Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`
`ESTTA Tracking number:
`
`ESTTA737840
`
`Filing date:
`
`04/05/2016
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Proceeding
`
`92056432
`
`Party
`
`Correspondence
`Address
`
`Plaintiff
`Nationwide Mutual Insurance Company
`
`JOSEPH R DREITLER
`DREITLER TRUE LLC
`19 E KOSSUTH ST
`COLUMBUS, OH 43206
`UNITED STATES
`jdreitler@ustrademarklawyer.com, mtrue@ustrademarklawyer.com, ttro-
`fino@ustrademarklawyer.com, ahilton@ustrademarklawyer.com
`
`Submission
`
`Filer's Name
`
`Filer's e-mail
`
`Signature
`
`Date
`
`Attachments
`
`Testimony For Plaintiff
`
`Mary True
`
`mtrue@ustrademarklawyer.com, jdreitler@ustrademarklawyer.com,
`ahilton@ustrademarklawyer.com
`
`/Mary R True/
`
`04/05/2016
`
`24137 Depo Exh 1.PDF(35518 bytes )
`24137 Depo Exh 2.PDF(25542 bytes )
`24137 Depo Exh 3.PDF(19673 bytes )
`24137 Depo Exh 4.PDF(205488 bytes )
`24137 Depo Exh 5.PDF(162393 bytes )
`24137 Depo Exh 6.PDF(270583 bytes )
`24137 Depo Exh 7.PDF(83708 bytes )
`24137 Depo Exh 8.PDF(31046 bytes )
`24137 Depo Exh 9.PDF(53779 bytes )
`24137 Depo Exh 10.PDF(108117 bytes )
`24137 Depo Exh 11.PDF(89034 bytes )
`24137 Depo Exh 12.PDF(1437200 bytes )
`24137 Depo Exh 13.PDF(2117524 bytes )
`
`

`
`r2‘;
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`IN THE MATTER OF: TRADEMARK REGISTRATION NO. 3,600,523 1 - NATIONWIDE
`REALTY
`
`DATE OF REGISTRATION: March 31, 2009
`
`NATIONWIDE MUTUAL INSURANCE
`C OMPANY
`
`Petitioner,
`
`V
`
`NATIONVVIDE REALTY, LLC
`
`Registrant.
`
`Petition to Cancel 92056432
`
`NOTIQ §E QF TE§TIM§ ]NY DEP§ QSITION QF
`CHRIS THOMPSON
`
`PLEASE TAKE NOTICE that pursuant to 37 C.F.R. § 2.l23(a), Petitioner Nationwide Mutual
`
`Insurance Company will take the testimony deposition upon oral examination of Chris Thompson ,
`
`Director, Real Estate of Nationwide Realty Investors. The deposition testimony will be recorded
`
`by stenographic means at the offices ofNationwide Realty Investors, 375 S. Front Street,
`
`Columbus, Ohio 43215. Mr. Thompsons will testify on behalf of Petitioner on the matters
`
`previously identified in Petitioner’s Pretrial Disclosures, incorporated by reference herein. The
`
`deposition will commence at 9:30 am EDTon Wednesday, October 21, 2015. Video
`
`conferencing will be available. If necessary, the deposition will be adjourned until completed.
`
`
`
`

`
`Dated: October 6, 2015
`
`Respectfully submitted,
`
`Isl Mary R. True
`Mary R. True
`Joseph R. Dreitler
`DREITLER TRUE LLC
`19 East Kossuth Street
`
`Columbus, Ohio 43206
`Telephone: (614) 449-6677
`
`Email: idreit1er@ustrademarklawyencom
`mtrue@ustrademarklawyencom
`
`Attomeysfor Petitioner Nationwide Mutual
`Insurance Company
`
`

`
`E
`
`TE FER E
`
`I hereby certify that a true and correct copy of the foregoing has been served by
`electronic mail upon Registrant’s attorney of record in this proceeding on this 6th day of
`October 2015, by email to the following KSmz’th@;iggsabney.com and by first class mail,
`postage prepaid thereon, to the attorneys for Registrant as follows:
`
`Kenneth M. Smith, Esq.
`Riggs, Abney, Neal, Turpen, Orbison & Lewis
`4554 S. Harvard Ave., Suite 200
`Tulsa, Oklahoma 74135-2906
`
`/s/ Mary R. True
`Mary R. True
`
`

