2018 - Columbia GSAPP, MSRED - Capstone Deal Book by Kyle Beneventi

30 Front Luxury Condominiums Community-Centric Office Carefully Curated Retail

Ground-Up Development Opportunity in the DUMBO Neighborhood of Brooklyn Sponsored by Studio Alternative: Design & Development

30 Front Street

EXECUTIVE SUMMARY The investment opportunity enclosed is for a ground-up development in the DUMBO neighborhood of Brooklyn, converting a large parking lot at 30 Front Street (the Property) into a 40 story, 420,800 square foot mixed-use project providing boutique retail at street level, flexible and community centric office, and luxury condominiums. The development will also add one level below grade for parking and storage. The Property is owned by Watchtower Development, who is requesting $90m for the site.

Currently zoned R7-1, the site allows roughly 180,00sf as-of-right. We are seeking to receive a new zoning designation of R9 through the Uniform Land Use Review Process (ULURP). While this process does introduce risk, DUMBO has a history of re-zoning both at the neighborhood level and the individual site level, giving us confidence for acquiring approval. The rezoning is anticipated to add 15 months to the project timeline and is accounted for in the returns. Upon successful completion of the ULURP process, the new FAR would increase to 7.2 and a bonus 20% FAR for participating in the Inclusionary Housing Program. This higher density mixed-use designation allows us to fully optimize the site and maximize returns. The project would still be financially viable in an as-of-right scenario, with levered returns in just below 10%*. The project is anticipated to create levered returns above 30% IRR and a 2.0x equity multiple. We are seeking a Joint Venture Equity Partner to provide 90% of the initial equity investment, totaling $102,993,424.

LOCATION & STRATEGY DUMBO is the Western most “point” in the famed Brooklyn Tech Triangle, which has become a hub for software developers, creatives, and tech manufacturers, making Brooklyn the fastest growing tech community outside of Silicon Valley. Due to these factors, DUMBO is the 4th wealthiest neighborhood in all five boroughs. The Property is situated between the Brooklyn and Manhattan bridges, with unparalleled views of Manhattans Financial District.

PROPERTY HIGHLIGHTS

STRATEGY

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Deal Book

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Excellent location; directly across the East River from Lower Manhattan Walk Score of 98 and Transit Score of 100; accessible to all boroughs by Ferry, Subway, Bicycle Average Rents in DUMBO compare with desirable neighborhoods in Manhattan like Tribeca and Soho Median Income in DUMBO is greater than the New York average.

• • •

Seeking Up-Zoning via ULURP to R9 Give significant square footage of Community Facility, Child Care, and Street Repair ULURP timing works in our favor; putting product to market at the peak of the recovery period in the next cycle Affordable luxury condominiums priced proportionally to the area AMI • 65% of condo units below $2,500,000 Create a true sense of place in DUMBO

*All Return information is projected based on assumptions. Actual Return metrics are subject to change.

VISION & TIMING The substantial influx of top-tier and coveted companies who have located their headquarters in DUMBO has created a micro-climate of demand that defies the larger over-supply of luxury condos across New York City. The retail portion of the development is also supported by the influx of companies coming to DUMBO. These companies are filling over 3m sf of Class A office which will come online in the Tech Triangle over the next 5 years. The retail in our development will line the city-block-long site along Front Street, tying together two currently divided retail nodes in DUMBO.

PROJECT TIMING Analysis Start Date Closing PROJECTDate TIMING Acquisition Closing Analysis Start Date (Mo) ULURP /Date Preconstruction Closing ConstructionClosing Start /(Mo) Loan Closing (Mo) Acquisition Construction Period (Mo) ULURP / Preconstruction Construction End Start / Loan Closing (Mo) Pre-Sales Starts Construction Period (Mo) Sales Period Start Construction End (Mo) Sales Concludes Pre-Sales Starts Sales Period Start (Mo) Sales Concludes

1-Sep-2018 1-Jan-2019 5 1-Sep-2018 15 1-Jan-2019 20 5 24 15 44 20 20 24 30 44 50 20 30 50

Core Resi = 7,268 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Mech = 2,500 GSF Resi = 8,075 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Mech = 2,500 GSF Resi = 8,075 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Resi = 9,690 SSF Mech = 5,000 GSF Resi = 3,634 SSF Amen = 2,500 GSF Resi = 10,838 SSF Resi = 10,838 SSF Resi = 10,838 SSF Retail = 50,000 GSF

FINANCIAL SUMMARY*

$102,993,414

JV EQUITY REQUEST SOURCES Equity Sponsor Equity Limited Partner Equity Debt Acquisitions Loan (Taken Out By Const Loan) Construction Loan Total Sources USES Acquisition Costs Land Acquisition (Includes All Acquisition Costs) Development Costs Hard Costs (Includes Fees and Contingency) Soft Costs (Includes Marketing and Contingency) Financing Costs Carried Interest Recording Taxes Origination Fees Total Uses

$11,443,713

GP CONTRIBUTION

10% 90% Rate LTC 6.00% 50% 5.00% 65%

$11,443,713 $102,993,414 Total $68,455,458 $283,110,729 $397,547,855

$93,150,000 $237,533,980 $61,931,271 $31,338,033 $9,843,853 $1,757,831 $435,554,967

30.1% IRR

LAND AQCUISITION Asking Price Land Price ($/SF) Closing Costs Due Dilligence Costs Acquisition Fee Total Acquisition Costs DEVELOPMENT COSTS Construction Costs Hard Costs Soft Cost Total Project Costs (Unlevered) FINANCING COSTS Carried Interest Mortgage Recording Tax Loan Origination Fee Total Financing Costs Total Project Costs (Levered)

2.0x

Equity Mult $ 2.00% 0.50% 1.00%

5 yr Term

90,000,000 $323 $1,800,000 $450,000 $900,000 93,150,000

$ GSF $490.92 $128.00

Total $237,533,980 $61,931,271

$811.44

$392,615,251

Acquisition Construction $ 5,626,448 $ 25,711,585 2.80% $1,916,753 $7,927,100 0.50% $ 342,277 $ 1,415,554 $ 7,885,478 $ 35,054,239 $

435,554,967

Executive Summary || 3

Deal Book

30 Front Street

CONTENTS

EXECUTIVE SUMMARY WHY DUMBO Overview Neighborhood Amenities Leisure & Tourism Tech-Triangle

PROPERTY OVERVIEW Transit & Connectivity Zoning ULURP

MARKET OVERVIEW Demographics Demand Drivers Competitive Sets Target Market

DEVELOPMENT VISION Perfect Program Contextual Expression Condominiums, Inspired Office, Serving the Community Retail, Carefully Curated

FINANCIAL ANALYSIS Narrative & Cost Assumptions Revenue Assumptions Deal Level Returns & Sensitivities Annual Cash Flows Equity Waterfalls

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Deal Book

30 Front Street

WHY DUMBO OVERVIEW

DUMBO (Down Under the Manhattan Bridge Overpass) is one of New York City’s most desirable up-and-coming neighborhoods. Its proximity to the iconic Brooklyn Bridge, combined with unparalleled views of Manhattan over the East River, are drawing residents, employers, and tourists in groves, even beyond several of Manhattan’s more typical destinations. The area is full of trendy shops, restaurants, and bars serving the primary demographic of young professionals. DUMBO is a planned development with roots in industrial warehousing that was redeveloped in the 2000s by Two Trees Management after being purchased in the late 90s. Dumbo was listed on the National Register of Historic Places in 2000 and has since been through one rezoning to incentivize further growth.

