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Real Estate Business Plan Executive Summary

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Real Estate Business Plan Executive Summary document sample

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									Real Estate Executive Summary
Lancaster Real Estate Development, LLC (“Lancaster”) is the wholly owned real estate management
and development subsidiary of Kenilworth. Lancaster is responsible for Kenilworth-owned real estate
projects, both for its dental centers and non-dental real estate investment projects. For the dental
center properties, Lancaster seeks out vacant land or shell-finished commercial buildings within
a defined target market and adapts the property to meet Kenilworth dental center specifications.
Lancaster manages the build-out and tenancy improvements of the multi-dentist, multi-disciplined
dental centers that make up a major portion of the Kenilworth real estate portfolio. Lancaster then
becomes the property manager attending to the maintenance of the building, and servicing the
triple-net leases for the building tenants.

The revenue generated by Lancaster real estate through the triple-net leases of the Kenilworth
buildings are syndicated to investors resulting in a better-than average rate of return for their real
estate investment. Additionally, there is an upside from property value appreciation associated
with the future property sale.

The combination of dental center net profits, profits from leasehold income, and the capital gain
from land and building development creates investor value and builds the financial strength of
Kenilworth.

Lancaster’s goal is to reach twenty to thirty acquisitions per year within the next three to four
years. Acquisitions that are corporate-related, or for the dental centers, have target areas geared to
previously researched demographics on dental service demand. Corporate properties are all tied
into the ideal placing of a dental center.

The terms of investment in a Lancaster real estate project are illustrated through a sample Kenilworth
project known as Mountainview Professional Building, LLC (“Mountainview”). Mountainview as an
example is fully subscribed and no additional investments are being requested. The “Mountainview




                                                                                                              F-1
                                        K eni lwor th Poi nt - Brok er D ealer D ue D i ligence S um m ar y
Business Plan” and “Due Diligence Notes” are included to provide a summary understanding of
similar dental center real estate investments offered through Kenilworth. The Mountainview PPM
is available upon request.

Lancaster is a subsidiary of Kenilworth assuring the same success in real estate investment as PMA
or other practice management companies assure the success of the dental centers. The real estate
component of a Kenilworth dental center aids in establishing the uniqueness of that center, and
facilitates the greater return on investment for Kenilworth, both from dental center and leasehold
income, as well as the capital appreciation of the property on which the dental center is its anchor
tenant.

Kenilworth has historically organized a new limited liability company to serve as an owning entity
of each property it acquires. Initially, Lancaster contracts for purchase of each property and assigns
the purchase contract prior to the purchase closing. Lancaster then provides build-out and ongoing
property management to the real estate affiliates of Kenilworth.

A real estate syndication entity is developed upon acquisition of the property. In the Kenilworth
Real Estate chart, the syndications are linked to the Terraca/Teraca entity that owns the property
and through which equity investors are acquiring a portion of the profits.




       For purposes of illustration, the Terraca/Teraca entities own the following properties:
          1. Terraca Higley, LLC: 3271 E. Queen Creek Rd., Building 2, Gilbert, AZ 85236
          2. Terraca Queen, LLC: 21321 E. Ocotillo Rd., Bldg. 1, Queen Creek, AZ 85242
          3. Terraca Surprise, LLC: 15549 North Reems Road, Suites 157, 159, 161, 163; and 15539
             North Reems Road, Suite 153 Surprise, Arizona 85374

          4. Terraca Baseline, LLC: 8405 E. Baseline Rd., #101, Mesa, AZ 85209
          5. Terraca Warner, LLC: 690 E. Warner Rd., Building 5, Gilbert, AZ 85296
          6. Terraca Foothills, LLC: 16725 South Desert Foothills Parkway, Building D, Phoenix,
             Arizona 85048. Title to the property has not been received, but design for the property
             has begun relying upon the option to purchase and grant of right to possession.

          7. Teraca Camelback, LLC: has contracted for the acquisition of the property located
             at 9515 W. Camelback Rd., Bldg. 1, Phoenix, AZ 85037. As of this date, the property
             purchase has not closed.




