Northwestern KEL98T August 17, 2016 CRAIG FURFINE Commercial 10 decided to review the the general partner on roan Chicago. acquired in 2006 and had was performing well, property was Columbus although the property of the growth of net Scanned with CamScannerTux Trou Stanley Cirano Stanley Cirano had been ‘Although he was born and raised on the north side of Chicago, as attracted —as many people were—by the weather and opportunities in California's technology aertor in the mid-199s He had not gone to college, but in those days anyone who showed up eve day could get temporary work in Silicon Valley. With the help of a placement ‘went more than a few days without work as he bounced from one temporary job rom a loading dock to new employees’ sponents once they were Inc.,a startup agency, Cirano never to another. ‘One of Cirano’s assignments was to carry computer cubicles, When someone d unpacked, Cirano land that developed busi Girano earned a ‘company stock each month, When the co ening day and climbed tenfold over the next id that he had over {$8 million sitting in er, Ariba’s stock price declined over 99% ‘Cirano. Cirano’s windfall ers, who convinced him to invest in comm Scanned with CamScannerwas likely to be exited by 2017, but the partners disagreed on the most opportune time to sel Cirano knew some real estate investors es aahing ca but others washed | to wait until they found an attractive opportunity in which to invest any sales proceeds. Cirano’s own investors mirrored this mix of opinions —some expressed a desire to exit given the solid revenue growth, but others believed that refinancing would allow them to recoup much of their initial investment and preferred to continue receiving the steady and growing cash flows from the property: The original $65 million loan op the property was made by Skyline Bank. The loan had these months remaining on its original 10-year maturity, It had beer-amorizingoh a 30-year sched “Gnd carvied at interest rate of 6.705, The loans five-year lockout provision’ had expired in ae and a prepayment penalty of 3% of total prepaid balances was waived within the final six mont before maturity. ‘Over the past 10 years, held his business and perso personal friends, with whom! with Cirano, Skyline vice pt provide to Cirano for ongoi ‘would offer a loan of up to debt service coverage amortize over 30, Skyline's standard Scanned with CamScannerTue Trot rH Lenpers: Columbus Festival Plaza no had also raised additional private equity to purchase shopping center located in Elm Park, @ come of $63,537. Cirano had not been ly 2010 because he was focused ater during the severe auction for a number worth the effort While managing Brookline, Ci Columbus Festival Plaza, a 113,572-square-foot Clas western suburb of Chicago with a median household actively looking for commercial property in late 2009 and earl on renegotiating leases at Brookline and keeping that property above downturn, However, Cirano heard through his network about a bankruptcy fof nearby retail centers, and when he saw the low minimum bids he thought it was to investigate, to win, As it turned out, Cirano bid, $8. million for Columbus= however, investors were © wi n srcial real estate markets, and his bid was suffi remodeled in 1992, was in a favorable locat d high traffic visibility. ‘Two other retail stri some vacant space that Cirano thought low bid with a long shot Debt markets in! Scanned with CamScannerKEL997 ———— Tx Trounte with Lewoens Cirano could ¢ ontinue to hold the property until his current loan matured, allowing, him to avoid the defea: ld the property until his current I tured, ‘s ance Cost. However, Cirano wondered whether he should sell immediately, tea KY on theCVS deal Aternatvely could relnansin aun with algal lower interest rate. Ideally, refinancing would generate sufficient proceeds to pay off the maturing as defease the original debt. He first approached