Dispositions: How Money Can Be Made in Real Estate Jim DerMinasian, CCIM, CPM® - Taurus Management Services, LLC - Senior Vice President

Why Sell? End of Projected Property or Fund Hold Period Seeking Return of Capital Market Cycle Factors “Don’s Frothy Market” Seller Forecasting Higher Interest Rates

Hold/Sell Analysis Analyze Expected Return to Seller Now vs. Holding the Property Requires Understanding of Investor Objectives Requires an Updated Future Cash Flow Analysis, i.e. Argus, often an MAI Appraisal or Broker Opinion of Value “BOV” Update Leasing, Expense, Capital and Debt Assumptions.

Broker Selection Asset Manager and/or Dispositions Officer Evaluates Brokerage Team Market Reputation and Experience With Properties of Similar Type, Quality and Location Carefully Evaluate Each Brokerage Teams Workload- Current or Near Term Disposition Assignments After Selection the Listing Agreement is Signed Manager Provides Due Diligence Information to Broker

The Marketing Process Broker Issues a Press Release ”Teaser” Sent to Potential Purchasers Confidentiality Agreement Signed On to…. The Offering Memorandum

Managers Play A Key Role In Helping Brokers Prepare the “OM” Review Carefully Brokers Draft- Especially Building System Descriptions and Historical Financial Information Include a List of Capital Projects and Major Repair (Most Recent- Most Valuable) Should Include Tenants Renewal and Expansion History

Tenant Relations When In Disposition Mode Resolve any tenant dispute issues before the disposition process (Minimizes estoppel execution problems) Ensure Tenant Contact Information Is Up To Date (Both Daily Contact and Lease Decision Maker(s) Alert All Tenants Of The Property Marketing Process

Tour Time Manager Should Join the Investor Property Tours With the Brokerage Team Read the OM Before The Tour Fiduciary To Seller/Current Owner – Honesty To Prospective Purchasers

Where From Here… 1st Round Bids Often 2nd Round Bids Purchaser Interviews and Selection On To Purchase and Sale Agreement (P&S) – Engage An Attorney, Carefully Review P&S Dates, Reps and Warranties

Manager Disposition Value Add Ensure Standout “Curb Appeal” Review Engaging an Engineering Firm For A “Pre-Disposition” Property Condition Report- You Don’t Want Any Surprises Ensure All Tenant Rental Payments Are Up To Date, Delinquent Rent is Difficult To Collect Post Disposition

Disposition Leasing Strategy Encumbrances – (i.e. Renewal Options, Right of First Offer..) -Avoid Granting Them Whenever Possible in Your Lease Transactions Review Tenant Roll For Potential Early Lease Renewals Or.. In a Landlord Favorable Decreasing Vacancy/Rental Growth Market “No Action” With Leasing May Be Your Best Strategy Why- Prospective Purchasers Often are Overly Aggressive In Their Rent Growth Projections

Service Contracts Always Have An Updated List Of Service Contracts For Each Property Also Maintain an Updated Executive Summary of Service Contract Terms Termination Rights Should Be a Maximum of 30 Days or Upon Sale

Questions and Answers Ball’s in your court. Ask them… I’ll answer them…