`
`
`
`Nationwide®
`
`CHRISTOPHER J. THOMPSON
`
`Chris Thompson is Director of Real Estate for Nationwide Realty investors, Ltd., the
`reai estate investment and development arm of Nationwide Mutual
`Insurance
`Company.
`
`in this role, Thompson is currently responsible for originating and managing real
`estate investments.
`His current projects include Rivulon and Gainey Ranch
`Corporate Center located in Arizona, and the Arena District, home of the NHL‘s
`Columbus Blue Jackets located in Ohio.
`
`Thompson has over 25 years of experience in real estate investment, management
`and development, and is one of the original members of Nationwide Realty investors
`which began operation in 1997. Through the years Thompson has been directly
`responsible for many different product types of real estate ranging from office and
`retail
`to marinas, hotels and parking.
`Specific experience includes commercial
`lending and borrowing, teasing, acquisitions and dispositions.
`
`Thompson holds an undergraduate degree in Finance from Franklin University.
`
`Nationwide. a Fortune ‘[00 company, is one of the largest diversified insurance and
`financiat services organizations in the worid, with more than $157 billion in assets.
`
`375 North Front Street, Suite 200, Cotumbus. OH 43215 PH: 614.857.2330
`
`DEPOSITION
`
`EX IBIT
`
`NW6634
`
`

`
`Nationwide Development Company
`Projects 1950-1980
`
`Lincoln Village — PUD north of Columbus, Ohio
`0 Sing1e—farni1y, apartments and condoininium residences for 1 1,000 people
`0 Shopping centers, schools, churches, a library, a hospital
`0
`Industrial sites
`
`Annchurst Villagc- PUD in Westerviile, Ohio
`0 Single-family, apartments, condominiums
`0 Research industrial park
`0 Shopping center
`Pinetrec Community —- PUD in Atlanta, GA
`0
`Sing1e—f'amily, apartments, condominiums
`0 Mixed use
`
`Thurber Village
`Green Meadows Village — PUD in Delaware County, Ohio
`Lincoln Park West apartment community
`Jaycees Arms apartment building
`Market—Mohawk redevelopment
`Brunswick Industrial Park, Brunswick, Ohio
`South Meadows Village, Grove City, Ohio
`Nationwide Plaza
`
`Property holdings
`222 acres in Broward County, FL
`6 acres near Dallas-Fort Worth Airport
`15 acres near Clearwater, FL
`
`Singie-family residential lots in Greentree North, Rcynoldshurg, Ohio
`Single—family residential lots in Cherry Run, Gahanna, Ohio
`30% interest in industrial park adjacent to Bolton Field, Columbus, Ohio
`Limited partnership interests in Medicenter recuperative care hospitals in Fort
`Worth, TX and Phoenix, AZ
`
` Nw3§75
`
`

`
`EQUITY JOINT VENTURE RECOMMENDATION
`THE HOHOKAM I ELWOOD OFFICE BUILDING
`PHOENIX, ARIZONA
`
`Nationwide Realty investors, Ltd., recommends an investment in the following equity joint venture:
`
`__(;'_C_)_l\’IPA1'~lY: Nationwide Realty investors, Ltd.
`
`AMOUNT:
`
`Equity: $2,700,000
`Debi:
`ss,:t0o,000
`Total:
`$9,000,000
`
`PROJECT: An approximate 5.79—acre tract of land to be improved with a ll‘lrEB—5lCll‘_y, 71,150 square foot office
`building. Construction is scheduled to begin in July I999, with an anticipated completion date of February 2000.
`The improvements will consist of a steel frame construction with a red brick and tinted glass exterior. The current
`development budget is $9,000,000 ($126.49 per square foot) and includes land cost of'$2,0l 4,000 ($348,000 per
`acre), office shell and tenant improvement hard costs of $5,621 ,000 ($79.00 per square foot), and miscellaneous sofi
`costs of $1,365,000. The building is currently pre-leased to The Apollo Group,
`100- (“Apollo”) for a 10-year term ona Base
`rent for lease years 6 through it) will be increased in conjunction with the CPI, currently estimated at-
`square foot. Apollo, through its four wholly owned subsidiaries including the University of Phoenix, is one of the
`largest providers of higher education programs for xvorking adults in the United States. Presently, Apollo has
`approximately l00,000 students enrolled in programs at l 17 campuses and learning centers in 34 states; Puerto Rico;
`Vancouver, British Colurnbia; and London, England. in fiscal year 1998, Apollo's net revenues were $391.1 million
`with a net income of $46.3 million as compared to I99?‘ results of $233.5 million in revenue and $33.4 million in
`net income. Apollo currently has $305 million in total assets. The leased space will be occupied by the University
`of Phoenix and used for both classroom facilities and administrative offices. The remaining 2.l50 square feet is
`located on the first floor of the bttilding with direct access from the main lobby and is intended for occupancy by
`a food service operator to provide food service for the building. This building is basically the final phase of a three-
`phase project where Apollo currently occupies lS2,000 square feet, or 75 percent oi" the project. primarily for its
`corporate headquarters. A total oi'355 parking spaces will be provided (5.0 spaces per 1.000 square feet ofrentable
`space).
`
`LOCATION: The subject site is located at the northwest quadrant of the i-lohokam E.xpt'esswa_v and Interstate it)
`on the south side of‘ Elwood Street, Phoenix. Maricopa County. Arizona. approximately one and one—half miles
`south of Sky Harbor international Airport. four miles southeast of Downtown Phoenix. and two miles west of
`Downtown Tempe. The Hoholtam Expressway is a limited-access roadway extending north from interstate 10. just
`east of the airport.
`lmmetllzttel}-‘ south or‘ the subject. the i-loho!-:am Expressway intersects with interstate ll).
`Interstate i0 is a limited-access roadway connecting the area to all of metropolitan Phoenix. including direct access
`routes to Flagstaff (via interstate I7) to the north. Tucson to the south. and Los Angclcs to the west. Elwood Street
`is a service road that links the many attractive business parks along the Interstate 10 corridor. The subject is situated
`in an established n1ixed—ust-. area of the City with excellent visibility from both the Hohokam Expressway and
`Interstate 10. Within a tht-ee—mile radius oi‘ the site there are approximately 70,000 residents with an average
`household income of approximately !lt':l'?.l00. As of year-end i998. the subject's oflice submarltet consisted of 63
`office buildings totaling 3.45 tnillion net rentable square feet with an average vacancy rate oi'S.2 percent.
`
`OWNERSHIP: Hohokam NW—E.W, LLC. a to-be-fortned limited liability company ("Company") whose members
`will be Nationwide Realty Investors. Ltd. ("NRl“) and Elwootlll-loholttun. LLC ("Elwootl“). each with an initial 50
`
`DEPOSITION
`
`IT
` “HIGHLY E:oi~t1=1DeN‘T1AL'/TRADE SECRET
`
`NW662l
`
`

