A 380-Unit Multifamily Offering Brochure Value-Add Investment Opportunity in ,

OFFERS DUE: 5:00 pm CST, Thur. Sep. 12th, 2013 apartments 9

INVESTMENT HIGHLIGHTS • Underperforming apartment community with stabilized occupancy of 98% • Current rents are $0.53 per square foot and market rents are $0.75 per square foot ($163 below market rents) • 10+ years of continuous ownership - potential tax credit rehab • Significant value-add opportunity to upgrade the property and compete with fully renovated comps • Variety of spacious floorplans (one and two-bedrooms) with unit sizes ranging from 626 to 1,002 SF • Exceptional location with frontage on W. Bellfort, located equidistant between the Sam Houston Tollway to the west and Interstate 610 to the east • Less than 7 miles west of Reliant Park, comprised of the 71,500 person capacity Reliant Stadium (home of the NFL football team and the Houston Livestock Show and Rodeo), Reliant Center, Reliant Arena and Reliant Astrodome • Less than 8 miles from the Westchase District (71,000 employees) and Uptown/Galleria District (80,000 employees) • Just minutes from the Memorial Hermann Southwest Hospital campus (3,000+ employees), Houston Baptist University, Meyerland Plaza Shopping Center and the recently renovated PlazAmericas (formerly Sharpstown Mall) • Available All Cash PROPERTY DETAILS PROPERTY San Marcos Apartments PRICE To Be Determined TERMS All Cash ADDRESS 6301 W. Bellfort Ave. Houston, Texas 77035 UNITS 380 YEAR BUILT 1976

OCCUPANCY (Jul 2013) 98% NET RENTABLE SF 289,072 AVG. UNIT SIZE 761 AVG. RENT/UNIT $570 (market) / $407 (current) AVG. RENT/SF $0.75 (market) / $0.53 (current) STORIES 2 LOT SIZE 9.86 acres DENSITY 38.5 units / acre

COMMUNITY AMENITIES • Four clothes care centers • Landscaped courtyards • Perimeter fence and access gate • Proximity to major employment, shopping and entertainment centers

INTERIOR FEATURES • Well equipped kitchens (FF refrigerator, stove and disposal) • Faux wood floors * • Baseboards • Mini-blinds • Vertical blinds • Walk-in closets • Two-tone paint • Vanities

* in select units SITE INFORMATION

ADDRESS: UTILITIES: 6301 W. Bellfort Ave. Electrical Individually metered Houston, Texas 77035 HVAC Individual climate- controlled units PROPERTY: Water Master metered Units 380 Total Rentable SF 289,072 5 Central boilers Year Built 1976 # of Buildings 30 Gas Gas heated water Avg. Unit SF 761 Stories 1, 2 and 3 RUBS None Avg. Rent / Unit $570 (market) Lot Size (acres) 9.86 $407 (current) W/D connections None Avg. Rent / SF $0.75 (market) Density (units / acre) 38.5 PROPERTY STAFF: $0.53 (current) Property Manager 1 CONSTRUCTION: Bookkeeper 1 Style Garden-style Leasing 1 Foundation Pier & Beam Maintenance 2 Framing Wood AC Tech / Electrician 1 / 1 Exterior Brick and Hardiplank (repl. Jun 2013) Make Ready / Porter 2 / 2 Roof Pitched with composite shingles and flat Housekeeper 1 Paving Concrete TOTAL 12 Wiring Copper DEPOSITS/OTHER FEES: HVAC Individual ground & roof-mounted units Application Fee (non-refundable) None Plumbing PVC, Copper, Galvanized 1 Bedroom Deposit None SCHOOLS: 2 Bedroom Deposit None School District Houston I.S.D. Elementary Anderson Middle Fondren Pet Deposit $100 High Westbury (Portion refundable) $0 PARKING: Restrictions No aggressive breeds Spaces 440 uncovered spaces Pet weight limit Under 35 lbs. Ratio 1.16 spaces per unit FLOORPLANS

Floorplan A 1 Bedroom/1 Bath 626 SF

Floorplan B 1 Bedroom/1 Bath 682 SF

Floorplan D 1 Bedroom/1 Bath + Den 682 SF

Floorplan F 2 Bedroom/2 Bath 1,002 SF

Floorplan E 2 Bedroom/1 Bath 825 SF SITE PLAN

N E NU AVE RT LFO BEL PHASE I W.

apartments

PHASE II

OFFICE

LAUNDRY BOB WHITE DR. SANDPIPER DR.

