HUB_RTP_Proposal

HUB RTP

INDTeRarOBDrucUe,CTION

Karlin Real Estate, LLC (“Karlin”) is seeking to form a joint-venture (the “Com
JunBe u1s4i,n2e0s1s9 Machines Corporation (“IBM”) to develop, renovate, and lease IB
Mr3. S0co3tt 9LeviEtaan st Cornwallis Road, Research Triangle Park, NC 27709.

President and CEO

1Re2sKeDaaarcrvlihsinTDriraipvnegrolepFoousndeastioan otfhNreoreth-pCharaolsinead approach to the joint-venture that would in

Research Triangle Park, NC 27709

I. The sale leaseback of IBM’s corporate campus located in Research
RE: Hub RTP OcfoficnesTioswtienr gDevoelfopampenpt rOopxpiomrtuanittyely 345.9 acres of land and 500,000 sq
Dear Mr. Levitoanf: which IBM will leaseback for the next 20 years.

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including
experiences and relationships to create unique, one-of-a-kind product at Hub RTP.

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will ensure that HUB RTP is getting maximum exposure on a national scale.

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requirements of IBM in RTP. We look forward to your response.

Thank you for the opportunity to respond.

BeBst eResgtaRrdes,gards,

MaMttheawtthScehwwabSchwab
MaMnaaginngaDgirienctgor Director

INTRODUCTION PIC

PROPOSAL SUMMARY

mpany”) with International
BM’s existing campus located at

nclude the following: The opportunity to create the first live-work-play within
Research Triangle Park, which will be a showcase
development in the region.

h Triangle Park, North Carolina,

quare feet of data center space

Hub RTP amenities will be designed with the Park’s

employees in mind, providing unique opportunities

morning, noon, and night.

space to be leased by IBM. The
nter and will include world class

d via a joint-venture between

The new development will be the most unique and

thoughtfully designed office towers in the State, attracting

the brightest and best companies.

pproximately 75 acres of land

ronment, to shape the future of
will be in coordination between

Hub RTP will encourage collaboration between office,

retail, and residential tenants through shared amenities

sed on current and future and vibrant community events.

PROPOSAL APPENDIX

PARMER
INNOVATION
CENTERS

INTRODUCTION PIC

PROPOSAL APPENDIX

PARMER INNOVATION CENTERS
HOW WE ARE UNIQUE
Develop & Manage Amenity Focused Business
Environments Where Innovation Thrives &
Occupiers Flourish

Uniquely Capitalized with Fully Discretionary
Equity Backed By a Multi Billion Dollar Family
Office

Extensive Experience Repurposing & Developing
Dynamic Corporate Campuses / Business Parks
All Over the Globe

Strong Track Record as a Strategic Real Estate
Partner with Fortune 500 Companies

INTRODUCTION PIC

ABOUT US

PROPOSAL APPENDIX

PARMER INNOVATION CENTERS

WE’VE WORKED WITH THE MOST SOPHISTICATED CORPORATIONS

INTRODUCTION 20

1.8M
purcha
700K

leas

PIC

CLIENTS

EXECUTING ON OVER 5 MILLION SQUARE FEET
OF CORPORATE SOLUTIONS

2013

300K SF
industrial

space
purchased

017 2012

M SF 300
ased* ACRES land
purchased
K SF
sed 2012

320K SF 2016 2019
office space
purchased 305K SF 250K SF
office leased
2012 space
2016 2017 2018 2015 2017
300K SF purchased
industrial 360K SF 335K SF 220K SF 199K SF 190K SF
2012 leased build-to-suit office office office
space lease space space
purchased 320K SF leased leased
office
2011 space
leased
300K SF
industrial

space
purchased

PROPOSAL APPENDIX

PARMER INNOVATION CENTERS

WE DELIVER OCCUPANCY SOLUTIONS TAILORED TO THE SPECIF

Amenity Rich Affordability and Promotion of he
Business short transit times in and wellness thr
key markets through state of the art g
Environments strategically located sports courts, fit
employment centers
classes, and m

HIGHLIGHTS 7 $2+

6.5+ Global Corporate Billion
Campuses
Million Unlevered Equity
SF Access

SF Total PIC
Workspace

INTRODUCTION

HIGHLIGHTS

FIC NEEDS OF OUR CORPORATE OCCUPIER CLIENTELE

ealth Modern, open, and Extensive experience
rough efficient workplace converting & developing
gyms,
tness construction state of the state
more corporate campuses /

business parks

1.5+ 640+ $1+

Million ACRES Billion
SF
Development Total Future
Completed or Under Potential Development Cost
Construction
APPENDIX
PROPOSAL

