Business Principles. Introduction. Vision for Value Creation. Investor Commitment. Integrity. Employee Excellence. Development Partners

Transcription

1

2 Our Company Residential real estate is an area of commerce where strong relationships are forged: between lenders, developers, contractors and ultimately, between people and their homes. Tricon Capital Group Inc. is an industry leader in facilitating these relationships by providing development capital to residential developers, allowing projects to move smoothly from conception through completion. We are proud of our unparalleled reputation for integrity and investment performance amongst investors, senior lenders and development partners. Tricon is consistently successful because we recognize that while the bottom line is an integral undertaking, profitable results occur naturally when one prioritizes the relationships that make a venture succeed. Tricon has recorded over 20 years of growth as an independent, institutional money manager, completing approximately 130 transactions in the U.S. and Canada for multi-family, single-family land development, house building and retail projects valued at more than $8 billion. In 2008, Tricon closed Tricon IX LP, a dedicated US fund, and Tricon X LP, a Canadian only investment vehicle. These funds have an aggregate capitalization of approximately $500 million and have been created to take advantage of the distressed "for-sale" residential sector by working with local developers to acquire deeply discounted residential bank debt and entitled/improved land.

3 Business Principles Introduction Our business and our relationships are based on a solid foundation of principles. Adhering to these principles has helped establish Tricon as the institutional money manager of choice for our development partners and a North American leader in the residential development industry. Vision for Value Creation We believe that we can create above average value for our investors by investing in wellconceived real estate development projects. We strive to make investments that are not only financially profitable but also improve the way people live, work and interact. Investor Commitment Our investors interests always come first. We realize that investors are the life-blood of our organization and that our success depends on treating them well. When making investment decisions, we are ever-mindful of our primary objective -- the preservation of our investors capital. Integrity Successful business relationships can only be built on a foundation of mutual trust and understanding. We will never consider an investment, no matter how great the potential return, if it would in any way call into question our integrity, our reputation or impair our working relationships. Our experience has shown that there are numerous, highly-profitable investment opportunities that can be entered into without sacrificing our principles. Employee Excellence We value our employees highly and, in return, they produce high quality results, day after day. We are committed to choosing employees who reflect our organization s principles and who are knowledgeable, progressive, diligent, thoughtful, responsive and community-oriented. Development Partners While headquartered in Toronto, Tricon has successfully invested in markets across the U.S. and Canada by cultivating strong relationships with reputable local developers. We align ourselves with experienced developers who have strong ties to their communities and who practice sustainable, environmentally-friendly development, who take pride in their workmanship and design quality and who value their customers.

4 Prudent Risk Management Investing in development projects requires constant attention and careful management to maximize returns and minimize risk. Tricon achieves profitability over the long term through prudent investment practices by diversifying capital across product types and market locations, by assiduously structuring deal transactions, by conducting comprehensive due diligence and market research and by taking an active role in investment management.

5 Investment Criteria Introduction Creative but sound financial structuring is an integral part of any real estate development. While our management team operates within a proven investment framework befitting an institutional financier, our independence gives us the requisite flexibility to structure deals appropriate to each individual venture and the needs of our various partners. Type of Development Tricon focuses its investment activity on the residential sector, specifically for-sale multi-family development/construction, single-family land development and house-building. We will also consider retail development opportunities, particularly those done in conjunction with a master planned community. Markets We are currently operating in 17 major markets in the United States and Canada and will consider development opportunities in other urban centers with a minimum metropolitan population of 750,000. Preference will be given to projects that are already zoned for their proposed use and which have demonstrated current market demand. Investment Size Our investments generally involve capital commitments in the $10-$30 million range; however, we will consider investments above that range, if they offer above average risk-adjusted returns. Investment Period Ideally, return of Tricon's capital is sought within 2-4 years of the initial investment with complete project build-out expected within 3-6 years, but we will consider longer term transactions that offer above average risk-adjusted returns. Developer Co-Investment Tricon typically requires that its developer partner contribute at least 10-20% of the required equity for the project. The Developer is also expected to arrange and guarantee senior or construction financing with a local bank. Deal Structure

6 Tricon does not acquire real estate for its own account; rather, we provide development capital structured as loans that can be subordinated to conventional senior debt, but will rank in priority to developer equity. Generally, our loans accrue interest at a negotiated base rate and provide Tricon with a share of net cash flow; however, Tricon is flexible in its consideration of deal structures and will consider alternative forms including straight interest rate loans. Security Tricon's investment will typically be secured by way of a mortgage on the underlying real estate (deed of trust) and/or a pledge of ownership interests in the borrowing entity. Caliber of Developers We work primarily with mid-size local developers -- companies with strong roots in their market that understand not only the development business but also the characteristics or nuances of their particular market. Our role as an institutional money manager is typically limited to strategic decision making and the provision of development financing. Our choice of development partners is guided by our desire to forge long term, sustainable relationships and as such we seek developers who are reputable, experienced and capable. Due Diligence In the interest of all of our partners, Tricon is uncompromising in its due diligence process. Each prospective investment is subject to a thorough review, which generally includes: an in-depth developer/borrower reference check, environmental audits, market analysis, site analysis, financial/forecast analysis, design analysis and legal review.

7 Our Team Overview Tricon's investment team is comprised of a group of talented and highly experienced individuals who have a collective commitment to their company, their customers and their community. Our management team works hard to provide superior service to our development partners and has substantial real estate and finance expertise including the provision of equity/mezzanine loans, project finance, development, legal structuring, asset management and market research. It is the quality and commitment of our management team that allows our organization to establish and maintain long-term working relationships and has earned Tricon the reputation as "the capital source of choice" for its development partners. Partners and Directors David Berman David Berman has been involved in all phases of Tricon's development since co-founding the firm in 1988 and is responsible for its overall operations including investment decisions and capital commitments. David has over 35 years of experience in the real estate industry in Canada, the United States and abroad. He began his career in North America in 1978 at Citicorp (now Citibank Canada) where he was Vice President for real estate lending. In 1982, he joined First City Development Corporation as Vice President with responsibility for real estate acquisitions and equity lending. Prior to founding Tricon, David acted as Executive Vice President for Lakeview Estates Limited where he was responsible for land development and single-family house construction. David holds a MBA with high distinction and a Bachelor of Science from the University of the Witwatersrand in Johannesburg, South Africa. Geoffrey Matus Geoffrey Matus co-founded the firm with David Berman in He is actively involved in opining on investment decisions, strategic planning, in particular the selection of markets in which the firm invests, and the developers with whom Tricon does business. He also has joint responsibility with David for maintaining existing relationships and for fundraising. Geoffrey, who has extensive business experience in Canada, the United States and abroad, is Chairman and a Director of a number of other manufacturing and financial companies. Prior to 1978, he was in the corporate lending arm of Citibank Canada and subsequently Executive Vice-President and Director of the Warren Paving and Materials Group. He is an Honorary Director and past Chair of the Board of Directors of the Baycrest Centre for Geriatric Care. He is also a Member of the Governing Council of the University of Toronto and was recently appointed to the Board of the Canadian Opera Company as well as the Board of the MaRS Discovery District. In 2005, Geoffrey was a recipient of the Jewish Federation award for outstanding service to the community. Geoffrey graduated with a Bachelor of Commerce Degree from the University of the Witwatersrand in Johannesburg, South Africa. He received his Law Degree from Columbia

8 University in New York. Gary Berman Gary Berman is a Partner of Tricon and is responsible for fundraising, investment strategy and for the sourcing, underwriting and management of investments in the United States and Canada. Prior to joining Tricon in 2002, Mr. Berman was a Development Officer for Canderel Stoneridge Equity Group where he managed the conversion of the former Massey Harris office headquarters into loft condominiums and the development of DNA (Downtown s Next Address), a 550 unit condominium project, in Toronto. Before joining Canderel Stoneridge, Mr. Berman worked in New York City as an Associate in Real Estate Acquisitions for the Blackstone Group and as a Financial Analyst in Real Estate Advisory for Goldman Sachs & Co. Mr. Berman is the co-founder of the Pug Awards, an on-line awards and educational outreach program established to increase architectural awareness and elevate planning and design standards in Toronto. Mr. Berman received an MBA from Harvard Business School where he was designated a Baker Scholar, and a Bachelor of Commerce from McGill University in Montreal, Quebec where he graduated first overall in The Faculty of Management. Glenn Watchorn Glenn Watchorn is a Partner of Tricon and is responsible for investment strategy and for the sourcing, underwriting and management of investments in the United States and Canada. Prior to joining Tricon in 2002, Mr. Watchorn was Vice President, Corporate for Intracorp Developments, a real estate development company that manages and develops residential and commercial projects throughout Canada. During his five year tenure at Intracorp, he was responsible for the financial structuring of acquisitions and for raising equity and debt to finance residential and commercial projects. Before joining Intracorp, Glenn worked for Graywood Developments for six years in the positions of Development Manager and Financial Analyst. During his employment at Graywood, Mr. Watchorn was actively involved in the acquisitions, financing, planning and development of the company s projects. Mr. Watchorn acts as the Chairman of the investment committee and a director on the board of the Kensington Foundation, a charitable foundation that supports a health care organization focusing on health and wellness services for seniors. Mr. Watchorn received an MBA from the Ivey School of Business at the University of Western Ontario and a Bachelor of Arts in Economics and Political Science from the University of Western Ontario. Saul Shulman Saul Shulman provides legal counsel to Tricon in addition to serving as a Director of the Company. He also plays an important role in opining on new investment opportunities. Saul was a senior partner at Goodman and Carr for almost 40 years and has extensive legal experience in evaluating and structuring real estate transactions in North American and international markets. He is currently on the Advisory Board of Brookfield Power Inc. and is a Director of several private companies. His previous public directorships/trusteeships include Brookfield Asset Management (formerly Brascan Corporation/Brascan Financial Corporation), Summit Real

9 Estate Investment Trust, Trizec Corporation Ltd., Edper Investments, JDS Investments Limited and Triumph Energy. Saul holds a Bachelor of Commerce Degree from the University of Windsor. He graduated from Osgoode Hall Law School in Toronto and was called to the Ontario Bar in Saul was also appointed as Queen s Counsel in Vice Presidents Jeremy Scheetz Jeremy Scheetz is responsible for sourcing and underwriting new investments and for managing existing projects in the United States and Canada. He also assists with the oversight of Tricon s asset management program. Prior to joining Tricon in 2003, Jeremy worked as a Senior Account Manager for HSBC Bank where he was responsible for sourcing, underwriting and managing various residential construction loans in the homebuilding and condominium sectors. Jeremy received a MBA from the Ivey School of Business at the University of Western Ontario and an Honors Bachelor of Commerce from Queen's University. Jonathan Ellenzweig Jonathan Ellenzweig is responsible for sourcing and underwriting new investments and for managing existing projects in the United States and Canada. Prior to joining Tricon in 2005, Jonathan was an Analyst for Citigroup s Investment Banking Division, working in both the New York City and Toronto offices, where he was a member of the coverage and transaction execution teams for financial services and media/telecom companies. Jonathan graduated from Queen s University with a Bachelor of Commerce degree (First Class Honors). June Alikhan June Alikhan is responsible for Tricon's financial management including information technology, reporting and administration. June has over 20 years of experience in the accounting field with over 10 years specifically in the real estate industry. Prior to joining Tricon in 2001, she was head of her own consulting company providing financial management, process re-engineering and systems assessment and implementation services within the real estate industry. Before that she held a Controllership position in the real estate division of The Oshawa Group, a large national retail/wholesale grocery company. June graduated from the University of Toronto with a Bachelor of Commerce degree and subsequently received her C.A. from the Institute of Chartered Accountants of Ontario. Sal Spampinato Sal Spampinato oversees Tricon s asset management program and evaluates new projects from a construction and budget perspective. Sal is responsible for the assessment of the project construction team, the performance, experience and ability of the General Contractor, the integrity of the project design, and the review and assessment of the project construction budget and schedule. On a daily basis, Sal works closely with Tricon's investment managers to assist in the successful execution of all Tricon construction projects. Sal comes to Tricon with 37 years of

10 experience in the condominium sector. Prior to joining Tricon in 2006, Sal was the Vice President of construction and project management for Canderel Stoneridge Equity Group, a Toronto developer and a client of Tricon. At Canderel Stoneridge, he managed the construction of 1,500 units, including College Park, a two phase project consisting of 51 and 45 story towers and seven levels of underground parking. Previously, he was a Senior Project Manager at Tridel, Canada s largest condominium developer, where he oversaw and directed four project managers and the construction and delivery of approximately 2,000 units per year. Over his career, Sal has been involved in the construction of approximately 25,000 condominium units. Sal is a graduate of the Construction and Project Management Technology program from George Brown College in Toronto. Associates and Analysts David Giles David Giles undertakes financial modeling and analysis for both existing and potential investments, conducts due diligence and performs ongoing analysis of both new markets and markets in which Tricon is currently invested. Prior to joining Tricon in 2005, David worked as a Project Engineer for Clough Offshore, an Oil and Gas contractor based in Perth, Western Australia. David graduated from the University of Western Australia with both Bachelor of Commerce and Bachelor of Engineering (Honors) degrees. Craig Mode Craig Mode undertakes financial modeling and analysis for both existing and potential investments, conducts due diligence and performs ongoing analysis of both new markets and markets in which Tricon is currently invested. Prior to joining Tricon in 2007, Craig was an acquisitions analyst with DLJ Real Estate Capital Partners, the real estate private equity division of Credit Suisse, in Los Angeles, California. Craig holds an Honors Business Administration degree from the Richard Ivey School of Business at the University of Western Ontario. Adam Tobe Adam Tobe undertakes financial modeling and in-depth analysis for prospective Tricon investments. In addition, he is involved in Tricon s asset management process through monitoring existing projects and conducting ongoing market research. Prior to joining Tricon in 2008, Adam worked as a financial analyst for LNR s CMBS acquisition and surveillance group in Miami, Florida. Adam holds an Honors Business Administration degree from the Richard Ivey School of Business at the University of Western Ontario.

11 Recent Investments Overview Tricon is currently engaged in a number of new developments in the U.S. and Canada. In some we are expanding previously successful projects and strengthening existing partnerships; in others we are pleased to be joining forces with new developer partners to enter into new, highprofile markets. In each, Tricon s capital commitment ensures that the quality of these new projects meets our high standards and that of our investor partners. Central Valley Portfolio Initial Closing June 2008; Subsequent Closings October 2008, October 2009, December 2009 Discounted purchase of senior notes/reo from various lenders secured by 55 inventory homes and 611 finished lots in 3 Central Valley communities Tricon investment: US$32.85 million Central Valley Portfolio will be developed by RL Communities (formerly Lafferty Homes), a leading builder of entry level and move-up housing in the Central Valley and East Bay regions of Northern California Laurel Canyon Closed December 2008 Discounted acquisition of 38 completed and partially-completed homes (including 13 models), 466 finished and unfinished lots and extensive in-place amenities, including a 28,000 square foot clubhouse within a master-planned, active-adult community located in the City of Canton, Georgia (Atlanta MSA) Tricon Investment: US$28.2 million Laurel Canyon will be developed jointly by Southeast Capital Partners and Patrick Malloy Communities; this project represents Tricon s fifth transaction with Southeast Capital Partners and its first transaction with Patrick Malloy Communities Phoenix Land Portfolio Initial Closing September 2007; Subsequent Closings September and December 2008 Discounted bulk purchase of 1,160 finished lots, 92 partially finished lots and 64 acres of raw

12 land located throughout the greater Phoenix area Tricon Investment: US$43 million Phoenix Land Portfolio represents the 21st transaction between Tricon and Communities Southwest, a Phoenix-based developer of master-planned communities and related retail centers Woodstock Condominiums Closed September 2008 The acquisition of a senior note secured by 58 completed or partially completed condominium units, 9,000 SF of ground floor retail space and six completed homes in a new-urbanist, mixeduse development in the city of Woodstock, Georgia Tricon Investment: US$9.9 million Woodstock Condominiums represents the 4th transaction between Tricon and Southeast Capital Partners, an Atlanta-based residential developer Eskaton Village Placerville Closed August 2008 Discounted acquisition of senior notes secured by 21 completed homes (including 4 models) and 66 finished lots adjacent to a 64-bed assisted-living facility within an age-restricted community located in the City of Placerville, California (Sacramento MSA) Tricon Investment: US$12 million Eskaton Village Placerville represents Tricon s seventh transaction with Lakemont Homes, a Sacramento based regional builder SoCal Portfolio Initial Closing May 2008; Subsequent Closings throughout 2008 Discounted acquisition of approximately 500 finished and tentative map lots in Southern California via the purchase of senior notes/reo land from various senior lenders Tricon investment: US$35.1 million