LAUNDRY LAUNDRY LAUNDRY LAUNDRY PROFORMA UNIT MIX ANNUAL MONTHLY Current Current Market Market Unit # of % of Avg Rent / Rent / Rent / Rent / Gross Potential Rent $2,597,688 $216,474 Description Units Total Unit SF Unit SF Unit SF Loss/Gain to Lease 2.00% (51,954) (7,144) 1Bd/1Ba 67 17.6% 626 $370 $0.59 $493 $0.79 Adjusted Gross Potential Rent 2,545,734 212,145 1Bd/1Ba 111 29.2% 682 $363 $0.53 $539 $0.79 1Bd/1Ba+Den 26 6.8% 682 $388 $0.57 $539 $0.79 6.00% Vacancy Loss (152,744) (12,729) 2Bd/1Ba 128 33.7% 825 $446 $0.54 $590 $0.72 4.00% Concessions (101,829) (8,486) 2Bd/2Ba 48 12.6% 1,002 $470 $0.47 $710 $0.71 Employee Units 0.25% (6,364) (530) Totals/Avg 380 100% 761 $407 $0.53 $570 $0.75 Models 0.25% (6,364) (530) Bad Debt 2.50% (63,643) (5,304)

Total Rental Income 2,214,789 184,566 Other Income 114,000 9,500 RECENT COLLECTIONS Utility Reimbursements 209,000 17,417 (2013) APR. MAY JUN. Total Other Income 323,000 26,917 Effective Gross Income 2,537,789 211,482 TOTAL INCOME (EGI) $148,736 $142,983 $147,739 Operating Expenses Payroll & Benefits 323,000 26,917 General & Administrative 51,300 4,275 Repairs & Maintenance 180,500 15,042 Contract Services 108,300 9,025 Advertising & Promotion 47,500 3,958 Controllable Expenses 710,600 59,217

Utilities 418,000 34,833 Insurance 190,000 15,833 Management Fee 76,134 6,344 Gross Receipts Tax 14,592 1,216 Property Taxes 153,964 12,830

Operating Expenses Before Reserves (1,563,290) (130,274) Replacement Reserves 114,000 9,500 Total Operating Expense (1,677,290) (139,774)

NET OPERATING INCOME $860,499 $71,708

PROFORMA NOTES 1. Gross Potential Rent is per the current rent schedule 2. Other Income is estimated at annual amounts of $300 per unit 3. Utility Reimbursements are estimated at 50% recovery 4. Management Fee is based on 3.00% of Effective Gross Income 5. Property Taxes based on 150% of 2013 tax value at the 2012 tax rate 6. Replacement reserves are estimated to be $300 per unit and do not reflect actual capital expenditures

TAX INFORMATION Appraisal District Harris County 2012 Tax Rate 2.62922%

Account # 1064-66000-0001 Land $2,147,790 Improvements $1,756,125 Total 2013 Tax Value $3,903,915

Disclaimer: The proforma is delivered only as an accomodation and neither Seller, Transwestern nor any of their respective affiliates, agents, representatives, employees, parents, subsidiaries, members, managers, partners, shareholders, directors, or officers, makes any representation or warranty regarding such proforma. Purchaser must make its own investigation of the Property and any existing or available financing, and must independently confirm the accuracy of the projections contained in the proforma. RENT COMPARABLES

N . BRAE N SW O O D BL VD. S . B RA E S. S RICE W D. AVE. OOD BLV

Current Current Market Market Unit Total Avg Rent / Rent / Rent / Rent / Property Type Units SqFt Unit SqFt Unit SqFt FONDREN RD.

WILLOWBEND BLVD. CHIMNEY ROCK RD.

