the terrace package

CONFIDENTIALITY AND DISCLAIMER

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenants plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

The Terrace ApartmentsEULESS, TX

NON-ENDORSEMENT NOTICE

Marcus & Millichap Real Estate Investment Services, Inc. (M&M) is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporations logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of M&M, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of M&M, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOURMARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Section 1 PRICING AND FINANCIAL ANALYSIS

Section 2 PROPERTY DESCRIPTION

Section 3 APARTMENT: RECENT SALES

Section 4 APARTMENT: ON MARKET COMPARABLES

Section 5 RENT COMPARABLES

Section 6 MARKET OVERVIEW

Section 7 DEMOGRAPHIC ANALYSIS

TABLE OF CONTENTS

The Terrace Apartments


PRICING AND FINANCIAL ANALYSIS

3B2B: 3%Studio: 3%

1B1B: 42%

2B2B: 53%

No. ofUnits

UnitType

Approx.Square Feet

2013 RentsRent/

SFMonthlyIncome

Year OneRents

Rent/SF

MonthlyIncome

3 3 Bdr 2 Bath 920 $695 $0.76 $2,085 $695 $0.76 $2,085

57 2 Bdr 2 Bath 850 $665 $0.78 $37,905 $665 $0.78 $37,905

45 1 Bdr 1 Bath 650 $555 $0.85 $24,975 $555 $0.85 $24,975

3 Studio 448 $415 $0.93 $1,245 $415 $0.93 $1,245

108 TOTAL 81,804 $66,210 $66,210

Unit Mix Unit Rent & Rent/SF

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

$0

$100

$200

$300

$400

$500

$600

$700

3B2B 2B2B 1B1B Studio

1

PRICING AND FINANCIAL ANALYSISThe Terrace ApartmentsEULESS, TX

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2014 Marcus & Millichap

UNIT MIX

Income 2013 Per Unit Year One Per UnitGross Potential Rent $794,520 $7,357 $794,520 $7,357

Loss/Gain to Lease $37,395 $346 $39,726 $368

GROSS POTENTIAL RENT $757,125 $7,010 $754,794 $6,989

Other Income

Utility Bill Back $33,678 $312 $41,000 $380

Late Charges $8,939 $83 $8,939 $83

Other Resident Charges $3,249 $30 $3,249 $30

Total Other Income $45,866 $425 $53,188 $492

GROSS POTENTIAL INCOME $802,991 $7,435 $807,982 $7,481

Vacancy/Collection Allowance/Bad Debt (GPR) 66.0% / $499,693 $4,627 25.0% / $188,699 $1,747

EFFECTIVE GROSS INCOME $303,298 $2,808 $619,284 $5,734

ExpensesReal Estate Taxes $30,546 $283 $39,000 $361

Insurance $24,728 $229 $24,728 $229

Utilities $166,683 $1,543 $185,000 $1,713

Contract Services $40,188 $372 $40,188 $372

Repairs & Maintenance $6,692 $62 $32,400 $300

Marketing & Advertising $517 $5 $5,000 $46

Payroll $70,107 $649 $70,107 $649

Management Fee 3.2% / $9,718 $90 5.0% / $30,964 $287

General & Administrative $7,673 $71 $7,673 $71

Turnover $2,531 $23 $21,600 $200

Reserves $27,000 $250 $27,000 $250

TOTAL EXPENSES $386,383 $3,578 $483,660 $4,478

Expenses per SF $4.72 $5.91

% of EGI 127.4% 78.1%

NET OPERATING INCOME ($83,085) ($769) $135,623 $1,256

Total Number of Units: 108

Total Rentable Area: 81,804 SF

2



INCOME & EXPENSES

No. ofUnits

UnitType

Approx.Square Feet

2013 Rents Rent/SF

MonthlyIncome

Year OneRents

Rent/SF

MonthlyIncome

3 3 Bdr 2 Bath 920 $695 $0.76 $2,085 $695 $0.76 $2,085

57 2 Bdr 2 Bath 850 $665 $0.78 $37,905 $665 $0.78 $37,905

45 1 Bdr 1 Bath 650 $555 $0.85 $24,975 $555 $0.85 $24,975

3 Studio 448 $415 $0.93 $1,245 $415 $0.93 $1,245

108 Total/Wtd. Avg. 81,804 $66,210 $66,210

Annualized Operating Data

Income 2013 Year OneGross Potential Rent $794,520 $794,520

Loss/Gain to Lease $37,395 $39,726

Gross Potential Rent $757,125 $754,794

Other Income $45,866 $53,188

Gross Potential Income $802,991 $807,982

Less: Vacancy/Deductions (GPR) 66.0% / $499,693 25.0% / $188,699

Effective Gross Income $303,298 $619,284

Less: Expenses $386,383 $483,660

Net Operating Income ($83,085) $135,623

Net Cash Flow Before Debt Service ($83,085) $135,623

306 Park Drive

Euless, TX 76040

Price Request For Offer

Number of Units 108

Rentable Square Feet 81,804

Year Built 1964

Lot Size 1.29 Acres

Type of Ownership Fee Simple

Location

ExpensesReal Estate Taxes $30,546 $39,000

Insurance $24,728 $24,728

Utilities $166,683 $185,000

Contract Services $40,188 $40,188

Repairs & Maintenance $6,692 $32,400Marketing & Advertising $517 $5,000

Payroll $70,107 $70,107Management Fee $9,718 $30,964

General & Administrative $7,673 $7,673Turnover $2,531 $21,600

Reserves $27,000 $27,000

Total Expenses $386,383 $483,660

Expenses/unit $3,578 $4,478Expenses/SF $4.72 $5.91% of EGI 127.39% 78.10%

Scheduled Income

3



FINANCIAL OVERVIEW


PROPERTY DESCRIPTION

The Terrace Apartments are a true value added asset sitting on 1.2 acres in Euless, Texas. Located directly off Highway 157 and Highway 10, this is a prime location and is ideal for long term redevelopment. An investor can benefit immediately from the available rental upside and potential double digit cash flow with improved management

The portfolio sale of Concord and Terrace Apartments offer a total of 322 apartment units and 11.19 acres of land. Currently the asset is under a special use permit with the city of Euless. Taking advantage of the redevelopment opportunity, an investor can operate the asset as a Multifamily asset until the special use permit expires or can choose to redevelop immediately. The City of Euless has indicated a willingness to contribute to demolition or off-site improvement funds for the asset.

