A 154-Unit Class B Townhome Investment Opportunity. Northpark. t o w n h o m e s O F F E R E D B Y

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1 A 154-Unit Class B Townhome Investment Opportunity Northpark t o w n h o m e s O F F E R E D B Y

2 Northpark Townhomes Imperial Valley Dr. Houston, TX Northpark Townhomes A P A R T M E N T S F O R S A L E Units: 154 Avg Size: 768 Date Built: 1982 Rentable Sq. Ft.: 118,270 Acreage: 5.00 Occupancy: 97% Class: C+ INVESTMENT HIGHLIGHTS MARKET PRICE OFFERED ALL CASH Available All Cash or New Loan Huge influx of people moving to North Houston, Harris County Blue/White collar profile Located in the Parramatta pocket of the growing Spring suburb in North Harris County Excellent job base with many employers along 1960 Excellent potential to upgrade units to accommodate influx of white collar jobs moving into the area About 6.4 miles to the new Exxon/Mobile campus This will eventually house up to 40,000± workers! The area has improved significantly! The median home price has increased $100K over the past 3 years! FOR MORE INFORMATION ON THIS ASSET PLEASE CONTACT: Hashir Saleem, Broker twilk4@ketent.com ext San Felipe I Suite 355 I Houston, Tx Broker License #

3 KET/HIP Physical Information Financial Information Existing Loan Parameters Operating Information Number of Units 154 Asking Market Price Mortgage Balance Est Mkt Rent (Apr-17) Avg Unit Size 768 Amortization Dec 2016 Net Rentable Area Land Area (Acres) Units per Acre Date Built 118, Debt Service Monthly P & I Interest Rate Date Due Physical Occ (Apr-17) Est Ins per Unit per Yr Property Tax Information 2016 Tax Rate/$100 Water Meter / Master Elec Meter RUBS HVAC-Indiv Est Res for Repl/Unit/Yr Yield Maintenance 2017 Preliminary Tax Assessment Est 2017 Taxes Roof Style Pitched Est Future Tax Assessment HVAC System Individual Est Future Taxes $114,912 $99,356 97% $ $4,244,857 $108,721 $5,090,371 $130,377 INCOME PRO-FORMA INCOME Current Street Rent with a 3% Increase 1,420,315 Estimated Gross Scheduled Income 1,420,315 Estimated Loss to Lease (2% of Total Street Rent) (28,406) 2% Estimated Vacancy (2% of Total Street Rent) (28,406) 2% Estimated Concessions and Other Rental Losses (4% of Total Street Rent) (56,813) 4% Estimated Utilities Income 92,314 Estimated Other Income 72,145 Estimated Total Rental Income ESTIMATED TOTAL PRO-FORMA INCOME MODIFIED ACTUALS PRO-FORMA $118,360 / Mo $118,360 / Mo $599 / Unit / Yr $468 / Unit / Yr 1,471,148 1,471,148 $122,596 / Mo December 2016 Income Annualized EXPENSE Fixed Expenses Taxes Insurance Total Fixed Expense Utilities Electricity Water/Sewer Gas $1,192,266 Jan thru Dec 2016 Expenses Fixed Expenses $102,226 $664 per Unit $50,104 $325 per Unit Utilities $5,964 $39 per Unit $115,392 $749 per Unit $22,515 $146 per Unit Estimated Expenses Estimated Fixed Expenses 12/16 Trailing Operating Statement $130,377 $50,050 $847 per Unit $325 per Unit Estimated Estimated 152, ,427 $989 per Unit $1,172 per Unit Estimated Utilities $15,400 $100 per Unit $115,392 $749 per Unit $22,515 $146 per Unit Total Utilities 143,871 $934 per Unit 153,307 $996 per Unit Other Expenses Other Expenses Estimated Other Expenses General & Admin & Marketing Repairs & Maintenance Labor Costs Contract Services $4,236 $154,014 $145,023 $18,201 $28 per Unit $1,000 per Unit $942 per Unit $118 per Unit $38,500 $115,500 $184,800 $23,100 $250 per Unit $750 per Unit $1,200 per Unit $150 per Unit Management Fees $30, % $195 per Unit $44, % $287 per Unit Total Other Expense 351,475 $2,282 per Unit 406,034 $2,637 per Unit Total Operating Expense 647,675 $4,206 per Unit 739,768 $4,804 per Unit Reserve for Replacement 46,200 $300 per Unit 46,200 $300 per Unit Total Expense 693,875 $4,506 per Unit way lower than normal 785,968 $5,104 per Unit Net Operating Income (Actual Underwriting) 498, ,180 Valuation Market Price Market Price NOTES: ACTUALS: Income and Expenses calculated using owner's 12/16 Trailing Operating Statement. PRO FORMA: Income is Pro Forma as Noted. Taxes and insurance are Estimated. Management Fees calculated as 3.% of Gross Income, Other expenses are Estimated for the Pro Forma. Please note that the Loan payment in the amount of $232, has been removed from the Owner's operating statement. DISCLAIMER: The information contained herein has been obtained from sources that we deem reliable. We have no reason to doubt the accuracy of the information, but we have not verified it and make no guaranty, warranty or representation about it. It is your resonsibility to independently confirm its accuracy and completeness. We have not determined whether the property complies with deed restrictions or any city licensing or ordinances including life safety compliance or if the property lies within a flood plain. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME OR EXPENSE AND PERFORM OR HAVE PERFORMED ANY INSPECTIONS TO VERIFY POSSIBLE CONTAMINATION BY ASBESTOS, LEAD PAINT, MOLD OR ANY OTHER HAZARDOUS SUBSTANCES. The owner reserves the right to withdraw this listing or change the price at anytime without notice during the marketing period. 5/25/2017 NorthParkTH

