BIG MILL APARTMENTS 702 N 8Th Street, Reading, PA 19604 Class a Product - Fully Redeveloped in 2017

Virtual Tour

BIG MILL APARTMENTS 702 N 8th Street, Reading, PA 19604 Class A Product - Fully Redeveloped in 2017

Offering Memorandum NON-ENDORSEMENT & DISCLAIMER NOTICE

EXECUTIVE SUMMARY CONFIDENTIALITY & DISCLAIMER Big Mill Apartments The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Investment Overview • Property Overview BIG MILL 04 Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect APARTMENTS FINANCIAL ANALYSIS to the income or expenses for the subject property, the future projected financial performance of the property, the size and square Big Mill Apartments footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business pros- 12 Unit Mix • Operating Expenses pects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. RENT COMPARABLES All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service EXCLUSIVELY LISTED BY: Reading Apartments mark of Marcus & Millichap Real Estate Investment Services, Inc. 20 Comparables Maps • Rent Comparables © 2017 Marcus & Millichap. All rights reserved. COVID-19 NOTICE CRAIG DUNKLE All potential buyers are strongly advised to take advantage of their opportunities and obligations to conduct thorough due diligence MARKET OVERVIEW and seek expert opinions as they may deem necessary, especially given the unpredictable changes resulting from the continuing Vice President Investments Reading Apartments COVID-19 pandemic. Marcus & Millichap has not been retained to perform, and cannot conduct, due diligence on behalf of any prospective purchaser. Marcus & Millichap’s principal expertise is in marketing investment properties and acting as intermediaries Philadelphia Demographics • Related Press 28 between buyers and sellers. Marcus & Millichap and its investment professionals cannot and will not act as lawyers, accountants, Cell 717.554.4881 contractors, or engineers. All potential buyers are admonished and advised to engage other professionals on legal issues, tax, regula- Office 215.531.7046 tory, financial, and accounting matters, and for questions involving the property’s physical condition or financial outlook. Projections [email protected] and pro forma financial statements are not guarantees and, given the potential volatility created by COVID-19, all potential buyers License PA RS324418 should be comfortable with and rely solely on their own projections, analyses, and decision-making. NON-ENDORSEMENT NOTICE MHER M. VARTANIAN Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this Associate marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or Philadelphia sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee Cell 267.664.7118 information about this listing to prospective customers. Office 215.531.7083 [email protected] ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. License PA RS345557 PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

JEREMY RYAN Marcus & Millichap Investment Services of Seattle,Inc - 215-531-0000 Associate BROKER OF RECORD - SEAN BEUCHE LIC. # RB062197C Philadelphia Cell 302.494.4998 Office 215.531.7037 [email protected] License PA RS355231

OFFICES NATIONWIDE AND THROUGHOUT CANADA WWW.MARCUSMILLICHAP.COM INVESTMENT HIGHLIGHTS

INVESTMENT OVERVIEW PRIME LOCATION

The Dunkle Group of Marcus & Millichap is pleased to present the Big Mill Apartments, ► Convenient Access to Center City located at 702 N 8th St, Reading, PA. The Subject Property, built-in 1904, is a 6-story, Class A Mixed-Use Apartment building that is well managed and most recently renovated ► Walking Distance to Restaurants & Route 422 in 2017. In 2017, the property was also honored with the Pennsylvania Historic Preser- ► 4 Minute Walk to Reading Towne Shopping Center vation Award. ► 3.5 Miles (9 mins) from Reading Regional Airport Every piece of material has been replaced, and every primary mechanical system is reconstructed and installed. The roof has a 20-year warranty and was installed through Liquid Membrane Roofing Systems, allowing an extended warranty program beyond the RECENTLY UPDATED initial 20 years, which currently has 15 years remaining. ► Renovated in 2017 The building’s features and amenities are superb, including a full-scale restaurant for tenants to enjoy, medical office space, and focused retail space. The retail spaces are ► All New Fire Alarm Systems impressive in that they consist of all original hardwood floors and clear span open- Exposed Beams Throughout spaced layouts. The building is made up of high-end features, and one of the building’s ► major attractions is the core pavilion area, which can accommodate outdoor seating and ► Beautiful Maple Wood Flooring events.

