parc 7 at greensboro station

I

Tysons Premier Urban district

Our redevelopment vision for Pike 7 Plaza is to

transform the existing strip center into “Parc Seven,”

a premier transit oriented mixed-use development

located in the heart of Tysons Corner. With the

project being steps from the new Greensboro Metro

Station, we envision Parc Seven as a destination with

an unparalleled amenity-rich environment. Our

Development Team crafted a leasing, financing, and

design plan that implements clever phasing and

design to convert the existing strip mall into a trendy

2.8 million square-foot urban Entertainment District.

It features roughly 460,000-SF of retail, 585,000-SF of

office, a 270,000-SF hotel, 563,000-SF of multifamily

rentals with an additional 151,000-SF of

condominiums, and 105,000-SF of community space.

University of Maryland NAIOP Development Team

March 2014

LEFT BLANK INTENTIONALLY

Acknowledgements

Much appreciation and many thanks to everyone on the team who worked hard

and contributed many hours to the creation of this report and provided invaluable

insight:

Chau Pham Development Team Aaron Loeb

Amy Weber

Ryan Smyth

Samuel Vana

Tyler Krehbiel

Taylor Cooper

Tatiana Joseph

Meghan Walsh

Timur Ryspekov

Anthony Notarfrancesco

TABLE OF CONTENTS

I. Project Summary .................................................................................................... 8

Strategy ............................................................................................................................................................... 10

Site Plan .............................................................................................................................................................. 11

II. Site Analysis .......................................................................................................... 12

Location ............................................................................................................................................................... 12

Traffic and Mobility .......................................................................................................................................... 12

Zoning/Regulatory Conditions ....................................................................................................................... 14

Community Interests ....................................................................................................................................... 14

III. Development Plan and Design .............................................................................. 15

Traffic, Circulation and Parking ..................................................................................................................... 15

Architecture and Landscape ........................................................................................................................... 19

LEED ..................................................................................................................................................................... 21

IV. Market Analysis .................................................................................................... 22

National Economy............................................................................................................................................. 22

Local Conditions ................................................................................................................................................ 22

Market Overview .............................................................................................................................................. 26

Market ................................................................................................................................................................. 27 Office Market .................................................................................................................................................................... 27 Retail Market ..................................................................................................................................................................... 29 Housing Market ................................................................................................................................................................ 31 Hotel Market ..................................................................................................................................................................... 34 Civic Center ........................................................................................................................................................................ 34

V. Financial Analysis ................................................................................................. 36

Introduction ....................................................................................................................................................... 36

Acquisitions ........................................................................................................................................................ 36

Assumptions ....................................................................................................................................................... 37

Phasing ................................................................................................................................................................ 54 Phase I ................................................................................................................................................................................. 55 Phase II ................................................................................................................................................................................ 56 Phase III ............................................................................................................................................................................... 57 Phase IV .............................................................................................................................................................................. 58

Project Schedule ............................................................................................................................................... 59

VI. Appendices ........................................................................................................... 60

I. Team Members ........................................................................................................................................ 60

II. Site Analysis Supplement ................................................................................................................... 62

III. Design Supplement .............................................................................................................................. 64

IV. Market Supplement ............................................................................................................................. 70

V. Financial Supplement .......................................................................................................................... 72

VII. Faculty Advisor .................................................................................................................................... 108

VIII. Consultants .......................................................................................................................................... 109

UNIVERSITY OF MARYLAND

Colvin Institute of Real Estate Development

School of Architecture, Planning & Preservation

The 2014 NAIOP Capital Challenge

Maryland/DC Intercollegiate Real Estate Case Competition

8 UNIVERSITY OF MARYLAND

PROJECT SUMMARY

Being Located in Tysons Corner, Virginia; Parc Seven will be an exciting transit oriented mixed-use development, abutted by the new Silver Line Metro Station known as Greensboro. Envisioning a destination with an unparalleled amenity-rich environment, our Development Team crafted a leasing, financing, and design plan that implements clever phasing and design to convert the existing strip mall into a 2.8 million square-foot urban district. This new development will contain 6 individual blocks that will support a mixture of office, retail, entertainment, civic, and living options. Parc Seven features roughly 460,000-SF of retail, 585,000-SF of office, a 270,000-SF hotel, 563,000-SF of multifamily rentals with an additional 151,000-SF of condominiums, 47,000-SF of community civic space, and nearly 60,000-SF of open space that includes; an urban plaza designated by a grand arch connecting Parc Seven users to the metro, a large outdoor park that will support events and provide outdoor seating to our premier food market and open-air cafés. Rapidly transforming Tysons Corner and our project will appeal to the next generation of office users and residents who prefer mass transit and an amenity rich urban lifestyles.

Total Development Costs $685,839,146 ($240.88 PSF)

Total Equity $240,043,701 (35%)

Total Debt $445,795,445 (65%)

Project Program 2,864,529 GSF

Retail 254,473 GSF

Entertainment 204,200 GSF Office 584,846 GSF

Hotel (250-Key) 270,738 GSF (750-SF per room)

Residential – Rental 562,739 GSF (550 Units) Condominiums 150,983 GSF (120 units)

Civic Space 46,831 GSF

Park Space 24,000 GSF Urban Plaza 33,443 GSF

Subterranean Gallery Walk 17,300 GSF Infrastructure 200,653 GSF

Parking 514,123 GSF (2,116 Spaces)

Overall Project Construction Timeline 129 Months (10 years, 3 months)

Phasing Four Phases (5-years each)

Start Preconstruction July 2014

Project Delivery March 2025

Loan Request $445,795,445

Requested Terms 65% LTV, 5.25%, 25-yr term, non-recourse, 1.25 DCR

Investor Returns Entire Project

After-Tax Sale Proceeds (Yr-10) $605,976,130

Leveraged ATCF IRR 25.52%

Leveraged BTCF IRR 27.07%

Unleveraged ATCF IRR 19.39%

Profit (Yr-1) $52,661,104

ROI (1st Full Year) 21.9%

TOTAL PROJECT BREAKDOWN


Phase I (Block “C”)

Total Development $93,262,041 ($240.88 PSF) Total Equity $32,641,714 (35%)

Total Debt $60,620,326 (65%)

Use Program 394,994 GSF Office 355,566 Retail 11,149

Parking 27,619 (114 spaces)

Construction Timeline 52 Months (5-years) Start Preconstruction July 2014

Construction January 2015 Lease-up Start June 2016

Delivery May 2019 .

Investor Returns

After-Tax Sale (Yr-10) $135,066,502 Leveraged BTCF IRR 22.20% Leveraged ATCF IRR 18.94%

Unleveraged ATCF IRR 14.58% Profit (Yr-1) $4,089,717

Phase III (Block “D”,”E” & “F”)


Total Debt $60,620,326 (65%)

Use Program 1,135,404 GSF Condominiums 150,983 (120 units)

Apartments 562,739 (550 units) Retail 164,505

Parking 257,177 (1,058 spaces)


Construction January 2020 Lease-up Start April 2021

Delivery March 2023

Investor Returns

After-Tax Sale (Yr-10) $325,217,966 Leveraged BTCF IRR 19.72% Leveraged ATCF IRR 14.27%

Unleveraged ATCF IRR 10.71% Profit (Yr-1) $4,547,107

Phase II (Block “B” & demo “A” & “F” for parking)


Total Debt $60,620,326 (65%)

Use Program 778,404 GSF Office 229,280 Retail 119,310 Hotel 270,738 (250 Key)



Construction January 2018 Lease-up Start May 2019

Delivery April 2021

Investor Returns

After-Tax Sale (Yr-10) $213,555,321




Profit (Yr-1) $5,986,521

Phase IV (Block “A”)


Total Debt $60,620,326 (65%)

Use Program 280,987 GSF

Civic 46,831

Retail 163,909


Construction Timeline 52 Months (5-years) Start Preconstruction June 2020


Delivery March 2025

Investor Returns

After-Tax Sale (Yr-10) $83,864,507




Profit (Yr-1) $2,124,458

PROJECT PHASING BREAKDOWN


STRATEGY

Unique to Our Project:

Phased site development plan crafted to mitigate risk and breakdown project into financially independent subdivided blocks that allow for market driven fluidity in use programming

Strategic phasing enables property to generate operating income over 5½-year period totaling about $25m

Robust development plan delivers high density which creates critical mass to ensure our specialized mix of uses are activated

Active 24/7 environment

Pedestrian-focused infrastructure that promotes traffic calming and walkability

Unique architectural features lend to the sites placemaking and character by capitalizing on our sites unique features and frame view corridors (the “Parc Seven Archway", main project gateway, urban plazas, and unique art installations)

The 47,000-SF “Tetrault Science and Learning Center” will serve as a destination for Northern Virginia’s new Science Center, IMAX Theater, and public exhibition space.

The 17,300-SF “Grove Market” provides local healthy food options to fill void in market and create a strong draw within the community

The 17,000-SF subterranean “Gallery Walk” will exhibit year-round art installations, artisan markets, and community events that provide a cultural draw

Phased urban retail strategy integrating a focused merchant offering that will support a mix of national and local retailers at the “Shoppes at Parc Seven”

Will become Tyson’s premier “Entertainment District” featuring over 200,000-SF of offerings

Class-A office with close proximity to a variety of retail, public spaces, housing, and entertainment options with accessibility to metro will draw the next generation of high-tech office users

200-Key Luxury Boutique Hotel — a perfect marriage between design, art, and technology

Our site’s proximity to the metro is a catalyst for high density transit-oriented development (TOD) to replace the currently underutilized suburban retail center. Our strategy is to reposition the site into an Entertainment District with a dense urban retail core surrounded by complementary secondary uses such as multifamily rentals, condos, class-A office, a boutique hotel, and attractive public space. The combination of metro access, expressive architecture, vibrant retail, tech friendly office, stylish hotel and a new science center are the elements that make Parc Seven unique among other existing and proposed developments in Tysons Corner.


SITE PLAN

Figure 1.1 - Proposed Conceptual Site Plan for Parc Seven and Designated Blocks.

Figure 1.2 - Proposed Phasing Plan.

Phase One – Office, Parc Seven Archway,

Retail, & Parking

Phase Two – Office, Retail, Entertainment

Options, Hotel, & Parking

Phase Three – Apartments, Condos, Retail,

Road Infrastructure, Grove Market,

Subterranean Gallery Walk, & Parking

Phase Four – Tetrault Civic Center, Retail, &

Parking


SITE ANALYSIS

LOCATION

The property, Pike 7 Plaza is located in the southern portion of the Tysons Central District. The address, 8350 Leesburg Pike, Vienna Virginia, is at the intersection of Leesburg Pike and Gosnell Road (Figure 1). It is less than a mile from Tysons Galleria, and within one fourth of a mile of the new Greensboro Metro Station on the Silver Line. Pike 7 Plaza is 12.8 acres, and currently holds a suburban retail center, facing Leesburg Pike. To the west of the site are residential neighborhoods and to the northeast and southwest are retail uses.

Figure 1.3 Map locating project site. Image Source Underlay: Google Maps.

TRAFFIC AND MOBILITY

Leesburg Pike is the primary roadway providing vehicular access to the site. It connects to the Capital Beltway I-495 and the greater Washington Metropolitan Area, and to the Dulles Access Road 267 which leads to the Dulles International Airport. It is also convenient to I-66 which links to Arlington and Washington, D.C. on the east and Fairfax on the west.

The secondary access to the site is via Gosnell Street, which intersects Route 123 and Westpark Drive linking to the Tysons Galleria. From Dulles Toll Road to Tysons Corner, Leesburg Pike has an Average Daily Traffic (ADT) count of 61,000 automobile trips. This high ADT count makes this site desirable. However, the steep topography blocks much of the retails’ visibility from the road (Figure 4). The majority of the site is blocked by the highway and cannot be seen easily from vehicles going north on Leesburg Pike (Figure 6). There is better visibility for vehicles driving southward, which is why acquiring the plot of land in the northern corner is


essential. This lot will allow us to place an architecturally unique landmark, the STEM Civic Center, on the north-most corner of the site to capture the attention to the site. The corner must be treated as a vehicular landmark/gateway for drivers.

Figure 4. View 1 from Leesburg Pike driving north.

Figure 6. View 2 from Leesburg driving south.

The southeast corner of the site is closest to the Greensboro metro station, which makes it the natural gateway for pedestrians. Residents and visitors will enter the site through an arch which is an architectural feature of the office building above.

Tysons Corner is currently an auto-oriented suburban area. Approximately eighty percent of commuters drive to work. Eight percent of commuters use public transportation, three percent walk and two percent use a taxicab, motorcycle, bicycle, or other means. Our transit-oriented development will help reduce automobile dependency and encourage multi-modal connectivity.

Figure 5. Map of site, showing vehicular movement &

viewpoints.


ZONING/REGULATORY CONDITIONS

The site is currently zoned C-7 Commercial District. However, the Planned Tysons Corner Urban District or PTC District is defined in the adopted Comprehensive Plan to implement a larger mix of uses and densities to transform Tysons from a suburban office park into an urban, mixed-use, transit oriented, bicycle and pedestrian oriented community. We plan to rezone the property and have accounted for this additional lead-time in the project schedule.

Parc Seven is structured to take advantage of this new zoning district that encourages the highest densities closest to the transit station. The site is located within one-quarter mile of the station, informing our strategy for development. Block C, the closest to the Metro, will be a 355,570 sf, 16 story office tower. Moving north on Leesburg Pike will be an 11-story hotel, attached to a 10-story office building (Building B), and a 4 story civic center (Building A). The southern portion of the site includes Building F, 8 stories of condominiums. Buildings E and D are apartment buildings at 8 and 6 stories, respectively.

COMMUNITY INTERESTS

The community of Tysons Corner would like to see a transformation of the region. It is currently dominated by the car and very suburban in nature. There is a push to create more walkability and a grid of streets. The anticipation of Metro has been a driver for this type of development. There is support from the community to increase the amount of green space and utilize public transportation as a means of travel.

Tysons Corner is seeing a mix of uses and an increase in density. The Board of Supervisors in Fairfax County suggested that the sub district of our proposed development would be ideal for a museum or other arts and education related use. Our development plan is in line with these interests and addresses the goals of the community for the future of Tysons Corner. We intend to proactively engage with the community throughout the duration of the project to ensure a mutually beneficial environment to facilitate the transformation of Tysons Corner.

There is a drive in Tysons Corner to facilitate growth in the technology research market. By incorporating a science and technology museum in the civic building, Parc Seven will be at the forefront of this trend. Not only will the residents be able to lead the technology sector through research and development, but also exhibit their work in the museum for others to discover. Exhibitions curated in the museum will be geared towards this theme.


DEVELOPMENT PLAN AND DESIGN

TRAFFIC, CIRCULATION AND PARKING

Overview

Our proposed development for Parc Seven will increase density, which will stimulate property values in the surrounding areas. Taking advantage of this increased value can create enough revenue to pay for the entire projects infrastructure improvements.1 Economic analysis shows that introducing high levels of residences into the heart of “Edge Cities”, like Parc Seven, can create balanced lively communities that actually experience reduced traffic congestion. Our community can generate added wealth that supports a wide variety of amenities and activities including; an upgraded sensitively designed transit system.2 Parc Seven has good auto access but no residents and amenities other than retail. To balance the flow in and out of the project throughout the day; residential units, office, entertainment options, hotel, public gathering space and placemaking elements should be added. This will add more transit riders throughout the day and ultimately reduce dependence on the automobile with the opening of Greensboro Station.3 If implemented correctly, this development can pay for future public improvements.

Traffic

The primary access to Pike 7 Plaza is Leesburg Pike, which connects to the Capital Beltway I-495. Leesburg Pike also intersects with Dulles Access Road 267 which leads to the Dulles International Airport. Connections to Arlington, Washington, D.C., and Fairfax is also possible via I-66. The secondary access to the site occurs from Gosnell Street entering from behind the site.

Circulation

Visitors driving to the site will arrive southward on Leesburg Pike, while those who arrive via the metro will arrive northward from Greensboro Metro station. Pedestrians and vehicles may also enter the site from Gosnell Street. In line with the Fairfax County Comprehensive Plan, the proposed development has additional roadways to increase the network of streets. Figure 8 shows a diagram comparing the current circulation network to the proposed network. Dividing the site into six blocks allows more roads, which increases connectivity to the larger network. The additional roads will also mitigate future traffic that occurs with new, dense development. According to the Fairfax County Comprehensive Plan, the current service road behind the site is planned to become an avenue. This means that the new development must also face what could be an avenue in the future. Another road running east-west of the site is proposed as the main street of the development, named Grove Street. This street will allow vehicular access in both directions, along with bike lanes. Street parking will be on both sides to act as a buffer between pedestrians and vehicles. To alleviate traffic into the site, there will be three other access roads from Leesburg Pike. Individuals may also enter from the proposed avenue behind the site.

1 Tysons Corner Collaborative. “Taming Tysons Corner – Transforming the Quintessential Edge City”, date NA. 2 Tysons Corner Collaborative. “Taming Tysons Corner – Transforming the Quintessential Edge City”, date NA. 3 Tysons Corner Collaborative. “Taming Tysons Corner – Transforming the Quintessential Edge City”, date NA.


Figure 1. The current circulation network vs. the proposed network.

Mass Transit

The development of Parc Seven will raise demand for arrival by mass transit. To increase the use of Metrorail for trips to, from and within Tysons, a system of circulators is proposed in the Fairfax County Comprehensive Plan 2013. One of the conceptual circulator routes runs through the site (Figure 2). This will conveniently bring transit users directly to the main street of the site.


Figure 2. Conceptual circulator. Source: Fairfax County Comprehensive Plan (2013).

