Punnett Properties Development

250 Apartments
850 East 55th Street.
NEW YORK, NEW YORK

Confidential Investment Memorandum

 Executive Summary

Property PUNNETT PROPERTIES is currently developing 850 East 55th

Street. The new project will be erected on a corner lot with
dimensions of approximately 100’ x 200’. A 350,000 square foot, 22
story residential building will be built with open city views from
most apartments. The building will have 250 rentals apartments:
100 one bedrooms and 150 two bedrooms. In addition, the building
will have full service doorman/concierge, private tenant storage,
common landscaped courtyard, and more. Also being developed on
the site is 3 retail stores totaling approximately 52,000 square feet.

Punnett Properties is offering an equity stake in this premium investment

opportunity. A $50,000,000 investment will create a 50% investment
partner in 850 E 55th Street Owners LLC. Holding ownership of subject
property in a limited liability company will offer full liability protection
as well as providing advantageous tax benefits. As required by law,
10% of the one bedroom units will be reserved for low income tenants.
We plan on a 5 year holding period, with an overall post tax IRR of
16.4%.

Timeframe* Enter into contract, due diligence, final design Current - December
2009 Close on land purchase
November 15, 2008
Close construction loan December 31, 2008
Construction Year 2009
Close Permanent Loan December 31, 2010
Lease Up Year 2010
Stabilization Year, operational years 2011 – 2014
Property Rented December 31,
2014
* Time frame subject to change due to unforeseen construction circumstances.

Ownership Structure
Owning Entities Equity Investment % of Equity

850 NYC Developers LLC $11,522,028 10.3%

890 NYC Investors LLC $100,000,000 89.7%

Investor 1 $25,000,000 22.4%
Investor 2 $25,000,000 22.4%
Investor 3 $25,000,000 22.4%
Investor 4 $25,000,000 22.4%
 $111,522,02
Ownership Total 8 100%

Entity Structure We have selected to hold the ownership of the subject property in a
limited liability company, LLC, as they offer excellent liability
protection. The tax implications also benefits owners and investors
involved.

Location, Market The building is situated in the popular Midtown East area, one of the
most gentrified and up and coming districts of all of New York City.
Near all major, transportation, Restaurant Row and Times Square this
property’s location is one of the most desirable addresses New York
City for first time renters and people looking for a better value
proposition then buying.

Other successful rental developments in our neighborhood include the 148 unit
Clinton West directly across the street at 516 West East 55th Street
(fully rented) plus current new luxury rental developments on 46th
between 10th & 11th, 44th & 10th and the Orion (rented out) & the
Atelier on west 42nd street.
 Site Evaluation, Current Condition
The property is located on East 55th street approximately 100 feet west of 3rd Avenue
within an R8 District in the Special Midtown East District in Manhattan, Community District
4. The site is currently vacant building and has a lot area of 200 x 100 square feet
allowing for 350,000 buildable square feet.

Because the site is located above an active subway right-of-way, a special permit pursuant
to Section 74-681(1)(a) is required and was obtained. In addition, a Special Permit was
requested and was duly adopted by the city Planning Commission on May 12, 2008
(Calendar No.24).

The building fronting on West East 55th Street will rise to

a height of 200 feet (20 stories) and will contain 250 units.
Developments in this area are subject to special floor area
Propose
ratio (4.2 maximum), lot coverage (60% d Site
maximum), and height (199 feet maximum)
requirements. Residential developments in the
Preservation Area of the Special Midtown East District
also require that at least 20% of the dwelling units
contain 2 bedrooms or more, and at least 20% of the lot
area be useable landscaped open space for residents.
The building will meet or exceed all of these
requirements.
Artist’s Rendering
Ground Floor
2nd to 19th Floor
20th Floor
Private & Common Roof Decks
North – South Building Section
 Investment Summery
We are looking for investor(s) to purchase $100,000,000 of preferred equity in this project. This will
make up 89.7% of the cash equity investment. The total equity requirement for this project is
$111,522,028 towards a $184,014,528 total project cost (60% Equity/40% Debt). The preferred
security will have an accruing 8% dividend that will be paid first and before the developer gets an
8% return on his cash equity investment. After all investors have earned an 8% dividend the profits
on the investors’ capital will be split 50%/50%, with 50% for the investors and 50% for the
developer.

Assuming preferred investors invest $100 million of the equity and the project is rented for
$340,320,239 (at a 4.5% cap based on 2015 NOI - reasonable assumption based on the current
market) then the IRR to the preferred investor over the 5 year expected time horizon of the
investment will be 16.44%.

HSBC is providing a $72,492,500 construction loan and the developers are providing personal
guarantees for 30% of the loan. In summary, the developers are not only putting up $11,522,028
hard cash but they are personally guarantying $18 million to the Bank and land renteder. The
developer’s enormous capital commitment to this project should give confidence and comfort to the
preferred equity investors about the developers’ strong conviction in this project
Comparative Market Analysis
850 East 55th Street targets first time condo buyers who are working within walking
distance of the Midtown business district. We are targeting the buyer who is looking to
spend $450,000 to $1,000,000. The condominium will be mostly smaller apartments with
average price of $1,000-$1,100 for the top floor private rooftop apts and group floor apts
with a private garden.
The following are comparative new development condominiums similar in style, brand and
quality that have recently opened and or are near completed rented out.
While there are a number of condominium projects recently completed or underway, there
are not many that specifically targeted the entry-level market. Most of the new
construction condominium and town home projects are targeted at the high-end, high-rise
market. These projects are within walking distance, however, we feel they do not compare
because of the size of the units which result in a high starting price for their apartments.
Starting price pre-construction sales begin at over $55 per square foot and go up to $75+
per square foot in high-rise buildings.

Clinton West - 516 West East 55th Street

The building at 516 West East 55th Street is the

most comparable. It is located across the street and it
targeted the same market. The project was recently
completed while building sales begun on June 2005 and
the 148 units were rented out in 8 days. Several of the
units have recently rerented or are currently on the
market. The average for apartments on the market is
$1,044 per square foot.
Amenities includes: 24 hours doorman, gym,
laundry, common garden area.
 Location & Local Market Report
Midtown East is a neighborhood of New York City
that includes the area between 35th Street and 56th
Street, from 1st Avenue to 5th Aveneu.

MIDTOWN EAST

In recent years, the neighborhood has

undergone gentrification along with many other
neighborhoods in New York City. Partly as a result,
the alternative name "Clinton" (the
neighborhood is legally known as the Clinton Special
Use District) has gained in popularity. The name has
long had some currency, however; the Chelsea Clinton
News, covering this area and the adjoining Chelsea, has been published for decades.

The term Clinton refers to the former New York City Mayor and New York State Governor in
the 18th century, DeWitt Clinton. The neighborhood stands on what was once his farm
land. One of the neighborhood's gathering places is DeWitt Clinton Park.

NEIGHBORHOOD

Midtown Eastis known as one of the most popular

neighborhoods for dining in the city, both by locals and
tourists. One of the city's biggest street fairs, the Ninth
Avenue Association's International Food Festival,
stretches through the Kitchen from 37th to 57th Streets
every May, usually on the third weekend of the month.

The neighborhood is also home to a number of broadcast

and music-recording studios, including the CBS
Broadcast Center at 524 West 57th Street (also the
home of Black Entertainment Television's 106 & Park
show), Sony Music Studios at 460 West 54th Street, and
Right Track Recording's Studio A509 orchestral recording
facility at West 38th Street and 10th Avenue. The
syndicated Montel Williams show is also taped locally at
the Unitel Studios, 433 W. 53rd Street, between Ninth and Tenth Avenues.

Comedy Central's satirical program, The Daily Show with Jon Stewart, is also taped in
Midtown East— recently trading one local studio for another. In the summer of 2005 it
moved from its quarters at 54th Street and 10th Avenue to a new studio in the
neighborhood, at 733 11th Avenue, between 51st and 52nd Streets.

Development Team
SPONSER/DEVELOPER

ARCHITECT

Architect, PLLC

Established in 1997Architect, PLLC is a full service architectural firm based in Manhattan.

The firm's primary specialties are hi-rise residential buildings and conversion and/or
renovation of existing buildings.

Our client’s success is our reward, from comprehensive initial zoning analysis to the final
punch list; our focus is on the project and our client's needs. Besides doing much of our
own design work we also work closely with some of the world's foremost architects such
as Michael Graves, Philip Johnson, Robert Stern, David Rockwell, to name a few.

Other projects have included private residences, zoning consulting, tax lot and attorney
general reports for condominiums, BSA approvals, landmarks commission approvals,
fitness gyms, large scale window replacements, and commercial interiors work.
Rent to Qualifying Tenants
Construction Budget
11/15/2008 - 12/31/2009 Total Equity Loan Per SQFT
350,000
Acquisition costs 100% 0%
$35,000,00
Cost of land and existing building shell 0 $100.00
Closing cost $525,000 $1.50
$35,525,00 $35,525,0
0 00 $101.50

Predevelopment costs 100% 0%

Engineer, design, architects, fees &
costs $45,000 $0.13
NYC plumbing, water, steam
connection permits $3,500 $0.01
Land, soil tests, environmental testing $13,000 $0.04
$61,500 $61,500 $0.18

Construction costs 50% 50%

Demolition costs $400,000 $1.14
$133,875,0
Hard costs 00 $382.50
$10,710,00
Soft costs 0 $30.60
$144,985,0 $72,492,5 $72,492,5
00 00 00 $414.24

Financing costs - construction loan 100% 0%

Construction financing fees $60,000 $0.17
Construction loan interest $2,815,825 $8.05
$2,875,82
$2,875,825 5 $8.22
Real estate taxes 100% 0%
Year 2008 $3,438 $0.01
Year 2009 $27,500 $0.08
$30,938 $30,938 $0.09

$183,478,2 $110,985, $72,492,5

Total Cost of the Property 62 762 00 $524.22

Financing costs - permanent loan 100%

Commitment letter fees $275,196 $0.79
 Closing fees $194,797 $0.56
$469,993 $469,993 $1.34

