Beach City Capital Real Estate Investments

Investment Summary

Improving the quality of life and community –Investing in urban growth and value add opportunity

Investment Summary| Page 2

Beach City Capital Real Estate Investments

MALIBUMISSION STATEMENT

Improving the quality of life and community –

Investing in urban growth and value add opportunity

HISTORY

After a long collective career in Architecture, Urban Planning, Land Use,

Capital Markets and Real Estate Development, Beach City Capital was

formed and began investing in small coastal communities by acquiring old

apartment buildings and rebuilding them into luxury townhomes. After

successfully building their development platform by focusing on Joint Venture

Partnerships with Landowners to mitigate land cost and entitlement risk, BCC

now has $110,000,000 worth of investable assets under management.

Investment Summary| Page 3

Current Deal Flow

1

2

CATALINA

MAR VISTA

3

1

2

5

30-Units Ground-Up with Retail Reposition

• Extended escrow based on entitlement milestones

• Covered land play

MALIBU

5 MALIBU

3 FRANKLIN

28-Units For Sale Ground-Up

• Joint Venture with Land Owner

SFR Renovation + Lot Development

• Joint Venture with Land Owner

8-Unit Multifamily Reposition

• Off-market acquisition at significant discount

6

6 LOCAL COLLABORATIVE CO-WORKING

Flagship location for a co-working business venture

44 HERMOSA

2-Unit Townhomes

• All building permits secured, breaking ground in

mid-March

Investment Summary| Page 4

Project Summary

Investment Opportunity

• Total Offered: $9.60 MM

• Hold Period: 15 months - 10 years (varies by project)

Development

Value Add

LOCAL CO-WORKING FRANKLIN MALIBU CATALINA HERMOSA MAR VISTA TOTAL

ADDRESS 1221 Hermosa Ave, Hermosa

Beach411 W Franklin,

El Segundo42500 PCH,

Malibu100-132 N Catalina,

Redondo Beach945 15th Street,

Hermosa Beach12757-12767 Mitchell,

Los Angeles

TYPEFlagship location of co-

working business venture8-Unit Renovation

Single-Family Home Renovation + Lot

Development

30-Units Ground-Up with Retail Reposition

2-Unit Townhomes28-Unit For Sale

Ground-Up Condos70 Units

INVESTMENT $725,000 $350,000 $3,000,000 $2,453,268 $350,000 $2,726,813 $9.60 MM

NET PROFIT $375,000 $936,620 $1,300,000 $2,135,147 $65,625 $1,202,555 $6.01 MM

EM / IRR 1.5x / 13% 3.68x / 13.9% 1.43x / 29.8% 1.87x / 28.5% 1.19x / 15.0% 1.43x / 21.5%1.73x /

21.9%

TIME 3 Year Min, 5 Year Hold 5-10 Year Hold 36 Months 30 Months 15 Months 30 Months

RISK

MITIGATION

• Extreme lack of supply of and demand for co-working spaces in South Bay

• Purchased off-market at significant discount to comparablesaverage

• Extremely strong submarket

• Joint venture with land owner

• Low basis for scarce water-front

• Phased development allows for re-use of equity

• Creative escrow has allowed significant predev progress

• Covered land play to build or reposition existing

• All building permits secured, breaking ground in mid-February

• Joint venture with friendly land owner

• Low inventory and strong for sale price-point in Mar Vista

• Flexible reversion

Investment Summary| Page 5

Project Summary: Risk to Return

Investment Opportunity

• Total Offered: $9.60 MM

• Hold Period: 15 months - 10 years (varies by project)

13.0%13.9%

22.6%

28.5%

21.5%

13.0%13.9%

22.6%

28.5%

21.5%

0%

5%

10%

15%

20%

25%

30%

0 1 2 3 4 5 6

Beach City Capital Real Estate Investments

Development

Value Add

Development

Local Co-

Working

Franklin Malibu Catalina Hermosa Mar Vista

Investment Summary| Page 6

INVESTMENT STRATEGY

Industry

Relationships

Creative

Acquisition

Strategies

Broken

Marketing

Processes

DEAL

SOURCES

MARGIN OF

SAFETY

COMPETITIVE

ADVANTAGE

Investment Funnel

• Institutional quality systems/processes in an un-institutional market

• Creative acquisition strategy – de-risk projects through structuring joint ventures, seller carries, or accretive escrows

ASSETS UNDER

MANAGEMENT

Current: $110 MM (projected value)2022 Goal: $500 MM (value)

Off-Market

Opportunities

Recession Proof Coastal Ares

Mispriced Land

Target Asset

Attractive Land Basis

Creative Venture Structure

Multiple Exit Strategies

Competitive Advantage & Deal Sourcing

See Notes on next page

Investment Summary| Page 7

Beach City Capital Acquisition Strategy – How We Locate Deals

Creative acquisition strategies on middle-market real estate throughout Southern California with a focus in Los Angeles

• OPPORTUNITY: Generational opportunity to purchase middle-market real estate investments in Southern California due to the aging

demographics of life-time owners looking to sell, pass-on to their heirs, or achieve the highest and best use.

