ASTER GARDENS 1950 W Aster Dr. | Phoenix, AZ 85029 Offering Memorandum ASTER GARDENS 1950 W Aster Dr. | Phoenix, AZ 85029

Presented: NorthMarq

Ryan Boyle SENIOR ASSOCIATE T 602.952.4050 C 602.510.2972 [email protected]

Daniel Liebsohn SENIOR ASSOCIATE T 602.952.4048 C 602.284.5904 [email protected]

VISIT US ONLINE:

Phoenix Office 3131 E. CAMELBACK RD. SUITE 415 This document/email has been prepared by Northmarq for advertising and general information only. Northmarq makes no guarantees, representations or warranties of any kind, PHOENIX, AZ 85016 expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Northmarq excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes 602.955.7100 all liability for loss and damages arising there from. This publication is the copyrighted property of Northmarq and/or its licensor(s). © 2019. All rights reserved. CONTENTS

PROPERTY INFORMATION 06

MARKET OVERVIEW 16

RENT COMPARABLES 26

FINANCIAL ANALYSIS 32

LOCATION MAPS 37

PROPERTY DESCRIPTION Property Overview Unit Mix Breakdown Property Photos 6 NORTHMARQ INVESTMENT SALES PROPERTY OVERVIEW

OFFERING MECHANICAL Price $3,250,000 Heating / Cooling Individual Roof Mounted Units Terms Cash - Fee Simple Hot Water Individual Domestic Water Heaters Electricity Partially Reimbursed by Tenant SITE DESCRIPTION Water / Sewer Partially Reimbursed by Tenant Apartment Community Aster Gardens 1950 W Aster Dr. Location Phoenix, AZ 85029 CONSTRUCTION Total Units 28 Style Single Story Year Built 1970 Foundation Concrete Net Rentable Square Feet 22,700 Framing Block Number of Buildings 7 Exterior Painted Brick Number of Stories 1 Roof Pitched Shingle Sub-market North Black Canyon Parking Surface Asphalt Land Size 0.85 Acres Density 32.94 Units Per Acre PROPERTY TAXES 28 Covered Spaces Parking Number of Parcels 29 20 Uncovered Spaces Tax Parcel Number 149-04-844; -872 Laundry On-Site Laundry Facility 2018 Property Tax $4,664

ASTER GARDENS 7 UNIT MIX BREAKDOWN

# OF % OF SQUARE MANAGER ASKING ASKING AVERAGE AVERAGE TOTAL ASKING TOTAL AVERAGE UNIT TYPE VACANT UNITS COMPLEX FEET UNIT RENT RENT / SF IN-PLACE RENT RENT / SF RENT RENT Studio 1 3.57% 342 - - $675 $1.97 $600 $1.75 $675 $600 1BD/1BA 3 10.71% 644 - - $775 $1.20 $672 $1.04 $2,325 $2,016 2BD/1BA 17 60.71% 798 - 1 $865 $1.08 $788 $0.99 $14,705 $13,396 2BD/1.5BA 4 14.29% 980 - - $895 $0.91 $795 $0.81 $3,580 $3,180 3BD/2BA 3 10.71% 980 - - $995 $1.02 $883 $0.90 $2,985 $2,649 TOTAL / AVERAGE 28 100% 811 - 1 $867 $1.07 $780 $0.96 $24,270 $21,841

8 NORTHMARQ INVESTMENT SALES Studio 3BD/2BA 3% 11% 1BD/1BA 11%

2BD/1.5BA 14%

2BD/1BA 61%

ASTER GARDENS 9 10 NORTHMARQ INVESTMENT SALES ASTER GARDENS 11 12 NORTHMARQ INVESTMENT SALES ASTER GARDENS 13 14 NORTHMARQ INVESTMENT SALES MARKET OVERVIEW Area Description Phoenix Overview

ASTER GARDENS 15 AREA DESCRIPTION

Aster Gardens is located at 1950 W Aster Drive in Phoenix, . The property is situated south of Thunderbird Road. The subject’s close proximity to Loop 101 and I-17 connecting the cities of Phoenix, Glendale, Peoria, and Scottsdale provides tenants with quick access to major employment corridors. The surrounding neighborhood consists primarily of single and multi-family housing with commercial developments located along the I-17.

