ELCO LANDMARK RESIDENTIAL - TASE

Elco Landmark Residential1

ELCO LANDMARK RESIDENTIAL

Distressed & Value-Add Investing in the US Multifamily Housing Sector

Elco Landmark Residential

Forward-Looking Statements

This Presentation includes forward-looking statements. Words such as "believe", "anticipate", "expect", "intend", "seek", "will", "plan", "could", "may", "project", "goal", "target" and similar expressions often identify forward-looking statements but are not the only way we identify these statements. All statements other than statements of historical fact included in this Presentation regarding the Company's future performance, plans to increase revenues or margins or preserve or expand market share in existing or new markets, reduce expenses and any statements regarding other future events or future prospects, are forward-looking statements.

We have based these forward-looking statements on our current knowledge (based, inter alia on competitors' publications, statistics, surveys and additional materials which do not include any assurances as for the accuracy of those materials) and on our present beliefs and expectations regarding possible future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Company's business environment, the impact of the global economic conditions, possible regulatory changes etc.

In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Presentation might not occur, and actual results may differ materially from the results anticipated.

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

1


Elco Holdings Ltd., Group Structure

2


Multi-family apartment communities in the US.

US total 21 million apartment units. – U.S. Census Bureau – 6/2009

Elco Landmark Residential (“ELR”) focuses on the Southeast market in 6 states with approximately 3 million units

- Florida North Carolina- Alabama South Carolina- Texas Georgia

ELR focuses on the “Mid-Market” sector of multifamily which focuses on working class & young families

Market

3


Landmark at Creekside Grand

4


Landmark at Creekside Grand

5


Milana Reserve

6


Landmark at Grand Palms

7


Waterstone at Carrollwood

8


Population growth rate

Job & economic growth

Climate & quality of life

Landlord friendly states

Minimal temperature fluctuations compared to the North

Few properties with “central systems”

Why the Southeast?

9


Southeast States –TX, AL, GA, FL, SC, NC

10


Broadest, most stable of Real Estate “food groups”

Lowest risk/highest reward ratio per Price Waterhouse Real Estate Report

Non-recourse financing

Capital event upside

Why Mid-Market Multi-Family?

11


Market Trends – Overview

“Worst is over; recovery to gain strong momentum after 2010”

Development of new construction remains slow

Burn-off of excess housing inventory and receding home ownership rates

Favorable demographics: Echo boomers transition to prime renting years 20 to 34 year olds projected to rise by 5 million in the next 10 years

- Marcus & Millichap “2010 National Apartment Report”

12


“ The Financial Case for Renting vs Buying a Home”In today’s weak housing market, homeownership is no longer viewed by many as an

investment vehicle…With so much stress on homeowners markets, renting has become more

appealing than owning for many. A 2010 study showed # of renters increased by 10% or 3.4

million between 2004 and 2009.

CNNMoney.com 7/28/10 by Nin-Hai Tseng

Market Trends – Renting is Smart

13


“Apartment occupancy up amid foreclosures”“Landlords are seeing a surge in apartment rentals as mounting foreclosures reduce homeownership and an improving job market for young adults encourages them to find their own places. The number of occupied apartments increased by 215,000 in the 64 largest U.S. markets in the first half of the year, almost double of 2009. The vacancy rate declined to 6.6% in June from 8.2% in December. Investors are betting the expanding ranks of renters will lead to earnings increases next year of 10% or more for apartment real estate investors.”

USA Today 7/28/2010

Market Trends – Occupancy is Increasing

14


"We are forecasting that vacancies will be declining and rents will be appreciating across all property types by the middle of next year. He observes that apartments and multifamily housing are among the market leaders currently. "There is a real demand for apartments," he noted, "and rents are going up. Office and retail will follow that. Industrial will be last”

CBRE Chief Executive Brett White

Los Angeles Times (09/12/10)

16

Market Trends –Commercial Real Estate Rebounds

15


Opportunities to Buy Distressed Assets

Poorly managed existing assets can’t service debt Abandoned development deals Defaulted condo conversions Foreclosure rate at historical highs Lenders disposing of foreclosed REO assets at deep discounts Institutional owners seeking to reposition portfolios and divest secondary

grade assets

Able to build asset portfolio at attractive valuations

Why Invest in Multifamily in the US?

