The Tacoma Portfolio

140-Units Tacoma / Lakewood, $15,000,000 / 5.47% Cap Rate - Actual

ALADDIN TOWNHOMES

PACIFIC TERRACE I & II SANDMAN IV APARTMENTS

OFFERING MEMORANDUM The Tacoma Portfolio

Table of Contents

1. Offering Summary

2. The Properties • Overview • Highlights • Floor Plans • Site Aerial • Neighborhood Amenities

3. Financial Information • Scheduled Income • Expenses and Operating Data • Rent Comparables • Sales Comparables Exclusively offered by Tyler Stanek Arielle Dorman Dirk Stegeman 4. Market Overview Associate Vice President Associate Vice President Associate Vice President • Pierce County Overview [email protected] [email protected] [email protected] • Puget Sound Overview 253.722.1414 425.450.1100 253.722.1408

This information supplied herein is from sources we deem reliable. It is provided without any representation, warranty or guarantee, expressed or implied as to its accuracy. Prospective Buyer or Tenant should conduct an independent investigation and verification of all matters deemed to be material, including, but not limited to, statements of income and expenses. Consult your attorney, accountant, or other professional advisor.

This Offering Memorandum contains confidential information pertaining to the property known as The Tacoma Portfolio and is provided by Kidder Mathews for the sole purpose of evaluating recipient’s possible interest in acquiring the property.

Kiddermathews.com 01

Offering Summary

Tacoma Portfolio Offering Memorandum | Kidder Mathews 3 THE INVESTMENT OPPORTUNITY

TACOMA POSTED 10.6% RENT INCREASE (4TH HIGHEST IN NATION) FROM MARCH 2016-2017

NOT ENOUGH CONSTRUCTION (APARTMENT OR HOME) TO MEET POPULATION GROWTH

TACOMA AREA IS A BEDROOM COMMUNITY FOR AIR, , BOEING, , EXPEDIA, EXPEDITORS, , , REI, , AND WEYERHAUSER

CLOSE IN TACOMA / INTERSTATE 5 LOCATION

TACOMA AREA VACANCY AT 2.8%

VALUE ADD OPPORTUNITY AND RENT GROWTH THROUGH MODEST INTERIOR IMPROVEMENTS

Tacoma Portfolio Offering Memorandum | Kidder Mathews 4 Offering Summary EXECUTIVE SUMMARY

The Tacoma Portfolio is a 140 unit value-add portfolio consisting of 3 The property features ample parking for residents, 13 leased garages, eight properties. One of the portfolios greatest attributes is its proximity to jobs. community laundry rooms and low density of 20.91 units per acre. Each The main gate to JBLM, the largest military installation west of the Mississippi unit includes an oven/range, frost-free refrigerator, dishwasher, garbage and the second largest employer in Washington State, is just a few exits disposal and vinyl double pane insulated windows. away from the portfolio and accounts for 57,000 jobs. Two major health systems, Multicare Health System and CHI Franciscan Health are centered in Aladdin Townhomes Tacoma and together employ 14,000 people. The combined Port of Tacoma Aladdin is a 32-unit community located in Tacoma, Washington. Built in and Port of (Northwest Seaport Alliance) support 48,100 jobs. The 1973, the property sits on 0.67 acres, encompassing a total rentable area Tacoma area is a bedroom community to other large area employers and of 37,120 SF and features four, two-story buildings. In the last 6 months, notable companies such as Amazon, Boeing, Costco, , Aladdin upgrades consist of new vinyl double pane windows and sliding Nordstrom, Paccar, REI, Starbucks, and Weyerhauser. Boeing is the largest doors, new mansard roofs, and exterior paint. Aladdin offers 31 two- employer in the Puget Sound and employs 82,000 people regionally. bedroom townhome units and 1 two-bedroom flat with a property average of 1,160 SF per unit. In addition to jobs, The Tacoma Portfolio is close to down town Tacoma and the Port of Tacoma. The is less than 5 miles away and Each unit contains a range/oven, refrigerator, dishwasher, disposal, and anchored by Nordstrom, Macy’s, JC Penney, and Sears with virtually all other stacked washer/dryer, private deck or patio (30 of 32), and double pane significant national retailers located near the Tacoma Mall area. Seattle- vinyl windows. The community is located in close proximity to I-5 with Tacoma International Airport and Seattle CBD are located approximately 27 convenient access to major employers and has a parking ratio of over 2 and 33 miles, north respectively. The Tacoma Portfolio lies next to Interstate stalls per unit of open parking, 56 stalls and 10 carports. 5 which links the Puget Sound market to Oregon and along with and Mexico and it is critical to the region, state, and national Pacific Terrace I & II economy. It is the busiest roadway in Western Washington. Pacific Terrace I & II is a 30-unit, two property located in Tacoma, Washington. The two properties sit on 0.74 acres with a total rentable area Sandman IV Apartments of 17,820 SF and features four, garden-style/low rise buildings with flat Sandman IV is a 78-unit, garden-style apartment community located in roofs. Pacific Terrace I & II offers and ideal mix of 23 one-bedroom and Lakewood, Washington. Built in 1963, the property consists of nine, two- 7 two-bedroom units and a unit average of 594 SF per unit. Some units story buildings encompassing a total rentable are of 54,334 SF with mansard have territorial views or Commencement Bay views. Unit amenities include roofs. In the last 15 months, Sandman IV upgrades consist of new vinyl range/oven and refrigerators. Community amenities include two laundry double pane windows and sliding doors, updated electrical panels, and new rooms. septic tanks. Sandman IV offers a unit mix of 1 studio, 52 one-bedroom, 24 two-bedroom, and 1 three-bedroom units with a property average of 697 SF unit.

Tacoma Portfolio Offering Memorandum | Kidder Mathews 5 The Market PROPERTY INFORMATION The hub of the Pierce County market consists of four cities: Tacoma, Lakewood, University Place and Puyallup/Fife. The Pierce County Price $15,000,000 population is estimated at 831,928 for 2014. According to Puget Sound Current/Pro Forma Cap Rate 5.47% / 7.70% Regional Council, the population of Tacoma grew by 3,800 people or 1.9% in 2016. The King County border is just 10 miles north, the largest county Current/Pro Forma GRM 9.9 / 8.1 in Washington State with a population estimated at 2.08 Million in 2014. Current/Pro Forma Total Operating Income $1,506,258 / $1,854,277 According to rental firm RentCafe, Tacoma posted the fourth highest rent increase in the nation of 10.6% from March 2016 to March 2017, Current/Pro Forma Expenses with Reserves $685,247 / $694,313 the full article can be read at www.thenewstribune.com/news/business/ article146923124.html. Dupre + Scott report that Lakewood’s market 2017 Current/Pro Forma NOI $821,010 / $1,159,964 vacancy was 2.9% with a 5 year average of 4% and a 29% rent growth since 2013. Net Rentable SF 109,248 SF

