For more information contact: Apartment / Investment Broker michael@svmultifamily.com BRE 01327546 33 Unit Apartment Building On Alameda Island Rarely Available Waterfront Property Views of The San Francisco Bay Desirable Alameda Location Repositioning Opportunity - Significant Upside Rent Potential! Unit Mix (4) 2/1, 29 1/1 units, Partially Renovated Pro Forma Financials: Cap Rate 6.24%, GRM 10.51 Current Financials: Cap Rate 3.71%, GRM 14.7, $/Unit $196,970 Offered at: $6,500,000 Phone: Fax: 866-354-7420 401 Alberto Way, Suite 3 Los Gatos, CA 95032 www.siliconvalleymultifamily.com
Table of Contents SECTION 1 - PROPERTY OVERVIEW SECTION 2 - FINANCIAL ANALYSIS SECTION 3 - COMPARABLES SECTION 4 - RENTAL TRENDS SECTION 5 - DEMOGRAPHICS
Property Overview
Executive Summary ACQUISITION COSTS Purchase Price, Points and Closing Costs $6,550,120 Investment - Cash $3,038,164 First Loan $3,511,956 INVESTMENT INFORMATION Purchase Price $6,500,000 Price per Unit $196,970 Price per Sq. Ft. $466.95 Income per Unit $13,395 Expenses per Unit ($5,686) INCOME, EXPENSES & CASH FLOW Gross Scheduled Income $442,044 Total Vacancy and Credits ($12,952) Operating Expenses ($187,653) Net Operating Income $241,439 Debt Service ($201,199) Cash Flow Before Taxes $40,240 Total Interest (Debt Service) ($139,353) Depreciation and Amortization ($148,909) Taxable Income (Loss) ($46,822) Tax Savings (Costs) $20,321 Cash Flow After Taxes $60,561 FINANCIAL INDICATORS Cash on Cash Return Before Taxes 1.32% Internal Rate of Return N/A Debt Coverage Ratio 1.20 Capitalization Rate 3.71% Gross Rent Multiplier 14.70 Gross Income / Square Feet $31.76 Gross Expenses / Square Feet ($13.48) Operating Expense Ratio 43.73% page 4 of 28
Real Estate Investment Details ANALYSIS Analysis Date July 2015 PROPERTY Property Property Address Year Built 1959 Bayview Apartments PURCHASE INFORMATION Property Type MultiFamily Purchase Price $6,500,000 Fair Market Value $6,500,000 Units 33 Total Rentable Sq. Ft. 13,920 Resale Valuation 3.0% (annual appreciation) Resale Expenses 5.0% FINANCIAL INFORMATION Down Payment $2,988,044 Closing Costs $15,000 LT Capital Gain 20.00% Federal Tax Rate 34.0% State Tax Rate 9.4% Discount Rate 3.00% LOANS Debt Term Amortization Rate Payment LO Costs Fixed $3,511,956 30 years 30 years 4.0% $16,767 $35,120 INCOME & EXPENSES Gross Operating Income $429,092 Monthly GOI $35,758 Total Annual Expenses ($187,653) Monthly Expenses ($15,638) CONTACT INFORMATION michael@svmultifamily.com BRE 01327546 The calculations and data presented are deemed to be accurate, but not guaranteed. They are intended for the purpose of illustrative projections and analysis. The information provided is not intended to replace or serve as substitute for any legal, accounting, investment, real estate, tax or other professional advice, consultation or service. The user of this software should consult with a professional in the respective legal, accounting, tax or other professional area before making any decisions. page 5 of 28
