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Agenda Police Pension 120811
Agenda City of Palm Beach Gardens Police Officers’ Pension Fund SPECIAL M EETING OF D ECEMBER 8, 2011 LOCATION: City Council Chambers’ 10500 North Military Trail Palm Beach Gardens, FL 33410 TIME: 9 AM 1. Call Meeting To Order 2. Roll Call: • Lt. Jay Spencer, Chairman • David Pierson, Secretary • Brad Seidensticker, Trustee • Marc Glass, Trustee • Wayne Sidey, Trustee 3. Investment Manager Presentations: Real Estate • JP Morgan Chase & Co. – Presented by: Michael Duign an & Greg Pittenger • American Realty Advisors – Presented by: Richelle H ayes 4. Adjourn Next Meeting Date: Thursday January 19, 2012 @ 9AM PLEASE NOTE: Should any interested party seek to appeal any deci sion of this Board with respect to any matter consi dered at such meeting or hearing, s/he will need a record of the proceedings and for such purpose may need to ensure that a verbatim record of the proceedings is made, which record inc ludes the testimony and evidence upon which the app eal is to be based. In accordance with the Americans With Disabilities Act of 1990, persons needing a special accommodatio n to participate in this meeting should contact the The Pension Reso urce Center, LLC no later than four days prior to t he meeting. 801 North Brand Boulevard, Suite 800 Glendale, CA 91203 Phone: (818) 409-3243 Fax: (818) 545-8460 www.americanreal.com Palm Beach Gardens Police Pension Fund Request for Proposal for an Open-End Core Equity Real Estate Commingled Fund American Core Realty Fund, LLC November 30, 2011 LOS ANGELES ATLANTA CHICAGO SAN FRANCISCO THISTLE MANAGER INTERVIEW QUESTIONS 1 1. Company Name: American Realty Advisors 2. Parent Company Name: Not Applicable. American is a privately-held real estate investment management company and does not have a parent company. 3. Portfolio Name American Core Realty Fund, LLC 4. AUM As of September 30, 2011, American had $4,1 67.4 mm in firm assets under management (assets under management represent the gross market value of all assets and accounts, including cash and cash equivalents, manage d by American, excluding partners’ share of equity and debt on partnership investments). 5. Portfolio AUM As of September 30, 2011, the Core Fund ha d $2,290.8 mm in assets under management, (gross size represents gross market value of all assets and accounts managed by American, excluding partners’ share of equity and partners ’ share of debt on partnership investments, including cash and cash equivalents). 6. Portfolio Comparative Index The Core Fund aims to achieve similar investme nt characteristics as those of the NCREIF Fund Index -- Open-End Diversified Core Equity (NFI-ODCE). The index is reviewed regularly by the Portfolio Mana gement and Research Teams. 7. Number of years in business American has provided real estate investment ma nagement services to institutional investors THISTLE MANAGER INTERVIEW QUESTIONS 2 for over 23 years. 8. Contact name, phone, and email Mr. Jay Butterfield and Ms. Riche lle Hayes will serve as the primary client service officers for the Palm Beach Gardens Police Pension Fund an d its consultant, Thistl e Asset Consulting. Additionally, American’s other senior investment professionals are available to meet with the client and consultant as needed. Mr. Jay Butterfield, CFA Managing Director, Fund/Sep arate Account Operations American Real ty Advisors 801 N. Brand Boulevard, Suite 800 Glendale, California 91203 Office: 818-409-3243 Email: butterfield @americanreal.com Ms. Richelle Hayes Director, Marketing and Client Service American Realty Advisors 801 International Parkway, 5 th Floor Lake Mary, FL 32746 Office: 407-342-1432 Email: rhayes@americanreal.com 9. Number of assets in portfolio As of September 30, 2011, the Core Fund was comprised of 61 real estate investments. 10. Percent in foreign securities Not applicable. The Core Fund does not invest in foreign securities. 11. Maximum percentage allowed in foreign securities Not applicable. The Core Fund does not invest in foreign securities. 12. Breakdown of percentage in large cap, mid and small Not applicable. The Core Fund does not invest in publicly traded securities (other than cash THISTLE MANAGER INTERVIEW QUESTIONS 3 and cash equivalents.) The Core Fund is an open-end diversified core commingled real estate fund that invests in private real estate investments and does not hol d any publicly-traded large-, mid- or small- cap stocks. The Core Fund invests in private re al estate investments, primarily in single and multi-tenant office, industrial, retail and mu lti-family properties throughout the United States. The chart below shows the Core Fund’s proper ty value size (based on Gross Market Value) as of September 30, 2011. 13. Breakdown of percentage in growth, value and core The Core Fund is an open-end diversified core commingled real estate fund that invests in private real estate investments and does not hol d any publicly-traded large-, mid- or small- cap stocks. As of September 30, 2011, 100% of the Core Fund was invested in core private real estate investments. 14. Name of portfolio manager, number of ye ars in business and number of years with this portfolio. The Core Fund is managed on a team-basis. Am erican utilizes a team approach during all phases of the investment manage ment process to ensure each of its investment benefit from the collective expertise of the firm’s experienced real estate professional staff, and that the success of an individual asset or portfolio is not dependent on any single individual. The Portfolio Management team, under the super vision of the firm’s Investment Committee, meets on a frequent basis to review the portfo lio and its holdings in order to monitor its adherence to style, philosophy and process as well as to confirm the Core Fund remains in compliance with client guidelines and objectives. American Realty Advisors – Investment Committee Name Title Years of RE Experience* Years on Fund** THISTLE MANAGER INTERVIEW QUESTIONS 4 American Realty Advisors – Investment Committee Name Title Years of RE Experience* Years on Fund** Stanley Iezman Chairman and CEO 37 8 Kirk Helgeson EVP/Executive Managing Director, Investments/Investment Committee Chairman 22 8 Scott Darling President/ Executive Managing Director, Portfolio Management 33 8 Ray Kivett Managing Director, Investments 26 2 Paul Vacheron Managing Director, Asset Management 28 8 Daniel Robinson Managing Director , Finance/Investment Consulting 28 8 Greg Blomstrand Managing Director, Portfolio Management 20 8 * Investment professional experience is reported as of 09/30/11. ** Each investment professional’s Years on Fund is based on the Core Fund’s date of inception on November 21, 2003. In addition, the Years on Fund for Ray Kivett is based on his years with the firm. 15. What is your fee? The American Core Realty Fund’s fee schedule for the mandate contemplated under this proposal is as follows: Asset management fees are only charged on the ne t asset value of the amount of capital that is actually invested at any one time. The c lient’s total commitment determines the annual asset management fee percentage and the actu al fee owed on the Core Fund’s assets is calculated as outlined in the Core Fund’s O ffering Memorandum and Operating Agreement. This fee is calculated and paid quarterly in arre ars. At the end of ever y quarter, each investor is charged its applicable asset management fee which is applied to net investment assets only (there is no fee on uninvested commitments). Please note that this is not a tiered fee structure. American does not charge a cash manageme nt fee on excess cash or performance-based fees. American does not receive any additional compensation from the Core Fund in its capacity as the Fund’s manager. The firm is reimbursed at its cost by the Core Fund for certain administrative and recordkeeping expenses. In addition, American may provide other services to the Core Fund, and to the extent consistent with the Fund’s operating agreement, is entitled to reimbursement for expenses related to such services at rates comparable to or less than prevailing market ra tes charged by independent third parties. Market rates will be determined through competitive bidding. Core Fund – Fee Schedule Client Commitment A nnual Asset Management Fee < $25 million 110 basis points $25 - $75 million 95 basis points $75 million 85 basis points THISTLE MANAGER INTERVIEW QUESTIONS 5 16. Will you acknowledge that you are fiduci ary to the fund as defined in ERISA? Yes, American will acknowledge we are a fiduciary to the Fund as defined in ERISA. 17. Will you agree to execute trades on ly on a “best execution” basis? Not applicable. The Core Fund does not execute trades of securities. 18. Will you agree that should we have a disput e it will be governed by Florida law and federal law where applicable and that venue will be in the county where the Board is located? Yes, American will agree to ha ve a dispute governed by Flor ida law and federal law where applicable and that venue will be in the county where the Board is located, provided, however, that if other investors in the Core Fund are also a party to the dispute, the laws governing resolution of the dispute and the applicable venue will be d etermined by the terms of the Core Fund’s Operating Agreement. 19. Will you agree to a “most favored nations” clause? American is willing to consider language re lated to a “Most Favored Nations Clause,” proposed by the client’s counsel on a case by case basis, as it relates to any Member who has committed the same or lower amount of money to the Core Fund as initially committed by the Palm Beach Gardens Police Pension Fund and that provides that Member with a lower annual fee rate than would be paid by th e Palm Beach Gardens Police Pension Fund. 20. Is the fee you’re offering at least as favo rable for the fund as any that you offer to other institutional clients? Yes, the fee is at least favorable for the Pe nsion Fund as any that is offered to other institutional clients of the same or lower amount of commitment as contemplated by the Pension Fund. 21. Will you agree that if you invest outside of policy and a loss is sustained that you will reimburse the fund in the amount of th e loss including lost opportunity costs? The terms of the Investment Management Agreement (“Agreemen t”) between the Core Fund and American provide that American will indemnify the Core Fund for losses that arise out of actions taken by Am erican that were not authorized by or within the discretion granted to American by the Agreement or th e Operating Agreement or which constituted negligence. THISTLE MANAGER INTERVIEW QUESTIONS 6 22. Will you agree to report periodically to th e board the quality of corporate governance practices of the companies in which you invest? As previously mentioned the Core Fund invests in private real estate investments and does not invest in stocks of publicly traded companies. However, American will report periodically to the Board on issues related to the Pension Fund’s investment in the Core Fund, including those related to governance issues concerning the Core Fund. 23. Will you agree to attend board meetings quarterly? Yes. A representative of American will be ava ilable to attend quarterly board meetings if so desired. The firm has an office in Lake Mary, Florida, which would allow American to attend as many meetings as required. 24. Will you agree to combine the assets of the two funds for fee purposes? (if applicable) American would need to gather additional information from the funds prior to committing to any such combination. Under the Core Fund ’s fee schedule, however, such combination would only affect the fee charged if the total a ssets of the two funds were in excess of $25 million. INSURANCE 1. Errors & Omission Insurance a. What is the coverage amount? American maintains an Asset Management Protector policy, comprised of Directors and Officers Liability (D&O), Professional Liability (E&O) and Private Fund Liability coverage, with Federal Insurance Company (Chubb) with a maximum aggregate and per occurrence liability limit of $5 million. In addition, American has purchased an Excess Liability policy with Twin City Fire Insurance Company (The Hartford) that is follow-form to the Asset Management Protector policy and provides limits per occurrence of $5 million in excess of the first $5 million. This brings the total D&O/E&O limit to $10 m illion. Fiduciary liability coverage, other than for claims by employees relating to company benefits, is included within the Errors and Omissions coverage. THISTLE MANAGER INTERVIEW QUESTIONS 7 b. What is the deductible amount? The deductible amount for American’s E&O/D&O policy is $250,000 (retention). c. What is the name of your insurance carrier? American maintains an Asset Management Protector policy, comprised of Directors and Officers Liability (D&O), Professional Liability (E&O) and Private Fund Liability coverage, with Federa l Insurance Company (Chubb) and an Excess Liability policy with Twin City Fi re Insurance Company (The Hartford). d. Have there been any claims made against this policy in the last 2 years? No. There have been no claims made ag ainst American’s E&O policy in the last 2 years. i. Please explain the amount and nature of the claim Not applicable. e. Have any claims been paid during the past 2 years? No. There have been no claims paid under American’s E&O policy in the last 2 years. i. Please explain the amount and nature of the claim Not applicable. f. Have you changed carriers within the past 5 years? No. American has not changed its carri er for its E&O policy within the past 5 years. THISTLE MANAGER INTERVIEW QUESTIONS 8 i. How many times? Not applicable. ii. Please explain the basis for each change. Not applicable. 2. Employee Fidelity Bonds a. What are the amounts of the fi delity bonds for your employees? American maintains a Fidelity Bond in the amount of $3 million per occurrence. b. Have any claims been made or paid during the past 2 years? No. There have been no claims made against American’s Fidelity Bond or paid under American’s Fidelity Bond in the past 2 years. 