EFTA01116021.pdf

Summary of RFI Investments As of June 30, 2014 RFI's RFI's Acquisition Cumulative 6/30/2014 Unrealized Date Acquisition 6/30/2014 6/30/2014 Cumulative Fair Value Outstanding Cost Basis less RFI's Equity 5i Asset/Location Foreclosure Price C061 Basis Fair Value' Fair Value Adjustment Debt RFI Outstanding Net Real Estate Increase (Note/REO) Date (110%l 1100%) (100%) Adjustment % Change (1009?) Ownership Debt Values Value'c (Decrease)6 San Francisco Apartment 2124/2011 Portfolio I 7 523.5 524.7 545.1 520.4 82.6% 514.2 20% 52.1 $6.2 193.97E NIA San halICISCO. CA IREOt Camellia Trace Apartments 3/24/2011 I1.3 11.6 14.22 2.6 22.2% 7.8 1005+ 3.8 6.4 67.8% Jackson. TN (REM N/A Cherry Grove Apartments 3/24/2011 18.9 19.9 25.4 5.5 27.9% 13.1 100% 6.8 12.3 82.0% Jackson. TN (REM NIA Crystal Lake Apartments 10/11/2011 7.7 7.9 13.1 5.2 65.8% 6.1 100% 1.8 7.0 286.7% Pensacola. H. Now) I I/17/2011 Westchase Ranch Apartments 10/19/201 I 15.5 16.2 22.9 6.7 41.1% 11.4 100% 4.8 11.5 138.5% Houston. TX (Note) II/1/2011 Foxboro Apartments 10/19/2011 6.5 6.4 9.3 2.9 45.2% 4.5 100% 1.9 4.8 148.3% Itousion. TX (Note) 10/20/2011 The Park Apartments .10/19/201 5.6 5.9 7.5 1.6 27.3% 4.0 100% 1.9 3.5 88.4% Columbia. SC Mole) II/1/2011 Shasta Crossroads J/10/7017 Shopping Center 7.4 8.0 I 1.3 3.3 41.2% 60% 2.5 3 4.4 2 79.8% 1/17/2012 Retlibov. CA iNota Carrington Place at Wildewood Apartments 17.3 17.3 20.2 2.9 16.7% 12.5 100% 4.8 7.7 59.9% 4/22012 Columbia. SC (Nola) 4. The general partner ofRH determines the "Fair Value" of its assets on a quarterly basis in accordance with GAAP. GAAP reporting requires that investments in unconsolidatedjoint ventures include other assets in addition to real estate in the Fair Value ofthe investments in such joint ventures. As used herein, however, Fair Value includes only the value ofthe real estate and excludes any value associated with other assets. such as cash held at the investment entity level. The Fair Value of real estate assets is de:maned utilizing a number ofmethodologies which include. but are not limited to. discounted cash flow analysis. capitalization of current or stabilizednet operating income. and market sales comparables. Because considerable judgment is required in detemtining the estimates of value. amounts ultimately realizedfrom investments may vary significantlyfront the Fair Values presented. S. Represents Mrs interest in 6/30/2014 Fair Value less 6/30/2014 Outstanding Debt Amount ("Net Real Estate Fair Value"). 6. Compares RFFs Net Real Estate Fair Value to RFFs 6/30/2014 Cost Basis less Outstanding Debt. 7. Excludes the allocated acquisition price oftwelve assets in the Portfolio that have been liquidated. 8. RF1's 6/30/2014 Cost Basis less Outstanding Debt and Net Real Estate Fair Value exclude preferred equity of $3.9 million. PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 9 EFTA01116021  Summary of RFI Investments As of June 30, 2014 REC. RF1's Acquisition Como lath C 6/311/2914 Unrealized Date Acquisition 6/30/2014 6/30/2014 Cumulative Fair Value Outstanding Cost Basis less RF1's Equity % Asset/Location Foreclosure Price Cost Basis Fair Value9 Fair Value Adjustment Debt RFI Outstanding Net Real Estate Increase (Note/REOI Date 1100%) 1100%) (100%) Adjustment Change 1004?} Ownership Debt Fair Valueni (Deere-aw)' I Highlands at Alexander 2/28/2012 Pointe Apartments 526.6 526.6 $31.2 54.6 17.2% S18.6 100% S8.0 $12.6 57.0% manoi 2 Charlotte. NC (Note) Portofino Apartments 3/2/2012 Pittsburg. CA (Note) 4/13/2012 12 6 13.1 16.5 3.4 25.8% 9.0 100% 4.1 7.5 81.5% Hampton Inn & Suites 107/7017 9.1 10.2 9.4 (0.8) (7.6%) 6.5 1011% 3.7 2.9 (21.1%) Woodbridge. VA (REO) N/A Meridian Village Shopping 4/24/2012 Center 13 6 14.2 15.0 0.8 5.5% 9.6 50% 2.3 2.7 16.8% Bellingham. WA (REM N/A Presidential Tower 7/20/2012 Arlington. VA (Note) 48.2 63.8 59.4 (4.4) (6.8%) 45.3 25% 4.6 3.5 (23.5%) 7/20/2012 Vanderbilt Lodge Apartments 7/24/2012 2.8 3.0 4.0 1.0 34.0% 2.0 100% 1.0 2.0 103.2% Houston. 