28 APARTMENTS in SACRAMENTO, CALIFORNIA

Transcription

1 28 APARTMENTS in SACRAMENTO, CALIFORNIA

2 CONFIDENTIALITY AGREEMENT The information contained herein is strictly confidential, furnished solely for the purpose of considering the acquisition of the property described herein, and is not to be used for any other purpose or made available to any other person without the expressed written consent of ARA Newmark. It has been obtained from the Seller and may include other sources believed to be reliable, but no representation is being made with regard to its accuracy or completeness. Prospective investors should undertake their own investigations and reach their own conclusions without reliance upon the material contained herein. Neither the Seller nor the Agent nor any of their respective officers, agents or principals has made or will make any representations or warranties, expressed or implied, as to the accuracy or completeness of the Offering Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of the Offering Memorandum or its contents. Analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the prospective purchaser. The Seller and Agent expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the property and/or terminate discussions with any entity at any time with or without notice. The Seller shall have no legal commitment or obligations to any entity reviewing the Offering Memorandum or making an offer to purchase the property unless and until such offer for the property is approved by the Seller, and any conditions to the Buyer s obligations there under have been satisfied or waived. TABLE OF CONTENTS 04 EXECUTIVE SUMMARY 18 PROPERTY OVERVIEW 24 COMPARABLE ANALYSIS 28 FINANCIAL ANALYSIS 30 LOCATION OVERVIEW MARC ANDENMATTEN License CA: marca@aranewmark.com NATE OLESON License CA: noleson@aranewmark.com CAMERON CORWIN License CA: ccorwin@aranewmark.com SACRAMENTO OFFICE 980 9th Street, Suite 2500 Sacramento, CA T SAN FRANCISCO OFFICE 655 Montgomery St, Suite 1705 San Francisco, CA T

3 THE OFFERING ARA Newmark, as the exclusive advisor, is pleased to present the opportunity to acquire Ramada Village, a 28-unit garden-style community located in Sacramento, California. KEY INVESTMENT HIGHLIGHTS Substantial Value-Add Potential: Current ownership has completed renovations to 10 units which are achieving rent premiums of $139 on average. Loss-to-Lease Capture: There is an average of $100 in loss to lease per unit based on the average market rent of $1,109 and the average in place achieved rent of $1,009, or over $33k in upside a new owner will capture. Attractive assumable debt: Balance of $1.385M (as of 01/2018); 2 years of interestonly, 4.99% interest rate; fixed until April Exceptional Submarket Fundamentals: The Sacramento MSA is projected to be the #3 multifamily market for rent growth in the US in Strong Operational Trends: Ramada Village has achieved consistently positive revenue growth year over year. Excellent Property Condition: Over $150,000 in capital improvements have been invested by current ownership. Property Characteristics: Ramada Village features stucco exteriors, pitched composition shingle roofs, carport parking, swimming pool, dog park, and BBQ area. Proximity to Employers: Ramada Village is just miles from several major employers, the Arden Mall, and Downtown Sacramento. BID DEADLINE: TBD INVESTMENT SUMMARY Price $3,325,000 Address 2121 Edison Ave Sacramento, CA County Sacramento Year Built 1972 Total # of Units 28 Avg Unit Size 611 Net Rentable SF 16,400 # of Acres 0.92 Density 30 Parking 14 covered, 12 open, 1 ADA Parking Ratio 0.96 Avg In-Place Rent $870 Avg In-Place Rent PSF $1.42 Avg Achieved Unrenovated Market Rent $1,009 Avg Market Rent PSF $1.65 Avg Renovated Market Rent $1,109 Avg Renovated Market Rent PSF $1.82 Occupancy (2/2018) 100% PRICE: $3,325,000 PRICE PER UNIT: $118,750 CAP RATE (CURRENT / MARKET): 5.4% / 6.8% GRM (CURRENT / MARKET): 11.0 / 8.9 XECUTIVE SUMMARY 4 5

4 Less of this......more of this. Lighting Fixtures New Cabinets Granite Countertops Black Appliances Vinyl Flooring 6 Unrenovated Ramada Village unit Renovated Ramada Village unit 7

