Park on 16th offering memorandum (2)

Confidential Offering Memorandum

PARK ON 16TH 1656–1658 PARK ROAD, NW WASHINGTON, D.C.

CONTENTS INVESTMENT OVERVIEW MARKET OVERVIEW RENT COMPARABLES CONDO COMPARABLES FINANCIAL ANALYSIS

PROPERTY TOUR + OFFER PROCESS Property Visitation: Prospective purchasers will be afforded the opportunity to visit the Property during prescheduled tours. Tours will include access to a representative sample of units as well as common areas. To not disturb the Property’s ongoing operations, visitation requires advance notice and scheduling.

Available Tour Dates: To schedule your tour of the Property, please contact Herbert Schwat at 202.618.3419 or hschwat@greysteel.com.

Offer Submission: Offers should be submitted in the form of a non-binding Letter of Intent to W. Kyle Tangney. Terms and conditions of Purchasers’ offer should at the minimum include: •

Offer price

•

Earnest money deposit

•

Due diligence and closing period

•

Description of Purchaser qualifications and proof of funds

LEGAL DISCLAIMERS This Confidential Offering Memorandum (“Memorandum”) is solely for the use of prospective purchasers in determining a threshold level of interest in the subject property. While the information contained in this Memorandum has been compiled from sources we believe to be reliable, neither Greysteel nor its representatives make any representations or warranties as to the accuracy or completeness of the information contained in this Memorandum. All financial information and projections are provided for reference only and are based on assumptions relating to the general economy, market conditions, and other factors beyond our control. Prospective purchasers are encouraged to conduct an independent due diligence investigation, prepare independent financial projections, and consult with their legal, tax and other professional advisors before making an investment decision. Greysteel does not have authority to legally bind the seller and no contract or agreement providing for any transaction shall be deemed to exist unless and until a final definitive contract of sale has been executed and delivered to you by the seller. This offering is subject to prior placement, withdrawal, cancellation, or modification without notice.

All references to acreage, square footage, distance, and other measurements are approximations and must be independently verified.

TRANSACTION TEAM

CAPITAL MARKETS

W. Kyle Tangney Senior Director

Rawles M. Wilcox Director

Alicia Orkisz Investment Associate

Herbert Schwat Jr. Investment Associate

Mark Bittenbender Director

Brittany Wismer Senior Finance Associate

Max Gross Senior Analyst

Phil Tilly Analyst

Pauline Lefebvre Production Associate

Ari Firoozabadi President

Yassi Farzaneh Production Director

Matt Schwartz CEO

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INVESTMENT OVERVIEW

CONTENTS INVESTMENT OVERVIEW

8

MARKET OVERVIEW

Investment Highlights Property Overview Property Details Property Map

RENT COMPARABLES

Transit Map Regional Map Employers Area Map Local Map Demographics

MARKET OVERVIEW

2

RENT COMPARABLES CONDO COMPARABLES FINANCIAL ANALYSIS Unit Mix Notes + Assumptions Historical/Projected Income + Expenses 10-Year Cash Flow

© 2016 The Greysteel Company LLC. All rights reserved.

FINANCIAL ANALYSIS

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CONDO COMPARABLES

20 28 34 COLUMBIA HEIGHTS METRO STATION (0.4 MILES)

CONTENTS

1

CONTENTS

INVESTMENT OVERVIEW Investment Highlights Property Overview Property Details Property Map

FINANCIAL ANALYSIS

CONDO COMPARABLES

RENT COMPARABLES

MARKET OVERVIEW

INVESTMENT OVERVIEW

2

© 2016 The Greysteel Company LLC. All rights reserved.

INVESTMENT OVERVIEW

MARKET OVERVIEW

RENT COMPARABLES

CONDO COMPARABLES

FINANCIAL ANALYSIS © 2016 The Greysteel Company LLC. All rights reserved.

CONTENTS 3

CONTENTS INVESTMENT OVERVIEW MARKET OVERVIEW RENT COMPARABLES CONDO COMPARABLES FINANCIAL ANALYSIS

4

INVESTMENT HIGHLIGHTS Development Potential

Hot Residential Market

Fantastic Location

Zoned R-5-B in the historic overlay of Park Road NW-South Side, Park on 16th has the potential for a rear building expansion. The historic overlay does not allow for height or Park Road façade modifications, but additional square footage provides an opportunity for increased rental revenue or higher condo out-sales.

Located in one of D.C.’s premier residential neighborhoods, Park on 16th presents an attractive condo out-sale opportunity. As the Property units are owned as fee simple condominiums, certain soft costs and taxes will be minimized or eliminated.

The residential market in Mount Pleasant is very active, with marketed condominium units closing at or above asking prices that regularly approach $700 per square foot. While the neighborhood has traditionally commanded strong prices, demand for housing in the area over the past few years has continued to far exceed supply.

Mount Pleasant draws residents seeking a walkable lifestyle near award winning restaurants, international shops, and nightlife. Park on 16th is conveniently located within walking distance of three corridors of diverse retail, dining, and entertainment options in Mount Pleasant, along 14th Street, NW and in Columbia Heights. In addition, residents have easy access to major employers and top-tier universities in Washington, D.C. via major bus routes less than a block away and the Green and Yellow lines’ Columbia Heights Metrorail station within walking distance.

Value-Add Opportunity Park on 16th presents a significant value-add opportunity in the popular Mount Pleasant neighborhood of Northwest Washington, D.C. With current rents averaging $1,117 and market comparables achieving upwards of 50% higher average rents, this impressive asset near the 16th Street Corridor has significant upside rent potential.

Current ownership claims D.C. rent control exemption based on a building reconfiguration that took place after 1980. As such, new ownership has the luxury of operating Park on 16th as either a rental or conversion, as the Property is already deeded as 12 separate condominium units, and units can be marked-to-market upon turnover and approach market rents through moderate unit improvements.

© 2016 The Greysteel Company LLC. All rights reserved.

SIGNIFICANT VALUE-ADD OPPORTUNITY IN THE POPULAR MOUNT PLEASANT NEIGHBORHOOD OF NORTHWEST WASHINGTON, D.C.

Financing This opportunity is being offered free-and-clear of debt, allowing new investors to take advantage of historically favorable interest rates.

moderate unit renovations that include updating appliances and bathrooms.

Pleasant neighborhood of Northwest Washington, D.C. Located at 1656 and 1658

Current ownership claims D.C. rent control exemption status under § 205(a) (2)

Park Road, NW, the Property is a three-story, 12-unit walk-up complex featuring

of the Rental Housing Act of 1985 and under § 206(a) (4) of The Rental Housing

off -street parking and modern unit conveniences in a building with historic architecture

Act of 1980. Additional income can be captured by leasing the Property’s four

and charm.

off-street parking spaces, a rare amenity that can command upwards of $150 per space

Offering a unit mix of eight one-bedroom units averaging 459 square feet and four

per month.

two-bedroom units averaging 663 square feet with a collective average rent of $1,157,

Park on 16th features a number of measured unit improvements in addition to

Park on 16th has tremendous rental upside as market comparables are achieving

upgraded building electrical panels rated 100 amps per unit. Units are supplied

50% higher average rents. New ownership can reduce the loss-to-lease by completing

heat from an electric in-unit boiler, hot water from an in-unit water heater, and all

MARKET OVERVIEW

Park on 16th offers a rare value-add opportunity in the highly desirable Mount

INVESTMENT OVERVIEW

PROPERTY OVERVIEW

CONTENTS

5

units include an in-unit stackable washer and dryer. Residents pay electricity costs ownership pays water, sewer, and trash removal. Additionally, new ownership has the luxury of operating Park on 16th as either a rental or conversion, as the Property is already deeded as 12 separate condominium units.

Rental demand in Mount Pleasant has surged in recent years and will likely increase as the surrounding submarkets of Columbia Heights and Petworth continue to increasing prominence and demand for both rental and for-sale residential product is evidenced by asking rents eclipsing $4 per square foot and average condo sales achieving upwards of $700 per square foot. Thanks to historically high property values as well as strong and consistent rents, many neighborhood owners have been reluctant to dispose of high-quality, income producing assets, resulting in very limited supply. Park on 16th presents new ownership an exciting opportunity to

CONDO COMPARABLES

develop attractive retail, dining, and entertainment options. Columbia Heights’

RENT COMPARABLES

associated with unit heat, hot water, lights, plugs, cooking, and window A/C, while

acquire a well-maintained asset in an extremely tight submarket.