NEIGHBORHOOD AMENITIES The map below shows a breakdown of site amenities in DUMBO. It is evident that the majority of offerings occur near the Manhattan Bridge, with an increasing number of destination retail coming South of the Brooklyn Bridge as Brooklyn Bridge Park reaches completion. Our site offers a unique opportunity to connect these two densities of retail and site amenities along Front Street.

DINING

RETAIL

CULTURE & LIFESTYLE

01 Brooklyn Bridge Wine Bar

01 West Elm

01 Barge Music

02 The Ice Cream Factory

02 DUMBO Market

02 The DUMBO Art Center

03 Grimaldi’s Pizza

03 Brooklyn Industries

03 The Rabbit Hole Project

04 Cecconni’s

04 Bo Concept

04 Theater At St. Anne’s

05 Atrium DUMBO

05 Rodd & Gunn

05 Equinox

06 Brooklyn Roasting Co.

06 Modern Anthology

06 Fulton Street Galleries

02 03 01

04 03 04 05 05 06 02 03

Why DUMBO || 7

30 Front Street

LEISURE & TOURISM The area has emerged as one of New York City's premier arts districts, with a cluster of exceptional art galleries such as the Klompching Gallery, St. Ann's Warehouse and the A.I.R. Gallery. Culinary businesses in the area include Grimaldi's, the Brooklyn Ice Cream Factory and The River Café, all clustered in Fulton Landing, which is also home to Barge Music, a floating venue for classical music. With the recent openings of the swanky members-only club Dumbo House and their first NYC Italian restaurant Cecconi’s. The area has become a center for New York City’s creative and arts industries, both for public art and for the concentration of arts facilities and galleries. The neighborhood is home to 16 Main Street Galleries, Art Wise, the Brooklyn Arts Council, and a collection of outdoor graffiti and public art from a variety of international artists. Internationally acclaimed artist, Anish Kapoor, recently added to DUMBO’s public art with his piece “Swirling Vortex,” just off the Fulton Landing Ferry stop. Along with the unique physical environment, DUMBO provides a unique environment to live, work, play, and relax.

TECH-TRIANGLE An integral component to the success, longevity, and identity of DUMBO has been its association with the technology industry. DUMBO is the northern point of the famed Brooklyn Tech Triangle, the other two points of which are Downtown Brooklyn and the Brooklyn Navy Yard. The triangle has become a hub for developers, creators, and tech manufacturers to learn and collaborate with each other, resulting in Brooklyn being one of the fastest growing tech communities outside of Silicon Valley. This triangle houses 25% of NYC based tech firms within a 20 block radius, with DUMBO claiming the highest concentration of technology firms by neighborhood n all of New York City. DUMBO is home to over 25 percent of New York City-based tech firms. Within a 10-block radius are 500 tech and creative firms that employ over 10,000 people. The workforce within this area is highly educated, with more than half of the working-age population holding a bachelor’s degree or greater. In 2015, the Triangle saw the number of tech employees each 17,300 and the number of firms reach 1,351. The Triangle’s economic impact in 2015 was $5.3 billion and it is forecasted to grow to $15.5 billion in 2025.

NEIGHBORHOOD

NGLE

mponent to the success, longevity, DUMBO has been its association with industry. DUMBO is the northern ed Brooklyn Tech Triangle, the other hich are Downtown Brooklyn and the Yard. The triangle has become a hub creators, and tech manufacturers llaborate with each other, resulting ng one of the fastest growing tech utside of Silicon Valley. Deal Book

ouses 25% of NYC based tech firms ck radius, with DUMBO claiming the tration of technology firms by neighborhood in all of New York City. DUMBO is home to over 25 York City-based tech firms. Within a 10-block radius are 500 tech and creative firms that employ ople. The workforce within this area is highly educated, with more than half of the working-age

Why DUMBO || 9

30 Front Street

MANHATTAN

DUMBO NEIGHBORHOOD 30 FRONT STREET

Deal Book

BROOKLYN

PROPERTY OVERVIEW OVERVIEW 30 Front Street is located at the western edge of Dumbo situated between Front and York streets. OVERVIEW OVERVIEW The 52,600 sf site at 30 Front street in the DUMBO neighborhood of Brooklyn is the last of a dozen

30 Front Street is located at the western edge of Dumbo situated sites owned byisthe Jehovah’s used their private parking lot. The area has a walk 30 Front 30 Front Street Street located is located atWitnesses, the at western the currently western edge edge ofasDumbo of Dumbo situated situated between Front and York streets. The 52,600 sf site at 30 Front street in scoreFront of 98Front and transit score of 100. between between anda York and York streets. streets. The 52,600 The 52,600 sf site sfat site 30at Front 30 Front street street in in the DUMBO neighborhood of Brooklyn is the last of a dozen sites owned the DUMBO the DUMBO neighborhood neighborhood of Brooklyn of Brooklyn is theislast the of last a dozen of a dozen sitessites owned owned by the Jahovah’s Witnesses, currently used as their private parking lot. by the by Jahovah’s the Witnesses, Witnesses, usedused as their asoftheir private parking parking lot. lot. The area has a Jahovah’s walk score of 98currently andcurrently a transit score 100.private

The area The area has ahas walk a walk score score of 98ofand 98 aand transit a transit score score of 100. of 100.

• Block Num. 45 • Lot Num. 25 • Lot Size: 52,600 sf Subway Access: Subway Subway Access: Access: • Current Zoning: R71 This site is remarkably accessible to all other New York boroughs via two subway lines that run through DUMBO. Community Board 2 through This site Thisissite remarkably is remarkably accessible accessible to allto other all other New New York York boroughs boroughs via two via• subway two subway lineslines that run that run through DUMBO DU