3. General Liability Insurance a. What is the coverage amount? American maintains General Liability Insur ance in the amount of $1 million per occurrence and $2 million in aggregate to cover American and the majority of the entities formed to hold title to the real estate in which American invests on behalf of its investors. b. What is the deductible amount? The deductible amount for American’s General Liability Insurance policy is $0. c. What is the name of your insurance carrier? American maintains its General Liab ility Insurance with Federal Insurance Company (Chubb). THISTLE MANAGER INTERVIEW QUESTIONS 9 d. Have there been any claims made against this policy in the last 2 years? American invests in real estate assets and such assets may be subject to various claims related to minor and incidental events occurring at the firm's 150+ properties. In the course of normal busi ness, claims are made against the firm's general liability insurance and such claims have been made during the past 2 years. i. Please explain the amount and nature of the claim For the two years ended September 30 , 2011, approximately 20 claims have been recorded related to incidents occurring at the firm's properties (i.e., "slip and fall", vehicle related, incidental water damage, etc.). Some of these have subsequently been withdrawn or dismissed. e. Have any claims been paid during the past 2 years? For the two years ended September 30, 2011 , 9 claims have been paid related to items (d) above. i. Please explain the amount and nature of the claim For the two years ended September 30, 2011, the claims paid totaled approximately $85,000. f. Have you changed carriers within the past 5 years? Yes. American has changed carriers for its General Liability Insurance policy within the past 5 years. i. How many times? American has changed carriers for its General Liability Insurance policy 3 times within the past 5 years. ii. Please explain the basis for each change. Within the past 5 years, American elected to change carriers for its THISTLE MANAGER INTERVIEW QUESTIONS 10 General Liability Insurance policy as a result of: a) premium reductions b) broader coverage LEGAL MATTERS 1. Please state whether you will agree to an attorney’s fee provision. Yes. The terms of the Agreement between the Core Fund and American provides that American will indemnify, defend an d hold the Core Fund’s investors harmless from and against all claims and actual losses and expenses, including reasonable attorneys’ fees and costs arising out of any action where American did not act in good faith, was not authorized by or wi thin the discretion of the Agreement or Operating Agreement or constituted fraud, negligence, willful or wanton misconduct or a breach of ERISA. 2. In a management contract, would you ask for indemnification? In the event that American is subjected to a claim, but has performed in accordance with its obligations under the Agreement an d the Core Fund’s Operating Agreement, the Agreement and the Operating Agreement each provide that American would be indemnified and made whole for its defense costs and any losses it incurs. 3. Can you use a side-letter to address any specific issues raised above? American will consider side letter provis ions with respect to specific issues of concern to investors on a case-by-case basis. RESEARCH 1. How do you obtain your research (in-ho use or third party)? What percentage of research is generated internally? Internal and External Research The Research Team internally generates 100% of the research used by American, utilizing external sources to supplement the internally generated research. Taken together, the firm’s external and internal research resources constitute valuable tools in evaluating real-time information about markets, capital flows, property THISTLE MANAGER INTERVIEW QUESTIONS 11 supply/demand and current transactions an d in producing the key components of the investment decision-making process. Data providers and additional sources include: AC Nielsen Trade Dimensions L ocal Broker Reports AxioMetrics L ocal Economic Development Reports Bureau of Economic Analysis Marshall & Swift Bureau of Labor Statistics Moody’s | Economy.com CBRE Econometric Advisors (Formerly Torto Wheaton) N CREIF Claritas—Demographics PricewaterhouseCoopers (Korpacz-Survey) Co-Star Property & Portfolio Research Delta Associates R eal Capital Analytics Deutsche Bank/RREEF R EIS Federal Deposit Insurance Corporation R ERC Federal Reserve Ban k U S Census Bureau Housing and Urban Development U S Department of Commerce External research sources provide publicly available broad market data from a wide variety of sources, allowing American’s Re search Team to compare and contrast differing data from independent sources as inputs to its models. Over time, each external data source is graded and benchmarked against actual results and is continuously evaluated in terms of the quality of its output and usefulness to the process. These external sources then form part of the raw material for the firm’s internally generated research. In addition, Americ an’s Investment and Asset Management Teams provide “hands-on” direct market research to the Research Team, which then refines and executes its models to produce the final capital and target market results employed in the overall investment decision. By reaching beyond just the market consensus, American’s research provides a more detailed and customized analysis of each market that allows the firm to capitalize on opportunities that may be overlooked by others. 2. Please describe how your firm obtains and pays for outside research reports. All research utilized is paid for directly by American. The firm does not receive any services in lieu of fees or have any other such arrangement. 3. Please name the three primary sources of data and/or analyses upon which your firm relies. American does not rely exclusively on any particular primary sources of data in the generation of ideas, but rather utilizes thes e external sources to then supplement the THISTLE MANAGER INTERVIEW QUESTIONS 12 firm’s internally generated research. Sour ces of data are detailed in the firm’s response to Question 1 of the Research section of the questionnaire. The three most utilized sources are: 1) CoStar Group, 2) Moody’s | economy.com and 3) CBRE Econometric Advisors. OTHER 1. How many clients, public fund clients, a nd assets do you manage in Florida? As of September 30, 2011, American had 40 Fl orida-based institutional clients, of theses 38 clients are public fund clients with total assets of $112.6 milli on in gross real estate assets. 2. Please give the percentage breakdown of all your clients that are public funds, foundation/endowments, HNW, corporate, etc.? American Realty Advisors Firm Assets Under Management as of September 30,2011 Client Type % of Firm Assets Under Management Corporate 0.5% Public Funds 19.9% Taft-Hartley 79.2% Endowment/Foundations 0.1% High Net Worth 0.0% Other 0.3% Total 100.0% 3. Please discuss any departures or additi ons to the investment team (specific to this portfolio) over the previous 8 years. Walter Page, Managing Director, Research and Strategy left the firm in September 2011 to accept the position of Director of Research at PPR division of CoStar Group, Inc. in Boston. This departure is not expected to have any material effect on the investments in the Core Fund. The team we have in place supporting this function remains in place and the same methodology that we have been usi ng to perform our research continues in place. American has hired a new Managing Director of Research who will be joining the firm in the next quarter. STRICTLY PRIVATE / CONFIDENTIAL J.P. Morgan Asset Management Global Real Assets JPMCB Strategic Property Fund December 8, 2011 Palm Beach Gardens Police Pension Fund Michael Duignan , Executive Director 212 -648 -2122, michael.j.duignan@jpmorgan.com Gregory Pittenger , Vice President (312) 732 -4315, gregory.pittenger@jpmorgan.com 1 STRICTLY PRIVATE / CONFIDENTIAL Today’s presenters Greg Pittenger , Vice President , is a client advisor in the Investment Management division of J.P. Morgan Asset Management covering the Southeast. An employee since 2000, Greg is responsible for providing comprehensive asset management solutions for liquidity, def ined benefit, and defined contribution investments for U.S. institutional investors, including corporations, municipalities, not -for -profits and h ealthcare systems. Previously, he served as a relationship manager at Banc One Investment Advisors in Chicago with a focus on middle market inst itu tional accounts and as a credit analyst in Bank One’s Capital Markets group. Greg received a B.S. in finance from the University of Illinois and also holds FINRA Series 3, 7, 63 and 65 licenses. . Michael J. Duignan , Executive Director, is a client portfolio manager in the Global Real Assets - Client Relations and Strategy Group. An employee since 1998, Michael is responsible for the communication of performance and strategies of the group’s investment pro duc ts. Michael’s prior roles within Global Real Assets include Acquisitions Officer where he originated, negotiated and closed real estate tra nsa ctions, as well as oversaw the construction and re -development of properties in the Development and Engineering Group. Most recently, he was respon sible for dispositions and workouts of multiple assets in the U.S.. Prior to joining JP Morgan, Michael was in the asset management div isi on of O’Connor Realty Advisors, and was with the corporate real estate group at S.G. Warburg. Prior, he was a project manager for a New York co nstruction firm. Michael earned a B.Arch. from New York Institute of Technology, and is a licensed architect. He is a member of Urban Land Ins tit ute, Pension Real Estate Association and holds Series 7 and 63 licenses. 2 STRICTLY PRIVATE / CONFIDENTIAL Presentation Table of contents Page I. J.P. Morgan Asset Management – Global Real Assets Overview 3 II. JPMCB Strategic Property Fund 13 III. Appendix 27 –Real Estate Market outlook –Supplemental exhibits –Biographies of key professionals STRICTLY PRIVATE / CONFIDENTIAL 3 J.P. Morgan Asset Management – Global Real Assets Overview 4 STRICTLY PRIVATE / CONFIDENTIAL Commitment to Florida and Public Funds Experience with Public Funds Presence in Florida J.P. Morgan Asset Management has 41 institutional clients in Florida, representing over $5.6 billion* in assets under management Employees residing: 16,502 Consumer Customers: 5,828,268 Small Business Customers: 246,040 Total locations: 454 ATMs: 1,106 JPMorgan Chase raised more than $4.8 billion in financing for local governments and non -profit organizations in Florida in 2010. JPMorgan Chase contributed more than $5.3 million to Florida charities in 2010 JPMorgan Chase and its predecessor companies have been a part of Florida since 1891. Our roots date back to the founding of the Pensacola Home and Savings Association. Over 200 Public Fund clients, representing nearly $38 billion* in assets under management Relationships with Public Funds for over 37 Years Providing experienced investment management talent across the spectrum of asset classes: Real Estate and Real Assets Alternatives: Private Equity, Hedge Funds Traditional: U.S. Equities, Global Equities, Fixed Income Strategic and opportunistic strategies Employee Retirement Fire & Police Teachers State 200+ Public Fund Clients $11.8 $9.9 $7.6 $6.5 $1.9 $0.4 $0.0 $5.0 $10.0 $15.0 F i x e d I n c o m e R e a l A s s e t s U S E q u i t y G l o b a l & I n t e r n a t i o n a l E q u i t y P r i v a t e E q u i t y H e d g e F u n d s $38 billion in Public Fund AUM *As of December 31, 2010 5 STRICTLY PRIVATE / CONFIDENTIAL J.P. Morgan Asset Management – Global Real Assets Capitol at Chelsea New York, NY 100 Kimball Drive, Parsippany, NJ 225 West Wacker Chicago, IL Trilogy Apartments Boston, MA Sunnyvale City Center, Sunnyvale, CA Advanta , Bellevue, WA Equinox, Seattle, WA Markets at Town Center Jacksonville, FL San Rafael Corporate Center, San Rafael, CA These examples represent some of the investments of the Fund. However, you should not assume that these types of investments wi ll be available to or, if available, will be selected for investment by the Fund in the future. 6 STRICTLY PRIVATE / CONFIDENTIAL J.P. Morgan Asset Management – Global Real Assets $56.9bn in assets under management including $50.5bn in the private market and $6.4bn in the public market 1 Over 40 years of real estate investment management experience Stable, experienced management team 405 investment professionals (384 focused on the private market and 21 on the public market) Diverse client base including more than 460 institutional clients and over 1,000 high net worth clients Extensive, long -standing relationships with partners help generate $25 billion in annual privately negotiated deal flow Performance – consistent top performance versus targets We are one of the industry’s premier real asset investment managers Source: J.P. Morgan Investment Management Due to rounding, private market AUM and public market AUM may not total Global Real Assets AUM 1 As of September 30, 2011 7 STRICTLY PRIVATE / CONFIDENTIAL Our people: Experienced, focused professionals A team of experienced specialists are focused on supporting the portfolio manager to deliver performance and service to our clients Ben Gifford Chief Investment Officer Acquisitions 39 years experience Joe Azelby Group Head 25 years experience Kevin Faxon Head of Real Estate Americas 24 years experience Al Dort Financial Group 20 years experience Ellie Kerr Valuations 28 years experience Michael O’Brien Global Real Assets Client Relations and Strategy 34 years experience Portfolio Manager Anne Pfeiffer, Strategic Property Fund (38 years of experience) Dave Esrig Director of Research 19 years experience Steve Greenspan Product Development 26 years experience Mark Bonapace Asset Management 16 years experience James Kennedy Development & Engineering 21 years experience Lawrence Fuchs Chief Operating Officer 20 years experience September 30, 2011 There can be no assurance that the professionals currently employed by JPMAM will continue to be employed by JPMAM or that th e p ast performance or success of any such professional serves as an indicator of such professional’s future performance or success. Mike Kelly Debt Capital Markets 23 years experience 8 STRICTLY PRIVATE / CONFIDENTIAL Global Real Assets, Real Estate Americas – Investment Committee Head of Real Estate Americas Kevin Faxon Product Development Steven Greenspan Engineering Services James Kennedy Ellie Kerr Director of Valuation Chief Investment Officer Benjamin Gifford Real Estate Research Senior Member** Mark Bonapace Asset Management Financial Al Dort A unanimous vote is required to approve acquisitions and dispositions * Asset Management Region and Sector Heads: East/South: Andrea Pierce Central: Kimberly Adams West: David Sears Alternatives/Residential: Jean Anderson Retail: Sheryl Crosland ** Real Estate Research Senior Members Dave Esrig Anne Hoagland Brian Nottage Voting members Participating members Portfolio Manager Anne Pfeiffer Region or Property Sector Head* Asset Management There can be no assurance that the professionals currently employed by JPMAM will continue to be employed by JPMAM or that th e p ast performance or success of any such professional serves as an indicator of such professional’s future performance or success. 