FAMILY OFFICE MOTIVES IN REAL ESTATE INVESTING - Presentation delivered by Jeffrey Hall, Senior Managing Director and Corbin Rich, Real Estate Manager of MANCHESTER CAPITAL MANAGEMENT, LLC at the IFG Wealth Management Forum Spring 2014 held in Phoenix, AZ

1. MANCHESTER CAPITAL MANAGEMENT REAL ESTATE ADVISORY

2. MANCHESTER CAPITAL – ORIGINS AND STRUCTUREMANCHESTER CAPITAL ORIGINS AND STRUCTURE
• Created to manage the financial affairs of several related Wall Street families who recognized the
limits and problems with Wall Street – transaction driven, commission loaded, and conflicting
constituencies. “ Where are the client’s boats?”
• Over the years assisted other families so that we were required to become registered with SEC in
1993 as a registered investment advisor. Currently serve about 45 families, representing about 150
households, and approximately $2.1 billion of assets under management.
• Thirty‐one professionals working out of four offices: Manchester, Vermont; Manhattan, New York;
Charlottesville, Virginia; and Montecito, California. Each office established in response to client
demand, and we’ve never purchased assets or sought lift‐outs.
• Firm is owned by its clients and employees and is governed by a Board of Managers consisting of
two client families and three employees so that we will remain independent in perpetuity freetwo client families and three employees, so that we will remain independent in perpetuity, free
from the demands of a corporate owner seeking to cross‐sell services or restrain client priorities.
• The only revenues come from a fee on client assets, so that we practice true open architecture,
with no products, commissions, entangling arrangements with managers, soft dollars, or other
forms of conflicts widespread in our industry.p y
• In essence, we have an annuity based business model, whereby putting client interests ahead of
our own, we capture an enduring revenue stream that allows us to suffer high COGS initially but
engender a long‐term relationship that is profitable.
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3. WHY INVEST IN REAL ESTATE
An Opportunity to Create Long Term Sustainable Value
o Excellent alternative investment.
o Asset Allocation 8% to 12% of portfolioo Asset Allocation ‐‐ 8% to 12% of portfolio.
o Uncorrelated returns to securities markets.
o Socially Responsible Investment Potential.
o Create family legacy assets.
o Potential income streams remain attractive vs. Fixed Income Investments.
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4. WHAT IS OUR SERVICE OFFERING
Manchester Capital Real Estate
A Truly Unique Service Offering
• Represent clients by managing real estate portfolios we hold for them.
• Portfolios tailored to each client’s preferences and criteria• Portfolios tailored to each client s preferences and criteria.
• Annual fee only, no carried interests, no conflict of interests.
• Client determines its participation in the process.
• Portfolio meets client’s investment, estate planning, cash flow, and tax
objectives.
• Act as real estate investment arm for Single Family OfficesAct as real estate investment arm for Single Family Offices
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5. HOW DO WE WORK WITH OUR CLIENTS
Create a Client‐Centric Real Estate Investment Program with MCM Real Estate Team
CLIENT Objectives
MCM
Team
Market
Opportunity
Real Estate
Investment
Program
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6. MCM REAL ESTATE TEAM
Background Role
Jeffrey S. Hall
Senior Managing Director
• 20 years of family office real estate investing
• $1+ billion of real estate investments
• Group leader
• Relationship managementSenior Managing Director $1 billion of real estate investments
• Former president of single‐family office
• NYU (MBA), Virginia (BS in Finance )
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• Deal sourcing
• Underwriting supervision
Bayard “Bart” Kraft
Managing Director
• 17 years of industrial/commercial real estate
investing
• Former CFO of industrial developer
• Deal sourcing
• Tenant procurement
• Lease negotiationFormer CFO of industrial developer
• $1+ billion of lease negotiations
• $300+ million of project financing
• Lease negotiation
• Project finance
• 10 years of real estate investment experience
• Former COO of property management firm
750 000 square feet of office
Jeremy Heidrick
Real Estate Manager
• Property manager oversight
• Construction management
• Due diligence₋ 750,000 square feet of office
₋ 2,700 residential units
₋ Coordinated acquisition due diligence
• Due diligence
C bi Ri h
• Over 6 years of commercial real estate
i b k
• Deal sourcing
M k hCorbin Rich
Real Estate Manager
investment brokerage
• Former partner at leading real estate capital
markets firm
• MS in Real Estate Management from
University of Denver
• Market research
• Valuations
• Due diligence
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7. HOW DO WE APPROACH THE MARKET ON YOUR BEHALF
• TARGET MARKETS AND SUB‐MARKETS
o What are acceptable locations for investments?
o Do you prefer urban or suburban markets?
o Would you like MCM to explore and identify specific markets and target markets?
• PRODUCT TYPES
o Investment Category: commercial office, retail, industrial, mixed use, apartments,
residential development, raw land? Development projects?
o Lease Types of commercial: NNN, IG, FSG?
• INVESTMENTS
o Sector Allocation: What is the current allocation in percentages and dollars to real
estate versus target allocation?
o What is the number of individual real estate investments you would like to target for
the portfolio?
o Preference for Value Add Opportunities vs. Stabilized Properties?
What is the maximum amount of equity you would in est in a single property?o What is the maximum amount of equity you would invest in a single property?
o Are you comfortable using leverage for income producing investments—do you have
a maximum leverage level?
• CLIENT PARTICIPATION
o Would you like to travel the markets with MCM team member for purposes of
exploring prospective markets and prospective investments?exploring prospective markets and prospective investments?
o At what points in the negotiation, due diligence and overall acquisition process do you
want MCM to consult and/or seek your approval?
o How frequent do you want MCM to provide comprehensive reports? We will work
with you to provide a 100% customized report to your liking.
o How much input/approval would you like into day to day operating, capital and
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leasing decision making?
• WHAT OTHER ITEMS DO WE NEED TO BE AWARE OF AS YOUR REAL ESTATE
ADVISORY FIRM?

