is a certified public accountant in~~ (the ~~state~~“Offering”). ofThe ~~Texas~~Offering ~~and~~was ~~received~~ a ~~Bachelor~~best ofefforts ~~Business~~continuous ~~Administration~~offering, inand ~~Finance~~new ~~from~~investors ~~Angelo~~were ~~State~~admitted ~~University~~until ~~and~~the atermination ~~Master~~ of ~~Business~~the ~~Administration from Tarleton State University~~Offering.

~~Other~~The ~~Personnel~~Partnership used the proceeds from the Offering, after deducting offering expenses, to acquire interests in twelve properties. As of December 31, 2013, two of the twelve properties acquired remained in its portfolio, which has been transferred to the Liquidating Trust (as hereinafter defined) as described below under “Plan of Liquidation”. Effective as of January 31, 2013, Mr. Behringer ceased to be a general partner of the Partnership due to a permanent disability resulting in an Event of Withdrawal under the Partnership Agreement. Effective that same date, Mr. Behringer also resigned as Chairman of Behringer Advisors II.

~~The~~Plan ~~Managing Trustee, Behringer Advisors II, is assisted by the officers and employees~~ of HPT, which is the general partner of Behringer Advisors II. HPT and its affiliates will continue to hire employees as needed. HPT and its affiliates also will engage the services of non-affiliated third parties to assist with the identification of properties for possible acquisition and management of our operations.Liquidation

~~Advisory~~On ~~Board~~February 11, 2013 (the “Effective Date”), the Partnership completed its liquidation pursuant to a Plan of Liquidation (the “Plan”) adopted by Behringer Harvard Advisors II LP, as its General Partner. The Plan provided for the formation of a liquidating trust, Behringer Harvard Short-Term Opportunity Liquidating Trust (which may be referred to herein as the “Liquidating Trust”, “we,” “us,” or “our”), for the purpose of completing the liquidation of the assets of the Partnership. In furtherance of the Plan, the Partnership entered into a Liquidating Trust Agreement (the “Liquidating Trust Agreement”) with one of the Partnership’s General Partners, Behringer Advisors II, as managing trustee (the “Managing Trustee”), and CSC Trust Company of Delaware, as resident trustee. As of the Effective Date, each of the holders of limited partnership units in the Partnership received a pro rata beneficial interest in the Liquidating Trust in exchange for such holder’s interest in the Partnership. In accordance with the Plan and the Liquidating Trust Agreement, the Partnership has transferred all of its remaining assets and liabilities to us to be administered, disposed of or provided for in accordance with the terms and conditions set forth in the Liquidating Trust Agreement. The General Partners elected to liquidate the Partnership and transfer its remaining assets and liabilities to the Liquidating Trust as a cost saving alternative that the General Partners believed to be in the best interests of the investors. The expenses associated with operating a public reporting entity, like the Partnership, are comparatively high and therefore detract from distributable proceeds and returns it can make to its investors. The reorganization into a liquidating trust enables us to reduce costs associated with public reporting obligations and related audit expenses that are not applicable to the Liquidating Trust, helping to preserve capital throughout our disposition phase for the benefit of our investors. Cutting expenses and maximizing investor returns is a primary focus in this disposition phase.

~~The~~Our ~~Liquidating~~principal ~~Trust~~demands ~~does~~for ~~not~~funds ~~have~~in athe ~~board~~next twelve months and beyond will be for the payment of ~~directors.~~operating ~~The~~expenses, ~~Partnership’s~~costs ~~General~~associated ~~Partners~~with ~~were~~lease-up ~~initially~~and capital ~~assisted~~improvements byfor anour ~~advisory~~remaining ~~board~~operating property and for the payment of recurring debt service, ~~which~~further principal paydowns ~~was~~and ~~dissolved~~reserve requirements on ~~March~~our ~~31,~~outstanding ~~2008~~indebtedness as required by our lenders.

NoThe ~~Audit~~Liquidating ~~Committee;~~Trust had notes payable Nototaling ~~“Audit~~$40.7 ~~Committee~~million ~~Financial~~at ~~Expert~~December 31, 2013 of which $31 million was secured by the hotel property and $8.8 million was to Behringer Harvard Holdings, LLC (“Behringer Holdings”), a related party.

~~The~~2. ~~Liquidating~~Summary ~~Trust does not, nor did the Partnership as predecessor, have a board~~ of ~~directors~~Significant and, as such, has no board committees such as an audit committee. Because we do not have an audit committee, we do not have an “audit committee financial expert.” The Managing Trustee is responsible for managing the relationship with our Independent Registered Public Accounting ~~Firm.~~Policies

~~Section~~Use ~~16(a)~~of ~~Beneficial~~Estimates ~~Ownership~~in ~~Reporting~~the Preparation ~~Compliance~~of Financial Statements

~~Section~~The ~~16(a)~~preparation of ~~the~~ ~~Exchange~~our ~~Act~~financial ~~requires~~statements ~~each~~in ~~director,~~conformity ~~officer,~~with ~~and~~accounting ~~individual~~principles ~~beneficially~~generally ~~owning~~accepted ~~more~~in ~~than~~the ~~10%~~United States of aAmerica ~~registered~~(“GAAP”) and ~~security of~~ the ~~Partnership~~ toliquidation ~~file~~basis ~~with~~of ~~the~~accounting ~~SEC~~requires ~~reports~~management ofto ~~security~~make ~~ownership~~estimates and ~~reports~~assumptions onthat ~~subsequent~~affect ~~changes~~the inreported ~~ownership~~ amounts of ~~their~~the ~~securities within~~assets, ~~specified~~including ~~time~~net ~~frames.~~assets ~~These~~in ~~specified~~liquidation, ~~time~~and ~~frames~~liabilities ~~require~~and ~~the~~disclosure ~~reporting~~ of ~~changes~~contingent inassets ~~ownership~~and ~~within~~liabilities ~~two~~at ~~business days~~the date of the ~~transaction~~financial ~~giving~~statements ~~rise~~and to the ~~reporting~~reported ~~obligation.~~amounts ~~Reporting~~of ~~persons~~revenues ~~are~~and ~~required~~expenses toduring ~~furnish~~ the ~~Partnership~~reporting ~~with~~period. ~~copies~~These estimates ofare ~~all~~made ~~Section~~and ~~16(a)~~evaluated ~~forms~~on ~~filed~~an ~~with~~on-going ~~the~~basis ~~SEC.~~using ~~Based~~information ~~upon~~that ~~our~~is ~~review~~currently ofavailable ~~the~~as ~~reports~~well ~~furnished~~as tovarious ~~the~~other ~~Partnership~~assumptions believed ~~pursuant~~ to ~~Section 16(a)~~be ofreasonable ~~the~~under ~~Exchange Act, to~~ the ~~best~~circumstances. ofActual ~~our~~results ~~knowledge~~could differ, ~~all~~perhaps ~~required~~in ~~Section~~adverse ~~16(a)~~ways, ~~filings~~and ~~with~~those ~~respect~~estimates ~~to the securities of the~~could ~~Partnership~~be ~~were~~different ~~timely~~under ~~and~~different ~~correctly~~assumptions ~~made~~or byconditions ~~reporting~~from ~~persons~~those ~~during 2012~~estimates.

~~Code of Ethics~~F-4

Behringer ~~Advisors II,~~Harvard ~~both~~Short-Term ~~formerly as a General Partner of the Partnership and now as Managing Trustee of the~~ Opportunity Liquidating Trust, adopted a code of ethics applicable to its principal executive officer, principal financial officer, principal accounting officer, controller and other employees. A copy of the code of ethics of Behringer Advisors II may be obtained from our web site at http://www.behringerharvard.com. The web site will be updated to include any material waivers or modifications to the code of ethics.

41Notes to Consolidated Financial Statements

~~Item 11. Executive Compensation.~~(Unaudited)

~~Prior~~Principles ~~to the Effective Date, the Partnership operated under the direction~~ of ~~its General Partners. Since the Effective Date, the Liquidating Trust operates~~Consolidation under the direction of our Managing Trustee, Behringer Advisors II, which was formerly one of the General Partners. As of December 31, 2012, the Partnership had not made any payments to Mr. Behringer as compensation for serving as General Partner. The officers and ~~employees~~Basis of HPT assist the Managing Trustee. The officers and employees of HPT do not devote all of their time to managing us, and they do not receive any compensation from us for their services. We pay fees to our Managing Trustee, Behringer Advisors II, and its other affiliates, as provided for in our Liquidating Trust Agreement, which fees are the same as those paid by the Partnership to Behringer Advisors II as General Partner. We do not directly compensate the executive officers of our Managing Trustee, nor do we reimburse our Managing Trustee for compensation paid to the executive officers, for services rendered to us. Reimbursement for the costs of salaries and benefits of the employees of our Managing Trustee relate to compensation paid to the Managing Trustee’s employees that provide services to us such as accounting, administrative or legal, for which our Managing Trustee or its affiliates are not entitled to a separate fee. Accordingly, we do not have, and our Managing Trustee has not considered, a compensation policy or program for itself, its affiliates, any of its employees or any employees of affiliates of our Managing Trustee and have not included a Compensation Discussion and Analysis in this Annual Report on Form 10-K. See “Item 13. Certain Relationships and Related Transactions, and Director Independence” for a description of the fees payable and expenses reimbursed to our affiliates.Presentation

~~Item~~The 12consolidated financial statements include the accounts of the Liquidating Trust and the accounts of all of its wholly owned subsidiaries. ~~Security~~All ~~Ownership~~inter-company transactions, balances and profits have been eliminated in consolidation. These consolidated financial statements have been prepared according to the liquidation basis of ~~Certain~~accounting. ~~Beneficial~~In ~~Owners~~the Notes to Consolidated Financial Statements, all dollar and ~~Management~~share amounts in tabulation are in thousands of dollars and ~~Related~~units, ~~Stockholder~~respectively, ~~Matters~~unless otherwise noted. We have evaluated subsequent events for recognition or disclosure in our consolidated financial statements.

~~We do not have any~~Liquidation ~~officers~~Basis ~~or directors. The Partnership’s two General Partners, Mr. Behringer and Behringer Advisors II, each owned 50%~~ of ~~the~~ general partnership interests of the Partnership. Behringer Advisors II, in its capacity as our Managing Trustee does not own any beneficial interest in the Liquidating Trust. We do not maintain any equity compensation plans, and no arrangements exist that would, upon operation, result in a change in control.Accounting

~~The~~Under ~~following~~the ~~table~~liquidation ~~sets~~basis ~~forth~~of ~~information~~accounting, asall ofassets ~~March~~were 19adjusted to their estimated fair value (on an undiscounted basis) and liabilities, ~~2013~~including estimated ~~regarding~~costs associated with implementing the ~~beneficial~~Plan, ~~ownership~~were ofadjusted ~~units~~to oftheir ~~our~~estimated ~~beneficial~~settlement ~~interest~~amounts byon ~~each~~January ~~person~~1, 2013. ~~known~~We byadjusted usitems to ~~own~~their 5%fair orvalues ~~more~~as of ~~the~~January ~~outstanding~~1, ~~beneficial~~2013 ~~interests,~~as ~~each~~a matter of ~~our~~convergence, ~~directors~~efficiency orand ~~those~~materiality. Actual values realized for assets and settlements of ~~our~~liabilities ~~Managing~~may ~~Trustee,~~differ materially from the amounts estimated. Estimated future cash flows ~~each~~from ofproperty ~~our~~operations ~~executive~~were ~~officers~~made orbased ~~those~~on the anticipated sales dates of our ~~Managing~~remaining ~~Trustee,~~assets. ~~and~~Due ~~our~~to ~~directors~~the uncertainty in the timing of the anticipated sales dates and ~~executive~~the ~~officers~~cash flows therefrom, oroperations ~~those~~may ofdiffer ~~our~~materially ~~Managing~~from amounts estimated. These ~~Trustee,~~amounts asare apresented ~~group~~in the accompanying statement of net assets included in the consolidated financial statements. The ~~percentage~~net assets represent the estimated liquidation value of ~~beneficial~~our ~~ownership~~remaining isassets ~~calculated~~available ~~based~~to onour 10beneficiaries upon liquidation. The actual settlement amounts realized for assets and liabilities may differ materially,~~803~~ perhaps in adverse ways,~~839~~ ~~units~~from ofthe ~~beneficial~~amounts ~~interest~~estimated.

		Beneficial Interest	Percent
		Units Beneficially	of
Title of class	Beneficial owner	Owned	Class
Beneficial interest	Behringer Harvard Advisors II LP (1)(3)	-	*
Beneficial interest	Robert S. Aisner (1)(2)	386.74	*
Beneficial interest	Michael J. O'Hanlon (1)(2)	-	*
Beneficial interest	Gerald J. Reihsen, III (1)(2)	-	*
Beneficial interest	Gary S. Bresky (1)(2)	-	*
Beneficial interest	M. Jason Mattox (1)(2)	-	*
Beneficial interest	S. Jason Hall (1)(2)	-	*
Beneficial interest	All current executive officers as a group (6 persons)	773.48	*

In accordance with the Liquidating Trust Agreement, we continue to actively manage our property portfolio to seek to achieve higher occupancy rates and control operating expenses. We continually evaluate our existing portfolio and adjust our net real estate liquidation value accordingly. When we become aware of market conditions or other circumstances that indicate that the present value of our properties materially differs from our expected net sales price, we will adjust our liquidation value accordingly. Under the terms of the Liquidating Trust Agreement, we will not acquire any new properties and are focused on liquidating our remaining assets.

*DenotesCash ~~less~~and ~~than~~Cash 1%Equivalents

~~(1)~~Management ~~The~~considers investments ~~address~~with oforiginal ~~Messrs.~~maturities ~~Aisner,~~of ~~O’Hanlon,~~three ~~Reihsen,~~months ~~Bresky,~~or ~~Mattox,~~less ~~Hall~~to ~~and~~be ~~Behringer~~cash ~~Advisors II is 15601 Dallas Parkway, Suite 600, Addison, Texas 75001~~equivalents.

(2) Executive Officers of our Managing Trustee, Behringer Advisors II. Effective January 31, 2013, Mr. Behringer ceased to be a general partner of the Fund and resigned as Chairman of Behringer Advisors II.Restricted Cash

~~(3)~~Restricted ~~Managing~~cash ~~Trustee~~includes funds to be held in escrow for insurance, taxes and other reserves related to the Liquidating Trust’s consolidated properties as required by our lenders.

