LAND OPTIONING & ASSEMBLY, PERMITTING, &

DEVLPT DESIGN

CONSTRUCTION

LANDPURCHASE“Time 0”

SHELL COMPLETION

“Time T1”

LEASE-UP & TENANT FINISHES

STABILIZED OPERATION

$

CUMULATIVE INVESTME NT

$

DEVLPMT COMPLETION

“Time T2”

Time

RISK

AS

INVERSE

SUCCESS

PROB

VERY HIGH RISKe.g.: 40%

OCC

HIGH RISKe.g.: 20%

OCC

MODERATE RISKe.g.: 10% OCC

LOW RISKe.g.: 8% OCC

Exhibit 29-1a: Development Project Phases: Typical Cumulative Capital Investment Profile and Investment Risk Regimes

= CUMULATIVE INVESTMENT

= RISK LEVEL

LAND OPTIONING & ASSEMBLY, PERMITTING, & DEVLPT DESIGN

CONSTRUCTION

LANDPURCHASE“Time 0”

SHELL COMPLETION

“Time T1”

LEASE-UP & TENANT FINISHES

STABILIZED OPERATION

$

CUMULATIVE INVESTME NT

$

DEVLPMT COMPLETION

“Time T2”

ENTREPRENEURIALDEVLPR SEED EQUITY

SOURCES OF CAPITAL:

EXTERNAL EQUITY &/OR MEZZ DEBT INVESTORS:OPPTY FUNDS, INSTNS, FOREIGN INVSTRS, WEALTHY INDIVIDUALS, REITS

DEVLPT CAPITALBetw 0 & T…FROM COMMERCIAL BANKS:TRADITIONAL CONSTRUCTION LOAN DEBT, FROM Time 0 TO Time T1;AND/ORMINI-PERM LOAN DEBTFROM Time 0 TO Time T2.

PERMANENT FINANCEBeyond Time T…FROM LICs, PFs, PRIV EQUITY :L.T. EQUITYORCOMMERCIAL MORTGAGE (EITHER CMBS CONDUIT OR WHOLE LOAN)

Time

ORDER OF INVESTMENT

ORDER OF PRIORITY IN PAYBACK

Exhibit 29-1b: Development Project Typical Sources of Investment Capital

A

B

C

D E

F

G H I

OZ