PARMER INNOVATION CENTERS

FOOD TRUCK PAVILLION

TREPAEVILHIOON AUNDSLEAWCNOVIENWF. ROOM CAM
PIC
INTRODUCTION

TREEHOUSE VIEW

AMENITY OFFERINGS

DRIVE-THRU COFFEE

AMENITY PARK APPENDIX

MPUS ENTRY BUILDINGS

PROPOSAL

OVERALL AMENITIES VIEW

PARMER INNOVATION CENTERS

WEST

Sacramento, CA
10 Buildings
530K SF

AREUSSETAINRCH Raleigh-Durham, NC
Austin, TXR84G83 B74 21 Buildings
R246 G138 B51 R0 G168 B203
2.4M SF; 290 Acres
5 Buildings
FUT
1.1MM SF+, 190 Acres
PIC
Austin, TXR246G138 B51R84 G83 B74 R0 G168 B203

4 Buildings

360K SF

AUSTIN
Austin, TXR246G138 B51
R84 G83 B74 R0 G168 B203

5 Buildings (UC)

675K SF; 253 Acres

INTRODUCTION

LOCATIONS

MANCHESTER

South Manchester, UK
3 Buildings
110K SF

CARDIFF

Cardiff, UK
7 Buildings
400K SF

6.5 MM SF OF WORKSPACE
WITH OVER 640 ACRES OF
TURE DEVELOPMENT POTENTIAL

PROPOSAL APPENDIX

HUB RTP
PROPOSAL

INTRODUCTION PIC

PROPOSAL APPENDIX

HUB RTP DOWNTOWN
DURHAM
22 15.1
9 6.1
MINUTES MILES
MINUTES MILES

11 7.7 R
D
MINUTES MILES INT

HUB RTP 1

MIN

INTRODUCTION 1

MINU

PIC

PARMER RTP | HUB RTP

WAKE
FOREST

35 22.7

MINUTES MILES

RALEIGH-
DURHAM
TERNATIONAL
AIRPORT

10 9.7
NUTES MILES

20 17

MINUTES MILES

CARY DOWNTOWN
RALEIGH
18 14.8
UTES MILES 26 21.1

MINUTES MILES APPENDIX

PROPOSAL

HUB RTP

INTRODUCTION NC HWY 54

PIC

AERIAL RENDERING

NC HWY 147

DAVIS DRIVE APPENDIX

PROPOSAL

HUB RTP | PROPOSAL

Acquisition Terms:

General Project Overview: Karlin Real Estate is directly impacted by the success of Hub RTP and
desires to partner with the foundation to create the ultimate office
destination for Fortune 500 companies within RTP. KRE proposes
developing two vertically integrated office towers with structured
parking and a covered walkway connecting the two buildings, with
prime visibility on I-40. KRE will work in tandem with RTF and its other
partners to create a mixed-use development that rivals North Hills in
Raleigh, The Domain in Austin, and Avalon in Alpharetta, to create the
ultimate sense of place in the heart of RTP.

Joint-Venture Partnership: Karlin Real Estate, LLC (“Karlin”) is seeking to form a joint-venture (the
“Company”) with The Research Triangle Foundation of North Carolina
(“RTF”) to develop, amenitize, and lease Hub RTP’s class AA office
Towers totaling 1.0 million square feet. The towers will include
structured parking, offered at a 3.0/1,000 ratio, and will be located at
the Intersection of 1-40/HWY 147/NC 54.

As part of the partnership, RTF will provide approximately 5.7 acres of
land for the development on a long-term ground lease, to be better
defined below.

Ownership: Karlin Real Estate (90%)

*Research Triangle Foundation of North Carolina (10%)

* RTF will not be responsible for any initial capital requirements, to be
better defined below. RTF can increase their ownership on a pro-rata
basis for any additional contributions to the project.

Ground Lease: Karlin proposes a long-term ground lease of not less than 99-years. The
ground lease will provide security for both landlord and tenant and will
serve as a source of income for RTF.

Ground lease rent: 8.0% of Total Base Rental Revenue

Term: 99 years

Partnership Business Plan: Karlin Responsibilities
- Karlin will serve as the General Partner (“GP”) for all activities
related to the future development and amenities of Hub RTP
and fund all such costs.
- Karlin will complete all site work and design required to
prepare the site for development.
- Upon bilateral agreement of building square footage and site
plans, Karlin will facilitate all construction including assuming all
risk related to construction and financing.

