661 Lake Street

Downtown RenoDowntown RenoUniversity of

Nevada, reno CampusUniversity of

Nevada, reno Campus

S O L O M O N C O R D W E L L B U E N Z CLIENT NAME ADDITIONAL NAME

661 Lake StreetA 416 Unit Luxury Student Housing and Micro-Unit Residential Development Steps from the University of Nevada, Reno

Overpass to Campus

Overpass to Campus

Site of newBusiness School

Site of newBusiness School

LOCATED IN AN OPPORTUNITY ZONE

Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, “HFF”), HFF Securities L.P. and HFF Securities Limited (collectively, “HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment advisory, equity placement, funds market-ing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.

HFF has prepared this confidential Loan Submission, which contains brief, selected information per-taining to the business and affairs of the Property. This confidential information does not purport to be all-inclusive nor does it purport to contain all the information, which a prospective lender may desire. Neither the Borrower/Owner, nor HFF nor any of their respective equity holders, officers, employees or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this loan submission or any of its contents, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the use of the information contained herein. The information contained herein is subject to change.

The Recipient agrees that (a) the Loan Submission and its contents are confidential information, except for such information contained in the Loan Submission, which is a matter of public record, or is provided from sources available to the public (b) the Recipient, the Recipient’s employees, agents and consul-tants (collectively, the “need to know parties”) will hold and treat it in the strictest of confidence, and the Recipient and the need to know parties will not, directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without the prior written authorization of HFF and the Borrower/Owner, and (c) the Recipient and the need to know parties will not use or permit to be used this Loan Submission or its contents in any fashion or manner detrimental to the interest of the Borrower/Owner or HFF or for any purpose other than use in considering whether to provide all or a portion of the Loan. The Recipient and the need to know parties agree to keep this Loan Submission and all confidential information contained herein permanently confidential and further agree to use this Loan Submission for the purpose set forth above.

PHOTOCOPYING OR OTHER DUPLICATION IS STRICTLY PROHIBITED.

THE BORROWER/OWNER EXPRESSLY RESERVES THE RIGHT, AT ITS SOLE DISCRETION, TO REJECT ANY OR ALL PROPOSALS OR EXPRESSIONS OF INTEREST IN THE PROPOSED UNDERLYING LOAN AND TO TERMINATE DISCUSSIONS WITH ANY PARTY, AT ANY TIME, WITH OR WITHOUT NOTICE.

THE CONFIDENTIAL LOAN SUBMISSION SHALL NOT BE DEEMED TO BE A REPRESENTATION OF THE STATE OF AFFAIRS OF THE PROPERTY OR CONSTITUTE AN INDICATION THAT THERE HAS BEEN NO CHANGE IN THE BUSINESS OR AFFAIRS OF THE PROPERTY SINCE THE DATE OF PREPARATION OF THIS LOAN SUBMISSION.

If the Recipient does not wish to pursue negotiations leading to the placement of the Loan, or if in the future the Recipient or Borrower/Owner discontinues such negotiations, the Recipient will return this Confidential Loan Submission to HFF.

CONTACTSSTEVE SKOK Managing Director sskok@hfflp.com Ph: 312.528.3681

SCOTT CLIFTON Director sclifton@hfflp.com Ph: 312.300.7286

RILEY MCCHESNEY Analyst rmcchesney@hfflp.com Ph: 312.300.7292

Executive SummaryTHE OPPORTUNITY

HFF has been retained on an exclusive basis by Scenic Investments, K Giles LLC, and Redstone Residential (collectively the “Sponsor”) to present a fully-entitled investment opportunity for the development of a 416 unit, Class-A student housing and micro-unit development located at 661 North Lake Street in Reno, NV (the “Project” or 661 Lake”). The site is located within a qualified opportunity zone, and is steps from both downtown Reno and the University of Nevada, Reno (“UNR”) campus.

The Project is comprised of a two-story podium containing parking, retail, and lobby spaces, a six-story student housing building and a separate seven-story micro-unit building above the podium. On top of the podium structure will feature shared amenities for all residents including a beautifully landscaped outdoor courtyard, swimming pool, and state-of-the-art fitness and amenity center.

