225 East 700 North | Provo, 84606 Offering Memorandum UNIVERSITY PARK APARTMENTS

Rawley Nielsen Mark Jensen Darren Nielsen Colliers International 1 1 9 1 1 1 1 1 1 66 111 .. .. .. 111 1 1 9 3 Table of Contents

> Executive Summary...... 3

> Market Overview...... 9

> Financial Overview...... 16

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 2 UNIVERSITY PARK APARTMENTS Offering Memorandum > Executive Summary

COLLIERS INTERNATIONAL EXECUTIVE SUMMARY

Executive Summary

> UNIVERSITY PARK APARTMENTS > AMENITIES

University Park Apartments, located at 225 E. 700 • 1/2 Block to Campus N., Provo, Utah, is one of ’s closest off-campus student housing • Located directly on the new UVX bus route properties. Located only 75 yards from the • Large, Secured Rentable Storage Rooms southern border of BYU’s campus, in the historic and student-dense Joaquin Neighborhood, • Free High-Speed Internet (50 Mbps) University Park continuously enjoys full tenant • Free Cable TV occupancy, due to its unbeatable next-door proximity to campus. • Central Air Conditioning

This 2-story, all-brick property, built in 1971 and • Gas Heat renovated in 2006, consists of 72 beds in twelve 3X2 units. Additionally, connected to the building • Two Refrigerators per Apartment is a 2 story, reinforced concrete, parking structure, • Microwave Ovens and Dish Washers which provides ample tenant parking. • On-site Laundry facilities Provo, Utah was named the #1 strongest economy in the nation and enjoys a robust rental housing • Barbecue and Picnic area market. With its location just steps away from incredible outdoor recreation, popular restaurants • Clean and Well Maintained Units and a wide variety of fun and enjoyable community • Covered Parking locations and events, it has contributed to BYU becoming a destination for students from across • All Utilities Included except Electricity the world. University Park has 100% occupancy the overall off-campus vacancy rate at BYU is 1.6%.

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 4 EXECUTIVE SUMMARY

Investment Overview

> UNIVERSITY PARK APARTMENTS BYU ranked fourth on the Milken Institute’s 2017 index Purchase $3,395,000 of the best universities for technology transfer, in part Brigham Young University resides in Provo, Utah. With Price: ($47,153/bed) criteria including job and wage growth, high-tech GDP due to its success creating startup firms. The university growth, and the number of high-tech industries in the fosters an entrepreneurial culture, offering attractive Cap Rate 5.87% city, Provo is the city with the #1 strongest economy in incentives for faculty to commercialize research, and (Market Rents): the country (Milken, 2018). Provo/Orem has been in the supporting student ventures through the Rollins Center Cap Rate Top-3 every year for five years, thanks to the continuous for Entrepreneurship and Technology. 6.26% job growth in the professional, scientific, and technical (Post Renovation): This booming economy and the central role the Brigham services sector. 225 East 700 North Young University plays in it, work together to make Address: Provo, Utah 84606 Provo was named the #2 city driving the future Roman Gardens a highly valuable investment. On a (Business Insider, 2015). In 2015, jobs in the Provo area campus where single students are required to live Year Built: 1971 grew at the fastest pace of any town in the United within the boundary of BYU approved housing, there are States (CNN, 2016). With an unemployment rate of only limited options for where students can live. University 2.7%, Provo has been recognized as the #1 city for Park has a prime position as one of the best options Property Type: Men’s Student Housing career opportunities (Fortune, 2015) and top in the available. nation for well-being (Gallup, 2015). Unit Count: 12 Units As tech companies such as Adobe, , Ebay, Ancestry.com, , Domo, and many others have Beds: 72 Beds seen the major value of being located so close to BYU, the prestige of the largest private university in the 3 Bed X 2 Bath Floor Plans nation has continued to grow. In 2016, incoming (2 Students Per Room) freshman accepted to BYU had an average GPA of 3.85, an average ACT score of 29, and an average SAT score Lot Size: 0.39 AC (16,988 Sq Ft) of 1280. The maturity and talent of the student body, along with the high-quality of life in the region, has Surface Level: 20 Stalls Parking: continued to attract prominent companies to Utah Underground: 11 Stalls County, earning the region the name “The Silicon Parcel Slopes.” 050820007 Number:

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 5 EXECUTIVE SUMMARY

Location Overview

Primary Pedestrian Entrances To Campus

PAID PARKING PERMIT-ONLY

PAID PARKING PERMIT-ONLY SITE JOAQUIN STATION (UVX) NEW: Express (UVX) BUS EVERY 6 MINUTES Bus Line -- Free For Students)

