Offering Memorandum

Ghent Apartments Portfolio

40-Unit Portfolio in the Historic Ghent Neighborhood NON-ENDORSEMENT AND DISCLAIMER NOTICE NON-ENDORSEMENTS Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any com- The Ghent mercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or GHENT Apartments Portfolio subsidiaries, or any agent, product, service, or commercial listing of Marcus & Milli- chap, and is solely included for the purpose of providing tenant lessee information 832 Brandon Avenue, Norfolk, VA about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MAR- 750 W Princess Anne Road, Norfolk, VA CUS & MILLICHAP AGENT FOR MORE DETAILS. 400 Fairfax Avenue, Norfolk, VA DISCLAIMER THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND EXECUTIVE SUMMARY SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from Investment Highlights sources we believe to be reliable, but we make no representations or warranties, ex- Property Highlights 1 press or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any PROPERTY ANALYSIS inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved. Investment Overview ZAA0600056, ZAA0600057, and ZAA0600058. Selling Points Location Overview 8 Location Highlights

EXCLUSIVELY LISTED BY: COMPARABLE PROPERTIES Sale Comparables Rent Comparables 52 ALTAY UZUN JUSTIN FERGUSON Vice President, Investments Investment Associate FINANCIAL ANALYSIS [email protected] [email protected] Pricing Detail Rent Roll Summary Cash Flow Statement 70 KYLE GROSS SHELBY JACOBS Growth Rates Investment Associate Marketing Coordinator [email protected] [email protected] DEMOGRAPHIC ANALYSIS Demographic Highlights www.midatlanticmultifamily.com Statistics 76 Section Offering Price Offering Highlights $4,008,000

2 01 3 Bed Total Units 1.5 Bath Residents have access to 40 EXECUTIVE HIGHLY REGARDED & TOP 18 40 20 2 Bed 1 Bed RANKED PUBLIC SCHOOLS 1 Bath Units 1 Bath within 1 mile from Properties SUMMARY Taylor Elementary School, 3 Blair Middle School, and Maury High School. Offering Highlights Combined 50+446 Lot Size Rarity of Offering Resident Amenities 0.45 Property Overview #1 Laundry Facility Hardwood in Select in Best Flooring Properties Rentable Investment Highlights Neighborhoods Square Feet Stainless Steel to Live in Ceiling Fans in Appliances in Select Units Norfolk Select Units 35,950 -Niche Property Overview Brandon Avenue Apartments 12 0.27 Marcus & Millichap has been selected to exclusively market for sale the Ghent Apartments Portfolio, Units Lot Size a 40-unit apartment portfolio located in the historic Ghent neighborhood of Norfolk, VA.

SUBJECT PROPERTY EXECUTIVE SUMMARY

The Ghent Apartments Portfolio consists of 40 units across three buildings built between 1910 and 1928 and situated on a combined 0.45 acres. There are twenty (20) 828 sqft one-bedroom one-bathroom units, sixteen (16) 944 sqft two-bedroom one-bathroom units, and two (2) 1,200 sqft three-bedroom one-and-a-half bathroom units. Select units feature hardwood flooring, private balconies, ceiling fans, stainless steel appliances, and tile flooring. Located in Ghent, Norfolk, the property’s prime location enjoys the benefits of not only liveliest metro, but also the most prominent 2

arts and culture district in the entire MSA. The Ghent Apartments Portfolio also provides quick ac- Ghent Apartments Portfolio cess to Downtown Norfolk and Norfolk’s Waterside District. Ghent Apartments Portfolio 1 The Ghent Apartments Portfolio has a current occupancy of 92.5% while the Ghent submarket has shown 95.5% occupancy for the past year. With a focus on healthcare, professional, and business services sectors, Ghent is less susceptible to the volatility in the military and shipping industries that increased vacancies throughout the Hampton Roads.

DEVELOPMENT

EXECUTIVE SUMMARY Sentara Norfolk General Hospital’s new $200 million expansion increases the emergency depart- ment, modernizes eighteen operationing rooms, and adds two helicopter pads. Sentara Norfolk General Hospital is home to the Sentara Neuroscience Institute, Special Care Nursery, CyberKnife Radiosurgery System, and the Sentara Cancer Network. Tidewater Community College is relocating its Visual Arts Center to Norfolk’s NEON District. The 47,000 square foot development will feature a hospitality and restaurant management school and a culinary arts program. The new TCC campus is anticipated to open in 2021. Baylor Fairfax Apartments 22 0.25 6 0.16 Apartments Units Lot Size Units Lot Size EXECUTIVE SUMMARY

4 Ghent Apartments Portfolio Ghent Apartments Portfolio 3 EXECUTIVE SUMMARY 5 EXECUTIVE SUMMARY Ghent Apartments Portfolio $1,300. pared totheaveragerentingpriceof gage paymentinGhentis the mediansinglefamilyhomemort Family HousingMarketsinNorfolk: One oftheMostExpensiveSingle lation holdacollege degree. tion arerenters and Approximately household income in Ghent is Superb Demographics: 40-Unit MultifamilyPortfolioLocatedwithin a 1.3 MileRadiusUniquelyPositionedinGhent 69.5% ofthepopula - Investment 92% ofthepopu $1,865 com- average $83,867. - - Highlights eas capturingrentalpremiums. interiors and revamp the common ar have the opportunity to remodel unit Value-Add Opportunity: Green Onion, andsomuch more! Noodles & Company, Skinny Dip, the 626 WineBar, Starbucks,Chipotle, ler MuseumofArt, HarrisTeeter,Press Norfolk General Hospital, the Chrys within walkingdistancetoSentara Neighborhood Amenities: investors located - - Hampton Roads! Best ofthe wide varietyofrecreational activities. and 144milesof shorelineofferinga Waterside District, downtownarea, entertainment district(NEONArts District), tastycuisineforevery appetite, newly re-developed Norfolk

offersavibrant

EXECUTIVE SUMMARY EXECUTIVE Ghent Apartments Portfolio Apartments Ghent 6 Section Property Highlights

