ASB Meridian Real Estate Fund II, L.P. - cfrs-ca.org · – Responsible for ASB's Eastern Region real estate portfolio, including new investment, asset management and property disposition

ASB Meridian Real Estate Fund II, L.P.


A $250 million closed-end, low-leverage value creation real estate fund

Building on three decades of performance

FOURTH QUARTER 2015

Presentation to: City of Fresno Retirement System

Prepared by: H. James Darcey

Managing Director

Capital Investments

(240) 482-2909

April 26, 2016

Clyde Robinson

Managing Director

Client Service

(240) 482-2991

pattiel

Text Box

Timed Item: 9:00 am Joint Meeting of the Retirement Boards Meeting Date: 4/26/2016

ASB Meridian Real Estate Fund II, L.P. 1

The information provided in this booklet should not be used for any other purpose unless expressly authorized by ASB Capital Management, LLC ®

To ensure comparability, the returns in this presentation (unless otherwise noted) are portrayed as gross of investment

management fees. As a result, the following disclosures are made:

• The net of investment management fee returns actually achieved for our clients are lower than the returns portrayed on the

charts. In order to illustrate the performance effect of investment management fees, comparative ASB Meridian Real Estate

Low-Leverage Value Creation Composite gross and net of investment fee returns are included in the Appendix of this

presentation. Past performance is not necessarily indicative of future results. Investment management fees for ASB Meridian

Real Estate Fund II are described in the ASB Meridian Real Estate Fund II, L.P. Summary of Terms.

• ASB Capital Management LLC claims compliance with the Global Investment Performance Standards (GIPS®).

• The performance in this presentation is for the ASB Meridian Real Estate Low-Leverage Value Creation Composite. ASB

Meridian Real Estate Fund II will be a member in the ASB Meridian Real Estate Low-Leverage Value Creation Composite.

• The ASB Meridian Real Estate Fund II will utilize leverage in the form of mortgages, lines of credit and other indebtedness. This

leverage is secured by real estate investments held by the Fund.

• The Appendix section of this presentation contains a GIPS compliant report of the ASB Meridian Real Estate Low-Leverage

Value Creation Composite for all time periods since inception. All material contained in the body of the presentation is

supplemental information to the full GIPS-compliant presentation. A complete list of all of ASB Capital Management’s

composites and their descriptions is available by contacting 240-482-2900.


I. Overview of ASB Real Estate Investments


About ASB Real Estate Investments*

• A division of ASB Capital Management founded in 1983

• An SEC registered investment advisor

• Offices in Washington, D.C., San Francisco and New York

− 40 employees

− Key senior management together for over a decade

• Two institutional funds and one separate account

− 339 institutional investors

• Invests in institutional quality office, industrial, retail and multifamily assets

REAL ESTATE ASSETS UNDER MANAGEMENT

$6.3 Billion (Gross)

193 Assets

15 U.S. Markets

13.7 Million SF

*As of 12/31/15

3


ASB Real Estate Investments – Product Overview and Allocation Process

ALLEGIANCE FUND* MERIDIAN FUND SEPARATE ACCOUNT

TYPE: Open-end Discretionary Commingled Fund

Closed-end Discretionary Fund Discretionary Separate Account

INVESTMENT STYLE: Core Low-leverage Value Creation Development

PORTFOLIO MANAGER: Robert Bellinger Jim Darcey Jim Darcey

FUND GROSS ASSET VALUE:

$5.98 billion $152 million1 $365 million

NET ASSET VALUE: $5.05 billion $152 million1 $268 million

ASB CO-INVESTMENT: No, ERISA prohibition Yes, $16 million None

CAPITAL STATUS: Receiving new net commitments quarterly

Receiving additional capital commitments until May 2016

Recycling capital for new investments through dispositions

• Pipeline Allocation Committee (“PAC”)

− Meets bi-weekly or more frequently as needed

− Investment officers present investments

− Portfolio managers make recommendations on suitability

− Decisions overseen by Executive Oversight Committee

• Allocation Considerations

− Liquidity

− Vehicle investment guidelines

− Suitability (i.e., diversification, leverage, asset size)

− Previous allocation history

1 Represents total current hard and soft commitments for Meridian II, which was launched in August 2015. Meridian I had a peak gross asset value of $158 million and was fully realized in February 2015.

ASB has three distinct products, spanning core investment, value creation using low leverage, and development

*The Allegiance Fund is ASB Real Estate Investment’s exclusive core investment vehicle.

4


ASB Meridian

RE Fund I

Realized

ASB Capital Management (“ASBCM”) formed as an

independent subsidiary of American Security Bank

History

1983

1984

1985-1996

1997

2004

2003

2006

2011

Allegiance Real

Estate Fund

formed

Separate Account

formed

Through a series of bank mergers in the 1980’s

and 1990’s, ASBCM is ultimately owned by

NationsBank but always operated as an

independent subsidiary

Robert Bellinger

joins ASBCM to lead

real estate

ASBCM opens its West

Coast real estate office in

San Francisco

ASB Real Estate Investments

(“ASBREI”) formed as a distinct

division of ASBCM

Allegiance Fund admitted

to the NFI-ODCE

ASBCM acquired by Saul

Organization

as independent subsidiary

Allegiance Fund at

$150 Million NAV

Allegiance Fund at

$1 Billion NAV

Allegiance Fund

restructured to an LP

2015

ASB Meridian

RE Fund I

Launched

2010

2012

ASB Meridian

RE Fund II

Launched

5


Leadership and Corporate Culture

6

ASB’s strong investment performance is driven by its people and partnerships.

OPERATING PARTNERS CULTURE OF DEBATE

Our partners are experienced real estate operators with

deep product knowledge and exceptional local people and

experience.

During bi-weekly “all-hands” meetings, new acquisitions and

leases are vetted by the broader group. This collaborative

approach leads to our best ideas and a robust decision making

approach.

TEAM COHESION INVESTMENT ACCOUNTABILITY

The core ASB senior leadership team has managed the Fund

together for over twelve years, with modest turnover

throughout the broader organization.

The same team that sources new acquisitions also executes the

business plan during the ownership period, assuring strong

accountability for results.


II. Investment Philosophy


Investment Philosophy

8

ASB has strategically focused its investments strategy on select “growth-engine” urban/infill submarkets in

the nation’s leading gateway, 24-hour cities, avoiding secondary markets and suburban locations.

• Major MSAs that offer liquidity throughout

market cycles

• Emerging tenant demand driven by changing

demographic trends - Urbanization

• Neighborhoods in major markets where we

observe the onset of gentrification and re-

development

• Neighborhoods protected by barriers to entry

• Above inflation rent growth due to wholesale

changes in demand drivers

• Non-traditional areas becoming attractive to

highly educated workforces with multi-

generational, diverse demographics

• Mass transportation; alternatives to cars

• Pedestrian-friendly environments

ASB TARGET MARKETS

PACIFIC

MOUNTAIN WEST CENTRAL

SOUTHWEST

SOUTHEAST

MIDEAST

NORTHEAST

EAST CENTRAL

Denotes target markets


Investing in the Value Creation Space

9

ASB’s strategic focus and sourcing of core assets for the Allegiance Fund regularly generates attractive value

creation opportunities in ASB’s targeted “growth-engine” urban/infill submarkets, primarily in the nation’s

leading gateway, 24-hour cities.

• Since 2004, ASB has made $2 billion in 39 investments with a value

creation strategy generating an average return of 18.2% IRR.

─ $677M in 11 office investments

─ $441M in 8 industrial investments

─ $403M in 8 retail investments

─ $312M in 8 residential investments

─ $138M in 4 land investments

• ASB established the Meridian Fund I in 2010, as a vehicle specifically

designed to capitalize on value creation investments during the early

stage of the rebounding real estate market cycle.

• Following the success of ASB Meridian Fund I, ASB is launching Meridian

Fund II.

ASB’s time-tested investment principles and underwriting acumen apply to the value creation space


III. Experience - ASB Meridian Real Estate Fund I


Senior Investment Team

ASB’s senior investment team has a over ten-year track record of working together to produce superior

results for ASB’s funds, including the ASB Meridian Real Estate Fund I.