4 Age: 1982 Mortgage Balance Property Overview Renovated: 2008 Amortization (months) Aldine ISD $ Elec Meter: Individual P & I Harris County $ A/C Type: HVAC-Indiv Type 16% Harris County Flood Control $ Water: RUBS Assumable Port of Houston Authority $ % Wiring: Copper Monthly Escrow Harris County Hospital District 21% $ Roof: Pitched Origination Date Harris County Education Dept $ Paving: Asphalt Due Date Lone Star College $ Materials: Brick/Wood Interest Rate HC Emergency Serv Dist 28 & 11 $ Bed/1 Bath 2 Bed/1 Bath # of Stories: 2 Yield Maintenance North Park PUD $ Buildings: 18 Transfer Fee 2016 Tax Rate/$100 $ Parking: 400 Spaces 2017 Preliminary Tax Assessment $4,244,857 Units/Acre: Bed/2 Bath 2 Bed/2.5 Bath KeyMap: PROPERTY INFORMATION 332L Dec 2016 $ 99,356 Jan 2016 $ 90,289 Feb 2016 $ 89,397 Mar 2016 $ 89,607 Apr 2016 $ 92,127 May 2016 $ 90,987 June 2016 $ 91,921 July 2016 $ 89,976 Aug 2016 $ 101,351 Sept 2016 $ 97,428 Oct 2016 $ 89,241 Nov 2016 $ 94,564 Dec 2016 $ 99,356 CURRENT MORTGAGE COLLECTIONS $104,000 $102,000 $100,000 $98,000 $96,000 $94,000 $92,000 $90,000 $88,000 $86,000 $84,000 $82,000 PLEASE DO NOT VISIT THE SITE WITHOUT AN APPOINTMENT MADE THROUGH THE BROKER. PROPERTY HIGHLIGHTS UNIT MIX TAXING AUTHORITY Harris County ACCT #: The Northpark Townhomes, formerly known as The Woods of Northpark, is a two story, garden-style, apartment community located in the Champions/FM 1960 East submarket of Houston,Texas. The asset was built in Residents enjoy ample amenities which include: mini-blinds, ceiling fans, laundry facilities, patios and balconies and walk-in closets. All units are equipped with washers and dryers. Per O'Connor Online, current leasing concessions include $99 for the first month's rent. The property would respond nicely to a light to moderate rehab (could use some exterior paint and interior upgrades). There is a LURA in place which holds back the rents! The area should be positively impacted by the Exxon/Mobil campus, about 6.4 miles away, with up to 40K professionals moving there to work! 9.09% Apartment Features Ceiling Fans Mini Blinds Large Bedrooms Walk-In Closets Patios & Balconies W/D in Every Unit Central Air Conditioning Community Features Sparkling Swimming Pool Perimeter Fence Video Library Cable Ready Access Gates Fitness Center Playgrounds Disclaimer: The information contained in this Memorandum reflects material from sources deemed to be reliable, including data such as operating statements, rent roll, etc. provided by the Owner. Notwithstanding, KET Enterprises Incorporated does not make any warranties about the information contained in this marketing package. Every prospective purchaser should verify the information and rely on his accountants or attorneys for legal and tax advice. This offer is As-Is, Where-Is. Answers to specific inquiries will have to be supplied by the Owner and are available upon request. Rates of return vary daily. No representations are made concerning environmental issues, if any.

