EFTA00615013.pdf

Project Cosmo Discussion Materials Proprietary and Confidential Discussion Materials April 2015 OH I C-III Capital Partners PROPRIETARY 8 CONFIDENTIAL EFTA00615013 Cushman & Wakefield Overview ■ Founded in 1917, Cushman & Wakefield ("C&W") is a leading commercial real estate services firm ■ C&W is a global platform operating in 58 countries with 248 offices and has more than 16,000 employees and professionals worldwide ■ C&W has established business segment operations focused on Leasing, Corporate Occupier & Investor Services, Capital Markets, Valuation & Analysis and Consulting ■ The platform lacks critical product offerings to elevate its standing in the marketplace including Investment Fund Management and Lending, and also requires a materially improved Capital Markets platform ■ The C&W brand and broker morale suffered under prior leadership, but the recent market recovery and CEO change in 2013 have steadied the platform ■ A successful turnaround will require a repositioning of the company to gain momentum and turbocharge recruiting efforts A combination with C-111 would provide a major change in the C&W story to both potential clients and brokerage talent by rejuvenating the brand through expanded product offerings and leadership credibility of C-III Capital Partners PROPRIETARY & CONFIDENTIAL 1 EFTA00615014 C-III / Island Can Provide The Compelling "Story Shift" and Executive Expertise A 23-Year History of Capitalizing on Opportunities and Creating Value CHAPTER I: 2003: Insignia merges remaining CRE services businesses with CBRE 1990: Insignia is founded 2003: Insignia sells Doug as Elliman to Prudential 1998: Insignia sells its multifamily businesses to AIMCO January 1990 — July 2003 1993: Insignia structures the first rated non-cross collateralized non- cross defaulted multifamily securitization I 1993: Ins gnia goes public on NYSE with ticker symbol IFS 1996: Insignia becomes the largest owner/manager of multi-family housing in the U.S., with more than 350,000 units 1996: Insignia acquires the Edward S. Gordon Company Cla 2003: Island Capital is founded 2003: Island Fund I formed 2008: Island Fund III is formed 2005: Island Global Yachting is founded July 2003 — February 2010 Notable Transactions with Government of Dubai: ENSeC Co-Investments 230 Park Avenue 450 Lexington Avenue W Hotel — Union Square Mandarin Oriental NYC Asset Management/Advisory 280 Park Avenue Snowmass, Colorado Grand Avenue. Los Angeles 2010: Island Capital recapitalizes Centerline Holding Co. and creates C-Ill. which acquired Centerline's loan servicing and fund management businesses CHAPTER III: 2011: C-Ill acquires loan servicing and CDO management businesses from JER 2011: Ztide commences operations 2013: C-Ill acquires Real Capital Markets March 2010 - Present 2010: C-Ill Commercial Mortgage is founded 2011: C-Ill acquires U.S. Residential Group 2010: C- II Realty Services commences operations 2012: C-III acquires NM Global 2015: C-Ill acquires PZR Oil C-III Capital Partners PROPRIETARY 8. CONFIDENTIAL 3 EFTA00615015 C-III Capital Partners Creation of a Fully Integrated Real Estate Company in Under Five Years Investments Finance and Administration Commercial Mortgage Servicing Diversified Real Estate Services C-III Capital Partners Investment Management Commercial Real Estate Lending Off I C-III Capital Partners 4 PROPRIETARY & CONFIDENTIAL EFTA00615016 Creating A Global Real Estate Services, Investment Management