OFFERING MEMORANDUM

630 E 16TH AVE DENVER, CO 80203

NIK MACCARTER BRANDON KAUFMAN Sr. Investment Advisor Sr. Investment Advisor

[email protected] [email protected] 303.909.2900 303.547.7357 CONFIDENTIALITY DISCLAIMER

This confidential Offering Memorandum, has been prepared by Nexus Commercial Realty for use by a limited number of qualified parties. This Offering Memorandum has been provided to you at your request based upon your assurances that you are a knowledgeable and sophisticated investor in commercial real estate projects and developments. Nexus Commercial Realty recommends you, as a potential buyer/investor, should perform your own independent examination and inspection of the property (the “Property”) and of all of the information provided herein related to the Property. By accepting this Offering Memorandum, you acknowledge and agree that you shall rely solely upon your own examination and investigation of the Property and you shall not rely on any statements made in this Offering Memorandum or upon any other materials, statements or information provided Nexus Commercial Realty or its brokers.

Nexus Commercial Realty makes no guarantee, warranty or representation about the completeness or accuracy of the information set forth in this Offering Memorandum. You are responsible to independently verify its accuracy and completeness. Nexus Commercial Realty has prepared the information concerning the Property based upon assumptions relating to the general economy, its knowledge of other similar properties in the market, and on other market assumptions including factors beyond the control of the Nexus Commercial Realty and the Owner of the Property. Nexus Commercial Realty make no representation or warranty as to either the accuracy or completeness of the information contained herein, and the information set forth in this Offering Memorandum in not intended to be a promise or representation as to the future performance of the Property. Although the information contained herein is believed to be accurate, Nexus Commercial Realty and the Property Owner disclaim any responsibility or liability for any inaccuracies. Further Nexus Commercial Realty and the Property Owner disclaim any and all liability for any express or implied representations and warranties contained in, or for any omissions from, the Offering Memorandum and for any other written or oral communication transmitted or made available to you. Nexus Commercial Realty shall make available to you, as a qualified prospective investor, additional information concerning the Property and an opportunity to inspect the Property upon written request.

This Offering Memorandum and the contents are intended to remain confidential except for such information which is in the public domain or is otherwise available to the public. By accepting this Offering Memorandum, you agree that you will hold and treat Offering Memorandum in the strictest confidence, that you will not photocopy or duplicate it, or distribute it. You agree you will not disclose this Offering Memorandum or its contents to any other person or entity, except to outside advisors retained by you and from whom you have obtained an agreement of confidentiality, without the prior written authorization Nexus Commercial Realty. You agree that you will use the information in this Offering Memorandum for the sole purpose of evaluating your interest in the Property. If you determine you have no interest in the property, kindly return the Offering Memorandum to Nexus Commercial Realty at your earliest convenience. TABLE OF CONTENTS

• EXECUTIVE SUMMARY

• FINANCIALS

• LOCATION OVERVIEW 01 EXECUTIVE SUMMARY Executive Summary

The Essex offers investors with the rare opportunity to own a twenty unit, turn-key boutique hospitality property in the core of Denver. Anchored by a master lease through Sonder, an operator of a rentals marketplace for travelers, this trophy asset provides above market returns. The newly renovated building boasts the perfect mix of old world charm and modern amenities. Since November of 2018 the property was granted historical landmark status by the City of Denver just after undergoing an extensive renovation. The scope of the renovation included new MEP systems, completely gutted and remodeled units, new mini-split heating and cooling units and a new roof. The lessee, Sonder USA Incorporated, signed a three year modified gross lease agreement on the building and are responsible for all expenses sans insurance and taxes. The lease features two tenant five-year options available after the initial lease term has expired and annual rent increases of 2.5%. BUILDING DETAILS

Units: 20

Building SF: 16,465

Parking: 19 Off-Street Spaces

Zoning: R4

Year Built: 1907

Year Renovated: 2018 PROPERTY OVERVIEW SYSTEMS Gas / Elec Meters: Master / Individual

Water: Master

Trash: Waste Management

Roof: Flat & Pitched

Heating: PTAC

Cooling: PTAC PEARL ST.

