Valuation and Marketing Proposal River East Plaza. East Illinois Street Chicago, Illinois. CLMG Corp

Transcription

1 Valuation and Marketing Proposal River East Plaza 401 East Illinois Street Chicago, Illinois PREPARED FOR: CLMG Corp Michael Wyant Vice President - Commercial REO Marketing Julie Butticarlo Commercial REO Marketing Manager

2 TERMS OF ENGAGEMENT TERMS OF ENGAGEMENT

3 TABLE OF CONTENTS I. EXECUTIVE SUMMARY... 1 II. PROJECT TEAM... 5 III. GENERAL AREA AND PROPERTY OBSERVATIONS... 8 IV. BROKER OPINION OF VALUE V. MARKETING PROGRAM VI. TERMS OF ENGAGEMENT VII. APPENDIX COMPANY OVERVIEW PROJECT TEAM BIOGRAPHIES

4 EXECUTIVE SUMMARY EXECUTIVE SUMMARY

5 I. EXECUTIVE SUMMARY OVERVIEW Colliers International Chicago is pleased to present this valuation ( BOV ) and marketing proposal to CLMG Corporation ( CLMG or Ownership ) for the River East Plaza, 401 East Illinois Street, Chicago, Illinois ( Property ). For this important assignment we are presenting a marketing team with a wealth of expertise in office, multi-family, and redevelopment projects. THE TEAM David A. Bercu, SIOR, principal; Vernon F. Schultz, SIOR; executive vice president; Michael L. Senner, SIOR, senior vice president; Brian T. Pohl, executive vice president; and Brian P. Nagle, executive vice president will be the core team that is exclusively responsible for the marketing of the Property. Supporting the marketing team will be Aimee Course, vice president of marketing and communications; Michelle Tenuta, vice president of research and analytics, and Jerrod Wigal, senior associate in the investment services group. Additionally, the core team has already spoken about the project with Ted Novak of DLA Piper, one of the city s most respected zoning attorneys, and as a result of that discussion, the team has numerous insights to share with CLMG concerning the zoning of the property. Core Team Qualifications This experienced team of industry veterans has wide expertise in the following disciplines: Retail lease and sales Multi-use development, residential and retail land sales Property re-use and redevelopment David A. Bercu will serve as CLMG s single point of contact and strategic advisor for the project. David has spent his entire 25-year career with Colliers International and his consummated transactions in excess of $3 billion in all product types. Having spent the past year working with the CLMG team on its Dundee / Skokie land sale project, David has already forged a positive relationship with the CLMG team and brings to this project a valuable understanding of the team s goals and the way it prefers to collaborate. Vernon F. Schultz has been involved in commercial real estate in the Chicago area for more than 30 years. Since joining Colliers International in 1997 he has completed more than 1,000 transactions with a total value exceeding $2 billion. Vern and partner Michael L. Senner, senior vice president, have unmatched expertise with in-city and redevelopment / reuse P. 1 COLLIERS CHICAGO

6 projects, including the $54 million sale of an 8.2-acre land site owned by YMCA of Metropolitan Chicago. Brian T. Pohl leads Colliers International Chicago s multi-family investment services group. With more than 16 years of experience, Brian has sold more than $1.1 billion of real estate assets for a variety of owner types. He successfully sold the 1,056-unit McClurg Court Apartment complex which is nearly adjacent to the River East Plaza. Brian P. Nagle leads Colliers International Chicago s office investment services group. He focuses on the sale of properties throughout the Chicago metropolitan area and the other Midwest markets. Brian has over 30 years of capital markets expertise and has sold assets valued at more than $20 billion. Brian is supported by partner Jerrod Wigal, senior associate. Brian and Jerrod have sold 37 Chicago CBD offices properties including the Santa Fe Building at 224 South Michigan Avenue and 564 West Randolph, which was a 100% vacant loft office sale. Supporting Team Additional in-house support will be provided by Aimee Course, vice president of marketing and communications. Aimee has 16 years of real estate marketing experience, a master s degree in Integrated Marketing Communications, and holds an Illinois real estate license. Aimee s five-person team of design and communications professionals will ensure that professional quality materials are designed and appropriately distributed. CLMG is familiar with the Offering Memorandum that Aimee s team prepared for the Dundee/Skokie property and would be producing another document of that caliber for the River East project. Also supporting the team will be Michelle Tenuta, Vice President of Research and Analytics. Michelle brings 13 years of real estate experience primarily related to comprehensive financial modeling and in-depth market research. Re-Use Redevelopment Experience The Colliers team has the most current knowledge of mixed-use, retail and multi-family activity in the area. The team also sold the following in-city redevelopment properties: Michael Reese Hospital Site 2929 S. Ellis Avenue, Chicago, IL Solo Cup 3333 East 87 th Street, Chicago, IL Michael Reese Hospital 30 acres New City YMCA 8 acres Kendall College 165,000-square-foot building 564 Randolph Street 100,000-square-foot building 319 East Illinois Street.8 acres 1300 N. Dearborn Parkway 65,000-square-foot, 100-unit building P. 2 COLLIERS CHICAGO

7 The team has a municipal/public service background and a unique relationship with the City of Chicago. The numerous transactions team members have completed in Chicago, and more importantly in this ward, enables us to have insight into the way the city works. HIGHEST AND BEST USE After careful review of market dynamics, zoning, and redevelopment costs, it is the opinion of the team that the River East Plaza would be best served with a conversion of floors 2-6 to multi-family use. With the rental market at its strongest in years, now may be the time to capitalize on this opportunity. The property has outstanding proximity to residential density and daytime population. Any marketing efforts would be focused on embracing the asset s position in the niche marketplace while building upon the success of Fox & Obel at the SEC of Illinois and McClurg Court. The office market is much less vibrant, particularly in this submarket. With nearly 300,000 square feet to fill and no synergy from nearby office buildings, we are much less confident that the highest and best use of this property is office development. OPINION OF VALUE Based on the comparable transactions, developer proformas and the current market conditions we believe appropriate market values for the respective uses could be in the range of $25 to $30 million. Please see the Broker Opinion of Value section in this proposal for detailed information on our assumptions, comparable data, and how we arrived at the property value conclusion below. ASKING PRICE We recommend not setting an asking price, but rather giving prospects a $35 million reference point. MARKETING PLAN Our intensive marketing plan will be focused on creating high-end marketing materials and reaching a highly qualified national investor list through third-party sources such as Real Capital Markets and our own proprietary databases. Our primary targets include mixed-use, multi-family, and retailer developers in addition to lifestyle retail users. There are a large number of qualified developers currently in the market for loft rental conversions. Marketing to the brokerage community is also critical, most specifically to retail and multifamily brokers. We currently have an up-to-date list ready to go that targets approximately 75 retail and multi-family professionals. Our call for offers would occur 60 days following the completion of our offering materials. A short list would be created for best and final negotiations, and hard earnest money would be requested at the completion of due diligence. P. 3 COLLIERS CHICAGO

8 MARKETING TIMELINE We anticipate a comprehensive marketing timeline of approximately 90 days from engagement to closing. AGENCY AGREEMENT Colliers recommends a six month term for the agency agreement. The commission would be 2% of the first $20 million sale proceeds, and 3.5% of amounts above $20 million. Outside brokers would be compensated by their client. CONCLUSION We sincerely appreciate the opportunity to work with CLMG Corp. once again on another exciting project. The River East Plaza is a unique building in a highly visible and recognized area. We are confident that we have presented the most qualified and capable team available in the industry and look forward to the opportunity to maximize the return on this asset on your behalf. P. 4 COLLIERS CHICAGO

