Braeswood Plaza a 66 Unit, Houston, Texas Apartment Community Located in the Braeswood Area of Southwest Houston

Home , Greenway Plaza, Rice Village, Southwest Houston

Braeswood Plaza A 66 Unit, Houston, Texas Apartment Community Located in the Braeswood Area of Southwest Houston

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com offer terms and requirements

EXCLUSIVE OFFERING: Braeswood Plaza| 5430 Birdwood| Houston, TX 77096 LISTING BROKER: Bishale Patel| Houston Income Properties, Inc. | 713.783.6262 Offer Date: To Be Determined Offering Process: The Property is being offered on an "All Cash" basis to qualified purchasers (New Loan Required).

Sale Condition: The owner of the Property is selling the Property in a "As-Is, Where-Is" condition and without representations or warranties, expressed or implied, of any kind. Offer Guidelines: Offers should be presented in the form of a non-binding Letter-of-Intent and must include at least: ·Purchase Price ·Earnest Money Deposit Amount ·Feasibility Period ·Description of Equity Source ·Closing Date ·Other terms and conditions particular to the buyer’s investment process ·Summary of buyer’s qualifications and evidence of financial ability to close Site Visits: All requests for additional information are to be made through the broker—713-783-6262

Disclaimer: The offering is subject to the Disclaimer contained herein. Principals and their representatives shall please refrain from contacting any onsite personnel or residents.

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

2 table of contents EXECUTIVE SUMMARY 4 • Investment Summary • Property Information (2 pages) • Location Maps (2 Pages) • Property Aerial FINANCIAL ANALYSIS 11 • Actual and Pro Forma Analysis • 10 Year Cash Flow Analysis • Value Projection at 60 Months PROPERTY INFORMATION 15 • Community Features • Unit Mix with Floor Plans • Site Map • Neighborhood Aerial • Harris County Plat • Flood Map MARKET OVERVIEW 22 • Primary Market Statistics • Sub Market Statistics • Comparative Rental Properties • Comparative Rental Properties Map REGIONAL HIGHLIGHTS 27 • County Location Map • Snapshot of Harris County • Houston Area Map • Houston MSA Facts (2 pages) • Houston Business • Area Development • Houston Demographics • Neighborhood Demographics PHOTO GALLERY 37 • Property Photos (5 pages) LEGAL INFORMATION • Brokerage Services Information 43 • Disclaimer 44

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

PROPERTY DESCRIPTION INVESTMENT PROFILE Name: Braeswood Plaza Type of Sale: ALL CASH - Buyer to Acquire a New Loan Address: 5430 Birdwood ASKING PRICE: No Official Asking Price City / State: Houston, Texas 77096 Current NOI: $247,704 For Current and Projected NOI see analysis in PLEASE DO NOT VISIT THE PROPERTY WITHOUT Projected NOI: $270,704 the financial section MAKING AN APPOINTMENT THROUGH THE BROKER. Property Type: Garden Style - 2 Story Buildings Current Occupancy: 95% As of 11-26-2017 No. of Buildings: 5 RUBS: Water, Pest, Trash Yr. of Construction: 1970 Per HCAD Primary Market Area: HOUSTON Materials: Mostly Brick with some Siding Secondary Market Area: BRAESWOOD Number of Units: 66 Scheduled Market Rent: $48,230 / Mth Total Rentable SF: 42,027 Avg. Rent / Unit: $731 Avg. Unit Size: 637 S.F. Avg. Rent / SF: $1.15

INVESTMENT HIGHLIGHTS: Braeswood Plaza Apartments lie on the border of the Bellaire City Limits and is a possible future land play. The property is zoned for the prestigious Bellaire High School (in the .50% academically in the U.S.). The trend in this area is to acquire existing older developments and redevelop the sites with high‐end class "A" construction. The property is located between multi‐million dollar neighborhoods within the city of Bellaire and neighborhoods within the Meyerland area where older homes built in the 60's are averaging over $540K+ and new homes are selling for well over $1 million. It is also within close proximity to the community of Westbury where 1960 built homes are selling for an average of $300K+ or $159.92/sf. Braeswood Plaza is potentially a land bank opportunity given the close proximity to Loop 610 (1.3 miles) and the surrounding areas that are going through gentrification. LOCATION: The subject property is located on the fringe of the Bellaire city limits and just west of the Meyerland area. It is located 3.5 miles southwest of the prestigious Galleria Shopping and Employment District. The property has easy access to major employers, health care, schools, shopping and dining inthe surrounding areas. The location is convenient to the Westpark Toll Way, which connects West Houston to the Galleria, Loop 610, the Sam Houston Toll Way (Beltway 8) and Hwy 69/Southwest Frwy. It is a short commute to Houston's largest employment centers including the Galleria, Westchase District, Greenway Plaza, Texas Medical Center and Downtown Houston. The area surrounding the property consists of high‐end neighborhoods such as the Galleria area to the north and the city of Bellaire just to the north and east where the construction is predominately "A" quality. The trend in these neighborhoods (due to location) is to purchase an older home, demolish it and rebuild with high‐end construction. Within the city of Bellaire, in 2017, the average purchase price of a single family home is $279/sf, which is higher than the Houston Metro average of $116/sf. The median home listing price in 2017 is $1,094,000. New construction in the city of Bellaire is almost 100% high‐end and as available construction sites disappear, developers will begin to encroach surrounding areas. Braeswood Plaza appears to be in a prime location poised for commercial or residential redevelopment, due to its location just a 1/2 mile outside the Bellaire city limits, where the land values, depending on location and lot size, range between $73/sf to $80/sf and it close proximity to Loop 610.

