DEVELOPMENT OPPORTUNITY Offering Memorandum. The Homan Square Land Portfolio Chicago, Illinois

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1 DEVELOPMENT OPPORTUNITY Offering Memorandum The Homan Square Land Portfolio Chicago, Illinois

2 Homan Square in Chicago, IL TABLE OF CONTENTS: EXECUTIVE SUMMARY...I THE PROPERTY...II MARKET OVERVIEW...III CONFIDENTIALITY AGREEMENT...IV 2007 CB Richard Ellis Group, Inc. The information above has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

3 EXECUTIVE SUMMARY Offering CB Richard Ellis is exclusively authorized to offer the Homan Square Land Portfolio for sale. Overview The Homan Square Land Portfolio in Chicago, Illinois consists of the original Sears Tower plus land and 3 additional landsites. The original Sears Tower is 35,000 square feet and the total land is approximately 404,000 square feet or 9.2 acres. Location Homan Square is located in North Lawndale on the City s nearwest side about 4.5 miles from downtown Chicago. The Site is bounded by Polk on the North, Homan on the East, Fillmore on the South and Independence on the West Price The price for the Homan Square Land Portfolio is open to negotiation. Terms and Conditions The portfolio is available for sale 100% fee-simple interest. Structure The Owner will entertain funding structures with qualified candidates such as a Joint Venture, Partial Sale and/or a Sale. Present THE HOMAN SQUARE LAND PORTFOLIO EXECUTIVE SUMMARY [ PAGE 1 ]

4 Investment Rational Current and pending zoning is Planned Unit Development (PUD) district. Located in one of Chicago s most rapidly appreciating and redeveloping areas in close proximity of downtown Chicago. Development Incentives including TIF district, Empowerment Zone and Enterprise Zone. Minutes from the Eisenhower Expressway off California or Western. Public transportation in the area includes the CTA Blue, Pink and Green lines, CTA bus lines and Metra Railway. New sidewalks, curbs and gutters and resurfacing for many of the streets. New sewers and water along Homan Ave. The demographics within a 1-mile radius of the property: The average population is 57,548 The average household income is $40,491 The average housing value is $222,877 THE HOMAN SQUARE LAND PORTFOLIO EXECUTIVE SUMMARY [ PAGE 2 ]

5 PROPERTY OVERVIEW The Property: The Homan Square Land Portfolio Chicago, Illinois Offering: Development opportunity Location: North Lawndale on the city s nearwest side Total Land Size: 363,841 square feet (8.3 acres) 900 S Homan: SOLD 927 S Independence: 41,250 square feet (1.6 acres) 3600 W Arthington: 71,219 square feet (0.9 acres) Municipality/County: Chicago/Cook Neighborhood: North Lawndale/ Homan Square Utilities: All on site (new sewer and water along Homan Ave) Traffic Counts: S Homan Ave: S Independence Blvd: 8,509 AADT 12,249 ADT S Central Park Ave: 13,000 AADT Independence-Fillmore: 251,572 square feet (5.8 acres) Original Sears Tower: SOLD Zoning: Current and Pending PUD THE HOMAN SQUARE LAND PORTFOLIO THE PROPERTY [ PAGE 1 ]

6 PROPERTY DESCRIPTION CB Richard Ellis has been retained as the exclusive advisor for the sale of The Homan Square Land Portfolio ( the Property ) located on the nearwest side of Chicago, IL. This offering provides the opportunity to purchase the potential development situated in the rapidly growing North Lawndale neighborhood. The Homan Square Land Portfolio consists of the original Sears Tower and three landsites with several incentives in place including a TIF District, Empowerment Zone and Enterprise Zone which provide significant economic enhancements not available to typical real estate developments. The Site consists of: A. 900 S Homan Ave - 35,000 square foot facility on 40,000 square foot site - SOLD B W Arthington St - 71, 219 square foot site C. 927 S Independence Blvd - 41,249 square foot site D S Independence Blvd - 251,572 square foot site A. 900 S Homan Ave, the original Sears Tower, was constructed in 1905 and served as the headquarters for Sears Roebuck & Company Complex until 1973 and became a national landmark in The 35,000 square foot tower on a 40,000 square foot site rises 14 stories and includes a below-grade storage floor, but is currently an empty shell. This structure is currently zoned as part of the Homan Square PUD and offers a unique development opportunity with several incentives including historic tax credits. B W Arthington St is a vacant land site totalling 71,219 square feet (1.63 acres) surrounding Boler Park. The site contains four adjacent rectangular parcels of developable land with pending PUD zoning for as much as 40 units with a mix of townhomes and single family homes. C. 927 S Independence Blvd is 41,249 square feet of vacant land zoned PUD/R-4. This rectangular parcel is next to new construction of affordable and market rate residential condos and half a block from the new Homan Square Community Center. D S Independence Blvd or the Independence-Fillmore two-block land assemblage consists of two rectangular sites totaling 251,572 square feet (5.78 acres) of developable land with preapproved PUD zoning for in excess of 350 units. The land is one of the last largest landsites along Chicago s prestigious boulevard system. The Homan Square Land Portfolio is located in an emerging location directly in the path of one of Chicago s most rapidly appreciating and redeveloping areas in close proximity to downtown Chicago. Within the immediate area is a newer grocery anchored center, a Starbucks, four schools, two major renovated parks (Garfield and Douglas Parks) which date back to the late 19th Century, the YMCA and the new Homan Square Community Center. THE HOMAN SQUARE LAND PORTFOLIO THE PROPERTY [ PAGE 2 ]