Local Economy Average Unit Size 780 SF

The Tacoma Portfolio location allows for easy access to a diversified array Current/Pro Forma Average Monthly Rent $817 / $1,001 of employment centers such as the Port of Tacoma, the Kent Valley’s ever- growing industrial market, Seattle-Tacoma Airport, Downtown Tacoma, Current/Pro Forma Average Rent/SF $1.05 / $1.28 JBLM, the rapidly expanding Fife/Puyallup industrial market, DuPont and the Fredrickson Industrial park. Notable companies and organizations located within these employment centers include the Boeing Company which has facilities in both Fredrickson and the Kent Valley, , REI, the - Tacoma, MultiCare Health System, one of the largest healthcare providers in the nation, Franciscan Health System, Amazon, and State Farm Insurance who over the last 2 years have hired an additional 1,400 individuals. Other major employers include public and private school systems, hospitals, and state, county and municipal government organizations. Employment diversity provides a hedge against downturns and future job growth appears positive. A recent study commissioned by the State Department of Transportation concluded that the planned completion of the State Route - 167 freeway from Puyallup to the Port of Tacoma will contribute to an additional 79,000 new jobs. Planning and design work for the freeway are in process and funding is a priority agenda item.

Tacoma Portfolio Offering Memorandum | Kidder Mathews 6 02

The Properties

SANDMAN IV APARTMENTS Overview Highlights Aerials

ALADDIN TOWNHOMES Overview Highlights Floor Plans Aerials

PACIFIC TERRACE I & II Overview Highlights Floor Plans Aerials

Tacoma Portfolio Offering Memorandum | Kidder Mathews 7 Sandman IV Apartments PROPERTY SUMMARY Address 10102 Sales Rd S, Lakewood, WA PROPERTY OVERVIEW Number of Units 78 Units Sandman IV is a 78-unit residential community located in Lakewood, Washington that underwent capital improvements over the last 12 months: Age 1964 new vinyl double pane windows and sliding doors, updated electrical Number of Buildings Nine, two-story garden-style residential buildings panels, and new septic tanks. Residents enjoy open floor plans averaging

697 SF. Unit types consist of studio, one bedroom/one bath, two bedroom/ Wood frame construction with mostly pitched composition one bath, two bedroom/one half bath, and three bedroom/one half bath. Construction shingle roof covering, and new, vinyl, double-pane, insulated The property is well constructed with enhanced sound proofing, large windows and new sliding glass doors with fresh air vents double-pane insulated windows, mostly pitched roofs with composition shingles, and wood-frame construction. The property has nine, two-story Parcel Number 031906-1100 residential buildings with open parking available along with 13 leased garages. Land Area 3.73 AC / 162,479 SF

Density 20.91 units / acre Community Amenities Sandman IV offers its residents community amenities such as high speed 2017 Levy Rate $14.97 per thousand internet and cable access, 13 garages (for rent), and 8 laundry rooms. Utility Providers Power - Lakeview Light and Power Unit Amenities Sewer - Septic System Water - Lakewood Water Service Each of the residences in Sandman IV were designed with superior quality finishes. All apartments have new vinyl, double-pane insulated windows and sliding glass doors. The kitchens come with a standard oven/range, FLOOR PLAN SIZE AVG CURRENT RENT PRO FORMA refrigerator, dishwasher, and disposal. In addition, the units are equipped with electric hot water heaters, balcony or patio, and eight-foot ceilings. Studio 500 SF $675 / $1.35 PSF $750 / $1.50 PSF

1 Bed / 1 Bath 667 SF $724 / $1.08 PSF $875 / $1.31 PSF

2 Bed / 1 Bath 800 SF $796 / $0.99 PSF $1,095 / $1.37 PSF

2 Bed / 1.5 Bath 750 SF $820 / $1.09 PSF $1,100 / $1.47 PSF

3 Bed / 1.5 Bath 850 SF $935 / $1.10 PSF $1,200 / $1.41 PSF

Total / Avgs 697 SF $775 / $1.08 PSF $946 / $1.36 PSF

Monthly Rent $58,795 $73,820

Total Scheduled Rent $705,539 $885,840

Tacoma Portfolio Offering Memorandum | Kidder Mathews 8 PROPERTY HIGHLIGHTS Unit Amenities Spacious, efficient floor plans averaging 697 SF

Five unique floor plans ranging from a studio (500 SF), 1x1’s (667 SF), 2x1’s (800 SF), 2x1.5’s (750 SF), and a 3x1.5 (850 SF)

All kitchens are equipped with oven/range, refrigerator, dishwasher, and garbage disposal

Most apartment homes have 8-foot ceilings

Private decks or patios

Double-pane, insulated vinyl windows and sliding glass doors

Community Amenities Ample open parking and 13 garages

High speed internet and cable access

On-site trash and recycling area

Eight laundry rooms

Low density / 20.91 units per acre

Prime Pivot Point Location Minutes to Downtown Tacoma and next to Interstate-5 and Highway 512

Close proximity to major employers, retailers and health care providers

Major retailers include: Target, Safeway, Nordstrom’s, Macy’s, and Fred Meyer

Appeals to broad resident base due to Interstate 5 corridor location

Easy access to efficient intercity transit system

Tacoma Portfolio Offering Memorandum | Kidder Mathews 9 SITE AERIAL

Sales Rd S SANDMAN IV APARTMENTS

Tacoma Portfolio Offering Memorandum | Kidder Mathews 10 Aladdin Townhomes PROPERTY SUMMARY 9009, 9021, 9031 S Hosmer Address 1841 S 92nd St PPROPERTY OVERVIEW Number of Units 32 Units Aladdin Townhomes is a 32-unit residential community located in Tacoma, Washington that underwent capital improvements over the last 6 months: Age 1967-1973 new vinyl double pane windows and sliding doors, new mansard roofs, and new exterior building paint. The property has four, two-story residential Number of Buildings Four, two-story residential buildings buildings with enhanced sound proofing, large double-pane insulated windows, and mansard roofs. Wood frame construction with mansard roofs, and new, Construction vinyl, double-pane, windows, and new sliding glass doors Community Amenities 4530600110, 4530600120, 4530600130, 4530600140, Aladdin Townhomes offer its residents a parking ratio over 2 stalls per unit Parcel Number consisting of 56 open parking spaces and 10 carports. 4530600150, 4530600160, 4530600171

