1. Introduction to Cost Segregation Chris Hitselberger Senior Managing Director & National Practice Leader Eli Varol Managing Director - Midwest

2. CB Richard Ellis | Page 2 COST SEGREGATION - What is it? An IRS Recognized Method Of Creating $30,000 to $150,000 Of Tax Benefits per $1,000,000 Of A Building’s Cost.

3. CB Richard Ellis | Page 3 COST SEGREGATION - What is it? The identification of specific building components that can be treated as Personal – Section 1245 Property Site Improvements – Section 1245 or 1250 (tax life of 5, 7 and 15 years) rather than Real – Section 1250 Property (tax lives of 27.5 or 39 years)

4. CB Richard Ellis | Page 4 Potential Tax Benefits COST SEGREGATION - What is it?

5. CB Richard Ellis | Page 5 Building Component Depreciation An unobtrusive, yet detailed engineering study of a building’s: v Electrical v Lighting v Plumbing v Heating & Cooling  Ceiling  Walls  Flooring  Landscaping & Sitework How it Works

6. CB Richard Ellis | Page 6 How it Works

7. CB Richard Ellis | Page 7 How it Works

8. CB Richard Ellis | Page 8 Examples of Qualifying Components

9. CB Richard Ellis | Page 9 Marketing & Selling Collateral And Support Eli Varol will provide tax benefit projections, info gathering sheets, supply collateral and support your marketing activities. What We Need To Know 1) What Is The Business Activity In The Building? The business activity determines how complex the build-out is. A restaurant is more complex than an office, which is more complex than a distribution center. This determines the rate at which we can gather data. 2) How Many Square Feet Is The Subject Property? This determines the time involved and the fee. 3) What Is The Tax Basis = Purchase Price Less Land? This determines the amount of the tax benefits.

10. CB Richard Ellis | Page 10 Typical Marketing Process 1.Identify CBRE client that is buying real property, is constructing a new building, or is adding improvements to a building. Remember that is also valuable to real property & improvements made in past years. 2.Set up a conference call with cost segregation MD or fill out a questionnaire provided. 3.Cost Segregation group can immediately respond with an arrangement letter and a conservative/optimistic estimate of present value benefit. 4.Project can begin upon receiving signed engagement letter & retainer.  Fees vary significantly based on scope. Average fee is $10,000  January through April is our typical “busy season”

11. CB Richard Ellis | Page 11 Questions? Chris Hitselberger (212) 425-4300 x106 1156 Avenue of the Americas, Suite 703 New York, NY 10036 chris.hitselberger@cbre.com Eli Varol (312) 416-3081 222 South Riverside Drive, 27 th Floor Chicago, IL 60606 eli.varol@cbre.com CBRE Engineers in Los Angeles San Diego San Francisco Chicago Washington DC Tampa New York Philadelphia