TRANSIT TRANSIT TRANSIT

Front St - Plan Front St - Afrom erial V iew The F Train can be accessed at 30 York Street Station, 10 minutes30walking the site, and runs through Manhattan’s The FThe Train F Train can be can accessed be accessed at York at York Street Street Station, Station, 10 minutes 10 minutes walking walking fromfrom the site, the and site,runs and runs through through Manhattan’ Manha Midtown core before return East into Queens, ending at 168th street. The A Train can be accessed at High Street TRANSIT &before CONNECTIVITY Midtown Midtown core core before return return East East into Queens, into Queens, ending ending at 168th at 168th street. street. The AThe Train A Train can be can accessed be accessed at High at High Stree Station, 10 minutes walking from the site, and runs West through FiDi and then North along 7th Avenue in SUBWAY ACCESS: Station, Station, 10 minutes 10 minutes walking walking fromfrom the site, the site, and runs and runs WestWest through through FiDi FiDi and then and then NorthNorth alongalong 7th Avenue 7th Aven i Manhattans West Side all the way into theStreet Bronx. The F Train can be accessed at York Station, 10 minutes walking from the site, and runs through Manhattans Manhattans WestWest Side Side all the allway the into way the intoBronx. the Bronx. Manhattan’s Midtown core before return East into Queens, ending at 168th street. The A Train can be Ferry Access: FerryFerry Access: Access: accessed at High Street Station, 10 minutes walking from the site, and runs West through the Financial A ferry station at(FiDi) Fulton Landing, 3 along minutes walking from site,West provides year-round service South to lower District North in Manhattans A ferry A ferry station station at and Fulton atthen Fulton Landing, Landing, 3 7th minutes 3Avenue minutes walking walking fromfrom site,Side. site, provides provides year-round year-round service service SouthSouth to lowe to Manhattan and North along the east river, linking to other Brooklyn neighborhoods; South Williamsburg, North FERRYand ACCESS: Manhattan Manhattan North and North alongalong the east the east river,river, linking linking to other to other Brooklyn Brooklyn neighborhoods; neighborhoods; SouthSouth Williamsburg, Williamsburg, Nort Williamsburg, Greenpoint, and Hunter’s Point South, before returning to Midtown Manhattan at 34th Street. The FultonGreenpoint, Landing Ferryand Station, minutes walking from site, provides year-round service South Williamsburg, Williamsburg, Greenpoint, Hunter’s and3Hunter’s Point Point South, South, before before returning returning to Midtown to Midtown Manhattan Manhattan at 34th at 34th Street. Stree

to lower Manhattan and North along the east river, linking to other Brooklyn neighborhoods; South

Pedestrian Access: Pedestrian Pedestrian Access: Access: Williamsburg, North Williamsburg, Greenpoint, and Hunter’s Point South, before returning to Midtown This This area This is uniquely exceptional for biking andbiking walking. can outcheck aout Citi-Bike a for rideafor along the alon Manhattan at 34th Street. area area is uniquely is uniquely exceptional exceptional for biking for and walking. and One walking. One check One can check can aout Citi-Bike a for Citi-Bike ride a ride along th waterfront via Brooklyn Bridge Park, or take a quick ride over the Brooklyn Bridge into financial district (FiDi) in waterfront waterfront via Brooklyn viaACCESS: Brooklyn Bridge Bridge Park,Park, or take or take a quick a quick ride over ride over the Brooklyn the Brooklyn Bridge Bridge into financial into financial district district (FiDi)(Fi PEDESTRIAN lowerlower Manhattan (10 minutes This area is exceptional for biking and walking. One can check out a Citi-Bike for a ride along the lower Manhattan Manhattan (10 minutes (10biking). minutes biking). biking). waterfront via Brooklyn Bridge Park, or take a quick ride over the Brooklyn Bridge into in lower

Vehicular Access: Vehicular Vehicular Access: Access: Manhattan (10 minutes biking).

WhileWhile most Newmost YorkNew residents and workers public transit over driving, car owners multiple While most New York York residents residents and workers and prefer workers prefer prefer public public transit transit over over driving, driving, car owners carhave owners have have multipl mu VEHICULAR ACCESS: pathspaths to Manhattan via the Brooklyn Bridge, Manhattan Bridge and the Brooklyn-Queens Expressway paths to Manhattan to Manhattan via residents the viaBrooklyn the and Brooklyn Bridge, Bridge, Manhattan Manhattan Bridge Bridge and the and Brooklyn-Queens the Brooklyn-Queens Express While most New York workers prefer public transit over driving, car owners have multiple Expressway paths to Manhattan via the Brooklyn Bridge, Manhattan Bridge and the Brooklyn-Queens Expressway.

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Site Analysis || 11

30 Front Street

ZONING & ULURP

AS OF RIGHT ZONING: R71

CONTEXTUAL UPZONING: M1-2/R8A

30 Front Street is currently zoned R71, which allows for a Floor to Area Ratio (FAR) of 3.44. An Inclusionary Housing bonus raises the FAR to 4.6 and Community Facility bonus raises the FAR to 6.0.

30 Front is an outlier with it’s R71 zoning. Every site to the North and to the East are zoned M1-2/R8A.

If the project includes both of these bonus programs, the maximum buildable Zoning Floor Area (ZFA) for this site is 315,600.

Deal Book

This ZFA may be distributed according to two Bulk Regulations; Quality Housing and Height Factor. For this site, Quality Housing offers the most ZFA.

The FAR allowed for an R8A is 6.02 Including both bonus programs increases the FAR to 7.20, yielding a maximum buildable ZFA of 378,720. The Quality Housing Bulk provides the best massing for this site at an R8A zoning designation, but the zoning requires the area to be distributed across large floor plates, which is

KEY ISSUES: • Max building height of 75’ • 55’ Brooklyn Bridge - Very Limited Views • Allowable Bulk Options Require Short

R71 BUILDING STATS: • 315,600 Max ZFA

R71 BUILDING STATS: • 378,720 Max ZFA

BOE ACHIEVABLE RETURNS: • IRR: 5% • EM: 1.20x

BOE ACHIEVABLE RETURNS: • IRR: 8% • EM: 1.35x

PROPOSED UP-ZONING: R9

PRECEDENT FOR APPROVAL

We are proposing to rezone the site to an R9. This zoning designation allows for a 7.52 FAR.

30 Front shares the same zoning designation as nearly all of Brooklyn Heights, just to the south of the Brooklyn Bridge. The zoning designation for 30 Front St. is an out-lier on the North side of the bridge; every lot surrounding 30 Front is zoned R8A / M1-2.

A 0.48 FAR bonus is granted for providing Inclusionary Housing, which yields a maximum 8.0 FAR. Most importantly, the R9 designation opens a new bulk regulation; Tower on a Base. The base must maintain the street wall between 65-80 feet tall. Above the Podium, the tower floor plate does not need to conform to a sky exposure plane.

As a neighborhood, the entirety of DUMBO was rezoned in 1999 and again in 2009. Additionally, there are two sites, marked below, that went through the ULURP process and were both approved for a R9D designation.

30 Front - Proposed R9 Lot Rezoning(s) - R9D Neighborhood Rezoning - 2009 Neighborhood Rezoning - 1999

KEY BENEFITS: • Permits Highest Buildable ZFA • Optimized Tower Floor Efficiency • Maximizes Residences with Views

KEY BENEFITS: PROJECT/COMMUNITY/CITY • R9 Yields Higher Number Affordable Units • Podium to Include Community Facility • Increased Tax Basis for the City

R71 BUILDING STATS: • 315,600 Max ZFA

•

BOE ACHIEVABLE RETURNS: • IRR: 30.1% • EM: 2.0x

The ULURP Process, combined with the projected 24 month construction period, will place our product on the market at the most ideal point of the next development cycle; in the middle to late stages of the recovery period.