42Accounts Receivable

~~Item~~ Accounts ~~13.~~receivable primarily ~~Certain~~consists ~~Relationships~~of ~~and~~receivables ~~Related~~from ~~Transactions,~~hotel guests and ~~Director~~tenants ~~Independence~~related to the Liquidating Trust’s properties.

~~Transactions~~Prepaid ~~with~~Expenses ~~Related~~and ~~Persons~~Other Assets

~~The~~Prepaid ~~Managing~~expenses ~~Trustee~~ and other ~~certain of its affiliates are entitled to receive fees and compensation in connection with the management and sale of our~~ assets~~, which~~ ~~fees~~consisted ~~are~~primarily ~~the same as those previously paid by the Partnership to Behringer Advisors II as General Partner, and in its former capacity as General Partner~~ of ~~the~~prepaid ~~Partnership,~~insurance ~~Behringer Advisors II~~ and ~~certain~~prepaid ofservice ~~its affiliates have also received fees in the past in connection with the Partnership’s Offering and acquisitions~~contracts.

~~For~~Revenue the management and leasing of our properties, we pay HPT Management Services, LLC, Behringer Harvard Short-Term Management Services, LLC or Behringer Harvard Real Estate Services, LLC, or their affiliates (individually or collectively referred to as “Property Manager”), property management and leasing fees equal to the lesser of: (a) the amounts charged by unaffiliated persons rendering comparable services in the same geographic area or (b)(1) for commercial properties that are not leased on a long-term net lease basis, 4.5% of gross revenues, plus separate leasing fees of up to 1.5% of gross revenues based upon the customary leasing fees applicable to the geographic location of the properties, and (2) in the case of commercial properties that are leased on a long-term net lease basis (ten or more years), 1% of gross revenues plus a one-time initial leasing fee of 3% of gross revenues payable over the first five years of the lease term. We reimburse the costs and expenses incurred by our Property Manager on our behalf, including the wages and salaries and other employee-related expenses of all on-site employees who are engaged in the operation, management, maintenance and leasing or access control of our properties, including taxes, insurance and benefits relating to such employees, and legal, travel and other out-of-pocket expenses that are directly related to the management of specific properties. During the years ended December 31, 2012, 2011 and 2010 the Partnership incurred property management fees payable to the Property Manager of $0.1 million, $0.2 million and $0.4 million, respectively, of which approximately $10,000 is included in continuing operations for each year.Recognition

~~We pay Behringer Advisors~~Rental IIrevenue oris ~~its~~recorded ~~affiliates~~on ~~an annual asset management fee of 0.5% of~~ the ~~contract~~contractual ~~purchase~~basis ~~price~~under ~~of our assets. Certain asset management fees have been deferred by Behringer Advisors II. During~~ the ~~year~~liquidation ~~ended~~basis ~~December 31, 2012, the Partnership incurred asset management fees~~ of $0accounting.5 million, of which approximately $0.2 million was included in discontinued operations. During the year ended December 31, 2011, the Partnership incurred asset management fees of $1.0 million, of which approximately $0.1 million was capitalized to real estate inventory, $0.5 million was included in discontinued operations and approximately $50,000 was waived. During the year ended December 31, 2010, the Partnership incurred asset management fees of $1.1 million, of which $0.2 million was capitalized to real estate, $0.6 million was included in discontinued operations and $65,000 was waived.

AsConcentration ~~the Partnership did previously, in connection with the sale~~ of ~~our properties, we will pay to our Managing Trustee, Behringer Advisors II, or their~~Credit affiliates a real estate commission in an amount not exceeding the lesser of: (a) 50% of the reasonable, customary and competitive real estate brokerage commissions customarily paid for the sale of a comparable property in light of the size, type and location of the property, or (b) 3% of the gross sales price of each property, subordinated to distributions to beneficiaries from the sale proceeds of an amount which, together with distributions to Partnership’s limited partners prior to the Effective Date, will equal (1) 100% of their capital contributions plus (2) a 10% annual cumulative (noncompounded) return of their net capital contributions. Subordinated real estate commissions that are not payable at the date of sale, because beneficiaries have not yet received their required minimum distributions, will be deferred and paid at such time as these subordination conditions have been satisfied. In addition, after the beneficiaries have received a return of their net capital contributions and a 10% annual cumulative (noncompounded) return on their net capital contributions, then the Behringer Advisor II is entitled to receive 15% of the remaining residual proceeds available for distribution (a subordinated participation in net sale proceeds and distributions); provided, however, that in no event will Behringer Advisor II receive in the aggregate more than 15% of sale proceeds remaining after the beneficiaries have received a return of their net capital contributions. Since the Partnership was subject to the same conditions and such conditions had not been met, the Partnership incurred no such real estate commissions for the years ended December 31, 2012, 2011 and 2010.Risk

We ~~may~~had ~~pay~~cash ~~Behringer~~and cash ~~Advisors~~equivalents IIin orexcess ~~its~~of ~~affiliates~~federally ainsured ~~debt~~levels ~~financing~~on ~~fee~~deposit ~~for~~in ~~certain~~financial ~~debt~~institutions. ~~made~~Management ~~available~~regularly tomonitors ~~us.~~the ~~The~~financial stability ~~Partnership~~of ~~incurred~~these ~~such~~financial ~~debt~~institutions ~~financing fees~~and ofbelieves ~~$0.2~~that ~~million~~we ~~for~~are ~~the~~not ~~year~~exposed ~~ended~~to ~~December~~any ~~31,~~significant ~~2012~~credit risk in cash and cash equivalents. NoCash ~~such~~and ~~debt~~cash ~~financing~~equivalents ~~fees~~are ~~were~~diversified ~~incurred~~between ~~for~~several ~~the~~banking ~~years~~institutions ~~ended~~in ~~December~~an attempt to minimize exposure ~~31,~~to ~~2011~~any ~~and~~one ~~2010~~of these entities.

WeReportable may reimburse Behringer Advisors II for costs and expenses paid or incurred to provide services to us including direct expenses and the costs of salaries and benefits of certain persons employed by those entities and performing services for us, as permitted by the Liquidating Trust Agreement. For the year ended December 31, 2012 the Partnership incurred $0.4 million for administrative services of which $0.2 million was waived. For the year ended December 31, 2011 the Partnership incurred $0.3 million for administrative services, all of which was waived. In addition, Behringer Advisors II or its affiliates waived $3.7 million for reimbursement of operating expenses for the year ended December 31, 2011, which is classified as a capital contribution on the consolidated statement of equity (deficit). For the year ended December 31, 2010, the Partnership incurred such costs for administrative services totaling $0.4 million, all of which was waived. In addition, Behringer Advisors II or its affiliates waived $7.0 million for reimbursement of operating expenses for the year ended December 31, 2010.Segments

OnThe ~~March~~Liquidating ~~29, 2011, the Partnership entered~~Trust ~~into~~has ~~the~~determined ~~BHH~~that ~~Loan~~it ~~with~~has ~~all~~one ~~borrowings~~reportable ~~and accrued interest due on March 29~~segment, ~~2014.~~with ~~The~~activities ~~outstanding~~related ~~principal~~to ~~balance under~~ the ~~BHH Loan at December 31~~ownership, ~~2012~~development and ~~December~~management ~~31,~~of ~~2011~~real estate ~~was $8~~assets.8 ~~million~~Income ~~and~~producing ~~$11.1 million,~~properties ~~respectively.~~generated ~~Borrowings~~100% ~~under~~of the ~~BHH Loan~~Liquidating ~~are~~Trust’s ~~being~~consolidated ~~used~~revenues ~~principally~~for tothe ~~finance~~year ended ~~general~~December ~~working~~31, ~~capital and capital expenditures~~2013. The ~~BHH~~chief ~~Loan~~operating isdecision ~~unsecured,~~maker ~~has~~evaluates ~~an interest~~operating ~~rate~~performance ofon ~~5.0%~~an ~~per~~individual ~~annum~~property ~~and requires no monthly payments of interest or principal~~level. ~~On December 28~~Therefore, ~~2012 the Partnership~~ ~~remitted net proceeds from~~ the ~~sale~~properties ofare ~~assets~~aggregated ofinto $6one ~~million~~reportable ~~to Behringer Holdings and its subsidiaries to completely payoff the BHH Cassidy Ridge Loan and for payment of fees, expenses, interest and principal on the BHH Loan~~segment.

43F-5

AtBehringer ~~December~~Harvard ~~31,~~Short-Term ~~2012~~Opportunity ~~and~~Liquidating 2011, the Partnership had payables to related parties of approximately $1.8 million and $3.4 million, respectively. The balance at December 31, 2012 consisted primarily of management fees payable to the Property Manager. The balance at December 31, 2011 consisted primarily of management fees payable to the Property Manager and interest accrued on the BHH Loan.Trust

WeNotes ~~are dependent on Behringer Advisors II, our Property Manager, or their affiliates, for certain services that are essential~~ to ~~us,~~Consolidated ~~including~~Financial disposition decisions, property management and leasing services and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services to us, we will be required to obtain such services from other sources.Statements

~~Policies and Procedures for Transactions with Related Persons~~(Unaudited)

~~The~~Income agreements and arrangements among the Liquidating Trust, our Managing Trustee and its affiliates have been established by our Managing Trustee, and our Managing Trustee believe the amounts to be paid thereunder to be reasonable and customary under the circumstances. Additionally, our Managing Trustee has a fiduciary obligation to act in the best interests of both our beneficiaries and the investors in other affiliated programs and will use its best efforts to assure that we will be treated at least as favorably as any other affiliated program.Taxes

~~Item~~The 14Liquidating Trust is intended to be treated as a continuation of the Partnership and classified as a partnership for federal income tax purposes. Therefore, ~~Principal~~the ~~Accountant~~Liquidating ~~Fees~~Trust is generally not subject to income tax. However, legal entities that conduct business in Texas are subject to the Texas margin tax, including previously non-taxable entities such as limited partnerships and ~~Services~~limited liability partnerships. The tax is assessed on Texas sourced taxable margin, which is defined as the lesser of (1) 70% of total revenue or (2) total revenue less (a) the cost of goods sold or (b) compensation and benefits. Although the law states that the margin tax is not an income tax, it has the characteristics of an income tax since it is determined by applying a tax rate to a base that considers both revenues and expenses. For the year ended December 31, 2013, the Liquidating Trust did not recognize a provision for current tax expense. The Liquidating Trust did not have any entity level uncertain tax positions.

~~Because the~~Certain ~~Partnership did not have a board of directors or any board committees, including an audit committee, the General Partners~~transactions ~~pre-approve all auditing and permissible non-auditing services that~~ may be ~~provided~~subject byto ~~an independent registered public~~ accounting ~~firm,~~ ifmethods ~~any.~~for ~~The~~income ~~independent~~tax ~~public~~purposes ~~accountants~~that ~~may~~differ ~~not~~from bethe ~~retained~~accounting tomethods ~~perform~~used ~~the~~in ~~non-auditing~~preparing ~~services~~these ~~specified~~financial statements in ~~Section 10A(g)~~accordance ofwith ~~the Exchange Act~~GAAP. ~~Because we requested~~Accordingly, ~~and~~net onincome ~~March~~or ~~28,~~loss ~~2013~~and ~~were~~the ~~granted,~~resulting ~~No-Action~~balances ~~relief~~in ~~from~~ the ~~SEC~~partners’ ~~regarding~~capital ~~our~~accounts ~~proposed~~reported ~~modified~~for ~~reporting~~income ~~described~~tax ~~elsewhere~~purposes ~~herein,~~may wediffer ~~have~~from ~~not~~the ~~engaged~~balances anreported ~~independent~~for ~~registered~~those ~~public~~same ~~accounting~~items ~~firm to~~in ~~provide auditing services. A copy of~~ the ~~No-Action~~accompanying ~~letter is publicly available through the SEC’s website~~financial statements.

~~Fees~~3. ~~Paid~~New ~~to Principal Independent Public Registered~~ Accounting ~~Firm~~Pronouncements

~~The~~In ~~following~~February 2013, ~~table~~the ~~presents~~FASB ~~(in~~issued ~~thousands)~~ASU ~~aggregate~~2013-04, ~~fees~~Obligations ~~for~~Resulting ~~professional~~from ~~review~~Joint and ~~auditing~~Several ~~services~~Liability ~~billed~~Arrangements tofor Which the ~~Partnership~~Total ~~for~~Amount of the Obligation Is Fixed at the Reporting Date. The update requires an entity to measure obligations resulting from joint ~~fiscal~~and ~~years~~several ~~ended~~liability ~~December~~arrangements 31for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, ~~2012~~as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and ~~2011~~any byadditional amount the reporting entity expects to pay on behalf of its ~~independent~~co-obligors. ~~registered~~The ~~public~~guidance ~~accounting~~in ~~firm,~~the ~~Deloitte~~update &also ~~Touche~~requires ~~LLP,~~an entity to disclose the ~~member~~nature ~~firm~~and amount of ~~Deloitte~~the ~~Touche~~obligation ~~Tohmatsu,~~as ~~and~~well ~~their~~as ~~respective~~other ~~affiliates~~information ~~(collectively~~about those obligations. This guidance is effective for the first interim or annual period beginning on or after December 15, 2013. The adoption of this guidance is ~~“Deloitte~~not ~~Entities”):~~expected to have a material impact on our financial statements or disclosures.

