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| Coastal American Corporation Portfolio (“Coastal”) |
 After working in a consulting role for Coastal for over two years, SugarOak took over management of Coastal’s portfolio in 1997. When SugarOak took over management, the portfolio consisted of 2 hotels, 2 trailer parks, a trailer rental business and vacant industrial land with a total combined net equity value in 1997 of approximately $14 million. Total distributions to the shareholders were approximately $750,000 during 1997.
SugarOak’s objectives were to increase distributions to the shareholders and to maximize the value of the portfolio. As with Union, Coastal had a low tax basis in their properties and therefore any sale required a reinvestment of sale proceeds using Section 1031 Exchanges.
SugarOak accomplished its objective by transitioning Coastal’s portfolio away from its non-performing properties through a series of purchases, renovations, and exchanges. As of the summer of 2008, the Coastal portfolio consists of 8 properties and various other investments with a combined net equity value on December 31, 2007 of approximately $33 million.
The Coastal portfolio includes over 190,000 square feet of retail space, 230,000 square feet of office space, 2 apartment complexes with a total of 362 units, and 56 acres of land. Total distributions to shareholders have increased substantially as well, with distributions to shareholders during 2007 totaling approximately $1,800,000.
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