Meraki New Building by Jieli Luo

M E R A K I C O R P O R AT I O N

M ER A KI COR POR AT ION

1 78 48 S KY PA R K C IR S UIT E B , IRV INE

ME R A KIC OR P OR ATION.COM 9 49 . 2 88 . 2 54 6

Four separate divisions working as one. 2

M E R A K I C O R P O R AT I O N

â&#x20AC;&#x201C;Mario Franco

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TABLE OF CONTENTS

Executive Summary 1. 1 C OM PAN Y S U M M ARY

1. 2 OU R F OU N DE RS 1. 3 OU R V IS ION

1. 4 OU R P ORT F OL IO

Meraki Building 2. 1 IN T RODUC T ION

2. 2 S T RAT E GY 2. 3 PRO C E S S

Sub j e ct P ro pe r t y

3.1 PROPERTY SUMMARY

3.2 LOCATION

3.3 SURROUN DING DEMOGRAPHICS

Fi nanci al P ro j e c ti o n s

4. 1 P U RC HAS E AN D RE NOVATION C O STS

4. 2 N E T OPE RAT ING INC OM E A N D E X PE N S E S

4. 3 S U M M ARY F INANC IAL PROJ E C TION S 4. 4 IN V E S T M E N T OP T ION S

S UMMA RY

M E R A K I C O R P O R AT I O N

Executive Summary

M E R A K I C O R P O R AT I O N

Company Summary EXECUTIVE

SUMMARY

"Creating opportunities for businesses to define their visions and make dreams become reality.

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â&#x2013;śâ&#x2013;śâ&#x2013;ś TIMELINE

20 13 O F F I C E F U R N I T U R E R E TA I L E R

The Meraki Corporation embodies the definition of its name: to do something with soul, creativity, and love. It was founded with the goal of designing spaces that breathe life, innovate and inspire vision. Today, it has evolved into a full-service entity comprised of office furnishings, interior design, commercial real estate and construction, which together, create spaces that motivate our clients to live and work daily with meraki.

The beginnings of the company began in 2013, as an office furniture retailer and showroom providing quality, affordable products to small and mid-sized companies. It was during this period of selling unit furniture pieces that the founders realized space plans alone were not enough to help clients visualize the end result. Without the ability to envision the outcome prior to purchasing, clients ended up with mismatched furniture and discordant office finishes. The solution to this issue was to create a mirror of the final presentation so that clients could see exactly what they are buying from any angle, down to the square foot before installation.

20 17

20 18

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MERAKI INTERIOR DESIGNS

C O M M E RC I A L R E A L E S TAT E

MERAKI CONSTRUCTION

In 2017, the Meraki Corporation was officially established with the addition of its second arm: Meraki Interior Design. The interior design firm uses the most advanced tools to aid clients in selecting materials and finishes, creating specialized space plans and 3D renderings, and guiding customers in their visions for their work spaces. Meraki Interior Design employs the creativity and freedom of design to build work environments and cultures that stimulate, motivate, and appeal to the modern day workforce.

Still yet, there were needs that remained unaddressed. Clients were struggling with buildings and floor plans that were not ideal for their business operations. In 2018, Meraki Capital, a commercial real estate brokerage, was founded as the third division under the Meraki Corporation. This arm was developed in order to help clients locate commercial spaces that align with their business, financial, and operational objectives, and to equip them with the information and guidance necessary to negotiate favorable terms and make the best property selection. With the addition of the real estate division, the Meraki Corporation now encompassed more resources to aid clients through the journey of achieving their ideal commercial office: secure a desirable location, design the space, and provide office furniture.

To complete the final piece necessary to make our renderings come to life, the construction division of the Meraki Corporation was born. The in-house construction division allows direct communication between the designers and constructors, enhancing the opportunity for improved coordination, more efficient and constructible designs, conserve the economies of time and cost, and ultimately, permit a greater overall team approach. Clients now only have to communicate with one entity, rather than facing the burden of coordinating between the different industries separately.

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Our Founders EXECUTIVE

SUMMARY

Together, our founders bring about a wealth of knowledge and experience in design, product sourcing, finances, real estate, and construction management. The combined expertise drive Meraki Corporationâ&#x20AC;&#x2122;s success and continuously lead the company to reach new heights.