The property is ideally located within walking distance to the city center and major ameni- VALUE-ADD OPPORTUNITY ties. The property is also conveniently located to several shopping centers, malls, parks, universities, and colleges. This densely populated area lends itself to high occupancy ► Keystone Opportunity Zone Rent Restrictions End April 2021 rates for the subject property. The rents are currently well below market, allowing a new investor a significant opportunity to increase net operating income. ► 27% Increase in Rents in the Next 1-2 Years

The property is a true class A asset, and as a result, the overall repair and maintenance ► High Occupancy Rates budget and any future CapEx will be limited for the next 5-7 years. It has a net rentable area of 122,000 SF, with a parcel size of 0.93 Acres. It consists of 57 two (2) bedroom ► Below Market Rents apartments and 12 one (1) bedroom studio apartments with the current average rent at below-market-rate rents due to the Keystone Opportunity Program and related new market and historic tax credit programs. There is currently seven (7) class A commercial UNIT MIX spaces (office & retail) as well. Unit Type Number of Units SF RENTS MARKET RENTS BIG MILL APARTMENTS Important Note: As of April 2021, those restrictions will sunset, and apartment rent can be drastically increased. Base on recent rent studies, the average rent PSF is $1.27; 2 Bed/2 Bath 57 1156 $878 $1,218 however, in this model of the proforma income, we used $1.05 to be conservative (Which Studio/1 Bed/1 Bath 12 488 $448 $429 equates to a 27% purely administrative upside) It is presumed higher rents can be achieved in the near future related to the residential Retail/Office 7 36,194 $34,340 $35,234 Executive Summary cash flow. The only words to describe the asset/offering as-a-whole is impressive... and a must-see. Please contact agents for more information. 5 PROPERTY OVERVIEW COMM. UNITS RES. UNITS LOT SIZE (AC) YEAR REBUILT YEAR BUILT 7 69 0.93 2015 1905 BIG MILL APARTMENTS 702 N 8th St, Reading, PA 19604

OFFERING PRICE NET OPERATING INCOME Unpriced $760,011

PROPERTY INFO

Neighborhood Outlet Area MF

Parcel 12-5307-60-94-3381

Location Suburban

Zoning Office & Residential

BUILDING DESCRIPTION

Year Renovated 2017

Type 4 Star Mid-Rise Apartments

Buildings 1

Stories 6

SCHOOL DISTRICT

Elementary Tenth & Green El School 670 Students

Middle School Northeast Middle School 931 Students

High School Reading Senior High School 3,352 Students

COLLEGES

Reading Area Community College 1.5 Miles

Albright College 1.8 Miles

6 Alvernia University 3.4 Miles PROPERTY DETAILS

ON-SITE SECURITY SITE DESCRIPTION SYSTEM Units 76

Residential Units 69

Commercial Units 7

Buildings 1

Stories 6

Year Built 1904/2015/2017 VAULTED CEILINGS Rentable Square Feet (Apt) 71,763 Rentable Square Feet (Retail/Office) 36,194

Total Rentable Area 107,957

Topography Flat

Parking 45 Spaces

Density Limited, Urban

Ownership Fee Simple ON SITE BAR RESTAURANT MECHANICAL

HVAC 100% New/Updated

Wiring 100% New/Updated COMMON AREA AMENITIES UNIT AMENITIES Fire Protection Fully Sprinklered

CONSTRUCTION ► High End Laundry Facilities ► Large Windows - Natural Light

Foundation Concrete, Masonry, Steel ► On-site Maintenance ► Great Views Framing Brick, Masonry, Hardwood Beams ► Elevator ► Fully Sprinkled Exterior Brick & Masonry ► Off-Street Parking ► Double Vanity Bathrooms Parking Surface Asphalt ► On-Site Restaraunt ► Secure Phone Access System Roof Liquid Membrane Roofing Systems ► Courtyard/Picnic Area ► Central A/C & Heat 9 RENT ROLL