Baylor Apartments Fairfax Apartments Brandon Ave Apartments

Address 750 W Princess Anne Rd Address 400-402 Fairfax Ave Address 832 Brandon Ave 02 Total Units 22 Units Total Units 6 Units Total Units 12 Units Parcel Number 1428627287 Parcel Number 1427798239 Parcel Number 1428638617

Buildings 1 Building Buildings 1 Building Buildings 1 Building PROPERTY Stories 4 Stories Stories 3 Stories Stories 3 Stories Zoning HC-G2 Zoning HC-G1 Zoning MF-NS

Year Built 1921 Year Built 1910 Year Built 1928 ANALYSIS Occupancy 90.9% Occupancy 100% Occupancy 91.7% Flood Zone X Flood Zone AE - 8Ft Elevation Flood Zone X

Gross Building SF 19,000 SqFt Gross Building SF 5,900 SqFt Gross Building SF 10,900 SqFt Property Highlights Lot Size .02473 Acres Lot Size 0.1567 Acres Lot Size 0.2705 Acres Total Parking Street Parking Total Parking Street Parking Total Parking 12 Spots Investment Overview HVAC Window A/C (Tenant) HVAC Central HVAC Window A/C (Tenant) Laundry On Site Coin Laundry Laundry W&D Hookups (1st Floor) Laundry On Site Coin Facility

Market Overview Utilities Utilities Utilities

Water Owner Paid Water Owner Paid Water Owner Paid

Location Overview Sewer Owner Paid Sewer Owner Paid Sewer Owner Paid

Electric Tenant Paid Electric Tenant Paid Electric Tenant Paid

Trash Owner Paid Trash Owner Paid Trash Owner Paid Aerial Map Regional Map

Baylor Brandon Apartments PROPERTY ANALYSIS Avenue 16 One-Bed Units Apartments 4 Two-Bed Units 12 Two-Bed Units 2 Three-Bed Units

10 Ghent Apartments Portfolio Ghent Apartments Portfolio 9

Fairfax Apartments 4 One-Bed Units 2 Two-Bed Units Ghent Apartment Portfolio PROPERTY ANALYSIS 11 PROPERTY ANALYSIS Ghent Apartments Portfolio place ofresidence fortenantsofallages. and central location make it adesirable neighborhood charm, on the waterperks, ployment centers, high end retail, historic The submarket’s proximity to major em- Superb Demographics Population 69.5% of the Rent Population 7,372 Total Household $83,867 Average Income Occupancy 95.5% Rate Population by 2024 3.9% Growth Ghent, Norfolk Post Graduate Degree Limited BuyingOpportunities 5 Units&Up Properties Bachelor’s Degree 71 30.5% Multifamily Offering Own Ownership: Household Some College Capitalize onaRare High School No Degree Educational Attainment Properties Soldin GHENT 69.5% Rent Last 3Years 2% 19 33% 37% Female 47.7% Gender:

Units &UpSoldin Owned 56.8% the Last3Years Properties 10 6% 52.3% Male 5 22% Highlight theArea’s High EndRetailers Desirability

12 PROPERTY ANALYSIS PROPERTY Ghent Apartments Portfolio Apartments Ghent 13 PROPERTY ANALYSIS Ghent Apartments Portfolio 13 12 11 10 9 8 7 6 5 4 3 2 1 Points ofInterest Neptune Park Chic’s Beach Beach Boardwalk Children’s MuseumofVirginia TopGolf The NorVa Waterside District Chrysler MuseumofArt The Scope Ocean ViewBeachPark Norfolk BotanicalGarden Virginia Zoo

1,383 Apartments as ofFall2018 24,176 The Ghent as ofFall2018 Students Students 4 2 3 10 4 6 8 7 5 1 1 Norfolk PremiumOutlets 5,204 3 as ofFall2018 Students 1,438 2 as ofFall2018 Students Students 9 12 Virginia BeachTownCenter “ A+ Small town feel in a big city - Niche Review Ghent, Norfolk Overall Niche Grade for “ 11 13 Hampton Roads’topattractions. within twentyminutesfrom tivities amenities andrecreational ac Norfolk offers aplethoraofretail Central Location A Premier Notable Developments 4 3 2 1 & TwoAdditional HelicpoterPads Modernize OperatingRooms $200M |Expectedto Openin2020 Sentara NorfolkGeneral HospitalExpansion Training HubforNorfolk NavalShipyard $64.7M |157,000sqft Norfolk NavalShipyardTrainingFacility Care &OpenMentalFacility Outpatient Expand Hire 400Employees, $224M |ExpectedtoOpenin2022 Children’s HospitaloftheKingsDaughters 260,000 sqftClassAOfficeSpace Expected toOpeninDec.2020 Norfolk GatewayOfficeTower

- 15 PROPERTY ANALYSIS Ghent Apartments Portfolio corporate for platforms start- looking with vasta booming business district repositioning hascreated ofthecity inredevelopmentdrastic shift and of private and public investment a Station. Recently withtheemergence from downtown Naval and theNorfolk justminuteslocated incentral Norfolk, residents andvisitors, alike. Ghent is shopping anddiningexperience to munity, offering adiverse cultural, com Ghent andeclectic isathriving culture, commerce,andart...” money intersectingwithyouth Old worldcharmmeetsold Cultural ofNorfolk” HEART “The HISTORIC GHENT up andrelocation opportunities. -

