“someone’s sitting in the shade today because...
TRANSCRIPT
“Someone’s sitting in the shade today because
someone planted a tree a long time ago.”
-Warren Buffet
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
Disclaimer
THE INFORMATION CONTAINED HEREIN IS PROVIDED TO YOU AT THE REQUEST FOR INFORMATION PURPOSES ONLY AND IS NOT, AND MAY NOT BE RELIED ON IN
ANY MANNER AS, LEGAL, TAX OR INVESTMENT ADVICE AND DOES NOT COSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY AN INTERET IN
GREENBRIDGE MANAGEMENT INC. AND GREENBRIDGE INVESTMENT PARNERS INC. (COLLECTIVELY, “GREENBRIDGE”). THE INFORMATION CONTAINED HEREIN
PROVIDES A SUMMARY ONLY AND IS SUPERSEDED BY, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO, THE OFFERING MEMORANDUM, WHICH CONTAINS
ADDITIONAL INFORMATION ABOUT THE INVESTMENT OBJECTIVE, TERMS AND CONDITIONS OF AN INVESTMENT IN THE SPECIFIC OPPORTUNITY AND ALSO
CONTAINS TAX INFORMATION AND RISK DISCLOSURES THAT ARE IMPORTANT TO ANY INVESTMENT DECISION, AND THE DETAILED PROVISIONS OF THE LIMITED
PARTNERSHIP AGREEMENT.
INVESMENT WILL INVOLVE SIGNIFICANT RISK DUE TO, AMONG OTHER THINGS, THE NATURE OF THE INVESTMENT. NO ASSURANCE CAN BE GIVEN THAT
INVESTMENT OBJECTIVES WILL BE ACHIEVED OR THAT INVESTORS WILL RECEIVE A RETURN OF THEIR CAPITAL.
CERTAIN INFORMATION CONTAINED HEREIN CONSTITUTES “FORWARD-LOOKING STATEMENTS,” WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY SUCH AS “MAY,” “WILL,” “SEEK,” “SHOULD,” “EXPECT,” “ANTICIPATE,” “PROJECT,” “ESTIMATE,” “INTEND,” “CONTINUE,” OR “BELIEVE” OR THE
NEGATIVES THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. DUE TO THE VARIOUS RISKS AND UNCERTAINTIES, INCLUDING THOSE
SET FORTH UNDER “RISK FACTORS AND POTENTIAL CONFLICTS OF INTEREST” IN THE OFFERING MEMORANDUM, ACTUAL EVENTS OR RESULTS OR THE ACTUAL
PERFORMANCE OF INVESTMENT MAY DIFFER MATERIALLY FROM THOSE REFLECTED OR CONTEMPLATED IN SUCH FORWARD-LOOKING STATEMENTS.
GREENBRIDGE AND THEIR RESPECTIVE AFFILIATES BELIEVE THAT SUCH STATEMENTS AND INFORMATION ARE BASED UPON REASONABLE ESTIMATES AND
ASSUMPTIONS. HOWEVER, FORWARD-LOOKING STATEMENTS AND INFORMATION ARE INHERENTLY UNCERTAIN AND ACTUAL EVENTS OR RESULTS CAN AND WILL
DIFFER FROM THOSE PROJECTED. THEREFORE, UNDUE RELIANCE SHOULD NOT BE PLACED ON SUCH FORWARD-LOOKING STATEMENTS AND INFORMATION.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THAT WHICH IS CONTAINED HEREIN AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED OR RELIABLE. WITHOUT THE PRIOR
WRITTEN PERMISSION OF GREENBRIDGE: (I) THE INFORMATION IN THIS DOCUMENT MAY NOT BE DISCLOSED OR OTHERWISE PROVIDED TO OTHERS; AND (II) THIS
DOCUMENT MAY NOT BE REPRODUCED OR PROVIDED TO OTHERS, IN EACH CASE WHO ARE NOT DIRECTLY CONCERNED WITH YOUR DECISION REGARDING SUCH
INVESTMENT. YOU WILL BE RESPONSIBLE FOR COMMUNICATING THE CONFIDENTIAL NATURE OF THE INFORMATION AND THIS DOCUMENT TO ALL SUCH PERSONS
AND THE COMPLIANCE BY ALL SUCH PERSONS WITH THESE RESTRICTIONS.
