1112 Units - LoopNet...of Greater Ann Arbor’s population is within the prime renter age group of 18 to 35 years old 36% of Greater Ann Arbor’s housing units are renter occupied,

49000 Denton Road, Belleville, MI 48111 HarbourClub.berkadiarea.com

1,112 Units

a Berkshire Hathaway and Jefferies Financial Group companyEXCLUSIVE MULTIFAMILY MARKETING

KEVIN P. DILLONSenior Managing [email protected]

JASON KRUGManaging [email protected]

RICK L. VIDRIOManaging [email protected]

CHARLEY [email protected]

CARLY [email protected]

INVESTMENT ADVISORS

28411 Northwestern HighwaySuite 300South�eld, MI 48034Phone: 248.208.3460Fax: 248.646.0320www.berkadia.com

DETROIT OFFICE

INVESTMENT HIGHLIGHTS ........................................................................5

THE ASSET ...................................................................................................34

COMPARABLE PROPERTIES .....................................................................45

FINANCIAL ANALYSIS ...............................................................................54

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Employment trends are positive with over $2.16 billion of new developments in Wayne County and Ann Arbor providing over 18,700 new jobs. This is a major impact in the market. This is referenced in the following sections for Wayne County and Ann Arbor. Amazon opened two Fulfillment Center in Western Wayne County adding 2,600 new jobs in the fall of 2018. The Livonia Center is only 23 minutes and the Romulus center is just 14 minutes east of Providence at Harbour Club. See page 22 for info regarding the Romulus center. The labor market remains extremely strong.

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MARKET HIGHLIGHTS / DEMOGRAPHICS - WAYNE COUNTY SUBURBS

20.2%RENT SHARE OF WALLET

SOUTH WAYNE COUNTYSUBMARKET

(COMPARED TO 25.3% NATIONALLY)

WAYNE COUNTY BOASTS THE

LARGESTLABOR FORCE IN MICHIGAN

93.4COST OF LIVING

INDEX SCORE(COMPARED TO 100 NATIONALLY)

717.8k 164.0k 451.1k 64.8k $55.8k

The Wayne County

suburbs are home to

more than 717,880residents

Approximately 23%

of residents are in the

key renter age group,

between 18 and 35

59% of employed

suburban Wayne County

residents work in white-

collar positions

The number of

households in the Wayne

County suburbs earning

over $100,000 annually

is forecast to increase

by 30.3% by 2023,

surpassing 64,835

The median household

income is projected to

reach $55,811 by 2023,

up 15.7% from 2018

1. DETROIT WORKFORCE - WAYNE COUNTY

7


MARKET HIGHLIGHTS / DEMOGRAPHICS - WAYNE COUNTY SUBURBS

MEDIAN INCOME

2010 $47,411

2018* $48,239

2023* $55,811

Growth Rate (2018 - 2023) 15.7%

MEDIAN AGE

2010 36.6

2018* 38.3

2023* 39.0

MEDIAN HOME PRICE*

December - 2017 $164,000

December - 2018 $178,000

Growth Rate Y-o-Y 8.5%

*City of Belleville

RENT VS. OWN

Average Mortgage Payment** $1,110

E�ective Rent $812

Di�erence $298

*Projected**30-yr fixed; 20% down; 5.1% interest rate; 1.71% MI property taxes;$1,000 annual homeowner’s insurance

EMPLOYMENT GROWTH

December - 2017 765,300

December - 2018 774,200


RENT SHARE OF WALLET

National - 2018 25.3%

South Wayne County - 2018 20.2%

National - 2023* 27.1%

South Wayne County - 2023* 19.2%

*ProjectedAnnual Rent / Median Household Income

1. DETROIT WORKFORCE - DETROIT MARKET


MARKET HIGHLIGHTS / DEMOGRAPHICS

1ST 35.3MOST EDUCATED

METRO INTHE U.S.

MEDIAN AGEOF RESIDENTS

74% OF WORKERS ARE IN

WHITE-COLLARPOSITIONS METROWIDE

376.5k 122.2k 107.0k 56.5k $68.1k

Greater Ann Arbor’s

population is forecast

to grow 3.7% over

the next five years to

376,523 residents

53% of residents age

25 and older hold a

bachelor's degree or

higher, compared to

30% nationally

Approximately 29%

of Greater Ann Arbor’s

population is within the

prime renter age group

of 18 to 35 years old

36% of Greater Ann

Arbor’s housing units

are renter occupied,

compared to 31%

nationally

The metro area’s median

household income is

projected to reach

$68,126 by 2023, up

3.0% from 2018

1. DETROIT WORKFORCE - ANN ARBOR MARKET

9


MARKET HIGHLIGHTS / DEMOGRAPHICS

MEDIAN INCOME

2010 $60,181

2018* $66,171

2023* $68,126

Growth Rate (2018 - 2023) 3.0%

MEDIAN AGE

2010 33.6

2018* 35.3

2023* 36.8

MEDIAN HOME PRICE

November - 2017 $328,584

November - 2018 $346,396


RENT VS. OWN

Average Mortgage Payment** $2,081

Eective Rent $1,116

Di�erence $965

*Projected**30-yr fixed; 20% down; 5.1% interest rate; 1.71% MI property taxes;$1,000 annual homeowner’s insurance

EMPLOYMENT GROWTH

November - 2017 226,700

November - 2018 229,900


RENT SHARE OF WALLET

National - 2018 25.3%

Ann Arbor Metro - 2018 20.2%

National - 2023* 27.1%

Ann Arbor Metro - 2023* 25.7%

*ProjectedAnnual Rent / Median Household Income

DETROIT WORKFORCE - ANN ARBOR

1


EMPLOYMENT TRENDS

DECEMBER2018 8,900 jobswere created across the

metro division, a 1.2% Y-o-Y

increase

WAYNE COUNTY, MI

LARGEST EMPLOYERS

Ford Motor Company 48,000

General Motors Co. 37,710

Henry Ford Health System 17,610

Rock Ventures 16,620

Ilitch Companies 16,570

Trinity Health Michigan 14,680

Ascension Michigan 11,890

Detroit Medical Center 10,560

U.S. Postal Service 9,860

State of Michigan 9,350

Source: Detroit Regional Chamber - 2017

2. EMPLOYMENT TRENDS AND DEVELOPMENT - WAYNE COUNTY

11


AUTOMOTIVE

FORD MOTOR COMPANY HEADQUARTERS 85,710Ford & GM Employees

$63,000+Average Annual Salary

$57 billionEconomic Impact

As the largest employer in Wayne County with 48,000 employees, Ford Motor Company has

a significant presence in the area with the Ford World Headquarters, Regent Court Marketing

Center, the Research and Engineering Center, and the Ford River Rouge Complex in Dearborn.

The massive 600-acre industrial park contains six Ford factories, as well as steel-making

operations run by AK Steel. General Motors operates three production facilities throughout

Wayne County including Romulus Powertrain, Inland Fisher Guide, and Hamtramck Assembly.

