Slam Dunk for Equity Dollars? Public vs. Private Money Game

ULI Spring Meeting Trends Conference, May 9th, 2012, Charlotte, NC.

• "PLAYER LINEUP”

• "PLAY BALL" - Sample deal discussions

• "Slam dunk"

• "Standard Play“

• "Buzzer Beater”

• "4TH QUARTER GAME WINNING STRATEGIES”

• AUDIENCE Q&A

• John Oharenko is a Senior Vice President at Berkadia, a real estate finance and investment banking firm headquartered in Horsham, PA.

• Since 1980, John works on various equity and debt structures for income properties, placing over four billion dollars of transactions.

• John holds degrees from DePaul University and University of Wisconsin - Madison.

• Managing Principal and founder of Blue Vista is the relationship manager with new partners and capital sources.

• Mr. Byron has over 30 years of real estate investment and transaction experience and has completed over $7 billion in real estate transactions in his career.

• Prior executive positions include McShane Corporation, AEW Capital Management and Jones Lang LaSalle.

• Mr. Byron has a B.A. with Honors from the University of Virginia, where he was awarded Phi Beta Kappa. He also received his law degree from the University of Virginia.

• Executive Vice President and Chief Financial Officer at Regency Centers. Bruce has 30 years of experience with the firm and it’s predecessors.

• Regency is the leading national owner/operator of grocery-anchored, neighborhood and community retail centers valued in excess of $6 billion.

• Presently the Chairman of the Board of Brooks Rehabilitation Hospital. Also Chairman of the Board of ULI’s North Florida District Council.

• Bruce holds a Master of Science degree in real estate from the University of Wisconsin - Madison.

• Jeffrey B. Torto is a Managing Director of CBRE Global Investors’ Managed Accounts Group where he is responsible for separate account investments.

• Jeff has over 25 years of real estate experience in both investment and research capacities. Prior to CBRE Global Investors, came from Torto Wheaton.

• Mr. Torto holds a Chartered Financial Analyst designation and received his B.S. in Finance and Economics from Bentley University and a M.S. in Finance from the Wallace E. Carroll School of Management at Boston College.

Kent Place – A Shopping Center Development in Denver CBSA


Project InformationProject Name Kent PlaceLocation Englewood, Colorado

(Denver CBSA near affluent Cherry Hills Village)Completion Date Feb-13Key Demographics 3 Mile PTA CBSA

Population 108,139 43,878 Ave. Household Income $88,268 $101,906 $84,656 Median Home Value $232,099 $261,612 $222,962

Vehicles Per Day 51,300 Tenancy GLA % Total % Leased

King Sooper (grnd. lease) 30,018 63.3% 100.0%Shop Space 13,600 28.7% 72.1%Outparcel 3,800 8.0% 0.0%

Total GLA 47,418 100.0% 84.0%Project Economics Project Cost NOI ROICost, NOI & Yield $9,152,000 $831,000 9.1%

Per GLA $193.01


Why is it a Slam Dunk?

1. Land purchased following rezoning.

2. Infill location.

3. Excellent primary trade area demographics.

4. Market leading anchor (King Sooper's).

5. Limited side shop space - 5 spaces.

6. Excellent returns - market cap rate < 6.5%.

STANDARD PLAY – THE COMFORT ZONE

Seminole Shoppes – A Shopping Center Development in Jacksonville CBSA


Project InformationProject Name Seminole ShoppesLocation Neptune Beach, FL

(Jacksonville CBSA) Completion Date Sep-10Key Demographics 3 Mile PTA CBSA

Population 47,266 28,255 Ave. Household Income $78,252 $80,030 Median Home Value $285,110

Vehicles Per Day 39,500 Tenancy GLA % Total % Leased

Publix 54,340 69.5% 100.0%Shop Space 18,900 24.2% 85.9%Outparcel 5,000 6.4% 100.0%

Total GLA 78,240 100.0% 96.6%Project Economics Project Cost NOI ROIInitial Cost, NOI & Yield $14,026,000 $1,282,000 9.1%Final Cost, NOI & Yield $15,117,000 $1,489,000 9.8%

Per GLA $193.21


Why is it a Standard Play?1. Started in 2009 - conservative underwriting.

2. Land purchased following rezoning.

3. Infill location.

4. Typical primary trade area demographics.

5. Market leading anchor (Publix).

6. Publix moved from across street.

7. Limited side shop space - 10 spaces.

6. Excellent returns - market cap rate < 6.5%.

First Washington Place– A Shopping Center Development in Petaluma, California


Project InformationProject Name First Washington PlaceLocation Petaluma, CA

(Sonoma County 40 mi. north of SF) Completion Date May-13Key Demographics 3 Mile 5 Mile 10 Mile

Population 63,687 69,471 182,273 Ave. Household Income $96,322 $96,446 $92,322 Median Home Value $387,593 $396,649 $382,386

Tenancy Bldg GLA GLA % Total % LeasedTarget NAP 138,324 100.0%Major/Junior Tenants 131,000 62.9% 100.0%Shop Space 77,224 37.1% 20.7%

Total GLA 208,224 100.0% 70.6%Project Economics Project Cost NOI ROIInitial Cost, NOI & Yield $61,453,000 $4,517,000 7.4%

Per GLA $295.13


Why is it a Buzzer Beater?1. Bought land in 2004 prior to being fully entitled.

2. 1/2 property under contract to residential developer.

3. Assured by political leaders of achieving entitlements.

4. Initial returns were expected to be > 10%.

5. Political leaders with different views elected.

6. In 2009 residential developer walks from contract.

7. Sued by local anti-growth group.

8. Finally were fully entitled in late 2011.

9. Returns below current new development requirements.

Business

Slam Dunk for Equity Dollars? Public vs. Private Money Game