Land Area 1.67 AC / 74,052 SF Unit Amenities

Each of the residences in Aladdin Townhomes were designed for efficiency. Density 19.16 units / acre All apartments have new vinyl, double-pane insulated windows and sliding glass doors. The kitchens come with a standard oven/range combination, 2017 Levy Rate $16.07 per thousand refrigerator, dishwasher, and disposal. In addition, the units are equipped Utility Providers Power - Tacoma Public Utilities with electric hot water heaters, balcony/patio with storage, stacked Sewer - Tacoma Public Utilities washer/dryer, and eight-foot ceilings. Water - Tacoma Public Utilities

AVG CURRENT FLOOR PLAN SIZE PRO FORMA RENT

2 Bed / 1 Bath 900 SF $900 / $1.00 PSF $1,000 / $1.11 PSF (flat)

2 Bed / 1.5 Bath 1,168 SF $1,023 / $0.88 PSF $1,200 / $1.03 PSF (townhouse)

Monthly Rent $33,130 $39,800

Total Scheduled Rent $397,560 $477,600

Tacoma Portfolio Offering Memorandum | Kidder Mathews 11 PROPERTY HIGHLIGHTS

Unit Amenities All kitchens are equipped with oven/range combination, refrigerator/freezer, dishwasher, garbage disposal

Stacked washer/dryer

Most apartment homes have 8-foot ceilings

Private decks or patios (30 of 32 units) with storage

Double-pane, insulated vinyl windows and sliding glass doors

Vinyl wood plank floors in approximately 20% of units

Community Amenities 56 stalls of open parking and 10 carports

On-site trash and recycling area

Close to Pierce Transit bus stop

Prime Pivot Point Location Minutes to Downtown Tacoma and next to Interstate-5 and Highway 512

Close proximity to major employers, retailers and health care providers

Major retailers include: Costco, Nordstrom, Fred Meyers, Walmart

Appeals to broad resident base due to Interstate 5 corridor location

Easy access to Pierce Transit stop (3 blocks) via Hosmer

Tacoma Portfolio Offering Memorandum | Kidder Mathews 12 FLOOR PLANS

CLICK HERE TO VIEW VIRTUAL TOUR

2 Bedroom / 1.5 Bath | 1177 SF

Tacoma Portfolio Offering Memorandum | Kidder Mathews 13 SITE AERIAL

S 90th St

ALADDIN TOWNHOMES S Hosmer St

S 92nd St

Tacoma Portfolio Offering Memorandum | Kidder Mathews 14 Pacific Terrace I & II PROPERTY SUMMARY Pacific Terrace I: 3202 Pacific Ave, Tacoma, WA Address PROPERTY OVERVIEW Pacific Terrace II: 212 S Wright Ave, Tacoma, WA

Pacific Terrace I & II is a 30-unit multifamily setting located just at the crest Number of Units 30 Units of the hill on Pacific Avenue from Downtown Tacoma. Residents enjoy 1 bedroom and 1 bathroom or 2 bedroom and 1 bathroom floor plans Age 1975 averaging 594 SF. The properties consist of four, two-story buildings. Pacific Terrace I: One building Number of Buildings Pacific Terrace II: Three buildings Community Amenities Pacific Terrace I & II offer its residents a parking ratio 0.76 stalls per unit Construction Wood frame construction with convenient and adjacent street parking. Residents enjoy a laundry Parcel Number 208212-0050; 208312-0010; 208312-0020 room at each location. Pierce Transit bus stop is close by. Land Area 0.7 AC / 30,492 SF Unit Amenities Each of the residences in Pacific Terrace were designed for efficiency. Density 22.47 units / acre Kitchens come with a standard oven/range, refrigerator/freezer. 2017 Levy Rate $16.07 per thousand Drivablity & Convenience Utility Providers Power - Tacoma Public Utilities The properties have Pacific Avenue exposure. They are within minutes Sewer - Tacoma Public Utilities of Walgreens, Safeway, Pierce Tranist Bus Station, Sounder Train and Water - Tacoma Public Utilities Downtown Tacoma. Interstate 5 can be accessed in minutes by three different ramps.

AVG CURRENT FLOOR PLAN SIZE PRO FORMA RENT

1 Bed / 1 Bath 538 SF $714 / $1.31 PSF $850 / $1.58 PSF

2 Bed / 1 Bath 776 SF $825 / $1.06 PSF $1,000 / $1.29 PSF

Total / Avgs 594 SF $740 / $1.25 PSF $855 / $1.49 PSF

Monthly Rent $22,465 $26,550

Total Scheduled Rent $269,579 $318,600

Tacoma Portfolio Offering Memorandum | Kidder Mathews 15 PROPERTY HIGHLIGHTS Unit Amenities Efficient floor 1 bed x 1 bath and 2 bed x 1 bath averaging 594 SF

All kitchens are equipped with oven/range combination, refrigerator/freezer

Most apartment homes have 8-foot ceilings

Vinyl wood plank floors in approximately 20% of units

Community Amenities 23 stalls of on street parking with convenient street parking adjacent to the property.

On-site trash and recycling area

Close to Pierce Transit bus stop

Two laundry rooms, one at each property

Prime Pivot Point Location Minutes to Downtown Tacoma and next to Interstate-5 (Hwy 16 and Hwy 167)

Close proximity to major employers, retailers and health care providers

Major retailers include: Costco, Safeway, Walgreens, Nordstrom

Appeals to broad resident base due to Interstate 5 corridor location

Easy access to Pierce Transit bus stop and bus station, Link Light Rail, and Sounder Train

Pacific Terrace is in the path of Tacoma’s southward expansion and revitalization

Tacoma Portfolio Offering Memorandum | Kidder Mathews 16 FLOOR PLANS

CLICK HERE TO VIEW VIRTUAL TOUR

1 Bedroom / 1 Bath | 538 SF

Tacoma Portfolio Offering Memorandum | Kidder Mathews 17 SITE AERIAL

PACIFIC TERRACE II

Pacific Ave S Wright Ave PACIFIC TERRACE I

Tacoma Portfolio Offering Memorandum | Kidder Mathews 18 NEIGHBORING AMENITIES

GIG HARBOR STADIUM HS PORT OF TACOMA TACOMA THEA FOSS WATERWAY

ST. JOSEPH ALLENMORE HOSPITAL TACOMA ART MUSEUM HOSPITAL & MUSEUM OF GLASS UW TACOMA

BELLARMINE LEMAY CAR MUSEUM FIFE PREP HS & TACOMA DOME

CHENEY STADIUM PACIFIC TERRACE I&II FIRCREST

TACOMA MALL

MT TAHOMA HS

PUYALLUP LAKEWOOD ALADDIN TOWNHOMES

LAKEWOOD LAKE STEILACOOM INDUSTRIAL PARK PIERCE SANDMAN IV APARTMENTS COUNTY TRANSIT LAKEWOOD TOWNE CENTER

ST. CLAIR HOSPITAL

JBLM GRAVELLY LAKE MCCHORD AFB

Tacoma Portfolio Offering Memorandum | Kidder Mathews 19 REGIONAL AERIAL

PORT OF TACOMA

GIG HARBOR FEDERAL WAY

DOWNTOWN TACOMA

FIRCREST SUMNER

TACOMA MALL PACIFIC TERRACE I & II

ALADDIN TOWNHOMES

PUYALLUP LAKEWOOD TOWNE CENTER STEILACOOM

LAKEWOOD SANDMAN IV APARTMENTS

JBLM MCCHORD AFB

Tacoma Portfolio Offering Memorandum | Kidder Mathews 20 03

Financial Information

Scheduled Income Expenses and Operating Data Rent Comparables Sale Comparables

Tacoma Portfolio Offering Memorandum | Kidder Mathews 21 Financial Information SCHEDULED INCOME*