1. LAND OWNER JOINT VENTURE – Allows Partnership to secure a project with minimal equity with the possibility to refinance and pull

capital out for pre-development costs. Provides time to vet entitlement assumptions opportunity for JV land structure or land owner

reinvestment into deal.

• BCC Example: Structured tax efficient JV with land owner for 12757 – 12767 Mitchell Ave “Mar Vista” in Los Angeles. Identify

property on the market for over 100+ days for a high land basis. Initial offer was rejected but developed a relationship with

the broker and land owner. Over the course of 9 months, negotiated a JV of the existing land and purchase of the lot next

door. Currently in design phase.

2. SELLER CARRY WITH LAND OWNER – Allows Partnership to acquire projects with minimal equity. Provides time to vet entitlement

assumptions opportunity for JV land structure or land owner reinvestment into deal. Furthermore, provides for runway to raise and

structure favorable debt and equity (if needed) for construction.

• BCC Example: Structured a seller carry for our 945 15th Street “Hermosa II”, while negotiating party-wall agreements to

avoid shoring with neighbors for adjacent project. Through a post-dated PSA and option agreement, tied up the lot with a

minimal $20,000 down payment. Result enabled us to fully entitle the project, receive building permits, sign up GC, and

close construction loan with minimal equity required.

3. CREATIVE ESCROW STRUCTURES – Open long-term escrow with minimal down payment until entitlements and / or design is approved

to mitigate risk. Provides runway to raise favorable debt and equity terms for acquisition.

• BCC Example: Six month escrow for 100-132 N Catalina “Catalina” project to allow for the majority of entitlement / approval

risk to be mitigated.

Top 3 Acquisition Strategies

Investment Summary| Page 8

INVESTMENT STRATEGY

• PLAYA DEL REY 10 units in Playa Del Rey

• UCLA: JV with Owner 27 units in Westwood

• CARLTON: JV with Owner 47 units in West Hollywood

• 190th & FISK: JV with Owner 40 units in Redondo Beach

• HOLLYWOOD 40 units in Hollywood

2019 PROJECTED 164 units

53

1

2

3

4

*Note – Beach City Capital is currently in the process

of due diligence and in preliminary discussions with

the Owners. Deal pipeline subject to change.

2

4

Market and Land Use Review

Underwriting and Risk Mitigation

Offer

Open Escrow

Complete Due Diligence

Capitalization & Entitlement

Confirmation

Close

Fund

Develop/Reposition

Deal Filtering Process

100 Deals to Review

50

30

20

10

3

2

1

Stages of

DD

Future Project Pipeline

Deals at Stage 2 of Project Due Diligence

1

2

3

4

5

6

7

5

1

8

9

Project Overviews

Investment Summary| Page 10

INVESTMENT STRATEGYCatalina Overview

Exterior Rendering of Street-Facing Retail with Ground-Up Residential

Behind

Site Plan – Yellow Represents Ground-Up Residential and Dark Orange

Represents Renovated Retail

Catalina is a proposed mixed use development for the

renovation of 15,000 sf of street facing retail and the ground-up

development of 30 units behind over 1.2 acres in Redondo

Beach. Existing retail will be reduced, adaptively reused and re-

tenanted. The townhomes will be accessed by a common drive

behind the retail and will feature at-grade private car garages.

The entire site acquisition will be in August 2019. The timeline of

total equity needs is $8.85 MM by August 2019 and $3.4 MM in

March 2020 to start construction.