16


Flight from ownership drives rental demand

Increased rents and occupancies

Record low financing rates Movement of jobs to the Southeast – continued population growth in SE Record low new construction

Attractive sector dynamics and discounted buying opportunities. Landmark is uniquely positioned to source, diligence, operate and sell these assets

Why Invest in Multifamily in the US?

17


Landmark Residential Overview (Prior to Elco JV)

Founded in 1996 by Joe Lubeck

Acquired, owned and managed over $1.7 billion of assets representing over 30,000 units across 109 transactions

Focused on acquisition and turnaround of distressed & under-managed apartment communities

Geographic focus on US Southeast: Florida, Texas, Georgia, and the Carolinas

Proven experience in redeveloping, refurbishing and repositioning apartment communities

Seasoned executive team oversees property management, leasing, construction management, marketing, legal, and finance.

Total equity invested before Elco JV $346 million SOLD deals - $263 million – average IRR of 24% Current deals/Pre-Elco- $83 million

Not one single loss making transaction over the years

18


Number of Exited Transactions: 80

Number of Units Sold: 21,919Total Acquisition Price: $1,083,000,000Total Equity Invested: $263,000,000Total Sale Proceeds: $1,395,000,000Average Holding Period: 3 yrsAverage IRR to Investors: 24%Min IRR per deal: 1%Max IRR per deal: 178%

Sold Track Record Summary (Prior to Elco JV)

19


Past Strategic Partners –Assets Still Managed by ELR

Investments Prior to ELR Venture Still managed:

Heitman $27 million

Capmark $11.5 million

Florida Value Fund $6.5 million

Simkins (Lion Financial) $15.6 million

Private High Net Worth Individuals $22.4 million$83 million

20


Elco Landmark Residential merger effective July 1st, 2008. Elco purchases 90% of Landmark Residential. ELR becomes subsidiary of Elco North America, Inc.

10% Equity held by Joe Lubeck

$100 million of equity committed by both partners for the JV

To date, 20 completed ELR transactions totaling $370 million in acquisitions and $104 million in equity

Strategic relationships with established equity partners including Brookfield Real Estate Opportunity Fund; Legacy Capital Partners and High Net Worth Individuals

Website: www.landmarkresidential.com

Elco Landmark Residential Partnership

21


(ELR – 5,992 Units, 20 Assets.)

22

Elco Landmark Residential Portfolio


ELR – Investment Strategy

Target infill locations within micro-markets that have stable communities

Acquire foreclosed assets @ 50% to 75% of replacement costs

Renovate and reposition asset over 18-24 month period

Achieve NOI growth by increasing rents and reducing expenses

Refinance bridge debt for permanent financing after repositioning is complete

Investment returns driven by operational improvement and cap rate arbitrage

Achieve critical portfolio size of over 20,000 units by 2014

23


Renovation & Repositioning of Assets

Track record: Renovated over 20,000 units with total budget of $90 million Completed all renovations within 1% of budget

Experienced in-house construction supervision and accounting Long term relationships with vendors and contractors resulting in predictability of

renovation costs, purchasing power and scheduling.

24


Renovation & Repositioning of Assets

Repositioning of Asset includes: Upgrade of physical structure: exteriors, interiors, amenities

Re-branding of facility: signage, brochures, marketing

Tennant Mix: Clean up rent roll by evicting delinquent or non-paying tenants and attracting higher quality tenants

Re-training: Train & incentivize local team members

25


Growth Drivers Estimated IncreaseMin Max

Inflation over 2 yrs $20 $30Exterior Upgrade $10 $30Amenities Upgrade $10 $40Interior Upgrade $20 $80Improved Management $20 $20Total Potential Increase $80 $200Percentage Increase 13% 33%

On average, management assumes rental increase of $120 (20%/$40 annually) over 3 years

Drivers of Rental Growth

Based on assumed starting rent of $600 per month

26


Deal FlowBroad network of relationships with owners and lenders provides strong pipeline of off-market opportunities at discounts that are not offered to other buyers. Sellers more willing to discount price to us because they know we have the ability to close.