 F-2
        K e n i l wor t h Poi nt - B rok er D eal er D ue D ili gence S um m ar y
    Kenilworth Real Estate
                        Organization

                                Terraca                     Valleyview
                                                            Professional
                               Higley, LLC                  Building, LLC




                                Terraca                      Lakeview
                                                            Professional
                               Queen, LLC                   Building, LLC
                                                                                       Hillview
                                                                                     Professional
                                                                                     Building, LLC

Kenilworth Point, LLC           Terraca                   Canyonview
                                                           Professional
   Holding Company            Surprise, LLC                Building, LLC
                                                                                    Hillside View
                                                                                     Professional
                                                                                     Building, LLC

     Lancaster                  Terraca                  Mountainview
                                                            Professional
  Real Estate Company          Warner, LLC                  Building, LLC
          LLC *



                                 Teraca                     Crestview
                                                            Professional
                              Baseline, LLC                 Building, LLC




                                 Teraca
                              Foothills, LLC




                                Teraca
                             Camelback, LLC


                                                           * Wholly Owned by Kenilworth Point, llc



                                                                                                 F-3
                           K eni lwor th Poi nt - Brok er D ealer D ue D i ligence S um m ar y
                                                          Real Estate Operations

Overview
Kenilworth organized Lancaster in December, 2006, to provide property management and development
services. To date, it continues to provide developmental real estate projects to Kenilworth relating to
the dental centers and other investment opportunities. It is responsible for property management
and providing investors the triple net lease income earned at the dental centers and for other building
tenants.

Each time a real-estate project is developed, Kenilworth forms a new company which serves as the
acquisition entity for the real estate. As real estate projects develop, investors are offered a percentage
of the ownership and profits to be derived from the project. This can be in as simple a format as a one-
to-one association between, for example, a down payment and ownership interest, or as a partner in
a long-term, triple net lease which includes gross revenue payments with one of the dental centers.

Lancaster’s role is to manage and transact real estate projects, both in terms of representing the holding
company as an asset-based entity and as an operating or management company. Lancaster identifies
new real estate projects, contracts for its acquisition, performs due diligence investigations, supervises
the activities during construction (for both the building and tenant improvements) and thereafter
becomes the property manager.

Lancaster complements the formation of a dental center by selecting those sites amenable to both
the car and foot traffic of a dental center as well as complementary businesses, while at the same time
providing a piece of valuable real estate. The latter can be either in terms of asset holding, or as owner
of a triple net lease which the dental center and other tenants contribute.



Dental Center & Dental Center Site Selection
Dental center tenants have traditionally proven to be good tenants for a number of reasons. The key is
the recessionary insensitivity of medical industries compared with other market sectors. The medical
and dental industries are generally less elastic in a recessionary market when compared to other
consumer markets. As an industry, dentists typically have one of the lowest default rates on loans. It
is, therefore, not surprising that Lancaster
focuses on those sites in those areas where
a dental center location has been awarded
merit through market research.

Site selection consists of population and
terrain demographics, the nature of the
commercial areas, access, marketing,
visibility and ease of permitting in building
the optimal structure.




 F-4
       K e n i l wor t h Poi nt - B rok er D eal er Due D i ligence S um m ar y
Kenilworth Real Estate Projects
Whether capitalization of the funds required for acquiring real estate is occasioned from a securities
offering or internally financed, each Lancaster real estate project has its own separately identified
means of raising capital in conjunction with the objectives of broker/dealers and investors. There
is no single uniformed means for raising capital to buy land, garner permits, construct a building,
develop tenant improvements, and begin earning income from triple net leases.

Kenilworth real estate projects have traditionally been structured to accommodate 1031 exchanges or
other investor related alternative asset holding specifications.



Lancaster Management
Lancaster generally assigns an employee to act as project manager for each real estate project. The
project manager’s responsibility is to supervise and monitor the tenant improvement development
and/or construction from ground up development when necessary. After acquisition and necessary
improvements are completed, Lancaster continues to act as property manager for the holding company
with on-site staff available.