5 Property Location Northpark Towonhomes Northpark Townhomes DIRECTIONS TO PROPERTY: From Downtown take I-45 North toward Dallas. Continue on I-45 north approx 15 miles. Exit FM 1960 and make a right onto Highland Cross Rd. Turn left onto Imperial Valley Dr. The property is on the right.

6 Property Location Northpark Townhomes is a 155-unit townhome community located in the excellent growing suburb of Spring in northwest Houston. This Class B residential community is located less than five minutes west of Interstate 45 and benefits from its close proximity to some of Houston s top employers including Hewlett Packard, LoneStar College, Shell, United Continental Airlines, and ExxonMobil. Northpark Townhomes offers residents a unique combination of first-rate amenities, excellent access to main highways, retail shops, large employment centers, and recreational destinations. The Property is located among some of Houston s largest employers including Hewlett Packard (approximately 10,000 employees with a 3.8M square feet of office space), LoneStar College (approximately 10,000 students located on an 80-acre campus), Shell, United Continental Airlines and the Exxon/Mobil office campus. The Property is surrounded by retail along both adjacent major thoroughfares allowing residents convenient access to shopping, dining and entertainment options. Restaurant options include: Neighborhood and shopping conveniences include: Texas Roadhouse Kroger Red Lobster Walgreens Chili s Target Additional restaurants and retailers are located at Willowbrook Sam s Club Mall, featuring Macy s, Sears, Dillard s, and JCPenney. CVS Nearby recreation includes Lents Family Park, featuring picnic Walmart. pavilions, playground, splash pad, walking trail, soccer fields, and a dog park. Northpark Townhomes

7 Unit Mix UNIT MIX APRIL 2017 Unit # Type No. Units Sq Ft Total SqFt Market Rent Total Rent Rent/SF 1 Bed/1 Bath ,928 $662 $55,612 $ Bed/1 Bath ,992 $850 $27,200 $ Bed/2 Bath ,712 $760 $18,240 $ Bed/2.5 Bath 14 1,117 15,638 $990 $13,860 $0.89 TOTALS AND AVERAGES ,270 $746 $114,912 $0.97 Total Units Average Sq. Ft. Total Sq. Feet Average Rent/Unit Total Rent Average Rent/ SF THDCA INCOME & RENT LIMITS INCOME LIMITS Effective Date 4/14/17 Percent Size of Houshold % (VLI) $25,050 $28,600 $32,200 $35,750 $38,650 $41,500 $44,350 $47,200 04/14/17 80% (LI) $40,050 $45,800 $51,500 $57,200 $61,800 $66,400 $70,950 $75,550 04/14/17 RENT LIMITS Number of Bedrooms Very Low Income Low Income $606 $695 $783 $927 $1,070 $1,129 04/14/17 $881 $1,010 $1,137 $1,351 $1,556 $1,648 04/14/17

8 Floor Plans 1 Bedroom/1 Bath 642 Square Feet 2 Bedroom/1 Bath 781 Square Feet 2 Bedroom/2.5Bath 1,117 Square Feet 2 Bedroom/2 Bath 988 Square Feet

9 Rent Comparables RENT COMPARABLES (May 2017 Apartment Data Services) Sorted by Avg Rent/Unit Property Name Yr Blt Occ #Units Avg SF Avg Rent P/SF 1 La Monterra (FNA The Chancellor) 311 Parramatta Lane (+EWG) % $ Rock Creek at Hollow Tree II 200 Hollow Tree R (+EWG) % $ Sedona Pointe 311 Highland Cross R (+E) % $ Preakness of Cypress Station 210 Wells Fargo (+EWG) % $ Woodcreek Village 3023 Woodcreek Lane (+EW) % $ R = rehabbed; U = unstabilized Resident Pays - E (Electricty) W (Water) G (Gas) Totals/Averages Comps % $ Northpark Townhomes % $746 $0.97 Sub-Market Averages (Willowbrook/Champions) 90% 39, $ Houston Market Avgs 88% 634, $ Northpark Townhomes

10 Sales Comparables SALES COMPARABLES (Sorted by Price/Sq. Ft.) Property Name Date Sold Price Sq. Ft. Price/Unit Price/SF Built Units $0 1 Citation North pending $9,676, ,656 $41,000 $ Highland Cross 2 Briar Park Old Bammel N Houston 3 Champions Village Greenwood Forest 4 Landmark at Kendall Manor Inverness 1/14 $3,125,000 73,232 $39,063 $ SALES COMPS AVAILABLE UPON REQUEST 5/13 $13,800, ,092 $49,640 $ /14 $15,232, ,468 $56,000 $ The Preserve at Cypress Creek 1007 Cypress Station Dr 3/13 $9,100, ,512 $58,333 $ Totals/Averages Comps $10,186, ,992 $48,807 $ Northpark Townhomes Market Price 118, Northpark Townhomes

11 Sub-Market The FM 1960 Submarket is a dynamic community approximately 15 miles north of downtown Houston, approximately 10 miles southeast of the Exxon/Mobil Campus and minutes from Bush Intercontinental Airport. This prime location makes the area ideal for companies conducting business locally and around the globe. Many of Houston's largest companies call this area home. The area's strengths include: Easy commutes to locations throughout Houston via: Interstate 45 Sam Houston Tollroad Hardy Toll Road U.S. Hwy 59 The Grand Parkway Exceptional IT infrastructure Close proximity to a diverse workforce Strong presence of global companies Incentives for developers Exxon Mobil North American Headquarters The campus is located on 385 wooded acres immediately to the west of Interstate Highway 45 (I-45), at the intersection of I-45 and the Hardy Toll Road, approximately 25 miles from the cultural vibrancy of downtown Houston and 6.4 miles north of The Chancellor. Already an integral part of the Houston community, ExxonMobil will continue to engage with business, community and charitable organizations across the greater Houston area. This project will provide significant economic benefits for Texas and the local economy even after construction is complete. An independent economic impact study estimates the campus will create approximately 36,000 jobs during construction and 44,000 permanent jobs during ongoing operations. The campus is constructed to the highest standards of energy efficiency and environmental stewardship. The Campus will feature multiple low-rise office buildings, a state-ofthe-art meeting and training center, a laboratory, wellness center, a child development center, and dining and retail amenities. Reportedly there are 4 stories below ground! Willowbrook Mall Pinto Business Park FM 1960 EAST SUBMARKET Source: Apartment Data Services - May 2017 FM 1960 East Houston Sub-Market Market Total Projects 158 2,709 Total Units 39, ,341 Avg Unit/Project Units Under Constr N/A 9,386 Units Proposed Avg Occupancy N/A 90.20% 17, % Avg Rent $ $ Avg Rent/SF $0.902 $1.107 Farouk Systems US headquarters encompasses 300,000 square feet and 600 employees. Their recent expansion includes a 500,000 square foot facility and 1,200 employees, as well as projecting the addition of 4,000 employees in the next few years. Pinto Business Park, a 971 acre controlled class "A" industrial business park located at the southwest corner of Interstate 45 and Beltway 8 in the north/northwest submarket, has the potential to total 9 million square feet when fully built out. Bush Intercontinental Airport generates a $1.6 billion impact on the local economy and a regional impact of $24.2 billion. The airport system supports $5 billion in total payroll and 200,000 full time jobs. It's the 8th busiest airport in the nation and is named the fastest growing airport among the top ten major airports in the nation. The biggest impact from Exxon/Mobil's impending completion may well be on the housing market, where property values are soaring and builders are confidently breaking ground on thousands of new homes. Housing inventory has fallen sharply. Existing home prices are rising and a buyer would be pressed to find a new house in The Woodlands for less than $250,000. A few years ago, new homes could be found in the high $100,000s. The median price here has jumped nearly $100,000 in three years, from $260,000 in December of 2010 to $355,000 December Due to the employment "ripple" effect of the Exxon/Mobil Campus, there is very little inventory of Class B, multi-family housing available in the area around The Chancellor. This positions The Chancellor with the enviable ability to offer affordable housing to the huge influx of employees that have been (and will be moving) to the north Houston area. North Houston is bracing itself for the wave of people moving to the area."we describe it as the tsunami headed this direction," said Virgil Yoakum, general manager of Woodforest, a master-planned community between The Woodlands and Lake Conroe. Source: February 3, 2014

