information memorandum, acknowledgements and instructions ... · holdings inc (st) cibc first...

The information contained herein is believed to be reasonably accurate; however, neither International Realty Group Ltd.. (IRG), S&T Holdings Inc (ST) CIBC First Caribbean International Bank (Cayman) Ltd. (CIBCFC), nor any of its affiliates, employees, agents, contractors, or advisors makes any representations or warranties as to the accuracy or completeness of the information contained in this package.

Information Memorandum, Acknowledgements and Instructions for the Sealed Bid sale of

“Trinity Square”

A well-located retail/commercial centre known as:

Section: George Town Central, Block: 14CF Parcels: 205 (H2 to H16 and H19 to H27)

Grand Cayman, Cayman Islands


TABLE OF CONTENTS

I. INTRODUCTION ....................................................................................... 3

II. REGISTRATION FOR SEALED BID ............................................................ 4

III. INSTRUCTIONS TO BIDDERS ................................................................... 5

IV. IMPORTANT CONSIDERATIONS .............................................................. 6


I. INTRODUCTION

International Realty Group Ltd. (IRG) on behalf of CIBC First Caribbean International Bank (Cayman) Ltd. (CIBCFC) (the “Vendor”), are conducting the sale of the “Trinity Square” retail/commercial development on Eastern Avenue, George Town located in Section: George Town Central, Block: 14CF Parcels: 205 H2 to H16 inclusive and H19 to H27 inclusive, Grand Cayman, Cayman Islands, known as “Trinity Square”, Grand Cayman, Cayman Islands (the "Property") as more specifically described in Appendix A attached. After you review the Information Memorandum and all exhibits and attachments hereto (collectively, the "Information"), the Vendor requests you submit the completed registration form in Section II, page 4 below at which point you will receive a “Sealed Bid Envelope. The Vendor then invites you to submit the completed Offer to Purchase “Sealed Bid” in accordance with the instructions contained herein to acquire the Property. The Vendor is only willing to entertain bids for all of the Property i.e., the strata units which comprise Block 14CF Parcel 205 shall not be sold separately.

This Information Memorandum is intended to facilitate your independent evaluation of the Property. This is not an offer to sell the Property, however, and no binding contract is or shall be created by this document. IRG, CIBCFC nor ST make any representation or warranty concerning the quality, reliability, or accuracy of the Information and shall have no liability in connection therewith. This Information Memorandum contains no obligation on the part of the Vendor to sell the Property to you or to any other party. The Vendor reserves the right to terminate any discussions with you, to withdraw the Property at any time or to reject your offer to purchase the Property. The Vendor shall have no liability or obligation to sell the Property to you unless and until they have entered into a purchase and sale agreement for the Property containing terms and conditions acceptable to the Vendor and its shareholders. You are solely responsible for all costs and expenses incurred by you in connection with your possible interest in purchasing the Property.


II. REGISTRATION FOR SEALED BID

In order to register for this sealed bid, please acknowledge your receipt of this Information Memorandum and your acceptance of the terms contained herein by signing in the space provided below, and return a signed copy to the party specified below by facsimile, scanned e-mail or by hand.

In consideration of good and valuable consideration the receipt of which is hereby acknowledged, it is hereby agreed as follows:

Name of Bidder confirms that it has read, understands, and agrees to the terms, conditions, provisions, and disclaimers contained in this Information Memorandum.

Signature: Title:

Date:

PLEASE EXECUTE AND E-MAIL or HAND DELIVER A COPY OF THE ABOVE REGISTRATION TO THE PARTY LISTED BELOW:

Jeremy Hurst International Realty Group Ltd. PO Box 2390 One Artillery Court 161a Shedden Road George Town Grand Cayman KY1-1105 Phone: (345) 623 1111 e-mail: [email protected]

ON RECEIPT OF THIS EXECUTED ACKNOWLEDGMENT THE SPECIAL SEALED BID ENVELOPE WILL BE AVAILABLE FOR COLLECTION AT THE ADDRESS ABOVE OR ALTERNATIVELY CAN UPON REQUEST BE SENT BY COURIER TO A REGISTERED BIDDER.


III. INSTRUCTIONS TO BIDDERS

1. The bidder's submission will include: A completed and executed Offer to Purchase “Sealed Bid” in the format attached as Appendix B.

2. Each bidder will complete the Offer to Purchase “Sealed Bid” by inserting their offer price in US Dollars and Method of Payment (including deposits to be paid as a % of purchase price). Weight shall be given to the amount of the bid price, the amount and timing of the deposit and whether the deposit shall be refundable or non refundable.

3. Each bidder will be required to execute and return two (2) originals of the Offer to Purchase “Sealed Bid”.

4. Each bidder shall include background information on their financial ability to complete the purchase and their experience in purchasing properties of similar value. They should also indicate whether they need to or choose to obtain bank financing to complete the purchase and whether or not such financing would be a condition of their purchasing the Property. The Vendor will give preference to bids, which will not require financing for the purchase of the Property.

5. Any other conditions in favour of the purchaser should be clearly stated as part of each bid.

6. Bidders should note that preference shall be given to bids that are unconditional.

7. The Vendor will require that the purchase price for the Property be paid in cash by wire transfer or cashiers/certified check negotiable only in the Cayman Islands. All offers should be made in CI$ (Cayman Islands Dollars) but purchase price may be paid in US$ at the prevailing exchange rate at the time funds are paid.

8. The Vendor will sell the Property subject to reasonable due diligence to be carried out at the Vendor’s cost within a reasonable time frame to be agreed.

9. Questions concerning the bid process or documents provided should be submitted in writing to: Jeremy Hurst at [email protected]. Responses to questions will be forwarded to all bidders.