MONTHLY ANNUAL MONTHLY MONTHLY MONTHLY ANNUAL PRO AVG CURRENT MONTHLY UNITS TYPE TOTAL SF CURRENT CURRENT PRO FORMA PRO FORMA PRO FORMA FORMA SF AVG RENT/ RENT RENT RENT/SF RENT/UNIT RENT RENT RENT/SF UNIT

Sandman IV

1 Studio 500 500 $675 $675 $8,100 $1.35 $750 $750 $9,000 $1.50

52 1 Bed/1 Bath 667 34,684 $724 $37,645 $451,739 $1.09 $875 $45,500 $546,000 $1.31

6 2 Bed/1 Bath 800 4,800 $796 $4,775 $57,300 $0.99 $1,095 $6,570 $78,840 $1.37

18 2 Bed/1.5 Bath 750 13,500 $820 $14,765 $177,180 $1.09 $1,100 $19,800 $237,600 $1.47

1 3 Bed/1.5 Bath 850 850 $935 $935 $11,220 $1.10 $1,200 $1,200 $14,400 $1.41

Alladin Townhomes

1 2 Bed/1 Bath (Flat) 900 900 $900 $900 $10,800 $1.00 $1,050 $1,050 $12,600 $1.17

2 Bed/1.5 Bath 31 1168 36,208 $1,040 $32,230 $386,761 $0.89 $1,250 $38,750 $465,000 $1.07 (TH)

Pacific Terrace I & II

23 1 Bed/1 Bath 538 12,374 $726 $16,690 $200,279 $1.35 $850 $19,550 $234,600 $1.58

7 2 Bed/1 Bath 776 5,432 $825 $5,775 $69,300 $1.06 $1,000 $7,000 $84,000 $1.29

Total

140 780 109,248 $817 $114,390 $1,372,679 $1.05 $1,001 $140,170 $1,682,040 $1.28 *CURRENT RENTS BASED ON SEPTEMBER 2017 RENT ROLL ANNUALIZED WITH PRO FORMA RENTS REFLECTING MARKET RENTS.

Tacoma Portfolio Offering Memorandum | Kidder Mathews 22 EXPENSES & OPERATING DATA

YTD ANNUALIZED YTD ANNUALIZED OTHER INCOME PRO FORMA EXPENSES PRO FORMA JAN - SEPT 2017 JAN - SEPT 2017 Wages / Salaries / Benefits / Utility Reimbursment $149,423 $207,515 $99,063 $102,035 Taxes Late/NSF Fees $5,973 $6,153 Repairs/Maintenance/TO $62,291 $64,160 Credit Fees $4,000 $4,120 Landscaping $21,713 $22,365 Pet Fees $333 $343 Utilities $218,437 $224,990 Move in Fees $0 $0 Marketing $4,619 $4,758 Month to Month Premium $1,200 $1,236 Administrative $39,703 $40,894 Forfeit Deposit $8,686 $8,946 Insurance $30,926 $31,854 Bad Debt Recovery $450 $464 Management Fee $56,896 $58,603 Garge Rental $15,280 $15,738 Property Taxes $123,597 $127,305 Laundry/Vending Income $13,703 $14,114 Total Expenses $657,247 $676,965 Miscellaneous $3,165 $3,260 Reserves ($200 / unit) $28,000 $28,000 Total Other Income $202,213 $261,889 Total Expenses w/ Reserves $685,247 $704,965

NET OPERATING YTD ANNUALIZED Expenses Per Unit w/ Reserves $4,895 $5,035 PRO FORMA INCOME JAN - SEPT 2017 Expenses Per SF w/ Reserves $6.27 $6.45 Schedule Gross Rent $1,372,679 $1,682,040 Notes Less Vacancy (5%) ($68,634) ($84,102) EXPENSES - PRO FORMA: Based on current YTD annualized (Jan - Sept Less Concessions $0 $0 2017) with a 3% annual growth. Effective Gross Rent $1,304,045 $1,597,938 PROPERTY TAX: Based on 2017 county assessors rate. Plus Total Other Income $202,213 $261,889 OTHER INCOME - PRO FORMA: This income based on YTD annualized Total Operating Income $1,506,258 $1,859,827 (Jan - Sept 2017) with a 3% annual growth, except utility reimbursement estimated at 95% consumption. Less Total Expenses ($685,247) ($704,965) OTHER INCOME - YTD ANNUALIZED (JAN - SEPT 2017): Net Operating Income $821,010 $1,154,862 Utility reimbursement - Based on September 2017 billing for utility reimbursement, annualized

Tacoma Portfolio Offering Memorandum | Kidder Mathews 23 RENT COMPARABLES

PROPERTY ADDRESS AVG UNIT SF # OF UNITS YEAR BUILT AVG RENT RENT / SF The Tacoma Portfolio Various 780 140 Various $812 $1.04 Midtown 15 1801 S 15th St, Tacoma 618 68 1964 $1,065 $1.72 Pacific Pointe 1801 S 84th St, Tacoma 796 106 1968 $1,169 $1.47 Notch 8 9210 S Hosmer St, Tacoma 765 126 1986 $1,147 $1.50 Aero 9314 S Ash St, Tacoma 843 116 1982 $1,220 $1.45 Altitude 104 2201 104th St S, Tacoma 759 120 1989 $1,146 $1.51 AVERAGE 756 107 1978 $1,149 $1.53

RENT / SF

$2.00

$1.80

$1.60

$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

$0.00

Aero Notch 8 Average The TacomaPortfolio Midtown15 Altitude 104 Pacific Pointe

Tacoma Portfolio Offering Memorandum | Kidder Mathews 24 RECENT RENT COMPARABLES

THE TACOMA PORTFOLIO 1 MIDTOWN 15 2 PACIFIC POINTE Lakewood / Tacoma 1801 S 15th St 1801 S 84th St Tacoma Tacoma

