MODULE 11

Comparative Analysis of Real Estate Ownership Attribute Personal liability Tax Treatments Double Pass-through Liquidity Access to Equity Minimum Investment Required Scale of Acquisition Gov’t Restrictions on Financial Decision Participation in M anagement C-Corp Private Partnership Public Partnership REIT Sole Ownership S-Corp

Fundamentals of Analysis for REIT’s Origins & Basics What Are REIT’s FFO And Profitability How Do REIT’s Grow

UPREIT’s And OP Units

FFO Industry Standard For Measurement Income & FFO Calculation Revenue Operating Expenses G & A $100 $35 $5 NOI Depreciation Interest $60 $20 FFO Calculation Net Income$20 Net Income plus Depreciation $20 FFO$40

FAD Impact - I REIT AREIT B FFO Shares Outstanding FFO / Share FFO Multiple Price / Share FFO CAPEXP FAD FAD / Share FAD Multiple $20/share) $40 $20 $ x $20 $40 $10 $30 $ x $40 $20 $ x $20 $40 $5 $35 $ x

FAO Impact - II REIT CREIT D Revenue OE G & A NOI Depreciation Interest Net Income $100 $35 $5 $60 $15 $20 $25 $100 $40 $5 $55 $15 $20 FFO Computation Net Income Plus R.E. Depreciation FFO Shares Outstanding FFO / Share FFO Multiple Price / Share $25 $15 $40 20 $ x $20 $15 $35 20 $ x $17.50

FAD Effect - II REIT CREIT D Price Per Share FFO CAP EXP FAD FAD / Share FAD Multiple $20 $40 $5 $35 $1.75 $11.4x $17.50 $35 0 $35 $ x

FAD Impact - III ($ Millions) REIT E Net Income Plus Depreciation FFO less CAP EXP less Straight line Rent FAD $20 $40 $5 $10 $25

Conflicts Of Interests In The Structuring Of REITs w Successful REIT’s: Aligned Interests, Better Management, & More Liquidity w Corporate Goverance & Conflict Of Interest w Sources of Conflict of Interest

Matrix Classification Of Potential Conflicts Of Interest AllegienceX Sponsor ControlXXX Outside PactingX Over - CompositionXX Resource AllocationXX Competition AffiliatesXX Tie - In BusinessXX CaptivityX Self - DealingXXX Tax TimingXX Expense ReferenceXXX MalignancyXX Conflic t Item Offering Formation Investment Management Transaction Activity Property Management

w Tax Driven Motives And UPREIT Structure w Transaction Bias And Recognition Of Built - In Gain w Reluctance To Pay Down Debt w The Advisor - Affiliate Structure And A Multitude Of Caveats For Investors