RENT ROLL CURRENT POTENTIAL

UNIT TYPE # OF UNITS AV. SF RENTAL RANGE AV. RENT AV RENT/SF MONTHLY INCOME AV. RENT AV. RENT/SF MONTHLY INCOME

2 BD/2 BTH 57 1,156 $731 - $1,008 $878 $0.76 $50,046 $1,218 $1.05 $69,434

Studio 1 BD / 1 BTH 12 488 $0 - $650 $584 $1.20 $7,009 $650 $1.33 $7,800

Totals/Weighted Averages 69 1,040 $827 $0.79 $57,055 $1,081 $1.19 $77,234

Gross Annualized Rents $684,660 $926,808

COMMERCIAL RENT CHANGES OPERATING EXPENSE

TENANT NAME TYPE SUITE SF BLDG SHARE LEASE TERM PSF PER MONTH ON TO REIMBURSMENTS RENEWAL

3% Annual Increases - Serge Vilaire - Salon Retail A 1,162 1.08% 1/1/21 to 12/30/25 $13.94 $1,350 Jan-2022 $1,377 Est. Year 1 Cam - $2150 Auto One Year Renewal

Est. Year 1 Cam - 3% Annual Increases - Pediatria Retail B, C 6,250 5.79% 1/1/17 to 8/30/26 $12.00 $6,250 Aug-2022 $6,251 $11,500 No Options

3% Annual Increases - COCA Retail D 3,525 3.26% 8/1/19 to 7/30/24 $11.17 $3,281 Aug-2022 $3,364 Est. Year 1 Cam - $6,500 Five Year Renewal

3% Annual Increases - Tax Service Retail E 1,950 1.81% 1/1/19 to 6/30/24 $9.14 $1,485 Apr-2022 $1,530 Est. Year 1 Cam - $3,665 Five Year Renewal

Italian Restaaunt Retail F 3,546 3.28% 3/1/21 to 2/28/26 $17.56 $5,190 Mar-2022 $5,190 Est. Year1 Cam - $6,510 3% Annual Increases

Est. Year 1 Cam - Space 2nd Floor (Rear) Retail G 10,714 9.92% 4/1/21 to 4/1/26 $6.50 $5,803 Apr-2022 $5,977 3% Annual Increases $19,675

Est. Yearly Cam - Space 2nd Floor Retail H 9,047 8.38% 4/1/21 to 4/5/26 $10.00 $7,539 Aug-2022 $7,765 3% Annual Increases $16,610 BIG MILL APARTMENTS Total 7 36,194 $30,898

