VILLAGE AT PROMINENCE POINT APARTMENTS, PHASE 1

Transcription

1 MARKET STUDY REGARDING THE PROPOSED VILLAGE AT PROMINENCE POINT APARTMENTS, PHASE 1 TO BE LOCATED AT 1700 NORTH WASHINGTON BOULEVARD NORTH OGDEN, UTAH JEFF NEESE, MAI AND JOSH GREEN 6440 Wasatch Blvd., Suite 215 Salt Lake City, Utah Phone: jeff@wsmultifamily.com PREPARED FOR MR. JACK BARRETT MERITAGE COMPANIES, LLC FILE # g DATE OF THE REPORT: MARCH 17, 2015

2 March 17, 2015 Mr. Jack Barrett Meritage Companies, LLC North 80 th Way Scottsdale, AZ Type of Report: Market Study Description of Project: Village at Prominence Point Apartment Project, Phase 1 Location: 1700 North Washington Boulevard Municipality: North Ogden, Utah Client: Meritage Companies, LLC Western States File No: g Dear Mr. Barrett: At your request, a market study regarding the proposed Village at Prominence Point apartment project in North Ogden, Utah has been completed. An investigation of current market conditions has been made in order to estimate the demand, rental rates and expenses for the proposed improvements. The project is planned for development on a site in the northern portion of Weber County, in the city of North Ogden. The site is easily accessible and within a reasonable distance to traffic arteries, shopping, and employment centers. The analyses, opinions, and conclusions, as well as the preparation of this report, have been in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. Also, the report has been completed in accordance with requirements of the current Uniform Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal Foundation. The location is considered suitable for development of market-rent apartments. The site is convenient to transportation, shopping, services and employment centers S Wasatch Blvd, Suite 215 ~ Salt Lake City, Utah ~ Phone

3 Mr. Barrett Page 2 A first phase of 181 units is proposed. Additional phases may be added in the future. The project design consists of a "Class B+" garden apartment project as well as two-story townhomes. It is anticipated that that there will by a typical array of recreational amenities, including an outdoor pool, hot tub and a clubhouse with a fitness center and a social room. It has been assumed that the project is to be rented at unrestricted market rental rates. Please note that the rental rates and expenses projected in this market study assume that the project will be developed with the features, quality and amenities that have been outlined in this report. Also note that income and expenses are projected as of the current date and have not been trended forward to reflect the anticipated date of completion of the project. Your attention is invited to the attached market study, which outlines in detail the data used to estimate the likely demand for the improvements. Respectfully submitted, Date Date Josh Green Utah State Certified General Appraiser License # CG00 (Exp. 8/31/16) Jeff Neese, MAI Utah State Certified General Appraiser License # CG00 (Exp. 6/30/15) JN/mb Enc.

4 1 INTRODUCTION LETTER OF TRANSMITTAL TABLE OF CONTENTS TABLE OF CONTENTS... 1 SUMMARY OF CONCLUSIONS... 3 MARKET STUDY... 7 SITE ANALYSIS... 8 AERIAL PHOTO OF SITE AND SURROUNDING AREA AERIAL PHOTO OF SITE AND IMMEDIATE SURROUNDINGS...12 SITE AERIAL PHOTOGRAPH SITE PHOTOGRAPHS COMMUTER RAIL MAP BUS SYSTEM MAP DESCRIPTION OF THE PROPOSED IMPROVEMENTS MARKET / SUBMARKET DEFINITION ECONOMIC CONDITIONS IN WEBER COUNTY APARTMENT MARKET CONDITIONS IN WEBER COUNTY WEBER COUNTY MAP CHARACTERISTICS OF THE NEIGHBORHOOD NEIGHBORHOOD MAP SURVEY OF COMPETITIVE ONE- AND TWO-BEDROOM RENTALS...51 COMPARABLE ONE- AND TWO-BEDROOM RENTALS MAP ANALYSIS OF ONE-BEDROOM RENT COMPARABLES SURVEY OF COMPETITIVE TOWNHOUSE RENTALS COMPARABLE TOWNHOUSE RENTALS MAP ANALYSIS OF TOWNHOUSE COMPARABLES ONE BEDROOM UNITS ONE BEDROOM UNITS TWO BEDROOM, TWO BATH UNITS TWO BEDROOM, 2.5 BATH TOWNHOUSE UNITS THREE BEDROOM, TWO BATH TOWNHOUSE UNITS POTENTIAL RENTAL INCOME AT MARKET RENTAL RATES PROJECTION OF OPERATING EXPENSES PROFORMA OPERATING STATEMENT CAPTURE RATE

5 2 ADDENDUM... 1 CERTIFICATION OF MARKET ANALYST... 2 CERTIFICATION OF MARKET ANALYST... 3 ASSUMPTIONS AND LIMITING CONDITIONS... 4 QUALIFICATIONS OFJEFF NEESE, MAI... 6 ENGAGEMENT LETTER... 9 APPRAISER S LICENSE COPY... 10

6 3 SUMMARY OF CONCLUSIONS Much of the rental housing in Weber County is old. There has been strong demand for modern, functional rental housing. This is evident in the high occupancy rate found in modern competing projects. The current average vacancy rate in the area is around 5%. It appears that market conditions should remain strong over the next three years, as demand for new apartments is projected to be in balance with the supply of new apartments. The site is located in the northern portion of Weber County, in the northern portion of North Ogden. It is in a developing residential and commercial area. The site is convenient to traffic arteries, shopping, schools and employment centers. The project should appeal to the market, as it will provide a modern, high-quality rental housing. The site is reasonably convenient to shopping, services and employment centers. The characteristics of the site and neighborhood support the conclusion that the site is suitable for development of a B+ Quality market-rent apartment project. Such a project would be expected to have large apartment units constructed at a moderate density. It is proposed that the project be designed with a mix of three-story walk-up buildings, fully above-grade, and two-story townhouse units. Parking is provided in surface lots, with a combination of carport stalls and attached 2-car garages for the townhouse units. It is assumed that the project design, finishes and amenities will be typical of Class B+ quality apartments. Suggested Unit Amenities Include: Maximize natural light Nine-foot ceilings (possible vaulted ceilings on upper level) Spacious, functional and efficient floor plans Balcony or patio for all units Walk-in closets in the master bedroom Storage closet Kitchen open to living area in a great room configuration Hardwood veneer cabinets with granite countertops Self-cleaning oven Microwave oven Dishwasher Washer/dryer included in the unit Wiring for cable television and high-speed internet

7 4 Suggested Project Amenities Include: Clubhouse with social room and big-screen television Fitness center Outdoor heated swimming pool with large sun-deck area. Hot tub Barbecue and picnic areas Covered parking Adequate landscaped areas Tot lots / playgrounds Dog park Community Amenities offered by the site include: Proximity to public transportation Proximity to transportation arteries Proximity to employment centers Proximity to retail & restaurants The Suggested Unit Mix is: 24 1-Bedroom, 550 Square Feet 36 1-Bedroom, 775 Square Feet 60 2-Bedroom, 2 1,050 Square Feet 21 2-Bedroom, 2.5-Bath 1,250 Square Feet 40 3-Bedroom, 2.5 Bath 1,400 Square Feet It is anticipated that all units will be rented at unrestricted market rental rates. Assuming that the project is constructed with the characteristics listed above, current base-level market rental rates are projected as follows: SUMMARY OF BASE RENTAL RATES Unit Type Gross Base Rent Per Unit Size Market Rent Sq.Ft. Small 1-Bedroom 550 $600 $1.09 Large 1-Bedroom 775 $750 $ Bedroom, 2 Bath 1,050 $900 $0.86 Two-Bedroom Townhouse 1,250 $1,100 $0.88 Three-Bedroom Townhouse 1,400 $1,200 $0.86 No floor or view premiums are projected. Based on these figures, potential annual rental income at market rental rates is projected at $1,998,000, an average of $920 per unit per month. This is equal to an average rental rate of $0.89 per square foot per month.

8 5 Occupancy rates in competing market-rent apartment projects in the area are fairly high. The average occupancy rate in the projects surveyed is 99.0%. The overall county-wide occupancy rate is near 95%. Given the number of apartment units under construction or planned for development, the market-wide occupancy rate is expected to remain in balance over the next three years, reaching approximately 5.4% by Fluctuations in occupancy rates should be expected over the long-term. An additional amount should be budgeted for credit losses. Considering the available data, a stabilized vacancy and credit loss rate of 7% should be expected. Other income will be generated through fees, forfeited deposits, utility reimbursements and telecommunications charges. Effective gross income is estimated as follows: Gross Scheduled Rental Income $1,998,000 Less 7% Vacancy & Credit Loss $139,860 Collected Rental Income $1,858,140 Other Income Fees & Charges $117,650 Forfeited Deposits $9,050 Utility Reimbursements $86,880 Telecommunications $181,724 Total Other Income $395,304 Effective Gross Income $2,253,444 Based on comparable market data, operating expenses have been projected at $4,091 per unit per year. A replacement reserve of $250 has been projected, resulting in total operating expenses and replacement reserves of $4,341 per unit. Current capitalization rates in the area are in the 5.0% to 6.2% range. However, future capitalization rates will fluctuate with market conditions and interest rates. The projected rental rates are affordable for households earning at least 51% of area median. Therefore, the project will appeal to a large percentage of renter households. The estimated capture rate for the subject is 1.9% of the income-qualified renter households in the sub-market as of the date of completion (2018).

9 6 Absorption for similar apartment projects in the area has been in the 8 to 26 units per month range. Given the size, unit mix and location of the subject, an absorption rate of 14 units per month is projected. At 14 units per month, about 12 months would be required in order to achieve stabilization at 93% occupancy. However, as the project will be constructed in several buildings, some units will be completed well ahead of final completion of construction. Assuming that the first units are ready in 10 months and assuming that the total construction period is 16 months, absorption is projected to extend six months following the date of completion. The total development and lease-up period is projected at 22 months.

10 7 MARKET STUDY

11 8 SITE ANALYSIS The site is located in a developing residential and commercial neighborhood in North Ogden. The overall site is generally rectangular in shape and contains about acres. A mixed-use project is planned for the site that would include and assisted care facility, apartments, for-sale townhomes and commercial space. It appears that about half of the site will be required for development of the proposed Phase 1 of the apartment project. The site is easily accessible via public roadways and is within reasonable proximity to major employment centers. Proximity to Shopping and Services The proximity to employment, shopping and mass transit are major factors affecting the desirability of a site for apartment development. The site's proximity to these amenities are described in the following table. Employment Opportunities PROXIMITY TO SHOPPING, SERVICES, TRANSPORTATION AND EMPLOYMENT Good Avg Fair Poor Comments EMPLOYMENT CENTERS X The site is within reasonable proximity to employment centers. TRANSPORTATION Public Transit X Bus stops are located on Washington Boulevard, directly in front of the site. The Pleasant View commuter rail station is located 3.4 miles northwest of the site. Freeway / Highway X The site is within 4.1 miles of the 2700 North / I-15 interchange. Highway 89 is located 1.7 miles northwest of the site Surface Streets X The site is located at the intersection of Washington Boulevard and 1700 North. Airport X The Salt Lake International Airport is about 46 miles southwest of the site and is easily accessible via Interstate-15 and Interstate-80. GOVERNMENT SERVICES Fire X The site is served by the North View Fire District. There is a station at 315 East 2550 North, about 1.2 miles northwest of the site. Police X The site is served by the North Ogden Police Department. The station is located at 515 East 2600 North, about 1.4 miles northeast of the site. Post Office X The nearest post office is at 221 North Washington Boulevard, about 1.8 miles south of the site.