Property Description Bayview Apartments Repositioning Opportunity For A Waterfront Property This 33 Unit multifamily property offers the investor the opportunity to purchase a rarely available waterfront property with views of San Francisco Bay. The property is located on the West End of Alameda on the waterfront. The property lends itself well to repositioning: Rents are below market, the units could be further renovated, and the exterior façade and inner courtyard could be improved upon. These changes will enable the investor to increase rents to market level and keep pace with the rising rental rates for the City of Alameda. (See Rental Trends in this document.) The property is known as Bayview Apartments and at one time was believed to be a motel. It has since been converted to an apartment building with 33 units consisting of four (4) 2 bed / 1 bath units (~580 SF) and twenty-nine (30) 1 bed / 1 bath units (~400 SF). Twelve of the units have balconies overlooking The San Francisco Bay. The smaller units are a result of the property s original purpose as a motel. At present, the rents are currently below market: The one bedrooms rent for approximately $1,060/month and the two bedrooms rent for approximately $1,300/month. More than twenty-three of the units have been partially renovated with granite counter tops and laminate floors. With additional renovations these could be raised to market level. The property was built in 1959 in the classic garden style, two story, walk-up architecture. The building is comprised of 14,400 square feet of rental space on a 13,370 square foot lot. There is a large courtyard in the center of the building with a pool with all units facing the pool. There is a main entrance and two side entrances with secure entryways to the courtyard and access to the units. There are two laundry rooms each with two washers and two dryers which provide for additional income. The building is constructed of stucco with an attractive decorative rock façade over wood frame. The roof is flat and the foundation is concrete perimeter. The driveway and parking lot are asphalt. There are 31 parking spaces and there is additional street parking. Tenants pay for electric, phone, cable, internet. The property owner pays maintenance, gas, electric for common areas, water, sewer, trash removal and pool services. The property is located next to a school and near larger multifamily rental communities which are charging higher rents. The vibrant Alameda Island downtown area is only a few streets away. page 6 of 28
Unit Mix Report UNIT MIXES Units Type Approx. SqFt Avg. Rents Monthly Mkt Rents Monthly 4 2 BR / 1 BA Units 580 $1,302 $5,208 $1,800 $7,200 29 1 BR / 1 BA Units 400 $1,061 $30,769 $1,500 $43,500 33 13,920 $35,977 $50,700 UNIT MIX UNIT MIX SQUARE FEET 2 BR / 1 BA Units 1 BR / 1 BA Units 2 BR / 1 BA Units 1 BR / 1 BA Units UNIT MIX INCOME UNIT MIX MARKET INCOME 2 BR / 1 BA Units 1 BR / 1 BA Units 2 BR / 1 BA Units 1 BR / 1 BA Units page 7 of 28
Property Photos 33 Units in Alameda Unit Mix: (4) 2 BR / 1 BA Units, (29) 1 BR / 1 BA Units Street View Street View Private Courtyard with Pool View from Rear Unit Balcony View of Rear Units View of Building Side Facing Water page 8 of 28
Property Photos 2 page 9 of 28
Maps and Aerials Location Maps page 10 of 28
Maps and Aerials Aerial & Parcel Maps page 11 of 28
Financial Analysis
Annual Property Operating Data Description Year 1 Rental Income $431,724 Laundry Income $8,748 late fees $1,572 GROSS SCHEDULED INCOME $442,044 Turnover Vacancy ($12,952) GROSS OPERATING INCOME $429,092 Expenses Property Taxes ($87,750) Insurance ($7,284) Utilities - Gas & Electric ($20,362) Utilities - Water & Sewer ($19,756) Trash Removal ($15,833) Washer Dryer Rental ($2,376) Maintenance & Repairs ($13,567) Management (est) ($17,269) Administrative Expenses ($3,456) TOTAL OPERATING EXPENSES ($187,653) NET OPERATING INCOME $241,439 page 13 of 28
