LIHTC Advisors. Whispering Pines Apartments EXCLUSIVE OFFERING. 40 Units 2784 Kelly Lake Road Decatur, GA 30032

Transcription

1 LIHTC Advisors Whispering Pines Apartments 40 Units 2784 Kelly Lake Road Decatur, GA EXCLUSIVE OFFERING

2 LIHTC Advisors W. Explorer Drive Suite 200 Boise, ID CONFIDENTIALITY & DISCLAIMER Jeff Irish (phone) (direct) (fax) Jordan Skyles (phone) (direct) (fax) John Nicolas (phone) (direct) (fax) The information contained in this package is confidential and is intended for review solely by the person receiving it directly from LIHTC Advisors. It should not be copied, distributed, nor made available to any person without the written consent from LIHTC Advisors. The information in this package has been obtained from sources we believe reliable. However, LIHTC Advisors has not verified and will not verify, any of the information contained herein and makes no guarantee, warranty, or representation about it. It is the sole responsibility of any interested parties to independently confirm the accuracy and completeness of the information provided herein. All prospective clients must conduct their own due diligence and take appropriate measures to verify all information. In Cooperation with: Jeff Dilbone Investment Property Advisors (phone) (direct) 2 LIHTC ADVISORS WHISPERING PINES 40 UNITS

3 Whispering Pines Apartments 40 Units 2784 Kelly Lake Road Decatur, GA Table of Contents PROPERTY OVERVIEW Description Area Highlights Market Highlights Summary Area Maps FINANCIAL ANALYSIS Executive Summary Income & Expenses Cash Flow Summary Unit Mix Income & Rent Limits Historical AMI, MAX Rent, & FMR COMPARABLE PROPERTIES Rent Comparables Map Rental & Occupancy Statistics Rent Comparable Details DEMOGRAPHIC ANALYSIS Demographic Analysis 3 LIHTC ADVISORS WHISPERING PINES 40 UNITS

4 Property Overview HIGHLIGHTS Located Close to Shopping, Restaurants, and Area Amenities Metro Atlanta has the Eighth Largest Economy in the Country and the Third Highest Concentration of Fortune 500 Companies High Historical Occupancy with a 2016 Vacancy Rate Below 4% Located Just 6 Miles from Downtown Atlanta, GA 4 LIHTC ADVISORS WHISPERING PINES 40 UNITS

5 Property Description Whispering Pines is a 40-unit LIHTC property located in Decatur, GA. The property offers a mix of spacious one and two bedroom floor plans to income qualifying residents. The property is conveniently located close to shopping, restaurants, entertainment, and area amenities. Whispering Pines was built in 1965 and rehabbed and placed in service in 2006 under the Section 42 Low-Income Housing Tax Credit (LIHTC) program. There is an existing regulatory agreement in place which requires 31 units to be rented to income qualifying residents earning no more than 30%, 50%, and 60% of Area Medium Income (AMI) limits, which are provided by the Georgia Housing and Finance Authority. The remaining units are to be rented at market rate. The property is still within its initial tax credit compliance period. Please see the Property Summary page and Unit Mix page for further details. A qualified purchaser can be a nonprofit or for-profit entity that agrees to maintain the affordability restrictions. Residents benefit from on-site laundry, a covered outdoor pavilion, business center, fitness center, playground, and an open playing field. Unit amenities include an open floor plan with full appliance package, W/D connections, as well as central air and heat. COMMUNITY AMENITIES Business Center Covered Pavilion Fitness Center On-Site Laundry Open Playing Field Playground UNIT AMENITIES Full Appliance Package W/D Connections Central Air & Heat 5 LIHTC ADVISORS WHISPERING PINES 40 UNITS

