SAN DIEGO, CA -- (MARKET WIRE) -- 05/07/07 -- Equastone has announced the close of its second real estate investment fund, Equastone Value Fund II, LLC ("EVF II"). Equastone raised over $150 million of equity commitments from a mix of high-net-worth and institutional investors. Similar to Equastone's first fund, EVF II was oversubscribed due to strong demand for high-quality real estate investments with a proven sponsor.

Equastone Real Estate Funds are private, closed-end offerings of investments in diversified commercial real estate portfolios. Explaining the successful fundraising, Chairman David Bourne said, "By taking an opportunistic and value-added approach to investing, our funds are able to target higher total net returns to investors than alternatives such as public and private REITs and real estate mutual funds. Serving as both fund manager and property operator, Equastone's vertically integrated structure allows our investors to avoid the double profit-sharing and fees charged by typical funds of funds, and the high distribution costs of private REIT offerings." Since 1993, Equastone sponsored offerings have delivered a net IRR of over 29 percent to investors on all realized investments.

In commercial real estate, opportunistic investing usually involves acquiring mispriced assets in undervalued markets, and value-added investing refers to fixing, leasing and improving the operations of investment properties. Typically, such value-added properties are underperforming at the time of acquisition and can be acquired at a disproportionate discount to stabilized assets that are fully leased and in good physical and operating condition.

At the time of its final closing, EVF II had invested approximately half of its equity capital, acquiring over $325 million of underperforming office and flex properties located in Colorado, Louisiana, Oregon and Texas, with several additional projects in escrow or under negotiations. Chad Carpenter, Chief Executive Officer, said, "Currently, there are excellent investment opportunities in office markets that have been slow to recover from the economic downturn in 2001. In particular, we have been able to buy underperforming office properties in need of fixing and leasing at prices well below replacement cost. Given continued economic growth and demand for office space, we expect to be able to sell at significantly higher prices after the properties have been stabilized."

Equastone intends to acquire $1 billion of office and flex properties throughout the United States over the next year and is actively seeking acquisition opportunities. Investment offerings in California, Oregon and Washington should be directed to Chris Stai at cstai@equastone.com. All other investment offerings should be directed to Jeff Schindler at jschindler@equastone.com. Equastone and its affiliates have offices in San Diego, Denver and Houston, and own properties in California, Arizona, Colorado, Nevada, Louisiana, Texas and Oregon.

Equastone is a real estate investment firm specializing in opportunistic, value-added and core-plus real estate investments. Equastone manages investment capital on behalf of Equastone Real Estate Funds, which are private equity funds for high-net-worth and institutional investors. For more information call Mykel Sprinkles at 858-812-3261 or visit www.equastone.com.

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Todd Backus
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