Leo,

Below is some language we use as an introduction to RREAF.  I'll also forward you the powerpoint version under separate cover.

In brief, we are raising a $1 billion real estate fund (Rosemont Real Estate Acquisitions Fund or “RREAF”) through our property company, Rosemont Realty.  The fund will be focused on acquiring, managing, and ultimately disposing of U.S. office properties in secondary and select primary markets (e.g., Houston, San Antonio, Austin, Phoenix, San Diego, Washington, DC, etc.).  We believe that the 2007 through 2009 U.S. recession has created a generational opportunity to buy “Trophy” and other Class A/A- office properties at deep discounts to stabilized value and replacement cost.  Rosemont is uniquely positioned to take advantage of this market distress and dislocation.

Founded in 1991, Rosemont Realty is a market leader in U.S. office property investment and management.  The company currently operates and manages $1.5 billion in real estate assets comprising some 15 million square feet of commercial space across 28states.  Rosemont has 215 investment and asset management professionals in five regional offices that manage all aspects of the Rosemont portfolio.  

Rosemont Realty’s performance history has significantly outpaced its peers.  Of its 90 full-cycle investments, Rosemont has generated an average 21.67% annual rate of return on investment.  Of its current 88 programs, Rosemont has produced an annualized yield of 7.61%.  Available upon your request is a PriceWaterhouseCoopersaudit report validating these returns. Rosemont largely avoided the market distress of 2007 through 2009 bymaking no new investments.  But by late 2010, the company recognized that it was at one of the best points in the cycle to restart its acquisitions program.

With its most recent fund, Rosemont will be able to use its considerable industry presence, relationships, and market knowledge to invest capital quickly and efficiently.  We do believe, however, that the window of opportunity for investment will be limited to the next 24 months and be followed by rapid stabilization in the U.S. commercial real estate.  For this reason, we will look to secure our equity commitments in the next several months totake full advantage of the current opportunity.  

To facilitate this, Rosemont owners are making a significant general partner commitment to the fund of $50 - $75 million in equity.  Compared to our competitors, this figure far exceeds typical general partner commitments to comparable funds.  We hope from your perspective this significant commitment demonstrates our seriousness and recognition of the urgency of deploying capital quickly.

Targeted returns for RREAF are 20+ IRR with 7% current yields.  However, yields will vary from transaction to transaction.  We believe that our recent acquisitions in the market and past historical performance suggest that these returns are achievable.

Understanding that foreign direct investment in the U.S. comes with complexity and tax consequences for foreign investors, Rosemont has established an investment vehicle specifically paired to the needs of non-U.S. capital which not only shields large portions of the profit in our deals from tax but also protects investors from having to register with the IRS.  Upon request, we will make available to you a summary document of our legal and tax structures which have been created and approved by our lawyers at Greenberg Traurig LLP, one of the leading U.S. law firms serving real estate groups.

The fund has targeted roughly half of its investments to be raised from domestic U.S. investors and the other half from foreign sources.

All the Best,

Devon