10. Your completed bid package shall be delivered on or before noon (Cayman Time) ____________________ by hand, in the special envelope provided addressed as follows:

Trinity Square Sealed Bid Attn: Matthew Dors Ritch and Conolly Queensgate House 113 South Church St. George Town Grand Cayman Cayman Islands

11. The bid committee will evaluate all offers.

12. If a bidder is selected, that bidder will be invited to enter into a Sales and Purchase Agreement in the form substantially similar to that enclosed in Appendix C attached within 14 days of the notification of their successful bid.

13. The Vendor reserves the right to extend the offer deadline in its sole and absolute discretion. The Vendor also reserves the right to alter the terms contained herein or in any other document attached hereto with notice at least 3 days prior to the date your offer is to be submitted.

14. If you decide that you do not wish to participate in the Sealed Bid, please notify Jeremy Hurst by e-mail at [email protected] and return printed copies of the Information Memorandum, the Sealed Bid envelope and all attachments and exhibits to him at the address set forth above.

IV. IMPORTANT CONSIDERATIONS

1. The Vendor is selling this Property pursuant to its power of sale arising pursuant to the security documents entered into between the Vendor and the registered proprietor of the Property. The obligation of the Vendor to sell and completion of sale of the Property is subject to approval of the Grand Court of the Cayman Islands pursuant to the Registered Land Law of the Cayman Islands.

2. The Property has been registered as a strata plan and constitutes strata lots pursuant to the Strata Titles Registration Law.

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TRINITY SQUARE APPENDIX A Prime Location – Retail/Commercial Centre, Eastern Avenue Grand Cayman, Cayman Islands

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• Eastern Avenue view • Contents table

1 investment summary 3

2 property overview 5

3 market overview 6

4 location 7

5 current rent roll and tenant roster 8

6 property management and upgrade programme 9

7 profit and loss 2013 10

8 cash flow projections 2014-18 11

9 financial highlights 12

10 transaction guidelines & contact information 15

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• Trinity Square Road Side View Block A.

1 Investment Summary

IRG – International Realty Group Ltd. is offering for sale the strata title freehold (fee simple) interest in the strata units comprising Trinity Square, George Town, Grand Cayman, excluding units B1 (H17) and B2 (H18) sold to the National Building Society of Cayman (the “Property”) at a guide price of CI$6.18 million with a reinstatement value for insurance purposes of CI$8.35 million excluding the value of the site.

The Property for sale forms 41,320 square foot of a 43,620 square foot two-story retail/office complex constructed approximately 13 years ago to a good commercial standard and situated on 2.419 acres± of land on the busy arterial route of Eastern Avenue on the edge of George Town. The Purchaser would therefore own the majority (94.73%) of the complex in terms of area and 25 of the 27 strata units.

The Property is situated in a prime location on the busy thoroughfare of Eastern Avenue which the main tourism corridor along West Bay Road to Shedden Road and Central George Town, the nation’s capital. The Property is minutes away from George Town’s Central Business District and the Owen Robert’s International Airport on the highly-developed western side of the island, the location of the world famous Seven Mile Beach.The location offers 310’ feet of road-front visibility and offers strong kerb appeal. The Property offers a strong upside potential once upgraded to a good commercial standard and proactively managed.

Trinity Square boasted high occupancies until 2008, supported by a strong mix of tenants, however over recent years has been neglected by the landlord and has lost anchor tenants in a difficult market. Ineffective management and maintenance programmes subsequently led the fabric of the Property to deteriorate and the Property has been leasing at well under current market rents for comparable properties in good condition. Since April this year, IRG have taken over the management of the property and put in place effective maintenance, upgrade and leasing programmes. These have led to a halt the downward spiral, increased occupancy and net operating income over the past 8 months. Current occupancy level for the complex is 53.37% including the units sold.

A condition survey of the Property has concluded an upgrade programme to the value of around CI$400,000, including repainting the building exterior, replacement of all windows and frames and the installation of a full back-up generator for the office space will bring the Property up to standard and permit market rent terms to be achieved. Based upon the proposed improvements, a rebranding and repositioning campaign, complimented by

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proactive and professional marketing of the Property during 2014, this should result in market rents being achieved from the start of 2015 onwards. These should result in a realistic first year net operating income for 2015 at CI$365,664 at 39% vacancy, rising to CI$721,542.53 in 2018 at 6.21% vacancy. These projected Net Operating Incomes take into account strata fee shortfalls for the vacant space during the period.

The Property offers ample on-site parking with 161 designated and visitors’ spaces, offering tenants and customers ease of access, plus additional roadside parking on Eastern Avenue. Most current leases have intentionally been signed for short-term basis with many month-to-month, in order to facilitate the upgrade and repositioning of the Property.

The Property is professionally managed by IRG with the aim of keeping maintenance/strata fees to a minimum and optimizing rentals, adopting on a long-term asset management strategy in order to significantly increase the Property’s value. The Strata plan is registered as No 324 and the Property is governed by the Strata Titles Law (2005) Revision and regular Strata Management procedures will be adopted during 2014. Landlord/Tenant relations are good and the vacant space is generally well fitted out and and should be highly rentable with a focused marketing effort and the planned upgrades by 2015.

Grand Cayman is home to an impressive array of retail, office and institutional tenants, attracted to the Island’s favourable tax regime and low cost business climate and strong local market by comparison to other Caribbean locations. Investors experience significantly higher returns on investment since no direct income tax or property tax exist in the Cayman Islands. The Island is currently ranked as the sixth largest financial centre in the world. The commercial/retail/entertainment market for space on Grand Cayman is quite impressive, with close to 3.5 million square feet of office space and better than average vacancy rates for comparable markets and jurisdictions.

