OFFERING MEMORANDUM APARTMENT HOMES. Multi-Family Brokerage or License # hipapt.com

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1 OFFERING MEMORANDUM APARTMENT HOMES License # hipapt.com Multi-Family Brokerage or

2 offer terms and requirements EXCLUSIVE OFFERING: Terrace Villas Apartment Homes El Camino Real Houston, TX LISTING BROKER: Houston Income Properties, Inc Offer Date: Submitting Offers to the Owner as Received Offering Process: Property is being offered on an Assumption of the existing "potentialy resizable" below market rate loan to qualified purchasers. Offer Guidelines: Offers should be presented in the form of a non-binding Letter-of-Intent and must include at least: Purchase Price Earnest Money Deposit Amount Feasibility Period Closing Date Other terms and conditions particular to the buyer s investment process Summary of buyer s qualifications and evidence of financial ability to close Site Visits: All requests for additional information are to be made through the broker Principals and their representative shall please refrain from contacting any onsite personnel or residents. Disclaimer: The offering is subject to the Disclaimer contained herein. 2 of 42

3 table of contents EXECUTIVE SUMMARY 4 Investment Summary Property Information (2 pages) Location Maps (2 Pages) Property Aerial FINANCIAL ANALYSIS 10 Actual and Pro Forma Analysis 10 Year Cash Flow Analysis Value Projection at 60 Months Existing Assumable Loan Information PROPERTY OVERVIEW 15 Community Features Floor Plans Site Map Neighborhood Aerial Harris County Plat Flood Map MARKET OVERVIEW 22 Secondary Market Statistics Comparative Rental Properties Rent Comparatives Map LOCATION OVERVIEW 26 Houston MSA Facts City of Webster Map Community Profile Area Business Houston Demographics Webster Demographics Neighborhood Demographics PHOTO GALLERY 34 Property Photos (8 pages) LEGAL INFORMATION 41 Brokerage Services Information 3 of 42

4 investment summary PROPERTY DESCRIPTION INVESTMENT PROFILE Name: Terrace Villas Apts. Type of Sale: Address: El Camino Real ASKING PRICE: No Official Asking Price City / State: Houston, TX Current NOI: $698,952 Projected NOI: $991,036 PLEASE DO NOT VISIT THE PROPERTY WITHOUT MAKING AN APPOINTMENT THROUGH THE BROKER. Assumption of Existing Below Market Interest Rate Loan For Current and Projected NOI see analysis in the financial section Property Type: 2 Story - Garden Style Apartments Current Occupancy: 86% As of No. Apt. Buildings: 14 RUBS: Water/Sewer & Trash Yr. of Construction: 1972 Per CAD Primary Market Area: HOUSTON OPERATING APARTMENT PROPERTIES Materials: Brick and Siding Number of Units: 150 Secondary Market Area: Clear Lake / League City Sub Market Scheduled Market Rent: $135,575 / Mth Total Rentable SF: 124,613 Avg. Rent / Unit: $ Avg. Unit Size: 831 S.F. Avg. Rent / SF: $1.09 EXECUTIVE SUMMARY Location Terrace Villas is well located on El Camino Real and near the new Nasa Bypass in the Clear Lake submarket. Major employers near the property are Webster Health Care Corridor, Johnson Space Center, Nassau Bay Town Square and the Port of Houston. The Clear Lake Submarket is one of the stronger sub markets in the Houston MSA. Average occupancies in all classes are approximately 94%. Rents have increased in this submarket more than 10% in the last two years. Property Information 27 units had some water in them due to Harvey and are in the process of being rehabbed. In 2014 the exterior and interior of the property was significantly rehabbed including granite counter tops and new stainless steel appliances, new cabinety and brushed nickel hardware and 2" faux wood blinds (see pictures in the photo gallery). Unit Features Large Spacious 1, 2 and 3 Bedroom Floor Plans, Fully Equipped all Electric Kitchens, Tile Flooring, Window Coverings, Ceiling Fans, Granite Countertops, Stainless Steel Sinks, Stainless Steel Appliances, Ceramic Tub and Tile surround, Decorative Bathroom Mirrors, Updated Toilets, Cable Ready, Built In Microwave, Wood Cabinets, Dishwasher, Ice Maker & Garbage Disposal, TiledEntry, Wood Style Flooring, PlushCarpet, Walk in Closets andwasher and Dryer Connections (Interior appointments vary in each design). Community Amenities Natural Stone Pool, Easy Access to Major Thoroughfare, 2 Clothes Care Centers, Picnic Areas, Ample Surface and Assigned Covered Parking, within Close Proximity of Major Employers, Gated Community with Access Control, Sprinkler System and the property is Convenient to Area Schools. 4 of 42

