The Hub Development Site

Home , Silicon Slopes, Utah Valley

1421 West 800 South | Orem, UT 84058 Offering Memorandum THE HUB DEVELOPMENT SITE

• Fully entitled and immediately construction ready • High-density student housing

• 1,044 Beds (282 Units)

• Located directly across from UVU -- Utah’s Largest and Fastest Growing University

• Adjacent to Orem UTA Frontrunner Station, Bus Station, and the Site of a Brand New Pedestrian Bridge (Due Fall 2019)

• 20 minutes from Silicon Slopes in Lehi. Table of Contents

> Executive Summary �� 3

> Property Summary �� 8

> Market Summary ��16

The Hub | Offering Memorandum P. 2

THE HUB DEVELOPMENT SITE Offering Memorandum > Executive Summary EXECUTIVE SUMMARY

Property Overview

> THE PROPERTY > THE MARKET

The Hub is a fully-entitled and construction-ready student housing site that will feature 1,044 student beds • Utah’s Largest and Fastest-Growing adjacent to Utah Valley University (UVU) -- the largest and fastest-growing university in Utah. UVU is located in University: 7.1% UVU Enrollment Growth from Orem, Utah -- the #1 best-performing economy in the nation in 2017 (Milken Institute) -- and is located about Fall 2017 (37,282) to Fall 2018 (39,942). ten minutes from Brigham Young University. Due to its proximity to UVU’s campus and its market-leading modern finishes and amenities, The Hub will immediately be one of the most-desirable properties among • Fall 2018 UVU Enrollment is Outpacing students at UVU, where there is a significant demand for additional student housing. Growth Projections by 6.3%.

The 282 units at The Hub will consist of one, three, and four private bedroom floor plans, and will feature all • 2025 UVU Enrollment is projected to private bathrooms -- which will immediately make the property the first-of-its-kind in Utah’s student housing approach 50,000 by 2025.. market. Almost all apartment units at The Hub will be leased by the bed on 12-month leases. • Orem/Provo is the #1 Best-Performing UVU is already the largest university in the State of Utah and, based on a UVU study two years ago, its Economy in the Nation (Milken Institute, 2017) enrollment was projected to grow more than 25% by 2025. As of Fall 2018, however, actual enrollment is • ULI #3 Emerging Market in 2018 outpacing this previous projection by 6.3%. From Fall 2017 to Fall 2018 alone, there has been a 7.1% growth in enrollment. Due to this rapid pace, the university is currently at enrollment levels that, just two years ago, it did • #1 Highest Job/Population Growth in US not project to reach until almost Fall 2020. Because of both the shortage of student housing and the limited land around the university that could be developed into student housing, The Hub is well-positioned to continue • Current Market Occupancy for Purpose-Built to be fully-occupied and to experience ongoing rent growth for many years to come. Student Housing at over 99%

The Hub | Offering Memorandum P. 4 EXECUTIVE SUMMARY

Executive Overview

Property The Hub Name:

Property 1421 West 800 South Address: Orem, UT 84058

Price: $15,950,000

Status: Fully Entitled/Permit-Ready

Property Student Housing Type: Development Site

Beds 1,044 Beds (282 Units)

APN: 41-899-0001

7.04 Acres Site Size: (306,756 SF)

The Hub | Offering Memorandum P. 5 EXECUTIVE SUMMARY

The Strategic Core of UVU Student Housing

The Hub Development Site is perfectly positioned at the core of what has now become the largest concentration of student housing available at Utah Valley University--the fastest growing university in Utah. As the beneficiary of a strategic unified effort by UNIVERSITY DOWNS LAND state, local, and university officials, The Hub sits (PROPOSED DEVELOPMENT) directly next to the Orem Intermodal Center and the New Orem Pedestrian Bridge, making it a uniquely New Covered Pedestrian Bridge. PARKWAY LOFTS (2016) Completion Due in Fall 2019. pedestrian-friendly environment for walking, cycling, catching a free shuttle, or riding the train. This site truly is the ideal gateway to access the main UVU East WOLVERINE CROSSING (2003) Campus, the expanding UVU West Campus, and Utah’s fast growing employment center--the Silicon Slopes.