8. BENEFITS OF DIRECT REAL ESTATE INVESTING VS.
REITS AND LIMITED PARTNERSHIP INVESTING
REAL ESTATE INVESTMENT TRUSTS:
• Pros:
o Highly liquid.g y q
o Many choices.
• Cons
o Volatile.
o No control.
LIMITED PARTNERSHIPS:
• Pros:
o Indirect access to direct real estate investing.
• Cons
I h t C fli t M d t i t t d t d f l to Inherent Conflicts‐‐Managed to investment and tax needs of general partner.
o Highly illiquid.
o Back in promotes of 15% to 30% after preference return.
MCM DIRECT REAL ESTATE INVESTMENT SERVICE:
• Pros:
o Client defined investment goals and parameters.
o Client defined participation in operating decisions.
o Client makes final purchase and sell decisions.
o MCM takes no “promoted” interest in the properties eliminating conflicts of interest.
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• Cons
o Illiquid, though client decides when to sell.

9. CURRENT PORTFOLIO
Geographic Diversity within International Gateway Cities
Our client real estate portfolios include a broad range of geographical markets
and diverse real estate product types:
o Market Value approximately $300 milliono Market Value approximately $300 million.
o Fifteen properties under asset management.
o San Francisco, Seattle, Denver, Portland, OR, Washington DC Metro,
and Central Virginia.
o 750,000 square feet of office/retail, 40 apartments, a 125 acre
commercial and industrial land development, a 1,200 unit residential
land development, 25,000 acres of ranch land.land development, 25,000 acres of ranch land.
o Socially responsible attributes.
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10. CURRENT PORTFOLIO
SAN FRANCISCO
123 TOWNSEND ST.
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SOMA
125,000 RENTABLE SQUARE FT

11. CURRENT PORTFOLIO
SAN FRANCISCO
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634 SECOND STREET
SOMA
46,000 RENTABLE SQUARE FT.

12. CURRENT PORTFOLIO
DENVER
SUGAR CUBE & HISTORIC SUGAR BUILDING
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SUGAR CUBE & HISTORIC SUGAR BUILDING
LODO
225,000 RENTABLE SQUARE FT—MIXED USE & OFFICE

13. CURRENT PORTFOLIO
CHARLOTTESVILLE, VA
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LEXIS NEXIS BUILDING
CENTRAL BUSINESS DISTRICT
80,000 RENTABLE SQUARE FT