`
`Equity Joint Venture Recommendation
`Hohokam NW-EW, LLC
`Page 2
`
`percent ownership interest through the second anniversary date of the Company's operating agreement. Afler the
`second anniversar date, NR1’s ercentage interest will increase, and Elwood‘s percentage interest will decrease,
`Elwood is comprised
`of Stephen R. Todd and Robert M. ll/lcNichols, as individuals. Mr. Todd has in excess of 15 years of experience
`in developing commercial real estate in the Phoenix Metropolitan Area. He has been directly involved in over $240
`million of commercial real estate development, including the first two towers at The Camelbacl-:_Esplarlade and the
`Ritz—Carlton Hotel at The Carnelback Esplanade. Mr. Todd has also been instrumental in setting up and overseeing
`highly successful financial consulting, leasing and management activities through his company, COREf.lackson,
`Inc. and construction! construction management services through his company, TICORE Construction. Mr.
`McNichols is the former head ofreal estate and leasing for The Apollo Group, Inc. and the University ofPhoenix.
`
`The total development cost for the property is projected to be $9,000,000 with both the shell hard cost and tenant
`improvement cost being based on a gtltuanleed rnaximum price not to exceed $3,912,242 ($54.98 per square foot)
`and $l,494.l50 ($2! per square foot), respectively. The Company will first acquire the land on April i3, [999 at
`a price ot'S2,014,000. The acquisition cost ofthe land will be funded as a part ofa $6,300,000 construction loan
`from NR1. Once final permits are received and construction has commenced, the remaining development costs will
`be funded first with an equity contribution from NR1/I-IOH in the amount of $2,700,000 and second, with the
`construction loan from NR1 in an amount up to $6,300,000. The term of the construction loan will be two years with
`an interest rate oi_and monthly payments based on interest only. in addition, NR1 will receive a
`construction-financing fee ol_The Company will retain one—halfof Elwood’s development fee,or-
`to cover any development cost overruns beyond the project’s total $728,000 contingency reserve. Any cost savinrrs
`on the project will be used to reduce the construction loan amount. NR1 will receiveat:
`preferred return on its equity investment.
`
`The lease with Apollo requires a construction completion date by May 31, 2000. The current construction schedule
`estimates the buildings completion date at January 26, 2000. This date is predicated on receivingthe final building
`permits and cornntencing, construction on or before July 8, 1999. As an incentive to stay on schedule, our partners,
`Messrs. Todd and Mchlichols, have agreed to guarantee all costs paid in excess of the $2,014,000 land cost between
`the time the land is acquired and final permits are issued and construction has begun. These guaranteed costs are
`estimated at $662,000 and include, but are not limited to, architect fees. permit fees, legal fees, and the purchase
`of long lead construction items such as steel. Once the construction has begun, the general contractor {SundtCorp)
`and the tenant improvement contractor (TlCOR.E) have agreed to guarantee the construction schedule by each
`paying a penalty equal to $1,000 per dayafier April 1. 2000. If for any reason construction has not commenced by
`September I. i999. the Company will no longer be obligated to build the building.
`
`
`___m..___EC0N0M1CANA}-'Y.S.1§5
`Expected NR1 internal Rate ofReturn ( 18 months):
`
`Unleveraged
`With $6.3 M Nlongage
`N/A I
`
`ESTIMATED FUNDING DATE: April E999
`
`APPRAISAL;—by Jeffrey C. Covill. Managitig Director; Keystone Mortgage Partners. LLC; Phoenix.
`Arizona, as ofMai-ch 10. 1998.
`
`HIGHLY CONFIDENTIAL/TRADE SECRET
`
`NW6622
`
`