Cash Flow Analysis Description Year 1 GROSS SCHEDULED INCOME $442,044 Turnover Vacancy ($12,952) Total Operating Expenses ($187,653) NET OPERATING INCOME $241,439 Loan Payment ($201,199) NET CASH FLOW (b/t) $40,240 Cash On Cash Return b/t 1.32% NET OPERATING INCOME $241,439 Depreciation ($147,738) Amortization ($1,171) Loan Interest ($139,353) TAXABLE INCOME (LOSS) ($46,822) Income Taxes $20,321 CASH FLOW (a/t) $60,561 Cash On Cash Return a/t 1.99% Footnotes: b/t = before taxes;a/t = after taxes page 14 of 28
Financial Indicators Description Year 1 Gross Rent Multiplier 15.15 Capitalization Rate 3.71% Cash On Cash Return b/t 1.32% Cash On Cash Return a/t 1.99% Debt Coverage Ratio 1.20 Gross Income per Sq. Ft. $31.76 Expenses per Sq. Ft. ($13.48) Net Income Multiplier 27.73 Operating Expense Ratio 43.73% Loan To Value Ratio 51.53% Footnotes: b/t = before taxes; a/t = after taxes page 15 of 28
Pro Forma Summary UNIT MIX & ANNUAL SCHEDULED INCOME Type Units Actual Total Market Total 2 BR / 1 BA Units 4 $15,624 $62,496 $21,600 $86,400 1 BR / 1 BA Units 29 $12,732 $369,228 $18,000 $522,000 TOTALS 33 $431,724 $608,400 INVESTMENT SUMMARY Price: $6,500,000 Year Built: 1959 Units: 33 Price/Unit: $196,970 RSF: 13,920 Price/RSF: $466.95 ANNUALIZED INCOME Actual Market Gross Potential Rent $431,724 $608,400 Less: Vacancy ($12,952) ($18,252) Misc. Income $10,320 $10,320 Effective Gross Income $429,092 $600,468 Less: Expenses ($187,653) ($194,720) Net Operating Income $241,439 $405,748 Debt Service ($201,199) ($201,199) Net Cash Flow after Debt Service $40,240 $204,549 Principal Reduction $61,847 $61,847 Total Return $102,087 $266,395 Lot Size: 13,370 sf Floors: 2 Parking Spaces: 0.94/unit APN: 74-1305-6-2 Cap Rate: 3.71% Market Cap Rate: 6.24% GRM: 14.7 Market GRM: 10.51 FINANCING SUMMARY Loan Amount: $3,511,956 Down Payment: $2,988,044 Loan Type: Fixed Interest Rate: 4% Term: 30 years ANNUALIZED EXPENSES Actual Market Property Taxes $87,750 $87,750 Insurance $7,284 $7,284 Utilities - Gas & Electric $20,362 $20,362 Utilities - Water & Sewer $19,756 $19,756 Trash Removal $15,833 $15,833 Washer Dryer Rental $2,376 $2,376 Maintenance & Repairs $13,567 $13,567 Management (est) $17,269 $24,336 Administrative Expenses $3,456 $3,456 Total Expenses $187,653 $194,720 Expenses Per RSF $13.48 $13.99 Expenses Per Unit $5,686 $5,901 Monthly Payment: $16,767 DCR: 1.2 page 16 of 28
Comparables
Sales Comparables 8% Cap Rate 16.0 Gross Rent Multiplier 7% 6% 14.0 12.0 Avg. 12.933 5% 10.0 4% 3% Avg. 4.0 8.0 6.0 2% 4.0 1% 2.0 Subject 1 2 3 6 Subject 1 3 6 $272,000 Price per Unit $472 Price per Sq. Ft. $238,000 $204,000 Avg. $237,529 $413 $354 $170,000 $136,000 $295 $236 Avg. $295.04 $102,000 $177 $68,000 $118 $34,000 $59 Subject 1 2 3 4 5 6 7 Subject 1 2 3 4 5 6 7 page 18 of 28