Return Summary

Project Level Returns

Project IRR 30.8%

Equity Multiple 1.83x

ROI (30 Months) 82.9%

Total Profit $10,167,869

Development Timeline 30 Months

Capital Structure

Senior Debt 70% $26,851,386

Equity 30% $12,226,340

Total Cost 100% $39,117,726

Equity Structure

JV Equity Partner 80% $9,813,072

Beach City Capital 20% $2,453,268

Total Equity Required 100% $12,266,340

30 Units Ground-Up with Retail Reposition

For the full Investment Memorandum please click HERE. * Current equity raise is $2.45 MM

Investment Deadline: 60 days

100 – 132 N CATALINA AVE, REDONDO BEACH 90277

Deal Size

Land $12,250,000

Hard Costs $15,861,102

Soft Costs $11,006,624

Total Cost $39,117,726

As Built Value $49,285,594

Investment Summary| Page 11

INVESTMENT STRATEGYMar Vista Overview

Sketch Rendering: 50% SD

Typical Floor Plan Parking Plan

Return Summary

Project Level Returns

Project IRR 27.4%

Equity Multiple 1.61x

ROI (28 Months) 60.8%

Total Profit $4,931,342

Margin 19%

Development Timeline 30 Months

Capital Structure – At Construction

Senior Debt 70% $17,789,245

Equity 30% $8,106,813

Total Cost 100% $25,896,058

Equity Structure

JV Land Partner 65% $5,380,000

JV Equity Partner 20% $1,510,791

Beach City Capital 15% $1,216,022

Total Equity Required 100% $8,106,813

Mar Vista is 28-unit for-sale condominium project located at

12757-12767 Mitchell Ave, Los Angeles. The existing site includes

three cash-flowing multifamily buildings across half an acre.

Debt was secured for the acquisition of the Property in

September 2018. $1.2 MM of equity will be necessary by March

2019 to complete pre-development and $1.7 MM will be

necessary in January 2020 activate construction of the Project.

28-Unit For Sale Ground-Up Condos

For the full Investment Memorandum please click HERE* Current equity raise is $1.2 MM

Investment Deadline: 60 Days

12757-12767 MITCHELL AVE, LOS ANGELES 90066

Deal Size

Land $8,300,000

Hard Costs $10,735,074

Soft Costs $6,860,983

Total Cost $25,896,058

As Built Value $30,827,400

Investment Summary| Page 12

Franklin is the reposition of an existing 8-unit multifamily

property in El Segundo, CA. This 5,504 sf building sits on a

6,435 sf foot lot and includes 8 units, comprised of (6) 1-

bedroom units / 1 bath, (1) 2 bedroom / 1 bath unit and

(1) 2 bedroom / 2 bath unit.

Construction for the renovation will begin in February 2019

and will take three months. The business plan is to stabilize

after the renovation, refinance the debt, and hold for 10

years.

Debt was secured for the acquisition of the Property in

November 2018. $735k of equity will be necessary byFebruary 2019 to complete the renovation.

INVESTMENT STRATEGYFranklin Overview

Building Exterior

Unit Floor Plans

Capital Structure

Senior Debt 66% $2,500,000

Equity 33% $1,264,296

Total Cost 100% $3,764,296

Deal Structure – 10-Year Distributions

Preferred Return to Investors 4% $505,719

Profit Split to Investors 75% $2,877,612

Profit Split to Sponsor 25% $959,204

Return Summary

Project Level Returns

Project IRR 14.3%

Equity Multiple 3.43x

ROI (10 year hold) 343.5%

Annual NOI $215,000

Development Timeline 10 year hold

8 Unit Multifamily Reposition

For the full Investment Memorandum please click HERE* Current equity raise is $350k

Investment Deadline: 60 Days

411 W FRANKLIN AVE, EL SEGUNDO 90245

Deal Size

Land $3,200,000

Hard Costs $305,769

Soft Costs $258,527

Total Cost $3,764,296

As Built Value (At sale after 10 year hold) $6,176,257

Investment Summary| Page 13

INVESTMENT STRATEGYMalibu Overview

Acquire existing single family residential and land totaling 1.3 acres

along PCH in Malibu for $7 MM up front through a JV land

partnership with Land Owner. With $3 MM of equity, the existing SFR

will be renovated and the land next door entitled. The renovated

home will be sold off for $12 MM to pay off the acquisition loan and

investors within a 12 month turnaround.

PHASE 1

PHASE 2

The Property

The Land

PACIFIC COAST HWY.

Aerial showing the Property, including the existing SFR to be renovated in

Phase 1, and the adjacent land which will be developed in Phase 2.

Existing SFR to be renovated in Phase 1

At the start of Phase 2, the land will be owned free and clear with

approved permits to build an additional SFR. After the construction

of the 10,000 SF SFR with a $5 MM construction loan, the home will

be sold for $15 MM.

