Duncan, Oklahoma Magnolia Manor Apartments 2406 Country Club Road

Arkansas Oklahoma Kansas Duncan, Oklahoma Magnolia Manor Apartments 2406 Country Club Road Mike Buhl CRRC-OKC 405.360.5966 buhl@crrc.us Darla Knight CRRC-Tulsa 918.557.5966 darla@crrc.us Providing professional apartment brokerage and marketing services for over 29 years

Table of Contents 1. Property Highlights Photographs Submarket Map Neighborhood Map Submarket Employers Map of Major Employers Offering Description Property Description Unit Summary 2. Purchase Price and Terms Purchase Price and Terms 3. Income/Expense Statement Income & Expense Statement 4. Rent & Sale Comparables Sale Comparables 5. Seminole Overview Duncan Overview 6. Oklahoma Broker Relationship Act Oklahoma Broker Relationship Act The information included herein is from reliable sources, but is not guaranteed and is offered subject to errors and omissions.

Submarket Map

Neighborhood Map

Aerial Map

Offering Description Magnolia Manor is a 55 unit apartment community conveniently located in Duncan, Oklahoma. Duncan is part of the Great Plains area where the historic Chisholm Trail crossed, and where oil fields became Oklahoma's highest producing area until the 1980's. It has multiple lakes that are used to draw the city water supply as well as for recreation. As of the 2010 Census, the population of Stephens County is 45,048 and the population of Duncan is approximately 22,500. The oil industry has been an employment leader in Stephens County for many years. Duncan s largest employer, Halliburton Energy Services, employs people in oil field services, manufacturing, research and administration. Other businesses not connected to the oil industry, such as the Family Dollar Distribution Center, have been attracted to Duncan through the efforts of the Duncan Economic Development Foundation (DAEDF). Offering Highlights: Exceptionally Stable property Excellent Submarket supported by local employers Minimal number of competitive properties Excellent Unix Mix New Roofs completed in 2010 Unique setting near Upscale Homes and the Duncan Golf and Country Club

Offering Description Duncan is located in Southwest Oklahoma in Stephens County approximately 90 miles south of Oklahoma City.

Property Description: Magnolia Manor is a two-story garden style apartment community situated within a beautifully landscaped community. The property had new roofs in 2010. Property Location: Number of Units: Located in Duncan, Oklahoma which is 90 miles southwest of Oklahoma City. Access to Duncan is very convenient via Highways 7 and 81 that intersect with Interstate 44 to the North and West and 35 to the East. With a population of over 22,500, Duncan is a small community that is well diversified with major employers, education, healthcare and recreation. 55 Units Year Built: 1968 Apartment Features: Kitchen with Full Appliance Package Wall-to-wall Carpet Spacious Closets Vertical and Mini-blinds Ceiling Fans Property Amenities: Construction: Style: Magnolia Manor has an on-site laundry facility and storage closets for the residents. The setting is unique among tall trees and lush landscaping. Two-story Garden Style Exterior: Wood Frame with brick veneer and wood siding exterior. Roof: Parking: The roofs are pitched with composition shingles. New roofs completed in 2010. The parking areas are concrete with concrete curbs and walkways. Number of Buildings: The property consists of three buildings with a covered breezeway.

Mechanical System: Electrical Metering: Master metered. HVAC: Hot Water: Water: The property is master metered for utilities and served by a forced air two pipe chilled water air conditioning system and boiler heating system. Central gas hot water heater. Property pays for hot water. Provided by the property Current Occupancy: 98% Recent Capital Improvements: New roofs on all buildings (2010) New gutters (2006) Exterior paint in the past 3 years Carpets in 24 apartments $19,500 28 new appliances $17,000 1 new chiller $55,000 New barrel on the other chiller $18,000 2 new hot water heaters $12,000

UNIT SUMMARY No. Units #Bdrm/Bth Sq.Ft. Total Sq.Ft. Market Rent/Sq.Ft. Gross/Mo. Gross/Yr. 1 Effiency 550 550 500.00 0.91 500 6,000 30 1 Bed / 1 Bath 730 21,900 502.50 0.69 15,075 180,900 8 2 Bed / 2 Bath 1,030 8,240 555.00 0.54 4,440 53,280 10 2 Bed / 1 Bath 1,030 10,300 535.00 0.52 5,350 64,200 3 2 Bed / 1.5 Bath 1,030 3,090 545.00 0.53 1,635 19,620 3 3 Bed / 2 Bath 1,300 3,900 660.00 0.51 1,980 23,760 55 872 47,980 526.91 0.60 28,980 347,760 DISTRIBUTION RATIO 2Bed 38% 3Bed 5% 1Bed 57%

Purchase Price & Terms Purchase Price: $1,430,000 Terms of Sale: Buyer to obtain new financing Price Per Apartment Unit: $26,000 Price Per Net Rentable Sq. Ft. $29.80 Cap Rate: 9.01%

Operating Data Highlights Income Proforma Income is trending at a conservative 1.2% higher than 2013 actual, leaving some value add potential to raise rents. We have applied a 5% vacancy loss which is typical for this property. Other Income is based on historical actual. Expenses Expenses are calculated at 3,937 per unit per year. Real Estate taxes have been adjusted to the purchase price. Mortgage and Debt Service Buyer to obtain new financing

