Welcome to America 2030™ Equity An American Private Equity

Welcome to America 2030™ Equity

An American Private EquitySponsor of Institutional Grade U.S. Real Estate Investments

Understanding and Investing in American Multifamily Apartment Buildings, The Greatest Asset Type of the

Real Estate Asset Class

• Diversification. U.S. real estate’s stability offers mitigation against rapid but non-sustainable markets.

• Openness, Size and Selection. The U.S. contains one-third of the world’s institution-grade real estate and has no barriers to foreign investment.

• Higher Yields. Current U.S. Cap rates average 40% higher than current European and Asian rates.

• Inflation Hedge. U.S. real estate has historically outpaced U.S. inflation.

Why Buy American Real Estate?

What is a Representative Chicago Multifamily Investment?

Chicago, IllinoisCook CountyProperty Type: MultifamilyProperty Class: ASub Type: High-RiseNo. Units: 306Building Size: 204,185 SFOccupancy: 95%Year Built: 1989Sale Price: $91,250,000Price/Unit: $298,000

Neither America 2030*, nor any related parties, affiliates, officers, employees, shareholders, partners or representatives were involved in the transactions listed herein. These are examples of the investments which America 2030* will purchase but no guarantee is made that a building identical or similar to this building will be purchased.

What is a Representative Southwest U.S. Multifamily Investment?

Chandler, AZMaricopa CountyProperty Type: MultifamilyProperty Class: A Sub Type: Garden/Low-RiseNo. Units: 352Year Built: 2005Sold Price: $58,000,000Price/Unit: $164,773 Occupancy: 94%


What is a Representative Texas U.S. Multifamily Investment?


289-Unit Class A Community – Houston, Texas

356-Unit Class AAA Garden Style Multifamily - Naples, Florida

241 Unit Multifamily--Arlington, Virginia (Metropolitan DC)

• Slow-Going Economy? Necessary to Call it a Recession?• America is a Country we Love to Hate, So Let’s Bash It!• America is the 800 pound Gorilla.• Subprime is Limited to 1% of Housing . . . Soooooo What?• HUD Predicts that Oversupply of Housing to be Absorbed in next

Twenty-Four to Thirty-Six Months . . .• America Receives over 1,000,000 New Immigrants, Per Year, Most

of Whom Enter the Workforce and Stimulate the GDP• Echoboomers (in their twenties) Having Children Close to Boomer’s

Parent’s Rates!• Eastern European Population is Falling and EU Steady only Because

of Immigration

The Economy, The Economy, The Economy . . .

• US Exports Are Up Year over Year, Three Years in a Row (2005-2007)

• U.S. is the World’s Most Diversified Economy and Still the Largest• American Families Still Averaging 2.0 Children Per Family• GDP is Predicted to Grow at 1.5% to 2% for 2008• Consumer Spending Remains Robust• Hotels, Airplanes, Restaurants and Vacation Destinations Remain

Full!• Unemployment Expected to Go From 5.0% to 5.3% . . . Sooooo . . .• Americans Not Concerned with the World Economy, EU or

Elsewhere• Foreign Newspapers Cannot Stop Writing About the U.S. Economy


• Where’s the Recession?• Mortgage Rates are at Forty-Seven Year Lows . . . • Commercial Real Estate Market is Still a Seller’s Market• CMBS was Small Portion of Commercial Lending; Most Commercial

Lending Still Done by Banks• Banks Have Experienced Little to No Write Off’s• Bank Debt Stands at 5.5% to 6.5% on Three to Ten Year Money• Banks Depend on Real Estate Lending as the Majority of Their

Lending• China, Japan and the Middle East Have a Savings Glut and Love

American Real Estate


• US Has Not Had a Property Meltdown Since the Early 1990’s• Current Mortgage Issues Due to Bad Underwriting, High Leverage