12 PROXIMITY TO SHOPPING, SERVICES, TRANSPORTATION AND EMPLOYMENT Good Avg Fair Poor Comments HEALTH & RELIGOUS FACILITIES Hospital X The North Ogden Clinic is located at 2400 North Washington Boulevard, North Ogden, about 0.8 miles north of the site. Church X Most denominations are located within a five-mile radius of the site. PARKS & RECREATION Seniors Center X A senior center is located at 485 East 2550 North, about 1.4 miles northeast of the site. Recreation Center X The North Shore Aquatic Center is located 1.3 miles northwest of the site. Park / Trails X Orton / Green Acres Park is located 1 mile northeast of the site. North Ogden Park is located 1.5 miles northeast of the site. Library X The Weber County North Branch Library is located at 475 East 2600 North, about 1.3 miles northeast of the site. SCHOOLS Elementary School X Lincoln Elementary 1235 East Canfield, North Ogden 0.9 miles southeast Junior High School X Orion Junior High School 425 West 2000 North, North Ogden 1.3 miles northwest High School X Weber High School 430 Weber High Drive, Pleasant View 3 miles northwest College / University X Weber State University is located 7.8 miles southeast in Ogden. SHOPPING & SERVICES Gas Station / Convenience Store X Gas stations / convenience stores are located near the intersection of Washington Boulevard and 2700 North, about 1.2 miles north of the site Supermarket X A Smith s grocery store is located about 1.1 miles north. Fashion Shopping X Newgate Mall is 6.6 miles southwest of the site. Pharmacy X Walgreen s is located on the corner of 2700 North and Washington Boulevard, about 1 mile north. Restaurants / Fast Food X There is a concentration of restaurants and fastfood franchises along Washington Boulevard, near the 2700 North intersection Banks X Several banks are located within 3/4 mile of the site. 9

13 10 Proximity to Major Traffic Arteries The site is located in a developing residential and commercial neighborhood at the intersection of Washington Boulevard and 1700 North. Washington Boulevard is the major north-south traffic artery in the area. The site is 1.2 miles north of 2700 North, which is the main east-west traffic artery. The site is approximately 1.7 miles northwest of Highway 89. onramp for Interstate-15 is about four miles northwest of the site. The nearest Public Transportation Public bus transportation is provided in the area by the Utah Transit Authority. Bus routes run along Washington Boulevard. There is a stop immediately in front of the site. The nearest commuter rail station is about 3.4 miles northwest of the site in Pleasant View. Noise and Environmental Concerns There are no known environmental concerns. Conclusion The site's accessibility via public transportation and major traffic arteries are positive factors affecting the desirability of the site for apartment development. The site is easily accessible to employment centers, shopping and services. Schools are within a reasonable distance from the site. Considering these factors, the site most suitable for development with the proposed apartment project.

14 11 AERIAL PHOTO OF SITE AND SURROUNDING AREA

15 AERIAL PHOTO OF SITE AND IMMEDIATE SURROUNDINGS 12

16 13 SITE AERIAL PHOTOGRAPH

17 14 SITE PHOTOGRAPHS Looking West at the Site From 1700 North Looking West Across the Southern Boundary of the Site Looking Northwest Across the Site Looking North Across the Site Existing House Looking West Across the Site

18 15 COMMUTER RAIL MAP

19 16 BUS SYSTEM MAP

20 17 DESCRIPTION OF THE PROPOSED IMPROVEMENTS The site is proposed for development with a mixed-use project. The subject of this market study, is Phase 1 of the proposed apartment project. A phase of 181 units is suggested. The following assumptions have been made regarding the characteristics of the proposed development: The buildings containing the stacked units will be of wood frame construction, three stories, in height, fully above grade. There will be no elevators. The townhouse buildings will be wood frame construction, two stories in height, fully above grade, with a two-car garage for each unit. The stacked units will be accessed via covered breezeways. The building exteriors will covered with low-maintenance materials that may include masonry veneer, stucco and / or hardboard siding. Parking will be adequate for the proposed development and will include some carport stalls and garages. Tenants will receive a carport parking stall in their base rental rate for the stacked units and a two-car garage for the townhouse units. Each unit will have a gas heating system and central air conditioning. The units are to be separately metered for natural gas and electricity. Interior finishes will be competitive with the modern rental apartments in the vicinity. Each unit will have a self-cleaning range/oven, frost-free refrigerator with an ice-maker, a microwave oven and a dishwasher. There will be ample cabinet and counter space. Cabinets will be good quality hardwood with granite (or equivalent) countertops. All units will include a washer and dryer. There will be landscaping around the perimeter of the buildings and along the site s boundaries. Each unit will have a balcony or patio. The units will have 9-foot ceilings, with higher ceilings possible for the units on the upper floor.

21 18 Interior finishes will include painted wood doors and trim. Flooring will be a combination of carpet, ceramic tile and/or "wood-look" plank vinyl flooring. The units will have one or two full bathrooms. All of the bathrooms will include a tub/shower combination with a tiled (or equivalent) surround, a vanity sink in a hardwood veneer base cabinet with a granite countertop. Project amenities will include a club room with a big-screen TV, a fitness center and an outdoor entertainment area that includes a hot tub, swimming pool, sun deck and a barbecue / picnic area. The site plan also calls for bike / pedestrian trails and a mountain bike park. Management offices and maintenance facilities will be located in the clubhouse building. The units will be wired for cable television and high-speed internet. The developer will to provide cable television, internet and telephone service to the tenants, at a mandatory monthly fee. The tenants will pay their own natural gas and electricity costs and will reimburse the landlord for water, sewer and trash collection and common area utility costs.

22 19 MARKET / SUBMARKET DEFINITION The market area is considered to be Weber County. The sub-market is considered to be the Ogden CCD, which includes urban portion of Weber County, generally extending from Pleasant View on the North to South Ogden on the south. This area is defined by the US Census bureau as the Ogden CCD. Weber County Ogden CCD

23 20 ECONOMIC CONDITIONS IN WEBER COUNTY The subject is located in Weber County, in the city of North Ogden. Weber County is in the northern portion of the Wasatch Front Region. Population The population of Weber County grew at an average annual rate of 1.6% between 2000 and Year WEBER COUNTY POPULATION TRENDS 1950 TO Year Population Percentage Change Average Annual Growth Rate , , % 2.9% , % 1.3% , % 1.4% , % 0.9% , % 2.2% , % 1.8% , % 1.0% Source: U.S. Department of Commerce, Bureau of Census The annual rate of population growth has varied from a low of 1.0% in 2006 to a high of 2.3% in Between 2010 and 2013, the annual growth rate was 1.0%. According to projections by the Governor s Office of Planning and Budget, the population of Weber County will increase to 258,412 by This is equal to an average annual growth rate of 1.15%, between 2010 and Since 2000, 24% of the growth has been due to net in-migration.

24 21 Employment Employment in Weber County reached 110,313 in December 2007 before declining 6.0% by December The unemployment rate peaked at 9.4% in December The area's unemployment rate has since declined to 3.9%. The current unemployment rate is higher than the state-wide average of 3.5%, but is below the national average of 5.6%. Trends in Employment Weber County (December of Each Year) Year Labor Force Employment Unemployment Unemployment Rate , ,831 5, % , ,680 4, % , ,316 3, % , ,313 3, % , ,584 9, % , ,689 10, % , ,670 9, % , , % , ,516 6, % , ,220 5, % , ,475 4, % Data is seasonally adjusted.

25 Employment growth in Weber County and the State of Utah is summarized as follows: Trends in Employment Growth For the Past 7 Years (December of Each Year) Weber County State of Utah Year Employment Growth % Change Employment Growth % Change ,584 (1,729) (1.6%) 1,311,587 (27,793) (2.1)% ,689 (4,895) (4.5%) 1,254,267 (57,320) (4.4%) ,670 (1,019) (1.0%) 1,251,971 (2,296) (0.2%) ,958 2, % 1,278,449 26, % ,516 2, % 1,327,320 48, % ,220 3, % 1,379,316 51, % ,475 (745) (0.7%) 1,384,305 4, % Employment growth in Weber County has typically been slower than the State of Utah as a whole. Weber County experienced three consecutive years of employment declines between December 2008 and December However, employment has increased each of the next three years, before declining 0.7% in December Total employment in Weber County is now at 110,

26 23 The largest employers in Weber County are: Weber County Largest Employers 2013 Company Industry Employment Department of Treasury-IRS Federal Government 5,000 6,999 Weber County School District Public Education 3,000 3,999 McKay-Dee Hospital Center Hospital 3,000 3,999 Weber State University Higher Education 2,000 2,999 Autolive Asp, Inc. Motor Vehicle Equip. Manufacturing 2,000 2,999 State of Utah State Government 1,000 1,999 Fresenius USA Manufacturing, Inc. Medical Instrument Manufacturing 1,000 1,999 Ogden City School District Public Education 1,000 1,999 Wal-Mart Warehouse Clubs and Supercenters 1,000 1,999 America First Credit Union Credit Union 1,000 1,999 SOS Staffing Services Temporary Help Services 1,000 1,999 Weber County Local Government 1,000 1,999 The Home Depot Home Improvement Centers Marketstar Corporation Marketing Consulting Services Associated Food Stores, Inc. Grocery Merchant Wholesaler Columbia Ogden Medical Center Health Care Ogden City Local Government Convergys Telephone Call Centers Ogden Clinic Health Care Kimberly Clark Worldwide, Inc. Manufacturing The largest employers are in the Government, Healthcare, Education and Manufacturing industries.

27 24 Wages Wages in Weber County are below-average for the state as a whole. As of the third quarter of 2014, the average private sector monthly wage in Weber County was $3,016. This is about 88% of the state-wide average wage of $3,412. AVERAGE WAGES FOR WEBER COUNTY AND STATE OF UTAH THIRD QUARTER 2014 Weber County State of Utah Total Private Sector $3,016 $3,412 Agriculture $2,598 $2,520 Mining $6,103 $6,228 Utilities $6,963 $6,945 Construction $3,490 $3,700 Manufacturing $4,280 $4,231 Wholesale Trade $3,846 $4,981 Retail Trade $2,108 $2,344 Transportation and Warehousing $3,576 $3,700 Information $2,621 $4,868 Finance & Insurance $3,860 $4,799 Real Estate and Rental Leasing $2,366 $3,412 Professional / Scientific & Technical Svs $3,772 $5,166 Management of Companies / Enterprises $4,272 $5,651 Admin, Support, Waste Mgt, Remediation $2,130 $2,514 Education Services $2,540 $2,799 Health Care & Social Assistance $3,408 $3,157 Arts, Entertainment and Recreation $1,635 $1,980 Accommodation and Food Services $1,142 $1,333 Other Services $2,415 $2,643 Unclassified Establishments - $5,188 Total Public Sector $3,453 $3,517 Federal Government $4,932 $5,772 State Government $2,755 $3,786 Local Government $2,834 $2,668 Source: Utah Department of Workforce Services. 3rd Quarter 2014 The highest average monthly wages found in Weber County are in the Utilities, Mining and Manufacturing industries. The lowest average monthly wages are found in the Accommodation & Food Services, Arts, Entertainment & Recreation and Retail Trade industries.

28 25 Commuting Patterns The majority of the working population in Weber County commutes between five to 24 minutes to their place of work. About 28.7% have commute times of 25 minutes or more. Travel Time to Work Number Percentage Less than 5 minutes 2, % 5 to 9 minutes 14, % 10 to 14 minutes 16, % 15 to 19 minutes 20, % 20 to 24 minutes 19, % 25 to 29 minutes 5, % 30 to 34 minutes 9, % 35 to 39 minutes 1, % 40 to 44 minutes 2, % 45 to 59 minutes 5, % 60 to 89 minutes 4, % 90 or more minutes 1, % Totals 103, % Source: 2013 American Community Survey, 1-Year Estimates US Census Bureau File # B08303

29 26 Construction Construction trends for Weber County and Ogden City over the past several years is summarized below: Building Permits in Weber County and Ogden 2003 to 2014 Year Weber County Ogden Single Family Multifamily Single Family Multifamily (August) , Single family construction in Weber County peaked in 2000 at 1,219 authorized permits. Since that time, single family construction in the county has decreased dramatically. For 2012, there were only 333 single family permits issued. However, the number of single family permit increased by about 28% during Construction figures for 2014 are only available through August. Multifamily construction in Weber County was fairly steady from 2000 to Multifamily construction peaked in 2008 with permits issued for 410 units. Since 2008, multifamily construction declined for three consecutive years. However, 359 multifamily permits were issued as of August 2014.

