MULTIFAMILY OFFERING | SHOWN BY APPT. WITH LISTING AGENTS INVESTMENT HIGHLIGHTS Trendy South Central Austin | 255 Units Tremendous Value Add Opportunity Excellent Location | 15 Minutes to the CBD, State Capitol, the University of Texas Easy Access North and South via S. First, S. Congress, IH-35 and MoPac (Loop 1) One of Austin’s Fastest Growing Submarkets Convenient Access to Public Transportation Low Density, All Two-Story Garden Style Apartments | 410 Parking Spaces Shown By Appt. with Listing Agents 739 W. William Cannon Dr. | Austin, TX 78745 Ellen Muskin - 512.343.2700 x1 Daniel Elam - 512.343.2700 x2 [email protected] [email protected] Investment Opportunity • The property benefits from high visibility at the quadrant of West William Cannon Drive and South First Street. These thoroughfares provide direct access to the city’s main highways, IH-35, Mopac (Loop 1) and Hwy 71. Downtown and its related amenities are located approximately six miles north via South First Street, with the University of Texas located about eight miles north. The area surrounding fundamentals continue to progress. • Austin in the second-best place to live in the U.S., according to a new ranking from U.S. News and World Report (Mar. 2016). According to a 2015 report from Money, Austin is the best city in the U.S. for adults ages 20 to 34: “...projected job growth through 2019 is a robust 13.3% - thanks in part to big tech and telecom employers like Dell, IBM and AT&T.” • The South submarket is experiencing extremely strong rent growth, primarily due to Austin’s thriving apartment outlook; and continued new construction in the Central Business District, which is forcing residents southward in search of affordability. • According to Austin Investor Interests Report, in 1Q 2016 the Austin area added 2,066 units, with 1,833 units quickly absorbed. There have now been over 3.5 years of positive absorption in the Austin area. Well located in the rapidly improving South submarket – The Place at West Village is situated in the South submarket, one of the most exciting submarkets in the Austin MSA. This area benefits greatly from the new developments to the north in the eclectic 78704 zip code, and from the south, home of South Park Meadows retail development. The property is at the quadrant of West William Cannon Dr. and South First Street, conveniently situated between IH-35 and Mopac. Downtown is approximately 5 miles to the north, which can easily be accessed without highway use. The University of Texas, one of the largest campuses in the nation with 50,000+ students, is located about 7 miles north. Value Add Opportunity – The property’s average rental rate is $917/unit, more affordable as compared to the Austin MSA average of $1,167/unit, according to Austin Investor Interests’ (AII) 1Q 2016 Trend Report. Increased rents are achievable with minimal unit enhancements and curb appeal. Rehabbed properties of comparable vintage in this submarket range between $995 - $1,150 for a 1BR and $1,195 - $1,350 for a 2BR. The average annual rent growth in the submarket is 4.6%, according to AII’s 1Q 2016 Trend Report, with a city growth rate of 6.2%. The South submarket occupancy rate averaged 92.4%, just slightly below the city-wide average of 94.1%. Property Enhancements - The 255-unit community has an average unit size of 699+/- square feet, with a wide variety of 1BR and 2BR units. The roofs are pitched composition shingle. The exteriors are a combination of brick, hardiboard and wood exteriors. Located on 8.7820+/- acres (according to TCAD records), the community consists of 16 two-story buildings with individual HVAC and two central gas boilers. All units enjoy plank faux flooring throughout the kitchens and bathrooms, with the first floor offering additional faux flooring in the living rooms. Kitchens feature new appliance packages, breakfast bars, updated lighting, pantries and some upgraded with modern painted kitchen cabinets. Leasing efforts are enhanced by a fitness center, elegant swimming pool, two clothes care facilities, 16 units with W / D connections and a dog park. Google fiber cable is currently being installed at the property. Major recent renovations of approximately $1.8M include six roofs replaced within the past year, all buildings painted in the last three months, new siding and the parking lot surface coated and striped. Economic Fundamentals Improving – 2015 Household Average income in a 1-mile radius was $63,323 and $87,787 in a 5-mile radius. Austin added 34,900 net new jobs, or 3.8%, in the 12 months ending in December 2015, making Austin the third fastest growing major metro (U.S Bureau of Labor