Subject: Fwd: ??: Re: ??: Re: ??: Re: ??: Rosemont Acquisitions Portfolio
From: "Devon Archer" <[email-masked]>
To: "Hunter Biden" <[email-masked]>, "Eric D. Schwerin" <[email-masked]>
Date: Tue, 19 Jul 2011 00:29:06 -0400

Some banter with CIC below but reminds me we need to discuss a real simple message to Gao.  Timing is right...meaning they're trying to blow me off but I just won't stop.

Devon Archer
+646 436 3745

Please excuse typos as this message was sent from my handheld device.

Begin forwarded message:

From: Devon Archer <[email-masked]<mailto:[email-masked]>>
Date: July 19, 2011 12:24:08 AM EDT
To: "[email-masked]<mailto:[email-masked]>" <[email-masked]<mailto:[email-masked]>>
Subject: Re: 答复:    Re: 答复:    Re: 答复:  Re: 答复:  Rosemont Acquisitions Portfolio

ZW,
I'm going to take that one on in detail in the morning as I'm hitting the sack right now.   But basically our approach has been to remain extremely discipline over the last 20 years (recording a 21% IRR over that period) and buy stabilized assets, often from unstable (distressed) sellers, at prices that are well below replacement value.    I agree a double dip risk would hurt a buyer in secondary markets that was out there buying vacancy or distressed properties.  They will see tremendous upside if things continue to recover but  its not our strategy.  We're programatic in finding the best deals, getting comfortable with the local economy, macros, tenant and the rolls.  With those factored we see the downsides in a double dip scenario as longer holds.  The last thing folks are going to do in a double dip is build in these markets and businesses need offices.  So if the world goes sideways we throw off excellent yields for a longer term and eventually sell into a recovery.  If things stabilize and we see a sustained recovery over the next 2-5 years, the reits rush in, the cap rates compress and we 20-30%+ IRRa over the period on real assets.

Devon Archer
+646 436 3745

Please excuse typos as this message was sent from my handheld device.

On Jul 18, 2011, at 11:27 PM, "<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>" <<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>> wrote:

Devon

Think another point you might help with elaboration at this point is the risk issue. I hear you about the investment thesis around secondary market office but what would be the down side case? Primary market office rebounded quite swiftly mainly due to flight to quality mode of investors post the crisis on the back of rationale that primary market are more resilient and generating relatively more stable recurring income. As for the case with secondary market, people would be concerned about double dip, maybe not in the same manner of last crisis but people do have concerns about stagnation etc. which would put pressure on the foundamentals of commercial real estate especially secondary markets. People would challenge also though the spread between primary and secondary is standing at historical high level but not necessarily indicate it has gone far enough yet if the situation continues deterioration.

Tks.

Zhiwei

******************************************
Cai Zhiwei(才智伟)
Director
Real Estate Investment
Private Market Department
China Investment Corporation
Tel: +86-10-84096752
Floor 6, New Poly Plaza, Beijing, 100010
******************************************

发件人:    Devon Archer <<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>>
收件人:    "<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>" <<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>>
日期:     2011-07-19 02:27
主题:       Re: 答复:    Re: 答复:  Re: 答复:  Rosemont Acquisitions Portfolio

________________________________

ZW,
I thought I would pass this announcement along from DB’s REIT Newsletter this week—And not to suggest following others, but;

On Thursday morning, UK pension fund manager Hermes announced its entry into the US commercial real estate markets via a JV with Singapore-based UOB Global Capital and US based Hampshire Real Estate.  Hermes is a fairly sizable property investor with roughly GBP5.8b of real estate assets. What's interesting here is that, not only is Hermes making its first investments in the US, but that it is specifically targeting "properties typically located outside of the major city central business districts (CBD) in the United States, with primary focus on the Eastern US." We've been waiting for non-core assets to catch a bid and this is one of the first examples we've seen of foreign money looking outside of the CBDs. It's not a huge fund (total buying power is expected to be half a billion) but an interesting data point nonetheless. It looks like the fund will invest in a diversified portfolio but Thursday's news could potentially be seen as a modest positive for East Coast suburban office players such as CLI (Buy), LRY (Buy), and BDN (not rated).

As you know our team is available to help provide any needed information so you can get a better understanding of the different locations we target in preparation for any investment committee you may bring the strategy to.
Best,
D -

From: Zhi-Wei Cai <[email-masked]<mailto:[email-masked]>>
Date: Thu, 14 Jul 2011 11:20:22 -0400
To: Devon Archer <[email-masked]<mailto:[email-masked]>>
Cc: Caryn Suffredini <[email-masked]<mailto:[email-masked]>>, Daniel Burrell <[email-masked]<mailto:[email-masked]>>
Subject: Re: Re: 答复: Re: 答复: Re: 答复: Rosemont Acquisitions Portfolio

Devon

Got you. Tks. Would touch base with you again if there is anything further needs to be clarified.

