2731 CORAL WAY Miami, FL 33145

1 NON - ENDORSEMENT AND DISCLAIMER NOTICE

Confidentiality and Disclaimer The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap Real Estate Investment Services of Florida, Inc. ("Marcus & Millichap") and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

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ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

2731 SW 22 ST Miami, FL ACT ID ZAA0390562

2 2731 SW 22 ST

TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01 Offering Summary Regional Map Local Map Aerial Photo

MARKET COMPARABLES 02 Sales Comparables Rent Comparables

FINANCIAL ANALYSIS 03 Rent Roll Summary Rent Roll Detail Rent Roll Summary Commercial Operating Statement Notes Pricing Detail Acquisition Financing

MARKET OVERVIEW 04 Market Analysis Demographic Analysis

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INVESTMENT OVERVIEW

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OFFERING SUMMARY EXECUTIVE SUMMARY

VITAL DATA CURRENT YEAR 1 Price $1,550,000 CAP Rate 5.19% 6.72% MAJOR EMPLOYERS Net Operating Down Payment 100% / $1,550,000 $80,381 $104,092 Income Net Cash Flow Loan Type All Cash 5.19% / $80,381 6.72% / $104,092 EMPLOYER # OF EMPLOYEES After Debt Service Total Rentable SF 4,241 Total Return 5.19% / $80,381 6.72% / $104,092 Baptist Health South Fla Inc 8,991 Price/SF $365.48 Cable Wrless Cmmunications Inc 6,156 Year Built 1949 HIG Surgery Centers LLC 5,100 Burger King Cpitl Holdings LLC 5,008 Royal Caribbean International 4,965 Ibt Group LLC 4,442 UNIT MIX Bursars Office 4,418 UNIT CURRENT AVG. AVG. MONTHLY POTENTIAL AVG. MONTHLY UNIT TYPE AVG. SF County Miami Dade AVI Dept 4,000 COUNT RENTS RENTS/SF INCOME RENTS RENTS/SF INCOME 1 Bedroom / 1 Miami Dade Transit 4,000 4 395 $900 $2.28 $3,600 $1,200 $3.04 $4,800 Bathroom Nephrology Division 4,000 SUITE CURRENT MONTHLY PRO FORMA TYPE TOTAL GLA CURRENT RENT RANGE COUNT INCOME MONTHLY INCOME Kimpton Epic Miami 3,724

3 Retail 2,661 $1,750 - $1,750 $5,250 $5,544 ROYAL CARIBBEAN 3,400

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles 2018 Estimate Pop 40,488 278,175 507,504 2010 Census Pop 36,526 251,628 459,959 2018 Estimate HH 15,392 111,940 199,297 2010 Census HH 13,875 100,875 179,538 Median HH Income $38,694 $36,529 $37,981 Per Capita Income $23,180 $27,973 $27,999 Average HH Income $60,809 $69,237 $70,382

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OFFERING SUMMARY INVESTMENT OVERVIEW Marcus & Millichap is pleased to present for sale 2731 Coral Way, a 4,241 rentable-square foot mixed use retail / multifamily property. The property is centrally located in the heart of Miami, Florida. The subject property consist of three (3) ground floor retail bays and four (4) one Bedroom/one Bath second floor residential units. The property is 100 percent occupied with its retail portion consisting of service-oriented tenants, unaffected by e-commerce. Rents are currently about 25 percent under market, making this a prime value-add opportunity for an investor and/or Owner User.

The subject property is centrally located near Coral Gables, Brickell, Coconut Grove, and Downtown Miami. The surrounding area consist of an array of major retailers and new developments. The adjacent property directly on the west was acquired by Terra Group. Terra Group has redeveloped the property into a brand-new construction self storage facility with ground floor retail. The ground floor retail of this specific property is asking $35.00 per-square-foot NNN. Coral Way has become an in demand residential and commercial corridor due to the growth in population within the past few years. .

