Noteware Development and Goldman Sachs Urban Investment Group Announce Closing of Third Street Housing/Retail Development

Noteware Development and the Goldman Sachs Urban Investment Group (UIG) are pleased to announce their purchase of 5800 Third Street, a 338 condominium project slated for construction at the former Coca-Cola plant in San Francisco’s Bayview-Hunters Point neighborhood. Citigroup is providing the construction financing for the project. The $146 million development is the second collaboration between Noteware and UIG to build new housing in the Bayview. Their first project is the 198 unit family housing development now under construction on Jamestown Avenue near Monster Park at Candlestick Point. The first homes at the Jamestown project will be available for occupancy in January 2008. "We are extremely excited to have been able to take advantage of the fantastic opportunity that 5800 Third Street represents to help provide new moderately-priced housing for San Franciscans. This project will be a major element in helping to "kickstart” the revitalization of the Third Street corridor,” Noteware Development CEO, James Noteware announced. "Between our Jamestown and Third Street developments, Noteware and UIG are investing almost a quarter of a billion dollars in the future vitality of the Southeastern section of San Francisco. We believe in building moderately priced, quality housing that working families can afford and bringing much needed retail to diverse and vibrant neighborhoods like the Bayview. The market for this type of housing is strong and growing – especially in the Bayview which has the highest rate of homeownership of any San Francisco neighborhood,” added Alicia Glen, Managing Director of Goldman Sachs’ Urban Investment Group. The 5.75 acre 5800 Third Street site, previously owned by the Lennar Corporation and Levin Menzies & Associates, attracted the team’s attention due to it’s Carroll Station location along the new Third Street "T” light-rail line. The multi-phase development will include 291 market rate and 47 affordable condominiums. The project will include approximately 11,000 square feet of urban retail along Third Street. Prices for the market rate units have not yet been set, but will likely start in the mid-$500,000s. Prices for the affordable units will likely start in the mid-$200,000s. The affordable units will only be available to persons with moderate incomes qualifying under the City’s affordable housing guidelines. The Mayor’s Office of Housing administers distribution of the City’s affordable housing units. "One of the qualities of the Third Street opportunity that attracted us was the level of community support for the project,” Ms. Glen stated. "We have learned in our work throughout the country that community support is an essential ingredient to a project’s success.” 5800 Third Street was supported through the entitlement process by the Bayview Project Area Committee, the elected body of community residents advising the City of San Francisco on redevelopment of the area. San Francisco Mayor Gavin Newsom and district Supervisor Sophie Maxwell have also been strong supporters of the project. When informed of the purchase, Mayor Newsom stated, "I applaud Noteware Development and the Goldman Sachs Urban Investment Group for their vision and good business sense in moving forward with development of 5800 3rd Street. This is a critical project for the revitalization of Third Street and will bring much needed housing and community benefits for the Bayview." "A big reason for the strong community support is the $750,000 community benefits package that was negotiated during the entitlement process to enhance youth job training, senior services, first-time homeownership opportunities and local business ventures. We look forward to honoring those commitments and to becoming an integral part of the revitalization of this fantastic, underserved neighborhood,” Noteware concluded. About Noteware Development Noteware Development, a Houston-based, nationally recognized builder of moderately-priced family housing, is establishing a strong presence in San Francisco. The firm specializes in building housing in emerging urban areas. In addition to its San Francisco projects, Noteware currently has residential projects under development in Phoenix and Las Vegas. Additional information about Noteware Development can be found at www.notewaredevelopment.com. About Goldman Sachs Urban Investment Group The Goldman Sachs Urban Investment Group is part of the Merchant Banking Division within The Goldman Sachs Group, Inc. (NYSE: GS), that invests the company’s proprietary capital in real estate projects in emerging or transitional urban areas. The investments range from $5 million to $50 million. Since 2001, UIG has invested over $200 million of equity capital representing over $1.1 billion of urban real estate. Founded in 1869, Goldman Sachs is a leading global investment banking, securities and investment management firm. The firm is headquartered in New York and maintains offices in Los Angeles, San Francisco, and Washington, D.C. To learn more about the Goldman Sachs Urban Investment Group, please visit www.gs.com/uig. Media: Noteware Development Claude Everhart, 415-271-5418 or Goldman Sachs Gia Moron, 212-902-4307