INVESTMENT HIGHLIGHTS

+ Premier Sponsorship Team with Prolific Multi-Family Development Experience

+ Fully-Entitled

+ Unparalleled Access to Downtown Reno and the UNR Campus

+ High Quality Construction with Best in Class Amenities

+ Dynamic Floorplans for Student and Market Rate Renters

+ Nationally Recognized University

+ Rapidly Growing Economy

PROJECT CAPITILIZATIONSOURCES AMOUNT %

SENIOR DEBT $78,429,447 60%

LP EQUITY (90%) $47,057,668 36%

SPONSOR EQUITY (10%) $5,228,630 4%

Total Sources $130,715,745 100%

1

KEY PROPERTY ITEMSTOTAL UNITS 416 UNITS

MICRO-UNITS 219 UNITS

STUDENT HOUSING UNITS 197 UNITS

STUDENT HOUSING BEDS 656 BEDS

TOTAL GROSS SQUARE FEET 627,330 SF

NET RESIDENTIAL SQUARE FEET 336,930 SF

GROSS RETAIL SQUARE FEET 9,760 SF

AVERAGE UNIT SIZE (MICRO-UNIT) 587 SF

AVERAGE UNIT SIZE (STUDENT HOUSING) 1,058 SF

PARKING SQUARE FEET 185,500 SF

PARKING STALLS 536 SPACES

RESIDENTIAL PARKING RATIO 1.29

SOURCES % $ AMOUNT $/UNIT $/BED $/GSFCONSTRUCTION LOAN 60% $78,429,447 $188,532 $87,047 $125.02

LIMITED PARTNER EQUITY (90%) 36% $47,057,668 $113,119 $52,228 $75.01

SPONSOR EQUITY (10%) 4% $5,228,630 $12,569 $5,803 $8.33

TOTAL SOURCES 100% $130,700,000 $314,200 $145,079 $208.37

USES $ AMOUNT $/UNIT $/BED $/GSFTOTAL LAND COSTS 8% $10,100,000 $24,279 $11,210 $16.10

TOTAL HARD COSTS 70% $92,084,356 $221,357 $102,202 $146.79

OWNER'S CONTINGENCY 4% $5,000,000 $12,019 $5,549 $7.97

TOTAL SOFT COSTS 15% $20,118,780 $48,362 $22,329 $32.07

INTEREST CARRY 3% $3,412,609 $8,203 $3,788 $5.44

TOTAL COSTS 100% $130,700,000 $314,200 $145,079 $208.37

RETURN / YIELD SUMMARY STABILIZED CFO $9,330,233 7.14% YOC 11.90% DY

IMPLIED STABILIZED CAPITALIZATION RATE 5.00% PER UNIT PER BED

IMPLIED STABILIZED VALUE $186,604,661 $448,569 $207,108

STABILIZED DEBT YIELD 11.9%

LOAN TO STABILIZED VALUE 42.0%

*Stabilized CFO assumes Stabilized NOI reduced by capital reserves

DEVELOPMENT OVERVIEW

2

SITE OF NEW BUSINESS SCHOOL

SITE OF NEW BUSINESS SCHOOL

OVERPASS TO CAMPUS

OVERPASS TO CAMPUS

TRUKEE

RIV

ER

TRUKEE

RIV

ER

BARBARA BENNETT PARK

CITY PLAZA

3

Overpass to Campus

Overpass to Campus

Site of newBusiness School

Site of newBusiness School

4

Located just north of downtown Reno, the University of Nevada, Reno (“UNR”) enrolls over 21,000 students and is consistently recognized among the nation’s top public research institutions for its distinguished academic programs. Since 2013, UNR has seen its enrollment grow by over 14%, with applications skyrocketing by more than 67% since 2010. UNR’s Office of Institutional Research provides strong support for continued growth, which has led the University to project additional enrollment expansion of 7.2% by 2023. UNR was also recently elevated to an R1 institution designation by the Carnegie Classification of Institutions of Higher Education, a classification reserved for doctoral universities with the highest level of research activity.

Despite historic enrollment growth at UNR, the supply for student housing accommodations in Reno has failed to keep pace with demand. The majority of student housing that does exist is much older vintage and lacks the student-centric amenities that today’s millennial renters demand. With no on-campus living requirement and on-campus and off-campus occupancy at 98 and 99%, respectively, the UNR market is prime for another student housing project.

Nationally Recognized University

ENROLLMENT OVER 21,000 STUDENTS

APPLICATIONS UP 67% SINCE 2010

DIVISION 1 ATHLETICS

99% OFF-CAMPUS OCCUPANCY

NO ON-CAMPUS LIVING REQUIREMENT

5

Rapidly Growing Reno EconomyOver the past several years, the Reno metro has experienced unprecedented job growth and business diversification, with multinational corporations and fast-growing startups alike taking advantage of Reno’s progressive and affordable business environment. Recognized as the top state for economic growth potential by Business Facilities Magazine, the state of Nevada outpaced every other state in private sector job growth during 2018. Additionally, over the past several years, numerous companies have relocated or expanded operations in the greater Reno area, including Amazon, Apple, Google, and Tesla.

With a population that has increased approximately 7% since 2012, Reno has had tremendous success in rebranding from a casino-dependent gaming town, to a young, vibrant, tech hub that is attracting new residents from across the country. Recognized as one of the “Best Small Cities in America,” Reno residents have plenty to write home about as the city’s median household income is projected to grow by over 15% between 2019 and 2024, surpassing the $70,000 mark by 2021.

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

2000 to 2010 2.2%

2010 to 2019 32.9%

2019 to 2024 15.1%

Median Household Income Growth

DISTANCE FROM 661 LAKE STREET 1-MILE 3-MILE 5-MILE RENO

2000 to 2010 12.9% 4.5% 6.3% 22.0%

2010 to 2019 8.5% 8.5% 7.6% 15.8%

2019 TO 2024 5.7% 5.6% 5.4% 9.8%

Historical and projected household growth

Median Household income6

High End Design & Best-in-Class AmenitiesThe Project, designed by Solomon Cordwell Buenz, features 219 luxury micro-units and best-in class student housing for 656 beds. When completed, the first-rate multifamily development will have a myriad of indoor and outdoor amenities including a resort-style pool, stand-alone fitness studio, and two secured lobbies for micro-unit and student housing residents.

