Marketing 4411 Case 6 T Malisa Chhuon Demetre Christou Blair Stewart 1

AGENDA  Assumptions  Business Case  Resale  Business Plan  IMC Plan 2

ASSUMPTIONS  Marketing team from BDM Properties  Developer wants to abandon retail-mixed use project by November 30 th,2010  Mitigate risk / loss and avoid 2% surtax  Sell land and build-out plans to a developer 3

Action Plan Measure & Evaluate Act Plan 4  Past 7 days have shown economic changes affecting cost of money  Must re-evaluate strategy

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BUSINESS CASE  Market Updates  Comparative sites  Go Criteria 6

7 Market Update GO CRITERIA UPDATE GO Criteria dependent on: 1.Is there a need for serviced land within this market?  North Surrey (South Whalley) 2.Can we mitigate risk & loss?

NEW DEFINITION  Market and sell serviced land  Include development proposal  Justifies land-price increase 8

Economical  Prime rate has increased to 3.25%  Canadian banks raise prime rate by 1.25%  Mortgage rates increased by 1.25%  Commercial mortgage: Median rate is at 5.25%  Jan 1, 2010 – 2% surtax on all Real Estate transactions MARKET UPDATE

Social Consumer confidence in British Columbia:  92.8 points  8.3% from points Canada consumer confidence  84.8 points  Fell 7.8 points MARKET UPDATE

FUEL Interest Rates: Prime – 3.25% 5 Year – 6.25% 11 Market Update COST OF MONEY

Cap Rates  Retail: 6.3% - 6.8%  Office: 5.7% - 7.4%  Rising interest rates = Rising cap rates  Must be taken into consideration when re- evaluating contingency plans 12

Market Update COMPARISONS th Ave  Size SF: 15,768  $725,000  $45.97 / sq.ft King George Hwy  Size SF: 102,366  $6,480,000  $63.30/ sq.ft rd St  Size SF: 43,560  $3,995,000  $91.71 / sq.ft

LAND COST - ASSUMPTION Maximum we were willing to pay (13% Profit): $4,200, Amount we paid for the property in April, 2010: $3,000,  $69.52per square foot  Median of comparables: $63.30per square foot  Close to our location  Not a corner lot  Further north (Whalley)  More competition within area  $600, higher than assessed value 14

15 BUSINESS CASE “GO” CRITERIA GO Criteria:  Is there a need?  Can risk be mitigated? YES OCP suggest need for more commercial businesses; our land is favourably zoned to accommodate the need Comparisons show that owner can still recover investment costs. Potential for profit.

BUSINESS CASE Summary 16  Market Update  Comparative sites  Go Criteria

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BUSINESS PLAN 18  Vision  Execution Plan  Contingency Plan  Measurement & Evaluation  Action Plan

BUSINESS PLAN Vision 19  To Market and Sell:  Serviced bare-land in Whalley to a developer for $4,280,000  Include build out development proposal which reflects our end price  UVP:  Unique build-out plans and favorably zoned property located strategically in up and coming community

BUSINESS PLAN Financial Strategy 20 Financial Summary Budget Price per sq.ft % of Project Cost Land Cost $ 4,280,000 $ % Development/Construction hard cost $ 24,190,000 $ % Soft and financing costs $ 4,500,000 $ % Profit $ 4,000,000 $ % Marketing costs $ 935,000 $ 6.572% Contingency $ 1,270,000 $ 8.953% Total $ 39,175, $ %

BUSINESS PLAN Financial Strategy 21 Financial Summary Budget per sqft of gross floor area % of Project Cost Land Cost $ 3,000,000 $ % Financing costs $ 130,700 $ 0.923% Profit $ 958,560 $ % Marketing costs $ 190,740 $ 1.344% Total $ 4,280, $ %

BUSINESS PLAN Contingency Plan 22 PLAN B  Sell land at $3,750,000  Decrease profit to 10%  Increase developer profit to 12%  Sell land at $3,200,000  Increase in developer profit to 13%

