OFFERING MEMORANDUM 1152 Ayala Drive, Sunnyvale, California

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2 Executive Summary Offering: ARA, a Newmark Company has been retained as the exclusive listing agent for the sale of 1152 Ayala Drive in Sunnyvale. The city has been ranked as number 1 of the top 10 cities in the U.S. to raise a family by Kiplinger.com and is home to the world s top companies. This 4-plex is located in a desirable West Sunnyvale neighborhood close to Mountain View border and has a desirable unit mix. The property features many recent upgrades and is an excellent opportunity to acquire a well maintained apartment building in the heart of Silicon Valley. The property can easily access many amenities such as Downtown Sunnyvale and Mountain View, CalTrain and Light Rail Stations, Washington Park, and South Mary, Cherry Chase and Cherry Orchard Shopping Centers. Please contact Joel Hopman at (415) / jhopman@aranewmark.com related to the investment. Investment Highlights True Pride of Ownership Property Several recent upgrades including: Copper plumbing throughout Updated electrical Remodeled laundry facilities Water heater Dual pane windows Private patios for downstairs units Updated kitchens and baths Unit Mix: (3) 2+1; (1) 1+1 Excellent curb appeal Location Highlights Core Sunnyvale location Close to major employers Apple, LinkedIn, Lockheed Martin, Microsoft, Juniper Networks, Motorola, Aruba, Amazon Sunnyvale Median Household Income of over $96K Sunnyvale Median Home Price of $1,278,500 Sunnyvale Median Rent of $2,954/month Convenient to public transportation Cal Train Station, VTA Light Rail, VTA Bus lines Walking distance to shopping, schools & parks Moments to Highways 101, 237 & 85, Central Expressway SUNNYVALE IS SILICON VALLEY S SECOND LARGEST CITY WITH ±150,000 RESIDENTS 2

3 Offering Summary Offering Details Address 1152 Ayala Drive Price $1,750,000 Units 4 Price/Unit $437,500 Rentable Square Feet 3,000 Price/Sq Ft $ Year Built 1964 Land Area (Sq Ft) 7,841 Current Cap Rate 2.50% Market Cap Rate 3.73% Current GRM Market GRM Operations Current Market Scheduled Gross Rent $77,400 $100,620 Vacancy 3.00% ($2,322) 4.00% ($4,025) Effective Gross Rent $75,078 $96,595 Other income $960 $960 Total Income $76,038 $97,555 Operating Expenses $10,092 $10,092 Non-Operating Expenses $22,109 $22,109 Total Expenses $32,201 $32,201 % Scheduled Gross Rent 41.60% 32.00% Expenses/Unit $8,050 $8,050 Expenses/Sq Ft $10.73 $10.73 Net Operating Income $43,837 $65,354 Type Unit Sq Ft Current Rent $/Sq Ft Market Rent $/Sq Ft $1,600 $2.06 $2,195 $ $1,850 $2.39 $2,195 $ $1,325 $2.16 $1,800 $ $1,675 $2.13 $2,195 $2.83 Total/Avg 4 2,950 $6,450 $2.19 $8,385 $2.84 3

4 Operations Statement Operations Current Market Scheduled Gross Rent $77,400 $100,620 Vacancy 3.00% ($2,322) 4.00% ($4,025) Effective Gross Rent $75,078 $96,595 Other income (Laundry) $960 $960 Total Income $76,038 $97,555 Repairs & Maintenance ($750/Unit) $3,000 $3,000 PG&E $2,484 $2,484 Water $1,800 $1,800 Garbage $1,848 $1,848 Landscaping ($80/mo.) $960 $960 Operating Expenses $10,092 $10,092 Real Estate Taxes 1.18% $20,650 $20,650 Special Assessments $259 $259 Insurance $1,200 $1,200 Non-Operating Expenses $22,109 $22,109 Total Expenses $32,201 $32,201 % Scheduled Gross Rent 41.60% 32.00% Expenses/Unit $8,050 $8,050 Expenses/Sq Ft $10.73 $10.73 Net Operating Income $43,837 $65,354 4

