CASE STUDIES 3Q.2016 Value-Add Investments and Strategic Opportunities

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1 CASE STUDIES 3Q.2016 Value-Add Investments and Strategic Opportunities 1

2 LEADERSHIP TEAM & OUTLOOK Equity Investments and Strategic Opportunities Adam Greenberg, CCIM Michael Lapointe, CFA Collectively members of our leadership team have over 60 years experience in all aspects of commercial real estate including equity and debt investing, capital markets brokerage, executive management and tenant representation. Our client and partner roster includes many fortune 500 companies and ultra high-net worth individuals including Lennar, Rialto, Carnival, Burger King, Resnick Family, the Dezer Family, The Related Group, Citi amongst many others. Our team has totaled over $4B in transactions combined, nationwide. Our group has privately purchased and/or sold over over $150M in transactions in which we were equity or debt investors throughout Florida and the Southeast. Our deals have primarily focused on value-add investment opportunities in the retail and office sectors where our expertise and/or capital can be utilized in stabilizing assets at a substantial premium to purchase price and invested costs. Our relationships are paramount in our ability to identify, secure and add value to investments. Our goal is secure investment partners to take advantage of future opportunities in the southeast that are larger in either size and/or volume than our existing private investment platform can efficiently execute on. We feel that our unique platform provides substantial opportunity to unlock value in an otherwise rich southeast market. Please see attached case studies outlining some of our representative investments to date. 2

3 TARGET OPPORTUNITIES Asset Types, Return Profiles and Investment Horizon Our forward investment focus lies in three primary areas that we see yielding above market return opportunities for our partners. Each focus in aimed at utilizing our team s expertise and relationships with key tenants and market participants that can add unique property-level value opportunities for our investment team and partners. The below strategies outline where our team can bring success to a transaction in adding value or minimizing risk, with each scenario being different. Our investment criteria is to aim at deal sizes of $20M+ with a minimum of $10M of equity per transaction with our team participating with 10-25% of the required equity. In total we are seeking to employ $40M+ of GP equity at this time. SPECIAL SITUATION HIGH YIELD RETAIL OFFICE INDUSTRIAL OFFICE RETAIL OTHER RETAIL OFFICE OTHER Target: 18-22% Total Return Target: 20%+ Total Return Target: 12-15% Total Return 0 YEARS 10 0 YEARS 10 0 YEARS 10 Investments focused on stabilizing asset value from leasing, minor redevelopment, capital expenditure investment, expense management or other property specific value-add strategy. Focus on 3-7 years investment in class A & B properties in major MSA Florida markets including SE FL, Tampa, Orlando and Jacksonville. Investments focused on special situations resulting from relationships with owners, tenants or lenders. Examples include securing major tenant and purchasing a majority vacant asset from fee simple owner or lender and stabilizing asset value through completion of lease and tenant improvements. Less market specific, focus on investments < 5 years. Investments focused on senior mortgage with potential equity like upside in key markets. Strategy is to employ debt like investment with upside potential through upside or potential foreclosure and work out. Asset focus here is focused on total potential debt exposure and extremely limited to core and core plus assets that fit long term value add criteria. 3

4 TARGET MARKETS Florida Major MSA JACKSONVILLE ORLANDO TAMPA PALM BEACH BROWARD DADE 4

5 VISTA CENTER SHOPPES 100k SF Retail Shopping Center Orlando, FL Vista Centre Shoppes is approximately 100,000 SF located just outside the entrance to Downtown Disney at 8462 Palm Parkway, Orlando, FL. The property is entertainment focused with a majority of food and beverage tenants that cater to both tourists and local workers of Disney World and surrounding resorts. The property was built in 1989 and many tenants have been in operations at the property since the early 2000 s with swales history at the property. Notable names include Hooters, Sea Dog Brewery (Shipyard Beer co.), Dominos, Cici s Pizza and others. Acquisition Date: November 2015 (ACTIVE) Total Costs: $21,750, Palm Pkwy, Orlando, FL Building SF: ±98,411 SF Capital Stack:* Equity: $8,000,000 Debt: $13,750,000 Previous ownership maintained a very hands off position, with limited contribution to new tenants and overall synergy of the center. At the time of acquisition occupancy was 89%. In addition, there was a fixed purchase option for the Sea Dog parcel at the property which made it difficult to structure long term debt for other buyers. Our group was able to successfully negotiate a removal of the purchase option in exchange for a minor lease modification prior to closing. In addition, key principals of Sea Dog invested personal capital as limited partner equity into our group. Since acquisition, our group has signed multiple renewals for existing tenants in addition to 2 new leases being signed at 10-15% above our pro forma lease expectations. Additional investments will be made into lighting, signage and landscaping which we feel will further enhance the property and allow for a push up in rents. Current occupancy is 95% at the property and forward NOI has increased from approximately $1.5M to $1.8M since acquisition. Equity Source: GP Investment: Current Returns: Occupancy: Exit: * at acquisition Syndication +/- 25% of equity Levered 15% annual return, 10+% COC Currently 95% (89% at acquisition) Projected Long term Hold Acquisition is projected to be long term in nature with a holding period of 7+ years. 5

