The Midtown Portfolio

THE MIDTOWN PORTFOLIO

A 376-UNIT PORTFOLIO LOCATED IN THE HISTORIC MUSEUM DISTRICT OF RICHMOND, VIRGINIA TABLE OF CONTENTS

Executive Summary 4

Location Overview 20

The Gallery Property Overview 34

The Collection Property Overview 42

Apartment Market Overview 72

Rent Comparable Analysis 76

Financial Analysis 84

2 CONTACTS OFFER SOLICITATION PROCESS

WINK EWING OFFER SUBMISSION Senior Managing Director Offers should be presented in the form of a non-binding Letter of Intent, spelling out the 703.575.2157 significant terms and conditions of Purchasers’ offers including, but not limited to (1) [email protected] asset pricing, (2) due diligence and closing time frame, (3) earnest money deposit, (4) a description of the debt/equity structure and (5) qualifications to close. Offers should be MIKE MARSHALL delivered to the attention of Wink Ewing at [email protected]. Executive Managing Director 703.575.2152 PROPERTY VISITATION [email protected] Prospective purchasers will have the opportunity to visit the Properties via prescheduled property tours. These tours will include access to a representative sampling of units and DREW WHITE access to maintenance and other similar facilities. No visitations will be permitted without Executive Managing Director advance notice and scheduling. 703.918.4661 [email protected] AVAILABLE TOUR DATES To schedule your tour of the Properties, please contact Ed Garnica at 703.918.4678 or ED GARNICA [email protected]. Financial Analyst 703.918.4678 [email protected]

EXECUTIVE SUMMARY THE OFFERING INVESTMENT HIGHLIGHTS

ARA Newmark Mid Atlantic is pleased to present for sale the Irreplaceable Portfolio – Ideally located within Richmond’s Gallery Midtown and Collection Midtown apartment properties historic Fan and Museum District, the portfolio is unique in (the “Midtown Portfolio”), a portfolio consisting of 376 units size and location. These desirable urban neighborhoods located in the Museum District and Fan neighborhoods of are very walkable, boast among the highest occupancy Richmond, Virginia. rates in Richmond, and are fully built-out which places high barriers to entry for new supply. Gallery Midtown is a 157-unit garden style property that has been substantially renovated to a high standard through comprehensive Substantially Renovated Assets – Over the past two years, unit interior renovations, common area upgrades and the new the current owner has completed substantial renovations addition of a state-of-the-art clubhouse and pool. totaling $8.4 million in unit interiors, common areas and building exteriors throughout the portfolio, as well as Collection Midtown is comprised of 20 historic buildings totaling constructing a state-of-the-art clubhouse and pool at the 219 units, with buildings ranging from 6 to 19 units. This portfolio Gallery. has also undergone a substantial capital improvement program. A significant value-add opportunity remains by continuing the unit Value-Add Opportunity – Further upgrade opportunities exist in renovations to achieve higher rents and increased returns. the portfolio:

+ Collection – Kitchen upgrades, which cost Situated within a one-mile radius of one another, the Gallery and approximately $6,000 per unit and have achieved Collection properties are located within a concentrated footprint, over $200 in incremental monthly rent, have only affording considerable operational efficiencies. The Portfolio been completed in 25% of Collection units. is operated from the central office at the Gallery along with a satellite leasing office at 805 North Boulevard servicing the + Gallery – While in-unit renovations have been Collection. The residents of the entire portfolio share the dazzling substantial, bathrooms have not been upgraded new amenities offered at the recently completed clubhouse at the and the opportunity exists for additional exterior Gallery. amenities.

The Collection and Gallery can be acquired individually or Sought-After Secondary Market – Opportunity for an together, and are offered on a free and clear basis. investor to gain a major foothold in the highly-sought after Richmond MSA, which has market-wide occupancy of Please see the map on the following page to see the individual 95.3% that exceeds national averages and also affords property locations. the opportunity to achieve outsized yields relative to comparable markets in the southeast such as Charlotte, Raleigh/Durham and Nashville.

Stable Cash Flows – After completing portfolio-wide renovations in mid-2017, the current owner has stabilized the portfolio, which is currently 95.5% occupied. Given the upgraded condition and excellent locations of the properties, the portfolio offers an investor stable, long-term cash flows.

6 Executive Summary Executive Summary 7 INDIVIDUAL PROPERTY ADDRESSES

8 9 10 11 12 15 4 7 6 17 14 13 16 18

2 1 5

8 Executive Summary 1. 3224 Stuart Ave 8. 808 N Boulevard 15. 2730 W Grace St

12 Units 12 Units 12 Units

2. 3228 Stuart Ave 9. 811 N Boulevard 16. 2726 W Grace St

12 Units 12 Units 12 Units

3 3. 3408 Park Ave 10. 805 N Boulevard 17. 2716 W Grace St 8 9 12 Units 12 Units 12 Units 10 11 12 15 4 7 6 17 14 13 16 18 4. 2810 Monument Ave 11. 801 N Boulevard 18. 803-809 N Robinson St 2 1 5 6 Units 12 Units 4 Units

5. 2516-2518 W Grace St 12. 711 N Boulevard 19. 110 N Boulevard

12 Units 12 Units 19 Units

6. 2903 Monument Ave 13. 705 N Boulevard 20. 25 N Boulevard 19 7 Units 12 Units 9 Units 20

7. 706 N Boulevard 14. 2734 W Grace St 21. The Gallery

6 Units 12 Units 157 Units

Executive Summary 9 IRREPLACEABLE & WELL LOCATED PORTFOLIO

+ Located in the heart of Richmond’s Museum District and + A few blocks from Carytown, a long-standing urban village Fan neighborhoods, the properties are surrounded by The with numerous dining options such as Can Can, East Coast Virginia Museum of Fine Arts, The Virginia Historical Society Provisions and The Daily; and shopping boutiques such as and the city’s most significant collection of early 20th century Need Supply, Walkabout Outfitters and Roan. architecture. + - Highly walkable to the many bars, restaurants and The Gallery and all Collection properties are situated within a shopping destinations within the Fan and Museum one-mile radius of four grocery stores, including Kroger, Fresh District. Market and the soon-to-be-open Publix and Whole Foods. + + The Collection and Gallery are positively differentiated from Less than a 10-minute drive from the Downtown Richmond competitive rental housing nearby, which are mostly small, one- area, which features excellent restaurants, premier shopping off properties that have not been recently renovated and do not destinations and multiple theaters such as the Hippodrome, have access to Class A amenities. Altria Theatre and Dominion Arts Center, among others. + + Adjacent to Scott’s Addition, the fastest growing neighborhood The Walk Score is an impressive 86 for the properties, with in Richmond with many popular restaurants, breweries and several grocery stores, restaurants, bars and museums within entertainment venues as well as the soon-to-open River City Roll blocks of most properties. bowling alley.

TAX ABATEMENT BOOSTS CURRENT RETURNS

As an incentive to renovate existing properties, the City of Richmond offers a 10-year tax abatement program. The Gallery and most of the Collection properties have been accepted into this program, with the Gallery having six years of full tax abatement and the Collection properties having an average of five years of full tax abatement remaining. The schedule below represents a summary of the remaining tax abatement for the Gallery and Collection assets.

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Collections Abatement $82,398 $82,716 $82,716 $82,716 $82,716 $74,919 $59,634 $38,955 $18,276 $2,697 Gallery Abatement $136,428 $136,428 $136,428 $136,428 $136,428 $136,428 $102,321 $68,214 $34,107 $0 TOTALS $218,826 $219,144 $219,144 $219,144 $219,144 $211,347 $161,955 $107,169 $52,383 $2,697

10 Executive Summary SUBSTANTIAL CAPITAL INVESTED RICHMOND’S HIGHLY FAVORABLE RISK-RETURN PROFILE + The current ownership has completed a substantial capital program at the Gallery and all Collection assets, having According to Real Capital Analytics, going-in cap rates for invested approximately $8,423,000 ($22,400 per unit) in all classes of multifamily assets are considerably higher capital improvements over the past two years. for the Richmond MSA when compared to other southeast markets such as Raleigh/Durham, Charlotte, Nashville and + Gallery Upgrade Summary – Brand-new clubhouse and Northern Virginia. On average, Richmond cap rates are pool, all new windows, exterior paint, landscaping, secured nearly 100 basis points higher than these markets. This access systems at building entrances, in-unit washers and affords investors the opportunity for outsized yields and dryers, new kitchen appliances, granite counters and cabinets, given Richmond’s excellent fundamentals, offers a favorable and upgraded lighting and flooring throughout the units. risk-return profile. + Collection Upgrade Summary – Secured access systems at building entrances, paint and refinished floors in unit interiors 4Q17 APARTMENT CAP RATE COMPARISON BY REGION and building corridors, roof work and roof replacement as necessary, and exterior paint. Approximately 75% of units NORTHERN VIRGINIA 5.1% were upgraded with new washer / dryers and 25% were upgraded with new kitchen appliances, cabinets and granite RALEIGH-DURHAM 5.2% counters. CHARLOTTE 5.4%

NASHVILLE 5.7%

RICHMOND 6.3%

MID-ATLANTIC REGION 5.8%

US NON MAJOR MARKETS 5.7%

US MAJOR MARKETS 4.7%

US NATIONAL 5.6%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%

Executive Summary 11 VALUE-ADD POTENTIAL

The Midtown Portfolio provides the opportunity to enhance value through continuing renovations of unit interiors and creating new amenities. When comparing the rent differential between new high-end product nearby, such as the Preserve at Scott’s Addition, Carytown Crossing, Cary Street Station and the Cooperage, average market rents are approximately $200-$400 more per month when compared to the Collection. These large premiums provide abundant room to increase rental revenue with focused upgrades.

THE COLLECTION VALUE-ADD POTENTIAL THE GALLERY VALUE-ADD POTENTIAL

+ Fifty-five units at the Collection, or 25% of the Collection’s total + An opportunity at the Gallery exists to further enhance value by units, have been renovated with premium kitchen upgrades completing upgrades to the bathrooms, by installing new sinks consisting of new cabinets, granite countertops, stainless steel and vanities, showers/baths units and adding closet or storage appliances including microwaves, brushed-nickel hardware, space. new flooring and high-end lighting packages. + Additional upgrades could include adding outdoor amenities + The cost of these upgrades is approximately $6,000 per unit and creating rear access doors and patios in select first floor and these units are achieving average rent premiums of $86- units. $211 (effective) per month. - Assuming a $150 per unit average rent premium, the one-year return on cost for the kitchen upgrades is 30%.

+ Opportunities for additional upgrades exist for bathrooms by installing new sinks and vanities, showers/baths units and adding closet or storage space.