FINANCIAL ANALYSIS

© 2016 The Greysteel Company LLC. All rights reserved.

PROPERTY DETAILS

INVESTMENT OVERVIEW

CONTENTS

6

Park on 16th

12

MARKET OVERVIEW RENT COMPARABLES CONDO COMPARABLES

1

units

3

building

stories

PARCEL NUMBER(S) 2608-2033

2608-2034

2608-2035

2608-2036

2608-2037

2608-2038

2608-2039

2608-2040

2608-2041

2608-2042

2608-2043

2608-2044

2608-2045

2608-2046

2608-2047

2608-2048

ZONING

YEAR BUILT

RENTABLE SF

TYPE OF OWNERSHIP

R-5-B

1907

6,322

Fee Simple Condominiums

UTILITIES Power Source

Paid By

Service Provider

Heat

Electric

Tenant

PEPCO

Cooking

Electric

Tenant

Hot Water

Electric

Tenant

Air Conditioning

Electric

Tenant

PEPCO

Lights and Plugs

Electric

Tenant

PEPCO

–

Property

DC Water

Water/Sewer

MECHANICALS

WALK SCORE ®

BIKE SCORE ®

TRANSIT SCORE ®

95

85

81

TAXES

Utility Service

FINANCIAL ANALYSIS

1656–1658 Park Road, NW • Washington, D.C. 20010

Tax Year

Total Assessed Value

Tax Rate

Taxes Paid

2015

$1,792,800

0.85%

$15,239

PEPCO

2016

$1,868,120

0.85%

$15,879

PEPCO

2017 (Proposed)

$2,331,080

0.85%

$19,814

PLUMBING

HEATING

AIR CONDITIONING

ELECTRICAL

Copper/Galvanized

Forced Air

Forced Air

Circuit Breakers (100 Amps)

CONSTRUCTION © 2016 The Greysteel Company LLC. All rights reserved.

FRAMING

EXTERIOR

ROOF

WINDOWS

PARKING

Stick Built

Brick Façade

Flat, Built Up

Double Pane

Surface

N

INVESTMENT OVERVIEW

MARKET OVERVIEW

W et, N Stre

17th Stre et, NW

nt easa nt Pl Mou

RENT COMPARABLES

,N

W oad kR Par

CONDO COMPARABLES

FINANCIAL ANALYSIS © 2016 The Greysteel Company LLC. All rights reserved.

PROPERTY MAP

CONTENTS 7

CONTENTS FINANCIAL ANALYSIS

CONDO COMPARABLES

RENT COMPARABLES

MARKET OVERVIEW

INVESTMENT OVERVIEW

8

MARKET OVERVIEW Transit Map Regional Map Employers Neighborhood Map Local Map Demographics

© 2016 The Greysteel Company LLC. All rights reserved.

INVESTMENT OVERVIEW

MARKET OVERVIEW

RENT COMPARABLES

CONDO COMPARABLES

FINANCIAL ANALYSIS © 2016 The Greysteel Company LLC. All rights reserved.

DC USA (0.4 MILES)

CONTENTS 9

CONTENTS INVESTMENT OVERVIEW MARKET OVERVIEW RENT COMPARABLES CONDO COMPARABLES FINANCIAL ANALYSIS

10

DEVELOPMENT DC USA (0.4 Miles). Located in the heart of Columbia Heights, DC USA is one of the largest retail developments in the District. Built by Grid Properties in 2008, the $145 million project played an integral part of the broad revitalization plan for the neighborhood.

Anchored by Best Buy, Bed Bath & Beyond, Marshall’s, and D.C.’s only Target store, DC USA offers more than 890,000 square feet of retail space and over 1,000 underground parking spaces. Situated across from the Columbia Heights Metro Station, the pedestrianfriendly complex serves 36,000 residents within a 10-minute walk and over 330,000 D.C. residents living within a three-mile radius.

Digital DC (0.7 Miles). A recently announced economic development initiative will create a high technology corridor in the District. Spanning several blocks along Georgia Avenue from Kansas Avenue south to New York Avenue, the city-sponsored venture fund would provide grants from between $25,000 to $250,000 to startup companies who establish an office in the zone. The initiative is expected to create thousands of new jobs, generate millions of dollars in tax revenue for the city, and drive area economic growth. Digital D.C. will also develop the District’s tech industry and diversify the city’s economy. The rapidly developing corridor, which follows the Green line from the Petworth to the Mount Vernon Metro Stations, is increasingly attractive to young, highly educated residents. As new technology companies begin to open in the area, residential, commercial, and retail developments will follow.

Adams Morgan Historic Hotel (0.9 Miles). Development recently started on the site of the 100-year-old First Church of Christ on Euclid Street, NW. Initiated by New York-based developer Slydell Group, the 220-room boutique hotel will become a full-service hotel in the heart of the Adams Morgan neighborhood of Washington, D.C. The project consists of a newly constructed building, the restoration of a historic church, the creation of dynamic public spaces, and the opening of a new restaurant, an effort including renowned chefs Spike Gjerde and Erik Bruner-Yang. The hotel will celebrate and build-upon the diversity, culture, and character of the vibrant D.C. neighborhood.

14th Street Corridor (1.3 Miles). The 14th Street Corridor, running between P and U Streets in Northwest D.C., has become one of the hottest locations in the city for gourmet dining, shopping, and nightlife. The corridor features an array of award-winning eateries, trendy bars, and bistros like Masa 14, Pearl Dive Oyster Palace, and Churchkey. Restaurants such as Le Diplomate, Barcelona, Estadio, Doi Moi, and Birch & Barley are just a few in the area named as Washingtonian Magazine’s “100 Very Best Restaurants 2014.” In addition, the 14th Street Corridor is home to fashionable boutique stores like Mitchell Gold + Bob Williams, West Elm, Room & Board, and a Trader Joe’s grocery.

CityCenterDC (2.3 Miles). CityCenterDC is currently being developed on the 10-acre site of the old Convention Center in Downtown Washington, D.C. The completed Phase I

© 2016 The Greysteel Company LLC. All rights reserved.

of the project is a pedestrian-friendly neighborhood consisting of over 185,000 square feet of retail space along the base of six buildings with more than 458 luxury multifamily apartments and 216 condominium units. The Hines development also includes approximately 1,500 below-grade parking spaces as well as almost an acre of public space.

Upon full buildout, CityCenterDC will introduce more than 60 restaurants, shops, and cafés to the area comprised of a mix of local, national, and global brands. The current roster of tenants includes the likes of Louis Vuitton, Herme’s, Vince, Momofuku, and Del Frisco Double Eagle Steakhouse. With an anticipated completion date of early 2018, Phase II will bring an added 110,000 square feet of retail space, along with a 350-room hotel, a public park, and a large central plaza.

The Parks at Walter Reed (5.6 Miles). The Walter Reed Local Redevelopment Authority has selected the team of Hines, Urban Atlantic, and Triden to lead the redevelopment of the historic Walter Reed Army Medical Center, situated on 66.57 acres in Northwest Washington, D.C. The project will feature about three million square feet of new and renovated mixed use space, 250,000 square feet of retail space, 2,000 residential units, a Hyatt hotel and conference center, and about 20 acres of open green space. It will be anchored by an “Innovation Core” comprising the medical research department of George Washington University, the economic development programs of MIT, and various biomedical and pharmaceutical companies. The redevelopment is expected to bring in more than $1 billion of direct investment to the area, creating about 6,000 new jobs and driving economic growth for small and local businesses.

EMPLOYMENT

MedStar Washington Hospital Center (1.6 Miles). The largest healthcare provider in Washington, D.C., MedStar Health is a $4.4 billion non-profit system with a network of 10 hospitals and 20 health-related businesses spread out across the Greater Washington Metropolitan Area. It is one of the region’s largest employers with nearly 30,000 associates and 5,600 affiliated physicians. MedStar Health handles more than 163,000 inpatient admissions as well as an additional two million outpatient visits every year. Its primary areas of clinical excellence include cardiology, oncology, rehabilitation, orthopedics, and trauma services. MedStar also operates assisted living and long-term care facilities.

