BROKER'S OPINION OF VALUE

2700 DAIR ASHFORD, , TX 77082 A 80 Unit ● Class C ● Multi-Family Asset

4295 San Felipe ● Suite 355 ● Houston, TX 77027 www.ketent.com BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082

APARTMENTS FOR SALE $12,600,000 PRICE/UNIT: $70,000 PRICE/SF: $73.71 Units: 180 TERMS: ALL CASH Avg Size: 950 PRO-FORMA CAP RATE: 6.76% Date Built: 1981 Rentable Sq. Ft.: 170,932 Stabilized Value Capped @ 6.5% $13,099,294 Acreage: 6.01 Est Rehab/Upgrade @ $/unit $0 Occupancy: 91% Est. Entrepreneurial Profit $0 Class: B Est. Carry to Stabilization $0 Stabilized NOI $851,454 Asking Price $12,600,000 SALIENT FACTS: ♦ Available on an All Cash or New Loan Basis ♦ Off Market Offering ♦ Located in near West Houston ♦ Ideal for long term hold ♦ Originally constructed as condominiums ♦ Centrally located between Beltway 8, Hwy 6, Westheimer and I-10 ♦ Near Houston's Energy Corridor

For More Information Please Contact:

Tom Wilkinson [email protected] 713-355-4646 ext 102

4295 San Felipe, Suite 355 Houston, TX 77027 www.ketent.com

BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082

Physical Information Financial Information Proposed Loan Parameters Operating Information Number of Units 180 Asking Price $12,600,000 Est New Loan @ 75% of Asking $9,450,000 Est Mkt Rent (Jul-16) $150,140 Avg Unit Size 950 Price Per Unit $70,000 Amortization (months) 360 Estimated Collections $136,137 Net Rentable Area 170,932 Price Per Sq. Ft. $73.71 Debt Service $574,581 Physical Occ (Aug-16) 91% Land Area (Acres) 6.01 Stabilized NOI $851,454 Monthly P & I $47,882 Est Ins per Unit per Yr $450 Units per Acre 29.939 Stabilized Value Capped @ 6.5% $13,099,294 Interest Rate 4.5% Property Tax Information Date Built 1981 Est Rehab/Upgrade @ $/unit Date Due 10 Yrs Tax Rate (2015) 2.61846 Water Meter / Master Master Est. Entrepreneurial Profit Est Res for Repl/Unit/Yr $300 2016 Prelim Assessment $5,814,201 Elec Meter Indiv Est. Carry to Stabilization $0 Yield Maintenance Yes 2016 Taxes $152,243 Roof Style Pitched Calculation of Value $13,099,294 Est Future Tax Assessment $10,080,000 HVAC System HVAC-Indiv *Current Value is Stabilized Value less Rehab, Profit and Carry Est Future Taxes @ 80% $263,941

INCOME MODIFIED ACTUALS PRO-FORMA PRO-FORMA INCOME Current Street Rent with a 6% Increase 1,909,781 $159,148 / Mo Estimated Gross Scheduled Income 1,909,781 $159,148 / Mo Estimated Loss to Lease (2% of Total Street Rent) (38,196) 2% Estimated Vacancy (7% of Total Street Rent) (133,685) 7% Estimated Concessions and Other Rental Losses (4% of Total Street Rent) (76,391) 4% Estimated Utilities Income 90,119 $501 / Unit / Yr Estimated Other Income 66,587 $370 / Unit / Yr Estimated Total Rental Income 1,818,215 ESTIMATED TOTAL PRO-FORMA INCOME 1,818,215 $151,518 / Mo 12 Mo Avg Income $1,633,643

