MABRY MANOR - PROPERTY REPORT NOVEMBER Mabry Manor Tampa, FL

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1 MABRY MANOR - PROPERTY REPORT NOVEMBER 2016 Mabry Manor Tampa, FL RADCO Newport Villas, LLLP Presented December 2016

2 Letter from Norman Radow Dear Investor, I am pleased to provide you with the November Investor Report for Mabry Manor, our 372-unit and Class B-minus property in Tampa, Florida. Mabry Manor made impressive gains in many areas in November. Starting in December we will see large increases in revenue, which is the only soft spot this month. The reason for this is that we cleaned out most of the riff raff in October and early November which has been a boon to leasing. But I also think we were too aggressive in budgeting revenue during a clean-out as the budget is much higher than pro forma. Occupancy was up at month end and is higher still today. In-place rents are soaring and renewal rates are very strong. Revenue growth is right around the corner and we expect to surpass the pro forma in December. Total revenue came in at $247,402 this month which was unfavorable to budget by $14,394. Although rents are rising, total revenue was adversely impacted by write-offs due to delinquency and evictions as the clean-out of the poorly qualified tenancy continued. The good news is that evictions are starting to taper off while occupancy is approaching the mid-90s, setting the stage for higher revenue. The rent trend is compelling at Mabry Manor. In-place rents climbed another $13 in November reaching $704 and leaving us only $26 away from the year one pro forma with seven months remaining. Since July, the annualized rent growth is 15.7 percent! This was primarily a result of strong leasing of the renovated units with the accompanying premiums, and was further supported by renewal increases. The property generated 30 move-ins during the month and 14 of those were in newly renovated product. We achieved an average rent of $820 on these new leases which is $116 higher than the current in-place rents. We also negotiated renewal leases on14 units with an average increase of 15.4 percent. $750 $725 $700 $675 $650 $625 $664 Underwritten Starting Rent $669 $670 Mabry Manor In-Place Rent Think about that number. After 18 move-outs, and after being in the low 90s for a couple of weeks, the property ended November occupied at 92.2 percent and percent preleased. The premiums achieved on the renovated units were $100 on average. We anticipate being able to achieve higher premiums after we restart the unit renovation program once we have the new amenities delivered and have cycled through more of the legacy rent roll. We have made the decision to test three unit renovations with better finishes at higher premiums. Renovation work on those will begin in January, making them ready to lease in February. Leasing activity was strong in November with 77 prospect tours resulting in 28 approved applications. Operating expenses came in at $148,586 and were favorable to budget by $4,509. Savings in taxes/insurance and repairs/maintenance more than offset the unfavorable payroll variance of $5,096. Additional maintenance salaries and overtime caused about half of the variance. Payroll taxes and fees were over budget in tandem with the extra maintenance salaries and overtime. The overall property taxes/insurance expense category was favorable to budget by $4,202 $687 $691 $704 $730 Jul 2016 Aug 2016 Sep 2016 Oct 2016 Nov 2016 Year 1 Pro Forma (June 2017)

3 Letter from Norman Radow due to negotiated savings in property insurance. The repairs/maintenance category reflected a favorable variance of $4,200 this month despite a large fire code expense. The property failed a fire alarm inspection and was required to replace the alarm system. While the repairs are being made, we are required to keep a fire watch officer on duty. We expect the repairs to be complete in mid-december. This unexpected expense was offset by savings in paint services, plumbing repairs and carpet cleaning. Net operating income after debt service was $58,189 and equates to a 2.43x debt service coverage ratio. Below the line, partnership expenses were unfavorable to budget by $2,650 from costs associated with planning some additional amenities on unused land in the campus. We are declaring a distribution of 7.5 percent when annualized on original equity for the quarter ending December 31 st. Payment will be made by the end of the third week of January. Thank you for investing with us. Warmest regards, We are making great strides with the capital plan. Pressure washing, siding repairs, and exterior painting are all finished which gives the property a fresh modern look. The boardwalk deck and rails are complete and the staining was applied this week. Work to refresh the three laundry centers will be completed by the time you receive this letter. The laundry rooms were in poor condition and we expect this change to make a big impact. Sixteen water heaters and eighteen HVAC units have been replaced to date. New railing around the pool was installed last week. I was there when it was underway and I realized that deck should be expanded as the pool area is small, yet well used. So, we are expanding the deck into the lake. That project will start in January. The survey for the playground is being done for permitting purposes. Finally, the designs for the clubhouse and pool area are done and we are just waiting to receive the permitting documents. When I toured the property last week, the look and feel of it is night and day. As anticipated in our last report, despite lower revenue than plan, the bottom line net income is up by $14,559 over just last month. We expect continued improved financial performance in December and look forward to providing you with that report.

