Property Description. Introduction

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2 Property Description Introduction Potter-Taylor & Co. is forming a Limited Partnership to acquire and rehabilitate 1001 G Street, an existing office building located on the northeast corner of 10 th and G Streets in Sacramento, California. This project fits well into Potter-Taylor s goal of forming partnerships for acquisition of existing underutilized properties that are prime for redevelopment. Existing Property and Proposed Project Located on the northeast corner of 10 th and G Street, 1001 G Street is a 16,854 square foot office building constructed in The Subject Property is one block from the Sacramento County Gordon D. Schaber Court House, five blocks from the Federal Court house, seven blocks from the new Golden One sports and entertainment Center (under construction) and six blocks from the future soccer stadium. In addition 1001 G Street is six blocks from the City of Sacramento s intermodal facility offering ease of commute into the Bay Area via AmTrak New developments in the area include: The Creamery at Alkali Flat. This redevelopment of the former Crystal Cream and Butter Company site into 122 tri-level, contemporary homes and approximately 8.5 acres in the area between D, E, 10th and 11th streets. The Golden One Sports and Entertainment Center. The project encompasses four city blocks right in the heart of downtown and is believed to be a major catalyst for development in the surrounding area and in the entire region. The arena itself is an indoor multi-use facility that will accommodate sporting and top entertainment events such as professional and collegiate sports, concerts, ice shows, indoor rodeo, trade shows, large graduations, family shows, and other indoor entertainment. Sacramento s major league soccer stadium: A new 25,000 seat stadium intended to be the kickoff of the redevelopment of the prior Sacramento rail yards New Sacramento Criminal Courthouse. To be located northwest corner of 7 th and H, the new building will provide 44-courtroom criminal courthouse. Once completed, all civil functions will be consolidated into the Schaber Courthouse. Potter-Taylor & Co s plan is to rehabilitate and update the existing building by updating the office building such that it is competitive with the other office opportunities in the area.

3 Project Description Opportunity This is an opportunity to purchase and rehabilitate an existing under-utilized office project in a mature market area. Current tenants include: Poswell White and Brelsford, Attorneys at Law Jennifer Cutler, Attorney at Law and Mark Swanson, Attorney at Law Attorney Firm Sam Tarpin Attorneys dealing in Auto Accidents Wrongful Death Premises Liability Catastrophic Injuries Sexual Harassment Birth Defects Medical Malpractice., Poswell White have occupied Suite 399 since Poswell White and Brelsford recently entered into a 5 year extension to their lease Previously with Poswell, White, Brelsford and Cutler; Ms. Cutler is now occupy Suite 201 with Mark Swanson who is also a personal injury attorney. A new 5 year extension is being negotiated for this space with minimal improvements of paint and carpet being provided to the tenant. A five year lease is in negotiation with the 6 independent attorneys to operate in a close-knit unit for Suite 200. This group of personal injury attorneys, which have been practicing in this fashion for the last 15 years, is relocating from the Travelers Hotel Building. Mr. Tarpin, the original developer and current owner of the building, will be leasing back Suite 300 on a month to month basis. Potter-Taylor & Co. s plan is to upgrade the building by making the following changes: Update the G Street entry by replacing the existing noncompliant ramp with compliant stairs and an American with Disability Act ( ADA ) compliant ramp Remove existing deteriorated redwood sign with a modern sign. Update the first floor hall by replacing all tile flooring in the entry way and first floor common areas

4 Construct new glass entryways into Suites 100 and 101 and add glass walls into each suites conference room such to open up the ground floor hallways. These improvements would be consistent to the entry doors on suites 200 and 399 Update and modify each restroom, of which there are two per floor, by converting them from non-compliant multi user restrooms to ADA compliant single user restrooms Add an auto opener on the rear door making it ADA compliant Convert two to three parking spaces into two ADA compliant handicapped parking spaces in the rear parking lot Modify the two existing stair cases to make them comply with current building code Make modifications to the existing elevator such that it will comply with ADA In addition to the improvements listed above, Potter-Taylor & Co. will convert Suite 100 into an executive office suite providing attorneys in need of a single office in close proximity to the Sacramento Courthouse. In discussing the needs of users in the market surrounding the courthouse, Potter-Taylor & Co. has learned that some owners have been extremely successful in leasing out spaces to single office users at a premium. These owners are experiencing a one year waiting list on potential tenants. Potter-Taylor & Co. plans on building out Suite 100 in such a fashion. With exterior glass windows in each office, high grade carpeting, a conference room complete with video conferencing, reception area and break room; Potter-Taylor will provide a San Francisco like experience that many attorneys are looking for. Once the improvements to Suites 200 and 100 have been completed and the tenants have moved in the building will enjoy an occupancy of 12,887 square feet or 82%. At that time, the building will have been fully rehabilitated and the remaining space will be ready for the final tenant.

