Team Synergy -- The Block

The Block Investment Proposal Team Synergy: Patrick Morse, AJ Scott, Justin Conant, Adrian Hamilton, Lucas Kehoe

According to the Bureau of Labor Statistics, Columbus, Ohio is the fastest growing metropolitan area in the Midwest. In the Urban Land Institute’s recently published Annual Emerging Trends in Real Estate report, Columbus was chosen as the #1 city in America to watch out for in regards to real estate growth potential. Not only does Columbus have the highest concentration of fortune 1000 companies in the US, it also boasts the highest concentration of college students in the Midwest with over 60 colleges and universities. Youth, wage growth, and a relatively low cost of living has made Columbus an ideal environment for growth and potential.

Located in the heart of this booming real estate market The Ohio State University’s nearly 150-year-old campus lies as a testament of American strength with national landmarks such as The Horseshoe and the Oval. According to OSU’s statistics The Ohio State University is currently the third largest university in the country – and growing. As laid out in OSU’s 2015 framework plan for the campus, High Street has been the core thoroughfare for the university and the city of Columbus as a whole since the civil war. After OSU was founded in 1873 High Street became the eastern gateway to this leafy campus and a place where students from the west and affluent community members from the east gathered to create a vibrant community for celebration of football wins, eating, shopping, living, and entertainment. The intersection of 15th Avenue and High Street in particular has historically been the premier gateway to Ohio State as it sits directly across from the historic Oval and the nationally recognized Wexner Center for the Arts. This is the point of highest foot-traffic on High Street and is considered the most desirable retail location off campus at Ohio State.

Unfortunately the great real estate urban sprawl that occurred after world war two led to widespread vacancies and the dilapidation of high street. By the early 21st century High Street and the surrounding communities had become crime-ridden and depressed. Since the 1960’s OSU has made it a priority to plan for the revitalization of High Street. Recently there have been great gains made and after years of patience, planning, and zoning, Campus Partners — the planning and development department of OSU — has successfully assembled the prime corridor of the university at High Street between 17th and 14th avenues. We believe that it is our responsibility and privilege to restore this beloved corridor to its former place as the gateway and communal core of The Ohio State University. The growth of OSU and the surrounding area along with the quality of the location make this a prime opportunity to create value for the community, the university, and the city of Columbus as a whole.

Over the past few years Campus Partners has further developed its dream of this area surrounding High Street. OSU’s plan brilliantly calls for the completion of a community space on the northeast corner of 15th and High which will serve as a bridge between the Oval and the University District. The corridor will serve as the “consolidated art’s district” of OSU and will be the renewed gathering place of the community and university to enjoy art, food, relaxation, and celebration. Campus Partners has also laid out its master plan for the rest of the area including the development of a hotel, offices, and retail that would surround the community space and a parking garage in the back of the development with retail along Pearl Street (the street that runs parallel to High Street and to the West). OSU has developed their master plan and it is our job as team Synergy to make the dream of revitalizing 15th and High a reality. Phase 1 of our development will be the block on the northeast corner of 15th and High and the blocks directly to the north and south will be phase 2 of the development. After performing extensive market analysis and financial feasibility studies for the development our team has created a plan that we believe will better the community and the university as a whole. We call it “The Block”.

Our goal was to take this priceless location and develop a design that creates the most possible value for the site. The most important aspect of the project is what will be seen from High Street, the Oval and the Wexner Center for the Arts which lies directly across High Street. We wanted to create a gathering place for the University that will serve as a food court, visitor destination, community center for students and faculty to shop, and a corridor that will bridge the gap between the university district and university. In addition to retail and community space we wanted our development to be a multi-use development where people live and create a vibrate community. From our market research we believe that there is greatest demand for high-end student housing for Juniors and Seniors. In addition, very low market vacancy rates indicate a large demand for high-end urban-flats-style apartments that will target graduate students and young professionals who work at the university. Perhaps the greatest demand in the area is for a hotel near the campus. We decided to include a high-end limited service hotel that will be a main focal point of The Block and will be the haven for visitors of OSU’s campus from around the country. Also, because parking is in short supply on OSU’s campus we saw a parking garage as a must-have opportunity. In addition to being the main parking for each use of the development our parking garage will create revenue by charging monthly rates to apartment dwellers and daily rates to visitors with a minimal footprint and hidden construction that will hold over 500 spaces.

We believe that since this site will be phase 1 of a multi phase project it would be too risky to include office space in The Block. Since the full revitalization of the corridor will not be finished until the later phases are completed it would be difficult to find demand for class A office space for phase 1. The active construction site and lack of parking needed for a nearly 100,000 SF office building in the front would create a logistics nightmare which would lower value and deaden the energy of The Block. Because of the current zoning of the area we will be requesting a zoning variance for the central area of the development for the purpose of allowing for a deeper hotel site with a 110 foot height limit which will create a better organized and more efficient site plan (see zoning details page). In addition we will be requesting a zoning variance for the northeast section of our development in order to increase the maximum height of this small section so that we can develop our dream of a self-contained, quality, fully-furnished student living community built within the historic fraternity and sorority row region.