$183,948,2 $111,455, $72,492,5

Total Development Costs 56 756 00 $525.57

Rent to Qualifying Tenants

72,492,5
Loan Amount 00
Annual Interest Rate 7.50%
Monthly Interest Rate 0.63%
Retainage 10%

Retainag Actual Loan

Date Amount e Draw Interest Balance
8,155,40 8,155,40
January-09 9,061,563 906,156 6 6
8,155,40 16,361,7
February-09 9,061,563 906,156 6 50,971 84
8,155,40 102,26 24,619,4
March-09 9,061,563 906,156 6 1 51
8,155,40 153,87 32,928,7
April-09 9,061,563 906,156 6 2 29
4,660,23 205,80 37,794,7
May-09 5,178,036 517,804 2 5 66
4,660,23 236,21 42,691,2
June-09 5,178,036 517,804 2 7 15
4,660,23 266,82 47,618,2
July-09 5,178,036 517,804 2 0 67
4,660,23 297,61 52,576,1
August-09 5,178,036 517,804 2 4 14
4,660,23 328,60 57,564,9
September-09 5,178,036 517,804 2 1 47
4,660,23 359,78 62,584,9
October-09 5,178,036 517,804 2 1 60
4,660,23 391,15 67,636,3
November-09 5,178,036 517,804 2 6 48
7,249,25 422,72 75,308,3
December-09 0 7 25
7,249,25 72,492,5 2,815,8 75,308,3
Totals 72,492,500 0 00 25 25
Rent to Qualifying
Tenants

Permanent Loan Amortization Schedule

Permanent Loan less Construction Loan Balance $51,488,975
Loan amount $ 126,797,299
Interest rate 6.75% annually 0.6% monthly
2 30
Amortization period 5 years 0 month
Debt service amount ($876,057) per month ($10,512,686) per year
Loan closing date 12/31/2009

Payment Principal Outstanding

Dates Beginning Balance Debt Service Interest Paid Amortized Balance

126,797,29 (876,05 (713,23

($162,82 126,634,47
1/31/2010 9 7) 5) 2) 7

126,634,47 (876,05 (712,31

($163,73 126,470,73
2/28/2010 7 7) 9) 8) 9

126,470,73 (876,05 (711,39

($164,65 126,306,08
3/31/2010 9 7) 8) 9) 0

126,306,08 (876,05 (710,47

($165,58 126,140,49
4/30/2010 0 7) 2) 5) 4

126,140,49 (876,05 (709,54

($166,51 125,973,97
5/31/2010 4 7) 0) 7) 7

125,973,97 (876,05 (708,60

($167,45 125,806,52
6/30/2010 7 7) 4) 4) 4

125,806,52 (876,05 (707,66

($168,39 125,638,12
7/31/2010 4 7) 2) 5) 8

125,638,12 (876,05 (706,71

($169,34 125,468,78
8/31/2010 8 7) 4) 3) 6

125,468,78 (876,05 (705,76

($170,29 125,298,49
9/30/2010 6 7) 2) 5) 0

10/31/201 125,298,49 (876,05 (704,80

($171,25 125,127,23
0 0 7) 4) 3) 7

11/30/201 125,127,23 (876,05 (703,84

($172,21 124,955,02
0 7 7) 1) 6) 1

12/31/201 124,955,02 (876,05 (702,87

($173,18 124,781,83
0 1 7) 2) 5) 6
1,510,617,25 (10,512,68 (8,497,22 (2,015,46 1,508,601,78
2010 Total 3 6) 2) 4) 9

124,781,83 (876,05 (701,89

($174,15 124,607,67
1/31/2011 6 7) 8) 9) 6

124,607,67 (876,05 (700,91

($175,13 124,432,53
2/28/2011 6 7) 8) 9) 7
3/31/2011 124,432,53 (876,05 (699,93 ($176,12 124,256,41
 7 7) 3) 4) 3

124,256,41 (876,05 (698,94

($177,11 124,079,29
4/30/2011 3 7) 2) 5) 8

124,079,29 (876,05 (697,94

($178,11 123,901,18
5/31/2011 8 7) 6) 1) 7

123,901,18 (876,05 (696,94

($179,11 123,722,07
6/30/2011 7 7) 4) 3) 4

123,722,07 (876,05 (695,93

($180,12 123,541,95
7/31/2011 4 7) 7) 0) 4

123,541,95 (876,05 (694,92

($181,13 123,360,82
8/31/2011 4 7) 3) 4) 0

123,360,82 (876,05 (693,90

($182,15 123,178,66
9/30/2011 0 7) 5) 3) 8

10/31/201 123,178,66 (876,05 (692,88

($183,17 122,995,49
1 8 7) 0) 7) 0

11/30/201 122,995,49 (876,05 (691,85

($184,20 122,811,28
1 0 7) 0) 8) 3

12/31/201 122,811,28 (876,05 (690,81

($185,24 122,626,03
1 3 7) 3) 4) 9
1,485,669,23 (10,512,68 (8,356,88 (2,155,79 1,483,513,44
2011 Total 8 6) 9) 6) 1

Payment Principal Outstanding

Dates Beginning Balance Debt Service Interest Paid Amortized Balance
($186,286
1/31/2012 122,626,039 (876,057) (689,771) ) 122,439,754
($187,334
2/28/2012 122,439,754 (876,057) (688,724) ) 122,252,420
($188,387
3/31/2012 122,252,420 (876,057) (687,670) ) 122,064,033
($189,447
4/30/2012 122,064,033 (876,057) (686,610) ) 121,874,586
($190,513
5/31/2012 121,874,586 (876,057) (685,545) ) 121,684,073
($191,584
6/30/2012 121,684,073 (876,057) (684,473) ) 121,492,489
($192,662
7/31/2012 121,492,489 (876,057) (683,395) ) 121,299,827
($193,746
8/31/2012 121,299,827 (876,057) (682,312) ) 121,106,081
($194,835
9/30/2012 121,106,081 (876,057) (681,222) ) 120,911,246

10/31/201
($195,931
2 120,911,246 (876,057) (680,126) ) 120,715,315

11/30/201
($197,034
2 120,715,315 (876,057) (679,024) ) 120,518,281

12/31/201
($198,142
2 120,518,281 (876,057) (677,915) ) 120,320,139
2012 Total 1,458,984,143 (10,512,686) (8,206,786) (2,305,900) 1,456,678,243
($199,256
1/31/2013 120,320,139 (876,057) (676,801) ) 120,120,883
($200,377
2/28/2013 120,120,883 (876,057) (675,680) ) 119,920,506
($201,504
3/31/2013 119,920,506 (876,057) (674,553) ) 119,719,001
($202,638
4/30/2013 119,719,001 (876,057) (673,419) ) 119,516,364
($203,778
5/31/2013 119,516,364 (876,057) (672,280) ) 119,312,586
($204,924
6/30/2013 119,312,586 (876,057) (671,133) ) 119,107,662
($206,077
7/31/2013 119,107,662 (876,057) (669,981) ) 118,901,586
($207,236
8/31/2013 118,901,586 (876,057) (668,821) ) 118,694,350
($208,401
9/30/2013 118,694,350 (876,057) (667,656) ) 118,485,948

10/31/201
($209,574
3 118,485,948 (876,057) (666,483) ) 118,276,375

11/30/201
($210,753
3 118,276,375 (876,057) (665,305) ) 118,065,622

12/31/201
($211,938
3 118,065,622 (876,057) (664,119) ) 117,853,684
1,430,441,02
2013 Total 1 (10,512,686) (8,046,231) (2,466,455) 1,427,974,566
($213,130
1/31/2014 117,853,684 (876,057) (662,927) ) 117,640,554
($214,329
2/28/2014 117,640,554 (876,057) (661,728) ) 117,426,225
($215,535
3/31/2014 117,426,225 (876,057) (660,523) ) 117,210,690
($216,747
4/30/2014 117,210,690 (876,057) (659,310) ) 116,993,943
($217,966
5/31/2014 116,993,943 (876,057) (658,091) ) 116,775,977
($219,192
6/30/2014 116,775,977 (876,057) (656,865) ) 116,556,785
($220,425
7/31/2014 116,556,785 (876,057) (655,632) ) 116,336,359
($221,665
8/31/2014 116,336,359 (876,057) (654,392) ) 116,114,694
($222,912
9/30/2014 116,114,694 (876,057) (653,145) ) 115,891,782

10/31/201
($224,166
4 115,891,782 (876,057) (651,891) ) 115,667,616
11/30/201
($225,427
4 115,667,616 (876,057) (650,630) ) 115,442,190

12/31/201
($226,695
4 115,442,190 (876,057) (649,362) ) 115,215,495
2014
Total 1,399,910,500 (10,512,686) (7,874,497) (2,638,189)
Rent to Qualifying Tenants
Projected Lease-up Schedule
January to December 2010

Lease-up Schedule
Total January February March April May June
Residential
1 bedrooms at market rent $4,500 per month
Units leased 20 40 40 45 50 50
% leased 40% 80% 80% 90% 100% 100%
Gross Income $2,452,500 $90,000 $180,000 $180,000 $202,500 $225,000 $225,000
Rent-up Charges $135,000 $54,000 $54,000 $0 $13,500 $13,500

1 bedrooms at 45% market $2,025 per month

Units leased 20 30 40 45 50 50
% leased 40% 60% 80% 90% 100% 100%
Gross Income $1,083,375 $40,500 $60,750 $81,000 $91,125 $101,250 $101,250
Rent-up Charges $48,600 $24,300 $12,150 $12,150

2 bedrooms $6,500 per month

Units leased 150 75 100 125 150 150 150
% leased 50% 67% 83% 100% 100% 100%
Gross Income $10,725,000 $487,500 $650,000 $812,500 $975,000 $975,000 $975,000
Rent-up Charges $585,000 $292,500 $97,500 $97,500 $97,500

Total Residential Rental $ $ $ $ $ $ $

Income 14,260,875 618,000 890,750 1,073,500 1,268,625 1,301,250 1,301,250
Total Residential Rent-up $ $ $ $ $ $
Charges 768,600 370,800 163,650 109,650 111,000 13,500 $ -