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5 November Rent Trends Mabry Manor New Move-Ins By Unit Type $1,200 $1,000 $800 $600 $760 $642 $612 $556 $848 $770 $700 $637 $819 $901 $1,055 $880 $787 $732 $665 $838 $762 $980 $1,041 $932 $870 $791 $400 $200 $0 1x1 A 1x1 C 1x1 D 1x1 E 2x1 A 2x2 B One Bedroom, One Bath A 475 sq. ft.: Ten new move ins were secured. The non-renovated units leased for an average of $642. The renovated units leased for an average of $760. Going In Rent Pro Forma Rent Classic Rent Renovated Rent During November, Mabry Manor obtained a total of 30 new move ins. One Bedroom, One Bath E 675 sq. ft.: Five new move ins were secured. The non-renovated units leased for an average of $787. The renovated units leased for an average of $880. One Bedroom, One Bath C 650 sq. ft.: Seven new move ins were secured. The non-renovated unit leased for $770. The renovated units leased for an average of $848. One Bedroom, One Bath D 675 sq. ft.: One new move in was secured. The non-renovated unit leased for $1,055. Two Bedroom, One Bath A 900 sq. ft.: One new move in was secured. The renovated unit leased for $980. Two Bedroom, Two Bath B 900 sq. ft.: Six new move ins were secured. The non-renovated units leased for an average of $932. The renovated units leased for an average of $1,041.

6 November Renewals Mabry Manor Renewal Summary Unit Type Renewals Previous Rent New Rent $ Rent Change % Rent Change 1x1 A 6 $565 $658 $ % 1x1 C 4 $616 $720 $ % 1x1 E 1 $735 $772 $37 5.0% 2x2 B 2 $786 $920 $ % Studio C 1 $575 $621 $46 8.0% Totals/Averages 14 $624 $719 $ % November Renewals: During November, Mabry Manor secured a total of 14 renewals. The average increase on the renewals was $95, or 15.4 percent.

7 November Financial Overview Mabry Manor MABRY MANOR November 2016 Actual to Actual to Actual to Account Actual Budget Budget YTD Actual YTD Budget Budget YTD Proforma Proforma Rental Income $218,696 $226,551 ($7,855) $1,147,376 $1,149,352 ($1,976) $220,544 ($1,848) Other Income $28,707 $35,245 ($6,538) $142,703 $162,346 ($19,643) $35,246 ($6,539) Total Income $247,402 $261,796 ($14,394) $1,290,080 $1,311,698 ($21,618) $255,790 ($8,388) Payroll $42,131 $37,035 ($5,096) $201,319 $188,516 ($12,803) $36,288 ($5,844) General & Administrative $8,617 $9,147 $530 $41,086 $45,860 $4,774 $10,075 $1,458 Management Fee $7,526 $7,854 $328 $38,875 $39,351 $476 $7,674 $147 Advertising & Marketing $5,438 $5,958 $520 $23,028 $26,860 $3,832 $4,650 ($788) Utilities $28,036 $27,861 ($175) $131,570 $139,305 $7,735 $28,055 $19 Taxes & Insurance $34,120 $38,322 $4,202 $147,726 $191,610 $43,884 $35,806 $1,686 Repairs & Maintenance $22,718 $26,918 $4,200 $119,915 $137,730 $17,815 $21,700 ($1,018) Operating Expenses $148,586 $153,095 $4,509 $703,519 $769,232 $65,713 $144,248 ($4,338) Net Operating Income $98,816 $108,701 ($9,885) $586,561 $542,466 $44,095 $111,542 ($12,726) Debt Service $40,627 $40,361 ($266) $204,822 $194,306 ($10,516) $43,083 $2,456 NOI After Debt $58,189 $68,340 ($10,151) $381,740 $348,160 $33,580 $68,459 ($10,270) Capital Improvements $12,163 $13,567 $1,404 $45,125 $68,731 $23,606 $9,300 ($2,863) Partnership Expenses $12,965 $10,315 ($2,650) $42,657 $40,100 ($2,557) $6,200 ($6,765) Net Income $33,061 $44,458 ($11,397) $293,958 $239,329 $54,629 $52,959 ($19,898)

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