A Daily NAV REIT September 2016

Transcription

1 For Use in Ohio A Daily NAV REIT September 06 I Share: W share: A share: ZDPFIX ZDPFWX ZDPFAX NOT A DEPOSIT NOT FDIC INSURED NOT GUARANTEED BY THE BANK MAY LOSE VALUE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY DPF-PR-BD-OH-SEP6

2 Important Risk Factors This material must be read in conjunction with the Dividend Capital Diversified Property Fund, or DPF, prospectus in order to understand fully all of the implications and risks of the offering of securities to which it relates. This document must be preceded or accompanied by a prospectus, which contains important information about Dividend Capital Diversified Property Fund. This is neither an offer to sell nor a solicitation of an offer to buy the securities described in the Dividend Capital Diversified Property Fund prospectus. The offering is being made only by the Dividend Capital Diversified Property Fund prospectus. Neither the Securities and Exchange Commission nor any other state securities regulator has approved or disapproved of the securities or determined if the prospectus is truthful or complete. In addition, the Attorney General of the State of New York has not passed on or endorsed the merits of the offering. Any representation to the contrary is unlawful. Specific properties depicted are owned by Dividend Capital Diversified Property Fund. Forward-Looking Statements This presentation includes forward-looking statements regarding changes to Dividend Capital Diversified Property Fund and resulting impacts for investors. These statements are based on certain assumptions and analyses made by the company in light of the company s experience and the company s perception of current conditions, expected future developments and other factors the company believes are appropriate. Such statements are subject to a number of assumptions, risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements. Among the factors that may cause the company s results to vary are general economic and business (particularly real estate and capital market) conditions being less favorable than expected, changes in laws or regulations (including changes to laws governing the taxation of REITs), failing to meet capital raising goals and other factors, many of which are beyond the company s control. More specifically, we can provide no assurances that the company s offering will produce its intended results. Except as required by applicable securities laws, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise. Past performance is not a guarantee of future results. Investing in real estate assets entails certain risks, including changes in: the economy, supply and demand, laws, tenant turnover, interest rates (including periods of high interest rates), availability of mortgage funds, operating expenses and cost of insurance. This investment will offer limited liquidity options to investors. Real estate investment trusts (REITs) are not suitable for all investors. Further, investing in Dividend Capital Diversified Property Fund (DPF) stock involves additional and substantial risks specific to DPF, including, among others, that: i. There is no public trading market for shares of DPF s common stock, and DPF does not expect that there will ever be a public trading market for its shares, so redemption of shares by them will likely be the only way to dispose of your shares. ii. iii. DPF s Class A, Class W and Class I share redemption program generally imposes a quarterly cap on aggregate net redemptions of its Class A, Class W and Class I share classes equal to the amount of such share classes with a value of up to 5% of the aggregate net asset value (NAV) of the outstanding shares of such classes as of the last day of the previous quarter. DPF may also amend, suspend or terminate its share redemption program at any time. As a result, DPF s shares have only limited liquidity and may become illiquid. A portion of the proceeds received in the public offering of Class A, Class W and Class I shares is intended to be used to redeem Class E shares, which will reduce the net proceeds available to retire debt or acquire additional properties, which may reduce its liquidity and profitability. Dividend Capital Securities LLC, Distributor / Member FINRA

