finance package - STOP Fountainview ProjectHHA's+Fountainview... · FINANCE PACKAGE . 2640 ... and the 8th largest in the country and is an international fashion ... growth can be

FINANCE PACKAGE

2640 fountain view APARTMENTS

233 UNITS

HOUSTON, TEXAS

January 2016

APV REDEVELOPMENT CORPORATION

2640 Fountain View Drive, Suite 400 Houston, TX 77057

Phone (713) 260-0767

Fax (713) 260-0815

Contents

I. EXECUTIVE SUMMARY ................................................................................................ 3

II. PROJECT DESCRIPTION ............................................................................................... 5

III. REASONS TO INVEST .................................................................................................... 6

IV. FINANCIAL REVIEW ..................................................................................................... 8

V. MARKET ANALYSIS AND DEMOGRAPHICS ........................................................... 9

VI. 2640 FOUNTAIN VIEW APARTMENTS .................................................................... 33

A. Project Timeline: ....................................................................................................... 33

B. Rendering, Elevations, Site Plan & Unit Layouts: ................................................ 34

C. Aerial Photographs & Community Assets: ............................................................ 53

VII. DEVELOPMENT TEAM BIOGRAPHIES .................................................................. 56

I. EXECUTIVE SUMMARY

Location: NW Corner of Fountain View Drive and Westheimer Road, west of the Galleria. The site is located less than 2 miles west of IH 610, and 7.5 miles west of Downtown Houston.

Site Strengths: The high opportunity location is 7.5 miles west of

Downtown and just west of the Galleria. It is a satellite central business district (over 28 million square feet of office space) and a center for premier shopping centers and hotels, providing multiple opportunities for employment and excellent schools.

The site enjoys easy access to Loop 610, I-10, Westpark Tollway and US Hwy. 59. This convenient location allows one to maneuver around the city with relative ease.

Demographics: The median household income of the area is

$93,571.

The median home value within three miles of the project is $396,221.

A total of 217,247 people live within three miles of the site.

The median age is 36.9 years within three miles of the site.

Target Market: Singles, couples and families with incomes not

exceeding 80% of AMI seeking a high quality apartment home at a lower monthly cost to comparable housing.

Units: 233

Density: 65.01 Units/Acre

Product Type: Four-story podium-style multifamily building, with a 2-story secured access parking garage at ground level.

Unit Mix: Type Number Avg. Sq. Ft

Studio 24 578

1br/1ba 132 793

2br/2ba 77 1,247

Total/Average 233 921

Interior/Property Amenities: Nine-foot ceilings

Full-size & stackable washer/dryer

Ceiling fans

Microwaves

Frost-free refrigerators with icemakers

Large walk-in closets

Solid wood cabinetry

Granite counter tops

Individual water heaters

All units wired for cable and telephone

Garden tubs and showers

Business Center

Cyber café

Game/media room

Gazebo with chairs

Swimming Pool & Courtyard

State of the art fitness room

Closed circuit security

Rentable storage space

Secured access, covered parking

16 SEER HVAC

II. PROJECT DESCRIPTION

The APV Redevelopment Corporation (“APV”) is developing a multifamily residential property on the west side of Fountain View Drive, just north of Westheimer Road. The main purpose of the project is to provide housing to families and individuals that make below 80% of Area Median Income (AMI). 2640 Fountain View Apartments will be a mixed-finance multifamily housing development comprised of multi-story podium apartments over a parking garage. This project is designed to provide state-of-the-art homes to residents seeking well-constructed but affordable alternatives to newly constructed high-end apartment communities and older housing.

2640 Fountain View Apartments will be a 233 unit multifamily residential property on 3.5 acres of land. There will be one four-story building on a podium structure with secured parking on the ground level. The overall density of the project will be 65 units per acre.

Average unit size will be 921 square feet with 24 studio (10%), 132 one bedroom (57%), and 77 (33%) two bedroom units. Twenty percent (20%) of the units will be available for families with incomes of 80% of AMI or less, 70% for families with incomes of 60% or less, and 10% for families with incomes of 30% or less than AMI. All units will be either accessible or adaptable for the handicapped resident.

Each unit will incorporate an open and spacious layout to maximize useable space. Standard features include ceiling fans in bedrooms and living rooms, laundry room with full-size washer/dryers (stackable in some), nine-foot ceilings, large walk-in closets, granite countertops, frost-free refrigerators with icemakers, microwaves, and dishwashers. All bedrooms are designed to be large enough to comfortably accommodate a king size bed.

Community amenities include controlled gate access with a secured parking garage, a courtyard swimming pool with gazebos and seating, barbecue grills and picnic tables, perimeter landscaping, rentable storage space, fitness center, business center, furnished community room and a cyber cafe. The property will be all electric with water and sewer provided by the owner. Each apartment will be pre-wired for cable and telephone service.

APV has received an allocation of Private Activity Tax Exempt Bonds and will submit an application for 4% Low Income Housing Tax Credits in the first half of 2016. General Land Office Community Development Block Grant Disaster Recovery Funds and Capital Funds from HHA will fill a financing gap, as necessary.

III. REASONS TO INVEST

Overview: The subject property is located in Houston, Harris County, Texas, in the southern portion of a nine-county metropolitan area representing the 4th largest population in the United States. The Houston region is one of the youngest, fastest-growing and most diverse populations anywhere, prizing as a source of strength its broad racial and ethnic diversity. Houston’s population is also young and educated with a healthy population growth and a robust, diversified economy.

One-of-a-kind Site: The project will be located in the immediate vicinity of Galleria/Uptown Houston, which is the 15th largest business center in the United States. This diversified economic center has a large concentration of retailers, hotels, and high density multi-family residential developments adjacent to some of Houston’s most affluent neighborhoods such as Tanglewood, Afton Oaks and Memorial. The Galleria/Uptown Houston district is one of Houston’s largest employers and home to over 2,000 companies. Within close proximity are Houston’s largest employment centers, including Downtown Houston, Greenway Plaza and the Galleria. The Galleria/Uptown Houston offers stellar shopping with over 1,000 retail shops and many unique dining opportunities. The convenient location adjacent to Loop 610 will provide our residents excellent accessibility and an effortless commute to popular dining, cultural and recreational opportunities. These include the Museum District, Theater District and all three of the city’s new professional sports arenas (Reliant Stadium, Minute Maid Park and the Toyota Center).