Site Analysis || 13

Deal Book

RETAIL

OFFICE

CONDO

30 Front Street

MARKET ANALYSIS OVERVIEW RESIDENTIAL: DUMBO has historically been primarily a renters market. As seasoned employers establish their new company headquarters in DUMBO, the housing demand for their employees is shifting more to home ownership, resulting in a general shortage of condos in DUMBO. OFFICE: Brooklyn has seen a massive influx of office development and leasing activity over the past year, primarily due to substantial tax incentives for employers, as well as the prestige of the Tech-Triangle. The result is the relocation of top- tier employers to the area and higher average rents than greater Brooklyn. RETAIL: Combined with the above reasons, tourism and the perceived cache of DUMBO has generated a sharp increase in the success of retail.

DEMOGRAPHICS DUMBO and its surrounding neighborhoods is characterized by a highly educated population, a reflection of its concentration of professional and technology firms. A combined 56% of the population has obtained a bachelorâ&#x20AC;&#x2122;s degree or higher. This is compared to New York City average of 35%. This educated population may contribute to the higher than average household income within the area with 44% of households earning greater than $100,000 compared with 26%. To break this figure down further, 18% of neighborhood residents earn greater than $200,000 compared to 7% for New York City.

Generally, most residents of DUMBO rent. Renter occupied units make up 74% of total units. DUMBO is a market leader in rental rates with the highest average monthly rental rate of $3,224. This is a key statistic when considering building condos as there is a potential rental to sale conversion potential. The rental picture is juxtaposed with the fact that 40% of the condo units were purchased for greater than $1,000,000 with 37% being between a range of $500,000 - $999,999.

DEMAND DRIVERS INCENTIVES & TAX CREDITS: The Relocation and Employment Assistance Program (REAP) offers business income tax credits for relocating jobs from outside of New York City to Manhattan, south of 96th Street, or to one of the outer boroughs. Eligible tenants could qualify for an annual credit with an effective value equal to approximately $15 per RSF, an average of $3000 per employee. Qualified locations are revitalization areas and are zoned by the City as C4, C5, C6, M1, M2, or M3. CEP: The Commercial Expansion Program (CEP) is a property tax incentive program for new, renewal, and expansion leases for commercial offices and industrial spaces aimed at increasing tenant occupancy in a designated abatement zone. The program allows for tenant improvements (tied to costs and lease term) to be written off taxes at 100% of costs assuming the requirements are met with a phase out that steps down the rate of write off at the end of the lease. All of Brooklyn qualifies for this incentive program.

Market Analysis || 15

30 Front Street

CONDOMINIUM COMPARABLES At the close of 2017, Brooklyn new development condo sales jumped 38%, making up 9.1% of all borough sales and 31.4% of all condo sales. Brooklyn inventory decreased through the end of the year with a year-over-year decrease of 26%. This is the lowest inventory listing level since Q4 2013, at roughly 1,700 condos listed for sale. DUMBO is a market leader for Brooklyn condo price per square foot, with 51 Jay Street topping the 2017 market at $2,062/sf. There is a constrained inventory across the Brooklyn Heights, Cobble Hill, DUMBO, and Downtown market, at 148 units total.

Condo Comps

01 Pierhouse 02 1 John St.

03 04 05

• • •

03 51 Jay St. 04 200 Water St. 05 85 Jay St.

Unit sales price per square foot in DUMBO has now exceeded many comparable projects in Tribeca and Chelsea in Manhattan. The median sales price for the entire borough was $770,000; up 2.7% from the same quarter in the prior year, and third highest quarter on record. Accompanying the positive pricing trends, this past quarter marked the tenth consecutive quarter with annual decline in listing inventory, down 23% year-over-year.

Deal Book

SELECT COMPS - QUICK VIEW

Pierhouse. • Toll Brothers - City Living • Built 2017 • $1,940/sf Avg. Price

51 • • •

Jay St. Adam America / Slate Built 2018 $1,950/sf Avg. Price

1 John St • Alloy Development • Built 2016 • $1,875/sf Avg. Price

INTERIORS, FINISHES & VIEWS Nearly all of the DUMBO condo projects are conversions of old industrial buildings, offering an authentic character, but often lack large or full height windows and lack the height necessary to get competitive views over the surround context or over the many bridges that connect Brooklyn to Manhattan. The only true competition to 30 Front would be Extell’s proposed condo tower in Downtown Brooklyn (DoBro), which has achieved a similar up-zone, will have views at comparable heights, and because it is a ground up construction project can allocate square footage to provide an amenity package similar to luxury condo projects in Manhattan. However, 30 Front is highly more desirable than this project due to proximity to Manhattan, the synergistic support generated by a recent influx of other asset classes, and greater level of cache about the neighborhood.

51 Jay - Kitchen

138 Willoughby - Crown

200 Water - Master Bath

81 Washington - Living

AMENITIES & SERVICES The majority of the condo projects in DUMBO, and greater Brooklyn, lack Manhattan-level amenities. Typical amenities include gyms, workspace, mail rooms and storage. The exception to this rule is Extell’s new condo tower in Downtown Brooklyn, which is fully stocked with amenities, including a swimming pool. The below chart shows a comparison of what our project plans to offer, compared to this new project by Extell, 138 Willoughby. 30 FRONT OFFERING

COMPETITOR 138 WILLOUGHBY

• • • • • • • • • • • •

Port Cochere Lobby / Mail Room Stroller Room / Cold Storage Screening Room Kids Playroom Library / Workspace Private Dining Room Fitness/Yoga Room N/A Spa / Sauna Roof Deck / Outdoor Kitchen Dog Run / Washing Station

N/A Lobby / Mail Room Stroller Room N/A Kids Playroom Library / Workspace Private Dining Room Fitness/Yoga Room Swimming Pool Spa / Sauna Roof Deck / Outdoor Kitchen N/A

Market Analysis || 17

30 Front Street

OFFICE COMPARABLES The Brooklyn office market is competitive with new product in 2018. With 23 projects under way and a supply of 8.9 million square feet, Inventory rates are expected to spike in between around 2020, an almost 20% addition to the 48 million square feet in the larger Brooklyn market. Partially causing this book is the discount rents compared to Manhattan. Average asking rents in Brooklyn are discounted to Midtown rates (by 53.0%), to Midtown South (by 43.1%) and to Downtown (by 39.6%).

Office Comps 01 Panorama Brooklyn 02

02 53 Water Street

03 Empire Stores 04 DUMBO Heights 05 The Wheeler Building

Downtown Brooklyn

• • • •

DUMBO was the most active market in 2017 with 1.33 million sf leased, which accounted for 36% of all Brooklyn office leasing activity. The most notable transaction of 2017 being the buyout of Dumbo Heights, a 1.2 million square foot 5 building retail/office complex, by Kushner Companies, RFR Realty and LIVWRK in Q1 of 2017. Dumbo continues to have large leases signed with a notable transaction of 47,000 sf that completed a 300,000 sf office lease up at Empire Stores. Projects like Dumbo Heights, Panorama, and Empire Stores leverage the cache of Brooklyn to provide tenants with a product their employees want, a workspace near their home.

