Shark Tank

October 27, 2011

Indianapolis

- $30.5M of debt for $10M

- Developing 380 Units

Site History

Former apartment site, cleared and planned for 305 condominium units.

Halted in 2008.

Developer built all infrastructure, three buildings comprising 24 units, plus 20 boat slips and sales/amenity building.

Shark Tank

October 27, 2011

Location & Market Overview

In one of three luxury submarkets

One mile from Simon’s Fashion Mall and High End 86th Street Retail (Nordstrom/Saks/Tiffany, etc.)

Access to major employment centers

Infill Site

Metro unemployment better than state and national numbers

Best Public Schools

*Source: CBRE Indianapolis 2011 Market Update

Shark Tank

October 27, 2011

Project Overview

Existing 24 units will be converted to rental

Construction of 350-380 additional units as high-end rental apartments beginning in spring 2012

Controlled development pace

Expand sales building to be leasing and amenity center

Additional 9-acre parcel flexibility

Additional 20 boat slips approved

Sponsor Overview

Four principals who together have developed over 2,000 units valued at over $400 million.

Extensive experience in the Indianapolis urban and suburban markets.

Have closed four transactions in past year; one with Renaissance Bay lender already; plus $20M new development 5 miles north of the site

Have hard bids and budgets from other site in the market

Strong pipeline to show investor who wants to grow with us

Shark Tank

October 27, 2011

Shark Tank

October 27, 2011

Strengths

Good purchase price (total acquisition cost at less than a quarter of anticipated value: $10M / $45M); stable market; solid construction costs; entitled and prepared site.

Weaknesses

Current financial markets; project size; institutional investors attention to Indianapolis.

Opportunities

Additional parcel of land; additional slips and lake/river access.

Threats

Two other projects currently in entitlements; future interest rate risk.

Shark Tank

Deal Economics

October 27, 2011

Untrended TrendedTotal Revenue $5,380,000 $6,055,000Total Expenses $1,950,000 $2,195,000Net Operating Income $3,430,000 $3,860,000 Unleveraged Return 8.22% 9.26% Debt Coverage Ratio 1.22x 1.31x Interest Coverage Ratio 1.44x 1.55x Loan-to-Value Ratio 75.0% 75.0% Stabilized Cash on Cash 10.9% 24.3%Cap Rate on Sale 6.75% 7.25%

Sources Debt Financing $29,800,000 Land Sale $1,000,000Investor $12,800,000 Total Sources $42,600,000

Uses Land Purchase Price $10,000,000 Construction Costs $24,400,000 Soft/Finance Costs $8,200,000Total Uses $42,600,000

Investment Committee Request

•Limited Partner equity commitment up to $15M

•8% preferred return

•Waterfall schedule:

• 80/20 at 8%

• 60/40 at 16%

•3.50% Development Fee

Shark Tank

October 27, 2011

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