Retails
Stores $25,000 per month
Units leased 3 1 2 3 3 3 3
% leased 33% 67% 100% 100% 100% 100%
Retail Rental Income $825,000 $25,000 $50,000 $75,000 $75,000 $75,000 $75,000

Retail Rent-up Charges $45,000 $15,000 $15,000 $15,000

Rent to Qualifying Tenants
Projected Lease-up Schedule
January to December 2010

Lease-up Schedule
July August September October November December
Residential
1 bedrooms at market rent
Units leased 50 50 50 50 50 50
% leased 100% 100% 100% 100% 100% 100%
Gross Income $225,000 $225,000 $225,000 $225,000 $225,000 $225,000
Rent-up Charges

1 bedrooms at 45% market

Units leased 50 50 50 50 50 50
% leased 100% 100% 100% 100% 100% 100%
Gross Income $101,250 $101,250 $101,250 $101,250 $101,250 $101,250
Rent-up Charges

2 bedrooms
Units leased 150 150 150 150 150 150
% leased 100% 100% 100% 100% 100% 100%
Gross Income $975,000 $975,000 $975,000 $975,000 $975,000 $975,000
Rent-up Charges

Total Residential Rental $1,301,25 $1,301,25 $1,301,25 $1,301,25 $1,301,25 $1,301,25

Income 0 0 0 0 0 0
Total Residential Rent-up $ $ $ $ $ $
Charges - - - - - -

Retails
Stores
Units leased 3 3 3 3 3 3
% leased 100% 100% 100% 100% 100% 100%
Retail Rental Income $75,000 $75,000 $75,000 $75,000 $75,000 $75,000
Rent to Qualifying
Tenants
Lease-up Year
Proforma
January to December
2010

Februar
Total January y March April May
Residential Rental
Income
1 bedrooms at $2,452,50 $180,00 $180,00 $202,50 $225,00
market rent 0 $90,000 0 0 0 0
1 bedrooms at 45% $1,083,37 $101,25
market 5 $40,500 $60,750 $81,000 $91,125 0
$10,725,0 $650,00 $812,50 $975,00 $975,00
2 bedrooms 00 $487,500 0 0 0 0
Total Residential $14,260,8 $890,75 $1,073,5 $1,268,6 $1,301,2
Income 75 $618,000 0 00 25 50

Retail Rental
Income $825,000 $25,000 $50,000 $75,000 $75,000 $75,000

Potential Gross $15,085,8 $940,75 $1,148,5 $1,343,6 $1,376,2

Income 75 $643,000 0 00 25 50

Vacancy and Credit

Loss
Residential $427,826 $18,540 $26,723 $32,205 $38,059 $39,038
Retail $33,000 $1,000 $2,000 $3,000 $3,000 $3,000
Total Vacancy and
Credit Loss $460,826 $19,540 $28,723 $35,205 $41,059 $42,038

Effective Gross $14,625,0 $623,46 $912,0 $1,113, $1,302, $1,334,

Income 49 0 28 295 566 213

Expenses
$2,262,88 $141,11 $172,27 $201,54 $206,43
Operating Expenses 1 $96,450 3 5 4 8
Real Estate Taxes $27,500 $2,292 $2,292 $2,292 $2,292 $2,292
$2,290,38 $143,40 $174,56 $203,83 $208,72
Total Expenses 1 $98,742 4 7 5 9

Net Operating $12,334,6 $524,71 $768,6 $938,72 $1,098, $1,125,

Income 68 8 23 8 731 483

($10,512,6 ($876,05 ($876,0 ($876,05 ($876,05 ($876,05

Less: Debt Service 86) 7) 57) 7) 7) 7)
Less: Rent-up
Charges
($370,80 ($163,6 ($109,65 ($111,00 ($13,500
Residential ($768,600) 0) 50) 0) 0) )
($15,00 ($15,000
Retails ($45,000) ($15,000) 0) ) $0 $0
Total Rent-up ($385,80 ($178,6 ($124,65 ($111,00 ($13,500
Charges ($813,600) 0) 50) 0) 0) )
$51,488,9 $51,488,
Plus: Permanent Loan 75 975
`
Before Tax Cash $52,497,3 $50,751, ($286,0 ($61,97 $111,67 $235,92
Flow 56 836 84) 9) 4 6
 June July August September October November December

$225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000

$101,250 $101,250 $101,250 $101,250 $101,250 $101,250 $101,250
$975,000 $975,000 $975,000 $975,000 $975,000 $975,000 $975,000
$1,301,25 $1,301,25 $1,301,25 $1,301,25 $1,301,25
0 0 0 $1,301,250 0 $1,301,250 0

$75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000

$1,376,25 $1,376,25 $1,376,25 $1,376,25 $1,376,25

0 0 0 $1,376,250 0 $1,376,250 0

$39,038 $39,038 $39,038 $39,038 $39,038 $39,038 $39,038

$3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
$42,038 $42,038 $42,038 $42,038 $42,038 $42,038 $42,038

$1,334,2 $1,334,2 $1,334,2 $1,334,21 $1,334,2 $1,334,21 $1,334,2

13 13 13 3 13 3 13

$206,438 $206,438 $206,438 $206,438 $206,438 $206,438 $206,438

$2,292 $2,292 $2,292 $2,292 $2,292 $2,292 $2,292
$208,729 $208,729 $208,729 $208,729 $208,729 $208,729 $208,729

$1,125,4 $1,125,4 $1,125,4 $1,125,48 $1,125,4 $1,125,48 $1,125,4

83 83 83 3 83 3 83

($876,05 ($876,057 ($876,057 ($876,057

7) ) ) ($876,057) ) ($876,057) ($876,057)

$0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0
 $249,42 $249,42
6 $249,426 6 $249,426 $249,426 $249,426 $249,426

Rent to Qualifying Tenants

Depreciation Schedules

$183,478,2
Total Cost of Property 62
Less: Basis of Land
$35,000,00
Land Purchase Cost 0
Closing Costs $525,000
Demolition Costs $400,000
$35,925,00
Basis of Land 0
$147,553,2
Depreciable Basis (Basis of Building) 62

Percent allocable to personal property 11%

$16,230,85
Portion allocable to personal property 9
$131,322,4
Portion allocable to real property 04

Useful Life
27.5 years for real property
for personal
7 years property
Straight Line Method for Real Property only

Annual Depreciation
2010 2011 2012 2013 2014
Annual Depreciation real
property $4,576,387 $4,775,360 $4,775,360 $4,775,360 $4,775,360
Annual Depreciation personal
property $2,319,390 $3,974,937 $2,838,777 $2,027,234 $1,449,416
$6,895,777 $8,750,297 $7,614,137 $6,802,594 $6,224,776

$15,646,07 $23,260,21 $36,287,58

Accumulated Depreciation $6,895,777 4 1 $30,062,806 2

Depreciable Basis $147,553,2 $147,553,2 $147,553,2 $147,553,26 $147,553,2

 62 62 62 2 62
Less: Accumulated ($6,895,77 ($15,646,07 ($23,260,21 ($30,062,80 ($36,287,58
Depreciation 7) 4) 1) 6) 2)
$35,925,00 $35,925,00 $35,925,00 $35,925,00
Plus: Basis of Land 0 0 0 $35,925,000 0
$176,582, $167,832, $160,218, $153,415,4 $147,190,
Adjusted Basis 486 188 051 57 681

Assume no Section 1245 Recapture in year of sale

7 Year Depreciation
14.29% 24.49% 17.49% 12.49% 8.93% 8.92% 8.93% 4.46%
Rent to Qualifying
Tenants

Amortization Schedules

Financing Costs: Permanent Loan Fees

$275,1 Loan 25
Commitment letter fees 96 Term years
$194,7
Closing fees 97
$
469,99
3
$18,80
Annual Amortization 0

Amortization Schedule
2010 2011 2012 2013 2014
$18,80 $18,80 $18,80 $18,80 $18,80
Annual Amortization 0 0 0 0 0

$ $ $ $ $
451,19 432,39 413,59 394,79 375,99
Unamortized Amount 4 4 4 4 5

Financing Costs Rent-up

Charges
Rent-up Charges
$768,6
Residential 00
$45,00
Retail 0
$813,6
Total Rent-up Charges 00

Residential Lease Terms 3 years years

Retail Lease Terms 5 years years

Amortization
Schedule 2010 2011 2012 2013 2014
Annual Amortization
$256,2 $256,2 $256,2
Residential 00 00 00
Retail $9,000 $9,000 $9,000 $9,000 $9,000
 $265,2 $265,2 $265,2
Total Annual Amortization 00 00 00 $9,000 $9,000
Unamortized Amount
$512,4
Residential 00
$36,00
Retails 0
Total Unamortized Rent-up $548,4 $283,2 $18,00
Charges 00 00 0 $9,000 $0
Rent to Qualifying
Tenants

Tax Calculations

Real Estate Taxes for 2011

= Land & (Total Constrcution
Assessed Valuation Cost x 40%)
= (Assessed Valuation) x
Real Property Tax 5.911% (Tax Rate)

Land (Acquisition
Cost) $35,525,000
Total Construction
Cost $144,985,000
x 0.40 $57,994,000
$93,519,000
Assessed Valuation
Tax Rate @ 5.91%
Real Property Tax $5,527,908

Real Estate Tax

Exemption
Yea Adjusted RE
r RE Tax Exemption % Tax
Acquisition 2008 $3,438 0% $3,438
200
Construction 9 $27,500 0% $27,500
201
Lease-up 0 $27,500 0% $27,500
201
Stabilized 1 $5,527,908 50% $2,763,954
201
Operation 2 $5,527,908 45% $3,040,349
201
Operation 3 $5,527,908 40% $3,316,745
 201
Operation 4 $5,527,908 35% $3,593,140
201
Operation 5 $5,527,908 30% $3,869,536
Capital Gain Taxes in 2014
=2015 NOI /
Sale Price Sale Cap $278,969,711
Less: Cost of Sale ($6,974,243)
Less: Mortgage Balance ($115,215,495)
Before Tax Proceeds $156,779,973
Less: Recapture Tax @ 25% ($9,071,895)
Less: Capital Gain Tax
@ 15% ($18,720,718)
After Tax Proceeds $128,987,360

