Distressed Asset Recovery Services

Asset Evaluation

Distressed Asset Recovery Services

Property & Asset Management Accounting & Financial Reporting Marketing, Leasing & Construction Asset & Loan Sales Receiverships & Workouts

Introduction Friedman Real Estate Group is a full service real estate organization with unique expertise in handling distressed commercial assets.

Since 1987, our professionals have assisted banks, servicers, insurance companies and other financial institutions in evaluating, securing, protecting, managing, repositioning and ultimately liquidating thousands of underperforming properties.

Our process for handling distressed real estate assignments is unique in the industry. Unlike our competitors, who typically provide assistance in only one area of the turnaround process, we provide a comprehensive array of services, including asset evaluation, property and asset management, accounting and financial reporting, marketing, leasing, asset and loan sales, construction, receivership and workouts all under one roof. This approach enables us to supply clients with a single point of contact on each assignment and to add value, enhance efficiency and elicit faster, more cost effective recoveries in all turnaround situations.

Timeline

1987 - Friedman Real Estate Group founded as a real estate brokerage company in Farmington Hills, Michigan.

1989 - Resolution Trust Corporation formed by U.S. government to liquidate assets of failed Savings & Loan (S&L) associations.

1990 - Friedman Real Estate Group establishes property management company to assist banks with REO assets taken back in wake of S&L crisis.

1990 - Birth of Commercial Mortgage Backed Securities (CMBS) industry.

1993 - Friedman Real Estate Group launches advisory services division to provide up front due diligence and opinions of value for CMBS buyers.

1996 - Surge in large retail bankruptcies including Handy Andy, Montgomery Ward and Builder’s Square.

1996 - Friedman Real Estate Group creates distressed asset recovery services division to provide insurance company lenders with receivership and crisis management services following wave of retail bankruptcies.

2001 - Recession and war result in real estate downturn and significant increase in commercial foreclosures.

2001 - Friedman Real Estate Group opens property management office in Columbus, Ohio to better assist servicers as CMBS foreclosures accelerate throughout the Midwest.

2004 - Friedman Real Estate Group opens property management office in Indianapolis, Indiana and Lexington, Kentucky.

2007 - Friedman Real Estate Group opens property management offices in Boca Raton, Florida and Tampa, Florida.

2007 - Friedman Real Estate Group forms strategic alliance with global real estate services firm Newmark Knight Frank to provide clients with platform to transact business globally.

2008 - Commercial real estate market sets up for a protracted downturn as credit evaporates, GDP and consumer spending decline and economy barrels toward recession.

2008 - Friedman Real Estate Group establishes loan sale division to assist lenders and servicers with pricing and sale of performing, subperforming and non-performing loans.

2009 – Friedman Real Estate Group plans to open property management offices in Chicago, Illinois and Memphis, Tennessee to meet clients’ expanding needs.

Commercial Brokerage One of the largest independent commercial real estate brokerage companies in the Midwest.

Over 65 licensed brokers and leasing agents throughout Michigan, Ohio, Indiana, Kentucky and Florida.

Specialty groups dedicated to office, retail, industrial, multifamily and condominiums.

Affiliation with global real estate services firm Newmark Knight Frank provides unrivaled expertise in representing tenants and owners across the country and throughout the world.

Core Proficiencies: •

Landlord and Tenant Representation

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Investment Sales and Acquisitions

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Site Selection

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Feasibility Studies

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Lease Restructuring

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Lease vs. Buy Analysis

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Expansion vs. Consolidation Analysis

Commercial Management One of the largest third party property managers in the Midwest with over 12 million square feet of commercial space under management.

Capabilities extend to all property types including office, retail and industrial.

In-house staff of lease administrators and paralegals who supervise leasing activities and process all expansions and renewals.

24-hour service department to handle all service requests and emergency maintenance calls.

Effective maintenance, capital improvement, cost containment and rent collection programs.

Bulk purchasing power that produces real savings for tenants and owners.

Core Proficiencies: •

Planning & Budgeting

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Asset Management

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Maintenance

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Lease Administration

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Accounting & Financial Reporting

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Energy Use & Evaluation

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Contract Management

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Performance Analysis

Multifamily Management Apartments and Townhomes One of the region’s leading managers of multifamily real estate.

Over 7,000 units managed throughout the Midwest and Southeast.

