LEX ON PORTLAND 536 East Portland Street, Phoenix, AZ 85004

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1 MULTI-FAMILY FOR SALE LEX ON PORTLAND 536 East Portland Street, Phoenix, AZ Sale Price: $4,000,000 Proposed Number Of Units: 103 Price Per Proposed Unit: $38,835 Lot Size: Building Size: Proposed Year Built: 2017 Existing Complex Renovated: 2014 Zoning: Market: Sub Market: KW COMMERCIAL 2500 S Power Rd. Suite 121 Mesa, AZ Acres 98,182 SF DTC-E-EV Phoenix Downtown Phoenix Cross Streets: 7th Street / Interstate 10 BROCK DANIELSON Senior Director / Owner / Associate Broker brock@kwcommercial.com AZ #BR PROPERTY OVERVIEW LEX on Portland, is a RE-DEVELOPMENT OPPORTUNITY located at the corner of 7th Street and Portland within the Artisan Arts District of downtown Phoenix. Designed by Humphrey s and Partners Architects LEX on Portland is a highly efficient and modern 103 unit Luxury Complex with all the amenities (see financials labeled New Construction Stabilized ). There is an existing 32 Unit complex on the site called Lexington Apartments (see financials labeled Existing 32 Unit Complex ). When you live at LEX on Portland, you re in the heart of downtown Phoenix, so you ll enjoy urban living at its finest. Take a walk to various eateries including Carly s Bistro, Scratch, Songbird Coffee & Tea House and many more. Art is all around you when you live at LEX on Portland. We re located on the strip of the largest art walk in the state of Arizona and within walking distance of the Heard Museum for Native American Art and History as well as the Phoenix Art Museum. Want to get away for the day? Catch the Light Rail, located just 3 blocks from our community, and head to Mill Avenue in Tempe where you ll discover more restaurants, entertainment venues, shops, boutiques and art studios. Choose from a one or two bedroom urban dwelling and enjoy luxurious finishes and amenities. Relieve some stress at the 24-hour modern fitness center or cool off and enjoy the views in the resort style rooftop swimming pool. Hang out with friends at the outdoor grilling area or in the game room. Conveniently located to the well acclaimed schools and academic facilities in the city. LEX on Portland offers everything you want and need! PROPERTY HIGHLIGHTS Skyview Courtyard Pool and Amenities Balcony Access Club Quality Fitness Center Fire Pits Floor to ceiling windows & balcony access High end window shades in all units Open, light, and sophisticated space Poolside TVs and Hi Speed Wi-Fi Access Upgraded Appliances Stone Counters and High End Finishes We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

2 MULTI-FAMILY FOR SALE LEX ON PORTLAND 536 East Portland Street, Phoenix, AZ KW COMMERCIAL 2500 S Power Rd. Suite 121 Mesa, AZ BROCK DANIELSON Senior Director / Owner / Associate Broker brock@kwcommercial.com AZ #BR We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

3 MULTI-FAMILY FOR SALE LEX ON PORTLAND 536 East Portland Street, Phoenix, AZ KW COMMERCIAL 2500 S Power Rd. Suite 121 Mesa, AZ BROCK DANIELSON Senior Director / Owner / Associate Broker brock@kwcommercial.com AZ #BR We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

