ARTHUR HILL REALTY SERVICES Schedule Of Rentals with no renewals of existing tenants and no new...

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ARTHUR HILL REALTY SERVICES Schedule Of Rentals with no renewals of existing tenants and no new leases In Inflated Dollars for the Fiscal Year Beginning 1/1/2008 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24 Area in sf of Term Jan-2008 Feb-2008 Mar-2008 Apr-2008 May-2008 Jun-2008 Jul-2008 Aug-2008 Sep-2008 Oct-2008 Nov-2008 Dec-2008 Jan-2009 Feb-2009 Mar-2009 Apr-2009 May-2009 Jun-2009 Jul-2009 Aug-2009 Sep-2009 Oct-2009 Nov-2009 Dec-2009 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Tenant Number 1 Tenant Number 2 2,593 29 4,106 4,106 4,105 4,106 4,105 4,214 4,214 4,213 4,214 4,214 4,213 4,213 4,214 4,214 4,213 4,214 4,214 4,213 4,214 4,213 4,214 4,214 4,213 4,214 3,532 57 6,475 6,475 6,475 6,476 6,475 6,475 6,476 6,475 6,475 6,476 6,475 6,476 6,475 6,475 6,475 6,476 6,475 6,475 6,476 6,475 6,475 6,770 6,770 6,770 Tenant Number 3 2,060 21 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 Tenant Number 4 Tenant Number 5 Tenant Number 6 2,861 30 4,768 4,768 4,769 4,768 4,768 5,007 5,007 5,007 5,007 5,007 5,007 5,006 5,007 5,007 5,007 5,006 5,007 5,245 5,245 5,245 5,245 5,245 5,245 5,246 3,947 675 31 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,413 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,413 6,414 6,414 6,414 6,414 37 1,238 1,237 1,238 1,237 1,238 1,237 1,238 1,237 1,238 1,237 1,238 1,237 1,294 1,294 1,294 1,293 1,294 1,294 1,294 1,293 1,294 1,294 1,294 1,293 Tenant Number 7 1,760 28 2,787 2,787 2,786 2,787 2,933 2,933 2,933 2,934 2,933 2,933 2,934 2,933 2,933 2,933 2,934 2,933 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 Tenant Number 8 350 28 153 153 154 153 153 154 153 153 154 153 153 154 153 153 154 153 153 154 153 153 154 153 153 154 Tenant Number 9 998 37 1,670 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 Tenant Number 10 449 37 751 751 752 751 751 752 751 784 784 784 784 784 784 784 784 784 784 784 784 817 Tenant Number 11 Tenant Number 12 7,167 6,457 Tenant Number 13 575 Tenant Number 14 Tenant Number 15 58 11,646 11,646 11,647 11,646 11,646 11,647 11,646 11,647 11,646 11,646 11,647 11,647 11,646 11,646 11,647 11,646 11,646 11,647 11,646 11,647 817 11,646 817 816 816 11,646 12,244 12,244 19 7,071 7,071 7,071 7,128 7,129 7,129 7,128 7,129 7,128 7,129 7,129 7,128 7,129 7,129 7,128 7,129 7,129 7,128 7,128 19 361 361 360 361 361 360 361 361 360 361 361 360 361 361 360 361 361 360 361 711 37.5 1,067 1,126 1,125 1,126 1,126 1,126 1,125 1,126 1,126 1,126 1,125 1,126 1,126 1,185 1,185 1,185 1,185 1,185 1,185 1,185 1,185 1,185 1,185 1,185 Tenant Number 16 4,726 653 43 7,089 7,089 7,089 7,089 7,089 7,089 7,089 7,089 7,286 7,286 7,286 7,286 7,286 7,286 7,286 7,286 7,286 7,286 7,286 7,483 7,483 7,482 46 1,170 1,170 1,170 1,170 1,170 1,170 1,170 1,197 1,197 1,197 1,197 1,198 1,197 1,197 1,197 1,197 1,197 1,197 1,198 1,224 1,224 1,225 1,224 1,225 Tenant Number 17 1,100 Tenant Number 18 Tenant Number 19 3,873 Tenant Number 20 Tenant Number 21 8,229 Tenant Number 22 6. 1,932 1,932 1,932 1,931 1,932 1,931 2,885 16 4,868 4,868 4,869 4,868 4,989 4,989 4,989 4,989 4,988 4,989 4,989 4,988 4,989 4,989 4,988 4,989 68 6,778 6,778 6,778 6,777 6,778 6,778 6,778 6,777 7,101 7,100 7,101 7,100 7,101 7,100 7,101 7,100 7,101 7,100 7,101 7,100 7,423 7,423 7,423 7,424 2,358 10 4,421 4,421 4,421 4,422 4,421 4,421 4,421 4,422 4,421 4,421 4,421 4,422 49 13,372 13,372 13,372 13,372 13,372 13,372 13,372 13,715 13,715 13,715 13,715 13,716 13,715 13,715 13,715 13,715 13,715 13,715 13,715 14,229 14,229 14,229 14,230 14,230 927 35 1,622 1,622 1,622 1,623 1,622 1,622 1,622 1,623 1,622 1,622 1,622 1,700 1,700 1,699 1,700 1,699 1,700 1,699 1,700 1,699 1,700 1,699 1,700 1,776 Tenant Number 23 4,420 30 7,735 7,735 7,735 7,735 7,735 8,103 8,103 8,103 8,104 8,103 8,103 8,104 8,103 8,103 8,103 8,104 8,103 8,472 8,472 8,472 8,472 8,472 8,471 8,471 Tenant Number 24 2,160 31 3,420 3,420 3,420 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,780 