Sales Comparables S NOTES 33 Unit Multifamily Property Desirable Alameda Location Waterfront Property Bayview Apartments Sale Price $6,500,000 Units 33 Price/Unit $196,970 Price/SqFt $466.95 Cap Rate 3.71% Year Built 1959 GRM 14.7 # Units Unit Type 4 2 BR / 1 BA Units 29 1 BR / 1 BA Units 1 1800 Lakeshore Oakland, CA 94606 Sale Date 5/12/2015 Sale Price $4,800,000 Units 19 Price/Unit $252,632 Price/SqFt $362.73 Cap Rate 4.3% Year Built 1907 GRM 14.0 # Units Unit Type 11 One Bedroom One Bath 8 Studio/Efficiency NOTES 11 one-0bedroom units, and 8 studio units. The vintage building has laundry facilities on site, and has waterfront views. The units are cable ready, and come with oven, refrigerator, and granite countertops. Sewer, trash removal, and water is included in the rent. 2 1918 Lakeshore Oakland, CA 94606 Sale Date 6/20/2014 Sale Price $8,400,000 Units 38 Price/Unit $221,053 Price/SqFt $257.53 Cap Rate 5.0% Year Built 1926 GRM NOTES 1918 Lakeshore was built in 1936, has 38 units, with some units facing the water. N/A # Units Unit Type 1 Two Bedroom One Bath 22 One Bedroom One Bath 15 Studio/Efficiency page 19 of 28
Sales Comparables 3 285 Lee St Oakland, CA 94610 Sale Date 10/31/2014 Sale Price $6,150,000 Units 27 Price/Unit $227,778 Price/SqFt $300.45 Cap Rate 3.4% Year Built 1990 GRM 12.9 NOTES 285 Lee St is a 27 unit apartment building. It has 6 2/2 units, 18 1/1 units, and 3 studio units. # Units Unit Type 6 Two Bedroom Two Bath 18 One Bedroom One Bath 3 Studio/Efficiency 4 362 Euclid Oakland, CA 94610 Sale Date 2/13/2015 Sale Price $7,050,000 Units 29 Price/Unit $243,103 Price/SqFt $222.35 Cap Rate N/A Year Built 1969 GRM NOTES 362 Euclid is a 29 unit building. Five 2/2 units, six 2/1 units, and 18 1/1 units. N/A # Units Unit Type 5 Two Bedroom Two Bath 6 Two Bedroom One Bath 8 One Bedroom One Bath 5 444 28th St Oakland, CA 94609 Sale Date 5/8/2015 Sale Price $9,200,000 Units 34 Price/Unit $270,588 Price/SqFt $446.69 Cap Rate N/A Year Built 1955 GRM N/A NOTES 444 28th St is a 34 unit apartment building with Laundry Facilities, Security System, Storage Units. # Units Unit Type page 20 of 28
Sales Comparables 6 3120 Telegraph Ave Berkeley, CA 94705 Sale Date 10/31/2014 Sale Price $7,260,500 Units 32 Price/Unit $226,891 Price/SqFt $118.62 Cap Rate 3.3% Year Built 1909 GRM 11.9 NOTES 3210 Telegraph Hill is a 32 unit apartment building with 2/2 units. There is on-sire laundry. # Units Unit Type 32 Two Bedroom Two Bath 7 2450 Milvia Berkeley, CA 94704 Sale Date 10/31/2014 Sale Price $7,502,500 Units 34 Price/Unit $220,662 Price/SqFt $356.92 Cap Rate N/A Year Built 1964 GRM NOTES 2450 Milvia is a 34 unit apartment building. There are on-sire laundry facilities. N/A # Units Unit Type page 21 of 28
Rental Trends
Rental Trends Quarterly Trend Alameda CA built prior to 1970 Average Asking Rent 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 1 Yr. Change AVERAGE $1,609 $1,637 $1,680 $1,713 $1,757 $1,803 $2,014 $2,011 $2,018 14.9% studio $1,190 $1,257 $1,257 $1,351 $1,348 $1,406 $1,513 $1,517 $1,517 12.5% 1bd 1bth $1,352 $1,375 $1,437 $1,446 $1,484 $1,510 $1,552 $1,601 $1,616 8.9% 2bd 1bth $1,617 $1,664 $1,686 $1,713 $1,752 $1,805 $2,046 $1,993 $2,006 14.5% 2bd 2bth $2,295 $2,074 $2,375 $2,238 $2,527 $2,606 $2,665 $2,878 $2,775 9.8% 2bd TH $1,760 $1,760 $1,760 $1,855 $1,850 $2,133 $2,008 $2,008 $2,008 8.5% 3bd 2bth $1,969 $2,019 $2,019 $2,196 $2,198 $2,224 $2,827 $2,849 $2,849 29.6% 3bd TH Average Occupancy Rate 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 1 Yr. Change AVERAGE 96.7% 96.8% 97.3% 96.2% 97.7% 96.1% 97.9% 97.0% 98.3% 0.6% 6/15/2015 Data source: RealFacts (415)884.2480. Data is deemed reliable but accuracy cannot be guaranteed.
