Market Feasibility Analysis

Parkwood Apartments

Fairfax County, Virginia

Prepared for:

MRK Partners

Site Inspection: May 31, 2018

Effective Date: May 31, 2018 Parkwood Apartments | Table of Contents

TABLE OF CONTENTS TABLE OF CONTENTS ...... I TABLES, FIGURES AND MAPS...... IV EXECUTIVE SUMMARY...... VI INTRODUCTION ...... 1 A. Overview of Subject...... 1 B. Purpose...... 1 C. Format of Report...... 1 D. Client, Intended User, and Intended Use...... 2 E. Applicable Requirements...... 2 F. Scope of Work ...... 2 G. Report Limitations ...... 2 H. Other Pertinent Remarks ...... 2 PROJECT DESCRIPTION ...... 3 A. Project Overview ...... 3 B. Project Type and Target Market...... 3 C. Building Types and Placement...... 3 D. Detailed Project Description...... 5 1. Project Description ...... 5 2. Other Proposed Uses...... 7 3. Proposed Timing of Development...... 7 SITE AND NEIGHBORHOOD ANALYSIS...... 8 A. Site Analysis...... 8 1. Site Location...... 8 2. Existing Uses...... 9 3. Size, Shape, and Topography...... 9 4. General Description of Land Uses Surrounding the Subject Site...... 10 5. Specific Identification of Land Uses Surrounding the Subject Site...... 11 B. Neighborhood Analysis ...... 12 1. General Description of Neighborhood...... 12 2. Evidence of New Private/Public Investment...... 12 C. Site Visibility and Accessibility...... 12 1. Visibility...... 12 2. Vehicular Access...... 12 3. Availability of Public and Inter Regional Transit...... 12 4. Pedestrian Access...... 13 5. Roadway Improvements under Construction and Planned ...... 13 6. Public Safety...... 13 D. Residential Support Network ...... 14 1. Key Facilities and Services near the Subject Site ...... 14 2. Essential Services...... 16 ECONOMIC CONTEXT...... 18 A. Introduction ...... 18 B. Labor Force, Resident Employment, and Unemployment ...... 18 1. Trends in County Labor Force and Resident Employment...... 18 2. Trends in County Unemployment Rate...... 18 C. Commutation Patterns...... 19 D. County At-Place Employment...... 20 1. Trends in Total At-Place Employment...... 20 2. At-Place Employment by Industry Sector...... 21

Page i Parkwood Apartments | Table of Contents E. Wage Data...... 22 F. Major Employers ...... 23 G. Economic Expansions, Contractions, and Projections...... 25 H. Economic Conclusions and Projections...... 25 HOUSING MARKET AREA...... 26 A. Introduction ...... 26 B. Delineation of Market Area...... 26 DEMOGRAPHIC ANALYSIS...... 28 A. Introduction and Methodology ...... 28 B. Trends in Population and Households ...... 28 1. Recent Past Trends ...... 28 2. Projected Trends ...... 29 3. Building Permit Trends...... 29 C. Demographic Characteristics...... 30 1. Age Distribution and Household Type ...... 30 2. Renter Household Characteristics ...... 31 3. Income Characteristics...... 32 4. Cost-Burdened Renter Households ...... 33 COMPETITIVE HOUSING ANALYSIS ...... 35 A. Introduction and Sources of Information...... 35 B. Overview of Market Area Housing Stock ...... 35 C. Survey of General Occupancy Rental Communities...... 36 1. Introduction to the Rental Housing Survey...... 36 2. Location...... 37 3. Age of Communities ...... 37 4. Structure Type...... 38 5. Size of Communities ...... 38 6. Vacancy Rates...... 39 7. Rent Concessions...... 39 8. Absorption History...... 39 D. Analysis of Rental Pricing and Product...... 39 1. Payment of Utility Costs...... 39 2. Unit Features...... 39 3. Parking ...... 40 4. Community Amenities ...... 41 5. Distribution of Units by Bedroom Type...... 42 6. Effective Rents...... 43 E. Most Comparable/Relevant Communities...... 44 F. Derivation of Market Rent...... 45 1. Introduction ...... 45 2. Selection of Comparable Properties...... 45 3. Description of Rent Adjustments...... 45 G. Achievable Restricted Rents...... 49 H. Proposed and Under Construction Rental Communities ...... 49 FINDINGS AND CONCLUSIONS ...... 52 A. Key Findings...... 52 1. Site and Neighborhood Analysis...... 52 2. Economic Context...... 52 3. Population and Household Trends ...... 52 4. Demographic Analysis...... 53 5. Competitive Housing Analysis ...... 53 B. Derivation of Net Demand ...... 54

Page ii Parkwood Apartments | Table of Contents 1. Methodology...... 54 2. Net Demand Calculation...... 55 3. Conclusions on Net Demand...... 57 C. Effective Demand – Affordability/Capture & Penetration Analyses...... 57 1. Methodology...... 57 2. Affordability Analysis...... 58 3. Penetration Analysis...... 59 4. Conclusions on Affordability and Penetration...... 60 D. VHDA Demand Methodology...... 61 1. VHDA Demand Analysis ...... 61 2. Conclusions on VHDA Demand...... 62 E. Target Markets ...... 62 F. Product Evaluation...... 62 G. Price Position...... 63 H. Absorption Estimate ...... 64 I. Impact on Existing Market...... 65 APPENDIX 1 UNDERLYING ASSUMPTIONS AND LIMITING CONDITIONS...... 66 APPENDIX 2 NCHMA CHECKLIST...... 68 APPENDIX 3 ANALYST RESUMES ...... 71 APPENDIX 4 VHDA CERTIFICATION ...... 72 APPENDIX 5 RENTAL COMMUNITY PROFILES ...... 73

Page iii Parkwood Apartments | Tables, Figures and Maps TABLES, FIGURES AND MAPS

Table 1 LIHTC Income and Rent Limits, Washington-Arlington-Alexandria HUD Metro Area...... 1 Table 2 Detailed Unit Mix and Rents, Parkwood Apartments...... 5 Table 3 Parkwood Apartments Project Details...... 7 Table 4 Key Facilities and Services...... 15 Table 5 Fairfax County Schools, Test Scores ...... 17 Table 6 Labor Force and Unemployment Rates ...... 18 Table 7 Commutation Data, Parkwood Market Area ...... 19 Table 8 Wage Data, Fairfax County ...... 22 Table 9 Major Employers, Fairfax County...... 24 Table 10 Population and Household Trends ...... 28 Table 11 Building Permits by Structure Type ...... 29 Table 12 Age Distribution...... 30 Table 13 Households by Household Type...... 31 Table 14 Households by Tenure...... 31 Table 15 Renter Households by Age of Householder...... 32 Table 16 Renter Households by Household Size...... 32 Table 17 Household Income ...... 33 Table 18 Household Income by Tenure, Parkwood Market Area...... 33 Table 19 Rent Burden by Household Income, 2012-2016, Primary Market Area...... 34 Table 20 Renter Occupied Housing Units by Structure Type ...... 35 Table 21 Occupied Units by Tenure and Year Built...... 36 Table 22 Value of Owner Occupied Housing Stock...... 36 Table 23 Rental Communities Summary...... 38 Table 24 Utility Arrangement and Unit Features, Surveyed Communities ...... 40 Table 25 Garage Parking Fees ...... 41 Table 26 Community Amenities, Surveyed Communities...... 42 Table 27 Unit Distribution, Size and Pricing, Surveyed Rental Communities...... 43 Table 28 Rent Adjustments Summary ...... 46 Table 29 Market Rent Analysis – One-Bedroom Units...... 47 Table 30 Market Rent Analysis – Two-Bedroom Units ...... 48 Table 31 Market Rent Advantage - Summary ...... 49 Table 32 Achievable Tax Credit Rent...... 49 Table 33 Pipeline Communities, Parkwood Market Area ...... 50 Table 34 Derivation of Net Demand, Parkwood Market Area...... 56 Table 35 2019 Total and Renter Income Distribution, Parkwood Market Area ...... 58 Table 36 2019 Affordability Analysis for Parkwood Apartments...... 59 Table 37 Penetration Analysis for Parkwood Apartments...... 60 Table 38 VHDA Demand by Overall Income Targeting ...... 62

Figure 1 Site Map, Parkwood Apartments...... 3 Figure 2 Site Plan...... 4 Figure 3 Views of Existing Community...... 4 Figure 4 Views of the Subject Site...... 9 Figure 5 Satellite Image of Site and Surrounding Land Uses...... 10 Figure 6 Views of Land Uses Near the Site...... 11 Figure 7 At-Place Employment, Fairfax County...... 20 Figure 8 Total Employment by Sector...... 21 Figure 9 Employment Change by Sector, 2011-2017(Q1)...... 22 Figure 10 Wage by Sector, Fairfax County...... 23 Figure 11 Price Position of Parkwood Apartments...... 64

Page iv Parkwood Apartments | Tables, Figures and Maps Map 1 Site Location...... 8 Map 2 Crime Index Map ...... 14 Map 3 Location of Key Facilities and Services...... 15 Map 4 Major Employers, Fairfax County ...... 24 Map 5 Parkwood Market Area...... 27 Map 6 Surveyed Competitive Rental Communities...... 37 Map 7 Pipeline Rental Communities, Parkwood Market Area...... 51

Page v Parkwood Apartments | Executive Summary

EXECUTIVE SUMMARY

MRK Partners has retained Real Property Research Group, Inc. (RPRG) to conduct a market assessment to evaluate the proposed rehabilitation of Parkwood Apartments, a multi-family rental community in the Falls Church area of unincorporated Fairfax County, Virginia. Parkwood Apartments will comprise 225 units contained in 18 garden style buildings. The existing, occupied community was placed in service in 1949 with 221 units and was renovated in 1994. As part of this upcoming rehabilitation, four units will be added to three residential buildings on the property. All units will continue to be restricted to households earning up to 60 percent AMI.

The subject property will offer one-bedroom and two bedroom units, a breakdown of which includes:

# # Published Net Utility AMI Type Units Net Rent* Gross Rent Bed Bath Sq Ft Rent/Sq Ft Allowance 60% Renovated 48 1 1 610 $1,274 $2.09 $45 $1,319 60% New Construction 1 1 1 600 $1,274 $2.12 $45 $1,319 Subtotal 49 610 $1,274 $2.09 45 $1,319 60% Renovated 173 2 1 750 $1,523 $2.03 $59 $1,582 60% New Construction 3 2 1 764 $1,523 $1.99 $59 $1,582 Subtotal 176 750 $1,523 $2.03 59 $1,582 Total 225 *All utilities except electricity are included in rent. Source: MRK Partners

Based on our research, including a site visit on May 31, 2018, we have arrived at the following findings:

Site Analysis: Parkwood Apartments is in an appropriate location for a general occupancy, affordable rental community, with convenient access to services and amenities, employment nodes and public bus transportation.  The subject community is located south of Leesburg Pike in the Falls Church section of unincorporated Fairfax County. Surrounding land uses include other older garden apartments and single family detached homes.  Several public bus routes have stops near the subject community and the site is accessible to many major arterials in this section of northern Virginia, including Leesburg Pike, Columbia Pike, Route 50 and I-395.  Residents of Parkwood Apartments can walk to a public library, elementary school, Rite Aid pharmacy, and other retail and services on Leesburg Pike. Additional services and amenities are within convenient driving distance.  The subject site has been established as a successful location for an affordable rental community. Parkwood Apartments is fully leased with a waiting list of about 220 households. Economic Analysis: Fairfax County has a strong economy with very low unemployment rates and ongoing job expansions.  Fairfax County’s most recent annual average unemployment rate of 3.0 percent is lower than the statewide average of 3.8 percent and the national average of 4.4 percent.  From 2011 to 2016, Fairfax County had net annual job gains in four of six years, with an overall net gain of nearly 13,900 jobs, or more than 80 percent of the jobs lost during the recession.

Page vi Parkwood Apartments | Executive Summary

 More than one-third of jobs in the county are in the Professional-Business sector, much higher than the national proportion of 14 percent.  Major employers in Fairfax County include the Department of Defense, defense contractor Booz Allen and Hamilton and financial institutions Fannie Mae and Capital One Bank. Population and Household Trends: The Parkwood Market Area had moderate population and household growth between 2000 and 2010. RPRG projects similar household growth in the market area over the next five years, in line with household growth rates for Fairfax County as a whole.  The market area added 4,383 people (6.6 percent growth) and 1,637 households (5.9 percent growth) from the 2000 to 2010 census counts. Fairfax County increased by 11.5 percent for population and households during the decade.  The market area is projected to reach 75,662 people and 31,238 households by 2023. Annual increases in the market area from 2018 to 2023 are projected at 0.6 percent for population (426 people) and 0.6 percent for households (174 households). Fairfax County also is projected to increase in population and households at an annual rate of 0.6 percent over the same period. Demographic Analysis: The demographics of the Parkwood Market Area reflect its high-density suburban location with small household sizes, high renter percentage, and mixed income profile.  The median age of the population in the Parkwood Market Area is 36 years old compared to 38 years in Fairfax County. Thirty-seven percent of the population in the market area is adults age 35 to 61, in line with the countywide proportion of 38 percent.  The most common household type in the market area as of 2010 is a single individual at 37 percent of all households compared to 23 percent of households countywide.  The Parkwood Market Area’s renter percentage decreased from 62.3 percent in 2000 to 59.3 percent. In the last eight years, the renter percentage increased to 62.1 percent, as all net new growth was attributed to renter households. The market area’s renter household base is projected to remain steady at 62.3 percent through 2023, much higher than the countywide proportion of 33.8 percent.  Sixty-three percent of renter households in the Parkwood Market Area had one or two people including 37 percent with one person. Three and four person households comprised 25 percent of renter households in the Parkwood Market Area and 12 percent had five or more people.  The Parkwood Market Area’s estimated 2018 median income of $78,459 is $39,524 or 33.5 percent less than the $117,982 median income in Fairfax County.  The median income by tenure in the Parkwood Market Area as of 2018 was $66,497 among renters compared to $108,482 among owner households. Twenty-three percent of renter households earn less than $35,000, and 13 percent earn between $35,000 and $50,000. Competitive Analysis: The multifamily rental communities in the Parkwood Market Area are performing well with low stabilized vacancy rates.  The surveyed communities are performing well with a stabilized vacancy rate of 1.4 percent among 8,559 surveyed units at 24 communities. The stabilized vacancy among Upper Tier properties is 2.3 percent, with one property in lease up. The Lower Tier aggregate vacancy rate is 1.1 percent, and the LIHTC vacancy rate is 0.7 percent. The subject community is fully leased with a waiting list of about 220 households.  The average year built of 2000 among Upper Tier properties and 1961 among Lower Tier properties. The subject community was placed in service in 1949 and is among the oldest properties in the market.

Page vii Parkwood Apartments | Executive Summary

 The only property to open since 2009 in this market is e-lofts, a live-work property that is an adaptive reuse of an office building. Since opening in September 2016, e-lofts is leasing up at an average pace of less than nine units per month. We do not believe this slow pace is representative of typical market conditions, given the unique product type and its pricing well above the top of the market.

 Average effective rents among Lower Tier communities are: o Studio rents at $1,337 for 517 square feet or $2.59 per square foot. Grandview is the only LIHTC property to offer studio units, and has a rent of $1,211 for units at 60 percent AMI. o One bedroom rents at $1,413 for 722 square feet or $1.96 per square foot. One- bedroom LIHTC units at 60 percent AMI range from $1,273 to $1,310 o Two bedroom rents at $1,655 for 960 square feet or $1.72 per square foot. Two- bedroom LIHTC rents at 60 percent AMI range from $1,520 to $1,569. o Three bedroom rents at $2,054 for 1,190 square feet or $1.73 per square foot. Three- bedroom LIHTC rents at 60 percent AMI range from $1,778 to $1,810.  RPRG identified three communities under construction and one property that is reasonably likely to deliver in the next three years, for a short term pipeline of 558 units. Three additional communities with 920 units are in the long term pipeline. Based on these findings, we have arrived at the following conclusions:  Demand for Subject Units: The demand estimate indicates demand for 805 rental units in the market area over the next three years. Net demand with the addition of the four near term pipeline communities and the four new units at the subject property would be 271 units. Using VHDA’s demand methodology, the project-wide capture rate is 14.8 percent.

 Affordability and Penetration: The affordability capture rates indicate a significant number of income qualified renter households within the projected target market for the units at Parkwood Apartments. A projected 2,851 renter households fall within the subject property’s projected income range of $45,223 to $63,300. The penetration rate of 28.3 percent indicates need for additional LIHTC units at 60 percent AMI in this market, even with the introduction of three new construction pipeline LIHTC properties.

 Unit Distribution: With the addition of four units, the resulting unit mix at the subject community is 49 one-bedroom units (22 percent) and 176 two-bedroom units (78 percent). The average unit distribution of Lower Tier communities in the market area is 40 percent one- bedroom units, 52 percent two-bedroom units, three percent three-bedroom units and five percent efficiencies. The subject’s unit mix is reasonable and will serve small households of one or two households, particularly given the small unit sizes. The predominance of two- bedroom units allows the subject to serve couples and small families. This unit mix has proven to be marketable as the community is fully leased and with a long waiting list.  Unit Size: The average unit sizes at Parkwood Apartments are 610 square feet for one bedroom units and 750 square feet for two bedroom units. These are among the smallest units in the market and are below the average Lower Tier unit sizes of 722 square feet for one-bedroom units and 960 square feet for two-bedroom units. The small units are a result of the age of the property (placed in service in 1949). The small sizes are reasonable given that the subject provides an affordable housing option at the low end of the rent range. Furthermore, the unit sizes are similar to those of the most competitive, affordable product in the market, and the property maintains full occupancy and long waiting lists despite the small sizes.

Page viii Parkwood Apartments | Executive Summary

 Unit Features: The subject’s units have central air conditioning, dishwashers, and garbage disposals. As part of the rehabilitation, new luxury vinyl tile will be installed in kitchens, bathrooms, and entryways. All units will have new black appliances including refrigerators/freezers, dishwashers and ranges. In addition, new cabinets, countertops and plumbing fixtures will be installed. The new counters will be cultured granite. This will increase the marketability of the community and will place it at an advantage with respect to the other older Lower Tier properties in the market.  Community Amenities: The subject community has three laundry rooms, two playgrounds and a community room. As part of the renovations, the community room will be updated and possibly relocated, and will have a computer center. This amenity package is appropriate for an affordable rental community and will be competitive in the market.  Price Position: The subject’s pricing is appropriate and very competitive. Among each bedroom size:

o One bedroom units –The subject’s units are among the smallest in the market. The pricing is at the lower end of the market. The units are priced in line with the other LIHTC units at 60 percent AMI in the market.

o Two bedroom units – The positioning is the same as that of the one-bedroom units. The subject’s units are among the smallest in the market. The pricing is at the lower end of the market. The units are priced in line with the other LIHTC units at 60 percent AMI in the market.

Absorption Estimate: The subject is an existing, occupied property, and the rehabilitation will not result in any permanent displacement of existing residents. As part of the scope of work, four units will be added to the community. Given that the current waiting list for the community is 220 households, and the renovation will increase the marketability of the subject, we expect a very short absorption period. The four new units and any additional vacant units could be leased within two months of the completion of renovations. Impact on Existing Market: Given the ongoing household growth projected for the Parkwood Market Area, strong economic conditions, and low vacancy rates especially at LIHTC properties, we do not believe the rehabilitation of Parkwood Apartments will negatively impact the existing communities in the Parkwood Market Area in the near or long term. The proposed renovations will increase the useful life of the property, and will bring improvements to a community that provides a much needed affordable housing option for moderate income families in an area with high housing costs.

Page ix Parkwood Apartments | Introduction

INTRODUCTION

A. Overview of Subject The subject of this report is the proposed rehabilitation of a multi-family rental community in the Falls Church area of unincorporated Fairfax County, Virginia. Parkwood Apartments will comprise 225 units contained in 18 garden style buildings. The existing, occupied community was placed in service in 1949 with 221 units and was renovated in 1994. As part of this upcoming rehabilitation, four units will be added to three residential buildings on the property. All units will continue to restricted to households earning up to 60 percent AMI. Table 1 presents applicable income and rent limits for the Washington- Arlington-Alexandria HUD Metro Area in which the subject is located. Table 1 LIHTC Income and Rent Limits, Washington-Arlington-Alexandria HUD Metro Area

Household Income Limits by Household Size: Household Size 30% 40% 50% 60% 80% 100% 120% 150% 200% 1 Person $24,630 $32,840 $41,050 $49,260 $65,680 $82,100 $98,520 $123,150 $164,200 2 Persons $28,140 $37,520 $46,900 $56,280 $75,040 $93,800 $112,560 $140,700 $187,600 3 Persons $31,650 $42,200 $52,750 $63,300 $84,400 $105,500 $126,600 $158,250 $211,000 4 Persons $35,160 $46,880 $58,600 $70,320 $93,760 $117,200 $140,640 $175,800 $234,400 5 Persons $37,980 $50,640 $63,300 $75,960 $101,280 $126,600 $151,920 $189,900 $253,200 6 Persons $40,800 $54,400 $68,000 $81,600 $108,800 $136,000 $163,200 $204,000 $272,000 87 Persons $0 $0 $0 $0 $0 $0 Imputed Income Limits by Number of Bedroom (Assuming 1.5 persons per bedroom): # Bed- Persons rooms 30% 40% 50% 60% 80% 100% 120% 150% 200% 1 0 $24,630 $32,840 $41,050 $49,260 $65,680 $82,100 $98,520 $123,150 $164,200 1.5 1 $26,385 $35,180 $43,975 $52,770 $70,360 $87,950 $105,540 $131,925 $175,900 3 2 $31,650 $42,200 $52,750 $63,300 $84,400 $105,500 $126,600 $158,250 $211,000 4.5 3 $36,570 $48,760 $60,950 $73,140 $97,520 $121,900 $146,280 $182,850 $243,800 6 4 $40,800 $54,400 $68,000 $81,600 $108,800 $136,000 $163,200 $204,000 $272,000 LIHTC Tenant Rent Limits by Number of Bedrooms (assumes 1.5 persons per bedroom: 30% 40% 50% 60% 80% # Persons Gross Net Gross Net Gross Net Gross Net Gross Net Efficiency $615 $821 $1,026 $1,231 $1,642 1Bedroom $659 $614 $879 $834 $1,099 $1,054 $1,319 $1,274 $1,759 $1,714 2Bedroom $791 $732 $1,055 $996 $1,318 $1,259 $1,582 $1,523 $2,110 $2,051 3Bedroom $914 $1,219 $1,523 $1,828 $2,438 4 Bedroom $1,020 $1,360 $1,700 $2,040 $2,720 Source: U.S. Department of Housing and Urban Development

B. Purpose The purpose of this market study is to perform a market feasibility analysis through an examination of site characteristics, the economic context, a demographic analysis of the defined market area, a competitive housing analysis, a derivation of demand, and affordability/penetration rate analyses.

C. Format of Report The report format is Comprehensive. Accordingly, the market study addresses all required items set forth in the 2018 Market Study Guidelines of the Virginia Housing Development Authority (VHDA). Furthermore, the market analyst has considered the recommended model content and market study index of the National Council of Housing Market Analysts (NCHMA).

Page 1 Parkwood Apartments | Introduction

D. Client, Intended User, and Intended Use The Client is MRK Partners (Developer). Other intended users are VHDA and other potential lenders or investors. The report is expected to be submitted to VHDA as part of an application for four percent tax credits.

E. Applicable Requirements This market study is intended to conform to the requirements of the following:  VHDA’s 2018 Market Study Guidelines.  NCHMA’s Model Content Standards and Market Study Checklist.

F. Scope of Work To determine the appropriate scope of work for the assignment, we considered the intended use of the market study, the needs of the user, the complexity of the property, and other pertinent factors. Our concluded scope of work is described below:  Please refer to Appendix 2 for a detailed list of NCHMA requirements and the corresponding pages of requirements within the report.  Kara Olsen Salazar (Senior Analyst) completed field analysis including an inspection of the subject site, comparable communities, and market area on May 31, 2018.  Information gathered through field and phone interviews and email correspondence was used throughout the various sections of this report. The interviewees included rental community property managers and Ervin Uriarti, Land Use Aide, Mason District (Fairfax County).  All pertinent information obtained was incorporated in the appropriate section(s) of this report.

G. Report Limitations The conclusions reached in a market assessment are inherently subjective and should not be relied upon as a determinative predictor of results that will actually occur in the marketplace. There can be no assurance that the estimates made or assumptions employed in preparing this report will in fact be realized or that other methods or assumptions might not be appropriate. The conclusions expressed in this report are as of the date of this report, and an analysis conducted as of another date may require different conclusions. The actual results achieved will depend on a variety of factors, including the performance of management, the impact of changes in general and local economic conditions, and the absence of material changes in the regulatory or competitive environment. Reference is made to the statement of Underlying Assumptions and Limiting Conditions contained in Appendix I of this report.

H. Other Pertinent Remarks None.

Page 2 Parkwood Apartments | Project Description

PROJECT DESCRIPTION

A. Project Overview Parkwood Apartments is an existing 221-unit garden apartment community in the Falls Church section of unincorporated Fairfax County, Virginia. The property was placed in service in 1949 and was renovated in 1994. All units are LIHTC units serving households earning up to 60 percent AMI. MRK Partners is seeking four percent tax credits to rehabilitate the existing community, and to add four new residential units to existing buildings on the site, for a new total of 225 units.

B. Project Type and Target Market Parkwood Apartments is a general occupancy LIHTC property. With the addition of four units, the project unit mix will consist of 49 one-bedroom units (22 percent) and 176 two-bedroom units (78 percent). As such, the project will serve primarily small households of one or two persons. All units will continue to be affordable to households earning up to 60 percent AMI. No rent increases are planned on completion of renovations, and the four new units will have the same rents as the existing units.

C. Building Types and Placement Parkwood Apartments consists of 18 garden-style residential buildings (Figure 1, Figure 2). One building houses the leasing/management offices, and three buildings have laundry rooms. One building has a party room, and two playgrounds are on the site. The buildings are east of Glen Carlyn Drive, along Vista Drive and Knollwood Drive.

Figure 1 Site Map, Parkwood Apartments

Source: MRK Partners

Page 3 Parkwood Apartments | Project Description

Figure 2 Site Plan

Source: MRK Partners

Figure 3 presents photographs of interiors of two units at the existing community, and the party room.

Figure 3 Views of Existing Community

Unit kitchen Unit bathroom

Page 4 Parkwood Apartments | Project Description

Unit living room Party room

D. Detailed Project Description

1. Project Description As part of the rehabilitation of Parkwood Apartments, four units will be added to underutilized space on the first floor of three existing buildings. As such, the existing footprint will not be changed.