No. Of Units 140 No. Of Units 68 No. Of Units 106

Year Built Various Year Built 1964 Year Built 1968

Avg SF 780 Avg SF 618 Avg SF 796

Avg Rent $811 Avg Rent $1,065 Avg Rent $1,169

Avg Rent/SF $1.04 Avg Rent/SF $1.72 Avg Rent/SF $1.47

3 NOTCH 8 4 AERO APARTMENTS 5 ALTITUDE 104 9210 S Hosmer St 9314 S. Ash St 2201 104th St S Tacoma Tacoma Tacoma

No. Of Units 126 No. Of Units 116 No. Of Units 120

Year Built 1986 Year Built 1982 Year Built 1989

Avg SF 765 Avg SF 843 Avg SF 759

Avg Rent $1,147 Avg Rent $1,220 Avg Rent $1,146

Avg Rent/SF $1.50 Avg Rent/SF $1.45 Avg Rent/SF $1.51

Tacoma Portfolio Offering Memorandum | Kidder Mathews 25 RENT COMPARABLES MAP

PORT OF TACOMA

E 11th St

6th Ave

1

PACIFIC TERRACE I&II

Valley Ave E

S Tacoma Way Tacoma S ALADDIN TOWNHOMES

2

Pipeline Rd E 3 4

5

SANDMAN IV APARTMENTS

128th St E

Tacoma Portfolio Offering Memorandum | Kidder Mathews 26 SALE COMPARABLES

SALE SALE PRICE PRICE # OF YEAR CAP PROPERTY ADDRESS DATE PRICE / UNIT / SF UNITS BUILT RATE The Tacoma Portfolio Various TBD $16,000,000 $114,286 $146 140 Various 5.09% Chinook Apartments 723 N J St, Tacoma Apr-16 $1,430,000 $130,000 $182 11 1967 5.50% The Miller 204 Tacoma Ave S, Tacoma Aug-17 $6,400,000 $206,452 $200 31 1907 5.75% Shasta Apartments 1545 Fawcett Ave, Tacoma Apr-17 $1,320,000 $132,000 $251 10 1919 5.36% Wapato Creek Village 2335 58th Ave E, Fife Mar-17 $12,850,000 $110,775 $159 116 1980 3.30% Whispering Pines 7715 Douglas St, Lakewood Aug-17 $1,950,000 $114,706 $141 17 1985 5.50% Vanessa View Estates 5608 112th St E, Puyallup Jul-17 $7,404,634 $205,684 $137 36 2002 5.00% AVERAGE $5,225,722 $149,936 $178 37 1960 5.07%

PRICE / SF

$300

$250

$200

$150

$100

$50

$0

Shasta Chinook Pines Average The Miller Village Estates The TacomaPortfolio Whispering Apartments ApartmentsWapato Creek Vanessa View

Tacoma Portfolio Offering Memorandum | Kidder Mathews 27 SALE COMPARABLES

THE TACOMA PORTFOLIO 1 CHINOOK APARTMENTS 2 THE MILLER Lakewood / Tacoma 723 N J St, Tacoma 204 Tacoma S, Tacoma

No. Of Units 140 No. Of Units 11 No. Of Units 31 Year Built Various Year Built 1967 Year Built 1907 Sale Date TBD Sale Date April 2016 Sale Date August 2017 Sale Price $16,000,000 Sale Price $1,430,000 Sale Price $6,400,000 Price/Unit $114,705 Price/Unit $130,000 Price/Unit $206,452 Price/SF $146 Price/SF $182 Price/SF $200 Cap Rate 5.09% Cap Rate 5.5% Cap Rate 5.25%

3 SHASTA APARTMENTS 4 WAPATO CREEK VILLAGE 5 WHISPERING PINES 1545 Fawcett Ave, Tacoma 2335 58th Ave E, Fife 7715 Douglas St, Lakewood

No. Of Units 10 No. Of Units 116 No. Of Units 17 Year Built 1919 Year Built 1980 Year Built 1985 Sale Date April 2017 Sale Date March 2017 Sale Date August 2017 Sale Price $1,320,000 Sale Price $12,850,000 Sale Price $1,950,000 Price/Unit $132,000 Price/Unit $110,775 Price/Unit $119,118 Price/SF $251 Price/SF $159 Price/SF $146 Cap Rate 5.36% Cap Rate 3.3% Cap Rate 5.5%

6 VANESSA VIEW ESTATES 5608 112th St E, Puyallup

No. Of Units 36 Year Built 2002 Sale Date July 2017 Sale Price $7,404,634 Price/Unit $205,684 Price/SF $137 Cap Rate 5%

Tacoma Portfolio Offering Memorandum | Kidder Mathews 28 SALE COMPARABLES MAP

PORT OF TACOMA

1 2 E 11th St 6th Ave

3

4

Valley Ave E PACIFIC TERRACE I&II

5 ALADDIN TOWNHOMES

S Tacoma Way Tacoma S Pipeline Rd E

SANDMAN IV APARTMENTS 6

128th St E

Tacoma Portfolio Offering Memorandum | Kidder Mathews 29 04

Market Overview

Pierce County Overview Puget Sound Overview

Tacoma Portfolio Offering Memorandum | Kidder Mathews 30 Market Overview PIERCE COUNTY OVERVIEW In addition to being the home of the second largest city in Washington, States. JBLM employs over 40,000 active, National Guard and Army Tacoma, Pierce County has been one of the fastest growing counties in the Reserve service members, and approximately 15,000 civilian workers. state of Washington since the 1960’s, and has consistently exceeded the The base supports 60,000 family members and nearly 30,000 retirees state’s overall rate of growth. Pierce County supports manufacturers such living within 50 miles, 65% of whom live in Pierce County. JBLM has a as Boeing, Milgard Manufacturing, James Hardie Building Products, Toray significant impact on the economy of Pierce County, providing a stable Composites (America), Inc., and Medallion Foods. Recreational Equipment, base of customers for trade, as well as providing a talented pool of Inc. (REI), Whirlpool, and Costco also have major distribution centers here. trained workers who are transitioning out of the military and into the local State Farm Insurance has a regional headquarters in Pierce County, and workforce. innovation thrives at the research divisions of Intel and Madigan Army Medical. Port of Tacoma

