Investment Pro!le

FIRST COLONY COMMONS Institutional Quality Properties for Individual Investors

Access to a Growing, Demographically Robust Market

First Colony Commons is a multi-tenant retail power center a $ve-mile population base of more than 216,000, several located at a prime intersection in the greater Sugar Land major thoroughfares, the Memorial Hermann and Methodist marketplace of the Houston, Texas, MSA. The Property’s regional hospital complexes and numerous hotel options. location at the intersection of Southwest Freeway (US-59) and Williams Trace Boulevard provides excellent access The Property encompasses 410,117-square-feet, of which to an expanding, demographically strong population of 55,868-square-feet are on two ground leased sites. Its households with above-average incomes. First Colony category-leading anchor tenants include Home Depot, Commons o!ers a diverse tenant mix of national, regional Conn’s Appliances, O"ce Depot, Michaels and Babies “R” Us. and local retailers, including home improvement and Joining the anchor tenants and included in the o!ering are appliance goods, o"ce and hobby supplies, soft goods, 38 inline tenants, including Hallmark, Cingular Wireless, Jenny restaurants and convenience operators. Craig and Outback Steakhouse. The Property is currently 96.2% leased. The shops are being actively marketed with First Colony Commons is located at the gateway to one of strong momentum behind the leasing campaign. the nation’s most successful master-planned communities, Sugar Land, Texas. Sugar Land is in Fort Bend County, which First Colony Commons was built in 1992-1993 with concrete has ranked among the nation’s fastest-growing counties for tilt-wall construction with natural red brick $nish and metal a decade. The Property’s location near the southern corner framing throughout. The main building is constructed of of the intersection of US-59 and Williams Trace Boulevard pre-cast concrete tilt-up (CTU) panels and steel framed roof provides numerous ingress/egress points, excellent site line structures supported by steel columns. The buildings contain visibility and easy access to an a#uent, expanding trade area. a combination of foundation systems including continuous The highly sought-after demographic pro$le of area residents concrete spread footings at perimeter and bearing wall continues to attract institutional ownership that has followed locations, and isolated reinforced spread footings at point the top-tier retailers into the marketplace. The Property is load (column) locations. in close proximity to a variety of residential housing options,

This material does not constitute an o!er to sell or a solicitation of an o!er to purchase securities and is only authorized for use when accompanied or preceded by a de$nitive Private Placement Memorandum and any Supplement(s) thereto (“PPM”) regarding the sale of tenant-in-common interests in First Colony Commons. Reference is made to the PPM for a statement of the risks and terms of the o!ering. abovethe The information herein is quali$ed in its entirety by the PPM. All potential investors must be “accredited investors” under the federal securities law, must read the PPM and acknowledge receipt and review of PPM. standard Investment Pro!le

FIRST COLONY COMMONS

INVESTMENT NAME: Covington First Colony Acquisition, LLC LOCATION: 15201-15555 Southwest Freeway Key Investment Sugar Land, Texas 77478 Considerations INVESTMENT STRUCTURE: Securities O!ering, Tenants in Common PROPERTY TYPE: Class A Multi-Tenant Regional Power Center NET RENTABLE SQUARE FEET: 410,117 CURRENT OCCUPANCY PERCENTAGE: 96.21% (leased) TOTAL CAPITALIZATION: $71,882,617

FIRST MORTGAGE LOAN: $50,600,000 5.73% "xed rate Non-recourse/10-year term INITIAL DEBT SERVICE COVERAGE RATIO: 1.45x LOAN TO TOTAL CAPITALIZATION: 70.39% TOTAL EQUITY: $21,282,617 MINIMUM EQUITY INVESTMENT: $638,479 ALLOCATED DEBT PER MINIMUM $1,518,000 EQUITY INVESTMENT: INITIAL YIELD TO INVESTOR: 6.40% (increasing to 10.04%, average yield 7.62%)

HOLDING PERIOD: 10 years Investment Returns: Minimum Investment of $638,479

FISCAL PERIOD ENDING 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 TOTAL MAR. 31