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Tavip Tobing PRESIDENT

Tavip holds a unique background in business management and international imports and exports, strengthened by a deep understanding of the global market and product sourcing and trade. He carries with him decades of experience managing and operating multiple businesses domestically and internationally, and stands out for his ability to lead project teams in processes that lead to valuable business outcomes.

Mario Franco CEO

With a never-ending drive and passion to dream and inspire, Mario embraces challenges and changes that create forward-thinking transformations in the design and real estate industry. Since he received his contractorâ&#x20AC;&#x2122;s license almost 20 years ago, Mario has continued to make his mark in the design, furniture, and real estate industries through the wealth of knowledge he has garnered from his construction background.

Rosemary Franco CFO

Passionate about residential and commercial real estate and its ability to allow clients to address challenges and realize opportunities, Rosemary is the real estate expert of the company. She successfully leads clients and the team of real estate agents to negotiate successful transactions for clients. Her expertise in the field stems from over a decade of experience, her knowledge of financial analysis, and an MBA education.

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Our Vision EXECUTIVE

SUMMARY

Through the process of working with clients in each of the 4 arms, we came to see unfulfilled needs within each of the divisions. Ultimately, as current markets and office trends evolve away from the traditional, companies are recognizing that in order to generate and maintain working momentum within the younger workforce, they must create workspaces that induce employees to be productive and comfortable in the working environment.

Prime examples of companies boasting success from such a model are Google, Facebook, and WeWork, where modern office aesthetics, open floor plans and complimentary beverages, snacks, and services engage the youngest and most brilliant of minds. These elements contribute to the creation of company cultures that motivate and stimulate its employees, allow collaboration and the exchange of ideas, and provide and encourage environments of innovation and productivity.

M E R A K I C O R P O R AT I O N

OFFICE FURNITURE

INTERIOR DESIGN

COMMERCIAL REAL ESTATE

CONSTRUCTION

M E R A K I C O R P O R AT I O N

"We aim to empower business owners to create company cultures that strengthen workplace collaboration, employee productivity and creativity.

M E R A K I C O R P O R AT I O N

20 20 THE FUTURE OF WORKPLACE

This is the new and the now. Companies are reaping the benefits of creating unique and enthralling environments where employees want to work. As we engage with our clients, however, we are realizing that although the future of working environments are moving toward the direction of establishing stimulating, engaging company cultures, most companies in the United States do not possess the means to invest such dollar amounts into their work environments. Small and medium businesses (SMBs), defined by the Affordable Care Act as companies with fewer than 50 employees, constitute the bulk of the business population in the United States. Over 96% of businesses are categorized as SMBs and of these, most of them are small SMBs, with less than 10 employees. When it comes to sales, however, 4% of large businesses, defined as companies with more than 50 employees, generate almost 80% of the total revenue. Simply put, SMBs do not have the financial means necessary to fund the designing, planning and construction components of a renovation, which can quickly add to hundreds of thousands of dollars. While there are co-working spaces, such as WeWork and Regus that exist to provide small offices, little else is available on the market to accommodate for the size and budget of SMBs. Larger companies possess the financial ability to fund renovation projects and micro companies have coworking offices at their disposal, but there is a shortage in the market for affordable, creative private office suites for small and mid-sized businesses.

M E R A K I C O R P O R AT I O N

In the words of Simon Sinek, â&#x20AC;&#x153;greatness starts with a clear vision of the future.â&#x20AC;? Meraki Interior Design sees and understands the future of companies in the United States. We envision providing innovative, engaging, creative and unique work environments to companies and businesses that do not possess the means to create

these spaces on their own. We aim to empower business owners to create company cultures that strengthen workplace collaboration, employee productivity and creativity. This vision is only the beginning of the greatness that will spread through the creation of Meraki Buildings.

Meraki Buildings, branded by the Meraki Corporation, are office buildings with private corporate suites that offer small and mid-sized businesses an affordable means to modernly renovated, fully-furnished office suites. Each unit has been designed with floor plans and amenities that appeal to the modern workforce, to strengthen brands and create company cultures of engaged and motivated employees. This is the power of perspective: to create true business and experience transformations through design.

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Our Portfolio EXECUTIVE

SUMMARY

"With the freedom and creativity of design, we help clients create environments that strengthen brands and build work cultures that drive passion and inspire innovation.