4 File: ae-lex on portland.rep ACQUISITION & DEVELOPMENT EQUITY PARTICIPATION Project Developer 1 Partner Project Term (Yrs) Initial Equity 1,015,000 1,015,000 Purchase Price 4,000,000 Total Equity Advanced 5,191,513 5,191,513 Closing Cost 60,000 (%) of Total Equity % % Land Portion 4,000,000 Maximum Equity Balance 5,181,229 5,181,229 Building Portion Profit Distribution 16,514,375 16,514,375 Total Hard Costs 16,301,718 (%) of Profit Distribution % % Total Soft Costs 1,412,578 Construction Ln Fees / Interest 563,770 Discount Rate (%) 8.00% 8.00% Negative Operating C/F 95,629 N.P.V. / Pre-Tax 8,196,820 8,187,289 Total Project Cost 22,433,695 I.R.R. / Pre-Tax 27.25% 27.17% Gross Shell Square Feet 98,182 Cash-on-Cash (%) -1.47% -1.47% Rentable Square Feet 84,542 86% Return on Cost (%) 7.75% Cost per Gross Sq Ft Net Operating Income 9,310,038 9,310,038 Pre-Tax Income 1,648,801 1,648,801 Acquisition & Construction Loan Net Sale Proceeds 17,972,984 17,972, Maximum Loan Amount 17,231,601 No. Months Active 28 PERMANENT FINANCING Loan Fee ($) 172,316 Perm Loan #1 Perm Loan #2 Loan Fee (%) 1.00% Interest Rate (%) 3.80% Loan Amount 17,231,601 Interest Paid 1,137,547 Amortization Years Interest Draws 1,137,547 Payoff Years 7.00 Non-Interest Draws 16,094,054 No.Months Active 56 Total Repayment 17,231,601 Loan Fee ($) 172,316 CASH FLOW SUMMARY Loan Fee (%) 1.00% Interest Rate (%) 4.25% - Acquisition Cost 4,060,000 Loan-to-Value-% 54.32% + Funded--Construction Loan 3,045,000 Loan-to-Cost-% 78.71% Total Debt Service 4,747,052 - INITIAL OUTLAY 1,015,000 Debt Srvc Coverage-1st Ln Yr Development / Capital Cost 17,714,296 RENTAL UNITS - Construction Loan Fees / Interest 563,770 Starting Starting + Construction Loan Draws 14,186,601 Unit Type Units Rent/Unit Sq.Ft Rent/SF - Construction Loan Repay 17,231, Permanent Loan Funds 17,231,601 1 Bed A Operating Cash Flow 3,644,576 1 Bed B 6 1, Bed C 18 1, Cash Flow before Sale - 1,458,609 1 Bed D 21 1, Pre-Tax Sale Proceeds 17,972,984 2 Bed A 11 2,073 1, CASH FLOW before CAPITAL 16,514,375 2 Bed B 10 2,108 1, Bed C 18 2,215 1, Gross Sales Price 34,780,391 2 Bed D 1 2,519 1, Capitalization Rate (%) 5.00% Unit Totals 103 1,601 84, Parking 0 01/31/17 05:39:19 1/1

5 File: ap-lex on portland.rep Total Total Total Total Total Total Total Total Grand Brock Danielson and Associates Total PROJECT COSTS: Acquisition Cost: Purchase Price 4,000,000 4,000,000 Closing Cost 60,000 60,000 Acquisition Cost 4,060,000 4,060,000 Land Value 4,000,000 4,000,000 Hard Costs: On-Site Improvement 461, , ,096 Demolition 78,264 78,264 Direct Construction 13,512,545 13,512,545 Insurance (PLPD only (no wrap) 104, ,446 52, ,669 Hard Cost Contingency 56,619 1,255,919 4,607 1,317,144 Total Hard Costs 700,746 15,543,958 57,014 16,301,718 Soft Costs: Fees & Permits 200, ,000 Architects / Engineers 600, ,000 Property Tax 14,550 15,728 17, , , ,950 81, ,312 Soft Cost Contingency 40, ,416 6,936 7,498 4,052 67,266 Total Soft Cost 840,000 15,278 16,514 17, , , ,448 85,100 1,412,578 Sub-Total Project Cost 5,600,746 15,559,235 73,529 17, , , ,448 85,100 21,774,296 Acq & Cnstructn Loan Fee 172, ,316 Acq & Cnstructn Loan Interest 40, , ,454 Negative Operating C/F 95,629 95,629 Total Project Cost 5,813,212 15,910, ,158 17, , , ,448 85,100 22,433,695 Cost per Gross SF LOAN FLOW REPORT: Acq & Construction Loan: Maximum Loan Amount 17,231,601 17,231,601 Annual Interest(%) 3.80% 3.80% 3.80% Interest Reserve 1,097, ,520 Loan Fee (cap'd) 172, ,316 No.of Months Draw Purchase 3,045,000 3,045,000 Begin Loan Balance 4,337,990 16,537,711 17,177,206 Draw Interest 40, , ,520 1,137,547 Draw Costs 1,713,062 11,335,992 13,049,054 Repayment 17,231,601 17,231,601 End Loan Balance 4,798,212 16,590,081 Interest Payment 40, , ,520 1,137,547 01/31/17 05:51:16 1/6

