State Board of Equalization

August 8, 2017 File No.: 2017-STAR-DKSN-006 County Tax Director: Natalie Wandler County or City: City of Dickinson City Assessor: Joe Hirschfeld Appellant: S & B Dickinson Apartments 1, LLC represented by Ethan Horn, Ryan Property Tax Issue: Protests the assessment of parcels 1168-0200-0100 and 1169-0100-0100 Summary: S & B Dickinson Apartments 1, LLC represented by Ethan Horn, Ryan Property Tax, protests the assessment on the Sierra Ridge apartment complex property located within the City of Dickinson.

Notes:

www.nd.gov/tax ▪ 701.328.7088 Office of State Tax Commissioner ▪ Ryan Rauschenberger, Tax Commissioner The Sterling Group / Braxton Development Sierra Ridge Evidence Packet

Location 2004 Sierra Commons Road Tax Parcel Number 1168-0200-0100 & 1169-0100-0100

ASSESSMENT / TAX YEAR 2017 APPEAL NUMBER: 4377 CURRENT ASSESSED VALUE $37,605,300

TAXPAYER'S OPINION OF VALUE $13,383,000

Submitted by:

Ethan Horn Acting as Agent 720.524.0022 SUMMARY OF SALIENT FACTS AND CONCLUSIONS

County Stark Assessment Year / Tax Year 2017 Date of Value February 1, 2017 Client The Sterling Group / Braxton Development Ownership Entity S & B DICKINSON APARTMENTS 1, LLC Property Name Sierra Ridge Address - Street & City 2004 Sierra Commons Road Property Class A Unit Count 278 Net Rentable Square Feet 285,510 Land Square Feet 733,550 Year of Construction 2014 Parcel Number 1168-0200-0100 & 1169-0100-0100

2016 Real Estate Assessment Value Value / Unit Total $36,782,520 $132,311

2017 Real Estate Assessment Value Value / Unit Total $37,605,300 $135,271

Market Value Summary

Value Value / Unit Income Approach Value - Actual $13,383,000 $48,140 Value per CBRE Appraisal $16,550,000 $59,532 INCOME CAPITALIZATION APPROACH Sierra Ridge Year-End 2016 Actual Performance 278 Units 285,510 SF

Operating Income 2016 2015 Potential Gross Income $3,846,685 $5,828,339 Loss to Lease ($653,008) ($313,140) Vacancy & Collection Loss11.57% ($445,181) ($1,892,898) Net Rental Income $2,748,496 $3,622,301

Other Income Concessions ($94,114) ($196,086) Other Income $417,387 $524,294

Total Other Income $323,273 $328,208

Effective Gross Income $3,071,769 $3,950,509

Operating Expenses $/SF $/Unit % of EGI Payroll & Benefits $1.56 $1,600 14.48% $444,763 $429,521 Administrative $0.66 $682 6.17% $189,652 $276,246 Maintenance & Grounds $0.81 $831 7.52% $231,109 $172,135 Marketing & Training $0.28 $292 2.64% $81,113 $62,257 Apartment Turnover $0.35 $361 3.26% $100,286 $85,505 Utilities $0.62 $633 5.73% $176,070 $182,172 Insurance $0.28 $285 2.58% $79,363 $100,033 Total Operating Expenses $4.56 $4,685 42.40% $1,302,356 $1,307,869

Net Operating Income $6.20 $6,365 57.60% $1,769,413 $2,642,640

Replacement Reserves $400 $111,200 $111,200

Net Income after Reserves $1,658,213 $2,531,440

Effective Tax Rate 0.89% 0.89% Capitalization Rate 11.50% 11.50% Loaded Capitalization Rate 12.39% 12.39%

$/SF $/Unit GRM Indicated Value $46.87 $48,140.29 3.5 $13,383,000 $20,431,000

*Includes concessions, non revenue units and market loss. APPRAISAL REPORT

SIERRA RIDGE APARTMENT HOMES 2004 Sierra Commons Road Dickinson, Stark County, North Dakota 58601 CBRE, Inc. File No. 15-178MN-1134-1

Andrew Braxton Owner Representative S&B WILLISTON PROPERTIES LLC 1735 South Avenue Bozeman, Montana 59718

www.cbre.com/valuation

VALUATION & ADVISORY SERVICES

81 South 9th Street Minneapolis, MN 55402

T (612) 336-4315 F (612) 336-4315

www.cbre.com

February 3, 2016

Andrew Braxton Owner Representative S&B WILLISTON PROPERTIES LLC 1735 South Avenue