5 Property Overview Details Address County 1152 Ayala Drive Santa Clara APN County Use Multi-Family Attributes Units 4 Gross Square Feet 3,000 Average Unit Size (SF) 750 Land Area (SF) 7,841 Year Built 1964 Parking (4) Carports (4) Uncovered Construction Foundation Exterior Walls Roof Patio/Balcony Laundry Facilities Pool/Spa Concrete Perimeter Stucco Composite Shingle N/A Yes (Leased) N/A 5

6 Parcel Map 6

7 Location Map SUBJECT 7

8 Local Map and Amenities Mathilda Ave Central Expwy Evelyn Ave Cherry Orchard Shopping Center Mary Ave El Camino Real Downtown Sunnyvale Washington Ave Bernardo Ave Iowa Ave Cherry Chase Center 1152 Ayala Drive Acalanes Dr 8

9 Aerial Map SUBJECT 9

10 Sales Comparable Properties Comparable #1 * 657 Belladonna Court Price $1,750,000 Cap Rate (Current) 3.82% Units 4 Cap Rate (Market) 4.75% $/Unit $437,500 GRM (Current) SF 4,413 GRM (Market) $/SF $397 COE Pending Unit Mix (1) 3+2; (3) Comparable # Ayala Drive Price $1,750,000 Cap Rate (Current) 4.04% Units 4 Cap Rate (Market) 4.04% $/Unit $437,500 GRM (Current) SF 3,000 GRM (Market) $/SF $583 COE May-16 Unit Mix (3) 2+1; (1) 1+1 Comparable # Homestead Road Price $2,050,000 Cap Rate (Current) 3.68% Santa Clara, CA Units 4 Cap Rate (Market) 3.93% $/Unit $512,500 GRM (Current) Sq Ft 4,068 GRM (Market) $/Sq Ft $504 COE May-16 Unit Mix (2) 3+2; (2) 2+1 * Price reflects list, not final sales price. Property is contingent free significantly higher than list. 10

11 Sales Comparable Properties Comparable #4 873 Gallatin Drive Price $1,795,000 Cap Rate (Current) 1.91% Santa Clara, CA Units 4 Cap Rate (Market) 3.63% $/Unit $448,750 GRM (Current) Sq Ft 4,000 GRM (Market) $/Sq Ft $412 COE Dec-15 Unit Mix (1) 3+2 (2) 2+1.5; (1) 2+1 Comparable # Noranda Drive Price $1,688,000 Cap Rate (Current) 2.28% Units 4 Cap Rate (Market) 3.35% $/Unit $422,000 GRM (Current) Sq Ft 3,076 GRM (Market) $/Sq Ft $549 COE Oct-15 Unit Mix (1) 3+2; (2) 2+1.5, (1) 1+1 Comparable #6 670 Azara Place Price $1,780,000 Cap Rate (Current) 2.52% Units 4 Cap Rate (Market) 3.80% $/Unit $445,000 GRM (Current) Sq Ft 3,768 GRM (Market) $/Sq Ft $472 COE Aug-15 Unit Mix (1) 3+2.5; (1) 3+2; (1) 2+1; (1)

12 Sales Comparable Properties Summary Properties Price Units $/Unit SF $/SF Cap Rate GRM COE S Ayala Drive 657 Belladonna Court 1136 Ayala Drive Homestead Road Santa Clara, CA 873 Gallatin Drive Santa Clara, CA 1764 Noranda Drive 670 Azara Place $1,750,000 4 $437,500 3,000 $ % N/A $1,750,000 4 $437,500 4,413 $ % Pending $1,750,000 4 $437,500 3,000 $ % May-16 $2,050,000 4 $512,500 4,068 $ % May-16 $1,795,000 4 $448,750 4,000 $ % Dec-15 $1,688,000 4 $422,000 3,076 $ % Oct-15 $1,780,000 4 $445,000 3,768 $ % Aug-15 12

13 Sales Comparable Map & Legend Properties S Ayala Drive 657 Belladonna Court 1136 Ayala Drive Homestead Road Santa Clara, CA 873 Gallatin Drive Santa Clara, CA 1764 Noranda Drive 670 Azara Place SUBJECT