f r e s n o c o u n t y a s s o c i a t i o n g e r d i n g e d l e n g r e e n c i t i e s i i i n o v e m b e r 4,

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1 f r e s n o c o u n t y e m p l oy e e s r e t i r e m e n t a s s o c i a t i o n g e r d i n g e d l e n g r e e n c i t i e s i i i n o v e m b e r 4,

2 1 f i r m ov e rv i e w 2 f u n d i n v e s t m e n t s t r at egy firm overview 3 4 g e r d i n g e d l e n c o m p et i t i v e a d v a n ta g e t r a c k r ec o r d 5 f u n d i i i t e r m s a n d i n v e s t m e n t p i p e l i n e 6 s u s ta i n a b i l i t y & c o m m u n i t y i m p a c t 2

3 firm overview full-service real estate investment, development, and property management firm SEC Registered 1 Investment Manager with three co-mingled institutional, value add funds and one separately managed institutional core account Founded Investment Management Practice in 2009 Prior to that, the Firm was a Portland, Oregon based development company for 15 years with deep expertise in urban office and residential development Experienced management team with long tenure with firm and industry 1 This registration does not imply a specific level of expertise, skill or training. This registration does not imply a recommendation by the United States Securities and Exchange Commission or by any state securities authority. 2 Based on gross assets of Green Cities I, II, III and separate managed account and includes assets that have been sold and no longer managed. 3

4 full service, fully integrated firm gerding elden investment management gerding edlen development gerding edlen property management Separate Managed Accounts Gerding Edlen Green Cities I, LP Gerding Edlen Green Cities II, LP Gerding Edlen Green Cities III, LP 1 Gerding Edlen Investment Management is a separately owned entity 2 Gerding Edlen Development, Property Management and Sustainable Solutions is owned by GEDI, Inc. Experienced Developer in Office, Apartment and Mixed-use Properties Extensive Development Expertise in Sustainability with over 60 LEED Certified Buildings Built 4 Apartment Property Management Asset Management of Apartment and Office Properties

5 principals management expertise kelly saito o Oversees the Firm s acquisitions, development and underwriting of all properties and projects o 20 years of experience in commercial real estate o Joined Firm in 1996 o Member of Gerding Edlen Green Cities III Investment Committee molly bordonaro o Oversees the Firm s investment management and asset management o More than 17 years of commercial real estate o Joined Gerding Edlen in 2009 o Member of Gerding Edlen Green Cities III Investment Committee mark Edlen o Founder of Gerding Edlen Development in 1996 o 32 years of experience in commercial real estate o Member of Gerding Edlen Green Cities III Investment Committee roger krage o Oversees the Firm s legal, accounting and finance including debt financing, compliance and legal structures o 36 years of experience o Joined Gerding Edlen in 2003 o Member of Gerding Edlen Green Cities III Investment Committee strong team beyond main principals this with long tenure 5 at firm

6 1 f i r m ov e r v i e w 2 f u n d i n v e s t m e n t s t r at eg y fund investment strategy 3 4 g e r d i n g e d l e n c o m p et i t i v e a d v a n ta g e t r a c k r ec o r d 5 f u n d i i i t e r m s a n d i n v e s t m e n t p i p e l i n e 6 s u s ta i n a b i l i t y & c o m m u n i t y i m p a c t 6

7 green cities iii, lp targeting growth markets Niche focus on high growth markets: o Seattle, Portland, San Francisco, Los Angeles, Chicago and Boston Youth Magnet cities with disproportionately high growth of the Millennial population cohort Markets with comparatively much stronger economic growth Markets that retain values in recessions or downturns due to consistent limited supply and constraints to over building Central business district, urban infill properties (demographic shift to cities) Transit-oriented properties 7

8 green cities iii, lp i n v est m ent st r at egy : u r b a n m a r kets w i t h g r ow i n g d emand Rebirth of urban living and working : Millennials prefer urban living and working with entertainment and nightlife attractions convenient to work and residences 2 Other generations and companies are following to the urban core Renter population is growing : Millennial cohort is approximately 80 million, the largest generation in U.S. history, surpassing the baby boomers by more than 5 million 1 Millennials are preferring to rent: they are more transient, marrying later and desiring the flexibility and financial benefits of renting 1 ULI Generation Y: America's New Housing Wave 2 ULI Emerging Trends