`
`Equity Joint Venture Recommendation
`Hohokam NW-EW, LLC
`Page 3
`
`Nationwide Realty Investors, Ltd., March 26, 1999 by
`
`
`
`rJ. Thu pson
`Chtistop
`Sr. Anal st — Real Estate Equities
`
`A
`Brian .
`President and Chief Operating Officer
`
`This investment was approved by the Executive Vice President and Chief‘ Investment Officer of Nationwide
`Insurance Enterprise and Vice Chairman of Nationwide Realty Ilgtuost rs,
`td., on élfxbjgq
`.
`
`
`5::
`
`
`
`Exec. Vice Pr
`rdenU'Chief Investment Offic
`
`Nationw'de
`surance Enterprise
`Vice C11 '
`an
`
`
`
`Ratified by the Board of Managers of Nationwide Reaity Investors, Ltd., at its meeting on
`
`("§;;'_;'§0».°\
`
`.
`
`Nationwide Realty Investors, Ltd.
`
`HiGHLY (iONFIDENTIALi'TRADE SECRET
`
`NW6623
`
`

`
`EQUITY JOINT VENTURE RECOMMENDATION
`POLARIS OFFICE PARK LAND
`
`WESTERVILLE, OHIO
`
`Nationwide Realty investors, Ltc1., recommends an investment in the following equityjolnt venture:
`
`COMPANY: Nationwide Realty investors, Ltd.
`
`AMOUNT:
`
`Up to $4,000,000
`
`PROJECT: An approximate 49—acre tract of unimproved land. The conceptual site plan, which has been approved
`by the City of Westerville, features an attractive heavily wooded ravine that divides the approximately 330,000
`square feet of flex office and office development that will be situated in seven one— and two-story offree buildings.
`These buildings will be comprised of approximately ¢0,000 square feet to 50,000 square feet, each. The plan is
`to develop an ollice park similar to Etrooksedge Corporate Center located in Westervilte and Perimeter Office Park
`located in Dublin. The office buildings will consist.primarily of brick and glass, and will provide users with 6 to
`7 parking spaces per 1,000 square feet of building area. Road improvements and infrastructure will be completed
`in phases as each office site is developed over the next Few years. The total acquisition cost of the subject property
`is $6, i 58,250, which includes $4,620,000 ($94,300 per acre) for the land. $272,500 to complete the initial
`infrastructure including water and sewer lines and an access bridge from Worthington-Galena Road, and
`$1,265,750 for miscellaneous sofl costs.
`
`The first building to be developed on this site is a 45,000 square foot one—story office building situated on 4.75
`acres. Construction is scheduled to begin in June i999 with an anticipated completion date of January 2000. The
`current development budget is $4,415,000 [$98.] 1 per square foot) and includes at land allocation of $848,000.
`hard costs cf$2,S28,000 ($62.84 per square foot), and miscellaneous sofi costs of'$739,000. The building witl
`feature steel frame construction with exterior entrances to the individual tenant spaces. Part-ting will be provided
`for approximately 2'70 vehicles (6 spaces per 1,000 square feet of rentable space)._ Continental is currently
`marketing the space and has a number of prospects ranging in size from 2,500 square feet to 45,000 square feet.
`
`LOCATION: The subject site is located on the southeast corner of Wort|tington—Galena Road and i-lanawalt Road
`just east of Interstate 71, Westerviile, Delaware County, Ohio. approximately 20 miles nonh of the Columbus
`Central Business District. Worthington-Galena Road (Orion Place) intersects with Polaris Parkway approximately
`one—haif mile north of the subject site. Approximately one-hall‘ mile west of Wortltini_.r,ton—Gaiena Road. Foiaris
`Parkway intersects with Interstate 71 with a full intcrcltange. Polaris Parltway is the major east-west artery sen-in=_.v
`the northern Columbus suburbs and the L000-acre Polaris Centers ofcoinrnerce. Hanawalt Road runs east—west
`
`and connects Worthington Galena-Road and Cleveland Avenue. Access to the site will he further enhanced upon
`the completion of the Maxtown Road and Cleveland Avenue extension projects. both are scheduled to be
`completed by November I999. The Maxtown Road extension consists of a two-mile stretch of highway connecting
`Old 3C Highwa;t' (SR 3) and Polaris Parktvayjust east of the ‘w'orthingtcn—Cialena Road and Polaris Parl-:w2t_\
`intersection. Cleveland Avenue is a predominate nortlt—south artery that will be extended north and connect with
`the Maxtown Road extensionjust northeast of the site. The Westerville area is a middle- to uppenmitldle class
`community with home prices ranging from $75,000 to in excess ot‘S500.000. Within a three-mile radius ofthe
`site there are approximately 42,500 residents withan average household income of approximately $65300. The
`
`HIGHLY CONFIDENTIAL/TRADE SECRET
`
`NW6624
`
`