5 property information PRICING INFORMATION No Official Asking Price Good Upside Potential with Income Stabilization PROPERTY INFORMATION UNIT MIX - CURRENT MARKET RENTS - Consolidated Units: 150 Avg. Size Unit: 831 S.F. UNIT TOTAL RENT / TOTAL RENT #UNITS NOTES SQ. FT. Year Built Per CAD 1972 TYPE SQ. FT. UNIT RENT PER SF Electric Meter: Individual 12 Eff 419 5,028 $650 $7,800 $1.55 Roof: Pitched - Composition ,172 $750 $21,000 $1.16 Land (Acres) Per CAD: Existing Loan to be Assumed Rentable Sq. Ft: , ,916 $800 $800 $800 $27,200 $1.23 $1.19 Estimated Total Collections ~ (Occupancy is {86%} as of RR) ,270 $900 $18,895 $1.03 Mth. Mar-2018 Feb-2018 Jan-2018 Dec ,539 $920 $21,155 $1.03 Coll. $124,241 $112,248 $108,991 $109, ,365 $1,175 $12,925 $ ,416 $1,225 $7,350 $ ,944 $1,200 $4,800 $0.97 Upside with Continued interior ,848 $1,200 $4,800 $ ,466 $1,475 $8,850 $1.05 improvements and Income Stabilization Terrace Villas is an excellent opportunity for an investor to purchase a class "B" apartment community consisting of 150 units in the Clear Lake area of Houston, Texas. Clear Lake is home to the Johnson Space Center (NASA) and the property is in close proximity to major employers in the area such as Webster Health Care Corridor, Nassau Bay Town Square, The Port of Houston, and Ellington Airport all of which have or are undergoing major expansions. The area has above average income levels when compared to Houston as a whole. The property is offered on an Assumption of the existing, below market interest rate loan which is potentially resizable. The property had 27 units that took on water during Hurricane Harvey and have since been rehabbed and brought back on line % ,613 $904 $135,575 $1.09 TOTAL EST. OCC. AVG. TOTAL SQ. AVG. TOTAL RENT AVG. UNITS SQ. FT. FT. RENT/U RENT/SF 10% 5% 6% 29% 36% By Unit Type 5% 9% Eff Unit Mix Stats 8% 4% 3% 4% 20% 8% 23% By Sq. Ft. 16% 14% of 42

6 property information PROPERTY TAX HCAD# Taxing EntityRate/$100 of Value Clear Creek ISD 1.4 Harris County Port of Houston City of Webster Clear Lake City WA Tax Rate 2017 Assmt $8,800,000 Approx. Total Tax $230,773 CONSTRUCTION FEATURES Age: 1972 Electric Meter: A/C Type: Individual Individual HVAC Water & Gas: Master / RUBS Hot Water: 2 Gas Fired Boilers Roof: Pitched - Composition Paving: Asphaltic Concrete Exterior Construction: Brick / Siding # of Stories: 2 Story - Garden Style Apartments Parking: Open Spaces and Covered Spaces No. Apt. Buildings: 14 Units / Acre: 24 1.) Offered on Assumption of the Existing, Potentially Resizable, Below Market Rate Loan 2.) "B" Grade Apartment Community in the Clear Lake area of Houston 3.) Located in the Clear Lake / League City sub-market of Houston. The market is currently a stable market with occupancies in the mid to low 90% range for "B" and "C" class Apartments. This is attributed to the many major employment centers in the area. 4.) 27 units have just received a significant rehab 5.) The Property received a major exterior and interior rehab in ) Terrace Villas is within a short commute to Houston, Galveston and Pearland 7.) Convenient access to the area's major thoroughfares 8.) Located minutes from fine dining, boutique shopping and large grocery store chains 9.) Located in the Clear Creek ISD PROPERTY HIGHLIGHTS 10.) Short commute to the Major Employers in the Area such as Johnson Space Center and Supporting Industries, Ellington Airport, William P Hobby Airport, Port of Houston, Baybrook Mall, Webster Health Care Corridor, University of Houston Clear Lake and a 20 mile commute to Downtown Houston AREA HIGHLIGHTS Terrace Villas is located in the Clear Lake area, which is considered part of the Houston MSA. The City of Webster, which borders Clear Lake, is the nucleus of Bay Area Houston with its strategic position midway between Galveston and downtown Houston. It is considered the central business district of Clear Lake in that over 80% of the city is commercial. For the past several decades Webster has become renowned as the retail, dining and entertainment capital of Bay Area Houston, the medical center south, and the aerospace capital of the United States. Webster s strategic location, key industry sectors, super-regional market and business friendly credo contribute to the city s commercial vibrancy. Webster s central corridors consist of Interstate 45 with traffic counts of over 250,000 vehicles daily, Bay Area Boulevard with 100,000 vehicles daily, and NASA Parkway with 75,000 vehicles daily. Its retail stronghold is predicated on its central location midway between downtown Houston and Galveston. Webster s trade area is considered super-regional, consisting of more than 3,440,000 people. Within a 15-mile radius, there are 24 cities whose residents depend on Webster s retailers, restaurants and entertainment venues. 6 of 42