12 249 Technology Corridor 290 Industrial Corridor Energy Corridor The Woodlands ❶ ❷ ❹ ❸ ❺ ❻ ❽ ❿ ❾ ❼ Greenspoint Downtown Northpark Townhomes ❶ ExxonMobil North American Headquarters Currently developing a 3.5 million SF campus set to bring 10,000 employees and 40,000 total jobs. ❷ Southwestern Energy Campus Currently developing a new campus for its 1,000 Houston employees. ❸ Kindred Hospital A transitional care hospital dedicated to providing care to medically complex and catastrophically ill patients. Area Industry ❹ Houston Northwest Medical Center Medical staff of approximately 600 members offering a wide range of inpatient, outpatient and diagnostic imaging services. ❺ Hillwood Industrial Development Expected completion in ,000 SF Industrial complex with 120 docks. ❻ Farouk Systems Farouk Systems now has more than 2,000 employees and product distribution in over 100 countries worldwide. ❼ George Bush Intercontinental Airport Served 39.8M passengers in th busiest airport in the world and 12th busiest in North America (for passenger traffic). ❽ Rankin Road Industries Major employers such as Schlumberger; Honeywell, Baker Hughes, Borden and several oil and gas businesses are situated along Rankin road. AREA INDUSTRIAL DEVELOPMENT ❾ Greenspoint Business District More than 4,400 companies and 18 million SF of office, retail and industrial space. ❿ Pinto Business Park 971 acre class "A" business park. Home to Sysco Corporation's 585,000 SF distribution center.

13 HOUSTON, TEXAS A T A G L A N C E The City of Houston, the largest city in Texas and the fourth largest city in the United States, is located on the coastal prairies of southeast Texas and is home to a diverse array of industries and cultures. Houston is located in Harris County, the nation s third most populous county. The Houston region, officially designated as the Houston - Woodlands - Sugar Land Metropolitan Statistical Area (MSA), comprises Harris County and eight other counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller. The Houston MSA has a population of approximately 6,656,947 according to new U.S. Census Bureau estimates. The nine county metropolitan area is the fifth-largest metropolitan area in the nation and covers 9,444 square miles. The most urbanized portions of the Houston area are in Harris County, the southern part of Montgomery County, and the eastern section of Fort Bend County. Houston is home to the tenth largest port in the world and is in close proximity to Mexico, a key trading partner. It has a temperate climate and an affordable cost of living. With a population exceeding 2.3 million, the population base includes a wide variety of racial and ethnic groups that give Houston a rich diversity and cosmopolitan feel. The U.S. Bureau of Economic analysis estimates metro Houston's Gross Domestic Product (GDP) at around $503.3 billion. If the MSA were an independent nation, its economy would rank 23rd largest in the world, behind Taiwan ($523.6 billion), but ahead of Sweden ($499.4 billion). Source: Greater Houston Partnership Research, December 2016