PROFIT DISTRIBUTION

The first $6 MM will be distributed as follows: The first $2 MM to Beach

City Capital, the second $2 MM to the Land Owner, followed by the

next $1 MM to Beach City Capital, and the next $1 MM to the Land

Owner. Thereafter profit is split 50/50 parri passu. A total of at least

$4.5 MM in profit is anticipated to Beach City Capital.

Total investor return of principal will be a 10% preferred return

($300,000 over 12 months), and $1 MM at the sale of the project, for

a total of $1.3 MM. Of the initial $2 MM profit split to Beach City

Capital, Investors would receive $1 MM.

Phase 1

Debt 88% $7,000,000 Total Cost $8,000,000

Equity 13% $1,000,000 Sale $12,000,000

Total Cost 100% $8,000,000 Profit $4,000,000

Phase 2

Debt 71% $5,000,000 Total Cost $7,000,000

Equity 29% $2,000,000 Sale $15,000,000

Total Cost 100% $7,000,000 Profit $9,000,000

Single Family Home Renovation + Lot Development

* Current equity raise is $3.0 MM

Investment Deadline: 60 Days

42500 PACIFIC COAST HIGHWAY, MALIBUE 90265

Renovation Proposed SFR

Proposed SFR

Investment Summary| Page 14

INVESTMENT STRATEGYHermosa 02 Overview

Current site progress – closing construction loan

Hermosa 02 is a two-unit detached townhome project located just off of

PCH in Hermosa Beach at 945 15th St, directly adjacent to our current 4

townhomes under construction. We have contracted a sophisticated

General Contractor on a $1.9M stipulated sum contract. We are looking

for $350k of equity to close our construction loan. This investment will yield

a 15% annual preferred return.

The development will include two 3,200 SF ocean view townhomes, each

with two car garages, grand living spaces on the upper levels and a rooftop terrace. The Project will benefit from Hermosa’s accredited high

schools, beautiful beaches, and affluent demographic in the South Bay.

The Sponsor’s conservative underwriting yields levered return of 15.1% IRR,

an ROI of 34.9%. The total project profit is $453,933. The total cost of the

project is $4,850,000 and the total sales are projected $5,327,025. Market

comparables, within a quarter mile, average $870/SF and new 3,000 SF

homes have recently sold for greater than $2.7M. Our financial analysis is

assuming a highly conservative $825 psf.

Project Costs

Land Costs $1,862,319

Hard Costs $1,893,670

Soft Costs $1,094,011

Total Cost $4,850,000

As Built Value $5,087,309

Capital Structure

Senior Debt 75% $3, 340,000

Equity 25% $1,510,000

Total Cost 100% $4,850,000

Equity Structure

JV Equity Partner - LP 72% $800,000

Beach City Capital - GP 40% $710,000

Total Equity Required 100% $1, 510,000

Currently Under Construction by

Beach City Capital

Investment Project

Aerial Overview of Hermosa 01 and Hermosa 02

Two Unit Development

For the full Investment Memorandum please click HERE* Current equity raise is $350k

Due Date: 30 Days

945 15TH ST, HERMOSA BEACH 90254

Investment Summary| Page 15

INVESTMENT STRATEGYLocal Collaborative - Overview

Local Collaborative is a beach-centric co-working office space company

startup that aims to provide the highest possible quality of spaces in the

co-working industry. Beach City Capital is offering the opportunity to

invest up to $725,000 in this Project across Series A investments for an

investment in the first location of this business venture.

Series A investments will be provided a 10.0% debt note for a minimum of

three years, and be due within five years. After three years investors will

have the option to convert the note into equity shares in the company or

to exit at a 1.5x EM. A 5-year hold with an exit at 1.8x is also available.

Using extremely conservative assumptions, the project’s underwriting

shows a $125,000 NOI and a 25% IRR over a ten-year hold. Current market

analysis indicates a strong demand for co-working spaces in the South

Bay of Los Angeles, and a current lack of supply.

Flagship Location for a Co-working Business Venture

Capital Sources

Tenant Improvement Allowance $225,000

Series A $725,000

Total Cost $950,000

Project Costs

Hard Costs $623,250

Soft Costs $326,750

Total Costs $950,000

Investor Returns

3 Year Hold

Preferred Annual Return 10.0%

Equity Multiple at Buy-Out 1.5x

5 Year Hold

Preferred Annual Return 10.0%

Equity Multiple at Buy-Out 1.8x

Current site progress – closing construction loan

Location shows high demand for co-working with lack of supply

For the full Investment Memorandum please click HERE * Current equity raise is $725k

