Project 850 East 55th St-2 Domi-1 Final Pdf

Punnett Properties Development 250 Apartments 850 East 55th Street. NEW YORK, NEW YORK

Confidential Investment Memorandum

Executive Summary Property

PUNNETT PROPERTIES is currently developing 850 East 55th Street. The new project will be erected on a corner lot with dimensions of approximately 100’ x 200’. A 350,000 square foot, 22 story residential building will be built with open city views from most apartments. The building will have 250 rentals apartments: 100 one bedrooms and 150 two bedrooms. In addition, the building will have full service doorman/concierge, private tenant storage, common landscaped courtyard, and more. Also being developed on the site is 3 retail stores totaling approximately 52,000 square feet.

Punnett Properties is offering an equity stake in this premium investment opportunity. A $50,000,000 investment will create a 50% investment partner in 850 E 55th Street Owners LLC. Holding ownership of subject property in a limited liability company will offer full liability protection as well as providing advantageous tax benefits. As required by law, 10% of the one bedroom units will be reserved for low income tenants. We plan on a 5 year holding period, with an overall post tax IRR of 16.4%.

Timeframe*

Enter into contract, due diligence, final design Current - December 2009 Close on land purchase November 15, 2008 Close construction loan December 31, 2008 Construction Year 2009 Close Permanent Loan December 31, 2010 Lease Up Year 2010 Stabilization Year, operational years 2011 – 2014

Property Rented December 31, 2014 * Time frame subject to change due to unforeseen construction circumstances. Owning Entities

Ownership Structure Equity Investment

% of Equity

850 NYC Developers LLC

$11,522,028

10.3%

890 NYC Investors LLC Investor 1 Investor 2 Investor 3 Investor 4

$100,000,000 $25,000,000 $25,000,000 $25,000,000 $25,000,000

89.7% 22.4% 22.4% 22.4% 22.4%

$111,522,02 Ownership Total

8

100%

Entity Structure

We have selected to hold the ownership of the subject property in a limited liability company, LLC, as they offer excellent liability protection. The tax implications also benefits owners and investors involved.

Location, Market

The building is situated in the popular Midtown East area, one of the most gentrified and up and coming districts of all of New York City. Near all major, transportation, Restaurant Row and Times Square this property’s location is one of the most desirable addresses New York City for first time renters and people looking for a better value proposition then buying.

Other successful rental developments in our neighborhood include the 148 unit Clinton West directly across the street at 516 West East 55th Street (fully rented) plus current new luxury rental developments on 46th between 10th & 11th, 44th & 10th and the Orion (rented out) & the Atelier on west 42nd street.

Site Evaluation, Current Condition The property is located on East 55th street approximately 100 feet west of 3rd Avenue within an R8 District in the Special Midtown East District in Manhattan, Community District 4.

The site is currently vacant building and has a lot area of 200 x 100 square feet

allowing for 350,000 buildable square feet. Because the site is located above an active subway right-of-way, a special permit pursuant to Section 74-681(1)(a) is required and was obtained. In addition, a Special Permit was requested and was duly adopted by the city Planning Commission on May 12, 2008 (Calendar No.24).

The building fronting on West East 55th Street

will rise to

a height of 200 feet (20 stories) and will contain

250 units.

Developments in this area are subject to special

floor

ratio

(4.2

maximum),

lot

coverage

(60%

area

Propose d Site

maximum), and height (199 feet maximum) requirements. Residential developments in the Preservation Area of the Special Midtown East

District

also require that at least 20% of the dwelling

units

contain 2 bedrooms or more, and at least 20%

of the lot

area be useable landscaped open space for

residents.

The building will meet or exceed all of these requirements.

Artist’s Rendering

Ground Floor

2nd to 19th Floor

20th Floor

Private & Common Roof Decks

North – South Building Section

Investment Summery We are looking for investor(s) to purchase $100,000,000 of preferred equity in this project. This will make up 89.7% of the cash equity investment. The total equity requirement for this project is $111,522,028 towards a $184,014,528 total project cost (60% Equity/40% Debt). The preferred security will have an accruing 8% dividend that will be paid first and before the developer gets an 8% return on his cash equity investment. After all investors have earned an 8% dividend the profits on the investors’ capital will be split 50%/50%, with 50% for the investors and 50% for the developer. Assuming preferred investors invest $100 million of the equity and the project is rented for $340,320,239 (at a 4.5% cap based on 2015 NOI - reasonable assumption based on the current market) then the IRR to the preferred investor over the 5 year expected time horizon of the investment will be 16.44%. HSBC is providing a $72,492,500 construction loan and the developers are providing personal guarantees for 30% of the loan. In summary, the developers are not only putting up $11,522,028 hard cash but they are personally guarantying $18 million to the Bank and land renteder. The developer’s enormous capital commitment to this project should give confidence and comfort to the preferred equity investors about the developers’ strong conviction in this project

Comparative Market Analysis 850 East 55th Street targets first time condo buyers who are working within walking distance of the Midtown business district. We are targeting the buyer who is looking to spend $450,000 to $1,000,000. The condominium will be mostly smaller apartments with average price of $1,000-$1,100 for the top floor private rooftop apts and group floor apts with a private garden. The following are comparative new development condominiums similar in style, brand and quality that have recently opened and or are near completed rented out. While there are a number of condominium projects recently completed or underway, there are not many that specifically targeted the entry-level market. Most of the new construction condominium and town home projects are targeted at the high-end, high-rise market. These projects are within walking distance, however, we feel they do not compare because of the size of the units which result in a high starting price for their apartments. Starting price pre-construction sales begin at over $55 per square foot and go up to $75+ per square foot in high-rise buildings. Clinton West - 516 West East 55th Street The building at 516 West East 55th Street is the most comparable. It is located across the street and targeted the same market. The project was recently completed while building sales begun on June 2005 the 148 units were rented out in 8 days. Several of units have recently rerented or are currently on the market. The average for apartments on the market $1,044 per square foot. Amenities includes: 24 hours doorman, gym, laundry, common garden area.

it and the is

Location & Local Market Report Midtown East is a neighborhood of New York that includes the area between 35th Street and Street, from 1st Avenue to 5th Aveneu.

City 56th

MIDTOWN EAST In recent years, the neighborhood has undergone gentrification along with many other neighborhoods in New York City. Partly as a result, the alternative name "Clinton" (the neighborhood is legally known as the Clinton Special Use District) has gained in popularity. The name has long had some currency, however; the Chelsea Clinton News, covering this area and the adjoining Chelsea, has been published for decades. The term Clinton refers to the former New York City Mayor and New York State Governor in the 18th century, DeWitt Clinton. The neighborhood stands on what was once his farm land. One of the neighborhood's gathering places is DeWitt Clinton Park.

NEIGHBORHOOD Midtown Eastis known as one of the most popular neighborhoods for dining in the city, both by locals and tourists. One of the city's biggest street fairs, the Ninth Avenue Association's International Food Festival, stretches through the Kitchen from 37th to 57th Streets every May, usually on the third weekend of the month. The neighborhood is also home to a number of broadcast and music-recording studios, including the CBS Broadcast Center at 524 West 57th Street (also the home of Black Entertainment Television's 106 & Park show), Sony Music Studios at 460 West 54th Street, and Right Track Recording's Studio A509 orchestral recording facility at West 38th Street and 10th Avenue. The syndicated Montel Williams show is also taped locally at the Unitel Studios, 433 W. 53rd Street, between Ninth and Tenth Avenues. Comedy Central's satirical program, The Daily Show with Jon Stewart, is also taped in Midtown East— recently trading one local studio for another. In the summer of 2005 it

moved from its quarters at 54th Street and 10th Avenue to a new studio in the neighborhood, at 733 11th Avenue, between 51st and 52nd Streets.

Development Team SPONSER/DEVELOPER

ARCHITECT Architect, PLLC Established in 1997Architect, PLLC is a full service architectural firm based in Manhattan. The firm's primary specialties are hi-rise residential buildings and conversion and/or renovation of existing buildings. Our client’s success is our reward, from comprehensive initial zoning analysis to the final punch list; our focus is on the project and our client's needs. Besides doing much of our own design work we also work closely with some of the world's foremost architects such as Michael Graves, Philip Johnson, Robert Stern, David Rockwell, to name a few. Other projects have included private residences, zoning consulting, tax lot and attorney general reports for condominiums, BSA approvals, landmarks commission approvals, fitness gyms, large scale window replacements, and commercial interiors work.

Rent to Qualifying Tenants Construction Budget 11/15/2008 - 12/31/2009 Acquisition costs Cost of land and existing building shell Closing cost

Predevelopment costs Engineer, design, architects, fees & costs NYC plumbing, water, steam connection permits Land, soil tests, environmental testing

Construction costs Demolition costs Hard costs Soft costs

Financing costs - construction loan Construction financing fees Construction loan interest

Total

$35,000,00 0 $525,000 $35,525,00 0

Year 2009

Total Cost of the Property Financing costs - permanent loan Commitment letter fees

100%

Loan

Per SQFT 350,000 0% $100.00 $1.50

$35,525,0 00 100%

$101.50 0%

$45,000

$0.13

$3,500

$0.01

$13,000 $61,500

$0.04 $0.18

$61,500 50%

$400,000 $133,875,0 00 $10,710,00 0 $144,985,0 00

50% $1.14 $382.50

$72,492,5 00

$72,492,5 00

100%

0%

$60,000 $2,815,825 $2,875,825

Real estate taxes Year 2008

Equity

$30.60 $414.24

$0.17 $2,875,82 5 100%

$8.05 $8.22 0%

$3,438

$0.01

$27,500 $30,938

$30,938

$183,478,2 62

$110,985, 762

$0.08 $0.09 $72,492,5 00

$524.22

100% $275,196

$0.79

Closing fees

Total Development Costs

$194,797 $469,993

$469,993

$183,948,2 56

$111,455, 756

$0.56 $1.34 $72,492,5 00

$525.57

Rent to Qualifying Tenants

72,492,5 00 7.50% 0.63% 10%

Loan Amount Annual Interest Rate Monthly Interest Rate Retainage

Date

Amount

Retainag e

January-09

9,061,563

906,156

February-09

9,061,563

906,156

March-09

9,061,563

906,156

April-09

9,061,563

906,156

May-09

5,178,036

517,804

June-09

5,178,036

517,804

July-09

5,178,036

517,804

August-09

5,178,036

517,804

September-09

5,178,036

517,804

October-09

5,178,036

517,804

November-09

5,178,036

517,804

72,492,500

7,249,25 0

December-09 Totals

Actual Loan Draw Interest Balance 8,155,40 8,155,40 6 6 8,155,40 16,361,7 6 50,971 84 8,155,40 102,26 24,619,4 6 1 51 8,155,40 153,87 32,928,7 6 2 29 4,660,23 205,80 37,794,7 2 5 66 4,660,23 236,21 42,691,2 2 7 15 4,660,23 266,82 47,618,2 2 0 67 4,660,23 297,61 52,576,1 2 4 14 4,660,23 328,60 57,564,9 2 1 47 4,660,23 359,78 62,584,9 2 1 60 4,660,23 391,15 67,636,3 2 6 48 7,249,25 422,72 75,308,3 0 7 25 72,492,5 2,815,8 75,308,3 00 25 25