5 PROVEN VALUE-ADD IN THE MARKET SKYVIEW VILLA / SOMERSET Unrenovated Avg Asking Rent: $950 RAMADA VILLAGE Unrenovated Avg Asking Rent: $995 FAIRWAY COMMONS Renovated Avg Asking Rent: $1,025 ALPINE TERRACE Renovated Avg Asking Rent: $1,075 VILLA DEL RIO Renovated Avg Asking Rent: $1,095 $800 $1,100 Sample set consists of 1x1 units FAIRWAY COMMONS Unrenovated Avg Asking Rent: $875 ALPINE TERRACE Unrenovated Avg Asking Rent: $995 SKYVIEW VILLA / SOMERSET Renovated Avg Asking Rent: $1,080 RAMADA VILLAGE Renovated Avg Asking Rent: $1,

6 RENOVATED PROVEN VALUE-ADD PROGRAM One of the premier attributes of Ramada Village is the notable value-add component. Current ownership has successfully renovated 36% of the units with black appliances, vinyl flooring, granite countertops, mirrored closet doors, and updated light fixtures. With these upgrades, ownership has been achieving premiums of $100 per unit at an average cost of $5,022, boasting a return on cost of nearly 24%. New ownership will have the opportunity to complete the interior renovation program for the remaining 18 units, and can expect a sizable increase in revenue upon completion in fact, based on our analysis of comparable value-add renovations within the submarket, a new owner could potentially expand upon these upgrades to obtain higher premiums. UNRENOVATED UNRENOVATED RENOVATED By completing the renovation of the remaining 18 units, as well as capturing the loss to lease on the units that have already been renovated, a new owner has the opportunity to substantially increase near-term NOI RENOVATION PROJECTIONS Floor Plan 1x1 580 sf 2x1 795 sf Total/ Average Renovation Status Unit Count In-Place Rent Market Rent Unrenovated 16 units $ 833 $ 995 Potential Upgrades Black appliances, vinyl flooring, updated light fixtures, granite countertops Projected Cost Achieved Increase ROC Post- Renovation Market Rent Units to be Renovated $5,000 $ % $ 1, units Renovated 8 units $ 911 $ 1, $ 1,095 - Unrenovated 2 units $ 850 $ 1,095 Black appliances, vinyl flooring, updated light fixtures, granite countertops $ 5,200 $ % $ 1,195 2 units Renovated 2 units $ 1,023 $ 1, $ 1, Units $ 870 $ 1,009 $ 5,022 $ % $ 1, units 10 11

7 TOP RANKED NATIONAL MARKET N As a late-cycle recovery market, Sacramento is only beginning to experience the rapid rent growth that has been characteristic of urban centers across the US over the last several years. Per Cantor Fitzgerald s proprietary forecasting model, the Sacramento region is projected to be the third ranked multifamily market in the nation for above-average growth prospects in Downtown Sacramento The Railyards 240 Acres Mixed Use Development Township 9 65 Acres Mixed Use Development Robust Rent Growth: Sacramento continues to see strong rent growth and declining vacancy rates annual rent growth exceeded 7% throughout the region, and vacancy rates are at 3.7% based on our market surveys. Sacramento County Fair California State Fair Strong Employment Gains: Sacramento employment figures continue to improve, with steady employment growth and declining unemployment rates. The MSA has surpassed its 2007 pre-recession peak and now stands at a new high of 1,044,182 total jobs as of November Leo A Palmiter High School Limited New Supply: New construction of multifamily properties continues to remain limited throughout Sacramento. This lack of new supply combined with steady employment gains has continued to fuel rent growth. Howe Avenue Elementary School HOWE AVE RAMADA VILLAGE MARCONI AVE Year over year rent growth exceeded 7% in the Sacramento MSA between Q and Q Vacancy rates sit at a mere 3.7% as of the fourth quarter of ,000 new jobs were added to the region over the past year 2.5% Y-O-Y growth BELL ST Dyer-Kelly Elementary School EDISON AVE Brand New Holiday Inn Express Haggin Oaks Golf Complex Hampton Inn & Suites 12 13