Cyclists and Pedestrians

Pedestrian movement is paramount to the site’s success. Even though the site is considered “very walkable” with a walk score of 77/1004, it is not pedestrian friendly. The high score is due to the site’s proximity to resources and amenities that can be accomplished on foot. However, the site is geared towards vehicles, lacking safe pedestrian connections to the site. The walk along Leesburg Pike is unpleasant due to the immediacy of the sidewalk to high-speed traffic.

In the proposed development, the pedestrian network is improved with more connections. Figure 10 diagrams the proposed pedestrian pathways, which are linked to the urban plazas at both entries, as well as the park within the development. Pedestrians coming from Greensboro Metro Station can enter through the southern gate arch into Parc Seven, which frames a view to the public art at the traffic circle. This guides pedestrians to Grove Street, connecting them to the park and urban plaza.

4 “Tysons corner Walk Score,” Walk Score, http://www.walkscore.com/score/8387-leesburg-pike-vienna-va-22182, accessed February 25, 2014.

http://www.walkscore.com/score/8387-leesburg-pike-vienna-va-22182


Figure 3. Pedestrian movement

The allowance for wide sidewalks gives room for trees and outdoor dining, ensuring pedestrian safety and accessibility. Grove Street has street parking to act as a buffer between pedestrians and vehicles (Appendix II.1 - “Site Analysis Supplement”). To keep cars from speeding, the speed limit will be low. The higher connectivity and pedestrian-friendly network will encourage higher foot traffic, which is desirable for retail and businesses. To encourage multi-modal transportation, bicycle lanes will be designated for every road throughout the development with connections to bike racks and storage facilities. The typical street plan diagram illustrates a variety of street sections featured in the development (Appendix II.2 - “Site Analysis Supplement”). Bicycle parking ratios recommended by the Fairfax Comprehensive Plan were used to determine the amount of bike racks needed shown in Appendix II. 3 - “Site Analysis Supplement”.

Parking

To alleviate traffic, there will be parking throughout the site at almost every block. This will make it convenient for both visitors and those who live or work in the development. The amount of parking spaces allocated is based on the required parking ratios listed in the Fairfax County Comprehensive Plan and the Fairfax Zoning Ordinance Article 11. The chart in Appendix II.4 - “Site Analysis Supplement” shows the required parking ratios for the site based on its proximity to the Greensboro Metro Station in comparison with requirements prior to the addition of the transit station. With the new metro station nearby, the public transit proximity would be great enough to reduce expected parking needs and lower costs.


With Fairfax County’s push towards lowering vehicular traffic into the area, there is currently no on-site parking allotted for Greensboro Metro Station. When the Silver Line opens, the only station with on-site parking lot will be Wiehle Avenue, in Reston, which will have 2,300 parking spaces. The closest station providing parking is the McLean Metro Station, which has a privately owned interim lot that accommodates 700 vehicles. The next closest metro station with on-site parking is West Falls Church Metro Station, which has 2,009 parking spaces and charges $4.75 per day.5 This rate will be charged for Parc Seven’s hourly rate parking. For the residential units, the rate will be $75 per month per vehicle. Parking must be charged to encourage people to use sustainable modes of transportation.

ARCHITECTURE AND LANDSCAPE

Design

The plan embraces a boulevard through the site in accordance with the Fairfax County Comprehensive Plan’s proposed streets. This thoroughfare directs transit users through the southern arched threshold beneath the office building to the retail and entertainment offerings. This design is a hybrid of smart growth urban planning and energy-efficient architecture. The architectural features of the buildings contend with the high-tech, trendy focus for the development.

Buildings

Each building is wrapped with a mix of national and local retailers on the first two floors. The uses work in correlation to create harmonious daily experiences and a 24/7 environment.

Block A

The Civic Center is located at the northeastern point of the site and serves multiple functions, both in façade design and programming. The façade is prominent and unique to serve as an icon and notable approach to Parc Seven. The roof of the structure becomes a ramp at the ground level and invites pedestrians to the rooftop seasonal restaurant and breathtaking views. National tenant are highly visible from Leesburg Pike, drawing customers to the site. (See Appendix III.1 – “Tetrault Performing Arts Center Rendering”)

Block B

Parallel to Leesburg Pike, the hotel at Parc Seven accommodates 250 guest rooms. Featuring an expansive, but technologically engineered curtain wall system, the façade of the hotel is open and light filled while serving as noise insulation from the metro and busy road adjacent. The vibrant décor and sustainable architecture lend an innovative, creative vibe that invites travelers and visitors to work, connect, and play. (See Appendix III.2 – “Zetta Hotel Precedent”)

5 “West Falls Church-VT/UVA,” Washington Metropolitan Area Transit Authority, http://www.wmata.com, (February 25, 2014).

http://www.wmata.com/


Block C

Block C celebrates an architectural quality and technology beyond the 21st century. The southeastern gateway is a mix of tech-savvy office and retail. This building is open to pedestrians at the ground level featuring a voluminous 40-foot open-air, covered space surrounded by daily use retailers. Here, office users might converse over coffee or visitors might admire the art installations. This block also features the grand Archway into Parc Seven plaza—given the site its iconic name. This entrance was strategically designed to greet metro riders and guide them into the project. The archway also serves to frame the view corridors into the project and provide access to the subterranean “Grove Gallery Walk” (III.5 – Renderings of “Parc Seven Archway Entrance into the Project”).

Blocks D and E

Situated the furthest from Leesburg Pike, these residential buildings take full advantage of the privacy with large windows to the courtyards. Both buildings are lifted on a podium of retail, creating an elevated outdoor terrace for the residents. The massing of the two buildings is carved to accommodate the open air Grove Market and plaza space, allowing the Grove Market vendors to spill out on the plaza space for entertainment and community events. The high-end fitness center is strategically placed at the corner of Gosnell Road and Grove Street. Due to its location, the fitness center is also provided the opportunity to offer highly visible classes on the plaza space. (Appendix III.3 – “Grove Market and Apartment Rendering). Also being installed on this block is the entrance to the subterranean artist Gallery, “The Grove Gallery Walk” that terminates underground at the parking garage for Block “C’s” office building (see Appendix III.5 – “Grove Gallery Walk Renderings”).

Block F

Building F will consist of luxury condominiums overlooking the Circle at Parc Seven. It will include multi-level retail, connected by a pedestrian walkway for convenience to other amenities. This clock will also abut the Traffic Circle. (Appendix III.4 – View of Condominiums from Grove Traffic Circle”).

Landscape, Site, Parking and Open Space.

The existing conditions and site topography are used as an advantage to the basis of the site design. The elevation drop of 30 feet is embraced with structured parking on the first and second floors with access from Leesburg Pike, Grove Street and the secondary streets. While allowing for over 2,000 parking spaces, this design tucks away the structured garages from the public view. While the car is allowed on site, it is promptly directed to parking garage entrances along the outer roads. By keeping the car to the exterior, other modes of transportation are promoted to traverse the site. Where the car is allowed through the site, a variety of traffic calming strategies will be implemented in the final design of Parc Seven. This may include a transition of pavement that will suggest slower speeds are required and keep pedestrians as the focus.

The public park located between Blocks D and E functions as an extension of Grove Market as well as a gathering space for entertainment. This space features hardscaping and landscaping that encourages an exchange of merchandise and ideas. A connection to the Grove Gallery Walk located in the park will encourage the community to experience the subterranean park and walkway. The 17,000-SF “Gallery Walk” will exhibit year-round art installations, artisan markets, and community events. (see Appendix III.5 – “Grove Gallery Walk Renderings”).


LEED

The Fairfax County Comprehensive Plan indicates that new developments should be more sustainable than the Tysons Corner of today. The Department of Planning and Zoning in Fairfax County also requires certain levels of “green” certification to be approved. A widely accepted method of environmental measures is the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) program. The density of Parc Seven as well as other sustainable features in the site is expected to consume less energy than the current development, anticipating obtaining close to net-zero usage. Various design strategies, uses and goals for our site are estimated to certify the buildings of Parc Seven with a LEED Silver rating, or better. A LEED Scorecard has been provided in the Appendix that more fully communicates the sustainability of the development.


MARKET ANALYSIS

NATIONAL ECONOMY

Economic growth will strengthen in 2014, averaging 2.7% or better for the year.9 Economic indicators released since the last national update suggests the economy accelerated in the second half of 2013. The gains will come as business and consumer confidence strengthens and Europe begins to emerge from its long slumber, brightening overseas sales prospects. Increased business spending, growing consumer confidence, the continued housing renaissance and healthy export gains all add up to an increasingly strong economy, which will support net monthly hiring that could hit 200,000 new jobs.10

The December employment report from the Bureau of Labor Statistics (BLS) revealed mixed news on the state of the labor market. According to the Kiplinger Report, consumer spending and confidence is still way below normal levels by the standards of past economic expansions. As job growth returns and consumers feel more secure, a cycle of spending will create more consumer income that produces more spending. If this occurs in 2014, quarterly growth is likely to exceed an annualized pace of 3%. Retail sales will accelerate steadily in 2014, gaining between 5.2% and 5.7%, following a more modest 4.5% increase in 2013.11 A stronger economy, enjoying declining unemployment plus wage gains, will help. Sales in first-quarter 2014 are expected to top year-earlier figures by around 5.5%--nearly double the pace of growth seen at the close of the first quarter of 2013. In 2014, retail sales will also be sustained by about a 3% increase in personal income. In addition, consumers will have adapted to the 2013 increase in the payroll tax and will be no longer as hesitant to spend. 12

LOCAL CONDITIONS

Fairfax County had a population of about 1.12 million persons. Based on the current comprehensive plan, Fairfax County has the capacity to add an additional 300,000 residents over the next three to four decades. Over 44,000 of these residents are expected to be added by 2020. Although the number of older adults will grow faster than other age groups, children under 20 will continue to increase in number.13 They also have approximately 410,000 housing units, and about 400,000 households demonstrating an average household size of 2.76.14

Fairfax County is in the process of becoming a Metro-based market with new stations from Tysons Corner to Reston and further on to Dulles International opening in 2014. In terms of economic growth, competition in the office market from the west is not new, however it is likely to intensify as Tysons becomes a valid choice for companies and agencies seeking a Metro location along with a substantial supply of new office buildings

9 Kiplinger - http://www.kiplinger.com/tool/business/T019-S000-kiplinger-s-economic-outlooks/#VL3GrsbFp757YtAU.99 10 Kiplinger - http://www.kiplinger.com/tool/business/T019-S000-kiplinger-s-economic-outlooks/#VL3GrsbFp757YtAU.99 11 Bureau of Economic Analysis - http://www.bea.gov/newsreleases/national/pi/2014/pi1213.htm 12 Bureau of Economic Analysis - http://www.bea.gov/newsreleases/national/pi/2014/pi1213.htm 13 County of Fairfax, Virginia, “Responding Now and in the Future: Trends and Implications for Fairfax County Residents”. Oct 2013. 14 U.S. Census Bureau, 1970, 1980, 1990, 2000 and 2010 Decennial Censuses, 2001 to 2025 estimates and forecasts, Fairfax County Department of Neighborhood and Community Services

http://www.kiplinger.com/tool/business/T019-S000-kiplinger-s-economic-outlooks/#VL3GrsbFp757YtAU.99




http://www.bea.gov/newsreleases/national/pi/2014/pi1213.htm

http://www.bea.gov/newsreleases/national/pi/2014/pi1213.htm


that will soon become available.15 Since 1980 the development of new office space in Tysons has been nearly equivalent to the amount of space developed in Arlington’s urban villages – 24.1 million square feet in Tysons vs. 27.5 million square feet in Arlington. The Silver Line will also connect Reston and Herndon to Metro with another 29.8 million square feet of office space resulting in a Silver Line office base larger than Arlington’s.

The Council of Governments (COG) cooperative forecasts indicate that between 2005 and 2030, Tysons will see the most new jobs when compared to its neighbors at 50,400 new jobs capturing 4.3% of the region’s job growth, about 2% higher than the Rosslyn-Ballston and Jefferson Davis Corridors.16

Mixed-use developments built correctly—adding density and developing underutilized land—will increase property values in the surrounding areas, in some cases doubling or tripling in value. Tysons will be well positioned to use this added value to pay for infrastructure improvements as well as help fund the transit system.17 Economic analysis shows that introducing high levels of residences into the heart of Edge Cities can create balanced, lively communities with reduced traffic congestion. The community can generate added wealth that supports a wide variety of amenities, and activities, including an upgraded, more sensitively designed transit system.18 Edge Cities have good auto access and a large unemployment base but few residents. To balance the flow in and out of a community, the proportion of residential units should be increased. This will add more transit riders and ultimately reduce dependence on the automobile

The total population in Tysons Corner was 19,627 in 2010. Of this, the average age was 35.8 years.20 In the census tract which Parc Seven exists the current population is 815 with a projected increase to 1,316 in the next 5 years.21 According to a study using the 2006-2010 American Community Survey Public Use Micro-data Sample (PUMS) the average in-migrant to Fairfax County was under the age of 30 and highly educated (Bachelor’s degree or higher). The average current resident is slightly older, but because of net in-migration, the area’s population is slightly younger. The chart below (Fairfax County Population by Age)22 echoes this trend. A combined average of 46% under the age of 35 is projected to continue through year 2030. While Tysons has a young population, 96.6 percent of residents have graduated high school23 (a large amount

15 Arlington Economic Development Research Paper. “Tysons and the Silver Line: Threat or Benefit?”, January 2012 16 Arlington Economic Development Research Paper. “Tysons and the Silver Line: Threat or Benefit?”, January 2012 17 Tysons Corner Collaborative. “Taming Tysons Corner – Transforming the Quintessential Edge City”, date NA. 18 Tysons Corner Collaborative. “Taming Tysons Corner – Transforming the Quintessential Edge City”, date NA. 20 2010 Demographic Profile

21 Fairfax County Department of Neighborhood and Community Services; Economic, Demographic and Statistical Research, 2013 22 U.S. Census Bureau and Fairfax County Department of Neighborhood and Community Services, Demographic Repots

2012 23 Educational Attainment, 2008 – 2012 American Community Survey 5-Year Estimates


being the in-migrants 25 years and older). 24 According to the Fairfax County Economic Development Authority, “Thirty-one percent of persons 25 and older in Fairfax County have a bachelor’s degree, and 27.5 percent have a graduate or professional degree—among the highest percentages in the United States. (U.S. Census Bureau)” 25

“Forecasts for the Washington metropolitan area, Northern Virginia and Fairfax County for population and jobs are shown in Figures 1 and 2 respectively. The metropolitan area is expected to grow from an estimated level of 5.4 million in 2010 to a forecast level of 8.3 million in 2050. Northern Virginia would grow from 2.4 million to 3.9 million, and Fairfax County would increase from 1.03 million to 1.56 million (intermediate forecast). Jobs would increase for 2010 to 2050 from 3.3 million to 5.7 million for the metropolitan area with Northern Virginia increasing from 1.4 million to 2.6 million, and Fairfax County from 680,000 to 1,280,000 (intermediate forecast) by 2050.”26

Households

Tysons Corner will see a large increase in rental units in the coming years as Metro’s Silver Line attracts a more transient demographic that favors mixed-used developments. Projects within a ½ mile radius of a Metro station are prime locations for dense apartment complexes.

Income

The latest Census Bureau’s American Community survey ranked Fairfax County as one of the wealthiest counties in the nation. Median household and family income has just reached pre-recession levels and is

24 http://www.fairfaxcounty.gov/demogrph/pdf/migration2006-2010.pdf 25 http://www.fairfaxcountyeda.org/sites/default/files/pdf/fairfax_facts.pdf 26 GMU Center for Regional Analysis: Forecast for Tysons Corner to 2050, Stephen S. Fuller, PhD, Director,

John McClain, AICP, Sr. Fellow And Deputy Director 9/17/2008

FAIRFAX COUNTY POPULATION BY AGE

Source: U.S. Census Bureau and Fairfax County Department of Neighborhood and Community Services,

Demographic Repots 2012

http://www.fairfaxcounty.gov/demogrph/pdf/migration2006-2010.pdf


expected to steadily increase in the coming years. The percentage of income spent on housing has increased for households that rent, but this has occurred in conjunction with rising incomes.

ESTIMATED MEDIAN INCOME AND MEDIAN FAMILY INCOME (2007-2012)

Year Median HH Income Median Family Income

2007 $105,200 $122,000

2008 $107,400 $126,900

2009 $102,500 $122,600

2010 $103,000 $122,200

2011 $105,800 $119,600

2012 $107,100 $124,800

Sources: Department of Neighborhood and Community Services and U.S. Census Bureau, 1980, 1990 and 2000 Decennial Censuses 2001 Supplementary Census Survey and 2002-2012 American Community Surveys. Note: Figures are rounded to the nearest $100.

The percentage of renter households spending 30% or more of their income on housing has risen over the past decade.

Source: U.S. Census Bureau, 1980, 1990, and 2000 Censuses and 2005 and 2011 ACS.

Parc Seven is poised to take advantage of the strong demographics at play in Tysons, and the larger region. It’s accessibility to Metro and focus on a mix of uses caters to highly educated, well paid, active individuals; and places Parc Seven among the most desirable developments in Tysons. These demographic factors influenced our projected rental rates, by allowing us to be aggressive.


MARKET OVERVIEW

NEW DEVELOPMENT AROUND THE GREENSBORO METRO STATION

PROJECT PLAN TYPE OFFICE SF RETAIL SFHOTEL

KEYS

RESIDENTIAL

UNITSOWNER COMMENTS

Greensboro

StationMixed-Use 1,999,364 170,000 400 1,615 The Meridian Group

Pending

approval

Tysons Central Mixed-Use 631,000 173,000 200 1,200 NVCommercial/Clyde's

Real Estate Group

Approved,

Total of 2.0 msf.

Greensboro

Park PlaceMixed-Use - 10,000 - 500 Beacon Capital

Pending

approval

Park Crest Residential - - - 300 Northwestern MutualUnder

Construction

TOTALS 2,630,364 353,000 600 3,615

The Silver Line, Envisioning A New Tysons Corner, Cushman & Wakefield, December 2013.

