Viceroy Apartments 1700 Chapel Hill Road, Durham, NC 27707 Viceroy Apartments

Home , Duke University Hospital, Jack Coombs Field, Koskinen Stadium, Nasher Museum of Art

A 24-Unit Stabilized Opportunity within 0.7 Miles from Renowned Duke University

NON-ENDORSEMENT Exclusively Listed By: AND DISCLAIMER NOTICE Justin Ferguson NON-ENDORSEMENTS ALL PROPERTY SHOWINGS ARE BY APPOINTMENT Altay Uzun Investment Associate Vice President, Investments Marcus & Millichap is not affiliated with, sponsored by, ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP Hampton Roads & Richmond Offices Hampton Roads & Richmond Offices or endorsed by any commercial tenant or lessee iden- AGENT FOR MORE DETAILS. tified in this marketing package. The presence of any Davis Diethrich corporation’s logo or name is not intended to indicate DISCLAIMER: This information has been secured Kyle P. Gross Investment Associate or imply affiliation with, or sponsorship or endorse- from sources we believe to be reliable, but we make no Investment Associate Raleigh Office ment by, said corporation of Marcus & Millichap, its representations or warranties, express or implied, as to Raleigh Office affiliates or subsidiaries, or any agent, product, ser- the accuracy of the information. References to square [email protected] vice, or commercial listing of Marcus & Millichap, and Shelby Jacobs footage or age are approximate. Buyer must verify the Direct: (919)674-1129 Marketing Coordinator is solely included for the purpose of providing tenant information and bears all risk for any inaccuracies. Mar- Mobile: (919)710-6400 Hampton Roads Office lessee information about this listing to prospective cus & Millichap is a service mark of Marcus & Millichap customers. ZAA0780039. Real Estate Investment Services, Inc. © 2017 Marcus & 908.910.1572 Millichap. All rights reserved. www.midatlanticmultifamily.com Contents 7 PROPERTY DESCRIPTION 27 MARKET OVERVIEW 39 MARKET COMPARABLES 57 PRICING & FINANCIAL ANALYSIS 65 DEMOGRAPHIC ANALYSIS Property Details Apartments Viceroy Address: 1700 Chapel Hill Road Total Units: 24 Units Parcel Number: 0821-10-25-7973 Buildings: 2 Buildings Land Use Description: Com/Apartment-Garden Year Built: 1971 Occupancy: 91.67% Property Gross Building SqFt: 20,160 Lot Size: 0.746 Acres Description Total Parking: 2 per Unit HVAC: Central

Utilities Water/Sewer: Owner Paid/Reimbursed by Tenants Garbage/Recycling Owner Paid/Reimbursed by Tenants Electric: Tenant Paid

Property Description 7 LOCAL MAP REGIONAL MAP

Viceroy Apartments Viceroy Apartments 24 Units

24 Units

8 Property Description Property Description 9 VICEROY Apartments 1700 Chapel Hill Road, Durham, NC 27707 Unit Amenities

Marcus & Millichap, as the exclusive advisor to the seller, is pleased to present the opportunity to acquire the Viceroy Apartments, a 24-unit apartment property located in Durham, NC. Hardwood Flooring SUBJECT PROPERTY Matching Appliances The Viceroy Apartments consist of twenty-four (24) +/- 840 sqft two-bedroom, one- bathroom units spread across two three-story buildings built in 1971 and situated on +/- 0.75 acres in one of the country’s most prominent, high-tech research and development regions. Spacious Floorplans Amenities include 24-hour emergency maintenance, accent wall color preference, carpeting, hardwood flooring, ceiling fans, and dishwashers in select units. The property offers easy access to Duke University, the Duke Medical Center, the Veterans Administration Hospital, Dining Area and downtown Durham. Given the excellent submarket fundamentals and the quality of the asset, the Viceroy Apartments represent a strong long term investment opportunity. Carpeting LOCATION Pet Friendly Units The Viceroy Apartments can be accessed by I-85, I-40, NC147 and US 70 West, the main thoroughfares connecting Durham to the Triangle Region. This property’s prime location enjoys the benefits of an array of recreational activities, outdoor attractions, savory Recently Renovated restaurants and a prosperous growing community. Duke University, with approximately Units 16,000 enrolled students, is located 0.7 miles from the subject property. The Durham economy is majorly supported by Duke University and Health Systems with nearly 35,000 employees. Ceiling Fans Other employers in Durham include IBM, Durham Public Schools, GlaxoSmithKline, Blue Cross Blue Shield of NC, Durham City Government, Fidelity Investments, Research Triangle Institute, Veteran Affairs Medical Center and US Environmental Protection Agency. Accent Wall 10 Property Description Investment Highlights • Strong Rental Market: the Durham rental market has Offering Highlights experienced consistent rent increases. Rent increased Offering Price Units Price per Unit 3.4% in the past year.

• A Rare Offering: 16 apartment comunities between $2.625M 24 $109,375 20-50 units traded in the past five years. 6 apartment

comunities between 20-50 units traded in the past Year Built Lot Size Rentable SqFt year. This shows mid-size apartment communities in Durham are rarely for sale. 1971 0.75 20,160 • Pedestrian Friendly: 65 walk score, 62 bike score, Unit Amenities Unit Type and 46 transit score.