Demographics
Population Executive Summary, Alameda, California, 94501 Rings: 1, 3, 5 mile radii Latitude: 37.77156 Longitude: -122.28291 1 mile 3 miles 5 miles 2000 Population 20,450 127,802 337,619 2010 Population 20,617 130,192 334,464 2015 Population 21,070 134,643 345,703 2020 Population 22,029 141,786 364,366 2000-2010 Annual Rate 0.08% 0.19% -0.09% 2010-2015 Annual Rate 0.41% 0.64% 0.63% 2015-2020 Annual Rate 0.89% 1.04% 1.06% 2015 Male Population 47.6% 49.1% 48.7% 2015 Female Population 52.4% 50.9% 51.3% 2015 Median Age 39.4 39.4 38.1 In the identified area, the current year population is 345,703. In 2010, the Census count in the area was 334,464. The rate of change since 2010 was 0.63% annually. The five-year projection for the population in the area is 364,366 representing a change of 1.06% annually from 2015 to 2020. Currently, the population is 48.7% male and 51.3% female. Median Age The median age in this area is 39.4, compared to U.S. median age of 37.9. Race and Ethnicity 2015 White Alone 41.7% 34.6% 36.7% 2015 Black Alone 8.5% 15.6% 19.0% 2015 American Indian/Alaska Native Alone 0.6% 0.6% 0.8% 2015 Asian Alone 36.6% 35.1% 26.1% 2015 Pacific Islander Alone 0.7% 0.4% 0.5% 2015 Other Race 4.1% 7.0% 10.6% 2015 Two or More Races 7.8% 6.6% 6.4% 2015 Hispanic Origin (Any Race) 11.8% 15.2% 20.9% Persons of Hispanic origin represent 20.9% of the population in the identified area compared to 17.6% of the U.S. population. Persons of Hispanic Origin may be of any race. The Diversity Index, which measures the probability that two people from the same area will be from different race/ethnic groups, is 84.0 in the identified area, compared to 63.0 for the U.S. as a whole. Households 2000 Households 8,581 51,960 134,173 2010 Households 8,615 55,367 138,591 2015 Total Households 8,810 57,264 143,231 2020 Total Households 9,232 60,470 151,323 2000-2010 Annual Rate 0.04% 0.64% 0.32% 2010-2015 Annual Rate 0.43% 0.64% 0.63% 2015-2020 Annual Rate 0.94% 1.10% 1.11% 2015 Average Household Size 2.38 2.29 2.36 The household count in this area has changed from 138,591 in 2010 to 143,231 in the current year, a change of 0.63% annually. The fiveyear projection of households is 151,323, a change of 1.11% annually from the current year total. Average household size is currently 2.36, compared to 2.36 in the year 2010. The number of families in the current year is 74,477 in the specified area. Data Note: Income is expressed in current dollars Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and 2020. Esri converted Census 2000 data into 2010 geography. June 09, 2015 2015 Esri Page 1 of 2
Median Household Income Executive Summary, Alameda, California, 94501 Rings: 1, 3, 5 mile radii Latitude: 37.77156 Longitude: -122.28291 1 mile 3 miles 5 miles 2015 Median Household Income $65,585 $47,374 $50,855 2020 Median Household Income $76,235 $54,296 $58,273 2015-2020 Annual Rate 3.06% 2.77% 2.76% Average Household Income 2015 Average Household Income $87,356 $72,540 $77,402 2020 Average Household Income $100,854 $83,263 $88,843 2015-2020 Annual Rate 2.92% 2.80% 2.80% Per Capita Income 2015 Per Capita Income $36,953 $31,539 $32,505 2020 Per Capita Income $42,779 $36,185 $37,312 2015-2020 Annual Rate 2.97% 2.79% 2.80% Households by Income Current median household income is $50,855 in the area, compared to $53,217 for all U.S. households. Median household income is projected to be $58,273 in five years, compared to $60,683 for all U.S. households Current average household income is $77,402 in this area, compared to $74,699 for all U.S. households. Average household income is projected to be $88,843 in five years, compared to $84,910 for all U.S. households Current per capita income is $32,505 in the area, compared to the U.S. per capita income of $28,597. The per capita income is projected to be $37,312 in five years, compared to $32,501 for all U.S. households Housing 2000 Total Housing Units 8,916 55,020 140,814 2000 Owner Occupied Housing Units 2,900 15,371 47,680 2000 Renter Occupied Housing Units 5,681 36,590 86,493 2000 Vacant Housing Units 335 3,059 6,641 2010 Total Housing Units 9,256 61,046 152,709 2010 Owner Occupied Housing Units 3,116 16,744 49,682 2010 Renter Occupied Housing Units 5,499 38,623 88,909 2010 Vacant Housing Units 641 5,679 14,118 2015 Total Housing Units 9,423 63,137 157,944 2015 Owner Occupied Housing Units 2,942 16,171 47,971 2015 Renter Occupied Housing Units 5,868 41,093 95,260 2015 Vacant Housing Units 613 5,873 14,713 2020 Total Housing Units 9,894 66,863 167,324 2020 Owner Occupied Housing Units 3,046 16,873 49,856 2020 Renter Occupied Housing Units 6,186 43,597 101,466 2020 Vacant Housing Units 662 6,393 16,001 Currently, 30.4% of the 157,944 housing units in the area are owner occupied; 60.3%, renter occupied; and 9.3% are vacant. Currently, in the U.S., 55.7% of the housing units in the area are owner occupied; 32.8% are renter occupied; and 11.6% are vacant. In 2010, there were 152,709 housing units in the area - 32.5% owner occupied, 58.2% renter occupied, and 9.2% vacant. The annual rate of change in housing units since 2010 is 1.51%. Median home value in the area is $497,054, compared to a median home value of $200,006 for the U.S. In five years, median value is projected to change by 5.02% annually to $634,877. Data Note: Income is expressed in current dollars Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and 2020. Esri converted Census 2000 data into 2010 geography. June 09, 2015 2015 Esri Page 2 of 2