Statistics). Rents in Austin are forecasted to rise 5% throughout 2016. Austin is ranked at the top of the list of U.S. cities most likely to prosper during the next 10 years (Forbes, America’s Next Boom Town, January 2016). Population within a 1-mile radius grew 11% since 2010, and the Metro Austin population increased over 16% during that same span. The Austin population now exceeds 2 million. The Place at West Village | 255 Units Property Features Vaulted Ceilings in Second Floor Units* Stackable Washer/Dryer Connections* All Electric Gourmet Kitchens | Gooseneck Faucets Pass –Through Breakfast Bars * Cast Iron Tubs with Ceramic Tiled Surrounds City of Austin Programmable Thermostats Wood-Burning Brick Fireplaces * Faux Wood-Look Flooring | Vertical Blinds Spacious Walk-In Closets Multiple Floor Plans to Attract Residents Private Balconies and Patios with Outside Storage Property Abuts South First Street *In Select Units Full Exterior Painting (Finished 2016) New Roof Replacements - Six Buildings Newly Redecorated Management Office | Coffee Bar & WiFi Centrally Located, Shimmering Swimming Pool Two On-Site Clothes Care Facilities Large, Mature Trees, Landscaping and Xeriscaping Wrought Iron Perimeter Gates Convenient Access to Public Transportation Fitness Center | Package Holding Area Google Fiber Currently Being Installed Pet Friendly Community and Dog Park Excellent Location to CBD, “78704” Zip, Major Thoroughfares COMMERCIAL The Place at West Village | 255 Units MUSKIN FINANCIAL ANALYSIS PROPERTY HIGHLIGHTS INVESTMENT OUTLINE UNITS 255 PRICE $24,500,000 BUILT 1983 TERMS Cash or New Loan BUILDINGS 16 Two-Story Garden Style Buildings PROPOSED NEW LOAN 70% LTV / $17,150,000 EXTERIOR Brick & Hardiboard Siding RATE/AMORT/PMT 4.25% / 30Y / $84,368 METERING Electric - Individual TOTAL SQUARE FEET 178,227 +/- HVAC Individual Units - Electric LAND SIZE 8.7820 +/- Acres (TCAD) HOT WATER 2 Gas Boilers PARKING SPACES 410 UNIT MIX MONTHLY ANNUAL UNIT TOTAL MARKET MARKET MARKET RENT UNITS SF +/- SF +/- RENT RENT RENT SF +/- 52 1 Bed / 1 Bath 518 26,936 $829 $43,108 $517,296 $1.60 31 1 Bed / 1 Bath 577 17,887 $849 $26,319 $315,828 $1.47 56 1 Bed / 1 Bath 664 37,184 $869 $48,664 $583,968 $1.31 28 1 Bed / 1 Bath 725 20,300 $889 $24,892 $298,704 $1.23 40 2 Bed / 1 Bath 850 34,000 $1,014 $40,560 $486,720 $1.19 16 2 Bed / 1 Bath - W/D 850 13,600 $1,044 $16,704 $200,448 $1.23 32 2 Bed / 2 Bath 885 28,320 $1,049 $33,568 $402,816 $1.19 255 699+/- 178,227+/- $917 $233,815 $2,805,780 $1.31 Square footage is approximate. Muskin Commercial, LLC makes no representations or warranties regarding the square footages and has not independently verified this information. NOTES TO PRO FORMA: *T-12 Cap Ex Figures are adjusted to Industry Standards **2015 Cap Ex totaled $80,927 PRO FORMA ANALYSIS T-3 Rental Income STABILIZED (Feb—Apr 2016) 2015 Year End INCOME UNDERWRITING Annualized Actuals SCHEDULED MARKET RENT $2,805,780 $2,767,540 $2,699,451 Less: Loss to Lease 3.00% ($84,173) ($111,888) ($119,394) Less: Vacancy 5.00% ($140,289) ($197,564) ($157,973) Less: Concessions 0.25% ($7,014) ($17,056) ($4,586) Less: Employee / Model Units 0.25% ($7,014) ($11,718) ($13,595) Less: Non-Revenue Units / Bad Debt 0.25% ($7,014) $10,335 ($8,456) NET RENTAL INCOME $2,560,274 $2,439,650 $2,395,447 Plus: Laundry Income $25,000 $22,696 $20,571 Plus: Fee Income $80,000 $78,274 $78,603 Plus: RUBS Income $170,000 $153,042 $149,076 Plus: Other Income $30,000 $25,169 $22,127 TOTAL OPERATING INCOME (EGI) $2,865,274 $2,718,831 $2,665,824 T-12 Expenses EXPENSES PER UNIT From Apr 2016 Administrative $176 $45,000 $69,572 $58,880 Advertising & Promotion 157 $40,000 $40,300 $43,572 Payroll $1,150 $293,250 $362,047 $371,763 Repairs & Maintenance $450 $114,750 $114,284 $109,313 Management Fee (3.00%) $337 $85,958 $80,538 $79,874 Utilities $1,196 $305,000 $307,605 $298,324 Contracted Services $157 $40,000 $38,766 $39,028 Real Estate Taxes**(2.296081%) $1,765 $450,032 $379,414 $361,633 Franchise Tax $98 $25,000 $28,136 $22,964 Insurance $200 $51,000 $42,898 $44,935 Replacement Reserve/Cap Ex $250 $63,750 $63,750 $63,750 Total Expenses $1,513,740 $1,527,036 $1,494,036 Per Unit $5,936 $5,988 $5,859 Per SF $8.49 $8.57 $8.38 Net Operating Income $1,351,534 $1,191,795 $1,171,788 NOTES TO PRO FORMA: *T-12 Cap Ex Figures are adjusted to Industry Standards **2015 Cap Ex totaled $80,927 Lady Bird Lake | Congress Ave. Bridge University of Texas (Main Campus) Neighborhood Overview Sixth Street | Warehouse District Retail Area Employers Restaurants & Entertainment Southpark Meadows Advanced Micro Devices (AMD) Cinemark Southpark Meadows HEB Grocery Stores Motorola St.