9 PROJECT TEAM PROJECT TEAM

10 II. PROJECT TEAM For the River East Plaza disposition project, our multi-disciplined marketing team is composed of specialists in multi-family, office, and redevelopment/re-use. Our core team of professionals will lead the disposition and sale negotiation efforts for the property. We will supplement the core team with professional services such as marketing, research, and financial analysis that are available at no charge to CLMG. CORE TEAM David Bercu will serve as CLMG s single point of contact and strategic advisor for the project. David has spent his entire 25-year career with Colliers International and his consummated transactions in excess of $3 billion in all product types. David also serves on the Board of Directors of Colliers USA which provides greater assurance that all of Colliers global resources are available to CLMG. Having spent the past year working with the CLMG team on its Dundee / Skokie land sale project, David has already forged a positive relationship with the CLMG team and brings to this project a valuable understanding of the Michael Reese Hospital Site 2929 S. Ellis Avenue, Chicago team s goals and the way it prefers to collaborate. Vernon F. Schultz has been involved in commercial real estate in the Chicago area for more than 30 years. Since joining Colliers International in 1997 he has completed more than 1,000 transactions with a total value exceeding $2 billion. Vern and partner Michael L. Senner have unmatched expertise with in-city and redevelopment / reuse projects, including the $54 million sale of an 8.2-acre land site owned by YMCA of Metropolitan Chicago. Vern and Mike also played a critical role in the Kendall College redevelopment project and the sale of the Michael Reese Hospital site on Chicago s lake front. Vern and Mike are currently working on the sale of the ninestory retail/parking facility at Washington and Franklin Avenue in Chicago, IL. The Colliers team expects six purchase offers and serious candidates include Interpark, Green Court, Next Realty, Artemis Capital and WP Carey Co. The property is expected to be under contract to an investor group the first week in May. Brian T. Pohl leads Colliers International Chicago s multi-family investment services group. With more than 16 years of experience, Brian has sold more than $1.1 billion of real estate assets for a variety of owner types. He successfully sold the 1,056-unit McClurg Court Apartment complex which is nearly adjacent to the River East Plaza. Brian also completed the $65 million sale of a 400-unit vintage high-rise property at 1400 N. Lake Shore Drive in Chicago. McClurg Court Apartments Chicago, IL P. 5 COLLIERS CHICAGO

11 Santa Fe Building 224 S. Michigan Ave. Legal / Zoning Brian P. Nagle leads Colliers International Chicago s office investment services group. He focuses on the sale of properties throughout the Chicago metropolitan area and the other Midwest markets. Brian has over 30 years of capital markets expertise and has sold assets valued at more than $20 billion. Brian is supported by partner Jerrod Wigal, senior associate. Brian and Jerrod have sold 37 Chicago CBD offices properties including the Santa Fe Building at 224 South Michigan Avenue and 564 West Randolph, which was a 100% vacant loft office sale. Additionally, the core team has already spoken about the project with Ted Novak of DLA Piper, one of the city s most respected zoning attorneys, and as a result of that discussion the team has numerous insights to share with CLMG concerning the zoning of the property. SUPPORTING TEAM Marketing Additional in-house support will be provided by Aimee Course, vice president of marketing and communications. Aimee has 16 years of real estate marketing experience, a master s degree in Integrated Marketing Communications, and holds an Illinois real estate license. Aimee s five-person team of marketers will ensure that professional quality materials are designed and appropriately distributed. Research and Analytics Also supporting the team will be Michelle Tenuta, Vice President of Research and Analytics. Michelle brings 13 years of real estate experience primarily related to comprehensive financial modeling and in-depth market research. P. 6 COLLIERS CHICAGO

12 PROJECT TEAM RELEVANT EXPERIENCE COMPLETED MIXED-USE REDEVELOPMENT TRANSACTIONS ADDRESS TYPE FORMER CURRENT ZONING 700 N. Kingsbury Street 300,000 SF Building Headquarters Residential Clinton & Halsted Street 5 acre land site Railroad yard Residential 900 N. North Branch Street 164,000 SF Res. and Dev. Educational 1224 W. Van Buren Street 200,000 SF Building Office Residential W. Jackson Boulevard 282,000 SF Building Headquarters Retail / Residential KENDALL COLLEGE 900 N. Northbranch Street Chicago, IL 1224 W. VAN BUREN STREET Chicago, IL P. 7 COLLIERS CHICAGO

13 Colliers International achieved a record sale price for 8.2-acre land site owned by the YMCA of Metropolitan Chicago. SUCCESS STORY YMCA OF METROPOLITAN CHICAGO ADDRESS 1515 N. Halsted Street Chicago, IL TEAM Vernon F. Schultz, SIOR Michael Senner, SIOR STATISTICS 8.2 Acres SERVICES PROVIDED Seller Representation CHALLENGE The YMCA of Metropolitan Chicago engaged the Colliers project team to market the largest remaining residential/retail landsite on the Near North side of Chicago N. Halsted Street consisted of a 50,000-square-foot building on an 8.2-acre landsite. The YMCA site is located in the heart of one of the most desirable retail and residential communities which currently attracts consumers from Lincoln Park and Gold Coast neighborhoods. It includes more than 1,800 feet of frontage on Halsted Street and Clybourn Avenue. The site housed baseball diamonds (Cubs Care Park) and 50,000-square-foot building which was utilized as a recreation and daycare center. The YMCA would have to relocate Cubs Care Park and the existing day care operation. In addition, the City of Chicago wanted to re-open the vacated Ogden Avenue and provide affordable and CHA replacement housing. The zoning (PD-182) permitted only the existing recreational use of the property with no residential and retail applications. The appraised value of the site was just under $36 million. STRATEGY The project team utilized their existing relationship with the City of Chicago s Planning and Development committee to deliver a plan that addressed their concerns while working concurrently with potential developers. SERVICES The Colliers team launched a detailed marketing campaign for YMCA. RESULTS The project team secured 12 offers from residential and retail developers while successfully campaigning for a zoning change. The team was able to address all of the concerns of the city and move the project forward. A joint venture between Chicago, ILbased Structured Development, LLC and Wilton, CT-based Commonfund Realty, Inc. purchased the property for $54 million, $18 million above its appraised value.

14 SUCCESS STORy McCLURG COURT CENTER 333 East Ontario Street Chicago, Illinois STATISTICS 1,058 units 525 days on the market $125,000,000 sale price CHALLENGE McClurg Court Center is a 1,058-unit, 1.1 million square foot, twin-tower, high-rise apartment tower located in Chicago s East Side/Streeterville submarket. In 2004, the asset was offered subject to a ground lease, with 62 years remaining on its term. Obsolete retail space, approximately 130,000 square feet, is located on street level and below-grade, including a shuttered movie theater. Current positioning of this asset, along with a lack of capital improvements and significant deferred maintenance in recent years, led to ownership s inability to realize material rent growth experienced in other nearby apartment communities of a similar vintage, in the same submarket. RESULTS The marketing campaign yielded fifteen qualified offers from reputable, institutional investors. Bid process, auction environment, and best-and-final bidding round strategies were successful in extending offers and adjusting terms beyond their original marks. McClurg Court was awarded to a cash buyer, who was able to use a large capital expenditure installation of a sprinkler system to add value to this acquisition; the buyer was the investment advisor to the Chicagoland Pipefitters Union. STRATEGy National, institutional investors were the primary targets in the onset of marketing this asset. In addition to a capital improvement/upgrade program designed to capture the upside in increased rents in this submarket, a valueadd component identified by the disposition team was a capital retrofit and alternative use of the existing, obsolete retail space.

15 Success Story 1400 Lake Shore Drive 1400 Lake Shore Drive Chicago, IL STATISTICS 400 units 631 days on the market $62,500,000 sale price CHALLENGE Built in 1928, this 400-unit, vintage high-rise apartment property is located in Chicago s affluent Gold Coast neighborhood on Lake Michigan. Previously sold in 1992, the current owners, a group of private investors, maintained the property with minimal capital improvements. There was significant deferred maintenance at the time of sale. STRATEGy Marketing Property contained a historical facade designation and a historical lobby preservation requirement. Scouted investors with interests in these historical designations and with a willingness to take the risk associated with a capital intensive retrofit. Built marketing and due-diligence materials around outlining the historical façade and retrofit requirements. RESULTS Obtained 15 qualified bidders which included apartment investors/operators, hotel operators, and condominium converters. Secured significant, non-refundable, earnest money within a 30-day due-diligence. Provided counseling to the client and buyer pool on existing financing and securing new debt sources. Final sale closed in January 2006 with a final selling price of $65 million.