Ability to Close Complicated Transactions

ELR’s extensive expertise in repositioning assets allows us to consider complicated transactions that are distressed, foreclosed, and completely mismanaged where other operators would refrain from participating.

Due Diligence ExpertiseSignificant experience in market, asset, tenant, financing, and legal due diligence built over 25 years. Utilize diligence results to devise effective strategy to reposition and stabilize the asset.

Value Add & Turn Around Expertise

Management has effectively renovated and stabilized over 100 assets. Completing renovation on time and in budget. Increasing NOI and value of the asset.

ELR – Competitive Advantages

27


Operational ExpertiseBuilt infrastructure to provide best in class training, marketing, recruiting and retaining employees. Proven expertise in managing assets post acquisition enables Landmark to mitigate risks and drive returns.

Fast Paced Effective Management Style

Empower employees to make positive changes in the organization. Corporate provides the onsite team the tools to perform the best that they can and encourages them that time is always of the essence

Access to Debt Financing Long term relationships with lenders across South-East enable Landmark to secure debt financing rapidly.

Market Focus Deep understanding of micro-markets within South East provides unrivaled ability to analyze and price risk.

Exit Experience Familiarity with buyers and capital markets enable Landmark to maximize sale values

ELR – Competitive Advantages continued

28


ELR Strategic Partners

Legacy Capital Partners - is a private equity firm founded in 2004 based inCleveland, Ohio. Investment strategy is focused on value creation opportunities with a concentration on mixed-use, retail, and for-rent multifamily projects. $75 million invested in 21 assets in 7 states and 15 cities valued at $575 million. Portfolio consists of 4,000 multi-family units and 750,000 sqf of commercial

space. $50 million commitment to ELR. Invested to date $14.4 million in 5 transactions

“Landmark’s platform & experience offers us an opportunity to invest in the multi-family space while minimizing the management & renvoation & construction risks often associated with value add transactions.”David St. Pierre Cofounder & President

29


Brookfield (BREOF Holdings LLC): is a well capitalized and sponsored real estate fund investing in commercial real estate opportunities throughout North America. BREOF was formed in 2004 and is based in Toronto, Canada.

BREOF’s sponsor is Brookfield Asset Management Inc. (NYSE: BAM). $100 billion in assets, $32 billion of which are in commercial real estate sector. 125 million sq ft, centered in New York, Toronto, Washington DC,

Boston, Calgary, London UK & Australia; Over 36 retail shopping malls in Australia, the UK and Brazil $5 billion of residential master-planned land developments in North

America & two markets in South America


30


BROEF portfolio value – over $ 2 billion consists of 2,201 multi-family units and 10.6M sqf of commercial real estate

Invested $4.8 million in the first transaction with ELR. $50 million commitment to ELR.

“Landmark offers us a strong experienced platform in the growth markets of the Southeast. Their access to below market acquisition opportunities has been unparalleled.”Steve Ganeless, Brookfield


31


ELR Owned Previous Principals Portfolio Total

Number of Assets: 20 15 35Number of Units Owned: 5,992 4,558 10,550Total Acquisition Price: $370,000,000 $276,000,000 $646,000,000Total Equity Invested: $103,700,000 $83,000,000 $190,300,000

Current Portfolio – Aggregate

32


Projected Future Growth ELR Owned

Year Projected # Units Acquired Cumulative # of Units

Current – Sept 2010 5,992Remaining 2010 1,000 6,9922011 3,500 10,4922012 3,500 13,9922013 3,500 17,4922014 3,500 20,992

33


Current Portfolio – Detailed Breakdown

34

Occupancy % for Estimate Purchased in 2008 Units 31.12.08 31.12.09 31.3.10 30.6.10 30.9.10 31.12.11