8 STRONG JOB MARKET The Sacramento regional employment market is rapidly growing, and is more diverse than ever. As the seat of California s government, Sacramento has a stable job base anchored by various state and federal agencies, as well as an expanding private sector HP, Kaiser, and Sutter all have significant presences locally. In total, the Sacramento region added approximately 23,000 jobs in the past 12 months (2.5% Y-O-Y growth), and has exceeded its previous employment peak by over 17,000 jobs. Furthermore, unlike the previous cycle (where employment was largely driven by construction) the jobs created in this cycle are far more stable and found in a wide variety of diverse industries, including healthcare, technology and education. EXCEPTIONAL SUBMARKET FUNDAMENTALS Over the last year, rents in the Arden Arcade increased 9.1%, or $100 on average, while vacancy remained essentially flat. This strong rent growth can be attributed to a combination of continued job growth, very limited new construction, and a growing renter population. With none of these trends expected to change in the next year, rent growth should continue for the foreseeable future in Arden, as well as for Sacramento in general. ARDEN ARCADE AVERAGE RENT & VACANCY RATES SACRAMENTO MSA EMPLOYMENT $1, % 1,200, % $1, % 1,100, % $1, % 7.0% 1,000, % $1, % 900, , , ,000 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Feb-17 Jul-17 Dec % 6.00% 4.00% 2.00% 0.00% $1,150 $1,100 $1,050 $1,000 $ % 4.1% 3.9% 3.7% 3.7% 3.7% 3.0% 2.9% 2.7% 2.6% 2.0% 1.8% $1,000 $1,058 $1,093 $1,086 $1,161 $1,185 $1,212 $1,256 $1,248 $1,281 $1,304 $1,297 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 Average Rent Vacancy Rate 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 14 15

9 STRONG OPERATIONAL TRENDS Ramada Village has achieved consistently positive income growth for the past year. As of November 2017, the trailing 3 month base rental income was $290,952, an impressive 12.1% above T8 collections ($259,574). January collections increased to $25,269 or $303,228 per year. These positive operational trends can be largely attributed to the renovation of select apartment homes, as well as substantial rent growth in the Sacramento market, particularly in the Arden submarket. We anticipate that this revenue growth will continue into the near future, as more interior renovations are completed, as loss to lease is captured, and as market rents continue to soar. EXCELLENT PROPERTY CONDITION Over the past few years, current ownership has invested over $150K into thoughtful capital improvements, including: new siding and exterior paint, new landscaping and dog park, renovations of select apartments, and upgrades to the leasing office. These capital improvements have significantly enhanced the property s overall curb appeal, and will enable the next operator to focus their capital deployment on further interior renovations. $150K SPENT IN PAST 12 MONTHS $350,000 $300,000 $250,000 $259,574 $290,952 Gross Income $303,228 $339,120 $372,720 NEW EXTERIOR PAINT $25,000 LANDSCAPING / SIDING $25,000 UNIT INTERIORS $55,000 LAUNDRY ROOM & OFFICE $15,000 $200,000 T8 (Apr '17) T3 (Sep '17) T1 (Jan '18) Current Rents Market Rents (Post Renovation) 16 17