16 Success Story Three Arts Club of Chicago 1300 North Dearborn Parkway Chicago, Illinois STATISTICS 100 units 117 days on the market $13,000,000 sale price challenge Built in 1914, the Three Arts Club is a four-story, 65,000 square foot building, located at the northwest corner of Division Parkway and Goethe Street, in Chicago s affluent Gold Coast submarket. The building is historically significant and is on the National Register of Historic Places and a City of Chicago Landmark. The asset was sold by the current disposition team, to current ownership, in In 2009, we were once again engaged to sell this asset, on behalf of current ownership, in conjunction with their lender, PNC Bank. STRATEGy Initially valued and positioned for sale as a boutique hotel, a conversion to condominiums, or a senior/assisted living use, proposals called for an adaptive re-use geared toward a user opportunity, specifically for a school. The wide-range of this asset s potential end-uses necessitated taking this property to market on an un-priced basis. The marketing campaign focused on the key investment highlights of Federal, State, and Local (County) tax credits and property tax abatements, due to this asset s historical significance. RESULTS Worked closely and coordinated with the Alderman and several neighborhood organizations, due to sensitivities related to this property s end use. Fielded several qualified offers from a diverse group of investors and users, as well as from area preservation boards, due to Three Arts status as a significantly historic asset. Upon our recommendation to PNC Bank, the existing lender, to accept an offer from a local investor to redevelop Three Arts into a supportive living community, the original borrower, armed with fresh equity, matched that offer, and closed the deal in fourteen days, exceeding all expectations.

17 The Colliers team represented HBE Corporation and Fordham Co. in the $29 million sale of 319 East Illinois Street to Hanover Companies. SUCCESS STORY 319 EAST ILLINOIS STREET, CHICAGO, IL ADDRESS 319 East Illinois Street Chicago, IL (currently known as 465 North Park Drive) TEAM Brian T. Pohl STATISTICS 34,412 SF of land area 500,000 SF of FAR SERVICES PROVIDED Owner Representation Marketing Services CHALLENGE The Project Team was selected to represent HBE Corporate and Fordham Co. in the sale of 319 East Illinois Street. The subject property has 34,412 SF of land area with 500,000 SF of negotiable allowable building area. SERVICES The Project Team represented the sellers, HBE Corporation and Fordham Co. in the $29 million investment sale. RESULTS This sale comprised the northern (approximate one-third) portion of a larger 102,800-square-foot site, which was sold simultaneously and part of the same transaction. The negotiable allowable building area at the time of sale was 500,000 SF (excluding any allowable bonus FAR). The PUD was in place at the time of sale, but encompassed the larger 102,800 square foot site (a total of 2,000,000 SF of FAR), inclusive of all bonus FAR. This included a maximum of 800 hotel rooms, 400 dwelling units and 75,000 SF of retail and parking. However, the Hanover Companies sale only included 500,000 SF of allowable FAR. The site was purchased to construct a 48- story building, consisting of 300 apartment units with average unit sizes of 1,400 SF and included decked parking. As of December 2009, the site is still vacant, and no development plans are expected in the near term

18 The Colliers team represented Catellus Development in the $53 million sale of The Santa Fe Building to Hamilton Partners / University of Notre Dame. SUCCESS STORY THE SANTA FE BUILDING ADDRESS 224 South Michigan Ave. Chicago, IL STATISTICS 385,904 SF SERVICES PROVIDED Owner Representation Marketing Services CHALLENGE Colliers International was selected to represent Catellus Development in the sale of The Santa Fe Building, a 385,904 SF office building located at 224 South Michigan Avenue in Chicago, IL. The building was 74% leased and listed on the National Register of Historical Places. The asset is a well-known Chicago landmark located along Michigan Avenue adjacent to Millennium Park, the building, which houses the Chicago Architecture Foundation, is the initial stop on most of Chicago s architectural tours. SERVICES The Colliers team represented the seller, Catellus Development in the $53 million sale. RESULTS The building was sold in January 2006 to a joint venture of a local developer and the University of Notre Dame for $53 million ($137.00/SF). The intention was to eventually house university offices and executive MBA facilities. STRATEGY The sale was positioned as the finest vintage property along Michigan Avenue, offering premium views, historical significance, and abundant natural light.

19 GENERAL AREA AND PROPERTY OBSERVATIONS GENERAL AREA AND PROPERTY OBSERVATIONS

20 III. GENERAL AREA AND PROPERTY OBSERVATIONS River East Plaza is surrounded by a diverse mix of property types and space usage. Residential space dominates the immediate neighborhood yet the property feeds to/from the edges of the North Michigan Avenue Office Submarket and the River North / Gold Coast Old Town Retail Submarkets. The Northwestern Hospital campus is located several blocks directly north of River East Plaza. STREETERVILLE RETAIL TRADE AREA OVERVIEW Streeterville is considered one of Chicago s most successful residential neighborhoods. The trade area is drawn from the Chicago River northbound to Oak Street, east to Lake Michigan and west to Michigan Avenue. There is a high quality of life given the balanced mix of high end residential condominiums, luxury hotels, fine dining, art galleries, and shopping. According to CoStar data, the Streeterville area consists of 43 buildings totaling 2,369,670 square feet of retail. The trade area is healthy with a net absorption rate of 97% and quoted lease rates averaging $ The average base rental rate is disproportionately skewed upward due to proximity to the highly desirable North Michigan Avenue. However, the subject property is located below Michigan Avenue without connectivity and considered a separate audience commanding a substantially lower metric relative to gross occupancy. P. 8 COLLIERS CHICAGO

21 NORTH MICHIGAN AVENUE OFFICE SUBMARKET OVER VIEW River East Plaza is located in southeast corner of the North Michigan Avenue Submarket of the Chicago central business district ( CBD ). This submarket s borders include Division Street (North), State Street (West), Lake Michigan (East), and the Chicago River (South). The submarket is home to predominately smaller tenants, which are the first to feel the effects of a down market and the first to be forced out of business. On the flip side, most of the activity in Northwestern Memorial Hospital this submarket is generated by the medical industry which has seen growth with the expansion of the Northwestern Medical campus, and the relocation of the neighborhood by Children s Memorial. In additional to Northwestern Hospital, Children s Memorial, and related entities, these two institutions attract many smaller medical tenants. Interestingly enough, there are a substantial amount of landlords in this submarket that do not want medical space users, creating a much tighter pool of viable options for these tenants. In addition, the North Michigan Avenue submarket is home to retailers, hotels, restaurants, entertainment venues, advertising and marketing agencies. Vacancy The overall vacancy rate for North Michigan Avenue increased slightly during the first quarter to 17.0 percent, up from 16.4 percent in the prior quarter. The current vacancy rate in the North Michigan Avenue submarket resides well above the 14.9 percent rate posted one year ago in the first quarter of Class A vacancy increased to 19.5 percent, up from 18.3 percent in the prior quarter while Class B vacancy fell slightly to 13.8 percent, down from 14.0 percent. P. 9 COLLIERS CHICAGO

22 BROKER OPINION OF VALUE BROKER OPINION OF VALUE

23 IV. BROKER OPINION OF VALUE OBJECTIVE This broker opinion of value ( BOV ) is an assessment of the market value and the most probable price, which the Property should bring in a competitive and open market under all conditions requisite to a fair sale given: The economic characteristics of the Property The prevailing trends in the marketplace at the time the BOV is performed The buyer and seller are acting prudently and knowledgeably The price is not affected by undue stimulus This BOV is based on the following: The sale of the Property to end user(s), investor(s) and speculator(s) Allowing contract purchaser(s) sale contingency for plan approval by the City of Chicago. METHODOGY The BOV reflects consideration of the following factors: Qualitative assessment of the location and site Market area demographic profile Current, relevant comparable transactions General local and global economic market conditions Developer proforma analysis ASSUMPTIONS The purchaser will acquire an unencumbered fee simple interest in the Property, free of any liens, easements, or encroachments that would otherwise impede or impair the value of the Property. There are no additional economic impacts, environmental impacts, adverse soil conditions nor above standard development costs, fees, hazards, or any other conditions, which would otherwise impede development or impair the value of the Property. These assumptions are deemed to be a critical part of this assessment, and as such may warrant additional investigation to confirm their accuracy. P. 10 COLLIERS CHICAGO

24 QUALIFICATIONS AND LIMITATIONS The Colliers International Chicago team prepared this BOV, which is based on information sources deemed to be reliable. However, Colliers International does not warrant the accuracy of such information. In addition, this assessment is subject to change based upon market conditions. This BOV is not provided in connection with any other related transaction and is not a MAI appraisal of the Property. Further, this BOV is based upon information provided to us by CLMG Corp., CoStar comparable information (as well as public sources) in addition to our on site inspection of the Property. SUBJECT PROPERTY P. 11 COLLIERS CHICAGO