The majority of population increase has been due to the migration of The Port of Tacoma is an independent seaport located on more than 2,400 people into the County. This continued migration is the result of Pierce acres of land that are used for shipping terminal activity, warehousing, County’s relatively stable economy and exceptional quality of life. The low- distributing and manufacturing. The port plays the largest international cost living, award-winning education, and lifestyle opportunities combined trade role in the handling between nine and thirteen with the area’s competitive cost of doing business, create an outstanding million tons of cargo and more than $25 billion in commerce. Major environment for businesses and residents to work, play, and live. imports include automobiles, electronics, and toys; major exports include grain, forest products, and agricultural products. Based on tonnage, the Economy port’s largest export is grain (corn and soybeans) which comes into the port by rail from the Midwest. Two words best describe the business climate found in Pierce County’s economy: emerging opportunity. In part, this is because of the county’s In 2015, the Port of Tacoma’s top trading partner, based on two-way strategic location at the mid-point between the major metropolitan areas of trade value, was China / Hong Kong. China / Hong Kong was also the the central Puget Sound to the north, and Portland, Oregon to the south. top partner ranked by volume imported and value imported. Japan was The presence of the military exerts a stabilizing influence on the Pierce the top partner ranked by volume exported and value exported. The County economy and employs nearly 57,000 residents of Pierce County. top commodities exported, by value, were cereals and grains. The top commodities imported, by value, were vehicles and parts, followed by In the last several years, the county has noticed quite a dramatic shift in industrial machinery and electronics. the regional diversification of its workforce. Professional services rank as one of the leading components of industry. These include a solid anchor of The port is among the top ten largest container ports in North America. Intel, multiple web design firms, and legal and consulting companies. Containers hold everything from computers and lawn furniture, to apples and frozen meat. More than 70 percent of the containers imported through Impacts of Joint Base Lewis-McChord the port move by rail to markets in the Midwest and East Coast. The port is served by the BNSF Railway and Union Pacific railroads. Shortline rail Pierce County is home to Joint Base Lewis-McChord (JBLM), the largest service is provided by Tacoma Rail, which is owned by the City of Tacoma. military installation on the West Coast, and the 4th largest in the United

Tacoma Portfolio Offering Memorandum | Kidder Mathews 31 U.S. Oil and Refining operates an oil refinery in the Port of Tacoma. Oil tankers bring crude oil, which is refined into a variety of products, including JP-8 jet fuel for McChord Field Air Force Base. Port activities are related to more than 43,000 jobs in Pierce County, and 113,000 jobs in Washington State.

Recreation Opportunities Puget Sound bays and outlets offer an abundance of year-round outdoor recreational activities such as sailing, fishing, canoeing, diving, and kayaking. Numerous trails for biking and hiking are conveniently located 120 miles away at Mt. St. Helens, at Mt. Rainier which is 81 miles away, and 74 miles away at Ocean Shores. PGA level golf courses and many other fine public and private courses are also around the area. Entertainment attractions include several of the Northwest’s largest gaming casinos.

Art and Culture

Pierce County is home to some of the most active communities in Washington. Puyallup is home to numerous fairs, festivals, museums, galleries, and antique districts. Artists and performers showcase their talents through live theater at Broadway Center for the Performing Arts, Northwest Sinfonietta, Tacoma Art Museum, Tacoma Opera, and The Tacoma Symphony Orchestra.

Health Care Hub

Pierce County is home to six top-notch full-service hospitals, Good Samaritan Hospital and Rehab Center, Madigan Army Medical Center, St. Joseph Medical Center, Saint Clare Hospital, St. Anthony Hospital and Tacoma General Allenmore Hospital. The area’s health care hub has hundreds of clinical trials underway and a medical community committed to research and collaboration with local universities and other research institutions. Numerous specialized medical clinics are located throughout the region.

Tacoma Portfolio Offering Memorandum | Kidder Mathews 32 Education TOP EMPLOYERS

The quality of education in Pierce County is a major draw to the South RANK COMPANIES EMPLOYEES Puget Sound area. Pierce County students consistently show educational 1 Joint Base Lewis-McChord 57,120 attainment levels exceeding both state and national averages. Thirty-five 2 Local Public School Districts (K-12) 13,408 percent of Pierce County residents typically hold bachelor or graduate 3 Multicare Health System 8,247 degrees, and more than ninety percent attain a high school or GED diploma. Pierce County students also consistently achieve SAT scores 4 State of Washington 6,844 above state and national averages. 5 Franciscan Health System 6,099 6 Pierce County Government 3,001 PACIFIC LUTHERAN UNIVERSITY 7 Fred Meyer 2,560 Pacific Lutheran University is a private institution that was founded in 8 City of Tacoma 2,138 1890. It has a total undergraduate enrollment of 3,195 students. Pacific 9 State Farm Insurance 2,050 Lutheran University’s ranking in the 2017 edition of Best Colleges in 10 Emerald Queen Casino 2,026 Regional Universities (West), was fifteenth. 11 Boeing 1,750 12 Safeway Stores 1,512 UNIVERSITY OF PUGET SOUND 13 Tacoma Public Utilities 1,417 University of Puget Sound is a private institution that was founded in 14 Walmart 1,287 1888. It has a total undergraduate enrollment of 2,651. University of 15 U.S. Postal Service 1,214 Puget Sound’s ranking in the 2017 edition of Best Colleges is National 16 Costco 1,205 Liberal Arts Colleges, was seventieth. 17 Puyallup Tribe of Indians 1,099 PIERCE COLLEGE 18 Milgard Manufacturing, Inc 1,061 19 Comcast Cable 1,046 Pierce College is designated an institutional member of Service members 20 Longshore Labor Union 1,026 Opportunity Colleges (SOC), a group of more than 1,700 colleges and 21 Pierce Transit 884 universities providing voluntary postsecondary education to members 22 Pierce College 830 of the military throughout the world. Pierce College provides education programs at Joint Base Lewis-McChord. These programs are specifically 23 Target 772 designed to serve the needs of active-duty military personnel, their 24 Group Health Cooperative 742 family members, VA benefit recipients, and civilians in the community. 25 Home Depot 706 Located on two campuses in Pierce County, current student enrollment is 26 Amazon 700 approximately 23,855. 27 University of Puget Sound 693 28 Tacoma Community College 688 29 Sears Roebuck 672 30 Davita 660 TOTAL 123,457

Tacoma Portfolio Offering Memorandum | Kidder Mathews 33 PUGET SOUND OVERVIEW the end of the forecast period. The Puget Sound Regional Council is estimating the area’s population to be 4,513,589 in 2030, an 14.4 percent Greater Seattle Area increase.

Seattle is the largest city in the four-county metropolitan area known The Seattle-Tacoma-Bellevue metropolitan area (MSA) is clearly the as the . The area’s other major metropolitan cities economic engine of Washington State. The MSA ranks 13th among 362 include Bellevue, Tacoma, Everett, and Bremerton. Surrounding these are markets nationwide in terms of effective buying income (EBI or after-tax, growing cities that include Kirkland, Redmond, Kent, Renton, Bothell, and discretionary spending power). The median household EBI in the Greater Issaquah. Seattle Area is 20 percent higher than the national median.

