Polestar finances “Above Market” tenant improvements requested by tenants during lease negotiations more effectively than any other financing source.

• Provides Owner with higher leverage than first mortgage lender.
• No recourse to Owner; full recourse to the Tenant through bond-type lease.
• Owner enjoys full depreciation on TIs purchased with a mezzanine loan.
• Overall project risk is reduced by lowering permanent mortgage requirements and assigning the TI credit risk to Polestar
• First mortgage lender does not expect assignment of TI rents, since they are “above market”
• No liens or encumbrances against property or TIs
• Increased internal rate of return because of reduced owner invested equity.
• Easier to lease vacant space and attract tenants by offering 100% TI financing.

• Owner puts 100% of TI proceeds on its balance sheet, though rating agencies do not include it in leverage/coverage tests
• First mortgage lenders accept the new financing because it represents new rents above the collateral for their loan and improves the value of property.
• Tenants enter into a “bond-type” lease, with the benefit of fully deductible rent payments, operating lease accounting treatment, and Polestar’s lending rate tied to the capital markets.