Baymeadows 352 91.5% 89.5% 88.4% 88.9% 92.9%

Altamonte 232 93.5% 88.8% 96.1% 97.0% 95.7%

EL conquistador 166 88.0% 96.4% 93.4% 91.6% 92.2%

Lakeside North 168 90.5% 92.9% 91.7% 95.8% 92.9%

Woodberry 313 88.2% 94.9% 95.8% 90.4% 92.0%

Meredith 297 89.2% 96.3% 96.6% 98.7% 99.0%

Bear Creek 120 94.2% 92.5% 95.8% 87.5% 95.8%

Bedford 238 95.4% 92.4% 98.7% 92.4% 92.4%

Cottnwood 200 94.5% 92.5% 91.0% 95.5% 96.0%

Pear Ridge 242 94.2% 94.6% 94.6% 95.0% 97.5%

2,328 91.7% 93.0% 94.1% 93.3% 94.6% 95.0%


Current Portfolio – Detailed Breakdown

35

Occupancy % for Estimate Purchased in 2009 Units 31.12.08 31.12.09 31.3.10 30.6.10 30.9.10 31.12.11

Water Point 198 22.7% 47.0% 76.3% 89.4% 93.0%

Three Palms 438 86.5% 94.7% 96.4% 94.1% 95.4%

Timber Trace 989 80.0% 80.7% 80.4% 82.4% 93.0%

1,625 74.8% 80.4% 84.2% 86.4% 93.6%

Purchased in 2010 Units 31.12.08 31.12.09 31.3.10 30.6.10 30.9.10 31.12.11

Grand Meadow 212 35.4% 48.1% 93.0%

Ridgewood Preserve 184 65.8% 75.5% 93.0%

Heritage Fields 240 35.0% 47.1% 93.0%

Manchester Park 126 48.4% 34.9% 93.0%

Oxford Ridge 492 89.4% 93.0%

Gwinnett Crossing 564 49.8% 92.0%

Fontana Apartments 221 0.0% 58.0%

2,039 49.1% 54.9% 88.9%

5,992


Historical Forward FFO MultiplesREIT Universe

12.0x12.7x11.3x13.9x13.1xIndustrial

10.2x10.9x8.7x10.4x13.1xMall

12.5x

13.9x

13.5x

13.4x

16.7x

1 Yr Avg.

12.6x

15.8x

17.1x

18.8x

19.3x

Current

13.9x

13.0x

13.4x

13.3x

16.2x

5 Yr Avg.

11.9x

12.7x

11.9x

11.8x

14.2x

3 Yr Avg.

Multiples

10 Yr Avg.

Multifamily 14.2x

Shopping Center 12.0x

All REITs 12.1x

Health Care 11.5x

Office 12.2x

2010 Forward FFO Multiples (1)

1. Source : FacetSet as of 10/12/2010

36


Current Portfolio – NOI

37

Estimate Book Value Implied Cap Rate

Purchased in 2008 Units 2008 2009 2010 2011

Baymeadows 352 - 1,415 1,601 1,764 25,100 7.03%

Altamonte 232 298 921 951 1,032 15,470 6.67%

EL conquistador 166 188 511 596 672 8,530 7.88%

Lakeside North 168 139 626 784 858 11,400 7.53%

Woodberry 313 747 1,609 1,657 1,752 25,640 6.83%

Meredith 297 500 1,071 1,394 1,488 18,850 7.89%

Bear Creek 120 160 331 423 462 5,740 8.05%

Bedford 238 399 780 814 870 11,930 7.29%

Cottnwood 200 241 555 594 612 9,300 6.58%

Pear Ridge 242 434 934 968 1,014 15,300 6.63%

2,328 3,105 8,753 9,782 10,524

Elco Landmark LLC (NOI K-$)