The Silver Line, Envisioning A New Tysons Corner, Cushman & Wakefield, December 2013.


MARKET

OFFICE MARKET

National Office Trends

With a stabilizing economy and increasingly better jobs reports in recent months the U.S. office market continues to improve. Overall employment only improved 1.4% but office using employment grew at 2.6% in 2013. Dallas/Ft. Worth, Chicago and Los Angeles were among the fastest growing markets in the U.S. and primarily driven by the technology sector. Vacancy rates dropped 50 basis points in 2013 to lowest their lowest level since 2009, with positive net absorption of 15 million square feet. Office development continued to rise, with 18.6 million square feet of new in 2013, nearly double 2012’s tally of 9.9 million square feet. Asking rates increased nearly 5% over the year

Tyson’s Office Market

Tysons Corner contains over 46 million square feet of office space making it one of the largest suburban office markets in the United States and the largest in the Washington, D.C. metropolitan area. The submarket which saw exponential growth over the past twenty years, is now home to countless nationally recognized companies including Capital One, Ernst & Young, Price Waterhouse Cooper, Federal Home Loan Mortgage Corporation (Freddie Mac), Booze Allen Hamilton, SAIC and many other non-profits and government contractors supporting the federal government. As a result the area with a population of only 20,000 sees a daytime population surge of 100,000.

The direct office vacancy rate during the fourth quarter of 2013 was 12.7 percent, representing a downward trend from 13.4 percent during the third quarter of 2013 and 14 percent at the end of 2012. Office rents reflect the soft market, with an average effective office rent of $21.35 per square foot at fourth quarter of 2013, down 2.1 percent from year-end 2012. The decreasing effective rents are due to the still elevated vacancy rate. However, the average asking office rents for new office space was $54.75 per square foot at year-end 2013.

If the Rosslyn, Ballston Corridor is any indication of what may happen in Tysons, “Within a quarter mile radius of the Metro, few properties deviate from the asking average rent by more than a few dollars. However, buildings with direct, internal Metro access were able to ask and approximately 6% premium over market averages. Given Fairfax County is encouraging a similar pattern of development along the Silver Line, within a quarter mile radius of Metro stops, this pattern is likely to be echoed.” 27

The new Silver Line connecting Washington D.C. with Dulles Airport has spurred area development through projects surrounding the Greensboro Metro Station are lagging behind other area stations. Developer Meridian Group recently purchased the former SAIC headquarters with plans to renovate three existing office properties at the site and eventually add more than 2 million square feet of mixed-use development on the 18-acre site. Cvent, Inc., an event management company, recently leased 130,000 square feet of newly renovated space in the building. Adjacent to the site NV Commercial and Clyde’s Real Estate Group are developing the 1.8 million Tyson’s Central which will include at least 631,000 square feet of office space. Tysons West, a development by JBG Companies currently under construction will contain 400,000 square feet

27 The Silver Line, Envisioning a New Tysons Corner, Cushman & Wakefield, December 2013.


of office space. Developer Hines plans to put in place 525,000 square feet of office space by mid-year 2014 at 7900 Tysons One Place

Parc Seven Office Vision

The technology sector remains one of the country’s hottest industries with blockbuster tech company buyouts and fast growing companies frequenting the news. The trend is also evident among today’s top young talent. At Harvard Business School, 18% of job-seeking students landed tech-sector spots this year, up from 12% in 2012 (compared to an 8% decrease in financial sector jobs, from 35% to 27%). For the first time at Stanford Graduate School of Business tech companies overtook financial services, with 32% of the class accepting tech jobs and just 26% heading into finance. Two years ago, those figures were 13% and 36%, respectively. A similar shift is under way in many other top schools (1).

Strategically located between Washington, D.C. and Dulles Airport, Tyson’s serves as the gateway to the “Dulles Technology Corridor”, a technology and defense business cluster whose global reach and proximity to the nation’s capital has drawn the highest concentration of technology workers in the U.S., according to TechAmerica. Technology employment opportunities continue to grow with a 4% increase over the past two years, reaching 20.6% total growth since 2001(3). The Washington D.C. Metro was also recently ranked the 2nd Best Place in America for Tech Jobs by Forbes Magazine.

Parc Seven’s goal is to facilitate an environment that will allow Tyson’s to benefit from this explosive technology sector job growth. We will work together with Fairfax County to incentivize technology companies that are looking to leverage the areas major economic drivers like its three regional airports and the United States Department of Defense. These companies will be further drawn by the notion that our trendy live-work-play environment will attract top young talent that is otherwise not enthused by Tyson’s Corner. We will anchor our two full service high-tech office buildings near the metro with some of the hottest and fastest growing companies in the tech sector that – will leverage Fairfax County’s major economic drivers. Here are some examples:

Gogo Inc (NASDAQ: GOGO) is a provider of in-flight broadband internet service and other connectivity services for commercial and business aircrafts. Gogo recently launched Gogo Text & Talk, an app that allows users to make in-flight cell phone calls, and text messaging. We believe a presence in this market will offer the opportunity for high profile exposure near three regional airports that serve as hubs for several major airliners, as well as the world’s leading aerospace, defense and aircraft manufacturers like Airbus, Boeing, Lockheed Martin, and Northrop Grumman.

Vuzix is a multinational technology firm headquartered in Rochester, New York that manufactures and sells computer display devices and software including video eyewear and smart glasses for consumer, commercial, and entertainment products. Recently the company received a grant from the U.S. Office of Naval Research to integrate Google Glass-like, see-through optics into a standard pair of goggles for the U.S. Navy. The idea is to superimpose computer-generated information on a soldier’s view of the real world. Our unique location near Washington D.C. and with direct access to the U.S. Department of Defense will provide an incredible growth opportunity for this company.

Apple Inc. (NASDAQ: AAPL) has recently become more open about their aggressive foray into the healthcare industry. A company like Apple may leverage the rapidly growing INOVA healthcare network and their dynamic growth Plan as well as proximity to the FDA.

http://en.wikipedia.org/wiki/Technology

http://en.wikipedia.org/wiki/Rochester,_New_York

http://en.wikipedia.org/wiki/Display_device

http://en.wikipedia.org/wiki/Computer_software

http://venturebeat.com/2013/12/10/vuzix-has-google-glass-like-smart-glasses-but-with-superior-optics/

http://venturebeat.com/2014/02/26/us-navy-buys-into-smart-glasses-trend-in-deal-with-vuzix/


RETAIL MARKET

Retail Strategy

With proximity to the Greensboro Metro Station and visibility from Leesburg Pike, Parc Seven will include a range of retail and activity driven spaces. We intend to provide 350,000 square feet of retail to the development. There will be various services for the residents of Parc Seven including a bank, dry cleaners, and pharmacy. These uses are seen as the high volume, credit tenants that will bring in customers to the development. We have carefully arranged the retailers such that the national tenants will predominately deliver into the project during the first and second phase of development, and receive the most visibility from the main roads. The smaller boutiques, local shops, and the Grove Market are planned to deliver after in the 3rd phase of development.

As shown in Figure 1, there will be a healthy mix of retail types on each block. With Parc Seven as an entertainment destination, we are proposing a state-of-the-art music venue where the musician and audience come together for a truly unique experience of entertainment and dining through a new concept that combines bowling, bocce, and exceptional cuisine. Two major hubs of entertainment will be created both at the “Grove Circle” and the Civic Center. The “Parc Plaza” will house our local food hub known as the “Grove Market”.

Parc Seven will cultivate awareness for healthy living both with the offerings at the Grove Market and the fitness center we are proposing. The fitness center will provide an artful arrangement of activity and atmosphere, complete with spa, salon, healthy snack bar, gear shop, endless pools, luxurious locker rooms, and the rooftop pool and lounge.

National Retail Trends

The retail market is finally emerging from the depths of recession. Improving retail fundamentals are the result of an economic uptick and still historically low new retail development. According to data from NCREIF in 111 U.S. metropolitan areas just 6.5 million square feet of new retail construction occurred in 2013 and 8 million square feet is expected in 2014. REIS recently reported the national vacancy rate for neighborhood and community shopping centers at 10.4%, a subtle 30 basis point drop from last year. Effective rents grew 1.4% in 2013 which, is triple the rate of growth in 2012.

Meanwhile, countless retailers remain susceptible to the increasing popularity of online retail, which has already claimed numerous victims. Bricks and mortar retailers are slowly adapting to the new reality by learning how to relate to customers in the dynamic consumer landscape.

In today’s market, it is crucial that Landlords understand and adapt to the new reality by creating an appealing customer destination to facilitate their tenant’s success. Ultimately, this will yield strong tenant sales which landlord’s will capitalize on by way of tenant retention and consistent rent growth. According to REIS, high-end retail destinations are thriving with vacancy rates reported well below 5%.

Tysons Retail Market

Tysons Corner is a regional retail hub which draws from a diverse customer base throughout Northern Virginia, Washington, D.C. and Maryland. Two high-end regional malls, Tysons Corner Center and Tysons Galleria, dominate the landscape. Macerich’s Tysons Corner Center is now the ninth largest mall in the United


States with nearly 2.5 million square feet. General Growth Properties’ Tysons Galleria includes 30 exclusive-to-market retailers. New competitive development on Leesburg Pike are Tyson’s Central and Westpark Drive which calls for 173,000 and 60,000 square feet of retail respectively both with no specific tenancy mix.

The Tysons market and especially Leesburg Pike (Route 7) is identified as “a place all national retailers want a presence”. Leases are triple net across the board. The submarket enjoys a consistently strong absorption rate and positive rent growth. Average retail vacancy rate is at an incredibly low 1.4% for community and neighborhood centers according to REIS. Average allowances offered to new tenants are $12.22 per square foot for improvements with minimal free rent. Asking rents for anchor tenants range from $17.46 to $37.40 per square foot, with an average of $24.97. In-line asking rates range from $28.97 to $51.05 per square foot, with an average of $40.80.

However, recent leasing activity indicates that economic improvement and excitement over the much anticipated Silver Line Metro’s has driven rent much higher. Chipotle recently leased small shop space down the block for the subject property at 8461 Leesburg Pike for $100 per square foot.

Parc Seven Retail Vision

Parc Seven retail component will leverage its close proximity to the Greensboro Metro Station and visibility from high traffic Leesburg Pike. The tenancy will feature a diverse mix of more than 60 national, regional and local retailers in 450,000 square feet. Service oriented and convenience retailers will benefit both residents and commuters alike. Large national credit tenants will pay a premium for prime visibility along Leesburg Pike while smaller boutique shops are prominent along the projects central multi-level retail corridor.

Figure 1 - Proposed Retail Mix


At the heart of Parc Seven will be Grove Market, a high-end food market concept comprising of a variety of fine restaurants, food and beverage stations, bakeries and retail items. This truly unique shopping experience with its exclusive offerings will create a strong sense of place for residents, office users and guests driving long term value for the project. Simultaneously it will serve as an incubator for local restaurant and food concepts. The vendor mix within The Grove will be modeled after other great food markets around the country; Chelsea Market and Eataly in New York City, The Ferry Building in San Francisco and Reading Terminal. Our goal is to become a food destination with high-quality offerings of local products served by top tier vendors and food entrepreneurs with a healthy balance between take home groceries and consume on the spot food offerings.

Parc Seven will also feature an array of popular entertainment and activity options for residents and visitors. Vida is a state of the art lifestyle gym complete with a spa, salon, snack bar, apparel shop and rooftop pool and lounge. A trendy music venue where the musician and audience come together for a distinctive entertainment experience and a new concept that combines bowling, bocce, and exceptional dining will highlight the project. The “Grove Plaza” will serve as a food centric zone and contain the Grove Market. See Appendix IV.1 -“Market Supplement” for chart describing retail mix by use, and Appendix IV.2 -“Market Supplement” for the chart describing the retail mix per building.

HOUSING MARKET

The vision of Tysons as a new urban center relies upon Tysons transitioning from being known as home to the “largest concentration of office space in Northern Virginia to becoming a 24/7 live/work/play environment”. The integration of uses inside neighborhoods is pivotal and housing takes center stage. “Fairfax County has predicted the population of Tysons Corner will grow to 100,000 by 2050. With over 20,000 dwelling units currently proposed, the groundwork for such tremendous growth is undeniably in place.28

Existing conditions in Tysons Corner-Vienna and Fairfax City vary slightly from the Metro Suburban Virginia data in that asking rents are higher. Vacancy rates and concessions are also higher due to the increase in supply.

Figure 1

SubmarketInventory

(Buildings)

Inventory

(Units)

Asking Rent

$Vac %

Free Rent

(mos)

Expenses %

(Apartment)

Tysons Cor/Fairfax 41 13,670 $1,743 6.80% 0.69 41.20%

Average Suburban Virginia Lease Terms 3.80% 0.29 41.30% REIS Observer 4Q 2013

Tysons generally has higher rents when compared to Suburban Virginia. This may be due to larger unit sizes. Figure 2 shows the rents and unit sizes of Suburban Virginia as a whole. This includes all classes and ages of inventory. Figure 3 shows just the Tysons portion of the Suburban Virginia market. Figure 4 shows the rents and unit sizes of The Ascent, a recently completed multifamily development in Tysons by Greystar. The

28 The Silver Line, Envisioning a New Tysons Corner, Cushman & Wakefield, December 2013, PG 19.


Ascent is a Class A luxury high-rise currently in lease-up. Their rents are significantly higher than rents in Tysons and the units are significantly smaller.

This trend of smaller units at higher rents is sweeping the Washington Metro area. Millennial’s are increasingly demanding studios and one bedroom units that are transit oriented, in cool neighborhoods where they can access food and entertainment easily. They increasingly do not own cars and have yet to accumulate a lot of stuff. The Ascent is in line with other multifamily developments of the same type in catering to this growing demographic. As such, the three bedroom unit has become unpopular because families with children do not generally live in luxury apartments geared toward singles and young couples. Parc Seven utilizes a similar methodology when determining our rents and unit sizes.

That being said, according to a Transwestern report, “Class A rents declined by 1.1% over the past year (2013), down from the 2.7% growth posted at third quarter 2012.” Class A rents will face downward pressure over the next 24 months at the regional level due to the large slate of scheduled deliveries compared to projected demand levels.”

Figure 2

Rent Avg. SF Avg. Rent PSF

Studio/Efficiency $1,266 525 $2.41

One Bedroom $1,460 759 $1.92

Two Bedroom $1,717 1,043 $1.65

Three Bedroom $1,964 1,264 $1.55

REIS Observer 4Q 2013

Figure 3



One Bedroom $1,578 792 $1.99

Two Bedroom $1,846 1,057 $1.75

Three Bedroom $2,085 1,273 $1.64

REIS Submarket Trend Futures, Apartment 4Q 2013

Figure 4



One Bedroom $2,740 821 $3.34

Two Bedroom $3,524 1,083 $3.25

Three Bedroom -$ 0 -$

www.theascenttysons.com, as of 2/24/2014

The Ascent Unit Mix Rent DetailsCurrent Asking Rents and Sizes

4Q 2013

4Q 2013

Current Metro Average Rents and Sizes

Suburban Virginia Unit Mix Rent Details

Tysons Submarket Unit Mix Rent DetailsCurrent Submarket Rents and Sizes

4Q 2013


According to a report by Transwestern, Northern Virginia’s “Class A absorption remains strong and continues to outpace deliveries at this stage of the development cycle. Net absorption is at 6,493 Class A and B apartments across the metro.” According to Reis new construction is anticipated to total 17,368 units (3,474 per year on average) from 2013 to 2017, while net absorption is forecast to reach 14,833 (2,967 per year on average) (Figure 5).

Figure 5

REIS Observer 4Q 2013

Reis data shows that, “the mean cap rate fell to 3.5% in the third quarter of 2013 after finishing the first quarter at 5.7%. The low cap rate implies the sale of a prime property in the third quarter. Rolling cap rates settled at 4.8% in the fourth quarter of 2013 and are expected to vary between 4.5% and 5.1% going forward. 29 Our cap rates are conservative in the 6% range.

The supply of housing shows that multifamily units will continue to dominate the housing stock. “Conversions of apartments to condominiums, once an active trend here, has ceased since 2009.” However, the condo market is slated to make a slight comeback in terms of planned units. 30

Figure 6

Tysons Cor/Fairfax Apartment Condo Other

Completed 535 0 42

Under Construction 1,887 0 241

Planned/Proposed 9,310 375 456

Total 11,732 375 739

Grand Total 12,846

New Construction Project Tally

REIS New Construction Listing 4Q 2013 Through phasing the Parc Seven development builds in flexibility to adjust to the market. We have planned for apartments and condominiums but that could change to all for-rent units if need be.

29 Reis Observer Q4 2013. 30 REIS New Construction Listing 4Q 2013

0

1000

2000

3000

4000

5000

6000

7000

No

. o

f U

nit

s

Northern Virginia Apartment Supply and Demand Trends

Completed

Absorbed


HOTEL MARKET

Today there are 11 hotels in Tysons Corner. As the office and residential population grows in Tysons, so too will demand for more hotels. The master plan projects that Tysons will have 80,000-100,000 residents by 2050 and over 200,000 employees, compared to 17,500 residents and 100,000 employees today. With such a dramatic increase in economic activity, Tysons Corner will need more hotels to accommodate visitors. Local developer MRP is currently building two Hilton banner hotels at Tysons Overlook, while Macerich plans for a new 310-key Grand Hyatt at Tysons Corner.

With currently no planned hotels at the Greensboro Metro Station, where the Silver Line serves as a direct link between Washington, D.C. and Dulles International Airport, a hotel is a natural fit for the sight. Recognizing that there are numerous other hotel options in the market we selected a unique hotel that will differentiate itself in the market and integrate well with our overall vision. Hotel Zetta is a popular luxury hotel in San Francisco owned and operated by Viceroy Hotel Group, a hotel manager with hotels throughout the world under their flagship Viceroy Hotels and Resorts banner and Urban Retreats banner. The tasteful, modern hotel invites style-seeking travelers and local professionals to work, connect, play and get inspired.

