SOLA flats. tremendous infill location. austin, texas investment summary

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2 > > > > > > INVESTMENT HIGHLIGHTS PROVEN VALUE-ADD OPPORTUNITY WITH MAJOR UPSIDE SoLa Flats consists of 16 spacious 2-bedroom townhomes, featuring two-story units and private backyards, this property offers an investor the incredible opportunity to capitalize on a one of a kind product type in a superior infill location. Ownership recently renovated one unit to a Designer+ level which includes stainless steel appliances, plank wood flooring, and tile backsplashes costing approximately $5,000 and resulting in a $150 monthly premium. This property s upside is significant as NOI growth can be realized by a continuation of the current renovation plan or improving upon it by the addition of washer/dryer connections, new cabinetry, and updated fixtures. SoLa Flats is a prime condo conversion candidate due to the townhome design, large floor plans and attractive price point for an entry level buyer unable to afford downtown condos or single family pricing in the illustrious zip code. TREMENDOUS JOB AND POPULATION GROWTH Austin has one of the highest job creation rates in the country (2.8%) and the lowest unemployment rate (3.3%) among the top 50 metros in the U.S. As one of the nation s top economic performers, Austin s real estate market is thriving. Austin s business friendly environment and low cost of living attracts the nation s top talent and millennial demographic which will continue to boost rental demand for the foreseeable future.

3 CENTRAL BUSINESS DISTRICT DOWNTOWN BARTON SPRINGS RD SOUTH LAMAR BLVD SOLA FLATS OLTORF ROAD L CONGRESS AVENUE MANCHACA ROAD SOUTH 1ST STREET AUSTIN S PATH OF GROWTH SOUTH SoLa Flats is located in one of Austin s most desirable residential areas with excellent access to the South Lamar and South Congress districts which boast some of the best retail and dining options in Austin. The property is positioned near Highway 290, I-35, and MoPac Expressway providing residents quick connectivity to Austin s CBD, employment hubs, nearby economic drivers and the greater Austin Metro. COVETED SOUTH AUSTIN LOCATION ALONG SOUTH LAMAR BLVD SoLa Flats is located off of the vibrant South Lamar Blvd on Manchaca Road in close proximity to Austin s top restaurants, shops and central business district. This location provides residents quick access to Downtown Austin and the greater Austin Metro via major thoroughfares Mopac Expressway, Ben White Blvd and Loop 360. Just a 10 minute drive from Downtown Austin, SoLa Flats provides an affordable living option for Austin s nation leading millennial population as well as the 85,000+ daytime population in Downtown. Tenants enjoy luxuries of the South Lamar corridor which has seen robust growth over the last few years. An abundance of luxury retail and restaurant destinations are nearby, including Brodie Oaks Shopping Center, Lakehills Plaza, Barton Creek Square and many more renowned boutique shops and eateries. Residents at SoLa Flats also enjoy a bevy of outdoor recreational amenities nearby including Zilker Park, Barton Creek Greenbelt and Lake Austin.

4 SOUTH CENTRAL SUBMARKET SoLa Flats is positioned in the highly coveted South Central submarket boasting huge rent growth of 3.70% over the last 12 months and occupancy of 91.4%, exceptional figures considering there were 600 new units delivered to the submarket in the last year. This submarket continues to be one of the most desirable locations in the city and state, given its unique Austin vibes, community feel and location in the heart of the lifestyle offerings craved so deeply by the current renter generations. Confidence is strong in future rent and occupancy growth as there is only 1 project expected to deliver in the submarket over the next 12 months. PROPERTY OVERVIEW FLOOR PLAN Property: Address: SoLa Flats 3415 Manchaca Road Units: 16 Year Built: 1977 Rentable Square Feet: 13,568 (848 SF Average) Parcels (TCAD): 305,897 Acres: Buildings: 3 Construction: Roof: HVAC: RUBS: Wood Frame/ Stone & Wood Exteriors Pitched Electric/Ground Mounted/ Individual Meters Water, Gas, Trash, Pest Foundation: Concrete Slab on Grade

5 OPERATING STATEMENT - SOLA FLATS Pro Forma INCOME Total Per Unit Effective Rental Income [1] Current Market Rents $278,400 $17,400 [2] Gain / Loss to Lease -$2, % Gross Potential Income $275,616 $17,226 [3] Vacancy -$13, % [4] Bad Debt -$1, % Effective Rental Income $260,457 $16,279 Effective Rent $1,436 $1.69 per month $21,705 [5] Other Income Utility $15,309 $957 Laundry $1,478 $92 Other $3,905 $244 Total Other Income $20,692 $1,293 EFFECTIVE GROSS INCOME $281,149 $17,572 [6] EXPENSES Total Per Unit Controllable Expenses Contract/Landscape $3,600 $225 Electricity $2,520 $158 Water/Sewer $8,428 $527 Gas $2,842 $178 Trash $4,488 $280 Turnover $3,200 $200 R&M $4,800 $300 Advertising $3,200 $200 Administrative $1,600 $100 Total Controllable Expenses $34,961 $2,185 Non-Controllable Expenses [7] Management Fees $14, % [8] Real Estate Taxes $52,449 $3,278 [9] Property Liability/Insurance $4,000 $250 Total Non-Controllable Expenses $70,507 $4,407 TOTAL EXPENSES $105,467 $6,592 Footnotes [1] Current Market Rents: Are based on taking all units to Designer+ level. [2] Pro Forma Gain / Loss to Lease: Is based on historical operations of the Property, HFF's projections and market underwriting standards. [3] Pro Forma Vacancy: Is based on the historical operations of the Property. The Property is currently 100% occupied as of 1/26/2018. [4] Bad Debt: Is based on historical operations of the Property and HFF's projections. [5] Other Income: Unless otherwise noted, other income is based on the historical operations of the Property and HFF's projections. [6] Expenses: Unless otherwise noted, expenses are based on the historical operations of the Property and HFF's projections. [7] Pro Forma Management Fee: Is based on market standards of 5.00% of Effective Gross Income. [8] Real Estate Taxes: Proforma taxes are based on the 2017 assessed value of $2,300,000, grown by three percent and multiplied by the current millage rate of % [9] Property/Liability Insurance: Is based on market standards of $250 per unit. NET OPERATING INCOME $175,682 $10,980 UNIT MIX Units % Unit Description Unit Type SF Total SF Status Market Market Occ Vac Market Rent Rent per SF Monthly Annual % 2 BR - 1 BA *B1 - D , $1,450 $1.71 $23,200 $278, % , $1,450 $1.71 $23,200 $278,400 * Represents Designer+ Upgrades [1] Market rents are based on assumption that all of the units are upgraded to Designer+ Level % Two Bedroom , $1,450 $1.71 $23,200 $278,400

6 > > > > > > Debt Contact FORREST BASS MATT POHL SPENCER ROY SEAN WOLFF JACKSON FINCH CASEY WENZEL Senior Director Senior Director Analyst Analyst Analyst Senior Director Holliday Fenoglio Fowler, L.P. ( HFF ), HFF Securities L.P. and HFF Securities Limited (collectively, HFFS ) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 24 offices and is a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information, please visit hfflp.com or follow HFF on