`
`Equity Joint Venture Recommendation
`Polaris Partners. LLC
`Page 2
`
`area surrounding the subject site contains a mixture ofsingle-family residential, entertainment, and commercial
`uses. The office submarket for the subjectarea is one of the most active markets in the Columbus metropolitan
`area with nearly 1.9 million square feet being built and absorbed over the last '2 years. The occupancy rate for
`comparable properties in this submaricet, excluding owner occupied and build—to-suite projects, is 93 percent.
`
`OWNERSHIP: ContinentalfNRl Ofiice Ventures, Lt<l., an Ohio limited liability company (“Company"} whose
`mcm bars are Nationwide Realty Investors, Ltd. (NR1), with a 50 percent ownership interest, and Empire Ventures,
`Ltd. (“Empire"), with a 50 percent ownership interest. Empire is comprised of Franklin E. Kass and Jack E. Lucks,
`.lr., each with a 50 percent ownership interest. Messrs. Kass and Lucks are the principals of Continental Real
`Estate Companies and partners in the highly successful Brookscdgc Corporate Center project. The Company will
`purchase an approximate one—acre tract of the subject property in April 1999 for $270,000 and purchase the
`remaining acreage in mid—May I999. The total acquisition cost, including initial infrastructttrc improvements, is
`projected to be $6,158,250. The acquisition costs will be funded first, with a mortgage loan not to exceed
`$3,500,000, and second with an equity contribution not to exceed $3,000,000 front NR1.
`in any event, the total
`capitalization cl‘ the mortgage loan and equity contribution will not exceed the total cost of $6,158,250.
`Negotiations with KeyBanl< are being finalized for’a onc—year mortgage loan at an interest rate not to exceed the
`London Interbank Offered Rare (Libor) + 2.15 percent.
`
`A to-be-formed limited liability company (“Polaris A"), whose sole member will be the Company, will purchase
`a 4.75-acre tract of land from the Company in June 1999, and develop a 45,000 square foot office building. Total
`construction costs for the property are projected to be $4,415,000. The construction costs will be funded first with
`a construction. loan not to exceed $3,800,000, and second with an equity contribution of‘ up to $1,000,000 from
`NR1. In any event, the total capitalization of the construction loan and equity contribution will not exceed the total
`cost of $4,4 15,000. Negotiations with KeyBank are being finalized fora two-year conslructiot‘t loan at an interest
`rate not to exceed the London interbank Offered Rate (Libor) -t 2.15 percent. Upon completion of each building,
`permanent financing will be obtained. The proceeds of the rnort a e loan will be used to return a portion of NRl‘s
`equity investment. in addition to NR1 receiving a :referred return on its equity investment,
`a development fee equal to_will also be received for each project developed.‘
`
`ECONOMIC ANALYSIS:
`Parcel A:
`
`Expected Project Stabilized Yield:
`
`Expected NR1 Stabilized Equity Yield:
`
`Expected NR1 internal Rate of Return:
`
`Unleveraged
`
`With $3.8 M Mortgage
`
`
`
`ESTIMATED FUNDING
`
`April 1999 t$270.00I}) and t\rla_\' 1909
`
`APPRAISAL—(t=arcet A bttilding only) by Christopher N. iohnson, Vice President; w. Lyman Cast!
`& Company. Columbus. Ohio. as ot'April 5. 1990.
`
`HIGHLY CONFIDENTIALITRADE SECRET
`
`NW6625
`
`