Deal Book

SELECT COMPS - QUICK VIEW

EMPIRES STORES: • Opened 2017 • 67,000 SF (Single Tenant) • $67/sf Rent (Single Tenant)

DUMBO HEIGHTS: • Opening 2019 • 80,000 SF • $63/sf Asking Rent

The Wheeler Building: • Opening 2020 • 35,000 SF • $65/sf Asking Rent

RETAIL COMPARABLES In the face of a questionable retail environment at the national level, Brooklyn retail has remained strong, benefiting from the new office and hotel projects completed in the last few years. The average asking rent in DUMBO on Front Street ranges from $75/sf to $150/sf, with an average at $125/sf. The net change in asking rents from 2016 to 2017 reflected a 13% increase. Retail leasing in the area saw a 17% increase in 2017 over 2016 in total volume.

Retail Comps 01 Poe Yoga 02

02 Legend Car Company 03 West Elm 04

04 Scotch & Soda 05 125 Front Street

There are four retail corridors in DUMBO; Front Street, Washington Street, Water Street, and Main Street. Compared to ten years ago, Brooklyn increased the number of retail corridors that generated rents above $100/sf and higher by a factor of 4. Our Project will complete the Front Street retail corridor, linking it to retail on the southern side of the Brooklyn Bridge and benefiting from this marriage of two currently separated retail corridors.

SELECT COMPS - QUICK VIEW

WEST ELM: • Opened 2017 • 15,000 SF • $150/sf Rent

SCOTCH & SODA: • Opened 2018 • 2,500 SF • $85/sf Rent

175 FRONT ST: • Vacant - New Construction • 1,500 SF • $125/sf Asking Rent

Market Analysis || 19

30 Front Street

MAJOR EMPLOYERS AND SALARIES EMPLOYERS RECENTLY RELOCATED OR RE-LEASED IN DUMBO & BROOKLYN: The Tech and Creative Industries have show strong historic growth in Brooklyn and is projected to continue. Coveted top-tier employers continue to relocate to DUMBO and establish their headquarters in the heart of the Tech-Triangle, taking advantage of itâ&#x20AC;&#x2122;s proximity to Manhattan, larger floor plates, and reduced rent.

WHAT THE DEMAND IS LOOKING FOR & CAN AFFORD: These companies are bringing with them hundreds of high-paying jobs, producing a micro-climate of demand for condominiums that defies the broader New York market over-saturation. Market research and discussions with seasoned developers in the area indicated that these young professionals are looking for slightly smaller, more efficient one and two bedrooms.

$160,000 Deal Book

Median Income (Individual)

$1,300,000

$1,500,000

Mortgage (Avg. Household Size)

Median Avg Home Price

TARGET MARKET YOUNG PROFESSIONALS Due to the massive influx of high-end, highly-desirable employers moving to DUMBO, there will be a proportionate increase of young professionals. These young professionals will be in-line with the current demographic in DUMBO; highly educated with salaries above the AMI. To illustrate this point; Bjarke Ingels, Starchitect and founder of BIG Architecture, recently moved his entire New York office to DUMBO and bought a $4.5M condo for himself.

THE PROJECT: BUYER PROFILE

GROWING FAMILIES As these young professionals grow and move to the area, they will require more space; trading in studios and one bedrooms FAMILIES 1-3 KIDS WHOa for two and three bedroom units.WITH Our Project will provide RESIDE UPPER SIDE/ carefully proportioned unit-mixIN to THE account for thisWEST future growth; maintaining relevance and capturing futureHEIGHTS, demand. MORNINGSIDE WHO WANT

A HIGH-END NEW PRODUCT WITH

In General, DUMBO has a staunch lack of “family-sized” apartments AMENITIES; FAMILIES LOOKING TO and condos.

RELOCATE FOR SCHOOLS, VALUE OR NEIGHBORHOOD.

THE PROJECT: BUYER PROFILE

INVESTORS & FOREIGN BUYERS Given the paramount location and the forecasted rise in demand for this product type, this Project will be attractive to investors; providing impressive risk-mitigated returns.

INVESTORS WHO While the Statue of Liberty and the Empire StateBELIEVE Building will always be New York Icons, in DUMBO risen at an IN tourism THE AREA ANDhas ARE impressive pace. TouristsLOOKING can find a truly authentic experience in FOR A LONG-TERM DUMBO and capture breathtaking views of Manhattan. For these INVESTMENT. reasons we believe our Project will be attractive to and foreign buyers looking for a New York home.

Market Analysis || 21

Deal Book

30 Front Street

DEVELOPMENT VISION PERFECT PROGRAM: AUTHENTIC PLACE-MAKING IN DUMBO 30 Front will be the crowning jewel of DUMBO, building on the last remaining large empty lot in DUMBO to provide affordable luxury condominiums to the fast-growing talent who are relocating to Brooklyn’s coveted Tech Triangle. Standing as a visibly iconic but contextual compliment to the Brooklyn Bridge and DUMBO character, 30 Front will be a true gateway to Manhattan and street level link between currently disconnected retail areas.

STRATEGIC RETAIL

COMMUNITY FACILITY & FLEXIBLE OFFICE

AFFORDABLE LUXURY CONDOMINIUMS

CONTEXTUAL EXPRESSION: A NEW BUILDING, AT HOME IN DUMBO 30 Front will be the crowning jewel of DUMBO, building on the last remaining large empty lot in DUMBO to provide luxury condominiums to the fast-growing tech-talent who are relocating to Brooklyn’s coveted Tech Triangle. Standing as a visibly iconic but contextual compliment to the Brooklyn Bridge and DUMBO character, 30 Front will be a true gateway to Manhattan and street level link between currently disconnected retail areas.

MANHATTAN BRIDGE

BROOKLYN BRIDGE

30 FRONT

Development Vision || 23

30 Front Street

CONDOMINIUMS, INSPIRED The homes at 30 Front will feature unparalleled views of the Manhattan Skyline over the Brooklyn Bridge. The condo tower portion has been rotated forty five degrees, both to optimize views from our own tower, and to maintain as many views as possible from the historic condo project, 70 Washington, directly behind us. The weighted average sales price per square foot will be $2,000 / sf, which is in line with market comparables. When this product comes to market, we believe that the achievable sellable price per square foot will be higher than underwriting.