There is little new office/retail supply planned for this market sector over the next two years and that which is under development now, has been substantially pre-leased and although supply is higher now than for the past few years, vacancy rates are still generally low compared with regional and international finance centres. Recent Government and private sector initiatives have strengthened the local economy and the outlook for the country is positive, with Moody’s maintaining Cayman’s traditionally strong Aa3 rating during 2012, whilst the addition of the third tier or Medical Tourism to the economy and Cayman’s reputation as a high quality and high value jurisdiction for both Tourism and business will assist in maintaining Cayman’s positive outlook for the foreseeable future.

Trinity Square provides investors with the following opportunities: • Low entry cost and strong potential upside for significantly improved income and appreciation. • Growing Cash Flow and Net Operating Income over a five-year term. • Low cost Business Climate with zero direct taxation. • Strong Location with high kerb-side visibility and high traffic count. Low Entry Cost And Strong Upside • The property is currently marketed at under its reinstatement cost. • The property presents opportunities, which should result in a significant increase in the rents achievable. • Well located units, offering space solutions to tenants from a variety of market sectors. • Net operating income realistically projected for CI$365,664.24 for 2015, rising to CI$721,542.53 by the end of 2018. Low Cost and Sophisticated Business Climate • No income taxes for individuals or corporations. • No property taxes apart from one time stamp duty payable by purchaser on transfer. • Stable economy and government rated Aa3 by Moodys. • Economic resilience enhanced by continued strength of existing industries and new medical tourism initiatives. Exceptional Location • Ideal location with easy access to business, tourist locations and Government buildings as well as a strong vehicular and pedestrian traffic customer base. • Minutes from George Town’s centre, Owen Roberts International Airport, Seven Mile Beach surrounded by successful commercial/retail development. • Prominent road frontage, high visibility from road and excellent tenant signage and branding opportunities.

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2 Property overview Address: Trinity Square, 71 A&B Eastern Avenue, George Town, Grand Cayman, Cayman Islands

Land Registry Details: Section: George Town Central Block: 14CF Parcels: 205 H1-H16 (incl) and H19 to H27 (incl).

Building Size: The units for sale comprise 41,320 square feet of the total building area of 43,620 square feet.

Parking: 161 spaces in total including visitor and designated plus extra, as permitted, kerb side.

Year Built: 2000 (approx.)

Structure: Concrete block and steel frame with standing seam roof and storm rated glazing.

Site Size: 2.419 acres±

Site Elevation: 6.5’ above mean sea level road-side falling to 5’ + in the rear carpark. Low levels of flooding and minimal damage were experienced during Hurricane Ivan.

Space Analysis:

- Total Rentable Area of Trinity Square: 43,620 sq.ft.

- Area Sold (units H17 & H18): -2,300 sq.ft.

- Total Area of Property for Sale: 41,320 sq.ft.

- Total Area of Property leased: 20,980 sq.ft.

- Current Occupancy Levels: 53.37%

- Current Vacancy Levels: 46.63%

• Trinity Square Road 2nd floor Block A.

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3 Market overview The Property is located in the Cayman Islands in the western Caribbean, approximately 150 miles south of Cuba and 180 miles west of Jamaica, with easy access to Miami, Florida. The Cayman Islands, a UK Overseas Territory, consist of Grand Cayman, Cayman Brac and Little Cayman. The Property is situated on Grand Cayman, which is the largest of the three islands. Totaling 76 square miles in size, Grand Cayman, contains the majority of business and economic activity for the Cayman Islands. The Cayman economy is driven mainly by financial services and tourism, although real estate sales and development also have a strong impact. Grand Cayman has over 68,000 registered companies, around 500 banks, 8,000 registered funds and 670 insurance companies. Due to the Islands’ strategic location, sophisticated legislation and refined infrastructure, it remains an integral part of the worldwide financial network. Over 500 banks with assets totaling close to $1.472 trillion contribute to this thriving market and have helped establish the Cayman Islands as the world’s sixth largest financial centre with the highest standard of living in the Caribbean. The following benefits exist for businesses in the Cayman Islands: • Friendly Investment Environment – No Local Direct Taxes • Stable Government and Strong Economy • Privacy and Confidentiality The Cayman Islands has no income tax for individuals or incorporated companies, which continues to attract a wealth of business investment on the Island. Investors enjoy healthy returns on investments since no direct income taxes apply. Also, no taxes apply towards capital gains, real estate, profits, or wealth transfer/inheritance matters. The government of the Cayman Islands derives its income from company registration fees, stamp duties, import duties and other non-income orientated taxes. Nonetheless, the Cayman Islands support a healthy mix of residential communities, commercial development and businesses. Many leading international accounting and legal firms operate offices in the Cayman Islands, which help to complement local financial institutions and contribute to the efficiency of Cayman’s business climate both locally and offshore.

• Trinity Square Road Side View Block B.

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4 Location

The Property is located less than half a mile from George Town Centre and just over 1 mile from the airport.

