CWS CAPITAL PARTNERS LLC 2007 Supplemental Annual Report · 2007. 1. 6. · CWS Capital Partners...

TEL80046600204th edition

R e v i s e d & e x p a n d e d

EconomicsC W S C A P I T A L P A R T N E R S L L C

2007 Supplemental Annual Report

Regional Reference

c o n t e n t s

Region 1. Austin . . . . . . . . . . . . . . . . . . . . . . . . . 02

Region 2. Dallas / Fort Worth . . . . . . . . . . . . 13

Region 3. San Antonio . . . . . . . . . . . . . . . . . . . 33

Region 4. Houston . . . . . . . . . . . . . . . . . . . . . . . . 42

Region 5. Atlanta . . . . . . . . . . . . . . . . . . . . . . . . 49

Region 6. Charlotte . . . . . . . . . . . . . . . . . . . . . . 56

Region 7. Raleigh / Durham . . . . . . . . . . . . . . 65

Region 8. Denver . . . . . . . . . . . . . . . . . . . . . . . . 72

Region 9. Canada . . . . . . . . . . . . . . . . . . . . . . . . 79

CWS Capital Partners LLC 2 2007 Supplemental Annual Report

R E g I o N N o . 1

Austin

The Marquis at Ladera Vista • The Marquis at Caprock Canyon* • The Marquis at Barton Creek

Windsor at Barton Creek* • Northwest Hills Apartments • Riverside Square* • Riverside Place* • The Block on 28th*

The Block on Leon* • The Block on Pearl* • The Marquis at Great Hills*

The Marquis at Tree Tops • Sabine on 5th*

* Due to closely held ownership or less than 12 months of activity since date of purchase, financial pages for certain assets have not been included in the Supplemental Report.

Contact CWS Investor Relations for more information.

2007 Supplemental Annual ReportCWS Capital Partners


Austin Region

The Austin-San Marcos, TX MSA economy grew impressively during 2007 with job growth of

4.03%. This helped lead to strong apartment demand and healthy rent growth of 5.2%. In 2007

Austin continued to receive strong business accolades such as a No. 1 ranking in Business

Vitality by Moody’s and best place for a business expansion or relocation by Expansion

Magazine. Austin’s high quality of living, highly educated workforce and availability of office

space is helping to drive the growth. The long-term fundamentals look favorable for Austin

as employment is projected to grow by 2.8% annually over the next five years.

Austin

The Marquis at Ladera VistaThe Marquis at Great Hills

The Marquis at Caprock CanyonThe Marquis at Tree Tops

The Marquis at Barton Creek

The Block on 28thThe Block on Leon

The Block on PearlWindsor at Barton Creek

Riverside PlaceRiverside Square

Sabine on 5th

Four Points

Greenshores

HydePark

Travis

Coxville

Dessau

CentralBusiness District

University ofTexas–Austin

35

35

290

290

183

183

2222

1

275

734

360224471

71

71

2222

Northwest Hills Apartments

R e g i o n n o : 1

t o t a l U n i t s : 2,476

P R o P e R t y t o t a l : 13

s o U R c e s : Texas Workforce Commission,Austin Investor Interests, M/PF Research



m E T R o h I g h L I g h T S

Austin: Third Quarter

S u b m A R k E T d I S C u S S I o N

Northwest Austin

The northwest Austin submarket continues to be one of the strongest performing submarkets thanks to abundant Class

A office space and the area’s attractive quality of life. The communities of The Marquis at Ladera Vista, The Marquis at

Caprock Canyon, Northwest Hills, and The Marquis at Tree Tops reside in the northwest region. Well-known employers

such as IBM, J.J. Pickle Research Campus, Seton Northwest Hospital, 3M, SBC Communications, Apple, National

Instruments, and Advanced Micro Devices are all located within the region. The region has a highly skilled workforce and

includes the “Golden Triangle” highway system. The area’s quality of life is due to excellent schools, entertainment, and

some of the highest end retail and restaurants in Austin. The Arboretum includes over one million square feet of retail and

600,000 square feet of office space in addition to numerous hotels. Some of the retail tenants include Saks Fifth Avenue,

Whole Foods Market, Pottery Barn, Williams Sonoma, Barnes & Noble, Pier One Imports, and numerous other national,

regional, and local retailers. The Domain is a new development that opened in early 2007. The project is a 42-acre site with

approximately 700,000 square feet of retail. The Domain caters to Austin’s affluent population with high end retailers that

include Barney’s New York, Tiffany & Co, Intermix, and the city’s first Neiman Marcus. The development includes popular

restaurants and social settings. The additional development phases call for three million square feet of office space,

three upscale hotels, and 3,400 residences over the next 10 years. It is projected that 15,000 employees will eventually

work in the retail or office space at the Domain.

The northwest Austin submarket added two new apartment communities with 895 units in 2007. The region’s occupancy

rate is 93.2%, while the overall Austin area equaled 91.2% for the year ending December 2007. Projected future deliveries

are escalating with 15,411 under construction throughout the Austin MSA, with 1,047 of the total construction pipeline in

northwest Austin. Austin will need to maintain solid job growth in order to meet the new supply of apartments.


E A R N I N g S o v E R v I E W

The Marquis at Ladera Vista

2007 Statement of Income & 2008 Earnings Projection

actualearnings

year 2007

Projectedearnings

year 2008 Partnership Taxable Income / (Loss)

actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,316,635 $ 1,410,929 Mortgage Interest $ (685,653) (871,972) Estimated Depreciation (509,708) (513,199) Amortization (32,947) (48,830) Non-Recurring Repairs 0 0 Non-Operating Expenses (80,721) (83,297) projected Taxable income / (Loss) $ 7,606 $ (106,369)

Property Highlights 2007 2008

Limited Partner Return on Outstanding Investment (ROI) 39.50% 9.53%Average Economic Occupancy 77.98% 79.37%Average Physical Occupancy 93.65% 93.58%Average Market Rent $ 1,082 $ 1,113

Loan Information

Lender

loan Balance

as of 12/2007 interest Rate Maturity Date

Freddie Mac $ 11,560,000 5.85% April, 2011 Freddie Mac $ 3,525,000 5.07% April, 2011

Net Rental Income $ 2,267,176 $ 2,374,656 Other Income 233,894 243,815 Interest Income 5,738 0 Total Revenues $ 2,506,807 $ 2,618,471 Payroll & Benefits $ (291,961) $ (260,046) Marketing & Advertising (79,944) (69,693) Turnover Costs (33,031) (41,658) Repairs & Maintenance (29,941) (33,638) Professional Services (45,115) (54,086) General & Administrative (33,549) (38,977) Utilities (157,288) (166,721) Insurance (31,336) (43,248) Property Taxes (408,866) (417,020) Management Expenses (79,143) (82,454) Total Operating Expenses (1,190,172) (1,207,541)net Operating income $ 1,316,635 $ 1,410,929 Debt Service (Principal & Interest) $ (685,653) $ (916,431) Capital Expenditures (332,888) (194,525) Non-Operating Expenses (80,721) (83,297) Proceeds from Refinance 3,525,000 0 Cash from/(to) Reserves (24,470) 140,048 distributable Cash Flow 3,717,903 356,724 Limited partner share of distributable Cash Flow $ 3,717,903 $ 337,964

allocations by tenant-in-common

ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

Stonegate Lewisville Assoc. 69.86200% 34,946 (44,711) 2,597,401 235,658 CWS Jollyville Assoc, Ltd. 30.13800% (27,340) (61,658) 1,120,501 102,238 7,606 (106,369) 3,717,903 337,896

year 2007 actual ( in millions ) year 2008 Projected ( in millions )

Total Revenues

Operating Expenses

Debt Service

Other Sources / Uses

Distributions

$ 2.51

$ 1.19

$ 0.69

$ 0.41

$ 3.72

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 2.62

$ 1.21

$ 0.92

$ 0.28

$ 0.36



The Marquis at Tree Tops


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 208,571 $ 2,061,778 Mortgage Interest $ (147,191) $ (1,683,498) Estimated Depreciation (63,218) (80,841) Amortization (9,781) (55,572) Non-Recurring Repairs 0 0 Non-Operating Expenses (51,323) (126,418) projected Taxable income / (Loss) $ (62,943) $ 115,450



Loan Information

Lender

loan Balance


Freddie Mac $ 29,000,000 5.71% December, 2014

Net Rental Income $ 284,418 $ 3,361,931 Other Income 9,086 194,268 Interest Income 0 0 Total Revenues $ 293,504 $ 3,556,199 Payroll & Benefits $ (11,139) $ (297,928) Marketing & Advertising (3,173) (69,327) Turnover Costs (956) (41,660) Repairs & Maintenance (3,330) (34,167) Professional Services (2,757) (75,420) General & Administrative (419) (37,672) Utilities (4,403) (182,097) Insurance (24) (54,384) Property Taxes (49,362) (591,180) Management Expenses (9,369) (110,586) Total Operating Expenses (84,933) (1,494,421)net Operating income $ 208,571 $ 2,061,778 Debt Service (Principal & Interest) $ (147,191) $ (1,683,498) Capital Expenditures (39,674) (969,253) Non-Operating Expenses (51,323) (126,418) Cash from Lender Reserves 0 778,715 Cash from/(to) Reserves 29,618 (61,325)distributable Cash Flow $ 0 $ 0 Limited partner share of distributable Cash Flow $ 0 $ 0


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Treetops-Bartons TVL, LP 16.54973% (8,542) 20,981 0 0 CWS Treetops-Sunset TVL, LP 9.83225% (7,062) 10,478 0 0 CWS Treetops-Lodge TVL, LP 17.22971% (11,519) 19,218 0 0 CWS Treetops-Lamplighter TVL, LP 16.67009% (12,153) 17,585 0 0 CWS Treetops-Marietta TVL, LP 22.63196% (16,672) 23,702 0 0 CWS Treetops-Pooles TVL, LP 11.46861% (7,010) 13,449 0 0 Private Trust* 2.21167% 6 3,952 0 0 Private Trust* 3.40598% 9 6,085 0 0 CWS Treetops, LP *** (15,248) 25,432 0 0 * Note: Depreciation is not included as depreciable basis is not known (78,191) 140,882 0 0 ***Includes distributions from limited partner interest in all above listed partnerships


Total Revenues

Operating Expenses

Debt Service


$ 0.29

$ 0.08

$ 0.15

$ 0.09

Total Revenues

Operating Expenses

Debt Service


$ 3.56

$ 1.50

$ 1.68

$ 1.10



Northwest Hills Apartments


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,519,989 $ 1,573,235 Mortgage Interest $ (757,162) $ (846,160) Estimated Depreciation (612,647) (616,325) Amortization (70,166) (79,326) Non-Recurring Repairs (0) 0 Non-Operating Expenses (106,215) (119,280) projected Taxable income / (Loss) $ (26,201) $ (87,856)


Limited Partner Return on Outstanding Investment (ROI) 33.73% 5.41%Average Economic Occupancy 84.81% 85.60%Average Physical Occupancy 96.83% 96.37%Average Market Rent $ 819 $ 836

Loan Information

Lender

loan Balance


Freddie Mac $ 14,965,829 4.98% October, 2010 Freddie Mac $ 1,800,000 5.02% October, 2010

Net Rental Income $ 2,617,584 $ 2,697,255 Other Income 290,576 295,293 Interest Income 23,219 3,000 Total Revenues $ 2,931,379 $ 2,995,548 Payroll & Benefits $ (349,878) $ (330,855) Marketing & Advertising (92,583) (82,826) Turnover Costs (67,591) (69,047) Repairs & Maintenance (41,278) (49,037) Professional Services (62,492) (59,596) General & Administrative (39,491) (43,708) Utilities (233,866) (243,914) Insurance (54,226) (56,316) Property Taxes (377,444) (392,648) Management Expenses (92,540) (94,366) Total Operating Expenses (1,411,390) (1,422,313)net Operating income $ 1,519,989 $ 1,573,235 Debt Service (Principal & Interest) $ (807,495) $ (1,080,300) Capital Expenditures (137,729) (202,300) Non-Operating Expenses (106,215) (119,280) Proceeds from Refinance 1,726,601 0 Cash from Lender Reserves 48,703 0 Cash from/(to) Reserves (107,891) 91,299 distributable Cash Flow $ 2,135,963 $ 262,654 Limited partner share of distributable Cash Flow $ 2,135,963 $ 262,654


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Northwest Hills, LP 41.94236% (348,107) (373,966) 895,873 110,163 CWS VOT SC Northwest Hills, LP 5.55954% 14,033 10,605 118,750 14,602 Private Trust* 6.52530% 38,267 34,244 139,378 17,139 Private Trust* 5.90050% 34,603 30,965 126,033 15,498 Private Trust* 21.69766% 127,245 113,867 463,454 56,990 Private Trust* 7.49810% 43,972 39,349 160,157 19,694 Private Trust* 10.87653% 63,785 57,079 232,319 28,568 * Note: Depreciation is not included as depreciable basis is not known (26,201) (87,856) 2,135,963 262,654


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 2.93

$ 1.41

$ 0.81

$ 0.24

$ 2.14

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.00

$ 1.42

$ 1.08

$ 0.32

$ 0.26



Southwest Austin

Southwest Austin is one of the liveliest submarkets due to its close proximity to downtown and its hill country setting. The

communities of The Marquis at Barton Creek, Windsor at Barton Creek, Riverside Square and Riverside Place are located

within this region. Well known employers such as Motorola, the University of Texas at Austin, St. Edward’s University,

Sematech, Applied Materials, AMD, and Barton Creek Square Mall are located in the southwest. The region’s quality of

life is highlighted by the easy access to the downtown cultural centers, Zilker Park, the Town Lake hike and bike trail,

shopping, restaurants, and employment. Barton Creek Square Mall includes 180 specialty retailers and is anchored by

Nordstrom. AMD made a major investment in southwest Austin adding a new 800,000 square foot state of the art office at a

cost of $270 million, further enhancing the area’s reputation as one of Austin’s best.

