CATO Apartments CA License No

Investment Opportunity | Offering Memorandum

Aaron Fierstein Bridget Behmke Sr. Vice President Vice President CATO Apartments CA License No. 01271183 CA License No. 02019943 Direct: +1 310 622 1911 Direct: +1 310 622 1912 Mobile: +1 310 978 7707 Mobile: +1 305 509 3376 1520 West Carson Street, Torrance, CA 90501 [email protected] [email protected]

Accelerating success. Table of Contents

Investment 03 Summary

Property 06 Information

Market 17 Overview

Rent & Sales 24 Comparables

Financial 36 Overview Investment Summary

Offering Memorandum CATO Apartments Investment Overview

We are proud to present for sale a Torrance multi-family investment opportunity at its finest. This meticulously well maintained, one- of-a-kind property known as The CATO Apartments consist of 70 luxury apartment units, laundry facilities, a large swimming pool, and a beautifully landscaped courtyard. Great attention to detail can be seen throughout the exterior and interior of the property with its modern and contemporary style. The property is secured and gated offering tenants ample parking and storage units along an attractively tiled driveway.

A diversified unit mix of approximately 14% studios, 56% one-bedrooms, and 30% two-bedroom units offer tenants many options at different price points within their budget. With approximately 30% in rental upside, this turn-key property will offer investors a healthy and profitable cash flow. The CATO Apartments are conveniently located at 1520 West Carson Street in the Torrance post office district of the City of Los Angeles/Harbor Gateway. Just blocks away from the subject property are major Japanese corporations and shopping centers catering to the local and international residents of the area. Mitsuwa Marketplace, a highly popular Japanese grocery chain, among many other Japanese retail establishments and restaurants can all be found within blocks of The CATO Apartments.

Cato (or using the alternate spelling Kato) in the Japanese language means to “add/increase” and is the 11th most common Japanese surname. In this thriving South Bay real estate market with tremendous access to major employers, retailers, Downtown L.A., the Los Angeles Airport (LAX), and South Bay’s coastal communities, a new owner will have the opportunity to “add/increase” value to this highly desirable and rarely seen investment offering of 70 spectacular apartment units in Torrance, California.

CATO Apartments Offering Memorandum | 4 Investment Highlights:

• 16 private and enclosed patios Investment Overview • 70 tuck-under parking spaces with secured storage units • Modern and luxurious curb appeal with a beautifully Investment Benefits manicured interior, lush courtyard, and sparkling pool • Provides a healthy cash flow on current rents with 100% rent • On-site storage units and privately-owned laundry collections machines provide opportunity for additional income • Approximately 30% upside potential offering a great value-add • Pride of ownership, professionally managed 70-unit component trophy property • Excellent Torrance P.O./Harbor Gateway location (City of L.A.) • Property has recently been earthquake retrofitted as allowing annual rent increases at 4% per year evidenced by a “Certificate of Completion” • Historically low interest rates are available in the 2% - 3% range • Approximately 95% of the property has been re-piped • Most units have been upgraded & remodeled with great attention with copper plumbing to detail • Recently re-roofed and completed in accordance with • Desirable unit mix of 10 studios, 39 one-bedrooms, and 21 two- Title 24 Energy Efficiency Laws bedrooms • Two central water heaters and individually metered • Stable occupancy due to many tenants employed at UCLA Harbor utilities Medical Center as well as several Japanese corporations located • All newly installed windows blocks away • Properties of this size and scale (70 units) rarely become available for sale in the South Bay and this is its first time on the market in almost 20 years

CATO Apartments Offering Memorandum | 5 Property Information

Offering Memorandum CATO Apartments Property Profile

The CATO Apartments consist of 70 luxury apartment units, laundry facilities, a large swimming pool, and a beautifully landscaped courtyard. A diversified unit mix of approximately 14% studios, 56% one-bedrooms, and 30% two-bedroom units offer tenants many options at different price points within their budget.