3,780 3,780 3,780 3,780 3,780 3,780 3,780 3,780 Page 3 9B09E012 THE LEASE RECONFIGURATION PLAN As Wilson stared at the forecasted rents (see Exhibit 1) for the next two years for the suites in Sunrise Atrium, he wondered how he could maximize cash flow from the property. He realized there were a number of requirements that he would have to incorporate in his plan. There should be at least 12 months of lease term remaining for tenants who were granted the holiday since this could be important to a buyer who would be put off by the prospect of having the highest rental rate tenants expire too soon after the sale. Wilson decided to limit the maximum number of months of rent holiday to six as a way to avoid too drastic a rent increase. He decided to fix the property sale date as January 2009, which gave him a 12-month window. The total value of the skipped payments from the holiday period would have to be allocated equally over the months in the post-holiday period. Presently the maximum annual rent per square foot being paid by any tenant in the building was $22.50. Considering that figure (as well as market information for rents in buildings of similar characteristics like age, utility, access and curb appeal), Wilson decided he did not want any tenant's rent to exceed $24 per square foot after the lease adjustment. Wilson was aware that negotiating the terms of the rent holiday with the tenant would require an investment in time and effort. Accordingly, he felt that choosing more than six tenants was not feasible. Wilson realized that, in order to estimate the sales value of the property, he would have to anticipate a market cap rate a year from the present date. A cap rate of seven per cent to eight per cent seemed appropriate for the situation. Finally, Wilson decided that the discount rate applied for the valuation should be nine per cent, which was the company's risk adjusted rate of return for its investors. With these assumptions in hand, Wilson began to feel optimistic about coming up with a lease reconfiguration plan that would add value for the investors. ARTHUR HILL REALTY SERVICES Schedule Of Rentals with no renewals of existing tenants and no new leases In Inflated Dollars for the Fiscal Year Beginning 1/1/2008 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24 Area in sf of Term Jan-2008 Feb-2008 Mar-2008 Apr-2008 May-2008 Jun-2008 Jul-2008 Aug-2008 Sep-2008 Oct-2008 Nov-2008 Dec-2008 Jan-2009 Feb-2009 Mar-2009 Apr-2009 May-2009 Jun-2009 Jul-2009 Aug-2009 Sep-2009 Oct-2009 Nov-2009 Dec-2009 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Tenant Number 1 Tenant Number 2 2,593 29 4,106 4,106 4,105 4,106 4,105 4,214 4,214 4,213 4,214 4,214 4,213 4,213 4,214 4,214 4,213 4,214 4,214 4,213 4,214 4,213 4,214 4,214 4,213 4,214 3,532 57 6,475 6,475 6,475 6,476 6,475 6,475 6,476 6,475 6,475 6,476 6,475 6,476 6,475 6,475 6,475 6,476 6,475 6,475 6,476 6,475 6,475 6,770 6,770 6,770 Tenant Number 3 2,060 21 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 3,347 3,348 Tenant Number 4 Tenant Number 5 Tenant Number 6 2,861 30 4,768 4,768 4,769 4,768 4,768 5,007 5,007 5,007 5,007 5,007 5,007 5,006 5,007 5,007 5,007 5,006 5,007 5,245 5,245 5,245 5,245 5,245 5,245 5,246 3,947 675 31 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,413 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,414 6,413 6,414 6,414 6,414 6,414 37 1,238 1,237 1,238 1,237 1,238 1,237 1,238 1,237 1,238 1,237 1,238 1,237 1,294 1,294 1,294 1,293 1,294 1,294 1,294 1,293 1,294 1,294 1,294 1,293 Tenant Number 7 1,760 28 2,787 2,787 2,786 2,787 2,933 2,933 2,933 2,934 2,933 2,933 2,934 2,933 2,933 2,933 2,934 2,933 3,080 3,080 3,080 3,080 3,080 3,080 3,080 3,080 Tenant Number 8 350 28 153 153 154 153 153 154 153 153 154 153 153 154 153 153 154 153 153 154 153 153 154 153 153 154 Tenant Number 9 998 37 1,670 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 1,758 1,758 1,759 Tenant Number 10 449 37 751 751 752 751 751 752 751 784 784 784 784 784 784 784 784 784 784 784 784 817 Tenant Number 11 Tenant Number 12 7,167 6,457 