Green Pearl Events Multifamily Investment Summit Mike Kelly Presentation

1. Green Pearl Real Estate Conference
December 3, 2009
December 3, 2009 Confidential & Proprietary

2. Questions -
1. Identifying the bottom?
• Are we there yet?
• What are rent roll trends in different markets, quality of product
2. What kind of deals are getting done these days?
• Core – Who is selling, where, urban/suburban
• Development deals- Have we seen developers sell their projects or are deals
just being extended
• REO- How much is hitting the market and clearing?
• Do you see a Bar bell type of market in 2010/2011
3. Cap rate compression?
• Is this a trend or simply a lack of supply?
• Funds needing to deploy capital (commitment period), cheap debt, what
else is driving this compression?
• When & what drives cap rates to normalize?
4. Debt – What kind of deals are getting done?
Confidential & Proprietary Page 2

3. Detailed Multifamily Maturities
On average, $41 billion multifamily loans mature annually over the next nine years.
Multifamily Loan Maturities
$ billions By Investor Type (2009 to 2017)
$60
$53 $56
$5.4
$50 $47 $46
$7.7 $2.8
Average $41 Billion $40 $2.4
$8.1 $6.6
$40 $35 $34 $1.6
$4.5 $7.1
$30 $16.7 $24.5
$30 $26 $7.0 $2.1 $4.8
$4.5 $1.4 $22.0
$4.5 $0.6
$5.6 $20.2
$8.5 $1.5
$20 $22.6
$5.5 $11.1 $19.0
$0.4
$6.4 $5.3 $0.8 $25.5
$2.2 $21.6
$10
$4.4 $2.8 $0.6 $0.5 $15.8
$10.5 $13.3
$6.3 $7.1 $7.1 $8.1
$0
2009 2010 2011 2012 2013 2014 2015 2016 2017
CMBS, CDO or other ABS Commercial Banks/Thrifts
Fannie, Freddie, FHA and Ginnie Mae Credit Companies, Warehouse, and Other
Life Insurance Companies
Source: Mortgage Bankers Association (“MBA”)
The MBA Survey covered most multifamily loans outstanding from
the investor pool except for Commercial Banks/Thrifts. Per the
MBA , bank/thrifts participation was approximately 25% of the
total multifamily exposure.
Confidential & Proprietary Page 3

4. FDIC –Construction & Development Loans
Non-Current Construction PER FDIC: Non-Current Construction
and Development Loans *NON CURRENT LOAN RATES represent the and Development Loans
(% of Total) percentage of loans in each category that are past (Billions $)
due 90 days or more or that are in nonaccrual status.
14.99% 73.78
Non-
Total C&D Non-Current $72.06
14.00% Current 70.00
13.45% Report Loans C&D Billions
C&D
Date $Billions $
% 61.83
12.00% 60.00
1997 88.2 1.02% 0.90
10.91% 1998 106.7 0.85% 0.90 51.38
10.00% 1999 135.6 0.67% 0.90 50.00
2000 162.1 0.82% 1.32 45.17
8.71%
8.00% 2001 193.2 1.12% 2.16
40.00
7.32% 2002 244.9 1.07% 2.61 38.21
2003 272.2 0.73% 2.00
6.00% 6.09% 29.96
2004 336.8 0.48% 1.61 30.00
4.74% 2005 448.7 0.38% 1.72
20.72
4.00% 2006 564.9 0.79% 4.46 20.00
3.29% 3/31/2007 582.1 1.00% 5.82
6/30/2007 600.1 1.34% 8.02 11.48
2.00% 10.00
1.02% 1.12% 1.86% 9/30/2007 616.4 1.86% 11.48 4.46 8.02
12/31/2007 628.9 3.29% 20.72 2.61 5.82
0.90 1.32
0.00% 0.67% 0.38% 3/31/2008 631.8 4.74% 29.96 0.00 1.61
6/30/2008 627.2 6.09% 38.21
9/30/2008 617.1 7.32% 45.17
12/31/2008 590.2 8.71% 51.38
3/31/2009 566.9 10.91% 61.83
Non-Current C&D % 6/30/2009 535.8 13.45% 72.06 Non-Current C&D Billions $
9/30/2009 492.22 14.99% 73.78
Source: FDIC Quarterly Banking Profile (Sept 30, 2009)
Confidential & Proprietary Page 4