10 PROPERTY SUMMARY Address 2121 Edison Avenue Sacramento, CA UTILITIES PAID BY METHOD SUPPLIED BY County Sacramento Year Built 1972 Total # of Units 28 Net Rentable SF 16,400 Parcel # # of Acres 0.92 Density 30 Electric Resident Direct SMUD Gas Resident Direct PG&E Water/ Sewer Resident RUBS Trash Resident RUBS Sacramento Suburban City of Sacramento Cable Resident Direct Comcast Covered Parking 14 Open Spaces 12 Total Parking 17 Parking Ratio 0.96 UNIT MIX SUMMARY UNIT TYPE # UNITS AVG SF % OF TOTAL IN-PLACE RENT AVG PSF AVG MKT RENT AVG PSF Total Buildings 6 Total # of Stories 1 & 2 Building Style Garden style 1x % $833 $1.44 $995 $1.72 1x1 (Renovated) % $911 $1.57 $1,095 $1.89 ROPERTY OVERVIEW Framing Exteriors Foundation Roof Plumbing Electrical Paving Water Heaters Washer/Dryers Wood Stucco, T111 Concrete post tension slabs Pitched Composition Shingles Copper Copper Asphalt 100 gallon boiler 2/2; coin operated 2x % $850 $1.07 $1,095 $1.38 2x1 (Renovated) % $1,023 $1.29 $1,195 $1.50 Unrenovated % $835 $1.38 $1,106 $1.83 Renovated % $933 $1.50 $1,115 $1.79 Total/Avg % $870 $1.42 $1,109 $1.82

11 RAMADA VILLAGE APARTMENT HOMES N EDISON AV ENUE McClellan Business Park 16M sq ft of office, industrial, R&D, aviation, multifamily Del Paso Country Club Haggin Oaks Golf Complex FULTON Greater Sac Surgery Center E AV NI CO AVE Dyer-Kelly Elementary School MA R New Holiday Inn Express Heritage Oaks Hospital EDISO N Hampton Inn & Suites AVE BELL S T HOW E AV ENUE 20 RAMADA VILLAGE HOW E AVE 21

12 APARTMENT AMENITIES Granite countertops* Vinyl flooring* Black appliances* Open and spacious layouts Updated light fixtures* Mirrored closet doors* Single-story units* Ceiling fans* *Select units 22 23

13 COMMUNITY AMENITIES Beautiful outdoor pool Newly renovated leasing office Dog park Carport parking Brand new washers and dryers in laundry room Controlled access with remote entry Convenient access to Business

14 RAMADA VILLAGE APARTMENT HOMES Fairway Commons Year Built Units Avg Mkt Rents $1, Avg SF $1.30 AVG Rent/PSF S 2 4 Year Built Units Avg Mkt Rents $1, Avg SF AVG Rent/PSF $1.81 SKYVIEW VILLA / SOMERSET 1 2 Sunset Garden 3 Skyview Villa/Somerset RAMADA VILLAGE ALPINE TERRACE Year Built Units Avg Mkt Rents Avg SF AVG Rent/PSF $ $ / 56 $1,038 / $1, / 725 Avg SF AVG Rent/PSF $1.81 / $1.53 Year Built Units Avg Mkt Rents FAIRWAY COMMONS 3 SUNSET GARDENS 4 1 Alpine Terrace Year Built Units $1,046 Avg Mkt Rents 667 Avg SF AVG Rent/PSF $1.57 CO M PA R A B L E A N A LY S I S 26 27

15 RENT COMPARABLE MATRIX AVERAGE MARKET RENT $1,200 Average Rent Property Name Subject Subject Comp 1 Comp 2 Comp 3 Comp 4 Ramada Village (Unrenovated) Ramada Village (Renovated) Skyview Villa Somerset Fairway Commons Villa Del Rio Average Address 2121 Edison Ave 2112 Edison Ave 2509 Edison Ave 2526 Edison Ave 3220 Watt Ave 1961 Howe Ave $1,150 $1,100 $1,087 $1,101 $1,109 $1,114 $1,115 $1,159 City Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Year Built Units Avg Market Rent $1,009 $1,109 $1,087 $1,159 $1,114 $1,101 $1,115 Avg SF Avg Rent PSF $1.65 $1.82 $1.90 $1.60 $1.30 $1.45 $1.53 Occupancy 96.4% 96.4% 98.0% 98.4% 94.0% 96.7% 96.8% Property Name Ramada Village (Unrenovated) Ramada Village (Renovated) Skyview Villa Somerset Fairway Commons Villa Del Rio Average 1 Bedroom 1 Bath 24 Units 24 Units 99 Units 12 Units 38 Units 50 Units Avg Market Rent $995 $1,095 $1,050 $1,080 $1,025 $1,045 $1,046 Avg SF Avg Rent PSF $1.72 $1.89 $2.00 $1.66 $1.63 $1.65 $ Bedroom 1 Bath 4 Units 4 Units 56 Units 44 Units 21 Units 44 Units Avg Asking Rent $1,095 $1,195 $1,150 $1,180 $1,075 $1,145 $1,147 Avg SF Avg Rent PSF $1.38 $1.50 $1.77 $1.58 $1.19 $1.42 $1.53 $1,050 $1,000 $950 $1,009 Ramada Village (Unrenovated) AVERAGE RENT FOR 1-BEDROOM UNITS $1,120 $1,100 $1,080 $1,060 $1,040 $1,020 $1,000 $980 $960 $940 $995 Ramada Village (Unrenovated) Skyview Villa Villa Del Rio Ramada Village (Renovated) $1,025 1 Bedroom 1 Bath $1,045 $1,046 $1,050 Fairway Commons Average Somerset Fairway Commons Villa Del Rio Average Skyview Villa Somerset Ramada Village (Renovated) $1,080 $1,

