Firm History Hart Realty Advisers, Inc. (HRA) The firm provides customized investment solutions for institutional clients Founded in 1982

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1 Investment Management and Advisory Services

2 Firm History Hart Realty Advisers, Inc. (HRA) is a privately held, real estate investment management firm specializing in the development, acquisition and portfolio and asset management of private real estate across the U.S. through core, value-added, and opportunistic investment strategies. The firm provides customized investment solutions for institutional clients such as corporate and public pension plans, foundations, endowments, and Taft-Hartley plans. In addition to its core investment management business, the firm provides solutions-driven real estate advisory services, including distressed loan, portfolio management and asset management services to private and public sector clients through its Advisory Services Group. Founded in 1982, and registered as an SEC Investment Adviser in 1988, the firm s highly experienced team of real estate professionals has continually delivered performance excellence while controlling risk through several business cycles. For 25 years, the firm s mission has remained the same to provide consistently strong real estate investment performance, and outstanding client services, and to continually earn trust and respect from clients, operators, and partners. With an excellent record of accomplishments - executing strategies for institutional clients - our platform of investment management services and philosophy has evolved over time and is reflective of the combined career experiences. The firm s collective knowledge and wisdom developed over long and diverse periods in the industry; practical and seasoned insights into developing solutions and ability to effectively execute strategies are the firm s defining attributes and positions the firm well to manage the challenges and take advantage of opportunities in the current economic environment. 1

3 Firm Overview Headquartered in Simsbury, CT with a regional office in Washington D.C. $1.0 billion of real estate Assets Under Management including commitments. HRA senior team members have collectively managed portfolios of loans including distressed loans and equity real estate in excess of $4.0 billion. Firm is research grounded and experienced in the complexities of Real Estate and Capital Markets. Experienced staff supports a broad range of investment related skills including, market and economic research, credit analysis, portfolio and asset management, debt and equity originating and underwriting, financial analysis, regulatory compliance, accounting and financial reporting and client services. Client base and investor/partner relationships include major public and corporate pension funds, national developer/operators, major endowments and financial institutions. Historical Performance As of March 31, 2009 Value-Added % Core % Strong and respected industry reputation. Strong risk adjusted returns achieved since inception, inclusive of several business cycles. Opportunistic % Total Assets Acquired 47 Aggregate Purchase Price $1,430,959,000 HRA s time weighted, leveraged, before fee composite return since second quarter 1993 is 14.38%, this compares to the NCREIF Property Index return for the same period of 10.15%. 1 Before fee, leveraged, internal rate of return (IRR) for three value added properties between December 1998 and June Since inception (June 1993), fund level, time-weighted, leveraged returns before fees. 3 Before fee, leveraged, weighted average internal rate of return for two properties managed between June 2002 & March

4 Advisory Services Group - Special Assets special assets and portfolio advisory services Supported by a depth of experience that spans four decades of successfully navigating the difficulties of the ever-changing business environment, HRA s staff is uniquely positioned to assist clients with the challenges of managing distressed investments. The firm s collective knowledge and historical perspective, developed over years of investing in all economic environments and cycles, provides a strong base for developing effective and timely portfolio and asset solutions in response to client needs. With a national presence and network of seasoned service providers and business relationships, HRA offers Special Asset Services that range from assuming full control of a distressed portfolio of loans as an outsource, to providing specifically targeted assessments and services on a consulting basis to assist clients with distressed asset solutions. The Portfolio Manager will ensure that the necessary HRA resources are deployed in support of each assignment and will provide the leadership, guidance and oversight to the overall loan/ portfolio analysis process culminating in the adoption of a comprehensive distressed asset strategic plan. HRA s asset management team will implement the strategic plan to its ultimate conclusion working with Portfolio Manager to consider possible midcourse strategy adjustments in reaction to events within the market place as required. Distressed Asset and Portfolio Services Market Research/Asset Profiling Comprehensive macro and micro economic evaluation of key factors influencing the asset is conducted. Real estate market factors are researched and evaluated regarding the potential impact on the investment. Assessment is made of the relative competitive position of the asset in its market, with the assessments revisited as required based on changing market fundamentals and capital market circumstance. Asset-Portfolio Valuation/Feasibility Assessment Current market value of each asset or portfolio of assets is determined employing the most relevant valuation methodology under documented market conditions. HRA determines and employs the most feasible factors based on supporting data interpreted through experience. Valuation testing models are varied assuming differing strategic profiles advanced to determine the most likely results with most viable strategic options determined based on feasibility and on maximizing and/or preserving value and/or return. 3

