A 220-Unit Class A Multifamily Investment Opportunity

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1 A 220-Unit Class A Multifamily Investment Opportunity O F F E R E D B Y

2 LOFTS AT CROSSROADS CENTRE' A P A R T M E N T S F O R S A L E Market Price Units: 220 Avg Size: 917 Date Built: 2012 Rentable Sq. Ft.: 201,688 Acreage: Occupancy: 94% Class: A AVAILABLE ASSUMPTION ONLY Stabilized NOI $1,743,089 SALIENT FACTS: Available on an Assumption Basis Only Located in Waxahachie, TX, south of Dallas Easy access to I-35 and Hwy 287 Next door to the Waxahachie Civic Center Close to high-end retail, restaurants and office spaces Near Navarro College and the new Baylor Healthcare facility Many distribution facilities in the area 4.75% 40 yr HUD loan must be assumed (possible A7 on 1/15) Seller desires to do a pre-sale, prior to stabilization! For More Information Please Contact: Tom Wilkinson twilk4@ketent.com ext San Felipe, Suite 355 Houston, TX

3 Number of Units Physical Information Asking Price Market Price Mortgage Balance $18,007,032 Est Mkt Rent (Feb-15) Avg Unit Size 917 Price Per Unit N/A Amortization (months) Mo Avg $232,016 Net Rentable Area 201,688 Price Per Sq. Ft. N/A Debt Service $1,042,999 Physical Occ (Feb-15) 94% Land Area (Acres) Units per Acre Date Built Stabilized NOI $1,743,089 Monthly P & I + MIP Interest Rate Date Due $86, % 12/2053 Est Ins per Unit per Yr Property Tax Information Tax Rate (2013) $ Water Meter / Master Elec Meter RUBS Indiv Est Res for Repl/Unit/Yr Yield Maintenance $200 Yes 2014 Tax Assessment Est 2014 Taxes $15,646,470 $394,682 Roof Style Pitched Type HUD 221 (d) 4 Est Future Tax Assessment $15,646,470 HVAC System Indiv Loan is locked to 1/1/15, then 8%, declining 1% a year Est future Taxes $394,682 INCOME PRO-FORMA INCOME Current Street Rent with a 7% Increase 2,861,073 Estimated Gross Scheduled Income 2,861,073 Estimated Loss to Lease (1% of Total Street Rent) (28,611) 1% Estimated Vacancy (4% of Total Street Rent) (114,443) 4% Estimated Concessions and Other Rental Losses (3% of Total Street Rent) (85,832) 3% Estimated Utilities & Trash Income Estimated Other Income 147,260 Estimated Total Rental Income 2,887,276 ESTIMATED TOTAL PRO-FORMA INCOME 2,887,276 2 Month Average Income Annualized EXPENSE Fixed Expenses Taxes Insurance Total Fixed Expense Utilities Electricity Water & Sewer Gas $238,423 / Mo $238,423 / Mo 107,829 $490 / Unit / Yr $669 / Unit / Yr $240,606 / Mo 2014 Tax Rate & Est Future Assessment 12/14 Trailing Operating Statement $45,813 $208 per Unit 440,495 $2,002 per Unit 440,495 $2,002 per Unit office and common area Total Utilities 143,108 $650 per Unit 143,108 $650 per Unit Other Expenses Other Expenses Estimated Other Expenses General & Admin & Marketing Repairs & Maintenance Labor Costs Contract Services $107,122 $213,464 $196,840 $22,062 $487 per Unit $970 per Unit $895 per Unit $100 per Unit $107,122 $110,000 $198,000 $22,062 $487 per Unit $500 per Unit $900 per Unit $100 per Unit Management Fees $81, % $370 per Unit $79, % $361 per Unit Total Other Expense 620,917 $2,822 per Unit 516,584 $2,348 per Unit Note: Interest Expense in the amount of $859, and MIP in the amount of $72, have been removed from Expenses 1,204,520 Total Operating Expense $5,475 per Unit 1,100,187 $5,001 per Unit Reserve for Replacement 44,000 $200 per Unit 44,000 $200 per Unit Total Expense 1,248,520 $5,675 per Unit 1,144,187 $5,201 per Unit Net Operating Income (Actual Underwriting) 1,535,675 1,743,089 Asking Price Existing Debt 220 Financial Information $394,682 $45,813 $44,201 $98,907 MODIFIED ACTUALS Jan '14 thru Dec '14 Expenses Fixed Expenses $1,794 per Unit $208 per Unit Utilities $201 per Unit $450 per Unit $2,784,195 Existing Loan Parameters PRO-FORMA Estimated Expenses Estimated Fixed Expenses $394,682 $1,794 per Unit Estimated Utilities $0 $ per Unit $0 $ per Unit Market Price 18,007,032 $44,201 $201 per Unit $98,907 $450 per Unit Operating Information Market Price 18,007,032 $222,825 Existing Debt Service Net Spendable 1,042, ,675 1,042, ,089 NOTES: ACTUALS: Income and Expenses calculated using owner's 12/14 Trailing Operating Statement. PRO FORMA: Income is Pro Forma as Noted. Taxes were calculated using 2014 Tax Rate & Est Future Assessment. Insurance is estimated. Management Fees calculated as 2.75% of Gross Income, Other expenses are Estimated for the Pro Forma. DISCLAIMER: The information contained herein has been obtained from sources that we deem reliable. We have no reason to doubt the accuracy of the information, but we have not verified it and make no guaranty, warranty or representation about it. It is your resonsibility to independently confirm its accuracy and completeness. We have not determined whether the property complies with deed restrictions or any city licensing or ordinances including life safety compliance or if the property lies within a flood plain. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME OR EXPENSE AND PERFORM OR HAVE PERFORMED ANY INSPECTIONS TO VERIFY POSSIBLE CONTAMINATION BY ASBESTOS, LEAD PAINT, MOLD OR ANY OTHER HAZARDOUS SUBSTANCES. The owner reserves the right to withdraw this listing or change the price at anytime without notice during the marketing period. 2/26/2015 LoftsatCrossroadCentre.xlsx

