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| Closed 12/2004 |
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The objective of the Ceres Realty Fund was to build a high-quality real estate investment portfolio by acquiring and managing value-oriented commercial properties that deliver long-term capital appreciation and superior returns from current cash flow.
Investment criteria focused on single and multi-tenant, office, warehouse/distribution and retail properties in central business districts, suburban, and in-fill locations. Ceres targeted underperforming opportunities from $5 million to $25 million that would benefit from value-added management.
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The investment offered:
 Diversification of their portfolios to include an asset type and market that do not
 correlate directly with equity markets
The benefits of real estate investment without the burden of direct ownership
and management
Current, tax-efficient rates of return, as well as growth of capital
Advantages of an asset class that often provides a hedge against inflation
Offering Terms:
The following information is a brief summary of the terms used in the formal "offering", which is outlined in a separate document. This Business Overview and the terms shown below should not be construed as an offer or solicitation for investment or the sale of securities.
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| Ownership Structure: |
Ceres Realty Fund is a Delaware Limited Liability Company treated as a partnership for tax purposes. Title to individual assets shall be held in separate single purpose entities owned by Ceres Realty Fund LLC.
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| Member Manager: |
BlakelyStern Investment Advisors LLC, a Delaware Limited Liability Company
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| Capitalization: |
Maximum of $50,000,000 [up to fifty (50) units of one million ($1,000,000) each or ninety-nine (99) quarter units of $250,000 each may be allowed by the manager].
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| Interim Investments: |
Funds held temporarily for future investment shall be invested in FDIC insured money market funds.
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| Investment Objective: |
The goals of the fund are to protect its capital investment, generate profits, maximize cash flow and build a balanced real estate portfolio. In general, investments will be income producing, commercial real estate assets. Assets will be wholly owned or in joint ventures, with the fund holding at least 51% of the investment.
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| Priority Yield: |
Investors will be entitled to a priority return equal to 9.5% (on invested funds) per annum through annual distributions.
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| Fees and Expenses: |
After payment of the priority return, the Member Manager shall be entitled to collect an amount equal to 0.75% of the investment basis plus invested capital as an asset management fee. In addition, the Member Manager shall earn an incentive fee based upon performance as follows:
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Members
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Member Managers |
| 9.5% - 20% IRR |
75% |
25% |
| 20% - 25% IRR |
65% |
35% |
| 25%+ IRR |
60% |
40% |
The fund will pay its own organizational, offering, legal, accounting and professional fees and expenses. The fund will also pay any out-of-pocket fees and expenses to third parties associated with the acquisition and disposition of real estate investments. The fund does not pay for the Member Manager's overhead or expenses. The Member Manager is entitled to a 1% acquisition fee and a 2% disposition fee.
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| Property Holding Period: |
It is expected that investments will be held five years or longer and return of capital will be achieved primarily from cash flow and re-finance events; however, select dispositions will be executed to maintain the most desirable balance of opportunity, yield and risk.
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