OFFERING SUMMARY. 528 Units Exceptional Value-Add Opportunity Located Within St. Petersburg s Dynamic Gateway Market

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1 Bel Air Apartments ST. PETERSBURG, FLORIDA OFFERING SUMMARY 528 Units Exceptional Value-Add Opportunity Located Within St. Petersburg s Dynamic Gateway Market Holliday Fenoglio Fowler, L.P. ( HFF ) a Florida licensed real estate broker.

2 Holliday Fenoglio Fowler, L.P. ( HFF ) is pleased to present an outstanding investment opportunity to purchase Bel Air Apartments (the Property ), a desirable 528-unit multi-housing community that offers tremendous value-add potential and a strategic location within St. Petersburg s renowned Gateway office and residential market. Bel Air provides investors the unique opportunity to drive revenue growth through the continuation of a recently implemented and highly successful interior renovation program, as well as through the ability to significantly increase below-market rents to be in-line with nearby competitors. Centrally located at the epicenter of Tampa Bay s most prominent employment market, Bel Air offers the assurance of strong, steady cash flow and the promise of substantial untapped upside potential. Drafting off fruitful renovation programs carried out at nearby properties and prime market conditions, ownership has recently embarked upon a very accretive interior renovation program that has netted a significant return on cost. Upgrades that include the installation of black appliances, the replacement of cabinetry, new Formica countertops, and faux wood plank flooring on first floor units have been completed to 13 units to-date. While these upgrades have already garnered a $125 rental premium, rents at the Property remain $150 to $240 below similar, recently renovated properties in the submarket. Therefore, a new owner will be able to reposition the Property and close the gap in rents by renovating the balance of the units and upgrading common areas. Recent positive trends within the submarket include soaring job and population growth, the rapid absorption of new supply at top of market rental rates, and a growing disparity between rents at Class A and Class B properties. These trends, combined with the Property s distinctive physical attributes and its tremendous location within Tampa Bay s second largest job market, place Bel Air in a prime position to deliver outsized returns for many years to come. Investment Highlights» Opportunity to continue and expand proven value-add program to achieve sizable renovation premiums» In-place rents are $150 to $240 below similar, recently renovated properties within the submarket» Rapid rent growth at Property with recent leases growing more than 5% over the rent roll average ( excluding renovated units)» Centrally located in the heart of St. Petersburg s Gateway office market boasting 60,000 employees and many of Tampa s largest and most noteworthy corporate headquarters» Supply constrained, in-fill submarket with pent up demand for upgraded units» Walking distance to Publix grocery, restaurants, other retail amenities, and several office parks including Jabil Circuit, the 2nd largest public company in Tampa Bay» Quick drive to Westshore Business District and Downtown St. Petersburg, home to unmatched shopping, dining, and nightlife» Tremendous recreational and lifestyle amenities within a short drive including the renowned white-sand beaches of Pinellas County, water sports in Tampa Bay, and nightlife and dining in downtown St. Petersburg» The submarket experienced an impressive 6.5% rent growth in Q1 of 2016, according to Axiometrics, and is projected to enjoy healthy growth for the forseeable future» Quiet, low-density setting with mature trees, picturesque lakes, and four swimming pools Executive Summary 2

3 pro pert y ov e rv i e w Address: nd Ave N, St. Petersburg, FL 33716, Pinellas County Total Units: 528 Units Average Unit Size (Under A/C): 974 SF Total Rentable Residential Square Feet: 514,474 SF Occupancy (As of 5/31/16): 93.4% Year Built: 1973 Market Rents (As of 5/31/16): $886/ $0.91 Construction Type 2 story, wood frame with wire mesh and stucco lath over framing u n it mix Floor Plan Unit Type Average SF Unit Count % of Mix A1 1 Bed / 1 Bath % A2 1 Bed / 1 Bath 1, % B1 2 Bed / 1 Bath 1, % B1A 2 Bed / 1 Bath 1, % B2 2 Bed / 2 Bath 1, % TOTAL/AVERAGE % 3 Executive Summary

