Avison Property Report

CO N F I D E N T I A L O F F E R I N G M E M O R A N D U M

Little Havana Studios | Miami, FL Partnership. Performance.

Content P R O P ER T Y O VER V IE W

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F I N ANC I AL O VER V IE W

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MA R KE T O VER VI E W 14 CO M PAR AB L ES 18

CO N TA C T:

Rafael Fermoselle Senior Associate 305.447.7859 rafael.fermoselle@avisonyoung.com Marcus Christensen Senior Associate 305.447.7858 marcus.christensen@avisonyoung.com

Avison Young 2020 Ponce de Leon Boulevard | Suite 1200 Miami, FL 33134 avisonyoung.com

DISCLOSURE This confidential Offering Memorandum was prepared by Avison Young - Florida, LLC and has been reviewed by Owner. It contains selected information pertaining to the Property and does not purport to be all-inclusive, nor to contain all the information that a prospective investor may desire. This presentation is not an offer to sell or a solicitation to buy any securities, and is subject to prior placement, errors, omissions, changes or withdrawal without notice and does not constitute a recommendation, endorsement, or advice as to the actual return of this investment.

Except for any historical information, such matters discussed herein are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected, and could result in the loss of principal. Each prospective investor is to rely upon its own investigation, evaluation and judgment as to the advisability of the investment described herein.

Sources of information contained within this Investment Memorandum include, but are not limited to: CoStar, Integrated Realty Resources, Google, MLS, and the US Census Bureau.

Avison Young - Florida, LLC expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers and/or to terminate discussions with any party at any time with or without notice. Avison Young - Florida, LLC shall have no legal commitment or obligation to any investor reviewing this Offering Memorandum or making an offer to invest in the Property unless a written agreement has been fully executed, delivered, and approved by the Owner and any conditions to Owner’s obligations thereunder have been satisfied or waived.

This Offering Memorandum is the property of the Avison Young - Florida, LLC and may only be used by parties approved by Avison Young - Florida, LLC. The Property is being privately offered and by accepting this Offering Memorandum, the party in possession hereof agrees that its contents are of a confidential nature and will be held and treated in the strictest confidence. No portion of this Offering Memorandum may be copied or otherwise reproduced or disclosed to anyone without the prior written authorization of Avison Young - Florida, LLC and Owner. The terms and conditions set forth apply to this Offering Memorandum in its entirety.

OFFER SOLICITATION PROCESS Offers should be presented in the form of a non-binding Letter of Intent delineating the significant terms and conditions of the Purchaser’s offer including, but not limited to: 1. Purchase price 2. Due diligence and closing time frame 3. Earnest money deposit 4. Qualifications to close

LIT TLE HAVANA STUDIOS

PROPERTY OVERVIEW

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INVESTMENT SUMMARY 1836 SW 1ST STREET MIAMI, FL 33125

The property consists of eight studio/one-bath apartments, 4,167 square feet of total rentable space and sits on a 9,362-square foot lot. The property features off-street parking, excellent exposure to Sw 1 St, T6-8 zoning which allows for future re-development and 40 year recertification.

EXECUTIVE SUMMARY

Avison Young has been retained as the exclusive marketing agent for Little Havana Studios located at 1836 SW 1st Street in Miami. Located in the heart of Little Havana, one of the strongest rental areas in MiamiDade County. Little Havana is the cultural epicenter of Miami’s Latin community with close proximity to major public transportation, employment centers, shopping, Downtown Miami, Coral Gables, Coconut Grove and MIami International Airport.

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LIT TLE HAVANA STUDIOS

LEFT TO RIGHT: East view of Little Havana Studios from street view, West view of Little Havana Studios from street view.

