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PROPOSAL FOR REAL ESTATE ADVISORY SERVICES

MARQUIS ON BRIAR FOREST

14515 Briar Forest Houston, TX 77077

PRESENTED TO


TABLE OF CONTENTS

01 Executive Summary 02 Property Overview 03 Valuation 04 Market Overview 05 Marketing Strategy 06 Execution Team 07 Corporate Overview


MARQUIS ON BRIAR FOREST


01

Executive Summary


INTRODUCTION CBRE’s Houston Multifamily Investment Sales team is pleased to present their proposal for the potential disposition assignment of Marquis on Briar Forest in Houston, Texas. Our team of specialists is uniquely qualified to manage the marketing and sales process for CWS Capital Partners and has the transaction experience to deliver superior results. Ryan Epstein and Clint Duncan have impressive records of success in multifamily investment sales and Ryan Epstein is currently ranked as some of CBRE’s top national producers. With CBRE’s Debt & Structured Finance group (DSF) working as part of our team, we are able to provide a complete capital markets solution. This DSF team will be responsible for sourcing the most aggressive debt sources for potential investors, allowing CBRE to drive pricing higher by providing buyers the most aggressive financing options in the marketplace and mitigating execution risk. By combining our proven marketing strategy and managed bid process, we can achieve the highest value in the most efficient manner for Marquis on Briar Forest. In marketing Marquis on Briar Forest, we will fully engage the resources available through CBRE’s national platform to facilitate this process. Our team is highly unique in its ability to reach aggressive capital sources, which is strongly enhanced by our national and global platform. These resources will be utilized in positioning the asset, presenting creative customized debt structures to each buyer, and offering support to each buyer’s underwriting assumptions.

THE ASSIGNMENT Through the CBRE team’s recent experience in marketing comparable assets in Houston and other markets in Texas, we have unmatched reconnaissance on which candidates will aggressively pursue this opportunity. Our experience with these capital sources has also allowed us to identify the key underwriting methodology and financial drivers for each buyer, which will allow us to properly position and “sell” the property’s key unique attributes. We are committed to delivering financial successes characterized by a smart, energetic and creative effort supported by tight administration and well-tested processes.

Executive Summary

Marquis on Briar Forest is a elegant multifamily community situated in the Energy Corridor and just minutes from the Galleria, Downtown and all that Houston has to offer. The task at hand is to capture the attention of the most aggressive apartment investment capital and persuade them to pay far more than typical for these features. We are the team to accomplish that mission; however, at the same time, our job is to anticipate and manage risks, even macro ones that might affect the process and results, as we guide ownership around potential pitfalls.

6


VALUATION SUMMARY Marquis on Briar Forest is a high-end, well-appointed multifamily community for those seeking a dynamic city lifestyle and Energy Corridor employment opportunities. Our expectation is that Marquis on Briar Forest will capture top-of-the-market pricing, and we expect to produce an array of aggressive, highly qualified offers from the best buyer capital in today’s market, proceeding to a 2015 concluded sale.

SUMMARY OF VALUES INVESTOR UNDERWRITING

NUMBER OF UNITS

POTENTIAL REACH

POTENTIAL REACH/ UNIT

COMPETITIVE OFFER

COMPETITIVE OFFER/UNIT

STRONG PRICE SUPPORT

STRONG PRICE SUPPORT/UNIT

396

$56,300,000

$142,172

$54,350,000

$137,247

$52,525,000

$132,639

OUR OBJECTIVES

• Establish a marketing strategy emphasizing Marquis on Briar Forest’s inherent strengths that will attract the most aggressive investors in the market • Execute the marketing process in a timely and efficient manner • Negotiate and manage the transaction process to close at the best price with minimal risk and inconvenience to CWS Capital Partners

Executive Summary

• Execute a capital event achieving a maximum value for CWS Capital Partners by emphasizing the unique attributes and the dynamics of the surrounding area’s strengths and demand indicators

7


THE CBRE ADVANTAGE This CBRE team is uniquely qualified to represent CWS Capital Partners, and as one of the most productive groups in the nation, our team offers the following:

INDIVIDUAL CLIENT FOCUS Thoughtful representation enhances success! Given the amount of product from which to choose, you need a representative who will identify new and better ways to market your asset to achieve the highest price. We know that one size does not fit all. Your development was well planned and so should the marketing of it. We will utilize the best methods to generate the highest proceeds with certainty of closing, guaranteeing that your investment will not get lost in an assembly line of listings. Our team will be fully dedicated to this assignment, and we have a fully staffed Houston office with corporate level resources to handle the disposition of Marquis on Briar Forest, and make it a priority for our team.

ATTENTION TO DETAIL In all transactions, the difference comes down to the details. This team prides itself on the details, you will not find a group that can better articulate not only the submarket story, but the financial story as well. We use this knowledge and information to help push underwriting both in loan proceeds and year-one buyer assumptions to maximize value for our clients.

UNPARALLELED ACCESS TO CAPITAL The CBRE Multifamily Debt & Structured Finance team has originated both debt and equity for apartment buyers and owners totaling more than $7 billion dollars since 2006. This integration of investment sales and debt, equity and finance allows us to provide a complete capital market solution to the buyer. This enables your sales team to closely monitor and advise the seller on the financing process and more importantly, gives us the capability to stretch sales proceeds by providing buyers the most aggressive financing options in the marketplace.

Executive Summary

WE ARE NOT REAL ESTATE “GENERALISTS,” BUT EXPERTS IN EVERY CORNER OF OUR BUSINESS. WE ARE CONSULTANTS PROVIDING STRATEGIC ADVICE, CREATIVE SOLUTIONS AND CONSISTENT DELIVERY OF SERVICE. IF YOU HAVE DECIDED THAT THE TIME IS RIGHT TO SELL, CBRE IS UNDENIABLY THE BEST CHOICE.

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Executive Summary 9


MARQUIS ON BRIAR FOREST


02

Property Overview


PROPERTY ANALYSIS We find it best when evaluating a new project to determine the strengths and concerns in order to assist in both the evaluation component as well as planning for disposition. Completing this preemptive due diligence allows our team to prepare for any concerns that a prospect may have. We prepare mitigating factors to overcome possible objections before they arise.

WHY MARQUIS ON BRIAR FOREST?

Property Overview

STRENGTHS

12

• Marquis on Briar Forest has great visibility with adjacency to Briar Forest Drive. The East/West street provides excellent drive-by traffic and allows residents convenient access to retail, employment, and entertainment options. • The property is well positioned with easy access to major thoroughfares including Highway 6 and the Sam Houston Tollway that intersect Interstate 10 and Westpark Tollway. The nearby infrastructure connects residents to all points in the metro-Houston area. • Convenient access and proximity to employment nodes including the Energy Corridor with major employers such as BP America (9,537 employees), Shell Oil Company (3,000 employees), ConocoPhillips (2,600 employees), and Foster Wheeler (1,000 employees). • According to ADS, the West Memorial / Briar Forest submarket has seen rental rates increase of 13.7% over the past twelve months. • Nearby retail amenities include: The Galleria Mall (#1 shopping and tourist attraction in Houston), Uptown Park, CityCentre, Memorial City Mall as well numerous other shopping destinations and dining options. • Marquis on Briar Forest is projected to be sold at an attractive basis to a buyer with pricing at slightly below replacement cost. • Located in one of the most sought after submarkets in Houston, right in the heart of the Energy Corridor. • Great value-add opportunity.


MARKET CONCERNS NEW SUPPLY IN WEST MEMORIAL / BRIAR FOREST MITIGATING FACTORS

• As of October 2014, Houston is #2 in the country in job creation in the past 12 months. Houston is experiencing a large influx of highly paid and educated residents with future population growth slated at 9% in the next 5 years. • Increased construction cost on new apartment projects require the achievement of significantly higher rents positioning Marquis on Briar Forest as a cost alternative and leaving room to grow rents. • Understanding the new multifamily delivery schedule.

ABILITY TO GROW FUTURE RENTS MITIGATING FACTORS

• The delta between new construction rents and current market rents at Marquis on Briar Forest will allow for future rent growth by maintaining an appropriate discount to new apartment communities. • Take advantage of strong job growth in the Energy Corridor, which has recently become Houston’s second largest employment center that includes more than 84,000 employees and almost 21 million square feet of office space. • Creates great value-add opportunity.

PROPERTY TAX CONCERNS MITIGATING FACTORS

• Understanding HCAD’s approach to property taxes and how it will affect Marquis on Briar Forest. • Walk potential buyers through the property tax process to ensure they will underwrite a realistic number.

CONVERSION TO HOMEOWNERSHIP MITIGATING FACTORS • Price point in the market is high with an average housing value of $331,076 within a one mile radius; additionally property taxes are not an issue with multifamily and must be factored into the cost of owning a house. • Lending standards continue to be tight, requiring at least 20% down in most cases, making it more difficult to obtain a loan. • Demographic reports show within a three miles radius 65.7% of households are 1 or 2 person households demonstrating a strong renter profile.