Robert B. Bellinger, CFA, President, CEO – Mr. Bellinger is responsible for overseeing all functions of ASB Real Estate Investments Mr. Bellinger

also serves as the Executive Portfolio Manager for the ASB Allegiance Real Estate Fund. Mr. Bellinger has 30 years of real estate investment

experience, and has completed over $10 billion in real estate capital transactions during his career. Prior to joining ASB Capital Management in 2002,

Mr. Bellinger worked with Lend Lease Real Estate Investments as a Principal and Executive Vice President heading the Private Client Group, directing

the National Asset Sales group, and leading the acquisition of equity and debt investments in the Washington, DC region. Prior to joining Lend Lease

in 1990, Mr. Bellinger worked as a Development Project Manager with Trammell Crow Company. He is the founder and a current advisory board

member of Rebuilding Together Philadelphia. Mr. Bellinger also serves on the Board and Executive committee of the Zell Lurie Real Estate Center of

the Wharton School at the University of Pennsylvania. Mr. Bellinger received a BA with honors from Haverford College and an MBA from the Wharton

School where he received the Dean’s Award of Excellence.

David T. Quigley, Managing Director and Chief Investment Officer – Mr. Quigley is responsible for real estate acquisitions in the Western

Region of the United States, and based in the San Francisco office. Prior to joining ASB Capital Management, Mr. Quigley was a Partner and Senior

Vice President in the Los Angeles office of ING Realty Partners, where he was primarily responsible for investment activity, including identifying,

evaluating and closing transactions; negotiating joint venture documentation with capital and operating partners; and obtaining third party debt to

facilitate closings. Prior to joining ING Realty Partners, he was Director of Project Finance for Essex Property Corporation. Mr. Quigley received a BA

degree from Stanford University and an MBA from Columbia University.

H. James Darcey, Managing Director – Responsible for ASB's Eastern Region real estate portfolio, including new investment, asset management

and property disposition activities. Mr. Darcey serves as Portfolio Manager for the Meridian Funds, ASB's series of low-leverage value creation closed-

end funds, and is a member of ASB's Management Committee. Prior to joining ASB Capital Management, Mr. Darcey was Senior Vice President of

Asset Management and Acquisitions at Lowe Enterprises Real Estate Group in Washington, DC, where he had primary responsibility for all asset and

property management activities in the Eastern Region, including the management of asset management and property management personnel. He

received an MBA from the University of Southern California and a BS in Business Administration with a concentration in Accounting from the

University of San Diego.


ASB Meridian Real Estate Fund I - Overview

• Closed in 2010 with $113 million of aggregate commitments, Fund I took advantage of market

dislocation and shifting tenant demand

• Ultimately invested the Fund I capital in seven transactions between August 2010 and April 2012

• As of March 31, 2015, returned $200.7 million to Fund I investors = 177% of invested capital

• The Gross Fund Level Since Inception IRR as of March 31, 2015, is 23.6%

• Fund level leverage of less than 10%

• 21.8% projected total IRR net to investors

12

MERIDIAN FUND I RETURNS

Number Total Equity

Invested Realized Proceeds

Unrealized Proceeds

IRR Equity Multiple

All Investments 7 $109.3mm $205.3mm Fully Realized 23.6% * 1.9x *

*Gross Fund Level IRR/Multiple projected as of 6/30/15


ASB Meridian Real Estate Fund I - Investment Profiles

13

3rd Street Promenade Compelling Value Proposition

• Value enhancement opportunity through leasing in tight market with sub 5% vacancy

• Prominent, luxury retail corridor presents meaningful upside with triple digit rents

• Horizontal and vertical barriers of high-street retail strengthen investment position

Strategic Asset Enhancement

• Off-market acquisition initiated through local partner with specialty in high-street retail leasing

• Seller partnership facing challenging loan maturity presented opportunistic acquisition scenario

• ASB’s nimble platform tied up opportunity quickly

• Local partner aligned and incented by meaningful equity co-investment

• Active asset management resulted in 15-year lease to Apple for 100% of the project

Investment Results

• Meridian Fund I Net Cost Basis: $27.0 million

• Meridian Fund I Sales Proceeds: $47.18 million

• Meridian Fund I Unlevered IRR: 33.8%

Size 30,750 sf

Asset Type Retail

MSA Los Angeles

Acquisition Date August 2010

Sale Date July 2012

Occupancy at Acq 0%

Cost Basis $28.4mm



14

31 Milk Street Compelling Value Proposition

• Fast-moving, off-market acquisition from Special Servicer sourced by local operating partner

• High-quality, Class B building in prime mixed-use, mass-transit oriented Boston location

• Acquisition pricing from Special Servicer at $137 psf representing significant discount to replacement

cost


• Property management team continuity offered tenant relationships and execution insight

• Low cost basis allowed for competitive rates to value-conscious Class A tenant segment

• Substantial NOI upside through occupancy stabilization and rent growth from cyclical lows

Investment Results


• Meridian Fund I Net Sale Proceeds: $13.0 million

• Meridian Fund I Levered IRR: 16.8%

─ Investment Level Debt of +/-35% LTV

Size 92,350 sf

Asset Type Office

MSA Boston Financial District

Acquisition Date January 2011

Sale Date February 2014

Occupancy at Acq 64%

Gross Cost Basis $14.1mm



15

135 Mississippi Compelling Value Proposition

• Off-market acquisition with attractive physical features: industrial elements, attractive window line,

flexible floor plate

• Premier emerging location with mass-transit access proximate to epicenter of tech industry in Mission

Bay and SoMa

• Acquisition pricing represented significant discount to replacement cost


• Broad multi-tenant and single-tenant marketing strategy possible due to attractive floor plate and building size

• 100% lease executed with global creative design services user at 120% of pro forma rents

• Significant tenant capital commitment enhances long-term occupancy profile

Investment Results


• Meridian Fund I Sale Proceeds: $12.1 million


Size 28,000 sf

Asset Type Office

MSA San Francisco

Acquisition Date April 2012

Sale Date February 2015

Occupancy at Acq 0%

Cost Basis $7.3mm



16

Playa Vista Land Compelling Value Proposition

• Off-market, bank-owned asset with previous non-performing buyer created distressed acquisition scenario

• Acquisition pricing of $22 per FAR square foot representing 80%+ discount to peak pricing

• Premier 10 acre site within West Los Angeles office market benefitting from migration of high-tech and creative tenants

• Land zoning allowed broad range of commercial uses including office and retail


• Benefit from recovery in West Los Angeles office market, where rents and values were at cyclical low points at the time of acquisition

• Completed Lot Line Adjustment to accommodate parking requirements stipulated by master-plan

• Completed infrastructure work to prepare site for development

Investment Results




Size 10 Acres

Asset Type Land

MSA Los Angeles

Acquisition Date October 2010

Sale Date December 2014

FAR 637,000 sf

Cost Basis $18.5mm



17

Jefferson/Condor Compelling Value Proposition

• Off-market purchase of defaulted loan sourced by local operating partner with market presence

• Loan acquired for 55% of outstanding loan balance

• Acquisition pricing represented 70-75% discount to replacement cost

• Significant capital expenditures for TIs incurred by defaulted borrower enhanced asset positioning

• Challenged borrower partnership assured clear path to equity


• Closed deed-in-lieu in two months at one-third the time and one-sixth the cost versus pro forma

• Executed targeted capital improvements to capture tenant demand in growing master-planned submarket

• Initiated spec-suite build-out program focused on high-tech users to highlight building’s potential

Investment Results


• Meridian Fund I Sales Proceeds: $29.6 million


Size 218,800 sf

Asset Type Office

MSA Los Angeles

Acquisition Date December 2010

Sale Date Mid - 2013

Occupancy at Acq 23.5%

Cost Basis $22.2mm



18

700 S. Washington Street Compelling Value Proposition

• In-fill DC Metro location in submarket with significant barriers to entry

• Strong/successful retail tenant

• Efficient floor plans, able to accommodate small tenants

• Excellent access to executive housing


• Opportunity to extend retail tenant lease

• Ability to re-let Property into improving leasing market

• Deploy spec-suite program to capture small tenants that dominate the submarket

Investment Results




Size 58,412 sf

Asset Type Office

MSA Washington, DC

Acquisition Date April 2011

Sale Date December 2014

Occupancy at Acq 49%




19

Valley Family Investors Compelling Value Proposition

• Opportunity to purchase homes at significant discount to replacement cost for placement into Rent-

To-Own program

• Stringent tenant/buyer pre-qualification process

• Predetermined purchase price


• Partner with deep product and market experience

• Local partner expertise in identifying quality properties

Investment Results




Size 103 Homes

Asset Type Residential

MSA California Central Valley

Acquisition Date June 2011

Sale Date January 2014

Occupancy NA



Meridian Real Estate Fund I – Investment Performance

20

*Total ASB IRR is an IRR value weighted by Purchase Price / Cost Basis.

