Strapartmentstus

STRAPARTMENTSTUS

OFFERING MEMORANDUM NON-ENDORSEMENT & DISCLAIMER NOTICE

CONFIDENTIALITY & DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2019 Marcus & Millichap. All rights reserved.

NON-ENDORSEMENT NOTICE Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

MARCUS & MILLICHAP HEREBY DISCLOSES THAT ONE OF THE LISTING AGENTS OWNS A FRACTIONAL INTEREST IN THE PROPERTY MARKETED IN THIS OFFERING MEMORANDUM.

OFFICES THROUGHOUT THE U.S. AND CANADA www.marcusmillichap.com STRAPARTMENTSTUS

EXCLUSIVELY LISTED BY

JON HOLMQUIST Senior Managing Director Investments San Francisco Office [email protected] Tel: (415) 625-2117 License: CA 01257479

JOHN GARRETT First Vice President Investments San Francisco Office [email protected] Tel: (415) 625-2131 License: CA 01421403

01 EXECUTIVE SUMMARY // 1 Investment Overview Executive Summary Summary of Terms 02 PROPERTY DESCRIPTION // 7 Property Summary Property Aerial Recent Capital Improvements Transportation Aerial Floor Plans Property photos TABLE OF

FINANCIAL03 ANALYSIS // 23 CONTENTS Offering Summary Income Statement Rent Roll Analysis STRATUS APARTMENTS 04 MARKET COMPARABLES // 31 Sales Comps Rent Comps 05 MARKET OVERVIEW // 53 Location Overview Mulrifamily Market Trends Demographics 39 2 NUMBER OF UNITS NUMBER OF BUILDINGS

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2019 Marcus & Millichap ACT ID ZAA0020409 STRAPARTMENTSTUS

EXECUTIVE SUMMARY SECTION 01 STRATUS APARTMENTS INVESTMENT OVERVIEW FULLY RENOVATED 39-UNIT MULTIFAMILY COMPLEX IN A PRIME SAN FRANCISCO BAY AREA LOCATION

EXECUTIVE SUMMARY Marcus & Millichap is pleased to offer for sale The Stratus Apartments, a rare outfitted with a stackable washer and dryer unit with modern open floorplans. opportunity to acquire a high-end multifamily community with condominium-quality finishes in a prime San Francisco Bay Area location. The fully renovated 39-unit Favorable floor plan mix of one-, two- and three-bedroom units complex offers excellent walkability and is nearby a multitude of employment centers. The first parcel at 20483 Anita Avenue consists of 15 units with a favorable floor plan mix of three 3-bedroom/2-bath units, six 2-bedroom/1-bath single level Stratus is an easy commute to Southern Alameda tech employers via Highway units, and six 1-bedroom/1-bath units. The two-story property is of wood frame 880, and Santa Clara and San Mateo tech employers via Hwy 92. Oakland and construction with stucco siding, flat torch down roof, carport parking, and private San Francisco employment centers are accessible via BART or a short drive on patios or balconies. The property shares access to the swimming pool at 20441 Highway 580. The property is four blocks from a BART station and two blocks from Anita and has a dedicated laundry room with leased washers and dryers. public bus transportation, restaurants, shopping, and entertainment. Stratus sits on two contiguous parcels on Anita Avenue in Castro Valley. The second parcel contains 24 units at 20441 Anita Avenue, all with highly sought after two-bedroom/one-and-a-half bath townhouse configurations with

2 Extensive renovations to interiors, exteriors, and grounds private patios for most units. The parcel at 20441 Anita Avenue has immaculate STRATUS APARTMENTS Current ownership spent several million dollars renovating the property grounds, landscaping in the front, with six two story buildings, constructed of wood frame, property exterior and unit interiors. The property grounds were meticulously with stucco siding built over concrete slab, and open parking to the rear of the groomed and upgraded with a barbecue, courtyard area, extensive landscaping, property. 20441 Anita Avenue benefits from both an on-site laundry facility with new exterior fences, all new perimeter fences, and newly laid asphalt driveway leased machines, and an inviting swimming pool and patio area. and parking surfaces. Other exterior renovations over the past six years have included all new water heaters (24), new electrical subpanels, new front doors, Excellent Walk Score in an affluent location new HVAC units, and new gas lines to all units at 20441 Anita Avenue as well as With a Walk Score of 80, the Stratus Apartments operate near 100% occupancy as roofing in 2018 for the townhomes at 20441 Anita Avenue. In 2015, thepool tenants actively seek the excellent location. The subject property sits within the affluent area was renovated at 20441 Anita, and in 2016, new roofing was added to 20483 community of Castro Valley, California, which is renowned throughout the area for its Anita. All buildings were repainted in 2018. desirable school district, thus drawing many families. Castro Valley Elementary School is just one block from Stratus, and Castro Valley High School is just four blocks away. In 2016, all windows and sliding doors were replaced with new Rayco double- Along Castro Valley Boulevard tenants can enjoy dozens of boutique stores, major paned windows and doors. Each apartment interior has been vastly improved with retailers, and restaurants all within a four-block radius. The property is about one-mile a modern design, including new flooring, kitchen cabinetry, high-end countertops from retailers including Safeway, T.J. Maxx, Ross Dress for Less, Walgreens Pharmacy, and backsplashes, new interior doors, new kitchen appliances, remodeled bathroom Starbucks, CVS, Pete’s Ace Hardware and all major banks. floors, and floor-to-ceiling tile in most bathtubs. Each of the 24 townhomes has been INVESTMENT HIGHLIGHTS

High end property renovation Commuter friendly location just four More than $2,400,000 recently Excellent unit mix, with high end completed with meticulous attention blocks from BART, two blocks from spent on property improvements condo-quality interior finishes to detail on both building exterior and bus transit, and easy access to Hwy by current owners unit interiors 580 just three minutes away EXECUTIVE SUMMARY

Desirable public school district that Ideal location surrounded by Turnkey asset in excellent shape, draws families from surrounding cities abundant entertainment, with individual PG&E meters, shopping and restaurants all within presenting virtually no deferred three blocks maintenance, allowing a new buyer to enjoy positive cash flow on a stabilized in-fill asset

• New landscaping throughout; extensive tree pruning • Added planters and pool furniture STRATUS APARTMENTS • New monument sign • New trash enclosure built • New fencing around townhouses; repaired and repainted perimeter fencing • Parking lot repaired, slurry-coated, and striped. New curb stops as needed • Removed trees and fencing to create a second courtyard on apartment side • Created two additional leasable parking spots • Replaced existing landscaping to create a BBQ and seating area in rear • New exterior lighting courtyard with DG paths, plumbed gas line, and seating • New roof on townhouse buildings

EXECUTIVE SUMMARY $16,100,000 EXECUTIVE SUMMARY OFFERING PRICE 20421 ANITA AVE, CASTRO VALLEY, CA

VITAL DATA CURRENT PRO FORMA Price $16,100,000 Cap Rate 4.59% 5.10% $739,217 Down Payment $5,635,000 GRM 14.70 13.51 CURRENT NOI Loan Type New Net Operating Income $739,217 $821,750 Interest Rate/Amortization 3.85% Net Cash Flow After $336,314 $418,847 Price/Unit $412,821 Debt Service (5.97%) (7.43%) Number of Units 39 4 Total Return $336,314 $418,847

STRATUS APARTMENTS 5.97% Rentable Square Feet 26,802 CURRENT CASH-ON-CASH Number of Buildings 2 Lot Size 1.12 Acres

UNIT MIX 4.59% NUMBER OF UNITS UNIT TYPE APPROX. SF CURRENT CAP RATE 6 1 Bedroom / 1 Bath 563 6 2 Bedroom / 1 Bath 803 24 2 Bedroom / 1.5 Bath TH 655 14.70 3 3 Bedroom / 2 Bath 962 CURRENT GRM

STRATUS APARTMENTS SUMMARY OF TERMS INTEREST OFFERED Marcus & Millichap has been selected to exclusively market for sale STRATUS EXECUTIVE SUMMARY

APARTMENTS, a 39-unit multifamily property located in Castro Valley, California. 5 TERMS OF SALE Stratus Apartments is being offered free and clear of debt at a price of $16,100,000.

