INVESTMENT OPPORTUNITY MIDLAND AVENUE. Toronto, Ontario. Prepared For: Midland Homes Inc. Prepared By:

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1 INVESTMENT OPPORTUNITY MIDLAND AVENUE Toronto, Ontario. Prepared For: Midland Homes Inc. Prepared By: Greg Bell, PLE Vice President, Multi-Residential Tony Manganiello Sales Representative, Multi-Residential Jennifer Woodyatt Project Manager

2 THE LISTING TEAM INVESTMENT OPPORTUNITY MIDLAND AVENUE Toronto, Ontario PRESENTED BY: THE NATIONAL APARTMENT GROUP GREG BELL, PLE Vice President (416) JENNIFER WOODYATT Project Manager (905) TONY MANGANIELLO Sales Representative (905) CUSHMAN & WAKEFIELD LEPAGE INC Hurontario Street, Suite 200 Mississauga, ON L5R 3G5 Tel: (905) Fax (905)

3 TABLE OF CONTENTS SECTION 1 INVESTMENT OVERVIEW SECTION 2 TORONTO MARKET OVERVIEW SECTION 3 DESCRIPTION OF THE ASSET SECTION 4 REDEVELOPMENT OPPORTUNITY SECTION 5 FINANCIAL ANALYSIS SECTION 6 OFFERING DETAILS SECTION 7 AGENCY DISCLOSURE & FINTRAC These statements are based upon the information furnished by the principal and sources, which we deem reliable - for which we assume no responsibility. This submission is made subject to prior sale, change in price or terms, or withdrawal without notice. Prospective purchasers or tenants should not construe this information as legal or tax advice. Legal counsel, accountants or other advisors should be consulted, if desired, on matters related to this presentation.

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5 INVESTMENT OVERVIEW ADDRESS Midland Avenue, City of Toronto LOCATION Specifically, the property is located on the east side of Midland Avenue between Lawrence Avenue East and Eglinton Avenue East in the community of Bendale. The subject property is within easy access to Highway 401to the north and is serviced by public transit directly on Midland Avenue connecting to the Toronto subway system and the Kennedy GO Train Station. PROPERTY DESCRIPTION The property is improved with 3 blocks of 2-storey rental townhomes with 30 three-bedroom units and 12 fourbedroom units. The property is rectangular in shape and is approximately 3.39 acres. Frontage on Midland Avenue is approximately 352 feet. FINANCING Treat as free and clear. NET OPERATING INCOME (Jan Dec. 2009) $429,889 PRICE* $7,750,000 CAPITALIZATION RATE 5.55% PRICE PER UNIT $184,524 EXPENSE TO GROSS REVENUE RATIO 31.4% * See Summary of Value for details

6 NEIGHBOURHOOD OVERVIEW The neighbourhood of Bendale is a culturally diverse, middle class area of Toronto that is conveniently located near TTC and GO Transit lines. Local amenities include Thompson Memorial Park, Scarborough Town Shopping Centre, the Scarborough Civic Centre and Scarborough General Hospital. Bendale was built in the 1950 s and 1960 s mostly of bungalows and split-level brick houses on generous size lots with private driveways. Houses here are well maintained and the lots are well treed. Scarborough Town Shopping Centre, located off McCowan Road, north of Ellesmere Road, is one of Toronto's largest shopping centres with over 200 shops, services and restaurants.

7 NEIGHBOURHOOD OVERVIEW The area enjoys a busy shopping corridor along Lawrence Avenue that includes a large supermarket, a discount department store, a dollar store, fast food restaurants, a home care centre, an oriental supermarket, a bingo club, new car dealerships and an assortment of small shopping plazas. Danforth Road, south of Lawrence Avenue features a country farm market, a large drug store, convenience stores and restaurants. Birkdale Plaza, located off Ellesmere Road, has a grocery store, an East Indian restaurant, a clothing store and a video store. Thompson Memorial Park is situated off Brimley Road and is the home of the Scarborough Historical Museum. It is one of Toronto's largest parks and features a children's zoo. Facilities include a paved trail, a sports field, tennis courts, a baseball diamond, a wading pool, a children's playground and a snack bar. Winter activities include cross-country skiing, skating and tobogganing. The Birkdale Community Centre on Ellesmere Road offers neighbourhood meeting rooms and the adjacent park contains a paved trail that connects with the Thompson Memorial Park. Bus routes along Midland Avenue and McCowan Road connect passengers to stations on the Bloor- Danforth subway line. The Lawrence Avenue and Ellesmere Road buses provide connecting routes to the Yonge-University-Spadina subway line. Access to Highway 401 is via the McCowan Road on-ramp.