7 location map Terrace Villas APARTMENT HOMES 7 of 42

8 location map Terrace Villas APARTMENT HOMES 8 of 42

9 property aerial Terrace Villas APARTMENT HOMES 9 of 42

10 property photo FINANCIAL ANALYSIS 10 of 42

11 Terrace Villas APARTMENT HOMES ACTUAL AND PRO FORMA ANALYSIS ASKING PRICE INCOME (See Income Details on the left) ACTUAL STABILIZED PRO FORMA MARKET TO DETERMINE THE PRICE Gross Scheduled Rent, is {March-2018} Annualized + 3% Increase N/A $1,675,712 $139,643 / Mo (Loss)/Gain to Lease - Pro Forma Estimated at {1%} of GSR N/A (16,757) 1% Estimated Annual Gross Potential Rental Income N/A 1,658,955 99% INCOME DETAILS Current Scheduled Rents (CSR) Vacancy Loss - Pro-Forma Estimated at {5%} of GSR N/A ($83,786) 5% Non-Revenue Units - Pro Formas Estimated at {1%} GSR N/A (16,757) 1% Other Losses - Pro Forma Estimated at {2%} GSR N/A (33,514) 2% $135,575 / Mo $904 / Unit $1.09 / S.F. Total Annual Rental Income (Reduced by Bad Debt Write Off) 1,258,344 {77%} of GCSR 1,524,898 {91%} of GSR Actual Income Used March-2018 $124,241 Total Other Income + Utility Reimbursement 232,548 $1,550 / Unit / Yr 232,500 $1,550 / Unit / Yr Actual Income Used "Annualized" $1,490,892 Leased Occupancy As of % Pro forma Scheduled Rents include a {3%} Rent Increase $139,643 / Mo $931 / Unit $1.12 / S.F. EXPENSES AND RESERVES Fixed Expenses PROPERTY TAX DETAILS Property Taxes (See Property Tax Details to the Left) $230,773 $1,538 Unit $230,773 $1,538 per Unit 2017 Tax Rate Actual % Franchise Tax 0 $ Unit 0 $ per Unit 2017 Assmt. Actual $8,800,000 Property Insurance (Pro forma is estimated) 64,084 $427 per Unit 64,084 $427 per Unit Pro forma Rate Used 2017 Actual % Total Fixed Expenses 294,857 $1,966 per Unit 294,857 $1,966 per Unit Pro Forma Est. Post Sale Assmt. $7,939,638 Total Gross Annual Income 1,490,892 $124,241 / Mo 1,757,398 $146,450 / Mo ACTUAL PRO FORMA Post Sale Assmt. is the 2016 Assmt increased by {-10%} EXPENSE, INSURANCE AND RESERVE DETAILS Actual Expense Column is March 2018 Trailing 12 months actual, except where noted. Utility Costs Electric - (Common Area and Vacants) 20,914 $139 per Unit 17,000 $113 per Unit Water & Sewer 36,066 $240 per Unit 36,066 $240 per Unit Gas 19,430 $130 per Unit 19,430 $130 per Unit Utility Billing Service 0 $ per Unit 0 $ per Unit Est. Ins. / Unit / Yr Actual $427 Total Utility Costs 76,410 $509 per Unit 72,496 $483 per Unit Est. Reserve / Unit / Yr $200 PROPERTY DETAILS Other Expenses General & Admin + Professional Fees.Cable,Sales Tax,Emer #,Uniforms 26,196 $175 per Unit 26,250 $175 per Unit Number of Units 150 Advertising/Marketing/Residents Activities 13,063 $87 per Unit 11,250 $75 per Unit Avg Unit Size 831 S.F. Repairs/Maint./Make Ready/Supplies/Maid Serv/Pool/Fire Safety/Rental 52,801 $352 per Unit 60,000 $400 per Unit Net Rentable Area 124,613 Payroll + Burden 188,508 $1,257 per Unit 165,000 $1,100 per Unit Land {Acres} Per HCAD 6.18 Contract Services (Pest Control, Grounds, Trash) 50,979 $340 per Unit 45,000 $300 per Unit Units per Acre Management Fees {Calculated on the Income above} 59, % 61, % Date Built / Renovated 1972 Total Other Expenses 390,673 $2,604 per Unit 369,009 $2,460 per Unit e-meter Individual Reserve for Replacement - Per Existing Loan Docs 30,000 $200 per Unit 30,000 $200 per Unit RUBS Water/Sewer & Trash Total Operating Expenses 791,940 $5,280 per Unit 766,362 $5,109 per Unit Hot Water Supply HVAC 2 Gas Fired Boilers Individual HVAC Net Operating Income $698,952 $4,660 per Unit $991,036 $6,607 per Unit 11 of 42

