Ira Capital Management LLC

Item 5 – Fees and Compensation

          MANAGEMENT FEE

          IRA receives annual advisory fees that generally range from 0.25% to 1.5% per year based
          on total capital committed to HRE Fund. IRA may be granted a direct or indirect interest
          in capital accounts (at no charge) in the HRE Fund as an indirect payment of advisory
          services.
          In most cases, there is no independent person who negotiates IRA’s advisory fees.
          However, the specific fee arrangements, exact fee start date, exact calculation of the base
          asset management fee, and other types of fees and expenses paid by each investor are
          described in the applicable Fund’s offering memorandum or joint venture or other
          agreement negotiated directly with an investor. Therefore, investors will be informed of the
          fees that will be charged on their investments prior to deciding to make an investment in a
          Fund.

          IRA intends to charge fees that are fair and reasonable in amount based on the type and
          complexity of the services provided. We generally expect to select a fee start date that
          coincides with (i) when we started performing advisory services, (ii) the date of the initial
          investor closing, and (iii) when the investor’s first investment was made.

          In cases where IRA has delegated certain advisory responsibilities to a related adviser,
          IRA may share a portion of its fees with respect to certain accounts with those advisers
          who are performing specific services.

          We or the general partner of a Fund will also typically be entitled to receive an incentive
          distribution or “carried interest” in an amount equal to a specified percentage of the
          returns for such Fund. The specific percentage and amount of the incentive distribution

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Part 2A of Form ADV: Firm Brochure

       or “carried interest” will vary depending on the terms arranged for the Fund. The
       general partner of a Fund may, in its sole discretion, cause such Fund to waive, reduce
       or modify the carried interest applicable to any investor, including the share of carried
       interest allocated to certain investors in such Fund (but without any concurrent increase
       in another investor’s share of such carried interest in such Fund).

       OTHER COMPENSATION, FEES, AND EXPENSES

       If other types of fees and expenses are paid by a Fund, they will be described in such Fund’s
       offering memorandum or joint venture or other agreement negotiated directly with an
       investor, if applicable.
       With respect to HRE Fund, some of the other types of fees and expenses that usually will
       be paid by HRE Funds are: (i) all expenses, costs and liabilities incurred in connection with
       identifying, structuring, negotiating, making, monitoring, operating, holding, management,
       sale, proposed sale, other disposition or valuation of HRE Fund investments, including
       broken deal expenses; (ii) legal, auditing, administrative, consulting and accounting fees
       and expenses (including any fees or expenses of the general partner of the HRE Fund acting
       in its capacity as HRE Fund’s “partnership representative”); (iii) insurance expenses;
       (iv) extraordinary expenses (such as litigation, if any); (v) any actuaries, accountants,
       advisors, auditors, administrators, brokers (including prime-brokers), counsel, custodians,
       valuation experts and other service providers that provide services to or with respect to
       HRE Fund, and legal expenses incurred in connection with claims or disputes related to
       one or more actual, unconsummated or proposed HRE Fund investments; (vi) all taxes,
       fees and other governmental charges payable by HRE Fund (excluding any U.S. or non-
       U.S. withholding taxes that are attributable to some but not all Partners as well as any
       imputed underpayment, interest and penalties imposed pursuant to partnership income tax
       audit rules for U.S. federal tax purposes or any comparable state, local or foreign income
       tax audit rules that are allocable to specific investors, in each case, as determined by the
       general partner of HRE Fund); (vii) communications expenses; (viii) all expenses and costs
       associated with meetings of the investors (including travel and travel-related expenses in
       connection with any such meetings); (ix) all expenses and costs of the LP Advisory
       Committee of HRE Fund; (x) compensation and other similar expenses of professionals
       (including consulting (and its overhead) and any industry executives, advisors, consultants,
       operating executives, subject matter experts or other persons acting in a similar capacity)
       who provide services to or in respect of HRE Fund or an HRE Fund investment (including
       with respect to potential HRE Fund investments); (xi) obtaining research and other
       information for the benefit of the HRE Fund, including information service subscriptions,
       as well as expenses incurred to operate and maintain market information systems and
       information technology systems used to obtain such research and other related information;
       (xii) developing, implementing or maintaining computer software for the benefit of HRE
       Fund, its investors and HRE Fund investments (including potential HRE Fund
       investments); (xiii) maintaining HRE Fund and any of its subsidiary entities (including
       alternative investment vehicles (“AIVs”)), including those incurred in the organization,
       operation and restructuring of such subsidiary entities (including their AIVs); (xiv) HRE
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Item 7 – Types of Clients

           IRA provides investment advice to pooled investment vehicles operated as private funds.
           Investors in such private funds advised by IRA (i.e., the Funds) generally consist of
           accredited investors, publicly traded real estate investment trusts, public and private
           investment funds, hedge funds and other institutional investors, specialty investors (such

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Part 2A of Form ADV: Firm Brochure

           as mortgage banks, pension funds, sovereign wealth funds and real estate operating
           companies), various types of financial institutions and their affiliates, family groups and
           wealthy individuals. Investors may also consist of related persons structured as limited
           partnerships or limited liability companies; such investors may be related to IRA due to
           common ownership and/or common control between IRA’s Founding Partners or an
           advisory affiliate and the general partners or managers of those investors. Other investors
           may include funds of funds or closed-end investment funds. Most of our investors do not
           offer redemption rights or liquidity to their underlying investors.

    Item 8 – Method of Analysis, Investment Strategies and Risk of Loss

           METHOD OF ANALYSIS AND INVESTMENT STRATEGY

           IRA advises its Funds primarily about making investments in real estate. Each Fund will
           have a specific strategy and investment focus that is described in such Fund’s offering
           memorandum or joint venture or other agreement. One Fund may have a strategy similar
           to another Fund. Each Fund’s offering memorandum, limited partnership agreement,
           operating agreement, joint venture and/or similar agreement may include specific
           guidelines or restrictions on its investments.
           IRA’s investment process is to (i) find investment opportunities that fit a Fund’s specific
           strategy, (ii) diligently investigate each investment’s benefits and risks (i.e., conduct due
           diligence), (iii) make recommendations to such Fund on whether to buy, hold or sell an
           investment, (iv) execute the Fund’s investment strategy and (v) monitor the performance of
           Fund’s investments. IRA will review its recommendations against any specific guidelines
           or restrictions on each Fund’s investments.

           Final investment decisions are made by the Founding Partners or managers of IRA.

           DUE DILIGENCE

           Professional employees of IRA, or its affiliates, or engaged third party consultants,
           advisors, and legal counsel perform due diligence on each investment opportunity. Due
           diligence will vary depending on the type of investment but will usually include some or
           all of the following:
                        • Review, preparation and/or analysis of business plan
                        • Review and negotiation of legal documents relevant to the real estate to
                            be held
                        • Review of insurance coverage
                        • Review of historical financial information
                        • Research and analysis of market information
                        • Research and review of competition
                        • Review, preparation and/or analysis of financial projections
                        • Interviews and/or background checks of key company management and
                            joint venture partners

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Part 2A of Form ADV: Firm Brochure

                  •   Lien searches of company assets and real estate
                  •   Review of material contracts and other company data

       The above is not an exhaustive list, nor does every item on the list apply to all investment
       opportunities. Our professional employees use their experience and expertise to review
       each investment opportunity in a diligent way. For certain items on the list that require
       special expertise, consultants may be engaged on behalf of a Fund to perform research and
       prepare reports. Our employees then review and analyze those third-party reports. In
       addition, IRA engages legal counsel as appropriate to prepare, review and/or negotiate legal
       documents with reasonable and customary provisions to protect the interests of the
       applicable Fund. Each Fund pays the fees and costs of consultants and legal counsel for
       matters relating to such Fund. To the extent affiliated consultants or legal counsel are
       engaged to provide services, the fees that are charged do not exceed rates customarily
       charged by third party consultants or legal counsel.

       RISK OF LOSS AND RISK FACTORS

       Investing in real estate involves risk of loss that investors should be prepared to bear.
       There can be no possibility of profit without risk of loss, including the risk of loss of
       one’s entire investment.

       There is no guarantee that our recommendations will turn out to be profitable to our Funds
       or their investors. A Fund may not be able to sell or liquidate recommended assets if they
       need capital for other purposes. HRE Fund does not offer redemption rights or other
       liquidity options to its investors. IRA anticipates that other Funds will have similar
       liquidity profiles.

       There are certain risk factors that may apply generally to the types of investments we make
       on behalf of our Funds. There are also numerous risk factors that may apply to the specific
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