'EX (RE01 N/A Fairfield Inn & Suites W29/2017 Chantilly. VA (REO) 7.3 73 5.9 (1.8) (23.1%) 4.7 90% 2.7 1.1 (58.9%) N/A Somerset Apartments I0P6/7017 10.9 11.4 12.7 1.3 11.6% 7.5 100% 3.9 5.2 34.5% Bowdon. TX IRCOi N/A Seville Commons Shopping 11/30/2012 Center 10.1 10.9 12.1 12 11.0% 6.7 100% 4.2 5.4 28.9% 12/42012 Arlington. TX i Note) San Francisco Apartment 12/19/2012 Portfolio II 16.4 16.8 19.4 2.6 15.9% 11.4 50% 2.7 4.0 49.5% N/A San Francisco. CA tRBO) 9. The generalpartner ofRF1determines the "Fair Value" ofits assets on a quarterly basis in accordance with GMP. GAM" reporting requires that investments in unconsolidatedjoint ventures include other assets in addition to real estate in the Fair Value ofthe investments in such joint ventures. As used herein, however, Fair Value includes only the whit ofthe real estate and excludes any value associated with other assets. such as cash held at the investment entity level. The Fair Value of real estate assets is determined utilizing a number ofmethodologies which include. but are not limited to. discounted cash flow analysis. capitalization of current or stabilizednet operating income, and market sales comparables. Because considerable judgment is required in detemtining the estimates of value. amounts ultimately realize.,tfrom investments may vaty significantlyfront the Fair Values presented. 10. Represents RF1's interest in 6/30/2014 Fair Value less 6/30/2014 Outstanding Debt Amount ("Net Real Estate Fair Value"). Compares RF1's Net Real Estate Fair Value to RF1's 6/30/2014 Con Basis less Outstanding Debt. PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 10 EFTA01116022  Summary of RFI Investments As of June 30, 2014 RITs RF1's Acquisition Cumulative 6/3012014 Unrealized flats Acquisition 6/30/2014 6/30/2014 Cumulative Fair Value Outstanding Cost Basis less RETs Equity % Asset/l.twation Foreclosure Price Cost Basis Fair Value" Fair Value Adjustment Debt RFI Outstanding Net Real Estate Increase (Note/REOI Date 1100%) 1100%) 1100%) Adjustment % Change 1100%) Ownership Debt Fair Value" 1Decrease)14 Audubon Park Apartments 12/31/2012 57.4 57.5 $10.6 $3.1 41.1% 55.4 100% $2.1 55.2 147.1% Arhogton.7X<Notei 1/15/2013 Cambridge Place Apartments 12/31/2012 4.9 9.5 3.7 63.1% 3.7 100% 2.1 5.8 171.6% Houston. TX (Note) 1/15/2013 Hilltop Apartments 17/1117017 8.(1 8.4 11.0 2.6 30.7% 5.9 100% 2.5 5.1 101.9% North Ittchl.uul Hills. TX (Note) 1/152013 Knollwood Apartments 12/31/2012 17.5 18.2 23.8 5.6 30.9% 13.2 100% 5.0 10.6 111.9% tlatelwood. MO I Nt.lc I I/15/2013 Rollingwood Apartments 12/31/2012 12.0 12.5 14.9 2.4 19.2% 8.8 100% 3.7 6.1 64.5% Riciunond. VA 'Note) 1/112013 II North at White Oak 12/312012 Apartments 38.9 41.5 46.9 5.4 13.0% 29.2 100% 12.3 17.7 43.8% I/11/2013 Rtclunond. VA (Note) Parkway Medical Plaza )1151201.3 14.0 14.5 14.6 0.1 0.1% 10.3 87.51% 3.7 3.8 0.4% Henderson. NV MO) N/A Steadfast Mall Portfolio I/16/2013 Everett and Federal Way. WA 134 100.2 133.9 139.3 5.4 4.0% 85.2 1037% 5.0 5.6 11.0% WA Patty) Allan at the Lakes 2128/2013 Apartments 53.7 56.0 60.7 4.7 8.3% 41.0 95% 14.3 18.7 31.0% 4/5/2013 Las Vegas. NV (Note) 12 The generalpartner ofRFIdetermines the "Fair Value" ofits assets on a quarterly basis in accordance with GAM). GAAP reporting requires that investments in unconsolidatedjoint ventures include other assets in addition to real estate in the Fair Value ofthe investments in such joint ventures. As used herein, however. Fair Value includes only the value ofthe real estate and excludes any value associated with other assets. such as cash beide)? the investment entity level. The Fair Value of real estate assets is determined utilizing a number ofmethodologies which include. but are not limited to. discounted cash flow analysis. capitalization of current or stabilizednet operating income. and market sales comparables. Because considerable judgment is required in detemtining the estimates of value. amounts ultimately realizedfrom investments may vary significantlyfrom the Fair Values presented. 13 Represents RF1's interest in 6/30/2014 Fair Value less 6/30/2014 Outstanding Debt Amount ("Net Real Estate Fair Value"). 