Financial Analysis RENT ROLL DETAIL CURRENT POTENTIAL

UNIT UNIT TYPE SF RENT/MONTH RENT/SF/MONTH RENT/MONTH RENT/SF/MONTH

414 2 BD/2 BTH 1,223 $850 $0.70 $1,284 $1.05

CURRENT POTENTIAL 415 2 BD/2 BTH 1,202 $844 $0.70 $1,262 $1.05

UNIT UNIT TYPE SF RENT/MONTH RENT/SF/MONTH RENT/MONTH RENT/SF/MONTH 416 1 BD / 1 BTH 574 $603 $1.05 $621 $1.08

301 2 BD/2 BTH 1,210 $901 $0.74 $1,271 $1.05 501 2 BD/2 BTH 1,352 $927 $0.69 $1,420 $1.05

302 2 BD/2 BTH 1,110 $876 $0.79 $1,166 $1.05 502 2 BD/2 BTH 1,110 $874 $0.79 $1,200 $1.08

303 2 BD/2 BTH 1,212 $819 $0.68 $1,273 $1.05 503 2 BD/2 BTH 1,212 $902 $0.74 $1,273 $1.05

304 1 BD / 1 BTH 552 $650 $1.18 $450 $0.82 504 2 BD/2 BTH 1,095 $902 $0.82 $1,184 $1.08 305 1 BD / 1 BTH 552 $650 $1.18 $211 $0.38 505 2 BD/2 BTH 1,094 $928 $0.85 $1,183 $1.08 306 1 BD / 1 BTH 435 $650 $1.49 $470 $1.08 506 2 BD/2 BTH 1,093 $902 $0.83 $1,148 $1.05 307 1 BD / 1 BTH 383 $650 $1.70 $414 $1.08 507 2 BD/2 BTH 1,207 $876 $0.73 $1,267 $1.05 308 1 BD / 1 BTH 435 $650 $1.49 $457 $1.05 508 2 BD/2 BTH 1,229 $902 $0.73 $1,329 $1.08 309 1 BD / 1 BTH 385 $650 $1.69 $416 $1.08 509 2 BD/2 BTH 1,113 $844 $0.76 $1,169 $1.05 310 1 BD / 1 BTH 435 $650 $1.49 $457 $1.05 510 2 BD/2 BTH 1,094 $876 $0.80 $1,149 $1.05 311 1 BD / 1 BTH 385 $650 $1.69 $404 $1.05 511 2 BD/2 BTH 1,066 $875 $0.82 $1,119 $1.05 312 2 BD/2 BTH 932 $731 $0.78 $979 $1.05 512 2 BD/2 BTH 1,214 $876 $0.72 $1,275 $1.05 313 2 BD/2 BTH 1,214 $902 $0.74 $1,313 $1.08 513 2 BD/2 BTH 1,097 $870 $0.79 $1,152 $1.05 314 2 BD/2 BTH 1,113 $850 $0.76 $1,169 $1.05 514 2 BD/2 BTH 1,223 $902 $0.74 $1,284 $1.05 315 2 BD/2 BTH 1,094 $847 $0.77 $1,149 $1.05 515 2 BD/2 BTH 1,202 $901 $0.75 $1,262 $1.05 316 2 BD/2 BTH 1,088 $869 $0.80 $1,142 $1.05 516 1 BD / 1 BTH 574 $603 $1.05 $621 $1.08 317 2 BD/2 BTH 1,219 $820 $0.67 $1,280 $1.05

318 2 BD/2 BTH 1,097 $875 $0.80 $1,152 $1.05 601 2 BD/2 BTH 1,352 $874 $0.65 $1,420 $1.05

319 2 BD/2 BTH 1,223 $876 $0.72 $1,284 $1.05 602 2 BD/2 BTH 1,110 $870 $0.78 $1,166 $1.05

320 2 BD/2 BTH 1,202 $819 $0.68 $1,262 $1.05 603 2 BD/2 BTH 1,212 $876 $0.72 $1,273 $1.05

321 1 BD / 1 BTH 574 $603 $1.05 $621 $1.08 604 2 BD/2 BTH 1,095 $902 $0.82 $1,150 $1.05

401 2 BD/2 BTH 1,352 $1,008 $0.75 $1,420 $1.05 605 2 BD/2 BTH 1,094 $849 $0.78 $1,149 $1.05

402 2 BD/2 BTH 1,110 $902 $0.81 $1,166 $1.05 606 2 BD/2 BTH 1,093 $876 $0.80 $1,148 $1.05

403 2 BD/2 BTH 1,212 $927 $0.76 $1,273 $1.05 607 2 BD/2 BTH 1,207 $902 $0.75 $1,267 $1.05

404 2 BD/2 BTH 1,095 $902 $0.82 $1,150 $1.05 608 2 BD/2 BTH 1,229 $902 $0.73 $1,290 $1.05

405 2 BD/2 BTH 1,094 $872 $0.80 $1,149 $1.05 609 2 BD/2 BTH 1,113 $876 $0.79 $1,169 $1.05

406 2 BD/2 BTH 1,093 $872 $0.80 $1,148 $1.05 610 2 BD/2 BTH 1,094 $876 $0.80 $1,149 $1.05 407 2 BD/2 BTH 1,207 $876 $0.73 $1,267 $1.05 611 2 BD/2 BTH 1,066 $927 $0.87 $1,119 $1.05 408 2 BD/2 BTH 1,229 $876 $0.71 $1,290 $1.05 612 2 BD/2 BTH 1,214 $796 $0.66 $1,275 $1.05 409 2 BD/2 BTH 1,113 $844 $0.76 $1,169 $1.05 613 2 BD/2 BTH 1,097 $902 $0.82 $1,186 $1.08 410 2 BD/2 BTH 1,094 $845 $0.77 $1,149 $1.05 614 2 BD/2 BTH 1,223 $901 $0.74 $1,284 $1.05 411 2 BD/2 BTH 1,066 $876 $0.82 $1,119 $1.05 615 2 BD/2 BTH 1,202 $876 $0.73 $1,262 $1.05 412 2 BD/2 BTH 1,214 $929 $0.77 $1,275 $1.05 616 1 BD / 1 BTH 574 Vacant $0.00 $0 $0.00 413 2 BD/2 BTH 1,097 $876 $0.80 $1,152 $1.05 Total 71,775 $57,055 $0.79 $74,576 $1.04 OPERATING STATEMENT EXPENSES

