Broadmark Real Estate Lending Fund II

(“Fund II”)

August 2015

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Background

� Pyatt Broadmark Management, LLC (“PBM”) is the

manager of the Pyatt Broadmark Real Estate Lending

Fund (“Fund I”)

� Fund I wrote its first loan in August 2010 and has a 5

year track record.

� Fund I makes short-term, first lien mortgages against real

estate projects in the Pacific Northwest

� Roughly $132.6M AUM as of July 1, 2015

� 11.76% annualized return since inception

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Monthly Cash Distributions

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Historical Cash Distributions through July for Fund I

Note: Return data as of July 31, 2015 Assumes reinvestment.

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Fund II Summary

� The PBM team manages a second nearly identical fund (“Fund

II”) based in Denver, CO.

� Fund II also makes short-term, first lien mortgages against real

estate assets but is focused in the Mountain West (Colorado,

Utah, Wyoming) with Denver as the core market

� The goals of Fund II are to:

� minimize the risk of principal loss

� provide investors with a high-yield debt investment

� maintain near-term liquidity

� Fund II was launched in May 2014 by the PBM team. PBM

operates Fund II as Broadmark Real Estate Management

(“BREM”) 4

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Fund Advantage vs Individual Loans

� Provides a high benefit to cost way to invest in loans

� Investor avoids the hassle of qualifying loans on the front end

� Consistent and proven management team monitors each loan and addresses and cures defaults

� Offers a diversified loan portfolio with well over 100 loans

� Measurable performance with a 5 year history for Fund I

� Fund offers either monthly interest paid by ACH or automatic reinvestment

� Audited financial statements and monthly reporting

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Denver: RE Market

� Rated the 5th healthiest real estate market for 2014 by Zillow

� Home affordability for Denver at the end of in 2013 was 146

� A median income is 146% of what is required to qualify for a home loan ona median priced house

� Comparatively, San Francisco & Los Angeles are 72 & 79 respectively

� Colorado is a big oil producer but the economy is well diversified

� Mining which includes oil & gas extraction and all supporting activities isless than 2% of Colorado’s labor market.

� Colorado’s unemployment rate is 4.2% (Nov. 2014)

� “During the holidays we typically see slowing in the housing

market, but this year, homebuyers kept the market more active

than usual” - Aldo Svaldi, The Denver Post, Jan 7, 2015 6

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Fund II - First 8 Months

Fund II was launched in May 2014 and outperformed Fund I

during its first 12 months in operation

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Fund II: First 12 Months

Annualized Return 11.76%

Monthly Std Dev 0.20%

Fund I: First 12 Months

Annualized Return10.96%

Monthly Std Dev 0.18%

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Fund II - First 15 Months

With approximately $15M in AUM (July 1, 2015), BREM has proven

demand for loans in the Mountain West.

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Loan Economics

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� Fund II Loan economics:

� Avg. Life of Loan 8.9 months

� Avg. Origination fee: 4.0 %

� Avg. Interest rates 12.4 %

� Annualized loan return target 18% to 20%

� Out of 359 loans written across both funds, only three have been put intoforeclosure.

� Of these foreclosures, two have been completed with no loss of principal.

� The third, a strip center in Spokane, WA, is recently REO (real-estate owned).PBM has engaged a commercial real estate brokerage firm to fill vacanciesand sell the property. Principle owed at the time of foreclosure was 64.3% ofappraised value.

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Current Loan Portfolio: Snapshot

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� Current portfolio

� 33 loans

� Face value of $17.5M

� Appraised collateral of $32.8M

� Repaid portfolio

� 13 repaid loans

� Face value of $2.8M

� Appraised collateral of $4.9M

Max Loan to Value: (65%)

Current Portfolio Loan

to Value

Borrower Equity

Fund II

47%

53%

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Why does this opportunity exist?

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� Historically these types of loans were offered by regional banks

� As a result of the real estate downturn, the remaining regional banks were leftwith too much real estate on their balance sheet

� Surviving regional banks have completely discontinued this type of lendingdue to Dodd-Frank

� Traditional lenders have become strictly cash flow lenders as opposed to assetbased lenders.

“ … Private builders have traditionally relied on small or regional banks for funding. But many ofthose lenders stopped making loans for construction and development during the financial crisisand have been slow to resume…”

Robbie Whelan and Dawn Wotapka, WSJ, July 15, 2013

“Community banks lost 6 per cent in market share between 2006 and mid-2010, during theworst of the crisis. But, since the passage of Dodd-Frank in early 2010, the decline in marketshare has doubled to more than 12 per cent.”

Financial Times, February 8, 2015

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Why does this opportunity exist?

