+

Galaxy Park IIInvestment Opportunity

+You should buy this Property.

And here is why.

+

The Building• Built in 1989 at Concord, CA• Reflective Pond• Marble and Glass• Recently Renovated

The property

+ The property

The Floor Plan• 4 Story • 97,000 SF• Flexible• 2 Elevators

+ The property

Transportation• BART• Shuttle• Parking lot

+The location

• Lower rents• Retail centerConcord

• Steady Growth• Household incomePopulation

• High tech, service, finance and real estate

Employment

+The market

Lower unemployment

Demand for space pushes rent upwards

No additional development

Declining vacancy rate

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20120.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Vacancy Rate in Concord

+The Market

Great Opportunities

Leasing activity

increase 40%

Market rent up to $2,00 sf

Class A building

lower vacancy rate

+ Competition

Competitive advantage

Freeway frontage

Class A

Parking

Flexible design

Amenities

+Appraisals

Method Total Price Price per SF

Replacement cost 24.036.600 248

Comparables 10.650.600 110

Income Growth 11.413.035 118

Income Cap rate 13.387.067 138

We Suggest $110/sf

+Mortgage Options

Wells Fargo

• 75% amount• 4% annual

interest• 25 year

maturity• $42,240 per

month

Bank of America

• 75% amount• 5% annual

interest• 15 year

maturity• $63,283 per

month

Year Interest Amortization Mortgage Outstanding

1 316.637 190.244 7.812.256 2 308.886 197.995 7.614.260 3 300.820 206.062 7.408.199 4 292.425 214.457 7.193.741 5 283.687 223.194 6.970.547 6 274.594 232.288 6.738.259 7 265.130 241.752 6.496.508 8 255.281 251.601 6.244.907 9 245.030 261.851 5.983.055

10 234.362 272.520 5.710.536 11 223.259 283.623 5.426.913 12 211.704 295.178 5.131.735 13 199.678 307.204 4.824.532 14 187.162 319.720 4.504.812 15 174.136 332.746 4.172.066 16 160.580 346.302 3.825.764 17 146.471 360.411 3.465.353 18 131.787 375.095 3.090.258 19 116.505 390.377 2.699.882 20 100.600 406.281 2.293.600 21 84.048 422.834 1.870.767 22 66.821 440.061 1.430.706 23 48.892 457.989 972.717 24 30.233 476.649 496.068 25 10.814 496.068 -

+Financial analysis: Key Facts

Data ValueBase Rent 2.153.400,00 NOI 967.927,60 ATCF 202.291 Operating expenses/sf 8,92 Operating expenses/gross revenue 47%Added Margin 17%Break Even Occupancy 80,36%Loan to Value 75%Debt coverage 2,10

Year 0 1 2 3 4 5 and Sale IRR

CF Before Tax -2.667.500 318.826 353.380 389.143 426.154 6.793.960 29%

CF After Tax -2.667.500 178.143 196.760 216.018 235.937 5.849.550 22%

+The Tenants

Suite Tenant Rentable SF Rent SF per Month Lease Start Lease End

100 Vacant 2.548

120 Vacant 3.184

130 Vacant 4.841

140 Tbp Architecture 5.606 $1,90 ago-10 nov-15

150 Barrett Business Services 3.641 $2,00 dic-10 nov-15

200 Inovis 17.112 $1,85 nov-11 ott-16

220 Blackhawk Claims 3.349 $2,00 feb-10 ott-15

250 East Bay Regional Data 3.689 $2,30 feb-09 gen-14

300 Vacant 14.312

320 Vacant 7.067

330 Old Republic Title 3.805 $2,05 feb-07 giu-14

400 Old Republic Title 12.324 $2,05 feb-07 giu-14

435 California Psychiastic Medical 1.657 $2,15 ott-08 set-14

440 Benefitmall 4.937 $2,00 lug-09 lug-14

445 Rimkus Consulting 3.474 $1,90 ago-11 lug-16

450 Mutual of Omaha 2.740 $1,90 giu-11 mag-16

135A Tbp Architecture 419 $1,90 ago-09 nov-14

135B Vacant 2.301

6 in 2014

3 in 2015

1 in 2016

Lease end Average

$2,02 per sf per month

35% vacant

Full Service Gross

Rents

+Problems

High Vacancy rate

High Purchase price

Low Appreciation

+For the Skeptics: Scenario and Sensitivity Analysis

Data Best Base WorstPurchase

price/sq foot 100 115 120

Rent/sq foot 2 1,85 1,75Rent growth 4% 3% 3%

Op Ex 7,5 8,85 9Op ex growth 1% 2% 3%Vacancy rate 10% 15% 17%

Cap rate 7% 8% 8%

BTIRR 65% 23,16% 7,66%ATIRR 51% 16,70% 3,12%

• Sales Cap rate 14%• Vacancy 31%• Rents $1.5 sq per month• Op expenses $14.5 sf• Rent growth -3%• Op ex growth 12%

0% ATIRR

+Who is this property for?

Does not want to be involved in Renovation

Lacks time to manage the property

Prefers small to medium size tenants

Is willing to offer below market rents for the first years

Is looking for a 20% return

Is willing to take same risk

+

So…

Did we convince you?

