The Park at Buckingham

THE PARK AT BUCKINGHAM 583 UNITS | HOMEWOOD, AL Excellent Value Add Opportunity in A+ Suburb OFFERING TERMS Property is offered on an all-cash basis. OFFERING PROCESS Offers should be in the form of a Letter of Intent (LOI) and at minimum include: Price, Earnest Money, Due Diligence Time Period, and Closing Period. TABLE OF CONTENTS INVESTMENT SUMMARY / PG. 01 PROPERTY DESCRIPTION / PG. 17 LOCATION OVERVIEW / PG. 33 APARTMENT MARKET / PG. 45 FINANCIAL ANALYSIS / PG. 61 THE PARK AT BUCKINGHAM INVESTMENT SUMMARY 1 INVESTMENT SUMMARY 2 THE PARK AT BUCKINGHAM INVESTMENT OFFERING INVESTMENT HIGHLIGHTS The Multifamily Advisory Group is pleased to present the exclusive listing of The Park at Buckingham – 583 units located in Birmingham’s Homewood submarket, which is ranked #2 of Alabama’s top suburbs. Homewood maintains heavy restrictions on new multifamily development, resulting in zero under-construction units and less than 750 delivered units over the past 10 years. Residents at the subject property are afforded easy access to dense cores of quality jobs and upper echelon retail options. Constructed in 1972, The Park at Buckingham features substantial, untapped value add upside within the premier suburban district of Homewood. THE PARK AT BUCKINGHAM Address 114 Aspen Circle, Homewood, AL 35209 County Jefferson County School District Homewood City Schools Number of Units 583 Units Year Built 1972 Rentable Area 532,496 SF Avg. Unit Size 913 SF Site Size 33.47 Acres Avg. Market Rent $696 Avg. Market Rent/SF $0.76 Occupancy 94.7% 3 INVESTMENT SUMMARY INVESTMENT HIGHLIGHTS MASSIVE VALUE ADD POTENTIAL A+ HOMEWOOD MARKET The subject is currently 95% occupied with most Ranked #2 of Alabama’s top suburbs, Homewood recent leases achieving 3%+ above market rents – is heavily sought-after for its highly-ranked school 1 creating space for organic rent growth. The next 4 system, low crime rates, and boutique retail. High investor can push rents and revenue via value add. barriers to entry have escalated property values. HEAVY OPERATIONAL UPSIDE ACCESS TO JOBS & EDUCATION The Park at Buckingham heavily exceeds The property is approximately 3 miles from comparable properties in Payroll, Insurance, downtown and The University of AL at Birmingham 2 and Utilities expenses. The next investor can add 5 (UAB). UAB has an annual economic impact of over $650k+ to bottom line NOI via expense savings. $7B with over 21,000 jobs. BOOMING BIRMINGHAM ECONOMY SIGNIFICANT BARRIERS TO ENTRY Birmingham has added 25,000 jobs in the last 5 Homewood heavily restricts new multifamily years and is a focal point of economic growth in zoning and development, resulting in no current or the state. Amazon’s new distribution center is 3 planned construction and rising occupancy. 6 underway and will add 1,500 – 3,000 new jobs. 4 THE PARK AT BUCKINGHAM 1. MASSIVE VALUE ADD POTENTIAL ROOM TO PUSH RENTS AND REVENUE The subject is currently 95% occupied with most recent leases achieving 3%+ above market rents – creating space for organic rent growth. The next investor can push rents and revenue via value add. The next investor at The Park at Buckingham will be acquiring an asset with massive upside potential, already proven in the surrounding rental market. The subject lags comparable $5,000 48% $200+ properties in effective rents per month by an average of $190 in Est Cost for Unit Return on Projected 1BR floor plans, $280 in 2BR floor plans, and $300 in 3BR floor Upgrades Investment Premiums plans. Several adjacent properties have undergone renovations and are The Park at Buckingham has cycled through 3 property management firms during the now achieving considerable rent premiums of $150-$420. With tenure of current ownership. The turnover has deflated occupancy, resident retention, the initiation of a value add campaign, the next investor has the and the asset’s net cash flow. An effective property management team will be able opportunity to increase rental rates across the board and create to leverage the asset’s size, amenities, and location to generate stronger demand and outstanding exit value. streamline operations. VALUE ADD - MARKET ANALYSIS $1,050 $289 $1,000 Rent Gap $950 $900 $850 $800 $750 $700 $650 $600 The Park at Homewood Abbey at Elevation Valora at Marq Vestavia* Average Crescent at Brookwood AVIA* Buckingham Heights Regents Walk Homewood* Homewood* Lakeshore* *Under Renovation 5 INVESTMENT SUMMARY SIGNIFICANT RENTAL PREMIUMS ACHIEVABLE SUCCESSFUL VALUE ADD CAMPAIGNS IN HOMEWOOD The Park at Buckingham is primed to receive unit upgrades in order to compete at competitive market levels. The subject’s current market gap $419 validates the significant upside through strategic capital improvements. AVIA Post-Reno Broker recommended upgrades: • New Interior & Exterior Paint Schemes • Granite