INTRODUCTION PIC

SITE

Distributions: RTF Responsibilities
- RTF will serve as the Limited Partner (“LP”) for all activities
Due Diligence Timing: related to the future development and amenities of Hub RTP.
Financing: - RTF will assist in completing all zoning and entitlements
Management/Major required to prepare the site for future development
Decisions: - There will be no capital required by RTF related to the
Exclusivity: remainder of the project.
Confidentiality:
Net cash flow and capital transaction proceeds from all sources will be
Non-Binding Letter of allocated between RTF and Karlin as follows:
Intent:
A. Upon a sale or refinance of a portion or the entirety of the
project, all proceeds will be split with a ten percent (10%)
return to RTF and a ninety percent (90%) return to Karlin.

KRE will require a six-month marketing period to secure an anchor
tenant to begin construction. KRE shall have one (1) extension period
for an additional six (6) months if the Company is negotiating in-good-
faith to secure the initial leasing required.

The Company will seek either non-recourse or recourse debt financing
which is anticipated to be approximately 65% of the Project cost. Karlin
will assume all financing risk.

GP shall be the manager of the Company and will be responsible for
decision making and management of the Company in accordance with
the Company’s approved business plan and budget.

Upon execution of this term sheet, RTF agrees that it will deal
exclusively with Karlin in negotiating for a period of 90 days from the
date hereof and such period will be automatically extended so long as
RTF and Karlin are continuing to negotiate in good faith.

Other than each parties’ attorneys, accountants, financial advisors,
prospective lenders, consultants, or as required by law, the parties shall
keep the terms and conditions of the transaction contemplated by this
letter and the fact that this letter has been entered into strictly
confidential and shall not furnish or provide any information or
documentation with respect to the transactions to any third party
without the prior written consent of the other party.

This letter is solely intended as an expression of intent and shall not be
a legally binding agreement (except the parties shall be bound by the
terms of the “Confidentiality” and “Exclusivity” provision).

PROPOSAL APPENDIX

HUB RTP | PROPOSAL

Estimated Development Cost:

Future Development: Concurrent with Part 1, Karlin Real Estate will permit, design, develop,
and market two 500,000 SF of Class AA office space with structured
parking to provide a 3.0/1,000 parking ratio. The new office towers will
have iconic design and premier visibility along I-40. KRE anticipates
delivery of the first tower within 24-months from signing the initial
required lease, as defined below.

Pre-Development Costs: KRE estimated $4.0 M to $5.0 M in pre-development costs including,
but not limited to, architects, engineers, legal, marketing, and
infrastructure.

Base Tower Shell: $290.00 Per Square Feet for a total estimated shell cost of
$290,000,000.

Structured Parking: $20,000 per space. KRE plans to build to a 3.0/1,000 parking ratio for a
total of 3,000 spaces and total estimated cost of $60,000,000.

Construction Upon minimum leasing commitment of 200,000 square feet for the first
Commencement Date: office tower.

Base Rent: $35.00/SF with three percent (3%) annual increases. Base Rent includes
parking costs.

Base Building: Landlord to construct two new class AA office towers highlighted by
steel frame construction and floor-to-ceiling glass walls. The buildings
will be at a minimum LEED Gold certified.

Leasehold Improvements: Landlord to provide a Tenant Improvement Allowance of $60.00/RSF
with the associated Base Rent based on the program indicated below.
Tenant may use up to $5.00/RSF of the allowance for any purpose
related to making the initial premises ready for its occupancy, including
data cabling, FF&E, and moving expenses. Landlord shall not charge any
fee for construction management if tenant engages third-party
construction manager.

Parking: Tenants shall be provided a parking ratio of 3.0/1,000 free of charge
throughout the Term. Tenant shall have the ability to utilize such
parking area on a 24/7/365 basis. The number and location of desired
visitor and/or reserved parking shall be mutually determined.

Amenities: Parmer Innovation Centers (“PIC”) is synonymous with amenities. This
partnership is an opportunity for RTF to reinvent RTP and provide a
collaborative space and iconic environment for the next generation of
employees. Our initial concept for Hub RTP focuses on a tiered amenity

INTRODUCTION PIC

Capital Source: SITE
Karlin Real Estate:
space within the office towers including cafeteria, rooftop patios,
grand amenity lobbies with fitness center overlooking from above. To
compliment the rest of the Hub development we propose a 20,000 SF
steel and glass amenity building that features a farm-to-table cafe with
multiple dining vendors, a three-story outdoor climbing wall, state-of-
the-art fitness facility, rooftop pool, secret conference rooms, special
employee events, and more. Additionally, we will engage the campus
and add exercise trails, interactive art pieces, imported furniture,
several outdoor pavilions, a screen on the green movie theater, and an
outdoor sports plex. Parmer is a full-service real estate firm and will
operate these amenities for RTF.

