Attractive Risk-Adjusted Returns through Strategic Investments Shorenstein seeks to generate attractive risk-adjusted returns through investments in high-quality office properties. Shorenstein executes this strategy by combining sophisticated capital market and investment expertise with extensive asset management and operating capabilities and experience. Recognizing and Responding Quickly to Capital Flow Cycles Real estate is a cyclical business with its cycles determined, in large part, by capital flows. A sound investment strategy must recognize the importance of these cycles and requires a commitment to maintain pricing discipline when buying and a willingness and an ability to move quickly to sell when the value enhancement program has been completed and the capital markets are fully valuing asset and market fundamentals. Utilizing Debt Appropriately Shorenstein believes that leverage should be employed at a level that provides a meaningful enhancement to investment returns but not be so high that a fundamentally sound asset will be put at risk during periods when leasing markets soften or capital markets become constrained. Mitigating Risk through Asset Quality and Tenant Service In selecting among investment opportunities, careful assessment must be made of the risk profile of the various alternatives. In commercial office buildings, risk comes in basically two forms: rental rate risk and vacancy risk, with the greatest investment risk coming from the substantial costs that are incurred through vacancy. Shorenstein believes that both of these risks are best mitigated by investing in high quality properties that, due to their location, physical quality, amenities and other attributes, will always be preferred business locations. These risks are then further mitigated by operating these properties with an unwavering focus on responsive and cost-effective service to tenants so that opportunities to expand and retain tenants on the most favorable terms are maximized.