EXPENSE Aug '15 thru Jul '16 Expenses Estimated Expenses Fixed Expenses Fixed Expenses Estimated Fixed Expenses Taxes $141,153 $784 per Unit 7/16 operating statement $263,941 $1,466 per Unit 2015 Tax Rate & Future Assessment Insurance $129,795 $721 per Unit $81,000 $450 per Unit Estimated Total Fixed Expense 270,948 $1,505 per Unit 344,941 $1,916 per Unit Utilities Utilities Estimated Utilities Electricity $34,349 $191 per Unit $34,349 $191 per Unit Water & Sewer $95,771 $532 per Unit $95,771 $532 per Unit Gas $327 $2 per Unit $327 $2 per Unit Total Utilities 130,447 $725 per Unit 130,447 $725 per Unit

Other Expenses Other Expenses Estimated Other Expenses General & Admin & Marketing $88,492 $492 per Unit $46,800 $260 per Unit Repairs & Maintenance $218,779 $1,215 per Unit much higher than normal $81,000 $450 per Unit Labor Costs $227,926 $1,266 per Unit $227,926 $1,266 per Unit Contract Services $63,032 $350 per Unit higher than normal $18,009.1 $100 per Unit Management Fees $61,749 3.78% $343 per Unit $63,638 3.50% $354 per Unit Total Other Expense 659,978 $3,667 per Unit 437,373 $2,430 per Unit

Total Operating Expense 1,061,373 $5,897 per Unit 912,761 $5,071 per Unit

Reserve for Replacement 54,000 $300 per Unit 54,000 $300 per Unit

Total Expense 1,115,373 $6,197 per Unit 966,761 $5,371 per Unit Net Operating Income (Actual Underwriting) 518,270 851,454

Asking Price 12,600,000 12,600,000 "All In" Price Cap Rate 4.11% 6.76% Proposed Debt 9,450,000 9,450,000 Equity 3,150,000 3,150,000 Estimated Debt Service 574,581 574,581 Cash Flow (56,311) 276,873 Cash on Cash -1.79% 8.79%

NOTES: ACTUALS: Income and Expenses calculated using owner's 7/16 operating statement. PRO FORMA: Income is Pro Forma as Noted. Taxes were calculated using 2015 Tax Rate & Future Assessment. Insurance is estimated. Management Fees calculated as 3.5% of Gross Income, Other expenses are Estimated for the Pro Forma.

DISCLAIMER: The information contained herein has been obtained from sources that we deem reliable. We have no reason to doubt the accuracy of the information, but we have not verified it and make no guaranty, warranty or representation about it. It is your resonsibility to independently confirm its accuracy and completeness. We have not determined whether the property complies with deed restrictions or any city licensing or ordinances including life safety compliance or if the property lies within a flood plain. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME OR EXPENSE AND PERFORM OR HAVE PERFORMED ANY INSPECTIONS TO VERIFY POSSIBLE CONTAMINATION BY ASBESTOS, LEAD PAINT, MOLD OR ANY OTHER HAZARDOUS SUBSTANCES. The owner reserves the right to withdraw this listing or change the price at anytime without notice during the marketing period.

8/24/2016 BellaVista PROPERTY OVERVIEW BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082 Keymap: 488V Construction Quality: B PROPERTY INFORMATION AMENITIES EXISTING MORTGAGE TAXING AUTHORITY - HARRIS COUNTY Age: 1981 Access Gates Park & Ride Nearby Mortgage Balance ACCT NO: 0402250010001 Elec Meter: Indiv Cable Ready Walk-In Closets Amortization Alief ISD $1.280000 A/C Type: HVAC-Indiv Club House School Bus Pick-up P & I Harris County $0.419230 Water: Master Laundry Rooms Shuttle Route Type Harris County Flood Control $0.027330 Wiring: Copper Mini Blinds Patios/Balconies Assumable Port of Houston Authority $0.013420 Roof: Pitched Pool Monthly Escrow Harris County Hospital District $0.170000 Paving: Concrete Bookshelves Origination Date Harris County Education Dept $0.005422 Materials: Brick/Wood Outside Storage Due Date City of Houston $0.101942 # of Stories: 2 Ceiling Fans Interest Rate Houston Community College $0.601120 Parking: Open Yield Maintenance Buildings: 25 Transfer Fee 2015 Tax Rate/$100 $2.618464 Units/Acre: 29.94 *In Select Units 2016 Prelim Assessment $5,814,201

