FREMF 2019-K736 Mortgage Trust and Freddie Mac Structured Pass- Through Certificates, Series K-736 Table of Contents

Home , North Harbor Tower, One Bennett Park, Optima Signature

SEPTEMBER 2019

STRUCTURED FINANCE: CMBS PRESALE REPORT FREMF 2019-K736 Mortgage Trust and Freddie Mac Structured Pass- Through Certificates, Series K-736 Table of Contents

Capital Structure 3 Transaction Summary 4 Rating Considerations 5 DBRS Credit Characteristics 7 Largest Loan Summary 8 DBRS Sample 9 Transaction Concentrations 11 Loan Structural Features 12 Aqua At Lakeshore East 14 Slate Creek 19 Turnbury At Palm Beach Gardens 24 City Walk At Woodbury 29 Hudson Woodstock 34 Windsor Lakes 39 Suite 2801 Apartments 44 Arbour Square 48 Lake Vista 53 Providence Trail Apartment Homes 58 Fairways On Green Valley Homes 63 Vintage Pointe 67 Stonegate Apartment Homes 71 Mercury NoDa Apartments 76 Davis at the Square 81 Transaction Structural Features 85 Methodologies 85 Surveillance 85

Scott Kruse Brandon Olson Assistant Vice President Senior Vice President +1 312 332 9448 +1 312 332 0889 [email protected] [email protected]

Kevin Mammoser Erin Stafford Managing Director Managing Director +1 312 332 0136 +1 312 332 3291 [email protected] [email protected] PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Capital Structure

Description Rating Action Balance Subordination DBRS Rating Trend

Class A-1 New Rating - Provisional $110,482,000 18.625% AAA (sf) Stable

Class A-2 New Rating - Provisional $1,093,460,000 18.625% AAA (sf) Stable

Class X1 New Rating - Provisional $1,203,942,000 -- AAA (sf) Stable

Class XAM New Rating - Provisional $68,427,000 -- AA (sf) Stable

Class A-M New Rating - Provisional $68,427,000 14.000% AA (low) (sf) Stable

Class X3 NR $207,130,486 -- NR n/a

Notes: 1. NR = not rated. 2. The Class X-1, XAM, and X3 Certificates will not be entitled to distributions of principal.

Description Rating Action Balance Subordination DBRS Rating Trend

Class A-1 New Rating - Provisional $110,482,000 18.625% AAA (sf) Stable

Class A-2 New Rating - Provisional $1,093,460,000 18.625% AAA (sf) Stable

Class X1 New Rating - Provisional $1,203,942,000 -- AAA (sf) Stable

Class XAM New Rating - Provisional $68,427,000 -- AA (sf) Stable

Class A-M New Rating - Provisional $68,427,000 14.000% AA (low) (sf) Stable

Class B New Rating - Provisional $59,180,000 10.000% A (low) (sf) Stable

Class C New Rating - Provisional $36,988,000 7.500% BBB (sf) Stable

Class X3 NR $207,130,486 -- NR n/a

Class D NR $110,962,486 -- NR n/a

Notes: 1. NR = not rated. 2. Classes B, C and D will be privately placed. 3. The X1, XAM, and X3 balances are notional. The Class X1 will be equal to the aggregate of Certificate Balance of the Class A-1 and A-2. The Class XAM will be equal to the aggregate of Certificate Balance of the Class A-M. The Class X3 will be equal to the aggregate of Certificate Balance of the Class B, C, and D. 4. The Class R Certificates are not represented in this table and are not being offered. The Class R Certificates will not have a principal balance, notional amount or class coupon.

Structured Finance: CMBS 3 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Transaction Summary

POOL CHARACTERISTICS

Trust Amount $1,479,499,487 Wtd. Avg. Interest Rate 3.878%

Number of Loans 43 Wtd. Avg. Remaining Term 78

Number of Properties 43 Wtd. Avg. Remaining Amortization 243

Average Loan Size $34,406,965 Total DBRS Expected Amortization3 -5.1%

Wtd. Avg. DBRS Term DSCR1 1.37x Wtd. Avg. DBRS Term DSCR Whole Loan 1.37x

Wtd. Avg. Issuance LTV1 69.1% Wtd. Avg. Balloon LTV1 65.5%

Top Ten Loan Concentration 50.1% Wtd Avg. DBRS NCF Variance -7.9%

1. Includes pari passu debt, but excludes subordinate debt. 2. Excludes shadow-rated loans and co-ops. 3. For certain ARD loans, expected amortization may include amortization expected to occur after the ARD but prior to single/major tenant expiry.

PARTICIPANTS

Depositor GS Mortgage Securities Corporation II

Mortgage Loan Sellers Federal Home Loan Mortgage Corporation

Master Servicer Midland Loan Services, a Division of PNC Bank, National Association

Special Servicer Wells Fargo Bank, National Association

Certficate Administrator Wells Fargo Bank, National Association

Trustee Wilmington Trust, National Assocaition

Custodian Wells Fargo Bank, National Association

Multifamily Delinquency Rate Comparison

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00% 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4

CMBS Multifamily Delinquency Rate Freddie Mac Delinquency Rate

Structured Finance: CMBS 4 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Rating Considerations

The collateral consists of 43 fixed-rate loans secured by 42 multifamily properties and one MHC property. All loans within the transaction are structured with seven-year loan terms with the exception of one loan, which is structured with a five- year loan term. The transaction is a sequential-pay pass-through structure. The conduit pool was analyzed to determine the provisional ratings, reflecting the long-term probability of loan default within the term and its liquidity at maturity. When the cut-off loan balances were measured against the DBRS Stabilized NCF and their respective actual constants, six loans representing 14.2% of the trust balance had a DBRS Term DSCR below 1.15x, a threshold indicative of a higher likelihood of mid-term default.

Classes A-1, A-2, A-M, X1, XAM and X3 of the FREMF 2019-K736 Mortgage Trust, Series 2019-K736 (FREMF 2019-K736) transaction have been conveyed into a trust by Freddie Mac to issue corresponding classes of Structured Pass-Through Certificates (SPCs) guaranteed by Freddie Mac (see the Transaction Structural Features section for more information). All DBRS-rated classes will be subject to ongoing surveillance, confirmations, upgrades or downgrades by DBRS after the date of issuance. The initial ratings of the FREMF 2019-K736 Certificates and the Freddie Mac Structured Pass-Through Certificates, Series K-736 (Freddie Mac SPCs K-736) are assigned without giving effect to the Freddie Mac guarantee. Please see the FREMF 2019-K736 Structural and Collateral Term Sheet for more information about the structure of the Freddie Mac SPCs K-736.

STRENGTHS • The loans benefit from strong origination practices. –– Loans on Freddie Mac’s balance sheet, which are originated according to the same policies as those for securitization, have an extremely low delinquency rate of 0.001% as of June 2019. This compares favorably with the delinquency rate for CMBS multifamily loans of approximately 0.32% as of June 2019. –– As of June 30, 2019, Freddie Mac has securitized 16,188 loans totaling approximately $317.4 billion in guaranteed issuance balance. To date, Freddie Mac has not realized any credit losses on its guaranteed issuances, although a combined $15.33 million in total losses has been realized by B-piece investors, representing less than one basis point of total issuance. • The deal has favorable credit metrics, as evidenced by an issuance WA LTV and balloon WA LTV of 69.1% and 65.5%, respectively. Only four loans, comprising 8.6% of the trust balance, have issuance LTVs of 75.0% or higher. In addition, the WA DBRS Term DSCR is reasonable at 1.37x. • The loans in the transaction benefit from experienced and financially strong borrowers compared with typical CMBS multifamily loans. Many of the borrowers are repeat clients of Freddie Mac. • Three loans, representing 15.9% of the pool, exhibit Above Average property quality and two loans, representing 7.4% of the pool, exhibit Average (+) property quality. Five of these loans are in the top 15.

CHALLENGES AND CONSIDERATIONS • The transaction has two notable sponsorship concentrations that, when combined, total 11 loans and represent 33.1% of the pool. The largest concentration (Group 1) consists of eight loans representing 23.7% of the pool, and the second-largest concentration (Group 2) consists of three loans representing 9.4% of the pool. –– Both sponsors are repeat Freddie Mac borrowers that have performed as agreed and have significant experience in the multifamily sector. The Group 1 sponsor is an affiliate of an investment-grade-rated entity and has reported over $472.0 billion in assets under management with ownership interests in 25 multifamily properties and portfolios across the United States. The sponsor is a repeat Freddie Mac borrower and has closed 94 loans for more than $3.7 billion. The Group 2 sponsor has ownership interests and management positions in approximately 25,000 residential units collectively valued at more than $2.5 billion and holds over 20 years of real estate experience. The sponsor is a repeat borrower and has completed more than 80 transactions with Freddie Mac representing over $2.3 billion in unpaid principal balance since 2010. DBRS

Structured Finance: CMBS 5 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019 added a small pool-wide model penalty to account for the Group 1 concentration; the penalty would have been higher had the sponsor itself not been so strong. No penalty was applied for the Group 2 concentration as it was not overly large. • Fifteen loans, representing 32.4% of the pool and including four of the top 15 loans in the pool, are structured with full- term IO payments. An additional 26 loans, comprising 66.0% of the pool, have remaining partial IO periods ranging from 24 months to 60 months. –– The POD is calculated using a DSCR that includes amortizing debt service. The balloon LTV is also incorporated into the POD. Furthermore, partial IO loans are penalized in the model. • The pool is concentrated by property type as multifamily properties represent 99.6% of the collateral. One loan (0.3% of the pool) is secured by a non-traditional property type (i.e., MHC). –– Compared with other property types, multifamily properties benefit from staggered lease rollover and generally low expense ratios. While revenue is quick to decline in a downturn because of the short-term nature of the leases, it is also quick to respond when the market improves. The analysis performed on the 27 sampled loans indicates that most markets are displaying strong occupancy and rent-growth figures with positive year-over-year trends established. • Five loans, representing 9.7% of the pool, are secured by properties located in DBRS Market Rank 1 or 2, which are considered more rural or tertiary in nature. Only one loan, representing 9.8% of the pool, is secured by a property located in DBRS Market Rank 7. DBRS Market Ranks 7 and 8 are generally denser urban in nature and benefit from greater liquidity, even during times of economic stress. –– Properties in DBRS Market Rank 1 were analyzed with higher loss severities than those located in urban markets.

Structured Finance: CMBS 6 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

DBRS Credit Characteristics

DBRS TERM DSCR

% of the Pool % of the Pool (Trust DSCR (Trust Balance1) Issuance LTV Balance1)

0.00x-0.90x 0.0% 0.0%-50.0% 0.0%

0.90x-1.00x 0.0% 50.1%-55.0% 0.0%

1.00x-1.15x 14.2% 55.1%-60.0% 1.8%

1.15x-1.30x 53.2% 60.1%-65.0% 11.8%

1.30x-1.45x 6.9% 65.1%-70.0% 42.2%

1.45x-1.60x 0.0% 70.1%-75.0% 25.5%

1.60x-1.75x 5.1% >75.1% 8.6%

>1.75x 20.6% Wtd. Avg. 69.1%

Wtd. Avg. 1.37x

% of the Pool Balloon LTV (Trust Balance1)

0.0%-50.0% 0.0%

50.1%-55.0% 0.1%

55.1%-60.0% 8.5%

60.1%-65.0% 27.2%

65.1%-70.0% 55.0%

70.1%-75.0% 4.2%

>75.0% 0.0%

Wtd. Avg. 65.5%

1. Includes pari passu debt, but excludes subordinate debt.

Structured Finance: CMBS 7 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Largest Loan Summary

LOAN DETAIL

% of DBRS DBRS Term Appraised Loan Name Trust Balance Pool Shadow Rating DSCR (x) LTV

Aqua At Lakeshore East $144,940,000 9.8% n/a 1.17 72.5%

Slate Creek $99,990,000 6.8% n/a 1.42 67.2%

Turnbury At Palm Beach Gardens $79,533,000 5.4% n/a 1.13 75.4%

City Walk At Woodbury $72,710,000 4.9% n/a 1.19 66.6%

Hudson Woodstock $68,950,000 4.7% n/a 1.18 70.0%

Windsor Lakes $64,524,000 4.4% n/a 1.21 72.6%

Suite 2801 Apartments $54,718,000 3.7% n/a 1.78 66.9%

Arbour Square $54,625,000 3.7% n/a 1.24 66.9%

Lake Vista $52,723,000 3.6% n/a 1.27 69.0%

Providence Trail Apartment Homes $47,950,000 3.2% n/a 1.24 68.4%

Fairways On Green Valley $43,800,000 3.0% n/a 1.26 70.0%

Vintage Pointe $37,700,000 2.5% n/a 1.78 65.0%

Stonegate Apartment Homes $36,738,000 2.5% n/a 1.21 73.8%

Mercury NoDa Apartments $36,421,000 2.5% n/a 1.07 60.7%

Davis At The Square $36,270,000 2.5% n/a 1.99 65.0%

PROPERTY DETAIL

DBRS Loan per Maturity Balance Loan Name Property Type City State Year Built SF/Units SF/Units per SF/Units

Aqua At Lakeshore East Multifamily Chicago IL 2009 474 $305,781 $283,447

Slate Creek Multifamily Roseville CA 1989 612 $163,382 $163,382

Turnbury At Palm Beach Gardens Multifamily Palm Beach Gardens FL 1970 540 $147,283 $136,712

City Walk At Woodbury Multifamily Woodbury MN 2004 453 $160,508 $148,542

Hudson Woodstock Multifamily Woodstock GA 2000 498 $138,454 $127,971

Windsor Lakes Multifamily Woodridge IL 1972 762 $84,677 $77,237

Suite 2801 Apartments Multifamily Euless TX 2013 417 $131,218 $131,218

Arbour Square Multifamily Westminster CO 2011 300 $182,083 $175,089

Lake Vista Multifamily Loveland CO 2010 303 $174,003 $167,319

Providence Trail Apartment Homes Multifamily Mount Juliet TN 2007 334 $143,563 $129,245

Fairways On Green Valley Multifamily Henderson NV 1990 320 $136,875 $129,041

Vintage Pointe Multifamily Las Vegas NV 1993 368 $102,446 $102,446

Stonegate Apartment Homes Multifamily Las Vegas NV 1990 440 $83,495 $77,281

Mercury NoDa Apartments Multifamily Charlotte NC 2016 241 $151,124 $140,482

Davis At The Square Multifamily McKinney TX 2018 330 $109,909 $109,909

Note: Loan metrics are based on whole-loan balances.

Structured Finance: CMBS 8 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

DBRS Sample

DBRS SAMPLE RESULTS

Prospectus DBRS DBRS Major DBRS Property ID Loan Name % of Pool DBRS NCF NCF Variance Variance Drivers Quality Operating Expenses, 1 Aqua At Lakeshore East 9.8% $9,657,729 -6.4% Above Average Management Fee, TI/LCs Operating Expenses, 2 Slate Creek 6.8% $5,896,833 -15.4% Average Vacancy, Management Fee Vacancy, Bad Debt, Operating 3 Turnbury At Palm Beach Gardens 5.4% $5,157,822 -10.0% Average Expenses 4 City Walk At Woodbury 4.9% $4,851,973 -4.9% Operating Expenses, Vacancy Average + Vacancy, Operating Expenses, 5 Hudson Woodstock 4.7% $4,506,752 -7.1% Average Real Estate Taxes Real Estate Taxes, Insurance, 6 Windsor Lakes 4.4% $4,638,771 -3.2% Average - Operating Expenses 7 Suite 2801 Apartments 3.7% $3,784,124 -8.8% Operating Expenses, GPR Above Average

8 Arbour Square 3.7% $3,627,193 -6.3% Operating Expenses, Vacancy Average

9 Lake Vista 3.6% $3,595,936 -3.1% Operating Expenses Average

10 Providence Trail Apartment Homes 3.2% $3,212,007 -4.9% Real Estate Taxes Average

11 Fairways On Green Valley 3.0% $3,008,611 -2.1% Management Fee Average Vacancy, Management Fee, 12 Vintage Pointe 2.5% $2,485,193 -9.1% Average Operating Expenses 13 Stonegate Apartment Homes 2.5% $2,494,766 -6.6% Vacancy, Operating Expenses Average - Operating Expenses, 14 Mercury NoDa Apartments 2.5% $2,285,806 -15.4% Average + Management Fee 15 Davis At The Square 2.5% $2,577,027 -9.0% Operating Expenses, TI/LCs Above Average

16 The Greens At Van De Water 2.4% $2,549,709 -5.9% Vacancy, Operating Expenses Average 17 Advenir At Bear Valley 2.1% $2,253,122 -3.4% Operating Expenses, Replace- Average ment Reserves, Vacancy 18 Crossings At McDonough 2.0% $1,847,223 -10.4% Vacancy, Management Fee, Average Operating Expenses 20 Viridian Palms Apartment Homes 2.0% $1,871,692 -9.5% Vacancy, Operating Expenses, Average Management Fee 23 Corners 1.9% $1,839,913 -7.5% Vacancy, Operating Expenses, Average Management Fee 24 Century Sweetwater Creek 1.8% $1,717,910 -12.2% Vacancy, Real Estate Taxes, Average Operating Expenses 27 Chelsea On Southern 1.6% $1,416,023 -18.3% Operating Expenses, Average Management Fee 30 The Carson At Florida Station 1.4% $1,364,075 -9.2% Operating Expenses Average - Vacancy, 31 North Village II 1.4% $1,416,610 -4.2% Below Average Replacement Reserves Vacancy, 33 North Village I 1.0% $970,000 -5.3% Below Average Replacement Reserves Real Estate Taxes, 36 Silver Pines Apartments 0.9% $884,331 -8.9% Average Operating Expenses Replacement Reserves, 39 Gilbert Manor Apartments 0.6% $651,801 -5.6% Average Operating Expenses

Structured Finance: CMBS 9 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

DBRS SITE INSPECTIONS DBRS Sampled Property Quality The DBRS sample included 27 of the 43 loans in the pool. Site inspections were performed on 27 of the 43 properties # of % of Loans Sample in the portfolio, representing 82.0% of the pool by allocated  Excellent 0 0.0% loan balance. DBRS conducted meetings with the on-site  Above Average 3 19.4% property manager, leasing agent or representative of the  Average + 2 9.0% borrowing entity for 69.9% of the pool. The resulting  Average 17 58.6% DBRS property quality scores are highlighted in the  Average - 3 10.1% following charts:  Below Average 2 2.9%  Poor 0 0.0% DBRS CASH FLOW ANALYSIS A cash flow analysis review and a cash flow stability and structural review were completed on 27 of the 43 loans, representing 82.0% of the pool by loan balance. For the loans not subject to a cash flow review, DBRS applied the average NCF variance of the DBRS sample pool.

DBRS generally adjusted revenue to be no higher than the most recent T-12 level. In some instances, DBRS applied an additional vacancy or concession adjustment to account for new supply coming on line in the market, lack of operating history or lack of stabilization. Generally, most expenses were recognized based on the higher of the T-12 historical figures, plus an inflation factor or the borrower’s budgeted figures. Real estate taxes and insurance premiums were inflated if a current bill was not provided. Capex was deducted based on the greater of the engineer’s inflated estimates or the DBRS minimum of $250 per unit for multifamily properties. If a significant upfront capex reserve was established at closing, DBRS reduced its recognized costs. No upside potential, such as anticipated rental increases or prospective tenant rent, was recognized. The DBRS sample had an average NCF variance of -7.9% and ranged from -2.1% (Fairways On Green Valley) to -18.3% (Chelsea On Southern).

Sampled Property Type

120.0% 120.0%

100.0% 100.0%

80.0% 80.0%

60.0% 60.0%

40.0% 40.0%

20.0% 20.0%

0.0% 0.0% Multifamily MHC Excellent Above Average Average + Average Average - Below Average Poor Pool

Structured Finance: CMBS 10 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Transaction Concentrations

DBRS Property Type Geography

# of % of # of % of Property Type Loans Pool State Properties Pool  Multifamily 42 99.7%  IL 3 15.6%  MHC 1 0.3%  CO 5 13.2%  TX 5 11.3%  NV 5 10.9%  GA 4 10.3%  CA 1 6.8%  All Others 20 31.9%

Loan Size DBRS Market Types

# of % of % of Loan Size Loans Pool Market Type # of Loans Pool  Very Large 32 92.8%  8 0 0.0% (>$20.0 million)  7 1 9.8%  Large 6 5.4%  6 0 0.0% ($10.0-$20.0 million)  5 5 6.4%  Medium 2 1.0% ($5.0-$10.0 million)  4 13 34.0%  Small 2 0.6%  3 19 40.1% ($2.0-$5.0 million)  2 4 9.3%  Very Small 1 0.1%  1 1 0.3% (<$2.0 million)

Largest Property Location

Property Name City State  Aqua At Lakeshore East Chicago IL  Slate Creek Roseville CA  Turnbury At Palm Beach Gardens Palm Beach Gardens FL  City Walk At Woodbury Woodbury MN  Hudson Woodstock Woodstock GA  Windsor Lakes Woodridge IL  Suite 2801 Apartments Euless TX  Arbour Square Westminster CO  Lake Vista Loveland CO  Providence Trail Apartment Homes Mount Juliet TN  Fairways On Green Valley Henderson NV  Vintage Pointe Las Vegas NV  Stonegate Apartment Homes Las Vegas NV  Mercury NoDa Apartments Charlotte NC  Davis At The Square McKinney TX

Structured Finance: CMBS 11 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Loan Structural Features

Pari Passu Notes: No loans in the trust have pari passu debt.

Additional Debt: All loans are permitted to obtain additional secured debt, provided exclusively at Freddie Mac’s option, beginning one year after origination. Conditions for providing additional debt generally include a combined LTV equal to the lower of 80.0% or the original LTV and a combined amortizing DSCR of at least 1.25x. In each instance, the additional debt would be subordinate in right of payment to the trust balance and would be subject to a standard intercreditor agreement reviewed by DBRS.

Subordinate Debt: Two loans (Brookhaven Apartments and Silver Pines Apartments), representing approximately 2.4% of the pool, have subordinate debt in place. Brookhaven Apartments, representing 1.5% of the pool, has two subordinate loans with a combined amount of $7.8 million from a former general partner that are cash flow loans with no required minimum payments. Silver Pines Apartments, representing 0.9% of the pool, has subordinate debt in the amount of $407,978 from the local housing authority.

Leasehold: No loans in the trust are secured by the borrower’s leasehold interest.

Interest Only DBRS Expected Amoritization

# of % of # of % of Loans Pool Loans Pool  Full IO 15 32.4%  0.0% 15 32.4%  Partial IO 26 66.0%  0.0%-5.0% 3 8.1%  Amortizing 2 1.6%  5.0%-10.0% 23 57.9%  10.0%-15.0% 2 1.6%  15.0%-20.0% 0 0.0%  20.0%-25.0% 0 0.0%  >25.0% 0 0.0% Note: For certain ARD loans, expected amortization may include amortization expected to occur after the ARD but prior to single/major tenant expiry.

RESERVE REQUIREMENT BORROWER STRUCTURE

Type Loans % of Pool Type Loans % of Pool

Tax Ongoing 34 75.4% SPE with Independent Director and 0 0.0% Non-Consolidation Opinion

Insurance Ongoing 23 43.9% SPE with Independent Director Only 0 0.0%

CapEx Ongoing 29 67.5% SPE with Non-Consolidation Opinion Only 23 78.4%

Leasing Costs Ongoing1 0 0.0% SPE Only 20 21.6%

1. Percent of office, retail, industrial and mixed use assets based on DBRS property types.

Structured Finance: CMBS 12 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Sponsor Strength: DBRS considers the sponsorship for DBRS Sponsor Strength 41 loans, totaling 97.2% of the pool, to be Strong because of # of % of extensive experience in the commercial real estate sector Loans Pool and significant financial wherewithal. DBRS identified  Strong 41 97.2% two loans with average sponsors because the loans do not  Average 2 2.8% have a guarantor.  Weak 0 0.0%  Bad/Litigious 0 0.0% Property Release: No loans in the trust contain property release provisions.

Property Substitution: No loans in the trust contain substitution conditions.

Terrorism Insurance: Terrorism insurance is required and in place for all loans.

Structured Finance: CMBS 13 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Aqua At Lakeshore East Chicago, IL

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $144.9 Loan psf/Unit $305,781 Percentage of the Pool 9.8% Loan Maturity/ARD April 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built/Renovated 2009 Issuance DSCR City, State Chicago, IL Physical Occupancy 96.6% 1.17x Units/SF 474 Physical Occupancy Date June 2019 Issuance LTV 72.5% Balloon LTV The loan is secured by the borrower’s fee simple interest in a 474-unit high-rise multi- 67.2% family property in Chicago. Loan proceeds of $144.9 million, along with $50.4 million DBRS Property Type of borrower equity, will be used to buy out a former equity partner for $195.4 mil- Multifamily lion. The loan is structured with an upfront escrow of $953,692 for taxes, along with DBRS Property Quality $317,897 of ongoing monthly deposits. In addition, the transaction has $8,848 of ongo- Above Average ing monthly deposits for replacement reserves. The collateral has an appraised value of $200 million, establishing a 72.5% LTV. The seven-year fixed-rate loan is IO for the Debt Stack ($ million) initial three years and amortizes over a 30-year schedule thereafter. Trust Balance $144.9 Pari Passu Constructed in 2009, the property is a vertical subdivision that features five lower $0.0 floors of parking, three floors of retail and office space on Floors 1 to 3, the Radisson Blu B-Note Aqua Hotel on Floors 4 to 18, apartment units on Floors 19 to 52 and condominiums on $0.0 Floors 53 to 81. The collateral consists of the apartments on Floors 19 to 52, was 96.6% Mezz occupied as of the June 2019 rent roll with an average rent of $2,522/month. The unit $0.0 breakdown consists of 139 studio units (average 574 sf ), 266 one-bedroom units (aver- Total Debt age 761 sf ) and 69 two-bedroom units (average 1,119 sf ). Property amenities include $144.9 three pools; an 80,000-sf sundeck; a fitness center with a basketball court and sauna; Loan Purpose a spa; a media room; a business center; a games room and lounge; bicycle storage; Acquisition and a complimentary shuttle. The subject’s 970 garage parking spaces, along with all Equity Contribution/ other amenity spaces, are shared by apartment renters, hotel guests and condominium (Distribution) ($ million) owners. The apartment parcel owns all the amenities, but the Radisson Blu Aqua Hotel $50.4 is responsible for managing and maintaining these spaces. In addition to the apartment units, the collateral also features a ground-floor CVS Pharmacy, a dry-cleaners, and 41,889 sf of Magellan Development Group office space on the second floor. Recent improvements totaling $1.3 million include new parking-garage electric- charging stations, upgrades to apartment finishes and appliances, indoor lap-pool

Structured Finance: CMBS 14 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

AQUA AT LAKESHORE EAST – CHICAGO, IL renovations and elevator-cab interior upgrades. There are plans for an additional $400,056 in capital improvements to be completed in 2019 consisting of updated appliance parts, in-unit ceiling-fan fixtures, an indoor pool liner, building overhang replacement, vinyl flooring, kitchen faucets and landscaping improvements.