16 PROPERTY ANALYSIS PROPERTY Ghent Apartments Portfolio Apartments Ghent 17 PROPERTY ANALYSIS Ghent Apartments Portfolio Levine’s ofNorfolk. Pendulum Fine Meats, Table 7,Creme 321, and SHOPPING: Brewery. Company, Coelacanth Brewery, andSmartmouth Taphouse, Pinot’s Pallete, O’Conner’s Brewing tory, Color Mine,Mermaid Me Winery, Norfolk’s LEISURE: Company, andmany more. Tavern, PaneraYnot Italian, Bread, Noodles& Supper, 80/20Burger Bar, Public House, Kelly’s Shawarma, Pho 79, Taste, Volcano Sushi,LaBella, cuit, Toast, Luna Rajput, Maya, Jessy’s Tacos, Mr. Diner, Chanello’s Kotobuki, Pizza, HandsomeBis- DINING: accomplished onfoot. eateries, uniquestorefronts, galleries, and art Most errands canbe melting pot of high-end restaurants,melting potofhigh-end eclectic Walk Score popular recreational activities. Chipotle, The Green Onion, Little Dog , Mermaid Fac Mermaid of Art, Museum Chrysler (1 mile),residents have access to a 85 Roads MSA. Roads Within distance walking Le A. Dodson’s, Marsche, Kitsch, riences withintheHampton for one-of-a-kind exper for one-of-a-kind

GHENT Biking is convenient for most trips. Bike Score isameca 68 - - Upscale Eateries 15 Casual Dining 27 Coffee Shops Entertainment 9 12 Apartments Baylor

18 PROPERTY ANALYSIS PROPERTY Ghent Apartments Portfolio Apartments Ghent Brandon Avenue Apartments PROPERTY ANALYSIS

Colley Avenue

20 Ghent Apartments Portfolio Ghent Apartments Portfolio 19

Baylor PROPERTY ANALYSIS Apartments

Fairfax COLLEY CORRIDOR Apartments 21 PROPERTY ANALYSIS Ghent Apartments Portfolio the area. and entertainment to recreational activities and provideanarrayof striving actorsflourish promising artists,and budding comedians, developing eateries, Local attractions, the cityasawhole. and growingstrengthof advancing technology, entertainment, inclusion, collective reflect anewwaveof progressive effortsto cultural presenceand essence ofNorfolk’s Norfolk, capturesthe NEON, N EON DISTRIC or NewEnergyof T SENTARA NORFOLK GENERAL HOSPITAL (SNGH)

EASTERN VIRGINIA PROPERTY ANALYSIS MEDICAL SCHOOL 1.5 Miles from Downtown Norfolk Ranked Best National Hospital Baylor 0.4 Miles from in 2018-2019 for Cardiology & Apartments Sentara Norfolk General Heart Surgery, Diabetes & En- 16 One-Bed Units Hospital / Eastern 4 Two-Bed Units Virginia Medical School docrinology, and Nephrology. 2 Three-Bed Units 24 Ghent Apartments Portfolio

♦ Destination Medical Center in the Mid-At- lantic Region. ♦ 1 of 5 Level 1 Trauma Centers in Virginia. ♦ Home to Nightingale Regional Air Am- bulance, the Region's First Magnet Hospi- Immediate tal, and Nationally Ranked Heart Program. Access to ♦ SNGH contains a 525 Bed Medical Cen- Major Employment Center ter Serving as the Primary Teaching Institu- Sentara Norfolk tion for EVMS. General Hospital ♦ EVMS Strelitz Diabetes Center is Ranked and Eastern Virginia Medical School, Chil- 24th in the Nation. dren's Hospital of The King's Daughters, and EVMS Strelitz Diabetes Center. PROPERTY ANALYSIS Ghent Apartments Portfolio 26 8,500 6,527 5,400 4,364 3,268 2,000 1,905 3,025 22,000 EMPLOYEES Military Military Services Services Services Banking Government Government Manufacturing SECTOR Norfolk City BAE Systems COMPANY Bank of America Sentara Norfolk Naval Shipyard Norfolk Children’s Health System Old Dominion Norfolk City Public Schools Norfolk City Public Naval Medical Center Portsmouth Naval Medical Center 1 2 3 4 5 6 7 8 9

3 7 5 8 9 6 1 2 4 Accessibility to Accessibility increases occupancy levels. levels. increases occupancy High Salary Jobs Salary High access to a broad variety of services has has broad variety of services access to a The property’s ability to provide convenient convenient to provide ability The property’s Ghent, in live to demand driven continuously and growth, rent average above promotes $325K $300K $275K $350K $250K 2019 2018 2017 2016 2015 2014 Homeownership Ghent Home Values Ghent 2013 Home $1,865 Monthly Payment on a Median Priced $979 Rent at Portfolio Average the Ghent $886/month Apartments Affordability Gap

