KKR, Pfeffer Capital, CP Realty to Develop Quality, Long-Term Residential Community for Williston Families

  KKR, Pfeffer Capital, CP Realty to Develop Quality, Long-Term Residential
  Community for Williston Families

     The Ridge at Harvest Hills to Cater to Families and Include Parks &
           Recreation, Ease of Access to Local Offices and Shopping

Business Wire

WILLISTON, N.D. -- November 14, 2012

Answering the call to build permanent housing in one of the fastest-growing
cities in the United States, the City of Williston today announced that
affiliates and clients of Kohlberg Kravis Roberts & Co (“KKR”) including KKR
Financial Holdings LLC (“KFN”), along with co-investors Pfeffer Capital and CP
Realty, have acquired land to develop a high quality, permanent residential
community in Williston, North Dakota. Financial terms of the transaction were
not disclosed.

Ralph Rosenberg, KKR's Head of Real Estate (Photo: Business Wire)

Ralph Rosenberg, KKR's Head of Real Estate (Photo: Business Wire)

“Williston is one of the fastest growing cities in America and we are
dedicated to building a long-term sustainable community. We are thrilled to
work with new partners like KKR, Pfeffer Capital and CP Realty to provide the
quality housing alternatives we need to support the demand created by our
thriving economy,” Ward Koeser, Mayor of Williston, said.

The project, The Ridge at Harvest Hills, includes 164 acres of land
overlooking the city of Williston. Construction of infrastructure for the
current phase is under way and will support development of up to 330
apartments which are scheduled to commence in Spring 2013 plus completion of
lots intended for sale to homebuilders for construction of 500 single family,
townhome, and duplex homes.

The Ridge at Harvest Hills will represent an evolution in housing stock and
community planning for the city as developers and public officials worked
together to include parks, recreation, and open space. Furthermore, the
community was planned to slow or divert commercial traffic to further enhance
the suburban feel of safety and security for its inhabitants. Importantly, and
unlike much of the surrounding land, The Ridge at Harvest Hills is fully
entitled and has immediate access to utilities so the new community can help
solve the city’s near-term housing shortage as well as long-term community

The Ridge at Harvest Hills is ideally located in close proximity to the new
Sand Creek Town Center retail development, the new office complexes of major
oil services firms, the municipal golf course, Wal-Mart and an elementary
school. Creating a new, quality neighborhood to attract families is a key step
in the sustainable development of Williston where an estimated 15,000 oil and
gas professionals are living in various forms of temporary housing including
“man-camps,” RVs and hotels.

“The Ridge at Harvest Hills represents a major investment that will help the
city of Williston meet its current and long-term housing needs,” Governor Jack
Dalrymple said. “The state is doing its part by facilitating greater
development of affordable housing in our oil-producing region and in
fast-growing communities throughout North Dakota.”

Bakken Formation & Employment

Western North Dakota is home to the Bakken formation, which occupies about
200,000 square miles of the subsurface of the Williston Basin, underlying
parts of Montana, North Dakota, and Saskatchewan. The Bakken is well-known to
be a prolific source rock for oil and now natural gas. A 2011 State of North
Dakota study revised the original estimate by the U.S. Geological Survey on
the amount of oil that could be recovered – from 3.0 to 4.3 billion barrels to
over 10 billion barrels. The positive outlook led to a surge in drilling and
production in the Bakken. There are currently approximately 180 drilling rigs
operating in the state and the City of Williston estimates that the next 10
years could see as many as 20,000 wells drilled, resulting in an additional
10,000 – 20,000 new jobs in Williston alone.

Earlier this year North Dakota surpassed Alaska and became the country's
second-largest oil producer behind Texas. In 2011, the average wage in the oil
& gas extraction industry in North Dakota was $89,020, far exceeding the
statewide average of $49,914, according to the North Dakota Petroleum Council.
As a result of the surge in demand and the well-paying jobs, the state’s
unemployment has plummeted to 3%, according to the Bureau of Labor Statistics
release from July 2012.

Ralph Rosenberg, Global Head of KKR’s Real Estate Team, stated: “This is a
long-term investment to support the structural needs of a growing community.
Because of the energy boom, North Dakota has had an influx of new residents
and our experience in the unconventional oil and gas business gives us
confidence that this is not merely a temporary development. While Williston
does have a supply of short-term housing, the city suffers from a shortage of
sustainable communities that encourage employees to move their families or
start them and reside permanently in Williston. The Ridge at Harvest Hills
will be a true neighborhood, unlike any in the area, that solves a dire
housing shortage and supports Williston’s thriving economy.”

John Pfeffer stated: “Our interest in investing in the technology-driven
revolution in tight oil and gas production led us to Williston and the vision
to create a substantial, attractive and permanent new neighborhood for
families in this exciting and friendly town. Teaming up with world-class
partners KKR and CP Realty makes achieving this vision possible. We are also
tremendously grateful to the City of Williston for the incredibly welcoming
framework they provide for entrepreneurs to succeed in.”

Mark Falcone, Co-CEO of CP Realty stated: “We are thrilled to be offering this
fast growing community a neighborhood which will assist in the region’s
efforts to recruit the talent and leadership necessary for this economy to
continue its robust growth.”

Simpson Thacher Bartlett LLP served as legal Counsel to KKR.

Greenberg Traurig LLP and Moye White LLP served as legal counsel to and
Turn-Key Partners advised affiliates of Pfeffer Capital.

About KKR

Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading
global investment firm with $66.3 billion in assets under management as of
September 30, 2012. With offices around the world, KKR manages assets through
a variety of investment funds and accounts covering multiple asset classes.
KKR seeks to create value by bringing operational expertise to its portfolio
companies and through active oversight and monitoring of its investments. KKR
complements its investment expertise and strengthens interactions with
investors through its client relationships and capital markets platform. KKR
is publicly traded on the New York Stock Exchange (NYSE: KKR). For additional
information, please visit KKR's website at www.kkr.com.

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