Aster Gardens’ proximity to Interstate 17 and the Loop 101 Freeway provides easy access to the major employers such as American Express, Wells Fargo, Bull HN Information Systems, Cox Communications, TriWest Healthcare, PetSmart headquarters and Karsten Manufacturing.

16 NORTHMARQ INVESTMENT SALES DEMOGRAPHICS RADIUS FROM PROPERTY 1 MILE 3 MILE 5 MILE

Population: 2024 Projection 31,373 164,580 465,169 Additional nearby employers and job centers include the Arrowhead Towne 2019 Estimate 27,772 151,495 432,254 Center regional mall, Banner Thunderbird Medical Center, Arrowhead Hospital, 2010 Census 16,001 125,714 384,577 Metrocenter regional mall, Arizona State University West Campus, and Growth 2019-2024 12.97% 8.64% 7.61% Glendale Community College. The property is just minutes from the Phoenix Growth 2010-2019 73.56% 20.51% 12.40% Metro Light Rail Park and Ride. 2019 Population Hispanic Origin 10,193 47,272 121,925 2019 Population by Race: Nearby community colleges and universities include Glendale Community White 21,996 124,386 360,428 College, located at Olive Avenue and 59th Avenue, Arizona State University Black 2,422 10,177 25,979 - West Campus, located at 51st Avenue and Thunderbird Road, and Am. Indian & Alaskan 1,448 5,851 13,585 Midwestern University, located at 59th Avenue and Loop 101. Arizona State Asian 727 5,749 17,506 Hawaiian & Pacific Island 127 491 1,233 University has three campuses in the Phoenix Metropolitan Area with an Other 1,052 4,842 13,524 enrollment of over 100,000 students in 2018. Midwestern University includes U.S. Armed Forces: 26 73 172 an enrollment of over 6,000 students and is aggressively growing their Households: presence as an educational institution. 2024 Projection 12,609 64,580 180,771 2019 Estimate 11,137 59,492 168,270 2010 Census 6,239 49,526 151,122 Growth 2019 - 2024 13.22% 8.55% 7.43% Growth 2010 - 2019 78.51% 20.12% 11.35% Owner Occupied 3,141 27,665 92,799 Renter Occupied 7,995 31,827 75,471 2019 Avg Household Income $45,732 $61,906 $67,422 The subject’s close proximity to Loop 2019 Med Household Income $35,956 $44,603 $50,236 2019 Households by Household Inc: 101 and I-17 connecting the cities of <$25,000 3,443 15,209 38,653 $25,000 - $50,000 4,097 17,200 45,103 “ $50,000 - $75,000 2,140 10,984 32,118 Phoenix, Glendale, Peoria, and $75,000 - $100,000 831 7,005 20,229 Scottsdale provides tenants with quick $100,000 - $125,000 225 3,382 12,216 $125,000 - $150,000 112 1,930 6,999 access to major employment corridors. $150,000 - $200,000 147 1,913 6,998 $200,000+ 142 1,868 5,952 Source: Costar

ASTER GARDENS 17 ASTER GARDENS BREAKDOWN

133,027 12,746 BUSINESSES WORKFORCE WITHIN WITHIN 5 MILES 5 MILES SOURCE: COSTAR SOURCE: COSTAR

TRAFFIC COUNT PER DAY NORTH ON SWEETWATER 34 AVERAGE AGE 28,857 WITHIN 1 MILE SOURCE: COSTAR SOURCE: COSTAR

$201,700 $44,603 MEDIAN Nearby community colleges and universities SF HOME HOUSEHOLD INCOME MEDIAN WITHIN include Glendale Community College, located at LIST PRICE 3 MILES SOURCE: ZILLOW/85029 SOURCE: COSTAR “Olive Avenue and 59th Avenue, Arizona State University - West Campus, located at 51st Avenue 13% and Thunderbird Road, and Midwestern 2019-2024 95%SUBMARKET POPULATION OCCUPANCY GROWTH SOURCE: University, located at 59th Avenue and Loop 101. SOURCE: COSTAR COSTAR