Property MSA

Rentable

Square

Feet

Date

AcquiredDate Sold

Holding

Period

(Yrs.)

Operating

Partner

Off-Market

Acquisition

ASB Purchase

Price / Cost

Basis

ASB Sale Price

/ Current ValueASB IRR

ASB

Equity

Multiple

Execution Comments

1 3rd Street Promenade Los Angeles 30,750 8/12/2010 7/23/2012 1.9 Blatteis &

Schnur Yes 27,019,921$ 47,184,458$ 33.8% 1.75x

•Prominent luxury retail location with

redevelopment upside

• High barriers to entry destination shopping

district

• Sourced through local partner from broken

partnership facing loan maturity

• Value creation through expansion of rentable

area

• 100% leased to Apple

2 PV10 Los Angeles N/A 10/15/2010 12/1/2014 4.1 Lincoln Yes 18,081,201$ 69,298,974$ 43.6% 3.83x

• Acquired from lender at price equal to 20%

of peak value

• Development land with liberal zoning

• Value enhancement through lot-line

adjustment and infrastruction development

3 Jefferson/Condor Los Angeles 219,011 12/16/2010 8/8/2013 2.6 Lincoln Yes 21,618,180$ 29,554,540$ 14.4% 1.37x

• Defaulted loan sourced by local partner

based on relationship with lender

• Acquired at 55% of outstanding loan balance

• Acquisition price represented 70-75% of

replacement cost

• Executed deed-in-lieu in only two months

• Completed targeted capital improvements

designed to attract high-tech users

4 31 Milk Street Boston 92,422 1/10/2011 2/28/2014 3.1 Lincoln Yes 13,430,981$ 18,872,471$ 16.8% 1.73x

• Acquired from Special Servicers based on

local partner's relationship

• Acquisition price significantly below

replacement cost and most recent sale price

• Significant releasing opportunity into

recovering market

• Strategic capital improvements to upgrade

common areas

5 700 S Washington Washington 60,776 4/29/2011 12/22/2014 3.7 Lincoln No 13,889,659$ 16,102,815$ 4.4% 1.2x

• Opportunity to add value through extension

of retail lease

• Targeted capital improvements to enhance

common areas

6 Valley Family Investors Stockton N/A 6/1/2011 1/15/2014 2.6 Grupe Yes 9,070,073$ 11,090,345$ 11.5% 1.22x

• Opportunity to leverage local partner

expertise

• Acquisition of properties at far below historic

values

7 135 Mississippi San Francisco 28,000 4/24/2012 2/6/2015 2.7

Union

Property

Capital

Yes 6,218,323$ 12,097,735$ 31.1% 2.12x

• Premier emerging location with access to

mass transit and epicenter of high-tech

industry

• Acquisition pricing significantly below

replacement cost

Total 109,328,338$ 204,201,338$


IV. Overview of ASB Meridian Real Estate Fund II


ASB Meridian Real Estate Fund II - Overview

22

OBJECTIVE

To continue ASB’s proven strategy of investing in high quality, under-valued real estate assets in emerging submarkets

within major U.S. markets.

• Create asset appreciation through lease up, repositioning and redevelopment

• Income returns upon stabilization of 6% to 8%

• Gross returns between 12% and 14%

• Target leverage of 20% to 30%

• Contrarian approach reduces financing risks tied to market downturns

PROVEN ABILITY TO OUTPERFORM

ASB Meridian Fund I performance was exemplary

• 23.6% realized Gross IRR and a 1.84x equity multiple

• 21.8% projected total IRR net to investors and a 1.75x equity multiple

• Less than 10% overall leverage

• Full realization in 1Q 2015

VETERAN INVESTMENT TEAM

• Managed by Company’s senior leadership - over eleven-year track record working together at ASB

• Cross-functional acquisition/asset management professionals

Target compelling returns through value creation investments with limited use of leverage


ASB Meridian Real Estate Fund II - Market Opportunity

23

DEMOGRAPHIC SHIFTS ARE FORCING TENANTS TO RE-EXAMINE SPACE NEEDS AND LOCATIONS

• Mixed-use urban submarkets attracting increasing tenant demand from the two largest and most dynamic

demographic cohorts:

− Millennials

− Empty-nesters

• Emerging urban “nodes” in major markets with rapidly increasing residential and retail demand that offer a

“value” proposition

− NYC - Williamsburg, Brooklyn / Harlem / Long Island City

− DC - Shaw / H Street

− Denver - LoDo

− Los Angeles – Venice / Downtown Arts District

• Tech focused industrial/data center opportunities

− Recasting “obsolete” industrial and older office to meet the growing demand of technology-oriented

tenants with specific floor load, fiber and power requirements

− Miami – Design District


ASB Meridian Real Estate Fund II – Asset Level Tactics to Meet Changing Tenant Demand

24

Development

• Urban Mixed-Use/Multifamily

Re-development – re-use and re-purpose existing assets

• Class B/C Office Multifamily

• Broken Vertical Retail Creative Office

• Tech Focused Industrial/Data Centers

Re-positioning – physical upgrades/alterations

• Class B “80’s” Office 21st Century Office with Open Floor Plans

• Large Retail Deconstruct into Smaller, Higher Rent Bays

• Urban Retail Gentrifying Submarkets

Re-leasing – material variance between in-place and market rents

• Emerging Urban Retail Corridors

• Emerging Creative Office Submarkets

Value Creation

Retu

rn


Urban Retail – Investment Strategy

PORTFOLIO SUMMARY

Total GAV $1.4 billion

Total NAV $1.1 billion

Number of Investments* 35+

Number of Tenants 130+

Weighted in-place rent vs. market 85%

INVESTMENT RATIONALE

• Exceptional Rent Growth Fundamentals

• Vertical and Horizontal Barriers to entry

• NNN Expense Inflation Protection

• Branding Motivated Inelastic Demand

• Avoids Grocery-Anchored Binary Risk

SoHo | Madison Avenue | Georgetown | West Hollywood | Hollywood | Santa Monica | Venice | Union Square | Gaslamp Quarter | South Beach| Design District | Gold Coast | Back Bay | Meatpacking District | Williamsburg | World Trade Center

HIGH STREET PORTFOLIO NOI PROJECTION ($MM)

2015 2016 2017 2018 2019

$34.4 $43.1 $50.1 $56.5 $66.3

2A-A BBB/A-

Vivienine Tam 2A/##

Steinway AAA/B+

Urban Outfitters 2B/3A

Ted Baker 2+/A-

Bose B+/B-

Dermalogica

Zara ?+/2R

Fendi A3/BBB

MAC Cosmetics BB/A2

Wells Fargo

*Includes partial urban retail investments.