4 ST. PETERSBURG, FLORIDA Highly Desirable Asset in Excellent Location ATTRACTIVE COMMUNITY WITH AMPLE AMENITY OFFERINGS The Property enjoys unique competitive advantages with a quiet, low-density setting, spacious and efficiently-designed floor plans, and an extensive array of amenities such as four swimming pools, a fitness center, a large club house, and two shuffleboard courts. The Property has been well maintained, yet there are ample opportunities to update the common areas of the Property to compete at the upper echelon of the market. LARGE FLOOR PLANS OFFER DISTINCT COMPETITIVE ADVANTAGE With an ideal mix of one-bedroom (41%) and two-bedroom (59%) units, the Property s average unit size at 974 sf is more than 15% larger than that of its nearby competitors, which average just 841 sf. In addition, every unit includes a spacious screened-in lanai, many of which overlook one of the Property s four scenic lakes. SUBSTANTIAL RECENT CAPITAL INVESTMENT The Property s ownership has recently invested significant capital, spending nearly $1.6 million between 2013 and 2015 to improve the Property s physical condition. Recent projects include exterior paint throughout the Property, updating floors and lighting in interior corridors, and the replacement of five roofs over the past 18 months. Community Amenities» Four sparkling swimming pools» Two shuffleboard courts» Fully equipped fitness center» Four 24-hour laundry facilities» Covered parking» Car care center Executive Summary 4

5 Standard Unit Features» Full kitchen with white appliances» Plastic laminate countertops» Breakfast bar» White cabinets» Carpeting in living areas and bedrooms» Vinyl tile flooring in wet areas» Dual sink vanities*» Large private patio or balcony *In select units 5 Executive Summary

6 Typical Kitchen Tremendous Potential To Drive Significant Revenue Growth BLANK SLATE WITH ABUNDANT VALUE-ADD POTENTIAL With only 13 units, or 2.5% of the Property s total unit count, having been renovated to-date, the Property is essentially a blank slate with which a new owner will have the ability to continue and enhance the current interior upgrade program in order to achieve substantial rental premiums. Similar strategies have been successfully carried out at nearby properties, such as Lincoln Shores, Gateway on 4th, and Sienna Bay. Interior upgrades at these properties have garnered renovation premiums as high as $250. The Property s current interior renovation package includes: Black appliances New Formica countertops in kitchens and baths New cabinet boxes and doors Faux wood flooring in living areas on first floor units Upgraded lighting and plumbing fixtures with a brushed nickel finish Two-inch faux wood blinds In addition to the above upgrades, an owner has the opportunity to further reposition the asset with potential improvements such as: stainless steel appliances, built-in microwaves, and washer/dryer connections, as well as removing a non-structural wall in the kitchen to create a more modern, open layout. The Property s amenities are nicely appointed; however, there is also the potential to: Redecorate the leasing center and add a resident lounge and business center Add a dog park Transform a large space that currently houses the maintenance shop into a state-of-the-art fitness center overlooking one of the pools Offer a valet waste service Update the pool areas with new furniture and cabanas Add a children s playground Executive Summary 6

7 Upgraded Kitchen ABILITY TO CLOSE GAP IN RENT TO COMPETITORS Nearby properties of similar vintage are achieving rents as much as $240 higher than those at Bel Air, creating an excellent opportunity for a new owner to aggressively push rents. Bel Air also offers large units compared to its competitors, with the Property s floor plans averaging 132 sf greater than the average of the competitive set. In comparison to nearby class A, the gap is even greater. The disparity between Class A and Class B properties currently stands at 44.5%, the widest margin in recent history. This disparity gives Class B landlords signficant leverage to increase rents. $1,200 $1,000 $800 $827 Bel Air vs. Competitors - Achieved Rent $1,067 $1,064 $980 $872 $922 $844 $830 $797 $600 $400 $200 $0 Bel-Air Sienna Bay Lincoln Shores Gateway on 4th Vibe at Gateway Meadows Rio Vista Village Emerald Pointe Rent Avg Rent of Comps: $922 7 Executive Summary