DISCLAIMER All materials and information received or derived from Silicon Valley Multifamily Group its directors, officers, agents, advisors, affiliates, and/or any third party sources are provided without representation or warranty as to completeness, veracity, or accuracy, condition of the property, compliance or lack of compliance with applicable governmental requirements, developability or suitability, financial performance of the property, projected financial performance of the property for any party s intended use or any and all other matters. Neither Silicon Valley Multifamily Group its directors, officers, agents, advisors, or affiliates makes any representation or warranty, express or implied, as to accuracy or completeness of the any materials or information provided, derived, or received. Materials and information from any source, whether written or verbal, that may be furnished for review are not a substitute for a party s active conduct of its own due diligence to determine these and other matters of significant chance to such party. Silicon Valley Multifamily Group will not investigate or verify any such matters or conduct due diligence for a party unless otherwise agreed in writing. Seller desires to sell the property in "its present as is condition" subject to inspection reports. EACH PARTY SHALL CONDUCT ITS OWN INDEPENDENT INVESTIGATION AND DUE DILIGENCE. Any party contemplating or under contract or in escrow for a transaction is urged to verify all information and to conduct their own inspections and investigations including through appropriate third party independent professionals selected by such party. All financial data should be verified by the party including by obtaining and reading applicable documents and reports and consulting appropriate independent professionals. Silicon Valley Multifamily Group makes no warranties and/or representations regarding the veracity, completeness, or relevance of any financial data or assumptions. Silicon Valley Multifamily Group does not serve as a financial advisor to any party regarding any proposed transaction. When analyzing this property buyer should use income, vacancy and expense levels that will accurately reflect the manner in which it plans to operate the property. Broker, Agent and Seller are making no representations or warranties as to the level of income or expenses Buyer will incur at the property. Building square footage, unit square footage and lot sizes are not guaranteed. Broker, Agent and Seller have not measured all units, lot or the building and are making NO representation as to the accuracy of square footage figures. Data source for building and lot size is FastWeb. Buyer should measure all units, lot and the building prior to purchase and should not rely on any square footage figures provided by Broker, Agent or Seller. All data and assumptions regarding financial performance, including that used for financial modeling purposes, may differ from actual data or performance. Any estimates of market rents and/or projected rents that may be provided to a party do not necessarily mean that rents can be established at or increased to that level. Parties must evaluate any applicable contractual and governmental limitations as well as market conditions, vacancy factors and other issues in order to determine rents from or for the property. Legal questions should be discussed by the party with an attorney. Tax questions should be discussed by the party with a certified public accountant or tax attorney. Title questions should be discussed by the party with a title officer or attorney. Questions regarding the condition of the property and whether the property complies with applicable governmental requirements should be discussed by the party with appropriate engineers, architects, contractors, other consultants and governmental agencies. Do Not Disturb -- Please respect the Seller's request that the tenants not be disturbed. All offers are to be written subject to inspection. The Seller will provide access for the Buyer to inspect the interiors of all units within a reasonable period following a fully executed purchase contract. Seller requests that all inspections be made on the same day. Representation -- This information is given with the understanding that all negotiations relating to the purchase of the property described herein shall be conducted through Silicon Valley Multifamily Group. All properties and services are marketed by Silicon Valley Multifamily Group in compliance with all applicable fair housing and equal opportunity laws. page 27 of 28