25


ASB Real Estate – Value Creation Investment Profiles

862 Broadway, NYC Compelling Value Proposition

• Off market opportunity to acquire a 100% leased, 4-story, 6,850 sf, mixed-use building in the Union Square/Flatiron neighborhood

• The Property is located at the northwest corner of Union Square and is directly visible upon exiting the Union Square subway – superior pedestrian traffic with over 350,000 daily visitors

• 13 foot ceilings and floor to ceiling glass on ground and second floors, and 11 foot ceilings on floors three and four

Strategic Value Enhancement

• ASB is deeply experienced in matching attractive urban retail re-development opportunities to a roster of appropriate potential tenants

• Sourced through existing partner with local knowhow, extensive leasing platform and proven ability to execute on value creation opportunity

• In-place rents are roughly 35% below market

• Vacate building by June 2017 and conduct $1.8 million in base building upgrades

Projected Investment Results

• Projected Gross Investment Cost Basis (Renovation): $28.1 million

• Projected Gross Sales Proceeds (Month 29): $36.1 million

• Projected Meridian Fund II Net Cost Basis: $20.1 million

• Projected Meridian Fund II Sales Proceeds: $25.6 million

• Projected Meridian Fund II Levered IRR: 12.2%

26

Size 7,088 sf

Asset Type Urban Retail

MSA New York City

Anticipated Acquisition Date

May 2016

Anticipated Occupancy at Acq

100%

Assumed Acquisition Price

$25.0 mm



River North Creative Office, Chicago Compelling Value Proposition

• Opportunity to acquire a 85% leased, 6-story, 47,880 sf loft office building in the River North submarket

• The Property is located in the tightest office submarket in Chicago, with many nearby amenities such as restaurants, bars, cafes, hotels, etc.

• 9’6” to 13 foot ceilings and brick and timber construction with a expansive roof deck


• In-place rents are roughly 30% below market

• Non-institutional ownership group has left opportunities for strategic capital upgrades to elevate building profile

• Lease currently vacant and rolling space and perform $320,000 in base building upgrades


• Projected Gross Investment Cost Basis: $10.5 million





27

Size 47,880 sf

Asset Type Loft Office

MSA Chicago

Potential Acquisition Date

May 2016


85%


$9.6 mm



Lincoln Park Retail, Chicago Compelling Value Proposition

• Off market opportunity to acquire a 100% leased, 2-building, 12,400 sf, mixed-use portfolio in Chicago’s affluent Lincoln Park neighborhood

• The retail corridor is surrounded by a dense residential market of over 65,000 residents with an average annual family income of $253,000 and average household income of $145,000 within a one-mile radius

• The properties are between 1 and 2 blocks from an El Station which serves the Brown and Purple lines, providing easy access to the Loop and River North


• Existing partner with local knowhow, extensive leasing platform and proven ability to execute on value creation opportunity

• Retail spaces are leased to two tenants paying rents that are roughly 40% below market

• Recapture ground floor spaces, make selective capital improvements, and re-lease to boutique retailers


• Projected Gross Investment Cost Basis (After Capital and Leasing Costs): $7.2 million





28

Size 12,381 sf


MSA Chicago


April 2016


100%


$6.0 mm



Urban Retail, Brooklyn, NY Compelling Value Proposition

• Off market opportunity to acquire two existing one-story, warehouse buildings totaling 5,000 sf in the Williamsburg neighborhood.

• Ideal configuration for conversion to retail space.

• The Property is directly visible from the “Smorgasburg” weekend food market, which draws superior pedestrian traffic – over 30,000 visitors on weekend days


• ASB is experienced in successfully redeveloping urban buildings and structures to preserve their industrial character

• Sourced through existing partner with local knowhow, extensive leasing platform and proven ability to execute on value creation opportunity

• The building will be delivered vacant and the conversion to retail would begin shortly after closing.


• Projected Gross Investment Cost Basis (After Capital and Leasing Costs): $15.9 million





29

Size 5,000 sf


MSA New York City


June 2016


0%


$12.0 mm



Fulton Market Mixed-Use, Chicago Compelling Value Proposition

• Off market opportunity to acquire a 1-story, brick retail building in the rapidly transforming Fulton Market neighborhood

• The Property is located along Lake Street, a major vehicular thoroughfare connecting Fulton Market to River North

• With rezoning, Property can be improved to 4 stories with retail, parking and creative office


• Sourced through existing partner with local knowledge, extensive leasing platform and proven ability to execute on value creation opportunity

• Vacate building by December 2016 while seeking rezoning approval for $24 million redevelopment project

• Well-connected partner is already in discussions with Alderman, who has indicated high likelihood of zoning approval







30

Size 72,500 sf

Asset Type Urban Retail / Creative Office

MSA Chicago


N/A


N/A


$7.7 mm


ASB Meridian Real Estate Fund II - Investment Profiles

31

Flour Exchange Building, Minneapolis Compelling Value Proposition

• Value enhancement opportunity to reposition as unique “creative” office space sought by today’s

tenants

• Location is one block away from the transformative 1.2 million square foot Downtown East project

• Accessibility via the Minneapolis skyway system and proximity to major highways


• Off-market acquisition initiated through local partner with significant expertise and experience in the Minneapolis office market

• ASB’s nimble platform has allowed the Partnership to move quickly to closing

• Seller incentivized to close by year end due to tax treatment of sale

Investment Results






Size 101,776 sf

Asset Type Creative Office

MSA Minneapolis


N/A


78%


$7.5 mm


V. Aggregate Value Creation Investment Experience


Value-add Investment Experience - Retail

33

*Total ASB IRR is an IRR value weighted by Purchase Price / Cost Basis. Data is presented as of 12/31/14.

Property MSA

Rentable

Square

Feet

Date

AcquiredDate Sold

Holding

Period

(Yrs.)

Operating

Partner

Off-

Market

Acquisition

ASB Purchase

Price / Cost Basis

ASB Sale Price /

Current ValueASB IRR

ASB Equity

MultipleExecution Comments

1 200 Powell Street San Francisco 7,800 5/4/2006 N/A 8.7 Blatteis & Schnur Yes 16,510,068$ 29,106,876$ 8.4% 1.84x

• Speculative retail redevelopment

• Construction cost overruns

• Off-market acquisition

2 Greene Street New York 42,260 12/14/2012 N/A 2.0 L3 Capital Yes 46,972,051$ 67,191,812$ 21.4% 1.44x

• Lease termination/restructure

• Accretive tenant buy-outs

• Niche high-street product-type


• Lease-up vacancy

3 875 Washington New York 63,212 12/31/2012 N/A 2.0 Thor Equities No 94,911,407$ 120,308,300$ 14.3% 1.22x

• Creative Office

• Niche high-street expertise

• Emerging submarket


• Reposition

4 Venice Portfolio Los Angeles 21,511 1/17/2013 N/A 2.0 Blatteis & Schnur Yes 27,994,829$ 41,909,837$ 27.1% 1.52x

• Lease-up strategy


• Upgrade tenancy

5 Beverly & Robertson Los Angeles 18,548 5/24/2013 N/A 1.6 Rifkind & Berkett Yes 17,790,116$ 22,244,140$ 17.9% 1.26x

• Lease-up strategy



6 15 E. Oak Chicago 94,700 10/24/2013 N/A 1.2 Thor Equities Yes 151,239,545$ 176,032,164$ 35.9% 1.39x

• Opportunistic buy

• Credit tenant play


Current Total 355,418,015$ 456,793,129$ 25.3%

7 545 Michigan Avenue Chicago 18,711 4/15/2005 7/11/2006 1.2 Blatteis & Schnur Yes 9,250,000$ 18,712,642$ 55.3% 1.76x• Lease-up by credit tenant


8 3rd Street Promenade Los Angeles 30,750 8/12/2010 7/23/2012 1.9 Blatteis & Schnur Yes 27,019,921$ 47,184,458$ 33.8% 1.75x

•Prominent luxury retail location

with redevelopment upside

• High barriers to entry destination

shopping district

• Sourced through local partner

from broken partnership facing loan

maturity

• Value creation through expansion

of rentable area

• 100% leased to Apple

Sold Total 36,269,921$ 65,897,100$ 39.3%

Retail Total 391,687,936$ 522,690,229$ 26.6%

Current

Sold


Value-add Investment Experience - Industrial

34


Property MSA

Rentable

Square

Feet

Date

AcquiredDate Sold

Holding

Period

(Yrs.)