(110%+), and Economy Slowdown• Banking Regulators Have Changed Lending Criteria to 70% to 80%• U.S. Multifamily Results Vary by Region and City• Multifamily is Historically the Highest Returning Asset Type• Multifamily Provides Inflation Protection Since Leases Renew

Annually• Barriers To Entry are Higher with Apartments than Any Other Asset

Type• US Institutions Love Apartments


• Apartment Supply is Restricted in Many Markets• U.S. Real Estate Has Higher Cap and Yield Rates in the U.S. than

Most of Asia and Western Europe• Multifamily Has Predictable Returns and Steady Growth with No

Lease Roll Backs• Reliable Long Term Hold Periods of Ten to Twenty Years• Supply Versus Demand Issues in Different Markets Based on Cycles• Condominium Crisis in Chicago, A Case in Point• Apartments Offer Diversification Through Many Markets• Apartments Can Be a Sector Play; I.E. Buy in Florida; Buy in Arizona


U.S. Dollar Discrepancy . . .

Why is Multifamily the Best Asset Type?Mitigation of Lease Rollover Risk Apartment Buildings targeted by America 2030 range from 100

to 1,000 occupants working in varied industries. At any one time only 3% to 12% of the building will ever be vacant, in the assets we target.

Lower Taxes. Owning 100 units in a 100 unit condominium building may seem like the same thing as owning a 100 unit apartment building. It is not for several reasons, not the least of which is having one tax parcel identification number rather than 101 tax identification numbers.

Barriers to Entry. Apartment building zoning is the most difficult to obtain of the four asset types because it has the largest negative impact on school budgets. High barrier to entry equals difficulty on competition.

Rent Growth. Office, retail and industrial rents have not kept pace with replacement costs, nor construction costs. There are only two ways that real estate prices increase, artificially through cap rate compression (more dollars chasing less assets), and fundamentally through rent growth.

American Mobile Lifestyle. Eighteen percent of all American move annually; One third of all Americans live in Apartment Buildings.

Shelter—Economic Condition Resilience. When people cannot afford anything else they still spend on two things—Food and Shelter.

"US Fears Overseas Funds Could Buy Up America. Money is naturally going to gravitate toward dollar-based assets because of the strength of our economy.” U.S. Treasury Secretary Henry Paulson Jr.

Morgan Stanley predicts foreign funds will own $17.5 trillion of US assets, up from $2.5 trillion in 2007, in only the next 10 years. August 21, 2007, International Herald Tribune

Foreign investors poured $163 billion into U.S. commercial real estate in the first half of 2007, a 37% increase over the first half of 2006. Jones Lang LaSalle

Morgan Stanley, in a widely cited study, projects that foreign investment funds investing in the United States could grow from $2.5 trillion in 2007, to a staggering $17.5 trillion, in 2017.

How Prolific is the Foreign Acquisition of American Assets?

Chinese Government Purchases $3 Billion stake in Blackstone Group. BBC, May 27, 2007.

What is the Trend for Foreign Purchase of U.S. Real Estate?

Weak Dollar Makes U.S. World's Bargain Bazaar, New York Times, September 5, 2007. Pound Trades at Twenty-Five Year Premium to the Dollar

Why are Foreigners Buying Trillions of U.S. Assets?

Ruble at Five Year High to the Dollar


US Dollar – Historical Chart – 6.5 Year Average Cycles


Dollar versus Euro

$0.80

$0.90

$1.00

$1.10

$1.20

$1.30

$1.40

Source: Bureau of Labor and StatisticsSource: Bureau of Labor and Statistics

U.S. real estate is selling at a 30% to 40% discount

Population Stagnation and Declines Across EU

Source: U.S. Census, Brugesgroup, The EconomistSource: U.S. Census, Brugesgroup, The Economist

0

50

100

150

200

U.K.