Property Name CATO Apartments

1520 West Carson Street Property Address Torrance, CA 90501

Number of Units 70

Year Built 1966

Lot Size 45,287 SF

Gross SF 39,292 SF

Studio + 1 Bath 1 Bed + 1 Bath Unit Types 2 Bed + 1 Bath 2 Bed + 2 Bath

CATO Apartments Offering Memorandum | 7 Amenities

Apartment amenities include: • Conveniently nearby the I-405, the I-110, and centrally located within the affluent communities of the South Bay • Major international firms and employers are located just blocks away such as Nissan, Honda, Torrance Memorial Hospital, Harbor-UCLA Medical Center, Allied Signal and Honeywell • Close proximity to retail centers such as The Del Amo Fashion Center and South Bay Pavilion • Wilson Park as well as other sports and recreation areas are located 1.5 miles to the west • California’s famous sandy beaches of Redondo Beach and Hermosa Beach are located approximately 6 miles west • Units benefit from an abundance of natural light in addition to all newly installed windows • Renovated units equipped with new appliances, granite countertops, and recessed light fixtures • Select units featuring private and enclosed patios, dishwashers, and eat-in counter bars • Contemporary cabinetry, wood-like or designer tile floors, and ample in-unit storage space • Assigned tuck-under parking spaces and secured storage units available

Common area amenities include: • Sleek and modern designed architecture with attractive curb appeal • Secured and gated parking designed with a tiled driveway • LED exterior lighting with time sensors • Serene courtyard, private pool, and laundry room with multiple washers and dryers • 24-hour on-site video and audio surveillance cameras • Red-oxide treated, sanded, and painted second-story hand railings • Two central water heaters and individually metered utilities

• Access to skilled labor pools for all industries • Full-service city with a Class 1 Fire Department rating for lowered insurance rates. Dedicated police force that keeps Torrance ranked by the FBI as one of the nation’s safest cities • Easy access to 110 and 405 freeways and to 1.5 miles of lifeguard-patrolled Torrance Beach; 20 miles from Downtown L.A. • Discover Torrance TBID with 15 participating hotels • South Bay Entrepreneurial Center and Startup Business Incubator Regional Transit Center (in development) and general aviation airport Zamperini Field • Del Amo Fashion Center, one of the nation’s largest malls • Beautiful public spaces and more than 30 pristine city parks • Consistently ranks among the best in the country for: best place to raise children; safest cities; top places to live; top schools

Major Roads 405 and 110 Freeways 5 min / 1 mile

Airports Los Angeles International Airport 20 min / 10 miles

City Centers Torrance, Del Amo Fashion Center 10 min / 2 miles

CATO Apartments Offering Memorandum | 13 California State SouthBay Carson University Pavilion Harbor-UCLA Medical Center Planet Smart & Fitness Final 405

110

CATO Apartments

Carson St (Eastbound)

CATO Apartments Offering Memorandum | 14 Torrance Del Amo Redondo Torrance Zamperini Field Charles Wilson Park Beach Fashion Center Beach

Miyako Hybrid Bowlero

Ralph’s

ARCO

Carson St (Westbound)

CATO Apartments

CATO Apartments Offering Memorandum | 15 PropertyArea Map Map

CATO Apartments

CATO Apartments Offering Memorandum | 16

This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, 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. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and /or its licensor(s). © 2021. All rights reserved. Data source: ESRI, HERE, Garmin, FAO, NOAA, USGS, © OpenStreetMap. Logo data copyright © 2021 ChainXY Solutions Inc. All rights reserved. Map id: B_58899 1 inch represents 0.62 miles Market Overview

Offering Memorandum CATO Apartments 1-Mile Radius Overview

Household & Population Characteristics Households & Population Education

$69,400 36.1 37,557 33% Median HH Income Median Age Current Total Pop. College Graduate

38,028 27% 5 Year Total Pop. Some College $619,567 49.7% Median Home Value Female Population 11,483 23% Current Total HH High School Graduate

42.4% 46.9% 11,573 17% Owner Occupied % Married (Age: 15+) 5 Year Total HH No High School Diploma Housing Units

Annual Household Spending

$2,052 $174 $3,767 $5,187 $5,069 Apparel & Computers & Eating Out Groceries Health Care Services Hardware