Gain on Sale
Sale Price $278,969,711
Less: Cost of Sale ($6,974,243)
Net Sale Proceeds $271,995,468
Less: Total Adjusted
Basis ($147,190,681)
Gain on Sale $124,804,787
Depreciation Recapture $22,881,934
Long Term Capital Gain $101,922,853

Tax on Recaptured
Depreciation 25% $5,720,483
Tax on Long Term Capital
Gain 15% $15,288,428
Rent to Qualifying
Tenants

Before Tax Cash Flow

Projection
2008 to 2014
Year 2009 2010 2011 2012 2013 2014 201
Operation /
Construction Lease-up Stabilization Operation Operation Sale Year Afte
Revenues:
Residential Rental Income
1 bedrooms at market $2,864,43
rent $2,452,500 $2,700,000 $2,781,000 0 $2,950,363 $
1 bedrooms at 75% $1,288,99
market $1,083,375 $1,215,000 $1,251,450 4 $1,327,663 $
$12,412,5
2 bedrooms $10,725,000 $11,700,000 $12,051,000 30 $12,784,906 $1
$16,565,9
Total Residential Income $14,260,875 $15,615,000 $16,083,450 54 $17,062,932 $1
Retail Rental Income $825,000 $900,000 $945,000 $992,250 $1,041,863 $
$17,558,2
Potential Gross Income $15,085,875 $16,515,000 $17,028,450 04 $18,104,795 $1
Vacancy and Credit Loss
Residential $427,826 $442,800 $458,298 $474,339 $490,940
Retail $33,000 $33,660 $34,333 $35,020 $35,720
Total Vacancy and Credit
Loss $460,826 $476,460 $492,631 $509,358 $526,661
$14,625,04 $16,535,81 $17,048,8
Effective Gross Income 9 $16,038,540 9 45 $17,578,134 $18

Expenses:
$1,701,04
Operating Expenses $2,262,881 $1,651,500 $1,701,045 5 $1,701,045 $
$3,316,74
Real Estate Taxes $27,500 $2,763,954 $3,040,349 5 $3,593,140 $
$5,017,79
Total Expenses $2,290,381 $4,415,454 $4,741,394 0 $5,294,185 $

$12,334,66 $11,794,42 $12,031,0

Net Operating Income 8 $11,623,086 4 55 $12,283,949 $12
($10,512,68 ($10,512,68 ($10,512,6
Less: Debt Service 6) ($10,512,686) 6) 86) ($10,512,686)
Less: Rent-up Charges ($813,600)
$1,518,36
Before Tax Cash Flow $1,008,382 $1,110,400 $1,281,738 9 $1,771,263
($111,455,7
Less: Equity Contribution 56)
Plus: Permanent Loan
Net of Construction Loan $51,488,975
Plus: Sale Proceeds $156,779,973
Total Before Tax Cash ($59,966,7 $1,518,36 $158,551,23
Flow 81) $1,008,382 $1,110,400 $1,281,738 9 6
Before Tax IRR 22.69%
$103,503,34
NPV @ 10% 4
Cash On Cash -53.80% 0.90% 1.00% 1.15% 1.36% 142.25%
Rent to Qualifying
Tenants

After Tax Cash Flow

Projection
2008 to 2014
2009 2010 2011 2012 2013 2014
Construction Lease-up Stabilization Operation Operation Operation / Sale
$12,334, $11,623,08 $11,794, $12,031,05
Net Operating Income 668 6 424 5 $12,283,949
($8,497,2 ($8,206,7
Less: Interest 22) ($8,356,889) 86) ($8,046,231) ($7,874,497)
($265,200
Less: Rent-up Charges Amortization ($265,200) ) ($265,200) ($9,000) ($
Less: Financing Fee
Amortization ($18,800) ($18,800) ($18,800) ($18,800) ($18,800)
($6,895,7 ($7,614,1
Less: Depreciation 77) ($8,750,297) 37) ($6,802,594) ($6,224,776)
($3,342,3 ($5,768,10 ($4,310,4 ($2,845,57
Taxable Income 31) 1) 99) 0) ($1,843,123)
($1,169,8 ($1,508,6
Tax Payable at 35% 16) ($2,018,835) 75) ($995,949) ($645,093)

$1,008,3 $1,281,7
Before Tax Cash Flow 82 $1,110,400 38 $1,518,369 $1,771,263
$1,169,81 $1,508,67
Less: Income Tax 6 $2,018,835 5 $995,949 $645,093
$2,178,1 $2,790,4
After Tax Cash Flow 97 $3,129,235 13 $2,514,319 $2,416,356
($111,455,7
Less: Equity Contribution 56)
Plus: Permanent Loan
Net of Construction
Loan $51,488,975
Plus: After Tax Sale
Proceeds $128,987,360
($59,966,7 $2,178,1 $2,790,4
Total After Tax Cash Flow 81) 97 $3,129,235 13 $2,514,319 $131,403,716

After Tax IRR 19.85%

NPV @ 10% $27,277,004
Cash On Cash -53.80% 1.95% 2.81% 2.50% 2.26% 117.90%
Rent to Qualifying
Tenants
Quarterly IRR
Pre Tax IRR
Calculation 2009 2010 2011 2012 2013 2014 Total
($59,966,78 $1,008,3 $1,110,4 $1,281,7 $158,551, $103,503,
1) 82 00 38 $1,518,369 236 344
Yearly IRR 22.69%

After Tax IRR ($59,966,78 $2,178,1 $3,129,2 $2,790,4 $131,403, $82,049,0

Calculation 1) 97 35 13 $2,514,319 716 99
Yearly IRR 19.85%

Quarter Year Quarter Year

($111,455,7 ($111,455,7
4 2008 56) 4 2008 56)
1 2009 1 2009
2 2009 2 2009
3 2009 3 2009
$51,488,97 $51,488,97
4 2009 5 4 2009 5
1 2010 $252,095 1 2010 $544,549
2 2010 $252,095 2 2010 $544,549
3 2010 $252,095 3 2010 $544,549
4 2010 $252,095 4 2010 $544,549
1 2011 $277,600 1 2011 $782,309
2 2011 $277,600 2 2011 $782,309
3 2011 $277,600 3 2011 $782,309
4 2011 $277,600 4 2011 $782,309
1 2012 $320,435 1 2012 $697,603
2 2012 $320,435 2 2012 $697,603
3 2012 $320,435 3 2012 $697,603
4 2012 $320,435 4 2012 $697,603
1 2013 $379,592 1 2013 $628,580
2 2013 $379,592 2 2013 $628,580
3 2013 $379,592 3 2013 $628,580
4 2013 $379,592 4 2013 $628,580
1 2014 $442,816 1 2014 $604,089
2 2014 $442,816 2 2014 $604,089
3 2014 $442,816 3 2014 $604,089
$158,994,0 $132,007,8
4 2014 52 4 2014 05
Pre Tax IRR 20.90% After Tax IRR 18.51%
Rent to Qualifying Tenants

Key Assumptions

Acquisition Amounts

Purchase date 11/15/2008

Cost of land and existing building $35,000,00
shell 0
of cost of $3,500,0
Contract deposit 10% the land 00
of cost of
Closing cost 1.5% the land $525,000
$35,525,00
0

Building info

Maximum rentable space 350,000 sqft

Retail 3 units
of total 52,
Retail space 15% sqft 500 sqft
297,
Residential 250 units 500 sqft

One bedrooms 100 units

@ market 50 units
of one
@ 45% of market 50 units 50% bedrooms

Two bedrooms 150 units

Rent 50% to low income qualifying tenants

(1=yes, 2=no) 1

Predevelopment cost
Engineer, design, architects, fees &
costs $45,000

NYC plumbing, water, steam connection permits $3,500

Land, soil tests, environmental
testing $13,000

$61,500

Construction costs

Demolition costs $400,000

per
rentable $133,875,0
Hard costs $375 sqft 00
of hard $10,710,00
Soft costs 8.0% costs 0
$144,985,0
00

Taxes
Ordinary
Income tax Rate 35%
Capital gain
tax 15%
Capital gain
recapture
tax rate 25%
Sale of property

Sale date 12/31/2014

Sale cap rate 4.5%

Cost of sale 2.5%

Construction loan

Loan term 12 months

Interest rate 7.5%

of
constructi $72,492,50
Loan amount 50% on costs 0
$9,061,5 $36,246,25
1/09 - 4/09 4 months 50% of loan 63 monthly 0
$5,178,0 $36,246,25
5/09 - 11/09 7 months 50% of loan 36 monthly 0

Mortgage retainage 10% of loan $7,249,250

of
12/09 100% retainage $7,249,250

Construction financing fees

Points $30,000

Lender's legal fees $15,000

Engineering review $5,000

Borrower's legal fees $10,000

Total construction loan closing
cost $60,000

Permanent loan

From the
Constructi $183,478,2
Total Cost of the Property on Budget 62

$211,328,8
Valuation $11,623,086 NOI Cap Rate 5.5% 32

$126,797,2
Loan amount 60% 99

Interest rate 6.75%

Term 25 years

Amortization 25 years

Commitment letter fees

of the
Issuing charge 0.15% loan $190,196

Legal fee $30,000

Other costs $15,000

Borrower's costs $40,000

$275,196
 Closing fees
of the
Points 0.10% loan $126,797

Borrower's legal fees $25,000

Lender's legal fees $15,000

Other fees $28,000

$194,797

Rental assumptions
of first
lease
Lease-up leasing commissions 5% year GI

Retail

Lease term 5 years

Monthly rents 2010-2014 $25,000 per store $900,000

Vacancy and collection loss 2010 4% $36,000

Increase 2.0% 2011 2.00% $17,280

2012 2.00%

2013 2.00%

2014 2.00%

Residential

Lease term 3 years

2010 & 2011

per
One bedrooms $4,500 month $2,700,000
of market per
One bedrooms @ 45% 45% rent $2,025 month $1,215,000
per $11,700,00
Two bedrooms $6,500 month 0
Residential Gross Potential $15,615,00
Income 0