	2012		2011
Audit-Related Fees (1)	$	248	$	345
Tax Fees (2)		82		80
Total Fees	$	330	$	425

Liability for Estimated Costs in Excess of Estimated Receipts during Liquidation

~~(1)~~Under ~~Audit~~the ~~related~~liquidation ~~fees~~basis ~~consisted~~ of ~~professional~~accounting, we ~~services~~are ~~performed~~required into ~~connection~~estimate ~~with~~ the ~~audit~~cash offlows ~~the~~from ~~Partnership’s~~operations ~~annual~~and ~~consolidated~~accrue ~~financial~~the ~~statements~~costs inassociated ~~2011,~~with implementing and ~~performance~~complying with the plan of ~~review~~liquidation. ~~procedures~~We ~~for~~currently ~~quarterly~~estimate ~~reports~~that onwe ~~Form~~will ~~10-Q.~~have ~~Because~~estimated wecosts ~~requested,~~of ~~and~~liquidation onin ~~March~~excess ~~28,~~of ~~2013~~operating ~~were~~cash ~~granted,~~flows from ~~No-Action~~our ~~relief~~estimated ~~from~~receipts. ~~the~~These ~~SEC~~amounts ~~regarding~~can ~~our~~vary ~~proposed~~significantly ~~modified~~due ~~reporting~~to, ~~described~~among ~~elsewhere~~other ~~herein~~things, wethe ~~have~~timing ~~not~~and ~~engaged~~estimates anfor ~~independent~~executing and ~~registered~~renewing ~~public~~leases, ~~accounting~~along ~~firm~~with tothe ~~provide~~estimates anof ~~audit~~tenant ~~for~~improvements ~~2012.~~incurred ~~During~~and ~~2012~~paid, the ~~Partnership’s~~timing ~~financial~~of ~~statements~~property ~~included~~sales, inthe ~~Forms~~timing and ~~10-Q~~amounts ~~were~~associated ~~reviewed~~with asdischarging ~~contemplated~~known ~~under~~and ~~SEC~~contingent ~~Regulation~~liabilities ~~S-X,~~and ~~Article~~the 10costs associated with winding up our operations. These costs are estimated and ~~Section~~are ~~302~~expected ofto ~~the~~be ~~Sarbanes-Oxley~~paid ~~Act~~over ofthe ~~2002~~liquidation period.

The change in the asset (2liability) ~~Tax~~for estimated ~~fees~~receipts ~~consist~~(costs) ~~principally~~in excess of ~~fees~~estimated ~~for~~costs ~~assistance~~(receipts) ~~with~~during ~~matters~~liquidation ~~related~~for tothe ~~tax~~year ~~compliance~~ended December 31, ~~tax~~2013 ~~planning~~was as ~~and~~follows ~~tax~~(amounts ~~advice.~~in thousands):

	January 1,			Cash Payments			Change in			December 31,
	2013			and (Receipts)			Estimates			2013

Asset:
Estimated net inflows from consolidation of operating activities	$	2,211		$	(778	)	$	(195	)	$	1,238
Liabilities:
Liquidation costs		(1,375	)		442			137			(796	)
Capital expenditures		(1,480	)		229			(49	)		(1,300	)
Total liabilities		(2,855	)		671			88			(2,096	)
Total liabilities for estimated cost in excess of estimated receipts during liquidation	$	(644	)	$	(107	)	$	(107	)	$	(858	)

~~PART~~5. IVNet Assets in Liquidation

~~Item~~The 15net assets in liquidation as of December 31, 2013 of $16.2 ~~Exhibits~~million would result in liquidating distributions paid to our beneficiaries per unit of approximately $1.50 per unit. These estimates for liquidating distributions per unit include projections of costs and expenses expected to be incurred during the period required to complete the plan of liquidation. These projections could change materially based on the timing of sales, ~~Financial~~the ~~Statement~~performance ~~Schedules~~of underlying assets and any changes in the underlying assumptions of projected cash flows.

~~(a) List of Documents Filed.~~F-6

1.Behringer ~~Unaudited~~Harvard ~~Financial Statements The list of the financial statements filed as part of this Annual Report on Form 10~~Short-KTerm isOpportunity Liquidating ~~set forth on page F-1 herein.~~Trust

2.Notes ~~Unaudited~~to Consolidated Financial ~~Statement Schedules~~Statements

~~Schedule II – Valuation and Qualifying Accounts~~(Unaudited)

~~Schedule~~6. ~~III -~~ Real Estate ~~and Accumulated Depreciation~~

3Our real estate investments are comprised of a hotel with adjoining retail space and approximately five acres of land at 1221 Coit Road. ~~Exhibits~~As of December 31, 2013, both of our consolidated properties are considered held for sale in accordance with the Plan. Under the liquidation basis of accounting, our properties are recorded at fair value less costs to sell.

~~The~~7. ~~list~~Leasing ~~of exhibits filed as part of this Annual Report on Form 10-K is submitted in the Exhibit Index following the financial statements in response to Item 601 of Regulation S-K.~~Activity

~~(b)~~Future ~~Exhibits.~~minimum base rental payments due to us over the next ten years under non-cancelable leases in effect as of December 31, 2013 are as follows:

The exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.

2014	$	602
2015		612
2016		602
2017		570
2018		552
Thereafter		887

Total	$	3,825

~~(c)~~The ~~Unaudited~~above ~~Financial~~base ~~Statement~~payments ~~Schedules~~are exclusive of any contingent rent amounts.

~~All financial statement schedules, except for Schedule II and III (see (a) 2~~8. ~~above),~~Related ~~have~~Party ~~been omitted because the required information of such schedules is not present in amounts sufficient to require a schedule or is included in the financial statements.~~Arrangements

45The Managing Trustee and certain of its affiliates are entitled to receive fees and compensation in connection with the management and sale of our assets, which fees are the same as those previously paid by the Partnership to Behringer Advisors II as General Partner. In its former capacity as General Partner of the Partnership, Behringer Advisors II and certain of its affiliates have also received fees in the past in connection with the Partnership’s Offering and acquisitions.

~~SIGNATURES~~For the management and leasing of our properties, we pay HPT Management Services, LLC, Behringer Harvard Short-Term Management Services, LLC or Behringer Harvard Real Estate Services, LLC, or their affiliates (individually or collectively referred to as “Property Manager”), property management and leasing fees equal to the lesser of: (a) the amounts charged by unaffiliated persons rendering comparable services in the same geographic area or (b)(1) for commercial properties that are not leased on a long-term net lease basis, 4.5% of gross revenues, plus separate leasing fees of up to 1.5% of gross revenues based upon the customary leasing fees applicable to the geographic location of the properties, and (2) in the case of commercial properties that are leased on a long-term net lease basis (ten or more years), 1% of gross revenues plus a one-time initial leasing fee of 3% of gross revenues payable over the first five years of the lease term. We reimburse the costs and expenses incurred by our Property Manager on our behalf, including the wages and salaries and other employee-related expenses of all on-site employees who are engaged in the operation, management, maintenance and leasing or access control of our properties, including taxes, insurance and benefits relating to such employees, and legal, travel and other out-of-pocket expenses that are directly related to the management of specific properties. For the year ended December 31, 2013, the Liquidating Trust incurred property management fees payable to the Property Manager of less than $0.1 million.

~~Pursuant~~We topay ~~the~~Behringer ~~requirements~~Advisors ofII ~~the~~or ~~Section~~its 13affiliates oran ~~15(d)~~annual asset management fee of 0.5% of the ~~Securities~~contract ~~Exchange~~purchase ~~Act~~price of ~~1934,~~our ~~the~~assets. ~~registrant~~Any ~~has~~portion ~~duly~~of ~~caused~~the ~~this~~asset management ~~report~~fee tomay be ~~signed~~deferred onand ~~its behalf~~paid byin a subsequent year. For the ~~undersigned~~year ended December 31, ~~thereunto~~2013, ~~duly~~the ~~authorized~~Liquidating Trust incurred asset management fees of approximately $0.2 million.

		Behringer Harvard Short-Term Opportunity Liquidating Trust
March 29, 2013	By:	/s/ Michael J. O’Hanlon
		Michael J. O’Hanlon
		Chief Executive Officer and President of Behringer Harvard Advisors II LP
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
March 29, 2013		/s/ Michael J. O’Hanlon
		Michael J. O’Hanlon
		Chief Executive Officer and President of Behringer Harvard Advisors II LP (Principal Executive Officer)
March 29, 2013		/s/ Gary S. Bresky
		Gary S. Bresky
		Chief Financial Officer of Behringer Harvard Advisors II LP
		(Principal Financial Officer)
March 29, 2013		/s/ S. Jason Hall
		S. Jason Hall
		Treasurer of Behringer Harvard Advisors II LP
		(Principal Accounting Officer)

We may pay Behringer Advisors II or its affiliates a debt financing fee for certain debt made available to us. For the year ended December 31, 2013, the Liquidating Trust incurred no such debt financing fees.

46We may reimburse Behringer Advisors II for costs and expenses paid or incurred to provide services to us including direct expenses and the costs of salaries and benefits of certain persons employed by those entities and performing services for us, as permitted by the Liquidating Trust Agreement. For the year ended December 31, 2013, the Liquidating Trust incurred such cost for administrative services totaling $0.2 million.

~~INDEX~~On TOJuly ~~UNAUDITED~~5, ~~FINANCIAL~~2012, ~~STATEMENTS~~the Partnership entered into a Note Modification Agreement and Assignment of Proceeds to amend the terms of a loan with Behringer Holdings (“BHH Loan”) with all borrowings and accrued interest due on May 31, 2014. The outstanding principal balance under the BHH Loan at December 31, 2013 was $8.8 million. Borrowings under the BHH Loan were used principally to finance general working capital and capital expenditures. The BHH Loan is unsecured, has an interest rate of 5.0% per annum and requires no monthly payments of interest or principal.

	Page
Unaudited Financial Statements
Consolidated Balance Sheets as of December 31, 2012 and 2011	F-2
Consolidated Statements of Operations for the Years Ended December 31, 2012, 2011 and 2010	F-3
Consolidated Statements of Equity (deficit) for the Years Ended December 31, 2012, 2011 and 2010	F-4
Consolidated Statements of Cash Flows for the Years Ended December 31, 2012, 2011 and 2010	F-5
Notes to Consolidated Financial Statements	F-6
Unaudited Financial Statement Schedules
Schedule II – Valuation and Qualifying Accounts	F-23
Schedule III – Real Estate and Accumulated Depreciation	F-24

F-7

FBehringer Harvard Short-1Term Opportunity Liquidating Trust

~~Behringer~~Notes ~~Harvard~~to ~~Short-Term~~Consolidated ~~Opportunity Fund~~Financial ~~I LP~~Statements

~~Consolidated Balance Sheets~~(Unaudited)

AsAt December 31, 2013, we had payables to related parties of ~~December~~approximately $2.5 million. The balance at December 31, 2013 ~~2012~~consisted primarily of management fees payable to the Advisor and ~~2011~~accrued interest on the BHH Loan. We are dependent on Behringer Advisors II, our Property Manager, or their affiliates, for certain services that are essential to us, including disposition decisions, property management and leasing services and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services to us, we will be required to obtain such services from other sources.

~~(Unaudited)~~9. Notes Payable

~~(in~~ We ~~thousands~~had notes payable totaling $40.7 million at December 31, ~~except~~2013 ~~unit~~of ~~amounts)~~which $31 million was secured by the hotel property and $8.8 million was to Behringer Holdings, a related party.

	December 31,			Decmber 31,
	2012			2011
Assets
Real estate
Land	$	5,114		$	13,459
Buildings and improvements, net		27,138			60,946
Total real estate		32,252			74,405
Real estate inventory, net		-			28,849
Cash and cash equivalents		5,286			3,296
Restricted cash		154			2,731
Accounts receivable, net		1,127			2,912
Prepaid expenses and other assets		745			828
Furniture, fixtures, and equipment, net		259			330
Deferred financing fees, net		769			591
Lease intangibles, net		80			2,084
Total assets	$	40,672		$	116,026
Liabilities and Equity (deficit)
Liabilities
Notes payable	$	32,294		$	111,724
Notes payable to related party		8,801			12,018
Accounts payable		544			692
Payables to related parties		1,799			3,424
Accrued liabilities		2,357			8,948
Total liabilities		45,795			136,806
Commitments and contingencies
Equity (deficit)
Partners' capital (deficit)
Limited partners - 11,000,000 units authorized, 10,803,839 units issued and outstanding at December 31, 2012 and 2011		(35,994	)		(52,909	)
General partners		38,437			38,437
Partners' capital (deficit)		2,443			(14,472	)
Noncontrolling interest (deficit)		(7,566	)		(6,308	)
Total equity (deficit)		(5,123	)		(20,780	)
Total liabilities and equity (deficit)	$	40,672		$	116,026

On December 20, 2012 the Mockingbird Commons Partnership entered into a promissory note agreement with Great American Life Insurance Company (“Palomar Lender”) to borrow $31 million (the “Hotel Palomar Loan”). The Hotel Palomar Loan bears interest at a fixed rate of 5.75% per annum and requires monthly payments of interest only during the first 18 months with 30-year amortization thereafter. The loan, which matures on December 19, 2015, contains two one year extension options if certain conditions are met and does not allow prepayment in whole or in part during the first 12 months. Prepayment in whole (but not in part) from months 13 through 30 will include a yield maintenance premium as defined under the terms of the loan. The Hotel Palomar Loan is secured by the associated property. We have guaranteed payment of certain recourse liabilities with respect to certain customary nonrecourse carveouts in favor of the Palomar Lender with respect to the loan.

~~See~~On ~~Notes~~July 5, 2012, the Partnership entered into a Note Modification Agreement and Assignment of Proceeds to ~~Consolidated~~amend ~~Financial~~the ~~Statements~~terms of the BHH Loan with all borrowings and accrued interest due on May 31, 2014. The outstanding principal balance under the BHH Loan at December 31, 2013 was $8.8 million. The BHH Loan is unsecured, has an interest rate of 5.0% per annum and requires no monthly payments of interest or principal.

~~F-2~~10. Subsequent Events

~~Behringer~~During ~~Harvard~~2013, ~~Short~~we recorded an accounts receivable of approximately $6.3 million related to final resolution of the back-~~Term~~end ~~Opportunity~~promoted interests on the sale of Landmark I & ~~Fund~~II which we sold in 2011. The sale contract for Landmark I LPand II provided that we retain a promoted interest in distributable cash related to the buildings, meaning that we would share in the profits and cash flows of these properties once a certain threshold had been met. We received $6.2 million in January 2014 related to final resolution of the back-end promoted interest and used the $6.2 million to pay down principal and interest.