14 Compares RFFs Net Real Estate Fair Value to RFFs 6/30/2014 Cost Basis less Outstanding Debt. PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 jI EFTA01116023  Summary of RFI Investments As of June 30, 2014 F I's REt's Acquisition Cumulative 6/31)/21)14 Unrealized Date Acquisition 6/30/2014 6/30/2014 Cumulative Fair Value Outstanding Cost Basic leas RFD's Equity % Asset/Location Foreclosure Price Coot Basic Fair Valueli Fair Value Adjustment Debt NEI Outstanding Net Real Estate Increase 16 (Note/RE:01 Date 1100%) 1100%1 1100%) Adjustment % Change 1100%1 Ownership Debt Fair Value (Decrease)" Bridgeport Center 4/4/2013 523.5 $25.1 $25.6 $0.5 1.8% $17.7 90% $6.7 57.1 5.9% Tampa. FL (3'' Parry, NIA PGA Plaza Shopping Center 7/212013 23.0 34.1) 35.1 1.1 3.3% 23.7 75% 7.7 8.6 10.9% Palm Beach Gardens. FL (Note) 7/11/2013 Cedarbrook Apartments 8/1/2013 63 6.9 7.7 0.8 11.9% 4.0 100% 2.9 3.7 27.9% Dallas. TX (Note) 8/1/2013 Park on Rosemeade 8/1/2013 Apartments 6.7 7.0 9.1 2.1 30.1% 4.1 100% 2.9 5.0 72.8% 8/1/2013 Dall.o. TX 'Note, Shadow Creek Apartments §0Mal 9.6 10.0 11.0 1.0 9.4% 5.8 100% 4.2 5.2 22.1% North Itahl.md lbIls. TX (Note) 8/112013 The Pinnacle Apartments 8/1/2013 5.8 6.1 7.1 1.0 16.4% 3.7 1C4)% 2.4 3.4 41.8% IxwassIle. TX 'Note! 8/1/2013 Westwood Village 8/1)2013 Apartments 10.9 11.7 12.3 0.6 5.4% 7.0 100% 4.7 5.3 13.5% 8/1120B bums. TX (Note) Crystal Bay Apartments 8/1/2013 11.2 12.4 13.0 0.6 4.6% 7.4 100% 5.0 5.6 11.3% Welder. TX (Nide. 8/1/2013 Savoy Manor Apartments 8 / 112013 5.4 6.1 7.3 1.2 19.8% 3.4 180% 2.7 3.9 45.0% Houston. TX (Moan 8/1)2013 Southpoint Apartments 8/1/2013 7.2 7.8 9.1 13 15.6% 5.2 100% 2.6 3.9 46.6% Nuristan. TX (Note) 8/1120B 15. The generalpartner ofRF1determines the "Fair Value" ofits assets on a quarterly basis in accordance with GAAR. CAM" reposing requires that investments in unconsolidatedjoint ventures include other assets in addition to real estate in the Fair Value ofthe investments in such joint ventures. As used herein. however. Fair Value includes only the value ofthe real estate and excludes any value associated with other assets. such as cash held at the investment entity level. The Fair Value of real estate assets is determined utilizing a number ofmethodologies which include. but are not limited to. discounted cash flow analysis. capitalization of current or stabilizednet operating income. and market sales comparables. Because considerable judgment is required in determining the estimates of value. amounts ultimately realizedfrom investments may vary significantlyfrom the Fair Values presented. 16. Represents RFD's interest in 6/30/2014 Fair Value less 6/30/2014 Outstanding Debt Amount ("Net Real Estate Fair Value"). 17. Compares RFD's Net Real Estate Fair Value to RFD's 6/30/2014 Cost Basis less Outstanding Debt. PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 12 EFTA01116024  Summary of RFI Investments As of June 30, 2014 RF1's RF1's Acquisition Cumulative 6/30/2014 Unrealized Date Acquisition 6/30/2014 6/30/2014 Cumulative Fair Value Outstanding Cost Basis less RFI's Equity Asset/Location Foreclosure Price Cost Basis Fair Value" ' Fair Value Adjustment Debt RFT Outstanding Net Real Estate Increase 19 (Note/REM Date (100%) 1100%) (100%1 Adjustment ele Change 1100%) Ownership Debt Fair Value (Decrease)2° Wolf Creek Apartments 8/112013 54.6 55.4 $8.6 S3.2 61.0% 53.1 100% $2.3 55.5 144.2% Houston. TX INote) 8/1/2013 20 North Orange 8/2/2013 28.3 26.9 32.6 5.7 21.1% 15.2 100% 11.8 17.5 48.4% Orlando. (Now) TBD 7000 Central Park 9/11/2013 56.6 57.2 59.9 2.7 4.7% 30.0 60% 11.3 2t 13.0 2 t 14.2% Atlanta. GA (Note) 11/22/2013 Meridian Plaza 10/1/2013 11.6 12.4 14.5 2.1 17.3% 7.1 5U% 2.6 3.7 40.9% Cannel. IN 'Note) 10/31/2013 Airpark Business Center 10/7/2013 62.8 63.8 64.7 0.9 1.3% 46.6 64.87% 11.2 11.8 4.8% NaNhv IIle. TN (Note) 10/7/2013 7025 North Scottsdale Road 11/14/2013 18A) 18.3 18.4 0.1 0.8% 11.0 100% 7.3 7.4 2.1% Nvothtble. AZ (Nola) 11/15/2013 Windmill Landing 11/21/2013 Apartments 12.2 12.1 13.0 0.9 7.0% 9.9 100% 2.3 3.1 37.8% 1/7/2014 HouMon. TX (Nott Paces Village Apartments 12/11/2013 12.3 123 12.4 -0.1 -0.4% 9.1) 100% 3.5 3.4 -13% the.emboro. NC (RHO) N/A TotaUWeighted Average $844.1 $929.6 $1,047.3 5117.1 12.6% $6115 $212A 8306.4 44.1% 18. The generalpartner ofRF1determines the "Fair Value" ofits assets on a quarterly basis in accordance with GAAP. GAAP reporting requires that investments in unconsolidatedjoint ventures include other assets in addition to real estate in the Fair Value ofthe investments in such joint ventures. As used herein. however. Fair Value includes only the value ofthe real estate and excludes any value associated with other assets. such as cash held at the investment entity level. The Fair Value of real estate assets is determined utilizing a number ofmethodologies which include. but are not limited to. discounted cash flow analysis. capitalization of current or stabilizednet operating income. and market sales comparables. Because considerable judgment is required in determining the estimates of value. amounts ultimately realizedfrom investments may vary significantlyfrom the Fair Values presented. 19. Represents Mrs interest in 6/30/2014 Fair Value less 6/30/2014 Outstanding Debt Amount ("Net Real Estate Fair Value"). 20. Compares RFFs Net Real Estate Fair Value to RFFs 6/30/2014 Coat Basis less Outstanding Debt 21. RF1's 6/30/2014 Cost Basis less Outstanding Debt and Net Real Estate Fair Value exclude the outstanding mortgage debt as well as preferred equity• of 58.3 million PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 13 EFTA01116025  RFI Realized Investments PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 14 EFTA01116026  Washington Business Park • In September 2012, RFI (75%), in a joint venture with The Artery Group (15%) and NAI Michael (10%), acquired the defaulted loan secured by Washington Business Park for $42.0 million. The business plan included foreclosing on the collateral, replacing management, reducing expenses, re- leasing the property and decreasing the loss to lease. • Washington Business Park consists of nine flex office/industrial buildings in Lanham, Maryland. • The property, while well located, was over levered, undermanaged (82.8% occupied) and over expensed. • Joint venture partners included the party (NAI Michael) that originally aggregated the land for the office/industrial park and managed the property to market occupancy until 2007. • In December 2012, the borrower made an attractive proposal to purchase the loan. The borrower appeared to be motivated by tax concerns and uncertainties related to a potential foreclosure. Given the attractiveness of the proposal, the joint venture made the decision to permit a discounted payoff of the mortgage note rather than proceed with the foreclosure. RFI Acquisition Sale Purchase Sale Equity RFI Total Gross Gross Asset/Location Sq. Ft. Date Date Price Price Contribution Proceeds22 Equity Multiple=' IRR23. 24 Washington Business Park 573.397 9/7/2012 12/5/2012 542.000.000 $51.500.000 511.000.000 $18.718.595 N/Nt Lanham. MD 22. RFI Total Proceeds are inclusive ofsale proceeds and interim cash flows. 23. A portion of the RFI Equity Contribution was temporarily financed using RF1's subscription facility and. as a result. the gross equity multiple presented herein is based on the amount of equity that was called from investors. The gross equip• multiple is based upon the REI equity allocated to the asset and includes cash flow generated by the asset while REI had an interest in the asset but does not reflect deductions for management fees. fund expenses (which are described in other documents provided to potential investors upon request) or the carried interest paid or payable to the RFI's Investment Manager or General Partner which. in the aggregate. may be substantial and, accordingly. suchfigures do not reflect the actual returns that would ultimately be realized by an investor.. 