+

SBpacific

City View Apartment, San Antonio

groupPortofino, San Antonio

Portofino, San Antonio

9/25/12

East Lake Laney Lofts, Oakland

+About SBpacific Group

Our History SB Pacific Group acquires under-utilized

properties and transforms them into vibrant, high-value real estate assets

Located in Berkeley, California Founded in 1986

Experience Focus on value-add infill development Handles large luxury redevelopment

Lake Merritt Lodge, Oakland

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+Investment Philosophy

Texas and California High density suburban

property

Supervise construction and rehabilitation projects

Superior network of contacts

Class B- to B+ or B renovations Rehabilitation, repositioning,

and adaptive re-use

Geographic Specialization

Management Expertise

Fundamental Value-Driven

Approach

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+Acquisition Criteria

Property Types Multifamily rental Retail & Office

Market Segment Opportunistic value-add Up-trending submarket

($5-$20 million) Near-term growth focus in

California and Texas

Lodge on Perrin Creek, San Antonio

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+Recent Projects

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San Antonio Apartment Portfolio

- 211 units bought with 65% occupancy

- Rent increase- Full rehabilitation to 95% occupancy

East Lake Laney Lofts

-Renovated creamery to 26 Class A Condos - All units sold within 1 month of finish

City View Apartments

- 318 units re-branded to City View

- Rent increase and still own- Full rehabilitation to 96% occupancy

San Antonio Apartment Portfolio

East Lake Laney Lofts

City View Apartments

San Antonio, TX Oakland, CA San Antonio, TX

The Offering

Price: $11,500,000Built: 1970Price Per Unit: $42,279Price Per Sq Foot: $50.86Units: 272GBA: 226,104Land Area: +/- 10 acres

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+

San Antonio and the Surroundings… San Antonio is the 7th largest city in the U.S with a population of 2.08 million Portofino is near the South Texas Medical Center which includes 45 medical

institutions and over 28k professionals. Associated support businesses employ 23k. The average wage is 20% higher than the median San Antonio income.

Portofino is a walking distance to USAA, a San Antonio based diversified financial services group. Over 18,000 employees occupy the corporate headquarters at the corner of Fredericksburg and Huebner.

Location Profile

South Texas Medical Center

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+Location Profile

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Strategic Access Advantageously located within five

minutes to two of San Antonio’s largest employment centers

Short drive to San Antonio’s largest university, new retail centers, and state of the art entertainment

Flourishing Employment USAA, South Texas Medical Center,

and the University of Texas at San Antonio in immediate submarket

Adjacent to Fredericksburg Road and a short distance to Interstate Highway 10 and Loop 410

+Location Profile

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+Apartment Unit Amenities

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Indoor Amenities 272 Unit Garden Apartments in northwest submarket Central HVAC & washer/dryer connections in select

units Large walk-in closets and storage Fitness center and two clothes care facilities Select units have remodeled kitchen and bath

Outdoor Amenities Two swimming pools Gated entry w/ picnic area and barbeque stations Lush native landscaping with magnificent oak trees,

limestone garden walls, and courtyards Professional leasing center

Apartment Unit Breakdown

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Units Type Unit SF Total SF

56 1 Bed / 1 Bath 525 29,40068 1 Bed / 1 Bath 705 47,94080 2 Bed / 2 Bath 905 72,40040 2 Bed / 2 Bath 1,032 41,28028 3 Bed / 2 Bath 1,253 35,084

272 831 226,104

+Apartment ComparableApartment Complex # of Units Avg. Size (SF) Avg. Market Rent Rent per sq.foot

Arroyo Ranch 277 968 $802 $0.83

Bent Tree 272 693 $693 $1.00

County View 272 784 $744 $0.95

Limestone 324 764 $639 $0.84

Mesa Ridge 200 784 $694 $0.94

Portofino 272 833 $651 $0.78

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+Rent Comparable

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Discount

Value-AddOccupancy

Why Purchase Montage at North Point?

