Offering Memorandum KRAMER'S MIDTOWN III 831 Wheeler Avenue • Reno, NV 89502 1 NON - ENDORSEMENT AND DISCLAIMER NOTICE Confidentiality and Disclaimer The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved. Non-Endorsement Notice Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. 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KRAMER'S MIDTOWN III Reno, NV ACT ID ZAA0420103 2 KRAMER'S MIDTOWN III TABLE OF CONTENTS SECTION INVESTMENT OVERVIEW 01 Offering Summary Regional Map Local Map Aerial Photo Floor Plans FINANCIAL ANALYSIS 02 Rent Roll Summary Rent Roll Detail Operating Statement Notes Pricing Detail Acquisition Financing MARKET COMPARABLES 03 Sales Comparables Rent Comparables MARKET OVERVIEW 04 Market Analysis Demographic Analysis 3 KRAMER'S MIDTOWN III INVESTMENT OVERVIEW 4 KRAMER'S MIDTOWN III OFFERING SUMMARY EXECUTIVE SUMMARY VITAL DATA Price $1,800,000 CURRENT YEAR 1 Down Payment 35% / $630,000 CAP Rate 5.31% 5.65% MAJOR EMPLOYERS Loan Amount $1,170,000 GRM 12.34 11.76 Net Operating Loan Type Proposed New $95,631 $101,703 Income EMPLOYER # OF EMPLOYEES Net Cash Flow Interest Rate / Amortization 4.25% / 30 Years 4.22% / $26,563 5.18% / $32,634 Peppermill Hotel Casino 4,700 After Debt Service Price/Unit $180,000 Total Return 7.35% / $46,287 8.45% / $53,214 U-Haul 3,102 Price/SF $405.41 VA Sirra Nev Hlth Care Systems 3,000 Number of Units 10 Monarch 2,100 Rentable Square Feet 4,440 Circus Circus Reno Ht & Casino 2,000 Number of Buildings 1 St Marys Health Network 1,800 Number of Stories 2 County of Washoe 1,615 Year Built / Renovated 1984 / 2019 Lot Size 0.21 acre(s) Grand Sierra Resort and Casino 1,525 US Post Office 1,461 UNIT MIX Prime Hlthcare Svcs - Reno LLC 1,370 NUMBER APPROX. UNIT TYPE Club Cal-Neva 1,300 OF UNITS SQUARE FEET Altair Nanotechnologies Inc 1,125 10 1 Bedroom/1 Bathroom 444 DEMOGRAPHICS 10 Total 4,440 1-Miles 3-Miles 5-Miles 2018 Estimate Pop 21,953 130,885 239,249 2010 Census Pop 20,475 121,993 224,140 2018 Estimate HH 10,904 54,723 96,637 2010 Census HH 10,156 51,261 90,946 Median HH Income $32,115 $37,918 $44,906 Per Capita Income $25,472 $25,157 $27,805 Average HH Income $49,872 $58,871 $67,793 #5 KRAMER'S MIDTOWN III OFFERING SUMMARY INVESTMENT OVERVIEW Kramer's Midtown III is the third property in a series of assets that have been delivered to the market by the ownership, Kramer Properties. Kramer Properties has successfully replicated this concept through their seasoned experience in the development and redevelopment of multifamily assets. Kramer's Midtown III began as an asset that was structurally sound through its brick construction, though had dated interiors and common areas. Kramer Properties took this asset and brought it into the 21st Century by completely modernizing the amenities and living spaces, to fit the demand of the Midtown East tenant profile. Along with the high-end luxury aspect offered by this property, the owner has also installed a set of security features, an amenity unique to an asset of this kind. The entire property is completely gated and enclosed with key-less entries on all gates, unit doors, and common area doors that each tenant receives a personalized entry code for. There is a 24-hour surveillance system covering the entire property along with an exterior light system to completely illuminate the property, giving tenants an increased feeling of comfort in an established residential neighborhood. The Midtown East submarket where Kramer's Midtown III is located in is one of the best-defining features of this asset. Midtown East is one of the highest demanded locations for rentals in all of Reno. The close proximity to Midtown & Downtown with all of the dining, nightlife, and art & culture gives Kramer's Midtown III all the benefits of the submarket's amenities, while still maintaining a sense of quiet, residential living. The property has a Walk Score of 94, a huge component for the tenant profile who enjoy what the community has to offer. As more and more assets are being brought up to modern standards in Midtown East, it has drawn a higher-paying tenant profile to the submarket. This not only supports the already high achieved rents at Kramer’s Midtown III, but an investor can also expect continued rent growth as this neighborhood continues to thrive. The full renovation that this asset received has allowed for it to become established as one of the highest achieving rental properties in its submarket. Kramer Properties hired one of the top designers in Reno to assist in the contemporary renovation that extends the theme from the exterior to the interior, with Kramer's Midtown III resembling that of a Las Vegas Resort Cabana. The units were modernized with USB Outlets, upgraded thermostats, and other contemporary features, with each tenant also receiving a designated off-street parking space, providing a strong sense of comfort and luxury for the young, professional tenants that seek to live in Midtown East. INVESTMENT HIGHLIGHTS ▪ Midtown East, a Strong & Growing Submarket with Continued Expected Rent Growth ▪ Extensive, Contemporary Renovations Throughout ▪ Strong, Stabilized, High-Performing Asset ▪ Offered Free & Clear ▪ Pride of Ownership ▪ Legacy Asset 6 KRAMER'S MIDTOWN III OFFERING SUMMARY PROPERTY OVERVIEW Kramer's Midtown III is an asset that has been kept meticulously well maintained since its construction in 1984. The current owner has taken this immaculate property and has completely modernized it through an extensive, contemporary renovation that has allowed the asset to garner some of the strongest rents in its submarket. The theme has the essence of a Las Vegas Resort Cabana with the modern luxuries and amenities one would expect. The exterior of the property has been uplifted with a designer facade and the cruising-blue color themed branding to accentuate the location's status. The courtyard has become a contemporary lounge with outdoor furniture, a shaded gazebo, a gas barbecue, and a tile, turf, & stone landscape that ties it all together. Continuing further through the property, the unit exteriors include the continuation with the same cruising-blue colored doors, number-pad locks, and modern exterior lights. As you enter the units, the open floor plan features top- upgrades including granite countertops & tile backsplashes, vinyl-wood flooring, and new light fixtures. The kitchen features white cabinetry with brushed nickel hardware and a new stainless-steel, energy efficient appliance set featuring glass top electric range, refrigerator, dishwasher, and microwave. The bathrooms feature over-sized shower heads, new vanities, and sliding glass shower doors. Each unit has been fitted with a brand Common Area Amenities new, stacked washer/dryer combo, which is a key amenity sought after by the tenant profile of Midtown East. Kramer's Midtown III consists of One- Bedroom units that meet the demand of the young professionals looking ▪ Designated Parking to live in Midtown East. The Midtown East submarket is one of the highest demanded locations for rentals and ▪ Outdoor Lounge w/ Gas BBQ has one of the highest occupancy rates for the entire City of Reno. The urban lifestyle mixed with the arts & ▪ Fully Gated & Well Illuminated culture atmosphere of Midtown has allowed this submarket to flourish as more and more renters seek this ▪ 24-Hour Camera Surveillance location for housing. Overall vacancy in Reno/Sparks is currently 3.31%, with this submarket even tighter at less ▪ Modern-Design Exterior than 2.00%.