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� Equity partners take a big bite out of profits

� Outside equity partners demand to be paid first

� Outside equity partners still require coupon payments

� 50% or more of the profits

� Borrower type and circumstances

� Small Banks may not be able to lend in the future:

“Dodd-Frank’s regulatory burdens are driving consolidation, and could result in lending markets less able toserve core economic demands”

Marshall Lux, Boston Consulting Group, February 9, 2015

� The outlook on construction activity and demand for our loans looks strong“Overall, forecast results on a construction spending basis is that overall activity for non-residential buildings is predicted to be up 7.7 percent in 2015 and 8.2 percent in 2016.”

Kermit Baker – American Institute of Architects, February 10, 2015

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Diversifying away from volatility

�As the Federal Reserve raises interest rates, financialmarkets will likely become more volatile

�Historically, real estate asset backed loans have had alow correlation to stocks and bonds

�This makes them a desirable investment with whichto diversify a portfolio and potentially provideprotection against shocks to the market

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Investor Terms

� Fund II raises capital through the issuance of membershipinterests in a limited liability company

� $100,000 minimum investment with the current capacity toaccept up to $2M per month

� Investor return:

� Investors receive 20% of origination fee income and 80% of interest

income, less direct fund expenses, e.g. taxes and audit. The balance

represents management fees and operating costs.

�Monthly cash distributions paid directly to investor’s bank account

� Redemption option after 1 year; then quarterly

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Reporting and auditing

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� The Fund II is valued and reported to investors monthly

� All sales through 25 year old FINRA broker-dealer

� Fund audited by Bader Martin P.S., Seattle, WA, a large

regional CPA firm

�2014 audit is available for review

� Loan recording numbers available for independent

review

� Loan files available for inspection in our office

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Why Broadmark:

� Seasoned team with proven management structure

�No leverage

� First position, senior secured loans only

� Consistent Performance

� Personal guarantees required of borrowers

� Rigorous underwriting standards

�Max Loan to Value: 65%

� Regionally focused in the Mountain West

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Appendix

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Underwriting Process

�Our team adheres to a strict underwriting process

�Documents necessary prior to underwriting

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From Borrower� Credit Application

� Operating Agreement

� Business Financials

� Business Tax Returns

� Guarantor Financials

� Guarantor Tax Returns

Collateral Confirmation:� Independent Appraisal Report

� Preliminary Title Report

� Purchase & Sale Agreement

� Itemized Budget Review

� Building Permit, Plans, Specs

� Borrower’s Marketing Plan & Material

� Tax Records & Property Info

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Borrower Testimonials From Fund I

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� Economics

“PBM has financed numerous development, construction, and rehab loans for us. Their

ability to close a loan quickly combined with their prompt draw funding has allowed us to

make bargain purchases and take advantage of vendor and subcontractor discounts.”

� Opportunity Cost

“I really appreciate all you did for us. Having our original construction loan mature before

we qualified for conventional financing could have cost us our business. You stepped up

and helped us. I would recommend you in the future without hesitation!”

� Customer Service

“Pyatt Broadmark separates themselves by doing what they say they are going to do. I have

worked with other private lenders and they do not compare to the service and execution that

Pyatt Broadmark delivers. They will always have a first right of refusal on my future projects.”

“Being a young developer/builder I encounter a lot of challenges. Pyatt Broadmark has been a

valuable business partner to have through the process of guidelines, budgeting, and

management. I know that I can pick up the phone and call these guys at a drop of a hat and

they will always respond and assist me with whatever I need .”

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Team Bios

Jeffrey Pyatt, Founder. Mr. Pyatt has served as Chairman, CEO, or President of several Northwest companiesover the last 22 years, in addition to leading in various capacities within the community.

Mr. Pyatt is an owner of Private Lenders Group, a private lending fund based in Bellevue, Washington. Mr. Pyattserved as President and CEO of Pacific Financial Services Corporation from July 1994 through March 1999. PacificFinancial was an asset-based lender located in Bellevue, Washington. Mr. Pyatt built Pacific from a start-up to beinga leader in its market, before orchestrating the successful sale of the company.

After receiving his undergraduate degree in accounting and a Master of Taxation degree from the University ofDenver, Mr. Pyatt joined the tax department of Moss Adams, a regional CPA firm in Seattle. After leaving publicaccounting, Mr. Pyatt was involved in a number of acquisitions, dispositions and turn-around of companies in theNorthwest. These companies had revenues ranging from less than $1 million to more than $700 million, bothprivately and publicly held.

He has also participated in the initial financing rounds of a number of telecommunications companies and currentlyserves as a Director of 911 ETC, Inc.

Mr. Pyatt is active in the community, both civically and politically. He has served on the boards of three Boys andGirls Clubs in King County since 1984 and other charitable boards. He is a past President of Park Hill Rotary ofSeattle and Eastside F.C. He currently serves on the board of directors of King County Sexual Assault ResourceCenter and is a founding member of Lake Washington Velo.