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

5 property information

PRICING INFORMATION PROPERTY INFORMATION UNIT MIX - CURRENT MARKET RENTS (please verify) Units: 66 No Official Asking Price Avg. Size Unit: 637 S.F. UNIT TOTAL RENT / TOTAL RENT #UNITS NOTES SQ. FT. Year Built: 1970 TYPE SQ. FT. UNIT RENT PER SF Electric Meter: Individual 8 EFF 348 2,784 $575 $4,600 $1.65 Roof: Pitched & Flat 4 EFF 396 1,584 $575 $2,300 $1.45 Land (Acres) Per CAD: 1.48 1 EFF 468 468 $575 $575 $1.23 Rentable Sq. Ft: 42,027 30 1-1 626 18,780 $735 $22,050 $1.17 Estimated Total Collections ~ (Occupancy is {95%} as of 11-26-2017 BOX SCORE) 11-1 626 626 $785 $785 $1.25 Mth. Sept. 2017 T-3 AVG Sep-2017 Aug-2017 Jul-2017 81-1 650 5,200 $745 $5,960 $1.15 Coll. $45,877 $47,537 $43,298 $46,797 4 2-1 830 3,320 $845 $3,380 $1.02 Braeswood Plaza is a 95% occupied "B-" apartment community in a "B" 6 2-1 939 5,634 $845 $5,070 $0.90 area of southwest Houston. It is located between the City of Bellaire, 22-1 921 1,842 $860 $1,720 $0.93 Westbury and Meyerland areas in Southwest Houston. The property 1 2-2 893 893 $895 $895 $1.00 offers investors an attractive, well-positioned asset in one of Houston's 1 3-1 896 896 $895 $895 $1.00 most densely populated areas with good upside potential. The community spans 1.48 acres and consists of 66 units in four buildings with one additional building for the office. The property has flat and pitched roofs 66 95% 637 42,027 $731 $48,230 $1.15 with a mostly brick exterior and gated access. All units are comfortably TOTAL Est. AVG. TOTAL SQ. AVG. TOTAL RENT AVG. appointed with individual controlled AC/Heat, fully equipped kitchens, tile UNITS Occupancy SQ. FT. FT. RENT/U RENT/SF surround tubs in bathrooms, tile flooring, W/D connection. Unit Mix Stats Braeswood Plaza is located just west of Meyerland where average home 2% prices are $540K+ with an average SF of 2,658. Its location provides 60% 6% 20% 46% excellent access to health care, area schools (all within a mile and a half of 12% the property) and large employment centers such as Houston Baptist By Unit Type By Sq. Ft. 2% University, Memorial Hermann SW Hospital, Greenway Plaza, Houston 2% 3% 3% 2% Chinatown, Texas Medical Center, all of which are within five miles or less 15% 9% 12% 6% of the property. The property's location has ease of access to Loop 610, IH 59 and many major thoroughfares within the neighborhood such as 348 396 468 626 626 Bellaire Blvd, Bissonnet St., Braeswood Blvd., S. Rice Blvd, Chimney Rock EFF 1-1 2-1 2-2 3-1 Rd. and Beechnut St. 650 830 939 921 893