CIVIC CENTER

There are many different museums and performance venues throughout Virginia, but the Tysons Corner region has minimal civic attractions. Keeping in line with the desires of Fairfax County’s desire for the south Central 7 District to be a hub for public enjoyment we considered a variety of potential uses for our site. Our goal is to bring a well-integrated public attraction to our site that will serve the community and drive further traffic to the project.

Currently the region is home to one of the leading performing arts venues, Wolf Trap. As America’s National Park for the Performing Arts, it enhances the culture in the region though artistic and educational programs. Wolf Trap is run through a public private partnership with the U.S. Department of the Interior, National Park Service.31 Much of the venue is outdoors and features performances ranging from pop and country to orchestra, theatre, and opera, as well as innovative performance art and multimedia presentations.

The Tyson Corner Comprehensive Plan envisions a redevelopment of the south Tysons Central 7 sub-district that will focus on civic uses.32 According to the District Recommendation, “The signature focal point of the Tysons Central 7 District is the civic center’s great public space, the ‘Civic Commons’ which should be about three to four acres.” The goal of the vision is to create a new public identity for the district and provide space for large public gatherings. We are currently negotiating with several cultural and artistic programs that may have an interest in expanding their facilities and presence to our site in Tysons Corner. We would like to propose an allocation of cost to Fairfax County for input as far as the organization that will occupy this portion of our site.

31 Wolftrap - http://www.wolftrap.org/Learn_About_Wolf_Trap.aspx 32 Tysons Comprehensive Plan – FAIRFAX COUNTY COMPREHENSIVE PLAN, 2013 Edition AREA II Tysons Corner Urban Center, Amended through 2-12-2013 District Recommendations pages 131-134

http://www.wolftrap.org/Learn_About_Wolf_Trap.aspx


The Northern Virginia Children’s Science Museum is currently looking for 40,000 with the possibility of future expansion. The science center will be an interactive children’s museum focused on science, technology, engineering and math or “STEM”. To compliment this user the site will also house an IMAX Theater. With the advent of new technology popular feature length Hollywood films are now shot in 3-D and played on IMAX screens. This unique theater will show educational IMAX productions during the day and full length films in the evening and on weekend, serving as a round the clock traffic driver.

To facilitate the Science Center’s potential for future growth we plan to leave a warm lit shell of 40,000 square feet. In the interim this space will serve as yet another unique destination and attraction. We will lease the space to Premier Exhibitions (NASDAQ:PXRI) a company that organizes traveling exhibitions and displays them at high-profile locations throughout the world. Currently they have two permanent exhibition display sites at Luxor in Las Vegas and in Atlanta where they are headquartered. Some of the recent well known exhibits include RMS Titanic and Bodies… The Exhibition.


FINANCIAL ANALYSIS

INTRODUCTION

Parc Seven is a financially viable development project with strong cash flow potential. Throughout our financial analysis, we took on a more conservative approach in our assumptions to demonstrate the performance strength of the project. We also made various strategic decisions with this project in order to mitigate risk for the developer; first by breaking the project into four independent phases that were planned to be fluid in order to react to market demand without overcommitting the developer to specific programing uses, second this approach calls for the six (6) resulting blocks of the project to be subdivided into separate ownership entities in order to limit risk and allow for easier underwriting on smaller blocks, and additionally by maintaining our strongest existing tenants for as long as possible we were able to maintain $5million in cash flow on the property during the first 4-years of build-out, and $2.5million for an additional 2-years; resulting in a total of $25million in cash flow during the first 6-years of construction due to our strategic phasing.

ACQUISITIONS

The proposed development of Parc Seven spans a 12.8-acre site, predominately owned by Federal Realty Investment Trust (FRIT). The development also includes a 18,526 square foot low rise building at 8399 Leesburg Pike. The parcel is particularly essential because it is the corner of the site and the first impression for vehicular traffic.

In 2013 the land was valued at $1,667,340 and the building at $4,154,530 for a total assessed value of $5,821,870. In November of 2008 it was sold to the Commonwealth of Virginia for $6,100,00040. Because the block will contain the science and civic center for the community, we have assumed acquisition of the parcel through contribution by the Commonwealth of Virginia.

40 Fairfax County Tax Assessment. 8399 Leesburg Pike. http://icare.fairfaxcounty.gov/Datalets/Datalet.aspx?sIndex=0&idx=2


ASSUMPTIONS

PARC SEVEN AT GREENSBORO STATION - TOTAL USES AND SOURCES

EXHIBIT 1: PARC SEVEN USAGE OF FUNDS

USES - Development Costs Total

Acquisition

Land & Building Acquisition 54,324,661$

Total Acquisition 54,324,661$

Construction

Demolition 16,810,160$

Infrastructure & Urban Plaza 1,805,639$

Retail 56,475,952$

Office 97,382,707$

Hotel 67,532,887$

Apartment 123,487,446$

Condominium 39,725,137$

Civic 11,681,525$

Parking 43,120,413$

Taxes/Ins. During Const. 1,173,413$

Total Construction 459,195,279$

Construction Financing

Points & Fees (Origination) 2,211,926$

Interest Expense 31,582,715$

Total Construction Financing 33,794,641$

Soft Costs

Soft Costs 100,813,129$

Total Soft Costs 100,813,129$

Permanent Financing

Points & Fees (Origination) 2,228,977$

Transfer/Recording Fees 668,893$

Title Insurance, Recording, Management 535,000$

Total Permanent Financing 3,432,870$

Reserves

Lease-up Reserves 1,815,000$

Operating Reserves 2,230,000$

Replacement Reserve 2,800,000$

Total Reserves 6,845,000$

Development Fees

Development General & Administration 13,716,783$

Development Fee 13,716,783$

Total Development Fees 27,433,566$

Total Development Cost 685,839,146$

PARCEL C - ESTIMATED DEVELOPMENT COSTS


EXHIBIT 2: PARC SEVEN SOURCES OF FUNDS

The financial analysis details all four phases of construction through lease up totaling to a development cost of $695,839,146. $445,795,445 will be financed via loan syndication and the remaining $240,043,701 will be financed with owner equity. Each phase of the development will be financed separately, giving the development team the option to analyze market conditions at different intervals over the nine-year construction schedule and determine if development should proceed to full completion. Thus, there is the option to halt development after the completion of the first few phases if future market conditions are unfavorable.

The phasing has been coordinated to preserve the net operating income of the current shopping center for as long as possible. Block C was chosen as the first phase of the development for a variety of financially advantageous reasons. This block’s proximity to Greensboro Metro Station makes it the best candidate for initial development. Positioning an office tower closest to Greensboro Metro Station gives the building high visibility and ease of accessibility. These qualities justify the per square foot rent we intend to charge for the office space. By carving an arch within the first few stories of the building, pedestrians can walk through the building and into the entertainment/retail areas that will be constructed during the later phases of development. Additionally, construction of Phase One is least intrusive to existing retailers at Pike 7 Plaza and will not disrupt the current retail center’s cash flow and business operations. Lastly, Block C requires no demolition as it is currently a surface parking lot.

Phase One of the development is Block C at the southeast corner of the site. This block will contain 329,000 square feet of rentable office space, first floor retail and a partial level of underground parking (PPU). Construction will commence on January 15, 2016, with substantial completion occurring on December 29, 2017. The total development cost for Phase I is $93,262,041.

SOURCES - Development Financing Proposed

Funding

Equity

Equity - Owner(s) (Land/Building) 58,984,802$

Equity - Owner Other 181,058,899$

Equity - Investors, LP, and/or LLC -$

Debt

1st Mortgage 445,795,445$

Other Mortgage -$

Other

City Loan (Soft) -$

County Loan (Soft) -$

Grants -$

Total Financing/Equity: 685,839,146$


EXHIBIT 3: PROGRAMMING MIX FOR PHASE I

Phase II of the development will require the demolition of BB&T bank and roughly one third of the shopping center up to the center’s breezeway. The partial demolition of Pike 7 Plaza is necessary to make room for temporary surface parking for remaining tenants in the plaza and new tenants in Parcel C. The abandon building located on Parcel A will also be demolished along with the Goodyear building so that the shopping center’s visibility from Leesburg Pike is not completely obstructed by the construction of Parcel B. Parcel B will contain 250 hotel rooms along with new office space, with retail on the first floor, a partial level of parking underground (PPU) and a full level of underground parking (P1LU). Construction of Phase II will commence on January 1, 2018, with substantial completion occurring on December 31, 2019. The loss of revenue from retailers located on Parcel F will be mitigated by the opening of new retail stores in Parcel C. The total development cost for Phase II is $196,446,408.

EXHIBIT 4: PROGRAMMING MIX FOR PHASE II

Phase III will require the demolition of the remainder of Pike 7 Plaza on Parcels D and E to make way for 593 apartment units. Phase III will also see the construction of 105 for-sale condominiums on Parcel F making it the largest and most costly phase of the development. During the construction of Phase II, the development team will reanalyze the market to determine the risk involved in proceeding with this large phase of the project. If construction is green lit, it will begin on January 1, 2020, with substantial completion occurring on December 31, 2021. The total development cost for Phase III is $319,517,708.

TDC: 93,262,041$

ASSUMPTIONS:

Bld. Footprint 28,270

Uses GSF NSF

Office 355,566 328,899

Retail 11,149 10,313

Parking 27,619 27,619

Total 394,334 366,830

PHASE I

Parcel C - Office Building

TDC: 196,446,408$

ASSUMPTIONS:


Uses GSF NSF

Hotel 270,738 234,188

Office 229,280 212,084

Retail 119,310 110,362

Parking 159,080 159,083

Total 778,408 715,717

PHASE II

Parcel B - Hotel/Office


EXHIBIT 5: PROGRAMMING MIX FOR PHASE III

Phase IV is the last phase of the development on the last remaining parcel, Parcel A. This building will contain over 43,000 square feet of rentable civic space along with over 150,000 square feet of retail and partial parking underground. Phase IV contains the development of Parcel A because the land contained within Parcel A must be acquired from the state of Virginia; if there are any complications with acquisition, the development team did not want it to hold up initial construction of the development. Construction of this phase will commence on January 3, 2022, with substantial completion occurring on December 29, 2023. This is the least costly phase of development with a total development cost of $76,612,988.

TDC: 319,517,708$

Total Const. Cost: 67,319,249$

ASSUMPTIONS:


Uses GSF NSF

Apartment 214,650 185,672

Retail 57,965 53,618

Parking 115,930 115,930

Total 433,331 433,332

PHASE III

Parcel D - Retail/Multifamily


ASSUMPTIONS:


Uses GSF NSF

Apartment 348,089 301,097

Retail 70,902 65,584

Parking 70,902 70,902

Total 571,595 571,596

PHASE III

Parcel E - Retail/Multifamily


ASSUMPTIONS:


Uses GSF NSF

Condo 150,983 130,600

Retail 35,638 32,965

Parking 70,345 70,345

Total 256,966 233,910

PHASE III

Parcel F - Condominium


EXHIBIT 6: PROGRAMMING MIX FOR PHASE IV

The project will stabilize approximately one year after substantial completion of Parcel A on January 1, 2025 and the projected sale date is in year 2027. Exhibit 7 shows the project’s start of construction, stabilization, exit year, and the internal rate of return.

EXHIBIT 7: PROJECT SNAPSHOT

Exhibit 8 breaks down the project’s capital injection for each phase from a leveraged and unleveraged position as well as the before tax and after tax cash flow. Capturing the current income stream provided by Pike Seven Plaza will increase the estimated cash flow of the project by $24,166,666 during the five and a half years of development. This current cash flow is highlighted blue. The cash flow for years 2022 and 2023 is highlighted in orange to show the boost in revenue received from the sale of the condominiums in Parcel F.

TDC: 76,612,988$

ASSUMPTIONS:


Uses GSF NSF

Civic 46,831 43,319

Retail 163,909 151,615

Parking 70,247 70,247

Total 280,987 265,181

Parcel A - Civic Building

PHASE IV

Project Snapshot

Total Development Cost: 671,035,133$ BEFORE TAX LEVERAGED

Project Price Per Square Foot: 1,163$ 2027 27.86%

Construction Commences: 2016 AFTER TAX LEVERAGED

Stabilization Year: 2025 2027 25.83%

Exit Year: 2027 UNLEVERAGED

Before Tax Sales Price: 764,961,326$ 2027 14.91%

Rate of Return

Projected Internal


EXHIBIT 8.1: BEFORE-TAX, AFTER-TAX 10 YEAR PROJECTED INTERNAL RATE OF RETURN

LLC Current Cash Flow Before-Tax LLC

Equity Cash Flow Before Property Before-tax

Year Pay-In (Estimated) Taxes Sale Distribution

1/1/2016 (32,641,714)$ 12,500,000$ -$ (20,141,714)$

1/1/2017 -$ 5,000,000$ (5,535,519)$ (535,519)$

1/1/2018 (68,756,243)$ 3,333,333$ (1,011,551)$ (66,434,461)$

1/1/2019 -$ 3,333,333$ 4,678,435$ 8,011,768$

1/1/2020 (111,831,198)$ -$ 6,684,016$ (105,147,182)$

1/1/2021 -$ -$ 51,537,826$ 51,537,826$

1/1/2022 (26,814,546)$ -$ 31,519,394$ 4,704,848$

1/1/2023 -$ -$ 27,351,053$ 27,351,053$

1/1/2024 -$ -$ 28,723,079$ 28,723,079$

1/1/2025 -$ -$ 30,380,315$ 30,380,315$

1/1/2026 -$ -$ 32,819,586$ 764,961,326$ 797,780,912$

Total (240,043,701)$ 24,166,666$ 207,146,635$ 764,961,326$ 756,230,926$

Internal Rate of Return Before Tax: 27.86%

Before Tax Net Present Value: 110,845,922$

Hurdle Rate: 15.00%

NPV Rate: 15.00%

BEFORE TAX -LEVERAGED

LLC Current Cash Flow After-Tax LLC

Equity Cash Flow After Property After-tax

Year Pay-In (Estimated) Taxes Sale Distribution

1/1/2016 (32,641,714)$ 7,375,000$ -$ (25,266,714)$

1/1/2017 -$ 2,950,000$ (2,806,935)$ 143,065$

1/1/2018 (68,756,243)$ 1,966,666$ (160,154)$ (66,949,730)$

1/1/2019 -$ 1,966,666$ 4,226,269$ 6,192,935$

1/1/2020 (111,831,198)$ -$ 5,326,791$ (106,504,407)$

1/1/2021 -$ -$ 61,439,849$ 61,439,849$

1/1/2022 (26,814,546)$ -$ 40,984,406$ 14,169,860$

1/1/2023 -$ -$ 37,109,982$ 37,109,982$

1/1/2024 -$ -$ 38,012,975$ 38,012,975$

1/1/2025 -$ -$ 39,536,574$ 39,536,574$

1/1/2026 -$ -$ 40,744,358$ 609,086,765$ 649,831,124$

Total (240,043,701)$ 14,258,333$ 264,414,114$ 609,086,765$ 647,715,511$

Internal Rate of Return After Tax: 25.83%

After Tax Net Present Value: 88,981,633$

Hurdle Rate: 15.00%

NPV Rate: 15.00%

AFTER TAX - LEVERAGED


EXHIBIT 8.2: UNLEVERAGED 10 YEAR PROJECTED INTERNAL RATE OF RETURN

The dimensions of the site are shown in Exhibit 9. The total size of the site in approximately 577,234 square feet with over 57,000 square feet allocated to park/civic space.

EXHIBIT 9: SITE DIMENSIONS AND BUILDING FOOTPRINTS

The development features a combination of retail, hotel, office, residential, and civic space totaling over 2.5 million square feet. The total square footage of each use is detailed in Exhibit 10.

LLC Current Cash Flow Property LLC

Equity Cash Flow Sale Distribution

Year Pay-In (Estimated)

1/1/2016 (83,639,432)$ 7,375,000$ -$ (76,264,432)$

1/1/2017 -$ 2,950,000$ (1,868,287)$ 1,081,713$

1/1/2018 (196,446,408)$ 1,966,666$ 2,655,681$ (191,824,061)$

1/1/2019 -$ 1,966,666$ 18,932,380$ 20,899,046$

1/1/2020 (319,517,708)$ -$ 20,937,961$ (298,579,747)$

1/1/2021 -$ -$ 80,726,451$ 80,726,451$

1/1/2022 (76,612,989)$ -$ 60,708,019$ (15,904,969)$

1/1/2023 -$ -$ 57,286,283$ 57,286,283$

1/1/2024 -$ -$ 58,658,309$ 58,658,309$

1/1/2025 -$ -$ 61,031,246$ 61,031,246$

1/1/2026 -$ -$ 62,754,816$ 1,086,363,239$ 1,149,118,055$

Total (676,216,537)$ 6,883,333$ 421,822,859$ 1,086,363,239$ 846,227,894$

Unleveraged Internal Rate of Return: 14.91%

Unleveraged Net Present Value: (1,720,734)$

Hurdle Rate: 15.00%

NPV Rate: 15.00%

UNLEVERAGED

Total Site Size 577,234

Total Building FP 319,138

Urban Plaza 33,443

Park Space 24,000

Roads 117,423

Sidewalks 83,230

Parcel A Size 99,716

Parcel B Size 112,219

Parcel C Size 64,314

Parcel D Size 101,563

Parcel E Size 128,903

Parcel F Size 70,519

Site Dimensions (Sq./ft.)

Building A 46,831

Building B 79,540

Building C 28,270

Building D 57,965

Building E 70,898

Building F 35,634

Building Footprints (Sq./ft.)