18 NORTHMARQ INVESTMENT SALES ±133,027 JOBS

±53,659 JOBS

±2,654 JOBS ASTER GARDENS 1 MILE

3 MILES NUMBER OF JOBS IN THE AREA

±2,654 JOBS WITHIN A ONE MILE RADIUS FROM THE PROPERTY

±53,659 JOBS WITHIN A THREE MILE RADIUS FROM THE PROPERTY

±133,027 JOBS WITHIN A FIVE MILE RADIUS FROM THE PROPERTY 5 MILES

ASTER GARDENS 19 ASTER GARDENS IS WITHIN EASY ACCESS TO:

• Sky Harbor International Airport – one of the top ten busiest airports in the nation with more than 100,000 passengers daily, over 31,000 employees & a daily economic impact of $90 million • Deer Valley Airport - serves to relieve air traffic from Sky Harbor; situated on 914 acres and is home to more than 1,277 aircrafts • Metrocenter Mall - 1.3 million square foot super-regional shopping mall in northwest Phoenix with over 100 retailers and restaurants. Currently being transformed by initiating a new Planned Urband Development (PUD) Zoning Overlay to accommodate a 2,700,000 square feet mixed-use environment, including office, medical and residential units. New 148,000 square feet Walmart Supercenter opened July 2017 • Glendale Sports and Entertainment District: Westgate Shopping District, University of Phoenix Stadium, and Gila Rivera Arena • Desert Ridge Marketplace - premier shopping and entertainment destination with over 110 retailers and restaurants • - anchored by Macy’s, Sears, Dillard’s, JCPenney, and AMC Theatres and is home to 132 tenants • - anchored by Macy’s, Sears, Dillard’s, JCPenney, and Costco and is home to 160 tenants • - over 600,000 square feet of luxury outdoor retail and dining • HonorHealth Deer Valley Medical Center - Magnet status 204-bed full service hospital • HonorHealth John C. Lincoln Medical Center - Magnet status 266-bed full service hospital • Banner Thunderbird Medical Center - 504-bed hospital ranked 6th best in Phoenix metro area • Abrazo Scottsdale Campus - 142-bed acute care hospital • Phoenix Children’s Hospital - 385 bed hospital currently undergoing a $60M expansion project which will accommodate up to 100,000 patients per year (existing capacity is 22,000 patients) • Thunderbird School of Global Management - top ranked global business school with over 1,000 students enrolled (recently acquired by ASU). • Midwestern University - top physician assistant program (#20) in the country with 3,000 students enrolled

20 NORTHMARQ INVESTMENT SALES ASTER GARDENS IS WITHIN EASY ACCESS TO:

Downtown Phoenix is the #1 employment center with over“ $3 billion in new development planned or underway.

• Grand Canyon University - rapidly expanding educational institution with over 74,000 • Camelback Corridor/Biltmore area - 12,400+ employees and over 100 companies (20th Street students enrolled to 32nd Street along Camelback Road) • Arizona State University Main Campus – largest in the nation with over 100,000 • Old-Town Scottsdale features dozens of restaurants and bars, the 1.6-million square foot students enrolled Scottsdale Fashion Square Mall • SkySong - a 1.2 million square foot mixed-use project with more than 1,000 employees and • Mill Avenue District (Downtown Tempe) – unique urban environment with countless 50 companies commercial, retail & office developments and over 30,000 workers • New $1.4 billion Phoenix Metro Light Rail connecting Tempe to Mesa, Downtown & • Tempe Town Lake & Beach Park – over 6 million square feet in new development planned, Greater Phoenix under construction or recently completed including Marina Heights, a $600M, 20-acre, mixed-use development that will include five office buildings leased by State Farm, retail • Downtown Phoenix - #1 employment center with over $3 billion in new development planned amenities and a 10-acre plaza to be constructed over the next four years or underway

ASTER GARDENS 21 PHOENIX OVERVIEW

Phoenix is a classic growth market, highlighted by robust growth during economic White-collar jobs have been fueling the growth in the local economy in recent years as the expansions. The local employment market has been adding workers since 2010, with Phoenix area has been able to secure commitments from several large financial/insurance a healthy pace of growth recorded since 2012. Employers have added an average of companies that will result in thousands of new jobs. State Farm made one of the biggest approximately 55,000 workers per year since 2012, annual percentage growth of 2.9 splashes, committing to a 2-million square foot regional corporate campus. The company percent. Even with the economy in in the later stages of the recovery, employment growth will ultimately have approximately 10,000 workers at the sight in Tempe. In late-2018, is accelerating; more than 86,000 jobs have been added in the past 12 months—the Nationwide Insurance purchased a 143-acre land parcel in north Scottsdale. The first fourth-most new jobs created in the country in that time—a growth rate of 4.2 percent. phase of the project will bring 2,200 workers to the campus, with room for expansion.