COLLECTION PREMIUM ANALYSIS UPGRADED FLOOR PLAN SF LEASE UPGRADED FLOOR PLAN SF LEASE 3228-1 STU-2A 795 $1,352 3408-1 3408PRK-2B 940 $1,288 3228-2 STU-2A 795 $1,295 3408-2 3408PRK-2B 940 $1,430 3228-5 STU-2A 795 $1,340 3408-5 3408PRK-2B 940 $1,449 3228-6 STU-2A 795 $1,095 3408-6 3408PRK-2B 940 $1,422 3228-9 STU-2A 795 $1,250 3408-9 3408PRK-2B 940 $1,444 3228-10 STU-2A 795 $1,095 3408-10 3408PRK-2B 940 $1,418 TOTAL/AVERAGE $1,238 TOTAL/AVERAGE $1,408

NON UPGRADED FLOOR PLAN SF LEASE NON UPGRADED FLOOR PLAN SF LEASE 2516-1 2516GRA-1A 758 $989 705-1 705BLVD-2A 958 $1,267 2516-2 2516GRA-1A 758 $1,133 705-2 705BLVD-2A 958 $1,390 2516-3 2516GRA-1A 758 $986 705-5 705BLVD-2A 958 $1,219 2516-4 2516GRA-1A 758 $1,029 705-6 705BLVD-2A 958 $1,299 2516-5 2516GRA-1A 758 $1,031 705-9 705BLVD-2A 958 $1,388 2516-6 2516GRA-1A 758 $997 705-10 705BLVD-2A 958 $1,373 TOTAL/AVERAGE $1,027 TOTAL/AVERAGE $1,322 Rent Delta: $211 Rent Delta: $86

12 Executive Summary UNRENOVATED KITCHEN – THE COLLECTION RENOVATED KITCHEN – THE COLLECTION

RENOVATIONS INCLUDE: STAINLESS STEEL APAPPLIANCES, GRANITE COUNTERTOPS, UPDATED CABINETS AND ADDING MICROWAVES

EXTERIOR UPGRADES – THE COLLECTION

Executive Summary 13 14 Executive Summary GROWTH IN SURROUNDING AREA

THE MUSEUM DISTRICT CARYTOWN + The Museum District sits between the Fan and the affluent + A quaint and highly walkable urban village, Carytown is residential neighborhoods of the Near West End, and is Richmond’s premier shopping, dining and entertainment district. anchored by the six-block tract of museums along the west side + The western edge of Carytown includes grocery anchors such of Boulevard. as Fresh Market, local organic grocer Ellwood Thompson’s, + The Virginia Museum of Fine Arts (VMFA) underwent a $150 Kroger and a soon-to-open Publix. million renovation in 2010, which prompted Yelp to rank it #19 + The Carytown corridor has over 230 restaurants, edgy boutique in the Top 20 Museums in the USA in 2015. shops and offices, and is home to one of the city’s institutions, + Museum District housing prices have increased over 45% since the Byrd Theatre. the low water mark in 2009, with an 11.5% increase in 2017 alone. THE FAN DISTRICT/VCU + VCU has grown into Virginia’s largest public university, with + Excellent walkability with close proximity to Carytown, the Fan over 31,200 students enrolled with more than 200 degree and Scott’s Addition. programs, and 14,500 employees.

+ Whole Foods is currently under construction with their second + VCU is the largest employer in Richmond and VCU Health Richmond store which is located within a few minutes from the System is the top hospital in Central Virginia. Collection and Gallery. + The VCU 2020 Vision for Excellence, a strategic plan SCOTT’S ADDITION implemented in 2006, has resulted in nearly $1 billion in new + Scott’s Addition, the area north of Broad Street bounded academic, medical, recreation, student housing and parking by Interstate 195 to the west and the Boulevard to the facilities on both the Monroe Park and Medical campuses. east, has rapidly become one of Richmond’s most dynamic neighborhoods, with an eclectic mix of residential, creative office, restaurants, breweries and entertainment venues.

+ In the last few years, over 10 new breweries and distilleries have opened, making it a mecca for millennials.

+ Multifamily development has followed the trend with over 1,000 new residential units coming on line.

+ With a recent change in zoning density, the neighborhood is poised to see more high-rise product in the near future.

RICHMOND IS THE #2 PLACE WHERE MILLENNIALS ARE MOVING according to TIME magazine

Executive Summary 15 TOTAL POPULATION

POSITIVE BUSINESS & ECONOMIC TRENDS

+ The current unemployment rate for the City of Richmond is a tight 3.9%.

+ The Richmond Metropolitan Area’s 3.4% employment growth (22,400 new jobs year- to-date) exhibits the strong state of the region’s economy and its excellent potential to 19,956 continue to expand. + In the past year, several major office leases have been signed in Downtown Richmond, most notably, CoStar Group, which relocated its research and development operations # OF HOUSEHOLDS from Washington, DC and now employs over 730 individuals locally.

+ Among the mayor’s highest priorities is to replace the Richmond Coliseum with a new arena, which will serve as a catalyst for tourism in the MSA and additional residential and mixed-use development in the surrounding blocks in downtown Richmond.

PROXIMITY TO MAJOR EMPLOYERS

+ The Properties are approximately 10 minutes from Downtown Richmond, which has 10,892 many notable employers including Bank of America, Wells Fargo, Dominion Energy, the Federal Reserve Bank of Richmond and Harris Williams. # OF EMPLOYEES + Richmond is the state capital of the Commonwealth of Virginia and its vast number of government jobs are primarily located near the statehouse, only 3.5 miles away from the Collection and Gallery.

FAVORABLE DEMOGRAPHICS FAVORABLE + Richmond is home to one of 13 United States Courts of Appeals and four of the largest law firms in the US: Hunton & Williams, LeClairRyan, McGuireWoods and Williams Mullen.

+ Directly to the east of the Fan is Virginia Commonwealth University, which has a student body of approximately 31,200 and employs nearly 22,000 people when combined with its Health System. 16,976 + The properties are situated 4.8 miles from the Virginia Biotechnology Research Park, which hosts nearly 70 private and non-profit companies, state and federal laboratories, RESIDENTS WITH and research institutes/administrative functions of VCU and the VCU Health System. COLLEGE DEGREE + In total, the City of Richmond is home to 7,720+ businesses and 165,645 employees.

1-MILE RADIUS – THE TOP 10 ABSOLUTE GROWTH MSA’S WILL INCREASE IN POPULATION BY OVER 13 MILLION PEOPLE BETWEEN 2013- 2030. OF THOSE, THE #1 MSA IN THE NATION IN TERMS OF THE HIGHEST PROJECTED PERCENTAGE GROWTH OVER 69.1% THIS 17 YEAR PERIOD IS RICHMOND (+68.4%).

16 Executive Summary Executive Summary 17 DOWNTOWN MANCHESTER RICHMOND

VCU CAMPUS

SCIENCE MUSEUM OF VIRGINIA

Boulevard Broad St VIRGINIA HISTORICAL VIRGINIA MUSEUM SCOTT’S ADDITION SOCIETY OF FINE ARTS

CARYTOWN Monument Ave

18 Executive Summary DOWNTOWN MANCHESTER RICHMOND

VCU CAMPUS

SCIENCE MUSEUM OF VIRGINIA

Boulevard Broad St VIRGINIA HISTORICAL VIRGINIA MUSEUM SCOTT’S ADDITION SOCIETY OF FINE ARTS

CARYTOWN Monument Ave

Executive Summary 19

LOCATION OVERVIEW RICHMOND MSA

Richmond, located in central Virginia, is approximately 100 miles south of Washington, D.C. The greater Richmond MSA is home to nearly 1.3 million residents and is one of the strongest secondary real estate markets in the country.

As the seat of state government in Virginia, Richmond has always been a political and economic driving force in the Commonwealth. Historically, the Richmond was known as a center for the finance and insurance industries. More recently, it has established itself as a leader in a number of other industry sectors, including medical, biotechnology, manufacturing and transportation.

POPULATION GROWTH The population of the Richmond Metro Area has increased approximately 39.0% since 2000 to 1,271,330 today, representing strong average annual population growth of 2.3%. The population is projected to continue to grow to 1,328,690 by 2020. In addition, between the end of 2017 and 2020, the Richmond Metro Area is expected to add 44,000 new jobs, marking 6.6% employment growth.

RICHMOND IS #9 IN PROJECTED ABSOLUTE POPULATION GROWTH FROM 2013-2030 FOR ALL NATIONAL MSA’S.

22 Location Overview Location Overview 23 1 GENWORTH FINANCIAL

THE CITY OF RICHMOND 2 ALTRIA

The City of Richmond is the capital of Virginia and offers complete livability and a wealth 3 BON SECOURS VIRGINIA of amenities not often found in other East Coast municipalities. It is located in central HEALTH SYSTEM Virginia and occupies 62.5 square miles. Richmond is home to over 223,000 people, an 8.7% increase over its 2010 population of 204,243. The population is expected to grow 4 VIRGINIA BIOTECHNOLOGY an additional 1.3% each year between 2018 and 2021. PARK

The city is recognized for its vitality, alongside its educational heritage and flourishing 5 DOMINION ENERGY cultural community. It is consistently identified by several national publications, such as U.S. News and Livability, as being among the “Best Places to Live and Work in America.” 6 BANK OF AMERICA Richmond employs 165,645 people and has seen consistent employment growth of about 2.2% annually since 2006. The city’s recent strong employment growth is in part due to 7 VCU its diverse employment base, which ranges from chemical and tobacco manufacturing to biotechnology. 8 NEW MARKET Richmond also provides an abundance of recreational and entertainment options to its residents. It is the site of countless restaurants and entertainment attractions, as well as 9 WELLS FARGO numerous historic landmarks and the nation’s largest river park system. Gillies Creek Park is located on the east side of Richmond and offers an abundance of attractions such as 10 BB&T disc golf, walking trails and a BMX race track. 11 COSTAR

12 RICHMOND TIMES-DISPATCH NYC 55 min... 13 ANTHEM

14 PROXIOS 48 min... DC 15 ODELL

16 HOURIGAN CONSTRUCTION

ATL 40 min... 17 HUNTON & WILLIAMS

18 LECLAIRRYAN

BOS 35 min... EMPLOYERS CITY OF RICHMOND NOTABLE 19 MCGUIREWOODS

20 WILLIAMS MULLEN

AVERAGE COMMUTE TIME AVERAGE RVA 24 min... 21 VCU HEALTH SYSTEM

22 VIRGINIA STATE CAPITOL

24 Location Overview 2 1

7 4 9 12 16 21

19 5 8 11 22 18 6 14 10

20 17

Location Overview 25 THE MUSEUM DISTRICT

Nestled between the Fan and Richmond’s West End, the Museum District is one of Richmond’s most significant collections of early 20th century architecture. The Museum District includes 22 properties listed on the National Register of Historic Places and features the Virginia Museum of Fine Arts, the Virginia Historical Society, brick row houses, detached townhouses, apartment buildings, small commercial structures, churches, a synagogue and schools. The Virginia Museum of Fine Arts (VMFA) underwent a $150 million renovation in 2010, which prompted Yelp to rank it #19 in the Top 20 Museums in the USA in 2015.

