T HE PROPERTY ABOUT 55 WEST WACKER

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1 T HE PROPERTY ABOUT 55 WEST WACKER Purchased in 2006 by an affiliate of Cape Horn Group, 55 West Wacker offers individually owned offices a subtle distinction that works to the buyer s advantage. Like office condominiums, individually owned offices allow occupants to purchase rather than rent their space. In June 2007, ownership received City of Chicago approval for a vertical subdivision of the building, which gives office owners the flexibility of adding to or reducing the size of their space without requesting zoning changes or association approvals. With a prime riverside location in the heart of Chicago s business district, 55 West Wacker combines expansive waterfront and skyline views with convenient access to government and corporate offices, courthouses, public transportation, restaurants, hotels, retail and entertainment. The distinctive 15-story, 209,000-square-foot building features column-free, 14,250-square-foot floor plates for flexible space planning. Built in 1968 as the headquarters of BlueCross BlueShield of Illinois, the structure was fully renovated in Recent capital improvements include common-area renovations, a new roof, updated elevators, enhanced security system and HVAC upgrades. Amenities include a full-service health club, full service bank with ATM, indoor heated parking, on-site management and 24-hour manned security.

2 FACT SHEET PROPERTY TYPE: Individual office ownership, similar to office condominiums, vertically subdivided to allow owners to buy and sell portions of space without additional zoning changes or association approvals. LOCATION: 55 West Wacker Drive, Chicago, Ill Prestigious Wacker Drive address along Chicago River Convenient access to public transportation Close to restaurants, hotels, shopping and entertainment Near government offices, courthouses and large corporate offices (e.g., Microsoft, Leo Burnett, United Airlines, IBM) COMPLETED: 1968 (fully renovated in 1987) DEVELOPER/OWNER: PROPERTY MANAGEMENT: FEATURES: AMENITIES: CAPITAL IMPROVEMENTS: 55 Chicago Partners LLC, an affiliate of Cape Horn Group Lincoln Property Company Panoramic waterfront and skyline views Expansive windows and 9-foot ceilings Column-free floor plates for maximum space planning flexibility Vertical subdivision allowing owners to buy and sell portions of space without zoning changes or association approvals Walker duct electrical system (12 watts per rentable square foot) Variable air volume HVAC 24-hour manned security Fully sprinklered On-site ownership, management and engineer Full-service health club Bank with ATM Heated indoor parking Renovated lobbies and common areas Modernized elevator system Digital news monitors and touch screen lobby directory New fire/life safety panel Upgraded digital security cameras and card-swipe entry New building signage and exterior lighting SALES CENTER: 55 West Wacker Drive, Suite 400, Chicago, Ill PHONE: (312) WEB SITE:

3 UNIQUE BUILDING CHARACTERISTICS Elevator Identity for Every Owner 14,250 RSF per Floor No Interior Columns Flexible Layout Opportunities Floor Plan Provides Maximum Efficiency Walker Duct Electrical System 12 Watts per RSF Optical Internet Capabilities Heated Indoor Parking Direct Access to Lower Wacker

4 THE DEVELOPER ABOUT CAPE HORN GROUP Cape Horn Group is a real estate development company specializing in the acquisition of commercial properties with the goal of upgrading, repositioning and increasing their value. The firm originated in Miami, Florida where it pioneered the office condominium concept, becoming a leading expert in the field. Cape Horn Group was formed by veteran investment bankers who understand the financial benefits of individual office ownership and are focused on introducing this concept for the ultimate benefit of end users. The company continually looks for opportunities to expand its presence with the support of a strong national and international investor base. In 2006, Cape Horn Group opened an office in Chicago after acquiring two premier properties in the thriving Wacker Drive corridor 55 West Wacker and the LaSalle-Wacker Building. In mid-2007, the company completed a vertical subdivision of 55 West Wacker and is offering the opportunity of individual office ownership to the Chicago business community. Eduardo Romero, partner, has spent more than 15 years in the emerging markets sector as a managing director at Bank of America, where he managed a combined portfolio exceeding $1.5 billion. His background includes investment banking, corporate finance activities and private equity investments. Eduardo Covarrubias, partner, has more than 10 years of experience in the financial sector, including investment banking, acquisition finance, recapitalizations and refinancing. Covarrubias spent seven years at JP Morgan Chase s investment banking group where he was responsible for structuring, and executing over $ 7 billion of various transactions for Latin American issuers. Other members of the team include Rodrigo Gomez, director of sales and marketing; Juan DeAngulo, Chicago regional manager; and Lawrence Cohn and Russell Cora, region sales directors for Chicago. Cape Horn Group s properties include: 55 West Wacker Drive (Chicago, IL) 221 North LaSalle Street (Chicago, IL) Biscayne Boulevard (Miami, FL) 1100 Brickell Avenue (Miami, FL) 1680 Michigan Avenue (Miami Beach, FL)