The southwest Austin submarket added one new apartment community with 336 units in 2007. The region’s occupancy

rate is 91.9%, while the overall Austin metropolitan area equaled 91.2% for the year ending December 2007. Projected

future deliveries are escalating with 15,411 under construction throughout the Austin MSA, with only 474 of the total

construction pipeline in southwest Austin.




The Marquis at Barton Creek


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,858,155 $ 2,034,119 Mortgage Interest (1,615,600) (1,614,153) Lender Group Interest (124,885) (194,056) Estimated Depreciation (695,638) (703,759) Amortization (45,761) (45,760) Non-Recurring Repairs 0 0 Non-Operating Expenses (119,930) (119,421) Projected Taxable Income / (Loss) $ (743,659) $ (643,029)



Loan Information

Lender

loan Balance


Freddie Mac $ 20,399,000 7.92% August, 2010 Barton Creek Lender Group $ 1,545,324 9.50% December, 2007

Net Rental Income $ 3,320,785 $ 3,486,276 Other Income 282,875 292,260 Interest Income 1,063 0 Total Revenues $ 3,604,723 $ 3,778,536 Payroll & Benefits $ (327,707) $ (303,912) Marketing & Advertising (91,858) (95,313) Turnover Costs (73,701) (68,610) Repairs & Maintenance (47,098) (32,407) Professional Services (43,016) (51,872) General & Administrative (40,692) (41,728) Utilities (200,195) (206,083) Insurance (41,354) (43,908) Property Taxes (734,148) (748,816) Homeowners Association Dues (34,511) (34,512) Management Expenses (112,289) (117,256) Total Operating Expenses (1,746,567) (1,744,417)Net Operating Income $ 1,858,155 $ 2,034,119 Debt Service (Principal & Interest) $ (1,615,600) $ (1,724,246) Lender Group Interest (124,885) (152,650) Capital Expenditures (219,469) (632,876) Non-Operating Expenses (119,930) (119,421) Cash from Lender Group** 510,395 700,000 Cash from Lender Reserves 14,502 0 Cash from/(to) Reserves (303,168) (104,927)Distributable Cash Flow $ 0 $ 0 Limited Partner Share of Distributable Cash Flow $ 0 $ 0


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

Creekside-Estancia LP 42.25219% (432,074) (390,986) 0 0 Shadowood-Estancia LP 26.44230% (208,636) (179,536) 0 0 Suburban Woods-Estancia LP 10.43338% (92,926) (82,780) 0 0 Private Trust* 3.24536% (1,558) 1,597 0 0 Private Trust* 6.85871% (3,294) 3,376 0 0 Private Trust* 9.32251% (4,477) 4,589 0 0 Private Trust* 1.44555% (694) 712 0 0 * Note: Depreciation is not included as depreciable basis is not known (743,659) (643,029) 0 0


Total Revenues

Operating Expenses

Debt Service


$ 3.64

$ 1.75

$ 1.74

$ 0.34

Total Revenues

Operating Expenses

Debt Service


$ 3.78

$ 1.74

$ 1.88

$ 0.75


R E g I o N N o . 2

Dallas / Fort Worth

Brooks on Preston* • The Marquis at Waterview • The Marquis at Stonegate • The Marquis at Willow Lake

The Marquis at Turtle Creek • The Marquis at Bellaire Ranch • The Marquis on McKinney

The Marquis at West Village* • The Marquis at Park Central • The Marquis on Gaston* • The Marquis at Silver Oaks*

The Park on Spring Creek* • The Marquis at Lantana* • The Marquis at Riverchase* • The Marquis at Stonebriar*

The Marquis on Cedar Springs • The Park at Fox Trails* • The Cambridge of Highland Park* • The Marquis at Texas Street





Dallas / Fort Worth Region

The Dallas-Fort Worth, TX MSA (“D/FW”) is one of the nation’s most vibrant markets and is

enjoying a sustained period of population and employment growth. According to a recent study,

the D/FW Metroplex is projected to add over 600,000 new jobs over the next seven years, an

increase of nearly 23%. The Metroplex is home to over 2,250 global companies and 22 Fortune

500 companies. It is also widely expected that the Metroplex will fair rather well during the

anticipated recession. According to the North Central Texas Council of Governments’ 2030

Demographic Forecast, employment growth in the D/FW Metroplex will continue in the near-

term and long-term as Dallas County is expected to attract over 750,000 new jobs by 2030.

Overall apartment occupancy in D/FW is 94%, the highest level in six years. Effective rents rose

a notable 4% across the D/FW region during 2007. New apartment deliveries in the past year

added nearly 7,200 units, but demolitions and condo conversions eliminated approximately

6,700 apartments resulting in net inventory growth of a mere 487 units.

Dallas

Brooks on Preston

The Park on Spring CreekThe Park at Fox Trails

The Marquis at StonegateThe Marquis at Bellaire Ranch

The Marquis at Willow Lake

The Marquis at LantanaThe Marquis at Riverchase

The Marquis at Silver Oaks

The Marquis at Turtle Creek The Marquis at West Village

The Cambridge of Highland Park

The Marquis on Cedar Springs

The Marquisat Waterview

FortWorth

DallasFort WorthInternationalAirport

Love FieldAirport

Mesquite

Garland

Carrollton

2020

635

45

30

35E

35E

35W

820

820

77287

75The Marquis at Stonebriar

12

183

114

408

360

The Marquisat Park Central

The Marquis on McKinney

The Marquis on GastonThe Marquis at Texas Street

R e g i o n n o : 1

t o t a l U n i t s : 1,942


s o U R c e s : CNNMoney.com,

Money Magazine Online Edition

www.austin-chamber.org


R e g i o n n o : 2

t o t a l U n i t s : 5,362


s o U R c e s : M/PF Research




Dallas: Third Quarter


Uptown Dallas

Uptown Dallas has emerged as the strongest residential rental niche market in the D/FW metroplex. Uptown Dallas, part

of the larger Intown rental submarket, consistently ranks as one of the top tier submarkets in terms of both occupancy and

rental rates. Uptown offers urban living at its finest with every amenity possible for the cosmopolitan, on-the-go lifestyle.

The Marquis at Turtle Creek, The Marquis on McKinney, The Marquis on Gaston, The Marquis on Cedar Springs, The

Marquis at Texas Street, The Cambridge of Highland Park, and The Marquis at West Village are all within this dynamic

neighborhood. This submarket is located just north of the Dallas Central Business District and is often referred to as the

“Gold Coast” with its lavish high-rises, multi-million dollar homes, luxury boutique hotels, and some of the finest specialty

retail stores in all of Texas. Nearly 50 million square feet of office space is within a few miles including the Trammell Crow

Center, the Crescent Towers, and the Park Place Towers, all of which command the highest office rents in the metroplex.

As of the fourth quarter 2007, occupancy in the Intown submarket was reported to be 94.8% overall and 94.5% for 1990’s

vintage communities. The strength of the submarket is further demonstrated through its rents which averaged $1,250/

month for the fourth quarter 2007. This rate is 2.1% higher than the same time last year and exceeds the Dallas average by

over 63%. The demand for in-fill living and Uptown’s superior set of lifestyle opportunities remain the primary catalyst for

the area’s superior market performance.



The Marquis at Texas Street


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,357,848 $ 2,332,777 Mortgage Interest (672,602) (1,123,134) Estimated Depreciation (355,217) (365,378) Amortization (46,583) (79,856) Non-Recurring Repairs 0 0 Non-Operating Expenses (68,223) (120,960) projected Taxable income / (Loss) $ 215,223 $ 643,448



Loan Information

Lender

loan Balance


FHLMC $ 22,719,178 4.75% April, 2011

Net Rental Income $ 1,920,350 $ 3,314,324 Other Income 140,655 258,290 Interest Income 14,038 0 Total Revenues 2,075,043 3,572,614 Payroll & Benefits $ (224,607) $ (403,258) Marketing & Advertising (81,481) (149,018) Turnover Costs (33,429) (65,816) Repairs & Maintenance (34,137) (41,226) Professional Services (64,809) (125,346) General & Administrative (30,869) (43,011) Utilities (98,559) (172,387) Insurance (38,107) (50,340) Property Taxes (45,531) (77,036) Management Expenses (65,663) (112,398) Total Operating Expenses (717,195) (1,239,837)net Operating income $ 1,357,848 $ 2,332,777 Debt Service (Principal & Interest) (935,960) (1,502,340) Capital Expenditures (154,704) (139,720) Non-Operating Expenses (68,223) (120,960) Cash from/(to) Reserves (37,482) ($43,377)distributable Cash Flow 161,479 526,380 Limited partner share of distributable Cash Flow $ 161,479 $ 526,380


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Texas Street, LP 18.23043% 660 78,727 29,438 95,961 CWS Texas Street-Quarry, LP 53.28094% 90,738 318,900 86,038 280,460 FG87-Texas Street, LLC 10.94431% 23,746 70,612 17,673 57,609 Private Trust* 2.10169% 11,989 20,989 3,394 11,063 Private Trust* 2.56306% 14,621 25,596 4,139 13,491 Private Trust* 7.28181% 41,538 72,721 11,759 38,330 Private Trust* 5.59776% 31,932 55,903 9,039 29,465 * Note: Depreciation is not included as depreciable basis is not known 215,223 643,448 161,479 526,380


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 2.08

$ 0.72

$ 0.94

$ 0.22

$ 0.16

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.57

$ 1.24

$ 1.50

$ 0.26

$ 0.53




The Marquis at McKinney


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Mortgage Interest $ (915,399) $ (904,331) Lender Group Interest 0 (16,875) Estimated Depreciation (688,273) (702,221) Amortization (50,767) (66,488) Non-Recurring Repairs (0) 0 Non-Operating Expenses (75,109) (84,305) Projected Taxable Income / (Loss) $ (452,089) $ (385,690)



Loan Information

Lender

loan Balance


Freddie Mac $ 15,436,799 Libor + 2.35% July, 2011

Net Rental Income $ 2,421,364 $ 2,534,946 Other Income 144,974 142,999 Interest Income 556 0 Total Revenues $ 2,566,894 $ 2,677,945 Payroll & Benefits $ (260,149) $ (258,709) Marketing & Advertising (74,887) (80,990) Turnover Costs (30,855) (29,435) Repairs & Maintenance (22,764) (23,542) Professional Services (106,637) (79,574) General & Administrative (31,111) (31,448) Utilities (144,572) (147,024) Insurance (30,680) (35,304) Property Taxes (505,467) (521,732) Management Expenses (82,312) (81,658) Total Operating Expenses (1,289,434) (1,289,416)net Operating income $ 1,277,460 $ 1,388,529 Debt Service (Principal & Interest) $ (1,140,921) $ (1,141,997) Lender Group Interest 0 (13,125) Capital Expenditures (97,756) (238,259) Non-Operating Expenses (75,109) (84,305) Cash from Lender Group 0 250,000 Cash from Lender Reserves 48,701 0 Cash from/(to) Reserves (12,374) (160,843)distributable Cash Flow $ 0 $ 0 Limited partner share of distributable Cash Flow $ 0 $ 0


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

McKinney Partners, LP 17.14947% (90,994) (76,806) 0 0 CWS McKinney Investors, LP 71.67018% (387,501) (342,336) 0 0 Private Trust* 11.18035% 26,406 33,452 0 0 * Note: Depreciation is not included as depreciable basis is not known (452,089) (385,690) 0 0