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Team Bios

Joseph Schocken, Founder. Mr. Schocken is the founder and president of Broadmark Capital, LLC and its predecessor,

Broadmark Capital Corporation. He is an honors graduate of the University of Washington and holds an MBA from Harvard

University. He holds Series 7, 24, 63 and 79 FINRA registrations.

With over 30 years as an investment banker, Mr. Schocken has extensive knowledge of the financial services industry and

established relationships with both strategic and institutional investors in the United States and internationally. He has guided

Broadmark's corporate finance practice through more than 75 private equity transactions with an aggregate value of well over

$1 billion. These projects have included private placements, debt offerings, mergers, asset purchases and public offerings in a

broad array of industries including technology, life science, broadcasting and travel.

Prior to forming Broadmark Capital in 1987, Mr. Schocken was a partner in several private investment banking firms,

including a small New York Stock Exchange member firm where he managed the corporate finance and real estate

departments.

Throughout his career as an investment banker, Mr. Schocken has also been an active private investor and has worked with a

number of exceptional entrepreneurs.

As an investor, board member and mentor, Mr. Schocken has played a pivotal role in the development of numerous

significant enterprises. Notable examples include Bennett Environmental (AMEX: BEL), Optiva (acquired by Phillips) and

Universal Access, Inc. (NASDAQ: UAXS), HipCricket, Inc., and Omeros Corporation (NASDAQ: OMER). In each case,

Mr. Schocken served as an influential advisor to management in the development of a capital formation strategy that

positioned the company for growth. Broadmark Asset Management Company, which he helped form, received both direct

investment and a $100-million allocation from CALPERS in 2000.

Mr. Schocken is a member of the National Advisory Board of the Democratic National Committee and an avid cyclist.

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Team Bios

Adam Fountain, Managing Director. Mr. Fountain graduated with a B.A. in International Relations from Stanford

University in 2001. He holds Series 7, Series 63, Series 66 and Series 79 FINRA registrations. Mr. Fountain's responsibilities

at Broadmark include investor and client sourcing, and transaction management across all of Broadmark's focus areas

including life sciences, technology, new media, middle market, real estate, telecommunications and financial services. His

current interests include life science companies that have demonstrated proof of concept, particularly drugs with clinical data

and devices with at least animal data, and some mitigation of risk, e.g. shortened regulatory paths, 505(b)2, etc. Areas of

interest in technology include SaaS, new media, and any revenue generating high growth companies. Responsibilities also

include all activities related to Broadmark's merchant banking function: identifying and qualifying potential direct investments

and producing Broadmark white papers. In addition to these responsibilities, Mr. Fountain is a part owner of Pyatt

Broadmark Management, LLC and responsible for their investor relations and fund management. He also has a significant

support role for Broadmark relating to regulatory compliance.

Prior to joining Broadmark, Mr. Fountain was an Associate at L.E.K. Consulting in Los Angeles, CA from 2001 through

2003, an international strategic consulting firm headquartered in London. While at L.E.K., he worked primarily in the life

sciences practice. Key projects included developing a product marketing and distribution strategy for an established European

pharmaceutical company, formulating a product development and partnering strategy for a start-up biotechnology company,

and preparing for the likely adoption of a new product in the medical device industry.

Outside of Broadmark, Mr. Fountain was a co-founder of WINGS: The Washington Medical Technology Angel Network,

and formerly served as a Director. In addition to his role at WINGS, he has served on the Executive Committee for the

WBBA’s annual life science conference for several years. He is active in his church and resides north of Seattle with his wife,

Emily, and their son, Samuel, and daughter, Stella. He enjoys riding his bike, cooking, brewing, fantasy baseball, and

beekeeping.

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Team Bios

Tom Gunnison, Vice President of Loan Origination. Mr. Gunnison was born and raised in Kansas City with histwo brothers and two sisters. He attended St. Louis University on an academic and athletic scholarship where hegraduated with honors with a degree in International Business and a minor in Spanish. Mr. Gunnison then attendedthe School of Law at Washington University in St. Louis on an academic scholarship where he also graduated withhonors. Upon graduation, he moved to Denver, Colorado where he practiced law at The Hustead Law Firm, avenerable litigation boutique. Among other areas of practice, The Hustead Law Firm specializes in commercial andconstruction litigation, arbitration and mediation and creditors’ rights and bankruptcy. Mr. Gunnison comes toBroadmark from Re/Solve Funding, a private real estate lender based in Colorado. At Re/Solve he was responsiblefor loan originations and account maintenance. While with Re/Solve, he financed more than $6 million ofcommercial loans. Mr. Gunnison brings a wealth of knowledge regarding the local Denver real estate market toBroadmark.

Mr. Gunnison is actively involved in the legal and real estate communities in/around the Denver metro area. Heenjoys Kansas City Royals baseball, reading historical fiction, trail running, skiing, and all manner of outdooractivities.

