Alder Creek Village 1100 NW Warrenton Dr. Warrenton, Oregon

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1 Alder Creek Village 1100 NW Warrenton Dr. Warrenton, Oregon A 5-star, 42 space 55 and Older manufactured housing community together with 24 RV spaces and a 65 unit mini storage facility June 2011 For further information contact: Don Kilpatrick Loren Landau Commonwealth Commercial Brokerage Company 7007 SW Cardinal Lane Suite 185 Portland, Oregon Fax:

2 Alder Creek Village Warrenton, OR Terms of Sale Asking Price: $ 3,350,000 Down Payment: 1,340,000 Balance: $ 2,010,000 Calculation of Value: MH Park Value: 2,260,000 RV Park Value: Storage: Total Value: $ 3,320,000 $ (Valued at 6.5 CAP) 650,000 (Valued at 7.5 CAP) 410,000 (Valued at 9 CAP) Financing: Purchaser to secure new financing. Any and all costs associated with the new loan shall be borne by Purchaser. The anticipated terms are as follows: Balance Amortization Term (mos.) Interest Monthly Payments Annual Payments Proposed Loan $ 2,010, % $ 12,950 $ 155,400 Investment Summary Capitalization Rate 6.9% Net Operating Income $ 232,404 Cash Flow $ 77,004 Return on Cash Invested 5.7% 6/13/2011 Alder Creek.xls.xls

3 Alder Creek Village Park and Storage Warrenton, Oregon Pro Forma of Income and Expenses Income (1) Rent MH Income RV Income Total 33 "Non View" Spaces $ $137,745 9 "Creekside" Spaces $ , MH Space Income $ 187, RV Income 66,737 (2) 66 Total Space Income $ 187,974 MH Vacancy/Credit Loss 1.0% (1,880) (3) Gross Effective Income $ 186,095 Water/Sewer/Cable Recoup 31,022 (4) Electricity Recoup 11,131 (5) Total Gross Income $ 217,117 $ 77,868 $ 294,985 Operating Expenses (6),(7) 2010/2011 Real Property Taxes 10,479 3,758 14,237 Personal Property Taxes 1,282 1,282 Insurance 1, ,892 Cable 3,097 3,097 Water/Sewer/Storm/Garbage 27,342 (8) 27,342 Electricity 12,817 (9) 12,817 On-Site Management (10) Salary 10,000 5,000 15,000 Space Rent 4,174-4,174 Payroll Taxes 1, ,700 Maintenance & Repairs - 3.0% (11) 5,583 2,336 7,919 Refunds 6, ,125 Office/Admin/Misc 1,148 1,148 Accounting/Legal - Budget ,000 Total Expenses % $ 70,264 $ 29,246 $ 99,733 Net "Park" Operating Income $ 146,853 Net "RV" Operating Income $ 48,622 $ 195,251 Storage Net Operating Income (14) 37,153 Total NOI $ 232,404 Projected Debt Service 155,400 Projected Cash Flow $ 77,004 Alder Creek.xls.xls - 6/13/2011

4 Alder Creek Village Pro Forma Notes 1. Tenants are on a month-to-month rental agreement. However, rent increases are based on a combination of the changes in Portland area CPI plus the changes in property taxes and net funded improvements. The last rent increase in February, 2011 was $5.66 for interior "non-view" spaces and $7.50 for "Creekside" spaces. 2. The RV spaces are rented on a 3, 6 or 12 month basis only. Daily, weekly or monthly rental of RV spaces for guests of MH residents is allowed. The income shown represents actual 2010 income with an adjustment of $1,320 to adjust two rents for "Seller friends" (#363 and #387). There are no pets allowed in RV area The MH park has had no vacancies for several years. The park recoups water/sewer/storm charges from the tenants pro rated from the main meter based on the City of Warrenton's billing rate. 5. Electricity is charged back to RV tenants based on private electrical meters that are read monthly. 6. Except as otherwise stated the expense represents trailing 12-month expenses from 6/1/10-5/31/ The total expenses have been prorated based on the gross income. The "total" expense based on current expenses for the categories. 8. The water, sewer and storm drain expense is recouped from tenants based on the "base" rates from the City of Warrenton. Figure represents acutal 2010 utility expenses less the RV cable and RV electricity. Garbage expense for the park is a dumpster for the RV section and the owner's individual can service. 9. The difference between the RV and MH utility income and recoups represents charges for owner, mailroom, streetlights and other common area electrical use. 10. The owner's son is currently managing the community and all storage facilities. The compensation provided is based on similar size and quality community compensation. 11. Budget based on 3% of gross rents. The 12-month trailing expenses are $4,155 of which approximately $2,400 was for landscaping. 12. Represents trailing 12-month (June, May, 2011) water/sewer rebate. 13. Figure shown is trailing 12-month (June, May, 2011) refunds to RV tenants. The RV refund is for prepaid RV rent reimbursed for early departure of tenants. 14. Represent the 12-months "net" income from June, May, 2011.