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6 property information

PROPERTY TAX PROPERTY HIGHLIGHTS HCAD# 0950420000001 Taxing EntityRate/$100 of Value 1.) Property is being offered "All Cash" (buyer to acquire new loan) Houston ISD 1.2067 2.) 1970 Built "B‐" Grade, Garden Style Apartment Complex located in a B area City of Houston 0.58421 3.) The property is located less than a mile south of the city limits of Bellaire, a city located Harris County 0.622615 within the city of Houston with higher than Houston's average land and home values Port of Houston 0.01256 4.) Zoned for Bellaire High School Hou Comm College 0.100263 5.) Located within a densely populated area of southwest Houston 6.) Located across from homes in the $500,000+ range 2017 Tax Rate 2.526348 7.) Located within minutes of H‐E‐B, WalMart Supercenter, Target, , Loop 610, Hwy 59, Alt 2017 Assmt. $2,021,000 Hwy 90, Westpark Tollway and Beltway 8 Approx. Total Tax $51,057 8.) Less than 6 miles to major employment areas, such as Greenway Plaza, Galleria Houston, Texas Medical Center, Houston Chinatown, Westchase District, and many neighborhood CONSTRUCTION FEATURES businesses. It is approximately 3 miles to Houston Community College, Houston Baptist University, Memorial Hermann Southwest, Plaza Americas, Rice Village and the City limits of Age: 1970 Bellaire, West University. It is an 8 mile commute to downtown Houston and an 9.5 mile Electric Meter: Individual commute to Houston's Energy Corridor Water: Master - No RUBS is in Place REGIONAL HIGHLIGHTS Gas: Master - No RUBS in Place Braeswood Plaza is located in one of the two most densely populated areas in Houston. Like A/C Type: Individual HVAC any other neighborhood near Loop 610 of Houston it is undergoing gentrification. Hot Water: Gas Fired Boilers Developers are coming in and buying up older properties in the area that were built in the Roof: Pitched & Flat 50's and 60's and demolishing them and rebuilding high‐end homes and retail centers. Paving: Asphaltic Concrete The property's location is less than a mile south of the city limits of Bellaire, an enclave Exterior Construction: Mostly Brick with some Siding community surrounded by the big city of Houston. Bellaire is both inside and outside Loop 610 of Houston. It is an affluent area with average home values upwards of $1,000,000 and No. of Buildings: 5 average land values are $70/SF and higher, depending on the size and location of the lot. # of Stories: Garden Style - 2 Story Buildings Braeswood Plaza, although not located within the city limits of Bellaire, is zoned for Bellaire Units / Acre: 45 High School, the preferred high school in the area due to its academic achievements and its Parking: Open Spaces location within the city limits of Bellaire. High‐rise office buildings are located along Loop 610, but Bellaire is largely known as a prestigious residential city.

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

7 location map

Braeswood Plaza Apartment Community

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

8 location map

Braeswood Plaza Apartment Community

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

9 property aerial

Braeswood Plaza Apartment Community

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

APARTMENT COMMUNITY ACTUAL AND PRO FORMA ANALYSIS

ASKING PRICE INCOME (See Details on the left) ACTUAL Sept. 2017 Annualized STABILIZED PRO FORMA Gross Scheduled Rent is {Current Rent} Annualized + 5% Incr. N/A $607,698 $50,642 / Mo MARKET TO DETERMINE THE PRICE (Loss)/Gain to Lease - Pro Forma Estimated at {1%} of GSR N/A (6,077) 1% Estimated Annual Gross Potential Rental Income N/A 601,621 99% Vacancy Loss - Pro-Forma Estimated at {5%} of GSR N/A ($30,385) 5% INCOME DETAILS Non-Revenue Units - Pro Formas Estimated at {1%} GSR N/A (3,038) 0.50% Current Scheduled Rents (CSR) Other Losses - Pro Forma Estimated at {1%} GSR N/A (3,038) 0.50% $48,230 / Mo $731 / Unit $1.15 / S.F. Total Annual Rental Income 551,060 {95%} of GSR 565,159 {93%} of GSR Actual Income Used September-2017 $47,537 Total Other Income (Pro Forma Implements a Water RUBS) 19,380 $294 / Unit / Yr 42,900 $650 / Unit / Yr Actual Income Used "Annualized" $570,440 Total Gross Annual Income 570,440 $47,537 / Mo 608,059 $50,672 / Mo Leased Occupancy As of 11-26-2017 95% Pro forma Scheduled Rents include a {5.00%} Rent Increase $50,642 / Mo $767 / Unit $1.20 / S.F. EXPENSES (See Details on the Left) ACTUAL Sept. 2017 T-12 PRO FORMA Fixed Expenses PROPERTY TAX DETAILS Property Taxes (See Details on the left) $51,057 $774 Unit $76,551 $1,160 per Unit 2017 Tax Rate Actual 2.526348% Property Insurance {per Owner's Sept. T-12 P & L} - Includes Flood Insurance 27,221 $412 per Unit 27,221 $412 per Unit 2017 Assmt. Actual $2,021,000 Total Fixed Expenses 78,279 $1,186 per Unit 103,772 $1,572 per Unit Pro forma Rate Used 2017 Tax Rate 2.526348% Pro Forma Estimated Post Sale Assmt. $3,030,096 Utility Costs Post Sale Assmt. is the 2017 Assmt increased by {50%} Electric - {Common Area and Vacants} 5,740 $87 per Unit 5,740 $87 per Unit Water & Sewer & Stormwater 29,873 $453 per Unit 29,873 $453 per Unit EXPENSE, INSURANCE AND RESERVE DETAILS Gas 6,738 $102 per Unit 6,738 $102 per Unit Actual Expense Column is September 2017 Trailing 12 Utility Billing Service 0 $ per Unit 0 $ per Unit Months Actual, except where noted. Total Utility Costs 42,351 $642 per Unit 42,351 $642 per Unit Est. Ins. / Unit / Yr Actual $412 Est. Reserve / Unit / Yr Estimated $300 Other Expenses General & Administrative - Includes Telephone 14,295 $217 per Unit 13,200 $200 per Unit PROPERTY DETAILS Other Expenses 0 $ per Unit 0 $ per Unit Number of Units 66 Advertising/Marketing/Residents Activities 1,733 $26 per Unit 1,650 $25 per Unit Avg Unit Size 637 S.F. Repairs/Maintenance 30,093 $456 per Unit 29,700 $450 per Unit Net Rentable Area 42,027 Payroll + Burden + Commissions 90,187 $1,366 per Unit 89,100 $1,350 per Unit Land {Acres} Per HCAD 1.48 Contract Services {Trash, Pest, Grounds} 17,476 $265 per Unit 16,500 $250 per Unit Units per Acre 44.56 Management Fees {Calculated on the Income above} 28,522 5.00% 21,282 3.50% Date Built / Per CO's 1970 Total Other Expenses 182,306 $2,762 per Unit 171,432 $2,597 per Unit e-Meter Individual Reserve for Replacement 19,800 $300 per Unit 19,800 $300 per Unit