INVESTMENT HIGHLIGHTS

▪ Excellent Visibility on Coral Way with Great Signage Potential ▪ Signalized Intersection with Traffic Counts Exceeding 70K Vehicles Per Day ▪ Month to Month Leases with 25% Below Market Rents ▪ Property has ran at 100% occupancy for the past 10 years ▪ Recently Completed 40 Year Recertification ▪ 1 Mile from Miracle Mile & Coral Gables

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OFFERING SUMMARY PROPERTY SUMMARY

THE OFFERING EXISTING FINANCING Price $1,550,000 Loan Type None Property Address 2731 SW 22 ST, Miami, FL Assessors Parcel Number 01-4109-039-0640 Zoning T5-O SITE DESCRIPTION Number of Units 7 Number of Buildings 1 Number of Stories 2 Year Built/Renovated 1949 Apartments - Rentable 1,580 Square Feet Retail - Gross Leaseable PROPOSED FINANCING 2,661 Area (GLA) First Trust Deed Total Rentable Square Feet 4,241 Loan Type All Cash Lot Size 5,250 Debt Coverage Ratio Type of Ownership Fee Simple Parking 7 Parking Ratio 1.65/1,000 SF

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REGIONAL MAP

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LOCAL MAP

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AERIAL PHOTO

Walgreens

Mc. Donald’s

Burger King

SW 27th Avenue – Over 35K VPD

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AERIAL PHOTO

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PROPERTY PHOTO

Subject

Over 38K 38K VPD Over

– CoralWay SW 27th Avenue – Over 35K VPD

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MARKET COMPARABLES

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SALES COMPARABLES MAP

2731 SW 22 ST (SUBJECT)

1 2931 Sw 22nd St

2 3542 SW 22nd St

3 545 SW 8th St

4 2340 Coral Way

5 1421 SW 8th St

SALES COMPARABLES

14 PROPERTY2731 SW 22 NAMEST

SALES COMPARABLES SALES COMPARABLES SALES COMPS AVG

Average Price Per Square Foot

$500.00

$450.00

Avg: $397 PSF $400.00 $365.48 PSF

$350.00

$300.00

$250.00

$200.00

$150.00

$100.00

$50.00

$0.00 2731 2931 Sw 3542 SW 545 2340 1421 SW 22 ST 22nd St 22nd St SW 8th St Coral Way SW 8th St

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SALESMARKETING COMPARABLES TEAM

SALES COMPARABLES

2931 SW 22ND ST 3542 SW 22ND ST 2731 SW 22 ST 2931 Sw 22nd St, Miami, FL, 33145 3542 SW 22nd St, Miami, FL, 33145 2731 SW 22 ST, Miami, FL, 33145 1 2

rentpropertyname1 rentpropertyname1 rentpropertyname1

Tenants Type Offering Price $1,550,000 4 1 Bdr 1 Bath Close of Escrow 5/24/2019 Close Of Escrow: 5/10/2019 Price/SF $365.48 3 Retail Days On Market 205 Sales Price: $2,100,000 CAP Rate 5.19% Sales Price $1,800,000 Rentable SF: 4,365 Year Built 1949 Rentable SF 4,550 Price/SF: $481.09 Total Apartment 4 Price/SF $395.60 CAP Rate: 5.52% Units Total Commercial 3 Year Built 1939 Year Built: 1975 Suites

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

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SALESMARKETING COMPARABLES TEAM

SALES COMPARABLES

545 SW 8TH ST 2340 CORAL WAY 1421 SW 8TH ST 545 SW 8th St, Miami, FL, 33130 2340 Coral Way, Coral Gables, FL, 33145 1421 SW 8th St, Miami, FL, 33135

3 4 5

rentpropertyname1 rentpropertyname1 rentpropertyname1

Close Of Escrow 1/29/2018 Close of Escrow 12/18/2018 Close Of Escrow 12/19/2017 Sales Price $1,500,000 Days On Market 198 Sales Price $1,700,000 Rentable SF 4,424 Sales Price $1,125,000 Rentable SF 5,011 Price/SF $339.06 Rentable SF 2,617 Price/SF $340.00 CAP Rate 7% Price/SF $429.88 Year Built 1968 Year Built 1937 Year Built 1952

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

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8 RENT COMPARABLES MAP

2731 SW 22 ST (SUBJECT)

1 Dog Hotel

2 3360 Coral Way

3 3202 Coral Way

4 3119 Coral Way

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RENT COMPARABLES AVERAGE RENT - COMMERCIAL

Retail Retail Avg

$40

$35 Avg: $32.22 PSF

$30

$25 $23.68 PSF

$20

$15

$10

$0 2731 Dog Hotel 3360 3202 3119 SW 22 ST Coral Way Coral Way Coral Way

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RENTMARKETING COMPARABLES TEAM

DOG HOTEL 3360 CORAL WAY 2731 SW 22 ST 3160 Coral Way, Coral Gables, FL, 33145 3360 Coral Way, Miami, FL, 33145 2731 SW 22 ST, Miami, FL, 33145 1 2

rentpropertyname1 rentpropertyname1 rentpropertyname1

Type Tenant Avg. SF Avg. Monthly Rent Rent/SF Total GLA Effective Rent/SF Total GLA Effective Rent/SF 1 Bdr 1 Bath 4 395 $900 $2.28 5,109 SF $36.00 7,971 SF $33.00 Total/Avg. 4 395 Retail 3 887 $1,750 $23.68 YEAR BUILT: 1950 YEAR BUILT: 1976

