500 SOUTH 900 EAST APARTMENTS 13 UNITS IN 500 SOUTH 900 EAST | SALT LAKE CITY, UT 84102

JASON WADSWORTH ANDREW WADSWORTH 801-230-3794 801-922-0662 [email protected] [email protected] TABLE OF CONTENTS

500 SOUTH 900 EAST FINANCIAL ANALYSIS

FINANCIAL ANALYSIS VIEW Financial Analysis 2 Notes to Proforma 3

PROPERTY INFO PROPERTY INFO PROPERTY Summary / Ratings 4 Neighborhood / Nearby Jobs 5

MAPS Transportation Map 6RKET OVERVIEW Job Density Map 7 Area Map 8

Parcel Map 9 MAPS

PHOTOS Aerial View 10-11 Unit Interior 12-15

COMPARABLE RENTS PHOTOS Comparable Rents Map 16-17 One Bedroom: Monthly Rents 18 One Bedroom: Rent Per Square Foot 19 Two Bedroom: Monthly Rents 20 Two Bedroom: Rent Per Square Foot 21 COMPARABLE RENTS Three Bedroom: Monthly Rents 22 Three Bedroom: Rent Pet Square Foot 23 Vacancy 24 Concessions 25 MARKET INFO

1 500 South 900 East, Salt Lake City

Annualized Annualized Avg Market Monthly Pro Forma Type % of Mix Unit SF Total SF Market Rent Rent / SF Proforma Avg Rent / SF Unit Mix Rent Market Rent Rent Roll Rent

13 One-Bed / One-Bath 100% 550 7,150 $950 $12,350 $148,200 $1.73 $1,133 $13,596 $2.06

Income In-Place Variance Pro Forma % of MKT Financing New Loan

Scheduled Market Rent $140,400 $36,348 $176,748 Interest Rate 5.00% FINANCIAL ANALYSIS ANALYSIS FINANCIAL Less: Loss to Lease ($2,400) $633 ($1,767) (1.0%) Amortization Years 30 Gross Potential Rent (GPR) $138,000 ($62,733) $174,981 % of GPR LTV 65% Less: Vacancy ($6,900) ($1,849) ($8,749) (5.0%) Loan Origination Fee 1%

Less: Concessions $0 $0 $0 0.0% Loan Amount $1,300,000 Less: Bad Debt / Delinquency ($690) ($185) ($875) (0.5%) Down Payment $713,000

Less: Non-Productive Units $0 $0 $0 Monthly Payment $6,979 Annual Payments $83,744 Net Rental Income $130,410 ($72,357) $165,357 Interest Only Monthly $5,417

PROPERTY INFO In-Place Variance Pro Forma $/Unit Per Yr

Plus: Fee Income $2,600 $9,100 $11,700 $900 Pricing Plus: RUBS Income $13,000 $260 $13,260 $1,020 Price $2,000,000 Plus: Media/Internet Income $0 $0 $0 $0 Price Per Unit $153,846 Plus: Other Income $0 $0 $0 $0 Price Per Square Foot Total Other Income $15,600 $9,360 $24,960 $1,920 $279.72

Total Operating Income $146,010 ($62,997) $190,317 MAPS

Expenses In-Place Variance Pro Forma

Administrative $1,950 $39 $1,989 $153

Advertising & Promotion $1,105 $22 $1,127 $87

Payroll $15,600 $312 $15,912 $1,224 Repairs & Maintenance $4,550 ($1,560) $2,990 $230 Turnover $2,600 ($325) $2,275 $175 Management Fee $5,840 $1,772 $7,613 $586 Utilities $13,000 $260 $13,260 $1,020 Media/Internet Expenses $0 $0 $0 $0 PHOTOS Contracted Services $1,300 $26 $1,326 $102 Real Estate Taxes $8,148 $815 $8,963 $689 Insurance $3,250 $65 $3,315 $255 Replacement Reserve $4,550 $0 $4,550 $350 Total Expenses $61,893 $1,426 $63,320 $4,871 Management Fee % 4.0% 4.0%

Net Operating Income $84,117 $42,880 $126,997 $9,769

Less Debt Service ($83,744) ($83,744)