~~Consolidated Statements of Operations~~F-8

~~For~~Behringer ~~the~~Harvard ~~Years Ended December 31, 2012,~~Short-Term ~~2011~~Opportunity ~~and~~Liquidating ~~2010~~Trust

~~(Unaudited)~~Real Estate and Accumulated Depreciation

~~(in~~Schedule ~~thousands, except per unit amounts)~~III

	2012			2011			2010
Revenues
Rental revenue	$	646		$	783		$	681
Hotel revenue		13,973			14,158			12,732
Real estate inventory sales		-			5,560			1,680
Total revenues		14,619			20,501			15,093
Expenses
Property operating expenses		11,144			11,825			11,168
Asset impairment loss		456			1,412			-
Inventory valuation adjustment		-			26,768			1,886
Interest expense, net		3,394			5,339			2,224
Real estate taxes, net		918			679			765
Property and asset management fees		765			891			655
General and administrative		1,161			896			1,143
Depreciation and amortization		1,017			2,008			2,213
Cost of real estate inventory sales		-			5,414			1,718
Total expenses		18,855			55,232			21,772
Interest income		295			179			132
Other income		200			-			-
Gain on sale of assets		-			-			-
Loss on derivative instrument, net		-			-			(39	)
Gain on troubled debt restructuring		7,163			-			125
Income (loss) from continuing operations before income taxes		3,422			(34,552	)		(6,461	)
Provision for income taxes		(137	)		(112	)		(166	)
Income (loss) from continuing operations		3,285			(34,664	)		(6,627	)
Discontinued operations
Loss from discontinued operations		(2,258	)		(15,568	)		(12,087	)
Gain on sale of discontinued operations		15,629			75			-
Income (loss) from discontinued operations		13,371			(15,493	)		(12,087	)
Net income (loss)		16,656			(50,157	)		(18,714	)
Noncontrolling interest in continuing operations		918			987			1,391
Noncontrolling interest in discontinued operations		(659	)		1,029			709
Net (income) loss attributable to noncontrolling interest		259			2,016			2,100
Net income (loss) attributable to the Partnership	$	16,915		$	(48,141	)	$	(16,614	)
Amounts attributable to the Partnership
Continuing operations	$	4,203		$	(33,677	)	$	(5,236	)
Discontinued operations		12,712			(14,464	)		(11,378	)
Net income (loss) attributable to the Partnership	$	16,915		$	(48,141	)	$	(16,614	)
Basic and diluted weighted average limited partnership units outstanding		10,804			10,804			10,804
Net income (loss) per limited partnership unit - basic and diluted
Income (loss) from continuing operations attributable to the Partnership	$	0.39		$	(3.12	)	$	(0.49	)
Income (loss) from discontinued operations attributable to the Partnership		1.18			(1.33	)		(1.05	)
Basic and diluted net income (loss) per limited partnership unit	$	1.57		$	(4.45	)	$	(1.54	)

December 31, 2013

~~See Notes to Consolidated Financial Statements.~~(Unaudited)

~~F-3~~(in thousands)

~~Behringer~~The ~~Harvard~~changes ~~Short-Term~~in ~~Opportunity~~total real estate ~~Fund~~for Ithe LPyear ended December 31, 2013 is as follows (in thousands):

Consolidated Statements of Equity (deficit)

	Year Ended
	December 31, 2013
Balance as of January 1, 2013	$	49,602
Capital expenditures		229
Liquidation adjustment (1)		(1,853	)
Balance as of December 31, 2013 (liquidation basis)	$	47,978

~~For~~(1) Represents the ~~Years~~net liquidation adjustment we made to the carrying value of our remaining real estate investments during the year ended December 31, ~~2012, 2011 and 2010~~2013.

~~(Unaudited)~~F-9

~~(in~~Index ~~thousands)~~to Exhibits

	General Partners				Limited Partners
Exhibit Number	Description
			Accumulated		Number of				Accumulated			Noncontrolling
2.1	Behringer Harvard Short-Term Opportunity Liquidating Trust Plan of Liquidation dated February 11, 2013 (previously filed and incorporated by reference to Form 8-K filed February 11, 2013)
	Contributions		Losses		Units		Contributions		Losses			Interest			Total
3.1	Second Amended and Restated Agreement of Limited Partnership of Behringer Harvard Short Term Opportunity Fund I L.P. dated September 5, 2008 (previously filed and incorporated by reference to Form 8-K filed September 5, 2008)
Balance as of January 1, 2010	$	24,667	$	-		10,804	$	74,522	$	(62,676	)	$	(2,117	)	$	34,396
3.2	Certificate of Limited Partnership of Behringer Harvard Short Term Opportunity Fund I L.P. (previously filed in and incorporated by reference to Behringer Harvard Short Term Opportunity Fund I L.P. Registration Statement on Form S-11, Commission File No. 333-100125, filed on September 27, 2002)
Net loss										(16,614	)		(2,100	)		(18,714	)
3.3	Certificate of Trust of Behringer Harvard Short-Term Opportunity Liquidating Trust dated February 13, 2013 (previously filed and incorporated by reference to Form 10-K filed March 29, 2013)
Notes receivable													(966	)		(966	)
4.1	Subscription Agreement and Subscription Agreement Signature Page (previously filed in and incorporated by reference to Exhibit C to Supplement No. 1 to the prospectus of Behringer Harvard Short Term Opportunity Fund I L.P. contained within Post-Effective Amendment No. 1 to Behringer Harvard Short Term Opportunity Fund I L.P. Registration Statement on Form S-11, Commission File No. 333-100125, filed on June 3, 2003)
Contributions		10,062											1,070			11,132
10.1	Note Modification Agreement and Assignment of Proceeds by and between Behringer Harvard Short Term Opportunity Fund I L.P. and Behringer Harvard Holdings, LLC (previously filed and incorporated by reference to Form 10-Q filed November 14, 2012)
Balance as of December 31, 2010		34,729		-		10,804		74,522		(79,290	)		(4,113	)		25,848
10.2	Pledge and Security Agreement by and between Behringer Harvard Short Term Opportunity Fund I L.P. and Behringer Harvard Holdings, LLC (previously filed and incorporated by reference to Form 10-Q filed November 14, 2012)
Net loss										(48,141	)		(2,016	)		(50,157	)
10.3	Liquidating Trust Agreement among Behringer Harvard Short-Term Opportunity Fund I LP, as grantor, Behringer Harvard Advisors II LP, as managing trustee, and CSC Trust Company of Delaware, as resident trustee (previously filed and incorporated by reference to Form 8-K filed on February 11, 2013)
Notes receivable													(377	)		(377	)
10.4	Promissory Note by and between Behringer Harvard Mockingbird Commons, LLC and Great American Life Insurance Company (previously filed and incorporated by reference to Form 10-K filed March 29, 2013)
Contributions		3,708											377			4,085
10.5	Deed of Trust, Fixture Filing, Assignment of Rents, and Security Agreement by Behringer Harvard Mockingbird Commons, LLC in favor of Rebecca S. Conrad, Trustee, for the benefit of Great American Life Insurance Company (previously filed and incorporated by reference to Form 10-K filed March 29, 2013)
Distributions													(179	)		(179	)
21.1*	List of Subsidiaries
Balance as of December 31, 2011		38,437		-		10,804		74,522		(127,431	)		(6,308	)		(20,780	)
31.1*	Rule 13a-14(a) or Rule 15d-14(a) Certification of Principal Executive Officer
Net income (loss)										16,915			(259	)		16,656
31.2*	Rule 13a-14(a) or Rule 15d-14(a) Certification of Principal Financial Officer
Notes receivable													(3,206	)		(3,206	)
32.1*	Section 1350 Certifications**
Contributions													3,206			3,206
Distributions													(999	)		(999	)
Balance as of December 31, 2012	$	38,437	$	-		10,804	$	74,522	$	(110,516	)	$	(7,566	)	$	(5,123	)

~~See~~*filed ~~Notes~~or tofurnished ~~Consolidated Financial Statements.~~herewith

F** In accordance with Item 601(b)(32) of Regulation S-4K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

Behringer Harvard Short-Term Opportunity Fund I LP

Consolidated Statements of Cash Flows

For the years ended December 31, 2012, 2011 and 2010

(Unaudited)

(in thousands)

	2012			2011			2010
Cash flows from operating activities
Net income (loss)	$	16,656		$	(50,157	)	$	(18,714	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		2,474			5,626			7,373
Asset impairment loss		456			21,765			5,118
Inventory valuation adjustment		-			26,768			1,886
(Gain) loss on sale of assets		(162	)		15			-
Gain on sale of discontinued operations		(15,629	)		(75	)		-
Gain on troubled debt restructuring		(8,031	)		(12,842	)		(125	)
Loss on derivative instrument, net		-			-			39
Changes in operating assets and liabilities:
Real estate inventory		(182	)		2,742			(14,236	)
Accounts receivable		(873	)		(131	)		78
Prepaid expenses and other assets		83			54			193
Lease intangibles		-			(1,466	)		(256	)
Accounts payable		(149	)		188			(415	)
Accrued liabilities		(429	)		3,735			(130	)
Payables or receivables with related parties		(1,625	)		1,275			1,423
Cash used in operating activities		(7,411	)		(2,503	)		(17,766	)
Cash flows from investing activities
Proceeds from sale of assets		44,466			24,508			-
Capital expenditures for real estate		(1,075	)		(1,439	)		(651	)
Change in restricted cash		2,577			(66	)		(519	)
Cash provided by (used in) investing activities		45,968			23,003			(1,170	)
Cash flows from financing activities
Proceeds from notes payable		34,669			11,435			15,858
Payments on notes payable		(66,251	)		(34,070	)		(4,308	)
Payments on note payable to related party		(3,217	)		325			575
Payments on capital lease obligations		-			(54	)		(66	)
Financing costs		(769	)		(409	)		(127	)
Distributions to noncontrolling interest holders		(999	)		(179	)		-
Contributions from noncontrolling interest holders		-			-			104
Contributions from general partners		-			3,708			6,976
Cash provided by (used in) financing activities		(36,567	)		(19,244	)		19,012
Net change in cash and cash equivalents		1,990			1,256			76
Cash and cash equivalents at beginning of year		3,296			2,040			1,964
Cash and cash equivalents at end of year	$	5,286		$	3,296		$	2,040

See Notes to Consolidated Financial Statements.

F-5

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

1. Business and Organization

Business

Behringer Harvard Short-Term Opportunity Fund I LP (which may be referred to as the “Partnership”) was a limited partnership formed in Texas on July 30, 2002 governed by an Agreement of Limited Partnership, as amended (the “Partnership Agreement”). Its general partners were Behringer Harvard Advisors II LP (“Behringer Advisors II”) and Robert M. Behringer (collectively, the “General Partners”). The Partnership was funded through capital contributions from the General Partners and initial limited partner on September 20, 2002 (date of inception) and offered its limited partnership units pursuant to a public offering which commenced on February 19, 2003 and was terminated on February 19, 2005 (the “Offering”). The Offering was a best efforts continuous offering, and new investors were admitted until the termination of the Offering. As of December 31, 2012 the limited partnership units were not listed on a national exchange. The Partnership used the proceeds from the Offering, after deducting offering expenses, to acquire interests in twelve properties. As of December 31, 2012, two of the twelve properties acquired remained in its portfolio. Effective as of January 31, 2013, Mr. Behringer ceased to be a general partner of the Partnership due to a permanent disability resulting in an Event of Withdrawal under the Partnership Agreement. Effective that same date, Mr. Behringer also resigned as Chairman of Behringer Advisors II.

On February 11, 2013 (the “Effective Date”), the Partnership completed its liquidation pursuant to a Plan of Liquidation (the “Plan”) adopted by its General Partner. The Plan provided for the formation of a liquidating trust, Behringer Harvard Short-Term Opportunity Liquidating Trust (which may be referred to herein as the “Liquidating Trust”, “we,” “us,” or “our”), for the purpose of completing the liquidation of the assets of the Partnership. In furtherance of the Plan, the Partnership entered into a Liquidating Trust Agreement (the “Liquidating Trust Agreement”) with Behringer Advisors II as managing trustee (the “Managing Trustee”), and CSC Trust Company of Delaware, as resident trustee. As of the Effective Date, each of the holders of limited partnership units in the Partnership received a pro rata beneficial interest in the Liquidating Trust in exchange for such holder’s interest in the Partnership. In accordance with the Plan and the Liquidating Trust Agreement, the Partnership has transferred all of its remaining assets and liabilities to us to be administered, disposed of or provided for in accordance with the terms and conditions set forth in the Liquidating Trust Agreement. The General Partners elected to liquidate the Partnership and transfer its remaining assets and liabilities to the Liquidating Trust as a cost saving alternative that the General Partners believed to be in the best interests of the investors. The expenses associated with operating a public reporting entity, like the Partnership, are comparatively high and therefore detract from distributable proceeds and returns it can make to its investors. The reorganization into a liquidating trust enables us to reduce costs associated with public reporting obligations and related audit expenses that are not applicable to the Liquidating Trust, helping to preserve capital throughout our disposition phase for the benefit of our investors. Cutting expenses and maximizing investor returns is a primary focus in this disposition phase.

Our principal demands for funds in the next twelve months and beyond will be for the payment of operating expenses, costs associated with lease-up and capital improvements for our remaining operating property and for the payment of recurring debt service, further principal paydowns and reserve requirements on our outstanding indebtedness as required by our lenders. During the year ended December 31, 2012, Behringer Advisors II or its affiliates waived reimbursement of administrative services totaling $0.2 million. During the year ended December 31, 2011, Behringer Advisors II or its affiliates waived reimbursement of administrative services, asset management fees and reimbursement of operating expenses totaling $4.1 million, of which $3.7 million is classified as a capital contribution from our General Partners on our consolidated statement of equity (deficit) and during the year ended December 31, 2010, Behringer Advisors II or its affiliates waived reimbursement of administrative expenses, asset management fees and reimbursement of operating expenses totaling $7.5 million, of which $7.0 million is classified as capital contributions from our General Partners on our consolidated statement of equity (deficit). In addition, Behringer Harvard Holdings LLC (“Behringer Holdings” or our “Sponsor”), forgave $2.8 million of principal borrowings and all accrued interest thereon under a loan agreement, which was also accounted for as a capital contribution by our General Partners. Although we have had to extend beyond our original target life of three to five years after the end of the Offering, we are designed to be self-liquidating and thus do not intend to continue as a long-term going concern.

In order to provide additional liquidity and execute the Partnership’s plan of selling assets and winding up operations over the next three years, it sold 1221 Coit Road and 250/290 John Carpenter Freeway during the year ended December 31, 2012. Proceeds from the sale of these properties were used to fully satisfy the existing indebtedness associated with the properties and pay down additional liabilities of the fund. As a result of current liquidity needs and unstable credit market conditions limiting available resources through additional borrowings for a closed-end, finite life fund, we may have to sell a property under terms that are less advantageous than we could achieve with a longer holding period. However, there can be no assurance these future dispositions will occur, or, if they occur, that they will help us to achieve our liquidity objectives.