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 6 EXECUTIVE SUMMARY

Location Overview: Bus System

UNIVERSITY PARK APARTMENTS: > ARTICLE: PERFECT LOCATION GETS BETTER STUDENTS EMBRACE UVX AS KEY The Utah Valley Express bus system is brand new, TRANSIT TOOL (THE DAILY UNIVERSE, 9/18/2018) just recently beginning service on August 13, 2018. It has already been a gamechanger for A new high-capacity bus rapid transit system called the Stevenson said she became aware UTA services were students at BYU and UVU, allowing them to Utah Valley Express is a key part of student life in free to BYU students through an Instagram post. She access campus, shopping, and social experiences Provo and Orem this fall. said she now uses UVX occasionally to go shopping. without the need of a car--all for free. With According to , UVX is meant to Ewerton Barroso, a 24-year-old student at Provo University Park uniquely located on 700 North connect FrontRunner train stations with key locations in language center Internexus, said he uses UVX for his Utah Valley. Designed to increase urban mobility and daily commute, carrying his bicycle on the bus with within 1 short block of a UVX stop, the value of provide more travel options, UVX uses buses with him. He said UVX works more effectively than the this already perfectly situated property has been dedicated lanes and traffic signal priority to transport bus rapid transit systems in his hometown of Manaus, made even better. commuters. Brazil, though UVX could do more to move quickly through traffic. UVX began operating on Aug. 13, and students from BYU and UVU have already come to rely on the Though neither Tanner nor Stevenson said they have system to get around. UVX will be free to use for the access to other forms of transportation, the UVX next three years, according to Utah Transit Authority. system is also useful to students with vehicles. The line connects the Provo and Orem FrontRunner SITE JOAQUIN STATION (UVX) Daniel McPherson, a junior studying physics at BYU, BUS EVERY 6 MINUTES train stations, wrapping to BYU and UVU along the has access to a car, but said he uses UVX daily in way. tandem with the older bus system. Still, McPherson Citing the bus system’s reliability and frequent stops, said he uses UVX to save gas and share a car with his students ride UVX for everything from daily commutes wife. to Walmart trips. UVX is particularly helpful for Grace Green, a freshman at UVU, owns a car but said students who have limited access to other > CAR-FREE DIRECT ACCESS TO: she uses UVX for her daily commute so she does not transportation. have to deal with campus parking. She said the timing • Lavell Edwards Football Stadium “It’s my go-to method for going off campus,” said of the buses is sometimes inconvenient, but is generally • University Place Mall BYU freshman Ashton Tanner, who is studying not a problem. • Trader Joes biology. Though Tanner said she accidentally left the bus at an incorrect stop on the first day of classes According to the Utah Transit Authority, UVX will have • Cinemark Theater this semester, she now finds UVX straightforward to up to 18 buses on the road at a time serving 18 stations, • Costco use and has made UVX part of her daily routine. every six minutes during heavy commute hours of the • Abundant Retail Along University Parkway day, 10 minutes throughout the rest of the day and One of Tanner’s roommates, Emma Stevenson, also a 15–60 minutes in the early and late hours of the day. • freshman compared UVX with Provo’s older bus lines • Orem Transit Station (Frontrunner) and called UVX “the easiest to figure out.” She also • Much more praised the frequency with which buses arrive at stops.

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 7 Photo Gallery

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 8 UNIVERSITY PARK APARTMENTS Offering Memorandum > Market Overview

COLLIERS INTERNATIONAL MARKET SUMMARY

BYU Overview: Facts and Figures

> STUDENT ENROLLMENT RANKINGS • 33,517: total daytime students • #1 Top colleges in the West for student engage- • 30,693: undergraduate students ment (Wall Street Journal) • 2,824: graduate students • #2 MBA value for money (Financial Times) • 52% male; 48% female • #2 Graduate accounting program (TaxTalent) • #3 Graduates with the least debt (U.S. News & > ACADEMICS World Report) • 179 undergraduate majors • #3 Undergraduate accounting program (U.S. • 107 undergraduate minors News & World Report) • 62 master’s programs • #3 Undergraduate entrepreneurship program • 26 doctoral programs (Entrepreneur) • #4 Best universities for technology transfer > STUDENT DEMOGRAPHICS (Milken Institute) • 96%: United States • #5 Best colleges for education majors (Niche) • 4%: International • #5 Graduates who go on to earn doctorates • 105 Countries represented (National Opinion Research Center) • 50 States represented • #5 Graduate entrepreneurship program (Entre- • 35%: Utah preneur) • 12%: California • #11 Best value school (U.S. News & World • 5%: Idaho Report) • 5%: Arizona • #13 U.S. employability (Times Higher Educa- • 5%: Texas tion) • #18 Undergrad business school programs > FRESHMAN PROFILE (Bloomberg BusinessWeek) • 13,707: applicants • #19 MBA program (Forbes) • 53.4%: admittance rate • #19 Best colleges for nursing (Niche) • 5,440: total new freshmen • #20 Best law school (Alabama Law Review) • 29.5: average ACT score • 3.86: average high school GPA