3 Important Risk Factors (continued) iv. The purchase and redemption price for shares of DPF s common stock will be based on the NAV of each class of common stock and will not be based on any public trading market. DPF s NAV will not represent DPF s enterprise value and may not accurately reflect the actual prices at which DPF s assets could be liquidated on any given day. The board of directors may amend DPF s NAV procedures from time to time. v. Some of DPF s executive officers and directors and other key personnel are also officers, directors, managers, key personnel and / or holders of an ownership interest in its advisor, its dealer manager, its property manager and / or other entities related to its advisor. As a result, they face conflicts of interest, including but not limited to conflicts arising from time constraints, allocation of investment opportunities and the fact that the fees its advisor will receive for services rendered to DPF will be based on DPF s NAV, the procedures for which its advisor will assist its board of directors in developing, overseeing, implementing and coordinating. vi. vii. viii. ix. If DPF fails to maintain its status as a REIT, it would adversely affect its results of operations and its ability to make distributions to its stockholders. The amount of distributions DPF may make is uncertain, are not guaranteed and may be modified at the program s discretion. DPF may pay distributions from sources other than cash flow from operations including, without limitation, the sale of assets, borrowings or offering proceeds (including the return of principal amounts invested). The use of these sources for distributions would decrease the amount of cash DPF has available for new investments, repayment of debt, share redemptions and other corporate purposes, and could potentially reduce your overall return and dilute the value of your investment in shares of DPF common stock. Because borrowed funds were used to pay distributions, the distribution rate may not be sustainable. Prior to 0, DPF s distributions have historically exceeded its cash flow from operations. However, for each year from 0 through 05 and for the quarter ended June 30, 06, distributions were funded solely from cash flow from operations. The distributions for the three months ended March 3, 06 were funded 95.3% from cash flow from operations and 4.7% from other sources. DPF s use of leverage increases the risk of loss on its investments. The payment of fees by DPF to its advisor, its property manager and its dealer manager will reduce the cash available for distribution and will increase the likelihood that investors are unable to recover the amount of their investment in DPF. x. In connection with DPF s offering, it incurs fees and expenses. In particular, DPF expects to incur a dealer manager and distribution fee which are expected to reduce the amount of distributions received by certain investors and as a result will lower the overall return to such investors. Also, DPF has and expects to continue to incur organizational and offering related expenses which reduce the overall cash flow of DPF and negatively impact its NAV and could negatively impact your overall return. Dividend Capital Diversified Property Fund Inc. is an externally managed real estate investment trust, or REIT, that invests in a diverse portfolio of real properties and real estate-related debt and securities. DPF is managed by Dividend Capital Total Advisors, LLC and is not a mutual fund nor is it currently registered or intends to register as an investment company under the Investment Company Act of 940, as amended. All properties shown are owned by DPF. NOT A DEPOSIT NOT FDIC INSURED NOT GUARANTEED BY THE BANK MAY LOSE VALUE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY 3

4 Introduction Why Dividend Capital Diversified Property Fund Investing in commercial real estate offers potential for: Current income Capital appreciation Portfolio diversification benefits 3 Inflation hedge 4 Investment opportunity Pooled access to a $.3 billion 5 diversified, national commercial real estate portfolio; annualized distribution yield of 4.9% on the W share and 3.68% on the A share with load (based on 06/30/6 NAV) Approximately 90.% leased portfolio year average portfolio lease term by annualized base rent Seek to consistently manage portfolio for distribution paying capacity and meaningful NAV accretion Richard Kincaid, our Chairman and Jeff Johnson, our CEO, were formerly CEO and CIO, respectively, at Equity Office PropertiesTrust, which at the time of its sale in 007 for $39 billion was the largest publicly held office building owner and manager in the U.S. 6 Vehicle structure NAV-based pricing for purchases and redemptions 7 Public company transparency with benefits of direct real estate correlation, return and volatility profile Multiple share classes and $,000 minimum investment in most states to accommodate differing investor needs There can be no assurances that these objectives will be met. Current income has historically been in the form of quarterly distributions. The amount of distributions DPF may make is uncertain, are not guaranteed and may be modified at the program s discretion. DPF may pay distributions from sources other than cash flow from operations including, without limitation, the sale of assets, borrowings or offering proceeds (including the return of principal amounts invested). The use of these sources for distributions would decrease the amount of cash DPF has available for new investments, repayment of debt, share redemptions and other corporate purposes, and could potentially reduce your overall return and dilute the value of your investment in shares of DPF common stock. Because borrowed funds were used to pay distributions, the distribution rate may not be sustainable. Prior to 0, DPF s distributions have historically exceeded its cash flow from operations. However, for each year from 0 through 05 and for the quarter ended June 30, 06, distributions were funded solely from cash flow from operations. The distributions for the three months ended March 3, 06 were funded 95.3% from cash flow from operations and 4.7% from other sources. 3 Diversification does not ensure a profit or guarantee against a loss. 4 Typically, if the overall returns of an asset class exceed inflation, the asset class is considered an inflation hedge. Commercial real estate has historically provided overall returns that have exceeded inflation. There is no guarantee, however, that DPF can generate the overall returns needed to outpace inflation. 5 As of June 30, 06. Measured by fair value, real property only. 6 Bloomberg News, March Shares redeemed within 365 days of purchase are subject to a short-term discount equal to % of the gross proceeds otherwise payable with respect to the redemption. 4