Operating

Partner

Off-Market

Acquisition

ASB Purchase

Price / Cost Basis

ASB Sale Price /


ASB Equity


1 Infomart Dallas Dallas 1,362,772 10/7/2005 N/A 9.2 DCI No 169,919,917$ 446,310,000$ 29.6% 4.37x

• Distressed, opportunistic purchase

• Significant lease-up of vacancy

• Targeted niche marketing program


• Reposition from office to data

2 Teaneck Data Center Northern NJ 55,642 11/1/2006 N/A 8.2 DCI Yes 11,559,473$ 5,179,400$ -18.2% .38x

• Data center redevelopment

• Weak tenant demand - remains

vacant

3 Infomart Silicon Valley San Jose 42,497 3/11/2008 N/A 6.8

Fortune Data

Center

Associates, LLC

Yes 82,432,901$ 98,000,000$ 17.3% 2.01x• Data center repositioning


4 Infomart Portland Portland 38,600 5/12/2011 N/A 3.6 DCMA Yes 65,158,299$ 97,000,000$ 15.1% 1.5x

• Speculative data center

redevelopment


Current Total 329,070,590$ 646,489,400$ 22.0%

5 Laraway Crossings Chicago 849,564 12/23/2004

Partial Sales

in 2007 and

2013

9.0 Ryan No 51,378,514$ 48,350,000$ -1.6% .92x

• Bulk industrial buildings and

development land

• Weak tenant demand through

downturn

• Two existing buildings sold, Land

remains

6 Mervyns Data Center Dallas 40,966 10/1/2005 3/12/2007 1.4 DCI No 12,187,165$ 25,000,000$ 59.8% 2.26x

• Targeted lease-up execution

• Niche data center product-type


7 Toyama Drive San Francisco 42,083 11/10/2005 9/25/2009 3.9 DCI Yes 10,162,620$ 12,490,559$ 14.2% 1.58x

• Lease termination/restructure

• Niche data center product-type



8 East Cornell Denver 285,840 9/27/2006 9/14/2012 6.0 DCI No 30,081,967$ 90,846,892$ 22.4% 2.83x

• Property repositioning


• Opportunistic exit


• Conversion of office to data center

space

Sold Total 103,810,266$ 176,687,451$ 14.1%

Industrial Total 432,880,856$ 823,176,851$ 20.1%

*Infomart line only include Industrial portion in "Purchase / Cost Basis" and "Sale Price / Current Value". Total Infomart "Purchase / Cost Basis" is $205.3 million and "Sale Price / Current Value" is $551.0 million.

Current

Sold


Value-add Investment Experience - Office

35 *Total ASB IRR is an IRR value weighted by Purchase Price / Cost Basis. Data is presented as of 12/31/14.

Property MSA

Rentable

Square

Feet

Date

AcquiredDate Sold

Holding

Period

(Yrs.)

Operating

Partner

Off-

Market

Acquisition

ASB Purchase

Price / Cost Basis

ASB Sale Price /


ASB Equity


1 455 Massachusetts Ave Washington 243,265 12/13/2004 N/A 10.1 N/A Yes 131,029,903$ 162,800,000$ 3.4% 1.2x

• Speculative office development completed during

downturn

• Slow to lease-up - now 100% leased

2 Infomart Dallas Dallas 1,362,772 10/7/2005 N/A 9.2 DCI No 39,857,758$ 104,690,000$ 29.6% 4.37x





• Reposition from office to data center

3 Two Financial Center Boston 217,763 5/21/2007 N/A 7.6 Lincoln No 134,663,193$ 141,136,305$ 5.4% 1.26x

• Speculative office development completed during

downturn

• Slow to lease-up - now 98% leased

4 625 Broadway New York 93,838 5/18/2012 N/A 2.6 Lincoln Yes 46,122,084$ 76,100,000$ 27.2% 1.8x





Current Total 351,672,939$ 484,726,305$ 10.3%

5 Clayton Corp Center St. Louis 197,957 9/22/2004 12/20/2007 3.2 EVS Realty

Advisors No 23,650,000$ 34,675,000$ 15.9% 1.52x

• Opportunistic buy in strong submarket

• Opportunistic sale

6 104 West 40th Street New York 196,967 11/1/2005 7/11/2007 1.7 Myers and

McLain Yes 82,500,000$ 145,000,000$ 41.8% 2.02x

• Lease buy-out/restructure

• Common area repositioning

• Significant releasing

• Opportunistic exit


• Entitled unused FAR

7 Playa Vista Los Angeles 788,055 3/30/2007 & 6/29/20071/31/2011 & 7/1/2014 3.5 - 7 Lincoln No 163,676,896$ 185,420,919$ 3.1% 1.16x

Phase I

• Office development

• Lease-up to credit tenant

• Opportunistic sale

Phase II

• Speculative office development

• Vacant for 3 years

• Sold vacant at discount to construction costs

8 Jefferson/Condor Los Angeles 219,011 12/16/2010 8/8/2013 2.6 Lincoln Yes 21,618,180$ 29,554,540$ 14.4% 1.37x

• Defaulted loan sourced by local partner based on

relationship with lender

• Acquired at 55% of outstanding loan balance

• Acquisition price represented 70-75% of replacement cost

• Executed deed-in-lieu in only two months

• Completed targeted capital improvements designed to

attract high-tech users

9 31 Milk Street Boston 92,422 1/10/2011 2/28/2014 3.1 Lincoln Yes 13,430,981$ 18,872,471$ 16.8% 1.73x

• Acquired from Special Servicers based on local partner's

relationship

• Acquisition price significantly below replacement cost and

most recent sale price

• Significant releasing opportunity into recovering market

• Strategic capital improvements to upgrade common areas

10 700 S Washington Washington 60,776 4/29/2011 12/22/2014 3.7 Lincoln No 13,889,659$ 16,102,815$ 4.4% 1.2x• Opportunity to add value through extension of retail lease

• Targeted capital improvements to enhance common areas

11 135 Mississippi San Francisco 28,000 4/24/2012 2/6/2015 2.7 Union Property

Capital Yes 6,218,323$ 12,097,735$ 31.1% 2.12x

• Premier emerging location with access to mass transit

and epicenter of high-tech industry

• Acquisition pricing significantly below replacement cost

Sold Total 324,984,039$ 441,723,480$ 15.7%

Office Total 676,656,978$ 926,449,785$ 17.0%

*Infomart line only include Industrial portion in "Purchase / Cost Basis" and "Sale Price / Current Value". Total Infomart "Purchase / Cost Basis" is $205.3 million and "Sale Price / Current Value" is $551.0 million.

Current

Sold


Value-add Investment Experience - Residential

36


Property MSA

Rentable

Square

Feet

Date

AcquiredDate Sold

Holding

Period

(Yrs.)

Operating

Partner

Off-

Market

Acquisition

ASB Purchase

Price / Cost Basis

ASB Sale Price /


ASB Equity


1 The Peninsula I Boston 170,675 8/19/2004 N/A 10.4 Corcoran

Jennison Yes 55,790,040$ 71,100,000$ 9.9% 1.77x • Apartment development

2 The Peninsula II Boston 115,152 8/19/2004 N/A 10.4 Corcoran

Jennison Yes 38,180,813$ 49,800,000$ 5.4% 1.24x • Apartment development

3 333 Fremont San Francisco 69,697 3/29/2005 N/A 9.8 City Core

Development Yes 49,111,625$ 50,952,000$ 2.1% 1.07x

• Apartment development site

mothballed through downturn

4 Blue Minneapolis 193,622 6/1/2007 N/A 7.6 Greco Yes 44,350,011$ 60,174,839$ 10.3% 1.4x • Apartment development

5 Lime Minneapolis 135,147 11/1/2012 N/A 2.2 Greco Yes 34,545,772$ 38,352,541$ 25.5% 1.57x• Apartment development


6 Elaine Place Chicago 176,150 11/8/2012 N/A 2.1 Marc Realty Yes 32,500,402$ 38,071,897$ 14.6% 1.28x

• Opportunistic buy

• Select redevelopment


Current Total 254,478,665$ 308,451,277$ 10.5%

7 Cork Factory Apartments Pittsburgh 313,486 1/11/2005 12/10/2007 2.9 MacCafferey

Interests Yes 43,700,000$ 51,057,000$ 11.4% 1.19x • Apartment redevelopment

8 Valley Family Investors Stockton N/A 6/1/2011 1/15/2014 2.6 Grupe Yes 9,070,073$ 11,090,345$ 11.5% 1.22x

• Opportunity to leverage local

partner expertise

• Acquisition of properties at far

below historic values

Sold Total 52,770,073$ 62,147,345$ 11.4%

Residential Total 307,248,738$ 370,598,622$ 10.6%

Current

Sold


Value-add Investment Experience – Land and Portfolio Totals

37


Property MSA

Rentable

Square

Feet

Date

AcquiredDate Sold

Holding

Period

(Yrs.)