F-6

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

The Partnership had notes payable totaling $41.1 million at December 31, 2012 of which $31 million was secured by the hotel property. We may use proceeds from the prior disposition of properties to continue making our scheduled debt service payments until the maturity dates of the loans are extended, the loans are refinanced or the outstanding balances of the loans are completely paid off. There is no guarantee that we will be able to refinance our borrowings with more or less favorable terms or extend the maturity dates of such loans. Our loan agreements stipulate that we comply with certain reporting and financial covenants. These covenants include, among other things, notifying the lender of any change in management and maintaining certain loan to value ratios. The Hotel Palomar loan is secured by the associated real property and we have guaranteed payment of certain customary nonrecourse carveouts in favor of the lender.

The effects of the recent economic downturn caused the Partnership to reconsider their strategy for certain properties where the Partnership believed the principal balance of the debt encumbering the property exceeded the value of the asset under current market conditions. In those cases where the Partnership believed the value of a property was not likely to recover in the near future, it believed there were more effective uses for its capital, and as a result debt service payments on certain property debt was ceased, resulting in defaults or events of default under the related loan agreements. The Partnership was in active negotiations with certain lenders to refinance or restructure debt in a manner that it believed was the best outcome for them and the unitholders and it resolved some of these recourse loans by negotiating agreements conveying the properties to the lender as it did with two properties during the year ended December 31, 2012 and two properties during the year ended December 31, 2011. There is no guarantee that we will not have to negotiate agreements conveying properties to lenders in the future.

2. Summary of Significant Accounting Policies

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates include such items as impairment of long-lived assets, inventory valuation adjustments, depreciation and amortization and allowance for doubtful accounts. Actual results could differ from those estimates.

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Partnership and the accounts of all of its wholly owned subsidiaries. All inter-company transactions, balances and profits have been eliminated in consolidation. These consolidated financial statements have been prepared according to the going concern basis of accounting. Subsequent to the Effective Date, our consolidated financial statements will be prepared on the liquidation basis of accounting. Interests in entities acquired are evaluated based on GAAP, which includes the requirement to consolidate entities deemed to be variable interest entities (“VIE”) in which we are the primary beneficiary. If the interest in the entity is determined not to be a VIE, then the entities are evaluated for consolidation based on legal form, economic substance, and the extent to which we have control and/or substantive participating rights under the respective ownership agreement. In the Notes to Consolidated Financial Statements, all dollar and share amounts in tabulation are in thousands of dollars and units, respectively, unless otherwise noted. We have evaluated subsequent events for recognition or disclosure in our consolidated financial statements.

Real Estate

Real estate assets are stated at cost less accumulated depreciation and any impairment. Depreciation is computed using the straight-line method, generally over estimated useful lives of 25 years for buildings and 39 years for hotels/mixed use properties. Major replacements where the betterment extends the useful life of the asset are capitalized and the replaced asset and corresponding accumulated depreciation are removed from the accounts. All other maintenance and repair items are charged to expense as incurred.

Real estate assets also includes costs for tenant improvements paid by the Partnership, including reimbursements to tenants for improvements that are owned by the Partnership and will remain our property after the lease expires.

F-7

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

Accumulated depreciation and amortization related to Partnership’s consolidated direct investments in real estate assets and related lease intangibles as of December 31, 2012 and 2011 were as follows:

	Buildings and			Lease
As of December 31, 2012	Improvements			Intangibles
Cost	$	32,823		$	165
Less: depreciation and amortization		(5,685	)		(85	)
Net	$	27,138		$	80

	Buildings and			Lease
As of December 31, 2011	Improvements			Intangibles
Cost	$	75,883		$	2,728
Less: depreciation and amortization		(14,937	)		(644	)
Net	$	60,946		$	2,084

Real Estate Held for Sale

In accordance with GAAP, properties are classified as held for sale when certain criteria are met. At that time the assets and obligations of the property are presented as held for sale separately in our consolidated balance sheet and the recording of depreciation and amortization expense related to that property is ceased. Properties held for sale are reported at the lower of their carrying amount or their estimated fair value, less estimated costs to sell. There were no properties classified as held for sale as of December 31, 2012 or 2011.

Impairment of Long-Lived Assets

Prior to the Effective Date, management monitored events and changes in circumstances indicating that the carrying amounts of the real estate assets may not be recoverable. Examples of the types of events and circumstances that would cause management to assess assets for potential impairment include, but were not limited to: a significant decrease in the market price of an asset; a significant adverse change in the manner in which the asset was being used; an accumulation of costs in excess of the acquisition basis plus construction of the property; major vacancies and the resulting loss of revenues; natural disasters; a change in the projected holding period; legitimate purchase offers and changes in the global and local markets or economic conditions. Assets may have at times been concentrated in limited geographic locations and, to the extent that the Partnership’s portfolio was concentrated in limited geographic locations, downturns specifically related to such regions may have resulted in tenants defaulting on their lease obligations at a portion of its properties within a short time period, which might have resulted in asset impairments. When such events or changes in circumstances were present, management assessed potential impairment by comparing estimated future undiscounted operating cash flows expected to be generated over the life of the asset and from its eventual disposition to the carrying amount of the asset. In the event that the carrying amount exceeded the estimated future undiscounted operating cash flows, the Partnership recognized an impairment loss to adjust the carrying amount of the asset to its estimated fair value. Management considered projected future undiscounted cash flows, trends, strategic decisions regarding future development plans, and other factors in their assessment of whether impairment conditions existed. While management believes estimates of future cash flows were reasonable, different assumptions regarding factors such as market rents, economic conditions, and occupancy rates could significantly affect these estimates. A change in these estimates and assumptions could have resulted in understating or overstating the book value of our investments, which could be material to the financial statements.

Management monitors events and changes in circumstances indicating that the carrying amounts of our real estate assets may not be recoverable. The Partnership recorded a non-cash impairment charge of $0.5 million during the year ended December 31, 2012 as a result of projected selling prices of the remaining land at 1221 Coit Road. In order to execute the business plan and provide additional liquidity, management identified a number of investments for possible disposition in 2011, thus decreasing the projected hold period for these investments. As a result of bona fide purchase offers which were below the Partnership’s carrying values, overall market declines and continuing vacancies, the Partnership recorded non-cash impairment charges of approximately $21.8 million for the year ended December 31, 2011 of which $20.4 million is included in discontinued operations. The inputs used to calculate the fair value of these assets included projected cash flow, risk-adjusted rate of return that we estimated would be used by a market participant in valuing this asset and third-party opinion of values.

Real estate values may continue to have fluctuations due to, among other things, the current economic environment and, as a result, there can be no assurance that there will be no impairments in the future. Any such charges could have an adverse effect on the consolidated financial position and operations.

F-8

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

Real Estate Inventory

Real estate inventory was stated at the lower of cost or fair market value and consisted of developed land, condominiums and constructed homes. In addition to land acquisition costs, land development costs and construction costs, costs included interest and real estate taxes, which were capitalized during the period beginning with the commencement of development and ending with the completion of construction.

Inventory Valuation Adjustments

For real estate inventory, at each reporting date, management compares the estimated fair value less costs to sell to the carrying value. An adjustment is recorded to the extent that the fair value less costs to sell is less than the carrying value. Management determines the estimated fair value based on comparable sales in the normal course of business under existing and anticipated market conditions. This evaluation takes into consideration factors such as current selling prices, estimated future selling prices, costs spent to date, estimated additional future costs, appraisals and management’s plans for the property. Estimates used in the determination of the estimated fair value of real estate inventory are based on factors known to management at the time such estimates are made. No inventory valuation adjustments were recognized for the year ended December 31, 2012. Inventory valuation adjustments of $26.3 million were recognized related to the Cassidy Ridge condominium development for the year ended December 31, 2011. For the years ended December 31, 2011, and 2010 inventory valuation adjustments of $0.5 million and $1.9 million were recognized, respectively, related to the constructed luxury homes and developed land lots at Bretton Woods. The remaining homes and land lots at Bretton Woods were sold on December 16, 2011.

Cash and Cash Equivalents

Management considers investments with original maturities of three months or less to be cash equivalents.

Restricted Cash

Restricted cash includes funds to be held in escrow for insurance, taxes and other reserves related to the Partnership’s consolidated properties as required by our lenders.

Accounts Receivable

Accounts receivable primarily consists of receivables from hotel guests and tenants related to the Partnership’s properties. The Partnership had no allowance for doubtful accounts associated with accounts receivable at December 31, 2012 and $0.1 million at December 31, 2011.

Prepaid Expenses and Other Assets

Prepaid expenses and other assets include hotel inventory as well as prepaid insurance. Hotel inventory consists of food, beverages, linens, glassware, china and silverware and is carried at the lower of cost or market value.

Furniture, Fixtures and Equipment

Furniture, fixtures and equipment are recorded at cost and depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Equipment, furniture and fixtures, and computer software are depreciated over 3 to 5 year lives. Maintenance and repairs are charged to operations as incurred while renewals or improvements to such assets are capitalized. Accumulated depreciation associated with furniture, fixtures and equipment totaled $6.7 million and $6.6 million at December 31, 2012 and 2011, respectively.

Deferred Financing Fees

Deferred financing fees are recorded at cost and are amortized using a straight-line method that approximates the effective interest method over the life of the related debt. Accumulated amortization associated with deferred financing fees was $0.5 million at December 31, 2012 and 2011.

Revenue Recognition

The Partnership recognized rental income generated from leases on real estate assets on the straight-line basis over the terms of the respective leases, including the effect of rent holidays, if any. The total net increase to rental revenues due to straight-line rent adjustments for the year ended December 31, 2012 and 2011 was $0.7 million and $0.2 million, respectively and includes amounts recognized in discontinued operations. The total net decrease to rental revenue due to straight-line rent adjustment for the year ended December 31, 2010 was $0.3 million and includes amounts recognized in discontinued operations. As discussed above, our rental revenue also includes amortization of above and below market leases. Any payments made to tenants that are considered lease incentives or inducements are being amortized to revenue over the life of the respective leases. Revenues relating to lease termination fees are recognized at the time that a tenant’s right to occupy the space is terminated and when we have satisfied all obligations under the agreement.

F-9

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

The Partnership also recognizes revenue from the operations of a hotel. Hotel revenues consisting of guest room, food and beverage, and other revenue are derived from the operations of the boutique hotel portion of Hotel Palomar and are recognized as the services are rendered.

Revenues from the sales of real estate inventory are recognized when sales are closed and title passes to the new owner, the new owner’s initial and continuing investment is adequate to demonstrate a commitment to pay, the new owner’s receivable is not subject to future subordination and we do not have a substantial continuing involvement. Amounts received prior to closing on sales of real estate inventory are recorded as deposits in our financial statements.

Income (Loss) Allocations

With respect to periods prior to the Effective Date, net income for each applicable accounting period is allocated to the partners as follows:

a) To the partners to the extent of and in proportion to allocations of net loss as noted below; and

b) Then, so as to cause the capital accounts of all partners to permit liquidating distributions to be made in the same manner and priority as set forth in the Partnership Agreement with respect to net cash distributions.

With respect to periods prior to the Effective Date, net loss for each applicable accounting period is allocated to the partners as follows:

a) To the partners having positive balances in their capital accounts (in proportion to the aggregate positive balances in all capital accounts) in an amount not to exceed such positive balance as of the last day of the fiscal year; and

b) Then, eighty-five percent (85%) to the limited partners and fifteen percent (15%) to the General Partners.

Concentration of Credit Risk

The Partnership had cash and cash equivalents in excess of federally insured levels on deposit in financial institutions. Management regularly monitors the financial stability of these financial institutions and believes that we are not exposed to any significant credit risk in cash and cash equivalents. Cash and cash equivalents are diversified between several banking institutions in an attempt to minimize exposure to any one of these entities.

Reportable Segments

The Partnership has determined that it has one reportable segment, with activities related to the ownership, development and management of real estate assets. Income producing properties generated 100% of the consolidated revenues for the years ending December 31, 2012, 2011 and 2010. The chief operating decision maker evaluates operating performance on an individual property level. Therefore, the properties are aggregated into one reportable segment.

Noncontrolling Interest

The Partnership holds a direct or indirect majority controlling interest in certain real estate partnerships and thus, consolidates the accounts with and into its accounts. Noncontrolling interests in partnerships represent the third-party partners’ proportionate share of the equity in consolidated real estate partnerships. Income and losses are allocated to noncontrolling interest holders based on their weighted average percentage ownership during the year.

During the years ended December 31, 2012, 2011 and 2010, the Partnership issued notes receivable totaling $3.2 million, $0.4 million and $1.0 million, respectively, to our 30% noncontrolling interest partner in Mockingbird Commons LLC (“Mockingbird Commons Partnership”). Proceeds from the notes receivable were recognized as capital contributions and contra-equity to the noncontrolling interest partner on the consolidated statement of equity (deficit) and comprehensive loss for the years ended December 31, 2012, 2011 and 2010, respectively.

Income Taxes

As a limited partnership, the Partnership is generally not subject to income tax. However, legal entities that conduct business in Texas are generally subject to the Texas margin tax, including previously non-taxable entities such as limited partnerships and limited liability partnerships. Although the law states that the margin tax is not an income tax, it has the characteristics of an income tax since it is determined by applying a tax rate to a base that considers both revenues and expenses. For the year ended December 31, 2012, the Partnership recognized a provision for current tax expense of approximately $137,000 related to the Texas margin tax. For the year ended December 31, 2011, the Partnership recognized a provision for current tax expense of approximately $101,000 and a provision for a deferred tax expense of approximately $11,000 related to the Texas margin tax. For the year ended December 31, 2010, the Partnership recognized a provision for current tax expense of approximately $173,000 and a provision for a deferred tax benefit of approximately $7,000 related to the Texas margin tax. The Partnership does not have any entity level uncertain tax positions.

F-10

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

Certain transactions may be subject to accounting methods for income tax purposes that differ from the accounting methods used in preparing these financial statements in accordance with GAAP. Accordingly, net income or loss and the resulting balances in the partners’ capital accounts reported for income tax purposes may differ from the balances reported for those same items in the accompanying financial statements.

Net Income (Loss) Per Limited Partnership Unit

Net income (loss) per limited partnership unit is calculated by dividing the net income (loss) allocated to limited partners for each period by the weighted average number of limited partnership units outstanding during such period. Net income (loss) per limited partnership unit on a basic and diluted basis is the same because the Partnership has no potential dilutive limited partnership units outstanding.