CERTAIN INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM PUBLISHED SOURCES AND/OR PREPARED BY THIRD PARTIES AND IN CERTAIN CASES HAS
NOT BEEN UPDATED THROUGH THE DATE HEREOF. WHILE SUCH INFORMATION IS BELIEVED TO BE RELIABLE FOR THE PURPOSES USED HEREIN, NONE OF
GREENBRIDGE OR ANY RESPECTIVE PARTNERS, SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES ASSUMES ANY RESPONSIBILITY
FOR THE ACCURACY OF SUCH INFORMATION.
THE PROJECTED INTERNAL RATES OF RETURN AND EQUITY MULTIPLES INCLUDED IN THIS PRESENTATION ARE CALCULATED USING A MODEL AND ARE BASED
UPON ASSUMPTIONS DETERMINED BY THE SPECIFIC PARTNERSHIP IN EACH RESPECTIVE INVESTMENT OPPORTUNITY. THE PROJECTED RETURNS ARE SUBJECT
TO INHERENT LIMITATIONS INCLUDING THE PROJECTION OF MARKET AND ECONOMIC RISKS. THE ACTUAL RETURNS ACHIEVED ON UNREALIZED INVESTMENTS
WILL DEPEND ON, AMONG OTHER FACTORS, FUTURE OPERATING RESULTS, THE VALUE OF THE ASSETS AND MARKET CONDITIONS AT THE TIME OF DISPOSITION,
LEGAL AND CONTRACTUAL RESTRICTIONS ON TRANSFER THAT MAY LIMIT LIQUIDITY, ANY RELATED TRANSACTION COSTS AND THE TIMING AND MANNER OF SALE,
ALL OF WHICH MAY DIFFER FROM THE ASSUMPTIONS AND CIRCUMSTANCES ON WHICH THE VALUATIONS USED IN THE PRIOR PERFORMANCE DATA CONTAINED
HEREIN ARE BASED. ACCORDINGLY, THE ACTUAL REALIZED RETURNS ON UNREALIZED INVESTMENTS MAY DIFFER MATERALLY FROM THE RETURNS INDICATED
HEREIN. THE PROJECTED RETURNS SHOULD NOT BE REGUARDED AS A REPRESENTATION OR A GUARANTEE THAT A SPECIFIC INVESTMENT WILL REFLECT ANY
PARTICULAR PERFORMANCE OR THAT IT WILL ACHIEVE OR IS LIEKELY TO ACHIEVE ANY PARTICULAR RESULT OR THAT INVESTORS WILL BE ABLE TO AVOID
LOSSES, INCLUDING TOTAL LOSSES OF THEIR INVESTMENT. ALL DATA AND NUMERICAL INFORMATION HEREIN ARE APPROXIMATE, UNLESS OTHERWISE NOTED.
GREENBRIDGE CAUTIONS INVESTORS TO CAREFULLY CONSIDER THE RISKS INVOLVED WHEN INVESTING IN THE REAL ESTATE MARKETS. INVESTORS SHOULD
REVIEW THE RISK FACTORS AND MARKET COMMENTARY AS DESCRIBED IN THE OFFERING MEMORANDUM BEFORE INVESTING. ALL PERFORMANCE AND OTHER
INFORMATION CONTAINED HEREIN IS AS OF JUNE 30, 2014 UNLESS OTHERWISE INDICATED OR THE CONTEXT OTHERWISE REQUIRES.
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
What Makes
Greenbridge differentFrom Other Real Estate Companies?
Founded in 2012, Sean Hashem and Fareed Kanani formed Greenbridge Investment Partners, Inc. and
Greenbridge Management Company to acquire and manage value add real estate properties through
repositioning and turn around to achieve above average returns on invested capital. The principals at
Greenbridge are committed to their investors, lenders, brokers and tenants to provide success that is
mutually dependent and strictly performance driven.
The partners at Greenbridge have closed over $300 million in commercial real estate transactions in the
last three years.
The Principals of the firm have played an integral part of over $1 Billion in real estate transaction in the
last quarter century.