While historically there has been a limited supply of dedicated student housing at the university, the rapid growth of the university has led to a major increase in demand for the product. This demand can no longer E be supported by surrounding conventional apartments. The Orem Intermodal Center--and the new development of student-focused projects like Promenade Place and The Hub-- are ensuring indefinitely that this area will continue to have a gravitational pull for students at the largest university in the state. PROMENADE PLACE (2017)

The Hub | Offering Memorandum P. 6 EXECUTIVE SUMMARY

The Strategic Core of UVU Student Housing

UVU Vineyard Expansion Campus

UVU Expansion Land

New Covered Pedestrian Bridge. E Completion Due in Fall 2019.

The Hub | Offering Memorandum P. 7 THE HUB DEVELOPMENT SITE Offering Memorandum > Property Summary PROPERTY OVERVIEW

The Hub

The Hub is a fully-entitled and permit-ready luxurious and modern student housing project that is positioned to set a new standard for Utah’s student housing market. The development will be the most modern and thoughtfully amenitized student-focused project in the market and will deliver just in time to take full advantage of its uniquely strategic location next to the forthcoming pedestrian bridge connecting UVU with the Orem Intermodal Hub..

UNIT MIX AND BASE RENTS UNIT TYPES # of Beds # of Units BASE RENT PER BED ANNUAL RENT Building A - 3 Bed x 3 Bath 27 9 $625 $202,500 Building A - 4 Bed x 4 Bath 600 150 $625 $4,500,000 Building B - 1 Bed x 1 Bath 25 25 $1,050 $315,000 Building B - 4 Bed x 4 Bath 392 98 $625 $2,940,000 Total/Average 1044 282 $635.18 $7,957,500

Projected rents based on 3rd party market studies and current market rent surveys

The Hub | Offering Memorandum P. 9 PROPERTY OVERVIEW

Building Elevations

The Hub | Offering Memorandum P. 10 PROPERTY OVERVIEW

Site Plans

BUILDING B Unit / Bedroom Counts

Level 2 18 4 Bedroom Units 72 Beds 0 3 Bedroom Units 0 Beds 5 1 Bedroom Units 5 Beds 23 Total 77 Beds Levels 3 - 6 (per ﬂoor) 20 4 Bedroom Units 80 Beds 0 3 Bedroom Units 0 Beds 5 1 Bedroom Units 5 Beds 25 Total 85 Beds Total: Level 2 77 Beds Level 3 85 Beds Level 4 85 Beds Level 5 85 Beds Level 6 85 Beds Total: 417 Beds

BUILDING B Unit Count Totals: 4 Bedroom Units = 98 1 Bedroom Units = 25

BUILDING A Unit / Bedroom Counts

Level 26 4 Bedroom Units 104 Beds 1 3 Bedroom Units 3 Beds 27 Total 107 Beds Levels 3 - 6 (per ﬂoor) 31 4 Bedroom Units 124 Beds 2 3 Bedroom Units 6 Beds 33 Total 130 Beds Total: Level 2 107 Beds Level 3 130 Beds Level 4 130 Beds Level 5 130 Beds Level 6 130 Beds Total: 627 Beds

BUILDING A Unit Count Totals: 4 Bedroom Units = 150 3 Bedroom Units = 9

The Hub | Offering Memorandum P. 11

method studio PROPERTY OVERVIEW

Floor Plans

> 1 BED X 1 BATH (25 BEDS/25 UNITS) > 3 BED X 3 BATH (27 BEDS/9 UNITS)

The Hub | Offering Memorandum P. 12 PROPERTY OVERVIEW

Floor Plans

> 4 BED X 4 BATH (992 BEDS/248 UNITS)

The Hub | Offering Memorandum P. 13 PROPERTY OVERVIEW

The Hub: Amenities

The Hub will be among the most modern available student housing in the area. It will have excellent amenities and 100% private bedrooms and private bathrooms, which is unmatched by any other student housing projects in the market.