12 10 year cash flow analysis HOUSTON INCOME PROPERTIES, INC. Terrace Villas Apts. Ten Year Cash Flow Analysis UNITS: 150 SQ. FT: 124,613 Year 1 has a {3%} rent increase, see stabilized pro forma page AVG UNIT SIZE: 831 INCOME MONTHLY YEAR 1 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Market Rent Growth Rates Used 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Potential Income $139,643 $1,675,712 $1,725,983 Other Income $19,375 $232,500 $239,475 $1,777,763 $1,831,096 $246, $254,059 $1,886,029 $1,942,609 $2,000,888 $2,060,914 $2,122,742 $2,186,424 $261,681 $269,531 $277,617 $285,946 $294,524 $303,360 Gross Income Vacancy / Other Losses $159,018 $1,908,212 ($150,814) Economic Loss % Includes Bad Debt EFFECTIVE GROSS INCOME 9.0% $1,757,398 Annual Operating Expense Growth Rates Used EXPENSES Operating Expenses Expenses / Unit Reserve for {$200} per unit TOTAL EXPENSES Total Expenses / Unit NET OPERATING INCOME ($736,362) $4,909 ($30,000) ($766,362) $5,109 $991,036 $1,965,458 $2,024,422 $2,085,155 $2,147,709 $2,212,141 ($155,338) ($159,999) ($164,799) ($169,743) ($174,835) 9.0% 9.0% 9.0% 9.0% 9.0% $1,810,120 $1,864,423 $1,920,356 $1,977,967 $2,037, % 3.0% 3.0% 3.0% 3.0% ($758,453) ($781,207) ($804,643) ($828,782) ($853,646) $5,056 $5,208 $5,364 $5,525 $5,691 ($30,000) ($30,000) ($30,000) ($30,000) ($30,000) ($788,453) ($811,207) ($834,643) ($858,782) ($883,646) $5,256 $5,408 $5,564 $5,725 $5,891 $1,021,667 $1,053,217 $1,085,713 $1,119,184 $1,153,660 $2,278,505 $2,346,860 $2,417,266 $2,489,784 ($180,080) ($185,482) ($191,047) ($196,778) 9.0% 9.0% 9.0% 9.0% $2,098,425 $2,161,378 $2,226,219 $2,293, % 3.0% 3.0% 3.0% ($879,255) ($905,633) ($932,802) ($960,786) $5,862 $6,038 $6,219 $6,405 ($30,000) ($30,000) ($30,000) ($30,000) ($909,255) ($935,633) ($962,802) ($990,786) $6,062 $6,238 $6,419 $6,605 $1,189,170 $1,225,745 $1,263,417 $1,302,220 NOI GROWTH RATE 41.8% 3.1% 3.1% 3.1% 3.1% 3.1% 3.1% 3.1% 3.1% 3.1% 12 of 42

