Welsh Special Asset Services

Welsh Special Asset Services

WELSH’S SPECIAL ASSET SERVICES INCLUDE: •

Providing innovative solutions for all commercial and residential property types including mixed-use

•

Securing the property and enhancing operation

•

Ensuring tenant retention and filling vacancies

•

Preserving the property value and maximizing the financial performance

•

Creating a disposition strategy based on current market conditions

Integrated Services Platform

“Welsh’s level of personal service and attention to detail are second to none. They always made me feel like the most important client in the company. With the results I got, it is obvious that keeping my best interests in mind was a top priority for them.” John Trautz, Principal, Reliance Development Company L.L.P.

INTEGRATED SERVICES PLATFORM

Welsh Companies has been opening doors since 1977 when we began as a build-to-suit and speculative development firm.

Receivership Services

Today, the Welsh Companies organization consists of more than

Asset Services • Acquisitions • Asset Management • Dispositions

every aspect of commercial real estate .

Property Management

Welsh has distinguished itself from other commercial real

Accounting Services

estate companies through its significant experience as a

Asset Valuation

300 professionals whose expertise extends into virtually

full-service provider of commercial real estate solutions . The principals of Welsh have transacted business in numerous

Brokerage • Industrial • Office • Retail • Land • Residential • Multi-Family • Healthcare • Senior Housing • Hospitality Investment Sales Development, Construction, Architectural Services Finance

metropolitan areas, cultivating extensive relationships with major institutions, investment banks, lenders, REITs, private equity funds, and more. This type of approach enables us to

skillfully

and

efficiently

deal

with

complicated issues facing our clients.

even

the

most

Acquisitions

Strategic Planning

Financing Servicing

Dispositions

Site Selection

Investment Services

Planning/Architectural

Fund Management

Cost Estimating

Legal

Construction Management

Asset Management Investor Relations

Through our affiliation with SAM we are able to combine local entrepreneurial expertise with a nationwide network to deliver the very best capital markets execution and alternatives to its clients.

Senior Housing

Valuation

Receivership / REO Assignments Retail Brookdale Center, Brooklyn Center, MN 1,000,000 sf Brookdale Center is a 1 million square foot regional mall, located in Brooklyn Center, Minnesota. The Center is anchored by Macy’s and Sears, with many national retailers comprising the majority of the remaining space. Welsh Companies has been managing this property as a bank-owned asset since July 2008. Our responsibilities include management, accounting and leasing of the center. In addition, Welsh Companies has been working closely with the lender and the City of Brooklyn Center to establish a long-term development plan for the Center.

Educational 505 Wabasha St N, St. Paul, MN 82,000 sf 505 North Wabasha Street in St. Paul is the 82,000 square foot former Science Museum of Minnesota and Minnesota Business Academy. Welsh Companies was selected by the lender to manage, lease and market the property for sale. As the property was a recently vacated school facility, Welsh Companies was charged with securing the property, preventing damage due to climate conditions and repositioning the property for sale. Welsh Companies was successful in identifying a buyer for the facility and eventually closed the sale on the asset.

Hospitality / Mixed-Use Centerplace Complex, Rochester, MN 341,500 sf The Centerplace Complex was comprised of three separate buildings. Centerplace Office, located at 155 1st Ave SW, was an 11-story, 91,000 square foot, class B space and was 100% leased by Mayo Hospital and U.S. Bank. Centerplace Galleria Mall, located at 111 South Broadway, was a 85,500 square foot retail center with a mix of retail and restaurant tenants, including Gap, Talbot’s, Foot Locker and Lens Crafters. Occupancy was 7080%. The Radisson Plaza Hotel, located at 150 South Broadway, was an 11-story hotel comprised of 212 rooms. Welsh Companies took over the management of all three properties in order to preserve the value of the assets. In a partnership with Regency Hotels, we undertook a multi-million dollar renovation of the hotel and common areas, restoring the value of the property.

Property Management

Design/Build

Property Accounting

Tenant Improvements

Facility Management

General Trade Construction

Space Planning

Construction Management

Architecture

Healthcare Brokerage Receivership

Master Planning/ Site Analysis Programming

Interior Design

General Maintenance Plumbing Electrical HVAC Locksmith

Investment Sales

Our membership with NAI Global extends our brokerage expertise around the world with global access to 325 offices in 55 countries.

Office 8100 34th Ave S, Bloomington, MN 760,000 sf 8100 34th Avenue in Bloomington is a 760,000 square foot office property. The property consists of four buildings: three, 3-story office/tech buildings and one low-rise office tower. The total size of the campus is 42 acres. HealthPartners occupied 65-75% of the property and the rest was occupied by small storage-type leases. Welsh Companies managed the property for 18 months, and successfully sold it to an investment firm.