After a property is acquired, the project manger takes over that project and sees it through completion
handling all aspects until the dental center begins operating as a tenant. Because there is a relationship
from the ground up, the project manger continues to report to and represents Lancaster as property
manager.

Lancaster is responsible for, and takes care of, the property just as a property manager or landlord
would in a cooperative manner with the dental center. The lease of the property is a true triple net
lease, so the dental center is solely responsible for the payment of the property expenses.



                                                                                                               F-5
                                         K eni lwor th Poi nt - Brok er D ealer D ue D i ligence S um m ar y
                                          Lancaster Officers
                                 Mr. Paul Mangelson is the President of Lancaster and a key
                                 person in Kenilworth’s project financing. Mr. Mangelson
                                 started out as a commercial real estate agent, and from there,
                                 finished a degree in business management, accounting,
                                 finance, and real estate. Thereafter he went into institutional
                                 real estate as an acquisition disposition and finance officer for
                                 approximately 12-14 years. Moving forward, he became the
                                 principal of a number of different real estate based projects,
                                 and worked extensively on commercial real estate and finance
                                 for other people as a broker, or as a partner. He has experience
with many types of real estate and finance mechanisms, vehicles and property types in about 20
different markets around the country.

The following Paul Mangleson biography is found in various real estate syndication PPMs sponsored
by Kenilworth:

Mr. Mangelson began his career in the investment arena, handling both equities and real estate, in the
early 1980’s. Soon specializing in real estate, he ran a successful, small brokerage business at the age of
25. Wanting to expand to more sophisticated transactions, and following attainment of a university
finance/management degree, he spent the next 15 years in the institutional real estate marketplace.
As a corporate real estate executive he has acquired, disposed, or financed over $1.0 Billion in small
to large projects, including office, industrial, multi-family, retail, commercial, business property,
development, and specialty. He is skilled in both standard and niche deal structures and financial
techniques. Complimenting this is his detailed experience with the unique characteristics of the
many various property and project types as well as asset and portfolio diversification strategies. His
expertise spans the country, having hands on experience in over 20 major markets. Mr. Mangelson
has personally handled or managed all aspects of transactions including purchase and sales, equity
and debt financing, valuation and appraisal, project prospectus / packaging, legal documentation,
leasing and tenancies, business plans, value maximization, asset protection, etc.




 F-6
       K e n i l wor t h Poi nt - B rok er D eal er D ue D ili gence S um m ar y
      Mountainview
F-7                  F-7
BUSINESS PLAN SUMMARY                                                                                                                                             Note 1


The Company:           Mountainview was formed to acquire 10% of the membership units in Terraca Warner and
to receive 85% of the Net Profits and Future Appreciation arising from the Property. Terraca Warner has contracted
with our Company to assign 85% of the Net Profits from the Property, and 85% of the equity above the Project’s
Value, in consideration for a voting proxy for the 10% membership units of Terraca Warner to be purchased by us.
Terraca Warner has entered into a purchase agreement to acquire the Property and intends on providing tenant
improvements pursuant to a lease with a dental center currently in development. As used herein, “Net Profits”
means all funds and proceeds received by Terraca Warner from any source other than capital contributions, less
the sum of (i) all payments of principal, interest and other amounts then due and payable on any indebtedness
relating to the Property; (ii) all expenses and expenditures paid by Terraca Warner on behalf of the Property; (iii)
a 3% management fee payable to Lancaster; and (iv) a reasonable working capital reserve fund agreed upon by
Mountainview, Lancaster and Terraca Warner.
Located on the Property is an approximately 6,900 square foot facility to house a sole tenant, a dental clinic funded
through its separate private placement memorandum. The sole tenant, a dental clinic, will occupy the entire 6,900
square feet. Terraca Warner will receive a mortgage of approximately $2,231,000 to construct tenant improvements
to complete the Project.
Terraca Warner intends to acquire the Property for $1,456,560 and contract for tenant improvements approximated
at $1,332,000. Terraca Warner has determined the Project’s estimated value to equal $4,280,000 (“Project’s Value”),
which is significantly higher than the purchase price of the Property and the Property’s development costs. Terraca
Warner has determined the Project’s Value, above the cost of the Property and tenant improvements, for the
following reasons: (1) Terraca Warner has identified and contracted with a long term tenant, for a period of 20 years
with a 10 year renewal option; (2) the tenant lease terms includes a market rate base rent, including a 3% annual
increase, beginning the month that the Property is purchased; and (3) in addition to the base rent, the tenant will
pay 6.25% of its gross revenue. Terraca Warner believes that, based upon the tenant’s proforma, the participating
portion of the lease may become significant and the present value of the income stream was taken into account in
determining the Project’s Value.
Our management has identified this Project because dental tenants have a historically low default rate and we
believe that the Net Profits from the triple net participating lease should provide a substantially higher return than
alternative real estate investments. We have identified these circumstances which we believe increases the value of
the Property but a certified appraiser may not take these circumstances into account in an appraisal.
If we determine through our due diligence investigation of the Property, the building, Terraca Warner or the sole
tenant that the Property may not be a suitable investment, our management reserves the right to invest the proceeds
from this offering into reasonably equivalent real properties for a similar investment.