Rent to Qualifying Tenants Permanent Loan Amortization Schedule Permanent Loan less Construction Loan Balance Loan amount

$ 126,797,299

Interest rate

6.75% 2

Amortization period

5

Debt service amount

annually 0

per month

monthly month

($10,512,686)

per year

12/31/2009

Beginning Balance

Debt Service

Interest Paid

(876,05

(713,23

1/31/2010

126,797,29 9

7)

2/28/2010

126,634,47 7

7)

3/31/2010

126,470,73 9

7)

4/30/2010

126,306,08 0

7)

5/31/2010

126,140,49 4

7)

6/30/2010

125,973,97 7

7)

7/31/2010

125,806,52 4

7)

8/31/2010

125,638,12 8

7)

9/30/2010

125,468,78 6

7)

10/31/201 0

125,298,49 0

7)

11/30/201 0

125,127,23 7

7)

12/31/201 0

124,955,02 1 1,510,617,25

2010 Total

0.6% 30

years ($876,057)

Loan closing date

Payment Dates

$51,488,975

3

5) (876,05 (876,05

124,781,83 6

2/28/2011 3/31/2011

124,607,67 6 124,432,53

(711,39 8)

(876,05

(710,47 2)

(876,05

(709,54 0)

(876,05

(708,60 4)

(876,05

(707,66 2)

(876,05

(706,71 4)

(876,05

(705,76 2)

(876,05

(704,80 4)

(876,05

(703,84 1)

(876,05 7)

(702,87 2)

(10,512,68 6)

1/31/2011

(712,31 9)

(876,05

(701,89

(876,05

(700,91 8)

(876,05

(699,93

Outstanding Balance 126,634,47 7 126,470,73 9 126,306,08 0 126,140,49 4 125,973,97 7 125,806,52 4 125,638,12 8 125,468,78 6 125,298,49 0 125,127,23 7 124,955,02 1 124,781,83 6

(2,015,46 4)

8)

7)

($162,82 2) ($163,73 8) ($164,65 9) ($165,58 5) ($166,51 7) ($167,45 4) ($168,39 5) ($169,34 3) ($170,29 5) ($171,25 3) ($172,21 6) ($173,18 5)

(8,497,22 2)

7)

Principal Amortized

($174,15 9) ($175,13 9) ($176,12

1,508,601,78 9 124,607,67 6 124,432,53 7 124,256,41

7

7)

4/30/2011

124,256,41 3

7)

5/31/2011

124,079,29 8

7)

6/30/2011

123,901,18 7

7)

7/31/2011

123,722,07 4

7)

8/31/2011

123,541,95 4

7)

9/30/2011

123,360,82 0

7)

10/31/201 1

123,178,66 8

7)

11/30/201 1

122,995,49 0

7)

12/31/201 1

122,811,28 3 1,485,669,23

2011 Total

Payment Dates

8

3) (876,05 (876,05

(697,94 6)

(876,05

(696,94 4)

(876,05

(695,93 7)

(876,05

(694,92 3)

(876,05

(693,90 5)

(876,05

(692,88 0)

(876,05

(691,85 0)

(876,05 7)

(690,81 3)

(10,512,68 6)

Beginning Balance

(698,94 2)

(8,356,88 9)

Debt Service

4) ($177,11 5) ($178,11 1) ($179,11 3) ($180,12 0) ($181,13 4) ($182,15 3) ($183,17 7) ($184,20 8) ($185,24 4)

3 124,079,29 8 123,901,18 7 123,722,07 4 123,541,95 4 123,360,82 0 123,178,66 8 122,995,49 0 122,811,28 3 122,626,03 9

(2,155,79

1,483,513,44

6)

1

Interest Paid

Principal Amortized

1/31/2012

122,626,039

(876,057)

(689,771)

2/28/2012

122,439,754

(876,057)

(688,724)

3/31/2012

122,252,420

(876,057)

(687,670)

4/30/2012

122,064,033

(876,057)

(686,610)

5/31/2012

121,874,586

(876,057)

(685,545)

6/30/2012

121,684,073

(876,057)

(684,473)

7/31/2012

121,492,489

(876,057)

(683,395)

8/31/2012

121,299,827

(876,057)

(682,312)

9/30/2012

121,106,081

(876,057)

(681,222)

10/31/201 2

120,911,246

(876,057)

(680,126)

11/30/201 2

120,715,315

(876,057)

(679,024)

12/31/201 2

120,518,281

(876,057)

(677,915)

($186,286 ) ($187,334 ) ($188,387 ) ($189,447 ) ($190,513 ) ($191,584 ) ($192,662 ) ($193,746 ) ($194,835 ) ($195,931 ) ($197,034 ) ($198,142 )

Outstanding Balance 122,439,754 122,252,420 122,064,033 121,874,586 121,684,073 121,492,489 121,299,827 121,106,081 120,911,246 120,715,315 120,518,281 120,320,139

2012 Total

1,458,984,143

1/31/2013

120,320,139

(876,057)

(676,801)

2/28/2013

120,120,883

(876,057)

(675,680)

3/31/2013

119,920,506

(876,057)

(674,553)

4/30/2013

119,719,001

(876,057)

(673,419)

5/31/2013

119,516,364

(876,057)

(672,280)

6/30/2013

119,312,586

(876,057)

(671,133)

7/31/2013

119,107,662

(876,057)

(669,981)

8/31/2013

118,901,586

(876,057)

(668,821)

9/30/2013

118,694,350

(876,057)

(667,656)

10/31/201 3

118,485,948

(876,057)

(666,483)

11/30/201 3

118,276,375

(876,057)

(665,305)

118,065,622 1,430,441,02 1

(876,057)

(664,119)

12/31/201 3 2013 Total

(10,512,686)

(10,512,686)

(8,206,786)

(8,046,231)

1/31/2014

117,853,684

(876,057)

(662,927)

2/28/2014

117,640,554

(876,057)

(661,728)

3/31/2014

117,426,225

(876,057)

(660,523)

4/30/2014

117,210,690

(876,057)

(659,310)

5/31/2014

116,993,943

(876,057)

(658,091)

6/30/2014

116,775,977

(876,057)

(656,865)

7/31/2014

116,556,785

(876,057)

(655,632)

8/31/2014

116,336,359

(876,057)

(654,392)

9/30/2014

116,114,694

(876,057)

(653,145)

10/31/201 4

115,891,782

(876,057)

(651,891)

(2,305,900)

($199,256 ) ($200,377 ) ($201,504 ) ($202,638 ) ($203,778 ) ($204,924 ) ($206,077 ) ($207,236 ) ($208,401 ) ($209,574 ) ($210,753 ) ($211,938 ) (2,466,455)

($213,130 ) ($214,329 ) ($215,535 ) ($216,747 ) ($217,966 ) ($219,192 ) ($220,425 ) ($221,665 ) ($222,912 ) ($224,166 )

1,456,678,243 120,120,883 119,920,506 119,719,001 119,516,364 119,312,586 119,107,662 118,901,586 118,694,350 118,485,948 118,276,375 118,065,622 117,853,684 1,427,974,566 117,640,554 117,426,225 117,210,690 116,993,943 116,775,977 116,556,785 116,336,359 116,114,694 115,891,782 115,667,616

11/30/201 4 12/31/201 4 2014 Total

115,667,616

(876,057)

(650,630)

115,442,190

(876,057)

(649,362)

1,399,910,500

(10,512,686)

(7,874,497)

($225,427 ) ($226,695 ) (2,638,189)

115,442,190 115,215,495

Rent to Qualifying Tenants Projected Lease-up Schedule January to December 2010

Lease-up Schedule Total

January

February

March

April

May

June

Residential 1 bedrooms at market rent

$4,500

Units leased

20

% leased Gross Income Rent-up Charges

50

80%

80%

90%

100%

100%

$180,000

$202,500

$225,000

$225,000

$135,000

$54,000

$54,000

$0

$13,500

$13,500

$2,025

per month

20

30

40

45

50

50

40%

60%

80%

90%

100%

100%

$1,083,375

$40,500

$60,750

$81,000

$91,125

$101,250

$101,250

$48,600

$24,300

$12,150

$12,150

150

150

150

$6,500

Units leased

per month

150

75 50%

67%

83%

100%

100%

100%

$10,725,000

$487,500

$650,000

$812,500

$975,000

$975,000

$975,000

$585,000

$292,500

$97,500

$97,500

$97,500

% leased

Total Residential Rental Income Total Residential Rent-up Charges

50

$180,000

2 bedrooms

Rent-up Charges

45

40%

% leased

Gross Income

40

$90,000

Units leased

Rent-up Charges

40

$2,452,500

1 bedrooms at 45% market

Gross Income

per month

$ 14,260,875 $ 768,600

$ 618,000 $ 370,800

100

$ 890,750 $ 163,650

125

$ 1,073,500 $ 109,650

$ 1,268,625 $ 111,000

$ 1,301,250 $ 13,500

$ 1,301,250 $

-

Retails Stores Units leased

$25,000 3

1

2

3

3

3

3

33%

67%

100%

100%

100%

100%

$825,000

$25,000

$50,000

$75,000

$75,000

$75,000

$75,000

$45,000

$15,000

$15,000

$15,000

% leased Retail Rental Income Retail Rent-up Charges

per month

Rent to Qualifying Tenants Projected Lease-up Schedule January to December 2010

Lease-up Schedule July

August

September

October

November

December

50

50

Residential 1 bedrooms at market rent Units leased % leased Gross Income

50

50

50

50

100%

100%

100%

100%

100%

100%

$225,000

$225,000

$225,000

$225,000

$225,000

$225,000

50

50

50

50

50

50

100%

100%

100%

100%

100%

100%

$101,250

$101,250

$101,250

$101,250

$101,250

$101,250

150

150

150

150

150

150

Rent-up Charges

1 bedrooms at 45% market Units leased % leased Gross Income Rent-up Charges

2 bedrooms Units leased % leased Gross Income

100%

100%

100%

100%

100%

100%

$975,000

$975,000

$975,000

$975,000

$975,000

$975,000

$1,301,25 0 $ -

$1,301,25 0 $ -

$1,301,25 0 $ -

$1,301,25 0 $ -

$1,301,25 0 $ -

$1,301,25 0 $ -

Rent-up Charges Total Residential Rental Income Total Residential Rent-up Charges

