100 Shoreline Hwy, 200-B | Mill Valley, CA 94941
Tel: 415-339-4094 | Fax: 415-339-4099

Past Projects Since 2000, Kipling Partners and its Principals have assessed hundreds of potential acquisitions in what is generally considered to be a very difficult and competitive marketplace. Low interest rates have emboldened many real estate buyers to purchase properties at very high prices. Kipling Partners makes investments that are dependent on realistic assumptions, in terms of underlying economic fundamentals and does not utilize short-term low interest rates to produce adequate short-lived cash flow in a rising interest rate environment. Rather, using a disciplined approach, we focus on inefficiently marketed transactions to find special opportunities that we uncover in the marketplace. Kipling Partners and its affiliates have been successful in acquiring properties that are in need of upgrading and repositioning. Since 2000, Kipling Partners has acquired several properties that fit this model, and expect to continue to seek repositioning opportunities with affiliates and local joint venture partners. Each transaction is assessed based on its own intrinsic economics, and Kipling Partners applies prudent underwriting criteria when considering any potential investment opportunity. Below is a brief description of some recent transactions where we have successfully implemented our "Value-Added" approach to real estate: Project Current Annualized Cash Flow Yield Year Acquired Description Hotel Pacific Monterey, CA (105 Suites) 12% 2002 With a strategic alliance partner, acquired this hotel at post-9/11 historically low occupancy of 64%, with a debt to cost ratio of 55%; Implemented cosmetic enhancements and modified marketing efforts. Placed 7-year fixed rate debt of 5.7% on the property. As of mid 2004, the property operates at an average annual occupancy of approximately 75% and trending higher. Northridge Park Salinas, CA (120 Apts) 11% 2001 Acquired a 50% partnership interest by purchasing the interest of a foreign investor; our investment was structured with a 20% IRR priority. The asset was renovated and repositioned, and new fixed-rate, 10-year debt was placed on it, mitigating the long-term interest rate risk. Westwood Apartments Carmichael, CA (181 Apts) 9% 2002 Renovated and repositioned the property, marketing it with higher rents; Placed new fixed-rate, 10-year debt. All-in acquisition cost of $11.6M; currently valued in excess of $14M. 1608 Chestnut Street Philadelphia, PA (40,000 sq ft) 12% 2000 Acquired an historic retail property located in Philadelphia's best high-end shopping area. Refinanced in 2005, resulting in investors receiving 250% of their original investment. Marine Club Apartments Philadelphia, PA (301 Apts) Cash flow yields were 16% prior to the return of all of the investors' equity through a refinancing; strong cash flow continues after the refinancing 2000 Acquired with local joint venture partner an historic property that was not achieving it full potential. Implemented programs to upgrade the property, added 40 apartments, significantly increased rents, and achieved full occupancy. Returned all of the initial equity after the 3rd year through refinancing. By 2004, the property's value doubled from its initial acquisition price. Current plans are to convert to condominiums, generating over $60M of sell-out value that represents a quadrupling of the initial purchase price. 333 Gellert Office Building Daly City, CA (62,000 sq ft) 10% 2004 Acquired with local joint venture partner an existing office building adjacent to significant retail and mixed-use properties. Cosmetic improvements to the property, together with a more aggressive leasing program, are expected to allow the property to achieve it s full potential. An example of a new construction project in which Kipling Partners has recently invested is a follows: Project Current Annualized Cash Flow Yield Year Acquired Description Lakeside Park Oakland, CA [Lake Merritt Area] (52,000 sq ft) 12% 2001 Specialized apartments designed for persons requiring Assisted Living Services and those afflicted with Alzheimer's Disease. The local joint venture partner has guaranteed certain minimum cash flows to Kipling Partners. The property is fully leased and has a waiting list. A permanent loan is expected to be placed on the property resulting in a 100% return of the investors' initial equity. Cash flow results are excellent.