5 DPF Overview Dividend Capital Diversified Property Fund is a $.3 billion commercial real estate company that offers investors pooled access to a diversified portfolio of high-quality real estate assets. This product structure allows greater access to investors seeking the potential benefits of a real estate related investment. Potential benefits: Existing and targeted investments: Office buildings Industrial distribution facilities Retail centers Multi-family Real estate debt investments Current income Capital preservation Seek to provide current income to DPF s stockholders in the form of quarterly cash distributions 3 Seek to preserve and protect our stockholders capital investments Capital appreciation Seek to achieve appreciation of DPF s net asset value (NAV) Low correlation Seek to provide portfolio diversification through a low to non-correlated asset class 4 As of June 30, 06. Measured by fair value, real property only. There can be no assurance that these objectives will be met. Investing in real estate entails certain risks, including changes in: the economy, supply and demand, laws, tenant turnover, interest rates (including periods of high interest rates), availability of mortgage funds, operating expenses and cost of insurance. 3 The amount of distributions DPF may make is uncertain, are not guaranteed and may be modified at the program s discretion. DPF may pay distributions from sources other than cash flow from operations including, without limitation, the sale of assets, borrowings or offering proceeds (including the return of principal amounts invested). The use of these sources for distributions would decrease the amount of cash DPF has available for new investments, repayment of debt, share redemptions and other corporate purposes, and could potentially reduce your overall return and dilute the value of your investment in shares of DPF common stock. Because borrowed funds were used to pay distributions, the distribution rate may not be sustainable. Prior to 0, DPF s distributions have historically exceeded its cash flow from operations. However, for each year from 0 through 05 and for the quarter ended June 30, 06, distributions were funded solely from cash flow from operations. The distributions for the three months ended March 3, 06 were funded 95.3% from cash flow from operations and 4.7% from other sources. 4 Due to shares being valued primarily based on real estate appraisals and not subject to exchange-traded market fluctuations. 5