3. Fair Value Measurements

Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy was established by the Financial Accounting Standards Board that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as third-party broker valuation estimates, bona fide purchase offers, interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Management’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Nonrecurring Fair Value Measurements

Asset Impairment Losses

Prior to the Effective Date, management monitored events and changes in circumstances indicating that the carrying amounts of our real estate assets may not be recoverable. The Partnership recorded a non-cash impairment charge of $0.5 million during the year ended December 31, 2012 as a result of projected selling prices of the remaining land at 1221 Coit Road. Management evaluated 250/290 John Carpenter Freeway during the fourth quarter of 2010 and the first quarter of 2011 as a result of declining market rental rates and continuing vacancies at the property. An asset impairment loss of $2.3 million was recognized for the year ended December 31, 2010 which is included in discontinued operations. In order to execute the business plan and provide additional liquidity, management identified a number of investments for possible disposition in 2011, thus decreasing our projected hold period for those investments. The Partnership entered into a contract for the sale of 250/290 John Carpenter Freeway in 2011. The contract sales price of the property, which provides for contingent consideration, was less than the carrying value of the asset, thus an asset impairment loss of approximately $10.2 million was recognized for the year ended December 31, 2011 which is included in discontinued operations. On June 14, 2011 the Partnership entered into a contract for the sale of Landmark I and Landmark II and subsequently sold them on June 30, 2011. The contract sales price of $16.2 million, which retains a back-end promoted interest in distributable cash related to the buildings if a certain threshold is met, was less than the carrying value of the asset. As a result, an asset impairment loss of approximately $8.6 million was recognized which is included in discontinued operations in the consolidated statements of operations. 5050 Quorum was sold on December 16, 2011. The contract sales price was less than the carrying value and as a result an asset impairment loss was recognized for approximately $1.6 million which is included in discontinued operations. In addition, as a result of projected selling prices and the subsequent return of the property to the lender, an asset impairment loss of approximately $1.4 million was recognized for the year ended December 31, 2011 related to the undeveloped land held in Melissa, Texas. The Partnership also recognized a $2.8 million impairment charge for the year ended December 31, 2010 related to the Plaza Skillman property after certain tenants provided notice that they would not be renewing or extending their leases. The property was placed into receivership in October 2010 and the Partnership transferred ownership, pursuant to a foreclosure, to the associated lender on July 5, 2011. The impairment loss is included in discontinued operations in the consolidated statement of operations.

F-11

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

The inputs used to calculate the fair value of these assets included projected cash flow, risk-adjusted rates of return that management estimated would be used by a market participant in valuing this asset, purchase option prices and third-party opinions of values.

Inventory Valuation Adjustment

The housing and related condominium market recently experienced difficult conditions, and as a result the Partnership evaluated its real estate inventory for potential impairment. As a result of the evaluations, inventory valuation adjustments of $26.3 million were recognized related to the Cassidy Ridge condominium development and $0.5 million related to the luxury home and developed land lots at Bretton Woods during the year ended December 31, 2011. The Partnership also recognized inventory valuation adjustments of $1.9 million related to Bretton Woods during for the year ended December 31, 2010. The inputs used to calculate the fair value of these assets included current local market conditions, current selling prices, estimated future selling prices, costs spent to date, estimated additional future costs and appraisals.

The following fair value hierarchy table presents information about the Partnership’s assets measured at fair value on a nonrecurring basis for the years ended December 31, 2012 and 2011).

							Total
December 31, 2012	Level 1		Level 2		Level 3		Fair Value		Loss
Real estate	$	-	$	980	$	-	$	980	$	(456	)

							Total
December 31, 2011	Level 1		Level 2		Level 3		Fair Value		Loss (1)
Real estate	$	-	$	-	$	1,496	$	1,496	$	(1,412	)
Real estate inventory, net		-		2,289		23,331		25,620		(26,768	)
Total	$	-	$	2,289	$	24,827	$	27,116	$	(28,180	)

(1) Excludes approximately $20.4 million of impairment loss included in discontinued operations for the year ended December 31, 2011.

Fair Value Disclosures

Fair value of financial instruments

The Partnership’s notes payable totaling approximately $41.1 million and $123.7 million as of December 31, 2012 and 2011, respectively, have a fair value of approximately $40.8 million and $122.7 million, respectively. The fair value of the notes payable is categorized as Level 2 in the fair value hierarchy. The fair value is estimated using a discounted cash flow analysis valuation on the borrowing rates currently available to the Partnership for loans with similar terms and maturities. The fair value of the notes payable was determined by discounting the future contractual interest and principal payments by a market rate.

As of December 31, 2012 and 2011, management estimated the carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses were at amounts that reasonably approximated their fair value.

The fair value estimates presented herein are based on information available to our management as of December 31, 2012 and 2011. Management determined the above disclosure of estimated fair values using available market information and appropriate valuation methodologies. However, considerable judgment is necessary to interpret market data and develop the related estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Although our management is not aware of any factors that would significantly affect the estimated fair value amount, such amount has not been comprehensively revalued for purposes of these consolidated financial statements since that date, and current estimates of fair value may differ significantly from the amounts presented herein.

F-12

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

4. Real Estate

As of December 31, 2012, the Partnership owned interests in a hotel and approximately five acres of land at 1221 Coit Road. As of December 31, 2011, the Partnership owned interests in a data center, an office building, a hotel with an adjoining condominium development and a condominium project. The following table presents certain additional information about the remaining properties as of December 31, 2012:

Date

Ownership

Property name

Location

Acquired

Rooms/acres

Description

Interest

Hotel Palomar

Dallas, Texas

11/08/04

198 rooms

hotel

1221 Coit Road- Land

Dallas, Texas

10/04/04

5 acres

developed land

Dispositions

On May 17, 2012, Behringer Harvard Mountain Village, LLC, the Partnership’s wholly-owned subsidiary, entered into a Deed in Lieu of Foreclosure Agreement with Credit Union Liquidity Services, LLC (“CULS”) effective May 8, 2012, whereby ownership of Cassidy Ridge was transferred to CULS, resulting in full settlement of the outstanding debt to the lender. As a result, the Partnership recognized a gain on troubled debt restructuring of $7.1 million which is included in the consolidated statement of operations for the year ended December 31, 2012. On September 29, 2006 the borrower entered into a loan agreement with CULS to borrow a total principal amount of up to $27.7 million to construct Cassidy Ridge (“Cassidy Ridge Loan Agreement”). The outstanding principal balance, together with all accrued but unpaid interest, was due and payable on the maturity date of October 1, 2011. The loan, which was recourse to the Partnership, had an outstanding principal balance of approximately $28.4 million at May 17, 2012.

On June 8, 2012, the Mockingbird Commons Partnership entered into a Deed in Lieu of Foreclosure Agreement with Westdale Capital Investors I, Ltd (“Mockingbird Lender”) whereby 39 luxury high-rise condominiums and 1.4 acres of excess land located in Dallas, Texas (“Palomar Residences”) were transferred to the Mockingbird Lender, resulting in full settlement of the outstanding debt. As a result, the Partnership recognized a gain on troubled debt restructuring of $1.0 million of which $0.9 million is included in discontinued operations on the statement of operations for the year ended December 31, 2012. The outstanding principal balance under the loan agreement was approximately $19.4 million at June 8, 2012.

On August 16, 2012, the Partnership sold 1221 Coit Road for a contract sales price of $20.0 million and on August 17, 2012 it sold 250/290 John Carpenter for a contract sales price of $22.8 million. Proceeds from the sales of these properties were used to fully satisfy the existing indebtedness associated with the properties and additional liabilities of the fund.

5. Capitalized Costs

Cassidy Ridge was a 1.56 acre site in Telluride, Colorado on which the Partnership constructed 23 luxury condominium units. Certain costs associated with Cassidy Ridge development were capitalized. Construction of the condominiums was essentially complete at March 31, 2011 and as a result, capitalized indirect costs associated with the project were no longer capitalized. For the years ended December 31, 2011 and 2010 the Partnership capitalized a total of $1.6 million and $15 million, respectively, in costs associated with the development of Cassidy Ridge to real estate inventory. The amount of costs capitalized for the year ended December 31, 2011 does not include $1.7 million in vendor credits received. During the years ended December 31, 2011 and 2010, the Partnership capitalized $0.7 million and $2.2 million, respectively, in interest costs for Cassidy Ridge. As discussed in Note 4 above, the property was returned to the lender via a deed in lieu of foreclosure on May 17, 2012. The Partnership capitalized no costs in 2012.

F-13

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

6. Leasing Activity

Future minimum base rental payments due to us over the next ten years under non-cancelable leases in effect as of December 31, 2012 are as follows:

2013	$	582
2014		602
2015		613
2016		598
2017		571
Thereafter		1,440
Total	$	4,406

The above base payments are exclusive of any contingent rent amounts. Rental revenue in 2012, 2011 and 2010 did not include any amounts from contingent revenue.

As of December 31, 2012, four retail tenants at Hotel Palomar accounted for 10% or more of our aggregate annual rental revenues from our consolidated properties. Exhale Enterprises VIII, Inc., a New York based spa, accounted for 33% or $0.2 million of our rental revenue for the year ended December 31, 2012 under a lease that expires April 2020. DD+JJ Productions, LLC, a local full service salon, accounted for approximately 24% or more than $0.1 million of our rental revenue under a lease that expires April 2022. Mint Dentistry, a local dental office, accounted for approximately 14% or less than $0.1 million of our rental revenues under a lease that expires January 2020. In addition, Brackets, LLC, a local restaurant, accounted for 11% or less than $0.1 million of our rental revenues for the year ended December 31, 2012 under a lease that expired during 2012. During the year ended December 31, 2011, Brackets, LLC accounted for 27% or approximately $0.2 million, Exhale Enterprises VIII, Inc. accounted for approximately 24% or less than $0.2 million and DD+JJ Productions, LLC accounted for approximately 20% or less than $0.2 million of our rental revenue.

7. Notes Payable

The following table sets forth the carrying values of the Partnership’s notes payable on the consolidated properties as of December 31, 2012 and 2011:

	Balance				Stated	Maturity
Description	2012		2011		Interest Rate (1)	Date
1221 Coit Road Loan - Hampshire Lending	$	-	$	9,108	10.0%	11/1/2013
Palomar Residences - Westdale Capital Investors I, Ltd		-		22,804	Prime + 1.0%	10/1/2011
Hotel Palomar - Bank of America		-		41,218	30-day LIBOR + 3.5% (2)	12/21/2012
Hotel Palomar - Great American Life Insurance Company		31,000		-	5.75%	12/19/2015
Mockingbird Commons Partnership Loans		1,294		1,294	6.0% to 12.0%	10/9/2009
Cassidy Ridge Loan - Credit Union Liquidity Services		-		27,650	6.5%	10/1/2011
Revolver Agreement - Bank of America		-		9,650	30-day LIBOR + 3.5%	12/21/2012
Notes payable		32,294		111,724
BHH Loan - related party		8,801		11,118	5.0%	3/29/2014
BHH Cassidy Ridge Loan - related party		-		900	5.0%	10/1/2011
Notes payable related party		8,801		12,018
	$	41,095	$	123,742

(1) For each of our loans that are in default, we may incur default interest rates.

(2) 30-day LIBOR was 0.21% at December 31, 2012.

The Partnership had notes payable totaling $41.1 million at December 31, 2012 of which $31 million was secured by the hotel property and $1.3 million had matured. We may use proceeds from the prior disposition of properties to continue making our scheduled debt service payments until the maturity dates of the loans are extended, the loans are refinanced or the outstanding balances of the loans are completely paid off. There is no guarantee that we will be able to refinance our borrowings with more or less favorable terms or extend the maturity dates of such loans.

The effects of the recent economic downturn caused the Partnership to reconsider their strategy for certain properties where it believed the principal balance of the debt encumbering the property exceeded the value of the asset under current market conditions. In those cases where the Partnership believed the value of a property was not likely to recover in the near future, it believed there were more effective uses for its capital, and as a result debt service payments on certain property debt was ceased, resulting in defaults or events of default under the related loan agreements. The Partnership was in active negotiations with certain lenders to refinance or restructure debt in a manner that it believed was the best outcome for them and the unitholders and it resolved some of these recourse loans by negotiating agreements conveying the properties to the lender as it did with two properties during the year ended December 31, 2012 and two properties during the year ended December 31, 2011. There is no guarantee that we will not have to negotiate agreements conveying properties to lenders in the future.

F-14

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

The Mockingbird Commons Partnership entered into a promissory note payable to CULS, an unaffiliated third party, whereby the borrower was permitted to borrow up to $34 million (“Palomar Residences Loan Agreement”) to construct the Palomar Residences. The borrower did not pay the outstanding principal balance, together with all accrued, but unpaid interest due on the maturity date of October 1, 2011, as the Partnership continued to negotiate with the lender. In December 2011, the parties had negotiated a recapitalization of the Palomar Residences Loan Agreement; however, the transaction ultimately was not approved by the credit union regulator and could not be completed. Subsequently, on January 5, 2012, the borrower received notice from the lender demanding immediate payment of the entire outstanding loan balance and all accrued but unpaid interest. The note was subsequently sold to the Mockingbird Lender on April 18, 2012. On June 8, 2012, the borrower entered into a Deed in Lieu of Foreclosure Agreement with the Mockingbird Lender whereby ownership of the Palomar Residences was transferred to the lender, resulting in full settlement of the outstanding debt. The outstanding principal balance under the Palomar Residences Loan Agreement, which was recourse to the Partnership, was approximately $19.4 million at June 8, 2012.

Behringer Harvard Mountain Village, LLC entered into the Cassidy Ridge Loan Agreement to construct Cassidy Ridge. The outstanding principal balance, together with all accrued, but unpaid interest was due and payable on the maturity date of October 1, 2011, which amount was not paid as the Partnership continued to negotiate with the lender. In December 2011, the parties had negotiated a recapitalization of the Cassidy Ridge Loan Agreement; however, the transaction ultimately was not approved by the credit union regulator and could not be completed. Subsequently, on January 5, 2012, the borrower received notice from the lender demanding immediate payment of the entire outstanding principal balance of $27.7 million and all accrued but unpaid interest. On May 17, 2012, the borrower entered into a Deed in Lieu of Foreclosure Agreement with CULS whereby ownership of Cassidy Ridge was transferred to the lender, resulting in full settlement of the outstanding debt. The loan, which was recourse to the Partnership, had an outstanding principal balance of approximately $28.4 million at May 17, 2012.