9 STRICTLY PRIVATE / CONFIDENTIAL All assets are valued quarterly Annual external appraisals (semi -annual for assets for $100 million or greater NAV) Internal appraisals conducted in interim periods –Cash flow models are updated for property specific and/or market changes Director of valuations –In -house, MAI, oversees the process –Hires/monitors third party appraisal firms –Ensures consistency in appraisal assumptions by property type and geography Client transactions are executed at a current , fair market value A fair and transparent valuation process 10 STRICTLY PRIVATE / CONFIDENTIAL Satisfied clients are our most important benchmark September 30, 2011 Alaska Retirement Management Board Maine Public Employees Retirement System Arkansas Teachers Retirement System Maryland State Employees Retirement & Pension Chicago Public School Teachers North Dakota State Investment Board Cincinnati Retirement System New York City Employees Retirement System City of Boca Raton Police & Fire Retirement System Ohio Police and Fire Pension Fund City of Miami Oklahoma Police Pension & Retirement City of Philadelphia Palm Bay Police and Fire City of Tallahassee Pennsylvania Public School Employees City Tucson Public School Retirement System of Missouri Colorado Fire and Police School Employees Retirement System of Ohio Colorado Public Employees Seattle City Employees Retirement System Denver Employees Retirement System State Board Administration of Florida Employees Retirement System of Rhode Island State of North Carolina Jacksonville Police & Fire State of Wisconsin Investment Board Kansas City Employees Retirement System Virginia Retirement System Strategic Property Fund has eighteen Florida Public Fund investors representing equity over $500 Million 11 STRICTLY PRIVATE / CONFIDENTIAL J.P. Morgan Asset Management – Global Real Assets Product Range U.S. European Property Strategy €2.2bn, 62 clients Alternative Property Strategy 1 $678mm, 30 clients Peabody Strategy $82mm, 20 clients 4 Europe JPMCB Special Situation Property Fund 1,2 $3.1bn, 99 clients Income and Growth Strategy 1 $2.3bn, 46 clients Asia India Property Strategy $320mm, 13 clients Real Estate Commingled Funds Core, Value -Added and Opportunistic Investments $7.0bn, 10 clients 5 Excelsior II Strategy $728mm, 3 clients Real Estate Separate Accounts/ Club -Style Investments Security Capital Research & Management 1 $4.9bn, 58 clients JPMorgan U.S. Real Estate Securities 1 $816mm, 23 clients JPMorgan Global Real Estate Securities 1 $249mm, 15 clients JPMorgan International Real Estate Securities 1 $424mm, 7 clients Public Real Estate Greater China Property Strategy $598mm, 15 clients 3 Greater Europe Opportunistic Property Strategy €178mm, 8 clients 3 Save & Prosper Strategy £139mm Junius Real Estate Partners Opportunistic Strategy (Capital Raising) Asian Infrastructure & Related Resources Opportunity Strategy $859.2mm 3 , 31 clients JPMorgan Infrastructure Investments Strategy $3.5bn 3 , 80 clients JPMCB Diversified Commercial Property Fund 1 $147mm Defined Contribution JPMCB Strategic Property Fund 1,2 $20.6bn, 273 clients JPMorgan Global Maritime Investment Strategy (Commitments to date $764mm, 25 clients) Infrastructure/ Transport The Commingled Pension Trust Funds of JPMorgan Chase Bank N.A. are collective trust funds established & maintained by JPMorga n C hase Bank, N.A. under a declaration of trust. The funds are not required to file a prospectus or registration statement with the SEC, & accordingly, nei ther is available. The funds are available only to certain qualified retirement plans & governmental plans & are not offered to the general public. Units of the funds ar e not bank deposits & are not insured or guaranteed by any bank, government entity, the FDIC or any other type of deposit insurance. You should carefully consider th e i nvestment objectives, risk, charges & expenses of the funds before investing. Commingled Pension Trust Fund (Strategic Property) of JPMorgan Chase Bank, N.A.; Com mingled Pension Trust Fund (Special Situation Property) of JPMorgan Chase Bank, N.A.; Commingled Pension Trust Fund (Diversified Commercial Property) of JPMorgan Chase Bank, N.A. Core Strategy £1 .7bn, 3 clients DC Assets in Direct Property Funds 6 $364mm Infrastructure Separate Accounts/Co -Investments $210mm 3 , 3 clients India Property Strategy II (Capital Raising) Greater China Property Strategy II (Capital Raising) Total AUM:$56.9bn fair value, gross of debt, as of 9/30/11 1 As of 9/30/11. All other strategies as of 6/30/11. 2 Available to U.S. tax -qualified pension plans only. 3 Total committed since inception 4 Largely liquidated; Peak fund AUM: $2.4bn 5 Represents 10 accounts, some of which invest in both core and value -add 6 The DC asset subset of SPF & SSPF AUM 12 STRICTLY PRIVATE / CONFIDENTIAL This page left intentionally blank STRICTLY PRIVATE / CONFIDENTIAL 13 JPMCB Strategic Property Fund 14 STRICTLY PRIVATE / CONFIDENTIAL JPMCB Strategic Property Fund 1 is core real estate Alliance Industrial Portfolio, Fort Worth, TX Valley Fair Mall, San Jose, CA 1 Commingled Pension Trust Fund Strategic Property of JPMorgan Chase Bank, N.A. (“Strategic Property Fund” or “SPF”) These examples represent some of the investments of the Fund. However, you should not assume that these types of investments wi ll be available to or, if available, will be selected for investment by the Fund in the future. 101 Constitution, Washington, DC Equinox Apartments, Seattle, W A 15 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund: Investment strategy Focus on attractive stabilized investments with high quality physical improvements Excellent location factors, with dominant competitive market positions Stronger growth demographics Minimal new development (pure core) High quality income stream Investment characteristics Total return target NPI + 100bps; income driven Holding period 5 -10 years Portfolio leverage 25% to 30% total portfolio Operating cash target 1% to 3% of total net asset value Risk and return expectations The manager seeks to achieve the stated objectives. There can be no guarantee those objectives will be met. Century Plaza Towers and 2000 AOS, Los Angeles, CA Strata, San Francisco, CA * The Target Return has been established by J.P. Morgan Investment Management Inc. “J.P. Morgan” based on its assumptions and calculations using data available to it and in light of current market conditions and available investment opportunities and is subject to the risks set forth herein and to be set forth more fully in the Memorandum. The target returns are for illustrative purposes onl y a nd are subject to significant limitations. An investor should not expect to achieve actual returns similar to the target returns shown above . B ecause of the inherent limitations of the target returns, potential investors should not rely on them when making a decision on whether or not to invest in the strategy. The target returns cannot account for the impact that economic, market, and other factors may have on the imple men tation of an actual investment program. Unlike actual performance, the target returns do not reflect actual trading, liquidity constraints , f ees, expenses, and other factors that could impact the future returns of the strategy. The manager’s ability to achieve the target returns i s s ubject to risk factors over which the manager may have no or limited control. There can be no assurance that the Fund will achieve its inves tme nt objective, the Target Return or any other objectives. The return achieved may be more or less than the Target Return. The dat a s upporting the Target Return is on file with J.P. Morgan and is available for inspection upon request. These examples represent some of the investments of the Fund. However, you should not assume that these types of investments wi ll be available to or, if available, will be selected for investment by the Fund in the future. 16 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund: A large, well -diversified investment portfolio Asset Management Cash position: 3.8% Contribution queue: $2.2bn Redemption queue: $0mm Current leverage: 27.5% Fund facts Property type diversification* As of September 30, 2011 (in millions – NAV $14,812.6) Asset Management Broadly diversified, well leased properties No exaggerated sector bets No hotels, assisted living, self -storage or forward commitments A pure core strategy Total number of investors: 273 Average investor size: $54mm Investor profile % of NAV Target range (%) NPI (%) Office 43.0 35 to 40 34.9 Industrial 10.2 14 to 18 13.8 Residential 22.7 18 to 23 26.1 Retail 19.0 20 to 25 22.5 Direct RE 94.9 97.3 Cash 3.8 0.0 Other** 1.3 2.7 Total Fund 100.0 100.0 $6,369.7 $1,509.0 $3,367.0 $2,810.2 $55.2 Office Industrial Residential Retail Land *Direct real estate w/land (total of $14,111.1mm) **Includes land The above is shown for illustrative purposes only, and is subject to change without notice. Diversification does not guarante e i nvestment returns and does not eliminate the risk of loss. These examples represent some of the investments of the Fund. However, you should not assume that these types of investments wi ll be available to or, if available, will be selected for investment by the Fund in the future. 17 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund: Diversification by location SPF 38.8% NPI 34.6% SPF 5.7% NPI 10.5% SPF 28.9% NPI 22.0% As of September 30, 2011 (in millions – NAV $14,812.6) MSA % of NAV Los Angeles, CA 12.6 New York, NY 9.6 Dallas, TX 8.8 Houston, TX 5.8 Washington, DC 5.8 Boston, MA 5.5 Seattle, WA 5.2 Chicago, IL 4.9 Atlanta, GA 4.7 Miami, FL 4.6 Due to rounding, the sum of SPF and NPI diversification values may not equal 100.0%, respectively. 18 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund: Distinguishing features – size, scale and quality Access to "Fortress" Malls Large office and residential assets in primary markets Advanta in Bellevue, WA Office NAV $247mm 1.7% SPF NAV Century Plaza Towers and 2000 AOS, Los Angeles, CA NAV $335mm 2.1% SPF NAV Bridgewater Commons Mall, Bridgewater, NJ NAV $128mm 0.8% SPF NAV Capitol at Chelsea New York, NY NAV $133mm 0.8% SPF NAV 712 Tucker in Raleigh, NC Residential NAV $32mm 0.2% SPF NAV September 30, 2011 19 STRICTLY PRIVATE / CONFIDENTIAL ■Property Type: Class A Residential, Retail (Mixed Use) ■Size: 474 units, 18,730 SF ■Occupancy: 92% ■MSA: Chicago, IL ■J.P. Morgan Asset Management pricing: $146.6 MM / $76.6 MM (gross / net) ■Going -in Yield: 5.90% ■Equity interest: 90% ■LTV: 48% ■Projected IRR (levered): 8.10% ■Acquisition Date: December 2010 Centrally located in Downtown Chicago Stabilized trophy asset in innovative, new, mixed -use master - planned community (Lakeshore East) Strong cash returns U.S. Core Real Estate: Aqua Chicago, IL This example is a representative investment. However, you should not assume that this type of investment will be available t o o r, if available, will be selected for investment in the future. There can be no guarantee of future success. The IRR shown above is calculated based upon internal JPMIM data and is gross of fees. There can be no guarantee the IRR will be achieved. 20 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund: Recent acquisition 200 Fifth Avenue, New York, NY ■Property type: Class A Office Tower ■Acquisition Date: August 2011 ■J.P. Morgan Asset Management Equity: $315mm ■Equity Interest: 95.2% JPM / 4.8% L&L Holding Co., LLC ■Projected unlevered IRR (10 yrs): 7.8% ■Projected levered IRR (10 yrs): 11.0% (9.8% After Promote) ■Leased: 82% ■Square Footage: 853,818 Opportunity to recapitalize this landmarked Class -A LEED -Gold building in the Madison Square Park/Flatiron submarket of Manhattan Currently primarily leased to three large long -term high -quality tenants providing stable cash flow with strong upside potential The Flatiron district’s proximity to other major office districts, its true mixed -use nature, and its access to mass transit make it a uniquely appealing offering for a variety of tenant types The IRR shown above is calculated based upon internal JPMIM data and is gross of fees. There can be no guarantee the IRR will be achieved. This example is a representative investment. However, you should not assume that this type of investment will be available t o o r, if available, will be selected for investment in the future. There can be no guarantee of future success. 21 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund: Recent acquisition 1918 Eighth Avenue and 818 Stewart Street, Seattle, WA ■Property Type: Class A Office Tower ■Acquisition Date: August 2011 ■J.P. Morgan Asset Management Equity: $414mm ■Equity Interest: 100% ■Projected unlevered IRR (10 yrs): 7.0% ■Leased: 94% (1918 Eighth Avenue) 90% (818 Stewart Street) ■Square Footage: 900,459 Situated in the Denny Regrade submarket of Downtown Seattle and is within walking distance to multiple lines of public transportation and Seattle’s retail core 1918 8th Avenue is a 36 -story, 668,333 square foot LEED Gold certified office tower and 818 Stewart Street is a 14 -story, 232,126 square foot office building. They feature state -of -the -art mechanical, electrical and data systems, ample power and best -in -class amenities. Long -term leased to a diverse collection of technology, consulting, legal and financial tenants The IRR shown above is calculated based upon internal JPMIM data and is gross of fees. There can be no guarantee the IRR will be achieved. This example is a representative investment. However, you should not assume that this type of investment will be available t o o r, if available, will be selected for investment in the future. There can be no guarantee of future success. 