Property Overview 13


MARQUIS ON BRIAR FOREST


03

Valuation


POTENTIAL VALUE CREATION ABOVE MID RANGE BOV PRICING

$129,419/UNIT

CO MPO NE NTS OF VALUE

VA LUE BA S E CA S E (P R OFOR MA INCOM E A ND E X P E NS E S < E FFE CT IV E R E NT S OF $1.25/ SF, TA X E S AT 85% OF P UR CH A SE P R ICE , 5.25% S T R ONG P R ICE S UP P OR T CA P R AT E )

5 .25% TO 5.00% CAP R ATE CAP RATE MOVEMEN T FROM STRON G PRICE SUPPORT ( 5. 25%) TO COMPETITIVE OFFERS PRICIN G ( 5. 00%)

$129,419

$4, 482

$1.25 TO $1.27 PSF INCREASE E F F E C TIV E RE NTS INC RE A S E DUE TO INC RE A S E IN S C HE DUL E M A RKE T RE NTS

$ 3 ,2 2 0

$137,247

Va l u a t i o n

$ 1 2 5 ,0 00

16

$127,50 0

$130, 000

$132, 500

$ 1 3 5 ,0 0 0


PROPERTY OVERVIEW

396 TOTAL RENTABLE UNITS

PROPOSED VALUES | ALL CASH

PROPERTY SUMMARY

VALUATION BASED ON DIRECT CAPITALIZATION* (BASED ON INVESTOR UNDERWRITING)

NUMBER OF UNITS

CAP RATE

4.75% $56,300,000

PER UNIT

$142,172

PER SQUARE FOOT

$162.01

AVERAGE UNIT SIZE

CAP RATE PROPOSED VALUE PER UNIT

5.00% $54,350,000 $137,247

PER SQUARE FOOT

$156.39

CAP RATE PROPOSED VALUE

347,520 SF NET RENTABLE AREA

PER UNIT PER SQUARE FOOT

PR I N C I PAL & I N T ER ES T CASH ON CASH

PER UNIT PER SQUARE FOOT

5.25% $52,525,000

2.56%

3.23%

3.90%

$56,300,000

$54,350,000

$52,525,000

$142,172

$137,247

$132,639

$162.01

$156.39

$151.14

I N T ER ES T ON LY CASH ON CASH PROPOSED VALUE

E S T I M AT E D T R A D E R A N G E | LO W

878 sq. ft.

RETURN ON EQUITY ANALYSIS

PROPOSED VALUE

E S T I M AT E D T R A D E R A N G E | M I D

878 SF

347,520 sq. ft.

AVERAGE UNIT SIZE

E S T I M AT E D T R A D E R A N G E | H I G H PROPOSED VALUE

396

NET RENTABLE SQUARE FEET

PER UNIT PER SQUARE FOOT

7.82%

8.49%

9.17%

$56,300,000

$54,350,000

$52,525,000

$142,172

$137,247

$132,639

$162.01

$156.39

$151.14

$132,639 $151.14

“THIS IS AN OPINION OF VALUE OR COMPARATIVE MARKET ANALYSIS AND SHOULD NOT BE CONSIDERED AN APPRAISAL. In making any decisions that rely upon our work, you should know that we have not followed the guidelines for development of an appraisal or analysis contained in the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation.”

$1.33

*This valuation analysis does not take into account any deferred maintenance; a buyer will likely deduct from their valuation a capital budget deemed necessary to cure any deferred maintenance items at the property

MARKET RENT PSF

Va l u a t i o n 17


UNIT MIX U N IT DE S CR IP T ION

Va l u a t i o n

UN IT SIZ E

MARK ET RENT PER U N I T

PR I C E PER S QUAR E F OOT

96

676 sq. ft.

$913

$1.35

1 Bed / 1.0 Bath

72

746 sq. ft.

$1,025

$1.37

1 Bed / 1.0 Bath

48

800 sq. ft.

$1,048

$1.31

1 Bed / 1.0 Bath

12

850 sq. ft.

$1,308

$1.54

1 Bed / 1.0 Bath

72

958 sq. ft.

$1,210

$1.26

2 Bed / 2.0 Bath

48

1,060 sq. ft.

$1,425

$1.34

2 Bed / 2.0 Bath

24

1,166 sq. ft.

$1,615

$1.38

3 Bed / 2.0 Bath

24

1,353 sq. ft.

$1,639

$1.21

396

878 sq. ft.

$1,164

$1.33

TOTALS/AVERAGES

18

UN IT COUN T

1 Bed / 1.0 Bath


VALUATION BASED ON INVESTOR PROFORMA C A P R AT E S E NS IT IV IT Y A NA LYS IS (S H ADED COLUMN B ELOW IN DICATED PROB AB LE IN VESTOR VALUATION ) CAP RATE ACTUAL CAP RATE VALUE PER UNIT PER SQUARE FOOT CASH ON CASH- INTEREST ONLY CASH ON CASH- AMORTIZING LOAN TO VALUE LOAN PRINCIPAL DSCR (AMORTIZING)

4.50% 4.30% $58,400,000 $147,475 $168.05 7.15% 1.88% 75% $43,800,000 1.12

4.75% 4.54% $56,300,000 $142,172 $162.01 7.82% 2.56% 75% $42,225,000 1.16

5.00% 4.78% $54,350,000 $137,247 $156.39 8.49% 3.23% 75% $40,762,500 1.20

5.25% 5.03% $52,525,000 $132,639 $151.14 9.17% 3.90% 75% $39,393,750 1.24

B A S E D O N P R O B A B L E I N V E S TO R V A L U AT I O N ALL CASH IRR LEVERAGED IRR

7.74% 16.41%

PROPOSED DEBT CAPITAL STRUCTURE C A P ITA L S T R UCT UR E -INV E S TOR UNDERW RITIN G | N EW LOAN PRINCIPAL BALANCE LOAN-TO-VALUE RATIO LOAN FEE EQUITY REQUIRED DEBT COVERAGE RATIO (I/O)

$40,762,500 75% 1.00% $13,995,125 1.78

INITIAL CASH-ON-CASH (LEVERED) 7-YEAR LEVERAGED IRR INTEREST RATE AMORTIZATION PERIOD

8.49% 16.41% 3.75% 30 years

New Loan based on 3.75% fixed interest rate, 7-year Agency debt with 36 months Interest Only.

Va l u a t i o n 19


CASH FLOW ANALYSIS INCOME

Scheduled Market Rent (SMR)1 Loss to Lease GROSS POTENTIAL RENT (GPR) Vacancy 2 Concessions Model Units Bad Debt NET RENTAL INCOME Economic Occupancy % Increase over T-12 Effective Rent/SF (GPR - Concession Loss) RUBS Garage Carport Cable Trash Other Income EFFECTIVE GROSS INCOME % Increase over T-12 OPERATING EXPENSES

Apt Prep/Turnover Payroll Administrative Marketing & Promotions Repairs & Maintenance Contracts Utilities TOTAL CONTROLLABLE EXPENSES Management Fee Insurance Property Taxes 3 Gross Receipts Tax 4 TOTAL OPERATING EXPENSES NET OPERATING INCOME Expense Ratio (% of EGI) Replacement Reserve NET CASH FLOW AFTER CAPITAL % Increase over T-12 DEBT SERVICE CASH FLOW AFTER DEBT SERVICE

12-MONTH TRAILING THRU SEP-14

$5,313,540 $(299,450) $5,014,090 $(204,288) $(47,514) $(26,507) $(7,347) $4,728,434 94.30% 0.00% $1.19 $147,686 $52,655 $23,192 $33,892 $22,716 $146,929 $5,155,504 12-MONTH TRAILING THRU SEP-14

$116,365 $407,282 $92,442 $55,849 $70,443 $93,618 $306,714 $1,142,713 $154,666 $120,702 $981,905 $29,644 $2,429,631 $2,725,873 47.13% $99,000 $2,626,873

%/PER UNIT/ PER YEAR

5.64% 4.07% 0.95% 0.53% 0.15% $394,036

$12,307 $4,388 $1,933 $2,824 $1,893 $12,244 $429,625

$/UNIT

$294 $1,028 $233 $141 $178 $236 $775 $2,886 3.00% $305 $2,480 0.575% $6,135 $6,884 $250 $6,634

6-MONTH TRAILING THRU SEP-14

$5,509,008 $(416,254) $5,092,754 $(180,368) $(52,890) $(27,502) $(7,684) $4,824,310 94.73% 2.03% $1.21 $153,168 $52,084 $23,816 $34,086 $22,746 $137,966 $5,248,176 12-MONTH TRAILING THRU SEP-14

$116,365 $407,282 $92,442 $55,849 $70,443 $93,618 $306,714 $1,142,713 $154,666 $120,702 $981,905 $29,644 $2,429,631 $2,818,545 46.29% $99,000 $2,719,545

%/PER UNIT/ PER YEAR

7.56% 3.54% 1.04% 0.54% 0.15% $402,026

$12,764 $4,340 $1,985 $2,841 $1,896 $11,497 $437,348

$/UNIT

$294 $1,028 $233 $141 $178 $236 $775 $2,886 2.95% $305 $2,480 0.565% $6,135 $7,118 $250 $6,868

3-MONTH TRAILING THRU SEP-14

$5,660,988 $(496,524) $5,164,464 $(187,996) $(53,260) $(28,104) $(3,020) $4,892,084 94.73% 3.46% $1.23 $153,156 $52,128 $24,244 $33,616 $23,216 $151,424 $5,329,868 12-MONTH TRAILING THRU SEP-14

$116,365 $407,282 $92,442 $55,849 $70,443 $93,618 $306,714 $1,142,713 $154,666 $120,702 $981,905 $29,644 $2,429,631 $2,900,237 45.59% $99,000 $2,801,237

%/PER UNIT/ PER YEAR

8.77% 3.64% 1.03% 0.54% 0.06% $407,674

$12,763 $4,344 $2,020 $2,801 $1,935 $12,619 $444,156

$/UNIT

$294 $1,028 $233 $141 $178 $236 $775 $2,886 2.90% $305 $2,480 0.556% $6,135 $7,324 $250 $7,074