The Terrace is comprised of 108 apartment units including three-bedroom, two-bedroom, one-bedroom and studio units. Community amenities include two laundry facilities, a playground area, ample parking, and a central location. The property is located directly next to and south of Home Depot, Ross Dress for Less, Aldi Grocery, Office Depot, and many chain food restaurants, among many others.

Located off of Highway 157 and Highway 10, these assets sit directly in the middle of the Dallas/Fort Worth metroplex. They are in close proximity to the Dallas/Fort Worth Airport, Dallas Cowboys Stadium, Texas Rangers Stadium, Six Flags Over Texas, and offer easy access to downtown Fort Worth and Dallas.

Currently the asset is 34 percent occupied, giving a new investor a true value add opportunity through improved mangement.

Enclosed are comparables for both Multifamily assets, The Concord and The Terrace, and land comparables that have sold recently in the area.

Investment Highlights

Tremendous Value Added Opportunity Prime Location for Redevelopment Located Directly off of Highway 10 and Highway 157 Portfolio Opportunity with the 214-Unit Concord

Aparments

Located in Close Proximity to New Big Box Retail Centrally Located in Dallas/Fort Worth Metroplex High Visibility From Major Thoroughfares 1.2 Acres of Land

5

PROPERTY DESCRIPTIONThe Terrace ApartmentsEULESS, TX


INVESTMENT OVERVIEW

The Terrace Apartments are located in the HEB (Hurst-Euless-Bedford) area of the Dallas/Fort Worth metroplex.

The Hurst-Euless-Bedford (HEB) Community is just 18 minutes from Fort Worth, Texas, and just 23 minutes from

Dallas. A hub for transportation to the nation and the world, the HEB area offers the convenience of the Dallas-Fort

Worth International Airport, a network of major freeways and the new, state-of-the-art Trinity Railway Express, making

transportation between Dallas and Fort Worth nearly hassle-free.

The HEB Independent School District has been named in the top 10 percent of school systems nationwide. HEB ISD

students score at the highest, exemplary level in state testing. More than 80 percent of graduating seniors pursue further

education. More than 1,200 outstanding teachers serve 19,500 students.

Within close proximity to HEB, youll find nationally-recognized dance, symphony, opera and theatre, numerous science

and history museums, established arts districts and galleries, professional music venues, nightlife and more. The area

offers hundreds of quality golf courses and an abundant offering of tennis centers, parks, recreational centers, lakes for

boating and fishing, and athletic centers. Area attractions keep families entertained at Six Flags Over Texas, Texas State

Parks, summer water parks, the award-winning Fort Worth Zoo, the Dallas Zoo, wildlife refuge centers and more.

6



INVESTMENT OVERVIEW

The Offering

Property The Terrace Apartments

Property Address 306 Park Drive

Euless, TX 76040

Zoning Multi-Family Residential

Site Description

Number of Units 108

Number of Buildings Six

Number of Stories Two

Year Built 1964

Rentable Square Feet 81,804

Lot Size 1.29 Acres

Type of Ownership Fee Simple

Density 31.76 Units Per Acre

Parking Open

Parking Ratio 1.6

Landscaping Mature Trees and Shrubs

Topography Flat

Utilities

Water RUBBS

Phone Tenant Pays

Electric RUBBS

Gas RUBBS

Construction

Foundation Masonry

Framing Wood

Exterior Brick and Wood

Parking Surface Paved Asphalt

Roof Pitched Composition

Mechanical

HVAC Two-Pipe Chiller

Wiring Copper

Fire Protection Smoke Detectors

7



PROPERTY SUMMARY

Common Area Amenities

Unit Amenities

Playground

Two Laundry Facilities

Ample, Open Parking

Easy Access to Major Highways

Mature Trees and Shrubs

Tub and Shower Enclosures-Ceramic Tile

Ramp Entry

Spacious Floor Plan

Walk-In Closets

Frost-Free Refrigerator

8



AMENITIES

9PROPERTY DESCRIPTIONThe Terrace ApartmentsEULESS, TX


PROPERTY PHOTOS

10



PROPERTY PHOTOS

11



PROPERTY PHOTOS

Local Map Regional Map

12



AREA MAPS

13



AERIAL PHOTO

14



PORTFOLIO MAP

15



AREA PROPERTIES


APARTMENT: RECENT SALES

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

EmbassyApartments

TheArlingtonVillage

Apartments

ChestnutRidge

I&II

Average Cap Rate

17

APARTMENT: RECENT SALESThe Terrace ApartmentsEULESS, TX


CAP RATE AND GRM

Average Price per Square Foot

Average Price per Unit

0.00

4.00

8.00

12.00

16.00

20.00

24.00

28.00

32.00

36.00

40.00

BearCreek

Apartments

CollinsPark

Apartments

Villageon

PostOak

Apartments

EmbassyApartments

TheArlingtonVillage

Apartments

ChestnutRidge

I&II

0

3,000

6,000

9,000

12,000

15,000

18,000

21,000

24,000

27,000

30,000

33,000

BearCreek

Apartments

CollinsPark

Apartments

Villageon

PostOak

Apartments

EmbassyApartments

TheArlingtonVillage

Apartments

ChestnutRidge

I&II

18



PRICE PER SF AND PRICE PER UNIT

1)2)3)4)5)6)

The Terrace ApartmentsBear Creek ApartmentsCollins Park ApartmentsVillage on Post Oak ApartmentsEmbassy ApartmentsThe Arlington Village ApartmentsChestnut Ridge I & II

19



APARTMENT: RECENT SALES MAP

No. of Units: 262 Units Unit Type

Year Built: 1963 22 3 Bdr 2 Bath Flat

Sale Price: $6,200,000 40 2 Bdr 2 Bath Flat

Price/Unit: $23,664 20 2 Bdr 1 Bath Flat

Price/SF: $29.53 132 1 Bdr 1 Bath Flat

CAP Rate: N/A 52 Efficiency 1 Bath Flat

GRM: N/A

Bear Creek Apartments605 Del Paso StreetEuless, TX 76040





Price/SF: $20.27

CAP Rate: N/A

GRM: N/A

Close of Escrow: August 29, 2012

Close of Escrow: October 3, 2012

The Terrace Apartments306 Park DriveEuless, TX 76040


Year Built: 1964 3 3 Bdr 2 Bath

Sale Price: Request For Offer 57 2 Bdr 2 Bath

45 1 Bdr 1 Bath

3 StudioSubject Property

1

2 Collins Park Apartments808 East Sanford StreetArlington, TX 76011

20



RECENT SALES

Close of Escrow: December 27, 2012





Price/SF: $35.30

CAP Rate: 6.25%

GRM: N/A


Year Built: 1983 120 2 Bdr Flat


Price/Unit: $28,125

Price/SF: $37.91

CAP Rate: N/A

GRM: N/A

Village on Post Oak Apartments3808 Post Oak BoulevardEuless, TX 76040

Embassy Apartments1415 West Airport FreewayIrving, TX 75062

The Arlington Village Apartments408 North Fielder RoadArlington, TX 76012



Sale Price: $3,050,000 44 2 Bdr Flat


Price/SF: $35.85 5 Efficiency 1 Bath Flat

CAP Rate: 9.90%

GRM: N/A

Close of Escrow: August 9, 2012

Close of Escrow: September 25, 2013

3

4

5

21



RECENT SALES




Price/Unit: $33,807

Price/SF: $37.02

CAP Rate: 6.50%

GRM: N/A

Chestnut Ridge I & II8951 Randol Mill RoadFort Worth, TX 76120

Close of Escrow: February 29, 2012

6

22



RECENT SALES


LAND: RECENT SALES

1)2)3)4)5)6)

The Terrace ApartmentsLand: South Cooper StreetLand: Heritage WayLand: Interstate 20Land: Matlock RoadLand: Mayfield RoadLand: Road to Six Flags

6

LAND: RECENT SALESThe Terrace ApartmentsEULESS, TX


LAND: RECENT SALES MAP

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

Land:South

CooperStreet

Land:Heritage

Way

Land:Interstate

20

Land:Matlock

Road

Land:Mayfield

Road

Land:Road

toSix

Flags

AVERAGE PRICE/ACRE

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

Land:South

CooperStreet

Land:Heritage

Way

Land:Interstate

20

Land:Matlock

Road

Land:Mayfield

Road

Land:Road

toSix

Flags

7


AVERAGE PRICE/SF


PRICE PER SF AND PRICE PER ACRE

12

Land: South Cooper Street1606-1608 South Cooper StreetArlington, TX 76013

Land: Heritage Way701 Heritage WayHurst, TX 76053


Subject Property

Close of Escrow: 1/15/13 Lot Size (SF): 39,543

Sale Price: $525,000 Price/SF: $13.28

Down Payment: N/A Lot Size (Acres): 0.9100

Down Payment %: N/A Price/Acre: $576,923

Zoning: Commercial Lot Dimensions: N/A

8





Zoning: Multifamily Lot Dimensions: N/A



RECENT SALES

34

5

Land: Matlock Road8106 Matlock RoadArlington, TX 76002

Land: Mayfield Road1901 East Mayfield RoadArlington, TX 76014

Land: Interstate 20300 I-20 HighwayArlington, TX 76018






9


Sale Price: $1,197,900 Price/SF: $9.15

Down Payment: $203,643 Lot Size (Acres): 3.0100

Down Payment %: 17% Price/Acre: $397,973





Down Payment: $336,000 Lot Size (Acres): 0.8100

Down Payment %: 100% Price/Acre: $414,815



RECENT SALES

6 Land: Road to Six Flags699 Road to Six FlagsArlington, TX 76011


Sale Price: $3,500,000 Price/SF: $8.64




10



RECENT SALES


APARTMENT: ON MARKET COMPARABLES

1)The Terrace ApartmentsWoods Apartments

24

APARTMENT: ON MARKET COMPARABLESThe Terrace ApartmentsEULESS, TX


APARTMENT: ON MARKET COMPARABLES MAP

Woods Apartments1313 East Shady Grove Road

Irving, TX 75060



List Price: $1,725,000 2 2 Bdr 1.5 Bath Flat


Price/SF: $33.96 27 1 Bdr 1 Bath Flat

CAP Rate: 6.60%

GRM: N/A

Status: On Market

The Terrace Apartments306 Park Drive

Euless, TX 76040


Year Built: 1964 3 3 Bdr 2 Bath

Sale Price: Request For Offer 57 2 Bdr 2 Bath

45 1 Bdr 1 Bath

3 StudioSubject Property

1

25

APARTMENT: ON MARKET COMPARABLESThe Terrace ApartmentsEULESS, TX


ON MARKET COMPARABLES


LAND: ON MARKET COMPARABLES

1)The Terrace ApartmentsLand: Midcities Boulevard

12

LAND: ON MARKET COMPARABLESThe Terrace ApartmentsEULESS, TX


LAND: ON MARKET COMPARABLES MAP

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Land:Midcities

Boulevard

AVERAGE PRICE/ACRE

0

40,000

80,000

120,000

160,000

200,000

240,000

280,000

320,000

360,000

400,000

Land:Midcities

Boulevard

13


AVERAGE PRICE/SF


PRICE PER SF AND PRICE PER ACRE

1 Land: Midcities BoulevardMidcities Boulevard at Davis BoulevardNorth Richland Hills, TX 76180

The Terrace Apartments306 Park Drive

Euless, TX 76040

Subject Property

Close of Escrow: On Market Lot Size (SF): 185,823

List Price: $1,672,407 Price/SF: $9.00



Zoning: Retail Lot Dimensions: N/A

14



ON MARKET COMPARABLES


RENT COMPARABLES

Average Occupancy

0

10

20

30

40

50

60

70

80

90

100

Subject TheConcord

Apartments

BearCreek

Apartments

RoyalTerrace

Apartments

HillsideVillage

Apartments

ShadowCreek

Apartments

MissionPointeClub

Apartments

ManchesterApartments

VickerySquare

Apartments

WilshireManor

Apartments

BanderaRanch

Apartments

1 Bdr Studio

0

100

200

300

400

500

600

700

800

Subject TheConcord

Apartments

BearCreek

Apartments

RoyalTerrace

Apartments

HillsideVillage

Apartments

ShadowCreek

Apartments

MissionPointeClub

Apartments


VickerySquare

Apartments

WilshireManor

Apartments

BanderaRanch

Apartments

Average Rents - Studio and 1 Bedroom

27

RENT COMPARABLESThe Terrace ApartmentsEULESS, TX


OCCUPANCY AND AVERAGE RENTS

2 Bdr 3 Bdr

0

200

400

600

800

1,000

Subject TheConcord

Apartments

BearCreek

Apartments

RoyalTerrace

Apartments

HillsideVillage

Apartments

ShadowCreek

Apartments

MissionPointeClub

Apartments


VickerySquare

Apartments

WilshireManor

Apartments

BanderaRanch

Apartments

Average Rents - 2 and 3 Bedrooms

28



AVERAGE RENTS

1)2)3)4)5)6)7)8)9)

10)

The Terrace ApartmentsThe Concord ApartmentsBear Creek ApartmentsRoyal Terrace ApartmentsHillside Village ApartmentsShadow Creek ApartmentsMission Pointe Club ApartmentsManchester ApartmentsVickery Square ApartmentsWilshire Manor ApartmentsBandera Ranch Apartments

29



RENT COMPARABLES MAP

Subject Property

CommentsNo current concessions.Electric, gas and trash paid.

1

CommentsRUBBS.

No. of Units 108Occupancy: 34%Year Built: 1964


No. of Units 214Occupancy: 64%Year Built: 1968

No. of Units 221Occupancy: 92%Year Built/Renovated: 1971/2006

The Concord Apartments1001 Villa Drive

Euless, TX 76040

Bear Creek Apartments605 Del Paso

Euless, TX 76040

Unit Type Units SF Rent Rent/SF

3 Bdr 2 Bath Flat 12 1,230 $840 $0.68

2 Bdr 2 Bath Flat 8 950 $680 $0.72

2 Bdr 1 Bath Flat 104 912 $600 $0.66

1 Bdr 1 Bath Flat 76 649 $565 $0.87

1 Bdr 1 Bath Flat 8 625 $565 $0.90

Studio 1 Bath Flat 6 412 $410 $1.00

Total/Wtd. Avg. 214 $610 $0.73


3 Bdr 2 Bath Flat 20 1,097 $1,097 $1.00

2 Bdr 2 Bath Flat 75 821 - 1,004 $850 - $890 $0.95

1 Bdr 1 Bath Flat 126 524 - 645 $550 - $690 $1.06

Total/ Avg. 221 $862 $1.00

2

30



3 Bdr 2 Bath 3 920 $695 $0.76

2 Bdr 2 Bath 57 850 $665 $0.78

1 Bdr 1 Bath 45 650 $555 $0.85

Studio 3 448 $415 $0.93

Total/Wtd. Avg. 108 81,804 $583 $0.81


RENT COMPARABLES

No. of Units 120Occupancy: 90%Year Built/Renovated: 1964

Royal Terrace Apartments306 Martha Street

Euless, TX 76040



Hillside Village Apartments306 Vine Street

Euless, TX 76040

Shadow Creek Apartments311 South Industrial Boulevard

Euless, TX 76040

CommentsAll bills paid.No current concessions.

CommentsNo current concessions.Tenants pay all bills.

CommentsRUBS.No current concessions.


2 Bdr 1 Bath Flat 36 918 $615 - $685 $0.71

1 Bdr 1 Bath Flat 64 542 - 745 $415 - $560 $0.76

Total/ Avg. 100 $568 $0.74


2 Bdr 2 Bath Flat 12 982 $900 $0.92

1 Bdr 1 Bath Flat 108 525 - 745 $625 - $850 $1.16

Total/ Avg. 120 $818 $1.04


2 Bdr 2 Bath Flat 48 953 - 1,053 $740 - $785 $0.76

1 Bdr 1 Bath Flat 144 648 - 813 $565 - $705 $0.87

Total/ Avg. 192 $698 $0.82

5

4

31

RENT COMPARABLES

3



RENT COMPARABLES


Mission Pointe Club Apartments917 Del Paso Street

Euless, TX 76040



Manchester Apartments100 Manchester Drive

Euless, TX 76039

Vickery Square Apartments3015 Pipeline Road

Euless, TX 76040


2 Bdr 2 Bath Flat 34 970 - 1,050 $507 - $595 $0.55

1 Bdr 1 Bath Flat 24 730 $412 - $460 $0.60

Total/ Avg. 58 $493 $0.58


2 Bdr 2 Bath Flat 128 1,048 $690 - $725 $0.68

2 Bdr 1 Bath Flat 128 940 $630 $0.67

1 Bdr 1 Bath Flat 128 715 $550 $0.77

Total/ Avg. 384 $629 $0.71


2 Bdr 2 Bath Flat 76 1,008 - 1,072 $645 - $670 $0.63

2 Bdr 1 Bath Flat 40 948 $620 $0.65

1 Bdr 1 Bath Flat 144 612 - 720 $480 - $520 $0.75

Total/ Avg. 260 $592 $0.68

CommentsNo current concessions.Tenant pays all bills.

Comments$99 off first month's rent with proof of credit, all floorplans.Tenant pays all bills.

CommentsGas and trash paid.No current concessions.

8

7

32

RENT COMPARABLES

6



RENT COMPARABLES


Wilshire Manor Apartments1400 Sagebrush Trail

Euless, TX 76040


Bandera Ranch Apartments1881 West Airport Freeway

Euless, TX 76040


2 Bdr 2 Bath Flat 56 1,053 - 1,074 $835 $0.79

1 Bdr 1 Bath Flat 108 670 - 834 $620 - $680 $0.86

Total/ Avg. 164 $742 $0.83


2 Bdr 1.5 Bath Twnhs 4 1,300 $975 $0.75

2 Bdr 1 Bath Flat 4 1,182 $975 $0.82

2 Bdr 1 Bath Flat 32 800 $800 $1.00

1 Bdr 1 Bath Twnhs 20 750 $700 $0.93

1 Bdr 1 Bath Flat 58 650 $629 $0.97

Total/Wtd. Avg. 118 $815 $0.95

CommentsAll bills paid.No current concessions.

Comments$399 total move-in special, all floorplans.RUBS.

11

10

33

9



RENT COMPARABLES


MARKET OVERVIEW

35

MARKET OVERVIEWThe Terrace ApartmentsEULESS, TX

Market Highlights

High population growth

Dallas/Fort Worth's population growth from2010 to 2012 ranks among the highest in the

U.S. for a major metro.

Heavy concentration of headquarters

The Metroplex is home to 18 Fortune 500companies and many regional headquarters.

High median household income

The annual median household income inDallas/Fort Worth at $59,500 is well above

the U.S. median of $53,100.

Geography

Centrally located in the southern portion of the U.S., Dallas/Fort Worth is one of the largest MSAs in the nation,

stretching across 9,300 square miles in northern Texas. The eastern portion of the Metroplex is situated in the

Blackland Prairie region, so named for its fertile black soil. This area is dotted with man-made lakes, as well as

streams, creeks and rivers. The western portion of the Metroplex falls within the Fort Worth Prairie. Much of this

former ranchland sits atop a natural oil field and the Barnett Shale geological formation.


Dallas-Fort Worth-Arlington Metro

DALLAS-FORT WORTH

36

MetroThe Dallas/Fort Worth metropolitan statistical area is

the fourth largest in the nation and composed of 12

counties. The largest of which are Dallas and Tarrant,

with an aggregate of more than 6.6 million residents.

Population growth in the region was tremendous

during the past decade, outperforming most U.S.

metros. The metro is expected to expand 1.5 percent

per year through 2017.

Largest Cities: Dallas/Fort Worth MSA

MARKET OVERVIEW

Airports

Dallas/Fort Worth International Airport Dallas Love Field Airport 13 smaller airportsMajor Roadways Interstates 20, 30, 35, 45, 635 and 820 Toll roads, turnpikesRail Freight - Union Pacific, BNSF, Kansas City

Southern Passenger - Trinity Railway Express, Amtrak Light rail - DARTPort International Inland Port of Dallas


Infrastructure

The region's transportation network is continually

evolving to improve traffic flow as freeways are

expanded and tollways and turnpike miles are added to

improve traffic flow. Recent projects include the LBJ

Freeway and State Highway 121. Dallas Area Rapid

Transit (DART) operates 612 buses and an 85-mile

light-rail system that serve Dallas and surrounding

cities. Trinity Railway Express is a commuter rail that

connects Dallas, Fort Worth and the Dallas/Fort

Worth International Airport.

The business community has easy access to major

commercial centers around the globe via Dallas/Fort

Worth International Airport, home to American

Airlines; Dallas Love Field, home to Southwest

Airlines; and Alliance Airport. The Metroplexs

strategic location on Interstate 35 and the NAFTA

Superhighway, its intermodal facilities, and the

International Inland Port of Dallas, ensure its status as

a national distribution hub for years to come.

The Dallas/Fort Worth MSA is:

200 miles from Austin 230 miles from Houston 880 miles from Denver 925 miles from Chicago


2012 Estimate Sources: Marcus & Millichap Research Services, Experian

Dallas 1,241,500Fort Worth 773,600Arlington 377,100

Plano 270,400Garland 234,100Irving 225,000

DALLAS-FORT WORTH

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Economy

The Dallas/Fort Worth economy continues to evolve.

Companies migrate to the area attracted by a friendly

business climate, warm weather, no state income tax,

and a right-to-work policy. These qualities combined

with an educated work force, diverse population and

low housing costs have led to extraordinary growth in

the Metroplex and will continue to bring in new

businesses. Economic expansion was further fueled by a

rise of telecommunications and high-tech companies.

The region is home to 18 Fortune 500 companies in

diverse economic sectors including retail, food,

healthcare services, energy and telecommunications.

They include ExxonMobil, AMR, AT&T, Kimberly-

Clark and J.C. Penney. The area also has one of the

highest concentrations of privately held companies,

with at least $1 billion in annual revenues

headquartered in the area. More than 10,000 national

and international corporations maintain regional and

subsidiary headquarters in the Metroplex.

Dallas/Fort Worths central location and vast

intermodal facilities allow the Metroplex to be the pre-

eminent distribution hub for the burgeoning

Southwest, as increased energy costs have boosted the

need for a greater regionalized transportation

distribution system. Trade and transportation

companies provide more than one-fifth of total

employment and infuse billions of dollars each year

into the local economy.


DALLAS-FORT WORTH

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Labor

Dallas/Fort Worth is one of the nations largest employment markets, containing more than 4.3 million workers.

The Metroplex fared better than most of the nation during the past five years with more than 30,000 jobs added

and local employers are forecast to create nearly 362,000 jobs through the end of 2017. Employment growth can

be attributed to the continuation of north-to-south migration; the Metroplexs quality of life; lack of state income

taxes, which has attracted employees; and pro-business community evolution, which has drawn both businesses

and workers.

During the recession, many employment sectors continued to expand, unlike most other metro areas. Recent

employment gains have occurred in higher-paying, diversified fields including healthcare, defense manufacturing,

telecommunications and professional services.

Over the next five years, the construction sector is forecast to register the greatest growth to accommodate the

area's expanding infrastructure. Following construction are government, education and health services, and other

services, each with an expansion of more than 3.5 percent. The trade, transportation and utilities sector is an

important economic driver in the region, employing more than 618,000 workers. This sector is forecast to grow by

2.3 percent over the next five years.

DALLAS-FORT WORTH

39


Employers

Dallas/Fort Worth has evolved from a commodities-

based economy to a high-tech and telecommunications

hub, as well as a haven for corporate headquarters; 18

Fortune 500 companies and nearly 50 Fortune 1000

businesses are housed in the area, many of which are in

Las Colinas.

Two major airlines are headquartered locally.

American Airlines operates out of Dallas/Fort Worth

International Airport, and Southwest Airlines operates

from Dallas Love Field.

Texas Instruments is one of the primary employers of

high-tech workers. The majority of technology-based

companies in the region are smaller firms.

Telecommunications is a growing industry, with most

of the major companies maintaining offices in the area,

including Verizon and AT&T.

Lockheed Martin Corp., based in Fort Worth, anchors

the defense-related manufacturing sector. Other major

defense firms include Bell Helicopter Textron Inc. and

Raytheon Co.

The energy sector includes companies such as

ExxonMobil, Fluor and Atmos Energy. This segment

is expanding due to exploration and gas extraction from

the Barnett Shale formation which could bring billions

of dollars to the North Texas economy.

Major Employers


Walmart Stores, Inc.

AMR Corp. (American Airlines)

Texas Health Resources

Baylor Health Care System

JP Morgan Chase

Lockheed Martin

HCA Healthcare

Bank of America Corp.

Verizon Communications, Inc.

DALLAS-FORT WORTH

40


Demographics

Dallas/Fort Worth's population grew significantly

during the past decade, with the addition of more than

1.2 million residents in that time, making the metro

one of the largest in the nation. Since 2000, the greatest

percentages of population gains have been posted in

Collin, Denton and Tarrant counties.

The Metroplexs phenomenal population growth is

fueled by strong natural increases, as well as the nations

north-to-south migration. The region will continue to

benefit from companies and people moving to the

South for more favorable weather and economic

prospects. The Metroplex remains relatively young; the

median age, at 34.1 years, is well below that of 37.5 for

the nation, as senior citizens age 65 and over, account

for just 9 percent of the regions population.

Unlike many other fast-growing Sun Belt metros,

Dallas/Fort Worth boasts high educational attainment.

Approximately 87 percent of residents above the age of

25 have earned a high school diploma, and 30.8

percent have attained a bachelors degree.

The median household income sits at $59,500 per year,

above the U.S. median of $53,100. Housing prices are

low compared with other cities in Texas, which has

afforded 56 percent of households homeownership.


DALLAS-FORT WORTH

41


Quality Of LifeThe Metroplex provides residents an unparalleled

lifestyle at a reasonable cost. The region continually

ranks high for its affordability when compared with

other large metros. The cost of living should remain low

over the coming years, as income growth is expected to

far exceed the rise in home prices.

A temperate climate provides ample opportunities for

sports enthusiasts to enjoy the outdoors. The region

boasts 150 public and private golf courses, as well as

several reservoirs. Dallas/Fort Worth hosts professional

teams in baseball, football, hockey and basketball.

Dallas/Fort Worth is not only recognized for its sports

teams accomplishments, but also for hosting world-

recognized cultural institutions. The region boasts more

than 150 museums and art galleries. Fort Worth is

home to the internationally renowned Kimbell Art

Museum and Modern Art Museum of Fort Worth.

Metroplex residents are proximate to nationally

recognized health centers: Parkland Memorial Hospital,

Baylor University Medical Center and Texas Health

Harris Methodist Hospital Fort Worth. Four medical

schools support Dallas/Fort Worths excellent healthcare

providers.

The University of Texas at Dallas, Southern Methodist

University, Texas Christian University, Texas Woman's

University and the University of North Texas at Dallas

are among the numerous institutions of higher learning

located in the Metroplex.


DALLAS-FORT WORTH

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MARKET OVERVIEW

No End in Sight for Metroplex Apartment Building Boom

Dallas/Fort Worth has been a hotbed for economic activity this year, holding apartment vacancy near a five-yearlow despite surging deliveries. Throughout 2013, the Class A sector, which stands to record a dramatic uptick ininventory this year, will benefit from strong growth in the traditionally higher-paying professional and businessservices sector. Dallas/Fort Worths relatively low costs of living and doing business, along with its pro-businessclimate, remain lures for corporate relocations and expansions. Renter demand for Class B/C apartments is also onan upward trajectory thanks to ongoing job creation in the trade, transportation and utilities, and manufacturingsectors. Blue-collar job creation should continue apace in the near term as Motorola staffs a new smartphone plantnorth of Fort Worth and Amazon.com, BMW, and various other large companies target the Metroplex fordistribution facilities. Dallas/Fort Worths dramatic economic recovery has not gone unnoticed by developers, whowill deliver more than 13,000 apartments in 2013, up more than 80 percent from last year. Year to date, vacancydeclined modestly, and it should remain fairly stable through the second half as strong job creation and populationgrowth drive outsized renter demand. Upward pressure on vacancy could start building next year, however, as11,000 units are already underway and pegged for delivery in 2014, and the planning pipeline continues toexpand.

Sales accelerated over the past year as an increase in listings was met with heightened investor demand. In theClass A sector, which remains dominated by REITs and institutional investors, cap rates slipped to the low- tomid-5 percent range, with best-of-class assets in Dallas trading even lower. Class B cap rates compressed roughly50 basis points over the past year to the mid-6 to low-7 percent range due to low interest rates and the return ofCalifornia, East Coast and Canadian buyers. Out-of-state capital is focused mostly on Class B assets with 100-plusunits, which tend to offer stable returns and can also be candidates for repositioning. While demand will remainelevated in the near term, an uptick in interest rates may begin to counter cap rate compression.


Employment: Metroplex payrolls will grow by 3.2 percent or 96,700 jobs in 2013.While payrolls will rise across nearly all major sectors, professional and businessservices employers will account for the most hiring. During 2012, job growth reached3.6 percent.

Construction: Apartment completions will total approximately 13,500 units in 2013.While this years total reflects a sizable increase from 2012, when 7,455 units weredelivered, the forecast remains 26 percent below the markets cyclical peak in 2009.

Vacancy: Dallas/Fort Worth apartment vacancy will end 2013 at 6.6 percent, up 30basis points from last year. Despite the supply-induced uptick, vacancy will remainfavorable relative to the markets historical norm.

Rents: Effective rents will rise 4.5 percent in 2013 to $863 per month. The increasewill be partially attributable to the delivery of thousands of top-tier units to themarketplace, in addition to a wave of renovations. In 2012, Metroplex rents advanced2.9 percent.

2013 Annual Apartment Forecast


DALLAS-FORT WORTH

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Economy

Metrowide employment increased an estimated 3.1 percent, or by 92,100 jobs, during the 12-month periodending in June. During the corresponding period one year earlier, local payrolls increased 2.8 percent.

The professional and business services sector posted the strongest job creation over the past year with theaddition of 21,500 workers, lending strength to Class A apartment demand. The typically lower-paying leisure

and hospitality, and trade, transportation and utilities sectors followed, with gains of approximately 15,000

jobs each.

Motorola recently announced plans to open a smartphone plant at Alliance. Ambitious plans for the facility,which was once occupied by Nokia, include hiring 2,000 workers and starting production by late summer. Job

creation in the Alliance area should boost apartment demand in North Fort Worth, which currently postsabove-average vacancy.

Outlook: Metroplex payrolls will grow by 3.2 percent, or 96,700 jobs, in 2013. During 2012, employmentincreased 3.6 percent.


Housing and Demographics

The price of a single-family home in the Metroplex rose to $166,900 in the second quarter, reflecting a 13percent jump from 18 months earlier. The pace of appreciation did slow considerably in recent months,though, as mortgage rates ticked up.

Assuming a 20 percent downpayment, the mortgage payment for a median-priced home in Dallas/Fort Worth,including estimated taxes and homeowners insurance, exceeds the average apartment rent by almost $120 permonth.

Over the past 12 months, home builders pulled almost 20,000 single-family permits, up 33 percent from oneyear earlier. Multifamily permits increased 27 percent during the same span to 15,400 units.

Outlook: Nationally, an uptick in mortgage rates starting in late May led to a sizable reduction in mortgageapplications, a trend that was likely mirrored at the metro level. If rates remain elevated or rise further this year,

the resulting reduction in housing affordability should benefit local apartment property owners.

* Forecast** Trailing 12-month period

DALLAS-FORT WORTH

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Construction

Developers delivered 10,200 apartments to the Metroplex over the last four quarters, up from 6,200 units inthe corresponding period one year ago. Approximately 80 percent of the new supply came online in the Dallasportion of the metro.

The Intown submarket will lead deliveries in 2013 with 2,315 new units. Carrollton/Farmers Branch/Addisonwill take second, with approximately 1,240 apartments slated to come online this year.

In Fort Worth, completions will be concentrated in the Intown/University submarket this year. In the firsthalf, 370 units were delivered in the area, and an additional 465 apartments will be delivered by year end.

Outlook: Metroplex apartment completions will total approximately 13,500 units in 2013, up from 7,455units last year but still 26 percent below the last cyclical peak in 2009.

Vacancy

After slipping to 5.9 percent in the second quarter of 2012, vacancy has remained flat alongside apartmentcompletions. As of midyear, the overall rate in the Metroplex remains 5.9 percent.

In Dallas, most tightening over the past year occurred in the South Dallas County submarket, where no newsupply was brought online. Vacancy in the area dipped 130 basis points to 5 percent. The North Dallas

submarket followed with a 110-basis point reduction to the high-4 percent range.

Within the Fort Worth portion of the metro, the South submarket posted the most improvement, withvacancy declining 250 basis points to a still-high 8.2 percent. The lower-vacancy Hurst/Euless/Bedford

submarket remained flat over the past year as completions remained modest.

Outlook: Metroplex apartment vacancy will end 2013 at 6.6 percent, up 30 basis points from last year.Despite the supply-induced uptick, vacancy will remain favorable relative to the markets historical norm.



DALLAS-FORT WORTH

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Rents

Effective rents in the Metroplex increased 3.7 percent over the past year to $849 per month. Fort Worth ledthe market with a gain of 5.1 percent, driving its average to $766 per month, while rents in Dallas rose 3.3

percent to $878 per month.

Of the top five submarkets for rent growth over the past year, all but two are in Forth Worth. Arlington andEast Dallas took the first two spots with gains of 8.6 percent and 8.5 percent, respectively.

Throughout the Metroplex, the only decline in rents occurred in Oak Lawn/Park Cities submarket, whererents dropped 2.5 percent to $1,307, remaining the second highest to InTown Dallas.

Outlook: Effective rents will rise 4.5 percent in 2013 to $863 per month. The increase will be partiallyattributable to the delivery of thousands of top-tier units to the marketplace. In 2012, Metroplex rents

advanced 2.9 percent.

Sales Trends**

Apartment property sales over the past 12 months rose by more than 45 percent compared with thecorresponding period last year. Deals involving 50 or fewer units increased the most, but this segment of the

market accounted for just one- quarter of all transactions.

Approximately half of the transactions posted during the past year were for properties of 100 to 300 units.While in-state investors acquired most of these deals, California buyers recorded a notable increase in

acquisitions.

Cap rates vary greatly by asset quality and location. Newer Class A properties in core submarkets, for example,can trade in the 5.25 to 5.5 percent range, while Class C assets generally change hands between 7.5 and 9.0

percent.

Outlook: Competition has become particularly strong for 1980s properties with 100-plus units. Assets of thisvintage, especially those in core submarkets, can offer significant rental upside by completing mostly cosmetic

enhancements.