COMPETITIVE SET

Distance Year Built/ Avg. Rental Avg. Unit Property Location from Subject Units Renovated Occupancy Rate Per Unit Size (SF)

OneEleven Chicago, IL 0.8 miles 504 2014 93.0% $3,497 1,188

Coast at Lakeshore East Chicago, IL 0.2 miles 495 2013 95.0% $3,304 1,170

Mila Chicago, IL 0.5 miles 402 2016 94.0% $2,450 877

Optima Center Chicago, IL 0.8 miles 325 2013 98.0% $2,862 1,324

North Harbor Tower Chicago, IL 0.5 miles 600 1988 91.0% $2,403 1,004

500 North Lakeshore Drive Chicago, IL 1.0 mile 500 2013 96.0% $2,816 1,549

Aqua at Lakeshore East Chicago, IL n/a 474 2009 96.6% $2,522 818

Source: Appraisal.

The appraisal identified six properties in the local market that directly compete with the subject property. The properties have strong occupancies that range from approximately 91.0% up to 98.0% and generally have larger unit sizes than the subject property. The subject has an occupancy roughly in line with the competitive set, although North Harbor Tower has a notably lower occupancy due, in part, to its older vintage. Aqua at Lakeshore East has rent offerings on the lower end of the competitive set, as the property has smaller units and older finishes than most of the competing apartment buildings. The subject’s expansive amenity spaces allow it to compete with these newer-vintage products despite having smaller units. Property management noted that One Bennett Park and Optima Signature Apartments are additional competitive properties due to their comparably high-end amenity offerings. These two assets are of newer vintage than the collateral, having both opened in the last couple of years. Consequently, they have higher-rent offerings and do not directly compete with Aqua at Lakeshore East.

SPONSORSHIP The sponsors for the transaction are affiliates of two larger real estate investment and development firms. One sponsor has developed over 8,000 residential units across 29 mixed-use communities, generating over $5.0 billion in value. This sponsor is primarily focused on Chicago-area projects and is responsible for developing the city’s Lakeshore East community. The second sponsor is a global alterative asset manager that has approximately $74.0 billion of assets under management and an international real estate portfolio. The sponsors are repeat Freddie Mac borrowers and have performed as agreed. Property management is provided by a borrower-affiliated company that has been in operation for over 25 years. The management company’s portfolio includes mostly high-rise mixed-use projects in urban Chicago areas but has recently expanded its footprint to other first- and second-tier cities. The company operates at the property for a contractual management fee of 2.25% of EGI.

Structured Finance: CMBS 15 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

AQUA AT LAKESHORE EAST – CHICAGO, IL

DBRS ANALYSIS SITE INSPECTION SUMMARY

Based on the DBRS site inspection and management meeting conduct on August 13, 2019, DBRS found the property quality to be Above Average.

The apartment tower is in the Lakeshore East community of the Chicago CBD. Lakeshore East is a mixed-use urban development that was master planned and is being built by Magellan Development Group. The community features several of the tallest residential buildings in Chicago and several of the subject’s primary competing properties, including The Shoreham and The Tides. Lakeshore East Park serves as the fulcrum of the development, and there are plenty of dining and shopping options that neighbor the park. In addition, there is a Mariano’s grocery store to serve the community’s residents. Per management, the subject offers discounts and gift cards to Mariano’s and other local restaurants and shops for prospective tenants. The famous Michigan Avenue is situated one block west of the collateral, allowing residents to explore the street’s endless luxurious high-end shopping. The property has easily accessible public transportation options with two Chicago L stops located about half a mile west; there are also several bus stops in close proximity to the subject. Of note, the property has access to underground tunnels that connect the Lakeshore East community with Michigan Avenue and several of the nearby office towers, such as Aon Center.

The unit mix consists of 139 studio apartments, 266 one-bedroom/one-bathroom apartments and 69 two-bedroom/two- bathroom apartments. DBRS toured the property’s three model units. Management noted that the one-bedroom units typically generate the highest demand. Units generally showed well with high-quality, attractive finishes but were relatively small given their price points. Kitchens contain stainless steel appliances, granite countertops, tan wood cabinets and dark-green tile backsplashes. Most kitchens feature tan tile flooring and islands that provide ample counterspace. Living rooms have dark laminate wood flooring and receive abundant natural light that permeates the room via floor-to- ceiling glass windows. All units feature balconies that are adjacent to the living rooms. The collateral is uniquely located a quarter mile north of Millennium Park and west of Lake Michigan; consequently, most units offer spectacular units of either the park or the lake. Units with east-facing views toward Lakeshore East Park and Lake Michigan have premiums due to these being the best views offered at the collateral. Bedrooms are bright and airy and feature white carpeted floors and large walk-in closets.

The collateral shares usage of all amenity spaces with the Radisson Blu Aqua Hotel and the condominium units on Floors 53 to 81. Property amenities include three pools; an 80,000-sf sundeck; a fitness center with a basketball court and sauna; a spa; a media room; a business center; a games room and lounge; bicycle storage; and a complimentary shuttle. The subject’s third-floor sundeck is one of the largest in all of Chicago and offers fantastic views of Lakeshore East Park and Millennium

Structured Finance: CMBS 16 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

AQUA AT LAKESHORE EAST – CHICAGO, IL

Park. This lifestyle deck contains a 25-yard lap pool, a wading pool, a hot tub, grilling stations, fire pits, a jogging track and abundant lush landscaping. The fitness center is spacious and features a half basketball court and yoga studio; personal training sessions and workout classes are offered at the fitness center. According to management, the media room may be converted into a golf simulator based upon resident feedback. The subject’s business center is open and modern and frequently utilized by residents, according to management. In addition, the property features ample party and event spaces due in large part to the needs of the Radisson Blu Aqua Hotel. The property has a five-level parking garage on the lower levels of the building that notably features Tesla electric-car-charging stations for use. There are approximately 970 spaces in total that are shared by the apartment renters, condominium owners, hotel patrons and retail shoppers. According to management, the parking garage typically rents out spaces for $265 per month. Overall, DBRS found the property to be well maintained and in great condition with minimal deferred maintenance evident at the time of inspection.

DBRS NCF SUMMARY

NCF ANALYSIS

T-10 NCF 2016 2017 2018 June 2019 Issuer NCF DBRS NCF Variance

GPR $14,155,029 $13,950,175 $13,961,068 $14,361,403 $14,203,980 $14,203,980 0.0%

Other Income $5,333,746 $5,487,007 $5,303,244 $5,491,088 $5,317,372 $5,431,332 2.1%

Vacancy & Concessions -$948,531 -$764,957 -$804,225 -$703,756 -$825,276 -$737,622 -10.6%

EGI $18,540,244 $18,672,225 $18,460,087 $19,148,735 $18,696,076 $18,897,690 1.1%

Expenses $7,378,340 $7,688,473 $8,773,108 $8,544,044 $8,379,214 $9,239,961 10.3%

NOI $11,161,904 $10,983,752 $9,686,978 $10,604,692 $10,316,862 $9,657,729 -6.4%

Capex $0 $0 $0 $0 $0 $0 0.0%

NCF $11,161,904 $10,983,752 $9,686,978 $10,604,692 $10,316,862 $9,657,729 -6.4%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF for Aqua at Lakeshore East was $9,657,729, a variance of approximately -6.4% from the Issuer’s NCF of $10,316,862. The main drivers of the variance are the operating expenses, management fee and TIs/LCs. For the operating expenses, DBRS generally escalated the T-12 expenses by 3.0%, while the Issuer generally accepted the T-12 figures or budget estimates for operating expenses. DBRS applied a management fee of 3.0% of EGI, lower than the typical 4.0% fee for multifamily properties due to the high rental rates at the subject. By comparison, the Issuer used a management fee of 2.0% of EGI. DBRS assumed TIs of $20.00 psf and $5.00 psf for new and renewal retail space, respectively, and $30.00 psf and $15.00 psf for new and renewal office space, respectively. Lastly, DBRS applied LCs of 6.0% and 3.0% for new and renewal retail space and LCs of 5.0% for both new and renewal office space, respectively.

DBRS VIEWPOINT The subject’s submarket has experienced a development boom, as the Lakeshore East community continues to see residential projects come on line. According to Reis, the subject has an average vacancy rate of 7.4% for multifamily properties due to the influx of competition. The average rental rates at the property of $2,522 per unit is above market compared with the submarket average of $2,269 per Reis but still lags behind the appraiser’s competitive set at $2,889 per unit, which is in part attributable to the property being one of the oldest in the competitive set. The subject has relatively small apartments with an average unit size below all comparable properties in the appraiser’s competitive set. However, prospective residents should continue to be attracted to the subject due to its spectacular amenity features, scenic views and superb location. The property benefits from its amenity offerings that are more expansive than those offered at other Lakeshore East residential buildings, such as the Coast at Lakeshore East and The Tides. The sundeck and comprehensive fitness center are unique features that differentiate the subject from nearby competing apartment buildings. In addition, there

Structured Finance: CMBS 17 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

AQUA AT LAKESHORE EAST – CHICAGO, IL is moderate refinance risk, as the loan exhibits low credit metrics with a DBRS Refi DSCR and Exit Debt Yield of 0.72x and 7.2%, respectively. Further, the loan per unit of $305,781 is high relative to the sales comparable within a 5.0-mile radius of the subject.

DOWNSIDE RISKS • The loan is structured with an initial three-year IO period and has a high issuance LTV of 72.5%. Furthermore, the loan has a slightly elevated term default risk based on a low DBRS DSCR of 1.17x.

STABILIZING FACTORS • The loan balance amortizes down by approximately $10.6 million over the seven-year term. This produces some amortization and has a balloon LTV of 67.2%, utilizing the loan’s maturity balance of approximately $134.4 million. Furthermore, the borrower is a long-term owner that developed the property and provided $50.4 million of cash equity, which represents approximately 25.8% of the purchase price.

Structured Finance: CMBS 18 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Slate Creek Roseville, CA

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $100.0 Loan psf/Unit $163,382 Percentage of the Pool 6.8% Loan Maturity/ARD June 2025 COLLATERAL SUMMARY Amortization n/a DBRS Property Type Multifamily Year Built/Renovated 1989/2017 Issuance DSCR City, State Roseville, CA Physical Occupancy 94.3% 1.42x Units/SF 612 Physical Occupancy Date July 2019 Issuance LTV 67.2% The loan is secured by the borrower’s fee simple interest in a 612-unit multifamily Balloon LTV 67.2% complex located in Roseville, California, which is 20.4 miles northeast of the DBRS Property Type Sacramento, California, CBD. Loan proceeds of $100.0 million and $48.7 million of Multifamily cash equity were used to acquire the property for $148.7 million and cover closing DBRS Property Quality costs. The seven-year fixed-rate loan is IO for the entire term. Average The garden-style multifamily-unit complex was constructed in 1989 and was renovated Debt Stack ($ million) most recently in 2017. The unit breakdown consists of 152 one-bedroom units averaging Trust Balance $100.0 765 sf; 356 two-bedroom units averaging 1,076 sf; and 104 three-bedroom units Pari Passu averaging 1,331 sf, which are generally slightly larger in size than units at comparable $0.0 properties in the surrounding area. Unit amenities include a fully equipped kitchen, B-Note a washer/dryer, walk-in closets and a patio/balcony with exterior storage, and select $0.0 units feature a built-in microwave, a fireplace and vaulted ceilings. Property-wide Mezz common-area amenities include a 24-hour fitness center, three community swimming $0.0 pools, three heated spas, a dog park, a tennis court with lights, three basketball courts, Total Debt three children’s playgrounds, a business center and a multipurpose center with $100.0 billiards, multiple televisions, video game rooms and a full kitchen and lounge. Loan Purpose Acquisition The seller of the property spent $1.8 million, equal to $2,947 per unit, from 2015 to Equity Contribution/ 2018 on interior and exterior upgrades. According to the appraisal, the seller renovated (Distribution) ($ million) 124 units, and 301 units were renovated by the prior owner. The seller’s interior $48.7 renovations included upgrades to flooring, countertops, appliances, cabinetry, doors, plumbing fixtures and light fixtures. The exterior renovations included upgrades to common-area finishes and landscaping and the construction of a new fitness center and clubhouse.

Structured Finance: CMBS 19 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

SLATE CREEK – ROSEVILLE, CA

The current sponsor plans to invest $2.6 million, equal to $4,186 per unit, in exterior and interior capital improvements, which includes 170 unit renovations over the next four years. Per the underlying loan agreement, the borrower is required to complete no less than $1.0 million in unit renovations within four years of closing, and approximately 100 units are expected to be renovated if the sponsor elects to do the minimum required amount of renovations. As of August 2019, there have been five units that have been upgraded to the current sponsorship’s renovation plan, and all have been leased. These units have achieved a $210 renovation premium over classic unrenovated units, according to the sponsor. Per the site inspection conducted in August 2019, there were 15 units currently under renovation. According to the regional manager, the rental rate premiums for renovated units over classic units are $210 for one-bedroom units, $220 for two-bedroom units and $230 for three-bedroom units. The regional manager noted that the sponsor planned to focus on renovating the classic units and then focus on upgrading the units that were renovated by previous sponsors at the property. The property experienced a fire in one of the buildings in early February 2019, which resulted in damage to 16 units. There were eight units that experienced relatively minor damage, which were brought back on line in early April 2019. The other eight units had extensive fire damage and are expected to be rebuilt and brought back on line in December 2019. The expenses associated with bringing these units back on line are not specifically allocated in the sponsor’s $2.6 renovation million plan. These units will likely be built out similarly to the sponsor’s current renovated units once they are rebuilt.

As of the July 2019 rent roll, the property was 94.3% occupied and the property exhibited an average rental rate of $1,635 per unit. The property’s physical vacancy rate, as of the July2019 rent roll, of 5.7% is higher than the Reis submarket and submarket by construction vintage cohort vacancy rates of 3.8% and 3.6%, respectively. The property’s average rental rate is in line with market rental rates when compared with the Reis submarket and submarket by construction vintage cohort average rental rates of $1,528 per unit and $1,590 per unit, respectively. Reis is projecting that by the end of 2023, there will be 765 units constructed in the submarket, representing 6.3% of current inventory in the Roseville submarket, and the submarket vacancy rate will increase to 6.7% from 3.8%.

The appraisal identified six multifamily properties in the market that directly compete with the subject. The properties generally have smaller unit sizes, similar rental rates and higher occupancy rates compared with the subject. For more information on the subject’s competitive set, please refer to the table below.

COMPETITIVE SET

Distance Year Built/ Avg. Rental Avg. Property from Subject Units Renovated Occupancy Rate Per Unit Unit Size (SF)

Autumn Oaks Apartments 5.8 miles 200 1998 97.0% $1,476 901

The Preseve at Creekside 3.4 miles 336 1999 96.0% $1,715 977

Rosemeade at Olympus 1.3 miles 465 1989 94.0% $1,587 841

Pinnacle at Galleria 3.6 miles 236 2000/2015 93.0% $1,605 976

Deer Valley Apartments 0.9 miles 262 1990 95.0% $1,725 949

Stoneridge 2.3 miles 230 2004 95.0% $1,752 969

Total/Wtd. Avg. Comp. Set Various 1,729 Various 94.9% $1,644 926

Slate Creek - Subject n/a 612 1989/2017 94.3% $1,621 1,057

Source: Appraisal, except the Subject figures are based on the rent roll dated June 30, 2019.

SPONSORSHIP The key sponsors are subsidiaries of a firm that provides alternative asset management and financial advisory services internationally. As of December 2018, the sponsor reported over $472.0 billion in assets under management and ownership interest in 25 multifamily properties and portfolios across the United States. The sponsor is a repeat Freddie Mac borrower

Structured Finance: CMBS 20 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

SLATE CREEK – ROSEVILLE, CA and has closed 94 loans for more than $3.7 billion. There are seven other loans within this securitization with a related borrower to this transaction, and this group represents 23.4% of the cut-off date balance for this securitization.

The property is managed by a third-party entity, established in 2001, and currently manages 56 multifamily properties containing 17,093 units — 612 of which are managed locally. The company operates the property for a contractual management fee of 3.0% of EGI.

DBRS ANALYSIS SITE INSPECTION SUMMARY

Based on the DBRS site inspection and management meeting conducted on August 9, 2019, DBRS found the property quality to be Average.

The garden-style apartment complex is located east of East Roseville Parkway, a local commercial thoroughfare, in the northwest suburbs outside of Sacramento. The property is approximately 20.0 miles, around a 30-minute drive, from downtown Sacramento, but is only located around 1.0 miles away from Kaiser Permanente Roseville Medical Center, a major economic driver in the area. The property is situated in an established area, and the immediate radius area around the property is built out with a mix of retail, medical office, multifamily and school properties. The subject has a direct walking path to the neighboring Safeway and HomeGoods–anchored retail center, which supplies convenient retail options for the tenants at the property. The property is located north of Excelsior School, a school in the Eureka Union School district that has a reputation for being one of the highest-achieving school districts in California. Per the regional manager, most of the new multifamily construction is occurring in west Roseville, which is not included in the Eureka Union School district. Newer developments in west Roseville such as Campus Oaks and Harvest Oaks command a higher rental rate than the subject, yet the subject property has lost potential tenants to these properties, according to the regional manager. The subject’s exterior facade was attractive and offered a mix of gray-and-navy-toned exterior plank-siding, white-painted wood accents and sloped asphalt shingled roofs.

The property’s leasing office was busy at the time of the inspection and benefited from high ceilings with contemporary hanging light fixtures, large windows and modern furniture. The property manager relayed that the property was 93.0% occupied and 95.0% leased at the time of the inspection. The property was not offering concessions at the time of the inspection, but the regional manager noted the property had been offering one-month rental abatements in conjunction with 12-month leases initiated between February 2019 and June 2019, after the occupancy at the property had dropped to 86.0%. The regional manager noted that the property’s sister property, Rosemeade at Olympus Pointe, located about a mile away, was currently offering two-week rental-abatement concession in conjunction with annual lease signings. The

Structured Finance: CMBS 21 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

SLATE CREEK – ROSEVILLE, CA subject’s amenities are as follows: outdoor pools, gyms, a yoga studio, a dog park, playgrounds, sports courts, a business center and a multipurpose area, all of which were generally well kept and typical of a large Class B+ suburban multifamily that has recently undergone renovations. DBRS noted minor incidents of deferred maintenance such as broken pool furniture, cracking in the exterior pool area surface and cracked televisions near the billiard tables in the multipurpose area; instances of parking lot cracking and oil staining; dead plants in landscaped areas; and chipping on exterior stairwells while touring the facility.

DBRS inspected four units at the property, including two units renovated by the previous owner, one unit renovated by the current sponsor and a classic non-renovated unit. The primary differences between the renovated unit and the non- renovated units observed were that the non-renovated units offered white-Formica-laminate countertops, off-white laminate cabinets with no handles, white appliances and dated beige carpeting in the living room, while the renovated units offered quartz countertops, bright-white cabinetry with nickel-finish handles, stainless steel appliances and gray- wood laminate flooring in living rooms. The regional manager conveyed that renovated units by current and previous sponsorship generally garner premiums of $210 for one-bedroom units, $220 for two-bedroom units and $230 for three- bedroom units over non-renovated units. The units renovated by the previous sponsor and the unit renovated by the current sponsor were, overall, similar in quality, as the most notable differences were the countertops, which were lower in height, and the gray-wood laminate flooring was a lighter shade in the unit renovated by the current sponsorship compared with the units renovated by the previous sponsorship. The renovated units observed were comparable to a typical suburban Class B+ apartment, and the non-renovated classic unit was comparable to the quality of a suburban Class B- apartment. The regional manager relayed that the property’s renovated units were similar in quality and finishes compared with the subject’s primary competitors, Deer Valley Apartments and Rosemeade at Olympus Pointe, which have also undergone recent interior renovations.

DBRS NCF SUMMARY

NCF ANALYSIS

T-12 T-12 NCF 2016 2017 March 2018 June 2019 Issuer NCF DBRS NCF Variance

GPR $9,754,868 $10,553,222 $10,736,750 $11,576,302 $11,136,096 $11,136,096 0.0%

Other Income $907,233 $969,863 $1,007,946 $888,926 $1,007,946 $888,926 -11.8%

Vacancy & Concessions -$578,486 -$627,450 -$631,490 -$1,113,714 -$784,128 -$847,287 8.1%

EGI $10,083,615 $10,895,635 $11,113,206 $11,351,514 $11,359,914 $11,177,735 -1.6%

Expenses $3,418,160 $3,482,789 $3,547,251 $4,509,133 $4,390,691 $5,280,902 20.3%

NOI $6,665,455 $7,412,846 $7,565,956 $6,842,381 $6,969,224 $5,896,833 -15.4%

Capex $0 $0 $0 $0 $0 $0 0.0%

NCF $6,665,455 $7,412,846 $7,565,956 $6,842,381 $6,969,224 $5,896,833 -15.4%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF was $5,896,833, a -15.4% variance from the Issuer’s NCF.

The main drivers of the variance are operating expenses and concessions. The Issuer generally applied the T-12 period ending March 31, 2018, level of expenses for operating expenses. The resulting Issuer assumptions resulted in a total expense level of $6,924 per unit and a 37.3% Issuer expense ratio. DBRS generally applied the T-12 period ending June 30, 2019, level of expenses inflated by 3.0%. The resulting DBRS total expense ratio of 45.8% and total expenses per unit of $8,360 are near the high end of the appraiser’s expense ratio and expenses-per-unit comparable ranges of 27.5% to 47.8% and $5,105 per unit to $7,661 per unit, respectively.

Structured Finance: CMBS 22 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

SLATE CREEK – ROSEVILLE, CA

For concessions, the Issuer assumed 0.1% of GPR based on the T-12 ending March 31, 2018, level, and DBRS assumed 2.0% of GPR based on the T-9 period ending June 30, 2019, annualized level of concessions. Per the site inspection conducted in August 2019, the property manager noted that current sponsorship recently used concessions to lease up the property to a stabilized occupancy rate level of 93.0%, after the property’s physical occupancy dropped below 88.0% in March 2019.

DBRS VIEWPOINT The subject is a garden-style apartment complex located in an established suburban area of east Roseville near major local medical-field employers and strong public schools. The regional manager noted that most of the new multifamily property development occurring in the submarket is concentrated in west Roseville, and these new properties are competing for tenants with the subject, despite the newer properties exhibiting higher asking rental rates than the subject and not being located in the esteemed Eureka Union School district. Reis is projecting that the submarket vacancy rate of 3.8%, as of Q2 2019, will increase to 6.7% by 2023 due to the projected completion of 756 new units, which represent 6.3% of current supply. The property’s vacancy rate of 5.7% as of the July 2019 rent roll is inline with the Reis submarket vacancy rate, the appraiser’s competitive set’s WA-by-unit-count vacancy rate of 5.1% and historical vacancy rate of 6.2%, ranging from 2016 to the T-12 period ending June 30, 2019. The sponsor used a one-month free concession to increase occupancy rate to 93.0% as of the August 2019 site inspection, which is an occupancy rate that is more in line with the submarket and the competitive set. The sponsor’s expectation to command a rental rate premium of around $200 to $230 per unit for renovated units is reasonable given that the seller was able to achieve similar premiums for renovated units and the scope of the previous and current sponsor renovated units are similar esthetically. While the underlying loan agreement only requires the borrower to complete no less than $1.0 million in unit renovations within four years of closing, the sponsor is likely incentivized to improve property performance due to the significant amount of sponsor equity contributed to this transaction. The sponsor contributed $48.7 million of sponsor equity, representing 32.8% of the total acquisition price, to this transaction. Considering the multifamily property is located in an area with a DBRS Market Rank of 3, the DBRS DSCR of 1.42x and the loan’s issuance LTV of 67.2% are moderate. Per Real Capital Analytics, the property’s cut-off-date balance of $163,382 is slightly below the WA sale price of $176,540 per unit for multifamily properties within a 5.0-mile radius of the subject property across eight transactions since August 2017.

DOWNSIDE RISKS –– The property’s NRI has been declining during the T-12 period ending June 30, 2019, as higher concessions were offered to increase occupancy following the acquisition of the property. The property began offering one-month free concessions in conjunction with 12-month lease signings to increase occupancy after the property’s occupancy dropped to 86.0% in February 2019, according to the regional manager. The average monthly NRI for the T-3 period of $850,199; T-6 period of $849,230; and T-9 period of $857,401 are all below the average monthly NRI of $871,882 for the T-12 period ending June 30, 2019.

STABILIZING FACTORS –– At the time of the inspection in August 2019, the regional manager reported that the property was no longer offering concessions and was 93.0% occupied. If DBRS were to assume the T-3 period ending June 30, 2019, annualized NRI in its NCF analysis, the resulting hypothetical DBRS DSCR would still be moderate at 1.40x for a suburban multifamily property. While the exact number of units taken offline for renovations by the seller and the current sponsor during the T-12 period ending June 30, 2019, was not provided, the property’s NRI has likely been depressed during this time period due to units intentionally being taken offline for renovations.