1-MONTH TRAILING THRU SEP-14

$5,622,396 $(404,688) $5,217,708 $(178,872) $(51,864) $(28,392) $(4,944) $4,953,636 94.94% 4.76% $1.24 $155,184 $52,620 $24,564 $32,724 $22,944 $125,328 $5,367,000 12-MONTH TRAILING THRU SEP-14

$116,365 $407,282 $92,442 $55,849 $70,443 $93,618 $306,714 $1,142,713 $154,666 $120,702 $981,905 $29,644 $2,429,631 $2,937,369 45.27% $99,000 $2,838,369

Proforma Scheduled Market Rent is based on current market rates at $1.33/SF increased by 2.0%. The Oct-2014 West Memorial / Briar Forest submarket annual rent growth was 13.7%. Proforma Vacancy of 5.0% has been assumed. The Oct-2014 West Memorial / Briar Forest submarket vacancy was 11.9% due to properties in lease up. Property Taxes are based on the HCAD 2014 Property Tax Value of $38,196,775 and millage rate of 2.57065. Proforma taxes are based on 85% of purchase price. 4 Gross Receipts Tax is based on 0.575% of EGI. 1 2

Va l u a t i o n

3

20

%/PER UNIT/ PER YEAR

7.20% 3.43% 0.99% 0.54% 0.09% $412,803

$12,932 $4,385 $2,047 $2,727 $1,912 $10,444 $447,250

$/UNIT

$294 $1,028 $233 $141 $178 $236 $775 $2,886 2.88% $305 $2,480 0.552% $6,135 $7,418 $250 $7,168

YEAR 1 INVESTOR PROFORMA

$5,643,196 $(282,160) $5,361,036 $(268,052) $(53,610) $(26,805) $(13,403) $4,999,166 93.25% 5.73% $1.27 $157,751 $53,692 $24,971 $34,624 $23,912 $155,967 $5,450,084 5.71% YEAR 1 INVESTOR PROFORMA

$118,800 $396,000 $89,100 $55,440 $71,280 $99,000 $306,900 $1,136,520 $149,877 $128,700 $1,187,576 $31,338 $2,634,011 $2,816,072 48.33% $99,000 $2,717,072 3.43% (1,528,594) $1,188,478

%/PER UNIT/ PER YEAR

5.00% 5.00% 1.00% 0.50% 0.25% $416,597

$13,146 $4,474 $2,081 $2,885 $1,993 $12,997 $454,174

$/UNIT

$300 $1,000 $225 $140 $180 $250 $775 $2,870 2.75% $325 $2,999 0.575% $6,652 $7,111 $250 $6,861


Va l u a t i o n 21


INCOME ANALYSIS Scheduled Rent Loss to Lease GPR Vacancy Concessions Model Units Bad Debt NET RENTAL INCOME RUBS Garage Carport Cable Trash Other Income TOTAL OTHER INCOME EFFECTIVE GROSS INCOME Market Rent per SF Vacancy (%) Net Effective Rent Net Eff Rent per SF NER Growth

OCT-13

NOV-13

DEC-13

JAN-14

FEB-14

MAR-14

APR-14

MAY-14

JUN-14

JUL-14

AUG-14

SEP-14

YEAR 1 - INV

$426,966 -$16,787 $410,179 -$16,480 -$3,565 -$2,126 $241 $388,249 $10,354 $4,585 $1,948 $0 $1,916 $10,432 $29,235 $417,484 $1.23 4.02% $406,614 $1.17 0.00%

$426,414 -$15,738 $410,676 -$21,345 -$3,794 -$2,126 -$955 $382,456 $10,656 $4,413 $1,890 $2,860 $1,916 $14,953 $36,688 $419,144 $1.23 5.20% $406,882 $1.17 0.07%

$426,414 -$14,729 $411,685 -$23,513 -$3,012 $0 -$1,162 $383,998 $12,016 $4,332 $1,785 $2,930 $1,858 $12,469 $35,390 $419,388 $1.23 5.71% $408,673 $1.18 0.51%

$426,414 -$15,477 $410,937 -$16,843 -$3,776 -$2,126 -$904 $387,288 $14,847 $4,321 $1,779 $2,817 $1,882 $16,563 $42,209 $429,497 $1.23 4.10% $407,161 $1.17 0.13%

$426,414 -$15,236 $411,178 -$16,865 -$2,896 -$2,126 -$10 $389,281 $12,533 $4,418 $1,906 $5,554 $1,887 $10,399 $36,697 $425,978 $1.23 4.10% $408,282 $1.17 0.41%

$426,414 -$13,356 $413,058 -$19,058 -$4,026 -$2,126 -$715 $387,133 $10,696 $4,544 $1,976 $2,688 $1,884 $13,130 $34,918 $422,051 $1.23 4.61% $409,032 $1.18 0.59%

$426,414 -$11,813 $414,601 -$13,438 -$3,804 -$2,126 -$1,699 $393,534 $11,735 $4,292 $1,894 $2,886 $1,895 $10,219 $32,921 $426,455 $1.23 3.24% $410,797 $1.18 1.03%

$426,414 -$9,981 $416,433 -$14,101 -$4,648 -$2,126 -$75 $395,483 $13,584 $4,366 $1,948 $2,858 $1,772 $10,389 $34,917 $430,400 $1.23 3.39% $411,785 $1.18 1.27%

$486,429 -$62,202 $424,227 -$15,646 -$4,678 -$2,473 -$1,313 $400,117 $12,976 $4,352 $2,005 $2,895 $1,902 $10,519 $34,649 $434,766 $1.40 3.69% $419,549 $1.21 3.18%

$476,441 -$49,369 $427,072 -$19,755 -$4,003 -$2,311 -$1,678 $399,325 $12,879 $4,223 $1,958 $2,927 $1,873 $13,284 $37,144 $436,469 $1.37 4.63% $423,069 $1.22 4.05%

$470,273 -$41,038 $429,235 -$12,338 -$4,990 -$2,349 $1,335 $410,893 $12,478 $4,424 $2,056 $2,750 $2,019 $14,128 $37,855 $448,748 $1.35 2.87% $424,245 $1.22 4.34%

$468,533 -$33,724 $434,809 -$14,906 -$4,322 -$2,366 -$412 $412,803 $12,932 $4,385 $2,047 $2,727 $1,912 $10,444 $34,447 $447,250 $1.35 3.43% $430,487 $1.24 5.87%

$470,266 -$23,513 $446,753 -$22,338 -$4,468 -$2,234 -$1,117 $416,597 $13,146 $4,474 $2,081 $2,885 $1,993 $12,997 $37,576 $454,174 $1.35 5.00% $442,285 $1.27 2.74%

$450,000

$1.30

$440,000

$1.28

$430,000

$1.26

$420,000

$1.24

$410,000

$1.22

$400,000

$1.20

$390,000

$1.18

$380,000

$1.16

$370,000

$1.14

$360,000

$1.12 $1.10

$350,000 Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

Va l u a t i o n

Net Rental Income

22

Apr-14

May-14

Net Effective Rent

Jun-14 Net Eff Rent per SF

Jul-14

Aug-14

Sep-14

Year 1 - Inv


INVESTOR CASH FLOW FORECAST YEAR 3

YEAR 4

YEAR 5

YEAR 6

YEAR 7

YEAR 9

YEAR 10

$14,250

5,643,196

YEAR 1

5,868,924

6,103,680

6,317,309

6,538,415

6,767,260

7,004,114

7,249,258

7,502,982

7,765,586

$(713)

(282,160)

(293,446)

(305,184)

(315,865)

(326,921)

(338,363)

(350,206)

(362,463)

(375,149)

(388,279)

$13,538

5,361,036

5,575,477

5,798,496

6,001,444

6,211,494

6,428,897

6,653,908

6,886,795

7,127,833

7,377,307

Vacancy

$(677)

(268,052)

(278,774)

(289,925)

(300,072)

(310,575)

(321,445)

(332,695)

(344,340)

(356,392)

(368,865)

Concessions

$(135)

(53,610)

-

-

-

-

-

-

-

-

-

Model Units

$(68)

(26,805)

(27,877)

(28,992)

(30,007)

(31,057)

(32,144)

(33,270)

(34,434)

(35,639)

(36,887)

Scheduled Market Rent (SMR) Loss to Lease GROSS POTENTIAL RENT (GPR)

Bad Debt NET RENTAL INCOME % Increase over previous year

YEAR 2

YEAR 8

$(34)

(13,403)

(13,939)

(14,496)

(15,004)

(15,529)

(16,072)

(16,635)

(17,217)

(17,820)

(18,443)

$12,624

4,999,166

5,254,887

5,465,083

5,656,361

5,854,333

6,059,235

6,271,308

6,490,804

6,717,982

6,953,112

-

-

5.12%

4.00%

3.50%

3.50%

3.50%

3.50%

3.50%

3.50%

3.50%

RUBS

$398

157,751

162,483

167,358

172,378

177,550

182,876

188,363

194,013

199,834

205,829

Garage

$136

53,692

55,303

56,962

58,671

60,431

62,244

64,111

66,034

68,015

70,056

Carport

$63

24,971

25,720

26,492

27,287

28,105

28,949

29,817

30,712

31,633

32,582

Cable

$87

34,624

35,663

36,733

37,835

38,970

40,139

41,343

42,584

43,861

45,177

Trash

$60

23,912

24,630

25,369

26,130

26,914

27,721

28,553

29,409

30,292

31,200

$394

155,967

160,646

165,465

170,429

175,542

180,808

186,232

191,819

197,574

203,501

$13,763

5,450,084

5,719,332

5,943,461

6,149,091

6,361,845

6,581,972

6,809,727

7,045,376

7,289,191

7,541,457

4.94%

3.92%

3.46%

3.46%

3.46%

3.46%

3.46%

3.46%

3.46%

Other Income EFFECTIVE GROSS INCOME % Increase over previous year OPERATING EXPENSES Apt Prep/Turnover