6 Area Highlights Decatur is a city in, and the county seat of DeKalb County, Georgia. With a population of 20,148 the municipality is sometimes assumed to be larger since multiple zip codes in the county bear the Decatur name. Decatur is located on the northeastern and southeastern sides of Atlanta, GA and is only 6 miles from downtown Atlanta. Decatur has a thriving art and festival scene with events running all year long. The Decatur Arts Alliance has worked with the city to install public art around the city, provide gallery space, and supporting arts education throughout the city. Some annual festivals in Decatur include the Decatur Beach Party, concerts on the square, art walks, parades, runs, and races. Sporting events are available in nearby Atlanta at venues that are accessible from Decatur without having to enter the heart of the city. Professional sports include teams in the MLB, NBA, and NFL. The Atlanta Motor Speedway, located 30 miles south of downtown Atlanta, is one of the largest and oldest in the country. It hosts two NASCAR Busch and Nextel Cup races each year. Metro Atlanta is the most populous metro area in the US state of Georgia and the ninth-largest metropolitan statistical area (MSA) in the United States. Its economic, cultural and demographic center is Atlanta, and it had a 2015 estimated population of 5.7 million people according to the U.S. Census Bureau. With a GDP of $304 billion, the Metro Atlanta economy is the eighth-largest in the country and 17th-largest in the world. Corporate operations play a major role in the economy, as the city claims the country s third-largest concentration of Fortune 500 companies, and hosts the global headquarters of corporations such as The Coca- Cola Company, The Home Depot, Delta Air Lines, AT&T Mobility, Chick-fil-A, and UPS. NEIGHBORHOOD AMENITIES Kelly Lake Elementary School (0.5 miles) The Gallery at South DeKalb (0.9 miles) Flat Shoals Elementary School (1.5 miles) Georgia Regional Hospital (1.9 miles) LOCATION HIGHLIGHTS Population: 20,148 6 miles from downtown Atlanta, GA TOP EMPLOYERS (NO. EMPLOYEES) DeKalb County Government (1,200) Emory University Health Clinic (600) Decatur Board of Education (489) Agnes Scott College (290) DeVry (290) City of Decatur (200) 6 LIHTC ADVISORS WHISPERING PINES 40 UNITS

7 Apartment Market Highlights 12 month Deliveries in Units 12 month Net Absorption Vacancy Rate 12 month Rent Growth 9,703 7, % 3.4% OVERVIEW The current vacancy rate and rent growth figures are on decidedly better footing than market conditions in , the last time this many units were delivered in consecutive years. Another reason to be optimistic about the latest figures is the fact that a significant number of older properties recently started renovations, inflating the current vacancy, and when ready for lease, these rehabbed units will target a different renter from the new 4 & 5 Star supply, limiting competitive overlap. Further, job creation and household growth in Atlanta remain above the national average and are projected to be among the best in the country through Finally, the home ownership rate is decidedly down compared to its historic average, increasing demand for rental units compared to the previous cycle. So while the days of 6-8% rent growth may be past, the metro is in sound shape as a whole. VACANCY Vacancies have compressed and remained between 7-8% for nearly three and a half years while building steadily ramped up. At the beginning of the cycle, the absorption rate at new deliveries averaged units per month, with many projects hitting a monthly rate of move-ins. Following the surge of apartments in 2015, this rate declined to 22 units per month and minor concessions began to show up, but fundamentals were considered excellent (including record rent growth). In 2016, new deliveries witnessed slightly slower absorption of units per month, but concessions steadily increased through the year and averaged about one month free in Q Deliveries in the first part of 2017 are seeing sightly lower absorption closer to 16 units per month, but similar concessions. This slowdown is not considered out of the ordinary for a metro that has taken a regular delivery of 0.5% of inventory every quarter since Q3 2014, but does underline issues for constructionheavy submarkets like Buckhead and Downtown/Midtown that are already experiencing volatility in rent growth and vacancy. RENT Rent growth fell for the sixth consecutive quarter through Q1 2017, but remains close to four times the historical average. In a construction-heavy metro like Atlanta, that continued growth is a good indicator of the demand present here. The current rent gains are now being driven by 3 Star and older 4 Star assets, as competition continues to expand among new deliveries offering concessions. Projects in outlying submarkets are also experiencing stronger-than-average rent growth simply because they still represent value for most renters, partially because of relatively limited amounts of new construction outside of the urban core. In basic terms, an overall housing shortage still exists in the Atlanta metro for renters and homeowners alike, pushing housing costs across tenure lines. SOURCE: CoStar- August LIHTC ADVISORS WHISPERING PINES 40 UNITS

8 Apartment Market Highlights SALES Investment in Atlanta has increased steadily since bottoming out in 2009, and 2016 did not disappoint. The sustained performance of multifamily in Atlanta has attracted a steadily growing amount of investment this cycle, with 2016 clearly setting the high-water mark at $8.3 billion. Cap rates remained near 5% for a second consecutive year. Volume through the first half of 2017 is well behind the pace needed to replicate 2016 s figures; however, pricing has continued to edge up. ANNUAL JOB GROWTH Atlanta s economy is producing a lot of new jobs. As a result of its above-average recovery, Atlanta has nearly 200,000 (7.6%) more jobs through 2016 than it did at the height of the last cycle. And figures from the BLS show Atlanta remains out in front of other major metros in regards to its growth rate in the first half of 2017, adding 80,000 net jobs y-o-y through May One of the biggest drivers of growth has been white-collar employment, especially tech, IT, and R&D positions, with major recent job announcements that include Comcast s new innovation lab underway in SunTrust Park and a strong presence from the IT operations of GM, Microsoft, and Verizon in North Fulton. More impressively, the growth of tech jobs in Midtown is expected to continue to drive demand for high-end housing, particularly near Tech Square. During the recovery, Atlanta s concentration of high-tech jobs has increased from about 10% above the US average to more than 20%. The education and health services sector has also fared well and will contribute significantly to economic expansion over the forecast. Emory University Hospital is underway with a new 450,000 SF tower on its Clifton Campus that will complete in Although some blue-collar sectors such as construction (especially housingrelated) and manufacturing are still below prerecession levels, warehouse and distribution employment has bounced back as large companies like Kroger, Smucker s, and Shaw Industries have expanded their logistics operations presence here. SOURCE: CoStar- August LIHTC ADVISORS WHISPERING PINES 40 UNITS

