offering memorandum - loopnet...building include parkside liquors, true eye care, and the highly...

Offering Memorandum 2 9 0 5 W E S T 2 5 T H AV E N U E D E N V E R , C O 8 0 2 112 0 17 C O N S T R U C T I O N | 2 0 U N I T S + G R O U N D F L O O R R E TA I L

O F F E R I N G M E M O R A N D U M | 2

Investment TeamRobert BratleyT [email protected]

Andy HellmanT [email protected]

Marcus GriffinT [email protected]

Justin HuntT [email protected]

ARA NewmarkT 303-260-4400www.aranewmark.com1800 Larimer StreetSuite 1700Denver, CO 80202

Offer Solicitation ProcessPROPERTY VISITATIONProspective purchasers will have the opportunity to visit the property via pre-scheduled property tours. These tours will include access to a representative sampling of units and access to maintenance and other similar facilities. In order to accommodate the property’s ongoing operations, property visits will require advance notice and scheduling.

OFFER SUBMISSIONOffers should be presented in the form of a non-binding Letter of Intent, spelling out the significant terms and conditions of purchaser’s offers including, but not limited to (1) asset pricing, (2) due diligence and closing time frame, (3) earnest money deposit, (4) a description of the debt/equity structure, and (5) qualifications to close. The purchase terms shall be the assumption of the existing loan.

arausa.l ist inglab.com/EliotCenter

TA B L E O F C O N T E N T S | 3

TABLE OF CONTENTS4Executive Summary

10Market Information

19Financial Analysis

29Rental Comparables

32Appendix

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

EXECUTIVE SUMMARY


Investment Highlights• Luxury Living in Jefferson Park – The finishes at Eliot Center are second to none. Each unit

includes stainless steel appliances, high quality LVT plank flooring, quartz countertops, custom cabinets, designer finishes and lighting, walk-in closets, balconies, panoramic views of downtown Denver*, central air conditioning and heating and in-unit washers and dryers.

• Rooftop Deck with Unobstructed Views – All tenants have access to a large rooftop deck with outdoor furniture and beautiful views of the mountains and Downtown Denver.

• Spacious Floor Plans – Eliot Center is the exception to the status-quo. While many other new construction apartments lean towards smaller units, Eliot Center provides bright and expansive floor plans. The average unit size at Eliot Center is an impressive 973 square feet with well-designed floor plans.

• Perfectly Situated in Jefferson Park - Located on Jefferson Park’s “Main & Main”, Eliot Center is within steps of highly desirable retail including Sarto’s, 2914 Coffee, Jefferson Park Pub, Sexy Pizza, Vessel, Adams Mystery Playhouse, Santiago’s, Jack-N-Grill, Federal Bar & Grill, Starbucks, Safeway, Sassafras American Eatery, Briar Common Brewery + Eatery, Little Machine Brewery and many more. Retail tenants on the first floor of the building include Parkside Liquors, True Eye Care, and the highly anticipated El Cazo Mexican Restaurant (coming in June 2018).

• Walking Distance to Mile High Stadium & Redevelopment – Mile High Stadium, home to the Denver Broncos, is within a five minute walk of Eliot Center for very easy access to sporting events and concerts. On the south side of the stadium, a Stadium District Master Plan was recently revealed that will be a 52-acre mixed-use entertainment neighborhood that will be redeveloped over the next seven to ten years.

• Minutes to Downtown Denver – One of the metro area’s largest employment centers, downtown Denver is home to 37.2 million square feet of office space and more than 130,000 jobs. Currently, there are also more than 2.5 million square feet of additional office space under construction which is projected to add an additional 8,800 downtown employees. Major companies that are located in the downtown employment hub include DaVita’s world headquarters, Antero Resources, Accenture, CenturyLink and Wells Fargo. BP also recently announced that they will be relocating their Lower 48 headquarters from Houston to downtown Denver.

* In select apartment homes

NEW CONSTRUCTION MIXED-USE DEVELOPMENT

CONDO QUALITY FINISHES

LARGE, SPACIOUS FLOOR PLANS

ONE-, TWO- AND THREE- BEDROOM UNIS

BALCONIES ON EVERY UNIT

ROOFTOP DECK WITH UNOBSTRUCTED VIEWS OF MOUNTAINS & DOWNTOWN

HIGH PARKING RATIO

STEPS TO RESTAURANTS, COFFEE SHOPS, NIGHTLIFE, & RETAIL

SHORT DISTANCE TO MILE HIGH STADIUM

TWO BLOCKS FROM JEFFERSON PARK

MINUTES TO DOWNTOWN DENVER

Valu

e Dr

iver

s


Offering Terms

PROPERTY OVERVIEW

OFFERING PRICE TBD by Market

YEAR BUILT 2017

TOTAL RENTABLE SQ. FT. 26,650 sq. ft.

