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Guys,

Docs are out to GT. Should have a completed CIM next week. We also have the PWC report done. So progress is happening.

From: Sam Natapoff [mailto:snatapoff@yahoo.com]
Sent: Friday, January 28, 2011 05:58 AM
To: Dan Burrell; Hunter Biden <hbiden@rosemontseneca.com>; Devon Archer <darcher@rosemontcapital.com>
Subject: Draft text for letter to Bader Al-Saad, Managing Director, KIA

Hi guys,

Here's my first cut at the letter to Bader Al-Saad, the Managing Director of the Kuwait Investment Authority.

Here are some parameters:

A) the letter should not be over 2-3 pages. It should be concise, complete, and address key concerns (i.e. first fund, returns, previous performance, etc)

B) Ambassador Al-Sabah called me yesterday, telling me he had already spoken to Al-Saad about it, so we should get this out asap.

C) The fund must be described as raising at least $1 billion (I told Ambassador Al-Sabah yesterday that $500 million was being raised domestically and $500 million from foreign sources but we can discuss how we talk about it in future); Dan, could you please produce an amended flip book for large foreign investors that reflects the $1 billion figure and a minimum investment size of $25 million? Thanks.

D) Taxation and estimated returns -- I took a skimpy cut at this but I have no idea of whether it was either accurate or acceptable to be in this letter.

E) I included mention of PWC's audit of RR's performance. I think we can assume this letter will be treated as confidential by KIA and we don't need to ask for a confidentiality agreement (unless they actually request the document itself).

F) I think the ask has to be $150-$200 million. KIA's assets are estimated at over $200 billion, they add over $3 billion in oil contributions annually, and anything less won't make it on their radar screen.

Please have a look and make edits. Could I ask people to get me their versions by 4pm?

Thanks.

Sam


Dear Mr. Al-Saad,

His Excellency Ambassador Al-Sabah kindly suggested that we contact you concerning an investment opportunity we are bringing to market. We ask that you consider an investment of $150-$200 million.

In brief, we are raising a $1 billion-plus real estate fund that will be focused on acquiring, managing, and ultimately disposing of U.S. commercial real estate in secondary markets (e.g. Houston, Phoenix, Long Beach, et al) within the next 12-24 months. The fund is seizing the historic opportunity offered by the current generational depression in U.S. commercial real estate values. Targeted acquisitions are high quality, non-distressed multi-tenant office buildings at deep discounts to replacement costs where our real estate company, Rosemont Realty, currently has significant presence and historical success.

Founded in 1991, Rosemont Realty is a leading company in this space with a twenty-five year record of significant returns precisely in this area of acquiring/managing U.S. secondary markets commercial real estate as a vertically-integrated asset management platform. The $1 billion raised by this fund will supplement the $1.6 billion Rosemont Realty currently owns and manages in US commercial real estate, about 15 million square feet across 29 US states.

Rosemont Realty's performance history is strong: its full-cycle investment programs have generated gross averaged annualized returns on investment of 23.05% since 1992 on over 90 transactions. Its current investment programs have generated gross averaged annualized yields of 7.41%. An audit of and attestation to the validity of Rosemont Realty's results and performance has been performed by PriceWaterhouseCoopers and is available upon request.

Rosemont Realty, Rosemont Seneca, and Rosemont Capital have all raised multiple funds in the past, including real estate, TALF, coinvest, and other funds. The senior management of this project has on average 26 years of experience with diverse backgrounds in commercial property and private equity.

With the benefit of over two decades of experience, we have identified three types of preferred assets and defined a valuation zone to better construct a predictable value chain and ensure strong returns for investors. We target internal rates of return on prospective acquisitions at varying levels, twenty to thirty percent on partially stabilized assets, high teens to mid-twenties for stabilized assets, and middle to high teens for fully stabilized assets. As a senior actor in this space, Rosemont Realty enjoys the institutional advantage of significant networked deal flow and has an information gathering advantage concerning available high value properties in these three classes unmatched by other market participants.

A critical factor is timing. Acquisition prices of targeted assets (core and core plus properties) within the valuation zone will soon escalate beyond optimum levels as the U.S. commercial real estate market continues to recover. Rosemont Realty acquisitions can begin (and have begun) immediately; fund capital raised is not conserved in tranches but is immediately deployed to take best advantage of time-sensitive opportunities. Such deployment also allows for immediate payment of dividends to fund investors from current yields. However the order of magnitude of returns to investors will hinge upon the rapidity with which Rosemont Realty can obtain and wield fund assets.

Regarding taxation, the fund’s structure is particularly attractive to foreign capital. Our legal advisors estimate that the fund's returns to foreign investors (on a combination of current yields and internal rates of return) to be a blended rate of between 15-20% (details available upon request).

Finally, all investments made in the fund will enjoy complete confidentiality.

We ask that you consider an investment of $150-$200 million. The fund has targeted roughly half of its investments to be raised from domestic U.S. investors and the other half from foreign sources. Our track record, management team, and situation have created strong external demand for participation, allowing us to maintain high quality control and and an exclusive group of investors. We seek a few significant partners to provide the capital necessary to take advantage of this historic moment in the U.S. commercial real estate market.

Ambassador Al-Sabah was very kind to put us in touch with you. Please let us know if we can supply you with any supplemental information.