Climate Approximately 56 percent of the population is in the prime workforce age of 25-64. Residents are among the most highly educated in the nation, The temperate climate lets residents and visitors enjoy the outdoors with more than 35 percent having at least a bachelor’s degree and one- year-round. High temperatures in July average just 75 degrees, while low third of those holding a graduate or professional degree. temperature drop below freezing an average of only 15 days per year. The rainfall keeps the region’s vegetation a lush green, however, it rarely rains Long-term forecasts call for the Greater Seattle area to resume its historic heavily and the total average rainfall is 35 inches, less than strong growth patterns. The Puget Sound Regional Council expects the or Miami. area to add approximately 855,000 new jobs by 2040.

Outdoor Activities, Culture, Sports The Seattle area’s natural beauty and mild climate encourage year-round activities such as hiking in the Olympic or Cascade Mountains, kayaking on Lake Union, or cycling on any of the many rails-to-trails paths.

Art and culture are also driving forces in the region. There are 34 museums, 30 performing arts centers, and—at last count—at least 29 professional theatre companies.

Professional sports teams include major league football and baseball as well as soccer and hockey. The region’s professional football club, The Seattle Sounders FC, won the MLS Cup in 2016. In addition, there is thoroughbred racing, minor league baseball, and the University of Washington Huskies to cheer on.

Demographics The region consists of approximately 3,944,507 (2015, U.S. Census Bureau) residents in King, Snohomish, Pierce, and Kitsap counties. The current figure represents a 6.6 percent increase over the 2010 Census. Positive population growth in the region is expected to continue through

Tacoma Portfolio Offering Memorandum | Kidder Mathews 34 Education Washington State is home to six public four-year colleges and universities, 34 public community and technical colleges, and more than 300 private colleges, universities, career, and vocational schools.

The University of Washington continues to gain increased national recognition. According to the America’s Best Colleges, U.S. News & World Report in 2016, the UW was ranked 54 among all national universities, tied with Ohio State University-Columbus. The U.S. News 2016 graduate school rankings show many of the UW’s graduate programs among the best in the nation. The medical school ranked first among all schools in the country for primary care and the School of Nursing also retained its top ranking for the 30th year. Overall the UW School of Medicine ranked twelfth among research medical schools and first among public medical schools. The graduate program in computer science ranked sixth and the spur lines that span the area, making it possible to deliver almost any type college of education graduate program was ninth. of load. Outside of Puget Sound and across the state, there are over 4,000 Seattle University is a Jesuit university situated on 48 acres in Seattle’s miles of operable track. First Hill and Capitol Hill neighborhoods. The school was founded in 1891 Truck transportation in Washington is made possible by over 3,700 and is the largest independent university in the Pacific Northwest. The interstate trucking companies, including common carrier and contract university has a total enrollment of 7,400 students of which 63 percent are companies. The State ranks among the top 10 states in general freight undergraduates. Seattle University employs 1,400 faculty and staff. The tonnage carried by trucks intrastate. The competition results in favorable U.S. News 2014 rankings place Seattle University eighth among the top negotiated freight rates. universities in the West that offer a full range of masters and undergraduate programs. All regional communities are accessible from Seattle over an efficient, well-planned freeway system. The average commute between Seattle Transportation and outlying cities and suburbs is 23 minutes (non-peak) and 45 minutes King County has a well-developed transportation system which provides (peak). The region’s highway network is anchored by three main highways: links to all parts of the country and world. Seattle’s port is closer to the U.S. Interstate 5 which runs north-to-south from , British main trading partners in Asia than any other major U.S. port and the Columbia to San Diego, California region’s distribution networks move goods efficiently inland. Interstate 90 which runs west-to-east connecting Seattle with New York The region’s multi-modal transportation system includes two transcontinental railroads, nationwide trucking capacity, three interstate Interstate 405 (Washington) is a 30-mile stretch of freeway that bypasses highways, a ferry system, a world-class port, and an international airport. Seattle east of Lake Washington. I-405 runs from Lynnwood in the north to Tukwila in the south. The Burlington Northern Santa Fe (BNSF) and Unions Pacific Southern Pacific (UPSP) railroad serve the greater Seattle area. Both railroads have

Tacoma Portfolio Offering Memorandum | Kidder Mathews 35 hours of flying time closer to Pacific Asia than Southern California airports. In addition, trans-polar routing enables Sea-Tac to rival East Coast cities like New York in flight times to European capitals.

Economy While the greater Seattle economy includes a broad range of companies, local business and civic leaders have identified key innovative, knowledge- based industries that drive our economy and are critical to the region’s current and future prosperity.

Aerospace Clean Technology Information Technology Over 23 million passengers annually ride the Washington State Department of Transportation’s Ferry System, the largest in the country and the third Interactive Media Life Sciences largest in the world. This system transports over 10 million vehicles a year, more than any ferry system in the world. The fleet has 20 auto-passenger Aerospace ferries and two passenger-only ferries. The DOT operates 20 terminals and The Puget Sound region has a proud history and a strong future as a operates on nine routes. leader in the aerospace industry. In 2013, aerospace supported more than 136,100 jobs (over 8,000 engineers) in the region and includes over 650 The Port of Seattle has world-class facilities and relative proximity to Asia; companies, making the area the largest commercial aviation center in the the port is the fastest route for cargo to and from America’s heartland. The country. transit time from port cities in Asia to Seattle is eight days, which is 30 hours less than through Southern California ports. The Seattle-Tacoma- The largest employer is Boeing Commercial Airplanes which is Everett port region is the third largest container complex in the country, headquartered in Renton about 15 minutes south of . smaller only than New York / New Jersey and Los Angeles / Long Beach. The region is home to final assembly operations for the 737, 747, 767, It is the 8th largest US port in 2014 in terms of TEU’s and cargo activity 777, and 787 aircraft. In March, 2016 Boeing had 80,000 employees in the supports more than 48,000 jobs. The region’s ports serve not only the Puget Sound region. Pacific Northwest, but also the Midwest, East Coast, and Canada. 2014 marked a strong recovery is the region’s port activity. Seattle-Tacoma grew 8.6 percent in terms of cargo volume from 2013. Marine cargo operations also generated $138.1 billion in total economic activity. That accounts for about one-third of Washington state’s gross domestic product. The figure includes revenue generated by port-related businesses as well as wages paid to people holding direct jobs.