Retails Stores Units leased % leased Retail Rental Income

3

3

3

3

3

3

100%

100%

100%

100%

100%

100%

$75,000

$75,000

$75,000

$75,000

$75,000

$75,000

Rent to Qualifying Tenants Lease-up Year Proforma January to December 2010

Total Residential Rental Income 1 bedrooms at market rent 1 bedrooms at 45% market

January

Februar y

March

April

May

$90,000

$180,00 0

$180,00 0

$202,50 0

$618,000

$60,750 $650,00 0 $890,75 0

$81,000 $812,50 0 $1,073,5 00

$91,125 $975,00 0 $1,268,6 25

$225,00 0 $101,25 0 $975,00 0 $1,301,2 50

2 bedrooms Total Residential Income

$2,452,50 0 $1,083,37 5 $10,725,0 00 $14,260,8 75

Retail Rental Income

$825,000

$25,000

$50,000

$75,000

$75,000

$75,000

Potential Gross Income

$15,085,8 75

$643,000

$940,75 0

$1,148,5 00

$1,343,6 25

$1,376,2 50

Vacancy and Credit Loss Residential

$427,826

$18,540

$26,723

$32,205

$38,059

$39,038

$33,000

$1,000

$3,000

$3,000

$3,000

$460,826

$19,540

$28,723

$35,205

$41,059

$42,038

$14,625,0 49

$623,46 0

$912,0 28

$1,113, 295

$1,302, 566

$1,334, 213

$2,262,88 1

$96,450

$141,11 3

$172,27 5

$201,54 4

$206,43 8

$2,292 $174,56 7

$2,292 $203,83 5

$2,292 $208,72 9

$938,72

$1,098,

$1,125,

Retail Total Vacancy and Credit Loss Effective Gross Income

$40,500 $487,500

$2,000

Expenses Operating Expenses Real Estate Taxes Total Expenses

$27,500 $2,290,38 1

$2,292 $98,742

$2,292 $143,40 4

Net Operating

$12,334,6

$524,71

$768,6

Income

68

8

23

8

731

483

($10,512,6 86)

($876,05 7)

($876,0 57)

($876,05 7)

($876,05 7)

($876,05 7)

Residential

($768,600)

($370,80 0)

($13,500 )

($45,000)

($109,65 0) ($15,000 ) ($124,65 0)

($111,00 0)

Retails Total Rent-up Charges

($163,6 50) ($15,00 0) ($178,6 50)

$0 ($111,00 0)

$0 ($13,500 )

($61,97 $111,67 9) 4

$235,92 6

Less: Debt Service Less: Rent-up Charges

Plus: Permanent Loan Before Tax Cash Flow

($813,600) $51,488,9 75 ` $52,497,3 56

($15,000) ($385,80 0) $51,488, 975 $50,751, 836

($286,0 84)

June

July

August

September

October

November

December

$225,000 $101,250

$225,000 $101,250

$225,000 $101,250

$225,000 $101,250

$225,000 $101,250

$225,000 $101,250

$225,000 $101,250

$975,000 $1,301,25 0

$975,000 $1,301,25 0

$975,000 $1,301,25 0

$975,000

$975,000 $1,301,25 0

$975,000

$975,000 $1,301,25 0

$75,000

$75,000

$75,000

$1,376,25 0

$1,376,25 0

$1,376,25 0

$39,038

$39,038

$39,038

$39,038

$39,038

$39,038

$39,038

$3,000 $42,038

$3,000 $42,038

$3,000 $42,038

$3,000 $42,038

$3,000 $42,038

$3,000 $42,038

$3,000 $42,038

$1,334,2 13

$1,334,2 13

$1,334,2 13

$1,334,21 3

$1,334,2 13

$1,334,21 3

$1,334,2 13

$206,438

$206,438

$206,438

$206,438

$206,438

$206,438

$206,438

$2,292 $208,729

$2,292 $208,729

$2,292 $208,729

$2,292 $208,729

$2,292 $208,729

$2,292 $208,729

$2,292 $208,729

$1,125,4 83

$1,125,4 83

$1,125,4 83

$1,125,48 3

$1,125,4 83

$1,125,48 3

$1,125,4 83

($876,05 7)

($876,057 )

($876,057 )

($876,057)

($876,057 )

($876,057) ($876,057)

$1,301,250 $75,000

$1,376,250

$75,000 $1,376,25 0

$1,301,250 $75,000

$1,376,250

$75,000 $1,376,25 0

$0

$0

$0

$0

$0

$0

$0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$249,42 6

$249,426

$249,42 6

$249,426

$249,426

$249,426

$249,426

Rent to Qualifying Tenants Depreciation Schedules

Total Cost of Property Less: Basis of Land Land Purchase Cost Closing Costs

$183,478,2 62 $35,000,00 0 $525,000

Demolition Costs

$400,000

Basis of Land Depreciable Basis (Basis of Building) Percent allocable to personal property

Portion allocable to personal property Portion allocable to real property Useful Life 27.5

$35,925,00 0 $147,553,2 62 11% $16,230,85 9 $131,322,4 04

years

for real property for personal 7 years property Straight Line Method for Real Property only Annual Depreciation Annual Depreciation real property Annual Depreciation personal property

2010

2011

2012

2013

2014

$4,576,387

$4,775,360

$4,775,360

$4,775,360

$4,775,360

$2,319,390 $6,895,777

$3,974,937 $8,750,297

$2,838,777 $7,614,137

$2,027,234 $6,802,594

$1,449,416 $6,224,776

Accumulated Depreciation

$6,895,777

$15,646,07 4

$23,260,21 1

$30,062,806

$36,287,58 2

Depreciable Basis

$147,553,2

$147,553,2

$147,553,2

$147,553,26

$147,553,2

62 ($6,895,77 7) $35,925,00 0 $176,582, 486

Less: Accumulated Depreciation Plus: Basis of Land Adjusted Basis

62 ($15,646,07 4) $35,925,00 0 $167,832, 188

62 ($23,260,21 1) $35,925,00 0 $160,218, 051

2 ($30,062,80 6) $35,925,000 $153,415,4 57

62 ($36,287,58 2) $35,925,00 0 $147,190, 681

8.92%

8.93%

4.46%

Assume no Section 1245 Recapture in year of sale 7 Year Depreciation 14.29%

24.49%

17.49%

12.49%

8.93%

Rent to Qualifying Tenants Amortization Schedules Financing Costs: Permanent Loan Fees

Commitment letter fees Closing fees

Annual Amortization

$275,1 96 $194,7 97 $ 469,99 3 $18,80 0

Loan Term

25 years

Amortization Schedule

Annual Amortization

Unamortized Amount

2010

2011

2012

2013

2014

$18,80 0

$18,80 0

$18,80 0

$18,80 0

$18,80 0

$ 451,19 4

$ 432,39 4

$ 413,59 4

$ 394,79 4

$ 375,99 5

2010

2011

2012

2013

2014

$256,2 00 $9,000

$256,2 00 $9,000

$256,2 00 $9,000

$9,000

$9,000

Financing Costs Rent-up Charges

Rent-up Charges Residential Retail Total Rent-up Charges Residential Lease Terms Retail Lease Terms Amortization Schedule

$768,6 00 $45,00 0 $813,6 00 3 years years 5 years years

Annual Amortization Residential Retail

Total Annual Amortization Unamortized Amount Residential Retails Total Unamortized Rent-up Charges Rent to Qualifying Tenants

$265,2 00

$265,2 00

$265,2 00

$9,000

$9,000

$512,4 00 $36,00 0 $548,4 00

$283,2 00

$18,00 0

$9,000

$0

Tax Calculations Real Estate Taxes for 2011

= Land & (Total Constrcution Cost x 40%) = (Assessed Valuation) x 5.911% (Tax Rate)

Assessed Valuation Real Property Tax Land (Acquisition Cost) Total Construction Cost

$35,525,000 $144,985,000 x

0.40

$57,994,000 $93,519,000

Assessed Valuation Tax Rate

@

5.91%

Real Property Tax Real Estate Tax Exemption

Acquisition

Construction Lease-up Stabilized Operation Operation

$5,527,908

Yea r 2008

200 9 201 0 201 1 201 2 201 3

RE Tax

Exemption %

Adjusted RE Tax

$3,438

0%

$3,438

$27,500

0%

$27,500

$27,500

0%

$27,500

$5,527,908

50%

$2,763,954

$5,527,908

45%

$3,040,349

$5,527,908

40%

$3,316,745

Operation Operation

201 4 201 5

$5,527,908

35%

$3,593,140

$5,527,908

30%

$3,869,536

Capital Gain Taxes in 2014

Sale Price Less: Cost of Sale Less: Mortgage Balance

=2015 NOI / Sale Cap

Before Tax Proceeds

Less: Recapture Tax @ Less: Capital Gain Tax @

25% 15%

After Tax Proceeds

Gain on Sale Sale Price Less: Cost of Sale Net Sale Proceeds Less: Total Adjusted Basis

