INVESTMENT MEMORANDUM               U.S. Real Estate Opportunity Fund                        (Western Region)             ...
EXECUTIVE SUMMARY                                                                                                    Relea...
FUND SYNOPSIS                                                                                               Released: 02/2...
FUND SYNOPSIS                                                                                               Released: 02/2...
FUND SYNOPSIS                                                                                       Released: 02/2012     ...
FUND SYNOPSIS                                                                                         Released: 02/2012   ...
THE GLOBAL MARKET                                                                                  Released: 02/2012      ...
THE GLOBAL MARKET                                                                                                      Rel...
THE GLOBAL MARKET                                                                                                         ...
THE GLOBAL MARKET                                                                                  Released: 02/2012      ...
THE GLOBAL MARKET                                                                      Released: 02/2012U.S. Real Estate O...
THE GLOBAL MARKET                                                                      Released: 02/2012U.S. Real Estate O...
THE U.S. MARKET                                                                        Released: 02/2012U.S. Real Estate O...
THE U.S. MARKET                                                                        Released: 02/2012U.S. Real Estate O...
THE U.S. MARKET                                                                        Released: 02/2012U.S. Real Estate O...
THE U.S. MARKET                                                                        Released: 02/2012U.S. Real Estate O...
THE U.S. MARKET                                                                        Released: 02/2012U.S. Real Estate O...
THE U.S. MARKET                                                                                   Released: 02/2012       ...
U.S. WESTERN REGION                                                                                      Released: 02/2012...
U.S. WESTERN REGION                                                                        Released: 02/2012            Se...
U.S. WESTERN REGION                                                                        Released: 02/2012            Po...
U.S. WESTERN REGION                                                                      Released: 02/2012            San ...
U.S. WESTERN REGION                                                                      Released: 02/2012            Los ...
U.S. WESTERN REGION                                                                            Released: 02/2012          ...
U.S. WESTERN REGION                                                                       Released: 02/2012            San...
TYPICAL ACQUISITION                                                                    Released: 02/2012                  ...
TYPICAL ACQUISITION                                                                        Released: 02/2012              ...
FINANCIAL PERFORMANCE FORECAST                                                              Released: 02/2012             ...
FINANCIAL PERFORMANCE FORECAST                                                              Released: 02/2012             ...
STRUCTURE AND MANAGEMENT                                                                                        Released: ...
STRUCTURE AND MANAGEMENT                                                                         Released: 02/2012        ...
STRUCTURE AND MANAGEMENT                                                                       Released: 02/2012         T...
STRUCTURE AND MANAGEMENT                                                                                   Released: 02/20...
STRUCTURE AND MANAGEMENT                                                                                      Released: 02...
STRUCTURE AND MANAGEMENT                                                                                  Released: 02/201...
STRUCTURE AND MANAGEMENT                                                                              Released: 02/2012   ...
STRUCTURE AND MANAGEMENT                                                                                       Released: 0...
Released: 02/2012                                    Relationships, Partners and AssociatesU.S. Real Estate Opportunity Fu...
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Investment Memorandum for Western Region Fund

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  • 1. This presentation is for the US Real Estate Opportunity Fund, Western Region.
  • The US Real Estate Opportunity Fund will consist of individual pass-through entities for each of the selected US Regions.Equity Investments for the Western Region will be vested in the name of Western Region Fund, LLC.The entity will initially be formed as a Private Equity Fund.The total capitalization will be One Hundred Million Dollars in units of Five Hundred Thousand Dollars.The capital investment will be used to acquire a portfolio of income producing assets for the Private REIT.The life of the entity and dissolution is approximately five years.The acquired assets will be segregated into an office, retail and industrial portfolio.The Western Region will include the states of Washington, Oregon, California and Nevada.The One Hundred Million Dollars of private equity will represent approximately 30% of the initial portfolio value. The equity will be leveraged at a 70% loan to value creating a portfolio of acquisitions with an approximate value of Three Hundred and Fifteen Million Dollars. The value forecast of the portfolio in five years is approximately Four Hundred and Fifty Million Dollars.Based on the financial performance forecasted, the portfolio is anticipated to provide income and proceeds equivalent to a 15.5% internal rate of return which equates to a 210% cash-on-cash return.MagnuM Opes Corporation is a vested member and General Manager of the Western Region Fund. The MagnuM Opes management team has twenty consecutive years of real estate fund, portfolio and asset management experience.The tentative closing date for the fund is May 31st, 2012.