The dense population of the Museum District coupled by its close proximity to the Carytown shopping district, and its tree-lined sidewalks help define the area as a flourishing pedestrian environment.

26 Location Overview SCOTT’S ADDITION

Scott’s Addition is the City of Richmond’s fastest growing neighborhood, hosting an eclectic mix of apartments, homes, restaurants, breweries, shops and more tucked away in the northwest corner of West Broad Street and North Boulevard. With over 1,000 new residential units and a growing number of amenities, the neighborhood is quickly becoming one of the most sought after areas in the region.

Scott’s Addition has benefited tremendously from millions of dollars in private investments in the past few years. These investments have brought The Veil Brewing Co., Buskey Cider, Gather, a collaborative workspace and multiple apartment buildings such. Some of the most popular eateries in Scott’s Addition include The Dairy Bar, Urban Farmhouse Market & Café and Boulevard Burger and Brew, to name a few. Bow Tie Cinemas Movieland at Boulevard Square and Criterion Cinemas at Movieland also draw many people to the area.

Location Overview 27 CARYTOWN

Nicknamed “the Mile of Style” and home to more than 300 unique shops, restaurants, and health and body boutiques, Carytown is one of the most unique commercial corridors in the country. It is the premier boutique retail district in Central Virginia and an established East Coast tourism destination, attracting visitors from across the nation.

In 2016, Carytown was named one of the 15 trendiest retail markets in the country for connecting to millenials and developing retail trends. Some of the most popular shops include Ashby, Clementine and Need Supply Co., among dozens of others. In the heart of Carytown is the historic Byrd Theater and within walking distance or a quick drive are additional venues such as VMFA, the Virginia Historical Society and Byrd Park. In addition to a wide variety of restaurants, such as Can Can Brasserie and Mellow Mushroom, Carytown offers four grocery stores, including locally-owned Ellwood Thompson’s, which is the largest organic grocery store in Virginia. Lastly, Carytown hosts some of the most popular and largest festivals in the state including the Watermelon Festival, Wine Festival and French Film Festival, as well as happy hours, concerts, film screenings and live events multiple times each week.

28 Location Overview THE FAN DISTRICT/VCU

The Fan District is said to be the largest intact Victorian Neighborhood in the U.S. with approximately 2,000 townhouses in the diverse architectural styles of that period. The streets spread out towards the west in the shape of a fan, hence the name of this historic district.

The area is also home to numerous amenities, a multitude of events and Virginia Commonwealth University. Some retailers and restaurants of the neighborhood include Walmart, Ipanema Café, Edo’s Squid and Kroger. A notable annual neighborhood event is the Monument Avenue 10K, which hosts 36,000 racers annually and has been named one of the best races in the nation by USA Today. The annual Easter on Parade also attracts 25,000+ people each year and the Fan District Association frequently organizes other events with community participation including Holiday House Tour, Historic Garden Week and Winter Carnival.

Location Overview 29 NEIGHBORHOOD ATTRACTIONS

SCOTT’S ADDITION MUSEUM DISTRICT 11 Carytown Farmer’s Market FAN DISTRICT 23 Branch & Vine 3201 W Cary St 2001 1/2 W Main St 1 The Dairy Bar 1 Virginia Historical Society 1 Branch Museum of 1602 Roseneath Rd 428 N Boulevard 12 Lou Lou Boutique Architecture and Design 24 Bacchus 3158 W Cary St 2501 Monument Ave 2 N Meadow St 2 The Veil Brewing Co 2 Virginia Museum of Fine Arts 1301 Roseneath Rd 200 N Boulevard 13 Roan 2 Athens Tavern 25 Heritage 3142 W Cary St 401 N Robinson St 1627 W Main St 3 Ardent Craft Ales 3 Children’s Museum of Richmond 3200 W Leigh St 2626 W Broad St 14 Crème de la Crème 3 Secco Wine Bar 26 Foo Dog 3156 W Cary St 325 N Robinson St 1537 W Main St 4 Blue Bee Cider 4 Science Museum of Virginia 1320 Summit Ave 2500 W Broad St 15 Philosophie 4 Boka Tako Bar 27 Canon & Draw Brewing Co 3132 W Cary St 304 N Robinson St 1529 W Main St 5 Supper 5 Chiocca’s 1215 Summit Ave 425 N Belmont Ave 16 The Broken Tulip 5 Metro Bar & Grill 28 City Dogs 3129 W Cary St 301 N Robinson St 1309 W Main St 6 Isley Brewing Company 6 Black Hand Coffee 1715 Summit Ave 3101 Patterson Ave 17 Agee’s Bicycles 6 Curbside Café 29 Pupatella 3116 W Cary St 2525 Hanover Ave 1 N Morris St 7 Urban Farmhouse 7 Bandito’s Burrito Lounge Market & Café 2905 Patterson Ave 18 Clementine 7 Early Bird Biscuit Co 30 Roxy Café 3015 Norfolk St 3118 W Cary St 119 N Robinson St 1104 W Main St 8 Akida Japanese Restaurant 8 Fat Dragon 606 N Sheppard St 19 Carytown Cupcakes 8 Commercial Taphouse 31 Virginia Commonwealth 1200 N Boulevard 3111 W Cary St 111 N Robinson St University 9 Belmont Pizzaria 1015 Floyd Ave 9 En Su Boca 602 N Belmont Ave 20 Ruth & Ollie 9 Spoonbread Bistro 1001 N Boulevard 3108 W Cary St 2526 Floyd Ave 32 Altria Theater 10 Buddy’s Place 6 N Laurel St 10 Buz and Ned’s Real Barbecue 600 N Sheppard St 21 Need Supply Co 10 Halcyon Vintage Clothing 1119 N Boulevard 3100 W Cary St 117 N Robinson St 33 Rumors Boutique 11 Sheppard Street Tavern 723 W Broad St 11 Three Notch’d 600 N Sheppard St 22 Hooked 11 Black Swan Books Brewing Company 3027 W Cary St 2601 W Main St 34 Insomnia Cookies 2930 W Broad St 12 Little Saint 918 W Grace St 2901 Park Ave 23 Merrymaker 12 Social 52 12 King of Pops 3022 W Cary St 2619 W Main St 35 Barnes & Noble 3001 W Clay St CARYTOWN 1111 W Broad St 24 Mellow Mushroom 13 Helen’s Restaurant 13 Black Heath Meadery 1 Old Virginia Tobacco Co 3012 W Cary St 2527 W Main St 36 Ipanema Café 1313 Altamont Ave 3532 W Cary St 917 W Grace St 25 Bonnie’s Boutique 14 3 Monkeys Bar & Grill 14 Busky Cider 2 Carytown Burger 3009 W Cary St 2525 W Main St 37 Strange Matter 2910 W Leigh St 3500 W Cary St 929 W Grace St 26 Luxor Vintage Clothing 15 Stewart Gallery 15 Moore Street Café 3 CaryTown Teas 3001 W Cary St 2518 W Main St 38 Kung Fu Tea 2904 W Moore St 24 S Nansemond St 946 W Grace St 27 The Daily Kitchen and Bar 16 Uptown Market & Deli 16 Lamplighter Coffee Roasters 4 Doner Kebab 2934 W Cary St 2400 W Main St 39 My Noodle Bar 1719 Summit Ave 3459 W Cary St 1600 Monument Ave 28 Carytown Sushi 17 F.W. Sullivans 17 Reservoir Distillery 5 Garden Grove Brewing 2923 W Cary St 2401 W Main St 40 Firehouse Theater 1800 Summit Ave A 3445 W Cary St 1609 W Broad St 29 Bygones Vintage Clothing 18 Pik Nik 18 Boulevard Burger and Brew 6 Anthill Antiques 2916 W Cary St 2301 W Main St 41 The Camel 1300 N Boulevard 3439 W Cary St 1621 W Broad St 30 The Byrd Theatre 19 Pearl Raw Bar 19 Vasen Brewing Company 7 Home Sweet Home 2908 W Cary St 2229 W Main St 42 Lucky’s Bicycles 3331 W Moore St 3433 W Cary St 708 N Meadow St 31 Citizen Burger Bar 20 Sticky Rice 20 The Hof Garden 8 East Coast Provisions 2907 W Cary St 2232 W Main St 43 The Pig & Pearl 2818 W Broad St 3411 W Cary St 2053 W Broad St 32 Cartwheels & Coffee 21 Rowland 21 Brenner Pass 9 Ciao 2820 W Cary St 2132 W Main St 44 Idlehands Bread Co 3200 Rockbridge St 3409 W Cary St 407 Strawberry St 33 Momotaro Sushi 22 The Sidewalk Café 22 The Circuit Arcade Bar 10 The Pit and the Peel 2803 W Cary St 2101 W Main St 3121 W Leigh T 3321 W Cary St

30 Location Overview SCOTT’S ADDITION

1 21 19 17

16 3 6 2 7 22 1518 4 14 12 8 5 13 10 11 9 20 MUSEUM DISTRICT 3

9 11 108 4 6 12 7 5

1 1 43 CARYTOWN 2 1 2 42 2 4 3 3 5 4 5 6 44 6 7 9 8 14 40 12 41 10 13 15 17 7 11 18 21 8 16 2023 9 19 24 30 10 39 22 27 2526 29 32 28 12 THE FAN 31 11 15 33 13 16 14 35 38 17 20 21 37 34 18 19 36 33 22 24 23