National Geographic Society (1.9 Miles). The world-renowned publisher of the awardwinning monthly periodical National Geographic, The National Geographic Society has its corporate headquarters near Dupont Circle in the District of Columbia. Its flagship publication is released in 40 different languages and has a worldwide circulation of 6.8 million per month, 3.5 million of which is United States-based. The society counts among the largest nonprofit scientific and educational institutions in the world, and is associated

International Monetary Fund (2.4 Miles). The International Monetary Fund (IMF) is an organization of 188 countries working together to implement global monetary cooperation, facilitate international trade, promote sustainable growth, and reduce poverty around the world. The IMF tracks global economic trends and performance, and provides policy advice in addition to financing for governments and central banks of member countries, particularly during times of economic difficulty. The IMF currently employs more than 2,400 staff across nine functional divisions at its headquarters in Washington, D.C.

George Washington University (2.8 Miles). George Washington University is one of the largest private coeducational research universities in the country. Located in the heart of Washington, D.C., the main campus in Foggy Bottom encompasses more than 43 acres and is situated just a few blocks away from the White House, the World Bank, the IMF, and the National Mall. The university itself is organized around 10 schools and colleges, including the Columbian College of Arts and Sciences, the Trachtenberg School of Public Policy and Public Administration, the School of Medicine and Health Sciences, and the George Washington University Law School. Together, it serves more than 9,700 undergraduates studying in 87 majors with study abroad programs in 50 countries.

SCHOOLS

The Property is just steps away from a host of transportation options. The 42 bus route runs along Mount Pleasant Street south to McPherson Square, and sees an average weekday ridership of 7,700 people. The crosstown H4 bus route sees approximately 7,000 daily riders and runs east along Park Road to the Brookland-CUA metro station, and west to Cleveland Park. The Property is also served by multiple Metrorail stops at Columbia Heights, U Street, and Georgia Avenue along the Green and Yellow line.

The Green and Yellow lines connects the Property to Union Station, Washington, D.C.’s primary transit hub, offering regional Amtrak, MARC, and VRE commuter rail services as well as access to the Metrorail and Metrobus systems. Commuters also benefit from a wealth of local thoroughfares, including 16th Street, NW, 14th Street NW, Georgia Avenue, and Connecticut Avenue that connect to Downtown D.C. and the Greater Washington Metropolitan Area.

© 2016 The Greysteel Company LLC. All rights reserved.

FINANCIAL ANALYSIS

Howard University (1.2 Miles). Playing an important role in American History and the Civil Rights Movement, Howard University is a private, nonsectarian college situated on 256 acres in Northwest Washington, D.C. In addition to a strong undergraduate program, the university is also renowned for graduate programs in business, law, dentistry,

TRANSIT

CONDO COMPARABLES

National Public Radio (3.5 Miles). National Public Radio (NPR) is a privately and publicly funded non profit media organization that syndicates a wide network of over 900 public radio stations in the United States. Since its first broadcast in 1971, NPR and its contributors have won hundreds of awards including 31 Alfred I. Dupont-Columbia University Awards and 62 George Foster Peabody Awards. NPR’s flagship programs Morning Edition and All Things Considered are staples of America’s airwaves, ranking #3 and #4 in nationwide radio ratings, and an estimated 21 million listeners tune into NPR each week. Today, NPR employs over 800 persons and, in April 2013, NPR moved its headquarters of 19 years at 635 Massachusetts Avenue, NW to 1111 North Capital Street, NE in the heart of the burgeoning NoMa neighborhood of D.C.

Georgetown University (3.4 Miles). Founded in 1789, Georgetown University is the oldest Jesuit and Catholic University in the United States. Its main campus is located in Washington, D.C.’s historic Georgetown neighborhood. Originally started by America’s first Catholic Bishop, the school now serves over 7,000 undergraduate and 8,000 graduate students from over 130 countries and a wide range of religious, ethnic, and geographic backgrounds. Georgetown University is ranked among the Top 20 schools in the country, according to U.S. News and World Report, and its renowned law school is among the Top 15. The school also boasts world-class graduate programs in business, medicine, and public policy.

RENT COMPARABLES

Departments of Commerce (2.9 Miles). The Department of Commerce (DOC) headquarted in Downtown Washington, D.C. in the historic Herbert C. Hoover Building.

The building encompasses about 1.8 million square feet of office space and is home to approximately 4,000 federal employees. The DOC’s mission is to promote economic growth, sustainable development, and higher standards of living through cooperation with businesses, universities, and communities. Specifically, the DOC gathers economic and demographic data for business and government decision-making, issues patents and trademarks, helps set industrial standards, and manages and monitors the nation’s resources.

MARKET OVERVIEW

pharmacy, and divinity. It hosts more than 10,500 students in 12 schools and over 120 areas of study. The school is also home to the Howard University Hospital, known for its Level 1 Trauma Center and comprehensive health care facilities serving the Washington, D.C. Metropolitan Area.

INVESTMENT OVERVIEW

with geography, archaeology, the natural sciences, the study of world culture and history, and the promotion of environmental and historical conservation. With a workforce of approximately 1,850, the society represents one of the largest nonprofit employers in the District.

CONTENTS

11

CONTENTS INVESTMENT OVERVIEW MARKET OVERVIEW RENT COMPARABLES CONDO COMPARABLES FINANCIAL ANALYSIS

12

MCMILLAN SAND FILTRATION SITE (1.3 MILES) The first phase of redevelopment of the 25-acre former McMillan Sand Filtration Site was approved by the D.C. Zoning Commission in September 2014. Located between First Street and North Capitol Street in Northwest, D.C., and bounded by Michigan Avenue and Channing Street to the north and south, the former city water purification facility will be transformed into a visionary mixed-use development through a partnership between EYA, Jair Lynch Development Partners, and Trammell Crow Company.

The redevelopment plan consists of 146 townhomes and 531 apartments. At least 20% of the total housing units will be designated as affordable and reserved for households making between 50% and 80% of the average area median income (AMI). The commercial portion of the project will feature approximately one million square feet of healthcare facilities, a 50,000-square-foot full-service grocery store, and 30,000 square feet of neighborhood retail space. The redevelopment will also provide area residents full access to a variety of state-of-the-art community spaces, the showcase of which will be a 17,000-square-foot community center offering a swimming pool, fitness center, multi-purpose rooms, gallery space, and a connection to a preserved underground filter bed. Other community amenities include an eight-acre Central Park, two acres of open space for the Healing Gardens, and the Olmsted Walk, which runs around the perimeter of the site.

The McMillan redevelopment will preserve all of the above-ground historic buildings, including all 20 of the facility’s distinctive sand bin silos and all four regulator houses. Additionally, three of the historic corner stairs and the Olmsted Walk will be restored. The project will be certified LEED Gold for neighborhood development by implementing a number of low-impact development tools such as green roofing, rain gardens, ample tree cover, and on-site storm water reuse and recycling. The economic benefits of the new McMillan development will be far reaching as well, creating an estimated 3,000 new construction jobs during site development and about 3,200 permanent jobs after completion. The project is expected to generate about $1.2 billion in new tax revenues for the District over the next 30 years.

Š 2016 The Greysteel Company LLC. All rights reserved.

MCMILLAN SAND FILTRATION SITE RENDERINGS

INVESTMENT OVERVIEW

ARMED FORCES RETIREMENT HOME (1.4 MILES)

MARKET OVERVIEW

Located between North Capitol Street to the east, Rock Creek Church Road and Park Place to the west, and Irving Street to the south, the Armed Forces Retirement Home (AFRH) is the nation’s oldest continually operated retirement home for enlisted military personnel. The facility is situated on 272 acres in Northwest Washington, D.C. and surrounded on all sides by the emerging neighborhoods of Petworth, Brookland, Columbia Heights, and Fort Totten. In 2002, Congress authorized the AFRH to develop large portions of its campus’ underutilized land to provide new sources of revenue to support the struggling institution.

RENT COMPARABLES

The AFRH has identified approximately 80 acres on the southeast portion of the campus for private-sector development. An approved master plan was completed in 2008 and endorsed by the National Capital Planning Commission (NCPC). The master plan will create a uniquely sustainable and walkable community of semiurban character, featuring over 4.3 million square feet of development comprised of residential housing, offices, medical facilities, active retail districts, and a hotel.

In addition, more than 20 acres of publicly accessible open space will be maintained in the form of a generous community park and other smaller-scale open spaces.

The project will potentially be larger than the planned redevelopment of the 67acre site of the former Walter Reed Army Hospital and nearly half the size of the sprawling National Harbor complex in Prince George’s County.

0 50 100

200

400m

ARMED FORCES RETIREMENT HOME MASTER PLAN

FINANCIAL ANALYSIS

© 2016 The Greysteel Company LLC. All rights reserved.