INCOME APRIL 2021 - CURRENT APRIL 2022 - PROJECTIONS PER UNIT PER SF EXPENSES APRIL 2021 - CURRENT % OF CEGI APRIL 2023 - PROJECTIONS % OF CEGI PER SF

Multifamily Real Estate Taxes 79,555 7.0% 87,102 6.5% 0.81

Gross Potential Rent 894,912 912,810 13,229 12.72 Insurance 41,000 3.6% 42,230 3.2% 0.39

Loss / Gain to Lease (210,252) 23.5% (109,537) 12.0% (1,587) (1.53) Utilities - Electric 22,000 1.9% 22,660 1.7% 0.21

Gross Scheduled Rent 684,660 803,273 11,642 11.19 Utilities - Water & Sewer - Reimb. 1,200 0.1% 1,236 0.1% 0.01

All Other Income 31,600 458 0.44 Utilities - Gas Fee 1,000 0.1% 1,030 0.1% 0.01

Vacancy (13,693) 2.0% (16,065) 2.0% Utilities - Trash 20,000 1.8% 20,600 1.5% 0.19

Effective Gross Income $670,967 $818,808 $11,867 $11.41 Admin. & Repair/Maintenance 90,138 8.0% 92,842 6.9% 0.86

Retail Supplies 6,000 0.5% 6,180 0.5% 0.06

Gross Scheduled Rent 370,782 437,014 12.07 Pest Contral 3,600 0.3% 3,708 0.3% 0.03

Expense Reimbursements 84,020 87,952 2.43 Elevator 6,000 0.5% 6,180 0.5% 0.06

All Other Income 14,600 14,600 0.40 Alarms systems & Fire Supression 6,000 0.5% 6,180 0.5% 0.06

General Vacancy (7,416) 2.0% (21,851) 5.0% HVAC Maintenance P/R 5,600 0.5% 5,768 0.4% 0.05

Effective Gross Income $461,986 $517,715 $14.30 Security 1,800 0.2% 1,854 0.1% 0.02

Combined EGI $1,132,953 $1,336,523 $12.38 Maintenance Labor - P/R 24,228 2.1% 24,955 1.9% 0.23

Lanscaping Labor 4,600 0.4% 4,738 0.4% 0.04

Cleaning 14,000 1.2% 14,420 1.1% 0.13

Parking Lot Lease 4,500 0.4% 4,500 0.3% 0.04 ASKING RENTS PER UNIT/SF VACANCY Operating Reserves 7,885 0.7% 8,227 0.6% 0.08 Current $950 - Competitors 2.4% 23 Units Management Fee 33,836 3.0% 39,427 3.0% 0.37 Last Quarter $948 - Submarket 2.0% 118 Units Total Expenses $372,942 $393,837 $3.65 Year Ago $940 - Expenses as % of Combined EGI 32.9% 29.5% Competitors $1,138 $1.17/SF Net Operating Income $760,011 $942,685 $8.73 14 Submarket $938 $1.27/SF INCOME 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 CASH FLOW Multifamily

Gross Potential Rent 912,810 958,451 1,006,373 1,056,692 1,109,527 1,165,003 1,223,253 1,284,416 1,348,636 1,416,068

Loss / Gain to Lease (109,537) (28,754) (30,191) (31,701) (33,286) (34,950) (36,698) (38,532) (40,459) (42,482)

Gross Scheduled Rent 803,273 929,697 976,182 1,024,991 1,076,241 1,130,053 1,186,555 1,245,883 1,308,177 1,373,586

All Other Income 31,600 32,232 32,877 33,534 34,205 34,889 35,587 36,298 37,024 37,765

