CEDAR VILLAGE. 65-Unit Multi-Family Investment 8805 N Colton Street, Spokane, Washington SPOKANE MULTI-FAMILY INVESTMENT OFFERING

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1 65-Unit Multi-Family Investment 8805 N Colton Street, Spokane, Washington SPOKANE MULTI-FAMILY INVESTMENT OFFERING 136 NE 28 th Avenue Portland, Oregon Office Fax

2 Subject Property Exterior Photos

3 Leasing Office & Manager s Apartment

4 Typical Apartment Interior Photos

5 Hill n Dale Neighborhood Photos Whitworth University Holmberg Conservation Park Deaconess Hospital Lowe s Home Depot Walmart

6 Property Overview Garden Courtyard Property with Strong Curb Appeal Quiet Residential Hill n Dale Neighborhood near Major Retailers Significantly Upgraded Cash Flow Asset in Strengthening Market All New Energy-Efficient Vinyl Windows & Patio Door Sliders Interior Renovations to Approx. 75% of Units Rents Increased 25% Past 2 Years & Solid Near Term Rent Upside All New Exterior Paint to 4 Buildings & Leasing Office Seasonal Outdoor Pool Recently Appraised at $3.5M F Description: The 65-Unit Cedar Village Apartments is comprised four multi-family structures, two of which are two-story and two of which are three-story structures. There is also a fifth structure used as a Manager s leasing office on the upper floor, and as common area laundry service on the lower level. Situated directly in front of the Manager s office is a seasonal outdoor pool. Construction: The buildings are wood frame with reinforced concrete slab foundations. The interiors are wood framed partitioning. The flooring is concrete slab structure on the main floor with wood panel subfloor over wood truss on the second and third floors. The exterior walls are T1-11 wood panel with wood trim, newly painted in August, Recent Improvements: The owner has remodeled approximately 50 of the 65 units, and the units with the most dated interiors receiving the greatest degree of remodel. Renovated apartments have had the wood-burning fireplaces sheet rocked over the fire box for a finished look. The fireplace chimneys have all been removed from the roofs, creating a much more appealing, streamlined look. Quality upgrades to the unit interiors include replacing carpeting and flooring, painting kitchen cabinets and installing new cabinet hardware, new appliances, new floor trim, light fixtures, electrical switches and receptacles, new interior doors and trim, updating restroom vanity and mirrors, and refinishing countertops. Additionally, the baseboard electric heaters have been removed and replaced with an electric Cadet-style in-wall heater in each room. Above average materials were used such as the vinyl wood textured flooring and painted countertop finishes.

7 Roof Type: Gable roof truss system with composition shingle roofing finish. Windows & Patio Doors: All of the windows and sliding patio doors have been updated since 2015 with new insulated dual pane vinyl windows and doors. Apartment Entry Doors: Steel entry doors into each unit with deadbolt lock. Interior doors are hollow wood, with new interior 6-panel doors being included in remodeled units. Heat: Electric Baseboard heat and thru-wall A/C in the units, and wall mounted Cadet-style electric heaters in remodeled units. Both systems are electrical, with electric being the only utility paid for by the tenant. Parking: There are 86 parking spaces total (1.32 spaces per unit) comprising 64 carport spaces and 22 off-street open parking spaces. The parking area has two accesses to Colton Street, with a driveway that wraps around the exterior of the site. The parking area is asphalt. Landscaping: Mature, moderate landscaping includes a central courtyard area with irrigated lawn and mature pine trees, shrubs, security gate access, concrete curbing and sidewalks throughout. The landscaping is attractive and presents good curb appeal.

8 Property Location The subject property is located in the Hill n Dale neighborhood, which is less than seven miles north of Spokane city center. Its location is in an area, of mixed zoning accommodating commercial uses along primary arterials, with multifamily and single family residential uses extending beyond these commercial zones. Spokane Transit Authority bus service has adequate routes along the primary arterials serving the subject property s location. The neighborhood is adequately served by public education facilities for K-12 education, and is in close proximity to private college campuses including Gonzaga University, Eastern Washington Spokane Campus, and the Spokane Community College. The neighborhood trend exhibits sustainable growth, consistent demand both residentially and commercially, and good synergies between a complementary mix of land uses for continued and sustainable growth. While market rents are increasing, median household income has remained fairly stagnant. Median household income is stable, but does not appear to be keeping pace with inflation. The trend of declining home ownership rates will continue to place downward pressure on vacancy rates and upward pressure on rental rates into the near future. Aerial Map