Total Revenues

Operating Expenses

Debt Service


$ 2.57

$ 1.29

$ 1.14

$ 0.17

Total Revenues

Operating Expenses

Debt Service


$ 2.68

$ 1.29

$ 1.15

$ 0.22



The Marquis at Turtle Creek


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 619,037 $ 650,476 Mortgage Interest (434,159) (344,384) Lender Group Interest 0 (10,125) Estimated Depreciation (210,079) (220,681) Amortization (38,416) (38,003) Non-Recurring Repairs (0) 0 Non-Operating Expenses (48,410) (52,807)projected Taxable income / (Loss) $ (112,028) $ (15,523)



Loan Information

Lender

loan Balance


Freddie Mac $ 6,656,381 Freddie June, 2012 Reference Bills Rate + 1.55%

Net Rental Income $ 1,335,139 $ 1,410,933 Other Income 77,493 78,178 Interest Income 1,377 0 Total Revenues $ 1,414,008 $ 1,489,111 Payroll & Benefits $ (159,927) $ (165,655) Marketing & Advertising (71,330) (72,318) Turnover Costs (47,742) (45,657) Repairs & Maintenance (30,719) (28,998) Professional Services (35,911) (35,770) General & Administrative (22,793) (25,991) Utilities (115,990) (143,781) Insurance (17,304) (18,192) Property Taxes (245,992) (253,700) Management Expenses (47,264) (48,573) Total Operating Expenses (794,972) (838,635)net Operating income $ 619,037 $ 650,476 Debt Service (Principal & Interest) $ (514,836) $ (444,752) Lender Group Interest 0 (7,875) Capital Expenditures (120,293) (149,417) Non-Operating Expenses (48,410) (52,807) Cash from Lender Group 0 150,000 Cash from/(to) Reserves 99,853 (145,625)distributable Cash Flow $ 35,350 $ 0 Limited partner share of distributable Cash Flow $ 35,350 $ 0


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Royale-Franciscan, LP 87.62376% (76,787) 7,542 30,975 0 CWS Royale-SW, LP 12.37624% (35,241) (23,065) 4,375 0 (112,028) (15,523) 35,350 0


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 1.41

$ 0.79

$ 0.51

$ 0.17

$ 0.04

Total Revenues

Operating Expenses

Debt Service


$ 1.49

$ 0.84

$ 0.45

$ 0.20



The Marquis at Cedar Springs


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,016,244 $ 1,038,307 Mortgage Interest (792,450) (792,047) Estimated Depreciation (635,340) (646,529) Amortization (62,625) (60,372) Non-Recurring Repairs 0 0 Non-Operating Expenses (106,178) (100,614) projected Taxable income / (Loss) $ (580,349) (561,255)



Loan Information

Lender

loan Balance


Metropolitan Life Insurance Company $ 13,500,000 5.87% October, 2011

Net Rental Income $ 2,191,848 $ 2,281,918 Other Income 95,829 111,244 Interest Income 19,646 0 Total Revenues $ 2,307,323 $ 2,393,162 Payroll & Benefits $ (269,300) $ (294,703) Marketing & Advertising (66,799) (87,263) Turnover Costs (51,590) (46,936) Repairs & Maintenance (26,849) (29,423) Professional Services (46,379) (44,515) General & Administrative (34,401) (35,190) Utilities (158,512) (163,094) Insurance (39,447) (39,288) Property Taxes (521,988) (538,748) Management Expenses (75,812) (75,695) Total Operating Expenses (1,291,079) (1,354,855)net Operating income $ 1,016,244 $ 1,038,307 Debt Service (Principal & Interest) $ (792,450) $ (847,560) Capital Expenditures (377,278) (91,250) Non-Operating Expenses (106,178) (100,614) Cash from/(to) Reserves 578,186 101,117 distributable Cash Flow $ 318,524 $ 100,000 Limited partner share of distributable Cash Flow $ 318,524 $ 100,000


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Cedar Springs PV WB, LP 22.14073% (148,904) (143,668) 70,524 22,141 CWS Cedar Springs NB WB, LP 16.65910% (61,966) (63,404) 53,063 16,659 CWS Cedar Springs Pooles WB, LP 6.12264% (37,672) (37,241) 19,502 6,123 CWS Cedar Springs Bartons SC, LP 7.70906% (41,281) (37,617) 24,555 7,709 CWS Cedar Springs TLG SC, LP 8.11246% (47,419) (45,501) 25,840 8,112 CWS Cedar Springs Sunset SC, LP 10.45399% (73,434) (70,962) 33,298 10,454 CWS Cedar Springs Oakbrook, LP 11.77914% (76,658) (73,873) 37,519 11,779 CWS Cedar Springs CMHC, LLC 12.31312% (95,605) (92,693) 39,220 12,313 Private Trust* 4.70976% 2,590 3,704 15,002 4,710 * Note: Depreciation is not included as depreciable basis is not known (580,349) (561,255) 318,524 100,000


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 2.31

$ 1.29

$ 0.79

$ 0.48

$ 0.32

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 2.39

$ 1.35

$ 0.85

$ 0.19

$ 0.10


North Dallas Suburbs & Mid-Cities

The North Dallas area encompasses all submarkets north of Uptown. The North Dallas suburbs & mid-cities have grown rapidly during the past decade due to the general demographic shift north and west of central Dal-las. The communities of The Marquis at Waterview, Brooks on Preston, The Marquis at Park Central, The Mar-quis at Silver Oaks, The Marquis at Lantana, The Marquis at Riverchase, The Park at Fox Trails, The Park on Spring Creek and The Marquis at Stonebriar all reside in this region. Roadways here include the Dallas North Tollway, Central Expressway, LBJ Freeway, and George Bush Freeway. Numerous office parks including Park Central, the Golden Corridor, Galleria area, Galatyn Park, and Legacy are located within this area. The region’s quality of life is plentiful due to high caliber schools, recreation, and the finest shopping in the entire D/FW region. Grapevine Mills, The Galleria, and Collin Creek Mall are just a few of the popular shopping desti-nations in the area. Also, some of Dallas’s most affluent areas are included here. Key CWS submarkets in North Dallas are: Richardson, Plano, North Dallas, Lewisville, Valley Ranch and Northeast Tarrant County.

As of fourth quarter, the occupancy average for Richardson was 96.3% with 1990’s product averaging 95.1%. Rents averaged $877, up 3.5%. Plano’s average occupancy was 95.2% with 1990’s product averaging 96.2%. Rents averaged $899, up 3.9%. As of fourth quarter, the average occupancy for Near North Dallas was 95.5% with 1990’s product averaging 93.3%. Rents averaged $885, up 3.6%. Lewisville’s average occupancy was 95.3% with 1990’s product averaging 95.4%. Rents averaged $804, up 5.0%. Valley Ranch’s gross occupancy av-erage was 94.5% with 1990’s product averaging 95.4%. Rents averaged $901, up 3.7%. The average occupancy for Northeast Tarrant County was 96.2% with 1990’s product averaging 97.1%. Rents averaged $870, up 6.8%.



The Marquis at Waterview


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 3,448,613 $ 3,722,359 Mortgage Interest (2,107,565) (2,113,339) Estimated Depreciation (1,046,324) (1,058,958) Amortization (104,411) (113,654) Non-Recurring Repairs 0 0 Non-Operating Expenses (195,150) (237,600) projected Taxable income / (Loss) $ (4,836) $ 198,808



Loan Information

Lender

loan Balance


Prudential Multifamily Mortgage $ 34,819,000 5.97% May, 2013

Net Rental Income $ 5,804,077 $ 6,099,914 Other Income 527,836 555,644 Interest Income 15,382 0 Total Revenues $ 6,347,294 $ 6,655,558 Payroll & Benefits $ (676,325) $ (669,559) Marketing & Advertising (104,419) (101,562) Turnover Costs (113,092) (103,354) Repairs & Maintenance (122,891) (123,366) Professional Services (119,693) (125,451) General & Administrative (66,208) (64,520) Utilities (401,836) (407,536) Insurance (80,557) (84,384) Property Taxes (1,015,744) (1,047,500) Management Expenses (197,917) (205,967) Total Operating Expenses (2,898,681) (2,933,199)net Operating income $ 3,448,613 $ 3,722,359 Debt Service (Principal & Interest) $ (2,107,565) $ (2,113,339) Capital Expenditures (475,368) (410,809) Non-Operating Expenses (195,150) (237,600) Cash from Lender Reserves 160,854 0 Cash from/(to) Reserves 31,329 (4,991)distributable Cash Flow $ 862,713 $ 955,620 Limited partner share of distributable Cash Flow $ 862,713 $ 955,620


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Crystal Lake-Waterview, LP 4.54916% (14,305) (4,991) 39,246 43,473 CWS Diamond Valley-Waterview, LP 5.75630% (4,237) 7,559 49,660 55,008 CWS Friendly Village-Waterview, LP 22.11485% (7,087) 38,161 190,788 211,334 CWS Palm Valley-Waterview, LP 18.26564% 7,510 44,936 157,580 174,550 CWS Shadow Hills-Waterview, LP 6.23707% 37,559 49,081 53,808 59,603 Southpac I, LP 4.35582% (25,421) (17,301) 37,578 41,625 CWS Newport-Waterview, LP 4.35582% (12,295) (2,999) 37,578 41,625 CWS Sunset-Waterview, LP 15.25529% 19,173 50,352 131,609 145,783 CWS Univ Winterhaven-Waterview, LP 16.70848% (30,747) 4,523 144,146 159,670 Private Trust* 2.40158% 25,012 29,489 20,719 22,950 * Note: Depreciation is not included as depreciable basis is not known (4,836) 198,808 862,713 955,620


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 6.35

$ 2.90

$ 2.11

$ 0.67

$ 0.86

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 6.66

$ 2.93

$ 2.11

$ 0.65

$ 0.96



The Marquis at Park Central


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,925,666 $ 2,103,695 Mortgage Interest (1,278,696) (1,174,033) Estimated Depreciation (717,200) (737,601) Amortization (77,931) (72,031) Non-Recurring Repairs 0 0 Non-Operating Expenses (49,658) (130,938) projected Taxable income / (Loss) $ (197,819) $ (10,909)



Loan Information

Lender

loan Balance


Freddie Mac $ 20,533,074 Libor + 1.4% February, 2012

Net Rental Income $ 3,532,932 $ 3,747,424 Other Income 234,437 242,863 Interest Income 17,295 0 Total Revenues $ 3,784,664 $ 3,990,287 Payroll & Benefits $ (428,126) $ (407,871) Marketing & Advertising (72,765) (80,203) Turnover Costs (58,027) (57,975) Repairs & Maintenance (40,522) (36,954) Professional Services (89,050) (97,448) General & Administrative (36,777) (40,975) Utilities (210,333) (211,882) Insurance (59,920) (60,228) Property Taxes (744,233) (767,228) Management Expenses (119,246) (125,829) Total Operating Expenses (1,858,998) (1,886,593)net Operating income $ 1,925,666 $ 2,103,695 Debt Service (Principal & Interest) $ (1,465,010) $ (1,439,248) Capital Expenditures (288,588) (299,819) Non-Operating Expenses (49,658) (130,938) Cash from Lender Reserves 43,559 0 Cash from/(to) Reserves 21,907 16,810 distributable Cash Flow $ 187,875 $ 250,500 Limited partner share of distributable Cash Flow $ 187,875 $ 250,500


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS HCN Park Central, LP 30.82106% (104,044) (45,945) 57,905 77,207 CWS HCM Park Central, LP 16.82138% (35,366) (4,161) 31,603 42,138 CWS LM Park Central, LP 15.55097% (43,726) (14,398) 29,216 38,955 CWS Park Marquis, LP*** 19.53635% (111,485) (70,460) 41,503 55,337 Private Trust* 3.49503% 18,153 24,636 6,566 8,755 Private Trust* 11.64587% 60,486 82,090 21,880 29,173 Private Trust* 2.12934% 11,059 15,009 4,000 5,334 ***Includes distributions from limited partner interest in CWS HCN Park Central, (204,923) (13,229) 187,875 250,500 LP, CWS HCM Park Central, LP, and CWS LM Park Central, LP * Note: Depreciation is not included as depreciable basis is not known


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.78

$ 1.86

$ 1.47

$ 0.34

$ 0.19

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.99

$ 1.89

$ 1.44

$ 0.43

$ 0.25




Fort Worth: Third Quarter


Southwest Fort Worth

Southwest Fort Worth is one of the most prestigious locations in the D/FW region and home to the Colonial Country Club

and Texas Christian University. The Marquis at Stonegate, The Marquis at Bellaire Ranch and The Marquis at Willow

Lake are all situated along Hulen Street between Interstate 20 to the south, and Interstate 30 to the north. Southwest

Fort Worth is a likely destination for residents looking for well-planned neighborhoods, quality schools and the finest

shopping and dining available in all of Fort Worth. The region’s quality recreational amenities including the Fort Worth

Zoo, Botanical Gardens and the Trinity River Trails are perfect for biking, walking or rollerblading. The district is also

home to the Amon Carter Art Museum of Fort Worth. Prominent Fort Worth employers such as Lockheed Martin, Pier 1

Imports and RadioShack are within a few miles of each community.