CONDO COMPARABLES

New access points for pedestrian traffic will be created along Irving Street, the southern boundary the AFRH campus. Plans also call for the extension of First Street, with the addition of retail on both sides, anchored by a grocery store.

First Street, NW will also serve as the development’s retail hub, and amenity for the patients, visitors, and employees of the nearby Washington Hospital Center.

Further plans for connectivity include the above or below ground extension of Pershing Drive, east across North Capitol Street to The Catholic University of America.

CONTENTS

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CONDO COMPARABLES

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MARKET OVERVIEW

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WASHINGTON, D.C.

MAJOR EMPLOYERS: WASHINGTON, D.C. COMPANY

NO. EMPLOYED

PRODUCT/SERVICE

DISTANCE

George Washington University

10,000

Higher Education

2.8 Miles

Neuroscience Institute

6,000

Medical Services

1.6 Miles

Washington Cancer Institute

6,000

Medical Services

1.6 Miles

National Oceanic and Atmospheric Administration

5,000

Weather Agency

4.2 Miles

U.S. Federal Highway Administration

5,000

Transportation

4.3 Miles

Metropolitan Police Department

4,500

Police Department

1.0 Mile

Howard University

4,000

Higher Education

1.2 Miles

U.S. Commerce Department

4,000

Administration of General Economic Programs

2.7 Miles

Bolling Air Force Base

3,000

National Security

6.4 Miles

Children's National Medical Center

3,000

Medical Services

1.6 Miles

Sources: CareerOneStop, sponsored by the U.S. Department of Labor, Employment and Labor Administration.

© 2016 The Greysteel Company LLC. All rights reserved.

Columbia Heights Metro Station (0.4 Miles) Georgia Ave-Petworth Metro Station (0.8 Miles) Bus Lines 52, 53, 54 (0.3 Miles)

Bus Line 70 (0.8 Miles)

2

Bus Lines S1, S2, S3 (0.1 Miles) SPR

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ROA

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INVESTMENT OVERVIEW

Bus Line 63 (0.6 Miles)

MARKET OVERVIEW RENT COMPARABLES

16TH STREET, NW

1 2

CONTENTS

15

VENUE, NW

COLUMBIA ROAD, NW

CONDO COMPARABLES

SHERMAN A

1

FINANCIAL ANALYSIS

TRANSIT MAP

© 2016 The Greysteel Company LLC. All rights reserved.

WASHINGTON, D.C.

• 4 5 • 6 • 7 • 8 •

• 9

10 • 11 •

12 •

• 13 14 • 15 • 16 •

Adams Morgan (0.9 Miles) Armed Forces Retirement Home (1.4 Miles) DC USA (0.4 Miles) Fort Totten Metro Station (2.4 Miles) Fort Totten Park (2.1 Miles) Georgia Ave-Petworth Metro Station (0.8 Miles) Howard University (1.2 Miles) McMillan Sand Filtration Site (1.3 Miles) MedStar Health Washington Hospital Center (1.6 Miles) Smithsonian National Zoological Park (0.7 Miles) The Catholic University of America (2.1 Miles) Theodore Roosevelt Senior High School (0.9 Miles) Trinity Washington University (1.9 Miles) U Street Corridor (1.2 Miles) Veterans Affairs Medical Center (1.6 Miles) Walmart Supercenter (2.2 Miles)

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ARMED FORCES RETIREMENT HOME

29

G

STREET, NW

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15

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EN

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AREA MAP

© 2016 The Greysteel Company LLC. All rights reserved.

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WASHINGTON, D.C.

N. CAPITOL STREET, NW

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FINANCIAL ANALYSIS

URI

NW

• 3

MARYLAND

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INVESTMENT OVERVIEW

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MARKET OVERVIEW

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16TH STREET, NW

CONTENTS

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3 4 5 6

9 10 11 12 13

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3 LOCAL MAP

© 2016 The Greysteel Company LLC. All rights reserved.

FINANCIAL ANALYSIS

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Sportsman’s Wine & Liquors (less than 0.1 Miles) Old School Hardware (0.1 Miles) Zabver Thai (0.1 Miles) The Raven Grill (0.3 Miles) Lezo’s Taqueria (0.1 Miles)

5 15

18

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OTIS PLACE, NW

CONDO COMPARABLES

18 19 20 21

1

12

RENT COMPARABLES

14 15

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MARKET OVERVIEW

7 8

Black Lion Market (0.3 Miles) Columbia Heights Civic Center (0.3 Miles) Columbia Heights Metro Station (0.4 Miles) DC USA (0.4 Miles) El Atardecer (0.3 Miles) Exxon Gas Station (0.3 Miles) Giant Food (0.3 Miles) Le Caprice DC Café Bakery (0.3 Miles) Ogden Market (0.3 Miles) Papa John’s Pizza (0.3 Miles) Pho 14 (0.2 Miles) Pho Viet (0.4 Miles) Sticky Finger Sweets & Eats (0.4 Miles) Subway (0.3 Miles) Taqueria Distrito Federal (0.3 Miles) Target (0.4 Miles) Thip Khao (0.3 Miles) Thrive DC (0.2 Miles) Tivoli Theatre (0.3 Miles) Zebra Bar (0.3 Miles) Tense Yoga Studio

INVESTMENT OVERVIEW

1 2

13TH STREET, NW

9

CONTENTS

17

CONTENTS

18

DEMOGRAPHIC + INCOME PROFILE REPORT

CONDO COMPARABLES

RENT COMPARABLES

MARKET OVERVIEW

INVESTMENT OVERVIEW

THREE-MILE RADIUS SUMMARY

FINANCIAL ANALYSIS

2010

2015

2020

Population

343,293

365,578

394,735

Households

158,133

170,602

185,705

Families

56,004

59,822

64,504

Average Household Size

1.99

1.97

1.97

Owner Occupied Housing Units

66,151

70,696

76,535

Renter Occupied Housing Units

91,982

99,906

109,170

33.2

34.0

34.7

TRENDS 2015 – 2020 ANNUAL RATE

AREA

STATE

NATIONAL

Population

1.55%

1.47%

0.75%

Households

1.71%

1.62%

0.77%

Families

1.52%

1.40%

0.69%

Owner Households

1.60%

1.52%

0.70%

Median Household Income

2.60%

3.16%

2.66%

Median Age

INCOME

2015

2020

Median Household Income

$81,061

$92,151

Average Household Income

$114,047

$130,802

Per Capita Income

$53,780

$62,103

Data Note: Income is expressed in current dollars.

Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and 2020.

DISTRICT OF COLUMBIA PUBLIC SCHOOLS SCHOOL LEVEL Elementary School

NAME OF SCHOOL

DISTANCE FROM PROPERTY

Bancroft Elementary School

0.2 Miles

Middle School

Columbia Heights Education Campus

0.2 Miles

High School

Theodore Roosevelt Senior High School

0.9 Miles

DISTRICT OF COLUMBIA PRIVATE SCHOOLS SCHOOL LEVEL Elementary–Middle School High School

© 2016 The Greysteel Company LLC. All rights reserved.

NAME OF SCHOOL

DISTANCE FROM PROPERTY

Preparatory School of DC

1.5 Miles

Emerson Preparatory School

1.6 Miles

THREE-MILE RADIUS HOUSING UNITS BY UNITS IN STRUCTURE

174,702

100.0%

Total

174,373

100.0%

Occupied Housing Units

158,133

90.5%

1, detached

15,879

9.1%

1, attached

39,902

22.9%

7,084

4.1%

2

4,310

2.5%

523

0.3%

3 or 4

9,240

5.3%

1,780

1.0%

5 to 9

6,824

3.95

620

0.4%

10 to 19

12,199

7.0%

20 to 49

21,479

12.3%

50 or more

64,346

36.9%

59

-

Vacant Housing Units For Rent Rented, not Occupied For Sale Only Sold, not Occupied For Seasonal/Recreational/ Occasional Use

2,826

1.6%

Other Vacant*

3,729

2.1%

Total Vacancy Rate

9.5%

-

Total

Total

158,133

100.0%

Owner Occupied

66,151

41.8%

Owned with a Mortgage/Loan

53,298

33.7%

Owned Free and Clear

12,853

8.1%

Average Household Size

2.15

-

91,982

58.2%

1.88

-

Renter Occupied Average Household Size

* As defined by the U.S. Census Bureau the category of Other Vacant is used—“If a vacant unit does not fall into any of the classifications specified above, it is classified as ‘other vacant’. For example, this category includes units held for occupancy by a caretaker or janitor, and units held for personal reasons of the owner.”