Capitalization:                         A $2,160,000 Private Placement Offering is currently underway         Note 2
to provide capital for Mountainview through Stonehurst Securities, Inc. The minimum investment is $50,760.
For the Project, Terraca Warner intends on receiving a mortgage in the amount of $2,231,000 which shall be recorded
against the Property and is required to complete the building, tenant improvements and other project expenses. Our
funding will be used to pay to Terraca Warner for 10% of the membership units of Terraca Warner.

Timeline: We have contracted with Terraca Warner for the purchase of 10% of its membership units                   Note 3
which shall be utilized for the Project. As of this date, Terraca Warner has entered into negotiations with the
property owner and has a purchase contract to acquire the Property. Due diligence investigations into the Property’s
suitability shall continue until the purchase of the Property. Terraca Warner shall assign the Net Profits from the
Property, pro rata, as we purchase membership units from Terraca Warner. Upon the acquisition of the Property,
tenant improvements will begin. It is estimated that after the acquisition of the Property it will take 8 to 10 months
to complete tenant improvements to the building and the dental clinic’s opening.

Return of Capital:            During the first year of our operations and capitalization, we intend to distribute
approximately 7% of the capital raised, quarterly. Investor’s initial return of capital will be prorated from the date of
the investor’s subscription through the end of the quarter. These initial payments are a return of investor capital for
the purpose of creating a consistent cash flow from the investment. We expect this return of capital to begin the first
quarter that we receive an investor’s capital and to continue for a period of one year. Payments received during the
first year are not distributions of profits.




      F-8
    Th is B u s in e s s P l an S u mmar y i s no t an o f fe r to s e l l i nterests in Mou ntainv iew Profession al B u il din g, LLC. Any su ch offer c an only be ma de
                th rou g h M o u nt ai nv i e w ’s Co nf i de nt i al Pr i vate Pl acem ent Mem oran du m w h en it accom pan ies th is B u sin ess Pl an S u mma r y.
                                                                                                                                                                                  Note 4


    Investment: A $100,000 investment is projected to generate a ten-year cash flow of approximately
    $180,000. That would provide an 18% average annual return to the investor for the first ten years of operation. If
    the building were to be sold after ten years, the estimated average annual return from cash flow and appreciation
    would be approximately 27%.

    Distributions: Initial distributions of Net Profits from Mountainview to its investors will begin the first
    quarter that base rent payments are received. The tenant will begin paying the base rent upon Terraca Warner’s
    acquisition of the Property. The distributions of the Net Profit arising from the participation portion of the lease
    are estimated to begin the first quarter that the clinic opens. All distributions from Mountainview to its investors
    will be made quarterly. The participating lease requires the dental center to pay to 6.25% of its gross revenues.