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

20 PROPERTY2731 SW 22 NAMEST

RENTMARKETING COMPARABLES TEAM

3202 CORAL WAY 3119 CORAL WAY 3202 Coral Way, Coral Gables, FL, 33145 3119 Coral Way, Coral Gables, FL, 33145

3 4

rentpropertyname1 rentpropertyname1 rentpropertyname1

Total GLA Effective Rent/SF Total GLA Effective Rent/SF 6,837 SF $29.87 24,000 SF $30.00

YEAR BUILT: 1993 YEAR BUILT: 1954

rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1

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FINANCIAL ANALYSIS

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FINANCIAL ANALYSIS RENT ROLL SUMMARY

Subject

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FINANCIAL ANALYSIS RENT ROLL SUMMARY

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FINANCIAL ANALYSIS OPERATING STATEMENT

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FINANCIAL ANALYSIS PRICING DETAIL

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ACQUISITION FINANCING

MARCUS & MILLICHAP CAPITAL CORPORATION WHY MMCC?

CAPABILITIES Optimum financing solutions to enhance value MMCC—our fully integrated, dedicated financing arm—is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and Our ability to enhance terms. buyer pool by expanding finance options We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of Our ability to enhance financing options. seller control • Through buyer Our dedicated, knowledgeable experts understand the challenges of financing qualification support and work tirelessly to resolve all potential issues to the benefit of our clients. • Our ability to manage buyers finance expectations • Ability to monitor and manage buyer/lender progress, insuring timely, predictable closings • By relying on a world class Closed 1,678 National platform $6.24 billion Access to set of debt/equity sources debt and equity operating billion total more capital financings within the firm’s national sources than and presenting a tightly in 2018 brokerage volume in 2018 any other firm underwritten credit file offices in the industry

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MARKET OVERVIEW

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MARKET OVERVIEW MIAMI-DADE OVERVIEW

Miami-Dade County is a gateway to South American and Caribbean markets and a tourist destination. The 2,400-square-mile county extends from the Florida Everglades east to the Atlantic Ocean. It is bordered to the north by Broward County and to the south by the Florida Keys. The main portion of the city of Miami lies on the shores of Biscayne Bay and is separated from the Atlantic Ocean by barrier islands, the largest of which holds the city of Miami Beach. The metro, with a population of roughly 2.7 million, is located entirely within Miami-Dade County. Miami is the most populous city, with slightly more than 443,000 residents, followed by Hialeah with roughly 237,000 people.

METRO HIGHLIGHTS

BUSINESS-FRIENDLY ENVIRONMENT The metro has no local business or personal income taxes, which attracts businesses and residents to the area.

INTERNATIONAL GATEWAY Miami is a gateway for international trading activities, tourism and immigration, connecting to airports and ports around the world.

MEDICAL COMMUNITY The county contains the largest concentration of medical facilities in Florida, drawing residents needing services throughout the state.

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MARKET OVERVIEW

ECONOMY ▪ Various industries provide a diverse economy. Trade, international finance, healthcare and entertainment have become major segments in the local business community. ▪ A strong tourism industry has developed with ties to Latin America and the Caribbean. ▪ Tourism and trade depend on a large transportation sector. PortMiami and Miami International Airport are both major contributors to employment and the economy. ▪ The Miami metro gross metropolitan product (GMP) expansion is expected to be on par with the U.S. GDP in 2019 and retail sales for the county are also rising.

MAJOR AREA EMPLOYERS

Baptist Health South Florida University of Miami American Airlines Miami Children’s Hospital Publix Supermarkets Winn-Dixie Stores Florida Power & Light Co. Carnival Cruise Lines AT&T * Forecast Mount Sinai Medical Center

SHARE OF 2018 TOTAL EMPLOYMENT

4% 14% 12% 12% 7% MANUFACTURING PROFESSIONAL AND GOVERNMENT LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES BUSINESS SERVICES

25% 5% + 16% 2% 4% TRADE, TRANSPORTATION CONSTRUCTION EDUCATION AND INFORMATION OTHER SERVICES AND UTILITIES HEALTH SERVICES

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MARKET OVERVIEW

DEMOGRAPHICS

▪ The metro is expected to add nearly 127,000 people over the next five years. During the same period, approximately 62,000 households will be formed, generating SPORTS demand for housing. ▪ The homeownership rate of 53 percent is below the national rate of 64 percent, maintaining a strong rental market. ▪ The cohort of 20- to 34-year-olds composes 21 percent of the population.