• Superb Demographics: median household income for Durham is $56,393 and 48.8% of the population are college educated. Matching Dishwashers in Appliances Select Units • Strategic Location: Duke University and its affiliat- 24 ed medical system are among the primary demand Two-Bedroom drivers for the area. Combined 52,000 students, university staff, and medical system employees. Hardwood Ceiling Fans One-Bathroom Flooring Units • Close Proximity to Downtown Durham: 5 minute drive from downtown Durham’s top attractions In- cluding Durham’s Central Campus, American To- bacco Campus, Brightleaf Square, Durham Bulls Recently Pet Friendly Athletic Park, The Carolina Theatre, and Durham Renovated Units Units 100Property Description 13 Performing Arts Center. Accessibility Part of Durham’s appeal is its plethora of job opportunities from Duke University and the largest BRIGHTLEAF science park in the country, Research Triangle Park.

MOREHEAD HILL 62 46 65 Bike Score Some Transit Walk Score WEST END Flat as a pancake, A few nearby public Some errands can be LYON PARK minimal bike lanes. transportation options. accomplished on foot.

Durham is home to a young, friendly, diverse, and educated population from the recent downtown urban redevelopment that led to an influx of new businesses and residents. Residents enjoy dining out in nationally recognized restaurants or grabbing a drink in one the region’s many microbreweries. Durham is also known for its beautiful green spaces, family-friendly museums, and a growing art scene enhanced by music Chapel Hill Rd festivals and gallery walks. Morehead Ave “Durham boasts a lot of big-city perks while maintaining a tight-knit, small-town vibe.“ OverallA Niche - Niche Review Grade for Property Description 15 Durham COMMUNITY AMENITIES INTERIOR AMENITIES

Carpeting Off Street Parking Hardwood Flooring Pet Friendly Units Ceiling Fans Picnic Area Dishwashers in Select Units 24-Hour Maintenance Upgraded Cabinetry Lush Landscaping Matching Appliances Accent Walls

16 Property Description Property Description 17 Property Description 19 20 Property Description 22 Property Description Property Description 23 24 Property Description Property Description 25 City Of DURHAM “City of Medicine”

“Durham evolved into a global center for information technology, biotechnology, pharmaceuticals and medicine. Healthcare is a major industry including more than 300 medical and health related companies and medical practices with a combined payroll exceeing $1.5 billion annualy.” Duke University Hospital & Medical Center Market Duke Children’s Hospital & McGovern-Davison Health Center Duke Regional Hospital Overview Durham Veterans Administration (VA) Medical Center Lenox Baker Children’s Hospital North Carolina Specialty Hospital

• Nearly 1 in 3 people in Durham have a health related career. • Over 6,000 nurses and 3,700 licensed physicians and interns. • Recognized as one of the top 10 US hospitals according to U.S. News and World Report. • One of Three U.S. hospitals to be recognized by the American Hospital Association for leadership and innovation in quality, safety and commitment to patient care. Demographic Snapshot Total Population: 316,739 Total Households: 120,936 Median Household Income: $56,393 Durham, Civilian Labor Force Population: 67.8% Housing Units: 138,954 Owner Occupied Housing Units: 53.5% NC Vacancy (Q4 2019): 6.58% Median Home Price: $232,600 Monthly Housing Payment: $1,293 Average Asking Rent: $1,157 Affordability Gap: 10.6%

28 Market Overview DUKE CLINICAL RESEARCH DURHAMATTRACTIONS INSTITUTE EVENTS & LEISURE DURHAM VA MEDICAL CENTER ►► Carolina Theater ►► Museum of Life & Science

►► Carolina Ballet ►► Sarah P. Duke Gardens DUKE ►► Durham Performing Arts Center ►► Brightleaf Square FOREST DUKE CHILDREN’S HOSPITAL ►► American Tobaco ►► Bull City Craft ►► AMF Durham Lanes ►► DefyGravity LENOX BAKER DUKE GLOBAL CHILDREN’S HEALTH INSTITUTE ►► Duke University Chapel ►► Durham Arts Council Clay Stu- DUKE PRATT DUKE UNIVERSITY HOSPITAL SCHOOL OF MEDICAL CENTER ►► Golden Belt dio DUKE HEALTH & ENGINEERING ►► Durham Central Park ►► Durham Skate Park FITNESS CENTER

DUKE PARKS & RECREATION AESTHETIC CENTER ►► Eno River State Park ►► Little River Regional Park & Nat-

►► West Point on the Eno ural Area

►► American Village Park ►► Farmers’ Market DUKE CENTER DUKE UNIVERSITY FOR LIVING WALLACE CHAPEL SPORTS CLINIC JACK COOMBS FIELD ►► Durham Bulls ►► Duke Blue Devils Football NASHER MUSEUM OF ART ►► Carolina Mudcats ►► Duke Blue Devils Basketball

