Real Estate Advisory Services. Cost Management. Project Management. Cost Segregation

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1 Real Estate Advisory Services Cost Management Project Management Cost Segregation 161 N. Clark St. Suite 2050 Chicago, IL E. Kilbourn Ave. Suite 565 Milwaukee, WI Ottawa Ave. NW Suite 230 Grand Rapids, MI

2 The Concord Group has been providing Real Estate Advisory Services, Project Management, Construction Cost Management and Cost Segregation services to a wide range of clients since Our extensive professional experience and knowledge enables us to clearly define objectives and establish controls to keep all phases of a construction project on task, on budget and on schedule. With offices in Chicago, IL, Milwaukee, WI and Grand Rapids, MI, The Concord Group has built a reputation for delivering high quality, accurate and timely work for our clients that include architectural / engineering firms, healthcare institutions, governmental agencies and other institutional and commercial property development clients. The Concord Group offers complete Construction Loan Monitoring services for lending institutions, municipalities and real estate investors nationwide. Our services verify that the initial budget is sufficient, that all project documentation is in place and that the contract values and final cost are substantiated. We also provide complete Property Condition Assessments, in accordance with ASTM standards, which document the current condition of a property and an estimate of the probable cost to restore it to usable condition for its intended use. We provide a full range of integrated consulting services for real estate investments. Whether for a lender, a developer or equity investor, our services protect their interests and assist in realizing the maximum benefit from real estate investment or financing. We provide these services from project inception through close-out and completion. This comprehensive review process provides an early opportunity to identify and eliminate issues before they become problems during construction. We also provide Cost Segregation studies which allows commercial property owners to accelerate the depreciation of their property thus providing increased cash flow to their business. Our experience in Construction Cost Estimating and as a Project Manager provides us with the skills and background necessary to provide loan review services. We have provided these services to hundreds of clients on thousands of projects. We provide Project Management for all phases of our clients projects. We assist in project feasibility planning, selection of project delivery method and recommend prudent strategies for a successful project outcome. Our Cost Management services form the foundation of all of the services that we offer. Our roots lie in the discipline of Quantity Surveying which is focused on determining the correct value of construction projects.

3 construction loan monitoring SERVICES The Concord Group offers complete Construction Loan Monitoring services for financial institutions, municipalities and real estate investors nationwide. Our services verify for our clients that project documentation and costs are complete and sufficient. We provide a full range of integrated consulting services for real estate investments. Whether for a lender, a developer or equity investor, our services protect those interests and assist in realizing the maximum benefit from real estate investment or financing. We provide these services from early project concept development through close-out and occupancy. This comprehensive review process provides an early opportunity to identify and eliminate issues before they become problems during construction. Services provided typically include the following, but can be tailored to the precise needs and desires of each individual client: Develop, implement and update construction loan monitoring policies and procedures. Review construction drawings and specifications. Review budgets and schedules for accuracy and completion. Review proposed contracts for both design and construction. Review environmental, wetlands, zoning and building permit approvals. Prepare a preliminary budget estimate of construction costs and compare to borrower s. Prepare a written report on findings and recommend corrective actions where appropriate. Prepare a comparative Guaranteed Maximum Price (GMP) or 100% Bid Documents estimate and reconcile with contractor s GMP or Lump Sum bid. Assist in management of the construction bidding process and review contractor s subcontract awards. Monthly site visits to confirm progress and quality of work and to evaluate the reasonableness of the current month s payment application and confirm prior month s approved distributions. Review and make recommendations for payments for all project related costs, such as design fees, specialty consultants fees, etc. Evaluate and make recommendations regarding the reasonableness of change order requests, including adjustments of cost and schedule as they relate to the requested change order. Prepare a detailed monthly report based on on-site observations and a review of all current project documents including financial status of the project. Prepare final project close-out report confirming compliance by owner, contractor and architect/ engineer with all contractual obligations and confirmation that all of the projects financial and regulatory approval requirements have been satisfied. Prepare a final accounting for the project.