Karlin’s experience with amenities is evident at Parmer RTP, which
features a central amenity park with covered outdoor seating that
doubles as an amphitheater, food truck promenade with permanent
seating/facilities, putting greens, and more. The North end of Parmer
RTP has newly renovated sports courts that include two basketball
courts, three tennis courts, soccer/roller hockey rink, and a pickleball
court. Throughout the campus tenants have access to bike shares,
volleyball, baseball, hammock parks, extensive walking/jogging trails
with fitness stations, a two-story gym with a slide connecting the floors,
yoga classes (indoor and outdoor), cycling classes, cross-fit training, bee
hives with beekeeping courses, shared gardens, and a treehouse
conference center. Parmer prides itself on creating unique amenity
spaces with innovative furniture that draws the eye and sparks
collaboration and creativity.

KRE is an affiliate of Karlin Asset Management, a private investment
firm managing over $2 Billion of un-leveraged equity capital. Karlin has
acquired over $2 Billion of properties in the US and Europe since 2010.

Parmer Innovation Centers is backed by Karlin Real Estate, an
investment firm targeting opportunistic acquisitions and financing of
commercial, hospitality and multifamily properties across the United
States and United Kingdom. The platform was established to provide
active management and consistent branding to a portfolio that includes
over three million square feet of workspace and thousands of
developable acres in the United States and United Kingdom. Karlin Real
Estate is an affiliate of Karlin Asset management, a private investment
firm managing over $2 Billion of unleveraged equity capital.

PROPOSAL APPENDIX

HUB RTP | PROPOSAL

Development Team:

Karlin Real Estate: Matthew Schwab
Co-Founder, Managing Director

Bart Olds
Director of Development and Asset Management

Elliott Brewer
Associate, Acquisitions and Development

Mike McGlashan
Associate, Acquisitions and Development

Bruce Sargent
Parmer Innovation Centers
Strategic Real Estate Consultant

John Brack
Parmer Innovation Centers
Director of Construction

CBRE|Raleigh: Brian Carr, CCIM
Executive Vice President
Investor Leasing

Lee Clyburn, SIOR
Executive Vice President
Investor Leasing

Proposed Development Description:

Hub RTP Office Towers: The office towers at HUB RTP will offer an unmatched presence along
the I-40 corridor and will feature high quality design with minimum
LEED Gold certification throughout. Highlights of the towers will include
large, efficient floor plates, distinct outdoor/indoor amenity and
collaboration space, and activated ground-floor retail space

Deposit: $1.0 Million upon selection.

Deposit and Timing: Marketing: Six-months, with one (1) six (6) month extension

Construction: Twenty-four months from initial required lease signing.

INTRODUCTION PIC

SITE

PROPOSAL APPENDIX

HUB RTP

INTRODUCTION PIC

CONCEPT IMAGERY

PROPOSAL APPENDIX

HUB RTP

INTRODUCTION PIC

CONCEPT IMAGERY

PROPOSAL APPENDIX

HUB RTP

INTRODUCTION PIC

WORKSPACE INSPIRATION

PROPOSAL APPENDIX

APPENDIX

INTRODUCTION PIC

PROPOSAL APPENDIX

APPENDIX

Research Triangle Park (“RTP” or “The Triangle”) is one of the fastest growing
NEW
submarkets with a flourishing economy. YORK

PENNSYLVANIA

OHIO I-95

ILLINOIS INDIANA

WEST VIRGINIA
VIRGINIA

KENTUCKY Chapel HillI-95 Durham
I-85Raleigh
I-40 NORTH CAROLINA

TENNESSEE SOUTH
CAROLINA
I-85

MISS. ALABAMA GEORGIA

FLORIDA

#1 250+CONTACT INFORMATION 50,000 3,000+

Largest Anna Penner Intelligent & Patents
research park Vice President of Business Development creative people awarded to
in the country Research Triangle Foundation
work here RTP
Businesses of919-654-6996 businesses

[email protected]

all sizesAbby Gingrich
call RTP homeBusiness Development Manager

Research Triangle Foundation
919-654-6998
[email protected]

rtp.org

INTRODUCTION PIC

RESEARCH TRIANGLE PARK, RALEIGH-DURHAM

A Triangle of Talent
The Triangle is one of the most educated areas in the country. Over 50% of the population has
a bachelor’s degree, and more than 8,500 students graduate annually from the region’s top
research universities. Each university is located less than 25 minutes away from Parmer RTP’s
campus.