4 PROPERTY INFORMATION CURRENT MORTGAGE Age: 2012 Mortgage Balance $18,007,032 Property Overview TAXING AUTHORITY Ellis County ACCT ID #: Renovated: N/A Servicer Prudential Ellis County $ Elec Meter: Indiv Amortization 480 Waxahachie ISD $ A/C Type: HVAC P & I $86, City of Waxahachie $ Water: RUBS Type HUD Ellis CAD $ Wiring: Copper Assumable Yes Ellis County Lateral Road $ Roof: Pitched Monthly Escrow Yes Paving: Concrete Origination Date 7/1/2011 Materials: BrickWood Due Date 12/2053 # of Stories: 3 Interest Rate 4.75% Buildings: Yield Maintenance* LO ends 1/15, then 8% 2014 Tax Rate/$100 $ Parking: 451 Spaces Transfer Fee 1%+app+legal 2014 Tax Assessment $15,646,470 Units/Acre: MIP 0.45% Quality A * Declines 1% every year 2 Mo Avg $ 232,016 COLLECTIONS $300,000 UNIT STATISTICS Jan 2014 $ 207,753 Feb 2014 $ 204,971 Mar 2014 $ 202,508 Apr 2014 $ 231,435 May 2014 $ 218,508 Jun 2014 $ 218,540 Jul 2014 $ 220,269 Aug 2014 $ 222,417 Sep 2014 $ 221,954 Oct 2014 $ 218,285 Nov 2014 $ 220,814 Dec 2014 $ 243,218 $250,000 $200,000 $150,000 $100,000 $50,000 $- 37% 6% 57% 1bed/1bath 2bed/2bath 3bed/2bath PLEASE DO NOT VISIT THE SITE WITHOUT AN APPOINTMENT MADE THROUGH THE BROKER. PROPERTY HIGHLIGHTS The Lofts at Crossroad Center Apartments, is a three story, garden-style, apartment community located in Waxahachie,Texas, south of Dallas. Construction on the asset began in 2011 and the property officially opened for leasing in June The asset features an array of modern amenities which include: a fitness center, resort style swimming pools and clubhouse area, a business center, garages and storage units. Apartment amenities include luxurious black appliances, large walk-in closets, faux wood flooring, ceramic tiles in the bathrooms, designer wood cabinets, crown molding, in-suite washers and dryers, private patios and balconies with storage closets and personal green/garden space. A recent site visit reveialed that the property appears to be very well built, with ample parking (surface, covered and garages) and with excellent landscaping and unit amenities. Waxahachie has many distribution facilities as the main economic generator. The project is next to the new Baylor Medical Facility, currently under construction, and this will result in a large additional supply of tenants! The debt was interest only until December Per the note, the loan is locked out until 01/15, then has an 8% prepayment penalty, declining 1% a year. Ideal for an A7 interest rate reduction, if the rates stay low, but not until 01/15. The opportunity exists to significantly lower the interest rate. A quote is being sought. Disclaimer: The information contained in this Memorandum reflects material from sources deemed to be reliable, including data such as operating statements, rent roll, etc. provided by the Owner. Notwithstanding, KET Enterprises Incorporated does not make any warranties about the information contained in this marketing package. Every prospective purchaser should verify the information and rely on his accountants or attorneys for legal and tax advice. This offer is As-Is, Where-Is. Answers to specific inquiries will have to be supplied by the Owner and are available upon request. Rates of return vary daily. No representations are made concerning environmental issues, if any.