ZW

________________________________

  From: Devon Archer [[email-masked]<mailto:[email-masked]>]
 Sent: 2011-07-14 08:09 AST
 To: 才智伟
 Cc: Caryn Suffredini <[email-masked]<mailto:[email-masked]>>; Daniel Burrell <[email-masked]<mailto:[email-masked]>>
 Subject:  Re: 答复:    Re: 答复:  Re: 答复:  Rosemont Acquisitions Portfolio

Zhiwei,
Walton is good example of a fund manager that will look at secondary markets.  In fact we have a good relationship there and they have, and continue to approach us for deal-flow.  They are not as focused nor have the specific expertise, experience or track record in an office specific strategy however.

Gem Realty is another player in Walton and our league that will look at Secondary markets but with more pronounced 'value add' / risk appetite.  Because of our large local footprint and market understanding they approach us for deal-flow as well.

There are other fund or fund-of-fund backed JV's, localized players and one off's pursuing a similar strategy but no one has the office only institutional approach at a national level in our opinion.  Not to mention the track record in execution through multiple cycles.

So in short, the strategy is validated with a number of other investors pursuing the opportunity but we think we're the best positioned and organized to execute the strategy with scale.

Best,
D -

Devon Archer
+646 436 3745

Please excuse typos as this message was sent from my handheld device.

On Jul 14, 2011, at 2:21 AM, "[email-masked]<mailto:[email-masked]>" <[email-masked]<mailto:[email-masked]>> wrote:

Devon

For the moment, I think the info you uploaded is sufficient enough. I am reading through them. A quick one from me now is that apart from yourself, any other names you can think about doing similar strategies in US? Guess Walton Street would be one from the league table. They had referred some secondary market office opportunities to us before.

Tks.

Zhiwei

******************************************
Cai Zhiwei(才智伟)
Director
Real Estate Investment
Private Market Department
China Investment Corporation
Tel: +86-10-84096752
Floor 6, New Poly Plaza, Beijing, 100010
******************************************

发件人:    Devon Archer <[email-masked]<mailto:[email-masked]>>
收件人:    "[email-masked]<mailto:[email-masked]>" <[email-masked]<mailto:[email-masked]>>
抄送:     Caryn Suffredini <[email-masked]<mailto:[email-masked]>>, Daniel Burrell <[email-masked]<mailto:[email-masked]>>
日期:     2011-07-14 12:42
主题:       Re: 答复:  Re: 答复:  Rosemont Acquisitions Portfolio

________________________________

Zhiwei,
Thank you again for your feedback.  The open dialogue is very important to us and we covet the relationship with you and CIC.  Please advise, on a realtime basis, what general information we can be providing and any specific items we can add to the Rosemont diligence website, to assist you in your continued research of our market.  The more we can do to enable your expertise across our markets the clearer and more compelling the opportunities we're presenting to your will be.

As a quick follow-up, on the small piece of the current pipeline we shared with you—do you consider Chicago and Dallas as unfamiliar, and thereby off limits to date?  We shared those properties specifically because of the name recognition of the citiesand to quell any future market liquidity concerns.

I suggest we schedule a quick call in the coming weeks to answer very directly any US secondary market questions you may have to complement your analysis.

All the Best,
Devon

From: Zhi-Wei Cai <[email-masked]<mailto:[email-masked]>>
Date: Mon, 11 Jul 2011 23:38:37 -0400
To: Devon Archer <[email-masked]<mailto:[email-masked]>>
Cc: Caryn Suffredini <[email-masked]<mailto:[email-masked]>>, Daniel Burrell <[email-masked]<mailto:[email-masked]>>
Subject: 答复: Re: 答复: Rosemont Acquisitions Portfolio

Devon

Tks for the follow up note.

Actually, I have to say I did spent some time on reading your investment memos on the 3 office properties attached with your last mail and that led to my conclusion that the portfolio doesn't fit our current US office investment strategy quite well. Currently, we stay focused on the primary markets.

As for this time's 3 pipeline projects, I think the profiles are pretty much similar to the last 3 ones especially from the location stand point.

I really appreciate your efforts of putting things together for our benefits of understanding better the US secondary office markets, your strategy and etc. which I think are quite useful to us and would like to do more research and analysis about the strategy going forward. So pls. stay tuned and feel free to share with us the relevant know-how and opportunities you are seeing from the market.