and Credit Platform Without Equal Leasing / Consulting Corporate Occupier & Investor Svcs ("CIS") Capital Markets Valuation & Advisory ("V&A") • • • Landlord Representation Tenant Representation Industrial Leasing • • • Account Management Transaction Management Lease Administration • • Investment Sales & Acquisitions Equity. Debt & • • • Appraisal Appraisal Management Dispute Analysis & • Transaction Consulting • Facilities Management Structured Finance Litigation Support ar L) Core Services • • Retail Leasing Global Supply Chain • Agency / Landlord • Leasing Corporate Finance & Investment Banking • • Portfolio Valuation Property Tax Services Solutions • Property / Asset Mgt • FINRA Broker / Dealer • Valuation For Financial • Global Consulting & • Risk Management Reporting Specialty Practice • Project Management Specialty Practices Groups Employees Core Services Employees 3.158 Commercial Mortgage Servicing 1.188 Commercial Real Estate Lending 646 Investment Management 844 Diversified Real Estate Services • Special Servicing • Fixed Rate Lending • Real Estate Equity Funds • C-Ill Realty Services • Portfolio Oversight • Floating Rate Lending (incl. Fair Value • Real Capital Markets • Primary Servicing • Conduit & Balance Sheet Purchase Option) • USRG • Real Estate Debt Funds • NM • Zodiac Title • PZR 174 16 22 167 Ott I C-III Capital Partners 5 PROPRIETARY 8 CONFIDENTIAL EFTA00615017 Platform with Tremendous US Market Depth and Strong Global Reach C&W 248 0ffx• S8 Courts • C-III CAPITAL PARTNERS • • • • • • • • •• t Cyst. O •• 7 • 4 • • • •• • • s• • Offices 248 Offices") 406 Employees 16,468 Employees 1,300 a . • , , fe-4 to, e • •• O) Includes II corporate offices, 20 USRG regional locations and 375 NAI member offices. OR I C-III Capital Partners PROPRIETARY & CONFIDENTIAL 6 EFTA00615018 Tremendous Synergy Opportunities Revenue Synergy Opportunities ■ Incremental leasing and investment sales fee capture from special servicing resolutions ■ Strategic capital deployment plan will require a compelling change in talent attraction dynamics ■ Sizeable lending opportunity / expansion via C&W client base ■ Investment Management AUM expansion • Far reaching product expansion with C&W property management and leasing expertise • C-III can raise material additional capital from existing investors with C&W capabilities ■ USRG, NAI & RCM business expansion opportunities could prove material Key Participants C-III Asset Mgt, C-III Realty, C&W C-III Executive Leadership, C-III Asset Mgt Volumes C-III Commercial Mortgage, C&W C-III Investment Mgt, C&W USRG, NAI, RCM, C&W Expense Synergies ■ Real estate cost savings through office consolidation ■ Compensation cost savings through relocation and rehiring of selected functions ■ Executive level cost saving opportunities ■ Corporate back office rationalization opportunities ■ NAI cost savings Note: Confirmation of anticipated synergies will require diligence access not yet available to C-Ill. OH C-III Capital Partners PROPRIETARY & CONFIDENTIAL 7 EFTA00615019 Pro Forma Financial Overview $ in millions Reference 3.0% Growth/Margin Constant 2H2015E I 2016E 2017E 2018E C&W Adjusted EBITDA A $98.5 $255.7 $310.2 $319.5 $329.1 C-Ill EBITDA B 32.9 117.1 195.5 322.1 206.5 Revenue Synergy Benefits 12.5 25.0 25.0 25.0 25.0 Cost Synergy Benefits 12.5 25.0 25.0 25.0 25.0 Proforma Company FB1TDA $156.4 $422.8 $555.7 $691.6 $585.6 Less: Interest Expense C (47.2) (94.4) (90.9) (87.4) (87.4) Proforma Company EBTDA $109.1 $328.4 $464.8 $604.2 $498.2 Less: C&W Cap Ex D (137.5) (137.0) (104.0) (50.0) (50.0) Less: C-III Cap Ex (Bond Investments) E (8.0) (9.0) (8.0) 0.0 0.0 Plus: C&W Share-Based Compensation 4.0 8.5 8.3 8.6 8.8 Plus: C-III Bond Cash Flow F 19.7 36.6 25.3 32.4 21.2 Plus: C-111 1M Other ('ash Flow C 0.6 1.4 1.7 18.5 1.4 Proforma Conmany Pre-Tax Operating Cash How ($12.0) $228.8 $388.1 S613.6 $479.6 Cp C-III Capital Partners PROPRIETARY & CONFIDENTIAL 8 EFTA00615020 C&W Financial Projections Summary $ in millions 2014 I 2015 I 2016 I 2017 I 2018 I 2019 14.'17 CAGR Leasing Brokerage $739.6 I $797.0 $845.3 $911.1 7.2% Capital Markets 187.8 304.0 372.6 405.3 29.2% Corporate Occupier & Inv. Services 394.5 I 436.1 458.6 493.9 7.8% Valuation & Advisory 136.8 I 160.2 178.4 193.8 12.3% Consulting 6.1 9.0 10.8 12.3 26.2% Americas Total Rewnue $1,46-1.8 I 51,706.2 51.865.6 52.016.3 52,076.8 $2,139.1 11.2% EMTA Leasing Brokerage $156.8 $156.5 5180.4 5197.5 8.0% Capital Markets 100.9 108.9 148.2 173.2 19.7% Corporate Occupier & Inv. Services 130.3 132.3 160.5 177.0 10.7% Valuation & Advisory 56.4 57.1 66.4 73.6 9.3% Consulting 14.2 12.7 13.7 15.1 2.0% E\IFt Total Rewnue $458.6 I $467.5 $5693 $636.3 $655.4 $675.1 11.5% Leasing Brokerage $59.0 $64.2 S86.0 $99.9 19.2% Capital Markets 21.1 31.4 41.9 49.8 33.3% Corporate Occupier & Inv. Services 799 89.9 107.0 122.2 15.2% Valuation & Advisory 9.2 10.1 16.0 22.6 34.8% Consulting :.6 I 3.6 4.4 4.9 11.2% APAC Total Rewnue $172.8 1 $199.2 $255.3 $299.5 $308.5 $317.8 20.1% C&W Total Rewnue $2,096.1 $2,372.9 $2,690.2 $2,952.1 $3,040.7 $3,131S 12.1% Note: 2014.2017 C&W projections received from management and presented without adjustment: 2018-2019 projections assume a constant growth rate and margin. OB C-III Capital Partners PROPRIETARY & CONFIDENTIAL 9 EFTA00615021 C&W Financial Projections Summary $ in millions 2014 2015 2016 I 2017 2018 2019 C&W Revenue $2,096.1 I $2,372.9 $2,690.2 $2,952.1 $3,040.7 $3,131.9 Commissions and Cost of Sales $933.5 I $1,055.9 $1,140.3 $1,239.8 % of Revenue 44.5% i 44.5% 42.4% 42.0% Net Resenue $1,162.6 $1,317.1 $1,549.9 $1,712.3 % Margin 55.5% 55.5% 57.6% 58.0% Operating Expenses $863.9 1 $974.8 $1,116.1 $1,201.8 % of Revenue 41.2% I 41.1% 41.5% 40.7% Incentive Plan & Other Expenses $126.0 $145.4 $178.1 $200.3 % of Revenue i 6.0% 6.1% 6.6% 6.8% FB1TDAf11 $172.7 1 $196.9 $255.7 $310.1 $319.4 $329.0 % Margin 8.2% 83% 9.5%. 10.5% 10.5% 10.5% Note: 2014-2017 Ci&W projections received from management and presented without adjustment; 2018-2019 projections assume a constant growth rate and margin. 1 t1 EB1TDA corresponds to reference "A" on the Proftmna Financial Overview. Of I C-III Capital Partners PROPRIETARY & CONFIDENTIAL 10 EFTA00615022 C-III Financial Projections Summary $ in millions 2112015 2016 2017 2018 2019 C-HIEBIIDA C-Ill Asset Management $24.8 $92.0 $157.9 $227.3 $154.8 C-HI Commercial Mortgage 9.0 21.2 22.7 24.2 24.7 C-III Realty Services 7.1 23.9 40.5 71.4 38.6 RCM (@, 80%) 2.9 8.4 13.8 23.9 14.8 U.S. Residential Group 1.2 23 3.0 3.5 4.0 NAI Global 2.0 4.4 4.8 5.1 5.4 Zodiac Title 0.5 1.5 2..2 3.1 1.9 Investment Management (1.2) (6.3) (0.9) (1.9) (2.8) Business Line EBITDA $463 $147.8 $244.0 $356-5 $241.4 Corporate Accounting ($0.7) ($1.5) ($1.6) ($1.7) ($1.8) Executive Administration (7.2) (18.1) (21.0) (21.2) (21.3) Corporate Overhead ($7.9) ($19.6) ($22.6) ($22.9) ($232) Business Contribution $38.4 $1282 $2213 $333.6 $2182 