Exhibit (a)5
OFFER TO PURCHASE FOR CASH
ANY OR ALL OUTSTANDING SHARES OF COMMON STOCK
OF
INCOME OPPORTUNITY REALTY INVESTORS, INC.
AT
$19.00 NET PER SHARE
BY
INCOME OPPORTUNITY ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
AMERICAN REALTY INVESTORS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON DECEMBER 13, 2002, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is the Offer to Purchase dated November 15,
2002, (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to the offer by Income Opportunity Acquisition Corporation, a
Nevada corporation ("Purchaser") and wholly-owned subsidiary of American Realty
Investors, Inc., a Nevada corporation ("Parent"), to purchase any or all
outstanding shares of common stock, par value $.01 per share (the "Shares"), of
Income Opportunity Realty Investors, Inc., a Nevada corporation (the "Company"),
at $19.00 per Share (the "Offer Price"), net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer.
WE (OR OUR NOMINEES) ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR
ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The Offer to Purchase contains important information relating to the
Offer.
2. The offer price is $19.00 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions of the Offer.
3. The Offer is being made for any or all outstanding Shares.
4. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON DECEMBER 13, 2002 (THE "EXPIRATION DATE"), UNLESS THE OFFER IS
EXTENDED BY THE PURCHASER, IN WHICH EVENT THE TERM "EXPIRATION DATE" SHALL MEAN
THE LATEST TIME ON WHICH THE OFFER, AS SO EXTENDED BY THE PURCHASER, WILL
EXPIRE.
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5. Any stock transfer taxes applicable to a sale of Shares to the Purchaser
will be borne by the Purchaser, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
6. YOU WILL BE OBLIGATED TO PAY THE BROKERAGE FEES, COMMISSIONS AND
EXPENSES CHARGED TO YOU BY US. Tendering stockholders will not be obligated to
pay brokerage fees or commissions to the Depositary or the Information Agent or,
except as set forth in Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares by Purchaser pursuant to the Offer. However,
federal income tax backup withholding at a rate of 31% may be required, unless
an exemption is provided or unless the required taxpayer identification
information is provided. See Instruction 9 of the Letter of Transmittal.
Your instructions to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the Expiration Date.
If you wish to have us tender any of or all the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form on the detachable part hereof. An envelope to return
your instructions to us is enclosed. If you authorize the tender of your Shares,
all such Shares will be tendered unless otherwise specified on the detachable
part hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf prior to the Expiration Date.
Payment for Shares accepted for payment pursuant to the Offer will in all
cases be made only after timely receipt by American Stock Transfer and Trust
Company (the "Depositary") of (a) certificates for (or a timely Book-Entry
Confirmation (as defined in the Offer to Purchase) with respect to) such Shares,
(b) a Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed with any required signature guarantees, or, in the case of a
book-entry transfer effected pursuant to the procedure set forth in Section 3 of
the Offer to Purchase, an Agent's Message and (c) any other documents required
by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at
different times depending upon when certificates for Shares or Book-Entry
Confirmations with respect to Shares are actually received by the Depositary.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES
TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. To the extent the Purchaser becomes aware of any state law that
would limit the class of Offerees in the Offer, the Purchaser reserves the right
to amend the Offer and, depending on the timing of such amendment, if any, will
extend the Offer to provide adequate dissemination of such information to
holders of Shares prior to the expiration of the Offer. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer is being made on behalf of the Purchaser by
one or more registered brokers or dealers that are licensed under the laws of
such jurisdiction.
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INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
INCOME OPPORTUNITY REALTY INVESTORS, INC.
The undersigned acknowledge(s) receipt of your letter, the Offer to
Purchase of Income Opportunity Acquisition Corporation, a wholly-owned
subsidiary of American Realty Investors, Inc. dated November 15, 2002 (the
"Offer to Purchase"), and the related Letter of Transmittal relating to shares
of common stock, par value $.01 per share (the "Shares"), of Income Opportunity
Realty Investors, Inc., a Nevada corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, on the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
Dated:
<Table>
NUMBER OF SHARES TO BE TENDERED
------------------- SHARES
</Table>
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SIGNATURE(S)
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PLEASE PRINT NAME(S)
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ADDRESS (INCLUDE ZIP CODE)
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AREA CODE AND TELEPHONE NO.
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TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NO.
DATE ---------------------------------
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