`
`Equity Joint Venture Recommendation
`Polaris Partners, LLC
`Page 3
`
`Nationwide Realty Investors, Lld., April 7, 1999 by
`
`
`
`er J. Tl ompson
`iristo
`Sr. Rea Estate Equity Analyst
`
`Brian J. Ellis
`President and Chief Operating Officer
`
`This investment was approved by the Executive Vice President and Chief Investment Officer of Nationwide
`Insurance Enterprise and Vice Chairman of‘Nationwicle Realty Investors, Ltd., on ‘J/I5i‘5i‘i
`.
`
`
`Exec. Vice Pt-esi ent/ChiefInvestmentOffi
`Naiioiixvidpeglnsurance Enterprise
`22
`
`Vice Chan
`
`an
`
`Ratified by the Board of Managers of Nationwide Realty investors, Ltd., at its meeting on ~‘E5§,g¢~‘-.01
`
`.
`
`Nationwide Realty Investors, Ltd.
`
`HIGHLY CONFIDENTIAL/TRADE SECRET
`
`NW6626
`
`

`
`EQUITY JOINT VENTURE RECOMMENDATION
`
`PINNACLE AT STONE CREEK APARTMENTS
`PHOENIX, ARIZONA
`
`Nationwide Realty investors, Ltd., recommends an investment in the following equityjoint venture;
`
`COMPANY:
`
`Nationwide Realty Investors, Ltd. (NR!)
`
`AMOUNT:
`
`up to $7,000,000
`
`PROJECT: Approximately 8.57 acres of land to be improved with a 226-unit luxury apartment community that
`will consist of sixteen (16) three-story buildings, a clubhouse, nnd an exercise facility. There will be 9i one-
`bedroom, one-bath units averaging 813 square feet ofspace; 127 two—bedroom, two-bath units averaging 1,221
`square feet of space; and 8 three-bedroom, three-bath units averaging 1,353 square feet ofspace. The buildings
`will be Southwestern design featuring stucco finished exteriors and concrete tile roofs. All units will be
`townhouse-style with direct access garages on the first level. Unit interior features include nine-foot ceilings,
`ceramic tile entry, and large private patiosfbalconies with storage rooms, as well as, a fully equipped kitchen,
`full~size washer and dryer, security systems, walk-in closets, and window blinds. Project amenities will include
`a heated swimming pool with spa, decking and barbecue areas, a clubhouse with meeting space, a fully equipped
`fitness center, and gated entrances. Parking for approximately 372 vehicles (L65 spaces per unit) will be
`provided, including 361 attached direct access garage spaces, and ii surface spaces.
`
`LOCATION: The subject site is located on the southwest corner of Tatum Boulevard and Paradise Village
`Parkway South in Phoenix, Arizona, approximately 10 miles north of the Phoenix Sky Harbor Airport and 3
`miles west of North Scottsdale. Tatum Boulevard is a major north-south arterial street extending north to Cave
`Creek Road and south to Camelback Mountain. Paradise Village Parkway is not a major traffic arterial;
`however, at this location it is a major street developed to provide convenient access to the Paradise Valley Mall.
`Cactus Road is located Ma mile north of the project and is a major east-west street providing direct access to a
`full diamond interchange on the recently extended Squaw Peak freeway (US 51) approximately 1.5 miles west
`of project. The subject site is an in-fill location adjacent to the Stone Creek Golf Course and will he a part of
`a 23-acre master-planned ofticefhotel/residential development that will contain 337,000 square feet of Class “A”
`office space, a 300-room Embassy Suites Hotel and an 8,000 square foot LA Fitness Center.
`In addition, the
`site is within waliting distance of the recently renovated 1.3 million square foot Paradise Valley Mall that is
`anchored by five department stores including Macy’s, Dillard’s, and Robinson-May. The neighborhoods
`surrounding the subject site are predominantly middle to upper middle-class with home prices ranging from
`$130,000 to in excess of $500,000. Within a three-—mile radius of the subject site there are approximately
`102,000 residents with an average household income of approximately $69,000. The apartment submarket for
`the subject site is one of the strongest in the Phoenix area with occupancy for comparable properties of
`approximately 95 percent.
`
`OWNERSHIP: A to-be-formed limited liability company (the “Company”) which will consist of NR! as
`managing member with a 60 percent membership interest and a to— be—formed single asset entity wholly owned
`by BRE Properties, inc. (“BRE'."} with a 40 percent membership interest. The Company will purchase the
`property upon full lien-free completion from a BRE entity at a price equal to the lesser of the seller’s cost or
`$22,685,000, subject to a minimum escrow amount of $650,000. NR1 will fund the Company with a capital
`contribution of up to $7,000,000 {approximately 31 percent of the development cost]. The remaining acquisition
`cost of approximately $16,000,000 will be furnished via a mortgage loan from a third party lender.
`in any event,
`
`HIGHLY CONFIDENTIAL/TRADE SECRET
`
`NW6606
`
`