> IN-UNIT AMENITIES > COMMON AREA AMENITIES

• Private Bathroom for 100% of Bedrooms • Pool

• Natural Light • Clubhouse

• Nine-Foot Ceilings • Hot Tub

• Washer/Dryer in Each Unit • Gym

• Balcony for Most Units • Lounge Rooms • Game Rooms • LVT and Carpet Flooring • Start-Up & Co-Work Spaces • Microwave & 36-Inch Refrigerator • Theater • Electric Range Oven • Study & Conference Rooms • Music Rooms

• Recording Studio • Pajama Lounges • Art Rooms • Zen Rooms • Bike Storage • Yoga Studios • BBQ Area

The Hub | Offering Memorandum P. 14 PROPERTY OVERVIEW

The Hub: Amenities

The Hub | Offering Memorandum P. 15 THE HUB DEVELOPMENT SITE Offering Memorandum > Market Summary MARKET SUMMARY

Area Overview

> THE MARKET: > PROVO-OREM METRO AREA

The real estate market continues to be extremely robust Provo-Orem Metro Area has a population of 613,430 people with a median age of 24.7 and a median household for the Provo-Orem MSA, which been touted as the income of $64,315. second-best market to invest in housing in 2018 by Forbes Magazine. The young, highly educated, family- The largest universities in Provo-Orem Metro Area are Brigham Young University-Provo, with 7,918 graduates, Utah oriented demographic that dominates the region bodes Valley University, with 5,082 graduates, and Mountainland Applied Technology College, with 2,182 graduates. well for continued multi-family absorption and rent The median property value in Provo-Orem Metro Area is $277,000,w and the homeownership rate is 67.2%. Most growth. More broadly, Provo-Orem was ranked as the people in Provo-Orem Metro Area commute by driving alone, and the average commute time is 19.7 minutes. best performing economy in 2017 by the Milken Institute, due in large part to strong job growth (extraordinary low unemployment of 2.95%) and the competitive cost of doing business compared to coastal primary markets, without having to sacrifice accessibility to lifestyle and well-being that is afforded in close proximity to the Rocky Mountains. Additionally, Utah continues to prove fiscal prudence and maintains a AAA credit rating by all three major rating agencies—one of ten to receive the credential which will continue to prove a major competitive advantage over other markets.

> OREM, UTAH

Orem has a population of 93,220 people with a median age of 25.9 and a median household income of $56,376. Between 2015 and 2016 the population of Orem grew from 91,697 to 93,220, a 1.66% increase and its median household income grew from $55,166 to $56,376, a 2.19% increase.

Utah Valley University is Utah’s largest university by enrollment, producing 5,082 graduate in 2017.

The median property value in Orem is $215,200, and the homeownership rate is 60%. Most people in Orem commute by driving alone, and the average commute time is 16.7 minutes.

The Hub | Offering Memorandum P. 17 MARKET SUMMARY

Utah County Conventional Apartment Overview

For the last approximately 10 years, Utah County Currently, about 33% of all households in has been known for its strong employment growth, Utah County are renters. About 42% of its low vacancy rates, and its steadily increasing the rental units are single family homes or rental rates. According to a recent rent survey mobile homes; 23% are in two to four- highlighted by Western States Multifamily, recent units structures. The remaining 35% are occupancy data of over 5,300 in approximately in structures with five or more units. thirty modern stabilized apartment projects in the county showed vacancy at 4.5%. A large study toward the end of 2017 even showed that average Utah County rental rates had grown to a higher level than its larger Salt Lake County neighbor.