+Appendix: Replacement Cost Appraisal

Replacement cost Notes sf $/sf Totals

I. LANDTotal Land 121.968 15,00 1.829.520

II. HARD COSTS (1)

Shell & Core 97.000 115,00 11.155.000Site Work 97.000 8,00 776.000

Below Grade Parking 97.000 12,00 1.164.000Tenant Improvements 97.000 30,00 2.910.000

Total Building & Garage 97.000 165,00 16.005.000III. SOFT COSTS

Total Soft Costs 25% of building and garage 97.000 41,25 4.001.250

IV. DEVELOPER OVERHEAD & PROFITTotal Developer Overhead &

Profit 12% of I + II + III 97.000 26,55 2.575.350

V. TOTAL REPLACEMENT COSTS

Total Replacement Costs 97.000 247,80 24.036.600

(1) $/sf for hard costs was based on an analysis that Bovis Construction did on a similar property located in the Concord submarket.

+Appendix: Comparables Appraisal

Property data

Size Price per sf

Tot Sale Price Date Sale Date built Location Weighted Price

per sf

80.000 95 7.600.000 Apr-11 1970 Walnut Creek 8,14

60.000 150 9.000.000 Feb-12 1985 Walnut Creek 25,71

300.000 67 20.100.000 Jun-11 1986 Concord 7,66

80.000 90 7.200.000 Aug-11 1986 Concord 18,00

350.000 100 35.000.000 Sep-11 1988 Concord 14,29

75.000 120 9.000.000 Oct-11 1990 San Ramon 20,57

200.000 70 14.000.000 Jul-11 2009 Walnut Creek 4,00

250.000 200 50.000.000 Jan-12 2009 Walnut Creek 11,43

110

+Appendix: Income Appraisal

AssumptionsTV growth 2%Cap rate 7%

Discount rate 11%

AppraisalYear NOI PV (NOI)

1 967.928 872.0072 1.005.615 816.1803 1.044.606 763.8074 1.084.943 714.6855 1.126.670 668.624

TV growth 12.768.922 7.577.734TOT 11.413.035

Price per sf 117,66TV cap Rate 16.095.280 9.551.765

TOT 13.387.067Price per sf 138,01

+Appendix: Pro Forma

Data per sq foot/average 1 2 3 4 5

Base Rent $ 1,85 2.153.400 2.218.002 2.284.542 2.353.078 2.423.671

Additional Revenue $ 0,01 970 999 1.029 1.060 1.092

Expense Reimbursement $ 0,02 1.940 1.998 2.058 2.120 2.183

Potential Gross Income 2.156.310 2.220.999 2.287.629 2.356.258 2.426.946

Vacancy 15% 323.447 333.150 343.144 353.439 364.042

Effective Gross Income 1.832.864 1.887.849 1.944.485 2.002.819 2.062.904

Property Insurance $ 0,31 30.070 30.671 31.285 31.911 32.549

Management Fees $ 0,57 54.986 56.086 57.207 58.351 59.519

Administrative Fees $ 0,20 19.400 19.788 20.184 20.587 20.999

Utilities $ 2,70 261.900 267.138 272.481 277.930 283.489

Maintenance $ 0,82 79.540 81.131 82.753 84.408 86.097

Cleaning $ 1,40 135.800 138.516 141.286 144.112 146.994

Payroll $ 0,80 77.600 79.152 80.735 82.350 83.997

Security $ 0,60 58.200 59.364 60.551 61.762 62.998

Real Estate Taxes $ 1,22 118.340 120.707 123.121 125.583 128.095

Landscaping $ 0,30 29.100 29.682 30.276 30.881 31.499

Tot Expenses $ 8,92 864.936 882.235 899.879 917.877 936.234

NOI 967.928 1.005.615 1.044.606 1.084.943 1.126.670

Tenant Improvements $ 0,21 20.000 20.000 20.000 20.000 20.000

Leasing Commissions 5% 107.670 110.900 114.227 117.654 121.184

Capital Reserve $ 0,20 19.400 19.400 19.400 19.400 19.400

Debt Service 460.802 460.802 460.802 460.802 460.802

Cash Flow before tax 360.056 394.513 430.177 467.087 505.284

Depreciation 248.718 248.718 248.718 248.718 248.718

Interest 287.852 280.806 273.473 265.841 257.898

Capital reserve 19.400 19.400 19.400 19.400 19.400

Taxable Income 450.758 495.491 541.815 589.784 639.454

Tax 0,35 157.765 173.422 189.635 206.424 223.809

AT CF 202.291 221.091 240.542 260.663 281.476

+Appendix: Sale

Cash from Sale

sale price 12.894.107

selling costs 644.705

mortgage balance 6.336.861

BTCF 5.912.541

net sale price 12.249.402

cost basis 9.700.000

accumulated dep 1.243.590

adjusted basis 8.456.410

capital gains 3.792.992

Price Appreciation 2.549.402

Depreciation 1.243.590

capital gains tax 693.308

ATCF from sale 5.219.233