1918 Eighth Avenue 818 Stewart Street 22 STRICTLY PRIVATE / CONFIDENTIAL $23 $278 $638 $270 $212 $396 $228 $748 $576 $1,179 $649 $472 $506 $833 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YTD The Fund continues to show its commitment to active management and performance through its disposition strategy of pruning assets of lesser quality and / or growth prospects and where appropriate, trading up for asset quality in geographic location Disposition Solomon Pond Mall – Marlboro, MA, Sold 2Q11 As of 9/30/11 This example represent some of the investment of the Fund. However, you should not assume that this types of investment will be available to or, if available, will be selected for investment by the Fund in the future Strategic Property Fund: An active seller 23 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund: A substantial investor in the Sunshine State 18 assets located in various Florida cities including Orlando, Miami, Sarasota and Coral Gables $1.2 billion total gross asset value as of September 30, 2010 Over 4.4 million square feet of space including: -867,000 square feet of industrial -2.5 million (2,495,000) square feet of office space including Downtown Doral redevelopment project -1.1 million (1,066,000) million square feet of retail space -1,375 multi -family residential units Village of Merrick Park, Coral Gables, FL Southeast Financial Center, Miami, FL 24 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund: Balance sheet, operations and valuations Leverage profile: 27.5% LTV as of September 30, 2011 Staggered debt maturities 2.7%, 4.4%, 6.0% of NAV maturing in 2011, 2012 and 2013 respectively Average LTV is below 50% for expiring loans Cash and queues as of September 30, 2011 Cash: $565.8mm, 3.8% of NAV $525+ million of operating cash flow Outgoing queue: $0mm Incoming queue: $2,171mm Valuation metrics as of September 30, 2011 Leasing: 91.5% as of September 30, 2011 Peak (%) Current (%) Going -in Yield 5.3 5.6 Stabilized Yield 5.7 6.6 Discount Rate 7.1 7.8 Leasing Rollover (%) Leased 2011 2012 2013 Office 90.7 2.2 5.9 7.3 Retail 93.5 3.6 9.0 9.1 Residential 95.1 N/A N/A N/A Industrial 82.8 3.9 11.6 8.1 SPF Total 91.5 3.3 9.2 8.2 25 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund performance Past performance is not a guarantee of comparable future results. Total return assumes the reinvestment of income. Performance res ult s are gross of investment management fees. The deduction of an advisory fee reduces an investor’s return. Actual account performance will vary depending on individual portfolio security selection and the applicable fee sche dul e. Fees are described in Part II of the Advisor’s ADV which is available upon request. See Appendix for additional information. The following is an example of the effect of compounded advisory fees over a period of time on the v alu e of a client’s portfolio: A portfolio with a beginning value of $100mm, gaining an annual return of 10% per annum would grow to $259mm after 10 years, assuming no fees have been paid out. Conversely, a portfolio with a beginning valu e o f $100mm, gaining an annual return of 10% per annum, but paying a fee of 1% per annum, would only grow to $235mm after 10 years. The annualized returns over the 10 year time period are 10.00% (gross of fees) and 8.91% (net of fees). If the fee in the above example was 0.25% per annum, the portfolio would grow to $253mm after 10 years and return 9.73% net of fees. The fees were calculated on a monthly basis, which shows the maximum effect of compounding . SPF total return net of fees were: 3Q11: 3.0%; One year: 16.9%; Three years: -5.8%; Five years: 0.1%; Ten years: 5.8%; Since inception: 7.6%.. Supplemental to annual performance report 1 non -annualized returns Annualized returns as of September 30, 2011 (%) Three months 1 YTD 1 One year Three years Five years Ten years Since incep . 1/1/98 Income 1.2 4.1 5.8 6.0 5.7 6.4 7.1 Appreciation 2.0 8.1 11.7 -10.3 -4.4 0.4 1.5 SPF Total 3.2 12.5 18.1 -4.8 1.1 6.9 8.7 NFI -ODCE Total - Value 3.5 12.6 18.3 -6.4 0.0 5.9 7.8 NPI 3.3 11.0 16.1 -1.4 3.4 7.8 9.0 26 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund is the core fund of choice 1285 Avenue of the Americas, New York, NY Past performance is not a guarantee of comparable future results. Total return assumes the reinvestment of income. Performanc e r esults are gross of investment management fees. The deduction of an advisory fee reduces an investor’s return. Actual account performance will vary depending on individual portfolio security selection and the applicable fee sche dul e. Fees are described in Part II of the Advisor’s ADV which is available upon request Strong performance with a lower risk profile Diversified portfolio of dominant, high -quality assets Research -based portfolio construction Solid current income yield Excellent liquidity Fund assets are fairly valued STRICTLY PRIVATE / CONFIDENTIAL 27 Appendix – Real Estate Market Outlook 28 STRICTLY PRIVATE / CONFIDENTIAL Are capital markets flashing red? Source: Barclays, JPMAM 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2008 2009 2010 2011 Senior AAA Junior AAA CMBS spreads to treasuries 29 STRICTLY PRIVATE / CONFIDENTIAL Non -CMBS debt is cheap and available; CMBS troubles disproportionately hurt smaller markets 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Se p -01 Se p -02 Se p -03 Se p -04 Se p -05 Se p -06 Se p -07 Se p -08 Se p -09 Se p -10 Se p -11 Transaction cap rates, all quality JPMAM whole loan lender survey: 65% LTV, 10yr fixed, 30 yr am 18% 16% 34% 0% 5% 10% 15% 20% 25% 30% 35% 40% Primary Markets Secondary Markets Tertiary Markets CMBS share of mortgage originations, 2011H1 Cap rates vs. loan rates Source: Real Capital Analytics, JPMAM Primary: Atlanta, Boston, Chicago, Dallas/Ft Worth, Washington, DC, Houston, Los Angeles, New York City/Tri -State, Philadelphia, San Francisco, South Florida Secondary: Austin, Baltimore, Charlotte, Cincinnati, Cleveland, Denver, Detroit, Las Vegas, Memphis, Minneapolis, Nashville, Orl ando, Phoenix, Portland, Sacramento, San Diego, Seattle, St Louis, Tampa Tertiary: All other markets 30 STRICTLY PRIVATE / CONFIDENTIAL Core pricing held up through mid summer… 30 40 50 60 70 80 90 100 110 Oct -07 Apr -08 Oct -08 Apr -09 Oct -09 Apr -10 Oct -10 Apr -11 Oct -11 Moody's Large assets, major markets (through 8/11) Appraisal (through 9/11) Moody's Overall (through 8/11) Source: Moody’s, NCREIF, JPMAM -6% -4% -2% 0% 2% 4% 6% De c -09 Ma r -10 Ju n -10 Se p -10 De c -10 Ma r -11 Ju n -11 Se p -11 Appraisal quarterly changes 31 STRICTLY PRIVATE / CONFIDENTIAL Deal volume shows modest slowing Transaction volume in square feet, three month average seasonally adjusted Source: Real Capital Analytics, JPMAM The charts and/or graphs shown above and throughout the presentation are for illustration and discussion purposes only. 0 50 100 150 200 250 300 350 Au g -01 Au g -02 Au g -03 Au g -04 Au g -05 Au g -06 Au g -07 Au g -08 Au g -09 Au g -10 Au g -11 Industrial Office Retail Apartment Current Pace 32 STRICTLY PRIVATE / CONFIDENTIAL -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 2007Q1 2009Q1 2011Q1 -15% -10% -5% 0% 5% 10% 15% 2007Q1 2009Q1 2011Q1 -6% -4% -2% 0% 2% 4% 6% 2007Q1 2009Q1 2011Q1 -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 2007Q1 2009Q1 2011Q1 Recovery continues but signs of slowing Source: CBRE , Axiometrics, REIS and JPMAM Office Apartment Retail Industrial Year over year effective rent growth 33 STRICTLY PRIVATE / CONFIDENTIAL A two -track fundamentals recovery Source: CBRE, JPMAM 97 98 98 99 99 100 100 101 101 102 102 Sep -08 Sep -09 Sep -10 Sep -11 Class A Class B 95 96 97 98 99 100 101 Dec -00 Dec -01 Dec -02 Dec -03 Class A Class B Index of occupied office stock 2000 peak = 100.0 Index of occupied office stock 2007 peak = 100.0 34 STRICTLY PRIVATE / CONFIDENTIAL Two forecast adjustments: Significantly lower base case; downside is mild recession -6% -4% -2% 0% 2% 4% 6% 8% 2010 2011 2012 2013 2014 2015 2016 Previous base case forecast (1Q 2011) Current base case forecast Current recession (downside) case JPM office rent growth forecasts Source: CBRE, JPMAM 35 STRICTLY PRIVATE / CONFIDENTIAL U.S. real estate capital markets and fundamentals RE capital markets held up well in the first half despite a weak macro picture –with pricing, mortgage rates and debt availability remaining strong Fundamentals continued to improve incrementally for offices, warehouses and malls thanks to very low construction. Apartment rents are rising rapidly Continued weak economic growth without a recession should continue to be benign to commercial real estate A recession would hurt opportunistic real estate strategies as risk aversion rises but for high quality income producing “core” properties: –Prices are still well below peaks –Discount rates and cap rates are wide versus bonds –Debt is cheap and available –Sector is less levered than 2007 –Construction is virtually non -existent outside of apartments Assets where IRRs are driven by high NOI growth expectations are particularly vulnerable Opinions, estimates, forecasts, projections and statements of financial market trends that are based on current market condit ion s constitute our judgment and are subject to change without notice. There can be no guarantee they will be met. 36 STRICTLY PRIVATE / CONFIDENTIAL This page left intentionally blank STRICTLY PRIVATE / CONFIDENTIAL 37 Appendix — Supplemental exhibits 38 STRICTLY PRIVATE / CONFIDENTIAL Union labor policy Development and construction oversight Development Management Agreements and major construction contracts are reviewed by our Development Engineering Group to encourage the inclusion of language which promotes Fair Labor Practices including the use of union labor and MBE/WBE firms. Specific clauses are inserted into Agreements and contracts to obligate the service provider to use good faith efforts to engage union labor, wherever possible. With respect to development and construction many states have “open shop” or “right -to -work” policies which allow for the use of union as well as non -union contractors/labor. Depending on the state and/or region, one may find strong union representation for specific trades; i.e., elevator, electrical, teamsters, carpenters, steamfitters, etc. Historically, 70 to 80% of development projects we invest in have involved union labor. Property management services All third party property management firms providing management or leasing services are required to comply fully with all applicable state statutes pertaining to fair labor practices including equal employment opportunities. A firm’s history of labor relations and promotion of fair labor practices is taken into consideration as a decision criteria prior to entering into a contract with a property management firm and non -compliance is grounds for termination. Union snapshot ’05 Union Construction: approx. $1.4bn ’06 Union Construction: approx. $1.2bn est. ’07 Union Construction: approx. $1.6bn est. ’08 Union Construction: approx. $1.5bn est. 2009 $1.4b approx. of Union Construction across 31 projects Union contract work represents approximately $568 million in on -site union labor cost which corresponds to nearly 7.6 million hours of union labor 39 STRICTLY PRIVATE / CONFIDENTIAL Fee schedule Strategic Property Fund (“SPF”) fee is: 1.00% of the participant's pro -rata share of the net asset value of SPF, except that the fee will only be 0.15% with respect to the market value of cash and cash equivalents in SPF in excess of a 7.5% reserve position for cash and cash equivalents No acquisition or disposition fees or fees charged on any debt existing on any asset of SPF Fees shall be computed and billed on a calendar quarter basis, in arrears 40 STRICTLY PRIVATE / CONFIDENTIAL $155 $150 $234 $463 $586 $257 $361 $449 $441 $822 $1,437 $509 $999 $638 0 400 800 1,200 1,600 $ m m Client inflows Total client inflows since inception of $12,144 mm Client outflows Total client outflows since inception of $7,501 mm Strategic Property Fund client activity Net client activity Total net client activity since inception of $4,643 mm As of September 30, 2011 Participation policy Contributions to the Fund may be accepted on a monthly basis Withdrawals may occur once per quarter subject to available cash, as determined by the Trustee, with 45 days prior written notice To the extent that withdrawal requests exceed available cash, distributions are made on a pro rata basis. Available cash is defined as excess cash after provision for outstanding future capital commitments and other operating reserves $374 $205 $310 $339 $450 $853 $669 $1,102 $1,745 $1,768 $600 $26 $2,501 $1,202 0 400 800 1,200 1,600 2,000 2,400 2,800 $ m m $219 $55 $76 $(124) $(136) $596 $308 $653 $1,304 $946 $(837) $(483) $1,502 $564 -1,200 -800 -400 0 400 800 1,200 1,600 2,000 $ m m 41 STRICTLY PRIVATE / CONFIDENTIAL Valuation Process Appraisals for commingled funds External –once per year for all assets –semi -annually for major assets in SPF (assets of $100mm or greater in NAV) –Quarterly audit review by PWC National and regional appraisal firms –Cushman & Wakefield –CB Richard Ellis –Integra Realty Resources –National Valuation Consultants –National Property Valuation Advisors –Welsh Chester Galiney Matone , Inc. –New Market Real Estate Group –KTR Newmark Real Estate Services –Real Estate Research Corporation Internal –quarterly, internal MAI valuation –updated monthly for changes at the asset level and market conditions Review of external appraisals Asset Managers –accuracy of factual information –accuracy of leasing conditions and market data –summarizes appraisal assumptions and appraisers valuation conclusion –presents appraisal memo to Director of Valuations Director of Valuations –reasonableness of assumptions and final value –consistency of pricing parameters within geographic region and property type 42 STRICTLY PRIVATE / CONFIDENTIAL Valuation Process Appraisals for commingled funds External –once per year for all assets –semi -annually for major assets in SPF (assets of $100mm or greater in NAV) –Quarterly audit review by PWC National and regional appraisal firms –Cushman & Wakefield –CB Richard Ellis –Integra Realty Resources –National Valuation Consultants –National Property Valuation Advisors –Welsh Chester Galiney Matone, Inc. –New Market Real Estate Group –KTR Newmark Real Estate Services –Real Estate Research Corporation Internal –quarterly, internal MAI valuation –updated monthly for changes at the asset level and market conditions Review of external appraisals Asset Managers –accuracy of factual information –accuracy of leasing conditions and market data –summarizes appraisal assumptions and appraisers valuation conclusion –presents appraisal memo to Director of Valuations Director of Valuations –reasonableness of assumptions and final value –consistency of pricing parameters within geographic region and property type 43 STRICTLY PRIVATE / CONFIDENTIAL Strategic Property Fund – Risk management strategy Systematic Non -systematic Financial/structural risk –low LTV –no cross collateralization –no recourse except short term completion guarantees on construction loans Liquidity risk –$12.6bn equity from 256 clients in open -ended vehicle –quarterly withdrawal policy Cash flow risk –stable diversified income stream –no significant tenant concentration Control risk –all JV investments have buy -sell features –all JV investments have favorable dissolution features –professional financial reporting group –diligent audit and financial control management Manager risk –vital, growing real estate group –access to wide cast of investment professionals –integrated proprietary dedicated real estate research group with long -term commitment to asset class –most clients have other, larger holdings managed by J.P. Morgan Investment Management manager not totally