Cash Flow $372 $42,880 $43,253

Total Out of Pocket $713,000 $804,000

Immediate CapEx for Higher Income $91,000 COMPARABLE RENTS COMPARABLE Cash on Cash Return 0.1% 5.4%

Cash on Cash Return (Interest Only) 2.7% 7.7%

Cap Rate 4.2% 6.1%

DCR 1.00 1.52 MARKET INFO MARKET

2 THE OPPORTUNITY FINANCIAL ANALYSIS The 500 South apartments (13 units) are part of Salt Lake City’s East Central district. The property sit just west of the University of and provides residents excellent access to both the University and Downtown Salt Lake via TRAX (lightrail) red line. The TRAX red line runs from the U of U all the way to Daybreak, Utah on the southwest end of the Salt Lake Valley. The red line’s 900 East Station is just a block from the property. Two renown shopping centers are within walking distance: Trolley Square and Trader Joe’s as well as the coveted 9th and 9th neighborhood with its eclectic mix of shops and entertainment.

There are Three Opportunities for potential investors looking to purchase the property: 1. The property features an outstanding location and provides investors with a rare Salt Lake opportu- nity. Utah is a high growth state and Salt Lake City shines as one of the most economically dynamic and INFO PROPERTY fastest growing markets in the nation. Investors can purchase the property and run it as is, allowing the property to appreciate as Salt Lake and the state of Utah continue to flourish. 2. By investing additional capital into the 13 units in renovations, potential investors can achieve higher rents to better compete with neighboring product. 3. The property also presents investors with a potential development opportunity. The existing units can be torn down and a new student housing or market rate building can be constructed.

NOTES TO PROFORMA MAPS InPlace column is an annualized snapshot of how the property will likely run under new ownership at cur- rent market conditions. We used the following methods and assumptions: • Scheduled Market Rent & Gross Potential Rent is based on a recent rent roll. • Vacancy, Concession, & Bad Debt are based on current market conditions • Expenses are based on current market conditions PHOTOS • Real Estate Taxes are based on the current tax bill. Utah is a non-disclosure tax state, and taxes do not increase at the time of sale.

Variance is the difference between Pro Forma and In-Place numbers

Pro Forma column represents an estimate for first year income and expenses for a new buyer after addi- tional renovation in approximately 12-24 months. Pro Forma is based on the following assumptions. COMPARABLE RENTS • 3.0% Rent Growth • Rent premium between approximately $100-$200 per unit after renovations at an estimated cost of approximately $7,000 per unit. • Real Estate Taxes will be increased 10% over the current tax bill. Although Utah is a non-disclosure state and taxes are not increased at time of sale, all multifamily properties are assessed regularly using an estimate income approach to value. Taxes will go up as this occurs.

Replacement Reserves have been normalized across all columns for easy comparison at $350 per unit. MARKET INFO Loan is a new agency loan at the current interest rate. We used a more conservative loan based on a fixed rate 10-year term. Currently two or three years of interest only financing is available to qualified buyers.

3 500 SOUTH 900 EAST FINANCIAL ANALYSIS ANALYSIS FINANCIAL

UNIT UNIT RENT TYPE RENT PROPERTY INFO PROPERTY SUMMARY MIX SF PER SF

UNITS 13 13 1/1 550 950 $1.73

BUILT 1978, 1963

BUILDINGS 3 MAPS CONSTRUCTION Wood Frame, Brick Exterior RATINGS

ROOF Pitched, Aluminum/Asphalt LOCATION A

METERING Gas: Sub-Metered BUILDING CONDITION B Electricity: Individually MARKETING WINDOW A- Water, Sewer, Trash: Master CURB APPEAL B- PHOTOS RENTABLE SF N/A ACCESS TO SERVICES A- ACREAGE 0.62 AMENITIES C+ DENSITY 20 Units Per Acre

PARCEL NO. 16053780010000; 01; 02 16053780051001; 03; 04

AMENITIES •Walkable to TRAX •Near Downtown and the COMPARABLE RENTS COMPARABLE •Easy access to Jobs, Shopping, and Dining •Select Upgraded Units •Washer/Dryer Hookups MARKET INFO MARKET

4 500 SOUTH 900 EAST FINANCIAL ANALYSIS

NEARBY JOBS

DOWNTOWN Over 260,000 jobs are in the SALT LAKE CITY immediate area and are easily accessed by bus ot TRAX.