25 PROPERTY ASSESSMENT Overview The Property is a highly desirable loft office /retail development opportunity located adjacent to Chicago s exclusive Streeterville at the southwest corner of Illinois and Lake Shore Drive, bounded on the south by the Odgen Slip. The property features approximately 470,000 square feet of office/retail space. The building is currently 30% leased with excellent renovated spaces in both retail and office areas. Overall, the site has many redeeming qualities. Based on easy access to quality employment, transportation, shopping and recreational opportunities and a superior marketing window, we view the site location to be excellent in quality. The immediate area is rich with numerous regional shopping, recreational and educational opportunities. In general, the predominant uses in the area are a mix of multi-story office, retail and restaurants, which are surrounded by entertainment and residential with Lake Michigan access. Location Access and visibility to the site are two of the most positive features of the Property given its frontage on The Odgen Slip and its immediate proximity to Lake Shore Drive. The Property s proximity to major office buildings and transportation is excellent. Access to the interstate system via Lake Shore Drive is less than miles minutes to the south. Navy Pier, Illinois most attended attraction, is immediately east. P. 12 COLLIERS CHICAGO

26 Zoning The Property is currently zoned PD368. The building has been designated orange by the City, meaning any use changes allow the City of Chicago 90 days to determine if the building should receive landmark status. In advance of preparing this BOV, the marketing team met with DLA Piper, one of the City s more respected zoning attorneys and learned the following: Office, retail/commercial and apartments are an acceptable use. Senior housing is probably not acceptable, but the financing climate for this type of project is not viable at this time. Based on visual review of the property, it appears that the building can be easily converted to loft rental. Adjoining Land Uses The property is surrounded by a variety of uses. A summary of the land adjacencies and their possible impact on value is summarized below: PARCEL ADJACENCY CURRENT USE POTENTIAL IMPACT North Office/Residential Neutral East Navy Pier Positive South Ogden Slip Hotel Positive West Retail, Multi-story residential Neutral Schools Although families with children are not the primary target market for a residential use on the Property, the potential future residential product types can and do serve as a lower cost substitute for some families. Elementary and public schools are accessible via public transportation and private school areas are a short drive. Market Area Demographic Profile The demographics profile for the Property within 1, 3, and 5 mile radii are above standard and indicate better retail and residential market sales performance. 1 MILE 3 MILES 5 MILES Residential Population 56, , ,848 Households 36, , ,368 Average Household Income $112,390 $99,700 $84,177 Household Income above $100, % 8.11% 7.50% P. 13 COLLIERS CHICAGO

27 MULTI-FAMILY USE There has been a recent resurgence of Chicago multi-family investment sales volume to pre-recession levels. Minimal apartment deliveries over the past few years coupled with strong demographics-based tenant demand for conveniently located efficient apartment units led to decreasing vacancies and soaring rents. As financing options from government-sponsored entities to banks and insurers began to reappear, all the other pieces of the puzzle fell into place and the perfect environment for apartment investors emerged. Investors sidelined over the past few years took advantage of available debt at rock bottom rates, driving capitalization rates down and per-door prices to record breaking heights. EnV Tower sold early in 2012 for a $482,73 per unit. Towers with larger retail spaces like the Grand Plaza in River North sold for $546,000 per unit in 2007, but when removing the value of the retail, EnV may materialize as Chicago s most expensive apartment sale ever. EnV Tower Multi-family investment is arguably the least volatile of the investment types. Technology is constantly changing how people shop, ship, and work, but it has little effect on apartment demand. Short-term leases allow apartment investors to quickly adjust to changes in the market unlike any other asset type creating higher income-oriented returns while decreasing volatility. These factors have allowed the Chicago-area apartment market to rebound as quickly as it has. Apartments will continue to be in high demand in the near future. Owners of Class A assets can hold and ride the rent growth up or sell and take advantage of the frothy sales market. Class B and C owners can hold and enjoy the rent growth, implement an in-house value add program in an attempt to bring their assets into the A-, B+ range, or sell now to any of the growing number of value-add buyers looking to get into the mix. Regardless of the apartment investor s strategy, one constant remains - apartments are a very safe real estate investment and will be through P. 14 COLLIERS CHICAGO

28 Recent Multi-Family Investment Sale Comparables Downtown Chicago DATE PROPERTY UNITS May 2011 One Superior Place TOTAL PRICE ($) PRICE PER UNIT ($) BUYER / SELLER ,000, ,550 Hartz Mountain Industries / Brookfield Asset Management JV BLDG Managements; Robert K Futterman & Associates Oct 2011 Regents Park 1, ,000, ,219 Antheus Capital LLC / Crescent Heights Jan 2012 EnV Tower ,200, ,731 MetLife / Lynd Corporate Jan 2011 Sono East ,000, ,938 Prudential / Smithfield Properties Ltd JV Gordon Segal JV Stanley Nitzberg Dec 2011 Cityfront Place ,000, ,917 RREEF Funds / Crescent Heights Apartments October 2011 Oakwood Chicago ,000, ,053 L&B Realty Advisors / Tishman Speyer JV Lehman Brothers Holdings Inc JV Bank of America Dec 2011 Flair Tower ,000, ,394 General Investment & Development / CalPERS JV McCaffery Interests March 2011 Dec 2011 Roosevelt Collection (Apartment) 1212 On South Michigan ,383, ,344 McCaffery Interests JV Canyon Capital Realty Advisors / Centrum Properties JV Angelo Gordon ,950, ,808 Crescent Heights from Urban Realty Partners JV Davis Group Jun 2011 River North ,300, ,759 LaSalle Investment Mgmt / John Buck Co JV Royal Properties Kimpton Hotels & Restaurants July 2011 June 2011 Parkway Gardens Reside on Barry ,800,000 55,908 Related Companies JV Wells Fargo / Chicago Title Land Trust Company ,250, ,247 Newcastle Ltd. / Revere Corporation April 2011 Dec 2011 Mondial River West (Bulk Condo) Flamingo on the Lake ,600, ,839 Waterton Residential / Citta Development Group by Melvin M Kaplan Realty Inc ,100, ,359 TLC Management Co from IRMCO Properties & Management January 2011 Southgate ,000,000 47,170 Citibank FSB / GLC Development Partners LLC June 2011 Belmont Harbor 99 10,550, ,566 Newcastle Ltd / PNC Bank AKA National City Bank P. 15 COLLIERS CHICAGO

29 DATE PROPERTY UNITS May 2011 Dec 2011 Dec 2011 Lakeview Sheridan Versailles Apartments fmr Pullman Wheelworks TOTAL PRICE ($) PRICE PER UNIT ($) BUYER / SELLER ,500,000 61,765 Horizon Realty Group / Chandler Property Management 196 9,000,000 45,918 TLC Management Co from IRMCO Properties & Management 210 8,200,000 39,048 Mercy Housing National Housing Trust from Security Properties Inc Aug 2011 Rogers Park 101 6,700,000 66,337 Rockwell Group by Essex Realty Group from PNC Bank Apr 2011 January 2011 June 2011 March N Sheridan Rd Lakeview Sheridan Silver Tower (Bulk Condo) The Commodore 124 6,000,000 48,387 Loyola University at Chicago from PNC Bank 170 Chandler Property Management / Fremont Sheridan Properties 76 Davis Companies / Metropolitan Real Estate Co. 145 North Community Bank / Robert Kroupa Mar 2011 Beacon 252 North Community Bank / Robert Kroupa Feb 2011 Belmont Harbor 99 PNC Bank AKA National City Bank / Trust # Pending Sovereign 283 Loyola University Chicago / IRMCO Properties & Management Sept 2011 Wilson Tower 153 Estate Properties from Wilthrop Equity LLC Flair Tower P. 16 COLLIERS CHICAGO