INVESTMENT HIGHLIGHTS SUPERB LO C ATION WITHIN THE LIT TLE HAVANA SUBM ARK E T

PROPERTY STATS Address Building type Number of Units

1836 SW 1st Street Multifamily 9

Rentable building area

4,167 sf

Lot size

9,362 sf

Type of ownership

Fee simple

Density

Medium

Parking

Off-street

Parking ratio

Off-street

Lansdcaping

Tropical

UTILITIES

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Water

Miami-Dade Water - Paid by Landlord

Phone

Private - Paid by Tenant

Electric

FPL - Paid by Tenant

The Miami metro division, with a population of 2.6 million, is located entirely within Miami-Dade County. The metro includes 35 incorporated towns and cities and many unincorporated areas. Miami is the largest city, with 424,100 residents, followed by Hialeah.

The county is served by major interstate highways including Interstate 75, which travels west across the Everglades, and Interstate 95, which runs along the Atlantic Coast. The Florida’s Turnpike links to Orlando and Interstate 75.

Many tourists fly into Miami International Airport, which serves south Florida and is a hub of American Airlines. Other international airports are also nearby in Fort Lauderdale and Palm Beach.

Miami-Dade Transit offers metro bus and heavyrail train services throughout the area, as well as a “people-mover” system in downtown Miami. Commuter rail line Tri-Rail links Miami-Dade and Palm Beach counties.

EXECUTIVE SUMMARY

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WHY LIT TLE HAVANA STUDIOS? 1

Upside in rents

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Strong Little Havana Submarket

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Various re-development opportunities

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T6-8 zoning allows for 34 multifamily units

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Retail or mixed-use also possibilities

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Easy access to public transportation

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LIT TLE HAVANA STUDIOS

PHYSIC AL DESCRIPTION - FOLIO NUMBER 01-4103-014-0550

- EXTERIOR WALLS Stucco

- NO. OF UNITS Nine (9)

- ROOF Pitched

- NO. OF FLOORS One (1)

- FOUNDATION Concrete

- YEAR BUILT 1951

- FLOORS Tile

- RENTABLE SF 4,167 sf

- INTERIOR WALLS/CEILINGS Dry wall/Stucco

- LOT SIZE 9.362 sf

- AIR CONDITIONING/HEATING HVAC - Wall units

- ZONING T6-8 O

- FIRE SUPPRESSION Smoke detectors

- PARKING Off-Street - STAIRWAYS None - CONSTRUCTION TYPE CBS

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TH

SW 17

PROPERTY OVERVIEW

AVENUE

LIT TLE HAVANA STUDIOS ET ST S T R E 1 SW

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LIT TLE HAVANA STUDIOS

FINANCIAL OVERVIEW

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2014 PROFIT & LOSS Jan - Dec 14 INCOME $72,600

NOI

$45,870

Loan Amount

$540,000

Net Cash Flow Before Debt Service

$45,870

Debt Service

$35,105

Debt Coverage Ratio

1.19

Net Cash Flow After Debt Service

1.8% / $6,564

Principal Reduction

$12,394

Total Return

5.3% / $18,958

FINANCIAL OVERVIEW

Gross Potential Rent

EXPENSES RE Taxes

$8,832

Insurance

$6,300

Water & Sewer

$2,100

Waste Sevices

$3,000

Repairs/Maintenance

$2,000

Landscape & Clean Up

$500

Management Fees

$2,846

Reserves & Replacements

$2,000

Total Expenses

$25,278

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LIT TLE HAVANA STUDIOS

RENT ROLL

12

UNIT 1 2 3 4 5 6 7 8 9 Total

SF

4,063 sf

MIX Studio / 1 Bath Studio / 1 Bath Studio / 1 Bath Studio / 1 Bath Studio / 1 Bath Studio / 1 Bath Studio / 1 Bath 2 Bed / 1 bath Studio / 1 Bath

CURRENT RENT $650 $650 $650 $650 $650 $650 $650 $850 $650 $6,050

PRO-FORMA $800 $800 $800 $800 $800 $800 $800 $1,200 $800 $7,600

FINANCIAL OVERVIEW CURRENT 5.10% 12.50

PRO FORMA 7% 11.19

$72,600 ($1,452) 2% $71,148 $25,278 $45,870 $45,870 $35,105 1.19 1.8% / $6,564 $12,394 5.3% / $18,958

$91,200 $1,200 ($1,824) 2% $90,576 $27,673 $62,903 $62,903 $35,105 1.33 3.2% / $11,530 $12,394 6.6% / $23,924

$8,832 $4,000 $2,100 $3,000 $2,000 $500 $2,846 $2,000 $25,278 $2,809 35.5%

$10,450 $4,000 $2,100 $3,000 $2,000 $500 $3,623 $2,000 $27,673 $3,075 30.6%

FINANCIAL OVERVIEW

CAP Rate GRM INCOME Gross Potential Rent Other Income (Vacancy Loss) Effective Gross Income Less: Expenses Net Operating Income Net Cash Flow Before Debt Service Debt Service Debt Coverage Ratio Net Cash Flow After Debt Service Principal Reduction Total Return EXPENSES Real Estate Taxes Insurance Water & Sewer Waste Services Repairs & Maintenance Landscape Management Fee Reserves & Replacements Total Expenses Expenses/unit % of EGI

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LIT TLE HAVANA STUDIOS

MARKET OVERVIEW

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THE MARKET

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The Miami metro division, with a population of 2.6 million, is located entirely within Miami-Dade County. The metro includes 35 incorporated towns and cities and many unincorporated areas. Miami is the largest city, with 424,100 residents, followed by Hialeah.

The Miami economy relies heavily on tourism and the county’s standing as the gateway to Latin America and the Caribbean. Tourism, trade, international finance, healthcare and entertainment have become major industries in the local business community.

The Miami-Dade County employment base comprises of more than 1 million workers.

Through the coming five years, total jobs in the metro will expand 0.8 percent annually, just

below the U.S. average of 1.2 percent. Some of the fastest growing job sectors are professional and business services, and construction.

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The Port of Miami is the number one cruise terminal in the world, welcoming more than 4 million passengers annually. The Panama Canal expansion expected to open in 2016 will allow for increased cargo capacity to the port.

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Miami-Dade County has developed into a cosmopolitan, urban area offering a vibrant business and cultural community, and an exceptional quality of life to its residents. With the sun shining year round and a daily mean temperature of just over 75 degrees, Miami provides a casual environment where outdoor activities abound.

MARKET OVERVIEW

Miami-Dade County is situated on the Florida Platform, a carbonate plateau made of limestone and bryozoa. The 2,400-square-mile county extends from the Florida Everglades east to the Atlantic Ocean. It is bordered to the north by Broward County and to the south by Monroe County. The main portion of the city of Miami lies on the shores of Biscayne Bay and is separated from the Atlantic Ocean by barrier islands, the largest of which holds the city of Miami Beach.

Everglades National Park and Biscayne National Park are partially located within the county, as is a portion of Big Cypress National Preserve.

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LIT TLE HAVANA STUDIOS

DEMOGR APHIC S Miami’s population growth continues to outpace the nation. Miami-Dade is now one of the most populous counties on the East Coast, increasing from 1.9 million residents in 1990 to 2.6 million last year. Most of the expansion has come from net migration, both domestic and international. In-migration, which slowed during the recession, is increasing again as the local economy strengthens and the housing market recovers.

With a median age of 38.6 years, Miami’s population is slightly older than the nation’s median of 37.3 years. Income, on the other hand, is less than that of the nation. Miami’s median household income, of $43,800 per year, is relatively low because of the abundance of lower-paying, service-oriented jobs and the metro’s large concentration of senior households. Over the next five years, the median income is expected to rapidly outpace the rise in home prices, allowing more people to qualify for homeownership. The median price of a home in the county is around $230,900, affording 55 percent of residents to own their own home.