    Triple Net Participating Lease: The building has been selected because it suits the needs of the                      Note 5
    dental clinic. Specialized tenant improvements will be provided as a condition of the lease contract. The
    contract will include a base rent that will be paid monthly once the facility is completed and a certificate of
    occupancy has been issued. The base rent escalates 3% annually to adjust for inflation. The participating lease part
    of the contract will require the sole tenant to pay 6.25% of the gross revenue of the clinic to the Property owner.
    The dental center profit participation payments are projected to commence the first quarter that the clinic is in
    operation. The lease contract will be true triple net. The primary tenant of the building will be responsible for all
    property taxes, utilities, maintenance, insurance and repair work. We will receive 85% of the Net Profits received
    by the tenant.

    Tenant Information:           The sole tenant shall be a dental clinic, which is managed by Dynamic Management
    Services, LLC (“DMS”), a dental management company that plans to operate a series of new, multi-discipline
    clinics under corporate ownership. The dental clinic will be funded through a separate Private Placement
    Memorandum and offering.

    Through corporate ownership of the clinic, proven management and marketing strategies and procedures can
    be effectively implemented and administered. This allows the dentists and the chair-side staff to fully focus
    on performing high-quality dental work. The clinic will have separate attractive, high-profile waiting areas for
    children and adults. The dental equipment will be of highest standard.

    The dentist staff at the clinic is designed to consist of two general dentists working in the pediatric field, two
    additional general dentists meeting the dental needs of the adult patients plus an orthodontist. This multi-
    discipline approach allows patients from each discipline to be referred to the other dentists. In this way, different
    market segments are reached allowing for the clinic to be supported by a smaller geographic area.

    The clinic will be open six days per week – ten hours per day. By utilizing an alternating schedule each dentist
    will work three ten-hour days per week, thereby utilizing the same equipment as the other dentist of the same
    discipline.

    The dental industry continues as one of the only remaining “cottage industries” in the U.S. health care. Seventy-
    seven percent of all dentists act as sole proprietors and a full 93 percent work in private practices. Despite this
    fractured base, the dental industry remains very stable with less than one percent of dentists defaulting on their
    practice loans. Furthermore, in many areas of the country there is a serious and growing shortage of dentists. An
    estimated 6,000 dentists retire annually while only 4,200 new dentists graduate. Also, a substantial dental practice
    management industry currently provides a variety of services to privately-owned dental practices. Furthermore,
    some large dental companies, similar to HMO’s, provide dental insurance as well as dental services. These HMO’s
    and a few other successful large dental companies own dental practices and hire dentists as employees.

    Management of Tenant:                 DMS’s personnel have over 30 years experience in the dental field. DMS has
    helped manage more than 500 private dental practices throughout the southwestern United States, routinely
    doubling the production and collections of those practices in an average of 90 days. The DMS team has also
    owned several practices, with annual collections averaging over $1,200,000 per dentist, while operating expenses,
    excluding the dentist’s salary, averaged only 40 to 45 percent. DMS employs Senior Dentists who recruit and
    coach the dentists and provide experience and clinical knowledge. DMS provides ongoing staff management
    through an on-site Office Manager who reports to a Regional Manager. This enables DMS to implement and
    maintain its practice management techniques and results.




                                                                                                                                                                         F-9
This B u s in e s s P l a n S u m m ar y i s no t an o f fe r to s e l l i nte re s t s in Mou ntainv iew Profession al B u il din g, LLC. Any su ch offer c an on l y be ma de
           th rou g h Mou nta i nv i e w ’s Co nf i de nt i al Pr i vate Pl ace ment Mem oran du m w h en it accom pan ies th is B u sin ess Pl an S u m m ar y.
USE OF FUNDS

The following table illustrates the amount of net proceeds to be received by us on
the sale of Units and the intended uses of such proceeds:




                                                                                                                                                       Note 6

                                                                                                                             2,000 Units
      OFFERING COSTS
      Gross Proceeds ...................................................................................................................$2,160,000

      Legal and Prepaid Accounting Fees ..................................................................................(125,000)
      Fees and Compensation to Stonehurst Securities, Inc. ...............................................(324,000)
      Reserve Fund for Return of Capital ...................................................................................(150,000)