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Attractive Occupancy Current economic occupancy is 76%

and present physical occupancy is 92% our target physical range is 98%

Increase occupancy and maximize collections boosting revenue

Well Located Asset Ability to attain asset directly from

lender with asset management upside (Off Market Opportunity)

Value-Add Opportunities

Exterior Additions Landscape trimming & sprinklers Painting a portion of the building Recoat and restripe the driveway

Interior Upgrades Replace carpet with Prego Replace kitchen laminate

countertops with granite Two-tone painting

Timing Ideal due to expansion of South

Texas Medical Center Historically low interest rate &

depressed price

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+Expected Development Results

General Notes Current Occupancy 90%, Stabilized 88% / Water reimbursement through Conservancy Expenses based on City View Performance

2011-2012 Pro Forma 3rd YearGross Scheduled Rent 2,116,896 2,263,956

Vacancy and Collection Loss 692,356 387,801

Net Rental Income 1,424,540 1,876,155

Other Income 119,213 212,386

Economic OccupancyPhysical Occupancy

67%90%

83%93%

Total Income 1,543,753 2,088,541Total Expenses 1,362,157 1,255,231

Net Operating Income 181,596 833,310

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+Purchase Price Analysis

General Assumptions Assumes 75% Loan to Value Total Cash Down payment includes 1% loan fee, insurance, legal fees, title &

escrow, and capital reserve

Actual 3rd Yr Proforma

Purchase Price 11,500,000

Down payment 3,248,775

NOI 181,597 833,310

Mortgage Payment6.9MM 5.6% 30-yr due in 7 years)

330,938

Net Cash Flow 181,597 502,372Return $ on $ 15.46%

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+Net Cash Flow & IRRScenarios

IRR 2011 2012 2013 2014 2015 (Sale)

Cap Rate

127.62

% -2,935,901 396.770 427,017 493,904 5,587,4655.75

%

227.21

% -2,935,901 396.770 427,017 493,904 4,573,1086.25

%

324.79

% -2,935,901 396.770 427,017 493,904 3,709,0266.75

%

4 22.40%-2,935,901 396.770 427,017 493,904 3,323,275

7.00%

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IRR1 IRR2 IRR3 IRR40.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00% 27.62% 27.21%24.79%

22.40%

5.75% 6.25% 6.75% 7.00%

IRRCap RateSeries3

Our Market View

Key Advantages

Cheap Financing 3.75% in Pro forma Model

Attractive Market +10% Cash on Cash Return Up-trending submarket Property enhancements can push

rents higherLodge on Perrin Creek, San

Antonio

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+Projected Fees

Management Structure Fee

General Management receives an acquisition fee of .75% for sourcing, seeding, negotiating, and closing opportunity.

Asset and Management Fee is 5%

Investors and general management will split the annual net cash flow 85/15 as long as investors receive 6% annual return on their investment.

At closing, Investors and General Management will split all proceeds 80/20 after meeting all obligations including but not limited to debt service and closing costs.   

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+Experienced Team of Professionals

Responsible for strategic management of the firm, Mr. Sarfaty identifies, evaluates and selects investment opportunities for SB Pacific Group. Prior to founding SB Pacific Group, Mr. Sarfaty used his entrepreneurial skills to establish several small companies, including a contracting business which he continues to operate today.

Yuval Bobrovitch Principal & Co-founder

He has held a real estate license since 1989.His experience as a contractor and his eye for opportunity have helped Mr. Sarfaty negotiate lucrative real estate transactions that create lasting value.

Responsible for oversight of construction projects, Mr. Bobrovitch is involved in site analysis, design development and construction management. Mr. Bobrovitch has extensive experience in the construction and renovation of multifamily residential and commercial properties. He is a general contractor, and supervised all of the early projects in the SB

Pacific Group Portfolio. Through his diligence, Mr. Bobrovitch sets the standard by which the full upside potential of properties should be reached.

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Igal SarfatyPrincipal & Co-founder