Vacancy and collection loss 2010 3%

Increase 3.5% 2011 3.5%

2012 3.5%

2013 3.5%

2014 3.5%

Residential Rent Escalation 3%

Commercial Base Rent Escalation 5%

Operating Expenses

Lease-up year 2010 15% of PGI

Stabilized year 2011 10% of PGI

Escalation 3%

45
days/3
Real estate taxes 2008 60 $3,438
 2009 $27,500

2010 $27,500

Market Rate Rents

Construction
Budget
11/15/2008 - 12/31/2009 Total Equity Loan Per SQFT
350,000
Acquisition
costs 100% 0%
$35,000,00
Cost of land and existing building shell 0 $100.00
Closing cost $525,000 $1.50
$35,525,00 $35,525,0
0 00 $101.50

Predevelopment
costs 100% 0%
Engineer, design, architects, fees &
costs $45,000 $0.13
NYC plumbing, water, steam connection
permits $3,500 $0.01
Land, soil tests, environmental testing $13,000 $0.04
$61,500 $61,500 $0.18

Construction
costs 50% 50%
Demolition
costs $400,000 $1.14
$133,875,0
Hard costs 00 $382.50
$10,710,00
Soft costs 0 $30.60
$144,985,0 $72,492,5 $72,492,50
00 00 0 $414.24

Financing costs - construction loan 100% 0%

Construction financing fees $60,000 $0.17
Construction loan interest $2,815,825 $8.05
$2,875,82
$2,875,825 5 $8.22
Real estate
taxes 100% 0%
Year 2008 $3,438 $0.01
Year 2009 $27,500 $0.08
$30,938 $30,938 $0.09
 $183,478,2 $110,985, $72,492,50
Total Cost of the Property 62 762 0 $524.22

Financing costs - permanent loan 100%

Commitment letter fees $251,142 $0.72
Closing fees $178,761 $0.51
$429,903 $429,903 $1.23

$183,908,1 $111,415, $72,492,50

Total Development Costs 66 666 0 $525.45
Market Rate Rents
Market Rate Rents

72,492,5
Loan Amount 00
Annual Interest Rate 7.50%
Monthly Interest Rate 0.63%
Retainage 10%

Retainag Actual Loan

Date Amount e Draw Interest Balance
8,155,40 8,155,40
January-09 9,061,563 906,156 6 6
8,155,40 16,361,7
February-09 9,061,563 906,156 6 50,971 84
8,155,40 102,26 24,619,4
March-09 9,061,563 906,156 6 1 51
8,155,40 153,87 32,928,7
April-09 9,061,563 906,156 6 2 29
4,660,23 205,80 37,794,7
May-09 5,178,036 517,804 2 5 66
4,660,23 236,21 42,691,2
June-09 5,178,036 517,804 2 7 15
4,660,23 266,82 47,618,2
July-09 5,178,036 517,804 2 0 67
4,660,23 297,61 52,576,1
August-09 5,178,036 517,804 2 4 14
4,660,23 328,60 57,564,9
September-09 5,178,036 517,804 2 1 47
4,660,23 359,78 62,584,9
October-09 5,178,036 517,804 2 1 60
4,660,23 391,15 67,636,3
November-09 5,178,036 517,804 2 6 48
7,249,25 422,72 75,308,3
December-09 0 7 25
 7,249,25 72,492,5 2,815,8 75,308,3
Totals 72,492,500 0 00 25 25
Market Rate Rents

Permanent Loan Amortization Schedule

$
Permanent Loan less Construction Loan Balance 35,452,989
$
Loan amount 110,761,314
Interest
rate 6.75% annually 0.6% monthly
2 30
Amortization period 5 years 0 month
Debt service amount ($765,263) per month ($9,183,152) per year
Loan closing date 12/31/2009

Payment Principal Outstanding

Dates Beginning Balance Debt Service Interest Paid Amortized Balance

(765,26 (623,03
($142,23 110,619,08
1 1/31/2010 110,761,314 3) 2) 0) 3

(765,26 (622,23
($143,03 110,476,05
2 2/28/2010 110,619,083 3) 2) 0) 3

(765,26 (621,42
($143,83 110,332,21
3 3/31/2010 110,476,053 3) 8) 5) 8

(765,26 (620,61
($144,64 110,187,57
4 4/30/2010 110,332,218 3) 9) 4) 4

(765,26 (619,80
($145,45 110,042,11
5 5/31/2010 110,187,574 3) 5) 8) 7

(765,26 (618,98
($146,27 109,895,84
6 6/30/2010 110,042,117 3) 7) 6) 1

(765,26 (618,16
($147,09 109,748,74
7 7/31/2010 109,895,841 3) 4) 9) 2

(765,26 (617,33
($147,92 109,600,81
8 8/31/2010 109,748,742 3) 7) 6) 6

(765,26 (616,50
($148,75 109,452,05
9 9/30/2010 109,600,816 3) 5) 8) 8
1 (765,26 (615,66
($149,59 109,302,46
0 10/31/2010 109,452,058 3) 8) 5) 3
1 (765,26 (614,82
($150,43 109,152,02
1 11/30/2010 109,302,463 3) 6) 6) 7
1 (765,26 (613,98
($151,28 109,000,74
2 12/31/2010 109,152,027 3) 0) 3) 4
(9,183,15 (7,422,58 (1,760,56 1,317,809,73
2010 Total 1,319,570,306 2) 3) 9) 6
1 (765,26 (613,12
($152,13 108,848,61
3 1/31/2011 109,000,744 3) 9) 3) 1
1 (765,26 (612,27
($152,98 108,695,62
4 2/28/2011 108,848,611 3) 3) 9) 2
1 (765,26 (611,41
($153,85 108,541,77
5 3/31/2011 108,695,622 3) 3) 0) 2
1 (765,26 (610,54
($154,71 108,387,05
6 4/30/2011 108,541,772 3) 7) 5) 7
1 (765,26 (609,67
($155,58 108,231,47
7 5/31/2011 108,387,057 3) 7) 5) 1
1 (765,26 (608,80
($156,46 108,075,01
8 6/30/2011 108,231,471 3) 2) 1) 0
1 (765,26 (607,92
($157,34 107,917,67
9 7/31/2011 108,075,010 3) 2) 1) 0
2 (765,26 (607,03
($158,22 107,759,44
0 8/31/2011 107,917,670 3) 7) 6) 4
2 (765,26 (606,14
($159,11 107,600,32
1 9/30/2011 107,759,444 3) 7) 6) 8
2 (765,26 (605,25
($160,01 107,440,31
2 10/31/2011 107,600,328 3) 2) 1) 7
2 (765,26 (604,35
($160,91 107,279,40
3 11/30/2011 107,440,317 3) 2) 1) 6
2 (765,26 (603,44
($161,81 107,117,59
4 12/31/2011 107,279,406 3) 7) 6) 0
(9,183,15 (7,299,99 (1,883,15 1,295,894,29
2011 Total 1,297,777,452 2) 8) 4) 8
Rent to Qualifying
Tenants

Permanent Loan Amortization Schedule

Permanent Loan less Construction Loan Balance $51,488,975
Loan amount $ 126,797,299
Interest rate 6.75% annually 0.6% monthly
2 30
Amortization period 5 years 0 month
Debt service amount ($876,057) per month ($10,512,686) per year
Loan closing date 12/31/2009

Payment Principal Outstanding

Dates Beginning Balance Debt Service Interest Paid Amortized Balance

126,797,29 (876,05 (713,23

($162,82 126,634,47
1/31/2010 9 7) 5) 2) 7

126,634,47 (876,05 (712,31

($163,73 126,470,73
2/28/2010 7 7) 9) 8) 9

126,470,73 (876,05 (711,39

($164,65 126,306,08
3/31/2010 9 7) 8) 9) 0

126,306,08 (876,05 (710,47

($165,58 126,140,49
4/30/2010 0 7) 2) 5) 4

126,140,49 (876,05 (709,54

($166,51 125,973,97
5/31/2010 4 7) 0) 7) 7

125,973,97 (876,05 (708,60

($167,45 125,806,52
6/30/2010 7 7) 4) 4) 4

125,806,52 (876,05 (707,66

($168,39 125,638,12
7/31/2010 4 7) 2) 5) 8

125,638,12 (876,05 (706,71

($169,34 125,468,78
8/31/2010 8 7) 4) 3) 6

125,468,78 (876,05 (705,76

($170,29 125,298,49
9/30/2010 6 7) 2) 5) 0

10/31/201 125,298,49 (876,05 (704,80

($171,25 125,127,23
0 0 7) 4) 3) 7

11/30/201 125,127,23 (876,05 (703,84

($172,21 124,955,02
0 7 7) 1) 6) 1

12/31/201 124,955,02 (876,05 (702,87

($173,18 124,781,83
0 1 7) 2) 5) 6
1,510,617,25 (10,512,68 (8,497,22 (2,015,46 1,508,601,78
2010 Total 3 6) 2) 4) 9

124,781,83 (876,05 (701,89

($174,15 124,607,67
1/31/2011 6 7) 8) 9) 6

124,607,67 (876,05 (700,91

($175,13 124,432,53
2/28/2011 6 7) 8) 9) 7
3/31/2011 124,432,53 (876,05 (699,93 ($176,12 124,256,41
 7 7) 3) 4) 3

124,256,41 (876,05 (698,94

($177,11 124,079,29
4/30/2011 3 7) 2) 5) 8

124,079,29 (876,05 (697,94

($178,11 123,901,18
5/31/2011 8 7) 6) 1) 7

123,901,18 (876,05 (696,94

($179,11 123,722,07
6/30/2011 7 7) 4) 3) 4

123,722,07 (876,05 (695,93

($180,12 123,541,95
7/31/2011 4 7) 7) 0) 4

123,541,95 (876,05 (694,92

($181,13 123,360,82
8/31/2011 4 7) 3) 4) 0

123,360,82 (876,05 (693,90

($182,15 123,178,66
9/30/2011 0 7) 5) 3) 8

10/31/201 123,178,66 (876,05 (692,88

($183,17 122,995,49
1 8 7) 0) 7) 0

11/30/201 122,995,49 (876,05 (691,85

($184,20 122,811,28
1 0 7) 0) 8) 3

12/31/201 122,811,28 (876,05 (690,81

($185,24 122,626,03
1 3 7) 3) 4) 9
1,485,669,23 (10,512,68 (8,356,88 (2,155,79 1,483,513,44
2011 Total 8 6) 9) 6) 1