$300

118,800

121,770

124,814

127,935

131,133

134,411

137,772

141,216

144,746

148,365

$1,000

396,000

405,900

416,048

426,449

437,110

448,038

459,239

470,720

482,488

494,550

Administrative

$225

89,100

91,328

93,611

95,951

98,350

100,808

103,329

105,912

108,560

111,274

Marketing & Promotions

$140

55,440

56,826

58,247

59,703

61,195

62,725

64,293

65,901

67,548

69,237

Repairs & Maintenance

$180

71,280

73,062

74,889

76,761

78,680

80,647

82,663

84,730

86,848

89,019

Contracts

$250

99,000

101,475

104,012

106,612

109,277

112,009

114,810

117,680

120,622

123,637

Utilities

$775

306,900

314,573

322,437

330,498

338,760

347,229

355,910

364,808

373,928

383,276

Management Fee

$378

149,877

157,282

163,445

169,100

174,951

181,004

187,268

193,748

200,453

207,390

Insurance

$325

128,700

131,918

135,215

138,596

142,061

145,612

149,253

152,984

156,808

160,729

$2,999

1,187,576

1,223,203

1,259,899

1,297,696

1,336,627

1,376,726

1,418,028

1,460,569

1,504,386

1,549,517

$79

31,338

32,886

34,175

35,357

36,581

37,846

39,156

40,511

41,913

43,363

$6,652

2,634,011

2,710,222

2,786,791

2,864,657

2,944,725

3,027,057

3,111,719

3,198,776

3,288,299

3,380,357

$250

99,000

101,475

104,012

106,612

109,277

112,009

114,810

117,680

120,622

123,637

TOTAL OPERATING EXPENSES

$6,902

2,733,011

2,811,697

2,890,803

2,971,269

3,054,002

3,139,066

3,226,528

3,316,456

3,408,921

3,503,995

NET OPERATING INCOME

$6,861

2,717,072

2,907,636

3,052,658

3,177,821

3,307,843

3,442,906

3,583,199

3,728,919

3,880,270

4,037,462

7.01%

4.99%

4.10%

4.09%

4.08%

4.07%

4.07%

4.06%

4.05%

Payroll

Property Taxes Gross Receipts Tax OPERATING EXPENSES BEFORE RESERVES Capital Reserves

% Increase over previous year DEBT SERVICE

1,528,594

1,528,594

1,528,594

2,265,330

2,265,330

2,265,330

2,265,330

2,265,330

2,265,330

2,265,330

3,001

1,188,478

1,379,042

1,524,064

912,491

1,042,513

1,177,576

1,317,869

1,463,590

1,614,940

1,772,132

Va l u a t i o n

CASH FLOW

-

23


ACQUISITION/RESIDUAL Purchase Price

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

YEAR 6

Capital Improvements

YEAR 8

YEAR 9

YEAR 10

-

Residual

64,850,773

Cost of Sale @ 1.50% CASH FLOW BEFORE DEBT

YEAR 7

(54,350,000) ALL CASH IRR 7.74%

(972,762) (54,350,000)

2,717,072

2,907,636

3,052,658

3,177,821

3,307,843

3,442,906

67,461,210

DEBT FINANCING New Loan Amount

40,762,500

Debt Service - New Loan Principal

-

-

-

(749,532)

(778,127)

(807,814)

(38,427,027)

(1,528,594)

(1,528,594)

(1,528,594)

(1,515,798)

(1,487,203)

(1,457,516)

(1,426,697)

40,354,875

(1,528,594)

(1,528,594)

(1,528,594)

(2,265,330)

(2,265,330)

(2,265,330)

(39,853,724)

(13,995,125)

1,188,478

1,379,042

1,524,064

912,491

1,042,513

1,177,576

27,607,486

Debt Service - New Loan Interest New Loan Fee @ 1.00%

(407,625)

Misc. Fees TOTAL DEBT SERVICE CASH FLOW AFTER DEBT

CASH FLOW FORECAST ASSUMPTIONS

YEAR 1

LEVERAGED IRR 16.41%

YEAR 2

YEAR 3

YEAR 4

YEAR 5

YEAR 6

YEAR 7

YEAR 8

YEAR 9

YEAR 10

Market Rent Growth

2.00%

5,643,196

4.00%

4.00%

3.50%

3.50%

3.50%

3.50%

3.50%

3.50%

3.50%

Loss to Lease

5.00%

(282,160)

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

Vacancy Loss

5.00%

(268,052)

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

Concessions

1.00%

(53,610)

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

Model Units

0.50%

(26,805)

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

Bad Debt

0.25%

(13,403)

0.25%

0.25%

0.25%

0.25%

0.25%

0.25%

0.25%

0.25%

0.25%

YEAR 8

YEAR 10

YEAR 11

RESALE INFORMATION Projected NOI in Year 8 Residual Capitalization Rate Gross Sales Proceeds PRO-FORMA RETURNS/DSC RATIOS

$3,728,919 5.75% $64,850,773 YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

YEAR 6

YEAR 7

Cap Rate

5.00%

5.35%

5.62%

5.85%

6.09%

6.33%

6.59%

6.86%

7.14%

7.43%

Leverage Cash on Cash Return

8.49%

9.85%

10.89%

6.52%

7.45%

8.41%

9.42%

10.46%

11.54%

12.66%

1.78x

1.9x

2.x

1.4x

1.46x

1.52x

1.65x

1.71x

1.78x

Leveraged IRR

Va l u a t i o n

DEBT SERVICE COVERAGE RATIO

24

16.41% 1.58x


Va l u a t i o n 25


SALES COMPARABLES P R OP E R T Y

YEAR B UILT

# OF UN ITS

MARQUIS ON BRIAR FOREST

2004

1

DISTRICT AT WESTBOROUGH

2 3 4 5

SALES PRICE

PRICE PER UN IT

396

N/A

N/A

878

N/A

2014

340

$49,300,000

$145,000

1040

$139.42

Oct-14

MARQUIS AT CINCO RANCH

2011

180

$22,860,000

$127,000

1028

$123.52

Jul-14

MARQUETTE PINEY POINT

2003

318

$44,015,000

$138,412

1077

$128.48

Feb-14

1992

228

$33,000,000

$144,737

942

$153.63

Dec-13

2013

206

$28,264,300

$137,205

997

$137.65

Aug-13

1,272

$37,908,817

$139,496

1,023

$136.36

GRAND ON MEMORIAL, THE

(FORMERLY PROMENADE ON MEMORIAL) WATERSTONE AT CINCO RANCH

Va l u a t i o n

TOTALS/WEIGHTED AVERAGES

26

AVE R AG E UN I T S I ZE

PR I C E PS F

S AL E DAT E

N/A


SALES COMPARABLES

1

4

3

MARQUIS ON BRIAR FOREST

2 5

Va l u a t i o n 27


Va l u a t i o n

RENT COMPARABLES

28

P R OP E R T Y

YEAR B UILT

# OF UN ITS

% OCCUPIED

AVG UN IT SIZ E

AVG MKT REN T/UN I T

AVG MKT R EN T / S F

AVG EF F R EN T / U N I T

AVG EF F R EN T / S F

MARQUIS ON BRIAR FOREST

2004

396

95%

878

$1,164

$1.33

$1,089

$1.24

1998/ 1999

668

92%

884

$1,123

$1.27

$1,123

$1.27

1

AMLI ON ELDRIDGE PARKWAY

2

CHANDLER PARK

1998

432

88%

948

$1,210

$1.28

$1,109

$1.17

3

SAN BRISAS

2003

312

96%

1,483

$2,170

$1.46

$2,170

$1.46

4

SAN MONTEGO

1998

314

94%

1,245

$1,707

$1.37

$1,707

$1.37

5

VILLAGES OF BRIAR FOREST, THE

1999

240

95%

948

$1,219

$1.29

$1,200

$1.27

6

VILLAGE ON THE PARKWAY

1994

352

88%

944

$1,108

$1.17

$1,108

$1.17

7

THE GRAND ON MEMORIAL

1992

228

85%

942

$1,445

$1.53

$1,439

$1.53

8

WEST END

1999

192

95%

911

$1,180

$1.30

$1,180

$1.30

TOTA L /AV G. L E S S S UBJECT

2,738

92%

1,024

$1,360

$1.33

$1,342

$1.31

TOTA L /AV G.