Affordability Gap to Gap Affordability

Ghent, Norfolk

Affordability Gap Affordability $2,000 27 PROPERTY ANALYSIS Ghent Apartments Portfolio Increase Equity Fairfax Apartments • Increaseallrents currently achieving to thehighestrent Implementation Increasing $64,373 Income • RUBS T he G hent Brandon AveApartments to $1,150marketvalue Components ofValue Increase Equity • Increaseallrents • BoilertoElectric A Implementation $451,347 Increasing partments Conversion Income • RUBS Stabilized Valuation to $1,055marketvalue Increase Equity • Increaseallrents Baylor Apartments • BoilertoElectric Implementation $688,267 Increasing Conversion Income • RUBS $1,203,987 inEquity Increase Value-Add Total Potential from currentto assumptionsequalsa • at a7.5%terminalcaprate. • minal caprate. • Increaserentsfrom$962to

a from currenttoassumptionsequalsa • at a7.5%terminalcaprate. • • $291,840 equityat7.5%terminalcaprate. • Increaserentsfrom$998currentto will unlock$25,413ofequityat • Increaserentsatpropertytohighestrentcurrentlyattaining atproperty($37increase), Total EquityUnlocked = Total EquityUnlocked= Boiler toElectric Conversion RUBS: Passingthecurrentwater/sewer ($27,068)totenantswillunlock Boiler toElectricConversion RUBS: Passingthecurrentwater/sewer($2,922)totenantswillunlock RUBS: Passingthecurrentwater/sewer($11,963)totenantswillunlock 7.5% terminalcaprate.

Targeted Unlocked Equity=$1,203,987 $688,267 ~27.9%Return ofInvestmentforBoilerto Electric $451,347 ~4.68%ReturnofInvestment forBoilertoElectric Total EquityUnlocked= Unlocking Equity $1,055 marketvalueunlocks : $4,000/unitto implement($88,000).Difference of$24,568 : $4,000/unittoimplement($48,000).Differenceof$2,250 7.5% terminalcaprate. Brandon Apartments: Fairfax Apartments: Baylor Apartments: $1,150 marketvalueonaverage($152)willunlock 27.9% return. 4.68% return. $64,373 $327,360 ofequityata $38,960 ofequtiyat $159,507 ofequtiy $360,907 ofequtiy 7.5% ter -

28 PROPERTY ANALYSIS PROPERTY Ghent Apartments Portfolio Apartments Ghent Baylor Apartments PROPERTY ANALYSIS

30 Ghent Apartments Portfolio Baylor Apartments PROPERTY ANALYSIS

32 Ghent Apartments Portfolio Ghent Apartments Portfolio 31 PROPERTY ANALYSIS Baylor Apartments PROPERTY ANALYSIS

34 Ghent Apartments Portfolio Brandon Avenue Apartments PROPERTY ANALYSIS

36 Ghent Apartments Portfolio Brandon Avenue Apartments PROPERTY ANALYSIS

38 Ghent Apartments Portfolio Ghent Apartments Portfolio 37 PROPERTY ANALYSIS Brandon Avenue Apartments Brandon Avenue Apartments PROPERTY ANALYSIS

42 Ghent Apartments Portfolio Brandon Avenue Apartments PROPERTY ANALYSIS

44 Ghent Apartments Portfolio Fairfax Apartments PROPERTY ANALYSIS

46 Ghent Apartments Portfolio Ghent Apartments Portfolio 45 PROPERTY ANALYSIS Fairfax Apartments Ghent Apartments Portfolio 47 PROPERTY ANALYSIS Fairfax Apartments Ghent Apartments Portfolio 49 PROPERTY ANALYSIS Section 03 COMPARABLE PROPERTIES 1 COMPARABLE

PROPERTIES 52 Ghent Apartments Portfolio

Sale Comparables Map Rent Comparables 2 Sale Comparables Map Ghent Apartments Portfolio

1 The Grand at West Ghent

2 Holland House Apartments The Ghent Apartments Portfolio | Sale Comparables The Ghent Apartments Portfolio | Price Per Unit Summary COMPARABLE PROPERTIES

Properties Units Year Built Gross SF Price Price/Unit COE $125,000

The Ghent Apartments Portfolio 1910- 750 W Princess Anne Rd | 400 Fairfax 40 35,950 $4.008M $100,200 - 1928 Ave | 832 Brandon Ave|Norfolk, VA Avg $100,000 $104,451 The Grand at West Ghent 1 1000 Westover Avenue 18 1914 18,060 $2M $111,111 4/27/2017 Norfolk, VA 23507 54 Ghent Apartments Portfolio Holland House Apartments $75,000 2 200 Drummond Place 24 1904 35,524 $2.347M $97,792 12/15/2017 Norfolk, VA 23507

$50,000 1 2

$25,000

$0 Ghent The Grand Holland Apartments at West House Portfolio Ghent Apartments Ghent Apartments Portfolio The Grand at West Ghent Holland House Apartments 1 2 COMPARABLE PROPERTIES

750 W Princess Anne Rd | 400 Fairfax Ave | 832 Brandon Ave| Norfolk, VA 1000 Westover Ave, Norfolk, VA 200 Drummond Place, Norfolk, VA 56 Offering Price: $4,008,000 Sale Price: $2,000,000 Sale Price: $2,347,000 Ghent Apartments Portfolio

Ghent Apartments Portfolio Total Units: 40 Units COE: 4/27/2017 COE: 12/15/2017 55 Price Per Unit: $100,200 Total Units: 18 Total Units: 24 Price Per SqFt: $111.49 Price Per Unit: $111,111 Price Per Unit: $97,792 Cap Rate: 6.06% Price Per SqFt: $110.74 Price Per SqFt: $66.07 Year Built: 1910-1928 Year Built: 1914 Year Built: 1904 Lot Size: 0.45 Acres Lot Size: 0.312 Acres Lot Size: 0.396 Acres