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5 Current Rent Roll and Tenant Roster

Tenant Floor/unit Lease start

Lease Term Details

Rentable area/sf

Gross Rent Rate 2013 /CI$psf pa

Rent Inc. 2013 /CI$

Service Charge

Service Strata/Sq.ft. pa

Honor & Glory Internat’l Grnd A-‐1A Aug-‐13 1.5 years 1st term 7,700 10.13 78,000.00 Included -‐

Vacant 2nd A-‐1B -‐ -‐ -‐ 5,720 -‐ -‐ Included -‐

KJ Fast Cash Ltd Grnd A-‐2 Apr-‐13 1 year 1st term 640 28.13 18,000.00 Included -‐

S&R Enterprises Ltd A-‐3 Nov-‐13 695 27.63 19,200.00 Included -‐

Cicero & Kathleen Alexis A-‐4 Aug-‐13 8 months 1st term 1,020 20.00 20,400.00 Included -‐

Cicero & Kathleen Alexis A-‐5 Oct-‐12 1 year 1,020 25.88 26,400.00 Included -‐

Kids Adventures Ltd A-‐6 Dec-‐08 Monthly Monthly 1,020 21.18 21,600.00 Included -‐

Ministry of Peace Church A-‐7 Apr-‐13 6 months Monthly 1,020 23.53 24,000.00 Included -‐

Kids Adventures Ltd A-‐8 Dec-‐08 Monthly Monthly 1,020 21.18 21,600.00 Included -‐

Vacant A-‐9 -‐ -‐ 1,305 -‐ -‐ -‐ -‐

Vacant A-‐10 -‐ -‐ 1,465 -‐ -‐ -‐ -‐

Vacant A-‐11 -‐ -‐ 1,020 -‐ -‐ -‐ -‐

Vacant A-‐12 -‐ -‐ 1,020 -‐ -‐ -‐ -‐

Vacant A-‐13 -‐ -‐ 1,020 -‐ -‐ -‐ -‐

Vacant A-‐14 -‐ -‐ 1,020 -‐ -‐ -‐ -‐

Digicel A-‐15 Oct-‐04 5 years Options to 2029 1,020 20.16 20,560.92 Included -‐

William Office A-‐16 1,690 -‐ -‐ -‐ -‐

Sold (Nat. Bldg. Soc.) B-‐1 -‐ -‐ 1,140 -‐ -‐ 7,980.00 7.00

Sold (Nat. Bldg. Soc.) B-‐2 -‐ -‐ 1,160 -‐ -‐ 8,120.04 7.00

Hycam B-‐3 Mar-‐10 3 years Monthly 1,180 30.58 36,079.92 Included -‐

Annie's Beauty Salon B-‐4 Nov-‐13 6 months 1st term 1,180 25.42 30,000.00 Included -‐ Vacant B-‐5 -‐ -‐ 1,155 -‐ -‐ -‐ -‐

Jen Int’l Insurance ltd. B-‐6 Aug-‐10 3 years Monthly 1,155 34.38 39,713.40 Included -‐

Vacant B-‐7 -‐ -‐ 2,585 -‐ -‐ -‐ -‐

Christian Ctr for All Nation B-‐8 Oct-‐10 6 months Monthly 2,310 12.99 30,000.00 Included -‐

Vacant B-‐9 -‐ -‐ 2,340 -‐ -‐ -‐ -‐

Digicel Tower Oct-‐04 5 years Options to 2029 0 n/a 7,800.00 n/a n/a

Total 43,620 Annual CI$ $393,354.24 $16,100.04

For Sale 41,320

% vacant 53.38

Rented Area 19,265

Rent Strata

$32,779.52 $1,341.67

Gross Monthly Income CI$

$34,121.19

Gross Ann Income CI$

$409,454.28

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6 Property management and upgrade programme Upgrades already underway Quote/CI$ Paid to date/CI$ Balance Due/CI$ Elevator Repairs $48,640.00 $24,320.00 $24,320.00

Repair Flood lights $3,750.00 $1,875.00 $1,875.00

Fire Alarm System $7,712.30 $2,445.00 $5,267.30

Sewage Treatment Plant $8,082.98 $3,744.00 $4,338.98

Roof Repair $7,297.00 $-‐ $7,297.00 Painting Windows and doors $32,525.00 $-‐ $32,525.00

Building lighting & Electrical repairs $2,260.00 $2,260.00 $-‐

Total $110,267.28 $34,644.00 $75,623.28

Recommended future upgrades Estimate/CI$ Notes Painting Building $40,000.00 Exterior walls Treat & Re-‐paint all rails $15,000.00

Replace Windows $100,000.00 Including frames Seal leaking awing and guttering $15,000.00

Re-‐tile Stairs by Elevator $5,000.00

Treat and Paint underside of stairs $15,000.00

Re-‐paint parking lines & Parking blocks $5,000.00

Install generator $200,000.00 For office suites (optional for retail)

New building and directional signage $5,000.00

Total $400,000.00

• Trinity Square Rear View Block A and B.

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7. Profit & Loss 2013

Profit and Loss: May -‐ Dec 2013 (CI$)

Trinity Square May Jun Jul Aug Sep Oct Nov Dec

1-23 TOTAL

INCOME

Rental Income 15,917.78 23,517.78 23,517.78 31,717.78 31,717.78 31,717.78 34,217.78 34,217.78 226,542.24

Late Fee Income 0.00 0.00 0.00 0.00 75.00 150.00 0.00 0.00 225.00

Total Income 15,917.78 23,517.78 23,517.78 31,717.78 31,792.78 31,867.78 34,217.78 34,217.78 226,767.24

EXPENSES

Banking Charges 16.88 8.60 12.35 89.76 26.46 7.60 45.14 0.00 206.79 Building Repair/Maint.