9 green cities iii, lp investment strategy: targeting supply constrained markets The Fund s Targeted markets have outperformed national rent growth and cap rates due to limited supply 1 Target markets with strong government, regulatory barriers for new development which limit future supply Historical look back on targeted markets demonstrate consistent low cap rates and rental market strength including through recessions due to the lack of overbuilding or oversupply in each market 1 US National Target Markets Historical Cap Rates 1 Average Cap Rate % Gerding Edlen targeted markets show that vacancy rates in the next four years are predicted to remain at or below historic levels and below the 5% level which is considered an owners market. 2 Chicago Seatle Boston San Francisco 5.1% 5.1% 4.9% 4.6% 1 Rent growth data from REIS and Cap Rate data compiled from CoStar, CBRE-EA, Real Capital Analytics and Gerding Edlen research 2 REIS and Gerding Edlen Investment Management 9 Los Angeles 5.0% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0%

10 green cities iii, lp apart m ent i n v est m ent st r at egy retrofit, reposition, manage and/or lease up urban apartments new urban apartment development Purchase under-managed or poorly-capitalized apartments, under leased or under performing apartment properties and retrofit, manage or lease for a value gain Retrofit and/or add capital improvements with Gerding Edlen s strong expertise in asset and construction management including sustainable features Target urban markets with long-term rental demand and barriers to entry to protect supply Take advantage of Gerding Edlen s apartment development expertise to develop in markets where demographic growth is outpacing current and future supply Capitalize on dislocations in market pricing of urban land by acquiring off market opportunities on option or as distressed Utilize Gerding Edlen s design and value add engineering expertise to design quality apartments with smaller units and greater amenities to outperform the market Target urban markets with long-term rental demand and barriers to entry to protect supply Build and Stabilize new apartment properties in Class A urban locations for less than current market value 10

11 green cities iii, lp o f f i c e i n v est m ent st r at egy value add office Purchase value add office properties in strong locations that are undervalued on a price per square foot basis and well below replacement costs Reposition properties with capital and Gerding Edlen s expertise on retrofitting, management, marketing and leasing Target markets with employment growth and historical office strength Execute strategy to update common areas of the building and improve the building amenities. Renovate specific office space to make more creative, open and better designed for today s office renter Turn office leases to capture higher market rents and greater value for renovated building and office space 11

12 green cities iii, lp investment strategy: investing and managing better performing assets that meet renter s demand Understanding the Demand for: Properties that are sustainable, reducing energy and water use and removing toxins from buildings Properties that foster collaboration and community with building spaces that increase interaction among residents and tenants Properties that support alternative transportation Properties that incorporate art, design and landscaping to inspire tenants and renters Properties and management that reflect strong values and support the surrounding neighborhoods and communities 64% of renters are willing to pay extra for a green apartment Source: Strata Research Green Apartment Offerings Wave II Office rental premium of approximately 5% for LEED certification and 4% for Energy Star certification Source: Franz Fuerst, Measuring the Effects of Environmental Certification on Office Values, Real Estate Economics,

13 1 f i r m ov e r v i e w 2 f u n d i n v e s t m e n t s t r at egy gerding edlen competitive advantage 3 4 G E R D I N G E DLEN CO M P ET I T I V E A DVA N TAG E t r a c k r ec o r d 5 f u n d i i i t e r m s a n d i n v e s t m e n t p i p e l i n e 6 s u s ta i n a b i l i t y & c o m m u n i t y i m p a c t 13

14 deal sourcing and acquisition expertise Focus on fewer markets with deeper knowledge and research in those markets Source deals ourselves (not through JV partnerships) to lower cost basis and increase returns to our investors Source off-market deals through strong partnerships with industry professionals and owners in those markets, driving better cost basis for our investors Experts in selecting neighborhoods that are growing in demand Over 2/3 of Fund I and Fund II deals were sourced offmarket adding value by purchasing land or properties at a low cost basis driving immediate value for our investors 14

15 in-house research Stronger and better research and market knowledge allows our properties to drive rents and NOI to their optimal values Dedicated research team tracking all competitive properties, potential development sites and sales and rental comps In house research provides thorough knowledge for tracking and sourcing deals, including off-market opportunities In house research provides real rental comps in each market to allow for accurate underwriting All in house research is updated on a continual basis and marked against third party research sources 15

16 in-house development expertise Capable of executing development or retrofit opportunities in-house without expensive JV partner splits Leverage in house development knowledge to accurately and quickly underwrite opportunities that require construction or retrofit Deep experience in entitlement and permitting processes where necessary Uniquely incorporate sustainable, modern and unique design into all properties to meet the preference of today s renters and differentiate our product in the marketplace Utilize 100% union contractors and subs 16

17 in house asset and property management Significant marketing expertise in identifying optimal communications channels to position, market and lease properties for their optimal leasing rates Unique management with high degree of customer service which increases retention and rental rates Enhance overall value of properties through efficient management systems Expertise in marketing and communicating sustainability and community within our properties externally and internally to drive additional value in our assets 17