30 27

31 28 CONCLUSION The population of Weber County grew by 34,703, or 17.1% between 2000 and According to the 2010 Census the county's population was 231,236. That has now increased to about 238,519, as of The county s population is projected to increase at an average annual rate of about 1.15% per year between 2013 and Employment trends in the area have been improving. The unemployment rate in Weber County is presently 3.9%, which is above the state average of 3.5%, but remains below the national average of 5.6%. Over the past year, employment in Weber County decreased by 745, or 0.7%. Given current economic condition, the apartment occupancy rate in Weber County should be expected to improve over the next few years.

32 29 APARTMENT MARKET CONDITIONS IN WEBER COUNTY The subject is located in Weber County, in the city of North Ogden. An overview of the local apartment market is presented below: Households By Tenure As of 2013, about 30.2% of all households in Weber County occupied rental housing. Renter household in the Ogden CCD accounted for just over 30% of all households. HOUSEHOLDS BY TENURE Weber County Ogden CCD Age Number Percentage Number Percentage Homeowners 55, % 50, % Renters 24, % 21, % Totals 79, % 72, % Source: 2013 American Community Survey 5 Year Estimates (Ogden CCD), 1 Year Estimates (Weber County) File #B25003

33 PHYSICAL CHARACTERISTICS OF EXISTING RENTAL HOUSING Units in Structure According to the Census data, about 55% of renters in Weber County live in structures with two or more units. The percentage is somewhat higher in the Ogden CCD, at nearly 61%. 30 RENTER HOUSEHOLDS BY UNITS IN STRUCTURE Weber County Ogden CCD Number Percentage Number Percentage 1 Unit 10, % 8, % 2 Units 1, % 2, % 3 or 4 Units 2, % 3, % 5 to 9 Units 1, % 1, % 10 to 19 Units 2, % 2, % 20 to 49 Units 2, % 2, % 50 or More Units 1, % 1, % Mobile Home or Other % % Totals 24, % 21, % Source: 2013 American Community Survey 5 Year Estimates (Ogden CCD), 1 Year Estimates (Weber County) File #B25032

34 31 Bedrooms in Rental Housing Units About 87% of renter households in Weber County occupy a unit with one, two, or three bedrooms. The percentage is similar for the Ogden CCD, at 85%. RENTER HOUSEHOLDS BY BEDROOMS IN UNIT Weber County Ogden CCD Number Percentage Number Percentage No Bedroom % % 1 Bedroom 4, % 4, % 2 Bedrooms 8, % 9, % 3 Bedrooms 7, % 5, % 4 Bedrooms 1, % 1, % 5 Or More Bedrooms 1, % % Totals 24, % 21, % Source: 2013 American Community Survey 5 Year Estimates (Ogden CCD), 1 Year Estimates (Weber County) File #B25042

35 32 Age of Rental Housing About 43% of rental housing in Weber County has been constructed since The median year built for rental housing in Weber County is About 39% of rental housing in Weber County has been constructed since The median year built for rental housing in Weber County is RENTER HOUSEHOLDS BY YEAR THEIR HOUSING UNIT WAS CONSTRUCTED Weber County Ogden CCD Number Percentage Number Percentage 2010 or later 1, % % 2000 to , % 3, % 1990 to , % 2, % 1980 to , % 2, % 1970 to , % 4, % 1960 to , % 2, % 1950 to , % 2, % 1940 to , % 1, % 1939 or earlier 4, % 3, % Total 24, % 21, % Median Year Built Source: 2013 American Community Survey 5 Year Estimates (Ogden CCD), 1 Year Estimates (Weber County) File #B25036

36 SOCIAL AND DEMOGRAPHIC CHARACTERISTICS OF RENTERS Household Size For Renter Households About 52% of renter households in Weber County consist of one or two persons, while about 19% have five or more members. About 57% of renter households in the Ogden CCD consist of one or two persons, while about 15% have five or more members. 33 RENTER HOUSEHOLDS BY HOUSEHOLD SIZE Weber County Ogden CCD Number Percentage Number Percentage 1-Person Household 7, % 6, % 2-Person Household 5, % 5, % 3-Person Household 4, % 3, % 4-Person Household 2, % 2, % 5-Person Household 2, % 2, % 6-Person Household 1, % % 7 or More Persons % % Totals 24, % 21, % Source: 2013 American Community Survey 5 Year Estimates (Ogden CCD), 1 Year Estimates (Weber County) File #B25009

37 34 Age of Householders In Weber County, about 43% of renter households are headed by a person under 35 years of age. About 22% are 55 years of age or older. In the Ogden CCD, about 45% of renter households are headed by a person under 35 years of age. About 21% are 55 years of age or older. RENTER HOUSEHOLDS BY AGE OF HOUSEHOLDER Weber County Ogden CCD Number Percentage Number Percentage 15 To 24 Years 3, % 3, % 25 To 34 Years 7, % 6, % 35 To 44 Years 5, % 4, % 45 To 54 Years 3, % 3, % 55 To 59 Years 2, % 1, % 60 To 64 Years 1, % % 65 To 74 Years 1, % 1, % 75 To 84 Years % % 85 Years and Older % % Totals 24, % 21, % Source: 2013 American Community Survey 5 Year Estimates (Ogden CCD), 1 Year Estimates (Weber County) File #B25007

38 35 Median Income Level For Renter and Homeowner Households Renter households have lower incomes than do homeowner households. Median income for renter households in the Weber County is only about 59% of the overall median income. Incomes in the Ogden CCD are similar to those found in the county as a whole. TENURE OF HOUSEHOLDS BY MEDIAN INCOME Weber County Ogden CCD Median Household Income $53,809 $53,366 Homeowner Households $66,313 $64,633 Renter Households $31,707 $31,859 Renter Income as Percentage of Total 58.9% 59.7% Source: 2013 American Community Survey 5 Year Estimates (Ogden CCD), 1 Year Estimates (Weber County) File #B25119

39 36 Incomes of Renter Households In Weber County, about 38% of renter households earn less than $25,000 per year, while 26% earn more than $50,000 per year. Incomes in Ogden are lower, with about 33% earning less than $25,000 per year and 26% earning more than $50,000 per year. INCOMES OF RENTER HOUSEHOLDS Weber County Ogden CCD Income Number Percentage Number Percentage Less than $5,000 1, % 1, % $5,000 to $9,999 1, % 1, % $10,000 to $14,999 1, % 1, % $15,000 to $19,999 1, % 1, % $20,000 to $24,999 2, % 1, % $25,000 to $34,999 2, % 3, % $35,000 to $49,999 4, % 4, % $50,000 to $74,999 3, % 3, % $75,000 to $99,999 2, % 1, % $100,000 to $149, % % $150,000 or More % % Totals 24, % 21, % Source: 2013 American Community Survey 5 Year Estimates (Ogden CCD), 1 Year Estimates (Weber County) File #B25118

40 37 Trends in Rental Rates Rental rates in Weber County have been decreasing recently. From 2011 to 2012, the average rental rate increased 4.4%. However, from 2012 to 2013, the average rental rate decreased by about 0.9%. Courtesy of Equimark Properties

41 38 Occupancy Rates at Competing Projects According to a recent study by Equimark Properties, the average vacancy rate in Weber County is 4.7% (year-end 2014), a decrease over the 6.9% 2013 figure. Equimark Properties

42 In the rental survey completed for this report, occupancy data was available on nine stabilized properties, containing a total of 1,710 units. Of those, 17 units, or 1.0%, were vacant. VACANCY RATES IN EXISTING COMPETING APARTMENT PROJECTS IN WEBER COUNTY Name No. of Units Units Occupancy Vacant Percentage Settlers Landing % Pinebrook % Falls at Canyon Rim % Orchard Cove % Woodland Cove % Colonial Court % Colonial Court II % The Georgian % Station at Pleasant View % Totals 1, % 39 Based on the available data, the average vacancy rate in Weber County is estimated at about 5%.

43 40 NEW DEVELOPMENT OF APARTMENTS IN WEBER COUNTY Projects Completed Since 2011 in Weber County Imagine Jefferson unit LIHTC project. 50 LIHTC units and 9 market rent units. Station at Pleasant View - 72-unit LIHTC project with deeply discounted rents. Colonial Court, Phase 2 a 73-unit urban mid-rise in Ogden. Station at Pleasant View, Phase 2-72-unit LIHTC project with deeply discounted rents. Projects Under Construction in Weber County Mountain View Townhomes unit townhouse project at 775 W. Harrisville Road in Ogden. This project is to be constructed in three phases, of 58; 47 and 40 units. The Cove at Pleasant View - An 82 unit townhouse apartment project in Pleasant View West Haven Apartments a 192-unit Class B+ project on Hinkley Drive in West Haven. Ogden River 148 units are under construction near 20th Street and Childs Avenue. The developer is PEG Development. Planned New Construction in Weber County Tower View Apartments - proposed 128-unit Class-A market-rent project. Aderra - a 114-unit project planned on 4600 South 3500 West in Roy. A gardenstyle Class-B+ project. 27th Street Apartments - a 62-unit Class B project to be located at th Street in Ogden. North Ogden Townhomes a 79-unit townhouse apartment project to be located in North Ogden. Imagine Jefferson, Phase 2 a 113-unit LIHTC project planned for the central city area of Ogden. Station Square a 25-unit Low-Income Housing Tax Credit project planned at 2350 West 4000 South in Roy, adjacent to the Roy FrontRunner station. Lomond View Retirement Apartments a 38-unit Low-Income Housing Tax Credit project planned at 645 Grant Avenue in Ogden. Village at Prominence Point, Phase 1 (Subject) 181 unit market-rent project in North Ogden.

44 The 12 planned and under construction projects contain a total of 1,307 units. Other projects may be developed in the county; however, there are no others are known to be in the late planning stages at this time. SUMMARY OF APARTMENT CONSTRUCTION IN WEBER COUNTY Period Number of Units Completed 2011 to Current 276 Under Construction 567 Proposed

45 Demand For New Apartments The population of Weber County was 231,236 in 2010 according to the Census Bureau. This is an increase of 34,703, or 17.7% over the 2000 population, an annual rate of growth of about 1.6%. According to the Utah Population Estimates Committee, the population of Weber County is expected to increase to 258,423 by This is an increase of 19,904, or 8.3% over the 2013 population. The annual rate of growth is about 1.15%. As of 2013, the population of Weber County was 238,519, according to the Census Bureau. This is an increase of 7,283, or 3.1% over the 2010 figure. Recent trends in population, tenure and household size are as follows: TRENDS IN TENURE AND HOUSEHOLD SIZE 2010 TO Increase Percentage Increase Population 231, ,519 7, % Households 78,748 79,829 1, % Average Household Size Homeowner Households 57,129 55,739 (1,390) (2.4%) Renter Households 21,619 24,090 2, % Renter Household Percentage 27.5% 30.2% - - Between 2010 and 2013, the area s population increased at an annual rate of about 1%. However, renter households increase at an average annual rate of 3.6%. This resulted in an increase in the percentage of households who rent increasing from 27.5% to 30.3%. Based on recent trends, it has been assumed that 40% of total household growth between 2013 and 2020 will be renter households. Population growth is projected at 1.15% annually. Rental household demand is estimated as follows: WEBER COUNTY RENTER HOUSEHOLD GROWTH PROJECTIONS 2013 TO 2020 Year Population Rate of Growth Households Renter Household Growth Renter Households ,519-79,829-24, , % 80, , , % 81, , , % 82, , , % 83, , , % 84, , , % 85, , , % 86, ,753 42

46 Assuming that 40% of all household growth is renter households over the next three years, apartment demand is projected to increase by 1,141 units, an increase of 4.6%. As of 2018, it is estimated that renter households will comprise 30.9% of all households in the area, versus 30.5% today. Expected new supply includes 567 units that are under construction and 740 units planned for construction. The figures in the table below assume that all 1,307 units will be constructed and will be completed over the next three years. 43 WEBER COUNTY SUPPLY AND DEMAND FOR APARTMENTS 2015 THROUGH 2018 Current Occupancy 24,829 New Demand 2015 through ,141 Total Demand ,970 Current Supply (Assumes 95% Current Occupancy) 26,136 Projected New Supply ,307 Total Supply ,443 Estimated Vacancy Rate % Based on the figures above, it appears that the market should remain in balance over the next three years. Conclusion Much of the rental housing in Weber County is old. There has been strong demand for modern, functional rental housing. This is evident in the high occupancy rate found in modern competing projects. The current average vacancy rate in the area is around 5%. It appears that market conditions should remain strong over the next three years, as demand for new apartments is projected to be in balance with the supply of new apartments.