100.0%

929

0.5%

Built 2000 to 2004

14,856

8.5%

Built 1990 to 1999

5,118

2.9%

Built 1980 to 1989

7,715

4.4%

Built 1970 to 1979

11,934

6.8%

Built 1960 to 1969

16,400

9.4%

Built 1950 to 1959

23,504

13.5%

Built 1940 to 1949

23,745

13.6%

Built 1939 or earlier

70,170

40.2%

1947

-

Median Year Structure Built

Source: U.S. Census Bureau, 2005-2009 American Community Survey

FINANCIAL ANALYSIS

© 2016 The Greysteel Company LLC. All rights reserved.

CONDO COMPARABLES

Source: U.S. Census Bureau, Census 2010 Summary File 1

174,373

Built 2005 or later

RENT COMPARABLES

HOUSEHOLDS BY TENURE AND MORTGAGE STATUS

Mobile home

HOUSING UNITS BY YEAR STRUCTURE BUILT

MARKET OVERVIEW

Total

INVESTMENT OVERVIEW

THREE-MILE RADIUS TOTAL HOUSING UNITS BY OCCUPANCY

CONTENTS

19

CONTENTS FINANCIAL ANALYSIS

CONDO COMPARABLES

RENT COMPARABLES

MARKET OVERVIEW

INVESTMENT OVERVIEW

20

RENT COMPARABLES 1630 Park Park Hill The Yorkshire Park Regent Park Crescent

© 2016 The Greysteel Company LLC. All rights reserved.

INVESTMENT OVERVIEW

MARKET OVERVIEW

RENT COMPARABLES

CONDO COMPARABLES

FINANCIAL ANALYSIS © 2016 The Greysteel Company LLC. All rights reserved.

ADAMS MORGAN (0.9 MILES)

CONTENTS 21

CONTENTS

22

INVESTMENT OVERVIEW

3

1

2

LAMONT STREET, NW

PA

RENT COMPARABLES

MARKET OVERVIEW

RK

CONDO COMPARABLES

IRVING STREET, NW

RO

AD

,N

W

16TH STREET, NW

FINANCIAL ANALYSIS

14TH STREET, NW

4

1 1630 Park (<0.1 Miles) 2 Park Hill (0.1 Miles) 3 The Yorkshire (0.1 Miles)

5 © 2016 The Greysteel Company LLC. All rights reserved.

4 Park Regent (0.1 Miles) 5 Park Crescent (0.4 Miles)

INVESTMENT OVERVIEW

MARKET OVERVIEW

RENT COMPARABLES

CONDO COMPARABLES

FINANCIAL ANALYSIS © 2016 The Greysteel Company LLC. All rights reserved.

CONTENTS 23

CONTENTS INVESTMENT OVERVIEW MARKET OVERVIEW RENT COMPARABLES CONDO COMPARABLES FINANCIAL ANALYSIS

24

SORTED BY UTILITY ADJUSTED RENT 1 Bedroom/1 Bathroom PROPERTY

YEAR BUILT

NO. OF UNITS

SQUARE FOOTAGE

ASKING RENT

UTILITY ADJUSTED RENT

UTILITY ADJUSTED RENT PER SQUARE FOOT

OCCUPANCY RATE

DISTANCE FROM SUBJECT (MILES)

1630 Park

1927

10

682

$1,870

$1,870

$2.74

100%

<0.1

Park Regent

1910

12

660

$1,800

$1,847

$2.80

98%

0.1

Park Crescent

1938

45

680

$1,650

$1,801

$2.65

100%

0.4

Park Hill

1941

64

532

$1,600

$1,600

$3.01

93%

0.1

The Yorkshire

1942

32

529

$1,600

$1,600

$3.02

100%

0.1

Park on 16th*

1907

8

459

$981

$1,124

$2.45

83%

-

Averages

1928

29

585

$1,614

$1,664

$2.85

96%

0.1

PROPERTY

YEAR BUILT

NO. OF UNITS

SQUARE FOOTAGE

ASKING RENT

UTILITY ADJUSTED RENT

UTILITY ADJUSTED RENT PER SQUARE FOOT

OCCUPANCY RATE

DISTANCE FROM SUBJECT (MILES)

1630 Park

1927

5

1,020

$2,725

$2,725

$2.67

100%

<0.1

Park Regent

1910

3

940

$2,500

$2,560

$2.72

98%

0.1

Park Crescent

1938

11

1,090

$2,200

$2,394

$2.20

100%

0.4

Park on 16th*

1907

4

663

$1,570

$1,745

$2.63

83%

-

Averages

1928

6

981

$2,244

$2,375

$2.42

96%

0.1

2 Bedroom/1 Bathroom

Notes: *Reflects in-place rents at the subject property.

1. This Rent Survey was completed in May 2016.

2. Utility adjusted rent is based upon HUD prescribed values for the various utilities and which utilities residents pay for. The HUD table may be provided upon request.

3. For properties that were non-cooperative during the rent survey, property data was obtained from Yardi Matrix.

© 2016 The Greysteel Company LLC. All rights reserved.

INVESTMENT OVERVIEW

SORTED BY UTILITY ADJUSTED RENT PER SQUARE FOOT 1 Bedroom/1 Bathroom NO. OF UNITS

SQUARE FOOTAGE

ASKING RENT

UTILITY ADJUSTED RENT

UTILITY ADJUSTED RENT PER SQUARE FOOT

OCCUPANCY RATE

DISTANCE FROM SUBJECT (MILES)

The Yorkshire

1942

32

529

$1,600

$1,600

$3.02

100%

0.1

Park Hill

1941

64

532

$1,600

$1,600

$3.01

93%

0.1

Park Regent

1910

12

660

$1,800

$1,847

$2.80

98%

0.1

1630 Park

1927

10

682

$1,870

$1,870

$2.74

100%

<0.1

Park Crescent

1938

45

680

$1,650

$1,801

$2.65

100%

0.4

8

459

$981

$1,124

$2.45

83%

-

1928

29

585

$1,614

$1,664

$2.85

96%

0.1

YEAR BUILT

NO. OF UNITS

SQUARE FOOTAGE

ASKING RENT

UTILITY ADJUSTED RENT

UTILITY ADJUSTED RENT PER SQUARE FOOT

OCCUPANCY RATE

DISTANCE FROM SUBJECT (MILES)

Park Regent

1910

3

940

$2,500

$2,560

$2.72

98%

0.1

1630 Park

1927

5

1020

$2,725

$2,725

$2.67

100%

<0.1

Park on 16th*

1907

4

663

$1,570

$1,745

$2.63

83%

-

Park Crescent

1938

11

1090

$2,200

$2,394

$2.20

100%

0.4

Averages

1928

6

981

$2,244

$2,375

$2.42

96%

0.1

2 Bedroom/1 Bathroom PROPERTY

Notes: *Reflects in-place rents at the subject property.

1. This Rent Survey was completed in May 2016.

2. Utility adjusted rent is based upon HUD prescribed values for the various utilities and which utilities residents pay for. The HUD table may be provided upon request.

3. For properties that were non-cooperative during the rent survey, property data was obtained from Yardi Matrix.

FINANCIAL ANALYSIS

© 2016 The Greysteel Company LLC. All rights reserved.

CONDO COMPARABLES

1907

Averages

RENT COMPARABLES

Park on 16th*

MARKET OVERVIEW

YEAR BUILT

PROPERTY

CONTENTS

25

CONTENTS

Park on 16th 1656–1658 Park Road, NW Washington, D.C. 20010

SUBJECT PROPERTY No. of Units:

12

Occupancy:

83%

Year Built:

1907

FINANCIAL ANALYSIS

EFFECTIVE RENT

UTILITY ADJUSTED RENT

UTILITY ADJUSTED RENT PER SF

459

$981

$1,124

$2.45

663

$1,570

$1,745

$2.63

527

$1,177

$1,331

$2.53

UNIT TYPE

UNITS

SF

1 BDR/1 BA

8

2 BDR/1 BA

4

Totals/Avg

12

• • • •

Residents pay for gas, electric, and trash removal; property pays for water.

Unit amenities include a washer/dryer.

Management sets rent levels.

Professionally managed by Barac Company.