18 1 f i r m ov e r v i e w 2 f u n d i n v e s t m e n t s t r at egy track record 3 4 g e r d i n g e d l e n c o m p et i t i v e a d v a n ta g e T R AC K R ECO R D 5 f u n d i i i t e r m s a n d i n v e s t m e n t p i p e l i n e 6 s u s ta i n a b i l i t y & c o m m u n i t y i m p a c t 18

19 green cities i, lp overview $183 M close Ended Value Add Invested in 8 projects o 2 West Los Angeles o 2 San Francisco o 2 Boston o 2 Seattle e t t a, s a n f r a n c i s c o All Apartments (New Development or Retrofit) o 6 properties sold o 1 property in operation o Last project complete and currently in lease up o n a, b o s t o n

20 green cities i, lp projected gross property level returns 20

21 green cities ii, lp overview $234 M Close Ended Value Add Invested in 7 properties o 1 San Francisco o 2 Seattle o 2 Boston o 2 Chicago t r o y b o s t o n, b o s t o n 6 Apartments (New Development) and 1 Office (Reposition) o 1 property sold o Office property in Seattle common area retrofit completed and fully leased and under contract o 2 apartment properties completed and leasing o 2 apartment properties under construction o 1 apartment property in pre-development stage expected to begin construction Q j o n e s c h i c a g o, c h i c a g o

22 green cities ii, lp projected return analysis 22

23 green cities ii, lp / sample investment troy boston 275 albany BOS TON, MA NEW CONS TRUCTION APARTMENTS P R O J E CTED M U LT I P L E : 1. 8% P ROJECTED I RR: % I R R 378-unit apartment development Purchased off market via an option until entailments were complete Well located opportunity in central Boston CBD served by transit and at the nexus of established neighborhoods Redesigned entitled site to increase number of units greatly reducing the per door acquisition price and increasing underwritten returns The project targeted LEED Gold and look to incorporate energy efficiency and water efficiency features as well as a co-generation system for on-site power generation Completed in February 2015 At current lease up pace will achieve stabilization three months ahead of schedule with rents above proforma 23

24 green cities ii, lp / sample investment dexter horton S EATTLE, WA VALUE - ADD OFFICE P R O J E CTED M U LT I P L E : 2. 3X P ROJECTED I RR: % Fund II purchased the Dexter Horton Building a 336,371 sq ft office building in Seattle, WA Opportunity to acquire a unique office building at an attractive basis ($232 per rentable s.f.) well below replacement costs within the Seattle CBD Property was awarded LEED Gold certification 2010 Renovated all common areas of the building to create bike room, lockers, rooftop and penthouse amenity spaces, conference room and dog run. Updated hallways, lobby and elevators. Turned 34% of the leases for generous rent increases, and in most cases, through value add newly renovated, creative office space. In contract to close for an IRR of 41.2% and equity multiple of 2.3x 24

25 1 f i r m ov e r v i e w 2 f u n d i n v e s t m e n t s t r at egy fund iii investment pipeline 3 4 g e r d i n g e d l e n c o m p et i t i v e a d v a n ta g e t r a c k r ec o r d 5 F U N D III T E R M S A N D I N V E ST M E N T P I P E L I N E 6 s u s ta i n a b i l i t y & c o m m u n i t y i m p a c t 25

26 green cities iii, lp f u n d o f f ering $350 million value-add fund with $400 million cap First Close $85 million on February 18 th with $200 million approved for second close in October 7 year, closed-end fund 36 month investment period that began in February, % target net IRR to investors 1 Maximum 60% leverage portfolio wide 1.5% Management Fee 8% hurdle with no catch up, 80%/20% split to LP/GP after 8% Strong investor communication and reporting, Annual third party audits, Advisory Committee of LP s 1 There can be no assurance that the Fund will achieve its return objectives. 26

27 green cities iii, lp 156 n jefferson chicago, illinois Gerding Edlen Green Cities III secured an off-market land site entitled for 199 units in the heart of Chicago s CBD. Purchased land for $41,000/per unit. Market value in Chicago s West Loop is $70,000/per unit. The site is located in the West Loop Gateway submarket which is deep in tech jobs including Google, Gogo, Twitter, Uber, Motorala Mobility, WeWork and more. West Loop is becoming the cool/funky as well as the professional/established neighborhood to live. Construction will begin in 2015, complete in 18 months, with stabilization toward end of 2017/beginning of Deliver to market for less than existing values. Yield at stabilization 6.54% vs. market value of 4% capitalization rate. Underwritten IRR of 21% and Equity Multiple of 2.6x 27