47 44 WEBER COUNTY MAP

48 45 CHARACTERISTICS OF THE NEIGHBORHOOD The subject property is located in the city of North Ogden, which is one of several mostly residential communities located in the northern portion of Weber County. The neighborhood consists generally of the northern portion of Weber County. For the purposes of this market study, the neighborhood will be defined as the cities of North Ogden and Pleasant View. Proximity At its nearest point, the neighborhood is about four miles north of the central business district of Ogden. Boundaries and Accessibility The boundaries of the neighborhood consist of the political boundaries of North Ogden and Pleasant View. This includes the northernmost portion of Weber County. Jurisdiction The neighborhood is within the jurisdiction of the cities of North Ogden and Pleasant View. Population The neighborhood is influenced by the same population base and economic factors that affect the region as a whole. The neighborhood is primarily residential in nature, with a limited amount of neighborhood commercial development. Population trends for neighborhood cities are as follows: HISTORICAL POPULATION FOR THE NEIGHBORHOOD 1990 to 2010 Year North Total Pleasant View Ogden Neighborhood ,477 3,661 15, ,128 5,696 20, Year Increase 3,651 2,035 5,686 Percentage Increase 31.8% 55.6% 37.6% ,405 8,034 25, Year Increase 2,277 2,338 4,615 Percentage Increase 15.1% 41.0% 22.2%

49 The total population growth for the neighborhood was 22.2% between 2000 and This is an average annual growth rate of 2.22% and is a faster growth rate than was found in the county as a whole. 46 PROJECTED POPULATION FOR THE NEIGHBOHOOD 2010 TO 2060 Year North Pleasant Total Ogden View Neighborhood ,357 7,979 25, ,927 9,204 29, ,351 11,876 37, ,923 15,626 52, ,802 18,860 62, ,103 22,337 73,440 Source: Governor s Office of Planning and Budget, 2012 Baseline City Population Projections The majority of the population increase in the neighborhood is projected to occur in the city of Pleasant View. This is due to the fact that the city has large expanses of undeveloped land within its borders. The neighborhood s population is projected to increase by nearly 15% between 2010 and 2020.

50 47 Development Trends Building permit information was available for North Ogden and Pleasant View. The numbers summarized below are for year-end 2013 and represent the most current available data. North Ogden New residential construction in North Ogden increased from 2008 to Single family permits increased again from 2010 to 2011 and saw a decline in the number of permits issued. There has been very little multifamily construction in North Ogden over the past several years. RESIDENTIAL BUILDING PERMITS IN NORTH OGDEN Year Single Family Permits Multifamily Permits (August) 36 0 Residential construction value in 2013 was at the highest level since Commercial construction increased significantly in 2011, before falling sharply in 2012 and Commercial construction increased significantly as of August VALUE OF NEW CONSTRUCTION IN NORTH OGDEN Year Residential Commercial 2008 $3,974,500 $ $8,314,400 $2,072, $7,301,500 $4,053, $9,717,000 $30,271, $12,247,900 $304, $10,877,500 $257, (August) $8,548,600 $9,119,300

51 48 Pleasant View New residential construction in Pleasant View increased from 2008 to Single family permits increased again from 2010 to 2011 and saw a decline in the number of permits issued. Multifamily construction peaked in 2013, when permits were issued for 71 units. RESIDENTIAL BUILDING PERMITS IN PLEASANT VIEW Year Single Family Permits Multifamily Permits (August) Residential construction value has increased each year since Residential construction increased significantly from 2011 to Commercial construction in 2013 reached its highest level since VALUE OF NEW CONSTRUCTION IN PLEASANT VIEW Year Residential Commercial 2008 $6,123,700 $3,036, $15,130,800 $2,670, $11,121,500 $848, $12,959,300 $1,306, $21,444,800 $1,085, $25,988,000 $3,337, (August) $18,312,100 $582,500

52 49 Types of Development The neighborhood is primarily residential in nature. shopping areas have been developed along major roadways. However, neighborhood Adequacy of Utilities All utilities are available in the neighborhood and are believed to be adequate to supply the needs of future development. Public Transportation The nearest commuter rail station is the Pleasant View Station, about 2.3 miles northwest of the site. Local bus lines provide service to the commuter rail station and other parts of the community. Detrimental Influences There is a railroad that travels along the western portion of the neighborhood. lines. The subject property is not located adjacent to a major roadway or active rail CONCLUSIONS The neighborhood consists of the northern portion of Weber County. It is under the jurisdiction of the cities of North Ogden and Pleasant View. The neighborhood is primarily residential in nature. It is easily accessible via major traffic arteries.

53 50 NEIGHBORHOOD MAP

54 51 SURVEY OF COMPETITIVE ONE- AND TWO-BEDROOM RENTALS A survey of competitive properties was completed. The survey concentrated on the most modern suburban apartment projects in Weber County. In the rental survey, the gross unit areas are presented for the subject and the comparables. This includes measurement from the center of party walls to the outside of exterior walls. Balconies and storage closets are not included. Details on the comparable rentals are found on the following pages.

55 52 RENTAL 1 Settlers Landing 3330 South Midland Drive, West Haven Proximity to Subject: 8.7 miles southwest Improvements Number of Units: 276 Type of Construction: Age/Condition: Heating: Cooling: Unit Amenities: Project Amenities: Parking: Average quality wood frame / brick & vinyl 7 years, good Gas-forced air Central A.C. Dishwasher, washer/dryer, patios or balconies, microwave oven, granite countertops, walk-in closets. Clubhouse, playground, pool, spa, fitness center, basketball, wading pool, playground, picnic area with BBQs, pet park. 1 carport per unit, garages available. Parking Charges: Garages are $75. Carports are a mandatory $10 charge. Furnished: No Tenant Utilities: Landlord Utilities: Confirmation: All None Brianna, leasing agent

56 RENTAL RATES Bedrooms Baths Unit Size Rental Rates Rent Per Square Foot Low High Low High $749 - $ $849 - $ ,192 $970 - $ ,280 $990 - $ Concessions $125 off first month s rent. Rent Premiums None Occupancy Remarks 99% (3 vacant) Average quality project located in an industrial / residential transitional area in West Haven. Tenants are billed about $7 for property taxes each month. $75 for garage. $15 for storage units $10 mandatory charge for carport $90 for mandatory data package: internet, telephone and cable TV. 53

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59 56 RENTAL 2 Improvements Pinebrook 318 North Washington Boulevard, Ogden Number of Units: 288 Type of Construction: Age/Condition: Heating: Cooling: Unit Amenities: Project Amenities: Parking: Furnished: Tenant Utilities: Landlord Utilities: Confirmation: Proximity to Subject: 1.7 miles south Average quality 3-story brick & vinyl siding 14 to 16 years, good Gas forced-air Central AC Dishwasher, patio or balcony, laundry hookups Clubhouse, fitness center, pool, spa One carport per unit. Garage for $75 extra. No All None On-site manager

60 57 RENTAL RATES Bedrooms Baths Unit Size Rental Rates Rent Per Square Foot Low High Low High $660 - $ $690 - $ $700 - $ $760 - $ ,075 $770 - $ ,172 $780 - $ ,088 $770 - $ ,135 $800 - $ ,193 $880 - $ Occupancy 100% Concessions None Rent Premiums $75 for garage (optional) Remarks Tenants pay $30 to $36 per month for water, sewer & trash collection.

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63 60 RENTAL 3 Falls at Canyon Rim 6045 South Ridgeline Drive, South Ogden Improvements Number of Units: 288 Type of Construction: Age/Condition: Heating: Cooling: Unit Amenities: Project Amenities: Parking: Furnished: Tenant Utilities: Landlord Utilities: Confirmation: Proximity to Subject: 10.9 miles southeast Average quality 3-story wood frame / brick & stucco 13 years, good Gas-forced air Central A.C. Dishwasher, laundry hookups, patios or balconies, microwave oven, garden tub, some fireplaces, most floor plans have storage closets Clubhouse, playground, pool, spa, fitness center, tennis court, basketball court, sand volleyball. 1 carport per unit, adequate uncovered. Garages are $90 to $110 additional (depending on garage size). No Gas, electricity, water and sewer Trash On-site manager

64 RENTAL RATES Bedrooms Baths Unit Size Rental Rates Rent Per Square Foot Low High Low High $715 - $ $755 - $ ,085 $825 - $ ,092 $855 - $ ,221 $905 - $ ,310 $950 - $ Concessions $200 off first month s rent on three-bedroom units if moved in before March 15, Rent Premiums Occupancy Remarks $35 to $45 for storage units. $90 to $110 for garages. No floor level or view premiums. 97% (9 vacant) B+ quality project located in the southeastern portion of Weber County. Large units; however, the rental brochure overstates unit sizes significantly. Tenants are billed a flat fee of $36 to $44 for water and sewer. The largest one and two bedroom units do not have storage closets. The largest one and two-bedroom unit floor plans have fireplaces. 61

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67 64 RENTAL 4 Improvements Orchard Cove 1801 West 4650 South, Roy Proximity to Subject: 9.6 miles southwest Number of Units: 312 Type of Construction: Age/Condition: Heating: Cooling: Unit Amenities: Project Amenities: Parking: Average quality 2 to 3-story wood frame and brick 17 years, good Gas-forced air Central AC Dishwasher, laundry hookups, patios or balconies, some storage closets Playgrounds, pool, spa, fitness center, tennis and basketball courts, laundry, picnic area 1 carport per unit, adequate uncovered. Parking Charge: Garages available for $75. Furnished: Tenant Utilities: Landlord Utilities: Confirmation: No All None Brittany, manager

68 RENTAL RATES Bedrooms Baths Unit Size Rental Rates Rent Per Square Foot Low High Low High $685 - $ ,012 $759 - $ ,064 $779 - $ ,352 $879 - $ ,525 $1,029 - $ ,489 $1,039 - $ Rent Premiums No floor level or view premiums. Concessions None. Occupancy Remarks 99% (3 vacant) This project offers large units. The two largest three-bedroom unit types are townhouses. All but the two largest units have storage closets. In addition to the rental rates above, tenants pay for water, sewer and trash as follows: One-bedroom units: $24 Two-bedroom units: $27 Three-bedroom stacked flat units: $30 Three-bedroom townhouses: $35. 65

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71 68 RENTAL 5 Improvements Eastgate at Greyhawk 2925 North Church Street, Layton Proximity to Subject: 16 miles south Number of Units: 108 Type of Construction: Average quality stone & hardboard siding Age/Condition: 3 years, good Heating: Gas-forced air Cooling: Central A.C. Unit Amenities: Dishwasher, washer/dryer, patios or balconies, 9-foot ceilings, storage closets, granite countertops, microwave Project Amenities: Fitness center, clubhouse, outdoor pool, hot tub, basketball court, walking path, playground Parking: $10 mandatory carport charge, adequate uncovered Furnished: No Tenant Utilities: All Landlord Utilities: None Confirmation: Stephanie, manager