M E R A K I C O R P O R AT I O N

FONA I N T E R N AT I O N A L 1 7 7 7 9 M A I N S T R E E T, S T E E

FONA International, Inc is a company that creates and produces flavors for many of the largest food, beverage, and nutritional companies in the world. The established company, which boasts 31 years of history, was named by Fortune magazine as the #3 manufacturer in the nation in 2018.

In 2018, the Meraki Corporation became acquainted with FONA when the flavor company sought the services of Meraki Capital to search for its newest facility in its expansion to California. Through thoroughly understanding the vision and goals the company had for their first office in the west coast, within a few months, a contract was executed for a 1,675 SF industrial flex space in the city of Irvine at a base rent of $1.60/SF.

Due to the success with the real estate division, FONA employed Meraki to design and execute the vision for their new location. During the initial consultation, lead designer, Krasimir Velikov, inspired the FONA VP with his unique and creative design. He presented a concept rendering for a modern industrial office and lab that would create an invigorating, different, yet comfortable environment for their working technicians. This design had a clear difference from FONAâ&#x20AC;&#x2122;s other facilities, which invoked the characteristics of more traditional labs and offices: standard cupboards and storage spaces, low ceilings, and the lack of color.

M E R A K I C O R P O R AT I O N

LEGION BUILDING 3 1 3 N B I R C H S T, S A N TA A N N A

In 2018, the owner of the Legion Building, located at 313 N Birch St in Santa Ana, purchased the historical building for $2.45 M. The owner sought the services of the Meraki Corporation to partner in the design concept, marketing, and leasing services of the building. In its purchased state, the building was a traditional office with enclosed spaces, low ceilings, and built-in work cubicles. Tenant offers for the offices in their original condition came in at $1.35-$1.65/SF. The Meraki Design team identified the striking potential of the 15,742 SF building, and sought to retain its distinctive style and frame, while also creating an environment that could appeal to the millennial workforce. They recognized the importance of an appealing office that could engage the minds of a generation of workers seeking to find meaning, flexibility, and challenge in their day to day work.

The scope of renovations included creating private suites with a mix of private offices and open floor plans, exposed ceilings, glass walls, and a blend of modern materials and finishes to compliment the original brick walls of the historical building. The end result of a $1.1 M renovation investment: a building that strikes the balance between modern and traditional, provides the structure and professionalism of a traditional office, while also producing an environment that encourages open communication, energizes, and inspires productivity. When ownership recruited Meraki Capital to list the office suits, the agents were able to do so within 5

weeks of posting - prior to the completion of renovations. Through the use of 3D visualization and walkthrough renderings created by the Meraki media department, tenants were able to visualize the final outcome and make informed decisions based on high quality models. Lease commencements were coordinated to coincide with the completion of construction, saving time and costs for both tenant and landlord. The tenants entered into lease agreements for 3 year terms at $2.40/SF, resulting in ownership profits of $38,000/mo.

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BIXBY TERRACE 3 6 4 6 L O N G B E A C H B LV D

The Bixby Terrace, a 4,922 SF 2 story building located in the heart of Bixby Knoll, just minutes from Downtown Long Beach, was purchased by owner Lienette Chung in 2015. After years of struggling with maintaining tenant occupancy, she sought Meraki for real estate, design, and construction services for a fix-and-flip project of the property.

The building, which was built in 1948, will undergo exterior improvements, interior demolition, and reconstruction of walls into private office suites. The private suites will each consist of open floor plans, private offices, conference room, lounge area, huddle rooms, and kitchenettes. Tenants will enjoy the amenities of fully-furnished, turnkey suites with A Class building amenities such as complimentary snacks and beverages, a full-service reception desk and full-time secretary, and on-site parking. Suites will be leased for $3.90/SF.

In mid-2019, the project was marketed on a commercial real estate listing platform with high quality walkthrough renderings. The purpose was to gauge public interest and demand of the office suites and the palatability of the asking terms. Within a month and a half, we received numerous inquiries, with several of them requesting to lease the entire building. Many of the prospective tenants were law and tech firms who were seeking modernly designed, amenitized private office suites at a cost that could be affordable to their budgets.