2018 Population by Age

6% 17% 6% 28% 27% 16% 0-4 YEARS 5-19 YEARS 20-24 YEARS 25-44 YEARS 45-64 YEARS 65+ YEARS EDUCATION

2018 2018 2018 2018 MEDIAN POPULATION: HOUSEHOLDS: MEDIAN AGE: HOUSEHOLD INCOME: 2.7M 954K 39.9 $45,300 Growth Growth U.S. Median: U.S. Median: 2018-2023*: 2018-2023*: 4.6% 6.5% 38.0 $58,800

QUALITY OF LIFE Miami-Dade County has developed into a cosmopolitan urban area offering a vibrant business and cultural community. The metro has an abundance of popular attractions. Miami hosts the Capital One Orange Bowl and is home to several professional sports ARTS & ENTERTAINMENT teams, including the Miami Dolphins, the Miami Marlins and the Miami Heat. The county has a broad array of cultural attractions, historic sites and parks. These include the Adrienne Arsht Center for the Performing Arts, Zoo Miami and Everglades National Park. The region is home to a vibrant and diverse culture, family-friendly neighborhoods, a plethora of shops and restaurants, and beautiful weather and beaches. It also offers easy access to Latin America and the Caribbean.

* Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

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MARKET OVERVIEW SOUTH FLORIDA

Vacancy and Rent Gains Most Pronounced Outside Miami Where Supply Wave Approaches Multifamily 2019 Forecast

Miami leads construction boom in Southeast Florida. An estimated 7,500 apartments Y-O-Y Effective Y-O-Y will open in the Miami-Dade metro by the end of 2019, the most active year for Metro Vacancy BasisPoint Rent Change construction since at least 2003. Much of the new development is focused in the Change Downtown Miami-South Beach area, as developers open high-rise towers with numerous amenities, ocean views and short walks to entertainment. The record level of supply additions will lift the vacancy rate close to the 5 percent threshold, yet Fort Lauderdale 4.8% -30 $1,631 3.8% availability remains tight in certain parts of the metro amid robust demand for workforce housing. The elevated level of completions will temper rent growth this Miami 4.5% 40 $1,673 3.5% year as monthly rates are anticipated to advance at a pace more in line with the national average. West Palm Beach 4.4% -80 $1,665 5.1% Vacancy improves for most of Southeast Florida as rents align across the region. Construction activity is accelerating year over year in Fort Lauderdale. The bulk of the Investment Trends construction pipeline is in the city itself as suburban development slows from 2018. The added deliveries will not deter vacancy compression this year, as greater hiring helps raise rental demand. Vacancy is also falling in West Palm Beach due to fewer Southeast Florida’s rapid demographic and economic growth since the last arrivals. Most of the units opening in the market belong to a single completion, the recession has opened the region up to a broader range of investors and fueled Town Southern in Royal Palm Beach. Declining availability in West Palm Beach and new levels of trading activity. While gains in dollar volume and sales price are Fort Lauderdale is adding upward momentum to rents, which are appreciating at likely to temper going forward, the underlying factors that contributed to this higher rates than in Miami. The differing paces of growth will bring the average change, including in-migration and corporate expansions, will continue to benefit effective rent for each of the three metros into the same $1,630 to $1,670 per month investment. range. Fort Lauderdale • Transaction volume is rising in Hollywood as many buyers pursue assets with fewer than 20 units in neighborhoods such as Royal Poinciana that have price points under $2 million. Such buildings provide renters with lower cost housing options not far from the beach.

Miami • Miami remains the primary market for sales volume in Southeast Florida as more investors look downtown and in Miami Gardens. Cap rates here can exceed the market average by up to 150 basis points.

West Palm Beach • Institutional investors are active in the market, focusing on acquiring post- * Cap rate trailing 12-month average through 1Q; Treasury rate as of March 29 2000-built Class B product in areas such as Royal Palm Beach. These assets Includes sales $1 million and greater for Fort Lauderdale, Miami, and West Palm Beach. can trade at sale prices up to $200,000 per unit above the metro average, Sources: CoStar Group, Inc.; Real Capital Analytics with initial returns in the mid-4 percent zone.