4 property condition assessment (PCA) SERVICES The Concord Group offers complete Property Condition Assessment (PCA) services in accordance with ASTM standards for property owners and real estate investors nationwide. Our objective is to assess and document the condition of the property and to prepare an accurate cost estimate of the efforts necessary to restore the property to a usable condition for its intended use. The PCA is a valuable tool for lenders and investors before either acquisition or disposition of real property. The process consists of a visual and non-destructive assessment of the main components of the building. The report includes a description of the existing physical components, and a detailed analysis of the current conditions in need of repair. The associated repair costs are tabulated in immediate, five and ten year projections of anticipated major capital costs which is documented in a report that includes extensive documentation. Services provided typically include the following, but can be tailored to the precise needs and desires of each individual client: Preparatory Tasks Inquiries to the local Building Department, Zoning Department and Fire Department. Review of readily available construction documents. Interview of individuals designated as knowledgeable about the site and related improvements. Review of past and current significant Capital Improvement Projects. Visual observations of the property s components such as: site development; building exterior and interior; building structure; mechanical; electrical and plumbing systems; conveyance, life safety/ fire protection systems; and general ADA compliance. Report Compilation Description of the facility, amenities and site. Description of the observed construction deficiencies and repair/replacement recommendations. Prepare the Immediate Repairs Cost Estimate. Prepare the Replacement Reserves Cost Estimate. Provide a recommendation of further studies (Roof, Structural, Environmental Systems) as necessary. Prepare photographic documentation.

5 Cost Segregation Studies A Cost Segregation Study that is based on a sound cost engineering analysis of your property combined with a focused tax analysis will allow you to accelerate depreciation from the normal 39 or 27.5 year schedule to as few as 15, 7 or even 5 years and will improve your cash flow. The reason we accelerate depreciation is simple - to increase cash flow in the early years of ownership. Additional depreciation offsets income to provide federal tax relief which equates to increased cash flow. This improved cash flow can then be used to help grow the business. To accomplish this you need a thorough engineering analysis that meets all IRS standards based on real cost estimating knowledge and skills. The team that performs this analysis needs to understand construction methods, materials and costs. They also need to keep abreast of the annual changes and variations in construction market values as well as changing tax regulations and court rulings. A properly prepared Cost Segregation Study will pay for itself many times over and you can start to take advantage of the cash flow savings immediately upon the completion of the study. Taking advantage of the study is as simple as updating your quarterly tax payments and submitting the information on your next tax return. What if you have owned the property for some time? The process of performing the study is nearly the same with even greater potential for first year tax savings. We will simply catch up the depreciation in the year of filing the cost segregation study as if it was done correctly from the beginning of ownership. The best part is that there is no need to file an amended tax return to take advantage of the benefit. Every time a property changes ownership the process resets and a new opportunity to capture future accelerated depreciation begins. This can become valuable information that may have an impact on your financial pro-forma and capital expenditures. The time line to complete a study can be relatively short, potentially in as few as 6 weeks. This will vary on the size and complexity of the property and your individual tax situation. Regardless, we ll be able to tell you very quickly and without any cost, about the benefits of performing the study both from a first year tax savings and the associated Net Present Value. By investing in a Cost Segregation Study, prepared by our team of engineers, cost estimators and accountants, you will have the confidence that you have maximized your depreciation benefits and have fully documented and justifiable support for your depreciation claims. Almost any commercial property owner can benefit from a Cost Segregation Study as long as they have a tax liability. Are you developing a new facility, renovating an existing building or purchasing real estate? Do you have an existing building that has not had a Cost Segregation Study done on it? Regardless of which one of these real estate actions you might be considering you may be able to utilize a Cost Segregation Study to accelerate depreciation and improve your cash flow. This isn t just for property owners or new buildings. Tenants who undertake a major build-out of leased space may also qualify for the benefits of a Cost Segregation Study. During a Cost Segregation Study we will gather information to provide a proposal for review. The proposal will include the 1st year tax benefits and the Net Present Value associated with the study. It will also include a fixed fee for our services. We will only suggest moving forward if the benefits of the study far out weigh the fees for the study. And there is no cost to provide the proposal analysis.... inspect your property to identify and document property components qualifying for accelerated depreciation.... examine architectural and engineering documents and specifications for potential asset reclassification.... make a photographic record of the property.... analyze cost data, including the contractor s application for payment, change orders, and other soft costs.... prepare an itemized list of building components qualifying for accelerated classification based on IRS Guidelines.... perform an engineering analysis to reconcile total costs with capitalized costs.... prepare a comprehensive report documenting our findings.... In the case of an asset owned in previous years we can prepare Form 3115 for submission with your tax return or this can be provided by your accountant.