Structured Finance: CMBS 23 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Turnbury At Palm Beach Gardens Palm Beach Gardens, FL

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $79.5 Loan psf/Unit $147,283 Percentage of the Pool 5.4% Loan Maturity/ARD May 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built 1970 Issuance DSCR City, State Palm Beach Gardens, FL Physical Occupancy 95.0% 1.13x Units 540 Physical Occupancy Date April 2019 Issuance LTV 75.4% Balloon LTV The loan is secured by the borrower’s fee simple interest in a 540-unit garden-style 70.0% apartment complex located in Palm Beach Gardens situated in the larger North Palm DBRS Property Type Beach, Florida, submarket 13.0 miles to the north of the West Palm Beach, Florida, Multifamily CBD. Loan proceeds of $79.5 million refinanced existing Freddie Mac debt of $78.5 DBRS Property Quality million and funded a $240,069 cash equity distribution, and remaining funds were Average allocated to upfront reserves for tax, insurance, replacement reserves and $2.3 million in debt-service reserves. The fixed-rate loan has a seven-year term and is interest-only Debt Stack ($ million) for the initial 36 months before amortizing over a 30-year schedule. Trust Balance $79.5 Pari Passu The multifamily complex, of a 1970s vintage, has not been fully renovated since its $0.0 delivery yet still supports occupancy of 95.0% per the April 2019 annualized rent B-Note roll. Amenities available to all tenants include outdoor options such as dog parks, $0.0 swimming pools, picnic/recreation areas, tennis and basketball courts and a car wash Mezz area. Other common-area amenities include a fitness center, a cafe and a clubhouse. $0.0 Furthermore, the subject features completed in-unit amenities such as breakfast bars, Total Debt in-unit washers and dryers and private balcony/patio areas. The unit breakdown $79.5 consists of 180 one-bedroom units (805 sf ); 315 two-bedroom units (1,067 sf ); and 45 Loan Purpose three-bedroom units (1,300 sf ). According to the April 2019 rent roll, these unit types Refinance posted average monthly rental rates of approximately $1,242/unit/month; $1,444/unit/ Equity Contribution/ month; and $1,919/unit/month, respectively. (Distribution) ($ million) ($0.2) Prior to the acquisition, the previous owner completed partial renovations to 60.0% of units, adding new lighting/plumbing fixtures, shower rods, cabinets and white appliances. Following the acquisition, the borrower has since invested $2.9 million in capex. This renovation effort allocated $1.43 million toward exterior upgrades to enhance landscaping, signage, painting and repairs and exterior lighting. To date, the

Structured Finance: CMBS 24 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

TURNBURY AT PALM BEACH GARDENS – PALM BEACH GARDENS, FL borrower has renovated 51 units with interior upgrades that include backsplashes, stainless steel appliances, countertops and upgraded paint. Correspondingly, the borrower expects to achieve rent premiums of approximately $75.00 per month for renovated units. Eventually, the sponsor expects to renovate all units at the property.

The appraisal report identified six comparable properties within a 3.5-mile radius that could represent sources of direct competition.

COMPETITIVE SET

Property Location Distance from Subject Units Year Built Occupancy

Mira Flores Palm Beach Gardens, FL 1.3 miles 352 1996 98.0%

Gardens East Apartments Palm Beach Gardens, FL 1.0 miles 448 1991 97.0%

San Merano at Mirasol Palm Beach Gardens, FL 2.0 miles 476 2004 98.0%

Sanctuary Cove Apartments North Palm Beach, FL 1.9 miles 420 1996 93.0%

Gables Montecito Palm Beach Gardens, FL 3.0 miles 450 2006 95.0%

Woodbine Apartment Homes Riviera Beach, FL 3.2 miles 408 2001 96.0%

Total/Wtd. Avg. Comp. Set Various, State Various 2,554 Various 96.2%

SPONSORSHIP The key sponsors for the loan are a real estate investment and management firm and an undisclosed warm-body co-sponsor, who also serves as the carveout guarantor for this transaction. Founded in 1996 by the co-sponsor, the real estate investment and management firm focuses on the multifamily asset class. The firm has had ownership interests and management positions in approximately 25,000 residential units collectively valued at more than $2.5 billion. The co-sponsor holds over 20 years of real estate experience with involvement at all stages of the investment process, from site selection to underwriting, capital sourcing and investor relations. The co-sponsor disclosed multiple adverse credit events tied to the Great Recession, including a maturity default on December 1, 2009, of a loan secured by a 151-unit multifamily asset in West Palm Beach. In May 2010, a Standstill Agreement was negotiated with the special servicer and a refinance of the loan with Freddie Mac. After raising an additional $1.5 million of equity to combine it with Freddie Mac financing, the loan was successfully paid off in October 2010. The co-sponsor is a repeat borrower who has completed more than 80 transactions with Freddie Mac representing over $2.3 billion in unpaid principal balance since 2010.

Structured Finance: CMBS 25 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

TURNBURY AT PALM BEACH GARDENS – PALM BEACH GARDENS, FL

DBRS ANALYSIS SITE INSPECTION SUMMARY

Based on the DBRS site inspection and management meeting conducted on August 13, 2019, DBRS determined the overall property quality to be Average.

The property benefits from an excellent location being less than a quarter mile from North Military Trail, PGA Boulevard and I-95, all of which are major thoroughfares in the area. The property is less than one mile from the ocean and less than half a mile from The Gardens Mall. The immediate area is largely residential in nature with a mix of garden-style multifamily and single-family homes. Additionally, there is some retail along the major corridors, largely comprising free- standing retail offerings but also some strip retail. Less than a mile south of the property is the local public high school Palm Beach Gardens Community High School. A short five-minute walk to the west is a local grocer.

The grounds display good curb appeal having well-manicured landscaping with a variety of trees, shrubs and flowers. The property has a large double-width driveway leading to the leasing office. The leasing office also functions as the clubhouse, featuring a living room area with seating and televisions, a fitness center and a shared kitchen. The clubhouse has sliding doors that provide direct access to one of the property’s two pools, each having recent upgrades in furnishings. The pool area was surrounded with red brick and had new bright-green chaise lounges and umbrellas. The entire pool area was surrounded by black-iron fencing and square-cut shrubbery to provide a sense of privacy. The property’s second pool is located not far away with the exact same design features. Additional amenities spaced throughout the grounds include a basketball court, a tennis court, two dog runs, various communal grills and barbecue pits and a car wash area.

Apartment units were spread between 33 buildings with varying paved roadways weaving through the property for access and red-brick walkways traversing the larger grass areas between buildings. Exterior parking spaces lined the various buildings and are free to tenants and their guests, which were in good condition. Buildings were a mix of white-stucco and dark-brown horizontal paneling. Large screened-in porches and balconies protrude from the buildings as unit amenities. Unit interiors were attractive with white-stone flooring throughout the kitchens and living rooms. Kitchens featured clean white cabinetry, black countertops and stainless steel appliances in the renovated units, whereas unrenovated units currently have white appliances. Bathrooms featured the same esthetic. Bedrooms were well sized and carpeted with large closets. The property has over 50 different floor plans with variations in the number of bedrooms, washer-and-dryer placement, ensuite or disconnected bathrooms and points of access to the balcony or patio. While the overall complex was not very modern, it was attractive and thoughtfully kept up.

Structured Finance: CMBS 26 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

TURNBURY AT PALM BEACH GARDENS – PALM BEACH GARDENS, FL

DBRS NCF SUMMARY

NCF ANALYSIS

T-12 NCF 2016 2017 2018 June 2019 Issuer NCF DBRS NCF Variance

GPR $8,674,890 $8,976,087 $8,151,603 $9,077,574 $9,178,512 $9,178,512 0.0%

Other Income $938,302 $948,934 $931,441 $1,056,025 $1,016,881 $1,056,025 3.8%

Vacancy & Concessions -$647,929 -$592,829 -$581,911 -$640,785 -$518,586 -$888,956 71.4%

EGI $8,965,263 $9,332,192 $8,501,133 $9,492,813 $9,676,807 $9,345,581 -3.4%

Expenses $3,602,523 $3,717,839 $3,425,411 $4,131,502 $3,946,783 $4,187,759 6.1%

NOI $5,362,740 $5,614,353 $5,075,723 $5,361,311 $5,730,024 $5,157,822 -10.0%

Capex $0 $0 $0 $0 $0 $0 0.0%

NCF $5,362,740 $5,614,353 $5,075,723 $5,361,311 $5,730,024 $5,157,822 -10.0%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF was $5,157,822, a -10.0% variance from the Issuer’s NCF.

The main drivers of the variance are vacancy and repairs and maintenance. DBRS concluded a vacancy rate of 10.0% as at the time of inspection and occupancy of 86.0%, largely affected by the loss of a long-term contract, per property management. Historical vacancy at the property for the last three years ranged from 4.8% to 6.8%, and per the Reis Q1 market report, the average submarket vacancy rate and by-vintage vacancy rate were 5.4% and 9.0%, respectively. The resulting DBRS NRI was $690,796 per month, slightly below the 2017 figure of $698,605 per month. The Issuer concluded to a vacancy rate of 5.7%. The DBRS repairs and maintenance expense was based on the T-12 ending June 2019 figure inflated by 3.0%.

DBRS VIEWPOINT The subject is a desirable Class A/B property with excellent accessibility and good proximity to retail, restaurants and the ocean. The property has had vacancy ranging from 4.8% to 6.8% over the past three years through the T-12 ending June 2019. This averages to 5.9%, which is just between the average submarket vacancy rate of 5.4% and the submarket average for buildings of a similar vintage of 9.0%. However, in April 2019, the property ended a contract, which resulted in 26 move-outs in May 2019. By the DBRS site inspection on August 13, 2019, the property was 14.0% vacant. Given the nature of this decrease in occupancy, the market’s tighter statistics and the projected market tightening to an average vacancy rate of 3.3% over the next five years per REIS, it is likely that the property will be able to lease back up to a more normalized level. To the property’s benefit, since its acquisition in February 2018, the sponsor has invested $2.9 million in upgrades ($5,399/unit), including upgraded amenities, landscaping improvements, fresh exterior paint and new exterior lighting. Additionally, of the $2.9 million, $553,504 ($1,025/unit) was spent to upgrade in-unit appliances to stainless steel, adding new countertops and backsplashes. The sponsor plans to spend an additional $3.5 million ($6,528/unit) on additional capital-improvement projects and renovations at the property, though neither a specific timeline has been provided nor was the money reserved for upfront.

DOWNSIDE RISKS –– The subject loan represents high-leverage financing with a 75.4% LTV and financing at $147,283 per unit at issuance. Four properties have been securitized in agency CMBS transactions since 2015 within a 5.0-mile radius of the property. These have had LTVs ranging from 55.0% to 78.9%, with an average of 69.3%. Financing for these range from $64,410/unit to $146,590/unit, with an average of $95,515/unit.

Structured Finance: CMBS 27 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

TURNBURY AT PALM BEACH GARDENS – PALM BEACH GARDENS, FL

STABILIZING FACTORS –– The sponsor is an experienced real estate professional and has demonstrated their interest in the property’s continued performance by spending $2.9 million in their first year of ownership ($5,339/unit) and plans to even further improve the property and make it more desirable to the market by spending an additional $3.5 million in renovations ($6,528/unit). It is likely that with these renovations the property could see growth in rental rates or increase in occupancy. These future improvements and their potential upside were not a factor in the DBRS cash flow analysis. While the sponsor is cashing out $240,069, they still have $20.6 million in cash equity remaining in the deal, which equates to 60.7% of the total cost basis.

Structured Finance: CMBS 28 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

City Walk At Woodbury Woodbury, MN

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $72.7 Loan psf/Unit $160,508 Percentage of the Pool 4.9% Loan Maturity/ARD July 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built/Renovated 2004 - 2012/2018 Issuance DSCR City, State Woodbury, MN Physical Occupancy 92.3% 1.19x Units 453 Physical Occupancy Date June 2019 Issuance LTV 66.6% Balloon LTV This loan is secured by the borrower’s fee simple interest in a 453-unit four-story 61.7% apartment complex and separate retail parcel located in Woodbury, Minnesota, DBRS Property Type approximately 20.0 miles east of the Twin Cities of Minneapolis and Saint Paul. Loan Multifamily proceeds of $72.7 million, combined with $35.3 million of cash equity, facilitated the DBRS Property Quality Sponsor’s purchase of the property for $108.0 million. The loan has an initial IO period Average (+) of 36 months, amortizing over a 30-year schedule thereafter.

Debt Stack ($ million) The collateral consists of two multifamily buildings — City Walk West (built in 2004) Trust Balance $72.7 and City Walk East (built in 2012) — a leasing office and amenities building and a total Pari Passu of 22,795 sf of retail space spread across City Walk West as well as a separate retail $0.0 parcel, referred to as The Mews. According to the June 2019 rent roll, the multifamily B-Note portion of the property was 92.3% occupied at an average rental rate of $1,673 per unit, $0.0 while the retail portion was 79.5% occupied. Property-wide amenities include multiple Mezz community rooms, a clubhouse and leasing office, a full gym with a golf simulator, a $0.0 dog park, an indoor swimming pool and an outdoor barbecue area. The unit breakdown Total Debt consists of 147 one-bedroom units (876 sf ); 284 two-bedroom units (1,308 sf ); and 22 $72.7 three-bedroom units (1,935 sf ). In-unit amenities include fireplaces, a full-size washer/ Loan Purpose dryer and patios or balconies in select units. Acquisition Equity Contribution/ Over the past several years, the seller completed renovations across the property (Distribution) ($ million) inclusive of new exterior siding at both multifamily buildings and select interior unit $35.3 upgrades. In total, approximately 155 units received upgrades, including 95 units in City Walk West, which received the premium renovation package and were delivered in 2018. Updates included the installation of vinyl plank flooring, stainless steel appliances and new countertops, cabinets, lighting and fixtures in the kitchens and bathrooms. Reportedly, these units are achieving rental premiums of $197 per month.

Structured Finance: CMBS 29 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

CITY WALK AT WOODBURY – WOODBURY, MN

The remaining 60 updated units are spread across both buildings, with similar upgrades completed only to the kitchens. As a result of the ongoing unit renovations, the vacancy rate ranged from 7.8% to 16.3% from the start of 2018 through June 2019.

As part of the Sponsor’s acquisition, it has budgeted $2.4 million for further renovations with $1.2 million earmarked for interior improvements and $1.2 million for exterior upgrades spread across the entire property. An additional 61 units at City Walk West will receive the premium renovation package noted above at an estimated cost of $6,700 per unit, while 245 units at City Walk East will receive upgrades consisting of vinyl plank flooring, a kitchen backsplash and new lighting fixtures at an estimated cost $2,900 per unit. Planned improvements across the property include new paint and carpeting to common-area hallways, property signage, installation of cameras in the parking garages and select updates to the property’s existing tenant amenities.

Commercial tenants at the property consist of a mix of local service providers and retailers with individual suites ranging in size from 625 sf to 3,939 sf. The tenants generally operate on three- to five-year leases and collectively do not contribute significant revenue to the overall bottom line, as total base rent represented 3.7% of EGI as at YE2018. The tenants within City Walk West operate on gross leases, while tenants within The Mews operate on net leases. The Mews is subject to a Condominium Declaration, as there are 26 residential units above the commercial units that do not serve as collateral. The condominium is split into residential and commercial classes, controlled by a seven-person board (five residential directors and two commercial directors). Decision-making power regarding a singular class is granted to the respective directors of that class with any joint decisions subject to a simple majority vote. While expenses are allocated based on individual ownership, any unpaid assessments may constitute a lien on the property.

The appraisal report identified six comparable properties that represent sources of direct competition within the subject’s submarket.

COMPETITIVE SET

Distance Year Built/ Avg. Rental Avg. Unit Property Location from Subject Units Renovated Occupancy Rate Per Unit Size (SF)

Valley Creek Apartments Woodbury, MN 5.8 miles 402 1987/2018 94.0% $1,558 953

Crown Villa Woodbury, MN 4.6 miles 126 2010 96.0% $1,528 1,100

The Barrington Woodbury, MN 4.6 miles 282 1998/2001 97.0% $1,461 932

Grand Reserve at Eagle Valley Woodbury, MN 2.4 miles 394 2000 97.0% $1,726 1,343

Woodbury Park at City Centre Woodbury, MN 3.6 miles 224 1998/2015 96.0% $1,505 1,286

Ascend at Woodbury Woodbury, MN 6.6 miles 305 2018 n/a n/a n/a

Total/Wtd. Avg. Comp. Set Various, State Various 1,733 Various 95.9% $1,574 1,122

City Walk at Woodbury Woodbury, MN n/a 453 2004/2012 92.3% $1,673 1,198

Source: Appraisal, except the Subject figures are based on the rent roll dated June 4, 2019.

SPONSORSHIP The borrowing entity for the loan consists of a six-entity TIC structure, which is controlled by the Sponsor who also serves as the warm-body guarantor. The Sponsor is an experienced commercial real estate professional, as his real estate investment and management company, co-founded in 1991, currently has more than $2.0 billion in assets, including 35 multifamily properties totaling approximately 14,000 units. The Sponsor is a repeat Freddie Mac borrower, having closed 63 loans since 2011 at a cumulative principal balance in excess of $1.6 billion. All loans have performed as agreed.

Structured Finance: CMBS 30 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

CITY WALK AT WOODBURY – WOODBURY, MN

DBRS ANALYSIS SITE INSPECTION SUMMARY

Based on the DBRS site inspection and management meeting conducted on August 15, 2019, DBRS determined the overall property quality to be Average (+).

The subject is located on the northern border of the Woodbury city limit parallel with I-94, which provides access to the greater Minneapolis–Saint Paul region. The property is located at the intersection of Woodbury Drive and Hudson Road, accessible via the Woodbury Drive exit from I-94 a quarter mile north of the property. There are two property entrances along Hudson Road with another along Woodbury Drive. Large property signage, in the form of a tall brick tower, is easily visible along Woodbury Drive with additional smaller retail signage found at the other property entrances. Both multifamily buildings have similar construction with exterior siding painted in various tones of brown and beige. A portion of City Walk West has first-floor retail suites, with the remaining collateralized retail space located in two small strip buildings immediately south. The separate leasing office and amenities building is located between both multifamily buildings at the center of the site.

The immediate area is characterized by a mix of multifamily properties, single-family homes and retail developments. There are townhomes, traditional apartments and single-family homes to the south and east, a Walmart-anchored retail center to the north across Hudson Road and a Sam’s Club and Hobby Lobby–anchored retail center to the west across Woodbury Drive. About one mile west is the Woodbury Lakes outdoor shopping center, anchored by an Alamo Drafthouse Cinema, DSW and Michael’s. At the property itself, non-collateral retailers include Dunn Brothers Coffee, AT&T, Mattress Firm and a handful of local restaurants.

During its tour, DBRS viewed the interior of several units at the property, including a renovated unit, an upgraded unit and an original unit. Across all units viewed, DBRS found the individual units to be large with good-sized living areas, bedrooms, closets and bathrooms. As City Walk West was built first, the approximately 95 fully renovated units are located in this building with the approximately 60 upgraded units spread across both buildings. The fully renovated units are modern with finishes including vinyl plank flooring throughout (except in bedrooms), stainless steel appliances, new countertops, cabinets, lighting and fixtures. In contrast, the upgraded units have received full kitchen updates, while other aspects remain original, including white-carpet flooring throughout with the exception of the kitchen and bathrooms. While there is a $1.2 million budget for interior unit renovations, management, at the time of the DBRS site inspection, is determining the scope of any future unit renovations, as it is considering raising rents on existing non-renovated units. Based on the achieved premiums of fully renovated rents, however, it appears there is demand for a higher standard of

Structured Finance: CMBS 31 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

CITY WALK AT WOODBURY – WOODBURY, MN living at the property. According to management, the tenant base consists of approximately 40.0% young professionals, 30.0% families and 30.0% seniors or retirees.

The amenities are primarily located in the leasing office and clubhouse building and include a gym, an indoor pool, a games room, multiple club rooms, a playground and a dog park. In general, the amenities were found to be in good condition and modern, particularly the club rooms, which are available to be rented out by residents and are furnished with kitchenettes, televisions and plenty of seating. According to management, planned updates to the amenities in the immediate to near term include modernizing the dog park and the exterior patio and grill area. The occupied retail suites were found to be in good operating condition with build-outs and designs specific to individual tenants’ businesses. Vacant suites will likely require a moderate leasing incentive package in order to facilitate new leasing; however, the spaces were generally clean and available for lease.

DBRS NCF SUMMARY

NCF ANALYSIS

2018 T-12 April 2019 Issuer NCF DBRS NCF NCF Variance

GPR $9,214,509 $9,227,209 $9,166,428 $9,166,428 0.0%

Other Income $884,344 $873,413 $758,547 $797,433 5.1%

Vacancy & Concessions -$1,563,627 -$1,404,251 -$1,052,943 -$1,113,281 5.7%

EGI $8,535,226 $8,696,371 $8,872,032 $8,850,580 -0.2%

Expenses $4,150,029 $4,173,793 $3,771,411 $3,998,607 6.0%

NOI $4,385,197 $4,522,578 $5,100,621 $4,851,973 -4.9%

Capex $0 $0 $0 $0 0.0%

NCF $4,385,197 $4,522,578 $5,100,621 $4,851,973 -4.9%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF was $4,851,973, a -4.9% variance from the Issuer’s NCF.

The main driver of the variance is operating expenses. The Issuer generally applied the T-12 period ending April 30, 2019 (T-12), level of expenses for individual operating expenses, although it did use the appraiser’s estimate for payroll expense. Additionally, the Issuer did not include an expense for down units, which was reported at approximately $68,000 in the T-12 statement. The resulting Issuer assumptions resulted in a total expense level of $8,075 per unit and a 41.2% expense ratio. DBRS generally applied the T-12 expenses for individual operating-expense line items, inflated by 3.0%, inclusive of the down-unit line item as units will likely be taken offline over the next two years to complete further interior renovations. The resulting DBRS total expenses of $8,529 per unit and expense ratio of 43.8% are within the appraiser’s expense ratio and expenses-per-unit comparable ranges of 33.9% to 47.1% and $7,760 per unit to $9,905 per unit, respectively.

DBRS VIEWPOINT The subject is a desirable Class A property in a bedroom community with good proximity to retail, restaurants, employment generators and the Twin Cities of Minneapolis and Saint Paul. It benefits from a broad tenant base spread evenly across young professionals, families and seniors, diminishing the risk of any large swings in vacancy. The subject currently operates near the top of its competitive set with average in-place rental rates of $1,673 per unit; however, given the increased demand for renovated units completed by the seller, there is likely additional material upside to rental rates. As such, the Sponsor has budgeted $2.4 million for continued property renovations, $1.2 million of which is specifically earmarked for the further upgrade of 306 unit interiors. While property vacancy is likely to continue to remain above historical levels as units turn over, the long-term financial outlook for the subject is expected to remain stable. DBRS applied a 12.5% total economic loss in its NCF analysis, which is above the current Reis vacancy estimate for the entire

Structured Finance: CMBS 32 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

CITY WALK AT WOODBURY – WOODBURY, MN

Washington County submarket of 5.7% and the Class A vacancy rate in the submarket of 9.7%, which increased in Q2 2019 from 2.5% in the previous quarter due to the delivery of 305 units to the submarket.

DOWNSIDE RISKS –– The subject loan represents high leverage financing at $160,508 per unit at issuance, amortizing down to $148,542 per unit at loan maturity. Comparatively, ten properties within a 10.0-mile radius of the subject have been securitized in agency CMBS transactions between 2011 and 2018 with going-in leverage-per-unit figures ranging from approximately $12,000 per unit to $89,000 per unit. The three loans securitized throughout 2018 had higher leverage-per-unit figures, ranging from approximately $71,000 per unit to $89,000 per unit.

STABILIZING FACTORS –– The Sponsor is an experienced real estate professional and contributed $35.3 million of fresh cash equity to acquire the property, which represents 48.4% of the outstanding loan amount. The subject currently operates above its competitive set in terms of average rental rates and average unit size, and given the appetite already demonstrated by its existing tenant base for renovated units, there is likely material upside in cash flow as unit renovations are completed, which is not contemplated in DBRS’s current analysis.

Structured Finance: CMBS 33 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Hudson Woodstock Woodstock, GA

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $69.0 Loan psf/Unit $138,454 Percentage of the Pool 4.7% Loan Maturity/ARD June 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built/Renovated 2000/2015 Issuance DSCR City, State Woodstock, GA Physical Occupancy 95.8% 1.18x Units 498 Physical Occupancy Date April 19 Issuance LTV 70.0% Balloon LTV The loan is secured by the borrower’s fee simple interest in a 498-unit multifamily 64.7% community complex located in Woodstock, Georgia, which is approximately 30.0 miles DBRS Property Type north of Atlanta. Loan proceeds of $69.0 million, in addition to $29.6 million of Multifamily borrower cash equity, were used to acquire the subject property at arm’s length for a DBRS Property Quality purchase price of $98.5 million. The seven-year fixed-rate loan is IO for 36 months Average and will amortize over a 30-year schedule thereafter.

Debt Stack ($ million) The garden-style multifamily complex, which was constructed in 2000 and renovated Trust Balance $69.0 in 2015, was 95.8% occupied as of the April 2019 rent roll. The renovations included Pari Passu upgraded kitchen counters, cabinets, tile backsplashes, light fixtures and flooring. $0.0 Property-wide amenities include two swimming pools, two tennis courts, two car- B-Note care centers, a dog park, an outdoor kitchen, a fitness center, a sand volleyball court, a $0.0 putting green, a business center, a yoga studio and a clubhouse. Additionally, the unit Mezz amenities include fully equipped kitchens and private patios/balconies. Select units $0.0 include washer/dryer connections. The unit breakdown consists of 212 one-bedroom Total Debt units (929 sf ); 230 two-bedroom units (1,206 sf ); and 45 three-bedroom units (1,401 sf ). $69.0 The borrower is planning to invest approximately $2.2 million ($4,373 per unit) in Loan Purpose renovations that will include repairs and improvements to the roofs, pool deck, parking Acquisition lot, HVAC and landscaping. In addition, the borrower will spend nearly $300,000 on Equity Contribution/ energy-efficiency initiatives, including LED lighting throughout and new shower heads. (Distribution) ($ million) $29.6

Structured Finance: CMBS 34 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

HUDSON WOODSTOCK – WOODSTOCK, GA

There were five identifiable multifamily properties in the local market that are direct competitors with the subject. For more information, please refer to the table below.