6 File: ap-lex on portland.rep Total Total Total Total Total Total Total Total Grand Brock Danielson and Associates Total Capitalized 40, , ,454 Expensed 104, , ,093 Permanent Loan #1: Loan Funding 17,231,601 17,231,601 Annual Interest(%) 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% Loan Fee 172, ,316 No.of Payments Begin Loan Balance 17,231,601 16,965,782 16,663,761 16,348,652 16,019,886 15,792,831 15,792,831 Debt Service 1,017,225 1,017,225 1,017,226 1,017, ,150 4,747,052 Interest Expense 726, , , , ,291 3,279,447 Reduce Principal 290, , , , ,859 1,467,606 Endng Loan Balance 17,231,601 16,941,100 16,638,010 16,321,784 15,991,854 15,763,995 15,763,995 OCCUPANCY: 1 Bed A Total Units Units Rented (%) Rented 66.7% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% (%) of Rented Mix 16.7% 17.5% 17.5% 17.5% 17.5% 17.5% 17.5% 17.5% Sq.Feet / Unit Rent / Unit / Month 981 1,010 1,041 1,072 1,104 1,137 1,137 1,137 Gross Rent 21, , , , , , ,739 1,315,493 1 Bed B Total Units Units Rented (%) Rented 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% (%) of Rented Mix 8.3% 5.8% 5.8% 5.8% 5.8% 5.8% 5.8% 5.8% Sq.Feet / Unit Rent / Unit / Month 1,043 1,075 1,107 1,140 1,174 1,209 1,209 1,209 Gross Rent 11,476 75,865 78,141 80,485 82,900 85,387 58, ,306 1 Bed C Total Units Units Rented (%) Rented 66.7% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% (%) of Rented Mix 16.7% 17.5% 17.5% 17.5% 17.5% 17.5% 17.5% 17.5% Sq.Feet / Unit Rent / Unit / Month 1,392 1,434 1,477 1,521 1,567 1,614 1,614 1,614 Gross Rent 30, , , , , , ,424 1,867,320 1 Bed D Total Units Units Rented (%) Rented 66.7% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% (%) of Rented Mix 19.4% 20.4% 20.4% 20.4% 20.4% 20.4% 20.4% 20.4% Sq.Feet / Unit Rent / Unit / Month 1,410 1,452 1,496 1,541 1,587 1,634 1,634 1,634 01/31/17 05:51:16 2/6

7 File: ap-lex on portland.rep Total Total Total Total Total Total Total Total Grand Brock Danielson and Associates Total Gross Rent 36, , , , , , ,580 2,203,651 2 Bed A Total Units Units Rented (%) Rented 72.7% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% (%) of Rented Mix 11.1% 10.7% 10.7% 10.7% 10.7% 10.7% 10.7% 10.7% Sq.Feet / Unit 1,063 1,063 1,063 1,063 1,063 1,063 1,063 1,063 Rent / Unit / Month 2,073 2,135 2,199 2,265 2,333 2,403 2,403 2,403 Gross Rent 31, , , , , , ,464 1,703,531 2 Bed B Total Units Units Rented (%) Rented 70.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% (%) of Rented Mix 9.7% 9.7% 9.7% 9.7% 9.7% 9.7% 9.7% 9.7% Sq.Feet / Unit 1,081 1,081 1,081 1,081 1,081 1,081 1,081 1,081 Rent / Unit / Month 2,108 2,171 2,236 2,303 2,373 2,444 2,444 2,444 Gross Rent 27, , , , , , ,495 1,572,972 2 Bed C Total Units Units Rented (%) Rented 66.7% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% (%) of Rented Mix 16.7% 17.5% 17.5% 17.5% 17.5% 17.5% 17.5% 17.5% Sq.Feet / Unit 1,136 1,136 1,136 1,136 1,136 1,136 1,136 1,136 Rent / Unit / Month 2,215 2,282 2,350 2,421 2,493 2,568 2,568 2,568 Gross Rent 48, , , , , , ,795 2,970,974 2 Bed D Total Units Units Rented (%) Rented 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% (%) of Rented Mix 1.4% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Sq.Feet / Unit 1,292 1,292 1,292 1,292 1,292 1,292 1,292 1,292 Rent / Unit / Month 2,519 2,595 2,673 2,753 2,836 2,921 2,921 2,921 Gross Rent 5,039 30,535 31,451 32,395 33,367 34,368 23, ,519 All Rental Units: Total Units Units Rented (%) Rented 69.9% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Wtd Avg Rent / Unit / Mth 1,116 1,649 1,698 1,749 1,801 1,855 1,855 1,855 Gross Rent 212,610 1,945,304 2,058,008 2,119,748 2,183,340 2,248,840 1,528,915 12,296,766 OPERATING REPORT: Rental Units Gross Rent 212,610 1,945,304 2,058,008 2,119,748 2,183,340 2,248,840 1,528,915 12,296,766 (-) Vacancy / Reserve 10,631 97, , , , ,442 76, ,838 Effective Gross Rent 201,980 1,848,039 1,955,107 2,013,760 2,074,173 2,136,398 1,452,469 11,681,927 01/31/17 05:51:16 3/6

8 File: ap-lex on portland.rep Total Total Total Total Total Total Total Total Grand Brock Danielson and Associates Total ProForma Other Income 159, , , , , ,664 1,326,147 Effective Gross Income 201,980 2,007,538 2,205,103 2,263,756 2,324,169 2,386,394 1,619,133 13,008,074 Less: Operating Expenses ProForma Operating Expenses 64, , , , , , ,787 3,698,037 Total Operating Expense 64, , , , , , ,787 3,698,037 NET OPERATING INCOME 137,963 1,422,549 1,586,204 1,626,290 1,667,579 1,710,106 1,159,346 9,310,038 Return on Cost(%) 3.81% 6.50% 7.24% 7.38% 7.51% 7.65% 7.75% 7.75% (-) Permanent Loan Fees 172, ,316 (-) Debt Service 104, ,520 1,017,225 1,017,225 1,017,226 1,017, ,150 5,493,146 OPERATING CASH FLOW 33, , , , , , ,196 3,644,576 Interest Expense 104, , , , , , ,291 4,025,540 Depreciation / Amortization: Building / Capital Costs 95, , , , , , ,991 3,401,232 Constructn Loan Fee 1,044 6,266 6,266 6,266 6,266 6,266 4,177 36,552 Constructn Loan Interest 2,372 14,235 14,235 14,235 14,235 14,235 9,490 83,036 Permanent Loan Fee(s) 24,617 24,617 24,617 24,617 16, ,877 Total Depreciation / Amort 99, , , , , , ,069 3,635,697 Pre-Tax Income (65,629) 184, , , , , ,986 1,648,801 Gross Sale Price 34,780,391 34,780,391 (-) Selling Expense 1,043,412 1,043,412 (-) Loan Payoff 15,763,995 15,763,995 Pre-Tax Sale Proceeds 17,972,984 17,972,984 CASH FLOW SUMMARY: (-) Acquisition Cost 4,060,000 4,060,000 (+) Funded--Construction Loan 3,045,000 3,045,000 (-) INITIAL OUTLAY 1,015,000 1,015,000 (-) Development/Capital Cost 1,540,746 15,559,235 73,529 17, , , ,448 85,100 17,714,296 (-) Construction Loan Fee 172, ,316 (-) Construction Loan Interest 40, , ,454 (+) Construction Loan Draws 1,753,212 11,791, ,520 14,186,601 (-) Construction Loan Repay 17,231,601 17,231,601 (+) Permanent Loan Funds 17,231,601 17,231,601 (+) Interest On Cash ,279 (+) Operating Cash Flow 33, , , , , , ,196 3,644,576 Cash Flow before Sale (1,015,000) (4,085,229) 1,177, , , , , ,466 (1,458,609) (+) Pre-Tax Sale Proceeds 17,972,984 17,972,984 01/31/17 05:51:16 4/6

9 File: ap-lex on portland.rep Total Total Total Total Total Total Total Total Grand Brock Danielson and Associates Total CASH FLOW before CAPITAL (1,015,000) (4,085,229) 1,177, , , , ,984 18,369,450 16,514,375 (+) Equity Contributions 1,015,000 4,166,229 10,283 5,191,513 (-) Returns of Equity 50,100 1,218, , , , ,984 1,885,975 5,191,513 (-) Profit Distribution 16,514,375 16,514,375 NET CASH FLOW (Pre-Tax) 30,900 (30,900) 30,900 (30,900) Cash Balance 30,900 30,900 30,900 30,900 30,900 Cash Reserve Desired 30,900 30,900 30,900 30,900 30,900 30,900 30,900 Analysis Measures: Discount Rate (%) 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% N.P.V. All Cash 5,365,928 5,365,928 I.R.R. All Cash 12.21% 12.21% N.P.V. Leveraged 8,196,820 8,196,820 I.R.R. Leveraged 27.25% 27.25% Cash-on-Cash-% (473.08) (1.47) Total Return-% (473.08) PARTICIPATION: DEVELOPER 1: Begin Equity Balance 1,015,000 5,131,129 3,922,907 3,402,114 2,927,220 2,421,959 1,885,975 Equity Contribution 1,015,000 4,166,229 10,283 5,191,513 Return of Equity 50,100 1,218, , , , ,984 1,885,975 5,191,513 End Equity Balance 1,015,000 5,131,129 3,922,907 3,402,114 2,927,220 2,421,959 1,885,975 Profit Distribution 16,514,375 16,514,375 Net Cash Flow (1,015,000) (4,116,129) 1,208, , , , ,984 18,400,350 16,514,375 Net Cash Balance (1,015,000) (5,131,129) (3,922,907) (3,402,114) (2,927,220) (2,421,959) (1,885,975) 16,514,375 16,514,375 Net Present Value 8,187,289 8,187,289 Internal Rate of Return 27.17% 27.17% Allocated Income: Net Operating Income 137,963 1,422,549 1,586,204 1,626,290 1,667,579 1,710,106 1,159,346 9,310,038 (-) Depreciation Deduction 99, , , , , , ,069 3,635,697 (-) Interest Exp Deduction 104, , , , , , ,291 4,025,540 Operating Income Before Tax (65,629) 184, , , , , ,986 1,648,801 Loss Carry Forward (38,225) Taxable Income 118, , , , , ,986 1,648,801 (-) Income Tax Due / (Saved) 33,224 66,476 80,399 94, ,403 78, ,664 Operating Income After Tax (65,629) 151, , , , , ,030 1,187,136 Sale Income Before Tax 33,736,979 33,736,979 (-) Adjusted Tax Basis 17,557,540 17,557,540 (=) Taxable Gain on Sale 16,179,439 16,179,439 (-) Depreciation Recapture 3,401,232 3,401,232 01/31/17 05:51:17 5/6

