Class B, Infill Opportunity in Top School District

Lavera at Lake Highlands

Dallas CBD High Point Crossing Development 135,000 Employees - 180,000 SF Shopping Center 2,500 Businesses - Opening Fall 2018 3 Fortune 500 Companies University Park - 50,000 daily commuters and Preston Center 150,000 residents within three miles Timbercreek Crossing Merriman Park-University Manor White Rock Lake Dart Blue Line Med. List Price $439K

Flag Pole Hill Opening February 2018 Kingsley Square

White Rock Valley Lake Highlands Town Center Skillman Street Med. List Price $607K

Audelia Road Lake Highlands DART Station White Rock Place Med. List Price $1MM Lake Highlands Med. List Price $553K Lake Highlands Lake Ridge Estates North North Park Med. List Price $471K

Lakeridge Shopping Center Lake Highlands High School

Walnut Hill Lane North Lake Elementary School

North Lake Highlands Estates Med. List Price $436K Lake Highland Jr. High School 1 Block Church Road

Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a Texas licensed real estate broker (“HFF”)

OFFERING SUMMARY

Paxton at Lake Highlands PORTFOLIO DESCRIPTION Lavera Paxton Total / Averages at Lake Highlands at Lake Highlands Year Built/Renovated 1970/2015 1969/2015 Address 9842 Audelia Road 9763 Audelia Rd INVESTMENT OVERVIEW Location Dallas, TX Dallas, TX Holliday Fenoglio Fowler, L.P. acting by and through Buildings 45 5 Holliday GP Corp. a Texas licensed real estate broker Stories 1, 2 and 3 2 (“HFF”) has been exclusively retained to offer an Occupancy (1/03) 91.8% 90.4% 91.4% opportunity for qualified investors to purchase the fee simple interest in the 394-unit Lake Highlands Value- Classic Units 78 28% 19 17% 97 25% Add Portfolio (the “Portfolio” or the “Properties”) located Full Upgrade Units 125 44% 47 41% 172 44% in Dallas, Texas. Granite Units 77 28% 48 42% 125 32% Both properties offer significant upside through a Total Units 280 114 394 value-add program, while being positioned within Avg. Unit Size 1,022 SF 945 SF 1,000 SF walking distance of the Lake Highlands Town Center and in close proximity to numerous surrounding economic Rentable Area 286,148 SF 107,676 SF 393,824 SF drivers. Land Area 14.1 acres 5.2 acres 19.3 acres

With housing prices within a 1-mile area of The Portfolio Density 20 units/acre 22 units/acre 21 units/acre surpassing $1,000,000 and effective rents for new Parking 474 spaces 210 spaces 684 spaces construction in the area receiving $1,384, The Portfolio Parking Ratio 1.69 spc/unit 1.84 spc/unit 1.73 spc/unit represents a remarkable value option for renters looking to live in the outstanding Richardson school district. *Full Upgrade Units: black appliances, new cabinet doors, replaced flooring as needed, new 6-panel doors, new New Ownership has the ability to capitalize on the value- 6-inch baseboards, resurfaced countertops, full repaint, and upgraded fixture package. add nature of the Portfolio by implementing interior upgrades and renovating community features to drive **Granite Units: new stainless steel appliances, new cabinet doors, new vinyl flooring/carpet, new 6-panel rental rate income at the Properties. doors, new 6 inch baseboards, granite countertops, glass-tile backsplash, full repaint, and upgraded fixture package.

INVESTMENT HIGHLIGHTS

Exceptionally Well-Maintained Assets »» Current Ownership has spent over $5.2MM on exterior renovations and maintenance including: clubhouse remodel, new signage, all new windows, siding replacement, new boilers, new exterior lighting, restriping parking lots, new pedestrian gate, new vehicle gate, new mailbox structure, re-plastering pool, new pool deck and new pool furniture.

Significant Value-Add Potential »» Continuing a proven value-add program will bridge the 6% gap between current effective rents and the Competitive Set »» “Green Financing” through renovations can produce a 15% reduction in energy and/or water costs and will result in better loan pricing and increased proceeds »» Current upgrades include: granite countertops, black/stainless steel appliances, faux-wood flooring, tile backsplashes, new cabinet fronts, and upgraded fixtures

Lavera at Lake Highlands Paxton at Lake Highlands 44% units Full Upgrade 41% units Full Upgrade 28% units Granite Upgrade 42% units Granite Upgrade 28% units Classic 17% units Classic

Impressive Income Trends »» The Portfolio experienced 12% effective rent growth over the previous twelve months showing embedded rent growth within the Portfolio »» The Far East Dallas submarket, Class-B rental rates experienced 10.2% annual growth over the past twelve months

1 INVESTMENT HIGHLIGHTS

Low Density Communities in Irreplaceable, Infill Location »» Positioned within an affluent residential neighborhood with high barriers to entry »» Scarce site availability and high land costs limit new residential supply

Significant Redevelopment in the Immediate Area »» ( < 1 mi ) Lake Highlands Town Center • 70 acre development comprising 200,000 SF retail, 30,000 SF office space, an amphitheater, and a 20-acre park with jogging trails and a large lake Lake Higlands Town Center • The popular grocer, Sprouts, opened its doors in May 2017 and will be joined by Jersey Mike’s Subs in December, among others »» ( < 2 mi ) High Point Crossing • Houston-based Ainbinder Co. bought the 13-acre, former Steakley Chevrolet • Now boasts over 170,000 SF of retail and restaurants including: Academy Sports, Marshalls and Burlington »» ( 1 mi ) Lake Highlands Gateway • Planned $1.3 billion re-construction of the Skillman / Audelia intersection including an iconic bridge over Highway 635 and nine acres of land for development • The reconstruction will fix poor traffic flow allowing for the revitalization of High Point Crossing neighboring retail as well as new mixed-use development opportunities and transportation options

Outstanding Schools »» Served by the Richardson Independent School District, regarded as one of the top school districts in Texas »» The Portfolio feeds into Northlake Elementary, Lake Highlands Junior High, and Lake Highlands High School all of which are regarded as top schools in Texas according to Niche »» All schools are within walking distance to the Properties

Impressive 1-mile Demographics »» $293,883 median housing value compared to the City of Dallas average of Lake Highlands High School $165,721 (77% premium) »» Average income per household is $95,960 which is $20,000 higher than the City of Dallas »» More than 60% of the population has a graduate or college degree and 77% have at least some college experience

Nearby Economic Drivers »» Lake Highlands DART Station (Blue Line) – Positioned within walking distance to the Portfolio and runs south to Downtown Dallas and north to Downtown Rowlett »» Timber Creek Shopping Center – Located less than two miles from the Portfolio, the 485,000 SF shopping center features a WalMart, Sam’s Club, Home Depot, and JC Penney NorthPark Center »» NorthPark Center - Four miles west, is one of the top five shopping malls in the country which surpasses $1 billion in annual sales and has over two-million SF of upscale retail »» Preston Hollow Village – a $750 million project located three miles west of the Portfolio with over 300,000 SF of retail and office space and a three-acre park designed by the office that designed the award winning Klyde Warren Park »» The Shops at Park Lane – Less than ten minutes west, the 33.5 acre mixed use development includes 600,000 SF of retail, and 340,000 SF of upscale office space »» Texas Health Presbyterian – Located two miles east, includes 898 beds, 1,200 physicians and employs over 2,500 workers »» The 1,254-acre White Rock Lake and Dallas Arboretum & Botanical Garden are Presbyterian Dallas Hospital two miles south of the Portfolio

2 INVESTMENT HIGHLIGHTS

UNIT MIX Units % Type Config SF Market PSF Effective PSF 8 3% E1 Studio 484 $775 $1.60 $744 $1.54 16 6% A2 1 Br - 1 Ba 675 $858 $1.27 $791 $1.17 24 9% A3 1 Br - 1 Ba 782 $897 $1.15 $804 $1.03 32 11% B1 2 Br - 2 Ba 945 $1,122 $1.19 $1,028 $1.09 28 10% B2 2 Br - 2 Ba 1,056 $1,244 $1.18 $1,036 $0.98 24 9% B3 2 Br - 2 Ba 1,057 $1,213 $1.15 $1,066 $1.01 96 34% B4 2 Br - 1.5 Ba 1,058 $1,141 $1.08 $1,019 $0.96 10 4% B5 2 Br - 2.5 Ba 1,165 $1,315 $1.13 $1,086 $0.93 16 6% C1 3 Br - 2 Ba 1,185 $1,349 $1.14 $1,182 $1.00 16 6% C2 3 Br - 2.5 Ba 1,347 $1,475 $1.10 $1,256 $0.93 4 1% C3 3 Br - 2 Ba 1,367 $1,489 $1.09 $1,380 $1.01 6 2% C4 3 Br - 2 Ba 1,389 $1,478 $1.06 $1,438 $1.03 280 100% Avg. Size 1,022 $1,157 $1.13 $1,023 $1.00

8 3% Studio 484 $775 $1.60 $744 $1.54 40 14% 1 BR 739 $881 $1.19 $799 $1.08 190 68% 2 BR 1,044 $1,171 $1.12 $1,032 $0.99 42 15% 3 BRC1 3 Br - 2 Ba 1,293 $1,429 $1.10 $1,266 $0.98

LEASED UNITS UPGRADE ANALYSIS Full Upgrade Eff. Delta No Upgrade Eff. Delta Granite Upgrade Type Occ Vac Effective PSF $ % Type Occ Vac Effective PSF $ % Type Occ Vac Effective PSF E1F 5 0 $749 $1.55 $134 21.8% E1 1 0 $615 $1.27 $180 29.3% E1G 2 0 $795 $1.64 A2F 10 0 $813 $1.20 $167 25.8% A2 3 0 $647 $0.96 $212 32.8% A2G 3 0 $859 $1.27 A3F 7 0 $885 $1.13 $209 30.9% A3 10 0 $676 $0.86 $230 34.0% A3G 7 0 $906 $1.16 B1F 8 3 $999 $1.06 $156 18.5% B1 7 0 $843 $0.89 $324 38.4% B1G 11 3 $1,167 $1.24 B2F 9 4 $1,113 $1.05 $310 38.5% B2 7 0 $803 $0.76 $367 45.6% B2G 7 1 $1,170 $1.11 B3F 11 2 $1,140 $1.08 $358 45.7% B3 5 0 $782 $0.74 $403 51.5% B3G 5 1 $1,185 $1.12 B4F 42 4 $1,084 $1.02 $244 29.1% B4 29 0 $840 $0.79 $309 36.8% B4G 19 2 $1,149 $1.09 B5F 3 0 $1,277 $1.10 $386 43.4% B5 4 0 $890 $0.76 $300 33.7% B5G 2 1 $1,191 $1.02 C1F 6 0 $1,248 $1.05 $201 19.2% C1 6 0 $1,046 $0.88 $240 22.9% C1G 4 0 $1,286 $1.09 C2F 3 2 $1,313 $0.98 $184 16.2% C2 6 0 $1,130 $0.84 $243 21.5% C2G 5 0 $1,373 $1.02 C3F 3 0 $1,402 $1.03 C3G 1 0 $1,315 $0.96 C4F 3 0 $1,445 $1.04 C4G 3 0 $1,430 $1.03 110 15 $1,072 $1.07 $230 27.2% B2 78 0 $843 $0.82 $306 36.4% B2G 69 8 $1,149 $1.12

COMMUNITY AMENITIES INTERIOR FEATURES Resort-Style Pool and Sundeck Stainless Steel Appliances* All Two-Story Buildings Granite Countertops* Low Density Faux Wood Floors Clubhouse Glass-Tile Backsplash Coffee Bar Townhome Floorplans* Fitness Center Ceiling Fans Grilling Stations Two-Inch Blinds Bocce Ball Courts Patio/Balcony* Upgraded Playground Washer/Dryer Connections* Dog Park Walk-In Closets* Gated Access Fireplace* *In select units

3 INVESTMENT HIGHLIGHTS

Unit Mix Units % Type Config SF Market PSF Effective PSF 16 14% A1 1 Br - 1 Ba 736 $957 $1.30 $899 $1.22 8 7% A2 1 Br - 1 Ba 738 $951 $1.29 $893 $1.21 6 5% B1 2 Br - 2 Ba 960 $1,223 $1.27 $1,169 $1.22 32 28% B2 2 Br - 2 Ba 965 $1,221 $1.27 $1,108 $1.15 32 28% B3 2 Br - 2 Ba 966 $1,233 $1.28 $1,088 $1.13 16 14% C1 3 Br - 2 Ba 1,122 $1,358 $1.21 $1,215 $1.08 4 4% C2 3 Br - 2 Ba 1,123 $1,365 $1.22 $1,320 $1.18 114 100% Avg. Size 945 $1,193 $1.26 $1,082 $1.15

24 21% 1 BR 737 $955 $1.30 $897 $1.22 70 61% 2 BR 965 $1,227 $1.27 $1,102 $1.14 20 18% 3 BR 1,122 $1,359 $1.21 $1,236 $1.10

LEASED UNITS UPGRADE ANALYSIS Full Upgrade Eff. Delta No Upgrade Eff. Delta Granite Upgrade Type Occ Vac Effective PSF $ % Type Occ Vac Effective PSF $ % Type Occ Vac Effective PSF A1F 8 1 $908 $1.23 A1G 7 0 $889 $1.21 A2F 3 0 $896 $1.21 $166 22.7% A2 1 0 $730 $0.99 $203 27.7% A2G 4 0 $933 $1.26 B1F 2 1 $1,248 $1.30 B1G 2 1 $1,090 $1.13 B2F 10 3 $1,155 $1.20 $263 29.5% B2 5 0 $892 $0.92 $271 30.3% B2G 11 3 $1,163 $1.20 B3F 11 1 $1,119 $1.16 $157 16.3% B3 6 0 $963 $1.00 $157 16.3% B3G 13 1 $1,119 $1.16 C1F 5 0 $1,308 $1.17 $205 18.6% C1 7 0 $1,103 $0.98 $194 17.6% C1G 4 0 $1,297 $1.16 C2F 2 0 $1,345 $1.20 $0 0.0% C2 $0 0.0% C2G 2 0 $1,295 $1.15 41 6 $1,111 $1.19 $127 12.9% 19 0 $983 $0.97 $115 11.7% 43 5 $1,099 $1.18

COMMUNITY AMENITIES DFW ECONOMIC OVERVIEW Resort-Style Swimming Pool Clubhouse Upgraded Fitness Center Modern Business Center Coffee Bar Covered Parking 139,649 93,600 516,986 Gated Access Projected new jobs New jobs added Projected created from 2017 during the year population growth to 2021 ending Sep. ‘17 from 2017 to 2021 INTERIOR FEATURES Stainless Steel Appliances* FAR EAST DALLAS Granite Countertops* Faux Wood Floors APARTMENT MARKET Glass-Tile Backsplash Ceiling Fans Two-Inch Blinds B Patio/Balcony* Washer/Dryer Connections* 12.3% 93.8% 7.2% Walk-In Closets* Class-B Annual Average Annual Rent Fireplace* Rent Growth Occupancy Growth *In select units 3Q2017

4 DECATUR PROSPER DENTON

McKINNEY PONDER LITTLE FARMERSVILLE ELM CORINTH ARGYLE FRISCO AY LLW TO Lewisville URN YB RA Lake AM ALLEN THE COLONY S HIGHLAND LUCAS VILLAGE JUSTIN RHOME Lavon Lake LEWISVILLE PLANO WYLIE ENT GEORGE BUSH FLOWER MOUND SID T E UR MURPHY R NP TROPHY P IK E Fort Worth ROANOKE Alliance CLUB Grapevine Airport Lake ROYSE HASLET CARROLLTON Addison SACHSE Airport CITY GRAPEVINE COPPELL ADDISON RICHARDSON Property Name Property Name SOUTHLAKE North KELLER Lake FARMERS 30 BRANCH ROCKWALL AZLE

Mountain LAS COLINAS Preston GARLAND D

D Hollow Lake ROWLETT A

Lake A Property Name Property Name

L L Highlands L

Dallas/Fort Worth L

A A

S S

N

COLLEYVILLE International DALLAS N

O O

R R T

SAGINAW WATAUGA Airport LOVE FIELD T

H H

University T

AIRPORT T O

BEDFORD IRVING O Lake Ray Hubbard

L

NORTH L Park

L L W

W 30

A A Y 820 RICHLAND Y White Rock Highland HEATH HILLS EULESS Park Lakewood Lake LAKE 820 Fort Worth Meacham HURST Lake Worth WORTH Airport HALTOM CITY Uptown 30 SUNNYVALE NAS Joint Reserve FORT DALLAS CBD Base Fort Worth WORTH 30 WHITE WESTOVER 30 30 MESQUITE Property Name CBD ADDITIONAL INFORMATION FORNEY SETTLEMENT HILLS OAK CLIFF ARLINGTON If you haveGRAND any questions PRAIRIE or require additional information, please contact 820 any of the individuals below. Y. W K Lake Mountain 30 P ROB KEY, Managing Director, [email protected] (469) 232.1926 AIL TR Arlington Creek Lake 45 820 DAVID AUSTIN, Director, [email protected] (469) 232.1993 M BALCH

L O

O Property Name H

H TEDDY LEATHERMAN, Analyst, [email protected] (469) 232.1975 20 Property Name

S S 20 I BELT SPRINGS

H DALWORTHINGTON C For questions regarding debt structures on this property, please contact: JUNCTION FOREST HILL GARDENS 20 BENBROOK MICHAEL COSBY, Director, [email protected] (469) 232.1917 DUNCANVILLE EDGECLIFF HFF, L.P. HUTCHINS One Victory Park VILLAGE OFFER DATE: TBD 20 2323 Victory Avenue, Suite 1200 SEAGOVILLE Dallas, TX 75219 JoeTIMING: Pool Telephone: (214) 265.0880 CRANDALL Benbrook Lake Facsimile: (214) 265.9564 All submissions must include specific terms relating to www.hfflp.com Lake Due Diligence and Closing time periods. DE SOTO LANCASTER

HFF has been engaged by the owner of the property [properties] to market it [them] for sale. Information concerning the property [properties] described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all 45reference to KAUFMAN age, square footage, income,CEDAR expenses and any HILLother property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained CROWLEY herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.

BURLESON MANSFIELD FERRIS

MIDLOTHIAN