5 Financial Information Financing Potter-Taylor & Co. is in the process of securing financing along the lines of the Loan Commitment Request As discussed above, the prospective new tenant for Suite 200 is willing and able to enter into a lease, provided its new occupancy at the project can be accomplished within a specified preexisting time frame. That time frame is shorter than that needed to complete the process of funding an anticipated bank purchase money loan in the amount of $2,480, for the project. In order to secure that lease and to initiate necessary tenant improvements for that prospective tenant in accordance with its timing needs, Potter-Taylor & Co. has negotiated as part of the purchase and sale agreement a seller carry back note in the amount of $2,480, that will allow the escrow to close earlier than the funding of the bank loan. While is anticipated that this note will be needed for no more than thirty (30) days, Potter-Taylor & Co. has secured a term of five (5) months. Entitlements No entitlements are necessary, the City of Sacramento ( has confirmed that the property is zoned RD Residential Office and the proposed project is in conformity with both the zoning and use code. Environmental Potter-Taylor & Co. will be obtaining a Phase I Environmental Assessment Report, and Asbestos Survey and a Lead based paint survey through Taber Environmental Consulting. A copy of the report will be made available to all investors prior to the close of escrow. Financial Analysis and Investment The investors as Class A Limited Partners will be entitled to an eight percent (8%) preferred return on their investment, plus 75% of any excess cash flow above an annualized eight percent (8%) return. The General Partner, Taylor Building Managers LLC (a Potter-Taylor & Co. affiliate) and the Taylor Wittlake Family Revocable Trust, as a Class B Limited Partner will receive the other 25% of the excess cash flow. In the event of a sale or refinance, the Class A Limited Partners first receive back all of the unpaid preferred return, second their initial capital distribution, and third 75% of the profits with the General Partner and Class B Limited Partners receiving the remaining 25% of the profits. The life of the investment is intended to be between nine and ten years unless market conditions dictate otherwise. Based upon the attached projections, over the life of the investment the Class A Limited Partners should receive an average cash on cash return on their investment of approximately eleven percent (11%) to twelve present (12%) starting the second year with an estimated seventeen percent (17%) to eighteen percent (18%) internal rate of return if sold in Year 10 based upon the assumptions set forth herein. A greater internal rate of return could be obtained if the project is sold sooner. The exit strategy is to acquire, develop and hold the property for sale unless the market conditions dictate otherwise. In evaluating the present and potential future value of the project, Potter-Taylor & Co. looked at both a conservative valuation of the project based upon a conservative capitalization rate (expected

6 rate of return) and an aggressive capitalization rate. Please understand that the information contained in this letter, together with the enclosed financial information, is preliminary and intended only as an introduction to the project. We are in the process of preparing a more comprehensive project summary, detailed financial projections, and governing documents for the ownership entity. At your request, we will provide those items to you for your review and consideration when they are ready for distribution. As with any investment of this nature, you should consult with your independent legal and tax advisors regarding such material before making a decision to participate in this project. We are inviting you to explore a possible investment in this project due to our pre-existing relationship with you; we will not be offering investments by means of general advertising or solicitation. Accordingly, with your approval, we will be contacting you to discuss this project and determine if you have interest in this investment. We have 23 units of $50,000 available for a total investment of $1,150,000 half units can be purchased providing for a minimum investment of $25,000. Potter-Taylor & Co. is accepting commitments from its investors with an anticipated close date of April 1, 2016 Please see our website at for this document, its contents, and the environmental documents available for individual download. If you have any questions about the project, please feel free to contact me by phone or . Thank you, Timothy J. Taylor Cell: tim.taylor@potter-taylor.com

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