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MARKET OVERVIEW SOUTH FLORIDA: MIAMI

1Q19 – 12-Month Period * Forecast

EMPLOYMENT CONSTRUCTION VACANCY RENTS

increase in total units completed basis point increase in increase in effective 2.2% employment Y-O-Y 5,300 Y-O-Y 30 vacancy Y-O-Y 6.5% rents Y-O-Y

• Employers expanded staffs by • Approximately 300 more • After bottoming out at 2.8 • Declining concession use in 26,100 personnel over the past apartments opened in the market percent in 2015, vacancy in Downtown Miami and South 12 months, more than in the over the past four quarters as Miami has widened to 4.0 Dade County led to greater rent preceding annual period. The during the previous 12-month percent in March as the growth year over year in March. professional and business period. The greatest construction pipeline has The average effective rate rose services sector led hiring, with concentration of arrivals was in expanded to meet the housing to $1,628 per unit following a 3.7 the addition of 8,600 new staff Downtown Miami-South Beach needs of more residents. percent increase last year. members. at 2,600 rentals, more than • An above-national pace of • North Central Miami’s 1.0 • The education and health double the total from last year. population growth contributes to percent vacancy rate bolstered services sector is also growing at • Total completions contracted in acute apartment demand, the appreciation of monthly rents an accelerated pace, creating other submarkets, including in maintaining minimal rental here, especially for Class C about 4,500 jobs over the past West Miami-Doral and availability in several submarkets units. four quarters, even as the Westchester-Kendall. No units including Downtown and North unemployment rate fell to 3.5 have been delivered in the latter Central Miami despite the percent. submarket since before March increase in deliveries over the 2018. past few years.

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MARKET OVERVIEW SOUTH FLORIDA: MIAMI

Submarket Trends

Lowest Vacancy Rates 1Q19

Y-O-Y Effective Y-O-Y% Submarket Vacancy BasisPoint Rate Rent Change Change

North Central Miami 1.0% -40 $1,041 4.7%

Homestead/South Dade * Forecast ** 2018-2023 Miami-Fort Lauderdale-West Palm Beach, FL Metropolitan Statistical Area 2.3% -60 $1,147 5.9% County Sales Trends Hialeah/Miami Lakes 3.0% 90 $1,432 4.7% Investment Activity for Class C Apartments Downtown Miami/South Continues Amid Extremely Tight Vacancy Rates 3.6% -40 $2,067 5.2% Beach • The average sale price dipped for in March to $164,100 per unit. Fewer trades of higher-priced assets in areas such as Coral Gables and South Beach contributed to the price drop. Westchester/Kendall 4.0% -30 $1,545 1.8% • Miami’s average cap rate stayed in the high-5 percent band, 30 basis points below Coral Gables/South Fort Lauderdale and West Palm Beach. 4.8% -20 $1,920 4.5% Miami

Outlook: The market’s gateway status Miami Gardens 4.8% 120 $1,275 11.0% continues to draw foreign institutional investment for stabilized assets. Private buyers are also finding opportunities with Northeast Miami 5.1% 110 $1,649 1.2% Class C properties, which are subject to aggressive rental demand as vacancy West Miami/Doral 5.6% 130 $1,886 3.9% remains under 2 percent.

Overall Metro 4.0% 30 $1,628 6.5%

* Trailing 12 months through 1Q19 Pricing trend sources: CoStar Group, Inc.; Real Capital Analytics

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MARKET OVERVIEW SOUTH FLORIDA

Capital Markets

• International pressures weigh on domestic outlook; Fed remains patient. Amid ongoing trade disputes between the U.S. and China and slowing growth throughout the European economy, the global economic outlook has become more cautious. Market volatility, combined with muted sentiment, has sponsored a flight to the safety of Treasurys, pushing the 10-year yield below 2.6 percent. While domestic growth has moderated recently, the waning impact of the tax cut stimulus will likely trim forward estimates further. As a result, the Fed has decided to cease reducing its balance sheet reduction through quantitative tightening by September and removed the potential for rate increases through the remainder of the year. The bond market has begun to price in a much more dovish Fed, with flattening interest rates reflecting more caution. Fed officials will likely focus on the intersection of a global growth slowdown and continued labor market strength to refine their plans moving forward, keeping interest rates stable for the foreseeable future.

• Abundant liquidity sources balance conservative approach to underwriting. The availability of debt for apartment assets remains elevated, spurred by the recent pivot by the Federal Reserve. Sourcing will be led by Fannie Mae and Freddie Mac, in addition to a wide array of local, regional and national banks, and insurance companies. Loan-to-value (LTV) ratios are trending between 65 and 75 percent on stabilized properties. The decline in interest rates has rewidened the spread between cap rates and Treasurys, reducing lender concerns about the risks related to repayment and valuation at maturity. Development and value-add projects have seen more conservative lending due to concerns surrounding overdevelopment and the length of the business cycle, leading to a greater use of alternative financing structures such as mezzanine loans and preferred equity to cover the additional capital

requirements. * Trailing 12 months through 1Q19 Includes sales $2.5 million and greater Sources: CoStar Group, Inc.; Real Capital Analytics

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SOUTH FLORIDA

Highly Competitive Market Still Contains Opportunistic Finds Across the Region Retail 2018 Outlook

Destination shopping remains solid driver. The world-class shopping reputation that Y-O-Y Asking Y-O-Y South Florida has worked to build continues to draw visitors and locals to area retail, Metro Vacancy BasisPoint Rent Change strengthening the market through vigorous demand. Robust retail spending among Change travelers and residents has spurred globally recognized brands to seek space across the region’s numerous luxury shopping corridors, with minimal concern over rising e- commerce popularity as South Florida offers shoppers a unique experience. Grocery Miami 4.0% 20 $36.50 2.6% stores, necessity-based retailers and gyms remain in expansion mode as well to meet Fort Lauderdale 3.9% 20 $22.84 3.1% the needs of a region that has roughly 275 people moving to the area every day. West Palm Beach 4.5% 20 $24.15 5.6% Construction picks back up in 2018. Across South Florida, more than 2.6 million square feet are forecast to be delivered this year, nearing the cycle high set in 2014. The majority of new space has been rising in Miami-Dade County, where Investment Trends approximately 1.7 million square feet will open by year’s end, headlined by several shopping centers with more than 100,000 square feet. Supply growth in Broward Miami County hits a new high-water mark for the current cycle, with 750,000 square feet • A shortage of listings is straining activity, while cap rates remain in the mid-5 forecast to finish in 2018, including a new Lowe’s, a new Publix and multiple CVS percent range countywide. Higher yields are available in Broward and Palm pharmacies, as household growth remains strong. Palm Beach County experiences Beach counties. minimal deliveries this year, contributing to some of the strongest rent growth in the • Several years of robust asset appreciation, along with rising financing costs, region. could bring more properties to market as owners seek new assets in which to invest.

Fort Lauderdale • With an average cap rate in the low-6 percent territory, single-tenant yields here are the highest in the region, while national credit tenants can bring yields down to the mid-4 percent band. • Discounted pricing in Plantation, Pompano Beach and the southwest Broward area will keep investors active in the search of remaining upside.

West Palm Beach • Minimal construction and the fastest-growing population in South Florida will keep investors and retailers active in the search for prime locations across the county. * Cap rates trailing 12 months through 2Q18; 10-Year Treasury up to June 28. • Proximity to the new Brightline train station will be in high demand among Cap rate is average for Miami, Fort Lauderdale and West Palm Beach. tenants and investors. Sources: CoStar Group, Inc.; Real Capital Analytics

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SOUTH FLORIDA: MIAMI

2Q18 - 12-MONTH TREND

EMPLOYMENT CONSTRUCTION VACANCY RENTS

increase in total 1 million square feet basis point increase in increase in the 1.3% employment Y-O-Y completed 30 vacancy Y-O-Y 4.4% average asking rent Y-O-Y Y-O-Y • The creation of 15,100 jobs in the • In the first half of this year, • Net absorption of 751,000 • The average asking rent landed first half of the 2018 surpasses 584,000 square feet were square feet trailed completions, at $35.21 per square foot in the employment gains at the same completed, keeping deliveries for lifting the vacancy rate to a still- second quarter, marking a time last year, though hurricane- the past 12 months well below tight 4 percent in June, adding to slower pace of growth from the related job losses slowed the more than 1.6 million square a 20-basis-point rise posted one 6.7 percent increase registered annualized job growth to 15,700 feet opened during the prior year earlier. last June. in June. period. • Tenant demand was greatest • The multi-tenant segment led • The construction sector led job • The expansion of the Aventura over the past 12 months in rent growth, rising 9.6 percent to growth over the past year, adding Mall, finalized in March, is the Aventura, where net absorption $34.44 per square foot in the nearly 7,400 workers to company largest delivery of 2018 at totaled 320,000 square feet, second quarter, while a 2.2 payrolls, followed by 315,000 square feet, followed by followed by Kendall with net percent increase for single- manufacturing firms, which Gardens Promenade at 300,000 absorption of 142,000 square tenant space was posted to created 7,000 jobs. square feet. feet. $35.60 per square foot.

* Forecast

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SOUTH FLORIDA: MIAMI

Submarket Trends

Lowest Vacancy Rates 2Q18

Y-O-Y Asking Y-O-Y% Submarket Vacancy BasisPoint Rate Rent Change Change

Aventura 1.2% 40 $34.39 -14.9%

Coral Way 1.6% -50 $28.38 6.5%

* Forecast **2017-2022 Sales Trends Medley/Hialeah 1.7% -20 $29.49 -5.7%

Investors Extend Search Parameters For Remaining Upside Miami Airport 2.0% 0 $27.50 2.1% • Multi-Tenant: Deal flow held stable over the past year in Miami-Dade County, led by increased investor activity in the Miami Airport submarket. The average price fell 2 West Miami 2.2% 0 $24.34 -11.9% percent to $387 per square foot. • Single-Tenant: Prices fell 9 percent to average $443 per square foot during the past 12 Kendall 2.5% -70 $33.90 -1.9% months. Transaction velocity slowed 19 percent as well. Hialeah Gardens 2.6% -30 $20.15 0.5%

Outlook: High prices and strong Coral Gables 2.7% 60 $42.42 18.5% competition keep investors active outside of the urban core, looking to areas like Northeast Dade 3.4% -10 $29.14 -4.0% Medley/Hialeah or Northeast Dade, where single-tenant assets often trade South Dade 4.3% 70 $21.91 9.9% below the market average. Miami Lakes 5.1% -30 $22.13 -1.9%

Overall Metro 4.0% 30 $35.21 4.4%

Sources: CoStar Group, Inc.; Real Capital Analytics

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SOUTH FLORIDA

Capital Markets

• Fed raises benchmark rate, plans for additional increases. The Federal Reserve recently increased the federal funds rate by 25 basis points, lifting the overnight lending rate to 2 percent at the conclusion of its September meeting. The Fed noted inflation has broadly reached its target, while household spending and corporate investment remain robust. The Fed indicated an additional rate hike this year and projects as many as three increases in 2019.

• Lending costs rise alongside Fed rate increase. As the Fed lifts rates, lenders have been tightening margins to compete for loans. Despite these efforts, borrowing costs remain on an upward trajectory, which is tightening returns and pushing some investors to seek greater yields in secondary markets. However, though buyers may try to push back on pricing due to increased loan costs, some sellers remain convinced that the strong economy and sturdy NOI performance substantiate aggressive pricing and a widening expectation gap is the result. If interest rates rapidly surge upward, this gap could quickly widen, slowing transaction activity.

• The capital markets environment remains competitive. As the Fed tightens policy, global investors have been acquiring Treasurys in order to capture a considerable yield premium, keeping the 10-year Treasury near 3 percent. Portfolio lenders are providing debt for retail assets, with leverage typically capped at 60 to 65 percent. The sector has become increasingly nuanced, with deals more scrutinized due to e-commerce competition. Ten-year loan structures will range between 4.95 and 5.25 percent, depending on tenancy, location and sponsorship. Continued consumer spending underpins U.S. growth, supporting retail demand and driving a 10-basis-point decline in vacancy to 4.9 percent this year.

Through Sept. 26 Sources: CoStar Group, Inc.; Real Capital Analytics

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MARKETINGDEMOGRAPHICS TEAM Created on July 2019

