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| Union Land & Management Company (“Union”) |
 SugarOak’s history with Union began in 1979 when SugarOak and Union first partnered in a real estate transaction. In 1985, SugarOak began working for Union as a consultant. In 1997, SugarOak took over management of Union’s portfolio of investments. At that time, Union’s portfolio consisted of 280,000 square feet of office space and vacant land with a total combined net equity value of approximately $18 million.
Total distributions to Union shareholders were approximately $100,000 per year. SugarOak’s objective was to grow the market value of the equity of the Union shareholders, while at the same time increasing cash distributions. This was a complex task because Union’s low real property tax basis and subchapter S corporation status required that any sale of real estate be combined with a reinvestment strategy utilizing tax deferred property exchanges under Section 1031 of the Internal Revenue Code, as amended (“Section 1031 Exchanges”).
During its tenure as asset manager, SugarOak has increased occupancy rates, maximized operational efficiencies, and has sold, exchanged, or refinanced properties when market conditions were appropriate. This has resulted in SugarOak achieving its objectives of increasing the market value of the portfolio while at the same time increasing distributions to Union’s shareholders.
As of the end of 2008, Union’s portfolio consists of 15 properties and various other investments with a combined net equity value on December 31, 2007 of approximately $53 million. The portfolio includes 500,000 square feet of retail space, 290,000 square feet of office space, a 75,000 square foot warehouse, an apartment complex with 288 units, and over 1,200 acres of land. Total annual distributions to Union shareholders have increased substantially as well, with distributions to shareholders during 2007 totaling approximately $1,000,000. |
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