COMPETITIVE SET

Property Location Distance from Subject Units Year Built/Renovated Occupancy

The Avonlea Woodstock, GA 10.0 miles 401 1999 96.0%

Park 9 Woodstock, GA 14.0 miles 275 2015 98.0%

The Heights at Towne Lake Woodstock, GA 14.0 miles 194 2000 94.0%

Paces at Town Lake Woodstock, GA 13.0 miles 242 2000 95.0%

Station 92 Woodstock, GA 2.2 miles 272 2015 95.0%

Hudson Woodstock Woodstock, GA n/a 498 2000/2015 95.8%

Source: ASR

SPONSORSHIP The key sponsor for the loan is a privately held company, a subsidiary of a larger parent company, that focuses its investments on submarkets across the Northeast, Southeast and Midwestern United States. The principals possess 70 years of legal and business experience in closing complex real estate finance transactions across a broad range of property types and financing structures. The sponsor is a repeat Freddie Mac sponsor, having completed over 20 transactions since 2009 for a total transaction volume of over $427.0 million since 2009.

The borrowing entity comprises two TICs, a structure that DBRS considers to have higher risk. However, the guarantor has interests in both TICs, which reduces some of the risk.

DBRS ANALYSIS SITE INSPECTION SUMMARY

Based on the DBRS site inspection and management tour conducted on August 19, 2019, at 12:30 p.m., DBRS determined the overall property quality to be Average.

Structured Finance: CMBS 35 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

HUDSON WOODSTOCK – WOODSTOCK, GA

At the time of DBRS’s visit, the occupancy was 95.8%. The property is in a primarily residential area in Cherokee County, about 30.0 miles north of Atlanta. The area is about 12.0 miles from both Roswell, New Mexico, and Alpharetta, Georgia, and 16.0 miles north of Perimeter Center, Georgia, which serve large employment centers on the north side of Atlanta. To the north of the property is Alabama Road Northeast, or Route 92, a major east–west thoroughfare that offers access to Fulton and Gwinnett Counties. Three miles west, I-575 connects with I-75 to provide access to Cobb County and Atlanta proper.

The immediate area along Route 92 is commercial but not densely developed with a Kroger-grocery-anchored center on the south side of the road and a Publix-anchored center immediately to the north. Immediately across Trickum Road is a Walmart-anchored center. The remaining stretch from Trickum Road to I-575 consists of lower-density office and community organizations such as churches and child care. The subject is the only multifamily property in the immediate area, although there are at least five near the interchange with I-575 to the west. The nearest property is Station 92, which is 2.0 miles west.

The entrance has good signage from Trickum Road, which is off Route 92. The complex was built in two phases, and each phase has controlled access via an entry gate. Each phase has its own pool, outdoor areas and mail room, while the fitness room, business center and clubhouse are housed in the leasing office. There is a small putting green at the second phase. The exteriors of the three-story residential buildings primarily consist of vinyl siding with stone accents, a common feature of construction of this vintage. The grounds are well maintained, and the pools are inviting with barbece areas and beach chairs. There are a limited number of detached garages that are available to rent for about $100 per month and storage units for $25.00 per month.

The interiors benefit from the 2015 renovation, which updated the kitchens and baths. The kitchens have laminate counters, tile backsplashes and black appliances. The units have washer and dryer connections, and management will rent equipment to residents. There is also a small laundry room on site for those that choose not to install washers. According to the manager, prior to the renovation, the newer units in the second phase garnered slightly higher rents. Since the renovation, which focused more on the older units, apartments in phase one now rent for about $20.00 more per month.

The property utilizes lease optimization software and, as such, does not offer concessions but changes rents daily depending on demand. The manager stated that the in-place rent was $1,331 per unit compared with the “market rent” in the system of $1,297, which suggests that the property does not need discounts from the street rent to maintain occupancy. According to management, many of the residents are employed in Alpharetta and Roswell, though some travel to Atlanta. One of the draws of the area is the Cherokee County schools, which offer higher quality than some other areas of Fulton County. At the same time, the area’s home prices are relatively low, with single-family homes available for less than $200,000. Woodstock has increased its population threefold over the past 20 years, partially driven by good schools and the lower cost of living.

Structured Finance: CMBS 36 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

HUDSON WOODSTOCK – WOODSTOCK, GA

DBRS NCF SUMMARY

NCF ANALYSIS

T-12 NCF 2016 2017 2018 March 2018 Issuer NCF DBRS NCF Variance

GPR $6,826,890 $7,140,726 $7,424,171 $7,524,570 $7,747,668 $7,747,668 0.0%

Other Income $1,209,882 $1,147,566 $1,188,614 $1,192,560 $1,192,560 $1,192,560 0.0%

Vacancy & Concessions -$654,518 -$381,791 -$415,042 -$436,507 -$575,755 -$659,630 14.6%

EGI $7,382,254 $7,906,501 $8,197,743 $8,280,623 $8,364,473 $8,280,598 -1.0%

Expenses $2,945,060 $3,050,143 $3,112,313 $3,076,609 $3,513,570 $3,773,846 7.4%

NOI $4,437,194 $4,856,358 $5,085,430 $5,204,014 $4,850,903 $4,506,752 -7.1%

Capex $0 $0 $0 $0 $0 $0 0.0%

NCF $4,437,194 $4,856,358 $5,085,430 $5,204,014 $4,850,903 $4,506,752 -7.1%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF was $4,506,752, a -7.1% variance from the Issuer’s NCF.

The main drivers of the variance are real estate taxes, vacancy and operating expenses. To account for an imminent tax reassessment, DBRS concluded real estate tax expense by applying the actual real estate tax rate to the upper end of the potential range suggested by the property value. The Issuer concluded an assessment value that is above historical taxes but at the lower end of the possible range. For vacancy, DBRS increased the vacancy to ensure that the concluded NRI is no greater than the NRI for the T-12 period ending March 2018. This was greater than the Issuer’s concluded vacancy rate. DBRS derived operating expense by inflating the expense levels for the T-12 period ending market 2018 by 3.0%, which resulted in a DBRS operating expense ratio of 44.1%.

DBRS VIEWPOINT DBRS expects stable cash flow over the near term, attributable to a strong multifamily market that has exhibited low vacancy over the past five years with consistent and stable rent growth. Rental rates had a strong run with growth rates of 8.8% in 2017 and 8.4% in 2018, according to Reis. While growth is unlikely to continue at this pace, the increase suggests that demand in the area is strong. Often high asking-rent growth can be driven by an influx of new supply, which often comes at a higher price point than existing stock. However, this submarket saw only 99 units delivered in 2017 and 2018 combined, which indicates that increased demand is driving the growth. Even as rates pushed significantly higher, the vacancy rate increased to 3.6% from 2.2%, which suggests that renters are willing to accept those rises, for the most part. There is no new construction forecast by Reis over the next several years, which should contribute to ongoing stability.

The property itself has operated between 5.0% and 6.0% vacancy since the completion of the renovations and was 95.8% occupied at the time of DBRS’s visit. This is somewhat higher than market levels but may also be explained by the renovation premiums of up to $200 per month that the property implemented after 2016. The location at the southern end of Cherokee County offers residents proximity to several major employment centers (Alpharetta, Roswell and Atlanta), which may give it an advantage over properties farther to the north.

DOWNSIDE RISKS –– The borrower is structured as TIC, which historically has had higher risks compared with other forms of ownership. –– The loan has an appraised LTV of 70.0%, and the going-in DBRS DY is 6.5%, which suggests higher leverage.

Structured Finance: CMBS 37 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

HUDSON WOODSTOCK – WOODSTOCK, GA

STABILIZING FACTORS –– The guarantor has ownership in both TICs, which reduces the risk that one TIC could force a default. –– The property’s performance has been stable and, with the 2015 renovations, has exhibited increased rental rates and occupancy. With a market vacancy rate below 4.0%, DBRS expects similar performance going forward. Furthermore, the loan benefits from some amortization and has a balloon LTV of 64.7%.

Structured Finance: CMBS 38 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Windsor Lakes Woodridge, IL

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $64.5 Loan psf/Unit $84,677 Percentage of the Pool 4.4% Loan Maturity/ARD May 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built/Renovated 1972-75/2003 Issuance DSCR City, State Woodridge, IL Physical Occupancy 92.9% 1.21x Units/SF 762 Physical Occupancy Date June 2019 Issuance LTV 72.6% Balloon LTV This loan is secured by the borrower’s fee simple interest in Windsor Lakes, a 762-unit 66.2% garden-style multifamily property located in Woodridge, Illinois, approximately DBRS Property Type 23.0 miles southwest of the Chicago CBD toward Naperville. The subject collateral was Multifamily previously securitized, first in COMM 2006-C7 and later in FREMF 2016-KF17, with DBRS Property Quality both loans resulting in full repayments under the current borrower, who originally Average (-) acquired the subject property in 2005. Whole-loan proceeds of $64.5 million refinanced approximately $59.9 million of existing Freddie Mac debt on the property from the Debt Stack ($ million) most recent prior securitization, covered closing costs and reserves and facilitated Trust Balance $64.5 $3.5 million of cash-out equity to the borrower, resulting in no equity remaining in Pari Passu the deal. The seven-year fixed-rate loan is structured with an initial two-year IO $0.0 period and amortizes on a 30-year basis thereafter. Based on the property’s May 2019 B-Note appraised value of $88.9 million, the loan represents a 72.6% issuance LTV. $0.0 Mezz Originally constructed in two phases in 1972 and 1975, the collateral consists of 18 three- $0.0 story garden-style buildings situated on a 40-acre land parcel. Property-wide amenities Total Debt include a fitness center, business center, indoor basketball court, playground, hot tub, $64.5 swimming pool, billiards room and clubhouse. In aggregate, the subject has 1,209 Loan Purpose parking spaces (1.59 spaces per unit) between its mix of surface and detached garage Refinance parking. Units themselves include fully equipped kitchens, walk-in closets, washer/ Equity Contribution/ dryer connections and vaulted ceilings. Although the property has not received a full (Distribution) ($ million) renovation since development, the borrower has invested approximately $2.2 million ($3.5) since 2016 in capital improvements at the property, including boiler replacements and interior/exterior upgrades. While the exterior of the property received fresh paint and landscaping, interior unit upgrades included new lighting/windows, new appliances and new carpet/vinyl flooring. The borrower also has plans to continue boiler replacement for the central domestic water and heating systems at the property.

Structured Finance: CMBS 39 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

WINDSOR LAKES – WOODRIDGE, IL

The unit mix at the subject comprises 54 studios (averaging 450 sf ), 492 one-bedroom units (averaging 675 sf ) and 216 two-bedroom units (averaging 895 sf ). Occupancy levels at the subject have somewhat fluctuated over the past three years, with vacancy rates ranging from 6.0% to 8.3%. Average monthly rental rates have increased to $980 from $909 as of the T-12 ending June 2019 (averaging roughly 2.6% annually) since 2016. The subject was 92.9% occupied per the rent roll dated June 2019.

The collateral is located in the Downers Grove submarket of the greater Chicago metropolitan area. Reis reported an average asking rent and vacancy rate of $1,206 and 4.0%, respectively, for the Downers Grove submarket as of Q1 2019. However, properties of similar vintage to the collateral (i.e., properties constructed between 1970 and 1979) exhibited slightly lower average asking rents at $1,194 and a tighter vacancy rate of 3.3%. The subject varies from the Reis data on both metrics, with vacancy at 7.9% and an average asking rent of $980. However, its below-market average rents could be attributed to the unit mix at the property, in which there is a large concentration of one-bedroom units and no units exceeding two bedrooms. Reis predicts no incoming supply to the submarket through YE2023. Vacancy is expected to remain steady over the same time period.

The appraisal identified six competitive properties within a 5.4-mile radius of the collateral. With the exception of The Towers at Four Lakes, all of the properties have vintages preceding 1980, which is consistent with the subject and the rest of the submarket. According to Reis, 78.0% of properties in the submarket have vintages dating 1980 or prior as of Q1 2019. The competitive set’s occupancy rates range from 95.0% to 100.0%, which are higher than the level seen at the subject. All of the properties outperform the subject’s occupancy by at least 210 basis points.

COMPETITIVE SET

Property Location Distance from Subject Units Year Built/Renovated Occupancy

Dynasty Pointe Apartments Woodridge, IL 0.6 miles 270 1979 95.0%

Prentiss Creek Downers Grove, IL 1.4 miles 700 1968 98.0%

Courts Of The Falling Waters Downers Grove, IL 1.9 miles 243 1968 98.0%

Lisle Station Apartments Lisle, IL 5.4 miles 180 1978 98.0%

King Arthur Apartments Westmont, IL 5.1 miles 240 1964 100.0%

Towers At Four Lakes Lisle, IL 4.4 miles 478 1989 96.0%

Windsor Lakes Woodridge, IL n/a 762 1975/2003 92.9%

Source: Appraisal.

SPONSORSHIP Three privately held real estate investment companies with national and international portfolios provide the main sponsorship for this transaction. Combined, the sponsors own over 60,000 multifamily units globally and have 48 years of experience operating in the real estate industry. Two of the companies are repeat Freddie Mac borrowers, with all loans performing as agreed. The sponsors had no adverse credit issues to report.

The property is managed by a borrower-controlled entity for a contractual rate of 3.0% of EGI. The company has over 12 years of experience with multifamily properties and currently has over 12,000 units under management across nine states.

Structured Finance: CMBS 40 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

WINDSOR LAKES – WOODRIDGE, IL

DBRS ANALYSIS SITE INSPECTION SUMMARY

Based on the DBRS site inspection and management meeting conducted on August 15, 2019, DBRS determined the overall property quality to be Average (-).

The apartment complex is located on the northeast corner of 75th Street and Woodward Avenue in Woodridge, about 23.0 miles southwest of the Chicago CBD. The area is primarily residential in nature with both 75th Street and Woodward Avenue heavily improved with retail and commercial developments. Directly north and east of the subject are single-family residential neighborhoods. South of the subject is a small retail-and-office development, and a golf course is located on the south side of 75th Street. West of the subject is a mostly vacant power center, which is now only anchored by The Home Depot and is occupied by several other smaller tenants. Immediately west of the power center is I-355, which provides the subject with excellent regional access. There are two grocery-store-anchored retail centers within a mile of the subject to the east and west, both on 75th Street.

The property is a large development with 762 units spread across 18 buildings. The complex was developed in the early to mid-1970s and has a traditional architectural style. The buildings have a brick facade with small amounts of wood lap-siding accents, a combination of mansard and pitched roofs with asphalt shingles and metal-framed windows. DBRS noted a number of deferred maintenance items such as missing mansard roof shingles, the need for tuckpointing and deteriorating wood siding and posts. The lack of maintenance carries through to the parking lot, sidewalks and landscaping. The asphalt lots and interior drives show significant spalling, cracks and patchwork. The landscaping was mixed. It was abundant at the main entrance on 75th Street and around the leasing office, consisting of flower beds and bushes; however, most apartment buildings had minimal landscaping around the buildings. Mature trees were abundant throughout the site, and there was an ample amount of grassy lawns between the structures; however, barren spots were noticeable. The pool area and concrete deck behind the clubhouse were in good condition, but the tennis court was in poor condition and needed to be resurfaced. Overall, the subject’s curb appeal was low.

The interior of the clubhouse also projected a traditional design style with tan carpeting and tile floors, approximately 16-foot white-painted coffered ceilings and red-and-tan painted walls with white trim. The clubhouse contains a leasing office and a lounge with two upholstered couches, a games room with carpet floors, a pool table with a ripped felt table, a dark-wood bar and a built-in TV cabinet with an older-style TV set. Other amenities include a business center with dark-wood cabinets and laminate countertops, a fitness center with carpet flooring and roughly ten pieces of equipment,

Structured Finance: CMBS 41 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

WINDSOR LAKES – WOODRIDGE, IL a children’s play room and a half-court basketball court. Overall, the floors, walls and doors were dirty and showed significant wear.

The apartment buildings contain three levels, with the lowest level partially below grade. Each building has an intercom/ buzzer system for guests, mailboxes within the entrance and a laundry room in the lower level. The entrance features a metal-framed glass door with a tile floor that leads to carpeted stairs. The buildings DBRS inspected had cracked and broken tiles, with worn and dirty low-pile industrial-style carpeting in the stairs and corridors. Since Q2 2019, two of the 13 buildings have had corridor renovations, including new paint and lighting. The remaining 11 buildings are scheduled to receive these updates, and all 13 apartment buildings will receive carpeting over time.

The 762 units are divided into studio, one-bedroom and two-bedroom units. Since September 2018, 80 units have been renovated, while the remaining 682 are considered classic units. Units will continue to be renovated as they roll over; however, no specific budget or time frame for performing these upgrades was provided. The level of improvements will also depend on the condition of the units as they become available. DBRS toured one classic one-bedroom unit that featured white painted walls, carpet flooring in the living and bedrooms and tile flooring in the kitchens and bathrooms. The kitchen had almond-colored 1980s-style European cabinets, laminate countertops and mismatched white appliances. The bathroom had an older-style solid surface vanity and a tub with a tile surround. DBRS also inspected one fully renovated one-bedroom model unit. It included new carpeting in the living and bedrooms and vinyl plank flooring in the entrance, kitchen and bathroom. The kitchen had new white cabinets, black appliances and a marble-effect laminate countertop. The bathroom had a new vanity and new tile surround in the shower. Some renovated units only have a resurfaced tile surround. The average unit size is small at 721 sf; however, the room sizes appeared adequate, though closet space was minimal. In general, the unit interiors showed better than the building exteriors, common corridors and amenity spaces.

DBRS NCF SUMMARY

NCF ANALYSIS

T-12 NCF 2016 2017 2018 June 2019 Issuer NCF DBRS NCF Variance

GPR $8,309,685 $8,611,596 $8,864,397 $8,960,613 $8,957,856 $8,960,612 0.0%

Other Income $949,863 $1,077,992 $1,001,249 $995,171 $903,293 $903,293 0.0%

Vacancy & Concessions -$543,361 -$883,195 -$920,242 -$917,265 -$940,737 -$916,495 -2.6%

EGI $8,716,187 $8,806,393 $8,945,404 $9,038,519 $8,920,412 $8,947,410 0.3%

Expenses $3,854,496 $3,918,045 $4,073,555 $4,084,414 $4,130,744 $4,308,639 4.3%

NOI $4,861,691 $4,888,348 $4,871,849 $4,954,106 $4,789,668 $4,638,771 -3.2%

Capex $446,499 $798,564 $721,285 $422,312 $0 $0 0.0%

NCF $4,415,192 $4,089,784 $4,150,564 $4,531,793 $4,789,668 $4,638,771 -3.2%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF was $4,638,771, a variance of -3.2% from the Issuer’s NCF. The main driver of the variance is operating expenses, real estate taxes and insurance. DBRS based operating expenses on the T-12 ending June 30, 2019, plus 3.0% inflation. Real estate taxes and insurance were based on actual amounts per the T-12 ending June 30, 2019. The resulting DBRS expense ratio of 46.5% is in line with historical figures, DBRS’s expense comparables with a median ratio of 45.4% and the Reis submarket at 45.5%.

Structured Finance: CMBS 42 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

WINDSOR LAKES – WOODRIDGE, IL

DBRS VIEWPOINT The subject is a large 762-unit multifamily complex located in an infilled suburban Chicago MSA. The collateral benefits from its access to I-355 and commercial establishments along 75th Street, including two grocery stores and numerous restaurants. Vacancy at the property has remained relatively stable since 2016, ranging from 6.0% to 8.3%, with an average of 7.6%. This is slightly worse than the Reis Q1 2019 submarket vacancy of 4.0%. Similarly, the subject’s current average monthly rental rate of $980 is below the Reis submarket rent of $1,206, which indicates that the collateral is underperforming relative to the market. This may be a result of the condition of the asset, which, based on the DBRS site inspection and management meeting, has a deemed overall property quality of Average (-). While the sponsor has invested roughly $2.2 million into the property since 2016, a number of deferred maintenance items were identified during the DBRS inspection. The exterior curb appeal was limited, as the property reflects a dated architectural style; the amenity areas were generally dirty or in need of repair; and the common corridors were in subpar condition. Some improvements have been made on the common corridors, but no timeline or budget was provided to DBRS, suggesting these renovations may take several years to implement. On the positive side, 80 apartment units have been renovated since September 2018 and have generally garnered a $125 premium over the unrenovated units. However, no money was reserved at closing, and no budget was provided for additional unit renovations. Management indicated that units will be renovated as leases roll but that the decision to renovate and level of renovation are determined at the corporate level. Thus is it unclear how many additional units may be improved or if any supplemental rent premiums will be realized at the collateral.

DOWNSIDE RISKS –– The loan facilitated $3.5 million of cash-out equity to the borrower, resulting in no equity remaining in the deal. –– The loan is structure with an initial two-year IO period and has a high issuance LTV of 72.6%. Furthermore, the loan has a slightly elevated term default risk based on a lower DBRS DSCR of 1.21x.

STABILIZING FACTORS –– The borrower is a longer-term owner, having owned the asset since 2005; has invested approximately $2.2 million in improvements since 2016; and is actively renovating units on a rolling basis. –– The loan benefits from some amortization and has a balloon LTV of 66.2%. Additionally, the sponsor is a repeat borrower, having closed approximately 51 loans in excess of $1.0 billion, which all have performed as agreed.

Structured Finance: CMBS 43 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Suite 2801 Apartments Euless, TX

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $54.7 Loan psf/Unit $131,218 Percentage of the Pool 3.7% Loan Maturity/ARD August 2022 COLLATERAL SUMMARY Amortization n/a DBRS Property Type Multifamily Year Built/Renovated 2013 Issuance DSCR City, State Euless, TX Physical Occupancy 96.6% 1.78x Units 417 Physical Occupancy Date June 2019 Issuance LTV 66.9% Balloon LTV This loan is secured by the borrower’s fee interest in Suite 2801 Apartments, a 417-unit 66.9% multifamily property in Euless, Texas, approximately 20.0 miles northeast of the Fort DBRS Property Type Worth, Texas, CBD and 25.0 miles northwest of the Dallas CBD. As of March 2019, the Multifamily property was 96.2% physically occupied. The five-year fully IO acquisition loan was DBRS Property Quality funded in July 2017. Loan proceeds of roughly $54.7 million, along with $27.0 million Above Average of borrower equity, were used to fund the acquisition price of $81.7 million. As of May 20, 2019, the property is known as Cortland Glade Parks. Debt Stack ($ million) Trust Balance $54.7 Originally built in 2013, the property consists of 16 three-story buildings on a 15.4-acre Pari Passu lot. Given the recent construction, no capital improvements have been made to the $0.0 property since its development. However, the borrower plans to invest roughly B-Note $448,000 ($1,075/unit) to upgrade common-area amenities as well as add washer/dryer $0.0 appliances to all units. The property’s unit breakdown comprises 236 one-bedroom Mezz units averaging 809 sf; 141 two-bedroom units averaging 1,132 sf; and 40 three-bedroom $0.0 units averaging 1,624 sf. Per the June 2019 rent roll, the collateral’s one-, two- and Total Debt three-bedroom units averaged monthly rents of $1,317; $1,712; and $2,688, respectively, $54.7 with an average rent per unit of $1,582. As of June 2019, the average rent per unit Loan Purpose was $1,545. Acquisition Equity Contribution/ In the competitive set below, the appraiser identified five comparable properties of (Distribution) ($ million) similar quality and size in the nearby area. These properties were selected because, $27.0 in addition to their similarities, they compete directly for prospective tenants in the market. Based upon the appraiser’s research, the subject property’s rental rates are similar to those in the market, including both contractual rates and quoted rates. All five competitive properties identified by the appraiser have strong occupancy figures ranging from 91.0% to 96.0%. Average monthly market rent was $1,614 per unit based

Structured Finance: CMBS 44 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

SUITE 2801 APARTMENTS – EULESS, TX upon the competitive set, slightly higher than the subject’s average rent of $1,545 per unit. Rent growth and vacancy rates have remained at consistently healthy levels over the past five years. According to the appraiser, the mid- to long-term projection for the submarket is for continued stability. According to a Q2 2019 Reis report, the average submarket asking rent and vacancy of properties built after 2009 were $1,652 and 1.0%, respectively.

COMPETITIVE SET

Property Location Distance from Subject Units Year Built/Renovated Occupancy

Avenue 900 Euless, TX 3.0 Miles 300 2016 91.0%

Enclave at Bear Creek Euless, TX 2.0 Miles 308 1984/2013 95.0%

Kensington by The Vineyard Euless, TX 0.5 Miles 259 1997/2006 96.0%

Monticello by The Vineyard Euless, TX 0.4 Miles 354 2001 95.0%

Vine South Grapevine, TX 1.1 Miles 220 1996/2015 93.0%

Suite 2801 Apartments Euless, TX -- 417 2013 96.2%

SPONSORSHIP The key sponsor for this transaction is one of the largest multifamily companies in the United States, focused on multifamily investment, property management and development. The principals of the sponsorship group have been involved in the commercial real estate industry for 20 years. As of January 2019, the sponsor owns and operates approximately $9.0 billion in assets comprising 145 properties spanning over 50,000 units in 22 markets. The sponsor also holds real estate investments located in the United Kingdom. The sponsor is also a repeat Freddie Mac borrower, completing 20 loans as agreed upon since 2012.

Property management is provided by the sponsor’s affiliated management company for a contractual fee equal to 2.5% of EGI. The management company’s portfolio currently has management interests in 110 properties and approximately 35,000 units across the nation. The company owns 18 assets in the Dallas–Fort Worth MSA, amounting to over 6,000 units.

DBRS ANALYSIS SITE INSPECTION SUMMARY

DBRS toured the interior and exterior of the property on August 19, 2019, at approximately 11:00 a.m. Based on the site inspection, DBRS found the property quality to be Above Average.