5. Construction Debt: Where do we go now?
There is currently $500 billion
construction debt on bank
books, of which $125 is for
multifamily constructions.
Deleveraging these will require
an additional equity of:
$36 billion for multifamily
$145 billion for other
asset types.
Confidential & Proprietary Page 5

6. Seriously delinquent loans - Greater than 90 days + foreclosure/reo
5.00%
4.85%
Trepp-multi
FYI : Trepp %
4.50% 4.45%
Sept 09 – 5.08% 4.37%
Fannie- single family Oct 09 - 5.66% 4.17%
Fannie single
4.00% 4.04%
Freddie single family
Nov 09 - 6.14% 3.94%
3.68%
3.50% Trepp CMBS -multifamily
3.42% 3.37%
3.33%
Fannie- multifamily 3.15% 3.13%
3.00% 2.96% 2.95%
Freddie -multifamily 2.90%
2.77% 2.78%
2.65% Freddie-Single
2.62%
2.50% 2.42% 2.44%
2.29%
2.20%
2.13% 2.13%
2.00% 1.98%
1.89% 1.88%
1.72% 1.72%
1.57% 1.52%
1.50% 1.43%
1.34%
1.32%
1.27%
1.22%
1.15%
1.10%
1.00%
0.50% 0.51% 0.56% 0.56%
0.50% 0.30% 0.32% 0.34% 0.36%
0.21% 0.25% 0.27%
0.16% 0.16%
0.08% 0.09% 0.10% 0.12% 0.11% 0.11% 0.10%
0.00%0.02% 0.01% 0.01% 0.01% 0.01% 0.03%
Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09
Source: Trepp
Confidential & Proprietary Page 6

7. Trepp multifamily monthly trends
Loan Balances Number of loans Delinquent
90 days,
Month Forclose/ non-perf
end Original Current Orig Current 30 days 60 days 90 days Non perf REO Total & REO
Aug-08 164,078,841,777 120,188,598,717 22,919 14,943 0.27 0.16 0.42 0.06 0.67 1.61 1.15
Sep-08 164,226,728,256 119,393,307,021 22,935 14,756 0.37 0.08 0.48 0.04 0.75 1.74 1.27
Oct-08 164,226,728,256 118,333,726,435 22,935 14,538 0.5 0.08 0.46 0.05 0.81 1.93 1.32
Nov-08 163,636,161,343 117,118,369,431 22,700 14,150 0.81 0.31 0.48 0.08 0.87 2.58 1.43
Dec-08 163,636,161,343 116,551,297,624 22,700 14,034 0.58 0.33 0.73 0.08 1.07 2.82 1.88
Jan-09 163,636,161,343 115,760,089,050 22,700 13,865 0.64 0.57 0.98 0.06 1.16 3.44 2.20
Feb-09 163,517,225,730 115,031,547,811 22,695 13,757 0.57 0.5 1.08 0.05 1.52 3.74 2.65
Mar-09 162,737,408,442 114,481,626,205 22,579 13,666 0.62 0.31 1.39 0.12 1.39 3.86 2.90
Apr-09 162,741,997,265 113,670,444,797 22,518 13,558 1.58 0.29 1.58 0.14 1.61 5.23 3.33
May-09 162,741,997,265 113,069,919,254 22,518 13,421 0.71 1.06 1.55 0.21 1.61 5.16 3.37
Jun-09 164,835,629,093 114,293,127,465 22,638 13,379 0.87 0.46 2 0.19 1.85 5.39 4.04
Jul-09 164,811,059,210 113,443,679,056 22,631 13,271 0.79 0.42 2.07 0.28 2.02 5.61 4.37
Aug-09 164,735,059,210 112,723,433,180 22,629 13,152 1.33 0.47 2.1 0.35 2.4 6.67 4.85
Sep-09 164,606,059,210 112,011,789,657 22,627 13,021 1.26 0.69 2.25 0.29 2.54 7.06 5.08
Oct-09 166,786,650,737 113,472,522,324 22,720 13,007 1.47 0.5 2.48 0.33 2.85 7.66 5.66
Nov-09 166,986,220,620 112,686,242,136 22,730 12,903 1.58 1.02 2.33 0.59 3.22 8.74 6.14
Source: Trepp
Confidential & Proprietary Page 7