MULTIFAMILY OVERVIEW

TOTAL APARTMENT UNITS 20

AVERAGE SQUARE FEET PER UNIT 973 sq. ft.

MULTIFAMILY RENTABLE SQ. FT. 19,450 sq. ft.

AVERAGE MARKET RENT PER UNIT $2,210

AVERAGE MARKET RENT PER SQ. FT. $2.27

RETAIL OVERVIEW

RETAIL SPACES 3

RETAIL RENTABLE SQ. FT. 7,224 sq. ft.


Property Summary

ELIOT CENTER

ADDRESS 2905 West 25th Avenue Denver, CO 80211

COUNTY Denver

YEAR BUILT 2017

NUMBER OF UNITS 20 Apartments + 3 Retail

NUMBER OF BUILDINGS 1

NUMBER OF STORIES 3

TOTAL RENTABLE AREA 26,650 sq. ft.

AVG. APARTMENT UNIT SIZE 973 sq. ft.

UNIT TYPE NO. OF UNITSSQUARE

FEETCURRENT MARKET

RENT/MONTHCURRENT MARKET

RENT/SQ. FT.

1 Bed/1 Bath 4 511 $1,475 $2.89

2 Bed/1 Bath 2 933 $2,150 $2.14

2 Bed/2 Bath 12 1,092 $2,375 $2.17

3 Bed/2 Bath 2 1,218 $2,900 $2.38

TOTAL/AVG. 20 973 $2,210 $2.27


CONSTRUCTION DETAIL

STYLE 3-Story Interior Hallway

FOUNDATION Concrete

SIDING Brick & Tile

ROOFING White Membrane

PLUMBING SUPPLY PEX

PLUMBING DRAINAGE PVC

UTILITIES & METERING

ELECTRICITY Individually Metered, Resident Paid

GAS Sub Metered, Resident Paid

WATER/SEWER Sub Metered, Resident Paid

TRASH Resident Paid

PARKING & STORAGE

RETAIL OPEN PARKING 5

GARAGE 15 Tandem + 4 Single Spaces

RATIO 1.70

STORAGE UNITS 16

FEES & DEPOSITS

APPLICATION FEE $50

DEPOSIT One Month’s Rent

PET DEPOSIT $500, $250 Refundable

Property Summary

CONDO QUALITY FINISHES

ABUNDANT PARKING

SPACIOUS UNITS


PANORAMIC MOUNTAIN & CITY VIEWS

BALCONIES ON EVERY

UNIT

LUXURY LIVING IN JEFFERSON PARK

Features & Amenities• New Construction

• Quartz Countertops

• Hardwood Flooring

• Stainless Steel Appliances

• Custom Cabinets

• Designer Finishes

• Ceiling Fans

• Balconies

• Walk-In Closets

• Downtown and Mountain Views*

• In-Unit Washers and Dryers

• Central Heating & Air Conditioning

• Rooftop Deck with Unobstructed Views of Downtown Denver

• Elevator Access

• Electronic Key Fob Entry & Controlled Access

• Secured Storage Facilities

• 24-Hour Security

• Garage Parking

* In select apartment homes

M A R K E T I N F O R M AT I O N | 1 0

MARKET INFORMATION


Image Landsat / Copernicus



HIGHLANDS$618,743

LOHI$628,860

UNION STATION/LODO$810,761

JEFFERSON PARK$516,554

Speer Blvd

Zuni

St

W 33rd Ave

W 25th Ave

Fede

ral B

lvd

W 38th Ave

Blake

St

Park Ave

Strong Demographics within a one-mile radius

Source | Gadberry Group, ReColorado.com

$97,072AVERAGE HOUSEHOLD

INCOME

$657,015AVERAGE FOR SALE

HOME PRICE

14%POPULATION GROWTH

BY 2022

$570,748AVERAGE HOME SELLING PRICE IN PAST 180 DAYS

Area Highlights Source | Apartment Insights• Close proximity to downtown Denver and 130,000 full time jobs

• Rapidly growing population resulting from an influx of young, affluent professionals

• Walking distance to LoHi, Highlands, Jefferson Park, and Sloan’s Lake retail and entertainment areas

• Denver Northwest submarket is one of the best performing apartment markets in the state

• Rents exceeding $2.10/SF and $1,575/Unit

• Over 600 units absorbed in the Denver Northwest submarket in 2017

• Rising construction costs have increased barriers to entry for new development

Average Home Values


Market HighlightsJEFFERSON PARK NEIGHBORHOODJefferson Park spans from Sports Authority Field north to Speer Boulevard between Interstate 25 and Federal Boulevard. The area is expected to see a 4% annual population growth through 2022, compared to the national annual average of 1%.