Structured Finance: CMBS 45 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

SUITE 2801 APARTMENTS – EULESS, TX

The subject is located in Euless, off the eastern side of Heritage Avenue, and is accessed via a private drive, Brazos Boulevard. The property is well located near Dallas/Fort Worth International Airport, which is located 8.0 miles directly east of the property. The subject property is west of Hwy. 121, a major northwest–southwest roadway that provides access southwest to Fort Worth, approximately 19.0 miles away. The Dallas CBD is also located approximately 23.0 miles southeast of the property and is accessed via Hwy. 183 and I-35. The subject lies in the North Dallas submarket, and development in the area is primarily residential with retail developments located along main arterials. The property is situated near a large retail corridor comprising retailers such as Target, Albertsons, Marshalls, Lowe’s, Staples and Bed Bath & Beyond. Many fast food and casual dining restaurants are also located within the retail corridor, including Chipotle, Starbucks, Panera Bread, Chick-fil-A, Whataburger, IHOP and Dave & Buster’s.

The subject improvements were originally constructed in 2013 and consist of 16 buildings located on a 15.4-acre site. The property has not been renovated since. At the time of DBRS’s inspection, the property had average curb appeal with average signage located along Heritage Avenue. The property has controlled access via pedestrian gates throughout the property. The subject has a main leasing office that was found to be above average in size with a nice seating area and separate glass-walled office space for the property management personnel. The finishes in the clubhouse were modern and welcoming, creating a good first impression. The leasing office also includes a business center and fitness room. Common-area amenities at the property were found to be generous and included two swimming pools, two fitness centers and a dog park. Both of the property’s swimming pools were accompanied by a barbecue area and outdoor clubhouses, which include a lounge area inside.

Residential buildings stand three stories tall and are constructed with stone-and-stucco walls painted light beige. Landscaping at the property was found to be in good condition with decorative plants, neatly trimmed shrubs and medium- sized mature trees located outside resident buildings.

Large potted plants are also located poolside by both swimming pools and were found to create a pleasant setting. DBRS inspected a one-bedroom model unit and a two-bedroom vacant unit. Units were found to be spacious and were outfitted with hardwood flooring in the living rooms and kitchens, stainless steel appliances, tiled backsplashes in the kitchen and granite/quartz countertops. According to the property manager, approximately half of the property’s units have in-unit washers/dryers, but all include connections. Units also include either a balcony or a patio. Bedrooms were observed to be average-sized but offered spacious walk-in closets. Bathrooms were also observed to be average in quality. Overall, the property was found to be in average condition and displayed no signs of deferred maintenance.

DBRS NCF SUMMARY

NCF ANALYSIS

2018 T-12 June 2019 Issuer NCF DBRS NCF NCF Variance

GPR $7,830,796 $7,777,077 $7,833,813 $7,738,174 -1.2%

Other Income $941,994 $987,004 $720,410 $729,772 1.3%

Vacancy & Concessions -$331,968 -$285,208 -$483,529 -$409,764 -15.3%

EGI $8,440,822 $8,478,873 $8,070,694 $8,058,181 -0.2%

Expenses $4,005,676 $3,959,955 $3,920,032 $4,274,057 9.0%

NOI $4,435,146 $4,518,918 $4,150,663 $3,784,124 -8.8%

Capex $0 $0 $0 $0 0.0%

NCF $4,435,146 $4,518,918 $4,150,663 $3,784,124 -8.8%

Structured Finance: CMBS 46 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

SUITE 2801 APARTMENTS – EULESS, TX

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF was $3,784,124, representing a -8.8% variance from the Issuer’s NCF of $4,150,663. The primary drivers of the variance include operating expenses and replacement reserves. DBRS estimated operating expenses based on the T-12 period ending June 30, 2019, inflated by 3.0%. DBRS based replacement reserves on $250 per unit compared with the Issuer’s assumption of $172 per unit based on the PCA estimate.

DBRS VIEWPOINT The subject represents a well-located property on the north side of the Dallas and Fort Worth metropolitan areas that benefits greatly from a favorable location within a well-established neighborhood in Euless. The property is also well established in the greater Hurst/Euless/Bedford submarket, which is situated approximately 19.0 miles northeast of downtown Fort Worth and 23.0 miles northwest of downtown Dallas. The area exhibits strong occupancy levels and stable rental rate growth; however, according to the appraiser, market conditions could become more competitive due to new product being added, which could create downward pressure on occupancy levels and slow down rental-rate growth. The Hurst/Euless/Bedford area is performing relatively well, with a 1.4% vacancy rate among multifamily properties, according to Reis. When drilling down to the subject’s vintage, the vacancy rate drops to 1.0%. The appraiser also identified five comparable properties that display a low average vacancy rate of 6.0%.

Originally built in 2013, the subject has yet to undergo renovations. Following the property’s acquisition, the borrower plans to spend an additional $448,000 ($1,075/unit) on renovations with a focus on common-area and amenity upgrades. These renovations are favorable not only because they will attract residents in a strong market but also because they will keep the property competitive with other local apartment communities. Per the DBRS site inspection, the property was found to be in Above Average condition, which points to the property’s attractiveness. According to the property manager, during the site inspection, the property no longer offers concessions. Of the $81.7 million cost basis, the borrower is contributing $27.0 million of cash equity at the time of closing, equating to a 66.9% appraiser LTV. Although the leverage is not entirely favorable, the sponsor behind the loan is a large multifamily investment firm that specializes in multifamily investment, property management and development across 22 markets in the United States.

DOWNSIDE RISKS –– The sponsorship group is involved in several open litigation matters. The sponsor disclosed two credit items that include a loan default in 2009 and a failed development in 2005 in which a key principal in the sponsorship group was a guarantor.

STABILIZING FACTORS –– Both credit items were tenant-related issues and have been resolved. The borrower is a large full-scale multifamily investment firm that specializes in multifamily investment, property management and development. The key principals have 20 years of commercial real estate experience with an extensive focus on multifamily properties. As of January 2019, the sponsor owns and operates approximately $9.0 billion in assets compromising 145 properties spanning over 50,000 units in 22 markets. The sponsor also holds real estate investments in the United Kingdom. The guarantors have a reported net worth and liquidity of $442.4 million and $3.1 million, respectively. The sponsor is also a repeat Freddie Mac borrower and has performed as agreed.

Structured Finance: CMBS 47 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Arbour Square Westminster, CO

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $54.6 Loan psf/Unit $182,083 Percentage of the Pool 3.7% Loan Maturity/ARD June 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built/Renovated 2011 Issuance DSCR City, State Westminster, CO Physical Occupancy 95.3% 1.24x Units/SF 300 Physical Occupancy Date May 2019 Issuance LTV 66.9% This loan is secured by the borrower’s fee simple interest in Arbour Square, a 300-unit Balloon LTV 64.3% multifamily property located approximately 17.4 miles north of downtown Denver DBRS Property Type in Westminster, Colorado. Situated within a Planned Unit Development, the subject Multifamily is part of Orchard Towne Center, a master planned community featuring nearly one DBRS Property Quality million sf of open-air retail, restaurant, residential, entertainment and office space. Average The sponsor for this transaction has seven additional non-crossed loans in the pool whose combined balance totals just shy of $350.6 million, or about 23. 7% of the entire Debt Stack ($ million) trust balance. Loan proceeds of approximately $54.6 million, along with a borrower Trust Balance $54.6 equity contribution of $25.9 million, were used to finance the borrower’s acquisition Pari Passu of the subject in May 2019 for a total purchase price of $80.5 million. The seven-year, $0.0 fixed-rate loan is structured with an initial five-year IO period and amortizes on a B-Note 30-year basis thereafter. Based on the property’s May 2019 appraised value of $81.7 $0.0 million, the loan represents a 66.9% issuance LTV. Mezz $0.0 Originally constructed in 2011, the collateral consists of seven garden-style buildings Total Debt and one mid-rise building developed as a LEED certified community (excluding the $54.6 townhome-style units). Property-wide amenities include a fitness center, rooftop Loan Purpose lounge, spa, swimming pool, bike storage, grilling area, theater room, golf simulator, Acquisition community kitchen, conference room, indoor car care center, billiards table and Equity Contribution/ controlled gate access. The subject also features a clubhouse with a fireside lounge and (Distribution) ($ million) an Internet cafe with WiFi and computers. In aggregate, the subject has 508 parking $25.9 spaces (1.69 spaces per unit) between its mix of surface, garage and carport parking. Units themselves are equipped with stainless steel appliances, granite countertops, LED lighting, washer/dryer units, walk-in closets, exterior storage and patios/ balconies. Select units also include an attached garage. Recently completed capital 7 improvements at the property include HVAC and appliance repair, limited interior

Structured Finance: CMBS 48 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

ARBOUR SQUARE – WESTMINSTER, CO finish upgrades and spa resurfacing. The borrower also plans to upgrade the flooring in 275 units as they turn, which is an investment of approximately $675,000. The unit mix at the subject is composed of 19 studios (averaging 509 sf ), 127 one-bedroom units (averaging 717 sf ), 132 two-bedroom units (averaging 956 sf ), and 22 three-bedroom units (averaging 1245 sf ). A number of these units are penthouse and townhome style. The subject was 95.3% occupied per the rent roll dated May 2019. While occupancy at the subject has trended slightly downward, it has remained relatively stable overall, with vacancy rates ranging from 4.4% to 5.3% since 2017. Average monthly rental rates have increased modestly from $1,474 to $1,529 (averaging roughly 1.9% annually) over the same time period.

COMPETITIVE SET

Property Location Distance from Subject Units Year Built/Renovated Occupancy

Arbour Commons Westiminster, CO 0.2 miles 394 2014 96.0%

Parkhouse Apartments Thornton, CO 1.7 miles 465 2017 92.0%

Palisade Park Broomfield, CO 3.2 miles 216 2017 96.0%

Promenade At Hunter's Glen Thornton, CO 4.0 miles 264 1998 97.0%

Willow Run Village Broomfield, CO 3.8 miles 216 2000 93.0%

The Brodie Westiminster, CO 4.5 miles 312 2016 93.0%

Arbour Square Westiminster, CO n/a 300 2011 95.3%

Source: Appraisal.

The appraisal identified six competitive properties within a 4.5-mile radius of the collateral. Nearly all of the properties exhibit similar occupancy levels to the subject, ranging from 92.0% to 97.0%. Despite the vintages ranging from 1998–2017, rents at the comparable properties are generally consistent with rents at the subject. One of the properties, Arbour Commons, is also part of the Orchard Town Center development and is located adjacent to the subject. Though its vintage is slightly newer than the subject’s, the properties’ qualities and amenities appear to be in line with one another.

The collateral is located in the Westminster submarket of the greater Denver-Aurora MSA. Reis reported an average asking rent and vacancy rate of $1,317 and 3.6%, respectively, for the Westminster submarket as of Q1 2019. However, properties of similar vintage to the collateral (i.e., properties constructed after 2009) exhibited higher average asking rents at $1,893 and a slightly wider vacancy rate of 5.0%. Although the subject’s vacancy is in line with the Reis data, its average asking rent of $1,549 is below the market average for its vintage. By YE2023, Reis predicts 949 units of new inventory to be completed in the submarket, representing a 7.2% increase in current supply. Vacancy rates are expected to widen out along with the influx of new supply, rising to an overall submarket vacancy of 5.2% over the same period.

SPONSORSHIP An open-ended, non-traded REIT (which is a subsidiary of a large, publicly traded financial group) provides the main sponsorship for this transaction. The sponsor owns 25 multifamily properties across the United States and has additional interests in segments such as industrial, hotel, retail and securities. The sponsor and its larger parent company are repeat Freddie Mac borrowers, with 86 loans since 2011 totaling over $3.3 billion. To date, all loans are performing as agreed. The sponsor had no adverse credit issues to report.

The property is managed by a third-party entity for a contractual rate of 2.5% of EGI. Based on incentive parameter levels, an additional fee equating to 0.25% of gross collections may also apply. The company’s principals have over 40 years of experience in real estate and currently manage 50,000 units across the United States.

Structured Finance: CMBS 49 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

ARBOUR SQUARE – WESTMINSTER, CO

DBRS ANALYSIS SITE INSPECTION SUMMARY

DBRS toured the interior and exterior of the property on Monday, August 12, 2019, at approximately 1:00 p.m. Based on the site inspection and management meeting, DBRS found the property quality to be Average.

The collateral is situated along Orchard Parkway approximately 11.0 miles northeast of Downtown Denver in Westminster, Colorado. The property benefits from proximity to several regional arterial roadways, including I-25 (a primary north- south arterial roadway providing transit to Downtown Denver) and Expressway 470 (a primary east-west tollway providing transit to Denver International Airport). The collateral did not appear to benefit from visibility along either I-25 or Expressway 470 but still exhibited favorable curb appeal at the time of DBRS’s inspection. The subject’s surrounding area was moderately well developed and comprised a unique blend of commercial and residential land uses, inclusive of a nearly identical residential community (Arbour Commons at Orchard Town Center) that was located directly adjacent to the subject across West 148th Avenue and, per management, was originally constructed as part of the subject property but was separated as part of a prior transaction. The subject additionally benefits from walkability to The Orchard Town Center, an outdoor retail and entertainment center offering nearly one million sf of retail space comprising over 90 specialty retailers. The Orchard Town Center is located directly adjacent to the property’s south.

Per management, the collateral was approximately 94.0% occupied with no concessions being offered at the time of DBRS’s inspection. Management identified the subject’s primary competitor to be Arbour Commons, which is located directly adjacent to the collateral and, per management, features nearly identical unit types at similar rents. Management indicated that a new development had begun across the street from the collateral at the time of DBRS’s inspection but was unsure whether the new construction was intended for multifamily use.

The collateral totals 300 units and comprises eight buildings, including one large four-story central building housing most of the units, five three-story townhouse-style buildings and two three-story garden-style buildings. All buildings generally featured a modern blend of wood-panel, stucco and stone veneer exterior facade work accentuated by coordinated multitoned paint coloring and pitched shingle roofing. All common amenities generally appeared to be located within the central building, which included an on-site leasing and management office, a golf simulator room, an internet cafe, a tenant lounge complete with a partial kitchen and billiards table, an outdoor lounge area, an outdoor grilling station, an outdoor pool and a conference room. The subject offers a variety of unit types ranging from studio to three-bedroom units, which generally showed well and featured wood cabinetry, stainless steel appliances, carpeted flooring throughout all common spaces and vinyl-plank flooring throughout the kitchen areas, full size washer and dryer units and a private

Structured Finance: CMBS 50 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

ARBOUR SQUARE – WESTMINSTER, CO patio/balcony area. A select number of units additionally featured attached garages. Landscaping at the property was minimal, though signs of deferred maintenance were seemingly nominal at the time of DBRS’s inspection. Overall, DBRS found the property to be generally well maintained at the time of inspection.

DBRS NCF SUMMARY

NCF ANALYSIS

2017 2018 T-12 April 2019 Issuer NCF DBRS NCF NCF Variance

GPR $5,307,144 $5,424,348 $5,505,642 $5,577,732 $5,577,732 0.0%

Other Income $692,840 $752,459 $753,308 $753,308 $753,308 0.0%

Vacancy & Concessions -$253,004 -$291,249 -$291,289 -$334,248 -$363,429 8.7%

EGI $5,746,980 $5,885,557 $5,967,661 $5,996,792 $5,967,612 -0.5%

Expenses $1,969,909 $2,035,549 $2,056,864 $2,125,694 $2,340,419 10.1%

NOI $3,777,071 $3,850,008 $3,910,798 $3,871,098 $3,627,193 -6.3%

Capex $0 $0 $0 $0 $0 0.0%

NCF $3,777,071 $3,850,008 $3,910,798 $3,871,098 $3,627,193 -6.3%

The DBRS NCF is based on the DBRS North American Commercial Real Property Analysis Criteria. The resulting DBRS NCF was $3,627,193, representing a -6.3% variance from the Issuer’s NCF of $3,871,098. The primary drivers of the variance included repair and maintenance expenses, payroll expenses and vacancy. DBRS generally inflated operating expenses by 3.0% over the T-12 period ending April 30, 2019. The Issuer generally based operating expenses on the T-12 period ending April 2019 without inflation, exclusive of repair and maintenance expenses and payroll expenses, which the Issuer generally based on the borrower’s budgeted amounts. The resulting DBRS expense ratio of 37.7% was generally in line with identified market comparable properties, which exhibited an average expense ratio of 36.6%. DBRS lastly estimated a 6.8% economic vacancy at the property compared with the Issuer’s estimate of approximately 6.0%. The DBRS economic vacancy loss estimate resulted in an NRI that was generally in line with the property’s performance over the T-12 period ending April 30, 2019.

DBRS VIEWPOINT The collateral for this transaction is generally well located within proximity of several market drivers, including I-25, Expressway 470, and the Orchard Town Center, which further enhances the subject’s commutability to nearby business hubs like Downtown Denver and walkability to nearby retail, dining and entertainment offerings. Though the subject is located within a considerably suburban area, Reis reported strong market trends for the subject’s Westminster submarket, evidenced by an average submarket vacancy rate of 4.1% reported as of Q2 2019. Per Reis, submarket vacancy fell 30 basis points between Q1 and Q2 2019 and is forecasted to fall as low as 3.5% by year-end 2019. While Reis reported a higher vacancy rate for properties of similar vintage to the collateral (i.e., properties constructed after 2009), at the time of DBRS’s inspection, management indicated that the collateral historically operated in the range of 93.0% to 95.0%. Reis forecasts submarket vacancy to rise as high as 4.7% over the five-year period ending December 2023, as construction in the submarket outpaces absorption at a forecasted construction/absorption rate of 1.3. The DBRS NCF implies a break-even occupancy rate of approximately 76.0% based on the scheduled amortizing debt service payment post expiration of the loan’s initial IO period. The transaction further benefits from highly experienced sponsorship, evidenced by the parent company’s completion of 86 prior Freddie Mac transactions valued in excess of $3.3 billion. To date, all prior Freddie Mac transactions commenced by the sponsor’s parent company have performed as agreed. The transaction is moderately leveraged, as evidenced by an issuance LTV of 66.9%. Additionally, the loan is scheduled to amortize approximately 3.8% over the transaction life, nominally reducing default risk at maturity. Furthermore, the sponsor contributed nearly $25.9 million of equity to the transaction as of loan closing, evidencing commitment to the performance of the loan.

Structured Finance: CMBS 51 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

ARBOUR SQUARE – WESTMINSTER, CO

DOWNSIDE RISKS –– The loan is partial IO, as it is structured with an initial five-year IO period and amortizes on a 30-year basis thereafter. –– DBRS toured several properties in the area around the time of the subject’s inspection, and management representatives at several alternative properties indicated that the greater Denver MSA was becoming a renters’ market as a result of over construction relative to absorption trends.

STABILIZING FACTORS –– The loan represents moderate leverage, as evidenced by a 67.9% loan-to-purchase price. The DBRS NCF represents an amortizing DSCR of 1.24x, indicative of sufficient coverage upon expiration of the initial IO period and assuming the DBRS NCF remains constant. –– Reis reported positively trending submarket vacancy rates for the collateral’s submarket between Q1 and Q2 2019 and forecasts submarket vacancy to continue to decline through year-end 2019. While Reis forecasts submarket construction to outpace absorption over the five-year period ending December 2023, the DBRS NCF assumes an economic vacancy loss of 6.8%, in excess of the Reis forecasted submarket vacancy peak of 4.7%.

Structured Finance: CMBS 52 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Lake Vista Loveland, CO

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $52.7 Loan psf/Unit $174,003 Percentage of the Pool 3.6% Loan Maturity/ARD June 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built/Renovated 2011 Issuance DSCR City, State Loveland, CO Physical Occupancy 95.4% 1.27x Units/SF 303 Physical Occupancy Date May 2019 Issuance LTV 69.0% Balloon LTV This loan is secured by the borrower’s fee simple interest in Lake Vista, a 303-unit 66.4% garden-style multifamily property located in Loveland, Colorado, approximately DBRS Property Type 15.0 miles southeast of the downtown CBD in Fort Collins and 55 miles north of Multifamily Denver. Situated on Equalizer Lake in Loveland’s Centerra Community, the subject DBRS Property Quality is part of an award-winning mixed-use development featuring 3,000 acres of shops, Average restaurants, offices and other living communities. The sponsor for this transaction has seven additional non-crossed loans in the pool whose combined balance totals Debt Stack ($ million) just shy of $350.6 million, or about 23.7% of the entire trust balance. Loan proceeds of Trust Balance $52.7 approximately $52.7 million, along with a borrower equity contribution of $22.2 million, Pari Passu were used to finance the borrower’s acquisition of the subject in May 2019 for a total $0.0 purchase price of $74.9 million. The seven-year, fixed-rate loan is structured with an B-Note initial five-year IO period and amortizes on a 30-year basis thereafter. Based on the $0.0 property’s June 2019 appraised value of $76.4 million, the loan represents a 69.0% Mezz issuance LTV. $0.0 Total Debt Originally constructed in 2011, the collateral consists of 17 three-story buildings $52.7 developed as a LEED for Homes Silver certified community. Property-wide amenities Loan Purpose include a clubhouse, fitness center, spa, Internet cafe, community kitchen and a dog Acquisition park, as well as controlled gate access, lake/mountain views, fire pits and grilling Equity Contribution/ areas. The subject also features a lap pool complete with a sun deck and 523 parking (Distribution) ($ million) spaces (1.73 spaces per unit), some of which is carport and detached garage parking. $22.2 Units themselves include granite countertops, stainless steel appliance packages, LED lighting, washer/dryer units and patios/balconies. Select units also feature gas fireplaces and exterior storage closets. Recently completed capital improvements at the property include HVAC repairs, interior finish upgrades, fresh paint on the clubhouse/ leasing office and new seal coating and striping on the driving/parking areas of the

Structured Finance: CMBS 53 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

LAKE VISTA – LOVELAND, CO property. Additionally, the borrower plans to upgrade the flooring in 125 units as they turn, which is an investment of approximately $375,000. The unit mix at the subject is composed of 12 studios (averaging 583 sf ), 122 one-bedroom units (averaging 794 sf ), 143 two-bedroom units (averaging 996 sf ) and 26 three-bedroom units (averaging 1193 sf ). The property was 95.4% occupied per the rent roll dated May 2019. While occupancy at the subject has trended slightly downward, it has remained relatively stable overall, with vacancy rates ranging from 3.8% to 4.8% since 2017. Average monthly rental rates have increased from $1,365 to $1,464 (averaging roughly 3.0% annually) over the same time period.

COMPETITIVE SET

Property Location Distance from Subject Units Year Built/Renovated Occupancy

Eagle Ridge Apartments Loveland, CO 0.5 miles 168 1999 96.0%

Lincoln Place Apartments Loveland, CO 5.3 miles 200 2005 95.0%

Gallery Flats Loveland, CO 5.2 miles 66 2014 96.0%

Patina Flats at The Foundry Loveland, CO 6.2 miles 155 2018 81.0%

The Gateway At 2534 Johnstown, CO 2.2 miles 254 2015 93.0%

Rise At 2534 Johnstown, CO 2.2 miles 236 2019 0.0%

Bristol Pointe Loveland, CO 8.1 miles 220 2014 91.0%

Lake Vista Loveland, CO n/a 303 2011 95.4%

Source: Appraisal.

The appraisal identified seven competitive properties within an 8.1-mile radius of the collateral. Nearly all of the properties exhibit similar stabilized occupancy levels to the subject, ranging from 91.0% to 96.0%. (Rise At 2534 and Patina Flats at The Foundry’s occupancy levels vary because Rise At 2534 is still under development and Patina Flats recently completed construction). Despite the vintages ranging from 1999–2019, rents did not seem to correlate with this factor. Instead, while rents on properties closest to the subject were fairly comparable, properties closer to downtown Loveland appeared to attain a slight premium.

The collateral is located in the greater Fort Collins-Loveland MSA. Reis reported an average asking rent and vacancy rate of $1,221 and 8.0%, respectively, for Fort Collins as of Q1 2019. However, properties of similar vintage to the collateral (i.e., properties constructed after 2009) exhibited higher average asking rents at $1,535 and a significantly wider vacancy rate of 15.1%. Reis predicts asking rents to grow 3.0% over the next five years on an annualized basis, which is approximately 20 basis points greater than its national forecast over the same period.

Structured Finance: CMBS 54 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

LAKE VISTA – LOVELAND, CO

DBRS ANALYSIS SITE INSPECTION SUMMARY

DBRS toured the interior and exterior of the property on Monday, August 12, 2019, at approximately 11:30 a.m. Based on the site inspection and management meeting, DBRS found the property quality to be Average.

The collateral is situated along Rocky Mountain Avenue approximately 50.0 miles north of Downtown Denver and 15.0 miles south of Downtown Fort Collins in Loveland, Colorado. Per management, the collateral’s location generally attracts renters seeking proximity to Fort Collins but at a more affordable cost of living. Management indicated that a revitalization of the Downtown Loveland area, located approximately six miles west, has additionally spurred demand within the subject’s area in recent years. The property benefits from propinquity to several regional arterial roadways, including I-25, a primary north-south regional thoroughfare, and State Route 34, a regional east-west roadway. The collateral did not appear to benefit from visibility along either I-35 or State Route 34 but nonetheless exhibited generally favorable curb appeal at the time of DBRS’s inspection. The subject bounds Long Pine Park, offering lake views to select units as well as walking-path access to community residents. The property’s immediate surrounding area featured a blend of commercial and residential land uses, including a directly adjacent multifamily community of similar exterior appeal and the UCHealth Medical Center of the Rockies. The complex additionally appeared to benefit from a wealth of walkable retail and restaurant offerings, most of which were concentrated along State Route 34 less than a mile south. DBRS noted an abundance of vacant land parcels and seemingly new commercial and multifamily developments within proximity of the collateral at the time of inspection. Per management, the observation was representative of current market trends, as the surrounding area has exhibited significant growth and development in recent years.

Per management, the collateral was 98.7% occupied with concessions being offered in the form of reduced admin and application fees at the time of DBRS’s inspection. Management identified the subject’s primary competitors to be The Gateway at 2534 Apartments and Greens at Van De Water. Management identified several new multifamily and commercial property deliveries within proximity of the subject, further evidencing the growth-driven developmental trend exhibited in recent years throughout the collateral’s local area.