9 Property Summary NAME & LOCATION Property Name Whispering Pines Apartments Property Address 2784 Kelly Lake Road Decatur, GA SECTION 42 LIHTC RESTRICTIONS Placed in Service 2006 End of Initial Compliance Period 12/31/2020 End of Extended Use Period 12/31/2035 SITE INFORMATION Assessor s Parcel Number Number of Units 40 Number of Buildings 8 (7 apartment buildings & 1 office building) Number of Stories 2 Rentable Square Feet 36,000 Year Built 1965 Rehabbed 2006 Lot Size 3.48 Acres Density Units/Acre Type of Ownership Fee Simple Landscaping Mature Landscaping, Trees, and Shrubs Topography Relatively Flat UTILITIES Water City of Atlanta Electric Georgia Power Co. Gas Atlanta Gas Light Co. CONSTRUCTION Exterior Brick Roof Asphalt Shingles # OF UNITS RENTABLE SF PLACED IN SERVICE LOT SIZE 40 36, Acres 9 LIHTC ADVISORS WHISPERING PINES 40 UNITS

10 Aerial Map 10 LIHTC ADVISORS WHISPERING PINES 40 UNITS

11 Local Map Whispering Pines A CVS (0.2 miles) B C D Wendy s, Popeye s, TA New Orleans Seafood (0.3 miles) Kelly Lake Elementary School (0.5 miles) Rainbow Village Shopping Center: Fresh Valu Foods, Family Dollar, Chapel Beauty, Church s Chicken (0.7 miles) C A B H E The Gallery at South DeKalb: Macy s, Foot Locker, Satellite Cinemas, Hollywood Beauty Supply, Champs Sports (0.9 miles) D F G H Big Lots (0.9 miles) Flat Shoals Elementary School (1.5 miles) Columbia High School (1.5 miles) G E F J I Georgia Regional Hospital (1.9 miles) J Exchange Recreation Center (2.2 miles) K Flat Shoals Library (2.3 miles) I K 11 LIHTC ADVISORS WHISPERING PINES 40 UNITS

12 Local Map WHISPERING PINES APARTMENTS Columbia High School Rainbow Village Shopping Center The Gallery at South Dekalb Porter Sanford III Performing Arts & Community Center 12 LIHTC ADVISORS WHISPERING PINES 40 UNITS

13 Regional Map Atlanta, GA (6 miles) Brookhaven, GA (8 miles) Sandy Springs, GA (16 miles) Marietta, GA (26 miles) Johns Creek, GA (24 miles) McDonough, GA (30 miles) 13 LIHTC ADVISORS WHISPERING PINES 40 UNITS

14 Financial Analysis LIST PRICE PRICE/UNIT PRICE/SF PROFORMA NOI PROFORMA NOI/UNIT PROFORMA CAP RATE $1,150,000 $28,750 $31.94 $80,476 $2, % 14 LIHTC ADVISORS WHISPERING PINES 40 UNITS

15 Executive Summary PROPERTY INFORMATION Name Whispering Pines Address 2784 Kelly Lake Road City, State, Zip Decatur, GA County DeKalb County Year Built 1965 Placed In Service 2006 End of Initial Tax Credit Compliance Period End of LIHTC Restrictions Qualified Contract Eligible December 31, 2020 December 31, 2035 No Total Number of Units 40 Net Rentable Square Feet 36,000 SF FINANCIAL SUMMARY PRICING FIGURES - WITH PROPOSED NEW FINANCING LIST PRICE $1,150,000 Price per Unit $28,750 Price per SF $31.94 PROFORMA 10-Year All Cash IRR%* 7.91% PROFORMA 10-Year Leveraged Cash IRR%* 13.85% Closing Cost $11,500 Capital Expense $60,000 Total Acquisition Cost $1,221,500 * IRR Analysis assumes 1.00% in Closing Costs, $1,500 per unit in Capital Expense, 7.25% exit cap, with a 5.00% cost of sale. 15 LIHTC ADVISORS WHISPERING PINES 40 UNITS