HEALTH CARE

ST. JOSEPH MERCY - CANTON 120,300Jobs Supported

Countywide

$8.9 billionTotal Wages & Salaries

$11.1 billionEconomic Impact

Wayne County is Michigan’s health care industry hub, with four of the ten largest companies

being health care related. Those companies including Detroit Medical Center and Henry Ford

Health System employ 54,500 county residents. In Dearborn, the 632-bed Beaumont Hospital

supports an additional 6,170 medical professionals and was named one of the “Best Hospitals in

Michigan.” Canton is home to satellite campuses for the Henry Ford Health System, St. Joseph

Mercy Health, and Beaumont Medical.


1


INFORMATION TECHNOLOGY

GM AUTONOMOUS VEHICLE DEVELOPMENT 63,000Wayne County

Jobs Supported

$82,700Median Annual Salary

The convergence of automotive manufacturing and software development is transforming

Wayne County into the information technology (IT) hub of Michigan. Nearly 63,000 industry

professionals are located in the area with employment growth exceeding 30% since 2009,

outpacing the national growth rate over the same period, a trend that is expected to continue

through 2025. Wayne County institutions of higher learning award over 300 computer-and-IT

related degrees and certifications annually, with new graduates earning over $50,000 annually.

AVIATION / TRANSPORTATION

DETROIT METROPOLITAN - WAYNE COUNTY AIRPORT $10.2 billionEconomic Impact

35.2 millionPassengers Served

in 2018

86,000Jobs Supported

$684 millionCommitted to Capital

Improvements

Located in Romulus, Detroit Metropolitan-Wayne County Airport (DTW) is the major air

transportation provider for Wayne County residents. The 18th-busiest airport in the nation, DTW

served over 35.2 million passengers in 2018 and handled over 434 million tons of cargo year to

date. DTW supports over 86,000 metro Detroit jobs and generates an economic impact of over

$10.2 billion for the region. The airport has over $684 million committed to capital improvement

projects through 2021.


13


CONSTRUCTION AND DEVELOPMENT

FORD DEARBORN CAMPUS MODERNIZATION

$1.2 billionInvestment

7.5 millionSF of Development

Ford Motor Company is consolidating their workers in Dearborn into two

locations on one sprawling campus that will encompass the construction and

renovation of more than 7.5 million square feet. It is anticipated the project will

take more than a decade to build out. Construction of the new product campus

at the Ford Research and Engineering Center is underway and will double the

center’s current employee count to 24,000 when completed in 2023-24. The

second project around Ford World Headquarters will break ground in 2021 with

scheduled completion in 2026. This phase will include a 700,000-square-foot

design center, outdoor space, and a Ford showroom and event venue.

SUBARU TECH CENTER

$48.2 millionInvestment

100Permanent Jobs Created

Looking to compete with companies like Toyota, Nissan, and Hyundai-Kia, who

all have technology development centers in Wayne County, Subaru will be

investing up to $48.2 million to build their own center in Van Buren Township.

The Subaru Tech Center will begin as a 60,000-square-foot facility with 100

employees but could expand to up to 200,000 square feet on 76-acres by

2022. The gradual increase of the center would mirror Nissan’s Farmington

Hills tech center, which opened in 1988 and now employs over 1,200 after $250

million in expansion projects over the past 20 years. Subaru has enjoyed steadily

increasing sales in the United States since 2017, and automotive tech centers

often grow into production support and development facilities.


14


ECONOMIC AND DEMOGRAPHIC OVERVIEWBERKADIA

CONSTRUCTION AND DEVELOPMENT - WAYNE COUNTY

FORD FLAT ROCK ASSEMBLY PLANT

$700 millionInvestment

700Permanent Jobs

In January 2017, Ford Motor Company announced plans to invest $700 million

to expand its Flat Rock Assembly Plant located approximately five miles south

of Woodhaven. The expansion of the plant will create 700 new jobs at the

plant, bringing the total number of employees at the facility to over 3,900. New

vehicles produced at the Flat Rock plant will include Ford’s first fully electric

sport utility vehicle that will make its debut in 2020, and a hybrid autonomous

vehicle that is scheduled to be released in 2021. The announcement is part of

Ford’s plan to invest $1.2 billion into its Michigan factories including $850

million for the Michigan assembly plant in Wayne, as the company has begun

production for the rerelease of the Ford Ranger and Ford Bronco models.

KINGFA SCIENCE AND TECHNOLOGY

$60 millionInvestment

150New Permanent Jobs

Kingfa Science and Technology Ltd. is investing $60 million to expand

operations at its facility in Canton Township. The investment will enable the

company to expand its payroll from just over 25 to over 175 employees by

2020. Located on Michigan Avenue, the company utilizes plastic compounds to

make materials for injection molding. The Majority of the company’s product is

distributed to local automobile manufacturing facilities. Demand increased at

Kingfa’s Canton facility as production of automobiles has steadily increased in

Wayne County over the past couple of years.


15


METRO EMPLOYMENT TRENDS

Employment Trends

NOVEMBER2018

NOVEMBER2018

2.6%

3,200 jobs

the metro’s monthly

unemployment rate was

down 70 bps annually

were created in the Ann

Arbor metro area, a 1.4%

Y-o-Y increase

ANN ARBOR, MI MSA

LARGEST EMPLOYERS

University of Michigan & Health System 49,120

Trinity Health 6,880

General Motors Milford Proving Grounds 5,500

VA Ann Arbor Health System 2,700

Ann Arbor Public Schools 1,930

Faurecia North America 1,660

Eastern Michigan University 1,630

Washtenaw Community College 1,450

Integrated Health Associates (IHA) 1,390

Washtenaw County 1,250

Sources: SPARK Ann Arbor Top Employers (January 2018); Ann Arbor Public Schools; University of Michigan

2. EMPLOYMENT TRENDS AND DEVELOPMENT - ANN ARBOR

16


HEALTH CARE

TECHNOLOGY

MICHIGAN MEDICINE: UM ACADEMIC MEDICAL CENTER

THOMSON REUTERS

Ann Arbor’s health care industry generates more than $2.8 billion in revenue from more

than 1,300 establishments and 24,100 employees. The University of Michigan Health System,

the largest employer in the region, is made up of three hospitals, 40 health centers, and 120

outpatient clinics. The VA Ann Arbor Healthcare System employs about 2,460 residents and

boasts an annual research budget of $10.6 million. UM’s research budget of nearly $1.5 billion is

the second largest in the country.

The technology industry is making significant strides in the Ann Arbor region as a result of local

universities graduating more than 550 students annually with degrees in computer engineering,

computer science, and computer information systems. Over 300 local companies employ more

than 7,000 residents in every aspect of software and IT. The tech sector is attributed with driving

the downtown o©ce space vacancy rate to a historic low of 2.1%, down 150 basis points from

2015, with companies such as Barracuda Networks and Google anchoring the downtown.

$2.8 billionin Revenue from Health

Care Industry

24,100Employees

$1.5 billionUM Research Budget

$74,190Annual Mean Wage

7,000+Employees

300+Local Technology

Companies

550Annual Computer

Science Graduates



17


AUTOMOTIVE

LIFE SCIENCES

TOYOTA TECHNICAL CENTER

UM COLLEGE OF PHARMACY

Washtenaw County is home to more than 100 automotive firms employing more than 8,200

people. Greater Ann Arbor and the University of Michigan are at the forefront of the most

innovative research in the automotive industry. The area is host to autonomous vehicle test sites,

the American Center for Mobility and Mcity, and home to the Center for Automotive Research

and the U-M Transportation Research Institute. Over the next four years, the Toyota Research

Institute will grant the University of Michigan $22 million to boost research and development.

Ann Arbor’s life sciences industry includes more than 100 firms and 3,200 employees. The

University of Michigan received $832 million in research funding from the federal government,

$502 million of which came from the National Institutes of Health (NIH), equating to 56% of

their total research funding. The University houses four large research institutes, and in 2016, U-M

launched the MTRAC for Life Science Innovation Hub with an initial operating budget exceeding

$4 million.

$22 millionResearch Funding from

Toyota

100+Automotive Firms

8,200Employees


$502 millionin Research Funding

from NIH

3,200Industry Employees

100+ Local Companies



1



UNIVERSITY OF MICHIGAN AMERICAN CENTER FOR MOBILITY

$430 million+in Development

$135 millionProject

690,000+SF Campus Wide

500-acreSite

The University of Michigan leads the region in construction activity with more

than 20 active projects under construction or in the planning stages. Major

projects around the university include the following:

n Dearborn Engineering Lab Building - $90 million, 123,000 square feet,

opening in summer 2020

n Stephen M. Ross Athletics Facility - $168 million, 280,000 square feet,

completed in the winter of 2018

n Ford Motor Company Robotics Building - $75 million, 140,000 square feet,

estimated completion in the winter of 2020

n Alexander G. Ruthven Museum - $100 million, 150,000 square feet, opened

in the fall of 2018

The historic Willow Run site in Ypsilanti Township is being redeveloped as The

American Center for Mobility and opened its first phase in December 2017.

The revamped facility is one of 10 national proving grounds for the research,

development, and implementation of driverless vehicles. The multiphase

development will give manufacturers a variety of controlled testing environments

and is expected to generate more growth in the automotive and mobility

industry, regionwide. The first users of the $135 million project on the 500-

acre site are Visteon and Toyota. Phase II of the development got underway in

spring 2018, featuring an urban driving environment, followed by the center’s

headquarters, and a technology park for users.

2. EMPLOYMENT TRENDS AND DEVELOPMENT- ANN ARBOR

19



NEXIENT ANN ARBOR HOTELS

$4.2 millionInvestment

$50 millionTotal Investment

300Total Jobs Created

350+New Hotel Rooms

Silicon Valley company Nexient is looking to expand their technology hub in Ann

Arbor. The $4.2 million investment will cover improvements to infrastructure,

equipment, and hiring 300 people over the next three years. After the

company’s recent facility expansion, Nexient currently occupies 75,000 square

feet of space and has enough room to accommodate up to 600 employees.

Ann Arbor was the more attractive option for the expansion for its quality of life

and existing talent pool. Today, the company continues to serve Fortune 500

companies such as Williams Sonoma.

Three hotels in Ann Arbor are set for construction or are in the final stages of

the approval process. In June 2017, the city council approved a 114-room, $6

million Holiday Inn Express that will be built between the recently completed

Staybridge Suites and Hyatt Place hotels on State Street. The 162-room hotel

dubbed The Glen broke ground downtown in late 2018. The hotel is part of a

$40 million mixed-use project that will include ground-floor restaurants and

retail space, with a four-level underground parking garage along Glen Avenue.

A 107-room Homewood Suites Hotel, also located on State Street, is awaiting

city council approval.

EMPLOYMENT TRENDS AND DEVELOPMENT - ANN ARBOR


4 5

An announcement was made on February 26, 2019 confirming Fiat ChryslerAutomobiles investment of $4.5 billion in five of its existing plants, with additionalplans to work with the city of Detroit to build a new assembly plant within city limits.The newly proposed projects are anticipated to create nearly 6,500 new jobs. Thebenefits are far-reaching. With the influx of employees comes development:housing, restaurants, shops, and myriad other businesses will be needed to supportthe massive growth.

Development plans include investing $1.6 billion to convert the two plants existingat the Mack Avenue Engine complex into a future assembly site for the next JeepGrand Cherokee, the all-new three-row Jeep SUV and plug in hybrid (PHEV)models. An anticipated 3,500 new jobs will be added to support production at thefirst new plant to be built in the city of Detroit in nearly 30 years. Construction of thenew Detroit facility will begin by the end of Q2 2019 with the first three-row vehiclesexpected to roll off the line by the end of 2020, followed in the first half of 2021 bythe all-new Grand Cherokee.

Also announced was the creation of an additional 1,100 jobs at the Jefferson NorthAssembly Plant as part of a $900 million investment to retool and modernize thefacility to buld the Dodge Durango and next generation Jeep Grand Cherokee.Another $119 million investment will relocate the Pentastar engines currently built atthe Mack Avenue Engine Compex to the Dundee Engine Plant.

FCA also confirms the investment at the Warren Truck Assembly Plant to retool forproduction of the all-new Jeep Wagoneer and Grand Wagoneer, announced in2017, along with their electrified counterparts, would increase to $1.5 billion.Launching production in early 2021, the plant would continue building the Ram1500 classic in addition to the new Jeep models. This investment would support thecreation of another 1,400 new jobs.

4 54 5

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4


RENT / OCCUPANCY

EFFECTIVERENT

$812in the fourth quarter of 2018, up

2.9% from one year prior

OCCUPANCYRATE 96.5%

through December 2018, up 30bps Y-o-Y

Limited construction activity in the South Wayne County apartment submarket

has aided an increase in the average occupancy rate over the past five years.

Development in the submarket has totaled just over 200 units, all of which

came online in 2016 and 2017. When paired with net leasing activity averaging

150 units per year since 2013, the average occupancy rate has increased

from 94.6% in 2013 to 96.5% at the end of 2018. The submarket’s prime

location, which includes Interstates 275 and 94, a�ords residents quick access

to employment nodes in Dearborn, Ann Arbor, and Romulus. Shifting renter

demographics in areas like Canton, Belleville, and Westland help set the stage

for increased demand in the submarket, as more than half the submarket’s

inventory lies within these areas, which also contain roughly 60% of the

submarket’s residents. Despite an a�ordable single-family home market, the

two largest demographic groups in the submarket, Baby Boomers and Gen

Xers, are choosing multifamily rentals instead of purchasing single-family

homes.

E�ective rent growth in the submarket has seen substantial gains in recent

years, increasing 2.9% annually to $812 per month as of the end of 2018.

Since 2013, e�ective rent has increased by roughly 3.2% annually, making the

South Wayne County submarket one of the more consistent performers in

the Detroit metro market. With e�ective rent roughly 18.9% below the metro

average, South Wayne County is one of the more a�ordable submarkets in

Greater Detroit. With a lack of new supply and one of the lowest e�ective

rents in the market, future growth in the submarket will likely not be hindered

in the near term.

SOUTH WAYNE COUNTYAPARTMENT SUBMARKET

3. FAVORABLE LIFESTYLE AND RENTAL MARKET - WAYNE COUNTY

5


EDUCATION

HIGHEREDUCATION 123,000

students in institutions of higher

learning countywide

DEGREES ANDCERTIFICATIONS 380+

o�ered at Wayne State University

With more than 123,000 students attending area colleges and universities, Wayne County

is home to nearly 25% of all students enrolled at institutions of higher learning throughout

Michigan.