5 UNIT MIX FEBRUARY 2015 Unit Mix Unit # Type No. Units Sq Ft Total SqFt Market Rent Total Rent Rent/SF Flat 1 Bed/1 Bath ,050 $890 $44,500 $1.20 Flat 1 Bed/1 Bath ,482 $1,015 $2,030 $1.37 Flat 1 Bed/1 Bath ,984 $860 $16,340 $1.17 Flat 1 Bed/1 Bath $985 $985 $1.34 Flat 1 Bed/1 Bath ,912 $925 $48,100 $1.15 Flat 1 Bed/1 Bath ,612 $1,050 $2,100 $1.30 Flat 2 Bed/2 Bath 28 1,028 28,784 $1,085 $30,380 $1.06 Flat 2 Bed/2 Bath 4 1,028 4,112 $1,210 $4,840 $1.18 Flat 2 Bed/2 Bath 20 1,079 21,580 $1,120 $22,400 $1.04 Flat 2 Bed/2 Bath 30 1,190 35,700 $1,185 $35,550 $1.00 Flat 3 Bed/2 Bath 12 1,228 14,736 $1,300 $15,600 $1.06 TOTALS AND AVERAGES ,688 $1,013 $222,825 $1.10 Total Units Average Sq. Ft. Total Sq. Feet Average Rent/Unit Total Rent Average Rent/ SF Apartment Features Community Features 7 Distinct Floor Plans (up to 1,228 Sq. Ft.) Resort Style Swimming Pool 1, 2 and 3 bedroom Units Complimentary Basic Cable All Electric Kitchens State of the Art Fitness Center Large Bedrooms with Natural Sunlight Minutes from Shopping and Restaurants Designer Wood Cabinets Theater Room Full Size Patios & Balconies with Views Abundant Green Space Ample Closet and Storage Space Part of a Master Planned Development Crown Molding Urban Style Design Ceiling Fans Easy Access to I-35E and Hwy 287 Full Size Washer/Dryer in Each Apartment Professional Management Team Spacious Floor Plans Short term Leases Available Walk-in Closets

6 PROPERTY LOCATION DIRECTIONS TO PROPERTY: From DFW International Airport, go south on E Airfield Dr toward E 28th St. Make a left onto Walnut Hill Ln. Turn right onto Block Dr. Make a right on Texas 161 Frontage Rd. Take the TX-161 S ramp and exit TX-183 E toward Dallas. Merge onto I- 35 E S. Exit US 287 and take the ramp south. Merge onto McNaughton St. Turn right onto Sam George Dr. Make a right onto John Arden Dr. The property is on the right.

