Property Acquisition

2011 Projected NOI $ 6,450,841

Purchase Cap Rate 6.40%
Contract Price $ 100,794,391
Commissions 0.00% $ -
Acquisition Fee 0.75% $ 755,958
Recordation Taxes 1.00% $ 1,007,944
Other Settlement Costs 0.25% $ 251,986
Purchase Price $ 102,810,278

Partnership Structure/Property Capitalization

Purchase Price $ 102,810,278
Senior Debt 60.00% $ 61,686,167
Equity 40.00% $ 41,124,111
Equity Partner Equity 95.00% $ 39,067,906
Sponsor Equity 5.00% $ 2,056,206

Senior Loan Amortization 30

Senior Loan Interest Rate 4.25%
Senior Loan Annual Debt Service $3,641,506
Senior Loan DSCR 1.77

Sponsor Asset Management Fee 5.00%

Cash Flow Distribution Pari Passu

Residual Distributions
Pari Passu to 8.00%
Then Equity Partner 80.00%
And Sponsor 20.00%

Future Sale
CY 2018 Projected NOI $ 8,891,329
Exit Cap Rate 6.25%
Contract Price $ 142,261,264
Commissions 0.50% $ (711,306)
Transfer Tax 1.00% $ (1,422,613)
Other Sale Costs 0.25% $ (355,653)
LESS: Senior Loan Payoff $ (53,388,693)
LESS: Return of Equity $ (41,124,111)
Net Sale Proceeds $ 45,258,887
 2011 2012 2013 2014 2015 2016 2017 2018
1 2 3 4 5 6 7 8

Net Operating Income $ 6,450,841 $ 6,790,383 $ 7,004,549 $ 7,365,533 $ 7,468,349 $ 7,880,587 $ 8,543,586 $ 8,891,329
LESS: Tenant Improvements $ (387,000) $ (55,340) $ (582,000) $ (99,000) $ (950,000) $ (1,388,667) $ - $ (1,406,324)
LESS: Leasing Commissions $ (47,640) $ (51,236) $ (495,000) $ (97,000) $ (894,025) $ (1,404,000) $ - $ (1,422,800)
Property Cash Flow $ 6,016,201 $ 6,683,807 $ 5,927,549 $ 7,169,533 $ 5,624,324 $ 5,087,920 $ 8,543,586 $ 6,062,205
LESS: Senior Loan Debt Service $ (3,641,506) $ (3,641,506) $ (3,641,506) $ (3,641,506) $ (3,641,506) $ (3,641,506) $ (3,641,506) $ (3,641,506)
LESS: Sponsor Annual Fee 5.00% $ (182,075) $ (182,075) $ (182,075) $ (182,075) $ (182,075) $ (182,075) $ (182,075) $ (182,075)
Funds Available for Distribution $ 2,192,619 $ 2,860,225 $ 2,103,967 $ 3,345,951 $ 1,800,742 $ 1,264,338 $ 4,720,004 $ 2,238,623

Equity Partner Cash Flow 95.00% $ 2,082,988 $ 2,717,214 $ 1,998,769 $ 3,178,654 $ 1,710,705 $ 1,201,121 $ 4,484,004 17
D'
Annual Cash on Cash Return 5.1% 6.6% 4.9% 7.7% 4.2% 2.9% 10.9% EN
@
LE
Cummulative Cash on Cash Return 5.3% 12.3% 17.4% 25.5% 29.9% 33.0% 44.5% SA

Sponsor Annual Cash Flow 5.00% $ 109,631 $ 143,011 $ 105,198 $ 167,298 $ 90,037 $ 63,217 $ 236,000 17
D'
Annual Cash on Cash Return 5.3% 7.0% 5.1% 8.1% 4.4% 3.1% 11.5% EN
@
LE
Cummulative Cash on Cash Return 5.3% 12.3% 17.4% 25.5% 29.9% 33.0% 44.5% SA
Number of periods (N)= 30
Periodic Interest rate (I)= 4.250%
Present value (PV)= (61,686,167)
Periodic payment (PMT)=
Future value (FV)= 0

Monthly payment (PMT)= $303,459

Yearly Payment (YPMT)= $3,641,506

Period Payment Interest Principal Balance

0 61,686,167
1 303,459 218,472 84,987 61,601,180
2 303,459 218,171 85,288 61,515,892
3 303,459 217,869 85,590 61,430,302
4 303,459 217,566 85,893 61,344,409
5 303,459 217,261 86,197 61,258,211
6 303,459 216,956 86,503 61,171,709
7 303,459 216,650 86,809 61,084,900
8 303,459 216,342 87,117 60,997,783
9 303,459 216,034 87,425 60,910,358
10 303,459 215,724 87,735 60,822,623
11 303,459 215,413 88,045 60,734,578
12 303,459 215,102 88,357 60,646,221 1
2,601,560 1,039,946

13 303,459 214,789 88,670 60,557,551

14 303,459 214,475 88,984 60,468,566
15 303,459 214,160 89,299 60,379,267
16 303,459 213,843 89,616 60,289,651
17 303,459 213,526 89,933 60,199,718
18 303,459 213,207 90,252 60,109,467
19 303,459 212,888 90,571 60,018,896
20 303,459 212,567 90,892 59,928,004
21 303,459 212,245 91,214 59,836,790
22 303,459 211,922 91,537 59,745,253
23 303,459 211,598 91,861 59,653,392
24 303,459 211,272 92,186 59,561,205 2
2,556,491 1,085,015

25 303,459 210,946 92,513 59,468,692

26 303,459 210,618 92,841 59,375,852
27 303,459 210,289 93,169 59,282,683
28 303,459 209,960 93,499 59,189,183
29 303,459 209,628 93,831 59,095,353
30 303,459 209,296 94,163 59,001,190
31 303,459 208,963 94,496 58,906,694
32 303,459 208,628 94,831 58,811,863
33 303,459 208,292 95,167 58,716,696
34 303,459 207,955 95,504 58,621,192
35 303,459 207,617 95,842 58,525,350
36 303,459 207,277 96,182 58,429,168 3
2,509,469 1,132,037
Net Sale Proceeds $ 45,258,887
First IRR Hurdle 8.00% 8.00%
Funds Needed to Achieve Hurdle $ 5,250,000 IRR TEST
Investor/Sponsor Splits upto 15% IRR 95.00% 5.00%
Funds to be Distributed $ 5,526,316
Net Sale Proceeds to Sponsor (First Hurdle) $ 276,316
Remaining Net Sale Proceeds $ 39,732,571
Investor Portion of Remaining Funds 80.00% $ 31,786,057

Equity Cash Flow Return of Net Sale Proceeds Sub-Total Investor Second Level Total Investor
Contribution Participation Equity to First Hurdle Cash Flow Investor Net Proceeds Cash Flow
Jan-11 1 $ (39,067,906) $ - $ - $ - $ (39,067,906) $ - $ (39,067,906)
Feb-11 2 $ - $ - $ - $ - $ - $ - $ -
Mar-11 3 $ - $ - $ - $ - $ - $ - $ -
Apr-11 4 $ - $ - $ - $ - $ - $ - $ -
May-11 5 $ - $ - $ - $ - $ - $ - $ -
Jun-11 6 $ - $ 1,041,494 $ - $ - $ 1,041,494 $ - $ 1,041,494
Jul-11 7 $ - $ - $ - $ - $ - $ - $ -
Aug-11 8 $ - $ - $ - $ - $ - $ - $ -
Sep-11 9 $ - $ - $ - $ - $ - $ - $ -
Oct-11 10 $ - $ - $ - $ - $ - $ - $ -
Nov-11 11 $ - $ - $ - $ - $ - $ - $ -
Dec-11 12 $ - $ 1,041,494 $ - $ - $ 1,041,494 1 $ - $ 1,041,494
Jan-12 13 $ - $ - $ - $ - $ - $ - $ -
Feb-12 14 $ - $ - $ - $ - $ - $ - $ -
Mar-12 15 $ - $ - $ - $ - $ - $ - $ -
Apr-12 16 $ - $ - $ - $ - $ - $ - $ -
May-12 17 $ - $ - $ - $ - $ - $ - $ -
Jun-12 18 $ - $ 1,358,607 $ - $ - $ 1,358,607 $ - $ 1,358,607
Jul-12 19 $ - $ - $ - $ - $ - $ - $ -
Aug-12 20 $ - $ - $ - $ - $ - $ - $ -
Sep-12 21 $ - $ - $ - $ - $ - $ - $ -
Oct-12 22 $ - $ - $ - $ - $ - $ - $ -
Nov-12 23 $ - $ - $ - $ - $ - $ - $ -
Dec-12 24 $ - $ 1,358,607 $ - $ - $ 1,358,607 2 $ - $ 1,358,607
Jan-13 25 $ - $ - $ - $ - $ - $ - $ -
Feb-13 26 $ - $ - $ - $ - $ - $ - $ -
Mar-13 27 $ - $ - $ - $ - $ - $ - $ -
Apr-13 28 $ - $ - $ - $ - $ - $ - $ -
May-13 29 $ - $ - $ - $ - $ - $ - $ -
Jun-13 30 $ - $ 999,384 $ - $ - $ 999,384 $ - $ 999,384
Jul-13 31 $ - $ - $ - $ - $ - $ - $ -
Aug-13 32 $ - $ - $ - $ - $ - $ - $ -
Sep-13 33 $ - $ - $ - $ - $ - $ - $ -
Oct-13 34 $ - $ - $ - $ - $ - $ - $ -
Nov-13 35 $ - $ - $ - $ - $ - $ - $ -
Dec-13 36 $ - $ 999,384 $ - $ - $ 999,384 3 $ - $ 999,384
Jan-14 37 $ - $ - $ - $ - $ - $ - $ -
Feb-14 38 $ - $ - $ - $ - $ - $ - $ -
Mar-14 39 $ - $ - $ - $ - $ - $ - $ -
Apr-14 40 $ - $ - $ - $ - $ - $ - $ -
May-14 41 $ - $ - $ - $ - $ - $ - $ -
Jun-14 42 $ - $ 1,589,327 $ - $ - $ 1,589,327 $ - $ 1,589,327
Jul-14 43 $ - $ - $ - $ - $ - $ - $ -
Aug-14 44 $ - $ - $ - $ - $ - $ - $ -
Sep-14 45 $ - $ - $ - $ - $ - $ - $ -
Oct-14 46 $ - $ - $ - $ - $ - $ - $ -
Nov-14 47 $ - $ - $ - $ - $ - $ - $ -
Dec-14 48 $ - $ 1,589,327 $ - $ - $ 1,589,327 4 $ - $ 1,589,327
Jan-15 49 $ - $ - $ - $ - $ - $ - $ -
Feb-15 50 $ - $ - $ - $ - $ - $ - $ -
Mar-15 51 $ - $ - $ - $ - $ - $ - $ -
Apr-15 52 $ - $ - $ - $ - $ - $ - $ -
May-15 53 $ - $ - $ - $ - $ - $ - $ -
Jun-15 54 $ - $ 855,353 $ - $ - $ 855,353 $ - $ 855,353
Jul-15 55 $ - $ - $ - $ - $ - $ - $ -
Aug-15 56 $ - $ - $ - $ - $ - $ - $ -
Sep-15 57 $ - $ - $ - $ - $ - $ - $ -
Oct-15 58 $ - $ - $ - $ - $ - $ - $ -
Nov-15 59 $ - $ - $ - $ - $ - $ - $ -
Dec-15 60 $ - $ 855,353 $ - $ - $ 855,353 5 $ - $ 855,353
Jan-16 61 $ - $ - $ - $ - $ - $ - $ -
Feb-16 62 $ - $ - $ - $ - $ - $ - $ -
Mar-16 63 $ - $ - $ - $ - $ - $ - $ -
Apr-16 64 $ - $ - $ - $ - $ - $ - $ -
May-16 65 $ - $ - $ - $ - $ - $ - $ -
Jun-16 66 $ - $ 600,561 $ - $ - $ 600,561 $ - $ 600,561
Jul-16 67 $ - $ - $ - $ - $ - $ - $ -
Aug-16 68 $ - $ - $ - $ - $ - $ - $ -
Sep-16 69 $ - $ - $ - $ - $ - $ - $ -
Oct-16 70 $ - $ - $ - $ - $ - $ - $ -
Nov-16 71 $ - $ - $ - $ - $ - $ - $ -
Dec-16 72 $ - $ 600,561 $ - $ - $ 600,561 6 $ - $ 600,561
Jan-17 73 $ - $ - $ - $ - $ - $ - $ -
Feb-17 74 $ - $ - $ - $ - $ - $ - $ -
Mar-17 75 $ - $ - $ - $ - $ - $ - $ -
Apr-17 76 $ - $ - $ - $ - $ - $ - $ -
May-17 77 $ - $ - $ - $ - $ - $ - $ -
Jun-17 78 $ - $ 2,242,002 $ - $ - $ 2,242,002 $ - $ 2,242,002
Jul-17 79 $ - $ - $ - $ - $ - $ - $ -
Aug-17 80 $ - $ - $ - $ - $ - $ - $ -
Sep-17 81 $ - $ - $ - $ - $ - $ - $ -
Oct-17 82 $ - $ - $ - $ - $ - $ - $ -
Nov-17 83 $ - $ - $ - $ - $ - $ - $ -
Dec-17 84 $ - $ 2,242,002 $ 39,067,906 $ 5,250,000 $ 46,559,908 7 $ 31,786,057 $ 78,345,965
$ 17,373,456 $ 39,067,906 $ 5,250,000 $ 31,786,057

XIRR 8.0% XIRR 15.2%