3,134

92%

1,005

$1,336

$1.33

$1,310

$1.30


RENT COMPARABLES 7

6 1

5

4

2 MARQUIS ON BRIAR FOREST

3 Va l u a t i o n

8

29


$1,072

AVERAGE EFFECTIVE RENT

ONE BEDROOM | RENT-PER-UNIT EFFECTIVE RENT ANALYSIS

$1,600 $1,400

$1,461

$1,000 $963 REN T PER UN IT

$1,341

$1,321

$1,200

$1,032

$1,257

$994

AVERAGE EFFECTIVE RENT

$990 $888

$800 $600 $400 $200 $-

Va l u a t i o n

Marquis on Briar Forest

30

AMLI On Eldridge Parkway

Chandler Park

San Brisas

San Montego Villages Of Briar Village on the Forest, The Parkway

The Grand on Memorial

West End


ONE BEDROOM RENT COMPARABLES P R O P E R T Y NA ME

# OF UN ITS

AVERAG E UN IT SIZ E

AVERAG E EF F R EN T

AVER AG E EF F R EN T PS F

MARQUIS ON BRIAR FOREST

300

787

$963

$1.22

AMLI ON ELDRIDGE PARKWAY

408

732

$1,032

$1.41

CHANDLER PARK

248

807

$994

$1.23

SAN BRISAS

62

905

$1,461

$1.61

SAN MONTEGO

77

892

$1,321

$1.48

VILLAGES OF BRIAR FOREST, THE

80

766

$888

$1.16

VILLAGE ON THE PARKWAY

208

778

$990

$1.27

THE GRAND ON MEMORIAL

144

839

$1,341

$1.60

96

1051

$1,257

$1.20

1,623

804

$1,072

$1.33

WEST END TOTALS AND AVERAGES

Va l u a t i o n 31


$1,465

AVERAGE EFFECTIVE RENT

TWO BEDROOM | RENT-PER-UNIT EFFECTIVE RENT ANALYSIS

$2,500

$2,000

$2,028

REN T PER UN IT

$1,827 $1,500

AVERAGE EFFECTIVE RENT

$1,606 $1,367

$1,000

$1,289

$1,239

AMLI On Eldridge Parkway

Chandler Park

$1,313

$1,229

$1,257

$500

$-

Va l u a t i o n

Marquis on Briar Forest

32

San Brisas

San Montego

Villages Of Briar Forest, The

Village on the The Grand on Parkway Memorial

West End


TWO BEDROOM RENT COMPARABLES P R O P E R T Y NA ME

# OF UN ITS

AVERAG E UN IT SIZ E

AVERAG E EF F R EN T

AVER AG E EF F R EN T PS F

MARQUIS ON BRIAR FOREST

72

1,095

$1,367

$1.25

AMLI ON ELDRIDGE PARKWAY

232

1,082

$1,289

$1.19

CHANDLER PARK

152

1,114

$1,239

$1.11

SAN BRISAS

148

1,394

$2,028

$1.45

SAN MONTEGO

157

1,243

$1,827

$1.47

VILLAGES OF BRIAR FOREST, THE

144

1,014

$1,313

$1.29

VILLAGE ON THE PARKWAY

120

1,142

$1,229

$1.08

THE GRAND ON MEMORIAL

84

1,119

$1,606

$1.44

WEST END

96

1,051

$1,257

$1.20

1,205

1,144

$1,465

$1.27

TOTALS AND AVERAGES

Va l u a t i o n 33


$2,036

AVERAGE EFFECTIVE RENT

THREE BEDROOM | RENT-PER-UNIT EFFECTIVE RENT ANALYSIS

3 BR Average: $2,036

$3,000 $2,805

REN T PER UN IT

$2,500

AVERAGE EFFECTIVE RENT

$2,000 $1,845 $1,500

$1,506

$1,581

$1,744 $1,530

$1,381

$1,000 $500 $-

Va l u a t i o n

Marquis on Briar AMLI On Eldridge Forest Parkway

34

Chandler Park

San Brisas

San Montego

Villages Of Briar Forest, The

Village on the Parkway


THREE BEDROOM RENT COMPARABLES P R O P E R T Y NA ME

# OF UN ITS

AVERAG E UN IT SIZ E

AVERAG E EF F R EN T

AVER AG E EF F R EN T PS F

MARQUIS ON BRIAR FOREST

24

1,353

$1,506

$1.11

AMLI ON ELDRIDGE PARKWAY

28

1,455

$1,581

$1.09

CHANDLER PARK

32

1,254

$1,381

$1.10

102

1,964

$2,805

$1.43

SAN MONTEGO

80

1,589

$1,845

$1.16

VILLAGES OF BRIAR FOREST, THE

16

1,256

$1,744

$1.39

VILLAGE ON THE PARKWAY

24

1,402

$1,530

$1.09

306

1,616

$2,036

$1.24

SAN BRISAS

TOTALS AND AVERAGES

Va l u a t i o n 35


MARQUIS ON BRIAR FOREST


04

Market Overview


HOUSTON OVERVIEW Located on the coastal prairies of southeast Texas, Houston is home to a diverse set of industries and cultures. The Houston-Sugar Land-Baytown Metropolitan Statistical Area (MSA) covers more than 10,000 square miles (an area larger than the entire states of Massachusetts, New Hampshire, New Jersey, and Vermont) and consists of ten counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto and Waller. The Houston MSAâ&#x20AC;&#x2122;s Gross Area Product (GAP) was estimated to be $580.5 billion in 2014, larger than the GDP for Belgium, Argentina or Sweden. If Houston were an independent nation, it would rank as the worldâ&#x20AC;&#x2122;s 22nd largest economy. The Houston MSA recorded more than 2.9 million payroll jobs in 2014, more jobs than the employment counts of 33 U.S. states. The 10-county metropolitan area ranks as the number one place to live in the country according to Kiplinger Personal Finance. With a population exceeding 2.2 million (2010 census), the City of Houston is the fourth largest city in the U.S., while the greater Houston metropolitan area ranks sixth in the nation with a population of 5.8 million. This population base includes a wide variety of racial and ethnic groups that give Houston a rich diversity and cosmopolitan feel. The Houston Region is one of the youngest, fastestgrowing and diverse populations anywhere. Houston is home to a thriving business economy that has rapidly diversified from its strong energy base. This economic diversification includes growth in high-technology industries, medical research, health care and professional services.

Market Overview

Today, the Houston economy is based on a broad spectrum of industries including:

38


Houstonâ&#x20AC;&#x2122;s infrastructure is also strengthened by three airports, which form the sixth largest airport system in the world, and a massive trucking and rail system that links the southern, south central, midwestern and western U.S. More than 600 trucking firms operate in Houston, and two major rail systems operate 14 mainline tracks radiating from Houston. Houstonâ&#x20AC;&#x2122;s employment base has become increasingly diverse. In 1981, the economic base was dominated by energy-related businesses with nearly 85 percent of all jobs in those sectors. Today nearly half of all jobs are in non-energy fields, such as business services, technology, aerospace, medicine and manufacturing. Houston offers a richly-diverse pool of highly skilled, multilingual, multicultural workers. More than 90 languages are spoken in Houston. Nearly 25 percent of all adults have completed four years of college, surpassing the national average, while the median age is three years younger than the national average. For business and fun, for living and visiting, Houston is one of the dynamic frontiers on the world stage. With its proximity to the Southern Hemisphere and having the infrastructure to accommodate the growing needs of numerous global interests, Houston has become an international destination and one of the worldâ&#x20AC;&#x2122;s great cities.

Market Overview 39


HOUSTON MULTIFAMILY OVERVIEW The Houston multifamily market has shown strong performance throughout 2014 as impressive economic factors, such as robust employment growth, stimulated large revenue increases across the apartment market. As of October 2014, the apartment market in the Houston metro economy has continued to thrive. While the overall number of units proposed and under construction has increased over the last two years, tightened underwriting standards and difficult loan obstacles have become the benchmark in the lending community for multifamily residential development. This trend is expected to continue for the next several years. According to data compiled by Apartment DATA Services (ADS), the following key trends are emerging in the Houston multifamily market: • Over the past 12 months, 20,144 units have been delivered while 14,690 units have been absorbed. • As of October 2014, 24,716 new units were under construction in the greater Houston market. • Absorption rates are as follows:

–– Last 3 Months | 3,769 units –– Last 6 Months | 8,809 units –– Last 12 Months | 16,315 units • Overall occupancy rate growth has normalized in the last 12 months withthe Houston market currently sitting at 91 percent:

–– Last 3 Months | 0.4% –– Last 6 Months | 0.4% –– Last 12 Months | 0.8% Market Overview

• Overall rental rate growth has remained quite strong:

40

–– Last 3 Months | 3.9% –– Last 6 Months | 7.5% –– Last 12 Months | 9.0%


WEST MEMORIAL / BRIAR FOREST OVERVIEW Marquis on Briar Forest is located in the West Memorial / Briar Forest submarket. According to Apartment Data Services (ADS), the West Memorial / Briar Forest submarket consists of 25,487 units in 83 communities. The submarket has an average unit size of 949 square feet with average rents of $1.17 per square foot across all classes with an average occupancy of 88.1%. Over the last 12 months, rental rates have shown a tremendous increase of 13.7%. Class A product accounts for only 27% of the market by number of units with an average rental rate of $1.61 per square foot. According to ADS, the following key trends are emerging in the West Memorial / Briar Forest submarket: • Over the past 12 months, 1,811 units have been delivered while 281 units have been absorbed. • As of October 2014, 3,692 units were under construction in the submarket. • Absorption rates are as follows:

–– Last 3 months | 18 –– Last 6 months | 378 –– Last 12 months | 281 • Overall submarket occupancy is trending negative due to the substantial amount of properties in lease-up.

–– Last 3 months | -3.8% –– Last 6 months | -1.7% –– Last 12 months | -5.4%

–– Last 3 months | -3.5% –– Last 6 months | 4.6% –– Last 12 months | 13.7%

Market Overview

• Rental growth rates have seen a small decrease over the past 3 months, but overall have seen a very large increase over the past 12 months

In summary, the positive economic market factors and the recent multifamily residential success have fueled the optimistic outlook for the apartment market in Houston. As the metro continues to grow and development opportunities stabilize, multifamily residential living will become increasingly valuable for investors, owners, and residents.