13 value projection at 60 months Terrace Villas Apts. Number of Units: 150 Year Built: 1972 Roofs: Pitched - Composition HVAC System: Individual HVAC Metering: Electric: Individual Water, Trash RUBS Hot Water: 2 Gas Fired Boilers Est. Occupancy at Stabilization: 95% REVENUE AND COLLECTIONS Total Gross Rent Potential Total Other Income Potential Estimated Gross Potential Income Vacancy/Other Rental Losses Total Estimated Gross Annual Income EXPENSES PROPERTY INFORMATION Approx. NRA: Average Unit Size: Proposed Mthly. Mkt. Rent at 60 Mths: Projection is based on the stabilized year 1 pro forma with a 3% rent and a 3% expense growth rate for years 2 thru 5 STABILIZED PRO FORMA Projected at 60 Months Post Purchase and Income Stabilization $1,886, $261,681 $2,147,709 ($169,743) $1,977,967 % of Gross Potential Income 88% 12% 100% {9%} of Gross Rent Potential {92%} of Gross Potential Income 124, S.F. $157,169 $1,048 / Unit $1.261 / SF Estimated Potential Value Based on Stabilized NOI of {$1,119,184} ( at 60 Mths Post Stabilization) Total Expenses ~ ( average Unit size is {831 S.F.} ) ($858,782) $5,725 / Unit $6.89 / SF Cap Rate Value Generated 5.75% $19,464,078 $129,761/U Estimated Stabilized Net Operating Income $1,119, % $18,653,075 $124,354/U $156.20/SF $149.69/SF ( at 60 Months Post Stabilization ) 6.25% $17,906,952 $119,380/U $143.70/SF 13 of 42

14 Existing Assumable Loan Information Terrace Villas is being offered on an Assumption of the existing Loan basis. The Loan is potentially Resizable. All existing Loan Information is either from the lender or information supplied by the Seller. Please ask the Broker for loan documentation to perform your own investigation into the current loan parameters before offering on this asset. Estimated Existing Loan Parameters are below (Please Verify); LENDER: LOAN INFORMATION after Payment PAYMENT INFORMATION Monthly P & I $36, Monthly Reserve $ 2,500 Inception Date: February 24, 2015 Last Interest Only Payment was Maturity Date: March 1, 2025 Yield Maintenance End Date: Last day of August 2024 According to the Seller the current loan is potentially resizable. Please ask the Broker for the loan documentation to do your own investigation into the existing loan before offering on this asset. For additional information, please contact: Jim Hurd tel: jhurd@houstonincomeproperties.com 14 of 42

15 property photo PROPERTY OVERVIEW 15 of 42

16 community features Community Benefits Terrace Villas Interior Design 9 distinct spacious one, two and three bedroom floor plans to choose from, interior appointments may vary in each design. Fully Equipped Kitchen All Electric Kitchen Mini-Blinds Wood Style Flooring Ceiling Fans Cable TV Available High Speed Internet Available Dishwasher, Oven and Stove Microwave Wet Bar Picture Window Black and Stainless Appliances Tiled Bathtub/Shower Arrangement Granite Countertops Stainless Steel Kitchen Sink Garbage Disposal Pass Through Serving Bar Private Patio / Balcony Spacious Walk-In Closets Kitchen Pantry and Linen Closet Property Amenities Natural Stone Pool Easy Access to Major Thoroughfare Close to Shopping & Restaurants 2 Newly Remodeled Laundry Centers Picnic Areas Ample Surface Parking Cafe Bar Major Grocery within minutes of the property Within close proximity of Major Employers Gated Community with Access Control Convenient to Area Schools Covered Reserved Parking Sprinkler System Children's Play Area Attractively Landscaped Grounds 16 of 42

17 floor plans Renderings are intended only as a general reference. Features, materials, finishes and layout of unit may be different than shown. 2B 1B 870 S. F. EFF 419 S. F. 1B 1B 649 S. F. 1B 1B 674 S. F. 2B 1B 893 S. F. 2B 1.5B 1,215 S. F. 3B 1.5B 1,236 S. F. 3B 2B 1,212 S. F. 3B 2B 1,000 S. F. 17 of 42

18 site plan 18 of 42

19 neighborhood aerial Sienna Villas APARTMENT HOMES 19 of 42

20 hcad plat Terrace Villas APARTMENT HOMES 20 of 42

21 flood map Terrace Villas APARTMENT HOMES 21 of 42

22 primary market statistics APARTMENT MARKET STATISTICS OVERVIEW - SUMMARY HOUSTON OPERATING APARTMENT PROPERTIES May-2018 Property / Unit Information A B C D OVERALL Total # Projects 770 1, ,873 Total # Units 207, , ,155 18, ,135 Total # Units 0BR 0.20% 1.10% 0.70% 0.00% 2.00% Total # Units 1BR 16.20% 20.60% 12.50% 1.20% 50.40% Total # Units 2BR 11.30% 16.20% 11.20% 1.50% 40.30% Total # Units 3BR 1.60% 2.90% 1.80% 0.40% 6.60% Total # Units 4BR 0.00% 0.40% 0.10% 0.00% 0.60% Avg Units per Project Avg SF Total # Units Under 15, N/A 32 15,605 Total # Units Proposed 7, N/A N/A 7,470 Occupancy A B C D OVERALL Avg Physical Occupancy 90% 92% 90% 85% 90% Avg Pre-Leased Occupancy 91% 93% 90% 86% 91% MARKET OVERVIEW A B C D OVERALL Avg Market Rent/SF Avg Market Rent/SF 0BR Avg Market Rent/SF 1BR Avg Market Rent/SF 2BR Avg Market Rent/SF 3BR Avg Market Rent/SF 4BR Avg Market Rent/Unit Avg Market Rent/Unit 0BR Avg Market Rent/Unit 1BR Avg Market Rent/Unit 2BR Avg Market Rent/Unit 3BR Avg Market Rent/Unit 4BR of 42

23 secondary market statistics APARTMENT MARKET STATISTICS OVERVIEW - SUMMARY Clear Lake / League City Sub Market May-2018 Property / Unit Information A B C D OVERALL Total # Projects N/A 93 Total # Units 10,182 9,789 1,100 N/A 21,071 Total # Units 0BR N/A 0.40% 0.40% N/A 0.80% Total # Units 1BR 25.80% 23.40% 2.30% N/A 51.50% Total # Units 2BR 18.00% 20.50% 2.20% N/A 40.70% Total # Units 3BR 2.40% 2.30% 0.40% N/A 5.10% Total # Units 4BR N/A N/A N/A N/A N/A Avg Units per Project N/A 227 Avg SF N/A 883 Total # Units Under N/A N/A N/A N/A N/A Total # Units Proposed N/A N/A N/A N/A N/A Occupancy A B C D OVERALL Avg Physical Occupancy 95% 93% 94% N/A 94% Avg Pre-Leased Occupancy 95% 95% 93% N/A 94% A B C D OVERALL Avg Market Rent/SF N/A Avg Market Rent/SF 0BR N/A N/A Avg Market Rent/SF 1BR N/A Avg Market Rent/SF 2BR N/A Avg Market Rent/SF 3BR N/A Avg Market Rent/SF 4BR N/A N/A N/A N/A N/A Avg Market Rent/Unit N/A Avg Market Rent/Unit 0BR N/A N/A Avg Market Rent/Unit 1BR N/A Avg Market Rent/Unit 2BR N/A Avg Market Rent/Unit 3BR N/A Avg Market Rent/Unit 4BR N/A N/A N/A N/A N/A 23 of 42

24 Terrace Villas APARTMENT HOMES comparative rental properties MARKET RENTS Project Address / Zip Built # Units Avg. SF / U Avg Rent / U Avg Rent / SF Leased 1 Chatham Village Hwy 3 / $973 $ % 2 Hamptons El Camino / $1,028 $ % 3 Ivy at Clear Creek 300 Cyberonics / $1,067 $ % 4 Riviera at Clear Lake Buccaneer / $910 $ % 5 Sylar Pointe 1210 El Camino / $1,036 $ % Rent Comp Ttls / Average $1,003 $ % 6 Terrace Villas Apts El Camino Real $904 $ % of 42

25 rent comparatives map TERRACE 25 of 42

26 county location map Harris County is the 3rd most populous county in the nation, with more residents than 24 states Harris County Map LOCATION OVERVIEW 26 of 42