Southwest Fort Worth occupancy rates were 94.5% with 90’s product averaging 96.3% as of fourth quarter 2007. The

average rent increased 9.5% to $729.



The Marquis At Bellaire Ranch


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 2,403,746 $ 2,551,369 Mortgage Interest (1,130,802) (1,536,091) Estimated Depreciation (386,245) (448,150) Amortization (59,601) (39,242) Non-Recurring Repairs 45,029 0 Non-Operating Expenses (97,143) (135,425) projected Taxable income / (Loss) $ 774,983 $ 392,462



Loan Information

Lender

loan Balance


Jefferson-Pilot Life Insurance Company $ 16,623,284 6.75% March, 2009

Net Rental Income $ 3,942,248 $ 4,121,738 Other Income 432,708 464,411 Interest Income 23,340 0 Total Revenues $ 4,398,296 $ 4,586,149 Payroll & Benefits $ (438,049) $ (436,069) Marketing & Advertising (58,089) (62,636) Turnover Costs (21,842) (25,061) Repairs & Maintenance (46,112) (46,151) Professional Services (141,685) (131,229) General & Administrative (46,603) (43,603) Utilities (230,435) (254,563) Insurance (53,132) (53,712) Property Taxes (820,343) (839,672) Management Expenses (138,261) (142,084) Total Operating Expenses (1,994,550) (2,034,780)net Operating income $ 2,403,746 $ 2,551,369 Debt Service (Principal & Interest) $ (1,474,920) $ (1,595,396) Capital Expenditures (342,209) (851,194) Non-Operating Expenses (97,143) (135,425) Proceeds from Refinance 0 12,554,000 Cash from/(to) Reserves (4,497) (1,794,354)Distributable Cash Flow $ 484,977 $ 10,729,000 Limited partner share of distributable Cash Flow $ 484,977 $ 10,661,703


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Bellaire-Laguna, LP 17.97655% 31,552 (37,212) 87,805 1,916,382 CWS Bellaire-Feliz, LP 29.21445% 130,198 18,447 142,035 3,116,831 Private Trust* 11.23596% 130,475 87,495 54,370 1,197,594 Private Trust* 15.73034% 182,665 122,493 75,910 1,676,525 Private Trust* 20.22472% 234,855 157,491 97,599 2,155,536 Private Trust* 5.61798% 65,238 43,748 27,259 598,835 * Note: Depreciation is not included as depreciable basis is not known 774,983 392,462 484,977 10,661,703


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 4.40

$ 1.99

$ 1.47

$ 0.40

$ 0.50

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 4.59

$ 2.03

$ 1.60

$ 0.99

$ 10.73



The Marquis at Willow Lake


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 869,764 $ 915,405 Mortgage Interest $ (520,841) $ (595,361) Estimated Depreciation (368,081) (410,696) Amortization (58,386) (45,624) Non-Recurring Repairs 0 0 Non-Operating Expenses (92,601) (81,419) projected Taxable income / (Loss) $ (170,146) $ (217,695)



Loan Information

Lender

loan Balance


Freddie Mac $ 9,600,000 6.10% September, 2012

Net Rental Income $ 1,656,573 $ 1,778,400 Other Income 105,741 119,410 Interest Income 14,491 0 Total Revenues $ 1,776,805 $ 1,897,810 Payroll & Benefits $ (205,983) $ (257,464) Marketing & Advertising (40,671) (41,585) Turnover Costs (11,593) (10,477) Repairs & Maintenance (32,137) (29,498) Professional Services (35,809) (44,968) General & Administrative (35,530) (32,295) Utilities (127,970) (130,611) Insurance (24,896) (29,220) Property Taxes (334,323) (345,452) Management Expenses (58,129) (60,834) Total Operating Expenses (907,042) (982,404)net Operating income $ 869,764 $ 915,405 Debt Service (Principal & Interest) $ (576,808) $ (595,361) Capital Expenditures (353,400) (585,958) Non-Operating Expenses (92,601) (81,419) Cash from Refinance 2,414,660 0 Cash from/(to) Reserves (485,550) 593,355 distributable Cash Flow $ 1,776,064 $ 246,022 Limited partner share of distributable Cash Flow $ 1,776,064 $ 246,022


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS O’Connor-Willow Lake, L.P.*** 13.26819% (8,184) (71,504) 560,711 48,293 CWS Stillhouse, L.P. 0.00000% (21,754) (38,986) 21,754 0 CWS Feliz-Willow Lake, L.P. 29.77574% (27,848) (36,875) 522,359 60,142 CWS Margate-Willow Lake, L.P. 31.27898% (46,891) (56,374) 548,730 63,178 CWS Winter-Willow Lake, L.P. 25.67709% (42,274) (50,058) 450,456 51,863 CWS Stonelake Associates* , *** 89,881 (121,745) 837,655 91,155 * Note: Depreciation is not included as depreciable basis is not known (170,146) (217,695) 1,776,064 314,631 ***Includes distributions from limited partner interest in all above listed partnerships


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 1.78

$ 0.91

$ 0.58

$ 0.45

$ 1.78

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 1.90

$ 0.98

$ 0.60

$ 0.67

$ 0.25



The Marquis At Stonegate


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,882,174 $ 1,979,654 Mortgage Interest (1,004,651) (910,346) Estimated Depreciation (786,512) (815,678) Amortization (45,586) (44,424) Non-Recurring Repairs 0 0 Non-Operating Expenses (48,812) (153,197) projected Taxable income / (Loss) $ (3,386) $ 56,009



Loan Information

Lender

loan Balance


Freddie Mac $ 15,900,000 Libor + 1.37% June, 2012

Net Rental Income $ 3,258,397 $ 3,378,853 Other Income 324,590 348,612 Interest Income 9,726 0 Total Revenues $ 3,592,713 $ 3,727,465 Payroll & Benefits $ (403,047) $ (410,185) Marketing & Advertising (57,805) (56,095) Turnover Costs (39,186) (37,598) Repairs & Maintenance (54,497) (55,580) Professional Services (60,036) (67,102) General & Administrative (49,977) (47,843) Utilities (225,070) (229,036) Insurance (51,661) (50,844) Property Taxes (656,410) (677,204) Management Expenses (112,850) (116,324) Total Operating Expenses (1,710,539) (1,747,811)net Operating income $ 1,882,174 $ 1,979,654 Debt Service (Principal & Interest) ($1,004,651) ($910,346) Capital Expenditures ($275,681) ($319,603) Non-Operating Expenses ($48,812) ($153,197) Cash from Lender Reserves $153,707 79,300 Cash from/(to) Reserves ($110,016) ($79,085)distributable Cash Flow $ 596,723 $ 596,723 Limited partner share of distributable Cash Flow $ 596,723 $ 596,723


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS O’Connor-Stonegate, L.P.*** 11.95444% (27,726) (14,336) 134,828 134,828 CWS Forth Worth, L.P. 9.90151% (9,949) (3,754) 59,085 59,085 CWS Feliz-Stonegate, L.P. 26.82749% 38,071 54,835 160,086 160,086 CWS Margate-Stonegate, L.P. 28.18189% 889 18,024 168,168 168,168 CWS Winter-Stonegate, L.P. 23.13467% (5,767) 6,138 138,050 138,050 CWS Stonelake Associates*** (2,785) 24,100 269,296 269,296 * Note: Depreciation is not included as depreciable basis is not known (3,386) 56,009 929,511 929,512 ***Includes distributions from limited partner interest in all above listed partnerships


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.59

$ 1.71

$ 1.00

$ 0.32

$ 0.60

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.73

$ 1.75

$ 0.91

$ 0.47

$ 0.60



R E g I o N N o . 3

San Antonio

The Marquis at Deerfield • The Marquis at Rogers RanchThe Park at Walkers Ranch



San Antonio Region

The San Antonio market experienced quality expansion during 2007 with job growth

remaining strong at 2.3% which created 16,600 new jobs. Major employers include AT&T,

H.E.B Food Stores, United Service Automobile Association (USAA), and Baptist Health

System and the United States Military. San Antonio’s low cost of living, quality workforce, and

government incentives make it very appealing for corporate expansions and relocations. The

overall occupancy for the San Antonio MSA was 89.24% at the end of 2007, which compared to

89.57% at the end of 2006. During 2007 there were 3,035 new conventional units added, of which

2,312 were absorbed. We anticipate that San Antonio will continue to display above average

growth, which should continue to make it a strong rental market.

San Antonio

The Marquis at Rogers Ranch

The Marquis at DeerfieldThe Park at Walkers Ranch

Castle Hills

Windcrest

Alamo Heights

Kirby

BalconesHeights

Leon Valley

San AntonioInternationalAirport

10

410

41036

36

36

37

90

281

151

1604

1604

16

1535

421

R e g i o n n o : 3

t o t a l U n i t s : 886


s o U R c e s : M/PF Research




San Antonio: Third Quarter


Northwest San Antonio

The northwest San Antonio submarket is home to the most prosperous households in the metro area. Prestigious

neighborhoods, numerous parks, high quality schools, and multiple country clubs fill the Texas hill country of northwest

San Antonio. The area is home to many of the city’s best amenities, including shopping, entertainment, and transportation.

Central Park Mall and North Star Mall are home to San Antonio’s most renowned collection of national retailers including

Dillard’s, Macy’s and Saks Fifth Avenue. The Shops at La Cantera, a 1.3 million square foot shopping center opened in 2005

and includes Nordstrom, Neiman Marcus, Dillard’s and Foley’s. The City of San Antonio has purchased a 311-acre land

site for $50 million with plans to turn the land into the largest park in the city.

Northwest San Antonio experienced new deliveries of 555 units, although occupancy for the area held steady at

approximately 95%. There were a historically high number of new deliveries citywide in 2006 and 2007. The number of

new deliveries in northwest San Antonio is expected to be 1,086 in 2008. While job growth was healthy at 2.3% in 2007,

strong employment gains will be required to keep pace with the new developments in 2008.



The Marquis At Deerfield


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,953,943 $ 2,129,348 Mortgage Interest (895,434) (897,887) Estimated Depreciation (726,746) (829,422) Amortization (37,400) (37,400) Non-Recurring Repairs (0) 0 Non-Operating Expenses (110,878) (126,776) projected Taxable income / (Loss) $ 183,484 $ 237,862



Loan Information

Lender

loan Balance


Freddie Mac $ 15,440,000 5.72% April, 2011

Net Rental Income $ 3,368,695 $ 3,504,226 Other Income 297,494 312,102 Interest Income 22,157 19,800 Total Revenues $ 3,688,345 $ 3,836,128 Payroll & Benefits $ (437,846) $ (393,566) Marketing & Advertising (71,181) (70,167) Turnover Costs (64,209) (64,224) Repairs & Maintenance (67,438) (68,372) Professional Services (73,575) (80,953) General & Administrative (36,868) (45,436) Utilities (167,002) (158,458) Insurance (49,845) (42,600) Property Taxes (650,750) (663,420) Management Expenses (115,689) (119,584) Total Operating Expenses (1,734,402) (1,706,780)net Operating income $ 1,953,943 $ 2,129,348 Debt Service (Principal & Interest) $ (895,434) (897,887) Capital Expenditures (205,318) (545,964) Non-Operating Expenses (110,878) (126,776) Cash from Lender Reserves 80,455 0 Cash from/(to) Reserves (125,569) 238,079 distributable Cash Flow $ 697,199 $ 796,800 Limited partner share of distributable Cash Flow $ 697,199 $ 796,800


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Deerfield Assoc/Huebner Bitters Assoc. 17.05313% 39,278 48,566 118,894 135,879 Newport Coral Lake Assoc, Ltd 29.41272% 56,843 72,773 205,065 234,361 Harbor Cove/Deerfield Assoc, Ltd 21.67174% 39,462 51,278 151,095 172,680 Stonegate/Deerfield Assoc, Ltd 31.86241% 47,902 65,245 222,144 253,880 183,484 237,862 697,199 796,800


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.69

$ 1.73

$ 0.90

$ 0.32

$ 0.70

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.84

$ 1.71

$ 0.90

$ 0.67

$ 0.80



The Marquis At Rogers Ranch


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,257,491 $ 1,374,080 Mortgage Interest $ (989,582) $ (973,911) Lender Group Interest (55,835) (74,820) Estimated Depreciation (743,456) (756,434) Amortization 0 0 Non-Recurring Repairs 0 0 Non-Operating Expenses (93,787) (88,012) projected Taxable income / (Loss) $ (625,169) $ (519,096)