8 DESCRIPTION OF THE ASSET THE SITE The subject site is rectangular in shape with a frontage on the east side of Midland Avenue of approximately 352 feet and is comprised of approximately 3.39 acres. NEIGHBOURHOOD DESCRIPTION AND ADJOINING PROPERTIES The subject property is located in the part of Toronto known formerly as the City of Scarborough in the community of Bendale. It is located south of Highway 401, between Kennedy Road and Brimley Road, north of Eglinton Avenue East. In a solid middle class residential neighbourhood made up primarily of single family homes. In the area there are seven public schools, two public high schools and a catholic school. Charles Gordon and Hunter s Glen public schools are in the immediate vicinity and St. Albert catholic school abuts the subject property.

9 DESCRIPTION OF THE ASSET DESCRIPTION OF IMPROVEMENTS The subject property is comprised of three blocks of 2-storey rental town homes with 42 units in total. The unit mix consists of 30 two-bedroom units and 12 three-bedroom units. The units are generous in size and many have been renovated to a good quality standard. The windows have been replaced with double pane sliders. The units have hardwood flooring and the kitchens feature new cabinetry, fridges and stoves. Corner units feature balconies. General Construction poured concrete footings & foundation walls brick exterior walls with aluminium fascia, soffits & downspouts new flat tar roof new vinyl clad windows each unit is separately metered high efficiency gas-fired hot water heaters mid and high efficiency furnaces 100 ampere hydro service in each unit all new breakers separate meters appliances include new refrigerators & stoves Typical Unit Finishes Living/Dining Rooms Kitchens Bedrooms 4-Piece Washrooms Basements 3-Piece Washrooms Oak strip hardwood flooring painted plaster walls & ceilings ceramic tile flooring painted plaster walls & ceilings double stainless steel sink set in an arborite countertop new wood veneer cupboards new refrigerators, stoves & range hoods oak strip hardwood flooring painted plaster walls & ceilings generous closets ceramic tile floor & tub surround painted plaster walls & ceilings new sink & vanity, new fixtures & fittings ceramic tile floor painted plaster walls & ceilings ceramic tile floor & shower surround new sink & vanity, new fixtures & fittings

10 DESCRIPTION OF THE ASSET

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15 DESCRIPTION OF THE ASSET

16 DESCRIPTION OF THE ASSET LEGAL DESCRIPTION Part of Lot 26, Concession D, Plan M699 BLK B LT 26 BLK B AC, City of Toronto (formerly the City of Scarborough). FIRE CODE The subject property is reported to be at Code. LAUNDRY Laundry facilities are located in the basements of each of the units. Washers and dryers are supplied and owned by the tenants. CONDITION Generally the subject property is in good repair for buildings of this age (circa 1960 s) and the interiors have been extensively renovated. The roof is reported to have been done in Currently there are no vacant units.

17 REDEVELOPMENT OPPORTUNITY REDEVELOPMENT OPPORTUNITY

18 FINANCIAL ANALYSIS YEAR ONE PROJECTION STATEMENT OF INCOME AND EXPENSE Our analysis is based on a 12-month projection January December Year One Net Operating Income is estimated at approximately $430,000 and is based on 3% vacancy. INCOME YEAR 1 PROJECTION Basic Rent (a) Parking (b) $639,030 $6,720 Less: Vacancy Allowance 3% (c) -$19,171 Total Effective Gross Income $626,579 EXPENSE Property Taxes (d) $97,980 Insurance (e) $7,568 Hydro (f) $3,800 Water & Sewer (g) $14,488 Cable (h) $14,454 Repairs & Maintenance (i) $29,400 Management Fees (j) $12,000 Superintendent (k) $13,000 Advertising (l) $2,000 Miscellaneous (m) $2,000 Total Operating Expense $196,690 SUMMARY OF VALUE NET OPERATING INCOME $429,889 CAPITALIZATION RATE 5.55% ASKING PRICE $7,750,000 PRICE PER SUITE $184,524 EXPENSE TO GROSS REVENUE RATIO 31.4%