630 E 16TH AVE.

E. 16TH AVE. AREA STREET MAP

N. WASHINGTON ST. LOCATION MAP

SLOAN LAKE MILE HIGH STADIUM

DOWNTOWN 14TH AVE. DENVER

630 E 16TH AVE. E COLFAX AVE.

E 16TH AVE. N. WASHINGTON ST. CapitolAREA Hill AreaMAP Map

630 E 16TH AVE.

630 E 16TH

PROPERTY OVERVIEW NEIGHBORHOOD MAP DINING LIFESTYLE 1 Park & Co 31 Orange Theory Fitness 2 Ace Eat Serve 32 Woodhouse Day Spa 3 Steuben's 33 Room 5280 Escape 4 Tom's Diner 34 CrossFit Colfax PARK AVE. 5 Prohibition 35 Civic Center Park 6 Cheba Hut 36 State Capitol 17TH ST. 7 Sliceworks 37 The 1up

BROADWAY ST. BROADWAY 8 Watercourse Foods 38 Fillmore Auditorium 9 Stoney's Uptown 39 Ogden Theater 17 8 32 9 16 18 10 The Avenue Grill 40 Core Power Yoga 1 2 3 15 20 22 10 30 19 31 14 21 11 Hudson Hill 41 YMCA 33 630 E 16TH AVE. 12 Jelly Café E. 16TH AVE. 41 13 The Corner Beet 14 The district 38 34 24 37 15 The Denver Bicycle Café E. COLFAX AVE. 4 39 23 29 5 7 26 6 28 25 16 Waffle Brothers 36 35 27 Humboldt Farm, Fish & 17 13 Wine 18 Dos Santos 19 Olive & Finch 40 11 E. 13TH AVE. 12 20 Jack's uptown Grille 21 Thirsty Monk Denver 22 The Knotty Neighbor 23 Irish Snug 24 Alpine Dog Brewing 25 VooDoo Doughnut 26 Sassafras RETAIL 27 Natural Grocers 28 Argonaut Wine & Liquor 29 Capitol Hill Books 30 Marczyk Fine Foods PHOTOS 63 0 E 16TH AVE . PHOTOS630 E 16TH AVE. PHOTOS 630 E 16TH AVE. What is Sonder?

It’s an answer to a lot of questions we’ve been asking. Like what would happen if we had a space to stay in neighborhoods we wanted to live in all around the world? What if those spaces included a dining area, and a living space and perhaps an extra bedroom or two for the kids? What if the design was modern and exciting, and the only thing cookie-cutter was…nothing? A place like that would help create a travel experience built to take guests further. To bring them home better. And that’s a place we’d like to stay. And a philosophy we’ve built our company around.

For more information about Sonder visit: https://www.sonder.com/

From the San Francisco Business Times:

Move over, Airbnb — there’s a new travel broker on the block. San Francisco-based Sonder is close to completing an investment round that will value the company at about $1 billion, with Greylock Partners, Spark Capital and Structure Capital among those investors expected to participate, according to the Wall Street Journal. Sonder operates rooms for travelers, but unlike Airbnb, the company takes over leases and maintains the furnished properties on its marketplace, stocking them with items like toiletries. Having control of gives Sonder enhanced reliability compared to Airbnb, but it also means its operations are more expensive, and its model has been compared more to co- working business WeWork, which also rents out the properties it leases.

https://www.bizjournals.com/sanfrancisco/news/2019/04/25/sonder-an-airbnb-foe-emerges-as-next-sf-unicorn.html

Sonder Poised to Become Airbnb’s Billion-Dollar Competitor

Airbnb Inc. has made strides against travel-industry incumbents, but is now facing its own competition from an emerging group of startups. One of them is Sonder Corp., an operator of a rentals marketplace for travelers that is close to completing an investment round that will value the company at about $1 billion, according to people familiar with the matter. Greylock Partners, Spark Capital and Structure Capital are among the existing investors expected to participate. A person familiar with the matter said the investment is expected to be about $200 million, but that amount could change.

https://www.wsj.com/articles/sonder-poised-to-become-airbnbs- billion-dollar-competitor-11556068140 ESSEX HISTORY

The Essex was granted historical landmark status in November of 2018 by the City of Denver. This designation was granted given specific details associated with the subject. First, the property is directly associated with the historical development of the City of Denver and is situated in one of the three principle historic subdivisions (Clements Addition of North Capitol Hill) of the city. Second, the architect of the subject building is William E. Fisher, a prominent Denver architect and part of the Fisher & Fisher Architectural firm. The subject represents one of Fishers early commissions and specifically one of his first apartment designs. The historical landmark status places restrictions on exterior modifications to the building and protects the structure from undue future demolition. Unit Type Unit Amount Unit SF

Studio 1 400 1 Bed / 1 Bath 11 550 2 Bed / 1 Bath 8 800 2 Bed / 2 Bath 1 1208

Total / Average 20 703

FLOOR PLANS 02 FINANCIALSFINANCIALS INVESTMENT SUMMARY DEBT SUMMARY Purchase Price: $6,700,000 Loan to Value: 75.00%

