1. Court Square Center Memphis, Tennessee

2.  Project Background  Project Structure  Risks & The Back End  Parting Words & A Few Tips

3. Map: Downtown Memphis

5. The Real Estate Building Type: Columbian Mutual Tower 21-story high-rise Court Annex 7-story mid-ride Lowenstein 5-story mid-rise Project Size (NSF): BuildingResidentialCommercial Columbian Mutual Tower 41,935 19,429 Court Annex 22,596 9,171 Lowenstein 34,985 8,993 Total 99,516 37,593 Residential Units: 77 Market Rate Rental Units; $1.12 nsf average in rent

6. The Real Estate Commercial/Retail Space: Approximately 40,000 square feet; $15.00 nsf average Signed Leases: The Plough Foundation – National Foundation Memphis Justice Center – Local Law Firm Ceriellos New York Deli – Gourmet Deli / Grocery Store Signed Lease as % of Total Commercial Space: 45% Parking: 110 Spaces Project Estimated Cost: $40,600,000 Estimated Construction: March 15, 2006 – December 15, 2007

7. Columbia Mutual Tower

8. Court Annex

9. Lowenstein Building

10. Project Facts  Fully leveraged deal – All sources generating NMTCs including HTC equity (i.e., twinning)  $40,000,000 NMTC allocation from 2 CDEs $26,000,000 allocation from ESIC $26,000,000 allocation from ESIC $14,000,000 allocation from NDC $14,000,000 allocation from NDC  5 sources of funds including a permanent loan, Section 108 loan, BEDI grant, HTC equity and NMTC equity  Two investors/lenders providing loans and equity  Both commercial and residential space to be leased/rented with an ~35-65% income split, respectively

11. Sources A Loan (Permanent Loan) $11,800,000 B Loan (City 108 Loan) 8,500,000 C Loan (City BEDI) 2,000,000 HTC Equity 6,300,000 NMTC Equity 12,000,000 Total $40,600,000

12. Site Acquisition$1,065,000 Construction Costs23,100,000 A & E Costs1,700,000 Financing Costs 3,000,000 Other Soft Costs 10,435,000 CDE Fees / Reserves 1,300,000 Total $40,600,000 Uses

13. Example of Fully Leveraged NMTC Structure (Including Twinning of Historic Tax Credits) HTC Equity Loans Equity Investment Partnership CDE Operating Partnership (Property Owner) Historic Real Estate Qualified Equity Investment Qualified Low-Income Community Investment (Loans or Equity)

14. Court Square Center – Capital Flow of Funds (Draft) Draft as of February 1, 2006 Court Square Center LLC Owner / QALICB $39,310,000 ESIC CDE, 99.00% NDC CDE, 0.99% CS Associates, 0.01% NDC CDE 1 $14,000,000 ($2,800,000 Equity + $10,710,000 Loans + $490,000 CDE Fees) NDC Master CDE,.01% FNMA, 49.995% USB, 49.995% Investment Partnership $40,400,000 $26,400,000 ESIC QEI | $14,000,000 NDC QEI $27,000 Fees & Reserves FNMA, 49.995% USB, 49.995% ESIC, 0.01% Equity ($2,800,000) B Loan ($8,500,000) Equity ($14,000,000) A Loan ($11,800,000) C Loan ($2,000,000) ESIC CDE 2 (Loans) $12,070,000 ($11,800,000 Loan + $270,000 CDE Fees) ESIC Master CDE,.01% FNMA, 49.995% USB, 49.995% NDC CDE 2 $5,000,000 (Transfer of funds to NDC CDE 1) $14,000,000 QEI ESIC CDE 1 (Equity) $14,300,000 ($14,000,000 Equity + $300,000 CDE Fees) ESIC Master CDE,.01% FNMA, 49.995% USB, 49.995% $26,400,000 QEI $9,000,000 QEI$5,000,000 QEI D Loan ($210,000)

15. Risk  The complexity of the transaction adds risk: A mixture of five sources of private and public funds; A mixture of five sources of private and public funds; Both HTC and NMTC programs have recapture rules; Both HTC and NMTC programs have recapture rules; NMTC projects by definition are in census tracts with at least 20% poverty; NMTC projects by definition are in census tracts with at least 20% poverty; Must maintain at least 20% of revenue from commercial activities. Must maintain at least 20% of revenue from commercial activities.

16. The Back End  Exit Strategies Refinance the project and continue as rental Refinance the project and continue as rental Convert the residential units to condos and retire debt Convert the residential units to condos and retire debt