9 Spokane Development News: Nine Projects Transforming Spokane s City Center Spokane is in the midst of major transformations, with $800 million in public and private investments pouring into the city s downtown and nearby neighborhoods. New apartments, stores and offices are under construction. Some of the work involves rehabilitating historic Spokane buildings. Other projects are new construction. Here are nine large projects proposed or underway in the city s urban core: 1. Wonder Bread Building Cost: $12.5M. Projected Completion: Summer, 2018 Proposed use: Mixed use, with a food market, offices and roof plaza Tower Cost: $32M. Projected Completion: TBD Proposed use: 14-story condo tower in the valley neighborhood Tower 3. WSU Jensen Byrd Building Cost: $45M. Status: TBD. Renovation of a historic warehouse building on the WSU-Spokane campus. 4. The M Cost: $65M. Projected Completion: Winter, 2018 Use: Old Macy s building to be renovated for mixed-use. The M 5. Riverfront 100-Acre Park Redevelopment Cost: $64M. Projected Completion: Ridpath Club Apartments and Condos Cost: $22M. Projected Completion: 2019 Use: Mixed-use housing and retail. 7. University District Gateway Bridge Cost: $10.6M. Projected Completion: Spring, 2018 Use: Pedestrian and cyclist bridge with a multiuse building. Riverfront Redevelopment 8. Kendall Yards Cost: $150M. Projected Completion: Ongoing Use: Mixed-use residential, commercial and office. 9. The Falls Cost: $60M. Projected Completion: Spring, 2018 Use: Mixed-use residential, hotel, commercial and office. Kendall Yards *The Spokesman Review, June 25, 2017 by Beck Kramer

10 Spokane Multi-Family Market Overview Vacancy Rates Runstad Center for Real Estate Studies, at the University of Washington, reported that the vacancy rate in Spokane County as of spring 2017 was 1.4 percent. Their previous report in fall 2016 stated 1.6 percent, down from 3.3 percent a year earlier and from 4.3 percent five years ago, according to apartment-market surveys conducted twice annually. Rental Rates Rent growth in Spokane has improved significantly since the beginning of the cycle in 2010, culminating in increases of over 4% in These gains have been bolstered by tight vacancies and job additions in high-paying job sectors like education and health services. Supply Annual demand has outpaced supply for five consecutive years as of the end of Up until 2017, deliveries fell below historical levels, with annual absorption outpacing deliveries as of the end of Q Home Ownership Rates Home ownership rates in Spokane County continue to decline from the peak at 59.2% in 2009, and are most recently reported in July of 2016 at 54.74% for Spokane County by the US Census Bureau. Median household income is stable, but does not appear to be keeping pace with inflation. The trend of declining home ownership rates will continue to place downward pressure vacancy rates and upward pressure on rental rates into the near future.

11 Unit # Unit Type 2017 Rent Cedar Village September, 2017 Rent Roll Percent Increase from 2015 Unit # Unit Type 2017 Rent Percent Increase from BR/1BA $ % 34 2BR/1BA $ % 2 1BR/1BA $ % 35 1BR/1BA $ % 3 1BR/1BA $ % 36 1BR/1BA $ % 4 1BR/1BA $ % 37 1BR/1BA $ BR/1BA $ % 38 1BR/1BA $625 N/A * VACANT 2015 N/A * VACANT BR/1BA $ % 39 1BR/1BA $ % 7 1BR/1BA $ % 40 1BR/1BA $ % 8 1BR/1BA $ % 41 1BR/1BA $ % 9 1BR/1BA $ % 42 1BR/1BA $ % 10 1BR/1BA $ % 43 1BR/1BA $ % 11 1BR/1BA $ % 44 1BR/1BA $ % 12 1BR/1BA $ % 45 1BR/1BA $ % 13 1BR/1BA $ % 46 1BR/1BA $ % 14 1BR/1BA $ % 47 1BR/1BA $ % 15 1BR/1BA $ % 48 2BR/1BA $ % 16 1BR/1BA $ % 49 2BR/1BA $ % 17 1BR/1BA $ % 50 1BR/1BA $ % 18 1BR/1BA $ % 51 1BR/1BA $ % 19 1BR/1BA $ % 52 2BR/1BA $ % 20 1BR/1BA $ % 53 2BR/1BA $ % 21 1BR/1BA $ % 54 2BR/1BA $ % 22 1BR/1BA $ % 55 2BR/1BA $ % 23 1BR/1BA $ % 56 1BR/1BA $ % 24 1BR/1BA $ % 57 1BR/1BA $ % 25 1BR/1BA $ % 58 2BR/1BA $ % 26 1BR/1BA $ % 59 2BR/1BA $ % 27 2BR/1BA $ % 60 2BR/1BA $ % 28 2BR/1BA $ % 61 2BR/1BA $ % 29 1BR/1BA $ % 62 1BR/1BA $ % 30 1BR/1BA $ % 63 1BR/1BA $ % 31 1BR/1BA $ % 64 2BR/1BA $ % 32 1BR/1BA $ % 65 2BR/1BA $ % 33 2BR/1BA $ % (#44, #45,#50 & #63 Vacant - market rents)