Employment Opportunities: Houston is home to 26 Fortune 500 companies, ten of which are located in the Galleria or Central Business District employment centers. 2640 Fountain View Apartments will be located in the immediate vicinity of several of Houston’s major employers and four of Houston’s major employment centers:

The site lies just west of the Galleria/Uptown Houston District, which hosts 200,000 office workers

The Central Business District is 7.5 miles away and has over 150,000 workers employed by 3,500 businesses

Greenway Plaza is within 4 miles and employs over 25,000 The Texas Medical Center is 7 miles away and employs over 106,000

From 2012 to 2040, the Perryman Group projects an average population growth of 1.8% annually, a wage and salary employment rise of 1.65% annually. Overall, the region boasts one of the lowest unemployment rates in the country at 5.14 percent.

Retail Opportunities: 2640 Fountain View Apartments will have an outstanding location in the vicinity of the Galleria/Uptown Houston district. The Galleria is the largest mall in Texas and the 8th largest in the country and is an international fashion marketplace and Houston’s

retail “hub”. It is the number one shopping and tourist attraction in Houston and the southwest, generating over $2 billion in sales. A recent development in the subject’s neighborhood was the development of a retail center on the southeast corner of San Felipe and Fountain View Drive, just north of the subject. The retail center—Tanglewood Court—includes a state-of-the-art 91,000 square foot HEB grocery store, restaurants, and other retail outlets.

Accessibility: The property is centrally located in Houston and is adjacent to Loop 610. Loop 610 encircles Houston and provides connections to most major highways in the city, including Interstate 10, Interstate 45 and US Highway 59. US Highway 59 and Interstate 10, providing east/west and north/south access, are each between 1-3 miles from 2640 Fountain View Drive.

Market Environment: The Houston economy is influenced by the oil and gas industry which has experienced a recent downturn in oil prices. Being a global center for the oil and gas industries, Houston is familiar with the cyclical nature of oil and gas exploration and production, and recent forecasts have indicated that this downturn in prices will not have as significant an impact as some had originally forecasted. While it is true that there has been a negative impact felt in the Houston area with the declining oil prices, other industries such as petro-chemicals and transportation, among others, have directly benefited from the lower oil prices. Another benefit has been a rise in retail and consumer oriented industries, with consumers having more disposable income to put into the economy. The Greater Houston Partnership’s employment forecast calls for growth in all sectors except oil field services, oil field equipment manufacturing and oil field exploration. The Houston area is projected to continue to outperform most parts of the United States in the decades to come. For the 12 months ending May 2015, Houston added 62,300 jobs, a 2.1 percent annual increase. This growth can be understood when considering that global expansion in energy demand and technological advances keep the Houston area at the forefront of the industry. Other drivers of economic activity through the long-term horizon are, among others, the logistics sector (Port of Houston is 2nd busiest in US) and the strong healthcare base.

Educational Environment: The family-friendly site is equipped with a number of distinction-level schools. The public Elementary (Briargrove), Middle (Grady) and High Schools (Lee) serving the area have all achieved the Met Standard1 rating with the elementary and middle schools each boasting high Student Achievement (Index 1) points. Within a 7 mile radius of the site are a number of nationally acclaimed universities including Rice University, Baylor College of Medicine, the University of Houston and Houston Baptist University.

1 Texas Education Agency rating system whereby schools are placed in two categories, "met standard" or "needs improvement." They are judged on how well they do across four areas: student achievement; student progress; closing performance gaps between low-achieving demographics; and post-secondary readiness.

V. MARKET ANALYSIS AND DEMOGRAPHICS

FOUNTAIN VIEW APARTMENTS

HOUSTON, TEXAS

Provider: Date:

Contact: Phone:

Development Target Population

Site Location

x

0

1

2

4

5

6

All Multifamily Housing

All Placed-in-Service after 2006

All LIHTC Developments

Unstabilized Comparable LIHTC

Other Subsidized / Affordable

Primary Market Area (PMA) page ______

HarrisHouston2640 Fountain View Dr County:City:

0

na

4 839

general 265

na

98

302

265

in service

Na

general 174

5601 Chimney Rock

6515 Hillcroft in service general

6363 Bev erly Hill general

in service

Na

5601 Chimney Rock in service

senior 98

6515 Hillcroft

98

6363 Bev erly Hill in service

Na

in service

senior

general

TypeTarget

Population

Bonhomme @ Claremont

MARKET ANALYSIS SUMMARY

713-467-5858

Valbridge Property Advisors 9/30/2015

$15,615 $41,640

max min

$49,920

265

302 Na

Tim N. Treadway, MAI, CCIM

$33,394$11,074

Other Affordable Developments in PMA

max

$11,073

$24,480 $31,230

$10,217

HH 30% of AMI

min

40% of AMI 60% of AMI

$22,697 $24,479

80% of AMI

size min max min

$31,029 $33,393

max

Na

Na

174

174

265

in service

Bonhomme @ Claremont in service

general

174

302

$29,143 $37,440 $39,840$13,097 $18,720

Proposed, Under Construction, and Unstabilized Comparable Developments in PMA

na

Av g OccupancyTotal Units# Dev elopments

0

48201421300 48201431202 48201432001 48201432702

302 Na

48201421101

48201421102 48201421402 48201431302 48201432100 48201432802

48201421401 48201431301

generalFountain View

98 Na

48201432600

48201432002 48201432801

census tracts

Occup

ancy

zip codes census place

48201421202 48201421500 48201431402 48201432701

48201421403 4820143140148201421201

Total

Units

TDHCA

#Dev elopment Status Type

StatusComp

Units

Target

Population

Comp

Units

Total

Units

Occup

ancy

ELIGIBLE HOUSEHOLDS BY INCOME page _____

MULTIFAMILY HOUSING in PMA page _____

AFFORDABLE HOUSING INVENTORY in PMA page _____

TDHCA

#Dev elopment

FOUNTAIN VIEW APARTMENTSHOUSTON, TEXAS

Valbridge Property Advisors l The Gerald A. Teel Company, Inc.

*PMA exceeds TDHCA maximum with allowed exception due to one census tract placing it over limits

Population p.

Households p.

Total HH

Renter HH

Homeowner HH

DEMAND CALCULATION p.

Total Households

Subject Units Potential Demand

Unstabilized Comparable Units Other Demand

RELEVANT SUPPLY GROSS DEMAND

RELEVANT SUPPLY / GROSS DEMAND = GROSS CAPTURE RATE

p. DEMAND by UNIT TYPE p.

Subject has 31 variations of floorplans and income bands; smallest unit within br count shown only.

1.2%

30% 2 2 979 $468 $382 $1,590 1,312 8 0.6%

30% 1 1 667 $390 $323 $1,230 1,433 13

3.6%

30% 0 1 569 $365 $298 $1,090 270 2 0.8%

60% 2 2 979 $936 $850 $1,590 1,662 55

3.8%

$1,230 1,550 92 6.2%60% 1 1 667 $781 $714

60% 0 1 569 $729 $662 $1,090 553 17

1.2%

80% 2 2 979 $1,248 $1,162 $1,590 1,299 14 1.2%

80% 1 1 667 $1,041 $974 $1,230 1,615 27

DemandSubject

Units

Comp

Units

Unit

Capture

Rate

491 580% 0 1 569 1.1%$972 $905 $1,090

SUBJECT UNIT MIX

AMI

Lev elBeds Baths

Size

(sqft)

PROPOSED RENT

Gross Net

0

12,295

SENIORS

41,741 44,762

2020 2020

0

233

7,012 7,307

12,295

41,741

current year place-in-service five year current year

Note: For developments targeting Seniors, fill in Population and Household data for both the

General population and the Senior population

PMA DEMOGRAPHIC DATA

GENERAL

place-in-service

MARKET

RENT

2015

233

five year

103,433 111,455

34,729 37,455

2015

1.9%


HOUSTON, TEXAS


The subject immediate location is in an above average part of the PMA. A map of the PMA

follows with the subject noted by the arrow:

Purpose of the Study

The purpose of this Market Study is to estimate market rents and demand for the proposed HTC

family property containing rental units at rental and income levels later described (restrictions).

Statement of Ownership of the Subject Property

The ownership entity per the tax records is the Houston Housing Authority.

Effective Date of the Study

This market study was performed in September and October 2015 with an effective date of

September 30, 2015.

Disclosure of Competency

Tim N. Treadway, MAI, CCIM and David D. Magnuson are competent to appraise the subject

property, having appraised numerous similar properties. Mr. Treadway and David D. Magnuson

have experience in market studies and appraisals for properties subject to the Low Income

Housing Tax Credit program. The educational program followed by the firm is developed by the

Appraisal Institute in order to remain abreast of current and future trends in the real estate

market and the appraisal profession.

Page 5


HOUSTON, TEXAS


Income Characteristics

The PMA exhibits lower median household income levels than all the indicators, which points to it being a

lower middle income PMA. It should be noted that most of the lower income profile likely comes from

the areas southwest of the subject, where much of the PMA is concentrated. The area immediately

around the subject is likely higher income due to the quality of the structures and the high rental rates

being charged in that area. The area immediately to the east of the subject was purposefully excluded

due to the relatively high incomes there. The median income is projected to grow at a below average rate

if compared to the MSA, and below average if compared to the MSA and the Nation. Incomes are

projected to remain at levels higher than their current standing over the next five years.

Housing Characteristics

Based on the Projections, the following tenure was noted.

PMA MSA State US

41,741 2,244,386 9,570,026 120,744,617

18.0% 10.8% 12.7% 12.8%

18.2% 9.5% 10.6% 10.3%

15.2% 9.6% 10.4% 10.3%

13.3% 11.6% 12.9% 13.5%

15.3% 16.2% 16.8% 17.6%

8.2% 13.1% 12.6% 12.5%

6.4% 15.8% 13.8% 12.9%

2.6% 6.6% 5.1% 5.1%

2.9% 6.9% 5.1% 5.1%

$53,434 $85,003 $74,999 $74,699

$200,000+

Average Household Income

Household Income Base

2015 Households by Income

$150,000 - $199,999

$50,000 - $74,999

$75,000 - $99,999

$25,000 - $34,999

$35,000 - $49,999

<$15,000

$15,000 - $24,999

$100,000 - $149,999

PMA MSA State US

$33,752 $61,044 $53,616 $53,217

$38,045 $73,052 $61,681 $60,683

5 Years 2.42% 3.66% 2.84% 2.66%Compound Rate of Change

2015

2020

Median Household Income

PMA MSA State US

$21,654 $29,741 $26,940 $28,597

$24,352 $33,687 $30,521 $32,501

2015

2020

Per Capita Income

PMA MSA State US

39,674 2,062,529 8,922,933 116,716,292

37.6% 23.5% 24.2% 26.7%

25.8% 28.5% 30.3% 32.8%

14.0% 17.0% 16.6% 16.1%

11.3% 15.6% 14.7% 13.4%

6.2% 8.6% 8.0% 6.5%

2.9% 3.8% 3.5% 2.6%

2.3% 2.9% 2.6% 1.9%

2010 Households by Size

1 Person Household

2 Person Household

Total

7 + Person Household

5 Person Household

6 Person Household

3 Person Household

4 Person Household

Page 30


HOUSTON, TEXAS


There is a higher propensity towards smaller households in the subject PMA due to it being a younger

area. One person households are significantly higher than its cohorts. Using the 2009-2013 ACS Study

the breakdown by housing type follows.

The subject shows its large multi family presence as an urban community, with more apartments than in

other areas.

