A 270- LUXURY COMMUNITY LOCATED IN LOUISVILLE’S AFFLUENT EAST END

Marty O’Connell, a licensed real estate broker in the state of , along with Holliday Fenoglio Fowler, L.P. (collectively “HFF”). License #68521 EXECUTIVE SUMMARY

HURSTBOURNE ESTATES OFFERING SUMMARY

10405 Watermark Place STREET ADDRESS: Louisville, KY 40223 TOURS: Please contact Wick Kirby COUNTY: Jefferson (312-980-3611 or [email protected]) to schedule a tour. 16 Two-Story 1 Three-Story NUMBER OF BUILDINGS: 1 Clubhouse 8 Detached Buildings

NUMBER OF : 270 The Owners and HFF respectfully request that interested parties refrain from contacting on- RENTABLE SQUARE FEET: 285,900 SF site personnel or residents.

AVERAGE HOME SIZE: 1,059 SF

OCCUPANCY 92% (as of 8/30/2018) FINANCING: The property is available on a YEAR BUILT: 2014 free-and-clear basis. Please contact Jason Bond (312-980-3608 or [email protected]) to discuss 96 Attached Garage Spaces financing options. 73 Detached Garage Spaces PARKING: 311 Surface Spaces 480 Total Spaces

PARKING RATIO: 1.78

2 executive summary HFF is pleased to present Hurstbourne Estates, a 270-home luxury garden- style apartment community located in the desirable East End of Louisville. The property offers spacious modern , state-of-the-art community amenities, and access to top area employers, schools, and retail.

EXCELLENT LOCATION zz Conveniently located within a 25-minute drive of the Louisville CBD, 6 Fortune 1000 companies and several universities and hospitals

zz Nearby Hurstbourne Parkway Office Corridor contains over 2.45 million SF of office space along a 2-mile stretch

DESIRABLE AND AFFLUENT EAST END NEIGHBORHOOD zz Average household income and median home value are $146,300 and $340,000+, respectively, within a one-mile radius of the property zz The low 17% rent-to-income ratio at the property suggests a financially stable resident base with the ability to continue to absorb higher rents

SUPERB LOUISVILLE APARTMENT SUBMARKET zz 2.7% projected annual growth in effective rent in submarket over next three years per Axiometrics zz 94.4% occupancy in 2Q18 and 95%+ average occupancy over last five years for the submarket

Source: Axiometrics Quarterly Market Trends, Northeast Jefferson County, 2Q18

UNIT MIX SUMMARY (AS OF 08/30/2018) DESCRIPTION COUNT SQ. FT. MARKET RENT PSF ACHIEVED RENT PSF* 1x1 116 homes ±829 $984 $1.19 $985 $1.19 2x2 132 homes ±1,199 $1,301 $1.08 $1,227 $1.02 3x2 22 homes ±1,428 $1,526 $1.07 $1,585 $1.11 TOTAL/AVG 270 HOMES ±1,059 $1,183 $1.12 $1,147 $1.09

*Square Footage used is of leased homes

HURSTBOURNE ESTATES 3 LUXURY LIVING

WHAT MAKES A COMPLEX A COMMUNITY

Superior Townhome Gathering Convenience Amenities Features Space

Resort-Style Private Modern Business Center Entrances* Clubhouse Package Receiving & Sundeck Direct-Access Large Extra Storage Fire Pit & Lounge Attached Garages Community Available Available Expansive On-Site Fitness Center Manicured & Recreation Maintenance & Dog Walking Paths Billiards Table Management Controlled BBQ/Picnic Area Access/Gated

*Select Homes

4 executive summary WHAT MAKES AN APARTMENT A HOME

GOURMET Open, Spacious Layouts with Built-In Islands* Shaker-Style Espresso Cabinets Granite Counters Large Breakfast Bar* Brushed-Nickel Hardware Sleek Black Energy-Efficient Appliances Over-The-Range Microwave Garbage Disposal

MODERN DESIGN Wood-Style Flooring Pendant Fixtures 9’ With Crown Molding (& Tray on 3rd ) Stylish 2” Blinds Multi-Panel