EXHIBIT 10: PRORAMMING MIX

A breakdown of land and building acquisition is shown in Exhibit 11. The acquisition cost is based off of the assessed value of the property for the most recent tax year. Acquisition of Parcel A includes the assessed value of the 18,000 square feet of land and the building not currently owned by Federal Realty Investment Trust. The development team plans to purchase this land from the state of Virginia so that it can be incorporated into the development. This parcel is vital to achieve full build out of Parcel A. The average price per square foot of the existing buildings and land is $100.31. The acquisition price for each parcel is determined by multiplying this number by the total square footage of each parcel.

EXHIBIT 11: ACQUISITION COSTS

Hotel 270,738

Office 584,846

Apartment 562,739

Condo 150,983

Retail 458,873

Civic 46,831

Infrastructure 200,653

Green Space 57,443

Gallery Walk 17,300

Parking 514,123

Total Sq./Ft. 2,864,529

Total Programming Mix

8365 Leesburg Pike 3,007,840$



Total Value Existing Site 52,171,240$

Apprx. Land Square Footage 558,708

Price Per Square Foot 93.38$

Building Price $4,062,560

Land Price $1,667,340

Total Value Existing Site $5,729,900

Land Square Footage 18,526

Price Per Square Foot 309.29$

Total Acquisition Price 57,901,140$

Total Size of Site 577,234$

Total Site Price PSF 100.31$

Acquisition of Parcel A

Site Acquisition


The demolition and construction costs per square foot were provided by Tishman Construction Corporation and detailed in Exhibit 12.

EXHIBIT 12: CONSTRUCTION COSTS PER SQUARE FOOT

Parking spaces were deduced using an average parking space size of 243 square feet. Parc Seven will have 2,116 parking spaces available. The cost for construction of surface and underground parking was also provided by Tishman Construction Corporation. This is shown in Exhibit 13.

EXHIBIT 13: PARKING SIZING AND COSTS

For the purposes of this pro forma, we are estimating that operating expenses would be approximately 35 percent of the project’s gross operating income (not including taxes and leasing concessions). We have also taken into consideration the core loss factor, which is indicated in Exhibit 14.

EXHIBIT 14: SOFT COST ESTIMATION AND CORE LOSS

Each phase will be financed via a 24 month construction loan that will be taken out by a permanent loan at substantial completion. The construction loan is assumed to have a 10% retainage paid out at the end of

Demolition 3.50$ per sq./ft.

Retail 139.25$ per sq./ft.

Condo 263.11$ per sq./ft.

Apartment 219.44$ per sq./ft.

Office 166.51$ per sq./ft.

Hotel 249.44$ per sq./ft.

Civic 249.44$ per sq./ft.

Open Space Costs 4.60$ per sq./ft.

Roadway Costs 9.30$ per sq./ft.

Sidewalk Costs 5.90$ per sq./ft.

Construction Costs

Parking - Avg. Size 243 SF/space

Total Parking Spaces 2,116

Above Grade Parking 70.55$ per sq./ft.

Below Grade Parking 104.76$ per sq./ft.

Surface Grade Parking 12.00$ per sq./ft.

Sizing - Parking

Parking Estimated Costs

Soft Cost 35.00% of GOI

Core Loss Office/Retail 7.50% of GSF

Core Loss Residential 13.50% of GSF

% Non-Leasable space

Other Details


loan’s 24 month term. Each phase of the project will be financed via loan syndication and issued by a Lead Arranger. It is assumed that our permanent loan will be structured as a balloon, and we intend to refinance the balloon payment at the end of the loan term as long as the project remains financially viable. We have assumed an interest rate of 5.25% for permanent financing in an effort to approach this analysis conservatively. This is detailed in Exhibit 15.

EXHIBIT 15: FINANCING ASSUMPTIONS

The rents that we intend to charge for each use have been deduced via the market analysis conducted by the development team. We are assuming $75 per month for each space that we have designated as income producing parking. The rents for each use is shown in Exhibit 16.

EXHIBIT 16: RENTAL RATES

The unit mix for the apartment buildings located on Parcel D and Parcel E was determined by a residential market analysis. Exhibits 17 and 18 show the square footage for each unit type, and the rent that the development team intends to charge for each type. It was determined that three bedroom units were not desirable in this particular area, and were not included in the unit mix.

LTV: 65%

Rate: 5.25%

Term (Years): 25

Origination: 0.50%

Fees: 0.15%

Permanent Financing

Months: 24

Loan Origination: 0.50%

Rate: 6.75%

Retainage: 10%


Trophy Office 54.00$ per SF

Hotel 50.00$ per SF

Retail 75.00$ per SF

Multifamily 42.00$ per SF

Civic 50.00$ per SF

Parking 75.00$ per space

Rental Rates


EXHIBIT 16: UNIT SQUARE FOOTAGE

EXHIBIT 17: UNIT RENTAL RATES

Workforce housing has been factored into the unit mix for the apartment buildings. The maximum amount of rent the development team could charge for workforce housing was determined by accounting for the area’s average median income (AMI). This is shown in Exhibit 18.

EXHIBIT 18: WORKFORCE HOUSING MONTLY RENTAL RATES

Parcel D and E contain a total of 593 apartment units. The unit breakdown for each parcel is shown in Exhibits 19 and 20.

Type Sq./Ft Mix Total SF

Studio/1BA 460 1 460

1BR/1BA 820 2 1,640

2BR/2BA 1,080 1 1,080

2,360 4 3,180

Average unit size is: 795

Apartment Rentals

Type Rent Mix Total $

Studio/1BA 2,000$ 1 2,000

1BR/1BA 2,700$ 2 5,400

2BR/2BA 3,500$ 1 3,500

8,200$ 4 10,900

Average unit rent is: 2,725

Apartment Rentals

Max/Inc. Rent

WFH- AMI % $107,096 30.00% Monthly

101-120% 5.00% $107,096 32,129$ 2,677$

81-100% 5.00% 86,748$ 26,024$ 2,169$

71-80% 5.00% 76,038$ 22,811$ 1,901$

61-70% 3.00% 65,329$ 19,599$ 1,633$

50-60% 2.00% 53,548$ 16,064$ 1,339$

Workforce Apartment Rents


EXHIBIT 19: UNIT MIX FOR PARCEL D

EXHIBIT 20: UNIT MIX FOR PARCEL E

Parcel F contains for-sale condominiums. Workforce housing has also been taken into account when determining the unit mix. The unit mix for Parcel F is shown Exhibit 21.

EXHIBIT 21: CONDOMINIUM UNIT MIX FOR PARCEL F

Studio 30 2,000$ 59,215$

S -WFH 27 1,885$ 50,884$

1-Bdrm 104 2,700$ 281,380$

1 -WFH 9 2,300$ 20,700$

2-Bdrm 48 3,500$ 166,626$

2 -WFH 9 2,677$ 24,097$

TOTAL 226 602,901$

UNIT MIX - PARCEL D

Studio 56 2,000$ 111,596$

S -WFH 36 1,577$ 56,774$

1-Bdrm 166 2,700$ 447,108$

1 -WFH 18 2,300$ 41,400$

2-Bdrm 74 3,500$ 258,293$

2 -WFH 18 2,677$ 48,193$

TOTAL 367 963,364$

UNIT MIX - PARCEL E

Studio 18 450,000$ 8,100,000$

S -WFH 10 405,900$ Avg. 4,059,000$

1-Bdrm 40 550,000$ 22,000,000$

1 -WFH 9 452,833$ Avg. 4,075,500$

2-Bdrm 25 685,000$ 17,125,000$

2 -WFH 3 568,550$ Avg. 1,705,650$

TOTAL 105 543,478$ 57,065,150$

CONDOMINIUM UNIT MIX


The uses and sources for each phase are shown in Exhibits 22, 23, 24, and 25.

EXHIBIT 22: PHASE ONE SOURCES & USES

EXHIBIT 23: PHASE II USES AND SOURCES OF FUNDS

EXHIBIT 24: PHASE III USES AND SOURCES OF FUNDS

EXHIBIT 25: PHASE IV USES AND SOURCES OF FUNDS






Total Permanent Financing 469,082$

Total Reserves 930,000$

Total Development Fees4% 3,730,482$



Funding

Equity



Debt

1st Mortgage (Conventional) 60,620,326


PARCEL C - Estimated Development Costs



Total Constrcution 131,052,757$





Total Development Fees 4% 7,857,856$



Funding

Equity



Debt



PARCEL B - Estimated Development Costs






Total Permanent Financing 1,600,012$





Funding

Equity



Debt



PARCELS D, E and F - TOTAL DEVELOPMENT COSTS







Total Reserves 765,000$




Funding

Equity



Debt



PARCEL A - TOTAL DEVELOPMENT COSTS


PHASE I - BREAKDOWN

We’ve positioned the office high-rise on Parcel C nearest the Metro station to justify charging new office rents in an effort to minimize risk and increase yield for this portion of development. The office high-rise will include 114 parking spaces and 11,149 square feet of first floor retail space along with the 355,566 square feet of office space. The total development cost for Phase 1 is over $93,000,000.

The office high-rise is the first building constructed, and we are projecting lease-up activity over the course of 24 months. There will be a flurry of pre-leasing activity given the building’s proximity to the Metro and the unique arch built within the building to draw retail tenants. We project that all the retail and three floors of office will be pre-leased with full occupancy on December 31, 2019. The follow leasing factors have been taken into consideration is shown in Exhibit 26.

EXHIBIT 26: LEASING CONCESSION FACTORS

In Phase I, adjacent parking is available in existing surface lots. As a result, we show parking with this building contributing to NOI towards the end of the two year lease-up period.

A detailed financial breakdown of the first two years of operation during lease-up is given in Exhibit 27.

EXHIBIT 27: TWO YEAR LEASE-UP PROJECTION

(See Appendix V.1 for full chart – Phase I Lease-up Schedule)

Tenant Improvement Allowance 15.00%

Free Rent Impact 10.00%

Other Concessions 2.00%

2018 1ST YEAR LEASE UP SCHEDULE January June December Total

UNITS/FLOORS LEASED PER MONTH:

RENTAL INCOME: 417,477$ 770,498$ 909,722$ 8,697,401$

Total Potential Income 1,553,023$ 1,553,023$ 1,553,023$ 18,636,276$

EFFECTIVE GROSS REVENUE: 417,477$ 770,498$ 909,722$ 8,697,401$

TOTAL OPERATING EXPENSES: 442,937$ 442,937$ 442,937$ 5,315,242$

NET OPERATING INCOME (NOI): 220,822$ 478,528$ 580,161$ 5,341,873$

2019 2ND YEAR LEASE UP SCHEDULE January June December Total


RENTAL INCOME: 956,129$ 1,191,477$ 1,553,023$ 14,894,618$

Total Potential Income 1,553,023$ 1,553,023$ 1,553,023$ 18,636,276$

EFFECTIVE GROSS REVENUE: 956,129$ 1,191,477$ 1,553,023$ 14,894,618$

TOTAL OPERATING EXPENSES: 442,937$ 442,937$ 442,937$ 5,315,242$

NET OPERATING INCOME (NOI): 614,039$ 569,819$ 877,133$ 4,550,599$


Exhibit 28 shows the construction draw schedule for the two years of construction. It is assumed that the draws are equally divided over 24 months with 10% retainage paid in the final month of construction leading up to substantial completion.

EXHIBIT 28: PHASE I CONSTRUCTION DRAW

(See Appendix V.2 for full chart – Phase I Construction Draw)

A detail financial analysis for the first 10 years of operation following lease-up has been created for this report. Below, Exhibits 29 through 34 detail this analysis. For the income and expense state, an annual rental increase of 3% and annual expense increase of 3.25% has been factored into the projection with a 5.25% vacancy and concession rate.

EXHIBIT 29: PHASE I BASIS & DEPRECIATION BREAKDOWN

(See Appendix V.3 for full chart – Phase I Basis & Depreciation Breakdown)

EXHIBIT 30: INCOME & EXPENSE STATEMENT

Phase I

CONSTRUCTION DRAW SCHEDULE

Construction Months: 24

Construction Loan: 63,790,505$

Loan Origination: 0.50% 318,953$

Rate: 6.75%

Retainage: 10.00%

Month Draw Retainage Net Draw Balance Interest

Jan-16 2,416,307$ (241,631)$ 2,174,676$ 2,174,676$ 12,233$

Dec-16 2,416,307$ (241,631)$ 2,174,676$ 26,096,116$ 146,791$

Dec-17 8,215,444$ 2,657,938$ 13,772,950$ 63,790,505$ 212,031$

TOTALS 63,790,505$ 63,790,505$ 3,582,510$

Uses (Non Basis) Commercial 7 - Year Amortize

TDC Basis Expense Depreciable Depreciation (Expense)

Total Development Cost 90,226,732$ 89,050,196$ 7,236,203$ 82,598,993$ -$ 391,535$

INCOME & EXPENSE STATEMENT Year 1 Year 5 Year 10

Period Beginning Date Jan-20 Jan-24 Jan-29

Period Ending Date Dec-20 Dec-24 Dec-29

TOTAL POTENTIAL RENTAL INCOME: 19,195,364$ 21,604,552$ 25,045,597$

Vacancy & Credit Loss 978,404$ 1,101,203$ 1,276,596$

EFFECTIVE RENTAL INCOME: 18,216,960$ 20,503,349$ 23,769,001$

GROSS OPERATING INCOME: 18,216,960$ 20,503,349$ 23,769,001$

TOTAL OPERATING EXPENSES: 7,609,570$ 8,648,093$ 10,147,771$

NET OPERATING INCOME (NOI): 10,607,390$ 11,855,256$ 13,621,230$


(See Appendix V.4 for full chart – Phase I Income & Expense Statement)

EXHIBIT 31: PHASE I MORTGAGE & DEPRECIATION SCHEDULE

(See Appendix V.5 for full chart – Phase I Mortgage & Depreciation Schedule

Exhibit 32 determines both the before and after tax sale proceed returns. It also accounts for accumulated depreciation at time of sale and the block’s adjusted basis. A 6 percent capitalization rate is used to determine the sales price.

EXHIBIT 32: PHASE I SALES SCHEDULE

(See Appendix V.6 for full chart – Phase I Sales Schedule)

Year 1 Year 5 Year 10

Period Beginning Date: Jan-20 Jan-24 Jan-29

Period Ending Date: Dec-20 Dec-24 Dec-29

1st Mortgage Calculation

Yearly Principal Reduction 1,126,026$ 1,388,517$ 1,804,284$

Yearly Interest Expense 2,541,206$ 2,278,715$ 1,862,948$

Commercial Cost Recovery (Depreciation) Calculation 39 Year Straight Line

Beginning Balance 78,363,147$ 69,891,456$ 59,301,841$

Remaining Book Value 76,245,224$ 67,773,533$ 57,183,918$

Total Annual Cost Recovery 2,117,923$ 2,117,923$ 2,117,923$

Amortization

Ending Balance 344,551$ 281,905$ 203,598$

Sale Schedule Year 1 Year 5 Year 10

Jan-20 Jan-24 Jan-29

Period Beginning Date Cap Rate Dec-20 Dec-24 Dec-29

Period Ending Date 6.00%

= Total Sale Proceeds Before Tax 118,393,332$ 143,086,387$ 178,899,692$

= Sales Proceeds After Tax 95,964,614$ 115,206,324$ 143,309,246$

Calculations

Acquisition Basis 89,050,196$ 89,050,196$ 89,050,196$

+ Capital Additions -$ -$ -$

- Cost Recovery 4,235,846$ 4,235,846$ 4,235,846$

= Adjusted Basis 84,814,351$ 84,814,351$ 84,814,351$

Sales Price 176,789,836$ 197,587,601$ 227,020,502$

- Cost of Sale 10,607,390$ 11,855,256$ 13,621,230$

- Adjusted Basis 84,814,351$ 84,814,351$ 84,814,351$

= Total Gain 81,368,096$ 100,917,994$ 128,584,921$


EXHIBIT 33: PHASE I 10 YEAR FINANCIAL STATEMENT

(See Appendix V.7 for full chart – Phase I Financial Statement)

EXHIBIT 34: PHASE I BEFORE-TAX, AFTER-TAX AND UNLEVERAGED IRR AND NPV

(See Appendix V.8 for full chart – Phase I Before-Tax, After-Tax and Unleveraged IRR and NPV)

ANNUAL CASH FLOW ANALYSIS

Net Operating Income 10,607,390$ 11,855,256$ 13,621,230$

- Annual Debt Service 3,667,232$ 3,667,232$ 3,667,232$

= Cash Flow Before Tax 6,940,158$ 8,188,024$ 9,953,998$

- Less Tax Liability 2,432,366$ 3,051,612$ 3,946,126$

Cash Flow After Tax 4,507,792$ 5,136,412$ 6,007,872$

Debt Service Coverage Ratio: 2.89 3.23 3.71

Internal Rate of Return Before Tax: 24.11%


Internal Rate of Return After Tax: 20.51%


Unleveraged Internal Rate of Return: 16.41%

Unleveraged Net Present Value: 7,685,446$


PHASING

Parc Seven development will be divided into four phases over a 10-year, 6-month construction period. This phasing plan preserves the existing shopping center’s revenue stream of roughly $5million annually over a 5½-year totaling approximately $25M that we anticipate putting into a contingency slush fund for the project. Also, these phases were strategically grouped according to their programed uses to permit us to subdivide the project into financially independent blocks that allow for market driven fluidity in use programming, mitigates risk, and allow for these blocks to be underwritten comfortable by lenders. Another opportunity our phasing concept presents is a strong exit strategy with the ability to sell off independent blocks to other developers if we no longer wished to remain developers of certain portions of the project that do not play to Federal Realty Investment Trusts strengths.