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 10 MARKET SUMMARY

BYU Off-Campus Housing Overview

> BYU STUDENT HOUSING All single undergraduate students attending BYU, who are not living with their parents, are required to live in BYU approved housing (unless they are specifically excused by BYU for special circumstances). Students from the other local colleges, including Utah Valley University with a current enrollment of around 40,000, are allowed to live in BYU approved housing. BYU approved student housing is one of the most popular options for UVU students.

In 2007, BYU contracted the “approved housing boundary” to a significantly reduced radius around the BYU campus (see map). This new boundary eliminated about 10% of the approved student housing units.

University Park is within the approved housing bounary. This boundary reduces the number of available approved units for BYU students. This reduction in housing units has correlated directly to an increased occupancy and rental demand for units within the approved boundary

> WHO CAN LIVE IN BYU OFF-CAMPUS HOUSING? Students who attend the institutions listed below are the only tenants who can live in BYU Contracted Housing • BYU (Provo Campus) • Utah Valley University SITE • Acaydia School of Aesthetics • American Institute of Medical and Dental Technology • Aveda Institutes Provo • Nomen-Global Language Centers • Paul Mitchell The School • Provo College • Renaissance Academe De Hair Design • Selnate International School • Stevens Henager College

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 11 MARKET SUMMARY

BYU Off-Campus Housing Overview

Average Shared Room Rent—BYU (2007-2018) $350

$325 Historical Fall/Winter BYU Vacancy Rates $300 Notes

$275 Male Female

$250 See note on 2014 4.20% 11.88% missionary age change $225

$200 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2015 1.13% 2.11%

> THE MISSIONARY AGE CHANGE: RENT GROWTH AND VACANCY At the end of 2012, The Church of Jesus Christ of Latter-day Saints, which owns and operates Brigham Young University, changed the missionary ages for both young men and young women. 2016 3.99% 4.13% The change meant that men could serve as missionaries at age 18 instead of 19, and women could serve at age 19 instead of 21.

This change had a significant impact on enrollment at BYU because, in addition to the missionar- ies who were already serving, many young men and young women decided at that time that they 2017 1.86% 2.56% would serve missions earlier that they would have previously been able. In addition, the number of women who chose to serve missions increased by about 32% due to their opportunity to go at a younger age.

As shown on both historical rent and vacancy averages, this effected both rents and vacancy for 2018 1.64% 2.30% a period of about 3 years. However, this change has now worked itself through the system and no longer has any impact on rising rents or occupancy.

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 12 MARKET SUMMARY

BYU Student Housing FAQ

> DO STUDENT HAVE TO LIVE IN BYU CONTRACTED HOUSING? All single undergraduate students are required to live in contracted housing. There are waivers available to students if their situation is such that requires an exception to university policy. Individuals desiring a waiver will need to prove that they have a special circumstances or hardships that necessitate living outside of Contracted housing. Otherwise, the expectation is to live in Contracted housing.

> WHAT HAPPENS IF A STUDENT CHOOSES NOT TO LIVE IN CONTRACTED HOUSING? Fees can be placed on a student’s account if they are not in compliance with contracted housing requirements. This could be due to failure to verify address, not living in contracted housing, or not having a current waiver that has been accepted by the waiver/appeal committee. Students who do not provide their residential address or who live in housing not contracted by the university and who are not excused by the BYU Off-Campus Housing Office are subject to the following sanctions:

1. Non-compliance fees up to $175.00 will be incurred, and future registration may be stopped, until the student verifies that he or she is living in or will be living in university-contracted housing. 2. Students falsifying their addresses will be subject to the above consequences as well as disciplinary action by the university for Honor Code violations.

When a student signs an agreement to live in a facility not contracted by the university and has not been excused from the university housing requirement, these sanctions will be applied even though the student’s tenancy extends beyond the current semester or term in which the student is enrolled. A student in this situation will have to either move from the uncontracted housing unit, regardless of the consequences, or forego registration and other privi- leges at the university until complying with this policy.