UNIT TYPE # OF UNITS UNIT TYPE # OF UNITS UNIT TYPE # OF UNITS

COMPARABLE PROPERTIES 1 Bed 1 Bath Units 20 1 Bed 1 Bath Units 6 1 Bed 1 Bath Units 8 2 Bed 1 Bath Units 18 2 Bed 1 Bath Units 6 2 Bed 1 Bath Units 16 3 Bed 1.5 Bath Units 2 3 Bed 1 Bath Units 6 9 Rent Comparables The Ghent Apartments Portfolio | Rent Comparables 2 8 Ghent Apartments Portfolio 1 Colonial Lofts 1 Bed 1 Bed 2 Bed 2 Bed 3 Bed 3 Bed 11 Properties Units SqFt Rent SqFt Rent SqFt Rent 2 1001 Gates Avenue The Ghent Apartments Portfolio 12 3 1008 Westover Avenue 750 W Princess Anne Rd | 400 Fairfax 22 828 $903 944 $1,023 1,200 $1,344 10 Ave | 832 Brandon Ave | Norfolk, VA 5 4 1017 Westover Avenue Colonial Lofts 7 24 - - 850 $1,150 - - 5 800 W Princess Anne Road 1 1217 Colonial Ave, Norfolk, VA 23517 6 6 The Grand at West Ghent 1001 Gates Avenue 3 1 2 12 - - 1,000 $1,450 1,200 $1,800 4 7 736 W Princess Anne Road Norfolk, VA 23507 1008 Westover Avenue 8 916 Spotswood Avenue 41 - - 935 $1,220 - - 13 3 Norfolk, VA 23507 9 2204 Claremont Avenue 1017 Westover Avenue 6 - - 859 $930 - - 10 938 W Princess Anne Road 4 Norfolk, VA 23507 Ghent Apartments Portfolio 11 913 Spotswood Avenue 800 W Princess Anne Road 57 5 24 - - 1,440 $1,563 - - Norfolk, VA 23517 12 731 Shirley Avenue The Grand at West Ghent 13 702 Redgate Avenue 6 18 700 $952 1,060 $999 1,250 $1,239 1000 Westover Ave, Norfolk, VA 23507

736 W Princess Anne Road 8 - - 1,600 $1,730 - - 7 Norfolk, VA 23517

916 Spotswood Avenue 18 750 $900 1,250 $1,050 - - 8 Norfolk, VA 23517 COMPARABLE PROPERTIES The Ghent Apartments Portfolio | Rent Comparables The Ghent Apartments Portfolio | One Bed Summary

1 Bed 1 Bed 2 Bed 2 Bed 3 Bed 3 Bed COMPARABLE PROPERTIES Properties Units SqFt Rent SqFt Rent SqFt Rent $1,200

2204 Claremont Avenue 9 13 750 $880 - - - - Norfolk, VA 23507 Avg $1,000 $1,001 938 W Princess Anne Road 10 12 910 $1,180 - - - - Norfolk, VA 23507

913 Spotswood Avenue 6 975 $1,095 - - - - 11 Norfolk, VA 23517 $800

731 Shirley Avenue 60 2 - - - - 1,300 $1,400 Ghent Apartments Portfolio 12 Norfolk, VA 23517

Ghent Apartments Portfolio 702 Redgate Avenue $600 8 - - - - 1,250 $1,413 59 13 Norfolk, VA 23507

$400

$200 COMPARABLE PROPERTIES

$0 Ghent The Grand 916 2204 938 W 913 Apartments at West Spotswood Claremont Princess Spotswood Portfolio Ghent Avenue Avenue Anne Road Avenue The Ghent Apartments Portfolio | Two Bed Summary The Ghent Apartments Portfolio | Three Bed Summary

$1,800 $1,800 COMPARABLE PROPERTIES $1,600 $1,600 Avg $1,463 $1,400 Avg $1,400 $1,262

$1,200 $1,200

$1,000 62

$1,000 Ghent Apartments Portfolio Ghent Apartments Portfolio 61 $800 $800

$600 $600

$400 $400

$200 $200 COMPARABLE PROPERTIES

$0 $0 Ghent Colonial 1001 1008 1017 800 W The Grand 736 W 916 Ghent 1001 The 731 702 Apartments Lofts Gates Westover Westover Princess at West Princess Spotswood Apartments Gates Grand at Shirley Redgate Portfolio Avenue Avenue Avenue Anne Road Ghent Anne Road Avenue Portfolio Avenue West Ghent Avenue Avenue The Ghent Apartments Portfolio 750 W Princess Anne Road | 400 Fairfax Ave | 832 Brandon Ave | Norfolk, VA 3 1008 Westover Avenue Norfolk, VA 23507 22 1921 0.452 Total Units Year Built Lot Size Amenities: 41 1925 0.24 Amenities: ♦ Hardwood Flooring Total Units Year Built Lot Size ♦ Extra Storage Hardwood Flooring COMPARABLE PROPERTIES Unit Mix Units SF Rent ♦ Tile Flooring ♦ Unit Mix Units SF Rent ♦ In-Unit W&D 1 Bed 1 Bath 16 828 $903 ♦ Stainless Steel Applianc- ♦ Patio es in Select Units 2 Bed 1 Bath 41 935 $1,220 2 Bed 1 Bath 4 944 $1,023 ♦ Central A/C ♦ Coin Operated Laundry Total/Avg 41 935 $1,220 ♦ Stainless Steel Appliances 3 Bed 1.5 Bath 2 1,200 $1,344 Facility ♦ Dishwashers ♦ Ceramic Tile Flooring Total/Avg 40 899 $979 1 Colonial Lofts 1217 Colonial Avenue, Norfolk, VA 23517 4 1017 Westover Avenue Norfolk, VA 23507 6 1921 0.18 Amenities: Amenities: 24 1918 0.185 Total Units Year Built Lot Size ♦ Pet Friendly Units Total Units Year Built Lot Size ♦ Hardwood Flooring In-Unit W&D 64

