A Message from Jonathan Kieswetter
President, Grace Capital Group

2004 was a record year for Grace Capital during which we closed almost $150,000,000 for the year ending December 31st. We anticipate 2005 will be an even stronger year with $200 million to $250 million in land financings, permanent loans, mezzanine financings, equity placements and real estate investments.

The past few years have defined several successful disciplines for Grace Capital that distinguishes us from others;

• Our ability to finance under capitalized developers
• Provide land financing on untitled and entitled land
• Non recourse land loans
• Non recourse construction loans
• Provide preferred equity on commercial real estate for 100% of cost with a 50% profit split
• A&D financing for value added income properties up to 95% of cost without profit participation
• The very best Credit Tenant construction and permanent loan financing

As we move forward into 2005 and beyond, we will continue to expand our foundation of providing the best permanent financing available for income producing assets plus build on the specialized disciplines that will distinguish Grace Capital as a strong middle market provider of debt and equity.

We also have an another exiting equity structure with institutional equity investors that can re-capitalize developers’ existing assets for either land or income producing properties by way of a Joint Venture, enabling profits to be pulled out but retaining ownership and management of the assets. We believe this is an exciting opportunity as it becomes more difficult to find opportunity and value added assets to acquire and reposition.

I would like to personally thank our clients, lenders and investors for a successful 2004 and look forward to working with you in 2005 as we grow and succeed together.

May You Be Richly Blessed in Family, Friends and Business In This New Year.

Income Property

Fixed Rate Property Loans as of March 2, 2005:

Inspiration

The Almighty God has blessed our land in many ways. He has given our people stout hearts and strong arms with which to strike mighty blows for freedom and truth. He has given to our country a faith which has become the hope of all peoples in an anguished world. So we pray to Him now for the vision to see our way clearly - to see the way that leads to a better life for ourselves and for all our fellow men - to the achievement of His will to peace on earth.

-- Franklin D. Roosevelt

Note Worthy 2004 Closings

	Land Loan $6,500,000 Cash Out Non-Recourse Los Angeles, California
Acquisition, Joint Venture Investment $45,000,000 Pasadena, California 12.5 acres of land
	7 Month Forward Commitment $37,000,000 Lowe's & Michael's Anchors Aliso Viejo, California 25 Year Fixed Rate
A&D Loan & Mez Financing $24,500,000 Chico, California Retail Shopping Center Senior Construction Loan & Mezzanine Financing 93% of Cost
	Mobile Home Park Refinance $4,300,000 Stanton, California 103 Space MHP Fixed Rate Financing
Phase I Construction Financing $4,000,000 Taylorsville Lake, Kentucky 120 Vacation Cottages Long Term Ground Lease
	Land Financing $2,000,000 No Approved Map Central California Coast 12.48 acres of land
Land Refinance $11,400,000 Bakersfield, California Non-Recourse Financing