Interview with: Ann L. Schmitt, President and CEO, James W. Creamer, III, CFO - featuring: their 100% financing for rapid retail expansion, operating in the niche that is small pad retail market in the commercial real estate industry.

Across America Real Estate Corp. (AARD-OTC: BB)

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100% retail financing solutions propels Across America Real Estate in ever-expanding retail real estate market

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Commercial Real Estate Finance
(AARD-OTC: BB)


Across America Real Estate Corp.

700 17th Street – Suite 1200
Denver, CO 80202
Phone: 303-893-1003

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Ann L. Schmitt, President and CEO

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James W. Creamer, III, Chief Financial Officer

Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published - January 18, 2007

BIO:
Ann L. Schmitt
President & CEO

Ann brings more than 20 years experience in key leadership roles within the financial services industry. Before joining Across America she was President of Aimbridge Lending, the country’s second largest auto loan originator and processing company for small to midsized financial institutions, serving 16 major U.S. markets. Prior to that, she led global risk solutions and management at MasterCard International. Ms. Schmitt has also had senior leadership positions with Citibank, US Bank, and Dove Consulting.

James W. Creamer III, CFA
Chief Financial Officer

Jim brings fifteen years of experience in both commercial and investment banking with extensive background in institutional and retail oriented capital markets. He came to Across America from Vectra Bank Colorado, NA where he served as Vice President of Commercial Banking. Jim received a Bachelors of Science degree from the Arizona State University and has earned the Chartered Financial Analyst designation.

Company Profile:

Based in Denver, Colorado, Across America Real Estate Corp. (OTC BB:AARD.OB - News) partners with national retailers and their developers to provide 100% financing for rapid retail expansion. The Company operates in the niche that is small pad retail market in the commercial real estate industry. Across America provides guidance and creates financing solutions for increasing retail productivity and profit. Please visit us at our website www.aard.us.

Ms. Schmitt: “What attracted me to Across America, aside from the fact that it has a great management team and a very strong leadership at the board level was that I was very excited about the business prospects. I read, studied, and did all the best research before joining Across America, to help me make an informed decision. What I was excited about was the unique niche that this company occupied in the commercial real estate lending market. We provide 100% financing for small box retail real estate projects. I could not find in my research, anyone that could exactly replicate our business model, as well as replicated it in a market that is so attractive and as growing as ours is. With all of those factors, it looked like a great opportunity for me to make this jump as the next step in my career.”

CEOCFO: Mr. Creamer, will you tell us about your background with the company?
Mr. Creamer: “I have been with across America just over a year, from July of 2005. My background is in investment banking; I was with Stock House for a number of years and I moved into true investment banking. I also have some commercial real estate lending experience. This is a job that really encompasses a lot of my past experiences and there is an exciting opportunity here.”

CEOCFO: Will you explain the business model of 100% financing?
Ms. Schmitt: “What we offer in our business is that we work with retailers, developers, to construct and accelerate growth in their businesses. A number of retailers nationwide are on a significant growth path and those retailers turn to preferred developers in the industry to do their construction. Developers may be able to, with their own financing and capital resources, do a few projects a year, but using our financing solution, they are able to do many projects a year and expand their reach and range for the retailer. Therefore, the way we see it is that it is an all around win because the retailers are able to expand their footprint more rapidly and the developers will do and complete more projects in the course of a year or even over a few years.”

CEOCFO: Are you working with the developers as opposed to the actual retailer?
Ms. Schmitt: “We are working with both the developer and the retailer. We work with commercial brokers, developers and the retailers, because if you unplug any one of the three out of the process, it is difficult to get anything done. When we actually structure our financing, it is structured with the developer. Most of the retailers that we deal with are in the sale lease back market, which means that they are looking for someone to build the real estate, do the construction and keep that element of it off their balance sheet. The lease back piece means that they are willing to sign a long-term lease for the location if it is a location that they want and feel they are able to grow and develop. However, they do not want to hold the real estate, so they would rather have a long-term lease in place than own it. The developer on the other hand is really a build for suit, so they are building the locations to suit the retailer and at the end of the project, they would like to take their exit on it and be able to move on to the next endeavor. We, through our capital program and financing structure, allow them to do that.”

CEOCFO: You mentioned that it is a unique model; what is the typical way and how did you learn of this?
Mr. Creamer: “The typical way is that the developer would have to go to a traditional source of financing. They would go to a bank where they would have to put up a percentage of equity, about 25%, and they would have to guarantee construction. What we do since we have access to capital is we take that away from them and free them up to not only limit their risk, but be able to do more deals because they are utilizing our capital.”

CEOCFO: How do you choose your projects?
Ms. Schmitt: “There are a number of ways to do it. We like to partner with the larger national retailers that have good credit and larger scale plans for national retail development. We like to establish relationships with the brands that are expanding their retail footprint quickly. Those types of organizations typically have developers that they have worked with a long time and these developers specialize in building to suit projects for these particular retailers. We try to work with established brands as well as developers that have developed expertise in the development field for their brands. That is not to say that we do not look for emerging brands or emerging developers. However, we are trying to expedite the construction that we do on the project and move on. We are fortunate to have a sales organization with a lot of relationships and opportunities that they have been able to attract. Certainly, our 100% financing offer for the developers is a very compelling business opportunity for them.”