Airconditioning Maint. 0.00 0.00 1,875.00 4,696.00 617.10 429.00 1,803.50 0.00 9,420.60

Deep Well Maint. 0.00 0.00 0.00 470.00 0.00 0.00 0.00 0.00 470.00

Electrical 0.00 0.00 544.00 182.60 2,130.00 1,875.00 1,275.00 780.00 6,786.60

Janitorial 0.00 0.00 0.00 0.00 4,050.00 1,900.00 2,400.00 3,050.00 11,400.00

Keys/Relocking 0.00 0.00 174.00 552.30 0.00 0.00 0.00 825.30 1,551.60

Landscaping 0.00 0.00 3,500.00 500.00 0.00 0.00 0.00 0.00 4,000.00

Materials 0.00 0.00 0.00 292.95 335.00 0.00 0.00 0.00 627.95

Pest Treatment 0.00 150.00 0.00 0.00 0.00 0.00 0.00 0.00 150.00

Plumbing 0.00 0.00 0.00 0.00 0.00 6,946.30 2,445.00 7,490.00 16,881.30

Power Washing 0.00 0.00 3,200.00 0.00 0.00 0.00 0.00 0.00 3,200.00

Security 0.00 0.00 0.00 0.00 550.00 0.00 0.00 0.00 550.00 Building Repair/Maint. -‐ Other 0.00 261.50 0.00 0.00 0.00 0.00 0.00 2,800.00 3,061.50 Total Building Repair/Maint. 0.00 411.50 9,293.00 6,693.85 7,682.10 11,150.30 7,923.50 14,945.30 58,099.55

Garbage Removal 0.00 0.00 0.00 0.00 0.00 0.00 50.00 0.00 50.00

Property Insurance 9,000.00 11,294.00 11,294.00 11,294.00 11,294.00 11,294.00 11,294.00 11,294.00 88,058.00 Property Mgmt Fee 3,200.00 3,200.00 3,200.00 3,200.00 3,200.00 3,200.00 3,200.00 3,200.00 25,600.00

Telephone 90.00 90.00 90.00 90.00 90.00 90.00 30.00 0.00 570.00

Water 89.00 785.76 105.40 30.96 30.00 30.00 30.57 0.00 1,101.69

Electricity 259.97 104.96 528.42 1,738.61 0.00 585.33 1,144.64 0.00 4,361.93

Total Utilities 348.97 890.72 633.82 1,769.57 30.00 615.33 1,175.21 0.00 5,463.62

Total Expense 12,655.85 15,894.82 24,523.17 23,137.18 22,322.56 26,357.23 23,717.85 29,439.30 178,047.96

Net Income 3,261.93 7,622.96 1,005.39 8,580.60 9,470.22 5,510.55 10,499.93 4,778.48 48,719.28

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8 Cash flow projections 2014-2018

Assumptions: See Financial Highlights below

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9 Financial highlights OVERVIEW This section presents cash flow projections and cash flow assumptions for the Property. cash flow projections

The “Cash Flow Projections” exhibit presents projected operating results for the Property on a calendar year basis for a five-year period, beginning January 2014. All projections contained herein were made by IRG on behalf of the Owner and are based upon assumptions of events beyond the control of IRG and Owner and, therefore, may be subject to variation. The information has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the Property. The value of this transaction to you depends on tax and other factors, which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the Property to determine, to your satisfaction, the suitability of the Property for your needs. cash flow assumptions

The “Cash Flow Assumptions” section provides detail regarding the revenue, expense, capital and leasing assumptions that are the basis of the “Cash Flow Projections” exhibit. All projections contained herein were made by Owner and are based upon assumptions of events beyond the control of Broker and Owner and, therefore, may be subject to variation.

Value: The “Cash Flow Projections” section project and average four year Net Operating Income (NOI) after upgrade and rebranding of CI$557,929.86. Assuming a 8.5% Return on Investment and 8% closing costs provides a projected future value of CI$6.077million, which provides a potential upside to investors

Projected Value ROI CI$

4 year average NOI CI $557,929.86

Value after renovation/rebrand RO! of 8.50% $6,563,880.72

Less 8% closing costs backed out CI $6,077,667.33

The Property is listed at CI$6.18million, as a guide price to investors. The Property is insured at a reinstatement value of CI$8.35m excluding the site which can be conservatively estimated at CI$16 per sq.ft. giving an raw land value of CI$1,685,946.24 giving a total reinstatement plus site of CI$10,035,946.24. Units H17 and H18 were each sold in October 2008 for CI$265 per sq.ft. GENERAL ASSUMPTIONS analysis period

Five-year projection period on a calendar year basis, beginning January 2014 to December 2018. All rental rates and expenses detailed below are quoted on a 2013 calendar year basis, increasing as shown in the below rent summaries. rentable area

The total rentable area of the Property is 41,320 sq.ft. excluding the sold units. building area

43,620 sq.ft. of gross building area.

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market rental rates

The projected 2013/14 market rental rates for similar quality adequately maintained buildings in the surrounding area are as follows:

2015 Market Norm Base Rent Rates Unit #'s Net CI$psfpa

(after refurbishment and repositioning) Low * High*

Eastern Avenue Grd Fl Retail A1A & B1-‐B4 15 23

2nd fl office B7-‐B9, A1B,A10-‐A16 18 23

Block A Grnd Fl Office/Retail A2-‐A9 20 23

Block B Grnd Fl Retail B5-‐B6 18 23

• Rate determined by area leased and unit location • Strata Fees paid by tenant in addition t base rent

Existing leases are gross including CI$7psf per annum for strata fees. New leases are assumed to be triple net with tenants paying their pro-rata share of operating expenses as a strata fee in addition to base rent as set out in the lease summaries above. market rent growth rates

Due to the higher than usual vacancy rates in the current market, rental rates are projected to remain relatively stable from 2015 to 2017 with annual increases thereafter where achievable at the lower end of normal ranges i.e. 3% to 5%. inflation rate