Loan Information

Lender

loan Balance


Freddie Mac $ 15,059,957 6.52% November, 2011

Net Rental Income $ 2,657,706 $ 2,776,901 Other Income 275,599 267,977 Interest Income 2,782 0 Total Revenues $ 2,936,086 $ 3,044,878 Payroll & Benefits $ (365,363) $ (327,825) Marketing & Advertising (53,474) (55,417) Turnover Costs (60,776) (55,618) Repairs & Maintenance (49,043) (40,342) Professional Services (62,001) (70,408) General & Administrative (40,273) (35,862) Utilities (241,526) (246,787) Insurance (39,207) (42,444) Property Taxes (657,616) (683,172) Homeowners Association Dues (16,711) (16,716) Management Expenses (92,605) (96,206) Total Operating Expenses (1,678,596) (1,670,798)net Operating income $ 1,257,491 $ 1,374,080 Debt Service (Principal & Interest) $ (1,244,749) $ (1,244,749) Lender Group Interest (55,835) (74,820) Capital Expenditures (218,015) (152,380) Non-Operating Expenses (93,787) (88,012) Cash from Lender Group 735,000 0 Cash from/(to) Reserves (380,106) 185,880 distributable Cash Flow $ 0 $ 0 Limited partner share of distributable Cash Flow $ 0 $ 0


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

Stonegate Austin-Rogers Ranch, LP 100.00000% (625,169) (519,096) 0 0 (625,169) (519,096) 0 0


Total Revenues

Operating Expenses

Debt Service


$ 2.94

$ 1.68

$ 1.30

$ 0.31

Total Revenues

Operating Expenses

Debt Service


$ 3.04

$ 1.67

$ 1.32

$ 0.24



The Park at Walkers Ranch


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ (3,322) $ 951,236 Mortgage Interest $ (145,297) $ (1,067,234) Lender Group Interest 0 (198,000) Estimated Depreciation (101,787) (566,002) Amortization (3,953) (17,452) Non-Recurring Repairs 0 0 Non-Operating Expenses (57,453) (148,109) projected Taxable income / (Loss) $ (311,811) $ (1,045,560)


Limited Partner Return on Outstanding Investment (ROI) (Class A) 0.00% 0.00%Limited Partner Return on Outstanding Investment (ROI) (Class B) 0.00% 7.00%Average Economic Occupancy 48.08% 70.23%Average Physical Occupancy 59.41% 81.27%Average Market Rent $ 816 $ 901 Loan Information

Lender

loan Balance


PNC Bank $ 15,598,027 4.93% August, 2013

Net Rental Income $ 257,710 $ 2,279,087 Other Income 18,554 160,348 Interest Income 1,586 0 Total Revenues $ 277,850 $ 2,439,435 Payroll & Benefits $ (70,793) $ (395,028) Marketing & Advertising (7,447) (80,547) Turnover Costs (8,663) (27,585) Repairs & Maintenance (25,975) (34,001) Professional Services (8,070) (58,864) General & Administrative (14,065) (31,247) Utilities (33,023) (179,276) Insurance (3,736) (71,964) Property Taxes (96,528) (535,376) Management Expenses (12,871) (74,311) Total Operating Expenses (281,172) (1,488,199)net Operating income $ (3,322) $ 951,236 Debt Service (Principal & Interest) $ (192,721) $ (1,067,234) Lender Group Interest 0 (198,000) Capital Expenditures (697,100) (2,127,652) Non-Operating Expenses (57,453) (148,109) Cash from Lender Group 2,200,000 0 Cash from/(to) Reserves (1,249,403) 2,589,758 distributable Cash Flow $ 0 $ 0 Limited partner share of distributable Cash Flow $ 0 $ 0


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Walkers Ranch IR, LP 49.69765% (164,915) (529,571) 0 0 CWS Walkers Ranch IR HCN, LP 21.67912% (66,329) (225,400) 0 0 CWS Walkers Ranch IR HCM, LP 8.67741% (26,459) (90,129) 0 0 CWS Walkers Ranch IR LM, LP 14.82854% (43,361) (152,165) 0 0 Private Trust* 5.11728% (10,748) (48,296) 0 0 WRLG One, L.P. (Class B) n/a 0 0 0 154,000 * Note: Depreciation is not included as depreciable basis is not known (311,811) (1,045,560) 0 154,000


Total Revenues

Operating Expenses

Debt Service


$ 0.28

$ 0.28

$ 0.19

$ 0.75

Total Revenues

Operating Expenses

Debt Service


$ 2.44

$ 1.49

$ 1.27

$ 2.28



R E g I o N N o . 4

Houston

The Marquis at Bellaire* • The Marquis on Eldridge Parkway* • The Marquis at Pin Oak Park*

The Marquis at Westchase* • The Marquis on Westheimer* • The Marquis on Memorial*

The Marquis on Briar Forest





Houston RegionHouston is among the fastest-growing and most diverse metropolitan areas in the nation. According to the latest

U.S. Census, Houston has a population of over two million people, making it the fourth-largest city in the nation and

the sixth-largest metropolitan area with 5.5 million people in the 10-county area. Houston's economy is continuing

to exhibit signs of strength and the MSA's job growth rate of 3.3% over the past 12 months was the fastest among

the nation's 12 most populous MSAs fueled in part by continued growth within the energy industry, international

trade through the Port of Houston, and the Texas Medical Center, the largest medical complex in the nation. This

steady stream of new employment opportunities pushed unemployment down to 3.8% at the end of October, besting

the statewide average of 3.9% and the national average of 4.4%. The metropolitan region's population base has

grown by an impressive 800,000 people (19.4%) from 2000 to 2006 ranking the area third in population growth

during the period. The Houston MSA population is expected to grow by another 2.9 million people by 2030. Healthy

in-migration and the youngest population of the nation's ten largest metro areas are major contributing factors

to this future population expansion.

Houston

HydePark

Coxville

Dessau

PasadenaBellaire

HuntersCreekVillage

BearCreekPark

HoustonHeights

NorthHouston

HighlandHeights

SouthHouston

EastHouston

JerseyVillage

CentralBusiness District

45

45

1010 10

610610

610

610

290

1831

275

734

360

288

225

71

2222

59

29059

6

1960

6

The Marquis on Memorial


The Marquis on Elridge ParkwayThe Marquis at Westchase

The Marquis on WestheimerThe Marquis at Bellaire

The Marquis at Pin Oak Park

R e g i o n n o : 4

t o t a l U n i t s : 2,329


s o U R c e s : US Census Bureau, Holiday Fenoglio Fowler, Real Estate Center at Texas A&M University,Energy Corridor Management District, Apartment Data Services




Houston: Third Quarter


Houston Energy Corridor

Houston’s Energy Corridor, home to The Marquis on Briar Forest, is strategically located along IH 10, midway between Beltway 8

and the Grand Parkway, and is comprised of two of Houston’s most dynamic business centers: The Energy Corridor Management

District (ECMD) and the Park 10 Regional Business Park. The Energy Corridor is home to multi-national and local energy companies

such as BP America, Shell Exploration and Production, ExxonMobil Chemical, ConocoPhillips, Citgo, Cabot Oil and Gas, and Global

Santa Fe. Other companies including Dow Chemical, Cardinal Health Care, Sysco, and Accenture are also located in the Corridor. The

Corridor currently contains over 16 million square feet of office space that is 98% occupied. The area has 60,000 employees, 2,000 hotel

rooms, 10,000 luxury apartment units, 1.0 million square feet of retail, and 1.4 million square feet of service center and distribution

space. Additionally, there have been numerous announcements of corporate expansions, relocations, and new office construction in the

submarket, including the recent announcements of Dow Chemical relocating its 1,000 Houston employees from central Houston to the

Energy Corridor and BP America relocating its 3,300-employee Chicago operations to its Energy Corridor campus.

The Energy Corridor submarket has approximately 1,000 units under construction and 300 units in the planning stages. Single-family

homes in the area begin around $250,000, significantly exceeding the Houston median price of $150,000. Newer developments range from

$500,000 to $2 million dollars. In addition to new office and hotel construction, there have been a tremendous number of high-end retail

developments that have occurred in the submarket as strong demographics and job growth have caught the attention of developers. The

new developments include countless restaurants, coffee houses, banks, L.A. Fitness, doctor’s offices, and a new super center anchored

by a Super Target that will be composed of seven as-of -yet unnamed anchors and close to 200,000 square feet of retail. Due to Houston’s

strong job growth since 2005, builders have been busy with over 17,000 units currently under construction and another 18,000 units

proposed. While increasing, this new supply remains at levels similar to those of 1999 and 2003. As new supply increases, job growth

will have to remain robust for the region’s apartment fundamentals to remain strong. As a result, we believe Houston remains a market

that must be watched closely, with specific focus on the strongest submarkets and employment centers. However, with a majority of

the Houston economy still focused on energy, international trade, and health care, combined with the sub-prime loan collapse forcing

people back into the renter pool, Houston should continue to provide some very compelling opportunities.





actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 75,762 $ 1,907,104 Mortgage Interest $ 0 $ (1,422,960) Estimated Depreciation (7,764) (93,168) Amortization 0 (8,034) Non-Recurring Repairs 0 0 Non-Operating Expenses (1,470) (185,653) projected Taxable income / (Loss) $ 66,528 $ 197,289


Limited Partner Return on Outstanding Investment (ROI) 0.00% 0.00%Average Economic Occupancy 68.50% 76.20%Average Physical Occupancy 79.50% 88.14%Average Market Rent $ 940 $ 1,009

Loan Information

Lender

loan Balance


PNC Bank $ 26,400,000 5.39% November, 2015

Net Rental Income $ 76,358 $ 3,654,027 Other Income 0 201,848 Interest Income 0 0 Total Revenues $ 76,358 $ 3,855,875 Payroll & Benefits $ 0 $ (390,600) Marketing & Advertising 0 (81,027) Turnover Costs 0 (123,303) Repairs & Maintenance 0 (45,989) Professional Services 0 (82,104) General & Administrative (417) (41,755) Utilities (180) (254,501) Insurance 0 (119,100) Property Taxes 0 (690,216) Management Expenses 0 (120,176) Total Operating Expenses (596) (1,948,771)net Operating income $ 75,762 $ 1,907,104 Debt Service (Principal & Interest) $ 0 $ (1,422,960) Capital Expenditures 0 (711,570) Non-Operating Expenses (1,470) (185,653) Cash from/(to) Reserves (74,292) 413,079 distributable Cash Flow $ 0 $ 0 Limited partner share of distributable Cash Flow $ 0 $ 0


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWSBF - Crystal, LLC 2.19759% 1,423 3,863 0 0 CWSBF - Diamond, LLC 6.33395% 4,175 12,025 0 0 CWSBF - Palm, LLC 21.72965% 14,402 42,223 0 0 CWSBF - Shadow, LLC 5.73889% 3,894 12,229 0 0 CWSBF - Sunset, LLC 17.70719% 11,782 34,956 0 0 CWSBF - UWH, LLC 14.58058% 9,523 26,642 0 0 CWSBF - Friendly, LLC 26.11397% 17,171 49,090 0 0 Private Trust* 5.59817% 4,159 16,260 0 0 * Note: Depreciation is not included as depreciable basis is not known 66,528 197,289 0 0


Total Revenues


$ 0.08

$ 0.08

Total Revenues

Operating Expenses

Debt Service


$ 3.86

$ 1.95

$ 1.42

$ 0.48



R E g I o N N o . 5

Atlanta

The Marquis at Briarcliff



Atlanta Region

Atlanta has long been the economic powerhouse of the southeast. The area’s quality of life,

extensive infrastructure and relatively low costs have maintained its attraction as the leading

net new-job generator and newcomer magnet over the last decade. The Atlanta MSA continues to

experience high levels of economic activity, including strong population growth and increases

in personal income. According to the U.S. Census Bureau, the Atlanta metro ranked #1 among

the nation’s 361 metro areas for new residents. The estimated metro population is 5.1 million

as of 2007 representing a 20.6% increase since 2000. This trend is projected to continue over

the next five years, as the Atlanta MSA is projected to grow by 11.5%, as compared to the U.S.

projected population growth of 4.8%. The growth trend is due in large part to median household

income that exceeds the national average by 17% combined with a median cost of living that is

6% below the national average.