($18,720,718) $128,987,360

$278,969,711 ($6,974,243) $271,995,468 ($147,190,681) $124,804,787 $22,881,934 $101,922,853

Gain on Sale

Depreciation Recapture Long Term Capital Gain Tax on Recaptured Depreciation Tax on Long Term Capital Gain

$278,969,711 ($6,974,243) ($115,215,495) $156,779,973 ($9,071,895)

25%

$5,720,483

15%

$15,288,428

Rent to Qualifying Tenants Before Tax Cash Flow Projection 2008 to 2014 Year

2009

2010

2011

2012

2013

Construction

Lease-up

Stabilization

Operation

Operation

2014 Operation / Sale

201

Year Afte

Revenues: Residential Rental Income 1 bedrooms at market rent 1 bedrooms at 75% market

$2,452,500

$2,700,000

$2,781,000

$1,083,375

$1,215,000

$1,251,450

2 bedrooms

$10,725,000

$11,700,000

$12,051,000

Total Residential Income

$14,260,875

$15,615,000

$16,083,450

Retail Rental Income

$825,000

Potential Gross Income

$15,085,875

$900,000 $16,515,000

$945,000 $17,028,450

$2,864,43 0 $1,288,99 4 $12,412,5 30 $16,565,9 54 $992,250 $17,558,2 04

$2,950,363

$

$1,327,663

$

$12,784,906

$1

$17,062,932

$1

$1,041,863

$

$18,104,795

$1

Vacancy and Credit Loss Residential Retail Total Vacancy and Credit Loss

$427,826

$442,800

$458,298

$474,339

$490,940

$33,000

$33,660

$34,333

$35,020

$35,720

$460,826 $14,625,04 9

Effective Gross Income

$476,460 $16,038,540

$492,631 $16,535,81 9

Expenses: Operating Expenses Real Estate Taxes Total Expenses

Less: Debt Service Less: Rent-up Charges Before Tax Cash Flow Less: Equity Contribution

$526,661 $17,578,134

$2,262,881

$1,651,500

$1,701,045

$27,500

$2,763,954

$3,040,349

$2,290,381

$4,415,454

$4,741,394

$1,701,04 5 $3,316,74 5 $5,017,79 0

($10,512,686)

$11,794,42 4 ($10,512,68 6)

$12,031,0 55 ($10,512,6 86)

($10,512,686)

$1,110,400

$1,281,738

$1,518,36 9

$1,771,263

$1,281,738

$1,518,36 9

$156,779,973 $158,551,23 6

$12,334,66 8 ($10,512,68 6)

Net Operating Income

$509,358 $17,048,8 45

$11,623,086

$1,701,045

$

$3,593,140

$

$5,294,185

$

$12,283,949

($813,600) ($111,455,7 56)

$1,008,382

Plus: Permanent Loan Net of Construction Loan

$51,488,975

Plus: Sale Proceeds Total Before Tax Cash Flow

($59,966,7 81)

$1,008,382

$1,110,400

$18

$12

Before Tax IRR NPV @ 10% Cash On Cash

22.69% $103,503,34 4 -53.80%

0.90%

1.00%

1.15%

1.36%

142.25%

Rent to Qualifying Tenants After Tax Cash Flow Projection 2008 to 2014 2009

2010

2011

2012

2013

2014

Construction

Lease-up $12,334, 668 ($8,497,2 22)

Stabilization $11,623,08 6

Operation $11,794, 424 ($8,206,7 86) ($265,200 )

Operation $12,031,05 5

Operation / Sale

Net Operating Income Less: Interest Less: Rent-up Charges Amortization Less: Financing Fee Amortization Less: Depreciation Taxable Income Tax Payable at 35%

Before Tax Cash Flow Less: Income Tax After Tax Cash Flow Less: Equity Contribution Plus: Permanent Loan Net of Construction Loan Plus: After Tax Sale Proceeds Total After Tax Cash Flow

After Tax IRR NPV @ 10% Cash On Cash

($111,455,7 56)

($8,356,889) ($265,200)

($18,800) ($6,895,7 77) ($3,342,3 31) ($1,169,8 16) $1,008,3 82 $1,169,81 6 $2,178,1 97

($18,800) ($8,750,297) ($5,768,10 1) ($2,018,835)

($18,800) ($7,614,1 37) ($4,310,4 99) ($1,508,6 75)

($8,046,231)

($7,874,497)

($265,200)

($9,000)

($18,800)

($18,800)

($6,802,594) ($2,845,57 0)

($6,224,776) ($1,843,123)

($995,949)

($645,093)

$3,129,235

$1,281,7 38 $1,508,67 5 $2,790,4 13

$2,178,1 97

$3,129,235

$2,790,4 13

$2,514,319

1.95%

2.81%

2.50%

2.26%

$1,110,400 $2,018,835

$12,283,949

$1,518,369 $995,949 $2,514,319

$1,771,263 $645,093 $2,416,356

$51,488,975 $128,987,360 ($59,966,7 81)

$131,403,716

19.85% $27,277,004 -53.80%

117.90%

($

Rent to Qualifying Tenants Quarterly IRR Pre Tax IRR Calculation

2009 ($59,966,78 1)

Yearly IRR

2010 $1,008,3 82

2011 $1,110,4 00

2012 $1,281,7 38

$2,178,1 97

$3,129,2 35

$2,790,4 13

Quarter

Year

4

2008

2013 $1,518,369

2014 $158,551, 236

Total $103,503, 344

$2,514,319

$131,403, 716

$82,049,0 99

22.69%

After Tax IRR Calculation

($59,966,78 1)

Yearly IRR

19.85%

Quarter

Year ($111,455,7 56)

4

2008

1

2009

1

2009

2

2009

2

2009

3

2009

($111,455,7 56)

3

2009

4

2009

$51,488,97 5

4

2009

$51,488,97 5

1

2010

$252,095

1

2010

$544,549

2

2010

$252,095

2

2010

$544,549

3

2010

$252,095

3

2010

$544,549

4

2010

$252,095

4

2010

$544,549

1

2011

$277,600

1

2011

$782,309

2

2011

$277,600

2

2011

$782,309

3

2011

$277,600

3

2011

$782,309

4

2011

$277,600

4

2011

$782,309

1

2012

$320,435

1

2012

$697,603

2

2012

$320,435

2

2012

$697,603

3

2012

$320,435

3

2012

$697,603

4

2012

$320,435

4

2012

$697,603

1

2013

$379,592

1

2013

$628,580

2

2013

$379,592

2

2013

$628,580

3

2013

$379,592

3

2013

$628,580

4

2013

$379,592

4

2013

$628,580

1

2014

$442,816

1

2014

$604,089

2

2014

$442,816

2

2014

$604,089

3

2014

3

2014

4

2014

$442,816 $158,994,0 52

4

2014

$604,089 $132,007,8 05

Pre Tax IRR

20.90%

After Tax IRR

18.51%

Rent to Qualifying Tenants Key Assumptions Acquisition Purchase date Cost of land and existing building shell

Amounts 11/15/2008 $35,000,00 0

Contract deposit Closing cost

10%

of cost of the land

1.5%

of cost of the land

$3,500,0 00 $525,000 $35,525,00 0

Building info Maximum rentable space

350,000

Retail

3

units

Retail space

15%

Residential

250

units

100

units

@ market

50

units

@ 45% of market

50

units

150

units

One bedrooms

Two bedrooms

50%

Rent 50% to low income qualifying tenants (1=yes, 2=no)

of total sqft

52, 500 297, 500

sqft

sqft sqft

of one bedrooms

1

Predevelopment cost Engineer, design, architects, fees & costs

$45,000

NYC plumbing, water, steam connection permits Land, soil tests, environmental testing

$3,500 $13,000 $61,500

Construction costs Demolition costs Hard costs

$375

Soft costs

8.0%

Taxes Income tax

Ordinary Rate Capital gain tax Capital gain recapture tax rate

35% 15%

25%

per rentable sqft of hard costs

$400,000 $133,875,0 00 $10,710,00 0 $144,985,0 00

Sale of property Sale date

12/31/2014

Sale cap rate

4.5%

Cost of sale

2.5%

Construction loan Loan term

12

months

Interest rate

7.5%

Loan amount

50%

of constructi on costs

1/09 - 4/09

4

months

50%

of loan

5/09 - 11/09

7

months

50%

of loan

10%

of loan of retainage

Mortgage retainage 12/09

100%

$9,061,5 63 $5,178,0 36

monthly monthly

$72,492,50 0 $36,246,25 0 $36,246,25 0 $7,249,250 $7,249,250

Construction financing fees Points

$30,000

Lender's legal fees

$15,000

Engineering review

$5,000

Borrower's legal fees Total construction loan closing cost

$10,000 $60,000

Permanent loan From the Constructi on Budget

Total Cost of the Property

Valuation

$11,623,086

NOI

Loan amount

Cap Rate

5.5%

$211,328,8 32 $126,797,2 99

60%

Interest rate

6.75%

Term

25

years

Amortization

25

years

Commitment letter fees Issuing charge

$183,478,2 62

0.15%

of the loan

$190,196

Legal fee

$30,000

Other costs

$15,000

Borrower's costs

$40,000 $275,196

Closing fees Points

0.10%

of the loan

$126,797

Borrower's legal fees

$25,000

Lender's legal fees

$15,000

Other fees

$28,000 $194,797

Rental assumptions Lease-up leasing commissions

5%

of first lease year GI

5

years

Retail Lease term Monthly rents

2010-2014

Vacancy and collection loss Increase

2.0%

$25,000

per store

$900,000

2010

4%

$36,000

2011

2.00%

$17,280

2012

2.00%

2013

2.00%

2014

2.00%

Residential Lease term

3

years

2010 & 2011 One bedrooms

$4,500

One bedrooms @ 45%

45%

of market rent

Two bedrooms Residential Gross Potential Income

$6,500

Vacancy and collection loss Increase

$2,025

3.5%

2010

3%

2011

3.5%

2012

3.5%

2013

3.5%

2014

3.5%

Residential Rent Escalation

3%

Commercial Base Rent Escalation

5%

per month per month per month

$2,700,000 $1,215,000 $11,700,00 0 $15,615,00 0

Operating Expenses Lease-up year

2010

15%

of PGI

Stabilized year

2011

10%

of PGI

Escalation

Real estate taxes

3%

2008

45 days/3 60

$3,438

2009

$27,500

2010

$27,500

Market Rate Rents Construction Budget 11/15/2008 - 12/31/2009 Acquisition costs Cost of land and existing building shell Closing cost