Apartment market conditions have been strong Source: Western States Multifamily since 2009. Currently, vacancy rates in Utah County average about 4% to 5%. Rental rates have been increasing at about 5% annually since 2010. With Utah County expected to nearly double in size over the next 30 years, this trend is expected to continue. Several new apartment projects have been developed over the past few years- including the subject property’s neighbor, Parkway Lofts. All of these projects have experience a quick lease-up. Much of the increased demand for apartments can be attributed to the weakness of the “for sale” housing market, which has led to strong growth in the number of renter households. Western States Multifamily study of the market stated that there are currently about 55,664 occupied rental units in Utah County. This is projected to increase to 61,648 by 2021, an average annual increase of about 1,995 renter households. Strong trends in job growth (despite a nation- leading 2.5% unemployment rate) and population increased have led to increased demand for rental housing in the area.

The Hub | Offering Memorandum P. 18 MARKET SUMMARY

Utah Valley Population Projections

The Hub | Offering Memorandum P. 19 MARKET SUMMARY

Utah Valley University

> FOUNDED: 1941 > STUDENT HOUSING: UVU does not have On-Campus 2016 UVU ENROLLMENT GROWTH PROJECTIONS Housing. The university website states: “Utah Valley Year Fall Head Count Fall FTE Annual Head Count Annual FTE > LOCATION: Orem, Utah University helps to establish revenue within the local 2016 34,964 23,815 37,411 25,524 economy by not competing against the local housing 2017 36,245 24,712 38,782 26,459 > HISTORY: Originally founded in 1941, the school was ** 2018 37,577 25,644 40,207 27,431 market. Through off-campus housing we believe UVU 2019 38,960 26,614 41,687 28,441 renamed Utah Valley State College in 1993 and began engages the community in mutually beneficial 2020 40,398 27,622 43,225 29,491 awarding four-year degrees. The Utah legislature collaboration while students are here attending 2021 41,802 28,583 44,728 30,515 approved renaming Utah Valley State College as a 2022 43,057 29,446 46,070 31,432 school.” 2023 44,241 30,237 47,337 32,296 university in February 2007 (effective July 1, 2008), 2024 45,372 30,957 48,548 33,122 allowing it to begin offering master’s degrees, although > EMPLOYMENT: UVU is the largest employer in Orem, 2025 46,494 31,618 49,748 33,941 the school continues to place particular emphasis on its with over 1,900 full-time faculty and staff and over two- and four-year degree programs. 3,300 part-time faculty and staff. **The projections above come from an official 2016 UVU enrollment study. However, actual growth over the last two > ENROLLMENT: Utah Valley University is the largest > STUDENT BODY: UVU students represented all 50 years has been even greater than reflected here with actual public university in the state of Utah, with an enrollment US states, the District of Columbia, and 74 countries. Fall 2018 headcount officially reaching39,942 students. of 37,282 students in Fall 2017. UVU will increase by 13,100 students between 2015 and 2025, to a total of > UTAH COUNTY: Utah County’s population doubled approximately 46,500 students, and will reach between 1990 and 2010 and will grow by 60% between 50,000 by 2030. 2010 and 2030. (Actuals)

Actual Fall 2018 Head Count is officially 39,942 students.

The Hub | Offering Memorandum P. 20 MARKET SUMMARY

data-yduf1 X.1 UofU USU WSU SUU SNOW DSUUVU ProjectedSLCCUVU Actual 32451 28986 27236 9598 5414 8991 35126 32133 35126 2016 UVU Enrollment Growth 33228 28986 29367 9905 5604 9798 36397 32335 37282 2017 34247 29566 30730 10222 5819 10665 37742 32985 39942 2018 35246 30157 32123 10549 6063 11541 39141 33658 2019 36078 30760 33505 10887 6340 12530 40594 34348 Utah System of Higher Education 2020 36459 31375 34852 11253 6652 13229 41880 35052 Enrollment Projections for Public Universities, 2016(Actual)—2026