Condominiums With Amenities and Terraces

•

COMPETITIVE AMENITIES

•

UNMATCHED VIEWS

•

$2000/sf AVG. PRICE

THE BUILDING

Deal Book

Floor # Bldg Height F-F Height Totals/Averages Roof PH 39 38 37 36 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 Ground Fl Cellar 1

514 502 490 478 466 454 442 430 418 406 394 382 370 358 346 334 322 310 298 286 274 262 250 238 226 214 202 190 178 166 154 142 130 118 106 94 82 70 55 40 25

12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 15.0 15.0 15.0 25.0 -

Comm Core Resi Core GSF 483,850

4,450 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 15,400 43,000 43,000 43,000 43,000 43,000

850 850 850 850

750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750

Egress

700 700 700 700

RESI SSF RRESI $/SF COMM SF CMNTY SF AMEN SF MECH SF 248,700 $ 2,044 122,600 40,700 22,500 23,850

3,700 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750

$2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500

7,750 7,750 7,750 7,750 7,750 7,750 7,750 7,750 7,750 7,750 7,750 2,750

$2,100 $2,100 $2,100 $2,100 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

8,750 8,750 8,750 8,750 8,750 8,750 8,750 8,750 8,750 8,750 8,750

$1,850 $1,850 $1,850 $1,850 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,600

PKG SF 29,300

2,500

8,750

5,000

40,000 40,000 28,900 13,700

10,800

40,700

8,750

3,850

6,700 29,300

THE VIEWS

views

high rise

mid rise

low rise

THE AMENITIES The amenities at 30 Front will be above the average overing that previously discussed comps have included in their projects. Most notably, 30 Front will offer the only Port Cochere in all of Dumbo, and one of the only vehicular drop-offs in all of Brooklyn. • • • • • • • • • • •

Port Cochere Lobby / Mail Room Stroller Room / Cold Storage Screening Room Kids Playroom Library / Workspace Private Dining Room Fitness/Yoga Room Spa / Sauna Roof Deck / Outdoor Kitchen Dog Run / Washing Station

Development Vision || 25

30 Front Street TYPICAL ONE BEDROOM

TYPICAL TWO BEDROOM

pantry

w/d ref/ frz

cl.

powder

w utility

kitchen 9'-10" x 17'-9"

foyer

5'-10" x 13'-4"

6'-6" x 12'-8" dw so/ wd

cl.

powder

ref

frz so/ wd

kitchen

15'-8" x 10'-4" dw

mech

lin.

master bath master bath

cl. wic

10'-1" x 5'-3"

living & dining

wic

14'-6" x 31'-2"

9'-8" x 5'-2"

bath 2 living & dining

cl.

master bedroom

14'-3" x 15'-2"

bedroom 2

13'-11" x 13'-6"

11'-6" x 12'-10"

central park

Typical Master Bath

Deal Book

15'-3" x 28'-10"

Typical Kitchen

PENTHOUSE DUPLEX

hudson river

cl. bedroom 3

master bath

bedroom 2

bath 3

14'-8" x 11'-8"

10'-4" x 16'-1"

cl.

linen steam

cl.

bath 2 trash

master bedroom

bath 4 mech

foyer

utility

bedroom 4

15'-7" x 30'-4"

wic

w elevator controller

private elevator

mech

cl.

15'-5" x 11'-4"

gallery cl.

so/ wd

ref

wet bar

study 26'-11" x 15'-9" dw

9'-9" x 12'-5"

kitchen

cl.

ref dw

powder

frz

cl.

powder

living 30'-4" x 22'-6"

service entrance fp

private vestibule

mech dining 21'-11" x 14'-8"

private elevator

mech

cl.

foyer 58'-7" x 7'-1"

terrace

central park

Terrace Levels & Penthouses

Typical Living / Dining Room

Development Vision || 27

30 Front Street

OFFICE, SERVING THE COMMUNITY Given the large supply of new office space that has recently or will soon enter the DUMBO and Brooklyn market, our project will not provide office in the traditional sense. The tenants we are targeting will be focused on community services, like full-service preschools with drop-off for parents who work in the area, or they will be organizations like Convene and PeerSpace, who find their own tenants and can cross use-groups. The roof deck will be used for events like business conventions, weddings and receptions, or simply for evening drinks, all culminating in a true sense of place at 30 Front. Office With Private, 25’ Tall Lobby

• 42,000sf FLOORPLATES • 30’ COLUMN SPANS • $65.00/sf ASKING RENT

Deal Book

CONCEPT FOR OFFICE INTERIORS

FULL SERVICE / DROP OFF CHILD CARE 30 Front will partner with KidPass to provide a full service pre-k education and activities. This tenant selection directly responds to the education and child care needs of Community Board 2 and has potential to serve greater Brooklyn, which is significantly lacking child care services.

OFFICE SERVING THE COMMUNITY Our office floor-plates will house community focused tenants with a focus on flexibility of use.

UNFORGETTABLE EVENT SPACE Partnering with Convene and PeerSpace, we plan to offer flexible meeting space on our top podium floor that can be transformed to events, receptions, and more. This roof deck can be reserved for outdoor weddings overlooking the Brooklyn Bridge and Manhattan beyond.

Development Vision || 29

30 Front Street

RETAIL, CAREFULLY CURATED The Retail at 30 Front will connect the currently active but segmented corridors on either side of the Brooklyn Bridge, creating synergy and benefiting from the crossflow. The retail will serve the growing population of office workers with a carefully curated collection of tenants which can each offer a unique and complimentary product. The underwritten asking rent $125/sf, which is in-line with current comps. When this product comes to market in the future, we anticipate rents will be above the current underwritten target. Retail Street Level and Below Grade

Deal Book

•

FACING FRONT STREET, ESTABLISHED RETAIL CORRIDOR •

$125.00/sf ASKING RENT

Restaurant w Patio ex: Lilia

Boutique Convenience: Boutique Coffee ex: Foxtrot ex: Little Collins

OFFICE LOBBY

RETAIL

2,000 SF

5,600 SF (+3,000 SF Below Grade)

RETAIL

Refined Clothing ex: Theory

RETAIL

7,500 SF (+3,500 SF Below Grade)

1,000 SF

RETAIL 15,000 SF (+6,000 SF Below Grade)

GARDEN/ DROP OFF 2,500 SF

RESIDENTIAL LOBBY 6,800 SF

RESIDENTIAL AMENITIES

Development Vision || 31

Deal Book

30 Front Street

UNFORGETTABLE EVENT SPACE

OFFICE FOR THE COMMUNITY

CAREFULLY CURATED RETAIL

Development Vision || 33

30 Front Street

NARRATIVE & COST ASSUMPTIONS

LAND ACQUISITION We have underwritten an acquisition price matching the current asking price by Watchtower. To our knowledge, no bids have yet been offered at the asking price. Closing costs and fees are included in the total acquisition costs.

DEVELOPMENT ASSUMPTIONS Hard cost assumptions were sized and underwritten based on information provided on several of the condo comparables mentioned in the market analysis, as well as conversations with active Brooklyn developer, Two-Trees NYC. Total hard costs were blended to consider steel construction at the podium, retail TIâ&#x20AC;&#x2122;s and office fitout, concrete construction for the tower, curtain wall enclosure, and interior finishes expected in luxury condos. Soft costs include attractive design and executive architect fees for a project of this size, full entitlement and insurance fees, phase one environmental, as well as a full branding and marketing package including a $2m sales gallery. We have budgeted 15 months and $1m of feeds for the ULURP process.

