Investment Management Delivering Results Navigating Solutions HOUSTON | AUSTIN | SAN ANTONIO NAI Partners Investment Management PCR Investment Fund I has been organized by NAI Investment Management, LLC and the partners of NAI Partners to invest in office and industrial multi-tenant properties in Houston, Austin, and San Antonio that: • Can be acquired at prices substantially below replacement cost • Are currently generating (or with repositioning or additional leasing at market rental rates would generate) positive cash flow after debt service payments • Offer the prospect of significant cash flow and appreciation over a projected holding term of four to six years Investment Strategies • Acquire value add multi-tenant Office or Industrial Properties in Houston, Austin, and San Antonio • Acquire quality properties in exceptional locations at significant discount to replacement cost • Diverse portfolio with 15-20 assets in multiple markets • Primarily “off-market” properties that have been mis-managed or under capitalized • $10 million - $20 million purchase prices that fall below the interest of institutional buyers • Conservative debt amount of 60-65% of purchase price • Targeted 12-15% IRR NAI Partners Target Markets Austin, TX Houston, TX San Antonio, TX NAI Partners is one of the largest commercial real estate firms in Houston–focused on the purchase, sale, and leasing of office and industrial properties, representing corporate clients, managing office and industrial properties, and providing construction management services. NAI Partners has eleven partners, all of whom are senior office and industrial real estate professionals, and over 80 total employees with revenue in 2013 exceeding $20 million. PCRIF is being formed as an investment vehicle to exploit the knowledge, expertise and deal flow within the existing NAI Partners operations and professionals. Through various investment vehicles, the partners in NAI Partners have invested their own capital and raised additional capital in individual partnerships since 2000. The projects exceeded $50 million in combined value. Why NAI? • Top office and industrial brokers, with extensive knowledge of the ever-changing market conditions, knowledge of properties in the markets, and large volume of deal flow. • In house property management and project leasing • Investment management executive with nearly 20 years of experience partnering with institutional equity sources to acquire, asset manage, and dispose of investment properties in Texas and throughout the country. • Long term relationships with the primary Investment sales brokers in Houston Fund Structure $63 M + $7 M Seed Fund + JV Equity Source $130 M $200 M = Debt Buying Power Summary of Terms Seed Fund Size $7 million in private equity - 5% from NAI partners Minimum Investment 70 shares of $100,000 each Investor Returns* 8% preferred return, 75/25 split after payment of preferred return and return of capital Investment Period 8 years with 2 years of extensions at Managing Partners’ discretion Distributions Quarterly, subject to reserves Fee Structure* Acquisition Fee of 1% of purchase price Disposition Fee of 1% of sales price Annual Asset Management Fee of .75% of invested equity, paid quarterly *T he investor returns and fee structure are estimates of market amounts for these items. The exact amounts will be determined by an agreement between NAI Investment Management and the potential JV Equity source chosen for each deal. Acquisition Structure Disposition Structure 35% Property Cash Flow and Disposition 65% PCRIF $ $350,000 Equity (10%) JV Equity Partner $ $3,150,000 Equity Lender $ 10% of 75% of Profits 8% Pref + return capital 90% of 75% of Profits $6,500,000 Debt Loan Balance (90%) NAI Investment Mgmt PCRIF JV Equity Partner Lender Acquired Property • Property - Acquisition of a $10 million office building • Capital Stack - 65% Debt, 35% Equity. $6,500,000 Debt and $3,500,000 in Equity • Equity Contributions - 10% PCRIF and 90% JV Equity Partner. $350,000 PCRIF and $3,150,000 JV Equity Partner HOUSTON | AUSTIN | SAN ANTONIO Rob Evans Senior Vice President Investment Management + 713 985 4604 [email protected] NAI Partners + 713 629 0500 1900 West Loop South, Suite 500 Houston, Texas USA 77027 This presentation is for general information only. No information, forward looking statements, or estimations presented herein represent any final determination on investment performance. While the information presented herein has been researched and is thought to be reasonable and accurate, any real estate investment is speculative in nature. NAI Partners, and/or its agents cannot and do not guarantee any rate of return or investment timeline based on the information presented herein. By reading and reviewing the information contained herein, the user acknowledges and agrees that NAI Partners, and/or its agents do not assume and hereby disclaim any liability to any party for any loss or damage caused by the use of the information contained herein, or errors or omissions in the information contained herein, to make any investment decision, whether such errors or omissions result from negligence, accident or any other cause. Investors are required to conduct their own investigations, analysis, due diligence, draw their own conclusions, and make their own decisions. Any areas concerning taxes or specific legal or technical questions should be referred to lawyers, accountants, consultants, brokers, or other professionals licensed, qualified or authorized to render such advice. In no event shall NAI Partners, and/or its agents be liable to any party for any direct, indirect, special, incidental, or consequential damages of any kind whatsoever arising out of any information contained herein. NAI Partners, and/or its agents specifically disclaim any guarantees, including, but not limited to, stated or implied potential profits, rates of return, or investment timelines discussed or referred to herein. HOUSTON | AUSTIN | SAN ANTONIO www.naipartners.com
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