►► Carolina Hurricanes MORRIS WILLIAMS TRACK Viceroy CAMERON INDOOR STADIUM Apartments JOB MARKET KOSKINEN STADIUM 24 UNITS ►► Duke University & Health Sys- ►► Horizon Blue Cross Blue Shield tem ►► Fidelity Investments ►► International Business Ma- ►► Research Triangle Institute WALLACE WADE STADIUM chines ►► Norfolk State University ►► Durham Public Schools DUKE UNIVERSITY ►► Sentara Norfolk General Hospi31- GOLF CLUB Market Overview DUKE UNIVERSITY Ranked 8th in U.S. News Best Colleges 2019 Edition of Best Colleges National Universities • One of the most Prestigious Private Universi- ties in the World. • 15,892 Current Students. • 8:1 Student Faculty Ratio. • 50% of Undergraduates Participate in Faculty Research. • 52% of Student Population is Female. • 70% of Classes have Fewer than 19 Students. • 97% Freshman Retention Rate. • 200+ Domestic and International Learning Opportunities. • 11% of Applicants Admitted. • Duke Basketball is 4th in All Time Wins 0.7 Miles from of any NCAA Basketball Program. Duke University

32 Market Overview ACCESSIBILITY TO MULTIPLE EMPLOYMENT CENTERS

The property’s central location as well as its immediate access to I-85 enables residents to quickly access many major employment centers within 30 miles throughout the Triangle Region. The property’s ability to provide convenient access to a broad variety of services expands the potential renter pool, pro- motes above average rent growth, and drives high occupancy levels.

COMPANY SECTOR EMPLOYEES DISTANCE

Duke University & Health System Health Care 38,591 5.0 Miles State of North Carolina Government 24,083 - DINING: Bel Gusto, Black Wake County Public Schools System Education 19,845 - Twig Cider House, Nosh, Smashburg- er, Another Broken Egg Cafe, Noodles and Company, Wal-Mart Service 16,135 - Chipotle, Enzo’s Pizza Company, Panera Bread, Dunkin Donuts, Mediterra Grill, Firehouse Subs, Ruby Tuesday, IBM Corporation Service 10,000 4.0 Miles Subway, Salcedo’s Pizza, Jimmy Johns, Greek Cuisine, WakeMed Health & Hospitals Health Care 9,105 29 Miles Esmerelda’s Cafe, Cajun Cafe, Chopsticks, Baja Shack, Juju Asian Tapas + Bar, Burger Beach, Alpaca North Carolina State University Education 9,069 20.9 Miles

Target Service 8,000 - LEISURE: Durham Bulls Atheltic Park, Durham Per- forming Arts Center, Northgate Stadium 10, Phoenix UNC Rex Healthcare Health Care 7,400 16.9 Miles Theatres 10, Full Frame Theater, The Carolina Theatre, SAS Institute, Inc. Technology 5,632 15.4 Miles Motorco Music Hall, Clouds Brewing, Fullsteam Brew- ery, Durty Bull Brewing Company, Sky Zone, Washing- Cisco Systems, Inc. Technology 5,000 10.1 Miles ton Duke Inn & Golf Club, Massage Envy Harris Teeter Service 5,000 - SHOPPING: Northgate Mall, Whole Foods, Harris Tee- Blue Cross Blue Shield of NC Insurance 4,700 7.0 Miles ter NC Dept. of Health & Human Services Government 3,800 6.9 Miles FITNESS: Total Fitness Studio, A.B. Fitness, Duke Fidelity Investments Finance 3,700 8.9 Miles Health and Fitness Center, Prime Athletic Training & Fitness Institute, Pure Barre GlaxoSmithKline Health Care 3,000 2.1 Miles Market Overview 35 DURHAM, NC Culinary Destination “Tastiest Town in the South“ -Southern Living Magazine

Alpaca Peruvian Charcoal Chicken Amerian Meltdown Bar Virgile Blu Seafood and Bar Blue City Burger and Grill Chez Moi Chrirba Chirba Dumpling Cosmic Cantina Dashi Gocciolina Guglhupf Cafe & Biergarten Loaf Mateo Bar de Tapas Mrtro 8 Steakhouse Parizade Piedmont Restaurant 12 EXECUTIVE SUMMARY Pizzeria Toro Rue Cler Express Super Taqueria Toast Tonali Twisted Noodles 36 Market Overview Market Overview 37 4

7 7 3 219 5 Market

Viceroy Apartments Comparables 1 Garden Terrace Apts 2 Alston Square 3 Hayti Lane 4 917 Dacian 5 1901 Morehead Ave 6 Martin Court Ats 7 Willow Terrace Ats 9 8 Corojo 9 Sutton Place SALES COMPARABLES – SUMMARY SALES COMPARABLES // Average Price Per Unit $150,000 Property Name Sale Price COE Units Price per Unit

VICEROY APARTMENTS $2,625,000 - 24 $109,375 1700 Chapel Hill Rd, Durham, NC 27707 $125,000 Garden Terrace Apartments Avg 1 $5,150,000 5/10/2019 55 $93,636 1973 House Ave, Durham, NC 27707 $109,978

Alston Square 2 $1,660,000 6/13/2018 18 $92,222 1008 Burke St, Durham, NC 27707 $100,000

Hayti Lane 3 $2,800,000 5/23/2018 19 $147,368 1 Hayti Ln, Durham, NC 27701 917 Dacian $75,000 4 $1,600,000 6/29/2018 12 $133,333 917 Dacian Ave, Durham, NC 27701

1901 Morehead Avenue 5 $1,278,000 9/27/2018 14 $91,286 1901 Morehead Ave, Durham, NC 27707 $50,000 Martin Court Apartments 6 $3,200,000 4/10/2019 32 $100,000 943 Morreene Rd, Durham, NC 27705