With an enrollment upwards of 27,000, Wayne State University (WSU), located in midtown

Detroit, is one of the largest universities in Michigan. The university is distinguished as a

Carnegie-rated research institution, with post-graduate programs including law and medical

schools and over 380 degree and certification programs.

Located on the former estate of Henry Ford, the University of Michigan-Dearborn

(UMD) supports 1,080 sta� and faculty positions and boasts an enrollment of just over

9,130 students. UMD o�ers 115 undergraduate and graduate degree programs across four

academic colleges.

University of Detroit-Mercy (UDM) has three campuses in Wayne County, one located in the

residential northwest area of Detroit and two in the downtown area. Combined, all three

campuses are home to more than 4,800 students.

WAYNE COUNTY, MI

LARGEST HIGHER EDUCATION

Wayne County Community College District 28,680

Wayne State University 27,090

Henry Ford Community College 26,430

Schoolcraft College 18,560

University of Michigan - Dearborn 9,130

University of Detroit - Mercy 4,880

Madonna University 4,400

Davenport University 2,500

Marygrove College 1,100

Source: Listed University Websites


6


LIFESTYLE AND ENTERTAINMENT

DOWNTOWNBELLEVILLE 50+

shops & restaurants

FAIRLANETOWN CENTER 1.2m

SF shopping center

The Wayne County suburbs have some of the most active downtowns

in Michigan, many of which have great festivals and activities including

shopping and dining at locally owned establishments that draw in people

from all over Southeastern Michigan.

Nestled on the shores of Belleville Lake, the City of Belleville features a

traditional American downtown, which is home to over 50 restaurants and

retail establishments. The city has four major parks which feature boat

landings, picnic areas, playgrounds, and athletic courts. Downtown Belleville

also hosts activities over 200 days per year including a Polar Plunge, Farmers

Market, and a classic car show each Monday between June and September.

Van Buren Township o�ers a number of recreational programs for residents

of all ages. The township operates five parks, including Van Buren Park, which

features a beach area, picnic shelters, and concert pavilion. The Belleville

Area Museum features small-scale replicas of many historical buildings that

were once located in the tri-community area of Belleville, Sumpter, and Van

Buren Townships.

Among the largest of the suburban Wayne County cities, Dearborn is home

to nearly 100 restaurants, bars, and shopping destinations in the downtown

area. The Fairlane Town Center spans over 1.2 million square feet and 150

shops and services. One of the largest malls in Michigan, the superregional

shopping center is home to prominent retailers including Macy’s, JCPenney,

MAC, and AMC Theaters.

FAIRLANE TOWN CENTER


7


TRANSPORTATION - WAYNE COUNTY

DTWAIRPORT 35.2m

passengers served in 2018

SMARTPASSENGERS 36k

average weekday ridership

Wayne County o�ers immediate access to Canada via the Ambassador

Bridge and the Detroit-Windsor Tunnel. Major interstates include I-94, I-96,

and I-75.

Major air transportation for Wayne County residents is provided by the

Detroit Metropolitan Wayne County Airport (DTW). DTW served over 35.2

million passengers in 2018, an annual increase of 1.4%. The airport directly

and indirectly supports over 86,000 jobs and generates an economic impact

of over $10.2 billion

Public transit is provided by the Detroit Department of Transportation and

Suburban Mobility Authority for Regional Transportation (SMART), o�ering

44 fixed-route bus lines around Wayne County. The Detroit People Mover

(DPM) is a light rail system operating on an elevated loop in Detroit’s Central

Business District, and the QLINE light rail began operations in May of 2017,

running north through the city on Woodward Avenue.

DETROIT METROPOLITAN WAYNE COUNTY AIRPORT

Sources: Berkadia; Tetrad; U.S. Census Bureau; U.S. Bureau of Labor Statistics; City of Southgate; Wayne State University;Wayne County Michigan; Detroit Regional Chamber; Michigan Bureau of Labor Market Information and Strategic Initiatives;Curbed Detroit; Detroit Free Press; District Detroit; Packard Plant Project; Michigan State Medical Society; Michigan School Data; University of Michigan - Dearborn; Henry Ford Community College; Wayne County Community College; Crain’sDetroit Business; Down River Association of Realtor’s; Michigan Association of Realtor’s; U.S. Mortgage Calculator; Forbes; Wallethub; Nerdwallet; Axiometrics



RENT / OCCUPANCY - ANN ARBOR

EFFECTIVERENT

OCCUPANCYRATE

$1,116 98.2%through December of 2018, up

4.1% from one year prior through 4Q18, up 20 basis points

year over year

As the largest employer in the area and with 46,720 students enrolled, the

University of Michigan (UM) is a driving force behind the metro’s solid

apartment fundamentals. The university o�ers a limited number of residential

units for its students, leaving 78% of the student body in need of o�-campus

housing. Additionally, UM’s abundance of educational and professional

resources attract major tech and research companies to the metro area,

including Google and Nexient. With a highly skilled workforce, low cost of

living, and 29% of the population within the key renter age group of 18 to 35

years old, the Ann Arbor metro’s economy is consistently strong, boasting a

median household income 16.1% above the national average. However, recent

home appreciation increased 5.4% over the past year, making homeownership

less obtainable. Traditionally, occupancy rates in Ann Arbor’s apartment

market remain high due to the metro’s young population and job market

growth outpacing the national average.

Through December of 2018, e�ective rent in the Ann Arbor metro apartment

market was $1,116 per month, up 4.1% from the previous year. E�ective rent in

this market is projected to reach $1,147 per month by year-end 2019, equating

to an additional annual increase of 3.7%.

Bolstered by elevated leasing activity, the average occupancy rate in this

market was 98.2% through the end of 2018, up 20 basis points year over

year. An influx of new units and a projected decrease in demand for 2019 is

expected to push the occupancy rate in the Ann Arbor market down to a still-

healthy 97.0% by the end of 2019.

ANN ARBOR METRO APARTMENT MARKET

3. FAVORABLE LIFESTYLE AND RENTAL MARKET - ANN ARBOR

9


EDUCATION - ANN ARBOR

HIGHEREDUCATION

RESEARCHEXPENDITURES78,600+ $1.5b

students metrowide awarded to the University of

Michigan

The University of Michigan - Ann Arbor (UM) is the largest employer in Ann Arbor,

and the number one public research university according to the National Science

Foundation. In fall 2018, UM enrolled a record 46,720 students, up 1.6% annually.

The university o�ers 19 top-ranked schools and colleges, generates nearly $1.5

billion in research expenditures, and had 444 new invention reports in fiscal

year 2017. The University's football team draws a crowd larger than 107,600 for

their home games and produces an economic impact of more than $822 million

in Washtenaw County.

Eastern Michigan University (EMU), located in Ypsilanti, is the fifth-largest

university in Michigan. EMU employs about 1,630 faculty and sta� who educate

more than 20,300 students. More than 200 undergraduate and 150 graduate

degree programs are o�ered across seven schools and colleges.

The area is also home to Washtenaw Community College, which welcomes

approximately 12,350 students annually and o�ers more than 100 programs.

Ann Arbor Public Schools serve 18,140 total students, split among 32 elementary,

middle, and high schools in Greater Ann Arbor.