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10 RENT COMPARABLES RENT COMPARABLES (February 2015 ALN Online) Property Name Yr Blt/Reno Occ #Units Sorted by Avg Rent/Unit Avg SF Avg Rent P/SF 1 Indian Creek 510 Indian Dr % $ Blue Lake Villas 155 Lakeside Dr % $ Bella Vita 380 Salon Rd % $1, Hunters Cove 1250 W Hwy % $1, Massey Place 819 Hibiscus % $1, Totals/Averages Comps % 147 1,021 $1, Lofts at Crossroad Center 411 Alliance Blvd % $1,013 $1.10 DFW Market Avgs 93% 614, $ LOFTS AT CROSSROAD CENTRE APARTMENTS 4

11 AREA INFORMATION STATE OF TEXAS ECONOMY Job growth, sales tax collections both from business and consumer purchases as well as automobile sales, signal that the Texas economy has emerged from the recent recession. Another indicator that the state s economy has been comparatively healthy was the U.S. Bureau of the Census report that Texas added more people (nearly 4.3 million) than any other state between the census counts of 2000 and Entering 2011, more than half the jobs shed by employers during Texas shorter recession have already been recovered as our economy recovers more quickly than the U.S. as a whole. Nationally, only 13.4 percent of recession-hit jobs had been recovered ending Texas and the nation returned to economic growth in 2010, with the nation increasing its GDP by 2.8 percent and Texas increasing its GSP by 3.4 percent. Jobs Texas December 2010 unemployment rate was 8.3 percent, up from 8.2 percent in November. Texas total nonfarm employment increased by 20,000 jobs from November to December. Between December 2009 and December 2010, Texas gained 230,800 jobs. The U.S. gained 36,000 total nonfarm jobs in January The U.S. unemployment rate was 9.0 percent in January 2011, a 0.4 percent decrease from December. The Texas unemployment rate has been at or below the national rate for 47 consecutive months. Housing Thus far, Texas has weathered the national real estate crunch without significant damage to property values. Sales and construction activity dropped to pre-2007 levels but began to shows signs of recovery in A total of 4,170 building permits for single-family homes were issued in December 2010, 887 fewer than a year ago. In the 12 months ending in December 2010, 62,980 permits were issued, 1 percent less than one year ago. The number of multi-family building permits issued rose from 989 in December 2009 to 1,200 in December During the 12 months ending in December 2010, 18,716 permits were issued, 12 percent more than one year ago. In December 2010, sales of existing single-family homes increased by 16 percent from the previous month, to a total of 15,752. December 2010 home sales were 3 percent lower than in December In Texas, the median price for existing single-family homes increased by 4.1 percent from December 2009 to December Texas experienced foreclosure filings in January Consumer Confidence Index U.S. consumer confidence increased by 14 percent from December 2010 to January 2011, rising to Consumer Confidence now stands 7 percent higher than one year ago. The Texas region s consumer confidence index increased from 69.5 in December 2010 to 90.8 in January 2011, and is now up 26 percent from its level one year ago. Oil and Natural Gas Natural gas and oil production tax collections combined are 70 percent higher for the first five months of fiscal year 2011 compared to the same period in By contrast, fiscal 2010 oil and natural gas production tax collections combined were 24 percent lower than collections in After reaching a 2008 summer high closing price of $ to a low of $33.98 during February 2009, crude oil futures reached a settled price of $86.73 on Feb. 10, Similarly, natural gas futures prices have followed a similar path reaching a summer 2008 high of $13.58 and then falling to a Sept. 3, 2009 low of $2.51. Prices recently settled at $3.99 on Feb. 10, Taxes Texas sales tax receipts for January 2011 were 10.4 percent higher than for January For fiscal 2010, state sales tax receipts were down 6.6 percent from fiscal Motor vehicle sales tax collections for January 2011 were 19.6 percent higher than for January Nationally, leases accounted for 28.1 percent of new vehicle sales in November 2010, an increase of 15.6 percent from November Source: Texas Ahead, February 11, Texas Comptroller's Office