Willow Terrace Apartments 7 $1,675,000 12/11/2017 16 $104,688 $25,000 901 S. Duke St, Durham, NC 27707

Corojo 8 $4,500,000 4/16/2019 44 $102,273 1718 Palmer St, Durham, NC 27707 $0 Sutton Place 9 $10,375,000 7/31/2019 83 $125,000 Viceroy Garden Alston Hayti 917 1901 Martin Willow Corojo Sutton 1 Dansey Circle, Durham, NC 27713 Apartmetns Terrace Square Lane Dacian Morehead Court Terrace Place Apartments Avenue ApartmentsApartments

Market Comparables 41 SALES COMPARABLES // Average Price Per SqFt VICEROY APARTMENTS | 1700 Chapel Hill Rd, Durham, NC 27707 $300 Total 0.75 24 Units $109,375Per Unit Lot Size $250 OFFERING PRICE $2,625,000 Price Per SF $130.21 Pro Forma Cap Rate 6.03% $200 Avg 24 - 2 Bed 1 Bath Units $161.15

$150

| 1973 House Ave, Durham, NC 27707 $100 Garden Terrace Apartments

1 Total $93,636 2.88 $50 55 Units Per Unit Lot Size Sale Price $5,150,000 Close of Escrow 5/10/2019 $0 Price Per SF $103.00 Viceroy Garden Alston Hayti 917 1901 Martin Willow Corojo Sutton Apartmetns Terrace Square Lane Dacian Morehead Court Terrace Place 5 - 1 Bed 1 Bath Units 30 - 2 Bed 2 Bath Units Apartments Avenue ApartmentsApartments 20 - 3 Bed 2 Bath Units

42 Market Comparables Market Comparables 43 Alston Square | 1008 Burke St, Durham, NC 27707 917 Dacian | 917 Davian Ave, Durham, NC 27701

2 Total $92,222 0.81 4 Total $133,333 0.34 18 Units Per Unit Lot Size 12 Units Per Unit Lot Size Sale Price $1,660,000 Sale Price $1,600,000 Close of Escrow 6/13/2018 Close of Escrow 6/29/2018 Price Per SF $164.94 Price Per SF $289.86 18 - 1 Bed 1 Bath Units 12 - 1 Bed 1 Bath Units

Hayti Lane | 1 Hayti Ln, Durham, NC 27701 1901 Morehead Ave | 1901 Morehead Ave, Durham, NC 27707

Total Total 3 Units $147,368 0.12 5 $91,286 0.62 19 Per Unit Lot Size 14 Units Per Unit Lot Size Sale Price $2,800,000 Sale Price $1,278,000 Close of Escrow 5/23/2018 Close of Escrow 9/27/2018 Price Per SF $150.38 Price Per SF $184.26 19 - 2 Bed 1.5 Bath Units 14 - 1 Bed 1 Bath Units

44 Market Comparables Market Comparables 45 Martin Court Apartments | 943 Morreene Rd, Durham, NC 27705 Corojo | 1718 Palmer St, Durham, NC 27707

Total Total 6 Units $100,000 2.07 8 $102,273 3.34 32 Per Unit Lot Size 44 Units Per Unit Lot Size Sale Price $3,200,000 Sale Price $4,500,000 Close of Escrow 4/10/2019 Close of Escrow 4/16/2019 Price Per SF $159.60 Price Per SF $102.27 32 - 1 Bed 1 Bath Units 32 - 2 Bed 1 Bath Units 8 - 3 Bed 2 Bath Units 4 - 4 Bed 2 Bath Units

Willow Terrace Apartments | 901 S. Duke St, Durham, NC 27707 Sutton Place | 1 Dansey Circle, Durham, NC 27713

7 Total $104,688 0.70 9 Total $125,000 8.67 16 Units Per Unit Lot Size 83 Units Per Unit Lot Size Sale Price $1,675,000 Sale Price $10,375,000 Close of Escrow 12/11/2017 Close of Escrow 7/31/2019 Price Per SF $146.93 Price Per SF $149.10 16 - 2 Bed 1 Bath Units 54 - 1 Bed 1 Bath Units 29 - 2 Bed 2.5 Bath Units

46 Market Comparables 4 Viceroy Apartments RENT COMPARABLES – SUMMARY 1 Chapel Tower 6 2 Anderson Apts Property Name Units Year Built 2 Bed SqFt 2 Bed Rent Proximity 3 Georgetown Manor VICEROY APARTMENTS 4 Croasdaile Apts 24 1971 840 $821 - 1700 Chapel Hill Rd, Durham, NC 27707 5 Tareyton Square Chapel Tower 6 Forest Pointe 8 1 400 1978 950 $970-$1,305 2.5 Miles 1315 Morreene Rd, Durham, NC 27705

Anderson Apartments 2 48 1968 924-1,020 $1,000-$1,075 1.0 Miles 3 1600 Anderson Street, Duham, NC 27707

Georgetown Manor 3 50 1965 1,080 $1,125 1.9 Miles 1 1000 N Duke St, Durham, NC 27701

Croasdaile Apartments 4 272 1969 862 $850-$1,215 3.5 Miles 1829 Front St, Durham, NC 27705