On March 29, 2011, the Partnership entered into the Fifth Amended and Restated Promissory Note to amend the terms of a loan from Behringer Holdings (the “BHH Loan”) to a maximum borrowing amount of $25 million with all borrowings and accrued interest due on March 29, 2014. The outstanding principal balance under the BHH Loan at December 31, 2012 and December 31, 2011 was $8.8 million and $11.1 million, respectively. Borrowings under the BHH Loan are being used principally to finance general working capital and capital expenditures. The BHH Loan is unsecured, has an interest rate of 5.0% per annum and requires no monthly payments of interest or principal. On July 5, 2012 the Partnership entered into the Note Modification Agreement and Assignment of Proceeds with Behringer Holdings whereby the maturity date of the BHH Loan was extended to May 31, 2014. In order to secure payment of the BHH Loan, the Partnership assigned net proceeds from the sale of 1221 Coit Road, 250/290 John Carpenter Freeway and the back-end promoted interest in distributable cash related to Landmark I & II and 5050 Quorum properties which were sold in 2011. On November 9, 2012 the Partnership entered into the Pledge and Security Agreement with Behringer Holdings whereby net proceeds from the sale of the remaining real estate and the remaining land at 1221 Coit Road, as well as the net proceeds previously assigned under the Note Modification Agreement and Assignment of Proceeds, were pledged as security for the payment of all obligations owed to Behringer Holdings or its subsidiaries, including principal, interest, fees or reimbursement of expenses. Unless approved, net proceeds from the sale of real estate, if not reinvested in remaining properties, are to be remitted to Behringer Holdings within 365 days of the sale. On December 28, 2012 the Partnership remitted net proceeds of $6 million to Behringer Holdings and its subsidiaries to completely payoff the BHH Cassidy Ridge Loan and for payment of fees, expenses, interest and principal on the BHH Loan.

F-15

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

While there have been signs of improvement in the overall economy, management does not expect conditions to improve significantly in the near future. As a result, we expect that we may continue to require this liquidity support from our Sponsor during 2013. Our Sponsor, subject to its approval, may make available to us additional funds under the BHH Loan through 2013, potentially up to the borrowing limits thereunder. There is no guarantee that our Sponsor will provide additional liquidity to us.

On October 1, 2010, Behringer Harvard Mountain Village, LLC entered into a loan with Behringer Harvard Holdings, LLC (the “BHH Cassidy Ridge Loan”). Proceeds from the loan were used to complete construction of the condominiums at Cassidy Ridge. The loan bears interest at 5% and matured on October 1, 2011. The Partnership completely paid off the outstanding principal of $0.9 million and all accrued but unpaid interest on the loan on December 28, 2012.

The Hotel Palomar Loan requires payments of interest only during the first 18 months with 30-year amortization thereafter. Our remaining loans accrue interest that may be paid at any time. Further, the loan agreements stipulate that the Partnership comply with certain reporting and financial covenants. These covenants include, among other things, notifying the lender of any change in management and maintaining certain loan to value ratios. The Hotel Palomar Loan is secured by the associated real property and we have guaranteed payment of certain recourse liabilities with respect to certain customary nonrecourse carveouts in favor of the Palomar Lender. At December 31, 2012 the Partnership or its subsidiaries were in default under loans made by the Mockingbird Commons Partnership noncontrolling interest partner in the amount of $1.3 million.

Troubled Debt Restructuring

On June 30, 2011, the Partnership sold its Landmark I and II properties for a contract sales price of $16.2 million. The contract sales price retains a back-end promoted interest in distributable cash related to the buildings after the respective buyer has achieved a specified return. Proceeds from the sale were used to fully satisfy the existing indebtedness associated with the properties, resulting in a gain on troubled debt restructuring of approximately $4.9 million which is included in discontinued operations. Additionally, on July 5, 2011, pursuant to a foreclosure, the Partnership transferred ownership of the Plaza Skillman property to the associated lender and as a result, it recognized a gain on troubled debt restructuring of approximately $3.1 million which is included in discontinued operations.

On December 16, 2011, the Partnership sold 5050 Quorum for a contract sales price of $6.8 million. The sale contract provides for that it retain a back-end promoted interest in distributable cash related to the building after the respective buyer has achieved a specified return. Proceeds from the sale were used to fully satisfy the existing indebtedness associated with the property, resulting in a gain on troubled debt restructuring of approximately $4.8 million which is included in discontinued operations.

On May 17, 2012 the Partnership entered into a Deed in Lieu of Foreclosure Agreement with CULS effective May 8, 2012, transferring ownership of Cassidy Ridge to CULS, resulting in full settlement of the outstanding debt to the lender resulting in a gain on troubled debt restructuring of $7.1 million which is included in the consolidated statement of operations for the year ended December 31, 2012. The loan, which was recourse to the Partnership, had an outstanding principal balance of approximately $28.4 million at May 17, 2012.

On June 8, 2012, the Mockingbird Commons Partnership entered into a Deed in Lieu of Foreclosure Agreement with the Mockingbird Lender whereby the Palomar Residences were transferred to the Mockingbird Lender, resulting in full settlement of the outstanding debt resulting in a gain on troubled debt restructuring of $1.0 million of which $0.9 million is included in discontinued operations on the statement of operations for the year ended December 31, 2012. The outstanding principal balance under the loan agreement was approximately $19.4 million at June 8, 2012.

F-16

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

The following table summarizes the Partnership’s contractual obligations for principal payments on notes payable (excluding unamortized premiums) as of December 31, 2012:

Year	Amount
2013	$	1,294
2014		8,987
2015		30,814
Thereafter		-
Total notes payable	$	41,095

8. Derivative Instruments and Hedging Activities

The Partnership may be exposed to the risk associated with variability of interest rates that might impact cash flows and results of operations. The hedging strategy of entering into interest rate swaps, therefore, is to eliminate or reduce, to the extent possible, the volatility of cash flows.

Interest calculated on borrowings under the loan agreement related to the Hotel Palomar Bank of America Loan was based on the 30-day LIBOR plus an applicable margin. The Partnership entered into an interest rate swap agreement associated with the Hotel Palomar and Residences loan to hedge the volatility of the designated benchmark interest rate, the 30-day LIBOR. The swap agreement was designated as a hedging instrument. Accordingly, changes in the fair value of the interest rate swap agreement were recorded in accumulated other comprehensive income on the consolidated balance sheet. The Partnership entered into an amendment to the swap agreement in October 2008, thus terminating the original interest rate swap. The amended interest rate swap, which expired in September 2010, was entered into as an economic hedge against the variability of future interest rates on the variable interest rate borrowings associated with the Bank of America loan financing the Hotel Palomar and Residences. As a result, changes in the fair value of the amended interest rate swap and related interest expense were recognized in “Loss on derivative instruments, net” on the consolidated statement of operations. For the year ended December 31, 2010, the Partnership recorded a gain of $0.9 million to adjust the carrying amount of the interest rate swap to its fair value and $0.9 million for related interest expense. The Partnership had no derivative financial instruments on the consolidated balance sheet at December 31, 2012 and 2011.

The table below presents the effect of the Partnership’s derivative financial instruments on the consolidated statements of operations for the year ended December 31, 2010.

		Amount of Gain on Derivatives Recognized in Income
Derivatives not designated as hedging instruments	Location of Gain on Derivatives Recognized in Income	Year ended December 31, 2010
Interest rate swap	Loss on derivative instruments, net	$	879

9. General and Administrative Expenses

General and administrative expenses for the years ended December 31, 2012, 2011 and 2010 consisted of the following:

	Year ended December 31,
	2012		2011		2010
Accounting expense	$	313	$	375	$	400
Legal fees		237		93		306
Advisor administrative services		171		-		-
Directors' and officers' insurance		141		132		127
Tax preparation fees		123		153		146
Transfer agent fees		92		97		106
Printing		37		29		32
Investor relations		20		17		10
Other		27		-		16
	$	1,161	$	896	$	1,143

10. Related Party Arrangements

The Managing Trustee and certain of its affiliates are entitled to receive fees and compensation in connection with the management and sale of our assets, which fees are the same as those previously paid by the Partnership to Behringer Advisors II as General Partner, and in its former capacity as General Partner of the Partnership, Behringer Advisors II and certain of its affiliates have also received fees in the past in connection with the Partnership’s Offering and acquisitions.

F-17

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

For the management and leasing of our properties, we pay HPT Management Services, LLC, Behringer Harvard Short-Term Management Services, LLC or Behringer Harvard Real Estate Services, LLC, or their affiliates (individually or collectively referred to as “Property Manager”), property management and leasing fees equal to the lesser of: (a) the amounts charged by unaffiliated persons rendering comparable services in the same geographic area or (b)(1) for commercial properties that are not leased on a long-term net lease basis, 4.5% of gross revenues, plus separate leasing fees of up to 1.5% of gross revenues based upon the customary leasing fees applicable to the geographic location of the properties, and (2) in the case of commercial properties that are leased on a long-term net lease basis (ten or more years), 1% of gross revenues plus a one-time initial leasing fee of 3% of gross revenues payable over the first five years of the lease term. We reimburse the costs and expenses incurred by our Property Manager on our behalf, including the wages and salaries and other employee-related expenses of all on-site employees who are engaged in the operation, management, maintenance and leasing or access control of our properties, including taxes, insurance and benefits relating to such employees, and legal, travel and other out-of-pocket expenses that are directly related to the management of specific properties. During the years ended December 31, 2012, 2011 and 2010 the Partnership incurred property management fees payable to the Property Manager of $0.1 million, $0.2 million and $0.4 million, respectively, of which approximately $10,000 is included in continuing operations for each year.

We pay Behringer Advisors II or its affiliates an annual asset management fee of 0.5% of the contract purchase price of our assets. Certain asset management fees have been deferred by Behringer Advisors II. During the year ended December 31, 2012, the Partnership incurred asset management fees of $0.5 million, of which approximately $0.2 million was included in discontinued operations. During the year ended December 31, 2011, the Partnership incurred asset management fees of $1.0 million, of which approximately $0.1 million was capitalized to real estate inventory, $0.5 million was included in discontinued operations and approximately $50,000 was waived. During the year ended December 31, 2010, the Partnership incurred asset management fees of $1.1 million, of which $0.2 million was capitalized to real estate, $0.6 million was included in discontinued operations and $65,000 was waived.

As the Partnership did previously, in connection with the sale of our properties, we will pay to our Managing Trustee, Behringer Advisors II, or their affiliates a real estate commission in an amount not exceeding the lesser of: (a) 50% of the reasonable, customary and competitive real estate brokerage commissions customarily paid for the sale of a comparable property in light of the size, type and location of the property, or (b) 3% of the gross sales price of each property, subordinated to distributions to beneficiaries from the sale proceeds of an amount which, together with distributions to Partnership’s limited partners prior to the Effective Date, will equal (1) 100% of their capital contributions plus (2) a 10% annual cumulative (noncompounded) return of their net capital contributions. Subordinated real estate commissions that are not payable at the date of sale, because beneficiaries have not yet received their required minimum distributions, will be deferred and paid at such time as these subordination conditions have been satisfied. In addition, after the beneficiaries have received a return of their net capital contributions and a 10% annual cumulative (noncompounded) return on their net capital contributions, then the Behringer Advisor II is entitled to receive 15% of the remaining residual proceeds available for distribution (a subordinated participation in net sale proceeds and distributions); provided, however, that in no event will Behringer Advisor II receive in the aggregate more than 15% of sale proceeds remaining after the beneficiaries have received a return of their net capital contributions. Since the Partnership was subject to the same conditions and such conditions had not been met, the Partnership incurred no such real estate commissions for the years ended December 31, 2012, 2011 and 2010.

We may pay Behringer Advisors II or its affiliates a debt financing fee for certain debt made available to us. The Partnership incurred such debt financing fees of $0.2 million for the year ended December 31, 2012. No such debt financing fees were incurred for the years ended December 31, 2011 and 2010.

We may reimburse Behringer Advisors II for costs and expenses paid or incurred to provide services to us including direct expenses and the costs of salaries and benefits of certain persons employed by those entities and performing services for us, as permitted by the Liquidating Trust Agreement. For the year ended December 31, 2012 the Partnership incurred $0.4 million for administrative services of which $0.2 million was waived. For the year ended December 31, 2011 the Partnership incurred $0.3 million for administrative services, all of which was waived. In addition, Behringer Advisors II or its affiliates waived $3.7 million for reimbursement of operating expenses for the year ended December 31, 2011, which is classified as a capital contribution on the consolidated statement of equity (deficit). For the year ended December 31, 2010, the Partnership incurred such costs for administrative services totaling $0.4 million, all of which was waived. In addition, Behringer Advisors II or its affiliates waived $7.0 million for reimbursement of operating expenses for the year ended December 31, 2010.

F-18

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

On March 29, 2011, the Partnership entered into the Fifth Amended and Restated Promissory Note to amend the terms of a loan from Behringer Holdings (the “BHH Loan”) to a maximum borrowing amount of $25 million with all borrowings and accrued interest due on March 29, 2014. The outstanding principal balance under the BHH Loan at December 31, 2012 and December 31, 2011 was $8.8 million and $11.1 million, respectively. Borrowings under the BHH Loan are being used principally to finance general working capital and capital expenditures. The BHH Loan is unsecured, has an interest rate of 5.0% per annum and requires no monthly payments of interest or principal. On July 5, 2012 the Partnership entered into the Note Modification Agreement and Assignment of Proceeds with Behringer Holdings whereby the maturity date of the BHH Loan was extended to May 31, 2014. In order to secure payment of the BHH Loan, the Partnership assigned net proceeds from the sale of 1221 Coit Road, 250/290 John Carpenter Freeway and the back-end promoted interest in distributable cash related to Landmark I & II and 5050 Quorum properties which were sold in 2011. On November 9, 2012 the Partnership entered into the Pledge and Security Agreement with Behringer Holdings whereby net proceeds from the sale of the remaining real estate and the remaining land at 1221 Coit Road, as well as the net proceeds previously assigned under the Note Modification Agreement and Assignment of Proceeds, were pledged as security for the payment of all obligations owed to Behringer Holdings or its subsidiaries, including principal, interest, fees or reimbursement of expenses. Net proceeds from the sale of real estate, if not reinvested in remaining properties, are to be remitted to Behringer Holdings within 365 days of the sale. On December 28, 2012 the Partnership remitted net proceeds of $6 million to Behringer Holdings and its subsidiaries to completely payoff the BHH Cassidy Ridge Loan and for payment of fees, expenses, interest and principal on the BHH Loan.