5 Advisory Services Group - Special Assets Loan or Equity Investment Restructuring With the goal of reducing client risk through the preservation of value and return and/or managing within a mark to market process HRA will recommend and implement loan or equity investment restructuring options designed to achieve client or portfolio strategic objectives ranging from liquidation to restructuring within a determined hold strategy. All available options reviewed to protect client s interests: substitute or additional borrower equity or collateral, forensic audits, recourse or threat of recourse for bad acts to maximize or otherwise enhance the client s recovery options. Foreclosure/Asset Acquisition Administration As determined by events managed within the overall process and if taking title through the foreclosure represents the most viable solution to preserving and protecting client s interests HRA s investment management professionals will take all necessary steps to guide the process ensuing the desired results. HRA will oversee and manage the property to ensure the establishment of proper controls and appropriate stewardship as owned real estate. Portfolio-Asset Management/Repositioning HRA will implement established institutional level processes and procedures ensuring portfolio and asset management controls for distressed loan or equity investments are in place. Disciplines employed will be directed at generating maximum return and value. Process will administer the leasing and physical maintenance of each property. Portfolio and Asset Level Business and Strategic Plans are generated to guide the investment management and administrative process. Asset repositioning strategies may be recommended and implemented to preserve or improve asset performance within a framework of client objective. HRA will manage all financial reporting requirements as tailored to client s requirements inclusive within the overall service relationship. Portfolio and property level strategies are directed at asset retention, restructuring, repositioning and/or disposition/liquidation depending on determinations reached as a result of the evaluation process in concert with client s objectives. 4

6 Advisory Services Group - Special Assets Bankruptcy Administration Asset-Portfolio Recapitalization If borrower, guarantor or tenant bankruptcies impact or delay the implementation of an adopted investment strategy, HRA s seasoned professionals will guide and negotiate the process on behalf of client interests to ensure the optimal outcome. HRA will seek to obtain substitute debt or recapitalize wholly owned or joint venture investments on behalf of ownership based on case-bycase circumstance. Asset/Debt and Portfolio Disposition Through its national network of investment sales professionals and investors, HRA will strategically and effectively market assets or portfolio of assets for sale with the goal of absolutely maximizing proceeds. Determination of sales by portfolio or individual whole loans as recommended, with whole loans dispositions. HRA manages all aspects of the process from initial solicitations to the closing table, employing targeted direct, broad based marketing techniques. 5

7 Advisory Services Group - Special Assets Collective Representative Experience HRA s senior team members, responsible for Special Assets; individually possess in excess of 25 years in real estate investment management experience at institutional levels having worked through every recessionary period since the 1980 s while in positions of direct responsibility and authority at major life insurance companies and banking institutions charged with responsibility for large portfolios of distressed debt. Heavily involved in distressed asset and loan portfolio workout negotiations during the recession period of where real estate was at the leading edge of the recession. Intense period of negotiations, modifications, foreclosures, conversion to ownership, and disposition responsibility over several years. Deep experience with high quality real estate investment workouts with sophisticated borrowers dealing with default and/or material levels of loan impairment. Takeover experience with unfinished development projects including hotels, condominiums, retail strip centers and office buildings requiring final construction completion, lease-up/sale and disposition. Collectively managed distressed loan portfolios in excess of $4.0 billion in the Northeast and Mid-Atlantic and Southeast regions with an average loan size of $25 Million. Portfolio Implementation Protocol Determining Risk by Loan Rating Understand Magnitude of Problem Borrower Credit Analysis Asset/Portfolio Valuation and Positioning Cash Management Agreement Protect Client Define Responsibilities Forensic Accounting Administration of Other Security Environmental Assessment Identify Risks Before Entering Line of Title Development of the Optimal Strategic Solution Loan Modification Foreclosure Deed in Lieu of Foreclosure Mortgagee in Possession Taking Control Cash Flow Monitoring Reporting Requirements Retaining and/or Maximizing Value and Return Asset Administration and Reporting Regulatory Compliance Administration The Final Resolution; Retention or Disposition Execution Responsible for workout teams implementing required protocols to protect employer s interests. 6