1630 Park 1630 Park Road, NW Washington, D.C. 20010 UNITS

SF

ASKING RENT

UTILITY ADJUSTED RENT

UTILITY ADJUSTED RENT PER SF

EFF

35

486

$1,525

$1,525

$3.14

1 BDR/1 BA

10

682

$1,870

$1,870

$2.74

2 BDR/1 BA

5

1,020

$2,725

$2,725

$2.67

Totals/Avg

50

579

$1,714

$1,714

$2.96

UNIT TYPE

1 No. of Units: Occupancy:

50 100%

Year Built:

1927

CONDO COMPARABLES

RENT COMPARABLES

MARKET OVERVIEW

INVESTMENT OVERVIEW

26

• • • • •

Residents pay a $50 application fee and a security deposit ranging from $300 up to one month’s rent.

Additional fees include a non-refundable pet deposit of $100.

Property pays for all utilities.

Management sets rent levels per D.C. rent control guidelines.

Professionally managed by Bernstein Management.

Park Hill 1610 Park Road, NW Washington, D.C. 20010 UNITS

SF

ASKING RENT

UTILITY ADJUSTED RENT

UTILITY ADJUSTED RENT PER SF

EFF

46

408

$1,499

$1,499

$3.67

1 BDR/1 BA

64

532

$1,600

$1,600

$3.01

Totals/Avg

110

480

$1,558

$1,558

$3.24

UNIT TYPE

2 No. of Units:

110

Occupancy:

93%

Year Built:

1941

© 2016 The Greysteel Company LLC. All rights reserved.

• • • • •

Residents pay a $50 application fee and a $250 security deposit.

Additional fees include a non-refundable pet deposit of $500.

Property pays for all utilities.

Management sets rent levels per D.C. rent control guidelines.

Professionally managed by Lenkin Company.

The Yorkshire 3355 16th Street, NW Washington, D.C. 20010 UNIT TYPE

No. of Units: Occupancy: Year Built:

96 100% 1942

SF

ASKING RENT

UTILITY ADJUSTED RENT

UTILITY ADJUSTED RENT PER SF $3.49

64

429

$1,499

$1,499

32

529

$1,600

$1,600

$3.02

Totals/Avg

96

462

$1,533

$1,533

$3.32

ASKING RENT

UTILITY ADJUSTED RENT

UTILITY ADJUSTED RENT PER SF

• • • • • • •

Residents pay a $50 application fee and a $250 security deposit.

Additional fees include a non-refundable pet deposit of $500.

Property pays for all utilities.

Common area amenities include on-site laundry facilities and bike storage.

Unit amenities include hardwood floors and granite countertops.

Management sets rent levels per D.C. rent control guidelines.

Professionally managed by Lenkin Company.

Park Regent 1701 Park Road, NW Washington, D.C. 20010 UNIT TYPE

No. of Units:

96

Occupancy:

98%

Year Built:

1910

SF

81

430

$1,350

$1,383

$3.22

12

660

$1,800

$1,847

$2.80

2 BDR/1 BA

3

940

$2,500

$2,560

$2.72

Totals/Avg

96

475

$1,442

$1,478

$3.11

ASKING RENT

UTILITY ADJUSTED RENT

UTILITY ADJUSTED RENT PER SF

• • • •

Residents pay a $50 application fee and security deposit equal to one month’s rent.

Residents pay for electric; property pays for gas, water, and trash removal.

Management sets rent levels per D.C. rent control guidelines.

Professionally managed by Fred A. Smith Company.

Park Crescent 2901 18th Street, NW Washington, D.C. 20009 UNIT TYPE

No. of Units:

87

Occupancy:

100%

Year Built:

1938

SF

EFF

31

570

$1,420

$1,527

$2.68

1 BDR/1 BA

45

680

$1,650

$1,801

$2.65

2 BDR/1 BA

11

1,090

$2,200

$2,394

$2.20

Totals/Avg

87

693

$1,638

$1,778

$2.57

• • • •

Residents pay a $45 application fee and a $350 move-in fee.

Residents pay for electric; property pays for water and trash removal.

Management sets rent levels per D.C. rent control guidelines.

Professionally managed by Borger Management.

© 2016 The Greysteel Company LLC. All rights reserved.

FINANCIAL ANALYSIS

5

UNITS

CONDO COMPARABLES

EFF 1 BDR/1 BA

RENT COMPARABLES

4

UNITS

MARKET OVERVIEW

EFF 1 BDR/1 BA

INVESTMENT OVERVIEW

3

UNITS

CONTENTS

27

CONTENTS FINANCIAL ANALYSIS

CONDO COMPARABLES

RENT COMPARABLES

MARKET OVERVIEW

INVESTMENT OVERVIEW

28

CONDO COMPARABLES 1636 Irving 1469 Harvard 1440 Columbia 1401 Columbia 1465 Columbia 1763 Columbia 1736 Columbia 1669 Columbia

© 2016 The Greysteel Company LLC. All rights reserved.

INVESTMENT OVERVIEW

MARKET OVERVIEW

RENT COMPARABLES

CONDO COMPARABLES

FINANCIAL ANALYSIS © 2016 The Greysteel Company LLC. All rights reserved.

HOWARD UNIVERSITY (1.2 MILES)

CONTENTS 29

CONTENTS

1 1636 Irving (0.4 Miles) 2 1469 Harvard (0.4 Miles) 3 1440 Columbia (0.4 Miles) 4 1401 Columbia (0.4 Miles) 5 1465 Columbia (0.4 Miles) 6 1763 Columbia (0.6 Miles) 7 1736 Columbia (0.6 Miles) 8 1669 Columbia (0.5 Miles)

MARKET OVERVIEW

16TH STREET, NW

INVESTMENT OVERVIEW

30

IRVING STREET, NW

RENT COMPARABLES

1 5

3

CONDO COMPARABLES

2 8 M

LU

CO

7 6

© 2016 The Greysteel Company LLC. All rights reserved.

A BI

RO

W

,N

AD

14TH STREET, NW

FINANCIAL ANALYSIS

4

1636 Irving Street, NW #2 Washington, D.C. 20010 $379,000

List Price

$399,900

Closing Price

$390,500

Closing Price

$417,000

Price per Square Foot

$679.13

Price per Square Foot

$621.46

Unit Size

575 SF

Unit Size

671 SF

Close of Escrow:

3/19/15

Close of Escrow:

12/12/14

Unit Type:

1 BDR/1 BA/Flat

Unit Type:

1 BDR/1 BA/Flat

Year Built:

1910

Year Built:

1910

• •

1469 Harvard Street, NW #4 Washington, D.C. 20009

• • •

Unit features ash floors, hand stained doors, and open floor plans.

Parking included in sale price.

Monthly condo fee of $252.

MARKET OVERVIEW

1469 Harvard

1469 Harvard Street, NW #5 Washington, D.C. 20009

$549,900

List Price

$589,900

Closing Price

$552,400

Closing Price

$560,000

Price per Square Foot

$670.39

Price per Square Foot

$622.22

Unit Size

824 SF

Unit Size

900 SF

Close of Escrow:

4/8/15

Close of Escrow:

8/12/15

Unit Type:

2 BDR/2 BA/Flat

Unit Type:

2 BDR/1 BA/Duplex

Year Built:

1917

Year Built:

1917

• •

Unit features wide balcony, stainless steel appliances, and indoor fireplaces.

Parking not included in sale price.

Monthly condo fee of $263.

1440 Columbia Road, NW #202 Washington, D.C. 20009

• •

Unit features wide balcony, stainless steel appliances, and indoor fireplaces.

Parking not included in sale price.

Monthly condo fee of $236.

CONDO COMPARABLES

1440 Columbia

•

1440 Columbia Road, NW #305 Washington, D.C. 20009

$435,600

List Price

$329,900

Closing Price

$435,600

Closing Price

$335,000

Price per Square Foot

$526.09

Price per Square Foot

$670.00

Unit Size

828 SF

Unit Size

500 SF

Close of Escrow:

2/19/15

Close of Escrow:

3/29/16

Unit Type:

2 BDR/1.5 BA/Flat

Unit Type:

1 BDR/1 BA/Flat

Year Built:

1915

Year Built:

1915

• •

Unit features washer/dryer in unit, granite countertops, and stainless steel appliances.

Parking not included in sale price.

Monthly condo fee of $325.

• • •

Unit features washer/dryer in unit, granite countertops, and stainless steel appliances.

Parking not included in sale price.

Monthly condo fee of $203.

© 2016 The Greysteel Company LLC. All rights reserved.

FINANCIAL ANALYSIS

List Price

•

RENT COMPARABLES

List Price

•

3

Unit features ash floors, hand stained doors, and open floor plans.

Parking not included in sale price.

Monthly condo fee of $195.

INVESTMENT OVERVIEW

List Price

•

2

1636 Irving Street, NW #3 Washington, D.C. 20010

CONTENTS

1

31

1636 Irving

4

CONDO COMPARABLES FINANCIAL ANALYSIS

1401 Columbia

1401 Columbia Road, NW #213 Washington, D.C. 20009 $429,000

List Price

$485,000

Closing Price

$429,000

Closing Price

$470,500

Price per Square Foot

$609.38

Price per Square Foot

$616.64

Unit Size

704 SF

Unit Size

763 SF

Close of Escrow:

5/29/15

Close of Escrow:

12/28/15

Unit Type:

2 BDR/1 BA/Flat

Unit Type:

2 BDR/1 BA/Flat

Year Built:

1913

Year Built:

1913

• •

5

1465 Columbia Road, NW #301 Washington, D.C. 20009

• • •

Unit features silestone countertops, maple wood cabinets, and hardwood floors.

Parking not included in sale price.

Monthly condo fee of $290.

1465 Columbia Road, NW #401 Washington, D.C. 20009

List Price

$519,900

List Price

$575,000

Closing Price

$525,000

Closing Price

$575,000

Price per Square Foot

$570.03

Price per Square Foot

$565.94

Unit Size

921 SF

Unit Size

1,016 SF

Close of Escrow:

9/25/15

Close of Escrow:

6/18/15

Unit Type:

2 BDR/2 BA/Flat

Unit Type:

2 BDR/2 BA/Flat

Year Built:

1921

Year Built/Renovated:

1921

• •

Unit features like-new cherry floors, marble baths, and granite countertops.

Parking not included in sale price.

Monthly condo fee of $364.

1763 Columbia

1763 Columbia Road, NW #301 Washington, D.C. 20009

• • •

Unit features like-new cherry floors, marble baths, and granite countertops.

Parking included in sale price.

Monthly condo fee of $377.

1763 Columbia Road, NW #404 Washington, D.C. 20009

List Price

$399,000

List Price

$299,000

Closing Price

$426,000

Closing Price

$277,900

Price per Square Foot

$532.50

Price per Square Foot

$479.14

Unit Size

800 SF

Unit Size

580 SF

Close of Escrow:

5/23/14

Close of Escrow:

6/30/14

Unit Type:

2 BDR/2 BA/Flat

Unit Type:

1 BDR/1 BA/Flat

Year Built:

1900

Year Built:

1900

• • • © 2016 The Greysteel Company LLC. All rights reserved.

Unit features silestone countertops, maple wood cabinets, and hardwood floors.

Parking not included in sale price.

Monthly condo fee of $267.

1465 Columbia

•

6

1401 Columbia Road, NW #317 Washington, D.C. 20009

List Price

•

RENT COMPARABLES

MARKET OVERVIEW

INVESTMENT OVERVIEW

CONTENTS

32

Unit features ceramic tiles, marble and granite finishes, and in-unit washer/dryer.

Parking not included in sale price.

Monthly condo fee of $294.

• • •

Unit features ceramic tiles, marble and granite finishes, and in-unit washer/dryer.

Parking not included in sale price.

Monthly condo fee of $188.

1736 Columbia Road, NW #104 Washington, D.C. 20009 $349,000

List Price

$465,000

Closing Price

$342,000

Closing Price

$469,650

Price per Square Foot

$441.29

Price per Square Foot

$361.27

Unit Size

775 SF

Unit Size

1,300 SF

Close of Escrow:

9/22/14

Close of Escrow:

7/26/15

Unit Type:

1 BDR/1 BA/Flat

Unit Type:

2 BDR/1 BA/Flat

Year Built:

1915

Year Built:

1915

• •

Unit features high ceilings, hardwood floors, and an alcove.

Parking not included in sale price.

Monthly condo fee of $492.

1669 Columbia Road, NW #416 Washington, D.C. 20009

• •

Unit features high ceilings, hardwood floors, and an alcove.

Parking not included in sale price.

Monthly condo fee of $741.

MARKET OVERVIEW

1669 Columbia

•

1669 Columbia Road, NW #311 Washington, D.C. 20009

$379,000

List Price

$385,000

Closing Price

$379,000

Closing Price

$380,000

Price per Square Foot

$360.95

Price per Square Foot

$380.00

Unit Size

1,050 SF

Unit Size

1,000 SF

Close of Escrow:

12/30/15

Close of Escrow:

9/17/14

Unit Type:

2 BDR/2 BA/Flat

Unit Type:

2 BDR/1.5 BA/Flat

Year Built:

1910

Year Built:

1910

• •

Unit features granite countertops, large windows, and custom-installed closet system.

Parking not included in sale price.

Monthly condo fee of $685.

• • •

Unit features granite countertops, large windows, and custom-installed closet system.

Parking included in sale price.

Monthly condo fee of $930.

RENT COMPARABLES

List Price

•

INVESTMENT OVERVIEW

List Price

•

8

1736 Columbia Road, NW #310 Washington, D.C. 20009

CONTENTS

7

33

1736 Columbia

CONDO COMPARABLES FINANCIAL ANALYSIS

© 2016 The Greysteel Company LLC. All rights reserved.

CONTENTS

FINANCIAL ANALYSIS Unit Mix Historical/Projected Income + Expenses 10-Year Cash Flow

FINANCIAL ANALYSIS

CONDO COMPARABLES

RENT COMPARABLES

MARKET OVERVIEW

INVESTMENT OVERVIEW

34 © 2016 The Greysteel Company LLC. All rights reserved.

CONTENTS

35

INVESTMENT OVERVIEW MARKET OVERVIEW RENT COMPARABLES CONDO COMPARABLES FINANCIAL ANALYSIS

© 2016 The Greysteel Company LLC. All rights reserved.

COLUMBIA HEIGHTS CIVIC PLAZA (0.3 MILES)

CONTENTS INVESTMENT OVERVIEW MARKET OVERVIEW

36

UNIT MIX NO. OF UNITS

RENTABLE SF

TOTAL RENTABLE SF

1 BDR/1 BA

8

459

2 BDR/1 BA

4

663

Totals / Wtd. Averages

12

527

UNIT TYPE

EFFECTIVE RENT/UNIT

EFFECTIVE RENT/SF

TOTAL EFFECTIVE RENT

MARKET RENT/UNIT

MARKET RENT/SF

TOTAL MARKET RENT POTENTIAL

3,670

$981

$2.14

$7,845

$1,600

$3.49

$12,800

2,652

$1,570

$2.37

$6,279

$2,200

$3.32

$8,800

6,322

$1,177

$2.23

$14,123

$1,800

$3.42

$21,600

UNIT MIX

UNIT RENT

FINANCIAL ANALYSIS

CONDO COMPARABLES

33% 67%

$2,500

Rent per month

RENT COMPARABLES

Two-Bedroom

$2,000 $1,500 $1,000 $500 $0 One-Bedroom

One-Bedroom

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Effective Rent

Two-Bedroom Market Rent

Gross Potential Revenue

Repairs + Maintenance

Insurance

Gross potential revenue is calculated by renovating all units in Years 1–3 and achieving market rents upon turnover, as the Property is exempt from D.C. rent control regulations. Unit turnover is estimated at 30.0% in Years 1–5 and 25.0% in Years 6–10, and the corresponding loss-to-lease decreases from an average of 13.0% in Years 1–5 to 4.75% in Years 6–10. Market rents are projected to increase 3.0% per year and occupied units are projected to increase 3.5% per year throughout the analysis.

Repairs and maintenance in Year 1 are projected to be $1,000 per unit, reflecting market averages.

Repairs and maintenance increase by 2.5% per year throughout the analysis.

Insurance in Year 1 is projected to be $350 per unit, reflecting market averages. Insurance increases by 3.0% per year throughout the analysis.

Real estate taxes reflect a 2017 total assessment value of $2,331,080 for the twelve separately deeded condominium units. The D.C. residential property tax rate is $0.85 per $100. Taxes are reset in Year 2 at the estimated purchase price and increase by 3.0% per year thereafter throughout the analysis.

Vacancy is projected to be 6.47% in Year 1, 5.78% in Year 2, and 5.08% in Year 3 to reflect downtime for unit renovations. Vacancy is projected to be 3.0% in Year 4 and thereafter throughout the analysis.

Personnel

Management Fee

Personnel in Year 1 reflects a part-time porter paid $350 per month. Personnel increase by 2.5% per year throughout the analysis.

Management fee reflects a market average of 6.0% of effective gross revenue (EGR) throughout the analysis.