OFFERING MEMORANDUM NOTES Gross Annual Scheduled Income & the Gross Rent Multiplier are based on current rents shown in the Rent Roll. These rent levels are current rent levels at the time this package was prepared and subject to change without notice. Buyer should review most recent rent roll prior to purchase. The laundry income was based on 2011 actual levels. Gross Annual Scheduled Income & Gross Income Multiplier (Market or Pro Forma) assumes the units are all rented at the rent levels shown in the Pro Form Summary. These rent levels are not guaranteed to be achievable by Seller, Broker or Agent. Buyer should use rent levels it thinks it can obtain for the subject property. The laundry income was based on the actual 2011 laundry income reported by the owner. Capitalization Rate is based on rents, expenses and vacancy figures shown in the Operating Statement. Pro Forma Capitalization Rate is based on rents, expenses and vacancy figures shown in the Pro-Forma Operating Statement Pro-Forma (Market) column. See Pro Forma Operating Statement Footnotes and Disclaimers in this section of the Offering Memorandum. Year Built: Data source is through Chicago Title Company. Seller, Broker and Agent are making no guarantee or representations as to when the improvements were built. Buyer should conduct its own investigation to determine age of improvements. UNIT MIX/SCHEDULED INCOME OVERVIEW FOOTNOTES Current Rent Column is based on current rents shown in the Rent Roll. These rent levels are current rent levels at the time this package was prepared and subject to change without notice. Buyer should review most recent rent roll prior to purchase. Pro Forma or Market Rents assumes the units are all rented at the estimated market rent levels shown in the rent roll. Please note that current rents are not at these levels. Pro Forma rent levels are not guaranteed to be achievable by Seller, Broker or Agent. Buyer should use rent levels it thinks it can obtain for the subject property. Purchase Information on page 4 including Fair Market Value, Resale Valuation and Resale Expenses are provided for illustrative purposes only and will vary depending on market conditions and other factors. Silicon Valley Multifamily Group, its Brokers and Agents can not be held accountable for these numbers. Buyer should use the numbers it thinks most appropriate. Financial Information on page 4 including Down Payment, Closing Costs, LT Capital Gain, Federal and State Tax Rates and the Discount Rate are provided for illustrative purposes only. Actual numbers may, and probably will, vary depending on the Buyer s individual situation. Loans on page 4. This information is provided for illustrative purposes only. Buyer should use the loan information it thinks attainable and realistic for the property. Annual Property Operating Data Notes and Disclaimers Rental Income is based on current rents shown in the Rent Roll Miscellaneous income is based upon information provided by the owner or manager. General Vacancy is estimated to be at current market levels or provided by owner. Taxes are estimated based on list price and based on 2011/2012 tax rate reported by Santa Clara County. Other Expenses All other expenses are as reported by owner or property manager. Loan Payment is based upon information provided in the LOANS section of page 4. Buyer should use the loan information it thinks attainable and realistic for the property. Income Taxes is based upon a 33% or greater tax rate and is provided for illustrative purposes only. Buyer should consult with a licensed tax professional in determining the most realistic and appropriate tax rate. NOTE: THE 10 YEAR PROJECTIONS ARE PROVIDED FOR ILLUSTRATIVE PURPOSES ONLY. BUYER SHOULD USE THE PROJECTIONS IT THINKS ARE REALISTIC AND ATTAINABLE. Rent Roll Notes General Notes: Rent levels, occupancy, deposit amounts and terms are subject to change without notice. Move-In dates are subject to change as units turnover. Buyer should obtain updated information and confirm all rent levels, lease terms, move-in dates, amount of last rental adjustment and deposit amounts prior to purchase. Market Rent column does not reflect current rent levels. These rent levels are not guaranteed to be achievable by Seller, Broker or Agents. Buyer should use rent levels it thinks it can obtain for the subject property. page 28 of 28