CASH ON CASH RETURN: 6.40 6.41 6.42 6.47 7.36 7.76 7.55 8.69 9.06 10.04

CASH DISTRIBUTION $39,548 $39,617 $39,691 $39,966 $45,515 $47,970 $46,631 $53,714 $55,933 $62,073 $470,718 TO INVESTOR:

RETURN OF CAPITAL: $778,059

NET SALES PROFIT: $139,581

TOTAL CASH FLOW $39,548 $39,617 $39,691 $39,966 $45,515 $47,970 $46,631 $53,714 $55,933 $62,073 $1,388,358 TO INVESTOR:

PROJECTED INTERNAL RATE OF RETURN: 9.32%

AVERAGE ANNUAL 10.21% RETURN ON EQUITY:

The projections and anticipated returns are estimates based upon speci!c assumptions detailed in the PPM. Should we fail to achieve these assumptions, the projections and anticipated returns will change accordingly. No assurance can be given that the estimates or assumptions will prove to be accurate. Potential investors should clearly review the assumptions and the more detailed information set forth in the PPM. Property Highlights

RAPIDLY GROWING First Colony Commons is located at the epicenter of activity for Sugar Land and the TRADE AREA: entire Fort Bend County area. There is an established sub-market which has the largest collection of restaurants, lifestyle retail and community events. In addition, there is more growth under construction and under development. Notable marketplace tra!c generators include: Houston’s largest Whole Foods Market; Sugar Land Town Square; corporate headquarters including Fluor Corporation, Schlumberger and Unocal; and various large power centers including First Colony Mall.

STRONG ANCHOR First Colony Commons is a multi-anchored regional power center with notable retailers TENANTS AND including Home Depot, Conn’s Appliances, Michaels, Babies ‘R’ Us and O!ce OCCUPANCY: Depot. Combined with strong restaurants – Outback Steakhouse, Chili’s, Jason’s Deli and Texas Rotisserie Chicken – these anchor tenants create a suburban destination for the entire Sugar Land region. Several of the anchor tenants and one restaurant tenant carry a Standard & Poor’s investment grade credit rating: Home Depot currently carries a AAA rating, O!ce Depot carries a BBB rating, and Brinker International (parent company of Chili’s) carries a BBB rating. First Colony Commons is currently 96.2% leased. The center has maintained a historically high occupancy level since its inception, with average occupancy during the last 10 years of more than 95%. hieve these assumptions, the projections and STRONG Fort Bend County has one of the highest growth rates of all counties in the nation. DEMOGRAPHICS: The average household income within one mile of the center is over $100,000; there are currently more than 216,000 people living within a "ve-mile radius with an average income exceeding $93,000. The population is projected to grow by approximately 18% within both the three- and "ve-mile radii by the year 2010. In addition, Sugar Land is Houston’s most a#uent suburb. Of the Houston submarkets, Sugar Land has the highest average household income and the largest projected population growth.

VISIBILITY/TRAFFIC First Colony Commons has signi"cant unobstructed frontage on US-59 and Williams COUNT: Trace Boulevard. In addition, the Property has substantial drive-by visibility. US-59 at Williams Trace Boulevard generates a daily tra!c count of approximately 144,600 cars, while Williams Trace Boulevard at US-59 generates a daily tra!c count of approximately 21,000 cars. Houston: The Nation’s Fourth Largest City and Growing

Houston, where suburban Sugar Land and First Colony SELECTED HOUSTON AREA RELOCATIONS AND EXPANSIONS Commons are located, is the largest city in the state of 1999-2005 Texas and the fourth largest in the U.S. Houston is well known as a center for energy, medicine, international AIM Management ConocoPhillips business and technology. It is also one of only !ve cities in Anadarko Petroleum Continental Airlines the country with a resident theater, opera, ballet and Aspen Manufacturing Dow Chemical symphony. More than 22 million people live within 300 Baker Inteq/Baker Atlas ExxonMobil miles of the city, and approximately 60 million consumers Blue Ridge Energy Hilton-Americas live within 700 miles. The city’s central location in the Boeing Company Kerr-McGee southwestern United States makes it an ideal distribution hub for domestic and international markets. Chevron Texaco Menninger Clinic CITGO The engine that drives the city’s thriving international trade and commerce is the Port of Houston, the sixth largest port in the world. This 25-mile long complex of diverse public and private facilities along the Houston Ship Channel is just a few hours sailing time from the Gulf of Mexico. Houston’s port has long been the nation’s leader in terms of foreign tonnage. Each year, more than 6,400 vessels and 150,000 barges call at the Port of Houston. In addition, more than 100 steamship lines o"er service between Houston and 1960 Sugar Land 1,034 ports around the world. A vast network of interstate US 90 Alt. highways and railways connect Houston with inland markets, and each of the Port of Houston’s various facilities is in close proximity to major highway arteries. US 90 Alt. 59