COLLECTIONS

12 Mo Avg $ 136,137 $150,000

Aug 2015 $ 133,490 $145,000 Sept 2015 $ 138,789 9 Mo Avg $ 135,065 Oct 2015 $ 145,778 $140,000 Nov 2015 $ 136,072 6 Mo Avg $ 134,483 $135,000 Dec 2015 $ 136,417 $130,000 Jan 2016 $ 136,198 3 Mo Avg $ 133,661 Feb 2016 $ 127,135 . $125,000

Mar 2016 $ 137,552 $120,000 Apr 2016 $ 141,229 $115,000 May 2016 $ 133,594 June 2016 $ 137,474 July 2016 $ 129,915

PLEASE DO NOT VISIT THE SITE WITHOUT AN APPOINTMENT MADE THROUGH THE BROKER.

PROPERTY HIGHLIGHTS

The Bella Vista Apartments, is a two story, garden-style, apartment community located in near west Houston. The asset was built in 1981 and per Enriched Data Online was renovated in 2004. Residents enjoy ample amenities which include: faux wood flooring, laundry facilities, patios and balconies, walk-in closets, and wood burning fireplaces. The original builder (The Etto Corporaation) planned to condo convert the asset.

The property enjoys great drive-by on Dairy Ashford, a major north/south thoroughfare, near the corner of Westheimer. The property has close access to Beltway 8, The Westpark Tollway and Hwy 6. The majority of apartment communities in the submarket are "A" quality with very few "C' and "D'. Overall occupancies average 85%.

The property has been nicely rehabbed.

Disclaimer: The information contained in this Memorandum reflects material from sources deemed to be reliable, including data such as operating statements, rent roll, etc. provided by the Owner. Notwithstanding, KET Enterprises Incorporated does not make any warranties about the information contained in this marketing package. Every prospective purchaser should verify the information and rely on his accountants or attorneys for legal and tax advice. This offer is “As-Is, Where-Is”. Answers to specific inquiries will have to be supplied by the Owner and are available upon request. Rates of return vary daily. No representations are made concerning environmental issues, if any. BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082 Unit Mix UNIT MIX AUGUST 2016 No. Market Unit Floor Type Sq Ft Total SqFt Total Rent Rent/SF Units Rent

1 Bed/1 Bath 16 622 9,952 $640 $10,240 $1.03 1 Bed/1 Bath 19 622 11,818 $620 $11,780 $1.00 1 Bed/1 Bath 4 776 3,104 $735 $2,940 $0.95 1 Bed/1 Bath 4 776 3,104 $715 $2,860 $0.92 2 Bed/1 Bath 15 790 11,850 $750 $11,250 $0.95 2 Bed/1 Bath 14 790 11,060 $730 $10,220 $0.92 2 Bed/2 Bath 34 1,103 37,502 $915 $31,110 $0.83 2 Bed/2 Bath 8 1,113 8,904 $930 $7,440 $0.84 2 Bed/2 Bath 34 1,103 37,502 $890 $30,260 $0.81 3 Bed/1 Bath 12 1,125 13,500 $1,010 $12,120 $0.90 3 Bed/1 Bath 8 1,142 9,136 $1,020 $8,160 $0.89 3 Bed/1 Bath 12 1,125 13,500 $980 $11,760 $0.87

180 950 170,932 $828 $150,140 $0.88 Total Average Total Sq. Average TOTALS AND AVERAGES Total Rent Average Rent/ SF Units Sq. Ft. Feet Rent/Unit