♦ Ghent Apartments Portfolio Ceiling Fans ♦ Unit Mix Units SF Rent ♦ Private Patio Granite Counter-tops Unit Mix Units SF Rent ♦ ♦ Central A/C Ghent Apartments Portfolio Tile Flooring ♦ 2 Bed 1 Bath 6 859 $930 ♦ Ceramic Tile Flooring 63 2 Bed 2 Bath 24 850 $1,231 Total/Avg 6 859 $930 ♦ Ceiling Fans Total/Avg 24 850 $1,231 ♦ Hardwood Flooring ♦ Stainless Steel Appliances

2 1001 Gates Avenue Norfolk, VA 23507 5 800 W Princess Anne Road Norfolk, VA 23517 Amenities: 12 1918 0.208 24 1917 0.51 ♦ Pet Friendly Units Total Units Year Built Lot Size Amenities: Total Units Year Built Lot Size ♦ Extra Storage ♦ Pet Friendly Units Unit Mix Units SF Rent ♦ Hardwood Flooring

COMPARABLE PROPERTIES Unit Mix Units SF Rent ♦ In-Unit W&D ♦ In-Unit W&D ♦ Central A/C 2 Bed 1 Bath 3 1,000 $1,450 2 Bed 1 Bath 24 1,440 $1,563 ♦ Gated Community ♦ Ceiling Fans Total/Avg 24 1,440 $1,563 ♦ Ceiling Fans 3 Bed 2 Bath 9 1,200 $1,800 ♦ Disposal ♦ Disposal ♦ Stainless Steel Appliances ♦ Decorative Fireplaces Total/Avg 12 1,150 $1,713 ♦ High Ceilings ♦ Exposed Brick ♦ Stainless Steel Appliances 6 The Grand at West Ghent 1000 Westover Avenue, Norfolk, VA 23507 9 2204 Claremont Avenue Norfolk, VA 23507 18 1914 0.317 Amenities: Total Units Year Built Lot Size ♦ Laundry Facility 13 1940 0.25 Amenities: ♦ Pet Friendly Units Total Units Year Built Lot Size Unit Mix Units SF Rent ♦ Hardwood Flooring Ceiling Fans COMPARABLE PROPERTIES ♦ ♦ Matching Appliances High Ceilings 1 Bed 1 Bath 6 700 $952 ♦ Unit Mix Units SF Rent ♦ Ceiling Fans Refinished Hardwood Flooring ♦ ♦ Spacious Closets 2 Bed 1 Bath 6 1,060 $999 Stainless Steel Appliances 1 Bed 1 Bath 13 750 $880 ♦ ♦ Laundry Facility ♦ Granite Counter-tops Total/Avg 13 750 $880 3 Bed 1 Bath 6 1,250 $1,239 Total/Avg 18 1,003 $1,063

7 736 W Princess Anne Road Norfolk, VA 23517 10 938 W Princess Anne Road 828 Gates Avenue, Norfolk, VA 23507

Amenities: 8 1919 0.23 12 1938 0.41 Amenities: 66

♦ Pet Friendly Units Ghent Apartments Portfolio Total Units Year Built Lot Size Total Units Year Built Lot Size ♦ Private Balconies ♦ Stainless Steel Appliances ♦ Hardwood Flooring

Ghent Apartments Portfolio Unit Mix Units SF Rent ♦ In-Unit W&D Unit Mix Units SF Rent ♦ Matching Appliances ♦ Walk-In Closets 65 2 Bed 2 Bath 8 1,600 $1,730 ♦ In-Unit W&D ♦ Gas Fireplaces 1 Bed 1 Bath 12 910 $1,180 ♦ Ceiling Fans Total/Avg 8 1,600 $1,730 ♦ Private Balconies Total/Avg 12 910 $1,180 ♦ Dishwashers ♦ Hardwood Flooring

8 916 Spotswood Avenue Norfolk, VA 23517 11 913 Spotswood Avenue Norfolk, VA 23517

18 1926 0.32 6 Amenities: Total Units Lot Size Amenities: 1927 0.19 Year Built Total Units Lot Size ♦ Tile Flooring ♦ Pet Friendly Units Year Built ♦ Matching Appliances COMPARABLE PROPERTIES ♦ Hardwood Flooring Unit Mix Units SF Rent Unit Mix Units SF Rent ♦ Dishwashers ♦ Ceiling Fans ♦ Hardwood Flooring 1 Bed 1 Bath 12 750 $900 ♦ Matching Appliances 1 Bed 1 Bath 6 975 $1,095 ♦ Ceiling Fans 2 Bed 1 Bath 6 1,250 $1,050 Total/Avg 6 975 $1,095 ♦ Spacious Closets ♦ On-Site Laundry Facility Total/Avg 18 917 $950 12 731 Shirley Avenue Norfolk, VA 23517

2 1918 0.09 Amenities: Total Units Year Built Lot Size ♦ Laundry Facility ♦ Decorative Fireplaces COMPARABLE PROPERTIES Unit Mix Units SF Rent ♦ Ceiling Fans ♦ Hardwood Flooring 3 Bed 2 Bath 2 1,300 $1,400 Total/Avg 2 1,300 $1,400

