+

SBpacific

City View Apartment, San

Antonio

groupMontage, San Antonio

Montage, San Antonio

9/24/12

East Lake Laney Lofts, Oakland

+About SBpacific Group

Our History SB Pacific Group acquires under-utilized properties

and transforms them into vibrant, high-value real

estate assets

Located in Berkeley, California

Founded in 1986

Experience

Focus on value-add infill development

Handles large luxury redevelopment

Lake Merritt Lodge, Oakland

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+Investment Philosophy

Texas and California

High density suburban property

Supervise construction and

rehabilitation projects

Superior network of contacts

Class B- to B+ or B renovations

Rehabilitation, repositioning, and

adaptive re-use

Geographic Specialization

Management Expertise

Fundamental Value-Driven Approach

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+Acquisition Criteria

Property Types Multifamily rental

Retail & Office

Market Segment

Opportunistic value-add

Up-trending submarket ($5-

$20 million)

Near-term growth focus in

California and Texas

Lodge on Perrin Creek, San Antonio

9/24/12

+Recent Projects

San Antonio Apartment Portfolio

- 211 units bought with 65% occupancy

- Rent increase

- Full rehabilitation to 95% occupancy

East Lake Laney Lofts

-Renovated creamery to 26 Class

A Condos

- All units sold within

1 month of finish

City View Apartments

- 318 units re-branded to City View

- Rent increase and still own

- Full rehabilitation to 96%

occupancy

San Antonio Apartment Portfolio City View Apartments

San Antonio, TX

East Lake Laney Lofts

Oakland, CASan Antonio, TX

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The Offering

Price: $9,000,000

Built: 1984

Price Per Unit: $43,269

Price Per Sq Foot: $58.90

Units: 208

GBA: 152,800

Land Area: +/- 7 acres

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+

San Antonio and the Surroundings… San Antonio is the 7th largest city in the U.S with a population of 2.08 million

Montage at North Point is near the South Texas Medical Center which includes 45 medical institutions and over 28k professionals. Associated support businesses employ 23k. The average wage is 20% higher than the median San Antonio income.

Montage at North Point is a short distance to USAA, a San Antonio based diversified financial services group. Over 18,000 employees occupy the corporate headquarters at the corner of Fredericksburg and Huebner.

Location Profile

South Texas Medical

Center

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+ Location Profile

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+Location Highlights

Strategic Access Advantageously located within five minutes to

two of San Antonio’s largest employment centers

Short drive to San Antonio’s largest university, new retail centers, and state of the art entertainment

Flourishing Employment South Texas Medical Center, USAA and

Wonderland of the Americas Mall in submarket

Adjacent to Fredericksburg Road and a short distance to Interstate Highway 10 and Loop 410

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+Apartment Unit Amenities

Indoor Amenities 208 Unit Garden Apartments in northwest submarket

Central HVAC and large walk-in closets (washer/dryer connections in select units)

Washer/dryer connections and vaulted ceilings in select units

Cyber cafe and fitness center

Two clothes care facilities

Professional Leasing Center

Outdoor Amenities Two swimming pools

Gated entry w/ picnic area and barbeque stations

Lush native landscaping with magnificent oak trees, limestone garden walls, and courtyards

Tennis Court

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Apartment Unit Breakdown

Units Type Unit SF Total SF

48 1 Bed/1 Bath 500 24,000

88 1 Bed/1 Bath 700 61,600

48 2 Bed/2 Bath 900 43,200

24 2 Bed/2 Bath 1,000 24,000

208 735 152,800

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+Apartment Comparable

Apartment Complex # of Units Avg. Size (SF) Avg. Market Rent Rent per sq.foot

Fountain Head 688 670 $683 $1.02

Sugar Hill 184 744 $647 $0.87

San Antonio Station 172 717 $682 $0.95

Broadstone Medical 384 676 $703 $1.04

Country View 272 784 $744 $0.95

Montage at North Point 208 735 $722 $0.98

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+Rent Comparable

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Discount

Value-AddOccupancy

Why Purchase Montage at

North Point?

