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92 MULTIFAMILY UNITS in SACRAMENTO, CALIFORNIA

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The information contained herein is strictly confidential, furnished solely for the purpose of considering the acquisition of the property described herein, and is not to be used for any other purpose or made available to any other

person without the expressed written consent of Newmark Knight Frank.

It has been obtained from the Seller and may include other sources believed to be reliable, but no representation is being made with regard to its accuracy or completeness.

Prospective investors should undertake their own investigations and reach their own conclusions without reliance upon the material contained herein. Neither the Seller nor the Agent nor any of their respective officers, agents or principals has made or will make any representations or warranties, expressed or implied, as to the accuracy or completeness of the Offering Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of the Offering Memorandum or its contents.

Analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the prospective purchaser.

The Seller and Agent expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the property and/or terminate discussions with any entity at any time with or without notice.

The Seller shall have no legal commitment or obligations to any entity reviewing the Offering Memorandum or making an offer to purchase the property unless and until such offer for the property is approved by the Seller, and any conditions to the Buyer’s obligations there under have been satisfied or waived.

CONFIDENTIALITY AGREEMENT

04 Executive Summary

16Property Overview

20 Comparable Analysis

27Financial Analysis

Table of Contents

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LEAD CONTACT

NATE OLESONLicense CA: 01467941

[email protected]

MARC ANDENMATTENLicense CA: 01956176

[email protected]

CAM CORWINLicense CA: 02049950

[email protected]

SACRAMENTO OFFICE980 9th St, Suite 2500

Sacramento, CA 95814T 916.920.4400

SAN FRANCISCO OFFICE655 Montgomery St, Suite 1705

San Francisco, CA 94111T 415.354.0777

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4E X E C U T I V E S U M M A R Y

SUR APARTMENTSS A C R A M E N T O0.4 Miles to Subject 0.4 Miles to Subject

0.3 Miles to Subject



BUS STOP

BUS STOP

0.4 Miles toSubject

0.4 Miles toSubject

Fulton Ave

Marconi Ave

Country Club Estates$1.2M Median SFH

INVESTMENT SUMMARY

Price $13,000,000

Address 2927 Marconi AveSacramento, CA 95821

County Sacramento County

Year Built / Renovated 1954 / 2018

Total # of Units 92

Net Rentable SF 48,792

# of Acres 2.35

Density 39.15

Parking Spaces 92

Parking Ratio 1:1

Total Buildings 3

Total # of Stories 2

Occupancy 97.8%

THE OFFERINGNewmark Knight Frank, as the exclusive advisor, is pleased to present the opportunity to acquire SUR Apartments, a 92-unit apartment community located in Sacramento, CA.

CAP GRM 5.7%/7.4% 9.9/8.7

KEY INVESTMENT HIGHLIGHTS » Loss-to-Lease and RUBS Opportunity - Based on increasing rental

demand and comparable properties, SUR has an opportunity to immediately increase rents. Currently, there are no RUBS in-place and owner provides complimentary high speed wireless internet.

» Full Renovation Opportunity - Recent leases and comparables in the market demonstrate the ability to raise rents significantly by continuing interior renovations with granite countertops, stainless-steel appliances, and vinyl plank flooring. This full renovation has been proven in 34 of the units and achieves a $208 premium over the partially renovated units.

» Robust Submarket Fundamentals — Since January 2016, the Arden Arcade submarket has increased 17% or $237 on average rents. With limited supply and increase in demand, rent growth continues to look strong.

» Proximity to Shopping Center and Retail - SUR is only a short walk away from Town and Country Village, which is anchored by Wal-Mart, Trader Joe’s, Sprouts, TJ Maxx, Starbucks, and Jamba Juice.