The PMA is above average with the amount of renter occupied housing units. This amount is projected to

increase nominally over the near term, and still remain above average.

HOUSING UNITS BY UNITS IN STRUCTURE PMA % MSA State US

Total 46,439 100.0% 100.0% 100.0% 100.0%

1, detached 4,641 10.0% 62.4% 65.5% 61.7%

1, attached 3,086 6.6% 3.4% 2.7% 5.8%

2 701 1.5% 1.2% 2.0% 3.8%

3 or 4 1,720 3.7% 2.6% 3.2% 4.4%

5 to 9 3,277 7.1% 4.6% 4.8% 4.8%

10 to 19 11,490 24.7% 9.5% 6.4% 4.5%

20 to 49 9,437 20.3% 4.7% 3.5% 3.5%

50 or more 11,967 25.8% 6.8% 4.4% 5.0%

Mobile home 107 0.2% 4.8% 7.5% 6.5%

Boat, RV, van, etc. 13 0.0% 0.1% 0.2% 0.1%

PMA MSA State US

44,480 1,788,107 8,157,575 115,904,641

14.2% 56.0% 57.8% 60.2%

76.0% 36.2% 32.8% 30.8%

9.7% 7.8% 9.4% 9.0%

46,375 2,295,018 9,977,436 131,704,730

15.7% 56.1% 57.0% 57.7%

69.8% 33.8% 32.4% 30.9%

14.4% 10.1% 10.6% 11.4%

49,261 2,479,869 10,667,418 136,527,306

14.3% 55.0% 55.5% 55.7%

70.5% 35.5% 34.2% 32.8%

15.3% 9.5% 10.3% 11.6%

52,605 2,702,710 11,477,671 141,795,728

13.9% 55.3% 55.5% 55.5%

71.2% 35.8% 34.5% 33.0%

14.9% 8.9% 10.0% 11.5%

Housing Unit Summary

Renter Occupied Housing Units

Vacant Housing Units

2015 Housing Units

Owner Occupied Housing Units



2010 Housing Units



2000 Housing Units





2020 Housing Units


PMA MSA State US

$300,570 $202,236 $181,576 $200,006

$383,721 $240,458 $215,907 $236,203

2015

2020

Median Home Value

Page 31


HOUSTON, TEXAS


The median home value is higher than the MSA, nation, and the state in this category, showing a general

higher ability to afford luxury housing, despite the household income being lower. This shows the income

gap that is prevalent in the PMA.

The housing in the vicinity is considered older than the other cohorts.

HOUSING UNITS BY YEAR STRUCTURE BUILT PMA % MSA State US

Total 46,439 100.0% 100.0% 100.0% 100.0%

Built 2010 or later 244 0.5% 1.4% 1.2% 0.6%

Built 2000 to 2009 4,631 10.0% 24.8% 21.7% 14.7%

Built 1990 to 1999 2,992 6.4% 14.5% 15.6% 13.9%

Built 1980 to 1989 5,445 11.7% 16.4% 17.5% 13.9%

Built 1970 to 1979 19,456 41.9% 20.4% 17.4% 15.9%

Built 1960 to 1969 9,962 21.5% 9.7% 9.9% 11.1%

Built 1950 to 1959 2,986 6.4% 7.0% 8.7% 11.0%

Built 1940 to 1949 351 0.8% 3.0% 3.9% 5.5%

Built 1939 or earlier 372 0.8% 2.8% 4.1% 13.5%

Median Year Structure Built 1975 1984 1983 1976

Page 32


HOUSTON, TEXAS


Employment Demographics

The Chart by Occupation indicates that the subject PMA is above the other cohorts in food preparation,

construction, and building maintenance categories, and below the average in management. This is a

generally blue-collar area, with lesser representation by professional occupations, because the PMA draws

from the southwest side of the subject.

The next chart reflects employment by industry.

PMA % MSA State US

Total 49,745 100.0% 100.0% 100.0% 100.0%

Management 3,193 6.4% 9.9% 9.5% 9.7%

Business and financial operations 2,988 6.0% 5.2% 4.7% 4.8%

Computer and mathematical 1,090 2.2% 2.4% 2.4% 2.6%

Architecture and engineering 1,287 2.6% 3.1% 2.0% 1.8%

Life, physical, and social science 349 0.7% 1.0% 0.7% 0.9%

Community and social services 421 0.8% 1.1% 1.4% 1.7%

Legal 826 1.7% 1.3% 1.1% 1.2%

Education, training, and library 1,749 3.5% 5.9% 6.4% 6.1%

Arts, design, entertainment, sports, and media 882 1.8% 1.5% 1.5% 1.9%

Healthcare practitioner, technologists, and

technicians

1,211 2.4% 4.9% 4.9% 5.6%

Healthcare support 926 1.9% 2.0% 2.4% 2.5%

Protective service 644 1.3% 2.1% 2.3% 2.2%

Food preparation and serving related 5,477 11.0% 5.2% 5.6% 5.7%

Building and grounds cleaning and maintenance 4,403 8.9% 4.4% 4.3% 4.0%

Personal care and service 1,382 2.8% 2.9% 3.2% 3.6%

Sales and related 5,462 11.0% 10.9% 11.2% 10.9%

Office and administrative support 4,591 9.2% 12.9% 13.7% 13.7%

Farming, fishing, and forestry 184 0.4% 0.2% 0.5% 0.7%

Construction and extraction 5,976 12.0% 7.3% 6.8% 5.1%

Installation, maintenance, and repair 1,386 2.8% 3.6% 3.7% 3.3%

Production 2,555 5.1% 6.1% 5.6% 5.9%

Transportation and material moving 2,763 5.6% 6.1% 6.2% 6.1%

CIVILIAN EMPLOYED POPULATION AGE 16+ YEARS BY OCCUPATION

Page 33


HOUSTON, TEXAS


The PMA is extraordinary in construction and accommodation/food services, as compared to the other

cohorts.

Conclusions

The PMA generally has smaller households, and a slightly younger population. Income levels are

expected to grow at an average to below average rate. The PMA will grow at a lower rate than area

standards in terms of households, but still higher than nationally. The smaller family sizes may point to a

need for smaller units.

PMA % MSA State US

Total 49,745 100.0% 100.0% 100.0% 100.0%

Agriculture, forestry, fishing and hunting 145 0.3% 0.3% 1.0% 1.4%

Mining, quarrying, and oil and gas extraction 1,222 2.5% 2.9% 2.1% 0.6%

Construction 6,657 13.4% 9.1% 7.9% 6.2%

Manufacturing 3,902 7.8% 10.9% 9.4% 10.5%

Wholesale trade 1,208 2.4% 3.6% 3.0% 2.8%

Retail trade 5,110 10.3% 10.8% 11.6% 11.6%

Transportation and warehousing 1,557 3.1% 5.0% 4.5% 4.1%

Utilities 368 0.7% 1.0% 0.9% 0.9%

Information 722 1.5% 1.4% 1.8% 2.2%

Finance and insurance 1,718 3.5% 3.8% 4.7% 4.8%

Real estate and rental and leasing 1,519 3.1% 2.1% 1.9% 1.9%

Professional, scientific, and technical services 4,175 8.4% 7.4% 6.2% 6.5%

Management of companies and enterprises 45 0.1% 0.1% 0.1% 0.1%

Administrative and support and waste

management services

3,648 7.3% 4.9% 4.6% 4.2%

Educational services 2,415 4.9% 9.0% 9.9% 9.5%

Health care and social assistance 3,945 7.9% 11.0% 11.8% 13.7%

Arts, entertainment, and recreation 604 1.2% 1.4% 1.5% 2.1%

Accommodation and food services 6,700 13.5% 6.6% 7.2% 7.2%

Other services, except public administration 3,152 6.3% 5.5% 5.4% 5.0%

Public administration 933 1.9% 3.1% 4.5% 5.0%

CIVILIAN EMPLOYED POPULATION AGE 16+ YEARS BY INDUSTRY

Page 34


HOUSTON, TEXAS


Market Summary

Per ADS for September 2015 the following statistics were noted:

# Operating Communities 101

# Operating Units 24,346

Average Units/Community 241

Average Unit Size 894

Average Price ($/Mo) $1312

Average Rental Rate ($/sf/mo) $1.468 (Note high rent, higher income area)

Average Occupancy 89.9%

The following chart depicts the average trends for the subject micro-market over the last twelve months.

Occupancy

Occupancy is nearly stabilized. The last 3 and 6 months show increases in occupancy of 1.7% and 0.6%

respectively.

Rental Rates

Rental rates are up 4.1% in the last 12 months, 5.9% in the last six months, and 3.1% in the last three

months, showing growth.

Absorption

This category denotes positive absorption in the last 12 months. The foregoing indicates that absorption

appears to be improving with the economy.

Construction History

Per ADS the following statistics were noted:

Units Built 2010 or later 3418

% of Market 14% (above average)

Average YOC/Communities 1984 (average)

Average YOC/Units 1986 (average)

The next chart depicts the properties broken down by Class.

Occupancy Rental Rates Absorption*

-1.20% 4.10% 656

Annualized last 11 months

12 Month Average Trends

Page 50


HOUSTON, TEXAS


To reiterate, this submarket encompasses a wide variety of neighborhoods, some of which are much

different (by household income, building age, maintenance) than the subject’s immediate area. As stated

earlier, the area is fairly high income and there are no Class D projects, which support this assertion.

As can be seen, the stabilized properties are doing quite well, with the properties in lease-up pulling the

overall average down for the Class A product.

Supply

The following list is now leasing, under construction, and proposed construction for the subject micro-

market. They are notated as being in or out of the subject PMA. As noted earlier, the submarket as

defined by ADS is different than the PMA as herein defined.

Class A Class B Class C Class D

# Communities 52 30 19 none in area

# Units 13,577 7,376 3,393 2,916

Ave. Size (sf) 962 813 798 797

Avg. Price ($/mo) 1661 930 747 525

Avg. Rental Rate ($/sf/mo) $1.727 $1.144 $0.936 $0.659

Occupancy 86.5% 94.7% 93.0% 95.7%

Class A Stable Lease-up

# Communities 52 47 5

# Units 13577 12,010 1,567

Ave. Size (sf) 962 965 942

Avg. Price ($/mo) 1661 1613 2024

Avg. Rental Rate ($/sf/mo) $1.727 $1.672 $2.149

Occupancy 86.5% 93.6% 32.4%

Page 51


HOUSTON, TEXAS


Recent Nearby Construction/Now Leasing

Inside PMA:

2626 Fountain View; occupied at 39%, or 110 units; Will stabilize at 261 units, 93%, 151 units to

go.

Under Construction Per ADS in the Submarket

Inside PMA:

Tuscany Walk

Proposed

Inside PMA:

None

Concessions

No concession data exists for this submarket.

Page 52


HOUSTON, TEXAS


Rent Comparables: Market Rents

No occupancy is available for Tuscany Court.

Rent Summary

Comp Project Name Occ YOC NRU Avg Size

Tenant Pays

Electricity?

Avg Rent

Per SF

Avg Rent

Per Unit Lease ID

1 Augusta 95.0% 2004 312 908 Yes $1.520 $1,377 66131

2 Ava 93.0% 2011 321 874 Yes $1.710 $1,497 66133

3 Marq on Voss 93.0% 2009 307 890 Yes $1.580 $1,403 66134

4 Tanglewood at Voss 95.0% 2008 376 888 Yes $1.450 $1,288 66135

5 Tuscany Court 2003 370 869 Yes $1.560 $1,353 66132

Average 94.0% 2007 337 886 $1.564

Minimum 93.0% 2003 307 869 $1.450

Maximum 95.0% 2011 376 908 $1.710

Total Occupied Units 1,585

Total Operating Units 1,686

Page 55


HOUSTON, TEXAS


MULTIFAMILY RENT COMPARABLE 1

Augusta

Property Identification

Property/Survey ID 49662 / 66131

Property Type Multifamily Other

Property Name Augusta

Address 2660 Augusta Drive

City, State Zip Houston, Texas 77057

County Harris

MSA Houston

Tax ID/APN 1235180010001 , 0690910000102

Property Description

No. of Units 312

Net Rentable SF 283,191

Year Built 2004

Stories 4

Exterior Stucco

Amenities & Unit Features

Clubhouse Yes

Fitness Facilities Yes

No. Outdoor Pools 1

W/D Connections Yes

Fireplaces in Units No

Other Amenities access gates, parking garage

Kitchen Description Dishwasher Garbage Disposal Microwave, granite counters, nickel faucets, black

appliances, ceramic cooktop, tile flooring

Other Unit Features Ceiling Fans High Ceilings Patio Balcony: S

Tenant Paid Services Yes

Water Yes

Sewer Yes

Trash Yes

Electric Yes

Gas No

Cable TV Yes

Unit Mix & Rents

Page 56


HOUSTON, TEXAS

Unit Type # of

Units

# of BR # of BA Avg Unit

SF

Avg $/Mo $/SF/Mo

70 1 1.0 675 $1,119 $1.66

57 1 1.0 740 $1,176 $1.59

31 1 1.0 847 $1,419 $1.68

36 1 1.0 869 $1,345 $1.55

1 1 1.0 939 $1,463 $1.56

48 2 2.0 1,072 $1,561 $1.46

34 2 2.0 1,143 $1,663 $1.45

sunroom 4 1 1.0 1,183 $1,546 $1.31

24 2 2.0 1,260 $1,638 $1.30

3 2 2.0 1,297 $1,681 $1.30

den 4 2 2.0 1,525 $2,134 $1.40

* Totals * 312 425 425.0 908 $1,377 $1.52

Rental Statistics

Occupancy (%) 95.0% Avg. Rent ($/Mo.) $1,377

Avg. Unit Size (SF) 908 Avg. Rent ($/SF) $1.52

Concessions

None

Verification

Confirmed With Mario, leasing agent

Management Co. Francis Property Mgmt

Phone Number 832-675-0400

Confirmation Date 10-08-2015

Remarks X

This is a class A property near the Galleria. Features include stained concrete or wood flooring, exposed

HVAC spiral ducts, washer/dryers all,10' ceilings, track and pendant lighting, business center, storage

rooms, crown molding. Balconies without storage are located in the following floorplans by SF: ,1072,

1,143.

Page 57


HOUSTON, TEXAS


Ava



Property Type Mid, High-Rise

Property Name Ava

Address 7600 High Meadow


County Harris

MSA Houston

Tax ID/APN 1308900010001


No. of Units 321


Year Built 2011

Stories 4


Clubhouse Yes


No. Outdoor Pools 1

W/D Connections Yes


Other Amenities parking garage, access gates

Kitchen Description Dishwasher, disposal, microwaves, 42 uppers,

Other Unit Features washer/dryers all


Water Yes

Sewer Yes

Trash Yes

Electric Yes

Gas No

Cable TV Yes

Page 58


HOUSTON, TEXAS

Unit Mix & Rents

Unit Type # of

Units


SF

Avg $/Mo $/SF/Mo

39 1 1.0 672 $1,337 $1.99

16 1 1.0 698 $1,349 $1.93

7 1 1.0 723 $1,372 $1.90

32 1 1.0 723 $1,346 $1.86

30 1 1.0 763 $1,467 $1.92

16 1 1.0 825 $1,507 $1.83

41 1 1.0 844 $1,362 $1.61

40 1 1.0 859 $1,400 $1.63

3 1 1.0 978 $1,468 $1.50

25 1 1.0 879 $1,515 $1.72

8 2 2.0 1,071 $1,713 $1.60

31 2 2.0 1,180 $1,718 $1.46

19 2 2.0 1,165 $1,906 $1.64

2 2 2.0 1,335 $2,306 $1.73

12 2 2.0 1,267 $2,006 $1.58

* Totals * 321 393 393.0 874 $1,497 $1.71

Rental Statistics



Concessions 6 weeks free on one bedrooms only

Verification

Confirmed With Jane, leasing agent

Management Co. ZRS Management

Phone Number 713-334/5556


Remarks X

Above are base rents in a fairly tight range, being mostly no more than $100 higher within the floorplan.

Page 59


HOUSTON, TEXAS


Marq on Voss



Property Type Mid, High-Rise

Property Name Marq on Voss

Address 2525 S Voss Road


County Harris

MSA Houston

Tax ID/APN 1304250010001


No. of Units 307


Year Built 2009

Stories 4

Exterior Brick and Stucco


Clubhouse Yes


No. Outdoor Pools 1

W/D Connections Yes


Other Amenities parking garage

Kitchen Description Dishwasher, disposal, microwaves, granite counters, stainless appliances

Other Unit Features Ceiling Fans High Ceilings Outside Storage Patio Balcony


Water Yes

Sewer Yes

Trash Yes

Electric Yes

Gas No

Cable TV Yes

Page 60


HOUSTON, TEXAS

Unit Mix & Rents

Unit Type # of

Units


SF

Avg $/Mo $/SF/Mo

31 1 1.0 632 $1,144 $1.81

36 1 1.0 701 $1,219 $1.74

40 1 1.0 748 $1,330 $1.78

8 1 1.0 770 $1,401 $1.82

Last rate 3 1 1.0 754 $1,271 $1.69

den last rate 12 1 1.0 829 $1,371 $1.65

den 12 1 1.0 1,087 $1,519 $1.40

last rate 25 2 2.0 1,101 $1,584 $1.44

11 2 2.0 1,150 $1,522 $1.32

last rate 1 3 2.0 1,342 $2,822 $2.10

last rate 4 1 1.0 672 $1,160 $1.73

4 1 1.0 684 $1,144 $1.67

16 1 1.0 695 $1,144 $1.65

last rate 4 1 1.0 696 $1,290 $1.85

last rate 4 1 1.0 713 $1,160 $1.63

last rate 8 1 1.0 749 $1,363 $1.82

4 1 1.0 768 $1,181 $1.54

last rate 1 1 1.0 805 $1,426 $1.77

last rate 1 1 1.0 822 $1,340 $1.63

29 1 1.0 842 $1,381 $1.64

3 2 2.0 1,174 $1,590 $1.35

last rate 2 2 2.0 1,235 $1,875 $1.52

last rate 8 2 2.0 1,242 $1,565 $1.26

last rate 10 2 2.0 1,257 $1,880 $1.50

last rate 20 2 2.0 1,267 $1,564 $1.23

last rate 3 3 2.0 1,491 $2,238 $1.50

3 3 2.0 1,418 $2,066 $1.46

last rate 4 3 2.0 1,445 $2,360 $1.63

* Totals * 307 408 397.0 890 $1,403 $1.58

Rental Statistics



Concessions

None

Verification

Confirmed With Mary, leasing agent

Management Co. CWS Apartment Homes



Remarks X

Features include granite counters, wood flooring, stainless steel appliances, elevators, custom cabinets,

Page 61


HOUSTON, TEXAS

2' faux wood blinds, tile backsplash. A complete unit mix could not be displayed, but ALN states that this

project has 307 units and 273,313 sf of NRA with an average of 890 sf per unit. Only those units without

'last rate' noted are now available; last rate is from published service.

Page 62


HOUSTON, TEXAS


Tanglewood



Property Type Multifamily Other

Property Name Tanglewood at Voss

Address 7510 Burgoyne Road


County Harris

MSA Houston

Tax ID/APN 1292740010001 , 1292740020002


No. of Units 376


Year Built 2008

Exterior Brick and Hardiplank

Parking Desc. Paved Surface


Clubhouse Yes


No. Outdoor Pools 1

W/D Connections Yes


Other Amenities Club/Rec Bldg: Yes Pool: x Swimming Pool: Yes

Kitchen Description granite counters, dishwashers, microwaves, disposals, some island kitchens

Other Unit Features Ceiling Fans High Ceilings Outside Storage: s Patio Balcony


Water Yes

Sewer Yes

Trash Yes

Electric Yes

Gas No

Cable TV Yes

Page 63


HOUSTON, TEXAS

Unit Mix & Rents

Unit Type # of

Units


SF

Avg $/Mo $/SF/Mo

112 1 1.0 709 $1,085 $1.53

last rate 16 1 1.0 754 $1,235 $1.64

24 1 1.0 748 $1,145 $1.53

last rate 6 1 1.0 918 $1,395 $1.52

last rate 40 1 1.0 783 $1,105 $1.41

last rate 7 1 1.0 771 $1,397 $1.81

8 1 1.0 828 $1,430 $1.73

last rate 4 1 1.0 860 $1,290 $1.50

last rate 45 2 2.0 1,091 $1,470 $1.35

4 2 2.0 1,219 $1,545 $1.27

last rate 20 2 2.0 1,129 $1,590 $1.41

47 2 2.0 1,208 $1,615 $1.34

last rate 2 1 1.0 823 $1,170 $1.42

last rate 24 1 1.0 784 $1,165 $1.49

last rate 2 2 2.0 1,187 $1,751 $1.48

3 2 2.0 1,140 $1,590 $1.39

12 2 2.0 1,128 $1,500 $1.33

* Totals * 376 509 509.0 891 $1,288 $1.45

Rental Statistics



Concessions varies

Verification

Confirmed With Katy, leasing agent

Management Co. Lincoln Property Co



Remarks X

Specials are $500 off two bedrooms on a 13 month lease and $300 off a one bedroom, with only $250

off for lesser terms. The special is prorated. Reserved parking is extra at $35 usually, but is now $20 on

special. Pool view is $40; 1st floor is $50 more. Features include laminate wood flooring 1st floor only,

granite counters, Washer/dryers all, black and stainless appliances, tile in baths with travertine surrounds,

track and pendant lighting, and upgraded cabinetry.

Page 64


HOUSTON, TEXAS


Tuscany Court



Property Type Garden, Low-Rise

Property Name Tuscany Court

Address 1901 Augusta Dr


County Harris

MSA Houston

Tax ID/APN 1150460000001


No. of Units 370


Year Built 2003

Stories 4


Clubhouse Yes


No. Outdoor Pools 1

W/D Connections Yes


Other Amenities parking garage, access gates

Kitchen Description Glass topped stoves, microwaves, dishwashers, disposal, side by side

refrigerator,

Other Unit Features patio balconies


Water Yes

Sewer Yes

Trash Yes

Electric Yes

Gas No

Cable TV Yes

Page 65


HOUSTON, TEXAS

Unit Mix & Rents

Unit Type # of

Units


SF

Avg $/Mo $/SF/Mo

36 1 1.0 694 $1,170 $1.69

78 1 1.0 742 $1,210 $1.63

32 1 1.0 809 $1,295 $1.60

26 1 1.0 850 $1,285 $1.51

den 74 1 1.0 877 $1,335 $1.52

den 36 1 1.0 899 $1,395 $1.55

50 2 2.0 969 $1,570 $1.62

26 2 2.0 1,174 $1,600 $1.36

12 2 2.0 1,207 $1,675 $1.39

* Totals * 370 458 458.0 869 $1,353 $1.56

Rental Statistics

Occupancy (%) Not disclosed Avg. Rent ($/Mo.) $1,353


Page 66

VI. 2640 FOUNTAIN VIEW APARTMENTS

A. Project Timeline:

- Land closing: June 2014

- Construction start: October 2016

- Construction end: October 2018

- Project stabilization: October 2019

B. Rendering, Elevations, Site Plan & Unit Layouts:

C. Aerial Photographs & Community Assets:

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YMCA

WESTMINSTER UNITED METHODIST

WELLS FARGO BANK

WALGREEN'S

UNITY OF HOUSTON CHURCH

T.H. ROGERS EDUCATION CENTERSUPER K FOOD STORE

SUNNY'S FOOD STORE

ST. GEORGE PLACE ELEMENTRY

RICE EPICUREAN MARKET

POST OFFICE

POLICE STATION

PILGRIM ACADAMY

OPTUM CLINIC & URGENT CARE

MEMORIAL LUTHERAN

LITTLE BLOOMS ACADEMY

LEE HIGH SCHOOL

HEB GROCERY STORE

HEAVEN'S NEST LEARNING CENTER

FIRE STATION

EMERSON UNITARIAN UNIVERSALIST CHURCH

CVS PHARMACY

CVS PHARMACY

CHASE BANKCAPITAL ONE BANK

BRIARGROVE ELEMENTRY

Sources: Esri, DeLorme, NAVTEQ, USGS, Intermap, iPC, NRCAN, Esri Japan, METI, Esri China(Hong Kong), Esri (Thailand), TomTom, 2013

Legend

Parks

1 Mile Radius

2640 Fountain View Apartments

nX X

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SchoolsRestaurantsBus Stop

2640 Fountain View Apartments Community Assets Map

¯0 0.25 0.50.125 Miles

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VII. DEVELOPMENT TEAM BIOGRAPHIES

Lance Gilliam, President/Chairman of Board, APV A native Texan and resident of Houston for more than fifty years, Lance Gilliam is a partner in Waterman Steele Real Estate Advisors. He is a member of the Urban Land Institute and serves on its Houston District Council's Executive Committee. He is also a member of the International Council of Shopping Centers, having served as the dean of its School of Open Air Shopping Centers. Active in community organizations, Lance serves as the immediate past president of The Children's Museum of Houston's Board of Directors. Formerly, he was a board member of the Urban League of Houston and a member of the vestry of St. Martin's Episcopal Church. In January 2010, Lance was appointed to the Houston Housing Authority's Board of Commissioners and in January 2012 he was elected Chair.

LaRence Snowden, Vice-President/Director, APV LaRence Snowden is the Director of Programs and Adjunct Professor at Texas Southern University, where he leads the development, communication and recruiting efforts. He also teaches courses in the area of public policy, public budgeting and urban politics. A board member for the Brentwood Community Foundation, LaRence maintains a strong sense of community and commitment to improving the lives of Houston's underprivileged. He holds Bachelor’s and Master’s degrees in Mechanical Engineering from Southern University and Texas A&M University, respectively. He also holds a Master’s in Public Policy from the University of Chicago. He is also a licensed real estate broker in the state of Texas and operates a small real estate brokerage firm.

Tory Gunsolley, Secretary/Treasurer/Director, APV Tory Gunsolley is the President and CEO of the Houston Housing Authority. Houston Housing Authority serves more than 58,000 low-income Houstonians, including over 17,000 families housed through the Housing Choice Voucher Program and another 5,700 living in 25 public housing and tax credit developments around the City. Prior to this, he served as the Chief Administrative Officer at the Newark (NJ) Housing Authority. He also worked at the Cambridge (MA) Housing Authority in a number of positions. He began his career in housing as a housing counselor for a network of

homeless shelters. He chaired the Steering Committee for the Continuum of Care in Houston. He was honored to be a member of the NJ Governor’s Interagency Council on Preventing and Reducing Homelessness. He earned his Bachelor’s degree in Social Sciences at Trinity College in Deerfield, IL and his Master of Public Administration from the Maxwell School at Syracuse University.

Christopher Bergmann, V.P. Real Estate Investment & Development, HHA

Christopher Bergmann gives direct oversight to the Real Estate and Investments Development Department of HHA. In this capacity, he spearheads the acquisition, construction and rehabilitation of affordable housing projects for the agency. Prior to joining the Houston Housing Authority, Chris was the Senior Managing Director for Trammell Crow Residential, in charge of their Affordable Housing Division and was President of The Shenandoah Group, Inc. He was responsible for the development of over 16,000 units of affordable housing during his tenure with these firms. Chris is a graduate of James Madison University where he earned a Bachelor of Business Administration in Management. He is a former President of the Texas Association of Affordable Housing Providers (TAAHP) as well as a former board member of the organization.

Peter Clark, Director - Real Estate Investment & Development, HHA

Peter Clark is responsible for the direct supervision of the new construction project from predevelopment phase through lease-up and stabilization. His wealth of experience in construction began in high school, when he worked in his father’s construction management business. Subsequently, Peter has specialized in affordable housing development experiences having held substantive roles in four housing authorities over the past two decades. He served as the director of development at the Housing Authority of New Orleans, where he participated in the development of two HUD Hope VI projects in the Desire and St. Thomas areas of New Orleans. In the aftermath of hurricane Katrina, Peter worked with a development team to create 1,000 units of senior housing. These developments took advantage of competitive tax credits and were all completed on schedule.

Square One Consultants, Inc., Construction Consultant

Square Once Consultants, Inc. is a full-service Owner Representation/Project Management firm specializing in assisting owners achieve their goals. The firm, based in Austin, Texas, was founded in 1995 by Kevin Fleming and now has a team of 13 professionals. Square One

offers experience in construction and project management, covering the whole scope namely planning, design, plan review, contract negotiation, securing entitlements, construction, closeout and occupancy. The Square One project management team has nearly 200 years of experience in the industry and has managed over 45 million SF and $15 billion in construction projects.

Cathy Freeman, Development Coordinator, HHA Cathy Freeman joined the Houston Housing Authority in the role of Community Development Coordinator in 2012. Previously, she was a construction lender for JPMorgan Chase Bank. She was responsible for the origination of loans which supported Chase Bank’s community development efforts to provide affordable housing and to revitalize low and moderate income communities. Ms. Freeman’s career has been centered in the financial industry for over twenty-five years.

Aniekan Udoh, Development Analyst, HHA Aniekan serves as the “boots on the ground” on the development team, preparing the tax credit and HUD applications, communications with the community, project schedules, and other development activities. He is responsible for generation and maintaining of various development documents and document/database control. He has a background in public administration and project management (certified PMP). He holds a BSc from Texas A&M University – Corpus Christi and a Master of Public Administration from Syracuse University, New York.

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