24. "N/M" standsfor "not meaningful". The IRR is artificially high due to the short term hold period ofthe investment. which was not a parr of the investment manager's business plan. However. for purposes oftransparency. the gross MR was 5,644.1%. PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 15 EFTA01116027  Cotton Exchange Hotel • In February 2013, RFI (80%), in a joint venture with The Artery Group (20%), acquired the non-performing note secured by the Cotton Exchange Hotel for $13.5 million. The business plan included foreclosing on the collateral in June 2013 and redeveloping the property. • The Cotton Exchange Hotel is extremely well located, within a few minutes walk of the French Quarter. However, it was grossly underrnanaged under the prior flag due to poor capitalization. • During the four month holding period, an operating plan was put in place to re-flag the hotel as a Marriott Fairfield Inn & Suites, as well as to redevelop the hotel with several million dollars of additional capital expenditures. • The business plan was proceeding as scheduled, but when the foreclosure sale was held in June 2013, a third party was willing to pay a higher price. • The asset was unlevered. Had the business plan proceeded, the amount of equity would likely have been reduced to approximately 25% of value post foreclosure and redevelopment which is significantly lower than the percentage of equity used to acquire the asset. RFI A CliLliSiii1/11 Sale Pt] chase Sale Equity RFI Total Gross Grass Asset/Location ILumis Date Date Price Price Contribution Proceed.s2s Equity Multiple's IRR'c•" Cotton Exchange Hotel 223 2/1/2013 7/2/2013 S13.500.000 S17.800.000 411,703,780 S14.472.138 1.24x N/Nt New Orleans. LA 25. RFI Total Proceeds are inclusive of sale proceeds and interim cashflows. 26. A portion of the RH Equity Contribution was temporarily financed using RR 's subscription facility and, as a result, the gross equity multiple presented herein is based on the amount of equity that was calledfrom investors. The gross equity multiple is based upon the RP! equity allocated to the asset and include cash flows generated by the asset while RH had an interest in the asset but does not reflect deductions for management fees, fund menses (which are described in other documents provided to potential investors upon request) or the carried interest paid or payable to the RFTs Investment Manager or General Partner which, in the aggregate. may be substantial and. accordingly. suchfigures do not reflect the actual returns that would ultimately be realized by an investor... 27. "AVM" stands for "nor meaningful". The !RR is artificially high due to the short term holdperiod of the investment which was not a part of the investment manager's business plan. However, for purposes of transparency. the gross IRR was 59.1%. PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 16 EFTA01116028  Cary Brook Apartments • In October 2010, RFI acquired Cary Brook Apartments for $15.2 million. The business plan included increasing both rents and occupancy to market levels. • Before acquisition, Cary Brook underwent a $1.3 million renovation that included, but was not limited to, the clubhouse, leasing office and fitness center. • Shortly after acquisition, RFI made in excess of $1.0 million of additional capital improvements to enhance the desirability of the property. • RFI was successful in executing its business plan well in advance of its goal by increasing both rent and occupancy to market levels. • In February 2014, RFI sold Cary Brook for $24.3 million, which exceeded the year five underwritten disposition price of approximately $18.9 million. RFI Acquisition Sale Purchase Sale Equity RFI Total Gross Gross Asset/Location Units Date Date Price Price Contribution's Proceeds" Equity Multiple" IRR" Cary Brook Apartments" 360 10/28/2010 2/18/2014 S15.220.000 $24.300.000 54.939.103 $14.518.458 -1.94‘ 43.5%. Cary. NC 28. RFI acquired Cary Brook in October 2010 as a "Warehoused Investment" (as contemplated by RFI's limited partnership agreement) before RFI's initial closing (which didnot occur until August 2011) through first mortgage financing of$11.600.000 plus a loanfrom RFI's generalpartner in the amount of $4939.103 (the "Warehouse Loan- ). representing what would have otherwise been RFI's equity. In August 2011. RFIheld its initial closing and repaid the Warehouse Loan utilizing the proceeds ofa capital call equal to the Initial Equity of 54.939.103 million plus $371.276 of interest on the Warehouse Loan. 29. The RFI Equity Contribution shown in the table above excludes the $371.276 of interest on the Warehouse Loan paid by RFI in August 2011. 