  • When this presentation is in manual mode, the red button links on this slide provide direct navigation to the desired topics shown.The button links along the bottom of each slide also provide additional navigation.
  • These options will be controlled by the initial Subscribers and the market.
  • A. The Western Region Fund is projected to provide a 210% cash-on-cash return, which equates to a 15.5% internal rate of return.The business plan is to merger the Western Region Fund with other regional funds and take the company public. The capital from the IPO would create a cash distribution to the Shareholders. And/or the Shareholders could option for Public REIT shares.Although it is not likely, alternate exit strategies include disposition of the portfolio to an unrelated REIT, disposition by market sale or extending the operation of the company for additional gains or repositioning in the market.Exit strategies are controlled by the Shareholders and market conditions.
  • The slides which follow provide recent market data on the global and US market. We have found that most all major agencies are reporting definite recovery trends. The current market data plots a beginning of the recovery bell curve and it is at this point in the curve where values step-up quickly. Now is the time to move.Market research concludes that the multi-family sector has already turned the recovery corner and continues an upward trend. Today, the sectors with the highest return potential are office, retail and industrial. The typical acquisition for the Western Region Fund will be in these high potential sectors.Global and national research concludes the western region exhibits high return potential with manageable risks. Within the western region, we have indentified several major metropolitan areas for acquisitions including Seattle, Portland, San Francisco, Los Angeles, Las Vegas and San Diego.
  • The following slides address Key Global Highlights and summarize the global economy.The European national still battle market instability, while the U.S. economy is favored by investors and Asia markets continue to perform well.Global capital markets are robust as money gravitates to the U.S. in anticipation of a stronger dollar and promising economic growth.Investors move their funds to major cities which are viewed as safe havens for their investments.Although bank balance sheet are improving, debt financing lags behind growing demand.Capital appreciation is slowing, especially in Europe, as yields flatten.Office leasing in major cities, especially coast cities driven by import or export trade, do well, but other inland areas remain stagnate.However, overall global leasing volumes are likely to be stable through the first part of 2012 with likely growth in the third and fourth quarters.Vacancies in most sectors continue to edge downward.The global office index grew in 2011 and is anticipated to continue in Asia and the U.S. while Europe may have a much slower pace.The office, retail and warehouse markets appear to be driven by the technology, energy and commodity sectors.International retailer demand, especially in Asia, remains robust.Hotel transactions held steady in 2011 and are expected to remain steady through 2012.The U.S. apartment market is considered to be one the higher performer as the U.S. recovery jumps back quicker than anticipated.
  • A. This chart of gross domestic product projections for 2012 depicts the recent change in basis point for major economies. The GDP for each country, with the exception of Japan and the U.S., has drop 10 to 110 basis points. And the U.S. has reported the largest positive gain of 60 basis points.
  • This chart depicts the real estate health of major cities around the world at the end of the fourth quarter 2011. A pre-emptive tightening of monetary policy in many economies last year is now seen as premature. The bias in 2012 may be toward monetary loosening.
  • The following rental clocks summarize the global office, retail and industrial sectors. On this office clock, only Singapore and Hong Kong are perceived to have falling rental values. All other cities are bottoming out or on positive growth trends.
  • On this retail rental clock, only Singapore is perceived to have falling rental values. The majority of other cities are experiencing positive growth trends.
  • On this industrial rental clock, most all cities are poised well for 2012. Please review the global market section of the investment memorandum for a more comprehensive understanding of those factors influencing the global market.
