Encore at Mission Farms Presentation

December 2021

Weltner / EPC Encore

Encore at Mission Farms Presentation

C R E AT I N G A

VISION FOR

MISSION FARMS

Table of Contents

Section 1

BIG PICTURE 7

PROJECT SNAPSHOT

UNDERWRITING APPROACH

OWNERSHIP STRUCTURE PARTNERSHIP

Section 2

DESIGNING FOR THE MARKET 15

SITE PLAN DESIGN CONCEPT PROJECT TIMELINE AMENITIES / FINISHES RENTER PROFILE

Section 3

PROJECT ECONOMIC ANALYSIS 35

PROJECT BUDGET COSTS & ECONOMIC RETURNS

Section 1

BIG PICTURE

7

Project Snapshot

Total Units Total GSF

202,579

Total NRSF

157,481

Garage Stalls

151

Surface Stalls

47

Average Unit Size

78% efficiency

1,038

Studio

10

6%

1 BR

81

54%

2 BR

60

40% Includes 2 & 3 bedrooms

Average Rent/Unit Average Rent/SF Total Costs

10

151

$2,503 $2.40 $49,029,974

9

11

Underwriting Approach EPC FINANCIAL UNDERWRITING METRICS - GO OR NO-GO DECISION Typical First to Market EPC Profile or Leasehold Interest

Allowable Profile for unique growth markets (Salt Lake City, Select sites in Dallas, Austin)

Yield on Cost (NOI/Cost)

6.5% - 7%

Yield on Cost (NOI/Cost)

5.50%

Typical Exit Cap

4.1% - 5.5%

Typical Exit Cap

3.8% - 5.25%

5 YR Asset IRR Target

20%

5 YR Asset IRR Target

15%

10 YR Asset IRR Target

15%

10 YR Asset IRR Target

13%

5 YR LP Equity Multiple

2x

5 YR LP Equity Multiple

1.75x

10 YR LP Equity Multiple

3x

10 YR LP Equity Multiple

2.25x

Weltner / EPC have adopted a set of metrics specific to the risk profile of the areas in which we develop. Below is a summary of the drivers which allow us and our capital partners to move forward at the outlined metrics for our projects: 1. Market driven lower cap rates at exit 2. Increased interest from capital sources (lower cost of capital due to reduced risk profile) 3. Directly in the growth path 4. Demographic Profile 5. Barrier to entry 6. Unique amenity profile in the community

11

Ownership Structure A new ownership entity will be set up for this asset. It is anticipated this asset will borrow 70% of the capital needed for the development, and the remaining 30% will come from cash investments (or bank recognized contributed assets).

Weltner / EPC will be the Manager of entity as well as the developer of the asset.

Occasionally, we allow a major investor to act as Co-Manager. This is done only with vetted partners who need to maintain a voting level of control due to the requirements of their capital (ex. government managed pension fund, RE fund, etc.)

Why EPC/Saddle & Weltner as Partners?

We intend to continue to deliver on Mission Farms vision of the highest quality, mixed-use development in the area. Our expertise to understand and meet market demand is what will make the Encore at Mission Farms successful.

PRODUCT TYPES APARTMENTS OFFICE RETAIL

Our team had developed all phases of Mission Farms into one of the most successful projects in the Kansas City Metro.

MIXED USE

As a group we typically own a majority interest in the asset and offer like minded investors the opportunity to participate.

MEDICAL SENIOR

13

Section 2

DESIGNING FOR THE MARKET

15

Site Plan

19

17

Design Concept

EPC Real Estate and Weltner Equities has designed and will develop 151 luxury market rate units to appeal to the 55 to 75 year old age bracket. The project will be branded as “The Encore” and will be one of 3 currently under development.

Typically referred to in the market as 55+ or Active Adult our targeted demographic is looking for a living and social experience after selling their home and before considering independent living.

The Encore Brand will create a “Four Seasons” resort feel for those users that remain vibrant and active without the need for physical or medical assistance. We intend to attract and appeal to empty nesters, early retirement and active senior cohorts.

EASY ACCESS TO SHOPS & DINING 151 Units

21

First Level Building 10

Podium Level Building 10

23

Grade Level Building 12

Second Level Building 12

25

Project Timeline

27

Amenities Residents need to have access to the latest in amenities, promoting healthy living through both health and wellness. This will include filtered air and mineral water to UV lighting and circadian lighting; positive ION emission and aromatherapy; full spa services, 3rd party concierge physician and wellness services; yoga and Pilates, spin classes and resistance training to art and ceramic classes. Also included will be wine bars, local taps, coffee bistros, and multiple dining venues with professional chef kitchens, and master grilling stations for a complete culinary experience. A further description of amenities can include:

• Multi-purpose room for theatre, academics • Bistro/grab-and-go • Event/demonstration kitchen • Extensive fitness/yoga • Library with research center • Salon • Fireside lounge • Game room(s) • Dog park • Dog grooming • Outdoor community garden • Outdoor kitchen and grilles • Outdoor fire pit/fireplace • Outdoor gathering spots • Outdoor pool designed for water aerobics • Increased storage quantity and sizes

• Art and ceramic studio entertaining local artists • Craft beer & wine bars • Continuing education from local colleges and universities • Community outreach opportunities & disaster relief volunteer program • Whole building water filtration system • Negative ionization system which kills viruses and bacteria • Fresh air systems using individualized VTAC systems and micro-filter • Transportation through Uber/Lyft

Finishes Our team has a high standard for our facility’s interiors. We want to deliver the best to our tenants and have a record of top quality units and common area.