Expertise with conventional apartments, senior apartments and affordable housing (section 8 and section 42).

In-house marketing and training staff provides best and most up-to-date marketing and corporate training available.

Condominiums Experienced converter of apartment communities to for-sale condominiums.

Also skilled in reconverting for-sale condominiums to apartments.

Full-service sales team has sold more than $100 million worth of residential real estate during the past 5 years.

Knowledgeable in all aspects of condominium and HOA law and management.

Construction

One of the area’s leading full-service commercial real estate construction firms.

Experienced in all aspects of ground-up development and interior build-out.

Utilize value engineering techniques to reduce costs without sacrificing project requirements for quality and safety.

Recognized expert in the field of historic renovations.

Core Proficiencies: •

General Contracting

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Construction Management

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Interior Design & Build-Out

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Cost Estimating

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Build-To-Suits

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Ground-Up Construction

Space Planning & Design On-site staff of architects, space planners and design professionals.

Qualified to handle all aspects of the design and build-out process.

Fully equipped design center with hundreds of lighting, wallcovering, window treatment and flooring samples.

Services Provided: •

Design and Layout of Interior Suites

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Finish Board Production

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Photoshop Visualizations

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2D and 3D Modeling

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Hi-Res Renderings

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Preparation of Construction Documents

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Management of the Permitting Process

Accounting On site staff of 25 accounting professionals, many of whom have achieved the CPA designation.

Utilize the latest version of Intuit Real Estate Solutions (formerly known as MRI), which enables us to provide clients with a complete set of financial reports (cash or accrual) in a variety of different formats.

Ability to download and convert data from other software solutions such as Yardi, AMSI and OneSite.

All reports available on a 24/7 basis via a secure on-line connection.

Depending on client requirements, reports may include:

Narrative Report & Summary

Income Statement

Variance Report

General Ledger

Check Register

Aged Delinquency

Rent Roll

Open Invoice Report

Bank Reconciliation

Balance Sheet

Other reports or custom items available as required

Marketing In-house marketing staff creates customized marketing campaigns and promotional materials for all management, lease and sale assignments.

Staff comprised of veteran real estate copywriters, photographers and graphic designers.

Experienced with all product types including office, retail, industrial, multifamily and condominiums.

Services Provided: •

Marketing Campaigns and Strategies

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Logos and Branding

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Brochure and Collateral Design

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Website Development

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Media Strategy and Placement

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Email Marketing

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Interior and Exterior Signage

Information Technology In-house staff of qualified IT professionals who oversee technology infrastructure and initiatives at all corporate and off-site locations.

Primary Tasks: •

Assess corporate and off-site computer systems, telephone systems and office equipment needs to ensure functionality, compatibility and cost-effectiveness.

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Evaluate and implement most cost-effective communication systems between corporate and off-site locations.

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Utilize proprietary Leastor software and ShareFile technologies to enable clients to download and view leases and other property documents on a 24/7 basis via a secure on-line connection.

Loan Sales In-house staff of mortgage loan sale professionals who provide loan sale advisory services for individual, portfolio and structured loan transactions.

Experienced in all types of mortgage loan sales including performing, sub-performing and non-performing notes.

National reach and proven sales process consistently produces highest sales proceeds for clients.

Advisory Services

Friedman Real Estate Group provides many adjunct services that improve asset values and assist clients in better understanding their properties.

Market Research Preparation of reports and analyses detailing local economies and real estate markets.

Valuation Preparation of BOVs and discounted cashflow analyses for use in connection with asset and loan acquisitions, planned asset sales, workouts, foreclosures and strategy evaluations.

Real Estate Tax Advice and counsel regarding real estate tax assessments and appeals.

Risk Management Review of owners’ property and casualty policies to ensure proper coverage at most competitive price and monitoring of tenant and contractor liability, automotive and worker’s comp policies to maintain compliance with landlord requirements.

Energy Management Specialized programs to reduce utility costs, improve operating efficiencies and meet benchmarks established for “green” buildings.

Portfolio & Operations Planning Strategic counsel to assist clients in defining their real estate facilities and operations strategy to support the development of best practices, short and long term business strategies and ongoing operating requirements.

Disaster Recovery Planning Development of processes, policies and procedures to ensure the continuation of critical operations following catastrophic events.