FINANCING ASSUMPTIONS Financing assumptions we made based off of information provided by Crittenden Reports. The acquisition loan assumed 50% LTC at a 6.00% interest rate, which will be taken out by the construction loan. Assumptions for the construction loan account for the anticipated rise in interest rates, underwriting LIBOR + 5.00%.

PROJECT TIMING

Deal Book

As with most condo projects, timing is crucial to achieving desired returns. For this reason we will begin predevelopment and initial marketing efforts as we seek ULURP approval, which is anticipated to take 15 months, allotting 3 months beyond the standard approval process as a conservative underwriting measure. Upon approval construction will commence and is anticipated to take 24 months. Pre-sales for condos and pre-leasing for the retail and office tenants will begin 6 months after construction starts. Upon total completion of the project and stabilization of podium level tenants, the commercial and retail components will be sold as a condo to an operator/asset manager.

FINANCIAL ANALYSIS LAND AQCUISITION Asking Price Land Price ($/SF) Closing Costs Due Dilligence Costs Acquisition Fee Total Acquisition Costs

$ 2.00% 0.50% 1.00%

DEVELOPMENT COSTS Construction Costs Hard Costs Soft Cost Total Project Costs (Unlevered) FINANCING COSTS Carried Interest Mortgage Recording Tax Loan Origination Fee Total Financing Costs

$ GSF $490.92 $128.00

Total $237,533,980 $61,931,271

$811.44

$392,615,251

Acquisition Construction 5,626,448 $ 25,711,585 2.80% $1,916,753 $7,927,100 0.50% $ 342,277 $ 1,415,554 $ 7,885,478 $ 35,054,239 $

Total Project Costs (Levered) LOAN DETAILS Refinancing (N/A) Acquisition Loan Acquisition Equity Total Construction Loan Construction Equity PROJECT TIMING Total Analysis Start Date Closing Date PROJECT TIMING Acquisition Closing Analysis Start Date (Mo) ULURP Preconstruction Closing /Date ConstructionClosing Start /(Mo) Loan Closing (Mo) Acquisition Construction Period (Mo) ULURP / Preconstruction Construction End Start / Loan Closing (Mo) Pre-Sales Starts Construction Period (Mo) Sales Period Start Construction End (Mo) Sales Concludes Pre-Sales Starts Sales Period Start (Mo) Sales Concludes

90,000,000 $323 $1,800,000 $450,000 $900,000 93,150,000

435,554,967

LTC 50.00% 50.00%

Rate 6.00%

Amount $68,455,458 $68,455,458 $136,910,916

65.00% 35.00%

L + 5.00%

$283,110,729 $152,444,239 $435,554,967

1-Sep-2018 1-Jan-2019 5 1-Sep-2018 15 1-Jan-2019 20 5 24 15 44 20 20 24 30 44 50 20 30 50

Financial Analysis || 35

30 Front Street

REVENUE ASSUMPTIONS CONDOMINIUM REVENUE Market rate average price per square foot was set based on a blended average of Sellout velocity assumed eight market rate units per months and two affordable units per month. 2017 Market reports indicated a similar rate of absorption for market rate units and affordable units are expected to sell out even faster, given the cityâ&#x20AC;&#x2122;s dire need for affordable housing.

DISPOSITION Condo Condo - Avg Market $/SF Market Units - Sales / Mo Market Units - Avg Sales Price Condo - Avg Affordable $/SF Affordable Units - Sales / Mo Affordable Units - Avg Sales Price Condo Sales Costs

$2,044 7 $1,947,222.22 $500.00 2 $476,436.78 5.00%

OFFICE & COMMUNITY FACILITY REVENUE The office rent of $60 per square foot is a Commercial - Office conservation assumption that was sized based Commercial - Office SF on new development that has come to market Commercial - Office Rent - $/SF over the previous two years, most of which Community Facility has been leasing up at an impressive rate. Community Facility SF Conversations with master leasing companies Community Facility Rent - $/SF like PeerSpace and Convene confirmed these assumptions. A number of stores only two blocks away leased at over $100 per square foot (see Office Comps section prior).

83,100 $50.00 40,700 $50.00

Community facility rents were set based on conversations with master lease companies like KidPass and from talks with education based organizations associated with Community Board 2.

RETAIL REVENUE

Deal Book

Retail rent assumptions were sized based on a blended average of leases signed in DUMBO over the last six months, information courtesy of CompStack. Inflation assumptions for the retail and office rents assumed a 2% growth over the total five year hold.

Retail Retail Cap Rate Retail Rent Income Start Month Retail Ground Floor Rent - $/SF Retail Ground Floor SF Retail Below Grade Rent - $/SF Retail Below Grade SF Retail Outdoor Rent - $/SF Retail Outdoor SF Retail Leasing Commissions (Gross) Retail Condo Sales Period (Mo) Retail Sales Costs

5.50% 44 $100.00 28,900 $50.00 13,700 $50.00 1,000 3.00% 50 4.00%

DEAL LEVEL RETURNS RETURN SUMMARY Project Level - UnLevered Returns Unlevered IRR Unlevered Equity Multiple Project Level - Levered Returns Unlevered IRR Unlevered Equity Multiple Partnership Level Returns IRR Equity Multiple Contributions Distributions Net Profit

27% 1.61 31% 2.02

GP 41.3% 67.8% 2.28 6.40 ($102,993,414) ($11,443,713) $234,444,122 $73,257,004 $131,450,708 $61,813,291

condo Sales Price / sf

IRR 30.6% 2200 2100 2044 1800 1600

Construction Interest Rate

IRR 30.6% L + 4.00% L + 4.50% L + 5.00% L + 5.50% L + 6.00%

ULURP Duration

SENSITIVITY ANALYSIS

IRR 30.6% 12.0 15.0 18.0 24.0

22 47% 44% 42% 33% 24%

Months to Sellout 26 30 39% 36% 35% 32% 33% 31% 25% 23% 17% 15%

36 31% 28% 27% 20% 13%

Construction Period Duration 18 21 24 27 37% 35% 32% 29% 37% 34% 31% 28% 36% 33% 31% 28% 36% 33% 30% 27% 35% 32% 29% 26%

Condo Sales Price / sf 2200 2100 2044 38% 34% 33% 36% 32% 31% 33% 31% 29% 30% 27% 26%

1800 24% 23% 21% 19%

42 26% 23% 21% 15% 8%

30 26% 25% 25% 24% 23%

1600 16% 15% 14% 12%

Financial Analysis || 37

30 Front Street

ANNUAL CASH FLOWS CONSTRUCTION PROFORMA - YEARLY

Year Date Ending

1 2019

2 2020

3 2021

4 2022

5 2023

0 0 0 0

35 8.7 43.5 19.5

84 21 104 47

7 2 9 4

INCOME Market Rate - Condos Sold Affordable - Condos Sold Cummulative Units Sold Cummulative Parking Sold Market Rate Condo Affordable Condo Retail Rent Retail Sale Parking Revenue