Current Portfolio – NOI

38

Estimate Book Value Implied Cap Rate


Water Point 198 (293) 639 1,416 20,830 6.80%

Three Palms 438 789 2,275 2,418 30,200 8.01%

Timber Trace 989 541 3,061 3,684 51,820 7.11%

1,625 1,037 5,975 7,518


Grand Meadow 212 (40) 375

Ridgewood Preserve 184 125 345

Heritage Fields 240 (81) 172

Manchester Park 126 6 124

Oxford Ridge 492 1,419 2,880 40,700 7.08%

Gwinnett Crossing 564 202 1,068

Fontana Apartments 221 (162) 25

2,039 1,469 4,989

5,992

Total NOI K-$ 3,105 9,790 17,226 23,031

Elco Landmark LLC (NOI K-$)


ELR Management Company – Overview

ELR is a hands on management company which provides the following services for ELR owned (fully or partially) assets as well as those owned by third parties: (Currently manages 5,992 ELR owned units and 4,717 owned by third parties) Management of deal-flow leveraging its extensive knowledge of the various

industry plays (includes a proven ability to source off market transactions) Ability to plan and implement the renovation necessary for each asset post

acquisition Training, HR, Marketing & Operations Uses State of the art technology for leasing and management functions Financial Reporting Enjoys economies of scale (current head count of 280 employees of which 20

are corporate headquarters). Current structure can support growth with little additional expenses

39


Business model: Acquisition Fee - 1% of acquisition costs Management Fee - 4% of annual revenue per managed asset Construction Fee - 5% of renovation costs Carry Fee - 20% to 30% over preferred return

ELR Management Company – Economics

-1,0000

1,0002,000

3,0004,000

5,0006,000

7,000

4% Management Fee

Net profit of MGMT

US$K

Break-even at 7,500 units

40

7,2820 7,500 11,946 15,446 18,946 22,446 UNITS


Selective Sales for Buyers including: US & Foreign Funds, Growing smaller companies, Bulk portfolio buyers Private equity funds

REITS – public or private

Public Offering – exchange traded

Acquisition/Merger/Hedge Fund Acquisition/Roll up

Next Platform / Exit Strategy

41


Appendices

42


Joseph Lubeck, Chief Executive Officer, J.D. Joe Lubeck, founder of Landmark Residential is an expert in value added and distressed real estate repositioning; Joe has 35 years of experience in multifamily acquisitions, operations and disposals. As CEO, Joe oversees all aspects of ELR operations, from finance to property management. An honors graduate of Cornell University, Joe holds Juris Doctor Degree from Delaware Law School. Joe is active in numerous civic and charitable organizations, including AIPAC, Hillel, and The Cornell University Tower Club.

Elizabeth Truong, Chief Investment Officer, M.B.AMrs. Truong brings over 20 years of financial and management experience to the ELR Team. In the past six years with ELR she has closed over 45 deals valued at over $500 million. Her responsibilities are diversified and touch upon all aspects of the company including marketing, training, financial reporting, risk management, refinances and dispositions.

James Miller, Chief Financial Officer, M.B.A, CPAMr. Miller has over 22 years of accounting and finance experience. He is a key player in the day to day operations and financial management of the portfolio. He is also responsible for the accounting, financial and investor relations of the company. Prior to ELR Jim was the VP of Finance for WRH Income Properties Inc. a privately held $300 million multifamily holding company. He also served as Controller for Inacom Information Systems, which had annual revenues of $2 billion.

Joan Copeland – Executive Vice President of OperationsMrs. Copeland brings 25+ years of property management experience to ELR. Prior to joining our company she served as Vice President of Riverstone Residential Group, an 180,000 unit national management company and was responsible for numerous lease ups and managed various regions. As a Banyan associate, she served as Vice President overseeing 110 properties in Florida and Georgia (13,000+ units) and was a key member of the Senior Management team directing a staff of 400+ team members.