Tareyton Square 5 48 1969 930 $875 0.1 Miles 1808 Chapel Hill Rd, Durham, NC 27707 5 Forest Pointe 8 6 222 1955 700-944 $870-$1,070 2.5 Miles 1906 Guess Rd, Durham, NC 27705

Market Comparables 49 RENT COMPARABLES // Two-Bedroom Summary COMMUNITY AMENITIES: VICEROY APARTMENTS 1700 Chapel Hill Rd, Durham, NC 27707 24 Hour Maintenance $1,200 Pet Friendly Units SUBJECT $1,100 Avg UNIT AMENITIES: PROPERTY $1,031 Carpeting $1,000 1971 Hardwood Flooring $900 Year Built Matching Appliances 24 Large Closets $800 Total Units Central A/C UNIT TYPE UNITS SQFT RENT RENT/SQFT 0.75 Dining Area $700 Lot Size 2 Bed 1 Bath 24 840 $821 $0.98 Ceiling Fans $600 COMMUNITY AMENITIES: CHAPEL TOWER On the Bus Line $500 1 1315 Morreene Rd, Durham, NC 27705 2.7 Miles Pool to Subject $400 Fitness Center Property Manager: GSC Playground $300 UNIT AMENITIES: 1978 In Unit W&D $200 Year Built Stainless Steel Appliances 400 Carpeting $100 Total Units UNIT TYPE UNITS SQFT RENT RENT/SF Hardwood Flooring Dishwasher $0 0.72 2 Bed 1 Bath 133 950 $970-$1,305 $1.20 Viceroy Chapel Anderson Georgetown Croisdale Tareyton Forest Lot Size Apartments Tower Apartments Manor Apartments Square Pointe 8 Pet Friendly Units 50 Market Comparables Market Comparables 51 COMMUNITY AMENITIES: COMMUNITY AMENITIES: ANDERSON APARTMENTS CROISDALE APARTMENTS 2 1600 Anderson St, Durham, NC 27705 Pet Friendly Units 4 1829 Front St, Durham, NC 27705 Bark Park Fitness Center 1.0 Miles Off Street Parking 3.2 Miles BBQ/Picnic Area to Subject UNIT AMENITIES: to Subject Property Manager: Property Manager: Pool w/ Sundeck Trinity Properties Hardwood Flooring Ginkgo Residential Bicycle Storage Central A/C 1968 1969 UNIT AMENITIES: Year Built In Unit W&D Year Built Ceiling Fan Plantation Style Blinds 48 Matching Appliances 272 Total Units Spacious Closets Total Units Patio in Select Units UNIT TYPE UNITS SQFT RENT RENT/SF Balcony/Patio UNIT TYPE UNITS SQFT RENT RENT/SF Hardwood Flooring 2.79 2 Bed 1.5 Bath 33 924-1,020 $1,000-$1,075 $1.07 15.96 Stainless Steel Appliances Lot Size Exposed Brick Lot Size 2 Bed 1 Bath 25 862 $850-$1,215 $1.20 Built In Microwave

COMMUNITY AMENITIES: COMMUNITY AMENITIES: GEORGETOWN MANOR TAREYTON SQUARE 3 1000 N. Duke St, Durham, NC 27701 Off Street Parking 5 1808 Chapel Hill Rd, Durham, NC 27707 Laundry Facilities 1.3 Miles 24 Hour Maintenance 0.1 Miles Off Street Parking to Subject UNIT AMENITIES: to Subject Pet Friendly Units Property Manager: Property Manager: Trinity Properties Central A/C Deaton UNIT AMENITIES: Disposal 1965 Patio/Deck 1969 Year Built Hardwood Flooring Year Built Carpeting 50 Carpeting 48 Hardwood Flooring Total Units Total Units Balcony UNIT TYPE UNITS SQFT RENT RENT/SF Dishwasher UNIT TYPE UNITS SQFT RENT RENT/SF Central A/C In Unit Full Size W&D 2.59 2 Bed 1.5 Bath 45 1,080 $1,125 $1.04 1.73 2 Bed 1 Bath 45 930 $875 $0.94 Lot Size Lot Size Spacious Closets Spacious Closets 52 Market Comparables Market Comparables 53 COMMUNITY AMENITIES: FOREST POINTE 8 6 1906 Guess Rd, Durham, NC 27705 Gazebo Fitness Center 2.5 Miles to Subject On Site Management Property Manager: UNIT AMENITIES: Dynamic Management Ceiling Fan 1955 Vinyl Wood Flooring Year Built Stainless Steel Appliances* 222 Built In Microwave Total Units Spacious Closets Central A/C 10.1 UNIT TYPE UNITS SQFT RENT RENT/SF Lot Size 2 Bed 1 Bath 113 700-944 $870-$1,070 $1.18 Carpeting Private Patio/Balcony

54 Market Comparables Market Comparables 55 Viceroy Apartments | P ricing D etail

Price $2,625,000 Financing 1st Loan Down Payment 45% $1,173,092 Loan Amount $1,451,908 Number of Units 24 Loan Type Assumed Price Per Unit $109,375 Interest Type 5.20% Rentable SqFt 20,160 Amortization 30 Years Price Per SqFt $130.21 Year Due 2025 Year Built 1971