PROPERTY TOURS All property tours must be arranged with the Marcus & Millichap listing agents. At no time shall the tenants, on-site management or staff be contacted without prior approval. STRATUS APARTMENTS 28Min. 33Min. 27Min. BART TRAIN RIDE TO BART TRAIN RIDE TO BART TRAIN RIDE TO OAKLAND SAN FRANCISCO FREMONT

PROPERTY DESCRIPTION SECTION 02 39 UNITS

PROPERTY DESCRIPTION

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47 2 PARKING SPACES BUILDINGS STRATUS APARTMENTS PROPERTY SUMMARY

THE OFFERING Property STRATUS APARTMENTS Price $16,100,000 Property Address 20421 Anita Ave., Castro Valley, CA

SITE DESCRIPTION Number of Units 39 Number of Buildings 2 Year Built/Renovated 1959 Rentable Square Feet 26,802 Lot Size 1.12 Acres PROPERTY DESCRIPTION Type of Ownership Fee Simple Parking 38 Surface Spots; 9 Covered Spots 9 Parking Ratio 1.2:1 Landscaping Attractive; Low Maintenance

UTILITIES PROPOSED FINANCING Water East Bay Municipal Utility District First Trust Deed Electric PG&E Loan Amount $10,465,000 Gas PG&E Loan Type New Loan Interest Rate 3.85% CONSTRUCTION

Amortization 30 Years STRATUS APARTMENTS Exterior Stucco Loan Term 10 Years Parking Asphalt & Concrete Loan to Value 65% Debt Coverage Ratio 1.83 MECHANICAL Interest Only Period 5 Years HVAC Forced Air (20441 Building); Wall Units (20483 Building) C P ﬀ A R A C D C C D S C C

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FLOOR PLANS

PROPERTY DESCRIPTION One Bedroom Two Bedroom / One Bath CLOSET

BATH 5’0 x 8’1 BEDROOM BEDROOM BEDROOM 14’6 x 11’3 11’0 x 11’6 16’4 x 10’8

CLOSET 7’7 x 6’5

12 KITCHEN

STRATUS APARTMENTS 10’10 x 11’8

BATH 10’10 x 5’5

LIVING ROOM 14’2 x 15’2 KITCHEN 7’3 x 11’10

LIVING ROOM 14’8 x 15’5 STRATUS APARTMENTS

Two Bedroom / One and One-Half Bath Three Bedroom / Two Bath

BATH KITCHEN CLOSET 6’3 x 5’0 5’10 x 5’2 BEDROOM 14’2 x 8’9 11’2 x 12’10 CLOSET

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10’0 x 13’5 8’4 x 11’2 10’8 x 11’9 PROPERTY DESCRIPTION BATH 7’10 x 5’0 13

BATH CLOSET CLOSET 7’6 x 5’2

CLOSET CLOSET BATH 5’0 x 5’0

MASTER BEDROOM LIVING ROOM 11’1 x 12’10 14’3 x 16’0 LIVING DINING ROOM 18’7 x 18’7 STRATUS APARTMENTS STRATUS APARTMENTS

PROPERTY DESCRIPTION

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21 STRATUS APARTMENTS 26,802 SF RENTABLE SQUARE FEET $412,821 PRICE/UNIT

FINANCIAL ANALYSIS SECTION 03 OFFERING SUMMARY

SUMMARY FINANCIAL ANALYSIS Price $16,100,000 Down Payment 35% $5,635,000 Number of Units 39 Price Per Unit $412,821 Price Per SqFt $600.70 Rentable SqFt 26,802 RETURNS CURRENT PRO FORMA Cap Rate 4.59% 5.10%

GRM 14.70 13.51 24 Cash-on-Cash 5.97% 7.43%

STRATUS APARTMENTS Proposed Debt Financing INPUTS Max LTV 65% Debt Service Coverage Ratio 1.83 Interest Rate 3.85% Term 10 Years; 5 Years I/O Amortization 30 years Year Due 2029 Loan Sizing Max Loan Amount $10,465,000 Annual Debt Service $402,903 STRATUS APARTMENTS OPERATING STATEMENT

INCOME CURRENT YEAR 1 PER UNIT PER SF Gross Potential Income 1,170,000 1,228,500 31,500 45.84 Loss / Gain to Lease (75,000) 6.4% (36,855) 3.0% (945) (1.38) Gross Current Rent 1,095,000 1,191,645 30,555 44.46 Physical Vacancy (27,375) 2.5% (35,749) 3.0% (917) (1.33) Total Vacancy ($27,375) 2.5% ($35,749) 3.0% ($917) ($1) Effective Rental Income 1,067,625 1,155,896 29,638 43.13 Other Income RUBS (Water / Sewer / Trash) 32,100 32,100 823 1.20 Storage / Pet Rent / Extra Parking 20,460 20,460 525 0.76 Total Other Income $52,560 $52,560 $1,348 $1.96 Effective Gross Income $1,120,185 $1,208,456 $30,986 $45.09 FINANCIAL ANALYSIS

EXPENSES CURRENT YEAR 1 PER UNIT PER SF Real Estate Taxes 194,440 194,440 4,986 7.25 25 Insurance 12,300 12,300 315 0.46 Special Assessments 20,726 20,726 531 0.77 Water / Sewer / Common PG&E 15,400 15,400 395 0.57 Trash Removal 19,200 19,200 492 0.72 Repairs & Maintenance 19,500 19,500 500 0.73 Landscaping 7,500 7,500 192 0.28 Onsite Management 33,606 36,254 930 1.35 Pest Control 2,700 2,700 69 0.10 Pool / Contract Services 2,940 2,940 75 0.11 Marketing 3,150 3,150 81 0.12 Administration 2,500 2,500 64 0.09 STRATUS APARTMENTS Operating Reserves 7,800 7,800 200 0.29 Management Fee 39,206 3.5% 42,296 3.5% 1,085 1.58 Total Expenses $380,968 $386,706 $9,916 $14.43 Expenses as % of EGI 34.0% 32.0% Net Operating Income $739,217 $821,750 $21,071 $30.66 GROWTH RATE PROJECTIONS

INCOME YEAR 1 2021 2022 2023 2024 2025 2026 2027 2028 2029

FINANCIAL ANALYSIS Gross Potential Rent 5.0% 5.00% 4.00% 4.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Loss / Gain to Lease (1) 3.0% 2.00% 2.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Physical Vacancy 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Total Vacancy 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Total Other Income 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%

EXPENSES Year 1 2021 2022 2023 2024 2025 2026 2027 2028 2029 Operating Expenses 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Real Estate Taxes 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Insurance 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Utilities 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Management Fee (2) 3.5%

26 (1) Displayed as a % of Gross Potential Rent (2) Management Fees Calculated by % of EGR STRATUS APARTMENTS STRATUS APARTMENTS CASH FLOW