At December 31, 2012 and 2011, the Partnership had payables to related parties of approximately $1.8 million and $3.4 million, respectively. The balance at December 31, 2012 consisted primarily of management fees payable to the Property Manager. The balance at December 31, 2011 consisted primarily of management fees payable to the Property Manager and interest accrued on the BHH Loan.

We are dependent on Behringer Advisors II, our Property Manager, or their affiliates, for certain services that are essential to us, including disposition decisions, property management and leasing services and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services to us, we will be required to obtain such services from other sources.

11. Discontinued Operations

The Partnership sold 1221 Coit Road on August 16, 2012 for a contract sales price of $20.0 million. In addition, 250/290 John Carpenter was sold on August 17, 2012 for a contract sales price of $22.8 million. Proceeds from the sale of these properties were used to fully satisfy the existing indebtedness associated with the properties and additional liabilities of the fund. On June 8, 2012, the Mockingbird Commons Partnership transferred ownership of the condominiums at the Palomar Residences to the Mockingbird Lender. This resulted in full settlement of the outstanding debt resulting in a gain on troubled debt restructuring of $1.0 million of which $0.9 million is included in discontinued operations for the year ended December 31, 2012. On December 16, 2011, 5050 Quorum was sold for a contract sales price of $6.8 million. Proceeds from the sale were used to fully satisfy the existing indebtedness associated with the property. On June 30, 2011, Landmark I and Landmark II was sold. The contract sales price for Landmark I and II of $16.2 million was used to fully satisfy the existing indebtedness associated with the property. In addition, on July 5, 2011, pursuant to a foreclosure, the Partnership transferred ownership of the Plaza Skillman property to the associated lender.

In accordance with GAAP, the results of operations for the properties above are classified as discontinued operations in the accompanying consolidated statements of operations. Certain amounts in the accompanying financial statements have been recast to conform to the current presentation. The following table summarizes the results of discontinued operations for the years ended December 31, 2012, 2011 and 2010:

F-19

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

	2012		2011			2010
Total revenues	$	2,719	$	7,212		$	9,675
Expenses
Property operating expenses		1,649		4,798			5,411
Asset impairment loss		-		20,353			5,118
Interest expense		2,140		4,868			3,572
Real estate taxes		723		1,516			1,821
Property and asset management fees		277		805			1,082
Depreciation and amortization		1,219		3,273			4,771
Total expenses		6,008		35,613			21,775
Interest income		-		6			13
Gain (loss) on sale of assets		162		(15	)		-
Gain on sale of operations		15,629		75			-
Gain on troubled debt restructuring		869		12,842			-
Net income (loss)	$	13,371	$	(15,493	)	$	(12,087	)

12. Income Tax Basis Net Income

The Partnership’s income tax basis net income for the years ended December 31, 2012, 2011 and 2010 is recalculated as follows:

	Year ended December 31,
	2012			2011			2010
Net loss attributable to the Partnership for financial statement purposes	$	16,915		$	(48,141	)	$	(16,614	)
Adjustments:
Bad debt expense		-			(43	)		(49	)
Straight line rent		133			194			438
Prepaid rent		(159	)		(243	)		(71	)
Other		282			(78	)		50
Forgiveness of debt by affiliate		7,533			-			10,062
Depreciation		(150	)		52			231
Amortization		(749	)		(1,240	)		127
Inventory valuation adjustment		-			26,768			(197	)
Asset impairment loss		456			21,765			2,345
Cost of real estate inventory sales adjustment		-			(2,539	)		(874	)
Gain on dispositions		(53,166	)		(19,610	)		-
Loss from investments in partnerships		(7,395	)		(495	)		(225	)
Taxable loss	$	(36,300	)	$	(23,610	)	$	(4,777	)

Taxable income differs from net income for financial reporting purposes principally because of differences in the timing of recognition of depreciation, impairment losses and gains (losses) from sales of property. As a result of these differences, the tax value of our fixed assets exceeds the book basis by approximately $0.6 million at December 31, 2012 and $55.5 million at December 31, 2011.

F-20

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

13. Quarterly Financial Data

The following table presents selected quarterly financial data for each quarter during the years ended December 31, 2012 and 2011 (in thousands, except per unit amounts).

	2012 Quarters Ended
	March 31			June 30			September 30			December 31
Total revenues	$	3,662		$	3,895		$	3,504			3,558
Loss from continuing operations		(1,124	)		6,205			(624	)		(1,172	)
Income (loss) from discontinued operations		(1,421	)		(585	)		15,444			(67	)
Net loss attributable to noncontrolling interest		560			226			(841	)		314
Net loss attributable to the Partnership	$	(1,985	)	$	5,846		$	13,979		$	(925	)
Weighted average number of limited partnership units outstanding		10,804			10,804			10,804			10,804
Basic and diluted net loss per limited partnership unit	$	(0.19	)	$	0.54		$	1.29		$	(0.07	)

	2011 Quarters Ended
	March 31			June 30			September 30			December 31
Total revenues	$	4,292		$	3,902		$	5,560		$	6,747
Loss from continuing operations		(350	)		(1,880	)		(24,271	)		(8,163	)
Income (loss) from discontinued operations		(4,908	)		(12,925	)		(297	)		2,637
Net loss attributable to noncontrolling interest		284			494			546			692
Net loss attributable to the Partnership	$	(4,974	)	$	(14,311	)	$	(24,022	)	$	(4,834	)
Weighted average number of limited partnership units outstanding		10,804			10,804			10,804			10,804
Basic and diluted net loss per limited partnership unit	$	(0.46	)	$	(1.32	)	$	(2.23	)	$	(0.44	)

14. Subsequent Events

On February 11, 2013, the Partnership completed its liquidation pursuant to a Plan of Liquidation adopted by its General Partner, which provided for the formation of a liquidating trust for the purpose of winding up the Partnership’s affairs and liquidating the Partnership’s assets, including, but not limited to, the sale of its remaining real estate assets, to make appropriate provision for the Partnership’s remaining obligations and to make special distributions to our investors of available liquidation proceeds.

In furtherance of the Plan, the Partnership entered into the Liquidating Trust Agreement with the Managing Trustee, and the resident trustee. As of the Effective Date, each of the holders of limited partnership units in the Partnership received a pro rata beneficial interest in exchange for such holder’s interest in the Partnership.

In accordance with the Plan of liquidation and the Liquidating Trust Agreement, the Partnership has transferred all of its remaining assets and liabilities to us to be administered, disposed of or provided for in accordance with the terms and conditions set forth in the Liquidating Trust Agreement. On the Effective Date, the Partnership filed a Form 15 with the SEC to terminate the registration of the limited partnership units in the Partnership under the Exchange Act and announced it would cease filing reports under that act. Our Managing Trustee will file with the SEC annual reports on Form 10-K that contain unaudited financial statements based on the liquidation basis of accounting and current reports on Form 8-K to disclose material events relating to us. We requested, and on March 28, 2013 were granted, No-Action relief from the SEC regarding our proposed modified reporting. As a result of this No-Action relief, we will not file quarterly reports on Form 10-Q. A copy of the No-Action letter is publicly available through the SEC’s website.

Our existence as a liquidating trust will terminate upon the earliest of (i) the distribution of all of our assets in accordance with the terms of the Liquidating Trust Agreement, or (ii) the expiration of a period of three years from the Effective Date. Our existence may, however, be extended beyond the three year term if our Managing Trustee determines that an extension is reasonably necessary to wind up our affairs.

On January 31, 2013, Robert Behringer informed the Partnership that, as of January 31, 2013, he received a medical diagnosis of a condition affecting his speech causing Mr. Behringer to be permanently disabled. As a result, an Event of Withdrawal occurred under the Partnership Agreement, and Mr. Behringer ceased to be a general partner of the Partnership. Mr. Behringer also informed the Partnership that he resigned as Chairman of Behringer Advisors II effective January 31, 2013. Mr. Robert S. Aisner was appointed Chairman of Behringer Advisors II on March 27, 2013.

F-21

Behringer Harvard Short-Term Opportunity Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

15. Supplemental Cash Flow Information

Supplemental cash flow information is summarized below for the years ended December 31, 2012, 2011 and 2010.

	2012		2011		2010
Interest paid, net of amounts capitalized	$	5,175	$	7,317	$	3,922
Income tax paid	$	81	$	178	$	149
Non-cash investing activities:
Notes receivable from noncontrolling interest holder	$	3,206	$	377	$	966
Capital expenditures for real estate in accrued liabilities	$	-	$	983	$	115
Reclassification of real estate inventory to buildings	$	-	$	-	$	4,381
Property improvements funded by tenant	$	-	$	462	$	-
Transfer of real estate and lease intangibles through cancellation of debt	$	15,542	$	7,777	$	-
Non-cash financing activities:
Contributions from noncontrolling interest holder	$	3,206	$	377	$	966
Cancellation of debt through discounted payoff	$	-	$	8,045	$	-
Contribution from general partner	$	-	$	-	$	3,086
Cancellation of debt through transfer of real estate	$	47,848	$	10,866	$	-

F-22

Behringer Harvard Short-Term Opportunity Liquidating Trust

Valuations and Qualifying Accounts

Schedule II

(in thousands)

(Unaudited)

Allowance for Doubtful Accounts	Balance at Beginning of Year		Charged to Costs and Expenses		Charged to Other Accounts		Deductions		Balance at End of Year
Year ended December 31, 2012	$	84	$	170	$	-	$	254	$	-
Year ended December 31, 2011		58		96		-		70		84
Year ended December 31, 2010		142		5		-		89		58

F-23

Behringer Harvard Short-Term Opportunity Fund I LP

Real Estate and Accumulated Depreciation

Schedule III

December 31, 2012

(in thousands)

(Unaudited)

				Initial cost							Gross amount
								Adjustments to			carried at		Accumulated		Year of		Date	Depreciable
Property Name	Market	Encumbrances		Land		Buildings		basis (1)			close of period		depreciation		construction		acquired	life
1221 Coit Road Land	Dallas, TX	$	-	$	1,436	$	-	$	(456	)	$	980	$	-			10/4/2004
Hotel Palomar	Dallas, TX		31,000		4,134		31,920		903			36,957		5,685		2006	11/8/2004		(2)
Totals		$	31,000	$	5,570	$	31,920	$	447		$	37,937	$	5,685

(1) Includes adjustments to basis, such as impairment losses.

(2) Hotel is 39 years

A summary of activity for real estate and accumulated depreciation for the years ended December 31, 2012, 2011 and 2010 is as follows (in thousands):

	2012			2011			2010
Real estate:
Balance at beginning of year	$	89,342		$	149,611		$	149,743
Additions		32			2,638			697
Disposals and write-offs		(34,412	)		(32,762	)		(5,210	)
Cost of real estate sold		(17,025	)		(30,145	)		-
Reclass from real estate inventory		-			-			4,381
Balance at end of the year	$	37,937		$	89,342		$	149,611
Accumulated depreciation:
Balance at beginning of year	$	14,937		$	21,487		$	16,783
Depreciation expense		2,008			3,916			4,988
Disposals and write-offs		(11,260	)		(10,466	)		(284	)
Balance at end of the year	$	5,685		$	14,937		$	21,487

F-24

Index to Exhibits

Exhibit Number		Description
2.1		Behringer Harvard Short-Term Opportunity Liquidating Trust Plan of Liquidation dated February 11, 2013 (previously filed and incorporated by reference to Form 8-K filed on February 11, 2013)
3.1		Second Amended and Restated Agreement of Limited Partnership of the Registrant dated September 5, 2008 (previously filed in and incorporated by reference to Form 8-K filed on September 5, 2008)
3.2		Certificate of Limited Partnership of Registrant (previously filed in and incorporated by reference to Registrant’s Registration Statement on Form S-11, Commission File No. 333-100125, filed on September 27, 2002)
3.3*		Certificate of Trust of Behringer Harvard Short-Term Opportunity Liquidating Trust dated February 13, 2013
4.1		Subscription Agreement and Subscription Agreement Signature Page (previously filed in and incorporated by reference to Exhibit C to Supplement No. 1 to the prospectus of the Registrant contained within Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-11, Commission File No. 333-100125, filed on June 3, 2003)
10.1		Purchase Agreement by and between Behringer Harvard 1221 Coit LP and Carter Validus Properties, LLC (previously filed and incorporated by reference to Form 10-Q filed November 13, 2012)
10.2		First Amendment to Purchase Agreement by and between Behringer Harvard 1221 Coit LP and Carter Validus Properties, LLC (previously filed and incorporated by reference to Form 10-Q filed November 13, 2012)
10.3		Note Modification Agreement and Assignment of Proceeds by and between Registrant and Behringer Harvard Holdings, LLC (previously filed and incorporated by reference to Form 10-Q filed November 13, 2012)
10.4		Termination of Purchase Agreement by and between Behringer Harvard 250/290 Carpenter Freeway LP and Forest City Commercial Development, Inc. (previously filed and incorporated by reference to Form 10-Q filed November 13, 2012)
10.5		Purchase Agreement by and between Behringer Harvard 250/290 Carpenter Freeway LP and Fairways JC Central, LLC (previously filed and incorporated by reference to Form 10-Q filed November 13, 2012)
10.6		Pledge and Security Agreement by and between the Registrant and Behringer Harvard Holdings, LLC (previously filed and incorporated by reference to Form 10-Q filed November 13, 2012)
10.7		Liquidating Trust Agreement among Behringer Harvard Short-Term Opportunity Fund I LP, as grantor, Behringer Harvard Advisors II LP, as managing trustee, and CSC Trust Company of Delaware, as resident trustee (previously filed in and incorporated by reference to Form 8-K filed on February 11, 2013)
10.8		Promissory Note by and between Behringer Harvard Mockingbird Commons, LLC and Great American Life Insurance Company
10.9		Deed of Trust, Fixture Filing, Assignment of Rents, and Security Agreement by Behringer Harvard Mockingbird Commons, LLC in favor of Rebecca S. Conrad, Trustee, for the benefit of Great American Life Insurance Company

21.1*		List of Subsidiaries
31.1*		Rule 13a-14(a) or Rule 15d-14(a) Certification
31.2*		Rule 13a-14(a) or Rule 15d-14(a) Certification
32.1*		Section 1350 Certifications**

*filed or furnished herewith

** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

Filing Compare · Behringer Harvard Short-Term Liquidating Trust