`
`Equity Joint Venture Recommendation
`Pinnacle at Stone Creek
`
`Page 2
`
`the total capitalization will not exceed the total construction cost of$22,63S,000. BRE is in negotiations with
`California Bank &: Trust (CBT) for a full construction loan. The loan will be a two-year term, interest only, with
`a variable interest rate (max: 150 basis points over LIBOR or Prime plus 25 basis points). A one~year extension
`option is available for a maximum of 70 percent of the original loan amount on a 30-year amortization schedule
`at an interest rate of 200 basis points over LIBOR. Operating cash flows of‘ the subject, alter annual debt service,
`will be distributed first to the NR1 so as to provide a _cnn1ulative preferred return on its initial cash
`investment and second, prorata to NR1 and BRE according to their membership interests. BRE will also provide
`=1 guaranteee<tua1t0
`return on NRI’s investment and income in place. The escrow account and a letter of credit will coilateralize this
`guarantee, if necessary,
`
`BRE has been in business for nearly 30 years and is one of the nation’s largest multifamily real estate investment
`trusts (REIT) with approximately $2 billion in assets. They are one of the preeminent owners, developers, and
`operators of luxury apartment communities in the western United States representing more than I00 owned and
`fee managed projects totaling in excess of 30,000 units. in 1997 BRE acquired the Trammeil Crow Residential
`(TCR) Western Regional operation which consisted of 7,500 apartment units including two projects totaling 614
`units that NR1 bad ownership interest in at the time. _ Pinnacle at Union Hills and Pinnacle at Towne Center was
`sold as a part of this transactionf The TCR
`principals responsible for the Union Hills and Towne Center projects are also responsible for the Stone Creek
`project.
`'
`
`ECONOMIC ANALYSIS:
`
`Unleveraged
`
`With 315.9 M Mortgage
`
`Expected NRI Stab ilized Equity Yield:
`
` Expected Overall Stabilized Equity Yield:
`
`Expected NR1 Internal Rate of Return:
`
`ESTIMATED FUNDING DATE: September 2001
`
`APPRAISAL: _by Michael Haggerty, MAI and Jeffrey C. Covill, Managing Director, Keystone
`Mortgage Partners; Phoenix, Arizona, as of January 6, 2000.
`
`HIGHLY CONFIDENTIAL/TRADE SECRET
`
`NW6607
`
`

`
`Equity Joint Venture Recommendation
`Pinnacle at Stone Creek
`Page 3
`
`Nationwide Realty Investors, Ltd., February 25, 2000, by
`
`
`
`Brian J. Eliis
`
`.
`
`Sr. A alyst-Real Estate Equities
`
`President and Chief Operating Officer
`
`This investment was approved by the Executive Vice President and Chief Investment Officer of Nationwide
`and Vice Chairman of Nationwide Realty Investors, Ltd., on Na Egg
`.
`
`Nationwide
`
`Vice Chairman
`
`
`Nationwide Realty investors, Ltd.
`
`Ratificd by the Board of Managers of Nationwide Realty Investors, Ltd., at its meeting on
`
`jaznloo .
`
`HIGHLY CONFIDENTIAL/TRADE SECRET
`
`NW6608
`
`

`
`‘
`‘
`
`PINNACLE @ STONE CREEK
`Paradise Vlllcy. AZ
`DCF Vaiuailon
`D2-Mar-DH
`
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`
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`
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`525.250
`5195
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`sum I,Jsa,!aa
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`1.910
`515
`1.100
`as
`24,410
`51:
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`
`542,041
`4ao.I.55
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`315,424
`14,401
`71,115
`20.165
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`
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`«H.592
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`76,619
`79,440
`21.33:
`3.402
`7,63:
`15.971
`my);
`
`'
`
`535,059
`509,419
`1,195,900
`559.092
`13,930
`H.523
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`
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`
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`
`1,200,322
`
`1,551,131
`
`3,453,570
`
`3,552,542
`
`1,549,521
`
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`
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`
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`
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`
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`
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`3.51 Lu)
`
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`
`m1,3l:1
`
`('M9.xIa3|
`
`(302,391) mu.a-n
`
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`
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`
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`
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`
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`
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`
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`
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`
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`
`1.297.314
`
`1.111.001
`
`2,44s,uu
`
`2.525.014
`
`2.505.101
`
`630.550
`
`6lfl.5$0
`
`6150.550
`
`500,150
`
`H0550
`
`I,393.!:l
`
`l,J91l.ll|
`
`l.J9!,1|I
`
`|.39l».1[l
`
`l.393.£13
`
`Cash Flaw (Neg CF raem Ru».-m)
`
`1J'J,D-I-I
`
`zlua-5
`
`1-12,21:
`
`35:, I ll
`
`446,251
`
`R033-lnal 5:1-=1 Vain: (NRl's shut as uh:ul:n:cd kkm)
`
`0,520,550
`
`" He nu " H
`
`
`R:.n:.bsurS:.u':a VAL-u (‘uh-ulczlnn
`
`Saks Pmcr.-ad: [ax nun)
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`Equilg
`vim Uni; lam:
`Tau! Rn.-u:Evn| U‘:!u||:
`
`26,501,157
`
`5 :05 um
`11.107150
`
`NR1
`
`DRE
`
`S1,: zI,0Sn
`55 an: gm
`$1623.55!)
`
`s1,nn,1m
`gg
`51,5!-0.‘.|L|u
`
`HIGHLY CONFIDENTIAL/TRADE SECRET
`
`NW6609
`
`