The collateral totals 303 units and comprises 17 three-story, garden-style buildings, which generally feature attractively colored wood-panel exterior facades accentuated by darker wood trim work, stone veneer work and pitched shingle roofing. The property features an on-site leasing and management office that doubles as a resident clubhouse and is complete with a game room, movie theatre, Internet cafe, fitness center, community kitchen and conference room. Additional common amenities spread intermittently throughout the property include a grilling area, outdoor fire pits, a community garden, a

Structured Finance: CMBS 55 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

LAKE VISTA – LOVELAND, CO dog park, covered parking and a lap pool. The subject offers a variety of unit types ranging from studios to three bedrooms, which generally showed well and featured granite countertops, a mix of carpet and vinyl-plank flooring, wood cabinetry, full size washer and dryer units and a private patio or balcony area. Select units additionally featured loft-style layouts and/or lake views of the adjacent Lake Pine Park. The property featured an abundance of well-manicured landscaping, and the parking area exhibited minimal signs of deferred maintenance. Overall, DBRS found the property to be generally well maintained at the time of inspection.

DBRS NCF SUMMARY

NCF ANALYSIS

2017 2018 T-12 April 2019 Issuer NCF DBRS NCF NCF Variance

GPR $4,964,631 $5,174,805 $5,268,503 $5,322,012 $5,322,012 0.0%

Other Income $616,802 $603,177 $619,934 $619,934 $619,934 0.0%

Vacancy & Concessions -$188,524 -$259,069 -$279,833 -$350,880 -$356,314 1.5%

EGI $5,392,909 $5,518,913 $5,608,605 $5,591,066 $5,585,633 -0.1%

Expenses $1,968,555 $1,851,555 $1,871,201 $1,879,311 $1,989,697 5.9%

NOI $3,424,354 $3,667,358 $3,737,404 $3,711,755 $3,595,936 -3.1%

Capex $0 $0 $0 $0 $0 0.0%

NCF $3,424,354 $3,667,358 $3,737,404 $3,711,755 $3,595,936 -3.1%

The DBRS NCF is based on the DBRS North American Commercial Real Property Analysis Criteria. The resulting DBRS NCF was $3,595,936, representing a -3.1% variance from the Issuer’s NCF of $3,711,755. The primary drivers of the variance were operating expenses. DBRS generally inflated operating expenses by 3.0% over the T-12 period ending April 30, 2019. By contrast, the Issuer generally based operating expenses on the borrower’s budgeted forecast. The resulting DBRS expense ratio of 33.9% was generally in line with identified market comparables, which exhibited a median expense ratio of 34.2%.

DBRS VIEWPOINT The collateral for this transaction is generally well located within a developing submarket of Fort Collins and benefits from proximity to several nearby market drivers, including Downtown Loveland, Downtown Fort Collins and the I-25. However, the collateral’s submarket is generally considered to be a secondary market and has experienced a relatively drastic influx of new supply in recent years, as evidenced by a Reis-reported 43.0% of submarket inventory having been constructed after 2009 as of Q2 2019. DBRS noted several vacant lots within proximity of the collateral at the time of inspection, and Reis further forecasts submarket vacancy rates to rise as high as 9.6% through year-end 2023. Fortunately, the collateral has exhibited occupancy rates in excess of 95.0% since 2017. Based on the DBRS NCF, the loan has a relatively high non-amortizing issuance DSCR of 1.95x . With the expiration of the loan’s initial five-year interest period, the DBRS DSCR would fall to 1.27x based on the current DBRS NCF. DBRS NCF assumptions imply a break-even occupancy of approximately 78.5% upon expiration of the loan’s partial IO term. The transaction additionally benefits from strong repeat sponsorship that has executed 86 loans valued in excess of $3.3 billion since 2011. Furthermore, the loan is scheduled to amortize approximately 3.8% over the loan term, moderately minimizing risk of default at maturity.

DOWNSIDE RISKS –– The loan is partial IO, as it is structured with an initial five-year IO period. –– The transaction represents moderately high leverage financing, as is evidenced by the relatively high loan-to-purchase- price of 70.4%.

Structured Finance: CMBS 56 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

LAKE VISTA – LOVELAND, CO

STABILIZING FACTORS –– Based on the DBRS NCF, the loan exhibits an amortizing break-even vacancy rate of approximately 21.5%, which is more than double the Reis-forecasted submarket vacancy rate of 9.6% for year-end 2023 and would effectively provide for sufficient coverage upon expiration of the initial IO period and commencement of the transaction’s amortizing payment schedule. –– The transaction benefits from strong, experienced sponsorship, and the borrower contributed nearly $22.2 million to the transaction as part of the acquisition, evidencing commitment to the property’s performance.

Structured Finance: CMBS 57 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Providence Trail Apartment Homes Mount Juliet, TN

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $48.0 Loan psf/Unit $143,563 Percentage of the Pool 3.2% Loan Maturity/ARD July 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built/Renovated 2007/2015-2019 Issuance DSCR City, State Mt. Juliet, TN Physical Occupancy 93.1% 1.24x Units 334 Physical Occupancy Date June 2019 Issuance LTV 68.4% This loan is secured by the borrower’s fee simple interest in a 334-unit garden-style Balloon LTV 61.5% Class B apartment complex in Mount Juliet, Tennessee. Situated on a 22.73-acre site, DBRS Property Type improvements consist of 24 three-story apartment buildings that were constructed in Multifamily 2007 and partially renovated between 2015 and 2019. As of the June 6, 2019, rent roll, the DBRS Property Quality property was 93.1% occupied. Loan proceeds of $48.0 million, along with $20.6 million Average of equity from the sponsor, were used to acquire the property for $68.5 million, fund upfront reserves and cover closing costs. The seven-year loan is structured with an Debt Stack ($ million) initial two-year IO period, amortizing on a 30-year schedule thereafter. Trust Balance $48.0 Pari Passu Property-wide amenities include a fitness center, a business center, a clubhouse/ $0.0 leasing office, a games room with a pool table and shuffleboard table, two swimming B-Note pools, a car wash, a children’s playground, grilling stations, electronic gated access, $0.0 attached and detached garages and covered parking. The property’s apartment unit Mezz mix consists of 46 one-bedroom units (859 sf ); 240 two-bedroom units (1,067 sf ); and $8.4 48 three-bedroom units (1,271 sf ), which are slightly smaller than properties within its Total Debt competitive set but generally in line with the overall submarket. Units are equipped $56.3 with standard appliance packages, nine-foot ceilings with a ceiling fans, full-size Loan Purpose washer/dryer units and a private patio or balcony. Select units also feature a kitchen Acquisition island. According to the June 2019 rent roll, the one bedrooms have an average rental Equity Contribution/ rate of $1,108; two bedrooms average $1,192; and three bedrooms average $1,434. The (Distribution) ($ million) property’s average rent of $1,208 per unit is above market compared with the Reis $20.6 submarket average of $1,111 per unit as of Q2 2019; however, the property achieves lower rents than properties of similar vintage, which reported an average rent of $1,390 per unit during the same period. The subject’s physical vacancy rate of 6.9% is higher than the Reis submarket rate and the submarket by construction vintage cohort vacancy rate of 4.4% and 6.4%, respectively.

Structured Finance: CMBS 58 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

PROVIDENCE TRAIL APARTMENT HOMES – MOUNT JULIET, TN

Overall, the property has undergone $1,570,000 in interior and exterior renovations. Between 2015 and 2019, the previous owner of the property completed various renovations, including plumbing fixtures, cabinets, microwave vent hoods, wine rack installation, flooring, appliances, granite countertops in the kitchens and bathrooms, backsplashes, paint, lights and HVAC. Common-area upgrades included the addition of an outdoor kitchen, a dog park and children’s playground; resurfacing of pool liners; and resealing of parking lots. Approximately 75 units have been completely renovated with upgraded finishes and appliances. The seller reported premiums ranging between $25.00 and $130 per unit, depending on the scope of the renovation.

Mount Juliet is the fastest-growing submarket in Nashville, with 19.6% population growth over the last five years, per the appraisal. Within a 5.0-mile radius of the property, the population has grown over 31.0% over the past eight years and is expected to grow over 16.0% by 2023. Additionally, the property benefits from its location in a middle- to upper- middle-class area with a median household income of $77,802 within a 5.0-mile radius. While the appraisal does not note new supply coming to the market, Reis reports 866 units coming to the market between 2021 and 2023. The appraisal identified seven multifamily properties in the local market that compete with the subject. For more information, please refer to the table below.

COMPETITIVE SET

Distance Avg. Rental from Year Built/ Rate Per Avg. Unit Property Location Subject Units Renovated Occupancy Unit Size (SF)

Deerfield At Providence Phase I & II Mt. Juliet, TN 0.4 miles 462 2015 94.0% $1,412 1,234

LC Mount Juliet Mt. Juliet, TN 0.8 miles 451 2017 98.0% $1,456 1,056

Meridian At Providence Mt. Juliet, TN 0.3 miles 223 2018 97.0% $1,431 1,197

Creekside At Providence Mt. Juliet, TN 1.0 miles 209 2016 96.0% $1,493 1,284

Glass Creek Apartments Mt. Juliet, TN 2.0 miles 360 2016 98.0% $1,348 1,076

Canyon Ridge Hermitage, TN 6.7 miles 350 2005 94.0% $1,258 1,038

Hartmann Plantation Lebanon, TN 12.9 miles 300 2011 97.0% $1,153 1,175

Total/Wtd. Avg. Comp. Set Various, TN Various 2,355 Various 96.2% $1,364 1,140

2007/2015- Subject Mt. Juliet, TN n/a 334 93.1% $1,208 1,068 2019

Source: Appraisal, except the Subject figures are based on the rent roll dated June 06, 2019.

SPONSORSHIP The sponsor is a national real estate investment firm headquartered in Manhattan, New York. The sponsor has a total of 534 apartment units and a total loan value of $77,210,000. The sponsor’s principals have an average of 25 years of experience in investing and have been involved over 35.0 million sf of real estate acquisition with approximately $10.0 billion in value. The sponsors are also repeat borrowers, having closed 24 loans since 2009. Property management is overseen by a third- party management company that holds a portfolio of 181 multifamily properties encompassing 50,000 units in 13 states and the District of Columbia, of which 1,083 units are managed locally in the Nashville MSA. The company operates at the property for a contractual management fee of 2.5% EGI.

Structured Finance: CMBS 59 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

PROVIDENCE TRAIL APARTMENT HOMES – MOUNT JULIET, TN

DBRS ANALYSIS SITE INSPECTION SUMMARY Based on the DBRS site inspection and management meeting conducted on August 14, 2019, DBRS found the property quality to be Average.

The property is located along Aventura Drive, approximately 18.0 miles northeast of the Nashville CBD. The property has good accessibility to the eastern portion of the MSA, as the property is located approximately 1.3 miles south of the intersection of I-40 and Mount Juliet Road and is 3.5 miles south of the Mount Juliet train station. I-40 is a major regional artery that connects the area to downtown Nashville, and Mount Juliet Road is a major local thoroughfare. The immediate area surrounding the subject is predominantly residential neighborhoods, multifamily complexes, retail developments along Mount Juliet Road and large batches of vacant land. To the east, the property is bordered by Providence Market Place Shopping Center anchored by Target, a Kroger grocery store, Best Buy, Dick’s Sporting Goods, TJ Maxx, JCPenney, Regal Providence movie theater, Belk, PetSmart, Staples, Ross Dress for Less and Joann Fabrics. To the north, the property is bordered by a senior living community, a condominium neighborhood to the east and a competing multifamily community to the south.

The 24 apartment buildings are scattered throughout the property and are predominately built around four courtyards. The buildings are constructed on a wood frame with cement fiberboard siding with faux stone accents and wood trim components. All units are accessible via exterior covered entrances and have either a patio or a balcony. Upon entering the property, one is welcomed by a large clubhouse flanked by two electric gated entrances. The clubhouse was in good condition and modern, with abundant sunlight coming through its large windows. The clubhouse features a game room, a mini bar with granite countertops, a fitness center, a coffee bar, a business center and a leasing office. The clubhouse swimming pool is the main pool at the property and features two covered cabanas with grills and a firepit. The dog park, the secondary swimming pool, the children’s playground and the car-cleaning station are located at the rear of the property. The property has ample parking throughout the property with 662 parking spaces across 23 garages, four carports and surface parking. Parking lots appeared to be in average-to-good condition with some deferred maintenance noted with the garage doors. DBRS was only able to tour the model unit due to issues with two of the vacant units. The model unit was spacious and had received a full renovation. Approximately 75 units have been renovated and typically included a gray color scheme, black appliances, granite countertops, dark laminate cabinets, farmhouse sinks, wine racks, updated backsplashes and wood plank flooring. Non-renovated units have a crème color scheme, laminate countertops, light laminate countertops and standard sinks. Per management, ownership is discussing plans to slowly renovate the remaining units but is still in the design phase and is aiming to complete eight units per month, estimated to start near the end of the year or the beginning of 2020.

Structured Finance: CMBS 60 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

PROVIDENCE TRAIL APARTMENT HOMES – MOUNT JULIET, TN

After acquiring the asset, nearly the entire management team turned over, except for the leasing consultant. At the time of the DBRS site inspection, the property was 97.6% occupied and was currently not offering concessions, which was typical of the market. Management is contemplating using a lease rent optimizer system in the future; however, market rent adjustments are made in-house for the time being. Management was just able to push a rental increase of $85.00 per unit within the past 30 days on new leases with no push back and has been able to increase renewals by roughly $50.00 per unit. Management noted the property primarily competes with Deerfield Apartments, located across the street. Management noted the subject is a superior product despite being eight years older than Deerfield Apartments and has better overall service, noting the hassle-free living at the collateral. In addition, Deerfield Apartments has a higher price point as it is a newer property. From the exterior, Deerfield Apartments was similar in appeal and condition to the collateral. While the property has good accessibility to economic drivers and employers in the Nashville MSA, the property has a high concentration of residents employed at Deloitte, which represents approximately 30.0% of the residents, per management. There are a large number of new multifamily developments underway in the Nashville market; the property manager noted that there were none taking place in the immediate area.

DBRS NCF SUMMARY

NCF ANALYSIS

NCF 2016 2017 2018 T-12 May 2019 Issuer NCF DBRS NCF Variance

GPR $4,600,845 $4,773,538 $4,778,270 $4,786,985 $4,841,508 $4,841,508 0.0%

Other Income $700,998 $799,996 $780,941 $820,942 $820,942 $820,942 0.0%

Vacancy & Concessions -$304,052 -$362,915 -$278,228 -$294,866 -$348,408 -$349,389 0.3%

EGI $4,997,792 $5,210,619 $5,280,983 $5,313,062 $5,314,042 $5,313,061 0.0%

Expenses $1,728,176 $1,757,446 $1,792,200 $1,808,401 $1,936,509 $2,101,054 8.5%

NOI $3,269,616 $3,453,173 $3,488,783 $3,504,661 $3,377,534 $3,212,007 -4.9%

Capex $0 $0 $0 $0 $0 $0 0.0%

NCF $3,269,616 $3,453,173 $3,488,783 $3,504,661 $3,377,534 $3,212,007 -4.9%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF was $3,212,007, a variance of -4.9% from the Issuer’s NCF. The main driver of the variance is operating expenses and real estate taxes. DBRS based operating expenses on the borrower’s 2019 budget and real estate taxes on the average appraised assessed value of the tax comparables. The Issuer generally based operating expenses on the T-12 ending May 31, 2019, level and the borrower’s budget and taxes on the 2018 taxable value inflated by 3.0%. The resulting DBRS expense ratio of 37.7% is in line with historicals; however, it is well below DBRS’s expense comparables, with a median ratio of 48.1% and the Reis submarket of 43.8%.

DBRS VIEWPOINT The collateral is located in one of the fastest-growing Nashville submarkets with convenient access to major arteries and the Nashville CBD. The subject’s submarket exhibits strong fundamentals with an average vacancy rate of 4.4% for multifamily properties, according to Reis. The average rental rates at the property of $1,208 per unit is above market compared with the submarket average of $1,111 per Reis but still lags the appraiser’s competitive set at $1,364 per unit, which is largely due to the property being one of the oldest in the competitive set. While the seller has spent $1.6 million on renovations since 2015, only 75 of the 334 units have received a full renovation, leaving the remaining units to be dated, compared with the newer properties in the competitive set, as these units have received minimal improvements since first being built. While the sponsor plans to inject equity into the property to continue the renovations, the benefits will not be realized until several years into the loan term. The loan represents moderate leveraged financing with an issuance

Structured Finance: CMBS 61 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

PROVIDENCE TRAIL APARTMENT HOMES – MOUNT JULIET, TN

LTV of 68.4% but amortizes down to a balloon LTV of 61.5% even with two years of IO. While the LTV indicates moderate leverage, the loan per unit of $143,563 indicates higher leverage when compared with the sales comparables within a 10.0-mile radius from the subject, which have an average sales price of $118,993 per unit over the past two years across seven transactions, per Real Capital Analytics.

DOWNSIDE RISKS –– The Nashville MSA has experienced considerable economic and population growth in the past decade, which has led to an influx of new multifamily development. According to Reis, the Donelson/Hermitage submarket apartment inventory is forecast to grow at an average of 1.8% annually through 2023, increasing vacancy to 5.8% in 2023 from 4.0% as at YE2019.

STABILIZING FACTORS –– The collateral is a Class B asset that will not directly compete with the new multifamily development, which is mostly Class A and commands much higher rents. Moreover, the Nashville MSA is forecast to grow at an annual rate of 1.7% through 2023, increasing the total population to 2.1 million from 1.9 million. This is expected to result in positive absorption of new multifamily units. Based on the DBRS NCF and occupancy level of 92.9%, the property has a 12.9% buffer from the 80.0% break-even occupancy, which would reflect a vacancy level substantially higher than Reis submarket levels projected over the next five years, as well as a submarket recessionary high of 10.3%. Rents are projected to have an average annual increase of 3.6% over the same period, which are not being accounted for in the DBRS NCF. –– The loan sponsor contributed $20.6 million of cash equity to the acquisition of the property, representing 30.0% of the total purchase price, and has a robust net worth relative to the loan amount.

Structured Finance: CMBS 62 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Fairways On Green Valley Homes Henderson, NV

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $43.8 Loan psf/Unit $136,875 Percentage of the Pool 3.0% Loan Maturity/ARD July 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built/Renovated 1990/2018 Issuance DSCR City, State Henderson, NV Physical Occupancy 95.9% 1.26x Units 320 Physical Occupancy Date August 2019 Issuance LTV 70.0% Balloon LTV The loan is secured by the borrower’s fee simple interest in Fairways on Green Valley, 66.0% a 320-unit multifamily property located in Henderson, Nevada. Loan proceeds of $43.8 DBRS Property Type million, along with borrower equity of approximately $17.7 million, will cover the Multifamily purchase price of $61.5 million and fund upfront reserves that include $363,768 for DBRS Property Quality deferred maintenance and $792,404 for planned renovations at the subject. The seven- Average year loan is IO for the first four years and amortizes on a 30-year scheduled thereafter.

Debt Stack ($ million) The collateral consists of a 320-unit 39-building multifamily complex located in Trust Balance $43.8 Henderson. Built in 1990 and most recently renovated by the previous owner in 2018, Pari Passu the property was 95.9% occupied at the time of inspection. Property-wide amenities $0.0 include a clubhouse, a business center, a games room, a fitness room, a yoga room, B-Note two pools, a basketball court, a soccer field, a volleyball court and a dog park. Units $0.0 are equipped with stainless steel appliances, faux-wood flooring and a private patio/ Mezz balcony. Renovations completed in 2018 by the previous owner included exterior $0.0 painting, parking lot repairs, clubhouse upgrades, a new soccer field and a dog park Total Debt area as well as interior upgrades in approximately 263 units. The sponsor plans to $43.8 spend an additional $5.9 million ($18,289/unit) to continue interior unit renovations, Loan Purpose upgrade common area amenities and repair roofing throughout the property, among Acquisition other capital improvements. Equity Contribution/ (Distribution) ($ million) $17.7

Structured Finance: CMBS 63 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

FAIRWAYS ON GREEN VALLEY – HENDERSON, NV

The unit mix at the subject consists of 144 one-bedroom units (725 sf ) and 176 two-bedroom units (1,035 sf ). According to the May 2019 rent roll, these unit types have an average monthly rental rate of approximately $1,040 and $1,242, respectively. The appraisal identified six competitive multifamily properties in the collateral’s local market. Average monthly rents at these properties ranged from $798 to $964 for one-bedroom units and from $975 to $1,471 for two- bedroom units. For more information, please refer to the table below.

COMPETITIVE SET

Property Distance from Subject Units Year Built/Renovated Occupancy

The Invitational 0.1 miles 184 1990 95.0%

Crossings At Green Valley 1.3 miles 384 1986 98.0%

Pacific Islands Apartments 1.0 miles 352 1992 96.0%

Aviata 2.4 miles 456 1997 98.0%

Mirsasol Apartments 2.5 miles 400 1996 93.0%

Miro Parc 1.9 miles 164 2013 93.0%

Fairways on Green Valley n/a 320 1990/2018 95.9%

SPONSORSHIP The sponsor for the loan is a private real estate investment firm focused on multifamily properties. The firm has invested upward of $1.7 billion in equity across 134 transactions totaling 48,000 multifamily units. The sponsor has closed 29 Freddie Mac loans totaling upward of $1.5 billion with no performance issues. The property is managed by a borrower- affiliate company at a contractual fee of 3.75% of EGI.

DBRS ANALYSIS SITE INSPECTION SUMMARY

DBRS toured the interior and exterior of the property on August 8, 2019, at approximately 10:30 a.m. Based on the site inspection and management tour, DBRS found the property quality to be Average.

The collateral is located in a suburban neighborhood within the Las Vegas MSA, approximately 10.0 miles southeast of the downtown Las Vegas. Positioned within the Green Valley master-planned community, the subject’s surrounding

Structured Finance: CMBS 64 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

FAIRWAYS ON GREEN VALLEY – HENDERSON, NV area is heavily concentrated with multifamily and single-family communities. Immediate land uses include single-family homes to the west and a golf course in all other directions. The closest retail offerings are located approximately 1.0 miles south of the property and include essentials such as two grocery store options and a variety of restaurants. According to management, McCarran International Airport is a large demand driver, as there is a noticeable amount of pilots living at the property and it is located approximately 9.0 miles northwest of the collateral.

The complex had a gated entrance followed by an interior road that setback the apartment buildings from the frontage of the property. The site had a circular configuration with 28 residential buildings lining the perimeter, while the remaining 11 residential buildings, clubhouse and other common-area amenities were situated in the middle infill section of the property. With the exception of one 16-unit double-building, all of the two-story apartment buildings featured eight units each. All first-floor units had enclosed patios, while second-floor units featured balconies. Many of the outward-facing patios and balconies overlooked the golf course running along three sides of the site. Building exteriors were in good condition due to recent renovations and consisted of a stucco finish with a white-and-gray color scheme. Covered parking spaces accounted for approximately 50.0% of the property’s 612 parking spaces, and there is one covered parking space designated for each unit, while the remaining surface spaces are for visitors.

The clubhouse featured a ground floor and basement level. Positioned at the entrance of the clubhouse, the main clubroom felt very large, as it had heightened ceilings and included a long sectional sofa, a fireplace, televisions, two desktop computers and plenty of open floor space, which is beneficial as the room can be reserved for private events. A private yoga room was also situated on the ground floor and positioned looking out toward the pool area. Management noted that adding a new fitness center adjacent to the yoga room is being considered, which would replace a room currently being used as storage. Located on the basement level of the clubhouse, the games room featured a bar area with three televisions and an array of table games such as billiards, bubble hockey and foosball. This area also had a racquetball court and indoor basketball court in two adjacent rooms. Management noted that these courts have minimal usage and converting the spaces into an indoor golf simulator room is being explored. The main pool was located behind the clubhouse and featured a fountain design in the middle of the pool, a hot tub, ample seating with umbrellas and shaded lounge areas. The remaining common-area amenities extend through the center of the property, such as a small turf soccer arena, dog park, secondary pool and fitness center. The fitness center was equipped with an array of modern equipment and displayed good usage at the time of inspection.

DBRS was able to tour a model unit and a vacant two-bedroom unit. Kitchens were upgraded with stainless steel appliances and granite countertops. The model unit had dark wood cabinetry, while the two vacant units had new white cabinetry. Each unit had an extension to the kitchen suitable for a small dining room. Units were upgraded with new faux-wood flooring in the common spaces and bathrooms. The living room area was well spaced and included a fireplace. Management noted plans to upgrade the granite border around the fire places to a design that is currently in approximately 40 units. The living room had strong natural lighting as the balcony overlooked the golf course. Bedrooms had plenty of space, new carpet flooring, new light fixtures and a large walk-in closet. The bathrooms had faux-wood flooring, granite countertops and an oversized bathtub. A small closet with a stackable washer and dryer was positioned outside of the bedrooms.

Structured Finance: CMBS 65 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

FAIRWAYS ON GREEN VALLEY – HENDERSON, NV

DBRS NCF SUMMARY

NCF ANALYSIS

T-12 NCF 2016 2017 2018 May 2019 Issuer NCF DBRS NCF Variance

GPR $3,797,848 $3,977,127 $4,241,298 $4,345,928 $4,420,104 $4,420,104 0.0%

Other Income $660,928 $757,572 $784,105 $797,806 $802,767 $797,806 -0.6%

Vacancy & Concessions -$485,168 -$344,855 -$226,733 -$231,849 -$281,929 -$317,479 12.6%

EGI $3,973,608 $4,389,845 $4,798,670 $4,911,885 $4,940,942 $4,900,431 -0.8%

Expenses $1,491,839 $1,638,196 $1,663,312 $1,662,827 $1,867,394 $1,891,820 1.3%

NOI $2,481,769 $2,751,648 $3,135,358 $3,249,058 $3,073,549 $3,008,611 -2.1%

Capex $0 $0 $0 $0 $0 $0 0.0%

NCF $2,481,769 $2,751,648 $3,135,358 $3,249,058 $3,073,549 $3,008,611 -2.1%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting NCF was $3,008,611 a variance of -2.1% from the Issuer’s NCF of $3,073,549. The primary drivers of the variance were management fee and vacancy. DBRS assumed a management fee of 4.0% EGI. While the Issuer assumed a vacancy of 5.0%, DBRS assumed a vacancy of 5.5%.