Units: 20 Loan Amount: $5,025,000

Price Per Unit: $335,000 Loan Term: 60 Months

Total SF: 16,465 Interest Rate: 4.25%

Price Per SF: $407 Amortization: 30 Years

In-Place Cap Rate: 6.14%

Market Cap Rate: 6.25%

In-Place Cash on Cash: 6.45%

Market Cash on Cash: 7.67% CASH FLOW PROJECTIONS

T12 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

REVENUE

Rental Revenue $462,000 $473,550 $485,389 $497,523 $509,962 $522,711 $535,778 $549,173 $562,902

EXPENSES

Insurance $12,800 $13,120 $13,448 $13,784 $14,129 $14,482 $14,844 $15,215 $15,596 Real Estate Taxes $38,000 $41,800 $41,800 $41,800 $41,800 $45,980 $47,130 $51,842 $51,842

Total Expenses $50,800 $54,920 $55,248 $55,584 $55,929 $60,462 $61,974 $67,058 $67,438 Expenses Per Unit $2,540 $2,746 $2,762 $2,779 $2,796 $3,023 $3,099 $3,353 $3,372

Net Operating Income $411,200 $418,630 $430,141 $441,939 $454,033 $462,249 $473,805 $482,115 $495,464 Cap Rate 6.14% 6.25% 6.42% 6.60% 6.78% 6.90% 7.07% 7.20% 7.39% SOLD COMPARABLES

Price Per Price Per Property Address Units SF Price $ Cap Rate Unit Foot (subject) 630 E 16th Ave 20 16,465 $6,700,000 $335,000 $407 6.14%

1 821 Corona 30 23,909 $12,000,000 $400,000 $502 4.90%

2 3330-3344 Mariposa St 20 21,000 $7,000,000 $350,000 $333 5.20%

3 2727 W 33rd Ave 17 8,759 $4,800,000 $282,353 $548 4.55%

4 1222-1226 E 10th Ave 13 11,849 $3,705,000 $285,000 $313 4.85% Averages $7,933,333 $344,118 $461 4.88%

3 2 YAWDAORB N YAWDAORB DOWNTOWN DENVER

CITY PARK S E COLFAX AVE.

4 CHEESMAN 1 PARK 03 LOCATION OVERVIEW DEMOGRAPHICS

Census 2018 Summary .25m .5m .75m Population 4,288 15,289 30,732 Households 2,854 10,664 20,724 Families 318 1,300 2,970 Average Household Size 1.42 1.36 1.42 Owner Occupied Housing Units 343 1,714 4,103 .75 Mile Renter Occupied Housing Units 2,511 8,949 16,621 Median Age 33.3 33.0 33.7 Median Household Income $45,886 $46,444 $48,134 .5 Mile Average Household Income $68,249 $71,128 $73,234

Census 2023 Summary .25m .5m .75m .25 Mile Population 4,857 17,988 35,501 Households 3,236 12,581 23,895 Families 361 1,603 3,561 Average Household Size 1.43 1.37 1.43 Owner Occupied Housing Units 414 1,969 4,687 Renter Occupied Housing Units 2,823 10,612 19,208 Median Age 34.5 34.0 34.5 Median Household Income $56,431 $57,855 $59,918 Average Household Income $80,332 $84,349 $87,257 CAP H

Capitol Hill is Denver’s most densely populated neighborhood, located just half of a mile away from the Colorado State Capitol building with the famed “Mile High” marker on the 13th step, and two miles southeast of Downtown Denver’s Union Station. It is approximately one square mile in size and is home to more than 37,660 residents. This historic neighborhood is more than 150 years old and is ranked as one of the top 10 most beautiful neighborhoods in the United States. Capitol Hill was once home to some of Denver’s wealthiest residents and is now an exuberant residential, governmental, and commercial center. The neighborhood continues to be highly desirable due its location and amenities.

• 50+ galleries • Night Clubs • Fine-art studios • Coffee Houses • Museums • Bistros • Specialty stores • Concert Venues • Restaurants

It is near Civic Center Park, which features live music and food trucks, Nearby museums include the Kirkland Museum of Fine and Decorative Art and the Molly Brown House. Popular music venues include The Fillmore Auditorium, Ogden Theatre, and the Bluebird Theater. East Colfax Avenue is the heart of Capitol Hill and serves as the neighborhood’s main commercial area.