RUBS Water, Pest, Trash Total Operating Expenses 322,736 $4,890 per Unit 337,355 $5,111 per Unit Hot Water Supply Gas Fired Boilers Net Operating Income $247,704 $3,753 per Unit $270,704 $4,102 per Unit HVAC Individual HVAC

12 10 year cash flow analysis

HOUSTON INCOME PROPERTIES, INC. Ten Year Cash Flow Analysis Braeswood Plaza UNITS: 66 SQ. FT: 42,027 Year 1 has a {5.00%} AVG UNIT SIZE: 637 rent increase post upgrades, see stabilized pro forma on the previous page INCOME MONTHLY YEAR 1 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Market Rent Growth Rates Used 13.25% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Potential Income $50,642 $607,698 $625,928.94 $644,707 $664,048 $683,969 $704,489 $725,623 $747,392 $769,814 $792,908 Other Income $3,575 $42,900 $44,187 $45,512.61 $46,878 $48,284 $49,733 $51,225 $52,762 $54,344 $55,975

Gross Income $54,217 $650,598 $670,116 $690,219 $710,926 $732,254 $754,221 $776,848 $800,153 $824,158 $848,883 Vacancy / Other Losses ($42,539) ($31,296) ($32,235) ($33,202) ($34,198) ($35,224) ($36,281) ($37,370) ($38,491) ($39,645) Economic Loss % Includes Bad Debt 7.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% EFFECTIVE GROSS INCOME $608,059 $638,819 $657,984 $677,724 $698,055 $718,997 $740,567 $762,784 $785,667 $809,237 Annual Operating Expense Growth Rates Used 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% EXPENSES Operating Expenses ($317,555) ($327,082) ($336,894) ($347,001) ($357,411) ($368,134) ($379,178) ($390,553) ($402,270) ($414,338) Expenses / Unit $4,811 $4,956 $5,104 $5,258 $5,415 $5,578 $5,745 $5,917 $6,095 $6,278 Reserve for Replacement @ {$300} per unit ($19,800) ($19,800) ($19,800) ($19,800) ($19,800) ($19,800) ($19,800) ($19,800) ($19,800) ($19,800) TOTAL EXPENSES ($337,355) ($346,882) ($356,694) ($366,801) ($377,211) ($387,934) ($398,978) ($410,353) ($422,070) ($434,138) Total Expenses / Unit $5,111 $5,256 $5,404 $5,558 $5,715 $5,878 $6,045 $6,217 $6,395 $6,578 NET OPERATING INCOME $270,704 $291,938 $301,290 $310,922 $320,844 $331,063 $341,589 $352,431 $363,598 $375,100

NOI GROWTH RATE 9.3% 7.8% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2%

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

13 value projection at 60 months (5 yrs)

Braeswood Plaza PROPERTY INFORMATION Number of Units: 66 Approx. NRA: 42,027 Year Built: 1970 Average Unit Size: 637 S.F. Roofs: Pitched & Flat Proposed Mthly. Mkt. Rent at 60 Mths (5 YRS): $56,997 $864 / Unit $1.356 / SF HVAC System: Individual HVAC Metering: Electric: Individual Projection is based on the stabilized year 1 pro Water, Trash, Pest RUBS in Place forma with a 3% rent and a 3% expense growth Hot Water: Gas Fired Boilers rate for years 2 thru 5 Est. Occupancy at Stabilization: 95% STABILIZED PRO FORMA REVENUE AND COLLECTIONS Projected at 60 Months Post Purchase and Income Stabilization % of Gross Potential Income Total Gross Rent Potential $683,969.45 100% Vacancy/Other Rental Losses ($34,198) {5%} of Gross Rent Potential Estimated Gross Potential Income $649,771 {95%} of Gross Rent Potential Total Other Income Potential $48,284 $732 / Unit/Yr Total Estimated Gross Annual Income $698,055 $10,577 / Unit/Yr Estimated Potential Value Based on Stabilized NOI of {$320,844} EXPENSES ( at 60 Mths Post Stabilization)

Total Expenses ~ ( average Unit size is {637 S.F.} ) ($377,211) $5,715 / Unit $8.98 / SF Cap Rate Value Generated 5.25% $6,111,315 $92,596/U $145.41/SF Estimated Stabilized Net Operating Income $320,844 5.50% $5,833,528 $88,387/U $138.80/SF ( at 84 Months Post Stabilization ) 5.75% $5,579,897 $84,544/U $132.77/SF