Thank you again for all the efforts.

Best

Zhiwei

******************************************
Cai Zhiwei(才智伟)
Director
Real Estate Investment
Private Market Department
China Investment Corporation
Tel: +86-10-84096752
Floor 6, New Poly Plaza, Beijing, 100010
******************************************
发件人:    Devon Archer <[email-masked]<mailto:[email-masked]>>
收件人:    "[email-masked]<mailto:[email-masked]>" <[email-masked]<mailto:[email-masked]>>
抄送:     Caryn Suffredini <[email-masked]<mailto:[email-masked]>>, Dan Burrell <[email-masked]<mailto:[email-masked]>>
日期:     2011-07-11 21:26
主题:     Re: 答复:  Rosemont Acquisitions Portfolio

________________________________

Thank you kindly Zhiwei for the prompt feedback.

Could you take a quick minute to review the properties on the Rosemont extranet that we prepared for you which should give you a sense of pipeline; and let me know if those meet your strategy.  I would be interested in more commentary on propertiesthat better meet your strategy since our last meeting with Patrick in Beijing and our subsequent conference call.  I think browsing the background will illustrate more pipeline and should calm your equity sizing concern as well.

Below is the login information to the CIC-Rosemont website containing:

 *   Secondary & Tertiary Market Research;
 *   Rosemont’s Current Deal Pipeline;
 *   Rosemont’s Recent Transactions in the Market;
 *   Rosemont’s Investment Track Record and Best Practices Report;
 *   Marketing & Legal Documents for Rosemont’s RREAF Office Investment Program;
 *   Lessons from the U.S. Financial Crisis of 2007-2009 and a Case Study of an Underperforming Rosemont Transaction

Website: https://rosemontrealty.sharefile.com<https://rosemontrealty.sharefile.com/>/
Username: [email-masked]<mailto:[email-masked]>
Password: VS13CM1C (all in caps)
-----------------------------------------------------------------

All the Best,
Devon
www.rosemontrealty.com

From: Zhi-Wei Cai <[email-masked]<mailto:[email-masked]>>
Date: Thu, 7 Jul 2011 02:51:36 -0400
To: Devon Archer <[email-masked]<mailto:[email-masked]>>
Subject: 答复: Rosemont Acquisitions Portfolio

Devon

Tks for the referral. But I have to say the portfolio doesn't quite fit our strategy for US office investment at the moment.

Zhiwei

******************************************
Cai Zhiwei(才智伟)
Director
Real Estate Investment
Private Market Department
China Investment Corporation
Tel: +86-10-84096752
Floor 6, New Poly Plaza, Beijing, 100010
******************************************
发件人:    Devon Archer <[email-masked]<mailto:[email-masked]>>
收件人:    "[email-masked]<mailto:[email-masked]>" <[email-masked]<mailto:[email-masked]>>
抄送:     Daniel Burrell <[email-masked]<mailto:[email-masked]>>, Caryn Suffredini <[email-masked]<mailto:[email-masked]>>, James Bulger <[email-masked]<mailto:[email-masked]>>, Robin Smith <[email-masked]<mailto:[email-masked]>>
日期:     2011-07-06 22:28
主题:     Rosemont Acquisitions Portfolio

________________________________

Dear Zhi Wei:

Per your discussions with Caryn, we have prepared the following detailed investment memorandums for your consideration. The attached portfolio comprises 1.674 million square feet of multi-tenant office space, a $220 million acquisition price, and a $69.26 million total equity investment.  The weighted average capitalization rate of the portfolio is 8.85%, the weighted average price psf is $131, and the weighted average occupancy is 89.21%.  We would welcome CIC’s participation in Rosemont’s acquisition of these assetsand CIC’s involvement in our due diligence process.  Preliminarily, we would like to have a high level discussion with you to gauge whether these assets are of interest to CIC.

----------------------------------------

I also wanted to remind you that China Investment Corporation (“CIC”) has requested that Rosemont Realty, LLC (“Rosemont”) provide background research and resources to assist in the evaluation of Rosemont’s current investment strategy. The information and research that has been prepared is located on a secured online electronic file sharing system. Instructionsare provided below to access the system.

The materials contained within the shared file focus on a) Secondary & Tertiary Market Research; b) Rosemont’s Current Deal Pipeline; c) Rosemont’s Recent Transactions in the Market; d) Rosemont’s Investment Track Record and Best Practices Report; e) Marketing & Legal Documents for Rosemont’s RREAF Office Investment Program; f) Lessons from the U.S. Financial Crisis of 2007-2009 and a Case Study of an Underperforming Rosemont Transaction.