      Net Proceeds to Mountainview from this Offering ....................................................$1,561,000

                       Total Estimated Funds Available ....................................................$1,561,000

      USE of NET PROCEEDS
      Total Funds Payable to Terraca Warner ......................................................................... $1,561,000

                       TOTAL USES .................................................................................................$1,561,000




  F-10
 Th is B u s in e s s P l an S u mmar y i s no t an o f fe r to s e l l i nterests in Mou ntainv iew Profession al B u il din g, LLC. Any su ch offer c an only be ma de
             th rou g h M o u nt ai nv i e w ’s Co nf i d e nt i al Pr i vate Pl acem ent Mem oran du m w h en it accom pan ies th is B u sin ess Pl an S u mma r y.
              Future Dental Centers
                                             Area Locations
                                                                                                                                                                                  Note 7




             Queen Creek                                                                                                                            Higley
1         21321 E. Ocotillo Road                                                                      2                            3270 E. Queen Creek Road
            Queen Creek, AZ                                                                                                                Gilbert, AZ




                     Warner                                                                                                                       Surprise
3        Warner and Lindsay Roads                                                                     4                             15599 North Reems Road
                Gilbert, AZ                                                                                                               Surprise, AZ



                                 PHOENIX, ARIZONA
                                                                                     Dazzle                     Cave Creek
                                                                                 Anthem                 Carefree
                                                                                                                  Scottsdale Rd.
                                                                                                d.
                                                                                           ek R




                       60                                                       17
                                     4
                                                                                       N Cave Cre




                                                                                                                                                     Rio Verde
                                         Sun City West

                                                                                                                                              Fountain
                               Surprise
                            Surprise        El Mirage
                                                                             PHOENIX                                                            Hills
                             303     Sun City         Peoria
                                 W Northern Ave. 101                                                 Paradise                       Salt River           87
                                                                                                      Valley                         Indian
                                                                                                                                   Reservation
                                               d Glendale                    M A R I C O P A
                                         Park                                         51
                                                                                                                       Scottsdale
                 10                                 Talleson                                                                       202
                      Goodyear
                                                                                                                                          Mesa
                                                                                             10                 Tempe
                                         Avondale
                                                                                                                          101
                                                               S 51st Ave.




                                                                                                             60
                                                                                                                                                         S Power Rd.




           Buckeye
                                                                                                           Guadalupe
                                                                                                                                   3             Gilbert
                                                                                                                                                    Gilbert

                                                     Komatke
                                                                                                                                          2                            1
                                                                              Gila River                                                 Chandler     Higley               F-11
                                                                               Indian
    85                                                                       Reservation                                                   Queen Creek
                                                                                                     347
Mountainview
               Note 8
                                                                                                                                                                                                        Mountainview                                                       Mountainview Professional Building, LLC
                                                                                                                                                                                                                                                                           10-Year Summary Proforma

                                                                                                                                                                                                        MOUNTAINVIEW                                             RETURN ON INVESTMENT (ROI) - EQUITY INVESTORS
                                                                                                                                                                                                        PROJECT OVERVIEW

                                                                                                                                                                                                                PROJECT DESCRIPTION                                PROJECT OWNERSHIP
                                                                                                                                                                                                        City, St             Gilbert, AZ 85296                 Kenilworth                   90.0%                                Uses-Proj Expenses                                                Sources-Capital Structure
                                                                                                                                                                                                        Prop Type            Retail                            Mountainview                 10.0%                    Price : land /deal                   1,456,560 33%                   LOAN(S)                            2,230,883 51%
                                                                                                                                                                                                        Proj Type            Operating                                                                               Hard/Soft Costs                      1,332,043 30%                    JV-Developer                  0                 0%
                                                                                                                                                                                                        Land Size(ac)        n/a, Condo Plat           Terraca Warner, LLC                 100.0%                    ValueAdEquitySale                    1,000,000 23%                    Terr-Principals               0                 0%
                                                                                                                                                                                                        Bldg Size            6,938                                         CASH FLOW DIST                            Legal Acctng                           125,000 3%                     Terr-INVESTORs                2,155,720         49%
                                                                                                                                                                                                                                                               Kenilworth                   15.0%                    Sales Fees             15.0%           323,000 7%                     Other                         0                 0%
                                                                                                                                                                                                        Units                6,938                             Mountainview                 85.0%                     Subtotal                          4,236,603       97%                Other                         0                 0%
                                                                                                                                                                                                        Value / Unit         617                                                                                     Resvs                  7.0%            150,000                       CASH                               2,155,720 49%
                                                                                                                                                                                                        Proj Value-End       4,280,000                                                     100.0%                                                         4,386,603                                                          4,386,603