27 houston msa facts 27 of 42

28 city of webster boundary map Terrace Villas APARTMENT HOMES 28 of 42

29 COMMUNITY PROFILE About the City of Webster The City of Webster is the Nucleus of Bay Area Houston with its strategic position midway between Galveston and downtown Houston. Webster s central corridors consist of Interstate 45 with 250,000 vehicles daily, Bay Area Boulevard with 100,000 vehicles per day, and NASA Parkway with 75,000 vehicles daily! Additionally, Medical Center Boulevard, Texas Avenue, and Highway 3 are arteries that accommodate the medical center of the south, with a service area population of 1,800,000 patients annually. Located in Webster s backyard NASA-Johnson Space Center (JSC) is just four miles east of Interstate 45 on NASA Parkway. From the early Gemini, Apollo, and Skylab Programs to today s International Space Station, Orion Program, and Crew Space Transportation Program, JSC leads NASA s human space exploration initiative. As JSC employs over 13,500 civil servants and contractors, this significant aerospace industry is important to the region and complements thriving industry sectors in Webster s superregional market, like healthcare, biotechnology, higher education, specialty chemical, energy, environmental science, retail, entertainment, and tourism. Webster's infrastructure development, high bond rating, and expanding local economy with a strong sales tax per capita -- nearly five times the national average -- illustrates that Webster's market is ideal and a leader among cities. Webster is known as the retail, dining, and entertainment capital of Bay Area Houston. With rooftops driving retail, the population is 3,384,000 within a 30- mile radius, 999,000 within a 15- mile radius, and 589,000 within a 10-mile radius. Additionally, Webster is supported by major industry sectors: medical, aerospace, retail, higher education, specialty chemical, tourism, entertainment, and biomedical. Traffic Counts Interstate 45: 250,000 daily vehicles Bay Area Boulevard: 100,000 daily vehicles NASA Parkway: 75,000 daily vehicles Demographic Preview Primary Trade Profile 2018 Projected Population: 3,564, Projected Households: 1,272,239 City of Webster Fast Facts Located midway between downtown Houston and Galveston in Harris County 6.7 square miles Central Business District Renowned as Medical Center of the South, Retail, Dining and Entertainment Capital of Bay Area Houston, and Aerospace Capital of the Southwest Super-regional market consisting of 3,400,000 people within 30-mile radius Major corridors: Interstate 45, Bay Area Boulevard, NASA Parkway, and Highway 3 Top suburban mall within Houston MSA Baybrook Mall (visitor count and sales per SF) Home to NASA-Johnson Space Center Sales tax base with per capita sales nearly five times the national average One of region s lowest property tax rates: per $100 valuation 4B Economic Development Corporation, established in 1999, instrumental in facilitating commercial development with infrastructure projects Located 15 miles from Houston Hobby Airport 29 of 42

30 AREA BUSINESS The City of Webster is the nucleus of Bay Area Houston with its strategic position midway between Galveston and downtown Houston. It is considered the central business district of Clear Lake in that over 80% of the city is commercial. For the past several decades Webster has become renowned as the retail, dining and entertainment capital of Bay Area Houston, the medical center south, and the aerospace capital of the United States. Webster s strategic location, key industry sectors, super-regional market and business friendly credo contribute to the city s commercial vibrancy. Webster s emergence as the medical center of the south in the past two decades, has been fueled by impressive, new, state-of-the-art facilities powered by more than 2,200 renowned physicians who perform comprehensive procedures for a service area population that has exploded. Webster s medical center accommodates more than 1,800,000 patients annually, and that number only is expected to continue to increase. Webster s exclusive partnership with Space Center Houston, NASA s official visitor center, spans 17 years and accounts for 40% of the city s hotel occupancy. Space Center Houston is on a mission for Mission Control. They have started a campaign to raise $5 million to restore the historic mission control. The citizens of Webster are stepping up contributing $3.1 million for the cause and matching up to an additional $400,000 SpaceWalk The heart of South Houston has another exciting development coming its way dubbed SpaceWalk. This space themed, mixed use facility will feature new office and medical buildings, a hotel, conference center, retail and dining and a 10,000 17,000 seat amphitheater. SpaceWalk is a concept of Medistar Corp. A medical real estate development firm based in Houston credited with projects such as the PAM Bay Area Rehabilitation Hospital and Bay Area Regional Medical Center. Medistar bought 177 acres adjacent to I45 from Exxon Mobile to develop their next big concept, SpaceWalk, projected to cost over $500 million. Located between Top Golf and Clear Creek, SpaceWalk would expand the NASA area into a unique South Houston entertainment destination, a space themed, fun experience for the whole family. Phase one of SpaceWalk will include the hotel and conference center as well as the highly anticipated amphitheater. In July 2017, NASA s Johnson Space Center unveiled Building 21, the newly minted home of the Human Health and Performance Laboratory ushering in the next chapter of biomedical research in support of human space exploration. This facility boasts a flexible, reconfigurable layout to better acclimate to changing mission needs and requirements. The plethora of meeting spaces adjacent to laboratories allows researchers to optimize utilization, reduce silos and interact more in person. This is the heart of NASA s biomedical research and operations for human spaceflight, and where innovations will originate to address important astronaut health risks resulting from exploration beyond low- Earth orbit. It is here where extraordinary scientists will further our understanding of space physiology, behavioral health and space vehicle environments in support of astronaut health, safety and performance. By the Numbers: Johnson Space Center spans 1,620 acres and employs over 14,000 people Employs approximately 3,000 federal employees and more than 11,000 contractors NASA is the second largest federal employer in the Houston area. Top contractors include Boeing, United Space Alliance, Lockheed/Martin, and Anadarko Industries Leads NASA for the International Space Station Boeing opened its new astronaut-training module, STAR Space Training, Analysis and Review which includes the upgraded Crew Space Transportation (CST) 100 Starliner simulator Comprised of 100 buildings Manages over $4.0 billion in federal space contracts with a local payroll of over $1.5 billion Over 1,000,000+ visitors per year ranked by the Houston Business Journal as one of the Top Ten paid tourist attractions 30 of 42