30 STREETERVILLE RENT ANALYSIS CLMG Corp. McClurg Court 333 E Ontario Onterie Center 446 E Ontario N Harbor Tower Lake Shore Plaza The Streeter 175 N Harbor 445 E Ohio 345 E Ohio Cityfront Place 480 N McClurg Streeter Place 355 E Ohio # of Units Year Built / Renovated Studio Effective Rent $1,314 $1,360 $1,330 $1,177 $1,600 $1,513 $1,640 $1,440 Sq Ft Rent PSF $2.43 $2.85 $2.80 $1.99 $2.73 $2.88 $2.66 $2.48 Convertible Effective Rent $1,493 $1,498 $1,443 $1,303 $1,956 $2,317 $1,525 Sq Ft Rent PSF $3.00 $2.74 $2.77 $2.00 $2.75 $3.27 $2.32 One Bedroom Effective Rent $1,640 $2,049 $1,698 $1,436 $2,190 $1,838 $2,307 $1,853 Sq Ft Rent PSF $2.04 $2.10 $2.14 $1.99 $2.74 $2.29 $2.57 $2.27 Two Bedroom Effective Rent $2,580 $2,750 $2,579 $2,060 $3,203 $2,626 $3,865 $2,511 Sq Ft Rent PSF $2.08 $2.01 $1.95 $2.17 $2.43 $2.33 $3.15 $1.99 Three Bedroom Effective Rent $4,368 $3,395 $4,725 $5,615 $3,458 Sq Ft Rent PSF $2.21 $1.90 $2.61 $3.12 $2.17 Community Amenities Fitness Center yes yes yes yes yes yes yes yes Swimming Pool yes yes yes yes yes yes yes yes Business Center yes yes yes yes yes yes yes yes Parking yes yes yes yes yes yes yes yes Lounge yes yes yes yes yes yes yes yes Apartment Features Ceilings 8' 8' 8' 8' 8'6" 8' 8'6" 8' Storage yes yes yes yes yes yes yes yes Washer/Dryer in Apartment no select select no yes no yes select Patio/Balcony no no no no select select select no 420 E Ohio P. 17 COLLIERS CHICAGO

31 Streeterville Rent Analysis cont d Class A apartment rents ranged between $2.27 and $2.70 per square foot, which represents about an 8.0 percent increase from levels witnessed in AVERAGES Studio Avg Effective Rent $1,422 Avg Square Footage 549 Avg Rent PSF $2.60 Convertible Avg Effective Rent $1,648 Avg Square Footage 613 Avg Rent PSF $2.70 One Bedroom Avg Effective Rent $1,876 Avg Square Footage 826 Avg Rent PSF $2.27 Two Bedroom Avg Effective Rent $2,772 Avg Square Footage 1227 Avg Rent PSF $2.26 Three Bedroom Avg Effective Rent $4,312 Avg Square Footage 1794 Avg Rent PSF $2.40 Multi-Family Use Valuation The analysis anticipates between 100,000 SF 150,000 SF retail use. The analysis assumes that a grocery store anchor will remain to attract other users. The redevelopment hard costs for the residential building will be approximately $100/SF while the development hard costs for the retail will be $75.00/SF toward shell and core, build-out and fees. This is a market assumption that is developer specific. Developers with lower cost of capital and lower return requirements with may potentially push the value higher. P. 18 COLLIERS CHICAGO

32 Multi-Family Use Valuation APARTMENT REDEVELOPMENT ASSUMPTIONS Floor Area: 70,000 Residential Loss Factor: 14% Net Floor Area: 60,000 Average Unit Size: 900 Number of Residential Floors: 5 Total Apartment Units: 333 Stabilized Net Operating Income: $3,655,937 Total Building Area and Costs Total Building Area: 450,000 Retail Area: 150,000 Residential Area: 300,000 Renovation Cost PSF: $ Estimated Total Renovation Cost: $30,000,000 BUDGET SUMMARY Income Apartment Rental Income Total Residential SF: 300,000 Average Rental Rate PSF: $2.40 Annual Gross Income: $8,640,000 Expense Cost Ratio: 45% NOI: $3,888,000 Income Retail Rental Income Total Retail Area: 150,000 Estimated Net Rent PSF: $7.00 NOI: $1,050,000 Costs Acquisition: $32,891,400 Renovation Cost: $30,000,000 Developer Profit: $12,441,600 Projected Cost: $75,333,000 Valuation Summary Stabilized Residential Value: $62,208,000 Cap Rate: 6.25% Stabilized Retail Value: $13,125,000 Cap Rate: 8% PROJECTED INCOME: $75,333,000 P. 19 COLLIERS CHICAGO

33 Multi-Family Use Five-Year Cash Flow MULTI-FAMILY Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 NOI: $3,888,000 $4,004,640 $4,124,779 $4,248,523 $4,375,978 $4,507,258 Cap Rates 6.00% $64,800,000 $66,744,000 $68,746,320 $70,808,710 $72,932,971 $75,120, % $62,208,000 $64,074,240 $65,996,467 $67,976,361 $70,015,652 $72,116, % $59,815,385 $61,609,846 $63,458,142 $65,361,886 $67,322,742 $69,342,425 RETAIL Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 NOI: $1,050,000 $1,081,500 $1,113,945 $1,147,363 $1,181,784 $1,217,238 Cap Rates 7.75% $50,167,742 $51,672,774 $53,222,957 $54,819,646 $56,464,236 $58,158, % $48,600,000 $50,058,000 $51,559,740 $53,106,532 $54,699,728 $56,340, % $47,127,273 $48,541,091 $49,997,324 $51,497,243 $53,042,161 $54,633,425 P. 20 COLLIERS CHICAGO

34 ADAPTIVE RE-USE Sale Comparables ADDRESS SIZE (SF) DESCRIPTION SALE PRICE COMMENTS 700 N. Kingsbury 300,000 SF 5 building connected complex, 2 off building sites Clinton / Halsted 5 acre landsite Vacant land. Zoned for 1700 units $12,600,000 Former manufacturing site for Stiffel Lamp. Now loft condos $32,000,000 Owned by Chicago- Milwaukee Rail Road. Wide range of marketing produced several offers from national companies. Sold to a conglomerate of Chicago developers who parceled out at closing. 900 N. North Branch 165,000 SF Multistory building $8,500,000 Former Sara Lee Test Labs and administrative offices. Sold to Kendall College. Required pay off of TIF to Sara Lee and defeasance charge to landlord totaling $1,900, Van Buren 200,000 SF Multistory loft office $13,000,000 Sold for 1st Bank of Illinois. Uncompleted loft office, worked through liens. Sold for residential condos W. Jackson 282,000 SF Multistory building $12,200,000 Former Fannie May Candy manufacturing plant and corporate office. Sold to developer who sold to Target through foreclosure by Blackstone Equities S. Ellis 37 Acres Multistory, multibuilding $92,000,000 Former Michael Reese Hospital site. Developed several offers from residential developers, city forced to buy it at a premium to demonstrate ability to house athletics for Olympics P. 21 COLLIERS CHICAGO

35 OFFICE USE Office Sales Comparables BUILDING AGE FLOORS CLASS DATE SOLD SALE PRICE/SF SF CAP RATE LEASED BUYER SELLER Wrigley Building N. Michigan B 9/30/2011 $33,000,000 $ ,000 N/A (Vacancy) 60% Zeller Realty / Lefkofsky / Byron Trott William Wrigley & Co COMMENTS: Historic, landmark asset located in A+ location (Michigan Ave. and Chicago River). Wrigley plans to vacate the obsolete office building and consolidate to Goose Island location. Zeller, in concert with Groupon founders Lefkofsky and Keywell, plan a monumental renovation of the office portion and expansion of retail space along Michigan Avenue. The sale also included a 1.5-acre development site at 443 N. Wabash/422 N. Rush. Wrigley Building 200 N. Michigan C 7/30/11 $7,500,000 $ ,500 N/A 79% Becker Ventures / TJBC Lutz RE Investments COMMENTS: New joint venture between Becker Ventures and The John Buck Company to redevelop the site into retail, residential and parking as well as a boutique hotel. 205 W. Randolph C 6/15/11 $13,000,000 $ , % 79% Farbman Group Joseph Messer / Thomas Stilp COMMENTS: Vintage Loop asset. The property s largest tenant, Kaplan Education, leases 23,197 RSF through June The balance of the tenancy averages ~2,000-3,000 RSF per tenant under short-term leases. The previous owners purchased the building in 2005 for $20.6 million ($104/SF). 65 E. Wacker Place B 12/30/10 $13,700,000 $ , % 88% Wilton U.S. Commercial PrivateBank & Trust COMMENTS: Lender sale of a vintage, East Loop Art Deco building. Privatebank foreclosed in Oct on a $21.8 million note. The building caters primarily to smaller tenants, however there is strong retail income from Morton s Steakhouse on the ground floor. 79 W. Monroe C 12/22/10 $10,000,000 $ ,824 N/A (Vacancy) 28% Farbman Group Bank of America COMMENTS: Vintage Central Loop asset which is former headquarters of Bell Federal Savings & Loan. Ground lease in place. 203 N. Wabash C 4/15/10 $5,500,000 $ ,895 N/A 86% Urban Street Properties John Hancock Life Ins. COMMENTS: Bought to eventually convert into multi-family, however short-term plans were to continue operating for office use. 203 N. Wabash Street P. 22 COLLIERS CHICAGO