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

Community Benefits Braeswood Plaza Apartments

9 distinct floor plans to choose from. Unit Features (Interior appointments may vary in each design)  Kitchen Pantry  Faux Wood Flooring  Fully Equipped All Electric Kitchen  Ceiling Fans  Private Dining Room  Walk-In Closets  Serve Through Kitchen Bars  Frost-Free Refrigerator  Individual Controlled A/C and Heat  Window Coverings  Black or White Appliances  Shower / Bath Combination  Washer and Dryer Connections  Recently Renovated Interiors  Tile Floors Property Amenities

 Minutes From Interstate 59 and 610 Loop  Zoned for Bellaire High School  On-Site Management  Assigned Parking  Gated Access  Perimeter Fence  Picnic Area with Barbecue  Public Parks Nearby  Mature Landscaping  Clothes Care Center  High Speed Internet Ready  Close to Major Employment  Perimeter Fencing  Minutes from Major Neighborhood Transportation Arteries and Easy Access to Freeways

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16 floor plans

Beds: Studio Beds: Studio Beds: 1 Beds: 1 Beds: 2 Baths: 1 Baths: 1 Baths: 1 Baths: 1 Baths: 1 Sq. Ft: 348 Sq. Ft: 396 Sq. Ft: 626 Sq. Ft: 650 Sq. Ft: 939

Beds: 2 Beds: 2 Beds: 2 Beds: 3 Baths: 1 Baths: 1 Baths: 2 Baths: 2 Sq. Ft: 830 Sq. Ft: 921 Sq. Ft: 921 Sq. Ft: 893

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

17 site plan

HWY 290

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

18 neighborhood aerial

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19 HARRIS COUNTY APPRISAL DISTRICT MAP

Braeswood Plaza Apartment Community

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

20 flood map

Braeswood Plaza Apartment Community

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

APARTMENT MARKET STATISTICS OVERVIEW - SUMMARY HOUSTON Nov-2017 Property / Unit Information ABCD OVERALL Total # Projects 1 13 37 13 64 Total # Units 428 5,358 11,221 1,466 18,473 Total # Units 0BR N/A 0.50% 0.80% 0.00% 1.30% Total # Units 1BR 1.50% 21.70% 37.90% 4.90% 66.00% Total # Units 2BR 1.00% 7.60% 18.60% 2.90% 30.00% Total # Units 3BR N/A 0.40% 1.60% 0.20% 2.20% Total # Units 4BR N/A 0.00% 0.10% N/A 0.10% Avg Units per Project 428 412 303 113 289 Avg SF 931 789 806 852 808 Total # Units Under N/A N/A N/A N/A N/A Total # Units Proposed N/A N/A N/A N/A N/A Occupancy ABCD OVERALL Avg Physical Occupancy 94% 92% 75% 89% 81% Avg Pre-Leased Occupancy 96% 92% 76% 89% 82%

ABCD OVERALL Avg Market Rent/SF 1.244 0.99 0.885 0.735 0.912 Avg Market Rent/SF 0BR N/A 1.309 1.265 0.969 1.277 Avg Market Rent/SF 1BR 1.323 1.017 0.93 0.766 0.955 Avg Market Rent/SF 2BR 1.123 0.931 0.851 0.734 0.869 Avg Market Rent/SF 3BR N/A 0.886 0.822 0.747 0.829 Avg Market Rent/SF 4BR N/A 1.563 0.847 N/A 1.026 Avg Market Rent/Unit 1131.26 767.86 704.84 620.7 726.32 Avg Market Rent/Unit 0BR N/A 620.78 558.75 387.5 580.33 Avg Market Rent/Unit 1BR 992.35 710.92 641.84 563.86 666.52 Avg Market Rent/Unit 2BR 1342.07 945.6 862.26 761.6 888.84 Avg Market Rent/Unit 3BR N/A 1119.34 1043.4 992.93 1054.56 Avg Market Rent/Unit 4BR N/A 2500 1396.17 N/A 1672.13

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23 sub-market statistics

APARTMENT MARKET STATISTICS OVERVIEW - SUMMARY BRAESWOOD Nov-2017 Property / Unit Information ABCD OVERALL Total # Projects 3 30 50 5 88 Total # Units 425 5,841 12,647 1,654 20,567 Total # Units 0BR N/A 0.60% 2.30% 0.00% 3.00% Total # Units 1BR 1.40% 12.70% 30.70% 2.30% 47.10% Total # Units 2BR 0.70% 12.00% 26.80% 4.40% 44.00% Total # Units 3BR N/A 0.40% 3.10% 1.60% 5.10% Total # Units 4BR N/A 0.00% 0.00% N/A 0.00% Avg Units per Project 142 195 253 331 234 Avg SF 938 813 824 898 830 Total # Units Under N/A N/A N/A N/A N/A Total # Units Proposed N/A N/A N/A N/A N/A Occupancy ABCD OVERALL Avg Physical Occupancy 97% 84% 80% 80% 81% Avg Pre-Leased Occupancy 98% 86% 79% 64% 80%