The site includes a rich mix of uses spread over a 12-acre lot:

2,864,529-GSF Programed

458,873-SF of retail (204,200-SF of which is dedicated to entertainment)

270,738-SF hotel (250-Key)

562,739-SF of multifamily residential (550 Units)

150,983-SF of condominiums (120 units)

584,846-SF of office

514,123-SF of parking (2,116 parking spaces)

46,831-SF of civic space

74,743-SF of public space

200,653-SF of Infrastructure

The plan is designed to accommodate Floor to Area Ratio (FAR) of 4.5 throughout the site.

Phase One – Office, Parc Seven Archway,

Retail, & Parking

Phase Two – Office, Retail, Entertainment

Options, Hotel, & Parking

Phase Three – Apartments, Condos, Retail,

Road Infrastructure, Grove Market,

Subterranean Gallery Walk, & Parking

Phase Four – Tetrault Civic Center, Retail, &

Parking


PHASE I

Phase One is critical to the success of the overall project and contains one of the architectural focal-points of the project that acts as the gateway building that greats metro riders coming from and going into the project—known as the “Parc Seven Archway”. This archway is contained within our first 355,566-SF class-A office tower. The pre-development in Phase One will take 18 months and includes the removal of an existing surface parking lot. Construction will take another 24 months. The decision to include office, retail, and parking in the first phase of development was to capitalize on this blocks location being closest to the metro and the high cash flow that office/retail will generate regardless of the rest of the project being under construction during operation. This will also allow us to provide the parking required for the further phases in the project. In addition, the existing retailers will serve as amenities to the office users and provide additional cash flow to FRIT towards their contingency ($5m annually).

Highlights:

Minimal demolition of existing conditions

Maintain Existing NOI of $5million/year

Programed 394,994-GSF

355,566-SF of Office

11,149-SF of Retail

27,619-SF of Parking (114 Spaces)


PHASE II

Phase Two contains an 18-month pre-development period and a 24-month construction period containing two deliberate stages:

Stage One will include the demolition of one-third of the existing shopping center on Block “F” and the acquisition and demolition of the existing structure on parcel “A”. These blocks will then be turned into surface parking lots to provide displaced parking for the existing shopping center while block “B” is under construction. Block “A” and “F’s” demolition will begin two-months before construction is completed on Phase One to ensure adequate parking is available for the shopping center and to serve as potential overflow to the users of Block “C”. Existing retail located on Block “D” and “E” will continue their normal operation for the remainder of Phase Two now generating about $1.7million annually.

Stage Two comprises the 24-month construction period for Block “B” will entail the construction of 27,619-SF of two-level structured parking containing 655 Spaces, another 230,000-SF of office, two-levels of retail to include Music venue, and a luxury boutique hotel.

Highlights:

Two Stages to accommodate parking

Acquisition & Demo of bldg. on Block “A”

Programed 778,404-GSF

229,280-SF of Office

119,310-SF of Retail Including a Music Venue

270,738-SF Boutique Hotel (250 Keys)

27,619-SF of Parking (655 Spaces)

Stage One

Stage One

Stage Two


PHASE III

Phase 3 contains an 18-month pre-development period and a 24-month construction period containing two deliberate stages:

Stage One involves the demolition of the remainder of the existing retail on blocks “D” and “E”. Once demolished, two mixed-use buildings (Buildings “D” and “E”) containing a blend of Apartments, boutique retail that rounds out the “Shoppes at Parc Seven”, entertainment options and parking will take its place. Also contained in these buildings will be the “Grove Market” food market and the entrance to the subterranean “Gallery Walk” Artist Walk.

Stage Two is the last part of the block to be developed will involve the construction of Building “F” which will house 120 condo units, first floor retail and additional parking. Construction of building “F" will begin 2 months into the demolition of building “D and “E”. This will be followed by the construction of Building “D” and Building “E”.

Also included in this phase will be the simultaneous construction of the main access road into the site, Grove Boulevard, which will direct vehicular traffic into the site off Leesburg Pike. Grove Boulevard will terminate at a traffic circle that intersects at Archway Drive in from of Building “C” and building “F”. This phase will also include all other site improvements including: The art installation at Grove Circle, light posts, benches, trash cans, etc.

Highlights:

Grove Market, Gallery Walk & Plaza delivered

Shoppes at Park Seven Delivered

1,135,404-GSF Programed

150,983-SF of Condominiums (120 Units)

562,739-SF of Multifamily Apartments (550 units)

164,505-SF of retail

257,177-SF of Parking (1,058 spaces)


PHASE IV

Phase 4 contains an 18-month pre-development period and a 24-month construction period and will focus on the construction of Building “A” which is slated to house the “Tetrault Performing Art Center”. This civic use building will provide a mix of retail, artist workshops and performing space, and parking. The goal is that this building will be managed by Fairfax County.

Phase Four marks our final development phase, with substantial completion for the entire Parc Seven development slated for March of 2025.

Highlights:

Delivery of “Tetrault Performing Art Center”

March 2025 Substantial Completion for Parc Seven

280,987-GSF Programed

46,831-SF of Civic Space

163,909-SF of Retail

70,247-SF of Parking (289 spaces)


PROJECT SCHEDULE

Pre-Development For each phase, pre-development consists of a zoning, design and permit period, with the exception of Phase 2 which also acquires the existing building located in Block “A” currently owned by the Commonwealth of Virginia. Pre-development is generally projected to span 18 months for each phase. Construction Construction is projected to occur approximately over a two-year period for each phase. In Phase 3, where more than one building is constructed in a single phase, each building is planned for construction concurrently to align with the two-year timeline. Pre-development for each subsequent phase will begin during the previous phase’s construction, overlapping in such a way to begin construction immediately after the prior phase’s building is delivered. Demolition Demolition of both the vacant building and the Goodyear building located in Block “ A”, along with BB&T Bank in Block “B”, will occur in Phase 2. Furthermore, demolition of a portion of the existing shopping center located in Block “F” will also occur in Phase 2. Lastly, the remaining existing shopping center is planned for demolition in Phase 3 when three mixed-use residential building are constructed in its place. Existing Shopping Center The existing shopping center will continue to generate income up through Phase 3. The entire shopping center will be operational through Phase 1. Two-thirds of the shopping center is planned to remain online through Phase 2. Finally, in Phase 3 the shopping center will be taken offline to develop the mixed-use residential product. Summary of Schedule (Pre-Development and Construction)Phase 1

Start Preconstruction July 2014 Construction January 2015

Lease-up Start June 2016 Delivery May 2019

Phase 2


Lease-up Start May 2019 Delivery April 2021

Phase 3


Lease-up Start April 2021 Delivery March 2023

Phase 4

Start Preconstruction June 2020


Delivery March 2025


APPENDICES

I. TEAM MEMBERS

Taylor Cooper earned her BS of Architecture from the Northeastern University in Boston, MA. Currently, she is in her second to last year of the Masters of Real Estate Development program at the University of Maryland. Her focus in the program has been Affordable Housing, Property and Asset Management and Finance and Investments. Professionally, she has spent much of her career in the architecture and banking industry performing design and document production. She looks forward to combing her design and development skills into a profitable portfolio of 2-4 residential mixed unit properties.

Tatiana Joseph earned her Bachelors of Business Administration with a specialization in Small Business Management and Entrepreneurship from The George Washington University. Currently, she is in her final semester of the Masters of Real Estate Development program at the University of Maryland. Her focus in the program has been Finance and Sustainability. Professionally, she has spent much of her career in higher education as a College Professor and as a Real Estate Investor, rehabbing and managing residential rental properties. She is a LEED GA and currently works with UMD’s Office of Sustainability to conduct a feasibility study and cost analysis to identify buildings on-campus suitable for pursuing LEED for Existing Buildings certification.

Tyler Krehbiel earned his BS in Architectural Engineering from California Polytechnic State University, San Luis Obispo with a concentration in structural engineering. He practiced in the structural engineering industry for five years with KPFF Consulting Engineers located in Irvine, California. Tyler is a registered professional civil engineer. Currently in his last semester in the Masters of Real Estate Development program at the University of Maryland with an emphasis in finance, Tyler also works full-time. After a summer internship with First Potomac Realty, Tyler is now a project manager with Jones Lang LaSalle (JLL) in the Project and Development Services department. He is working on projects ranging from repositioning multifamily residential buildings to ground-up hotel development. He looks forward to harnessing his skills in structural and civil engineering, surveying, architecture, and construction and apply to the real estate development industry.

Aaron Loeb joined Greysteel's Retail Division as Investment Associate at its inception with a background in finance and economics. In this position Mr. Loeb heads a team of retail analysts who perform due diligence and analysis on middle-market anchored and unanchored shopping centers and urban retail portfolios as well as track mid-Atlantic retail trends. Mr. Loeb is currently a candidate for a Master’s in Real Estate Development at the University of Maryland, Colvin Institute of Real Estate Development. An active student, Aaron sits on the Deans’ Student Advisory Board. Outside of school and the office Aaron maintains a strong commitment to family and community including active participation in a Maryland think tank of young community leaders who grapple with resolutions for timely issues affecting his local community.

Anthony Notarfrancesco earned his BS in Community and Regional Planning from Temple University’s School of Environmental Design and a minor in General Business Studies from the Fox School of Business and Management. Professionally, he works as a Research Associate at CoStar Group with a focus on the Virginia market.


Chau Pham graduated with a Masters of Architecture at the University of Maryland, and is continuing her studies into the Masters of Real Estate Development program. During her architectural thesis, she was interested in reviving the soul of Third Ward, Houston by revealing its own identity and sense of place with form-based codes and transit-oriented developments. She hopes to mesh the two fields in order to work on public-interest and community development projects in the future.

Timur Ryspekov is a 2014 Master of Real Estate Development Candidate at the University of Maryland. Born and raised in Bishkek, Kyrgyzstan, Timur moved to the United States in 2003 to pursue his undergraduate degree in Architecture at the University of Maryland. Currently an engineer at the Computer Sciences Corporation, Timur is interested in pursuing a career in real estate development with an emphasis on place making in mixed-use retail and residential developments.

Ryan Smyth works as an Acquisitions Analyst for Lock 7 Development, LLC, a real estate development company based in Washington, D.C. He has a BS from West Virginia University and is currently pursuing a Master’s of Real Estate Development degree at the University of Maryland. Ryan analyzes the potential profitability of properties under consideration for investment, and expedites projects currently in the company’s pipeline. Prior to joining Lock 7, he worked as a sales manager for a production homebuilder in addition to owning several small businesses including a restaurant and tanning salon.

Samuel Vana earned his Bachelors of Architecture from the University of Miami (FL). He is currently in his final semester at the University of Maryland, Colvin Institute of Real Estate Development and is projected to graduate with his Master Degree of Real Estate Development in May 2014. After working in the architecture field for one and a half years, he decided to pursue a career in real estate. In addition to his scholastic degrees, he is also a LEED Green Associate with the US Green Building Council. He currently is the co-founder of his own real estate investing company that specializes in single-family acquisitions, renovations and rentals.

Meghan Walsh has a Bachelor Degree in Family Law from the University of Maryland College Park and also a Master Degree in Real Estate Development—where her final development capstone project placed first in the programs Colvin Capstone Competition. She also holds a Certificate in Landscape Design and Horticulture from the Community College of Baltimore County. Professionally, Meghan serves as Development Director at Cross Street Partners where she is responsible for the management of cutting edge development projects that include urban adaptive reuse projects, food markets, and transit-oriented developments (TODs) both locally and around the country. She also helps to secure creative financing for their partners and clients; and assists with other aspects of their real estate and master planning consulting practices. Ms. Walsh has additional experience with industrial R&D/flex, office, retail, government, mixed-use, Institutional, and multi-family projects of diverse scale and complexity; in both the public and private sector in multiple counties throughout Maryland and Pennsylvania. Prior to joining Cross Street Partners, Ms. Walsh worked as a Development Associate for St. John Properties. Before moving into real estate development, Meghan was the COO and Co-founder of a green technology start-up that was recognized as one of Baltimore’s 2010 Top 15 Hottest New Tech Companies by the Greater Baltimore Technology Council and Meghan was the 2010 recipient of Baltimore's EcoCEO Award by SmartCEO Magazine

Amy Weber earned her Bachelor of Science in Architecture from the University of Maryland. She is

currently completing her Master of Real Estate Development at the University of Maryland with a focus in

sustainable and international development. Professionally, she works in development management at a

large international real estate services company and holds a LEED Green Associate accreditation.


II. SITE ANALYSIS SUPPLEMENT

II.1- Street section of Grove Street

II.2- Typical Street section within Parc Seven


II.3 - Bicycle Parking Ratios for Urban Mixed Use Centers.

Source: Fairfax County Comprehensive Plan (2013).

II.4- Parking Ratios for Tysons Corner

Source: Fairfax Zoning Ordinance Article 11 (2014)

Fairfax County Comprehensive Plan (2013).

Type of Use Requirement

Multifamily

Residential

Residents: 1 space/5 units

Visitors: 1 space/25 units

Minimum is 2 spaces.

Commercial-

Retail

Employee: 1 space/10,000 sqft

Visitor: 1/5,000 sqft


Office Employee: 1 space/7,500 sqft

Visitor: 1/20,000 sqft


Use

Previous

(2009)

Min. Min. Max.

Townhouse 2.7 1.75 2.2

Multifamily

0-1 bedroom 1.6 1.0 1.3

2 bedroom 1.6 1.0 1.6

3+ bedroom 1.6 1.0 1.9

Hotel/Motel 1.08 none 1.0

Office 2.6 none 2.0

Retail/Commercial

Business Service &

Supply Service Est. 3.3 none 3.3

Personal Service 5.0 none 5.0

Restaurant 1.0 none 1.0

Financial Institution 4.0 none 4.0

Retail Sales

First 1,000 sqft. 5.0 none 5.0

Every additional 1,000 sqft. 6.0 6.0

Theatre, Auditorium

0.3 none

0.3

per seat

Bowling Alley

4.0 none

4.0

per alley +

1/employee

1/8-1/4 mile

Metro Station

Parking Spaces Per Unit or Spaces Per 1,000 sq. ft.


III. DESIGN SUPPLEMENT

III.1 – “Tetrault Performing Arts Center” Rendering


III.2 – Zetta Hotel Precedent Images


III.3 – Grove Market with Apartments Rendering and Precedent Food Market Images


III.4 – View of Condominiums from Grove Traffic Circle


III.4 – Renderings of “The Grove Gallery Walk Site Plan and Cross Sections”


III.5 – Renderings of “Parc Seven Archway Entrance into the Project”


IV. MARKET SUPPLEMENT

IV.1-Retail Mix by Use

Retail Square Footage Avg. Indv. SF # of Shops Total SF

FOOD

GROCERY

Grove Market 40,000 1 40,000

RESTAURANT

Fast Casual --> Stand Alone 5,000 16 80,000

Total Food 17 120,000

GYM

VIDA 45,000 1 45,000

Total Gym 1 45,000

SERVICES

DRY CLEANER 1,200 1 1,200

CAFÉ 2,500 2 5,000

VANITY RETAIL 2,000 15 30,000

BANK 2,300 1 2,300

BIKE SHOP 3,000 1 3,000

PHARMACY 12,000 1 12,000

Total Sevices 21 53,500

Apparel / Merchandise

DESIGNER SHOE WAREHOUSE 20,000 1 20,000

BOUTIQUES 2,000 16 32,000

PETS 1,500 1 1,500

HOUSEWARES 20,000 1 20,000

Total Merch 19 73,500

Entertainment

PINSTRIPES 40,000 1 40,000

MUSIC VENUE 40,000 1 40,000

IMAX THEATER 86,638 1 86,638

BARS (w/ food Service) 2,800 14 39,200

Total Ent 17 205,838

APPROXIMATE RETAIL SF 498,649


IV.2 – -Retail Mix by Building

Avg.