Predevelopment costs Engineer, design, architects, fees & costs NYC plumbing, water, steam connection permits Land, soil tests, environmental testing

Construction costs Demolition costs Hard costs Soft costs

Financing costs - construction loan Construction financing fees Construction loan interest Real estate taxes Year 2008 Year 2009

Total

$35,000,00 0 $525,000 $35,525,00 0

Equity

100%

Loan

Per SQFT 350,000 0% $100.00 $1.50

$35,525,0 00

100%

$101.50

0%

$45,000

$0.13

$3,500

$0.01

$13,000 $61,500

$0.04 $0.18

$61,500

50% $400,000 $133,875,0 00 $10,710,00 0 $144,985,0 00

50% $1.14 $382.50 $30.60

$72,492,5 00

$72,492,50 0

100%

0%

$414.24

$60,000

$0.17

$2,815,825

$8.05

$2,875,825

$2,875,82 5 100%

$8.22 0%

$3,438

$0.01

$27,500 $30,938

$0.08 $0.09

$30,938

$183,478,2 62

Total Cost of the Property Financing costs - permanent loan Commitment letter fees

$72,492,50 0

$524.22

100% $251,142

$0.72

$178,761 $429,903

$429,903

$0.51 $1.23

$183,908,1 66

$111,415, 666

Closing fees

Total Development Costs

$110,985, 762

$72,492,50 0

$525.45

Market Rate Rents Market Rate Rents 72,492,5 00 7.50% 0.63% 10%

Loan Amount Annual Interest Rate Monthly Interest Rate Retainage

Date

Amount

Retainag e

January-09

9,061,563

906,156

February-09

9,061,563

906,156

March-09

9,061,563

906,156

April-09

9,061,563

906,156

May-09

5,178,036

517,804

June-09

5,178,036

517,804

July-09

5,178,036

517,804

August-09

5,178,036

517,804

September-09

5,178,036

517,804

October-09

5,178,036

517,804

November-09

5,178,036

517,804

December-09

Actual Loan Draw Interest Balance 8,155,40 8,155,40 6 6 8,155,40 16,361,7 6 50,971 84 8,155,40 102,26 24,619,4 6 1 51 8,155,40 153,87 32,928,7 6 2 29 4,660,23 205,80 37,794,7 2 5 66 4,660,23 236,21 42,691,2 2 7 15 4,660,23 266,82 47,618,2 2 0 67 4,660,23 297,61 52,576,1 2 4 14 4,660,23 328,60 57,564,9 2 1 47 4,660,23 359,78 62,584,9 2 1 60 4,660,23 391,15 67,636,3 2 6 48 7,249,25 422,72 75,308,3 0 7 25

Totals

72,492,500

7,249,25 0

72,492,5 00

2,815,8 25

75,308,3 25

Market Rate Rents Permanent Loan Amortization Schedule Permanent Loan less Construction Loan Balance $ Loan amount 110,761,314 Interest rate 6.75% 2 Amortization period 5 Debt service amount

($765,263)

Loan closing date

Payment Dates

$ 35,452,989

annually years

0

monthly month

per month

($9,183,152)

Debt Service

Interest Paid

Principal Amortized

(765,26

(623,03

per year

12/31/2009

Beginning Balance

1

1/31/2010

110,761,314

3)

2

2/28/2010

110,619,083

3)

3

3/31/2010

110,476,053

3)

4

4/30/2010

110,332,218

3)

5

5/31/2010

110,187,574

3)

6

6/30/2010

110,042,117

3)

7

7/31/2010

109,895,841

3)

8

8/31/2010

109,748,742

3)

9 1 0 1 1 1 2

9/30/2010

109,600,816

3)

10/31/2010

109,452,058

3)

11/30/2010

109,302,463

3)

12/31/2010

109,152,027

3)

2010 Total

1,319,570,306

2)

1/31/2011

109,000,744

3)

2/28/2011

108,848,611

3)

3/31/2011

108,695,622

3)

2) (765,26

(622,23 2)

(765,26

(621,42 8)

(765,26

(620,61 9)

(765,26

(619,80 5)

(765,26

(618,98 7)

(765,26

(618,16 4)

(765,26

(617,33 7)

(765,26

(616,50 5)

(765,26

(615,66 8)

(765,26

(614,82 6)

(765,26

(613,98 0)

(9,183,15

1 3 1 4 1 5

0.6% 30

($142,23 0) ($143,03 0) ($143,83 5) ($144,64 4) ($145,45 8) ($146,27 6) ($147,09 9) ($147,92 6) ($148,75 8) ($149,59 5) ($150,43 6) ($151,28 3)

(7,422,58 3)

(765,26

(613,12

(765,26

(612,27 3)

(765,26

(611,41 3)

110,619,08 3 110,476,05 3 110,332,21 8 110,187,57 4 110,042,11 7 109,895,84 1 109,748,74 2 109,600,81 6 109,452,05 8 109,302,46 3 109,152,02 7 109,000,74 4

(1,760,56 9)

9)

Outstanding Balance

($152,13 3) ($152,98 9) ($153,85 0)

1,317,809,73 6 108,848,61 1 108,695,62 2 108,541,77 2

1 6 1 7 1 8 1 9 2 0 2 1 2 2 2 3 2 4

(765,26 4/30/2011

108,541,772

3)

5/31/2011

108,387,057

3)

6/30/2011

108,231,471

3)

7/31/2011

108,075,010

3)

8/31/2011

107,917,670

3)

9/30/2011

107,759,444

3)

10/31/2011

107,600,328

3)

11/30/2011

107,440,317

3)

12/31/2011

107,279,406

3)

2011 Total

1,297,777,452

2)

(610,54 7)

(765,26

(609,67 7)

(765,26

(608,80 2)

(765,26

(607,92 2)

(765,26

(607,03 7)

(765,26

(606,14 7)

(765,26

(605,25 2)

(765,26

(604,35 2)

(765,26

(603,44 7)

(9,183,15

($154,71 5) ($155,58 5) ($156,46 1) ($157,34 1) ($158,22 6) ($159,11 6) ($160,01 1) ($160,91 1) ($161,81 6)

(7,299,99 8)

108,387,05 7 108,231,47 1 108,075,01 0 107,917,67 0 107,759,44 4 107,600,32 8 107,440,31 7 107,279,40 6 107,117,59 0

(1,883,15 4)

1,295,894,29 8

Rent to Qualifying Tenants Permanent Loan Amortization Schedule Permanent Loan less Construction Loan Balance Loan amount

$ 126,797,299

Interest rate

6.75% 2

Amortization period

5

Debt service amount

annually 0

per month

monthly month

($10,512,686)

per year

12/31/2009

Beginning Balance

Debt Service

Interest Paid

(876,05

(713,23

1/31/2010

126,797,29 9

7)

2/28/2010

126,634,47 7

7)

3/31/2010

126,470,73 9

7)

4/30/2010

126,306,08 0

7)

5/31/2010

126,140,49 4

7)

6/30/2010

125,973,97 7

7)

7/31/2010

125,806,52 4

7)

8/31/2010

125,638,12 8

7)

9/30/2010

125,468,78 6

7)

10/31/201 0

125,298,49 0

7)

11/30/201 0

125,127,23 7

7)

12/31/201 0

124,955,02 1 1,510,617,25

2010 Total

0.6% 30

years ($876,057)

Loan closing date

Payment Dates

$51,488,975

3

5) (876,05 (876,05

124,781,83 6

2/28/2011 3/31/2011

124,607,67 6 124,432,53

(711,39 8)

(876,05

(710,47 2)

(876,05

(709,54 0)

(876,05

(708,60 4)

(876,05

(707,66 2)

(876,05

(706,71 4)

(876,05

(705,76 2)

(876,05

(704,80 4)

(876,05

(703,84 1)

(876,05 7)

(702,87 2)

(10,512,68 6)

1/31/2011

(712,31 9)

(876,05

(701,89

(876,05

(700,91 8)

(876,05

(699,93

Outstanding Balance 126,634,47 7 126,470,73 9 126,306,08 0 126,140,49 4 125,973,97 7 125,806,52 4 125,638,12 8 125,468,78 6 125,298,49 0 125,127,23 7 124,955,02 1 124,781,83 6

(2,015,46 4)

8)

7)

($162,82 2) ($163,73 8) ($164,65 9) ($165,58 5) ($166,51 7) ($167,45 4) ($168,39 5) ($169,34 3) ($170,29 5) ($171,25 3) ($172,21 6) ($173,18 5)

(8,497,22 2)

7)

Principal Amortized

($174,15 9) ($175,13 9) ($176,12

1,508,601,78 9 124,607,67 6 124,432,53 7 124,256,41

7

7)

4/30/2011

124,256,41 3

7)

5/31/2011

124,079,29 8

7)

6/30/2011

123,901,18 7

7)

7/31/2011

123,722,07 4

7)

8/31/2011

123,541,95 4

7)

9/30/2011

123,360,82 0

7)

10/31/201 1

123,178,66 8

7)

11/30/201 1

122,995,49 0

7)

12/31/201 1

122,811,28 3 1,485,669,23

2011 Total

Payment Dates

8

(876,05

(698,94 2)

(876,05

(697,94 6)

(876,05

(696,94 4)

(876,05

(695,93 7)

(876,05

(694,92 3)

(876,05

(693,90 5)

(876,05

(692,88 0)

(876,05

(691,85 0)

(876,05 7)

(690,81 3)

(10,512,68 6)

Beginning Balance

4) ($177,11 5) ($178,11 1) ($179,11 3) ($180,12 0) ($181,13 4) ($182,15 3) ($183,17 7) ($184,20 8) ($185,24 4)

3)

(8,356,88 9)

Debt Service

3 124,079,29 8 123,901,18 7 123,722,07 4 123,541,95 4 123,360,82 0 123,178,66 8 122,995,49 0 122,811,28 3 122,626,03 9

(2,155,79 6)