DBRS VIEWPOINT The collateral is located within the Green Valley master-planned community in Henderson. Situated approximately 10.0 miles southeast of downtown Las Vegas, this area was formerly an industrial center that was transformed into a large residential corridor. Two malls located within 5.0 miles of the collateral, the hospitality and gaming industry and the numerous remaining industrial and business parks in the submarket provide strong employment demand generators for the property and its surrounding communities. The subject demonstrates these strong market fundamentals, as it was approximately 95.9% occupied at the time of inspection, which is in line with the appraisal and Reis submarket vacancy rates of 5.0% and 4.5%, respectively. Further, the property’s average rental rate of approximately $1,151 per month exceeds the Reis submarket average by construction vintage of $1,114 per month. According to the appraisal, a moderate amount of new supply totaling approximately 1,261 units will be added to the Green Valley submarket over the next five years. While this is naturally a threat to the collateral, the property has been adequately maintained over the years and the sponsor has budgeted an additional $2,937,566 ($9,180/unit) for property-wide improvements and $2,915,140 ($10,337/unit) for unit renovations. This investment in capital improvements should allow the property to maintain its competitive position as a Class B offering in the submarket. However, the loan does have a low DBRS DSCR of 1.26x. If the renovations are successful and result in rent premiums over in-place rents, this risk would be mitigated to a degree.

DOWNSIDE RISKS –– The loan is structured with an initial four-year IO period and has a relatively high DBRS Issuance LTV of 70.0%.

STABILIZNG FACTORS –– The loan benefits from some amortization and has a DBRS Balloon LTV of 66.0%. The sponsor has invested $17.7 million of cash equity into the acquisition. Further, the sponsor has budgeted $2,937,566 ($9,180/unit) for property-wide improvements and $2,915,140 ($10,337/unit) for unit renovations. If renovations are able to achieve rent increases, the loan’s DSCR should increase accordingly.

Structured Finance: CMBS 66 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Vintage Pointe Las Vegas, NV

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $37.7 Loan psf/Unit $102,446 Percentage of the Pool 2.5% Loan Maturity/ARD June 2026 COLLATERAL SUMMARY Amortization n/a DBRS Property Type Multifamily Year Built/Renovated 1993 / 2016 Issuance DSCR City, State Las Vegas, NV Physical Occupancy 95.4% 1.78x Units 368 Physical Occupancy Date April 2019 Issuance LTV 65.0% Balloon LTV The loan is secured by the borrower’s fee simple interest in a 368-unit multifamily 65.0% property located in Las Vegas. The sponsor acquired the subject in May 2019 for a DBRS Property Type purchase price of $58.0 million. Loan proceeds of $37.7 million and $20.3 million of Multifamily sponsor cash equity facilitated the acquisition. DBRS Property Quality Average Built between 1993 and 1994 and renovated between 2016 and 2018, the collateral reported occupancy of 95.4% as of the April 2019 rent roll. Situated on a 17.1-acre Debt Stack ($ million) site, property-wide amenities include swimming pools, barbecue areas, a fitness Trust Balance $37.7 center, a business center, a racquetball court, a games area and cybercafe. The unit Pari Passu breakdown consists of 168 one-bedroom units averaging 814 sf and 200 two-bedroom $0.0 units averaging 1,117 sf, which are generally larger than units at comparable properties B-Note in the surrounding area. Units are equipped with an in-unit washer/dryer, standard $0.0 kitchen appliances, a fireplace and a patio/balcony. According to the most recent rent Mezz roll, the one-bedroom units have an average monthly rental rate of $860, and the two- $0.0 bedroom units have an average monthly rental rate of $1,016. Total Debt $37.7 Prior to the sponsor’s acquisition of the subject property, the previous owner had Loan Purpose invested over $2.0 million in interior and exterior renovations over the past 12 months. Acquisition Renovations consisted of exterior painting, roof maintenance, clubhouse renovations, Equity Contribution/ security camera installation in the fitness center and leasing office, new light fixtures (Distribution) ($ million) for the swimming pool area and renovation of outdoor game and barbecue areas. $20.3 Additionally, 159 units were renovated, including new vinyl plank flooring in 78 units, upgraded appliances, countertop resurfacing, repainting cabinets and upgrading appliances. In addition to renovations from the previous owner, the sponsor plans to invest approximately $1.3 million in order to complete further renovations to 184 units, equal to a preliminary budget of approximately $7,000 per unit.

Structured Finance: CMBS 67 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

VINTAGE POINTE – LAS VEGAS, NV

Reis submarket data reveals that the property’s occupancy and rental rates are lagging the rest of the submarket. According to the April 2019 rent roll, the property was 95.4% occupied and achieved an average rental rate of $934 per unit. These figures indicate that the property’s vacancy rate of 4.6% and rental rates are underperforming the rest of the market, which the Reis Q2 2019 report concludes is 2.6% and $1,058, respectively.

The appraisal identified five multifamily properties in the local market that directly compete with the subject. For more information, please refer to the table below.

COMPETITIVE SET

Property Location Distance from Subject Units Year Built/Renovated Occupancy

Calypso Apartments Las Vegas, NV 0.2 miles 360 1997 / 2017 96.9%

20 Fifty One Apartments Las Vegas, NV 0.6 miles 208 1997 / 2018 98.1%

Villas at 6300 Las Vegas, NV 0.6 miles 280 2017 97.9%

Kaleidoscope Apartments Las Vegas, NV 1.2 miles 208 1998 / 2017 95.7%

St. Lucia Apartments Las Vegas, NV 1.0 miles 440 2000 92.7%

Vintage Pointe Las Vegas, NV n/a 368 1993 / 2016 95.4%

Source: Appraisal.

SPONSORSHIP The sponsor for the loan is a collection of organizations, including an investment-grade asset manager specializing in commercial real estate and affiliates who specialize in owning and operating multifamily properties. The sponsors are repeat Freddie Mac borrowers and have performed all loans as agreed. No litigation issues have been reported. Property management is provided by a borrower-affiliated management company, which manages approximately 175,000 multifamily units across 250 cities located in the United States, Canada and Asia.

DBRS ANALYSIS SITE INSPECTION SUMMARY

DBRS toured the interior and exterior of the property on August 9, 2019, at 11:00 a.m. Based on the site inspection, DBRS found the property to be Average.

Structured Finance: CMBS 68 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

VINTAGE POINTE – LAS VEGAS, NV

The subject property is located in a suburban area along Vegas Drive, a thoroughfare connecting Summerlin, Nevada, and North Las Vegas, Nevada, approximately 8.0 miles west of the Las Vegas CBD. The property is located near U.S. Route 95, which provides easy access to both Downtown Las Vegas and the Las Vegas Strip via I-15. The immediate area predominately consists of residential neighborhoods and multifamily communities with commercial development along primary thoroughfares. Rocksprings Plaza and Best in the West Shopping Center lay to the north and contain retail tenants such as Chipotle Mexican Grill, Panera Bread and Verizon Wireless (Rocksprings Plaza) as well as Best Buy, TJ Maxx, Marshall’s and Bed Bath & Beyond (Best in the West Shopping center). The Las Vegas Strip and McCarran International Airport are well within a short driving distance and are major economic drivers for the submarket.

The property’s entrance leads through a gate and guardhouse directly to an on-site leasing office that doubles as a community clubhouse, featuring amenities such as a fitness center, a racquetball court, a games room, a lounge area, and a business center. Directly behind the clubhouse lay one of two property pools. The pool area was in good condition, and the pool furniture appeared to be recently purchased. Other common-area amenities included barbecue areas and gazebos.

According to the regional property manager, physical occupancy at the time of inspection was 94.3% and 95.7% of the space was leased. Additionally, the average turnover rate was approximately 10.9%, which was a result of the borrower increasing rental rates upon acquiring the property. The property manager noted that rental rates prior to acquisition were below market, and tenants considered leaving the property when rates were increased. However, many tenants eventually renewed leases when they discovered that rental rates at competitive properties were similar to the subject. The per-unit budget for unit renovations was approximately $7,000 for original units and $5,700 on partially renovated units, and the property manager noted that several units have been completed under budget. Units are being renovated as they rollover, and management expected partially renovated units to be completed in seven days and original units to be completed in 14 days. The manager also highlighted that he does not plan on offering any concessions in the future.

DBRS inspected several units, including a fully renovated model unit and partially renovated vacant units. Both fully renovated and partially renovated units were in good condition. Fully renovated units featured faux-wood flooring in the kitchen, living rooms and bathroom; carpet in the bedrooms; and laminate countertops, while the partially renovated unit had two-tone vinyl flooring. Management noted that they would be removing the two-tone vinyl flooring as units rolled over. All units featured walk-in closets and side-by-side in-unit washer and dryers; however, the property manager stressed that these would not be upgraded unless it became more expensive to continually repair older machines. Management noted that premiums of approximately $209 on average per unit were being achieved on the renovated units.

DBRS NCF SUMMARY

NCF ANALYSIS

T-12 March 2019 Issuer NCF DBRS NCF NCF Variance

GPR $4,122,672 $4,174,074 $4,148,628 -0.6%

Other Income $975,392 $975,392 $975,392 0.0%

Vacancy & Concessions -$490,116 -$410,051 -$493,815 20.4%

EGI $4,607,948 $4,739,415 $4,630,205 -2.3%

Expenses $1,940,736 $2,006,563 $2,145,013 6.9%

NOI $2,667,212 $2,732,852 $2,485,193 -9.1%

Capex $0 $0 $0 0.0%

NCF $2,667,212 $2,732,852 $2,485,193 -9.1%

Structured Finance: CMBS 69 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

VINTAGE POINTE – LAS VEGAS, NV

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF was $2,485,193, a -9.1% variance from the Issuer’s NCF.

The main drivers of the variance were vacancy and management fee. The Issuer applied an economic vacancy assumption of 7.5%, which resulted in a vacancy loss of $311,960. DBRS assumed a residential vacancy of 9.9% that is based on the T-12 vacancy rate for the period ending March 31, 2019, which resulted in a vacancy loss of $409,943. The resulting DBRS NRI was slightly better than the T-12 ending March 31, 2019, figure. Additionally, DBRS applied a management fee equal to 4.0% of the property’s EGI compared with the Issuer’s estimated management fee of 2.25%, based on the actual contract to a sponsor-affiliated management firm.

DBRS VIEWPOINT The collateral is a 368-unit multifamily property located in a suburban area north of Las Vegas. Originally constructed in 1993, the subject has been undergoing unit and common-area renovations since 2016, and the borrower plans to renovate all remaining units. The increased quality of units is evident in the units that have been renovated up to borrower standards. In addition to unit renovations, many common area amenities have been recently improved and showed nicely. According to the property manager, the subject has received premiums of approximately $209 per unit, and it is expected that future renovations will result in similar premiums. The hospitality, gaming and entertainment industries are significant employment drivers for the area, as well as the many hospitals and medical centers that reside in this area of the Las Vegas MSA. The property’s vacancy rate of 4.6% and monthly rental rate of approximately $934 are inferior to the Reis submarket average of 2.6% and $1,039, respectively, for buildings with the same vintage. These figures indicate that the property is being outperformed by other properties in the market; however, premiums from renovations could allow the property to perform more competitively in the market. Additionally, the property manager noted that the property was achieving below-market rents under prior management and that, when paired with renovation premiums, the collateral could achieve rents that are more in line with the submarket.

DOWNSIDE RISKS –– The loan has elevated refinance risk because the transaction is structured as IO over the full term.

STABILIZING FACTORS –– The sponsor invested $20.3 million of cash equity into the acquisition, representing 35.0% of the total purchase price. Additionally, the sponsor plans to renovate approximately 184 units with a preliminary budget of $7,000 per unit. This will further increase the sponsor’s equity in the property and should increase the collateral’s performance once renovations are complete.

Structured Finance: CMBS 70 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Stonegate Apartment Homes Las Vegas, NV

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $36.7 Loan psf/Unit $83,495 Percentage of the Pool 2.5% Loan Maturity/ARD June 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built/Renovated 1990 / 2017 Issuance DSCR City, State Las Vegas, NV Physical Occupancy 94.3% 1.21x Units 440 Physical Occupancy Date June 2019 Issuance LTV 73.8% Balloon LTV The loan is secured by the borrower’s fee simple interest in Stonegate Apartment 68.3% Homes, a 440-unit multifamily complex located in Las Vegas, Nevada. The property DBRS Property Type was acquired by the sponsor in May 2019 for a purchase price of $48.6 million. Loan Multifamily proceeds of approximately $36.7 million, along with borrower equity of $11.9 million, DBRS Property Quality will cover the $48.6 million purchase price. The seven-year loan is structured with an Average - initial three-year IO period and amortizes over a 30-year schedule thereafter.

Debt Stack ($ million) Constructed in 1990 and most recently renovated in 2017, the collateral reported Trust Balance $36.7 occupancy of 94.3% as of the April 2019 rent roll. The unit breakdown consists of Pari Passu 152 one-bedroom units averaging 729 sf and 288 two-bedroom units averaging 968 $0.0 sf¬, which are generally in line with unit sizes in the appraiser’s set of competitive B-Note properties. Unit interiors include fully equipped kitchens with appliances, in-unit $0.0 washers/dryers and patios/balconies. Select units feature upgraded kitchen appliances, Mezz walk-in closets, garden tubs, walk-in showers and fireplaces. According to the April $0.0 2019 rent roll, the one-bedroom units have an average monthly rental rate of $762 Total Debt and two-bedroom units have an average rental rate of $895. Property-wide amenities $36.7 include a clubhouse with a lounge area, a fitness center, a sports court, a playground, Loan Purpose a fenced dog park, security cameras, three swimming pools, a business center, gated Acquisition access and covered parking. Equity Contribution/ (Distribution) ($ million) The previous owner invested approximately $2.0 million ($4,553/unit) for property- $11.9 wide and interior unit renovations in 2017. Unit renovations featured new carpet and vinyl wood flooring, upgraded black and stainless-steel kitchen appliances, resurfacing countertops and two-tone painting. Common-area improvements included clubhouse renovations, an upgraded outdoor barbecue area, security cameras, exterior painting, pool upgrades, pool deck replacement, upgraded pool furniture and roof repairs.

Structured Finance: CMBS 71 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

STONEGATE APARTMENT HOMES – LAS VEGAS, NV

According to management, renovated units are currently achieving premiums between $55.00 and $125 per month. The sponsor plans to invest approximately $3.9 million ($8,772/unit) on capital improvements that would include upgrades to the fitness center, clubhouse, pool and spa area and unit upgrades such as upgraded countertops and cabinets, flooring, kitchen appliances and plumbing fixtures. Rent increases of approximately $133 per unit are expected once renovations are complete. Furthermore, the sponsor is budgeting an additional $1.1 million ($2,492/unit) for deferred maintenance, specifically installing new pipping in all buildings.

The appraisal identified six competitive properties in the local market. For more information, please refer to the table below.

COMPETITIVE SET

Property Location Distance from Subject Units Year Built/Renovated Occupancy

Viridian Palms Las Vegas, NV 0.2 miles 352 1990 92.0%

Five 89 Apartments Las Vegas, NV 0.5 miles 312 1983 93.0%

The Boulevard Las Vegas, NV 0.5 miles 296 1998 94.0%

Pacific Harbors at Sunrise Las Vegas, NV 0.7 miles 168 1986 98.0%

The Hamptons Las Vegas, NV 0.7 miles 492 1988 94.0%

Oasis Meadows Las Vegas, NV 0.7 miles 383 1996 93.0%

Olive Grove Apartments Las Vegas, NV 1.5 miles 144 2002 96.0%

Stonegate Apartment Homes Las Vegas, NV n/a 440 1990 / 2017 94.3%

Source: Appraisal.

SPONSORSHIP The key sponsors for the loan are nationwide owners and operators of investment-grade commercial real estate. The primary sponsor is a publicly traded asset manager with assets totaling approximately $280.0 billion and ownership interests in approximately 58,000 multifamily units across 40 markets. The secondary sponsor is a multifamily services platform that is involved in development, construction, renovation, management and acquisition. They have developed and acquired over 880 multifamily properties totaling approximately 253,500 units since beginning operations in 1985. The property is managed by a borrower-affiliate company at a contractual management fee of 3.0% EGI.

Structured Finance: CMBS 72 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

STONEGATE APARTMENT HOMES – LAS VEGAS, NV

DBRS ANALYSIS SITE INSPECTION SUMMARY

DBRS toured the interior and exterior of the property on August 8, 2019, at approximately 2:00 p.m. Based on the site inspection and management tour, DBRS found the property quality to be Average (-).

The collateral is located in an east suburban area of the Las Vegas MSA. Boulder Highway is located approximately 1.5 miles west of the subject and provides access to the Las Vegas Strip and downtown Las Vegas, which are both located approximately 8.0 miles northeast of the property. Immediate adjacent land uses include a golf course to the north, single- family homes to the east, an undeveloped parcel of land to the south and a shopping center anchored by Albertsons to the west. Viridian Palms Apartments, a multifamily property managed by the same borrower-affiliate company, is also located directly west of the collateral next to the shopping center. The remaining surrounding area predominantly consists of single-family neighborhoods and multifamily communities.

The collateral consists of a 440-unit multifamily complex originally constructed in 1990. The site is structured with 36 two-story buildings and a clubhouse positioned just beyond the entrance of the property. The clubhouse serves primarily as the leasing office with a fitness center being the only other amenity offered in the building. The fitness center was relatively small and included only two stationary bikes and a treadmill. Situated behind the clubhouse was a pool area that was undergoing a routine draining at the time of inspection. The site is also improved with another small pool that should help compensate for the relatively small main pool area. However, management communicated that the secondary pool cannot be used at the moment, as it is does not have an accessible bathroom, which is required. The remaining property- wide amenities were situated outdoors next to the clubhouse and included a small dog park, playground, grilling area and blue concrete sports court, which had a substantial amount of deferred maintenance. Management would like to redevelop the space, but at the time of the DBRS inspection, there were no plans in place. There were approximately 446 covered and 233 surface parking spaces spread throughout the site, none of which are assigned spaces. Lastly, a noticeable amount of cracking and garbage were present throughout the site during the inspection.

Building exteriors had a stucco finish painted in a white, orange and gray color scheme. The exteriors were in good condition and appeared to have been recently painted. DBRS was able to tour a model unit reflective of a premium upgraded unit; a vacant, partially upgraded two-bedroom unit; and a vacant classic one-bedroom unit. The model unit had new vinyl wood flooring throughout the common living spaces and carpet in the bedrooms. While this new vinyl wood flooring is exclusively in the premium upgraded units, most differences between the unit types were related to the

Structured Finance: CMBS 73 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

STONEGATE APARTMENT HOMES – LAS VEGAS, NV kitchen. The model unit had premium upgrades, featuring new stainless steel appliances and new white cabinetry with metal handles. The partially upgraded unit had black appliances and white cabinetry with metal knobs. The classic unit had white appliances and old white cabinetry without handles or knobs. While only the premium upgraded model unit came equipped with a microwave, all kitchens had resurfaced countertops and an extension suitable for a small dining room area adjacent to the kitchen. All living rooms had a large sliding glass door to the unit’s patio/balcony as well as a very small square window that allows for more control over natural lighting. The living room spaces were relatively small but just adequate enough for a two-bedroom unit. Bedrooms were not large but had enough space to comfortably fit a full bed, nightstand and dresser. All units came equipped with a washer and dryer. There were approximately 47 units with premium upgrades and 30 units with partial upgrades at the time of inspection. According to management, these unit types are achieving premiums of approximately $125 and $55.00 per month, respectively. Overall, the property showed signs of deferred maintenance and the classic units appeared dated.

DBRS NCF SUMMARY

NCF ANALYSIS

2017 2018 T-10 June 2019 Issuer NCF DBRS NCF NCF Variance

GPR $3,912,065 $4,190,192 $4,286,310 $4,483,656 $4,483,656 0.0%

Other Income $436,539 $592,757 $614,034 $637,744 $637,744 0.0%

Vacancy & Concessions -$356,193 -$342,337 -$312,417 -$389,363 -$513,361 31.8%

EGI $3,992,411 $4,440,612 $4,587,927 $4,732,037 $4,608,039 -2.6%

Expenses $1,857,663 $1,902,515 $1,793,843 $2,061,752 $2,113,273 2.5%

NOI $2,134,748 $2,538,097 $2,794,084 $2,670,286 $2,494,766 -6.6%

Capex $0 $0 $0 $0 $0 0.0%

NCF $2,134,748 $2,538,097 $2,794,084 $2,670,286 $2,494,766 -6.6%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting NCF was $2,494,766, a variance -6.6% from the Issuer’s NCF of $2,670,286. The primary drivers of the variance were vacancy and operating expenses. DBRS assumed a vacancy of 9.5%, while the Issuer assumed a vacancy of 6.8%. DBRS based payroll expenses on the borrower’s budget inflated by 3.0% and all other operating expenses on the T-12 figures inflated by 3.0%.

DBRS VIEWPOINT The collateral is a 440-unit multifamily property located in a suburban area east of Las Vegas. Originally constructed in 1990, the subject is reflective of its construction vintage and displayed the need for capital improvements. While the previous owner invested approximately $2.0 million ($4,553/unit) in capital improvements, there was plenty of deferred maintenance throughout the site and approximately 363 units without any renovations. According to management, units with premium upgrades and partially upgraded units are achieving rent premiums of approximately $125 and $55.00 per month, respectively. While average in-place rents at the subject are approximately $849, Reis reported that the submarket’s average rent by the collateral’s construction vintage is $1,008. Further, the subject’s reported vacancy of 4.8% at the time of inspection is above the Reis submarket average vacancy by construction vintage of 2.5%. These figures indicate the collateral is being outperformed by the submarket and echoes the need to invest a considerable amount into capital improvements.

DOWNSIDE RISKS –– The loan is structure with an initial three-year IO period and has a high issuance LTV of 73.8%. The loan also has elevated term default risk based on a low DBRS DSCR of 1.21x.

Structured Finance: CMBS 74 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

STONEGATE APARTMENT HOMES – LAS VEGAS, NV

STABILIZING FACTORS –– The loan benefits from some amortization and has a more moderate DBRS Balloon LTV of 68.3%. The sponsor has budgeted $3.9 million ($8,772/unit) for more capital improvements. Previously upgraded units are achieving premiums ranging from $55.00 to $125 per month, and future renovations should improve the loan’s DSCR if similar rents are achieved. –– The sponsor is a repeat borrower having closed approximately 95 loans totaling roughly $3.5 billion. Further, the borrower- affiliate management company is well experienced in the local market with four properties (1,000 units) under management.

Structured Finance: CMBS 75 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Mercury NoDa Apartments Charlotte, NC

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $36.4 Loan psf/Unit $151,124 Percentage of the Pool 2.5% Loan Maturity/ARD April 2026 COLLATERAL SUMMARY Amortization 30 years DBRS Property Type Multifamily Year Built/Renovated 2016 Issuance DSCR City, State Charlotte, NC Physical Occupancy 94.2% 1.07x Units 241 Physical Occupancy Date February 2019 Issuance LTV 60.7% Balloon LTV The loan is secured by the borrower’s fee simple interest in a 241-unit garden-style 56.4% multifamily complex in Charlotte, North Carolina. Loan proceeds of $36.4 million, DBRS Property Type along with $19.6 million of borrower equity, were used to acquire the property in Multifamily March 2019 for $56.0 million ($232,500/unit) and cover remaining closing costs. The DBRS Property Quality seven-year loan is structured with a three-year IO period and then amortizes over a Average (+) 30-year schedule thereafter.

Debt Stack ($ million) Constructed in 2016, the collateral was 94.2% occupied as of the February 2019 rent Trust Balance $36.4 roll with an average rental rate of $1,853 per unit. The unit breakdown consists of 55 Pari Passu studio apartments (averaging 575 sf ); 107 one-bedroom apartments (averaging 782 $0.0 sf ); 75 two-bedroom apartments (averaging 1,129 sf ); and four three-bedroom unit B-Note apartments (averaging 1,446 sf ). The studio units have an average rent of $1,205; one- $0.0 bedroom units have an average rent of $1,368; two-bedroom units have an average rent Mezz of $1,772; and three-bedroom units have an average rent of $2,419. Unit interiors come $0.0 fully equipped and have either a private patio or a balcony area. Property amenities Total Debt include a ground-floor clubhouse, conference room, fitness center, pet spa, outdoor $36.4 pool, interconnected six-story parking garage and business center. Loan Purpose Acquisition Equity Contribution/ (Distribution) ($ million) $19.6

Structured Finance: CMBS 76 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

MERCURY NODA APARTMENTS – CHARLOTTE, NC

COMPETITIVE SET

Distance from Year Built/ Avg. Rental Avg. Unit Property Location Subject (mi) Units Renovated Occupancy Rate Per Unit Size (SF)

The Yards at NoDa Charlotte, NC 0.28 182 2015 95.0% $1,789 1,007

Highland Mill Charlotte, NC 0.35 166 1904 94.0% $1,622 1,184

The Gibson Charlotte, NC 1.89 250 2017 96.0% $1,923 991

Novel NoDa Charlotte, NC 0.22 344 2017 63.0% $1,792 945

Elizabeth Square Charlotte, NC 2.00 267 2009 96.0% $1,786 1,192

Alpha Mill Charlotte, NC 1.92 267 2007 98.0% $1,763 989

Subject Charlotte, NC n/a 241 2016 94.2% $1,853 1,119

Source: Appraisal.

The appraisal identified six properties in the local market that directly compete with the subject property. The subject has an occupancy roughly in line with the competitive set, although Novel NoDa has a notably lower occupancy as it is still in its initial lease-up phase. The subject offers higher rents than most of its competitive set due, in part, to its units being larger in size. The Gibson is a new construction apartment complex with similar finishes to the subject but has higher rents that can largely be attributed to its superior location. New construction in Charlotte’s NoDa neighborhood has been booming in recent years, and rental rates in the area have experienced rapid growth as a consequence. The subject collateral compares favorably in both rental rates and finish quality with its competitive set.