Operating

Partner

Off-

Market

Acquisition

ASB Purchase

Price / Cost Basis

ASB Sale Price /


ASB Equity


1 Hamilton Park New York - 12/5/2003 9/3/2010 6.8 N/A Yes 5,400,000$ 4,500,000$ -8.5% .57x

• Residential development parcel

• Development delayed in light of

market downturn

2 Playa Vista - Phase III Los Angeles N/A 3/30/2007 12/2/2014 7.7 Lincoln Yes 29,300,000$ 29,029,270$ -0.7% .96x • Land entitled for office

3 350 Bush and 500 Pine San Francisco Proposed

427,000 sf 9/1/2007 4/23/2014 6.6 Lincoln No 43,609,500$ 40,590,000$ -1.8% .89x

• Office development site

• Delayed development in light of

market downturn

• Sold at close to book value

4 PV10 Los Angeles N/A 10/15/2010 12/1/2014 4.1 Lincoln Yes 18,081,201$ 69,298,974$ 43.6% 3.83x

• Acquired from lender at price

equal to 20% of peak value

• Development land with liberal

zoning

• Value enhancement through lot-

line adjustment and infrastruction

development

Land Total 96,390,701$ 143,418,244$ 6.7%

Portfolio Current Total 1,290,640,209$ 1,896,460,112$ 17.4%

Portfolio Sold Total 614,225,000$ 889,873,620$ 20.5%

Portfolio Total 1,904,865,210$ 2,786,333,732$ 18.2%

*Total ASB IRR is an IRR value weighted by Purchase Price / Cost Basis.

Sold


VI. ASB Real Estate Team


Robert B. Bellinger* ASB Real Estate Investments

President & CEO

Real Estate Investment Advisory Committee (REIAC) Members

Walter R. Fatzinger, Jr. (Chairman) Independent Board Member

Philip J. Mudd Independent Board Member

Martin D. Krall Independent Board Member

Philip Caraci Independent Board Member

F. Joseph Moravec Independent Board Member

B. Francis Saul, III Saul Investment Group

Peter M. Welber Chevy Chase Trust

Christine Nicolaides Kearns B.F. Saul Company

Joyce R. Frater Independent Board Member

Organizational Leadership

Capital Investments Group Client Services Portfolio Management Portfolio Accounting Legal/Compliance

David Quigley* Chief Investment Officer

Jim Darcey* Managing Director

Clyde Robinson Managing Director

& Group Head

Judy McCoy Managing Director

Patrick Connors*† Senior Vice President Director of Finance

Taryn Fielder* Senior Vice President

General Counsel

Paul Duncan*† Chief Compliance Officer

Allison Ferko† Vice President

Assoc. General Counsel

Hanneke Talbot Senior Vice President

Chief Accounting Officer

Larry Braithwaite Vice President

Kyle Mayes Vice President

Human Resources Technology

Ted Koutris† Senior Vice President

Kenneth Kovach† Senior Vice President

Operations

Karen Shotts Vice President

Brodie Ruland* Senior Vice President

Aaron Duncan* Senior Vice President

Nick Franzetti* Senior Vice President

Laura Forton Vice President

Frank Nigro, Jr. Vice President

* Investment Committee Members † Shared resources from parent company

39


ASB Real Estate Investments – Senior Investment Team

ASB’s senior investment team has a over ten-year track record of working together to produce superior results for ASB’s

funds.

Robert B. Bellinger, CFA, President, CEO – Mr. Bellinger is responsible for overseeing all functions of ASB Real Estate Investments Mr.

Bellinger also serves as the Executive Portfolio Manager for the ASB Allegiance Real Estate Fund. Mr. Bellinger has 30 years of real estate

investment experience, and has completed over $10 billion in real estate capital transactions during his career. Prior to joining ASB Capital

Management in 2002, Mr. Bellinger worked with Lend Lease Real Estate Investments as a Principal and Executive Vice President heading the

Private Client Group, directing the National Asset Sales group, and leading the acquisition of equity and debt investments in the Washington, DC

region. Prior to joining Lend Lease in 1990, Mr. Bellinger worked as a Development Project Manager with Trammell Crow Company. He is the

founder and a current advisory board member of Rebuilding Together Philadelphia. Mr. Bellinger also serves on the Board and Executive

committee of the Zell Lurie Real Estate Center of the Wharton School at the University of Pennsylvania. Mr. Bellinger received a BA with honors

from Haverford College and an MBA from the Wharton School where he received the Dean’s Award of Excellence.

David T. Quigley, Managing Director and Chief Investment Officer – Mr. Quigley is responsible for real estate acquisitions in the Western

Region of the United States, and based in the San Francisco office. Prior to joining ASB Capital Management, Mr. Quigley was a Partner and

Senior Vice President in the Los Angeles office of ING Realty Partners, where he was primarily responsible for investment activity, including

identifying, evaluating and closing transactions; negotiating joint venture documentation with capital and operating partners; and obtaining third

party debt to facilitate closings. Prior to joining ING Realty Partners, he was Director of Project Finance for Essex Property Corporation. Mr.

Quigley received a BA degree from Stanford University and an MBA from Columbia University.

H. James Darcey, Managing Director – Responsible for ASB's Eastern Region real estate portfolio, including new investment, asset

management and property disposition activities. Mr. Darcey serves as Portfolio Manager for the Meridian Funds, ASB's series of low-leverage

value creation closed-end funds, and is a member of ASB's Management Committee. Prior to joining ASB Capital Management, Mr. Darcey was

Senior Vice President of Asset Management and Acquisitions at Lowe Enterprises Real Estate Group in Washington, DC, where he had primary

responsibility for all asset and property management activities in the Eastern Region, including the management of asset management and

property management personnel. He received an MBA from the University of Southern California and a BS in Business Administration with a

concentration in Accounting from the University of San Diego.

40


ASB Real Estate Investments – Capital Investments Group

Brodie Ruland, Senior Vice President – Mr. Ruland is responsible for sourcing, underwriting, and due diligence of potential real estate

acquisition opportunities, and asset management of existing assets. Prior to joining ASB Capital Management, Mr. Ruland was a Navy Supply

Corps Officer assigned to the Naval Nuclear Propulsion Program where he was primarily responsible for underwriting and due diligence of new real

estate and capital project investments for the Program’s R&D laboratories. Mr. Ruland is a member of the Zell Lurie Real Estate Center of the

Wharton School at the University of Pennsylvania and the Urban Land Institute. He received a BBA from Loyola University in Maryland and an MBA

from the Wharton School.

Aaron Duncan, Senior Vice President – Mr. Duncan is responsible for originating, underwriting and managing west coast investments for the

firm's real estate investment funds. Mr. Duncan joined ASB Capital Management in 2008 and has nine years of investment experience. Mr.

Duncan began his career in Investment Banking and Corporate Finance where he focused on mergers and acquisitions and debt and equity

financings for banks and diversified financial services firms. He received his BA in Economics with a Minor in Urban Studies from Stanford

University. He completed his MBA at The Wharton School where he majored in Real Estate and Entrepreneurial Management.