$386,251,000 $23,626,500 $2,280,226 $185,592,727 $29,848,406

TOTAL INCOME

$631,492,541

DEVELOPMENT COSTS % of Hard Cost % of Soft Cost

0.00% 0.00%

$ $ $ $ $

$ $ $ $ $ $0

0.00% 0.00%

$ $ $ $ $ $0

0.00% 0.00%

$ $ $ $ $ $0

0.00% 0.00%

373,375,967 22,838,950 1,626,215 28,846,513

$ 12,875,033 $ 787,550 $ 654,010 $ 185,592,727 $ 1,001,894

$429,464,547

$202,027,994

0.00% 0.00%

Acquisition Cost Hard Cost Soft Cost

$93,150,000.00 $237,533,980.00 $61,931,270.55

$93,150,000 $0 $9,909,003

$0 $42,416,782 $17,702,021

$0 $141,672,052 $21,675,945

$0 $53,445,146 $12,644,301

$0 $0 $0

TOTAL COST

$392,615,250.55

$103,059,003

$60,118,804

$163,347,997

$66,089,447

Unlevered Returns Unlevered Cash Flow Unlevered Equity Multiple Unlevered IRR

$238,877,290.61 1.61 27.16%

($103,059,003)

$363,375,101

$202,027,994

($60,118,804) ($163,347,997)

LEVERED CASH FLOW Debt Costs (On Top Of Project Costs) Interest Rate Interest Accrued Cost $31,338,033 Acquisition Loan Fee $2,259,030 Construction Loan Fee $9,342,654 Total Cost $435,554,967

$2,764,120 $2,259,030 $9,342,654 $117,424,807

$9,924,930 $0 $0 $173,272,927

$13,300,010 $0 $0 $79,389,456

$0 $0 $0 $0

Cost Paid By Equity Equity Draw Cummulative Drawn Max Equity

$48,969,349 $65,467,777 $38,007,112 $345,961,661 $839,006,512 $1,797,301,058 $821,465,496 $1,241,409,399 $1,829,330,863

$0 $1,829,330,863 $1,829,330,863

$552,824,001 0 $68,455,458 $2,764,120 $2,259,030 $0

$994,532,379 $1,684,592,273 0 0 $0 $0 $2,862,328 $0 $0 $0 ($83,009,512) $0

$2,257,456,136 0 $0 $0 $0 $0

$0 0 $0 $0 $0 $0

$297,664,783 $25,711,585 $9,342,654

$0 $0 $9,342,654 $0 $633,386,233

$83,009,512 $135,265,815 $2,486,646 $9,924,930 $0 $0 $0 $0 $999,881,352 $1,829,783,018

$79,389,456 $13,300,010 $0 ($323,791,416) $2,026,354,186

$0 $0 $0 $0 $0

$155,256,887 2.02 30.64%

($48,969,349)

($65,467,777)

Cost Paid By Debt Beginning Balance Acquisition Loan AL - Loan Draw AL - Interest AL - Financing Cost AL - Paydown Construction Loan CL - Loan Draw CL - Interest CL - Financing Cost CL - Paydown Ending Balance

Deal Book

209 52 261 117

Levered Returns Levered Cash Flow Levered Equity Multiple Levered IRR

$152,444,239

$68,455,458 $5,626,448 $2,259,030

$5,348,973 $0 $0 $65,467,777

($38,007,112)

$105,673,132

$202,027,994

EQUITY WATERFALL WAFTERFALL ASSUMPTIONS LP - Preferred Return Tier 2 Tier 3

Hurdle 10.0% 15.0% Split

GP 10% 10% 10%

WATERFALL DISTRIBUTIONS - ANNUAL

CASHFLOW (LEVERED) Capital Contributions LP GP TIER 1 LP Beginning Balance Preferred Return Due to LP Capital Contributions Tier 1 Distributions Ending Balance LP Cashflow GP Capital Contributions Tier 1 Distributions GP Cashflow

GP Tier 2 Distributions Tier 2 Promote GP Cashflow Check

90% 72% 45%

GP Promote GP Promote (%) 0.0% 0.0% 18.0% 20.0% 45.0% 50.0%

Year Date Ending IRR

LP IRR

GP IRR

1 2019

2 2020

28.9% % 90% 10%

(48,969,349)

(65,467,777)

(44,072,415) (4,896,935)

(58,920,999) (6,546,778)

Hurdle 10.0%

Check 10.0%

0 0 44,072,415 0 44,072,415 (44,072,415)

44,072,415 4,407,241 58,920,999 0 107,400,655 (58,920,999)

10.0%

(4,896,935) 0 (4,896,935)

(6,546,778) 0 (6,546,778)

(48,969,349) 0

GP IRR

(38,007,112) 105,673,132

202,027,994

107,400,655 152,347,122 10,740,066 15,234,712 0 0 34,206,401 (95,105,818) 152,347,122 72,476,016 (34,206,401) 95,105,818

72,476,016 7,247,602 0 (79,723,617) 0 79,723,617

(38,007,112) 105,673,132 0 0

88,581,797 113,446,197

Check 35.3%

0 0 44,072,415 0 0 44,072,415 (44,072,415)

44,072,415 6,610,862 58,920,999 0 0 109,604,276 (58,920,999)

109,604,276 16,440,641 0 34,206,401 0 160,251,318 34,206,401

160,251,318 24,037,698 0 (95,105,818) 0 89,183,198 95,105,818

89,183,198 13,377,480 0 (79,723,617) (22,837,060) 22,837,060 102,560,677

25.39%

0 0 (4,896,935)

0 0 (6,546,778)

0 0 10,567,313

3,171,814 5,709,265 17,739,259

0 0

31,718,139 81,728,058

0 0

45% 10% 45.0%

0 0 0

0 0

0 0 0

0 (3,800,711) (3,800,711)

0 0 (3,800,711) 0 0

0 0 0

Total Tier 3 Distributions LP Cashflow GP Cashflow Total Cashflow

5 2023

(65,467,777) 0

Total Tier 2 Distributions (+GP Promote) Cash Remaining After Distribution TIER 3 LP Distributions GP Distributions GP Promote Distributions

4 2022

0 8,858,180 8,858,180

Hurdle 15.0%

LP IRR

3 2021

0 10,567,313 10,567,313

Total Tier 1 Distributions Cash Remaining After Distribution TIER 2 LP Beginning Balance Tier 2 Hurdle Return to LP Capital Contributions Tier 1 Distributions Tier 2 Distributions Ending Balance LP Cashflow Check

36,777,626 8,172,806 36,777,626 81,728,058

LP IRR GP IRR IRR Check

41.3% 67.8% 45.4%

(44,072,415) (4,896,935) (48,969,349)

(58,920,999) (6,546,778) (65,467,777)

34,206,401 95,105,818 (3,800,711) 10,567,313 30,405,690 105,673,132

139,338,303 62,689,691 202,027,994

Financial Analysis || 39

30 Front

Luxury Condominiums Community-Centric Office Carefully Curated Retail

Sponsored by Studio Alternative: Design & Development