dependent on real estate Broadly diversified $17.9bn GAV in four major asset sectors December 31, 2010 44 STRICTLY PRIVATE / CONFIDENTIAL Product design: Risk management elements Strategic Fund guidelines Property Fund (%) Leverage Limit – Portfolio 35 Single -asset concentration 5 Asset type sector concentration +/– versus NCREIF 15 Geographic sector concentration +/– versus NCREIF 15 Credit concentration (tenant) 5 Joint venture single -partner concentration 10 Development Property non -income producing maximum 5 Annual portfolio turnover 5 -20 Cash minimum -maximum 1 -7.5 STRICTLY PRIVATE / CONFIDENTIAL 45 Appendix – Biographies of key professionals 46 STRICTLY PRIVATE / CONFIDENTIAL J.P. Morgan Asset Management – Global Real Assets Joseph K. Azelby , Managing Director, is head of J.P. Morgan Asset Management – Global Real Assets’. An employee since 1986, he is responsible for the group's global business vision, strategy and execution. Joe chairs the Global Real Assets’ Global Management Committe e. He is also a member of the Asset Management Investment and Operating Committee's. Prior to joining the Real Estate & Infrastructure Group, he led the Mortgage Investment Strategy Group of the firm's Fixed Income Group. There, as a portfolio manager, he specialized in both pu bli c and private mortgages and other asset -backed securities. Joe joined the firm after playing professional football for the Buffalo Bills. He h as a B.A. in economics from Harvard University and an M.B.A. in finance from New York University. Benjamin G. Gifford, Managing Director, is the Real Estate Chief Investment Officer of J.P. Morgan Asset Management – Global Real Assets with 35 years of industry experience. An employee since 1998, Ben is responsible for the direct real estate investment activity of th e commingled funds and all separate accounts. Previously, he was president of O’Connor Realty Advisors, where he was responsible for the separat e a ccount direct investment real estate advisory business. He was also employed at the Morgan Guaranty Trust Company, where he was responsible fo r real estate equity investments on behalf of its commingled trust fund and separate accounts. Prior to that, he was employed by the Teache rs Insurance and Annuity Association (TIAA) as a Mortgage Officer. Ben has a B.A. from the University of Pennsylvania. His professional affili ati ons include the Urban Land Institute, the International Council of Shopping Centers and the Pension Real Estate Association. Anne S. Pfeiffer, Managing Director , is the Head of U.S. Real Estate Commingled Funds and is the Portfolio Manager responsible for the overall management and performance of the JPMorgan Strategic Property Fund. An employee since 1979, she joined the firm as the Senior Fi nance Officer. She has served the firm in several capacities including the head of the Finance Group, a Senior Asset Manager and an Ac quisitions Officer. Within acquisitions, she was responsible for the origination, analysis and negotiation of commercial real estate transactions . M s. Pfeiffer has extensive experience in the acquisition and management of institutional quality real estate in a variety of property types an d l ocations. Prior to joining the firm, she was a Supervising Accountant with Coopers & Lybrand as a Certified Public Accountant. From 2002 to 200 8, she served on the Board of Directors of the National Council of Real Estate Investment Fiduciaries (“NCREIF”) including serving as Presiden t f or 2007, 2008 and past President for 2009. Anne has a B.B.A. from Southern Methodist University. Kevin Faxon, Managing Director , is head of Real Estate Americas at J.P. Morgan Asset Management – Global Real Assets. The 250 person group manages more than $30 billion of assets across a range of Core, Value -added and Opportunistic strategies on behalf of institutio nal, sovereign and high net worth investors. Kevin is a member of JPMAM Americas Executive Committee and sits on the J.P. Morgan Commercial Rea l E state Council which coordinates the Real Estate activities of the broader Firm. An employee since 1988, Kevin was previously portfolio man age r of the Special Situation Property and Income & Growth Funds. Prior to assuming these roles, Kevin was head of acquisitions for the western Uni ted States. Before joining the firm, he was employed by Landauer Associates, a national real estate consulting firm. Kevin holds a B.S. in real estate and finance from the University of Connecticut and an M.B.A. in finance from New York University. He is a member of the Urban Land Institute, NA REIM and PREA. 47 STRICTLY PRIVATE / CONFIDENTIAL J.P. Morgan Asset Management – Global Real Assets Dave Esrig, Managing Director, is J.P. Morgan Asset Management – Global Real Assets director of U.S. real estate and infrastructure researc h. An employee since 1997, Dave and his team forecast local economic and property performance in support of acquisitions, dispositi ons and portfolio strategy development. Prior to joining the firm, Dave was chief economist at an industry trade group. He also worked for a nu mbe r of years at Economy.com, an economic consulting firm, where his duties included modeling local real estate supply and demand fundamentals . D ave holds a B.A. from the University of Virginia, an M.A. in economics from the University of Pennsylvania and is a CFA charterholder . Alfred W. Dort, Managing Director, is the head of the Real Estate Financial Group of J.P. Morgan Asset Management – Global Real Assets. An employee since 1997, his responsibilities include the financial management, reporting and analysis for Real Estate Funds and Sep arate Accounts. Prior to joining J.P. Morgan Asset Management, Alfred spent several years with PricewaterhouseCoopers LLP, providing consulti ng and accounting services to real estate industry clients. He graduated with a B.S. in accountancy from Villanova University and is a CPA. He is currently a member of the American Institute of Certified Public Accountants. Mark Bonapace, Managing Director, is the head of Asset Management for the JPMorgan Real Estate Group, responsible for the management, leasing and ongoing development of the real estate assets. An employee since 1990, Mark has held several positions within the g roup. Prior to his role as head of Asset Management, Mark was the sector head for Office/Industrial East/South within the Real Estate Group. Mark has also been the Office/Industrial sector head for the Central region and was a Senior Asset Manager for our Retail portfolio. Mark previously w orked at Deloitte & Touche for four years. He holds a B.S. in accounting from the University of Delaware and an M.B.A. in finance from New York Universit y's Stern School of Business. Mark is also a Certified Public Accountant and an active member of the Urban Land Institute. Lawrence Fuchs, Managing Director, is the Chief Operating Officer of J.P. Morgan Asset Management – Global Real Assets. An employee since 2000, he is responsible for strategic business development, execution of the global business plans and initiatives and operat ion al management. Lawrence is a member of the J.P. Morgan Asset Management – RE Global and Americas Management Committees. He is also a board memb er of the JPMorgan Alternative Property Fund and JPMorgan U.S. Real Estate Income and Growth Fund. Prior to joining the group, he w as the director of operations for the Emerging Markets U.S. division of J.P. Morgan Securities, Inc. From 1998 to 2000, he was a member of the E mer ging Markets Trading Association, providing insight for emerging markets operational risk and business practices. Lawrence is registered a s a General Securities Principal of J.P. Morgan Institutional Investments, Inc. He holds a B.S. in finance from Hofstra University. Ellie Kerr, Managing Director, is J.P. Morgan Asset Management – Global Real Assets director of valuations for real estate. An employee sin ce 2001, Ellie is responsible for overseeing the appraisal process. She served as chairperson of the NCREIF Valuation Committee fro m 2004 to 2005 and continues to be actively involved. Prior to joining the firm, she was employed by SSR Realty Advisors, Inc. as director o f v aluations. Ellie earned a B.A. in economics from Williams College and holds an M.A.I. from the Appraisal Institute. 48 STRICTLY PRIVATE / CONFIDENTIAL J.P. Morgan Asset Management – Global Real Assets James F. Kennedy, Managing Director , is the head of the firm’s Development & Engineering Group within J.P. Morgan Asset Management - Global Real Assets. An employee since 2004, he is responsible for engineering and environmental due diligence, development oversigh t a nd general engineering support for asset management. Jim is involved with the various real estate and infrastructure funds internationa lly , and also spearheads the group's sustainability initiatives. Jim has been in the industry since 1990, serving in various roles across the development, construction and business consulting fields, with such firms as PricewaterhouseCoopers and FRM (Aramark ). His engineering and development experience ranges across asset types, including office, industrial, retail, multi -family, hospitality and large -scale civil infrastructure. Jim r eceived a B.B.A. in finance from the University of Massachusetts at Amherst and an M.S. in civil and environmental engineering from the Massachusetts Ins tit ute of Technology. He is a member of the American Society of Civil Engineers, National Association of Real Estate Investment Managers, Urban Lan d I nstitute, International Council of Shopping Centers and US Green Building Council. Jim is a USGBC -LEED Accredited Professional. Steven Greenspan , Managing Director, is the Global Director of Product Development for J.P. Morgan Asset Management - Global Real Assets. Steven plays an integral role in the design, marketing, launch, implementation and oversight of GRA's global products a nd strategies. A J.P. Morgan employee since 1996, Steven has broad experience in structuring open - and closed -end funds and separate accounts designed to meet the complex commercial, legal, regulatory, and tax needs of JPMAM's global client base. He is a member of JPMAM -GRA's Global and Ame ricas Management Committees and serves on the investment committees and boards of directors of various GRA real estate, infrastruct ure and maritime funds. Steven has been recognized as a New York Super Lawyer. He previously served as a vice president/assistant general counse l in JPMAM's Legal Department, and as a practicing attorney in the real estate and corporate departments at Stroock & Stroock & Lavan LLP. Steven holds a B.P.S. from the University at Buffalo and a J.D. from Brooklyn Law School. Michael O’Brien, Managing Director, is the head of Global Real Estate Client Relations and Strategy for J.P. Morgan Asset Management –Global Real Assets. Michael is a member of the J.P. Morgan Asset Management Global Real Assets Management Committee and a member of the Real Estate Americas Management Committee. An employee since 2000, Michael is responsible for marketing all of the J.P. Morgan Ass et Management Group's real estate capabilities. He has over 32 years of experience in institutional marketing and real estate. Prior to joi nin g the firm, he worked at Lend Lease and Equitable Real Estate where he was a senior officer and served as senior account executive, product manager an d f inancial analyst. Michael graduated Phi Beta Kappa from Rutgers University with a B.A. in economics and M.B.A. in finance from Rutgers Un iversity. He holds the FINRA Series 7, 63 and 24 licenses. 49 STRICTLY PRIVATE / CONFIDENTIAL Real Estate Investment Management Services Strategic Property Fund Annual Performance Report As of December 31 Fees (as of 12/31/09) J.P. Morgan Investment Management Inc. (JPMIM) has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). J.P. Morgan Investment Management Inc. (JPMIM or the Firm) consists of the assets of institutional clients invested in US managed products including 1) the fixed income and cash assets formerly part of Chase Asset Management and MDSass&Chase Partners, 2) the New York institutional investment division of JPMorgan Chase Bank, N.A., formerly Morgan Guaranty Trust Company of New York, and 3) the institutional investment assets of JPMorgan Investment Advisors, Inc. (JPMIA), formerly known as Banc One Investment Advisors Corporation (BOIA), the advisor to institutional assets directly managed by JPMIA or sub -advised by an affiliate institution, and 4) the institutional assets of Bear Stearns Asset Management Inc. The Firm also includes Separately Managed Accounts over which JPMIM has full and sole discretion. JPMIM is marketed under JPMorgan Asset Management. The composite contains a single account which is the commingled fund that is directly invested according to JPMIM’s Strategic Property Fund strategy. The strategy is an actively managed diversified, core, open -end commingled pension trust fund. It seeks an income -driven rate of return of 100 basis points over the NCREIF Property Index over a full market cycle (three -to -five -year horizon) through asset, geographic and sector selection and active asset management. The Fund invests in high -quality stabilized assets with dominant competitive characteristics in markets with attractive demographics throughout the United States. The composite was created in December 1998. Equity futures are occasionally used in accordance with client -authorized account objectives and guidelines in order to equitize large cash contributions and to minimize market impact while purchasing individual equity securities. Both gross and net returns reflect the reinvestment of income, deduction of transaction costs, and are net of withholding taxes where applicable and include the effect of leverage, which averaged 32.8% of asset value in the year 2009. All returns are expressed in U.S. dollars Gross returns do not reflect the deduction of investment advisory fees or any other expenses that may be incurred in the management of the account. The sum of the income and appreciation returns will not equal the total gross return due to the effect of compounding. Net returns have been calculated monthly using the actual fees charged to shareholders of the fund. The standard annual fee schedule currently in effect is as follows: 1.00% per annum on the market value of the assets, except for cash holdings in excess of 7.5% of the fund’s total assets, which are charged a standard cash management fee of 0.15%. Actual advisory fees charged and actual account minimum size may vary by account due to various conditions described in Part II of Form ADV. A complete list and description of composites and additional information regarding policies for calculating and reporting returns are available