CEOCFO: Are there geographic areas where you concentrate, and if so why?
Ms. Schmitt: “The areas where we have concentrated at this point have been in the southern states up to the mid Atlantic and then down through the south, south-central, southwest and into the Pacific Northwest. We concentrated in those areas because they are high growth markets and continue to be stronger growth markets in the housing area. Retail commercial construction tends to lag housing at least for the type of projects we engage in, by one to two to three years. Therefore, there are still some very strong growth prospects in those markets and that is where we have focused many of our resources. With that said, if on an opportunistic basis, there are other things in other markets or brands that want to go different places with us, there is certainly nothing that precludes us from doing business in other markets.”

CEOCFO: How are you sure you are working with credit-worthy people and what steps do you take to ensure that you are not burned?
Mr. Creamer: “There are a few components that we have in place to mitigate the risk. We are not speculators and so we always have the lease in place before we do anything. With regard to credit-worthy tenants, we tend to stay with the name brand, recognizable, franchise-type companies. It is fairly easy to get the financial low-down on them and see what they are selling for on the open market.”

CEOCFO: What are you looking for two or three years down the line for the company?
Ms. Schmitt: “From an overall business perspective, we consider this a marketplace where we are in a sweet spot, particularly at this point in time where there have been some fairly significant changes to the regulatory environment for banks doing real estate lending. We think we are poised to be in a great position to be able to expand our business significantly with the change because there will be a pull back among banks, particularly the community banks and mid tier banks which have come close to or has exceeded the recommended ratios that the regulators have put forth. We think that our alternative means of financing in the marketplace is very attractive and will continue to become more and more. The other thing from our business is that we see a view for growth amongst retailers, both inside and outside their current geographic footprint. There does not seem to be much of a pull back in terms of the retail aside and as housing has slowed, there is a lag effect for commercial development and we think we are poised to catch that as well. The recent numbers that have come out by the reconstruction data, suggested that in 2007 they are forecasting $89.4 billion dollars in commercial construction; mainly retail. Therefore, we think there is plenty of room to grow from where we are today and we are looking forward to being able to capture those opportunities, work with our investors to be able to cultivate and grow our business.”

CEOCFO: You have mentioned that you have a good sales staff; do you need to add new members to your management or sales team or are you pretty well settled now?
Ms. Schmitt: “Any company that says that they are pretty well settled probably is not thinking in terms of the next big opportunity that they could be addressing. We are always looking to add great people to our team with the energy, motivation, and vision that we have to really turn this into a market leader in this specific niche.”

CEOCFO: In terms of the interest rate environment, does it matter to you or are you just passing along the cost?
Mr. Creamer: “To a great degree, we are able to pass along the costs, we are not very concerned about interest rates, but I think that if there were an interest rate drop that might be an issue. However, for the most part it is not as significant issue at this time.”

CEOCFO: What is the financial picture of the company?
Mr. Creamer: “We are growing. We grew from 2004, which was really our first full year; we did $1.8 million dollars in revenue and we were slightly profitable. In 2005, we did almost $8 million in revenue; again, we were slightly profitable. We made $77 thousand and this year we are continuing that. We have $6 million in revenues that we announced and we just continue to grow. We cannot guarantee profitability, but our model seems to lend us in the long-term to be profitable.”

CEOCFO: Why is this a good time for investors to be interested and what should they know that might not jump off the page when they are first looking at the company?
Mr. Creamer: “I think that with the regulatory change that we see now, that we will have a great opportunity to capture a lot of market here. As far as investors go, in my experience, if you can combine both growth and profitability, you have a good combination for a positive stock valuation. Therefore, I think the growth that we saw from 2004-2005, was just the tip of the iceberg and we should be able to continue that substantially going forward.”

CEOCFO: What should our readers remember most about Across America?
Ms. Schmitt: “If I could take three things they would be that Across America is operating in a niche that is large and is going to continue to grow certainly for the foreseeable future, based upon all the available industry data. I think they should know that we are flexible, nimble and very committed and focused to serving this market and all the constituents that are in this market; developers, retailers and the broker community as well that participate in all the transactions.”


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“What we offer in our business is that we work with retailers, developers, to construct and accelerate growth in their businesses. A number of retailers nationwide are on a significant growth path and those retailers turn to preferred developers in the industry to do their construction. Developers may be able to, with their own financing and capital resources, do a few projects a year, but using our financing solution, they are able to do many projects a year and expand their reach and range for the retailer. Therefore, the way we see it is that it is an all around win because the retailers are able to expand their footprint more rapidly and the developers will do and complete more projects in the course of a year or even over a few years.” - Ann L. Schmitt

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