BUSINESS PLAN Contingency Plan 23 PLAN C  If market conditions turn favourable Example: Increasing lease rates, lower interest rates, etc.  Reassess and possibly build-out according to original plan

BUSINESS PLAN Measurement / Evaluation 24 Measure & Evaluate Act Plan

Project Timeline Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Task Market Research Land Acquisition Project Design Land Survey Municipal Approval Marketing BUSINESS PLAN Action Plan 25

BUSINESS PLAN Summary 26  Vision  Execution Strategy  Contingency Plans  Measurement & Evaluation  Action Plan (Timeline)

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IMC PLAN 28  The Six P’s  Target Markets  Market Target  Budget Analysis  Measure & Evaluate

IMC PLAN Target Markets 29 Private Investors  Focus on Real Estate  Qualified  Financial and Market  Experienced  Seeking new investment Opportunities Private Investors  Focus on Real Estate  Qualified  Financial and Market  Experienced  Seeking new investment Opportunities Trusts & Syndicates  Focus on acquisitions + Leasing  Based in Vancouver  Diverse portfolio  Retail, Industrial, Office  Seeking new investment Opportunities Trusts & Syndicates  Focus on acquisitions + Leasing  Based in Vancouver  Diverse portfolio  Retail, Industrial, Office  Seeking new investment Opportunities Local Developers  Focus on acquisitions + Leasing  Based in Vancouver  Diverse portfolio  Retail, Industrial, Office  Seeking new investment Opportunities Local Developers  Focus on acquisitions + Leasing  Based in Vancouver  Diverse portfolio  Retail, Industrial, Office  Seeking new investment Opportunities

IMC PLAN Target Market 30 Market Target #1 Development Companies Market Target #1 Development Companies

IMC PLAN Target Market 31 Potential Investors Simon Property GroupBucci Group General Growth PropertiesCBL & Associates Properties Inc. Kimco Realty CorpMills Corp. Developers Diversified RealtyTerrex Real Estate Group The Inland Real Estate Group of CosAnthem Properties Onni GroupPorte Realty Macerich Co.Westfield America

IMC PLAN Market Target 32 Simon Property GroupBucci Group General Growth PropertiesCBL & Associates Properties Inc. Kimco Realty CorpMills Corp. Developers Diversified RealtyTerrex Real Estate Group The Inland Real Estate Group of CosAnthem Properties Onni GroupPorte Realty Macerich Co.Westfield America Potential Investors

IMC PLAN Market Target 33  Developer / Development Manager / Project Managers  Retail, Commercial, & Residential portfolio  Experience and success in Surrey  Company Principals are knowledgeable and successful Panorama Place (Mixed use Retail and Office) 152 nd and King George Hwy Panorama Place (Mixed use Retail and Office) 152 nd and King George Hwy

IMC PLAN Market Target 34  Developed similar projects  Based in Vancouver  Focus on income-producing real estate  Diverse portfolio  Retail, Industrial, Office,

IMC PLAN Market Target 35  Diverse development portfolio  Similar developments in our area (Guildford)  Opportunistic developers  Successful developments in GVRD (including Surrey)

IMC PLAN Market Target 36  40+ years of experience in GVRD  Diverse portfolio  Experience in Surrey  10+ commercial properties in GVRD  Successful track record

IMC PLAN Budget Analysis 37 Marketing Creative$10,000 Advertising/Printing/Signage$20,000 Commission (3%)$85,600 Miscellaneous (Car, Insurance, Gas, Cellphone)$15,000 Contingency (10%)$13,060 Total Marketing Costs $143,660

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IMC PLAN Measure & Evaluate 41 Measure & EvaluateActPlan

IMC PLAN Summary 42  The Six P’s  Target Markets  Market Target  Budget Analysis  Measure & Evaluate

CONCLUSION 43  Business Case  Business Plan  IMC Strategy