Marcus & Millichap

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3 Dear Friends and Investors, I have met countless NYC multifamily owners and entrepreneurs throughout my career. As a by-product of working with them, I have become a student of their success. They all share similar qualities. Regardless of your stage of life or industry, these habits transcend real estate and have something to teach us all. 1.They Play the Long Game Marcus & Millichap The most important quality is they play the long game. The best owners are willing to make upfront investments that often don t produce short-term dividends. They see the world in a less transactional way. It s not, How can I cash out as soon as possible? It s rather, What can I build out of this that will give me a long-term advantage? 2. They Put Their Ego to the Side An over inflated sense of self-worth can limit ones view of what is possible. Many of the most successful individuals started careers by taking positions that were nothing to brag about. I am thinking of those who started in building management, as superintendents, in one of the trades, or even opening pizza shops. One successful investor even started by giving walking tours of NYC. He is now a pioneer in RE tech. 3. They are Skeptical Toward Experts The most successful owners purchased buildings in the Bronx in the 70 s, Tribeca in the 80s, the East Village in the 90s, Harlem in the 2000s, and Brooklyn in Financial advisors and experts at the time of those purchases would have told them they were making mistakes. Had they taken that advice, they would have missed out on millions. The best gather information from multiple, diverse sources. But, they always think for themselves. 4. They are Ridiculously Creative All humans will face significant challenges in their lives. It s part of the game. For investors sometimes that is scarcity of capital, a lack of access to opportunities, or just bad luck. The industry titans persevered, though, often using creativity to turn scarcity into opportunity. One investor with a $200,000,000 portfolio started out by writing hand-written notes to people asking them to sell their building. Painstaking. Time consuming. People thought he was crazy. The result: several below market purchases. 5. They Have Grit Unconventional investments almost never pay off immediately. You need to see them through. This ability is called grit. How is grit developed? Studies show that immigrants become wealthier than native born US citizens of the same economic status. The environments they were born into and the challenges they faced are unimaginable to most Americans. Their paths helped them develop grit. It s something that won t show up on a résumé, but certainly impacts performance. How bad do you want it?

4 6. They are Loyal and Pay it Forward Earlier, I mentioned the best owners focus on the long game. That s true for business, but it s also true when building personal relationships. This is loyalty. I recently heard someone describe dating and maintaining a long-term relationship in NYC as challenging due to the abundance of other available options you walk by each day. Focusing on other available options creates the illusion that, if you encounter problems, you don t need to work through them. Just start over. 7. They Work for A Bigger Why I often hear, What s your why? To reach extreme success, most entrepreneurs work for something beyond their own self-aggrandizement. It s about something bigger than themselves. It s known that individuals who achieve a certain level of wealth enjoy only a marginally positive impact on their lives as they earn more. That s why money alone can t motivate or incentivize to titan status you need a bigger why. Most immigrants don t take their opportunities as Americans for granted. Instead, they find motivation through innovation and connecting to improve the lives of those around them. Improving Your Investing Performance Many of the same personal qualities mentioned above can double as investing principles in uncertain markets. Having a long-term outlook, creative business strategy, and ability to delay gratification will often lead to success. Investing alongside a bigger why (like a macro demographic trend) helps too! In the future, I may dive deeper with further examples of the attributes above with specific stories from some of the most fascinating owners I ve met. In the meantime, feel free to reach out with any questions or comments on the topic. Regards, pvonderahe@ipausa.com Building Meaningful Relationships That Matter. Photo from our semi-annual NYM brainstorming retreat. Montauk March 2018

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8 Our specialized focus in NYC mid-market multifamily real estate, backed by the power and resources of Marcus & Millichap uniquely positions us to create optimal opportunities for both private capital and institutional investments. We specialize only in multifamily properties, only in New York City, customizing our strategy around you. Backed by the nation s largest private client brokerage, we bridge the gap between private and institutional capital. We are positioned to source exclusive opportunities for our clients sellers frequently become buyers with NYM. We don t simply market properties we aggressively sell them in pursuit of the best outcomes for clients.