SPONSORSHIP The key sponsor for the transaction is a fund with reported ownership in four multifamily assets in Texas, Georgia and South Carolina, three of which are in lease-up. Since its inception in 1991, the company has recorded $1.0 billion in total acquisitions, $300.0 million in equity investments and $250.0 million in total distributions. The principles have ownership interests in 25 multifamily assets and have managed over 21,000 units with over 30 years of experience. The company targets investments in the Southeast, Southwest, Midwest and Mid-Atlantic regions. Property management is overseen by a borrower-controlled management company that has over 30 years of real estate experience. The company holds a portfolio of 21,000 multifamily units across ten states with approximately 800 units locally managed. The company operates for a contractual management fee of 2.50% of EGI.

Structured Finance: CMBS 77 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

MERCURY NODA APARTMENTS – CHARLOTTE, NC

DBRS ANALYSIS SITE INSPECTION SUMMARY

Based on the DBRS site inspection and management meeting conduct on August 13, 2019, DBRS found the property quality to be Average (+).

The garden-style apartment complex is located approximately 3.0 miles northeast of the Charlotte CBD. The collateral is in the NoDa neighborhood of Charlotte, a bustling arts-and-entertainment district. The surrounding area is filled with restaurants, bars and shopping with plenty of public art on display, giving a creative and vibrant feel to the area. A new light-rail station opened in NoDa last year, providing the neighborhood with easy access to the Charlotte CBD. According to management, downtown Charlotte can be accessed in 15 minutes from the subject using this light-rail station. Management noted that many of the subject’s residents work at finance and technology companies that contribute a substantial amount to Charlotte’s economic base. Bank of America and Wells Fargo both have large corporate offices in downtown Charlotte, so the subject has worked to successfully attract young professionals at these firms. In addition, Honeywell International Inc. is moving into a new office tower in Charlotte’s uptown neighborhood; management is attempting to draw in the firm’s newly relocated employees moving to the city. The collateral is also located 8.5 miles east of Charlotte Douglas International Airport.

The property’s exterior has a modern and attractive esthetic; it is composed of red brick on the first floor and red-and-tan siding on the second and third floors. The unit mix consists of 55 studio apartments, 107 one-bedroom/one-bathroom apartments, 75 two-bedroom/two-bathroom apartments and four three-bedroom/three-bathroom apartments. In addition, there are eight loft-style units with high vaulted ceilings that rent for a premium. DBRS toured the model two-bedroom/ two-bathroom unit along with a vacant studio unit and a one-bedroom/one-bathroom unit. Of note, the property reserves a single unit to be utilized as a guest suite for $175 per night. The model unit is a loft-style unit that felt more spacious and versatile than the subject’s other apartment layouts. All kitchens are fully equipped with standard stainless-steel appliances, dark-brown wood cabinets, white granite countertops and vinyl plank wood flooring. Apartments feature washer and dryer connections that are typically adjacent to the kitchens. Living rooms feature ceiling fans and vinyl plank wood flooring, and all have access to either a balcony or a patio via a glass door. Ground-floor units have concrete floors, while apartments on higher floors all have vinyl wood plank flooring. Bathrooms have stylish vanities, attractive lighting fixtures and ample counterspace.

The property has a modern and festive clubhouse with several unique seating and activity areas. The clubhouse contains a fully equipped kitchen and pool table, making it a great entertaining space for residents. This shared clubhouse space

Structured Finance: CMBS 78 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

MERCURY NODA APARTMENTS – CHARLOTTE, NC can be rented out by residents for $225. There is also a business center with plenty of televisions and free coffee to provide flexible on-site workspace to residents. Additional property amenities include a conference room, fitness center, outdoor pool and pet spa. The outdoor resort-style pool is accessible from the clubhouse and features ample patio furniture. There is a fire pit and grilling station in the pool area, providing a fun outdoor entertainment space. There are plans to expand and fence in the dog park next year as part of ongoing renovation efforts. Management has made efforts to create an apartment community by hosting monthly events that cater to the lifestyle trends of its younger tenant base. The property has a connected six-story parking garage that features 426 spaces in total. Parking spots displayed few signs of visible cracking and spalling. Overall, DBRS found the property to be well maintained and in great condition with minimal deferred maintenance evident at the time of inspection.

DBRS NCF SUMMARY

NCF ANALYSIS

2017 2018 T-11 June 2019 Issuer NCF DBRS NCF NCF Variance

GPR $4,212,284 $4,216,835 $4,270,289 $4,263,864 $4,263,864 0.0%

Other Income $706,239 $695,912 $648,577 $685,481 $648,577 -5.4%

Vacancy & Concessions -$680,236 -$428,355 -$397,225 -$391,985 -$425,928 8.7%

EGI $4,238,287 $4,484,391 $4,521,641 $4,557,360 $4,486,513 -1.6%

Expenses $1,862,664 $1,903,157 $1,855,007 $1,854,919 $2,200,708 18.6%

NOI $2,375,623 $2,581,234 $2,666,634 $2,702,441 $2,285,806 -15.4%

Capex $0 $0 $0 $0 $0 0.0%

NCF $2,375,623 $2,581,234 $2,666,634 $2,702,441 $2,285,806 -15.4%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF for Mercury NoDa Apartments was $2,285,806, a variance of approximately -15.4% from the Issuer’s NCF of $2,702,441. The main drivers of the variance are the operating expenses, management fee and vacancy. For the operating expenses, DBRS escalated the June 30, 2019, T-12 expenses by 3.0%, while the Issuer generally accepted either the T-12 figures or budget estimates. DBRS applied a management fee of 4.0% of EGI. By comparison, the Issuer utilized a management fee of 2.25% of the EGI based on the appraiser’s estimate. Lastly, DBRS applied an 8.0% vacancy in order to achieve an NRI in line with the T-12 figure.

DBRS VIEWPOINT The subject collateral has benefited from the influx of jobs into Charlotte over the past decade and growth of the city’s economic base. Per Reis, around 31.0% of the submarket’s inventory was built after 2009, demonstrating a high influx of new apartment product into the NoDa neighborhood specifically over the past ten years. Around 1,504 units were added to the submarket’s inventory in the last 12 months alone, with an additional 2,241 units expected to be delivered over the next couple of years. Despite the subject’s strong performance in recent months, competition in the residential market should further increase in coming years as more and more apartment projects come on line. The property has achieved a strong occupancy over the last year while maintaining high rental rates. The property’s physical vacancy rate of 5.8% is lower than the Reis submarket rate and the submarket by construction vintage cohort vacancy rate of 6.3% and 13.3%, respectively. At the same time, the subject’s average rental rate of $1,853 per unit is roughly in line with its nearby comparable properties. As a result of its successful initial lease-up, the subject has experienced strong NRI growth over the past couple years as it has reached stabilization. Constructed in 2016, the collateral’s NRI grew by 9.7% from 2017 to the June 2019 T-12. NOI has experienced even more robust growth at 12.2% over this same period, demonstrating the sponsor’s success in bringing in tenants and executing the business plan. The collateral offers spacious and modern units with expansive amenity offerings. The fun clubhouse space and community-involvement events demonstrate an effort

Structured Finance: CMBS 79 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

MERCURY NODA APARTMENTS – CHARLOTTE, NC to attract younger residents; thus far, management has effectively attracted a robust and steady tenant base due to these unique features. Further, the subject’s proximity to the new light-rail station should provide another boost to the NoDa neighborhood by making downtown Charlotte increasingly accessible.

DOWNSIDE RISKS –– The loan is structured with an initial three-year IO period.

STABILIZING FACTORS –– The loan has a low issuance LTV of 60.7% and amortizes down by approximately $2.6 million over the seven-year term. This establishes a low balloon LTV of 56.4% based on the $60.0 million appraised value. Further, the sponsor is contributing $19.6 million of equity to the transaction, which makes up approximately 35.0% of the purchase price.

Structured Finance: CMBS 80 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Davis at the Square McKinney, TX

Loan Snapshot Seller FREMF Ownership Interest Fee Simple Trust Balance ($ million) $36.3 Loan psf/Unit $109,909 Percentage of the Pool 2.5% Loan Maturity/ARD July 2026 COLLATERAL SUMMARY Amortization n/a DBRS Property Type Multifamily Year Built/Renovated 2018

Issuance DSCR City, State McKinney, TX Physical Occupancy 96.7% 1.99x Units 330 Physical Occupancy Date May 2019 Issuance LTV 65.0% Balloon LTV The loan is secured by the borrower’s fee interest in Davis at the Square, a 330- 65.0% unit multifamily complex located in McKinney, Texas, situated approximately 34.0 DBRS Property Type miles north of the Dallas CBD. The collateral is subject to a condominium regime Multifamily on the property. The regime consists of six total units, including one residential, two DBRS Property Quality commercial and three parking units. The borrower owns all units except for one Above Average parking unit, which is designated as city parking and is allocated approximately 2.5% interest in the common space and expenses. Loan proceeds of $36.3 million refinanced Debt Stack ($ million) existing debt of $27.0 million and returned approximately $8.8 million to the borrower, Trust Balance $36.3 and the remaining funds covered closing costs. The fixed-rate loan is IO for the whole Pari Passu seven-year term. $0.0 B-Note Recently built by the sponsor in 2018 for a cost basis of $46.2 million, the property $0.0 spans three total buildings on a 5.7-acre lot. As of the May 2019 rent roll, the collateral Mezz reported a physical occupancy of 96.7%. Property-wide occupancy has been steadily $0.0 increasing upon completion of construction and reached a stabilized occupancy of Total Debt over 90.0% in February 2019. The property’s unit breakdown comprises 59 studio $36.3 units averaging 480 sf, 185 one-bedroom units averaging 707 sf and 86 two-bedroom Loan Purpose units averaging 1,125 sf. Per the May 2019 rent roll, the collateral’s studio, one- and Refinance two-bedroom units averaged monthly rents of $899; $1,220; and $1,815, respectively, Equity Contribution/ with an average rent per unit of $1,318. (Distribution) ($ million) ($8.8) The property also includes commercial space consisting of two total units spanning 20,062 sf. Kimley-Horn, an architectural firm, occupies 9,102 sf (45.4% of the commercial NRA) at the subject with a lease expiration in May 2023. The tenant has been in occupancy since May 2018 and pays $25.00 psf annually with 2.0% annual increases. The remaining 10,960 sf is vacant.

Structured Finance: CMBS 81 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

DAVIS AT THE SQUARE – MCKINNEY, TX

The appraisal identified five multifamily properties in the local market that directly compete with the subject. For more information, please refer to the table below.

COMPETITIVE SET

Property Location Distance from Subject Units Year Built/Renovated Occupancy

McKinney Village McKinney, TX 3.1 miles 245 2016 93.0%

St. Paul's Square McKinney, TX 5.8 miles 211 2014 93.0%

Bexley Lake Forest McKinney, TX 6.4 miles 334 2013 98.0%

Parkside at Craig Ranch McKinney, TX 7.9 miles 1,538 2014 88.0%

The Mansions McKinney McKinney, TX 8.2 miles 595 2016 94.0%

Davis at the Square McKinney, TX n/a 330 2018 96.7%

Source: Appraisal.

SPONSORSHIP A privately held real estate investment company and its founders provide the main sponsorship for this transaction. The sponsorship group, formed in 1983, has developed over 13,000 residential units across Dallas; Houston; Denver; Fort Worth, Texas; Phoenix; and McKinney. Since 2010, the sponsor has completed five transactions with Freddie Mac totaling over $130.0 million. All loans have performed as agreed, and no adverse credit issues have been reported. There is no carveout guarantor for this transaction.

The property is managed by a third-party management company for a contractual rate of 2.75% of EGI. The company currently manages approximately 190,500 units nationally and 36,503 in the Dallas MSA.

DBRS ANALYSIS SITE INSPECTION SUMMARY

DBRS toured the interior and exterior of the property on August 19, 2019, at approximately 11:00 a.m. Based on the site inspection, DBRS found the property quality to be Above Average.

The subject is located in McKinney on the southwest corner of East Davis Street and Chestnut Street. McKinney is located in the northern sector of the Dallas–Fort Worth MSA. The property is well located due west of South McDonald Street

Structured Finance: CMBS 82 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

DAVIS AT THE SQUARE – MCKINNEY, TX

(Hwy. 5), which links with Hwy. 75 approximately 4.0 miles to the southwest. The highway leads southwest to Plano, Texas, and Dallas, approximately 14.0 miles and 33.0 miles from the subject, respectively. Due to the presence of these major thoroughfares, the area is accessible to major employment centers, including the office corridor located along Hwy. 75.

The subject lies in the Allen-McKinney submarket, and development in the area is primarily residential with retail developments located along main arterials. The city of McKinney has a historic downtown presence, which offers more than 120 shops that include art galleries, boutique apparel shops, antique shops, gift shops and home decor shops, as well as over two dozen restaurants. In the center of the downtown is the McKinney Performing Arts Center, which hosts off–Broadway shows, comedy, theater and concerts.

Recently completed in October 2018, the property spans three buildings across a 5.7-acre lot. According to the property manager, the property began leasing units in April 2019 as units completed construction and is currently operating at approximately 95.0% occupancy. At the time of DBRS’s inspection, the property had average curb appeal with average signage located along East Davis Street. The subject has a main leasing office that was found to be average in size with a large seating area with tables and separate glass-walled office spaces for property management personnel. The finishes in the clubhouse were modern and welcoming, creating a good first impression. The leasing office also includes a small laundry room, a postal room and Amazon lockers for packages. Common amenities at the property were found to be average and include a swimming pool with indoor clubhouse, an outdoor barbecue area with seating, a fitness center, a bike storage room, a dog wash station and a parking garage.

Residential buildings stand five stories tall and are constructed with brick and stucco. Landscaping at the property was found to be in good condition with decorative plants, neatly trimmed shrubs and medium-sized mature trees located outside the buildings. DBRS inspected the vacant shell-condition commercial unit at the subject, which comprises 10,960 sf of the total 20,062 sf of commercial space. DBRS inspected two apartment units at the property: a one-bedroom vacant unit and a two-bedroom model unit. The units were found to be spacious and were outfitted with vinyl wood flooring in the living rooms and kitchen, stainless steel appliances, tiled backsplashes in the kitchen and granite/quartz countertops. Units also include either a balcony or a patio. Bedrooms were observed to be average-sized but offered spacious walk-in closets. Bathrooms were also observed to be average in quality. Overall, the property was found to be in above-average condition and displayed no signs of deferred maintenance.

DBRS NCF SUMMARY

NCF ANALYSIS

2018 T-12 June 2019 Issuer NCF DBRS NCF NCF Variance

GPR $5,118,666 $5,218,344 $5,218,392 $5,218,392 0.0%

Other Income $262,965 $466,443 $580,558 $549,522 -5.3%

Vacancy & Concessions -$3,979,844 -$1,938,068 -$327,220 -$342,036 4.5%

EGI $1,401,787 $3,746,720 $5,471,730 $5,425,878 -0.8%

Expenses $1,439,924 $2,109,498 $2,638,532 $2,848,852 8.0%

NOI -$38,137 $1,637,222 $2,833,198 $2,577,027 -9.0%

Capex $0 $0 $0 $0 0.0%

NCF -$38,137 $1,637,222 $2,833,198 $2,577,027 -9.0%

The DBRS NCF is based on the DBRS North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS NCF was $2,577,027, representing a -9.0% variance from the Issuer’s NCF of $2,833,198. The primary drivers of the variance include operating expenses and TIs/LCs on the commercial space. DBRS estimated operating expenses based on the appraiser’s assumptions inflated by 6.0% due to limited operating history. DBRS based TIs on the commercial

Structured Finance: CMBS 83 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

DAVIS AT THE SQUARE – MCKINNEY, TX space of $50.00/$25.00 psf and LCs of 4.0%/2.0% on new/renewal leases, respectively, resulting in a total leasing cost of $3.72 psf. The Issuer based TIs/LCs of $1.00 psf on the commercial space.

DBRS VIEWPOINT The subject represents a recently built property that is a well-located property on the northern reach of the Dallas and Fort Worth MSAs. More specifically, the property is located in McKinney in a well-established and historic neighborhood. The property is situated in the Allen-McKinney submarket, which sits approximately 34.0 miles northeast of the Dallas CBD. The area exhibits healthy occupancy levels and slow-but-stable rental-rate growth in spite of new supply entering the market, according to the appraiser. The McKinney area is performing relatively average with a 7.4% vacancy rate among multifamily properties, according to Reis. When drilling down to the subject’s vintage, the vacancy rate drops to 11.7%, which again is attributed to new supply in the market, similar to the collateral. The appraiser also identified five comparable properties that display an average vacancy rate of 6.8%.

The property was recently built by the sponsor in October 2018 for a cost basis of $46.2 million and currently reports a physical occupancy of 96.7%. Occupancy at the subject has been increasing since the property’s completion and reached a stabilized occupancy of over 90.0% in February 2019. The property’s recent build is favorable and will keep the property competitive with other local apartment communities. Per the DBRS site inspection, the property was found to be in Above Average condition, which points to the property’s attractiveness. According to the property manager during the site inspection, the property no longer offers concessions. Of the $36.3 million loan amount, the borrower is cashing out approximately $8.8 million, which still leaves the borrower with $9.9 million of cash equity in the transaction and equates the subject loan leverage to a favorable 65.0% appraiser LTV.

DOWNSIDE RISKS –– There is no carveout guarantor for the loan.

STABILIZING FACTORS –– The sponsor recently constructed the property in October 2018 and has leased the property to a 96.7% physical occupancy as of May 2019. The borrower still has $9.9 million of cash equity in the transaction after cashing out $8.8 million as part of this transaction. Additionally, DBRS increased the POD on this loan to mitigate the risk associated with the lack of a carveout guarantor.

Structured Finance: CMBS 84 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Transaction Structural Features

Freddie Mac Guarantee: Freddie Mac guarantees the (1) timely payment of interest; (2) payment of related principal on the distribution date following the maturity date of each mortgage loan, to the extent that such principal would have been distributed to the underlying Class A-1, A-2 and A-M certificates; (3) reimbursement of any realized losses and additional trust fund expenses allocated to the guaranteed certificates; and (4) ultimate payment of principal by the assumed final distribution date for the underlying Class A-1, A-2 and A-M certificates. Freddie Mac will not guarantee any other class of Underlying Certificates other than the Underlying Guaranteed Certificates.

Controlling Class Rights: The transaction’s most subordinate bonds are controlled by the most subordinate bondhold- ers. The Special Servicer may be terminated without cause by the controlling class certificateholder.

No Downgrade Confirmation: This transaction contemplates waivers of Rating Agency Confirmations (RACs). It is the intent of DBRS to waive loan-level RACs yet to receive notice upon their occurrence. DBRS will review all loan-level changes as a part of its monthly surveillance. DBRS will not waive RACs that affect any party involved in the operational risk of the transaction (e.g., replacement of the Special Servicer, Master Servicer, etc.).

Methodologies

The following are the methodologies DBRS applied to assign ratings to this transaction. These methodologies can be found on www.dbrs.com under the heading Methodologies & Criteria. Alternatively, please contact [email protected] or contact the primary analysts whose information is listed in this report.

–– North American CMBS Multi-borrower Rating Methodology –– DBRS North American Commercial Real Estate Property Analysis Criteria –– Rating North American CMBS Interest-Only Certificates

Surveillance

DBRS will perform surveillance subject to North American CMBS Surveillance Methodology.

Structured Finance: CMBS 85 PRESALE REPORT — FREMF 2019-K736 SEPTEMBER 2019

Notes: All figures are in U.S. dollars unless otherwise noted.

This report is based on information as of September 3, 2019. Subsequent information may result in material changes to the rating assigned herein and/or the contents of this report.

The DBRS group of companies consists of DBRS, Inc. (Delaware, U.S.)(NRSRO, DRO affiliate); DBRS Limited (Ontario, Canada)(DRO, NRSRO affiliate); DBRS Ratings GmbH (Frankfurt, Germany)(CRA, NRSRO affiliate, DRO affiliate); and DBRS Ratings Limited (England and Wales)(CRA, NRSRO affiliate, DRO affiliate). For more information on regulatory registrations, recognitions and approvals, please see: http://www.dbrs.com/research/highlights.pdf.

© 2019, DBRS. All rights reserved. The information upon which DBRS ratings and other types of credit opinions and reports are based is obtained by DBRS from sources DBRS believes to be reliable. DBRS does not audit the information it receives in connection with the analytical process, and it does not and cannot independently verify that information in every instance. The extent of any factual investigation or independent verification depends on facts and circumstances. DBRS ratings, other types of credit opinions, reports and any other information provided by DBRS are provided “as is” and without representation or warranty of any kind. DBRS hereby disclaims any representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability, fitness for any particular purpose or non-infringement of any of such information. In no event shall DBRS or its directors, officers, employees, independent contractors, agents and representatives (collectively, DBRS Representatives) be liable (1) for any inaccuracy, delay, loss of data, interruption in service, error or omission or for any damages resulting therefrom, or (2) for any direct, indirect, incidental, special, compensatory or consequential damages arising from any use of ratings and rating reports or arising from any error (negligent or otherwise) or other circumstance or contingency within or outside the control of DBRS or any DBRS Representative, in connection with or related to obtaining, collecting, compiling, analyzing, interpreting, communicating, publishing or delivering any such information. Ratings, other types of credit opinions, other analysis and research issued or published by DBRS are, and must be construed solely as, statements of opinion and not statements of fact as to credit worthiness, investment advice or recommendations to purchase, sell or hold any securities. A report with respect to a DBRS rating or other credit opinion is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. DBRS may receive compensation for its ratings and other credit opinions from, among others, issuers, insurers, guarantors and/or underwriters of debt securities. DBRS is not responsible for the content or operation of third party websites accessed through hypertext or other computer links and DBRS shall have no liability to any person or entity for the use of such third party websites. This publication may not be reproduced, retransmitted or distributed in any form without the prior written consent of DBRS. ALL DBRS RATINGS AND OTHER TYPES OF CREDIT OPINIONS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AT http://www.dbrs.com/about/disclaimer. ADDITIONAL INFORMATION REGARDING DBRS RATINGS AND OTHER TYPES OF CREDIT OPINIONS, INCLUDING DEFINITIONS, POLICIES AND METHODOLOGIES, ARE AVAILABLE ON http://www.dbrs.com.

Structured Finance: CMBS 86 Glossary

ADR average daily rate IO interest only P&I principal and interest ARA appraisal reduction amount LC leasing commission POD probability of default ASER appraisal subordinate entitlement reduction LGD loss severity given default PIP property improvement plan BOV broker’s opinion of value LOC letter of credit PILOT property in lieu of taxes

CAM common area maintenance LOI letter of intent PSA pooling and servicing agreement capex capital expenditures LS Hotel limited service hotel psf per square foot CBD central business district LTC loan-to-cost R&M repairs and maintenance CBRE CB Richard Ellis LTCT long-term credit tenant REIT real estate investment trust CMBS commercial mortgage-backed securities LTV loan-to-value REO real estate owned CoStar CoStar Group, Inc. MHC manufactured housing community RevPAR revenue per available room CREFC CRE Finance Council MTM month-to-month sf square foot/square feet DPO discounted payoff MSA metropolitan statistical area STR Smith Travel Research DSCR debt service coverage ratio n.a. not available SPE special-purpose entity EGI effective gross income n/a not applicable TI tenant improvement EOD event of default NCF net cash flow TIC tenants in common F&B food & beverage NNN triple net T-12 trailing 12 months FF&E furniture, fixtures and equipment NOI net operating income UW underwriting FS Hotel full service hotel NRA net rentable area WA weighted average G&A general and administrative NRI net rental income WAC weighted-average coupon GLA gross leasable area NR – PIF not rated – paid in full x times GPR gross potential rent OSAR operating statement analysis report YE year-end HVAC heating, ventilation and air conditioning PCR property condition report YTD year-to-date

Definitions

Capital Expenditure (capex) NNN (triple net) Costs incurred in the improvement of a property that will have a life of more than A lease that requires the tenant to pay operating expenses such as property taxes, one year. insurance and maintenance, in addition to the rent.

DBRS Refi DSCR Net Operating Income (NOI) A measure that divides DBRS stabilized NCF by the product of the loan’s maturity The revenues earned by a property’s ongoing operations less the expenses balance and a stressed refinance debt constant. associated with such operations but before mortgage payments, tenant improvements, replacement reserves and leasing commissions. DBRS Term DSCR A measure that divides DBRS stabilized NCF by the actual debt service payment Net Rentable Area (NRA) The area (sf) for which rent can be charged. NRA includes the tenant’s premises Debt Service Coverage Ratio (DSCR) plus an allocation of the common area directly benefiting the tenant, such as A measure of a mortgaged property’s ability to cover monthly debt service common corridors and restrooms. payments, defined as the ratio of net operating income (NOI) or net cash flow (NCF) to the debt service payments. Revenue Per Available Room (RevPAR) A measure that divides revenue by the number of available rooms, not the number Effective Gross income (EGI) of occupied rooms. It is a measure of how well the hotel has been able to fill rooms Rental revenue minus vacancies plus miscellaneous income. in the off-season, when demand is low even if rates are also low, and how well it fills the rooms and maximizes the rate in the high season, when there is high Issuer UW demand for hotel rooms. Issuer underwritten from Annex A or servicer reports. Tenant Improvements (TIs) Loan-to-Value (LTV) The expense to physically improve the property or space, such as new The ratio between the principal amount of the mortgage balance, at origination improvements or remodelling, paid by the borrower. or thereafter, and the most recent appraised value of the underlying real estate collateral, generally from origination. Weighted Average (WA) Calculation is weighted by the size of each mortgage in the pool. Net Cash Flow (NCF) The revenues earned by a property’s ongoing operations less the expenses associated Weighted-Average Coupon (WAC) with such operations and the capital costs of tenant improvements, leasing commissions The average coupon or interest payment on a set of mortgages, weighted by the and capital expenditures (or reserves). Moreover, NCF is net operating income (NOI) size of each mortgage in the pool. less tenant improvements, leasing commissions and capital expenditures.