MICHIGAN STADIUM


3


LIFESTYLE AND ENTERTAINMENT - ANN ARBOR

STATE ST.DISTRICT

CRISLERCENTER100+ 12,707

shops and restaurants seat capacity

In addition to being a bustling university town, Ann Arbor is a culinary hotspot

and tech hub that features one of the most walkable downtowns, which supports

a world class arts and culture scene.

Anchored by the University of Michigan Museum of Art (UMMA), the Ann Arbor

art and culture scene is second to none. UMMA welcomes over 250,000 annual

visitors and is one of the largest university art museums in the nation. The venue

features roughly 19,000 works of art spanning cultures, eras, and media. Ann

Arbor’s Michigan Theater is the go-to place for screenings of independent films,

stage productions, and live music in an intimate 1,700-seat setting. Every July

the Ann Arbor Art Fair brings thousands of artists to downtown Ann Arbor to

showcase their work, transforming downtown into one of the largest art galleries

in the Midwest.

A foodie paradise, Ann Arbor is home to over 300 restaurants that have

something to please even the most refined palate. Zingerman’s Deli is perhaps

the most famous restaurant in Ann Arbor o�ering a wide variety of sandwiches,

plates, and even specialty groceries. The State Street District is home to over 100

shops and restaurants including farmers markets and pet-friendly outdoor patios.

For the sports enthusiast, the University of Michigan supports 27 Division One

athletic teams ranging from Olympic sports to football, hockey, and basketball.

Michigan Stadium boasts a capacity of 107,600 for UM football games, while the

Crisler Center supports just over 12,700 spectators for the Wolverine basketball

and hockey programs.

STATE STREET DISTRICT


31


TRANSPORTATION

AAATA /THE RIDE

DTWAIRPORT6.6m 34.7m

passengers served annually passengers served annually

An extensive transportation network leading in and out of Metro Detroit

serves the region. Two major highways span the Ann Arbor metro area, I-94

and U.S. Highway 23. Other highways in the region include U.S. 12, Michigan

Highway 14, M-17, M-52, and M-53.

Local air travel is o�ered at Ann Arbor Municipal Airport and Willow

Run Airport, a 2,600-acre freight, corporate, and general aviation airport,

providing 210,000 flights annually, and transporting more than 200

million pounds of cargo. Major commercial air travel is available at Detroit

Metropolitan Wayne County Airport (DTW), located approximately 25 miles

east of Ann Arbor. DTW serves about 34.7 million passengers annually and

o�ers nonstop service to nearly 140 destinations.

The Ann Arbor Area Transportation Authority (AAATA / The Ride) serves

6.6 million riders per year throughout the city and neighboring Ypsilanti.

ANN ARBOR MUNICIPAL AIRPORT

Sources: Berkadia; Tetrad; U.S. Census Bureau; U.S. Bureau of Labor Statistics; Fortune/Money.CNN.com; Forbes; Moody’s; Wikipedia; Axiometrics; Ann Arbor SPARK; City of Ann Arbor; Ann Arbor Chamber of Commerce; Washtenaw County;Eastern Michigan State University; Ann Arbor Convention and Visitors Bureau; Washtenaw Development Council; DiscoverOurTown.com; U.S. Department of Housing & Urban Development; State of Michigan; Ann Arbor Area Board of Realtors; Michigan Live LLC; University of Michigan; Washtenaw Community College; Peterson’s; AnnArbor.com; Detroit Free Press; PR Newswire; The Detroit News; M2 Communications; Crain Communications; MHN Online; MLive.com; and The Baron;Ann Arbor Association of Realtors; Mortgage Calculator; Yahoo Finance; Michigan Peninsula News; AreaDevelopment.com


3


33


4 75

3 6retur of i vest e t

1average re t pre iu

4 1

34

T ASS T


Bldgs 1-35 -

Bldgs 36-44 -Electric Forced Air Furnaces

(Magic Pak) / Central AC

36



■ ■ ■ ■ ■ ■ ■ ■ ■

3

■ Units Apartment Homes


39


■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

4

■ 9 Hole Golf Course On Site


41


4

L LANS


PROVIDENCE AT HARBOUR CLUB

NEIGHBORHOOD QUICK FACTS

BELLEVILLE, MIDEMAND DRIVER

or Motor

FROM THE

PROPERTY0. mi

JOBS

SUPPORTED

0.

JOBS

SUPPORTED

7.1mi

2.4k

DEMAND DRIVER

Visteon Corporation - Headquarters

FROM THE

PROPERTY

DEMAND DRIVER

Detroit Metropolitan Airport

FROM THE

PROPERTY

JOBS

SUPPORTED

10.1mi

1.6k

$191.8kMedian Housing Unit Value

(Within Three Miles)

$50.3kMedian Household Income


4.6%County Unemployment Rate

(November 2018)

29.8kPopulation


36%Renter Occupied Housing Units


DEMAND DRIVER

o e nt re

FROM THE

PROPERTY9. mi

JOBS

SUPPORTED1

JOBS

SUPPORTED

9.9mi

k

DEMAND DRIVER

A a on M ltiple Mi i an o ation

FROM THE

PROPERTY

DEMAND DRIVER

ni er it o Mi i an an ealt te

FROM THE

PROPERTY

JOBS

SUPPORTED

1 . mi

9. k

43


DEMAND DRIVER

ni er it o Mi i an

FROM THE

PROPERTY1 .1mi

JOBS

SUPPORTED

DD.

