Compass Funding Group

Specialized Build-to-Suit Services for the Single-Tenant Concept

Services

Compass Funding Group provides tailored build-to-suit finance and development services to qualified franchisees and other tenants. Our Services begin with lease commencement and ends when the keys are handed over to the tenant. Compass Funding Group will handle all aspects of the development project, such as:

1. Site Selection and Demographic Criteria
2. Lease Negotiation
3. Acquisition and Purchase Negotiation
4. Due Diligence
5. Permitting
6. Construction Management
7. Building Inspection/Certificate of Occupancy
8. Open for Business (Grand Opening)

Benefits

The Compass Funding Group Build-to-Suit Solution enables our clients to:

1. Fund new construction, including the cost of the land acquisition, without tying up its capital or credit in land and buildings.
2. Expand their operations with minimal capital outlay for the property itself - generating immediate and significant ROI in the first year.
3. Increase their company's book value by removing certain items from the balance sheet - thereby enhance the company's ROA
4. Reduce their company's after-tax costs below alternative forms because the rent is fully deductible over the lease term.

In addition to financing the land acquisition, improvements to the land, and the cost to construct the building for the tenant, Compass Funding Group will also consider rolling the FF&E package, soft costs, and working capital into the build-to-suit package.

However, this type of "complete" financing solution is reserved for the tenant with ample operational experience and a proven track record, collateral and assets to fall back on, and a strong personal guarantee. This type of solution may also be employed for the tenant that has completed multiple transactions with Compass Funding Group, or one that has a corporate guarantee to back him.

Sample Term Sheet

The following terms are representative and may vary by project Each Build- To-Suit Project or Sale/Leaseback will be evaluated independently with terms to be negotiated.

The typical lease term will be as follows:

• 20-year lease
• (2) 10-year Renewal Options
• Annual rent escalations at 1.5%
• Renewal Options at 1.5%
• First lease payment to commence upon first day of business (30 days after)

The Initial Annual Rent (IAR) will be totaled using a Cap Rate associated with the Total Project Cost (TPC).

All costs associated with the project, to include:

• Land Acquisition
• Engineering
• Architecture
• Permitting
• Development and Infrastructure Construction Costs
• Travel Expenses
• Development Fee (5%)

These figures will accrue and become the TPC. At the time of project completion, the TPC will be reconciled and become the basis for the IAR, as follows:

• TPC: $1,750,000.00
• Cap Rate: 12.5% (Negotiable)
• IAR: $218,750.00