  • This portion of the presentation provides summary statistics for the U.S. market. Although there are mixed reports of low employment is some areas, other areas of the country are already back to pre 2007 levels. This graph of private / public hiring clearly illustrates a rebounding market. The data represents a full cycle from 2007, dipping in 2009 and recovery in earlier 2011 with stable hiring thereafter. This trend is expected to continue through 2012 and beyond.
  • The graph illustrates the one year change of office employment in major U.S. cities from the fourth quarter 2010 to the fourth quarter 2011. Those cities associated with high-tech and energy-based industries exhibit the highest degree of positive change. This is a strong indicator of the high-tech and energy-based sector’s impact on today’s economy.
  • The energy, high-tech and office using sectors out performed the overall economy in 2011 and are expected to continue to have a positive impact on market growth.
  • The U.S. economic production forecast is an important indicator for gauging economic growth. This graph illustrates several vital factors. First, there is a heighten level of exports which will be supported by the administration for at least the next five years. The projected level of exports and industrial production is expected to remain strong for the next three years and beyond. And finally, portal cities, like Seattle, Portland, San Francisco, Las Angeles and San Diego are likely to benefit the most from this trend.
  • This graph is a barometer of the change in average asking rents per square foot over the last twenty years. The graph start with the recovery of the 1992 real estate cycle and then shows the depth of the 2002 cycle and lowest declines in last twenty years in the 2009 real estate cycle. But more importantly, this graph illustrates a stable growth trend commencing in 2011 which is anticipated to continue in the same projectory for the next several years.
  • In closing the summary for the U.S. market report, we offer the U.S. economy clock as of the fourth quarter 2011. The clock visibly illustrates a recovering market with the majority of major U.S. cities in the rising quadroon. Please review the U.S. market section of the investment memorandum for a more comprehensive understanding of those factors influencing the market.
  • The research presented in earlier slides lead to the conclusion and selection of the U.S. western region as the target region for this fund. The research also aided in the selection of cities whose economies are influenced by high-tech, energy, exports and other factors which have a positive impact on the metropolitan area. The western region includes the states of Washington, Oregon, Nevada and California. Within these states, six metropolitan areas have been selected as target cities for real estate acquisitions. The metropolitan areas include, but are not limted to, Seattle, Portland, San Francisco, Los Anegles, Las Vegas and San Diego.
  • The next few slides provide a summary of those factors influencing the selection of each target city. In Seattle, where leasing activity is rebounding in the Class A office sector the key indicators illustrate: Tourism and leasing volume are up while rents have remained flat, landlord concessions and sales volume are down and construction deliveries and starts are flat.The Seattle property clock indicates the Seattle commercial business district is on the rising and the Bellevue commercial business district is headed into a rising market.
  • In the Portland market, which is driven by logistics and high-tech, the key indicator illustrate:Vacancy is dropping while leasing activity and rents continue to increase, employment is up while its counterpart, unemployment, is dropping, and new construction and personal income are both up.The Portland property clock indicates the commercial business district is rising and the suburbs are close behind.
  • In the San Francisco market, where high-tech demand is producing some of the highest recovery rents and net absorption than other metropolitan areas, the key indicators illustrate:Vacancy is down as leasing activity and rents trend upward, employment is up and unemployment files are down, new construction is flat and personal income is increasing.The San Francisco property clock indicates the commercial business district is on the rise and now is the time to buy.
  • In the Los Angeles market, where recovery is mixed across the submarkets, the key indicators illustrate:The Los Angeles property clock indicates the office, retail and industrial sectors are prime candidates for investment while the multi-family and hotel sectors steadily spiraling upward.
  • In the Las Vegas market, the city is quietly making a major come back. This can be seen in the key indicators: visitor volume and gaming revenues have been consistently rising quarter after quarter, population and employment are trending upward as unemployment drops, new construction starts are flat and personal income is up.The Las Vegas property clock indicates the city is already on the rise and now is the time buy.
