THE VILLAGE AT FALLSWAY MULTIFAMILY DEVELOPMENT IN AN OPPORTUNITY ZONE BALTIMORE, MARYLAND The Village at Fallsway THIS CONFIDENTIAL OFFERING MEMORANDUM (“Offering Memorandum”) is being furnished to the recipient (the “Recipient”) solely for the Recipient’s own limited use in considering whether to provide financing for The Village at Fallsway located at 300-320 North Front Street, 300-312 North High Street, and 300 Fallsway, Baltimore, MD (the “Property”), on behalf of Airo Capital Management (the “Sponsor”). This confidential information does not purport to be all-inclusive nor does it purport to contain all the information that a prospective investor may desire. Neither Avison Young, the Sponsor nor any of their respective partners, managers, officers, employees or agents makes any representation, guarantee or warranty, expressed or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. The Recipient agrees that: (a) the Offering Memorandum and its contents are confidential information, except for such information contained in the Offering Memorandum that is a matter of public record; (b) the Recipient and the Recipient’s employees, agents, and consultants (collectively, the “need to know parties”) will hold and treat the Offering Memorandum in the strictest of confidence, and the Recipient and the need to know parties will not, directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without the prior written authorization of the Sponsor; and, (c) the Recipient and the need to know parties will not use, or permit to be used, this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Sponsor or for any purpose other than use in considering whether to invest into the Property. The Recipient and the need to know parties agree to keep this Offering Memorandum and all confidential information contained herein permanently confidential and further agree to use this Offering Memorandum solely for the purpose set forth above. PHOTOCOPYING OR OTHER DUPLICATION IS STRICTLY PROHIBITED. THE SPONSOR EXPRESSLY RESERVES THE RIGHT, AT ITS SOLE DISCRETION, TO REJECT ANY OR ALL PROPOSALS OR EXPRESSIONS OF INTEREST IN THE PROPOSED UNDERLYING TRANSACTION AND TO TERMINATE DISCUSSIONS WITH ANY PARTY, AT ANY TIME, WITH OR WITHOUT NOTICE. THIS CONFIDENTIAL OFFERING MEMORANDUM SHALL NOT BE DEEMED TO BE A REPRESENTATION OF THE STATE OF AFFAIRS OF THE PROPERTY OR CONSTITUTE AN INDICATION THAT THERE HAS BEEN NO CHANGE IN THE BUSINESS OR AFFAIRS OF THE PROPERTY SINCE THE DATE OF ITS PREPARATION. 2 EXECUTIVE SUMMARY Opportunity Avison Young – New York, LLC (“AYNY”) has been retained by Airo Capital Management (“Sponsor”) to identify a development partner and arrange financing for the land acquisition and development of a two-phase multifamily property, consisting of 423 units, located at 300-320 North Front Street, 300-312 North High Street, and 300 Fallsway, Baltimore, MD (“Property”). Total project capitalization is approximately $116.2MM. The Property is located in an Opportunity Zone, and an Enterprise Tax Credit Zone. Proposed Development: Very well located, to-be built, 423-unit multifamily property with parking & amenities. The Village at Fallsway is located in the heart of Baltimore City, adjacent to the Central Business District, and minutes from Johns Hopkins, The University of Maryland, and Mercy Medical Center. The property’s location is surrounded by Baltimore’s live-work-play attractions and has immediate access to major regional transportation routes. The proposed market-rate multifamily rental project will be developed in two phases and will consist of 423 rental units, 35,000 SF of commercial/medical office space, 212 parking spaces and additional amenities. The Sponsor is in-contract to acquire all parcels required for the proposed project, which is as-of-right. Market: Strong regional and local demographics trends, low vacancy, and high demand. The Property is located in downtown Baltimore, just north of Fells Point and Inner Harbor. The area is highly accessible by road, and is also near Baltimore’s Water Taxi terminal and several public transit lines. In the last 40 years, the community’s demographics have shifted considerably, as Fells Point residents have on average become younger and higher-earning. As well, notable tech firms have started to grow their footprint in Baltimore. The increased property values and urban amenities have drawn the attention of many Baltimore citizens who are seeking an up-and-coming neighborhood with unique charm and amenities. Financial: Above market returns driven by a good basis. Projected returns are strong showing an anticipated stabilized return on cost (build-to cap rate) well