M E R A K I C O R P O R AT I O N

SUBJECT PROPERTY PURCHASE AND R E N O VAT I O N C O S T S PURCHASE PRICE

$1,500,000.00

P ROJ E C T E D T O TA L

$2,132,636.52

R E N OVAT I O N ( E S T I M AT E D)

$632,636.52

N E T O P E R AT I N G I N C O M E AND EXPENSES OP E R AT I NG E X P E N S E S

OP E R AT I NG I NC OM E @ $ 3 . 9 0 / S F, 0 % VAC A N C Y

RETURN ON INVESTMENT

M O N T H LY $1,919.58

ANNUAL

$23,034.96

$19,195.80

$230,349.60

$17,276.22

$207,314.64

M E R A K I C O R P O R AT I O N

SUMMARY FINANCIAL PROJECTIONS INITIAL INVESTMENT

$2,132,636.52

ANNUAL CASH FLOW

$207,314.64 with 3% Annual Increase

FULL RETURN ON INVESTMENT

RETURN ON INVESTMENT

9 Ye a r s 9.72%

PROPERTY VA L U AT I O N DE S I R E D C A P R AT E UPON LISTING

PROJECTED VA L UAT I O N AT F U L L OCCUPANCY

$3,455,244.00

PROJECTED RETURN ON INVESTMENT

62.02%

MARGINAL PROFIT

$1,322,607.48

As a fix, lease, and flip project, the building will be listed at a desired capitalization (cap) rate of 6%, placing a valuation of $5,958.224.00 on the property at full occupancy. This will generate a marginal profit of $1,322,607.48, an ROI of 62.02%. The increase in property value results from the income generated by the tenancy and the design and construction improvements made to the building.

M E R A K I C O R P O R AT I O N

The Meraki Building

M E R A K I C O R P O R AT I O N

Building Introduction THE MERAKI BUILDING

"They will bring to the commercial real estate market work environments that generate cultures of innovation and productivity for small and midsized businesses.

M E R A K I C O R P O R AT I O N

Meraki Buildings, branded by the Meraki Corporation, are creative office buildings designed with clients, employees, and business cultures in mind. They will bring to the commercial real estate market work environments that generate cultures of innovation and productivity for small and mid-sized businesses. Each building will consist of private, turnkey corporate suites with the following amenities:

• Office Furniture with Customizable Finishes

Electric Desks Telephone Booths • Modern Renovations Natural Lighting Kitchenettes Private Conference Room Private Pffices Open Floor Plans • New HVAC and Plumbing Installation • Shared Lobby and Receptionist • Security Guard • Snacks and Beverages In return, the renovations will increase the value of the building, converting B or C class buildings into A class corporate offices.

M E R A K I C O R P O R AT I O N

Building Strategy

THE MERAKI BUILDING

"Meraki Buildings will provide the intimacy of operating within a personal space, while still allowing the benefit of collaboration in an open floor plan office.

M E R A K I C O R P O R AT I O N

TA R G E T MARKET

The target tenants for Meraki Buildings at small and mid-sized businesses, which in sheer numbers, dominate businesses in numbers. However, smaller companies have lower revenues, generating only 20% of total business revenues, despite claiming over 96% of the population.

For these smaller businesses, the costs of running the business can quickly add up, leaving little room to budget for office renovations and amenities. While co-working spaces may be an option for these small businesses seeking to operate in modern office spaces, current coworking offerings lack the privacy of a personal office suite. Meraki Buildings will provide the intimacy of operating within a personal space, while still allowing the benefit of collaboration in an open floor plan office.

M E R A K I C O R P O R AT I O N

LISTING AND MARKETING

Marketing introduces and communicates the purpose and value of the Meraki Building to the market. Meraki Interior Design has developed the media department to take advantage of the creative eyes of its personnel to successfully market real estate.

Our team members will utilize the latest tools available to create renderings of the commercial space. This will be an effective form of communication that will allow us to reveal the qualities of a space, permit clients to visualize the end product, and inspire further ideas through better spatial understanding. These components allow us to start the listing and marketing period prior to the completion of construction. The marketing process communicates the purpose and services of the Meraki Building to the commercial real estate market and potential clients. The Meraki Corporation expertise in marketing, networking, and creating digital content will allow us to

PRODUCT SOURCING

Our products and materials have been carefully selected based on years of product research sourcing and establishing close working relations with industry partners domestically and internationally. Meraki Interior Design utilizes reliable, cost-effective products to produce quality projects with efficient execution.