*Some information sourced from www.stapletondenver.com PN ENER

Uptown Denver is a hip district located just three miles southeast of Downtown Denver. Uptown is Denver’s oldest residential neighborhood and is bounded by Broadway to the west, 23rd Avenue to the north, Park Avenue and Downing to the east, and Colfax Avenue to the south. Uptown includes Colfax Avenue, where renovations and new retail, residential, and office development is changing the landscape and revitalizing the area. Major employers in the area include St. Joseph Hospital, Presbyterian/St. Luke’s Medical Center, and Kaiser Permanente, which together employ more than 10,000 people. Uptown’s convenient location and ample amenities make it a highly desirable neighborhood, attracting young professionals, active singles, and urbanites alike.

This highly walkable neighborhood is characterized by an eclectic mix of old and new, including older brick rowhouses and new upscale condos, as well as picturesque places of worship, trendy eateries, popular watering holes, and lots of patios. Anchoring the neighborhood is Restaurant Row, which runs along 17th Avenue from Broadway to City Park. Restaurant Row is lined with cafes, bistros, pubs, and fine dining establishments.

Other attractions in the area include: Denver Zoo Denver Museum of Nature and Science Fillmore Auditorium. LTO CHEESMAN PARK

Cheesman Park is bounded by Colfax to the north, Eighth Avenue to the South, York Street to the east Downing Street to the west, and right between Capitol Hill and Congress Park. Cheesman Park is a tranquil residential area that centers on its namesake green space, with expansive lawns, shady jogging trails, a dramatic neoclassical pavilion. With one of the best green spaces Denver has to o er, it is also within biking distance to City Park and Congress Park. Just east of the park, Denver Botanic Gardens features themed areas and an amphitheater for popular summer concerts.

Casual pizzerias, relaxed co eehouses and hip craft-cocktail bars dot the streets around the park, including Marion Street Tavern, Pete’s Kitchen, Voodoo Doughnut, and Torta Grill. You can find a variety of housing options in Cheesman Park, though this highly sought-after neighborhood is mostly known for its mansions and luxury high-rise towers. The median price per square foot in Cheesman Park is $374, which is higher than the Denver average of $345.

*Some information sourced from www.stapletondenver.com

T O DENVER NOTE RNN #1 BEST PLACES TO LIVE (U.S. NEWS & WORLD REPORT 2016)

#1 IN ECONOMIC AMERICA’S BEST & JOB GROWTH PLACE FOR (AREA DEVELOPMENT, 2015) BUSINESS & CAREERS (FORBES, 2015 & 2016) TOP 10 PLACES IN THE U.S. TO TRAVEL 3RD BEST CITY FOR 6TH FASTEST (LONELY PLANET, 2016) COLLEGE GRADS GROWING METRO (RENT.COM, 2015) AREA IN THE U.S. (FORBES, 2016)

3RD HEALTHIEST CITY #1 IN THE NATION FOR IN THE NATION LARGEST INCREASE IN (FORBES, 2016) RESIDENTS WITH COLLEGE DEGREES (U.S. CENSUS BUREAU, 2014) 7TH BEST STATE IN WHICH TO 4TH BEST CITY MAKE A LIVING FOR BIKE RIDING (FORBES, 2016) IN THE U.S. (WALK SCORE, 2015) DENVER METRO

Located on the front range of the Rocky Mountains, the Denver Metro is a thriving urban epicenter famous for its breathtaking views, world-class dining, champion sports teams, exhilarating recreation, and eclectic arts and entertainment. It’s no wonder this metropolis is one of the biggest in the nation! ATTRACTIONS: Denver Art Museum Denver Museum of Nature and Science Denver Zoo Denver Aquarium Six-Flags Elitch Gardens Hyland Hills Water World Denver Aquarium

SPORTS Basketball: Denver Nuggets Hockey: Colorado Avalanche Football: Denver Broncos Baseball: Colorado Rockies Soccer: Colorado Rapids

*Some of this information sourced from denverpost.com DENVER GROWTH

Ranked as the top place to live in the U.S. by U.S. News & World Report, the city of Denver is home to over 693,000 residents (as of July 2016). An estimated 2.9 million people live in Denver Metro as a whole, with more people moving to the area each year, as this number is expected to grow by 12.6 percent over the next five years, compared to 3.7 percent nationally. Currently 100+ people are immigrating to the city each day. The Denver Metro accounts for over half of the population in the entire state of Colorado, which is home to an estimated 5.5 million people.

CONSTRUCTION

As one of the fastest-growing metros in the nation, Denver is thriving with new construction. This new construction will help accommodate the population growth throughout the metro. Some current projects include:

17TH & Curtis Street, 360-unit apartment buildings linked to a 9-story office building and 6 story parking structure.

Skyhouse Denver, a 354-unit apartment with street level retail.