INCOME Current 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Gross Potential Rent 1,170,000 1,228,500 1,289,925 1,341,522 1,395,183 1,437,038 1,480,150 1,524,554 1,570,291 1,617,399 1,665,921 Loss / Gain to Lease (75,000) (36,855) (25,799) (26,830) (13,952) (14,370) (14,801) (15,246) (15,703) (16,174) (16,659) Gross Current Rent 1,095,000 1,191,645 1,264,127 1,314,692 1,381,231 1,422,668 1,465,348 1,509,308 1,554,588 1,601,225 1,649,262 Physical Vacancy (27,375) (35,749) (37,924) (39,441) (41,437) (42,680) (43,960) (45,279) (46,638) (48,037) (49,478) Total Vacancy (27,375) (35,749) (37,924) (39,441) (41,437) (42,680) (43,960) (45,279) (46,638) (48,037) (49,478) Effective Rental Income 1,067,625 1,155,896 1,226,203 1,275,251 1,339,794 1,379,988 1,421,388 1,464,029 1,507,950 1,553,189 1,599,784 Other Income RUBS (Water / Sewer / Trash) 32,100 32,100 32,742 33,397 34,065 34,746 35,441 36,150 36,873 37,610 38,362 Storage / Pet Rent / Extra 20,460 20,460 20,869 21,287 21,712 22,147 22,589 23,041 23,502 23,972 24,452 Parking Total Other Income 52,560 52,560 53,611 54,683 55,777 56,893 58,030 59,191 60,375 61,582 62,814 Effective Gross Income 1,120,185 1,208,456 1,279,814 1,329,934 1,395,571 1,436,881 1,479,418 1,523,220 1,568,325 1,614,771 1,662,598 EXPENSES Operating Expenses (91,096) (93,744) (96,556) (99,453) (102,436) (105,509) (108,675) (111,935) (115,293) (118,752) (122,314) Real Estate Taxes (194,440) (194,440) (198,329) (202,295) (206,341) (210,468) (214,677) (218,971) (223,350) (227,817) (232,374) FINANCIAL ANALYSIS

Insurance (12,300) (12,300) (12,546) (12,797) (13,053) (13,314) (13,580) (13,852) (14,129) (14,411) (14,700) Utilities (36,126) (36,126) (37,210) (38,326) (39,476) (40,660) (41,880) (43,137) (44,431) (45,764) (47,136) Management Fee (39,206) (42,296) (44,793) (46,548) (48,845) (50,291) (51,780) (53,313) (54,891) (56,517) (58,191) 27 Total Expenses (373,168) (378,906) (389,434) (399,419) (410,151) (420,242) (430,592) (441,207) (452,094) (463,261) (474,715) Operating Reserves (7,800) (7,800) (7,800) (7,800) (7,800) (7,800) (7,800) (7,800) (7,800) (7,800) (7,800) Net Operating Income 739,217 821,750 882,580 922,715 977,620 1,008,838 1,041,026 1,074,213 1,108,431 1,143,710 1,180,083 PURCHASE PRICE / NET RESIDUAL VALUE Purchase Price/Net Residual (16,100,000) 22,477,776 Value Cash Flow Before Debt 821,750 882,580 922,715 977,620 1,008,838 1,041,026 1,074,213 1,108,431 1,143,710 23,657,860 Financing DEBT FINANCING Loan Amount 10,465,000 0 0 0 0 0 0 0 0 0 0 Remaining Balance 0 0 0 0 0 0 0 0 0 0 Loan Origination Fees (52,325) 0 0 0 0 0 0 0 0 0 0 Prepayment Penalty 0 0 0 0 0 0 0 0 0 0

Closing Costs 0 0 0 0 0 0 0 0 0 (505,750) STRATUS APARTMENTS

Debt Service - Interest (402,903) (402,903) (402,903) (402,903) (402,903) (399,588) (392,176) (384,474) (376,470) (368,152)

Debt Service - Principal 0 0 0 0 0 (189,141) (196,553) (204,255) (212,259) (220,577) CASH FLOW AFTER DEBT (5,687,325) 418,847 479,677 519,813 574,717 605,936 452,297 485,484 519,701 554,981 22,563,380 FINANCING Debt Coverage Ratio 2.04 2.19 2.29 2.43 2.50 1.77 1.82 1.88 1.94 2.00 IRR-Unleveraged 0.00% 9.20% 9.08% 9.01% 8.95% 8.91% 8.88% 8.59% IRR-Leveraged 7.36% 17.52% 16.98% 16.58% 16.22% 15.90% 15.61% 14.96% Capitalization Rate 5.10% 5.48% 5.73% 6.07% 6.27% 6.47% 6.67% 6.88% 7.10% 7.33% STRATUS APARTMENTS RENT ROLL DETAIL

UNIT UNIT TYPE SQUARE FEET CURRENT RENT / MONTH CURRENT RENT / SF/MONTH POTENTIAL RENT / MONTH POTENTIAL RENT/ SF/ MONTH 20421 2 Bedroom / 1.5 Bath TH 655 $2,375 $3.63 $2,595 $3.96 20423 2 Bedroom / 1.5 Bath TH 655 $2,395 $3.66 $2,595 $3.96 20425 2 Bedroom / 1.5 Bath TH 655 $2,445 $3.73 $2,595 $3.96

FINANCIAL ANALYSIS 20427 2 Bedroom / 1.5 Bath TH 655 $2,395 $3.66 $2,595 $3.96 20429 2 Bedroom / 1.5 Bath TH 655 $2,295 $3.50 $2,595 $3.96 20431 2 Bedroom / 1.5 Bath TH 655 $2,295 $3.50 $2,595 $3.96 20433 2 Bedroom / 1.5 Bath TH 655 $2,375 $3.63 $2,595 $3.96 20435 2 Bedroom / 1.5 Bath TH 655 $2,295 $3.50 $2,595 $3.96 20437 2 Bedroom / 1.5 Bath TH 655 $2,295 $3.50 $2,595 $3.96 20439 2 Bedroom / 1.5 Bath TH 655 $2,550 $3.89 $2,595 $3.96 20441 2 Bedroom / 1.5 Bath TH 655 $2,545 $3.89 $2,595 $3.96 20443 2 Bedroom / 1.5 Bath TH 655 $2,295 $3.50 $2,595 $3.96 20445 2 Bedroom / 1.5 Bath TH 655 $2,375 $3.63 $2,595 $3.96 20447 2 Bedroom / 1.5 Bath TH 655 $2,295 $3.50 $2,595 $3.96 20449 2 Bedroom / 1.5 Bath TH 655 $2,395 $3.66 $2,595 $3.96

20451 2 Bedroom / 1.5 Bath TH 655 $2,345 $3.58 $2,595 $3.96 20453 2 Bedroom / 1.5 Bath TH 655 $2,295 $3.50 $2,595 $3.96 28 20455 2 Bedroom / 1.5 Bath TH 655 $2,295 $3.50 $2,595 $3.96 20457 2 Bedroom / 1.5 Bath TH 655 $2,375 $3.63 $2,595 $3.96 STRATUS APARTMENTS 20459 2 Bedroom / 1.5 Bath TH 655 $2,375 $3.63 $2,595 $3.96 20461 2 Bedroom / 1.5 Bath TH 655 $2,425 $3.70 $2,595 $3.96 20463 2 Bedroom / 1.5 Bath TH 655 $2,325 $3.55 $2,595 $3.96 20465 2 Bedroom / 1.5 Bath TH 655 $2,375 $3.63 $2,595 $3.96 20467 2 Bedroom / 1.5 Bath TH 655 $2,375 $3.63 $2,595 $3.96 20471 1 Bedroom / 1 Bath 563 $1,995 $3.54 $1,995 $3.54 20473 1 Bedroom / 1 Bath 563 $1,950 $3.46 $1,995 $3.54 20475 1 Bedroom / 1 Bath 563 $1,995 $3.54 $1,995 $3.54 20477 3 Bedroom / 2 Bath 962 $2,795 $2.91 $2,850 $2.96 20479 3 Bedroom / 2 Bath 962 $2,800 $2.91 $2,850 $2.96 20481 3 Bedroom / 2 Bath 962 $2,800 $2.91 $2,850 $2.96 20483 2 Bedroom / 1 Bath 803 $2,345 $2.92 $2,450 $3.05 20485 2 Bedroom / 1 Bath 803 $2,345 $2.92 $2,450 $3.05 20487 2 Bedroom / 1 Bath 803 $2,345 $2.92 $2,450 $3.05 20489 2 Bedroom / 1 Bath 803 $2,445 $3.04 $2,450 $3.05 20491 2 Bedroom / 1 Bath 803 $2,345 $2.92 $2,450 $3.05 20493 2 Bedroom / 1 Bath 803 $2,345 $2.92 $2,450 $3.05 20495 1 Bedroom / 1 Bath 563 $1,995 $3.54 $1,995 $3.54 20497 1 Bedroom / 1 Bath 563 $1,995 $3.54 $1,995 $3.54 20499 1 Bedroom / 1 Bath 563 $1,950 $3.46 $1,995 $3.54 Total 26,802 $91,250 $3.40 $97,500 $3.64 STRATUS APARTMENTS RENT ROLL SUMMARY

Current Potential # of Avg Sq Rental Average Monthly Average Monthly Average Average Units Feet Range Rent / SF Income Rent / SF Income Unit Type Rent Rent 1 Bedroom / 1 Bath 6 563 $1,950 - $1,995 $1,980 $3.52 $11,880 $1,995 $3.54 $11,970 2 Bedroom / 1 Bath 6 803 $2,345 - $2,445 $2,362 $2.94 $14,170 $2,450 $3.05 $14,700 2 Bedroom / 1.5 Bath TH 24 655 $2,295 - $2,595 $2,379 $3.63 $57,090 $2,595 $3.96 $62,280 3 Bedroom / 2 Bath 3 962 $2,795 - $2,800 $2,798 $2.91 $8,395 $2,850 $2.96 $8,550 Totals/Weighted Averages 39 687 $2,340 $3.40 $91,250 $2,500 $3.64 $97,500

Gross Annualized Rents $1,095,000 $1,170,000 FINANCIAL ANALYSIS

29 STRATUS APARTMENTS 1.12 AC 2 ACREAGE NUMBER OF BUILDINGS

MARKET COMPARABLES SECTION 04 Mill Valley R E C S C C M Albany L M C T A Orinda S S M Belvedere M C B M Sausalito S R S P B Moraga R C A E A SALES COMPARABLES Emeryville O C Danville Piedmont

O M Fort Winﬁeld N B T S B PROPERTY NAME SALES PRICE PRICE/SF CAP RATE YEAR BUILT R S San Ramon Stratus Apartments - 20421 Anita Ave, Castro Valley, CA 94546 $16,100,000 $600.70 4.59% 1959 A M E M P S

COMPARABLES 1 The Amador - 4435 Piedmont Ave, Oakland, CA 94611 $19,400,000 $787.37 4.27% 2018 E B B S 2 Hillside Village - 1797-1801 Shattuck Ave, Berkeley, CA 94709 $57,750,000 $574.60 4.20% 2005 S L O S R B A M 3 Maxwell - 1801 Jefferson St, Oakland, CA 94612 $44,600,000 $719.03 4.61% 2017 B M Dublin L M A U A T C 4 4801 Shattuck - 4801 Shattuck, Oakland, CA 94609 $20,500,000 $691.80 - 2017 Brisbane S A Colma C R L L E 5 St. Francis Apartments - 20607 Congress Way, Castro Valley, CA 94546 $4,250,000 $515.90 5.25% 1956 R

P S S

P E R 6 3921 Harrison St, Oakland, CA 94611 $6,700,000 $502.40 4.20% 1963 B C E 32 A S T M E Paciﬁca S 7 Alamo Park - 620 Alamo Ct, Mountain View, CA 94043 $9,883,875 $511.64 2.94% 1974 San A STRATUS APARTMENTS Bruno B L C 8 Domain Oakland Apartments - 1389 Jefferson St, Oakland, CA 94612 $140,000,000 $557.77 4.25% 2011 R P B S MMillbrae M C L M A S 9 Claremont Park - 5248 Claremont Ave, Oakland, CA 94618 $10,124,470 $598.02 3.93% 1959 Paciﬁc U C O S Burlingame P N Hillsborough E 10 2427 Hilgard Ave, Berkeley, CA 94709 $5,350,000 $525.70 4.16% 1929 S M P S C C 11 Farm Hill Apartments - 3530-3540 Farm Hill Blvd, Redwood City, CA 94061 $10,450,000 $678.57 3.36% 1959 P P S M M 12 Sofi Belmont Glen - 200 Davey Glen Rd, Belmont, CA 94002 $40,100,000 $593.23 3.99% 1963 Newark M S M L Redwood M B Shores B A L 13 Arbordale Gardens - 42010 Blacow Rd, Fremont, CA 94538 $27,750,000 $598.89 3.71% 1968 S C Belmont S P San S C S E A Carlos A M S P R P C N O East Palo Alto C E L L P A Hal Moon Bay Atherton A Menlo Park P A M P M Woodside S A

L C C A L S L M Portola Los Altos N M B M Hills E B Valley S A S L Mill Valley R E C S C C M Albany2 10 L M C T A Orinda S S M Belvedere M C B M Sausalito S R S P B 9 Moraga R C 4 1 A E A Emeryville O C Danville Piedmont 8 O 6 M Fort Winﬁeld N B T S B 3

R San S Ramon A M E M P S E B B S S L O S R B A M B M 5 Dublin L M A U A T C Brisbane S A Colma C R L L E STRATUS APARTMENTS R P COMPARABLES S S P E R B C E A S 33 T M E Paciﬁca S San A Bruno B L C R P B S MMillbrae M C L M A S Paciﬁc U C O S Burlingame P N Hillsborough E S M P S C C P P S M M 12 Newark 13 M S M L Redwood M B Shores B A L S C Belmont S P S C

San STRATUS APARTMENTS S E A Carlos A M S P R P C N 11 O East Palo Alto C E L L P A Hal Moon Bay Atherton A Menlo Park P A M P M Woodside S A

N 7

L C C A L S L M Portola Los Altos N M B M Hills E B Valley S A S L

COMPARABLES

34 STRATUS APARTMENTS 1 THE AMADOR 20421 Anita Ave, Castro Valley, CA 94546 4435 Piedmont Ave, Oakland, CA 94611 STRATUS APARTMENTS

SALES PRICE $16,100,000 SALES PRICE $19,400,000

Year Built 1959 Sale Date 5/10/2019

Cap Rate 4.59% Year Built 2018

Price Per SF $600.70 Cap Rate 4.27%

Price Per SF $787.37 STRATUS APARTMENTS COMPARABLES

2 3 HILLSIDE VILLAGE MAXWELL 35 1797-1801 Shattuck Ave, Berkeley, CA 94709 1801 Jefferson St, Oakland, CA 94612

SALES PRICE $57,750,000 SALES PRICE $44,600,000

Sale Date 9/12/2018 Sale Date 6/1/2018

Year Built 2005 Year Built 2017

Cap Rate 4.20% Cap Rate 4.61%

Price Per SF $574.60 Price Per SF $719.03 STRATUS APARTMENTS

COMPARABLES

36 4 4801 SHATTUCK 5 ST. FRANCIS APARTMENTS 4801 Shattuck Ave, Oakland, CA 94609 20607 Congress Way, Castro Valley, CA 94546 STRATUS APARTMENTS

SALES PRICE $20,500,000 SALES PRICE $4,250,000

Sale Date 3/21/2019 Sale Date 11/20/2018

Year Built 2017 Year Built 1956

Cap Rate - Cap Rate 5.25%

Price Per SF $691.80 Price Per SF $515.90 STRATUS APARTMENTS COMPARABLES

6 3921 HARRISON STREET 7 ALAMO PARK 37 3921 Harrison St, Oakland, CA 94611 620 Alamo Ct, Mountain View, CA 94043