CITY CREEK Approximately 2,000 jobs CENTER are located in world-class INFO PROPERTY fashion and dining destina- tion with over 100 stores and restaurants in a casual, pedes- trian-friendly environment. NEIGHBORHOOD UNIVERSITY OF NORTH 500 South , Multifamily UTAH

EAST Multifamily STATE STREET 10,000 commercial, retail

CORRIDOR and service jobs along MAPS SOUTH Multifamily State Street, a major north south thoroughfare. WEST 900 East, Multifamily I-15 CORRIDOR 25,000 light industrial jobs SHOPPING •Whole Foods along the east and west side •Smith’s (Kroger) frontage roads •Trader Joe’s SALT LAKE The airport supports approx- SCHOOLS •Bennion Elementary School INTERNATIONAL imately 35,300 full-time PHOTOS •Bryant Middle School AIRPORT jobs, generating $3.3 billion •East High School in total economic output to the state’s economy and is COLLEGE •University of Utah currently in the midst of a •Westminster College $3.6 billion redevelopment •Salt Lake Community College project creating over 23,900 COMPARABLE RENTS full-time jobs. HOSPITALS •Salt Lake Instacare •Salt Lake Regional GATEWAY MALL The Gateway Mall, a con- •Univeristy Hospital temporary and prestigious downtown open-air mall RECREATION •Eccless Stadium & Arena with over 100 national, re- •Hoogle Zoo gional, and local tenants. •Vivint Arena PRIMARY Part of the Intermountain TRANSPORTATION •TRAX Red Line CHILDREN’S Health Care (IHC) system, MARKET INFO •UTA Bus Route 209 HOSPITAL the hospital is adjacent to the University of Utah Hospital on the campus. It is Utah’s only children’s hospital and employs 2,900 people.

5 AREA MAP FINANCIAL ANALYSIS ANALYSIS FINANCIAL PROPERTY INFO

MAPS S PHOTOS COMPARABLE RENTS COMPARABLE

MARKET INFO MARKET S Subject Property

6 PARCEL MAP FINANCIAL ANALYSIS PROPERTY INFO PROPERTY

S MAPS PHOTOS COMPARABLE RENTS

PARCEL NO: 16053780010000 16053780021001 16053780021002 16053780051001

16053780051003 MARKET INFO 16053780051004

ACREAGE: 0.62 Acres

S Subject Property

7 TRANSPORTATION MAP FINANCIAL ANALYSIS ANALYSIS FINANCIAL

S PROPERTY INFO MAPS PHOTOS

Legend COMPARABLE RENTS COMPARABLE 701 TRAX Blue Line 703 TRAX Red Line 704 TRAX Green Line 750 FrontRunner S-Line

Route 209

MARKET INFO MARKET S Subject Property

8 JOB DENSITY MAP FINANCIAL ANALYSIS PROPERTY INFO PROPERTY MAPS

S PHOTOS COMPARABLE RENTS

Legend

5 - 2,299 Jobs/Sq.Mile 1 - 20 Jobs Analysis Section

5 Mile Radius MARKET INFO 2,300 - 9,184 Jobs/Sq.Mile 21 - 309 Jobs 9,185 - 20,657 Jobs/Sq.Mile 310 - 1,560 Jobs S Subject Property 20,658 - 36,721 Jobs/Sq.Mile 1,561 - 4,930 Jobs 36,722 - 57,374 Jobs/Sq.Mile 4,931 - 12,035 Jobs

9 AERIAL VIEW FINANCIAL ANALYSIS ANALYSIS FINANCIAL PROPERTY INFO

S MAPS PHOTOS

COMPARABLE RENTS COMPARABLE S MARKET INFO MARKET

10 AERIAL VIEW FINANCIAL ANALYSIS PROPERTY INFO PROPERTY MAPS

S PHOTOS COMPARABLE RENTS

S MARKET INFO

11 UNIT INTERIOR FINANCIAL ANALYSIS ANALYSIS FINANCIAL PROPERTY INFO MAPS PHOTOS COMPARABLE RENTS COMPARABLE MARKET INFO MARKET