ABCD OVERALL Avg Market Rent/SF 1.451 1.076 0.905 0.822 0.955 Avg Market Rent/SF 0BR N/A 1.301 1.221 0.57 1.229 Avg Market Rent/SF 1BR 1.518 1.074 0.955 0.915 1.002 Avg Market Rent/SF 2BR 1.321 1.068 0.859 0.804 0.918 Avg Market Rent/SF 3BR N/A 0.762 0.81 0.749 0.787 Avg Market Rent/SF 4BR N/A 0.66 0.447 N/A 0.636 Avg Market Rent/Unit 1346.44 814.69 729.73 723.24 764.95 Avg Market Rent/Unit 0BR N/A 621.74 612.6 285 610.15 Avg Market Rent/Unit 1BR 1197.08 737.62 648.8 594.64 686.65 Avg Market Rent/Unit 2BR 1637.88 912.81 822.85 737.3 852.25 Avg Market Rent/Unit 3BR N/A 1002.1 999.59 876.09 960.74 Avg Market Rent/Unit 4BR N/A 915 820 N/A 904.44

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24 Braeswood Plaza comparative rental properties APARTMENT COMMUNITY MARKET RENTS Avg. SF / Avg Rent / Avg Rent / Project Address / Zip Built # Units Leased Unit Unit SF 1 Crossings at St Charles 5505 Pine, Houston, TX 77081 1971 40 660 $730 $1.11 94% 2 Crossings at Berkley 5900 N Braeswood 1970 151 721 $791 $1.10 94% 3 Falls of Maplewood 9600 Glenfield Ct 1977 108 650 $749 $1.15 97% 4 Meyerland Court 9700 Glenfield Court 1977 169 781 $836 $1.07 99% 5 Ashford Buena Vista 6000 Bissonnet 1970 207 958 $863 $0.90 90% 6 Valerie 6226 Valerie 1964 64 734 $752 $1.02 100% Rent Comp Ttls / Average 1972 123 751 $795 $1.06 96%

7 Braeswood Plaza 5430 Birdwood 1970 66 628 $726 $1.16 95%

1 2 3

4 5 5

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25 rent comparatives map

| Multi-Family Brokerage | 713.783.6262 or 512.610.8000 | License #0393404 | hipapt.com

Harris County is the 3rd most populous county in the nation, with more residents than 24 states

Harris County Map

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28 SNAPSHOT OF HARRIS COUNTY

HARRIS COUNTY REGION

Harris County, Texas - is the third largest county in the Sustained Rapid Growth United States by population, ranking behind only Los Harris County’s population rose dramatically between 2000 and 2010. Population for the Houston MSA during this Angeles County (Los Angeles, CA) and Cook County (Chicago, time increased by 1,231,393 persons and Harris County percent of this growth was 56.2. Harris County continues to IL). Its county seat is Houston, Texas, also the fourth largest be the third largest county in terms of population and one of the fastest growing counties with 67% growth since city in the nation. Harris County sits on the Gulf of Mexico in 1990. The chart below shows the percentage of population growth for Harris County, the entire nation and both LA the Houston‐Galveston Area Council region of southeastern and Cook counties, which are the only two counties with more population than Harris County in the US. Over a 26 Texas and it is central to the Houston Metro Area. The year period, Harris County's population has grown more than twice as fast as the nation's population. Harris 2010 Census figures showed that half of the growth in County is on track to pass Cook County and become the second most populous U.S. County within the next five to population was attributed to movement of immigrants to seven years. the area and half to natural increase. • Harris County is part of the Houston, Woodlands‐ Sugarland‐ MSA with a total population of approximately 6.7 million residents. • Harris County ranks first among Texas counties with a current population of approximately 4.7 million residents. • The county's largest employer is the Government (local, state and federal) and public education. Other major employers are concentrated in industries relating to semiconductors, software, engineering and healthcare.

Major Employment Sectors include (in order of share of percentage of employment); Trade, Transportation and Utilities, Professional and Business Services, Educational and Health Services Harris County Housing Trends: As growth occurs residential stock must keep up or housing markets tighten. Since 2010, population growth has eclipsed the production of housing in Harris County. The result is a tighter market, with only 8 percent of all units vacant in 2015. Though the countywide vacancy rate is lower today than at any point in the past 10 years, the completion of several large multi‐family properties and the recent economic slowdown in Houston may increase the share of available housing in the near future, especially for renters at the upper end of the market. A result of slowed housing production is higher prices for all types of housing across the county. This reality complicates Houston’s reputation as an affordable city. In 2007, the median price for a home in Harris County was $121,000. That number dropped to $100,000 in 2012 but has since grown to nearly $141,000 in 2017. While the median home price is lower than in many other metros, the significant jump in price hits especially hard for low‐income buyers and renters.

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29 Houston area map

Greater Houston Area

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30 houston msa facts

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31 houston msa facts

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32 HOUSTON BUSINESS

ADVANCED MANUFACTURING The Houston ‐ The Woodlands ‐ Sugar Land Metropolitan Houston ranked as the No. 1 City for Manufacturing in the U.S. by Forbes in 2014. Across 6,300 manufacturing Statistical Area (Houston MSA) consists of 9 counties: establishments in the region, $80 billion dollars of products are produced annually. Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller. Additional facts about the ADVANCED TECHNOLOGIES Houston region: Houston’s vibrant technology industry centers on traditional strengths in energy, medicine and aerospace. The • The City of Houston is the nation’s fourth most populous region’s innovation flows from NASA, the Texas Medical Center and three tier one universities including Rice city with a population of 2.3 million. University, the University of Houston and Texas A&M University. More than 175,850 high‐tech professionals call •TheHoustonregionranksfifthamongU.S.metropolitan Houston home. statistical areas (MSA) with a population of 6.7 million. • The Houston MSA has a gross domestic product of $525 ENERGY billion, fourth largest in the nation. The Houston MSA is home to more than 4,800 energy‐related establishments and employs nearly a third of the • The Houston Airport System (HAS) serves 198 domestic nation’s jobs in oil and gas extraction. The local energy industry extends from traditional fossil fuels to alternative and international destinations. •ThePortofHoustonisrankedfirstintheU.S.inforeign and renewable energy. tonnage and is the largest Gulf Coast container port and the 2nd in total tonnage. HEADQUARTERS & BUSINESS SERVICES The professional and business services sector thrives in the Houston region and employs nearly 460,000 Houstonians, representing 15.4 percent of all jobs in the region.

LIFE SCIENCES Houston is the birthplace of nanotechnology and is home to the largest medical complex in the world ‐ the Texas Medical Center (TMC). Houston has more than 190 life science and biotechnology companies as well as academic partnerships; 132 cutting edge hospitals and health clinics, and the country’s top research facilities.

TRANSPORTATION & LOGISTICS Houston is a gateway for trade to Mexico, Canada and the enormous expanding markets of Latin America. Houston’s geographic advantages and proximity to major metropolitan centers throughout the U.S. Midwest makes it an ideal venue to set up manufacturing and logistics facilities with fewer supply chain costs.

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33 AREA DEVELOPMENT

Braeswood Plaza is located in the Braeswood area of southwest Houston, just south of the City of Bellaire. Bellaire is a city within the city of Houston and is roughly bounded by Westpark Dr. as the far most northern boundary, Beechnut Street as the far southern boundary New Castle and Ferris Dr. as the eastern boundary and Renwick as the furthest western boundary. Bellaire is both inside and outside Loop 610 of Houston. It is an affluent area with homes upwards of $1,000,000. Monticello, although not located within the city limits of Bellaire, is zoned for Bellaire High School, the preferred high school in the area due to its location within the city limits of Bellaire. Employment- Due to the property's location in the Braeswood area of southwest Houston, one of the densest areas in Harris County, it has an abundance of employment within a short commute. In addition the property is located within minutes Bissonnet St., Bellarie Blvd., Gulfton, Chimney Rock, Beechnut St, and West Park Toll Road as well as the 610 Loop and Hwy 59 (SW Fwy.) (all are major transportation arteries of the area and Houston). Most of the major employment areas of Houston are within a 5 to 45 minute commute of the property such as the Westchase District, Houston Baptist University, Memorial Hermann Southwest Hospital District, Greenway Plaza, Houston Chinatown, NRG Park, Texas Medical Center, Downtown Houston, Energy Corridor, Rice Village, City of Bellaire, and the city of Sugar Land.

Area Development : Bellaire Area Development: H-E-B closed its Bellaire location and plans to demolish it to make way for the San Antonio-based grocer’s first two-story food emporium in the Houston area on the 3.055 acre site. Using the two-story format allows H-E-B to penetrate Houston’s upscale urban submarkets where development sites are scarce and land is expensive. The store is expected to be about 70,000-SF. Bellaire Town Center, a retail/office complex that opened in 1950 in the heart of Bellaire is targeted for redevelopment and expansion. The development covers more than 3 acres. The new development will be a two-story retail center with office, retail and restaurants. In today’s market, the location is one in highest demand, infill markets in Texas.Thesiteis located about two miles due south of the Galleria and is expected fall 2018.Chevron's30.5 acre facility along Loop 610 in Bellaire is on the market. It is expected to attract interest from significant developers from around the nation. Bellaire City Council voted to adopt planning language that could pave the way for more dense development on the site. Westchase District Development: Lockton Place a new eight-story, 186,000-square-foot office building for Lockton Cos., a property and casualty insurer with 300 full-time employees in Houston. Houston-based Neighbors Health, LLC relocated its corporate headquarters in spring 2017, leasing 98,000 SF in Richmond Park Westchase, 10800 Richmond Ave. Transwestern is developing two multi-tenant retail centers on a 3-acre site located on the southwest corner of Westheimer and CityWest Blvd. The eastern building is under construction. It will be 12,000 square feet. Signed tenants include Zoe’s Kitchen and Yogurt Land. The first building opened April 2017. The second building will be 10,600 square feet and construction began in spring 2017. Houston Community College is building the 112,000 square-foot West Houston Institute, adjacent to its existing Westchase District campus location at 2811 Hayes Road. Galleria Uptown Area Development: Simon Property Group is spending $30 million to transform the former Saks Fifth Ave. store in The Houston Galleria into 110,000 sf of new retail and restaurant space, now called Galleria VI. The 180-foot retail corridor connects The Galleria’s Neiman Marcus store to the new Saks Fifth Avenue Houston store. The renovation will cost $30 million, and will feature two floors of luxury retail, including 35 luxury retailers, several of whom are new to Houston. The Boulevard Project is designed to solve the area’s crushing mobility problem. The Boulevard Project consists of designing a grand boulevard while creating a beautifully landscaped pedestrian environment, preserving existing automobile lanes on Post Oak and substantially improving transit service in order to address the continuing growth of Houston. The $200 million project ties the area into Metro’s Park & Ride system basically from I-10 and 290 that will continue on to I-610. The six lanes boulevard will be constructed in three phases and it is estimated to be completed by August 2018.

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34 HOUSTON demographics

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35 neighborhood demographics

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42 information on brokerage relationships

Before working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner’s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtain financing without representing you. A broker is obligated by law to treat you honestly. IF THE BROKER REPRESENTS THE OWNER: The broker becomes the owner’s agent by entering into an agreement with the owner, usually through a written listing agreement, or by agreeing to act as a subagent by accepting an offer of sub agency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner’s agent anything the buyer would not want the owner to know because an owner’s agent must disclose to the owner any material information known to the agent. IF THE BROKER REPRESENTS THE BUYER: The broker becomes the buyer’s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer’s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must disclose to the buyer any material information known to the agent. IF THE BROKER ACTS AS AN INTERMEDIARY: A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written consent of each party to the transaction to act as an intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction: (1) shall treat all parties honestly; (2) may not disclose that the owner will accept a price less than the asking price unless authorized in writing to do so by the owner; (3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer unless authorized in writing to do so by the buyer; and (4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property. With the parties’ consent, a broker acting as an intermediary between the parties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party. If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation , if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding. Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee’s records.

______Buyer, Seller, Landlord or Tenant Date

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43 disclaimer

The information provided in this offering memorandum is either provided to us by the owner of the property or obtained from sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee it. It is the responsibility of the reviewer to verify availability and specific property information. Availability, pricing and terms are subject to change without notice. Owners reserve the right to withdraw their listing, without any notice at any time during the marketing period. Houston Income Properties, Inc. has not determined whether the property complies with deed restrictions or city or other municipality licensing or ordinances. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME, EXPENSE AND PERFORM OR HAVE PERFORMED ANY INSPECTIONS TO VERIFY POSSIBLE CONTAMINATION BY ASBESTOS, LEAD PAINT, MOLD OR ANY OTHER HAZARDOUS SUBSTANCES. While the Owners and Houston Income Properties, Inc. have no reason to believe that the information provided herein or in subsequent information updates delivered to potential purchasers contains any material inaccuracies, neither the Owners nor Houston Income Properties, Inc. nor any of the Owners’ or Houston Income Properties, Inc.'s respective subsidiaries, affiliates, companies, or the officers, directors, employees, agents and representatives of any such entities, etc., make any representations or warranties, expressed or implied, as to the validity, accuracy or completeness of the information provided or to be provided, and nothing herein shall be deemed to constitute a representation, warranty or promise by any such parties as to the future performance of the Property or any other matters set forth herein. We do not guarantee or warrant the accuracy, reliability, completeness, or usefulness of the information in this offering memorandum or on marketing websites, whether ours or other industry sites to which we link, it is the prospective purchasers responsibility to confirm accuracy and completeness. Any use of or reliance upon information from this memorandum or from company websites or a linked site is at the user's risk. The information contained in this offering memorandum does not constitute legal, accounting, or other professional advice. Prospective purchasers are not to construe the contents of this Offering or any prior or subsequent information communications from the Owners or any of their respective officers, employees or agents as legal, tax or other advice. Prior to purchasing, prospective purchasers should consult with their own legal counsel, personal accountants and tax advisors to determine the consequences of an investment in the Property and arrive at an independent evaluation of such investment. No commission or finder’s fee shall be payable to any party by the Owners nor any affiliate or agent thereof in connection with the sale of the Property unless otherwise agreed to by the Owners in writing.

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44 exclusive offering memorandum

For More Information Please Contact:

Jim Hurd - President - Listing Broker Gwyn VonHeeder - Vice President Operations - Agent [email protected] [email protected]

Bishale Patel - Vice President Sales - Broker Mitul Patel - Agent [email protected] [email protected]

Peter Huang - Agent Lucas Fertitta - Agent [email protected] [email protected] HOUSTON OFFICE AUSTIN OFFICE 6363 Woodway 912 S. CAPITAL OF TEXAS HWY Suite 370 Suite 360 Houston, TX 77057 Austin, TX 78746 T - 713-783-6262 T - 512-610-8000 F - 713-783-6767 F - 512-640-8001

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