28 green cities iii, lp 1700 webster street OAK LAND, CA DEV ELOPMENT S TART DATE: 2016 EX PECTED COMPLETION: 2018 A PA R T M E N T / G R O U N D F L O O R R E TA I L Gerding Edlen has entered into an option to purchase a 24,000 square foot development site in downtown Oakland. The project will consist of 230 units and 8,000 square feet of retail The project was sourced off-market and presents a unique opportunity to invest in the highly competitive supply constrained bay area market at an attractive land cost. Gerding Edlen will close on the land upon receiving entitlement approval for $24,000/door (well below market value). Current market is $50,000-$80,000/door. The site is located in the trendy Lake Merritt neighborhood of downtown Oakland with lots of amenities including Whole Foods and Trader Joes within walking distance, the BART (Bay Area Rapid Transit) station within two blocks, which provides a 10 minute commute to the CBD of San Francisco. Uber just announced that it will move its corporate headquarters one block from the site. Monthly rents will be well below San Francisco market rents and will create an affordable option for Class A, trendy living in the Bay Area Underwritten IRR of 16% and Equity Multiple of 1.8x 28

29 green cities iii, lp 200 w adams C H I C A G O, IL REPOSITION O F F I C E S TART DATE: 2016 EX PECTED COMPLETION: 2020 Gerding Edlen Green Cities III is in contract for a 32-story, office building, in the heart of Chicago s West Loop district and adjacent to an L stop Built in 1985 the LEED Gold building is 91% leased to high-quality tenants, including the United States Government (the GSA ) who has 29% of the building Purchase price of $243/SF, well below an estimated replacement cost of $450/SF 40% of the building s leases roll to market in the first three years In place rents are in the high-teens to low-twenties on a net basis (average $20/SF vs. market rents that are over 10% more) Market rates are mid-twenties, allowing for a mark-to-market opportunity Execute improvements to common area spaces and tenant amenity spaces; market ready available spaces Manager will roll 50% of the building in three years, increasing NOI by 44% by leasing at today s market rents and improving expenses and building efficiencies Underwritten IRR of 15% and Equity Multiple of 1.7x 29

30 1 f i r m ov e r v i e w 2 f u n d i n v e s t m e n t s t r at egy sustainability & community impact 3 4 g e r d i n g e d l e n c o m p et i t i v e a d v a n ta g e t r a c k r ec o r d 5 f u n d i i i t e r m s a n d i n v e s t m e n t p i p e l i n e 6 S U STA I N A B I L I T Y & CO M M U N I T Y I M PACT 30

31 environmental & community added returns to investors green cities fund i environmental and community impact report portfolio wide performance 31

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33 green cities iii, lp important information regarding this presentation This presentation (this Presentation ) is provided for informational purposes only and is intended solely for the person to whom it is delivered. This Presentation is confidential and may not be reproduced or distributed without the express written consent of Gerding Edlen Investment Management. This Presentation does not constitute an offer to sell or the solicitation of an offer to purchase any securities of Gerding Edlen Green Cities III, L.P. (the Fund ). Any such offer or solicitation may only be made by means of delivery of the confidential offering memorandum of the Fund (as supplemented from time to time, the Memorandum ) which will contain material information not included herein and shall supersede, amend and supplement this document in its entirety. This Presentation may contain material non-public information and should not be construed as investment advice or a recommendation to purchase or sell any particular security. Information contained in this Presentation is accurate only as of its date, regardless of the time of delivery or of any investment, and does not purport to be complete. This Presentation also contains third party material that does not necessarily represent the opinion of Gerding Edlen. Gerding Edlen is not responsible for the accuracy of any third party information provided in 33 this presentation and expressly disclaims any liability for the use of it. Investors should have the financial ability and willingness to accept the financial and risk characteristics of an investment in the Fund. An investor should review the Memorandum, conduct such investigations and evaluation as it deems necessary or appropriate and consult its own legal, accounting, tax and other advisors in order to make an independent determination of the suitability and consequences of an investment in the Fund. Performance of the Fund s investments may be volatile, and Fund investors may experience results that differ materially from those shown herein. There can be no assurance that estimated returns or projections can be realized or that actual returns or results will not be materially lower or inferior than those estimated herein. Investors may lose all or a substantial portion of their investment in the Fund. Management fees and other Fund expenses will reduce the Fund s returns. In considering the prior performance information contained in this Presentation, investors should bear in mind that past performance is not necessarily indicative of future results, and there can be no assurance that the Fund will achieve comparable results.