6 loan review services Experience Some of the projects that The Concord Group has provided Loan Review Services for include: Mokena Marketplace Mokena Marketplace is a 430,000 SF retail development including JC Penney, Meijer, Chase Bank and a variety of smaller chain stores. The Concord Group provided loan review services and construction progress monitoring for Cornerstone Real Estate Advisors. Manpower Manpower relocated its corporate headquarters to downtown Milwaukee in a new 280,000 SF single user building on the Milwaukee River. The Concord Group provided loan review services to the City of Milwaukee for the publicly funded portion of this $78 million project. The Brewery Project The Brewery project is the redevelopment of the historic Pabst Brewing Company facilities in downtown Milwaukee. When completed, the development will provide over 800,000 SF of mixed use space. The Concord Group provided loan review services to the City of Milwaukee for the publicly funded portion of the project. THE MODERNE The Moderne is Milwaukee s newest high-rise residential project. Located in the northwest corner of downtown Milwaukee the project is a mixed use development of over 200 housing units, interior parking and street level retail units. The Concord Group is providing loan review services to the City of Milwaukee for the publicly funded portion of the project. lighthorse 4041 This is a new 84 unit, mixed use development in the Village of Shorewood. The Concord Group is providing loan review services to the village and to WHEDA for the publicly funded portion of the project.

7 loan review services Experience The northend - phase 2 This is a new 55 unit, second phase of a mixed use development in the City of Milwaukee. The Concord Group is providing loan review services to the city for the publicly funded portion of the project. UNIVERSITY SQUARE University of Wisconsin This is a 1,100,000 SF multi-story mixed use residential/retail/office tower completed in The Concord Group provided the University, through the Division of State Facilities, with independent analysis of developer s cost proposals. redtop plaza This is a 151,000 SF retail development including Jewel/Osco and a variety of smaller chain stores. The Concord Group provided loan review services and renovation progress monitoring for Cornerstone Real Estate Advisors. CITY HALL RESTORATION PROJECT This project included the $75 million exterior restoration of the over 100 year old City Hall. We were engaged to provide construction audit and construction advisory services with a particular emphasis on cost control and change order review and evaluation. VILLARD AVENUE LIBRARY This is a 4-story Developer driven project that provides the Milwaukee Public Library (MPL) with a first floor condominium space of approximately 12,000 SF. We assisted MPL in determining the fair price and assisted in developing the contract terms for the condominium purchase. Further services include project oversight through project completion and close-out. walgreen Company This is a single story stand alone retail development and associated site improvements. The Concord Group provided loan review services and construction progress monitoring for Wrightwood Capital, LLC.

8 property condition assessment services Experience Some of the projects that The Concord Group has provided Property Condition Assessments for include: EBCO / Oasis, Columbus, Ohio This is a three-building manufacturing facility, warehouse and office area for a total of approximately 802,580 SF. for the facility s renovation for the owner, Marcus Adams Properties, Imperial Plaza, La Habra, CA This is a retail Center of about 258,715 square feet and parking area. as a part of a loan request documentation package for the renovation project for the owner, Wrightwood Capital, LLC. Carlyle at Waters Apartments, Tampa, FL The project is a multi-family development consisting of unit garden style apartments. for the facility s renovation for the owner, Wrightwood Capital, LLC. Maid O Mist, Chicago, IL This a three Story building manufacturing facility and attached office area for a total of approximately 25,329 square feet. as part of a purchase documentation package for the owner, Wrightwood Capital, LLC. Indian Community School, Milwaukee, WI This is a multiple building K-12 Community Based School. of the facility prior to return of the property to its original owner. These services were provided to the tenant, The Indian Community School.

9 Brooklyn Brownstones, New York, NY This project includes eleven brownstone buildings, between four and five story structures built between mid to late 1800 s and early 1900 s. as part of a loan request documentation package for the renovation project for the owner, Wrightwood Capital, LLC. Summit at Lenox Apartments, Atlanta, GA This is a 431- unit mid rise apartment complex and associated amenities. as part of a loan request documentation package for the condominium conversion project for the owner, Bayshore Realty.

10 55 East Monroe Street Suite 2850 Chicago, IL East Kilbourn Avenue Suite 565 Milwaukee, WI Ottawa Avenue NW Suite 230 Grand Rapids, MI