6 Product Structure Dividend Capital Diversified Property Fund provides new investors immediate pooled access to a $.3 billion portfolio of high-quality commercial real estate with the following key attributes: Transparency Publicly offered vehicle, public regulatory filings, NAV-based pricing Daily valuation Net asset value calculated daily based on 3 rd party appraisals Liquidity options Redemption program with daily liquidity opportunities Simplified reporting Existing distribution CUSIP Number, 099 (not K-) Declared distribution yield of 4.9% on the W share, 3.68% on the A share with load (based on 06/30/6 NAV) 3 As of June 30, 06. Measured by fair value, real property only. DPF s ability to fulfill redemption requests on a daily basis is subject to a number of limitations. The Board of Directors has the ability to amend, suspend or terminate the share redemption program at any time. As a result, shares have only limited liquidity and may become illiquid. The Class A, Class W and Class I share redemption program is different than the Class E share redemption program. DPF s Class A, Class W and Class I share redemption program generally imposes a quarterly cap on aggregate net redemptions of its Class A, Class W and Class I share classes equal to the amount of shares of such classes with a value of up to 5% of the aggregate NAV of the outstanding shares of such classes as of the last day of the previous quarter. Since the inception of DPF s Class A, Class W and Class I shares, DPF has satisfied 00% of redemption requests for Class A, Class W and Class I shares. However, since 009, DPF has received Class E share redemption requests that exceeded its corresponding Redemption Caps. Based on the application of such Redemption Caps, DPF redeemed, on a pro rata basis, a percentage of the shares requested to be redeemed for each quarter. Effective December, 05, redemptions under the Class E share redemption program will only be available in the event of the death or disability of a stockholder. The Board of Directors will evaluate each quarter whether to make liquidity available to Class E stockholders through a share redemption program or through a tender offer process. The percentage redeemed, including redemptions for death and disability, for each quarter ranged from approximately 6.4% to 50.6% of the shares that were requested to be redeemed. DPF shares redeemed within 365 days of purchase are subject to a % discount, subject to certain limited exceptions. 3 The amount of distributions DPF may make is uncertain, are not guaranteed and may be modified at the program s discretion. DPF may pay distributions from sources other than cash flow from operations including, without limitation, the sale of assets, borrowings or offering proceeds (including the return of principal amounts invested). The use of these sources for distributions would decrease the amount of cash DPF has available for new investments, repayment of debt, share redemptions and other corporate purposes, and could potentially reduce your overall return and dilute the value of your investment in shares of DPF common stock. Because borrowed funds were used to pay distributions, the distribution rate may not be sustainable. Prior to 0, DPF s distributions have historically exceeded its cash flow from operations. However, for each year from 0 through 05 and for the quarter ended June 30, 06, distributions were funded solely from cash flow from operations. The distributions for the three months ended March 3, 06 were funded 95.3% from cash flow from operations and 4.7% from other sources. Based on the June 30, 06 NAV of $7.37 per share for each class and distributions paid for each class. 6

7 Diversified Property Fund: Senior Management Former members of Equity Office Properties Trust (EOP) team attracted by historic opportunity to provide high -quality real estate investments to a large pool of investors Together with Sam Zell, Richard, Jeff and Michael built industry-leading real estate company EOP and sold it in 007 for $39 billion to Blackstone Group Richard Kincaid Chairman of the Board President and Chief Executive Officer of Equity Office Properties Trust until its acquisition by the Blackstone Group in February of 007 Worked with EOP s chairman, Sam Zell, for over 6 years acting as, among other roles, Executive Vice President, Chief Operating Officer, and Chief Financial Officer. Supervised more than $ billion in financing transactions at Equity Group Investments, Inc. Held positions with Barclays Bank PLC and The First National Bank of Chicago B.A. Wichita State University; MBA University of Texas Michael Lynch President Senior Vice President of Investments at Equity Office Properties Trust until its acquisition by the Blackstone Group in February 007 Chief Investment Officer for Arden Realty, Inc. Held positions with PS Business Parks, Inc., Nottingham Properties, Inc., The Parkway Companies and First Wachovia Corporation B.S. Mount Saint Mary s College; MS Virginia Polytechnic Institute Jeffrey Johnson Chief Executive Officer Chief Investment Officer, Executive Vice President of Equity Office Properties Trust until its acquisition by the Blackstone Group in February 007 Managing Director, founding Partner and Co-Head of U.S. Investments for Lehman Brothers Holdings, LLC Chief Investment Officer and Managing Director of Transwestern Investment Company (now Pearlmark Real Estate Partners) B.A. Denison University; MBA Kellogg Graduate School of Management at Northwestern University Kirk Scott Chief Financial Officer Diversified Property Fund since inception in 006, previously as VP & Controller Controller at NexCore Group Held positions with Dividend Capital Group and DCT Industrial Trust from its inception through its IPO as a $3.0 billion, self-managed industrial REIT B.A. University of Wyoming; Certified Public Accountant in the State of Colorado (inactive) John Blumberg Chairman of Investment Committee Principal and founder of both Dividend Capital Group and Black Creek Group Founder and Chief Executive Officer of Mexico Retail Properties Has overseen directly or indirectly through affiliated entities, the acquisition, development, financing and sale of real properties having combined value of approximately $6.4 billion as of June 30, 06 B.A. University of North Carolina at Chapel Hill Gregory Moran Executive Vice President Executive Vice President of Investments of Dividend Capital Group and the Advisor; been with company since years of experience in investments and commercial real estate Previously served as Portfolio Manager in the Real Estate Investment Group for Public Employees Retirement Association of Colorado Additional management experience includes the Capital Markets Group at Sonnenblick Goldman Company B.A. and MBA University of Texas McCombs School of Business 7

8 Diversified Property Fund: Current Portfolio As of June 30, properties 35 retail 6 industrial 7 office Real Property Ownership 0 markets Approx. 9.3MM net rentable square feet Approx. 550 tenants Approx. 90.% leased $.3B portfolio of high-quality commercial real estate 0-year operating history Based on fair value, real property only. Any market for which DPF does not show a corresponding percentage of the total fair value comprises % or less of the total fair value of DPF s real property portfolio. Top Ten DPF Markets Strong Presence in Key Markets Based on Fair Value of the Properties Owned Rank Market Fair Value (in thousands) Rank Market Fair Value (in thousands) Greater Boston $5,500 6 Austin, TX $67,350 Northern New Jersey $36,600 7 San Francisco, CA $66,600 3 Washington, DC $08,300 8 East Bay, CA $07,000 4 South Florida $80,700 9 Denver, CO $8,450 5 Philadelphia, PA $67,450 0 Dallas, TX $79,650 8

9 Quality Properties = Quality Tenants = Sustainable Distribution Top Ten Tenants By Base Rent As of 06/30/6 Rank Tenant Publicly Listed Credit Rating (S&P) 3 Charles Schwab & Company, Inc. NYSE: SCHW A Sybase, Inc. / SAP NYSE: SAP A 3 The Stop & Shop Supermarket Company, LLC Euronext: AH 4 BBB 4 4 Novo Nordisk NYSE: NVO AA- 5 Seton Healthcare N/A N/A 6 Shaw s Supermarket N/A B- 7 IAM National Pension Fund N/A N/A 8 The TJX Companies, Inc. NYSE: TJX A+ 9 Home Depot NYSE: HD A 0 Alliant Tech Systems Inc. N/A BB+ Trade names and logos are the registered trademarks of companies depicted. DPF is not affiliated with the companies shown on this slide. None of the companies above have endorsed DPF or its current public offering. The amount of distributions DPF may make is uncertain, are not guaranteed and may be modified at the program s discretion. DPF may pay distributions from sources other than cash flow from operations including, without limitation, the sale of assets, borrowings or offering proceeds (including the return of principal amounts invested). The use of these sources for distributions would decrease the amount of cash DPF has available for new investments, repayment of debt, share redemptions and other corporate purposes, and could potentially reduce your overall return and dilute the value of your investment in shares of DPF common stock. Because borrowed funds were used to pay distributions, the distribution rate may not be sustainable. Prior to 0, DPF s distributions have historically exceeded its cash flow from operations. However, for each year from 0 through 05 and for the quarter ended June 30, 06, distributions were funded solely from cash flow from operations. The distributions for the three months ended March 3, 06 were funded 95.3% from cash flow from operations and 4.7% from other sources. 3 Credit ratings are subject to change. AA = Very strong capacity to meet financial commitments. A = Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances. BBB = Adequate capacity to meet financial commitments, but more subject to adverse economic conditions. BB = Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions. B = More vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments. CCC = Currently vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments. Ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. 4 Listing symbol and rating reflects the S&P rating of Koninklijke Ahold. 9

10 Proactive Leasing Program with Well-Managed Lease Expirations As of June 30, 06 Contributes to a sustainable distribution and visibility into long-term trend. Average portfolio lease term by annualized base rent (in years) 4.3 Lease Expirations Approximate percentage of annualized base rent with future rent escalations 65% Approximate average annual rent escalation, based on annualized base rent.5% Notable Lease Transactions Tenant Sector Property New / Renewal Square Feet Term (Years) Date Executed Marshall s Retail Brockton Westgate Renewal 9,000 7 June 06 Mizuho Bank Office Harborside New 07,000 5 June 06 Re-Sort Solutions, LLC Industrial 7000 Riverpoint New 05,000 5 November 05 Lowe Enterprises Real Estate Office 300 Connecticut New 5,400 August 05 Ambarella Corporation Office Jay Street Renewal 47,000 4 August 05 Measured by base rent of in-place leases. None of these tenants have endorsed DPF or its current public offering. 0