upon request. The benchmark is the NCREIF Property Index. The index returns are provided to represent the investment environment existing during the time periods shown and are not covered by the report of independent verifiers. For comparison purposes the index is fully invested, which includes the reinvestment of income. The returns for the index do not include any transaction costs, management fees or other costs. The dispersion of annual returns is measured by the asset -weighted standard deviation of account returns included in the composite for the full year. For periods with 5 or fewer accounts included for the entire year, dispersion is not presented (n/a) as it is not considered meaningful. Past performance is no guarantee of future results. As with any investment vehicle, there is always the potential for gains as well as the possibility of losses. Annual returns, U.S. $ Asset - Composite Percent of Percent weighted Composite Total Total market real estate of firm Total firm Number of standard Date Income (%) appreciation (%) (% gross) (% net) Benchmark (%) value ($mm) assets assets assets ($bn) accounts deviation 1998 9.43 6.34 16.37 15.23 16.24 4,047 47.05 2.35 172 5 or fewer n/a 1999 9.24 5.01 14.70 13.53 11.36 5,335 38.11 2.84 188 5 or fewer n/a 2000 8.67 5.06 14.13 13.01 12.24 6,129 45.13 3.15 194 5 or fewer n/a 2001 8.61 -0.94 7.60 6.54 7.28 6,849 43.80 2.21 310 5 or fewer n/a 2002 8.07 -2.78 5.09 4.06 6.74 7,398 47.47 3.11 238 5 or fewer n/a 2003 7.38 2.98 10.57 9.48 8.99 8,695 48.00 3.61 241 5 or fewer n/a 2004 7.07 4.92 12.31 11.23 14.48 10,851 50.10 3.86 281 5 or fewer n/a 2005 6.62 17.45 25.12 23.90 20.06 13,204 48.00 3.79 348 5 or fewer n/a 2006 5.72 10.34 16.60 15.45 16.59 16,322 38.00 4.36 374 5 or fewer n/a 2007 5.42 10.73 16.68 15.54 15.85 20,357 36.00 4.71 432 5 or fewer n/a 2008 4.97 -12.49 -8.09 -9.01 -6.46 18,741 37.12 3.43 547 5 or fewer n/a 2009 6.13 -30.92 -26.55 -27.30 -16.85 14,821 33.54 2.41 616 5 or fewer n/a 1.00% per annum on the market value of the assets, except for cash holdings in excess of 7.5% of the fund’s total assets, which are charged a standard cash management fee of 15 basis points. Minimum investment: $10 million STRICTLY PRIVATE / CONFIDENTIAL 50 J.P. Morgan Asset Management – Global Real Assets The Commingled Pension Trust Funds of JPMorgan Chase Bank N.A. are collective trust funds established and maintained by JPMor gan Chase Bank, N.A. under a declaration of trust. The funds are not required to file a prospectus or registration statement with the SEC, and accordingly, neither is available. The funds are available only to certain qualified retirement pla ns and governmental plans and are not offered to the general public. Units of the funds are not bank deposits and are not insured or guaranteed by any bank, government entity, the FDIC or any other type of deposit insurance. You should carefully con sider the investment objectives, risk, charges, and expenses of the funds before investing. •Commingled Pension Trust Fund (Special Situation Property) of JPMorgan Chase Bank, N.A. •Commingled Pension Trust Fund (Strategic Property) of JPMorgan Chase Bank, N.A. •Commingled Pension Trust Fund (US Real Estate Securities) of JPMorgan Chase Bank, N.A. The commingled trust funds are collective investment funds maintained by JPMorgan Chase Bank, N.A. Only qualified employee be nef it trusts and governmental plans that have appointed JPMorgan Chase Bank, N.A. as fiduciary are permitted to invest in the fund. JPMorgan Asset Management advises JPMorgan Chase Bank, N.A. regarding the management of the funds This document is intended solely to report on various investment views held by J.P. Morgan Asset Management. Opinions, estima tes , forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here is reliable but should not be ass ume d to be accurate or complete. The views and strategies described may not be suitable for all investors. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and s hou ld not be interpreted as, recommendations. Indices do not include fees or operating expenses and are not available for actual investment. The information contained herein employs proprietary projections of expected returns as well as estimates of their future volatility. The relative relationships and forecasts contained herein are based upon proprietary research and are developed through analysis of historical data and capital markets theory. These estimates have certain inherent limitatio ns, and unlike an actual performance record, they do not reflect actual trading, liquidity constraints, fees or other costs. References to future net returns are not promises or even estimates of actual returns a client portfolio may achieve. The for eca sts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. Real estate investing may be subject to a higher degree of market risk because of concentration in a specific industry, secto r o r geographical sector. Real estate investing may be subject to risks including, but not limited to, declines in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the t rus t and defaults by borrower . Leverage. Certain of the Fund’s investments may be leveraged, which may adversely affect income earned by the Fund or may re sul t in a loss of principal. The use of leverage creates an opportunity for increased net income, but at the same time involves a high degree of financial risk and may increase the exposure of the Fund or its investments to factors such as risi ng interest rates, downturns in the economy or deterioration in the condition of the investment collateral. The Fund may be unable to secure attractive financing as market fluctuations may significantly decrease the availability and increase the cos t o f leverage. Principal and interest payments on any leverage will be payable regardless of whether the Fund has sufficient cash available. Senior lenders would be entitled to a preferred cash flow prior to the Fund’s entitlement to payment on its I nve stment. The value of investments and the income from them may fluctuate and your investment is not guaranteed. Past performance is no gua ran tee of future results. Please note current performance may be higher or lower than the performance data shown. Please note that investments in foreign markets are subject to special currency, political, and economic risks. Exchan ge rates may cause the value of underlying overseas investments to go down or up. Investments in emerging markets may be more volatile than other markets and the risk to your capital is therefore greater. Also, the economic and political situa tio ns may be more volatile than in established economies and these may adversely influence the value of investments made. The deduction of an advisory fee reduces an investor’s return. Actual account performance will vary depending on individual p ort folio security selection and the applicable fee schedule. Fees are available upon request. The following is an example of the effect of compounded advisory fees over a period of time on the value of a client’s portfo lio : A portfolio with a beginning value of $100mm, gaining an annual return of 10% per annum would grow to $259mm after 10 years, assuming no fees have been paid out. Conversely, a portfolio with a beginning value of $100mm, gaining an annual re tur n of 10% per annum, but paying a fee of 1% per annum, would only grow to $235mm after 10 years. The annualized returns over the 10 year time period are 10.00% (gross of fees) and 8.91% (net of fees). If the fee in the above example was 0.2 5% per annum, the portfolio would grow to $253mm after 10 years and return 9.73% net of fees. The fees were calculated on a monthly basis, which shows the maximum effect of compounding. All case studies are shown for illustrative purposes only and should not be relied upon as advice or interpreted as a recomme nda tion. They are based on current market conditions that constitute our judgment and are subject to change. Results shown are not meant to be representative of actual investment results. Past performance is not necessarily indicative of the lik ely future performance of an investment. Any securities mentioned throughout the presentation are shown for illustrative purposes only and should not be interpreted a s r ecommendations to buy or sell. A full list of firm recommendations for the past year is available upon request. The Fund is established and maintained by JPMorgan Chase Bank, N.A. under a Declaration of Trust. The Fund is a bank -sponsored collective investment fund established as a group trust within the meaning of Internal Revenue Service Revenue Ruling 81 -100, as amended. The Fund is available exclusively to certain tax -qualified retirement and governmental plans that ha ve appointed JPMorgan Chase Bank, N.A. as fiduciary for the plan. J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. and its affili ate s worldwide. Those businesses include, but are not limited to, JPMorgan Chase Bank, N.A., J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated, and J.P. Morgan Alternative Asset Management , I nc. J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. and its affili ate s worldwide. Those businesses include, but are not limited to, JPMorgan Chase Bank, N.A., J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated, and J.P. Morgan Alternative Asset Management , I nc. Copyright © 2010 JPMorgan Chase & Co. All rights reserved. 51 STRICTLY PRIVATE / CONFIDENTIAL This page left intentionally blank Private/Confidential – Not For Public Distribution Palm Beach Gardens Police Pension Fund The Commingled Pension Trust Fund (Strategic Proper ty) of JPMorgan Chase Bank November 30, 2011 2 Company Name J.P. Morgan Asset Management 1 (JPMAM) 1. Parent Company Name JPMorgan Chase & Co. 2. Portfolio Name JPMCB Strategic Property Fund 2 3. AUM J.P. Morgan Asset Management: $1.3 billion (GAV) as of 9/30/2011 J.P. Morgan Asset Management – Global Real Assets: $56.9 billion (GAV) as of 9/30/2011 4. Portfolio AUM $20.6 billion (GAV) / $14.8 billion (NAV) as of 9/3 0/2011 5. Portfolio Comparative Index The Strategic Property Fund is an actively managed diversified, pure core, open-end commingled pension trust fund. It seeks an income-driven rate of return of 100 basis points* over the NCREIF Property Index (NPI) over a full market cycle (thre e-to-five-year horizon) through asset, geographic and sector selection and active asset ma nagement. The Fund invests in high-quality stabilized assets with dominant competitive charact eristics in primary markets with attractive demographics throughout the United States. In addition to NPI, the Fund also refers to the NCR EIF ODCE benchmark, as it is an index comprised of JPMCB SPF and other open-end commingle d funds with core real estate investment strategies. JPMCB SPF has outperformed its closest competitors in the mid-term (e.g. three years and five years) and long-term (e.g. 10 years and since inception) based on the NCREIF ODCE Index. 6. Number of years in business JPMorgan Chase & Co. (NYSE: JPM) is a leading globa l financial services firm with assets of $2.3 trillion and operations in more than 60 countr ies as of September 30, 2011. The firm has a long history in the industry based on the many inst itutions that have formed what is today JPMorgan Chase & Co. The first bank to eventually become part of JPMorgan Chase, the Bank of the Manhattan Company, was established in 1799. On December 31, 2000 J.P. Morgan & Co. merged with Chase Manhattan Bank to form J.P. Morga n Chase & Co. On July 1, 2004, J.P. Morgan Chase & Co. and Bank One Corporation merged. The merged parent company, JPMorgan Chase & Co., is a component of the Dow Jon es Industrial Average. JPMorgan Chase serves millions of consumers in the United States a nd many of the world’s most prominent corporate, institutional and government clients und er its J.P. Morgan, Chase and WaMu brands. 1 J.P. Morgan Investment Management Inc. is the legal entity responsible for the management of this prod uct. J.P. Morgan Asset Management is the marketing name for t he asset management business of JPMorgan Chase & Co . For the purposes of this RFP, we will use the marke ting name when referencing our investment activitie s on behalf of J.P. Morgan Asset Management. 2 The Commingled Pension Trust Fund (Strategic Proper ty) of JPMorgan Chase Bank N.A. 3 J.P. Morgan has been offering asset management serv ices for over a century, originally through the Trust and Investment Division of J.P. Morgan & Co., Inc. and more recently through J.P. Morgan Investment Management Inc., the wholly owned subsidiary of JPMorgan Chase & Co. Key dates in our investment history include: • 1984 - J.P. Morgan Investment Management Inc. was r egistered with the SEC • 2004 – J.P. Morgan Chase & Co.’s merger with Bank O ne Corporation allowed us to create one of the world’s largest asset management organiz ations J.P. Morgan Asset Management offers the full spectr um of investment strategies -- from equity, cash management, fixed income, currency and asset a llocation to alternative asset classes such as private equity, real estate and hedge funds. Information about JPMorgan Chase & Co. is available on the Internet at www.jpmorganchase.com J.P. Morgan Asset Management – Global Real Assets h as managed open-ended real estate commingled funds since 1970, and in 1974, we began separate account investing. Highlights of our more than 40-year history include: • 1970 – Began managing a core open-ended real estate fund (inception of the Real Estate Fund) • 1974 – Made first separate account investments • 1997 – Launched a U.S. REIT strategy • 1998 – Split the Real Estate Fund into a core (JPMC B Strategic Property Fund) strategy and a value-added (JPMCB Special Situation Property Fund) strategy • 1998 – Acquired O’Connor Realty Advisors adding a $4 billion separate account real estate platform • 2001 – Launched a core plus strategy that invests i n core direct real estate and mezzanine debt • 2004 – Brought Security Capital, a boutique REIT ma nagement firm with over $5 billion in assets under management, under the J.P. Morgan Asse t Management - Global Real Assets umbrella as a result of the merger between JPMorgan Chase and Bank One • 2004 – Established a European investment platform w ith $3 billion in assets by bringing JPMorgan Partners European team under the J.P. Morg an Investment Management Inc. umbrella • 2005 – Launched a value add strategy that invests i n leveraged core-plus real estate assets throughout Europe • 2005 – Launched a core plus alternative real estate strategy that invests in demographically driven sectors such as assisted-living, medical off ice and senior housing • 2006 – Launched an opportunistic strategy that inve sts in real estate development projects in India • 2006 – Launched Global and International REIT strat egies • 2006 – Launched a core plus strategy that invests i n a broad range of infrastructure and infrastructure-related assets, primarily in the U.S ., Canada, Western Europe and Australia • 2007 – Launched an opportunistic strategy that inve sts in direct real estate primarily in Greater China • 2007 – Launched an opportunistic strategy that inve sts in direct real estate in Europe • 2008 – Launched a US defined contribution real esta te fund of 4 funds that invests in direct and public real estate funds • 2008 – Launched an opportunistic strategy investing in infrastructure and infrastructure- related assets in Asia • 2009 – Launched a global opportunistic strategy tha t invests primarily in tankers, bulkers and container ships • 2011 – Established Junius Real Estate Partners SM , a U.S. higher risk/return real estate investment and management platform • 2011 – Launched an opportunistic real estate strate gy investing in both equity and debt in the U.S. • 2011 – Launched a diversified real assets investmen t program, GRA Omni, which seeks to help investors diversify their portfolio across the various types of real assets (real estate, infrastructure, energy and maritime), geographies a nd risk-return profiles 7. Contact name, phone, and email Michael J. Duignan 212-648-2122 michael.j.duignan@jpmorgan.com 8. Number of stocks in portfolio Not Applicable. JPMCB Strategic Property Fund is a pure core real estate fund that does not invest in stocks. 