30. RFI Total Proceeds are inclusive ofsale proceeds and interim cash flows 31. The gross equity multiple and gross IRR presented on this page are based upon the acquisition date of October 2010 (with the $4.939.103 Warehouse Loan being treated as ifit were equity ofRFObecause that is the date that RFI acquired. and the investment manager commenced management of. Cary Brook Apartments. Accordingly. the investment manager believes that the October 2010 acquisition date most accurately reflects the beginning of the investment period. The gross equity multiple and gross IRR are based upon the RFI equity allocated to the asset and include cashflows generated by the asset while RFIhad an interest in the asset but does not reflect deductions for managementfees. fund expenses (which are described in other documents provided to potential investors upon request) or the carried interest paid or payable to the RFI's Investment Manager or General Partner which. in the aggregate. may be substantial and. accordingly. such figures do not reflect the actual returns that would ultimately be realized by an investor. PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 17 EFTA01116029  Wateridge Plaza • In March 2011, RFI (20%), in a joint venture with Beacon Capital Partners LLC (80%), acquired Wateridge Plaza for $50.5 million. Wateridge Plaza suffered from a lack of capital investment by the previous owners. • Although Wateridge Plaza was fully occupied, the major tenant, which occupied approximately 70% of the property, had a lease rate more than 50% below market. The prior owner elected not to provide the capital for tenant improvements, and instead signed a lease that had an initial rent significantly below market with a subsequent step up to market in 2013. • The joint venture infused capital to provide both mechanical and cosmetic upgrades to the Class A office complex. In March 2014, the joint venture sold Wateridge Plaza to an unsolicited buyer for $72.5 million, which exceeded the year five underwritten disposition price of $70.1 million. RFI Acquisition Sale Purchase Sale Equity RFI Total Gross Gross Asstl/Location Sq. Ft. Date Date Price Price Contribution" ProceedsM Equity Multiple" IRR" Wateridge Plaza" 278.787 3/24/2011 3/13/2014 550.500.000 572,500,0(X) $3,697,410 $8,324.476 7.75N 32.4% San Diego. CA 32. RFI acquired a 20% joint venture interest in %Partridge Plaza in March 2011 as a "Warehoused Investment" (as contemplated by RFI's limitedpartnership agreement) before RFI's initial closing (which did not occur until August 20111 through first mortgage financing of 535.000.000. joint venture equity. and a loan for its 20% interest from RFI's generalpartner in the amount of 53.697,410 (the "Warehouse Loan"). representing what would have otherwise been RR's equity. In August 2011. RFI held its initial closing and repaid the Warehouse Loan utilizing the proceeds ofa capital call equal to the Initial Equity of 53.697.410plus 5135.712 of interest on the Warehouse Loan. 33. The RFI Equity Contribution shown in the table above excludes the 5135.712 of interest on the Warehouse Loan paid by RFI in August 2011. 34. RR Total Proceeds are inclusive ofsale proceeds and interim cashflows. 