CLICK HERE FOR DRONE

https://vimeo.com/329888897/d3dfa711be

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SUR APARTMENTSS A C R A M E N T O0.4 Miles to Subject 0.4 Miles to Subject




BUS STOP

BUS STOP

0.4 Miles toSubject

0.4 Miles toSubject

Fulton Ave

Marconi Ave


5

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80

80

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ARDEN FAIR MALL

TOWN & COUNTRY VILLAGE

Del Paso Country ClubHome of 2015 Senior U.S. Open

Rated High Performerby U.S. News

W

5 MIN WALKFROM SUBJECT Fulton Ave

Edison Ave

DOWNTOWNSACRAMENTO

7 MilesSacramento

River

Marcon

i Ave

Sacramento CountyHuman Assistance Building

Marconi LearningAcademy

CLICK HERE FOR DRONE VIDEO

https://vimeo.com/329888897/d3dfa711be

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Total Upside Opportunity

Total Income Obtainable

$236,076

The difference from SUR’s in-place income and potential renovated income is $236,076*, which equates to a 160 basis point spread or 7.4% stabilized cap rate.

Limited New Supply

New construction of multifamily properties continues to remain limited throughout

Sacramento, particularly in the Arden Arcade submarket. There are zero projects under construction and only one in planning in

Arden.

Robust Employment Market

As of December 2018, the unemployment rate in the Sacramento Metro dropped

to 3.5% and CA DoT predicts a 5.4% job growth and 16.0% income growth from

2017 to 2022.

Relative Affordability

The average rent in Downtown Sacramento is $471/month more than

the average rent in Arden Arcade.

$471Avg. Rent Delta to Downtown Sacramento

Loss-To-Lease/RUBS Upside

Annualized Revenue Obtainable

$98,928

With an avg. of $102 of loss-to-lease/fully renovated unit and implementing an avg. of $51/unit RUBS, a new owner can grow the

property’s NOI by $98,928 *.

Renovation Upside

Annualized Renovation Upside

$137,148

SUR offers investors the opportunity to capture significant upside through

renovation - averaging $208 per unit or $137,148* in potential annual upside on

top of loss-to-lease.

*refer to Financial Analysis on page 30

INVESTMENT HIGHLIGHTS

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$137,148R e n o vat i o n

U p s i d e

$42,768L o s s - t o -L e a s e

U p s i d e

$236Kt o ta L a n n U a L

U p s i d e

$56,160RUBs U p s i d e

LOSS-TO-LEASE/RUBS CAPTURE & RENOVATION UPSIDECapturing loss-to-lease, implementing RUBS, and an interior renovation program will substantially increase NOI. Based on current market rents, which reflect recent leasing activity and have been verified through an analysis of comparable properties, there is an average monthly loss-to-lease of $102 per unit for renovated units. There is an additional renovation premium of $208 per unit for the fifty-five unrenovated units. The combined upside, including RUBS, equates to $236k in additional revenue or a 7.4% cap rate.

TYPE # OF UNITS IN-PLACE RENT

LOSS-TO-LEASE

RENOVATION PREMIUM POST RENO RENT RUBS

1x1 - Partial 22 $1,068 $227 $1,295 $50

1x1 - Full 26 $1,181 $114 $1,295 $50

1x1 L - Partial 33 $1,200 $195 $1,395 $50

1x1 L - Full 5 $1,315 $80 $1,395 $50

2x1 - Full 4 $1,445 $50 $1,495 $60

3x2 - Full 2 $1,595 $1,595 $70

Weighted Avg. 92 $1,188 $102 $208 $1,352 $51

Monthly Total $109,335 $3,564 $11,429 $1,352 $4,680

Annual Total $1,312,020 $42,768 $137,148 $1,492,080 $56,160

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ALL UNITS ARE UPGRADED OR RENOVATEDSUR features newly-renovated one, two, and three bedroom apartment homes that combine modern style with upscale interior finishes.