“Growth in the area has been more intense than any other neighborhood in northwest Denver” – Susan Shepherd, Denver City Council

Jefferson Parkpub


Market HighlightsLOWER HIGHLANDSAt the heart of the Denver Highlands, LoHi was named by Forbes as one of America’s Best Hipster Neighborhoods. The trendy area boasts happening restaurants, watering holes, tons of boutiques and highbrow coffee shops. The premier location is further amplified with the architecturally stunning bicycle-and-pedestrian bridge connecting LoHi to the Central Platte Valley. The area is super busy on the evenings and weekends but still relatively quiet and residential making the LoHi neighborhood ultra-desirable.

HIGHLANDS SQUAREEstablished in the late 1800s, the Highlands Square neighborhood blends Victorian architecture with modern-day living. The up-and-coming area is home to dozens of trendy salons, coffee shops, galleries, boutiques and restaurants, many housed in former bungalow homes. As one of the city’s most walkable neighborhoods, it is a desirable place for young professionals to hang their purses after a long night of bar-hopping.

SLOAN’S LAKEThe 2nd largest park in Denver at 177-acres, Sloan’s Lake features hiking, jogging and bicycling on the trails surrounding the lake and fishing and boating on the lake itself. The park also offers stunning views of downtown Denver to the east and the Rocky Mountains to the west. Adjacent to the park is a 7.5 block mixed use community featuring retail, restaurants, an Alamo Drafthouse Cinema, community gardens and a public plaza.

$121,082 AVERAGE HOUSEHOLD INCOME

1% UNEMPLOYMENT RATE

3% ANNUAL POPULATION GROWTH THROUGH 2022

3RD HIGHEST NUMBER OF COFFEE SHOPS PER CAPITA

DENVER HIGHLANDS AND SLOAN’S LAKE STATISTICS


Location Map


StapletonRedevelopment

LowryRedevelopment

Colorado BoulevardRetail Corridor

DowntownDenver

Central Light Rail Line

Southeast Light Rail Line

West Light Rail Line

University of Colorado Light Rail Line

( A line )

( W line )

( C-D-E-F-H line )

CongressPark

Lindsley Park

Central Park

Lowry SportsComplex Park

CranmerPark

RobinsonPark

Burns Park

CrestmoorPark

WashingtonPark

Ruby HillPark

Athmar Park

Lakewood / Dry Gulch Park

BarnumPark

Sloan's Lake Park

CheesmanPark

City Park

City Park Golf Course

Park HillGolf Club

CurtisPark

CommonGroundGolf Course

DenverCountry Club

OverlandGolf Course

COLORADOSTATE CAPITOL

Garland Park

Cook Park

Windsor Lake

Auraria CampusMetro State College of DenverUniversity of Colorado DenverCommunity College of Denver