Community Amenities: + State-of-the-Art Fitness Center

+ Resort-Style Swimming Pool

+ Outdoor Courtyard with Green Space

+ Resident Lounge

+ Study Rooms

+ On-Site Parking

+ Secured Lobbies

Apartment Amenities: + Fully Furnished Student Floor

Plans

+ Stylish Interior Finishes

+ Upscale Kitchens

+ In-Unit Washer & Dryer

+ 100% Bed-Bath Parity

+ Keyless Entry System

7

5-MINUTES WALKING TIME

8

15-MINUTES WALKING TIME

10-MINUTES WALKING TIME

Unrivaled LocationLocated in downtown Reno, just one block from I-80 and two blocks from the UNR campus, 661 Lake’s unmatched location offers immediate access to UNR classrooms and athletic facilities, as well as Reno’s premier shopping, dining, and entertainment destinations. This accessibility demonstrates the site’s high Walk Score of 82, which ranks the site as “Very Walkable.” This classification suggest that most errands can be accomplished on foot, a major factor in attracting the millennial renter who prioritizes convenience.

Additionally, the site is located adjacent to I-80, providing unrivaled access to greater Reno and beyond. Nearby attractions include Great Basin National Park, the Truckee River, and Lake Tahoe, one of the country’s premier outdoor destinations, which is less than an hour’s drive from 661 Lake.

WALK SCORE

82BIKE SCORE

71UNR CAMPUSRENO EVENTS CENTERWALGREENS

TRUCKEE RIVERRENO ARCHRIVERWALK DISTRICT

NEVADA MUSEUM OF ARTNATIONAL AUTOMOBILE MUSEUMGREATER NEVADA FIELD

9

15-MINUTES WALKING TIME

Located Within an Opportunity Zone Adjacent to High-Growth Downtown Reno661 Lake is located within a certified Opportunity Zone and offers an incoming investor the perfect opportunity to take advantage of this newly implemented program. Established in the Tax Cuts and Job Act of 2017, the Opportunity Zone community development program provides tax incentives for investors to re-invest unrealized gains into certified Opportunity Zone locations. The Opportunity Zone program allows any appreciated asset (real estate or non-real estate) to be re-invested in newly built or substantially improved real estate located within a designated opportunity zone without triggering an immediate tax payment. If the asset is held for five years, the tax on the original deferred gain is reduced by 10%. If held for seven years, the tax is reduced by 15%. Additionally, if the asset is held for at least ten years, any additional gains realized upon disposition (above the amount recognized in 2026) will be entirely tax exempt.

RENO

SPARKS

WEST RENO

RENORENO

SPARKSSPARKS

WEST RENOWEST RENO

NORTH VALLEYNORTH VALLEY

UV659

580

80

395395

445445

648648

659659

667667

80

OPPORTUNITY ZONE

UNIVERSITY OF NEVADA, RENO

*HFF is not a tax advisor. Investors should rely on their own consultants for opportunity zone advice.

THE QUAD

661 LAKE STREET

10

11

MICRO-UNIT BUILDING Located on the south side of the Project, the micro-unit building will be seven stories tall and contain 219 units. Floor plans will include a mix of studios, one-bedroom, and two-bedroom units, with an average unit size of approximately 587 square feet. All units will feature stylish interior finishes, modern kitchens, and private bathrooms. These units will be leased unfurnished.

STUDENT HOUSING BUILDING The student housing building will feature a “U-shaped” configuration that stands six stories high and comprises 656 bedrooms across 197 units. The student housing building will be located on the north side of the site to provide the closest proximity to the UNR campus.

RETAIL The project will feature approximately 9,800 square feet of street level retail and restaurant space on the northwest corner of the property, closest to the UNR campus.

GARAGEParking at the Project will comprise two levels and 536 stalls located below the deck of the podium structure.

LOBBIESThe Project will contain two separate lobbies; one for the micro-unit building, and the other for the student housing building. The micro-unit lobby will be located on the south side of the Project, while the student entrance will be on the north side, closest to campus.

STATE-OF-THE-ART AMENITY BUILDINGA stand-alone building in the interior of the Project, the amenity building will contain a state-of-the-art fitness center, lounges, and game room, and will be available to both student housing and micro-unit residents.

12

© 2018 S O L O M O N C O R D W E L L B U E N ZCLIENT NAME ADDITIONAL NAME MASSING UPDATE | 661 LAKE ST. | RENO, NV | 5 7 2 4 . 0 0 5 | 0 3 – 0 7 – 2 0 1 9

POOL DECK AT AMENITY BUILDING

661 LAKE STREET

CONTACTSSTEVE SKOK Managing Director sskok@hfflp.com Ph: 312.528.3681

SCOTT CLIFTON Director sclifton@hfflp.com Ph: 312.300.7286

RILEY MCCHESNEY Analyst rmcchesney@hfflp.com Ph: 312.300.7292