SALES PRICE $6,700,000 SALES PRICE $9,883,875

Sale Date 11/13/2018 Sale Date 1/23/2019

Year Built 1963 Year Built 1974

Cap Rate 4.20% Cap Rate 2.94%

Price Per SF $502.40 Price Per SF $511.64 STRATUS APARTMENTS

COMPARABLES

38 8 DOMAIN OAKLAND APARTMENTS 9 CLAREMONT PARK 1389 Jefferson St, Oakland, CA 94612 5248 Claremont Ave, Oakland, CA 94618 STRATUS APARTMENTS

SALES PRICE $140,000,000 SALES PRICE $10,124,470

Sale Date 5/14/2018 Sale Date 3/19/2019

Year Built 2011 Year Built 1959

Cap Rate 4.25% Cap Rate 3.93%

Price Per SF $557.77 Price Per SF $598.02 STRATUS APARTMENTS COMPARABLES

10 2427 HILGARD AVE 11 FARM HILL APARTMENTS 39 2427 Hilgard Ave, Berkeley, CA 94709 3530-3540 Farm Hill Blvd, Redwood City, CA

SALES PRICE $5,350,000 SALES PRICE $10,450,000

Sale Date 5/24/2018 Sale Date 9/14/2018

Year Built 1929 Year Built 1959

Cap Rate 4.16% Cap Rate 3.36%

Price Per SF $525.70 Price Per SF $678.57 STRATUS APARTMENTS

COMPARABLES

12 13 SOFI BELMONT GLEN ARBORDALE GARDEN APARTMENTS 200 Davey Glen Rd, Belmont, CA 94002 42010 Blacow Rd, Fremont, CA 94538 40 STRATUS APARTMENTS SALES PRICE $40,100,000 SALES PRICE $27,750,000

Sale Date 6/29/2018 Sale Date 11/15/2017

Year Built 1963 Year Built 1968

Cap Rate 3.99% Cap Rate 3.71%

Price Per SF $593.23 Price Per SF $598.89 STRATUS APARTMENTS COMPARABLES

41 STRATUS APARTMENTS RENT COMPARABLES

PROPERTY NAME UNITS GBA (SF) YEAR BUILT AVG. RENT PER SF

Stratus Apartments - 20421 Anita Ave, Castro Valley, CA 94546 39 26,802 1959 $3.40/SF

COMPARABLES 1 Leafy Grove - 20001-20019 San Miguel Ave, Castro Valley, CA 94546 36 30,162 1978 $2.52/SF

2 Quail Hill - 20800 Lake Chabot Rd, Castro Valley, CA 94546 96 168,945 1990 $2.84/SF

3 The Regent - 2300 Regent Way, Castro Valley, CA 94546 30 26,204 1970 $2.82/SF

4 Eden Terrace - 20156 Stanton Ave, Castro Valley, CA 94546 53 64,332 1959 $2.34/SF

5 Magnolia Grove Condominiums - 21019 Baker Rd, Castro Valley, CA 94546 40 42,000 2013 $2.63/SF

42 6 Park Tower Apartments - 20353 Park Way, Castro Valley, CA 94546 51 42,900 1965 $2.79/SF

7 19978-20014 Anita Ave, Castro Valley, CA 94546 22 22,561 1964 $2.82/SF STRATUS APARTMENTS

8 Mosaic Castro Valley Apartment Homes - 19972 Stanton Ave, Castro Valley, CA 94546 62 44,200 1961 $2.49/SF

9 Terra Castro Valley - 2275 Grove Way, Castro Valley, CA 94546 37 35,164 1962 $2.85/SF

10 Redwood Valley Apartments - 22281 Center St., Castro Valley, CA 94546 108 132,424 1963 $2.64/SF

11 Vista Creek - 22432 Center St, Castro Valley, CA 94546 50 38,000 1987 $3.37/SF

12 Palm Grove - 2531 Grove Way, Hayward, CA 94545 10 9,360 1960 $2.70/SF

L C

R P C

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STRATUS APARTMENTS

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COMPARABLES

44 STRATUS APARTMENTS 1 LEAFY GROVE 20421 Anita Ave, Castro Valley, CA 94546 20001-20019 SAN MIGUEL AVE, CASTRO VALLEY, STRATUS APARTMENTS CA 94546

BUILDING BUILDING

Year Built 1959 Year Built 1978

Units 39 Units 36

GBA 26,802 GBA 30,162

Site Amenities: Laundry Facilities Unit Amenities: Balcony, Patio

UNIT AVG EFFECTIVE RENT/ UNIT SQFT MIX RENT SF

1 Bd 1 Bth 800 15 $1,993 $2.49

2 Bd 1.5 Bth 1,000 6 $2,541 $2.54

3 Bd 2.5 Bth 1,300 15 $3,302 $2.54 STRATUS APARTMENTS COMPARABLES

2 QUAIL HILL 3 THE REGENT 45 20800 Lake Chabot Rd, Castro Valley, CA 94546 2300 Regent Way, Castro Valley, CA 94546

BUILDING BUILDING

Year Built 1990 Year Built 1970

Units 96 Units 30

GBA 168,945 GBA 26,204

Site Amenities: Controlled Access, Laundry Facilities, Lounge, Maintenance on Site Amenities: Laundry Facilities site, Package Service, Property Manager on Site, Spa, Storage Space, Sundeck Unit Amenities: Balcony, Patio Unit Amenities: Air Conditioning, Carpet, Ceiling Fans, Dining Room,

Dishwasher, Disposal, Fireplace, Heating, Tile Floors, Vinyl Flooring, Walk-In STRATUS APARTMENTS Closets, Washer/Dryer, Washer/Dryer Hookup, Window Coverings UNIT AVG EFFECTIVE RENT/ UNIT SQFT MIX RENT SF UNIT AVG EFFECTIVE RENT/ UNIT SQFT MIX RENT SF 1 Bd 1 Bth 700 8 $1,977 $2.82 1 Bd 1 Bth 700 33 $1,989 $2.84

COMPARABLES

46 4 EDEN TERRACE 5 MAGNOLIA GROVE CONDOMINIUMS 20156 Stanton Ave, Castro Valley, CA 94546 21019 Baker Rd, Castro Valley, CA 94546 STRATUS APARTMENTS

BUILDING BUILDING

Year Built 1959 Year Built 2013

Units 53 Units 40

GBA 64,332 GBA 42,000

Site Amenities: Courtyard, Laundry Facilities Site Amenities: Controlled Access, Elevator, Health Club Discount, Laundry Unit Amenities: Dishwasher, Heating Facilities, Maintenance on site, Package Service, Property Manager on SIte Unit Amenities: Air Conditioning, Carpet, Ceiling Fans, Dishwasher, Disposal, Hardwood Floors, Heating, Washer/Dryer, Window Coverings UNIT AVG EFFECTIVE RENT/ UNIT SQFT UNIT AVG EFFECTIVE RENT/ MIX RENT SF UNIT SQFT MIX RENT SF 1 Bd 1 Bth 850 1 $1,990 $2.34 2 Bd 2 Bth 1,000 37 $2,633 $2.63 STRATUS APARTMENTS COMPARABLES

6 PARK TOWER APARTMENTS 7 19978-20014 ANITA AVE 47 20353 Park Way, Castro Valley, CA 94546 19978-20014 Anita Ave, Castro Valley, CA 94546

BUILDING BUILDING

Year Built 1965 Year Built 1964

Units 51 Units 22

GBA 42,900 GBA 22,561

Site Amenities: Clubhouse, Fitness Center, Laundry Facilities, Sauna Unit Amenities: Heating Unit Amenities: Balcony, Dishwasher, Disposal, Heating, Washer/Dryer Hookup STRATUS APARTMENTS

UNIT AVG EFFECTIVE RENT/ UNIT AVG EFFECTIVE RENT/ UNIT SQFT UNIT SQFT MIX RENT SF MIX RENT SF

2 Bd 1.5 Bth 900 24 $2,544 $2.83 2 Bd 1 Bth 1,000 21 $2,827 $2.83

3 Bd 1.5 Bth 1,100 3 $2,790 $2.54 3 Bd 1 Bth 1,200 1 $3,328 $2.77

COMPARABLES

48 8 MOSAIC CASTRO VALLEY APARTMENT HOMES 9 TERRA CASTRO VALLEY 19972 Stanton Ave, Castro Valley, CA 94546 2275 Grove Way, Castro Valley, CA 94546 STRATUS APARTMENTS

BUILDING BUILDING

Year Built 1961 Year Built 1964

Units 62 Units 37

GBA 44,200 GBA 35,164

Site Amenities: Gated, Laundry Facilities, Laundry Service, Playground Resort style pool, Pet Friendly, On-site Laundry facility, Assigned Parking, Unit Amenities: Balcony, Ceiling Fans, Heating, Patio Gated Community

UNIT AVG EFFECTIVE RENT/ UNIT AVG EFFECTIVE RENT/ UNIT SQFT UNIT SQFT MIX RENT SF MIX RENT SF

3 Bd 2 Bth 1,192 3 $2,970 $2.49 1 Bd 1 Bth 525 6 $1,950 $3.71

2 Bd 1.5 Bth 918 30 $2,550 $2.78

2 Bd 2 Bth 1,151 1 $2,685 $2.33 STRATUS APARTMENTS COMPARABLES

10 REDWOOD VALLEY APARTMENTS 11 VISTA CREEK 49 22281 Center St., Castro Valley, CA 94546 22432 Center St, Castro Valley, CA 94546

BUILDING BUILDING

Year Built 1963 Year Built 1987

Units 108 Units 50

GBA 132,424 GBA 38,000

Child Playground, Controlled Building Access, Two Resort- Style pools, Gated Entry, Fenced Lot, Courtyard, Picnic Area, Balcony, Patio, Lawn, Gated Community, Laundry Facilities, BBQ/Picnic Area, Gated Community, Barbecue/Grill, Garden, Elevator, Controlled Access, Maintenance on Microwaves/Stainless Appliances site, On Site Management, Video Patrol STRATUS APARTMENTS

UNIT AVG EFFECTIVE RENT/ UNIT AVG EFFECTIVE RENT/ UNIT SQFT UNIT SQFT MIX RENT SF MIX RENT SF

1 Bd 1 Bth 733 20 $1,980 $2.70 1 Bd 1 Bth 625-700 31 $2,295-$2,350 $3.51

2 Bd 2 Bth 956 86 $2,512 $2.63 2 Bd 1 Bth 800 19 $2,550 $3.19

COMPARABLES

50 8 PALM GROVE 2531 Grove Way, Hayward, CA 94545 STRATUS APARTMENTS

BUILDING

Year Built 1960

Units 10

GBA 9,360

Pets Allowed, Cats Allowed, Dishwasher, Dryer, Dual pane windows, Garage, Garbage Disposal, In-Unit Laundry, Off Street Parking, Patio Balcony, Washer

UNIT AVG EFFECTIVE RENT/ UNIT SQFT MIX RENT SF

2 Bd 1.5 Bth 980 3 $2,645 $2.70 STRATUS APARTMENTS COMPARABLES

51 STRATUS APARTMENTS 768,574 277,734 TOTAL POPULATION TOTAL HOUSEHOLDS WITHIN 5-MILE RADIUS WITHIN 5-MILE RADIUS

277,734 MARKET OVERVIEW SECTION 05 STRATUS APARTMENTS LOCATION OVERVIEW A bedroom community in the San Francisco Bay Area

Stratus Apartments enjoys a central Southern Alameda County location in School, the sole high school in the city, is near Stratus Apartments. In 2016

MARKET OVERVIEW the small bedroom community of Castro Valley, in the San Francisco Bay Castro Valley voters approved a $123 million bond to cover the Facilities Area of California. The unincorporated community is one of the largest Master Plan, which provides much needed renovations to the district’s in the state with a population of about 64,000 people. Bordered by Lake schools. Chabot to the northwest and the San Leandro Hills along the northern edge, Castro Valley residents enjoy numerous parks and trails. Lake Chabot Regional Park and Cull Canyon Regional Recreation Area provide access to outdoor activities and the many creeks in the area. The region also has easy access to employment centers including the San Francisco 54 Peninsula via San Mateo Bridge; San Jose via Interstate 880; and San Francisco via the Bay Bridge. STRATUS APARTMENTS

Castro Valley is primarily a residential community, with only about 5% of its land developed for commercial uses. The economy consists largely of the production of goods and services for residents, with the greatest number of people being employed by the healthcare and social assistance industry. Castro Valley’s newest “gem,” Sutter Health’s Eden Medical Center, is a $320 million development delivered to the community in 2012. The medical complex includes a 230,000-square-foot hospital with 130 acute-care beds and a 34-bed universal care center.

Stratus Apartments is located in the prestigious Castro Valley Unified School District, which contains some of the area’s premier schools, with nine public elementary and two public middle schools. Castro Valley High LOCATION HIGHLIGHTS

Castro Valley Unified School District: Outdoor paradise: bordered by Lake Castro Valley’s $320 million Sutter Castro Valley is primarily nine public elementary schools, Chabot to the northwest Health’s Eden Medical Center a residential community with only two public middle schools and one and the San Leandro Hills along includes a 230,000 SF hospital about 5% of its land developed public high school the northern edge with 130 acute-care beds and a for commercial uses 34-bed universal care center STRATUS APARTMENTS

CASTRO VALLEY RENTS ARE BETWEEN 11% AND 45% CHEAPER THAN NEIGHBORING CITIES

MARKET OVERVIEW

+58% +32% $2,246

+18%

San Francisco Oakland Average Rent $4,081 Average Rent $3,108 +38% Castro Valley Alameda AVERAGE Q1 2019 RENTS FOR Average Rent $2,696 CLASS A/B APARTMENTS 56 San Mateo +11% Average Rent $3,298 STRATUS APARTMENTS

Fremont Average Rent $3,108

Destination Transportation Travel Oakland BART 28 Mins San Francisco BART 33 Mins Fremont BART 27 Mins OAK BART 27 Mins San Mateo CAR 27 Mins 57 STRATUS APARTMENTS MARKET OVERVIEW

AFFORDABILITY GAP

HOUSING PROFILE CASTRO VALLEY EAST BAY SOURCE

Average Household Income $133,569 $128,598 IPA MARKET OVERVIEW

Median Age 43 38 IPA

Vacancy (1Q 2019) 3.60% 4.30% IPA

Median Home Price (1Q 2019) $595,110 $786,645 Trulia/IPA

Property Tax (1.207%) Property Tax & Insurance $8,383 $10,695 + Insurance ($1,200/yr) Total (including Property Tax $603,493 $797,340 & Insurance) 58

STRATUS APARTMENTS OWNING VS. RENTING CASTRO VALLEY EAST BAY SOURCE

Average Effective Rent (1Q 2019) $2,105 $2,344 IPA

Monthly Housing Payment 10% down, 4.3% interest, 30-year $2,688 $3,551 on Median Priced Home period

Affordability Gap $583 $1,207 (Monthly Housing-monthy rent)

Percentage Gap 27.70% 51.49% (Affordability Gap/ Monthly Rent)

