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Waldvogel Commercial Properties, Inc.800 Professional Arts Building

30 Franklin Road, SWRoanoke, VA 24011

(540) 342-0800

24 Unit Mixed Use BuildingRoanoke, Virginia

Confidential Offering Memorandum

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515 8th Street SWRoanoke, VA 24016 • 24 luxurious one bedroom, one bath apartments

• On site micro brewery

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Clay Taylor, CCIM804.819.9948Virginia Licensed Salesperson

Jason Fountain, CCIM540.354.6456Virginia Licensed Salesperson

Matthew Zimmerman540.759.1884Virginia Licensed Salesperson

Offering Terms: Offered free & clearProperty Access: Call listing agents to arrange showings

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Property Address✮ 515 8th Street SW, Roanoke, VA 24016

Asking Price✮ $2,595,000

Municipality✮ City of Roanoke, Virginia

Roanoke City Tax Parcel ID✮ 1113111

Zoning✮(D) Downtown

Land Area (Per Land Survey)✮ 1.742 Acres (Total Area)

Primary Parking ✮ Paved Lot: 26 Spaces

Year Built / (Renovated)✮ 1950 / (2016)

Improvement Description✮ 24 x 1BR/1BA Units + Microbrewery

Apartments: Goss Leasable Area✮ 13,087 SF

Apartments: Avg. Monthly Rent/PSF (GLA)✮ $1.46/PSF

Apartments: Avg. Monthly Rent/Unit✮ $830.87

Commercial Space: Gross Leasable Area✮ 1,512 SF

Commercial Space: Current Monthly Rent ✮ $2,700.00

Apartment Amenities✮ Granite countertops, stainless steel appliances, individual heat pumps, dishwasher/disposal, in unit washer/dryer, stained concrete floors, off-leash pet park, BBQ/picnic area, shared courtyard, bike racks

Executive Summary

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West End Flats 1.) Elmwood Park 2.) Jefferson Center 3.) Hotel Roanoke Conference Center

4.) Market Square

5.) Carilion Roanoke Memorial Hospital6.) Mill Mountain Star

7.) Taubman Museum

Downtown Roanoke: At a Glance

The Roanoke Region is the largest metropolitan area in western Virginiaand home to more than 325,000 residents. Composed of five counties(Alleghany, Botetourt, Craig, Franklin, and Roanoke) and three cities(Covington, Roanoke, and Salem), Roanoke is the cultural and businesshub for western Virginia. As a budding hot spot for a variety of sectors,including transportation manufacturing, life science, and food andbeverage, the region provides strategic market access for businesses anddraws talent from a 25-mile radius from the Roanoke Region borderwith an extended labor area population of nearly 700,000.

Over 10,000 people enter the workforce each year from 25 highereducation institutions located within an hour’s drive, including VirginiaTech, Radford University, Roanoke College, Hollins University, andVirginia Western Community College. Virginia Tech University isVirginia’s second largest public university with over 34,000undergraduate students. Virginia Tech has gained a reputation as aleader in the engineering field for both undergraduate and graduate levelprograms. In 2016, Virginia Tech’s Department of BiomedicalEngineering and Mechanics was ranked fourth in the entire nationamong engineering science programs by U.S News and WorldReport. Virginia Tech is located just 30 miles south of Roanokein Blacksburg, Virginia.

The Roanoke Region has become a healthcare hub for SouthwestVirginia, led by the Carilion, which is based in the region and employsover 12,000. The system maintains several hospitals in the areaincluding Carilion Roanoke Community and Carilion RoanokeMemorial as well as numerous smaller clinics and specialty centers.Additional large hospitals in the immediate area include Salem VeteransAffairs Medical Center and Lewis Gale Medical Center.

A partnership between Carilion and Virginia Tech was announced tocreate a world-class research and medical campus in downtownRoanoke. The plan, which will eventually include moving an additional500 to 1,000 undergraduate and graduate students to the area, is beingset in motion with the construction of a new $67MM building thatdoubles the size of the existing research institute in this location. Techplans to invest an additional $100MM over the next 8-years and create aunique “innovation district” expected to spur additional investment inthe area.

Radford University has also announced that it expects an upcomingmerger with Carilion Clinic’s Jefferson College of Health Sciences thatwill double the number of nursing students within five years. Theschools announced in January 2018 that they planned to merge.