9 The number one multifamily investment sales team in New York City

10 Our specialized expertise, network, and team of superstars make for sales that are impressive, and always increasing. Our 24-month track record speaks for itself MANHATTAN SALES BOROUGH SALES TOTAL SALES

11 We research and understand the metrics on every sale in the marketplace. In certain cases, the current Cap Rate or Gross Rent Multiplier (GRM) will indicate a value that is inconsistent with the actual transaction. Therefore, for sales with special circumstances, we have created the below key to provide further clarity into the sale. For specific information on any transaction, feel free to contact us at The property was either delivered vacant, sold on the basis of being vacant, or subsequently vacated. As a result, operating income and expense metrics are not relevant. The property was purchased with the buyer intending to occupy all or part of the residential or commercial (if applicable) portion of the property for their own use. Typically, user value reflects a premium over investor value. The property was purchased with the assumption that all or a substantial portion of the property will be redeveloped, (e.g. conversion to condo). Therefore, the relevant operating metrics are not current operations, but are based on projections of potential future income and expenses. The property was purchased with the buyer intending to transition the commercial space, (e.g. release to new tenant), substantially increase rents, or combine/separate the existing space(s). Therefore, the relevant operating metrics are unavailable. The disposition of the property was supervised by an Executor or Administrator and not by the former owner. Estate sales can be affected by timing issues like taxes due or lacking someone to operate the property. The values achieved in an estate sale often reflect a transaction in which the decision maker may or may not have directly benefitted from the outcome. The property was sold as a result of financial pressures from creditors usually foreclosure or preforeclosure. Typically these pressures limit the seller s ability to achieve fair market value.

12 This section is divided into several markets, featuring Manhattan multifamily sales from Q2 of 2018 valued over $1,000,000.

13 All NYC Multifamily Sales 12-Month Comparison SALES $/SF GRM 24% Reduction in Sales Volume 1% Average Reduction in Price Per Square Foot 7% Average Reduction in Gross Rent Multiplier 25 Million+ Multifamily Sales Last 12 Months Previous 12 Months $/UNIT $789,365 $1,061,173 34% Average Reduction in $/Unit $/SF $782 $884 12% Average Reduction in $/SF SALES 6% Reduction in Sales Volume

14 With a commitment to integrity, we operate with our ears to the ground. April 2018 $44,100, Units $778 Price/SF April 2018 $41,409, Units $1,048 Price/SF June 2018 $30,000, Units $732 Price/SF May 2018 $16,950, Units $1,080 Price/SF *Includes only single asset transactions

15 PROPERTY DATE PRICE UNITS CAP RATE GRM SF $/SF 77 Madison Street May-18 $12,000, % -- 21,274 $ Ludlow Street May-18 $7,100, Value Add -- 7,350 $ East Broadway Jun-18 $6,350,000 9 Value Add -- 6,225 $1, East Broadway Apr-18 $6,100,000 6 Repositioned -- 6,416 $ Greenwich Street Apr-18 $8,785, % ,875 $1, Madison Street 38 Ludlow Street 150 East Broadway 185 East Broadway 684 Greenwich Street corey.isdaner@mmreis.com noah.kossoff@mmreis.com

16 PROPERTY DATE PRICE UNITS CAP RATE GRM SF $/SF 224 East 59th Street Jun-18 $14,000, Value Add -- 11,827 $1, St. Mark's Place May-18 $12,900, % ,374 $1, East 12th Street May-18 $8,500,000 5 Value Add -- 5,024 $1, Second Avenue May-18 $7,800,000 6 Value Add -- 4,812 $1, East 7th Street May-18 $6,250,000 4 Value Add -- 5,446 $1, St. Mark's Place May-18 $5,000,000 7 Delivered Vacant -- 5,479 $ Avenue B May-18 $3,100, Value Add -- 7,810 $ East 4th Street May-18 $3,000, Value Add -- 7,166 $ East 7th Street May-18 $2,400, Value Add -- 5,220 $ East 59th Street 24 St. Mark's Place 215 East 12th Street 84 Second Avenue 203 East 7th Street 116 St. Mark's Place 106 Avenue B 207 East 4th Street 187 East 7th Street corey.isdaner@mmreis.com