Venture PrepHigh School

Hill Campus ofArts and Sciences

South HighSchool Cory

ElementarySchool

Manual HighSchool

McMeen ElementarySchool

George WashingtonHigh SchoolKnight Center

Early Education

VA EASTERN COLORADOHEALTH CARE SYSTEM

ROSE MEDICAL CENTER

DENVER HEALTH

NATIONAL JEWISH HEALTH

Presbyterian St. Luke’s HospitalSt. Joseph Hospital

Campus Expansion & RedevelopmentRocky Mt. Hospital for Children

Kaiser Permanente

9TH & COLORADO REDEVELOPMENTOF CU HEALTH SCIENCES CENTER

Cherry Creek North&

Cherry Creek Mall

Lower Highlands

Highlands Square

Broadway Retail Corridor

Antique Row

Alameda Retail Corridor

MILE HIGHSTADIUM

Broa

dway

W 38th Ave

Fede

ral B

lvd

Sher

idan

Blv

d

E Colfax AveW Colfax Ave

6th Ave

Montview Blvd

E 23rd Ave

E 40th Ave

Martin Luther King Jr Blvd

W 1st Ave

Speer Blvd

W Alameda Ave E Alameda Ave

Morri

son R

d

W Mississippi Ave

Colo

rado

Blv

d

Uni

vers

ity B

lvd

S Da

yton

St

Que

bec

St

Cherry Creek Trail

High

Line Canal Trail

Existing Light Rail

Future Park-n-Ride

Existing Station

Existing Park-n-Ride

FutureLight Rail

Vicinity Map


Oblique Aerial Map


DOWNTOWN DENVER MARKET HIGHLIGHTS

37 MILLION SQUARE FEET OF OFFICE SPACE IN DENVERTOP 20 DOWNTOWN DENVER EMPLOYERS

Ac ce ntureA L Ps Fund S e r v icesA nadarko Pe t ro leumA nthe m B lue Cross B lue S h ie ldC e ntur y L inkC omcas tDaV i ta Hea l thCare Par tne rs Inc .De lo i t te L L PDe nve r Pos tEncanaGates C orpora t ion

H yat t Re ge ncy Hote l a t the C o lo radoC onve nt ion C e nte rK P M G L L PMor te nson C ons t r uc t ionS he ra tonT I A ATransame r ica Inves tme nts& Re t i re me ntU S BankWel ls FargoXce l Ene rg y

*List includes only private sector, for-profit employers

CORPORATE RELOCATION & EXPANSIONS

REAL ESTATE DEVELOPMENTPrologis

TECHNOLOGYDISH GrA nd Centra l

eFolder

Gus to

Home Advisor

msgNE TC ONOM Y

QuoteWizard

Remote - Learner

S endGr id

S yncHR

TapInf luence

Trus tP i lo t

V IPER (C omcast)

Wor ld Wide Net work

BUSINESS SERVICESA r t isan Talent

CapTech C onsul t ing

EDUCATION2U Inc.

ENERGYBP Lower 4 8

Microgr id Energy

Real Goods S olar Inc.

Sunrun

FOOD/BEVERAGERomano’s C orporate

W hole Foods Marke t Regional

LEGENDConsolidation of Offices - HQ

Expansion - New OfficeGusto

Headquarters Relocation

WE SEE DENVER AS AN IMPORTANT ENERGY HUB FOR THE FUTURE.

Dave Lawler | CEO, BP Lower 48“WE CONSIDERED SEVERAL CITIES FOR EXPANSION BUT CHOSE DENVER BECAUSE IT’S HOME TO A VERY TALENTED AND SAVVY WORKFORCE.

Kuba Poraj-Kuczewski | VP, QuoteWizard

“Source: Downtown Denver Partnership

BEST CITY FOR MILLENNIALS-SmartAsset4TH

LARGEST INCREASE IN WORKERS –LinkedIn4TH

HOTTEST FOOD CITY–Zagat3RD

BEST CITY TO START A TECHCAREER –ComputerTrainingSchools.com3RD

BEST CITY TO STARTA CAREER –WalletHub2ND

BEST CITY FOR JOB SEEKERSIN 2017 –NerdWallet2ND

BEST PLACE TO LIVE –U.S. News and World Report2ND

BEST PLACE FOR BUSINESSAND CAREERS –Forbes1ST

4TH FASTEST GROWING LARGE CITY -WalletHub


DOWNTOWN DENVER—

F I N A N C I A L A N A LY S I S | 1 9

FINANCIAL ANALYSIS


EXECUTIVE SUMMARY

Financial Analysis Executive SummaryEliot CenterDenver, Colorado

Number of Units 20 Per Unit DollarsYear Built 2017 Effective Gross Income $41,082 $821,643Multifamily Rentable Square Feet 19,450 Less: Operating Expenses 7,299 145,985Commercial Rentable Square Feet 7,200 Less: Capital Reserves 150 3,000Total Rentable Square Feet 26,650 Net Operating Income $33,633 $672,659Average Square Feet per Unit 973 Less: Debt Service 17,586 351,720Average Market Rent per Unit $2,210 Net Cash Flow (after debt service) $16,047 $320,939Average Market Rent per Sq. Ft. $2.27

Sep-2018 $7,200,000Interest Rate 4.89%Maturity Date (on Existing) Nov-2027Amortization I/O through Nov-2019 & 30 Yrs. ThereafterAnnual Payment (Amortized) $457,760Loan Constant (Amortized) 6.36%Debt Service Coverage Ratio (Trailing 3 Months) 1.34

Existing Debt Balance as of

Disclaimer

This information has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or

representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of

this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful,

independent investigation of the property to determine to your satisfaction and the suitability of the property for your needs.

April-2018

Property Overview Year One Operating Summary

Financing AssumptionsExisting Debt

The information used herein has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty, or representation about it.


HISTORICAL ANALYSISHistorical Analysis Eliot CenterDenver, Colorado

INCOME Assumptions

Gross Scheduled Rent $732,300 $749,539 $530,400 3.0% $546,312

Less: Gain/(Loss)-to-Lease 0.0% 0 0.0% 0 (3.5%) (18,300) (1.0%) (5,463)Gross Potential Income $732,300 $749,539 $512,100 $540,849

Less: Vacancy 0.0% $0 0.0% $0 0.0% $0 (5.0%) ($27,316)Total Rental Income 100.0% $732,300 100.0% $749,539 $512,100 94.0% $513,533

Trailing 12 Months

Plus: Other Income $197 $3,940 $218 $4,368 $49 $985 $293 $5,851

Plus: Utility Income 215 $4,297 156 3,113 54 1,074 285 5,700

Plus: Parking & Storage Income 88 $1,750 120 2,400 22 438 1,696 33,915Plus: Retail Income $0 0 262,644 262,644Effective Gross Income $742,287 $759,420 $777,241 $821,643

EXPENSES ¹ per unit Actual per unitTrailing 3 Months per unit Trailing 3 Months per unit Proforma Exp.

Repairs & Maintenance $1,428 $28,553 $1,428 $28,553 $1,428 $28,553 $550 $11,000

Contract Services 295 $5,900 295 5,900 295 5,900 350 7,000

Turnover Costs 0 $0 0 0 0 0 125 2,500

Administrative 159 $3,173 159 3,173 159 3,173 200 4,000

Marketing 0 $0 0 0 0 0 50 1,000

Utilities 968 $19,362 968 19,362 968 19,362 997 19,943Total Variable Expenses $2,849 $56,988 $2,849 $56,988 $2,849 $56,988 $2,272 $45,443

Taxes 765 $15,303 765 15,303 765 15,303 2,484 49,676

Insurance 1,578 $31,558 1,578 31,558 1,578 31,558 900 18,000

Management Fee 2.7% $20,212 2.7% 20,212 2.6% 20,212 4.0% 32,866Total Operating Expenses $6,203 $124,061 $6,203 $124,061 $6,203 $124,061 $7,299 $145,985

Plus: Capital Reserves ² 150 3,000 150 3,000 150 3,000 150 3,000Total Expenses $6,353 $127,061 $6,353 $127,061 $6,353 $127,061 $7,449 $148,985

NET OPERATING INCOME $615,226 $632,359 $650,179 $672,659

1. T3 and T1 Expenses equal to Trailing 3 Months expenses to facilitate comparison.

2. Historical and Forecast Capital Reserves set to equal $150/unit to facilitate comparison.

Trailing 3 MonthsDecember-2017

Trailing 1 Month Current Rent RollProformaDecember-2017 February-2018

April-2018

Year One



RETAIL ANALYSISRetail AnalysisEliot CenterDenver, Colorado

RETAIL RENT INCOME Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11

Parkside Provisions 1,657 sf @ $31.83 per SqFt $52,742 $54,333 $55,973 $55,973 $55,973 $55,973 $55,973 $55,973 $55,973 $55,973 $55,973Optometrist 1,800 sf @ $30.90 per SqFt 55,620 57,294 59,004 60,786 62,604 64,476 66,420 68,400 70,452 70,452 70,452Restaurant 3,767 sf @ $32.78 per SqFt 123,482 123,482 123,482 127,212 131,016 134,934 139,002 143,146 147,440 147,440 147,440Total Retail Rent 7,224 sf @ $32.09 per SqFt $231,845 $235,109 $238,460 $243,971 $249,594 $255,383 $261,396 $267,519 $273,866 $273,866 $273,866

CAM Income $7.00 per SqFt 50,568 50,712 50,857 51,001 51,146 51,290 51,435 51,579 51,724 51,868 52,651Total Other Retail $50,568 $50,712 $50,857 $51,001 $51,146 $51,290 $51,435 $51,579 $51,724 $51,868 $52,651

$282,413 $285,822 $289,317 $294,972 $300,740 $306,674 $312,831 $319,099 $325,590 $325,734 $326,517Less: 7% Vacancy (19,769) (20,008) (20,252) (20,648) (21,052) (21,467) (21,898) (22,337) (22,791) (22,801) (22,856)

$262,644 $265,814 $269,065 $274,324 $279,688 $285,207 $290,932 $296,762 $302,798 $302,933 $303,661

April-2018

Other Retail Income

Gross Retail Income

Net Retail Income



Unit Mix and Current Market Rents Eliot CenterDenver, Colorado

Current Current Annual MonthlyMonthly Market Market Effective Effective

Unit No. of % Unit Market Rent Rent Rent Rent TotalDescription Units Type Sq. Ft. Rents /Sq. Ft. Total Total /Sq. Ft. Sq. Ft.

One Bedroom1 Bed / 1 Bath 4 20.0% 511 $1,475 $2.89 $70,800 $1,363 $2.67 2,044openTwo Bedroom2 Bed / 1 Bath 2 10.0% 933 $2,000 $2.14 $48,000 $2,150 $2.30 1,8662 Bed / 2 Bath 12 60.0% 1,092 2,375 2.17 342,000 2,260 2.07 13,104openThree Bedroom3 Bed / 2 Bath 2 10.0% 1,218 $2,900 $2.38 $69,600 $2,900 $2.38 2,436openTotal / Avg. 20 100.0% 973 $2,210 $2.27 $530,400 $2,134 $2.19 19,450$44,200

$5,800

$4,00028,500

$5,900

April-2018

MonthlyMarket

RentTotal

One Bedroom20%

Two Bedroom70%

Three Bedroom10%

By Bedroom Type

511 20%

933 10%

1,092 60%

1,218 10%

By Square Feet

UNIT MIX AND CURRENT MARKET RENTS



Service and Other Income Eliot CenterDenver, Colorado

Application Fees 20u x 40% relets x 175% x $50 $28 $560 $0 $0 $35 $700NSF & Late Fees 69 1,380 68 1,368 71 1,421Damages/Cleaning Fees 50 1,000 0 0 52 1,030Non-Refundable Pet Fee 20u x 40% relets x 25% pets x $300 50 1,000 150 3,000 30 600Monthly Pet Rent 20u x 25% pets x $35 x 12 mo. 0 0 0 0 105 2,100

$197 $3,940 $218 $4,368 $293 $5,851

Admin. Fee Income 20u x $25 x 12 mo x 95% occ. $215 4,297 $156 $3,113 $285 $5,700$215 $4,297 $156 $3,113 $285 $5,700

Tandem Parking Income 15 Spaces at $125/mo. at 95% occ. $0 0 $0 $0 $1,069 $21,375Single Space Parking Income 4 Spaces at $75/mo. at 95% occ. $0 0 $0 $0 $171 $3,420Storage Income 16 Spaces at $50/mo. at 95% occ. $88 1,750 $120 $2,400 $456 $9,120

$88 $1,750 $120 $2,400 $1,696 $33,915

Proforma

April-2018

December-17Year One

December-17Trailing 1 MonthSERVICE AND OTHER INCOME Trailing 3 Months

Total Service and Other Income

UTILITY INCOME

Total Utility Income

PARKING & STORAGE INCOME

Total Parking & Storage Income

SERVICE AND OTHER INCOME



Five Year Projected Cash Flows Eliot CenterDenver, Colorado

Year 1 Year 2 Year 3 Year 4 Year 5

$546,312 $562,701 $579,582 $596,970 $614,879(5,463) (5,627) (5,796) (5,970) (6,149)

$540,849 $557,074 $573,787 $591,000 $608,730

($27,316) ($28,135) ($28,979) ($29,848) ($30,744)$513,533 $528,939 $544,807 $561,152 $577,986

3.0% 3.0% 3.0% 3.0%$5,851 $6,027 $6,208 $6,394 $6,586

5,700 5,871 6,047 6,229 6,41533,915 34,932 35,980 37,060 38,172

262,644 270,523 278,639 286,998 295,608$821,643 $846,293 $871,681 $897,832 $924,767

Proforma Expenses$11,000 $11,330 $11,670 $12,020 $12,381

7,000 7,210 7,426 7,649 7,8792,500 2,575 2,652 2,732 2,8144,000 4,120 4,244 4,371 4,5021,000 1,030 1,061 1,093 1,126

19,943 20,541 21,157 21,792 22,446$45,443 $46,806 $48,210 $49,657 $51,146

49,676 51,166 52,701 54,282 55,91118,000 18,540 19,096 19,669 20,25932,866 33,852 34,867 35,913 36,991

$145,985 $150,364 $154,875 $159,521 $164,3073,000 3,090 3,183 3,278 3,377

$148,985 $153,454 $158,058 $162,799 $167,683

$672,659 $692,839 $713,624 $735,033 $757,083

April-2018

INCOMEGross Scheduled RentLess: Gain/(Loss)-to-LeaseGross Potential Income

Plus: Retail IncomeEffective Gross Income

Less: VacancyTotal Rental Income Rental Income Growth %Plus: Other IncomePlus: Utility IncomePlus: Parking & Storage Income

Total Operating Expenses

EXPENSESRepairs & MaintenanceContract Services

Taxes

Turnover CostsAdministrativeMarketing

InsuranceManagement Fee

Total Variable ExpensesUtilities

NET OPERATING INCOME

Plus: Capital ReservesTotal Expenses

FIVE-YEAR PROJECTED CASH FLOWS



Ten Year Projected Cash Flows Eliot CenterDenver, Colorado

Year 6 Year 7 Year 8 Year 9 Year 10

$633,325 $652,325 $671,895 $692,052 $712,813(6,333) (6,523) (6,719) (6,921) (7,128)

$626,992 $645,802 $665,176 $685,131 $705,685

($31,666) ($32,616) ($33,595) ($34,603) ($35,641)$595,326 $613,186 $631,581 $650,529 $670,044

3.0% 3.0% 3.0% 3.0% 3.0%$6,783 $6,987 $7,196 $7,412 $7,635

6,608 6,806 7,010 7,221 7,43739,317 40,496 41,711 42,963 44,251

304,476 313,610 323,019 332,709 342,690$952,510 $981,085 $1,010,518 $1,040,833 $1,072,058

$12,752 $13,135 $13,529 $13,934 $14,3538,115 8,358 8,609 8,867 9,1332,898 2,985 3,075 3,167 3,2624,637 4,776 4,919 5,067 5,2191,159 1,194 1,230 1,267 1,305

23,119 23,813 24,527 25,263 26,021$52,681 $54,261 $55,889 $57,565 $59,292

57,588 59,316 61,095 62,928 64,81620,867 21,493 22,138 22,802 23,48638,100 39,243 40,421 41,633 42,882

$169,236 $174,313 $179,543 $184,929 $190,4773,478 3,582 3,690 3,800 3,914

$172,714 $177,895 $183,232 $188,729 $194,391

$779,796 $803,190 $827,286 $852,104 $877,667

INCOMEGross Scheduled RentLess: Gain/(Loss)-to-LeaseGross Potential Income

Less: VacancyTotal Rental Income Rental Income Growth %Plus: Other IncomePlus: Utility IncomePlus: Parking & Storage IncomePlus: Retail Income

Total Operating Expenses

Effective Gross Income

EXPENSESRepairs & MaintenanceContract ServicesTurnover CostsAdministrativeMarketingUtilitiesTotal Variable ExpensesTaxesInsuranceManagement Fee

Total Expenses

NET OPERATING INCOME

Plus: Capital Reserves

April-2018

FIVE-YEAR PROJECTED CASH FLOWS



Cash Flow Assumptions Eliot CenterDenver, Colorado FALSE FALSE

CurrentRent Roll Current Leasing Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Market Rent $2.27 $2.27 $2.34 $2.41 $2.48 $2.56 $2.63 $2.71 $2.79 $2.88 $2.97 $3.05Market Rent - Annual Increases 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%Concessions 1.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Loss (Gain) to Lease 3.5% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%Effective Rent $2.19 $2.25 $2.32 $2.39 $2.46 $2.53 $2.61 $2.69 $2.77 $2.85 $2.94 $3.02Vacancy 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%Non-Revenue Units 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Other Income - Annual Increases 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%Utility Income - Annual Increases 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%Operating Expenses - Annual Increases 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%Management Fee 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%

April-2018

Proforma Assumptions

CASH FLOW ASSUMPTIONS



Tax Analysis Eliot CenterDenver, Colorado

Mill Full Cash Assessment AssessedParcel Levy Value Ratio Value Tax

2017 Taxes Payable 2018 & 2018 Taxes Payable 2019*

0232107050000 0.077134 $6,239,300 7.20% $449,230 $34,6510232107051000 0.077134 $671,700 29.00% $194,793 $15,025

$6,911,000 $644,023 $49,676

$311,965 $1,733Retail Taxes Per Sq Ft: $92.98 Retail Taxes Per Sq Ft: $2.08

2019 Taxes Payable 2020 & 2020 Taxes Payable 2021**

0232107050000 0.077134 $9,592,326 7.20% $690,647 $53,2720232107051000 0.077134 $1,032,674 29.00% $299,476 $23,100

$10,625,000 $990,123 $76,372

$479,616 $2,664Retail Taxes Per Sq Ft: $142.95 $3.20

April-2018

Multifaimly Taxes Per Unit:

Denver County

Multifamily Valuation Per Unit: Multifaimly Taxes Per Unit:

Multifamily Valuation Per Unit:

*2017 Taxes Payable 2018 & 2018 Taxes Payable 2019 are based on the Assessor's Appraised Value of $311,965 per unit.

**2019 Taxes Payable 2020 & 2020 Taxes Payable 2021 are based on a projected apprasied value of $10,625,000 and the assumption that the Mill Levy and Assessment Ratio will remain the same as in 2017.

Retail Taxes Per Sq Ft:

TAX ANALYSIS



RENTAL COMPARABLES


Rental Comparables *Properties in lease-up not included in occupancy averagePROPERTY NAME YEAR BUILT # OF UNITS OCCUPANCY AVG SF RENT $/SF

JEFFERSON PARK

1 Element 47 2013 265 94% 852 $2,292 $2.69

2 Decatur Point 2016 203 96% 775 $1,985 $2.56

3 2525 Eliot Street 2017 72 31%* 647 $1,633 $2.52

4 2785 Speer 2014 332 93% 897 $2,217 $2.47

JEFFERSON PARK COMP AVERAGE 872 94% 835 $2,138 $2.56

LOWER HIGHLANDS

5 Eliot Flats 2015 40 95% 414 $1,223 $2.95

6 LoHi Gold 2012 125 94% 692 $1,896 $2.74

7 Line 28 at LoHi 2012 130 93% 699 $1,901 $2.72

8 Infinity LoHi 2017 273 65%* 767 $2,067 $2.69

9 Centric LoHi 2016 302 58%* 821 $2,157 $2.63

10 Studio LoHi 2015 114 94% 720 $1,843 $2.56

LOHI COMP AVERAGE 984 94% 745 $1,991 $2.67

SLOAN’S LAKE/BERKELEY/HIGHLANDS

11 Tennyson Place 2017 81 86%* 512 $1,551 $3.03

12 X at Sloan's Lake 2018 104 77%* 541 $1,507 $2.79

13 The Colewood 2018 49 27%* 791 $2,200 $2.78

14 Highlands 32 2016 148 89%* 710 $1,897 $2.67

15 Alexan West Highlands 2017 322 46%* 782 $1,940 $2.48

SLOANS LAKE/BERKELEY/HIGHLANDS COMP AVERAGE 704 95% 701 $1,841 $2.63

COMP AVERAGE 2,560 94% 764 $1,999 $2.62

S Eliot Center 2017 20 100% 973 $2,210 $2.27


Rental Comparables

A R A N E W M A R K AT A G L A N C E | 3 2

APPENDIX

A R A N E W M A R K AT A G L A N C E | 3 3

DisclosureApartment Realty Advisors of Colorado, LLLP dba Newmark Knight Frank Mutlifamily, (collectively, the “Agent”) has prepared this material for limited use in the acquisition of certain Property, specifically, Eliot Center in Denver, Colorado.

The Offering Memorandum is not intended to provide a completely accurate summary of the Property or any of the documents related thereto, nor does it purport to be all-inclusive or to contain all of the information which prospective purchasers may need or desire. All financial projections are based upon assumptions relating to the general economy, competition, and other factors beyond the control of the Owner and the Agent, and therefore may be subject to variation. The Offering Memorandum does not constitute an indication that there has been no change in the business or affairs of the Property or the Owner since the date of preparation of the Offering Memorandum. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers.

Neither the Owner 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 the Contents (defined below), and no legal commitment or obligation shall arise by reason of the Offering Memorandum or the Contents. Analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the prospective purchaser.

The Owner 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 Owner 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 Owner, and any conditions to the Owner obligations thereunder have been satisfied or waived.

This Offering Memorandum and the Contents, except such information which is a matter of public record or is provided in sources available to the public (such contents as so limited herein are called the “Contents”), are of a confidential nature and are not to be made available to persons not receiving copies directly from the Agent. By accepting the Offering Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not photocopy or duplicate it, that you will not disclose the Offering Memorandum or any of the Contents to any other entity (except for outside advisors retained by you if necessary, in your opinion, for your determination of whether or not to make a proposal) without the prior written authorization of the Owner or Agent, and that you will not use the Offering Memorandum or any of the Contents in any fashion or manner detrimental to the interest of the Owner or Agent.

If you have no interest in acquiring the Property at this time, kindly return the Offering Memorandum forthwith.

www.arausa.listinglab.com/EliotCenter

ARA Newmark1800 Larimer StreetSuite 1700Denver, CO 80202T 303-260-4400www.aranewmark.com

RELATIONSHIPS THAT DELIVER RESULTS.© ARA, A Newmark Company. All Rights Reserved

Investment TeamRobert BratleyT [email protected]

Marcus GriffinT [email protected]

Andy HellmanT [email protected]

Justin HuntT [email protected]

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