JOBS

SUPPORTED

DD

.9mi

7. k

7

DEMAND DRIVER

a ne tatea ni er it

FROM THE

PROPERTY

DEMAND DRIVER

Eastern Michigan University

FROM THE

PROPERTY

JOBS

SUPPORTED

STUDENTS

ENROLLED

7.2mi

1.6k

20.3k

1.9

44


45


L AL INTS INT ST

46

A A L TI S


Property CityDistance (mi.)from Subject Units Built Occupancy

Avg.SF

AskingRent

Rent /SF

Harbour Club Belleville 1112 1972 90.0% 905 $885 $0.98

Lake Shore Ypsilanti 2.37 1027 1969 97.0% 901 $991 $1.10

Westlake Belleville 2.08 510 2003 98.0% 910 $1.065 $1.17

Southport Belleville 2.87 768 1991 97.7% 823 $858 $1.04

Green Meadows Belleville 1.32 144 1995 96.0% 928 $968 $1.04

Belleville Pointe Belleville 1.46 120 1976 93.0% 969 $929 $0.96

Totals / Averages* 0.90 2.02 514 96.0% 884 $962 $1.09

1

2

4

3

5

S

A A L NTAL TI S

4


S

49000 Denton Road, Belleville, MI 48111

Units: 1112

Built: 1972

Occupancy: 89.6%

Fully Equipped Kitchen Lakefront Living* Free Tanning

Faux Hardwood Floors* Business Center On-site Cardio Fitness Center

Washer / Dryer * Relaxing Sauna Sparkling Swimming Pool

Golf Course Views* Clubhouse with FullyEquipped Kitchen andFireplace

Laundry Facilities

* In Select Homes

HARBOUR CLUB

Property Summary

Unit Mix & Rent Schedule

Unit Mix Breakdown

1 Bed / 1 Bath 47%

2 Bed / 2 Bath 53%47%

53%

Amenities

49

A A L NTAL TI S

UNITS TYPE SF ASKING RENT RENT / SF NOTES

3 0/1.00 505 $665 $1.32 Studio

374 1/1.00 805 $783 $0.97 Huron

144 1/1.00 835 $878 $1.05 Erie

429 2/2.00 945 $928 $0.98 St. Clair

162 2/2.00 1,100 $1,019 $0.93 Superior1,112 905 $885 $0.98


1

2500 Lakeshore, Ypsilanti, MI 48198

Distance (mi): 2.37

Units: 1027

Built: 1969

Occupancy: 97%

NITS TY S AS IN NT NT S N T S

96 0/1.00 555 $869 $1.57

96 1/1.00 700 $766 $1.09

96 1/1.00 710 $776 $1.09

116 1/1.00 800 $841 $1.05

84 1/1.00 820 $861 $1.05

96 1/1.00 965 $962 $1.00

128 2/1.00 970 $1,066 $1.10

82 2/2.00 1,057 $1,245 $1.18

82 2/2.00 1,086 $1,036 $0.95

79 2/2.00 1,115 $1,111 $1.00

36 3/2.00 1,250 $1,538 $1.23

36 3/2.00 1,360 $1,587 $1.17

1027 901 $991 $1.10

Fully Equipped Kitchen Sand Volleyball Court Car Wash Area with Vacuum

Modern Light Fixtures Boat Docks and Storage Free Fitness Classes

Faux Hardwood Floors Pet Wash and Bark Parks Tennis Court

Business Center Community Garden Two Sparkling Heated Pools

LAKE SHORE

Property Summary


Unit Mix Breakdown

Studio / 1 Bath 9%

1 Bed / 1 Bath 48%

2 Bed / 1 Bath 12%

2 Bed / 2 Bath 24%

3 Bed / 2 Bath 7%

9%

24%

12%48%

Amenities

A A L NTAL TI S

5


2

10341 Westlake Circle , Belleville, MI 48111

Distance (mi): 2.08

Units: 510

Built: 2003

Occupancy: 98%


169 1/1.00 770 $968 $1.26

1 1/1.00 850 $950 $1.12

170 2/1.00 940 $1,068 $1.14

170 2/2.00 1,020 $1,158 $1.14

510 910 $1,065 $1.17

Fully Equipped Kitchen Fitness Center

Washer / Dryer Swimming Pool

Lakefront Patio / Balcony Pet Friendly

Clubhouse

WESTLAKE

Property Summary


Unit Mix Breakdown

1 Bed / 1 Bath 33%

2 Bed / 1 Bath 34%

2 Bed / 2 Bath 33%

33%33%

34%

Amenities

51

A A L NTAL TI S


3

10830 Oak Lane, Belleville, MI 48111

Distance (mi): 2.87

Units: 768

Built: 1991

Occupancy: 97.7%


408 1/1.00 755 $805 $1.07 sq.ft 740-770

360 2/1.00 900 $918 $1.02

768 823 $858 $1.04

Fully Equipped Kitchen Cathedral Ceilings Clubhouse

Washer / Dryer Carports Available Pet Friendly

Private Entry Scenic Lake Views

Lakefront Balcony / Patio Swimming Pool

SOUTHPORT

Property Summary


Unit Mix Breakdown

1 Bed / 1 Bath 53%

2 Bed / 1 Bath 47%47%

53%

Amenities

A A L NTAL TI S

5


4

11551 Quirk Road, Belleville, MI 48111

Distance (mi): 1.32

Units: 144

Built: 1995

Occupancy: 96%


48 1/1.00 770 $820 $1.06

72 2/2.00 957 $985 $1.03

24 3/2.00 1,159 $1,210 $1.04

144 928 $968 $1.04

Private Entry Fully Equipped Kitchen Pet Friendly

Patio Washer / Dryer Hookups BBQ / Picnic Area

Walk-In Closets Clubhouse Playground

Central Heat and AirConditioning

Sparkling Outdoor Pool withSundeck

Internet Cafe with WiFi

GREEN MEADOWS

Property Summary


Unit Mix Breakdown

1 Bed / 1 Bath 33%

2 Bed / 2 Bath 50%

3 Bed / 2 Bath 17%

33%

17%

50%

Amenities

53

A A L NTAL TI S


5

46020 Lake Villa Drive, Belleville, MI 48111

Distance (mi): 1.46

Units: 120

Built: 1976

Occupancy: 93%


20 1/1.00 730 $765 $1.05

70 2/2.00 930 $870 $0.94

30 3/2.00 1,220 $1,175 $0.96

120 969 $929 $0.96

Gourmet Kitchen Updated Light Fixtures Swimming Pool with Deck

Pantry* Walk-In Closets Laundry Facility in EveryBuilding

Balcony / Patio Central Heat

Additional Storage Space Central Air Conditioning

BELLEVILLE POINTE

Property Summary


Unit Mix Breakdown

1 Bed / 1 Bath 17%

2 Bed / 2 Bath 58%

3 Bed / 2 Bath 25%

17%25%

58%

Amenities

A A L NTAL TI S

54


ST

UD

IO$1,000

$875

$750

$625

$500

$375

$250

$125

$0

Har

bour

Clu

b |

$660

Lake

Sho

re |

$86

9

ON

E B

ED

$1,000

$875

$750

$625

$500

$375

$250

$125

$0

Har

bour

Clu

b |

$749

Belle

ville

Poi

nte

| $7

65

Sout

hpor

t | $

805

Gre

en M

eado

ws

| $8

20

Lake

Sho

re |

$84

1

Wes

tlake

| $

968

TW

O B

ED

$1,200

$1,050

$900

$750

$600

$450

$300

$150

$0

Belle

ville

Poi

nte

| $8

70

Har

bour

Clu

b |

$877

Sout

hpor

t | $

918

Gre

en M

eado

ws

| $9

85

Lake

Sho

re |

$1,

109

Wes

tlake

| $

1,11

3

Average$869 Average

$845

Average$1,032

55

A A L NTAL TI S

INAN IAL ANALYSIS


57

NIT IX A IN AN X NS S

Units Type Unit SF Total SFActual

RentMonthly

Mkt RentAnnual

Mkt Rent Rent/SF3 Studio 505 1,515 $665 $1,995 $23,940 $1.32

374 1 Bed / 1 Bath 805 301,070 $783 $292,842 $3,514,104 $0.97144 1 Bed / 1 Bath 835 120,240 $878 $126,432 $1,517,184 $1.05429 2 Bed / 2 Bath 945 405,405 $928 $398,112 $4,777,344 $0.98162 2 Bed / 2 Bath 1,100 178,200 $1,019 $165,078 $1,980,936 $0.93

1112 905 1,006,430 $885 $984,459 $11,813,508 $0.98

IncomeBerkadia

ProFormaJan 2019

T-3 AnnualizedJan 2019

T-12 2017

Scheduled Market Rent $11,813,508 $11,813,508 $11,467,577 $10,327,3216.00% ($708,810) ($789,151) ($522,659) $272,1395.00% ($590,675) ($1,492,581) ($1,574,654) ($908,170)1.50% ($177,203) ($221,250) ($374,062) ($152,911)1.50% ($177,203) ($308,688) ($170,863) ($188,035)

Less: Loss-to-LeaseLess: VacancyLess: ConcessionsLess: Non-Rev/Bad Debt/AdjustPlus: Year-One Rent Growth (Value Add 250 units $128) $384,000