Skyline Bank, but Darvin had high underwriting standards for tenant quality and that it would not be against Columbus. He then called Ross, who shopped the deal to his potential lenders. construction loan as well told him that Skyline able to lend One letter of interest came from a gondult Fende® a company that originated commercial mortgages and held them as investments foro short time before selling or securitizing the loans. Camron tanner. RABY offered to lend ona non-recourse bast upto 65% LTV fora three: ear term with 25-year amortization at an interest rate of 4 Like his current loan, Oakwood’s oan also had a defeasance requirement. Oakwood charged a 1.1% origination fee and required a minimum DSCR of 1.25. Another offer came i SL illon bank headquartered in Des Moines, lowa. Northwood p Toar Baersit its portfolio of commercial real estate lo figes from its home state, Northwood -2mortization at an int DSCR of 1.40. The loan, ‘hereafter. Unlike the: the event of default. Cirano wrote up Scanned with CamScannerExhibit 1: Historical Financial Performance of Brookline Road Shopping Center a 0 S1ASSS2480$1,361,00450 $1,366,654 70 $1,242,3000 $1458,11900 —F1,517,10420 $1,827,198 Wet rentalrevenve Operating expenses Landscaping/snow removal $46,000.00 $46,00000 546,000.00, r $46,000.00 $48,30000 $4,300.00 Cleaning/comman aes ex $169,000.00 $169,000.00 $168,000.00, $169,000.00 $175,000.00 $175,000.00 Repair and maintenance $52,000.00 $53,040.00 $53,900.00, 1300.00 $5850000 $98,400.00 Usiities| S15%.000.00 $156,060.00 $159,200.00 $162,400.00 Real estate taxes 29,0000 $129,000.00 $129,000.00 $129,000.00 Management fee SH0.665.74 $40,808 17.200. Insurance $12,000 90 . Total operating expenses 001,665.74 Inet operating income SSAA Capital costs Tenant improvements $0.00 Leasing commissions $000 Capital reserves sesam183 Tota capital costs 54523153, Operating cash flow 70562724 Debt service $503,316.82 scr Post debt service proceeds Pan passu limited partner share United partner capital account ‘Additional investment Ending investment balance Percent of capital returned General partner capital account Bepnning investment balance Cath Now received Preferred return earned mssed preterred return (accrved) ‘Additions! investment Ending investment Percent of 7a $i sa6 51733 $48,200.00 $175,000.00 $61,900.00 ‘5180 200 00 7015, 91562825 38 $48,300.00 $175,000.00 $63,400.00 184,200.00 $136,000.00 54680475 Scanned with CamScannerTHe Trousie with Lenoers ee Exhibit 2: Brookline Road Shopping Center Historical Rent Roll sn 08 OF aN 0 ie a me 7014 5 ———— a = Sees ee ee eee ee tee —— a some SaeLeroee — saan) Samnooom = Sasseamo = Saaz ese? fas) —SUSL.TIOAT«—«SUSOGTOBOD ale = = eel me ne me oe fee sana cea ae ces pose 7. a = oat wt a Tas LEASE INFORMATION 2015 Rent (Spersq.tt) Expiration Scanned with CamScanner‘Tue Trovece with Lenoens oo Exhibit 3: Brookline Road Shopping Center Debt Financing Choices Shyline Bank Fourth Second Regional Liberty $20,000, ™ 150% asa Origination fees 4.375% 3.625% 10% Interest rate Maxie TV 65% Minimum OSCR 120 as 10 Maturity Amortization 0 Prepayment penalties Scanned with CamScannerExhibit 4: Historical Financial Performance of Columbus Festival Plaza 010 2d wai 04 eee Reveal revere S757 2280 F791 22400 Boss1700 8 aa Operating expenses Landscapine/snow removal 586,000.00, $56,200.00 ‘506 900.00, fae Cleaningheommon area exp soua00.00 211,000.00 $2130.00 S211 900 0 srsig000 a Repair and maintenance $123.00 00| 512620000 $123,400.00 13890000 suai 900.0 we $273,900.00 $279,900.00 ‘$287,100.00 $792,800.00 $2990.00 (Realestate taxes $232,000.00 232,000.00 ‘$232,000.00 $722,000.00 $209,900.00 —e $59,736.72 $61,500.51 ‘961,100.99 ant cae $20,183.76 $20,587.44 $20.99.18 sziaig.a7 Teal operating expenses sane suon.on 95, 1,068.38 3 300.39640 Necoperaing come 765,107.21 z spins. simssri2 aptatconte Tenant improvements ica somo Lessing commissions ae soos Capial reserves 