Following the rehabilitation, Parkwood Apartments will consist of 225 residential units including 49 one-bedroom units (22 percent) and 176 two-bedroom bedroom units (78 percent). The existing one- bedroom units will average 610 square feet in size, and the one new one-bedroom will be 600 square feet (Table 2). The existing two-bedroom units will average 750 square feet in size and the new two- bedrooms have an average size of 764 square feet. All units will have one bathroom. All units will be LIHTC units restricted to households with incomes at or below 60 percent AMI. There will be no rent increases upon completion of the rehabilitation, so all current households will continue to be qualified to reside in the community post rehabilitation.

Table 2 Detailed Unit Mix and Rents, Parkwood Apartments

# # Published Net Utility AMI Type Units Net Rent* Gross Rent Bed Bath Sq Ft Rent/Sq Ft Allowance 60% Renovated 48 1 1 610 $1,274 $2.09 $45 $1,319 60% New Construction 1 1 1 600 $1,274 $2.12 $45 $1,319 Subtotal 49 610 $1,274 $2.09 45 $1,319 60% Renovated 173 2 1 750 $1,523 $2.03 $59 $1,582 60% New Construction 3 2 1 764 $1,523 $1.99 $59 $1,582 Subtotal 176 750 $1,523 $2.03 59 $1,582 Total 225 *All utilities except electricity are included in rent. Source: MRK Partners

The rehabilitation has estimated hard costs of $11,100,000. Including the four new units that will be added to the property, the per unit cost of renovations for the 225 units is approximately $49,000. Renovations will be made to the interior and exterior of the project, and 13 units will be upgraded to become UFAS compliant.

Page 5 Parkwood Apartments | Project Description

Following renovations, all units will have a range, refrigerator, dishwasher and disposal (Table 3). Appliances will be black and counters will be cultured granite. Units will have new luxury vinyl tile in kitchens, bathrooms and entryways. Common area amenities will include a community room, two playgrounds, and three laundry rooms.

The following is a summary of key items in the scope of work:

Unit Interiors:  New Cabinets, countertops and plumbing fixtures. Countertops will be replaced with cultured granite.  New Appliances: All units will receive new refrigerators/freezers, dishwashers, and ranges. Appliances will be black.  New Flooring: All units will have new luxury vinyl tile in kitchens, bathrooms and entryways.  Thirteen units will be updated to be UFAS compliant.

Exteriors/Common Areas:  Building exteriors: A new roof and new windows will be installed. The exterior will be sealed to ensure waterproofing.  Plumbing: Supply and waste lines will be replaced throughout each building.  Asphalt and Pavement repair: Repairs will be made and measures taken to prevent cracking and damage.  Landscaping and new signage: The new landscaping will be with native plant materials.  The community room with be updated and possibly relocated, and will have a computer center.  Furniture, fixtures and equipment will be modernized and upgraded.

Page 6 Parkwood Apartments | Project Description

Table 3 Parkwood Apartments Project Details

Parkwood Apartments 6034 Vista Drive Falls Church, Virginia 22041 Project Information Additional Information Number of Residential Buildings 18 Construction Start Date 1/1/2019 Building Type Garden style Date of First Move-In 12/1/2019 Number of Stories Three to four w/basements Construction Finish Date 12/31/2019 Construction Type Rehab. Parking Type Surface Design Characteristics (exterior) Brick Parking Cost None Kitchen Amenities Dishwasher Yes Community Community room with computer center, two Disposal Yes Amenities playgrounds, three laundry rooms. Microwave No Range Yes Refrigerator Yes Utilities Included Trash Owner Central Air Conditioning. Black appliances, Sewer Owner cultured granite counters. UFAS units will get Cold Water Owner Unit Features new flooring throughout, including carpet in Heat Owner bedrooms. Standard units will have new luxury vinyl tile in kitchens, baths, and entryways. Heat Source Gas Hot Water Owner Electricity Tenant Source: MRK Partners

2. Other Proposed Uses None.

3. Proposed Timing of Development Construction is scheduled to commence in January 2019. The units will be renovated on a rolling basis through the year. The four newly constructed units will be available no later than early December 2019, with completion of construction in late December 2019.

All current residents are expected to be retained throughout the rehabilitation of the property, with no permanent displacement. Residents will be relocated to a nearby hotel for two weeks and will be provided a meal stipend due to the replacement of plumbing. Other final details concerning the temporary displacement have not been determined. All other work would normally be considered in place, but MRK Partners will try to do as much of the interior unit work as possible while tenants are out of their units.

Page 7 Parkwood Apartments | Site and Neighborhood Analysis

SITE AND NEIGHBORHOOD ANALYSIS

A. Site Analysis

1. Site Location The subject community is located at 6034 Vista Drive in the Falls Church area of unincorporated Fairfax County, Virginia (Map 1). The community is located off Leesburg Pike, about three miles southeast of the City of Falls Church, and about one mile west of the Bailey’s Crossroads retail district.

Map 1 Site Location

Page 8 Parkwood Apartments | Site and Neighborhood Analysis

2. Existing Uses The existing community consists of 221 units in 18 garden-style residential buildings with adjacent parking lots (Figure 4).

3. Size, Shape, and Topography The 11.52-acre site for Parkwood Apartments is irregular and appears to be flat.

Figure 4 Views of the Subject Site Playground on site.

Subject building and rental office on Glen Carlyn View of one of the subject's residential buildings Drive. from Glen Carlyn Drive facing east.

Open space at subject site from Glen Carlyn Drive facing east. Rear of one of subject buildings facing east from Glen Carlyn Drive.

Page 9 Parkwood Apartments | Site and Neighborhood Analysis

4. General Description of Land Uses Surrounding the Subject Site The subject site is in an established neighborhood (Figure 5). Surrounding land uses include other older, brick garden apartment communities and older single family homes. The subject is just south of Leesburg Pike, which offers a large concentration of retail and services. Most of these are older developments.

Figure 5 Satellite Image of Site and Surrounding Land Uses

Page 10 Parkwood Apartments | Site and Neighborhood Analysis

5. Specific Identification of Land Uses Surrounding the Subject Site The land uses directly bordering the subject site are as follows (Figure 6):

 North: Hillwood Manor Apartments.  East: Vista Gardens Apartments.  South: Woods.  West: Woodrow Wilson Library, single family detached homes on Glen Carlyn Drive. West of site, detached homes on Glen Carlyn Drive.

Figure 6 Views of Land Uses Near the Site

Library west of site.

East of site, Vista Gardens apartments.

Subject parking lot and woods south of site. North of site, Hillwood Manor Apartments.

Page 11 Parkwood Apartments | Site and Neighborhood Analysis

B. Neighborhood Analysis

1. General Description of Neighborhood The Falls Church area of unincorporated Fairfax County is an established area of mostly older residential and commercial development. The neighborhood in which the subject community is located is fairly densely developed with several other older garden apartment communities including Vista Gardens, Hillwood Manor, and Olde Salem Village. A public library is directly west of the subject community, and just west of this is an elementary school. North of the site is the highly trafficked Leesburg Pike. This commercial corridor offers a high concentration of mostly older retail and services. Rite Aid pharmacy, the Culmore Shopping Center (inline retail) and 7-Eleven convenience store are directly north of the subject community. The surrounding neighborhood also includes mostly older, well maintained detached homes on small lots.

2. Evidence of New Private/Public Investment While the subject’s neighborhood is built out, RPRG observed two infill development projects during the site visit.  Residential Development: Monarch Construction is building a small single family attached infill development at the corner of Glenmore Drive and Vista Drive, three blocks west of the subject community.  Commercial Development: Spectrum Development is constructing a new retail building on Leesburg Pike at Glen Forest Drive, less than one-half mile northeast of the subject community. The development is named Shops at Baileys Crossroads will be anchored by CVS pharmacy. Additional tenants will include Pita Pouch and Burger 7, and two retail bays are available.

C. Site Visibility and Accessibility

1. Visibility The subject property is located south of Leesburg Pike and does not have visibility from this major thoroughfare. However, the lack of visibility does not have a negative impact on the subject’s marketability. The property manager of Parkwood Apartments informed RPRG that most prospects are generated by word of mouth, including resident referrals from friends and family. The property is currently fully occupied with a waiting list of about 220 households, indicating very strong demand.

2. Vehicular Access Parkwood Apartments is accessible from Glen Carlyn Drive via Leesburg Pike. A stoplight at the intersection of Glen Carlyn Drive and Leesburg Pike facilitates ingress and egress to and from the community.

3. Availability of Public and Inter Regional Transit The subject site is just south of Leesburg Pike/Route 7. This major arterial provides access to other major arterials in northern Virginia including Columbia Pike and Route 50/Arlington Boulevard. Interstate 395 can be accessed within three miles of the subject community, and I-66 is about three miles north of the site. I-495/Capital Beltway can be accessed about six miles west of the site via Route 50.

Page 12 Parkwood Apartments | Site and Neighborhood Analysis

The subject community offers convenient access to public bus transportation. Several Metro Bus stops are within a short walk of the community, providing access to the following routes: Route 16 (Columbia Pike); Route 26A (Annandale-East Falls Church), and Route 28A (Leesburg Pike Line).

The nearest metro station to the site is the East Falls Church station in Arlington, about three miles driving distance to the northwest. The Parkwood Apartments property manager informed RPRG that many of the subject community’s residents carpool to work, and a couple of companies even come to the community to pick up residents for work. One of these companies is JAV Remodeling of McLean.

4. Pedestrian Access Sidewalks are installed throughout the subject community’s neighborhood. Residents can walk to several retail establishments, services and amenities. A public library, elementary school and park are located just west of the community. Several retail stores and services are just north of the site along Leesburg Pike, including Rite Aid pharmacy, Culmore Shopping Center (convenience retail), and 7- Eleven convenience store.

5. Roadway Improvements under Construction and Planned RPRG reviewed information from local stakeholders to assess whether any capital improvement projects affecting road, transit, or pedestrian access to the subject site are currently underway or likely to commence within the next few years. No projects that would significantly impact access to the subject community were identified.

6. Public Safety CrimeRisk is a census tract level index that measures the relative risk of crime compared to a national average. AGS analyzes known socio-economic indicators for local jurisdictions that report crime statistics to the FBI under the Uniform Crime Reports (UCR) program. An index of 100 reflects a total crime risk on par with the national average, with values below 100 reflecting below average risk and values above 100 reflecting above average risk. Based on detailed modeling of these relationships, CrimeRisk provides a detailed view of the risk of total crime as well as specific crime types at the census tract level. In accordance with the reporting procedures used in the UCR reports, aggregate indexes have been prepared for personal and property crimes separately as well as a total index. However, it must be recognized that these are un-weighted indexes, in that a murder is weighted no more heavily than purse snatching in this computation. The analysis provides a useful measure of the relative overall crime risk in an area but should be used in conjunction with other measures.

The 2017 CrimeRisk Index for the census tracts in the general vicinity of the subject site is displayed in gradations from yellow (least risk) to purple (most risk) (Map 2). The crime risk near the subject community is at the lowest level of the scale and is lower than other sections of the market area. Based on this and observations made during RPRG’s site visit, we do not expect crime or perception of crime to have a negative impact on the subject’s marketability.

Page 13 Parkwood Apartments | Site and Neighborhood Analysis

Map 2 Crime Index Map

D. Residential Support Network

1. Key Facilities and Services near the Subject Site The appeal of any given community is often based in part to its proximity to those facilities and services required daily. Key facilities and services and their distances from the subject site are listed in Table 4 and their locations are plotted on Map 3.

Page 14 Parkwood Apartments | Site and Neighborhood Analysis

Table 4 Key Facilities and Services

Dist Map # Establishment Type Address Location (miles) 1 Woodrow Wilson Library Library 6101 Knollwood Dr. Falls Church 0.2 2 Bailey's Elementary School (K-2) Education 6111 Knollwood Dr. Falls Church 0.3 3 Rite Aid Pharmacy 6053 Leesburg Pike Falls Church 0.3 4 7-Eleven Convenience 3337 Glen Caryln Falls Church 0.3 5 Stuart High Education 3301 Peace Valley Lane Falls Church 0.6 Crossroads Center (Dick's, Ross, Marshalls, 6 Retail/Grocery 5821 Crossroads Circle Falls Church 0.8 Safeway, Bed Bath & Beyond) 7 Seven Corners (Shoppers grocery, Ross) Retail/Grocery 6300 Seven Corners Center Falls Church 1.4 8 Bailey's Upper Elementary (3-5) Education 6245 Leesburg Pike Falls Church 1.5 9 Target (CVS) Retail/Pharmacy 5115 Leesburg Pike Falls Church 1.7

10 Crossroads Place (Giant grocery, TJMaxx) Retail/Grocery 3480 S Jefferson St Falls Church 1.8

11 Glasgow Middle Education 4101 Fairfax Pkwy Lincolnia 1.9

12 Northern Virginia Community College Higher Education 5000 Dawes Ave. Alexandria 2.2

13 Tysons Corner Center Mall 8000 Tysons Corner Center McLean 6.7 14 Fashion Center at Pentagon City Mall 1100 S. Hayes Street Arlington 5.7 15 Lillian Carey Park Recreation 5921 Summer Ln Falls Church 1.9 16 Virginia Hospital Center Hospital 1701 N George Mason Dr. Arlington 3.7 17 Inova Alexandria Hospital 4320 Seminary Rd Alexandria 3.4 18 Downtown Washington Culture/Entertainment 401 7th St. NW Washington DC 9.0

Source: Field and Internet Research, Real Property Research Group, Inc.

Map 3 Location of Key Facilities and Services

Page 15 Parkwood Apartments | Site and Neighborhood Analysis

2. Essential Services

a) Health Care Two acute care hospitals are within four miles driving distance of the subject community. Inova Alexandria is on Seminary Road in Arlington and has 318 licensed beds. The hospital has a range of services including emergency, childbirth, neuroscience, orthopedics and more. Virginia Hospital Center in Arlington is part of the Mayo Clinic Care Network. The 394-bed teaching hospital offers emergency services, women and infant health, oncology and more.

b) Education Fairfax County Public Schools is the 10th largest school system in the US and serves more than 188,000 students. Students residing at Parkwood Apartments are zoned to Bailey’s Elementary School (0.3 mile), Bailey’s Upper Elementary (1.5 miles), Glasgow Middle School (1.9 mile), and Stuart High School (0.6 mile).

Compared to other schools in the system reporting scores for third graders, Bailey’s Upper Elementary ranked 111th of 138 elementary schools, Glasgow Middle School ranked 25th of 28 middle schools, and Stuart High ranked 14th of 24 high schools (Table 5). Fairfax County’s average school scores are above the state-wide averages for elementary and middle schools, and in line with the state-wide average for high schools.

For higher education opportunities, the Alexandria campus of Northern Virginia Community College (NVCC) is about two miles driving distance from the subject community. This campus has more than 18,000 students and offers classes in liberal arts; math, science and engineering; and the social and professional sciences.

c) Shopping The subject community is in a high-density suburban area, and is just south of Leesburg Pike, a dense retail corridor. Several convenience retail stores are within one-third mile of the community and residents can access them by walking, including Rite-Aid pharmacy, 7-Eleven, and the shops at the Culmore Shopping Center. Beyond these establishments, many retail centers are within convenient driving distance. Crossroads Center is less than one mile from the site on Leesburg Pike. Anchors include Dick’s Sporting Goods, Ross and Marshalls clothing stores, and Safeway grocery. The Seven Corners retail center is just over one mile from the site in Falls Church, with anchors including Shoppers grocery store and Ross clothing store. Target with CVS pharmacy is less than two miles from the site on Leesburg Pike. Crossroads Pace, anchored by Giant grocery and TJMaxx, is less than two miles from the site in Falls Church.

Several regional comparison shopping venues are in this section of northern Virginia, including the traditional malls of Fashion Center at Pentagon City and Tysons Corner Center.

d) Recreation The site is less than one-fourth mile walking distance from Woodrow Wilson Library, a public library. Lillian Carey Park is two miles driving distance from the subject community. The 13-acre facility has a playground, hiking trails and more. Downtown Washington, a cultural and entertainment hub for the region with museums, sports arenas, theatres, restaurants and more, is nine miles driving distance from the subject community.

Page 16 Parkwood Apartments | Site and Neighborhood Analysis

Table 5 Fairfax County Schools, Test Scores

Elementary Schools Grade 3 Middle Schools Grade 8 Rank School English Math Composite Rank School English Math Composite 1 Keene Mill Elementary 98.0% 94.0% 96.0% 1 Kilmer Center 100.0% 100.0% 100.0% 2 Haycock Elementary 95.0% 95.0% 95.0% 2 Cooper Middle 95.0% 96.0% 95.5% 3 Poplar Tree Elementary 93.0% 97.0% 95.0% 3 Longfellow Middle 95.0% 94.0% 94.5% 4 Spring Hill Elementary 98.0% 91.0% 94.5% 4 Franklin Middle 94.0% 94.0% 94.0% 5 Sangster Elementary 95.0% 94.0% 94.5% 5 Rocky Run Middle 95.0% 93.0% 94.0% 6 Floris Elementary 92.0% 96.0% 94.0% 6 Frost Middle 93.0% 94.0% 93.5% 7 Navy Elementary 92.0% 95.0% 93.5% 7 Liberty Middle 88.0% 96.0% 92.0% 8 Oakton Elementary 96.0% 91.0% 93.5% 8 Carson Middle 91.0% 89.0% 90.0% 9 Colvin Run Elementary 93.0% 93.0% 93.0% 9 Thoreau Middle 88.0% 92.0% 90.0% 10 Mantua Elementary 92.0% 94.0% 93.0% 10 Key Center School 78.0% 100.0% 89.0% 11 Churchill Road Elementary 93.0% 92.0% 92.5% 11 Kilmer Middle 90.0% 86.0% 88.0% 12 Mosby Woods Elementary 90.0% 95.0% 92.5% 12 Lake Braddock Secondary 87.0% 89.0% 88.0% 13 West Springfield Elementary 92.0% 93.0% 92.5% 13 Robinson Secondary 88.0% 88.0% 88.0% 14 Springfield Estates Elementary 89.0% 95.0% 92.0% 14 Irving Middle 89.0% 85.0% 87.0% 15 Great Falls Elementary 90.0% 93.0% 91.5% 15 South County Middle 84.0% 87.0% 85.5% 16 Union Mill Elementary 88.0% 95.0% 91.5% 16 Stone Middle 81.0% 86.0% 83.5% 17 Westbriar Elementary 89.0% 94.0% 91.5% 17 Hughes Middle 81.0% 85.0% 83.0% 18 Vienna Elementary 92.0% 90.0% 91.0% 18 Jackson Middle 78.0% 83.0% 80.5% 19 Canterbury Woods 89.0% 92.0% 90.5% 19 Lanier Middle 83.0% 78.0% 80.5% 20 Flint Hill Elementary 91.0% 89.0% 90.0% 20 Twain Middle 76.0% 78.0% 77.0% 100 Cameron Elementary 73.0% 65.0% 69.0% 21 Holmes Middle 72.0% 74.0% 73.0% 101 Woodlawn Elementary 77.0% 61.0% 69.0% 22 Sandburg Middle 72.0% 72.0% 72.0% 102 Beech Tree Elementary 72.0% 65.0% 68.5% 23 Hayfield Secondary 77.0% 66.0% 71.5% 103 Fort Belvoir Elementary 74.0% 63.0% 68.5% 24 Key Middle 76.0% 67.0% 71.5% 104 Woodburn Elementary 76.0% 60.0% 68.0% 25 Glasgow Middle 68.0% 74.0% 71.0% 105 Lane Elementary 68.0% 67.0% 67.5% 26 Poe Middle 74.0% 65.0% 69.5% 106 Parklawn Elementary 71.0% 63.0% 67.0% 27 Whitman Middle 67.0% 68.0% 67.5% 107 Hollin Meadows Elementary 73.0% 60.0% 66.5% 28 Herndon Middle 71.0% 62.0% 66.5% 108 Hybla Valley Elementary 72.0% 61.0% 66.5% Fairfax County Average 83.3% 83.6% 83.4% 109 Lorton Station Elementary 65.0% 68.0% 66.5% State Average 76.0% 74.0% 75.0% 110 Riverside Elementary 72.0% 60.0% 66.0% Bailey's Upper Elementary for 111 the Arts & Sciences 71.0% 60.0% 65.5% 112 Westlawn Elementary 73.0% 58.0% 65.5% High Schools 113 Braddock Elementary 68.0% 61.0% 64.5% Rank School English Math Composite 114 Daniels Run Elementary 63.0% 66.0% 64.5% 1 Thom Jefferson Sci/Tech 100.0% 100.0% 100.0% 115 Lake Anne Elementary 75.0% 54.0% 64.5% 2 Langley High 97.0% 90.0% 93.5% 116 London Towne Elementary 69.0% 60.0% 64.5% 3 McLean High 96.0% 89.0% 92.5% 117 Rolling Valley Elementary 74.0% 53.0% 63.5% 4 Marshall High 96.0% 87.0% 91.5% 118 Woodley Hills Elementary 70.0% 57.0% 63.5% 5 Oakton High 96.0% 83.0% 89.5% 119 Centre Ridge Elementary 66.0% 60.0% 63.0% 6 Westfield High 93.0% 85.0% 89.0% 120 Rose Hill Elementary 69.0% 57.0% 63.0% 7 Woodson High 96.0% 80.0% 88.0% 121 Armstrong Elementary 63.0% 61.0% 62.0% 8 Madison High 94.0% 82.0% 88.0% 122 Fort Hunt Elementary 65.0% 59.0% 62.0% 9 Chantilly High 94.0% 81.0% 87.5% 123 Dranesville Elementary 62.0% 61.0% 61.5% 10 West Springfield High 97.0% 78.0% 87.5% 124 Lynbrook Elementary 67.0% 55.0% 61.0% 11 South County High 89.0% 82.0% 85.5% 125 Glen Forest Elementary 62.0% 59.0% 60.5% 12 Centreville High 94.0% 76.0% 85.0% 126 Garfield Elementary 76.0% 43.0% 59.5% 13 Edison High 90.0% 79.0% 84.5% 127 Graham Road Elementary 55.0% 64.0% 59.5% 14 Stuart High 90.0% 79.0% 84.5% 128 Hutchison Elementary 52.0% 66.0% 59.0% 15 Annandale High 90.0% 78.0% 84.0% 129 Dogwood Elementary 60.0% 57.0% 58.5% 16 Fairfax High 91.0% 76.0% 83.5% 130 Mount Eagle 56.0% 60.0% 58.0% 17 Mountain View Alt High 70.0% 90.0% 80.0% 131 Annandale Terrace 59.0% 56.0% 57.5% 18 Falls Church High 87.0% 72.0% 79.5% 132 Groveton Elementary 63.0% 51.0% 57.0% 19 South Lakes High 92.0% 66.0% 79.0% 133 Herndon Elementary 64.0% 44.0% 54.0% 20 West Potomac High 89.0% 69.0% 79.0% 134 Mount Vernon Woods Elementary 63.0% 45.0% 54.0% 21 Mount Vernon High 82.0% 73.0% 77.5% 135 Timber Lane Elementary 62.0% 45.0% 53.5% 22 Lee High 85.0% 60.0% 72.5% 136 Pine Spring Elementary 41.0% 58.0% 49.5% 23 Herndon High 87.0% 56.0% 71.5% 137 Weyanoke Elementary 56.0% 43.0% 49.5% 24 Fairfax County Adult 40.0% 40.0% 138 Bucknell Elementary 50.0% 33.0% 41.5% Fairfax County Average 91.1% 77.1% 84.1% Fairfax County Average 78.3% 75.1% 76.7% State Average 87.0% 82.0% 84.5% State Average 75.0% 75.0% 75.0% Source: Virginia Department of Education

Page 17 Parkwood Apartments | Economic Context

ECONOMIC CONTEXT

A. Introduction This section focuses on economic trends and conditions in Fairfax County, including the two modestly- sized cities of Fairfax (which is fully surrounded by the county) and Falls Church (adjoining the county to the east). This definition of Fairfax County is consistent with that of the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA). For purposes of comparison, we also discuss economic trends in the Commonwealth of Virginia and the nation.

B. Labor Force, Resident Employment, and Unemployment

1. Trends in County Labor Force and Resident Employment Fairfax County’s labor force has increased most years since 2006 with a net increase of 59,562 workers or 10.0 percent through 2017 (Table 6). The county’s labor force reached 656,790 workers in 2017 for the highest annual average on record. The county added more than 18,000 employed residents since 2015, while the number of unemployed workers fell by 13 percent from 22,754 to 19,818 unemployed residents during the same period.

Table 6 Labor Force and Unemployment Rates

Annual Unemployment Rates - Not Seasonally Adjusted Annual Unemployment 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Labor Force 597,228 601,940 614,229 609,368 630,565 640,813 645,511 646,503 648,711 641,448 643,453 656,790 Employment 583,810 588,738 596,647 580,124 598,494 610,363 616,494 618,224 622,274 618,693 623,273 636,971 Unemployment 13,418 13,202 17,582 29,244 32,071 30,450 29,017 28,279 26,437 22,754 20,179 19,818 Unemployment Rate Fairfax County 2.2% 2.2% 2.9% 4.8% 5.1% 4.8% 4.5% 4.4% 4.1% 3.5% 3.1% 3.0% Virginia 3.1% 3.0% 3.9% 6.7% 7.1% 6.6% 6.1% 5.7% 5.2% 4.5% 4.0% 3.8% United States 4.6% 4.6% 5.8% 9.3% 9.6% 8.8% 8.3% 7.4% 6.2% 5.3% 4.9% 4.4% Source: U.S. Department of Labor, Bureau of Labor Statistics 11.0% 10.0% 9.0% 8.0% 7.0% e t

a 6.0% R

t n

e 5.0% m y o l 4.0% p m e

n 3.0% Fairfax County U 2.0% Virginia 1.0% United States 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2. Trends in County Unemployment Rate Since 2006, the annual unemployment rate among residents of Fairfax County has tracked consistently lower than the statewide annual unemployment rate for Virginia, which, in turn, has recorded an annual unemployment rate well below the national unemployment rate. Between 2006

Page 18 Parkwood Apartments | Economic Context

and 2008, the local unemployment rate in Fairfax County ranged from 2.2 percent to 2.9 percent. After the onset of the national recession, the annual unemployment rates for Fairfax County climbed to a high of 5.1 percent in 2010. While high in terms of the area’s recent historical context, the 5.1 percent 2010 unemployment rate was two percentage points below the statewide unemployment rate of 7.1 percent and was slightly more than half the national unemployment rate of 9.6 percent in this same year.

Unemployment data since 2011 suggests an improving economic situation with the average unemployment rate for Fairfax County dropping steadily in each subsequent year. In 2017, Fairfax County’s unemployment rate averaged 3.0 percent, compared to 3.8 percent in Virginia and 4.4 percent in the nation.