31 25 26 VCU CAMPUS 27 29 32 28 30

Location Overview 31 BYRD PARK

Boulevard

Cary St

VIRGINIA MUSEUM OF FINE ARTS

CARYTOWN

KROGER

CVS

PANERA PUBLIX THE FRESH (comin soon) MARKET

WALGREENS

ELWOOD THOMPSON’S

Beltline Ey

32 Location Overview BYRD PARK

Boulevard

Cary St

VIRGINIA MUSEUM OF FINE ARTS

CARYTOWN

KROGER

CVS

PANERA PUBLIX THE FRESH (comin soon) MARKET

WALGREENS

ELWOOD THOMPSON’S

Beltline Ey

Location Overview 33

THE GALLERY PROPERTY OVERVIEW PROPERTY OVERVIEW – THE GALLERY

PROPERTY CHARACTERISTICS PERSONNEL OVERVIEW 308 N Nansemond St POSITION FULL-/PART-TIME ADDRESS Richmond, VA Property Manager 1 Full-Time COMPLETION DATE 1960, renovated 2016-2017 Leasing Specialist 1 Full-Time NUMBER OF UNITS 157 Service Manager 1 Full-Time NUMBER OF BUILDINGS 9 Service Technician 1 Full-Time NUMBER OF STORIES 2 & 3 LAND AREA (ACRES) 4.99 DENSITY (UNITS PER ACRE) 48.50 AVERAGE UNIT SIZE 768 SF NET RENTABLE AREA 120,548 SF MKT RENT/UNIT $1,225 MKT RENT/SF $1.60 OCCUPANCY 92.99% TAX ID NUMBER W0001608001/W0001608005 BUILDING STYLE Garden BUILDING BREEZEWAYS/ Concrete/Wood HALLWAYS BUILDING STAIRS Concrete/Wood EXTERIOR Brick STRUCTURE/FRAMING Concrete/CMU/Wood FOUNDATION Basement/Crawl Space ROOF TPO/Shingle WINDOWS New HVAC Compressor/heat pump WATER HEATER Individual units ELECTRICAL Copper PLUMBING Copper piping ACCESS Controlled access/Direct Entry FIRE AND SAFETY Fire alarm, no sprinkler PARKING AREA 116, remaining adjacent on-street parking LAUNDRY In-unit Fox Elementary School SCHOOLS Hill Middle School Jefferson High School

36 Property Overview – The Gallery PROPERTY OVERVIEW – THE GALLERY

UTILITIES UTILITY POWER SOURCE PAID BY SERVICE SUPPLIED BY OTHER DETAIL Heating Electric Resident Dominion Tenant Air Conditioning Electric Resident Dominion Tenant Cooking Electric Resident Dominion Tenant Hot Water Electric Resident Dominion Tenant Water/Sewer N/A Resident City of Richmond Velocity RUBS* Basic Cable N/A Resident Verizon / Comcast Tenant Telephone N/A Resident Verizon / Comcast Tenant Valet Trash and Trash Removal Resident Republic Valet Waste Enclosed Dumpster

*Utilities are submetered but billing is controlled by Velocity

Property Overview – The Gallery 37 UNIT MIX – THE GALLERY

DETAILED UNIT MIX MONTHLY MKT ANNUAL MKT UNIT TYPE UNITS % TYPE UNIT SF MKT RENT/MO MKT RENT/PSF TOTAL SF TOTAL TOTAL Rothko 24 15.29% 580 $1,058 $1.82 13,920 $25,395 $304,740 (1BD/1BA) Pollock 28 17.83% 650 $1,050 $1.62 18,200 $29,400 $352,800 (1BD/1BA) Kooning-S (1BD/1BA) 21 13.38% 820 $1,267 $1.55 17,220 $26,607 $319,284 with Den Warhol 52 33.12% 835 $1,299 $1.56 43,420 $67,548 $810,576 (2BD/1BA) Kooning 12 7.64% 820 $1,299 $1.58 9,840 $15,588 $187,056 (2BD/1BA) Johns 11 7.01% 835 $1,299 $1.56 9,185 $14,289 $171,468 (2BD/1BA) Warhol XL 7 4.46% 945 $1,525 $1.61 6,615 $10,675 $128,100 (2BD/1BA) Nansemond 2 1.27% 1,074 $1,450 $1.35 2,148 $2,900 $34,800 (2BD/1BA) TOTAL 157 100.00% 768 $1,225 $1.60 120,548 $192,402 $2,308,824

TOTALS/AVERAGES

Total # of Units 157  1 BED Average Unit Size 768 SF  2 BED Net Rentable SF 120,548 Market Average Rent/Month $1,225 Gross Potential Monthly Rent $192,402 Gross Potential Yearly Rent $2,308,824 46% CURRENT OCCUPANCY January 15, 2018 92.99%

54%

38 Property Overview – The Gallery Property Overview – The Gallery 39 THE GALLERY COMMUNITY AMENITIES

+ BRAND NEW CLUBHOUSE + RESORT-STYLE POOL + POOL TABLE + FITNESS CENTER + DOG PARK + OUTDOOR SHADED LOUNGE AREAS + GAS GRILLING STATIONS + PICNIC AREA + DESIGNATED PARKING AVAILABLE + CONTROLLED ACCESS + PROFESSIONAL ON-SITE MANAGEMENT + 24 HOUR EMERGENCY MAINTENANCE + VALET TRASH SERVICE + MONTHLY RESIDENT EVENTS

40 Property Overview – The Gallery THE GALLERY UNIT FEATURES

+ GOURMET KITCHENS WITH GRANITE COUNTERTOPS + STAINLESS STEEL APPLIANCES + STYLISH FLOORING + DESIGNER-SELECTED PLUMBING FIXTURES + WASHER AND DRYER IN APARTMENT + TILE FLOORING IN BATHROOM + PET FRIENDLY

Property Overview – The Gallery 41

THE COLLECTION PROPERTY OVERVIEW PROPERTY OVERVIEW – THE COLLECTION

PROPERTY CHARACTERISTICS PROPERTY SPECIFICS ADDRESS Multiple addresses ADDRESS ACRES TAX ID UNITS COMPLETION DATE 1920s 3224 Stuart 0.171 W0001464034 12 NUMBER OF UNITS 219 3228 Stuart 0.172 W0001464036 12 NUMBER OF BUILDINGS 20 3408 Park 0.198 W0001619020 12 NUMBER OF STORIES 3 2810 Monument 0.146 W0001291022 6 AVERAGE UNIT SIZE 810 SF 110 N Boulevard 0.251 W0001245009 19 NET RENTABLE AREA 177,390 SF 2903 Monumnet 0.131 W0001290007 7 MKT RENT/UNIT $1,203 706 N Boulevard 0.098 W0001291019 6 MKT RENT/SF $1.49 808 N Boulevard 0.149 W0001292022 12 OCCUPANCY 97.3% 811 N Boulevard 0.074 W0001214049 12 BUILDING STYLE Garden 801 N Boulevard 0.102 W0001214047 12 BUILDING BREEZEWAYS/HALL- 711 N Boulevard 0.172 W0001210002 12 Wood WAYS 805 N Boulevard 0.122 W0001214048 12 BUILDING STAIRS Wood 705 N Boulevard 0.128 W0001210001 12 EXTERIOR Brick 2734 W Grace 0.188 W0001214046 12 STRUCTURE/FRAMING Wood/Masonry 2730 W Grace 0.131 W0001214045 12 FOUNDATION Basement 2726 W Grace 0.188 W0001214044 12 ROOF Rubber 2714 W Grace 0.223 W0001214038 12 WINDOWS Original 803-809 N Robinson 0.101 W0001130023 4 BALCONIES Wood 2516-2518 W Grace 0.125 W0001130021 12 BALCONY DOORS Wood 25 N Boulevard 0.115 W0001202030 9 HVAC Compressor/heat pump TOTAL 2.985 219 WATER HEATER Individual units ELECTRICAL Copper PLUMBING Copper piping PERSONNEL OVERVIEW ACCESS Controlled access POSITION FULL-/PART-TIME FIRE AND SAFETY Fire alarms Property Manager 1 Full-Time In-unit (24 units share common LAUNDRY Leasing Specialist 2 Full-Time laundry area) Service Manager 1 Full-Time Fox Elementary School SCHOOLS Hill Middle School Service Technician 2 Full-Time Jefferson High School

44 Property Overview – The Collection PROPERTY OVERVIEW – THE COLLECTION

UTILITIES UTILITY POWER SOURCE PAID BY SERVICE SUPPLIED BY OTHER DETAIL Heating Gas Resident City of Richmond Tenant Air Conditioning Electric Resident Dominion Tenant Cooking Gas Resident City of Richmond Tenant Hot Water Gas Resident City of Richmond Tenant Water/Sewer N/A Resident City of Richmond Velocity RUBS Basic Cable N/A Resident Verizon / Comcast Tenant Telephone N/A Resident Verizon / Comcast Tenant Trash Removal Dumpster Resident Republic Valet Waste

*Utilities are submetered but billing is controlled by Velocity

Property Overview – The Collection 45 UNIT MIX – THE COLLECTION

CONSOLIDATED UNIT MIX MONTHLY MKT ANNUAL MKT UNIT TYPE UNITS % TYPE UNIT SF MKT RENT/MO MKT RENT/PSF TOTAL SF TOTAL TOTAL 1BD/1BA 111 50.68% 597 $950 $1.59 66,228 $105,470 $1,265,640 2BD/1BA 96 43.84% 985 $1,434 $1.46 94,533 $137,675 $1,652,100 3BD/2BA 12 5.48% 1,379 $1,773 $1.29 16,542 $21,280 $255,360 TOTAL 219 100.00% 810 $1,207 $1.49 177,303 $264,425 $3,173,100

TOTALS/AVERAGES

Total # of Units 219  1 BED Average Unit Size 810 SF  2 BED Net Rentable SF 177,303  3 BED 5% Market Average Rent/Month $1,207 Gross Potential Monthly Rent $264,425 Gross Potential Yearly Rent $3,173,100

CURRENT OCCUPANCY January 15, 2018 97.26% 44% 51%

46 Property Overview – The Collection Property Overview – The Collection 47 THE COLLECTION COMMUNITY AMENITIES (LOCATED AT THE GALLERY)

48 Property Overview – The Collection THE COLLLECTION UNIT FEATURES

+ GOURMET KITCHENS WITH GRANITE COUNTERTOPS* + STAINLESS STEEL APPLIANCES* + STYLISH FLOORING + DESIGNER-SELECTED PLUMBING FIXTURES + WASHER AND DRYER IN MOST UNITS + TILE FLOORING IN BATHROOM + PET FRIENDLY + CEILING FANS + BALCONIES* + FRENCH DOORS* *in select units

Property Overview – The Collection 49 COLLECTION PROPERTY ADDRESSES

8 9 10 11 12 15 4 7 6 17 14 13 16 18

2 1 5

50 Property Overview – The Collection 1. 3224 Stuart Ave 8. 808 N Boulevard 15. 2730 W Grace St

12 Units 12 Units 12 Units

2. 3228 Stuart Ave 9. 811 N Boulevard 16. 2726 W Grace St

12 Units 12 Units 12 Units

5. 2516-2518 W Grace St 12. 711 N Boulevard 19. 110 N Boulevard

12 Units 12 Units 19 Units

6. 2903 Monument Ave 13. 705 N Boulevard 20. 25 N Boulevard 19 7 Units 12 Units 9 Units 20