We look forward to your feedback on these documents and hope that theywill assist CIC in further understanding Rosemont’s investment strategy and unique position in the market.

There is a substantial amount of information provided so we suggest that you first read the executive summary in each section prior to reviewing the specific data.  If you should have any questions or comments as you review the material and prepare your internal analysis, please do not hesitate to contact us.

Below is the login information to this website:

Website: https://rosemontrealty.sharefile.com<https://rosemontrealty.sharefile.com/>/
Username: [email-masked]<mailto:[email-masked]>
Password: VS13CM1C (all in caps)
-------------------------------------------

Please let me know if we can schedule a conference call to further discuss this investment portfolio opportunity July 19th at 9am Beijing time.  Many thanks.

Sincerely,

Devon

Devon D. Archer

Executive Director

401 Greenwich St | New York,  NY 10013 // 330 Garfield St | Santa Fe,  NM 87501

212.933.9974 office | 646.436.3745 mobile |505.982.2515 fax

 [附件 "Summary Page.pdf" 被 才智伟/CIC 删除][附件 "The Summit at Las Colinas_Rosemont Potential Acquistion.pdf" 被 才智伟/CIC 删除][附件 "208 South LaSalle_Rosemont Potential Acquistion.pdf" 被 才智伟/CIC 删除][附件 "One & Two Warren Place_Rosemont Potential Acquistion.pdf" 被 才智伟/CIC 删除]

________________________________

本邮件内容包含保密信息。如阁下并非拟发送的收件人，请您不要阅读、保存、对外披露或复制本邮件的任何内容，或者打开本邮件的任何附件。请即回复邮件告知发件人，并立刻将该邮件及其附件从您的电脑系统中全部删除，不胜感激。

This email message may contain confidential and/or privileged information. If you are not the intended recipient, please do not read, save, forward, disclose or copy the contents of this email or open any file attached to this email. We will be grateful if you could advise the sender immediately by replying this email, and delete this email and any attachment or links to this email completely and immediately from your computer system.

________________________________

________________________________

本邮件内容包含保密信息。如阁下并非拟发送的收件人，请您不要阅读、保存、对外披露或复制本邮件的任何内容，或者打开本邮件的任何附件。请即回复邮件告知发件人，并立刻将该邮件及其附件从您的电脑系统中全部删除，不胜感激。

This email message may contain confidential and/or privileged information. If you are not the intended recipient, please do not read, save, forward, disclose or copy the contents of this email or open any file attached to this email. We will be grateful if you could advise the sender immediately by replying this email, and delete this email and any attachment or links to this email completely and immediately from your computer system.

________________________________

________________________________

本邮件内容包含保密信息。如阁下并非拟发送的收件人，请您不要阅读、保存、对外披露或复制本邮件的任何内容，或者打开本邮件的任何附件。请即回复邮件告知发件人，并立刻将该邮件及其附件从您的电脑系统中全部删除，不胜感激。

This email message may contain confidential and/or privileged information. If you are not the intended recipient, please do not read, save, forward, disclose or copy the contents of this email or open any file attached to this email. We will be grateful if you could advise the sender immediately by replying this email, and delete this email and any attachment or links to this email completely and immediately from your computer system.

________________________________

________________________________
    本邮件内容包含保密信息。如阁下并非拟发送的收件人，请您不要阅读、保存、对外披露或复制本邮件的任何内容，或者打开本邮件的任何附件。请即回复邮件告知发件人，并立刻将该邮件及其附件从您的电脑系统中全部删除，不胜感激。

       This email message may contain confidential and/or privileged information. If you are not the intended recipient, please do not read, save, forward, disclose or copy the contents of this email or open any file attached to this email. We will be grateful if you could advise the sender immediately by replying this email, and delete this email and any attachment or links to this email completely and immediately from your computer system.

________________________________

________________________________

本邮件内容包含保密信息。如阁下并非拟发送的收件人，请您不要阅读、保存、对外披露或复制本邮件的任何内容，或者打开本邮件的任何附件。请即回复邮件告知发件人，并立刻将该邮件及其附件从您的电脑系统中全部删除，不胜感激。

This email message may contain confidential and/or privileged information. If you are not the intended recipient, please do not read, save, forward, disclose or copy the contents of this email or open any file attached to this email. We will be grateful if you could advise the sender immediately by replying this email, and delete this email and any attachment or links to this email completely and immediately from your computer system.

________________________________