8 Senior Management Profiles John M. Hart Chairman & Consultant William H. Holmes Senior Managing Partner As Founder and Chairman of Hart Realty Advisers, Mr. Hart started his real estate career in 1962, a career that spans four decades and several real estate cycles. Prior to establishing the firm, Mr. Hart was head of real estate for CIGNA, a leading mortgage lender and real estate investor in the life insurance industry. During his tenure at CIGNA, Mr. Hart s real estate division was a performance leader achieving among the highest real estate returns and lowest delinquencies in the industry. With extensive experience nationally, Mr. Hart, on behalf of institutional clients, has structured, negotiated and overseen construction loans, longterm loans, leases, joint ventures and direct acquisitions and dispositions of all property types and in large syndicated projects with particular experience in foreclosure mitigation and structured workouts. Mr. Hart holds leadership roles in various industry associations and maintains an active network of developers, operators and service providers. International Council of Shopping Centers Four Term Trustee Pension Real Estate Association Counselors of Real Estate Mortgage Bankers Association American Hotel & Motel Association University of Michigan B.S. As a Senior Managing Principal of Hart Realty Advisers, Mr. Holmes is directly involved in all significant decisions on behalf of the firm s institutional clients. His primary responsibility is to represent Hart Realty Advisers to the investment community. He also shares specific executive responsibilities with the other Managing Partners as well as serving on the firm s Executive, Management and Investment Committees. Prior to joining the Hart Realty Advisers in 1982, Mr. Holmes spent four years in management roles in CIGNA s real estate investment area and also worked at Barclays American Business Credit as a real estate investment officer. National Association of Real Estate Investment Managers Real Estate Finance Association Pension Real Estate Association International Council of Shopping Centers University of Rhode Island B.S. University of Connecticut M.B.A. 7

9 Senior Management Profiles David S. Hart Senior Managing Partner John C. Molloy Managing Partner Portfolio Management As a Senior Managing Principal of Hart Realty Advisers, Mr. Hart works in collaboration with William Holmes on all significant decisions regarding the firm. Mr. Hart joined Hart Realty Advisers in 1985 and currently coordinates the acquisition process sourcing, reviewing, and underwriting potential real estate investments. In this role, Mr. Hart coordinates the selection and performance of financial analysts, and third parties involved in the underwriting, financial modeling, due diligence, and closing of new transactions. Mr. Hart serves on the firm s Executive, Management, Acquisitions and Investment Committees. International Council of Shopping Centers National Association of Real Estate Investment Managers Pension Real Estate Association Real Estate Finance Association Urban Land Institute University of New Hampshire B.S. Harvard University Advanced Management Real Estate Development Program Mr. Molloy joined Hart Realty Advisers in 1995 and is responsible for the oversight of its real estate portfolios, bringing over 30 years of institutional level real estate experience in direct lending and investment management. He is a member of Hart Realty Advisers Management, Investment and Asset Management Committees. Previously, Mr. Molloy was with the Travelers Insurance Company - Real Estate Investment Department where he served as a Vice President and General Manager responsible for regional debt and equity portfolios in various cities, including New York, Chicago, Kansas City, and Boston. Mr. Molloy s background incorporates distressed asset experience, in a major U.S. market, involving borrower credit analysis, debt restructuring, litigation and bankruptcy administration, foreclosures, asset repositioning, financial reporting along with property and portfolio dispositions responsibilities. National Association of Real Estate Investment Managers National Council of Real Estate Investment Fiduciaries Pension Real Estate Association Urban Land Institute International Council of Shopping Centers Central Connecticut State University B.S. 8

10 Senior Management Profiles Maria R. Clarke, CFA Managing Director - Investment Strategy Ms. Clarke, CFA, brings over 20 years of real estate and investment management experience serving institutional clients such as Taft-Hartley funds and public pension plans. Previously, Ms. Clarke held several senior level positions with the AFL- CIO Investment Program; a $6.4 billion real estate investment platform comprised of the Housing Investment Trust, a $ 3.5 billion open-end, commingled investment fund, with a portfolio internally managed and consisting primarily of high credit quality fixed-income securities; and The Building Investment Trust, a $ 2.9 open-ended equity fund focusing on commercial real estate throughout the U.S. Most recently, Ms. Clarke was the Senior Investment Officer for the AFL- CIO Investment Trust, a $2.9 billion equity real estate fund. Ms. Clarke s primary responsibility was sourcing and structuring commercial real estate transactions throughout the United States, developing portfolio strategies, establishing asset and portfolio management guidelines, and monitoring investment performance relative to portfolio objectives. During her tenure, Ms. Clarke was directly involved in the creation and execution of several national real estate investment initiatives totaling over $ 900 million which involved negotiating with several Government Sponsored Enterprises (GSE s) private placement terms for MBS purchase. Prior to joining the Trusts, Ms. Clarke was a Senior Consultant for The Asset Strategies Group and managed the underwriting and securitization process for over $ 2 billion in residential and commercial loans sold to the Resolution Trust Corporation. Pension Real Estate Association Urban Land Institute Vice Chair At-Large, Public-Private Council CFA Institute DC Building Industry Association Washington Board of Trade, Regional Development DC Chamber of Commerce Florida State University B.A. University of Miami M.B.A. Georgetown University Executive Management Program Kevin M. Miller, CPA Managing Partner Investment Transactions Mr. Miller joined the firm in 2000 and is responsible for sourcing, underwriting and closing acquisitions throughout various regions of the country. Mr. Miller serves as Chair of the firm s Acquisition Committee and is a member of the Management and Investment Committees. Prior to joining HRA, Mr. Miller was a member of KPMG LLP s real estate practice as a manager of a group responsible for audits of public and private real estate partnerships, investment trusts, and separate accounts. Mr. Miller s clients included real estate advisors and financial institutions that invested in open- and closed-end funds and separate accounts. Mr. Miller brings a broad base of experience in evaluating underperforming commercial loans, as well as the creditworthiness of borrowers, reasonableness of institutional third party appraisals and values, the adequacy of loan loss reserves and the related loan write-downs. International Council of Shopping Centers National Association of Industrial and Office Properties National Multi-housing Council Real Estate Finance Association Bryant College B.S. 9

11 Senior Management Profiles Peter C. Grzybala Managing Director Investment Management Daryl R. Krivanec, CFA Senior Director Investment Management Mr. Grzybala is in charge of the day-to-day operations of the Asset Management Group, has tactical responsibility for the real estate assets portfolio, and serves as member of the firm s Management and Asset Management Committee. Mr. Grzybala joined Hart Realty Advisers in 1999, bringing 25 years of institutional real estate lending and investment management experience to the firm from a variety of positions. Most recently, he was with Phoenix Realty Advisers serving as senior vice president for the Eastern Regional Real Estate Team and subsequently as managing director of the Commercial Asset Management Group, where he was responsible for a diverse portfolio of fiduciary and corporate accounts. Mr. Grzybala brings over six years of Special Assets experience in various institutional real estate environments which include Commercial Banking, Credit and Life Insurance Companies. His experience involves, credit and loan review, debt restructuring, litigation and bankruptcy administration, foreclosures, asset repositioning, defaulted project completions, distressed asset reporting, along with property and portfolio dispositions and securitization. Institute of Real Estate Management National Multi-housing Council Urban Land Institute Real Estate Finance Association International Council of Shopping Centers BOMA International University of Hartford Pace University Graduate Studies St. Bonaventure University B.B.A. Mr. Krivanec joined Hart Realty Advisers in 2001 and is responsible for the tactical and operational aspects of a client assets portfolio as well as serving on the firm s Asset Management Committee. Before coming to Hart Realty Advisers, he was employed for 15 years at CIGNA Investment Management where he held a variety of debt and equity positions. Most recently, he was vice president in Commercial Mortgage Portfolio Management responsible for managing the analytics of CIGNA s $11 billion mortgage portfolio. Mr. Krivanec brings several years of Special Assets experience from his tenure at CIGNA where he was involved in asset quality review, credit review, debt and equity investment restructuring, foreclosed asset repositioning and disposition. National Council of Real Estate Investment Fiduciaries CFA Institute Hartford Society of Financial Analysts International Council of Shopping Centers National Association of Real Estate Investment Managers Real Estate Finance Association University of Connecticut B.S. 10

12 Senior Management Profiles David B. Huntley, CPA Chief Financial Officer Financial Reporting Kim L. DiPietro, CFA Director Research and Client Services Mr. Huntley joined Hart Realty Advisers in 2001 and has direct responsibility for all property and client financial accounting and reporting for the firm s investment portfolio as well as corporate operations; he also serves as member of the firm s Management and Asset Management Committees. Before joining Hart Realty Advisers, Mr. Huntley was assistant director of real estate accounting at CIGNA. Prior to his position at CIGNA, he was with KPMG s Financial Services Group responsible for the auditing needs of a variety of corporate clients and financial institution. Mr. Huntley s experience includes bank audits prior to FDIC/RTC takeover, non-performing loan review and loan portfolio reserve and write-down assessment. Ms. DiPietro provides economic, demographic and fundamental research supporting investment strategy development and execution. She also produces timely research reports such as the Real Estate Overview & Outlook or insight papers specializing in one particular property type for the firm s clients and staff. Prior to joining Hart Realty Advisers, Ms. DiPietro spent 15 years at CIGNA Investment Management, most recently as vice president of strategy & research at CIGNA Realty Investors. She also held other analyst positions within CIGNA Realty Investors, including asset manager, loan underwriter, and investment analyst for limited partnerships as well as investment analyst with Liberty Mutual Insurance Group in Boston for four years. National Council of Real Estate Investment Fiduciaries National Association of Real Estate Investment Managers American Institute of CPAs University of Massachusetts, Amherst B.B.A. CFA Institute Hartford Society of Financial Analysts Real Estate Finance Association University of Massachusetts B.A. Boston University M.B.A. Massachusetts Society of CPAs 11

13 Special Assets - Representative Transactions Restructured or dissolved an unprofitable institutional debt/equity development and financed multi-family partnership investments in Georgia, Florida and Maryland. Returned assets to profitability through the substitution of bond credit enhancements and the ultimate sale of assets to individual investors or institutional managed closed-end funds. Assumed responsibility for the take-back of a 13-story ocean front condominium development at 50% completion. Reengaged the architectural firm, replaced the bankrupt general contractor, supervised the completion of construction, engaged condominium marketing specialist and collaborated in the creation of a new marketing strategy. Executed marketing strategy, completed sale of all units with end-loan financing and served as interim president of the condominium associates. Acquired and managed a 400-unit Miami, Florida golf and country club community resulting in a sale to a national NYSE home builder. Marketed and completed Phoenix Home Life s Landmark; a $350 million CMBS issuance and Special Asset Sales. Acquired and managed through liquidation a portfolio of suburban Marlborough, Massachusetts office buildings taken by foreclosure. Engaged property managers and leasing professionals to stabilize assets and successfully sold the portfolio utilizing purchase money financing. Responsible for the sale of Phoenix Home Life s equity real estate portfolio to Donaldson Lufkin & Jenrette. Conducted marketing activities and supervised major components of the bid solicitation process. Supervised the due diligence and major aspects of the closing process while mentoring bidders. Supervised team of asset managers to achieve desired liquidation result. Successful final execution provided Phoenix with an exit from the equity real estate business while earning a substantial profit. Managed audits and financial statement preparations of SEC regulated banks, investment, insurance and private equity companies, real estate investment advisors, developers, and real estate limited partnerships. Audit responsibilities included the review of all client loan portfolios, underperforming commercial real estate loans, evaluation of borrower credit, adequacy of loan loss reserves and write-downs. Audit manager for the real estate loan portfolio of Citigroup (f/k/a Travelers Insurance Company). Responsibilities similar to those for banking institutions in addition to the review and evaluation of reasonableness for third party appraisals for the real estate loan portfolio. Responsible for a $1.5 billion commercial real estate loan portfolio under significant distress and $800 million in equity investments including a $400 million CBD development project in the Northeast during the recession of Managed a workout team for several years with the task of: problem recognition, evaluation, debt restructuring, foreclosure, loss mitigation and portfolio liquidation. 12

14 Investment Locations Headquarters Regional Office Industrial Multi-family Office Retail 13

15 One Mill Pond Lane Simsbury, CT