17 PROPERTY DATE PRICE UNITS CAP RATE GRM SF $/SF 125 West 16th Street Apr-18 $41,409, % ,504 $1, West 24th Street May-18 $16,950, % ,695 $1, West 28th Street May-18 $13,800,000 5 Finished Product -- 10,735 $1, Eighth Avenue May-18 $13,750,000 5 Redevelopment -- 7,760 $1, West 14th Street Apr-18 $13,000,000 5 Sold To End User -- 11,550 $1, West 55th Street Jun-18 $9,900, % ,105 $1, West 15th Street Apr-18 $7,500, % ,950 $1, West 95 Street Jun-18 $30,000, % ,000 $ West 87th Street Apr-18 $6,950,000 7 Finished Product -- 6,420 $1, West 16th Street 41 West 24th Street 40 West 28th Street 687 Eighth Avenue 131 West 14th Street 448 West 55th Street 342 West 15th Street 336 West 95 Street 43 West 87th Street logan.markley@mmreis.com

18 PROPERTY DATE PRICE UNITS CAP RATE GRM SF $/SF 1514 First Avenue Apr-18 $16,200,000 9 Repositioned -- 7,174 $2, First Avenue Apr-18 $14,938, Redevelopment -- 7,174 $2, East 92nd Street May-18 $9,300, % ,600 $1, East 92 Street May-18 $8,400, % ,540 $ First Avenue 1528 First Avenue 309 East 92nd Street 313 East 92 Street danny.handweiler@mmreis.com

19 PROPERTY DATE PRICE UNITS CAP RATE GRM SF $/SF 3694 Broadway Apr-18 $62,000, Value Add -- 15,072 $4, Fifth Avenue Apr-18 $44,100, Value Add -- 56,670 $ West 111th Street Jun-18 $9,700, % -- 14,495 $ Hamilton Place May-18 $9,500, Value Add -- 33,880 $ West 135th Street May-18 $7,210, % ,170 $ Adam C Powell Blvd May-18 $5,225, % ,940 $ West 164th Street Apr-18 $4,795, Value Add -- 19,500 $ Broadway 1274 Fifth Avenue 141 West 111th Street 51 Hamilton Place 505 West 135th Street 1975 Adam C Powell Blvd 452 West 164th Street jacob.kahn@mmreis.com

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21 This section features Brooklyn multifamily sales from Q2 of 2018 valued over $5,000,000.

22 Average Price Per Square Foot BY MARKET Total Sales Volume Total Number of Sales $966 NORTHERN $42,350,000 2 Sales $894 WESTERN $86,515,000 2 Sales $257 CENTRAL $87,065, Sales $227 SOUTHERN $15,700,000 1 Sales

23 With a commitment to integrity, we operate with our ears to the ground. May 2018 $81,240, Units $929 Price/SF April 2018 $22,350, Units $1,081 Price/SF May 2018 $20,000, Units $863 Price/SF June 2018 $15,700, Units $227 Price/SF *Includes only single asset transactions