5 FREQUENTLY ASKED QUESTIONS 55 WEST WACKER Q&A Is 55 West Wacker selling office condominiums? 55 West Wacker offers individually owned offices a subtle distinction that works to the buyer s advantage. Like office condominiums, individually owned offices allow occupants to purchase rather than rent their space. The difference is that buyers of individually owned offices can expand or reduce their space without requesting zoning changes or association approvals. In the long run, individually owned offices lend themselves easily to owners changing space needs. Why buy your office space instead of renting? Financial and legal advisors can provide more details, but briefly, organizations that own their office space can: Build their own equity, rather than their landlord s Control occupancy costs Hedge against inflation Enjoy potential appreciation Reap the benefits of capital improvements Put property in a trust Deduct mortgage interest, real estate taxes and depreciation expenses from income taxes Why buy at 55 West Wacker? 55 West Wacker commands a coveted location on the Chicago River, with spectacular views and convenient access to government and corporate offices, courts, retail, public transportation and major roadways. In recent years this stretch of Chicago s riverfront has emerged as downtown s new hot spot for dining, entertainment and hospitality. A steady stream of new office and hotel development affirms the enhanced market value a Wacker Drive address offers its owners. In addition, at 15 stories, 55 West Wacker offers the advantages of a boutique building along with the features and amenities of a premier office tower, including: Panoramic waterfront and skyline views Expansive windows and 9-foot ceilings Column-free floor plates for maximum space planning and flexibility Indoor heated parking Walker duct electrical system Full-service fitness facilities Full-service bank with ATM High-speed Cogent optical Internet access On-site management 24-hour manned security

6 FREQUENTLY ASKED QUESTIONS 55 WEST WACKER Q&A What will my space look like? Originally, 55 West Wacker was built for BlueCross BlueShield of Illinois, which insisted on column-free floor plates. With no columns to interrupt the flow, the space is fluid and flexible, optimizing efficiency and maximizing possibilities. This blank slate allows owners to create facilities tailored to their needs and attuned to their style. Does 55 West Wacker provide a build-out allowance? Owners are responsible for their own build-out expenses. On the other hand, owners don t have to negotiate a build-out allowance from their landlord. They can draw up their own plans, set their own budget, upgrade on their own timetable and, when it s time to sell, benefit from the added value their improvements represent. How will I finance my purchase? Today, most commercial lenders are well-versed in individual office purchase transactions and able to develop a suitable financing strategy. Cape Horn Group has established relationships with preferred lenders offering attractive loan rates. Some buyers also may qualify for a Small Business Loan or a 1031 Exchange. How is the building going to be improved? Cape Horn Group has an extensive capital improvement plan that includes: Renovated lobbies and common areas Modernized elevator system Digital news monitors and touch screen lobby directory New fire/life safety panel Upgraded digital security cameras and card-swipe entry New building signage and exterior lighting Has Cape Horn Group done this before? YES. Cape Horn Group is a real estate development company specializing in the acquisition of commercial properties with the goal of upgrading, repositioning and increasing their value. The firm originated in Miami where it pioneered the office condominium concept by completing successful conversions at 1110 Brickell Avenue, 1680 Michigan Avenue and Biscayne Blvd. As a result, Cape Horn Group led the way for what is today one of the most active markets for individual office ownership in the United States and became one of the country s leading experts in the field.