Annual Property Operating Data Project: Magnolia Manor Purchase Price: $ 1,430,000 Run Date: 31-Jan-14 Location: 2406 Country Club Rd - Duncan Per Unit: $ 26,000 Cap Rate on Proforma 9.01% Number of Units: 55 Per Foot: $ 29.80 Cash-On-Cash on Proforma 14.47% Net Rentable S.F. 47,980 First Mortgage Balance: $ 1,072,500 GRM: 4.11 Avg. Unit Size: 872 Estimated Equity: $ 357,500 25% No. Units #Bdrm/Bth Sq.Ft. Total Sq.Ft. Market Rent/Sq.Ft. Gross/Mo. Gross/Yr. 1 Effiency 550 550 500.00 0.91 500 6,000 30 1 Bed / 1 Bath 730 21,900 502.50 0.69 15,075 180,900 8 2 Bed / 2 Bath 1,030 8,240 555.00 0.54 4,440 53,280 10 2 Bed / 1 Bath 1,030 10,300 535.00 0.52 5,350 64,200 3 2 Bed / 1.5 Bath 1,030 3,090 545.00 0.53 1,635 19,620 3 3 Bed / 2 Bath 1,300 3,900 660.00 0.51 1,980 23,760 55 872 47,980 526.91 0.60 28,980 347,760 2010 2012 2013 Proforma Per Unit Financing INCOME Potential Rent Per Schedule 350,923 347,760 347,760 347,760 6,323 (Loss)/Gain to Leases - - - 0% - - Gross Possible Rent Per Leases 350,923 347,760 347,760 347,760 6,323 Vacancy Losses 34,495 29,058 20,816 5% 17,388 316 Other Rental Losses - - - - - - - - - Net Rental Income 316,428 318,702 326,944 330,372 6,007 Utility - - - - - Other Income 18,378 15,217 14,138 15,000 273 Total Income 334,806 333,919 341,082 345,372 6,279 EXPENSES Payroll Expenses 58,619 41,736 50,626 44,000 800 Management Fees - 16,688 17,025 5% 17,269 314 Administrative Expenses 10,075 8,406 9,311 9,000 164 Advertising 1,306 1,188 796 1,200 22 Water/Sewer/Trash 25,529 22,700 21,807 21,807 396 Electric Common 26,966 33,031 36,096 36,096 Gas 19,745 13,978 14,260 14,260 259 Landscaping - 5,300 4,350 5,000 Damages (3,837) - - - - Repair & Maintenance 33,407 35,255 34,552 33,000 600 Property Tax 3,714 11,462 11,965 13,500 245 Insurance 14,027 18,373 33,143 21,400 389 Potential First Mortgage - - - - - Current Bal. $ - Total Operating Expenses 189,551 208,117 233,931 216,532 Original Bal. $ 1,072,500 Per Unit 3,446 3,784 4,253 3,937 Maturity - 7 Per Sq. Ft. 3.95 4.34 4.88 4.51 Amortization 25 Interest Rate 5.25% Net Operating Income 145,255 125,802 107,151 128,840 Constant 7.191% Debt Service $ 77,123 Interest Expense - - - Debt Service - - - 77,123 Cash Flow 145,255 125,802 107,151 51,717 Real Estate Tax Information: Assessed Value: 139,381 Rate/$1000: 87.55 Value: $1,267,100 Account: 1126-00-002-010-0-000-00 Tax Amount: $12,203 Tax Dist: Per Unit: $23,038.18 2013 Insurance covers more than a 12-month period 2013 Payroll is higher than normal due to an add'l part-time maintenance man for make ready units

Sold Comparison Property Address: 800 NW 12th Street, Moore, OK Size and Age: 104-units, Built in 1973 Price: $2,529,000 Price Per Unit: $24,317 Closing Date: 07 / 2012 Total Square Footage: 81,607 Springs of Moore Property Address: 2111 NW Lindy, Lawton, OK Size and Age: 79-units, Built in 1984 Price: $1,825,000 Price Per Unit: $23,101 Closing Date: 02 / 2012 Total Square Footage: 54,920 Sherlin Property Address: 1200 & 1400 W. Elm, El Reno, OK Size and Age: 87-units, Built in 1970 Price: $1,850,000 Price Per Unit: $21,264 Closing Date: 09 / 2011 Total Square Footage: 68,620 LaVilla / The Elms Property Address: 101 Partridge Drive, Pryor, OK Size and Age: 68-units, Built in 2000 Price: $1,960,000 Price Per Unit: $28,823 Closing Date: 06 / 2012 Total Square Footage: 58,612 Country Club Villa Limited comp data is available in Duncan. Therefore, the above comps were selected because of their similarities in quality and construction and are all located in submarket locations.

