1. Market For Property Disposition at Year 15 and Earlier The Institute for Professional And Executive Development October 11,2007 Robert L. Sheppard Senior Director National Tax Credit Property Advisors of Marcus & Millichap

2. LIHTC Portfolio Totals Data provided by NAHB & NCSHA

3. LIHTC Portfolio Potential Activity Data provided by NAHB & NCSHA *1992 1993 1994 1995 1996 1997199819992000 *Year Placed in Tax Credit Program 1,005,108 185,999 550,417

4. LIHTC Lifecycle Opportunities Years 10-15 Partnership interest sale –Mid Term GP sale –Options open for later resyndication –Capital markets starting to materialize for execution Fee simple (cash flow) transaction – Currently the most common scenario –Surety bond required –Yields similar to market rate IRR / CAP Rate

5. LIHTC Lifecycle Opportunities Years 15 and beyond Fee simple (cash flow) transaction: Currently the most common scenario –No surety bond required after Year 15 Acquisition-rehab: likely to increase as more units with extended use become eligible –Available volume: 185,999 units in 2007; 288,917 units in 2008; average 113,000 annually over the next 10 years Price Comparison: –Cash Flow vs Resyndication on YR 15 acquisitions oTrends show in many circumstances re-syndication likely to yield more oBuyers have similar behaviors, LIHTC starts below the price a buyer will pay due to fear of loss

6. Years 15 and beyond Execution Strategies: –Keep affordable; sell to cash flow buyer – Current GP Re-syndicate the deal oAnti-Churning rule an issue –Sell and Re-syndicate oMarket to buyers of LIHTC properties –Hold oNeed to buy out LP LIHTC Lifecycle Opportunities

7. Market For Property Disposition at Year 15 and Earlier October 11,2007 Robert L. Sheppard Senior Director National Tax Credit Property Advisors of Marcus & Millichap Additional information available at: www.ntcpa-mm.com