The Phoenix “multifamily market is showing clear signs of being at equilibrium.

22 NORTHMARQ INVESTMENT SALES Employment growth in the financial activities sector has averaged more than 4.7 percent since 2015, adding nearly 30,000 workers in that time. The professional and business services sector has also been a tremendous source of growth in the local economy. Employers in the sector have added 14,000 jobs in the past 12 months, and more than 75,000 positions since the beginning of 2012.

In addition to white-collar segments of the economy, the construction sector has been adding to fuel to the economic fire in recent years as the housing market has gained traction. Year over year, more than 17,000 construction jobs have been added locally, a nearly 15 percent surge in local construction employment. An increase in activity among single-family homebuilders, multifamily developers and commercial construction is causing the rise in construction employment, and putting upward pressure on wages.

The Phoenix multifamily market is showing clear signs of being at equilibrium. The vacancy rate has remained in a very tight range even as deliveries of new units has accelerated. Completions thus far in 2018 are ahead of the pace established last year, but so is net absorption, which has outpaced the delivery of new units. It is this strong renter demand that is fueling rent growth, which topped $1,000 per month earlier this year and continued to trend higher in the spring and summer months.

The primary of drivers of multifamily demand will remain firmly in place in Phoenix in the coming quarters. The market continues to add jobs, with companies such as Deloitte and Nationwide Insurance committing to bringing thousands of workers to the Valley in the coming years. In addition, Maricopa County is leading the country in annual population growth. These new residents will need places to reside and if current patterns hold, nearly 40 percent of the new households in the Phoenix metro area will choose rental housing.

ASTER GARDENS 23

COMPARABLES & FINANCIAL ANALYSIS

Rent Comparables Financial Analysis RENT COMPARABLES 01

02 03

01

UNIT SIZE PHYSICAL ASKING ASKING NET RENT/ NET MANAGED PROPERTY YEAR BUILT UNITS AVG. SF OCCUPANCY RENT/UNIT RENT/SF UNIT RENT/SF BY Aster Gardens 1970 28 811 100% $867 $1.07 $867 $1.07 CAM 01 Sunnyslope 1973, 1982, 1989 20 773 95% $717 $0.93 $717 $0.93 Owner 02 Cactus Place 1975 48 846 98% $668 $0.79 $668 $0.79 Owner 03 Garden Cove 1977, 1979, 1982 44 835 85% $787 $0.94 $787 $0.94 Sunrise

26 NORTHMARQ INVESTMENT SALES RENT AVERAGES

1980 YEAR BUILT

37 UNITS 02 818 UNIT SIZE AVG. SF ASTER GARDENS 93% PHYSICAL OCCUPANCY

$724 ASKING RENT/UNIT 05 03

$0.89 01 NET RENT/SF

ASTER GARDENS 27

ASTER GARDENS 1950 W Aster Dr. Phoenix, AZ 85029

Owner: Seven Years LLC

UNIT MIX

UNIT TYPE UNITS SF ASKING RENT/UNIT ASKING RENT/SF NET RENT/UNIT NET RENT/SF

Studio 1 342 $675 $1.97 $675 $1.97 1BD/1BA 3 644 $775 $1.20 $775 $1.20 2BD/1BA 17 798 $865 $1.08 $865 $1.08 2BD/1.5BA 4 980 $895 $0.91 $895 $0.91 3BD/2BA 3 980 $995 $1.02 $995 $1.02 TOTAL/AVG. 28 811 $867 $1.07 $867 $1.07