Residential 7th Place Residence, St. Paul, MN 500,000 sf 7th Place Residence, the former Orpheum Theater, is a 500,000 square foot mixed use residential property in the heart of downtown St. Paul. The main floor consists of 21,000 square feet of retail space and the residential portion is made up of 130 apartment units. Responsibilities after receiving the assignment included management, accounting and leasing of the property. Welsh Companies successfully positioned the property for sale.

Industrial 1000 Valley Park Drive, Shakopee, MN 316,000 sf 1000 Valley Park Drive is a 316,000 square foot industrial building in Valley Green Business Park, Minnesota’s largest industrial park. The company operating out of the facility went bankrupt and the receivership was assigned to an entity whom in turn hired Welsh Companies to sell and lease the space. Welsh Companies led the marketing effort and successfully sold the property to ADC Telecommunications.

The Benefits of Welsh’s Fully-Integrated Platform Special Asset Services An increased demand for receivership services is a result of the recent turbulent economic climate; however, Welsh has long been in the business of successfully preserving the value of numerous properties on behalf of mortgage holders nationwide. Welsh’s experience with all product types, throughout all markets and combined with their depth of service, provides clients with a one-of-a-kind

fully-integrated platform for receivership services.

Asset Management The asset management team at Welsh takes a project from acquisition due diligence to full implementation of the specific acquisition plan for assets to increase value during the hold period. They also oversee the development of annual business plans and budgets, approve capital expenditures, give hold/sell/refinance recommendations and manage the disposition progress. The management team has a hands-on approach with personnel who direct and oversee leasing, marketing, periodic reporting, tenant and property legal matters, and billing and collection issues for each asset. They are also responsible for insurance reviews as well as real estate tax reviews and appeals. Currently, the asset management group oversees assets totaling over 18 million square feet.

Welsh Managed Property Summary 13%

52%

Property Type

Total Square Feet

% of Portfolio

Current Value

13,726,464

52%

$823,587,840

Office

4,275,362

16%

$534,420,250

Office/Tech

2,235,602

9%

$201,204,180

Retail

2,623,360

10%

$393,504,000

Residential/Other

3,404,722

13%

$102,141,660

Industrial

10%

9%

16%

26,625,510

Welsh Current Receivership Square Footage

$2,054,857,930

1.2 Million

Welsh Offices Managed Commercial Property Owned Senior Housing & Residential Property

Property Management The Property Management Division of Welsh manages one of the largest portfolios of commercial real estate in the upper Midwest. During real estate “down cycles,” we have managed and leased a

receivership portfolio of approximately 100 assets comprising more than 8 million square feet.

Our property managers are committed to preserving and enhancing the image of every property,

maximizing overall return. Property management teams provide the specific disciplines necessary for each task. Every building is maintained in the best possible condition and is always ready to be viewed by a potential tenant or buyer. We ensure client satisfaction by building a responsive relationship and delivering prompt and conscientious service.

Brokerage

Ranked in 2008 as the number one brokerage firm by the Minneapolis/St. Paul Business Journal, NAI Welsh brokerage specialists have an intimate knowledge of the Twin Cities market, which helps us to consistently identify and secure the best space, property or land site for our clients.

Our brokers specialize by regional sub-market as well as by property type, so they thoroughly understand the ins and outs of their target market. Whether it is office, industrial or retail brokerage, land sales, healthcare, multi-family or mixed use, our wealth of experience, comprehensive database, technological expertise and strong market research enable us to quickly identify and target the right buyer or user, and in turn, generate the greatest value for our clients.

Through our partnership with NAI Global, the world’s only managed network of commercial real estate firms, our expertise extends around the world with global access to over 5,000 real estate professionals in more than 325 offices and 55 countries.

Investment Sales Welsh Companies provides capital market expertise through the acquisition and disposition of investment real estate for our clients. Our team delivers a

comprehensive process utilizing aggressive market underwriting, as well as detailed and well presented packaging to each client irrespective of the property size and value. By providing creative market-based underwriting, coordinating the due diligence process, assisting with the development of property pro rations and reviewing closing statements for accuracy, we are able to maximize value and returns.

Our investment services team is a member of NAI Global’s Investment Services Group, a dedicated group of the organization’s top brokers in major markets nationally. The NAI Global Investment Services Group shares a marketing platform and operating strategy designed to obtain and execute business with institutional and private equity property owners alike.

“The people at Welsh really strive to establish a team relationship with their customers. They have clear and concise communication down to a science. They always deliver what we need... which is why we’ve continued to work with them throughout the years.” Kathy Tucci, Vice President Facilities & Administrative services, Bremer Financial

Asset Valuation Our Brokerage and Investment Sales Group understand your need to have a broker opinion of value, many times in advance of deciding upon a prudent course of action and a real estate investment secured by a mortgage. We are skilled and prompt at providing a detailed asset valuation supported by current market data for you to use in your internal analysis.

