Hawthorne Hall Offering Memorandum

H A W T H O R N E H A L L A P A R T M E N T S O F F E R I N G M E M O R A N D U M

3505 CHAMBERLAYNE AVENUE RICHMOND, VA

ONE SOUTH COMMERCIAL

YOUR NEEDS. OUR SKILLS. ONE SOUTH.

Jerry Ford I

Multi-Family Sales Specialist 804.840.4628 jerry.ford@onesouthrealty.com

Tom Rosman I

Associate Broker + Partner 804.539.3017 tom.rosman@onesouthrealty.com

2314 WEST MAIN STREET | RICHMOND, VIRGINIA 23220 | ONESOUTHCOMMERCIAL.COM | COMMERCIAL@ONESOUTHREALTY.COM | 804.353.0009 [O] | 804.353.0991 [F]

D I S C L O S U R E

One South Commercial is the exclusive representative of Seller in the sale of Hawthorne Hall Apartments located at 3505 Chamberlayne Avenue in Richmond, VA and further described herein. All inquiries or requests related to the sale should be directed to listing agents at One South Commercial. The subject property is being offered on an AS-IS/WHERE-IS basis and Seller, One South Commercial, and its agents expressly disclaim any representations or warranties of any kind or nature, express or implied, with respect to the subject property. Seller and certain other sources deemed reliable have provided One South Commercial information pertaining to the subject property that may be distributed from time to time to a prospective purchaser. All such materials shall be for informational purposes only and shall not be relied upon by a prospective purchaser as to the quality, nature, adequacy, or legal status of the property. By accepting such information, the recipient acknowledges and understands that Seller, One South Commercial, and its agents, shall have no liability for any reason to the prospective purchaser or any related party thereto resulting from use of or reliance on information provided.

Prospective purchasers should contact HawthorneHall@onesouthrealty.com to schedule property tours, which will be held at the discretion of the listing agents.

Offers should be presented in the form of a non-binding Letter of Intent that clearly describes the terms of the prospective purchaser’s offer, including, but not limited to:

ONE SOUTH COMMERCIAL

YOUR NEEDS. OUR SKILLS. ONE SOUTH.

(1) Offer price (2) Due diligence and closing timeframe (3) Earnest money deposit (4) Debt / equity structure

JERRY FORD Commercial Agent 804.840.4628 jerry.ford@onesouthrealty.com

TOM ROSMAN Associate Broker + Partner 804.539.3017 tom.rosman@onesouthrealty.com

RYAN RILEE Agent 804.690.1482 ryan.rilee@onesouthrealty.com

JUSTIN SLEDD Agent 804.307.4060 justin.sledd@onesouthrealty.com

(5) Qualifications to close The information contained herein is strictly confidential and is intended for the use of the party receiving it from One South Commercial. Recipient acknowledges that it will not reproduce or make any portion of this document available to a third party without the express permission of One South Commercial.

Hawthorne Hall Apartments | Disclosure | 3

T A B L E O F C O N T E N T S I. Executive Summary ........................................................................................ 5 Offering Overview Property Details Investment Highlights Photographs II. Financials ........................................................................................................ 11 Historical Income and Expenses Financial Assumptions Cash Flow Projections Investment Analysis III. Location Overview .................................................................................... 16 Richmond, VA Ginter Park III. Market Information .................................................................................. 19 Sale Comparables Rental Sub-Market Demographics IV. Company Description .............................................................................. 23 One South Commercial Agent Profiles

Hawthorne Hall Apartments | Table of Contents | 4

E X E C U T I V E S U M M A R Y

o f f e r i n g o v e r v i e w ONE SOUTH COMMERCIAL is pleased to present for sale

HAWTHORNE HALL APARTMENTS a fully leased 124-unit garden style apartment property in Richmond's historic Ginter Park community.

Seller reserves the right to accept an offer at any time, to conduct or terminate sale negotiations at its sole discretion, and to amend any deadlines set forth herein.

Price ................................................ Determined by the market Terms .............................................. All cash at settlement

Hawthorne Hall Apartments | Offering Overview | 6

P R O P E R T Y D E T A I L S Address ........... 3503 & 3505 Chamberlayne Ave | Richmond, VA 23227 Acres .......................................................................................................... 3.58 acres Tax Parcel ..................................................... N0001343020 & N0001343022 Construction .......................................................................................... Built 1963 Zoning .................................................................................................................. R-48 Parking .............................................................................. Off-Street | 131 Spaces Number of Buildings ........................................... 11 Buildings, Each 3 Stories Exterior Construction ............

Brick & Composition Shingle Roof

Interior Construction ................... Painted Drywall & Hardwood Flooring Features ...................... Pool, Ample Parking, Courtyard, Patios & Porches Systems ............................... Natural Gas furnace, Electric Air Conditioning Unit Breakdown ...........................

Type Units Unit SF Rent 1 bed / 1 bath 75 675 $612 2 beds / 1 bath 39 808 $712 2 beds / 1 bath / den 10 933 $742 Totals 124 91,476 $81,088

Hawthorne Hall Apartments | Property Details | 7

Investment Highlights The Hawthorne Hall Apartments, a fully-leased community of 124 garden style apartments, sets the standard for multi-family housing in the historic Ginter Park community of Richmond’s Northside. The property is within two miles of the Downtown Central Business District, Virginia Commonwealth University and across the street from the stately Union Theological Seminary. The parking lot provides abundant access for residents, guests and staff. Green courtyards and the large pool have been thoughtfully maintained. Hawthorne Hall is readily accessible to major travel routes, employment districts and shopping centers. The eleven three-story buildings have high visibility from Chamberlayne Avenue, a major throughfare integral to Richmond's urban renaissance.

Hawthorne Hall Apartments | Photographs | 9

Hawthorne Hall Apartments | Photographs | 10

F I N A N C I A L A N A L Y S I S

Hawthorne Hall Apartments | Financials | 12

H I S T O R I C A L I N C O M E & E X P E N S E S

F I N A N C I A L A S S U M P T I O N S

C A S H F L O W P R O J E C T I O N S

Hawthorne Hall Apartments | Financials | 14

I N V E S T M E N T A N A L Y S I S

Hawthorne Hall Apartments | Financials | 15

L o c a t i o n  O v e r v i e w

L O C A T I O N O V E R V I E W

R I C H M O N D , V I R G I N I A Richmond, Virginia is a located in the center of eastern Virginia. The Richmond MSA is located 100 miles south of Washington, D.C, and approximately 1.26 million people call the the Richmond area home. As a crossroads for communication and transportation with the converging of major interstate and railroad lines, Richmond’s industries thrive.

Richmond’s economy is made up of financial, service-based, manufacturing, medical, and technological industries. Due to it’s location and affordability, many Fortune 1000 companies are located in Richmond.

As the state capital, Richmond is known for it’s economic and business leadership, and continues to live up to it’s legacy as a cultural and economic center. It is easy to see Richmond’s history being incorporated into it’s modern social and economic ventures, and many companies and industries are seeking to revitalize and redevelop the historic neighborhoods of Richmond. Richmond's urban redevelopment is contributing to the city's growth and popularity as a vibrant place to live, work, and thrive.

In recent years, Richmond has attracted national attention for it’s bourgeoning cultural scene. Travel + Leisure Magazine, Frommers, American Express Travel, and Southern Living have all cited Richmond as a top travel destination.

Enjoy one of Richmond’s 85 world class restaurants, tasty award-winning craft breweries, and thriving arts and music scene.

Hawthorne Hall Apartments | Location Overview | 17

L O C A T I O N O V E R V I E W

G I N T E R P A R K Ginter Park and the adjacent Bellevue neighborhoods are considered collectively as Richmond’s Northside.These neighborhoods are separated by I-95 from the Downtown which is to the Southeast. The Boulevard which divides the Fan District from the Museum District leads directly to, in short distance, these Northside neighborhoods.

The brainchild of Major Lewis Ginter, the founder of American Tobacco and a wealthy Richmond industrialist, plans for Ginter Park were started in the late 1800s. It was Ginter’s idea to create a neighborhood where businessmen could retreat to the country at the end of the day’s work in town. Ginter drew residents to his community by establishing an electric trolley system connecting Ginter Park to Dowtown Richmond, a mere 15 minute trip back in 1895.

Ginter Park was popular for its elaborate green spaces and variety of architectural styles ranging from modest builders’ cottages to large Colonial Revival mansions. Other prominent styles include: Tudor Revival, Spanish Colonial, Bungalow, American Foursquare, Queen Anne and Shingle Style. Bellevue is noted for its concentration of Bungalow style homes and its cozy neighborhood feel.

Recent redevelopment along the Boulevard, North of Broad St has increased the popularity of this area.

Neighborhood description courtesy of One South team member, Kelly Blanchard, of the Kelly Blanchard Real Estate Group http://kellyblanchard.com/communities/bellevue-and-ginter-park

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M A R K E T I N F O R M A T I O N

S A L E C O M P A R A B L E S

Estrabrook North (20 Units) 3809 Chamberlayne Avenue 1/13/2016 $1,440,000 / $72,000 per unit (2016 assessment: $538,000) Townhomes of Chesterfield (116 Units)

Chickahominy Bluff (120 Units)

3856 Guilder Lane

7800 Sporting Lane

3/2/2016

12/22/2015

$5,343,625 / $46,066 per unit

$8,430,000 / $70,250 per unit

(assessed at $5,291,000) Hampstead Apartments (98 Units)

Newport Manor (200 Units)

2340 Hampstead Avenue

6701 Carnation Street

3/1/2016

12/18/15

$5,800,000 / $59,184 per unit

$15,800,000 / $79,000 per unit

(2016 assessment: $4,739,300)

(assessed at $9,367,000, 6.55% Cap)

All information used in preparing this offering memorandum is deemed reliable but One South Commercial makes no guarantee, warranty, or representation with respect to its accuracy. This is not an appraisal and should not be relied on for tax, financial, or legal purposes.

Hawthorne Hall Apartments | Market Information | 20

S A L E C O M P A R A B L E S

Hope Village Apartments (100 Units)

Grace at Monroe (57 Units)

1605 Hope Road

401 W Grace Street

10/22/15

8/19/2015

$7,200,000 / $72,000 per unit

$6,400,00 / $112,281 per unit

(assessed at $6,088,900)

(6.2% Cap)

Old Brook Apartments (14 Units)

Residences of Westover Hills

4912 Old Brook Road

(260 Units)

9/1/15

5582 Westover Drive

$620,000 / $44,286 per unit

6/12/2015

(assessed at $446,000)

$12,300,000 / $47,308 per unit (assessed at $11,473,000)

3006-4828 Chamberlayne Avenue

Coliseum Lofts (112 Units)

(217 Unit Apartment Portfolio)

1335 W Broad Street

8/26/2015

6/10/2015

$7,500,000 / $34,562.21 per unit

$12,300,000 / $109,821 per unit (6.4% Cap)

All information used in preparing this offering memorandum is deemed reliable but One South Commercial makes no guarantee, warranty, or representation with respect to its accuracy. This is not an appraisal and should not be relied on for tax, financial, or legal purposes.

Hawthorne Hall Apartments | Market Information | 21

R E N T A L S U B - M A R K E T

NEIGHBORHOOD DEMOGRAPHICS Population | 1,249 Households | 571 Non-Family households | 278 (48.7%) Minority Population | 52.7% (African American) Median household Income | $34,453 (+52% increase since 2000) Median house or condo value | 370,435 Median contract rent | $542 Unemployment Rate | 4.47% Residents below the poverty level | 17% Median resident age | 45.9 Gender | 48% Female, 52 % Male Source | city-data.com

All information used in preparing this offering memorandum is deemed reliable but One South Commercial makes no guarantee, warranty, or representation with respect to its accuracy. This is not an appraisal and should not be relied on for tax, financial, or legal purposes.

Hawthorne Hall Apartments | Market Information | 22

C O M P A N Y Â D E S C R I P T I O N

C O M P A N Y P R O F I L E

In the early 2000’s, the neighborhoods of Richmond’s urban core, neglected for decades, began to show new signs of life.

Warehouses became industrially-styled condos, manufacturing plants became artist studios, furniture stores became hotels and vacant lots became new housing. The people, who had left decades earlier begun to come back, and with them, so did the festivals and the businesses, both large and small, and somewhere along the line, old Richmond gave way to RVA. The development community quickly recognized the public’s desire for walkable communities and began to blend both commercial uses and residential under the same roof. Property owners who had been holding on to architecturally significant but blighted properties for decades, now began to seek advice and advocacy about what was next. It was from these needs that One South was born.

Opened in 2008 by a group of like-minded agents seeking a different take on the stale brokerage model so prevalent in the Richmond marketplace, One South Realty grew and grew quickly, despite being part of a market experiencing fundamental change. By blending advanced valuation, modeling, marketing and technology from both the commercial and residential arenas, One South quickly became known for being client-centric, information driven and development savvy. And having access to all of the relevant databases meant not only being able to provide our clients with the most accurate underlying data upon which they can base their decisions, but gave One South the ability to push client listings further into the web than our competition.

One South represents a new breed of brokerage that focuses on intelligent leverage to create a better client experience.

Hawthorne Hall Apartments | Company Description | 24

A G E N T P R O F I L E S

JERRY FORD

TOM ROSMAN Jerry Ford comes to One South with as

Tom Rosman enters his third decade in

much multi-family experience as anyone in

the Richmond VA commercial brokerage

the Richmond marketplace. Jerry’s nearly

scene. One of Richmond’s premier

40 years of experience in Commercial Real

brokers of multi-family properties, he has

Estate has given his clients the benefit of

experience in large apartment complexes,

great insight in: investment sales, 1031

apartment buildings in historic

exchanges, apartment and multifamily

neighborhoods, office buildings, retail

sales, and net leased investments. Prior to

properties, mixed use buildings, and

One South, Jerry worked for both The

numerous historic adaptive reuse

Covington Company and Commonwealth

properties. Tom has an innate sense of

Commercial Partners. Prior to real estate, Jerry worked in medical sales

valuing not only a property’s current performance, but the ability to

with General Medical Corporation and The KDC Infant Monitoring

correctly predict its future performance, especially in properties requiring

Company. Jerry is a graduate of Virginia Commonwealth University with a

repositioning in the marketplace.

Bachelor or Science in Business Administration.

JUSTIN SLEDD

RYAN RILEE Ryan comes to One South Commercial

Justin Sledd is a Richmond native and

with more than 8 years in the commercial

graduate of Virginia Commonwealth

real estate business. He has represented a

University. He has been working in the

variety of property owners, from private

Richmond real estate market for the last

equity and REITS with assets across the

7 years managing single family to large

country to local real estate investors

multifamily properties. The relationships

searching for opportunity in central

that he has developed in his time spent

Virginia. With a background in property

managing a diverse portfolio has

and asset management Ryan has a great

propelled his love of real estate from the

eye for value creation and understands

management side to the transactional

each phase in the life cycle a commercial real estate investment.

side. His desire is to help investors develop healthy and thriving portfolios with the experience he has gained.

Hawthorne Hall Apartments | Agent Profiles | 25

ONE SOUTH COMMERCIAL

YOUR NEEDS. OUR SKILLS. ONE SOUTH.

2314 WEST MAIN STREET | RICHMOND, VIRGINIA 23220 | ONESOUTHCOMMERCIAL.COM | COMMERCIAL@ONESOUTHREALTY.COM | 804.353.0009 [O] | 804.353.0991 [F]