8. Current Mortgage Holders – per Fed Reserve
Mortgage Amount as of Q2 2009 (in
Holders billions) Percentage Share
Fannie Mae $223 24.5%
Freddie Mac $89 9.8%
Comm. Banks $212 23.4%
Conduits $112 12.3%
Savings Instit. $66 7.3%
Life Co $51 5.6%
Ginnie Mae $38 4.2%
Others $117 12.9%
Total $907 100.0%
Comments
1. Fannie, Freddie & FHA are virtually the only lender in the market in 2009.
Thus, their share of the overall market will increase significantly going
forward.
2. Can the agencies continue to deploy dollars to make up for the lack of
CMBS and Life Insurance originations/
Confidential & Proprietary Page 8

9. Apartment Development Pipeline- Nov 2009
City Period 1 Period 2 Stub/overlap Period 3 Period 4 Last four years Period 5 Total
Tim e fram e reported Oct 06-sept 07 Oct 07-sept 08 Oct 08-sept 09 Oct 09-sept 10 Oct 10 -later
1 Atlanta X 8,426 4,878 0 7,846 6,389 27,539 0 27,539
Oct 06-sept 07 Oct 07-sept 08 Oct 08-sept 09 Oct 09-sept 10 Oct 10 -later
2 Dallas / Ft Worth X 7,231 10,439 14,515 16,557 48,742 1,019 49,761
Oct 06-sept 07 Oct 07-sept 08 Oct 08-sept 09 Oct 09-sept 10 Oct 10 -later
3 Houston X 7,339 11,158 0 17,132 9,407 45,036 0 45,036
Oct 06-sept 07 Oct 07-sept 08 July 2008-june 2009 July 2009-june 2010 T otal July 2010 - later
4 San Antonio X 4,907 5,670 (1,538) 4,479 5,028 18,546 376 18,922
Oct 06-sept 07 Oct 07-sept 08 July 2008-june 2009 July 2009-june 2010 July 2010 - later
5 South Florida X 1,596 1,710 (200) 2,334 3,810 9,250 0 9,250
Oct 06-sept 07 Oct 07-sept 08 July 2008-june 2009 July 2009-june 2010 T otal July 2010 - later
6 Charlotte X 2,017 3,502 (1,843) 3,491 4,460 11,627 276 11,903
Oct 06-sept 07 Oct 07-sept 08 July 2008-june 2009 July 2009-june 2010 T otal July 2010 - later
7 Raleigh X 2,012 3,468 (338) 3,055 3,079 11,276 0 11,276
Oct 06-sept 07 Oct 07-sept 08 July 2008-june 2009 July 2009-june 2010 T otal
8 Wash DC 4,819 6,334 (1,420) 7,308 7,802 24,843 1,371 26,214
Oct 06-sept 07 Oct 07-sept 08 July 2008-june 2009 July 2009-june 2010 T otal July 2010 - later
9 Tampa X 1,874 991 (84) 2,067 3,718 8,566 0 8,566
Oct 06-sept 07 Oct 07-sept 08 July 2008-june 2009 July 2009-june 2010 July 2010 - later
10 Denver X 859 2,537 (982) 4,372 3,950 10,736 1,572 12,308
Oct 06-sept 07 Oct 07-sept 08 July 2008-june 2009 July 2009-june 2010 July 2010 - later
11 Orlando X 2,407 1,623 (224) 5,217 1,742 10,765 0 10,765
Oct 06-sept 07 Oct 07-sept 08 Oct 08-sept 09 Oct 09-sept 10 Oct 10 -later
12 Austin X 4,672 3,441 11,209 4,532 23,854 0 23,854
Total 48,159 55,751 (6,629) 83,025 70,474 250,780 4,614 255,394
Source: MFP
Confidential & Proprietary Page 9