16 Executive Summary FINANCING PROPOSED NEW FINANCING Program Conventional Loan to Value % 75.00% Interest Rate 4.40% Interest Only Period (Months) 0 Amortization Period (Years) 30 Total Acquisition Cost $1,221,500 Loan Amount $862,500 Loan 1.00% $8,625 Down Payment $367,625 Annual Debt Service - P&I $51,829 Year 1 PROFORMA Debt Coverage Ratio 1.55 VITAL DATA PROFORMA CAP Rate 7.00% NOI $80,476 Year 1 Debt Service $51,829 Net Cash Flow After Debt Service $28,647 Cash on Cash % 7.79% 16 LIHTC ADVISORS WHISPERING PINES 40 UNITS

17 Income & Expenses OPERATIONAL ANALYSIS YE 2016 PER UNIT T12 June'17 PER UNIT PROFORMA PER UNIT INCOME Gross Potential Rent $298,679 $0.69 $306,367 $0.71 $255,550 $0.59 Subsidy Income $0 $0.00 $0 $0.00 $63,133 $0.15 Gain (Loss) to Lease 0.00% $0 $0 0.00% $0 $0 0.00% $0 $0 POTENTIAL RENTAL INCOME $298,679 $7,467 $306,367 $7,659 $318,683 $7,967 (1) % Increase over Prior Year 2.57% 4.02% Economic Loss Vacancy Loss 3.38% ($10,094) ($252) 2.60% ($7,951) ($199) 4.00% ($12,747) ($319) (2) Bad Debt 4.90% ($14,633) ($366) 4.44% ($13,603) ($340) 3.00% ($9,560) ($239) Concessions 0.28% ($830) ($21) 0.31% ($948) ($24) 0.00% $0 $0 Total Economic Loss 8.56% ($25,557) ($639) 7.34% ($22,502) ($563) 7.00% ($22,308) ($558) NET RENTAL INCOME $273,122 $6,828 $283,865 $7,097 $296,375 $7,409 Other Income Forfeited Security Deposits/Lease Termination $8,710 $218 $9,004 $225 $9,229 $231 Late Charges $3,200 $80 $4,500 $113 $4,613 $115 Misc. Other Income $1,906 $48 $1,886 $47 $1,933 $48 Total Other Income $13,816 $345 $15,390 $385 $15,775 $394 EFFECTIVE GROSS INCOME $286,938 $7,173 $299,255 $7,481 $312,150 $7,804 EXPENSES FIXED OPERATIONAL EXPENSE Total Real Estate Property Taxes 6% $15,958 $399 5% $15,779 $394 6% $19,667 $492 (3) Total Property Insurance Expense 4% $12,019 $300 4% $12,019 $300 4% $12,319 $308 Total Property Utility Expense 19% $55,365 $1,384 20% $58,759 $1,469 19% $60,228 $1,506 TOTAL FIXED OPERATIONAL EXP 29% $83,342 $2,084 29% $86,557 $2,164 30% $92,215 $2,305 VARIABLE OPERATIONAL EXPENSE Total Maint. Contract Services 6% $16,588 $415 6% $19,289 $482 5% $16,588 $415 (4) Total Repairs & Maintenance 8% $21,991 $550 7% $22,086 $552 7% $22,639 $566 Total Administrative Expenses 5% $15,691 $392 6% $19,156 $479 4% $11,835 $296 (5) Total Leasing & Marketing 2% $6,753 $169 2% $6,980 $175 1% $4,000 $100 (6) Total Payroll and Salary Expenses 17% $49,291 $1,232 21% $61,466 $1,537 16% $49,291 $1,232 (7) Property Management Fee 4.92% $14,125 $ % $14,867 $ % $15,608 $390 Non-Profit Fee 2.61% $7,500 $ % $7,500 $ % $7,500 $188 (8) TOTAL VARIABLE OPERATIONAL EXP 46% $131,939 $3,298 51% $151,344 $3,784 41% $127,460 $3,186 TOTAL FIXED & VARIABLE EXPENSES 75% $215,281 $5,382 79% $237,901 $5,948 70% $219,674 $5,492 Reserves & Replacements $12,000 $300 $12,000 $300 $12,000 $300 TOTAL OPERATING EXPENSES 79% $227,281 $5,682 84% $249,901 $6,248 74% $231,674 $5,792 NET OPERATING INCOME $59,657 $1,491 $49,354 $1,234 $80,476 $2, LIHTC ADVISORS WHISPERING PINES 40 UNITS