12 AREA INFORMATION WAXAHACHIE In business, population and income, there s no doubt that Texas is on the rise. Texas experienced more high-paying job growth than the rest of the country over the last 13 years, according to new research from the Dallas Federal Reserve. The state has also been the top domestic immigration destination in the country since Businesses are coming to Texas in droves, hiring new employees and raising salaries for existing workers. Because of the migration and job growth, the Dallas-San Antonio- Austin economy now produces more than $700 billion in economic output per year, ranking among the biggest 25 economies in the world, according to an analysis from the Martin Prosperity Institute. Waxahachie is conveniently located at the crossroads of Interstate 35E and U.S. Highway 287, approximately 30 minutes south of Dallas. Over 80,000 vehicles travel through this intersection every day, making Waxahachie the ideal location for a variety of businesses and industries. Since it was founded in 1850, Waxahachie has benefited from its prime location. In the late nineteenth century, Waxahachie was founded on the prosperous cotton and cattle industries. These industries continued to succeed due to rail availability and the original highway intersection at the heart of the city. Waxahachie is still experiencing a healthy and robust rate of growth. In fact, the same transportation corridors where cotton barons traveled and the historic Shawnee cattle trail passed through, are where modern-day companies are enjoying success in the medical, service, manufacturing, retail and tourism industries. To compile this ranking, NerdWallet evaluated 126 cities, towns and census-designated places and examined the following variables: Population growth Employment growth Income growth Waxahachie s strong population and income growth helped the city rank among the top 20, NerdWallet analyst Maggie Clark said. The population in Waxahachie increased by 10.8% between 2009 and 2012, while incomes grew by 4.8% during the same period. March 25, 2014, NerdWallet, a consumer advocacy website, recently conducted a study to find the fastest growing cities in Texas and Waxahachie ranked among the top 20. Sousrce: NerdWallet.com, March 25, 2014 New Baylor Medical Facility, Waxahachie Completion Slated for Fall of 2014 The community s quality of life is second-to-none with a variety of residential options, excellent education opportunities, convenient shopping and dining, progressive medical care, and quick access to all the metropolitan amenities that the Dallas/Fort Worth Metroplex has to offer.

13 AREA INFORMATION Source: The City of Waxahachie - Prepared by the Economic Development Department Reprinted with Permission from The City of Waxahachie Ecnonmic Development Department

14 AREA INFORMATION Source: The City of Waxahachie - Prepared by the Economic Development Department Reprinted with Permission from The City of Waxahachie Ecnonmic Development Department

15 AREA INFORMATION Source: The City of Waxahachie - Prepared by the Economic Development Department Reprinted with Permission from The City of Waxahachie Ecnonmic Development Department

16 AREA INFORMATION Source: The City of Waxahachie - Prepared by the Economic Development Department Reprinted with Permission from The City of Waxahachie Ecnonmic Development Department

17 AREA INFORMATION Navarro College is a two-year accredited, state-supported, community college with four campuses in Corsicana, Mexia, Midlothian, and Waxahachie, Texas. Navarro has a long history of service to the community and is committed to creating a learning environment that is accessible, affordable, responsive, and innovative. The Waxahachie campus, under direction of Dr. Kenneth Martin, is located a 1600 John Arden Drive. Navarro College has experienced record growth and expansion, paving the way for future generations to learn and improve their lives. From 1998 to 2013 Navarro College has expereinced admission increases from 3,600 students to approximately 11,000 students. In July of 2013, the Waxahachie campus opened doors to a newly built 21,000 sq.ft building, consisting of 11 classrooms, a multipurpose room that will hold up to 105 students, a chemistry lab and a visual conferencing room. The facility also contains nine faculty offices. The campus purchased 50 acres of land from Chevron Phillips allowing expansion of an additional thirty five acres and the sale of 15 acres. The campus also has a new 7,000-squarefoot physical plant building, which is located directly behind the new classroom building. Navarro College Board of Trustee members believe that any growth in a community starts with a foundation of education.

18 AREA INFORMATION Founded as a Christian ministry of healing, Baylor Health Care System exists to serve all people through exemplary health care, education, research and community service. Scheduled to open in the Fall of 2014, at the intersection of I-35E and Highway 287, is the new Baylor Medical Center at Waxahachie. In the works is a plan to build an advanced medical center to care for the Ellis County community and surrounding Waxahachie areas. According to BaylorHealth.com, the new facility, which will be positioned on approxiamtely 52 acres, will feature expanded patient services in a variety of medical specialties, including women's services, labor and delivery, cardiovascular care, wound care and outpatient cancer services and accommodate 104 beds, in a 6-story hospital bed tower with future growth capabilities. The new campus will be constructed in accordance with Leadership in Energy and Environmental Design, or LEED, certification guidelines. Baylor Medical Center at Waxahachie is located east of the Lofts at Crossroads at City Centre', across Highway 287, and just like the subject property, it will reap benefits of visibility from two major traffic corridors and superior accessibility to visitors and patients. As the hospital embarks on its second century of service, it looks to continue its strong role in the community which has included providing more than $100 million in community benefit over the years. The new development will create community based jobs and spur economic growth.