The foundational idea behind The Block’s retail community was to create more than just a row of in-line shops. Instead, we wanted to create a thoughtful design that would be a destination. Our goal is to create an attraction that is a haven from the busy street and yet offers a bustling outdoor gathering place for artistic energy and communal eating. In short, we created a gathering place for the university. The Block development is meant to bridge the gap between the oval and the university district. After surveying scores of students on campus we have found valuable insights into the students’ preferences. We had four key takeaways. 1) Students seem to be far more interested in fast casual restaurants than fast-food or other low-end alternatives. This is a recent trend countrywide. With the emergence of millennials has come an intensified demand for high quality and healthier alternatives. According to CBRE the fast casual sub-market is growing more than twice as fast as tradition fast-food chains. 2) There seems to be a strong demand by students for a grocery store. In fact, more than 60% of survey respondents indicated that they want a grocery store in the development. This makes sense being that there is not a single grocery store near campus on high street. 3) On a campus with over 50,000 students it was surprising to find only a few technology stores on High and almost all of these concentrated in south campus. Because of this lack and an expressed interest from surveyed students (75% of respondents) we will be looking to include a Tech Hub or similar store in The Block. 4) 40% of respondents wanted an ice cream parlor in our development. Ohio has several high-quality local ice cream and/or custard chains that we believe could serve as a wonderful community gathering place for students in our development. Because of the location, design, and high foot-traffic of the site, we believe that The Block will be able to attract the highest quality retailers in the United States and we will have leverage to negotiate above-average market rent. Our goal will be to find a healthy mix of popular national chains as well as a few locally owned successful businesses to occupy our commercial space.

After examining the apartment market in the area, we have realized that there is a high demand for high-end non-student housing apartments. Vacancies in the area for this type of apartment complex are about 4% and the new requirement for sophomores to live on campus has apparently had little effect. We believe that the location of this development creates opportunity for very attractive apartments in which graduate students and faculty will both reside. These high-end apartments will be retrofitted with luxurious amenities such as a lounge, movie theater, and courtyard with green space. Recently, the Midwest has seen growth in micro-apartments that are about 400 square feet. These micro-apartments provide a simple and more affordable lifestyle that fosters apartment community involvement and provides the investor with high per square foot rents. Tenants get the benefit of the lively apartment community without having to pay top dollar for a large one-bedroom suite. In addition, these apartments will be the perfect second home for professionals and faculty who spend only part-time in the area. Because of this we have decided to make over half of these apartments 450 square foot micro-apartments.

The recently enacted rule that all sophomores must live on campus has created a stir in the housing industry around campus. The biggest loser from this event however has been low-end student houses that have greater than 4 bedrooms. Fortunately, the high-end student-housing segment of the market has seemingly remained unaffected and has even seen a reduction in vacancies because of OSU’s overbooking on its enrollment. The market still shows signs of a serious lack of supply and high-end student housing around campus has vacancies near zero. Because of this we believe there is demand for an up-scale, fully furnished student housing apartment complex in the back of The Block. The proximity of 15th and High to the heart of campus will create high demand for this project. Because of concerns of potential uncertainty in the apartment market due to the move of Sophomores onto campus we have included a sensitivity analysis which tests the effects of lower than expected rental rates in the future and shows the durability of The Block’s development plan.

After conducting extensive market research around campus we found that the demand for hotels is still very high. The property on 15th and High will be only the second hotel on campus that is within walking distance of the focal points of Ohio State — the Oval, Thompson Library, The Wexner Medical Center, and the Horseshoe. Currently visitors are forced to choose between a full-service formal hotel (the Blackwell) and hotels that are over two miles away along Olentangy River Road. From our market analysis we have determined that the successful Marriot brand “aloft” is the perfect fit for our 161-room hotel.

Marriot’s aloft hotel is a limited service hotel with a modern feel. We are targeting two markets with the brand and design of this hotel. First, we hope to attract the younger generations who want a trendy hotel that offers an experience. Second, we are attracting families who are looking for a more affordable family-friendly option when casually touring the campus or visiting their children. The hotel offers a conference space, pool, workout space, and a 4000 square foot Cameron Mitchell’s restaurant. It will be the focal point of the Block development. On the 9th floor this glass walled restaurant will have an outside patio which will overlook the historic Oval and Thompson Library. We believe that this hotel will be a premier option for casual visitors who want to experience OSU’s rich campus.

As mentioned before, we have included a six-story parking garage that will serve all four uses: retail, hotel, apartments, and student housing. In addition we will include visitor parking which will provide an additional revenue stream for the project.

To create a unified destination for the university and community we have created a community space that will be dedicated to green space and common area seating for the restaurants. This community area will be the site of sidewalk chalk art festivals, food trucks, farmers markets, art festivals, outdoor movies, music performances and other community events. It will be an art “block” that will provide a place for students and community members alike to share their gifts to others. The goal of this site will be to join together all of the separate uses in the development and future surrounding developments with the art district which surrounds the Oval. We chose to design our community space as a “Block O” as a symbol of the centrality and importance of this area to the history and future of OSU.

After decades of neglect, High Street is on the verge of reclaiming its past glory and serving as a renewed focal point of the university. The time is ripe for 15th and High Street to regain its prominence. As a whole, The Block development on 15th and High will create a community and energy that will transform this run-down area into the revitalized centerpiece and gateway of The Ohio State University.

Zoning Details 1. The site is within the boundaries of the University Area Commission, University Area Impact District, and

the city of Columbus and the zoning must be approved by all three.

2. In 2015, after being approved by the other constituencies, the city of Columbus approved the rezoning of our project from C-4 and AR-4 to a CPD mixed use development.

3. The sum of all of the housing units that are allowed in all of the phases of the project combined must be less

than 330 units. In addition, 100,000-300,000 square feet of office space is planned for the development as a whole. There are a small number of specific types of uses that are not permitted in the development such as car dealers, billboards, crematories, cell towers, etc. In addition, a zoning variance has been approved that allows for first floor residential use in the portion of the development to the east of Pearl Street.

4. These are the required setbacks, maximum building heights, and maximum building densities for the

development as copied from the zoning requirements:

4. These are the main parking requirements as set forth by the zoning requirements:

Zoning Subareas

These zoning requirements have been approved by the UAC and the city of Columbus. They allow for mixed-use development as long as the total number of units of apartments in the entire apartment complex does not exceed 330. We have developed our project to the best of our ability in accordance with these requirements. As stated in the summary, we have decided to have a large concentration of student and faculty living in the first phase of construction, as office would be risky to develop without first having developed phase 1 of the project. Because of this we plan to include only a handful of multi-family units during phase two and will instead focus on office, entertainment, and retail. However, we would like to request a zoning variance in regards to subarea 6 of the development. We want to request

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that subarea 6 be merged with subarea 5 and thus increasing the maximum height of the building in what is now subarea 6 to 60 FT. The arguments that we will propose to the University Area Commission and the City of Columbus for this change are as follows:

1. We believe that the combination of subarea 5 and subarea 6 poses a prime opportunity to create a thriving community of students in a single self-contained apartment complex. This site is located directly adjacent to the campus’ traditional fraternity and sorority rows and thus would be a prime location to build a community. Unfortunately, the current partitioning of the subareas makes it impossible to create a single cohesive apartment complex in the area. It necessitates the breaking up of this apartment into two separate buildings which would reduce density and create separation. We believe that the campus’ desire for high-density student housing is hindered by this design.

2. We also believe that the addition of this student housing development is a key component of creating demand for the retail in the front of the development. If this zoning variance were passed it would increase the density of the area and thus increase demand for retail. Thus, it would not only create a stronger community in the historic area, it would create strength for the entire development as a whole.

3. We know that it is a concern of the community that pushing back a large apartment building deeper into the development could create disruption for the community as it is today. To alleviate this we plan to give up the right to develop apartments that have units that are greater than 4 bedrooms. These higher-volume bedroom units are traditionally where the problems with student housing occur and we believe that with this change our student housing project has the opportunity to enrich the community.

4. Lastly, we understand that creating a smooth transition from the height of the hotel to the heights of the fraternity houses to the east of our development is important to the University Area Commission. Therefore we will do everything we can to create a less abrupt, more smooth transition by adding greenery and trees on the east side of where subarea 6 lies. This will create an environment that would soften the height of the complex.

Therefore we request this zoning variance because it is necessary for the full development of The Block community. In addition to this variance we would also like to ask for a zoning variance of Subarea 4 which is where the hotel will be built. We want to request the deepening of subarea 4 to the east to provide more room for the 110 foot hotel to reside. Our reasoning and arguments for this action are as follows:

1. We believe that having a parking garage directly behind our hotel greatly de-values our premier asset. Half of the rooms would be looking directly at a parking garage instead of towards the beautiful campus. Creating a hotel that is oriented on the south corner of Pearl and 15th creates a building that has better overall views and thus better value.

2. In addition, we believe that the parking garage is taking up wasted space in the development if we orient it north/south. Instead, if we tuck it between 16th and Pearl oriented east/west as we plan to do it frees up space to include more of the university’s much-needed student housing. As stated in the previous request, the more student housing in the back of the development, the more there will be opportunity for a vibrant community and successful retail in The Block development.

3. Also, we believe that aesthetically it would be best for the parking garage to be situated where we have it planned. This placement of the garage is simply better at hiding it from the community than placing it directly on fraternity and sorority row. To use a parking garage as the chief use of that historic area would be a small tragedy for the community. We will hide its exposed edges with trees and masonry and the edge that is parallel to 16th will solely be adjacent to the backs of offices when they are completed after phase 2.

4. Allowing for the placement of the hotel farther back in the community creates an attractive and impressive hotel check in driveway that is not possible with the current zoning requirements.

Therefore we would like to submit a request to the city of Columbus and the UAC for a zoning variance for the proposed development of our hotel and the completion of The Block community.