France

Ger

man

yIta

lySpain

Poland

Japan

Russia

2000 2050

International Home Price Growth (1997-2005)

• U.S. price growth 74% ---------------------------------• Spain 140%

• U.K. 150%

• Ireland 180%

RISKIER

MORTGAGE

PRODUCTS

Source: National Association of Realtors

24

Source: Jones Lang LaSalle, Real Capital Analytics

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Apartment Industrial Office Retail All Properties

% o

f O

vera

ll T

ran

sact

ion

Vo

lum

e

Foreign Fund Institutional Private REIT User/Other/Unknown* Properties of at Least $5 Million

Funds and Private Investors Leading Buyers of All Properties in 2007

Buyer Composition by Property Type

While funds have enjoyed dominance as buyers of office, the buyer profile has been much different for other property types

Private investors were leading buyers of apartments, while industrial and retail properties enjoyed highly diverse buyer profiles in 2007

Source: Institutional Real Estate, Inc.

25

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

Jun-

02

Sep-

02

Dec-

02

Mar

-03

Jun-

03

Sep-

03

Dec-

03

Mar

-04

Jun-

04

Sep-

04

Dec-

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Mar

-05

Jun-

05

Sep-

05

Dec-

05

Mar

-06

Jun-

06

Sep-

06

Dec-

06

Mar

-07

Jun-

07

Sep-

07

Dec-

07

Av

g. C

ap

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te (

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av

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Apartment Industrial Office Retail Overall

Upward Pressure on Rates is Currently DevelopingExtended Period of Downward Cap Rates Has Finally Ended

With the debt market correction, cap rates for all property types have bottomed out and are facing upward pressure; trend to continue throughout 2008; Prior to debt market correction, office in particular had seen cap rates continue to decline during the 1st half of 2007. Source: Institutional Real Estate, Inc.

26

60

80

100

120

140

160

180

200

Jun-

01

Sep-

01

Dec-

01

Mar

-02

Jun-

02

Sep-

02De

c-02

Mar

-03

Jun-

03

Sep-

03

Dec-

03

Mar

-04

Jun-

04

Sep-

04

Dec-

04

Mar

-05

Jun-

05

Sep-

05

Dec-

05

Mar

-06

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06

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06

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-07

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Apartment Industrial Office Retail

Growth in Property Values SlowingFurther Increases to be Much More Dependent on Continuing Strong NOI Growth

Overall prices paid per square foot are up by more than 70% over last 6 years As the most highly-leveraged private buyers will be forced to the sidelines, growth in values will moderate

significantly and be increasingly driven by underlying property fundamentals and cash flows. Source: Institutional Real Estate, Inc.

U.S. REALTORS Engagement (April 2006 to April 2007)

18%

14%

68%

Closings Prospects Only None

Source: National Association of Realtors

or 243,000 NAR members

65% of FL REALTORS had foreign clients

International Home Buyers in Florida

15%

85%

Foreign Domestic

81,900 Home Sales

Source: 2005 NAR Profile of International Home Buyers in Florida

International Homebuyer Trend in Florida, Over 5 Years

49%45%

6%

0%

10%

20%

30%

40%

50%

60%

Increased About theSame

Decreased

Source: NAR

International Buyers’ Origin by Country in Florida

35%

3%

3%

5%

7%

7%

7%

33%

0 0.1 0.2 0.3 0.4

All Others

France

Brazil

Colombia

Venezuela

Canada

Germany

U.K.

Source: NAR

International Buyers’ Destination in the U.S.

26%

16%

10%6%

4%

3%

2%

2%2%

2%

0% 10% 20% 30%

FL

CA

TX

AZ

NY

CO

IL

OH

GA

NC

Source: NAR

Downtown Resurgence?

– Downtown Population Trending Up (Examples from 1990 to 2000)

• Houston up 69%• Seattle 67%• Chicago 51%• Denver 51%• Portland 35%• Cleveland 32%

– Central cities holding up better than before• 31 of 50 largest cities lost population in 1970s• 22 of 50 largest cities lost population in 1980s• 15 of 50 largest cities lost population in 1990s

U.S. Census Bureau

The World’s Largest Economies . . .