Attractive Occupancy Current economic occupancy is 88% and

present physical occupancy is 96% our

target physical range is 95%

Increase occupancy and maximize

collections boosting revenue

Well Located Asset Ability to attain asset directly from lender

with asset management upside (Off

Market Opportunity)

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Value-Add Opportunities

Exterior Additions Landscape trimming & sprinklers

Painting a portion of the building

Recoat and restripe the driveway

Interior Upgrades Replace carpet with Prego

Replace kitchen laminate countertops with granite

Two-tone painting

Timing Ideal due to expansion of South Texas

Medical Center

Historically low interest rate & depressed price

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+Expected Development Results

General Notes

Current Occupancy 90%, Stabilized 88% / Water reimbursement through Conservice

Expenses based on City View Performance

4/11 3/12 Actual 3rd Year Pro Forma

Gross Scheduled Rent 1,491,264 1,597,442

Vacancy and Collection Loss 183,833 201,827

Net Rental Income 1,307,431 1,395,615

Other Income 49,961 134,872

Economic Occupancy

Physical Occupancy

88%

93%

87%

94%

Total Income 1,357,393 1,530,487

Total Expenses 935,091 893,480

Net Operating Income 422,302 637,007

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+Purchase Price Analysis

General Assumptions

Assumes 75% Loan to Value

Total Cash Down payment includes 1/2 % loan fee, insurance, legal fees, title &

escrow, and capital reserve

Actual 3rd yr Proforma

Purchase Price 9,000,000

Down payment $2,707,850 $2,707,850

NOI 422,302 637,007

Mortgage Payment6.75MM 3.75% interest only due in

5 years)

253,125 253,125

Net Cash Flow 169,177 383,882

Return $ on $ 16.10% 17.06%

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16.10%

17.06%

15.60%

15.80%

16.00%

16.20%

16.40%

16.60%

16.80%

17.00%

17.20%

• Actual

• Pro Forma

Cash on Cash Return

+Net Cash Flow & IRRScenarios IRR 2011 2012 2013 2014 2015 (Sale) Cap

Rate

1 24.96% -2,436,757 $326,300 342,720 367,361 3,942,804 5.75%

2 19.90% -2,436,757 $326,300 342,720 367,361 3,180,020 6.25%

3 15.06% -2,436,757 $326,300 342,720 367,361 2,530,241 6.75%

4 12.64%-2,436,757 $326,300 342,720 367,361 2,240,160

7.00%

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24.96%

19.90%

15.06%12.64%

5.75% 6.25% 6.75% 7.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

IRR1 IRR2 IRR3 IRR4

IRR

Cap Rate

Our Market View

Key Advantages

Cheap Financing 3.75% in Pro forma Model

Attractive Market +10% Cash on Cash Return

Up-trending submarket

Property enhancements can push

rents higherLodge on Perrin Creek, San Antonio

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+Projected Fees

Management Structure Fee

General Management receives an acquisition fee of .75% for

sourcing, seeding, negotiating, and closing opportunity.

Asset and Management Fee is 5%

Investors and general management will split the annual net cash flow 85/15 as

long as investors receive 6% annual return on their investment.

At closing, Investors and General Management will split all proceeds 80/20 after

meeting all obligations including but not limited to debt service and closing

costs.

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+Experienced Team of Professionals

Responsible for strategic

management of the firm, Mr.

Sarfaty identifies, evaluates and

selects investment opportunities

for SB Pacific Group. Prior to

founding SB Pacific Group, Mr.

Sarfaty used his entrepreneurial

skills to establish several small

companies, including a

contracting business which he

continues to operate today.

Yuval BobrovitchPrincipal & Co-founder

He has held a real estate license since 1989.His experience

as a contractor and his eye for opportunity have helped Mr.

Sarfaty negotiate lucrative real estate transactions that

create lasting value.

Responsible for oversight of

construction projects, Mr.

Bobrovitch is involved in site

analysis, design development

and construction management.

Mr. Bobrovitch has extensive

experience in the construction

and renovation of multifamily

residential and commercial

properties. He is a general

contractor, and supervised all of

the early projects in the SB

Pacific Group Portfolio. Through his diligence, Mr.

Bobrovitch sets the standard by which the full upside

potential of properties should be reached.

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Igal SarfatyPrincipal & Co-founder