31 city of houston demographics 31 of 42

32 city of webster demographics 32 of 42

33 neighborhood demographics 33 of 42

34 PHOTO GALLERY Terrace Villas APARTMENT HOMES 34 of 42

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41 information on brokerage relationships Before working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtain financing without representing you. A broker is obligated by law to treat you honestly. IF THE BROKER REPRESENTS THE OWNER: The broker becomes the owner s agent by entering into an agreement with the owner, usually through a written listing agreement, or by agreeing to act as a subagent by accepting an offer of sub agency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner s agent anything the buyer would not want the owner to know because an owner s agent must disclose to the owner any material information known to the agent. IF THE BROKER REPRESENTS THE BUYER: The broker becomes the buyer s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer s agent anything the owner would not want the buyer to know because a buyer s agent must disclose to the buyer any material information known to the agent. IF THE BROKER ACTS AS AN INTERMEDIARY: A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written consent of each party to the transaction to act as an intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction: (1) shall treat all parties honestly; (2) may not disclose that the owner will accept a price less than the asking price unless authorized in writing to do so by the owner; (3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer unless authorized in writing to do so by the buyer; and (4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property. With the parties consent, a broker acting as an intermediary between the parties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party. If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding. Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee s records. Buyer, Seller, Landlord or Tenant Date 41 of 42

42 For More Information Please Contact: exclusive offering memorandum Jim Hurd - President - Listing Broker jhurd@houstonincomeproperties.com Bishale Patel - Vice President Sales - Broker bpatel@houstonincomeproperties.com Peter Huang - Agent phuang@houstonincomeproperties.com HOUSTON OFFICE 6363 Woodway Suite 370 Houston, TX T F Gwyn VonHeeder - Vice President Operations - Agent gvonheeder@houstonincomeproperties.com Mitul Patel - Agent mpatel@houstonincomeproperties.com AUSTIN OFFICE 912 S. CAPITAL OF TEXAS HWY Suite 360 Austin, TX T F Disclaimer: The information contained herein has either been given to us by the owner of the property or obtained from sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee it. While the Owners and Houston Income Properties, Inc. (HIP) have no reason to believe that the information provided herein or in subsequent information updates delivered to potential purchasers hereunder contains any material inaccuracies, neitherthe Owners nor HIP nor any of the Owners or HIP's respective subsidiaries, affiliates, companies, or the officers, directors, employees, agents and representatives of any such entities, etc., make any 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. Prospective purchasers are not to construe the contents of this Offering or any prior or subsequent information communications from the Owners or any of their respective officers, employees or agents as legal, tax or other advice. Prior to purchasing, prospective purchasers should consult with their own legal counsel and personal and tax advisors to determine the consequences of an investment in the Property and arrive at an independent evaluation of such investment. License # hipapt.com Multi-Family Brokerage or