Block 162, a full block project that included a 606,500 sq. ft. office tower and separate tower hotel.

Tabor Center Tower Two, a 31 story 700,000 sq. ft. office tower would be the largest development in Denver since 1985.

1144 Fifteenth St, a 40 story office tower with street level retail. EMOER N TE DENVER METRO

The Denver metro is a hub for various industries, including aviation, health, business, finance, and technology. Outside of city, state, and school services, major employers in the Denver metro area include Denver International Airport, Lockheed Martin, Health ONE Corporation, Centura Health, SCL Health Systems, Comcast, CenturyLink, Kaiser Permanente, Liberty Tax Service, Western Union, University of Colorado, Children’s Hospital, and Wells Fargo. In 2017, Amazon opened up a 1 million sq. ft. fulfillment center in Aurora, creating nearly 1,000 full-time jobs. Google is building a $131 million, four-acre, state-of-the art facility in Boulder, potentially bringing more jobs to the area.

Many companies choose to relocate to or expand in the Denver Metro, especially tech and startup companies. Between 2007-2015, approximately 9,000 companies chose to relocate from California to Denver. These employers are attracted to the innovative culture, economic environment, exceptional talent, and deep sense of social responsibility that characterizes the Denver Metro. Forbes ranks Denver as #1 in the nation for business and careers, and Area Development ranks Denver as #1 in the nation for economic and job growth.

Denver metro is home to many fast-growing startups, with 113 local companies making the Inc. 5000 list of the nation’s fastest-growing private companies for the year 2017.

*Some information was sourced from: https://choosecolorado.com/ LIGHT RAIL

The Regional Transportation District (RTD) operates 365 days a year to quickly connect travelers to their destination. As part of RTD, the 58-mile rail system features nine rail lines servicing 62 stations along the Denver metro’s North, East, Southeast, Southwest, and West rail corridors.

Popular destinations include:

• Denver International Airport (DIA) • Theatre District • Convention Center • Sports Authority Field at Mile High • Pepsi Center • 16th Street Mall • Park Meadows Mall.

RTD’s rail system has transformed people’s commutes and the communities they live in. The 23-mile stretch from Downtown Denver to DIA is now just a 30-minute ride via light rail. The light rail is also attributed with revitalizing neighborhoods across the Denver metro, including Five Points and West Colfax. An average of 64,000 people utilize the light rail each day, making it eighth-largest system in the country, even though Denver is 21st in the nation in terms of population. DENVER INTERNATIONAL AIRPORT

Denver International Airport (DEN), also known as DIA, opened to the public on February 28, 1995 and at 34,000 acres, remains the largest and newest commercial airport in the United States. It’s known around the world for its striking tented roof structure and technologically advanced operations. Over the past twenty years, DIA has established itself as the primary employer and economic driver in the Denver metro, supporting nearly 190,000 jobs and generating more than $26 billion in annual revenue. Served a record setting 58 Million passengers in 2017.

The airport serves over 170 destinations including 20 international cities in nine countries.

DIA is just 30 minutes from Union Station via the East Rail line. DIA has room to double its current capacity to remain competitive in the growing global aviation marketplace. DIA broke ground in May of 2018 on a $1.8 billion gate expansion project. The project will add 39 gates across all three concourses in the next four years, bringing the total to 150.

The expansion will utilize the airport’s original “telescoping” design by expanding eastward and westward at the ends. The expansion is expected to be completed by the end of 2021.

DIA is among the first airports in North America to secure internationally recognized accreditation for measuring and reducing carbon emissions.

*Some of this information sourced from denverpost.com NEXUS BROKERS

JASON KOCH ADAM RIDDLE BRANDON KAUFMAN NIK MACCARTER SEAN HOLAMON Co-Founder/Principal Co-Founder/Principal Sr. Investment Advisor Sr. Investment Advisor Investment Advisor

303.918.8909 303.257.7627 303.547.7357 303.909.2900 303.588.2119 [email protected] [email protected] [email protected] [email protected] [email protected]

AUSTIN SMITH ANTHONY BOBAY GUNNAR WILSON ROBERT GRAY PAT KNOWLTON Investment Advisor Investment Advisor Investment Advisor Investment Advisor Investment Advisor Colorado Springs Colorado Springs 303.868.9096 970.306.3787 720.297.6667 [email protected] [email protected] 713.857.3054 719.648.0423 [email protected] [email protected] [email protected] 630 E 16TH AVE DENVER, CO 80203

NIK MACCARTER BRANDON KAUFMAN Sr. Investment Advisor Sr. Investment Advisor [email protected] [email protected] 303.909.2900 303.547.7357