36 Office Use Valuation As discussed previously, we are of the opinion an adaptive reuse of River East Plaza generates the highest as is proceeds for Ownership. We have depicted below, a pro-forma sketch of an office use valuation based on in-place tenancy and lease-up of vacant space. A three-year hold is assumed with a sale at stabilization at capitalization rates of %. Lease-up costs and developer profit are deducted from the stabilized values to derive as-is values. The as-is values range from $ $20.7 million or $33 44 per square foot. RIVER EAST OFFICE DEVELOPMENT VALUATION Total Building Area (RSF): 474,797 Stabilized Occupancy (%): 85% Stabilized Occupancy (RSF): 403,577 Office Rent ($/SF gross): $22.00 Stabilized Rental Income: $8,878,704 Less: Stabilized Operating Expenses: $5,222,767 $11.00/SF) Stabilized Net Operating Income: $3,655,937 Stabilized Occupancy (RSF): 403,577 Less: Current Occupancy (RSF): -144,157 Total Lease-Up: 259,420 Leasing Costs ($/SF): $67.50 Leasing Costs (total): $17,510,880 RIVER EAST OFFICE DEVELOPMENT VALUATION RESIDUAL CAP RATE STABILIZED VALUE (TOTAL) (PSF) LESS: LEASING COSTS LESS: OWNER PROFIT - $10 MILLION EQUITY 25% ANNUAL RETURN "AS-IS" VALUE 8.00% $45,699,212 $96 $17,510,880 $7,500,000 $20,688,332 $ % $43,011,023 $91 $17,510,880 $7,500,000 $18,000,143 $ % $40,621,522 $86 $17,510,880 $7,500,000 $15,610,642 $33 (PSF) P. 23 COLLIERS CHICAGO

37 PROPERTY HIGHEST AND BEST USE / VALUE CONCLUSION Based on the comparable transactions, developer proformas and the current market conditions we believe appropriate market values for the respective uses could be in the range of $25 to $30 million. We will suggest guidance at $35 million. Based on the information gleaned from our Broker Opinion of Value, a review of market dynamics, and analysis of the property s viability and zoning, we recommend that the property be positioned as a multi-family conversion opportunity and that floors 2 to 6 are re-developed accordingly. The following observations support this conclusion: Very strong rental market with high rents Many multi-family investors in the market following active 2011 Loft residential rental pricing can hit a niche market Office market conditions are much less vibrant than residential market conditions 300,000 square feet of empty office space is daunting with virtually no synergy from nearby office buildings Location is much more suited for multi-family use than office use; parking is less of a concern P. 24 COLLIERS CHICAGO

38 MARKETING PROGRAM MARKETING PROGRAM

39 V. MARKETING PROGRAM THE MARKETING PROGRAM OVERVIEW Colliers International will implement the optimal disposition strategy for the Property with the goal of attracting a variety of qualified buyers to maximize value. The marketing strategy will be consistent, with an aggressive local and national but also an international marketing campaign. Our process allows us to reach all interested potential buyers thus ensuring a diverse and competitive bidding community. We will build a customized and aggressive marketing campaign that will include a combination of printed material, online exposure, and personal outreach via phone and inperson presentations. This work plan would be managed by the Colliers team in concert with Ownership. Upon award of this assignment, we will finalize this marketing system with additional research and property collateral as well Ownership s input. GOALS The essential goals toward successful disposition of the Property are to: Provide maximum exposure to the marketplace Produce qualified prospective buyers Deliver credible offers Close at the high achievable price acceptable to Ownership PROPERTY INFORMATION We will collect, inventory, organize and disseminate key property information and documents during each stage of the process: research, marketing and disposition. Complete organization of available, applicable information and documents for efficient distribution includes but is not limited to: Current zoning Roof report Mechanical systems report Attorneys letters of opinion Elevator report All government notices Commitment for Title Insurance Draft Purchase and Sale Agreement P. 25 COLLIERS CHICAGO

40 Environmental Report Floodplain Report Municipal Fee Schedule Public Improvements Agreement Real Estate Tax Bills Survey Title Report Zoning Ordinance Attorney Letter of Opinion for residential use Providing this information in advance of offer submittals allows for the most efficient due diligence process possible, mitigating transaction risks and accelerating transaction timelines. SALES METHODOLOGY Target Markets The primary target markets will include mixed use, residential and retail developers toward generating the highest value, however, speculators and investors will also be included. We will market to not only well-capitalized and well-known investors, but will also seek to identify partially leveraged investors with capital sources, both nationally and internationally. The following potential funding sources will also be targeted: Real Estate Funds Equity Joint Venture Partners Insurance Companies Pension Fund Advisors REITs (Public and Private) 1031 Exchange Prospective purchasers Marketing to the brokerage community is also critical, most specifically to retail and multi-family brokers. We currently have an up-to-date list ready to go that targets approximately 75 retail and multi-family professionals. P. 26 COLLIERS CHICAGO

41 Qualified Developer Prospects Fifield Companies Centrum Realty Magellan Companies Mesirow/Stein Enterprise Companies A&R Development John Buck Company Hines Interests MCL Retail Prospects (at $15-$18/psf gross as part of Residential Project) Starbucks Cocktail Lounge Spa/Hair Salon Art Gallery Panera Bread P. 27 COLLIERS CHICAGO

42 Reaching our Targets Internal Databases We maintain an extensive internal database of such potential purchasers which allows us to quickly and efficiently market the property. This dynamic approach introduces capable nonlocal investors and developers into the pool of bidders for this unique opportunity. Their presence, in turn, will contribute to higher pricing and a higher degree of aggressiveness among all bidders. Third-Party Resources We will also supplement our extensive internal database with a third-party online marketing and transaction management services tool called Real Capital Markets (RCM1). Since its founding in 1999, RCM1 has been the recognized leader in providing online marketing and transaction management services to the institutional real estate community with over 15,000 successful transactions and $500 billion sold. With over 300,000 market participants utilizing the framework, RCM1 has become synonymous with successful online real estate marketing institutional properties (assets with a value over $10 million) brought to market in the last year. RCM1 is the most reliable way to present professional offering materials and the most secure way to distribute and track your offering and underwriting materials online. Every day, thousands of people worldwide post, manage and retrieve documents in the secure, SAS 70 Type II Audited Virtual Deal Rooms. The RCM1 platform has the proven technology, security and reporting that deliver the solutions and results we know you require. Sealed Bids It is important that prospects be given a controlled sense of urgency in their review of the Property. We have found that sealed bid sales are effective in driving towards a date-certain sale. The competitive environment created by bidding allows us to maximize the value of this asset. To meet our suggested timeline, while not sacrificing transaction value, we recommend a hard call-for-offers program. We have used a call-for-offers strategy very successfully and investors around the United States are comfortable with the process. This strategy combines the targeted marketing and personal presentation aspects of a traditional private placement sale with the date-certain aspect of a sealed bid sale. Upon completion of the initial marketing campaign, Colliers will provide all qualified investors with an offering memorandum, and we will make a personal call and outreach requesting that bids will be due on a specific date. At that time, all interested investors will submit their offers specific to price, due diligence and timing of close. This technique is extremely flexible and gives you the ability to manage the market in a way that ensures a timely closing. P. 28 COLLIERS CHICAGO