Indv. SF

# of

Shops

Total SF

BUILDING A - CIVIC BUILDING

Restaurant 5,000 3 15,000

Pet Shop 1,500 1 1,500

Bank 2,300 1 2,300

Vanity Retail 1,200 3 3,600

IMAX Theater 86,638 1 86,638

Entertainment 40,000 1 40,000

Bar 3,000 3 9,000

Total 13 158,038

BUILDING B - HOTEL/OFFICE

Housewares 20,000 1 20,000


Entertainment 40,000 1 40,000


Pharmacy 12,000 1 12,000

Designer Shoe Warehouse 20,000 1 20,000

Bar 1,200 7 8,400

Dry Cleaner 1,200 1 1,200

Total 25 147,600

BUILDING C - OFFICE

Bike Shop 3,000 1 3,000


Bar 3,000 1 3,000

Café 2,500 1 2,500

Total 4 10,000

BUILDING D - MULTIFAMILY

VIDA (gym) 45,000 1 45,000

Grove Market 10,000 1 10,000

Total 2 55,000

BUILDING E - MULTIFAMILY

Boutique 2,000 8 16,000


Café 2,000 1 2,000


Grove Market 30,000 1 30,000

Total 15 65,400

BUILDING F - CONDO



Boutique 2,000 8 16,000

Total 12 32,000


V. FINANCIAL SUPPLEMENT

V.1 – Phase I Lease-Up Schedule

2018 1ST YEAR LEASE UP SCHEDULE January February March April May June July August September October November December Total


Office 3 0 1 1 1 0 1 0 1 0 0 1 9

Retail 1 0 0 0 0 0 0 0 0 0 0 0 1

Parking 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Units Leased 4 0 1 1 1 0 1 0 1 0 0 1 10

RENTAL INCOME: 417,477$ 417,477$ 535,151$ 652,825$ 770,498$ 770,498$ 816,906$ 816,906$ 863,314$ 863,314$ 863,314$ 909,722$ 8,697,401$

POTENTIAL RENTAL INCOME:

Potential Office Income 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 17,760,522$

Potential Retail Income 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 773,462$

Potential Parking Income 8,524$ 8,524$ 8,524$ 8,524$ 8,524$ 8,524$ 8,524$ 8,524$ 8,524$ 8,524$ 8,524$ 8,524$ 102,293$

Total Potential Income 1,553,023$ 1,553,023$ 1,553,023$ 1,553,023$ 1,553,023$ 1,553,023$ 1,553,023$ 1,553,023$ 1,553,023$ 1,553,023$ 1,553,023$ 1,553,023$ 18,636,276$

Vacancy & Credit Loss 1,135,546$ 1,135,546$ 1,017,872$ 900,198$ 782,525$ 782,525$ 736,117$ 736,117$ 689,709$ 689,709$ 689,709$ 643,301$ 9,938,875$

EFFECTIVE GROSS REVENUE: 417,477$ 417,477$ 535,151$ 652,825$ 770,498$ 770,498$ 816,906$ 816,906$ 863,314$ 863,314$ 863,314$ 909,722$ 8,697,401$

Tenant Improvement Allowance 62,622$ 62,622$ 80,273$ 97,924$ 115,575$ 115,575$ 122,536$ 122,536$ 129,497$ 129,497$ 129,497$ 136,458$ 1,304,610$

Free Rent Impact 41,748$ 41,748$ 53,515$ 65,282$ 77,050$ 77,050$ 81,691$ 81,691$ 86,331$ 86,331$ 86,331$ 90,972$ 869,740$

Other Concessions 8,350$ 8,350$ 10,703$ 13,056$ 15,410$ 15,410$ 16,338$ 16,338$ 17,266$ 17,266$ 17,266$ 18,194$ 173,948$

Real Estate Taxes 83,936$ 83,936$ 83,936$ 83,936$ 83,936$ 83,936$ 83,936$ 83,936$ 83,936$ 83,936$ 83,936$ 83,936$ 1,007,230$

TOTAL OPERATING EXPENSES: 442,937$ 442,937$ 442,937$ 442,937$ 442,937$ 442,937$ 442,937$ 442,937$ 442,937$ 442,937$ 442,937$ 442,937$ 5,315,242$

NET OPERATING INCOME (NOI): 220,822$ 220,822$ 306,724$ 392,626$ 478,528$ 478,528$ 512,406$ 512,406$ 546,283$ 546,283$ 546,283$ 580,161$ 5,341,873$

2019 2ND YEAR LEASE UP SCHEDULE January February March April May June July August September October November December Total


Office 1 0 1 1 0 0 1 0 0 1 0 1 6

Retail 0 0 0 0 0 0 0 0 0 0 0 0 0

Parking 0 0 0 0 0 0 0 0 0 0 0 1 1


RENTAL INCOME: 956,129$ 956,129$ 1,073,803$ 1,191,477$ 1,191,477$ 1,191,477$ 1,309,151$ 1,309,151$ 1,309,151$ 1,426,825$ 1,426,825$ 1,553,023$ 14,894,618$


Potential Office Income 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 1,480,043$ 17,760,522$

Potential Retail Income 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 64,455$ 773,462$



Vacancy & Credit Loss 596,894$ 596,894$ 479,220$ 361,546$ 361,546$ 361,546$ 243,872$ 243,872$ 243,872$ 126,198$ 126,198$ -$ 3,741,658$

EFFECTIVE GROSS REVENUE: 956,129$ 956,129$ 1,073,803$ 1,191,477$ 1,191,477$ 1,191,477$ 1,309,151$ 1,309,151$ 1,309,151$ 1,426,825$ 1,426,825$ 1,553,023$ 14,894,618$


Free Rent Impact 95,613$ 95,613$ 107,380$ 119,148$ 119,148$ 119,148$ 130,915$ 130,915$ 130,915$ 142,682$ 142,682$ 155,302$ 1,489,462$






V.2 – Phase I Construction Draw Schedule

Phase I





Rate: 6.75%

Retainage: 10.00%


Jan-16 2,416,307$ (241,631)$ 2,174,676$ 2,174,676$ 12,233$

Feb-16 2,416,307$ (241,631)$ 2,174,676$ 4,349,353$ 24,465$

Mar-16 2,416,307$ (241,631)$ 2,174,676$ 6,524,029$ 36,698$

Apr-16 2,416,307$ (241,631)$ 2,174,676$ 8,698,705$ 48,930$

May-16 2,416,307$ (241,631)$ 2,174,676$ 10,873,382$ 61,163$

Jun-16 2,416,307$ (241,631)$ 2,174,676$ 13,048,058$ 73,395$

Jul-16 2,416,307$ (241,631)$ 2,174,676$ 15,222,734$ 85,628$

Aug-16 2,416,307$ (241,631)$ 2,174,676$ 17,397,411$ 97,860$

Sep-16 2,416,307$ (241,631)$ 2,174,676$ 19,572,087$ 110,093$

Oct-16 2,416,307$ (241,631)$ 2,174,676$ 21,746,763$ 122,326$

Nov-16 2,416,307$ (241,631)$ 2,174,676$ 23,921,440$ 134,558$

Dec-16 2,416,307$ (241,631)$ 2,174,676$ 26,096,116$ 146,791$

Jan-17 2,416,307$ (241,631)$ 2,174,676$ 28,270,792$ 159,023$

Feb-17 2,416,307$ (241,631)$ 2,174,676$ 30,445,468$ 171,256$

Mar-17 2,416,307$ (241,631)$ 2,174,676$ 32,620,145$ 183,488$

Apr-17 2,416,307$ (241,631)$ 2,174,676$ 34,794,821$ 195,721$

May-17 2,416,307$ (241,631)$ 2,174,676$ 36,969,497$ 207,953$

Jun-17 2,416,307$ (241,631)$ 2,174,676$ 39,144,174$ 220,186$

Jul-17 2,416,307$ (241,631)$ 2,174,676$ 41,318,850$ 232,419$

Aug-17 2,416,307$ (241,631)$ 2,174,676$ 43,493,526$ 244,651$

Sep-17 2,416,307$ (241,631)$ 2,174,676$ 45,668,203$ 256,884$

Oct-17 2,416,307$ (241,631)$ 2,174,676$ 47,842,879$ 269,116$

Nov-17 2,416,307$ (241,631)$ 2,174,676$ 50,017,555$ 281,349$

Dec-17 8,215,444$ 2,657,938$ 13,772,950$ 63,790,505$ 212,031$

TOTALS 63,790,505$ 63,790,505$ 3,582,510$


V.3 – Phase I Basis & Depreciation Breakdown


V.4 – Phase I Income & Expense Statement

V.5 – Phase I Mortgage & Depreciation

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

Period Beginning Date: Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 Jan-29

Period Ending Date: Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Dec-29


Beginning Balance 50,997,718$ 49,983,697$ 48,915,140$ 47,789,114$ 46,602,529$ 45,352,127$ 44,034,475$ 42,645,958$ 41,182,764$ 39,640,876$ 38,016,063$ 36,303,864$

Ending Balance 49,983,697$ 48,915,140$ 47,789,114$ 46,602,529$ 45,352,127$ 44,034,475$ 42,645,958$ 41,182,764$ 39,640,876$ 38,016,063$ 36,303,864$ 34,499,580$

Principal Reduction 1,014,021$ 1,068,557$ 1,126,026$ 1,186,586$ 1,250,402$ 1,317,651$ 1,388,517$ 1,463,194$ 1,541,888$ 1,624,813$ 1,712,199$ 1,804,284$

Interest Expense 2,653,211$ 2,598,675$ 2,541,206$ 2,480,646$ 2,416,830$ 2,349,581$ 2,278,715$ 2,204,038$ 2,125,344$ 2,042,419$ 1,955,033$ 1,862,948$

Yearly Principal Reduction 1,014,021$ 1,068,557$ 1,126,026$ 1,186,586$ 1,250,402$ 1,317,651$ 1,388,517$ 1,463,194$ 1,541,888$ 1,624,813$ 1,712,199$ 1,804,284$

Yearly Interest Expense 2,653,211$ 2,598,675$ 2,541,206$ 2,480,646$ 2,416,830$ 2,349,581$ 2,278,715$ 2,204,038$ 2,125,344$ 2,042,419$ 1,955,033$ 1,862,948$

Commercial Cost Recovery (Depreciation) Calculation 39 Year Straight Line


Less Cost Recovery 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$

Additions to Basis -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Less Additions Cost Recovery -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Ending Balance 80,481,070$ 76,245,224$ 74,127,301$ 72,009,379$ 69,891,456$ 67,773,533$ 65,655,610$ 63,537,687$ 61,419,764$ 59,301,841$ 57,183,918$ 55,065,995$

Cumulative Cost Recovery 2,117,923$ 4,235,846$ 6,353,769$ 8,471,692$ 10,589,614$ 12,707,537$ 14,825,460$ 16,943,383$ 19,061,306$ 21,179,229$ 23,297,152$ 25,415,075$

Cumulative Straight Line -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Recapture -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Remaining Book Value 78,363,147$ 76,245,224$ 74,127,301$ 72,009,379$ 69,891,456$ 67,773,533$ 65,655,610$ 63,537,687$ 61,419,764$ 59,301,841$ 57,183,918$ 55,065,995$

Total Annual Cost Recovery 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$ 2,117,923$

Amortization

Beginning Balance 391,535$ 375,874$ 360,212$ 344,551$ 328,890$ 313,228$ 297,567$ 281,905$ 266,244$ 250,583$ 234,921$ 219,260$

Less Cost Recovery 15,661$ 15,661$ 15,661$ 15,661$ 15,661$ 15,661$ 15,661$ 15,661$ 15,661$ 15,661$ 15,661$ 15,661$

Ending Balance 375,874$ 360,212$ 344,551$ 328,890$ 313,228$ 297,567$ 281,905$ 266,244$ 250,583$ 234,921$ 219,260$ 203,598$


V.6 – Phase I Sales Schedule

Sale Schedule Lease Up Year Lease Up Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 Jan-29

Period Beginning Date Cap Rate Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Dec-29


Sales Proceeds Before Tax

Sales Price (NOI/CAP) (31,138,124)$ 44,261,349$ 176,789,836$ 181,776,466$ 186,902,390$ 192,171,452$ 197,587,601$ 203,154,892$ 208,877,490$ 214,759,675$ 220,805,841$ 227,020,502$

+ Reserve Fund -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- Less Commission 6.00% (1,868,287)$ 2,655,681$ 10,607,390$ 10,906,588$ 11,214,143$ 11,530,287$ 11,855,256$ 12,189,294$ 12,532,649$ 12,885,581$ 13,248,350$ 13,621,230$

= Adjusted Sales Price (29,269,837)$ 41,605,668$ 166,182,446$ 170,869,878$ 175,688,247$ 180,641,165$ 185,732,345$ 190,965,598$ 196,344,841$ 201,874,095$ 207,557,491$ 213,399,272$

- Less Mortgage Balance 49,983,697$ 48,915,140$ 47,789,114$ 46,602,529$ 45,352,127$ 44,034,475$ 42,645,958$ 41,182,764$ 39,640,876$ 38,016,063$ 36,303,864$ 34,499,580$

= Total Sale Proceeds Before Tax (79,253,534)$ (7,309,472)$ 118,393,332$ 124,267,349$ 130,336,120$ 136,606,690$ 143,086,387$ 149,782,834$ 156,703,965$ 163,858,032$ 171,253,627$ 178,899,692$

Sales Proceeds Before Tax (79,253,534)$ (7,309,472)$ 118,393,332$ 124,267,349$ 130,336,120$ 136,606,690$ 143,086,387$ 149,782,834$ 156,703,965$ 163,858,032$ 171,253,627$ 178,899,692$

- Tax On Capital Gains (32,246,086)$ (11,990,409)$ 22,579,647$ 23,880,409$ 25,217,506$ 26,591,941$ 28,004,743$ 29,456,971$ 30,949,711$ 32,484,079$ 34,061,221$ 35,682,316$

- Tax On Ordinary Income (164,053)$ (157,491)$ (150,929)$ (144,367)$ (137,805)$ (131,243)$ (124,680)$ (118,118)$ (111,556)$ (104,994)$ (98,432)$ (91,870)$

= Sales Proceeds After Tax (46,843,395)$ 4,838,429$ 95,964,614$ 100,531,307$ 105,256,419$ 110,145,992$ 115,206,324$ 120,443,982$ 125,865,810$ 131,478,947$ 137,290,837$ 143,309,246$

Calculations

Acquisition Basis 89,050,196$ 89,050,196$ 89,050,196$ 89,050,196$ 89,050,196$ 89,050,196$ 89,050,196$ 89,050,196$ 89,050,196$ 89,050,196$ 89,050,196$ 89,050,196$

+ Capital Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- Cost Recovery 2,117,923$ 4,235,846$ 4,235,846$ 4,235,846$ 4,235,846$ 4,235,846$ 4,235,846$ 4,235,846$ 4,235,846$ 4,235,846$ 4,235,846$ 4,235,846$

= Adjusted Basis 86,932,274$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$

Sales Price (31,138,124)$ 44,261,349$ 176,789,836$ 181,776,466$ 186,902,390$ 192,171,452$ 197,587,601$ 203,154,892$ 208,877,490$ 214,759,675$ 220,805,841$ 227,020,502$

- Cost of Sale (1,868,287)$ 2,655,681$ 10,607,390$ 10,906,588$ 11,214,143$ 11,530,287$ 11,855,256$ 12,189,294$ 12,532,649$ 12,885,581$ 13,248,350$ 13,621,230$

- Adjusted Basis 86,932,274$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$ 84,814,351$

= Total Gain (116,202,110)$ (43,208,682)$ 81,368,096$ 86,055,528$ 90,873,896$ 95,826,814$ 100,917,994$ 106,151,248$ 111,530,490$ 117,059,744$ 122,743,140$ 128,584,921$

Capital Gain Tax Rate

(Federal & State) 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75%

Tax on Capital Gain (Savings) (32,246,086)$ (11,990,409)$ 22,579,647$ 23,880,409$ 25,217,506$ 26,591,941$ 28,004,743$ 29,456,971$ 30,949,711$ 32,484,079$ 34,061,221$ 35,682,316$

Recapture Of Cost Recovery -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Unamortized Expenditures (391,535)$ (375,874)$ (360,212)$ (344,551)$ (328,890)$ (313,228)$ (297,567)$ (281,905)$ (266,244)$ (250,583)$ (234,921)$ (219,260)$

Ordinary Income On Sale (Savings) (391,535)$ (375,874)$ (360,212)$ (344,551)$ (328,890)$ (313,228)$ (297,567)$ (281,905)$ (266,244)$ (250,583)$ (234,921)$ (219,260)$

Ordinary Income Tax Rate

(Federal & State) 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90%

Tax on Ordinary Income (164,053)$ (157,491)$ (150,929)$ (144,367)$ (137,805)$ (131,243)$ (124,680)$ (118,118)$ (111,556)$ (104,994)$ (98,432)$ (91,870)$


V.7 – Phase I Financial Statement


V.8 – Before-Tax, After-Tax and Unleveraged Internal Rate of Return

Investment Results BEFORE TAX LEVERAGED BEFORE TAX LEVERAGED

LLC (and/or LP) INVESTMENT RESULTS

LLC Cash Flow Before-tax LLC LLC Cash Flow Before-tax LLC

Equity Before Property Before-tax Equity Before Property Before-tax

Year Pay-In Taxes Sale Distribution Year Pay-In Taxes Sale Distribution

2016 (32,641,714)$ -$ (32,641,714)$ 2016 (32,641,714)$ (32,641,714)$

2017 -$ (5,535,519)$ (5,535,519)$ 2017 -$ (5,535,519)$ (5,535,519)$

2018 -$ (1,011,551)$ (1,011,551)$ 2018 -$ (1,011,551)$ (1,011,551)$

2019 -$ 6,940,158$ 6,940,158$ 2019 -$ 6,940,158$ 6,940,158$

2020 -$ 7,239,356$ 7,239,356$ 2020 -$ 7,239,356$ 7,239,356$

2021 -$ 7,546,911$ 7,546,911$ 2021 -$ 7,546,911$ 7,546,911$

2022 -$ 7,863,055$ 7,863,055$ 2022 -$ 7,863,055$ 7,863,055$

2023 -$ 8,188,024$ 143,086,387$ 151,274,411$ 2023 -$ 8,188,024$ 8,188,024$

Total (32,641,714)$ 31,230,435$ 143,086,387$ 141,675,107$ 2024 -$ 8,522,062$ 8,522,062$

2025 -$ 8,865,418$ 8,865,418$

Figures are for the entire ownership equity - The LLC (and/or partnerships) 2026 -$ 9,953,998$ 178,899,692$ 188,853,690$

Total (32,641,714)$ 58,571,912$ 178,899,692$ 204,829,889$

Internal Rate of Return Before Tax: 27.59% Internal Rate of Return Before Tax: 24.11%

Before Tax Net Present Value: 30,003,064$ Before Tax Net Present Value: 28,434,588$

Hurdle Rate: 15.00% Hurdle Rate: 15.00%

NPV Rate: 15.00% NPV Rate: 15.00%

Investment Results AFTER TAX LEVERAGED AFTER TAX LEVERAGED


LLC Cash Flow After-tax LLC LLC Cash Flow After-tax LLC

Equity After Property After-tax Equity After Property After-tax


2016 (32,641,714)$ -$ (32,641,714)$ 2016 (32,641,714)$ -$ (32,641,714)$

2017 -$ (2,806,935)$ (2,806,935)$ 2017 -$ (2,806,935)$ (2,806,935)$

2018 -$ (160,154)$ (160,154)$ 2018 -$ (160,154)$ (160,154)$

2019 -$ 4,507,792$ 4,507,792$ 2019 -$ 4,507,792$ 4,507,792$

2020 -$ 4,659,490$ 4,659,490$ 2020 -$ 4,659,490$ 4,659,490$

2021 -$ 4,814,782$ 4,814,782$ 2021 -$ 4,814,782$ 4,814,782$

2022 -$ 4,973,735$ 4,973,735$ 2022 -$ 4,973,735$ 4,973,735$

2023 -$ 5,136,412$ 115,206,324$ 120,342,736$ 2023 -$ 5,136,412$ 5,136,412$

Total (32,641,714)$ 21,125,122$ 115,206,324$ 103,689,732$ 2024 -$ 5,302,876$ 5,302,876$