5 PROPERTY DESCRIPTION General Description: Location/Community: Alder Creek Village is a modern, high quality development consisting of Alder Creek Village Manufactured Home Community which contains 42 double and triple wide manufactured home spaces plus 24 RV spaces and a 65 unit remotely controlled/managed mini storage facility all located adjacent to one another on Warrenton Drive immediately off State Highway 104 (See attached vicinity map. Alder Creek Village Is located within the city limits of Warrenton in a mixed use neighborhood. The mini storage facility has 250 feet of frontage on Highway 104; a private drive provides access to the manufactured home community and RV park. The immediate neighborhood is improved with another RV park (Kamper s Retreat RV Park) to the north; Alder Creek to the east; commercial and residential developments to the south and Highway 104 to the west. The City of Warrenton is a small coastal community with a population of 4,000 residents located adjacent to the mouth of the Columbia River and the Pacific Ocean. Warrenton along with the adjacent City of Astoria (population 10,000) are the commercial and residential centers on the north Oregon coast. Fair Housing Status: Alder Creek Village is designated as a senior 55+ manufactured home community. Age: Size: Alder Creek mini Storage was built in 2003; Alder Creek Village Manufactured Home Community and RV park was built in The mini storage facility is located on a.76 acre parcel separate from Alder Creek Manufactured home Community and RV park which is located on a 9.88 acre parcel. Zoning: RM (Manufactured Home Community) - A Medium Density Zone under the authority of the City of Warrenton. This zone applies to both the storage facility and the manufactured home community. A manufactured home park is a conditional use in the RM zone; the RV and mini storage uses are approved, pre existing, non confirming uses. The original development was approved by the City of Warrenton; however, the adoption of the current zone subsequent to the development of the property has resulted in the current uses being an approved, nonconforming use. Alder Creek Village- 11/01/10

6 Wetland/Flood Plain Status: Portions of the property lie in Flood Zone A. Flood Zone A refers to a flood insurance zone that corresponds to the 1-percent annual chance of floodplains that are determined in the Flood Insurance Study by approximate methods of analysis. All homes in Alder Creek Village have elevation certificates showing them to be at least 1 above the 100 year floodplain. Reference is made to Flood Plain insurance rate map Panel No dated May 15, Areas immediately east of the Alder Creek Village include the Alder Creek drainage and wetlands. The development of the property occurred prior to the City of Warrenton establishing a wetlands map in Prior to that time, development within wetlands areas was permitted. Improvements: - Interior Streets Interior streets in Alder Creek Manufactured Home Community are 27 wide and are bordered by a 3 sidewalk. The street surfaces are in excellent condition. The street design incorporates a crown profile with storm water flowing to the side of the street where it drains into a system of curb side catch basins. Storm water is drained off site into Alder Creek. A 30 foot wide street extends along the north side of the Manufactured Home Community and provides access to the 24 RV spaces. There is no curb or sidewalk on the north side of this street. - Off-Street Parking Off street parking in the Manufactured Home Community portion of the development is on concrete driveways that vary in width with the size of the garage but typically measure approximately 24 to 28 wide. Off street parking in the RV section is on asphalt paved driveways/parking pads for 9 of the spaces and on gravel driveways/parking pads for the remaining spaces. - Garages: Each home has a tenant owned, attached garage of a minimum size of not less than 400 square feet. The garages are constructed of the same material as the siding on the home and have a pitched roof with asphalt singles - Interior Lighting Overhead subdivision style street lights are located at several points throughout the development. Utility Systems: - Water Public water is provided to the community by the City of Warrenton. Water usage is billed back to each tenant monthly based on the minimum monthly rate by the City of Warrenton. Community water lines are constructed of PVC plastic. Water service to the RV portion of the development is included in the base rent. The water system in this portion of the development is also constructed of PVC plastic. Alder Creek Village- 11/01/10