Duke University University of North North Carolina
15,000 Students Carolina at Chapel Hill State University

30,000 Students 34,000 Student

A Culture of Diverse Expertise

RTP is also home to some of the biggest, most innovative companies in the world. It currently
is home to over 50,000 employees from over 250 companies and net migration continues to
increase.

PROPOSAL APPENDIX

APPENDIX

INTRODUCTION PIC

RESEARCH TRIANGLE PARK

PROPOSAL APPENDIX

APPENDIX

The Research Triangle puts health and wellness first. It ranks among the top MSAs in physicians
per capita and is home to two of the nation’s top medical institutions, UNC Chapel Hill and
Duke University.

Duke University Health Systems is the largest employer
in Durham Co. with approximately 17,520 full-time
employees
In 2017, DUHS attracted more than 68,000 inpatient
stays and upwards of 2 million outpatient visits.

803 –bed facility serves more than 37,000 people per
year
More than 7,100 staff members
Over 800,000 people are cared for at UNC practices
and clinics each year

919 licensed beds serving residence through two
hospitals (Raleigh and Cary) and a series of satellite
centers
Largest Health System in Wake County with nearly
8,500 employees including 1,200 physicians

INTRODUCTION PIC

Umstead A TRIANGLE OF HEALTH

Sal’s Branch Oak To Raleigh
Trail Rock Rex Hospital
Trail 6 miles
Maintenance Rd.

The Triangle community benefits from one ofMaple Hill the largest parks and greenway systems in the
Lodge
country. Umstead StaLBatigeke Park sprawls over 5,550 acres anGdraylmyn Dor.re than 200 miles of greenway

can be accessed throughout the region.
Branc Tr ailh Syca Graylyn Ebenez
Sy c amo re Rd. Trail o re Gate
North er Church Rd.
Potts m

0 2,000 4,000 Feet Group Camp Road Camp urkeeky M.U.T.
Crabtree
T
Sycamore
Lake Sycamore N.
Cre
Cabins
Camp
Lapihio

Mid-gate Graylyn M.U.T. Sy c amore Tr

Syc amore Creek Sendero
Gate

ail

Reedy Creek M.U.T. Reedy Creek M.U.T. Company Cedar Ridge
Mill Spur

Co mpany Mill Trail M.U.T.
ek Pkwy.
Old Reedy Creek Road Millstone Ebenezer Church
Entrance Gate dy Rd. Bridge Gate

Old Reedy Inspiration Creek Lake M. To Schenck Forestreek
Creek Rd. Trail Ree
Lake Reedy Creek U.T. Cra
Crabtree Reedy Creek Entrance Maintenance Reedyblolly Trail LAKE CRABTREE
Gate Creek
27 8 PARKS IN Reedy Cre Lo PARK b tree C ek M.U.T.
DURHAM 9 PARKSHaINrrison Ave. Lake S. Turkey CreUMSTEAD STATE
PARKS Exit 287 CARYEntrance Gate
8 PARKS IN PARK
5 RALEIGH

MAJOR Trenton
TRAIL Rd. Gate
SYSTEMS
CRreeeedk y

10/16

05/1D7 URHAM CARY HIKE & RAGLTREoEIRGERaNeHlexWiCgHhAoAsYPpIiSTtAaYlSL TAERMEA Trenton Rd.NORTH CAROLINA STATE MOTHUENRNeTeAOdyIRCNrTeSHe-kTCROdA.-RSOEALITNRAAIL
BIKE & HIKE NETWORK BIKE NETWORKS 5 miles ROUTES 1 & 2

Accessible Lodge (Primitive) Powerline Multiuse Trails (MUT) moderate 13.0 miles
Bathhouse No Swimming Ranger Residence -Cedar Ridge -S. Turkey Creek 0.4 miles
Biking Trail Park Boundary Restrooms -Graylyn -Reedy Creek 5.8 miles
Boat Rental Roads -N. Turkey Creek -Reedy Creek Lake 0.2 miles
Bridle Trail PROPOPSaArkLGate 0.4 miles
Gravel Campground Spur easy 2.7 miles
Park O ce Paved Company Mill moderate
Company Mill SpAuPr PENDeaIsXy
Inspiration easy
Loblolly* moderate

HUB RTP