28 NORTHMARQ INVESTMENT SALES RENT COMPARABLES

01 SUNNYSLOPE 10705 N 15th Ave. Phoenix, AZ 85029

Owner: PKK Investments LLC

UNIT MIX

UNIT TYPE UNITS SF ASKING RENT/UNIT ASKING RENT/SF NET RENT/UNIT NET RENT/SF

1BD/1BA 5 600 $585 $0.98 $585 $0.98

2BD/1BA 13 800 $757 $0.95 $757 $0.95

2BD/1BA 1 968 $684 $0.71 $684 $0.71

2BD/2BA 1 1100 $896 $0.81 $896 $0.81

TOTAL/AVG. 20 773 $717 $0.93 $717 $0.93

ASTER GARDENS 29

02 CACTUS PLACE 2040 W Cactus Rd. Phoenix, AZ 85029

Owner: Geiger Properties

UNIT MIX

UNIT TYPE UNITS SF ASKING RENT/UNIT ASKING RENT/SF NET RENT/UNIT NET RENT/SF

1BD/1BA 1 650 $516 $0.79 $516 $0.79

2BD/1.5BA 47 850 $671 $0.79 $671 $0.79

TOTAL/AVG. 48 846 $668 $0.79 $668 $0.79

30 NORTHMARQ INVESTMENT SALES RENT COMPARABLES

01 GARDEN COVE 1626 W Desert Cove Ave. Phoenix, AZ 85029

Owner: Michael Jerome

UNIT MIX

UNIT TYPE UNITS SF ASKING RENT/UNIT ASKING RENT/SF NET RENT/UNIT NET RENT/SF

2BD/1BA 44 835 $787 $0.94 $787 $0.94

TOTAL/AVG. 44 835 $787 $0.94 $787 $0.94

ASTER GARDENS 31 T-1 INCOME/T-12 EXPENSES OPERATING INCOME GROSS INCOME ASKING MONTHLY Monthly Scheduled Gross Rent $24,270 UNIT TYPE UNITS SF Annual Scheduled Gross Rent $291,240 RENT/UNIT RENT Studio 1 342 $675 $675 Physical Vacancy 3.57% -$866 1BD/1BA 3 644 $775 $2,325 Loss to Lease 8.37% -$24,384 2BD/1BA 17 798 $865 $14,705 Concessions 0.04% -$120 2BD/1.5BA 4 980 $895 $3,580 Model & Employee Units 3.19% -$9,300 3BD/2BA 3 980 $995 $2,985 Economic Vacancy 3.02% -$8,783 TOTAL/AVG. 28 811 $867 $24,270 Net Rental Income $247,787 RUBS $41,503 T-1 INCOME ANNUALIZED Laundry Income $5,405 T-12 EXPENSES ANNIALIZED Other Income (Late Fees, Pet Fees, Application Fees, Etc.) $13,190 Gross Operating Income $307,884 WITH ADJUSTMENT NOTES OPERATING EXPENSES PER UNIT Property Taxes $167 $4,664 Maintenance & Repairs $1,174 $32,880 TRAILING FINANCIALS AS OF MARCH 2019 Turnover $207 $5,787 RENTS Contract Services $454 $12,718 Current asking rents. Electricity $1,440 $40,317 Gas $204 $5,714 PHYSICAL VACANCY Rent Roll dated April 25, 2019 Sewer and Water $736 $20,596 Trash $94 $2,624 ECONOMIC VACANCY Payroll $102 $2,854 Includes Historical Physical Vacancy and Bad Debt Management Fee 4.03%OF GOI $443 $12,396 PROPERTY TAXES Administrative Expenses $85 $2,384 2018 annual property taxes quoted from the Maricopa TOTAL OPERATING EXPENSES $163,862 County Treasurer. Operating Cost Per Unit $5,852 EXPENSES Operating Cost Per Sq Ft $7.22 Trailing Year-to-Date month P&L statement through March NET OPERATING INCOME $144,022 2019. Capital Reserve $300 $8,400 ADJUSTED NET OPERATING INCOME $135,622