Tenant Number 13 575 Tenant Number 14 Tenant Number 15 58 11,646 11,646 11,647 11,646 11,646 11,647 11,646 11,647 11,646 11,646 11,647 11,647 11,646 11,646 11,647 11,646 11,646 11,647 11,646 11,647 817 11,646 817 816 816 11,646 12,244 12,244 19 7,071 7,071 7,071 7,128 7,129 7,129 7,128 7,129 7,128 7,129 7,129 7,128 7,129 7,129 7,128 7,129 7,129 7,128 7,128 19 361 361 360 361 361 360 361 361 360 361 361 360 361 361 360 361 361 360 361 711 37.5 1,067 1,126 1,125 1,126 1,126 1,126 1,125 1,126 1,126 1,126 1,125 1,126 1,126 1,185 1,185 1,185 1,185 1,185 1,185 1,185 1,185 1,185 1,185 1,185 Tenant Number 16 4,726 653 43 7,089 7,089 7,089 7,089 7,089 7,089 7,089 7,089 7,286 7,286 7,286 7,286 7,286 7,286 7,286 7,286 7,286 7,286 7,286 7,483 7,483 7,482 46 1,170 1,170 1,170 1,170 1,170 1,170 1,170 1,197 1,197 1,197 1,197 1,198 1,197 1,197 1,197 1,197 1,197 1,197 1,198 1,224 1,224 1,225 1,224 1,225 Tenant Number 17 1,100 Tenant Number 18 Tenant Number 19 3,873 Tenant Number 20 Tenant Number 21 8,229 Tenant Number 22 6. 1,932 1,932 1,932 1,931 1,932 1,931 2,885 16 4,868 4,868 4,869 4,868 4,989 4,989 4,989 4,989 4,988 4,989 4,989 4,988 4,989 4,989 4,988 4,989 68 6,778 6,778 6,778 6,777 6,778 6,778 6,778 6,777 7,101 7,100 7,101 7,100 7,101 7,100 7,101 7,100 7,101 7,100 7,101 7,100 7,423 7,423 7,423 7,424 2,358 10 4,421 4,421 4,421 4,422 4,421 4,421 4,421 4,422 4,421 4,421 4,421 4,422 49 13,372 13,372 13,372 13,372 13,372 13,372 13,372 13,715 13,715 13,715 13,715 13,716 13,715 13,715 13,715 13,715 13,715 13,715 13,715 14,229 14,229 14,229 14,230 14,230 927 35 1,622 1,622 1,622 1,623 1,622 1,622 1,622 1,623 1,622 1,622 1,622 1,700 1,700 1,699 1,700 1,699 1,700 1,699 1,700 1,699 1,700 1,699 1,700 1,776 Tenant Number 23 4,420 30 7,735 7,735 7,735 7,735 7,735 8,103 8,103 8,103 8,104 8,103 8,103 8,104 8,103 8,103 8,103 8,104 8,103 8,472 8,472 8,472 8,472 8,472 8,471 8,471 Tenant Number 24 2,160 31 3,420 3,420 3,420 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,780 3,780 3,780 3,780 3,780 3,780 3,780 3,780 3,780 Page 3 9B09E012 THE LEASE RECONFIGURATION PLAN As Wilson stared at the forecasted rents (see Exhibit 1) for the next two years for the suites in Sunrise Atrium, he wondered how he could maximize cash flow from the property. He realized there were a number of requirements that he would have to incorporate in his plan. There should be at least 12 months of lease term remaining for tenants who were granted the holiday since this could be important to a buyer who would be put off by the prospect of having the highest rental rate tenants expire too soon after the sale. Wilson decided to limit the maximum number of months of rent holiday to six as a way to avoid too drastic a rent increase. He decided to fix the property sale date as January 2009, which gave him a 12-month window. The total value of the skipped payments from the holiday period would have to be allocated equally over the months in the post-holiday period. Presently the maximum annual rent per square foot being paid by any tenant in the building was $22.50. Considering that figure (as well as market information for rents in buildings of similar characteristics like age, utility, access and curb appeal), Wilson decided he did not want any tenant's rent to exceed $24 per square foot after the lease adjustment. Wilson was aware that negotiating the terms of the rent holiday with the tenant would require an investment in time and effort. Accordingly, he felt that choosing more than six tenants was not feasible. Wilson realized that, in order to estimate the sales value of the property, he would have to anticipate a market cap rate a year from the present date. A cap rate of seven per cent to eight per cent seemed appropriate for the situation. Finally, Wilson decided that the discount rate applied for the valuation should be nine per cent, which was the company's risk adjusted rate of return for its investors. With these assumptions in hand, Wilson began to feel optimistic about coming up with a lease reconfiguration plan that would add value for the investors.