UNITS BY TYPE

Apartment Amenities Community Amenities

18% Ceiling Fans 24% Swimming Pool Washer/ Dryer Connections Playground Two-Tone Paint Fitness Center Faux Wood Floors Outside Storage Track Lighting Pet Friendly Updated Fixtures Courtesy Patrol Wood Buring Fireplaces Clothes Care Facility Walk-In Closets Clubhouse 16%

42%

1 Bed/1 Bath 2 Bed/1 Bath 2 Bed/2 Bath 3 Bed/1 Bath BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082 BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082 PROPERTY LOCATION BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082 BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082 PROPERTY LOCATION BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082 RENT COMPARABLES BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082

RENT COMPARABLES (August 2016 O'Connor & Associates) Sorted by Avg Rent/Unit Property Name Yr Blt Occ #Units Avg SF Avg Rent P/SF

1 Whittfield 1983 95% 195 681 $770 1.130 12735 Whittington

2 Verano 1980 90% 312 725 $819 1.130 2800 S Dairy Ashford

3 Walden Pond 1983 96% 140 895 $868 0.970 12730 Whittington

4 Hunters Point 1983 96% 72 749 $936 1.250 12850 Piping Rock Ln

5 Mansion of Shadowbriar 1983 93% 328 1004 $944 0.940 12200 Overbrook

Totals/Averages Comps 1982 94% 209 811 $879 1.084 Bella Vista 1981 91% 180 950 $828 $0.88 2700 Dairy Ashford Sub-Market Averages(Katy) 85% 19,040 934 $1,088 1.182 Houston Market Avgs 90% 629,311 870 $899 $1.041

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2 SALES COMPARABLES BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082

SALES COMPARABLES (Sorted by Price/Sq. Ft.) Property Name Date Sold Price Sq. Ft. Price/Unit Price/SF Built Units

1 Westhollow Place 5/14 $2,100,000 36,000 $58,333 $58.33 1982 36 13702 Richmond

2 Hudson at Westchase 3/14 $16,600,000 250,264 $53,205 $66.33 1981 312 3131 Hayes

3 Parkland at West Oaks 5/14 $27,352,837 399,084 $85,478 $68.54 2005 320 2600 Westhollow Dr

4 Oaks of Westchase 4/15 $12,446,000 159,738 $68,385 $77.92 1980 182 2851 Wallingford

5 Westchase Creek 4/14 $26,448,000 291,288 $58,000 $90.80 1983 456 3000 Woodland Park

Totals/Averages Comps $16,989,367 227,275 $64,680 $72.38 1986 261

Bella Vista $12,600,000 170,932 $70,000 $73.71 1981 180 2700 Dairy Ashford

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BELLA VISTA APARTMENTS Houston 2016 Peter H O U S T O N O V E R V I E W it numbers H o u s t o n M e t r o p o l i t a n S t a t i s t i c a l A r e a P r o f i l e "Then economy noticed The City of Houston, the largest city in and the fourth largest city in the , is located on the coastal prairies of Houston will continue to be a top "I'm economy southeast Texas and is home to a diverse array of industries and destination for corporate relocations we cultures. Houston is located in Harris County, the nation’s third most lagging populous county. The Houston region, officially designated as the due to its business-friendly

Houston – The Woodlands - Sugar Land Metropolitan Statistical Area environment. (MSA), comprises Harris County and eight other counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and

Waller. The Houston MSA has a population of 6.3 million, according HOUSTON SNAPSHOT Though to new 2010 census figures, up from 5.5 million reported in the 2000 be forum census. The nine county metropolitan area is the fifth-largest  Central Time Zone: one hour behind East Coast, two hours ahead of West Millichap metropolitan area in the nation; combined with its zone of Coast, allowing for optimal communications with entire country.