Interest Paid

1/31/2012

122,626,039

(876,057)

(689,771)

2/28/2012

122,439,754

(876,057)

(688,724)

3/31/2012

122,252,420

(876,057)

(687,670)

4/30/2012

122,064,033

(876,057)

(686,610)

5/31/2012

121,874,586

(876,057)

(685,545)

6/30/2012

121,684,073

(876,057)

(684,473)

7/31/2012

121,492,489

(876,057)

(683,395)

8/31/2012

121,299,827

(876,057)

(682,312)

9/30/2012

121,106,081

(876,057)

(681,222)

10/31/2012

120,911,246

(876,057)

(680,126)

11/30/2012

120,715,315

(876,057)

(679,024)

12/31/2012

120,518,281

(876,057)

(677,915)

1,483,513,44 1

Principal Amortized

($186,286 ) ($187,334 ) ($188,387 ) ($189,447 ) ($190,513 ) ($191,584 ) ($192,662 ) ($193,746 ) ($194,835 ) ($195,931 ) ($197,034 ) ($198,142 )

Outstanding Balance 122,439,754 122,252,420 122,064,033 121,874,586 121,684,073 121,492,489 121,299,827 121,106,081 120,911,246 120,715,315 120,518,281 120,320,139

2012 Total

1,458,984,143

1/31/2013

120,320,139

(876,057)

(676,801)

2/28/2013

120,120,883

(876,057)

(675,680)

3/31/2013

119,920,506

(876,057)

(674,553)

4/30/2013

119,719,001

(876,057)

(673,419)

5/31/2013

119,516,364

(876,057)

(672,280)

6/30/2013

119,312,586

(876,057)

(671,133)

7/31/2013

119,107,662

(876,057)

(669,981)

8/31/2013

118,901,586

(876,057)

(668,821)

9/30/2013

118,694,350

(876,057)

(667,656)

10/31/2013

118,485,948

(876,057)

(666,483)

11/30/2013

118,276,375

(876,057)

(665,305)

12/31/2013

118,065,622 1,430,441,02 1

(876,057)

(664,119)

2013 Total

(10,512,686)

(10,512,686)

(8,206,786)

(8,046,231)

1/31/2014

117,853,684

(876,057)

(662,927)

2/28/2014

117,640,554

(876,057)

(661,728)

3/31/2014

117,426,225

(876,057)

(660,523)

4/30/2014

117,210,690

(876,057)

(659,310)

5/31/2014

116,993,943

(876,057)

(658,091)

6/30/2014

116,775,977

(876,057)

(656,865)

7/31/2014

116,556,785

(876,057)

(655,632)

8/31/2014

116,336,359

(876,057)

(654,392)

9/30/2014

116,114,694

(876,057)

(653,145)

10/31/2014

115,891,782

(876,057)

(651,891)

(2,305,900)

($199,256 ) ($200,377 ) ($201,504 ) ($202,638 ) ($203,778 ) ($204,924 ) ($206,077 ) ($207,236 ) ($208,401 ) ($209,574 ) ($210,753 ) ($211,938 ) (2,466,455)

($213,130 ) ($214,329 ) ($215,535 ) ($216,747 ) ($217,966 ) ($219,192 ) ($220,425 ) ($221,665 ) ($222,912 ) ($224,166 )

1,456,678,243 120,120,883 119,920,506 119,719,001 119,516,364 119,312,586 119,107,662 118,901,586 118,694,350 118,485,948 118,276,375 118,065,622 117,853,684 1,427,974,566 117,640,554 117,426,225 117,210,690 116,993,943 116,775,977 116,556,785 116,336,359 116,114,694 115,891,782 115,667,616

11/30/2014

115,667,616

(876,057)

(650,630)

12/31/2014 2014 Total

115,442,190

(876,057)

(649,362)

Payment Dates 2 5

2/28/2012

106,954,86 4

3)

3/31/2012

106,791,22 3

3)

4/30/2012

106,626,66 1

3)

5/31/2012

106,461,17 3

3)

6/30/2012

106,294,75 4

3)

7/31/2012

106,127,40 0

3)

8/31/2012

105,959,10 3

3)

9/30/2012

105,789,86 1

3)

10/31/201 2

105,619,66 6

3)

11/30/201 2

105,448,51 4

3)

12/31/201 2 2012 Total

105,276,39 9 1,274,467,20 7

1/31/2013

105,103,31 6

3)

2/28/2013

104,929,26 0

3)

3/31/2013

104,754,22 4

3)

4/30/2013

104,578,20 4

3)

5/31/2013

104,401,19 4

3)

6/30/2013

104,223,18 8

3)

7/31/2013

104,044,18 0

3)

2 9 3 0 3 1 3 2 3 3 3 4 3 5 3 6

3 7 3 8 3 9 4 0 4 1 4 2 4 3

Debt Service 3)

2 8

Beginning Balance

1/31/2012

2 7

(10,512,686)

107,117,59 0

2 6

1,399,910,500

(7,874,497) Interest Paid

(765,26

(602,53 6)

(765,26

(601,62 1)

(765,26

(600,70 1)

(765,26

(599,77 5)

(765,26

(598,84 4)

(765,26

(597,90 8)

(765,26

(596,96 7)

(765,26

(596,02 0)

(765,26

(595,06 8)

(765,26

(594,11 1)

(765,26

(593,14 8)

(765,26 3)

($225,427 ) ($226,695 )

(592,18 0)

(9,183,15 2)

(7,168,87 8)

(765,26

(591,20 6)

(765,26

(590,22 7)

(765,26

(589,24 3)

(765,26

(588,25 2)

(765,26

(587,25 7)

(765,26

(586,25 5)

(765,26

(585,24 9)

115,442,190 115,215,495

(2,638,189)

Principal Amortized

($162,7 26) ($163,6 42) ($164,5 62) ($165,4 88) ($166,4 19) ($167,3 55) ($168,2 96) ($169,2 43) ($170,1 95) ($171,1 52) ($172,1 15) ($173,0 83)

Outstanding Balance 106,954,86 4 106,791,22 3 106,626,66 1 106,461,17 3 106,294,75 4 106,127,40 0 105,959,10 3 105,789,86 1 105,619,66 6 105,448,51 4 105,276,39 9 105,103,31 6

(2,014,27 4)

($174,0 57) ($175,0 36) ($176,0 20) ($177,0 10) ($178,0 06) ($179,0 07) ($180,0 14)

1,272,452,93 3 104,929,26 0 104,754,22 4 104,578,20 4 104,401,19 4 104,223,18 8 104,044,18 0 103,864,16 6

4 4

8/31/2013

103,864,16 6

3)

9/30/2013

103,683,14 0

3)

10/31/201 3

103,501,09 5

3)

11/30/201 3

103,318,02 5

3)

12/31/201 3

103,133,92 7 1,249,533,91 8

4 5 4 6 4 7 4 8

2013 Total

(765,26 (765,26

1/31/2014

2

50

2/28/2014

7

51

3/31/2014

4

52

4/30/2014

8

53

5/31/2014

2

54

6/30/2014

2

55

7/31/2014

1

56

8/31/2014

3

57

9/30/2014

2

58

10/31/201 4

1

59

11/30/201 4

5

60

12/31/201 4

8

(581,16 4)

(765,26 3)

(580,12 8)

(9,183,15 2)

(7,028,62 8)

(765,26 3)

(579,08 7)

(765,26 3)

102,575,39

(578,04 0)

(765,26 3)

102,387,11

(576,98 7)

(765,26 3)

102,197,78

(575,92 8)

(765,26 3)

102,007,38

(574,86 3)

(765,26 3)

101,815,91

(573,79 2)

(765,26 3)

101,623,36

(572,71 5)

(765,26 3)

101,429,73

(571,63 1)

(765,26 3)

101,235,01

(570,54 2)

(765,26 3)

101,039,19

(569,44 7)

(765,26 3)

100,842,27

(568,34 5)

(765,26 3)

1,222,864,57 6

(582,19 4)

(765,26

102,762,61

2014 Total

(583,21 8)

(765,26

102,948,79 49

(584,23 6)

(567,23 8)

(9,183,15 2)

(6,878,61 3)

($181,0 27) ($182,0 45) ($183,0 69) ($184,0 99) ($185,1 34)

103,683,14 0 103,501,09 5 103,318,02 5 103,133,92 7 102,948,79 2

(2,154,52 4)

($186,1 76) ($187,2 23) ($188,2 76) ($189,3 35) ($190,4 00) ($191,4 71) ($192,5 48) ($193,6 31) ($194,7 20) ($195,8 16) ($196,9 17) ($198,0 25) (2,304,53 9)

1,247,379,39 4 102,762,61 7 102,575,39 4 102,387,11 8 102,197,78 2 102,007,38 2 101,815,91 1 101,623,36 3 101,429,73 2 101,235,01 1 101,039,19 5 100,842,27 8 100,644,25 3