Payment Principal Outstanding

Dates Beginning Balance Debt Service Interest Paid Amortized Balance
($186,286
1/31/2012 122,626,039 (876,057) (689,771) ) 122,439,754
($187,334
2/28/2012 122,439,754 (876,057) (688,724) ) 122,252,420
($188,387
3/31/2012 122,252,420 (876,057) (687,670) ) 122,064,033
($189,447
4/30/2012 122,064,033 (876,057) (686,610) ) 121,874,586
($190,513
5/31/2012 121,874,586 (876,057) (685,545) ) 121,684,073
($191,584
6/30/2012 121,684,073 (876,057) (684,473) ) 121,492,489
($192,662
7/31/2012 121,492,489 (876,057) (683,395) ) 121,299,827
($193,746
8/31/2012 121,299,827 (876,057) (682,312) ) 121,106,081
($194,835
9/30/2012 121,106,081 (876,057) (681,222) ) 120,911,246
($195,931
10/31/2012 120,911,246 (876,057) (680,126) ) 120,715,315
($197,034
11/30/2012 120,715,315 (876,057) (679,024) ) 120,518,281
($198,142
12/31/2012 120,518,281 (876,057) (677,915) ) 120,320,139
2012 Total 1,458,984,143 (10,512,686) (8,206,786) (2,305,900) 1,456,678,243
($199,256
1/31/2013 120,320,139 (876,057) (676,801) ) 120,120,883
($200,377
2/28/2013 120,120,883 (876,057) (675,680) ) 119,920,506
($201,504
3/31/2013 119,920,506 (876,057) (674,553) ) 119,719,001
($202,638
4/30/2013 119,719,001 (876,057) (673,419) ) 119,516,364
($203,778
5/31/2013 119,516,364 (876,057) (672,280) ) 119,312,586
($204,924
6/30/2013 119,312,586 (876,057) (671,133) ) 119,107,662
($206,077
7/31/2013 119,107,662 (876,057) (669,981) ) 118,901,586
($207,236
8/31/2013 118,901,586 (876,057) (668,821) ) 118,694,350
($208,401
9/30/2013 118,694,350 (876,057) (667,656) ) 118,485,948
($209,574
10/31/2013 118,485,948 (876,057) (666,483) ) 118,276,375
($210,753
11/30/2013 118,276,375 (876,057) (665,305) ) 118,065,622
($211,938
12/31/2013 118,065,622 (876,057) (664,119) ) 117,853,684
1,430,441,02
2013 Total 1 (10,512,686) (8,046,231) (2,466,455) 1,427,974,566
($213,130
1/31/2014 117,853,684 (876,057) (662,927) ) 117,640,554
($214,329
2/28/2014 117,640,554 (876,057) (661,728) ) 117,426,225
($215,535
3/31/2014 117,426,225 (876,057) (660,523) ) 117,210,690
($216,747
4/30/2014 117,210,690 (876,057) (659,310) ) 116,993,943
($217,966
5/31/2014 116,993,943 (876,057) (658,091) ) 116,775,977
($219,192
6/30/2014 116,775,977 (876,057) (656,865) ) 116,556,785
($220,425
7/31/2014 116,556,785 (876,057) (655,632) ) 116,336,359
($221,665
8/31/2014 116,336,359 (876,057) (654,392) ) 116,114,694
($222,912
9/30/2014 116,114,694 (876,057) (653,145) ) 115,891,782
($224,166
10/31/2014 115,891,782 (876,057) (651,891) ) 115,667,616
 ($225,427
11/30/2014 115,667,616 (876,057) (650,630) ) 115,442,190
($226,695
12/31/2014 115,442,190 (876,057) (649,362) ) 115,215,495
2014
Total 1,399,910,500 (10,512,686) (7,874,497) (2,638,189)
Payment Beginning Debt Principal Outstanding
Dates Balance Service Interest Paid Amortized Balance

2 107,117,59 (765,26 (602,53

($162,7 106,954,86
5 1/31/2012 0 3) 6) 26) 4

2 106,954,86 (765,26 (601,62

($163,6 106,791,22
6 2/28/2012 4 3) 1) 42) 3

2 106,791,22 (765,26 (600,70

($164,5 106,626,66
7 3/31/2012 3 3) 1) 62) 1

2 106,626,66 (765,26 (599,77

($165,4 106,461,17
8 4/30/2012 1 3) 5) 88) 3

2 106,461,17 (765,26 (598,84

($166,4 106,294,75
9 5/31/2012 3 3) 4) 19) 4

3 106,294,75 (765,26 (597,90

($167,3 106,127,40
0 6/30/2012 4 3) 8) 55) 0

3 106,127,40 (765,26 (596,96

($168,2 105,959,10
1 7/31/2012 0 3) 7) 96) 3

3 105,959,10 (765,26 (596,02

($169,2 105,789,86
2 8/31/2012 3 3) 0) 43) 1

3 105,789,86 (765,26 (595,06

($170,1 105,619,66
3 9/30/2012 1 3) 8) 95) 6

3 10/31/201 105,619,66 (765,26 (594,11

($171,1 105,448,51
4 2 6 3) 1) 52) 4

3 11/30/201 105,448,51 (765,26 (593,14

($172,1 105,276,39
5 2 4 3) 8) 15) 9

3 12/31/201 105,276,39 (765,26 (592,18

($173,0 105,103,31
6 2 9 3) 0) 83) 6
1,274,467,20 (9,183,15 (7,168,87 (2,014,27 1,272,452,93
2012 Total 7 2) 8) 4) 3

3 105,103,31 (765,26 (591,20

($174,0 104,929,26
7 1/31/2013 6 3) 6) 57) 0

3 104,929,26 (765,26 (590,22

($175,0 104,754,22
8 2/28/2013 0 3) 7) 36) 4

3 104,754,22 (765,26 (589,24

($176,0 104,578,20
9 3/31/2013 4 3) 3) 20) 4

4 104,578,20 (765,26 (588,25

($177,0 104,401,19
0 4/30/2013 4 3) 2) 10) 4

4 104,401,19 (765,26 (587,25

($178,0 104,223,18
1 5/31/2013 4 3) 7) 06) 8

4 104,223,18 (765,26 (586,25

($179,0 104,044,18
2 6/30/2013 8 3) 5) 07) 0

4 104,044,18 (765,26 (585,24

($180,0 103,864,16
3 7/31/2013 0 3) 9) 14) 6
 4 103,864,16 (765,26 (584,23
($181,0 103,683,14
4 8/31/2013 6 3) 6) 27) 0

4 103,683,14 (765,26 (583,21

($182,0 103,501,09
5 9/30/2013 0 3) 8) 45) 5

4 10/31/201 103,501,09 (765,26 (582,19

($183,0 103,318,02
6 3 5 3) 4) 69) 5

4 11/30/201 103,318,02 (765,26 (581,16

($184,0 103,133,92
7 3 5 3) 4) 99) 7

4 12/31/201 103,133,92 (765,26 (580,12

($185,1 102,948,79
8 3 7 3) 8) 34) 2
1,249,533,91 (9,183,15 (7,028,62 (2,154,52 1,247,379,39
2013 Total 8 2) 8) 4) 4

102,948,79 (765,26 (579,08

($186,1 102,762,61
49 1/31/2014 2 3) 7) 76) 7

102,762,61 (765,26 (578,04

($187,2 102,575,39
50 2/28/2014 7 3) 0) 23) 4

102,575,39 (765,26 (576,98

($188,2 102,387,11
51 3/31/2014 4 3) 7) 76) 8

102,387,11 (765,26 (575,92

($189,3 102,197,78
52 4/30/2014 8 3) 8) 35) 2

102,197,78 (765,26 (574,86

($190,4 102,007,38
53 5/31/2014 2 3) 3) 00) 2

102,007,38 (765,26 (573,79

($191,4 101,815,91
54 6/30/2014 2 3) 2) 71) 1

101,815,91 (765,26 (572,71

($192,5 101,623,36
55 7/31/2014 1 3) 5) 48) 3

101,623,36 (765,26 (571,63

($193,6 101,429,73
56 8/31/2014 3 3) 1) 31) 2

101,429,73 (765,26 (570,54

($194,7 101,235,01
57 9/30/2014 2 3) 2) 20) 1

10/31/201 101,235,01 (765,26 (569,44

($195,8 101,039,19
58 4 1 3) 7) 16) 5

11/30/201 101,039,19 (765,26 (568,34

($196,9 100,842,27
59 4 5 3) 5) 17) 8

12/31/201 100,842,27 (765,26 (567,23

($198,0 100,644,25
60 4 8 3) 8) 25) 3
1,222,864,57 (9,183,15 (6,878,61 (2,304,53
2014 Total 6 2) 3) 9)
Market Rate Rents
Projected Lease-up Schedule
January to December 2010

Lease-up Schedule
Total January February March April May June
Residential
1 bedrooms at market rent $4,500 per month
Units leased 40 80 80 90 100
% leased 40% 80% 80% 90% 100% 1
Gross Income $4,905,000 $180,000 $360,000 $360,000 $405,000 $450,000 $450
Rent-up Charges $270,000 $108,000 $108,000 $0 $27,000 $27,000

1 bedrooms at 45% market $0 per month

Units leased 0 0 0 0 0
% leased 40% 60% 80% 90% 100% 1
Gross Income $0 $0 $0 $0 $0 $0
Rent-up Charges $0 $0 $0 $0

2 bedrooms $6,500 per month

Units leased 150 75 100 125 150 150
% leased 50% 67% 83% 100% 100% 1
Gross Income $10,725,000 $487,500 $650,000 $812,500 $975,000 $975,000 $975
Rent-up Charges $585,000 $292,500 $97,500 $97,500 $97,500

$ $ $ $ $ $
Total Residential Rental Income 15,630,000 667,500 1,010,000 1,172,500 1,380,000 $ 1,425,000 1,425,0
Total Residential Rent-up $ $ $ $ $
Charges 855,000 400,500 205,500 97,500 124,500 $ 27,000 $