7 PROPERTY AERIAL B C A D THE HOMAN SQUARE LAND PORTFOLIO THE PROPERTY [ PAGE 3 ]

8 A. 900 S HOMAN AVE SOLD THE HOMAN SQUARE LAND PORTFOLIO THE PROPERTY [ PAGE 4 ]

9 B W ARTHINGTON ST: BOLER PARK - SURVEY THE HOMAN SQUARE LAND PORTFOLIO THE PROPERTY [ PAGE 5 ]

10 C. 927 S INDEPENDENCE BLVD - SITE PLAN THE HOMAN SQUARE LAND PORTFOLIO THE PROPERTY [ PAGE 6]

11 D S INDEPENDENCE BLVD - SITE PLAN THE HOMAN SQUARE LAND PORTFOLIO THE PROPERTY [ PAGE 7]

12 THE HISTORY OF HOMAN SQUARE When Richard Sears and Julius Rosenwald began construction on their West Side Chicago headquarters in the early 1900 s they could never have realized the lasting impact they would make on 100 years of neighborhood history. The North Lawndale community surrounding the intersection of Homan Avenue and Arthington Street became home to one of the world s great retailing empires. The facilities constructed to support the growth of this enterprise were both a crowning achievement and physical proof of a world-class organization. The Sears complex was a bold statement of commerce, demonstrating the harmony of raw efficiency with architecture. The facility handled all the demands of the largest scale of retailing including printing catalogs, managing client relations, processing orders, manufacturing of some goods, strategic planning and research. Today that same Lawndale neighborhood is taking advantage of the old Sears district for its own purposes. Under the new name of Homan Square, many of the same principles of greatness and harmony are shaping a renewed community which is making its own national impact. The redevelopment effort began in 1988 when Sears, Roebuck and Co. Chairman, Ed Brennan, approached developer, Charlie Shaw, about the prospects for redeveloping the site of the original Sears Headquarters on Chicago s West Side. The 55-acre property, located in North Lawndale, included a number of buildings built in Among them were: the five-story Administration Building; the largest privately-owned Laboratory Building in the country; and the world s largest wood-frame structure (the first Catalog Plant). The easterly end of this building was the first Sears Tower - a fourteen-story structure that housed the radio station, WLS. There were a number of other buildings, a 1,000-car garage and a beautiful garden that has been maintained all these years. Shaw knew that such a project would require a massive and long-term partnership of the public, private and community sectors. Mayor Daley showed enormous leadership by committing the City of Chicago to millions in road, sewer and infrastructure improvements. Sears made significant commitments of support. With these major initial pledges of private investment, city commitment and community support in hand, Shaw told Sears that the project was a go. The vision for Homan Square was born. THE HOMAN SQUARE LAND PORTFOLIO MARKET OVERVIEW [ PAGE 1 ]

13 HOMAN SQUARE OVERVIEW The Chicago neighborhood of Lawndale was once home to several industries that developed in the early 1900s, most notably the Sears, Roebuck & Co. mail order facility and administrative headquarters. The neighborhood s population grew rapidly in that time and has since stabilized; the 2000 census quoted the population at 41,768. The community has had its share of ups and downs, but agencies and organizations in Chicago have provided innovative programs to sustain the community in housing, education, and youth development. The 1990s and early 2000s saw the building of a shopping center that is anchored by Dominick s and currently fully occupied, a new Starbucks, new housing, several new schools, and daycare centers. The Homan Square Land Portfolio is located in North Lawndale and lies west and south of Chicago s Loop. The area is bounded by the Eisenhower Expressway on the north, Western Avenue on the East, Cermak Road on the south and the City limits on the west. The community is bisected from east to west by Roosevelt Road and diagonally by Ogden Avenue, both major arterial streets. North Lawndale is framed by two industrial corridors, Western-Ogden and Roosevelt-Cicero. Douglas Park, a major connected by Douglas and Independence Boulevards to Garfield Park which lies north of the Eisenhower Expressway. Directly east of Douglas Park at the intersection of California and Ogden lies St. Anthony Hospital at 19th and Marshall Boulevard, a smaller, but also well established institution. North Lawndale was developed at the turn of the 20th century. Typical of many Chicago neighborhoods developed at the time, much of the housing stock was of limestone and/or brick construction. Two and three flat buildings are typically located in the middle of the blocks with six flat and larger buildings at the corners. Large courtyard buildings were developed on Douglas and Independence Boulevards, which has deeper lots than usually found in the neighborhood. Commercial streets were often characterized by mixed use development, with ground floor commercial space with apartments above. Most recently, the City of Chicago, elected officials, community organizations, institutions and private developers have been making a concerted effort to redevelop in North Lawndale. The community s high quality, original housing stock and convenient location are among the area s many strong points. As redevelopment has begun to occur, opportunities for infill housing and new commercial/retail development abound. While real estate prices have been steadily appreciating, land values in North Lawndale still present an attractive opportunity for developers. Most recently, home prices have increased in excess of $400,000. THE HOMAN SQUARE LAND PORTFOLIO MARKET OVERVIEW [ PAGE 2 ]