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

REVENUE

HotelIncome TotalUnits RevParHotelRooms 161 $113 $6,611,063 $6,743,284 $6,878,149 $7,015,712 $7,156,027 $7,299,147 $7,445,130 $7,594,033 $7,745,913 $7,900,832

Subtotal 161 $3,422 $6,611,063 $6,743,284 $6,878,149 $7,015,712 $7,156,027 $7,299,147 $7,445,130 $7,594,033 $7,745,913 $7,900,832

Total GPRStudentHousingIncome Units AvgRent/Bed

MicroStudios 27 $800 $259,200 $264,384 $269,672 $275,065 $280,566 $286,178 $291,901 $297,739 $303,694 $309,768

1-Bed/1-Bath 50 $1,300 $780,000 $795,600 $811,512 $827,742 $844,297 $861,183 $878,407 $895,975 $913,894 $932,172

2-Bed/2-Bath 60 $1,000 $1,440,000 $1,468,800 $1,498,176 $1,528,140 $1,558,702 $1,589,876 $1,621,674 $1,654,107 $1,687,190 $1,720,933

3-Bed/3-Bath 38 $900 $1,231,200 $1,255,824 $1,280,940 $1,306,559 $1,332,690 $1,359,344 $1,386,531 $1,414,262 $1,442,547 $1,471,398

4-Bed/4-Bath 32 $850 $1,305,600 $1,331,712 $1,358,346 $1,385,513 $1,413,223 $1,441,488 $1,470,318 $1,499,724 $1,529,718 $1,560,313

Subtotal 207 $1,136 $5,016,000 $5,116,320 $5,218,646 $5,323,019 $5,429,480 $5,538,069 $5,648,831 $5,761,807 $5,877,043 $5,994,584

Total GPRFlatsIncome Units AvgRent

MicroStudio 51 $950 $581,400 $593,028 $604,889 $616,986 $629,326 $641,913 $654,751 $667,846 $681,203 $694,827

1-Bed/1-Bath 32 $1,100 $422,400 $430,848 $439,465 $448,254 $457,219 $466,364 $475,691 $485,205 $494,909 $504,807

2-Bed/2-Bath 16 $1,800 $345,600 $352,512 $359,562 $366,753 $374,089 $381,570 $389,202 $396,986 $404,925 $413,024

Subtotal 99 $1,136 $1,349,400 $1,376,388 $1,403,916 $1,431,994 $1,460,634 $1,489,847 $1,519,644 $1,550,036 $1,581,037 $1,612,658

GarageIncome TotalSpots AvgRentVistorParking 252 $300 $907,200 $925,344 $943,851 $962,728 $981,982 $1,001,622 $1,021,655 $1,042,088 $1,062,929 $1,084,188

DevelopmentParking 252 $100 $302,400 $308,448 $314,617 $320,909 $327,327 $333,874 $340,552 $347,363 $354,310 $361,396

Subtotal 504 $200 $1,209,600 $1,233,792 $1,258,468 $1,283,637 $1,309,310 $1,335,496 $1,362,206 $1,389,450 $1,417,239 $1,445,584

HotelRetailIncome Size Rentpersq.ft.

CameronMitchels 4000 $50 $200,000 $204,000 $208,080 $212,242 $216,486 $220,816 $225,232 $229,737 $234,332 $239,019

CommercialReimb. $9.5 $38,000 $38,760 $39,535 $40,326 $41,132 $41,955 $42,794 $43,650 $44,523 $45,414

Subtotal 4000 $59.5 $238,000 $242,760 $247,615 $252,568 $257,619 $262,771 $268,027 $273,387 $278,855 $284,432

MixedUseRetail Size Rentpersq.ft.

Piada 2375 $45 $106,875 $109,013 $111,193 $113,417 $115,685 $117,999 $120,359 $122,766 $125,221 $127,726

Dewey's 3325 $45 $149,625 $152,618 $155,670 $158,783 $161,959 $165,198 $168,502 $171,872 $175,310 $178,816

JimmyJohn's 1425 $48 $68,400 $69,768 $71,163 $72,587 $74,038 $75,519 $77,030 $78,570 $80,142 $81,744

TechHUB 1425 $48 $68,400 $69,768 $71,163 $72,587 $74,038 $75,519 $77,030 $78,570 $80,142 $81,744

TraderJoe's 7600 $38 $289,104 $294,886 $300,784 $306,799 $312,935 $319,194 $325,578 $332,090 $338,731 $345,506

Jeni's 1995 $48 $95,760 $97,675 $99,629 $101,621 $103,654 $105,727 $107,841 $109,998 $112,198 $114,442

Chipotle 2280 $48 $109,440 $111,629 $113,861 $116,139 $118,461 $120,831 $123,247 $125,712 $128,226 $130,791

CommercialReimb. 20425 $9.5 $194,038 $197,918 $201,877 $205,914 $210,032 $214,233 $218,518 $222,888 $227,346 $231,893

Subtotal 20425 $329.5 $1,081,642 $1,103,274 $1,125,340 $1,147,847 $1,170,804 $1,194,220 $1,218,104 $1,242,466 $1,267,315 $1,292,662

GrossRevenue $15,505,704 $15,815,818 $16,132,134 $16,454,777 $16,783,873 $17,119,550 $17,461,941 $17,811,180 $18,167,404 $18,530,752