M E R A K I C O R P O R AT I O N

C O M P E T I TO R S

Current competitors on the market include other co-working spaces that offer businesses the opportunity to operate in modern, turnkey offices. Meraki Buildings offer the privacy that traditional offices allow, while still providing the modern aesthetic and premium amenities that coworking spaces provide. WeWork: Provides flexible shared workspaces in the form of private offices, dedicated desks, and hot desks and associated amenities to workers such as freelancers, entrepreneurs, and startup companies. Regus: Provides a network of office, co-working, and meeting spaces and amenities to allow clients to operate businesses without the need for set-up costs or capital investment.

Traditional Office: Fixed offices with permanent walls, unfurnished offices with or without tenant improvements

M E R A K I C O R P O R AT I O N

MERAKI BUILDING

WEWORK

REGUS

TRADITIONAL OFFICE

○ ○ ○ ○

○ ○/× ×

○ ○ ○ ○ ○

SNACKS & BEVERAGES

○ ○

○ ○ ○ ○ ○ × ×

× × × × × × ×

LEASE TERMS

36 TO 60 MONTHS

FLEXIBLE

36 TO 60 MONTHS

FLOOR PLAN LOBBY

P R I VAT E O F F I C E S PRI VATE C ONFER ENC E RO OM

P R I VAT E K I T C H E N E T T E

○ ○ ×

AMENITIES

FURNITURE

MODERN AESTHETIC PHONE BOOTHS

N EW H VAC & PLU M BI NG SHARED RECEPTIONIST

SECURITY GUARD L E A S E DE TA I L S

○ INCLUDED ○/- MAY BE INCLUDED AT ADDITIONAL COST

M E R A K I C O R P O R AT I O N

Building Process

THE MERAKI BUILDING

"Meraki Buildings will provide the intimacy of operating within a personal space, while still allowing the benefit of collaboration in an open floor plan office.

PROPERTY SELECTION AND PURCHASE C O N D I T I O N A N D LO C AT I O N

Subject properties for Meraki Buildings are selected based on 2 primary considerations: 1. C O N D I T I O N We target B or C class buildings with low tenancy that allow us the opportunity to renovate and re-design the vision of the building and purchase the building at a lower price point. 2 . L O C AT ION

Meraki Buildings will be strategically located in areas with positive growth trends and target demographics. The surrounding businesses, restaurants, ease of freeway access, job market, local tenancy and the areaâ&#x20AC;&#x2122;s safety will be researched thoroughly to guarantee that products and services of the Meraki Building will meet the needs of the local demographic.

M E R A K I C O R P O R AT I O N

THE R E N O VAT I O N 3 TO 6 M O N T H S

Renovation will include construction, MEP, architecture, design, landscape, and furniture installation The expected renovation period can be expected to take 3-6 months. Each building will be renovated as fully-furnished private office suites, designed to create inspirational and motivational company cultures. • Suites will hold a combination of private offices, conference rooms, kitchenettes, huddle rooms, and open floor plans, with each suite ranging from 1000 to 3000 SF • HVAC systems will be routed to allow optimal airflow

• Furniture will be provided with pieces that are integrated with the needs of the modern employee: height-adjustable tables, desks with built-in charging stations, telephone booths

M E R A K I C O R P O R AT I O N

• SCOPE OF WORK • Termite Inspection

• Exterior renovation • Interior demolition

• Reconstruction Walls | Windows | Flooring | HVAC, Plumbing, Electricals | Elevator Refurbish • Installation of Solar Panels

M E R A K I C O R P O R AT I O N

LEASING PROCESS

RETURN ON INVESTMENT

T I M I N G A N D TA RG E T

SELL OR HOLD

LEASING

• The leasing process will begin during the start of construction, marketed through the digital renderings and space plans. Leasing at this stage will allow tenants the opportunity to customize the office suite floor plan, and to allow the lease terms to begin as soon as the construction is completed. • Desired lease terms are a minimum of 3-5 years. As an investment strategy, targeted industries include law, accounting, and tech companies, which are known to remain stable during turbulent times.

RETURN ON INVESTMENT

• Return on investment will be collected through either selling or holding the building. • SELL When the suites are 100% leased, the building will be placed on the market for sale. The desired cap rate is 6%

• HOLD Returns will be collected through the rental income generated on a monthly basis. Asking rent will be $3.90/SF NNN. Landlord will be responsible for property maintenance, landscape, supplying complimentary snacks and beverages, and managing building personnel (lobby secretary, security guard, etc.)