72 RENTAL RATES Bedrooms Baths Unit Size Rental Rates Rent Per Square Foot Low High Low High $795 $825 $1.04 $ ,034 $965 $995 $0.93 $ ,152 $1,075 $1,095 $0.93 $0.95 Concessions $950 for two-bedroom units. $1,050 for three-bedroom units. Occupancy 96% (4 vacant) Rent Premiums Second floor units are the base rent. Third floor units rent for a $15 premium, first floor units rent for a $30 premium. Remarks This is a new B+ quality project in the northeastern portion of Layton, just east of Hill Air Force Base. Tenants are required to purchase a $100 telecommunications package from the landlord (telephone, cable TV and internet). 69

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75 72 RENTAL 6 Colonial Court 2155 Grant Avenue, Ogden Proximity to Subject: 4.5 miles southwest Improvements Number of Units: 221 Type of Construction: Good quality stone & stucco, elevator Age/Condition: 12 years, good (2003) Heating: Gas forced air Cooling: Central AC Unit Amenities: Dishwashers, w/d included (except in studios), walk-in closets. Soaking tub in 2-bedroom units. Project Amenities: Clubhouse, fitness center, extra storage, gated entry, computer resource center, underground parking. Parking: Garage and/or covered parking Parking Charges: $15 for covered. $30 for underground garage. Tenant Utilities: Gas & electricity Landlord Utilities: Water, sewer & trash Confirmation: Manager

76 RENTAL RATES Bedrooms Baths Unit Size Rental Rates Rent Per Square Foot Low High Low High $445 $525 $1.10 $ $635 $710 $0.94 $ ,059 $845 $1,000 $0.80 $0.94 Concessions None Rent Premiums Occupancy Rents vary based on floor and view. 100% Remarks 73 This is a modern project located immediately west of the LDS Temple in Ogden. These units do not have balconies or patios. There is no swimming pool.

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79 76 RENTAL 7 Colonial Court II st Street, Ogden Proximity to Subject: 4.2 miles southwest Improvements Number of Units: 73 Type of Construction: Good quality stone & stucco, elevator Age/Condition: 4 years, good Heating: Gas forced air Cooling: Central AC Unit Amenities: Dishwashers, w/d included, walk-in closets Project Amenities: Elevator, wireless internet, social room, fitness center, secured entry. Parking: Underground garage parking Parking Charges: $30 per month for underground parking. No charge for uncovered parking. Tenant Utilities: Gas & electricity Landlord Utilities: Water, sewer & trash Confirmation: Manager

80 RENTAL RATES Bedrooms Baths Unit Size Rental Rates Rent Per Square Foot Low High Low High $690 $780 $1.00 $ Den $755 $805 $0.83 $ $810 $850 $0.96 $ $830 $1,010 $0.80 $ Den 2 1,270 $1,175 $1,210 $0.93 $0.95 Concessions None Rent Premiums 77 Occupancy Rents vary based on floor and view. 100% Remarks This is a modern project located immediately west of the LDS Temple in Ogden. These units do not have balconies or patios. There is no swimming pool.

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83 80 RENTAL 8 Liberty Junction 2353 Junction Way, Ogden Proximity to Subject: 5 miles south Improvements Number of Units: 93 Type of Construction: Good quality stone & stucco, some elevator Age/Condition: 7 years good Heating: Gas-forced air Cooling: Central A.C. Unit Amenities: Dishwasher, microwave oven, washer/dryers, patios or balconies, 9-foot ceilings Project Amenities: Clubhouse, fitness center, business center, Parking: See remarks Furnished: No Tenant Utilities: All Confirmation: Peggy Stone, manager

84 RENTAL RATES Bedrooms Baths Unit Size Rental Rates Rent Per Square Foot Low High Low High $675 - $ $725 - $ $875 - $ $925 - $ ,033 $930 - $ ,119 $960 - $ Concessions None. Occupancy 98% (2 vacant) Rent Premiums Remarks No floor or view premiums. This is a mixed-income project that is located near the Ogden Temple and new development. 67 of the 93 units are rent-restricted under the LIHTC program. The other 26 units are market rental rates. (rental rates above). The stacked units are located in mid-rise, elevator services buildings. The units with 2.5 bathrooms are townhouses, constructed in two-story buildings. Some units reserved covered parking and rent for a premium. Remaining units have reserved uncovered parking, but have access to the parking garage. According to the manager, there is adequate covered parking for tenants that do not have a reserved covered stall. This project has some studio units. However, they are all rent-restricted. 81

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87 84 No Name SUMMARY OF COMPARABLE 1 BEDROOM UNITS No. of Units BR BA Unit Size Rent/ Month Rent/ Sq.Ft. Occupancy 1 Settlers Landing $749 $ % 2 Pinebrook $660 $690 $700 $0.87 $0.89 $ % 3 Falls at Canyon Rim $715 $755 $0.86 $ % 4 Orchard Cove $685 $ % 5 Eastgate at Greyhawk $795 $ % 6 Colonial Court I $635 $ % 7 Colonial Court II $690 $ % 8 Liberty Junction $675 $725 $1.31 $ %

88 85 No Name SUMMARY OF COMPARABLE 2 BEDROOM UNITS No. of Units BR BA Unit Size Rent/ Month Rent/ Sq.Ft. Occupancy 1 Settlers Landing $849 $ % 2 Pinebrook Falls at Canyon Rim Eastgate at Greyhawk ,075 1,172 1,088 1,135 1,085 1,092 1,221 $760 $770 $780 $770 $800 $825 $855 $905 $0.77 $0.72 $0.67 $0.71 $0.70 $0.76 $0.78 $ % 97% ,034 $965 $ % 5 Woodland Cove ,117 $775 $ % 6 Colonial Court I ,059 $845 $ % 7 Colonial Court II ,037 $810 $830 $0.96 $ % 8 Liberty Junction ,033 1,119 $875 $925 $930 $960 $0.98 $0.93 $0.90 $ %

89 COMPARABLE ONE- AND TWO-BEDROOM RENTALS MAP 86 COMPARABLE RENTALS MAP

90 87 ANALYSIS OF ONE-BEDROOM RENT COMPARABLES Features Offered At Competing Projects The features offered by the competing projects are summarized in the table below. FEATURES OFFERED AT COMPETING PROJECTS Feature Settlers Landing Pinebrook Falls at Canyon Rim Orchard Cove Eastgate at Greyhawk Colonial Court I Colonial Court II Liberty Junction Elevator X X X Indoor Pool Outdoor Pool X X X X X Hot Tub X X X X X Social Rooms X X X X X X X X Fitness Center X X X X X X X X Business Center X - X Theatre Garage Parking Avail X X X X X X X X Patio or Balcony X X X X X - - X Washer/Dryer Included X X X X X Hookups Only - X X X X Dishwasher X X X X X X X X Microwave Oven X - X - X - - X Soaking Tub P - - Granite Countertops X X Foot Ceilings X X X X X X X X Fireplaces Available - - X - X View Amenity Wtr, Swr, Trash Paid X X - Cable TV, Internet Paid Mandatory Telecom Fee X X - - -

91 88 Strengths and Weaknesses at Competing Projects The strengths and weaknesses of competing projects are summarized as follows: Strengths and Weaknesses of Competing Projects Project Name Strengths Weaknesses Good quality interior finishes Project is now 7 years old Settlers Landing Good recreational amenities Little traffic exposure Washer / dryer included Good recreational amenities Project is now 14 to 16 years Good traffic exposure old Pinebrook Laundry hookups Dated interior finishes Spacious units Falls at Canyon Rim Good recreational amenities Laundry hookups Spacious units Project is now 13 years old Dated interior finishes Little traffic exposure Orchard Cove Good recreational amenities Spacious units Laundry hookups Project is now 17 years old Dated interior finishes Little traffic exposure Eastgate at Greyhawk Colonial Court I Colonial Court II Liberty Junction Good recreational amenities Good location. Washer / Dryer included Good quality interior finishes Good location Elevator serviced Washer / Dryer included Controlled access entry Underground parking Water, sewer, trash included Good location Elevator serviced Washer / dryer included Controlled access entry Underground parking Water, sewer, trash included Washer / dryer included Balcony or patio Good location in The Junction None Project is now 12 years old No swimming pool or spa No swimming pool or spa Most units are rent-restricted under the LIHTC program.

92 89 Most Desirable Features in Competing Apartments The most important Unit Amenities in competing apartment projects are: Natural light Nine-foot ceilings (possible vaulted ceilings on upper level) Functional and efficient floor plans Upgraded cabinets with granite or other solid-surface countertops Upgraded flooring (carpet, tile, hardwood, stained concrete) Balcony or patio Walk-in closets Storage available Kitchen open to living area in a "great room" configuration Four-burner, self-cleaning electric range / oven Microwave oven Dishwasher Frost-free refrigerator with ice-maker Washer/dryer included in each unit Wiring for cable television and high-speed internet The most important Project Amenities in competing apartment project are: Clubhouse with social room and big-screen television Fitness center with kid's play area adjacent Outdoor heated swimming pool. Hot tub Fire pit Barbecue and picnic areas One carport stall per unit. Ample additional uncovered parking. Garages available for separate rental Sports court Tot lot

93 90 The most important Community Amenities in competing projects are: Proximity to public transportation Proximity to major transportation arteries Proximity to employment centers Proximity to retail, restaurants and entertainment Proximity to services Special note should be made that internet speed is a major factor in attracting and retaining tenants.

94 91 SURVEY OF COMPETITIVE TOWNHOUSE RENTALS A survey of competitive properties was completed. The survey concentrated on modern townhouse projects in Weber County, and also included some individually owned townhouse units. In the rental survey, the gross unit areas are presented for the subject and the comparables. This includes measurement from the center of party walls to the outside of exterior walls. Balconies and storage closets are not included. Details on the comparable rentals are found on the following pages.

95 92 TOWNHOUSE RENTAL 1 Station at Pleasant View 1148 West Spring Valley Lane, Pleasant View Proximity to Subject: 3.4 miles northwest Improvements Number of Units: 144 Type of Construction: Age/Condition: Heating: Cooling: Unit Amenities: Project Amenities: Parking: Parking Charges: Furnished: Tenant Utilities: Landlord Utilities: Confirmation: Good quality townhouses New to 1 year Gas-forced air Central A.C. Dishwasher, washer/dryer hookups, patios, granite countertops, walk-in closets. Clubhouse, fitness center playground, sports court. 1 to 2 garage stalls per unit. Adequate uncovered. None No Gas, electricity and water Sewer and trash Manager

96 93 RENTAL RATES Rental Rates Bedrooms Baths Unit Size Low High Rent Per Square Foot Low High ,148 $850 - $ ,383 $1,000 - $ Units listed above are rented at market rates. The remaining units are restricted under the Low-Income Housing Tax Credit (LIHTC) program. Units with a one-car garage Units with a two-car garage Rent Premiums None Concessions None. Occupancy Remarks 100% leased. The last building will be occupied within the next 10 days. Only 16 units are rented at unrestricted market rents (listed above). The remainder are rent-restricted under the LIHTC program at between 25% and 50% of AMI. This project also includes some four-bedroom townhouse units. However, none of those units are rented at market rates.

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99 96 TOWNHOUSE RENTAL 2 Improvements Mountain View Townhomes 775 West Harrisville Road, Harrisville Proximity to Subject: 2.9 miles southeast Number of Units: 145 Type of Construction: Age/Condition: Heating: Cooling: Unit Amenities: Project Amenities: Parking: Furnished: Tenant Utilities: Landlord Utilities: Confirmation: One-story (one-bedroom units) Two-story (two- and three-bedroom units) New Gas forced air Central AC Granite countertops, upgraded flooring, washer/dryer hookups, patio Walking trails, playgrounds, volleyball court, swimming pool, clubhouse, fitness center One- or two-car garage per unit. No Electricity, gas Water, sewer, trash Manager

100 RENTAL RATES Rental Rates Low High Bedrooms Baths Unit Size Rent Per Square Foot Low High $775 - $ ,312 $1,175 - $ ,379 $1,245 - $ Units with a one-car garage Units with a two-car garage Occupancy Lease-up Concessions None Rent Premiums None Remarks Modern townhouse project under construction in Harrisville. This project just began pre-leasing at the first of March Tenants are charged a mandatory telecommunications fee of $95 per month. 97

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103 100 TOWNHOUSE RENTAL 3 Improvements Cove at Pleasant View 255 West 2700 North, Pleasant View Number of Units: 82 Type of Construction: Age/Condition: Heating: Cooling: Unit Amenities: Project Amenities: Parking: Parking Charge: Furnished: Tenant Utilities: Landlord Utilities: Confirmation: Proximity to Subject: 1.8 mile northwest Good quality 2 story stucco townhouses New Gas-forced air Central AC Dishwasher, washer/dryer hookups, granite counter tops, microwave, 9-foot ceilings Pool, clubhouse, fitness center, playground Direct access 2-car garage None No All None Jackalyn - Manager

104 101 RENTAL RATES Rental Rates Bedrooms Baths Unit Size Low High Rent Per Square Foot Low High ,589 $1,175 $1,215 $0.74 $0.76 Units with a one-car garage Units with a two-car garage Rent Premiums None Concessions None Occupancy Remarks Lease-up. 15 units are occupied and another 14 units have been pre-leased. Modern townhouse project located near the subject. The project is expected to be completed in about one year.

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107 104 TOWNHOUSE RENTAL West 2700 North, Pleasant View Proximity to Subject: 1.8 miles northwest Improvements Number of Units: Type of Construction: Age/Condition: Heating: Cooling: Unit Amenities: Project Amenities: Parking: Furnished: Tenant Utilities: Landlord Utilities: Confirmation: 1 (individually owned unit) Good quality, 2-story townhouse 3 years, good Gas forced air Central AC Dishwasher, microwave, washer/dryer hookups, patio, fireplace, vaulted ceilings, granite countertops Clubhouse, pool, playground Two-car detached garage. No Electricity, gas Water, sewer, trash Belden Real Estate Management

108 RENTAL RATES Rental Rates Bedrooms Baths Unit Size Low High Rent Per Square Foot Low High ,590 $1,100 - $ Units with a one-car garage Units with a two-car garage 105 Rent Premiums None Concessions None Occupancy n/a (individually owned unit) Remarks Modern townhouse unit located near the subject.

109 106 TOWNHOUSE RENTAL 5 Improvements Number of Units: Type of Construction: Age/Condition: Heating: Cooling: Unit Amenities: Project Amenities: Parking: Parking Charge: Furnished: Tenant Utilities: Landlord Utilities: Confirmation: 1132 Red Rock Drive, Ogden Proximity to Subject: 3.9 miles southeast 1 (individually owned unit) Good quality 2 story stone and hardboard siding 6 years, good Gas-forced air Central AC Dishwasher, microwave, washer/dryer hookups, patio, granite countertops None 2-car, direct access garage None No All None Owner

110 107 RENTAL RATES Rental Rates Bedrooms Baths Unit Size Low High Rent Per Square Foot Low High ,600 $1,100 - $ Units with a one-car garage Units with a two-car garage Rent Premiums None Concessions None Occupancy Remarks n/a (individually owned unit) Individually owned townhouse unit located in Ogden. Interior finishes are good quality. There are no project amenities.

111 108 TOWNHOUSE RENTAL West 1940 North, Harrisville Proximity to Subject: 1.3 miles northwest Improvements Number of Units: 1 (individually owned unit) Type of Construction: Good quality 2 story stone and hardboard siding Age/Condition: New Heating: Gas-forced air Cooling: Central AC Unit Amenities: Dishwasher, microwave, washer/dryer hookups, patio Project Amenities: None Parking: 1-car direct access garage Parking Charge: None Furnished: No Tenant Utilities: Gas, electricity Landlord Utilities: Water, sewer, trash Confirmation: Owner

112 109 RENTAL RATES Rental Rates Bedrooms Baths Unit Size Low High Rent Per Square Foot Low High ,400 $1,100 - $ Units with a one-car garage Units with a two-car garage Rent Premiums None Concessions None Occupancy Remarks n/a (individually owned unit) Individually owned townhouse unit. HOA fee paid by landlord. This includes water, sewer, and trash collection.

113 110 TOWNHOUSE RENTAL East 760 North, Ogden Proximity to Subject: 1.8 miles southeast Improvements Number of Units: 1 (individually owned unit) Type of Construction: Average quality 2 story vinyl siding Age/Condition: 15 years, good Heating: Gas-forced air Cooling: Central AC Unit Amenities: Dishwasher, microwave, washer/dryer hookups, patio Project Amenities: Playground, BBQ areas, basketball court Parking: 1-car detached garage Parking Charge: None Furnished: No Tenant Utilities: Gas, electricity Landlord Utilities: Water, sewer, trash Confirmation: West Property Management

114 111 RENTAL RATES Rental Rates Bedrooms Baths Unit Size Low High Rent Per Square Foot Low High 2 2 1,350 $900 - $ Units with a one-car garage Units with a two-car garage Rent Premiums None Concessions None Occupancy Remarks n/a (individually owned unit) Individually owned townhouse unit. HOA fee paid by landlord. This includes water, sewer, and trash collection. Interior finishes are dated and there are no community amenities.

115 112 TOWNHOUSE RENTAL North 400 East, North Ogden Proximity to Subject: 1.1 miles northwest Improvements Number of Units: 1 (individually owned unit) Type of Construction: Average quality 2 story stucco Age/Condition: 14 years, good Heating: Gas-forced air Cooling: Central AC Unit Amenities: Dishwasher, microwave, washer/dryer, patio Project Amenities: None Parking: 1-car detached garage Parking Charge: None Furnished: No Tenant Utilities: Gas, electricity Landlord Utilities: Water, sewer, trash Confirmation: Owner

116 113 RENTAL RATES Rental Rates Bedrooms Baths Unit Size Low High Rent Per Square Foot Low High ,190 $875 - $ Units with a one-car garage Units with a two-car garage Rent Premiums None Concessions None Occupancy Remarks n/a (individually owned unit) Individually owned townhouse unit. Interior finishes are dated and there are no community amenities.

117 114 TOWNHOUSE RENTAL Charleston Avenue, Harrisville Proximity to Subject: 1.8 miles northwest Improvements Number of Units: 1 (individually owned unit) Type of Construction: Average quality 2 story stucco and brick Age/Condition: 7 years, good Heating: Gas-forced air Cooling: Central AC Unit Amenities: Dishwasher, microwave, washer/dryer hookups, patio Project Amenities: None Parking: 1-car attached garage Parking Charge: None Furnished: No Tenant Utilities: Gas, electricity Landlord Utilities: Water, sewer, trash Confirmation: Owner

118 115 RENTAL RATES Rental Rates Bedrooms Baths Unit Size Low High Rent Per Square Foot Low High ,242 $900 - $ Units with a one-car garage Units with a two-car garage Rent Premiums None Concessions None Occupancy Remarks n/a (individually owned unit) Individually owned townhouse unit. Interior finishes are average in quality. There are no community amenities.

119 116 No Name Station at Pleasant View Mountain View Townhomes 864 East 760 North 2421 North 400 East SUMMARY OF COMPARABLE 2 BEDROOM TOWNHOUSE UNITS No. of Units BR BA Unit Size Rent/ Month Rent/ Sq.Ft. Occupancy ,148 $850 $ % ,312 $1,175 $0.90 Lse-up n/a 2 2 1,350 $900 $0.67 n/a n/a ,190 $875 $0.74 n/a Charleston Avenue Conceded Rents Units with a one-car garage Units with a two-car garage n/a ,242 $900 $0.72 n/a

120 117 No Name Station at Pleasant View Mountain View Townhomes Cove at Pleasant View SUMMARY OF COMPARABLE 3 BEDROOM TOWNHOUSE UNITS No. of Units BR BA Unit Size Rent/ Month Rent/ Sq.Ft. Occupancy ,383 $1,000 $ % ,379 $1,245 $0.90 Lse-up ,589 $1,175 $0.74 Lse-up West 2700 North 1132 Red Rock Drive n/a ,590 $1,100 $0.69 n/a n/a ,600 $1,100 $0.69 n/a West 1940 North Conceded Rents Units with a one-car garage Units with a two-car garage n/a ,400 $1,100 $0.79 n/a

121 118 COMPARABLE TOWNHOUSE RENTALS MAP COMPARABLE RENTALS MAP

122 119 ANALYSIS OF TOWNHOUSE COMPARABLES Features Offered At Competing Projects The features offered by the competing projects are summarized in the table below. FEATURES OFFERED AT COMPETING PROJECTS Feature STATION AT PLEASANT VIEW MOUNTAIN VIEW COVE AT PLEASANT VIEW 255 WEST 2700 NORTH 1132 RED ROCK DR 286 WEST 1940 NORTH 864 EAST 760 NORTH 2421 NORTH 400 EAST 2398 CHARLESTON AVENUE Townhouse Style X X X X X X X X X Indoor Pool Outdoor Pool - X X Hot Tub - X X Social Rooms X X X Fitness Center X X X Business Center Theatre Car Garage Per Unit X X X X X X 2 Car Garage Per Unit X X X X X Patio or Balcony X X - X X X X X X Washer/Dryer Included X - Hookups Only X X X X X X X - X Dishwasher X X X X X X X X X Microwave Oven X X X X X X X X X Soaking Tub Granite Countertops X X X X X Foot Ceilings X X X X X X X X X Fireplaces Available X View Amenity Wtr, Swr, Trash Paid X X - X - X X X X Cable TV, Internet Paid Mandatory Telecom Fee - X X

123 120 Strengths and Weaknesses at Competing Projects The strengths and weaknesses of competing projects are summarized as follows: Strengths and Weaknesses of Competing Projects Project Name Strengths Weaknesses Station at Pleasant View Mountain View Townhomes New project Good quality interior finishes Good recreational amenities Attached 1 to 2-car garages Modern townhouse project 2-car attached garages Good community amenities Good quality interior finishes Water, sewer, trash paid Mixed income LIHTC / Market project Laundry hookups only Limited traffic exposure Laundry hookups only Cove at Pleasant View 255 West 2700 North 1132 Red Rock Drive 286 West 1940 North 864 East 760 North 2421 North 400 East 2398 Charleston Avenue New, modern project Good quality interior finishes Good recreational amenities Spacious units Attached 2-car garages New, modern unit Good quality interior finishes Spacious unit Good community amenities Detached 2-car garage Water, sewer, trash paid Modern townhouse unit Granite countertops 2-car attached garage Water, sewer, trash paid New, modern townhouse unit Water, sewer, trash paid 1-car garage Water, sewer, trash paid 1-car garage Washer / dryer included Water, sewer, trash paid 1-car garage Water, sewer, trash paid Project only offers 3-bedroom units Laundry hookups only Individually owned townhouse unit 2-car garage is not attached Laundry hookups only No recreational amenities Unit is 6 years old Laundry hookups only 1-car attached garage No recreational amenities Laundry hookups only Average quality finishes Unit is 15 years old Limited recreational amenities Laundry hookups only Average quality finishes Unit is 14 years old No recreational amenities Average quality finishes Unit is 7 years old No recreational amenities Laundry hookups only

124 121 Most Desirable Features in Competing Townhouse Apartments The most important Unit Amenities in competing apartment projects are: Natural light Nine-foot ceilings (possible vaulted ceilings on upper level) Functional and efficient floor plans Upgraded cabinets with granite or other solid-surface countertops Upgraded flooring (carpet, tile, hardwood, stained concrete) Private patio Walk-in closets Two-car garage Kitchen open to living area in a "great room" configuration Four-burner, self-cleaning electric range / oven Microwave oven Dishwasher Frost-free refrigerator with ice-maker Washer/dryer included Wiring for cable television and high-speed internet The most important Project Amenities in competing apartment project are: Clubhouse with social room and big-screen television Fitness center with kid's play area adjacent Outdoor heated swimming pool. Hot tub Fire pit Barbecue and picnic areas Sports court Tot lot The most important Community Amenities in competing projects are: Proximity to public transportation Proximity to major transportation arteries Proximity to employment centers Proximity to retail, restaurants and entertainment Proximity to services Special note should be made that internet speed is a major factor in attracting and retaining tenants.

125 122 Optimal Site Development Characteristics The densities achieved in similar developments are as follows: DEVELOPMENT DENSITIES FOR SIMILAR RECENT PROJECTS Project Land Area Number of Units Density Per Acre Settlers Landing West Haven, Utah Pinebrook Ogden, Utah Falls at Canyon Rim South Ogden, Utah Orchard Cove Roy, Utah Woodland Cove Washington Terrace, Utah Station at Pleasant View Pleasant View, Utah Cove at Pleasant View Pleasant View, Utah Mountain View Townhomes Harrisville, Utah Colonial Court II Ogden, Utah Comparable properties in the area have been developed at between 10 and 29 units per acre. Projects that are primarily townhouses (Station at Pleasant View, Cove at Pleasant View, and Mountain View) have been developed at lower densities. Two projects (Settlers Landing and Orchard Cove) contain a mix of stacked units and townhouses. Those projects were developed at a density of 20 units per acre. Colonial Court II is located in an urban area of downtown Ogden and has been developed at a higher density. Considering the large number of units planned for the site, as well as the number of units currently under construction and planned in the area, it is recommended that the site be developed in phases at a density of about 20 units per acre. In order to decrease the lease-up period, it is recommended that the first phase include a total of 181 units, which should utilize about nine acres of the site.

126 123 Optimal Unit Size The sizes of competing units are summarized in the table below: Project Name UNIT SIZES AT COMPETING PROJECTS 1 Bedroom 2 Bedroom 2 Bedroom Stacked Stacked Townhouse 3 Bedroom Townhouse Settlers Landing ,280 Pinebrook Falls at Canyon Rim Orchard Cove ,075 1,172 1,088 1,085 1,092 1,221 1,012 1, ,489 Eastgate at Greyhawk 768 1, Colonial Court 675 1, Colonial Court II Liberty Junction ,033 1,119 Station at Pleasant View - - 1,148 1,383 Mountain View - - 1,312 1,379 Cove at Pleasant View , West 2700 North , Red Rock Drive , West 1940 North , East 760 North - - 1, North 400 East - - 1, Charleston Avenue - - 1,242 - Smallest ,033 1,379 Largest 900 1,221 1,350 1,600 Average 751 1,040 1,199 1,490 -

127 The developer intends to include some one-bedroom micro units at about 550 square feet. This is smaller than average for market. However, with the development of the adjacent planned assisted-care facility and the commercial development, there may be demand for a limited number of these small one-bedroom units. Stacked one-bedroom units at competing projects range in size from 517 to 900 square feet in size, with an average of 751 square feet. The smallest units are located in more urban projects (Liberty Junction, Colonial Court and Colonial Court II). There are no known, modern one-bedroom units in North Ogden. The optimal size for the subject s one-bedroom units would be near the middle end of the range of comparable at 775 square feet. Stacked two-bedroom units at competing projects range in size from 846 to 1,221 square feet in size, with an average of 1,040 square feet. Most of the competitive projects fall within a fairly tight range of units sizes from about 980 to 1,125 square feet. Therefore, the optimal unit size for the subject s two-bedroom units would be 1,050 square feet. Two-bedroom townhouses in the area range in size from 1,033 to 1,350 square feet in size, with an average of 1,199 square feet. Based on the competitive projects, the optimal unit size for the subject would be 1,250 square feet. Three-bedroom townhouses in the area range in size from 1,379 to 1,600 square feet in size, with an average of 1,490 square feet. Based on the competitive projects, the optimal unit size for the subject would be 1,400 square feet. The optimal unit sizes are summarized in the table below: 124 OPTIMAL UNIT SIZES Unit Type Optimal Unit Size (Sq.Ft.) Small One-Bedroom 550 Large One-Bedroom 775 Two-Bedroom 1,050 Two-Bedroom Townhouse 1,250 Three-Bedroom Townhouse 1,400

128 125 Optimal Unit Mix Unit Mix at Competing Apartment Projects The unit mix of the competing projects is summarized as follows: UNIT MIX AT SELECTED APARTMENT PROJECTS Project 1 Bedroom 2 Bedroom 3 Bedroom Total Settlers Landing 72 (26%) Pinebrook 96 (33%) Falls at Canyon Rim 96 (33%) Station at Pleasant View 0 (0%) Cove at Pleasant View 0 (0%) Total 264 (24%) 144 (52%) 150 (52%) 144 (50%) 56 (39%) 0 (0%) 494 (46%) 60 (22%) 42 (15%) 48 (17%) 70 (49%) 82 (100%) 302 (28%) ,078 SUMMARY OF UNIT MIX FOR SURVEYED PROJECTS Unit Type Number Percentage One-Bedroom % Two-Bedroom % Three-Bedroom % Competing projects have about 24% one-bedroom units; 46% two-bedroom units; and 28% three-bedroom units. However, these percentages are somewhat skewed due to the fact that some projects do not include one-bedroom or two-bedroom units. According to the US Census Bureau, about 19% of all renters in the Ogden CCD occupy a one-bedroom unit; about 42% occupy a two-bedroom unit; and about 24% occupy a three-bedroom unit. However, it is evident that the northern Weber County market is under-served with one-bedroom units, as about 57% of all renter households consist of one or two persons.

129 126 There are few modern one-bedroom rental units in the immediate area. The two newest projects in the area (Station at Pleasant View and Cove at Pleasant View) do not have any one-bedroom units. One other project is known to be in the planning stages in North Ogden that will include one-bedroom units. Optimal Unit Mix For The Subject The proposed unit mix is as follows: Unit Type OPTIMAL UNIT MIX Number of Units Percentage of Total Units Proposed Unit Size Small 1 Bedroom 24 13% 550 Square Feet Standard 1 Bedroom 36 20% 775 Square Feet 2 Bedroom 60 33% 1,050 Square Feet 2 Bedroom Townhouse 21 12% 1,250 Square Feet 3 Bedroom Townhouse 40 22% 1,400 Square Feet Totals / Averages % 1,030 Square Feet Note: All unit sizes are gross area, calculated as outside of exterior wall to center of party wall. Balconies, patios and unheated storage closets are not included in the gross area.

130 127 Suggested Quality & Finishes The following features are suggested for the proposed project. Suggested unit amenities are: Maximize natural light Nine-foot ceilings (possible vaulted ceilings on upper level) Spacious, functional and efficient floor plans Balcony or patio for all units Walk-in closets in the master bedroom Storage closet Kitchen open to living area in a great room configuration Hardwood veneer cabinets with granite countertops Self-cleaning oven Microwave oven Dishwasher Washer/dryer included in the unit Fireplaces and/or vaulted ceilings in some units. Wiring for cable television and high-speed internet Suggested project amenities are: Clubhouse with social room and big-screen television Fitness center Outdoor heated swimming pool with large sun-deck area. Hot tub Barbecue and picnic areas Covered parking Adequate landscaped areas Tot lots / playgrounds Dog park Walking / biking trails

131 128 Effect of Rental Concessions Three of the competing rentals are currently offering rental concessions. Concessions are summarized as follows: VALUE OF CONCESSIONS AT COMPETING PROJECTS Project Name Settlers Landing Falls at Canyon Rim Eastgate at Greyhawk Dollar Value of Concessions $125 off first month s rent Value of $10 per month over term of lease. $200 off 1 st month s rent on three-bedroom units Value of $17 per month over term of the lease. $950 special for 2-bedroom units Value of $15 per month over the term of the lease. The value of these concessions has been considered in determining market rent for the subject s units.

132 129 Market Rental Rates Assuming "Class B+" Quality Apartment Characteristics Project Name Unit Size ONE BEDROOM UNITS (550 SQUARE FEET) Base Conceded Rent Base Conceded Rent Per Sq.Ft. Comments / Conclusions Settlers Landing 720 $739* $1.03 Pinebrook 755 $660 $0.87 Falls at Canyon Rim Orchard Cove Eastgate at Greyhawk Colonial Court Colonial Court II 775 $715 $ $685 $ $795 $ $635 $ $690 $1.00 Base "conceded" rates range from $635 to $739 per month. The range of conceded rents per square foot is $0.77 to $1.04. Assuming good-quality construction characteristics for the subject, with a unit size of 550 square feet, a market rental rate of $600 or $1.09 per square foot is reasonable. It is assumed that a carport and a washer and dryer will be included in the base rental rate of each apartment. Liberty Junction 517 $675 $1.31 *Conceded Rents

133 130 Project Name Unit Size ONE BEDROOM UNITS (775 SQUARE FEET) Base Conceded Rent Base Conceded Rent Per Sq.Ft. Comments / Conclusions Settlers Landing 720 $739* $1.03 Pinebrook 900 $700 $0.78 Falls at Canyon Rim Orchard Cove Eastgate at Greyhawk Colonial Court Colonial Court II 832 $715 $ $685 $ $795 $ $635 $ $690 $1.00 Base "conceded" rates range from $635 to $739 per month. The range of conceded rents per square foot is $0.77 to $1.04. Assuming good-quality construction characteristics for the subject, with a unit size of 775 square feet, a market rental rate of $750 or $0.97 per square foot is reasonable. It is assumed that a carport and a washer and dryer will be included in the base rental rate of each apartment. Liberty Junction 625 $725 $1.16 *Conceded Rents

134 131 TWO BEDROOM, TWO BATH UNITS (1,050 SQUARE FEET) Project Name Unit Size Base Conceded Rent Base Conceded Rent Per Sq.Ft. Comments / Conclusions Settlers Landing 980 $839* $0.86 Pinebrook 1,138 $800 $0.70 Falls at Canyon Rim Orchard Cove Eastgate at Greyhawk Colonial Court Colonial Court II 1,092 $855 $0.78 1,064 $779 $0.73 1,034 $965 $0.93 1,059 $845 $0.80 1,037 $830 $0.80 Base "conceded" rates range from $760 to $855 per month. The range of conceded rents per square foot is $0.69 to $0.86. Assuming good-quality construction characteristics for the subject, with a unit size of 1,050 square feet, a market rental rate of $925 or $0.88 per square foot is reasonable. It is assumed that a carport and a washer and dryer will be included in the base rental rate of each apartment. Liberty Junction 1,033 $930 $0.90 *Conceded Rents

135 132 TWO BEDROOM, 2.5 BATH TOWNHOUSE UNITS (1,250 SQUARE FEET) Project Name Station at Pleasant View Unit Size Base Conceded Rent Base Conceded Rent Per Sq.Ft. 1,148 $850 $0.74 Comments / Conclusions Base "conceded" rates range from $850 to $1,175 per month. Mountain View 864 East 760 North 2421 North 400 East 2398 Charleston Avenue *Conceded Rents Units with a one-car garage Units with a two-car garage 1,312 $1,175 $0.90 1,350 $900 $0.67 1,190 $875 $0.74 1,242 $900 $0.72 The range of rents per square foot is $0.67 to $0.90. Assuming good-quality construction characteristics for the subject, with a unit size of 1,250 square feet, a market rental rate of $1,100 or $0.88 per square foot is reasonable. It is assumed that a two-car garage and a washer and dryer will be included in the base rental rate of each apartment.

136 133 THREE BEDROOM, TWO BATH TOWNHOUSE UNITS (1,400 SQUARE FEET) Project Name Station at Pleasant View Mountain View Cove at Pleasant View 255 West 2700 North 1132 Red Rock Drive 286 West 1940 North Unit Size Base Conceded Rent Base Conceded Rent Per Sq.Ft. 1,383 $1,000 $0.72 1,379 $1,245 $0.90 1,589 $1,175 $0.74 1,590 $1,100 $0.69 1,600 $1,100 $0.69 1,400 $1,100 $0.79 Comments / Conclusions Base "conceded" rates range from $1,000 to $1,245 per month. The range of rents per square foot is $0.69 to $0.90. Assuming good-quality construction characteristics for the subject, with a unit size of 1,400 square feet, a market rental rate of $1,200 or $0.86 per square foot is reasonable. It is assumed that a two-car garage and a washer and dryer will be included in the base rental rate of each apartment. Conceded Rents Units with a one-car garage Units with a two-car garage

137 134 SUMMARY OF CONCLUDED RENTAL RATES Unit Type Gross Unit Size Base Market Rent Rent Per Sq.Ft. Small One Bedroom 550 $600 $1.09 Large One Bedroom 775 $750 $0.97 Two Bedroom 1,050 $900 $0.86 Two Bedroom Townhouse Three Bedroom Townhouse 1,250 $1,100 $0.88 1,400 $1,200 $0.86 Note: The projected market rental rates assume that the project is developed with the suggested design characteristics as stated in this report. It has been assumed that all units have a balcony or patio, dishwasher, microwave oven, a washer & dryer and a refrigerator. It is assumed that tenants pay their own natural gas and electricity costs and reimburse the landlord for water, sewer, trash collection expenses. These rental rates include a carport stall for the stacked units and a two car garage for the townhouse units. It has been assumed that the landlord does not pay the cost of basic telecommunications for the tenants.

138 135 Rent Premiums Rent premiums are found at some of the competing rentals. RENT PREMIUMS CHARGED AT COMPETING PROJECTS PROJECT NAME Settlers Landing Pinebrook Falls at Canyon Rim Orchard Cove Eastgate at Greyhawk Colonial Court Colonial Court II Liberty Junction VIEW, FLOOR AND GARAGE PREMIUMS No floor or view premiums. $75 for garage. No floor or view premiums. $75 for garage. No floor or view premiums. $90 to $110 for garage. No floor or view premiums. $75 for garage. $15 for ground floor $30 for upper floor. $75 to $155 for floor and view. $30 for underground parking. $35 to $180 for floor and view. $30 for underground parking. No floor or view premiums. No parking premiums. The only floor and view premiums being offered at competing rentals are for the Eastgate at Greyhawk, in Layton and the two projects (Colonial Court and Colonial Court II) that are located in downtown Ogden. Based on the information above, no floor or view premiums are projected for the subject.

139 136 POTENTIAL RENTAL INCOME AT MARKET RENTAL RATES POTENTIAL RENTAL INCOME AT MARKET RENTAL RATES Unit Type No. of Units Size/ Sq.Ft. Market Rent Rent/ Sq.Ft. Monthly Income Annual Income One Bedroom $600 $1.09 $14,400 $172,800 One Bedroom $750 $0.97 $27,000 $324,000 Two Bedroom 60 1,050 $900 $0.86 $54,000 $648,000 Two Bedroom Townhouse Three Bedroom Townhouse 21 1,250 $1,100 $0.88 $23,100 $277, ,400 $1,200 $0.86 $48,000 $576,000 Totals / Averages 181 1,030 $920 $0.89 $166,500 $1,998,000 Rent Concessions Three of the comparable rentals were offering rent concessions. The value of those concessions was considered in projecting market rental rates. Therefore, no rent concessions are projected. Rent Loss to Model Units Considering the size of the project, it has been assumed that no permanent model unit will be maintained.

140 137 Other Income Sources A survey of competitive projects was made in order to determine the level of other income being generated. All of the properties below bill tenants for their share of water, sewer and trash collection costs. In addition, most provide cable TV internet services to tenants at a mandatory monthly fee. Property Location Other Income Generated By Competing Apartment Projects (Actual Collections) Units Fees Forfeited Deposits Laundry Vending Utility Reimb. Cable & Internet Parking & Misc. Annual Total Centerville 204 $635 $0 $40 $530 $1,171 $172 $2,548 CW Heights 366 $822 $0 $21 $550 $29 $155 $1,577 West Jordan 288 $776 $1 $1 $675 $50 $226 $1,729 So. Salt Lake 100 $707 $2 $37 $289 $928 $414 $2,377 Salt Lake City 204 $747 $65 $88 $482 $0 $283 $1,665 Logan 250 $624 $284 $3 $259 $646 $75 $1,881 Clearfield 324 $537 $141 $0 $641 $0 $12 $1,331 Layton 144 $657 $0 $89 $557 $23 $184 $1,510 Low 100 $537 $0 $0 $259 $0 $12 $1,331 High 366 $822 $284 $89 $675 $1,171 $414 $2,548 Average 235 $688 $62 $35 $498 $356 $190 $1,827 Fees Based on the figures above, fees are projected at $650 per unit per year. This includes application fees, late fees, pet fees and other charges. Forfeited Deposits year. Based on the figures above, forfeited deposits are projected at $50 per unit per Laundry & Vending Each unit will include a washer and dryer. No laundry income or vending income is projected.

141 138 Utility Reimbursements Utility reimbursements are projected at 80% of water, sewer and trash collection and common area utilities. Those expenses are projected at $600 per unit per year. Therefore, utility reimbursements are estimated at $480 per unit per year. Telecommunications There is a trend toward apartment owners offering bundled cable, internet and phone service. Newer properties build in systems to accommodate these services because they can contract with third party providers to buy services on a bulk basis at lower prices and then sell the service to tenants. This results in a situation that works well for the tenant, the property owner, and the service provider. The service provider is able to enlist a large number of subscribers at one time, the tenant can receive a more favorable price and the owner is able to make a profit on the bundled services. Older properties have a difficult time bundling services because most of their tenants are already subscribers to cable, phone and internet services. As a result, older properties have less capacity to generate the same level of other income. Project Name Monthly Telecommunications Charges Settlers Landing $90 Eastgate at Greyhawk $100 Season of Layton $49 to $99* Villas on Main Street $90 Fernwood Place $95 * Fee does not include telephone The operating statements of some similar projects were reviewed. statements revealed the following telecommunications income: Those Project Name Annual Telecommunications Income Per unit Riverwalk $1,039 Pleasant Springs $1,046 Brick Stone on 33rd $ 958 Based on the figures above, telecommunications income is projected at $90 per unit per month. At 93% occupancy, telecommunications income is equal to $1,004 per unit per year.

142 139 Total Other Income Therefore, other income has been estimated in line with market norms, as follows: OTHER INCOME PROJECTION Category Per Unit Total Fees & Charges $ 650 $117,650 Forfeited Deposits $ 50 $ 9,050 Utility Reimbursement $ 480 $ 86,880 Telecommunications $1,004 $181,724 Total $2,184 $395,304 Rent Loss to Model Units Considering the size of the subject, no rent loss to a model unit is projected.

143 140 Vacancy and Credit Losses According to a January 2015 study by Equimark Properties, the average vacancy rate in Weber County was 4.7%, down from 6.9% in According to Equimark s study, rental and vacancy rates in Davis County have followed the following trend. WEBER COUNTY TREND IN RENTS AND VACANCY (YEAR-END SURVEY) YEAR RENT GROWTH VACANCY RATE % % 6.5% % 6.3% % 7.2% % 9.0% % 6.8% % 6.5% % 6.1% % 6.9% % 4.7% Over the past ten years, the average vacancy rate in Weber County has ranged from a low of 4.7% in 2014 to a high of 6.9% in The average for the past ten years is about 6.9%.

144 Several competing projects in the area were surveyed. A summary of occupancy rates is summarized in the following table: 141 VACANCY RATES IN EXISTING COMPETING APARTMENT PROJECTS Name No. of Units Units Vacant Occupancy Percentage Settlers Landing % Pinebrook % Falls at Canyon Rim % Orchard Cove % Eastgate at Greyhawk % Colonial Court % Colonial Court II % The Georgian % Station at Pleasant View % Totals 1, % There are 20 vacant units in competitive projects in the area (1.1%). This is evidence of a healthy rental market. Considering the current and historical market occupancy rates, a 7% vacancy and credit loss rate is projected.

145 142 Rent Concessions The effect of rental concessions has been considered in projecting market rental rates. No further concessions are projected. Effective Gross Income Estimate Effective gross income has been estimated as follows: Gross Scheduled Rental Income $1,998,000 Less 6% Vacancy & Credit Loss $139,860 Collected Rental Income $1,858,140 Other Income Fees $117,650 Forfeited Deposits $9,050 Utility Reimbursements $86,880 Telecommunications $181,724 Total Other Income $395,304 Effective Gross Income $2,253,444 The projected effective gross income is equal to about $1,037 per unit per month.

146 143 Projection of Operating Expenses Eight expense comparables were used to help project the expense projection for the subject. That information is found at the end of this section. Property Taxes The range of comparable property taxes is $449 to $929 per unit, with an average of $679. In order to estimate property taxes, actual property taxes of similar properties in Weber County have been considered. Property Name City County COMPARABLE TAX DATA 2014 Falls at Canyon Rim South Ogden Weber Settlers Landing West Haven Weber Tax ID Number & & 0061 Number of Units Year Built Condition Good Good Construction Quality Good Good Major Amenities Clubhouse, pool, some garages Clubhouse, pool, some garages 2014 Assessed Value $20,210,081 $17,713,494 Assessed Value Per Unit $70,174 $64,179 Assessed Value Per Square Foot $64 $69 The subject will be newer and superior in construction quality when compared with the projects listed above. Therefore, an assessed value of $80,000 per unit would be reasonable The subject is located in North Ogden. The effective tax rate for residential properties is about $ per $100 of assessed value. Assuming an assessed value of $80,000 per unit, property taxes are projected at $637 per unit. Property Insurance The range of comparable data is $68 to $201 per unit per year, with an average of $116. Considering the size and quality of the subject, a budget of $125 per unit is projected.

147 144 Utilities The utility expenses include the cost of water, sewer and trash collection for the entire project, as well as natural gas and electricity for common areas and vacant units. $984. The comparable data ranges from $551 to $1,500 per unit, with an average of The units will be individually metered for electricity and natural gas. The landlord will pay and water, sewer and trash collection costs; however, these utilities will be billed back to the tenants. Common area and vacant unit utilities are estimated at $600 per unit per year, in line with market norms. Telecommunications costs are also projected in line with market norms, at $480 per unit per year. Therefore, a budget of $1,080 per unit is reasonable for the subject. Maintenance & Turnover Costs This category includes repairs, supplies, pest control and contract services. The market data indicate maintenance costs of $361 to $581 per unit per year, with an average of $449. Considering the size of the units, a maintenance budget of $450 per unit is projected. Offsite Management The range of comparables is $285 to $491 per unit, with an average of $356. A budget of 3% of effective gross income is projected, which is equal to $374 per unit. Payroll (Onsite Management, Minor Maintenance) This category includes payroll, taxes and benefits. It includes salaries for onsite management and maintenance personnel, as well as free rent (if any). The range of comparable data is $956 to $1,176, with an average of $1,054. Payroll expenses have been estimated in line with market norms at $1,075 per unit.

148 145 Advertising and Promotion The range of comparables was $42 to $270, with an average of $174. A budget of $175 per unit is projected. Administrative and Miscellaneous The range of comparables was $87 to $381, with an average of $172. A budget of $175 per unit is projected. Conclusion / Comparison With Comparable Expense Data The total expense projection for the subject, before replacement reserves, is $4,091 per unit per year, or $3.79 per square foot. Considering that the landlord will have a master contract for cable TV and internet services, and considering the size of the project, the projected expenses are reasonable. A comparison of the subject and the expense comparables follows:

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