19 FINANCIAL ANALYSIS ASSUMPTIONS AND NOTES: a. Basic Rent Basic Rent is based on the vendor s rent roll dated April 2009 and calculated for a 12 month period. b. Laundry Laundry income is based on the vendor s budget. Currently, each suite generates approximately $16 per month on laundry. c. Vacancy Allowance Vacancy Allowance is 3% of Basic Rent (Industry average for Toronto Zone 10 Scarborough Central is 2.7%). Currently there are no vacant units. d. Property Taxes Property Taxes are based on Vendor s budget. e. Hydro & Water Tenants are separately metered and pay for their own hydro. Hydro is based on the Vendor s budget. Hydro expense is for outside lighting and vacant units only. Water is based on the Vendor s budget. f. Insurance Insurance is based on Vendor s budget. g. Repairs & Maintenance Repairs and Maintenance costs are estimated to be $286 per unit. h. Management Fees Management Fees are 3% of gross plus GST. i. Superintendent s Wages Superintendent s Wages are based on industry standards. j. Advertising & Marketing Advertising and Marketing costs were estimated to be $2,000. k. Miscellaneous Miscellaneous expense is estimated at $2,000.

20 RESIDENTIAL SUITES INCOME MIDLAND AVENUE PROJECTED ANNUAL PROPERTY OPERATING DATA 2009 PROJECTION Basic Rent Residential Suites (a) $639,030 Parking (b) $6,720 Less: Vacancy Allowance 3% (c) ($19,171) Total Effective Gross Residential Income $626,579 EXPENSES 2009 PROJECTION Property Taxes (d) $97,980 Hydro (e) $7,568 Water & Sewer (f) $3,800 Cable (g) $14,488 Insurance (h) $14,454 Repairs and Maintenance (i) $29,400 Management (j) $12,000 Superintendent (k) $13,000 Advertising and Marketing (l) $2,000 Miscellaneous (m) $2,000 Total Operating Expenses $196,690 Net Operating Income $429,889 * All numbers are rounded to the nearest dollar SUMMARY OF VALUE Net Operating Income $429,889 Cap Rate 5.55% Indicated Value $7,745,745 Asking Price $7,750,000 Price Per Suite $184,524 Expense to Gross Revenue Ratio 31.39% EXPENSES ALLOCATION Property Taxes (d) Hydro (e) 6.2% 6.7% 1.0% Water & Sewer (f) Cable (g) 15.1% Insurance (h) Repairs and Maintenance (i) Management (j) 7.4% Superintendent (k) 7.4% Advertising and Marketing (l) 2.0% 3.9%

21 MIDLAND AVENUE RENT ROLL AS OF APRIL 2009 Unit Model Unit Monthly Monthly Total Apt # Type Type Size(sf) Parking Rent Rent 1 3 $40.00 $1, $1, $1, $1, $80.00 $1, $1, $1, $1, v 2 $1, $1, $40.00 $1, $1, v 2 $1, $1, $1, $1, v 3 $1, $1, v 3 $1, $1, v 3 $1, $1, v 3 $40.00 $1, $1, v 2 $40.00 $1, $1, v 2 $1, $1, $ $1, $1, Vacant Unit 2 $1, $1, $1, $1, $40.00 $1, $1, $1, $1, v 2 $1, $1, v 2 $1, $1, $1, $1, $1, $1, $40.00 $1, $1, $1, $1, $1, $1, $40.00 $1, $1, $1, $1, $40.00 $1, $1, $1, $1, Vacant Units 2 $1, $1, $1, $1, $1, $1, v 2 $1, $1, $1, $1, $40.00 $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, v 3 $1, $1, $1, $1,

22 Total Unit Monthly Monthly Total Residential Suites Size(sf) Parking Rent Rent 42 2 Vacant Units $ $53,252 $53,812 RENT ANALYSIS Unit Number of Average Rent CMHC Zone 10 Type Units All Types Scarborough Two-bedroom 30 $1,258 $947 Three-bedroom 11 $1,285 $1,084 TOTAL: 41 $1,271 $1,016 2.

23 OFFERING DETAILS OFFERING SUMMARY VENDOR: Midland Homes Inc. PRICE: $7,750,000 FINANCING: DUE DILIGENCE PACKAGE: Treat as free and clear. A detailed due diligence package will be provided as a supplement to the information and material presented herein. Presented by: The National Apartment Group Greg Bell, PLE Vice President (416) Jennifer Woodyatt Project Manager (905) Tony Manganiello Sales Representative (905) CUSHMAN & WAKEFIELD LEPAGE INC Hurontario Street, Suite 200 Mississauga, ON L5R 3G5 P (905) F (905) These statements are based upon the information furnished by the principal and sources, which we deem reliable - for which we assume no responsibility. This submission is made subject to prior sale, change in price or terms, or withdrawal without notice. Prospective purchasers or tenants should not construe this information as legal or tax advice. Legal counsel, accountants or other advisors should be consulted, if desired, on matters related to this presentation.

24 AGENCY DISCLOSURE & FINTRAC Required Agency Disclosure The Vendor is a registered Real Estate Agent with the Toronto Real Estate Board. It is understood that Cushman & Wakefield LePage acts as agent for the Vendor, owes to the Vendor a fiduciary duty, and will be compensated by the Vendor. It is understood that Cushman & Wakefield LePage may also directly introduce a purchaser to the Vendor and in such event, the purchaser shall receive customer service; that is, while Cushman & Wakefield LePage acts as agent for the Vendor only, it shall act in a fair, ethical and professional manner in providing customer service to a prospective purchaser. In order to comply with the Real Estate Council of Ontario s Code of Ethics as outlined in the Real Estate Business Brokers Act (REBBA) 2002, Agency, as it relates to real estate transactions within the Province of Ontario, is described below. Seller s (Vendor s) Agent: When a real estate Brokerage is a Sellers Agent, it must do what is best for the seller of a property. A written contract, called a listing agreement, establishes seller agency. It also explains services the company will provide, establishes a fee arrangement for the Realtor s services and specifies what obligations a seller may have. A seller s agent must tell the seller anything known about a buyer. For instance, if a seller s agent knows a buyer is willing to offer more for a property, that information must be shared with the seller. Confidences a seller shares with a seller s agent must be kept confidential from potential buyers and others. Although confidential information about the seller cannot be discussed, a buyer working with a seller s agent can expect fair and honest service from the seller s agent and disclosure of pertinent information about the property. Buyer s (Purchaser s) Agent: A real estate brokerage acting as a buyer s agent must do what is best for the buyer. A written contract, called a buyer agency agreement, establishes buyer agency. It also explains services the company will provide, establishes a fee arrangement for the Realtor s services and specifies what obligations a buyer may have. Typically, buyers will be obligated to work exclusively with that company for a period of time. Confidences a buyer shares will be buyer s agent must be kept confidential. Although confidential information about the buyers cannot be disclosed, a seller working with a buyer s agent can expect to be treated fairly and honestly. Dual Agent: Occasionally a real estate brokerage will be the agent of both the buyer and the seller. The buyer and seller must consent to this arrangement, in their listing and buyer agency agreements. Under this dual agency arrangement, the company must do what is best for both the buyer and the seller. Since the Brokerage s loyalty is divided between the buyer and the seller who have conflicting interest, it is absolutely essential that a dual agency relationship be established with express consent in a written agency agreement. This agreement specifically describes the rights and duties of everyone involved and any limitations to those rights and duties. Prospective purchasers, by accepting this confidential information package acknowledges having reviewed this section relating to Agency and confirm that they understand that Cushman & Wakefield LePage acts as agent for the Vendor only and will provide them with customer service in a fair, ethical and professional manner.