6301 W. Bellfort Ave 1 BR 204 664 $368 $0.56 $524 $0.79 2

Houston, TX 77035 2 BR 176 873 $453 $0.52 $623 $0.71 6

Built: 1976 HILLCROFT AVE. 4 Occupancy: 98% W. BELLFORT AVE. 3 5 Totals/Avg 380 761 $407 $0.53 $570 $0.75

1

Market Market Market Market Unit Total Avg Rent / Rent / Unit Total Avg Rent / Rent / Property Type Units SqFt Unit SqFt Property Type Units SqFt Unit SqFt

1 Arbor Village Townhomes 4 Bennington Square

6298 Ludington #3 6300 W. Bellfort EFF 2 425 $350 $0.82

Houston, TX 77035 2 BR 101 1,094 $760 $0.70 Houston, TX 77035 1 BR 175 733 $492 $0.67

Built: 1981 Built: 1975 2 BR 128 1,030 $673 $0.65

Occupancy: 96% Occupancy: 95% 3 BR 8 1,203 $790 $0.66

Totals/Avg 101 1,094 $760 $0.70 Totals/Avg 313 864 $573 $0.66

2 Bankside Village 5 Brays Oaks Park

6425 Bankside 1 BR 188 649 $513 $0.79 6400 W. Bellfort EFF 4 436 $495 $1.14

Houston, TX 77096 2 BR 80 907 $677 $0.75 Houston, TX 77035 1 BR 16 711 $600 $0.84

Built: 1978 3 BR 16 1,236 $850 $0.69 Built: 1978 2 BR 60 880 $654 $0.74

Occupancy: 95% Occupancy: 95%

Totals/Avg 284 755 $578 $0.77 Totals/Avg 80 824 $635 $0.77

3 Bellfort Village * 6 The Willows

6405 W. Bellfort 1 BR 16 603 $555 $0.92 10919 Fondren

Houston, TX 77035 2 BR 120 849 $650 $0.77 Houston, TX 77096 1 BR 154 703 $598 $0.85

Built: 1977 3 BR 1,157 829 $829 $0.72 Built: 1979 2 BR 180 983 $698 $0.71

Occupancy: 85% Occupancy: 95% 3 BR 12 1,351 $951 $0.70

Totals/Avg 194 921 $696 $0.76 Totals/Avg 346 871 $662 $0.76 * Under renovation DEMOGRAPHICS (Population) SUBMARKET Radius 1 Mile 3 Mile 5 Mile Braeswood/ Fondren SW 2017 Projection 33,874 166,838 488,674 Occupancy +3.4% (annualized) in last 3 months 2012 Estimate 31,431 156,189 453,408 Rental Rates +5.6% (annualized) in last 3 months 2010 Census 30,597 152,989 441,285 Absorption +659 units in last 12 months (3.0% of submarket) Growth 2012 - 2017 7.80% 6.80% 7.80% Occupancy Class B: 95.7%, Class C: 93.0%, Class D: 75.1% Growth 2010 - 2012 2.70% 2.10% 2.70% Averages Size: 839 SF Eff. Rent: $601 Eff. Rate: $0.72 N N FONDREN RD.

HOUSTON W. BELLFORT AVE. CBD

Pasadena

Sugar Land

Pearland

League City

TEXAS N MEDICAL BAYLAND CENTER PARK BELLAIRE SENIOR HIGH SCHOOL

BISSONNET ST. MEYERLAND PLAZA SHOPPING CENTER RELIANT HEROD MEYERLAND STADIUM ELEM. PARK SCHOOL BRAYS N. BRAESWOOD BLVD. BA YO HILLCROFT AVE. U S. BRAESWOOD BLVD. CHIMNEY ROCK RD. GODWIN PARK JOHNSTON

MIDDLE . D WILLOW WILLOWBEND BLVD. SCHOOL R PARK K

FONDREN RD. WESTBURY A

PARK O

T

S O P

W. BELLFORT AVE. . S

W. BELLFORT AVE.

FOR MORE INFORMATION, PLEASE CONTACT: Ed Cummins Clint Duncan Lupe Olivares Senior Vice President Vice President Assistant Vice President 1900 West Loop South, Suite 1300 Houston, Texas 77027 713.272.1288 713.270.3316 713.272.1290 T 713.270.7700 F 713.271.8172 [email protected] [email protected] [email protected] www.transwestern.net

The information provided herein was obtained from sources believed reliable; however, Transwestern makes no guarantees, warranties or representations as to the completeness or accuracy thereof. The presentation of this property is submitted subject to errors, omissions, change of price or conditions, prior sale or lease, or withdrawal without notice. Copyright © 2013 Transwestern. 10-1035.0610. This offering is submitted and received with the understanding that all offers for the acquisition of the herein described property will be conducted through Transwestern. The Seller and Transwestern expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the Property and/or terminate discussions with any entity at any time with or without notice.