12 UNIT INTERIOR FINANCIAL ANALYSIS PROPERTY INFO PROPERTY MAPS PHOTOS COMPARABLE RENTS MARKET INFO

13 UNIT INTERIOR FINANCIAL ANALYSIS ANALYSIS FINANCIAL PROPERTY INFO MAPS PHOTOS COMPARABLE RENTS COMPARABLE MARKET INFO MARKET

14 UNIT INTERIOR FINANCIAL ANALYSIS PROPERTY INFO PROPERTY MAPS PHOTOS COMPARABLE RENTS MARKET INFO

15 COMPARABLE RENTS MAP

# SUBJECT PROPERTY

# Comparable Property FINANCIAL ANALYSIS ANALYSIS FINANCIAL PROPERTY INFO 3 2

4 5 1 MAPS PHOTOS

1 - 500 SOUTH 900 EAST 2 - Liberty Crest 3 - Old Post Office 4 - Seven65 COMPARABLE RENTS COMPARABLE

5 - Landing MARKET INFO MARKET

16 COMPARABLE RENTS TERMINOLOGY FINANCIAL ANALYSIS

Unit Area Drive-By Access to Property Curb # Name Address City Units Built Type Monthly RPSF Amenities Size Location Window Services Condition Appeal

1 500 South 500 South 900 Salt Lake 13 196 3 M 0 $0 $0.00 A A- A- B B- C+ 900 East East City 2 Liberty Crest 150 South 200 East Salt Lake 176 2017 M 0 $0 $0.00 A A A A A A City

3 Old Post 777 East 200 South Salt Lake 13 1909 M 0 $0 $0.00 A A A- B+ A- C+ Office City

4 Seven65 Lofts 765 East 400 South Salt Lake 128 1986 M 0 $0 $0.00 A A A B+ B+ B+ City

5 The Landing 470 South 1300 Salt Lake 132 1950 M 0 $0 $0.00 A A A- C C+ C+ INFO PROPERTY (Charleston) East City

AREA LOCATION: In order for a property to score high in this category, the location creates a feeling of “I want to live in this neighborhood.” The location needs to be in an area of: (a) higher income households; (b) higher average price of homes; (c) newer or recently remodeled office or retail developments; and (d) the absence of deteriorating properties.

DRIVE-BY WINDOW: In order for a property to score high in this category, the property location will have: (a) a high number of cars drive by the site each day; (b) high visibility from a freeway; (c) easily found by a prospective resident; and (d) have an easy ingress and egress to the property. MAPS ACCESS TO SERVICES: In order for a property to score high in this category, the property would be located so that: (a) the residents have close access (less than a 5- to 10-minute drive) to shopping especially a major super- market, a dry cleaning store, and fast food restaurants; (b) convenient access (within 15 minutes) to regional shop- ping such as the “big box” merchants, and the regional malls; (c) easy access to major streets or freeway exchanges for commuters; (d) easy access to light rail stations or bus stops; and (e) easy access to churches and schools.

PROPERTY CONDITION: In order for a property to score high in this category, the condition of the property is such that: (a) there are no major deferred maintenance items (e.g.new roofs, new windows, or new parking lots); (b) floor coverings have been replaced regularly; (c) the interiors of the units (e.g. bathtub surrounds, kitchen cabinets, countertops, and appliances) are up-to-date; and (d) landscaping is manicured and groomed. PHOTOS

CURB APPEAL: In order for a property to score high in this category, the presentation of the property creates a feeling of “I want to live at this property.” Noticeable elements would include: (a) the entrance is attractive (e.g. monument sign is well-built, entry path is well-lit, and the flower garden is well-manicured); (b) the direction signs are easy to follow and attractive; (c) there are no rundown cars in the parking lot; (d) the balconies or patios are free from storage items; (e) landscaping is manicured with no noticeable weeds; (f) there is no trash or windblown debris on the property; and (g) the overall appearance is inviting and pleasant. COMPARABLE RENTS AMENITIES: In order for a property to score high in this category the apartment amenities would include such fea- tures as: each unit is well-designed, larger unit size, nine-foot ceilings, vaulted ceilings in top floor units, fireplaces, kitchen appliances are color coordinated and modern, washer dryers or washer / dryer connections, walk-in clos- ets, balconies, extra storage, and individual central air conditioning. Property amenities would include: a separate, fully equipped clubhouse containing such things as a business center, theatre room, recreation room, fitness center, swimming pool, basketball court; other common amenities would include covered parking, garages, direct-access garages, courtyards with children play areas, picnic or barbecues area, sand volleyball, mountain views, etc MARKET INFO