Vacancy (16,065) (16,226) (16,388) (16,552) (16,718) (16,885) (17,054) (17,224) (17,397) (17,571)

Effective Gross Income 818,808 945,703 992,670 1,041,973 1,093,728 1,148,057 1,205,088 1,264,957 1,327,805 1,393,781

Retail

Gross Scheduled Rent 437,014 458,865 481,808 505,898 531,193 557,753 585,641 614,923 645,669 677,952

Expense Reimbursements 87,952 90,591 93,308 96,108 98,991 101,960 105,019 108,170 111,415 114,757

All Other Income 14,600 14,892 15,190 15,494 15,804 16,120 16,442 16,771 17,106 17,448

General Vacancy (21,851) (22,069) (22,290) (22,513) (22,738) (22,965) (23,195) (23,427) (23,661) (23,898)

Effective Gross Income 517,715 542,278 568,016 594,987 623,250 652,868 683,907 716,436 750,529 786,260

Combined EGI 24,228 2.1% 24,955 1.9% 0.23

EXPENSES

Operating Expenses (171,325) (178,178) (185,305) (192,717) (200,426) (208,443) (216,781) (225,452) (234,470) (243,849)

Real Estate Taxes (87,102) (89,280) (91,512) (93,799) (96,144) (98,548) (101,012) (103,537) (106,125) (108,778)

Insurance (42,230) (42,863) (43,506) (44,159) (44,821) (45,494) (46,176) (46,869) (47,572) (48,285)

Utilities (45,526) (46,209) (46,902) (47,606) (48,320) (49,044) (49,780) (50,527) (51,285) (52,054)

Management Fee (39,427) (43,895) (46,040) (48,290) (50,651) (53,127) (55,725) (58,451) (61,311) (64,311)

Total Expenses (385,610) (400,425) (413,265) (426,571) (440,362) (454,656) (469,474) (484,836) (500,763) (517,278)

Operating Reserves (8,227) (8,227) (8,227) (8,227) (8,227) (8,227) (8,227) (8,227) (8,227) (8,227)

Net Operating Income 942,685 1,079,329 1,139,194 1,202,161 1,268,388 1,338,041 1,411,294 1,488,331 1,569,344 1,654,536

PREICE/NET RESIDUAL VALUE 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

16 Cash Flow Before Debt Financing 942,685 1,079,329 1,139,194 1,202,161 1,268,388 1,338,041 1,411,294 1,488,331 1,569,344 1,654,536 17 PROFORMA CASH FLOW

FORECAST YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 YEAR 11

Apr-2022 Apr-2023 Apr-2024 Apr-2025 Apr-2026 Apr-2027 Apr-2028 Apr-2029 Apr-2030 Apr-2031 Apr-2032 Total

Rental Revenue

Potential Base Rent 1,120,663 1,295,108 1,335,845 1,373,978 1,413,349 1,462,230 1,502,619 1,545,612 1,609,850 1,660,775 1,717,085 16,037,113

Absorption & Turnover Vacancy -1,914 -815 0 0 -3,052 -57,433 0 0 -16,183 -3,538 -66,581 -149,515

Free Rent 0 0 0 0 0 -3,867 0 0 0 0 -4,483 -8,350

Scheduled Base Rent 1,118,749 1,294,293 1,335,845 1,373,978 1,410,298 1,400,929 1,502,619 1,545,612 1,593,667 1,657,238 1,646,022 15,879,248

Total Rental Revenue 1,118,749 1,294,293 1,335,845 1,373,978 1,410,298 1,400,929 1,502,619 1,545,612 1,593,667 1,657,238 1,646,022 15,879,248

Other Tenant Revenue

Total Expense Recoveries 84,020 87,952 91,941 95,988 99,954 89,130 108,904 113,286 122,405 131,012 117,204 1,141,796

Total Other Tenant Revenue 84,020 87,952 91,941 95,988 99,954 89,130 108,904 113,286 122,405 131,012 117,204 1,141,796

Total Tenant Revenue 1,202,769 1,382,245 1,427,786 1,469,966 1,510,251 1,490,059 1,611,523 1,658,898 1,716,072 1,788,250 1,763,225 17,021,045

Other Revenue

Application Fees 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 19,800

Late Fees 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 19,800

Laundry Service Income 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 121,000