The Cayman Islands consumer price index shows a 1.2% increase for 2012 over 2011. Inflation is expected to remain at similar levels for 2013 and 2014 also and strata fees are anticipated to remain stable. Since tenant maintenance fees (CAM) are billed back at actual cost in the Property’s leases as Strata Fees, even a modest increase will have no effect on the net operating income of the building, except where the Landlord needs to make this contribution for vacancies. Strata fees are assumed to escalate at 2% per annum from 2015 onwards in the Cashflow Projections. lease terms A three to five-year lease term at projected market rate is assumed for all renewals (depending upon tenant) where applicable except where options periods and rates are specified in each lease. base rent escalation Rent escalations for existing tenants are modeled to reflect contractual lease terms. All new and speculative renewal leases are assumed to reamin stable until 2017 and escalate at 5% on renewal, remain at a fixed rent rate for the first three years and escalate at 3% per annum for the remainder of the renewal term thereafter.

REVENUE ASSUMPTIONS base rent The Base Rental Revenue derived from existing leases recently entered into is known to be significantly under current market value due to the condition of the Property and speculative base rent from assumed future leasing and re-leasing as defined in this section.

expense assumptions Strata fees, which reflect typical ownership and management operations, are projected into the future using an annual growth rate of 2%. The table below shows projected expenses for 2014. operating expenses/strata fees 2013 Profit and Loss above show extrapolated expenses for 2013 for the Property as CI$ 267,071.94 or CI$6.12 per sq.ft. 2014 operating expenses are therefore budgeted at CI$7.00 per square foot for the Property, which is in line with current strata fees set for units B1 and B2.

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property management The Property is currently managed by IRG. transfer taxes Under Cayman Island law, no real estate taxes are paid for properties within the Cayman Islands. The Government of the Cayman Islands instead derives its income from company registration fees, stamp taxes, import duties and other non-income orientated taxes. The real estate transfer tax is typically 7.5% percent of the sale price, which may vary from time to time.

CAPITAL EXPENDITURES Tenant Improvements allowances are not typically granted for this type of property however a new tenant will typically be able to assume the benefit of the existing fit-out. Leasing Commissions are computed as a percentage of the total base rent over the term of the lease and are paid upon execution and commencement of the lease. The typical commission structure two month’s average rent for new tenants below five years lease and three months for five years and above and one month’s average renewing tenants

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10 transaction guidelines & contact information transaction guidelines The Purchaser will be selected by the Owner in its sole and absolute discretion on the basis of a variety of factors, including, but not limited to: i) offer price; ii) financial strength; iii) level of discretion to invest funds; iv) ability to close in a timely fashion; v) experience in closing similar transactions; vi) absence of any contingencies; vii) level of Property due diligence completed; and viii) thoroughness of Property underwriting. Other key Transaction Guidelines include the following: • Following the distribution of offering materials, Agent will be available to review information contained in the Offering Memorandum and assist Purchasers with on-site Property inspections. • All offers must be presented in writing and be net of all seller closing costs. • All offers must include the following: 1) the price; 2) the anticipated source of capital and details of any required approvals; 3) an outline of a proposed schedule for due diligence and closing; 4) description of any due diligence requirements; 5) the amount of earnest money deposit; and 6) a description of any physical or environmental assumptions that impact the price being offered. 7) a detailed background of the investor and source of funds. The Owner and Agent reserve the right to alter the Transaction Guidelines at their sole discretion. contacts All inquiries should be directed to the attention of any of the following representatives: IRG – International Realty Group Ltd. PO Box 2390 Grand Cayman KY1-1105 Cayman Islands Jeremy S. Hurst Broker/Owner Office. 345 623 1111 Cell. 345 525 9900 Fax. 345 623 1112 Email. [email protected] Website. www.irg.ky Disclaimer. Although information has been obtained from sources deemed reliable, the Owners, IRG – International Realty Group Ltd. (the Broker) and/or its representative, brokers or agents make no guarantees as to the accuracy of the information contained herein, and offers the Property without expressed or implied warranties of any kind. The Property may be withdrawn without notice.


Appendix B OFFER TO PURCHASE

"SEALED BID"

Date:

Purchaser:

Purchasers Address:

Contact Details:

Vendor: CIBC First Caribbean International Bank (Cayman) Ltd.

Property Address: Trinity Square Eastern Avenue, George Town, Grand Cayman, Cayman Islands

Bid Price for Block 14CF/Parcel 205 (H2 to H16 inclusive and H19 to H27 inclusive): CI$____________________________________

Method of Payment: Bidder shall pay an initial deposit of ______% of the Bid Price on signing of the Sales and Purchase Agreement (Appendix C), which shall be subject to forfeiture should the purchaser not meet the payment terms and conditions set forth in the agreement. All deposit monies paid by the Purchaser shall be held by the Vendor’s authorized agent as stakeholder and shall be held in trust at all times until completion. Purchaser and Vendor acknowledge that this Offer to Purchase is not a binding document and that it is merely intended as the basis for the preparation of a Sales and Purchase Agreement by the Vendor, which shall be substantially in the form attached in Appendix C and which shall be subject to both parties’ approvals. Only a fully executed Sales and Purchase Agreement shall be constituted as binding. None of IRG nor CIBCFC make any warranty or representation that this proposal will result in the execution of a Sales and Purchase Agreement. Please review Appendix C for pertinent information.