CATO Apartments Offering Memorandum | 18 1-Mile Radius Overview

Business Race & Ethnicity

1,669 21,183 Total Businesses Total Employees White

Black

American Indian Employment Asian

59% 21% Pacific Islander White Collar Blue Collar Other

Two or More Races 20% 10.3% Services Unemployment Rate

Annual Lifestyle Spending

$2,414 $82 $93 $60 $6 Theaters, Operas, Movies, Travel Sports Events Online Games Concerts Museums, Parks

CATO Apartments Offering Memorandum | 19 Major Employers

CATO Apartments Offering Memorandum | 20 Torrance Major Projects

Mitsuwa Marketplace Amazon In February 2020, the conversion of the former Marshall’s at the In June 2020, the Planning Commission approved the conversion of Del Amo Fashion Center to a Mitsuwa Marketplace was completed. the former Costco site to an Amazon warehouse and distribution The new grocery store features an upgraded storefront with vertical center. The project involves modifications of the building to provide aluminum fins, prominent signage, and a new outdoor patio. loading areas, office and warehouse area, and an Amazon Hub Mitsuwa Marketplace is home to many Japanese goods including center for customer pickup or returns. The converted building food vendors, cosmetics, fresh meat and produce, popular Japanese measures approximately 130,000 square feet and will positively packaged goods, and more. Founded in 1998, Mitsuwa Marketplace contribute to the economic growth of the City while providing an is the largest Japanese grocery store chain in the United States. The essential service to residents and the business community. The site California-based Mitsuwa Corporation runs 11 stores across the is nearing completion and is expected to begin operations in 2021. states and employs more than 700 people nationwide, with more than 100 at the Torrance store.

Source: City of Torrance CATO Apartments Offering Memorandum | 21 Torrance Major Projects

Torrance Technology Center Downtown Torrance Revitalization In 2017, Sares Regis Group (SRG) announced acquisition of the The City of Torrance is seeking to create a revitalization vision and former Toyota Campus. SRG has extensive experience with strategy for the City’s historic downtown and surrounding corridors commercial infill developments throughout Southern California to update the 1979 Downtown Redevelopment Plan. This includes including redevelopment of the former McDonnell Douglas/Boeing a review of the market feasibility for uses and new development site, known as Douglas Park, north of the Long Beach Airport. to help define and target businesses or development that could be SRG envisions redevelopment of the former Toyota Campus to be compatible and practical for the area. A detailed vision concept for similar to Douglas Park. In 2019, SRG began redevelopment of the downtown will be created by utilizing this base of information to former Toyota Campus South Campus with Phase I of the Torrance potentially provide streetscape improvements, building prototypes, Technology Center in constructing three new light industrial and recommendations for improved and updated design buildings, totaling 410,000 square feet, at the southeast corner of requirements. In December 2020, the City Council held a workshop 195th Street and Van Ness Avenue. Completed in early 2020, these to review the progress of the Downtown Revitalization Plan. buildings are corporate offices to WASH and Alpine Electronics.

To review this progress, visit www.torranceca.gov/ourcity/ community-development/downtown-revitalization-plan.

Source: City of Torrance CATO Apartments Offering Memorandum | 22 Torrance Major Projects

Palos Verdes Bowl Redevelopment Oakmont Senior Living Standard Communities In May 2019, the Planning Commission In July 2017, the Planning Commission Standard Communities partnered with the approved a new commercial center at the approved development of a two-story, city of Carson and the California Statewide former Palos Verdes Bowl site, located 84-unit assisted senior living and memory Communities Development Authority to at northeast corner of Crenshaw Blvd care facility with a basement parking level. acquire the 357-unit Union South Bay and Amsler St. The project redevelops Completed in 2020, the project provides a apartment complex at 615 E. Carson St. the site including the demolition of total of 93 beds. Developed by Oakmont from developer The Wolff Company of existing structures and parking lot, Senior Living, Oakmont of Torrance provides Scottsdale, Arizona. The mixed-use property and the installation of new utilities and comfort and care with multiple services was built last year and also includes more infrastructure. The new commercial center and amenities. Residents enjoy a rewarding than 28,000 square feet of retail space, consists of an approximately 19,000 square- lifestyle with individualized comprehensive with a fitness center, rooftop deck, indoor/ foot Aldi grocery store, 3,700 square -foot support that promotes continuing outdoor bar and dog-washing station. Chick-fil-A with a drive-through and 3,200 independence. Source: CoStar square-foot Kinecta credit union.