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1 ONE-BEDROOM: MONTHLY RENTS Monthly Rent $1,400

$1,250 FINANCIAL ANALYSIS ANALYSIS FINANCIAL

$1,100 PROPERTY INFO

$950

$800 MAPS 1 4 5 Avg 2 3

Subject Property Comparable Property Submarket Average

# Name City Avg SF Avg Monthly Avg $/Sq Ft Vacancy Concessions

1 500 South 900 East Salt Lake City 550 $950 $1.73 7.7% 0.0

PHOTOS 4 Seven65 Lofts Salt Lake City 490 $1,136 $2.32 1.6% 0.0

5 The Landing (Charleston) Salt Lake City 590 $1,147 $1.95 3.0% 0.3 Avg SUBMARKET AVERAGE 568 $1,190 $2.11 1.7% 0.1

2 Liberty Crest Salt Lake City 600 $1,297 $2.16 0.6% 0.0

3 Old Post Office Salt Lake City 853 $1,302 $1.53 0.0% 0.0 COMPARABLE RENTS COMPARABLE MARKET INFO MARKET

18 1 ONE-BEDROOM: RENT PER SQUARE FOOT

Rent Per Square Foot FINANCIAL ANALYSIS $2.40

$2.18 PROPERTY INFO PROPERTY

$1.95

$1.73 MAPS

$1.50 1 3 5 Avg 2 4

Subject Property Comparable Property Submarket Average

# Name City Avg SF Avg Monthly Avg $/Sq Ft Vacancy Concessions PHOTOS

1 500 South 900 East Salt Lake City 550 $950 $1.73 7.7% 0.0

3 Old Post Office Salt Lake City 528 $975 $1.85 0.0% 0.0 5 The Landing (Charleston) Salt Lake City 590 $1,147 $1.95 3.0% 0.3

Avg SUBMARKET AVERAGE 568 $1,190 $2.11 1.7% 0.1

2 Liberty Crest Salt Lake City 600 $1,297 $2.16 0.6% 0.0 COMPARABLE RENTS 4 Seven65 Lofts Salt Lake City 490 $1,136 $2.32 1.6% 0.0 MARKET INFO

2 19 VACANCY Vacancy 8.0%

FINANCIAL ANALYSIS ANALYSIS FINANCIAL 6.0%

4.0% PROPERTY INFO

2.0%

MAPS 0.0% 3 2 4 Avg 5 1

Subject Property Comparable Property Submarket Average

# Name City Avg SF Avg Monthly Avg $/Sq Ft Vacancy Concessions

3 Old Post Office Salt Lake City 853 $1,302 $1.53 0.0% 0.0 PHOTOS 2 Liberty Crest Salt Lake City 600 $1,297 $2.16 0.6% 0.0

4 Seven65 Lofts Salt Lake City 490 $1,136 $2.32 1.6% 0.0

Avg SUBMARKET AVERAGE 568 $1,190 $2.11 1.7% 0.1 5 The Landing (Charleston) Salt Lake City 590 $1,147 $1.95 3.0% 0.3

1 500 South 900 East Salt Lake City 550 $950 $1.73 7.7% 0.0 COMPARABLE RENTS COMPARABLE MARKET INFO MARKET

Concessions 20 1 CONCESSIONS

Concessions FINANCIAL ANALYSIS

1.0

0.8 PROPERTY INFO PROPERTY

0.5

0.3 MAPS

0.0 1 3 2 4 Avg 5

Subject Property Comparable Property Submarket Average PHOTOS # Name City Avg SF Avg Monthly Avg $/Sq Ft Vacancy Concessions

1 500 South 900 East Salt Lake City 550 $950 $1.73 7.7% 0.0 3 Old Post Office Salt Lake City 853 $1,302 $1.53 0.0% 0.0