14 Ever since its founding as a port city, Houston has been a dynamic international marketplace, attracting capital and people from all over the world. Today, Houston is the nation's fourth largest economy, and what Forbes calls "America's next great global city." Houston s annual trade growth is among the highest in the nation with a total annual trade value growth of 84.6 percent, from $ million in 2005 to $ million in 2015; exceeding the nation s growth rate of 45.2 percent during that same period. Houston is already a leading exporter, and our exports have increased 189% since In fact, Houston is the #1 metro exporter in the top energy related industries. But recent low oil prices have slowed our rate of growth. A plan to boost goods exports can further diversify our economy, help existing companies grow, and create more jobs. Houston's export plan will connect small and medium-sized enterprises to growing markets, while positioning the region as a location of choice for global investors. Source: Greater Houston Partnership Research, December 2016

15 Despite Setbacks Houston Still has a Strong Economy From 2010 to 2014, Houston added nearly half a million jobs. This period of phenomenal growth provided the momentum needed to sustain the region through the early stages of the energy downturn that began at the end of '14. As oil prices and rig counts fell through '15 and early '16, Houston's job growth began to slow. In '15, the region added 15,200 jobs, and added 13,400 jobs in the 12-months ending Oct '16. In spite of the energy industry's worst downturn in history, Houston managed to post 12-month net job gains throughout this period. No Single Industry or Sector Dominates Houston Employment A strong U.S. economy, momentum from the previous economic boom, robust population growth, and the $50 billion in petrochemical plant expansions have helped offset losses in upstream energy and manufacturing. Houston's Service-Providing Sector Continued to Add Jobs During the Energy Downturn The goods-producing industries (mining and logging, construction, and manufacturing) peaked at 586,300 jobs in December '14, then fell to 536,400 jobs in October '16. Mining and logging, primarily oil and gas extraction and support activities, lost 25,600 jobs, a 22.9 percent decrease. These losses rippled through the economy, triggering declines in other sectors, particularly durable goods manufacturing, wholesale trade and professional and business services. Source: Texas Workforce Commission Aug '16 Construction, helped by the petrochemical plant expansions on the eastside of Houston, gained 6,100 jobs over the same period. Manufacturing lost 30,400 jobs and fabricated metal products lost 12,100 jobs. Construction and mining machinery lost 14,200 jobs, and computer and electronics lost 2,300 jobs. The service-providing industries added 66,600 jobs between December '14 and October '16. Gains in industries that rely on population growth offset losses in sectors tied to energy. Trade, transportation, and utilities lost 1,400 jobs, financial activities added 3,000 jobs, and professional, scientific and technical services cut 7,700 jobs. Healthcare and social assistance added 24,500 jobs, accommodation and food services added 27,600, and government gained 14,700 jobs. The service industries account for 4 out of 5 workers in the region The goods-producing sector accounts for nearly 1 in 5 of the region's jobs Source: Greater Houston Partnership Research, December 2016