                                                                                                                                                                                                        RETURN ON INVESTMENT                                                  ASSUMPTIONS                                                    RATIOS                                                    RESIDUAL / SALE
                                                                                                                                                                                                                                                                                                  0.0%                                ProfitMarg             n/a                          NOI                            835,129
                                                                                                                                                                                                                INVESTMENT SUMMARY                             % Rent                          6.25% of Gross                         LTV                  52.1%                          Sale Price                          6,175,181
                                                                                                                                                                                                        Investment Amt                2,160,000                Value Add-Equity            1,329,000                                  LTC                  52.7%                           Payoffs                       (1,811,253)
                                                                                                                                                                                                        Total Return                  5,794,075                Sale Year                           10                                 DCR                    1.2                            Cost-Othr                    (61,752)
                                                                                                                                                                                                        AveCOC/yr w/s                     26.8%                Sale-CapRate                    7.00% (based on base rent + 10% of TI cost)                                                Gross Proj Profit                   4,302,176
                                                                                                                                                                                                        AveCOC/yr no/s                    18.4%                Sale-ClosingCosts%              1.00%                                                                                       Return Of Capital             (2,155,720)
                                                                                                                                                                                                                                                                                                                                                                                          NET PROJ PROFIT                     2,146,456


                                                                                                                                                                                                                                                   Center Gross Rev           2,511,730     6,438,110    7,421,395      7,792,465        8,182,088         8,591,192      9,020,752          9,471,790       9,945,379       10,442,648          79,817,549
                                                                                                                                                                                                        INCOME / REVENUES                                       YEAR:           1             2            3              4                  5                6                7                 8             9               10                   TOTAL
                                                                                                                                                                                                          Base Rents                                   6,938          24       166,512       171,507      176,653         181,952            187,411         193,033          198,824           204,789       210,932          217,260            1,908,873
                                                                                                                                                                                                          % Rents (of gross rev)                           0     6.25%         156,983       402,382      463,837         487,029            511,381         536,950          563,797           591,987       621,586          652,666            4,988,597
                                                                                                                                                                                                          Other                                            0          0               0             0           0                 0                 0               0                0                 0            0                  0                 0
                                                                                                                                                                                                          Other                                                                       0             0           0                 0                 0               0                0                 0            0                  0                 0
                                                                                                                                                                                                            GROSS EFF REVENUE / PROFIT                                         323,495       573,889      640,490         668,981            698,791         729,983          762,621           796,776       832,519          869,926            6,897,470
                                                                                                                                                                                                        OPERATING EXPENSES (mgmt, resrvs)                                       12,940        22,956       25,620          26,759             27,952          29,199           30,505              31,871      33,301           34,797             275,899
                                                                                                                                                                                                        NET OPER INC (NOI / EBITDA)                                            310,555       550,934      614,870         642,222            670,840         700,783          732,116           764,905       799,218          835,129            6,621,571
                                                                                                                                                                                                          DebtServ/Other               2,230,883       7.75%       300        (202,206)      (202,206)   (202,206)       (202,206)          (202,206)       (202,206)         (202,206)         (202,206)    (202,206)         (202,206)         (2,022,060)
                                                                                                                                                                                                          RESIDUAL PROFIT(income prop sale--EOY)                                                                                                                                                                              2,146,456           2,146,456
                                                                                                                                                                                                        NET INC BEF TAXES                                                      108,349       348,728      412,664         440,016            468,634         498,577          529,910           562,699       597,012         2,779,379           6,745,967