19 EDUCATION (AGE 25+) BUSINESS INCOME RACE AND ETHNICITY HOUSEHOLDS POPULATION SUMMARY PROFILE Census, 2012 Estimates with 2017 Projections Calculated using Proportional Block Groups DEMOGRAPHICS 411 Alliance Blvd., Waxahachie, TX Mile Radius 3 Mile Radius 5 Mile Radius 2012 Estimated Population 5,651 16,723 24, Projected Population 6,286 18,542 27, Census Population 5,365 15,903 23, Census Population 5,058 14,351 19,797 30% 10% 48% Projected Annual Growth 2012 to % 2.2% 2.2% Historical Annual Growth 2000 to % 1.4% 2.1% 1% 11% 2012 Median Age White Black Asian Other Hispanic 2012 Estimated Households 2,003 5,800 8, Projected Households 2,231 6,460 9, Census Households 1,903 5,510 8, Census Households 1,803 4,881 6,783 Projected Annual Growth 2012 to % 2.3% 2.3% Historical Annual Growth 2000 to % 1.6% 2.4% 29.7% 2012 Estimated White 68.1% 71.3% 72.2% 2012 Estimated Black or African American 16.1% 14.4% 14.1% 2012 Estimated Asian or Pacific Islander 0.6% 0.6% 0.7% 2012 Estimated American Indian or Native Alaskan 0.8% 0.8% 0.8% 2012 Estimated Other Races 14.3% 12.9% 12.3% 70.3% 2012 Estimated Hispanic 29.7% 27.2% 25.5% Non-Hispanic Hispanic 2012 Estimated Average Household Income $64,274 $57,098 $57, Estimated Median Household Income $38,727 $44,681 $49, Estimated Per Capita Income $23,516 $21,567 $22, Estimated Elementary (Grade Level 0 to 8) 5.9% 5.3% 4.9% 2012 Estimated Some High School (Grade Level 9 to 11) 19.3% 15.5% 13.0% 2012 Estimated High School Graduate 31.8% 33.5% 33.7% 2012 Estimated Some College 19.3% 23.2% 24.3% 2012 Estimated Associates Degree Only 4.8% 4.1% 4.5% 2012 Estimated Bachelors Degree Only 12.0% 11.8% 12.9% 2012 Estimated Graduate Degree 6.8% 6.6% 6.7% 2012 Estimated Total Businesses , Estimated Total Employees 3,168 7,455 12, Estimated Employee Population per Business Estimated Residential Population per Business $65,000 $64,000 $63,000 $62,000 $61,000 $60,000 $59,000 $58,000 $57,000 $56,000 $55,000 $54,000 $64,274 Subject $57,953 Waxahachie

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22 A 268 UNIT CLASS "B-/C+" GARDEN APARTMENT COMMUNITY

23 EXCLUSIVELY PRESENTED BY KET ENTERPRISES INCORPORATED 4295 San Felipe, Suite 355 Houston, TX Tel: (713) Fax: (713) Disclaimer: The information contained in this Memorandum reflects material from sources deemed to be reliable, including data such as operating statements, rent rolls, etc. However, we (KET Enterprises Incorporated or any of the Owners or officers, directors, employees, agents or representatives of any such entities) have not verified its accuracy and make no guarantee or representation about it. It is submitted subject to the possibility of errors, omissions, change of rental or other conditions. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. We make no representations or warranties, expressed or implied, as to the validity, accuracy or completeness of the information provided or to be provided, and nothing herein shall be deemed to constitute a representation, warranty or promise by any such parties as to the future performance of the Property or any other matters set forth herein. You and your tax and legal advisors should verify the information and rely on his accountants or attorneys for legal and tax advice. Rates of return vary daily. No representations are made concerning environmental issues, if any.