C. Commutation Patterns Fairfax County is one of the economic engines of the large and economically diverse Washington, D.C. region, comprised of the District of Columbia and suburban counties and cities in both Virginia and Maryland. Commuting patterns of residents of the primary market area, labeled the Parkwood Market Area and defined in the following section, demonstrate the economic integration of the D.C. region. Data from the 2012-2016 American Community Survey (ACS) show that one-third of the working residents of the primary market area commuted to jobs located within their home jurisdiction of Fairfax County or the City of Alexandria (Table 7). Slightly more than one-third (37 percent) of primary market area residents commuted to other jurisdictions in the Commonwealth of Virginia for work. Presumably, many of these commuters traveled to employment in nearby Arlington County. The remaining 30 percent of employed primary market area residents traveled to out of state locations (i.e. the District of Columbia or Maryland) for work.

According to ACS data, 23 percent of workers residing in the primary market area spent less than twenty minutes commuting to work. An additional two out of five workers (39 percent) spent 20 to 34 minutes commuting while 32 percent spent 35 or more minutes commuting to their respective place of employment.

Table 7 Commutation Data, Parkwood Market Area

TravelTimetoWork PlaceofWork Workers 16 years+ #% Workers 16 years and over #% Did not work at home: 38,531 94.8% Worked in state of residence: 28,606 70.4% Less than 5 minutes 451 1.1% Worked in county of residence 13,731 33.8% 5 to 9 minutes 1,700 4.2% Worked outside county of residence 14,875 36.6% 10 to 14 minutes 2,420 6.0% Worked outside state of residence 12,037 29.6% 15 to 19 minutes 4,931 12.1% Total 40,643 100% 20 to 24 minutes 5,908 14.5% Source: American Community Survey 2012-2016 25 to 29 minutes 2,655 6.5% 2012-2016 Commuting Patterns 30 to 34 minutes 7,444 18.3% Parkwood Market Area 35 to 39 minutes 1,600 3.9% 40 to 44 minutes 2,539 6.2% Outside County 45 to 59 minutes 4,526 11.1% 36.6% Outside 60 to 89 minutes 3,607 8.9% State 90 or more minutes 750 1.8% 29.6% Worked at home 2,112 5.2% In County 33.8% Total 40,643 Source: American Community Survey 2012-2016

Page 19 Parkwood Apartments | Economic Context

D. County At-Place Employment

1. Trends in Total At-Place Employment As of 2006, aggregate at-place employment in Fairfax County – the total number of jobs located within the boundaries of Fairfax County, Fairfax City, and Falls Church – totaled 612,458 positions (Figure 7). During the recession years of 2008 and 2009, Fairfax County’s employment base decreased by 16,479 jobs. The downward trend was short-lived, however, as local employers added 17,797 net jobs over the next three years. The first significant loss came in 2013 with a net decline of 4,986 jobs, followed by a net loss of 6,200 jobs in 2014. In the following two years, 16,008 net new jobs were added, including several high-profile expansions such as Bechtel (700 jobs); Navy Federal Credit Union (600 jobs); Agilex (250 jobs); and the consolidation of jobs at Fort Belvoir. The base was a major beneficiary of the Base Realignment and Closure Act of 2005 (BRAC) in that roughly 19,300 net new military and civilian jobs were transferred to Fort Belvoir (Main Post, North Area, Mark Center – Alexandria and Rivanna Station – Charlottesville) as a result of this act of Congress. Growth continued during the first three quarters of 2017, with a net increase of 3,290 positions. Since 2006, at-place employment in Fairfax County has increased by 17,074 jobs, or 2.8 percent.

As illustrated by the lines in the bottom portion of Figure 7, Fairfax County has generally followed national trends in terms of year to year job change. The county’s job losses were less pronounced during the national recession, but employment dipped during 2013 and 2014 while the national rate of job growth remained steady.

Figure 7 At-Place Employment, Fairfax County

Total At Place Employment 700,000 2 600,000 2 0 2 9 2 4 8 6 4 3 4 4 3 2 0 1 8 3 5 4 3 5 2 2 2 4 1 9 , 9 4 , 4 3 , 2 , , , 8 , 6 , , , 9 6 , , 1 0 8 7 6 2 2 0 2 5 2 3 2 2 1 1 1

500,000 1 1 1 6 0 6 0 6 6 6 6 6 6 6 6 t 6 6 n e m

y 400,000 o l p m E

e

c 300,000 a l P

t A 200,000

100,000

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Q3

Change in At Place Employment

15,000 10.0%

9,074 8,260 8.0% 10,000 7,644 7,748

6,522

e 6.0% c a l P 3,290 t 5,000 4.0% A 2,201 % n i

A e g 2.0% n n n a 0 u h a C l

l G

a 0.0% r u -1,183 o n w n t h

A -5,000 -2.0% -4,986 -6,200 -10,000 -4.0%

Annual Change in Fairfax County At Place Employment -6.0% -15,000 United States Annual Employment Growth Rate -8.0% -15,296 Fairfax County Annual Employment Growth Rate -20,000 -10.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Q3

Source: U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of Employment and Wages

Page 20 Parkwood Apartments | Economic Context

2. At-Place Employment by Industry Sector The local economy is dominated by the Professional-Business sector (Figure 8). As of third quarter 2017 employers in this white-collar sector account for 35 percent of the county’s employment base, a concentration that is more than twice the national average. Government contractors, law firms, lobbying groups, and national non-profit or membership organizations are among the entities constituting the Professional-Business sector in the Washington, DC area. Employers in the white- collar Financial Activities and Information sectors account for an additional nine percent of all jobs in Fairfax County. Owing to the high concentration of white-collar employment in the county, the percentages of total jobs in the Government, Trade-Transportation-Utilities, Education-Health, and Leisure-Hospitality sectors trail the national averages for these sectors. Fairfax County has a limited base of Manufacturing sector employment, representing just one percent of all jobs.

Seven of eleven economic sectors added jobs in Fairfax County from 2011 to 2017 (Q3) including 18 percent growth in Education Health, 20 percent in Leisure-Hospitality, and 16 percent in Financial Activities (Figure 9). Natural Resources-Mining jobs grew by nine percent since 2011, but it is still a negligible portion of the county’s jobs. Sectors which grew by less than four percent each include Other, Trade-Transportation-Utilities, and Government. Over this period, Fairfax County’s substantial Professional-Business sector decreased by 2.8 percent. Three additional sectors, Manufacturing, Information, and Construction, experienced losses as well, but these sectors represent a relatively small portion of the local economy.

Figure 8 Total Employment by Sector

Employment by Industry Sector Total Employment by Sector 2017 Q3 2017 Q3 United States Sector Jobs 3.1% Other 3.6% Government 83,969 Fairfax County 11.1% Federal 25,873 Leisure-Hospitality 9.3% State 9,466 15.4% Local 48,630 Education Health 11.6% Private Sector 545,563 Professional-Business 14.1% Goods-Producing 30,490 34.8% Nat. Res.-Mining 279 Financial Activities 5.6% Construction 24,242 6.1% Manufacturing 5,969 2.0% Information 3.3% Service Providing 513,634 18.9% Trade-Trans-Utilities 80,893 Trade-Trans-Utilities 12.8% Information 20,517 Manufacturing 8.6% Financial Activities 38,655 0.9% Professional-Business 219,130 Construction 4.8% Education-Health 73,039 3.9% Leisure-Hospitality 58,551 1.3% Nat Resources-Mining 0.0% Other 22,849 Unclassified 1,439 14.9% Government 13.3% Total Employment 629,532 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

Source: U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of Employment and Wages

Page 21 Parkwood Apartments | Economic Context

Figure 9 Employment Change by Sector, 2011-2017(Q1)

Employment Change by Sector, 2011-2017 Q3

0.3% Other 3.9%

19.7% Leisure-Hospitality 20.3% United States 15.8% Education Health 17.7% Fairfax County 16.8% Professional-Business -2.8%

8.7% Financial Activities 16.3%

4.6% Information -11.2%

8.9% Trade-Trans-Utilities 2.5%

5.8% Manufacturing-36.4%

25.3% Construction -5.2%

-0.5% Nat Resources-Mining 9.4%

0.4% Government 0.2%

-40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0%

Source: U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of Employment and Wages

E. Wage Data The average annual wage in 2016 for Fairfax County was $81,467 (Table 8). In 2016, the county’s average annual wage was 48.6 percent higher than the average annual wage throughout Virginia and 52.0 percent higher than the average wage nationally. The average annual wage in Fairfax County has steadily increased each year between 2006 and 2016.

The average wage in Fairfax County exceeds the national average for all sectors (Figure 10). Average wages across all economic sectors in Fairfax County exceed those in the United States. The highest wage sectors in the county as of 2016 were Information ($132,841), Financial Activities ($113,303), and Professional-Business ($111,706).

Table 8 Wage Data, Fairfax County

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fairfax County $64,977 $68,132 $70,316 $72,117 $74,398 $76,204 $77,744 $78,108 $78,839 $80,942 $81,467 Virginia $43,665 $45,531 $46,708 $47,662 $49,138 $50,261 $51,381 $51,665 $52,563 $53,844 $54,287 United States $42,535 $44,458 $45,563 $45,559 $46,751 $48,043 $49,289 $49,804 $51,361 $52,942 $53,611 Source: U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of Employment and Wages

Page 22 Parkwood Apartments | Economic Context

Figure 10 Wage by Sector, Fairfax County

Average Annual Pay by Sector 2016

Other $49,964 $35,923 Fairfax County Leisure-Hospitality $23,580 $22,431 United States Education-Health $57,705 $48,058

Professional-Business $111,706 $69,964

Financial Activities $113,303 $88,822

Information $132,841 $98,475

Trade-Trans-Utilities $55,932 $44,758

Manufacturing $68,856 $64,860

Construction $66,676 $58,643

Natural Resources-Mining $65,904 $56,110

Government $71,548 $61,331

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000

Source: U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of Employment and Wages

F. Major Employers Table 9 outlines Fairfax County’s largest private employers in terms of number of employees, as reported by the Virginia Employment Commission. All of the county’s largest employers have at least 1,000 employees each. Four of the largest employers are in the Professional-Business sector and conduct significant contracting work for the federal government. Much of this work is affiliated with national defense, and accordingly, both the US Department of Defense and the Department of Homeland Defense are major employers. Four of the top employers are in the Financial Services sector. The remaining employers are in the Education-Health and Government sectors. As shown in Map 4, all of the major employers in the county are within reasonable commuting distance from the subject community.

Page 23 Parkwood Apartments | Economic Context

Table 9 Major Employers, Fairfax County

Rank Name Sector Employment 1 Anteon Corporation Professional, Scientific, and Technical Services 1000 + 2 Booz, Allen and Hamilton Professional, Scientific, and Technical Services 1000 + 3 Capital One Bank Credit Intermediation and Related Activities 1000 + 4 County of Fairfax County Government 1000 + 5 Fairfax County Public Schools Educational Services 1000 + 6 Fannie Mae Credit Intermediation and Related Activities 1000 + 7 Federal Home Loan Mortgage Credit Intermediation and Related Activities 1000 + 8 George Mason University Educational Services 1000 + 9 Inova Health System Hospitals 1000 + 10 Navy Federal Credit Union Finance and Insurance 1000 + 11 Northrop Grumman Corporation Computer and Electronic Product Manufacturing 1000 + 12 Postal Service Postal Service 1000 + 13 The Mitre Corporation Professional, Scientific, and Technical Services 1000 + 14 U.S. Department of Defense National Security and International Affairs 1000 + 15 U.S. Department of Homeland Defense National Security 1000 + Source: Virginia Employment Commission

Map 4 Major Employers, Fairfax County

Page 24 Parkwood Apartments | Economic Context

G. Economic Expansions, Contractions, and Projections The Fairfax County Economic Development Authority provides quarterly data on new and expanding businesses. The following is a summary of larger job additions announced in first quarter 2017:  Aerotek, a Staffing business in Fairfax, expanded with 200 positions.  CACI International, an IT firm in Fairfax Center, expanded with 401 positions.  Carahsoft Technology Corporation, an IT firm in Reston, expanded with 300 positions.  Helix Electric, an Energy services firm in Chantilly, expanded with 416 positions.  IOMAXIS, and IT firm in Springfield, expanded with 555 positions. RPRG did not identify any large-scale layoffs or closures that were recently reported in Fairfax County.

H. Economic Conclusions and Projections Despite ebb and flow in at-place employment, the Fairfax County economy is robust with unemployment rates consistently less than those of the state and the nation. During 2017 the unemployment rate averaged 3.0 percent, less than the statewide rate of 3.8 percent and the national rate of 4.4 percent. The high-paying Professional-Business sector dominates the local economy, accounting for 2.5 times the national proportion. While the Fairfax County economy shed approximately 15,300 net jobs in 2009, it subsequently added back 17,800 net jobs over the next three years. Although Fairfax County again experienced a net loss of more than 11,000 jobs between 2013 and 2014, the local economy has since gained nearly 20,000 positions, ending 2017 at a new peak.

Page 25 Parkwood Apartments | Housing Market Area

HOUSING MARKET AREA

A. Introduction The primary market area, referred to as the Parkwood Market Area in this report, is defined as the geographic area from which future residents of the community would primarily be drawn and in which competitive rental housing alternatives are located. In defining the Parkwood Market Area, RPRG sought to accommodate the joint interests of conservatively estimating housing demand and reflecting the realities of the local rental housing marketplace.

B. Delineation of Market Area The Parkwood Market Area consists of census tracts in eastern Fairfax County and western Alexandria City (Map 5). The boundaries of the Parkwood Market Area and their approximate distance from the subject site are:

North: Route 50/Arlington Blvd. 1.0 mile East: Fairfax County/Arlington County border 1.1 miles Southeast: I-395 2.1 miles Southwest: Lincolnia Road 1.4 miles Northwest: Sleepy Hollow Road 1.5 miles

The subject community is in the Falls Church section of unincorporated Fairfax County. The surrounding neighborhood has a significant portion of older garden apartments that serve as workforce housing. Additional residential uses in the area include older detached homes and high- rise condominium and apartments buildings. The subject community’s neighborhood and surrounding area offer a lower-cost alternative to the sections of northern Virginia that are closer to Washington DC and have direct metro access, such as the Rosslyn-Ballston corridor in Arlington County.

The property manager of Parkwood Apartments reported to RPRG that most residents move from other properties in the local Falls Church area. The main competitor is Vista Gardens, an older garden apartment community adjacent to Parkwood Apartments.

The primary market area extends to the Seven Corners area to the north but excludes the City of Falls Church as it is more upscale and offers access to a metro station. The Arlington border forms the eastern boundary of the market area while I-395 is the southern boundary. The southern section of the market area is in the City of Alexandria and includes a large concentration of apartments in areas known as Alexandria West and Mark Center. Several new construction LIHTC communities are in the pipeline in this section of the market area.

As appropriate for this analysis, the Parkwood Market Area is compared to Fairfax County, which is considered the secondary market area. Demand estimates are based only on the Parkwood Market Area. We note that the data presented for Fairfax County includes the cities of Fairfax and Falls Church.

Page 26 Parkwood Apartments | Housing Market Area

Map 5 Parkwood Market Area

Page 27 Parkwood Apartments | Demographic Analysis

DEMOGRAPHIC ANALYSIS

A. Introduction and Methodology RPRG analyzed recent trends and characteristics of population and households in the Parkwood Market Area and Fairfax County using data from Esri, a private national data vendor. We also examined the Round 9.0 forecasts from the area’s metropolitan planning organization, the Metropolitan Washington Council of Governments (MWCOG). The forecasts were released on November 9, 2016. We compared and evaluated data within the context of decennial U.S. Census from 2000 and 2010.

Upon examining population and household estimates and projections, we elected to use Esri data as these appear realistic in light of past performance and unfolding trends. While Esri projections for the market area household growth are slightly more aggressive than MWCOG, they reflect the ongoing infill development in the market area.

B. Trends in Population and Households

1. Recent Past Trends The Parkwood Market Area’s population increased from 66,512 people in 2000 to 70,895 people in 2010, a net gain of 4,383 people or 6.6 percent. The market area’s household count increased from 27,761 to 29,398 households between census counts for a net gain of 1,637 households or 5.9 percent (Table 10). Annual change rates during that time were 0.6 percent for population and households. Growth in Fairfax County was slightly more robust, with an annual increase of 1.1 percent for both population and households.

Table 10 Population and Household Trends

Fairfax County Parkwood Market Area Total Change Annual Change Total Change Annual Change Population Count # % # % Count # % # % 2000 1,001,711 66,512 2010 1,116,623 114,912 11.5% 11,491 1.1% 70,895 4,383 6.6% 438 0.6% 2018 1,171,663 55,040 4.9% 6,880 0.6% 73,534 2,639 3.7% 330 0.5% 2023 1,208,307 36,644 3.1% 7,329 0.6% 75,662 2,128 2.9% 426 0.6% Total Change Annual Change Total Change Annual Change Households Count # % # % Count # % # % 2000 363,258 27,761 2010 405,075 41,817 11.5% 4,182 1.1% 29,398 1,637 5.9% 164 0.6% 2018 423,243 18,168 4.5% 2,271 0.5% 30,367 969 3.3% 121 0.4% 2023 435,941 12,698 3.0% 2,540 0.6% 31,238 871 2.9% 174 0.6% Source: 2000 Census; 2010 Census; Esri; and Real Property Research Group, Inc.

Annual Percentage HH Change, 2000 to 2023 Fairfax County Parkwood Market Area 2.0%

1.5% 1.1% 1.0% 0.6% 0.6% 0.5% 0.4% 0.6% 0.5%

0.0% 2000-2010 2010-2018 2018-2023

Page 28 Parkwood Apartments | Demographic Analysis

Esri estimates that the market area’s growth moderated slightly from 2010 to 2018 with net growth of 3.7 percent for population and 3.3 percent for households; annual growth was 0.5 percent for population and 0.4 percent for households. Growth rates countywide were similar at 0.6 percent for population and 0.5 percent for households.

2. Projected Trends Based on Esri data, RPRG projects the market area will add 426 people and 174 households per year from 2018 to 2023. By 2023, the market area will include 75,662 persons and 31,238 households. Annual growth rates in Fairfax County are projected to remain steady and comparable to the past eight years with annual average growth of 0.6 percent for population and households.

3. Building Permit Trends Trends in residential building permits across Fairfax County (including the cities of Fairfax and Falls Church) generally reflect the strong household growth in this portion of Northern Virginia. Between 2000 and 2017, Fairfax County reportedly authorized an average of 3,030 new residential units per year (Table 11). The permitting activity underlying this average reflects the strong 2000 to 2005 period, when the county approved almost 5,600 units per year. Between 2006 and 2013, the average number of units authorized dropped to 1,288 per year. The number of units permitted in 2014 jumped to a nine-year high of 2,850 units, maintaining almost this level of new construction in 2015 and exceeding it at 2,964 units in 2016. Permits fell in 2017 but were still robust at 2,050 units.

Over this 17-year period, an annual average of 1,724 single family units were permitted, compared to the multifamily average of 1,305 units. As a result, over this 17-year period, multifamily rental units accounted for roughly two-fifths (43 percent) of the new construction housing supply while single- family units accounted for the remaining three-fifths (57 percent). In 2015, the number of multifamily units permitted was more than double the single-family homes permitted and 74 percent higher in 2016. Many of these multifamily units are being developed around the new Silver Line Metro stations (as well as other Metrorail locations) where residential density is increasing significantly because of efforts to encourage transit-oriented development.

Table 11 Building Permits by Structure Type

Fairfax County 2000- Annual 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017 Average Single Family 3,985 3,595 3,011 3,157 3,024 2,328 1,469 1,312 914 795 942 847 781 793 1,016 886 1,083 1,090 31,028 1,724 TwoFamily 0 0 6 2 0 0 0 0 0 0 0 0 2 0 0 14 0 0 24 1 3 - 4 Family 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 0 0 3 0 5+ Family 1,998 2,719 2,991 880 3,816 2,077 666 250 493 0 0 0 726 313 1,834 1,881 1,881 960 23,485 1,305 Total 5,983 6,314 6,008 4,039 6,840 4,405 2,135 1,562 1,407 795 942 847 1,509 1,106 2,850 2,784 2,964 2,050 54,540 3,030 Source: U.S. Census Bureau, C-40 Building Permit Reports.

Total Housing Units Permitted 2000 - 2016 8,000 6,840 7,000 6,314 5,983 6,008 6,000 d e

t 5,000

t 4,405 i 4,039 m r

e 4,000 P

s

t 2,964 i 2,850 2,784 n 3,000 U 2,135 2,050 2,000 1,562 1,407 1,509 1,106 795 942 847 1,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Page 29 Parkwood Apartments | Demographic Analysis

C. Demographic Characteristics

1. Age Distribution and Household Type The Parkwood Market Area has a higher proportion of young adults than Fairfax County as a whole (Table 12). The median age of the primary market area population is 36, slightly younger than the countywide median age of 38. Adults age 35-61 are the largest component of both the market area and county. Nearly one-fourth of the market area population (24 percent) is young adults age 20 to 34, higher than the countywide proportion of 19 percent. Slightly less than one-fourth of the market area population is children and youth under age 20 (23 percent). Seniors age 62 and older comprise 16 percent of the market area population, slightly less than the countywide proportion of nearly 18 percent.

Table 12 Age Distribution

Parkwood 2018 Age Distribution 2018 Age Fairfax County Parkwood Market Area Market Area Distribution Fairfax County # % # % 15.9% Children/Youth 295,205 25.2% 16,782 22.8% Seniors Under 5 years 69,177 5.9% 5,060 6.9% 17.7% 5-9 years 76,035 6.5% 4,589 6.2% 10-14 years 79,140 6.8% 3,933 5.3% 15-19 years 70,852 6.0% 3,200 4.4% 37.2% Adults Young Adults 225,926 19.3% 17,742 24.1% e p

y 37.8%

20-24 years 65,004 5.5% 4,377 6.0% T 25-34 years 160,921 13.7% 13,365 18.2% Adults 443,191 37.8% 27,355 37.2% 24.1% 35-44 years 166,177 14.2% 12,300 16.7% Young Adults 45-54 years 167,347 14.3% 9,442 12.8% 19.3% 55-61 years 109,667 9.4% 5,613 7.6% Seniors 207,341 17.7% 11,655 15.9% 62-64 years 47,000 4.0% 2,406 3.3% 22.8% Child/Youth 65-74 years 100,866 8.6% 5,092 6.9% 25.2% 75-84 years 42,578 3.6% 2,480 3.4% 85 and older 16,897 1.4% 1,678 2.3% 0% 10% 20% 30% 40% TOTAL 1,171,663 100% 73,534 100% Median Age 38 36 % Pop Source: Esri; RPRG, Inc.

Single person households are the most common household type in the Parkwood Market Area, accounting for 37 percent of all households compared to 23 percent countywide (Table 13). Thirty-six percent of market area households have at least two adults and no children, lower than the countywide proportion of nearly 41 percent. Twenty-seven percent of market area households include children, lower than the countywide proportion of 37 percent.

Page 30 Parkwood Apartments | Demographic Analysis

Table 13 Households by Household Type

Parkwood Parkwood Market 2010 Households by Fairfax County 2010 Households by Household Type Market Area Area Household Type # % # % Fairfax County Married w/Children 117,171 28.9% 5,383 18.3% HH w/ 27.1% Other w/ Children 31,225 7.7% 2,587 8.8% Children 36.6% Households w/ Children 148,396 36.6% 7,970 27.1% Married w/o Children 114,591 28.3% 5,619 19.1% HH w/o 35.9% Other Family w/o Children 22,973 5.7% 2,104 7.2% Children 40.5% Non-Family w/o Children 26,480 6.5% 2,825 9.6% e p

Households w/o Children 164,044 40.5% 10,548 35.9% y 37.0% T

Singles d Singles 92,635 22.9% 10,880 37.0% l 22.9% o h e

Total 405,075 100% 29,398 100% s u

o 0% 10% 20% 30% 40% 50% Source: 2010 Census; RPRG, Inc. H % Households

2. Renter Household Characteristics The Parkwood Market Area’s households have a higher propensity to rent than the county’s households with 2018 renter percentages of 62.1 percent in the Parkwood Market Area and 33.6 percent in Fairfax County. Between 2000 and 2010 the rate of rentership declined. However, all net new households since 2010 have been renters (Table 14). Esri projects household growth to be more proportionately distributed over the next five years, resulting in minor increases to renter percentages in both the market area and county.

More than half of renter households in the Parkwood Market Area and Fairfax County are young and middle-aged adults age 25 to 44. Nearly 30 percent of market area households are adults age 45 to 64, while less than 12 percent are senior householders age 65 and older (Table 15).

Table 14 Households by Tenure

Change 2000- Change 2010- Change 2018- Fairfax County 2000 2010 2010 2018 2018 2023 2023 Housing Units # % # % # % # % # % # % # % Owner Occupied 257,105 70.8% 281,123 69.4% 24,018 57.4% 281,203 66.4% 80 0.4% 288,636 66.2% 7,432 58.5% Renter Occupied 106,153 29.2% 123,952 30.6% 17,799 42.6% 142,039 33.6% 18,087 99.6% 147,305 33.8% 5,266 41.5% Total Occupied 363,258 100% 405,075 100% 41,817 100% 423,243 100% 18,168 100% 435,941 100% 12,698 100% Total Vacant 9,121 17,092 18,348 19,917 TOTAL UNITS 372,379 422,167 441,591 455,858

Parkwood Market Change 2000- Change 2010- Change 2018- Area 2000 2010 2010 2018 2018 2023 2023 Housing Units #%#%#%#%#%#%#% Owner Occupied 10,455 37.7% 11,971 40.7% 1,516 92.6% 11,496 37.9% -475 11,788 37.7% 293 33.6% Renter Occupied 17,306 62.3% 17,427 59.3% 121 7.4% 18,871 62.1% 1,444 19,450 62.3% 578 66.4% TotalOccupied 27,761 100% 29,398 100% 1,637 100% 30,367 100% 969 100% 31,238 100% 871 100% Total Vacant 945 1,958 2,333 2,574 TOTAL UNITS 28,706 31,356 32,701 33,813 Source: U.S. Census of Population and Housing, 2000, 2010; Esri, RPRG, Inc.

Page 31 Parkwood Apartments | Demographic Analysis

Table 15 Renter Households by Age of Householder

Renter Parkwood 2018 Renter Households by Age of Fairfax County Parkwood Market Area Households Market Area Householder 6.1% Age of HHldr # % # % 75+ 7.2% Fairfax County

15-24 years 9,684 6.8% 1,183 6.3% r 2 5.7% e 65-74 5.9% d 25-34 years 40,388 28.4% 5,230 27.7% l 2 o 55-64 11.7% h 10.6% e

35-44 years 34,094 24.0% 4,655 24.7% s 1

u 45-54 17.8% 45-54 years 24,124 17.0% 3,358 17.8% o 1 17.0% H

f 35-44 24.7%

o 24.0%

55-64 years 15,110 10.6% 2,212 11.7% e

g 25-34 27.7%

65-74 years 8,421 5.9% 1,082 5.7% A 2 28.4% 6.3% 75+ years 10,217 7.2% 1,151 6.1% 215-24 6.8% Total 142,039 100% 18,871 100% 0% 10% 20% 30% Source: Esri, Real Property Research Group, Inc. % Households

Thirty-seven percent of 2010 renter households in the market area are single individuals, higher than the countywide proportion of 29 percent (Table 16). Two-person households comprised 26 percent of renter households and 14 percent of renter households had three persons. Twenty-three percent of market area households were larger households of four persons or more.