10 File: ap-lex on portland.rep Total Total Total Total Total Total Total Total Grand Brock Danielson and Associates Total (=) Net Taxable Gain on Sale 12,778,207 12,778,207 (-) Tax on Net Gain 1,916,731 1,916,731 Sale Income After Tax 31,820,248 31,820,248 NET INCOME AFTER TAX (65,629) 151, , , , ,750 32,023,278 33,007,384 N.P.V. After Tax 6,772,911 6,772,911 I.R.R After Tax Cash-on-Cash-% (476.66) (1.47) Cash-on-Cash-% (A/T) (476.66) (3.00) 01/31/17 05:51:17 6/6

11 MULTI-FAMILY FOR SALE LEX ON PORTLAND 536 East Portland Street, Phoenix, AZ INVESTMENT OVERVIEW LAND WITH ENTITLEMENTS EXISTING 32 UNIT COMPLEX NEW DEVELOPMENT STABILIZED Price $4,000,000 $4,000,000 $22,433,695 Price per Unit $38,834 $38,834 $217,802 GRM CAP Rate - 4.7% 6.7% Cash-on-Cash Return (yr 1) - % 2.31 % 9.24 % Total Return (yr 1) - $76,755 $771,205 Debt Coverage Ratio OPERATING DATA LAND WITH ENTITLEMENTS EXISTING 32 UNIT COMPLEX NEW DEVELOPMENT STABILIZED Gross Scheduled Income - $276,621 $1,978,248 Other Income - -$14,020 $249,996 Total Scheduled Income - $262,601 $2,228,244 Vacancy Cost - $12,750 $111,412 Gross Income - $275,351 $2,116,832 Operating Expenses - $88,767 $618,899 Net Operating Income - $186,584 $1,497,933 Pre-Tax Cash Flow - $30,028 $480,704 FINANCING DATA LAND WITH ENTITLEMENTS EXISTING 32 UNIT COMPLEX NEW DEVELOPMENT STABILIZED Down Payment $4,000,000 $1,300,000 $5,202,094 Loan Amount - $2,700,000 $17,231,601 Debt Service - $156,556 $1,017,229 Debt Service Monthly - $13,046 $84,769 Principal Reduction (yr 1) - $46,727 $290,501 KW COMMERCIAL 2500 S Power Rd. Suite 121 Mesa, AZ BROCK DANIELSON Senior Director / Owner / Associate Broker brock@kwcommercial.com AZ #BR We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

12 MULTI-FAMILY FOR SALE LEX ON PORTLAND 536 East Portland Street, Phoenix, AZ Mile 3 Miles 5 Miles Total Population 14, , ,393 Population Density 4,774 3,967 4,347 Median Age Median Age (Male) Median Age (Female) Total Households 6,556 42, ,685 # of Persons Per HH Average HH Income $43,457 $45,142 $48,868 Average House Value $353,020 $306,721 $287,743 KW COMMERCIAL 2500 S Power Rd. Suite 121 Mesa, AZ BROCK DANIELSON Senior Director / Owner / Associate Broker brock@kwcommercial.com AZ #BR We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.