18 Comments to Income & Expenses NOTES TO PROFORMA (1) (2) (3) (4) (5) (6) (7) (8) Potential Rental Income: 8/3/2017 Rent Roll annualized and increased by 1.0%. Vacancy: Based on the rent roll from 8/3/17, occupancy is 97.5%. Analysis uses a 4% vacancy factor going forward. Real Estate Taxes: See notes below. Contract Services: Analysis assumes a return to the expense seen in Administrative: Analysis assumes the removal of all Travel, Conference and Corporate Chargeback expenses. Leasing & Marketing: Analysis assumes a reduction based on the high occupancy experienced at the property. Payroll & Salary: Analysis assumes a return to the expense seen in Non-Profit Fee: The owner is currently paying the non-profit GP an annual fee of $7,500 which is paid in quarterly installments. Analysis assumes new owner will continue paying this fee to meet the non-profit controlling interest requirement. REAL ESTATE TAX ANALYSIS Parcel #: Proforma Total Market Value $1,019,240 $1,049,817 Exemptions $0 $0 Value after Exemptions $1,019,240 $1,049,817 Assessment Ratio 40.00% 40.00% Assessed Value $407,696 $419,927 Tax Rate 4.419% 4.419% Ad Valorem Taxes $18,016 $18,557 Assessments $1,110 $1,110 Total Taxes Due $19,126 $19,667 Notes Per the County Assessor's, taxes based on 40% of the Market Value. Analysis assumes that real estate taxes will be based on the 2017 tax expense for the year, but increased by 3%. 18 LIHTC ADVISORS WHISPERING PINES 40 UNITS

19 Cash Flow PROPERTY CASH FLOW ANALYSIS - ASSUMPTIONS YEAR 1 OPERATIONS BASED ON Proforma Gross Potential Rent Growth NA 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% 2.25% Other Income Growth NA 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% Loss to Lease 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Vacancy 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Bad Debt 3.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Concessions 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Property Taxes NA 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Insurance NA 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% Utilities NA 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% Property Management Fee 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Other Expenses NA 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% Replacement Reserves NA 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% CASH FLOW SUMMARY Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 INCOME Gross Potential Rent $318,683 $325,854 $333,185 $340,682 $348,347 $356,185 $364,199 $372,394 $380,773 $389,340 Gain (Loss) to Lease $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 POTENTIAL RENTAL INCOME $318,683 $325,854 $333,185 $340,682 $348,347 $356,185 $364,199 $372,394 $380,773 $389,340 Economic Operational Loss Vacancy Loss ($12,747) ($13,034) ($13,327) ($13,627) ($13,934) ($14,247) ($14,568) ($14,896) ($15,231) ($15,574) Bad Debt ($9,560) ($6,517) ($6,664) ($6,814) ($6,967) ($7,124) ($7,284) ($7,448) ($7,615) ($7,787) Concessions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Operational Loss ($22,308) ($19,551) ($19,991) ($20,441) ($20,901) ($21,371) ($21,852) ($22,344) ($22,846) ($23,360) NET RENTAL INCOME $296,375 $306,302 $313,194 $320,241 $327,447 $334,814 $342,347 $350,050 $357,926 $365,980 Total Other Income $15,775 $16,169 $16,573 $16,988 $17,412 $17,848 $18,294 $18,751 $19,220 $19,700 EFFECTIVE GROSS INCOME $312,150 $322,471 $329,767 $337,229 $344,859 $352,662 $360,641 $368,801 $377,146 $385,680 OPERATIONAL EXPENSES FIXED OPERATIONAL EXPENSE Total Real Estate Property Taxes $19,667 $20,257 $20,865 $21,491 $22,135 $22,799 $23,483 $24,188 $24,914 $25,661 Total Property Insurance Expense $12,319 $12,627 $12,943 $13,267 $13,598 $13,938 $14,287 $14,644 $15,010 $15,385 Total Property Utility Expense $60,228 $61,734 $63,277 $64,859 $66,481 $68,143 $69,846 $71,592 $73,382 $75,217 TOTAL FIXED OPERATIONAL EXP $92,215 $94,618 $97,085 $99,616 $102,214 $104,880 $107,616 $110,424 $113,306 $116,263 VARIABLE OPERATIONAL EXPENSE Total Maint. Contract Services $16,588 $17,003 $17,428 $17,864 $18,310 $18,768 $19,237 $19,718 $20,211 $20,717 Total Repairs & Maintenance $22,639 $23,205 $23,785 $24,379 $24,989 $25,613 $26,254 $26,910 $27,583 $28,272 Total Administrative Expenses $11,835 $12,131 $12,434 $12,745 $13,063 $13,390 $13,725 $14,068 $14,420 $14,780 Total Leasing & Marketing $4,000 $4,100 $4,203 $4,308 $4,415 $4,526 $4,639 $4,755 $4,874 $4,995 Total Payroll and Salary Expenses $49,291 $50,523 $51,786 $53,081 $54,408 $55,768 $57,162 $58,591 $60,056 $61,557 Property Management Fee $15,608 $16,124 $16,488 $16,861 $17,243 $17,633 $18,032 $18,440 $18,857 $19,284 Non-Profit Fee $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 TOTAL VARIABLE OPERATIONAL EXP $127,460 $130,585 $133,624 $136,737 $139,928 $143,198 $146,549 $149,982 $153,500 $157,106 TOTAL FIXED & VARIABLE EXPENSE $219,674 $225,203 $230,708 $236,354 $242,143 $248,078 $254,165 $260,406 $266,806 $273,369 Replacement Reserves $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 TOTAL OPERATING EXPENSES $231,674 $237,203 $242,708 $248,354 $254,143 $260,078 $266,165 $272,406 $278,806 $285,369 PROPERTY NET OPERATING INCOME $80,476 $85,269 $87,059 $88,875 $90,716 $92,583 $94,476 $96,395 $98,340 $100,311 1ST MTG DEBT SERVICE EXPENSES First Mortgage Interest $37,667 $37,031 $36,366 $35,672 $34,947 $34,189 $33,397 $32,569 $31,705 $30,801 First Mortgage Principal $14,162 $14,798 $15,462 $16,157 $16,882 $17,640 $18,432 $19,260 $20,124 $21,028 TOTAL 1ST MTG DEBT SERVICE $51,829 $51,829 $51,829 $51,829 $51,829 $51,829 $51,829 $51,829 $51,829 $51,829 CASH FLOW AFTER DEBT SERVICE $28,647 $33,440 $35,230 $37,046 $38,887 $40,754 $42,647 $44,566 $46,511 $48,483 DEBT SERVICE COVERAGE RATIO INDICATED CAPITALIZATION RATE 7.00% 7.41% 7.57% 7.73% 7.89% 8.05% 8.22% 8.38% 8.55% 8.72% 19 LIHTC ADVISORS WHISPERING PINES 40 UNITS