Any additional conditions must be listed in an addendum and attached to this “Offer to Purchase”

Signature of Purchaser: Date:

Witness:

Signature of Vendor: Date:

Witness:

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Appendix C SALE AND PURCHASE AGREEMENT

THIS SALE AND PURCHASE AGREEMENT (the “Agreement”) is made the ____ day of _________ 2011 BETWEEN: (1) ____________________ , (the “Vendor” which expression shall include the Vendor’s

successors or assigns whomsoever); and (2) _____________________ , (the “Purchaser” which expression shall include the

Purchaser’s successors or assigns whomsoever), WHEREAS the Vendor has agreed to sell the Property and the Purchaser has agreed to purchase the Property on the terms hereinafter appearing, IT IS HEREBY AGREED AS FOLLOWS:

1. DETAILS

Details of the Vendor, Purchaser, Property, Purchase Price and Manner of Payment are as set out in the attached Schedule I.

2. DEPOSIT

2.1 All deposit monies (the “Deposit”) shall be paid by the Purchaser in the amounts and on the dates set out in Schedule I and shall be held by the Vendor’s Attorney/Agent as stakeholder and the total amount of the Deposit shall be held in trust at all times (subject to the terms and conditions set forth in this Agreement) until Completion, at which time all such monies shall be paid over to the Vendor.

2.2 The Deposit shall not be paid over to the Vendor prior to Completion unless agreed in writing by both Purchaser and Vendor

3. COMPLETION

3.1 Completion will take place on or before the date as set out in Schedule I at the offices of the Vendor’s Attorney/Agent or any place as both the Purchaser and the Vendor may agree.

3.2 At Completion, in return for payment of the Purchase Price by the Purchaser;

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3.2.1 the Vendor shall deliver to the Purchaser or his agent a valid and duly executed instrument of transfer and any other such documents and assurances as are required in order to fully and completely effect the legal and valid transfer of absolute or leasehold title, including Land Certificate, if any; and

3.2.2 the Purchaser shall have vacant possession of the Property, which shall be free from all leases, tenancies or licenses whether or not registered, unless otherwise stated herein.

4. CONDITIONS TO AGREEMENT AND COMPLETION

The Vendor’s obligation to sell and Completion of this Agreement shall be subject to approval of the Grand Court of the Cayman Islands pursuant to the Registered Land Law.

5. PURCHASER’S CONDITIONS

This Agreement is made subject to the following conditions:

6. FIXTURES

All fixtures presently located on the Property shall be included in the Purchase Price, unless otherwise stipulated in this Agreement.

7. CHATTELS

The Chattels included in the Purchase Price shall be as specified in the attached Schedule II and title to said Chattels agreed to be sold shall pass at Completion.

8. ADJUSTMENTS

All adjustments for the Property including but not limited to utility charges, rents, insurance, damage and security deposits shall be made as at Completion and apportioned on a daily basis between the Vendor and the Purchaser. This transaction involves Strata Lots as defined in the Strata Titles Registration Law (1996 Revision) and any assessment owed to the Strata Corporation which has been invoiced before Completion is the responsibility of the Vendor unless otherwise stipulated by this Agreement.

9. PAYMENT OF FEES

The stamp duty and registration fees arising hereunder shall be borne by the Purchaser and each party hereto shall pay the legal fees of any attorney that may be retained by them.

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10. STATE OF THE PROPERTY AND THE CHATTELS

The Property and the Chattels shall be deemed to be purchased with full notice of their present state and condition subject to normal wear and tear occurring after the date hereof and prior to Completion. On Completion, the Property shall be vacant and free of all tenancies except as may be stated herein.

11. OVERRIDING INTERESTS

The Vendor warrants that it knows of no overriding interests as mentioned in Section 28 of the Registered Land Law (2004 Revision), (as may be amended from time to time), which affect the Property other than those, if any, already declared or apparent from an inspection of the Property and the said Property is sold subject to any such overriding interests that may exist.

12. IDENTITY OF THE PROPERTY

12.1 The Purchaser admits to the identity of the Property and Chattels with that comprised in the title offered by the Vendor under this Agreement and agrees that:

12.1.1 the Property and Chattels are correctly described;

12.1.2 no error or mis-‐‑description unless fundamental in nature made or given in respect of the Property or the Chattels whether made or given by the Vendor or by anyone on his behalf shall annul this Agreement;

12.1.3 the Property is sold subject to any appurtenances, encumbrances, restrictions or other notifications which may affect the Property other than any Charge or Caution currently entered on the Register; and

12.1.4 the Property is sold and the Purchaser shall take title subject to the provisions of the Registered Land Law and the Development and Planning Law, as amended from time to time.

12.2 The Purchaser agrees that the Property shall be sold and that he shall take title thereto and possession thereof subject to the provisions of the Strata Titles Registration Law (1996 Revision) as may be amended from time to time in general and the following matters in particular:

12.2.1 the Strata Plan No. [ ] (the “Strata Plan”) and the Registered By-‐‑laws of the Proprietors Strata Plan No. [ ] (of which By-‐‑laws the Purchaser acknowledges sight and acceptance) as the same may be amended from time to time;

12.2.2 the unit entitlement of the Strata Lot and all other matters from time to time contained in or endorsed upon or annexed to the Strata Plan;

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12.2.3 all easements including those for support, shelter and services and all other rights and liabilities expressed or implied in favour of or against a Strata Lot proprietor or a Strata Lot by virtue of law, equity, statute or otherwise.

13. SEARCH AND CAUTION

The Vendor will if requested by the Purchaser or his agent furnish the Purchaser with a copy of the entries on the Land Register and of a sufficient extract of the relevant Registry map and supply a written authority to inspect the Register relating to the Property and a Consent to a Stay of Registration. The Purchaser shall be entitled to lodge a Caution and/or Stay of Registration on the Register relating to the Property. In the event of the Agreement being rescinded or there being a default by the Purchaser, the Purchaser shall remove such Caution and/or Stay of Registration immediately and the Purchaser hereby appoints the Vendor as its fully authorized Attorney and agent to remove same upon the Purchaser failing to do so.