Market Rate Rents Projected Lease-up Schedule January to December 2010

Lease-up Schedule Total

January

February

March

April

May

June

Residential 1 bedrooms at market rent

$4,500

Units leased

40

% leased Gross Income Rent-up Charges

per month 80

80

40%

80%

80%

90%

100%

1

$180,000

$360,000

$360,000

$405,000

$450,000

$450

$270,000

$108,000

$108,000

$0

$27,000

$27,000

$0

Units leased % leased

per month

0

0

0

0

0

40%

60%

80%

90%

100%

$0

$0

150

150

Gross Income

$0

$0

$0

$0

Rent-up Charges

$0

$0

$0

$0

2 bedrooms

$6,500

Units leased

Total Residential Rental Income Total Residential Rent-up Charges

1

per month

150

75 50%

67%

83%

100%

100%

1

$10,725,000

$487,500

$650,000

$812,500

$975,000

$975,000

$975

$585,000

$292,500

$97,500

$97,500

$97,500

% leased

Rent-up Charges

100

$4,905,000

1 bedrooms at 45% market

Gross Income

90

$ 15,630,000 $ 855,000

$ 667,500 $ 400,500

100

$ 1,010,000 $ 205,500

125

$ 1,172,500 $ 97,500

$ 1,380,000 $ 124,500

$ 1,425,000

$ 1,425,0

$

$

27,000

Retails Stores Units leased

$25,000 3

1

2

3

3

3

33%

67%

100%

100%

100%

1

$825,000

$25,000

$50,000

$75,000

$75,000

$75,000

$75

$45,000

$15,000

$15,000

$15,000

% leased Retail Rental Income Retail Rent-up Charges

Market Rate Rents Projected Lease-up Schedule January to December 2010

Lease-up Schedule

per month

July

August

September

October

November

December

Residential 1 bedrooms at market rent Units leased % leased Gross Income

100

100

100

100

100

100

100%

100%

100%

100%

100%

100%

$450,000

$450,000

$450,000

$450,000

$450,000

$450,000

0

0

0

0

0

0

100%

100%

100%

100%

100%

100%

$0

$0

$0

$0

$0

$0

Rent-up Charges

1 bedrooms at 45% market Units leased % leased Gross Income Rent-up Charges

2 bedrooms Units leased % leased Gross Income

150

150

150

150

150

150

100%

100%

100%

100%

100%

100%

$975,000

$975,000

$975,000

$975,000

$975,000

$975,000

Rent-up Charges

Total Residential Rental Income Total Residential Rent-up Charges

$ 1,425,000 $

$ 1,425,000 -

$

$ 1,425,000 -

$

$ 1,425,000 -

$

$ 1,425,000 -

$

$ 1,425,000 -

$

-

Market Rate Rents Lease-up Year Proforma January to December 2010

Residential Rental Income 1 bedrooms at market rent 1 bedrooms at 45% market

Total

January

February

March

April

$4,905,00 0

$180,000

$360,00 0

$360,00 0

$405,00 0

$450,00 0

$0 $812,50 0 $1,172,5 00

$0 $975,00 0 $1,380,0 00

$0 $975,00 0 $1,425,0 00

$0

May

2 bedrooms Total Residential Income

$0 $10,725,0 00 $15,630,0 00

$487,500 $667,500

$0 $650,00 0 $1,010,0 00

Retail Rental Income

$825,000

$25,000

$50,000

$75,000

$75,000

$75,000

Potential Gross Income

$16,455,0 00

$692,500

$1,060,0 00

$1,247,5 00

$1,455,0 00

$1,500,0 00

Vacancy and Credit Loss Residential

$468,900

$20,025

$30,300

$35,175

$41,400

$42,750

Retail Total Vacancy and Credit Loss

$33,000

$1,000

$2,000

$3,000

$3,000

$3,000

$501,900

$21,025

$32,300

$38,175

$44,400

$45,750

Effective Gross Income

$15,953, 100

$671,47 5

$1,027, 700

$1,209, 325

$1,410, 600

$1,454, 250

$2,468,25 0

$103,875

$159,00 0

$187,12 5

$218,25 0

$225,00 0

$2,292 $189,41 7

$2,292 $220,54 2

$2,292 $227,29 2

$1,019, 908

$1,190, 058

$1,226, 958

Expenses Operating Expenses Real Estate Taxes Total Expenses

$27,500 $2,495,75 0

$2,292 $106,167

$2,292 $161,29 2

Net Operating Income

$13,457, 350

$565,30 8

$866,40 8

($9,183,15 2)

($765,26 3)

($765,26 3)

($765,26 3)

($765,26 3)

($765,26 3)

Residential

($855,000)

($400,50 0)

($27,000 )

($45,000)

($97,500 ) ($15,000 ) ($112,50 0)

($124,50 0)

Retails Total Rent-up Charges

($205,50 0) ($15,000 ) ($220,50 0)

$0 ($124,50 0)

$0 ($27,000 )

($119,3 54)

$142,14 6

$300,29 6

$434,69 6

Less: Debt Service Less: Rent-up Charges

Plus: Permanent Loan Before Tax Cash Flow

($900,000) $35,452,9 89 ` $38,827, 186

($15,000) ($415,50 0) $35,452, 989 $34,837, 534

June

July

August

September

October

November

December

$450,000 $0

$450,000 $0

$450,000 $0

$450,000 $0

$450,000 $0

$450,000 $0

$450,000 $0

$975,000 $1,425,00 0

$975,000 $1,425,00 0

$975,000 $1,425,00 0

$975,000

$975,000 $1,425,00 0

$975,000

$975,000 $1,425,00 0

$75,000

$75,000

$75,000

$1,500,00 0

$1,500,00 0

$1,500,00 0

$42,750

$42,750

$42,750

$42,750

$42,750

$42,750

$42,750

$3,000 $45,750

$3,000 $45,750

$3,000 $45,750

$3,000 $45,750

$3,000 $45,750

$3,000 $45,750

$3,000 $45,750

$1,454,2 50

$1,454,2 50

$1,454,2 50

$1,454,25 0

$1,454,2 50

$1,454,25 0

$1,454,2 50

$225,000

$225,000

$225,000

$225,000

$225,000

$225,000

$225,000

$2,292 $227,292

$2,292 $227,292

$2,292 $227,292

$2,292 $227,292

$2,292 $227,292

$2,292 $227,292

$2,292 $227,292

$1,226,9 58

$1,226,9 58

$1,226,9 58

$1,226,95 8

$1,226,9 58

$1,226,95 8

$1,226,9 58

($765,26 3)

($765,263 )

($765,263 )

($765,263)

($765,263 )

($765,263) ($765,263)

$1,425,000 $75,000

$1,500,000

$75,000 $1,500,00 0

$1,425,000 $75,000

$1,500,000

$75,000 $1,500,00 0

$0

$0

$0

$0

$0

$0

$0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$461,69 6

$461,696

$461,69 6

$461,696

$461,696

$461,696

$461,696

Market Rate Rents Depreciation Schedules

Total Cost of Property Less: Basis of Land Land Purchase Cost Closing Costs

$183,478,26 2 $35,000,0 00 $525,000

Demolition Costs

$400,000

Basis of Land

$35,925,000 $147,553,26 2

Depreciable Basis (Basis of Building) Percent allocable to personal property

11%

Portion allocable to personal property

$16,230,859 $131,322,40 4

Portion allocable to real property Useful Life 27.5

years

for real property for personal 7 years property Straight Line Method for Real Property only Annual Depreciation

Annual Depreciation real property Annual Depreciation personal property

Accumulated Depreciation

Depreciable Basis Less: Accumulated Depreciation Plus: Basis of Land

2010 $4,576,38 7 $2,319,39 0 $6,895,77 7

2011

$8,750,297

2012 $4,775,36 0 $2,838,77 7 $7,614,13 7

$6,895,77 7

$15,646,074

$23,260,2 11

$30,062,806

$36,287,58 2

$147,553, 262 ($6,895,77 7) $35,925,0

$147,553,26 2 ($15,646,07 4) $35,925,000

$147,553, 262 ($23,260,2 11) $35,925,0

$147,553,26 2 ($30,062,80 6) $35,925,000

$147,553,2 62 ($36,287,5 82) $35,925,00

$4,775,360 $3,974,937

2013

2014

$4,775,360

$4,775,360

$2,027,234

$1,449,416

$6,802,594

$6,224,776

00 $176,582 ,486

$167,832,1 88

00 $160,218, 051

$153,415,4 57

0 $147,190, 681

Assume no Section 1245 Recapture in year of sale 7 Year Depreciation 17.49 14.29% 24.49% % 12.49%

8.93%

8.92%

8.93%

4.46%

Adjusted Basis

Market Rate Rents Amortization Schedules Financing Costs: Permanent Loan Fees

Commitment letter fees Closing fees

Annual Amortization

$251,1 42 $178,7 61 $ 429,90 3 $17,19 6

Loan Term

25 years

Amortization Schedule

Annual Amortization

Unamortized Amount

2010

2011

2012

2013

2014

$17,19 6

$17,19 6

$17,19 6

$17,19 6

$17,19 6

$ 412,70 7

$ 395,51 1

$ 378,31 5

$ 361,11 9

$ 343,92 3

2010

2011

2012

2013

2014

$285,0 00 $9,000

$285,0 00 $9,000

$285,0 00 $9,000

$9,000

$9,000

Financing Costs Rent-up Charges

Rent-up Charges Residential Retail Total Rent-up Charges Residential Lease Terms Retail Lease Terms Amortization Schedule

$855,0 00 $45,00 0 $900,0 00 3 years years 5 years years

Annual Amortization Residential Retail

Total Annual Amortization Unamortized Amount Residential Retails Total Unamortized Rent-up Charges Market Rate Rents

$294,0 00

$294,0 00

$294,0 00

$9,000

$9,000

$570,0 00 $36,00 0 $606,0 00

$312,0 00

$18,00 0

$9,000

$0

Tax Calculations Real Estate Taxes for 2011

= Land & (Total Constrcution Cost x 40%) = (Assessed Valuation) x 5.911% (Tax Rate)

Assessed Valuation Real Property Tax Land (Acquisition Cost) Total Construction Cost

$35,525,000 $144,985,000 x

0.40

$57,994,000 $93,519,000

Assessed Valuation Tax Rate

@

5.91%

Real Property Tax Real Estate Tax Exemption

Acquisition

Construction Lease-up Stabilized Operation Operation Operation

$5,527,908

Yea r 2008

200 9 201 0 201 1 201 2 201 3 201

RE Tax

Exemption %

Adjusted RE Tax

$3,438

0%

$3,438

$27,500

0%

$27,500

$27,500

0%

$27,500

$5,527,908

50%

$2,763,954

$5,527,908

45%

$3,040,349

$5,527,908 $5,527,908

40% 35%

$3,316,745 $3,593,140

Operation

4 201 5

$5,527,908

30%

$3,869,536

Capital Gain Taxes in 2014

Sale Price Less: Cost of Sale Less: Mortgage Balance

=2015 NOI / Sale Cap

Before Tax Proceeds

Less: Recapture Tax @ Less: Capital Gain Tax @

25% 15%

After Tax Proceeds

Gain on Sale Sale Price Less: Cost of Sale Net Sale Proceeds Less: Total Adjusted Basis

($18,107,347) $140,082,831

$274,775,720 ($6,869,393) $267,906,327 ($147,190,681) $120,715,646 $22,881,934 $97,833,712