Sale Comp Summary Property Price/Unit Overall Price No. Unit Year Built Price Per Square Foot Springs of Moore $24,317 $2,529,000 104 1973 $30.99 Sherlin $23,101 $1,825,000 79 1984 $33.23 LaVilla / The Elms $21,264 $1,850,000 87 1970 $26.96 Country Club Villa $28,823 $1,960,000 68 2000 $33.44 Average $24,153 $8,164,000 338 $30.95 Magnolia Manor $26,000 $1,430,000 55 1968 $29.81 Price Per Unit $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $ $24,317 $23,101 $21,264 $28,823 $26,000 Springs of Moore Sherlin LaVilla / The Elms Country Club Magnolia Manor

Duncan Community Profile Duncan s western heritage began as an early settlement built around a trading post owned by William Duncan along the Chisholm Trail in southwest Oklahoma. Cowboy camps spawned by the cattle drives were plentiful in the area around Duncan because of running streams and lush grasses. The official birth date of Duncan is June 27, 1892, which was marked by the arrival of the first scheduled passenger train on the new Rock Island Railroad which had recently been completed through Duncan. When Stephens County was created with statehood in 1907, Duncan was named the county seat and quickly outgrew surrounding towns. Duncan prospered with cotton as a main crop. The oil industry quickly brought greater prosperity to Duncan during the 1920s when Stephens County s oil fields became and remained Oklahoma s highest producing areas until the 1980s. 1 Earl P. Halliburton established an oil field servicing business in Duncan which has become a world-wide operation still known as Halliburton. Today, Duncan celebrates its rich western heritage with multiple monuments marking the historic Chisholm Trail, an annual Founder s Day event, historical sidewalks along Main Street that offer details of Duncan s history, and two outstanding museums. Duncan continues to progress forward as it supports expanding educational opportunities for youth and adults, steadily increases health care facilities, and attracts businesses to the area that include high-tech industries, distribution and oil field services. Citizens of Duncan enjoy a city with immense social and recreational activities for all ages and an exceptionally low crime rate. Visitors to Duncan can experience our western heritage at our award-winning Chisholm Trail Heritage Center. They are also pleased to find a multitude of cultural and outdoor recreational opportunities, as well as indoor meeting and event facilities.

OKLAHOMA REAL ESTATE COMMISSION What You Need to Know About Broker Services A real estate broker may work with one or both parties to a real estate transaction. The Oklahoma Broker Relationships Law (Title 59, Oklahoma Statutes, 858-351 858-363) allows a real estate firm to provide brokerage services to both parties to the transaction. This could occur when a firm has contracted with a seller to sell their property and a prospective buyer contacts that same firm to see the property. If the prospective buyer wants to make an offer on the property, the firm must now provide a written notice to both the buyer and seller that the firm is now providing brokerage services to both parties to the transaction. Oklahoma real estate brokers have mandatory duties and responsibilities to all parties in a real estate transaction. These duties and responsibilities shall be described and disclosed in writing prior to signing a contract to sell, purchase, lease, option or exchange real estate. These duties and responsibilities are to: Treat all parties with honesty and exercise reasonable skill and care. Receive all written offers and counteroffers, reduce offers or counteroffers to a written form upon request of any party to a transaction and present timely all written offers and counteroffers (unless specifically waived in writing by a party). Timely account for all money and property received by the broker. Disclose information pertaining to the property as required by the Residential Property Condition Disclosure Act. Comply with all requirements of The Oklahoma Real Estate License Code and all applicable statutes and rules. Keep confidential information received from a party or prospective party confidential unless written consent is granted by the party, the disclosure is required by law, or the information is public or becomes public as the results of actions from a source other than the broker. Confidential information includes: o That a party is willing to pay more or accept less than what is being offered o That a party or prospective party is willing to agree to financing terms different from those offered o The motivating factors of the party or prospective party purchasing, selling, leasing, optioning or exchanging the property o Any information specifically designated as confidential by the party unless such information is public. A broker has additional duties and responsibilities only to a party for whom the broker is providing brokerage services. These duties and responsibilities shall also be described and disclosed in writing prior to signing a contract to sell, purchase, lease, option and exchange real estate. These duties are to: Inform the party in writing when an offers is made that the party will be expected to pay certain costs, brokerage services costs and approximate amount of the costs. Keep the party informed regarding the transaction. If a broker intends to provide fewer brokerage services than those required to complete a transaction, the broker shall provide written disclosure to the party for whom the broker is providing services. The disclosure shall include a description of those steps in the transaction that the broker will not provide and state that the broker assisting the other party in the transaction is not required to provide assistance with these steps in any manner. Disclosure of these duties and responsibilities is required in writing. The duties and responsibilities disclosed by the broker shall be confirmed in writing by each party in a separate provision, incorporated in or attached to the contract to purchase, option or exchange real estate. Services provided to a tenant do not automatically create a broker relationship. When a broker provides brokerage services to a landlord under a property management agreement, the services provided to the tenant by the broker shall not be construed as creating a broker relationship between the broker and the tenant unless otherwise agreed to in writing; however, the broker owes to the tenant the duties of honesty and exercising reasonable skill and care. For more information, visit www.orec.ok.gov This form was created by the Oklahoma Real Estate Contract Form Committee and approved by the Oklahoma Real Estate Commission. OREC BROKER SERVICES INFORMATION (11-2013)