14. REQUISITIONS AND OBJECTIONS

The Purchaser shall be entitled to make requisitions and objections with respect to title to the Property. All such requisitions and objections shall be made within 21 days from acceptance by the Vendor hereof and further objections and requisitions arising from a reply shall be delivered within 14 days of the delivery of such reply. If the Purchaser shall insist upon any requisition or objection with which the Vendor may be unable or unwilling to comply and shall not within 10 days after being called upon to do so withdraw or waive the same, the Vendor may by notice to the Purchaser rescind this Agreement. Upon the Agreement being so rescinded, the Purchaser shall be entitled to a return of the Deposit and all other monies (if any) paid hereunder but not to any further payment by way of interest, compensation, costs or otherwise and shall forthwith return to the Vendor all papers furnished by the Vendor in relation to the sale.

15. PAYMENT BY CHEQUE

It is expressly agreed that should any of the monies referred to herein be paid by cheque or other form of bill of exchange, then none of the rights and obligations herein created shall have effect until the cheque or other form of bill of exchange has been cleared and honoured in the Cayman Islands.

16. RISK

Notwithstanding any rule of law, risk in the Property and the Chattels shall pass to the Purchaser on Completion. All buildings and Chattels included in the sale will remain at the risk of the Vendor until Completion, and all insurance policies and the proceeds thereof will beheld in trust for the parties as their interests may appear.

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17. RIGHT TO RESCIND

17.1 The Deposit shall forthwith be refunded if:

17.1.1 this Offer to Purchase is not accepted, or

17.1.2 any condition is not satisfied and neither party shall have any further rights of action or claim of any nature against the other in respect thereof.

17.2 If this Offer to Purchase is accepted and all the conditions are satisfied;

17.2.1 Should the Vendor fail to perform, the Purchaser shall be entitled to demand a refund of the Deposit and any other monies paid by him hereunder and on receipt of the same, this Agreement shall be forthwith terminated and neither party hereto shall have any rights of action or claim of any nature against the other in respect hereof.

17.2.2 Should the Purchaser fail to make any of the payments provided for herein on the due date (in respect of which time shall be of the essence), the Purchaser shall (upon receiving seven days notice of the Vendor’s intention to do so) forfeit absolutely the Deposit (or such part thereof as has been paid) together with any interest earned as liquidated damaged and this Agreement shall be forthwith terminated and neither party hereto shall have any further rights or action or claim of any nature against the other in respect hereof. If, however, the Vendor agrees to accept payments after the due date (which he may do so at his option), the Purchaser shall pay (in addition to said payment) interest at the rate of 3% per annum above the prime rate set by banks in the Cayman Islands for the currency in which the Purchase Price is payable on said payment until paid.

18. INTERPRETATION

In this Agreement the masculine general and the singular shall be construed as the feminine gender and the plural where the context so required. This Agreement shall enure to the benefit of and be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

19. ENTIRE AGREEMENT

This Agreement when executed by both parties is the complete agreement between the parties and the Purchaser hereby admits and declares that no statement, guarantee, promise, agreement, warranty or representation, whether oral or written, has been made with or to him on or prior to the date hereof by the Vendor, by anyone acting or purporting to act on the Vendor’s behalf, by the Listing Broker/Co-‐‑Broker or any real estate agent concerning the Property or otherwise which he relied upon, apart from as specifically set out in this Agreement. This Agreement may be executed in any number of counterparts, each of which when so executed shall be

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deemed an original but all such counterparts shall constitute one and the same instrument. Delivery of a counterpart signature page by facsimile transmission or by e-‐‑mail transmission of an Adobe Portable Document Format file (or similar electronic record) shall be effective as delivery of an executed counterpart signature page.

20. DELIVERY OF DOCUMENTS

For the purposes of this Agreement, all documents are considered to be delivered within three days of posting by express courier for foreign mail and registered for local mail to the Vendor or Purchaser at the address given in Schedule I or such address as may be notified by either party to the other from time to time.

21. JURISDICTION

This Agreement shall be subject to and in accordance with the laws of the Cayman Islands and the parties hereto submit to the jurisdiction of the Cayman Islands courts.

SIGNED AND DATED at "ʺ[insert city/country]"ʺ on the _______ day of ____________ 2014 _________________________ _____________________________ Witness to Vendor Vendor _________________________ _____________________________ Witness to Purchaser Purchaser

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SCHEDULE I Name, Address, Phone and Fax Numbers, Email Address of Vendor: Name _____________________________________ Address _____________________________________ Address _____________________________________ Address _____________________________________ Phone #_____________________________________ Email ____________________________________ Name, Address, Phone and Fax Numbers, Email Address of Purchaser: Name________________________________________ Address______________________________________ Address______________________________________ Phone #__________________Fax #_______________ Email________________________________________ Name and Address of Vendor’s Attorney/Agent: Name________________________________________ Address________________________________________ Address________________________________________ Legal Description of Property: Registration Section: George Town Central Block: 14CF Parcel: 205 H2 to H16 inclusive and H19 to H27 inclusive ____________________________________________________________ Name and/or Address of Property: Trinity Square, Eastern Avenue, George Town, Grand Cayman, Cayman Islands ____________________________________________________________ Price: Initial Deposit __________________ due on ________________ Further Deposit __________________ due on ________________ Final Payment __________________ due at completion Total Sale Price __________________ Completion Date ________________

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SCHEDULE II

Schedule of Chattels

Agreed Value: [ ]

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