`
`Pinnacle @ Stone Creek
`Paradise Valley, A2
`
`I
`
`INCOME
`
`Rental
`
`1 BR! 1 BA
`1 BR! 1 BA
`2 BR I 2 BA
`2 BR I 2 BA
`3 BR I 3 BA
`3 BR I 3 BA
`
`Fireplaces
`Pool Views
`Courtyard Views
`Golf Course Views
`Other
`
`MONTH LY MONTH LY
`RENTIUNIT RENTISF
`
`ANNUAL
`RENT
`
`SIZE
`796
`829
`1.221
`1.221
`1.353
`1.353
`
`UNITS
`
`49
`42
`92
`35
`
`§53.’B‘S»'¢.a
`
`GROSS INCOME
`Total SF
`
`(Vacancy)
`
`5. 00%
`
`EFFECTIVE GROSS INCOME
`
`226
`
`1,061
`
`239,713
`
`
`BRE EQUITY YIELD
`
`EXPENSES
`RE Taxes
`Insurance
`Utilities
`
`(
`
`Maint. & Repair
`Advertising 8. Leasing
`Payroil & Administration
`Management
`Replacement Reserve
`Total! Expenses
`% of EGI
`NET OPERATING INCOME
`
`NOI
`CAP RATE
`
`VALUE
`VALUEIUNIT
`VALUEJSF
`
`COST
`COSTIUNIT
`COSTISF
`
`CASH FLOW
`
`NRI PREP
`NRI SPLIT
`NRI FREF
`NRI CF
`
`BRE PREF
`BRE SPLIT
`BRE PREF
`BRE CF
`
`LTV
`LOAN AMOUNT
`AMORTIZATION
`INTEREST RATE
`ADS
`DSC
`
`COST
`DEBT
`TOTAL EQUITY
`NR1 EQUITY (100%)
`BRE EQUITY
`
`OVERALL YIELD
`
`EQUITY YIELD
`
`NR! EQUITY YIELD
`
`HIGHLY CONFIDENTIAL/TRADE SECRET
`
`NW6610
`
`

`
`Aw
`
`ANNUAL
`
`RENT
`
`,
`
`SIZE
`
`MONTHLY MONTHLY
`RENTIUNIT RENTISF
`
`796
`829
`1.221
`1,221
`1.353
`1,353
`
`49
`42
`92
`35
`
`4 4
`
`56
`22
`24
`21
`
`226
`
`11
`
`1.051
`239.713
`
`
`
`
`
`LTV
`
`LOAN AMOUNT
`AMORTIZATION
`INTEREST RATE
`ADS
`DSC
`
`COST
`DEBT
`TOTAL EQUITY
`NRI EQUITY (100%)
`BRE EQUITY
`
`OVERALL YIELD
`
`EQUITY YIELD
`
`NRI EQUITY YIELD
`
`BRE EQUITY YIELD
`
`HIGHLY CONFIDENTIAL/TRADE SECRET
`
`NW66l 1
`
`Pinnacle @ Stone Creek
`Paradlse Valley, AZ
`
`(.
`
`INCOME
`
`Rental
`
`1 BRI1 BA
`1 BR! 1 BA
`2 ER I 2 BA
`2 BR I 2 BA
`3 BR /3 BA
`3 BR I 3 BA
`
`Fireplaces
`Pool Views
`Courtyard Vlews
`Golf Course Views
`Other
`
`GROSS INCOME
`Total SF
`
`(Vacancy)
`
`EFFECTIVE GROSS INCOME
`
`5.00“/n
`
`EXPENSES
`RE Taxes
`Insurance
`Utllities
`
`Ma