25 AGENCY DISCLOSURE & FINTRAC Confidentiality By accepting this confidential information package (CIM), prospective purchasers will not, directly or indirectly, disclose or communicate or permit anyone else to disclose or communicate this CIM or any of it s contents or any part thereof to any person, firm or entity without the prior written consent of the Seller and Advisor. Prospective purchasers will not use or permit this CIM to be used in any manner detrimental to the interests of the Seller, the Advisor or their affiliates or for any other purpose than a proposed purchase of the Property. The recipient of this CIM agrees to provide the Advisor with a list of those persons to whom this CIM or any information contained herein is provided. The CIM shall not be copied, reproduced or distributed, in whole or in part, to their parties at any time without the prior written consent of the Seller and the Advisor. It is made available to prospective purchasers for information purposes only and upon the express understanding that such prospective purchasers will use it only for the purposes set forth herein. Upon request, the recipient will promptly return all material received from the Seller and Advisor (including the CIM) without retaining any copies thereof. In furnishing the CIM, the Seller and Advisor undertake no obligations to provide the recipient with access to additional information. The division of the CIM into sections, paragraphs, sub-paragraphs and the insertion or use of any titles and headings are for convenience of reference only and shall not affect the construction or interpretation of this CIM. Indemnification: In exchange for specific good and valuable consideration provided by the Vendor and the Advisor, including without limitation, the delivery of this CIM, the receipt and sufficiency of which is hereby acknowledged by the prospective purchasers, prospective purchasers hereby agree to indemnify the Vendor and the Advisor, and their affiliates against any compensation, liability or expense (including attorneys fees), arising from claims by any other party the purchaser had dealings with (excluding the Advisor) in connection with the sale of the Property, or in connection with a breach by the prospective purchaser of its obligations as described herein. In no event shall any prospective purchaser or any of its agents or contractors contact any governmental authorities concerning the property, or make any physical inspection or testing of the Property, without the prior written consent of the Vendor or the Advisor. Required Disclaimer This Confidential Information Memorandum ( CIM ) is being delivered to prospective purchasers to assist them in deciding whether they wish to acquire the Property. This CIM does not purport to be all-inclusive or to contain all the information that a prospective purchaser may require in deciding whether or not to purchase the Property. This CIM is for information and discussion purposes only and does not constitute an offer to buy the Property. The CIM provides selective information relating to certain of the physical, locational and financial characteristics of the Property.

26 AGENCY DISCLOSURE & FINTRAC The information on which this CIM is based has been obtained from various sources and is considered reliable. Neither the Vendor nor the Advisor make any representations, declarations or warrantees, express or implied, as to the accuracy or completeness of the information or statements contained herein or otherwise and such information or statements should not be relied upon by prospective purchasers without independent investigation and verification. The Vendor and Advisor expressly disclaim any an all liability for any errors or omissions in the CIM or any other written or oral communication transmitted or made to prospective purchasers. Prospective purchasers should conduct their own independent investigation and verification of the information provided herein, and should seek legal, accounting, tax and engineering advice as necessary. If any information relating to the Property, in addition to the information provided in this CIM, is proved at any time, orally or otherwise, by the Vendor or the Advisor or anyone acting on their behalf, such information is provided as a convenience only and without representation or warranty as to its accuracy or completeness and such information should not be relied upon by prospective purchasers without independent investigation and verification. Sale Conditions The property if to be purchased on an as is, where is basis and there is no warranty, expressed or implied, as to title, description, condition, costs, size, merchantability, fitness for purpose, quantity or quality thereof. Offering Guidelines Offers should outline the terms for the purchase of the Property and should include, at a minimum, the following information: 1. Name and identity of the prospective purchaser or purchasers; 2. Completed CREA FINTRAC forms for Corporation or Individual (These are attached). 3. Purchase price, initial deposit, and deposit payable on satisfaction or waiver of the purchaser s due diligence conditions; 4. Purchaser s proposed due diligence investigations and timeline for satisfaction of same; 5. Anticipated date of closing; 6. The address, and fax number of the prospective purchaser; 7. Evidence of the prospective purchaser s financial ability to complete the transaction, including the method of payment of the balance of the purchase price after assumption of the existing first mortgage; 8. A brief summary of the level of review and approvals, whether corporate (for example, investment committee, board of directors, shareholders, etc.) or regulatory, required in connection with the transaction and whether such approvals have been obtained or, if not, the steps and time necessary to obtain them. 9. An outline of any other contingencies or conditions anticipated to be required by the prospective purchaser in connection with the transaction.

27 AGENCY DISCLOSURE & FINTRAC FINTRAC Disclosure The objective of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act is to help detect and deter money laundering and the financing of terrorist activities. It is also to facilitate investigations and prosecutions of money laundering and terrorist activity financing offences. This includes reporting, record keeping, client identification and compliance regime requirements for real estate brokers or real estate sales representatives. As of June 2008, all licensed Realtors in Canada are subject to FINTRAC compliance rules. This new legislation requires that all parties will be required to disclose the names and identities of vendors and purchasers involved in all real estate transactions in Canada. The new compliance rules will also require Realtors to verify the identity of each individual involved in a transaction by reviewing picture identification such as a valid driver s license or passport. How to Contact FINTRAC For further information on FINTRAC and its activities, reporting and other obligations, please go to FINTRAC s Web site ( or contact FINTRAC: Financial Transactions and Reports Analysis Centre of Canada 234 Laurier Avenue West, 24th floor Ottawa, Ontario Canada K1P 1H7 Toll-free: