CALLAN ASSOCIATES, INC.

DUE DILIGENCE QUESTIONNAIRE

INSTRUCTIONS

Please complete this investment due diligence questionnaire with current information unless otherwise specified. All
information should be as of March 31, 2016. Information should be focused on the organization and private real estate
debt assets.

PLEASE ANSWER EACH QUESTION COMPLETELY. DO NOT ANSWER A QUESTION BY REFERRING TO

ANOTHER DOCUMENT OR ANOTHER QUESTION.

The investment due diligence questionnaire includes the following parts:

 This word document (Callan RE Debt Due Diligence Questionnaire 201606017.docx)
 Accompanying excel workbook with multiple tabs (Callan RE Debt Performance Request 20160617.xlsx)
 Instructions to input prior fund cash flows directly into the Callan database (do not wait to begin this process).
o Please contact Kevin Nagy ([email protected]) for assistance

A complete response to the Callan Due Diligence Questionnaire includes the following and all items must be submitted on
or before the due date of July 15 at 4:30 pm CST.
 The completed and signed word document
 Additional word documents as requested in this DDQ.
 A PDF of the word document(s) and all appendices with a table of contents
 The completed excel workbook submitted as an excel file
 Submission of prior fund cash flows to the Callan database

All files should include your firm name. For example: Manager XYZ CTPF Debt Search Response July xx 2016.docx.

Please note that there are other parts to the CTPF Request for Proposal that need to be completed and submitted by
respondents. These are outlined CTPF Request for Proposal document.

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Contact Information:

Firm:
Product:
Date:
Firm Address:

Primary Contact:
Title:
Address:
Phone:
Email:
Fax:

All statements, information and representations made by my firm to Callan during the Evaluation Process are
complete and accurate and reflect all the information that would be deemed relevant by a prudent investor.
These statements, information and representations include, but are not limited to, the representation that our
track record is complete and accurate and reflects all investments made by and vehicles sponsored by the
current/prior team. For purposes of this questionnaire, “Evaluation Process” means all information and
documentation provided by my firm in connection with Callan’s evaluation including our introductory letter,
responses to the due diligence questionnaire provided by Callan and related materials, and information provided
in onsite meeting(s), subsequent conversations and requests until the date of Callan’s investment
recommendation to the client.

Authorized Signature: ___________________________

Name (print):
Date:

Knowledge. Experience. Integrity. 2

SECTION I: ORGANIZATION

1. Name of SEC (or other appropriate regulatory agency) registered entity:

2. Main Office Address:
3. Please provide a chart detailing the firm’s organizational structure including how underlying fund economics are
allocated.
4. List the location of all directly related offices, the opening date of the office(s), and indicate whether the office(s) is
used for portfolio management, research, acquisitions, property management, marketing, client servicing or other
functions. If other, please provide a description of functions performed. Following the list, please list offices that have
been closed over the prior five years and indicate the date of original opening, date of closure, function performed and
reason for closure. Include planned office openings and make the appropriate highlights.
Office Location # Employees Opening Date Function

5. Please provide the name, address and contact of your independent auditors or accounting firm. What functions do
the independent auditors and accounting firm provide to your firm?
6. Does your firm have an independent audit department? If yes, please describe their role and the number of
employees in the department. Also please detail relevant reporting lines of the independent audit department.
7. Please provide the date and the results of your most recent internal and external audit. What were the issues and
how were they resolved? Please provide a copy of the auditors’ opinion. Please provide a copy of the management
letter and describe the actions that have been taken in response to the recommendations received.
8. Please name all regulatory registered entities affiliated with the firm and the relationship to the management of the
partnership/fund. Include dates of registration for each entity.
9. Provide a summary of the firm’s lines of business related to real estate investing and management globally, including
a breakdown of public and private real estate assets under management by region.
10. Is your firm registered with the Securities and Exchange Commission? If so, as of what date?
11. Are you currently, or have you ever been, out of compliance with the SEC, DOL or any other regulatory agency? If
yes, please explain and indicate whether any orders or sanctions have been issued against your firm or affiliate.
12. When was your most recent SEC or other regulatory agency inspection or examination? Please provide copies of the
findings from all inspections or examinations within the past five years and highlight any identified deficiencies or
issues. Please provide copies of the management letter and describe the actions that have been taken in response to
the feedback received.
13. Describe the levels of coverage for SEC-required (17g-1), or equivalent regulatory agency-required, bonds, errors and
omissions coverage and any other fiduciary coverage which your firm carries. List the insurance carriers supplying
the coverage, the coverage amount and deductible
14. Have you or has the firm ever answered “yes” to any question in Item 11 – Disclosure Information - Form ADV - Part
I? If so, please provide an explanation.
15. Please describe the status of any outstanding or pending insurance claims.
16. Do you maintain an in-house legal staff?

Knowledge. Experience. Integrity. 3

17. Has your firm or advisory affiliate received any subpoenas or information requests (formal or informal / federal or
state) relating to money management activities that directly or indirectly relate to your management of fund vehicles or
that could be deemed material by a reasonable investor (including market timing and / or late trading in mutual
funds)?
18. Has your firm or any advisory affiliate been the focus of any litigation, investigation (formal and informal / preliminary,
ongoing or resolved) or administrative proceeding (including settlements) relating to money management activities or
other activities that directly or indirectly relate to your management of fund vehicles or that could be deemed material
by a reasonable investor?
19. Has your firm faced litigation or investigation? If yes, provide a detailed explanation and indicate the current status of
proceedings.
20. During the last five years, has any officer or principal of your organization been involved in litigation? If yes, provide a
detailed explanation and indicate the current status of proceedings.
21. Has your firm been subject to allegations from union labor organizations? If so, please describe the properties and
relevant details.
22. Please provide detail on your firm’s responsible contracting policy.
23. Has any regulatory body issued any orders or other sanctions against your firm or any advisory affiliate relating to
money management activities or other activities that directly or indirectly relate to your management of fund vehicles
or that could be deemed material by a reasonable investor?
24. Has your firm been convicted of, or plead guilty to, any felony, misdemeanor or civil enforcement proceedings in the
past ten years? If yes, provide a detailed explanation and indicate the current status of proceedings.
25. Type of firm (check one):
Bank/Trust Co.
Bank Affiliate
Merchant Bank Affiliate
Broker
Broker Affiliate
Joint Venture
Investment Bank Affiliate
Group Trust
Insurance Company
Affiliate
Limited Partnership
Insurance Company
Other (describe)
26. Complete all that apply:
Year
Founded Parent
Founded Proposed
Product Platform
Began Managing Private
Real Estate Funds
27. Ownership structure (check one):

Knowledge. Experience. Integrity. 4

 Publicly-Owned
Partnership
Employee-Owned
Subsidiary of (describe)
Other (describe)
28. Have there been any changes in the ownership structure of your firm in the last seven years? If yes, describe the
nature of the change.
29. Provide a list detailing the ownership structure including the names and percentage ownership of each owner of the
firm. Please highlight owners of the firm that are not employees of the firm.
30. Are there anticipated changes in the ownership structure that may take place over the life of the proposed fund?
Please describe in detail. Describe the broad methodology for ownership interests to be transferred. Please describe
the transferal of ownership interests in involuntary circumstances.
31. Within the past five years, have there been any significant developments in your organization including, but not limited
to, changes of ownership of structure, personnel reorganization, downsizings, new funds launched, offices closed or
opened, new business ventures, etc.)? Please describe.
32. What future changes do you anticipate?
33. If your firm is an affiliate/subsidiary of a larger organization, what percent of the parent’s total revenue was generated
by your organization?
2015
2014
2013
2012
2011
34. If your firm is an affiliate/subsidiary of a larger organization or a joint venture partner with another organization,
describe the method of communication and quality control between the two organizations. Define the specific
responsibilities of each of the parties.
35. Please provide a description of your firm’s history and current activity, including a discussion of any mergers or
acquisitions, significant developments, organizational or ownership changes, downsizings, funds or businesses
launched and closed, offices closed or opened, etc. made within the past 5 years. The description should concentrate
on the management of tax-exempt funds for U.S. clients. Include date of SEC registration and an explanation of the
ownership structure of your firm and that of the parent or joint venture partner, if applicable. Also provide a complete
form ADV (Parts I and II) and label as such.
36. Describe your firm’s business plan for the next three years. What product(s) is your firm emphasizing? How will new
and existing resources be allocated? Will a limit be placed on the total value of assets managed, employee count
and/or the number of accounts for the total firm, individual portfolio manager or the commingled fund products? How
is growth being managed at the firm so as not to impair your ability to provide performance results, portfolio
administration and client servicing?
37. Describe any conflicts of interest your firm may have in the management of this account. Include any activities of
affiliated or parent organizations, brokerage activities, investment banking activities, or property management, leasing,
or other services provided to the fund. If you have an equity real estate business do you lend to funds/clients of this
business Do you share ownership of any of the investments in the account with other funds or accounts you manage
or with an investor in the account?
38. Do any professionals of your organization hold interests in real estate, or real estate-related funds, sponsored by a
non-firm affiliated organization? Please provide details on carried interest participation and LP/GP interests.

Knowledge. Experience. Integrity. 5

39. Please provide comprehensive financial statements for the General Partner or Sponsoring Organization for each of
the past three years as an attachment. Please provide forecasts of operating performance for the next three years.
For all financial statements, please breakout management fees, performance-based fees, property management fees
and transaction/other fees.
40. What level of assets under management is required for your firm to break-even under current staffing levels? Under
anticipated staffing levels?
41. What is the organization’s approach to ESG investment? Is there a policy in place and how is it implemented? Please
comment if there is specific implementation of these policies within the Fund strategy.
42. Does your organization utilize a benchmark for environmental sustainability? If so, which one? If GRESB is utilized,
which funds are participants in the survey?
43. What is the firm’s position on diversity within the workplace? Please describe how this position is incorporated within
the Fund team.

Knowledge. Experience. Integrity. 6

SECTION II: PERSONNEL

1. Provide a breakdown of total employees for the overall organization, as of March 31, 2016. If a person has multiple
responsibilities, use the person’s primary job description for classification. Do not double count employees.
Function Current Planned
Hires
Executive Management
Portfolio Management
Economist/Research
Acquisitions
Dispositions
Asset Management
Property Management
Client Service/Marketing
Accounting/Financial
Administrative
Other (describe)
Total Professionals

2. List all professionals involved in your investment decision making process. Indicate the individual’s years with the firm
and total years of real estate experience. Please indicate the portfolio manager responsible for the proposed
fund/account and all investment committee members. In the “Name (# Rank)” column, provide a numerical rank (in
order of importance) the key investment decision makers for the strategy. Please provide an attachment with
professional biographies of all investment professionals for the strategy.
Name (# Title Office Month/Year Month/Year Equity Years of RE
Rank) Location Joined Team Joined Firm Partner Exp.
(Y/N,%)

3. Who is the current portfolio manager(s) of the proposed strategy? Please provide a professional biography for the
current portfolio manager(s).
4. Please provide a professional biography for senior team members including the portfolio manager, in word format.
5. Please provide a list of founding and subsequent portfolio manager(s) for the proposed strategy. If changes in
portfolio manager(s) have been made, please provide a description of the history of the product and changes to the
philosophy or process.
6. What percentage of the investment team’s time is spent on the following activities?
Name Acquisitions Asset Client Service Marketing Other
Management

Knowledge. Experience. Integrity. 7

7. Do the members of the investment team have involvement in other products sponsored by your firm? If so, please
describe.
8. Who is the most senior member of the team responsible for overseeing research efforts?
9. Is the current portfolio manager or investment team responsible for the strategy under consideration? If not, list those
professionals who previously contributed to the strategy track record and include their years with the strategy and
reasons they are no longer involved with the strategy.
10. List all of the additions to the investment team over the prior five years.
Name Title/Function Start Date

11. List all of the departures to the investment team over the prior five years.
Name Title/Function Start Date Departure Date Reason for
Departure

12. Describe any planned additions to the investment team. Is this contingent on asset growth or any other factors?
13. What is the typical trajectory of investment professionals on the team?
14. Describe the compensation for investment professionals at all levels of the investment team.
a. How is compensation determined overall?
b. What is the typical percentage split among base salary, bonus and other forms of compensation?
Describe other forms of compensation.
c. What long-term retention incentives are there for key employees?
d. Compare your compensation levels relative to peers.
e. Do members of the investment team have an equity interest in the firm? Please name those
professionals.
f. Who determines the team’s compensation?
g. List all professionals with employment contracts and the expiration dates of those contracts, highlighting
those who are on the Investment Committee or on the portfolio team for the product
h. List all professionals with non-compete agreements and the expiration dates of those contracts.
15. Do any of the professionals involved with the proposed account invest in the product? If so, how much (in $)? Also
describe the nature of the investment (e.g. up-front cash investment, loans from the firm, deferred compensation, etc.)
and the economic terms of the investment that deviate from third-party investors. Finally, what are the commitment
sizes to prior funds or accounts managed by the team?
16. As follow-on to the prior question, if loans are extended to professionals for co-investment please detail the terms,
including provisions for departures.

Knowledge. Experience. Integrity. 8

17. Has the philosophy or regulation around professional co-investment changed in the last three to five years? If so,
please detail the change.
18. Will the fund manager maintain investment in the real estate debt vehicle throughout the real estate debt vehicle’s
life? If not, are there limitations for the fund manager or key personnel to syndicate, sell, encumber or otherwise
transfer their investment? If so, please describe on what basis and whether this will be on the same terms as other
investors.
19. What is breakout of carry and the vesting schedule for the carried interest allocation? Is there a formula for
determining how carried interest is allocated among investment professionals?
20. What happens to the allocated carried interest for a professional that leaves?
21. Does the firm maintain key man life insurance? If so, please describe.
22. Describe the team’s succession plan for key investment professionals.

Knowledge. Experience. Integrity. 9

SECTION III: PROPOSED INVESTMENT VEHICLE

1. Product Name
2. Where is the above product domiciled? Please provide a diagram linking the legal structure of the aforementioned
investment fund, General Partner entity, underlying investments and other related entities.
3. Please provide a brief description of the investment philosophy and investment strategy of the proposed account.
Include expected diversification ranges by type of loan, country, market, asset type and property type.
4. Has the strategy ever operated under another name or has the strategy been merged with another product? Please
explain.
5. Is the strategy consistent with earlier strategies carried out by the real estate debt vehicle or previous real estate debt
vehicles managed by the fund manager? If not, what changes have been made?
6. Does the team manage other investment vehicles, or serve as the sub-advisor for other investment vehicles, with a
similar investment strategy as the one under review? If so, please list the names of those products, the vehicle types,
investment dates, portfolio manager(s) and assets under management.
7. What investor types are emphasized for this investment strategy?
8. Provide a list of the current investors in the vehicle.
9. Provide all investors’ side letters related to investments or commitments to the investment vehicle.
10. While investors be liable for anything beyond their commitment?
11. Are there different types of shares/units offered? How is the allocation to a certain share/unit class determined (e.g.
investment amount)? What are the fees for each share/unit class and required investment for each?
12. If relevant, what is the pricing of units at initial closing/subsequent closing?
13. Please detail all potential fee reductions available (e.g. initial closing fee reduction, commitment size fee reduction,
etc.)
14. What is the estimated capacity (# of clients and level of assets) for this strategy? How was that capacity estimated?
15. List all investment vehicles, including separate accounts, managed by the team, both directly and indirectly. Include
the name, size, status, amount of capital remaining to be invested, and strategy. This list should include any vehicle
managed by the team whether debt focused or otherwise.
16. Is the vehicle open-ended? If yes, detail the subscription and redemption and pricing mechanism, discretion to vary
the price issuance or redemption and circumstances that may prompt you to use it and any deferral rights on
redemption.
17. If the vehicle is open ended, please include the current contribution or redemption queue amounts.
18. What is the target return of the proposed investment vehicle? What component of the total return is expected to come
from periodic income? What component of the total return is expected to come from
appreciation/accruals/participations? Are there any other anticipated sources of returns to the vehicle?
19. Please describe all fees that are relevant for the debt vehicle (including but not limited to fees: on committed capital,
on invested capital, on assets that are impaired, as well as arrangement fees, syndication fees, acquisition fees,
disposition fees, workout or restructuring fees, origination fees and other possible fees). For fees on invested capital,
include details on the basis for which the fees are calculated (e.g. cost, gross/net asset value, etc.)
20. Can deals be shared, either on a pari passu basis or on a senior/subordinate basis with other vehicles managed by
the firm? If so, how are any conflicts of interest dealt with? How are investments allocated across the various
vehicles?
21. Describe the co-investment policy with both related (e.g. investors, other managed vehicles, staff, etc.) and unrelated
parties. How are co-investments allocated and commitments sized?

Knowledge. Experience. Integrity. 10

22. Please include a list of all co-investment vehicles established for your prior investment vehicles with details regarding
the name of the investment, size of the overall investment and the amount offered as co-investment.
23. Are there competing investment vehicles with the proposed fund? If so, please list all competing vehicles and
describe your allocation procedure. In the event that there is an investment vehicle with insufficient capacity to make
a fund investment, will commitments be commingled with other accounts?
24. Describe the target duration of the vehicle and the loans originated.
25. Explain whether floating or fixed rate loans will be emphasized.
26. Does the investment vehicle have a loan-to-value or other similar credit limitation? If not, what is the expected loan-
to-value percentages of the investments made on behalf of the investment vehicle?
27. Does the investment vehicle have a minimum capital stack exposure limitation (i.e. the minimum difference between
the attachment point of a debt investment and its last dollar basis)?
28. Which benchmark is most appropriate for this strategy? Explain the benchmark selection and other relevant
benchmark alternatives.
29. Please describe the sources of deal flow for the fund.
30. Do you lend on land, construction projects, for-sale residential or any other potentially non-cash flowing assets? Do
you lend on single tenant properties? Do you lend on limited-use properties (e.g. golf courses, data centers, assisted
living facilities, etc.)?
31. Are investments pre-specified for the stated fund? If so, please provide, as Appendix exhibits, all investment
memoranda for the pre-specified investments. Also provide as Appendix exhibits five examples of investment
memoranda for deals completed.
32. What are the equalization provisions for the investments made on behalf of the investment vehicle.
33. How many investments do you anticipate making? What is the typical equity investment size?
34. Will debt be employed at the investment-level or fund-level? If so, what is your financing strategy? Please address
how much leverage will be utilized, the collateral of such debt, whether the debt will be fixed or floating rate and any
hedging that is anticipated. Also address cross collateralization, recourse to investors, mark-to-market provisions,
remargining provisions and typical loan covenants. Will this financing strategy differ from the strategy utilized in prior
funds? If so, how? Finally will repo debt or any similar borrowing programs be utilized? To the extent that lending
agreements are in place, please provide the term sheets of those loans.
35. What guarantees are provided in relation to bank debt?
36. Can the real estate debt vehicle use a credit facility backed by investor commitments? If so, please provide details
(e.g. facility provider, all fees, expenses, terms, etc.). Are these commitments included in calculating the leverage
limitation of the investment vehicle?
37. Describe your hedging policy for interest rates and currency.
38. Do you require borrowers to purchase interest rate hedging? If so, please describe your process for determining the
appropriate amount of protection.
39. Will the investment vehicle make investments in loans in a passive position? Will the investment vehicle make
investments in loans where control is exercised through blocking rights? Please detail the threshold of control required
for an investment to be made.
40. Will a line of credit be utilized for the account? Please provide the relevant credit line terms. Please indicate the
length of time investments are typically held on the credit facility.
41. What is the expected level of fund-level reserves to be held from all potential sources? What is the nature of all of the
sources of fund-level reserves (e.g. uncommitted capital, expected cash flow from portfolio investments, subscription
facility)?

Knowledge. Experience. Integrity. 11

42. Please discuss in detail timing considerations between the receipt of investment proceeds and distributions to
investors.
43. Describe how you dealt with liquidity needs of investment vehicles managed through the Global Financial Crisis. If
any vehicles had redemptions suspended or vehicle terms extended, please detail the length of time for the
suspension or extension, rationale for this approach and how communications were managed with investors of those
vehicles.
44. Provide details of any secondary trading of interests in the real estate debt vehicles (dates, amounts and pricing).
45. Is the real estate debt vehicle regulated? If so by whom? What current regulatory issues were raised? Are any issues
still unresolved? If yes, please explain.
46. Who is the external auditor of the investment vehicle? Is there a rotation process for external auditors?
47. Provide (in excel format) an unprotected and unlocked waterfall model depicting the leakage from gross-to-net
returns. Make sure to include all assumptions, including investment-level assumptions and fee and expense
assumptions flowing through the model.
48. Please provide a list of existing and expected vehicle set-up costs. Please detail the amount of such costs to be paid
by the investment vehicle.

Knowledge. Experience. Integrity. 12

SECTION IV: INVESTMENT PROCESS

1. Please provide a detailed description of the investment and portfolio management process of the proposed account
from sourcing through liquidation. Include relevant roles within typical due diligence and asset management teams,
as well as third-party service providers participating in the process. Include a discussion of how risk management is
incorporated into the process.
2. Detail critical factors emphasized in identifying investment opportunities and relating to the borrowers and business
plans of the underlying collateral assets.
3. Are there minimum requirements for an investment to be pursued? If so, please detail them.
4. Describe your underwriting methodology on potential assets. Include a discussion of the following: (a) determination
of exit cap rates; (b) determination of rental growth; (c) expectation on void periods for new leases; (d) determination
of the cost of take-out financing (if that is an expected strategy for your investments); (e) provisions of refinancing
loans; and (f) requirement of borrower to put in new equity.
5. Do members of the investment team visit all underlying properties for debt investments? Are any third parties
responsible for visiting and/or underwriting underlying collateral assets.
6. Please describe the role of the Investment Committee. What level of approval (e.g. majority, unanimous, etc.) is
required for investment committee decisions? Does final approval rest with any one or more individuals?
7. What is the size threshold for an investment to be reviewed by the investment committee?
8. What types of activities require Investment Committee approval (e.g. new investment, financing, restructuring, exit,
etc.)?
9. Do you receive input from other in-house investment teams as part of the investment process? If so, please describe.
10. How are follow-on investments treated with respect to the investment committee?
11. Does the firm allow overlapping or cross fund investments? If so, please list all such investments in the prior funds
and the % of total investments in the series or other series.
12. Are there affiliated entities or sponsored funds with which the Fund will compete with for acquisitions? If so, how are
the investments rotated or shared? Please explain in detail and include the size of all investment vehicles and capital
available for investment.
13. How is data collected and verified in the investment evaluation process?
14. What research or diligence materials are prepared to support investment recommendations? Please provide
representative examples.
15. Describe how investment weightings are determined?
16. What proportion of debt investments made during the last five years were syndicated by you? What is the process
and how do you manage risks? What is the expected level of syndication activity for the proposed investment
vehicle?
17. Please give details of typical co-lender or intercreditor terms you would expect and give two examples as appendix
items.
18. Do you have any regular senior or junior debt partners? Co-lenders?
19. Please describe how cash sweep and default covenants are determined.
20. Describe the process by which fund investments are managed after an investment has been made. Illustrate any
ways in which value is subsequently added.
21. How often are underlying properties visited?
22. What drives a sell decision? Please describe in detail and provide necessary approvals for a sell decision to be made.

Knowledge. Experience. Integrity. 13

23. Describe how your firm manages risk in the following areas (where appropriate), including details of controls in place:
(a) borrower quality; (b) ongoing credit quality of assets & cash flows; (c) leverage; (d) syndication risk; (e) tenant mix
and lease quality; (f) interest rate risk; (g) currency risk; (h) fraud; (i) litigation; (j) taxation and legal; and (k) regulatory
risk?
24. Is the performance of debt investments tracked using a rating system? If so, please detail the tiers of the rating scale
and detail the number of loans in each tier and the original and current principal balances of the loans within each tier.
25. What systems are used to monitor risk?
26. Is risk management an independent function within the firm?
27. Describe any hedges that are employed. Include a discussion of the hedging mechanisms utilized and the philosophy
behind hedging risk.
28. Do you perform a portfolio attribution? If so, describe and please provide your most recent attribution results.
29. Have there been any changes to the investment process or investment philosophy over the prior five years? Please
detail.
30. Where does the team derive its research?
31. Describe the use of joint venture partners/co-lenders for investments made. Include provisions for replacement,
standard economics and the process used to verify asset operations and financials.
32. Are background checks required of underlying principals of joint venture relationships?
33. Have there been any prior instances of fraud or misconduct relating to prior investments made? If so, please describe
in detail.
34. Explain the legal review process for fund investments.
35. Does the proposed investment vehicle utilize third-party service providers (e.g. custodian, paying agent,
administration agent, transfer agent, etc.)? If so, please describe the duties and responsibilities of each party and how
performance is monitored. Additionally, please detail the fee structure for all services provided, as well as whether the
fees will be paid through management fees, directly by the investment vehicle or an alternate arrangement.
36. Describe your loan servicing arrangements, including special servicing. Detail the fee structure for any such services.
37. What other types of services are outsourced? Are any outsourced services provided by your firm or affiliates thereof?
38. Briefly describe the key variables considered in formulating your disposition/exit strategy.
39. How often will distributions be paid out?
40. Describe how defaults (borrowers, tenants, etc.) are handled? Please describe the involvement of the investment
team and the investment committee. Also outline the process around taking enforcement or foreclosure action.
41. How do you protect your investment against early repayment?
42. Are there any other investment vehicles managed by your firm that may provide take-out financing for proposed
investment vehicle investments? If so, describe any required advisory board, investment committee or other approvals
to provide such financing. Also describe the treatment of exit fees if another investment vehicle provides takeout
financing for investments made on behalf of the proposed vehicle.
43. Describe your valuation policy and process for quarterly and annual valuations commenting on the use of internal and
external resources and methodology. Are the valuations performed on the underlying real estate assets and/or the
loans?
44. Have there been changes to the valuation policy over the last five years. If so, please explain.
45. If not previously discussed, describe the approval process for arriving at and reporting valuations and performance for
quarterly and annual reporting including increases/decreases in reported values.
46. Describe your firm’s policy on moving cash and securities among custodians, operating companies, bank accounts,
investors and counterparties? Describe the processes and controls in place, including different levels of authorization.

Knowledge. Experience. Integrity. 14

47. Which member(s) of the team is/are specifically in charge of cash management and what relevant experience do they
have?
48. Include, as a separate attachment, the 2015 annual report for each prior vehicle that is operational.
49. Do all investors receive the same information at the same time?
50. Do investors have the right to inspect the books and records of the real estate debt vehicle and/or manager or have a
third party auditor to conduct the audit? Please provide the relevant clause in the investment vehicle’s documents.

Knowledge. Experience. Integrity. 15

SECTION V: TERMS

1. Please provide, as a separate Word document, a full summary of terms for the fund.
2. Have any prior funds in the series undergone any fee or other term modifications? If so, please describe.
3. Have any prior funds entered into the term extension period? Did the extension require investor approval? Were there
any associated fee reductions?
4. Have any prior funds extended the investment period? If so, please describe the approval process and timing details.

SECTION VI: AFFILIATES

1. Does the firm have any affiliates which the fund may do business with? If so, please describe in detail each affiliate
business.
2. Please list total affiliate fees or fees paid to your organization beyond investment management fees paid by category
(i.e. property management, leasing, mortgage services, project management, development, legal and accounting,
etc.) for each prior fund in the series.
3. How are affiliate fees determined? Please describe the process for determining the fees charged.
4. How are affiliate fees disclosed to investors? Please provide the document that is provided to investors.

SECTION VII: DOCUMENTS

1. Please provide all documents a proposed investor would review and sign including relevant memoranda (if available),
operating agreement, limited partnership agreement, amendments, side-letters and subscription materials. If these
materials are not provided or in existence, please comment. If this is a follow on fund in a series, please provide a
black lined limited partnership agreement compared to the prior fund.
2. Please provide a current marketing presentation for the firm as it applies to the proposed vehicle.
3. Please provide sample investor materials for a prior investment vehicle.
4. Please provide the last three years of financial statements for the firm (if an affiliate/subsidiary, please provide
financial statements for the relevant business unit).
5. Please provide any other documents that you think would be helpful.

SECTION VIII: PERFORMANCE

1. Please fill out the Excel - Callan RE Debt Performance Request

2. Please submit your prior fund cash flows to the database (contact Kevin Nagy – [email protected]).
3. Has the firm (or any affiliate, subsidiary, or partnership) ever failed to make payments for commitments and/or
secured or unsecured indebtedness? If so, please explain.
4. Please provide details of the team’s three worst real estate investments and the team’s three best real estate fund
investments. Detail the respective size of commitments and the relevant drivers of sub-performance and
outperformance, respectively.

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SECTION IX: REFERENCES

1. Please provide two U.S. tax-exempt plan sponsor clients invested in a current or prior investment vehicle. Please
provide the names, addresses, telephone numbers, size of accounts and dates the accounts commenced.

2. Please provide two U.S. tax-exempt plan sponsor clients who did not re-up in your prior vehicle or for open end funds,
who submitted redemptions requests and are no longer active investors. Provide the same information as in previous
questions noting the date the relationship was terminated.

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