MixedUseVacancy $0 $0 $0 $0 $0 $0 $0 $0 $0

Less:MultifamilyVacancy 5% ($67,470) ($68,819) ($70,196) ($71,600) ($73,032) ($74,492) ($75,982) ($77,502) ($79,052) ($80,633)

Less:CommercialVacancy 4% ($43,266) ($44,131) ($45,014) ($45,914) ($46,832) ($47,769) ($48,724) ($49,699) ($50,693) ($51,706)

ParkingLess:GarageVacancy 5% ($60,480) ($61,690) ($62,923) ($64,182) ($65,465) ($66,775) ($68,110) ($69,473) ($70,862) ($72,279)

MultifamilyLess:StudentHousingVacancy 5% ($250,800) ($255,816) ($260,932) ($266,151) ($271,474) ($276,903) ($282,442) ($288,090) ($293,852) ($299,729)

HotelVacancyLess:CommercialVacancy 4% ($9,520) ($9,710) ($9,905) ($10,103) ($10,305) ($10,511) ($10,721) ($10,935) ($11,154) ($11,377)

EffectiveGross $15,074,168 $15,375,652 $15,683,165 $15,996,828 $16,316,765 $16,643,100 $16,975,962 $17,315,481 $17,661,791 $18,015,027

EXPENSESLandallocation(acres) $/year/acre

LandLeaseRent 4.50 $20,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000

The Block - 10 YEAR CASH FLOW

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10RealEstateTaxExpenses

TaxableValueofCons.Cost Effect.MilageRateMixedUseExpense 35% $80.80 $402,981 $411,041 $419,262 $427,647 $436,200 $444,924 $453,822 $462,899 $472,157 $481,600HospitatlityExpense 35% $80.80 $459,374 $468,561 $477,932 $487,491 $497,241 $507,186 $517,329 $527,676 $538,230 $548,994StudentHousingExpense 35% $80.80 $811,078 $827,300 $843,846 $860,723 $877,937 $895,496 $913,406 $931,674 $950,307 $969,314ParkingGarageExpense 35% $80.80 $232,204 $236,848 $241,585 $246,417 $251,345 $256,372 $261,500 $266,730 $272,064 $277,505

Subtotal $1,905,637 $1,943,750 $1,982,625 $2,022,277 $2,062,723 $2,103,978 $2,146,057 $2,188,978 $2,232,758 $2,277,413

FlatsExpensesOperatingExpenses 2,800.00$ $/Unit $277,200 $282,744 $288,399 $294,167 $300,050 $306,051 $312,172 $318,416 $324,784 $331,280ManagementFee 4% $51,277 $52,303 $53,349 $54,416 $55,504 $56,614 $57,746 $58,901 $60,079 $61,281Reserves 250.00$ $/Unit $24,750 $25,245 $25,750 $26,265 $26,790 $27,326 $27,873 $28,430 $28,999 $29,579Insurance $0.35 $/SF $7,525 $7,676 $7,829 $7,986 $8,145 $8,308 $8,474 $8,644 $8,817 $8,993

Subtotal $360,752 $367,967 $375,327 $382,833 $390,490 $398,300 $406,266 $414,391 $422,679 $431,132

RetailExpensesOperatingExpenses $9.50 $/SF $194,038 $197,918 $201,877 $205,914 $210,032 $214,233 $218,518 $222,888 $227,346 $231,893Reserves $0.05 $/SF $1,021 $1,042 $1,063 $1,084 $1,105 $1,128 $1,150 $1,173 $1,197 $1,220Insurance $0.35 $/SF $7,525 $7,676 $7,829 $7,986 $8,145 $8,308 $8,474 $8,644 $8,817 $8,993

Subtotal $202,584 $206,635 $210,768 $214,983 $219,283 $223,669 $228,142 $232,705 $237,359 $242,106

HospitatilyExpensesBaseExpense $25,107 $/Unit $4,042,170 $4,123,013 $4,205,473 $4,289,583 $4,375,374 $4,462,882 $4,552,140 $4,643,182 $4,736,046 $4,830,767ReplaementReserve $764.67 $/Unit $123,112 $125,574 $128,085 $130,647 $133,260 $135,925 $138,644 $141,417 $144,245 $147,130Insurance $0.35 $/SF $32,384 $33,031 $33,692 $34,366 $35,053 $35,754 $36,469 $37,199 $37,943 $38,702PropertyManagement $1,274 $/Unit $205,186 $209,290 $213,476 $217,745 $222,100 $226,542 $231,073 $235,695 $240,408 $245,217

Subtotal $4,402,851 $4,490,908 $4,580,727 $4,672,341 $4,765,788 $4,861,104 $4,958,326 $5,057,492 $5,158,642 $5,261,815

RESTAURANTEXPENSESOperatingExpenses $9.50 $/SF $38,000 $38,760 $39,535 $40,326 $41,132 $41,955 $42,794 $43,650 $44,523 $45,414Reserves $0.05 $/SF $200 $204 $208 $212 $216 $221 $225 $230 $234 $239Insurance $0.35 $/SF $1,400 $1,428 $1,457 $1,486 $1,515 $1,546 $1,577 $1,608 $1,640 $1,673