16 E c o n o m i c F o r e c a s t Renowned Real Estate Economist States: ' The Downturn Seems to be Over' According to an article by Jim Gaines, a research economist at the Real Estate Center at Texas A&M University, dated January 6, 2017, in the Houston Business Journal, the economic downturn that began in November 2014 seems to be over. Jim Gaines states there's generally a two-to three-year lag between the time the energy sector goes into a slump and all of its impacts on the economy are felt. Houston's energy slump unofficially began on November 27, 2014, when OPEC announced it wouldn't adjust oil production levels. Gaines said that Houston should see some of the slump's final lag effects this year. Gaines also noted that 2016 is poised to be the best year on-record for Houston home sales. The Greater Houston Partnership recorded that November 2016's home sales were the best November on-record for single-family home sales. Much of that boom can be attributed to Houston's population growth. Despite the oil slump, few residents are leaving Houston. In 2016, Houston welcomed 132,000 new residents (45,600 households). Gaines also states that Houston's population is expected to rise to 7.4 million by 2020 and should double to 14 million by Additionally, according to an article dated January 11, 2017, by G. Scott Thomas of Buffalo Business First, a sister paper to the Houston Business Journal, Houston is on the brink of a population milestone. Buffalo Business First has developed a computer formula that uses 15 years of demographic data to estimate the population of any community at any given moment, and according to predictions by Business First Houston will reach 6.9 million on March 13, 2017 and 7.0 million on November 17, Source: 1/6/16, Cara Smith What are other signals the downturn is over? As stated by the Greater Houston Partnership's '2017 Houston Employment Forecast': West Texas Intermediate (WTI) the U.S. benchmark for light, sweet crude, now trades near $50/barrel. WTI traded as low as $26 in mid-february The number of drilling rigs working in the U.S. reached 593 in mid-november. Only 404 rigs, the fewest in recent history, were in the field in mid-may. After 21 months below 50, the Houston Purchasing Managers Index hit 51.1 in October Readings above 50 signal pending expansion; below 50, contraction. The region created 13,400 jobs in the 12 months ending October '16. growth had sunk as low as 3,200 jobs in May '16. Annualized The forecast also asserts, "the recent downturn could be compared to a tropical storm. The damage done depended on where one stood as the system passed over Houston. Those businesses closest to the energy industry felt the full fury of the storm. Those distant from oil and gas, to extend the metaphor a bit further - on the dry side of the storm - were buffeted but not blown away." The forecast calls for the strongest job growth in manufacturing, wholesale trade, retail trade, finance and insurance, real estate, business, professional and technical services, other services and government. Source: Greater Houston Partnership Research, December 2016

17 MULTI-FAMILY... Moving Forward Cautiously Since December '14, developers have added more than 37,000 units to local inventory. Another 15,000 are under construction, the majority scheduled to open in the next 12 months. That equates to 52,000 units delivered in a market that's just beginning to recover. Over the past 12 months, the region has absorbed about 6,500 units. The glut cut overall occupancy to 88.9% in November '16, down from 91.5% at its June '15 peak. Occupancy rates below 90% favor tenants. Rents have responded accordingly, dropping between 2% and 6% depending on the apartment class. The market absorbed 14,000 Class A units through the first 10 months of '16, but this performance came at the expense of Class B, C and D properties, which collectively lost 7,500 tenants over the same period. Traditional Class B and C tenants have been enticed into the Class A market with deposit waivers, free rent (as much as 3 months) and other enticements. Whether these tenants renew their leases remains to be seen, but is however, doubtful. If one uses the industry rule of thumb that for every six jobs created, the market absorbs one unit, then Houston needs to add 156,000 jobs to cut the current surplus in half. Once the economy recovers, growth should return to the long-term trend - 50,000 to 60,000 per year. Source: Greater Houston Partnership Research, December 2016 Ignoring Class B and C Apartment Market is a 'Big Mistake' Despite the fact that during the economic downturn some Class B and C tenants were lured into the Class A market with large free rent waivers and other concessions, with the improving conditions a large portion of them most likely will not renew and will return to the Class B and C market. In an article in the Houston Business Journal, dated September, 28, 2016, by Paul Takahashi, Todd Marix of Holliday, Fenoglio, Fowler (HFF) observed that ignoring the Class B and C apartment market is a 'big mistake'. As stated by the article, when Todd Marix brought Broadstone Grand Parkway to market he expected he might receive bids from six or seven interested buyers - par for the oil downturn. The 342-unit garden apartment complex, built in 2009, had solid occupancy in the high 90th percentile but was offering two months free rent amid increasing competition from nearby apartments in Katy. However, Marix's multifamily investment team at HFF received a whopping 18 bids for the property. The deal is still under contract but Marix said it sparked a bidding war between local and out-of-town private equity firms. "We were shocked by the level of participation," Marix said. "We haven't seen this kind of bidding behavior in a long time. It tells me there's some optimism in the market." Despite the oil slump, many opportunistic apartment buyers are returning to Houston in search of good deals, according to Marix. Young apartment investors are also looking to get into the market during the oil slump, Marix said. These buyers are willing to accept lower rents for one or two years and hope that Houston's apartment market will recover around "Buyers like Advenir are relatively new to Houston, but they like the recovery aspect," Marix said. "These buyers have patient capital and want to buy in Houston at an advantageous time. They know things will be bumpy for the next year or two but are hoping they will come out the other end with a great deal." Most of these new Houston buyers are focusing on the city's Class B and C apartment market during the energy downturn, Marix said. Marix estimates there are about 620,000 apartment units in Houston, of which the majority - two-thirds - are Class B and C apartments. Source: 9/28/16, Paul Takahashi