Returns Current Year 3 Year 5 IRR Year IRR Unlevered IRR Levered Cap Rate 4.74% 6.32% 6.82% Financial 5 7.62% 9.97% GRM Rate 11.10 9.74 9.08 7 8.24% 19.63% Cash-on-Cash 2.27% 5.79% 6.93% Analysis 10 8.44% 16.68% Debt Coverage Ratio 1.27 1.70 1.83

Current Potential

# of Avg Rental Avg Avg Monthly Avg Avg Monthly Unit Type Units SF Range Rent Rent/SF Income Rent Rent/SF Income

Two Bed One Bath 24 840 $750-$900 $821 $0.98 $19,704 $900 $1.07 $21,600

Totals/Averages 24 840 $821 $0.98 $19,704 $900 $1.07 $21,600

Gross Annual Rents $236,448 $259,200 Viceroy Apartments | R ent Roll D etail Viceroy Apartments | O perating D ata

Square Current Current Potential Potential Income Current Year 1 Unit Unit Type Feet Rent/Month Rent/SF/Month Rent/Month Rent/SF/Month Gross Scheduled Rent $236,448 $264,306 A1 2 Bed, 1 Bath 840 $825 $0.98 $900 $1.07 Less: Vacancy/Deductions 7.3% $17,186 7.2% $19,030 Total Effective Rental Income $219,262 $245,276 A2 2 Bed, 1 Bath 840 $800 $0.95 $900 $1.07 Other Income $5,820 $5,900 A3 2 Bed, 1 Bath 840 Vacant $0.00 $900 $1.07 Effective Gross Income $225,082 $251,176 A4 2 Bed, 1 Bath 840 $815 $0.97 $900 $1.07 Less: Expenses 44.7% $100,655 37.0% $92,987 A5 2 Bed, 1 Bath 840 $850 $1.01 $900 $1.07 Net Operating Income $124,427 $158,189 A6 2 Bed, 1 Bath 840 $800 $0.95 $900 $1.07 Cash Flow $124,427 $158,189 A7 2 Bed, 1 Bath 840 $815 $0.97 $900 $1.07 Debt Service $97,786 $97,786 A8 2 Bed, 1 Bath 840 $895 $1.07 $900 $1.07 Net Cash Flow After Debt Service 2.27% $26,641 5.15% $60,403 A9 2 Bed, 1 Bath 840 $825 $0.98 $900 $1.07 Principal Reduction $21,671 $22,825 Total Return 4.12% $48,313 7.09% $83,229 A10 2 Bed, 1 Bath 840 $795 $0.95 $900 $1.07 A11 2 Bed, 1 Bath 840 $825 $0.98 $900 $1.07 Expenses Current Year 1 A12 2 Bed, 1 Bath 840 $900 $1.07 $900 $1.07 Real Estate Taxes $25,430 $26,193 B1 2 Bed, 1 Bath 840 $897 $1.07 $900 $1.07 Insurance $7,200 $7,200 Utilities - Electric $4,546 $3,000 B2 2 Bed, 1 Bath 840 $825 $0.98 $900 $1.07 Utilities - Water & Sewer $10,799 $9,000 B3 2 Bed, 1 Bath 840 $795 $0.95 $900 $1.07 Trash Removal $3,360 $3,400 B4 2 Bed, 1 Bath 840 $760 $0.90 $900 $1.07 Repairs & Maintenance $19,363 $12,000 B5 2 Bed, 1 Bath 840 $850 $1.01 $900 $1.07 Landscaping/Lawn Care $2,702 $2,800 B6 2 Bed, 1 Bath 840 $850 $1.01 $900 $1.07 Pest Control $983 $1,000 B7 2 Bed, 1 Bath 840 $850 $1.01 $900 $1.07 Misc. Expenses $2,265 $2,300 B8 2 Bed, 1 Bath 840 $750 $0.89 $900 $1.07 Operating Reserves $6,000 $6,000 B9 2 Bed, 1 Bath 840 Vacant $0.00 $900 $1.07 Management Fee $18,007 $20,094 Total Expenses $100,655 $92,987 B10 2 Bed, 1 Bath 840 $795 $0.95 $900 $1.07 Expenses/Unit $4,194 $3,874 B11 2 Bed, 1 Bath 840 $795 $0.95 $900 $1.07 Expenses/SF $4.99 $4.61 B12 2 Bed, 1 Bath 840 $750 $0.89 $900 $1.07 59 Total 20,160 $18,062 $0.90 $21,600 $1.07 Pricing & Financial Analysis O perating Statement Viceroy Apartments | Viceroy Apartments | C ash F low Income Current Year 1 Notes Per Unit Per SF Gross Potential Rent 259,200 266,976 11,124 13.24 Income Current 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Loss / Gain to Lease (22,752) 8.8% (2,670) 1.0% (111) (0.13) Gross Potential Rent 259,200 266,976 274,985 283,235 291,732 300,484 309,498 318,783 328,347 338,197 348,343 Gross Current Rent 236,448 264,306 11,013 13.11 Loss / Gain to Lease (22,752) (2,670) (5,500) (5,665) (2,917) (3,005) (3,095) (3,188) (3,283) (3,382) (3,483) Physical Vacancy (11,822) 5.0% (13,215) 5.0% (551) (0.66) Gross Current Rent 236,448 264,306 269,486 277,570 288,815 297,479 306,403 315,595 325,063 334,815 344,860 Bad Debt (2,364) 1.0% (2,643) 1.0% (110) (0.13) Physical Vacancy (11,822) (13,215) (13,474) (13,879) (14,441) (8,924) (9,192) (9,468) (9,752) (10,044) (10,346) Concession (3,000) 1.3% (3,172) 1.2% [1] (132) (0.16) Bad Debt (2,364) (2,643) (539) (555) (578) (595) (613) (631) (650) (670) (690) Total Vacancy ($17,186) 7.3% ($19,030) 7.2% ($793) ($1) Concession (3,000) (3,172) 0 0 0 0 0 0 0 0 0 Economic Occupancy 92.73% 92.80% Total Vacancy (17,186) (19,030) (14,013) (14,434) (15,018) (9,519) (9,805) (10,099) (10,402) (10,714) (11,036) Effective Rental Income 219,262 242,276 10,220 12.17 Effective Rental Income 219,262 245,276 255,472 263,136 273,796 287,960 296,598 305,496 314,661 324,101 333,824 Utility Bill-Back 5,820 5,900 [2] 246 0.29 Utility Bill-Back 5,820 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 Effective Gross Income $225,082 $251,176 $10,466 $12.46 Total Other Income 5,820 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 Expenses Current Year 1 Notes Per Unit Per SF Effective Gross Income 225,082 251,176 261,372 269,036 279,696 293,860 302,498 311,396 320,561 330,001 339,724 Real Estate Taxes 25,430 26,193 [3] 1,091 1.30 Insurance 7,200 7,200 300 0.36 Expenses Utilities - Electric 4,546 3,000 125 0.15 Operating Expenses (28,673) (21,500) (22,145) (22,809) (23,494) (24,198) (24,924) (25,672) (26,442) (27,236) (28,053) Utilities - Water & Sewer 10,799 9,000 375 0.45 Real Estate Taxes (25,430) (26,193) (26,717) (27,251) (27,796) (28,352) (28,919) (29,498) (30,088) (30,689) (31,303) Trash Removal 3,360 3,400 [4] 142 0.17 Insurance (7,200) (7,200) (7,416) (7,638) (7,868) (8,104) (8,347) (8,597) (8,855) (9,121) (9,394) Repairs & Maintenance 19,363 12,000 500 0.60 Utilities (15,345) (12,000) (12,360) (12,731) (13,113) (13,506) (13,911) (14,329) (14,758) (15,201) (15,657) Landscaping/Lawn Care 2,702 2,800 117 0.14 Management Fee (18,007) (20,094) (20,910) (21,523) (22,376) (23,509) (24,200) (24,912) (25,645) (26,400) (27,178) Pest Control 983 1,000 42 0.05 Total Expenses (94,655) (86,987) (89,548) (91,953) (94,646) (97,669) (100,302) (103,007) (105,788) (108,647) (111,585) Misc. Expenses 2,265 2,300 [5] 96 0.11 Operating Reserves (6,000) (6,000) (6,000) (6,000) (6,000) (6,000) (6,000) (6,000) (6,000) (6,000) (6,000) Operating Reserves 6,000 6,000 250 0.30 Net Operating Income 124,427 158,189 165,825 171,084 179,050 190,191 196,197 202,389 208,773 215,354 222,139 Management Fee 18,007 8.0% 20,094 8.0% 837 1.00 Total Expenses $100,655 $92,987 $3,874 $4.61 Expenses as % of EGI 44.7% 37.0% Net Operating Income $124,427 $158,189 $6,591 $7.85