41


MARQUIS ON BRIAR FOREST


05

Marketing


MARKETING STRATEGY OVERVIEW Our CBRE team is uniquely qualified to manage the marketing and sales process and has the national, regional and local experience to deliver superior results. We are confident we will provide you with the best representation in the market and achieve the highest value in the most efficient manner. Our execution platform is comprised of top-producing teams within CBRE’s Multifamily group. Additional support and staffing available within the CBRE Capital Markets platform has no equal in the industry. Drawing from experience refined over many successful marketing campaigns, CWS Capital Partners can be confident that the targeted pricing and timeline for the property are met through intense focus on the following items: • Demonstrating how the asset’s inherent strengths and location attributes assure long-term value appreciation • Simplifying the offering with concise, impactful materials to increase investor participation • Elevating Marquis on Briar Forest to compete nationally and differentiate it from primary competitors in the Houston market • Develop underwriting to support aggressive trending of rents and revenue growth • Enhancing the bidder universe with a targeted approach to the most likely buyers with the greatest likelihood of closing Investors will be presented with the opportunity to submit bids during the marketing period. The objective during the marketing period is to drive competition. Marquis on Briar Forest will attract buyers such as:

POTENTIAL BUYERS H IG H NE T WOR T H INDIV IDUA L S

PEN SION FUN DS/IN STITUTION AL

REITS

F OR EI G N C API TAL

Tremont, LLC

Bentall Kennedy

AMLI

Suntone

Unilev

GID

Post

Starlight

The Connell Family

Clarion

Camden

Elad

Gaines Family Trust

American Realty Advisors

AEC

Brookfield

Francis Management

JP Morgan

Mid America

Belkorp

Connor Group

Met Life

The Duncan Family

Sentinel

Marketing

Goldman Sachs

44

Sumitomo Realty


In today’s unstable capital markets environment, marketing strategies must be creatively designed and thoroughly implemented with maximum efficiency in the most concise time frame. The CBRE Multifamily group’s marketing strategy is designed to take maximum advantage of Midtown and the surrounding neighborhoods’ outstanding supporting demographics and strong projected future growth. Success will be attained by utilizing the highest quality marketing materials and technology available to provide highly targeted exposure to the investment community, commanded by the world’s leading brokerage, advisory and capital markets firm available in the market today. The CBRE Multifamily group has developed the following marketing strategy to best position the property for market review with the focus directly on maximizing pricing and early investor participation.

1 We underwrote to $1.27 per square foot for Marquis on Briar Forest on a net effective rent basis. It will be important that your latest leasing trend is reflective of this.

2

3

Test lease-file audit of existing residents in anticipation of lender/investor review and to understand the resident profile.

4

Provide traffic statistics from the initial opening of Marquis on Briar Forest.

• The demographic will be important for investors to get comfortable as we need to demonstrate that the existing tenant base can afford to pay more as rents continue to grow.

Develop comprehensive report to easily translate leasing momentum to potential buyers. • Have management develop a format to demonstrate the recent increases from the previous effective rents to the new effective rents for renewals and new leases

P R E PA R AT I O N DISTRIBUTION

5 Engage carefully orchestrated marketing process through five-step high intensity sales process as outlined in the following marketing timeline.

CLOSING TOURS

OFFERS DUE

BUYER SELECTION

CONTRACT/DUE DILIGENCE

Marketing

DURING THIS DISPOSITION, CBRE HOUSTON WILL BECOME A PARTNER WITH CWS CAPITAL PARTNERS OUR TEAM WILL BE 100% DEDICATED TO YOUR ASSIGNMENT FROM PREPARATION TO CLOSING.

45


OBJECTIVES The following are the key issues the team will focus on during the marketing process of Marquis on Briar Forest: • The design and implementation of a creative and unique marketing campaign • Preparation of detailed and accurate marketing materials to enhance the story • Comprehensive and up-to-date analysis of the multifamily market based on CBRE’s market experience • The selection and targeting of pre-qualified international, national, regional and local investors most likely interested in purchasing the asset • Fostering a sense of urgency and competition among prospective bidders • Maximizing pricing within the most effective transition time frame

THE CBRE MARKETING PROCESS WILL CONSIST OF FIVE MAIN COMPONENTS • Preparation of Marketing Materials | High quality materials will be created for the marketing brochure, offering memorandum and property website. The offering memorandum will consist of investment highlights, property photographs, maps and aerial photography, rental comparables, and a comprehensive market overview.

2 Page 1 of

Lake t On The

TX Houston,

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San Antonio Three

• Distribution Process | The marketing process starts with distribution to a targeted list of international, national, regional and local investors through CampaignLogic, personal phone calls and e-mail, property web link and direct mail. The top 50 buyers will be targeted and aggressively pursued. As the likely investors are identified, each will be contacted by Ryan Epstein, presented the comprehensive offering materials, and invited to a highly orchestrated property and market tour. • Offer Date | The offer date will be announced to the investor database in the initial e-mail launch. A reminder of the offer date is included in the buyer update that is emailed weekly to all investors who have received the property materials. On the bid date, our team will provide you a spreadsheet summarizing all offers and terms and estimated cap rates of each. • Buyer Selection | After all offers are collected and reviewed, we recommend holding a Best and Final offer process to allow each party to improve their terms and/or pricing. Once all Best and Final offers are received, we will conduct interviews with the top groups/offers.

Marketing

• Contract/Due Diligence | Typical contract provides 30 day due diligence and 30 day closing.

46

RY, :: LUXU

Asset Portfolio Buyer

Update: 4-20-12

Page 1 of 2

San Antonio Thr ee Asset Multi-Family Por tfolio

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The OFFER DEAD LINE is May 1, 2012

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Road an institu : San Antonio, TX Lake is 1,000 LIGHTS ort on the more than t of ENT HIGH : Newp that average complemen e INVESTM Front Asset units res a full e garag "A" Lake rty featu with luxury ing privat maple Luxury Class iendly asset 2008, the prope res includ ertops, ecofr leted in home featu granite count quality, feet. Comp and custom lake, square 15-acre amenities s to a . resort-like e acces and more ng privat parking, ceramic tile floori on cabinetry, Newport s tate 10, rty boast of Inters The prope re lake.  mile north one-half location.  e 15-ac  Located drive-by a privat ct that is Location:  a heavy frontage along hase proje Superior benefits from a two-p of water n Park; acres. the Lake ely 1,000 feet is Culle ing 9,000 the Lake approximat Newport on parks cover :: 704 UNITS to st urban in AVAILABLE ON Adjacent icas large submarkets to AN INDIVIDUAL Amer ng of s one t growi OR PORTFOLIO acces of the fastes BASIS convenient Interstate to ed in one des quick and s for proximity Thank you rs:  Situat , afford your interest Lake provi   The property's nt Drive Road -family Employme Newport on the rs.  This area. communities locatedin the 704-unit San Antonio Portfolio Westheimer t cente yers in the Beltway and ymen in north San Antonio, , comprise Houston, potential 8 e emplo s most desirable ofAntonio’ rate emplo Texas. The propertie d of three garden-style, multi supply st incom submarkets, near large corpoay 6, the Loop the Texas s are located in city's highees a continual north of shopping venues, as well major regional three of San 10, Highw access to the and nationally recogniz as outstanding uses. one mile hub ensur d camp t nient educational and locate conve Hospital recreational opportun ed employers, retail employmen is also nt, Houston significant The Property ities. developme nt odist West h and perce growt 47 residents. Hospital and Meth than by new and an unded icsOFFERI Children's se of more graph The ics: Surro lation increa demo arket.  NG MEMORANDUM anding Demograph ic popu given and other financial s. Outst of this subm access, please Excellent been a dynam s are contact Roselle -mile radiuto the desirability there has , within a three Franklin at 713-787 available electronically. If you contribute have not been 2000 -1938 system or roselle.franklin@ l since PROPERTY TOURS y schoo cbre.com. are being schedule exemploar e do not Hammar d upon request. (darcy.hammar@ . Pleas To schedule a tour, cbre.com). our officeCBRE through please contact with a Darcy We have updated scheduled intment must be an appo financials that have rty tours ut scheduling been uploaded All prope to the Document site witho Audubon: Center: visit the tive. 12 Months Trailing senta repre March

2012 Countryside: March Rent Roll 12 Months Trailing March 2012 Willows: March Rent Roll 12 Months Trailing March 2012 March Rent Roll Thank you for your excellent investme interest in these 0/2013 commun ities. We look forward nt opportunity1/3 in San Antonio, to working with you Texas. on this To access the online document center, click on the link below. View Document Center

Ryan Epstein 713.787.1977 Ryan.Epstein@c bre.com

http://cbreemail.com/

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1/30/2013


CLIENT REPORTING CBRE will utilize a comprehensive suite of multi-media reports and tools to fully engage CWS Capital Partners throughout the marketing process. Key software and web-based components are completely integrated and include CampaignLogic, the exclusive CBRE web platform and CBRE Marketplace, CBRE’s proprietary, secure virtual transaction management platform.