PARTIALRENOVATION

FULLRENOVATION

New or resurfaced cabinet doors New cabinet doors and boxes

New cabinet pulls & hinges Soft close hinges

Refinished kitchen countertops New granite countertops

New white appliances New stainless steel appliances

Carpet or wood plank flooring Vinyl plank flooring (no carpet)

New bathroom vanity

New shower valves

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U P D A T E D LIGHT FIXTURES

S TA I N L E S S STEEL APPLIANCES

BRAND NEW CABINETS & BOXES

G R A N I T E CO U N T E R TO P S

VINYL PLANK FLOORING

$208RENOVATION

PREMIUM

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$208RENOVATION

PREMIUM

NEW CEILING FANS & LIGHTS

BRAND NEW CABINETS & BOXES

VINYL PLANK FLOORING

B R A N D N E WWA L L U N I T S

NEW BATHROOMVANITIES

G R A N I T E CO U N T E R TO P S

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Significant Capital ImprovementsA notable advantage of SUR is the property’s outstanding physical condition, which is the result of significant capital improvements over the past few years. These improvements have significantly enhanced the property’s overall curb appeal, and have helped drive premium rental rates at the property.

CAPITAL IMPROVEMENT LISTBelow is a list of recent capital improvements done within the last two years:

» New roof (2016)

» New gutters

» New double pane windows

» New exterior paint

» Resurfaced parking lot

» New hot water heaters and recirculating pumps (x4 rooms)

» New landscaping

» New AC units (wall)

» Resurfaced walkways

» New trash enclosure

» Entire property has been wired for high-speed internet

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Renovated Interior Leasing Office Newly Paved Parking Lot

New Leasing

Office

New Branding & Signage

Pool Upgrades

Landscaping & Tree Pruning

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LIMITED SUPPLY WITH NATIONALLY TOP RANKED RENT GROWTHPer Cantor Fitzgerald’s proprietary forecasting model, the Sacramento region is projected to be the third ranked multifamily market in the nation for above-average growth prospects in 2018.

• Robust Rent Growth: Sacramento continues to see strong rent growth and declining vacancy rates — annual rent growth exceeded 7% throughout the region, and vacancy rates are at 3.5% based on internal NKF market surveys.

• Strong Employment Gains: Sacramento employment figures continue to improve, with steady employment growth and declining unemployment rates. The MSA has surpassed its 2007 pre-recession peak and now stands at a new high of 1,104,404 total jobs as of December 2018.

• Limited New Supply: New construction of multifamily properties continues to remain limited throughout Sacramento. This lack of new supply combined with steady employment gains has continued to fuel rent growth (see chart below).

0%

1%

2%

3%

4%

5%

0

5,000

10,000

15,000

20,000

25,000

30,000Inventory growth in Sacramento

remains the lowest of all major

markets tracked by AxioMetrics

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$1,161

$1,185

$1,212

$1,256

$1,248

$1,281

$1,304

$1,297

$1,325

$1,353

$1,366

$1,398

2.9%

1.8% 2.0%2.6%

3.7% 3.9% 3.7%4.1%

3.7% 3.7%3.41%

3.93%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

$950

$1,000

$1,050

$1,100

$1,150

$1,200

$1,250

$1,300

$1,350

$1,400

1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018

Arden Arcade vs Vacancy Rate

Average Rent Vacancy Rate

ARDEN ARCADE AVERAGE RENT & VACANCY RATES

EXCEPTIONAL SUBMARKET FUNDAMENTALSSince January 2016 rents in the Arden Arcade increased 17%, or $237 on average, while vacancy remained essentially flat. This

strong rent growth can be attributed to a combination of continued job growth, very limited new construction, and a growing renter

population. According to AxioMetrics, Arden Arcade rent growth is projected to grow over 6% year-over-year.

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PROPERTY SUMMARY

Address2927 Marconi Ave

Sacramento, CA 95821

County Sacramento

Year Built / Renovated 1954 / 2018

Total # of Units 92


Parcel # 078C-0441-001-20

# of Acres 2.35

Density 39.15

Parking Spaces 92

Parking Ratio 1:1

Total Buildings 3


Framing Wood-Framed

Roof Pitched

Paving Asphalt

Water Supply Copper & Galvanized

Electrical Copper

Water Heaters 4 100 Gallon Tanks - New in 2016

Washer/Dryers Coin Operated - Owned

UTILITIES

PAID BY METHOD SUPPLIED BY

Electric Resident Direct SMUD

Gas Resident Direct PG&E

Water/Sewer Owner Direct CUBS

Trash Owner Direct Republic

Internet* Owner Direct Comcast

UNIT MIX SUMMARY

UNIT TYPE # UNITS % OF TOTAL

AVG IN-PLACE RENT

AVG RENO RENT

1x1 - Partial 22 24% $1,068 $1,295

1x1 - Full 26 28% $1,181 $1,295

1x1 L - Partial 33 36% $1,200 $1,395

1x1 L - Full 5 5% $1,315 $1,395

2x1 - Full 4 4% $1,445 $1,495

3x2 - Full 2 2% $1,595 $1,595

Total/Avg 92 100% $1,188 $1,352

*The building was recently re-wired for high speed internet. Owner provides free internet as an amenity to all tenants. Tenants contact Comcast directly for support, hardware, and accounts.

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The front two buildings, units #1 through #48, consists of “open layout” one-

bedroom units, which combine the kitchen and living room. The bedroom is

still separate. 26 of the 48 units of this type have been fully renovated.

1-BEDROOM

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1-BEDROOMS - LARGEThe back building, units #49 through #92 (excluding 2 and 3 bedrooms),

consists of larger one-bedroom units with a traditional, separated kitchen and

living room. 5 of the 38 units of this type have been fully renovated.

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20COMPARABLE ANALYSIS

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2120COMPARABLE ANALYSIS

TOTAL RENT COMPARISON: 1-BEDROOM RENTS

Avg Reno Rent RUBS Internet Total Rent

$1,339* $0 $0 $1,339

$1,425 $70 $30 $1,525

$1,352 $70 $30 $1,452

$1,215 $120 $30 $1,375

$1,255 $90 $30 $1,365

$1,207 $90 $30 $1,327

$1,327 $70 $30 $1,408

SUR

Kensington

Westwood

The Eleven Hundred

Woodbridge

Veranda at the Park

TOTAL/AVERAGE

Projected renovated rents are some of

the most affordable in the submarket

* Weighted average of fully renovated 1x1 ($,295) and 1x1 L ($1,395)

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1-BEDROOM ADJUSTED RENT TOTALS

$1,000

$1,075

$1,150

$1,225

$1,300

$1,375

$1,450

$1,525

$1,600

Kensington Westwood Average Woodbridge The Eleven Hundred SUR Veranda at the Park

Internet

RUBS

1 BR Rent

Subject Comp 1 Comp 2 Comp 3 Comp 4 Comp 5

Property Name SUR Kensington Westwood The Eleven Hundred Woodbridge Veranda at the Park TTL / AVG

Address 2927 Marconi Ave 3644 Kings Way 4900 Marconi Ave 1100 Howe Ave 2028 San Juan Rd 2264 Cottage Way

City Sacramento Sacramento Carmichael Sacramento Sacramento Sacramento

Year Built 1954 1976 1968 1968 1988 1986 1977

Units 92 301 182 565 301 116 293

Avg Asking Rent $1,352 $1,534 $1,445 $1,437 $1,419 $1,352 $1,448

Avg SF 541 897 807 773 765 809 804

Avg Rent PSF $2.50 $1.71 $1.79 $1.86 $1.85 $1.67 $1.80

Renovated Yes Yes Yes Yes Yes Yes

RUBS No Yes Yes Yes Yes Yes

Internet Included Not Included Not Included Not Included Not Included Not Included

Pet Rent $25 $35 $40 $50 $15 $15 $36

Occupancy 97.8% 94.1% 98.3% 96.5% 97.7% 97% 96.6%


Studios Units 40 Units 2 Units 30 Units Units UnitsAvg Asking Rent $1,073 $1,007 $1,130 $1,095

Avg SF 480 480 502 489Avg Rent PSF $2.24 $2.10 $2.25 $2.241 Bedroom 48 Units Units Units 202 Units 92 Units 40 Units

Avg Asking Rent $1,295 $1,215 $1,255 $1,207 $1,225Avg SF 495 660 655 740 668

Avg Rent PSF $2.62 $1.84 $1.92 $1.63 $1.831 Bedroom Large 38 Units 79 Units 124 Units Units Units UnitsAvg Asking Rent $1,395 $1,425 $1,352 $1,380

Avg SF 550 756 680 710Avg Rent PSF $2.54 $1.88 $1.99 $1.95

2 Bedroom 1 Bath 4 Units Units 43 Units 247 Units 116 Units UnitsAvg Asking Rent $1,495 $1,582 $1,500 $1,445 $1,493

Avg SF 775 1000 754 765 783Avg Rent PSF $1.93 $1.58 $1.99 $1.89 $1.91

2 Bedroom 2 Bath Units 158 Units 9 Units Units 93 Units 76 UnitsAvg Asking Rent $1,650 $1,746 $1,550 $1,429 $1,575


3 Bedroom 2 Bath 2 Units 24 Units 4 Units 85 Units Units UnitsAvg Asking Rent $1,595 $1,895 $2,385 $1,884 $1,904

Avg SF 1014 1180 1850 1187 1,209Avg Rent PSF $1.57 $1.61 $1.29 $1.59 $1.57

4 Bedroom 2 Bath Units Units Units 1 Units Units UnitsAvg Asking Rent $1,950 $1,950

Avg SF 1300 1,300Avg Rent PSF $1.50 $1.50

SUR currently does not charge RUBS and provides high speed internet services to tenants free of charge

RENT COMPARABLES MATRIX

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RENT COMPARABLES SORT CHART

Subject Comp 1 Comp 2 Comp 3 Comp 4 Comp 5


Address 2927 Marconi Ave 3644 Kings Way 4900 Marconi Ave 1100 Howe Ave 2028 San Juan Rd 2264 Cottage Way

City Sacramento Sacramento Carmichael Sacramento Sacramento Sacramento

Year Built 1954 1976 1968 1968 1988 1986 1977

Units 92 301 182 565 301 116 293

Avg Asking Rent $1,352 $1,534 $1,445 $1,437 $1,419 $1,352 $1,448

Avg SF 541 897 807 773 765 809 804

Avg Rent PSF $2.50 $1.71 $1.79 $1.86 $1.85 $1.67 $1.80

Renovated Yes Yes Yes Yes Yes Yes

RUBS No Yes Yes Yes Yes Yes

Internet Included Not Included Not Included Not Included Not Included Not Included

Pet Rent $25 $35 $40 $50 $15 $15 $36

Occupancy 97.8% 94.1% 98.3% 96.5% 97.7% 97% 96.6%


Studios Units 40 Units 2 Units 30 Units Units UnitsAvg Asking Rent $1,073 $1,007 $1,130 $1,095

Avg SF 480 480 502 489Avg Rent PSF $2.24 $2.10 $2.25 $2.241 Bedroom 48 Units Units Units 202 Units 92 Units 40 Units

Avg Asking Rent $1,295 $1,215 $1,255 $1,207 $1,225Avg SF 495 660 655 740 668

Avg Rent PSF $2.62 $1.84 $1.92 $1.63 $1.831 Bedroom Large 38 Units 79 Units 124 Units Units Units UnitsAvg Asking Rent $1,395 $1,425 $1,352 $1,380

Avg SF 550 756 680 710Avg Rent PSF $2.54 $1.88 $1.99 $1.95

2 Bedroom 1 Bath 4 Units Units 43 Units 247 Units 116 Units UnitsAvg Asking Rent $1,495 $1,582 $1,500 $1,445 $1,493


2 Bedroom 2 Bath Units 158 Units 9 Units Units 93 Units 76 UnitsAvg Asking Rent $1,650 $1,746 $1,550 $1,429 $1,575


3 Bedroom 2 Bath 2 Units 24 Units 4 Units 85 Units Units UnitsAvg Asking Rent $1,595 $1,895 $2,385 $1,884 $1,904

Avg SF 1014 1180 1850 1187 1,209Avg Rent PSF $1.57 $1.61 $1.29 $1.59 $1.57

4 Bedroom 2 Bath Units Units Units 1 Units Units UnitsAvg Asking Rent $1,950 $1,950

Avg SF 1300 1,300Avg Rent PSF $1.50 $1.50

Assumes units are renovated and does not include RUBS, internet, or other charges

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SUR Occupancy: 91.3% • YOC: 19542927 Marconi Ave. Sacramento, CA

Unit Amenities: Stainless Steal Appliances, Granite Countertops, New Cabinets, Plank and Carpet Flooring, Open Layout, New Bathroom Vanity, Ceiling FansProperty Amenities: Pets Accepted, Laundry Facilities, Swimming Pool, 24 Hour Emergency Maintenance, Internet Service Included, Assigned Parking Included

UNIT TYPE # OF UNITS AVG SF AVG MKT RENT AVG PSF

1x1 - Partial 22 495 $1,295 $2.62

1x1 - Full 26 495 $1,295 $2.62

1x1 L - Partial 33 550 $1,395 $2.54

1x1 L - Full 5 550 $1,395 $2.52

2x1 - Partial 4 550 $1,495 $2.72

3x2 - Full 2 950 $1,595 $1.68

Total/Avg 92 530 $1,352 $2.55

Kensington Occupancy: 94.1% • YOC: 19763644 Kings Way Sacramento, CA Owner: Klein Financial

Unit Amenities: Dishwasher, White Appliances, New Cabinets, Plank and Carpet Flooring, Vaulted Ceilings*, Air Conditioning and Ceiling Fans, Private Patio or Balcony, Fireplace*Property Amenities: Pets Accepted, Laundry Facilities, Fitness Center, Swimming Pool, Affordable Housing Options, Smoke-Free Community


0X1 40 480 $1,073 $2.24

1X1 L 79 756 $1,425 $1.88

2X2 158 1,030 $1,650 $1.60

3x2 24 1,180 $1,895 $1.61

Total/Avg 301 861 $1,511 $1.83

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Westwood Occupancy: 98.3% • YOC: 19684900 Marconi Ave. Carmichael, CA Owner: ColRich

Unit Amenities: Dishwasher, Stainless Steal Appliances, Ceiling Fan(s), Walk-in Closets, Microwave, Oversized Closets, Large Windows, Wood Burning Fireplace*, Balcony/Private Patio, Extra StorageProperty Amenities: Pets Accepted, Laundry Facilities, Fitness Center, Swimming Pool, 24 Hour Emergency Maintenance, Hot Tub, Covered Parking, Assigned Parking Included


0X1 2 480 $1,007 $2.10

1X1 L 124 680 $1,352 $1.99

2X1 43 1000 $1,582 $1.58

2X2 9 1240 $1,746 $1.41

3x2 4 1850 $2,385 $1.29

Total/Avg 180 1193 $1,766 $1.57

The Eleven Hundred Occupancy: 96.5% • YOC: 19681100 Howe Ave. Sacramento, CA Owner: Open Path

Unit Amenities: Dishwasher, Garbage Disposal, White Appliances, New Cabinets, Plank Flooring, Air Conditioning and Ceiling Fans, Fireplace*, Furnished Available*Property Amenities: Pets Accepted, Pool Table in Clubhouse, Fitness Center, Swimming Pool and Spa, 24-hour Maintenance, Outdoor Basketball Court


0X1 30 502 $1,130 $2.25

1X1 202 660 $1,215 $1.84

2X1 247 754 $1,500 $1.99

3X2 85 1187 $1,884 $1.59

4X2 1 1300 $1,950 $1.50

Total/Avg 535 975 $1,637 $1.73

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Woodbridge Occupancy: 97.7% • YOC: 19882028 San Juan Rd. Sacramento, CA Owner: Randall Realty

Unit Amenities: W/D In-Unit, Dishwasher, Black Appliances, New Cabinets, Plank Flooring, Linen Closet, Central HVAC, Private Patio or Balcony, Fireplace*, Office*Property Amenities: Pets Accepted, Playground, Fitness Center, Swimming Pool and Spa, 24-hour Maintenance, Smoke-Free Community, Indoor Basketball Court


1X1 92 655 $1,255 $1.92

2X1 116 765 $1,445 $1.89

2X2 93 875 $1,550 $1.77

Total/Avg 301 765 $1,417 $1.86

Veranda at the Park Occupancy: 96.5% • YOC: 19862264 Cottage Way Sacramento, CA 95825 Owner: Mark Abrahams

Unit Amenities: Dishwasher, White Appliances, New Cabinets, Plank Flooring, Open Layout, Linen ClosetProperty Amenities: Pets Accepted, Laundry Facilities, Fitness Center, Swimming Pool, 24 Hour Emergency Maintenance, Hot Tub, Covered Parking, Assigned Parking Included


1X1 40 740 $1,207 $1.63

2X2 76 845 $1,429 $1.69

Total/Avg 116 793 $1,318 $1.66

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The following section provides detailed information on the operations of the subject property, including an analysis of revenue trends, historic operations, and our pro forma underwriting and assumptions.

OVERVIEW

UNIT MIX SUMMARY

UNIT TYPE # UNITS % OF TOTAL

AVG IN-PLACE RENT

AVG RENO RENT

1x1 - Partial 22 24% $1,068 $1,295

1x1 - Full 26 28% $1,181 $1,295

1x1 L - Partial 33 36% $1,200 $1,395

1x1 L - Full 5 5% $1,315 $1,395

2x1 - Full 4 4% $1,445 $1,495

3x2 - Full 2 2% $1,595 $1,595

Total/Avg 92 100% $1,188 $1,352

INVESTMENT SUMMARY

Price $13,000,000

Address 2927 Marconi AveSacramento, CA 95821

County Sacramento County

Year Built 1954

Total # of Units 92


# of Acres 2.35

Density 39.15

Parking Spaces 92

Parking Ratio 1:1

Total Buildings 3


Occupancy 97.8%

DEBT NOTES

Existing Debt

Lender Fannie Mae, originated by Wells Fargo

Original Balance $7,650,000

Interest Rate 4.84%

Origination Date 08/31/17

Amortization 30 years

Interest Only Through September 2023

Maturity Date 9/1/2029

Prepayment Yield Maintenance

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2928

HISTORIC RENTAL INCOME CHART

$104,278 $103,897 $104,006 $103,868

$118,123

$3,175 $3,440 $3,575 $3,624

$3,624$4,680

$80,000

$85,000

$90,000

$95,000

$100,000

$105,000

$110,000

$115,000

$120,000

$125,000

$130,000

Jan Feb March In‐Place RENO

Income Other Income RUBS

T-3 Income matches in-place rents5.7% Cap Rate

Through RUBS and Renovations7.4% Cap Rate

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30FINANCIAL ANALYSIS

FINANCIALS

PRICE UNITMIX‐RENTS In‐Place RENOPrice $13,000,000 Type #ofunits SQFT %ofMix Rent RentPriceperUnit $141,304 1 BR x 1 BA - Partial 22 495 23.9% $1,068 $1,295PriceperSquareFoot $266 1 BR x 1 BA - Full 26 495 28.3% $1,181 $1,295