24 PROPERTY DATE PRICE UNITS CAP RATE GRM SF $/SF 470 4th Avenue 24-May $81,240, % ,424 $ Kent Avenue 10-Apr $22,350, % -- 20,680 $1, West 1st Street 6-Jun $15,700, Value Add -- 69,190 $ Clarkson Avenue 13-Jun $14,490, Value Add -- 69,491 $ Crown Street 22-Jun $11,450, Value Add -- 52,764 $ Ocean Parkway 26-Apr $10,650, % ,958 $ East 21st Street 14-Jun $10,262, Value Add -- 41,000 $ East 21st Street 14-Jun $8,587, Value Add -- 41,952 $ Kosciuszko Street 7-Jun $8,200, % ,970 $ & 947 Saint Marks Avenue 15-May $7,000, % ,432 $ Sterling Place 3-May $6,000, % ,808 $ Snyder Avenue 4-Apr $5,300, Value Add -- 28,160 $ Saint Marks Avenue 4-Apr $5,275, Value Add -- 9,360 $ Van Siclen Avenue 19-Jun $5,125, % ,220 $242 Simon Manhattan Ave Portfolio 23-May $20,000,000 6 Value Add -- 23,158 $ msalvatico@mmreis.com tshihadeh@mmreis.com dgreenblatt@mmreis.com

25 470 4th Avenue Kent Avenue 2470 West 1st Street 140 Clarkson Avenue 826 Crown Street 377 Ocean Parkway 31 East 21st Street 21 East 21st Street 222 Kosciuszko Street 17 Van Siclen Avenue 1043 Sterling Place Snyder Avenue Saint Marks Avenue Simon Manhattan Avenue Portfolio 939 & 947 Saint Marks Avenue

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27 This section features Bronx multifamily sales from Q2 of 2018, above 25 units.

28 Average Price Per Unit BY MARKET Total Sales Volume Total Number of Sales (Derived only from sales of assets above a total of 25 units) $148,466 NORTH BRONX $32,514,000 4 Sales $139,726 SOUTH BRONX $10,200,000 2 Sales

29 With a commitment to integrity, we operate with our ears to the ground. April 2018 $14,900, Units $191 Price/SF May 2018 $6,800, Units $157 Price/SF May 2018 $6,314, Units $232 Price/SF June 2018 $5,200, Units $314 Price/SF *Includes only single asset transactions

30 PROPERTY DATE PRICE UNITS $/UNIT SF $/SF 2050 Bartow Avenue 19-Apr $14,900, $149,000 78,120 $ Watson Avenue 27-Apr $5,000, $104,167 52,800 $ Valentine Avenue 31-May $6,800, $130,769 43,270 $ Aqueduct Avenue West 9-May $6,314, $170,649 27,250 $ Bryant Avenue 7-Jun $5,200, $208,000 16,575 $ Broadway 31-May $4,500, $150,000 21,735 $ Bartow Avenue 2537 Valentine Avenue Watson Avenue 2541 Aqueduct Avenue West 1468 Bryant Avenue 6125 Broadway

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32 This section features Queens multifamily sales above $5MM, from Q2 of 2018

33 With a commitment to integrity, we operate with our ears to the ground. April 2018 $56,500, Units $301 Price/SF June 2018 $13,300, Units $324 Price/SF June 2018 $10,500, Units $302 Price/SF April 2018 $6,300, Units $384 Price/SF *Includes only single asset transactions

34 PROPERTY DATE PRICE UNITS CAP RATE GRM SF $/SF th Avenue 6-Apr $56,500, % ,800 $ Barclay Avenue 4-Jun $13,300, % ,991 $ Irving Avenue 8-May $12,500,000 1 Redevelopment -- 6,900 $ Saull Street 1-Jun $10,500, % ,807 $ th St 26-Apr $6,300, % ,400 $ Newtown Avenue 24-May $5,560, % ,820 $ th Avenue Barclay Avenue Saull Street th St 2912 Newtown Avenue th Avenue dylan.walsh@mmreis.com

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37 Marcus & Millichap Refinance 5-Unit Mixed-Use Manhattan Refinance 8-Unit Multi-Family Brooklyn Strong existing relationships with both national and regional lenders. With more than ten years in the real estate industry, Andrew leads our capital team in securing commercial debt financing for an array of property types. Refinance 23-Unit Mixed-Use Bronx Refinance 18-Unit Multi-Family Manhattan

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