Net Rental Income $10,543,617 $9,001,838 $8,825,339 $9,350,344

T-12 Income$655,008 $635,930 $635,930 $635,950$483,001 $468,933 $468,933 $481,731

Plus: Fee IncomePlus: RUBS IncomePlus: Other Income $120,433 $116,925 $116,925 ($10,846)

Total Operating Income (EGI) $11,802,059 $10,223,626 $10,047,127 $10,457,180

Expenses Per UnitJan 2019

T-12 AnnualizedJan 2019

T-12 2017$350 $389,200 $480,571 $480,571 $405,152

$82 $91,127 $88,904 $88,904 $110,475$1,158 $1,287,861 $1,256,450 $1,256,450 $1,207,707

$704 $782,816 $763,723 $763,723 $724,6923.00% $318 $354,062 $445,658 $445,658 $524,503

$966 $1,074,518 $1,048,311 $1,048,311 $902,091$77 $85,505 $83,419 $83,419 $118,838

$1,271 $1,413,402 $1,127,281 $1,127,281 $1,127,281$294 $327,272 $319,290 $319,290 $350,535

AdministrativeAdvertising & PromotionPayrollRepairs & Maintenance/TurnoverManagement FeeUtilitiesContracted ServicesReal Estate TaxesInsuranceReplacement Reserve $300 $333,600 $333,600 $333,600 $333,600

Total Expenses $6,139,364 $5,947,207 $5,947,207 $5,804,874

Per Unit: $5,521 $5,348 $5,348 $5,220Per SF: $6.10 $5.91 $5.91 $5.77

Net Operating Income $5,662,695 $4,276,419 $4,099,920 $4,652,306

IMPORTANT INFORMATION & DISCLAIMER: The information contained herein is assumed to be correct and market-supported. Output produced from this model should not be considered an appraisal. Projections are forecasts and are not to be considered fact. The information contained in this file is privileged and confidential; it is intended only for use by Berkadia and their clients. This file may not be reproduced physically or in electronic format without the expressed written consent of Berkadia. CAUTION: Security codes have been included into this file and unauthorized use may render this file useless. Berkadia Employees, affiliates, and contractors are instructed to hard-code this model for reproduction and distribution. Not responsible for errors and omissions. COPYRIGHT 2019. All Rights Reserved. DRAFT REPORT: Privileged & Confidential, For Discussion Purposes Only


▪

▪

▪ 90%

▪

▪

▪

▪

▪

▪ 802059

▪

▪

▪

▪

N T S T A

5

▪ Value Add Appreciation: Rent premiums are included for 250 units at $128per month. This is illustrated in the Rent Growth line in the Pro Forma.


▪

▪

▪

▪

▪

▪

▪ 662,695

59

N T S T A


Y A AS L TI N

6

Acquisition EOY 1 EOY 2 EOY 3 EOY 4 EOY 5 EOY 6 EOY 7 EOY 8 EOY 9 EOY 10 EOY 11IncomeScheduled Market Rent $11,813,508 $12,563,433 $12,940,336 $13,328,546 $13,728,403 $14,140,255 $14,564,462 $15,001,396 $15,451,438 $15,914,981 $16,392,431

($708,810) ($125,634) ($129,403) ($133,285) ($137,284) ($141,403) ($145,645) ($150,014) ($154,514) ($159,150) ($163,924)($590,675) ($628,172) ($647,017) ($666,427) ($686,420) ($707,013) ($728,223) ($750,070) ($772,572) ($795,749) ($819,622)($177,203) ($125,634) ($129,403) ($133,285) ($137,284) ($141,403) ($145,645) ($150,014) ($154,514) ($159,150) ($163,924)($177,203) ($188,451) ($194,105) ($199,928) ($205,926) ($212,104) ($218,467) ($225,021) ($231,772) ($238,725) ($245,886)

Less: Loss-to-Lease Less: Vacancy Less: Concessions Less: Non-Rev/Bad Debt/Adjust Plus: Year-One Rent Growth (Value Add 250 units $128) $384,000

Net Rental Income $10,543,617 $11,495,541 $11,840,408 $12,195,620 $12,561,488 $12,938,333 $13,326,483 $13,726,278 $14,138,066 $14,562,208 $14,999,074

$655,008 $674,659 $694,898 $715,745 $737,218 $759,334 $782,114 $805,578 $829,745 $854,637 $880,276$483,001 $497,491 $512,415 $527,788 $543,622 $559,930 $576,728 $594,030 $611,851 $630,206 $649,113

Plus: Fee Income Plus: RUBS Income Plus: Other Income $120,433 $124,046 $127,767 $131,600 $135,548 $139,615 $143,803 $148,117 $152,561 $157,138 $161,852

Total Operating Income (EGI) $11,802,059 $12,791,737 $13,175,489 $13,570,753 $13,977,876 $14,397,212 $14,829,129 $15,274,002 $15,732,223 $16,204,189 $16,690,315

Operating Expenses($389,200) ($398,930) ($408,903) ($419,126) ($429,604) ($440,344) ($451,353) ($462,636) ($474,202) ($486,057) ($498,209)

($91,127) ($93,405) ($95,740) ($98,134) ($100,587) ($103,102) ($105,679) ($108,321) ($111,029) ($113,805) ($116,650)($1,287,861) ($1,320,058) ($1,353,059) ($1,386,886) ($1,421,558) ($1,457,097) ($1,493,524) ($1,530,863) ($1,569,134) ($1,608,363) ($1,648,572)

($782,816) ($802,387) ($822,447) ($843,008) ($864,083) ($885,685) ($907,827) ($930,523) ($953,786) ($977,630) ($1,002,071)3% ($354,062) ($383,752) ($395,265) ($407,123) ($419,336) ($431,916) ($444,874) ($458,220) ($471,967) ($486,126) ($500,709)

($1,074,518) ($1,101,381) ($1,128,916) ($1,157,139) ($1,186,067) ($1,215,719) ($1,246,112) ($1,277,265) ($1,309,196) ($1,341,926) ($1,375,474)($85,505) ($87,643) ($89,834) ($92,079) ($94,381) ($96,741) ($99,160) ($101,638) ($104,179) ($106,784) ($109,454)

($1,413,402) ($1,441,670) ($1,470,503) ($1,499,914) ($1,529,912) ($1,560,510) ($1,591,720) ($1,623,555) ($1,656,026) ($1,689,146) ($1,722,929)($327,272) ($335,454) ($343,840) ($352,436) ($361,247) ($370,278) ($379,535) ($389,023) ($398,749) ($408,718) ($418,936)

AdministrativeAdvertising & PromotionPayrollRepairs & Maintenance/TurnoverManagement FeeUtilitiesContracted ServicesReal Estate TaxesInsuranceReplacement Reserve ($333,600) ($333,600) ($333,600) ($333,600) ($333,600) ($333,600) ($333,600) ($333,600) ($333,600) ($333,600) ($333,600)

Total Expenses ($6,139,364) ($6,298,280) ($6,442,107) ($6,589,444) ($6,740,376) ($6,894,992) ($7,053,384) ($7,215,645) ($7,381,869) ($7,552,155) ($7,726,604)

Net Operating Income (NOI) $5,662,695 $6,493,457 $6,733,381 $6,981,310 $7,237,500 $7,502,220 $7,775,744 $8,058,358 $8,350,354 $8,652,034 8,963,711