7. 706 N Boulevard 14. 2734 W Grace St 21. The Gallery

6 Units 12 Units 157 Units

Property Overview – The Collection 51 3224 STUART AVE

PROPERTY CHARACTERISTICS YEAR BUILT 1926 UNITS 12 LAND AREA (ACRES) 0.171 AVERAGE UNIT SIZE 703 SF NET RENTABLE AREA 8,436 SF MARKET RENT/UNIT $1,249 MARKET RENT/PSF $1.78 TAX ID NUMBER W0001464034 OCCUPANCY 91.67%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 6 610 $1,140 $1.87 + Located next to another Collection property, 3228 Stuart Ave 2X1 6 795 $1,357 $1.73 TTL/AVG + 5 blocks north of the Carytown retail corridor 12 703 $1,258 $1.79 + 3 blocks west of the Virginia Museum of Fine Arts + Greek Revival façade with southern exposure on front and side balconies

RENOVATION DETAIL + In-Unit Cost Total: $194,421 ($16,202/unit) + Common Area Cost Total: $15,923 + Exterior Costs Total: $82,103 Building Total: $292,446 ($24,370/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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52 Property Overview – The Collection 3228 STUART AVE

PROPERTY CHARACTERISTICS YEAR BUILT 1926 UNITS 12 LAND AREA (ACRES) 0.172 AVERAGE UNIT SIZE 703 SF NET RENTABLE AREA 8,436 SF MARKET RENT/UNIT $1,258 MARKET RENT/PSF $1.79 TAX ID NUMBER W0001464036 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 6 715 $1,140 $1.87 + Located next to another Collection property, 3224 Stuart Ave 2X1 6 1,052 $1,375 $1.73 TTL/AVG + 5 blocks north of the Carytown retail corridor 12 703 $1,258 $1.79 + 3 blocks west of the Virginia Museum of Fine Arts + Greek Revival façade with southern exposure on front and side balconies

RENOVATION DETAIL + In-Unit Cost Total: $192,917 ($16,076/unit) + Common Area Cost Total: $18,068 + Exterior Costs Total: $81,790 Building Total: $292,774 ($24,398/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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Property Overview – The Collection 53 3408 PARK AVE

PROPERTY CHARACTERISTICS YEAR BUILT 1925 UNITS 12 LAND AREA (ACRES) 0.198 AVERAGE UNIT SIZE 870 SF NET RENTABLE AREA 10,440 SF MARKET RENT/UNIT $1,490 MARKET RENT/PSF $1.71 TAX ID NUMBER W0001619020 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 2X1 12 870 $1,490 $1.71 + Located near the Gallery and 2 Collection buildings on TTL/AVG 12 870 $1,490 $1.71 Stuart Avenue + 6 blocks south of the thriving Scott’s Addition neighborhood + 6 blocks west of the Virginia Museum of Fine Arts + Tudor style façade with southern exposed balconies

RENOVATION DETAIL + In-Unit Cost Total: $202,430 ($16,869/unit) + Common Area Cost Total: $18,068 + Exterior Costs Total: $84,830 Building Total: $305,328 ($25,444/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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54 Property Overview – The Collection 2810 MONUMENT AVE

PROPERTY CHARACTERISTICS YEAR BUILT 1918 UNITS 6 LAND AREA (ACRES) 0.146 AVERAGE UNIT SIZE 1,563 SF NET RENTABLE AREA 9,378 SF MARKET RENT/UNIT $1,550 MARKET RENT/PSF $0.99 TAX ID NUMBER W0001291022 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 2X1 6 1,563 $1,550 $0.99 + Located within walking distance to 14 Collection properties TTL/AVG 6 1,563 $1,550 $0.99 + 2 blocks south of the thriving Scott’s Addition neighborhood + 4 blocks north of the Virginia Museum of Fine Arts + Jeffersonian façade with grand columns and balconies overlooking Monument Ave

RENOVATION DETAIL + In-Unit Cost Total: $30,305 ($5,051/unit) + Common Area Cost Total: $5,500 + Exterior Costs Total: $41,525 Building Total: $77,330 ($12,888/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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Property Overview – The Collection 55 2516-2518 W GRACE ST

PROPERTY CHARACTERISTICS YEAR BUILT 1923 UNITS 12 LAND AREA (ACRES) 0.125 AVERAGE UNIT SIZE 749 SF NET RENTABLE AREA 8,988 SF MARKET RENT/UNIT $1,100 MARKET RENT/PSF $1.47 TAX ID NUMBER W0001130021 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 12 749 $1,100 $1.47 + Located within walking distance to 14 Collection properties TTL/AVG 12 749 $1,100 $1.47 + 2 blocks south of the thriving Scott’s Addition neighborhood + 4 blocks north of the Virginia Museum of Fine Arts + Historic building with distinctive pillar columns on the southern exposed balconies

RENOVATION DETAIL + In-Unit Cost Total: $147,175 ($12,265/unit) + Common Area Cost Total: $30,655 + Exterior Costs Total: $60,818 Builting Total: $238,648($19,887/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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56 Property Overview – The Collection 2903 MONUMENT AVE

PROPERTY CHARACTERISTICS YEAR BUILT 1915 UNITS 7 LAND AREA (ACRES) 0.131 AVERAGE UNIT SIZE 1,490 SF NET RENTABLE AREA 10,427 SF MARKET RENT/UNIT $1,740 MARKET RENT/PSF $1.17 TAX ID NUMBER W0001290007 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 1 857 $1,000 $1.17 + Located within walking distance to 14 Collection properties 3X1 6 1,595 $1,863 $1.17 TTL/AVG 7 1,490 $1,740 $1.17 + 2 blocks south of the thriving Scott’s Addition neighborhood + 4 blocks north of the Virginia Museum of Fine Arts + Jeffersonian façade with grand columns and balconies overlooking Monument Ave

RENOVATION DETAIL + In-Unit Cost Total: $93,147 ($13,307/unit) + Common Area Cost Total: $12,265 + Exterior Costs Total: $78,540 Building Total: $183,952 ($26,279/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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Property Overview – The Collection 57 706 N BOULEVARD

PROPERTY CHARACTERISTICS YEAR BUILT 1919 UNITS 6 LAND AREA (ACRES) 0.098 AVERAGE UNIT SIZE 1,583 SF NET RENTABLE AREA 9,498 SF MARKET RENT/UNIT $1,850 MARKET RENT/PSF $1.17 TAX ID NUMBER W0001291019 OCCUPANCY 83.33%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 2X1 6 1,583 $1,850 $1.17 + Located within walking distance to 14 Collection properties TTL/AVG 6 1,583 $1,850 $1.17 + 2 blocks south of the thriving Scott’s Addition neighborhood + 4 blocks north of the Virginia Museum of Fine Arts + Jeffersonian façade with grand columns and balconies overlooking N Boulevard

RENOVATION DETAIL + In-Unit Cost Total: $92,433 ($15,405/unit) + Common Area Cost Total: $9,515 + Exterior Costs Total: $52,969 Building Total: $154,916 ($25,819/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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58 Property Overview – The Collection 808 N BOULEVARD

PROPERTY CHARACTERISTICS YEAR BUILT 1922 UNITS 12 LAND AREA (ACRES) 0.149 AVERAGE UNIT SIZE 615 SF NET RENTABLE AREA 7,380 SF MARKET RENT/UNIT $988 MARKET RENT/PSF $1.61 TAX ID NUMBER W0001292022 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 12 615 $988 $1.61 + Located within walking distance to 14 Collection properties TTL/AVG 12 615 $988 $1.61 + 1 block south of the thriving Scott’s Addition neighborhood + 5 blocks north of the Virginia Museum of Fine Arts + Historic building with grand columns and balconies overlooking N Boulevard

RENOVATION DETAIL + In-Unit Cost Total: $114,552 ($9,546/unit) + Common Area Cost Total: $12,095 + Exterior Costs Total: $29,509 Building Total: $156,156 ($13,013/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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Property Overview – The Collection 59 811 N BOULEVARD

PROPERTY CHARACTERISTICS YEAR BUILT 1924 UNITS 12 LAND AREA (ACRES) 0.074 AVERAGE UNIT SIZE 478 SF NET RENTABLE AREA 5,736 SF MARKET RENT/UNIT $850 MARKET RENT/PSF $1.78 TAX ID NUMBER W0001214049 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 12 478 $850 $1.78 + Located within walking distance to 14 Collection properties TTL/AVG 12 478 $850 $1.78 + 1 block south of the thriving Scott’s Addition neighborhood + 5 blocks north of the Virginia Museum of Fine Arts + Historic building with distinctive columns and balconies overlooking N Boulevard

RENOVATION DETAIL + In-Unit Cost Total: $114,510 ($9,542/unit) + Common Area Cost Total: $11,325 + Exterior Costs Total: $33,088 Building Total: $158,922 ($13,244/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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60 Property Overview – The Collection 805 N BOULEVARD

PROPERTY CHARACTERISTICS YEAR BUILT 1924 UNITS 12 LAND AREA (ACRES) 0.122 AVERAGE UNIT SIZE 657 SF NET RENTABLE AREA 7,884 SF MARKET RENT/UNIT $1,080 MARKET RENT/PSF $1.64 TAX ID NUMBER W0001214048 OCCUPANCY 91.67%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 6 515 $850 $1.65 + Located within walking distance to 14 Collection properties 2X1 6 799 $1,310 $1.64 TTL/AVG 12 657 $1,080 $1.64 + 1 block south of the thriving Scott’s Addition neighborhood + 5 blocks north of the Virginia Museum of Fine Arts + Historic building with distinctive columns and balconies overlooking N Boulevard

RENOVATION DETAIL + In-Unit Cost Total: $104,792 ($8,733/unit) + Common Area Cost Total: $11,165 + Exterior Costs Total: $31,251 Building Total: $147,208 ($12,267/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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Property Overview – The Collection 61 801 N BOULEVARD

PROPERTY CHARACTERISTICS YEAR BUILT 1925 UNITS 12 LAND AREA (ACRES) 0.102 AVERAGE UNIT SIZE 671 SF NET RENTABLE AREA 8,049 SF MARKET RENT/UNIT $1,111 MARKET RENT/PSF $1.66 TAX ID NUMBER W0001214047 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 6 511 $913 $1.79 + Located within walking distance to 14 Collection properties 2X1 6 831 $1,310 $1.58 TTL/AVG 12 671 $1,111 $1.66 + 1 block south of the thriving Scott’s Addition neighborhood + 5 blocks north of the Virginia Museum of Fine Arts + Historic building with distinctive columns and balconies overlooking N Boulevard