12 INVESTMENT SUMMARY Summary Price: $3,500,000 Down Payment: 25% $875,000 Number of Units: 65 Location 8805 N Colton St Spokane, WA Financing Summary New Multi-Family Loan in the amount of Price/Unit: $53,846 $2,625,000 Building/SF: 42,224 at 4.50% Principal and Interest Amortized over 30 Years Price/SF $83 Current Cap: 6.06% Market Cap: 6.63% Parcel ID Current GIM 7.5 Lot Size Market GIM 7.1 Utilities paid by Tenant Additional Information & Acre (47,916 SF) Electricity Year Built: 1976 INCOME Annualized Operating Data Annualized Expenses Current Market T-12 Estimated % EGI Per Unit EXPENSES Scheduled Rent Income $487,092 $514,380 Taxes $33,350 - $513 Misc. Income Laundry $4,080 $4,080 Insurance $12,454 - $192 Scheduled Gross Income $491,172 $518,460 Water / Sewer $51,701 - $795 Less: Vacancy (5%) ($24,559) ($25,923) Garbage $20,128 - $310 Effective Gross Income $466,613 $492,537 Common Gas & Electricity $15,490 - $238 Less: Expenses ($254,542) ($260,385) Management $75, % $1,162 Net Operating Income $212,071 $232,152 Maintenance & Repairs $19, % $301 Turnover / Cleaning & Landscaping $10, % $156 Year 1 Debt Service ($159,606) ($159,606) Reserves $16,250 - $250 Pre-Tax Cash Flow $52,466 $72,546 Principal Reduction $42,347 $42,347 Total Return 10.8% $94, % $114,893 Total Expenses $254, % $3,916 Cash Yield 6.0% $52, % $72,546 Scheduled Income Current Market Total Units Unit Type Approximate SF/Unit Rent Rent/PSF Rent Rent PSF 16 2BR-1BA 714 SF $650 - $735 $ $1.03 $765 $ BR-1BA 516 SF $550 - $625 $ $1.21 $625 $ $40,591 $42,865

13 RENT SURVEY PROPERTY LOCATION Cedar Village 8805 N Colton St Spokane, WA *Subject Property Hill N' Dale Apts 8719 N. Hill N' Dale Spokane, WA Distance from Subject Property: 0.1 mile Lyons Ridge Estates IV 40 E Pineridge Court Spokane WA YEAR BUILT TOTAL # OF S TYPE BR/1BA 49 1BR/1BA Extensively renovated Interiors incl. new Appliances, AC, DWs. Leasing office, pool, playground BR/1BA 1BR/1BA Undergoing improvements. Patio or balcony, on-site laundry center & clubhouse BR/1BA 1BR/1BA SF CURRENT RENT RENT/PSF SOURCE PHOTO $650 - $735 $ $1.03 Owner $550 - $625 $ $1.21 $800 $616 $775 $675 $0.89 $1.02 $0.97 $1.00 Craigslist 7/27/17 Craigslist 7/27/17 Distance from Subject Property: 0.2 mile Patio/Balcony Fireplace expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and

14 PROPERTY LOCATION Rosewood Club 401 E Magnesium Rd Spokane, WA YEAR BUILT TOTAL # OF S TYPE BR/1BA 1BR/1BA SF CURRENT RENT RENT/PSF SOURCE PHOTO $757 $0.97 CoStar $666 $0.97 8/29/17 Distance from Subject Property: 0.3 miles Patio/balcony & dishwasher. Fitness center, playground & pool Lincoln Village 210 E Lincoln Rd Spokane, WA BR/1BA 1BR/1BA $695 $660 $1.03 $1.09 thelincolnvillage apts.com 7/27/17 Distance from Subject Property: 0.7 mile Fireplace Dishwasher A/C Covered parking Cedar Springs Estates IV 7808 N Morton St Spokane WA Distance from Subject Property: 1.0 miles BR/1BA 1BR/1BA Dishwasher A/C W/D in 2BRs Garages $760 $660 $0.84 $1.00 cedarpropertym gmt.com/sprin gs-iv.com 7/27/17 expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and

15 PROPERTY LOCATION Colfax Square N Colfax Rd Spokane WA Distance from Subject Property: 1.2 miles YEAR BUILT TOTAL # OF S TYPE BR/1BA Dishwasher A/C Balcony Patio SF CURRENT RENT RENT/PSF SOURCE PHOTO 578 $660 $1.14 Costar 8/29/17 Cedar Creek Village I 8424 N Nevada St. Spokane WA Distance from Subject Property: 1.2 miles BR/1BA 1BR/1BA Dishwasher A/C W/D in 2BRs Garages $760 $660 $0.84 $1.00 cedarpropertym gmt.com/creek -i.com 7/27/17 Deer Run Apartments 1225 E Westview Ct Spokane, WA Distance from Subject Property: 1.3 miles *Income Restricted BR/1BA 1BR/1BA W/D hook-ups A/C Garages $780 $673 $0.87 $ m/apartmentcommunityprofile/ /27/19 expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and