13 702 Redgate Avenue Norfolk, VA 23507

8 68 1933 0.36 Amenities: Total Units Year Built Lot Size Ghent Apartments Portfolio ♦ Carpeting Tile Flooring Ghent Apartments Portfolio Unit Mix Units SF Rent ♦ ♦ Dishwashers 67 3 Bed 1 Bath 8 1,250 $1,413 ♦ Central A/C ♦ In-Unit W&D Total/Avg 8 1,250 $1,413 ♦ Ceiling Fans ♦ Stainless Steel Appliances COMPARABLE PROPERTIES Ghent Apartments Portfolio | Pricing Detail Section FINANCING 1st LOAN PRICE Loan Amount $3,006,000 $4,008,000 Loan Type New FINANCIAL ANALYSIS 04 Interest Type 4.50% Amortization 30 Years Total Units FINANCIAL Year Due 2029 40 RETURNS CURRENT PRO FORMA Cap Rate 6.06% 7.78% GRM Rate 8.53 7.51 70

ANALYSIS Price/Unit Ghent Apartments Portfolio Cash-on-Cash 6.00% 12.86% $100,200 Debt Coverage Ratio 1.33 1.71 Rent Roll Summary Ghent Apartments Portfolio | Rent Roll Summary Pricing Detail Current Potential AVG AVERAGE AVERAGE MONTHLY AVERAGE AVERAGE MONTHLY UNIT TYPE UNITS RANGE Operating Statement SQFT RENT RENT/SF INCOME RENT RENT/SF INCOME 1 Bed 1 Bath 20 828 $800-$1,000 $903 $1.08 $18,059 $968 $1.17 $19,350 2 Bed 1 Bath 18 944 $850-$1,280 $1,023 $1.08 $18,418 $1,161 $1.23 $20,896 Cash Flow Statement 3 Bed 1 Bath 2 1,200 $1,250-$1,437 $1,344 $1.12 $2,687 $1,476 $1.23 $2,952 Totals/Wtd Avg 40 899 $979 $1.09 $39,164 $1,080 $1.20 $43,198

Gross Annualized $469,967 $518,376 Rents Ghent Apartments Portfolio | Operating Statement Ghent Apartments Portfolio | Notes

INCOME CURRENT YEAR 1 NOTES PER UNIT PER SF NOTES TO OPERATING STATEMENT Gross Potential Rent 518,376 533,927 [1] 13,348 14.85 Current Gross Potential Rent reflects actuals per the Rent Roll. Pro Forma Gross Potential Rent is based on [1] current market averages. Loss / Gain to Lease (48,409) 9.3% 0 0 0.00 FINANCIAL ANALYSIS Current Physical Vacancy reflects actuals per the rent roll. Pro Forma Physical Vacancy is a conservative Gross Current Rent 469,967 533,927 13,348 14.85 [2] assumption based on market averages. Physical Vacancy (14,099) 3.0% (26,696) 5.0% [2] (667) (0.74) [3] Current Bad Debt reflects actuals per the income statement. Bad Debt (4,800) 1.0% (10,679) 2.0% [3] (267) (0.30) Concession (4,800) 1.0% 0 [4] 0 0.00 [4] Current Concession is based on the current rent roll. Current Real Estate Taxes are based on actuals. Pro Forma Real Estate Taxes are based on estimated sales Total Vacancy ($23,699) 5.0% ($37,375) 7.0% ($934) ($1) [5] price and Norfolk City mill rate. Economic Occupancy 94.96% 93.00% Current Insurance costs reflect actuals per the income statement. Pro Forma Insurance costs are calculated Effective Gross Income $446,268 $496,552 $12,414 $13.81 [6] at $250 per unit. 72 Ghent Apartments Portfolio [7] Current and Pro Forma Utility costs reflect actuals per the income statement.

Ghent Apartments Portfolio EXPENSES CURRENT YEAR 1 NOTES PER UNIT PER SF Current Repairs and Maintenance costs reflect actuals per the income statement. Pro Forma Repairs and [8] 71 Real Estate Taxes 35,702 40,114 [5] 1,003 1.12 Maintenance costs are estimated at $550 per unit. Insurance 11,614 10,000 [6] 250 0.28 Current Contract Services costs reflect actuals per the income statement. Pro Forma Contract Services costs [9] Utilities - (Electric,Water, Sewer) 46,010 46,010 [7] 1,150 1.28 are calculated at $350 per unit. Repairs & Maintenance 51,954 22,000 [8] 550 0.61 [10] Current and Pro Forma Marketing and Advertising costs are calculated at $50 per unit. Contract Services 8,859 14,000 [9] 350 0.39 [11] Current and Pro Forma General & Administrative costs are calculated at $150 per unit. Marketing & Advertising 2,000 2,000 [10] 50 0.06 [12] Current and Pro Forma Operating Reserve costs are calculated at $250 per unit. General & Administrative 6,000 6,000 [11] 150 0.17 [13] Current and Pro Forma Management Fee expenses are calculated at 7%.