Table 16 Renter Households by Household Size

Parkwood 2010 Persons per Household Renter Renter Fairfax County Market Area Occupied Units Parkwood Market Occupied 5+-person 12.0% Area # % # % 13.2% Fairfax County 11.1% 1-person hhld 36,362 29.3% 6,408 36.8% 4-person 14.4% e

2-person hhld 32,838 26.5% 4,553 26.1% z 14.0% i 3-person S

16.6%

3-person hhld 20,560 16.6% 2,437 14.0% d l

o 2-person 26.1% 4-person hhld 17,857 14.4% 1,943 11.1% h 26.5% e s

5+-person hhld 16,335 13.2% 2,086 12.0% u 1-person 36.8% o 29.3% TOTAL 123,952 100% 17,427 100% H 0% 20% 40% Source: 2010 Census % hhlds

3. Income Characteristics Based on income distributions provided by Esri, households in the Parkwood Market Area have a 2018 median household income of $78,459 per year, 34 percent lower than the $117,982 median income in Fairfax County (Table 17). Nineteen percent of households in the Parkwood Market Area earn less than $35,000, 29 percent earn $35,000 to $74,999, and 33 percent earn between $75,000 and $149,999. Nineteen percent of households earn more than $150,000.

Page 32 Parkwood Apartments | Demographic Analysis

Table 17 Household Income

Estimated 2018 Parkwood Market 2018 Household Income Fairfax County Household Income Area 9.9% $200+K 21.9% # % # % $150-$199K 8.9% less than $25,000 29,023 6.9% 3,918 12.9% 13.9% $25,000 $34,999 15,377 3.6% 1,981 6.5% 19.0% $100-$149K 22.1% $35,000 $49,999 26,802 6.3% 3,224 10.6% e 14.1%

m $75-$99K

$50,000 $74,999 53,540 12.6% 5,469 18.0% o 12.6% c n I

$75,000 $99,999 53,276 12.6% 4,267 14.1% 18.0%

d $50-$74K l 12.6% $100,000 $149,999 93,425 22.1% 5,778 19.0% o h

e 10.6% Parkwood s $35-$49K

$150,000 $199,999 58,972 13.9% 2,710 8.9% u 6.3% Market Area o

$200,000 over 92,826 21.9% 3,020 9.9% H Fairfax County $25-$34K 6.5% Total 423,243 100% 30,367 100% 3.6% <$25K 12.9% 6.9% Median Income $117,982 $78,459 Source: ESRI; Real Property Research Group, Inc. 0% 5% 10% 15% 20% 25% % Households

Based on the U.S. Census Bureau’s American Community Survey data, the breakdown of tenure, and household estimates, RPRG estimates that the median income of Parkwood Market Area households by tenure is $66,497 for renters and $108,482 for owners (Table 18). Twenty-three percent of households in the Parkwood Market Area earn less than $35,000, 34 percent earn $35,000 to $74,999, and 33 percent earn between $75,000 and $149,999. Ten percent of households earn more than $150,000.

Table 18 Household Income by Tenure, Parkwood Market Area

Estimated 2018 HH Renter Owner 2018 HouseholdIncome by Tenure Income Households Households 2,350 200K+ 670 Parkwood Market 1,482 Area #%#% $150-$199.9K 1,228 less than $25,000 2,991 15.8% 927 8.1% 2 $100-$149.9K 2,307 $25,000 $34,999 1,403 7.4% 578 5.0% 3 3,470 1,559 $35,000 $49,999 2,402 12.7% 822 7.1% $75-$99.9K4 2,708 $50,000 $74,999 4,000 21.2% 1,470 12.8% 5 1,470 e $50-$74.9K

$75,000 $99,999 2,708 14.3% 1,559 13.6% m 6 4,000 o c

n 822 I $35-$49.9K Owner $100,000 $149,999 3,470 18.4% 2,307 20.1% 7

d 2,402 l Households $150,000 $199,999 1,228 6.5% 1,482 12.9% o 8 h 578

e $25-$34.9K s 9 1,403 Renter $200,000 over 670 3.5% 2,350 20.4% u

o Households

H 10 927 Total 18,871 100% 11,496 100% <$25K 2,991

Median Income $66,497 $108,482 0 1,000 2,000 3,000 4,000 5,000 Source: American Community Survey 2012-2016 Estimates, RPRG, Inc. # of Households

4. Cost-Burdened Renter Households ‘Rent Burden’ is defined as the ratio of a household’s gross monthly housing costs – rent paid to landlords plus utility costs – to that household’s monthly income. Data regarding the concept of rent burden from the 2012-2016 ACS highlight that more than one-third (35.5 percent) of all renter households residing in the Parkwood Market Area have rent burdens of 40 percent or higher. The

Page 33 Parkwood Apartments | Demographic Analysis

cost-burdened situation of many low- to moderate-income renter households is a primary indicator of a need for new affordable income- and rent-restricted rental housing in the primary market area. Additionally, 12.0 percent of the rental housing stock within the market area can be considered substandard, i.e., lacking complete plumbing facilities, or overcrowded with more than 1.0 occupants per room.

Table 19 Rent Burden by Household Income, 2012-2016, Primary Market Area

Rent Cost Burden Substandardness

Total Households # % Total Households Less than 10.0 percent 689 3.7% Owner occupied: 10.0 to 14.9 percent 1,046 5.6% Complete plumbing facilities: 10,699 15.0 to 19.9 percent 2,236 12.0% 1.00 or less occupants per room 10,415 20.0 to 24.9 percent 2,026 10.8% 1.01 or more occupants per room 284 25.0 to 29.9 percent 2,312 12.4% Lacking complete plumbing facilities: 8 30.0 to 34.9 percent 1,805 9.7% Overcrowded or lacking plumbing 292 35.0 to 39.9 percent 1,178 6.3% 40.0 to 49.9 percent 1,825 9.8% Renter occupied: 50.0 percent or more 4,803 25.7% Complete plumbing facilities: 18,617 Not computed 767 4.1% 1.00 or less occupants per room 16,451 Total 18,687 100.0% 1.01 or more occupants per room 2,166 Lacking complete plumbing facilities: 70 > 40% income on rent 6,628 37.0% Overcrowded or lacking plumbing 2,236 Source: American Community Survey 2012-2016 Substandard Housing 2,528 % Total Stock Substandard 8.6% % Rental Stock Substandard 12.0%

Page 34 Parkwood Apartments | Competitive Housing Analysis

COMPETITIVE HOUSING ANALYSIS

A. Introduction and Sources of Information This section presents data and analyses pertaining to the supply of housing in the Parkwood Market Area. We pursued several avenues of research to identify multifamily rental projects that are in the planning stages or under construction in the Parkwood Market Area. We spoke to Ervin Uriarti, Land Use Aide at Fairfax County’s Mason Supervisory District Office and reviewed local news publications including the Washington Business Journal. We reviewed project information on the City of Alexandria’s Planning and Development website, including a listing of development projects. We also checked LIHTC allocation and reviewed information on developer’s websites.

B. Overview of Market Area Housing Stock The Parkwood Market Area’s rental housing stock is much higher in density than that of the county as a whole (Table 20). More than half of rental units (53 percent) are in multifamily buildings with 20 units or more, compared to just 27 percent countywide. One-fourth of the rental stock in both areas is in buildings with 10 to 19 units; these are typically garden apartment buildings such as those of the subject community. Less than eight percent of the market area’s rental sock is single family detached or attached homes, much less than the countywide proportion of 34 percent.

Table 20 Renter Occupied Housing Units by Structure Type

Parkwood Market 2012-2016 Renter Occupied Units By Structure Renter Fairfax County Area 4.0% Occupied 1, detached 14.1% # % # % 3.5% 1, attached 19.5% 1, detached 18,729 14.1% 744 4.0% 1.0% Parkwood Market Area 2 1.0% e

1, attached 25,830 19.5% 657 3.5% p 3.8% y 3-4 2.5% T 2 1,387 1.0% 194 1.0% Fairfax County e 9.5% r 5-9 10.0% u

3-4 3,374 2.5% 711 3.8% t c 10-19 25.3% u 25.4% 5-9 13,302 10.0% 1,767 9.5% r t

S 52.9% 10-19 33,670 25.4% 4,723 25.3% 20+ units 26.8% 0.0% 20+ units 35,491 26.8% 9,891 52.9% Mobile home 0.5% Mobile home 720 0.5% 0 0.0% 0% 20% 40% 60% TOTAL 132,503 100% 18,687 100% % of Dwelling Units Source: American Community Survey 2012-2016

The Parkwood Market Area’s housing stock is older than the county among both renter-occupied and owner-occupied units. The median year built of renter occupied units is 1970 in the market area and 1982 in the county (Table 21). Over half (56 percent) of renter occupied units were built from 1960 to 1979 compared to 35 percent in the county. Only 16 percent of the market area’s rentals were built in 1990 or later compared to 35 percent in the county. Owner occupied units are similar in age to the rental units in the market area with a median year built of 1970, while the county’s owner occupied units have a median year built of 1980.

According to ACS data, the median value among owner-occupied housing units in the Parkwood Market Area as of 2012-2016 was $418,854, 19 percent less than the Fairfax County median of $518,420 (Table 22). This data is a less accurate and reliable indicator of home prices in an area than actual sales data but offers insight on relative housing values among two or more areas.

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Table 21 Occupied Units by Tenure and Year Built

Parkwood Market Parkwood Market Fairfax County Fairfax County Owner OccupiedArea Renter Occupied Area # % # % # % # % 2014 or later 505 0.2% 11 0.1% 2014 or later 672 0.5% 0 0.0% 2010 to 2013 3,115 1.1% 61 0.6% 2010 to 2013 3,491 2.6% 209 1.1% 2000 to 2009 27,238 9.9% 607 5.7% 2000 to 2009 19,494 14.7% 1,289 6.9% 1990 to 1999 39,504 14.4% 1,236 11.5% 1990 to 1999 23,270 17.5% 1,559 8.3% 1980 to 1989 67,880 24.7% 1,695 15.8% 1980 to 1989 25,886 19.5% 2,341 12.5% 1970 to 1979 56,747 20.7% 1,782 16.6% 1970 to 1979 27,829 21.0% 4,107 22.0% 1960 to 1969 38,473 14.0% 1,737 16.2% 1960 to 1969 18,812 14.2% 6,378 34.1% 1950 to 1959 30,901 11.3% 3,106 29.0% 1950 to 1959 8,941 6.7% 2,051 11.0% 1940 to 1949 6,927 2.5% 393 3.7% 1940 to 1949 2,881 2.2% 687 3.7% 1939 or earlier 3,215 1.2% 79 0.7% 1939 or earlier 1,354 1.0% 66 0.4% TOTAL 274,505 100% 10,707 100% TOTAL 132,630 100% 18,687 100% MEDIAN YEAR MEDIAN YEAR BUILT 1980 1970 BUILT 1982 1970 Source: American Community Survey 2012-2016 Source: American Community Survey 2012-2016

Table 22 Value of Owner Occupied Housing Stock

Parkwood Market Fairfax County 2012-2016 Home Value Parkwood Market Area 2012-2016 Home Value Area 10.5% $750> 20.3%Fairfax County # % # % 25.9% less than $60,000 4,259 1.6% 211 2.0% $500-$749K 32.0% 16.7% $60,000 $99,999 1,519 0.6% 146 1.4% $400-$499K 18.0% $100,000 $149,999 3,509 1.3% 585 5.5% $300-$399K 12.9% ) 15.3% $150,000 $199,999 6,226 2.3% 947 8.8% s 0 0 $200-$299K 16.3% $200,000 $299,999 23,899 8.7% 1,744 16.3% 0 8.7% $ (

$300,000 $399,999 41,964 15.3% 1,383 12.9% e $150-$199K 8.8% u

l 2.3% $400,000 $499,999 49,396 18.0% 1,790 16.7% a V $100-149k 5.5% $500,000 $749,999 87,952 32.0% 2,772 25.9% e 1.3% m o $60-$99K 1.4% $750,000 over 55,781 20.3% 1,129 10.5% H 0.6% Total 274,505 100% 10,707 100% 2.0% < $60K 1.6%

Median Value $518,420 $418,854 0% 10% 20% 30% 40% Source: American Community Survey 2012-2016 % of Owner Occupied Dwellings

C. Survey of General Occupancy Rental Communities

1. Introduction to the Rental Housing Survey RPRG surveyed 25 multi-family rental communities in the Parkwood Market Area, which include a range of property types and price points. The survey goes beyond the most directly comparable communities to provide an overall insight on market conditions and rental housing options. For the purposes of this analysis, we have segmented the surveyed communities into two tiers:  Upper Tier – Eight market rate communities operating at the top of the market.  Lower Tier – Seventeen older communities priced below the top of the market area including thirteen market rate properties and four LIHTC properties with rent/income restricted units (including the subject).

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Profile sheets with detailed information on each surveyed community, including photographs, are attached as Appendix 5.

2. Location The surveyed communities are concentrated along Leesburg Pike and I-395 (Map 6). The closest communities to the subject are Hillwood Manor and Vista Gardens. The subject and the other three LIHTC properties are along the Leesburg Pike corridor.

Map 6 Surveyed Competitive Rental Communities

3. Age of Communities The overall year built of the surveyed communities is 1975 but is heavily influenced by the old Lower Tier communities (Table 23). The eight Upper Tier communities were built from 1974 to 2016 with an average year built of 2000. The 17 Lower Tier communities were built from 1949 to 1980 with an average year built of 1961.

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Table 23 Rental Communities Summary

Map Year Year Structure Total Vacant Vacancy Avg 1BR Avg 2BR # Community Built Rehab Type Units Units Rate Rent (1) Rent (1) Incentive Upper Tier Communities 2 mo free w/23 mo lease; 1/2 off 1 e-lofts## 2016 Ad. Reuse 200 18 9.0% $2,253 $2,960 parking; waived amenity fee 2 Halstead Towers 2007 High Rise 172 7 2.9% $1,868 $2,499 None 3 Bailey's Crossing 2009 Mid Rise 414 17 4.1% $1,806 $2,451 None 4 Curve 6100 2009 Mid Rise 136 1 0.7% $1,737 $2,297 None Town Square at Mark 5 2000 Mid Rise 272 3 1.1% $1,762 $2,266 None Center (Ph. 2) 6 Avana Alexandria 1989 2009 High Rise 326 12 3.7% $1,856 $2,093 None Town Square at Mark 7 1997 Mid Rise 406 9 2.2% $1,728 $1,905 None Center (Ph. 1) 8 Blvd2801 1974 2011 High Rise 577 4 0.7% $1,715 $1,863 None Sub-Total/Average 2000 2,503 71 2.8% $1,840 $2,292 Stabilized Total 2,303 53 2.3% Lower Tier Communities 9 Munson Hill Towers 1963 1997 High Rise 279 2 0.7% $1,618 $2,000 None 10 Lerner Excelsior Tower 1980 High Rise 357 12 3.4% $1,669 $1,839 $500 Move-in on all vacants. 2BR-$61/monthly; $11/monthly 11 Barcroft View 1962 Gar 370 4 1.1% $1,465 $1,797 all others 12 Jefferson, The 1964 2005 Mid Rise 310 2 0.6% $1,478 $1,774 None 13 Hillwood Manor 1949 Gar 171 3 1.8% $1,374 $1,717 2BR $1492/mo. 14 Columbia View Gar 52 1 1.9% $1,395 $1,695 None 15 Skyline Towers 1971 High Rise 939 17 1.8% $1,461 $1,658 None 16 Barcroft Plaza 1966 Gar 196 4 2.0% $1,339 $1,647 None 17 Brookdale at Mark Center 1960 Gar 472 5 1.1% $1,308 $1,630 None 18 Stoneridge at Mark Center 1968 Gar 802 5 0.6% $1,441 $1,581 None 19 Vista Gardens 1949 Gar 296 0 0.0% $1,300 $1,570 None 20 Grandview** 1962 Gar 266 0 0.0% $1,288 $1,542 None 21 Parkwood** ^^ 1949 1994 Gar 221 0 0.0% $1,274 $1,523 None 22 Hollybrooke II and III** 1952 Gar 148 4 2.7% $1,273 $1,520 None 23 Lynnbrook @ Mark Center 1970 Gar 979 4 0.4% $1,411 $1,473 None 24 Bennington Crossing 1965 Gar 308 5 1.6% $1,307 $1,443 None 25 Carousel Court** 2008 Gar 90 1 1.1% $1,155 $1,382 None Sub-Total/Average 1961 6,256 69 1.1% $1,386 $1,635 Total/Average 1975 8,759 140 1.6% $1,531 $1,845 Stabilized Total 8,559 122 1.4% LIHTC Total 725 5 0.7% (**) Tax Credit Communities (^^) Subject Community ## In leaseup (1) Rent is contract rent, and not adjusted for utilities or incentives Source: Field/Phone Surveys, RPRG, Inc. May/June 2018.

4. Structure Type One Upper Tier community is an adaptive reuse of an office building and seven are newly constructed mid-rise or high-rise buildings. The Lower Tier communities include a combination of garden-style apartments, and mid rise and high rise buildings.

5. Size of Communities The 25 surveyed communities range from 52 to 979 units and average 350 units per community. Upper Tier communities are smaller on average with 313 units per community compared to 368 units for the Lower Tier.

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6. Vacancy Rates The 24 stabilized communities combine for 122 vacancies for an aggregate vacancy rate of 1.4 percent. In addition, one Upper Tier property is in lease up (e-lofts) with 18 vacant units among 200 total units. Aggregate stabilized vacancy rates by tier are 2.3 percent for Upper Tier and 1.1 percent for Lower Tier. Vacancy rates at individual stabilized Upper Tier properties range from 0.7 percent (two communities) to 4.1 percent (Bailey’s Crossing). Lower Tier vacancy rates range from 0.0 percent (three properties) to 3.4 percent (Lerner Excelsior Tower).

The aggregate LIHTC vacancy rate was very low at 0.7 percent and ranged from 0.0 percent (two communities including the subject) to 2.7 percent (Hollybrooke II and III). Two LIHTC properties have waiting lists. The waiting list for Carousel Court is 1.5 to 2 years. Parkwood, the subject community, has a waiting list of about 220 households.

7. Rent Concessions Only one Upper Tier property has a rent incentive. E-lofts, which is in lease up, has a large incentive of two months free with a 23 month lease, half off parking fees, and a waived amenity fee. Fourteen Lower Tier properties have no rent incentive, one has reduced rent on two-bedroom units, and two have reduced rents for all units.

8. Absorption History The only property to open in this market since 2009 is e-lofts, which is in lease up. The 200-unit property opened in September 2016, and is 91 percent occupied as of June 2018, for an average absorption pace of less than nine units per month to date. The property is unusual in that it offers live-work lofts; customizable lofts for live, work or both. As such, the community serves a niche market and has a narrower target market than that of a conventional property. Furthermore, the property is in an area with an older rental housing stock and without direct access to a metro station. As such, it is at a disadvantage compared to other submarkets in northern Virginia such as the Ballston-Rosslyn corridor, a transit-oriented area with many new apartments and restaurants. Finally, the two- bedroom units at e-lofts appear to be overpriced for this market, even with a large rent incentive. For these reasons, we do not believe that this absorption pace is representative for a typical rental community in this market.

D. Analysis of Rental Pricing and Product

1. Payment of Utility Costs None of the Upper Tier properties include any utilities in rent (Table 24). In contrast, the older Lower Tier properties typically include some utilities in rent, such as heat or hot water. Four Lower Tier properties, including the subject community, include all utilities except electricity in rent.

2. Unit Features All Upper Tier communities include dishwashers, microwaves, and washer/dryer machines in all units. Three properties have standard high-end finishes of granite or quartz counters and stainless steel appliances, and one offers these in select units.

Among Lower Tier properties, 13 of 17 have dishwashers in all units, while only three properties include microwaves in all units. Three Lower Tier properties have washer/dryer machines in all units, and three have them in select units.

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Table 24 Utility Arrangement and Unit Features, Surveyed Communities

Utilities Included in Rent r e t g a c i n r i r W e h t t Heat k Dish- Micro-

t s c t a o a a e e o o Community Type l r washer wave Parking In-Unit Laundry H H C E W T

Upper Tier Communities e-lofts Elec o o o o o o Std Std Stru. Gar. Std - Full Halstead Towers Elec o o o o o o Std Std Und. Gar. Std - Full Bailey's Crossing o o o o o o Std Std Att. Gar. Std - Full Curve 6100 Gas o o o o o o Std Std Und. Gar. Std - Full Town Square at Mark Center (Phase 2) Elec o o o o o o Std Std Paid Surf. Std - Full Avana Alexandria Elec o o o o o o Std Std Surface Std - Full Town Square at Mark Center (Phase 1) Elec o o o o o o Std Std Paid Surf. Std - Full Blvd2801 Gas o o o o o o Std Std Surface Std - Full

Lower Tier Communities Munson Hill Towers Gas o o o o o x Std Std Surface Lerner Excelsior Tower Gas x o x x o x Std Std Stru. Gar. Select Barcroft View Gas x x x x o x Select Surface Jefferson, The Gas o o o o x x Std Surface Hillwood Manor Elec x x x x x x Surface Columbia View Elec o o o o o x Std Std Surface Std - Full Skyline Towers Elec o o o o o o Std Stru. Gar. Select Barcroft Plaza Gas o o o o o x Std Select Surface Brookdale at Mark Center Gas x o x o o o Std Select Surface Select Stoneridge at Mark Center Gas o o o o o o Std surface Std - Full Vista Gars Gas x x x o x x Surface Grandview Gas x x x o x x Select Surface Parkwood ^^ Gas x x x o x x Std Surface Hollybrooke II and III Elec x x x o x x Std Surface Std - Full Lynnbrook @ Mark Center Gas o o x o o o Std surface Bennington Crossing Gas o o o o o o Std Surface Carousel Court Gas o x x o x x Std Surface

(^^) Subject Community Source: Field/Phone Surveys, RPRG, Inc. May/June 2018.

3. Parking Six properties offer garage parking for a fee (Table 25). Four properties have structured garages with fees ranging from $50 to $150 per month. Two properties have attached garages with fees of $50 and $75 per month. Five properties have paid on-site surface parking, with fees ranging from $35 to $100 and averaging $60.

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Table 25 Garage Parking Fees

Garages Community Type Price Blvd 2801 Att. Gar. $50 Skyline Towers Stru. Garage $50 Bailey's Crossing Att. Gar. $75 Halstead Towers Und. Garg. $100 e-lofts Stru. Garage $100 Lerner Excelsior Tower Stru. Garage $150 Average $88

Paid Surface Parking Community Type Price The Jefferson Fee for Reserved $35 Town Square at Mark Center Paid On Site $40 Avana Alexandria Fee for Reserved $50 Blvd 2801 2nd surface space $75 Lerner Excelsior Tower Fee for Reserved $100 Average $60

Source: Field/Phone Surveys, RPRG, May/June 2018

4. Community Amenities Most Upper Tier communities include community gathering spaces, fitness centers and swimming pools for resident recreation (Table 26). Additional amenities at select Upper Tier properties include courtyards, roof decks, game rooms with billiards, and dog parks. Amenity packages are more modest at Lower Tier properties. Only seven of 17 Lower Tier properties have a community room or lounge, only eight have a fitness center, and eleven have an outdoor pool.

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Table 26 Community Amenities, Surveyed Communities o e d i c n d d r n k u u

r r a e t

o e s

r a e y / S r s g t

t e e P g m e l r f a a n m y / g m o o u n n e g u o z a t a o o i o o l o o h i o o

Community L F R P D C G r P T B C Y

Upper Tier Communities e-lofts x x o o o o o x x o Halstead Towers x x x o x o o o x o Bailey's Crossing x x x o o x o o x x Curve 6100 x x x o o o o o x o Town Square at Mark Center (Phase 2) x x x o o o x o o o Avana Alexandria x x x x o x o o x o Town Square at Mark Center (Phase 1) x x x o o o x o o o Blvd2801 x x x o o o o x x o

Lower Tier Communities Munson Hill Towers x x x o o o x o x o Lerner Excelsior Tower x x x o o x x o o o Barcroft View o o x o o o x o o o Jefferson, The x x x o o o o o o o Hillwood Manor o o o o o o o o o o Columbia View o x o o o o x o o o Skyline Towers o x x o o o o o x o Barcroft Plaza o o x o o o x o o o Brookdale at Mark Center x x x x x o x o x o Stoneridge at Mark Center x x x o o o x o o o Vista Gars o o o o o o o o o o Grandview o o x o o o x o o o Parkwood ^^ x o o o o o x o o o Hollybrooke II and III o o o o o o o o o o Lynnbrook @ Mark Center x x x o o o o o x o Bennington Crossing o o x o o o x o o o Carousel Court o o o o o o o o o o

(^^) Subject Site Source: Field/Phone Surveys, RPRG, Inc. May/June 2018.

5. Distribution of Units by Bedroom Type All Upper Tier communities have one and two bedroom units, while one has just one efficiency unit, one has just one four-bedroom unit (not shown on the table) and four properties have three-bedroom units (Table 27). Among the 17 Lower Tier properties, seven have efficiency units, all have one- bedroom and two-bedroom units, and ten have three-bedroom units.

Based on the limited sample of unit distribution available, one bedroom units are the most common unit type among Upper Tier communities accounting for 53 percent of all units. Two bedroom units comprise 46 percent of Upper Tier units.

Among Lower Tier properties, two-bedroom units account for more than half of all units (55 percent), while 39 percent of units are one-bedroom units. Four percent of Lower Tier units are efficiencies, and two percent are three-bedroom units.

