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To: Dan Zack May 7.A. - Page 15 <br /> Subject: Developer Proposals <br /> Demonstration of Financial Capacity <br /> ■ Hunter Storm <br /> - For Kilroy Realty Corporation, provided 10-K and 2Q 2011 Supplemental <br /> Financial Report. Annual Report and SEC Filings available at <br /> KilroyRealty.com. <br /> ■ BPR Properties <br /> - None provided <br /> ■ Lowe Enterprises <br /> - 2008-2010 Balance Sheets and statement of Operations. Corporate Brochure <br /> (in lieu of annual report). No financial documents were provided for Carlyle. <br /> General Approach to Project Financing <br /> ■ Hunter Storm <br /> - The project has an estimated budget of $133,222,838 (hotel construction <br /> does not appear to be included). With Kilroy Realty Corporation as their <br /> financial partner, the project will be funded through an REIT. "The benefit of <br /> an REIT arrangement is that there is no need for a construction loan or <br /> project specific debt... It is important to note that this project does not allow <br /> for an incremental approach to financing as there is a substantial amount of <br /> infrastructure that needs to be constructed at the onset." <br /> ■ Lowe Enterprises <br /> - The office portion of the project has an estimated budget of $109,438,015 <br /> and the apartment portion has an estimated budget of $47,917,703, totaling <br /> $157,355,718. These numbers are reduced to $104,076,961 and 45,127,797, <br /> respectively, if the project is built on a ground lease instead of purchased <br /> land. "The capital for the Depot Circle development will be from Carlyle's sixth <br /> U.S. real estate fund, Carlyle Realty Partners VI (CRP VI). CRP VI... is a <br /> $2.34 billion fund that invests in residential, hotel, senior living, retail and <br /> office sectors.... Approximately $500 million has been invested or committed <br /> with over $1.8 billion available for outstanding investment... The business <br /> plan is to build the project on Block 2 as quickly as possible. In order to <br /> facilitate this, Carlyle has access to a substantial line of credit which may <br /> serve as bridge financing while a project specific construction loan is being <br /> approved." <br /> Page 4 of 8 <br />