Economic Incentives Assistance in obtaining federal and state tax incentives to reduce acquisition, development, operating and job training costs associated with real estate projects.

Distressed Asset Recovery Services Skilled team of turnaround specialists who provide broad range of services to lenders and servicers involved with financially troubled real estate.

Team members consist of accountants, attorneys, property managers, construction and brokerage professionals with hundreds of years of combined experience.

Provide all turnaround services – asset evaluation, property and asset management, accounting and financial reporting, marketing, leasing, asset and loan sales, construction, receivership and workouts – under one roof, which: •

Provides lender/servicer with single point of contact;

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Saves money by eliminating duplication of fees; and

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Ensures fastest, most profitable recovery.

Experience in many different state and local jurisdictions.

Step1

Evaluation Review rent roll and operating statements provided by lender/ servicer.

Conduct site visit to assess location, asset quality, physical condition and primary competition.

Gather intelligence to determine borrower agenda/motivation.

Prepare opinion of value.

Receivership Prepare proposal for lender/servicer detailing terms of engagement and associated fees.

Review receivership order prepared by lender’s/servicer’s counsel.

Assist lender/servicer and counsel in petitioning court for entry of receivership order.

Step3

Anatomy of a Distressed Asset Recovery Assignment

Step2

Offer strategic recommendation – workout, loan sale or foreclosure/deed-in-lieu.

Transition Take possession and control of property.

Assess staffing, marketing, operations and immediate life safety issues and make recommendations/changes as necessary.

Establish new bank accounts.

Ensure that proper insurance coverage is in place.

Populate accounting and property management software with tenant and operating data.

Review property accounts and records to determine true financial condition of property and to determine whether any misappropriation of funds has occurred.

Communicate frequently with lender and borrower (when appropriate) to establish common goals and objects.

Review tenant history, evict problem tenants and institute new tenant retention program.

Develop and implement marketing strategy to maximize occupancy and collections.

Evaluate capital needs and make improvements where necessary.

Assess “market window” and make recommendations to enhance curb appeal.

Review vendor contracts, line item expenses and utility usage/ costs for potential savings.

Review tax assessments and pursue appeals when warranted.

Prepare and disseminate property operating budget.

Provide lender/servicer with daily/weekly/monthly reports as necessary.

Step5

Reporting Reports may include balance sheet, aged delinquency, open invoice, tenant ledger, actual income and expense, budgeted income and expense and narrative describing variance to budget.

Provide reports to court as required under receivership order.

Devise optimal exit strategy taking into account asset quality, market cycle and lender’s/servicer’s business plan.

Disposition strategies may include loan sale, immediate or near term asset sale, or longer term asset sale preceded by retenanting, repositioning or renovation.

Secure court’s approval for sale, wind up the receivership and provide final accounting.

Step6

Resolution

Anatomy of a Distressed Asset Recovery Assignment

Evaluate existing office and maintenance staff and replace or re-train as necessary.

Step4

Action Plan

Regions Covered

Current Markets Expansion Markets

Client Roster BANKS

INSURANCE COMPANIES

SERVICERS

Penobscot and First National Buildings Detroit, Michigan 1.8M SF

Client:

LNR Partners, Goldman Sachs, Archon

Year:

2003

Assignment:

Receivership, property management, leasing, tax appeal and construction.

Outcome:

Completed façade and parking garage restoration, remediated fire damaged tenant suites, replaced HVAC system, renewed over 250,000 sf of expiring leases, improved occupancy, reduced building expenses by over $1.3 million and assisted in sale of buildings to outof-state investor.

Client:

Capmark Financial Group

Year:

2006

Assignment:

Receivership, property management, leasing, and sale.

Outcome:

Improved occupancy and aesthetics of a 1980’s vintage retail shopping center and executed quick sale that resulted in a price exceeding the property’s debt balance.

Shops at Sterling Ponds Sterling Heights, Michigan 145,000 SF

Alliance Portfolio Various locations throughout SE Michigan 5 Properties - 1,491 Units

Client:

CWCapital

Year:

2005

Assignment:

Receivership, property management, leasing and construction.

Outcome:

Completed numerous physical enhancements, stabilized occupancy and improved financial performance thereby enabling client to dispose of their entire portfolio in less than 12 months following takeover.