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Table 27 Unit Distribution, Size and Pricing, Surveyed Rental Communities

Total Efficiency Units One Bedroom Units Two Bedroom Units Three Bedroom Units Community Units Units Rent(1) SF Rent/SF Units Rent(1) SF Rent/SF Units Rent(1) SF Rent/SF Units Rent(1) SF Rent/SF

Upper Tier Communities e-lofts 200 1 $1,510 447 $3.38 $2,153 860 $2.50 $2,818 1,150 $2.45 Halstead Towers 172 $1,964 800 $2.45 $2,615 1,355 $1.93 Bailey's Crossing 414 231 $1,901 874 $2.17 161 $2,566 1,349 $1.90 7 $3,251 1,521 $2.14 Curve 6100 136 51 $1,832 879 $2.08 85 $2,412 1,137 $2.12 Town Square 1 272 $1,857 809 $2.29 $2,381 1,151 $2.07 Avana Alexandria 326 $1,951 700 $2.79 $2,208 1,184 $1.86 1 $2,911 1,500 $1.94 Town Square 2 406 $1,823 826 $2.21 $2,020 1,037 $1.95 $2,662 1,257 $2.12 Blvd2801 577 $1,812 1,039 $1.74 $1,980 1,215 $1.63 $2,729 1,900 $1.44 2,503 $1,510 447 $3.38 $1,911 849 $2.25 $2,375 1197 $1.98 $2,888 1545 $1.87 537 1 282 246 8 21.5% 0.2% 52.5% 45.8% 1.5%

Lower Tier Communities Skyline Towers 939 $1,407 640 $2.20 $1,556 1,040 $1.50 $1,773 1,350 $1.31 $2,199 1,621 $1.36 Munson Hill Towers 279 35 $1,516 559 $2.71 150 $1,703 874 $1.95 83 $2,105 1,125 $1.87 11 $2,680 1,333 $2.01 Jefferson, The 310 57 $1,384 600 $2.31 156 $1,548 813 $1.91 97 $1,859 1,225 $1.52 Bennington Crossing 308 75 $1,402 805 $1.74 168 $1,558 969 $1.61 2 $1,880 1,134 $1.66 Lerner Excelsior Tower 357 $1,306 458 $2.85 $1,627 759 $2.14 $1,797 1,000 $1.80 Carousel Court-60%** 90 $1,310 742 $1.77 $1,569 951 $1.65 $1,810 1,172 $1.54 Carousel Court-50%** n/a $1,090 742 $1.47 $1,305 951 $1.37 $1,505 1,172 $1.28 Barcroft View 370 $1,434 720 $1.99 $1,711 1,012 $1.69 $2,192 1,140 $1.92 Vista Gardens 296 57 $1,300 700 $1.86 239 $1,570 800 $1.96 Stoneridge 802 $1,536 692 $2.22 $1,696 1,024 $1.66 $2,004 1,163 $1.72 Hillwood Manor 171 72 $1,339 678 $1.97 99 $1,447 873 $1.66 Lynnbrook 979 $1,501 678 $2.22 $1,583 960 $1.65 $2,060 1,088 $1.89 Columbia View 52 $1,480 670 $2.21 $1,800 910 $1.98 $2,425 1,125 $2.16 Barcroft Plaza 196 8 $1,219 410 $2.97 92 $1,424 652 $2.18 70 $1,752 806 $2.17 26 $2,060 1,095 $1.88 Brookdale 472 12 $1,316 500 $2.63 199 $1,353 651 $2.08 261 $1,685 925 $1.82 Parkwood-60%** ^^ 221 48 $1,274 610 $2.09 173 $1,523 750 $2.03 Grandview-60%** 266 2 $1,211 451 $2.69 92 $1,288 609 $2.11 148 $1,542 945 $1.63 24 $1,778 1,050 $1.69 Hollybrooke II and III- 60%** 148 60 $1,273 570 $2.23 77 $1,520 710 $2.14 6,256 $1,337 517 $2.59 $1,413 722 $1.96 $1,655 960 $1.72 $2,054 1190 $1.73 2,593 114 1,001 1,415 63 41.4% 4.4% 38.6% 54.6% 2.4%

8,759 $1,359 508 $2.67 $1,567 761 $2.06 $1,877 1033 $1.82 $2,276 1285 $1.77 3,130 115 1,283 1,661 71 35.7% 3.7% 41.0% 53.1% 2.3% (**) Tax Credit Communities (^^) Subject Site Avana Alexandria has one four-bedroom unit not shown on this table. (1) Rent is adjusted to include incentives and all utilities except electric Source: Field/Phone Surveys, RPRG, Inc. May/June 2018.

6. Effective Rents Unit rents presented in Table 27 are net or effective rents, as opposed to street or advertised rents. We applied downward adjustments to street rents to control for current rental incentives. The net rents further reflect adjustments to street rents to equalize the impact of utility expenses across complexes. Specifically, the net rents represent the hypothetical situation where all utilities except electricity are included in rent. This is the utility arrangement for the subject community.

Among Upper Tier communities, the average effective rents are:  Studio rents at $1,510 for 447 square feet or $3.38 per square foot (one unit at e-lofts).  One bedroom rents at $1,911 for 849 square feet or $2.25 per square foot.  Two bedroom rents at $2,375 for 1,197 square feet or $1.98 per square foot.

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 Three bedroom rents at $2,888 for 1,545 square feet or $1.87 per square foot. Among Lower Tier communities, the average effective rents are:  Studio rents at $1,337 for 517 square feet or $2.59 per square foot.  One bedroom rents at $1,413 for 722 square feet or $1.96 per square foot.  Two bedroom rents at $1,655 for 960 square feet or $1.72 per square foot.  Three bedroom rents at $2,054 for 1,190 square feet or $1.73 per square foot. Among the LIHTC communities, only Grandview has efficiency units, which rent for $1,211 for 451 square feet, or $2.69 per square foot (60 percent AMI). One-bedroom LIHTC rents range from $1,090 (Carousel Court 50 percent) to $1,310 (Carousel Court 60 percent). Two-bedroom LIHTC rents range from $1,305 (Carousel Court 50 percent) to $1,569 (Carousel Court 60 percent). Three-bedroom LIHTC rents range from $1,505 (Carousel Court 50 percent) to $1,810 (Carousel Court 60 percent). The one- and two-bedroom rents and Parkwood are in the mid-range of rents for LIHTC units in the market.

E. Most Comparable/Relevant Communities The renovated units at Parkwood Apartments will compete directly with the existing Lower Tier stock, particularly the older garden apartments that are at the lower end of the rent range. The most relevant multi-family communities in the market area include:  Parkwood Apartments is the existing subject community. The property was placed in service in 1949 and is among the oldest properties in the market. All units are LIHTC units at 60 percent AMI. Unit sizes are among the smallest in the market, and rents are among the lowest. The property is fully leased with a waiting list of about 220 households. The property manager informed RPRG that most residents learn of the community by word of mouth. The closest competitor is Vista Gardens, which is also a garden apartment community placed in service in 1949 and adjacent to Parkwood Apartments. The property manager also informed RPRG that Parkwood is attractive to residents because it has central heat and air conditioning, unlike the other nearby properties. Most residents move from other properties in Falls Church.  Vista Gardens is a market rate, garden apartment community placed in service in 1949, and is adjacent to the subject community. The 296-unit property is fully leased. Rents and unit sizes are below average in the context of Lower Tier offerings in the market. Units do not have dishwashers, microwaves, or central air/heating, and the only common area amenities are laundry rooms. Management reported that no upgrades have been made to the community. The average one-bedroom rent is $1,300 for 700 square feet or $1.86 per square foot. The average two-bedroom unit is $1,570 for 800 square feet or $1.96 per square foot.  Hillwood Manor is a market rate, garden apartment community placed in service in 1949, and is less than one-fourth mile northwest of the subject community. The 171-unit property has a low vacancy rate of 1.8 percent. Rents and unit sizes are below average in the context of Lower Tier units in the market. Units do not have dishwashers, microwaves, or central air/heating, and the only common area amenities are laundry rooms. The average one- bedroom rent is $1,339 for 678 square feet or $1.97 per square foot. The average two- bedroom unit is $1,447 for 873 square feet or $1.66 per square foot.  Hollybrooke II and III is a garden apartment community placed in service in 1952 that is less than two miles northwest of the subject community in the Seven Corners area. The 148-unit property has a low vacancy rate of 2.7 percent. All units are LIHTC units at 60 percent AMI. Rents and unit sizes are below average in the context of Lower Tier units in the market. Units have dishwashers, washer-dryer machines, and central air/heating. The property does not have common area amenities. The average one-bedroom rent is $1,273 for 570 square feet or $2.23 per square foot. The average two-bedroom unit is $1,520 for 710 square feet or $2.14 per square foot.

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F. Derivation of Market Rent

1. Introduction To illustrate the position of the proposed subject rents within the local rental market, rent levels of the most comparable market-rate communities are adjusted for a variety of factors including: location, curb appeal, unit size (square footage), in-unit appliances and other features, common area amenities, concessions, and utility arrangements for each bedroom type. The purpose of this exercise is to determine whether the proposed LIHTC rents for the subject offer a value relative to market-rate rent levels within a given market area. The rent derived for bedroom type is not to be confused with an appraisal or rent comparability study (RCS) based approach, which is more specific as it compares specific models in comparable rental communities to specific floor plans at the subject and is used for income/expense analysis and valuation.

2. Selection of Comparable Properties In total, three market rate, general-occupancy communities were used in this analysis. We selected rental comparables most relevant to the subject in terms of target market (family, senior), structure types offered (garden, townhomes, mid-rise), age and condition, and community features and amenities offered.

3. Description of Rent Adjustments An explanation of each rent adjustment made to the comparable communities follows:

Rents Charged – current asking rents, adjusted for utilities and incentives, if applicable. Design, Location, Condition – adjustments made in this section include:  Structure/Stories – No adjustments were made as the subject and three comparables are garden apartments.  Year Built/ Renovated – The subject was placed in service in 1949 and will be renovated in 2019. We applied an upward adjustment of $100 for the two communities that were placed in service in 1949 and have not been recently renovated. We made a downward adjustment for the property that was placed in service in 1960 and is now undergoing renovations.  Quality/Street Appeal – We made an upward adjustment of $50 for the properties that have not had a recent renovation.  Location – The subject and comparables all have average locations. Unit Equipment / Amenities– adjustments made in this section include:  Bedrooms – No adjustments were necessary.  Bathrooms – No adjustments were necessary.  Square Footage – Differences between comparables and the subject property are accounted for by an upward or downward adjustment of $0.25 per foot.  Unit Features – Adjustments were made for unit features included or excluded at the subject property. The exact value of each specific adjustment is somewhat subjective as particular amenities are more attractive to certain renters and less important to others. Adjustment values of $5 were made for dishwashers and microwaves, $25 for washer/dryer machines, and $50 for central air conditioning.  Site Equipment / Amenities –Adjustment values of $5 to $10 were applied.

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Table 28 Rent Adjustments Summary

Rent Adjustments Summary B. Design, Location, Condition Structure / Stories $0.00 Year Built / Renovated $25.00 Quality/Street Appeal $50.00 Location $25.00 C. Unit Equipment / Amenities Number of Bedrooms $100.00 Number of Bathrooms $30.00 Unit Interior Square Feet $0.25 Balcony / Patio / Porch $5.00 AC Type: $50.00 Range / Refrigerator $25.00 Microwave / Dishwasher $5.00 Washer / Dryer: In Unit $25.00 Washer / Dryer: Hook-ups $5.00 D. Site Equipment / Amenities Parking $0.00 Computer Center $10.00 Community Room $10.00 Pool $10.00 Playground $5.00 Fitness Center $10.00

The evaluated subject rents in the following grids are the proposed rents for the 60 percent AMI units. In this analysis, we averaged the adjusted rents to estimate the achievable market rent for the subject project. According to our adjustment calculations, the estimated market rents for the units at Parkwood Apartments are $1,540 for one-bedroom units (Table 29) and $1,732 for two-bedroom units (Table 30). This results in rent advantages of 17.3 percent for one-bedroom units and 12.1 percent for two-bedroom units (Table 31).

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Table 29 Market Rent Analysis – One-Bedroom Units

One Bedroom Units Subject Property Comparable Property #1 Comparable Property #2 Comparable Property #3 Parkwood Apartments Hillwood Manor Vista Gardens Barcroft Plaza 6034 Vista Drive 6079 Bellview Drive 6008 Vista Drive 3601 Malibu Circle Falls Church, VA 22041 Falls Church Virginia Falls Church Virginia Falls Church Virginia Subject Data $ Adj. Data $ Adj. Data $ Adj. Street Rent $1,274 $1,374 $0 $1,300 $0 $1,330 $0 Utilities Included All but E All ($35) All but E $0 T $85 RentConcessions None None $0 None $0 None $0 Effective Rent $1,274 $1,339 $1,300 $1,415 In parts B thru D, adjustments were made only for differences B. Design, Location, Condition Data $ Adj. Data $ Adj. Data $ Adj. Structure / Stories Gar Garden $0 Garden $0 Garden $0 Year Built / Renovated 1949/2019 1949 $100 1949 $100 1966 $100 Quality/Street Appeal Above Average Average $50 Average $50 Average $50 Location Average Average $0 Average $0 Average $0 C. Unit Equipment / Amenities Data $ Adj. Data $ Adj. Data $ Adj. Number of Bedrooms 1 1 $0 1 $0 1 $0 NumberofBathrooms 1 1 $0 1 $0 1 $0 Unit Interior Square Feet 610 678 ($17) 700 ($23) 628 ($5) Balcony / Patio / Porch No No $0 No $0 No $0 AC Type: Central None $50 None $50 Central $0 Range/Refrigerator Yes/Yes Yes/Yes $0 Yes/Yes $0 Yes/Yes $0 Microwave/Dishwasher No/Yes No/No $5 No/No $5 No/Yes $0 Washer / Dryer: In Unit No No $0 No $0 No $0 Washer / Dryer: Hook-ups No No $0 No $0 No $0 D. Site Equipment / Amenities Data $ Adj. Data $ Adj. Data $ Adj. Parking Surface Surface $0 Surface $0 Surface $0 ComputerCenter Yes No $10 No $10 No $10 Community Room Yes No $10 No $10 No $10 Pool No No $0 No $0 Yes ($10) Playground Yes No $5 No $5 Yes $0 Fitness Center No No $0 No $0 Yes ($10) E. Adjustments Recap Positive Negative Positive Negative Positive Negative TotalNumberofAdjustments 7 1 7 1 4 3 Sum of Adjustments B to D $230 ($17) $230 ($23) $170 ($25) F. Total Summary Gross Total Adjustment $247 $253 $195 Net Total Adjustment $213 $207 $145 G. Adjusted And Achievable Rents Adj. Rent Adj. Rent Adj. Rent Adjusted Rent $1,552 $1,507 $1,560 %ofEffectiveRent 115.9% 115.9% 110.2% Estimated Market Rent $1,540 Rent Advantage $ $266 Rent Advantage % 17.3%

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Table 30 Market Rent Analysis – Two-Bedroom Units

Two Bedroom Units Subject Property Comparable Property #1 Comparable Property #2 Comparable Property #3 Parkwood Apartments Hillwood Manor Vista Gardens Barcroft Plaza 6034 Vista Drive 6079 Bellview Drive 6008 Vista Drive 3601 Malibu Circle Falls Church, VA 22041 Falls Church Virginia Falls Church Virginia Falls Church Virginia A. Rents Charged Subject Data $ Adj. Data $ Adj. Data $ Adj. Street Rent $1,523 $1,717 $0 $1,570 $0 $1,610 $0 Utilities Included All but E All ($45) All but E $0 T $105 Rent Concessions None Reduced Rent ($225) None $0 None $0 Effective Rent $1,523 $1,447 $1,570 $1,715 In parts B thru D, adjustments were made only for differences B. Design, Location, Condition Data $ Adj. Data $ Adj. Data $ Adj. Structure / Stories Gar Garden $0 Garden $0 Garden $0 YearBuilt/Condition 1949/2019 1949 $100 1949 $100 1966 $0 Quality/Street Appeal Above Average Average $50 Average $50 Average $50 Location Average Average $0 Average $0 Average $0 C. Unit Equipment / Amenities Data $ Adj. Data $ Adj. Data $ Adj. NumberofBedrooms 2 2 $0 2 $0 1 $0 Number of Bathrooms 1 1 $0 1 $0 1 $0 Unit Interior Square Feet 750 873 ($31) 800 ($13) 760 ($3) Balcony/Patio/Porch No No $0 No $0 No $0 AC Type Central None $50 None $50 Central $0 Range / Refrigerator Yes / Yes Yes / Yes $0 Yes / Yes $0 Yes / Yes $0 Microwave / Dishwasher No / Yes No / No $5 No / No $5 No / Yes $0 Washer / Dryer: In Unit No No $0 No $0 No $0 Washer / Dryer: Hook-ups No No $0 No $0 No $0 D. Site Equipment / Amenities Data $ Adj. Data $ Adj. Data $ Adj. Parking Surface Surface $0 Surface $0 Surface $0 Computer Center Yes No $10 No $10 No $10 Community Room Yes No $10 No $10 No $10 Pool No No $0 No $0 Yes ($10) Playground Yes No $5 No $5 Yes $0 Fitness Center No No $0 No $0 Yes ($10) E. Adjustments Recap Positive Negative Positive Negative Positive Negative Total Number of Adjustments 7 1 7 1 3 3 Sum of Adjustments B to D $230 ($31) $230 ($13) $70 ($23) F. Total Summary Gross Total Adjustment $261 $243 $93 Net Total Adjustment $199 $217 $47 G. Adjusted And Achievable Rents Rent Adj. Rent Adj. RentAdj. AdjustedRent $1,646 $1,787 $1,762 % of Effective Rent 113.8% 113.8% 102.7% Estimated Market Rent $1,732 Rent Advantage $ $209 Rent Advantage % 12.1%

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Table 31 Market Rent Advantage - Summary

One Bedroom Two Bedroom 60% AMI Units Units Units Subject Rent $1,274 $1,523 Estimated Market Rent $1,540 $1,732 Rent Advantage ($) $266 $209 Rent Advantage (%) 17.3% 12.1%

G. Achievable Restricted Rents

The market rent derived above is an estimate of what a willing landlord might reasonably expect to receive, and a willing tenant might reasonably expect to pay for a unit at the subject. However, as a tax credit community, the maximum rent that a project owner can charge for a low-income unit is a gross rent based on bedroom size and applicable HUD’s median household income for the subject area. If these LIHTC maximum gross/net rents are below the market rent, then the maximum rents also function as the achievable rents for each unit type and income band. Conversely, if the market rents are below the LIHTC maximum rents, then the market rents act as the achievable rents. Therefore, achievable rents are the lower of the market rent or maximum LIHTC rent.

As shown in Table 32, the maximum LIHTC rent for one-bedroom and two-bedroom units is the achievable rent as it is lower than the estimated market for both unit types. The proposed rents for the subject are equal to the maximum LIHTC rents. We note that these are also the current rents at the subject community.

Table 32 Achievable Tax Credit Rent

Two One Bedroom Bedroom 60% AMI Units Units Units Estimated Market Rent $1,540 $1,732 Less 10% $1,386 $1,559 Maximum LIHTC Rent $1,274 $1,523 Achievable Rent $1,274 $1,523 SUBJECT RENT $1,274 $1,523

H. Proposed and Under Construction Rental Communities As of May/June 2018, RPRG identified more than 1,400 units at multifamily rental developments that are proposed or planned in the market area. In Table 33, we list key information on each planned project with a multifamily rental component identified in the Parkwood Market Area. Map 7 illustrates the locations of the pipeline rental communities.

The pipeline communities are divided into two categories; near term, and long term. The near term projects are those that are under construction, and those which are reasonably likely to deliver in the next three years. These near-term projects are taken into account in our derivation of three-year rental demand in the market and account for 558 units. Three of the projects are under construction. St. James Plaza is a 93-unit LIHTC community in Alexandria. AHDC Gateway is a 74-unit LIHTC

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community in Alexandria and is part of a larger mixed-use project. Array West Alex is a 278-unit market rate community that is under construction at the same site as AHDC Gateway. The Spire is a 113-unit LIHTC community in Alexandria that is expected to deliver in 2021.

The long term projects do not have financing secured, do not have full approvals, are on hold for the present, and/or have estimated delivery dates beyond the next three years. Combined, these account for 920 units. While it is RPRG’s best estimate that these projects are long term, it is entirely possible that one or more of these projects could secure approvals and financing and deliver in a three-year period. Conversely, it is also possible that any number of the projects could become further stalled, tabled, or abandoned all together. All three long term projects are market rate.

Table 33 Pipeline Communities, Parkwood Market Area

No. of Name of Project Location Developer Units Status Near-Term Under construction. 0, 1, 2, and 3 bedroom units at 40 to 60 perent AMI. Units comparable to 5000 Echols subject will be 2 one-bedroom units at 60 percent AMI and 34 two bedroom units at 60 St. James Plaza AHC 93 Ave., Alexandria percent AMI. Construction began November 2017. Expected to open later in 2018. Waiting list had 2,600 households as of early March 2018. Under construction, not yet leasing. Expected to open early 2019. 0, 1, 2 and 3 bedroom units 4622 King at 40, 50 and 60 percent AMI. Units comparable to subject will be 4 one-bedroom units at 60 AHDC Gateway Street, AHDC 74 percent AMI and 25 two-bedroom units at 60 percent AMI. Undgerground Parking. Part of Alexandria mixed use development with Harris Teeter and market rate apartments. 4600 King Weingarten Realty Part of mixed use development anchored by Harris Teeter grocery. Expected to open in 2019. Array West Alex Street, 278 Investors Managed by Bozzuto. Under construction. Alexandria

Redevelopment of the Church of the Resurrection site in Alexandria's Beauregard 2280 N. AHC, Episcopal neighborhood. Will include 113 affordable apartments and a new church building. Received 9 The Spire Beauregard St., Church of the 113 percent tax credit allocation for 2018 round. Construction completion expected for April 2021. Alexandria Resurrection (ECR) 0, 1, 2 and 3 bedroom units at 40 to 60 percent AMI. Units comparable to subject are 10 one- bedroom units at 60 percent AMI and 40 two-bedroom units at 60 percent AMI.

Total Near-Term Pipeline 558 Long-Term

3101 Park Proposal to rehabilitate two office buildings and convert to multifamily use, with up to 393 Center Dr., 4401 apartments. Project will be presented to Planning Commission and City Council in June 2018. Park Center Lowe Enterprises 393 Ford Ave., City Could be approved by City Council June 23, 2018. Planning staff recommends approval with of Alexandria conditions.

5600 Columbia Vacant, 10-story office building will be converted to live-work concept apartments. Project has e-lofts Pike, Falls Conrad Cafritz 157 been approved by Fairfax County, and is now undergoing site plan review. Church Currently on site is vacant low-rise businesses, vacant office building, and Fairfax County's Bailey's Community Shelter. Plans include a multifamily building of up to 370 units (including 43 workforce housing units), ground-floor retail and restaurant space, option for a future Columbia Pike & Weissburg Columbia senior living center, office building and parking structure. Approved by Fairfax County Board of Moncure Ave., Investment Corp., 370 Crossroads Supervisors July 2017. Shelter will move in Oct. 2019, followed by road improvements, final Fairfax County Fairfax County development plan, and construction of multifamily development. As of June 2018, ground has been broken for new shelter, apartments have preliminary plan approval, but no developer is lined up for the apartments. Total Proposed 920 Total Primary Market Area Projects 1,478 Sources: City of Alexandria Planning Dept, Mason Supervisory District Office (Fairfax County), VHDA awards, local developers and publications. Real Property Research Group, May/June 2018.

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Map 7 Pipeline Rental Communities, Parkwood Market Area

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FINDINGS AND CONCLUSIONS

A. Key Findings Based on the preceding review of the subject project and demographic and competitive housing trends in the Parkwood Market Area, RPRG offers the following key findings:

1. Site and Neighborhood Analysis Parkwood Apartments is in an appropriate location for a general occupancy, affordable rental community, with convenient access to services and amenities, employment nodes and public bus transportation.  The subject community is located south of Leesburg Pike in the Falls Church section of unincorporated Fairfax County. Surrounding land uses include other older garden apartments and single family detached homes.  Several public bus routes have stops near the subject community and the site is accessible to many major arterials in this section of northern Virginia, including Leesburg Pike, Columbia Pike, Route 50 and I-395.  Residents of Parkwood Apartments can walk to a public library, elementary school, Rite Aid pharmacy, and other retail and services on Leesburg Pike. Additional services and amenities are within convenient driving distance.  The subject site has been established as a successful location for an affordable rental community. Parkwood Apartments is fully leased with a waiting list of about 220 households.

2. Economic Context Fairfax County has a strong economy with very low unemployment rates and ongoing job expansions.  Fairfax County’s most recent annual average unemployment rate of 3.0 percent is lower than the statewide average of 3.8 percent and the national average of 4.4 percent.  From 2011 to 2016, Fairfax County had net annual job gains in four of six years, with an overall net gain of nearly 13,900 jobs, or more than 80 percent of the jobs lost during the recession.  More than one-third of jobs in the county are in the Professional-Business sector, much higher than the national proportion of 14 percent.  Major employers in Fairfax County include the Department of Defense, defense contractor Booz Allen and Hamilton and financial institutions Fannie Mae and Capital One Bank.

3. Population and Household Trends The Parkwood Market Area had moderate population and household growth between 2000 and 2010. RPRG projects similar household growth in the market area over the next five years, in line with household growth rates for Fairfax County as a whole.  The market area added 4,383 people (6.6 percent growth) and 1,637 households (5.9 percent growth) from the 2000 to 2010 census counts. Fairfax County increased by 11.5 percent for population and households during the decade.  The market area is projected to reach 75,662 people and 31,238 households by 2023. Annual increases in the market area from 2018 to 2023 are projected at 0.6 percent for population (426 people) and 0.6 percent for households (174 households). Fairfax County also is projected to increase in population and households at an annual rate of 0.6 percent over the same period.

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4. Demographic Analysis The demographics of the Parkwood Market Area reflect its high-density suburban location with small household sizes, high renter percentage, and mixed income profile.  The median age of the population in the Parkwood Market Area is 36 years old compared to 38 years in Fairfax County. Thirty-seven percent of the population in the market area is adults age 35 to 61, in line with the countywide proportion of 38 percent.  The most common household type in the market area as of 2010 is a single individual at 37 percent of all households compared to 23 percent of households countywide.  The Parkwood Market Area’s renter percentage decreased from 62.3 percent in 2000 to 59.3 percent. In the last eight years, the renter percentage increased to 62.1 percent, as all net new growth was attributed to renter households. The market area’s renter household base is projected to remain steady at 62.3 percent through 2023, much higher than the countywide proportion of 33.8 percent.  Sixty-three percent of renter households in the Parkwood Market Area had one or two people including 37 percent with one person. Three and four person households comprised 25 percent of renter households in the Parkwood Market Area and 12 percent had five or more people.  The Parkwood Market Area’s estimated 2018 median income of $78,459 is $39,524 or 33.5 percent less than the $117,982 median income in Fairfax County.  The median income by tenure in the Parkwood Market Area as of 2018 was $66,497 among renters compared to $108,482 among owner households. Twenty-three percent of renter households earn less than $35,000, and 13 percent earn between $35,000 and $50,000.