20 Unit Mix UNIT TYPE SET-ASIDE NUMBER OF UNITS UNIT SIZE ASKING RENT ASKING RENT PSF MAX TC RENT CURRENT UA MAX NET TC RENT 1 BD 1 BTH 30% $324 $0.46 $416 $92 $324 1 BD 1 BTH 50% $601 $0.86 $693 $92 $601 1 BD 1 BTH 60% $650 $0.93 $832 $92 $740 1 BD 1 BTH MARKET $700 $1.00 N/A N/A N/A 1 BD UNIT TOTAL 8 5,600 $4,728 $4,852 $4,208 1 BD UNIT AVG 700 $591 $0.84 $693 $601 2 BD 1.5 BTH 30% $389 $0.41 $499 $110 $389 2 BD 1.5 BTH 50% $722 $0.76 $832 $110 $722 2 BD 1.5 BTH 60% $775 $0.82 $999 $110 $889 2 BD 1.5 BTH MARKET $889 $0.94 N/A N/A N/A 2 BD UNIT TOTAL 32 30,400 $23,267 $19,137 $16,497 2 BD UNIT AVG 950 $727 $0.77 $797 $687 TOTAL 40 36,000 $27,995 $23,989 $20,705 AVERAGE 900 $700 $0.78 $960 $828 * The unit mix above was based on 8/3/2017 Rent Roll. AFFORDABILITY RESTRICTIONS LIHTC Regulatory Agreement: 5 units at 30% AMI, 21 units at 50% AMI, 5 units at 60% AMI and the remaining 9 units are unrestricted market rate units, with restrictions running through December Throughout the Compliance Period, a qualified nonprofit organization shall hold a controlling interest in the Project and five on-going supportive services designed for the physical/social needs of the tenants must be provided. 20 LIHTC ADVISORS WHISPERING PINES 40 UNITS

21 DeKalb County Effective Year: 2017 Area Median Income: $69,700 Whispering Pines is a Section 42 LIHTC property which means that federal tax credits were given to help finance the property. The property currently is required to hold the maximum rent charged at or below a level considered appropriate for the households that have incomes at or below 30%, 50%, and 60% of the local Area Median Income (AMI) for the county. Tax Credit Property Income Limits INCOME 30% 50% 60% 1 Person $15,540 $25,900 $31,080 2 Person $17,760 $29,600 $35,520 3 Person $19,980 $33,300 $39,960 4 Person $22,170 $36,950 $44,340 5 Person $23,970 $39,950 $47,940 6 Person $25,740 $42,900 $51,480 7 Person $27,510 $45,850 $55,020 Tax Credit Maximum Allowable Rents Set Aside Unit Type # of Units Max Rent UA Max Net Rent 30% 1 BD 1 $416 $92 $324 50% 1 BD 4 $693 $92 $601 60% 1 BD 2 $832 $92 $740 30% 2 BD 4 $499 $110 $389 50% 2 BD 17 $832 $110 $722 60% 2 BD 3 $999 $110 $889 Unit Breakdown By Unit Type 20% 80% 1 BD 2 BD $800 $700 $600 $500 $400 $300 $200 $100 $0 Asking Rents to Net Max Tax Credit Rents $727 $687 $591 $601 1 BD 2 BD Asking Rent Net Max Rent 21 LIHTC ADVISORS WHISPERING PINES 40 UNITS

22 AMI Growth Rate Year AMI % Change 2007 $67, $69, % 2009 $71, % 2010 $71, % 2011 $68,300 (4.87%) 2012 $69, % 2013 $66,300 (4.33%) 2014 $64,400 (2.87%) 2015 $68, % 2016 $67,500 (1.17%) 2017 $69, % $74,000 $72,000 $70,000 $68,000 $66,000 $64,000 $62, *The high watermark year is 2010 at $71,800 5 Yr Avg 0.19% 10 Yr Avg 0.44% Max Allowable LIHTC Rent Growth- 2BD/ 60% Year Rent % Change 2007 $ $ % 2009 $ % 2010 $ % 2011 $ % 2012 $ % 2013 $ % 2014 $ % 2015 $ % 2016 $ % 2017 $ % $1,010 $1,000 $990 $980 $970 $960 $950 $ Yr Avg 0.00% 10 Yr Avg 0.39% SOURCE: novoco.com 22 LIHTC ADVISORS WHISPERING PINES 40 UNITS

23 FMR Averages Year FMR Avg. % Change 2007 $ $ % 2009 $ % 2010 $ % 2011 $837 (3.41%) 2012 $800 (4.42%) 2013 $ % 2014 $ % 2015 $ % 2016 $ % 2017 $ % $950 $900 $850 $800 $750 $ Yr Avg 2.95% 10 Yr Avg 2.31% Fair Market Rents Year 1 BD 2 BD 2007 $700 $ $741 $ $789 $ $820 $ $792 $ $757 $ $737 $ $756 $ $773 $ $820 $ $858 $990 SOURCE: novoco.com 23 LIHTC ADVISORS WHISPERING PINES 40 UNITS

24 Rent Comparables WHISPERING PINES OCCUPANCY COMPARABLES AVERAGE OCCUPANCY WHISPERING PINES RENT/SF COMPARABLES AVERAGE RENT/SF 98% 98% $0.73 $ LIHTC ADVISORS WHISPERING PINES 40 UNITS

25 Rent Comparables Map A C D E B Whispering Pines B Thornberry Apts. D Magnolia Circle Apts. A Park 35 Apts. C Columbia Mill Apts. E Rainbow Forest Apts. 25 LIHTC ADVISORS WHISPERING PINES 40 UNITS

26 Occupancy & Rent per SF Occupancy- 98% Average 100% 98% 96% 94% 92% 90% 88% 86% 84% 82% 80% * A B C D E Rent Per SF- $0.91 Average $1.10 $1.05 $1.00 $0.95 $0.90 $0.85 $0.80 $0.75 $0.70 $0.65 $0.60 * A B C D E Whispering Pines B Thornberry Apts. D Magnolia Circle Apts. A Park 35 Apts. C Columbia Mill Apts. E Rainbow Forest Apts. 26 LIHTC ADVISORS WHISPERING PINES 40 UNITS

27 Rent Comparables WHISPERING PINES 40 UNITS OCCUPANCY: 98% YEAR BUILT: 1965 REHABBED: Kelly Lake Road Decatur, GA Unit Type # of Units Rent SF Rent Per SF 1BD 1BTH- 30% 1 $ $0.46 1BD 1BTH- 50% 4 $ $0.86 1BD 1BTH- 60% 2 $ $0.93 1BD 1BTH- MARKET 1 $ $1.00 2BD 2BTH- 30% 4 $ $0.41 2BD 1BTH- 50% 17 $ $0.76 2BD 1BTH- 60% 3 $ $0.82 2BD 1BTH- MARKET 8 $ $0.94 TOTALS/AVG. 40 $ $0.73 *Actual Rent per SF is $0.73 from the 8/3/2017 Rent Roll A PARK UNITS OCCUPANCY: 96% YEAR BUILT: 2000 Unit Type # of Units Rent SF Rent Per SF 1BD 1BTH 40 $ $1.05 2BD 1BTH 224 $ $0.90 3BD 1BTH 32 $934 1,260 $0.74 4BD 2BTH 8 $1,019 1,380 $0.74 TOTALS/AVG. 304 $ $ Robins Landing Way Decatur, GA *Tenant pays electric, sewer, & trash utilities Distance to Subject: 2.5 miles 27 LIHTC ADVISORS WHISPERING PINES 40 UNITS

28 Rent Comparables B THORNBERRY 280 UNITS OCCUPANCY: 94% YEAR BUILT: 1972 REHABBED: 1997 Unit Type # of Units Rent SF Rent Per SF 1BD 1BTH 144 $ $1.09 2BD 1BTH 48 $ $1.05 2BD 2BTH 16 $ $1.05 3BD 2BTH 72 $ $1.13 TOTALS/AVG. 280 $ $ Aylesbury Loop Decatur, GA *Tenant pays electric utility Distance to Subject: 3.1 miles C COLUMBIA MILL 108 UNITS OCCUPANCY: 98% YEAR BUILT: 2013 Unit Type # of Units Rent SF Rent Per SF 1BD 1BTH 28 $ $1.04 2BD 2BTH 44 $999 1,031 $0.97 2BD 2.5BTH 12 $1,099 1,192 $0.92 3BD 2BTH 24 $1,199 1,235 $0.97 TOTALS/AVG. 108 $1,003 1,026 $ Flat Shoals Road Atlanta, GA *LIHTC Property with 50% and 60% units *Tenant pays water, sewer, & electric utilities Distance to Subject: 3.1 miles 28 LIHTC ADVISORS WHISPERING PINES 40 UNITS

29 Rent Comparables D MAGNOLIA CIRCLE 84 UNITS OCCUPANCY: 100% YEAR BUILT: 2003 Unit Type # of Units Rent SF Rent Per SF 1BD 1BTH 32 $ $0.99 2BD 2BTH 52 $815 1,015 $0.80 TOTALS/AVG. 84 $ $0.86 *LIHTC Property with 50% & 60% units *Tenant pays all utilities 100 Dash Lewis Drive Decatur, GA Distance to Subject: 1.0 miles E RAINBOW FOREST 156 UNITS OCCUPANCY: 100% YEAR BUILT: 1970 Unit Type # of Units Rent SF Rent Per SF 2BD 1.5BTH 60 $853 1,161 $0.73 2BD 2BTH 40 $863 1,161 $0.74 3BD 2BTH 26 $983 1,464 $0.67 3BD 2.5BTH 30 $973 1,322 $0.74 TOTALS/AVG. 156 $900 1,242 $ Rainbow Forest Circle Decatur, GA *Tenant pays electric utility Distance to Subject: 1.3 miles 29 LIHTC ADVISORS WHISPERING PINES 40 UNITS

30 Demographics DECATUR MEDIAN HOME COST DECATUR MEDIAN RENT DECATUR UNEMPLOYMENT RATE $477,100 $2, % (6/2017) DECATUR JOB GROWTH 0.6% (since 1/2017) SOURCE: zillow.com, homefacts.com 30 LIHTC ADVISORS WHISPERING PINES 40 UNITS

31 Demographic Analysis POPULATION 1 MILE 3 MILES 5 MILES 2017 Estimated Population 10,541 80, ,419 Population Growth % 3.39% 4.11% HOUSEHOLDS 2017 Estimated Households 4,003 30,492 87,186 Household Growth % 3.52% 4.26% INCOME 2017 Household Income: Average $41,129 $59,406 $72, Household Income: Median $30,160 $43,383 $51,254 HOUSEHOLD INCOME LEVELS BY POPULATION 25,000 20,000 15,000 10,000 5,000 0 Under $25,000 $25,000- $50,000 $50,000- $75,000 $75,000- $100,000 $100,000- $125,000 $125,000- $150,000 $150,000- $200,000 $200,000+ OWNER 61% RENTER 39% OCCUPIED 95% VACANT 5% SOURCE: CoStar 31 LIHTC ADVISORS WHISPERING PINES 40 UNITS

32 LIHTC Advisors