35. The gross equity multiple and gross !RR presented on this page are based upon the acquisition date ofMarch 2011 (with the $3.697.410 Warehouse Loan being treated as if it were equity ofRFI) because that is the date that RFI acquired. and the investment manager commenced management of. Wateridge Plaza. Accordingly. the investment manager believes that the March 2011 acquisition date most accurately reflects the beginning of the investment period. The gross equity multiple and gross IRR are based upon the RR equity allocated to the asset and includes rash floc generated by the asset while RR had an interest in the asset but does not reflect deductions for management fees. fund expenses (which are described in other documents provided to potential investors upon request) or the carried interest paid or payable to the RFI's Investment Manager or General Partner which. in the aggregate. may be substantial and. accordingly, such figures do nor reflect the actual returns dun would ultimately be realized by an investor. PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 18 EFTA01116030  20 North Orange • In August 2013, RFI acquired the non-performing note secured by 20 North Orange, a 267,233 square foot office building in Orlando, Florida for $28.3 million. The business plan included foreclosing on the collateral, cure deferred maintenance and leasing the building up to market occupancy levels. • During the foreclosure process, RFI, through the receiver, maintained the property and reduced certain operating expenses, which increased the NOI. • In September 2014, the borrower made an attractive proposal to purchase the loan. Given the attractiveness of the proposal, RFI made the decision to permit a discounted payoff of the mortgage note rather than proceed with the foreclosure. RFI Acquisition Sate Purchase Sale Equity RFI Total Grass Grass Asset/Location Sq. Et. Date Date Price Price Contribution Proceede Equity Multiples' IRR-s7 20 North Orange 267.233 87712013 9/18/2014 528.250.000 534.750.000 S I 5.835.000 821.884.268 1.38x 33 2c Orlando, FL 36. RFI Total Proceeds are inclusive ofsale proceeds and interim cash flows. 37. The gross equity multiple and gross IRR are based upon the RFI equity allocated to the asset and include cash flows generated by the asset while RFIhad an interest in the asset but does not reflect deductionsfor managementfees. fund expenses (which are described in other documents provided to potential investors upon request) or the carried interest paid or payable to the Mrs Investment Manager or General Partner which. in the aggregate. may be substantial and. accordingly. such figures do not reflect the actual returns that would ultimately be realized by an investor. PROPRIETARY & CONFIDENTIAL - DECEMBER 2014 19 EFTA01116031  Shasta Crossroads Shopping Center • In January 2012, RFI (60%), in a joint venture with Weingarten Realty Investors (40%), acquired the non-performing note secured by Shasta Crossroads Shopping Center for $7.4 million. The joint venture acquired title via foreclosure. At acquisition, Shasta Crossroads Shopping Center was 61% occupied. • At acquisition, one of the center's largest suites was occupied by a tenant paying a below-market lease rate signed by the previous owner. Because the lease was not given lender consent, it was "foreclosed out" at the time of foreclosure. The joint venture's business plan was to renegotiate the below-market lease and lease the vacant in-line space at the shopping center. • The joint venture was able to renegotiate the foreclosed out lease and lease the vacant in-line space well in advance of underwritten projections, achieving 100% occupancy within one year of acquisition. Cross RE1 Acquisition Sale Purchase Sale Equity RFI Total Equit!, Cross Asset/Location Sq. Ft. Date Date Price Price Contribution Proceeds" Multiple-'= I It R." Shasta Crossroads Shopping Center 75,783 1/10POP 10/21/2014 57.380.000 511.600.000 52.609.384 55.794.785 2.22x 37.1% Redding. California 38. RFI Total Proceeds are inclusive ofsale proceeds and interim cash flows. 39. The gross equity multiple and gross IRR are based upon the RFI equip• allocated to the asset and include cash flows generated by the asset while RFIhad an interest in the asset but does not reflect deductionsfor managementfees. fund expenses (which are described in other documents provided to potential investors upon request) or the carried interest paid or payable to the RFI's Investment Manager or General Partner which. in the aggregate. may be substantial and, accordingly, such figures do not reflect the actual returns that would ultimately be realized by an investor. PROPRIETARY & CONFIDENTIAL - DECEMBER 2014