Best Solutions for…

Managing Expectations and Delivering Challenging Information

PANELISTS: Mark Petersen President, Behringer Securities Darryl Steinhause Partner/Legal Counsel, DLA Piper Ray Sun President, SunCoast Realty Due Diligence, SANDLAPPER Securities MODERATOR: Brandon Balkman Chief Marketing Officer, Keystone National Group

Survey Respondents (chose all that apply)

Combining low risk with high returns, what programs do you favor? Average Ranking BDCs Credit Markets/Receivables NT REITs Real Estate Funds Exchange (TIC/DST) Hedge Funds 9.89 Equipment Finance/Leasing 9.78 Oil & Gas 9.78 Alternative Energy 9.22 Secondary Market Opportunities (NT REITS/Funds) 8.89 Private Equity 8.38 Note Programs 7.67 Managed Futures 7.56 Life Settlements 7.50 Other 3.25

Best Solutions for… Managing Expectations and Delivering Challenging Information

Past challenges originated from:

Causes of challenges? Average Ranking Erratic market movements/Economy Original structure Leverage Investment underwriting Management 9.43 Property/Assets 9.33 Loan 9.22 Inadequate accounting/valuation 9.00 Sponsor’s lack of capital 8.56 Sponsor reporting 8.00 Fraud 6.80 Investors lack of funds for capital call 4.89 Change in accreditation of investor(s) 4.11 Rep/Adviser performance 3.78

Sponsor have helped by: Frequent and transparent reporting w/ reps and clients. Negotiated complex workouts and loan modifications. Listed asset to give liquidity. Frequent conference calls with CEO of company.

What would tempt you to do business again? Nothing! Depends upon how they handled the situation. A very well fleshed out idea. A Smoking Deal.

Best way to manage challenges: Average Ranking Open and frequent communication 4.88 Be upfront and honest 4.50 Other (Due Diligence) 3.78 Allow people to ask questions (investor forums) 3.75 Reps play an active role to help 3.38

Managing Expectations: Promise only what you can deliver Deliver what you promise Meet deadlines Display thoroughness

Q&A

Crystal ball: Next blow up in the alternative space will be caused by what? Sponsors that cut corners to profit themselves. Too much capital chasing opportunity. Non real estate alternatives. Products not thoroughly underwritten. Government change in regulations.

#1: Communicate! (1 x month for bad news, 1 x three months for good news) #2: Don’t ignore the client Top Two Best Solutions to -Manage Expectations -Deliver Challenging Information

PANELISTS: Mark Petersen President, Behringer Securities Darryl Steinhause Partner/Legal Counsel, DLA Piper Ray Sun President, SunCoast Realty Due Diligence, SANDLAPPER Securities MODERATOR: Brandon Balkman Chief Marketing Officer, Keystone National Group