Investment Deadline: 90 Days

1221 HERMOSA AVE, HERMOSA BEACH 90254

Investment Summary| Page 16

Investment Snapshot

Returns to Equity Investors

As Investor in Class A/B/C (varies by project)

• Preferred return of principal

• Profit split share

INVESTMENT

MAR

VISTA$2,726,813

HERMOSA $350,000

CATALINA $2,453,268

MALIBU $3,000,000

FRANKLIN $350,000

LOCAL

CO-

WORKING$725,000

INVESTOR

PREF

INVESTOR

PROFIT SPLIT

INVESTOR

PREF/PROFIT

8% 25% $1,202,555

15% 0% $65,625

8% 20% $2,135,147

10% 10% $1,300,000

4% 75% $1,966,903

10% 0% $375,000

Returns as Investor

TOTALS $9,605,081 $6,014,947

Project Returns

EM IRR

1.43x 21.5%

1.19x 15.0%

1.87x 28.5%

1.43x 29.8%

3.68x 13.9%

1.50x 13.0%

1.73x 21.9%

Investment

AmountProceeds

$500k $715k

$500k $595k

$500k $935k

$500k $715k

$500k $1,840k

$500k $750k

$500k $863,013

Example

Va

lue

Ad

d

De

ve

lop

me

nt

Investment Summary| Page 17

Beach City Capital Team

SAM DUNBARDevelopment

Analyst

MARIA PEREZDevelopment

Coordinator

PETER LARRDevelopment

Associate

JASON MULLERManaging Principal

LINDSEY MILLSDevelopment

Associate

MATT STEWARTBoard Member

Capital Markets

GREG CULLENBoard Member

Business

SERENA SHLOMOFVP of Development

Beach City Capital is a Los Angeles based real

estate investment firm focused on the acquisition

and development of residential and commercial

properties, founded by 3 USC graduates and joined

by an incredible team of investors, advisors and

Partners.

The firm utilizes in-house associates who have a

deep background in Acquisition, Finance,

Entitlements and Development. Each project is

adequately supervised by our staff to mitigate

entitlement and development risk.

Our company mission is to improve the quality of life

and community one project at a time. We plan to

help enhance and enrich the urban fabric of the

city and in doing so, we design our projects to be

affordable, well-integrated, and make a positive

impact.

Board Members

BCC Team

MISSION STATEMENT

Improving the quality of life and community –

Investing in urban growth and value add opportunity

HISTORY

After a long collective career in Architecture,

Urban Planning, Land Use, Capital Markets and

Real Estate Development, Beach City Capital was

formed and began investing in small coastal

communities by acquiring old apartment buildings

and rebuilding them into luxury townhomes. After

successfully building their development platform

by focusing on Joint Venture Partnerships with

Landowners to mitigate land cost and entitlement

risk, BCC now has $110,000,000 worth of investable

assets under management.

Investment Summary| Page 18

Beach City Capital Team: Jason Muller

Jason Muller is a Managing Principal for Beach City Capital,

LLC and is actively involved in all aspects of Deal Creation,

Business, Bank and Partner Relations with a focus on

Executive Oversight on the Design, Development and

Construction of the company’s projects. He is an

accomplished and results-oriented development and

investment professional with over ten years experience in

land use, entitlements, architecture, development and real

estate investments with current fund management of $110M

of Investments.

Prior to Beach City Capital, Mr. Muller worked with Ensemble

Investments, LLC in Long Beach as a Development Associate

Managing over $100M worth of private investment projects.

Mr. Muller was traditionally trained as an Architect practicing

design for 5 years, then went into land use and entitlements

as a Project Manager for Southern California Land Use. He

managed over $120M in entitlements, building permits, pre-

development evaluations, and strategic planning for

commercial, industrial, and residential real estate

development. His experience in Real Estate Investments was

strengthened with a wide range of professional practice after

his Graduate Studies at USC and beyond.

Mr. Muller holds a Master in Architecture and a Graduate

Certificate in Real Estate Development from the University of

Southern California’s Price School of Public Policy.

Managing Principal

Projects Completed Prior to Beach City Capital

186-Key Hyatt Place at Paseo, Pasadena 185-Key Hyatt Place in Emeryville

86-Unit Mixed-Use Project in Santa Cruz Magnolia & Broadway

928 S Juanita, Redondo Beach – 3 units Hampton Inn – 100key PIP in LA

Projects Completed at Beach City Capital 2018

* 3 projects currently under construction: 2-Unit & 4-Unit in Hermosa Beach, 3-unit in West Hollywood

Investment Summary| Page 19