M E R A K I C O R P O R AT I O N

Subject Property

M E R A K I C O R P O R AT I O N

Property Summary SUBJECT PROPERTY

AC LOT B U I LT

CLASS

1 9 4 0 E 1 7 T H S T, S A N TA A NA 9,912 0.4

1968 B

FLOORS

2 (Elevator Served)

ASKING

$2,200,000 ($221.95/SF)

PA R K I NG R AT IO

3.20:1000

M E R A K I C O R P O R AT I O N

Property Location SUBJECT PROPERTY

"Location was the most important consideration in our selection of the property. We understand that while our building condition may change, our location will not.

M E R A K I C O R P O R AT I O N

S M A L L- S C A L E

LARGE-SCALE

EASILY AC C ESSIBLE Âˇ

SMA LL A N D MID-SIZ ED BU SIN ESSES

The building is easily accessible, just 5 minutes from the I-5 and 55 freeways, and in close proximity to large shopping centers containing major retailers such as Staples, Michaels, and Albertsons, The area immediately north of the building is a residential area with elementary and middle schools in a 2 mile radius. The safety of the neighborhood was an important factor in our selection, and despite the high traction and population, Santa Ana is considered one of the safest cities when compared to similar sized populations.

The proximity to markets, warehouses, transport hubs, and freeways played important roles in the selection of 1940 E 17th St as a subject property for a Meraki Building. The building is located in the city of Santa Ana, bordering the city of Tustin, and located just 8 miles from Irvine. In 2019, Irvine was reported as the 3rd fastest growing city in California, growing at a rapid rate of 29% since 2010. Research shows that in order to accommodate larger populations, cities physically expand outwards as they experience rising densities. We can thus reasonably expect that as Irvine reaches capacity, the neighboring towns will come to experience the impact of its growth. The future job growth of Tustin is predicted to increase 32.3% over the next ten years, and Santa Ana is expected to grow by 31.7%. These trends indicate the fertility of the area for economic growth in the coming years.

M E R A K I C O R P O R AT I O N

Demographics Overview THE MERAKI BUILDING

VAC A N C Y R AT E

In the first quarter of 2019, the vacancy rate of Main Place Area and Orange County averaged at 13.1% and 9.9%, respectively. The rates are projected to maintain steadily until the first quarter of 2024. As it currently stands, the property records an 87% vacancy rate, which although high, is likely attributed to the buildingâ&#x20AC;&#x2122;s current condition. Once renovated, we are confident the leasing ability of the property will reach, if not exceed, the projections of the surrounding area at a vacancy rate of 10% or less..

M E R A K I C O R P O R AT I O N

S A N TA A NA P OP U L AT ION G ROW T H

TREND

Santa Anaâ&#x20AC;&#x2122;s population has been growing since the 1950s, and is estimated to soon surpass 334,000 residents. According to the most recent trends, it is expected to increase at a rate of 3% per year. It stands as the 57th largest city in the US by population and the 11th largest city in the state.

M E R A K I C O R P O R AT I O N

S A N TA A N A P O P U L ATION DEMOGRAPHICS

Santa Ana is a diverse city, with almost 46% of the population identifying as white, over 10% Asian, and over 78% of the population Hispanic or Latino. Santa Anaâ&#x20AC;&#x2122;s population is relatively young - the median age of its residents is 31 years old. The largest age group is the 25-44 group, which make up over 31% of the population. Over 30% are under the age of 18, and just 6.8% are over the age of 65. This makes Santa Ana a city full of potential for development and growth through the fostering of its young population.

M E R A K I C O R P O R AT I O N

FINANCIAL PROJECTIONS

M E R A K I C O R P O R AT I O N

SUBJECT PROPERTY PURCHASE AND R E N O VAT I O N C O S T S OFFERING PRICE

$1,900,000 ($191.67/SF)

P ROJ E C T E D T O TA L

$2,966,712.32

R E N OVAT I O N ( E S T I M AT E D)