14 HOMAN SQUARE DEMOGRAPHICS 1-MILE RADIUS Population...57,548 Average Household Income...$40,491 Average Housing Value...$222,877 3-MILE RADIUS Population...514,544 Average Household Income...$52,243 Average Housing Value...$305,868 5-MILE RADIUS Population...1,365,777 Average Household Income...$72,126 Average Housing Value...$363,651 THE HOMAN SQUARE LAND PORTFOLIO MARKET OVERVIEW [ PAGE 3 ]

15 HOMAN SQUARE NEW DEVELOPMENT Over 1,200 residential units have been built within the past 10 years and anchored by a 70,000 square foot $28 million Community Center built in 2002 and a $4.5 million YMCA Day Care Center. A variety of residential, commercial and civic developments were completed within the North Lawndale area during the past decade. More importantly, the momentum during the past three to five years has been spectacular with an impressive list of private and public development initiatives, including the Historic Chicago Greystone Initiative which was launched in North Lawndale in 2006 to preserve and promote the neighborhood s greystone homes as the basis for community economic development. The most notable developments surround the Homan Square Land Portfolio include*: 1) Homan and Flournoy - recently completed condominium conversion of an existing apartment building. Prices average around $180/sf. Four blocks northeast of the subject. 2) Independence and Flournoy new residential construction. Two blocks north of the subject. 3) Liberty Square Currently under construction, the $14 million project will consist of 66 one- to four- bedroom apartments dispersed among 12 brink buildings. Eight of the buildings will be six-flats, two of them will have five units and two will be townhouse-style buildings with four units each. The project is being built three blocks north of the Site. 4) The New Homan Square - the new development was begun over 10 years ago and is a mixed income, primarily residential development. The development is nearing completion and has nearly 600 units of new housing, including market-rate, affordable for-sale and affordable rental. The subject property is across the street on the northside. 5) Independence and Arthington new construction. The project is located just west of Boler Park. 6) Sterling Park will be one of the largest residential developments privately undertaken in North Lawndale to date. The project will consist of redeveloping over 800,000 sf into over 400 units of residential dwellings. The development will also include a hundred units of new construction townhomes, mid-rise and condominium units. The total project will cost in excess of $200 million and will be completed during the next three to seven years. The project is just east of the Site. 7) Independence and Fillmore 4 single family, attached units which are new construction to be completed this year. The project is next to the Site on the westside. 8) Roosevelt Towers A 294 unit residential tower is on 2.25 acres on Roosevelt Rd just south of the site. The total project cost is over $20 million and has been completed. The project is located 3 blocks south of the Site. 9) Heritage Homes the new mixed-income residential development is a $21 million on South Kedzie between Flournoy and Taylor. Plans for the development call for 2-story and 3-story townhomes and 2-flat buildings. Located about 3 blocks east of the Site. * See the attached aerial THE HOMAN SQUARE LAND PORTFOLIO MARKET OVERVIEW [ PAGE 4 ]

16 CONFIDENTIALITY AGREEMENT This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the The Homan Square Land Portfolio, Chicago, Illinois ( Property ). This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Owner or the Property, to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and CB Richard Ellis. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. Neither the Owner nor CB Richard Ellis, nor any of their respective directors, officers, affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner s obligations therein have been satisfied or waived. By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CB Richard Ellis. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CB Richard Ellis. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner. FOR MORE INFORMATION, PLEASE CONTACT: Mitch Adams MITCH.ADAMS@CBRE.COM Harry Comerford HARRY.COMERFORD@CBRE.COM Steve Livaditis STEVE.LIVADITIS@CBRE.COM George Maragos GEORGE.MARAGOS@CBRE.COM CB Richard Ellis 311 S Wacker Drive, Suite 400 Chicago, IL P F THE HOMAN SQUARE LAND PORTFOLIO CONFIDENTIALITY AGREEMENT [ PAGE 1 ]