991,096.55 $93,201.41 ee $91,096.55 ‘$93,201.41 ———a ta $921,087.33 $942,269.83 ere $340,578.98 $340,578.98 sce 287 30 Postdebt service proceeds $500.00.25 seo1,79025 Pan pass mites partner share 1680% United partner capital acount ‘Beginning imextment balance Cashflow caved Preferred ret eared iss preferred return accrue) ‘Astana! inestrent Ending investment balance Percent of capital returned Genera partner capital account Beginning investment balance Cath flow received Preferred return earned Missed preferred return (accrued) “Additional investment Scanned with CamScannera Tue Trovste with Levers ee Exhibit 5: Columbus Festival Plaza Historical Rent Roll Tenant Sq.Ft 2010 zon Ho aOa 2013 2014 a. JCPenney 35,000 Rate $19.25 $19.25 $19.25 $19.25 $19.25 a Income $673,750.00 $673,750.00, $673,750.00 $673,750.00 9673,750.00 sri1 560. Valde: Valve Groceries 22,486 tua 8 $16.50 $18.00 Income 37052400 $404,208.00 Subway 4500 Rate $27.00 $27.00 Income $121,500.00 $121,500.00 SportRite Sporting Goods 14.555 Rate $20.00 $20.00 Income $201,100.00 $291,100.00 Johnny 8's Dry Cleaners 4500 Rate $2650 $2650 Income $119,250.00 Italian Stallion Training Gym Scanned with CamScannerKEL967 Tue Trovsce wirn Lenvers Exhibit 5 (continued) LEASE INFORMATION ‘Current Rent Tenant (Spersq.ft) Expiration Additional Notes JCPenney 20.50 7017 _ nherted lease, Existing lease expres in 2017, Rent Wat at $20 5 per square foot unt expiration Retailer has been struggling, but sales are decent at this location, Valdez Value Groceries 18.00 2020 square foot until expiration. Lower rent used to Subway 27.00 40 $20.00 per square foot in 2018. ‘SportRite Sporting Goods 20.00 does average business at this location. Johnny 8's Dry Cleaners 2650 butterms not agreeable at this time. Malian Stallion Training Gym 18.60 agreed torentincrease of $0.20 per square foot Vicenzo's Pizza 1821 years of flat rent to entice tenant. Rent wil grow First Bank Credit Union 23.93 OW 2% per year through the end of the term. long-term lease beginning in 2016, wth 196 (VS Pharmacy nities continue to be evaluated, Vacant Units Scanned with CamScannerTue Trovste with Lenoens KEL987 ees ieee Exhibit 6: Columbus Festival Plaza Current Debt and New Financing Choices oo eeeeeeeeSSSSS—SsSsssFSSSsSS—S—SFssSsS—SFSsS—sSs Bist Interest ate Original balance $4,785,000.0 Maximum Uv Na Minimum OSCR Na Maturity 2 Amortization Payments completed Prepayment penalties 3,year lockout, ‘he thereater Recourse Yes Scanned with CamScannerSoames ey 1 LORENA URULY 8183 fe YEU INABY JOLd W BULEYS EIYPY IG U ALE ws 29 pean a nny ry Tue Trouste wirn Lenvers it 7: Comparable Sales BROOKLINE ROAD SHOPPING CENTER KEL987 Distance from | ‘Brooktine veer Year spe Cap Date ‘htles) _PropertyName Sq.Ft. Bult Renovated _ Price (S) Sqr Rate Occupancy CommentsNotes 12 sea ae 72% COLUMBUS FESTIVAL PLAZA Properyname Sa. Fox Run Square 143,512 1362 NWeber RA The Landings Prarie Point Source: Real Capital Analytics. 9% —_Striphnanchored propery tenants The Room Place, Fut Vile, Salata, The {Spa natiute prise Sept. 1999 (96:8 0) tenants Richard Waler’s Pancake House, Subway, property potolio tenants Rosats Pizza, Marhaba Halal Foods ror 7enants: Ae Hardware, GNC, UPS, Veron Wireless, Radio 008 (5232) tenants: Hobby Lobby, Victory Cathedral WorsN 2.1 mi; bought or occupancy tenants: OficeMar, Smashburge, Noodles & Co; pnor tenants: Dominick UPS Store, Hair Cattery, Chase, {2010 {$11.3 mil; partof nine property portioto Scanned with CamScannerTue Trovste with Lenpens KEL967 Exhibit 8: Local Sales Analysis by Building Size (Based on Chicago Market Retail Building Sales, April 2014-March 2015) Building Size # of Sales Sales Volume (8) S pera. Ft. Cap Rate (6) «25,000 39. f. m8 1,313,849,244 223.46 7.60 25,000-99,000 sq, 43 926,493,100 186.18 827 100,000-248,000 sqft. 38 290,722,708 113.66 173 2250,000 5a ft 5 396,400,500, 180.96 a4 ‘Source: Costar. Scanned with CamScanner