OVATION PARTNERS

M E M O R A N D U M

February 7, 2006


To: Friends of the Brexton Hotel and Beyond

From: Lou Steadwell

Subject: Wonderful New Prospect!

At long last, I have found a new prospect in the Mount Vernon section of Balitmore. Attached you will find the detailed descriptions of the properties and the pro forma for prospective conversion project. As you can see, this property has income. Not a lot of income relative to the price (which is probably negotiable), but enough to operate the property at "breakeven" for one or two years, or even three years, just in case we need the time to allow the market to catch up to the proposed sellout price of $350 per foot. I have been inside and have seen all the units. The buildings are newly renovated and are very well maintained. The development idea is to combine the units on the upper floors of both buildings prior to conversion to produce six large flats, to extend the interior and exterior (decks) square footage in the rear to cover the parking, and to create a common meeting area.

Please note also the proximity to Pennsylvania Station, where both the Amtrak and the MARC trains stop.