% of Population Who Can Afford 48.00% 38.00% Median Priced Home

CASTRO VALLEY: https://censusreporter.org/profiles/16000US0611964-castro-valley-ca/ EAST BAY: https://censusreporter.org/profiles/05000US06013-contra-costa-county-ca/ https://censusreporter.org/profiles/05000US06001-alameda-county-ca/ EAST BAY MEDIAN HOME PRICES

YEAR (* PROJECTED) HOME SALES MEDIAN HOME PRICE

2010 29,738 $367,370

2011 32,122 $343,801

2012 33,002 $420,385

2013 28,765 $546,139

2014 27,528 $595,895

2015 27,135 $646,968 MARKET OVERVIEW

2016 27,482 $692,900

2017 26,970 $767,455 59

2018 22,706 $786,645

2019* 24,261 $826,470

2020* 24,875 $873,803

2021* 25,156 $930,481

2022* 24,635 $987,488

2023* 25,730 $1,050,981 STRATUS APARTMENTS STRATUS APARTMENTS

MARKET OVERVIEW

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Cor a d W ia d k r r V o Ca S y L S t w Stratus Apartments - 20421. Anita Ave, Castrob Valley, CA 94546 o t O a B c d M d md K l u y i lv W i s no a B r t l G t a c l rove W W lly S u g a n Rd e S Ke Hampto h t W t d in s V L n S S l i o a y L l h a t a A e A il i A w e n v we 1. Eden Medicali Center - 20103 Laker Chabot Rd,d Castro Valley, CA 94546 v M L d V t n r e e Le S o oy n e o y e e r a l y e g ec r l n a a n r h o t m m t c G A g W St a o a o W r P e v o P s d r o K n ia R e m e V a a te

en H v ve n s e t t A

co P R ld o C en i A e r o c t 2. rCastro Valley High School - 19400 Santa Maria Ave, Castroa A Valley, CA 94546a y r s n i e S A E v o n vil A G F r t a V C 6 v i e ie v o V i an e o t e i L a r Cen h s t C y v a A it t S A T h e l L r o v d t l r e t i r Dr n g l Cherryland S l Hi D e A l g 3. California State University,a East Bay - 25800880 Carlosd Bee Blvd, Hayward CAy 94542 e B in e v V o e a v s 7 v i i d W e l t in s a r y v S t a A e rr Ro h V n t V t S N V e d t B a n i a e Ch S m Via ra a g i ia S r u m ay y t e G C n V T A H d i i W V a t a S o V o tz m om a W 4t S i e 4. Castro Valley Elementaryn School - 20185i San Miguel Ave, CastroM Valley, CAs 94546 t l C V N a F e os ll S l h R c e w s l e e t a o i A e B W j s S n e j y A o n s d l o San n e e o u t D S al s v s S l Wa d e k ay t t M R y o Vi e m da Way e l W r t n C n Lorenzo a e n Si a Pa a t n v M i S 5.h CastroA Valley Community Park - 3683 Quaila Ave, Castroe Valley, CA 94546 ro B n 3rd A v d A l o y a v A G v S a n e d n M t e u l a e l 5th Hid q n a d v t t St l d c s n ve A S g is en a e a V e L m an ci w n o s 2 Ln l i o Va a z V a lo i S

i S i n Ha il vd im me o n

V a l S t

t V t i H P n d t

M a A B k o W S i a t a 6. Adobe Park and Art Gallery - 20375 San Miguel Ave, Castro Valley, CA 94546 O e a r u r e r B E Vi F s St

t s C n r nt in n y l o C l i u v o b c S St M h e r d r l V r a H e E i D e q i e r s a t t ek ia a in o S Pl V u s A k t d C H r h n it v e B R s iel e P a 7. Castro Valleya BARTa Station - 3301 Norbridgee Ave, Castro Vallve ey CA 94546 S n w n A t Ea o o s y 1 st A y a v e o Luc ires per rle s e T a Via A i y s a i Sh e ve t i V v n V A A l A Hayward S t a i v r re a e la u V 8. San Leandro Hospital - 13855 E 14th St, San Leandro, CA 9457ve 8 op La H i n A P t a tt t S W Rd B le S man rt G D STRATUS APARTMENTS Bock nda l a ve C W a Via Ho v B a A a t lt d r y t Bart- S e d lle S tk t r a er Nina St e m A Hayward in p t 9. Chevron StationV - 2920 Castro Valley Blvd, Castro Valley CA 94546n S l t s a S e S v i d A W ir D l a v A B S r e d ta A Coralla r i Via Bl v t a n San Ar t b n N o house D e W

d Club nse o t t a a l i r S n

V an Su r C S 2nd e gs L S B ir in fo t B

10. Citybank - 3288 Castro Valley Blvd, Castro Valley, CAW 94546 A Amtrak- la K v C r d F r V e M le d Hayward W e gen D i t t ie V c h r a o a St y W S T a i r

a C a St Y t y Hig W D O V l Hayward o a a e L J h k i Leon r l u l 11. Walgreensa Pharmacya - 3382 Castro Valley Blvd, Castro Valley, CA 94546 S a e ube o n m Via N d bil Memorial Park r s t d

J R J B D S u e D e o rs e e lv r

t a V li v n l u d l o e s a a Hayward i D

A mpu C c

M a lf D M A r C to S o n r l Skywest Golf G Executive S i o a c i 12. Safeway - 20629 Redwood Rd, Castro Valley CA 94546 r l e v r U a d e s y d n Course Airport a e n s r St i Dr

e A P v a C Sarit a e Via t

e n v a r a v t

G A t e l s n edbud L y S i H R i e O s t

S l S C a t ade S y 13. Castro Valley Marketplace - 3295 Castro Valley Blvd, Castroe Valley, CA 94546 St e n t wo v S s l A n e le o C k p a g n o i t y e l Av d Hayward r to s n w r Ne a Ave Car C n n S lo a e i L k y e s ir a S n Wi c c r e B T 3 Regional s n a o e v yn m e t l S a t i a r J B d Blvd Shoreline D B Je o T lv ar l d e d yw O r vd t h v Ha a o o A e . l d v e R R m ch A Av r n Co od d e d a O H a r wo v s i m sa ng A lla ar ir Lo n A entra r te B to v C l y S lvd in So e B Rd W to lvd W Rd STRATUS APARTMENTS

CASTRO VALLEY’S AFFLUENT TENANT BASE

AND STRONG RENT GROWTH MARKET OVERVIEW

Castro Valley Average Household Income

$180,000 $160,000 $152,665 $140,000 $133,569 62 $120,000 $105,854 STRATUS APARTMENTS $100,000 $80,879 $80,000 $60,000 $40,000 Average Household Income $20,000 $0 2000 2010 2018 2023*

Year (* Projected) Castro Valley-Hayward-San Leandro-Union Average Effective Rent

$3,000

$2,385 $2,500 $2,287 $2,192 $2,040 $2,105 $2,130 $1,944 $1,984 $2,000 $1,875 $1,651 $1,499 $1,500

$1,000

$500 Average Effective Rent

$0 2013 2014 2015 2016 2017 2018 2019* 2020* 2021* 2022* 2023* MARKET OVERVIEW

Year (* Projected) 63 Castro Valley-Hayward-San Leandro-Union Average Vacancy Rate

4.5% 3.9% 4.0% 3.4% 3.6% 3.4% 3.5% 3.3% 3.0% 3.2% 3.0% 3.1% 3.2% 3.0% 2.5% 2.5% 2.0% 1.5% Vacancy Rate 1.0% STRATUS APARTMENTS 0.5% 0.0% 2013 2014 2015 2016 2017 2018 2019* 2020* 2021* 2022* 2023*

Year (* Projected) STRATUS APARTMENTS

EAST BAY’S EMERGING TECH SCENE WITH IMPRESSIVE EMPLOYMENT FUNDAMENTALS

MARKET OVERVIEW

STRATUS APARTMENTS Square Technologies recently signed a 350,000-square-foot Credit Karma recently signed a 106,000-square-foot lease in Oakland’s Iconic Uptown Station building. lease at 1100 Broadway in Oakland.