FLOORING: Each project varies slightly as new products hit the market. We make our selections with durability and appearance top of mind. Primarily, the flooring has been wood-like vinyl plank flooring in the kitchen and family room, carpet in the bedrooms, and tile in the restrooms and laundry room.

COUNTERTOPS: As a high quality developer we only use granite or quartz.

Primarily, we are currently sourcing quartz, but this is constantly threatened by tariffs. We have partners we work closely with to fabricate counter tops overseas in controlled facilities where we can change 1% of the aggregate mix to avoid certain tariffs. Timing of purchase will guide this selection.

HARDWARE, SINKS, ETC: Similar to above, we have proprietary sources and also work closely with sub trades to get the most current looks and best value. Since these are showpieces of a unit, we are always top of the market and due to bulk purchasing for all of our properties we get preferred pricing.

Our interior designer will collaborate with Hoefer Welker to ensure the best applications are selected at the right price point for our target demographic. Below and on the following page are examples of recent projects that are representative of typical unit and common area finishes.

Our interior designer will collaborate with Hoefer Welker to ensure the best applications are selected at the right price point for our target demographic.

Below and on the following page are examples of recent projects that are representative of typical unit and common area finishes.

Renter Profile The mix of lifestyle and economics are pushing healthy, young baby boomers to cons ider alternative housing options shifting away from either a single-family home or traditional senior living. Many 55+ boomers want what senior housing offers but don’t want or need to pay for a care component or meals. They are attracted to an environment that is wellness-based and socially-driven but with greater flexibility. EPC believes Active Adult apartments are the answer.

“Consumer interest is rooted in a senior’s desire to strip away the cost, responsibility and commitment of home ownership and experience an entirely new option. While single-family homes are often isolating and lifestyle redundant day-to-day, the Active Adult environment is designed to be invigorating, collaborative and stimulating at a very competitive cost”.

Age targeted multi-family apartment communities are just beginning to be offered around the country. Unlike traditional senior living, active adult apartments are a separate product type with a different consumer base and unique benefits and risks.

“Active Adult” is different than independent living (IL). The word “senior” is eliminated because it consists of a younger and healthier cohort that dislikes thinking of themselves as senior. Conversely this group identifies with the term “active”.

SOCIOECONOMIC TRAITS OF TARGET USER • They have cultivated a lifestyle that is both affluent and urban • More interesting in quality than cost • Prefer living in established neighborhoods • Single and married primarily still working and self employed • 43 percent of Golden Years live in multi-unit dwellings • Purchasing power to what they want • Highly educated • Live balance lifestyle with time for grandkids and maintain close friends

33

Section 3

PROJECT ECONOMIC ANALYSIS

35

Development Budget ACQUISITION COSTS Land Costs

$4,000,000

Closing Costs

$50,000.00

Preliminary Assessments

$0 Total Acquisition Costs: $4,050,000

HARD COSTS Site Work

$2,113,762

Construction Costs

$32,601,547

Hard Cost Contingency

$815,039 Total Hard Costs: $35,530,347

SOFT COSTS Architectural / Engineering / Design

$1,601,500

FFE, Gov Fees, Market Study, Startup

$1,474,246

Legal

$150,000

Marketing

$426,447

Taxes

$300,000

Insurance

$250,000

Construction Financing Costs

$4,344,484

Soft Cost Contingency

$213,667

Development OHP

$975,000

Construction Management OHP

$975,000 Total Soft Costs: $10,710,344

TOTAL PROJECT COSTS

$49,029,974

37

Costs & Economic Returns

$49,029,974

Total Costs

Approx. $324k per unit

$4,000,000

Land Costs

$26,490 per unit

$1,594 - $4,169

Rent Range

not including parking, etc..

Average Rent/Unit

not including parking, etc..

$2.40

Average Rent/SF

not including parking, etc..

$65,147,535

10 YR Hold Value

5.5% cap rate exit

$2,503

11.05%

C.O.C. @ Stabilization

1.89

DSCR @ Stabilization

12.76%

10 YR IRR

6.14%

Yield on Cost

2.52x

10 Yr. Equity Multiple

Assumes 70% Debt