7 VERTICAL SUBDIVISION What is a vertical subdivision? A vertical subdivision allows for a property to be legally subdivided into multiple parcels out of what would otherwise be a rigid configuration based on current physical conditions. Buyers of a vertically subdivided office acquire a set of lots (each with its own property ID) which represent the existing physical layout. Ownership is fee simple in nature (same as a condominium) and affords the same material benefits as condominium ownership. What is the primary difference between a vertical subdivision and an office condominium? Chicago condominium law requires the developer to subdivide individual offices based on its current physical layout. A vertical subdivision allows the developer to subdivide the property in virtual lots, offering owners considerably more flexibility in buying or selling portions of space. Why is 55 West Wacker a vertical subdivision? Cape Horn Group chose to vertically subdivide 55 West Wacker instead of converting it to traditional office condominiums because of the superior flexibility it offers the end user. Owners are able to buy or sell portions of space as their business needs change, as well as further subdivide existing space, without needing additional zoning or building association approvals. Vertical Subdivision vs. Condominium? Vertical Subdivision Condominium Governed by an Association Monthly Assessment for Operating Expenses Fee Simple Ownership Declaration of Covenants Ability to Buy/Sell Portions of Office Space NO Ability to Demise Existing Space without NO Further Association or City Approval

8 LEASE VS. OWN OWN VS. LEASE ANALYSIS Many financial factors make owning rather than leasing your office space a smart move. They include but are not limited to: Build Equity Hedge against inflation Deduct mortgage interest from income tax Deduct real estate taxes from income tax Deduct depreciation expenses from income tax Benefit from potential real estate appreciation OWNERSHIP SAVINGS $600,000 $500,000 $400,000 A cash-on-cash analysis puts these factors in focus. While $300,000 the initial out-of-pocket monthly cost of owning is slightly higher than leasing (see table below), a fifteen-year cost comparison shows a different picture as the tax advantages listed above and the accrued equity combine to yield $200,000 $100,000 significant savings without taking into account any potential real estate appreciation (see graph at right). 5 YEARS 10 YEARS 15 YEARS ASSUMPTIONS Purchase Price $1,400,000 Purchase Price (per sq. ft.) $ Office Size (sq. ft.) 5,000 Down Payment 20% Interest Rate 7% Real Estate Appreciation 0% Operating Expenses (per sq. ft.) $8.71 Real Estate Taxes (per sq. ft.) $7.00 Market Rent Payment (per sq. ft.) $15.00 INITIAL CASH-ON-CASH DIFFERENCE: MONTH ONE Before Equity Build Up Lease Own Difference Rent /Mortgage $6, $7, Operating Expenses $3, $3, Real Estate Taxes $2, $2, Gross Total Commitment $12, $13, $1, Percentage Increase 8.13% After Equity Buildup Operating Expenses $3, $3, Real Estate Taxes $2, $2, Mortgage Interest $6, $6, Mortgage Principal $0 ($957.71) Net Total Commitment $12, $12, $82.64 Percentage Increase 0.63%

9 LEASE VS. OWN FOR NON-PROFITS OWN VS. LEASE ANALYSIS Many financial factors make owning rather than leasing your office space a smart move. They include but are not limited to: Build Equity Hedge against inflation Deduct mortgage interest from income tax Deduct real estate taxes from income tax Deduct depreciation expenses from income tax Benefit from potential real estate appreciation OWNERSHIP SAVINGS $1,200,000 $1,000,000 $800,000 A cash-on-cash analysis puts these factors in focus. While $600,000 the initial out-of-pocket monthly cost of owning is slightly higher than leasing (see table below), a fifteen-year cost comparison shows a different picture as the tax advantages listed above and the accrued equity combine to yield $400,000 $200,000 significant savings without taking into account any potential real estate appreciation (see graph at right). 5 YEARS 10 YEARS 15 YEARS ASSUMPTIONS Purchase Price $1,400,000 Purchase Price (per sq. ft.) $ Office Size (sq. ft.) 5,000 Down Payment 20% Interest Rate 7% Real Estate Appreciation 0% Operating Expenses (per sq. ft.) $8.71 Real Estate Taxes (per sq. ft.) EXEMPT Market Rent Payment (per sq. ft.) $15.00 INITIAL CASH-ON-CASH DIFFERENCE: MONTH ONE Before Equity Build Up Lease Own Difference Rent /Mortgage $6, $7, Operating Expenses $3, $3, Real Estate Taxes $2, $0 Gross Total Commitment $12, $10, $1, Percentage Increase % After Equity Buildup Operating Expenses $3, $3, Real Estate Taxes $2, $0 Mortgage Interest $6, $6, Mortgage Principal $0 ($957.71) Net Total Commitment $12, $9, $2, Percentage Increase %