Management Fees ($2.5) ($8.9) ($20.9) ($35.5) ($21.5) Less: Management Fee Adjustment 0.0 3.9 15.9 30.5 16.5 Adjusted Management Fee ($2.5) ($5.0) ($5.0) ($5.0) ($5.0) Placement Fees $0.0 $0.0 ($14.5) $0.0 $0.0 Investment Banking Group (1.1) (2.3) (23) (2.4) (2.5) Bond Evaluation Group (1.9) (3.8) (4.0) (4.1) (4.2) Total Parent Bcpenses ($5.5) ($11.1) ($25.8) ($11.5) ($11.7) " 2.9 l'; I EBITDA corresponds to reference "B" on the Proforma Financial Overview. Of I C-III Capital Partners 11 PROPRIETARY & CONFIDENTIAL EFTA00615023 C-III Financial Projections Summary $ in millions 2H2015 2016 2017 2018 2019 &HI Cap Esc (Bond Investments) Defensive Bond Acquisition Expenditures $5.0 55.0 55.0 S0.0 S0.0 Offensive Bond Acquisition Expenditures 3.0 4.0 3.0 0.0 0, Bond Cash Flows - Currently Owned Bonds $11.4 $15.5 517.S S I s.6 Incremental Cash Flow From Defensive Bond Purchases $0.8 $4.5 $3.4 52.3 50.4 Incremental Cash Flow From Offensive Bond Purchases 0.7 3.5 2.4 1.1 0.0 Bond Cash Flows - Incremental Bonds Acquired $1.5 $8.0 $5.8 $3.5 $0.4 Bond Cash Flows - TIAA $6.9 $13.2 51 .8 510. SI I . I `I) Total Bond Investments corresponds to reference "E" on the Proforma Financial Overview. (2) Total C-Ill Bond Cash Flow corresponds to reference "F" on the Proforma Financial Overview. O1 I C-III Capital Partners 12 PROPRIETARY & CONFIDENTIAL EFTA00615024 C-III Financial Projections Summary $ in millions 2112015 2016 2017 2018 2019 GIQ imestment Management Other Cash Flow Payment of C3IM Pronx8e (Cash Portion) Sponsored Equity & Debt Funds - Current Income $o 0.4 ).9 I I Total GIll imeshnent Management Other Cash Hovel) $0.6 $1.4 $1.7 $18.5 S1.4 'n Investment Management Other Cash Flow corresponds to reference "G" on the Profortna Financial Overview. O1 I C-III Capital Partners 13 PROPRIETARY & CONFIDENTIAL EFTA00615025 Pro Forma Debt Assumptions S in millions Assumed Debt Summary _Aafl Amount Assumed Rate Coupon Maturity Lewraget2) C&W 1st Lien TLB $795.0 5.25% (1) L+400-425 bps 7 yrs. 2.58x CALI TLB 400.0 6.20% 3.88x C&W 2nd Lien TLB 220.0 9.50% (1) L+800-825 bps 8 yrs. 4.60x C-III Northstar Loan 50.0 14.00% 4.76x Total Debt/Merage IR $1,465.0 6.45% Annual Interest Expense $94.4 Debt Cash nous 2H 2015 2016E 2017E 2018E 2019E C&W 1st Lien TLB $20.9 $41.7 $41.7 $41.7 $41.7 CALI TLB 12.4 24.8 24.8 24.8 24.8 C&W 2nd Lien TLB 10.5 20.9 20.9 20.9 20.9 Norths tar than 3.5 7.0 3.5 0.0 0.0 Total Interest Expense (3) $47.2 $94.4 $90.9 $87.4 $87.4 (1) Loan yields assume OID is discounted across a four year average life. (2) Based on a combined C&W and C-111 Proforma LTM 6/30/15 EBITDA of $307.8nun. (3) Total Interest Expense corresponds to reference "C" on the Proforma Financial Overview. O1 C-III Capital Partners PROPRIETARY & CONFIDENTIAL 14 EFTA00615026 C&W CapEx Summary $ in millions 2014A 2015E 2016E 2017E 2018E 2019E 2015-2017] Information Technology $26.0 I $46.0 $27.0 $27.0 $100.0 Data Initiative 0.0 8.0 10.0 13.0 31.0 Leasehold and FF&E 7.0 I 36.0 17.0 7.0 60.0 Broker Retention 1.0 I 59.0 11.0 10.0 80.0 Broker Acquisition 12.0 63.0 45.0 19.0 127.0 Acquisitions 74.0 I 64.0 28.0 29.0 121.0 Total Capital Expenciture(i) $120.0 I $276.0 $138.0 $105.0 $50.0 $50.0 $519.0 Note :2018 and 2019 Capital Expenditures are an estimate and will be confirmed upon farther diligence. (1) Total Capital Expenditure corresponds to reference "D" on the Profonna Financial Overview. O1 I C-III Capital Partners PROPRIETARY & CONFIDENTIAL 15 EFTA00615027