CBRE’S TECHNOLOGY PLATFORM The CBRE web platform provides seamless integration with the CBRE corporate website, exposing properties to a global audience. With branded templates that incorporate the latest technological advances in marketing and real time web analytics, CBRE teams can reach millions in minutes and evaluate the progress of the property immediately. Investors will use CBRE Marketplace to learn more about offered listings, sign confidentiality agreements, and view and download offering memoranda and due diligence information. From CBRE Marketplace, you are also able to forward assets to other potential investors. Once retained, we use several proprietary technology systems to launch a targeted campaign to prospective investors. Below are a few of the tools that we use in the investment sales process:

A secure virtual transaction management platform that empowers brokers, investors and property owners to collaborate with real-time asset information and enhances the transaction process by achieving optimal performance throughout the entire real estate sales cycle. CBRE Marketplace ties together our e-mail campaigns (conducted through CampaignLogic) with the “war room” elements of the transaction and provides enhanced e-mail and document tracking for client reporting. An e-marketing tool that we use to launch targeted e-mail campaigns to prospective investors. This tool provides details on the success of our e-blasts so clients fully understand the depth of interest in the marketplace. A nationally shared database – the only one of its kind – with 120,000 key investors and 35,000 brokers. This robust and powerful database allows for Capital Markets teams to be on the forefront of national market trends. Buyer qualification is a critical component of a successful investment sale so open and clear communication nationally ensures successful transactions and maximizes the value for our clients on every assignment.

Marketing 47


PROCESS TIMELINE P H A S E I | P R E PA R AT I O N Sign Listing Agreement Prepare Target Investor List Finalize Financial Assumptions & Projections Prepare Draft of ES, OM, E-blast and Marketplace

PHASE II | MARKETING Launch Property into Market (E-blast, Postcards, Targeted Mailers) OM Available on Document Center - Level 1 Access Provide Weekly Status Reports to Client Provide Weekly Property Updates to Prospective Buyers Conduct Property Tours with Key Investors

P H A S E I I I | N E G OT I AT I O N Request First Round of Offers From Prospective Buyers Evaluate Bidders and Review Offers With Client Conduct Best and Final Round for Select Offerers Award Deal/LOI Executed

PHASE IV | DUE DILIGENCE Issue Purchase and Sale Agreement Begin Due Diligence with Receivables and Inspections Deadline to Execute Purchase and Sale Agreement Due Diligence Period Ends

P H A S E V | C LO S I N G

Marketing

Target Closing

48

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18


Marketing 49


MARQUIS ON BRIAR FOREST


06

Execution Team


INVESTMENT SALES TEAM LEADERS RYAN EPSTEIN

CLINT DUNCAN

JOHN FENOGLIO

HAL HOLLIDAY

EXECUTIVE VICE PRESIDENT

VICE PRESIDENT

EXECUTIVE VICE PRESIDENT

EXECUTIVE VICE PRESIDENT

CBRE Capital Markets Investment Properties | Multifamily

CBRE Capital Markets Investment Properties | Multifamily

CBRE Capital Markets Debt & Structured Finance

CBRE Capital Markets Debt & Structured Finance

NATHAN JONES Director of Operations WES BREEDING Associate Director JENNIFER RAY Associate Director

E x e c u t i o n Te a m

VEDA HOLLOWAY Client Services Specialist

52

ADDITIONAL RESOURCES

CBRE RESEARCH PRODUCTION CENTER


CBRE TEAM dael dna rednuof eht sA oh-itlum s’ ynapmoc eht 02 ecniS .noiger tsaoC eno sa deknar yltnerruc ig noitangised a ,elcriC

As the founder and leader of CBRE Capital Markets Multifamily, Ryan Epstein focuses on leading the company’s multifamily investment sales and has bolstered CBRE’s market share in the Houston Gulf Coast region. Since 2006, he has marketed and sold assets valued at more than $2 billion in Texas. He is currently ranked as one of CBRE’s top National producers for 2013 and was awarded the Colbert Coldwell Circle, a designation given to the highest tier of Producers nationally for CBRE.

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Ryan’s focus is advising multifamily owners and developers in the Gulf Coast region and San Antonio, Texas. Prior to joining CBRE, Ryan was a top producer with Institutional Property Advisors, specializing in the sale of multifamily assets throughout all of Texas.

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Mr. Epstein has been quoted in the media as an industry expert and his client list includes REITs, pension funds, private investment companies, local and national developers, banks and special servicers.

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• • • • • • • • • • • • • •

RYAN EPSTEIN NPresident IETSPE NAYR Executive Vice tneMultifamily diserP eciV roineS Houston

puorG gnisuoH-itluM notsuoH T +1 713 787 7791977 1.787.317 :T C +1 210 687 3863683 3.786.012 :M ryan.epstein@cbre.com moc.erbc@nietspE.nayR

SAMPLE OF CLIENTS REPRESENTED • Greystar • AIG • Legacy Partners • Trammell Crow Residential • Asset Plus • USAA • Alliance • CWS Capital Partners • ING • Equity Residential • Bascom

SIGNIFICANT ACHIEVEMENTS • 2013/2012 - Ranked as one of CBRE’s top National producers • 2010 - Ranked as one of Marcus & Millichap’s top National producers • 2009/2010 - Mr. Epstein was the #2 and #3 producing agent in Texas, respectively. • 2009 - Recognized as one of the top 25 apartment brokers

PROFESSIONAL AFFILIATIONS • Current member of ULI (Urban Land Institute)

EDUCATION • University of Arizona, Bachelor of Science in Business Management

• JP Morgan Chase • Prudential

E x e c u t i o n Te a m

• Milestone

53


As Vice President of CBRE’s Capital Markets Multifamily group in Houston, Texas, Clint along with Ryan Epstein lead the multifamily investment sales platform for the Houston-Gulf Coast region. Clint Duncan recently joined the Multifamily group from Transwestern, where he ranked as a top producer nationally on the Houston Multifamily team. During this time, he directed the sale of more than 14,000 apartment units in just over three years. Clint began his brokerage career with the Houston office of Hendricks and Partners several years ago where he represented large investors in the sale of apartment properties. Prior to his career in the real estate industry, Clint spent several years working in various business consulting positions for Andersen Consulting, Hewlett Packard, Acergy and Lennar Homes.

SAMPLE OF CLIENTS REPRESENTED

SIGNIFICANT ASSIGNMENTS

• Bascom

PROPERTY

• TA Associates

Vice President

CityView Portfolio

2,712

• Allied Realty

Multifamily

Texas Portfolio

2,241

• LNR Partners

Cranbrook Portfolio

1,038

• CIII

Houston Portfolio

1,524

• Bridge Investment Group/ROC

Indigo Falls

1,066

CLINT DUNCAN

T +1 713 577 1721 C +1 832 724 3534 clint.duncan@cbre.com

Funds • Praedium • Midland Loan Servicing • Starwood Capital • Pacifica Companies • Ocwen Loan Servicing • Trimont

Tanglewood Court

UNITS

634

SIGNIFICANT ACHIEVEMENTS • 2011-2013 | Ranked as one of the Transwestern’s Top National Producers

PROFESSIONAL AFFILIATIONS • Texas Real Estate Salesperson License

E x e c u t i o n Te a m

EDUCATION

54

• Mr. Duncan holds a Bachelor of Science in Biology with a Minor in Chemistry from Stephen F. Austin State University


E x e c u t i o n Te a m 55


OVERVIEW & QUALIFICATIONS | 2013 TRANSACTION VOLUME CBRE’S TEXAS MULTIFAMILY GROUP

HIGHLIGHTED TRANSACTIONS | SOLD AND FINANCED

• Put the client first, always • Delivering results for our clients

–– $2.03 billion in 2013 investment sales –– $3.08 billion in 2013 debt financing • Unprecedented access to capital • Proprietary investor database • National perspective • Tight process management • Seamless integration of Multifamily Investment Sales with Debt & Structured Finance

E x e c u t i o n Te a m

• Superb execution and surety of close

56

CBRE CAPITAL MARKETS SOLD AND FINANCED UNIVERSITY GATEWAY, THE LARGEST SINGLE ASSET STUDENT HOUSING TRANSACTION IN THE HISTORY OF THE INDUSTRY AND RIATA, THE LARGEST SINGLE ASSET TRANSACTION IN THE HISTORY OF TEXAS.


INVESTMENT SALES TRACK RECORD • CBRE has transacted more than $120 billion in multifamily investment sales from 2003-2013 – more than two times the volume of our next competitor and only 8% less than the next three competitors combined • Between 2003 and 2013, CBRE transacted more portfolios than any other group in the U.S. with more than 1,202 properties for a total consideration of more than $27 billion. CBRE has transacted nearly the same amount of portfolios as the next four competitors combined

PORTFOLIO SALES * 1,250

5,000

$100,000

4,000

$75,000

3,000

$50,000

2,000

$25,000

1,000

$0

M & M

ARA

C&W

$25,000

0

HEN DRICK S

VOLUME ( IN $MIL)

$125,000

TOTAL PROPERTIES

VOLUME ( IN $MIL)

$30,000

1,000

$20,000 750 $15,000 500 $10,000 250

$5,000

$0

TOTAL PROPERTIES

MULTIFAMILY INVESTMENT SALES *

ARA

M & M

C&W

HFF

0

*2003 to 2013 transaction volume

TOTAL PROPER T I ES

E x e c u t i o n Te a m

VOLUME ( IN MILLION S)

57


WE PUSH THE LIMITS

MARQUIS ON BRIAR FOREST

???

CA’S SIGNED

???

OFFERS RECEIVED

???

TOURS GIVEN

$???