16 OVERVIEW The following section provides detailed information on the operations of the subject property, including an analysis of revenue trends, historic operations, and our pro forma underwriting and assumptions. INVESTMENT SUMMARY Price $3,325,000 Address 2121 Edison Ave Sacramento, CA County Sacramento Year Built 1972 Total # of Units 28 Avg Unit Size 611 Net Rentable SF 16,400 # of Acres 0.92 Density 30 Parking 14 covered, 12 open, 1 ADA Parking Ratio 0.96 Avg In-Place Rent $870 Avg In-Place Rent PSF $1.42 Avg Achieved Unrenovated Market Rent $1,009 Avg Market Rent PSF $1.65 Avg Renovated Market Rent $1,109 Avg Renovated Market Rent PSF $1.82 Occupancy (2/2018) 100% UNIT MIX SUMMARY UNIT TYPE # UNITS AVG SF % OF TOTAL IN-PLACE RENT AVG PSF AVG MKT RENT AVG PSF 1x % $833 $1.44 $995 $1.72 1x1 (Renovated) % $911 $1.57 $1,095 $1.89 2x % $850 $1.07 $1,095 $1.38 2x1 (Renovated) % $1,023 $1.29 $1,195 $1.50 Unrenovated % $835 $1.38 $1,106 $1.83 Renovated % $933 $1.50 $1,115 $1.79 Total/Avg % $870 $1.42 $1,109 $1.82 UNDERWRITING & DEBT ASSUMPTION A new investor has the option to either assume the current Freddie Mac loan or obtain new debt. The current loan has two years of interest-only remaining and the interest rate will remain fixed at 4.99% until April 1, The fee to assume the current loan is 1% of the loan amount vs the fee to pay off the current loan is 5% of the loan amount. JANUARY INCOME W/T3 EXPENSES PRO FORMA - ACHIEVED RENTS PRO FORMA - MARKET RENTS ACTUAL PER UNIT PER MONTH ACTUAL PER UNIT PER MONTH ACTUAL PER UNIT PER MONTH INCOME GROSS POTENTIAL RENT $303,228 % GPR $10,830 $25,269 $339,120 % GPR $12,111 $28,260 $372,720 % GPR $13,311 $31,060 Less: VACANCY LOSS $0 0.0% $0 $0 ($16,956) -5.0% ($606) ($1,413) ($18,636) -5.0% ($666) ($1,553) NET RENTAL INCOME $303,228 $10,830 $25,269 $322,164 $11,506 $26,847 $354,084 $12,646 $29,507 Plus: UTILITY REIMBURSEMENTS $10,068 $360 $839 $10,068 $360 $839 $12,480 $446 $1,040 Plus: OTHER INCOME $8,596 $307 $716 $8,596 $307 $716 $8,596 $307 $716 TOTAL INCOME $321,892 $11,496 $26,824 $340,828 $12,172 $28,402 $375,160 $13,399 $31,263 EXPENSES PAYROLL $30,724 $1,097 $2,560 $18,000 $643 $1,500 $18,000 $643 $1,500 ADMINISTRATIVE $5,400 $193 $450 $4,200 $150 $350 $4,200 $150 $350 TURNOVER $6,388 $228 $532 $7,000 $250 $583 $7,000 $250 $583 REPAIRS $12,412 $443 $1,034 $7,000 $250 $583 $7,000 $250 $583 UTILITIES $36,428 $1,301 $3,036 $36,428 $1,301 $3,036 $36,428 $1,301 $3,036 LANDSCAPING / GROUNDS $3,000 $107 $250 $2,800 $100 $233 $2,800 $100 $233 CONTRACT SERVICES / OTHER $9,928 $355 $827 $5,000 $179 $417 $5,000 $179 $417 TOTAL CONTROLLABLE EXPENSES $104,280 $3,724 $8,690 $80,428 $2,872 $6,702 $80,428 $2,872 $6,702 MANAGEMENT FEE $11, % $405 $945 $13, % $487 $1,136 $15, % $536 $1,251 INSURANCE $6,624 $237 $552 $7,000 $250 $583 $7,000 $250 $583 REAL ESTATE TAXES $21,239 $759 $1,770 $40,715 $1,454 $3,393 $40,715 $1,454 $3,393 SPECIAL ASSESSMENTS $0 $0 $0 $572 $20 $48 $572 $20 $48 TOTAL OPERATING EXPENSES $143,479 $5,124 $11,957 $142,348 $5,084 $11,862 $143,721 $5,133 $11,977 CAPEX / RESERVES $0 $0 $0 $7,000 $250 $583 $7,000 $250 $583 TOTAL EXPENSES $143,479 $5,124 $11,957 $149,348 $5,334 $12,446 $150,721 $5,383 $12,560 NOI AFTER RESERVES $178,413 $6,372 $14,868 $191,480 $6,839 $15,957 $224,439 $8,016 $18,703 VALUATION SUMMARY JANUARY INCOME W/T3 EXPENSES PRO FORMA - ACHIEVED RENTS DEBT - ASSUMABLE LOAN AMOUNT: ~$1,385,000 (as of 1/1/17) TERMS: 2 YRS I/O LEFT DUE: APRIL 1, 2027 INTEREST RATE: 4.99% ASSUMPTION FEE: 1% OF LOAN (~$13,850) PRE-PAYMENT PENALTY: 5% OF LOAN (~$69,250) PRO FORMA - MARKET RENTS INANCIAL ANALYSIS LIST PRICE PRICE PER UNIT PRICE PER S.F. CAP. RATE GROSS RENT MULTIPLIER $3,325,000 $3,325,000 $3,325,000 $118,750 $118,750 $118,750 $207 $207 $ % 5.8% 6.8%