Atlanta

The Marquis at Briarcliff

Tucker

Belvedere

Gresha Park

Vinings

North AtlantaSmyrna

NorthDecatur

2020

285

70

70

85

75

75

85

400

141

R e g i o n n o : 5



s o U R c e s : Metro Atlanta Chamber of Commerce,REIS, Portfolio & Property Research, U.S. Bureau of Labor Statistics, and Selig Center for Economic Growth




Atlanta: Third Quarter


Atlanta

CWS made a strategic decision to enter the Atlanta multifamily market as it is the economic focal point of the southeast and

one of the most resilient and diverse economic bases in the country. For the sixth year in a row, Atlanta ranked third in the

nation among cities with the most Fortune 500 headquarters. 22 companies headquartered in metro Atlanta are ranked

among the latest Fortune 1,000 companies, with 13 among the Fortune 500. More than 70% of all Fortune 1,000 companies

have a presence in metro Atlanta. Since 2000, metro Atlanta has averaged a net population increase of approximately

125,000 per annum. Demographers expect this trend to continue over the next five years, although the trend of in-migration

may moderate slightly. However, as a metro area with a youthful median age of 34, baseline population growth attributed

to natural change (births less deaths) is estimated at 55,000 annually. Preliminary estimates indicate that 52,000 jobs

were created in the Atlanta MSA in 2007, slightly more than the 42,000 new jobs created in 2006. The outlook for 2008 is

for a modest increase, as 57,000 jobs are expected to be added. Atlanta has not escaped unscathed from the difficulties

currently occurring in the housing industry. Multifamily housing permits dropped to 13,000 in 2007, slightly below the

average of the last five years. Multifamily additions to the housing supply are expected to be in the 8,000-10,000 units per

annum range over the next few years. This reduction in construction activity should help to keep demand strong for the

existing apartments.

The Marquis at Briarcliff is located in proximity to Atlanta’s largest employment centers. Furthermore, apartment

demand for in-fill locations is increasing as more residents seek to enhance their quality of life by minimizing commuting

time and expense. The construction of new apartments in the urban core of Atlanta will be limited due to the lack of

available zoned land. Additionally, those apartment communities that are built will be at a much higher basis due to

the high cost of land and construction materials. Therefore, well-located existing communities such as The Marquis at

Briarcliff should be able to compete effectively for residents in the coming years.



The Marquis At Briarcliff


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 613,175 $ 712,690 Mortgage Interest (532,340) (532,340) Lender Group Interest 0 (20,250) Estimated Depreciation (137,866) (155,477) Amortization (41,759) (55,608) Non-Recurring Repairs 0 0 Non-Operating Expenses (36,230) (51,161) projected Taxable income / (Loss) $ (135,019) $ (102,146)



Loan Information

Lender

loan Balance


Metropolitan Life Insurance Company $ 8,600,000 6.19% July, 2013

Net Rental Income $ 1,232,144 $ 1,344,174 Other Income 85,531 88,871 Interest Income 685 0 Total Revenues $ 1,318,360 $ 1,433,045 Payroll & Benefits $ (193,133) $ (211,120) Marketing & Advertising (52,553) (43,308) Turnover Costs (31,487) (35,044) Repairs & Maintenance (32,483) (30,526) Professional Services (27,914) (27,517) General & Administrative (50,256) (36,242) Utilities (88,015) (90,302) Insurance (20,701) (21,984) Property Taxes (157,238) (174,780) Management Expenses (51,404) (49,531) Total Operating Expenses (705,185) (720,355)net Operating income $ 613,175 $ 712,690 Debt Service (Principal & Interest) (532,340) (532,340) Lender Group Interest 0 (15,750) Capital Expenditures (114,259) (203,267) Non-Operating Expenses (36,230) (51,161) Cash from Lender Group 0 300,000 Cash from Lender Reserves 171,356 0 Cash from/(to) Reserves 67,298 (125,672)distributable Cash Flow $ 169,000 $ 84,500 Limited partner share of distributable Cash Flow $ 169,000 $ 84,500


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Briarcliff VOT Shoal, LP 12.69936% (24,754) (20,221) 21,462 10,731 CWS Briarcliff Plaza Villas WB, LP 15.68419% (63,690) (59,494) 26,506 13,253 CWS Briarcliff North Bluff WB, LP 13.21195% (30,139) (26,420) 22,328 11,164 CWS Briarcliff Pooles WB, LP 4.85573% (17,960) (16,653) 8,206 4,103 Private Trust* 5.47261% 156 2,110 9,249 4,624 Private Trust* 5.47261% 156 2,110 9,249 4,624 Private Trust* 42.60355% 1,213 16,423 72,000 36,000

* Note: Depreciation is not included as depreciable basis is not known (135,019) (102,146) 169,000 84,500


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 1.32

$ 0.71

$ 0.53

$ 0.15

$ 0.17

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 1.43

$ 0.72

$ 0.55

$ 0.25

$ 0.08



R E g I o N N o . 6

Charlotte

The Preserve at Ballantyne Commons • The Marquis at Carmel Commons The Marquis of Carmel Valley • The Marquis at Northcross*





Charlotte Region

The Charlotte MSA experienced strong employment growth during 2007, as the construction,

retail trade, and health services sectors continued to expand, resulting in new job growth

of 1.8%. Multifamily permits have risen to 5,834 units, the highest level posted since 2000.

The multifamily market held up well in 2007, as vacancy declined to 6.6% and rents grew by

2.9%. Moving forward, vacancy is expected to rise as product currently under construction is

delivered. However, vacancy will not rise to excessive levels, as the highest vacancy projected

through 2011 is 7.7%. Demand for apartments is expected to remain strong as local employment

continues to expand. Furthermore, becoming a homeowner is no longer as easy as it was just a

few short months ago. In the current environment, a larger percentage of households will find

that renting an apartment is the best solution for their housing needs.

Charlotte

BallantyneResort

Central Business District

MatthewsCharlotte / DouglasInternational Airport

521

521

521

51

51

51

51

27

27

27

74

74

74

77

77

77

16

16

16

218

485

49

49

The Marquis at Carmel Commons

The Marquis at Northcross

The Marquis of Carmel Valley

The Preserve at Ballantyne Commons

R e g i o n n o : 6

t o t a l U n i t s : 1,318


s o U R c e s : Greater Charlotte Chamber of Commerce,REIS, Portfolio & Property Research, U.S. Bureau ofLabor Statistics, U.S. Census Bureau




Charlotte: Third Quarter


Southeast Charlotte

The southeast Charlotte submarket has become the premier location in the Charlotte MSA during the past decade due

to its quality of life, including the best schools, recreation, shopping, and dining. The Marquis at Carmel Commons, The

Marquis of Carmel Valley, and The Preserve at Ballantyne Commons are located in this area.

Ballantyne Corporate Center is a 2,000-acre master planned community designed to offer a live/work/play lifestyle.

Ballantyne Corporate Park has over two million square feet of office space at this time and has zoning in place to

accommodate an additional three million square feet. Prominent companies such as SPX Corporation, ESPN, Bank of

America, and The Equitable Life Assurance Society have offices in the park. Southeast Charlotte offers a broad variety

of shopping destinations, including SouthPark Mall, Carolina Place Mall, Ballantyne Village, The Arboretum, Toringdon

Market, and Toringdon Circle. There are also a number of country clubs in southeast Charlotte, including Ballantyne,

Carmel, Quail Hollow, and TPC at Piper Glen.

The southeast Charlotte submarket had 214 units delivered and absorption of 102 units in 2007. Three new communities

totaling 575 units are expected to be delivered in 2008. In 2007, the submarket’s occupancy rate improved from 94% to

95%, while the overall Charlotte metropolitan posted occupancy of 93.4%. The three CWS communities located within the

southeast Charlotte submarket achieved rent growth for both renewals and new prospects during the last half of 2007.

With city-wide deliveries of 3,400 units anticipated in 2008, a vacancy increase of approximately 1.0% is projected. The

southeast Charlotte submarket is expected to see a similar vacancy increase. However, overall market conditions should

remain strong, allowing rents to grow at 3.0% to 3.5% during 2008.



The Marquis at Carmel Commons


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,862,660 $ 1,953,367 Mortgage Interest $ (1,243,924) $ (1,223,355) Estimated Depreciation ($737,046) (747,608) Amortization (249,627) (184,174) Non-Recurring Repairs (0) 0 Non-Operating Expenses ($89,137) (109,806) projected Taxable income / (Loss) $ (457,074) $ (311,576)



Loan Information

Lender

loan Balance


Nomura Credit & Capital $ 21,000,000 5.73% April, 2014

Net Rental Income $ 2,949,500 $ 3,113,305 Other Income 250,282 257,018 Interest Income 11,779 0 Total Revenues $ 3,211,562 $ 3,370,323 Payroll & Benefits $ (428,278) $ (439,858) Marketing & Advertising (56,695) (65,325) Turnover Costs (80,809) (84,316) Repairs & Maintenance (35,759) (37,092) Professional Services (78,690) (80,052) General & Administrative (44,172) (48,150) Utilities (164,572) (171,653) Insurance (43,998) (49,560) Property Taxes (312,016) (332,712) Management Expenses (103,912) (108,238) Total Operating Expenses (1,348,901) (1,416,956)net Operating income $ 1,862,660 $ 1,953,367 Debt Service (Principal & Interest) $ (1,295,561) $ (1,223,355) Capital Expenditures (322,923) (271,209) Non-Operating Expenses (89,137) (109,806) Cash from Lender Reserves 24,427 0 Cash from/(to) Reserves (45,026) 21,952 distributable Cash Flow $ 134,440 $ 370,949 Limited partner share of distributable Cash Flow $ 134,440 $ 370,949


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Lamplighter TX-Carmel Valley II, LP 28.55835% (133,022) (94,086) 38,394 108,312 CWS Stonegate Arlington-Carmel Valley II, LP 15.45695% (66,779) (40,723) 20,780 58,537 Carmel Valley II, LP 42.61746% (202,174) (144,071) 57,295 156,075 CWS Stonegate Austin-Carmel Valley II, LP 13.36724% (55,099) (32,695) 17,971 48,025 LLTX Lamplighter TX - Carmel Valley II, L.P.*** (166,737) (115,293) 48,536 133,921 ***Includes distributions from limited partner interest in all above listed partnerships. (457,074) (311,576) 134,440 370,949


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.21

$ 1.35

$ 1.30

$ 0.42

$ 0.13

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.37

$ 1.42

$ 1.22

$ 0.38

$ 0.37



The Marquis of Carmel Valley


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 2,503,010 $ 2,626,246 Mortgage Interest $ (1,660,750) $ (1,665,300) Estimated Depreciation (923,574) (945,199) Amortization (115,232) (86,308) Non-Recurring Repairs (0) 0 Non-Operating Expenses (107,807) (140,679) projected Taxable income / (Loss) $ (304,354) $ (211,240)



Loan Information

Lender

loan Balance


Nomura Credit & Capital $ 28,000,000 5.85% February, 2013

Net Rental Income $ 3,806,641 $ 3,994,109 Other Income 279,559 309,838 Interest Income 19,206 0 Total Revenues $ 4,105,407 $ 4,303,947 Payroll & Benefits $ (462,194) $ (481,172) Marketing & Advertising (57,491) (66,925) Turnover Costs (95,023) (91,788) Repairs & Maintenance (57,647) (53,244) Professional Services (91,344) (92,825) General & Administrative (46,750) (51,837) Utilities (201,550) (206,203) Insurance (59,738) (75,120) Property Taxes (398,559) (424,368) Management Expenses (132,099) (134,218) Total Operating Expenses (1,602,397) (1,677,701)net Operating income $ 2,503,010 $ 2,626,246 Debt Service (Principal & Interest) $ (1,660,750) $ (1,665,300) Capital Expenditures (357,982) (319,162) Non-Operating Expenses (107,807) (140,679) Cash from Lender Reserves 720,033 0 Cash from/(to) Reserves (557,073) 58,307 distributable Cash Flow $ 539,432 $ 559,412 Limited partner share of distributable Cash Flow $ 539,432 $ 559,412


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Carmel Valley Assoc, LP 62.02000% (254,494) (196,306) 334,555 346,947 CWS Carmel Valley 97, LP 6.82100% (18,612) (12,204) 36,795 38,157 CWS Stonegate Austin-Carmel Valley, LP 31.15900% (31,248) (2,729) 168,081 174,307 (304,354) (211,240) 539,432 559,412


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 4.11

$ 1.60

$ 1.66

$ 0.47

$ 0.54

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 4.30

$ 1.68

$ 1.67

$ 0.46

$ 0.56



The Preserve At Ballantyne Commons


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,957,393 $ 2,118,687 Mortgage Interest (1,307,200) (1,327,957) Lender Group Interest 0 (23,625) Estimated Depreciation (615,726) (646,211) Amortization (126,168) (130,871) Non-Recurring Repairs (0) 0 Non-Operating Expenses (118,475) (122,541) projected Taxable income / (Loss) $ (210,175) $ (132,518)



Loan Information

Lender

loan Balance


Jefferson-Pilot Life Insurance Company $ 21,500,000 6.08% September, 2011

Net Rental Income $ 2,991,043 $ 3,182,213 Other Income 184,256 199,835 Interest Income 5,515 0 Total Revenues $ 3,180,814 $ 3,382,048 Payroll & Benefits $ (356,012) $ (356,134) Marketing & Advertising (51,012) (55,270) Turnover Costs (71,933) (67,803) Repairs & Maintenance (39,642) (43,172) Professional Services (81,614) (84,059) General & Administrative (43,434) (45,623) Utilities (129,628) (143,755) Insurance (45,921) (48,888) Property Taxes (302,319 ) (311,208) Management Expenses (101,907) (107,449) Total Operating Expenses (1,223,422) (1,263,361)net Operating income $ 1,957,393 $ 2,118,687 Debt Service (Principal & Interest) $ (1,307,200) $ (1,391,512) Lender Group Interest 0 (18,375) Capital Expenditures (224,194) (494,032) Non-Operating Expenses (118,475) (122,541) Cash from Lender Group 0 350,000 Cash from Lender Reserves 300,224 0 Cash from/(to) Reserves (311,297) (103,427)distributable Cash Flow $ 296,450 $ 338,800 Limited partner share of distributable Cash Flow $ 296,450 $ 338,800


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

CWS Stonegate Arlington-Ballantyne, LP 6.34510% (12,486) (7,222) 19,644 22,450 CWS Lamplighter TX-Ballantyne, LP 10.73990% (39,044) (30,137) 33,250 38,000 CWS Crystal Lake-Ballantyne, LP 3.89000% (17,667) (14,439) 11,421 13,053 CWS Diamond Valley-Ballantyne, LP 4.92220% (14,401) (10,397) 14,452 16,517 CWS Friendly Village-Ballantyne, LP 18.91040% (50,053) (36,397) 55,522 63,454 CWS Palm Valley-Ballantyne, LP 15.61900% (32,967) (20,023) 45,859 52,410 CWS Shadow Hills-Ballantyne, LP 5.32930% (10) 3,838 15,647 17,882 CWS Sunset-Ballantyne, LP 13.04480% (20,839) (11,419) 38,301 43,772 CWS Univ Winterhaven-Ballantyne, LP 14.28750% (50,739) (39,345) 41,949 47,942 Private Trust* 2.98020% 12,086 14,238 8,750 10,000 Private Trust* 3.93160% 15,945 18,784 11,655 13,320 * Note: Depreciation is not included as depreciable basis is not known (210,175) (132,518) 296,450 338,800


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.18

$ 1.22

$ 1.31

$ 0.34

$ 0.30

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 3.38

$ 1.26

$ 1.41

$ 0.62

$ 0.34



R E g I o N N o . 7

Raleigh

The Marquis at Crossroads • The Marquis at Preston*

The Marquis at Silverton* • The Marquis on Edwards Mill*The Marquis at Cary Parkway*





Raleigh Region

The Raleigh-Cary MSA has a diverse employment base consisting primarily of the technology,

government, biotechnology, and education sectors. The local economy continues to grow, with

the rate of expansion estimated at 1.8% in 2007. Raleigh is consistently ranked among the

nation’s best places to live and work. In May of 2007, Forbes ranked Raleigh as the top metro

for Business and Careers; sister city Durham ranked seventh. Multifamily units permitted in

2007 are at virtually the same level as in 2006, as activity for both years came in at just under

4,000 units. While the vacancy rate in Raleigh has been higher than ideal for the past several

years, the 2008 outlook calls for vacancy reductions with rents growing at a moderate pace.

Raleigh

Durham

The Marquis at Crossroads

The Marquis at Preston

The Marquis at Edwards Mill

The Marquis on Cary Parkway

The Marquisat Silverton

Raleigh-DurhamInternationalAirport

NorthCarolinaStateUniversity

New HopeMorrisville

40

540

440

64

15

70

70401

401

1

1

55

147

98

50

R e g i o n n o : 7

t o t a l U n i t s : 1,544


s o U R c e s : Greater Raleigh Chamber of Commerce, REIS, Portfolio & Property Research, U.S. Bureau of Labor Statistics, and U.S. Census Bureau




Raleigh: Third Quarter


Southwest Raleigh

The southwest Raleigh submarket includes Cary, Research Triangle Park (RTP), and Raleigh International Airport.

Created in 1959, the 7,000-acre RTP is the world’s largest research park, attracting world-class research and development

companies in science and technology. RTP employment tops 49,000 (including contract workers) with an annual payroll of

$2.7 billion. The leading employers in RTP (all with 2,500 employees or more) are IBM, GlaxoSmithKline, Cisco Systems,

Nortel Networks, and RTI International. Another major employer in Cary is the SAS Institute, the leader in business

intelligence and predictive analytics software. Employing over 4,000 in Cary, the SAS campus includes two childcare

centers, an eldercare information and referral program, an employee health care center, wellness programs, a 58,000

square foot recreation center and many other work-life programs. This has led SAS to frequently be included on the list of

the best places to work in the nation.

The area is well served by some of the best schools in the metro and the state. Shopping venues are numerous and include

Cary Town Center, a regional mall with more than one million square feet and anchored by JCPenney, Sears, Dillards’,

Macy’s, and Belk. Superior access to all parts of the metro area is provided by major freeways including, I-40, U.S. 1, and

the I-440 Beltline. The southwest Raleigh submarket is the second largest in the area with over 29,000 apartment units.

In 2007, unit deliveries totaled 1,834 units, outpacing absorption of 1,121 units. As a result, vacancy in the submarket

increased to 9.5%. Deliveries are expected to decline in 2008, with only 848 units scheduled for completion. Absorption

is projected to be 749 units in 2008, so vacancy is not expected to decline until 2009. However, the overall Raleigh market

is in better balance than it was in 2002 when vacancy peaked at 13%. Despite vacancy in excess of ideal levels, rents are

expected to advance by 2% to 3% in 2008, a stronger level of growth than expected for the metro Raleigh market. We expect

southwest Raleigh to continue to beat metro-wide performance due to its proximity to major employment centers and its

high quality of life.



The Marquis At Crossroads


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 1,782,698 $ 1,877,997 Mortgage Interest $ (1,271,794) $ (1,250,215) Lender Group Interest (102,474) (108,490) Estimated Depreciation (661,726) (663,301) Amortization (17,325) (18,900) Non-Recurring Repairs (0) 0 Non-Operating Expenses (94,606) (90,888) projected Taxable income / (Loss) $ (365,227) $ (253,796)



Loan Information

Lender

loan Balance


Prudential Multifamily Mortgage $ 17,652,554 7.15% January, 2011 Marquis at Crossroads Lender Group $ 1,084,896 10.00% December, 2009

Net Rental Income $ 2,636,693 $ 2,777,465 Other Income 304,097 329,418 Interest Income 3,586 0 Total Revenues $ 2,944,376 $ 3,106,883 Payroll & Benefits $ (319,570 ) $ (345,609) Marketing & Advertising (39,071) (37,587) Turnover Costs (57,492) (60,310) Repairs & Maintenance (34,230) (39,489) Professional Services (63,695) (69,829) General & Administrative (47,758) (45,387) Utilities (212,537) (211,120) Insurance (43,828) (50,328) Property Taxes (246,062) (272,120) Management Expenses (97,434) (97,107) Total Operating Expenses (1,161,678) (1,228,886)net Operating income $ 1,782,698 $ 1,877,997 Debt Service (Principal & Interest) $ (1,563,827) $ (1,563,827) Lender Group Interest (102,474) (108,490) Capital Expenditures (213,682) (115,841) Non-Operating Expenses (94,606) (90,888) Cash from Lender Group 260,999 0 Cash from Lender Reserves 354,148 0 Cash from/(to) Reserves (423,256) 1,048 distributable Cash Flow $ 0 $ 0 Limited partner share of distributable Cash Flow $ 0 $ 0


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

Edgecreek-Crossroads, LP 50.57689% (191,934) (139,040) 0 0 Friendly Village-Crossroads, LLC 33.33216% (115,160) (74,471) 0 0 TIG-Crossroads, LP 6.13139% (23,599) (16,165) 0 0 Tropicana-Crossroads, LP 4.10527% (15,806) (11,513) 0 0 FVLA-Crossroads, LP 5.85429% (18,729) (12,607) 0 0 (365,227) (253,796) 0 0


Total Revenues

Operating Expenses

Debt Service


$ 2.94

$ 1.16

$ 1.67

$ 0.31

Total Revenues

Operating Expenses

Debt Service


$ 3.11

$ 1.23

$ 1.67

$ 0.21



R E g I o N N o . 8

Denver

Marquis at the Parkway* • The Marquis at Town Centre





Denver Region

Denver remains an attractive investment market and offers a lifestyle that attracts young,

educated workers and is also home to ten Fortune 500 companies. Denver has experienced

a reasonable amount of job growth at 1.6% as of November 2007. A prolonged construction

slump and high foreclosure rates have allowed vacancy to fall to 7.0%. Demand was steady in

2007 however, construction is on the rise with approximately 3,200 units slated for completion

in 2008.

DenverMarquis at the Parkway

The Marquis at Town Centre

DenverInternationalAirport

DenverTech Center

AuroraLakewood

Westminster

Broomfield

Thornton

Englewood

70

225

25

270

76

70

285

6

40

36

470470

R e g i o n n o : 8



s o U R c e s : Property & Portfolio Research, Inc.,REIS, Broomfield Chamber of Commerce




Denver: Third Quarter


Broomfield

The Broomfield submarket has made an impressive recovery from the brutal technology downturn starting in 2000, which

left many of the new office buildings along the US 36 corridor tarnished by never before seen vacancies. The Broomfield

submarket experienced significant economic development and growth during the 1990’s due mostly to the growth of

technology employers such as Sun Microsystems and Level 3 Communications. The US 36 corridor and the Interlocken

Advanced Technology Environment, a 963-acre business park are home to IBM, Sun Microsystems, Ball Corporation,

Level 3 Communications, Seagate Technology, Hunter Douglas and ValleyLab. Approximately 700 firms employ more

than 30,000 employees in high-tech research, manufacturing, and information technology. The submarket is also home to

the 215-acre ($400 million) multi-use development know as Arista. Arista is a high activity commercial, residential, and

entertainment area that will be the energy epicenter of Denver’s northwest corridor. The Broomfield Event Center (BEC),

a $45 million entertainment venue, is a major anchor for the Arista. The BEC is host to concerts and sporting events, which

opened in 2006. Arista began development in the first quarter of 2007. The Marquis at Town Centre provides residents

with convenient access to downtown Denver and Boulder.

The Broomfield submarket experienced positive absorption due to the lack of new construction. Occupancy rates have

improved from an average of 91% to 94% for the year ending in December 2007. New units under construction in the Broom-

field/Interlocken submarkets total 912 units, with 794 of the units being built in the new Arista urban development. The

Denver apartment market outlook for growth is healthy but not robust. However, Denver has a diverse set of economic driv-

ers, including aerospace, oil and gas, technology, biotech, and environmental research, which should provide stability.



The Marquis At Town Centre


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 2,119,476 $ 2,263,054 Mortgage Interest $ (1,902,518) $ (1,897,680) Lender Group Interest (311,207) (345,618) Estimated Depreciation (909,812) (906,945) Amortization (30,986) (32,240) Non-Recurring Repairs (0) 0 Non-Operating Expenses (118,159) (100,647) projected Taxable income / (Loss) $ (1,153,205) $ (1,020,076)



Loan Information

Lender

loan Balance


Freddie Mac $ 23,573,665 8.05% August, 2010 Town Centre Lender Group 1 $ 2,215,803 11.00% December, 2010 Town Centre Lender Group 2 $ 1,016,597 10.00% August, 2010

Net Rental Income $ 2,981,677 $ 3,179,874 Other Income 363,539 372,491 Interest Income 7,694 0 Total Revenues $ 3,352,910 $ 3,552,365 Payroll & Benefits $ (379,188) $ (393,439) Marketing & Advertising (96,121) (83,122) Turnover Costs (29,716) (29,038) Repairs & Maintenance (26,165) (33,398) Professional Services (59,366) (62,268) General & Administrative (40,875) (40,731) Utilities (233,569) (266,831) Insurance (53,726) (52,752) Property Taxes (203,601) (215,160) Management Expenses (111,106) (112,571) Total Operating Expenses (1,233,433) (1,289,310)net Operating income $ 2,119,476 $ 2,263,054 Debt Service (Principal & Interest) (1,902,518) (1,897,680) Lender Group Interest (311,207) (345,618) Capital Expenditures (306,355) (174,750) Non-Operating Expenses (118,159) (100,647) Cash from Lender Group 1,016,597 0 Cash from Lender Reserves 28,331 0 Cash from/(to) Reserves (526,166) 255,641 distributable Cash Flow $ 0 $ 0 Limited partner share of distributable Cash Flow $ 0 $ 0


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

TIG-Town Centre, LP 3.90505% (46,502) (39,073) 0 0 Tropicana-Town Centre, LP 3.90505% (46,269) (41,306) 0 0 FVLA-Town Centre, LP 2.59133% (28,288) (24,995) 0 0 Creekside-Town Centre, LP 38.86024% (574,276) (524,891) 0 0 Metric-Town Centre, LP 23.05870% (169,549) (140,245) 0 0 Shadowood-Town Centre, LP 24.39020% (280,315) (245,741) 0 0 Private Trust* 3.28943% (8,006) (3,826) 0 0 * Note: Depreciation is not included as depreciable basis is not known (1,153,205) (1,020,076) 0 0


Total Revenues

Operating Expenses

Debt Service


$ 3.35

$ 1.23

$ 2.21

$ 0.42

Total Revenues

Operating Expenses

Debt Service


$ 3.55

$ 1.29

$ 2.24

$ 0.28



R E g I o N N o . 9

Canada

Crestway Bays • Crispen Bays • Breakaway Bays





Canada Region

Surrey is British Columbia’s second largest city by population after Vancouver City. By 2011,

the City of Surrey estimates a total population of 500,646. British Columbia’s gross domestic

product (GDP) is forecasted to grow 3.4% during 2008 with employment growth of 2.2%. In

Fraser Valley, housing prices during 2007 increased on average by 11.4% for single-family

homes, 12.7% for townhouses, and 14.9% for condominiums/apartments when compared to

December 2006. Demand for housing in the area is expected to be at above-average levels and

occupancy rates at the communities should improve in 2008.

British Columbia

Crestway Bays

Crispen Bays

Breakaway Bays

Semiahmoo Bay

White Rock

Surrey

Cloverdale

Langley

Delta

15

10

10

99A

99

91

1

R e g i o n n o : 9



s o U R c e s : Canadian National and British Columbia, BC Stats


o v E R v I E W

Canada Manufactured Housing

The Neighborhood

Breakaway Bays – The proposed “Big Box” Mall complex, approximately 10 minutes away from Breakaway Bays, (anchors

such as Walmart & Home Depot) is well underway with Home Depot open to the public. Many smaller commercial outlets

are in various stages of completion. The large townhouse project continues to grow with many homes sold and occupied.

The 100-acre subdivision with approximately 900 homes in West Morgan Heights is well underway (started in 2006 with

completion expected in 2009). Just over from West Morgan Heights is another large residential complex, Grandview

Heights, which is under construction and expected to absorb 30,000 residents within the next eighteen years. Stokes Pit, a

former green recycling area, fifteen minutes northeast of Breakaway Bays is actively progressing with light commercial

development. With all of this new development, the City of Surrey is also widening streets and upgrading infrastructure.

South Point Mall and adjacent strip malls are now complete. This area is a popular shopping center catering to mid- to

upper-income bracket households. A large multi-unit assisted living complex located on the King George Corridor

less than five minutes from Breakaway Bays is complete and occupied. Another large assisted living complex is under

construction just minutes away from South Point Mall. Scheduled completion is summer 2008.

The redevelopment program on east beach is slowly continuing. A large hotel has replaced some old homes and now

hosts smaller convention and banquet centers. Buildings are getting a facelift to match specific building schemes. Small

offices and boutiques are populating these buildings. Currently under construction in downtown White Rock is a twin,

twenty-two story, luxury condominium project. Units are being sold in the range of $500,000 and up. All through White

Rock, any redevelopment necessitates the demolition of existing residential/commercial structures.

Crestway & Crispen Bays – Three kilometers north of Crestway and Crispen Bays, construction proceeds on the Sky

Towers (formerly called Infinity 2 at Central City). It will ultimately consist of five world-class residential towers with 1,400

units. Tower 1 (presold) should be completed February 2008. Towers 2 & 3 (presold) are scheduled for completion in 2009.

According to economic data from the City of Surrey, new commercial & industrial construction, up to and including

December 2007, has created 1.24 million sq. ft. of commercial development valued at $164 million plus 1.43 million sq. ft. of

industrial development valued at $108 million.


o v E R v I E W


The Residential Housing Market

The expansion in the BC Housing sector should continue without overheating. British Columbia’s growing economy,

record low unemployment, real income growth, low inflation and interest rate environment and the global demand for

BC’s commodities should boost domestic demand for both residential and non-residential structures. Resale and new

home prices should continue to increase but at a slower pace in 2008.

The Provincial Liberal Government has encouraged development, growth, financial stability within the Province

of BC and developers have embraced this attitude. As the developers are using up all the available vacant land, new de-

velopment is forced to move further into the suburban areas. The centralized location of Crispen & Crestway provides

affordable living in a desirable location. Breakaway is in a suburban area providing alternative upscale lifestyle for a

semi-retiring population.

As shown below, the median selling price in Surrey has been steadily increasing:

2005 2006 2007

Residential $381,000 $467,000 $512,000

Townhouse $242,500 $286,000 $320,000

Condominiums $147,777 $189,000 $200,000

Mortgage Rates

Long-term closed mortgage rates (five-year) are currently 7.49% in 2008 compared to 5.04% in 2007 whereas variable,

open rates have changed from 3.49% in 2007 to 5.30% in 2008. The Bank of Canada rate at the end of 2007 was 4.5%, a .25%

increase from 2006. By mid-January 2008, the rate was lowered to 4.25%.

The Competition

During 2007, townhouses and condominium building permits totaled 4,183 units. Of those units 1,769 were townhouses

and 2,414 were condominiums/apartments. For 2007, the total value of residential building permits was $1.04 billion

compared to $962 million (2006).

The developers continue to take advantage of the narrow lot concept “33 feet wide” subdivisions approved six years

ago. The narrow lot approval opens the door for the new type of home ownership since land is the most expensive portion

of purchasing a home. These new-style subdivisions make homeownership more affordable and have developed new

competition for the potential residents of our communities.

There were no new manufactured housing projects built and, as of today, none are being proposed for 2008.


o v E R v I E W


Operational Activity The consolidated NOI for 2008 is projected to be $3,772,888. This is a .6 % increase over the 2007 NOI of $3,748,814. The 2008

property taxes are projected to increase by 7.81%.

The primary operational focus is increasing revenues by maximizing rental increases and increasing occupancy

when there is vacancy in the communities. The BC Residential Tenancy Board allows a maximum site rental increase of

3.7% plus the increase of government levies (electric, property taxes, utilities) for 2008. Our Canadian affiliate, Synergy

Service Realty, continues to work in all the communities to sell both inventory model homes and brokerage homes.

With the continual price increase in average selling prices of residential homes, townhouses and condominiums, the

manufactured home community lifestyle is becoming more appealing and affordable to buyers. Synergy offers a “lease to

own” option in Crestway Bays on selected previously owned homes that can immediately increase the community’s rental

revenue by generating additional revenues from selling these inventory homes over a short period of time. In 2008, all the

communities will continue to offer the residents qualifying referral programs. In 2007, there were three referrals from

this program that resulted in a new resident. There was a net increase of two resident occupied spaces during 2007. There

are only nine vacant spaces (none at Breakaway, 1 at Crispen, 8 at Crestway) left in the Canadian portfolio of 656 spaces.

The Canadian Communities will continue to provide value and service to the residents in addition to maintaining the

“high” standards established by CWS communities.

The secondary operational focus for 2008 is to continue to control expenses. The cost savings measures are being

achieved through preventative maintenance and by closely adhering to the 2008 budgets.

The Manufactured Housing Market The manufactured housing industry in BC continues to see a steady increase in the construction and delivery of new

homes. During 2007, the multi-section shipments in the BC area were up from 501 units in 2006 to 528 units. The single-

sections shipped during 2007 were up from 317 units in 2006 to 450 units. During 2006/2007, CWS communities sold three

new homes. Two in Breakaway Bays and one in Crispen Bays.

In 2007, there was little change in vacancies and the lack of demand for the aging 12’ wide homes is still an issue.

Occupancy for 12’ wide homes during 2007 was 55.3%. Other manufactured housing communities with substantially

lower rents, ranging between $380 and $680 per month, compete for our customers. The average single section occupancy

rate for manufactured home communities in our market area is 99.9 % as reported in the 2007 Market Survey.

In 2007, the resident occupancy in the CWS Communities (Breakaway, Crestway, Crispen Bays) increased by 2 to 646

of 656 home sites.


o v E R v I E W


Asset ManagementThe asset management plan for 2008 remains fundamentally the same as it was in 2007. Homes suited to fill vacant home

sites in our communities will be brought in. Our team will work with prospective residents to pre-sell these homes before

they are sited in the community. The team will also monitor homes that might leave a community and will present offers

to purchase those homes if they are desirable. Some of the homes we purchase may be relocated within our communities,

especially if the site will suit a multi-section home and it makes economic sense. Double section homes are more appealing

to today’s homebuyers.

For 2008, we will continue to try and attract residents that are being forced to relocate by redevelopment. We will also

be searching for homeowners wanting to relocate from other manufactured home communities in the area. Currently,

large developers are applying for high-density redevelopment permits in a number of existing manufactured home com-

munities. The Canadian team is targeting these potential residents to relocate or upgrade to Crestway or Crispen Bays.

At Breakaway Bays the focus is selling new homes when a vacant home site becomes available.

Continued increases in selling prices in townhouses, condominiums and single-family homes has reached a point

where buyers are exploring manufactured housing as a more affordable option. Our marketing program ensures that

these potential buyers are aware of the affordability of the manufactured home lifestyle.



Canadian Manufactured Housing Communitiesin Canadian dollars


actualearnings

year 2007

Projectedearnings


actual

earnings

year 2007

Projected

earnings

year 2008

Net Operating Income / (Loss) $ 3,748,814 $ 3,772,888 Mortgage Interest (1,742,266) (1,358,160) Estimated Depreciation 0 0 Amortization 0 0 Non-Recurring Repairs (0) (1,815) Non-Operating Expenses (539,970) (107,946) projected Taxable income / (Loss) $ 1,466,578 $ 2,304,967


Limited Partner Return on Outstanding Investment (ROI) N/A N/AAverage Economic Occupancy 92.12% 94.49%Average Physical Occupancy 97.96% 98.44%Average Market Rent $ 710 $ 724

Loan Information

Lender

loan Balance


Great West Life Assurance Company $ 26,350,000 5.21% November, 2012

Net Rental Income $ 5,150,369 $ 5,381,743 Other Income 23,390 15,134 Interest Income 1,458 480 Total Revenues $ 5,175,217 $ 5,397,357 Payroll & Benefits $ (390,140) $ (423,943) Marketing & Advertising (11,894) (11,487) Turnover Costs 0 0 Repairs & Maintenance (36,000) (35,852) Professional Services (159,944) (135,823) General & Administrative (86,329) (85,343) Utilities (392,688) (464,394) Insurance (48,527) (52,289) Property Taxes (130,275) (238,298) Homeowners Association Dues 0 (120) Management Expenses (170,607) (176,921) Total Operating Expenses (1,426,403) (1,624,469)net Operating income $ 3,748,814 $ 3,772,888 Debt Service (Principal & Interest) $ (1,922,773) $ (1,358,160) Capital Expenditures (81,703) (108,335) Non-Operating Expenses (539,970) (107,946) Net Cash From Strata Lot Sales 164,881 0 Proceeds from Refinance 608,173 0 Net Cash From Home Sales (26,344) (39,438) Cash from/(to) Reserves (276,197) (159,009)distributable Cash Flow $ 1,674,881 $ 2,000,000 Limited partner share of distributable Cash Flow $ 414,993 $ 1,000,000


ownership

Percentage

2007

Projected

taxable

income

2008

Projected

taxable

income

2007 actual

limited

Partner

Distributions

2008 Projected

limited

Partner

Distributions

Canadian Mobile Home Communities 37.50780% 550,081 864,542 155,655 375,078 Hermitage Oaks of Texas 16.15200% 236,882 372,298 67,030 161,520 Irvine Meadows Associates 46.34020% 679,615 1,068,126 192,309 463,402 1,466,578 2,304,967 414,993 1,000,000


Total Revenues

Operating Expenses

Debt Service


Distributions

$ 5.18

$ 1.43

$ 1.92

$ 0.15

$ 0.41

Total Revenues

Operating Expenses

Debt Service


Distributions

$ 5.40

$ 1.62

$ 1.36

$ 0.41

$ 1.00


CWS CAPITAL PARTNERS LLC 2007 Supplemental Annual Report · 2007. 1. 6. · CWS Capital Partners...

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Transcript of CWS CAPITAL PARTNERS LLC 2007 Supplemental Annual Report · 2007. 1. 6. · CWS Capital Partners...