1 BR x 1 BA L - Partial 33 550 35.9% $1,200 $1,3951 BR x 1 BA L - Full 5 550 5.4% $1,315 $1,395

RETURNS Cap GRM 2 BR x 1 BA - Full 4 775 4.3% $1,445 $1,4952018 6.5% 10.8 3 BR x 2 BA - Full 2 1014 2.2% $1,595 $1,595T3 5.7% 10.4 TTL/AVG 92 541 100.0% $1,188 $1,352InPlace 5.7% 9.9RENO 7.4% 8.7 HISTORICALANDPROFOMAINCOMEANDEXPENSE Notes

Income 2018 T3 In‐Place RENOFinancing GROSS POTENTIAL RENT $1,198,972 $1,248,724 $1,312,020 $1,492,080Loan Amount $7,650,000 Less: VACANCY LOSS $0 $0 -$65,601 -$74,604Interest Rate 4.84% NetRentalIncome $1,198,972 $1,248,724 $1,246,419 $1,417,476Amortization Years 360 Plus: OTHER INCOME $43,491 $40,760 $43,491 $43,491LTV 58.8% Plus: UTILITY REIMBURSEMENTS $0 $0 $0 $56,160 $50, $60, $70 for 1x1, 2x1, and 3x2Down Payment $5,350,000 TotalIncome $1,242,463 $1,289,484 $1,289,910 $1,517,127I/O Payments -$ 370,260

Expenses 2018 PF PF PFPAYROLL $115,020 $115,020 $115,020 $115,020ADMINISTRATIVE $1,477 $9,200 $9,200 $9,200 $100/unitTURNOVER $3,547 $23,000 $23,000 $23,000 $250/unitREPAIRS & MAINTENANCE $17,079 $23,000 $23,000 $23,000 $250/unitUTILITIES $98,888 $98,888 $98,888 $98,888BULK INTERNET $33,860 $33,860 $33,860 $33,860 Based on historicalsLANDSCAPING / GROUNDS $0 $4,600 $4,600 $4,600 $50/unitCONTRACT SERVICES / OTHER $6,171 $6,171 $6,171 $6,171TOTALCONTROLLABLEEXPENSES $276,042 $313,739 $313,739 $313,739MANAGEMENT FEE $36,000 $38,685 $38,697 $45,514 3%INSURANCE $17,507 $17,507 $17,507 $17,507 Based on historicalsREAL ESTATE TAXES $72,175 $159,185 $159,185 $159,185 ReassessedSPECIAL ASSESSMENTS $0 $1,058 $1,058 $1,058TOTALOPERATINGEXPENSES $401,724 $530,173 $530,186 $537,002CAPEX / RESERVES $0 $23,000 $23,000 $23,000 $250/unitTOTALEXPENSES $401,724 $553,173 $553,186 $560,002

NOIAFTERRESERVES $840,739 $736,311 $736,724 $957,125Debt Service -$370,260 -$370,260 -$370,260 -$370,260CashFlow $470,479 $366,051 $366,464 $586,865Cap Rate 6.5% 5.7% 5.7% 7.4%CashonCashReturn 8.8% 6.8% 6.8% 11.0%

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30

NEWMARK KNIGHT FRANK980 9th St, Suite 2500Sacramento, CA 95814T 916.920.4400

F O R M O R E I N F O R M AT I O N O N T H I S O F F E R I N G M E M O R A N D U M , P L E A S E C O N TA C T :

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NATE [email protected]

916.599.6523 License CA: 01467941

MARC ANDENMAT [email protected]

916.835.8844 License CA: 01956176

CAM COR [email protected]

415.430.1037License CA: 02049950

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