Subtotal $39,600 $40,392 $41,200 $42,024 $42,864 $43,722 $44,596 $45,488 $46,398 $47,326

MULTIFAMILYEXPENSES

ManagementFee 4% $190,608 $194,420 $198,309 $202,275 $206,320 $210,447 $214,656 $218,949 $223,328 $227,794Reserves $250 $/Unit $51,750 $52,785 $53,841 $54,918 $56,016 $57,136 $58,279 $59,444 $60,633 $61,846BaseExpense $2,100 $/Bed $921,900 $940,338 $959,145 $978,328 $997,894 $1,017,852 $1,038,209 $1,058,973 $1,080,153 $1,101,756Insurance $0.35 $/SF $65,625 $66,938 $68,276 $69,642 $71,035 $72,455 $73,904 $75,382 $76,890 $78,428

Subtotal $1,229,883 $1,254,481 $1,279,570 $1,305,162 $1,331,265 $1,357,890 $1,385,048 $1,412,749 $1,441,004 $1,469,824

PARKINGGARAGEEXPENSES

OperatingExpenses $450 $/Spot $226,800 $231,336 $235,963 $240,682 $245,496 $250,406 $255,414 $260,522 $265,732 $271,047Insurance $0.35 $/SF $61,600 $62,832 $64,089 $65,370 $66,678 $68,011 $69,372 $70,759 $72,174 $73,618

Subtotal $288,400 $294,168 $300,051 $306,052 $312,173 $318,417 $324,785 $331,281 $337,907 $344,665

TOTALEXPENSES $8,519,708 $8,690,102 $8,863,904 $9,041,182 $9,222,006 $9,406,446 $9,594,575 $9,786,466 $9,982,195 $10,181,839

NETOPERATINGINCOME $6,554,461 $6,685,550 $6,819,261 $6,955,646 $7,094,759 $7,236,654 $7,381,387 $7,529,015 $7,679,595 $7,833,187

DebtService $4,684,091 $4,684,091 $4,684,091 $4,684,091 $4,684,091 $4,684,091 $4,684,091 $4,684,091 $4,684,091 $4,684,091DSCR 1.40 1.43 1.46 1.48 1.51 1.54 1.58 1.61 1.64 1.67

CashFlowafterDebtService $1,870,369 $2,001,459 $2,135,170 $2,271,555 $2,410,668 $2,552,563 $2,697,296 $2,844,924 $2,995,504 $3,149,096

RetunOnCost 9.94% 9.08% 9.26% 9.45% 9.63% 9.83% 10.02% 10.22% 10.43% 10.64% 10.85%ReturnonEquity 17.26% 12.95% 13.86% 14.79% 15.73% 16.70% 17.68% 18.68% 19.70% 20.75% 21.81%

Estimated Valuation 7.00% Cap $93,635,153

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Sale Proceeds 10 Year Reversion Cap Rate 8.50% $41,092,875Levered CF IRR -$14,439,169 $1,870,369 $2,001,459 $2,135,170 $2,271,555 $2,410,668 $2,552,563 $2,697,296 $2,844,924 $2,995,504 $44,241,971Unlevered CF IRR -$72,195,847 $6,554,461 $6,685,550 $6,819,261 $6,955,646 $7,094,759 $7,236,654 $7,381,387 $7,529,015 $7,679,595 $99,951,470

Levered IRR 22.15% 2.00%Unlevered IRR 11.39% 2.00%

-$1,879,965Levered Unlevered

Reversion Value $93,998,248 $93,998,248

Less: Sales Cost ($1,879,965) ($1,879,965)

Less: Mortgage Payoff ($51,025,408) $0

Net Sale Profit $41,092,875 $92,118,283

Sale Proceeds 1 Year Reversion Cap Rate 7.50% $16,974,320Levered CF IRR -$14,439,169 $18,844,690Unlevered CF IRR -$72,195,847 $92,199,414

Levered IRR 30.51%Unlevered IRR 27.71%

Levered UnleveredReversion Value $87,392,810 $87,392,810

Less: Sales Cost ($1,747,856) ($1,747,856)

Less: Mortgage Payoff ($68,670,633) $0

Net Sale Profit $16,974,320 $85,644,954

Range ExitCap LeveragedIRRBaseCase 7% 22.15%BetterCase 6.50% 20.68%WorseCase 7.50% 23.45%

Perm.LoanAmount $70,226,365 AvgReturnonCost 9.94%EquityRequired $14,439,169 AvgReturnonEquity 17.26%AnnualDebtService $4,684,091 Year1DSCR 1.40Term 10 CapRate 7.00%Amortization 25 Year1Value $93,635,153InterestRate(Est.) 4.50% Year1NOI $6,554,461LoanToValue 75.00% LoanToCost 97.27%