$1,066,712.32

N E T O P E R AT I N G I N C O M E AND EXPENSES OP E R AT I NG E X P E N S E S

OP E R AT I NG I NC OM E @ $ 3 . 9 0 / S F, 0 % VAC A N C Y

N E T OP E R AT I NG I NC OM E

M O N T H LY

ANNUAL

$8,865.68

$106,388.16

$29,791.12

$357,493.44

$38,656.80

$463,881.60

M E R A K I C O R P O R AT I O N

SUMMARY FINANCIAL PROJECTIONS INITIAL INVESTMENT

$2,966,712.32

ANNUAL CASH FLOW

$357,493.44 with 3% Annual Increase

FULL RETURN ON INVESTMENT

RETURN ON INVESTMENT

BUILDING OPTIONS Upon the completion of renovations and full occupancy of the Meraki Building, two options are available for the investment opportunity. The building can subsequently be sold at the market capitalization (cap) rate, which can range from 5-8% for Class A and B buildings in the Orange County market. The second option is to hold the building as a long-term investment opportunity.

8 Ye a r s 12.05%

M E R A K I C O R P O R AT I O N

OPTION O1 SELL In the sell option, the building will be listed at a desired cap rate of 6%, which places a valuation of $5,958,224.00 on the property at full occupancy of office suites. This flip-and-sell method will generate a marginal profit of $2,991,511.68, a ROI of 100.84%.

Generated profit will be contributed toward the development of the next Meraki Building.

As an opportunity to maintain the building as a Meraki Building and to continue the management of the property, Meraki Interior Design will collect a 10% management fee from the new ownership.

DE S I R E D C A P R AT E UPON LISTING

PROJECTED VA L UAT I O N AT F U L L OCCUPANCY

$5,958,224.00

PROJECTED RET U R N O N I N V E S TMENT

100.84%

MARGINAL PROFIT

$2,991,511.68

M E R A K I C O R P O R AT I O N

OPTION O2 HOLD The second option is to hold the building as a long term property investment. The initial outlay of $2,966,712.32 can be recaptured by Year 8, after which all net operating income becomes pure profit. YEAR

ANNUAL CASH FLOW

RETURN ON INVESTMENT

RUNNING TOTAL

$368,218.24

12.41%

$725,711.68

01 03 04 05 06 07 08 09

$357,493.44 $379,264.79 $368,218.24 $390,642.73 $402,362.02 $426,865.86 $439,671.84 $452,861.99 $466,447.85

12.05%

$357,493.44

12.78%

$1,104,976.47

13.56%

$1,897,981.22

13.17% 13.97% 14.39% 14.82% 15.26% 15.72%

$1,495,619.21 $2,312,414.10 $2,739,279.96 $3,178,951.80 $3,631,813.80 $4,098,261.65

M E R A K I C O R P O R AT I O N

SUMMARY

M E R A K I C O R P O R AT I O N

The Summary SUMMARY

Small and mid-sized companies confront the obstacle of five major expenses in the development of a modern office:

• LEASE PAYMENT: INITIAL 1ST MONTH & DEPOSIT • ARCHITECTURALS • DESIGN • CONSTRUCTION • FURNISHING

Meraki Buildings provide the solutions by providing these fully-furnished, renovated private office suits so that clients do not have to invest into a leased space that ultimately, they do not own. In return for paying $1-2/SF higher per month, these businesses can experience the benefits of working in renovated office suites without having to pay related costs of construction, design, furnishing, and architecturals upfront. Meraki Buildings bring a cost-saving alternative to the commercial market for SMBs.

M E R A K I C O R P O R AT I O N

MONARCH CAPITAL REALTY

S A M P L E C O S T- S AV I N G S M O D E L 1000 SF 3 YEAR TERM

MERAKI BUILDING

TRADITIONAL BUILD-OUT

RENT

$162,000.00 (@$4.50/SF)

$86,400.00 (@$2.40/SF)

INTERIOR DESIGN

$2,000.00

ARCHITECTURALS

$8,000.00

CONSTRUCTION

$80,000.00

FURNITURE

$16,000.00

T O TA L

$162,200.00

$192,400.00

M E R A K I B U I L D I N G S AV I N G S $ 3 0 , 2 0 0 . 0 0

Meraki Interior Design is launching Meraki Buildings to fill the void in the current commercial market for affordable, modern private office suites for small and mid-sized business. These buildings will feature turnkey suites that will foster the establishment of company cultures that inspire everyday operations. Meraki Buildings will transform ordinary, traditional offices into spaces that promote personal fulfillment, growth, and community.

MERAKI INTERIOR DESIGNS