As a true recreation destination, Roanoke’s burgeoning outdoor industrythrives from assets such as the nearby Appalachian Trail, James River,and the Blue Ridge Parkway – the most visited national park in the U.S.

The region’s diverse communities feel small and friendly while offeringall the amenities of bustling urban centers. Roanoke is the cultural andrecreational hub for the region, boasting the world-class RoanokeSymphony Orchestra and museums like the renowned TaubmanMuseum of Art, Center in the Square in the midst of the open-airfarmers market downtown, and the Virginia Museum of Transportation.

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Welcome to Roanoke, Virginia

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Waldvogel Commercial Properties is pleased to offer for sale the West End Flats, a fully renovated, turnkey, mixed-use investmentopportunity in downtown Roanoke, Virginia. Built in 1950, the property served as the Roanoke City Health Department building foryears until its closure and subsequent sale in 2013. In 2016, the property was tastefully renovated to downtown luxury livingstandards with 24 residential units placed in service, all featuring granite counters, stainless steel appliances, dishwashers, in-unitlaundry, individual heat pumps, and elegant finishes. In 2017, Few Old Goats microbrewery leased the available commercial spaceon premise and opened a popular tasting room and outdoor patio beer garden. Residents enjoy affordable, convenient apartmentliving close to downtown attractions such the Jefferson Center for arts and entertainment, the Roanoke River greenway, andconvenient access to major employers such as Carilion Roanoke Memorial Hospital. With other community amenities such asprivate, off-street parking, community courtyard and BBQ, and an off-leash pet area, the West End Flats offer a competitive leasingadvantage over other downtown properties that creates reliable, long-term value for investors and an opportunity to acquire a stable,performing asset that will benefit from the continued growth and expansion of downtown Roanoke.

West End Flats: Investment Offering

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Gross Building Area✮ 19,336 SF

Buildings/Floors✮ One/Two

Land/Building Ratio✮ 3.89:1

Footings/Foundation✮ Concrete Slab

Structural System✮ Load bearing masonry walls with steel framing

Exterior Walls✮ Masonry

Roof Covering✮ Flat, rubber membrane

Sprinklers✮ 100% Sprinkled

Windows✮ Insulated glass on aluminum frame

HVAC:✮ Individual Heat Pumps

Elevators✮ None

Other Site Improvements✮ Paved surface parking lot, landscaping, concrete walkways & patio.

Plumbing & Electric✮ All replaced in 2016

First Floor Units✮ 8

Second Floor Units✮ 16

Commercial Unit✮ 1,512 SF GLA of open concept space with two ADA restrooms.

Building Access✮ Controlled key fob access on all exterior doors.

West End Flats: Property Details

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Downtown Roanoke 2019: By the Numbers

• Cost of living Index: 90.6 (National Avg: 100)• Median age of downtown residents: 35.7• Degree attainment: 50%• Unemployment: 2.6%

• $2.3 billion spending power in 5 mile radius• 200,000+ annual event attendees• 1,725 Downtown Units• 98% Multifamily Occupancy Rate

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Roanoke, Virginia: Stable Employment Base

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Roanoke, Virginia: On the Map

• Roanoke - Top Adventure Town - Large Town Category | Blue Ridge Outdoors Magazine | 2019• Roanoke - Most Affordable Destinations for a Fall Getaway | Travel + Leisure | 2019• Roanoke named an All-America Hall of Fame City by the National Civic League | 2019• Roanoke named one of the Top 100 Best Places to Live by Livability | 2019• Smith Mountain Lake - 100 Best Bass Lakes | Bassmaster Magazine | 2019• Dragon's Tooth - "Epic Views Every Hiker Should See" | Men's Journal | 2019• McAfee Knob - Best Section of the Appalachian Trail - Best of the Blue Ridge by Blue Ridge Outdoors Magazine | 2019• Roanoke Makes List of "The 7 Most Epic, Secret Mountain Bike Trails in America" by Men's Journal | September 2018• Roanoke Named a "Top Destination for a Solo Road Trip" by CarRentals.com | August 2018• Roanoke Named One of the "Top 6 Secret Mountain Bike Destinations in the U.S." by Bicycling Magazine | July 2018• Virginia's Blue Ridge designated a Silver-Level Ride Center™ by the International Mountain Bicycling Association | May 2018• Roanoke named one of the "25 Most Beautiful East Coast Destinations" by Vacation Idea | April 2018