8 Executive Summary 8

9 Excellent Access to Employment and Retail in Central Gateway Location STRATEGIC LOCATION IN ONE OF TAMPA S MOST DYNAMIC JOB MARKETS Bel Air s prominent location off the major intersection at Gandy Boulevard and 9th Street (41,000 cars daily) places it just minutes from all of the Gateway market s largest employers, including Raymond James, Franklin Templeton, Tech Data, and Home Shopping Network. Of note, the headquarters for Jabil Circuit, the company that manufactures circuit boards for Apple s iphone and Tampa s 2nd largest public company, is located within walking distance of the Property. Meanwhile, the Gateway market s central location within the Tampa Bay region caters to the abundance of area residents who want to enjoy the St. Pete lifestyle while still being within a short commute of Westshore, Downtown Tampa, and Downtown St. Petersburg. OUTSTANDING NEARBY RETAIL OPTIONS Gateway offers a plethora of high-quality shopping, dining, and grocery options, such as the Gateway Crossing retail center that features a Publix supermarket and a number of popular restaurants within walking distance of the Property. Residents are also just a short drive to Downtown St. Petersburg s exciting nightlife district and St. Petersburg s 4th Street commercial corridor, which boasts a Fresh Market, Trader Joe s, and dozens of bars and restaurants. Westshore s International Plaza and Bay Street and WestShore Plaza, Tampa s top performing regional malls, are a quick trip away across the Howard Frankland Bridge. UNMATCHED QUALITY OF LIFE St. Petersburg and greater Pinellas County have undergone a major transformation in recent years, quickly becoming the epicenter of nightlife, entertainment, and recreation in the Tampa Bay region. Exciting new dining and shopping destinations, recently opened museums, and over a dozen craft breweries have highlighted St. Petersburg s revitalization. These new developments combined with Pinellas County s natural amenities, including two of TripAdvisor s top 10 beach destinations in the country, have made St. Petersburg a target relocation destination for both residents and employers alike. ONE OF THE NATION S BEST PERFORMING APARTMENT MARKETS Tampa s economy ranks among the top 10 MSA s for job growth adding 42,000 jobs over the past 12 months ending April, which along with strong population growth and rapid household formation, has fueled Tampa s apartment market. Tampa placed among the top 25 markets nationally with 6.5% rent growth in the 1st quarter of 2016, according to Axiometrics. 9 Executive Summary

10 Investment Contacts Debt Inquiries Matt Mitchell Managing Director Zach Nolan Associate Director Brett Moss Senior Analyst Elliott Throne Managing Director Jaret Turkell Managing Director Maurice Habif Associate Director McCallum Foote Analyst Preston Reid Associate Director HFF FLORIDA OFFICES Tampa 101 East Kennedy Boulevard Suite 3905 Tampa, FL Telephone: Fax: Miami 1450 Brickell Avenue Suite 2950 Miami, Florida Telephone: Fax: Orlando 300 South Orange Avenue Suite 1250 Orlando, FL Telephone: Fax: Atlanta Austin Boston Carolinas Chicago Denver Dallas Florham Park (NJ) Houston Indianapolis Los Angeles Miami New York Orange County (CA) Orlando Philadelphia Phoenix Pittsburgh Portland (OR) San Diego San Francisco Tampa Washington, DC No warranties or representations, expressed or implied, are made as to the accuracy of the information contained herein. The Property is offered subject to errors, omissions, change of price, rental or other conditions including withdrawal without notice, and will be subject to any special conditions, which may be imposed or made by the owner or Holliday Fenoglio Fowler, L.P. The owner and Holliday Fenoglio Fowler, L.P. reserve the right to accept or reject or withdraw any and all offers. Copyright 2016 HFF (Holliday Fenoglio Fowler, L.P.) and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 23 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter at twitter.com/hff.