0 Cornerstone Research Nashville Apartment Market Analysis Dags Chen Cornerstone Real Estate Advisers LLC

1 Research drives Cornerstone investment process  Strategy  Tactics Public (REIT) and private real estate research integrated Cornerstone “scrubs” industry data to remove errors and refine accuracy Cornerstone’s granular analysis is more localized than typical Live access to data and forecasts throughout Cornerstone via the Research Analyst platform Top Down Bottom Up Regional Teams Local Data Market Presence Value Research Insight Data Models Forecasts Cornerstone Research

2 Economy.com’s NAICs Employment Forecast Dun & Bradstreet Establishment Data by NAICs Scrubbed supply data from F.W. Dodge Pipeline Market Occupancy & Rate/Rent Trends Construction Activity, History and Forecast Demand/Supply Forecast w/ Local Coefficients Demographic Forecasts Occupancy Forecast, Rent Growth, Market Weighting, Investment Recommendation Demand, Supply, and Local Coefficient Inputs are property-type specific Cornerstone’s Demand Model: Employment Growth by Zip Code, County, and MSA, Benchmarked to U.S. Regional Office, REIT Team and Hotel Team input Cornerstone Research

3 Source: Consensus Forecasts, Cornerstone Research Weakness is pervasive and accelerating. Forecast for negative GDP through 2009, recovery hopes in 2010, employment recovery lags. 1/12/08 Forecast 6 quarters of negative growth would be the longest contraction since the Depression Forecast US GDP Growth

4 Source: Bureau of Labor Research, Cornerstone Research , Months to recover peak employment Total Job Losses : -2.1mm : -2.8mm Current: -3.5mm through January, (another 2mm to go?) 50+ months? Steep Jobs Decline and Slow Recovery Source: Cornerstone Research

5 Blackstone purchase of EOP Commercial Real Estate Transaction Activity Source: Real Capital Analytics Blackstone purchase of Hilton

6 NCREIF Property Index Comparison

7 The Grove at Cumberland Bluffs

8 Economy.com Precis Report

9 Nashville Apartment Submarkets

10 Belle Meade / West End

11 Downtown

12 Rent Comps

13 Locations of Major Employers

14 Franklin/Williamson County

15 Rent Comps

16 Shadow Supply

17 Submarket and Market Rent and Occupancy

18 Rent Comps

19 Proforma Cash Flow

20 Proforma Cash Flow Debt ServiceYear 1Year 2Year 3Year 4Year 5 Net Operating Income2,958,2283,062,3723,166,3493,273,6883,384,494 Debt Service($1,971,427) ($2,366,761) Cash Flow$986,802$1,090,945$1,194,923$906,927$1,017,733 Debt Service Coverage Ratio All Cash Yield6.73%6.97%7.20%7.45%7.70% Cash On Cash Leveraged Yield8.98%9.93%10.87%8.25%9.26% Price$43,956,000 LTV %75% Loan Amount$32,967,000 Interest Rate*:5.98% Amortization: Term: First 36 Months (Interest Only)$164,286 Months :$197,230

21 Commercial Mortgage Spreads (as of 2/11/2009) Source: DTZ Rockwood Financial

22 Source: Axiometrics U.S. Nashville Historical Rent Growth Downtown West End

23 Source: Axiometrics, BLS Rent Growth Linked to Job Growth Nashville Employment Growth

24 Source: Axiometrics U.S. Nashville Axiometrics Vacancy History Downtown West End