Not sure that he places much into renovation but walls and kitchen. My banker from JPM hates it and is warning me against. The broker and his attorney are super optimistic. I am confused. What is your gut feeling? Could you and me have a conference call with a broker and broker attorney tomorrow? I am just catching flight to SF. THANK YOU!!! Boris From: Steven Gold [mailto: Sent: Monday, October 28, 2013 5:44 PM To: Boris Nikolic Cc: Sam Jaradeh Subject: Re: OFFER: 137 Duane St., 3A Hi, Are you guys free to talk? I have some news. The seller said he is close to accepting another offer that is north of $6.5mm. I spoke to him at length just now and I do not think he is bluffing. I have a feeling that this will not be around for much longer. He clarified a few things. I. In May 2012 he bought all the units and gut renovated 3A, which was part of the package. When 3A was on the market before, it was not in the shape it is now. He said it was a disaster, holes in the floor, ikea kitchen, etc. That could be a good reason it did not sell, not to mention he said before bought, the building was in worse shape. Graffiti on the walls, etc. He has cleaned it up. EFTA00669104

2. The hallways and lobby will be renovated within the next few months. The renovation has been approved and contractors have already been engaged. 3. The reason there are no minutes is because the board didn't want the added expense of hire a person to record the meeting minutes. It was a cost saving measure, and quite frankly, given the reserve fund, this condo is actually quite flush with cash. 4. He still says there is absolutely no litigation. He said perhaps the litigation the attorney found had to do with the sidewalk. One of the tenants filed a construction motion to have sidewalk repaved, which has already been resolved and repair, according to him. He said other than that there is no litigation, and none between tenants and sponsor units 5. He signed the affidavit this morning to amend offering plan and have an effective offering plan, so there is now an effective offering plan in place I think we should talk. I tried to get all the info so you can decide to pass or not. But I want this decision to be YOURS and not the markets, if someone else comes in and swoops it up. I am on my cell and free to discuss further. . Thanks. Best, Steve From: Boris Nikolic Date: Thursday, October 24, 2013 1:15 AM To: Steven Gold Cc: Sam Jaradeh Subject: RE: OFFER: 137 Duane St., 3A Hi Steve, I am sorry for this delay. Too much travel put me behind in answering emails — and tomorrow we are going to Brazil. Please decline the seller's offer. It is not only that I think that he should come down more with his price, but also he should be more straightforward. I just re-read his email and I really do NOT like following. A) He is claiming that there "there is absolutely no future litigation of any kind related to this unit and they are not buying any of the rent stabilized units and there is also no future litigation on the building known or contemplated at this time" ....While I heard that there is pending litigation against a current rent stabilized tenant to try to remove the stabilization. Is this correct? EFTA00669105

B) The boiler in the building will be replaced soon, which means it was not replaced when they did the conversion, which suggests that they did not do a first class renovation of the systems in the building. Of course, things like that come up during due diligence and we should get a full engineering survey on the building to determine the useful life of plumbing, roof, etc, as well as electrical capacity in the building — nevertheless, it is not a good first sign. C) There is $867k in reserves in the Condo's reserve fund, which is high for a smallish/new building, but will probably only cover the work which needs urgently to be done (boiler, lobby, etc). After that, owners will be assessed for the cost of the work. Size of reserve fund is the first question lawyers and lenders ask. D) The condo plan is ineffective because the sponsor failed to file an amendment in July 2013 as required. The condo has no minutes available to review. Minutes are required for good governance, and to ensure that there is a paper trail of activity/issues/resolutions. E) Considering all above, seller statement "If I wait till the building lobby work is done in a few months I'll be raising the price to at least $7.25M" makes me think that it is all a non-sense. All of above makes me very nervous to buy the largest/most expensive Unit in the building. And as we would need to use all cash, we would be tied up — knowing a history that this seller was unable to sell this Unit since 2006, makes me think that we would rather pay a full price for a property that we can loan money from a bank and re-sell if we need — then risk it. Also Lisa is not only a banker but a real estate licensed — she does it for a fun and constantly track/buy — for last 20 years. Jeffery is buying/selling for last 30 years. Both of them advised not to go. It will be something else soon. Boris EFTA00669106