17 DETAILED INCOME NOTES January Income with T3 Expenses: Represents January income received and uses the last 3 months annualized for expenses. Pro Forma Achieved Rent: Represents all 28 units at the highest achieved rent for each units type respectively. Pro Forma Market Rent: Represents all 28 units at the ARA market rents after completing renovations to the remaining 18 units. Vacancy: 5% base vacancy rate Concessions: No concessions are being offered at the property, and we do not forecast any concessions based on the strength of the market. Other Income: Is composed mainly from laundry income based on historical performance. Utility Reimbursements: T3 and Achieved Rent columns are based on historical performance. Market Rent column assumes $35 for 1-bedroom and $50 for 2-bedroom units DETAILED EXPENSE NOTES Payroll: Adjusted to $18,000 per year. This is composed of free rent plus a salary for the on-site manager. Administrative: Projected at $4,200 per year or $150 per unit per year. Repairs & Maintenance / Turnover: Projected at $7,000 per year or $250 per unit per year each, which is based on the T3 performance. Utilities: Based on historical performance. Landscaping / Grounds: Projected at $2,800 per year, or $100 per unit per year, which is based on the T3 performance. Contract services: Projected at $5,000 in year 1, or $179 per unit per year, which is reduced due to eviction costs accrued by current ownership which no longer apply. Management Fee: 4.0% of effective gross revenue, based on historical performance. Insurance: Projected at $7,000 in year 1, or $250 per unit per year, which is based on the historical performance. Property Taxes / Special Assessments: Real estate taxes will be reassessed upon the sale on a millage rate of %. The January Income with T3 Expenses column reflect 2017 taxes. Capital Reserves: $250 per unit in year. SACRAMENTO REGIONAL OVERVIEW Located approximately 80 miles northeast of the San Francisco Bay Area at the foothills of the Sierra Nevada Mountains, Sacramento is one of the premier markets in the state of California. As the Capitol City, Sacramento is the 25th largest metropolitan area in the United States with a total population in excess of 2.5M. The region has recently emerged as one of the strongest economies in the State of California, offering businesses lower operating costs than the Bay Area, a positive business climate, world class research and educational institutions, and a highly qualified technical workforce. In fact, Sacramento has been one of the fastest growing regions in the state, and posted particularly strong employment numbers in December (gaining nearly 23,000 jobs from a year earlier a gain of 2.5%). Over the same period, California gained 265,000 jobs, a 1.5% increase. The presence of many state and federal agencies, the nation s largest pension fund (CalPERS), and the State Capitol have provided economic stability, while prominent companies like Intel, Apple and HP all have a major presence in the region and are helping revitalize the private sector. Now that regional economic recovery is underway, optimism surrounding the Sacramento rental market has been strong. In fact, the Sacramento MSA is projected to be the #3 multifamily market for rent growth in the US in Sacramento features an abundance of recreational opportunities and lifestyle amenities. The region is home to the Sacramento Kings, the Sacramento Rivercats AAA baseball team, Folsom Lake, the American River, and numerous regional parks. Additionally, Sacramento residents are within a few hours drive of world-renowned ski resorts in Lake Tahoe, famous wineries in the Napa Valley, and all the lifestyle attractions the San Francisco Bay Area has to offer. 32 LOCATION OVERVIEW33