E x e c u t i o n Te a m

(???% INCREASE) INCREASE FROM INITIAL TO FINAL OFFER

58

ARIUM BRIAR FOREST

82

CA’S SIGNED

15

OFFERS RECEIVED

25

TOURS GIVEN

$1,194,000

(2.68% INCREASE) INCREASE FROM INITIAL TO FINAL OFFER

PROMENADE CULLEN PARK

87

CA’S SIGNED

13

OFFERS RECEIVED

23

TOURS GIVEN

$250,000

(1.15% INCREASE) INCREASE FROM INITIAL TO FINAL OFFER

WHAT CAN CBRE DO FOR YOU?

THE RETREAT AT THE WOODLANDS

95

CA’S SIGNED

11

OFFERS RECEIVED

16

TOURS GIVEN

$1,950,000

(4.90% INCREASE) INCREASE FROM INITIAL TO FINAL OFFER


RELEVANT TRANSACTIONS

RETREAT AT CONROE

ALEXAN SILBER

240 Units | Built 2012

210 Units | Built 2013

402 Units | Built 2009

ALTA HEIGHTS

RETREAT AT SHADOW CREEK RANCH

AVANTI CITYSIDE

256 Units | Built 2014 Under Contract

370 Units | Built 2013

378 Units | Built 2007 E x e c u t i o n Te a m

RETREAT AT THE WOODLANDS

59


E x e c u t i o n Te a m

CLIENT REFERENCES

60

RICARDO RIVAS

ADAM BUCHWALD

Allied Realty Services 1455 W. Loop South, Suite 800 Houston, TX 77027 T +1 713 622 4949

The Carlyle Group 1001 Pennsylvania Ave NW, Suite 220 South Washington, DC 20004 T +1 202 729 5488

MARK DUNNE Boston Capital One Boston Place Boston, MA 02108 T +1 617 624 8769

ALBERT BARIL STAN FIMBERG FSC Realty, LLC 9777 Wilshire Blvd, Suite 500 Beverly Hills, CA 90212 T +1 310 278 2434

TODD GAINES PATRICK TRASK Wood Partners 8 Greenway Plaza, Suite 600 Houston, TX 77046 T +1 713 439 7900 ext 103

JAMES STREET Prudential Financial 3348 Peachtree Road, Suite 1100 Atlanta, GA 30326 T +1 770 395 8614

JAMES CHRISTENSEN

COURTNEY BURKETT

Heitman Capital Management 191 North Wacker Drive, Suite 2500 Chicago, IL 60606 T +1 312 425 0324

Goldman Sachs 6011 Connection Drive Irving, TX 75039 T +1 972 368 2130


E x e c u t i o n Te a m 61


MARQUIS ON BRIAR FOREST


07

Corporate Overview


CBRE WORLDWIDE BUSINESS ACTIVITY

$223.2 BILLION TOTA L T R A N S A C T I O N S

54,225

TRANSACTIONS LEASE TRANSACTIONS

$83.1 BILLION TOTAL CONSIDERATION

18,550

TRANSACTIONS PROPERTY SALE TRANSACTIONS

$140.1 BILLION TOTA L C O N S I D E R AT I O N

$26.9 BILLION LO A N O R I G I N AT I O N S

Corporate Overview

LOANS

64

$133.9 BILLION TOTA L LO A N S S E R V I C E D

132,300 VALUATION AND ADVISORY SERVICES

TOTA L A S S I G N M E N T S


Corporate Overview

CBRE IS THE UNDISPUTED NUMBER ONE REAL ESTATE SERVICES PROVIDER IN THE WORLD.

65


CBRE WORLDWIDE COVERAGE

21

OFFICES

25

OFFICES

161

133

OFFICES

OFFICES

7

OFFICES

4

9

OFFICES

OFFICES

41

OFFICES

14

OFFICES

9

OFFICES

22

Corporate Overview

OFFICES

66

63 COUNTRIESA

450 OFFICESB

a. includes 21 countries covered by affiliate offices; b. includes 101 affiliate offices; c. includes approximately 5,000 affiliate employees.

49 , 00

4

OFFICES

EMPLOYEESC


TOTAL TRANSACTION VALUE BY PRODUCT

Property & Corp Facilities Managed d

Loan Originations e

Loan Servicing f

Investment Assets Under Management

Development in Process g

Valuation & Advisory Assignments

Project Management Contract Value h

3.5B SF

$26.9B

$133.9B

$89.1B

$4.9B

132,300

$28.9B

CBREâ&#x20AC;&#x2122;S CAPABILITIES EXTEND BROADER AND DEEPER THAN ANY OTHER REAL ESTATE SERVICES PROVIDER, OFFERING UNPARALLELED TOOLS AND RESOURCES, LEVERAGE, CREDIBILITY, MARKET COVERAGE AND LOCAL EXPERTISE.

d. includes 0.24 billion sq. ft. managed by affiliate offices; e. includes loan sale advisory; f. includes loans serviced by GEMSA, a joint venture between CBRE Capital Markets and GE Capital Real Estate; g. includes $1.2 billion of Long-Term Operating Assets (projects that have achieved a stabilized level of occupancy or have been held 18-24 months following shell completion or acquisition); h. includes $13.2 billion of projects that were in process as of December 31, 2012

Corporate Overview 67


CBRE CORPORATE OVERVIEW CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue). The company has approximately 44,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through approximately 350 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com for more information.

2013 GLOBAL TRANSACTION ACTIVITY 1

18%

OTHER

25% CBRE

WHY CBRE?

25%

7%

EASTDIL

• An intimate knowledge of virtually every major market in the world • Intellectual capital and technological resources that develop and deliver superior analytical, research and client service tools to its professionals

9%

COLLIERS

18%

• A proven track record of meeting diverse client needs

JLL

• Leadership positions in all service lines

10%

Corporate Overview

• An organizational structure that harnesses the firm’s collective expertise

68

In 2013, CBRE completed sales and lease transactions with a total value of $223.2 billion, representing 54,225 lease transactions valued at $83.1 billion and 18,550 property sales transactions valued at $140.1 billion. In addition, CBRE completed $26.9 billion in loan originations, serviced $133.9 billion in loans in 2013, as well as completed 132,300 valuation and advisory assignments last year. Despite the firm’s preeminence in the global market, CBRE believes that the true meaning of success is defined by constantly meeting clients’ needs through quality, reliability and superior service delivery worldwide. This driving force has resulted in extensive global recognition.

NGKF

13% C&W

Top Six U.S. Firms Excluding Networks | Source: 2013 Sales & Leasing Transaction Value Source: National Real Estate Investor, March 2014 1


CBRE VALUE PROPOSITION CBRE is the undisputed #1 real estate services provider in the world leveraging a plethora of resources to successfully complete any real estate assignment. Our ability to coordinate all business lines, effectively utilize both international and local expertise, and openly share relationships and information ensures that even the most complicated assignment will be successfully executed. The Capital Markets platform leverages these resources allowing our professionals to be as effective on a single-asset, local-market assignment as on a sophisticated, multi-location portfolio. This highly efficient network lends itself to unparalleled service delivery and solidifies CBRE as the global leader in institutional investment real estate. Clients benefit from the following: • A global platform that has been refined over three decades; 433 offices around the world • A core philosophy of “teaming to win”, ensuring that the strengths of the entire company are applied to each client’s needs • A technology platform that enables transparent, but protected, access to all information pertinent to clients and opportunities

GLOBAL RECOGNITION Only commercial real estate services company in the Fortune 500 #1 real estate brand Highest ranked commercial real estate services company in 2012 and 2011 #1 brand for 12 consecutive years

#4 outsourcing company across all industries; #1 among real estate services firms

Global Real Estate Advisor of the Year

• Broker-dealer licensed • Top in-house Capital Markets talent to provide expertise in:

–– Consulting –– Investment sales

European Property Brand of the Year Only commercial real estate services firm included on the Forbes Global 2000

–– Valuation & underwriting –– Financing

Top real estate company in “green” rankings

–– Loan servicing & sales –– Mortgage banking

World’s Best Property Consultant All marks displayed on this document are the property of their respective owners.

Corporate Overview

• An unmatched network of professionals to ensure the best and most qualified team is assembled for each client and assignment

U.S. EPA 2012 ENERGY STAR Sustained Excellence Award (6 years of Partner of the Year status)

69


INVESTMENT PROPERTIES RYAN EPSTEIN Executive Vice President +1 713 787 1977 ryan.epstein@cbre.com

NATHAN JONES Director of Operations WES BREEDING Associate Director

CLINT DUNCAN Vice President +1 713 577 1721 clint.duncan@cbre.com

JENNIFER RAY Associate Director VEDA HOLLOWAY Client Services Specialist

CBRE © 2014 All Rights Reserved. All information included in this proposal pertaining to CBRE—including but not limited to its operations, employees, technology and clients—are proprietary and confidential, and are supplied with the understanding that they will be held in confidence and not disclosed to third parties without the prior written consent of CBRE. This letter/proposal is intended solely as a preliminary expression of general intentions and is to be used for discussion purposes only. The parties intend that neither shall have any contractual obligations to the other with respect to the matters referred herein unless and until a definitive agreement has been fully executed and delivered by the parties. The parties agree that this letter/proposal is not intended to create any agreement or obligation by either party to negotiate a definitive lease/purchase and sale agreement and imposes no duty whatsoever on either party to continue negotiations, including without limitation any obligation to negotiate in good faith or in any way other than at arm’s length. Prior to delivery of a definitive executed agreement, and without any liability to the other party, either party may (1) propose different terms from those summarized herein, (2) enter into negotiations with other parties and/or (3) unilaterally terminate all negotiations with the other party hereto. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completences. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

CBRE, INC Broker Lic: #00409987

MARQUIS ON BRIAR FOREST

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