32 NORTHMARQ INVESTMENT SALES PROFORMA PRO FORMA OPERATING INCOME PROFORMA OPERATIONS ASKING MONTHLY Monthly Scheduled Gross Rent $24,998 UNIT TYPE UNITS SF RENT/UNIT RENT Annual Scheduled Gross Rent $299,977 Studio 1 342 $695 $695 Physical Vacancy 3.00% -$8,999 1BD/1BA 3 644 $798 $2,395 Loss to Lease 2.00% -$6,000 2BD/1BA 17 798 $891 $15,146 Economic Vacancy 5.00% -$14,999 2BD/1.5BA 4 980 $922 $3,687 Net Rental Income $269,979 3BD/2BA 3 980 $1,025 $3,075 TOTAL/AVG. 28 811 $893 $24,998 RUBS $42,748 Laundry Income $5,567 Other Income $13,585 NOTES Gross Operating Income $331,880 PRO FORMA OPERATING EXPENSES PER UNIT RENTS Property Taxes $167 $4,664 Increased current asking rents 3%. Insurance $175 $4,900 PHYSICAL VACANCY Maintenance & Repairs $350 $9,800 Consistent with submarket performance. Turnover $200 $5,600 RUBS Contract Services $100 $2,800 Estimated $132/month/occupied unit. Electricity $1,483 $41,526 Increased 3% from T-12 income operations. Gas $210 $5,886 LAUNDRY & OTHER INCOME Sewer and Water $758 $21,214 Increased 3% from T-12 income operations Trash $97 $2,703 PROPERTY TAXES 2018 annual property taxes quoted from the Maricopa Payroll $500 $14,000 County Treasurer. Management Fee 4.00%OF GOI $474 $13,275 UTILITIES Administrative Expenses $200 $5,600 Increased 3% from T-12 income operations. Capital Reserve $300 $8,400 TOTAL OPERATING EXPENSES $140,368 REPLACEMENT EXPENSES Removed from Pro Forma Expenses Operating Cost Per Unit $5,013 OPERATIONAL EXPENSES Operating Cost Per Sq Ft $6.18 Based on industry standards of similar properties. PRO FORMA NET OPERATING INCOME $191,512

ASTER GARDENS 33

LOCATION MAPS

Regional Map Neighborhood Map Bird’s Eye View Parcel Map Del E Web HonorHealth Hospital Deer Valley Paradise Hospital Valley Scottsdale Arrowhead Community Sports Complex Towne Center College Paradise Valley Peoria Thunderbird Scottsdale Stadium Hospital Quarter School of Global Kierland Management Scottsdale Commons Airport Banner ASU - West Paradise Thunderbird Campus Valley Medical Mall Center Glendale MetroCenter ASTER GARDENS Gainey Community Mall HonorHealth College John C. Lincoln Ranch Hospital McCormick Wildlife Ranch World Zoo Salt River Westgate Fields at Luke Air Glendale City Center Talking Stick Force Base Municipal Christown Airport University Spectrum of Phoenix Mall Stadium Grand Canyon Biltmore University Fashion Park Wigwam Maryvale Phoenix VA Scottsdale Golf Course Golf Course Medical Fashion Center Square Estrella Banner Maryvale Mountain Estrella St. Joseph’s Phoenix Baseball Hospital Community Medical Desert Park Children’s College Center Hospital Gateway Sky Mall West Valley Pavillions SkySong Hospital Retail Center Papago Cancer Treatment Avondale Canal Industrial Park Downtown Phoenix Park / Zoo Center of America AutoMall Phoenix Sky Harbor Freeport Airport Industrial Tempe Center Phoenix Marketplace NN Goodyear Arizona State Airport University

36 NORTHMARQ INVESTMENT SALES PHOENIX MSA REGIONAL & NEIGHBORHOOD

Boeing

Accounting Office Falcon Discover Financial Field Services

Corporate Office

PARK AT DEER VALLEY

ASTER GARDENS

ASTER GARDENS

ASTER GARDENS 37 ASTER GARDENS

38 NORTHMARQ INVESTMENT SALES BIRDS EYE AND PARCEL MAP BIRD’S EYE & PARCEL MAP

LON ADAMS RD.

ASTER GARDENS 39 Ryan Boyle Daniel Liebsohn Alex Quenzler Phoenix Office SENIOR ASSOCIATE SENIOR ASSOCIATE VICE PRESIDENT-PRODUCER 3131 E. CAMELBACK RD. INVESTMENT SALES INVESTMENT SALES DEBT & EQUITY SUITE 415 T 602.952.4050 T 602.952.4048 T 602.508.2209 PHOENIX, AZ 85016 C 602.510.2972 C 602.284.5904 C 480.522.0250 [email protected] [email protected] [email protected] 602.955.7100