  • In San Diego, the market is driven by high-tech, biopharmaceuticals , retail and healthcare. The key indicators as of the last quarter are as follows: Tourism is flat and although leasing volume and rents are down for 2011 overall activity in the fourth quarter finished strong, landlord concessions are flat while sales volume is up, construction deliveries are flat and construction starts are down.The San Diego property clock indicates the market is at or near bottom with potential for growth in 2012.Please read the U.S. Western Region section of the investment memorandum for a more comprehensive understanding of those factor influencing the target city selections.
  • We have researched the target cities for potential acquisitions and collected sufficient data to identify typical acquisition characteristics.The property shown on this slide are only a sample of the properties researched. Please review the typical acquisition section of the investment memorandum for more information about these and other potential acquisitions.It is important to note that other competitive firms are also researching the market and by the close of this offering some of these properties may not be available.
  • The concluded acquisition characteristics identifies a property:A well maintained property which does not require capital improvements greater than 1% of its value.The acquisition price is inline with a value equivalent to an 8% capitalization of in place income.The projected income curve illustrates potential for 10% annual appreciation.
  • The following slides address the financial performance forecast for the Western Region Fund. The forecast is provided in a summary graph presentation.The upper portion of the graph shows a schedule of phasing which corresponds to the quarterly timeline below the graph.The left axis and left legend are used to plot the debt, operating expense and income/profits over the quarterly timeline.The right axis and right legend are used to plot the value of the portfolio over the quarterly timeline.At the end of the acquisition phase, the portfolio is anticipated to have a $315 million dollars value.At the time of IPO or disposition, the portfolio is anticipated to have a $458 Million dollar value.A full pro forma spreadsheet is provided in the financial performance section of the investment memorandum.
  • The financial performance of the portfolio is based on the following assumptions:The acquisition funds will be deployed at a rate of 20% of the fund per quarter.The average mortgage for an asset will be based on a 70% loan to value with 6.5% fixed interest rate over a 25 year term.The initial net income of acquired assets is derived from an 8% capitalization rate.The portfolio asset values at the time of IPO or disposition are based on an 8% capitalization rate.Any renovation cost or capital improvement made after the acquisition will not exceed 1% of the purchase price.Operational expenses are typical for the asset sector and location.All net income or gains are first applied to the return of investment and then the return-on investment.Please review the investment memorandum for a delineated version of these assumptions.These assumptions and variables are considered conservative in nature and reasonable. Based on the application of these assumption in the financial performance analysis, the investment is anticipated to yield a 210% cash on cash return which equates to a 15.5% internal rate of return.
  • This portion of the presentation addresses entity structures and management.This organizational chart depicts the cycle of investment and entity components.Let’s first identify the entities.The number 1 identifies the Equity source. This may be a group of investors or an investment fund. In some cases, the investor or investment fund may be represented by a Money Manager.The number 2 identifies the Western Region Fund, LLC. The management/operations and accounting/finance components to the left are functions provided by the general manager, MagnuM Opes Corporation.The number 3 identifies the portfolio of assets owned by the Western Region Fund.The letter A illustrates the deposit of investment fund from the equity source to a JP Morgan / Chase account established for the Western Region Fund.The letter B illustrates the deployment of funds to acquire real estate assets for the portfolio. These funds will be combined with borrowed funds from a mortgage lender.The letter C illustrates the growth of the fund through real estate planning and appreciation. At the time of disposition, the mortgage loan will be retired and the debt released.The letter D illustrates principal and profits being returned to the original equity source.
  • The Western Region Fund will be managed by the General Manager, MagnuM Opes Corporation.The MagnuM Opes management team has twenty consecutive years of real estate experience with core competencies in the following areas:Fund, portfolio and asset managementInvestment and real estate consultingAnd real estate development and construction.This organizational chart illustrates the corporate structure of the MagnuM Opes and its affiliates.The parent corporation is responsible for fund, portfolio and asset management; the subsidiary corporations are specialized in real estate development and brokerage and the departmental units are responsible for development and construction; interior and capital improvements; real estate brokerage and property management.It is important to note that although the subsidiary corporations are diversely competent in many areas, there is no plan to exclusively engage their services.However, the resources of the subsidiary corporations and departmental units will be available to Western Region Fund at all times.
  • MagnuM Opes Corporation has an impressive history of performance.Not only does the firm have 20 consecutive years of cohesive leadership,It has 20 consecutive years of out performing the market.This graph illustrate the firm’s historical performance as compared to national indexes.The firm has consistently out performed the National Association of Real Estate Investment Trust index and the National Council of Real Estate Investment Fiduciaries’ office and industrial index.
  • The next few slides provides a summary introduction to the key management members of MagnuM Opes Corporation.background
  • A.
  • This matrix represents a partial list of the those companies with a relationship, partners or associates with MagnuM Opes Corporation.
  • Investment memorandum narrated

    1. 1. INVESTMENT MEMORANDUM U.S. Real Estate Opportunity Fund (Western Region) in the amount of: $100,000,000.00Released: 02/2012
    2. 2. EXECUTIVE SUMMARY Released: 02/2012 U.S. Real Estate Opportunity Fund (Western Region) Fund Entity: Western Region Fund, LLC Type: Private Equity Fund Capitalization: $100,000,000.00 Unit: $500,000.00 Use: Formation of a Private REIT Term: Dissolution is ±5 years Assets: Segregated Portfolio Local: Western Region (Office, Retail and Industrial) (WA, OR, CA & NV) Values: Equity ±$100,000,000 ±30% Returns: Internal Rate of Return ±15.5% Mortgage ±$215,000,000 ±70% Cash-On-Cash ±210% Acquisitions ±$315,000,000 Disposition ±$450,000,000 General Mgr.: MagnuM Opes Corporation Closing: May 31, 2012U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 2
    3. 3. FUND SYNOPSIS Released: 02/2012 Fund Description The U.S. Real Estate Opportunity Fund is a group of private equity funds established for the acquisition and operation of income producing real estate for profit. The initial fund is established to acquire real estate in the U.S. western region. The U.S. Real Estate Opportunity Fund (Western Region) shall operate as an independent private equity investment company titled Western Region Fund, LLC. It is the intent of the U.S. Real Estate Opportunity Fund to make future offerings for other U.S. regions. Statement of Purpose The purpose of the Fund is to acquire a portfolio of undervalued real estate in recovering metropolitan areas of the U.S. and to increase the value of that real estate with the intent to:  Reposition the portfolio as a Private Real Estate Investment Trust (Private REIT).  In five years, convert the Private REIT to a Publicly Traded Real Estate Investment Trust (Public REIT).  And provide the initial private equity Subscribers the option for  the return-on and of their investment, plus  the option for retained shares in the Public REIT; or  Dispose of the portfolio assets in approximately 5 years and distribute principal and profits equivalent to a ±210% cash-on-cash return or higher.U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 4
    4. 4. FUND SYNOPSIS Released: 02/2012 REIT Description  A REIT is a fairly unique entity in the world of tax law  Investors can achieve a variety of business/tax goals that cannot easily be achieved with any other entity  REITs can be combined with other types of entities  More Private and Public REITs are being formed today than ever before  REITs offer Private Equity Funds and Private Investors an opportunity to take advantage of unique planning opportunities  Private REITs provide many operational and return advantages  Private REITs are not publicly traded  Private REITs formed with pass through entities can avoid income tax  Private REITs provide diversification in assets, investment types and tax strategiesU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 5
    5. 5. FUND SYNOPSIS Released: 02/2012 Dividends and Gains  Private REITs are formed with pass through entities  Approximately 95% of the net annual income is distributed to Shareholders  The Western Region Fund will operate under these guidelines Investment and Returns  ±210% Cash-On-Cash Return  ±15.5% Internal Rate of Return Exit Strategies  Merger with other regional funds  Place an Initial Public Offering (IPO)  Cash distribution to Shareholders  Shareholders may option for Public REIT shares  Disposition by REIT acquisition  Disposition by market sale  Option to extend the operational termU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 6
    6. 6. FUND SYNOPSIS Released: 02/2012 The Market  Most all major agencies are reporting recovery trends  Historical bell curves illustrate value step-up  Typical Acquisition and diversification  Office sector  Retail sector  Industrial sector  Preparation for acquisitions have commenced in  Seattle  Portland  San Francisco  Los Angeles  Las Vegas  San DiegoU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 7
    7. 7. THE GLOBAL MARKET Released: 02/2012 Key Global Highlights  Economic risks in Europe while U.S. trends more favorable and Asia performs well  Capital markets robust  Major cities considered ‘safe haven’  Debt financing constrained  Capital appreciation is slowing as yields flatten  Office leasing markets show mixed pictures  Overall global leasing volumes are likely to be stable  Vacancies continue to edge downward  The global office index grew in 2011  Technology, energy and commodity sectors are driving demand  International retailer demand remains robust  Warehousing momentum slow in Europe and Asia, but rebounding in U.S.  Hotel transactions hold steady  U.S. apartment market is high performerU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 8
    8. 8. THE GLOBAL MARKET Released: 02/2012 GDP Projections 2012 in Major Economies – Recent Movements Australia China France Germany India Japan UK USA Oct 2011 3.2% 8.1% 0.4% 1.0% 7.5% 2.7% 0.9% 1.4% January (Latest) 3.1% 7.9% -0.7% 0.2% 6.7% 2.9% 0.3% 2.0% Change (bsp) -10 -20 -110 -80 -80 +20 -60 +60 Source: IHS Global Insight, January 2012U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 9
    9. 9. THE GLOBAL MARKET Released: 02/2012 Global Real Estate Health Monitor Economy Real Estate Investment Markets Real Estate Occupier Markets OECD National National Leading Investment Capital Value Rental Net Vacancy Supply Country City GDP Indicator Volumes Change Prime Yield Yield Gap Change Absorption Rate Pipeline Germany Frankfurt 0.2% -5.5% 35% 2.1% 4.8% 297 0.0% 0.9% 13.9% 3.6% Hong Kong Hong Kong 3.8% na 31% 20.7% 3.4% 188 10.2% 3.3% 4.2% 3.1% UK London 0.3% -5.6% 6% 7.4% 4.0% 202 7.4% 0.9% 5.8% 3.8% Russia Moscow 3.7% 1.3% 118% 49.0% 9.0% 50 41.2% 3.8% 16.0% 14.8% US New York 2.0% -0.2% 63% 27.6% 4.3% 243 7.6% 0.5% 10.4% 0.9% France Paris -0.7% -6.6% 37% 10.7% 4.8% 158 10.7% 1.3% 6.9% 3.3% Brazil Sao Paulo 3.2% -7.6% 48% 12.7% 10.0% na 18.6% 5.0% 10.5% 35.9% China Shanghai 7.9% 12.0% 3% 19.1% 5.9% 233 17.5% 23.8% 12.5% 35.5% Singapore Singapore 2.0% na 25% 10.5% 3.8% 222 4.8% 10.1% 7.7% 21.3% Australia Sydney 3.1% 0.4% -5% 8.3% 6.9% 307 15.2% 2.0% 8.7% 2.2% Japan Tokyo 2.9% -2.2% -21% -2.1% 3.6% 261 -2.1% 3.8% 3.6% 14.0% Real Estate data end Q4 2011U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 10
    10. 10. THE GLOBAL MARKET Released: 02/2012 Prime Offices – Rental Clock, Q4 2011U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 11
    11. 11. THE GLOBAL MARKET Released: 02/2012U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 12
    12. 12. THE GLOBAL MARKET Released: 02/2012U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 13
    13. 13. THE U.S. MARKET Released: 02/2012U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 14
    14. 14. THE U.S. MARKET Released: 02/2012U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 15
    15. 15. THE U.S. MARKET Released: 02/2012U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 16
    16. 16. THE U.S. MARKET Released: 02/2012U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 17
    17. 17. THE U.S. MARKET Released: 02/2012U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 18
    18. 18. THE U.S. MARKET Released: 02/2012 U.S. Market – Economy Clock, Q4 2011U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 19
    19. 19. U.S. WESTERN REGION Released: 02/2012 Target Cities ● Seattle Seattle Portland San Francisco Washington Portland ● Oregon San Francisco ● Nevada California ● Las Vegas Los Angeles ● San Diego ● Los Angeles Las Vegas San DiegoU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 20
    20. 20. U.S. WESTERN REGION Released: 02/2012 Seattle – Leasing activity rebounds, led by Class A deals Key Indicators, Q4 2011 Property ClockU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 21
    21. 21. U.S. WESTERN REGION Released: 02/2012 Portland – Driven by logistics and high tech Key Indicators, Q4 2011 Property Clock Vacancy Leasing Activity Rents Employment Unemployment New Construction Personal IncomeU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 22
    22. 22. U.S. WESTERN REGION Released: 02/2012 San Francisco – Tech demand produces highest rent and net absorption growth Key Indicators, Q4 2011 Property Clock Vacancy Leasing Activity Rents Employment Unemployment New Construction Personal IncomeU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 23
    23. 23. U.S. WESTERN REGION Released: 02/2012 Los Angeles – Recovery mixed across submarkets Key Indicators, Q4 2011 Property ClockU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 24
    24. 24. U.S. WESTERN REGION Released: 02/2012 Las Vegas – A quiet come back Key Indicators, Q4 2011 Property Clock Visitor Volume Gaming Revenues Population Peaking Falling market market Employment Rising Bottoming Unemployment market market New Construction Las Vegas Personal IncomeU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 25
    25. 25. U.S. WESTERN REGION Released: 02/2012 San Diego – driven by high-tech, biopharma, retail and healthcare Key Indicators, Q4 2011 Property ClockU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 26
    26. 26. TYPICAL ACQUISITION Released: 02/2012 Potential AcquisitionU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 27
    27. 27. TYPICAL ACQUISITION Released: 02/2012 Concluded Acquisition Characteristics  ±$10,000,000.00 Market Value  65% to 75% Occupancy  Performing Leases  Well maintained – less then 1% of value for capital improvements  Market value equivalent to an ±8.0% capitalization of in place income  Submarket illustrates positive demand and growth trends  The asset is projected to reach ±90% occupancy in by the fifth year  The projected income curve illustrates ±10% annual appreciationU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 28
    28. 28. FINANCIAL PERFORMANCE FORECAST Released: 02/2012 ● $458 Million ● $315 MillionU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 29
    29. 29. FINANCIAL PERFORMANCE FORECAST Released: 02/2012 Performance Based of the following Assumptions  Fund Deployed at over 5 quarter (20% of fund per quarter).  Mortgage Debt is equivalent 70% loan-to-value and 6.5% fixed interest amortized over 25 years.  Asset Income is based on net leases with net operating income equivalent to an ±8.0% capitalization rate.  Asset disposition is based on an ±8.0% capitalization of the forecasted income stream.  Renovation/Capital Improvements are equivalent to ±1.0% of the acquisition price or less.  Operational expenses are typical for the asset sector and location.  All net income/gains are first applied to the return-of equity/principal and then to the return-on investment. Cash-On-Cash Return: ±210% Internal Rate of Return: ±15.5%U.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 30
    30. 30. STRUCTURE AND MANAGEMENT Released: 02/2012 Equity Source MagnuM Opes WRF, LLC Retire mortgage 70% Mortgage LenderU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 31
    31. 31. STRUCTURE AND MANAGEMENT Released: 02/2012 The General Manager: MagnuM Opes Corporation  Core Competencies include, but are not limited to:  Fund, Portfolio & Asset Management  Investment & Real Estate Consulting  Real Estate Development & ConstructionU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 32
    32. 32. STRUCTURE AND MANAGEMENT Released: 02/2012 The General Manager: MagnuM Opes Corporation Historical Performance  20 consecutive years of history and cohesive leadership.  20 consecutive years of proven returns consistently out-performing the NAREIT, NCREIF Office and NCREIF Industrial indexes. MOC NAREIT NCREIF-O NCREIF-IU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 33