7 - Sewer Public sewer is provided to the community by the City of Warrenton. Sewer charges for the Manufactured Home portion of the community are billed back to each tenant monthly based upon water usage. Sewer service is included in the base rent for the RV space tenants. Sewer lines throughout the development are constructed of PVC plastic. - Electricity Underground 200 amp electrical service is provided to each manufactured home space. Usage charges are billed directly to each resident by Pacific Power. The RV spaces are served with underground amp service. Electrical service for the RV spaces is sub metered and billed back to each tenant monthly. - Cable TV & Telephone Underground Cable TV service is provided by Charter Cable and is billed to each tenant/resident in the Manufactured Home portion of the development directly by Charter Cable. Cable service is included in the base rent for the RV park residents. - Garbage Weekly individual garbage can service is provided to each tenant in the Manufactured Home portion of the community by the City of Warrenton and is billed to each tenant directly by the City. Garbage service is provided to the RV park tenants and is included in the base rent. A dumpster, located in a screened enclosure, is located in the RV area. - Fire Protection Fire hydrants are located in the community in accordance with local fire code. SW/DW Ratio: Space Sizes: Perimeter Fencing: Park Owned Home: There are three triple wide and 39 double wide homes in Alder Creek Village. All homes have wood siding, composition roofs and are pit set with cement block skirting. Typical manufactured home spaces measure 60 feet wide by 90 feet deep. Some spaces are larger; the dimensions of the spaces vary based on location. The RV spaces measure 25 feet wide by feet deep. Nine of the RV spaces have asphalt driveways/parking pads; the remaining RV spaces have gravel driveways/parking pads. The north and south boundaries are enclosed with a 6 high wood fence; the east boundary is unfenced and extends to Alder Creek; the west boundary is enclosed with a 6 high chain link fence with slats. A1999 Fuqua manufactured home measuring 28 by 56 with an attached 22 by 20 two-car garage is located on space #362 and is included in the sale. The home is free and clear of any debt. Alder Creek Village- 11/01/10

8 2010/2011 Tax Information: Acct. # Land Value Imp. Value Total Value Assessed Value 2010/2011 Taxes $1,208,115 $246,062 $1,454,177 $1,128,710 $14, $124,465 $183,884 $308,349 $193,448 $ Total $1,332,580 $429,946 $1,762,526 $1,322,158 $16, Home $123,471 $123,471 $101,167 $1, Financing: Alder Creek Village is owned free and clear of any debt. ALDER CREEK STORAGE FACILITY: Description: Management: The Alder Creek storage facility contains 37 mini storage units and 28 RV parking spaces. A table summarizing the various RV and mini storage units/spaces by size and rental rates is attached. The mini storage units are located in a single building with outside access. The building is of wood frame construction with hardiboard siding. All interior floors are concrete; interior walls are drywall. All the interior units are heated. The roofing material is three tab asphalt shingles. All exterior doors to the mini storage units are steel, roll-up style. A facility office is located in the building at the entrance to the compound. All exterior surfaces in the mini storage compound are paved. The perimeter of the compound is enclosed with a six foot high chain link fence with vinyl slats. The fence is topped with three strands of barbed wire. Access to the property is controlled by a camera monitored electric gate. A camera based security/alarm system provides complete coverage of the storage facility at all times. Overhead lighting is provided throughout the compound. Detailed construction plans of the mini storage building are available upon request. The Alder Creek storage facility is designed to be operated remotely if desired by an owner/operator. Prospective renters can access management by phone 24 hours a day and can rent, reserve or occupy a storage unit or RV parking space without direct, personal contact with an on- site manager. Computer software programs specifically designed for management and security provide efficient, interactive support of the facility s operations. The management and security systems, including on site computer and support equipment are included with the sale. A detailed summary of the management/accounting and security systems is available upon request. Alder Creek Village- 11/01/10

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