Source: City of Torrance CATO Apartments Offering Memorandum | 23 Rent & Sales Comparables

Offering Memorandum CATO Apartments Rent Comparables

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CATO Apartments Willow Tree 21107 Amie Avenue 1520 West Carson Street, Torrance CA 90501 4445 Pacific Coast Highway, Torrance CA 90505 21107 Amie Avenue, Torrance CA 90503 Year Built: 1966 Year Built: 1970 # of Units: 435 Units Year Built: 1961 # of Units: 44 Units Unit Type SF Rent Rent PSF Unit Type SF Rent Rent PSF Unit Type SF Rent Rent PSF Studio 335 $1,115 - $1,375 $3.88 Studio 453 $1,540 - $1,595 $3.46 Studio $1,475 - $1,595 1 Bed + 1 Bath 595 $874 - $1,675 $2.28 1 Bed + 1 Bath 764 $1,845 - $1,965 $2.49 1 Bed + 1 Bath $1,720 - $1,845 2 Bed + 1 Bath 795 $1,032 - $1,875 $2.00 2 Bed + 1 Bath 1019 $2,225 - $2,295 $2.22 2 Bed + 1 Bath $1,980 - $2,295 MGR Unit 2 + 2 850 $1,250 $1.47

CATO Apartments Offering Memorandum | 25 Rent Comparables

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El Mirasol Gateway Court Kona Kai West 23905 Los Codona Ave, Torrance CA 90505 1306 West Carson Street, Torrance CA 90501 22405 Kent Avenue, Torrance CA 90505 Year Built: 1969 # of Units: 47 Units Year Built: 1989 # of Units: 77 Units Year Built: 1961 # of Units: 64 Units Unit Type SF Rent Rent PSF Unit Type SF Rent Rent PSF Unit Type SF Rent Rent PSF Studio N/A $1,425-1,425 N/A Studio 450 $1,375-$1,425 $3.11 Studio 300 $1,375-$1,425 $4.66 2 Bed + 2 Bath 960-975 $2,095 $2.23

CATO Apartments Offering Memorandum | 26 Rent Comparables

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Mosaic at Western Kona Kai Apartments 2403 West 227th Street 21240 S. Western Avenue, Torrance CA 90505 22403 Ocean Avenue, Torrance CA 90505 2403 West 227th Street, Torrance CA 90501 Year Built: 1979 # of Units: 28 Units Year Built: 1961 # of Units: 89 Units Year Built: 1972 # of Units: 18 Units Unit Type SF Rent Rent PSF Unit Type SF Rent Rent PSF Unit Type SF Rent Rent PSF 1 Bed + 1 Bath 575 $1,797 $3.13 1 Bed + 1 Bath 600-650 $1,775-$1,825 $2.88 1 Bed + 1 Bath 600 $1,750 $2.92

CATO Apartments Offering Memorandum | 27 Rent Comparables

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842 Sartori Avenue Palm Terrace Chateau Garden Apartments 842 Sartori Avenue, Torrance CA 90501 22618 Figueroa Street, Carson CA 90745 23805 Arlington Avenue, Torrance, CA 90501 Year Built: 1979 # of Units: 4 Units Year Built: 1964 # of Units: 28 Units Year Built: 1964 # of Units: 36 Units Unit Type SF Rent Rent PSF Unit Type SF Rent Rent PSF Unit Type SF Rent Rent PSF 2 Bed + 1 Bath 825 $2,250 $3.09 2 Bed + 1 Bath 780 $1,995 $2.56 2 Bed + 1 Bath 800 $1,995 $2.49

CATO Apartments Offering Memorandum | 28 RentProperty ComparablesMap - rent Map

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This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, 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. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liabilityCATO for loss Apartments and damages arising there Offering from. This publication Memorandum is | 29 the copyrighted property of Colliers International and /or its licensor(s). © 2021. All rights reserved. Data source: ESRI, HERE, Garmin, FAO, NOAA, USGS, © OpenStreetMap. Logo data copyright © 2021 ChainXY Solutions Inc. All rights reserved. Map id: B_58899 1 inch represents 0.54 miles Sales Comparables

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CATO Apartments 21107 – 21023 Amie Avenue Emerald Towers 1520 West Carson Street, Torrance CA 90501 21107 – 21023 Amie Avenue, Torrance CA 90503 4006 Emerald Street, Torrance CA 90503 Units Unit Mix Units Unit Mix Units Unit Mix Sold Date: -- 10 Studio Sold Date: 3/31/2021 12 Studio Sold Date: 3/31/2021 26 1 Bed+1 Bath Asking Price: $22,000,000 39 1 Bed+1 Bath Sold Price: $18,340,000 37 1 Bed+1 Bath Sold Price: $8,875,000 4 2 Bed+1 Bath Price/Unit: $314,286 20 2 Bed+1 Bath Price/Unit: $300,656 10 2 Bed+1 Bath Price/Unit: $306,034 Price/SF: $559.91 1 Manager’s Unit Price/SF: $420.88 2 2 Bed+2 Bath Price/SF: $410.58 2 Bed+2 Bath # of Units: 70 # of Units: 61 # of Units: 29+1 Year Built: 1966 Year Built: 1961; 1963 Year Built: 1972 Cap Rate: 3.03% Cap Rate: N/A Cap Rate: N/A GRM: 18.50 GRM: N/A GRM: N/A Avg. Unit Size: 561 SF* Avg. Unit Size: 714 SF* Avg. Unit Size: 721 SF* Notes: Notes: Notes: • Gross Square Footage: 39,292 SF • Combined Gross Square Footage: 43,575 SF • Gross Square Footage: 21,616 SF • 14% Studios • 20% Studios • Price/Unit Using 30 Units: $295,833 • 56% One Bedrooms • 60% One Bedrooms • 87% One Bedrooms • 30% Two Bedrooms • 20% Two Bedrooms • 13% Two Bedrooms

*Average unit size metric based on total bldg. SF divided by number of units CATO Apartments Offering Memorandum | 30 Sales Comparables

3 4

CATO Apartments Copa De Oro Aztec House Apartments 1520 West Carson Street, Torrance CA 90501 3829 West 226th Street, Torrance CA 90505 3636 West 227th Place, Torrance CA 90505 Units Unit Mix Units Unit Mix Units Unit Mix Sold Date: -- 10 Studio Sold Date: 12/31/2020 1 Studio Sold Date: 02/19/2020 5 Studio Asking Price: $22,000,000 39 1 Bed+1 Bath Asking Price: $19,000,000 42 1 Bed+1 Bath Sold Price: $7,800,000 14 1 Bed+1 Bath Price/Unit: $314,286 20 2 Bed+1 Bath Price/Unit: $327,586 15 2 Bed+1 Bath Price/Unit: $300,000 6 2 Bed+1 Bath Price/SF: $559.91 1 Manager’s Unit Price/SF: $386.40 Price/SF: $455.02 1 3 Bed+2 Bath 2 Bed+2 Bath # of Units: 70 # of Units: 58 # of Units: 26 Year Built: 1966 Year Built: 1965 Year Built: 1962 Cap Rate: 3.03% Cap Rate: 3.64% Cap Rate: 3.21% GRM: 18.50 GRM: 15.90 GRM: 18.00 Avg. Unit Size: 561 SF* Avg. Unit Size: 848 SF* Avg. Unit Size: 659 SF* Notes: Notes: Notes: • Gross Square Footage: 39,292 SF • Gross Square Footage: 49,172 SF • Gross Square Footage: 17,142 SF • 14% Studios • 2% Studios • 20% Studios • 56% One Bedrooms • 72% One Bedrooms • 54% One Bedrooms • 30% Two Bedrooms • 26% Two Bedrooms • 23% Two Bedrooms • 3% Three Bedrooms

*Average unit size metric based on total bldg. SF divided by number of units CATO Apartments Offering Memorandum | 31 Sales Comparables

Property Map - sales

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Park Emerald 23610 Arlington Avenue Comp Averages 3450 Emerald Street, Torrance CA 90503 23610 Arlington Avenue, Torrance CA 90501 Units Unit Mix Units Unit Mix Units Unit Mix Sold Date: 12/03/2019 30 1 Bed+1 Bath Sold Date: 10/04/2019 20 1 Bed+1 Bath Price/Unit: $314,108 7% Studio Sold Price: $17,545,000 15 2 Bed+1 Bath Asking Price: $7,600,000 6 2 Bed+1 Bath Price/SF: $408.73 68.5% 1 Bed Price/Unit: $358,061 4 3 Bed+2 Bath Price/Unit: $292,308 Year Built: 1966 22.6% 2 Bed Price/SF: $411.74 Price/SF: $367.75 Cap Rate: 3.19% 1.9% 3 Bed # of Units: 49 # of Units: 26 GRM: 17.26 Year Built: 1963 Year Built: 1969 Avg. Unit Size: 768 SF* Cap Rate: 2.71% Cap Rate: N/A GRM: 17.87 GRM: N/A Avg. Unit Size: 870 SF* Avg. Unit Size: 795 SF* Notes: Notes: Notes: • Gross Square Footage: 42,612 SF • Gross Square Footage: 20,666 SF • 7% Studios • 61.2% 1 Bedrooms • 77% One Bedrooms • 68.5% 1 Bedrooms • 30.6% 2 Bedrooms • 23% Two Bedrooms • 22.6% 2 Bedrooms • 8.2% 3 Bedrooms • 1.9% 3 Bedrooms

*Average unit size metric based on total bldg. SF divided by number of units CATO Apartments Offering Memorandum | 32 SalesProperty MapComparables - sales Map

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Average Cap Rate Average GRM

20.0 Average: 17.26 4.0 18.0

3.5 16.0 Average: 3.19% 14.0 3.0 12.0 2.5 10.0 3.03% 3.64% 3.21% 2.71% 18.50 15.90 18.00 17.87 2.0 8.0 1.5 6.0 1.0 4.0

0.5 2.0

0.0 0.0

CATO Copa De Aztec Park CATO Copa De Aztec Park Apartments Oro House Emerald Apartments Oro House Emerald

CATO Apartments Offering Memorandum | 34 Sales Comparables

Average Price per Square Foot

$600 $500 $450 Average: $408.73 $400 $350 $300 $250 $200 $150 $559.91 $420.88 $410.58 $386.40 $455.02 $411.74 $367.75 $100 $50 $0 CATO 21107-21023 Emerald Towers Copa De Oro Aztec House Park Emerald 23610 Arlington Apartments Amie Avenue Apartments Avenue

Average Price per Unit

$500,000 $450,000 $400,000 $350,000 Average: $314,108 $300,000 $250,000 $200,000 $150,000 $314,286 $300,656 $306,034 $327,586 $300,000 $358,061 $292,308 $100,000 $50,000 $0 CATO 21107-21023 Emerald Towers Copa De Oro Aztec House Park Emerald 23610 Arlington Apartments Amie Avenue Apartments Avenue

CATO Apartments Offering Memorandum | 35 Financial Overview

Offering Memorandum CATO Apartments Pricing & Financial Summary

Property CATO Apartments Property Address 1520 West Carson Street Torrance, CA 90501 APN 7346-002-041 Price $22,000,000 Down Payment 55% $12,109,000 Number of Units 70 Price/Unit $314,286 Gross Square Feet 39,292 Price/SF $559.91 CAP Rate - Current 3.03% CAP Rate - Pro Forma 4.58% GRM - Current 18.50 GRM - Pro Forma 14.23 Cash-on-Cash Return 3.2% Year Built 1966 Lot Size SF 45,287 Type of Ownership Fee Simple

Financing

FIRST TRUST DEED Loan Amount $9,891,000 Loan Type Proposed New Interest Rate 2.83% I.O. Amortization 30 Years Loan information is time sensitive and subject to change. Contact Aaron Fierstein or Bridget Behmke for updated information or questions about your analysis.

CATO Apartments Offering Memorandum | 37 Financing Options

Investor Fannie Mae Fannie Mae Fannie Mae Fannie Mae Freddie CME Freddie CME

Rate Type Fixed Fixed Fixed Fixed Fixed Fixed

Loan Amount $9,423,000 $9,574,000 $9,007,000 $9,154,000 $9,614,000 $9,891,000

Index 1.25% 1.01% 1.25% 1.01% 1.20% 0.98%

Spread 1.96% 2.07% 1.71% 1.82% 1.85% 1.85%

Note Rate 3.21% 3.08% 2.96% 2.83% 3.05% 2.83%

Standard Standard Prepayment YM YM YM YM Defeasance Defeasance

Term (years) 10 7 10 7 10 7

IO (years) 2 0 5 3 5 2

Amortization (years) 30 30 30 30 30 30

Min DSCR: 1.25x 1.25x 1.35x 1.35x 1.25x 1.25x

Max LTV: 80% 80% 65% 65% 70% 70%

Estimated NOI: 612,020 612,020 612,020 612,020 612,020 612,020

CATO Apartments Offering Memorandum | 38 Annualized Operating Data

Income Expenses

Current Proforma Current Proforma Gross Potential Rent $1,189,224 $1,546,200 Real Estate Taxes (1.200129%) $264,028 $264,028 Other Income $6,577 $12,600 Direct Assessment Taxes $13,101 $13,101 Gross Potential Income $1,195,801 $1,558,800 Insurance $13,752 $13,752 Less: Vacancy/Deductions (GPR) 3.0% $35,677 3.0% $46,386 Utilities (Water/Sewer) $29,285 $29,285 Effective Gross Income $1,160,124 $1,512,414 Utilities (Trash) $20,760 $20,760 Less: Expenses $493,452 $504,021 Utilities (Electricity) $10,301 $10,301 Net Operating Income $666,672 $1,008,393 Utilities (Gas) $10,423 $10,423 Debt Service $279,915 $279,915 Repairs, Maintenance & Supplies $24,896 $24,896 Net Cash Flow After Debt Service 3.2% $386,757 6.0% $728,478 Payroll $49,346 $49,346 Management Fee $34,804 $45,372

Scheduled Income Landscape $4,480 $4,480 Pool $3,919 $3,919 # of Units 70 Cable/Telephone $5,898 $5,898 Studio; 1 Bed+1 Bath; Unit Types Advertising $7,200 $7,200 2 Bed+1 Bath; 2 Bed+2 Bath Business License/Permit $1,259 $1,259 Current Rents $874 - $1,875 Total Expenses $493,452 $504,021 Monthly Income $99,102 Expenses/unit $7,049.32 $7,200.30 Proforma Rents $1,475 - $2,195 Expenses/SF $12.56 $12.83

Proforma Monthly Income $128,850 % of EGI 42.53% 33.33%

CATO Apartments Offering Memorandum | 39 Rent Roll

CATO Apartments Rent Roll CATO Apartments Rent Roll

Unit Unit Type Market Rent Actual Rent Lease Expiration Unit Unit Type Market Rent Actual Rent Lease Expiration 89 2+2 MGR $2,195.00 $1,250.00 1/31/2011 125 1+1 $1,795.00 $1,296.00 1/5/2016 102 1+1 $1,795.00 $1,430.00 3/4/2017 126 1+1 $1,795.00 $914.00 5/31/2000 103 1+1 $1,795.00 $1,218.00 1/17/2015 201 2+1 $2,095.00 $1,133.00 8/23/2013 104 1+1 $1,795.00 $1,087.00 1/1/2011 202 2+1 $2,095.00 $1,875.00 9/3/2021 105 1+1 $1,795.00 $1,603.61 7/31/2020 203 2+1 $2,095.00 $1,434.00 10/9/2014 106 1+1 $1,795.00 $1,575.00 11/15/2021 204 2+1 $2,095.00 $1,800.00 6/30/2019 107 1+1 $1,795.00 $1,603.61 7/24/2019 205 2+1 $2,095.00 $1,800.00 3/31/2022 108 1+1 $1,795.00 $1,525.00 6/15/2020 206 Studio $1,475.00 $1,115.00 1/9/2016 109 1+1 $1,795.00 $902.00 5/1/1998 207 2+1 $2,095.00 $1,850.00 11/30/2020 110 1+1 $1,795.00 $936.00 4/17/1994 208 2+1 $2,095.00 $1,348.00 12/31/2012 111 Studio $1,475.00 $1,375.00 7/25/2021 209 2+1 $2,095.00 $1,875.00 VACANT 112 1+1 $1,795.00 $1,353.00 9/22/2016 210 2+1 $2,095.00 $1,800.00 6/21/2019 113 1+1 $1,795.00 $1,550.00 7/31/2021 211 2+1 $2,095.00 $1,875.00 2/16/2022 114 1+1 $1,795.00 $1,600.00 3/31/2022 212 1+1 $1,795.00 $1,085.00 7/31/2005 115 1+1 $1,795.00 $1,528.61 6/17/2020 213 Studio $1,475.00 $1,275.00 7/1/2019 116 Studio $1,475.00 $1,248.00 3/15/2018 214 1+1 $1,795.00 $1,625.00 3/5/2021 117 1+1 $1,795.00 $1,350.00 4/30/2021 215 1+1 $1,795.00 $1,045.00 7/31/2005 118 1+1 $1,795.00 $942.00 4/1/1992 216 1+1 $1,795.00 $1,048.00 8/31/2005 119 1+1 $1,795.00 $1,675.00 5/10/2021 217 1+1 $1,795.00 $1,600.00 9/13/2020 120 1+1 $1,795.00 $1,100.00 8/31/2005 218 1+1 $1,795.00 $1,675.00 VACANT 121 1+1 $1,795.00 $1,550.00 8/14/2017 219 1+1 $1,795.00 $1,675.00 6/20/2021 122 1+1 $1,795.00 $942.00 12/31/1994 220 1+1 $1,795.00 $1,650.00 1/15/2022 123 Studio $1,475.00 $1,326.00 11/24/2017 221 1+1 $1,795.00 $1,550.00 2/1/2020 124 Studio $1,475.00 $1,375.00 5/31/2021 222 1+1 $1,795.00 $1,525.00 5/21/2021

CATO Apartments Offering Memorandum | 40 Rent Roll

CATO Apartments Rent Roll

Unit Unit Type Market Rent Actual Rent Lease Expiration 223 1+1 $1,795.00 $1,500.00 3/2/2019 224 1+1 $1,795.00 $1,500.00 5/6/2018 225 1+1 $1,795.00 $1,054.00 3/2/2012 226 1+1 $1,795.00 $1,055.00 12/15/2011 227 1+1 $1,795.00 $1,575.00 2/14/2022 228 1+1 $1,795.00 $1,675.00 VACANT 229 Studio $1,475.00 $1,275.00 8/10/2019 230 Studio $1,475.00 $1,375.00 1/3/2022 231 1+1 $1,795.00 $874.00 5/31/1998 232 Studio $1,475.00 $1,275.00 6/3/2018 233 1+1 $1,795.00 $1,575.00 8/14/2021 234 2+1 $2,095.00 $1,400.00 6/30/2017 235 2+1 $2,095.00 $1,032.00 12/31/2002 236 2+1 $2,095.00 $1,850.00 5/11/2021 237 2+1 $2,095.00 $1,364.00 4/30/2015 238 2+1 $2,095.00 $1,326.00 12/31/2012 239 Studio $1,475.00 $1,375.00 10/25/2019 240 2+1 $2,095.00 $1,700.00 7/31/2017 241 2+1 $2,095.00 $1,800.00 11/12/2020 242 2+1 $2,095.00 $1,473.00 3/10/2016 243 2+1 $2,095.00 $1,260.00 12/31/2005 244 2+1 $2,095.00 $1,875.00 11/20/2021 Total $128,850.00 $99,102.00

CATO Apartments Offering Memorandum | 41 CATO Apartments Offering Memorandum | 42 Investment Opportunity | Offering Memorandum CATO Apartments 1520 West Carson Street Torrance, CA 90501

Aaron Fierstein Bridget Behmke Sr. Vice President Vice President CA License No. 01271183 CA License No. 02019943 Direct: +1 310 622 1911 Direct: +1 310 622 1912 Mobile: +1 310 978 7707 Mobile: +1 305 509 3376 [email protected] [email protected]

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