The ELR Team

43


50% -75% below replacement cost Purchase price 6% - 8%cap rates

$30k - $90kPurchase price per unit

$3,500 - $8,000 Renovation budget per unit

$600 - $800Rent per month

$80 - $240 Rental increase over 3 years

70%LTV of All In Costs

below 6.0%Fixed rate or floating rate

12 – 18 monthsComplete Renovation

24- 36 monthsStabilize property

36 monthsRefinance loan and pay down portion of the equity

6% - 8%Exit cap rates

Representative Transaction

44


Multi-family Sector Comparable Companies

45


Pointe Sienna was on the market for sale. When a potential buyer was unable to close, the broker contacted Landmark, which purchased the asset in November 2005. The owner had purchased the asset, renovated all interiors but neglected to renovate the exteriors. As a result, there was no curb appeal and the owners were unable to increase rents. Landmark immediately installed first class amenities by renovating the clubhouse, fitness center, pool pavement, and signage and by painting the buildings and landscaping. Landmark retiled the interiors and replaced carpets across the community. A bridge loan was put in place which was refinanced twelve months later into a Fannie Mae fixed rate loan. Pointe Sienna was sold in June 2007.

Case Study: Pointe Sienna, Jacksonville FL

Initial Income 1,896,000

Ending Income 2,292,000

Initial NOI 900,000

Ending NOI 1,284,000

Total Per UnitPurchase Price (260 units) 14.9 million 57,000

Rehab cost 950,000 3,654

Sale Price 19.8 million 76,250

Senior LTV 75%

Equity Gain 3.7 million

Investor IRR 41%

Operational Summary:Financial Summary:

46

Elco Landmark Residential48

Verandas was purchased directly from the owner in August 2005. The owners had sold to Landmark previously and were confident we could close quickly. The owner had held the asset for years and was unwilling to invest in necessary improvements to upgrade the property. Landmark implemented its standard turnaround program by renovating the clubhouse, fitness center, pool pavement, signage, and painting all buildings and landscaping. In addition, Landmark re-tiled every unit and replaced carpeting. Landmark assumed an existing loan that was schedule to mature within the year and refinanced it into a Fannie Mae fixed rate loan. Verandas was sold in July 2007.

Case Study: Verandas on the Green, Aiken GA

Initial Income 1,524,000

Ending Income 1,800,000

Initial NOI 852,000

Ending NOI 1,068,000

Total Per Unit

Purchase Price (222 units) $10.6 million 47,750

Rehab cost $1.2 million 5,300

Sale Price $14.2 million 63,963

Senior LTV 78%

Equity Gain 3.6 million

Investor IRR 35%


47


Pasadena Shore Club – closed on June 11, 2009The property is a five story structure located directly on the water. There are 198 units of which 90% have water views. The property was purchased by a condo developer who completed 40% of the renovations. Renovations included full interior upgrade with granite countertops, tile flooring and new appliances. No units were sold and property remains as one asset and was vacant. The lender, iStar, took back the property and we went under contract at $48,000 per unit and we received a re-trade down to $45,000 per unit. We put in $24,500 a unit for hard construction costs and $7,500 per unit in interest reserve. All in cost is $83,000 per unit. We completed renovations in 8 months and are currently at almost 90% occupied.

Asset is under contract to be sold at $21 million and should be closed before the end of the year.

Case Study: Pasadena, S. Pasadena, FL

Initial Income 0

Ending Income $2,478,000

Initial NOI 0

Ending NOI $1,455,000

Total Per Unit

Purchase Price (198 units) $9 million $45,455

Rehab cost $6.35 million $32,000

Sale Price to CLOSE by December: $21 million

Investor IRR 50%


48


“ In today’s market, we as a Bank continue to look for strong and proven sponsorship and strongly believe in Joe’s Leadership of Landmark. Landmark is one of the most respected multifamily organizations in FL. Joe and his skilled team have an excellent track record of identifying and executing upon opportunities for its investors and lenders.”- Keybank

“ We have great respect for Joe Lubeck and his organization and have no reluctance to recommend them for any business relationship.”- Drucker & Falk

“ Landmark Residential is one of the most respected multifamily organizations in the country. Joe Lubeck is one of the best property turn around specialists that I have worked with during my 23 yrs of experience. His staff has incredible energy and imagination. Landmark’s ability to communicate as a team leads to outstanding investment opportunities for Landmark, its equity partners and lenders.” - M&T Bank

49

References

Documents

ELCO LANDMARK RESIDENTIAL - TASE