In 2016, 45.7 million passenger and 366,000 metric tons of air cargo passed though Sea-Tac airport. Passenger levels increased eight percent from 2015 and the volume ranked the airport as the 9th busiest in the U.S. Because of the state’s strategic geographic location, Sea-Tac is one to two

Tacoma Portfolio Offering Memorandum | Kidder Mathews 36 Clean Technology

Analysts predict a boom in clean technologies The Washington Clean Technology Alliance Top Puget Sound amid an oncoming energy crunch. The (WCTA) was established in 2007 to take full Area Companies alternative-energy industry’s revenues are advantage of the opportunities presented Amazon.com projected to quadruple to $226 billion by by this emerging sector and to ensure AT&T Wireless 2019, according to a report by Clean Edge, a Washington’s continued leadership. Portland-based market-research firm. Information Technology Berlex Laboratories There are more than 400 clean technology Boeing companies located in region employing more Many of the most well-known names in the than 21,000 people. There is a 64 percent software and information technology industry Children’s Hospital greater concentration of clean technology, or are located in the Great Seattle area. The Costco “green,” jobs in the Seattle area than the U.S. established companies include Microsoft, Expedia, Inc. average. Amazon, , T-Mobile, RealNetworks, Group Health Cooperative Expedia, and several others. Statewide, the clean technology industry Macy’s accounted for more than 62,000 jobs in the The strong base of businesses has created Microsoft sectors of energy efficiency, renewable energy, the largest employment cluster in the MultiCare Health System reducing pollution and pollution cleanup. The region, supporting nearly 110,000 jobs. The sectors of wind, solar, biomass, wave / tidal Greater Seattle area has several world- Nintendo and geothermal energy currently employ more leading strengths in the IT sector. The Nordstrom than 17,000. Washington State has long State of Washington is the largest employer Paccar, Inc. of software publishing workers in the US. supported clean technology and has the largest Providence Health Care coordinated hydro-electric system in the world, Washington ranks first in the country in the REI providing 73 percent of the state’s electrical creation of new software companies. power. Safeway Starbucks Swedish Health Services Symetra Financial T-Mobile The Kroger Company University of Washington Virginia Mason Medical Center Weyerhaeuser

Tacoma Portfolio Offering Memorandum | Kidder Mathews 37 Microsoft is the second largest employer in the state of Washington. of four city blocks totaling approximately three million square feet. Tech In addition to the nearly 42,940 employees in the region, the company companies require approximately 250 square feet per employee. Therefore historically has had an estimated 3.4 implied employment multiplier. they plan to house an additional 10,000 employees upon completion of As a result, the company currently also supports nearly 98,000 indirect this Amazon campus. In addition, Amazon opened a 1,000,000-square- jobs in the area. Microsoft has also greatly impacted the region through foot distribution center in Kent and DuPont. next generation companies. Since Microsoft’s founding, over 250 companies have been spun off through investment and development or The rich and deep pool of talent has led other industry leading IT from former Microsoft employees. companies such as Google to establish the area as an important location for growth. In the Greater Seattle area, Google has a complex of new Amazon continued its strong employment growth, adding over 12,000 buildings in Kirkland and offices in the Fremont neighborhood of Seattle. A employees worldwide last year, an expansion of more than 42 percent. local manager has indicated that at least 100 positions will be added to the The company doesn’t release detailed employment information for the 700 employees already working in the two locations. The local engineers region; however, recent local leasing activity indicates many of the new are working on the high priority projects such as the Chrome browser and and planned hires will be based in the Seattle area. operation systems and Google Talk.

Amazon leased approximately 460,000 square feet at the 1918 Eighth Interactive Media office tower in Downtown Seattle. This lease is in addition to the 1.7 million-square-foot headquarters in South Lake Union which is apparently The Puget Sound is an undisputed global leader in Interactive Media already near capacity. They are currently under construction on the first development. Starting with Cyan’s PC games of the nineties, Myst and Riven, to Valve’s Half Life and Portal, and Bungie’s Halo trilogy, the history of the area is strong. With Microsoft, Nintendo, and RealNetworks in the region, along with over 150 noteworthy game-technology companies, the Greater Seattle area can claim to be of the top three game-development centers in the world.

Industry leaders such as Warner Bros. Interactive, Gas Powered Games, NCSoft, and Sony Online Entertainment have offices here. Over the last few years, an industry task force gathered and collaborated with public and private sector leaders to develop the Washington Interactive Media Program—the first of its kind in the nation. The program is designed to promote, nurture, and grow the video game industry in the area.

Tacoma Portfolio Offering Memorandum | Kidder Mathews 38 Life Sciences The Foundation opened its new campus at 500 5th Avenue N in June 2011. The 12-acre Gates campus reinforces the area’s comeback, while The life science industry in Greater Seattle includes, but is not limited adding a more buttoned-down sensibility. A pair of curved office buildings, to, biotechnology companies, medical device companies, research a reception pavilion, and a 1,000 car parking structure anchor three institutions, and global health organizations. The industry employs corners of the site and may be joined by a third office building in the future. approximately 22,000 individuals. The strongest industry association is the Construction costs for this 640,000-square-foot complex totaled $500 Washington Biotechnology and Biomedical Association (WBBA) to which million, housing 1,116 employees. over 500 local companies belong. The growth of this sector in Washington State is reflected in the fact that the WBBA added 70 new members in The South Lake Union biotechnology area, near both the Foundation and 2010. The overall industry is estimated to generate nearly $7 billion in the University, houses The Fred Hutchinson Cancer Research Center, the annual revenues. Institute for Systems Biology, the Pacific Northwest National Laboratory (Seattle office), Amgen’s Helix Campus on Elliot Bay, the Allen Institute In 2005, Washington State created the Life Sciences Discovery Fund to for Brain Science, the Pacific Northwest Research Institute, the Infectious support the life science industry as a $350 million commitment to research Disease Research Institute, PATH, the Seattle Biomedical Research over a 10-year period. Institute, and the Benaroya Research Institute at Virginia Mason. With a current endowment of $37 billion, the Bill and Melinda Gates The distinct healthcare industry which includes hospitals, healthcare Foundation is also a major supporter of the area’s life science companies. products and services, training, and research, accounts for 96,000 Recent funding helped the University of Washington move the jobs in Seattle and annual revenue of $10 billion. Collaboration among Departments of Genome Sciences and Bioengineering into a new, shared professionals in healthcare, life sciences and information technology has facility and helped establish a Department of Global Health. led to advances in bioinformatics and health informatics.

Tacoma Portfolio Offering Memorandum | Kidder Mathews 39 Tyler Stanek Kidder Mathews Associate Vice President [email protected] 253.722.1414

Arielle Dorman Kidder Mathews Associate Vice President [email protected] 425.450.1100

Dirk Stegeman Kidder Mathews Associate Vice President [email protected] 253.722.1408

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