Client:

ING Clarion Partners

Year:

2007

Assignment:

Receivership, property management, leasing, tax appeal and sale.

Outcome:

Secured long-term, full building lease with a French automotive supplier and subsequently sold building to an out-of-state investor for a price that exceeded the debt balance.

150 Stephenson Highway Troy, Michigan 103,000 SF

Park Place Business Center Lexington, Kentucky 120,000 SF

Client:

PNC Bank

Year:

1997

Assignment:

Receivership, property management, leasing and sale.

Outcome:

Renewed and expand building’s only tenant (IBM) and sold building to an out-of-state investor for a price that exceeded the property’s debt balance.

Client:

Nationwide Real Estate Investments

Year:

2006

Assignment:

Receivership, property management, leasing and sale.

Outcome:

Completed significant interior and exterior renovations, improved occupancy from 60% to 85% and assisted in sale of buildings to out-of-state investor.

Parkstone Office Center Indianapolis, Indiana 200,000 SF

Airport Square Toledo, Ohio 102,000 SF

Client:

PNC Bank

Year:

1996

Assignment:

Receivership, property management, leasing, construction and sale.

Outcome:

Filled several existing vacancies, completed façade renovation, oversaw construction of shopping center addition that included Best Buy and Office Depot and sold finished project to Developers Diversified.

Client:

LNR Partners

Year:

2003

Assignment:

Receivership, property management, leasing and sale.

Outcome:

Sold foreclosed Super Kmart property to Swedish home goods purveyor Ikea USA in what was later deemed to be Michigan’s largest retail transaction for 2003.

Former Super Kmart Canton, Michigan 210,000 SF

Savannah Apartments Sarasota, Florida 282 Units

Client:

Fifth Third Bank

Year:

2008

Assignment:

Receivership, property management and leasing.

Outcome:

Currently oversee management and leasing for this 282-unit fractured condominium project.

Client:

JER Partners

Year:

2008

Assignment:

Receivership, property management and leasing.

Outcome:

Currently oversee management and leasing for this 192-unit underperforming apartment property.

Waterstone Place Apartments Indianapolis, Indiana 192 Units

Wellington Green Commons Wellington, Florida 115,000 SF

Client:

Schmier & Feurring

Year:

2008

Assignment:

Development, lease-up and property management.

Outcome:

Whole Foods-anchored shopping center located along the perimeter of the Wellington Green Mall enjoyed a successful open in mid-2008.

Client:

21st Century Florida, LLC

Year:

2007

Assignment:

Acquisition due diligence, property management, construction, leasing and sale.

Outcome:

Completed lease stabilization and interior/exterior renovation projects that resulted in sale producing over 50% gain for client.

The Excellence Apartments Tampa, Florida 165 Units

Crosswoods Office Park Columbus, Ohio 535,000 SF

Client:

Crosswoods Office Associates LLC

Year:

2001-2009

Assignment:

Acquisition due diligence, property management, construction, leasing and sale.

Outcome:

Currently oversee management and leasing for a portfolio of 5 office properties containing 535,000 square feet in Columbus, Ohio.

Client:

Northwestern Mutual Life

Year:

2004-2009

Assignment:

Property management leasing, tax appeal and construction.

Outcome:

Completed over $1.5M of life safety, faรงade and building improvements, improved occupancy, lowered tax and other operating expenses and assisting in sale of building to out-of-state investor.

LeVeque Tower Columbus, Ohio 365,000 SF

David Friedman

Stanley Finsilver

Mitchell Lipton

President & Chief Executive Officer

Executive Vice President Management & Construction

Executive Vice President Brokerage Services

Charles Delaney

Scott Shefman

Brian Bass

Chief Operating Officer

Chief Investment Officer

Vice President Management & Construction

Tracy Brown

Jim Parrinello

Barry Swatsenbarg

Vice President - Multi-Family

Vice President - Construction

Vice President - Investment Sales

FLORIDA

INDIANA

MICHIGAN

OHIO

7777 GLADES BOCA RATON, FL 33434 561.479.0200

9100 PURDUE ROAD INDIANAPOLIS, IN 46241 888.315.8818

34975 W. TWELVE MILE ROAD FARMINGTON HILLS, MI 48331 248.324.2000

150 E. CAMPUS VIEW COLUMBUS, OH 43235 614.224.2424

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