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Team Bios

Joanne Van Sickle, Controller. Ms. Van Sickle has served as Controller for Private Lenders Group since 2005.Ms. Van Sickle began her career in 1983 as a CPA in the auditing department of Touche Ross.

Between 1991 and 2004, she maintained a private accounting practice, working with small companies, mainly in theconstruction, real estate, and retail industries.

She continues to act as the part time administrator for The Glaser Foundation, a local private foundation with $15million in assets, a position she has held since 1991. The foundation makes up to 100 grants each year to localcharitable organizations providing direct line services, primarily to children and the elderly in the Pacific Northwest.

Ms. Van Sickle has lived in Bellevue since 1985 with her husband and three sons. Her two older sons are nowserving in the US Navy.

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Risk Factors & Disclaimers

Prospective investors should be aware that an investment in Fund II is speculative and involves a high degree ofrisk. Identified risks include a dependence on senior management, the quality and quantity of potential loansavailable given the Fund’s stated investment criteria, real estate valuations and market dynamics, borrower risks,interest rate risk, regulatory risk. Additional risks and uncertainties not presently known to Broadmark Real EstateManagement (“BREM”), manager of Fund II, or which BREM currently deem immaterial, may also have an adverseeffect on the performance or success of Fund II. In particular, the Fund’s performance may be affected by changesin market or economic conditions and in legal, regulatory and tax requirements. Loans in Fund II are consideredLevel III assets, meaning there is no active secondary market and no observable pricing mechanism. Fund II doesnot anticipate a secondary market for these loans developing. Thus, pricing of loans is at par unless the loan isimpaired. An immediate 10% write down against all capital accounts is taken on any loan in default. Income isdistributed or reinvested monthly.

This material has been prepared as a matter of general information. It is not intended to be a complete descriptionof any security or Fund mentioned and is not an offer to buy or offer to sell any security. All facts and statistics arefrom sources believed reliable, but are not guaranteed as to accuracy. Some of the information in this document maycontain projections or other forward-looking statements regarding future events or the future financial performanceof the Fund II. We wish to caution you that these statements are only estimates and that actual events or results maydiffer materially. Broadmark Capital, LLC has been engaged by BREM, manager of Fund II, to assist in raisingcapital for Fund II. Broadmark will receive a cash commission upon success. For further detail, please see thecomplete set of closing documents.

Broadmark Capital, LLC – August 2015 25

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Risk Factors & Disclaimers, cont.

The Broadmark Real Estate Lending Fund II (“Fund II”) units may be sold only to “accredited investors,” whichfor natural persons are investors who meet certain minimum annual income or net worth thresholds; the units arebeing offered in reliance on an exemption from the registration requirements of the Securities Act and are notrequired to comply with specific disclosure requirements that apply to registration under the Securities Act; theSecurities and Exchange Commission has not passed upon the merits of or given its approval to the units, the termsof the offering, or the accuracy or completeness of any offering materials; the units are subject to legal restrictionson transfer and resale and investors should not assume they will be able to resell their units; investing in unitsinvolves risk, and investors should be able to bear the loss of their investment; the units offered are not subject tothe protections of the Investment Company Act; the performance data presented here represents past performance;past performance does not guarantee future results; current performance may be lower or higher than theperformance data presented; Fund II is not required by law to follow any standard methodology when calculatingand representing performance data; the performance data may not be directly comparable to the performance ofother funds or investment products; performance Fund II or any other Fund presented here are net of fees, assumesreinvestment and is current as of July 31, 2015.

Broadmark Capital, LLC – August 2015

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Sample Loan Profile

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Colorado Springs, CO - Loan 2015-023

In June 2015 BRELF II wrote a $941,914 construction loan for phases 3 and 4 of a

townhome project, each phase to include 4 units. The completed value of phases 3 and 4

is $1,520,000, giving Fund II a loan to value ratio (LTV) of 62%. Fund II also provided

the financing for phases 1 and 2 of this project. Phase 1 has been sold out, and capital

has been returned to the Fund. Phase 2 construction is complete, and is expected to be

sold out by the end of July. The average price of the units is $189,000. The project meets

an increasing demand for homes at this price point. This area of Colorado Springs is near

interstate access and approximately 7 miles from the downtown corridor where most

employers are located. There are also good public schools, parks, retail and grocery

stores. The cost to rent has been increasing, and is now higher than a typical mortgage

payment on one of these townhomes. Other options for home ownership in this

neighborhood at this price are older homes that have not been updated, making this

project attractive to buyers looking for a nice new home in a convenient location at an

affordable price.

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Contact Info

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Adam J. Fountain

Broadmark Capital, LLC

1800 One Union Square

600 University Street

Seattle, WA 98101

(206) 623-1200, x120

afountain@broadmark.com