43 MARKETING TIMELINE It is our goal to fully understand the opportunity, maintain your trust through this project from beginning to closing. The key to efficient management of this scope of services is both a comprehensive work plan and a communications plan. We will present Ownership with a detailed work plan to complete the scope of services. The communications plan will include regularly scheduled conference calls or meetings and standardized marketing updates from the Colliers team to Ownership. To implement these services, we propose the following draft work plan and timeline: PRE-MARKETING: WEEKS 1 2 Multi-disciplined team approach resulting in a seamless, efficient message Begin courtesy phone calls to a pre-selected list of top prospects Establish marketing and solicitation work plans Prepare first-class, stylized executive summary and offering package Prepare marketing materials MARKETING: WEEKS 2 3 Preliminary Investor Review / Maximize Market Exposure Continue courtesy phone calls and presentations to a pre-selected list of top prospects Coordinate with the Ownership and Colliers in house marketing team to manage public awareness Broadcast the E-card with offering memorandum to developers and investors on our client lists and proprietary databases through Real Capital Markets Manage consistent marketing message to prospects MARKETING: WEEKS 4 7 Create Competitive Bidding Environment Rebroadcast the E-card with offering memorandum. Qualify developers and investors Provide confidential property information through RCM1 s virtual data room to qualified developers and investors to mitigate/eliminate potential for pricing adjustments during final due diligence Schedule property inspections (as appropriate); and manage prospects in pushing the envelope on pricing of this unique asset P. 29 COLLIERS CHICAGO

44 CALL FOR OFFERS AND NEGOTIATION: WEEKS 8 10 Evaluate Offers Issue call for offers and solicit bids Risk-assess all bids and bidders Conduct best and final offer round Contract negotiation Coordinate the drafting and execution of the sale agreement DUE DILIGENCE AND CLOSING: COMMENCING WEEK 11 Achieving Premium Result Carefully supervise all due diligence activities of the purchaser Practically resolve any potential contingencies Work with Ownership to answer any purchaser questions Constructively engage runner-up finalists in order to maintain a sense of urgency, diminish the Property s closing risk and ensure an on-time close Ascertain additional requests from purchaser and seller Due Diligence/Entitlement contingencies 6 9 months (however the process could take as long as 12 months) Coordinate closing activities in conjunction with Ownership The schedule contemplates: Sufficient property information is available for prospective buyers to complete review and analysis of Property for preparations of offers Closing is not subject to any purchaser financing contingencies Ownership has all documents available necessary to close GETTING FROM CONTRACT TO CLOSING The team knows what it takes to complete a redevelopment transaction in today s environment. 1. Choose a qualified buyer who will be a cooperative partner with CLMG Corp. 2. The buyer will need to have retained zoning counsel to work with city planning and zoning. 3. Entitlements must be reviewed for alternative benefits. P. 30 COLLIERS CHICAGO

45 4. CLMG will need their broker to monitor this process. We suggest bi-weekly conference calls with CLMG, even though we are under contract. Apartment developers can close on speculation since bank financing is available and the sector is favored by consumers, lenders and institutional investors. P. 31 COLLIERS CHICAGO

46 VI. TERMS OF ENGAGEMENT FEE The commission is 2% of the first $20 million sale proceeds, and 3.5% of amounts exceeding $20 million. Any outside brokers would be compensated by their client. TERM OF AGENCY 6 Months MARKETING BUDGET It is anticipated that the team will spend approximately $10,000 including creation of the E- card/website, RCM1 and signage. Colliers will pay 100% of the marketing costs. BROKERAGE AGREEMENT It is our understanding that a brokerage agreement will be provided by CLMG Corp. P. 32 COLLIERS CHICAGO

47 APPENDIX APPENDIX

48 VII. APPENDIX P. 33 COLLIERS CHICAGO

49 A. COMPANY OVERVIEW Colliers International is a global leader in real estate services with more than 12,300 professionals operating out of more than 520 offices in 62 countries. As a subsidiary of FirstService Corporation (NASDAQ: FSRV; TSX: FSV and FSV.PR.U), Colliers offers the stability of a strong financial partner and significant local ownership providing clients with accountability and enterprising real estate solutions. Colliers provides a full range of services to real estate owners and occupiers worldwide, including corporate solutions, sales and lease brokerage, property and asset management, project management, investment sales and consulting, property valuation and appraisal, mortgage banking and market research. The Lipsey Company ranked Colliers International as the world s second-most recognized commercial real estate brand COMPANY STATISTICS Revenue: $1.8 billion* Locations: 522 offices in 62 countries Employees: 12,300 SF Under Management: 1.25 billion** Transaction Volume: 68 billion P. 34 COLLIERS CHICAGO

50 COLLIERS INTERNATIONAL CHICAGO Colliers International s rich Chicago history extends back to 1947 when Bennett & Kahnweiler was founded by Marshall Bennett and Louis Kahnweiler. In its early beginnings it was best known for the development of the 2,300-acre Centex Industrial Park in Elk Grove Village, IL, resulting in the firm s reputation as an industrial powerhouse that endured for the next several decades. To provide its clients with a more diverse set of global real estate services, the firm joined the Colliers International family in 1983 and became known as Colliers Bennett & Kahnweiler. Colliers B&K operated as a highly successful, independently owned and operated affiliate. In early-2010, Colliers International merged with FSREA, a subsidiary of publicly traded FirstService Corporation, creating the third largest global commercial real estate services brand. Later, Colliers International completed a partial acquisition of Colliers Bennett & Kahnweiler. We are now accelerating the success of our clients under one name, one brand, and one operating philosophy. Colliers Chicago is owned by 23 principals and employs more than 275 people in its two Chicago offices, including a staff of 125 property management professionals and 90 brokers. In terms of leasing volume, the firm was named the largest commercial real estate brokerage company in the Chicago area by Crain s Chicago Business in December In 2008, 2009 and 2010 the firm was named Biggest Seller in terms of square feet sold HIGHLIGHTS Completed 920 transactions with a total value of $2.0 billion Completed five of the eight largest suburban office transactions of the year, including each of the top three Added retail and multi-family investment brokerage as core service offerings Winner of the NAIOP Industrial Investment Transaction of the Year award and Industrial Transaction of the Year award Winner of the Industrial Broker of The Year award at the 23rd Annual Commercial Real Estate Awards Dinner Increased property management portfolio to more than 46 million square feet P. 35 COLLIERS CHICAGO

51 Brian T. Pohl EXECUTIVE VICE PRESIDENT Colliers Chicago CONTACT DETAILS DIR FAX Colliers International 200 S. Wacker Drive Suite 700 Chicago, IL AREA OF EXPERTISE Brian Pohl is an executive vice president and joined Colliers International to lead and develop the firm s multi-family investment services practice, comprised of three professionals. His primary focus is the acquisition, disposition and placement of real estate investments primarily in the greater Midwest region. BUSINESS AND EDUCATIONAL BACKGROUND Prior to joining Colliers, Brian led the national multi-housing practice at Grubb & Ellis in Chicago. Additionally, Brian was a director in the Chicago office of Cushman & Wakefield. Brian holds more than 16 years of real estate investment experience boasting real estate asset sales for a variety of owners totaling $1.1 billion. PROFESSIONAL ACCOMPLISHMENTS Notable transactions include: a $31.5 million sale of Eagle Ridge Apartments, a 370-unit complex in Waukegan; the $33.9 million sale of Town and Country Apartments in Urbana, IL; the sale of the 1,056-unit McClurg Court Apartments; and the $65 million sale of a 400-unit vintage high-rise property at 1400 N. Lake Shore Drive in Chicago.