Nicolas Franzetti, Senior Vice President – Mr. Franzetti is responsible for the acquisition, disposition, and asset management of investments in

the Eastern region. Prior to joining ASB Capital Management, Mr. Franzetti worked at Friedman Billings Ramsey performing fixed income research

and at First Advantage Mortgage Company as a loan manager. He received an MBA from Georgetown University and a BA in English Literature

from McGill University. He is an active member of the Urban Land Institute Washington, D.C.

Laura Forton, Vice President – Ms. Forton is responsible for valuing, underwriting, and due diligence of potential acquisition opportunities and

asset management functions. Prior to joining ASB Capital Management, Ms. Forton worked as a Senior Production Analyst at CBRE in San

Francisco. She received a BS degree from The Wharton School of the University of Pennsylvania.

41


ASB Real Estate Investments – Finance, Legal & Portfolio Management

Hanneke Talbot, Senior Vice President, Chief Accounting Officer – Ms. Talbot has overall responsibility for the accounting function at ASB.

She has approximately 10 years of experience working with various real estate asset classes, including office, retail, industrial, lodging, seniors

housing and property developers. Prior to joining ASB, she worked with Capitol Seniors Housing, as the Chief Financial Officer. Prior to that, she

spent almost 7 years with Deloitte and Touche LLP, as a senior manager in the Audit and Enterprise Risk Services practice, focused on providing

external audits to privately-held real estate owner/operators as well as publicly-listed companies in the technology industry. Prior to Deloitte, she

worked for Marriott International and Freddie Mac as internal audit manager, and she also owned her own business for three years. Ms. Talbot

obtained her Bachelor of Commerce and Master of International Business degrees from the University of Auckland in New Zealand. She is a

Chartered Accountant (New Zealand) and a CPA licensed in Virginia.

Taryn Fielder, Senior Vice President, General Counsel – Ms. Fielder is responsible for the legal affairs of ASB, including serving as the

principal legal advisor to ASB's management team. After graduating from Harvard Law School in 2002, Ms. Fielder spent two years with Simpson,

Thacher and Bartlett LLP in New York City where she practiced corporate and real estate law. In 2004, Ms. Fielder moved to Washington, D.C. to

join the Real Estate Group at Hogan & Hartson (now Hogan Lovells) where she practiced for nearly seven years. Ms. Fielder took a three-month

leave of absence from the firm during late 2008 to early 2009 to serve as Deputy General Counsel of the 2009 Presidential Inaugural Committee.

In 2011, Ms. Fielder joined DiamondRock Hospitality Company, a publicly-traded REIT, as Assistant General Counsel - a role she held until joining

ASB in June of 2013. Ms. Fielder graduated summa cum laude from Eckerd College in St. Petersburg, Florida with majors in Political Science and

International Relations & Global Affairs and minors in French and Theater. In 2009, Ms. Fielder received the college's "Outstanding Young Alumni

Award" for accomplishments in her career and commitment to community service.

Lawrence Braithwaite, Vice President, Assistant Portfolio Manager – Mr. Braithwaite is responsible for monitoring and evaluating the

suitability and impact on portfolio composition, risk, and performance of proposed new investments, leasing activity, sales and financings, in

addition to playing an important role in product development, client service and client reporting efforts. Prior to his responsibility as an Assistant

Portfolio Manager, Mr. Braithwaite was an Investment Manager with ASB’s Capital Investment group where he focused on acquisitions and asset

management and was a Senior Analyst with Morgan Stanley & Co. in the Investment Banking Division prior to ASB. He received his BA with

distinction from The University of North Carolina at Chapel Hill, where he is a Morehead-Cain Scholar, and an MBA from Harvard Business School.

Kyle Mayes, CFA, Vice President, Manager of Portfolio Research & Analytics – Mr. Mayes is responsible for portfolio research and

analytics. Prior to joining ASB Capital Management, Mr. Mayes worked as Senior Portfolio Management Analyst at E*TRADE Financial Capital

Markets, managing and analyzing a whole loan portfolio. Prior to joining E*TRADE Financial, he worked as a financial consultant for IBM Business

Consulting. He received a BS degree in Economics from Duke University, and holds the CFA charter. He is a member of the CFA Society of

Washington, D.C., and the Maryland/D.C. chapter of NAIOP.

42


ASB Real Estate Investments – Client Service

Clyde W. Robinson, Managing Director and Group Head – Mr. Robinson is responsible for overseeing all client relations activities, Mr.

Robinson has over 25 years of fiduciary experience as a senior executive and attorney. With an extensive background in global marketing and

client service, he has raised over $3 billion in real estate equity capital during his career. Prior to joining ASB, he was Senior Vice President &

Director of Capital Strategies for Dallas-based Hunt Realty Investments. Prior to that, he was Managing Director of Global Capital Markets & Client

Relations for the J.E. Robert Companies. Mr. Robinson also spent over a decade “inside Washington, DC” at the Export-Import Bank of the U.S. as

Vice President & Counselor to Chairman, and as Deputy Assistant Secretary for Trade Development and then as Deputy Chief of Staff to the U.S.

Secretary of Commerce. He began his professional career as a corporate and real estate attorney for four years at a major, private Washington

law firm. Mr. Robinson received a JD degree from the University of Virginia School of Law and a BS in Electrical Engineering from the University of

Rochester.

Judy K. McCoy, Managing Director – Ms. McCoy is Co-Head of the Client Service team and is responsible for overall business development and

client service activities for the Taft Hartley Pension and Non-Pension sectors. Ms. McCoy has over 30 years of experience in the financial services

industry. Prior to joining ASB Capital Management, she was Managing Director of Sales and Marketing of Allied Investment Advisors. Prior to that,

she was a Senior Vice President in Bank of America’s National Clients Group. Ms. McCoy is a graduate of Cannon Trust School at the University of

North Carolina.

Frank Nigro, Jr., Vice President – Mr. Nigro is responsible for business development and client service activities. Mr. Nigro has over eight years

of experience in the financial services industry. Prior to joining ASB Capital Management, he was a consultant at The Marco Consulting Group

specializing in multi-employer defined benefit and defined contribution plans. Mr. Nigro has a BS degree in Political Science with a minor in

Economics/Business from Salem State University and an MS in Economics from Boston University.

43


VII. Summary of Terms & Compliance


The Fund: ASB Meridian Real Estate Fund II, L.P.

Performance Objective: 12% to 14% compounded gross annual internal rate of return to the investors

Offering Size: General Partner Commitment: Term: Investment Period:

$150 to $250 million target 10% of Total Capitalization, up to $16 million Eight Year Life From Initial Closing Three Years From Initial Closing

Management Fee: 1.25% of Net Capital Contributions – No Fee On Committed Capital

Distributions: Return of Capital and a 7% annual compounded return; 20% to the General Partner up until a 12% annual compounded return; Thereafter, 30% to the General Partner No Catch-Up

Limitations: Leverage:

The Fund may not generally invest more than: 20% of aggregate Capital Commitments in a single property 40% of aggregate Capital Commitments in a single MSA Target leverage of 20% to 30%

ASB Meridian Real Estate Fund II - Executive Summary of Terms


Year

Income

Return

Capital

Return Total Return

Net Assets

(USD Millions) Leverage

External

Valuation Accounts

7/10 –12/10 -0.6% 0.0% -0.6% 4.6% 61.304$ 0% 100% 1 8,077.1$ 0.8%

2011 0.7% 37.3% 38.1% 14.3% 128.140$ 5% 100% 1 9,010.2$ 1.4%

2012 2.1% 10.3% 12.5% 10.5% 116.747$ 6% 100% 1 12,833.3$ 0.9%

2013 2.5% 1.2% 3.7% 11.0% 82.267$ 10% 100% 1 16,700.4$ 0.5%

2014 1.0% 67.9% 69.6% 11.8% 14.175$ 0% 100% 1 19,391.9$ 0.1%

Year

Gross - SI-

IRR% Net - SI-IRR%

NPI

Benchmark SI

Total2

Total

Committed

Capital

(USD Millions)