5. Competitive Housing Analysis The multifamily rental communities in the Parkwood Market Area are performing well with low stabilized vacancy rates.  The surveyed communities are performing well with a stabilized vacancy rate of 1.4 percent among 8,559 surveyed units at 24 communities. The stabilized vacancy among Upper Tier properties is 2.3 percent, with one property in lease up. The Lower Tier aggregate vacancy rate is 1.1 percent, and the LIHTC vacancy rate is 0.7 percent. The subject community is fully leased with a waiting list of about 220 households.  The average year built of 2000 among Upper Tier properties and 1961 among Lower Tier properties. The subject community was placed in service in 1949 and is among the oldest properties in the market.  The only property to open since 2009 in this market is e-lofts, a live-work property that is an adaptive reuse of an office building. Since opening in September 2016, e-lofts is leasing up at an average pace of less than nine units per month. We do not believe this slow pace is representative of typical market conditions, given the unique product type and its pricing well above the top of the market.

 Average effective rents among Lower Tier communities are: o Studio rents at $1,337 for 517 square feet or $2.59 per square foot. Grandview is the only LIHTC property to offer studio units, and has a rent of $1,211 for units at 60 percent AMI. o One bedroom rents at $1,413 for 722 square feet or $1.96 per square foot. One- bedroom LIHTC units at 60 percent AMI range from $1,273 to $1,310.

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o Two bedroom rents at $1,655 for 960 square feet or $1.72 per square foot. Two- bedroom LIHTC rents at 60 percent AMI range from $1,520 to $1,569. o Three bedroom rents at $2,054 for 1,190 square feet or $1.73 per square foot. Three- bedroom LIHTC rents at 60 percent AMI range from $1,778 to $1,810.  RPRG identified three communities under construction and one property that is reasonably likely to deliver in the next three years, for a short term pipeline of 558 units. Three additional communities with 920 units are in the long term pipeline.

B. Derivation of Net Demand

1. Methodology RPRG’s Derivation of Demand calculation is intended to gauge whether sufficient demand from renter households would be available in the primary market area to absorb the number of new units proposed for the subject Parkwood Apartments plus those units proposed at other pipeline rental communities that are expected to be brought online over a coming three-year period. The result of this analysis can be either a positive number (which shows the extent to which available demand for rental units would exceed available supply) or a negative number (which shows the extent to which available supply would exceed the number of units needed/demanded over the period in question). The closer the concluded number is to zero, the closer the rental market would be to an effective balance of supply and demand.

The three-year period in question for this analysis is June 2018 through June 2021. We restrict the analysis to a three-year period in part to avoid artificially inflating demand by incorporating demand that would not be created until well after the new units at the subject project are introduced to the market and in part due to the difficulty in accurately predicting the likely supply of competing rental units beyond the three-year period.

RPRG’s Derivation of Demand calculation is a gross analysis, meaning that the calculation balances the demand for new rental housing units of all types (i.e. luxury market-rate, more affordable market- rate, tax credit, rent-subsidized, and age-restricted) versus the upcoming supply of rental housing units of all types. The Derivation of Demand calculation is an incremental or net analysis, in that it focuses on the change in demand over the period in question as opposed to focusing on the market’s total demand. Considerations such as household incomes and the floor plan types and proposed rents for the subject and other pipeline projects are not factored into the Derivation of Demand; rather, we address the interplay of these factors within the Affordability Analysis and Penetration Analysis in the next section of this report.

RPRG sums demand generated from three broad sources in order to arrive at ‘Net Demand for New Rental Units’ over the 2018 to 2021 period:

 Projected Change in the Household Base. Earlier in this report, RPRG presented projections of household change within the primary market area over the 2018 to 2023 period. For this analysis, we factor in three years’ worth of the household change suggested by the annual rate of household growth or decline (2018 to 2019, 2019 to 2020, and 2020 to 2021). Note that net household change incorporates growth or decline stemming from both household migration into and out of the market area and organic changes within existing households (i.e. new household formation as a result of children moving out of their parents’ homes, divorces, roommates beginning to rent separately).

 Units Removed from the Housing Stock. A number of factors contribute to the removal of housing units in a given geographic area. An April 2016 report prepared for the U.S. Department of Housing and Urban Development by Econometrica, Inc. provides quantitative evidence of such

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removal factors.1 Using data collected as part of the national American Housing Survey (AHS) in 2011 and 2013, Econometrica highlighted the portions of the total number of housing units lost attributable to each of the following: units lost through demolition or natural disasters; units badly damaged or condemned (and thus unlivable); units lost due to merger of two or more units into a single unit or the conversion of a single unit into multiple units; units changed from residential to non-residential use; units (primarily mobile homes) moved out from their 2011 location; and units lost in other (unclassified) ways. Econometrica tabulated Components of Inventory Change (CINCH) data based on a range of unit characteristics such as occupancy (occupied, vacant, or seasonal); region (Northeast, Midwest, South, or West); tenure (owner- or renter-occupied); metro status (units located in central cities, suburban areas, or outside of metro areas); and year built.

 Competitive Multifamily Vacancy Rates. The final source of demand that factors into RPRG’s calculation of net demand for new rental units is the observed vacancy rate in the primary market area’s competitive rental market. RPRG assumes that a 5.0 percent vacancy rate – a typical underwriting standard – is required to keep a rental market relatively elastic. Elasticity in this context means that an adequate number of quality housing units are vacant and available at any given time so that households seeking rental units can be accommodated and can have some choice among units. When the market vacancy rate is below 5.0 percent, additional units are needed to ensure an adequate number of available units from which to choose. When the market vacancy rate is above 5.0 percent, the market has the capacity to absorb some additional demand, whereby that amount of demand would not need to be met through the development of new units. In considering competitive vacancy rates, we focus on multifamily units in part because the scattered market in single-family homes, condominiums, and other properties is extremely fluid and cannot be relied upon to consistently serve renter households, since the inventory can convert to homeownership very quickly.

2. Net Demand Calculation Table 34 applies the discussion of sources of demand for new rental units to the Parkwood Market Area. The steps in our Derivation of Demand analysis for the three-year period between June 2018 and June 2021 are as follows:  Based on Esri trends, RPRG estimates that there are 30,440 households in the Parkwood Market Area as of June 2018, a number that is projected to increase to 30,963 by June 2021. The Parkwood Market Area is expected to add approximately 523 net households during the three- year period.  Using national statistical observations from 2011-2013 CINCH data, Econometrica determined that the average annual loss of occupied housing units in the United States (for all reasons other than the moving of homes, particularly mobile homes) was 0.27 percent of the total occupied stock. We determined the size of the housing stock in the primary market area for 2018, 2019, and 2020 by applying the ratio of occupied to total housing units from the 2010 Census to RPRG’s projected household totals. Applying the average 0.27 percent removal rate over the three years in question, we estimate that 267 units are likely to be lost.  Summing the net household increases from the number of units removed from the market, we calculate the net new demand for housing units of all types over the three-year period to be 789 units.

1 American Housing Survey, Components of Inventory Change 2011-2013; Prepared by Econometrica, Inc. for the U.S. Department of Housing & Urban Development’s Office of Policy Development & Research; April 2016.

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Table 34 Derivation of Net Demand, Parkwood Market Area

Demand Projected Change in Household Base Units June 2018 Households 30,440 June 2021 Households 30,963 Net Change in Households 523 Housing Removal Units Add: Units Removed from Housing Stock Stock Rate Removed 2018 Housing Stock 32,701 0.27% 88 2019 Housing Stock 32,922 0.27% 89 2020 Housing Stock 33,144 0.27% 89 Total Units Removed from Housing Stock 267

New Housing Demand 789 Average Percent Renter Households over Analysis Period 64.3% New Rental Housing Demand 507

Add: Multifamily Competitive Vacancy Inventory Vacant

Stabilized Multifamily Communities 8,559 122

Communities Under Lease Up 200 18 Total Competitive Inventory 8,759 140

Market Vacancy at 5% 438 Less: Current Vacant Units -140 Vacant Units Required to Reach 5% Market Vacancy 298

Total Demand for New Rental Units 805

Planned Additions to the Supply Total Units 95% Occupancy St. James Plaza (LIHTC) 93 88 AHDC Gateway (LIHTC) 74 70 Array West Alex (market rate) 278 264 The Spire (LIHTC) 113 107 Parkwood Apartments - new units 4 4

Total New Rental Supply 562 534

Excess Demand for Rental Housing 271 Source: RPRG, Inc.  The proportion of renter-occupied housing units in the Parkwood Market Area decreased from 62.3 percent in 2000 to 59.3 percent in 2010. In the last eight years, however, the renter percentage increased to 62.1 percent, with all net household growth attributed to renter households. Esri projects that between 2018 and 2023, 66.4 percent of net new households in the market area will be renters. We averaged this net new household rentership rate for the next five years of 66.4 percent with Esri’s projected market rentership rate of 62.2 percent to get 64.3 percent; applying this percentage to housing demand, we arrive at 507 units of new rental housing demand.

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 RPRG’s survey of the stabilized general occupancy rental communities in the primary market area consisted of 8,559 units, including the 221 existing units at the subject. Of these, 122 are currently vacant, yielding a 1.4 percent vacancy rate. In addition, e-lofts is in lease up, with 18 vacant units among 200 total units.  Typically, it is assumed that a 5.0 percent vacancy rate is required to keep a rental market relatively fluid. There must be some number of quality units vacant and available at any given time so that households seeking rental units can be accommodated and can have some choice among units. Given the total competitive inventory of 8,759 units, 438 vacancies would be required to arrive at a 5.0 percent vacancy rate. Subtracting the 140 vacant units in the market from this number reveals demand for 298 units to reach a 5.0 percent vacancy rate. Thus, we add 298 units to demand.  Summing demand from household change, projected unit removals, and the vacancy rate in the existing market, there would be total demand for 805 new rental units in the primary market area over the next three years.  Net demand for new rental units must be balanced against new rental stock likely to be added to the market area’s inventory over this period. In addition to the four new units that will be added to existing residential buildings at the subject property, four projects with a combined 558 rental units are reasonably likely to deliver in the next three years. After adjusting for 95 percent occupancy, all near term pipeline projects will add 534 rental units to the existing supply.  Upon subtracting the expected additions to the supply (534 units) from net demand for new rental units (805 units), we arrive at an excess demand for 271 rental units in the Parkwood Market Area Market Area between 2018 and 2021.

3. Conclusions on Net Demand These calculations suggest sufficient demand to introduce the four new units at the subject community, four near term pipeline communities, and approximately 271 additional rental units to the market area over the three-year period. We note that the subject project is the rehabilitation of an existing, occupied 221-unit property, and no resident displacement is anticipated. Only four new units will be added to the supply at the subject, as these units will be added to existing dead space on the ground floor of three buildings on the property.

C. Effective Demand – Affordability/Capture & Penetration Analyses

1. Methodology Following our estimate of the depth of demand for net new rental units in the primary market area, we next test whether sufficient income-qualified households would be available to support the specific units at the subject property and properties in the same broad segment of the rental market in terms of pricing. This analysis is conducted independently of the Net Demand Analysis as units at the subject property are likely to be filled by a combination of new households (either moving to or created in the market area) and existing households moving within the market area. The total demand – comprised of the net or incremental demand and the demand from existing households – is the relevant frame of reference for the analysis.

The Affordability/Capture Analysis tests the percentage of income-qualified households in the primary market area that the subject community must capture to achieve full occupancy. The Penetration Analysis tests the percentage of income-qualified households in the market area that the subject community and comparable competitive communities combined must capture to achieve full occupancy. The combination of the Net Demand, Affordability/Capture, and Penetration Analyses determines if the primary market area can support additional rental units and if sufficient households exist in the targeted income range to support the proposed units.

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The first component of the Effective Demand analysis involves looking at total income and renter income among Parkwood Market Area households for the target year. The Developer projects that the newly renovated units at Parkwood Apartments will be available by December 2019 and as such, 2019 is used as the target year for these analyses. RPRG calculated 2019 income distributions for total households and renter households based on RPRG household projections, income estimates from the 2012-2016 ACS, and income projections from Esri (Table 35).

Table 35 2019 Total and Renter Income Distribution, Parkwood Market Area

Parkwood Market Renter Total Households Area Households 2019 Income # % # % less than $15,000 1,976 6.5% 1,517 8.0% $15,000 $24,999 1,904 6.2% 1,462 7.7% $25,000 $34,999 1,926 6.3% 1,372 7.2% $35,000 $49,999 3,134 10.3% 2,348 12.4% $50,000 $74,999 5,375 17.6% 3,953 20.8% $75,000 $99,999 4,329 14.2% 2,762 14.5% $100,000 $149,999 5,935 19.4% 3,585 18.9% $150,000 Over 5,962 19.5% 1,988 10.5% Total 30,541 100% 18,987 100%

Median Income $80,514 $67,675 Source: American Community Survey 2012-2016 Projections, RPRG, Inc. A particular housing unit is typically said to be affordable to households that would be expending a certain percentage of their annual income or less on the expenses related to living in that unit. In the case of rental units, these expenses are generally of two types – monthly contract rents paid to property owners and payment of utility bills for which the tenant is responsible. The sum of the contract rent and utility bills is referred to as a household’s ‘gross rent burden’. For the Affordability/Capture and Penetration Analyses, RPRG employs a 35 percent gross rent burden. The 35 percent rent burden is the rent burden mandated by VHDA for use in evaluating proposed general occupancy communities.

2. Affordability Analysis The steps in our Affordability Analysis for Parkwood Apartments at the proposed rents are as follows (Table 36).  The overall shelter cost (gross rent) for a two-bedroom unit at Parkwood Apartments – the most numerous unit type at the subject – would be $1,582 per month ($1,523 rent plus a $59 utility allowance).  By applying a 35 percent rent burden to this gross rent, we determined that the two-bedroom unit would be affordable to households earning at least $54,240 per year. The projected number of primary market area households earning at least $54,240 in 2019 is 20,689.  A household occupying a two-bedroom unit and earning 60 percent of AMI would have an income of up to $63,300. According to the interpolated income distribution for 2019, there would be 18,741 households in the primary market area with incomes exceeding the upper income bound.

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Table 36 2019 Affordability Analysis for Parkwood Apartments 60% Units One Bedroom Units Two Bedroom Units No Data No Data

Min. Max. Min. Max. Min. Max. Min. Max. Number of Units 49 176 0 0 Net Rent $1,274 $1,523 -- -- Gross Rent $1,319 $1,582 -- -- % Income for Shelter 35% 35% 35% 35% Income Range (Min, Max) $45,223 $52,770 $54,240 $63,300 na na na na Total Households Range of Qualified Hhlds 22,599 21,005 20,689 18,741 0 0 0 0 # Qualified Households 1,594 1,948 0 0 Total HH Capture Rate 3.1% 9.0% 0 0

Renter Households Range of Qualified Hhlds 13,036 11,851 11,618 10,186 0 0 0 0 # Qualified Hhlds 1,186 1,433 0 0 Renter HH Capture Rate 4.1% 12.3% na na

Renter Households = 18,987 Income All Households = 30,541 # Units # Qualified # Qualified Capture Target Band of Qualified Hhlds Capture Rate Band of Qualified Hhlds HHs HHs Rate Income $45,223 $63,300$45,223 $63,300 Total Units 225 Households 22,599 18,741 3,858 5.8% 13,036 10,186 2,851 7.9% Source: Income Projections, RPRG, Inc.

 Subtracting the 18,741 households with incomes above the 60 percent maximum income limit from the 20,689 households that could afford to rent this unit, we calculate that 1,948 households in the primary market area as of 2019 would be in the band of affordability for the subject’s two- bedroom units. Parkwood Apartments would need to capture 9.0 percent of these income- qualified households to absorb all 176 of the two-bedroom units.  We next tested the range of qualified households that are projected to be renters in 2019. Approximately 1,433 of the market area renter households would be income-qualified for the subject’s two-bedroom units. To absorb 176 two-bedroom units with the proposed rents targeting households earning up to 60 percent of AMI, Parkwood Apartments would need to capture 12.3 percent of income-qualified renter households as of 2019.  Following the same methodology, we tested the affordability of the one-bedroom units. The capture rates for these units are 3.1 percent of all households and 4.1 percent of renter households.  The 225-unit project as a whole would need to capture 5.8 percent of income-qualified households and 7.9 percent of income-qualified renter households.

3. Penetration Analysis To provide further insight into the market dynamics, we have also conducted a Penetration Analysis (Table 37). The Penetration Analysis evaluates the capacity of the market area to serve the entire inventory of directly competitive rental units. Our analysis utilizes the same target date of 2019; and the same 35 percent rent burden.

The steps in our Penetration Analysis for Parkwood Apartments follow:

 The stock of existing rental units that would be closely competitive with the subject’s units consists of a total of 467 one- and two-bedroom units at 60 percent AMI at three existing LIHTC communities. We also include the one- and two-bedroom units at 60 percent AMI at the three LIHTC properties that are expected to deliver in the near term, and the 225 units at the subject

Page 59 Parkwood Apartments | Findings and Conclusions

(221 existing units and four new construction units). The total directly competitive supply is 807 units.  The minimum income range is calculated using the lowest one-bedroom net rent at 60 percent AMI among this group of properties ($1,273 at Hollybrook II and III). The maximum income is $63,300 for a two-bedroom unit at 60 percent AMI.  As of 2019, an estimated 2,856 renter households in the primary market area will be in the band of affordability for the relevant units. The existing and planned supply would need to capture 28.3 percent of these renter households to reach full occupancy.

Table 37 Penetration Analysis for Parkwood Apartments

Competitive Communities Competitive Communities Units Planned Communities Units Carousel Court 90 St. James Plaza 36 Grandview 240 AHDC Gateway 29 Holleybrook II and III 137 The Spire 50 Subtotal 467 Subtotal 115

Subject Property Units Grand Total of Competitive Supply 807 Existing and New Units 225

Subtotal 225

Minimum Income Maximum Income 60% Units One Bedroom Unit Two Bedroom Unit Net Rent $1,273 Gross Rent $1,318 % Income for Shelter 35% Income Range (Min, Max) $45,189 $63,300 Qualified Renter HHs 13,042 10,186

All Renter Households = 18,987 Band of Qualified Households Qualified HHs Penetration Rate Income $45,189 $63,300 Households 13,042 10,186 2,856 28.3% Source: 2010 U.S. Census,Esri, Estimates, RPRG, Inc.

4. Conclusions on Affordability and Penetration RPRG judges that the project-wide renter capture rate of 7.9 percent is reasonable and would be readily achievable. The capture rate demonstrates a sufficient base of income-qualified renter households in the market area at the subject’s proposed rents. We further note that the subject is an existing, occupied property that will be renovated with no permanent resident displacement, and no rent increases upon completion of renovations. Only four new units will be added to the property as part of the rehabilitation.

The penetration rate of 28.3 percent is low and indicates room in the market for additional LIHTC units at 60 percent AMI. The low rate demonstrates the great need for affordable housing in the market especially considering that three new construction LIHTC properties are entering the market in the near term, and the penetration rate for 60 percent units remains below 30 percent.

Page 60 Parkwood Apartments | Findings and Conclusions

D. VHDA Demand Methodology

1. VHDA Demand Analysis The Virginia Housing Development Authority (VHDA) mandates a particular demand methodology in evaluating applications for financing. VHDA opts for a need-driven demand methodology which factors the topics of cost-burdened renters and substandard rental housing into the demand equation. In this section, RPRG calculates demand according to the VHDA methodology for Parkwood Apartments. VHDA’s demand methodology for general occupancy projects such as the subject accounts for as many as four primary components of potential need/demand:

 Household Growth or Decline. The household trend required by VHDA is the net increase or decrease in the number of income-qualified renter households in the primary market area between a base year of 2017 and a target year of 2020.  Cost Burdened Renters. VHDA’s second component of demand is cost burdened renters, a designation which is typically defined as those renter households paying more than 35 percent of household income for housing costs. To be conservative, RPRG uses the 2012-2016 ACS data on cost-burdened renter households to estimate the percentage and number of income-qualified renters for the subject project that will be cost-burdened as of 2018 as defined by spending 40 percent of income on rent, or 37.0 percent of renters (see Table 19).

 Renter Households in Substandard Housing. VHDA’s third component of demand accounts for income-qualified renter households living in substandard units, defined as overcrowded units (having 1.01 or more persons per room) and/or units lacking complete plumbing facilities. According to the 2012-2016 ACS, the percentage of renter households in the primary market area that lived in substandard conditions was 12.0 percent (see Table 19).

 Existing Tenants Likely to Remain. For projects that constitute the renovation of an existing property with current tenants, VHDA requests that analysts consider the percentage of current tenants that are likely to remain following the proposed renovation. Parkwood Apartments currently has 220 occupied units, with one unit offline in anticipation of the renovation. No permanent displacement is anticipated, so we calculate 220 existing qualified tenant households who will remain at the property. Table 38 outlines the detailed VHDA demand calculations for Parkwood Apartments that stem from the four relevant demand components. Total demand available for the 225-unit project (221 existing units and four new construction units) is expected to include 33 net new renter households, 1,048 cost-burdened households, 339 households currently residing in substandard housing, and 220 existing qualified tenant households who will remain at the property on completion of renovations. The calculation thus yields a total demand for 1,640 additional units of rental housing serving the targeted income bands.

Page 61 Parkwood Apartments | Findings and Conclusions

Table 38 VHDA Demand by Overall Income Targeting

Income Target 60% Units Minimum Income Limit $45,223 Maximum Income Limit $63,300 (A) Renter Income Qualification Percentage 15.0% Demand from New Renter Households - Calculation (C-B)*F*A 33 + Demand from Rent Overburdened HHs - Calculation: B*E*F*A 1,048 + Demand from Substandard Housing - Calculation B*D*F*A 339 + Existing Qualified Tenants to Remain 220 Total Income Qualified Renter Demand 1,640 Less: Comparable Vacant Units 5 Less: Comparable Pipeline Units 115 Net Demand 1,520 Subject Proposed Units 225 Capture Rate 14.8%

Estimated Absorption Period 2 months

Comparable units that are presently available or that would likely be available constitute supply that must be subtracted from total VHDA demand to arrive at VHDA net demand. Based on our May/June 2018 competitive survey, only five units were vacant and available at directly comparable properties (LIHTC units at 60 percent AMI). The near term comparable pipeline consists of 115 units at three projects. Subtracting the vacant existing and pipeline units, VHDA net demand totals 1,520 units.

Given net demand for 1,520 units, the 225-unit Parkwood Apartments would need to capture 14.8 percent of income-qualified renter households per VHDA’s demand methodology.

As the subject community is a rehabilitation of an existing, occupied property, we also conduct a sensitivity analysis.

2. Conclusions on VHDA Demand RPRG considers the capture rate for Parkwood Apartments to be reasonable and achievable. The rate suggests a large number of income-qualified households for LIHTC units at 60 percent AMI in the subject’s market area.

E. Target Markets The subject community has 221 units. As part of the rehabilitation, four units will be added to dead space on the first floor of three existing residential buildings. The resulting unit mix will be 49 one- bedroom units (22 percent) and 176 two-bedroom units (78 percent). All units will be LIHTC units at 60 percent AMI, and will serve households earning between $45,000 and $63,000. As such, the community will serve as workforce housing for moderate income families. With small unit sizes and one- and two-bedroom units, the community will be comprised of small households of one or two persons. The two-bedroom units will serve unmarried and married couples, and small families, such as a single parent with one child.

F. Product Evaluation Considered in the context of the competitive environment and proposed scope of renovations, the relative position of Parkwood Apartments is as follows:

Page 62 Parkwood Apartments | Findings and Conclusions

 Site: The subject site is an appropriate location for general occupancy, affordable rental housing. Several services and amenities are in walking distance, and large concentrations of retail are within a short driving distance. The community is in the job-rich Fairfax County, and offers access to public bus transportation.  Unit Distribution: With the addition of four units, the resulting unit mix at the subject community is 49 one-bedroom units (22 percent) and 176 two-bedroom units (78 percent). The average unit distribution of Lower Tier communities in the market area is 40 percent one- bedroom units, 52 percent two-bedroom units, three percent three-bedroom units and five percent efficiencies. The subject’s unit mix is reasonable and will serve small households of one or two households, particularly given the small unit sizes. The predominance of two- bedroom units allows the subject to serve couples and small families. This unit mix has proven to be marketable as the community is fully leased and with a long waiting list.  Unit Size: The average unit sizes at Parkwood Apartments are 610 square feet for one bedroom units and 750 square feet for two bedroom units. These are among the smallest units in the market and are below the average Lower Tier unit sizes of 722 square feet for one-bedroom units and 960 square feet for two-bedroom units. The small units are a result of the age of the property (placed in service in 1949). The small sizes are reasonable given that the subject provides an affordable housing option at the low end of the rent range. Furthermore, the unit sizes are similar to those of the most competitive, affordable product in the market, and the property maintains full occupancy and long waiting lists despite the small sizes.  Unit Features: The subject’s units have central air conditioning, dishwashers, and garbage disposals. As part of the rehabilitation, new luxury vinyl tile will be installed in kitchens, bathrooms, and entryways. All units will have new black appliances including refrigerators/freezers, dishwashers and ranges. In addition, new cabinets, countertops and plumbing fixtures will be installed. The new counters will be cultured granite. This will increase the marketability of the community and will place it at an advantage with respect to the other older Lower Tier properties in the market.  Community Amenities: The subject community has three laundry rooms, two playgrounds and a community room. As part of the renovations, the community room will be updated and possibly relocated, and will have a computer center. This amenity package is appropriate for an affordable rental community and will be competitive in the market.

G. Price Position In Figure 11, the proposed rents and unit sizes at Parkwood Apartments are compared with those of existing Lower Tier units in the market area, which are most comparable. For both unit types, the subject’s units are positioned at the low end of the market both in price and size, making it one of the more affordable units in a high priced market. The proposed pricing is appropriate and very competitive. Among each bedroom size:  One bedroom units –The subject’s units are among the smallest in the market. The pricing is at the lower end of the market. The units are priced in line with the other LIHTC units at 60 percent AMI in the market.  Two bedroom units – The positioning is the same as that of the one-bedroom units. The subject’s units are among the smallest in the market. The pricing is at the lower end of the market. The units are priced in line with the other LIHTC units at 60 percent AMI in the market.

Page 63 Parkwood Apartments | Findings and Conclusions

Figure 11 Price Position of Parkwood Apartments

H. Absorption Estimate The only property to open since 2009 in this market is e-lofts, a live-work property that is an adaptive reuse of an office building. Since opening in September 2016, e-lofts is leasing up at an average pace

Page 64 Parkwood Apartments | Findings and Conclusions

of less than nine units per month. We do not believe this slow pace is representative of typical market conditions, given the unique product type and its pricing well above the top of the market. The subject is an existing, occupied property, and the rehabilitation will not result in any permanent displacement of existing residents. As part of the scope of work, four units will be added to the community. Given that the current waiting list for the community is 220 households, and the renovation will increase the marketability of the subject, we expect a very short absorption period. The four new units and any additional vacant units could be leased within two months of the completion of renovations.