To provide our stakeholders steady deal flow with above average cash flow and overall
returns by acquiring class A type value added real estate. We achieve our targeted returns
through the use of customized debt and equity structures that maximize returns on equity
invested.
OUR STORY:
OUR MISSION:
GREENBRIDGE has a diverse portfolioof commercial office, medical, and retail properties.
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
The Greenbridge Value Add Method
How Does Greenbridge Create Value for Its Partners?
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
The Value Add Method
A look At The Market Through Our Lens
Attractive properties with upside potential are limited and
sometimes difficult to locate. Being the first to the race and
having a visionary approach has enabled Greenbridge to
acquire premiere real estate.
Using our vast relationships with credit tenants primarily in
California, we can quickly identify the right fit tenant and
unlock the embedded upside immediately. Simultaneously,
our firm applies creative equity structures to maximize
capital returns.
Greenbridge typically acquires real estate that is overlooked or rejected by a traditionalist mentality. Our strategy in value-added real
estate investing is designed to mitigate risk by employing a higher level of due diligence, and re-evaluating the property’s highest
and best use.
Once we acquire a problematic, underutilized, or mismanaged property we immediately begin to create value through repositioning,
and perhaps refurbishing. In time, Greenbridge can completely improve the performance and quality of the asset. Greenbridge will
then refinance or sell the enhanced property to an institution, or directly to a user at a handsome profit.
Greenbridge maintains ties with REITS and closed end funds with sizable real estate portfolios. These large corporate real estate
owners generally look at real estate holdings differently than someone who is solely in the real estate ownership business. Often
when corporations sell properties, being so large, they simply wish to remove the asset from their portfolio regardless of whether it
was profitable or not; enabling them to get on with their core business.
Since the big funds have little to no desire to reposition the properties chosen by their committee members to be sold; it presents a
great opportunity for a repositioning team to step in and maximize the value of the property for themselves.
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
What We See vs. What Others Do Leveraging Our Market Experience
Tenants are not performing well
Building is not producing enough revenue
Short term tenants do not match our investment
needs
Location does not conform to our requirements
Too big of a project for the limited resources that
are available
Interest rates are really low – let’s just buy
I want a Los Angeles property and am willing to
give up exceptional profits with lower cash flows
so it is “close to home”.
Purchase on a very low basis irrespective of in place cash flow;
but always looking to get a future cap rate in excess of 10% or
more.
How quickly can we reposition the asset to refinance and return
original capital to partnership?
How can we maximize our equity investment using optimal
structures?
Tenancy lacks synergies, this can be addressed to add value
Potential additional revenue can be created, such as adding a
billboard or charging for parking
Short term tenants need to be removed so a large credit tenant
that we have relationships with can be brought in
Current tenants are not appropriate for the market area and are
paying well under market rents, per our rigorous market study
The property can be repositioned to a completely new use
Is there excess land that can be entitled or developed in the
future?
Using our local market knowledge to identify a location that is up
and coming and will be demanding higher rent in the future
Provide Greenbridge’s vast network of in house real estate
professionals to add value
Greenbridge Partner’s PerspectiveTraditional Real Estate Buyer’s Perspective
The Value Add Method
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
Lenders
•Commercial Banks
•Insurance Companies
•Regional Banks
•Investment Banks
•CMBS – Securitized loans
Brokers
•Investment Brokers
•Investment Banks
•Tenant Representative
•Building & Leasing Brokers
Services Provided
•Property Management
•Legal & Tax Network
•Physical inspections
•Due Diligence
•Accounting/Reporting
•Compliance
•Consultation
Owners
The Value Add Method
Greenbridge
The Greenbridge Network
• Developers
• JV/Operators
• Real Estate Managers
• Institutional Capital
1. Acquisition of Property Through a
Distressed or Otherwise Unique
Opportunity
2. Improve Property Through
Professional Management and
Specific Improvement /
Turnaround Strategy
3. Lease Vacant Space & Create
Tenant Synergies to Stabilize Rent
Roll
4. Transform Property to Best-in-Class for Core
Positioning
5. Sell Property at Higher
Multiple/Refinance
Typical Property Life Cycle
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
A Real Life Example of a Value Add Plan For Our Latest Project
The Value Add Method
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
The Los Angeles Market at a Glance• Rental rates have reached the proverbial trough following the Great Recession and during the recovery period.