Retails
Stores $25,000 per month
Units leased 3 1 2 3 3 3
% leased 33% 67% 100% 100% 100% 1
Retail Rental Income $825,000 $25,000 $50,000 $75,000 $75,000 $75,000 $75

Retail Rent-up Charges $45,000 $15,000 $15,000 $15,000

Market Rate Rents
Projected Lease-up Schedule
January to December 2010

Lease-up Schedule
 July August September October November December
Residential
1 bedrooms at market rent
Units leased 100 100 100 100 100 100
% leased 100% 100% 100% 100% 100% 100%
Gross Income $450,000 $450,000 $450,000 $450,000 $450,000 $450,000
Rent-up Charges

1 bedrooms at 45% market

Units leased 0 0 0 0 0 0
% leased 100% 100% 100% 100% 100% 100%
Gross Income $0 $0 $0 $0 $0 $0
Rent-up Charges

2 bedrooms
Units leased 150 150 150 150 150 150
% leased 100% 100% 100% 100% 100% 100%
Gross Income $975,000 $975,000 $975,000 $975,000 $975,000 $975,000
Rent-up Charges

$ $ $ $ $ $
Total Residential Rental Income 1,425,000 1,425,000 1,425,000 1,425,000 1,425,000 1,425,000
Total Residential Rent-up
Charges $ - $ - $ - $ - $ - $ -
Market Rate Rents
Lease-up Year
Proforma
January to December
2010

Total January February March April May

Residential Rental
Income
1 bedrooms at market $4,905,00 $360,00 $360,00 $405,00 $450,00
rent 0 $180,000 0 0 0 0
1 bedrooms at 45%
market $0 $0 $0 $0 $0 $0
$10,725,0 $650,00 $812,50 $975,00 $975,00
2 bedrooms 00 $487,500 0 0 0 0
Total Residential $15,630,0 $1,010,0 $1,172,5 $1,380,0 $1,425,0
Income 00 $667,500 00 00 00 00

Retail Rental
Income $825,000 $25,000 $50,000 $75,000 $75,000 $75,000

Potential Gross $16,455,0 $1,060,0 $1,247,5 $1,455,0 $1,500,0

Income 00 $692,500 00 00 00 00

Vacancy and Credit

Loss
Residential $468,900 $20,025 $30,300 $35,175 $41,400 $42,750
Retail $33,000 $1,000 $2,000 $3,000 $3,000 $3,000
Total Vacancy and
Credit Loss $501,900 $21,025 $32,300 $38,175 $44,400 $45,750

Effective Gross $15,953, $671,47 $1,027, $1,209, $1,410, $1,454,

Income 100 5 700 325 600 250

Expenses
$2,468,25 $159,00 $187,12 $218,25 $225,00
Operating Expenses 0 $103,875 0 5 0 0
Real Estate Taxes $27,500 $2,292 $2,292 $2,292 $2,292 $2,292
$2,495,75 $161,29 $189,41 $220,54 $227,29
Total Expenses 0 $106,167 2 7 2 2

Net Operating $13,457, $565,30 $866,40 $1,019, $1,190, $1,226,

Income 350 8 8 908 058 958
 ($9,183,15 ($765,26 ($765,26 ($765,26 ($765,26 ($765,26
Less: Debt Service 2) 3) 3) 3) 3) 3)
Less: Rent-up Charges
($400,50 ($205,50 ($97,500 ($124,50 ($27,000
Residential ($855,000) 0) 0) ) 0) )
($15,000 ($15,000
Retails ($45,000) ($15,000) ) ) $0 $0
Total Rent-up ($415,50 ($220,50 ($112,50 ($124,50 ($27,000
Charges ($900,000) 0) 0) 0) 0) )
$35,452,9 $35,452,
Plus: Permanent Loan 89 989
`
Before Tax Cash $38,827, $34,837, ($119,3 $142,14 $300,29 $434,69
Flow 186 534 54) 6 6 6
 June July August September October November December

$450,000 $450,000 $450,000 $450,000 $450,000 $450,000 $450,000

$0 $0 $0 $0 $0 $0 $0
$975,000 $975,000 $975,000 $975,000 $975,000 $975,000 $975,000
$1,425,00 $1,425,00 $1,425,00 $1,425,00 $1,425,00
0 0 0 $1,425,000 0 $1,425,000 0

$75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000

$1,500,00 $1,500,00 $1,500,00 $1,500,00 $1,500,00

0 0 0 $1,500,000 0 $1,500,000 0

$42,750 $42,750 $42,750 $42,750 $42,750 $42,750 $42,750

$3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
$45,750 $45,750 $45,750 $45,750 $45,750 $45,750 $45,750

$1,454,2 $1,454,2 $1,454,2 $1,454,25 $1,454,2 $1,454,25 $1,454,2

50 50 50 0 50 0 50

$225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000

$2,292 $2,292 $2,292 $2,292 $2,292 $2,292 $2,292
$227,292 $227,292 $227,292 $227,292 $227,292 $227,292 $227,292

$1,226,9 $1,226,9 $1,226,9 $1,226,95 $1,226,9 $1,226,95 $1,226,9

58 58 58 8 58 8 58

($765,26 ($765,263 ($765,263 ($765,263

3) ) ) ($765,263) ) ($765,263) ($765,263)

$0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0

$461,69 $461,69
6 $461,696 6 $461,696 $461,696 $461,696 $461,696
Market Rate Rents

Depreciation Schedules

$183,478,26
Total Cost of Property 2
Less: Basis of Land
$35,000,0
Land Purchase Cost 00
Closing Costs $525,000
Demolition Costs $400,000
Basis of Land $35,925,000
$147,553,26
Depreciable Basis (Basis of Building) 2

Percent allocable to personal property 11%

Portion allocable to personal property $16,230,859

$131,322,40
Portion allocable to real property 4

Useful Life
27.5 years for real property
for personal
7 years property
Straight Line Method for Real Property only

Annual Depreciation
2010 2011 2012 2013 2014
$4,576,38 $4,775,36
Annual Depreciation real property 7 $4,775,360 0 $4,775,360 $4,775,360
Annual Depreciation personal $2,319,39 $2,838,77
property 0 $3,974,937 7 $2,027,234 $1,449,416
$6,895,77 $7,614,13
7 $8,750,297 7 $6,802,594 $6,224,776

$6,895,77 $23,260,2 $36,287,58

Accumulated Depreciation 7 $15,646,074 11 $30,062,806 2

$147,553, $147,553,26 $147,553, $147,553,26 $147,553,2

Depreciable Basis 262 2 262 2 62
($6,895,77 ($15,646,07 ($23,260,2 ($30,062,80 ($36,287,5
Less: Accumulated Depreciation 7) 4) 11) 6) 82)
Plus: Basis of Land $35,925,0 $35,925,000 $35,925,0 $35,925,000 $35,925,00
 00 00 0
$176,582 $167,832,1 $160,218, $153,415,4 $147,190,
Adjusted Basis ,486 88 051 57 681

Assume no Section 1245 Recapture in year of

sale
7 Year Depreciation
17.49
14.29% 24.49% % 12.49% 8.93% 8.92% 8.93% 4.46%
Market Rate Rents

Amortization Schedules

Financing Costs: Permanent Loan Fees

$251,1 Loan 25
Commitment letter fees 42 Term years
$178,7
Closing fees 61
$
429,90
3
$17,19
Annual Amortization 6

Amortization Schedule
2010 2011 2012 2013 2014
$17,19 $17,19 $17,19 $17,19 $17,19
Annual Amortization 6 6 6 6 6

$ $ $ $ $
412,70 395,51 378,31 361,11 343,92
Unamortized Amount 7 1 5 9 3

Financing Costs Rent-up

Charges
Rent-up Charges
$855,0
Residential 00
$45,00
Retail 0
$900,0
Total Rent-up Charges 00

Residential Lease Terms 3 years years

Retail Lease Terms 5 years years

Amortization
Schedule 2010 2011 2012 2013 2014
Annual Amortization
$285,0 $285,0 $285,0
Residential 00 00 00
Retail $9,000 $9,000 $9,000 $9,000 $9,000
 $294,0 $294,0 $294,0
Total Annual Amortization 00 00 00 $9,000 $9,000
Unamortized Amount
$570,0
Residential 00
$36,00
Retails 0
Total Unamortized Rent-up $606,0 $312,0 $18,00
Charges 00 00 0 $9,000 $0
Market Rate Rents

Tax Calculations

Real Estate Taxes for 2011

= Land & (Total Constrcution
Assessed Valuation Cost x 40%)
= (Assessed Valuation) x
Real Property Tax 5.911% (Tax Rate)

Land (Acquisition
Cost) $35,525,000
Total Construction
Cost $144,985,000
x 0.40 $57,994,000
$93,519,000
Assessed Valuation
Tax Rate @ 5.91%
Real Property Tax $5,527,908

Real Estate Tax

Exemption
Yea Adjusted RE
r RE Tax Exemption % Tax
Acquisition 2008 $3,438 0% $3,438
200
Construction 9 $27,500 0% $27,500
201
Lease-up 0 $27,500 0% $27,500
201
Stabilized 1 $5,527,908 50% $2,763,954
201
Operation 2 $5,527,908 45% $3,040,349
201
Operation 3 $5,527,908 40% $3,316,745
Operation 201 $5,527,908 35% $3,593,140
 4
201
Operation 5 $5,527,908 30% $3,869,536
Capital Gain Taxes in 2014
=2015 NOI /
Sale Price Sale Cap $274,775,720
Less: Cost of Sale ($6,869,393)
Less: Mortgage Balance ($100,644,253)
Before Tax Proceeds $167,262,074
Less: Recapture Tax @ 25% ($9,071,895)
Less: Capital Gain Tax
@ 15% ($18,107,347)
After Tax Proceeds $140,082,831

Gain on Sale
Sale Price $274,775,720
Less: Cost of Sale ($6,869,393)
Net Sale Proceeds $267,906,327
Less: Total Adjusted
Basis ($147,190,681)
Gain on Sale $120,715,646
Depreciation Recapture $22,881,934
Long Term Capital Gain $97,833,712