RENOVATION DETAIL + In-Unit Cost Total: $104,529 ($8,711/unit) + Common Area Cost Total: $11,715 + Exterior Costs Total: $36,979 Building Total: $153,223 ($12,769/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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62 Property Overview – The Collection 711 N BOULEVARD

PROPERTY CHARACTERISTICS YEAR BUILT 1925 UNITS 12 LAND AREA (ACRES) 0.172 AVERAGE UNIT SIZE 788 SF NET RENTABLE AREA 9,459 SF MARKET RENT/UNIT $1,116 MARKET RENT/PSF $1.42 TAX ID NUMBER W0001210002 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 6 619 $858 $1.39 + Located within walking distance to 14 Collection properties 2X1 6 958 $1,375 $1.44 TTL/AVG 12 788 $1,116 $1.42 + 2 blocks south of the thriving Scott’s Addition neighborhood + 4 blocks north of the Virginia Museum of Fine Arts + Historic building with distinctive columns and balconies overlooking N Boulevard

RENOVATION DETAIL + In-Unit Cost Total: $105,018 ($8,751/unit) + Common Area Cost Total: $11,165 + Exterior Costs Total: $38,123 Building Total: $154,305 ($12,859/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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Property Overview – The Collection 63 705 N BOULEVARD

PROPERTY CHARACTERISTICS YEAR BUILT 1925 UNITS 12 LAND AREA (ACRES) 0.128 AVERAGE UNIT SIZE 788 SF NET RENTABLE AREA 9,459 SF MARKET RENT/UNIT $1,093 MARKET RENT/PSF $1.39 TAX ID NUMBER W0001210001 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 6 619 $850 $1.38 + Located within walking distance to 14 Collection properties 2X1 6 958 $1,225 $1.39 TTL/AVG 12 788 $1,093 $1.39 + 2 blocks south of the thriving Scott’s Addition neighborhood + 4 blocks north of the Virginia Museum of Fine Arts + Historic building with distinctive columns and balconies overlooking N Boulevard

RENOVATION DETAIL + In-Unit Cost Total: $134,210 ($11,184/unit) + Common Area Cost Total: $11,165 + Exterior Costs Total: $48,552 Building Total: $193,926 ($16,161/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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64 Property Overview – The Collection 2734 W GRACE ST

PROPERTY CHARACTERISTICS YEAR BUILT 1924 UNITS 12 LAND AREA (ACRES) 0.188 AVERAGE UNIT SIZE 665 SF NET RENTABLE AREA 7,980 SF MARKET RENT/UNIT $1,100 MARKET RENT/PSF $1.65 TAX ID NUMBER W0001214046 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 6 505 $865 $1.71 + Located within walking distance to 14 Collection properties 2X1 6 825 $1,335 $1.62 TTL/AVG 12 665 $1,100 $1.65 + 2 blocks south of the thriving Scott’s Addition neighborhood + 5 blocks north of the Virginia Museum of Fine Arts + Historic building with distinctive columns and balconies on the south façade

RENOVATION DETAIL + In-Unit Cost Total: $107,755 ($8,980/unit) + Common Area Cost Total: $11,165 + Exterior Costs Total: $46,655 Building Total: $165,575 ($13,798/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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Property Overview – The Collection 65 2730 W GRACE ST

PROPERTY CHARACTERISTICS YEAR BUILT 1919 UNITS 12 LAND AREA (ACRES) 0.131 AVERAGE UNIT SIZE 589 SF NET RENTABLE AREA 7,062 SF MARKET RENT/UNIT $858 MARKET RENT/PSF $1.46 TAX ID NUMBER W0001214045 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 12 589 $858 $1.46 + Located within walking distance to 14 Collection properties TTL/AVG 12 589 $858 $1.46 + 2 blocks south of the thriving Scott’s Addition neighborhood + 5 blocks north of the Virginia Museum of Fine Arts + Historic building with distinctive columns and balconies on the south façade

RENOVATION DETAIL + In-Unit Cost Total: $115,967 ($9,664/unit) + Common Area Cost Total: $16,995 + Exterior Costs Total: $34,320 Building Total: $167,282 ($13,940/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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66 Property Overview – The Collection 2726 W GRACE ST

PROPERTY CHARACTERISTICS YEAR BUILT 1919 UNITS 12 LAND AREA (ACRES) 0.188 AVERAGE UNIT SIZE 641 SF NET RENTABLE AREA 7,686 SF MARKET RENT/UNIT $1,093 MARKET RENT/PSF $1.71 TAX ID NUMBER W0001214044 OCCUPANCY 91.67%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 6 461 $850 $1.84 + Located within walking distance to 14 Collection properties 2X1 6 820 $1,335 $1.63 TTL/AVG 12 641 $1,093 $1.71 + 2 blocks south of the thriving Scott’s Addition neighborhood + 5 blocks north of the Virginia Museum of Fine Arts + Historic building with distinctive columns and balconies on the south façade

RENOVATION DETAIL + In-Unit Cost Total: $114,151 ($9,513/unit) + Common Area Cost Total: $10,775 + Exterior Costs Total: $38,030 Building Total: $162,956 ($13,580/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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Property Overview – The Collection 67 2716 W GRACE ST

PROPERTY CHARACTERISTICS YEAR BUILT 1925 UNITS 12 LAND AREA (ACRES) 0.223 AVERAGE UNIT SIZE 725 SF NET RENTABLE AREA 8,700 SF MARKET RENT/UNIT $1,093 MARKET RENT/PSF $1.51 TAX ID NUMBER W0001214038 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 6 560 $850 $1.52 + Located within walking distance to 14 Collection properties 2X1 6 890 $1,335 $1.50 TTL/AVG 12 725 $1,093 $1.51 + 2 blocks south of the thriving Scott’s Addition neighborhood + 5 blocks north of the Virginia Museum of Fine Arts + Historic building with distinctive columns and balconies on the south façade

RENOVATION DETAIL + In-Unit Cost Total: $115,949 ($9,662/unit) + Common Area Cost Total: $16,995 + Exterior Costs Total: $37,345 Building Total: $170,289 ($14,191/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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68 Property Overview – The Collection 803-809 N ROBINSON ST

PROPERTY CHARACTERISTICS YEAR BUILT 1949 UNITS 4 LAND AREA (ACRES) 0.101 AVERAGE UNIT SIZE 971 SF NET RENTABLE AREA 3,884 SF MARKET RENT/UNIT $1,310 MARKET RENT/PSF $1.35 TAX ID NUMBER W0001130023 OCCUPANCY 100.00%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 1X1 2 932 $1,295 $1.39 + Located within walking distance to 14 Collection properties 2X1 2 1,010 $1,325 $1.31 TTL/AVG 4 971 $1,310 $1.35 + 3 blocks east of the thriving Scott’s Addition neighborhood + 6 blocks north of the Virginia Museum of Fine Arts + Historic building with garages and parking in the rear

RENOVATION DETAIL + In-Unit Cost Total: $38,196 ($9,549/unit) + Common Area Cost Total: $2,970 + Exterior Costs Total: $49,096 Building Total: $90,263 ($22,566/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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Property Overview – The Collection 69 110 N BOULEVARD

PROPERTY CHARACTERISTICS YEAR BUILT 1916 UNITS 19 LAND AREA (ACRES) 0.25 AVERAGE UNIT SIZE 945 SF NET RENTABLE AREA 17,963 SF MARKET RENT/UNIT $1,382 MARKET RENT/PSF $1.46 TAX ID NUMBER W0001214048 OCCUPANCY 94.74%

CONSOLIDATED UNIT MIX PROPERTY HIGHLIGHTS TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF + Located near another Collection property, 25 N Boulevard 1X1 6 715 $1,075 $1.50 + 2 blocks north of the Carytown retail corridor 2X1 13 1,052 $1,523 $1.45 + 1 block south of the Virginia Museum of Fine Arts TTL/AVG 19 945 $1,382 $1.46 + Historic building with grand columns and balconies facing N Boulevard

RENOVATION DETAIL + In-Unit Cost Total: $301,789 ($15,884/unit) + Common Area Cost Total: $28,719 + Exterior Costs Total: $188,100 Building Total: $518,608 ($27,295/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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70 18 Property XOverview – The XCollection X X X X X 19 X X X X X X X 25 N BOULEVARD

PROPERTY CHARACTERISTICS YEAR BUILT 1917 UNITS 9 LAND AREA (ACRES) 0.115 AVERAGE UNIT SIZE 1,163 SF NET RENTABLE AREA 10,470 SF MARKET RENT/UNIT $1,626 MARKET RENT/PSF $1.40 TAX ID NUMBER W0001202030 OCCUPANCY 88.89%

CONSOLIDATED UNIT MIX TYPE UNITS SF MKT RENT/UNIT MKT RENT/PSF PROPERTY HIGHLIGHTS 2X1 3 1,166 $1,512 $1.30 + Located near another Collection property, 110 N Boulevard 3X1 6 1,162 $1,683 $1.45 TTL/AVG 9 1,163 $1,626 $1.40 + 2 blocks north of the Carytown retail corridor + 1 block south of the Virginia Museum of Fine Arts + Historic building with grand columns and balconies facing N Boulevard

RENOVATION DETAIL + In-Unit Cost Total: $165,375 ($18,375/unit) + Common Area Cost Total: $12,870 + Exterior Costs Total: $54,843 Building Total: $233,088 ($25,899/unit)

UNIT RENOVATION SUMMARY REFINISHED STAINLESS GRANITE NEW WOOD BRUSHED NICKEL RENOVATED LED LIGHT UNIT WASHER/DRYER WOOD FLOORS APPLIANCES COUNTERTOPS KITCHEN CABINETS HARDWARE BATHROOM FIXTURES

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Property Overview – The Collection 71

APARTMENT MARKET OVERVIEW RICHMOND EFFECTIVE RENT GROWTH Richmond market fundamentals point to strong apartment demand. Effective rent growth is forecast to increase an average of 2.8% annually from 2018 to 2021 while occupancy is projected to remain around 94.0% to 95.0% during this time.

The Richmond market has been in relative equilibrium in terms of supply and demand. Q417 4.82% Approximately 1,715 units delivered in the market in the past year and 1,440 were absorbed. The 5-year annualized delivery to absorption average is 1,582 to 1,520 units in a market of approximately 72,589 units.