                                                                                                                                                                                                        Cash Flow Supplement (1st 12 mos only)                                  60,000                                                                                                                                                              60,000




           th rou g h Mou nt ai nv i e w ’s Co nf i d e nt i al Pr i vate Pl acem ent Mem oran du m w h en it accom pan ies th is B u sin ess Pl an S u m m ar y.
                                                                                                                                                                                                        INVESTORS DISTRIBUTIONS                                85.00%          152,097       296,419      350,765         374,014            398,339         423,791          450,424           478,294       507,460         2,362,472           5,794,075
                                                                                                                                                                                                        AveAnnual Cash On Cash (COC) (incl sale)                                    7.0%       13.7%        16.2%          17.3%              18.4%           19.6%             20.9%              22.1%        23.5%          109.4%            26.8%




                                                                                                                                                                                  F-13
                                                                                                                                                                                         Feb 22, 2008



This B u s in e s s P l a n S u m mar y i s no t an o f fe r to s e l l i nte re s t s in Mou ntainv iew Profession al B u il din g, LLC. Any su ch offer c an on l y b e ma de
                                                                                                                                                                                                        AveAnnual Cash On Cash (no Sale)                                            7.0%       13.7%        16.2%          17.3%              18.4%           19.6%             20.9%              22.1%        23.5%            24.9%           18.4%
Due Diligence Notes to Mountainview

Note 1      The Mountainview investment was developed to sell 85% of the distributable profits from a
            dental center leased Property. In this instance, Lancaster had identified a 6,900 square foot
            shell-finished commercial building (“Property”) which was to be leased to a Kenilworth
            dental center.

Note 2      Mountainview’s purpose is to acquire 10% of Terraca Warner and receive 85% of the
            distributable profits generated through the Property. Generally, Kenilworth guarantees the
            loans received for acquisition and construction with its real estate projects. The ownership
            and profits assignment concept was developed for this Property to receive adequate
            financing without the need for third party investor personal guaranties.

Note 3      The Company and Capitalization sections of the Mountainview Business Plan summarize
            the purpose of the offering and investment terms. The Mountainview PPM offering
            dated January 22, 2008 was fully subscribed based upon this business plan described
            investment.

Note 4      Due diligence investigations relating to the real estate and target market for the Kenilworth
            dental centers are performed by Lancaster. Lancaster is principally responsible for property
            and project management from contracting through dental center operations.

Note 5      See the Pro forma in the Mountainview Business Plan. The Pro forma was based upon
            similar assumptions made when developing the dental center pro forma. The dental
            center real estate investments are substantially dependent upon the success of the dental
            center tenant.

Note 6      A sample “Dental Center Lease” is provided in the Real Estate Section. In this case, the
            dental center is the sole tenant; however, in other Lancaster-managed and Kenilworth-
            owned properties, other tenants will have a similar agreement catered to their own specific
            requirements, as negotiated and managed by Lancaster.

Note 7      Additional Use of Funds information is found in the PPM relating to the respective dental
            center real estate offering.

Note 8      As of the date of this Package, the future dental center properties described in numbers 1
            (Queen Creek), 2 (Higley) and 3 (Warner) are currently in operations. The future dental
            center numbered 4 (Surprise) is currently under development.

Note 9      The Mountainview Proforma is based upon similar assumptions and expectations which
            are described in the “Due Diligence Notes to Ashford Business Plan.” The Mountainview
            related Property lease included a rent component 6.25% of gross revenues from the dental
            center located at the Property. This participating rent component varies between real
            estate projects and was based upon the above-market tenant improvements located at the
            Property. Therefore, the Mountainview Proforma is materially reliant on the success of the
            dental center tenant.




F-14
               l wor                                     i ligence
       K e n i lwor t h Poi nt - B rok er D eal er Due D ili gence S um m ar y

								
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