• Roanoke named a "Featured Trail Town" by American Trail Running Association | March 2018• Roanoke named a Favorite Travel Destination by Expedia | March 2018• Roanoke named a "2018 Best Affordable Place to Live" by Livability | February 2018• Roanoke named a "Top U.S. Destination for 2018" by AARP | January 2018• Roanoke named one of "25 Great Scenic Places to Retire" by Forbes | November 2017• Roanoke named one of "25 U.S. Cities That Millennials Can Afford - and Actually Want to Live In" by The Penny Hoarder | July 2017• Roanoke named one of "The 20 Best Mountain Towns in America" by Men's Journal | May 2017• Roanoke named one of the "20 Greenest Cities in the Nation" by Expedia Viewfinder | April 2017

• One of the "South's Best Places to Retire" by Southern Living | 2016• Roanoke named one of the "10 Best St. Patrick's Day Cities in the United States" by Bustle | 2016• Town of Floyd named one of the "South's Best Small Towns" by Southern Living | 2016• Salem named one of the "20 Best Places in Virginia to Start a Business" by NerdWallet | 2015• Smith Mountain Lake named the "Best Lake in Virginia" by MSN Travel | 2015• Town of Floyd voted by USA Today Travel 10Best as one of the "Best Southern Small Towns" | 2015• Blue Ridge Parkway named one of the best scenic drives in the South - USA Today Travel | August 2014• Next Great Neighborhood: Downtown Roanoke - Southern Living | November 2013

Roanoke, Virginia: Awards & Accolades

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Virginia is for Craft Beer Lovers

The craft beer scene has exploded across the Roanoke Valley. The region is home to almost 30 local breweries and micro-breweries.MicroFestivus is an annual festival held in Downtown Roanoke that celebrates the beer culture of the region, offering tastings of awide variety of beers from breweries throughout the mid-Atlantic.

✮ Parkway Brewing Company739 Kessler Mill Road, Salem

✮ Olde Salem Brewing Company21 E. Main St., Salem

✮ Deschutes Tasting Room315 Market St. SE, Roanoke

✮ Starr Hill Pilot Brewery6 Old Whitmore Avenue, Roanoke

✮ Sunken City Brewing Company40 Brewery Drive, Hardy

✮ Chaos Mountain Brewing3135 Dillons Mill Road, Callaway

✮ Flying Mouse Brewery221 Precast Way, Troutville

✮ Big Lick Brewing Company409 Salem Ave, SW, Roanoke

✮ Soaring Ridge Craft Brewers523 Shenandoah Ave. NW, Roanoke

✮ Three Notch’d Brewery24 Campbell Ave. SE, Roanoke

✮ Barrel Chest Wine & Beer4035 Electric Rd, Suite B, Roanoke

✮ Twin Creeks Brewing Co.111 S. Pollard St., Vinton

✮ Hammer & Forge Brewery70 Main Street, Boones Mill

✮ A Few Old Goats Brewing515 8th St. SW, Ste. 228, Roanoke

✮ Jack Mason’s Brewing400 E. Ridgeway St., Clifton Forge

✮ White Rock Brewery2117 Bruno Dr., Goodview

✮ Bull & Bones1470 S Main St. Suite 120, Blacksburg

✮ Right Mind Brewing1410 South Main Street, Blacksburg

✮ Rising Silo Farm Brewery2351 Glade Road, Blacksburg

✮ River Company Brewery6633 Viscoe Road, Fairlawn

✮ Sinkland Farms Brewery3060 Riner Road, Christiansburg

✮ Apocalypse Ale Works1257 Burnbridge Rd. Forest

✮ Beale’s Brewery541 Grove Street, Bedford

✮ Great Valley Farm Brewery60 Great Valley Ln, Natural Bridge

✮ Devils Backbone Outpost50 Northwind Lane, Lexington

West End Flats: Typical Unit

West End Flats: Additional Property Photos

West End Flats: Additional Property Photos

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On Site Microbrewery: A Few Old Goats

The Goats came to Roanoke from the land ofCleveland, OH. They met in Roanoke and shared apassion for beer. After years of home brewing together,they finally made the leap to open their own brewery.