The average 4Q17 going-in cap rate reported for all known apartment class sales greater than $10 million in the Richmond metro area, averages at 6.3%, according to data OCCUPANCY gleaned from Real Capital Analytics. Please note that this average represents the going-in cap rate for all apartment classes, including the Class C. This a very favorable going-in cap rate to value-add investors who are seeking to capitalize on the pricing differential of properties located in similarly-sized secondary markets. Additionally, as the graph below illustrates, the Richmond metro area exhibits the most favorable going-in cap rate when Q417 -95.3% compared to the regional and national averages.

4Q17 APARTMENT CAP RATE COMPARISON BY REGION CONCESSIONS NORTHERN VIRGINIA 5.1%

RALEIGH-DURHAM 5.2% CHARLOTTE 5.4% Q417 -0.1%

NASHVILLE 5.7%

RICHMOND 6.3%

MID-ATLANTIC REGION 5.8%

US NON MAJOR MARKETS 5.7%

US MAJOR MARKETS 4.7%

US NATIONAL 5.6%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

74 Apartment Market Overview NEAR WEST END/OUTER FAN EFFECTIVE RENT GROWTH Near West End/Outer Fan is a top performing submarket in the Richmond area as it ranked 1st in annual effective rent growth (5.6%) and 2nd in occupancy rate (96.7%) out of all 12 Richmond submarkets as of 2Q17. Effective rent is projected to increase an average of 2.7% annually from 2018 to 2020 while occupancy is forecasted to stay above 95.4%. Q417 4.80% Three apartment buildings delivered within 2.0 miles of The Properties in October and November of 2017. These properties include: GRTC Phase II (125 units) and The Cooperage (173 units). The rent growth and occupancy projections for the submarket indicate that these deliveries will be well-received, rapidly leased, and will not adversely affect The Midtown Portfolio. OCCUPANCY NET ABSORPTION/NET DELIVERIES/VACANCY RATE

Q417 96.9%

CONCESSIONS

Q417 -0.1% ASKING RENT LEVELS AND ANNUAL GROWTH

AVERAGE RENT OF NEW DELIVERIES

$1499 WITH ONLY 0.3% CONCESSIONS

Source: Costar

Apartment Market Overview 75

RENT COMPARABLE ANALYSIS RENT COMPARABLES

PROPERTY YEAR BUILT # OF UNITS AVERAGE SF EFFECTIVE RENT EFFECTIVE RENT PSF Preserve at Scott's Addition 1 1310 Roseneath Rd 2015 195 850 $1,532 $1.80 Richmond, VA Cary Street Station 2 101 S Davis Ave 2017 284 808 $1,520 $1.88 Richmond, VA 1 Scott's Addition 3 3031 Norfolk St 2015 129 821 $1,501 $1.83 Richmond, VA Carytown Crossing 4 3500 Kensington Ave 2017 50 858 $1,486 $1.73 Richmond, VA Scott's Edge 5 3408-3410 Moore St 2015 93 900 $1,450 $1.61 Richmond, VA 3600 Centre 6 3600 W Broad St 2013 191 947 $1,407 $1.49 Richmond, VA Malvern Manor 7 41 1/2 Malvern Ave 1946 276 943 $1,401 $1.48 Richmond, VA Lee School Lofts 8 3101 Kensington Ave 1917 40 1,455 $1,359 $0.93 Richmond, VA Cookie Factory Lofts 9 900 Terminal Pl 2015 178 845 $1,347 $1.59 Richmond, VA Kensington Court 10 2900 Kensington Ave 1930 117 992 $1,328 $1.34 Richmond, VA Southern Stove Lofts 11 1215 Hermitage Rd 1902 187 811 $1,144 $1.41 Richmond, VA Courtyard Lofts 12 3200 W Clay St 2016 240 725 $1,074 $1.48 Richmond, VA Kensington Place 13 3501 Kensington Ave 1958 106 770 $1,032 $1.34 Richmond, VA TOTAL/AVERAGE 160 863 $1,351 $1.57 The Collection Midtown 805 N Boulevard St 1924 219 810 $1,198 $1.49 Richmond, VA The Gallery Midtown 308 N Nansemond St 1938 157 768 $1,225 $1.56 Richmond, VA

78 Rent Comparable Analysis 5

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Rent Comparable Analysis 79 SALES COMPARABLE CASE STUDIES

LEE SCHOOL LOFTS

LOCATION: Richmond, VA YEAR BUILT: 1917 NUMBER OF UNITS: 40

SELLER: Monroe Properties BUYER: River Asset Management

PRICE: $7,600,000 PRICE/UNIT: $190,000 CAP RATE: 5.8%

TERRACES AT MANCHESTER

LOCATION: Richmond, VA YEAR BUILT: 2015 NUMBER OF UNITS: 148

SELLER: Purcell Construction Corp BUYER: Richmond Terraces LLC

PRICE: $30,120,000 PRICE/UNIT: $203,513 CAP RATE: 5.5%

80 Financial Analysis SALES COMPARABLE CASE STUDIES

WELLESLEY TERRACE

LOCATION: Richmond, VA YEAR BUILT: 1989 NUMBER OF UNITS: 340

SELLER: Sun Life Financial Inc BUYER: GSC

PRICE: $51,127,657 PRICE/UNIT: $150,375 CAP RATE: 5.6%

COPPER SPRING

LOCATION: Richmond, VA YEAR BUILT: 1989 NUMBER OF UNITS: 366

SELLER: Copper Springs LLC BUYER: StoneBridge Investments

PRICE: $54,200,000 PRICE/UNIT: $148,087 CAP RATE: 5.5%

Financial Analysis 81 SALES COMPARABLE CASE STUDIES

OXYGEN AT CENTERPOINTE

LOCATION: Midlothian, VA YEAR BUILT: 2014 NUMBER OF UNITS: 255

SELLER: Centerpointe Associates BUYER: Preferred Apartment Communities

PRICE: $45,830,000 PRICE/UNIT: $179,725 CAP RATE: 5.8%

BROAD STREET APARTMENTS

LOCATION: Richmond, VA YEAR BUILT: 1910/2004 NUMBER OF UNITS: 102

SELLER: C-III Investment Management BUYER: SNP Development LLC

PRICE: $15,000,000 PRICE/UNIT: $147,059 CAP RATE: 5.5%

82 Financial Analysis Financial Analysis 83

FINANCIAL ANALYSIS MIDTOWN PORTFOLIO ROLLUP

Year 1 Starting 06/01/18 INCOME Totals Per Unit % of GSR

Gross Scheduled Rent 5,691,702 15,138 100.00% (Gain)/Loss-to-Lease 163,290 434 2.87% Gross Potential Income $5,528,412 $14,703 97.13%

Vacancy 284,585 757 5.00% Concessions 20,411 54 0.36% Bad Debt 14,229 38 0.25% Net Rental Income $5,209,187 $13,854 91.52%

Utility Reimbursement 172,906 460 3.04% Parking Income 18,000 48 0.32% Trash Income 80,582 214 1.42% Pet Income 81,216 216 1.43% Other Income 199,595 531 3.51% Total Other Income $552,299 $1,469 9.70%

Effective Gross Income $5,761,486 $15,323 101.23%

EXPENSES Buyer's Exp Per Unit % of EGI

Repairs and Maintenance 57,050 152 0.99% Payroll 598,987 1,593 10.40% Administrative 91,763 244 1.59% Marketing 60,022 160 1.04% Contract Services 161,380 429 2.80% Turnover 115,140 306 2.00% Utilities 235,997 628 4.10% Total Variable Expenses $1,320,339 $3,512 22.92%

Taxes 551,364 1,466 9.57% Tax abatement (218,826) (582) -3.80% Insurance 97,800 260 1.70% Management Fee 188,674 502 3.27% Total Operating Expenses $1,939,351 $5,158 33.66%

Capital Reserves 112,800 300 1.96% Total Expenses $2,052,151 $5,458 35.62%

NET OPERATING INCOME $3,709,335 $9,865 64.38%

86 Financial Analysis THE COLLECTION VALUE-ADD

The Unit Upgrade Summary assumes 5 units/month or 60 per year will be renovated. Unit downtime includes one month for construction and an additional month of vacancy before the unit is rented. Each unit will achieve a premium of $150 per month based upon what the Property is currently achieving and the premiums will grow at the same percentage as market rents. 164 unrenovated and partially renovated units will be renovated and the annual turnover assumption is 55% Based on these assumptions, Annual Upgrade Revenue is highlighted in grey below.

Trailing 12 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Market Rent Before Upgrades: $3,058,729 $3,218,910 $3,299,383 $3,381,867 $3,466,414 $3,553,074 $3,641,901 $3,732,949 Annual Upgrade Revenue: $59,963 $174,929 $290,114 $325,846 $333,992 $342,341 $350,900 Market Rent Total: $3,058,729 $3,278,873 $3,474,312 $3,671,982 $3,792,260 $3,887,066 $3,984,243 $4,083,849

Trailing 12 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Cumulative Upgrade Revenue: $59,963 $234,892 $525,006 $850,851 $1,184,843 $1,527,185 $1,878,085 Total Upgrade Program Cost: $360,000 $720,000 $984,000 $984,000 $984,000 $984,000 $984,000 103% 105% 108% 110% 113% 116% 119% Trailing 12 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Tier 1 Units Upgraded: 60 120 164 164 164 164 164 Units Already Upgraded: 55 55 55 55 55 55 55 55 Total Units Upgraded: 55 115 175 219 219 219 219 219

Avg. Market Rent per Unit: $1,164 $1,248 $1,322 $1,397 $1,443 $1,479 $1,516 $1,554 Additional Upgrade Vacancy: 2.3% 2.3% 1.7% 0.0% 0.0% 0.0% 0.0% Annual Upgrade Capital Expense: $360,000 $360,000 $264,000 $0 $0 $0 $0

Trailing 12 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Rent Growth Before Upgrades: 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% Rent Growth After Upgrades: 7.2% 6.0% 5.7% 3.3% 2.5% 2.5% 2.5%

Total Units: 219 Year 1 Total Units Upgraded: 60 Year 6 Total Units Upgraded: Units Already Upgraded: 55 Year 2 Total Units Upgraded: 60 Year 7 Total Units Upgraded: Annual Unit Turnover: 55% Year 3 Total Units Upgraded: 44 Year 8 Total Units Upgraded: Maximum Unit Upgrades Started Monthly: 5 Year 4 Total Units Upgraded: 0 Year 9 Total Units Upgraded: Minimum Unit Upgrades Started Monthly: 5 Year 5 Total Units Upgraded: 0 Year 10 Total Units Upgraded: Starting Month: Month 1