Consolidated Project Metrics

BuildHoldAnalysis

BuildSellAnalysis

IRRSensitivityAnalysistoExitCapChanges

Annual Factor Revenue/Cost

RevenueHotel Rooms $113 $150 ADR at 75% Occup. (161 Rooms) $6,611,063Roof Top Restaurant $50 $/SF (4000 SF) $200,000Commercial Reimb. $9.50 $/SF (4000 SF) $38,000Less: Commercial Vacancy 4% ($9,520)Effective Gross Revenue $6,839,543Expenses Hotel ExpensesLand Lease $20,000 $/Acre (.49 acres) $9,721Property Management $1,274 Per Unit $205,186Real Estate Taxes $80.80 Millage Rate $459,374Insurance $0.35 $/SF (925,000 SF) $32,384Operating Expense $25,107 Per Room (161 Rooms) $4,042,170Replacement Reserve $765 Per Room (161 Rooms) $123,112Roof Top Restaurant ExpensesOperating Expenses $9.50 $/SF (4,000 SF) $38,000Reserves $0.05 $/SF (4,000 SF) $200Insurance $0.35 $/SF (4,000 SF) $1,400Total Expense 4,911,546$ Net Operating Income 1,927,996$

Perm. Loan Amount $17,024,083 Avg Return on Cost 11.49%Equity Required $3,680,035 Avg Return on Equity 26.58%Annual Debt Service $1,135,505 Year 1 DSCR 1.70Term 10 Cap Rate 8.50%Amortization 25 Year 1 Value $22,698,777Interest Rate (Est.) 4.50% Year 1 NOI $1,929,396Loan To Value 75.00% Loan To Cost 92.52%

Hotel Pro Forma NOI

Hotel Project Metrics

Student Housing Pro Forma NOIAnnual

Factor Revenue/CostRevenue Perm. Loan Amount $28,786,324 Avg Return on Cost 10.31%Micro Studios $800 $/Bed (27 units) $259,200.00 Equity Required $5,736,129 Avg Return on Equity 18.08%1-Bed/1-Bath $1,300 $/Bed (50 units) $780,000.00 Costs $28,680,645 Year 1 DSCR 1.402-Bed/2-Bath $1,000 $/Bed (60 units) $1,440,000.00 Term 10 Cap Rate 7.00%3-Bed/3-Bath $900 $/Bed (38 units) $1,231,200.00 Amortization 25 Year 1 Value $38,381,7654-Bed/4-Bath $850 $/Bed (32 units) $1,305,600.00 Interest Rate (Est.) 4.50% Year 1 NOI $2,686,724Less: Vacancy 5.00% ($250,800) Loan To Value 75.00% Loan To Cost 100.37%Effective Gross Revenue $4,765,200Expenses Land Lease $20,000 $/Acre $37,515Property Management 4.00% $190,608Real Estate Taxes $80.80 Millage Rate $811,078 Revenue $4,460,700Insurance $0.35 $/SF $65,625 Expenses ($2,078,476)Operating Expense $2,100 $/Bed $921,900 Net Income $2,382,224Replacement Reserve $250 Per Unit $51,750 Avg Return on Equity 8.06%Total Expense $2,078,476 DSCR 1.24Net Operating Income $2,686,724

Student Housing Project Metrics

Student Housing Sensitivity Analysis $0.25 Less Rent/SF

No. of Area/ Rent/ TotalUnits Rent/Ft^2 Unity (ft^2) Total FT^2 Month/Bed Annual Rent

Student Housing Unit TypesMicro Studios 27 $2.29 350 9,450 $800.00 $259,2001-Bed/1-Bath 50 $2.08 625 31,250 $1,300.00 $780,0002-Bed/2-Bath 60 $2.22 900 54,000 $1,000.00 $1,440,0003-Bed/3-Bath 38 $2.25 1,200 45,600 $900.00 $1,231,2004-Bed/4-Bath 32 $2.43 1,400 44,800 $850.00 $1,305,600Total Student Housing Rental Revenue 207 $2.25 4,475 185,100 $4,850.00 $5,016,000

Student Housing Rental and Sales Revenue Summary

Mixed Use Pro Forma NOIAnnual

Factor Revenue/CostRevenueFlats RevenueMicro Studio $950 $/Unit (51 Units) $581,400

1-Bed/1-Bath $1,100 $/Unit (32 Units) $422,400

2-Bed/2-Bath $1,800 $/Unit (16 Units) $345,600

Retail RevenuePiada $45 $/SF (2,375 SF) $106,875

Dewey's $45 $/SF (3,325 SF) $149,625

Jimmy John's $48 $/SF (1,425 SF) $68,400

Tech HUB $48 $/SF (1,425 SF) $68,400

Trader Joe's $38 $/SF (7,600 SF) $289,104

Jeni's $48 $/SF (1,995 SF) $95,760

Chipotle $48 $/SF (2,280 SF) $109,440 Perm Loan Amount $15,239,822 Avg Return on Cost 9.72%

Commercial Reimb. $9.5 $/SF $194,037.50 Equity Required $2,849,974 Avg Return on Equity 12.92%

Gross Revenue $2,431,041.50 Annual Debt Service $1,016,495 Year 1 DSCR 1.25

Less: Multi-Family Vacancy 5% ($67,470.00) Term 10 Cap Rate 6.25%

Less: Retail Potential Revenue 4% ($43,265.66) Amortization 25 Year 1 Value $20,319,763

Effective Gross Revenue $2,320,305.84 Interest Rate (Est.) 4.50% Year 1 NOI $1,269,985

Expenses Loan to Value 75.00% Loan To Cost 106.95%

Land Lease $20,000 $/Per Acre (1.30 Acres) $25,903.58

Multi-familyProperty Management 4.00% $51,277.20

Real Estate Taxes $80.80 Millage Rate $402,981.11

Operating Expense $2,800 Per Unit $277,200.00

Replacement Reserve $250 Per Unit $24,750.00

Insurance $0.35 $/SF $65,625.00

RetailOperating Expenses $9.50 $/SF $194,037.50

Reserves $0.05 $/SF $1,021.25

Insurance $0.35 $/SF $7,525.00

Total Expense $1,050,320.64Net Operating Income $1,269,985.20

Mixed Use Project Metrics

No. of Area/ Rent/ TotalUnits Rent/ft^2 Unity (ft^2) Total ft^2 Month/Unit Annual Rent

Unit TypesFlatsMicro Studio 51 $2.11 450 22,950 $950 $581,4001-Bed/1-Bath 32 $1.83 600 19,200 $1,100 $422,4002-Bed/2-Bath 16 $1.80 1,000 16,000 $1,800 $345,600Total Flats Apartments Rental Revenue 99 $1.97 587 58,150 $3,850 $1,349,400Retail TenantsPiada 1 $45.00 2375 2375 $106,875 $1,282,500Dewey's 1 $45.00 3325 3325 $149,625 $1,795,500Jimmy John's 1 $48.00 1425 1425 $68,400 $820,800Tech HUB 1 $48.00 1425 1425 $68,400 $820,800Trader Joe's 1 $38.04 7600 7600 $289,104 $3,469,248Jeni's 1 $48.00 1995 1995 $95,760 $1,149,120Chipotle 1 $48.00 2280 2280 $109,440 $1,313,280Total Retail Rental Revenue 7 $45.72 2,918 20,425 $887,604.00 $10,651,248Total Multi-Use Revenue 106 $12,000,648

Mixed Use Rental and Sales Revenue Summary

Parking Garage Pro Forma NOIAnnual

Factor Revenue/CostRevenueVistor Parking $300 $10/Day/Spot $907,200Development Parking $100 $/Month/Spot $302,400Less: Vacancy 5% ($60,480)Effective Gross Revenue $1,149,120Expenses Land Lease $20,000 $/Acre $16,998Real Estate Taxes $80.80 Millage Rate $232,204Insurance $0.35 $/SF $61,600Operating Expense $450 $/Spot $226,800Total Expense $537,602Net Operating Income $611,518

Perm. Loan Amount $6,551,981 Avg Return on Cost 8.01%Equity Required $1,642,200 Avg Return on Equity 13.42%Costs $8,211,000 Year 1 DSCR 1.40Term 10 Cap Rate 7.00%Amortization 25 Year 1 Value $8,735,974Interest Rate (Est.) 4.50% Year 1 NOI $611,518Loan To Value 75.00% Loan To Cost 79.80%

Parking Garage Project Metrics

Hard CostsFlatsFlatsApartments $7,254,240FlatsAmenities $509,500

TotalFlatsHardCosts $7,763,740RetailRetail $1,935,000DeliveryParking $60,000

TotalRetailHardCosts $1,995,000CommunitySpaceCommunityPatioSpace $325,000CommunityGreenSpace $100,000CommunityHardscape/Lanscaping $450,000

TotalCommunitySpaceCosts $875,000HotelHotel $13,930,850HotelRestaurantBaseCost $600,000HotelRestaurantTenantImprovements $200,000HotelRestaurantFF&E $120,000

TotalHotelHardCosts $14,850,850StudentHousingStudentHousing $19,685,400StudentHousingAmenities $989,000Furnishingcost $570,700

TotalStudentHousingHardCosts $21,245,100ParkingGarageGarage $7,560,000

TotalGarageHardCosts $7,560,000TotalHardCosts $54,289,690 Materialsusedinclude:Brick,Glass,Steel,ConcretePanelsSoftCosts Wood,AluminumSiding,andReinforcedConcreteFlatsFlatsSoftCosts $2,160,000

TotalFlatsSoftCosts $2,160,000RetailRetailSoftCost $430,000RetailLeasingCommissions $532,562RetailTenantImprovements $430,000

TotalRetailSoftCosts $1,392,562HotelHotelSoftBaseCosts $2,313,125HotelRestaurantBaseSoftCosts $100,000HotelRestaurantTenantImprovements $200,000

TotalHotelSoftCosts $2,613,125StudentHousingApartmentSoftCosts $5,809,800

TotalStudentHousingSoftCosts $5,809,800LoanFees $1,209,108Appraisal&TitleFees $300,000CapitalizedInterest/InterestReserve $983,664TotalSoftCosts $14,468,259ProjectContingency 5% $3,437,897TotalProjectCosts $72,195,847

The Block - Construction CostsPROJECT EXPENSES