6 CHASE ANCHORED RETAIL 1.6 AC Redevelopment - Miami, FL The subject property is a retail center located on Coral Way, the main corridor connecting Brickell and Downtown Miami to Coral Gables. The property was purchased in 2011 for $6,725,000 as a retail center with two tenants in place at an approximate 6.7% cap rate. At the time of purchase Chase Bank was the major tenant with over 11k SF in addition to a medical office user who took the full second floor. The asset is located adjacent to Publix and is currently the highest retail deposit for Chase Bank in Dade County. Ownership successfully negotiated a redevelopment termination clause that led to moving Chase Bank to a new standalone ground lease taking the bank from 11,000 SF to approximately 3,800 SF; leaving the ownership with an adjacent development site of just less than 1AC available. Additionally, Chase ground lease rent equals the NOI fro the entire property prior to negotiation. Ownership successfully planned and was approved to build approximately 19k SF of additional retail and office at the property adjacent to Chase which will result in a projected NOI of over $1.1M annually. Two leases are currently signed ahead of construction of the new retail and office space, with 4 other LOI s being negotiated at this time. Ownership sold a 60% stake in the property at an implied valuation of $12,750,000 in late 2015 in an effort to bring in a substantial high net worth local partner who would facilitate in securing financing for the property. Ownership received a multiple of their initial equity investment at the time of recapitalization and are currently acting as GP towards the remaining development. Projected value upon stabilization is in excess of $22,000,000. Acquisition Date: December 2011 (ACTIVE SOLD MAJORITY %) Total Acq Costs $6,725,000 SF: 2750 SW 22 St, Miami, FL 20,000 GLSF at the time of acquisition. Currently, 1.6 AC of land with ground lease to Chase Bank. Capital Stack:* Equity: $2,525,000 Debt: $4,200,000 JV Investment NOI: Lease term: Major Tenants: Exit: * at acquisition Investment of 60% of ownership at implied valuation of $12,750,000 in 2015 ± $500k with additional ±1AC development land 20 year lease term remaining to Chase Ground lease to Chase. MD Now, Panna Bread Estimated value upon completion in excess of $22M. Ownership has recapitalized the property with a 60% equity partner resulting in a return on/of initial equity at 3.5x EQM valuation. 6

7 SURGICAL CENTER STNL Surgical Center Boca Raton, FL Acquisition Date: September 2010 (SOLD) The Boca Raton Surgery and Laser Center (BROSLC) is a Medical Office building located on approximately 3 acres that was acquired in late 2010 on Glades Rd in Boca Raton, FL. Boca Raton Outpatient Surgery and Laser Center was established in 1992 and houses 6 surgical operating rooms and 3 endoscopy suites. The property is located just east of the FAU campus, east of I-95 and across from the Boca Raton Regional Hospital. The tenant moved into the building in The lease had approximately 4 remaining years at the time of acquisition. Total Costs $9,800, Glades Rd, Boca Raton, FL SF: ±22,100 SF on ±3 AC of Land Capital Stack:* Equity: $3,300,000 Debt: $6,500,000 The property was purchased with the view that the BROSLC had a difficult and expensive process if they were to ever pursue a replacement location The combination of proximity to hospital, moving costs, licensing and available competing process gave ownership confidence in their ability to keep BROSLC at the property. Additionally, there was an ability to develop up to 10k SF of additional office space at the property. Annual Return:* Cap Rate: Lease term: Levered 16% annual return, 11+% COC 6.5% upon sale Renegotiated 10 year lease term Ownership purchased BROSLC and successfully negotiated an equity investment from some of the top practicing physicians operating at the property as limited partners. The view from ownership was that the top practicing physicians comprised a majority of the revenue at the collective practice and would help to create some additional friction should the practice seek to move. The BROSLC lease was successfully renegotiated in 2013 for an additional 10 year base term with a nominal TI at an increase to existing base rent. Occupancy: Single tenant leased to BROSLC Exit: Property Sold July 2014 for $13,750,000 * at acquisition The property was sold in July 2014 for $13,750,000 to a foreign ultra high-net worth investor equating to an what was at the time the highest $/PSF for surgical office in FL. 7

