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SYNTHETIC LEASES

Synthetic leasing is a cost and tax efficient alternative real estate financing strategy. Structured as triple-net operating leases with typical terms of 5-10 years, rent payments can be either fixed or floating and lessees are able to retain effective control of the leased assets. Synthetic Leases have many benefits relative to both on balance sheet debt and other leasing alternatives:

Structured to accommodate both property acquisitions and new real estate construction
Occupancy costs are significantly lower than with a conventional lease
No depreciation is charged against earnings for SEC reporting purposes
Lease structure allows improvements to be depreciated for tax purposes
The company can exercise its option to buy the property at a predetermined price
No rent escalators based on the consumer price index or percentage rent based on sales

Wachovia is a leader in the area of structured finance and has structured over $11.3 billion of real estate synthetic lease transactions since 1998. We welcome the opportunity to help you discover the right financing vehicle from a wide range of alternative strategies.

Wachovia Securities is the trade name for the corporate and investment banking services of Wachovia Corporation and its subsidiaries, including Wachovia Capital Markets, LLC ("WCM"), member FINRA/SIPC.

Debt and equity underwriting, trading, research and sales, loan syndications agent services, and corporate finance and M&A advisory services are offered by WCM.

Mezzanine capital, private equity, municipal securities trading and sales, cash management, credit, international, leasing and risk management products and services are offered by various non-broker dealer subsidiaries of Wachovia Corporation.

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