18 BUSINESS EDUCATION (AGE 25+) INCOME RACE AND ETHNICITY HOUSEHOLDS POPULATION Demographics SUMMARY PROFILE 1 Mile Radius 2 Mile Radius 3 Mile Radius Census, 2017 Estimates with 2022 Projections Calculated using Proportional Block Groups Total Ethnicity % Including Hispanic - 1 Mile Radius 2017 Estimated Population 13,807 54, , Projected Population 15,797 61, , Census Population 10,060 42,160 83, Census Population 7,321 27,465 55,289 28% White Projected Annual Growth 2017 to % 2.3% 2.2% Historical Annual Growth 2000 to % 5.9% 5.4% 2017 Median Age % Black Asian Other Hispanic 2017 Estimated Households 5,764 20,548 39, Projected Households 6,571 22,822 43, Census Households 4,102 15,240 29, Census Households 3,364 11,354 22,126 18% 11% 2% Ethnicity % Hispanic & Non-Hispanic - 1 Mile Radius Projected Annual Growth 2017 to % 2.2% 2.1% Historical Annual Growth 2000 to % 4.8% 4.5% 2017 Estimated White 46.9% 45.9% 48.9% 2017 Estimated Black or African American 31.0% 32.5% 30.5% 2017 Estimated Asian or Pacific Islander 3.6% 4.1% 4.7% 2017 Estimated American Indian or Native Alaskan 0.6% 0.6% 0.5% 2017 Estimated Other Races 17.9% 16.8% 15.3% 41% 59% Non-Hispanic Hispanic 2017 Estimated Hispanic 41.3% 36.6% 33.7% 2017 Estimated Average Household Income $54,210 $64,032 $71, Estimated Median Household Income $46,904 $53,972 $60, Estimated Per Capita Income $22,656 $24,009 $26, Estimated Elementary (Grade Level 0 to 8) 9.3% 7.4% 6.6% 2017 Estimated Some High School (Grade Level 9 to 11) 7.5% 8.0% 7.6% 2017 Estimated High School Graduate 27.2% 28.0% 27.2% 2017 Estimated Some College 28.6% 27.2% 26.3% 2017 Estimated Associates Degree Only 6.2% 6.1% 7.0% 2017 Estimated Bachelors Degree Only 15.8% 16.9% 16.9% 2017 Estimated Graduate Degree 5.3% 6.5% 8.5% Average Income Subject - 1 Mile Radius $80,000 $72,703 $70,000 $60,000 $54,210 $50,000 $40,000 $30, Estimated Total Businesses 467 1,690 3, Estimated Total Employees 5,156 18,753 37,911 $20, Estimated Employee Population per Business $10, Estimated Residential Population per Business $0 Subject Houston

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25 EXCLUSIVELY PRESENTED BY KET ENTERPRISES INCORPORATED 4295 San Felipe, Suite 355 Houston, TX Tel: (713) Fax: (713) FOR MORE INFORMATION PLEASE CALL:. PRIMARY CONTACT: HASHIR SALEEM Broker/Senior Associate (713) xt 106 Disclaimer: The information contained in this Memorandum reflects material from sources deemed to be reliable, including data such as operating statements, rent rolls, etc. However, we (KET Enterprises Incorporated or any of the Owners or officers, directors, employees, agents or representatives of any such entities) have not verified its accuracy and make no guarantee or representation about it. It is submitted subject to the possibility of errors, omissions, change of rental or other conditions. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. We make no representations or warranties, expressed or implied, as to the validity, accuracy or completeness of the information provided or to be provided, and nothing herein shall be deemed to constitute a representation, warranty or promise by any such parties as to the future performance of the Property or any other matters set forth herein. You and your tax and legal advisors should verify the information and rely on his accountants or attorneys for legal and tax advice. Rates of return vary daily. No representations are made concerning environmental issues, if any.