WeWork recently signed a 68,000-square-foot on three Cooper Companies recently signed a 49,315- floors of 2201 Broadway in Oakland. square-foot lease in Bishop Ranch. East Bay’s Bachelor’s Degree or Higher Summary

45.0% 41.7% 42.1% 40.0% 39.7% 34.9% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0%

% of population with Bachelor’s Degree $0 2000 2010 2018 2023* MARKET OVERVIEW Year (* Projected) 65 Large university presence creating desirable talent pipeline

Mills College Holy Names University University of California, Berkeley STRATUS APARTMENTS

California State University, East Bay Patten College STRATUS APARTMENTS East Bay’s Strong Employment Growth 45,000 40,000 39,000 35,400 33,600 35,000 29,400 30,000

MARKET OVERVIEW 22,400 25,000 21,400 20,800 20,000 16,800 15,900 15,000 10,000 5,000 Yearly Employment Growth 0 2011 2012 2013 2014 2015 2016 2017 2018 2019* Year (* Projected) 66 East Bay Unemployment Rate STRATUS APARTMENTS

10.0% 9.4% 9.0% 8.2% 8.0% 7.0% 6.7% 6.0% 5.4% 4.6% 5.0% 4.2% 4.0% 3.4% 3.0% 3.1% 3.0% 2.0% Unemployment Rate 1.0% 0.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019* Year (* Projected) +950,000 SQUARE FEET OF OFFICE DEVELOPMENTS UNDERWAY IN NEARBY OAKLAND

601 Oakland City Center: 24 stories of Class A office space totaling 660,000 square feet MARKET OVERVIEW

67 STRATUS APARTMENTS

The Key at 12th: 12-story adaptive reuse project totaling 320,000 square- feet. The project will integrate a historic key system building with retail and office components East Bay Average Asking Rents STRATUS APARTMENTS

$45.00 38.79 $40.00 $35.24 $35.00 $32.70 $30.00 $27.70

$25.60 MARKET OVERVIEW $23.32 $23.68 $24.56 $25.00 $20.00 $15.00 $10.00

Average Asking Rents $5.00 $0.00 2011 2012 2013 2014 2015 2016 2017 2018 Year (* Projected) 68

STRATUS APARTMENTS East Bay Office Market Vacancy Rates

18.0% 16.2% 15.3% 16.1% 16.0% 14.0% 12.9% 11.6% 11.6% 12.0% 11.2% 11.0% 10.0% 8.0% 6.0% Vacancy Rate 4.0% 2.0% 0.0% 2011 2012 2013 2014 2015 2016 2017 2018

Year (* Projected) CASTRO VALLEY MARKETPLACE DEVELOPMENT WITHIN ONE BLOCK OF STRATUS APARTMENTS MARKET OVERVIEW

With a projected completion date of Fall 2019, the Castro Valley Marketplace will be an artisanal food hall and community gathering space along Interstate 580 between Interstates 680 and 880. The property will be anchored by the Castro Valley Natural Grocery and STRATUS APARTMENTS will include a bread bakery, butchery, sidewalk cafe, craft cocktails, wine shop, a commercial kitchen and cooking school, and event and collaboration space. STRATUS APARTMENTS DEMOGRAPHICS WITHIN 3 MILES

MARKET OVERVIEW

186,094 GENDER POPULATION 49.28% 50.72%

STRATUS APARTMENTS $ $104,416 $828,200 AVERAGE HOUSEHOLD MEDIAN HOUSING INCOME VALUE

60,417 TOTAL HOUSEHOLDS POPULATION 1 MILE 3 MILES 5 MILES HOUSEHOLDS BY INCOME 1 MILE 3 MILES 5 MILES

2023 Projection 2018 Estimate Total Population 26,121 186,154 352,601 $200,000 or More 9.34% 8.30% 8.15% 2018 Estimate $150,000 - $199,000 11.69% 9.08% 9.57% Total Population 26,188 186,094 353,533 $100,000 - $149,000 19.82% 20.15% 20.98% 2010 Census $75,000 - $99,999 15.08% 14.24% 14.36% Total Population 25,200 172,611 329,754 $50,000 - $74,999 15.75% 16.00% 15.75% 2000 Census $35,000 - $49,999 9.35% 11.09% 10.75% Total Population 25,346 168,149 319,813 $25,000 - $34,999 5.27% 6.21% 6.35% Current Daytime Population $15,000 - $24,999 6.42% 6.91% 6.76% 2018 Estimate 23,235 128,171 269,397 Under $15,000 7.27% 8.03% 7.34% HOUSEHOLDS 1 MILES 3 MILES 5 MILES Average Household Income $112,610 $104,416 $105,334 2023 Projection Median Household Income $84,703 $77,980 $80,140 Total Households 10,390 66,441 122,848 Per Capita Income $44,792 $37,020 $36,322 2018 Estimate POPULATION PROFILE 1 MILE 3 MILES 5 MILES Total Households 10,353 65,472 120,982 Population By Age Average (Mean) Household Size 2.46 2.77 2.84 2018 Estimate Total Population 26,188 186,094 353,533

2010 Census MARKET OVERVIEW Under 20 22.86% 24.80% 24.41% Total Households 9,758 60,221 111,859 20 to 34 Years 19.03% 22.74% 22.42% 2000 Census 71 35 to 39 Years 6.95% 7.39% 7.22% Total Households 10,227 60,417 112,016 40 to 49 Years 14.23% 13.54% 13.44% Growth 2015-2020 0.36% 1.48% 1.54% 50 to 64 Years 21.18% 19.16% 19.26% HOUSING UNITS 1 MILES 3 MILES 5 MILES Age 65+ 15.75% 12.37% 13.27% Occupied Units Median Age 40.83 36.59 37.13 2023 Projection 10,390 66,441 122,848 Population 25+ by Education Level 2018 Estimate 10,355 65,802 121,501 2018 Estimate Population Age 25+ 18,861 129,207 246,363 Owner Occupied 5,433 32,152 65,180 Elementary (0-8) 2.61% 7.04% 6.98% Renter Occupied 4,920 33,320 55,802 Some High School (9-11) 4.62% 7.29% 7.66% Vacant 2 330 519 High School Graduate (12) 24.02% 25.73% 25.84% Persons In Units Some College (13-15) 24.42% 21.90% 21.57% 2018 Estimate Total Occupied Units 10,353 65,472 120,982 Associate Degree Only 9.06% 7.74% 7.41% 1 Person Units 30.84% 26.12% 25.25% Bachelors Degree Only 22.25% 19.38% 19.86% STRATUS APARTMENTS 2 Person Units 29.87% 27.81% 27.37% Graduate Degree 10.81% 8.06% 7.85% 3 Person Units 17.02% 17.09% 16.86% Population by Gender 4 Person Units 13.30% 14.35% 14.55% 2018 Estimate Total Population 26,188 186,094 353,533 5 Person Units 5.44% 7.75% 8.12% Male Population 48.11% 49.28% 49.00% 6+ Person Units 3.53% 6.87% 7.84% Female Population 51.89% 50.72% 51.00% JON HOLMQUIST Senior Managing Director Investments San Francisco Office [email protected] Tel: (415) 625-2117 License: CA 01257479

JOHN GARRETT First Vice President Investments San Francisco Office [email protected] Tel: (415) 625-2131 License: CA 01421403

OFFERING MEMORANDUM