[1] Concession of $250 monthly for tenant in B8 who assists with routine property upkeep. [4] Trash collection expense based on average cost of $280/month. [2] Utility billback reflects garbage/recycling fees charged to each tenant. [5] Misc. Expense includes legal/professional fees, fire/security monitoring, and mar- 61 [3] Current taxes based on FY 2019-2020 municipal/county millage rates of $1.2439. keting/advertising expenses. Pricing & Financial Analysis Viceroy Apartments | D ebt S ervice Viceroy Apartments | G rowth R ates

Purchase Price / Net Residual Value Income Year 1 2021 2022 2023 2024 2025 2026 2027 2028 2029 Purchase Price/Net Gross Potential Rent 3.0% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% (2,625,000) 3,290,947 Residual Value Loss/Gain to Lease 1.0% 2.00% 2.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Cash Flow Before 158,189 165,825 171,084 179,050 190,191 196,197 202,389 208,773 215,354 3,513,086 Debt Financing Physical Vacancy 5.00% 5.00% 5.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Bad Debt 0.20% 0.20% 0.20% 0.20% 0.20% 0.20% 0.20% 0.20% 0.20% Debt Financing Total Vacancy 5.20% 5.20% 5.20% 3.20% 3.20% 3.20% 3.20% 3.20% 3.20% Loan Amount 1,451,908 0 0 0 0 0 0 0 0 0 0 Closing Costs 0 0 0 0 0 0 0 0 0 (131,638) Expenses Year 1 2021 2022 2023 2024 2025 2026 2027 2028 2029 Debt Service-Interest (76,114) (74,960) (73,745) (72,464) (71,116) (35,030) 0 0 0 0 Operating Expenses 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Debt Service-Principal (21,671) (22,825) (24,041) (25,321) (26,670) (13,863) 0 0 0 0 Real Estate Taxes 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Cash Flow After (1,173,092) 60,403 68,039 73,298 81,265 92,405 147,304 202,389 208,773 215,354 3,381,448 Insurance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Debt Financing Debt Coverage Ratio 1.62 1.70 1.75 1.83 1.94 4.01 Utilities 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Management Fee 8.0% Investor Return IRR-Unleveraged 0.00% 7.08% 7.62% 7.98% 8.24% 8.43% 8.58% 8.44% IRR-Leveraged 5.15% 8.81% 9.97% 21.04% 19.63% 18.61% 17.84% 16.68% Capitalization Rate 6.03% 6.32% 6.52% 6.82% 7.25% 7.47% 7.71% 7.95% 8.20% 8.46%