IMPORTANT INFORMATION & DISCLAIMER: The information contained herein is assumed to be correct and market-supported. Output produced from this model should not be considered an appraisal. Projections are forecasts and are not to be considered fact. The information contained in this file is privileged and confidential; it is intended only for use by Berkadia and their clients. This file may not be reproduced physically or in electronic format without the expressed written consent of Berkadia. CAUTION: Security codes have been included into this file and unauthorized use may render this file useless. Berkadia Employees, affiliates, and contractors are instructed to hard-code this model for reproduction and distribution. Not responsible for errors and omissions. COPYRIGHT 2019. All Rights Reserved. DRAFT REPORT: Privileged & Confidential, For Discussion Purposes Only


IMPORTANT INFORMATION & DISCLAIMER: The information contained herein is assumed to be correct and market-supported. Output produced from this model should not be considered an appraisal. Projections are forecasts and are not to be considered fact. The information contained in this file is privileged and confidential; it is

intended only for use by Berkadia and their clients. This file may not be reproduced physically or in electronic format without the expressed written consent of Berkadia. CAUTION: Security codes have been included into this file and unauthorized use may render this file useless. Berkadia Employees, affiliates, and contractors are

instructed to hard-code this model for reproduction and distribution. Not responsible for errors and omissions. COPYRIGHT 2019. All Rights Reserved. DRAFT REPORT: Privileged & Confidential, For Discussion Purposes Only

61

A A IS N

IncomeBerkadia

ProForma NET CHANGEJan 2019

T-3 Annualized Jan 2019 T-12 2017Scheduled Market Rent $11,813,508 0.0% $11,813,508 $11,467,577 $10,327,321 Less: Loss-to-Lease 6.00% ($708,810) ($789,151) ($522,659) $272,139 Less: Vacancy 5.00% ($590,675) ($1,492,581) ($1,574,654) ($908,170) Less: Concessions 1.50% ($177,203) ($221,250) ($374,062) ($152,911) Less: Non-Rev/Bad Debt/Adjust 1.50% ($177,203) ($308,688) ($170,863) ($188,035)

$384,000 Plus: Year-One Rent Growth (Value Add 0.00%Net Rental Income $10,543,617 17.1% $9,001,838 $8,825,339 $9,350,344

$655,008 3.0% $635,930 $635,930 $635,950$483,001 3.0% $468,933 $468,933 $481,731

Plus: Fee Income Plus: RUBS Income Plus: Other Income $120,433 3.0% $116,925 $116,925 ($10,846)Total Operating Income (EGI) $11,802,059 15.4% $10,223,626 $10,047,127 $10,457,180

$878,635 $750,153 $735,445 $779,195$983,505 $851,969 $837,261 $871,432

Net Rental Income / MonthTotal Operating Income (EGI) / MonthTotal Operating Income (EGI) / Unit $884 $766 $753 $784

Expenses Per UnitJan 2019

T-12 Annualized Per UnitJan 2019

T-12 Per Unit 2017 Per Unit$350 $389,200 -19.0% $480,571 $432 $480,571 $432 $405,152 $364

$82 $91,127 2.5% $88,904 $80 $88,904 $80 $110,475 $99$1,158 $1,287,861 2.5% $1,256,450 $1,130 $1,256,450 $1,130 $1,207,707 $1,086

$704 $782,816 2.5% $763,723 $687 $763,723 $687 $724,692 $652$318 $354,062 -20.6% $445,658 $401 $445,658 $401 $524,503 $472$966 $1,074,518 2.5% $1,048,311 $943 $1,048,311 $943 $902,091 $811

$77 $85,505 2.5% $83,419 $75 $83,419 $75 $118,838 $107$1,271 $1,413,402 25.4% $1,127,281 $1,014 $1,127,281 $1,014 $1,127,281 $1,014

$294 $327,272 2.5% $319,290 $287 $319,290 $287 $350,535 $315

AdministrativeAdvertising & PromotionPayrollRepairs & Maintenance/TurnoverManagement FeeUtilitiesContracted ServicesReal Estate TaxesInsuranceReplacement Reserve $300 $333,600 0.0% $333,600 $300 $333,600 $300 $333,600 $300

Total Expenses $6,139,364 3.2% $5,947,207 $5,947,207 $5,804,874

Net Operating Income $5,662,695 32.4% $4,276,419 $4,099,920 $4,652,306


T TAL ST TAL TAXA L AL

S

T TALA

T T ST T T

T I

T TAL ST TAL TAXA L AL

S

T TAL

T T A T A T I

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Disclaimer andConfidentiality AgreementThe material contained in this document is confidential, furnished solely for the purpose of considering investment in the property described therein and is not to be copied and/or used for any purpose or made available to any other person without the express written consent of Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. In accepting this, the recipient agrees to keep all material contained herein confidential.

This information package has been prepared to provide summary information to prospective purchasers and to establish a preliminary level of interest in the property described herein. It does not, however, purport to present all material information regarding the subject property, and it is not a substitute for a thorough due diligence investigation. In particular, Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. and seller have not made any investigation of the actual property, the tenants, the operating history, financial reports, leases, square footage, age or any other aspect of the property, including but not limited to any potential environmental problems that may exist and make no warranty or representation whatsoever concerning these issues. The information contained in this information package has been obtained from sources we believe to be reliable; however, Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. and Seller have not conducted any investigation regarding these matters and make no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. Any pro formas, projections, opinions, assumptions or estimates used are for example only and do not necessarily represent the current or future performance of the property.

Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. and Seller strongly recommend that prospective purchasers conduct an in-depth investigation of every physical and financial aspect of the property to determine if the property meets their needs and expectations. We also recommend that prospective purchasers consult with their tax, financial and legal advisors on any matter that may affect their decision to purchase the property and the subsequent consequences of ownership.

All parties are advised that in any property the presence of certain kinds of molds, funguses, or other organisms may adversely affect the property and the health of some individuals. Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. recommend, if prospective buyers have questions or concerns regarding this issue, that prospective buyers conduct further inspections by a qualified professional.

The Seller retains the right to withdraw, modify or cancel this offer to sell at any time and without any notice or obligation. Any sale is subject to the sole and unrestricted approval of Seller, and Seller shall be under no obligation to any party until such time as Seller and any other necessary parties have executed a contract of sale containing terms and conditions acceptable to Seller and such obligations of Seller shall only be those in such contract of sale.

For more information on these and other Berkadia® exclusive listings, please visit our website at www.Berkadia.com

Berkadia®, a joint venture of Berkshire Hathaway and Jefferies Financial Group, is an industry leading commercial real estate company providing comprehensive capital solutions and investment sales advisory and research services for multifamily and commercial properties. Berkadia® is amongst the largest, highest rated and most respected primary, master and special servicers in the industry.

© 2019 Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Berkadia® and Berkadia Commercial Mortgage® are trademarks of Berkadia Commercial Mortgage LLC. Investment sales and real estate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. For state licensing details for the above entities, visit: www.berkadia.com/legal/licensing.aspx

a Berkshire Hathaway and Jefferies Financial Group company

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1112 Units - LoopNet...of Greater Ann Arbor’s population is within the prime renter age group of 18 to 35 years old 36% of Greater Ann Arbor’s housing units are renter occupied,