above current market cap rates. Levered returns on a five-year hold scenario project an IRR of approximately 19.0%, with an equity multiple of approximately 2.30x. Furthermore, there may be the potential to further enhance the returns through application of the Baltimore City Enterprise Zone Tax Credit benefit. Sponsor: Industry veterans with institutional level experience. Sources and Uses Airo Capital Management (airocapitalmanagement.com) is a Qualified Opportunity Sources Amount Per Unit % of Total Fund. The principals of Airo Capital have been working together for over 25 years Debt $ 81,373,439 $ 192,372 70.0% and have successfully acquired, managed, developed, as well as rehabbed hospitality, Equity 34,874,331 82,445 30.0% multifamily, and commercial real estate. Located in the mid-Atlantic area, they have Total Sources $ 116,247,769 $ 274,817 100.0% been principals in projects from Boston to Miami and from DC to Chicago. Uses Amount Per Unit % of Total The Village at Fallsway is their newest venture in Baltimore, MD, having previously Land Costs $ 12,515,000 $ 29,586 10.8% owned and operated a 150-unit Senior Housing apartment building next door to Hard Costs 86,562,397 204,639 74.5% John Hopkins Hospital. Soft Costs 4,594,722 10,862 4.0% Developer Fee 4,328,120 10,232 3.7% Financing, Closing, & Interest 8,247,530 19,498 7.1% 3 Total Uses $ 116,247,769 $ 274,817 100.0% PROPERTY DETAILS PROPERTY DETAILS Baltimore: Overview Located In the heart of Baltimore City, Maryland Baltimore’s location in the densely populated and economically vibrant Washington, DC – Boston corridor is a prime asset for its continued economic development. Baltimore’s downtown and its collection of attractive live-work-play neighborhoods that surround Baltimore’s destination waterfront are undergoing widespread revitalization with new investment and development reversing decades of population loss. The Property is located in downtown Baltimore, just north of the Inner Harbor. The area is highly accessible by road, and is also near Baltimore’s Water Taxi terminal and several public transit lines. The Property is adjacent to Baltimore’s Central Business District, nearby the city’s major educational and medical institutions, and surrounded by the several museums, recreational activities, hotels, restaurants, and tourist attractions. In the last 40 years, the community’s demographics have shifted considerably as residents have on-average have become younger and higher-earning. The increased property values and urban amenities have drawn the attention of many Baltimore citizens who seek up-and-coming neighborhoods with unique charm and amenities. Relative to the greater Baltimore City, the immediate area surrounding the Property has Mount Vernon seen tremendous population growth over the OLD past 10 years (5.2% total). There has been a clear TOWN demographic shift as younger and higher- Village at Fallsway earning renters are moving into the area. This can be seen by looking at the average household CENTRAL BUISNESS income surrounding the Property of $81,322, DISTRICT LITTLE which is 22% higher than the national average. ITALY FELLS Demographics INNER HARBOR POINT 1-Mile 3-Mile HARBOR EAST Canton Population 2010 43,121 271,638 FEDERAL 2020 45,364 285,099 HILL '10-'20 Growth 5.2% 5.0% Households 2010 19,383 111,946 2020 20,687 116,836 '10-'20 Growth 6.7% 4.4% 2020 Avg HH Income $ 81,322 $ 75,738 5 5 PROPERTY DETAILS Baltimore: Highlights With a growing number of research institutions, universities, government agencies, start-ups, Fortune 1000 Companies and a significant millennial migration to the waterfront, Baltimore is booming. 1. ESRI / 2. U.S. Department of Labor’s Bureau of Labor Statistics / 3. Walkscore / 4. Time Magazine / 5. PwC / CB Insights MoneyTree Report, Q4 2018 / 6. Economic and Workforce Analysis by Richard Clinch, Director, The Jacob France Institute at the University of Baltimore Merrick School of Business / 7. Forbes.com, The Top 10 Rising Cities for Startups, October 1, 2018. / 8. U.S. Department of Commerce, Bureau of the Census, 2017 American Community Survey; ranking excludes Washington D.C. / 9. US News / 10. ITIF, 2017 State New Economy Index, November 6, 2017 / 11. Bloomberg U.S. Innovation Index, December 22, 2016 / 12. SmartAsset.com, 2019 / 13. Baltimore Business Journal 6 6 PROPERTY DETAILS Baltimore: Economic Drivers Johns Hopkins Medicine Opened in 1889, JHM was ranked number one in the nation by U.S. News and World Report for 22 years. For fiscal year 2018, JHM generated $7.7 billion in operating revenues and employed 42,000 professionals. Mercy Hospital & University of Maryland Medical System