    33. 33. STRUCTURE AND MANAGEMENT Released: 02/2012 Key Management Michael A. Panciro , Chief Executive Officer Background: Mr. Panciro is one of the founding Officers of MagnuM Opes Corporation. Prior to the formation of the company, he served as the Chief Operations Officer for Chenco International Investment Corp. He is an experienced entrepreneur with managerial strengths in fund management, real estate operations and development, business structuring and strategic planning. Education: Designations & Awards: B.A. Sciences – University of Pennsylvania Certified Commercial Investment Manager (CCIM) Real Estate Management – Harvard University Urban Land Institute (ULI) – Real Estate Finance Board Certified Instructor – Lincoln Graduate Center Senior Asset Manager (SAM) Business Law Master Senior Appraiser (MSA) Real Estate & Asset Management National Association of Industrial and Office Real Estate Analyses and Valuation Properties (NAIOP) – Development AwardsU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 34
    34. 34. STRUCTURE AND MANAGEMENT Released: 02/2012 Key Management Maranda S.J. Chen, Chief Financial Officer Background: Ms. Chen is one of the founding Officers of MagnuM Opes Corporation. Prior to the formation of the company, she served as the Vice President of Chenco International Investment Corp. Ms. Chen still retains her Cofounder and Directorship with Chenco International Investment Corp., but is a full time Manager and Chief Financial Officer of MagnuM Opes Corporation. Education: Designations & Awards: B.A. Marketing – Fu-Jen University, Taipei, Taiwan Certified Commercial Investment Manager (CCIM) M.B.A. Real Estate – Eastern Michigan University National Association of Industrial and Office Properties (NAIOP) – Development AwardsU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 35
    35. 35. STRUCTURE AND MANAGEMENT Released: 02/2012 Key Management Sherry Wang, Managing Director of Real Estate Background: Ms. Wang is a member of the Board of Directors for MagnuM Opes Corporation and has taken an active role as Managing Director of Real Estate. Her prior experience includes debt finance and new resort development for Sands Corp., Las Vegas; investment banking and acquisitions advisory at Citigroup Inc., New York; and retail real estate strategy and execution at Gap Inc., San Francisco. Education: Designations & Awards: B.A. Economics – Northwestern University Urban Land Institute – San Francisco, California M.B.A. Real Estate, Finance – Wharton Corporate Officer for Wharton Women in Business Business School, University of Pennsylvania Northwestern University Alumni Admissions CommitteeU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 36
    36. 36. STRUCTURE AND MANAGEMENT Released: 02/2012 Key Management Anthony R. Castrignano, Managing Director of Finance Background: Mr. Castrignano serves as the Managing Director of Finance for MagnuM Opes Corporation. Prior to his appointment, he was the Broker/Owner of Sky Mesa Capital, a mortgage and real estate brokerage firm. Mr. Castrignano is an experienced entrepreneur with managerial strengths in mortgage finance and real estate consulting. Education: Licenses: B.A. – Lycoming College, Pennsylvania Nevada Real Estate Broker California Real Estate Broker Mortgage BrokerU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 37
    37. 37. STRUCTURE AND MANAGEMENT Released: 02/2012 Key Management Dean Willmore, Managing Director of Acquisitions Background: Mr. Willmore has conducted more than $168 million in real estate transactions for MagnuM Opes Corporation. Prior to accepting his position with the firm, he was Senior Director of Commerce | Cushman Wakefield and Senior Vice President of Prudential CRES. Mr. Willmore is the founder of IPG, “Industrial Property Group” which was purchased by Prudential CRES. Education: Designations & Licenses: B.A. Business – University of Arizona Society of Industrial and Office Realtors (SIOR) Nevada Real Estate BrokerU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 38
    38. 38. Released: 02/2012 Relationships, Partners and AssociatesU.S. Real Estate Opportunity Fund Home Table of Links Next Slide Previous Slide Page 39
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