8 KENDALL CORNERS 100k SF Retail Value Add Kendall, FL Approximately 100k SF retail center located along Kendall Drive in Miami, FL submarket of Kendall. This property is anchored by Baptist Medical and Ashley Furniture and includes other key tenants, including Bank United and IHOP. The property is currently leased to primarily local and regional tenants and has excellent traffic counts and access from 3 sides of the property. Our team would look to acquire and pursue a more aggressive lease up strategy focused on national and credit tenants. Key to this strategy would be the pursuit of a large grocer anchor for the existing Ashley Furniture space which has approximately 4 years of term remaining with no future renewal options. We feel that the replacement of Ashley s would allow or higher credit and higher rent in-line tenants, thus enhancing NOI as well as compressing market cap rate for the property due to a lower risk anchor. Project Date: 4Q 2016 Total Costs: Approximately $40,000,000 Kendall, FL Building SF: ±100,000 Capital Stack:* Equity: 35% Debt: 65% Equity Source: Syndication potential institutional LP GP Investment: +/ % of equity Exit Projected sale upon stabilization of anchor space Our expectation would be to lease and hold the property over a 5-7 year period and seek to exit upon long term stabilization of the key Ashley Furniture space. Our strategy would deliver an expected 9-10% cash on cash return with annual leveraged IRR of 18-20% and a 2.0 EQM. Ownership would seek to exit upon stabilization of the key anchor space (Ashley s) at market cap rates. 8

9 DEACONESS 45k SF Build to Suit Evansville, IN Multiple build to suit opportunity for Deaconess Clinic, INC with initial build to suit complex of approximately 40-45k SF of clinical space in Evansville, IN followed by an additional 120k SF clinic / office space as a second phase. Company is seeking a development partner for both phases and will sign long term 20 year absolute net leases. Deaconess Clinic is a leading provider of clinical services with strong credit. Our team would look to provide all aspects of capital for the project (Phase one estimated at $13M and phase two at approximately $40M). Our group would negotiate long term absolute net lease and subsequently place required equity, debt and oversee all aspects through construction and delivery. Our expectation would be to secure the assignment to construct Phase I at or near an 8% yield to cost and deliver a product that we will would trade at an approximate 5.5-6% cap rate today. Project Date: Estimated 2017 Total Costs: Approximately $13,000,000 Evansville, IN Building SF: ±40,000 Capital Stack:* Equity: 50% Debt: 50% Equity Source: GP Investment: Exit Syndication potential institutional LP/Phase II +/ % of equity Projected sale upon completion or through forward sale participant. We estimate a leveraged IRR in excess of 25% over a 3 year hold period and an equity multiple in excess of 1.7. Ownership would seek to exit upon completion of the build to suit project at a market sale. We would look to further mitigate risk by securing a forward participant for the purchase of the facility upon completion. In a hold scenario, cash on cash returns are estimated to exceed 12% annually with 65% LTC long term fixed rate debt. 9

10 3901 DORAL 29k SF Office Doral, FL The subject property is a ±28,603 SF two-story office building located at 3901 NW 79th Avenue, Doral, FL The property is located on a ±1.44 AC parcel on the corner of NW 36th Street and NW 79th Avenue, immediately off of the Palmetto Expressway (SR- 826). The property has substantial redevelopment potential (up to 6 stories) and has an excellent presence with its location on the hard corner of Doral Blvd. and NW 79th Ave. Additionally, the property currently has in place cash flow that can be maximized through repositioning. Project Date: 4Q 2016 Total Costs: Approximately $7,000, NW 79 Ave, Doral, FL Building SF: ±29,000 Capital Stack:* Equity: 35% Debt: 65% The property is currently occupied at approximately 90% at an estimated 20% below market rates. We estimate that current market rents can be achieved within a period of 18 months with higher credit tenants with intermediate term leases. Occupancy at 92% at market rents would equate to an increase in cap rate from an existing 5% cap rate to 7%. Long term the property can be redeveloped at up to 100k SF of total FAR up to 6 stories high. The property sits at the main entry point into Doral, a submarket experiencing construction of over 3,000 new homes in the next 24 months. Equity Source: GP Investment: Exit Syndication +/- 20% of equity Projected sale upon stabilization in intermediate term Ownership would seek to exit within 5-7 years with a sale to a vertical developer who would likely raze the building and construct medical, hotel or build to suit office. We feel that the current site does not warrant vertical construction due to the other projects within the submarket, but the property is an excellent candidate long term as it sits at one of the most sought after corners in all of Doral. 10