UNIT UPGRADE TIER 1

Remaining Units Upgraded: 100% Year 1 Units Upgraded: 60 Year 6 Units Upgraded: 0 Upgrade Capex per Unit: $6,000 Year 2 Units Upgraded: 60 Year 7 Units Upgraded: 0 Add'l Monthly Rent per Unit: $150 Year 3 Units Upgraded: 44 Year 8 Units Upgraded: 0 Investment Payback: 3.3 Years Year 4 Units Upgraded: 0 Year 9 Units Upgraded: 0 Add'l Turnover Time: 1 Month Year 5 Units Upgraded: 0 Year 10 Units Upgraded: 0

Trailing 12 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Annual Upgrade Revenue: $59,963 $174,929 $290,114 $325,846 $333,992 $342,341 $350,900 Cumulative Upgrade Revenue: $59,963 $234,892 $525,006 $850,851 $1,184,843 $1,527,185 $1,878,085 Annual Upgrade Capital Expense: $360,000 $360,000 $264,000 $0 $0 $0 $0 Total Upgrade Program Cost: $360,000 $720,000 $984,000 $984,000 $984,000 $984,000 $984,000

Financial Analysis 87 ASSUMPTIONS – THE GALLERY

GROSS SCHEDULED RENT OTHER INCOME Gross Scheduled Rent is based on the current monthly market Proforma Other Income is $81,774 or $521 per unit. Other rents as of December 06, 2017, equating to an average monthly Income includes, but is not limited to various line items including: market rent of $1,281 or $1.67 per SF. The projected Year 1 Application Fees, Move-in Fees and Lease Termination Income. market rent is assumed to $2,472,792 which is an increase of 2.50% in Year 1 from current rents. VARIABLE EXPENSES Variable Expenses is projected to be $559,060 or $3,561 per LOSS-TO-LEASE unit in Year 1 based on the stabilized budget. Loss-to-lease is currently 6.39% of Gross Scheduled Rent and is assumed to be 4.00% in Year 1. REAL ESTATE TAXES The Property’s assessment has already been determined for 2018 VACANCY LOSS tax cycle (Year 1 of ownership). The 2018 assessed value is Vacancy Loss is projected on a stabilized basis to be 5.00% $20,119,000 at the current millage rate of $1.20/ $100.00 of annually. The Property is currently 92.99% occupied as of January assessed value. 15, 2018. TAX ABATEMENT CONCESSIONS The Tax Abatement has been added back to NOI to determine Tax Concessions are assumed to be 0.50% of Gross Scheduled Rent to Abatement cash flow. account for periodic one-time concessions. INSURANCE BAD DEBT Proforma Insurance is $249 per unit based on rates for similar Bad Debt is projected on a stabilized basis to be 0.25% of Gross assets in the market. Scheduled Rent annually throughout the analysis. MANAGEMENT FEE UTILITY INCOME The Management Fee is expected to be 3.25% of the Effective Proforma Utility Income is projected to be $69,656 or $444 and Gross Income. reflects the Property’s current operating upon stabilization. CAPITAL RESERVES TRASH INCOME Analysis assumes Capital Reserves at $300 per unit to total Proforma Trash Income is projected to be $30,626 or $195 per $47,100. This figure is considered to be market for assets of this unit based on T3 Income. vintage and location and with the amount of capital already spent on the properties. PET INCOME Proforma Pet Income is projected to be $33,912 or $216 per unit in Year 1 based on T3 Income.

TAX ABATEMENT SUMMARY

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Gallery Abatement $136,428 $136,428 $136,428 $136,428 $136,428 $136,428 $102,321 $68,214 $34,107 $0

88 Financial Analysis PROFORMA FINANCIALS – THE GALLERY

Year 1 Starting 06/01/18 MC I EMOCN Totals eP r nU i t % o f RSG

Gross Scheduled Rent 2,472,792 15,750 100.00% (Gain)/Loss-to-Lease 98,912 630 4.00% Gross Potential Income $2,373,880 $15,120 96.00%

ycnacaV 321 , 046 887 %00.5 n ssecnoC i sno 21 , 463 97 %05.0 t beD daB beD t 6 , 281 93 %52.0 Net Rental Income $2,231,695 $14,215 90.25%

Utility Reimbursement 69,656 444 2.82% mcI s rT hsa emocnI 03 , 626 591 %42.1 m teP e t I n c emo 33 , 219 612 %73.1 mcI htO eh r emocnI 18 , 477 125 %13.3 Total Other Income $215,967 $1,376 8.73%

Effective Gross Income $2,447,662 $15,590 98.98%

SESNEPXE eyuB r ' s pxE eP r nU i t % o f GE I

Repairs and Maintenance 20,667 132 0.84% lloryaP y r o l l 842 , 177 1 , 585 01 %61. v tartsinimdA evi 34 , 297 972 %97.1 aM r k e t i n g 24 , 739 372 %57.1 Contract Services 69,442 442 2.84% revonruT 33 , 510 012 %53.1 seitilitU 001 , 634 046 %01.4 Total Variable Expenses $559,060 $3,561 22.84% sexaT 142 , 824 1 , 835 68.9 % Tax abatement (136,428) (869) -5.57% carunI usn r ecna 93 , 021 942 %06.1 Management Fee 79,549 507 3.25% Total Operating Expenses $782,729 $4,986 31.98%

Capital Reserves 47,100 300 1.92% enpE oT t a l sesnepxE 928$ , 928 5$ , 682 33 %09.

NET OPERATING INCOME $1,617,833 $10,305 66.10%

Financial Analysis 89 ASSUMPTIONS – THE COLLECTION

GROSS SCHEDULED RENT PET INCOME Gross Scheduled Rent is based on the current monthly market rents Proforma Pet Income is projected to be $47,304 or $216 per unit as of December 2017, equating to an average monthly market in Year 1 based on T3 Income. rent of $1,195 or $1.48 per SF. The projected Year 1 market rent is assumed to $3,218,910 which is an increase of 2.00% in Year OTHER INCOME 1 from current rents. Proforma Other Income is $117,822 or $538 per unit. Other Income includes, but is not limited to various line items including: LOSS-TO-LEASE admin fees including Application Fees, Move-in Fees and Lease Loss-to-lease is currently 3.75% of Gross Scheduled Rent and is Termination Income. assumed to be 2.00% in Year 1. VARIABLE EXPENSES VACANCY LOSS Variable Expenses is projected to be $761,276 or $3,476 per Vacancy Loss is projected on a stabilized basis to be 5.00% unit in Year 1 based on the stabilized budget. annually. This is in-line with current performance as the Property is 97.26% occupied as of January 15, 2018. REAL ESTATE TAXES The properties assessment has already been determined for 2018 NON-REVENUE UNITS tax cycle (Year 1 of ownership) as detailed war room. The 2018 One model/office unit is assumed in the analysis at a market rent total assessed values of all properties are $25,828,000 at the of $1,341 per month based on current operations. current millage rate of $1.20/ $100.00 of assessed value.

CONCESSIONS TAX ABATEMENT Concessions are assumed to be 0.25% of Gross Scheduled Rent to The Tax Abatement here has been added back to NOI to account for periodic one-time concessions. determine Tax Abatement cash flow.

BAD DEBT INSURANCE Bad Debt is projected on a stabilized basis to be 0.25% of Gross Proforma Insurance is $268 per unit based on rates for similar Scheduled Rent annually throughout the analysis. assets in the market.

UTILITY INCOME MANAGEMENT FEE Proforma Utility Income is projected to be $103,250 or $471 The Management Fee is expected to be 3.25% of the Effective which is a 2.0% increase of the T3 Income. Gross Income.

PARKING INCOME CAPITAL RESERVES Parking Income is expected to be $18,000 or $82 per unit in Year Analysis assumes Capital Reserves at $300 per unit to total 1 based on recent stabilization. $65,700. This figure is considered to be market for assets of this vintage and location and with the amount of capital already spent TRASH INCOME on the properties. Proforma Trash Income is projected to be $49,956 or $228 per unit based on T3 Income.

TAX ABATEMENT SUMMARY

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Collections Abatement $82,398 $82,716 $82,716 $82,716 $82,716 $74,919 $59,634 $38,955 $18,276 $2,697

90 Financial Analysis PROFORMA FINANCIALS – THE COLLECTION

Year 1 Starting 06/01/18 INCOME Totals Per Unit % of GSR

Gross Scheduled Rent 3,218,910 14,698 100.00% (Gain)/Loss-to-Lease 64,378 294 2.00% Gross Potential Income $3,154,532 $14,404 98.00%

Vacancy 160,946 735 5.00% Concessions 8,047 37 0.25% Bad Debt 8,047 37 0.25% Net Rental Income $2,977,492 $13,596 92.50%

Utility Reimbursement 103,250 471 3.21% Parking Income 18,000 82 0.56% Trash Income 49,956 228 1.55% Pet Income 47,304 216 1.47% Other Income 117,822 538 3.66% Total Other Income $336,332 $1,536 10.45%

Effective Gross Income $3,313,824 $15,132 102.95%

EXPENSES Buyer's Exp Per Unit % of EGI

Repairs and Maintenance 36,383 166 1.10% Payroll 350,216 1,599 10.57% Administrative 47,971 219 1.45% Marketing 17,085 78 0.52% Contract Services 91,938 420 2.77% Turnover 82,125 375 2.48% Utilities 135,561 619 4.09% Total Variable Expenses $761,279 $3,476 22.97% Taxes 309,936 1,415 9.35% Tax abatement (82,398) (376) -2.49% Insurance 58,680 268 1.77% Management Fee 109,125 498 3.29% Total Operating Expenses $1,156,622 $5,281 34.90%

Capital Reserves 65,700 300 1.98% Total Expenses $1,222,322 $5,581 36.89%

NET OPERATING INCOME $2,091,502 $9,550 63.11%

Financial Analysis 91 MULTIFAMILY INVESTMENT SALES

WINK EWING MIKE MARSHALL DREW WHITE Senior Managing Director Executive Managing Director Executive Managing Director 703.575.2157 703.575.2152 202.664.5890 [email protected] [email protected] [email protected]

AL CISSEL RYAN OGDEN ED GARNICA Executive Managing Director Senior Managing Director Financial Analyst 202.664.5892 202.664.5891 703.918.4678 [email protected] [email protected] [email protected]

OFFICE LOCATIONS

WASHINGTON, D.C. TYSONS CORNER RICHMOND NORFOLK 1899 Pennsylvania Ave NW 1410 Spring Hill Rd 500 Libbie Ave 999 Waterside Dr Suite 300 Suite 600 Suite 2B Suite 2525 Washington, D.C. 20006 McLean, VA 22102 Richmond, VA 23226 Norfolk, VA 23510