Paid-in Capital

(USD Millions)

Cumulative

Distributions

(USD Millions)

TVPI

Multiple

DPI

Multiple RVPI Multiple PIC Multiple

7/10 –12/10 -2.1% -2.2% 4.6% 113$ $ 62 $ - 0.99 - 0.99 0.55

2011 33.2% 30.2% 15.3% 113$ $ 94 $ - 1.37 - 1.37 0.83

2012 22.7% 20.8% 13.2% 113$ $ 113 $ 45 1.43 0.40 1.03 1.00

2013 17.8% 16.3% 12.5% 113$ $ 113 $ 84 1.47 0.74 0.73 1.00

2014 23.7% 21.9% 11.8% 113$ $ 113 $ 189 1.79 1.67 0.13 0.76

TVPI (investment multiple) = total value to paid-in capital

DPI (realization multiple) = cumulative distributions to paid-in capital

RVPI (unrealized multiple) = residual value to paid-in capital

PIC (PIC multiple) = paid-in capital to committed capital

Notes:

ASB Capital Management LLC Schedule of Performance Results

The ASB Meridian Real Estate Low-Leverage Value Creation Composite I

ASB Meridian Real Estate Fund I Composite

YE Firm Total

Net Assets

(USD Millions)

3) Past performance is not necessarily indicative of future results.

Gross-of-Fees Returns

NPI

Benchmark

Total1

1) The benchmark for performance is the NCREIF Property Index (NPI). This Index is a quarterly time series composite total rate of return measure of property- level

performance of a large pool of individual commercial real estate properties acquired in the private market for investment purposes only. As the benchmark is only

measured on a quarterly basis, the 2010 return for the benchmark is the return for the fourth quarter only (partial period is excluded).

2) The SI- IRR benchmark is the NPI measured on a time- weighted basis since inception. As the benchmark is only measured on a quarterly basis, the since inception

date used for the benchmark is first date of the first full quarter following the Composite's inception (10/1/10). The Composite IRR is measured with the beginning date

of 7/27/2010.

Percent

of Firm's

Assets


Compliance Statement - ASB Capital Management LLC claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. ASB Capital Management LLC has been independently verified for the period 12/01/99-06/30/15. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. Definition of the Firm - For the purposes of applying the GIPS Standards, the firm is defined as ASB Capital Management LLC, an independent registered investment adviser. The firm was founded in 1983, and specializes in providing equity, fixed income and real estate investment management to institutional investors. The firm adopted the GIPS standards for all periods of performance beginning 01/01/1993. The firm has chosen to be GIPS verified as of 12/01/1999. The firm maintains a complete list and description of composites, which is available upon request. The ASB Meridian Real Estate Low-Leverage Value Creation Composite I - The ASB Meridian Real Estate Low-Leverage Value Creation Composite I includes a single closed-end real estate equity fund managed by the Firm with strategy of investing in value creation real estate opportunities and utilizing low-leverage to enhance returns. Portfolio management invests in a portfolio of properties located in major markets within the United States. The composite targets value creation real estate opportunities through ground-up development, re-development and re-positioning in established and emerging submarkets where demographic fundamentals are expected to generate above inflationary rental rate growth. Real estate investments are generally illiquid, and the investment outlook may change given the availability of credit or other financing sources. The composite utilizes leverage in the form of mortgages and other indebtedness. This leverage is secured by real estate investments held by the Fund. This composite is measured

against the NCREIF (National Council of Real Estate Investment Fiduciaries) Property Index. The composite name used to be “The ASB Meridian I Real Estate Composite.” The name and definition were clarified in April 2014 to reflect the low-leverage, opportunistic strategy that was in effect during the life of the fund. In January 2015, the name of the composite was changed to “ASB Meridian Real Estate Low-Leverage Value Creation Composite I” to avoid confusion on the type of properties included in the Composite. The composite was created in October 2010. The composite vintage year is 2010, which was determined based on the Fund’s first capital call in October 2010. Description of Discretion - The Firm has complete discretion for all investment activities within the Fund. The Firm exercises full discretion over the selection, capitalization, asset management, and disposition of investments in wholly-owned properties and joint ventures. Valuation - Assets are internally valued quarterly by the Firm and appraised at least annually by an independent appraiser. The percentage of composite assets valued using an external valuation is shown for each annual period. When market circumstances dictate, the Firm may increase the frequency of external appraisals. External property valuations rely primarily on the application of market discount rates to future projections of free cash flows (unleveraged cash flows) and capitalized terminal values over the expected holding period for each property. Other valuation techniques, such as the sales comparison approach and the replacement cost approach, are also employed by appraisers as secondary estimators of value. Property mortgages, notes, and loans are marked to market using prevailing interest rates for comparable property loans, if the terms of existing loans preclude the immediate repayment of such loans. Internal investment valuations are determined by adjusting previous appraisal values by the change in capital expenditures since the previous appraisal. Due to the nature of real estate investments, valuations are based upon subjective unobservable inputs. ASB maintains a GIPS Policy and Procedures Manual that contains policies for valuing portfolios, calculating performance, and preparing compliant presentations. The manual is available upon

request. Basis of Accounting - All assets and liabilities are reported on a fair value basis using U.S. Generally Accepted Accounting Principles for non-operating companies. Calculation of Performance Returns - Returns are presented in U.S. dollars and are net of leverage. Since inception returns are shown both gross and net of management fees and include the reinvestment of income. Net-of-fee returns are net of actual investment management fees, including incentive fees, which are recorded on an accrual basis. Time-weighted returns are presented gross of management fees and include reinvestment of income. Capital expenditures, tenant improvements, and lease commissions are capitalized, included in the cost of property, and reflected in the capital return component. Income and capital returns may not equal total returns due to the compounding linking of quarterly returns. Composite time-weighted returns are calculated quarterly on an asset-weighted basis using beginning-of-period values. Annual returns are calculated by linking quarterly composite returns. SI-IRRs are calculated using daily cash flows since inception. Investment Management Fees - The Fund pays an incentive fee of 10% of profits if the SI-IRR exceeds a preferred real return to investors of 7%. The incentive fee is calculated monthly. The standard annual investment management fee is equal to 0.75% of the aggregate Gross Investment Cost of all Investments. Benchmark – The NCREIF Property Index is a quarterly time series composite total rate of return measure of stabilized property-level performance of a large pool of individual commercial real estate properties acquired in the private market for investment purposes only. The benchmark is not leveraged and does not include the impact of partnership interests, cash or other fund level items. There is no SI-IRR benchmark available for the 2010 vintage year.


• This presentation is made on a confidential basis to a qualified prospective investor. Prospective investors or other recipients of this

presentation may not use, reproduce or distribute or disclose this information in any manner unless required by law. This presentation

is not to be considered a general solicitation under Regulation D of the U.S. Securities Act of 1933, as amended. Prospective investors

will be required to deliver certain representations and warranties regarding its eligibility to invest.

• Units of the ASB Meridian Real Estate Fund II, LP have not been registered under the U.S. Securities Act of 1933, as amended, or the

securities laws of any other jurisdiction, not is such registration currently contemplated. The units are being offered under the

exemption provided by Section 4(2) of the Securities Act and Regulation D promulgated thereunder, and similar exemptions under the

laws of other jurisdictions where the offering is made. In addition, the ASB Allegiance Real Estate Fund LP is not registered under the

U.S. Investment Company Act of 1940, as amended, and is relying on an exemption from the registration requirements thereof.

• This presentation contains information regarding the ASB Meridian Real Estate Fund II, LP. It does not purport to be complete and it is

subject to and in its entirety by reference to the Partnership Agreement, the Subscription Agreement and such other documents, copies

of which will be provided to each qualified prospective investor.

Documents

ASB Meridian Real Estate Fund II, L.P. - cfrs-ca.org · – Responsible for ASB's Eastern Region real estate portfolio, including new investment, asset management and property disposition