Countertops $203 Brookwood Post-Reno • New Windows & Doors • Stainless Appliances $189 Crescent Lakeshore Post-Reno Envisioned Paint Scheme $267 Marq Vestavia Post-Reno $288 Valora Homewood Post-Reno $153 Elevation Homewood Post-Reno $167 Homewood Heights Post-Reno $0 $500 $1,000 $1,500 Market Rent Post-Reno Pre-Reno 6 THE PARK AT BUCKINGHAM 1. MASSIVE VALUE ADD POTENTIAL (CONTINUED) UP-TRENDING LEASE TRAJECTORY The subject is also experiencing an outstanding lease trajectory as loss-to-lease has steadily diminished since 2015. The most recent leases are achieving 3%+ above asking rent which is a drastic improvement over the rent roll average of -2.5%. This positive lease trend underlines the untapped revenue growth potential at The Park at Buckingham. EMBEDDED ORGANIC RENT GROWTH The last 75 leases (moved in since July 2018) kick- started the gain-to-lease trend at an average of 0.71% collected rent above asking rates. With the most recent leases achieving 3%+ above asking rates, new management should have room to raise the market rent threshold organically. As this trend continues to bake into the rent roll, Year 1 collections should grow substantially for the next investor. LEASE TRAJECTORY 3.50% 2.50% 1.50% Lease % - to - 0.50% 0% LTL Rent Roll last 100 Move-Ins Last 75 Move-Ins Last 25 Move-Ins Last 10 Move-Ins Last 5 Move-Ins -0.50% Loss/Gain -1.50% -2.50% 7 INVESTMENT SUMMARY 10 4 7 5 18,333 STUDENTS 4,786 EMPLOYEES 11 1 2 3 23,000 EMPLOYEES (SYSTEM WIDE) 9 8 4,800 JOBS 65 530 JOBS NEW HOMEWOOD 6 12 E POLICE STATION HQ V A Y $22M PROJECT / BROKE E L L GROUND IN JUNE 2018 A V W THE PARK AT BUCKINGHAM 6 2,200 JOBS RETAIL MAJOR EMPLOYERS EDUCATION POINTS OF INTEREST 1. Brookwood Village 2. Brookwood Baptist Medical Center 7. UAB (18,333 Students) 9. Downtown Homewood Target, Macy’s, The 3. Children’s of Alabama (4,800 Jobs) 8. Samford University (5,509 Students) 10. Vulcan Park Fresh Market, DSW, 4. UAB (23,000 Jobs) 11. The Club Books-A-Million 5. St. Vincent’s Birmingham (4,786 Jobs System Wide) 12. New Homewood Police Station 6. Buffalo Rock (2,200 Jobs) Headquarters ($22M Project / Broke Ground in June 2018) 8 THE PARK AT BUCKINGHAM 2. HEAVY OPERATIONAL UPSIDE OPPORTUNITY TO MITIGATE ABOVE-MARKET EXPENSES The Park at Buckingham heavily exceeds comparable properties in Payroll, Insurance, and Utilities expenses. The next investor can add $650k+ to bottom line NOI via expense savings. $761 $243 $122 $650k+ Net Utilities Payroll Expense Insurance Above Potential Added NOI Above Market/Unit Above Market/Unit Market/Unit via Expense Reduction EXPENSE COMPS COMP 1 COMP 2 COMP 3 COMP 4 THE PARK AT BUCKINGHAM COMP AVERAGE Location Birmingham Homewoood Birmingham Homewood Homewood - Year Built 1979/1990 1973 1970 1971/2002 1972 1972 Units 176 96 196 219 583 172 Average Unit Size 868 914 837 997 913 907 R&M $621 $505 $538 $495 $774 $541 Payroll 1,141 1,069 888 1,202 1,321 1,078 Utilities Electric 223 139 197 210 334 200 Natural Gas 5 9 0 2 21 3 Water and Sewer 827 491 682 660 800 685 Cable/Internet/Misc. 17 304 14 0 320 51 Trash Removal 9 101 82 56 283 58 Total Utilities 1,081 1,044 975 928 1,758 997 Administrative 239 225 236 526 209 328 Advertising 45 128 200 175 135 142 PM Fee 231 378 282 365 251 309 Taxes 420 572 752 410 836 533 Insurance 260 201 201 129 315 193 Reserves 300 300 300 300 300 300 Total / AVG $4,338 $4,422 $4,372 $4,530 $5,899 $4,421 9 INVESTMENT SUMMARY RECOMMENDATIONS The next investor in at The Park at Buckingham can substantially boost Net Operating Income by achieving operational efficiencies at the property, which boasts over 580 units. The property’s utilities costs run well-above the market average (+$761). The next investor can add $400k+ via utilities expense reduction alone. The subject also heavily exceeds the market in Payroll expense (+$243/unit), with comparables containing far less units. Other comparable properties are capturing an approximately 64% of combined taxes and insurance costs per unit compared to the subject. • Streamline personnel on-site • Place targeted capital across the property • Install in energy-efficient plumbing and electrical fixtures MAJOR SCALE ACHIEVABLE IN HOMEWOOD SUBMARKET The next investor at The Park at Buckingham has the opportunity to establish a firm foothold in the Homewood submarket. The average Homewood apartment community consists of 215+- units. At 583 units, The Park at Buckingham constitutes nearly 10% of gross apartment supply in Homewood with no new supply in the pipeline. 10 THE PARK AT BUCKINGHAM 3. SIGNIFICANT BARRIERS TO ENTRY 4. A+ HOMEWOOD MARKET TIGHTENING MARKETS WITH NO NEW DEVELOPMENT Homewood heavily restricts new multifamily zoning and Zero <750 development, resulting in no current or planned construction and Units Units rising occupancy.

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