Total Other Revenue 14,600 14,600 14,600 14,600 14,600 14,600 14,600 14,600 14,600 14,600 14,600 160,600

Potential Gross Revenue 1,217,369 1,396,845 1,442,386 1,484,566 1,524,851 1,504,659 1,626,123 1,673,498 1,730,672 1,802,850 1,777,825 17,181,645

Vacancy & Credit Loss

Vacancy Allowance -23,506 -24,163 -24,839 -25,529 -23,184 -22,657 -28,091 -28,864 -23,255 -28,633 -27,657 -280,378

Credit Loss -18,681 -22,840 -23,640 -24,349 -25,080 -25,832 -26,607 -27,406 -28,228 -29,075 -29,947 -281,685

Total Vacancy & Credit Loss -42,187 -47,003 -48,479 -49,879 -48,264 -48,489 -54,699 -56,269 -51,483 -57,707 -57,604 -562,063

Effective Gross Revenue 1,175,182 1,349,842 1,393,907 1,434,687 1,476,588 1,456,170 1,571,424 1,617,228 1,679,189 1,745,143 1,720,221 16,619,582

Operating Expenses

Repairs & Maintenance 96,328 99,218 102,194 105,260 108,418 111,671 115,021 118,471 122,025 125,686 129,457 1,233,749

Utilities & Trash 44,400 45,732 47,104 48,517 49,973 51,472 53,016 54,606 56,245 57,932 59,670 568,666

Administrative 66,138 68,122 70,166 72,271 74,439 76,672 78,972 81,341 83,782 86,295 88,884 847,082

Landlord Expenses 11,655 12,005 12,365 12,736 13,118 13,511 13,917 14,334 14,764 15,207 15,663 149,275

Insurance 41,000 42,230 43,497 44,802 46,146 47,530 48,956 50,425 51,938 53,496 55,101 525,120

Management Fee 35,255 40,495 41,817 43,041 44,298 43,685 47,143 48,517 50,376 52,354 51,607 498,587

Real Estate Taxes 79,555 87,102 94,650 102,197 109,745 113,397 120,945 128,493 135,188 139,244 143,421 1,253,938

Total Operating Expenses 374,331 394,904 411,793 428,823 446,136 457,938 477,969 496,188 514,317 530,214 543,803 5,076,417

Net Operating Income 800,850 954,938 982,114 1,005,864 1,030,452 998,232 1,093,455 1,121,040 1,164,872 1,214,929 1,176,419 11,543,165

18 Subject Property

2 1 The Metropolitan

Average Studio One Bed Rent 2 Country Club Apartments $1,200

3 3 Washington Towers $960 Average $802 $720 1

$480

$240

Big Mill The Country Washington Apartments Metropolitan Club Towers Apartments RENT COMPARABLES

Reading, PA 20 21 RENT COMPARABLES

BIG MILL APARTMENTS 1 THE METROPOLITAN 2 COUNTRY CLUB APTS 3 WASHINGTON TOWERS 702 N 8th St, Reading, PA 19604 1001 Hill Ave, Reading, PA 355 Lackawanna St, Reading, PA 50 N 4th St, Reading, PA

Type SF Rent Type SF Rent Type SF Rent Type SF Rent

Studio One Bedroom 488 $608 Studio One Bedroom 786 $945 Studio One Bedroom 994 $994 Studio One Bedroom 854 $662

22 23 2 Subject Property 4

1 Oak Forest Apartments

2 Average Two-Bed Rent 1 Antietam Arms Apartments

$1,200 Average 3 $1,121 Jamestown Village Apartments $960

4 Lofts at 525 $720

$480

$240

3 $0

Antietam Arms Jamestown Big Mill Oak Forest Lofts at 525 Apartments Apartments Village Apartments Apartments RENT COMPARABLES

Reading, PA 25 RENT COMPARABLES

BIG MILL APARTMENTS 1 OAK FOREST APARTMENTS 2 ANTIETAM ARMS 3 JAMESTOWN VILLAGE 4 LOFTS AT 525 702 N 8th St, Reading, PA 19604 2220A Alsace Rd, Reading, PA 19604 850 Carsonia Ave, Reading, PA 19606 300 Lackawanna St, Reading, PA 19601 525 Lancaster Ave, Reading, PA 19611