FINANCIAL ANALYSIS Operating Reserves 10,000 10,000 [12] 250 0.28 Management Fee 31,239 7.0% 34,759 7.0% [13] 869 0.97 Total Expenses $203,378 $184,883 $4,622 $5.14 Expenses as % of EGI 45.6% 37.2% Net Operating Income $242,891 $311,670 $7,792 $8.67 Ghent Apartments Portfolio | Operating Data

INCOME CURRENT YEAR 1

Gross Scheduled Rent $469,967 $533,927 FINANCIAL ANALYSIS Less: Vacancy/Deductions 5.0% $23,699 7.0% $37,375 Total Effective Rental Income $446,268 $496,552 Other Income $0 $0 Effective Gross Income $446,268 $496,552 Less: Expenses 45.6% $203,378 37.2% $184,883 Net Operating Income $242,891 $311,670 Cash Flow $242,891 $311,670 74 Ghent Apartments Portfolio Debt Service $182,772 $182,772 Ghent Apartments Portfolio 73 Net Cash Flow After Debt Service 6.00% $60,119 12.86% $128,898 Principal Reduction $48,494 $50,721 Total Return 10.84% $108,613 17.93% $179,620 FINANCIAL ANALYSIS Section HAMPTON ROADS 05 DEMOGRAPHICS

DEMOGRAPHIC 46.5% ANALYSIS 1,676,822 Total Population 53.5%

Area Information

Demographics $49,890 203,404 Median Household Income Number of Households City of Hampton Roads NORFOLK Overview Hampton Roads is recognized for its miles “With the Chesapeake Bay, Atlantic ocean of waterfronts and beaches, military pres- and countless rivers in our backyard, you ence, harbors, shipyards, and coal piers. MARKET OVERVIEW are never far from the water. Norfolk’s The metro is comprised of James, Glouces- thriving arts community welcomes you ter, Mathews, York and Isle of Wight coun- into its studios, galleries and up and down the streets of downtown, the NEON Arts ties in Virginia and Gates and Currituck District and beyond. If you’re looking for counties in North Carolina, as well as the world-class cuisine, look no further! From cities of Virginia Beach, Williamsburg, Ches- traditional Southern fare to a wide range apeake, Norfolk, Newport News, Hampton, of nouveau and international offerings 78

Poquoson, and Suffolk. Approximately 1.8 Ghent Apartments Portfolio Norfolk’s eateries offer something for million people reside in the market. everyone – and every appetite.” Ghent Apartments Portfolio 77 • Encompasses 66 square miles with 144 Military Concentration: It has the second NORFOLK largest concentration of military personnel miles of shoreline. VIRGINIA • Second most populous city in Virginia. in the U.S. with eight military installations in • Named Favorite American City for 2018. the market providing a large portion of jobs. • Selected as one of the Top 50 Places to Travel in 2017 in the world. Hospitatility and Tourism: Visitors are drawn POPULATION • Home to the world’s largest naval base to Williamsburg and the multiple beaches

MARKET OVERVIEW and the North American Headquarters for and resorts in the area that have activities NATO. for the whole family. 244,703 • Norfolk International Terminal is the largest intermodal center in the U.S. Skilled Labor Pool: Technical knowledge • Home to the USS Wisconsin battleship. learned in the military and the numerous • Ocean going cruise vessels regulary higher educational institutions helps to pro- dock at Half Moone Cruise and Celebration vide a highly educated and skilled labor center downtown. force. HAMPTON ROADS // Economy HAMPTON ROADS // Demographics SPORTS • The local economy is best known for tourism and defense, • Median home prices that are above the U.S. level contribute to a home- but advanced manufacturing, maritime and logistics, cy- ownership rate of 61 percent, which is slightly below the national rate of 64 bersecurity and biomedical technology are growing sec- percent. • The metro is projected to expand by 58,200 people through 2022, resulting tors. in the formation of 28,200 households during this period. • Fortune 500 headquarters include Norfolk Southern, Dol- • Approximately 29 percent of residents age 25 and older hold a bachelor’s lar Tree and Huntington Ingalls Industries. Other companies degree; of those residents, 11 percent also have earned a graduate or profes- headquartered locally include Gold Key PHR, Amerigroup, sional degree. Anthem and Stihl. • The large military presence includes , 2017 Population by Age Joint Expeditionary Base Little Creek-Fort Story, Naval Air ARTS & ENTERTAINMENT Station Oceana Dam Neck Annex, Joint Base Langley-Eustis 6% 19% 9% 28% 25% 13% Naval Shipyard and Coast Guard Base-Portsmouth. 0-4 YEARS 5-19 YEARS 20-24 YEARS 25-44 YEARS 45-64 YEARS 65+ YEARS

2017 2017 2017 2017 MEDIAN POPULATION: HOUSEHOLDS: MEDIAN AGE: HOUSEHOLD INCOME: Ghent Apartments Portfolio 79 1.8M 658K 35.5 $60,500 Growth Growth U.S. Median: U.S. Median: 2017-2022*: 2017-2022*: 3.3% 4.3% 37.8 $56,300 EDUCATION QUALITY OF LIFE

Known for its beaches and water recreation, the region has much to offer by way of

MARKET OVERVIEW outdoor activities and entertainment. Busch Gardens Williamsburg, Colonial Williams- burg, the USS Wisconsin and the Virginia Aquarium are prominent attractions that draw tourist and locals alike. Cultural activities are available at the Virginia Museum of Contemporary Art, Virginia Aquarium & Marine Science Center and Virginia Beach Amphitheater. Sports teams play at the Virginia Beach Sportsplex, and 7% 14% 11% 17% Scope Arena, while the Kingsmill Championship is held here as a part of the LPGA PROFESSIONAL & 21% TRADE, UTILITIES MANUFACTURING GOVERNMENT LEISURE & Tour. Universities include the College of William & Mary, Old Dominion University, Vir- BUSINESS SERVICES HOSPITALITY & TRANSPORTATION ginia Wesleyan College, Hampton University and . Offering Memorandum The Ghent Apartments Portfolio

Altay Uzun Justin Ferguson Vice President, Investments Investment Associate

Kyle Gross Shelby Jacobs Investment Associate Marketing Coordinator