10. Multifamily Revenue and Growth Projections
Projected Rent and NOI Growth
10.0%
7.30% 7.50%
8.0%
6.0% 5.20%
2.70% 4.70%
4.0% 2.40%
3.20%
2.0% 0.60% 1.70%
1.80% -0.50%
0.0%
-1.10% -0.50% -3.30% 0.60%
-2.0% -0.90% -3.90%
-4.0% -3.60% -2.30%
-2.80%
-6.0% -7.80% -3.70%
-5.90%
-8.0% -8.20%
-10.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Rent Growth NOI Growth
(The current decline in Rent and NOI is expected to continue until 2012)
Source: PPR
Confidential & Proprietary Page 10

11. Multifamily Current Information
Items that drive value Data Source of data Bullish Case Bearish Case
Third quarter is typically the best
Increase in vacancy is
National rate up to 7.7% (5.9% leasing quarter of the year. PPR
Vacancy rates in 3q 2008)
Reis slowing. Only .2% from 2q
estimates 4q 2009 vacancy to be 9.0%
2009.
and 9.6% for 2010
Third quarter is typically the best
leasing quarter of the year.
Rent rolls continue to decline. Quarterly sequential decrease
Concessions are growing in most
Rental Rates 3q 2009 rental rates (-3.3%) vs. Reis is slowing. Only -.5% from
markets. Once the floor has been
3q 2008 2q 2009
reached its much more difficult to
raise rents than drop them.
The slowdown in new Less new construction means less
Development Starts have fallen dramatically
DB, MPF product will help the market construction jobs which typically are
pipeline in 2009
recover faster more transient an generally renters.
The recovery will be slow and a very
Recorded unemployment is The stimulus will create jobs
small amount of new jobs will be
Jobs 10.2%. Under employed is Fed, Bloomberg which will in turn create
created. People will continue to live
approximately 16% renters.
at home
Solid positive arbitrage for Rent rolls need to flatten and start
Agency rates are 210 bps +/- the first two years. rising quickly to offset the
Dus & Freddie
Interest rates over 10 year paper. 1-2 years
Mac lenders
Hopefully the recovery will amortization impact in year 3. Or
i/o take hold by the time the deals at current cap rates will have
interest only period ends effective negative amortization
Other risk
Confidential & Proprietary Page 11

12. Transaction Volume (2001- Q3 2009)
The number of transactions increased 230% from 2001-2007, but then dropped over 40% from 2007-2008.
During the same period, the dollar value of transactions dropped over 60%. October YTD 2009 vs. 2008 is
down 64% in number of transactions while the dollar value of transactions has dropped to 70%.
Apartment Transaction Volume through October 2009 Last 6 months of
transactions- 2009
$120 B 5,000 2007
total -
3,795
3,814 3,871 Garden Mid rise Total ref
Number of Transactions
$100 B
$99.6 4,000
Total $ Amount
$88.8 $91.7 May 31 37 68 298
$80 B
2,462 3,000 June 80 21 101 379
$60 B
$51.0 2,055 July 54 15 69 319
1,649
2,000
$40 B 1,251 $37.3 Aug 46 12 58 304
1,169 $30.3
$22.7
798
$20.4 1,000 Sept 61 17 78 412
$20 B
$12.4
Oct 62 15 77 562
$0 B 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 Total 334 117 451 2274
(Annualized)
Avg 56 20 75 379
Garden Mid/highrise Total Price Transactions
Source: Real Capital Analytics November 2009
Confidential & Proprietary Page 12

13. Caldera Asset Management
Caldera Asset Management is a turnaround and restructuring consulting working
exclusively with multifamily assets. We offer lenders, equity investors, developers and
lawyers the convenience and efficiency of one-stop shopping. We provide solutions that fit
their individual needs.
Caldera brings a wealth of experience that covers virtually all aspects of
apartments:
– Asset management
– Restructuring and recapitalization of portfolios as well as one-off assets
– Executive experience
• Public REITS
• Private REITS
• Pension fund advisors
• Entrepreneurial firms
– Experience in direct ownership of all classes of apartment assets (A,B and C)
– Financing
– Accounting
– Brokerage
– Portfolio acquisition / disposition
www.CalderaAssetManagement.com
Confidential & Proprietary Page 13