I. Impact on Existing Market Given the ongoing household growth projected for the Parkwood Market Area, strong economic conditions, and low vacancy rates especially at LIHTC properties, we do not believe the rehabilitation of Parkwood Apartments will negatively impact the existing communities in the Parkwood Market Area in the near or long term. The proposed renovations will increase the useful life of the property, and will bring improvements to a community that provides a much needed affordable housing option for moderate income families in an area with high housing costs.

We hope you find this analysis helpful in your decision making process.

______Kara Olsen Salazar Robert M. Lefenfeld Senior Analyst Founding Principal

Page 65 Parkwood Apartments | Appendix 1 Underlying Assumptions and Limiting Conditions

APPENDIX 1 UNDERLYING ASSUMPTIONS AND LIMITING CONDITIONS

In conducting the analysis, we will make the following assumptions, except as otherwise noted in our report:

1. There are no zoning, building, safety, environmental or other federal, state or local laws, regulations or codes which would prohibit or impair the development, marketing or operation of the subject project in the manner contemplated in our report, and the subject project will be developed, marketed, and operated in compliance with all applicable laws, regulations and codes.

2. No material changes will occur in (a) any federal, state or local law, regulation or code (including, without limitation, the Internal Revenue Code) affecting the subject project, or (b) any federal, state or local grant, financing or other program which is to be utilized in connection with the subject project.

3. The local, national, and international economies will not deteriorate, and there will be no significant changes in interest rates or in rates of inflation or deflation.

4. The subject project will be served by adequate transportation, utilities, and governmental facilities.

5. The subject project will not be subjected to any war, energy crisis, embargo, strike, earthquake, flood, fire or other casualty or act of God.

6. The subject project will be on the market at the time and with the product anticipated in our report, and at the price position specified in our report.

7. The subject project will be developed, marketed, and operated in a highly professional manner.

8. No projects will be developed which will be in competition with the subject project, except as set forth in our report.

9. There are neither existing judgments nor any pending or threatened litigation, which could hinder the development, marketing, or operation of the subject project.

Page 66 Parkwood Apartments | Appendix 1 Underlying Assumptions and Limiting Conditions

The analysis will be subject to the following limiting conditions, except as otherwise noted in our report:

1. The analysis contained in this report necessarily incorporates numerous estimates and assumptions with respect to property performance, general and local business and economic conditions, the absence of material changes in the competitive environment and other matters. Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis will vary from our estimates and the variations may be material.

2. Our absorption estimates are based on the assumption that the product recommendations set forth in our report will be followed without material deviation.

3. All estimates of future dollar amounts are based on the current value of the dollar, without any allowance for inflation or deflation.

4. We have no responsibility for considerations requiring expertise in other fields. Such considerations include, but are not limited to, legal matters, environmental matters, architectural matters, geologic considerations, such as soils and seismic stability, and civil, mechanical, electrical, structural, and other engineering matters.

5. Information, estimates and opinions contained in or referred to in our report, which we have obtained from sources outside of this office, are assumed to be reliable and have not been independently verified.

6. The conclusions and recommendations in our report are subject to these Underlying Assumptions and Limiting Conditions and to any additional assumptions or conditions set forth in the body of our report.

Page 67 Parkwood Apartments | Appendix 2 NCHMA Checklist

APPENDIX 2 NCHMA CHECKLIST

Introduction: The National Council of Housing Market Analysts provides a checklist referencing all components of their market study. This checklist is intended to assist readers on the location and content of issues relevant to the evaluation and analysis of market studies. The page number of each component referenced is noted in the right column. In cases where the item is not relevant, the author has indicated "N/A" or not applicable. Where a conflict with or variation from client standards or client requirements exists, the author has indicated a "V" (variation) with a comment explaining the conflict. More detailed notations or explanations are also acceptable.

Component (*First occurring page is noted) *Page(s) Executive Summary 1. Executive Summary VI Project Summary 2. Project description with exact number of bedrooms and baths 5 proposed, income limitation, proposed rents, and utility allowances 3. Utilities (and utility sources) included in rent 5 4. Project design description 5 5. Unit and project amenities; parking 5 6. Public programs included 5 7. Target population description 5 8. Date of construction/preliminary completion 7 9. If rehabilitation, existing unit breakdown and rents 3 10. Reference to review/status of project plans N/A Location and Market Area 11. Market area/secondary market area description 26 12. Concise description of the site and adjacent parcels 8 13. Description of site characteristics 8 14. Site photos/maps 9 15. Map of community services 15 16. Visibility and accessibility evaluation 12 17. Crime information 13 Employment and Economy 18. Employment by industry 21 19. Historical unemployment rate 18 20. Area major employers 23 21. Five-year employment growth 20 22. Typical wages by occupation 22

Page 68 Parkwood Apartments | Appendix 2 NCHMA Checklist

23. Discussion of commuting patterns of area workers 19 Demographic Characteristics 24. Population and household estimates and projections 28 25. Area building permits 29 26. Distribution of income 32 27. Households by tenure 32 Competitive Environment 28. Comparable property profiles 73 29. Map of comparable properties 37 30. Comparable property photos 73 31. Existing rental housing evaluation 35 32. Comparable property discussion 43 33. Area vacancy rates, including rates for tax credit and government- 39 subsidized communities 34. Comparison of subject property to comparable properties 45 35. Availability of Housing Choice Vouchers N/A 36. Identification of waiting lists 39 37. Description of overall rental market including share of market-rate 36 and affordable properties 38. List of existing LIHTC properties 36 39. Discussion of future changes in housing stock 49 40. Discussion of availability and cost of other affordable housing 35 options, including homeownership 41. Tax credit and other planned or under construction rental 49 communities in market area Analysis/Conclusions 42. Calculation and analysis of Capture Rate 58 43. Calculation and analysis of Penetration Rate 59 44. Evaluation of proposed rent levels 63 45. Derivation of Achievable Market Rent and Market Advantage 45 46. Derivation of Achievable Restricted Rent 49 47. Precise statement of key conclusions 62 48. Market strengths and weaknesses impacting project 62 49. Recommendation and/or modification to project description 62, if applicable 50. Discussion of subject property’s impact on existing housing 65 51. Absorption projection with issues impacting performance 64 52. Discussion of risks or other mitigating circumstances impacting 64, if applicable project 53. Interviews with area housing stakeholders 49 Certifications

Page 69 Parkwood Apartments | Appendix 2 NCHMA Checklist

54. Preparation date of report Cover 55. Date of field work Cover 56. Certifications 72 57. Statement of qualifications 71 58. Sources of data not otherwise identified N/A 59. Utility allowance schedule N/A

Page 70 Parkwood Apartments | Appendix 3 Analyst resumes

APPENDIX 3 ANALYST RESUMES

Page 71 ROBERT M. LEFENFELD Founding Principal

Mr. Lefenfeld, Founding Principal of the firm, has over 30 years of experience in the field of residential market research. Before founding Real Property Research Group in 2001, Bob served as an officer of research subsidiaries of Reznick Fedder & Silverman and Legg Mason. Between 1998 and 2001, Bob was Managing Director of RF&S Realty Advisors, conducting residential market studies throughout the United States. From 1987 to 1995, Bob served as Senior Vice President of Legg Mason Realty Group, managing the firm’s consulting practice and serving as publisher of a Mid-Atlantic residential data service, Housing Market Profiles. Prior to joining Legg Mason, Bob spent ten years with the Baltimore Metropolitan Council as a housing economist. Bob also served as Research Director for Regency Homes between 1995 and 1998, analyzing markets throughout the Eastern United States and evaluating the company’s active building operation.

Bob provides input and guidance for the completion of the firm’s research and analysis products. He combines extensive experience in the real estate industry with capabilities in database development and information management. Over the years, he has developed a series of information products and proprietary databases serving real estate professionals. Bob has lectured and written extensively about residential real estate market analysis. Bob has created and teaches the market study module for the MBA HUD Underwriting course and has served as an adjunct professor for the Graduate Programs in Real Estate Development, School of Architecture, Planning and Preservation, University of Maryland College Park. He is the past National Chair of the National Council of Housing Market Analysts (NCHMA) and currently chairs its FHA Committee.

Areas of Concentration:  Strategic Assessments: Mr. Lefenfeld has conducted numerous corridor analyses throughout the United States to assist building and real estate companies in evaluating development opportunities. Such analyses document demographic, economic, competitive, and proposed development activity by submarket and discuss opportunities for development.  Feasibility Analysis: Mr. Lefenfeld has conducted feasibility studies for various types of residential developments for builders and developers. Subjects for these analyses have included for-sale single-family and townhouse developments, age-restricted rental and for- sale developments, large multi-product PUDs, urban renovations and continuing care facilities for the elderly.  Information Products: Bob has developed a series of proprietary databases to assist clients in monitoring growth trends. Subjects of these databases have included for sale housing, pipeline information, and rental communities.

Education: Master of Urban and Regional Planning; The George Washington University. Bachelor of Arts - Political Science; Northeastern University. KARA OLSEN SALAZAR Senior Analyst

Kara Olsen Salazar entered the field of market research in 2005 as a Research Associate at RPRG, gathering economic, demographic, and competitive data for market feasibility analyses. Kara’s background is in affordable housing advocacy and community development, specifically in the Latino community. This included service as an AmeriCorps volunteer in Chicago, where she worked on affordable housing, economic development and employment organizing.

Promoted to Market Analyst in 2008 and Senior Analyst in 2015, Kara has completed more than 230 housing market studies. In addition to the areas of concentration listed below, she conducts market studies for student housing, for sale housing, and adaptive reuse projects.

Areas of Concentration:

• FHA Section 221(d)(4): Kara prepares comprehensive feasibility studies for submission to HUD regional offices as part of a lender’s application for Section 221(d)(4) mortgage insurance.

• Low Income Housing Tax Credit: Kara prepares rental market studies for submission to lenders and state agencies for nine percent and four percent Low Income Housing Tax Credit allocations. While most of these studies are for new construction product, several examine the feasibility of renovating existing family and senior rental communities. Kara is active throughout the DC/Maryland region and has completed multiple studies in Michigan, North Carolina and Louisiana.

• Market Assessments: Kara has completed city and countywide assessments for city, county and state agencies to assist in strategic planning and the allocation of housing resources. This work has been conducted in several counties in Maryland as well as in El Paso, Texas.

• Market and Product Advisory Analysis: Kara provides detailed analysis of existing markets, product and pricing recommendations, and targeted marketing suggestions for developers and land owners in the preliminary stages of development.

• Mixed-Use and Mixed-Income Development: Kara has studied mixed-use projects with integrated uses such as market-rate and affordable rental housing, for-sale housing, senior-oriented shelter options, and retail space. Examples of typical mixed-use and mixed-income projects reviewed include market-rate rental communities with ground- floor retail space and public housing redevelopment projects.

Education:

Master of Community Planning; University of Maryland College Park

Bachelor of Arts – Political Science; Wheaton College, Wheaton, Illinois

Parkwood Apartments | Appendix 4 VHDA Certification

APPENDIX 4 VHDA CERTIFICATION

I affirm the following:

1.) I have made a physical inspection of the site and market area. 2.) The appropriate information has been used in the comprehensive evaluation of the need and demand for proposed rental units. 3.) To the best of my knowledge, the market can support the demand shown in this study. I understand that any misrepresentation in this statement may result in the denial of participation in the Low Income Housing Tax Credit Program in Virginia as administered by VHDA. 4.) Neither I nor anyone at my firm has any interest in the proposed development or a relationship with the ownership entity. 5.) Neither I nor anyone at my firm nor anyone acting on behalf of my firm in connection with the preparation of this report has communicated to others that my firm is representing VHDA or in any way acting for, at the request of, or on behalf of VHDA. 6.) Compensation for my services is not contingent upon this development receiving a LIHTC reservation or allocation.

______6/11/18______Kara Olsen Salazar Date Market Analyst

Page 72 Parkwood Apartments | Appendix 5 Rental Community Profiles

APPENDIX 5 RENTAL COMMUNITY PROFILES

Page 73 RealProperty Research Group Avana Alexandria Multifamily Community Profile 3001 Park Center Dr. CommunityType: Market Rate - General Alexandria,VA 22302 Structure Type: 16-Story High Rise 326 Units 3.7% Vacant (12 units vacant) as of 6/4/2018 Last Major Rehab in 2009 Opened in 1989

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,881 700 $2.69 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two -- $2,123 1,184 $1.79 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three 0.3% $2,806 1,500 $1.87 Sauna: ComputerCtr: Four+ 0.3% $3,289 3,000 $1.10 Playground: Features Standard: Dishwasher; Disposal; Microwave; In Unit Laundry (Full Size); Central A/C; Carpet / Vinyl/Linoleum

Select Units: HighCeilings

Optional($): --

Security: Keyed Bldg Entry

Parking 1: Free Surface Parking Parking 2: Fee for Reserved Fee: -- Fee: $50

Property Manager: Greystar Owner: --

Comments Gourmet kitch w/breakfast bars, bay windows, oversized layouts. Select units have walk-in closets, SS appliances, Quartz CT & wood-plank flooring. Resident lounge w/wet bar & full kitchen, outdoor patio w/grills, garden, jogging/ walking trails, dog park, cabana, game room. Trash $10. Admin fee $400. Rents from website.

Floorplans (Published Rents as of 6/4/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Executive / High Rise - El -- 1 1 -- $1,827 550 $3.32 Market 6/4/18 3.7% $1,881 $2,123 $2,806 Executive-renovated / Hig -- 1 1 -- $1,708 550 $3.11 Market Premier / High Rise - Elev -- 1 1 -- $1,755 850 $2.06 Market Premier-renovated / High -- 1 1 -- $2,135 850 $2.51 Market Deluxe / High Rise - Elev -- 2 2 -- $1,713 1,027 $1.67 Market Deluxe-renovated / High -- 2 2 -- $2,107 1,027 $2.05 Market Suite / High Rise - Elevat -- 2 2 -- $2,207 1,134 $1.95 Market Suite-renovated / High Ri -- 2 2 -- $2,160 1,134 $1.90 Market Choice / High Rise - Elev -- 2 1 -- $1,937 1,186 $1.63 Market Adjustments to Rent Choice-renovated / High -- 2 1 -- $2,112 1,186 $1.78 Market Incentives: Waived app fee Preferred / High Rise - El -- 2 2 -- $1,996 1,196 $1.67 Market Preferred-renovated / Hig -- 2 2 -- $2,140 1,196 $1.79 Market Utilities in Rent: Heat Fuel: Electric Select-renovated / High R -- 2 2 -- $2,285 1,378 $1.66 Market Heat: Cooking: Wtr/Swr: Select / High Rise - Eleva -- 2 2 -- $2,277 1,378 $1.65 Market Hot Water: Electricity: Trash: Penthouse / High Rise - E -- 3 2 1 $2,771 1,500 $1.85 Market Penthouse Select / High -- 4 2 1 $3,249 3,000 $1.08 Market Avana Alexandria VA059-028380 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Bailey's Crossing Multifamily Community Profile 3602 S 14th Street CommunityType: Market Rate - General Alexandria,VA 22302 Structure Type: Mid Rise 414 Units 4.1% Vacant (17 units vacant) as of 5/31/2018 Opened in 2009

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One 55.8% $1,831 874 $2.09 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two 38.9% $2,481 1,349 $1.84 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three 1.7% $3,146 1,521 $2.07 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Microwave; Ceiling Fan; In Unit Laundry (Full Size); HighCeilings; Carpet / Ceramic

Select Units: Fireplace; Patio/Balcony

Optional($): --

Security: --

Parking 1: Attached Garage Parking 2: -- Fee: $75 Fee: --

Property Manager: Greystar Owner: --

Comments Shuttle to metro. Trash $5. Waived $499 admin fee. Granite, Stainless kitchen; upscale features in select units. Picnic/BBQ, Game Room, Yoga Room, pool/spa. Vacancies: 9-1BRs; 6-2BRs; 2-3BRs.

Floorplans (Published Rents as of 5/31/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Loft 1 1 21 $2,133 1,057 $2.02 -- 5/31/18 4.1% $1,831 $2,481 $3,146 -- 1 1 210 $1,773 856 $2.07 -- 6/9/11* 5.3% ------2 2 69 $2,380 1,191 $2.00 -- * Indicates initial lease-up. Loft 2 2 92 $2,505 1,467 $1.71 -- -- 3 2 7 $3,111 1,521 $2.05 --

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Bailey's Crossing VA510-015778 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Barcroft Plaza Multifamily Community Profile 3601-A Malibu Circle CommunityType: Market Rate - General Falls Church,VA 22041 Structure Type: 2-Story Garden 196 Units 2.0% Vacant (4 units vacant) as of 5/31/2018 Opened in 1966

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff 4.1% $1,161 410 $2.83 Comm Rm: Basketball: One 36.7% $1,345 628 $2.14 Centrl Lndry: Tennis: One/Den 10.2% $1,387 740 $1.87 Elevator: Volleyball: Two 25.5% $1,637 775 $2.11 Fitness: CarWash: Two/Den 10.2% $1,741 885 $1.97 Hot Tub: BusinessCtr: Three 13.3% $1,955 1,095 $1.79 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Ceiling Fan; Central A/C; Carpet / Hardwood

Select Units: Microwave; Patio/Balcony

Optional($): --

Security: --

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: Kay Apt. Communitie Owner: --

Comments

Amenity Fee: $ 100 Floorplans (Published Rents as of 5/31/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Garden -- Eff 1 8 $1,148 410 $2.80 -- 5/31/18 2.0% $1,354 $1,667 $1,955 Garden -- 1 1 72 $1,330 628 $2.12 -- 6/8/11 1.0% ------Garden Den 1 1 20 $1,372 740 $1.85 -- 11/24/09 1.0% ------Garden -- 2 1 44 $1,610 760 $2.12 -- Garden Den 2 1 20 $1,721 885 $1.94 -- Garden -- 2 2 6 $1,671 885 $1.89 -- Garden -- 3 2 26 $1,930 1,095 $1.76 --

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Natural Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Barcroft Plaza VA610-013013 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Barcroft View Multifamily Community Profile 6001 Columbia Pike CommunityType: Market Rate - General Falls Church,VA 22041 Structure Type: 3-Story Garden 370 Units 1.1% Vacant (4 units vacant) as of 5/31/2018 Opened in 1962

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,364 720 $1.89 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two -- $1,576 958 $1.65 Fitness: CarWash: Two/Den -- $1,727 1,120 $1.54 Hot Tub: BusinessCtr: Three -- $2,087 1,140 $1.83 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Disposal; Ceiling Fan; Central A/C; Carpet / Hardwood

Select Units: Dishwasher; Patio/Balcony

Optional($): --

Security: --

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: Kay Apartment Com Owner: --

Comments Select units have Carpet. Premium for carpeting ($40) and patio ($22-23). Averaged into rents below.

Amenity Fee: $ 100 Floorplans (Published Rents as of 5/31/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Garden -- 1 1 -- $1,430 720 $1.99 -- 5/31/18 1.1% $1,364 $1,626 $2,087 Renovated / Garden -- 1 1 -- $1,499 720 $2.08 -- 6/8/11 0.3% ------Renovated / Garden Den 2 1 -- $1,898 1,120 $1.69 -- 11/25/09 0.8% ------Renovated / Garden -- 2 1 -- $1,785 958 $1.86 -- Garden -- 2 1 -- $1,709 958 $1.78 -- Renovated / Garden -- 3 1.5 -- $2,233 1,140 $1.96 --

Adjustments to Rent Incentives: 2BR-$61/monthly; $11/monthly all others

Utilities in Rent: Heat Fuel: Natural Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Barcroft View VA610-013019 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Bennington Crossing Multifamily Community Profile 441 North Armistad Street CommunityType: Market Rate - General Alexandria,VA 22312 Structure Type: 3-Story Garden 308 Units 1.6% Vacant (5 units vacant) as of 6/1/2018 Opened in 1965

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One 12.3% $1,275 756 $1.69 Centrl Lndry: Tennis: One/Den 12.0% $1,390 856 $1.62 Elevator: Volleyball: Two 36.4% $1,438 943 $1.52 Fitness: CarWash: Two/Den 18.2% $1,545 1,022 $1.51 Hot Tub: BusinessCtr: Three 0.6% $1,775 1,134 $1.57 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Central A/C; Patio/Balcony; carpet

Select Units: --

Optional($): --

Security: --

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: JBG Smith Owner: --

Comments Previously called Hampton Court. Renovations-About 1/4 of property renovated 3 to 4 yrs ago; faux-granite counters, light wood cabinets, Blk appliances & new carpet throughout.

Floorplans (Published Rents as of 6/1/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ -- 1 1 38 $1,250 756 $1.65 -- 6/1/18 1.6% $1,332 $1,473 $1,775 Den 1 1 37 $1,365 856 $1.59 -- Den 2 1.5 56 $1,515 1,022 $1.48 -- -- 2 1 56 $1,350 933 $1.45 -- -- 2 1.5 56 $1,465 953 $1.54 -- -- 3 2 2 $1,740 1,134 $1.53 --

Adjustments to Rent Incentives: Waiving 1/2 of amenity fee(Reg.$300)

Utilities in Rent: Heat Fuel: Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Bennington Crossing VA510-002133 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Blvd2801 Multifamily Community Profile 2801 Park Center Drive CommunityType: Market Rate - General Alexandria,VA 22302 Structure Type: 17-Story High Rise 577 Units 0.7% Vacant (4 units vacant) as of 5/31/2018 Last Major Rehab in 2011 Opened in 1974

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,791 940 $1.91 Centrl Lndry: Tennis: One/Den -- $1,718 1,089 $1.58 Elevator: Volleyball: Two -- $1,793 1,141 $1.57 Fitness: CarWash: Two/Den -- $2,199 1,435 $1.53 Hot Tub: BusinessCtr: Three -- $2,624 1,900 $1.38 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Microwave; In Unit Laundry (Full Size); Central A/C; Patio/Balcony; Carpet

Select Units: Ceiling Fan; Fireplace

Optional($): --

Security: --

Parking 1: Free Surface Parking Parking 2: Attached Garage Fee: -- Fee: $50

Property Manager: Bainbridge Owner: --

Comments One 18-story & two 17-story Towers (31 THs & 546 Apts), all connected. 900+ parking spaces. Formerly The Aventine. Amenities - Theatre, Billards, on-site mini mart, dry cleaners, 2 guest suites ($60 & $75/nt), & shuttle to Metro. Parking 2nd space $75. On bus line to Pentagon City Metro & Park Center Office bldgs. Trash $12/mo. Amenity Fee: $ 0 Floorplans (Published Rents as of 5/31/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ A2R / High Rise - Elevator Den 1 1 -- $1,562 1,058 $1.48 Market 5/31/18 0.7% $1,742 $1,895 $2,624 A3R / High Rise - Elevator Den 1 1.5 -- $1,819 1,120 $1.62 Market 11/14/13 3.8% $1,441 $1,701 $2,405 A1R / High Rise - Elevator -- 1 1 -- $1,764 940 $1.88 Market 5/23/13 3.5% $1,572 $1,451 $2,686 A2R / High Rise - Elevator -- 2 1 -- $1,562 1,058 $1.48 Market 1/11/13 9.0% $1,634 $1,749 $2,262 A3R / High Rise - Elevator -- 2 1.5 -- $1,819 1,120 $1.62 Market B3R / High Rise - Elevato -- 2 2 -- $1,902 1,245 $1.53 Market B4R / High Rise - Elevato Den 2 2 -- $2,167 1,435 $1.51 Market C2R / Townhouse -- 3 2.5 -- $2,632 1,900 $1.39 Market C1R / Townhouse -- 3 3 -- $2,542 1,900 $1.34 Market Adjustments to Rent Incentives: Waiving all up front fees

Utilities in Rent: Heat Fuel: Natural Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Blvd2801 VA510-017244 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Brookdale at Mark Center Multifamily Community Profile 1400 North Beauregard Street CommunityType: Market Rate - General Alexandria,VA 22311 Structure Type: 3-Story Garden 472 Units 1.1% Vacant (5 units vacant) as of 5/31/2018 Opened in 1960

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff 2.5% $1,258 500 $2.52 Comm Rm: Basketball: One 31.6% $1,250 634 $1.97 Centrl Lndry: Tennis: One/Den 10.6% $1,380 700 $1.97 Elevator: Volleyball: Two 27.8% $1,555 910 $1.71 Fitness: CarWash: Two/Den 27.5% $1,645 940 $1.75 Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Patio/Balcony; Storage (In Unit); Carpet

Select Units: Microwave; Ceiling Fan; In Unit Laundry; Fireplace

Optional($): --

Security: --

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: Morgan Properties Owner: --

Comments Renovating units as they turnover-Updated kitchens with SS appliances, Granite counters, new carpet, installing washers & dryers(stackable)in all units. About 1/4 of the property has been renovated. Trash $10. Admin fee $300. Dog park, resident lounge, courtyard, BBQ/Picnic area.

Floorplans (Published Rents as of 5/31/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ -- Eff 1 12 $1,275 500 $2.55 -- 5/31/18 1.1% $1,283 $1,600 -- -- 1 1 49 $1,275 540 $2.36 -- -- 1 1 100 $1,275 680 $1.88 -- Den 1 1 50 $1,405 700 $2.01 -- -- 2 1 131 $1,585 910 $1.74 -- Den 2 1 130 $1,675 940 $1.78 --

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Brookdale at Mark Center VA510-002144 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Carousel Court Multifamily Community Profile 5714 Seminary Road CommunityType: LIHTC - General Falls Church,VA 22041 Structure Type: Garden 90 Units 1.1% Vacant (1 units vacant) as of 6/1/2018 Last Major Rehab in 2008

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,130 742 $1.52 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two -- $1,352 951 $1.42 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three -- $1,553 1,172 $1.32 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Central A/C; Patio/Balcony; Carpet

Select Units: --

Optional($): --

Security: --

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: AHC Management Owner: --

Comments Wait list- 1 1/2 to 2 yrs. 50% and 60% AMI levels. Breakdown: 1BR 18; 2BR 60; 3BR 12.

