OFFERING MEMORANDUM - REDI-net.com

colliers TURLEY MARTIN TUCKER | MINNEAPOLIS-saint PAULMarket ResearchMULTI-FAMILY | first Quarter | 2009Multifamily Housing Remains a Bright SpotMinneapolisSt. PaulMarket IndicatorsQ1 09ActualQ2 09EstimatedVacancy RATE k gNet Absorption g gConstruction m mRental Rate g gsignificant transactionThe Minneapolis-Saint Paul multifamilymarket continues to outpace the nationin occupancy, rental rate stability, becauseof lack of supply in the pipeline, earningit the reputation as one of the top marketstargeted for acquisition by institutionaland private equity buyers today.Increased activity from outside investors,as well as lenders seeking investment opportunitiesin our market, should serve tomitigate cap rate increases as compared tonational trends through the first quarterof the year.The crisis in confidence has created an environmentwhere almost everyone seems tobe waiting for the financial uncertainty tohit home, yet overall market indicators continueto be stable, albeit with some fluctuationon a year-over-year basis, especially insub-markets outside the I-494/I-694 loop.Across the market occupancy is still hoveringat 95% and, for the most part, has heldsteady since September 2007.Three trends contributing to the stabilityof the Minneapolis-Saint Paul marketare:1.2.3.The virtual halt of new developmentfor projects to be delivered in 2009and 2010 because of the lack of constructionfinancing. Most developmentsdo not make economic senseto move forward with at this time.The lack of significant shadow marketcompetition (ie. condo rentals) comparedto many national markets.The lack of distressed assets acrossthe metro area. Assets reflected inthe chart below.These favorable fundamentals appeal toinvestors seeking shelter from the volatilityexperienced in coastal markets, leadingthem to diversify their portfolio exposureacross the country. This has brought institutional,national, and regional private investorsback to the Midwest, particularly to thePotentially troubled & distressed assets of 12/31/08Riverview at Upper LandingSaint Paul, MNBuyer: Intercontinental Real EstateCorporationSeller: Prudential Real Estate InvestorsPrice: $126,453/UnitSize: 344 UnitsYear Built: 2005SectorUNITSSURveyedunitsvacantaverage rent Vacancy Rate VacancyChange09/07 09/08 09/07 09/08Anoka County 6,100 273 $837 $836 6.0% 4.5% -1.5%Dakota County 16,647 785 $906 $911 3.9% 4.7% 0.8%Minneapolis 15,527 553 $868 $929 2.8% 3.6% 0.8%Northeast 12,046 531 $805 $824 3.6% 4.4% 0.8%Northwest 10,699 501 $766 $802 3.6% 4.7% 1.1%Scott County 1,040 54 $940 $957 6.4% 5.2% -1.2%Saint Paul 17,711 696 $933 $954 3.2% 3.9% 0.7%Southwest 11,703 353 $860 $876 4.3% 3.0% -1.3%Washington County 4,703 252 $1,003 $1,004 4.7% 5.4% 0.7%West 17,772 726 $973 $1,003 3.7% 4.1% 0.4%Twin Cities Metro 113,212 4,673 $890 $922 3.6% 4.1% 0.5%Source: GVA Marquette AdvisorsColliers turley martin tucker 10