Collection Loss + Bad Debt

Administrative Expenses

Reserves + Replacements

Administrative expenses in Year 1 are projected to be $400 per unit, reflecting market averages.

Administrative expenses increase by 2.5% per year throughout the analysis.

Reserves and replacements reflect a market average of $250 per unit and remain constant throughout the analysis.

Vacancy

Bad debt reflects a constant 1.0% of base rental revenue throughout the analysis.

Other Residential Income Other residential income includes four surface parking spaces renting for $150 per month.

Other residential income increase 2.5% per year throughout the analysis.

Utilities

© 2016 The Greysteel Company LLC. All rights reserved.

FINANCIAL ANALYSIS

Utilities include common area electric and water + sewer. Utilities in Year 1 are projected to be $770 per unit and increase by 3.0% per year throughout the analysis.

CONDO COMPARABLES

Contract services include trash collection and landscaping. Contract services in Year 1 are projected to be $500 per unit, reflecting market averages. Contract services increase by 2.5% per year throughout the analysis.

RENT COMPARABLES

Real Estate Taxes

MARKET OVERVIEW

Contract Services

INVESTMENT OVERVIEW

NOTES + ASSUMPTIONS

CONTENTS

37

CONTENTS

38

INVESTMENT OVERVIEW

RESERVES + REPLACEMENTS Number of Units: 12 YEAR ENDING DEC-15

END OF YEAR 1

ANNUALIZED

$/UNIT

ANNUALIZED

$/UNIT

PROJECTION

$/UNIT

$ 128,751

$ 10,729

$141,823

$11,819

$259,200

$21,600

–

–

–

–

($50,608)

($4,217)

OPERATING REVENUE Potential Market Rent (Loss-to-Lease)/Gain-to-Lease Gross Potential Revenue

MARKET OVERVIEW

T-3 ( AS OF APR-15)

$ 128,751

$ 10,729

$141,823

$11,819

$208,592

$17,383

Vacancy

–

–

–

–

($16,770)

($1,398)

Collection Loss/Bad Debt

–

–

–

–

($1,918)

($160) $15,825

Base Rental Revenue

$ 128,751

$ 10,729

$141,823

$11,819

$189,903

Other Residential Income

–

-–

–

-–

$7,200

$600

Other Income

–

–

–

–

$7,200

$600

$ 128,751

$ 10,729

$141,823

$11,819

$197,103

$16,425

Repairs + Maintenance

($21,989)

($1,832)

($9,693)

($808)

($12,000)

($1,000)

Contract Services

($6,331)

($528)

($6,096)

($508)

($6,000)

($500)

Personnel

($2,240)

($187)

($2,827)

($236)

($4,200)

($350)

Administrative Expenses

($9,877)

($823)

($4,658)

($388)

($4,800)

($400)

EFFECTIVE GROSS REVENUE

FINANCIAL ANALYSIS

CONDO COMPARABLES

RENT COMPARABLES

OPERATING EXPENSES

Electricity

($436)

($36)

($587)

($49)

($840)

($70)

Water + Sewer

($ 7,210)

($601)

($8,396)

($700)

($8,400)

($700)

Insurance

($ 2,348)

($196)

($7,645)

($637)

($4,200)

($350)

Real Estate Taxes

($1,651)

($14,295)

($1,191)

($19,967)

($1,664)

($19,814)

Personal Property Taxes

($ 816)

($68)

($1,908)

($159)

–

–

Management Fee

($7,725)

($644)

($8,531)

($711)

($11,826)

($986)

Total Operating Expenses

($73,267)

($6,106)

($70,308)

($5,859)

($72,080)

($6,007)

NET OPERATING INCOME (Before Reserves)

$55,484

$4,624

$71,515

$5,960

$125,023

$10,419

($3,000)

($250)

($3,000)

($250)

($3,000)

($250)

$52,484

$4,374

$68,515

$5,710

$122,023

$10,169

Reserves + Replacements NET OPERATING INCOME (After Reserves)

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10-YEAR CASH FLOW 2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

Potential Market Rent

$259,200

$266,976

$274,985

$283,235

$291,732

$300,484

$309,498

$318,783

$328,347

$338,197

(Loss-to-Lease)/Gain-to-Lease

($50,608)

($39,941)

($33,500)

($28,055)

($23,535)

($19,838)

($16,853)

($14,472)

($12,594)

($11,128)

Gross Potential Revenue

$208,592

$227,035

$241,486

$255,179

$268,197

$280,646

$292,645

$304,311

$315,753

$327,069

($7,770)

($8,015)

($8,240)

($8,497)

($8,752)

($9,015)

($9,285)

($9,563)

($9,850)

($10,146)

RENTAL LOSSES Collection Loss/Bad Debt

($2,467)

($2,594)

($2,716)

($2,834)

($2,947)

($3,059)

($3,169)

($244,215)

($256,851)

($268,915)

($280,527)

($291,800)

($302,844)

($313,754)

$7,200

$7,380

$7,565

$7,754

$7,947

$8,146

$8,350

$8,559

$8,773

$8,992

$197,103

$216,867

$232,806

$251,969

$264,798

$277,061

$288,876

$300,359

$311,616

$322,746

Repairs + Maintenance

($12,000)

($12,300)

($12,608)

($12,923)

($13,246)

($13,577)

($13,916)

($14,264)

($14,621)

($14,986)

Contract Services

($6,000)

($6,150)

($6,304)

($6,461)

($6,623)

($6,788)

($6,958)

($7,132)

($7,310)

($7,493)

Personnel

($4,200)

($4,305)

($4,413)

($4,523)

($4,636)

($4,752)

($4,871)

($4,992)

($5,117)

($5,245)

Administrative

($4,800)

($4,920)

($5,043)

($5,169)

($5,298)

($5,431)

($5,567)

($5,706)

($5,848)

($5,995)

Utilities

($9,240)

($9,517)

($9,803)

($10,097)

($10,400)

($10,712)

($11,033)

($11,364)

($11,705)

($12,056)

Insurance

($4,200)

($4,326)

($4,456)

($4,589)

($4,727)

($4,869)

($5,015)

($5,165)

($5,320)

($5,480)

Real Estate Taxes

($19,814)

($20,400)

($21,012)

($21,642)

($22,292)

($22,960)

($23,649)

($24,359)

($25,089)

($25,842)

Management Fee

($11,826)

($13,012)

($13,968)

($15,118)

($15,888)

($16,624)

($17,333)

($18,022)

($18,697)

($19,365)

Total Operating Expenses

($72,080)

($74,930)

($77,606)

($80,523)

($83,109)

($85,713)

($88,342)

($91,004)

($93,709)

($96,462)

$125,023

$141,937

$155,200

$171,446

$181,689

$191,349

$200,535

$209,354

$217,907

$226,284

($3,000)

($3,000)

($3,000)

($3,000)

($3,000)

($3,000)

($3,000)

($3,000)

($3,000)

($3,000)

$122,023

$138,937

$152,200

$168,446

$178,689

$188,349

$197,535

$206,354

$214,907

$223,284

OTHER INCOME EFFECTIVE GROSS REVENUE EXPENSES

NET OPERATING INCOME (BEFORE RESERVES) Reserves + Replacements NET OPERATING INCOME (AFTER RESERVES)

FINANCIAL ANALYSIS

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CONDO COMPARABLES

($2,275) ($225,241)

RENT COMPARABLES

($2,116) ($209,487)

MARKET OVERVIEW

($1,918) ($189,903)

Base Rental Revenue

INVESTMENT OVERVIEW

INCOME

Vacancy

CONTENTS

39

FINANCIAL ANALYSIS

CONDO COMPARABLES

RENT COMPARABLES

MARKET OVERVIEW

INVESTMENT OVERVIEW

CONTENTS 40

© 2016 The Greysteel Company LLC. All rights reserved.

CONTENTS

41

INVESTMENT OVERVIEW MARKET OVERVIEW RENT COMPARABLES

www.ParkOn16th.com

CONDO COMPARABLES

As market leader in real estate services, Greysteel provides their clients a complimentary web URL when marketing their property.

FINANCIAL ANALYSIS

© 2016 The Greysteel Company LLC. All rights reserved.

7735 Old Georgetown Road • Suite 301 • Bethesda, MD 20814 202.280.2722 • www.greysteel.com Los Angeles • Washington, D.C.* • Baltimore • Philadelphia • Dallas • Fort Worth DC License No: LL983371301 *Corporate Headquarters and Transaction Services Center

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