9. Percent in foreign securities Not Applicable. JPMCB Strategic Property Fund only invests in core real estate in the United States. 10. Maximum percentage allowed in foreign securitie s 0%. JPMCB Strategic Property Fund only invests in real estate in the United States. 11. Breakdown of percentage in large cap, mid and s mall Not Applicable. JPMCB Strategic Property Fund only invests in core real estate in the United States. 12. Breakdown of percentage in growth, value and co re JPMCB SPF follows a pure core strategy, focusing pr imarily on existing high-quality, well-leased assets in the four major property types: office, in dustrial, multi-family and retail, and will not inv est in assets that are not considered “core”, i.e. hosp itality, assisted living, self-storage. 13. Name of portfolio manager, number of years in b usiness and number of years with this portfolio Anne Pfeiffer 38 years of real estate experience 32 years with the firm 13 years with the Strategic Property Fund (since in ception on January 1, 1998) 14. What is your fee? 5 The fee structure for the Strategic Property Fund i s as follows: 100 bps of the account’s pro-rata share of the NAV as of the end of each calendar quarter, except that the fee will only be 0.15% with respect to the market value of cash / cash equivalents in excess of a 7.5% reserve position* for cash / cash equivalents. *7.5% Reserve is calculated on NAV of Fund. There shall be no acquisition or disposition fees, nor any fees charged on debt, either at the asset level or the fund level. Fees shall be computed and billed on a calendar quarter basis, in arrears. 15. Will you acknowledge that you are fiduciary to the fund as defined in ERISA? Yes, J.P. Morgan Asset Management has an extensive compliance program designed to ensure that the firm complies fully with the requirements of ERISA, including the prev ention of conflicts of interest in the management of client assets. We regularly provide our investment personnel with training and education regarding the fiduciary requirements and conflict-of-interest prohibitions of ERISA. Our in-house legal and comp liance staff have expertise and extensive experience in monitoring compliance with ERISA and advising investment personnel on their responsibilities under ERISA. We have adopted and implemented procedures regarding proxy voting, direct brokerage and the use of soft dollar s to ensure compliance with Department of Labor guidelines in these areas. In addition, J.P. Morgan Asset Management has ongoing relationships with outside counsel that has extensi ve expertise and experience with ERISA. 16. Will you agree to execute trades only on a “bes t execution” basis? Yes, we do execute trades in a manner consistent wi th the highest standards required of a fiduciary. We are audited annually to ensure compl iance and the best execution of our monthly and quarterly trades. 17. Will you agree that should we have a dispute it will be governed by Florida law and federal law where applicable and that venue will be in the county where the Board is located? The management of the fund is governed by New York law and federal law. At this time, we are not accepting changes to our standard Participation Agreement which is subject to New York law. 18. Will you agree to a “most favored nations” clau se? We do not wish to accept a most favored nation clau se at this time. 19. Is the fee you’re offering at least as favorabl e for the fund as any that you offer to other institutional clients? The fee that is offered is the standard fee for cli ents invested in Strategic Property Fund. 20. Will you agree that if you invest outside of po licy and a loss is sustained that you will reimburse the fund in the amount of the loss includ ing lost opportunity costs? We do not agree to reimburse any losses (including opportunity costs) sustained if investments are outside of the Fund’s guidelines. The Fund’s g uidelines are portfolio construction guidelines and, from time to time, actual characteristics may deviate from the guidelines due to market forces. The Fund’s guidelines are target allocation ranges and any 6 deviations outside of the stated ranges as a result of market conditions does not result in a violation of the Fund’s investment management agree ment. J.P. Morgan Asset Management will not compensate fo r below-benchmark performance. As with any investment vehicle, there is always the potenti al for gains as well as the possibility of losses. 21. Will you agree to report periodically to the bo ard the quality of corporate governance practices of the companies in which you invest? JPMCB Strategic Property Fund invests in direct rea l estate and we agree to report periodically in regards to the investments held. In general, the client service team will be your pr imary contact and will meet with you to: • Address a client’s specific interests or issues • Provide account positions • Review your portfolio objectives and provide an exp lanation of current investment strategies • Conduct a review of investment transactions and per formance since the last review • Discuss forecasts of future financial and economic environments and their effects on your portfolio J.P. Morgan Asset Management – Global Real Assets i s dedicated to ensuring that our clients receive the information they need to be fully aware of their portfolio's composition and performance. With timeliness, accuracy and meaning ful content as our objectives, we have developed a comprehensive suite of reports, which s hould satisfy many of our clients’ needs. We are mindful that situations may arise, which requir e custom reporting outside the usual reporting process and are willing to discuss individual needs on a case by case basis. The following are the core reports you can expect t o receive, their frequency of distribution, and the time frames in which they are available. We lo ok forward to discussing with your team any specific reporting requests you may have. Standard Reports Monthly •••• Statement of Transactions – shows all the transactions that occurred during the month, referencing both trade and settlement dates; produ ced two business days following month- end •••• Statement of Assets – shows the month-end holdings of all assets withi n the portfolio, including accrued income and pending settlements; produced five business days following month-end •••• Flash Report – shows your portfolio’s month-end market value, p reliminary performance information and market commentary in a one-page, ea sy-to-read format; produced eight to 10 business days following month-end Quarterly The Quarterly Report (unaudited Fund financial stat ements) will include information on the investment process, the market environment, perform ance, sector analysis, portfolio summary, and economic outlook. The report is distributed 45 -50 days following quarter-end. Prior to the release of the quarterly report, J.P. Morgan Asset Management - Global Real Assets provides an abbreviated quarterly review (Snapshot) which includes portfolio composition, portfolio commentary and portfolio performance. Th e Snapshot is delivered via e-mail 10 business days after quarter-end. 7 Annual Same format as the Quarterly Report with Audited Fu nd Financial statements. J.P. Morgan Asset Management - Global Real Assets delivers to Investo rs an Annual Report of the Fund which includes audited annual financial statements (inclu ding a balance sheet and related statements of income, changes in Investors’ capital, and changes in financial position) and a summary of the Fund’s Investments. Produced 60-70 days following the Fund’s fiscal year-end (September 30). 22. Will you agree to attend board meetings quarter ly? We agree to schedule client meetings annually. 23. Will you agree to combine the assets of the two fun ds for fee purposes? (if applicable) If we were to consider combining and prorating asse ts for fee purposes, it would only be for assets invested in the same Fund or Strategy. 8 Insurance 1. Errors & Omission Insurance a. What is the coverage amount? b. What is the deductible amount? c. What is the name of your insurance carrier? JPMorgan Chase & Co. (JPMC) maintains appropriate l evels of insurance on behalf of its affiliates. Provided below is information regardin g this coverage. Bankers Professional Liability* Risks Covered: Loss arising for claims of alleged wrongful acts c ommitted in the performance of professional services. Carriers: Park Assurance Company Levels/Limits : $100,000,000 Deductibles: $25,000,000 Policy Period: January 15, 2011 – January 15, 2012 *Note: Bankers Professional Liability includes Erro rs & Omission insurance. d. Have there been any claims made against this pol icy in the last 2 years? i. Please explain the amount and nature of the clai m e. Have any claims been paid during the past 2 year s? ii. Please explain the amount and nature of the cla im Please note, JPMorgan Chase & Co. considers insuran ce claims confidential information. iii. Have you changed carriers within the past 5 ye ars? i. How many times? ii. Please explain the basis for each change. JPMorgan Chase & Co. has not changed the insurance carriers within past 5 years. 2. Employee Fidelity Bonds a. What are the amounts of the fidelity bonds for y our employees? ERISA Bond (In compliance with Section 412) Risks Covered: Protection to any plan for which the insured manag es funds or other property in compliance with Section 412 of ERISA . Covers any employee of the insured who handles assets of any m anaged ERISA trust or plan. Carriers: Vigilant Insurance and other companies Levels/Limits: 10% of plan assets subject to a maximum of $500,00 0 and minimum of $1,000 per plan. In the case of a plan that holds e mployer securities (within the meaning of section 407(d)(1)), $1,000,0 00 is substituted for $500,000. Policy Period: March 1, 2011– March 1, 2012 9 b. Have any claims been made or paid during the pas t 2 years? As mentioned previously, JPMorgan Chase & Co. consi ders insurance claims confidential information. 3. General Liability Insurance a. What is the coverage amount? b. What is the deductible amount? c. What is the name of your insurance carrier? Financial Institution Bond & Computer Crime (Banker s Blanket Bond Form 24 [Amended]) Risks Covered: Loss of money/securities plus other properties res ulting from employee dishonesty, robbery, burglary, or mysterious disapp earance; loss of accepting forged or counterfeit checks and securiti es; a third-party interloper who accesses a computer or telex communication line and modifies or creates a message that results in a loss where JPMo rgan Chase is held liable. Carriers: Park Assurance Company Levels/Limits: $300,000,000 Deductibles: $25,000,000 Policy Period: July 1, 2011 – July 1, 2012 d. Have there been any claims made against this pol icy in the last 2 years? i. Please explain the amount and nature of the clai m e. Have any claims been paid during the past 2 year s? ii. Please explain the amount and nature of the cla im As mentioned previously, JPMorgan Chase & Co. consi ders insurance claims confidential information. f. Have you changed carriers within the past 5 year s? i. How many times? ii. Please explain the basis for each change. JPMorgan Chase & Co. has not changed the insurance carriers within past 5 years. 10 Legal Matters 1. Please state whether you will agree to an attorn ey’s fee provision. At this time, we are not accepting language outside our standard Participation Agreement. 2. In a management contract, would you ask for inde mnification? Our standard Participation Agreement does include I ndemnity and Liability clauses. 3. Can you use a side-letter to address any specifi c issues raised above? At this time, we are not accepting language outside our standard Participation Agreement. Research 1. How do you obtain your research (in-house or thi rd party)? What percentage of research is generated internally? Over 90% of our research is generated internally. Real estate research information advantage. Our dedicated, in-house research team specializes in real estate capital markets analysis and portfolio strategy. This team works directly with acquisitions and portfolio management to understand current and projected macroeconomic, employment and demographic trends an d the best buy/sell opportunities. This research coverage allows us to build an inform ation advantage that enables us to produce outstanding results over reasonable investm ent horizons. Firm-wide information advantage. We have the ability to leverage broader firm resour ces such as: • Equity and credit analysts that follow the major U.S. industries, providing insight on future strengths and weaknesses of major companies, their impact on geographic regions and real estate property sectors • Capital markets experts and economists who cover th e strategic direction of the U.S. economy (e.g., interest rates, income, GDP) • Global research analysts that provide us with data regarding the impact of international and emerging markets on the U.S. economy and real e state markets The Real Estate Research Group utilizes a number of outside data sources, including: • Axiometrics • Torto Wheaton • Moody’s Analytics – Economy.com • REIS • Real Capital Analytics • Seaglex • Smith Travel Research Rosen Consulting Group • Lodging Development • GIS Dynamics • Costar • Demographics Now • NCREIF Additional Data 11 • Claritas The Research Group uses this information and its pr oprietary models to rank markets and property types for both fundamental conditions and risk. This information is, in turn, used to establish portfolio diversification and risk contro l guidelines. 