FAMILY-FRIENDLY FEATURES Attached Garage Access* In-Unit Full-Size Washer & Dryer Oversized & Built-In Shelving Plush Carpet in & or Extra Storage *Select Homes

POTENTIAL FUTURE PREMIUM UPGRADES

Stainless-Steel Designer Kitchen Extended Wood- Additional Appliances Backsplash Style Flooring Dog Park

*Select Homes

HURSTBOURNE ESTATES 5 STRONG DEMOGRAPHICS SUPPORT TOP RENTS

DEMOGRAPHICS IN ONE-MILE RADIUS OF PROPERTY

IMPRESSIVE $146,300 62% COLLEGE EDUCATED Nearly two-thirds of the area population is AVG. HOUSEHOLD INCOME college-educated and 26% hold a master’s The average household income of $146,300 is or higher degree. NEARLY DOUBLE the Louisville Metro average of $78,700.

3.7% UNEMPLOYMENT 15% POPULATION GROWTH The Louisville MSA unemployment rates is The Louisville Metro grew 15% since 2000 a low 3.7%. and is expected to grow another 3% in the next five years.

Sources: Spotlight Pop-Facts, Dec 2017; BLS, Dec 2017

HIGH RESIDENT INCOMES SUPPORT RENT GROWTH The average household income of residents at Hurstbourne Estates is a notable ~$85,000, which makes renting at the property well within the 30% affordability test for rent as a fraction of total income. Hurstbourne Estates’ market rents are just 17% of the average monthly resident HHI, leaving a sound rent buffer of 13%.

$2,125 30% OF 17% | $1,183 INCOME AVG MARKET RENT

13% | $942 RENT $85,000 $7,083 CUSHION AVG RESIDENT AVG RESIDENT 17% ANNUAL HHI MONTHLY HHI RENT-TO-INCOME RATIO

6 executive summary SUPERB HOUSING VALUE FOR AFFLUENT EAST END LOUISVILLE

The highly desirable East End neighborhoods of Louisville are comprised of golf-course adjacent estates, stately colonials, and newly built mini mansions. These high home values make renting a financially sensible option for many wishing to live in this sought-after Louisville market.

PRICEY HOMES IN 1-MILE RADIUS LOUISVILLE’S HOT HOUSING MARKET $214,900 JUL 2017 $342,100 31% MEDIAN HOME VALUE GROWTH IN SINGLE FAMILY The median home value within HOME MEDIAN LIST PRICE one-mile of Hurstbourne Estates of over $342,000 or nearly double the metro median makes renting a sensible option for many. $147,500 DEC 2014

Source: Zillow Group, Median List Price, Aug 2018

RENT VERSUS BUY ANALYSIS $342,100 Median Home Value within One-Mile of Property 1.7X MORE EXPENSIVE TO BUY A Estimated Monthly Mortgage Payment* $1,978 WITHIN ONE-MILE THAN RENTING $1,183 Monthly Average Market Rent at Property AT HURSTBOURNE ESTATES $795 Monthly Premium for Owning vs. Renting *Calculation assumptions: 30-yr fixed mortgage, 10% down payment, 3.75% interest rate, $293 monthly tax escrow (based on average area tax rate), $67 monthly insurance escrow ($800 Annual Expense), and $192 PMI payment (0.75% rate).

EXPENSIVE HOMES FOR SALE NEARBY

STATELY MANSION GOLF COURSE ESTATE NEW HURSTBOURNE, KY $1.05MM HURSTBOURNE, KY $2.95MM HURSTBOURNE, KY $902K

HURSTBOURNE ESTATES 7 A

Louisville's small but mighty $70 billion economy is bolstered by its position in the "Urban" or "Golden Triangle" along with nearby Cincinnati and Lexington. This region constitutes 50% of the population, 59% of employment, and 54% of the business establishments in Kentucky.1 Louisville has also become recognized for a robust healthcare industry, six Fortune 1000 firm headquarters, and a blossoming new business/start-up culture.

FORTUNE 1000 COMPANIES OTHER TOP EMPLOYERS AIRLINES #9 #53 BEST CITY FOR JOB SEEKERS ZipRecruiter, 2017 #376

#422

A BEST #713 ENTREPRENEURIAL CITY Entrepreneur.com, 2014

#914

1 University of Kentucky Center for Business and Economic Research, "Kentucky Annual Economic Report," 2015 #942

8 executive summary SOUTHERN BUSINESS HOSPITALITY

Louisville is recognized for its financial stability, diverse economy, infrastructure, healthcare, safety, and low cost of living. In fact, Site Selection magazine consistently names Louisville a top tier metro for expansion.

Ford Kentucky Truck Plant <10 min. drive from Hurstbourne Estates

LOUISVILLE IS AN INAUGURAL #10 CITY FOR GOOGLE’S “FASTER, #7 BEST RUN CITY FAIRER, KINDER INTERNET” TOP TIER METRO Wallethub, 2017 INITIATIVE Site Selection Magazine, 2017

MANUFACTURING #1 CITY FOR MANUFACTURING MADE IN LOUISVILLE

30% GROWTH IN MANUFACTURING SINCE 2011

$900mm INVESTMENT Ford plans to make an additional $900 million investment in its Kentucky truck plant (<10 min. drive from Hurstbourne Estates) on top of its $1.3 billion investment in late 2015.1 NAVIGANT 1 Forbes, June 2017

HURSTBOURNE ESTATES 9 #3 Largest Employer in Louisville #53 Fortune Rank Humana HEALTHCARE TRIFECTA

Louisville has emerged as a major center for the health care and medical sciences industries for its superior front-line care delivery, innovation, and healthcare logistics. The metro’s combination of large healthcare companies, premier hospitals, and medical research facilities has created a healthcare infrastructure that further bolsters economic development.

LEADING COMPANIES EXCELLENT HOSPITALS CUTTING EDGE RESEARCH Louisville has been central to Louisville is home to three advancements in medicine Seven of Louisville's 20 largest outstanding hospitals: Norton including pioneering the first employers operate in the health- Hospital, Baptist Health, and Jewish artificial heart. The University care industry ranging from Hospital, which US News ranked of Louisville Cancer Center also insurance companies to hospitals. the #4, #5, and #6 Best Hospitals boasts the nation’s largest pipeline in Kentucky, respectively. of cancer drugs.1

TOP METRO HEALTHCARE EMPLOYERS # EMPLOYEES #5 Best Hospital in Louisville Baptist Health Louisville Humana 12,500 6 miles from Hurstbourne Estates Norton Healthcare 11,389 KentuckyOne Health 6,000 Baptist Healthcare 4,995 ResCare 2,435 Kindred Healthcare 2,381 Floyd Memorial Hospital 1,950

Sources: Greater Louisville Chamber of Commerce, 2016

1The Lane Report, Health care energizes Louisville economy, Apr 2013.

10 executive summary TOP RATED EDUCATION OPTIONS

PUBLIC SCHOOLS PRIVATE SCHOOLS

Residents of Hurstbourne Estates are served by the Almost one third of students in Louisville (~31,000 Jefferson County Public School District including students) attend one of 98 private schools in the A- rated Bowen Elementary School just 2 miles metro per the Private School Review. 16 Louisville away and Eastern High School, which ranks in the private schools—including Kentucky Country Day Top 6% of public high schools in Kentucky per School—ranked in the top 40 schools in Kentucky Niche.com in 2018. in 2018 according to Niche.com.

NICHE STATE PUBLIC % STATE DISTANCE FROM KENTUCKY COUNTRY DAY SCHOOL RATING SCHOOL RANK PROPERTY RANKING This top-performing co-ed private school for pre-K Bo w e n through 12th grade is located less than four miles #65 9% 1.83 Elementary* A- from Hurstbourne Estates and tied for best school in Cro sb y Mid d l e B+ #44 13% 2.84 Kentucky as ranked by Niche.com in 2018. Eastern High A- #20 6% 4.27 #1

*Hurstbourne Estates elementary student residents can apply to any of BEST SCHOOL IN KENTUCKY seven Cluster 10 schools Niche.com, 2018

HIGHER EDUCATION

Louisville is home to 12 four-year not-for-profit universities namely the nationally-ranked —and over a dozen for-profit universities and community colleges.

The celebrated University of Louisville is a nearly 16,000-undergraduate student public university situated on 345 acres in Louisville. The are a member of the ACC and is consistently competitive in Basketball, Football, #87 Baseball, and other sports. BEST PUBLIC SCHOOL US News & World Report, 2018

HURSTBOURNE ESTATES 11 OUTSTANDING APARTMENT SUBMARKET Hurstbourne Estates is located in the Northeast Jefferson County submarket of Louisville, KY according to Axiometrics. The submarket consists of approximately 8,800 units in 34 stabilized projects, which comprise approximately a third of the apartment inventory in Louisville. The average unit size is 1,034 SF and average year built is 1994. SUBMARKET HIGHLIGHTS NORTHEAST JEFFERSON TOTAL/ COUNTY OVERVIEW AVERAGE "8,837 Units Total Units / Projects zz 2.7% ANNUALIZED GROWTH projected through 34 Projects" 2021 in the submarket SF/Unit 1,034

Average Year Built 1994 zz 94.4% OCCUPANCY in 2Q18 and 95.5% average 2Q18 Market/Effective Rent $1,052 / $1,041 occupancy over last five years 3-Yr Historical Avg Annual % Growth 2.8% zz Hurstborne Estates, built in 2014, is among 3-Yr Projected Avg Annual % Growth 2.7%

just 11 projects built in the last decade in the 2Q18 Occupancy 94.4%

submarket. 3-Yr Historical Avg Occupancy 95.4%

3-Yr Projected Avg Occupancy 94.5%

Source: Axiometrics Quarterly Market Trends, 2Q18

N ORTH HURST BOURNE PA RKWAY 22,500 VEHICLES PER DAY

25 MINUTES TO DOWNTOWN LOUISVILLE D O RS EY L A NE

12 executive summary GATEWAY TO THE SOUTH TOP PLACE TO VISIT USA TODAY, 2016

Louisville, commonly referred to as the "Gateway to the South", has evolved into a surprisingly cosmopolitan city full of southern charm, delicious food and drink, Hot Brown Sandwich top performing arts, and a down-home Bluegrass and indie music scene. Louisville was named by USA today TOP FOOD CITY -National Geographic, 2015 a "Top Place to Visit" in 2016 and is repeatedly lauded as a top food and drink city. Once known only for the legendary “Hot Brown” sandwich and KFC, Louisville has transformed into a sophisticated and eclectic culinary scene earning praise from top critics and global travelers.

KENTUCKY DERBY “GREATEST TWO MINUTES IN SPORTS”

A source of pride in Louisville is , TOP DRINKING CITY -Thrillist, 2016 which hosts the world-famous and more than 165,000 guests for the event each spring. Louisville kicks off the famed Kentucky Bourbon Beyond putting on the “Greatest Two Minutes in Trail and features a local “Urban Bourbon Trail,” Sports” each year, Churchill Downs, a 147-acre a 20-stop tour showcasing America’s only native national historic site, features the Kentucky Derby spirit. Louisville’s craft brewing scene now also Museum and will host the 2018 Breeders Cup. features a “LouBrew” Brewery Tour.

HURSTBOURNE ESTATES 13 EXCELLENT AREA DEMAND DRIVERS INDIANAPOLIS CINCINNATI PADDOCK SHOPS 100 MILES DOWNTOWN LOUISVILLE 110 MILES  1HR 30MIN  TRUCK PLANT ATTRACTIONS 1HR 45MIN 265 # Hu 53 rs TOM SAWYER Center tb STATE PARK or ne CLARK MEMORIAL MALL ST. MATTHEWS P Louisville Slugger Museum & Factory a  HOSPITAL rk w a Kentucky Center for the Performing Arts y CORPORATE HQ   KFC Yum! Center BOWEN   ELEMENTARY SCHOOL Kentucky International Convention  Louisville Palace Theatre Center 1747 Old Forester Distillery HURSTBORNE PARKWAY Angel’s Envy Distillery 60 OFFICE CORRIDOR   BAPTIST HEALTH CORPORATE HQ LOUISVILLE #376 60 60 65

EASTERN HIGH SCHOOL HURSTBORNE CROSBY COUNTRY CLUB MIDDLE SCHOOL  RENAISSANCE

LOUISVILLE CBD ® HURSTBORNE FUN PARK

SENECA PARK 264 5

 M

CORPORATE HQ I

CORPORATE HQ  MITCHERS L

DISTILLERY

#942 E

#713 R

NORTON AUDUBON A CORPORATE HQ D

DISTILLERY HOSPITAL I # U 422 #914 S  264

LOUISVILLE ZOO LEXINGTON   75 MILES CORPORATE HQ 1747 1HR 20MIN

LOUISVILLE  INTERNATIONAL HQ & PLANT AIRPORT

Transportation Nexus

INTERNATIONAL ACCESS CLASS I FREIGHT RAILROADS CENTRAL TO HIGHWAYS

20 min to 10min/4mi 8min/3mi

12 min to Airlines Headquarters 10min/5mi 13min/5mi

14 executive summary EXCELLENT AREA DEMAND DRIVERS INDIANAPOLIS CINCINNATI PADDOCK SHOPS 110 MILES 100 MILES   TRUCK PLANT 1HR 45MIN 1HR 30MIN 265

# Hu 53 rs TOM SAWYER tb STATE PARK or ne CLARK MEMORIAL MALL ST. MATTHEWS P a  HOSPITAL rk w a y CORPORATE HQ  

BOWEN   ELEMENTARY SCHOOL  1747 OXMOOR CENTER HURSTBORNE PARKWAY 60 OFFICE CORRIDOR   BAPTIST HEALTH CORPORATE HQ LOUISVILLE #376 60 60 65

EASTERN HIGH SCHOOL HURSTBORNE CROSBY COUNTRY CLUB MIDDLE SCHOOL  RENAISSANCE

LOUISVILLE CBD ® HURSTBORNE FUN PARK

SENECA PARK 264 5

 M

CORPORATE HQ I

CORPORATE HQ  MITCHERS L

DISTILLERY

#942 E

#713 R

NORTON AUDUBON A CORPORATE HQ D

DISTILLERY HOSPITAL I # U 422 #914 S  264

LOUISVILLE ZOO LEXINGTON   75 MILES CORPORATE HQ 1747 1HR 20MIN

LOUISVILLE  INTERNATIONAL HQ & PLANT AIRPORT

Hurstbourne Parkway Office Corridor Map Legend

2.25 Miles TOP CORRIDOR TENANTS # Fortune 500 Healthcare

2.5MM SF of Office Space Recreation Distillery Air Goup Education Bars 34 Office Buildings Shopping

Parks

HURSTBOURNE ESTATES 15 ATLANTA | AUSTIN | | CAROLINAS | | DENVER | DALLAS | FLORHAM PARK (NJ) | HOUSTON INDIANAPOLIS | LONDON | LOS ANGELES | MIAMI | NEW YORK | ORANGE COUNTY (CA) | ORLANDO | PHILADELPHIA PHOENIX | PITTSBURGH | PORTLAND (OR) | SAN DIEGO | SAN FRANCISCO | SEATTLE | TAMPA | WASHINGTON, DC

INVESTMENT ADVISORY FINANCING WICK KIRBY KEVIN GIRARD JASON BOND Senior Director Director Senior Director (312) 980-3611 (312) 528-3689 (312) 980-3608 [email protected] [email protected] [email protected]

SEAN FOGARTY AMANDA FRIANT HFF Chicago Managing Director Associate (312) 528-3675 (312) 300-7298 150 N. Riverside [email protected] [email protected] Suite 2500 Chicago, IL 60606 MARTY O’CONNELL MARK BARNES P: (312) 528-3650 Managing Director Associate F: (312) 528-3651 (312) 528-3653 (312) 300-7304 [email protected] [email protected] KY State License #68521 KYLE BUTLER DAVID GAINES Analyst Senior Director (312) 300-7307 (312) 528-3694 [email protected] [email protected]

Marty O’Connell, a licensed real estate broker in the state of Kentucky, along with Holliday Fenoglio Fowler, L.P. (collectively “HFF”). License #68521

HFF has been engaged by the owner of the properties to market it [them] for sale. Information concerning the properties described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.

Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, “HFF”), HFF Securities L.P. and HFF Securities Limited (collectively, “HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 25 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.