11 Portfolio Characteristics: Balance Sheet Management As of June 30, 06 $750 Million Senior Unsecured Syndicated Credit Facilities (Closed Jan. /Feb. 05) Significant Shareholder Benefits $50 million Term LIBOR plus.35% $00 million 7-year Term LIBOR plus.65% $400 million Revolving Credit LIBOR plus.40% Originally closed December 0. Figures presented reflect recast of Facility completed in January 05 Significant cost-savings Significantly enhances portfolio flexibility Further diversifies access to debt capital Current amendment provided reduced pricing, extended maturity dates, expands lending relationships, etc. Average debt remaining maturity (in years) 3.7 Debt Maturities ($MM) (Assuming certain extension options) Fixed rate debt 8% Floating rate debt 9% Weighted average interest rate 3.6% Unsecured debt / Total debt 55% Syndication Bank of America Lead Arranger PNC Bank Co-lead Wells Fargo Bank Co-lead Regions Bank JP Morgan Bank of the West Capital One Raymond James US Bank Key Bank Union Bank Fifth Third Bank TD Bank Associated Bank Leverage 3 As of 06/30/6 Assumes that DPF will qualify for and exercise certain extension options available under its debt instruments. Although DPF believes that it will qualify for these extension options, DPF cannot guarantee that it will meet the requirements to extend the notes upon initial maturity. Should DPF not qualify for and exercise these extension options, its debt maturing in 08 and 09 would be 4.6% and 0.6%, respectively. Includes floating rate borrowings where DPF has effectively fixed the interest rate using interest rate swaps. Assumes certain extension options. 3 Total principal outstanding under DPF s total borrowings, divided by the fair value of DPF s real property and debt investments.

12 Select Portfolio Properties st Avenue Plaza Centerton Square 655 Montgomery Denver, CO 57,000 Sq. Ft. Major Tenants: Madison Street Company, The Denver Foundation Philadelphia, PA 46,000 Sq. Ft. Major Tenants: DSW Shoe Warehouse, Wegmans Food, Bed Bath & Beyond San Francisco, CA 65,000 Sq. Ft. Major Tenants: Hotwire, Telmate, Redfin Suniland Shopping Center Austin-Mueller Health Center South Columbia Pinecrest, FL 8,000 Sq. Ft. Major Tenants: Nicklaus Children s Hospital, CVS Pharmacy Austin, TX 56,000 Sq. Ft. Major Tenant: Seton Healthcare Central Kentucky 77,000 Sq. Ft. Major Tenants: Amazon.com

13 DPF NAV Total Return As of June 30, 06 NAV Total Return NAV Distribution Rate (Ann) Latest Quarter (Cum) -Year (Trailing -Month) 3-Year (Ann) A/W/I Share Class Inception (Cum) A/W/I Share Class Inception (Ann) 06/30/6 06/30/6 03/3/6 06/30/6 06/30/5 06/30/6 06/30/3 06/30/6 09/30/ 06/30/6 09/30/ 06/30/6 DPF Class I share $ %.4% 4.83% 7.6% 33.% 7.94% DPF Class W share $ %.9% 4.3% 7.08% 30.78% 7.4% DPF Class A share* $ %.7% 3.79% 6.55% 8.39% 6.89% * Excludes up front sales load. The A-share is offered with an up to 3% sales load to investors through registered broker-dealers, which will affect the above returns and future returns depending on the investor s hold period. Total return represents the compound annual rate of return assuming reinvestment of all dividend distributions. Past performance is not a guarantee of future results. Performance data quoted above is historical. Current performance may be higher or lower than the performance data quoted. Performance does not include transactions fees, including sales commission, that may be applicable to investors. The performance data does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the sale of fund shares, as applicable. If transaction fees, including sales commission and taxes, had been deducted, the performance shown would be lower. The performance noted is net of all other expenses such as asset management fees and all general and administrative (G&A) expenses. Examples of G&A expenses include legal, accounting, transfer agent, insurance, printing and mailing. The NAV is based on estimated values. DPF s board of directors, including a majority of its independent directors, has adopted valuation procedures, as amended from time to time, that contain a comprehensive set of methodologies to be used in connection with the calculation of DPF s NAV. One fundamental element of the valuation process, the valuation of DPF s real property portfolio, is managed by Altus Group U.S., Inc., an independent valuation firm ( the Independent Valuation Firm ). The real property portfolio valuation, which is the largest component of DPF s NAV calculation, is provided to DPF by the Independent Valuation Firm on each business day. The foundation for this valuation is periodic appraisals. DPF seeks to have approximately / th of the portfolio appraised each month, although it may have more or less appraised in a month. In no event will a calendar year pass without having each and every property valued by appraisal unless such asset is bought or sold in such calendar year. However, on each business day, the Independent Valuation Firm adjusts a real property s valuation, as necessary, based on known events that have a material impact on the most recent value (adjustments for non-material events may also be made). Total returns are only meaningful when considered in conjunction with DPF s full financial statements and the notes thereto included in DPF s Quarterly Report on Form 0-Q for the quarter ended June 30, 06, which reported a GAAP net income per diluted share of a $0.00 and $0.7 for the three and six months ended June 30, 06, respectively. These documents can be found on DPF s website at Based on the June 30, 06 NAV of $7.37 per share for each class and distributions paid for each class. The amount of distributions DPF may make is uncertain. DPF may pay distributions from sources other than cash flow from operations including, without limitation, the sale of assets, borrowings or offering proceeds (including the return of principal amounts invested). The use of these sources for distributions would decrease the amount of cash DPF has available for new investments, repayment of debt, share redemptions and other corporate purposes, and could potentially reduce your overall return and dilute the value of your investment in shares of DPF common stock. 3

14 Offering Terms Offering size Up to $.0 billion, with the intention of filing new registration statements to offer shares perpetually Terms of offering Two years with ability to extend for an additional year under SEC Rule 45 Liquidity Securities offered Share price NAV calculation Minimum purchase Distributions DRIP No present intention to list securities or otherwise liquidate, though not prohibited from doing so in the future Class A Common Stock with up-front sales commission Class W Common Stock no up-front sales commission At NAV per share, recalculated daily, plus applicable selling commissions BOD-approved process to be undertaken by third-party fund accountant (Alps) in conjunction with highly respected third-party property valuation firm (Altus), third-party appraisers and Advisor. Each real property asset will be valued no less frequently than annually with approximately / th of the portfolio re-evaluated each month. Posts the NAV for each class of security to Dividend Capital Diversified Property Fund s website daily and makes the NAV available via an automated 800 number $,000 (except $,500 in New York, North Dakota and Tennessee) Paid quarterly in arrears Invested at NAV in the same class of security as purchased Leverage As of June 30, 06, approximately 44% Redemption plan Redemption limits Frequent trading policy Daily redemption at NAV DPF s Class A and Class W share redemption program generally imposes a quarterly cap on aggregate net redemptions of its Class A and Class W share classes equal to the amount of such share classes with a value of up to 5% of the aggregate net asset value (NAV) of the outstanding shares of such classes as of the last day of the previous quarter. DPF may also amend, suspend or terminate its share redemption program at any time Shares redeemed within 365 days of purchase are subject to a % discount, subject to certain limited exceptions Total borrowings, calculated on a GAAP basis, divided by the fair value of DPF s real property and debt investments. 4

15 Offering Terms (continued) Fee Class A Class W Class I Selling commission 3.00% None None Underwriting compensation summary Dealer manager fee 0.60% 0.60% 0.0% Distribution fee 0.50% None None Please note: Organizational and offering costs will be reimbursed directly from operations and will not be taken out of offering proceeds. Selling commission on class A shares Dealer manager fee Distribution fee on class A shares only Reimbursement of organizational and offering expenses Operating expense reimbursement Advisor fees Up to 3% of purchase price per share, paid on top of the per share price so as not to change the NAV as a result. Paid by Dividend Capital Diversified Property Fund and reallowed entirely to Selected Dealers. May be reduced for volume discounts or waived Equal to /365 th of 0.60% of the NAV of Class A and Class W shares per day. Payable in arrears by Dividend Capital Diversified Property Fund and partially reallowable to Selected Dealers Equal to /365 th of 0.50% of the NAV of Class A shares per day. Payable monthly in arrears by Dividend Capital Diversified Property Fund and reallowable to Selected Dealers Subject to certain limitations, Dividend Capital Diversified Property Fund will pay directly, or reimburse the Advisor and the Dealer Manager if they pay on Dividend Capital Diversified Property Fund s behalf, any organization and offering expenses (other than selling commissions, the dealer manager fee and distribution fees) as and when incurred Subject to certain limitations, Dividend Capital Diversified Property Fund will reimburse the Advisor for certain costs it incurs in connection with the services it provides; provided, however, that Dividend Capital Diversified Property Fund will not reimburse the Advisor or its affiliates for services for which the Advisor or its affiliates are entitled to compensation in the form of a separate fee Fixed advisory fee of.5% on daily NAV plus a performance component equal to 5% of annual calendar year investment return in excess of 6% (capped at 0% of annual overall return) with a high water mark equal to the higher of initial NAV of $6.69 and highest previous year end NAV (currently $7.47). The Advisor will also be paid a disposition fee of % on the sale of assets and the Advisor and its affiliated property manager may earn certain other fees as described in the prospectus 5

16 Summary: Why Invest Now? For investors seeking an allocation to real estate and the opportunity for current income, potential NAV per share growth and low volatility and low- to non-correlated investment, Diversified Property Fund provides immediate pooled access to a $.3 billion diversified 58-property portfolio of core and core-plus high-quality real estate. Accomplished real estate investors Income plus growth strategy with low volatility 3 Benefits of immediate ownership in institutional-quality commercial real estate portfolio Investment based on NAV pricing Existing distributions currently well supported by operating cash flow 4 Actively managed $.3 billion existing portfolio Diversified by asset class and geography There is no guarantee that an investor will experience all or any of these benefits through an investment in DPF. As of June 30, DPF s stock price is subject to less volatility because its per share NAV is based on the value of the real estate assets it owns and is not subject to market pricing forces as is the stock price of listed, or publicly traded, REITs. Lower volatility could result in lower returns during certain periods of time. Although DPF s stock price is subject to less volatility, DPF shares may be significantly less liquid than shares of a listed REIT, and are not immune to fluctuations, including downward fluctuations. Investors are advised to consider the limitations on liquidity of DPF shares when also evaluating the volatility of DPF s stock price as compared to that of the stock prices of listed REITs. 4 The amount of distributions DPF may make is uncertain, are not guaranteed and may be modified at the program s discretion. DPF may pay distributions from sources other than cash flow from operations including, without limitation, the sale of assets, borrowings or offering proceeds (including the return of principal amounts invested). The use of these sources for distributions would decrease the amount of cash DPF has available for new investments, repayment of debt, share redemptions and other corporate purposes, and could potentially reduce your overall return and dilute the value of your investment in shares of DPF common stock. Because borrowed funds were used to pay distributions, the distribution rate may not be sustainable. Prior to 0, DPF s distributions have historically exceeded its cash flow from operations. However, for each year from 0 through 05 and for the quarter ended June 30, 06, distributions were funded solely from cash flow from operations. The distributions for the three months ended March 3, 06 were funded 95.3% from cash flow from operations and 4.7% from other sources. 6

17 Action Steps for Advisors Identify your clients that may benefit from DPF and contact us today. What do these clients look like? Do they meet the suitability requirements? Are they looking for yield? Do they have a long-term investment horizon? To find out more about how DPF can help your clients reach their current income goals, call 866.DCG.REIT ( ) or use the contact information below. 7