Floorplans (Published Rents as of 6/1/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Garden -- 1 1 -- $1,045 742 $1.41 LIHTC/ 50% 6/1/18 1.1% $1,130 $1,352 $1,553 Garden -- 1 1 -- $1,265 742 $1.70 LIHTC/ 60% Garden -- 2 2 -- $1,514 951 $1.59 LIHTC/ 60% Garden -- 2 2 -- $1,250 951 $1.31 LIHTC/ 50% Garden -- 3 2 -- $1,440 1,172 $1.23 LIHTC/ 50% Garden -- 3 2 -- $1,745 1,172 $1.49 LIHTC/ 60%

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Carousel Court VA059-015755 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Columbia View Multifamily Community Profile 3422 Spring Lane CommunityType: Market Rate - General Falls Church,VA 22041 Structure Type: Garden 52 Units 1.9% Vacant (1 units vacant) as of 6/1/2018

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,410 670 $2.10 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two -- $1,715 910 $1.88 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three -- $2,320 1,125 $2.06 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Microwave; Ice Maker; In Unit Laundry (Full Size); Central A/C; Carpet / Ceramic

Select Units: Patio/Balcony

Optional($): --

Security: Keyed Bldg Entry

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: Dittmar Company Owner: --

Comments Vacancies: 1-1BR

Floorplans (Published Rents as of 6/1/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Garden -- 1 1 -- $1,395 670 $2.08 Market 6/1/18 1.9% $1,410 $1,715 $2,320 Garden -- 2 2 -- $1,695 910 $1.86 Market 6/6/11 0.0% ------Garden -- 3 2 -- $2,295 1,125 $2.04 Market

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Electric Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Columbia View VA059-015753 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Curve 6100 Multifamily Community Profile 6100 Lincolnia Rd CommunityType: Market Rate - General Alexandria,VA 22312 Structure Type: Mid Rise 136 Units 0.7% Vacant (1 units vacant) as of 5/31/2018 Opened in 2009

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,715 757 $2.27 Centrl Lndry: Tennis: One/Den -- $1,785 940 $1.90 Elevator: Volleyball: Two -- $2,270 1,119 $2.03 Fitness: CarWash: Two/Den -- $2,355 1,146 $2.06 Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Microwave; Ice Maker; In Unit Laundry (Full Size); Central A/C; Patio/Balcony

Select Units: ADA Access

Optional($): --

Security: Keyed Bldg Entry

Parking 1: Underground Garage Parking 2: -- Fee: -- Fee: --

Property Manager: Gables Residential Owner: --

Comments Previously called Carmel Alexandria. Trash fees: 1BR $8; 2BR $12. 51 one bedroom units

Floorplans (Published Rents as of 5/31/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Mid Rise - Elevator -- 1 1 -- $1,690 757 $2.23 Market 5/31/18 0.7% $1,762 $2,327 -- Mid Rise - Elevator Den 1 1 -- $1,720 915 $1.88 Market 11/11/13 4.4% $1,700 $1,958 -- Mid Rise - Elevator Den 1 1.5 -- $1,800 966 $1.86 Market 5/23/13 2.2% $1,798 $2,077 -- Mid Rise - Elevator -- 2 2 -- $2,240 1,119 $2.00 Market 1/8/13 3.7% $1,728 $2,025 -- Mid Rise - Elevator Den 2 2 -- $2,310 1,127 $2.05 Market Mid Rise - Elevator Den 2 2.5 -- $2,340 1,164 $2.01 Market

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Natural Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Curve 6100 VA510-013060 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group e-lofts Multifamily Community Profile 4501 Ford Ave CommunityType: Market Rate - General Alexandria,VA 22302 Structure Type: 14-Story Adaptive Reuse 200 Units 9.0% Vacant (18 units vacant) as of 6/4/2018 Opened in 2016

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff 0.5% $1,452 447 $3.25 Comm Rm: Basketball: One -- $2,083 860 $2.42 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two -- $2,733 1,150 $2.38 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Microwave; Ice Maker; Ceiling Fan; In Unit Laundry (Full Size); Central A/C; Ceramic / Vinyl/Linoleum

Select Units: --

Optional($): --

Security: Gated Entry

Parking 1: Structured Garage Parking 2: -- Fee: $100 Fee: --

Property Manager: Bozzuto Owner: --

Comments Live/Work lofts-customizable lofts for live, work or both. Open floorplans with natural light, Quartz CT, SS appli. In-unit movable pocket walls. Community kitchens, conference room, pet care & washing station, bike share, conf room, movie theater, outdoor hammocks. Admin fee $500. Amenity fee $500. Trash fee $7. Former office building.

Floorplans (Published Rents as of 6/4/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ High Rise - Elevator -- Eff 1 1 $1,565 447 $3.50 Market 6/4/18* 9.0% $2,083 $2,733 -- High Rise - Elevator -- 1 1 -- $2,373 1,005 $2.36 Market * Indicates initial lease-up. High Rise - Elevator -- 1 1 -- $2,625 1,062 $2.47 Market High Rise - Elevator -- 1 1 -- $1,925 609 $3.16 Market High Rise - Elevator -- 1 1 -- $1,900 632 $3.01 Market High Rise - Elevator -- 1 1 -- $2,440 994 $2.46 Market High Rise - Elevator -- 2 2 -- $2,960 1,150 $2.57 Market

Adjustments to Rent Incentives: 2 mo free w/23 mo lease; 1/2 off parking; waived amenity fee Utilities in Rent: Heat Fuel: Electric Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash: e-lofts VA059-028378 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Grandview Multifamily Community Profile 3404 Carlin Springs Road CommunityType: LIHTC - General Falls Church,VA 22041 Structure Type: 3-Story Garden 266 Units 0.0% Vacant (0 units vacant) as of 5/31/2018 Opened in 1962

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff 0.8% $1,153 451 $2.56 Comm Rm: Basketball: One 34.6% $1,218 609 $2.00 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two 55.6% $1,457 945 $1.54 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three 9.0% $1,673 1,050 $1.59 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Disposal; Central A/C; Patio/Balcony; Carpet / Hardwood

Select Units: Dishwasher; Ceiling Fan

Optional($): --

Security: --

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: Ross Mgmt Owner: --

Comments Gas fee - $27 Eff/1BR, $33 2BR , $40 3BR. Accepts Sec 8 vouchers. No wait list. includes subsidized units

Floorplans (Published Rents as of 5/31/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Garden -- Eff 1 2 $1,211 451 $2.69 LIHTC/ 60% 5/31/18 0.0% $1,218 $1,457 $1,673 Garden -- 1 1 92 $1,288 609 $2.11 LIHTC/ 60% 6/9/11 0.0% ------Garden -- 2 1 148 $1,542 945 $1.63 LIHTC/ 60% ------Garden -- 3 1.5 24 $1,778 1,050 $1.69 LIHTC/ 60%

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Natural Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Grandview VA610-015776 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Halstead Tower Multifamily Community Profile 4380 King St CommunityType: Market Rate - General Alexandria,VA 22302 Structure Type: 16-Story High Rise 172 Units 4.1% Vacant (7 units vacant) as of 6/4/2018 Opened in 2007

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,821 749 $2.43 Centrl Lndry: Tennis: One/Den -- $1,966 852 $2.31 Elevator: Volleyball: Two -- $2,622 1,360 $1.93 Fitness: CarWash: Two/Den -- $2,346 1,347 $1.74 Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Microwave; Ice Maker; In Unit Laundry (Full Size); Central A/C; HighCeilings; Cable TV; Broadband Internet; Hardwood / Carpet Select Units: Patio/Balcony

Optional($): --

Security: Intercom

Parking 1: Underground Garage Parking 2: -- Fee: $100 Fee: --

Property Manager: Windsor Owner: --

Comments Originally planned Condos. High end finishes std. Walnut floor throughout, except BR (Berber carpet). Trash-$11. Granite counters kitchen/bath. GE Profle SS appliances. 42" cabinets. PHs marble floor in BA. 4 levels underground parking. Rooftop pool, sundeck, fire pit. Conference room. Courtyard. Amenity Fee: $ 400 Floorplans (Published Rents as of 6/4/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ High Rise - Elevator -- 1 1 -- $1,795 749 $2.40 -- 6/4/18 4.1% $1,894 $1,530 -- High Rise - Elevator Den 1 1 -- $1,940 852 $2.28 -- 6/9/11 4.1% ------High Rise - Elevator -- 2 2 -- $2,183 1,079 $2.02 -- 5/4/07* 95.3% ------High Rise - Elevator Den 2 2 -- $2,315 1,195 $1.94 -- * Indicates initial lease-up. Penthouse / High Rise - E Dining Rm 2 2.5 -- $3,000 1,484 $2.02 -- Penthouse / High Rise - E Den 2 2.5 -- -- 1,498 -- -- Penthouse / High Rise - E -- 2 2.5 -- -- 1,517 -- --

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Electric Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Halstead Tower VA510-009901 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Hillwood Manor Multifamily Community Profile 6079 Bellview Dr CommunityType: Market Rate - General Falls Church,VA 22041 Structure Type: 3-Story Garden 171 Units 1.8% Vacant (3 units vacant) as of 6/4/2018 Opened in 1949

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One 42.1% $1,269 678 $1.87 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two 57.9% $1,362 873 $1.56 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Carpet

Select Units: --

Optional($): Central A/C ( $105.00)

Security: --

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: Stanciu Mgmt Owner: --

Comments A/C fee is $130/mo. Vacancies: 1-1BR; 2-2BRs

Floorplans (Published Rents as of 6/4/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Garden -- 1 1 72 $1,374 678 $2.03 Market 6/4/18 1.8% $1,269 $1,362 -- Garden -- 2 1 99 $1,717 873 $1.97 Market 6/9/11 1.8% ------2/14/07 15.8% ------

Adjustments to Rent Incentives: 2BR $1492/mo.

Utilities in Rent: Heat Fuel: Electric Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Hillwood Manor VA059-009665 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Hollybrooke II and III Multifamily Community Profile 3012 Patrick Henry Dr. CommunityType: LIHTC - General Falls Church,VA 22044 Structure Type: 3-Story Garden 148 Units 2.7% Vacant (4 units vacant) as of 6/5/2018 Opened in 1952

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One 40.5% $1,203 570 $2.11 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two 52.0% $1,435 710 $2.02 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; In Unit Laundry (Full Size); Central A/C; Carpet

Select Units: --

Optional($): --

Security: Gated Entry; Keyed Bldg Entry

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: AHC Mgmt Owner: --

Comments Gourmet kitchens w/updated white appliances, large closets, window coverings. Bike racks, bike/hike trails, public transportation. Hollybrooke II-98 Tax Credit units(48-1BR; 39-2BR) Hollybrooke III-50 units(12-1BR, 38-2BRs)

Floorplans (Published Rents as of 6/5/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Garden -- 1 1 60 $1,273 570 $2.23 LIHTC/ 60% 6/5/18 2.7% $1,203 $1,435 -- Garden -- 2 1 77 $1,520 710 $2.14 LIHTC/ 60%

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Electric Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Hollybrooke II and III VA059-028381 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Jefferson, The Multifamily Community Profile 6166 Leesburg Pike CommunityType: Market Rate - General Falls Church,VA 22044 Structure Type: 5-Story Mid Rise 310 Units 0.6% Vacant (2 units vacant) as of 5/31/2018 Last Major Rehab in 2005 Opened in 1964

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff 18.4% $1,326 600 $2.21 Comm Rm: Basketball: One 50.3% $1,478 813 $1.82 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two 31.3% $1,774 1,225 $1.45 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Central A/C; Carpet

Select Units: --

Optional($): --

Security: Gated Entry; Cameras

Parking 1: Free Surface Parking Parking 2: Fee for Reserved Fee: -- Fee: $35

Property Manager: Capitol Investments Owner: --

Comments renovations include baths and kitchens, carpet

Floorplans (Published Rents as of 5/31/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Mid Rise - Elevator -- Eff 1 57 $1,326 600 $2.21 Market 5/31/18 0.6% $1,478 $1,774 -- Mid Rise - Elevator -- 1 1 78 $1,478 775 $1.91 Market 6/9/11 1.3% ------Mid Rise - Elevator -- 1 1 78 $1,478 850 $1.74 Market 2/14/07 6.1% ------Mid Rise - Elevator -- 2 1 97 $1,774 1,225 $1.45 Market

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Natural Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Jefferson, The VA059-009659 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Lerner Excelsior Tower Multifamily Community Profile 5800 Quantrell Ave CommunityType: Market Rate - General Alexandria,VA 22312 Structure Type: 16-Story High Rise 357 Units 3.4% Vacant (12 units vacant) as of 6/1/2018 Opened in 1980

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff -- $1,248 458 $2.72 Comm Rm: Basketball: One -- $1,574 759 $2.07 Centrl Lndry: Tennis: One/Den -- $1,541 759 $2.03 Elevator: Volleyball: Two -- $1,676 976 $1.72 Fitness: CarWash: Two/Den -- $1,748 1,012 $1.73 Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Microwave; Central A/C; Patio/Balcony

Select Units: In Unit Laundry

Optional($): --

Security: Unit Alarms

Parking 1: Structured Garage Parking 2: Fee for Reserved Fee: $150 Fee: $100

Property Manager: Lerner Corporation Owner: --

Comments Previously called Tower 2000. Amenities include Billiards, party room, 2 fitness centers & 2 tennis courts. On Metro bus line to Van Dorn Metro Station.

Amenity Fee: $ 250 Floorplans (Published Rents as of 6/1/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Miro / High Rise - Elevato -- Eff 1 -- $1,317 410 $3.21 Market 6/1/18 3.4% $1,557 $1,099 -- Winchester / High Rise - -- Eff 1 -- $1,377 506 $2.72 Market 11/11/13 5.0% $1,360 $1,619 -- Picasso / High Rise - Elev -- 1 1 -- $1,686 759 $2.22 Market 5/29/13 4.8% $1,416 $1,652 -- Monet / High Rise - Eleva Den 1 1 -- $1,653 759 $2.18 Market 1/9/13 1.1% $1,352 $1,655 -- Rembrandt / High Rise - Den 2 1 -- -- 1,012 -- Market VanGogh / High Rise - El Den 2 2 -- $1,875 1,012 $1.85 Market Michelanglo / High Rise - -- 2 1 -- $1,803 976 $1.85 Market

Adjustments to Rent Incentives: $500 Move-in on all vacants.

Utilities in Rent: Heat Fuel: Natural Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Lerner Excelsior Tower VA510-017242 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Lynnbrook @ Mark Center Multifamily Community Profile 5411 A Sheffield Court & 5510-A Ascot Ct. CommunityType: Market Rate - General Alexandria,VA 22311 Structure Type: Garden 979 Units 0.4% Vacant (4 units vacant) as of 6/4/2018 Opened in 1970

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,308 655 $2.00 Centrl Lndry: Tennis: One/Den -- $1,555 700 $2.22 Elevator: Volleyball: Two -- $1,470 950 $1.55 Fitness: CarWash: Two/Den -- $1,525 970 $1.57 Hot Tub: BusinessCtr: Three -- $1,955 1,088 $1.80 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; carpet

Select Units: --

Optional($): --

Security: --

Parking 1: surface Parking 2: -- Fee: -- Fee: --

Property Manager: Morgan Properties Owner: --

Comments Lynbrook & Meadowcreek now just 1 property. Now called only Lynbrook. Sewer/Trash $10.

Floorplans (Published Rents as of 6/4/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ -- 1 1 -- $1,288 655 $1.97 -- 6/4/18 0.4% $1,431 $1,498 $1,955 Den 1 1 -- $1,535 700 $2.19 -- -- 2 1 -- $1,445 950 $1.52 -- Den 2 1.5 -- $1,500 970 $1.55 -- -- 3 2 -- $1,880 1,080 $1.74 -- Den 3 2 -- $1,980 1,095 $1.81 --

Adjustments to Rent Incentives: none

Utilities in Rent: Heat Fuel: Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Lynnbrook @ Mark Center VA510-002136 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Munson Hill Towers Multifamily Community Profile 6129 Leesburg Pike CommunityType: Market Rate - General Falls Church,VA 22041 Structure Type: High Rise 279 Units 0.7% Vacant (2 units vacant) as of 6/4/2018 Last Major Rehab in 1997 Opened in 1963

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff 12.5% $1,458 559 $2.61 Comm Rm: Basketball: One 40.5% $1,603 839 $1.91 Centrl Lndry: Tennis: One/Den 13.3% $1,728 980 $1.76 Elevator: Volleyball: Two 29.7% $2,020 1,125 $1.80 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three 3.9% $2,575 1,333 $1.93 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Microwave; Ice Maker; Ceiling Fan; Central A/C; Patio/Balcony; Carpet / Vinyl/Linoleum

Select Units: --

Optional($): --

Security: Gated Entry; Keyed Bldg Entry

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: Akelius Real Estate Owner: --

Comments Rents from website

Floorplans (Published Rents as of 6/4/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ High Rise - Elevator -- Eff 1 35 $1,445 559 $2.58 -- 6/4/18 0.7% $1,633 $2,020 $2,575 High Rise - Elevator -- 1 1 113 $1,588 839 $1.89 -- 6/9/11 0.7% ------High Rise - Elevator Den 1 1 37 $1,713 980 $1.75 -- 11/25/09 1.8% ------High Rise - Elevator -- 2 1 41 $1,975 1,107 $1.78 -- 2/15/07 7.2% ------High Rise - Elevator -- 2 2 42 $2,025 1,143 $1.77 -- High Rise - Elevator -- 3 1.5 11 $2,550 1,333 $1.91 --

Adjustments to Rent Incentives: Waiving admin fee($500)

Utilities in Rent: Heat Fuel: Natural Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Munson Hill Towers VA059-009656 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Parkwood Multifamily Community Profile 6034 Vista Drive CommunityType: LIHTC - General Falls Church,VA 22041 Structure Type: 3-Story Garden 221 Units 0.0% Vacant (0 units vacant) as of 5/31/2018 Last Major Rehab in 1994 Opened in 1949

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One 21.7% $1,204 610 $1.97 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two 78.3% $1,438 750 $1.92 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Central A/C; Carpet

Select Units: --

Optional($): --

Security: --

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: -- Owner: MRK Partners

Comments Party room, two playgrounds. 221 total units. 1 unit is offline and is being held vacant prior to renovations. Still actively leasing if units become vacant. Wait list of about 220 households. People find out about the community by word of mouth. Biggest selling point is central heat and air, other properties nearby don't have this.

Floorplans (Published Rents as of 5/31/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ -- 1 1 48 $1,274 610 $2.09 LIHTC/ 60% 5/31/18 0.0% $1,204 $1,438 -- -- 2 1 173 $1,523 750 $2.03 LIHTC/ 60% 2/8/07 1.4% ------

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Parkwood VA059-009599 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Skyline Towers Multifamily Community Profile 5599 Seminary Road CommunityType: Market Rate - General Falls Church,VA 22041 Structure Type: 26-Story High Rise 939 Units 1.8% Vacant (17 units vacant) as of 6/4/2018 Opened in 1971

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff -- $1,349 640 $2.11 Comm Rm: Basketball: One -- $1,370 960 $1.43 Centrl Lndry: Tennis: One/Den -- $1,603 1,119 $1.43 Elevator: Volleyball: Two -- $1,688 1,350 $1.25 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three -- $2,094 1,621 $1.29 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Central A/C; Patio/Balcony; Carpet

Select Units: In Unit Laundry

Optional($): --

Security: Keyed Bldg Entry

Parking 1: Structured Garage Parking 2: Fee for Reserved Fee: $50 Fee: $100

Property Manager: Equity Residential Owner: --

Comments Waiving 1st $200 of $500 fee. Rents represent mid of ranges including premiums for view, upgraded kitchen, Phase II, & W/D. Move-in fee $300. Parking fee 1st space $50, 2nd space $60/mo. Reserved starts@$100/mo. Amenity Fee: $ 300 Floorplans (Published Rents as of 6/4/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ L'Enfant / High Rise - Ele -- Eff 1 -- $1,326 640 $2.07 -- 6/4/18 1.8% $1,486 $1,688 $2,094 Potomac / High Rise - Ele Den 1 1 -- $1,578 1,119 $1.41 -- 6/9/11 0.7% ------Reagan / High Rise - Elev -- 1 1 -- $1,345 960 $1.40 -- Dupont / High Rise - Elev -- 2 2 -- $1,658 1,350 $1.23 -- Mt. Vernon / High Rise - E -- 3 2 -- $1,923 1,496 $1.29 -- Smithsonian / High Rise - -- 3 2 -- $2,195 1,746 $1.26 --

Adjustments to Rent Incentives: $300 off move in fee

Utilities in Rent: Heat Fuel: Electric Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Skyline Towers VA610-015777 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Stoneridge at Mark Center Multifamily Community Profile 5816-A Merton Court & 5797 Rayburn Ave CommunityType: Market Rate - General Alexandria,VA Structure Type: 2-Story Garden 802 Units 0.6% Vacant (5 units vacant) as of 6/4/2018 Opened in 1968

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,466 692 $2.12 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two -- $1,575 1,023 $1.54 Fitness: CarWash: Two/Den -- $1,719 1,025 $1.68 Hot Tub: BusinessCtr: Three -- $1,899 1,163 $1.63 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; In Unit Laundry (Full Size)

Select Units: Ceiling Fan

Optional($): --

Security: --

Parking 1: surface Parking 2: -- Fee: -- Fee: --

Property Manager: Morgan Properties Owner: --

Comments Stoneridge & Hillwood at Mark Center are now combined. Now just called Stoneridge at Mark Center. Vacancies: 1-1BRs; 4-3BRs. Trash $10 Renovated in the last two years.

Floorplans (Published Rents as of 6/4/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Garden -- 1 1 -- $1,325 600 $2.21 Market 6/4/18 0.6% $1,466 $1,611 $1,899 Garden -- 1 1 -- $1,560 682 $2.29 Market Garden -- 1 1 -- $1,443 700 $2.06 Market Alcove / Garden -- 1 1 -- $1,438 785 $1.83 Market Garden Den 2 1.5 -- $1,689 1,025 $1.65 Market Alcove / Garden -- 2 1 -- $1,625 1,130 $1.44 Market Garden -- 2 1.5 -- $1,485 950 $1.56 Market Garden -- 2 1 -- $1,525 990 $1.54 Market Garden -- 3 2 -- $1,835 1,060 $1.73 Market Adjustments to Rent Alcove / Garden -- 3 2 -- $1,921 1,170 $1.64 Market Incentives: Waived app & amenity fees Garden -- 3 2 -- $1,835 1,260 $1.46 Market

Utilities in Rent: Heat Fuel: Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Stoneridge at Mark Center VA510-002143 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Town Square at Mark Center (Phase 1) Multifamily Community Profile 1459 North Beauregard Street CommunityType: Market Rate - General Alexandria,VA Structure Type: Mid Rise 406 Units 2.2% Vacant (9 units vacant) as of 6/1/2018 Opened in 1997

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,753 826 $2.12 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two -- $1,935 1,037 $1.87 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three -- $2,557 1,257 $2.03 Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Microwave; Ceiling Fan; In Unit Laundry (Full Size); carpet

Select Units: Fireplace

Optional($): --

Security: --

Parking 1: Paid Surface Parking/On Parking 2: Paid Surface Parking/On Fee: $40Site Fee: $50Site

Property Manager: Equity Residential Owner: --

Comments App. Fee of $35, free shuttle to metro, internet access Elevators in all buildings. Raquetball court. Storage fees: $45-$65. Parking fees: 1st space $40/mo.; 2nd space $50/mo Admin fee $500

Floorplans (Published Rents as of 6/1/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Aster -- 1 1 -- $1,597 702 $2.27 -- 6/1/18 2.2% $1,321 $1,935 $2,557 Crest -- 1 1 -- -- 764 -- -- Briarwood Loft 1 1.5 -- $1,778 916 $1.94 -- Devin Loft 1 1 -- $1,810 921 $1.97 -- Grove -- 2 2 -- $1,923 1,046 $1.84 -- Emerson -- 2 2 -- $1,917 1,080 $1.78 -- Fairview -- 2 2 -- $1,876 984 $1.91 -- Hampton -- 3 2 -- $2,522 1,257 $2.01 -- Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Electric Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Town Square at Mark Center (Phase 1) VA510-002147 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Town Square at Mark Center (Phase 2) Multifamily Community Profile 1459 North Beauregard Street CommunityType: Market Rate - General Alexandria,VA Structure Type: Mid Rise 272 Units 1.1% Vacant (3 units vacant) as of 6/1/2018 Opened in 2000

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One -- $1,787 809 $2.21 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two -- $2,296 1,151 $2.00 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Dishwasher; Disposal; Microwave; Ceiling Fan; In Unit Laundry (Full Size); carpet

Select Units: Fireplace

Optional($): --

Security: --

Parking 1: Paid Surface Parking/On Parking 2: Paid Surface Parking/On Fee: $40Site Fee: $50Site

Property Manager: Equity Residential Owner: --

Comments App. Fee of $35, free shuttle to metro, internet access. Storage fees: $45-$65/mo. Parking fees: 1st space $40; 2nd space $50/mo.(non-reserved). Elevators in all buildings Rents u/a for the Chestnut, Mulberry & Sycamore.

Floorplans (Published Rents as of 6/1/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ Chestnut / Garden -- 1 1 -- -- 736 -- Market 6/1/18 1.1% ------Maple / Garden -- 1 1 -- $1,628 738 $2.21 Market Mulberry / Garden -- 1 1 -- -- 740 -- Market Hazel / Garden Loft 1 1 -- $1,851 870 $2.13 Market Sycamore / Garden Loft 1 1 -- -- 874 -- Market Fraser / Garden Loft 1 1.5 -- $1,807 898 $2.01 Market Linden / Garden -- 2 2 -- $1,953 1,052 $1.86 Market Poplar/Dogwood / Townh -- 2 2 -- $2,307 1,154 $2.00 Market Elm/Birch / Townhouse -- 2 2 -- $2,537 1,246 $2.04 Market Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Electric Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Town Square at Mark Center (Phase 2) VA510-002153 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management. RealProperty Research Group Vista Gardens Multifamily Community Profile 6008 Vista Dr CommunityType: Market Rate - General Falls Church,VA 22041 Structure Type: 3-Story Garden 296 Units 0.0% Vacant (0 units vacant) as of 6/1/2018 Opened in 1949

Unit Mix & Effective Rent (1) Community Amenities Bedroom %Total Avg Rent Avg SqFt Avg $/SqFt Clubhouse: Pool-Outdr: Eff ------Comm Rm: Basketball: One 19.3% $1,230 700 $1.76 Centrl Lndry: Tennis: One/Den ------Elevator: Volleyball: Two 80.7% $1,485 800 $1.86 Fitness: CarWash: Two/Den ------Hot Tub: BusinessCtr: Three ------Sauna: ComputerCtr: Four+ ------Playground: Features Standard: Ceramic

Select Units: --

Optional($): --

Security: --

Parking 1: Free Surface Parking Parking 2: -- Fee: -- Fee: --

Property Manager: ARC Developers Owner: --

Comments Mgmt said very old building, nothing has been upgraded. ceramic tile foors Wait list-3 hhlds

Floorplans (Published Rents as of 6/1/2018) (2) Historic Vacancy & Eff. Rent (1) Description Feature BRs Bath #Units Rent SqFt Rent/SF Program Date %Vac 1BR $ 2BR $ 3BR $ -- 1 1 57 $1,300 700 $1.86 -- 6/1/18 0.0% $1,230 $1,485 -- -- 2 1 239 $1,570 800 $1.96 -- 6/9/11 0.0% ------2/15/07 3.4% ------

Adjustments to Rent Incentives: None

Utilities in Rent: Heat Fuel: Natural Gas Heat: Cooking: Wtr/Swr: Hot Water: Electricity: Trash:

Vista Gardens VA059-009664 © 2018 Real Property Research Group, Inc. (1) Effective Rent is Published Rent, net of concessions and assumes that water, sewer and trash is included in rent (2) Published Rent is rent as quoted by management.