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 13 MARKET SUMMARY

Rent Comparables

Year Total # Bedrooms Beds Per Bathrooms 12-Month Fall/Winter No Name Units Property Amenities Built of Beds Per Unit Unit Per Unit Shared Shared

University Park Upside: Common Area Yard Space 1 1971 12 72 3 6 2 - $285 225 E 700 N for Possible Hot Tub Park Place Apartments 2 1970 12 72 3 6 2 $319 $419 Hot Tub 460 E 700 N Provo Crown Apartments 3 1968 12 72 3 6 2 $315 $425 - 455 E 600 N

Trident Winfield Apartments 4 1970 12 48 2 4 1 $295-$335 $355 - 356 N 200 E Sparks II Apartments 5 1971 36 176 2-3 4-6 1-2 $290-$300 $369-$389 Pool/Hot Tub 999 E 450 N Southridge Apartments 6 1965 36 144 2 4 1 $295 $395 Hot Tub 455 E 600 N Casa Dea Apartments 7 1966 18 70 2 4 1 $345 - 660 N 200 E Berkshire Apartments 8 1966 10 40 2 4 1 $275 $325 - 41 E 400 N

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 14 Photo Gallery

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 15 UNIVERSITY PARK APARTMENTS Offering Memorandum > Financial Overview

COLLIERS INTERNATIONAL FINANCIAL INFORMATION

ACTUAL PROFORMA PROFORMA PROFORMA INCOME 2016 2017 2018* PRE-RENOVATION POST-RENOVATION NOTES RENT ASSUMPTIONS Rental Income $185,415 $192,495 $198,270 $272,160 $306,720 Market rent estimate based on comparables CURRENT Parking Fee $3,475 $3,760 $3,873 $9,300 $11,160 Market parking rent estimate based on comparables Rent Per Bed $285 FinancialLess: Vacancy Analysis ($11,258) ($12,715) 4% annual vacancy estimate Parking $15 Utility Income $9,320 $8,495 $8,750 $9,012 $9,012 Historical income plus 3% Vending Income $2,040 $2,230 $2,297 $2,366 $2,366 Historical income plus 3% Late & NSF Fees $630 ACTUAL$280 $288 PROFORMA $297 PROFORMA $297 Historical income plus 3%PROFORMA MARKET PRE-RENOVATION INCOMENon-Refundable Fees 2016 $5,830 2017$5,810 2018* $5,984 PRE-RENOVATION$6,164 POST-RENOVATION $6,164 Historical income plus 3% NOTES Rent RENTPer Bed ASSUMPTIONS $315 RentalEFFECTIVE Income GROSS INCOME $185,415$206,710 $192,495$213,070 $198,270$219,462 $272,160$288,041 $306,720$323,004Market rent estimate based on comparables Parking CURRENT $25 Parking Fee EGI Per Unit $3,475$17,226 $3,760 $3,873$18,289 $9,300$24,003 $11,160$26,917Market parking rent estimate based on comparables Rent Per Bed $285 Less: Vacancy EGI Per Bed $2,871 $3,048 ($11,258)$4,001 ($12,715)$4,4864% annual vacancy estimate Parking $15 Utility Income $9,320 $8,495 $8,750 $9,012 $9,012 Historical income plus 3% MARKET POST-RENOVATION Vending Income $2,040 $2,230 $2,297 $2,366 $2,366 Historical income plus 3% EXPENSES Rent Per Bed $355 Late & NSF Fees $630 $280 $288 $297 $297 Historical income plus 3% MARKET PRE-RENOVATION Advertising $800 $560 $571 $583 $583 Historical plus 2% Parking $30 Non-RefundableBuilding Insurance Fees $5,830$4,360 $5,810$4,120 $5,984$4,202 $6,164$4,286 $6,164$4,286HistoricalHistorical income plus plus 2% 3% Rent Per Bed $315 EFFECTIVEBank Charges GROSS INCOME $206,710$80 $213,070$300 $219,462$306 $288,041$312 $323,004$312 Historical plus 2% Parking $25 Licenses & Permits EGI Per Unit $17,226$280 $230 $18,289$235 $24,003$239 $26,917$239 Historical plus 2% Supplies EGI Per Bed $2,871$520 $250 $3,048$255 $4,001$260 $4,486$260 Historical plus 2% Repairs $8,410 $16,300 $16,626 $16,959 $16,959 Historical plus 2% MARKET POST-RENOVATION EXPENSESTelephone $300 $320 $326 $333 $333 Historical plus 2% Rent Per Bed $355 AdvertisingInternet & Cable $800$5,900 $560$6,000 $571$6,120 $583$6,242 $583$6,242HistoricalHistorical plus plus 2% 2% Parking $30 BuildingGas,Elec, Insurance Water, Sewer $4,360$19,910 $4,120$20,450 $4,202$20,859 $4,286$21,276 $4,286$21,276HistoricalHistorical plus plus 2% 2% BankWaste Charges disposal $80$870 $300$1,875 $306$1,913 $312$1,951 $312$1,951HistoricalHistorical plus plus 2% 2% LicensesMgt. &Fees Permits $280$16,260 $230$15,765 $235$16,080 $239$14,402 $239$16,150Historical5% of EGIplus 2% Property Taxes $9,090 $8,770 $8,713 $10,000 $10,000 Property tax estimate. 2018 actual is $8,713 Supplies $520 $250 $255 $260 $260 Historical plus 2% Cap Ex & Repair Reserves $12,000 $12,000 Estimate of $1,000 per unit per year Repairs $8,410 $16,300 $16,626 $16,959 $16,959 Historical plus 2% TOTAL EXPENSES ($66,780) ($74,940) ($76,206) ($88,843) ($90,592) Telephone $300 $320 $326 $333 $333 Historical plus 2% EXPENSES AS % OF EGI 32.31% 35.17% 34.72% 30.84% 28.05% Internet & Cable $5,900 $6,000 $6,120 $6,242 $6,242 Historical plus 2% Expenses Per Unit ($5,565) ($6,245) ($6,351) ($7,404) ($7,549) Gas,Elec, Water, Sewer $19,910 $20,450 $20,859 $21,276 $21,276 Historical plus 2% Expenses Per Bed ($928) ($1,041) ($1,058) ($1,234) ($1,258) Waste disposal $870 $1,875 $1,913 $1,951 $1,951 Historical plus 2% Mgt.NET Fees OPERATING INCOME $16,260$139,930 $15,765$138,130 $16,080$143,256 $14,402$199,197 $16,150$232,4125% of EGI Property Taxes $9,090 $8,770 $8,713 $10,000 $10,000 Property tax estimate. 2018 actual is $8,713 Cap Ex & Repair Reserves $12,000 $12,000 Estimate of $1,000 per unit per year TOTALPrice EXPENSES ($66,780)$3,395,000 ($74,940) # of units($76,206) 12 ($88,843) Property Renovation($90,592) Estimates Price Per UnitEXPENSES AS % OF EGI 32.31%$282,917 35.17% # of beds34.72% 72 30.84% $240,000 28.05% $20,000 per unit in interior upgrades Expenses Per Unit ($5,565) ($6,245) ($6,351) ($7,404) ($7,549) Price Per Bed $47,153 $75,000 Exterior upgrades - paint, landscaping, cosmetic upgrades, etc… Expenses Per Bed ($928) ($1,041) ($1,058) ($1,234) ($1,258) Cap Rate - In Place 4.22% Parking Spaces 31 $315,000 Total Estimated Renovation Budget Cap Rate - Market Rents 5.87% Year Built 1971 NET OPERATING INCOME $139,930 $138,130 $143,256 $199,197 $232,412 Cap Rate - Post Renovations** 6.26%