Total Units 69 Total Units 143 Total Units 148 Total Units 275 Total Units 71

SF 22,100 SF 204,969 SF 162,549 SF 291,543 SF 110,000

Occupancy 100% Year Built 1968 Year Built 1967 Year Built 1973 Year Built 1927

Year Built 1904 Lot Size 6.60 Ac Lot Size 7.56 Ac Lot Size 10.43 Ac Lot Size 3 Ac

Lot Size 0.93 Ac

Type SF Rent Type SF Rent Type SF Rent Type SF Rent Type SF Rent

2 Bedrooms 1156 $865 1 Bedroom 693 $937 1 Bedroom 676 $920 1 Bedroom 500 $945 1 Bedroom 822 $1,040

Average Totals 1156 $865 2 Bedroom 893 $1,147 2 Bedroom 957 $1,124 2 Bedroom 654 $1,063 2 Bedroom 951 $1,150

Average Totals 831 $1,082 Average Totals 828 $1,030 Average Totals 585 $1,010 Average Totals 886 $1,095 MARKET LEADING DEMOGRAPHICS

Excellent Apartment Fundamentals The markets proximity to employment centers, retail, major highways, and the proposed train station with service directly to Philadelphia makes the properties a desirable place of residents for tenants of all ages.

MARKET RENTS & GROWTH READING at a glance 301,480 Total Population 3% Annual Population Growth 2010-20 36 READING, PA Total Households 112,940 Median Age Average Household Size 3.2 $79,249 Median Household Income $61,057 Average Household Income Median Home Value $175,390 MARKET OVERVIEW Median Year Built 1960 151,964 Average Rent $1,002 Total Daytime Employees Population Density 488 Per Square Mile Reading, PA Rent Increase (since 2019) 5.4% 29 THE CITY OF READING, PA

Located in southeastern Pennsylvania on the Schuylkill River, Reading sits about halfway between Harrisburg and Philadelphia. Nicknamed the Pretzel City for its numerous local pretzel bakeries, Reading is home to an array of independent businesses, many of which line Penn Street in Downtown Reading and Penn Avenue in West Reading.

Among Reading’s many vibrant attractions are GoggleWorks Center for the Arts, Reading Public Museum, Mid-Atlantic Air Museum, the Pagoda, and FirstEnergy Stadium—home of the minor-league Reading Fightin Phils. Opportunities for outdoor adventure abound, with a host of scenic parks and more than 125 miles of biking and hiking trails in Greater Reading.

The population in this city grows significantly every year, having gone up 12.5% since 2000. There are currently 112,940 households in Reading, and its estimated to increase 1.89% within the next five years. The economy in Reading has been steady over the past recent years, with a counted 151,964 employees working throughout the city in 2019.

Strategic Location

Located 3.5 Miles from the Reading Regional Carl A. Spaatz Field Airport serving South- eastern Pennsylvania

Apartments.com Gave Reading a Walkability Score of 78 - Very Walkable ATTRACTIONS A- Overall Niche Diversity Grade for Reading, PA READING, PA IN THE PRESS

122 Miles BIG MILL APARTMENTS Reading-to-Philadelphia Rail Proposal Gaining Steam The idea to reconnect Berks County by rail with Philadelphia and other places in between is gaining steam.

61 Miles For the full story: Article Reading-to-Philly Rail Could Bring $1B Boost to Region 124 Miles 65 Miles First trains could be running by 2025.

For the full story: Article

Life in West Reading, Berks County West Reading, home of Reading Hospital - Tower Health, is a thriving borough with walkable downtown that features shops, restaurants and boutiques. 108 Miles For the full story: Article Reading Campus In 2021, Reading Hospital will become a 4-year regional campus of the College of Medicine and will begin training first-year medical students.

For the full story: Article

Alvernia College Breaks Ground on Reading College Town Project

For the full story: Article 33 Virtual Tour

BIG MILL APARTMENTS 702 N 8th Street, Reading, PA 19604 Class A Product - Fully Redeveloped in 2017

Offering Memorandum