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Offering Memorandum 2905 WEST 25TH AVENUE DENVER, CO 80211 2017 CONSTRUCTION | 20 UNITS + GROUND FLOOR RETAIL

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  • 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

  • E X E C U T I V E S U M M A R Y | 5

    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

  • E X E C U T I V E S U M M A R Y | 6

    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.

  • E X E C U T I V E S U M M A R Y | 7

    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

  • E X E C U T I V E S U M M A R Y | 8

    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

  • E X E C U T I V E S U M M A R Y | 9

    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

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

    Image Landsat / Copernicus

    Image Landsat / Copernicus

    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

  • M A R K E T I N F O R M AT I O N | 1 2

    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

  • M A R K E T I N F O R M AT I O N | 1 3

    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

  • M A R K E T I N F O R M AT I O N | 1 4

    Location Map

  • M A R K E T I N F O R M AT I O N | 1 5

    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

  • M A R K E T I N F O R M AT I O N | 1 6

    Oblique Aerial Map

  • M A R K E T I N F O R M AT I O N | 1 7

    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

  • M A R K E T I N F O R M AT I O N | 1 8

    DOWNTOWN DENVER—

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

    FINANCIAL ANALYSIS

  • F I N A N C I A L A N A LY S I S | 2 0

    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.

  • F I N A N C I A L A N A LY S I S | 2 1

    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

    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.

  • F I N A N C I A L A N A LY S I S | 2 2

    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

    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.

  • F I N A N C I A L A N A LY S I S | 2 3

    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

    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.

  • F I N A N C I A L A N A LY S I S | 2 4

    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

    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.

  • F I N A N C I A L A N A LY S I S | 2 5

    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

    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.

  • F I N A N C I A L A N A LY S I S | 2 6

    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

    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.

  • F I N A N C I A L A N A LY S I S | 2 7

    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

    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.

  • F I N A N C I A L A N A LY S I S | 2 8

    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

    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.

  • F I N A N C I A L A N A LY S I S | 2 9

    RENTAL COMPARABLES

  • F I N A N C I A L A N A LY S I S | 3 0

    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

  • F I N A N C I A L A N A LY S I S | 3 1

    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.

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    Investment TeamRobert BratleyT [email protected]

    Marcus GriffinT [email protected]

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    Justin HuntT [email protected]

    executive summary