Price*2018 income is 2017 actual plus 3%$3,395,000 and expenses are 2017# of actual units plus 2% 12 Property Renovation Estimates Price**Includes Per Unit Property Renovation Estimate$282,917 numbers # of beds 72 $240,000 $20,000 per unit in interior upgrades Price Per Bed $47,153 $75,000 Exterior upgrades - paint, landscaping, cosmetic upgrades, etc… Cap Rate - In Place 4.22% Parking Spaces 31 $315,000 Total Estimated Renovation Budget Cap Rate - Market Rents 5.87% Year Built 1971 CapUniversity Rate - ParkPost | Renovations** Offering Memorandum 6.26% COLLIERS INTERNATIONAL P. 17

*2018 income is 2017 actual plus 3% and expenses are 2017 actual plus 2% **Includes Property Renovation Estimate numbers ACTUAL PROFORMA PROFORMA PROFORMA INCOME 2016 2017 2018* PRE-RENOVATION POST-RENOVATION NOTES RENT ASSUMPTIONS Rental Income $185,415 $192,495 $198,270 $272,160 $306,720 Market rent estimate based on comparables CURRENT Parking Fee $3,475 $3,760 $3,873 $9,300 $11,160 Market parking rent estimate based on comparables Rent Per Bed $285 Less: Vacancy ($11,258) ($12,715) 4% annual vacancy estimate Parking $15 Utility Income $9,320 $8,495 $8,750 $9,012 $9,012 Historical income plus 3% Vending Income $2,040 $2,230 $2,297 $2,366 $2,366 Historical income plus 3% Late & NSF Fees $630 $280 $288 $297 $297 Historical income plus 3% MARKET PRE-RENOVATION Non-Refundable Fees $5,830 $5,810 $5,984 $6,164 $6,164 Historical income plus 3% Rent Per Bed $315 EFFECTIVE GROSS INCOME $206,710 $213,070 $219,462 $288,041 $323,004 Parking $25 EGI Per Unit $17,226 $18,289 $24,003 $26,917 ACTUAL PROFORMA PROFORMA PROFORMA EGI Per Bed $2,871 $3,048 $4,001 $4,486 INCOME 2016 2017 2018* PRE-RENOVATION POST-RENOVATION NOTES RENT ASSUMPTIONS MARKET POST-RENOVATION Rental Income $185,415 $192,495 $198,270 $272,160 $306,720 Market rent estimate based on comparables CURRENT EXPENSES ACTUAL PROFORMA PROFORMA PROFORMA Rent Per Bed $355 Parking Fee $3,475 $3,760 $3,873 $9,300 INCOME $11,1602016 Market2017 parking rent2018* estimate based onPRE-RENOVATION comparables POST-RENOVATION Rent Per Bed NOTES $285 RENT ASSUMPTIONS Less: Vacancy ($11,258) RentalAdvertising Income ($12,715)$185,4154% annual$192,495 vacancy$800 estimate$198,270 $560 $272,160 $571 $306,720ParkingMarket rent estimate$583 based on comparables$15 $583 CURRENTHistorical plus 2% Parking $30 Utility Income $9,320 $8,495 $8,750 $9,012 ParkingBuilding Fee Insurance $9,012 $3,475Historical$3,760 income$4,360 plus$3,873 3% $4,120 $9,300 $4,202 $11,160 Market parking rent$4,286 estimate based on comparables $4,286Rent Per Bed Historical plus$285 2% Less: Vacancy ($11,258) ($12,715) 4% annual vacancy estimate Parking $15 Vending Income $2,040 $2,230 $2,297 $2,366 UtilityBank Income Charges $2,366$9,320Historical$8,495 income plus$80$8,750 3% $300 $9,012 $306 $9,012 Historical income plus$312 3% $312 Historical plus 2% Vending Income $2,040 $2,230 $2,297 $2,366 $2,366 Historical income plus 3% Late & NSF Fees $630 $280 $288 $297 Licenses & Permits $297 Historical income plus$280 3% $230 $235 MARKET PRE-RENOVATION$239 $239 Historical plus 2% Late & NSF Fees $630 $280 $288 $297 $297 Historical income plus 3% MARKET PRE-RENOVATION Non-Refundable Fees $5,830 $5,810 $5,984 $6,164 Non-RefundableSupplies Fees $6,164$5,830Historical$5,810 income plus$520$5,984 3% $250 $6,164 $255 $6,164RentHistorical Per Bed income plus$260 3% $315 Rent$260 Per Bed Historical plus$315 2% EFFECTIVE GROSS INCOME $206,710 $213,070 $219,462 $288,041 EFFECTIVERepairs GROSS INCOME $323,004$206,710 $213,070 $8,410$219,462 $16,300 $288,041 $16,626 $323,004Parking $16,959 $25 $16,959Parking Historical plus$25 2% EGI Per Unit $17,226 $18,289 $24,003 $26,917 EGI Per Unit $17,226 $18,289 $24,003 Telephone EGI Per Bed$26,917$2,871 $300$3,048 $320 $4,001 $326 $4,486 $333 $333 Historical plus 2% EGI Per Bed $2,871 $3,048 $4,001 Internet & Cable $4,486 $5,900 $6,000 $6,120 $6,242 $6,242MARKET POST-RENOVATIONHistorical plus 2% EXPENSESGas,Elec, Water, Sewer $19,910 $20,450 $20,859 MARKET POST-RENOVATION$21,276 $21,276Rent Per Bed Historical plus$355 2% Advertising $800 $560 $571 $583 $583 Historical plus 2% Parking $30 EXPENSES BuildingWaste Insurance disposal $4,360 $4,120 $870$4,202 $1,875 $4,286 $1,913 $4,286RentHistorical Per Bed plus 2%$1,951 $355 $1,951 Historical plus 2% Bank Charges $80 $300 $306 $312 $312 Historical plus 2% Advertising $800 $560 $571 $583 Mgt. Fees $583 Historical plus 2%$16,260 $15,765 $16,080 Parking $14,402 $30 $16,150 5% of EGI Licenses & Permits $280 $230 $235 $239 $239 Historical plus 2% Building Insurance $4,360 $4,120 $4,202 $4,286 SuppliesProperty Taxes $4,286 $520Historical$250 plus 2%$9,090$255 $8,770 $260 $8,713 $260 Historical plus 2%$10,000 $10,000 Property tax estimate. 2018 actual is $8,713 Bank Charges $80 $300 $306 $312 RepairsCap Ex & Repair Reserves $312$8,410Historical$16,300 plus 2% $16,626 $16,959 $16,959 Historical plus 2%$12,000 $12,000 Estimate of $1,000 per unit per year Telephone $300 $320 $326 $333 $333 Historical plus 2% Licenses & Permits $280 $230 $235 $239 InternetTOTAL & CableEXPENSESFINANCIAL INFORMATION$239$5,900Historical$6,000 plus($66,780) 2% $6,120 ($74,940) $6,242 ($76,206) $6,242 Historical plus($88,843) 2% ($90,592) Supplies $520 $250 $255 $260 Gas,Elec, Water, Sewer EXPENSES$260 AS $19,910% OFHistorical EGI $20,450 plus 2%32.31%$20,859 35.17% $21,276 34.72% $21,276 Historical plus 2%30.84% 28.05% Waste disposal $870 $1,875 $1,913 $1,951 $1,951 Historical plus 2% Repairs $8,410 $16,300 $16,626 $16,959 Mgt. Fees Expenses$16,959$16,260 PerHistorical Unit $15,765 plus 2%($5,565)$16,080 ($6,245) $14,402 ($6,351) $16,150 5% of EGI ($7,404) ($7,549) Telephone $300 $320 $326 $333 Property Taxes Expenses$333$9,090 PerHistorical Bed $8,770 plus 2%($928)$8,713 ($1,041) $10,000 ($1,058) $10,000 Property tax estimate.($1,234) 2018 actual is $8,713 ($1,258) Cap Ex & Repair Reserves $12,000 $12,000 Estimate of $1,000 per unit per year Internet & Cable $5,900 $6,000 $6,120 $6,242 TOTAL EXPENSES $6,242($66,780)Historical($74,940) plus 2% ($76,206) ($88,843) ($90,592) Gas,Elec, Water, Sewer $19,910 $20,450 $20,859 $21,276 NETFinancial OPERATINGEXPENSES INCOME AS % OF EGI$21,276 Analysis32.31%Historical35.17% plus$139,930 2% 34.72% $138,130 30.84% $143,256 28.05% $199,197 $232,412 Expenses Per Unit ($5,565) ($6,245) ($6,351) ($7,404) ($7,549) Waste disposal $870 $1,875 $1,913 $1,951 Expenses Per Bed$1,951 ($928)Historical($1,041) plus 2% ($1,058) ($1,234) ($1,258) Mgt. Fees $16,260 $15,765 $16,080 $14,402 $16,150 5% of EGI ACTUAL NET OPERATING INCOMEPROFORMA $139,930PROFORMA$138,130 $143,256 $199,197PROFORMA $232,412 Property Taxes INCOME$9,090 $8,770 $8,7132016 2017 2018*$10,000 Price PRE-RENOVATION $10,000POST-RENOVATIONProperty tax$3,395,000 estimate. 2018 actual is $8,713# of unitsNOTES 12 RENT ASSUMPTIONSProperty Renovation Estimates Cap Ex & Repair Reserves Rental Income $185,415 $192,495 $12,000$198,270 $272,160$12,000 Estimate of $306,720$1,000 per Marketunit per rent year estimate based on comparables CURRENT PricePrice Per Unit $3,395,000 #$282,917 of units 12 # of bedsProperty Renovation Estimates72 $240,000 $20,000 per unit in interior upgrades TOTAL EXPENSES ($66,780) ($74,940) ($76,206) ($88,843) ($90,592) Parking Fee $3,475 $3,760 $3,873 PricePrice Per Per Unit Bed $9,300 $282,917 $11,160# of$47,153 beds Market parking72 rent estimate based on comparables$240,000 $20,000 perRent unit Perin interior Bed upgrades $285$75,000 Exterior upgrades - paint, landscaping, cosmetic upgrades, etc… EXPENSES AS % OF EGI 32.31%Less: Vacancy 35.17% 34.72% 30.84% Price Per Bed ($11,258) 28.05%$47,153 ($12,715) 4% annual vacancy estimate $75,000 Exterior upgradesParking - paint, landscaping, cosmetic $15upgrades, etc… Cap Rate - In Place 4.22% Parking Spaces 31 $315,000 Total Estimated Renovation Budget Expenses Per Unit Utility($5,565) Income ($6,245) ($6,351)$9,320 $8,495 ($7,404)$8,750 Cap Rate - In Place $9,012 ($7,549)4.22% Parking$9,012 SpacesHistorical income31 plus 3% $315,000 Total Estimated Renovation Budget Vending Income $2,040 $2,230 $2,297 CapCap Rate Rate - Market - Market Rents $2,366 Rents 5.87% Year$2,366 Built5.87% Historical1971 income plusYear 3% Built 1971 Expenses Per Bed ($928) ($1,041) ($1,058) ($1,234) Cap Rate - Post Renovations** ($1,258)6.26% Late & NSF Fees $630 $280 $288 Cap Rate - Post Renovations**$297 $2976.26%Historical income plus 3% MARKET PRE-RENOVATION NET OPERATING INCOME Non-Refundable$139,930 Fees$138,130 $143,256$5,830 $5,810 $199,197$5,984 *2018 income is 2017 actual$6,164 plus$232,412 3% and expenses are 2017 actual$6,164 plus 2%Historical income plus 3% Rent Per Bed $315 **Includes Property Renovation Estimate numbers EFFECTIVE GROSS INCOME $206,710 $213,070 $219,462 *2018 income $288,041is 2017 actual plus 3% and$323,004 expenses are 2017 actual plus 2% Parking $25 EGI Per Unit $17,226 $18,289 **Includes Property$24,003 Renovation Estimate$26,917 numbers Price $3,395,000 EGI# ofPer unitsBed $2,871 12 $3,048 Property Renovation$4,001 Estimates $4,486 Price Per Unit $282,917 # of beds 72 $240,000 $20,000 per unit in interior upgrades MARKET POST-RENOVATION Price Per Bed EXPENSES$47,153 $75,000 Exterior upgrades - paint, landscaping, cosmetic upgrades, etc… Rent Per Bed $355 Advertising $800 $560 $571 $583 $583 Historical plus 2% Parking $30 Cap Rate - In Place 4.22% Parking Spaces 31 $315,000 Total Estimated Renovation Budget Building Insurance $4,360 $4,120 $4,202 $4,286 $4,286 Historical plus 2% Cap Rate - Market Rents Bank 5.87%Charges Year Built $80 1971 $300 $306 $312 $312 Historical plus 2% Cap Rate - Post Renovations** Licenses6.26% & Permits $280 $230 $235 $239 $239 Historical plus 2% Supplies $520 $250 $255 $260 $260 Historical plus 2% *2018 income is 2017 actual plus 3% andRepairs expenses are 2017 actual plus 2% $8,410 $16,300 $16,626 $16,959 $16,959 Historical plus 2% **Includes Property Renovation EstimateTelephone numbers $300 $320 $326 $333 $333 Historical plus 2% Internet & Cable $5,900 $6,000 $6,120 $6,242 $6,242 Historical plus 2% Gas,Elec, Water, Sewer $19,910 $20,450 $20,859 $21,276 $21,276 Historical plus 2% Waste disposal $870 $1,875 $1,913 $1,951 $1,951 Historical plus 2% Mgt. Fees $16,260 $15,765 $16,080 $14,402 $16,150 5% of EGI Property Taxes $9,090 $8,770 $8,713 $10,000 $10,000 Property tax estimate. 2018 actual is $8,713 Cap Ex & Repair Reserves $12,000 $12,000 Estimate of $1,000 per unit per year TOTAL EXPENSES ($66,780) ($74,940) ($76,206) ($88,843) ($90,592) EXPENSES AS % OF EGI 32.31% 35.17% 34.72% 30.84% 28.05% Expenses Per Unit ($5,565) ($6,245) ($6,351) ($7,404) ($7,549) Expenses Per Bed ($928) ($1,041) ($1,058) ($1,234) ($1,258)

NET OPERATING INCOME $139,930 $138,130 $143,256 $199,197 $232,412

University Park | Offering Memorandum COLLIERS INTERNATIONAL P. 18 Price $3,395,000 # of units 12 Property Renovation Estimates Price Per Unit $282,917 # of beds 72 $240,000 $20,000 per unit in interior upgrades Price Per Bed $47,153 $75,000 Exterior upgrades - paint, landscaping, cosmetic upgrades, etc… Cap Rate - In Place 4.22% Parking Spaces 31 $315,000 Total Estimated Renovation Budget Cap Rate - Market Rents 5.87% Year Built 1971 Cap Rate - Post Renovations** 6.26%

*2018 income is 2017 actual plus 3% and expenses are 2017 actual plus 2% **Includes Property Renovation Estimate numbers 225 East 700 North | Provo, Utah 84606 Offering Memorandum UNIVERSITY PARK APARTMENTS

Rawley Nielsen Mark Jensen Darren Nielsen Colliers International 1 1 9 1 1 1 1 1 1 66 111 .. .. .. 111 1 1 9 3