Tax on Recaptured
Depreciation 25% $5,720,483
Tax on Long Term Capital
Gain 15% $14,675,057
Market Rate Rents

Before Tax Cash

Flow Projection
2008 to 2014
Year 2009 2010 2011 2012 2013 2014 2015
Operation
Construction Lease-up Stabilization Operation Operation / Sale Year After Sale
Revenues:
Residential Rental
Income
1 bedrooms at $5,562,00 $5,900,72
market rent $4,905,000 $5,400,000 0 $5,728,860 6 $6,077,748
1 bedrooms at 75%
market $0 $0 $0 $0 $0 $0
$12,051,0 $12,784,9
2 bedrooms $10,725,000 $11,700,000 00 $12,412,530 06 $13,168,453
Total Residential $17,613,0 $18,685,6
Income $15,630,000 $17,100,000 00 $18,141,390 32 $19,246,201
$1,041,86
Retail Rental Income $825,000 $900,000 $945,000 $992,250 3 $1,093,956
Potential Gross $18,558,0 $19,727,4
Income $16,455,000 $18,000,000 00 $19,133,640 94 $20,340,156
Vacancy and Credit
Loss
Residential $468,900 $485,312 $502,297 $519,878 $538,074 $556,906
Retail $33,000 $33,660 $34,333 $35,020 $35,720 $36,435
Total Vacancy and
Credit Loss $501,900 $518,972 $536,631 $554,898 $573,794 $593,341
Effective Gross $17,481,02 $18,021, $18,578,74 $19,153,
Income $15,953,100 9 369 2 700 $19,746,816

Expenses:
$1,854,00 $1,854,00
Operating Expenses $2,468,250 $1,800,000 0 $1,854,000 0 $1,854,000
$5,527,90 $5,527,90
Real Estate Taxes $27,500 $5,527,908 8 $5,527,908 8 $5,527,908
$7,381,90 $7,381,90
Total Expenses $2,495,750 $7,327,908 8 $7,381,908 8 $7,381,908

Net Operating $10,153,12 $10,639, $11,196,83 $11,771,

Income $13,457,350 0 461 4 792 $12,364,907
($9,183,15 ($9,183,15
Less: Debt Service ($9,183,152) ($9,183,152) 2) ($9,183,152) 2)
Less: Rent-up
Charges ($900,000)
Before Tax Cash $1,456,3 $2,588,6
Flow $3,374,198 $969,968 09 $2,013,682 40
Less: Equity ($111,415,66
Contribution 6)
Plus: Permanent Loan
Net of Construction
Loan $35,452,989
$167,262,
Plus: Sale Proceeds 074
Total Before Tax ($75,962,67 $1,456,3 $169,850
Cash Flow 7) $3,374,198 $969,968 09 $2,013,682 ,714
Before Tax IRR 19.20%
NPV @ 10% $101,702,194
Cash On Cash -68.18% 3.03% 0.87% 1.31% 1.81% 152.45%

Market Rate Rents

After Tax Cash Flow

Projection
2008 to 2014
2009 2010 2011 2012 2013 2014
Constructio Operation /
n Lease-up Stabilization Operation Operation Sale
$13,457,3 $10,639,46 $11,771,7
Net Operating Income 50 $10,153,120 1 $11,196,834 92
($7,422,583 ($6,878,613
Less: Interest ) ($7,299,998) ($7,168,878) ($7,028,628) )
Less: Rent-up Charges Amortization ($294,000) ($294,000) ($294,000) ($9,000)
Less: Financing Fee
Amortization ($17,196) ($17,196) ($17,196) ($17,196) ($17,196)
($6,895,777 ($6,224,776
Less: Depreciation ) ($8,750,297) ($7,614,137) ($6,802,594) )
($1,172,20 ($4,454,75 ($1,357,79
Taxable Income 6) ($6,208,371) 0) ($2,660,585) 3)
Tax Payable at 35% ($410,272) ($2,172,930) ($1,559,163) ($931,205) ($475,228)

$3,374,19 $2,588,64
Before Tax Cash Flow 8 $969,968 $1,456,309 $2,013,682 0
Less: Income Tax $410,272 $2,172,930 $1,559,163 $931,205 $475,228
$3,784,47 $3,063,86
After Tax Cash Flow 0 $3,142,898 $3,015,472 $2,944,887 8
($111,415,6
Less: Equity Contribution 66)
Plus: Permanent Loan
Net of Construction $35,452,98
Loan 9
$140,082,8
Plus: After Tax Sale Proceeds 31
($75,962,6 $3,784,47 $143,146,
Total After Tax Cash Flow 77) 0 $3,142,898 $3,015,472 $2,944,887 699

After Tax IRR 16.44%

$21,122,71
NPV @ 10% 8
Cash On Cash -68.18% 3.40% 2.82% 2.71% 2.64% 128.48%
Market Rate Rents

Pre Tax IRR Calculation 2009 2010 2011 2012 2013 2014 Total
($75,962,67 $3,374,19 $1,456,3 $169,850, $101,702,1
7) 8 $969,968 09 $2,013,682 714 94
Yearly IRR 19.20%

After Tax IRR ($75,962,67 $3,784,47 $3,142,89 $3,015,4 $143,146, $80,071,74

Calculation 7) 0 8 72 $2,944,887 699 8
Yearly IRR 16.44%

Quarter Year Quarter Year

($111,415,6 ($11,415,6
4 2008 66) 4 2008 66)
1 2009 1 2009
2 2009 2 2009
3 2009 3 2009
$35,452,98
4 2009 $35,452,989 4 2009 9
1 2010 $843,549 1 2010 $946,117
2 2010 $843,549 2 2010 $946,117
3 2010 $843,549 3 2010 $946,117
4 2010 $843,549 4 2010 $946,117
1 2011 $242,492 1 2011 $785,725
2 2011 $242,492 2 2011 $785,725
3 2011 $242,492 3 2011 $785,725
4 2011 $242,492 4 2011 $785,725
1 2012 $364,077 1 2012 $753,868
2 2012 $364,077 2 2012 $753,868
3 2012 $364,077 3 2012 $753,868
4 2012 $364,077 4 2012 $753,868
1 2013 $503,421 1 2013 $736,222
2 2013 $503,421 2 2013 $736,222
3 2013 $503,421 3 2013 $736,222
4 2013 $503,421 4 2013 $736,222
1 2014 $647,160 1 2014 $765,967
2 2014 $647,160 2 2014 $765,967
3 2014 $647,160 3 2014 $765,967
$170,497,87 $143,912,6
4 2014 4 4 2014 66

After Tax
Pre Tax IRR 18.18% IRR 15.77%
Market Rate Rents

Key Assumptions

Acquisition Amounts

Purchase date 11/15/2008

Cost of land and existing building $35,000,00
shell 0
of cost of $3,500,0
Contract deposit 10% the land 00
of cost of
Closing cost 1.5% the land $525,000
$35,525,00
0

Building info

Maximum rentable space 350,000 sqft

Retail 3 units
of total 52,
Retail space 15% sqft 500 sqft
297,
Residential 250 units 500 sqft

One bedrooms 100 units

@ market 100 units

of one
@ 45% of market - units 50% bedrooms

Two bedrooms 150 units

Rent 50% to low income qualifying tenants

(1=yes, 2=no) 2

Predevelopment cost
Engineer, design, architects, fees &
costs $45,000

NYC plumbing, water, steam connection permits $3,500

Land, soil tests, environmental
testing $13,000

$61,500

Construction costs

Demolition costs $400,000

per
rentable $133,875,0
Hard costs $375 sqft 00
of hard $10,710,00
Soft costs 8.0% costs 0
$144,985,0
00

Taxes
Ordinary
Income tax Rate 35%
Capital gain
tax 15%
Capital gain
recapture
tax rate 25%
Sale of property

Sale date 12/31/2014

Sale cap rate 4.5%

Cost of sale 2.5%

Construction loan

Loan term 12 months

Interest rate 7.5%

of
constructi $72,492,50
Loan amount 50% on costs 0
$9,061,5 $36,246,25
1/09 - 4/09 4 months 50% of loan 63 monthly 0
$5,178,0 $36,246,25
5/09 - 11/09 7 months 50% of loan 36 monthly 0

Mortgage retainage 10% of loan $7,249,250

of
12/09 100% retainage $7,249,250

Construction financing fees

Points $30,000

Lender's legal fees $15,000

Engineering review $5,000

Borrower's legal fees $10,000

Total construction loan closing
cost $60,000

Permanent loan

From the
Constructi $183,478,2
Total Cost of the Property on Budget 62

$184,602,1
Valuation $10,153,120 NOI Cap Rate 5.5% 89

$110,761,3
Loan amount 60% 14

Interest rate 6.75%

Term 25 years

Amortization 25 years

Commitment letter fees

of the
Issuing charge 0.15% loan $166,142

Legal fee $30,000

Other costs $15,000

Borrower's costs $40,000

$251,142
 Closing fees
of the
Points 0.10% loan $110,761

Borrower's legal fees $25,000

Lender's legal fees $15,000

Other fees $28,000

$178,761

Rental assumptions
of first
lease
Lease-up leasing commissions 5% year GI

Retail

Lease term 5 years

Monthly rents 2010-2014 $25,000 per store $900,000

Vacancy and collection loss 2010 4% $36,000

Increase 2.0% 2011 2.00% $17,280

2012 2.00%

2013 2.00%

2014 2.00%

Residential

Lease term 3 years

2010 & 2011

per
One bedrooms $4,500 month $2,700,000
of market per
One bedrooms @ 45% 45% rent $2,025 month $1,215,000
per $11,700,00
Two bedrooms $6,500 month 0
Residential Gross Potential $15,615,00
Income 0

Vacancy and collection loss 2010 3%

Increase 3.5% 2011 3.5%

2012 3.5%

2013 3.5%

2014 3.5%

Residential Rent Escalation 3%

Commercial Base Rent Escalation 5%

Operating Expenses

Lease-up year 2010 15% of PGI

Stabilized year 2011 10% of PGI

Escalation 3%

45
days/3
Real estate taxes 2008 60 $3,438
2009 $27,500

2010 $27,500