UPDATE FROM OUR ORANGE COUNTY OFFICE

$18,150,000 Non-Participating 100% Financing to Entitle and Acquire 5 Land Parcels Adjacent to Major Resorts in 4 States: This is one of the more creatively structured financing facilities arranged by GSP in 2002. Overview: Our client, a successful developer of a broad range of property types on a national basis had optioned 5 separate parcels-each one is surplus land, adjacent to significant resort hotels. The developer intends to amend, where applicable, certain existing entitlements and permits since each parcel had imperfect entitlements. There is an opportunity to re-entitle each of the properties for condominium development. The new condos would become part of each respective hotel's rental pools, expanding room capacity and providing additional services. Development Scope: Upon entitlement there will be 212 total units. If the client develops each of the properties, projected gross revenue is in excess of $125,000,000. Product types includes golf course fronting casitas, a ski resort mid-rise and an urban "beach adjacent high rise". Financing Request: A source that would provide a two stage non-recourse commitment: (1) $4,950,000 Entitlement Financing including: land option payments, costs-to-date prior to recording, pre-development design, preliminary engineering, legal and professional services, overhead and interest reserve. Upon entitlements, expected to occur sequentially over the next 12 to 18 months, lender is issuing: (2) a $13,200,000 Standby Commitment to fund 100% of the costs of the entitled land purchases. The lender's security consists of an assignment of the borrower's option agreements. Terms and Benefits: The terms of the financing are confidential. Once the projected entitled land values are realized, the developer will retain 75% of the profit created, excluding development profit. (George Smith)

$1,720,000; 7.30% "Fixed to Floating" Refinance of 23,000 s.f. Office Building in South Orange County: GSP has arranged fixed rate (for 5 years), which converts to floating for the 2nd five years for this primarily "garden office" property with two restaurants and some medical use, located in South Orange County. The owner purchased the property two years ago and used private financing to facilitate the acquisition. The refinancing was done through a portfolio lender, which allowed the owner to change the structure of the borrowing entity for estate planning purposes. Terms: (1) Rate: 7.30% fixed (5 year CMT + 2.95%) for 5 years, then 6 Month LIBOR + 2.45%; (2) Term/Amort: 10/25; (3) LTV: 65%; (4) DCR: 1.30; (5) Non recourse; (6) Prepayment Penalty: 5-4-3-2-1-0; (7) Lender fee: Par. (Mike Gottlieb)

Apartment Financing for Loans at $25 million or more - at 2.95% Floating Rate (Equivalent of 90 Day Libor + 120), 10yr/30yr Amortization, 75% LTV with Fixed Rate Conversion Option: FNMA/DUS DMBS Program (formerly available only for portfolios over $100 million) is now available on a "one off" basis for good quality loans in excess of $25 million. (1) Origination Fee: 1% (note: George Smith Partners is a correspondent for ARCS Commercial Mortgage, the nation's largest Fannie Mae originator, and there is no premium in the origination fee when GSP originates these loans). (2) Loan Amount: 75% Loan to Value (equates to approximately 10.3 x Net Cash Flow based on 7.25 market cap rate). (3) Interest Rate: The index trades below 90 day LIBOR. Borrower pays a "spread" above the index consisting of a Fannie Mae guarantee/servicing fee plus 20 bps. At present, the rate is approximately 90 day LIBOR + 1.00% (the index is derived from the sale and repurchase every 3 months on a discounted basis of non-interest bearing Fannie Mae mortgage backed securities) and based on 30/360 interest payment. Bottom Line: This is the most efficient execution of floating rate apartment financing we have ever seen, borrowers benefit enormously from the ultra-low rates. (4) Cap Purchase: Approximately 100 bps (to purchase a 5 year cap calculated to break-even debt service), which is equivalent to 20 bps per year when added to the LIBOR +100 base pricing. (5) Fixed Rate Conversion: Right to convert to Fannie Mae's Fixed Rate Program with 7 or 10 year terms at a $5,000 cost. (6) Occupancy: 90% or higher physical occupancy rate for at least three consecutive months preceding the date of the Commitment. (7) Tax and Insurance Escrows: Required. (8) Replacement Reserves: Required and same guidelines as Fannie Mae fixed and typical ARM financings. (9) Processing Fees: (a) legal estimated at $6500 (b) $1500 for credit, photo copying, mailings and verifications (c) $20,000 deposit for 3rd party reports including full narrative appraisal report, an environmental report, physical needs assessment report and seismic report.