14. LOYALTY BUILDING, HAMILTON BUILDING, AND POSTAL BUILDING
PORTLAND, OR
OVERVIEW:
• Portfolio of three historic office buildings in
downtown Portland, totaling ±114,000 square
feetfeet.
• Approximately 73% occupied.
• Seller invested over $6.0 million in capital
since 2010.
• Acquired December 2013 for $145 per square
foot and a 4 9% cap on in‐place incomefoot and a 4.9% cap on in‐place income.
• Projected to stabilize to a 7.4% cap by year
three, including significant leasing costs and
base building capital expenditures.
• Free and clear of existing debt.
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15. LOYALTY BUILDING, HAMILTON BUILDING, AND POSTAL BUILDING
PORTLAND, OR
CLIENT MOTIVATION:
• Client’s daughter is currently in law school in Portland.
• Clients owns synergistic office building in direct proximity.
• Portfolio fits desired profile of historic office assets in core location that are energy efficient.
• Two of the three buildings are currently in the process of attaining LEED certification.
• Acquisition price is substantially below replacement cost.
• Accelerating trend for tech companies coming back into this part of the CBD and targeting
these types of “jewel box” historic buildings.
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• Portland CBD is one of the tightest in the West and has historically experienced less volatility
than other major markets.

16. FX MCRORY BUILDING
SEATTLE, WA
OVERVIEW:
• ±86,000 square foot historic office building in downtown Seattle.
• Located in the Pioneer Square/Waterfront submarket, just blocks north of Seattle’s two major q j j
sports stadiums and east of the future waterfront pedestrian promenade.
• 98% leased with existing office rents 21% below market and existing retail rent 64% below
market.
• 10.9% direct vacancy in the submarket – down from 13.1% at the end of 2012.
• Average office rents of $27.29 per square foot in the submarket – up 8.6% year‐over‐year.
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• Free and clear of existing debt.

17. FX MCRORY BUILDING
SEATTLE, WA
CLIENT MOTIVATION:
• Client completed medical residency in Seattle.
• Clients owns complimentary building directly adjacent to subject property.
• Portfolio fits desired profile of historic office assets in gateway cities.
• Strong tenant demand in the submarket resulting from Amazon’s hyper growth in South Lake
Union and Denny Triangle.
• Attractive basis of $230 per square foot – nearly 30% below recent comparables.
• Institutional investor approached us to acquire both of client’s buildings at a market
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premium prior to closing escrow.

18. THANK YOU FOR TAKING THE TIME
W tl i t th t it t h i f ti b t l t t d i
Thank you for your time!
We greatly appreciate the opportunity to share information about our real estate advisory
practice.
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19. pital
IMPORTANT DISCLOSURES
hester CapManc
General Information: The information contained in this report is provided at your request and is intended only to facilitate your discussions
with Manchester Capital as to the opportunities available to our clients. The materials provided are based upon information included in our
records as well as information received from you and third parties. We do not represent that such information is accurate or complete and it
should not be relied upon as such. In the event of any discrepancy between the information contained herein and the information contained in
your monthly account statements, the latter shall govern. Manchester Capital has not taken any steps to independently verify information
provided by you, your agent, or any third party is accurate or complete and it should not be relied upon as such.
Assumptions: This material is based on the assumptions stated herein. In the event any of the assumptions used do not prove to be true, results
are likely to vary substantially from the examples shown herein. These examples are for illustrative purposes only and no representation is
being made that any client has achieved, will achieve, or is likely to achieve, the results shown. Simulated, modeled, or hypothetical
performance results have certain inherent limitations. Simulated results are hypothetical and do not represent actual trading, and thus may not
reflect material economic and market factors, such as liquidity constraints, that may have had an impact on actual decision‐making.
Asset Allocations: Client specific asset allocations are based upon the investment objectives and other information conveyed by you to
Manchester Capital. Specific strategies are chosen based upon your specific investment objectives. Before applying a particular asset allocation
to your individual situation you should consider whether it is suitable for your particular circumstances. A client’s actual portfolio and
investment objectives for portfolios management by Manchester Capital may look significantly different from the asset allocation information
provided herein. The price or value of any strategy identified directly in this asset allocation may fall or rise against your interests.
Direct Real Estate Investments: In considering a direct investment in real estate you should be aware that these investments are highly illiquidDirect Real Estate Investments: In considering a direct investment in real estate, you should be aware that these investments are highly illiquid,
not subject to the same regulatory requirements or oversight as mutual funds and more suitable for sophisticated investors.
Tax Advice: Manchester Capital does not directly provide tax or legal advice to its clients and all clients are strongly urged to consult with their
own tax or legal advisors regarding any potential strategy or investment. Any statement contained herein concerning US tax matters is not
intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer.