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GRACIOUS ESTATES

GRACIOUS ESTATES MANUFACTURED HOME COMMUNITY 777 S EISENHOWER AVE MASON CITY, IOWA 50401

For a video tour of Gracious Estates go to: http://youtu.be/AlZnUN6khNY

184 SITE MHC INVESTMENT OPPORTUNITYCOMMUNITY PRICE: $2,600,000

TERMS: ALL CASH

G R AC I O U S E S TAT E S Community Price : $2,600,000 Terms: All Cash

184 SITE MHC INVESTMENT OPPORTUNITYCOMMUNITY PRICE: $2,600,000

TERMS: ALL CASH

SITE INFORMATION

ADDRESS 777 S. Eisenhower Ave., Mason City, IA 50401

COUNTY Cerro Gordo

TAX MAP PARCEL 070730101000/070730101100

SITES 184 (177 MH/7 RV)

COMMUNITY TYPE All Age

YEAR BUILT 1970’s

COMMUNITY LAND 29.69 acres (6.19 sites/acre)

ADDITIONAL LAND 5.79 acres

MH PHYSICAL OCCUPANCY 79.1% (140 sites as of 7/1/13)

MH ECONOMIC OCCUPANCY 78.5% (139 sites as of 7/1/13)

MARKET LAND LEASE RENTS $212 (includes trash)

HOME NOTES 23 (current balance of $289,813 as of 7/1/13)

HOME INVENTORY 1 (retail price of $19,500)

ROADS Concrete (some asphalt overlay)

COMMUNITY WEBSITE

http://brentoncommunities.com/mason_city.php

UTILITIES

WATER Mason City Utility (submetered and billed to tenants)

SEWER Mason City Utility (billed to tenants)

ELECTRICITY CREI Alliant Energy (direct billed to tenants)

GAS CREI Alliant Energy (direct billed to tenants)

TRASH Holt (included in rent)

INVESTMENT BREAKDOWN

COMMUNITY $2,600,000

HOME NOTES BALANCE* $289,813

HOME INVENTORY* $19,500

ADDITIONAL LAND* $200,000

TOTAL $3,109,313

* Notes, Home Inventory, and Additional Land does NOT have to be purchased with the community.

• Gracious Estates is conveniently located on the West side of Mason City, IA, just off of Highway 122, which cuts through the center of the city and is known as the path of growth towards Interstate 35.

• Mason City has a population of approximately 28,000 and is located minutes from Interstate 35, which leads to Minneapolis, MN roughly two hours to the North and Des Moines, IA two hours to the South.

• The community is in close proximity to several of Mason City’s major employers including Mercy Health Center, the largest employer in the city, and the Armour Eckrich meat processing plant, both less than a mile from the community.

• Other major employers in the city include Curries Company, Principal Financial Group, Woodharbor Doors & Cabinetry, and a Kraft Foods plant responsible for the nation’s Jell-O production.

• Close proximity to some of the area’s best retail and restaurant destinations including the Walmart next door, Target, Menards, K-Mart, Cinema West, Mills Fleet Farm, and the North Iowa Events Center and Ice Arena.

• The community is also minutes from Clear Lake, a popular, spring fed lake and recreation destination known for its fishing and boating.

INVESTMENT HIGHLIGHTS

AREA HIGHLIGHTS

GRACIOUS ESTATES

• Opportunity to acquire a well maintained, stabilized, all age community with an attractive layout within Mason City, IA.

• The community is serviced by municipal utilities through Mason City and residents are billed back for water and sewer.

• In addition to the community, the offering includes 23 home notes priced at the current balance and 1 inventory home at retail price (all do NOT have to be sold with the community).

• Additional 5.79 acres available South of the subject with frontage on 9th St. Ideal for future expansion of community or the addition of a self storage facility that could cater to a new 55+, upscale apartment complex just to the East.

• Tremendous upside potential with an opportunity to bring in new homes and continue a sales or leasing program.

• May qualify for attractive non-recourse debt.• No rent control in Iowa.

G R AC I O U S E S TAT E S F I N A N C I A L A N A LY S I S

UNDERWRITING ASSUMPTIONS

1. Actual 2010, 2011, 2012 and June’13 T-6 numbers based on financials provided by the client

2. Proforma GSR based on the July 1, 2013 Rent Roll

3. Utility and Other Income grown 3% from 2012 Actuals

4. Adjusted Utilities are grown 3% from 2012 Actuals

5. Proforma Taxes = 2012 Tax grown by 3% (2012 mill rate = ~ 3.4115%)

6. Proforma Capital Reserves do not reflect actual expense and are estimated at $50/site

7. New trash contract with Holt as of 5/1/13 is $1,291 per month or $15,492 annually

8. RV Income in the Proforma based off of 3 occupied RV sites (as of July 1, 2013) - it is included in Total Rental Income in historical financials

184 SITE MHC INVESTMENT OPPORTUNITYCOMMUNITY PRICE: $2,600,000

TERMS: ALL CASH

1

2 Gross Scheduled Rent

Less: VacancyLess: Bad DebtLess: ConcessionsTotal Rental Income

3 Plus: Utility Income3 Plus: Other Income8 Plus: RV Income

Total Other IncomeEffective Gross Income

EXPENSESRepairs & MaintenancePayrollAdministrativeMarketingProfessional Fees

4 Utilities Electricity & Gas Water & Sewer

7 TrashTotal Variable Expenses

5 TaxesInsuranceManagement FeeTotal Operating Expenses

6 Plus: Capital ReservesTotal Expenses

NET OPERATING INCOME

5,13321,497

8,850$215,946

$213,986

$207,096

15,492$136,907

43,559

5,17147,214

29,2059,735

8852,655

$429,931

Proforma Exp

$26,550

85,326

13,8437,560

$344,60563,923

$450,288

96,6774,5034,503

50

$1,220

29

5.00%

$1,170

88

$773246

29

267

165

55

5

15

per unit

$150

482

78

43

76.53%

361

1.00%

1.00%

21.47%

49

333

1.89%

0.00%

59,0268,620

410

067,646

$18,95824,014

$336,940

00

6,474

$204,522

289

115

14

28

259

$71088

7,77851,120

$404,586

6,672

20,220

Actual Exp

$132,146

1632,840

5,056

44

2,448

5,02045,839

427

56

12

0.00%

0.00%

351

76

0

per unit

140

256

395

0

90.07%

327

68

0.00%

9.93%

0.00%

69,883$356,802

0

$286,91957,83412,049

031,646

0 00.00%

10,5763.11%0

96.89% $329,237 98.11%

13,44062,061

0 0

$20,091Actual Exp

26,261

38

382

136

$404,73875,501

161,495

8,28027,43224,692

2

$114

per unit

$107$199

Actual Exp

$35,169per unit

1,411 15959,153

155

529,913

2,0683

4,444

0$161,860

6,36145,264

13,436

23840,121

15,608$116,028

41,388 42,156

36

74

$77520,35413,031

16,234

42,642241$125,754

76

$137,093 $747227

242 42,810

4,8802825

$656

$148

92

47

8

8

34

5,02028 29

5.00%

Actual Expper unit

$1,130 $200,064$185,082

$185,0820

$200,064$1,1300

6,119$188,213

00

$188,213$1,063

1.71%

0

$1,046

12,1520.00% 3.00%

$1,046$1,0630

406

$394,158

0

234

6,101

$232,298 $219,656$168,589

0

$914

$914 $161,860

0

71,791

60,58811,203

0

342

63

$322,36798.18%

0.00%

1.82%0

5,987

$328,354

00.00%

INCOME$339,813$318,565

2012 June'13 T-6 Inc Ann2011

0.00%$343,414

Proforma

Financial Analysis

2010

GRACIOUS ESTATES

N Taft A

ve

S Taft A

ve

Mallad A

ve

S Eisenhower A

ve

19th St SW

N Pierce A

ve

S Pierce A

ve

15th St SW

122 18

GRACIOUS ESTATES

®

MERCYCANCERCENTER

NORTH IOWA MERCYHEALTH CENTERWEST CAMPUS

DOllAR TREE STORES, INC.

G R AC I O U S E S TAT E S A E R I A L & D E M O G R A P H I C S

184 SITE MHC INVESTMENT OPPORTUNITYCOMMUNITY PRICE: $2,600,000

TERMS: ALL CASH

DEMOGRAPHIC INFORMATION Source 2013 Claritas, Inc. 1 mile 3 mile 5 mile

863 10,841 27,006866 10,685 26,726

-0.13% -1.29% -1.03%0.36% -1.44% -1.04%

227 2,848 7,024229 2,828 6,983

0.44% -0.57% -0.60%0.88% -0.72% -0.58%

27.56% 33.10% 33.30% Owner Occupied Percentage 72.44% 66.88% 66.70%

$59,739 $53,105 $51,550$98,451 $97,181 $95,896 2013 Est. Median Owner-Occupied Housing Value

2013 Est. Average Family Household Income

2013 Population Estimate 2018 Population Projection Population Growth 2010-2013 Population Growth Estimate 2013-2018

Renter Occupied Percentage

Family Household Growth Estimate 2013-2018

2013 Family Household Estimate 2018 Family Household Projection Family Household Growth 2010-2013

GRACIOUS ESTATES

122

60

20

18

218

63

61

14

30

35

80

80

90

90

29

94

MASON CITY

CEDAR RAPIDS

ST. PAULMINNEAPOLIS

DES MOINES

DIAMOND GROVE AERIALG R AC I O U S E S TAT E S LO C AT I O N M A P & E M P LOY M E N T I N F O

184 SITE MHC INVESTMENT OPPORTUNITYCOMMUNITY PRICE: $2,600,000

TERMS: ALL CASH

MERCY MEDICAL CENTER• Top 100 Hospital in the Nation – 2012 (Thomson-Reuters)

• It is the largest employer in Mason City

CURRIES COMPANY• Industry leader in the manufacturing of metal doors and frames

• Employs roughly 950 people in Mason City

PRINCIPAL FINANCIAL GROUP• Fortune 500 financial services company headquartered in Des Moines, IA

• Mason City branch located downtown in the Principal Financial Group Building

KRAFT FOODS• Mason City is home to Kraft’s Jell-O processing plant

ARMOUR ECKRICH• Meat processing plant known for the production of meatballs, pepperoni,

sausage, salami, and other deli products

GRACIOUS ESTATES

122 12218

65

65

GRACIOUS ESTATES

Armour Eckrich

North Iowa MercyHealth CenterWest Campus

Curries Company

Principal Financial GroupMercy Cancer Center

Kraft Foods

MASON CITY

4th St SW

9th St SW

S Eisenhower A

ve

GRACIOUS ESTATES

ADDITIONALLAND

901 S MoPac ExpresswayBarton Oaks Plaza II, Suite 275Austin, TX 78746

Todd Fletchertfletcher@arausa.com T 303-260-4470

Brian Vitabvita@arausa.com T 512-637-1221

RELATIONSHIPS THAT DELIVER RESULTS.

www.arausa.com© ARA. All Rights Reserved

This information has been derived from sources deemed reliable. However, it is subject to errors, omissions, price change and/or withdrawal, and no warranty is made as to the accuracy. Further, no warranties or representation shall be made by Apartment Realty Advisors (ARA) and/or its agents, representatives or affiliates regarding oral statements which have been made in the discussion of the above property. This presentation, prepared by ARA, was sent to the recipient under the assumption that s/ he is a buying principal. Any potential purchaser is advised that s/ he should either have the abstract covering the real estate which is the subject of the contract examined by an attorney of his/her selection, or be furnished a policy of title insurance. Do not contact the Property.

ARA NATIONAL MANUFACTURED HOUSING GROUP:Andrew Shihashih@arausa.com T 512-637-1219

G. Reid Teaneyrteaney@arausa.com

wInformation for Gracious Estates is available on our website at: www.arausa.com/listinglab/graciousestates

For a video tour of Gracious Estates go to: http://youtu.be/AlZnUN6khNY