16 PROPERTY LOCATION Cedar Springs Estates III 1011 E Sharpsburg Ave Spokane WA Distance from Subject Property: 1.5 miles YEAR BUILT TOTAL # OF S TYPE BR/1BA 1BR/1BA Dishwasher A/C W/D in 2BRs Garages SF CURRENT RENT RENT/PSF SOURCE PHOTO $760 $0.84 cedarpropertym $660 $1.00 gmt.com/creekiii.com 7/27/17 Rock Creek Apts 911 E Beacon Ave Spokane, WA Distance from Subject Property: 1.9 miles BR/1BA 1BR/1BA Dishwasher W/D $810 $725 $0.92 $ m/apartmentcommunityprofile/ /27/17 expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and

17 RECENT SALES COMPARABLES PROPERTY LOCATION Cedar Village 8805 N Colton St Spokane, WA *Subject Property YEAR BUILT # S MIX / COMMENTS PRICE PRICE / PRICE / SF SOLD PHOTO BR/1BA $3,500,000 $53,846 $83 TBD 49 1BR/1BA Extensively renovated Interiors incl. new Appliances, AC, DWs. Leasing office, pool, playground. Parc Sprague Apts E Sprague Ave Spokane Valley, WA BR/1BA 17 1BR/1BA $3,975,000 $70,982 $95 PEND Linger Longer Lodge 1815 N Hutchinson Rd Spokane Valley, WA BR/1BA 23 2BR/1BA 21-1BR/1BA 45 Studio $5,900,000 $65,556 $116 PEND expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and

18 PROPERTY LOCATION Pine Terrace 29 E 6th Ave Spokane, WA YEAR BUILT # S MIX / COMMENTS PRICE PRICE / PRICE / SF SOLD PHOTO BR/1BA $1,225,000 $61,250 $74 May BR/1BA Covered parking On-site Laundry Hill N Dale Apts 8719 N Hill N Dale St Spokane, WA N/A Large 1, 2, & 3 BR Apts Patio or balcony, on-site laundry center, extra storage, large closets, playground, and clubhouse. $4,283,000 $57,878 N/A Feb 2017 Pacific Plaza 4023 E Pacific Ave Spokane, WA BR/1BA 19 1BR/1BA 1 Studio $1,625,000 $58,036 $87 Oct 2016 expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and

19 PROPERTY LOCATION Serrano Apts 121 E Wedgewood Ave Spokane, WA YEAR BUILT # S MIX / COMMENTS PRICE PRICE / PRICE / SF SOLD PHOTO BR/1.5BA $11,915,000 $66,194 $72 May BR/1BA AC & fireplace On-site laundry, off-street parking and garages. Fitness center & pool Adams Square Apts 221 S Adams Rd Spokane Valley, WA BR/1BA 36 2BR/1BA 68 1BR/1BA $5,533,800 $52,206 $78 April 2016 Perrine Court E Mansfield Ave Spokane Valley, WA BR/1BA 20 1BR/1BA $3,470,000 $55,968 $86 April 2016 expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and

20 PROPERTY LOCATION Beringer Place Apts 111 N Locust Rd Spokane Valley, WA YEAR BUILT # S MIX / COMMENTS PRICE PRICE / PRICE / SF SOLD PHOTO BR/2BA $4,112,910 $83,937 $88 March BR/2BA 16 1BR/1BA Timber Court 2707 E 37th Ave Spokane, WA BR/1BA 2 1BR/1BA $2,097,500 $53,782 $76 Jan 2016 Revere Ridge 1723 N Union Rd Spokane Valley, WA BR/2BA 66 2BR/1BA 55 1BR/1BA $6,536,100 $63,457 $73 May 2015 expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and

21 PROPERTY LOCATION Farr Court 210 S Farr Rd Spokane Valley, WA YEAR BUILT # S MIX / COMMENTS PRICE PRICE / PRICE / SF SOLD PHOTO BR/2BA $4,873,400 $67,686 $49 May BR/1BA 55 1BR/1BA 3002 E 30th Ave Spokane, WA N/A $3,270,000 $59,455 $51 May 2015 Randolph Arms 3915 W Randolph Rd Spokane, WA BR/2BA 8 2BR/1BA 28 1BR/1BA $3,610,000 $56,406 $60 April 2015 expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and