18 D TRANSPORTATION Interstate 80 This is the major east-west route in the area, leading west to Sacramento (and I-5) and then to San Francisco. Heading east, I-80 leads to the Sierra Nevada Mountain Range and the Reno Tahoe area. SACRAMENTO INTERNATIONAL AIRPORT Highway 50 Another major 5 east-west route, Highway 50 runs through Folsom and connects Downtown Sacramento to the El Dorado National Forest and South Lake Tahoe. 99 RAMADA VILLAGE ROSE CIT EXCEPTIONAL SCHOOLS Sacramento has an abundance of higher education options throughout the region that meet different needs of the students. American River College and Sacramento City College are two-year institutions that offer associate degrees and serve as feeder institutions to the University of California, Davis. Both the University of California Davis and California State University Sacramento offers bachelors, masters and PhD degrees and programs in a variety of subjects. The distance from Ramada Village and the number of students at these establishments can be seen below: University of California Davis (32,000 students and 24 miles) California State University, Sacramento (23,000 students and 4 miles) Sacramento City College (26,000 students and 8 miles) American River College (34,502 students and 5 miles) Interstate 5 This is the major north-south route running throughout California and intersecting with Sacramento. I-5 provides easy access to downtown Sacramento. NATOMAS 5 Light Rail Ramada Village is located just 10 minutes to the nearest Sacramento Regional Transit stop, which offers bus and light rail service to and from Sacramento seven days a week. ARDEN-ARCADE R Sacramento International Airport This airport serves the Northern California region with access to major cities across the U.S. and the world. SACRAMENTO DAVIS Amtrak (Capitol Corridor) Amtrak Capitol Corridor provides daily service between the Sacramento region and the Bay Area ROSEMONT 34 35

19 FOR MORE INFORMATION ON THIS OFFERING MEMORANDUM, PLEASE CONTACT: MARC ANDENMATTEN License CA: NATE OLESON License CA: CAMERON CORWIN License CA: ARA-NEWMARK SACRAMENTO 980 9th Street., Suite 2500 Sacramento, CA 95814