2021 Utah Valley University 36749 32003 36149 11539 7004 13911 43347 35760 50,000 2022 37058 32643 37393 11850 7402 14629 44870 36468 Actual UVU Enrollment 39,942 Students, 2023 6.3% Ahead of 2016 Projection. Weber State University 37512 33296 38587 12182 7849 15433 46451 37168 40,000 University of Utah 2024 Salt Lake Community College 38075 33962 39739 12523 8351 16246 48092 37869 2025 Utah State University 38635 34641 40753 12874 8917 17078 49795 38563 2026 30,000

20,000 Dixie State University

Projected Headcount Projected Southern Utah University data-zFIDP (1) 10,000 TOTAL HEADCOUNT 2018 % CHANGE OVER LAST YEAR Snow College

Utah Valley University 39942 7.11 University of Utah 33023 0.68 Salt Lake Community College 29156 -1.57 Weber State University 28247 1.07 0 Utah State University 27932 0.91 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Southern Utah University 10196 7.69 Year Dixie State University 9950 2.86 Snow College 5514 -0.88 UVU UofU USU WSU SUU SNOW DSU SLCC UVU Actual Utah System of Higher Education (USHE) 183949 2.17

2018 Actual Enrollment at Utah’s Public Colleges and Universities 45,000 39,942 37,500 33,023 30,000 29,156 28,247 27,932

The Hub | Offering Memorandum22,500 P. 21 Headcount 15,000 10,196 9,950 7,500 5,514

Snow College University of Utah Utah State University Dixie State University Utah Valley University Weber State University Southern Utah University Salt Lake Community College

!1 MARKET SUMMARY

UVU Enrollment Growth

50,000 Total Fall Student Headcount History and Projections - Based on 2016 UVU Enrollment Study 50,000 46,494 45,372 Actual Fall 2018 Headcount is 39,942, 44,241 43,057 41,802 6.3% more than projected 2 years ago. 40,398 37,500 38,960 37,577 36,246 37,500 34,978 9,755 9,996 33,211 9,257 9,512 8,987 UVU Expansion Land 31,556 31,332 8,686 30,564 8,376 8,079 7,793 25,000 6,688 7,530 5,814 6,144 25,000 5,735

Fall Headcount Fall 36,498 33,800 34,729 35,617 12,500 31,712 32,815 29,498 30,584 27,448 28,453 12,500 25,742 24,829 25,188 26,523

0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Year Non High School Student Headcount High School Student Headcount

E Actual Fall 2017 Enrollment Student Body Make-up

The Hub | Offering Memorandum P. 22 MARKET SUMMARY

UVU Student Housing Supply and Demand

UVU ENROLLMENT IS OUTPACING OFFICIAL PROJECTIONS

Actual 2017 Enrollment Place of Origin - All Students In an official UVU enrollment study released by the university in 2016, Utah Valley University estimated a projected 10-year growth of about 3.7% annually over the next three years and continuing at an average annual growth of 2.9% Student Origin Students until 2025. Based on this study, the number of students needing housing each year is shown below. Utah County 22,335 60% Utah (Outside UT County) 9,494 25% It should also be noted that, in the two years since this 2016 study, actual enrollment figures from 2017 & 2018 reveal Out of State 4,304 12% that total student headcount growth is outpacing projections by a significant margin. For example, the projected 2018 International 759 2% headcount in the study was 37,577 students while the actual 2018 headcount is officially 39,942 students-- an actual 1-year growth of 7.1%. Unreported 390 1% Total Student Headcount 37,282 100% Projected Student Housing Demand 50,000

Actual 2017 Enrollment Place of Origin - Non High School Students 37,500 Student Origin Students Utah County 15,027 53% 25,000 48,228 49,420 Utah (Outside UT County) 8,156 29% 44,433 45,767 47,025 39,942 41,412 42,941 Out of State 4,229 15% 34,978 37,282 International 751 3% 12,500 22,059 22,624 23,183 18,736 19,426 20,143 20,843 21,469 Unreported 312 1% 16,408 17,205

Total Non High School Headcount 28,475 100% 0 2016 Actual 2017 Actual 2018 Actual 2019 2020 2021 2022 2023 2024 2025 Total Student Headcount Estimated Students Needing Housing