0

5

10

15

U.S. J apan Germany China U.K.

In $US Trillions. Source: International Monetary Fund

Economic Expansion Rates . . .

0

3

6

9

12

U.S. J apan Germany China U.K.

Source: International Monetary Fund

World Economies in 2037 . . .

0

10

20

30

40

50

60

2007 2017 2027 2037

U.S. Japan Germany China U.K.

Source: NAR

Brookings Institution researchers estimate that the massive American build-out will constitute a $25 trillion development market by 2030, more than twice the size of the entire U.S. economy today. The bulk of that money will flow into ten major metro regions called "megapolitans."

The ten metro areas are: Seattle/Portland Sacramento/San Francisco Los Angeles/Las VegasPhoenix/Tucson San Antonio/Dallas/Kansas City Houston/New Orleans Boston/New York/D.C. Raleigh-Durham/Atlanta Miami/Tampa

Chicago/Detroit/Pittsburgh

By 2040, two of every three Americans will live in one these regions.

What is a Megapolitan?

“Single Family Home Late Payments, Foreclosures Hit All-Time High in First Quarter" causing apartment rental increases. Associated Press, Thursday, June 14, 2007

"What's good for homebuilders is bad for apartments and vice versa,'' said James Corl, head of real estate investment at New York-based Cohen & Steers Inc. In the apartment market, ``demand is going to be swamping supply for the next few years."

U.S. Multi-Family Market & The Subprime Conundrum?

“Spending on commercial real estate maintained a record pace year to date through July, at $257 billion, a hearty 75% increase over the same period in 2006, according to the National Association of Realtors.”

“A strong economy and job growth over the past few years support the solid commercial market fundamentals being seen, including rising lease and rental rates and low vacancies, and that is what maintained the flow of property transactions at higher levels, said the industry group in its latest Commercial Real Estate Outlook.”

“Defying Credit Crunch, Commercial Real Estate Boomed Through July” September 19, 2007, Corporate Finance Financial Week.

U.S. Commercial Real Estate . . . The Sky Isn’t Falling?

Is There a Forty-Six Percent Off Sale in the U.S.?

• The weak dollar represents two opportunities for foreign capital. First, the weak dollar allows more property purchased per foreign currency unit. Second, when the dollar rebounds, the investment value increases again, making the real estate investment doubly attractive to foreigners.

• Current currency prices avail the foreign investor a fifty percent discount for U.S. assets compared to foreign markets including Europe and Asia.

Top Five Countries of Origin of International Home Buyers

National Association of Realtors

Locations of Homes Purchased in America by UK Buyers


Primary Reason for Purchasing the Home in America


Powerful Demographics Fuel U.S. Apartment Demand

• A child is born every seven seconds

• A person dies every thirteen seconds

• A migrant enters the country every thirty—one seconds

• That’s a net gain of one person every 11 seconds

275 % or 25% and the Dow Makes the News!

Source: FTSE/NAREIT, Bloomberg

Real Estate Offers Attractive Returns

Total Returning Ending September 30th

Source: National Council of Real Estate Investment Fiduciaries

Apartment Returns Ending September 30th


IRR Rank of all One-Year Periods – 1991:4 to 2006:3

Actually, Apartments Look Really Good!


Percentage of Apartments Offering Concessions

Source: Axiometrics

America’s 30 Fastest Growing Cities 2006-2020

Multifamily Performs the Best . . .

America 2030 Summary

• America’s Population will increase by 70 million, from 300 to 370 million, over the next twenty-three years

• Our Founder’s 10 year track record is 46.5% IRR• The United States holds one-third of the world’s institutional

grade real estate• $80 Billion foreign capital will flow to U.S. real estate in the

next two years

• The weak dollar currently represents upwards of fifty (50%) percent discount off U.S. assets

Welcome to America 2030™ Equity An American Private Equity

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