More than 130 trucking lines provide access from Houston

6 W to the continental United States, Canada and Mexico. The illia m s T Houston Airport System is the fourth largest in the U.S. and rac e Blv Lexington Blvd. d sixth largest in the world. In 2005, 48 million passengers and . more than 380,000 tons of cargo passed through Houston’s three airports (Bush Intercontinental, Hobby and Ellington Field). Bush Intercontinental Airport is now the seventh 6 largest international passenger gateway in the U.S. and . d Blv eighth largest overall. ce ra T

59 illiams First Colony Commons W

Commonwealth Blvd. Economic Overview with the Port of Houston is one of the largest in the world. The Port of Houston currently ranks !rst in the U.S. in foreign Houston stands as a global example of economic diversity. waterborne commerce. In 2004, a total of 6,539 vessel calls In 1981, 81% of the local economy was tied to the petroleum, were recorded at the Port of Houston and the total goods in natural gas and chemical industries. Today, that !gure transported foreign trade reached an estimated 200 million is approximately 50%. Houston companies are leaders in short tons. In terms of total tonnage, the Port of Houston such dynamic high-tech sectors as electronics, computers, currently ranks second in the U.S. and sixth in the world. software, biomedical technology, aerospace, integrated power and plastics manufacturing. Among Fortune 500 Texas Medical Center The internationally renowned Texas companies, twenty-four are headquartered in Houston Medical Center is the world’s largest medical complex, with including Marathon Oil, Sysco, Reliant Energy, and Halliburton. 13 hospitals and more than 100 professional o"ce buildings. In fact, Houston ranks third – following New York and The medical, academic and research institutions of the Chicago – in the number of Fortune 500 headquarters. Texas Medical Center together represent Houston’s largest In addition, the Houston MSA leads the nation in job creation. employer with 61,030 total jobs. The Center is home to More jobs were created in Houston between January 2006 42 member institutions, all of which are non-pro!t and and January 2007 than in any other metropolitan area dedicated to the highest standards of research, education and in the nation. Statistics released by the US Bureau of Labor patient and preventive care. More than 5.1 million patients Statistics show that the Houston MSA gained 99,100 jobs in visit the Texas Medical Center annually. the 12-month period. Corporate Relocation/Expansion Houston is among one of Growth in non-energy sectors is expected to continue driving the most competitive U.S. cities for corporate relocation Houston’s future. However, the city remains the global energy activity, in large part because it is one of the least expensive capital, with virtually every segment of the energy industry major U.S. cities in which to conduct business. Signi!cant represented by more than 5,000 !rms in the region. All major bene!ts include the absence of state or city income taxes, oil and gas companies have extensive operations in the area. no state property tax, as well as an exceptionally low cost of Houston is also known as the global center for a new sector living index. Between 1999 and 2005, there were more than of the energy industry – integrated power. 550 publicly announced o"ce, manufacturing and warehouse relocations, expansions and new construction projects in Port of Houston/International Trade The Port of Houston is the area. Houston’s ability to continue creating a large number a 25-mile complex of diversi!ed public and private facilities of high quality jobs across all business sectors has placed it in along the Houston Ship Channel. Many oil companies have the top tier among U.S. cities. The city’s well-educated and built re!neries on the channel where they are protected from abundant labor force positions it to successfully compete in the Gulf of Mexico; the petrochemical complex associated the global marketplace.

Covington Realty Partners 30 S. Wacker Drive, Suite 2750 Chicago, IL 60606 (312) 879-7560 www.covingtonrealtypartners.com