Actual 2017 Enrollment Place of Origin - Estimated Students Needing Housing Student Origin Students Assumptions/Notes Historically, an estimated 25% of local Utah County students Utah County 3,757 live away from home while attending school. Utah (Outside UT County) 8,156 Out of State 4,229 International 751 Unreported 312 Total Students Needing Housing 17,205

The Hub | Offering Memorandum P. 23 MARKET SUMMARY

UVU Student Housing Supply and Demand

2018 Supply of Existing Purpose-Built Student Housing Projects Currently Proposed or Under Construction at Purpose-Built Student Housing Projects at Utah Valley University Utah Valley University Property Beds Project Units Beds

University Towers 256 The Hub— Subject Property | Fully Entitled 282 1,044 Summerwood Condominiums 282

Village on the Parkway 432 University Downs (Proposed) 446 1,200 University Gateway 286 Ventana 428 Palos Verdes (Proposed) 450 1,605 Wolverine Crossing 1,233 Promenade Place 429 Totals 1,178 3,849

Total Current Student Bed Supply: 3,346

Utah Valley University Student Housing Supply and Demand 2018 Through 2021 Demand Beds

Supply Supporting Student Housing Demands in 2018 Actal Enrollment — 2018 39,942 Projected Enrollment Growth — 2018-2021 4,491 Project Beds Percentage of total supply Total Enrollment — 2021 44,433 2018 Purpose-Built Student Bed Supply 3,346 18% Estimated Current Demand — 2018 18,736 Estimated New Demand — 2018-2021 2,107 Conventional Apartments/Other Housing 15,590 82% Estimated Total Demand — 2021 20,843

Totals 18,936 100% Supply Current Supply (Bed) — 2018 18,736

Estimated New Supply (Beds) — 2018-2021* 1,274 Estimated Total Supply — 2021 20,010 Bed Shortage — 2021 833

*Assumes a third of the proposed purpose-built student pipeline is built by 2021

The Hub | Offering Memorandum P. 24 MARKET SUMMARY

Student Rent Comparables

12-Month Year BR Per BA Per Monthly Name Address # of Beds Private Monthly Utilities Occupancy Notes Built Unit Unit Parking Per Bed 1 1 $1,050 3 3 $625 Amounts are projections based on 3rd party Subject The HUB (Projected) Orem - 1044 $58 - $35.00 4 4 $625 expert market studies and market rent surveys. 4 4 $625 1 1 $905 $150 Well amenitized, but currently 15 years old. Orem - Next to subject 2 2 $640 $76 1 Wolverine Crossing 2003 1239 99% $7 Private bed/bath rents are consistent with property 3 3 $640 $76 projections at the subject property. 4 2 $510 $76

0 1 $948 *This conventional apartment property is not Orem - Next to subject purpose-built student housing, but has a large 2 Parkway Lofts 2016 332 Units* $170 Comm package + Usage 90% - property student tenant base due to demand. Well 2 2 $694 amenitized.

0 1 $940 Fewer amenities than subject. Private Orem - Next to subject 3 Promenade Place 2017 429 4 2 $465 $18 + Usage 100% $25 bathrooms layouts don't have direct bedroom property 4 4 $549 access. 4 2 $510 4 College Place Provo Provo - BYU 2015 336 $55 99% $50 Does not feature private bathrooms. 5 3 $510

The Hub | Offering Memorandum P. 25 1421 West 800 South | Orem, UT 84058 Offering Memorandum THE HUB DEVELOPMENT SITE

• Fully entitled and immediately construction ready • High-density student housing

• 1,044 Beds (282 Units)

• Located directly across from UVU -- Utah’s Largest and Fastest Growing University

• Adjacent to Orem UTA Frontrunner Station, Bus Station, and the Site of a Brand New Pedestrian Bridge (Due Fall 2019)

• 20 minutes from Silicon Slopes in Lehi.