2015 STATISTICS (5-MILE RADIUS) 2015 Total Population

514,916

2020 Population

551,136

Population Growth 2015-2020

7.03%

2015 Total Households

198,760

HH Growth 2015-2020

6.89

Median Household Income Average Household Size 2015 Average Household Vehicles Median Home Value Median Year Built

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BUSINESSES

$32,610 2.50 1 $238,083 1969

Retail & Wholesale

Retail & Wholesale

Financial/Insur/Real Estate

Financial/Insur/Real Estate

Services

Services

Information

Information

Health Care & Social Assist

Health Care & Social Assist

Manufacturing Manufacturing Construction Construction Utilities & Waste Mgmt Utilities & Waste Mgmt Public Admin & Sales Public Admin & Sales

NE ARBY ARE AS

MARKET OVERVIEW

CALLE 8

BRICKELL Brickell is Miami and South Florida’s major financial district. It is one of Miami’s fastest growing neighborhoods. As South Florida’s primary financial district, Brickell is the core of Miami’s banking, investment, and financial sectors. Additionally, alongside with Downtown Miami, Brickell has most of the state’s foreign consulates, including the consulates of Argentina, Brazil, Chile, Dominican Republic, Ecuador, France, Great Britain, Guatemala, Japan, Mexico, Netherlands, Peru, Switzerland, Trinidad and Tobago, amongst others. At the center of Brickell is Mary Brickell Village, with an assortment of restaurants, boutiques, services that create a gathering area for high-class retail and restaurants.

One of the main streets in MIami, Calle 8 (Eighth Street) is known for its cultural activities, its worldwide famous Domino Park, La Esquina de la Fama, food, cuban coffee, cigar shops and music. Calle 8 is the capital of the Cuban community in Miami. Little Havana hosts its annual Calle Ocho street festival, one of the largest in the world, with over one million visitors attending Calle Ocho alone. It is a free street festival with a Caribbean carnival feel. Viernes Culturales (English: Cultural Fridays) is an artistic, cultural, and social arts and culture fair that takes place on the last Friday of each month in the historic Little Havana neighborhood of Miami in the heart of Calle Ocho (8th St. SW between 14th and 17th Avenues).

HEALTH DISTRICT The Health District, also known as the Civic Center is the center of Miami’s medical, research and biotechnology industries, and as such is home to many of the city’s largest hospital systems. The largest is the public hospital, Jackson Memorial Hospital, which also has two branch hospitals in northern and southern Miami-Dade County. The Health District has the country’s largest concentration of medical and research facilities after Houston.

Some of the hospitals and research facilities are the University of Miami Leonard M. Miller School of Medicine, Miami Dade College Medical Campus, Bascom Palmer Eye Institute, Braman Family Breast Cancer Institute, Florida International University Wertheim College of Medicine and the Diabetes Research Institute.

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RENT COMPAR ABLES

LIT TLE HAVANA STUDIOS

80 NW 31st Ave Miami, FL 33135

Year Built RBA SF

2441 SW 27th Avenue Miami, FL 33145

1951 12,086

Asking Rent Building Tenancy

$700-$900 Multiple

Year Built

Undisclosed

Asking Rent Building Tenancy

1863 SW 11th Street Miami, FL 33135

1924

Year Built

RBA SF

5,181

RBA SF

Asking Rent

$750

Asking Rent

No. of Units

$700-$800 Multiple

2510 SW 9th Street Miami, FL 33135

Year Built

Building Tenancy

18

1959

RBA SF

Multiple 8

Building Tenancy No. of Units

1936 5,460 $725-$750 Multiple 8

2025 SW 14th Terrace Miami, FL 33145

Year Built RBA SF Asking Rent Building Tenancy

1928 Undisclosed $680-$850 Multiple

1876 sw 11th Terrace Miami, FL 33135

Year Built RBA SF

1925 11,542

Asking Rent

$680-775

Building Tenancy

Multiple

1

5

19

2

MARKET OVERVIEW

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4

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avisonyoung.com THE INFORMATION CONTAINED HEREIN WAS OBTAINED FROM SOURCES BELIEVED RELIABLE; HOWEVER, AVISON YOUNG MAKES NO GUARANTEES, WARRANTIES OR REPRESENTATIONS AS TO THE COMPLETENESS OR ACCURACY THEREOF. THE PRESENTATION OF THIS PROPERTY IS SUBMITTED SUBJECT TO ERRORS, OMISSIONS, CHANGE OF PRICE, OR CONDITIONS, PRIOR TO SALE OR LEASE, OR WITHDRAWAL WITHOUT NOTICE.