DALLAS-FORT WORTH

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Capital Markets

The rate on the 10-year U.S. Treasury rose to the mid-2 percent range after comments from Fed ChairmanBernanke were interpreted to mean that the central bank would start tapering stimulus sooner than expected in

late 2013. Subsequent statements from Fed officials were intended to reassure the markets that the winding

down of bond purchases would be neither peremptory nor severe. The immediate reaction of multifamily

lenders was to hold rates firm on transactions in the pipeline, but quote higher rates on new inquiries.

Cap rates will be affected by higher interest rates, although the two will not move in a one-to-one relationship.Most immediately, cap rates will rise on Class A assets, where spreads were already quite narrow before the

Treasury re-priced. With long-term rates well below historical trends, however, opportune conditions exist for

borrowers to either get acquisition financing or refinance.

The 10-year CMBS loans will re-price as interest rates settle, and other lenders will follow. Local and regionalbanks were issuing loans of $3 million and more for 10 years from 3.75 percent to 4.25 percent this year, but

are likely to price 75 basis points higher. Competition remains keen as new sources of capital emerge. Five-year

loans, meanwhile, will price from 4.25 percent to 4.625 percent.

Government agencies Fannie Mae and Freddie Mac continue to assume leading roles in multifamily financeand account for most of the debt placed in the sector. The agencies will underwrite deals at up to 80 percent

LTV and rates 2.75 percent over the seven-year Treasury.

DALLAS-FORT WORTH

Sources: Marcus & Millichap Research Services, Bureau of Labor Statistics, CoStar Group, Inc., Economy.com, National Association of Realtors, RealCapital Analytics, MPF Research, TWR/Dodge Pipeline, U.S. Census Bureau.


DEMOGRAPHIC ANALYSIS

1 Mile 3 Miles 5 Miles

2000 Population 11,501 78,725 196,982

2010 Population 13,296 88,871 205,117

2013 Population 13,745 92,472 213,137

2018 Population 14,708 98,263 220,663

2000 Households 4,328 34,996 86,152

2010 Households 4,811 39,297 89,389

2013 Households 4,982 40,929 92,977

2018 Households 5,297 43,492 96,288

2013 Average Household Size 2.72 2.25 2.29

2013 Daytime Population 5,800 41,508 97,557

2000 Median Housing Value $94,829 $100,940 $111,195

2000 Owner Occupied Housing Units 42.59% 39.48% 41.66%

2000 Renter Occupied Housing Units 54.40% 55.17% 53.58%

2000 Vacant 3.89% 4.64% 4.92%



2013 Vacant 6.87% 5.95% 6.69%



2018 Vacant 6.98% 6.04% 6.77%

$ 0 - $14,999 12.9% 8.1% 8.3%

$ 15,000 - $24,999 12.9% 10.1% 10.0%

$ 25,000 - $34,999 12.7% 12.9% 11.8%

$ 35,000 - $49,999 16.7% 17.0% 16.5%

$ 50,000 - $74,999 21.1% 20.7% 19.3%

$ 75,000 - $99,999 10.8% 13.2% 11.8%

$100,000 - $124,999 6.6% 8.4% 8.6%

$125,000 - $149,999 3.0% 4.0% 4.9%

$150,000 - $199,999 1.5% 3.1% 4.4%

$200,000 - $249,999 0.9% 0.9% 1.8%

$250,000 + 1.1% 1.5% 2.7%

2013 Median Household Income $44,662 $51,892 $53,574

2013 Per Capita Income $21,266 $30,267 $33,871

2013 Average Household Income $58,645 $68,260 $77,585

Demographic data 2012 by Experian.

48

DEMOGRAPHIC ANALYSISThe Terrace ApartmentsEULESS, TX


DEMOGRAPHIC REPORT

Geography: 5 Miles

Population

In 2013, the population in your selected geography was 213,137 . The population has changed by 8.20% since 2000. It is estimatedthat the population in your area will be 220,663 five years from now, which represents a change of 3.53% from the current year. Thecurrent population is 48.8% male and 51.1% female. The median age of the population in your area is 35.6 , compare this to the U.S.average which is 37. The population density in your area is 3,126.84 people per square mile.

HouseholdsThere are currently 92,977 households in your selected geography. The number of households has changed by 7.92% since 2000. Itis estimated that the number of households in your area will be 96,288 five years from now, which represents a change of 3.56%from the current year. The average household size in your area is 2.29 persons.

IncomeIn 2013, the median household income for your selected geography is $53,574 , compare this to the U.S. average which is currently$53,535. The median household income for your area has changed by -3.34% since 2000. It is estimated that the median householdincome in your area will be $57,471 five years from now, which represents a change of 7.27% from the current year.

The current year per capita income in your area is $33,871 , compare this to the U.S. average, which is $28,888. The current yearaverage household income in your area is $77,585 , compare this to the U.S. average which is $75,373.

Race & EthnicityThe current year racial makeup of your selected area is as follows: 67.90% White, 13.93% African American, 0.60% Native Americanand 7.94% Asian/Pacific Islander. Compare these to U.S. averages which are: 72.20% White, 12.65% African American, 0.96%Native American and 5.01% Asian/Pacific Islander.

People of Hispanic origin are counted independently of race. People of Hispanic origin make up 18.85% of the current yearpopulation in your selected area. Compare this to the U.S. average of 16.55%.

HousingThe median housing value in your area was $111,195 in 2000, compare this to the U.S. average of $110,781 for the same year. In2000, there were 37,745 owner occupied housing units in your area and there were 48,544 renter occupied housing units in yourarea. The median rent at the time was $608 .

EmploymentIn 2013, there are 97,557 employees in your selected area, this is also known as the daytime population. The 2000 Census revealedthat 73.0% of employees are employed in white-collar occupations in this geography, and 26.9% are employed in blue-collaroccupations. In 2013, unemployment in this area is 2.81% . In 2000, the median time traveled to work was 22.7 minutes.


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SUMMARY REPORT

Number of people living in a given area per square mile.


50



POPULATION DENSITY

The number of people employed in a given area per square mile.


51



EMPLOYMENT DENSITY

Average income of all the people 15 years and older occupying a single housing unit.


52



AVERAGE HOUSEHOLD INCOME

EULESS, TX

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