Development, Construction & Architectural Services

Welsh Development With the support of our architecture, construction, leasing, management and investment specialists, Welsh Development provides a full range of development, redevelopment, project management and build-to-suit services. Our diverse professional staff has experience with development of all commercial and residential

property types including industrial, office, retail, apartments, senior and for-sale housing. Whether a project is half-built, just a concept or needs a complete overhaul, Welsh Development delivers the attention to detail that is necessary to make a project successful.

Genesis Architecture Genesis Architecture provides a full range of standard and customized architectural services to a variety of clients. We approach all projects, large or small, with each client’s short and long-term goals, design priorities and financial requirements in mind.

Welsh Construction The professionals at Welsh Construction specialize in building and renovating space for institutional investors, individual property owners and businesses. Often working with our affiliates at Welsh and Genesis Architecture, Welsh Construction offers a

complete range of construction services to meet the needs of each client.

Welsh Institutional Relationships

Accounting Services The Welsh team of experienced Property Accounting and I/T professionals, coupled with our wide array of accounting software experience, enables us to easily comply with the requirements of our extensive, diverse portfolio of property owners. We perform property accounting duties for large institutions as well as locally owned, single-property owners, so we believe that we are uniquely qualified to comply with our clients’ cash management, reporting, and accounting requirements regardless of the size of the portfolio.

On a daily basis, we provide high quality, accurate reports on time, and we work with our property managers and brokerage specialists to enhance the value of our clients’ assets.

Finance Welsh Capital arranges three types of financing - construction, permanent and equity - for clients. Providers include life insurance and finance companies, pension funds, commercial banks and Wall Street investment Welsh Financial Relationships

conduits. Welsh Capital provides the best financing services available for

all property types - retail, office, industrial and multi-family apartment buildings.

Welsh Capital is a member of Strategic Alliance Mortgage L.L.C. SAM is a unique company owned by 21 members who are all individually owned, commercial real estate investment banking/mortgage banking firms located coast to coast throughout the United States.

The goal of SAM is to provide local, proprietary expertise for borrowers and lenders from individual member companies that are leading providers of the best financing alternatives in their respective markets based upon their knowledge and the collective wisdom of the group.

Reporting Welsh has implemented strong internal control procedures designed to ensure reporting accuracy and to protect the assets we manage on behalf of our clients. We provide a variety of high quality, accurate reports to ensure that our clients always have the most up-to-date information. All reports are available online, giving our clients access to the information they need 24 hours a day, 7 days per week. Tenant receipts and delinquencies, vendor payments and liabilities, cash balances, and rent rolls can all be viewed.

Monthly Reports Each month, our clients receive financial reports and 4350 Baker Road Suite 400 Minnetonka, MN 55343

0897

Minnetonka Business Plaza

0652

CenterPark Industrial

0652

Penn Business Center

32,200

31,000

96%

1,200

4%

15,300

6,000

39%

9,300

61%

executive summaries to assist them with their investment decisions. These reports are provided in an easy to read

106

1095.00

8/1/2003

2/28/2009

$0.92

1334.00

12/1/2003

2/28/2009

250

6,590 Tenant D

$0.72

4745.00

4/1/2001

1/31/2009

252

12,000 Tenant E

$0.70

8400

2/1/1999

3/31/2009

202

1,288 Tenant B 1,450 Tenant C

$0.85

electronic format, so they may be forwarded as needed.

Year-End Reports Year-end expense reconciliations are designed to reimburse or collect from tenants for actual operating expenses incurred throughout the year as opposed to the assumed expenses that have already been paid. Our property operating budgets are extremely detailed, and they serve as a guide throughout the year to help explain to our clients any actual versus budget variances.

Direct Contact Our property accountants handle every aspect of the financial reporting for client properties, rather than focusing on a specific function (such as cash receipts, accounts payable, etc.). This approach makes them an integral part of the team. They are readily accessible to our clients, and are encouraged to engage in direct communication.

The Current Headquarters of Welsh In May 2008, Welsh relocated its company headquarters to Baker Road Corporate Center. The project was designed and built by Welsh Construction and Genesis Architecture and has been awarded Leadership in Energy and Environmental Design - Core and Shell (LEED-CS) Gold Level pre-certification by the U.S. Green Building Council. It is one of only a few buildings in Minnesota and approximately 250 nationwide to achieve the Gold Level certification.

Contact: Jean Kane President / Chief Operating Officer 952.897.7711 [email protected] Mark Parten Senior Vice President, Property Management 952.897.7814 [email protected] Ted Jokerst Vice President, Welsh Capital 952.897.7877 [email protected]

4350 Baker Road, Suite 400 Minnetonka, Minnesota 55343 952.897.7700 www.welshco.com

MINNEAPOLIS

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ST. PAUL

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CHICAGO

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DETROIT

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ST. LOUIS

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CINCINNATI