62 Pricing & Financial Analysis Pricing & Financial Analysis 63 Research Triangle Park • Includes Duke University in Durham, University of North Carolina in Chapel Hill and North Carolina State University in Raleigh.

• Largest science park in the country and one of the largest in the world.

• Houses approximately 200 global companies including IBM, Syngenta Biotechnology, RTI Interna- tional, BASF and Cisco.

• 7,000 Acres with 22.5 million sf of built space.

• 50,000+ high tech employees.

• 80% of employees work for multinational compa- Demographic nies. • Combined annual payroll of $2.9 billion.

• Park Center, a 12 acre mixed use development, in Analysis Research Triangle Park will compliment the suburban office space with completion expected in 2020. POPULATION 1 Mile 3 Miles 5 Miles HOUSEHOLDS BY INCOME 1 Mile 3 Miles 5 Miles 2022 Projection 2016 Estimate Total Population 13,014 67,745 161,439 $200,000 or More 2.41% 5.48% 4.89% 2017 Estimate $150,000 - $199,000 1.48% 4.38% 3.62% Total Population 12,462 65,233 156,032 $100,000 - $149,000 3.25% 9.06% 9.07% 2010 Census $75,000 - $99,999 4.62% 8.67% 8.68% Total Population 10,346 56,277 139,423 $50,000 - $74,999 10.93% 14.14% 14.31% 2000 Census $35,000 - $49,999 15.18% 13.98% 14.03% Viceroy Apartments Total Population 10,031 53,359 133,047 $25,000 - $34,999 16.67% 12.73% 12.74% DEMOGRAPHICS // Daytime Population $15,000 - $24,999 16.25% 13.29% 14.00% 2017 Estimate 36,383 122,949 230,248 Under $15,000 29.21% 18.27% 18.66% 52.6% HOUSEHOLDS 1 Mile 3 Miles 5 Miles Average Household Income $42,379 $70,448 $67,725 2021 Projection Median Household Income $28,184 $41,460 $40,042 Total Households 4,839 28,544 63,351 Per Capita Income $16,790 $30,819 $28,050 267,743 GENDER 2016 Estimate POPULATION PROFILE 1 Mile 3 Miles 5 Miles Total Population 47.4% Total Households 4,593 27,283 62,398 Population By Age Average (Mean) Household Size 2.00 2.14 2.31 2017 Estimate Total Population 12,462 65,233 156,032 2010 Census Under 20 21.35% 23.00% 25.38% Total Households 3,865 23,620 55,969 20 to 34 Years 54.30% 31.93% 27.73% 2000 Census 35 to 39 Years 5.71% 6.95% 6.92% Total Households 3,610 21,994 52,596 40 to 49 Years 6.63% 11.12% 11.96% Growth 2015-2020 5.36% 4.62% 4.73% 50 to 64 Years 8.08% 15.66% 16.75% $56,393 $206,986 HOUSING UNITS 1 Mile 3 Miles 5 Miles Age 65+ 3.93% 11.32% 11.28% Median Household Income Median Housing Value Occupied Units Median Age 24.37 32.16 33.10 2021 Projection 4,839 28,544 65,351 Population 25+ by Education Level 2016 Estimate 4,914 29,212 67,923 2016 Estimate Population Age 25+ 5,970 42,353 101,866 Owner Occupied 527 10,475 25,663 Elementary (0-8) 11.33% 5.31% 6.49% Renter Occupied 4,066 16,808 36,735 Some High School (9-11) 11.14% 7.06% 9.09% 52,596 4.73% Vacant 321 1,929 5,525 High School Graduate (12) 14.66% 15.84% 19.09% Total Households in 5 Mile Radius Growth 2015-2020 Persons In Units Some College (13-15) 16.37% 16.08% 17.04% 2016 Estimate Total Occupied Units 4,593 27,283 62,398 Associate Degree Only 5.47% 4.83% 5.49% 1 Person Units 43.41% 38.14% 34.79% Bachelors Degree Only 20.75% 24.24% 21.23% 2 Person Units 32.03% 34.06% 32.40% Graduate Degree 19.27% 25.45% 19.90% 3 Person Units 12.67% 13.11% 14.67% Population by Gender 4 Person Units 7.27% 8.76% 10.00% 2016 Estimate Total Population 12,462 65,233 156,032 5 Person Units 3.03% 3.57% 4.62% Male Population 52.60% 49.40% 48.42%

66 Demographic Analysis Kyle P. Gross Davis Diethrich Exclusively Listed By: Investment Associate Investment Associate

Altay Uzun Justin Ferguson Shelby Jacobs Vice President, Investments Investment Associate Marketing Coordinator