POPULATION 1 Miles 3 Miles 5 Miles HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles ▪ 2023 Projection ▪ 2018 Estimate Total Population 41,592 289,089 531,201 $200,000 or More 3.26% 5.87% 5.99% ▪ 2018 Estimate $150,000 - $199,000 2.68% 3.39% 3.49% Total Population 40,488 278,175 507,504 $100,000 - $149,000 9.06% 7.78% 8.23% ▪ 2010 Census $75,000 - $99,999 8.70% 7.68% 8.21% Total Population 36,526 251,628 459,959 $50,000 - $74,999 16.37% 13.56% 13.84% ▪ 2000 Census $35,000 - $49,999 13.61% 13.11% 12.87% Total Population 34,404 231,362 412,532 $25,000 - $34,999 11.89% 11.39% 11.02% ▪ Daytime Population $15,000 - $24,999 16.32% 15.03% 14.28% 2018 Estimate 40,564 375,424 819,613 Under $15,000 18.12% 22.19% 22.07% HOUSEHOLDS 1 Miles 3 Miles 5 Miles Average Household Income $60,809 $69,237 $70,382 ▪ 2023 Projection Median Household Income $38,694 $36,529 $37,981 Total Households 16,235 118,647 214,408 Per Capita Income $23,180 $27,973 $27,999 ▪ 2018 Estimate POPULATION PROFILE 1 Miles 3 Miles 5 Miles Total Households 15,392 111,940 199,297 ▪ Population By Age Average (Mean) Household Size 2.58 2.45 2.46 2018 Estimate Total Population 40,488 278,175 507,504 ▪ 2010 Census Under 20 17.60% 18.30% 19.04% Total Households 13,875 100,875 179,538 20 to 34 Years 20.24% 20.79% 22.59% ▪ 2000 Census 35 to 39 Years 7.37% 7.25% 7.31% Total Households 12,580 90,899 153,086 40 to 49 Years 15.03% 14.54% 14.26% Growth 2015-2020 5.48% 5.99% 7.58% 50 to 64 Years 19.29% 19.27% 18.77% HOUSING UNITS 1 Miles 3 Miles 5 Miles Age 65+ 20.47% 19.85% 18.02% ▪ Occupied Units Median Age 43.18 42.49 40.73 2023 Projection 16,235 118,647 214,408 ▪ Population 25+ by Education Level 2018 Estimate 15,932 118,751 215,927 2018 Estimate Population Age 25+ 31,240 212,454 379,049 Owner Occupied 6,356 39,376 73,022 Elementary (0-8) 10.63% 13.54% 12.01% Renter Occupied 9,036 72,564 126,275 Some High School (9-11) 8.16% 8.88% 9.74% Vacant 540 6,812 16,630 High School Graduate (12) 32.56% 28.79% 27.57% ▪ Persons In Units Some College (13-15) 11.58% 10.66% 11.61% 2018 Estimate Total Occupied Units 15,392 111,940 199,297 Associate Degree Only 8.21% 7.39% 7.71% 1 Person Units 27.73% 31.76% 32.18% Bachelors Degree Only 18.78% 17.18% 17.14% 2 Person Units 29.81% 30.22% 29.85% Graduate Degree 8.65% 11.24% 11.87% 3 Person Units 18.80% 16.82% 16.45% ▪ Population by Gender 4 Person Units 12.97% 11.57% 11.45% 2018 Estimate Total Population 40,488 278,175 507,504 5 Person Units 5.90% 5.41% 5.48% Male Population 47.98% 49.08% 49.72% 6+ Person Units 4.79% 4.21% 4.59% Female Population 52.02% 50.92% 50.28%

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MARKETINGDEMOGRAPHICS TEAM

Population Race and Ethnicity In 2018, the population in your selected geography is 40,488. The The current year racial makeup of your selected area is as follows: population has changed by 17.68% since 2000. It is estimated that 90.86% White, 2.70% Black, 0.02% Native American and 1.05% the population in your area will be 41,592.00 five years from now, Asian/Pacific Islander. Compare these to US averages which are: which represents a change of 2.73% from the current year. The 70.20% White, 12.89% Black, 0.19% Native American and 5.59% current population is 47.98% male and 52.02% female. The median Asian/Pacific Islander. People of Hispanic origin are counted age of the population in your area is 43.18, compare this to the US independently of race. average which is 37.95. The population density in your area is 12,907.29 people per square mile. People of Hispanic origin make up 87.35% of the current year population in your selected area. Compare this to the US average of 18.01%.

Households Housing There are currently 15,392 households in your selected geography. The median housing value in your area was $276,881 in 2018, The number of households has changed by 22.35% since 2000. It is compare this to the US average of $201,842. In 2000, there were estimated that the number of households in your area will be 16,235 5,802 owner occupied housing units in your area and there were five years from now, which represents a change of 5.48% from the 6,778 renter occupied housing units in your area. The median rent at current year. The average household size in your area is 2.58 persons. the time was $576.

Income Employment In 2018, the median household income for your selected geography is In 2018, there are 14,404 employees in your selected area, this is also $38,694, compare this to the US average which is currently $58,754. known as the daytime population. The 2000 Census revealed that The median household income for your area has changed by 25.66% 57.71% of employees are employed in white-collar occupations in since 2000. It is estimated that the median household income in your this geography, and 42.79% are employed in blue-collar occupations. area will be $45,552 five years from now, which represents a change In 2018, unemployment in this area is 5.10%. In 2000, the average of 17.72% from the current year. time traveled to work was 27.00 minutes.

The current year per capita income in your area is $23,180, compare this to the US average, which is $32,356. The current year average household income in your area is $60,809, compare this to the US average which is $84,609.

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8 DEMOGRAPHICS