52 Vernon F. Schultz SIOR EXECUTIVE VICE PRESIDENT Colliers Chicago EDUCATION AND QUALIFICATIONS Lake Forest College AFFILIATIONS AND MEMBERSHIPS SIOR CONTACT DETAILS MOB DIR FAX Colliers International 6250 N. River Rd. Suite Rosemont, IL AREA OF EXPERTISE Vern Schultz, SIOR has been involved in commercial real estate in the Chicago area for over 30 years. Since joining Colliers International in 1997 he has completed more than 1,000 transactions with a total value exceeding $2 billion. Vern and partner Michael L. Senner have unmatched expertise with in-city and redevelopment / reuse projects, including the $54 million sale of an 8.2-acre land site owned by YMCA of Metropolitan Chicago. Vern works with tenants and owners in the Chicago area. PROFESSIONAL ACCOMPLISHMENTS Finalist, Chicago Salesman of the Year (1975) Winner, Chicago Salesman of the Year (1976) Winner, Greater Chicago Food Depository Industrial Broker of the Year (2001) Winner, Commercial Forum Industrial Broker of the Year (2004) Nominee, Industrial Broker of the Year (2007) Top Producer, Colliers Industrial Group (2000, 2001, 2003, 2007, 2008) Winner, Colliers Highest Value Transaction ($68 million sale of Certified Foods facility) (2008) 3-time CoStar Power Broker Award Winner Named one of the Top 50 brokers in the United States by Real Estate Forum magazine (2008) Winner, NAIOP Industrial Transaction of the Year award (2009) Top 10% Producer, Colliers USA (2011) BUSINESS AND EDUCATIONAL BACKGROUND Vern enjoyed previous employment with Grubb & Ellis where he was awarded the firm s distinguished Senior Marketing Consultant designation within his first year and was a top 20 producer in his third year. Prior to Grubb & Ellis, Vern had been a senior vice president of Baird & Warner Company s Corporate Group, forming the division in Additionally, he served as vice president and manager of the suburban office of Cushman and Wakefield of Illinois from , and he was head of his own firm, Hartford Realty Group, for four years from

53 Vernon F. Schultz SIOR EXECUTIVE VICE PRESIDENT MIXED-USE REDEVELOPMENT/RE-USE PROJECTS ADDRESS TYPE FORMER CURRENT ZONING 700 N. Kingsbury Street 300,000 SF Building Headquarters Residential Clinton & Halsted Street 5 acre land site Railroad yard Residential 900 N. North Branch Street 164,000 SF Res. & Dev. Educational 1224 W. Van Buren Street 200,000 SF Building Office Residential W. Jackson Boulevard 282,000 SF Building Headquarters Retail / Residential

54 Michael L. Senner SIOR SENIOR VICE PRESIDENT Colliers Chicago EDUCATION AND QUALIFICATIONS BA, Miami University, Oxford, Ohio AFFILIATIONS AND MEMBERSHIPS SIOR AIRE CONTACT DETAILS MOB DIR FAX Colliers International 6250 N. River Rd. Suite Rosemont, IL, AREA OF EXPERTISE Michael Senner, SIOR, is a senior vice president with Colliers International s Industrial Advisory Group. His concentration is on the City of Chicago as well as representing the interests of corporations, institutions and entrepreneurial clients in the acquisition, disposition and development of industrial and commercial real estate around the world. In addition, Mike has extensive experience with the adaptive reuse of properties. His responsibilities have included conducting controlled auctions, qualifying developers and users and auditing the physical, political and financial components of a project. PROFESSIONAL ACCOMPLISHMENTS Colliers recognized Mike as one of the overall top production brokers in 2001, 2003, 2004, 2005, 2006, 2007, 2008 and 2009 by being named a member of the firm s Everest Club. Other accomplishments include the NAIOP 2009 Industrial Transaction of the Year for Kronos Products and Colliers award for most exclusive rights to present in BUSINESS AND EDUCATIONAL BACKGROUND Mike was previously employed at Grubb & Ellis where he was named the 1995 Rookie of the Year in recognition of his commitment to clients and his transaction volume during his first full year of employment. Mike has been involved in commercial real estate since In the last five years, he has completed transactions totaling in excess of $300,000,000. COMMUNITY INVOLVEMENT Mike is involved with The Greater Chicago Food Depository and the Lynn Sage Foundation.

55 Michael L. Senner SIOR SENIOR VICE PRESIDENT REPRESENTATIVE CLIENTS AND PROJECTS William Wrigley Jr. Company Medline Industries Sara Lee Corporation Ametek, Inc. SRAM The Chicago Public Schools ComEd Lawson Products The Salvation Army Surgical Car Affiliates Kraft Foods The YMCA of Metropolitan Chicago Premier Farnell Corporation Stuart Dean Company The Tribune Company

56 Brian P. Nagle EXECUTIVE VICE PRESIDENT Colliers Chicago EDUCATION AND QUALIFICATIONS BS, Western Illinois University AFFILIATIONS AND MEMBERSHIPS NAIOP ULI CONTACT DETAILS MOB DIR FAX Colliers International 6250 N. River Rd. Suite Rosemont, IL AREA OF EXPERTISE Brian Nagle serves as an Executive Vice President in Colliers International s Investment Services Group. He focuses on the sale of office investment properties throughout the Chicago metropolitan area and the other major Midwest markets. Brian has over 30 years of capital markets experience involving all forms of investment real estate and has successfully completed transactions with a total value of more than $20 billion. PROFESSIONAL ACCOMPLISHMENTS Greater Chicago Food Depository Investment Broker of the Year (1997, 1998) NAIOP Award for Financial Intermediary of the Year (1999, 2001 and 2005) BUSINESS AND EDUCATIONAL BACKGROUND Prior to joining Colliers, Brian spent twenty years with Cushman & Wakefield, most recently as executive director of the Capital Markets Group. He spent the previous ten years with The Balcor Company, rising to managing director responsible for investing equity capital in real estate transactions nationwide.

57 Brian P. Nagle EXECUTIVE VICE PRESIDENT REPRESENTATIVE CLIENTS AND PROJECTS Hines/General Motors Pension Walton Street Capital Hines/National Office Partners Equity Office Properties John Buck Co./McMorgan & Co. USAA Real Estate

58 Aimee Course VICE PRESIDENT OF MARKETING AND COMMUNICATIONS Colliers Chicago EDUCATION AND QUALIFICATIONS MA, Roosevelt University BA, Northern Illinois University CONTACT DETAILS MOB DIR FAX Colliers International 6250 N. River Rd. Suite Rosemont, IL AREA OF EXPERTISE Aimee has 14 years of experience in real estate marketing. Since joining Colliers International in 2004, she has been responsible for developing unique strategies to increase the firm s market share, implementing property-specific marketing campaigns, and communicating the firm s overall message to the marketplace. At Colliers Aimee led a successful new brand development campaign that resulted in a wide array of more professional marketing materials. Aimee is an accomplished writer and editor. She has provided copy for a multitude of marketing pieces including display advertisements, press releases, speeches, award nominations, new business proposals, newsletters, market reports, brochures, and websites. BUSINESS AND EDUCATIONAL BACKGROUND Prior to joining Colliers, Aimee spent two years as Director of Marketing and Communications for CB Richard Ellis Chicago region. There she directed an eight-member team of public relations and design professionals. She held the same position with Insignia/ESG prior to its merger with CBRE. Prior to Insignia/ESG, Aimee spent six years with Cushman & Wakefield, most recently as Senior Writer on the firm s national marketing team where she was focused on securing large international business. PROFESSIONAL ACCOMPLISHMENTS CB Richard Ellis Shared Services Employee of the Year (2004) CB Richard Ellis Teamwork award (2004) Cushman & Wakefield s New Business Development Professional of the Year (2000)

59 Michelle A. Tenuta VICE PRESIDENT RESEARCH & ANALYTICS Colliers Chicago EDUCATION AND QUALIFICATIONS BS, University of Illinois AFFILIATIONS AND MEMBERSHIPS Young Real Estate Professionals (YREP) University of Illinois Real Estate Alumni Forum Board Member CONTACT DETAILS DIR FAX Colliers International 200 S. Wacker Dr. Suite 700 Chicago, IL AREA OF EXPERTISE Michelle Tenuta joined Colliers International in 2005 as Senior Financial Analyst with the Corporate Office Advisors. Since she started at Colliers, Michelle has played an integral role in developing the analytical team for the Office Advisory Group. She currently serves as Vice President of the Analytics and Research Group at Colliers Chicago. Michelle brings 13 years of real estate experience primarily related to comprehensive financial modeling and in-depth market research. Michelle specializes in coordinating with team members and clients to develop comprehensive financial analysis portfolios that are highly project-specific. She consults and strategizes with clients to develop the most appropriate analytical approach to take relative to their needs. Her work often includes developing proformas to project estimated costs, utilizing a blend and extend analysis to leverage negotiations with landlords for reduced rental rates, and producing other financial models that ensure tenants achieve the lowest real estate cost structure possible. Her key achievements also include the development of a best-in-class quarterly CBD market report. Michelle has developed numerous proprietary databases containing comparable transaction data and market knowledge. She utilizes these metrics to analyze and benchmark a client s position and create maximum leverage. BUSINESS AND EDUCATIONAL BACKGROUND Michelle s previous experience includes working as a Financial Analyst at The John Buck Company commencing in 1999 with the firm s Strategic Advisory Group. At The John Buck Company she analyzed occupancy alternatives.