Gain on Sale

Depreciation Recapture Long Term Capital Gain Tax on Recaptured Depreciation Tax on Long Term Capital Gain

$274,775,720 ($6,869,393) ($100,644,253) $167,262,074 ($9,071,895)

25%

$5,720,483

15%

$14,675,057

Market Rate Rents Before Tax Cash Flow Projection 2008 to 2014 Year

2009

2010

2011

2012

2013

Construction

Lease-up

Stabilization

Operation

Operation

$4,905,000

$5,400,000

$5,562,00 0

$5,728,860

$0

$0

Revenues: Residential Rental Income 1 bedrooms at market rent 1 bedrooms at 75% market 2 bedrooms Total Residential Income Retail Rental Income Potential Gross Income Vacancy and Credit Loss

$10,725,000

$11,700,000

$15,630,000

$17,100,000

$825,000 $16,455,000

Residential Retail Total Vacancy and Credit Loss Effective Gross Income

$900,000 $18,000,000

Net Operating Income Less: Debt Service Less: Rent-up Charges Before Tax Cash Flow Less: Equity Contribution

($111,415,66 6)

Plus: Permanent Loan Net of Construction Loan

$35,452,989

Plus: Sale Proceeds Total Before Tax Cash Flow

($75,962,67 7)

$18,141,390 $992,250 $19,133,640

$6,077,748 $0 $13,168,453 $19,246,201 $1,093,956 $20,340,156

$485,312

$502,297

$519,878

$538,074

$556,906

$33,660

$34,333

$35,020

$35,720

$36,435

$518,972 $17,481,02 9

Expenses:

Total Expenses

$12,412,530

$0 $12,784,9 06 $18,685,6 32 $1,041,86 3 $19,727,4 94

Year After Sale

$33,000

$15,953,100

Real Estate Taxes

$945,000 $18,558,0 00

$0

$5,900,72 6

2015

$468,900

$501,900

Operating Expenses

$0 $12,051,0 00 $17,613,0 00

2014 Operation / Sale

$2,468,250

$1,800,000

$27,500

$5,527,908

$2,495,750

$7,327,908

$13,457,350

$10,153,12 0

($9,183,152)

$536,631 $18,021, 369

$1,854,00 0 $5,527,90 8 $7,381,90 8

$554,898 $18,578,74 2

$1,854,000 $5,527,908 $7,381,908 $11,196,83 4

$573,794 $19,153, 700

$1,854,00 0 $5,527,90 8 $7,381,90 8

($9,183,152)

$10,639, 461 ($9,183,15 2)

($9,183,152)

$11,771, 792 ($9,183,15 2)

$969,968

$1,456,3 09

$2,013,682

$2,588,6 40

$2,013,682

$167,262, 074 $169,850 ,714

($900,000) $3,374,198

$3,374,198

$969,968

$1,456,3 09

$593,341 $19,746,816

$1,854,000 $5,527,908 $7,381,908

$12,364,907

Before Tax IRR NPV @ 10%

19.20% $101,702,194

Cash On Cash

-68.18%

3.03%

0.87%

1.31%

1.81%

152.45%

Market Rate Rents After Tax Cash Flow Projection 2008 to 2014 2009 Constructio n Net Operating Income Less: Interest Less: Rent-up Charges Amortization Less: Financing Fee Amortization

2010

2011

2012

2013

($7,299,998)

($7,168,878)

($7,028,628)

2014 Operation / Sale $11,771,7 92 ($6,878,613 )

Lease-up $13,457,3 50 ($7,422,583 )

Stabilization

Operation $10,639,46 1

Operation

($294,000)

($294,000)

($294,000)

($9,000)

($17,196)

($17,196)

($17,196)

($8,750,297)

($6,802,594) ($2,660,585)

($17,196) ($6,224,776 ) ($1,357,79 3)

($931,205)

($475,228)

$10,153,120

($17,196) ($6,895,777 ) ($1,172,20 6)

($6,208,371)

($7,614,137) ($4,454,75 0)

Tax Payable at 35%

($410,272)

($2,172,930)

($1,559,163)

Before Tax Cash Flow

$3,374,19 8

$969,968

$1,456,309

$2,172,930

$1,559,163

Less: Depreciation Taxable Income

Less: Income Tax After Tax Cash Flow Less: Equity Contribution

($111,415,6 66)

Plus: Permanent Loan Net of Construction Loan

$35,452,98 9

$410,272 $3,784,47 0

$3,142,898

$3,015,472

$11,196,834

$2,013,682 $931,205 $2,944,887

$475,228 $3,063,86 8

$2,944,887

$140,082,8 31 $143,146, 699

Plus: After Tax Sale Proceeds Total After Tax Cash Flow

After Tax IRR NPV @ 10% Cash On Cash

($75,962,6 77)

$3,784,47 0

$3,142,898

$3,015,472

$2,588,64 0

16.44% $21,122,71 8 -68.18%

3.40%

2.82%

2.71%

2.64%

128.48%

Market Rate Rents

Pre Tax IRR Calculation

Yearly IRR

2010 $3,374,19 8

$3,784,47 0

2011 $969,968

2012 $1,456,3 09

$3,142,89 8

$3,015,4 72

Quarter

Year

2013 $2,013,682

2014 $169,850, 714

Total $101,702,1 94

$2,944,887

$143,146, 699

$80,071,74 8

19.20%

After Tax IRR Calculation

($75,962,67 7)

Yearly IRR

16.44%

Quarter

Pre Tax IRR

2009 ($75,962,67 7)

Year 4

2008

1

($111,415,6 66)

($11,415,6 66)

4

2008

2009

1

2009

2

2009

2

2009

3

2009

3

2009

4

2009

4

2009

$35,452,98 9

1

2010

$843,549

1

2010

$946,117

2

2010

$843,549

2

2010

$946,117

3

2010

$843,549

3

2010

$946,117

4

2010

$843,549

4

2010

$946,117

1

2011

$242,492

1

2011

$785,725

2

2011

$242,492

2

2011

$785,725

3

2011

$242,492

3

2011

$785,725

4

2011

$242,492

4

2011

$785,725

1

2012

$364,077

1

2012

$753,868

2

2012

$364,077

2

2012

$753,868

3

2012

$364,077

3

2012

$753,868

4

2012

$364,077

4

2012

$753,868

1

2013

$503,421

1

2013

$736,222

2

2013

$503,421

2

2013

$736,222

3

2013

$503,421

3

2013

$736,222

4

2013

$503,421

4

2013

$736,222

1

2014

$647,160

1

2014

$765,967

2

2014

$647,160

2

2014

$765,967

3

2014

3

2014

4

2014

4

2014

$765,967 $143,912,6 66

$35,452,989

$647,160 $170,497,87 4

18.18%

After Tax IRR

15.77%

Market Rate Rents Key Assumptions Acquisition Purchase date Cost of land and existing building shell

Amounts 11/15/2008 $35,000,00 0

Contract deposit Closing cost

10%

of cost of the land

1.5%

of cost of the land

$3,500,0 00 $525,000 $35,525,00 0

Building info Maximum rentable space

350,000

Retail

3

units

Retail space

15%

Residential One bedrooms @ market

250

units

100

units

100

units

-

units

150

units

@ 45% of market Two bedrooms

50%

Rent 50% to low income qualifying tenants (1=yes, 2=no)

of total sqft

52, 500 297, 500

sqft

sqft sqft

of one bedrooms

2

Predevelopment cost Engineer, design, architects, fees & costs

$45,000

NYC plumbing, water, steam connection permits Land, soil tests, environmental testing

$3,500 $13,000 $61,500

Construction costs Demolition costs Hard costs

$375

Soft costs

8.0%

Taxes Income tax

Ordinary Rate Capital gain tax Capital gain recapture tax rate

35% 15%

25%

per rentable sqft of hard costs

$400,000 $133,875,0 00 $10,710,00 0 $144,985,0 00

Sale of property Sale date

12/31/2014

Sale cap rate

4.5%

Cost of sale

2.5%

Construction loan Loan term

12

months

Interest rate

7.5%

Loan amount

50%

of constructi on costs

1/09 - 4/09

4

months

50%

of loan

5/09 - 11/09

7

months

50%

of loan

10%

of loan of retainage

Mortgage retainage 12/09

100%

$9,061,5 63 $5,178,0 36

monthly monthly

$72,492,50 0 $36,246,25 0 $36,246,25 0 $7,249,250 $7,249,250

Construction financing fees Points

$30,000

Lender's legal fees

$15,000

Engineering review

$5,000

Borrower's legal fees Total construction loan closing cost

$10,000 $60,000

Permanent loan From the Constructi on Budget

Total Cost of the Property

Valuation

$10,153,120

NOI

Loan amount

Cap Rate

5.5%

$184,602,1 89 $110,761,3 14

60%

Interest rate

6.75%

Term

25

years

Amortization

25

years

Commitment letter fees Issuing charge

$183,478,2 62

0.15%

of the loan

$166,142

Legal fee

$30,000

Other costs

$15,000

Borrower's costs

$40,000 $251,142

Closing fees Points

0.10%

of the loan

$110,761

Borrower's legal fees

$25,000

Lender's legal fees

$15,000

Other fees

$28,000 $178,761

Rental assumptions Lease-up leasing commissions

5%

of first lease year GI

5

years

Retail Lease term Monthly rents

2010-2014

Vacancy and collection loss Increase

2.0%

$25,000

per store

$900,000

2010

4%

$36,000

2011

2.00%

$17,280

2012

2.00%

2013

2.00%

2014

2.00%

Residential Lease term

3

years

2010 & 2011 One bedrooms

$4,500

One bedrooms @ 45%

45%

of market rent

Two bedrooms Residential Gross Potential Income

$6,500

Vacancy and collection loss Increase

$2,025

3.5%

2010

3%

2011

3.5%

2012

3.5%

2013

3.5%

2014

3.5%

Residential Rent Escalation

3%

Commercial Base Rent Escalation

5%

per month per month per month

$2,700,000 $1,215,000 $11,700,00 0 $15,615,00 0

Operating Expenses Lease-up year

2010

15%

of PGI

Stabilized year

2011

10%

of PGI

Escalation

Real estate taxes

3%

2008

45 days/3 60

$3,438

2009

$27,500

2010

$27,500