• It is clear by the graphs below, that we have hit the inflection point in downward pricing that existed in the market over the last
couple years from both a macro and micro geographical level.
• Over the last year and half, pricing has started to pick up strong momentum, which will help support heightened valuations.
– Los Angeles is on the brinks of the expansion phase in a business cycle with a lot of room for pricing to grow, as we are still
far away from pre-recessionary pricing levels.
• A shift has occurred in the pricing pressure paradigm, which is now in favor of owners
• There are many fatigued and inexperienced owners that have had enough over the last 7 years and are looking to sell their
assets.
• The 5-7 year investment horizon clock is coming due for many of the institutional funds, resulting in divestment of their assets.
• All of these factors, coupled with Greenbridge’s rigorous asset selection process, efficiency and forward-thinking will allow us to
thrive and reach the robust returns we seek for ourselves and investors/partners.
Office Rental Rate for Los Angeles, CA ($/SF/Year) Retail Rental Rate for Los Angeles, CA ($/SF/Year)
• Represents realized inflection points
• Source: LoopNet at Q2 2014
The Value Add Method
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
The Partnership Defined
What Does a Greenbridge Partnership Look Like?
11
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
Investment Structures
& Targeted Returns
*Past performance does not guarantee future results or returns.
General Partner (GP) Greenbridge Investment Partners
Limited Partner (LP)
Minimum Investment$500,000
Typical Equity Size $3ML - $10ML after which 60% - 80% financing is utilized depending on project
Asset ManagerGreenbridge Investment Partners will manage the property and make ownership
decisions alongside investor / partners
Ownership InterestThe majority of the investment equity shall be provided by the Limited Partners. In
return, the LPs shall receive an ownership interest and priority of cash flows
Projected Returns*
Targeted year over year overall return of 20% to 30% (IRR) to the partnership before
promote - Equity multiples of 2.5x to 3.5x
Target cash on cash returns of 10% to 15% annual returns to partnership
Target debt structure of 60% to 80% loan to cost - higher leverage will be used if
appropriate
Limited Partner Preferred Return: 5% to 8%
Anticipated holding period: Between 3-10 years depending on the scale of the project
Distriubtion Priority
Each respective deal will have a unique structure in regards to priority of cash flow.
However, typically after preferred return has been delivered, the investors will receive
all, or most, of his/her equity before the LP/GP splits begins
Please review cash flow example provided for more details
Lender Recourse
If recourse is required by lender, individual principals of Greenbridge will sign the
recourse provisions
*Risk Factors
An investment in real estate involves risk of loss. Investors should purchase assets
within a specific risk category that best suits him/her, and must have to have the ability
to absorb a loss of investment.
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
The Partnership Defined
Investors / Partners Greenbridge Investment Partners
Initial Equity Contribution
Potential Capital Call Requirements
No such requirement needed to date
Receive tax benefits, such as depreciation
and interest deductions
Vote when necessary on major events such
as when to sell or refinance
Find potential opportunities in open market
Secure property at target price
Secure financing not available to everyday investor
and guaranteeing loans when necessary
Underwrite property and execute lengthy due
diligence on acquisition
Oversee formation of partnership
Once acquired - manage building directly in-house
Leasing and Sales
Accounting Services
Budgeting and Reporting
Construction Management
Position property to begin turnaround/repositioning
Produce plans with architect if applicable
Create plan to bring rents up to market and secure
credit tenants
Once stabilized - potentially recapitalize property in
the form of refinance through banking relationships
Continue to manage property and provide cash
flow to partnership
When appropriate, sell property and find potential
exchange properties
Each Party’s Respective Rolls
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
Investor 1
123 West Main Street LLC,
a Delaware limited liability company
123 West Main Street
Los Angeles, CA 90022
25% Member
Greenbridge Investment Partners Investor 2
25% Member
Property
50.0% Member(Subject to Priority of Cash
Flows)
Manager & General Partner
• Investors are listed on title and
the LLC with their capital priority
clauses in operating agreements
• Investors have access to “The
Greenbridge Online Data Room”,
an online data base with all
financial data of property.