AFOG Brewing is located in the west end of Roanokeinside the West End Flats and has a two barrel system.Beer styles include Kolsch, Lager, IPA (both WestCoast and NE) Stouts, Sours, Porters, & Barrel Aged.

AFOG is a dog friendly establishment in a relaxingenvironment with close to 10,000 SF, including anoutdoor patio beer garden.

Lease AbstractGross Leasable Area (Interior Only): 1,512 SFTerm Commencement: August 1, 2017Term Expiration: July 31, 2021Renewal Options: One five year optionCurrent Monthly Rent: $2,700.00Rental Increases: $200/month annual increaseLandlord Pays: Real Estate Taxes, Property Insurance, Roof /Structure, Common Area Maintenance.Tenant Pays: All utilities, Janitorial, Maintenance/Repairs.

West End Flats: January 2020 Rent Roll

Unit Status Type SF Monthly Rent All Inclusive Amenities Fee Move In Lease Expiration

101 Occupied 1BR/1BA 683 $1,070.00 Yes $0.00 7/25/2019 7/31/2020102 Occupied 1BR/1BA 545 $999.00 Yes $0.00 11/1/2019 10/31/2020103 Occupied 1BR/1BA 598 $968.00 Yes $0.00 7/13/2019 6/30/2020104 Occupied 1BR/1BA 550 $732.00 No $99.00 8/10/2018 2/20/2020105 Occupied 1BR/1BA 604 $969.00 Yes $0.00 6/7/2019 5/31/2020106 Occupied 1BR/1BA 565 $815.00 No $99.00 8/8/2018 7/31/2020107 Occupied 1BR/1BA 643 $854.00 No $99.00 8/27/2018 8/31/2020108 Occupied 1BR/1BA 560 $999.00 Yes $0.00 10/1/2019 9/30/2020

201 Occupied 1BR/1BA 683 $819.00 No $99.00 11/16/2018 11/30/2020

202 Occupied 1BR/1BA 572 $769.00 No $99.00 1/30/2018 10/31/2020203 Occupied 1BR/1BA 618 $805.00 No $99.00 4/9/2016 7/31/2020204 Occupied 1BR/1BA 598 $819.00 No $99.00 1/3/2019 6/30/2020205 Occupied 1BR/1BA 600 $1,027.00 Yes $0.00 5/30/2019 5/31/2020206 Occupied 1BR/1BA 565 $699.00 No $99.00 6/5/2016 6/30/2020207 Occupied 1BR/1BA 559 $1,184.00 Yes $0.00 8/9/2019 7/31/2020208 Occupied 1BR/1BA 551 $735.00 No $99.00 3/8/2018 3/31/2020

209 Occupied 1BR/1BA 535 $769.00 No $99.00 12/29/2017 3/31/2020

210 Occupied 1BR/1BA 574 $683.00 No $99.00 6/1/2016 5/31/2020211 Occupied 1BR/1BA 471 $660.00 No $99.00 12/1/2018 5/31/2020212 Vacant 1BR/1BA 523213 Occupied 1BR/1BA 481 $675.00 No $99.00 5/8/2018 5/31/2020214 Occupied 1BR/1BA 523 $715.00 No $99.00 2/8/2019 1/31/2021

215 Occupied 1BR/1BA 486 $670.00 No $99.00 10/19/2018 10/31/2020

216 Occupied 1BR/1BA 491 $675.00 No $99.00 12/28/2018 6/30/2020

Totals: 13,578 $19,110.00 $1,584.00

All Inclusive

Occupied Units 7

Average Rent/ PSF/Month $1.74

Average Rent/Unit/Month $1,030.86

Rent + Amenities Fee

Occupied Units 16

Average Total Revenues/PSF/Month $1.51

Average Total Revenues/Unit/Month $842.38

West End Flats: 2018 & 2019 P&L

2018 P&L % Total Income 2019 P&L % Total Income INCOMEResidential Rental Income $ 196,897.05 78.89% $ 217,204.25 78.06%Commercial Rental Income $ 30,000.00 12.02% $ 31,000.00 11.14%Less: Concessions* -$ 18,513.92 -7.42% 0.00%Net Rental Income $ 208,383.13 83.49% $ 248,204.25 89.20%Utility/Other Expense Reimbursements $ 28,719.93 11.51% $ 24,152.23 8.68%Other Income $ 12,486.27 5.00% $ 5,891.92 2.12%TOTAL INCOME $ 249,589.33 100.00% $ 278,248.40 100.00%

EXPENSESProperty Manager & Marketing $ 32,205.47 12.90% $ 30,005.23 10.78%Maintenance & Repairs $ 53,503.03 21.44% $ 41,896.83 15.06%Property Insurance $ 3,803.94 1.52% $ 3,218.82 1.16%Real Estate Taxes** $ 4,187.76 1.68% $ 4,221.92 1.52%Electricity $ 4,796.55 1.92% $ 5,264.91 1.89%Water & Sewer $ 7,122.78 2.85% $ 6,273.65 2.25%Cable Service $ 20,357.28 8.16% $ 20,246.58 7.28%General & Administrative Expenses $ 15,347.41 6.15% $ 17,752.23 6.38%TOTAL OPERATING EXPENSES $ 141,324.22 56.62% $ 128,880.17 46.32%

NET OPERATING INCOME $ 108,265.11 43.38% $ 149,368.23 53.68%

* One time tenant improvement allowance for A Few Old Goats** Tax abatement in place through 2026

West End Flats: Proven Upside

Loan Assumptions:Purchase Price: $2,595,000.00LTV: 80%Interest Rate: 4.50%Amortization: 25 YearsMonthly Payment: $11,539.08

Pro Forma: Financial Modeling AssumptionsInflation Rate: 2.00% AnnuallyResidential Vacancy Rate: 5.00% of Rental Income3rd Party Management Fee: 6.00% of Total IncomeG & A Expenses: 2.00% of Total IncomeYear One Rent/Utility Reimbursements: Per Current Rent RollYear Two Rent/Utility Reimbursements: Assumes Transition to 100% All Inclusive RentsYear Two Electric Expense: Based on $50 Per Unit Monthly as Reported by ManagementCommercial Rent: Year One & Two Per Lease, Then 2.00% Annual IncreasesReal Estate Taxes: Tax Abatement in Place Through July 2026All Other Income/Expense Line Items: As Listed on Pro Forma

Pro Forma: Investment Performance MetricsImplied CAP Rate at Acquisition: 6.96%Implied Year One Cash on Cash Yield: 8.11%Implied DSCR: 1.30

Over the past 12 months, management has pursued an active value addcampaign to increase revenues and improve marketing advantage forthe property. Previously, management had been renting units,providing water/sewer and basic cable/internet, and then billing theresidents a monthly $99 amenities fee in addition to the rent for theseservices. Residents would then pay for their own electric servicedirectly with separate meters for each unit. Currently, management istransitioning to an all inclusive model where electric is included as wellas the other services mentioned and then the residents pay onemonthly amount for gross rent. With rental rates transitioning from$1.51 PSF to $1.74 PSF monthly based on this new model, not only isthere an arbitrage opportunity to generate income in excess of theactual utility costs, but this strategy also gives management acompetitive leasing advantage over other communities in the area bysimplifying payment for tenants and offering a convenience that isappealing to many. New ownership will also enjoy significant costsavings to be gained by placing the property under market rate thirdparty professional management, which will offer overhead reduction aswell as general & administrative expense reductions. Both from anincome as well as a management efficiency perspective, the propertyoffers investors immediate upside that is not reliant on improvingmarket conditions and an opportunity to add value to a stable,performing asset. Adjacent, please find the assumptions of thefinancial model and enclosed on the following page, the cash flow proforma. The first year demonstrates expected 2020 cash flows based onthe current rent roll and expense assumptions. Year two demonstratescash flows after all leases have transitioned to the all inclusive model.

West End Flats: 5 Year Pro FormaY1 (Current

Rents) % Total Income Y2

% Total Income Y3

% Total Income Y4

% Total Income Y5

% Total Income

Residential Monthly Rental Income PSF $ 1.46 $ 1.74 $ 1.77 $ 1.81 $ 1.85 Residential Rental Income $ 237,886.56 81.58% $ 283,508.64 88.98% $ 289,178.81 88.98% $ 294,962.39 88.98% $ 300,861.64 88.98%Less Vacancy/Credit Loss (5%) -$ 11,894.33 -4.08% -$ 14,175.43 -4.45% -$ 14,458.94 -4.45% -$ 14,748.12 -4.45% -$ 15,043.08 -4.45%Adjusted Residential Rental Income $ 225,992.23 77.50% $ 269,333.21 84.53% $ 274,719.87 84.53% $ 280,214.27 84.53% $ 285,818.55 84.53%

Commercial Rental Income $ 32,400.00 11.11% $ 34,800.00 10.92% $ 35,496.00 10.92% $ 36,205.92 10.92% $ 36,930.04 10.92%0.00%

Net Rental Income $ 258,392.23 88.61% $ 304,133.21 95.45% $ 310,215.87 95.45% $ 316,420.19 95.45% $ 322,748.59 95.45%

Utility Reimbusement (Y1 Per Rent Roll) $ 19,008.00 6.52% $ - 0.00% $ - 0.00% $ - 0.00% $ - 0.00%Other Reimbursements (Y1=T24 Average) $ 2,134.77 0.73% $ 2,177.47 0.68% $ 2,221.01 0.68% $ 2,265.44 0.68% $ 2,310.74 0.68%Other Income (Y1=T24 Average) $ 12,065.10 4.14% $ 12,306.40 3.86% $ 12,552.52 3.86% $ 12,803.58 3.86% $ 13,059.65 3.86%

TOTAL INCOME $ 291,600.10 100.00% $ 318,617.07 100.00% $ 324,989.41 100.00% $ 331,489.20 100.00% $ 338,118.98 100.00%

EXPENSES

3rd Party Property Management (6%) $ 17,496.01 6.00% $ 19,117.02 6.00% $ 19,499.36 6.00% $ 19,889.35 6.00% $ 20,287.14 6.00%Maintenance & Repairs (Y1=T24 Average) $ 47,765.01 16.38% $ 48,720.31 15.29% $ 49,694.71 15.29% $ 50,688.61 15.29% $ 51,702.38 15.29%Property Insurance (Y1=2019 Premium x 102%) $ 3,283.20 1.13% $ 3,348.86 1.05% $ 3,415.84 1.05% $ 3,484.15 1.05% $ 3,553.84 1.05%Real Estate Taxes (Y1=Per Roanoke City GIS) $ 4,256.08 1.46% $ 4,341.20 1.36% $ 4,428.03 1.36% $ 4,516.59 1.36% $ 4,606.92 1.36%Electricity (Y1 =2019 x 102%; Y2 = $50/unit/month $ 5,370.21 1.84% $ 14,400.00 4.52% $ 14,688.00 4.52% $ 14,981.76 4.52% $ 15,281.40 4.52%Water & Sewer (Y1=2019 x 102%) $ 6,399.12 2.19% $ 6,527.11 2.05% $ 6,657.65 2.05% $ 6,790.80 2.05% $ 6,926.62 2.05%Cable Service (Y1=2019 x 102%) $ 20,651.51 7.08% $ 21,064.54 6.61% $ 21,485.83 6.61% $ 21,915.55 6.61% $ 22,353.86 6.61%G & A Expenses (2% of Total Income) $ 5,832.00 2.00% $ 6,372.34 2.00% $ 6,499.79 2.00% $ 6,629.78 2.00% $ 6,762.38 2.00%TOTAL OPERATING EXPENSES $ 111,053.13 38.08% $ 123,891.38 38.88% $ 126,369.21 38.88% $ 128,896.59 38.88% $ 131,474.52 38.88%

NET OPERATING INCOME $ 180,546.97 61.92% $ 194,725.69 61.12% $ 198,620.20 61.12% $ 202,592.61 61.12% $ 206,644.46 61.12%

Annual Debt Service -$138,468.99 -47.49% -$138,468.99 -43.46% -$138,468.99 -42.61% -$138,468.99 -41.77% -$138,468.99 -40.95%

Cash Flows Before Taxes $ 42,077.98 14.43% $ 56,256.70 17.66% $ 60,151.22 18.51% $ 64,123.62 19.34% $ 68,175.47 20.16%

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West End Flats: Tax Map & Aerial Photo

515 8th Street SW Roanoke, VA 24016

1.742 Acre Site