extraterritorial jurisdiction, an area extending five miles beyond the "We've  Equidistant from East and West Coasts: 1,630 miles to New York, 1,560 miles city’s boundary, the city controls 1,906 square miles. The most Houston to Los Angeles; can reach any metro area within hours by air. barrel urbanized portions of the Houston area are in Harris County, the Jankowski southern part of Montgomery County, and the eastern section of  Convenient to the Port of Houston offering worldwide access (9 miles from petrochemical City of Houston's business center) as well as three other seaports within the Fort Bend County. Houston is home to the sixth largest port in the region. "Oil world and is in close proximity to Mexico, a key trading partner. It economy has a temperate climate and an affordable cost of living.  Convenient to two major passenger/air cargo airports - Bush Intercontinental victims

Airport is located 23 miles north of the central business district and Williams P. Hobby located to the southeast is a 15-minute drive from Houston's central business district. Hobby Airport is currently undergoing a $150 Million "Oil expansion. and

 Ellington Airport, part of the , signed a letter of intent sole in 2014 with Sierra Nevada Corporation to explore potential spaceport

applications. Currently undergoing a $500 Million expansion. Real properties  Houston has one of the lowest costs of living among major U.S. metro areas. Source: The Partnership, May 2016 "I've HOUSTON: Temporary Setback Cyrus chill The Houston area endured another net loss of jobs in March, prompting University of need Houston economist Bill Gilmer to predict for the first time that the region could reach the end of 2016 with fewer jobs than it started with. The area's unemployment rate also Kate climbed by 0.2 percent in March, according to the Texas Workforce Commission. Hunington

units "This has just been a brutal quarter for energy sector," Gilmer said. "As tough as it's been in energy up until this last quarter, this last quarter set a new mark." The situation is worse rent than he expected, but he thinks the bottom may be near. "When we go into recovery, Hunington Source: The Greater Houston Partnership May 2016 we're starting from a later and deeper point than I anticipated," he said. side glamorous into

Bart Woodlands Rivas, and many

Houston 2016 Houston 2016 Peter Jankowski, senior vice president of research for the Greater Houston Partnership, said But the developers also saw daylight in broader social trends, with more baby boomers it is too soon for him to determine whether Houston will end up with positive or negative job downsizing into apartments and millennials putting off buying a house. Homeownership WHERE ARE WE NOW? numbers for the year, but he estimated that oil and gas industry layoffs will peak at midyear. rates have been slipping, even in cities like Houston and Dallas whose housing "Then we'll see how the secondary sectors do after that," he said. While parts of the markets traditionally have been dominated by single-family homes. William Elser of economy more closely tied to consumers, like retail and restaurants, are still faring well, he's Houston-based Hines said these factors have increased demand for quality apartments  noticed a slowdown in areas that have remained strong up until this point. near job centers. Bryant Neil, executive vice president of multifamily for PM Realty, regulatory said Midtown and downtown high-rises will still likely command high rents once they "I'm amazed that with the depth of job losses in the oil and gas industry that Houston's come on the market. He said renters want to live in the urban areas with bars,  economy continues to perform as well as it does," Jankowski said. "And that's a function of, restaurants and close access to transit. Source: , May 5, 2016, we are more diversified or we just have incredible resilience, or maybe the effects are still Erin Mulvaney, Real Estate Reporter  lagging." Source: Houston Chronicle, April 15, 2016 insurance

primary Though oil prices have been rallying lately, the sharp drop in price coupled with the end of a business cycle  is concerning. With the largest oil and gas This ain't the 80's! as institutions making deep cuts, some are starting to Though no longer the "sole driver" of the local economy, a revived oil and gas industry will have flashbacks to the nightmarish ‘80s. But there are  be key to a rebound from the current downturn, experts said Thursday during an annual crucial differences. 2 forum on multifamily development hosted by real estate investment firm Marcus and Millichap.  BEFORE YOU COMPARE according "We've been here before," Patrick Jankowski, vice president of research at the Greater means Houston Partnership, told the group. "There is a lot of hope that oil will rise to $50 or $60 a HOUSTON TO THE 80's, LOOK AT housing barrel. Then people in Houston can relax a little bit and make things a little bit easier for us."

Jankowski predicted the slump will be mitigated by foreign investment and a thriving THESE STATS  petrochemical industry and medical community. Houston

"Oil and gas is important to Houston, and it always will be, but it's not the sole driver of the economy anymore," he said. Multifamily development has been among the most obvious  significantly victims of an economy that's been thwarted the last two years by depressed oil prices.  The unprecedented increase in sublease space is competing against a slew of target new Class-A deliveries. While it may seem bad, recent office deliveries are not even Chartbook "Oil and gas is important to Houston, one-third of the deliveries during the '80s. This stat also highlights an important aspect of Houston's market—it’s old. 40% of the office market was built around and it always will be, but it's not the 1980. Aging buildings and abundant sublease space offering astounding concessions have fueled a flight to quality across the city. sole driver of the economy anymore"  The banking crisis of the '80s saw a massive increase in interest rates. This time around, interest rates have remained very low and the cost of borrowing remains Real estate observers say the apartment market is overbuilt.; more than 29,000 units in 102 depressed by The Fed. In turn, low-interest rates have bolstered financial markets, properties are under construction. consumer spending and real estate.

"I've noticed a negative tone in the past 12 months, in the press and newspapers," said  The banking crisis in the '80s was a two-headed beast, one head related to the Cyrus Bahrami, managing director of South Texas Alliance Residential. "Everyone needs to failure of savings and loans, the other representing the failure of large commercial chill out. It's actually good to be in Houston. It might get worse before it gets better, but we banks. of need to focus on the fundamentals." the  Many lessons were learned during the S&L crisis, and those mistakes were not also Kate Good, senior vice president of multifamily development for repeated in the same magnitude after 2008’s calamity. Large commercial banks Hunington Residential, said the company saw a record number of were propped up, ultimately preventing the banking bloodbath of the '80s. units leased last year and now those renters are renewing, even with been  The national economy is fundamentally different today than it was in the 1980s. worse rent increases. We've posted 27 consecutive quarters of positive nominal GDP growth since the '09 recovery, Hunington has projects on Houston's west side as well as projects in the works on the east recession, whereas the US economy was still stumbling during the '80s oil bust. side to accommodate construction growth in the petrochemical industry. "It's not the most Sweeping changes in the energy and retail sectors have redefined markets. glamorous part of the region," Good said. "We are really encouraged with the growth coming Houston has adapted to that change extremely well. The city’s diversification has into the area." protected it from the full force of impact of the oil downturn. Houston’s top-notch population growth in the past few years has large national retailers flush with cash Bart Barrett, director of Wood Partners, said projects to the north and west, such as in The from a growing economy looking to expand in Houston. Woodlands and the Energy Corridor areas, are offering concessions to renters. Ricardo Rivas, chief investment officer for Allied Orion Group, said he sees concern in Katy. Rents  Such vastly different numbers dispel any chatter that Houston is headed towards and occupancy have already dropped, and he said Energy Corridor projects are offering as an '80s-style meltdown. Houston is no longer America’s oil city. We’re America's many as three months' free rent. fourth-largest city, on track on to be the third. Houston has earned the nickname Hustle Town for good reason. Houston is a city at work, on the grind and We’ll work through this too. Source: Kyle Hagerty, BISNOW Houston, May 02, 2016

Houston 2016 Houston 2016 WHERE ARE WE NOW?

 Borrowing costs will increase due to higher cost of capital and regulatory constraints

 Bank credit standards will tighten ■

with  Class B & C and Secondary Markets will be hit hardest as life TUDOR PICKERING insurance continues to allocate capital to higher quality assets in a primary markets 20

HOLT & COMPANY, ■  Having said that, overall property fundamentals continue to improve as the labor market condition have begun to moderate will ENERGY online  With supply slowing down drastically and starts for 2017 currently at 2,300 units, absorption throughout 2019 will be very strong for Houston ■  Houston is about to become the 3rd largest city in the U.S., INVESTMENT AND online according to new numbers released by the U.S. Census Bureau. This points means thousands of new residents moving to Houston needing housing options. recorded MERCHANT  Foreign investors and major U.S. funds are all poised to enter ■ Houston capital markets quickly at the sign of value investments BANKERS, PREDICT one  Currently, rental rates on class A and A+ assets are dropping average significantly each quarter, but, principals are holding steady to get their Source target price. Source: Wells Fargo Economics / Commercial Real Estate Chartbook: Q1, May 20, 2016 and Cushman & Wakefield, May 24, 2016 $80 OIL IN SECOND

HALF OF 2016! TudorPickeringHolt & Company Bullish on Oil Prices for Second Half of 2016 See Research Report dated May 2, 2016

According to TudorPickeringHolt & Company (TPH) research . "In previous cycles, OPEC cuts tightened the market and in a report published May 2, 2016," given the improving supply shortened the down cycle. These cuts provided significant visible and demand fundamentals as measured by leading edge US excess capacity as OPEC added oil back to the market. Our inventories over the past 6+ weeks, "we wanted to re-iterate our 1.5mmbpd call on OPEC in 2017 adds to current production that is bullish view on oil prices later in 2016 - $80 starting Q416 at/near record levels. By the end of 2017, the only excess through 2018." capacity globally could be Saudi’s ability to produce over 11mmbpd. " . "Although there are no material changes to our global supply and demand model since late March 2016 when TPH revised "Bottom Line – We are “All-In” on our $80/bbl oil call." down (slightly) our global demand assumptions for 2016, this report refreshes our global supply and demand model and thoughts through 2017. TPH continues to expect that the . "As our 2016-17 supply and demand forecast plays out and market will tighten in the second half of 2016." OPEC needs to add 1.5mmbpd from current near-record production levels, oil prices could eclipse $100/bbl as a scarcity premium . "With the recovery upon us, 2017 is setting up to be a tight could override the “US can grow quickly” theme…especially if market even with OPEC production 1.5mmbpd higher than the activity / supply response in the US is slower than the current output by 3Q17. This additional supply comes from: market anticipates. "

. Source: TudorPickeringHolt & Company, Energy Investment and Merchant Neutral Zone +500kbpd Bankers, Crude Research Report, 5/2/16 . Saudi Arabia +600kbpd (to nearly 11mmbpd) . Libya +400kbpd"

Palm Court ● 801 Country Place ● Houston, TX 77079 Far West Houston Sub-Market

WEST HOUSTON Far West Houston, an area of approximately 800 square miles in Houston’s western suburbs, is one of Texas fastest growing communities. It is characterized by large master- planned suburban communities and more urban-styled living environments. Far west Houston has easy access to the entire Houston metropolitan area. West Houston and its surrounding suburbs have successfully developed into a high-end, affluent white collar area with a strong entertainment and business sector. This area of Houston is home to numerous restaurants, retail centers, shopping malls and businesses. The City of Houston has 24 Fortune 500 companies including ConocoPhillips, Sysco, Halliburton, Continental Airlines, Waste Management, EOG Resources and many more. Far west Houston also has some corporate headquarter for large companies such as Igloo Corporation and Academy Sports and Outdoors as well as a number of small business parks including Park Row Business Plaza and Westgate Business Park. An abundance of retail centers and shopping malls such as Mall, Crossing at Fry Road and Memorial City Mall also benefit the area for both entertainment and employment opportunities. Heavy employment and strong demographics have made west Houston and its surrounding suburbs an ideal place for people and business alike. Easy access to the Westpark Toll road and Interstate 10 provides convenient transportation to the entire Houston metropolitan area. Within a few miles of the property there is a wide range of retail centers, shopping malls, restaurants, parks, schools and employment opportunities. A few miles west on Interstate-10, Katy Mills Mall is home to over 200 specialty stores totaling more than 1,300,000 square feet of retail space. Memorial City Mall is located east along Interstate 10 and is anchored by large retailers such as Houston’s Energy Corridor in West Houston is strategically Target, Macy's, Sears, and JC Penney. The located along I-10 midway between Beltway 8 and the Grand Parkway. is located off State Highway 6 and covers more than 7,800 acres It is home to multinational and local growth-oriented energy companies with biking and jogging trails, soccer fields, baseball fields and a such as BP America, Shell Exploration and Production, ExxonMobil shooting range.

Chemical, ConocoPhillips, Cabot Oil and Gas, and Global Santa Fe. Non-energy companies including Cardinal Health Care, Inc., Sysco

Corporation and Accenture are also located in the Corridor. MetroNational is part of the $500 million Memorial City project as part of a long-term plan to develop a comprehensive medical center at Memorial City. The Energy Corridor is a people-oriented place to live and work. It provides over 14 million square feet of high quality office space located in park-like settings within walking distance of high-end residential neighborhoods and luxury apartments.

ENERGY CORRIDOR BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082

DEMOGRAPHICS

1 Mile 3 Mile Radius 5 Mile Radius Radius 2016 Estimated Population 24,751 88,413 189,287 2021 Projected Population 27,714 98,882 211,370 26% 33% 2010 Census Population 22,513 79,235 167,561 2000 Census Population 19,573 64,698 140,778

9% Projected Annual Growth 2016 to 2021 2.4% 2.4% 2.3%

POPULATION Historical Annual Growth 2000 to 2016 1.7% 2.3% 2.2% 11% 21% 2016 Median Age 33.5 34.1 34 White Black Asian Other Hispanic

2016 Estimated Households 11,410 40,102 79,248 2021 Projected Households 12,445 43,717 86,377 2010 Census Households 10,150 35,095 68,516 2000 Census Households 9,084 29,479 59,045

HOUSEHOLDS Projected Annual Growth 2016 to 2021 1.8% 1.8% 1.8% Historical Annual Growth 2000 to 2016 1.6% 2.3% 2.1% 25.9% Non-Hispanic 2016 Estimated White 45.0% 46.0% 43.6% Hispanic 2016 Estimated Black or African American 28.1% 26.4% 24.9% 74.1% 2016 Estimated Asian or Pacific Islander 14.1% 15.3% 17.3% 2016 Estimated American Indian or Native Alaskan 0.5% 0.5% 0.5% 2016 Estimated Other Races 12.3% 11.8% 13.7%

2016 Estimated Hispanic 25.9% 25.4% 28.6% RACE AND ETHNICITY

2016 Estimated Average Household Income $73,506 $87,450 $83,386 2016 Estimated Median Household Income $58,865 $65,790 $64,912

INCOME 2016 Estimated Per Capita Income $33,902 $39,678 $34,923

2016 Estimated Elementary (Grade Level 0 to 8) 3.1% 4.7% 7.5% $74,000 2016 Estimated Some High School (Grade Level 9 to 11) 4.6% 4.9% 6.6% $73,506 2016 Estimated High School Graduate 17.7% 17.3% 17.5% $73,500 2016 Estimated Some College 23.8% 22.1% 21.1% 2016 Estimated Associates Degree Only 6.8% 6.8% 6.5% $73,000 (AGE 25+) EDUCATION 2016 Estimated Bachelors Degree Only 28.5% 27.1% 25.2% 2016 Estimated Graduate Degree 15.5% 17.1% 15.5% $72,500 $72,073 $72,000 2016 Estimated Total Businesses 1,042 3,175 7,420 2016 Estimated Total Employees 8,387 28,890 79,133 $71,500 2016 Estimated Employee Population per Business 8.1 9.1 10.7 BUSINESS 2016 Estimated Residential Population per Business 23.8 27.8 25.5 $71,000 Subject Houston BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082 BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082 BELLA VISTA ● 2700 DAIRY ASHFORD ● TX 77082 A 268 UNIT CLASS "B-/C+" GARDEN APARTMENT COMMUNITY