2. Please describe how your firm obtains and pays f or outside research reports. We have a dedicated research budget (independent of fund-level expenses) used for obtaining third-party research that is used in conj unction with our own internal proprietary research. 3. Please name the three primary sources of data an d/or analyses upon which your firm relies. The majority of our research is sourced and conduct ed internally leveraging various firm resources including equity/credit analysts, capital markets experts, and global research analysts. Primary sources of independent third-par ty research include the sources listed in question #1. The three most highly used external s ources of research are Moody’s Analytics – Economy.com, Axiometrics, and Torto Wheaton. 12 Other 1. How many clients, public fund clients, and asset s do you manage in Florida? As of September 30, 2011, J.P. Morgan Asset Managem ent has 30 public DB plan clients based in Florida with a total AUM of $863.4 million . As of September 30, 2011, Strategic Property Fund h as 19 total clients (18 public fund clients) based in Florida (Fund has a total of 273 clients and 307 accounts). Strategic Property Fund partially or fully owns 47 properties located in Florida ($1,304MM GAV; $840MM NAV). 2. Please give the percentage breakdown of all your clients that are public funds, foundation/endowments, HNW, corporate, etc.? Please refer below the percentage breakup of client s: As of September 30, 2011 for J.P. Morgan Asset Mana gement Client Type Accounts (%) Corporate Retirement 37.83 Public Retirement 9.01 Union 3.04 Endow/Foundation 3.72 Reserve Mgmt. 14.16 Sub Advisory 6.31 Private Client Mutual Fund 14.33 Other 11.60 Total 100% *Private Client accounts are not available for disc losure. The Strategic Property Fund is available only to ER ISA qualified clients; including pension trusts, profit sharing trusts, and other qualified employee benefit trusts. As of September 30, 2011 for JPMCB Strategic Proper ty Fund Client Type # of Clients Market Value % of Fund Corporate Retirement 124 $6,156,894,415 41.6 Public Retirement 90 $6,739,661,055 45.5 Union 59 $1,916,008,323 12.9 Total 273 $14,812,563,793 100 3. Please discuss any departures or additions to th e investment team (specific to this portfolio) over the previous 8 years. The amount of personnel turnover is consistent with our goal of carefully managing growth while ensuring that the highest quality and most co mpetent professionals are in their correct jobs. Although individual contributions are critica l to our success in delivering results for our clients, our team approach to managing portfolios i s designed to 13 ensure consistency of performance and continuity of client service, even when individuals may join or leave the firm. • In April 2011 , James Walsh, Head of Asset Management for Real Es tate Americas, announced his retirement from the firm. In anticip ation of James' departure in 2012, James will transition his responsibilities to Mark Bonapace, current head of office/industrial asset management in the U.S. East region. Mark brings 20 years of experience at the firm and deep expertise in all as pects of asset management in all property sectors. James and Mark have worked closel y together for over 15 years and our deliberate pace of transition into 2012 will en sure a seamless hand off. We have complete confidence in Mark's talent and ability to continue James' strong leadership of our asset management team. • In May 2010 , Michael Giliberto, Director of Portfolio Strategy , retired. Anne Pfeiffer, who is a Managing Director, portfolio manager of the JP Morgan Strategic Property Fund, and former president of NCREIF became Director of U.S. Real Estate Commingled Funds. The portfolio managers of our U.S. commingled funds will now report to Anne. She is uniquely suited to the role of player/coach given h er experience as the portfolio manager of the largest U.S. core real estate fund, and a fo rmer head of the Finance Group, senior asset manager and acquisitions officer. Of course, Anne will still devote substantially all of her energies to Strategic Property Fund and cont inue to set the standard of excellence in her role as portfolio manager. Dave Esrig, Dire ctor of U.S. Real Estate and Infrastructure Research, assumed Michael’s real est ate capital markets research responsibilities, while continuing to lead the rese arch team in forecasting local economic performance and real asset fundamentals in support of acquisitions, dispositions and portfolio strategy development. • In October 2009 , Michael P. Kelly was hired as the head of Debt Ca pital Markets Group for Global Real Assets and senior workout portfolio manager. Michael is responsible for procuring debt for J.P. Morgan Asset Management's a ssets as well as advising clients on problem situations. Before joining the firm, he wa s a director and head of Real Estate Conduit and Workouts for Citigroup Global Markets. Previously, Michael was a vice president and originator in the Large Loan CMBS Gro up and assisted with management of Goldman Sachs Commercial Mortgage Capital. Prior to that, he was a managing director and co-head of Commercial Mortgage Origina tion at New York Life Investment Management. He started in the industry in 1989. M ichael earned a B.S. in business management from Springfield College and an M.S. in real estate from New York University and holds FINRA Series 7 and 63 licenses . 14 Disclaimer The Commingled Pension Trust Fund (Strategic Proper ty) of JPMorgan Chase Bank N.A. is a collective trust fund established and maintained by JPMorgan C hase Bank, N.A. under a declaration of trust. The Fund is not required to file a prospectus or regist ration statement with the SEC, and accordingly, nei ther is available. The Fund is available only to certai n qualified retirement plans and governmental plans and is not offered to the general public. Units of the Fund are not bank deposits and are not insured or guaranteed by any bank, government entity, the FDIC or any other type of deposit insurance. You shoul d carefully consider the investment objectives, risk, charges, and expenses of the fund before investing . The manager seeks to achieve the stated objectives. There can be no guarantee those objectives will b e met. This material is intended to report solely on the i nvestment strategies and opportunities identified b y J.P. Morgan Asset Management. Additional information is available upon request. Information herein is believed to be reliable but J.P. Morgan Asset Manag ement does not warrant its completeness or accuracy. Opinions and estimates constitute our ju dgment and are subject to change without notice. Past performance is not indicative of future result s. Total return assumes the reinvestment of income . Indices are not available for actual investment and provided for illustrative purposes only. The mate rial is not intended as an offer or solicitation for the pu rchase or sale of any financial instrument. J.P. M organ Asset Management and/or its affiliates and employee s may hold a position or act as market maker in the financial instruments of any issuer discussed herei n or act as underwriter, placement agent, advisor o r lender to such issuer. The investments and strateg ies discussed herein may not be suitable for all investors; if you have any doubts you should consul t your J.P. Morgan Asset Management Client Adviser, Broker or Portfolio Manager. The material is not i ntended to provide, and should not be relied on for , accounting, legal or tax advice, or investment reco mmendations. You should consult your tax or legal adviser about the issues discussed herein. Indice s do not include fees or operating expenses and are not available for actual investment. The investmen ts discussed may fluctuate in price or value. Inv estors may get back less than they invested. Changes in r ates of exchange may have an adverse effect on the value, price or income of investments. Real estate investing may be subject to a higher de gree of market risk because of concentration in a specific industry, sector or geographical sector. R eal estate investing may be subject to risks includ ing, but not limited to, declines in the value of real e state, risks related to general and economic condit ions, changes in the value of the underlying property own ed by the trust and defaults by borrower . J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. and its affiliates worldwide. Those businesses include, but are not limited to, JPMorgan Chase Bank, N.A., J.P. Morgan Investment M anagement Inc., Security Capital Research & Management Incorporated, and J.P. Morgan Alternativ e Asset Management, Inc. Investment Advisory services provided by J.P. Morgan Investment Managem ent Inc. © Copyright 2011 JPMorgan Chase & Co. J.P. MORGAN 9.00AM TO 9.30AM AMERICAN REALTY 9.30AM TO 10.00AM Personality Next Capital Call Fees Quarterly Meetings The Managers have been asked to keep their proposal to 20 minutes with 10 minutes for questions NOTES : TOTAL This finals presentation will introduce to the Board two (2) Investment Managers seeking to invest approximately $5M in their Real Estate Fund The following ratings sheet may help the individual Board members make their decision. A score of 0 (unfavorable answer) to 5 (favorable answer) may be used. Number of Properties in Portfolio Liquidity AMERICAN Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 Leverage QUESTIONNAIRE ASSESSMENT JP MORGAN CANDIDATE PRODUCT LOCATION FIRM AGE OF PARENT TOTAL FIRM CONTACT INCEPTION COMPANY COMPANY ASSETS ($ Mil) American Realty Real Estate Glendale, CA 1988 23 American Realty $3,441 Ms. Joyce Ezaki Advisors Advisors (818) 409-3280 JP Morgan Chase & Co. SPF New York, NY 1984 27 JP Morgan Chase & Co. $1,219,352 Ms. Susan Oh (212) 648-1564 Page 1 Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 As of June 30, 2011 SORTED BY 3 YEARS RETURN RISK MANAGER NAME SCORE FUND CURR.1 YEAR 3 YEARS 4 YEARS 3 YEAR 4 YEAR QTR.ST.DEV.ST.DEV. NCREIF 9 PROPERTY INDEX 3.94%16.73%-2.57%0.25%8.87%8.14% JP MORGAN 6 SPF 5.33%18.92%-6.22%-2.53%11.92%10.91% AMERICAN REALTY 3 CORE EQUITY 3.83%17.65%-8.00%-3.68%11.86%11.05% Page 2 Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 RETURN Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 SORTED BY 4 YEARS RETURN RISK MANAGER NAME SCORE FUND CURR.1 YEAR 3 YEARS 4 YEARS 3 YEAR 4 YEAR QTR.ST.DEV.ST.DEV. NCREIF 12 PROPERTY INDEX 3.94%16.73%-2.57%0.25%8.87%8.14% JP MORGAN 8 SPF 5.33%18.92%-6.22%-2.53%11.92%10.91% AMERICAN REALTY 4 CORE EQUITY 3.83%17.65%-8.00%-3.68%11.86%11.05% Page 3 RETURN Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 SORTED BY 3 YEARS RISK RISK MANAGER NAME SCORE FUND CURR.1 YEAR 3 YEARS 4 YEARS 3 YEAR 4 YEAR QTR.ST.DEV.ST.DEV. NCREIF 9 PROPERTY INDEX 3.94%16.73%-2.57%0.25%8.87%8.14% AMERICAN REALTY 6 CORE EQUITY 3.83%17.65%-8.00%-3.68%11.86%11.05% JP MORGAN 3 SPF 5.33%18.92%-6.22%-2.53%11.92%10.91% Page 4 RETURN Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 SORTED BY 4 YEARS RISK RISK MANAGER NAME SCORE FUND CURR.1 YEAR 3 YEARS 4 YEARS 3 YEAR 4 YEAR QTR.ST.DEV.ST.DEV. NCREIF 12 PROPERTY INDEX 3.94%16.73%-2.57%0.25%8.87%8.14% JP MORGAN 8 SPF 5.33%18.92%-6.22%-2.53%11.92%10.91% AMERICAN REALTY 4 CORE EQUITY 3.83%17.65%-8.00%-3.68%11.86%11.05% Page 5 RETURN Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 SORTED BY 1 YEAR RETURN RISK MANAGER NAME SCORE FUND CURR.1 YEAR 3 YEARS 4 YEARS 3 YEAR 4 YEAR QTR.ST.DEV.ST.DEV. JP MORGAN 6 SPF 5.33%18.92%-6.22%-2.53%11.92%10.91% AMERICAN REALTY 4 CORE EQUITY 3.83%17.65%-8.00%-3.68%11.86%11.05% NCREIF 2 PROPERTY INDEX 3.94%16.73%-2.57%0.25%8.87%8.14% Page 6 RETURN Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 SORTED BY QUARTER RETURN RISK MANAGER NAME SCORE FUND CURR.1 YEAR 3 YEARS 4 YEARS 3 YEAR 4 YEAR QTR.ST.DEV.ST.DEV. JP MORGAN 3 SPF 5.33%18.92%-6.22%-2.53%11.92%10.91% NCREIF 2 PROPERTY INDEX 3.94%16.73%-2.57%0.25%8.87%8.14% AMERICAN REALTY 1 CORE EQUITY 3.83%17.65%-8.00%-3.68%11.86%11.05% Page 7 RETURN Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 SORTED BY 4 YEAR INFORMATION RATIO RISK MANAGER NAME SCORE FUND CURR.1 YEAR 3 YEARS 4 YEARS 3 YEAR INFO. QTR.ST.DEV.RATIO NCREIF 9 PROPERTY INDEX 3.94%16.73%-2.57%0.25%8.87%0.00% JP MORGAN 6 SPF 5.33%18.92%-6.22%-2.53%11.92%-0.76% AMERICAN REALTY 3 CORE EQUITY 3.83%17.65%-8.00%-3.68%11.86%-0.92% Page 8 RETURN Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 SORTED BY FEES RISK MANAGER NAME SCORE FUND CURR.1 YEAR 3 YEARS 4 YEARS 3 YEAR FEES* QTR.ST.DEV.(b.p.'s) JP MORGAN SPF 5.33%18.92%-6.22%-2.53%11.92%100.00 AMERICAN REALTY CORE EQUITY 3.83%17.65%-8.00%-3.68%11.86%110.00 NCREIF PROPERTY INDEX 3.94%16.73%-2.57%0.25%8.87%N/A Page 9 RETURN MANAGER NAME TOTAL 4 YEAR 4 YEAR SCORE 2010 2009 2008 2007 2006 CAPTURE RATIO DIFF. NCREIF 55 13.11%-16.86%-6.46%15.84%16.59%100/100 0 JP MORGAN 40 14.15%-26.55%-8.09%16.67%16.60%110/144 -34 AMERICAN REALTY 25 11.21%-29.99%-5.29%17.24%11.04%102/152 -50 Page 10 CALENDAR YEAR RETURNS SCORE ANALYSIS Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 4 YEARS 4 YEAR 3.94%16.73%-2.57%0.25%8.87%8.14% 5.33%18.92%-6.22%-2.53%11.92%10.91% 3.83%17.65%-8.00%-3.68%11.860%11.05% 4 YEARS SORTED BY 3 YEARS RISK 4 YEARS 4 YEAR 3.94%16.73%-2.57%0.25%8.87%8.14% 3.83%17.65%-8.00%-3.68%11.860%11.05% 5.33%18.92%-6.22%-2.53%11.92%10.91% 3.20%10.53%-10.89%-5.84%18.650%16.85% SORTED BY 4 YEARS RISK 4 YEARS 4 YEAR 3.94%16.73%-2.57%0.25%8.87%8.14% 5.33%18.92%-6.22%-2.53%11.92%10.91% 3.83%17.65%-8.00%-3.68%11.860%11.05% 3.20%10.53%-10.89%-5.84%18.650%16.85% Page 5 SORTED BY 1 YEAR RETURN 4 YEARS 4 YEAR 5.33%18.92%-6.22%-2.53%11.92%10.91% 3.83%17.65%-8.00%-3.68%11.860%11.05% 3.94%16.73%-2.57%0.25%8.87%8.14% 3.20%10.53%-10.89%-5.84%18.650%16.85% Page 6 4 YEARS 4 YEAR 5.33%18.92%-6.22%-2.53%11.92%10.91% 3.94%16.73%-2.57%0.25%8.87%8.14% 3.83%17.65%-8.00%-3.68%11.860%11.05% 3.20%10.53%-10.89%-5.84%18.650%16.85% Page 7 SORTED BY 4 YEAR INFORMATION RATIO Page 11 Palm Beach Gardens Police Manager Search - Real Estate December 8, 2011 -4 4 -4 4 RE T U R N RISK RISK/REWARD 4 YEARS TRAILING AMERICAN REALTY JP MORGAN NCREIF Good Aggressive Bad Conservative MANAGER NAME FUND 4 YEARS NCREIF 4 YEAR NCREIF RETURN DIFFERENCE ST.DEV.DIFFERENCE AMERICAN REALTY EQUITY REAL ESTATE -3.68 0.25 -3.93 11.05 8.14 2.91 JP MORGAN SPF -2.53 0.25 -2.78 10.91 8.14 2.77 NCREIF PROPERTY INDEX 0.25 0.25 0.00 8.14 8.14 0.00 Page 12 4 YEAR RETURN VS. RISK December 8, 2011 Palm Beach Gardens Police Manager Search - Real Estate