2 Liberty Crest Salt Lake City 600 $1,297 $2.16 0.6% 0.0

4 Seven65 Lofts Salt Lake City 490 $1,136 $2.32 1.6% 0.0 COMPARABLE RENTS Avg SUBMARKET AVERAGE 568 $1,190 $2.11 1.7% 0.1

5 The Landing (Charleston) Salt Lake City 590 $1,147 $1.95 3.0% 0.3 MARKET INFO

21 2 SALT LAKE COUNTY

NEW UNITS DELIVERED

6,000

4,800

3,600 FINANCIAL ANALYSIS ANALYSIS FINANCIAL 2,400

1,200 Projected Projected Projected

2009 2010 2 011 2012 2013 2 014 2015 2016 2 017 2018 2 019 2020

2009 2010 2011 6,5002012 2013 NEW2014 UNITS2015 CONSTRUCTED2016 2017 IN2018 20182019 2020

2074 2272 848 1910 2,178 2,226 3,042 1,932 5,759

AVERAGE1 RENT

PROPERTY INFO Vacancy is tight across the Salt Lake Valley. Based on a survey of over 100 apartment communites, marketwide $1,250 average vacancy has dropped from 3.5% in Q3 2017 to 2.7% in Q3 2018. This is especialy impressive consider- $ 1,125 ing the record number of New Units being delivered— $1,000 approximately 5,750 last year and 6,500 this year.

$875

MAPS Strong in-migration and continued job growth are poised to maintain a high rental demand. Over the past year, Salt Lake County’s Employment has grown 2.5%, 2008 2009 2010 2 011 2012 2013 2 014 2015 2016 2 017 2018 more than double the national growth rate of 1.6%. 4% RENT GROWTH YEAR OVER YEAR Unemployment in Salt Lake remains low at just 2.9 2008 2009 AVERAGE2010 2011 2012 VACANCY2013 2014 2015 2016 2017 2018 percent. $849 $773 $766 $825 $868 $927 $964 $1,019 $1,102 $1,144 $1,205

10% A recent report commissioned by the Salt Lake Cham-

ber estimates that the number of dwellings built in Utah 7.5% between 2011 and 2017 was about 50,000 below the PHOTOS number of new households formed. 5%

The region’s booming economy and high demand for 2.5% housing has caused Rents to rise 4% year over year— an average anual increase of $61 per month. Nationally, 2008 2009 2010 2 011 2012 2013 2 014 2015 2016 2 017 2018 rents have grown 2.8% over the past year. VACANCY DOWN FROM 3.5% TO 2.7% YOY Concessions are offered only at properties currently 2008 2009AVERAGE2010 2011 CONCESSIONS2012 2013 2014 2015 2016 2017 2018 in lease-up; however, many new properties in the Salt 3.9% 7.07% 4.47% 3.61% 2.96% 4.07% 2.74% 2.03% 2.72% 3.46% 2.68%

Lake suburbs are not offering any concessions. 1.00 COMPARABLE RENTS COMPARABLE

Salt Lake City has been named the No. 1 city in the 0.75 country for having the most diverse job market. The

Salt Lake Market continues to shine among the most 0.50 economically dynamic and fastest growing regions in US. Forbes, CNBC, WalletHub, and the Milken nstitute 0.25 rank Salt Lake as one of the top metros in the nation Y-Axis is measured in equivalents of free months rent for creating jobs and sustaining economic growth. 2008 2009 2010 2 011 2012 2013 2 014 2015 2016 2 017 2018

MARKET INFO MARKET 0.1 MONTHS OF FREE RENT FOR NEW LEASES

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

0.20 0.30 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 22 DEMOGRAPHICS FINANCIAL ANALYSIS PROPERTY INFO PROPERTY MAPS PHOTOS

SUBJECT PROPERTY COMPARABLE RENTS

ECONOMY POPULATION

MEDIAN HOME VALUE $285,100 POPULATION 200,544 MEDIAN HOUSEHOLD INCOME $56,994 MEDIAN AGE 31.8 YEARS HOMEOWNERSHIP 48%

UNEMPLOYMENT 2.9% AVERAGE HOUSEHOLD SIZE 2.47 PEOPLE MARKET INFO JOB GROWTH 2.5% HIGH SCHOOL DEGREE 87.8% WAGE GROWTH 5.15% BACHELOR’S DEGREE 45.6%

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