• Income/expense report
• Rent Roll
• Year-end financials
• Investors receive their pro rata of
the tax benefits, such as
depreciation and interest
deductions
• Investment risk limited to only
capital invested by investor due to
Greenbridge Principals
guaranteeing loans from banks
and/or attaining non-recourse
debt.
The Legal Structure
The Partnership Defined
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
Each partner will have access to our
“Data Portal” for their particular
investment. Inside they will find all
applicable information and financial
reporting on their respective
investment.
This provides our partners with the
utmost level of transparency.
The “The Greenbridge Online Data Portal”
The Partnership Defined
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
The Greenbridge Fee Structure
The preferred return is the cash flow that is
delivered to the investor with priority before
there are any profit sharing fees with
Greenbridge. This usually ranges from 5%-8%.
At an 8% preferred return, the investor would
have priority of the first 8% of cash flows before
any profit sharing splits. This is a year over year
number and accrues if actual returns being paid
fall below the preferred return required payout.
Distribution of promote is usually carried out
quarterly.
Fee Terminology
Preferred Return
PromotePromote is the fee to Greenbridge, as a
percentage, for every dollar of value that
Greenbridge adds to project in excess to the
year over year preferred return, plus return of
capital. Typically our promote structure is
between 40%-50% depending on several
factors specific to each deal
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
Cash Flow Example of Preferred Return & Promote
**The above is for illustrative purposes only. Cash flows and selling price have been shown as an example to illustrate "Promote" and "Preferred Return" terms and do not represent any particular deal or particular rate of return that an investor should expect.**Risk of loss as well as gains can be expected.**Management, acquisition, & disposition fees not show.
The Greenbridge Fee Structure
1 Preferred Return 8% Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
2 Promote Split 50/50 Free Cash Flow to Partnership $0.00 $200,000.00 $225,000.00 $250,000.00 $275,000.00 $300,000.00 $325,000.00 $350,000.00
3
4 Building Price $5,000,000 Preferred Return Direct to Investors @ 8% with no split $160,000.00 $160,000.00 $160,000.00 $160,000.00 $160,000.00 $160,000.00 $160,000.00
5 Down Payment $2,000,000
6 Note: Down Payment is Equity Balance of Free Cash Flow Now Split at 50/50 $40,000.00 $65,000.00 $90,000.00 $115,000.00 $140,000.00 $165,000.00 $190,000.00
7 Contribution of Investors/Partners Investors 50% $20,000.00 $32,500.00 $45,000.00 $57,500.00 $70,000.00 $82,500.00 $95,000.00
8 Greenbridge 50% $20,000.00 $32,500.00 $45,000.00 $57,500.00 $70,000.00 $82,500.00 $95,000.00
9
10 NET CASH FLOW
11 Investor/Partner Income (Row 4+7) ($2,000,000.00) $180,000.00 $192,500.00 $205,000.00 $217,500.00 $230,000.00 $242,500.00 $255,000.00
12 Greenbridge Income (Row 8) - $20,000.00 $32,500.00 $45,000.00 $57,500.00 $70,000.00 $82,500.00 $95,000.00
13
14 Selling Price in Year 7: $10,000,000
15 Profit: $5,000,000
16
17 Investor/Partner 50% Share of Sale $2,500,000.00
18 Greenbridge 50% Share of Sale $2,500,000.00
19
20 TOTAL BLENDED RATE OF PROFIT SHARE:
21 Total Cash Flow to Investor / Partner Over Entire Period: $4,022,500.00 Investor / Partner: 58.09%
22 Total Cash Flow to Greembridge Over Entire Period: $2,902,500.00 Greenbridge: 41.91%
17
GREENBRIDGE INVESTMENT PARTNERS INC.9355 WILSHIRE BLVD, SUITE 350. BEVERLY HILLS, CA. 90210
9355 Wilshire Boulevard • Suite 350 • Beverly Hills, California 90210 • Office (310) 273-5511 • Fax (310) 273-1177 | WWW.GREENBRIDGECORP.COM
VALUING
COMMUNITY,
SERVICE,
& RESPECT
“UNDERSTANDING AND
INTEGRITY ARE THE
CORNERSTONES
SUPPORTING A
COORDINATED &
SUCCESSFUL OUTCOME.”
www.greenbridgecorp.com