2025 -$ 5,825,628$ 5,825,628$


Total (32,641,714)$ 38,261,498$ 143,309,246$ 148,929,030$

Internal Rate of Return After Tax: 23.45% Internal Rate of Return After Tax: 20.51%

After Tax Net Present Value: 17,573,713$ After Tax Net Present Value: 14,954,679$



Investment Results UNLEVERAGED UNLEVERAGED


LLC Cash Flow Property LLC LLC Cash Flow Property LLC

Equity Sale Distribution Equity Sale Distribution

Year Pay-In Year Pay-In

2016 (83,639,432)$ -$ (83,639,432)$ 2016 (83,639,432)$ (83,639,432)$

2017 -$ (1,868,287)$ (1,868,287)$ 2017 -$ (1,868,287)$ (1,868,287)$

2018 -$ 2,655,681$ 2,655,681$ 2018 -$ 2,655,681$ 2,655,681$

2019 -$ 10,607,390$ 10,607,390$ 2019 -$ 10,607,390$ 10,607,390$

2020 -$ 10,906,588$ 10,906,588$ 2020 -$ 10,906,588$ 10,906,588$

2021 -$ 11,214,143$ 11,214,143$ 2021 -$ 11,214,143$ 11,214,143$

2022 -$ 11,530,287$ 11,530,287$ 2022 -$ 11,530,287$ 11,530,287$

2023 -$ 11,855,256$ 185,732,345$ 197,587,601$ 2023 -$ 11,855,256$ 11,855,256$

Total (83,639,432)$ 56,901,058$ 185,732,345$ 158,993,971$ 2024 -$ 12,189,294$ 12,189,294$

2025 -$ 13,248,350$ 13,248,350$


Total (83,639,432)$ 95,959,932$ 213,399,272$ 225,719,772$

Unleveraged Internal Rate of Return: 17.99% Unleveraged Internal Rate of Return: 16.41%

Unleveraged Net Present Value: 12,865,413$ Unleveraged Net Present Value: 7,685,446$




V.9 – Phase II Lease-Up Schedule

2020 FIRST YEAR LEASE UP SCHEDULE January February March April May June July August September October November December Total


Hotel 4.5 0 0 0 0 0 0 0 0 0 0 0 4.5

Office 1 0 0 0 0 0 1 0 0 0 0 0 2

Retail 1 0 0 0 0 0 0 0 0 0 0.5 0 1.5

Parking 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Units Leased 6.5 0 0 0 0 0 1 0 0 0 0.5 0 8

RENTAL INCOME: 1,674,220$ 1,674,220$ 1,674,220$ 1,674,220$ 1,674,220$ 1,674,220$ 1,912,814.50$ 1,912,815$ 1,912,815$ 1,912,815$ 2,142,735$ 2,142,735$ 21,982,048$


Potential Hotel Income 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 11,709,419$

Potential Office Income 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 11,452,536$

Potential Retail Income 689,761$ 689,761$ 689,761$ 689,761$ 689,761$ 689,761$ 689,761$ 689,761$ 689,761$ 689,761$ 689,761$ 689,761$ 8,277,131$

Potential Parking Income 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 1,178,370$


Vacancy & Credit Loss 1,043,901$ 1,043,901$ 1,043,901$ 1,043,901$ 1,043,901$ 1,043,901$ 805,307$ 805,307$ 805,307$ 805,307$ 575,387$ 575,387$ 10,635,408$

EFFECTIVE GROSS REVENUE: 1,674,220$ 1,674,220$ 1,674,220$ 1,674,220$ 1,674,220$ 1,674,220$ 1,912,815$ 1,912,815$ 1,912,815$ 1,912,815$ 2,142,735$ 2,142,735$ 21,982,048$


Free Rent Impact 167,422$ 167,422$ 167,422$ 167,422$ 167,422$ 167,422$ 191,281$ 191,281$ 191,281$ 191,281$ 214,273$ 214,273$ 2,198,205$




NET OPERATING INCOME (NOI): 1,045,379$ 1,045,379$ 1,045,379$ 1,045,379$ 1,045,379$ 1,045,379$ 1,219,553$ 1,219,553$ 1,219,553$ 1,219,553$ 1,387,395$ 1,387,395$ 13,925,274$

2021 SECOND YEAR LEASE UP SCHEDULE January February March April May June July August September October November December Total


Hotel 0 0 0 0 0 0 0 0 0 0 0 0 0

Office 0 1 0 0 0 0 0 0 1 0 0 0 2

Retail 0 0 0 0 0 0 0 0 0 0 0 0 0

Parking 0 0 0 0 0 0 0 0 0 0 0 2 2


RENTAL INCOME: 2,142,735$ 2,381,329$ 2,381,329$ 2,381,329$ 2,381,329$ 2,381,329$ 2,381,329$ 2,381,329$ 2,619,924$ 2,619,924$ 2,619,924$ 2,718,121$ 29,389,933$


Potential Hotel Income 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 975,785$ 11,709,419$

Potential Office Income 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 954,378$ 11,452,536$


Potential Parking Income 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 98,198$ 1,178,370$


Vacancy & Credit Loss 575,387$ 336,792$ 336,792$ 336,792$ 336,792$ 336,792$ 336,792$ 336,792$ 98,198$ 98,198$ 98,198$ -$ 3,227,523$



Free Rent Impact 214,273$ 238,133$ 238,133$ 238,133$ 238,133$ 238,133$ 238,133$ 238,133$ 261,992$ 261,992$ 261,992$ 271,812$ 2,938,993$




NET OPERATING INCOME (NOI): 1,387,395$ 1,590,598$ 1,590,598$ 1,590,598$ 1,590,598$ 1,590,598$ 1,590,598$ 1,590,598$ 1,793,403$ 1,793,403$ 1,793,403$ 1,876,871$ 19,333,030$


V.10 – Phase II Construction Draw Schedule

Phase II





Rate: 6.75%

Retainage: 10.00%


Jan-18 4,964,120$ (496,412)$ 4,467,708$ 4,467,708$ 25,131$

Feb-18 4,964,120$ (496,412)$ 4,467,708$ 8,935,415$ 50,262$

Mar-18 4,964,120$ (496,412)$ 4,467,708$ 13,403,123$ 75,393$

Apr-18 4,964,120$ (496,412)$ 4,467,708$ 17,870,830$ 100,523$

May-18 4,964,120$ (496,412)$ 4,467,708$ 22,338,538$ 125,654$

Jun-18 4,964,120$ (496,412)$ 4,467,708$ 26,806,246$ 150,785$

Jul-18 4,964,120$ (496,412)$ 4,467,708$ 31,273,953$ 175,916$

Aug-18 4,964,120$ (496,412)$ 4,467,708$ 35,741,661$ 201,047$

Sep-18 4,964,120$ (496,412)$ 4,467,708$ 40,209,369$ 226,178$

Oct-18 4,964,120$ (496,412)$ 4,467,708$ 44,677,076$ 251,309$

Nov-18 4,964,120$ (496,412)$ 4,467,708$ 49,144,784$ 276,439$

Dec-18 4,964,120$ (496,412)$ 4,467,708$ 53,612,491$ 301,570$

Jan-19 4,964,120$ (496,412)$ 4,467,708$ 58,080,199$ 326,701$

Feb-19 4,964,120$ (496,412)$ 4,467,708$ 62,547,907$ 351,832$

Mar-19 4,964,120$ (496,412)$ 4,467,708$ 67,015,614$ 376,963$

Apr-19 4,964,120$ (496,412)$ 4,467,708$ 71,483,322$ 402,094$

May-19 4,964,120$ (496,412)$ 4,467,708$ 75,951,030$ 427,225$

Jun-19 4,964,120$ (496,412)$ 4,467,708$ 80,418,737$ 452,355$

Jul-19 4,964,120$ (496,412)$ 4,467,708$ 84,886,445$ 477,486$

Aug-19 4,964,120$ (496,412)$ 4,467,708$ 89,354,152$ 502,617$

Sep-19 4,964,120$ (496,412)$ 4,467,708$ 93,821,860$ 527,748$

Oct-19 4,964,120$ (496,412)$ 4,467,708$ 98,289,568$ 552,879$

Nov-19 4,964,120$ (496,412)$ 4,467,708$ 102,757,275$ 578,010$

Dec-19 16,878,007$ 5,460,532$ 28,295,482$ 131,052,757$ 435,601$

TOTALS 131,052,757$ 131,052,757$ 7,371,718$


V.11 – Phase II Basis & Depreciation

Uses (Non Basis) Commercial 7 - Year Amortize


Acquisition

Land & Building Acquisition 18,330,068$ 18,330,068$ 18,330,068$ -$ -$ -$

Demolition 4,660,141$ 4,660,141$ -$ -$ -$ 4,660,141$

Total Acquisition 22,990,209$ 22,990,209$ 18,330,068$ -$ -$ 4,660,141$

Construction

Retail 16,613,918$ 16,613,918$ -$ 16,613,918$ -$ -$

Office 38,177,413$ 38,177,413$ -$ 38,177,413$ -$ -$

Hotel 67,532,887$ 67,532,887$ -$ 67,532,887$ -$ -$

Parking 8,332,610$ 8,332,610$ -$ 8,332,610$ -$ -$

Taxes 395,929$ 395,929$ -$ 395,929$ -$ -$

Total Construction 131,052,757$ 131,052,757$ -$ 131,052,757$ -$ -$


Points & Fees (Origination) 655,264$ -$ -$ 655,264$ -$ -$

Interest Expense 7,371,718$ -$ -$ 7,371,718$ -$ -$

Total Construction Financing 8,026,981$ -$ -$ 8,026,981$ -$ -$

Soft Costs

Percentage of Hard Costs 23,573,569$ 23,573,569$ -$ 23,573,569$ -$ -$

Total Soft Costs 23,573,569$ 23,573,569$ -$ 23,573,569$ -$ -$

Permanent Financing

Points & Fees (Origination) 638,451$ -$ -$ -$ -$ 638,451$

Transfer/Recording Fees 191,585$ -$ -$ -$ -$ 191,585$

Title Insurance, Recording, Management 150,000$ -$ -$ -$ -$ 150,000$

Total Permanent Financing 980,036$ -$ -$ -$ -$ 980,036$

Reserves

Lease-up Reserves 500,000$ -$ 500,000$ -$ -$ -$

Operating Reserves 725,000$ -$ 725,000$

Replacement Reserve 740,000$ -$ 740,000$

Total Reserves 1,965,000$ -$ 1,965,000$ -$ -$ -$

Development Fees

Development General & Administration 3,928,928$ 3,928,928$ -$ 3,928,928$ -$ -$

Development Fee 3,928,928$ 3,928,928$ -$ 3,928,928$ -$ -$

Total Development Fees 7,857,856$ 7,857,856$ -$ 7,857,856$ -$ -$

TDC Basis NB Expense Res. Depr. 7-Yr Depr. Amortize

Total Development Cost 196,446,408$ 185,474,391$ 20,295,068$ 170,511,164$ -$ 5,640,177$


V.12 – Phase II Income & Expense Statement

INCOME & EXPENSE STATEMENT Lease Up Year Lease Up Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Period Beginning Date Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 Jan-29 Jan-30 Jan-31

Period Ending Date Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Dec-29 Dec-30 Dec-31

INCOME:

Potential Hotel Income 11,709,419$ 11,709,419$ 12,060,701$ 12,422,522$ 12,795,198$ 13,179,054$ 13,574,425$ 13,981,658$ 14,401,108$ 14,833,141$ 15,278,135$ 15,736,479$

Potential Office Income 11,452,536$ 11,452,536$ 11,796,112$ 12,149,995$ 12,514,495$ 12,889,930$ 13,276,628$ 13,674,927$ 14,085,175$ 14,507,730$ 14,942,962$ 15,391,251$

Potential Retail Income 8,277,131$ 8,277,131$ 8,525,445$ 8,781,209$ 9,044,645$ 9,315,984$ 9,595,464$ 9,883,328$ 10,179,827$ 10,485,222$ 10,799,779$ 11,123,772$

Potential Parking Income 1,178,370$ 1,178,370$ 1,213,721$ 1,250,133$ 1,287,637$ 1,326,266$ 1,366,054$ 1,407,036$ 1,449,247$ 1,492,724$ 1,537,506$ 1,583,631$

TOTAL POTENTIAL RENTAL INCOME: 32,617,456$ 32,617,456$ 33,595,980$ 34,603,859$ 35,641,975$ 36,711,234$ 37,812,571$ 38,946,948$ 40,115,357$ 41,318,818$ 42,558,382$ 43,835,134$

Vacancy & Credit Loss 10,635,408$ 3,227,523$ 3,324,349$ 3,424,080$ 3,526,802$ 3,632,606$ 3,741,584$ 3,853,832$ 3,969,447$ 4,088,530$ 4,211,186$ 4,337,521$

EFFECTIVE RENTAL INCOME: 21,982,048$ 29,389,933$ 30,271,631$ 31,179,780$ 32,115,173$ 33,078,628$ 34,070,987$ 35,093,117$ 36,145,910$ 37,230,288$ 38,347,196$ 39,497,612$

Other Income -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

GROSS OPERATING INCOME: 21,982,048$ 29,389,933$ 30,271,631$ 31,179,780$ 32,115,173$ 33,078,628$ 34,070,987$ 35,093,117$ 36,145,910$ 37,230,288$ 38,347,196$ 39,497,612$

EXPENSES:

Tenant Improvement Allowance 3,297,307$ 4,408,490$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Free Rent Impact 2,198,205$ 2,938,993$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Other Concessions 439,641$ 587,799$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Operating 10,947,023$ 10,947,023$ 10,947,023$ 11,302,801$ 11,670,142$ 12,049,422$ 12,441,028$ 12,845,361$ 13,262,836$ 13,693,878$ 14,138,929$ 14,598,444$

Taxes 2,121,621$ 2,121,621$ 2,190,574$ 2,261,768$ 2,335,275$ 2,411,171$ 2,489,535$ 2,570,444$ 2,653,984$ 2,740,238$ 2,829,296$ 2,921,248$

TOTAL OPERATING EXPENSES: 15,706,490$ 16,595,436$ 13,137,597$ 13,564,569$ 14,005,417$ 14,460,593$ 14,930,563$ 15,415,806$ 15,916,820$ 16,434,116$ 16,968,225$ 17,519,692$

NET OPERATING INCOME (NOI): 6,275,558$ 12,794,497$ 17,134,034$ 17,615,211$ 18,109,756$ 18,618,035$ 19,140,425$ 19,677,311$ 20,229,091$ 20,796,171$ 21,378,971$ 21,977,920$


V.13 – Mortgage & Depreciation






Ending Balance 125,660,509$ 123,489,533$ 121,167,395$ 118,683,572$ 116,026,805$ 113,185,054$ 110,145,437$ 106,894,177$ 103,416,539$ 99,696,761$ 95,717,982$ 91,462,168$

Principal Reduction 2,029,656$ 2,170,977$ 2,322,137$ 2,483,823$ 2,656,767$ 2,841,752$ 3,039,617$ 3,251,259$ 3,477,638$ 3,719,779$ 3,978,779$ 4,255,813$

Interest Expense 8,557,057$ 8,415,736$ 8,264,575$ 8,102,890$ 7,929,946$ 7,744,961$ 7,547,096$ 7,335,453$ 7,109,075$ 6,866,934$ 6,607,934$ 6,330,900$



Commercial Cost Recovery (Depreciation) Calculation 39 Years Straight-Line





Ending Balance 166,139,082$ 161,767,001$ 157,394,920$ 153,022,839$ 148,650,758$ 144,278,677$ 139,906,596$ 135,534,515$ 131,162,434$ 126,790,352$ 122,418,271$ 118,046,190$



Recapture -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$



Amortization



Ending Balance 5,414,570$ 5,188,963$ 4,963,356$ 4,737,749$ 4,512,141$ 4,286,534$ 4,060,927$ 3,835,320$ 3,609,713$ 3,384,106$ 3,158,499$ 2,932,892$


V.14 – Phase II Sales Schedule

Sales Schedule Lease Up Year Lease Up Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10





Sales Price (NOI/CAP) 138,749,830$ 167,189,545$ 307,888,471$ 316,568,505$ 325,490,850$ 334,662,187$ 344,089,379$ 353,779,475$ 363,739,715$ 373,977,535$ 384,500,572$ 395,316,671$

+ Reserve Fund -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- Less Commission 6.00% 8,324,990$ 10,031,373$ 18,473,308$ 18,994,110$ 19,529,451$ 20,079,731$ 20,645,363$ 21,226,769$ 21,824,383$ 22,438,652$ 23,070,034$ 23,719,000$

= Adjusted Sales Price 130,424,840$ 157,158,173$ 289,415,163$ 297,574,395$ 305,961,399$ 314,582,456$ 323,444,016$ 332,552,707$ 341,915,332$ 351,538,883$ 361,430,538$ 371,597,671$


= Total Sale Proceeds Before Tax 4,764,331$ 33,668,640$ 168,247,767$ 178,890,823$ 189,934,593$ 201,397,402$ 213,298,580$ 225,658,529$ 238,498,793$ 251,842,122$ 265,712,556$ 280,135,503$

Sales Proceeds Before Tax 4,764,331$ 33,668,640$ 168,247,767$ 178,890,823$ 189,934,593$ 201,397,402$ 213,298,580$ 225,658,529$ 238,498,793$ 251,842,122$ 265,712,556$ 280,135,503$

- Tax On Capital Gains (14,062,998)$ (5,431,246)$ 32,483,322$ 35,960,761$ 39,501,407$ 43,107,003$ 46,779,339$ 50,520,253$ 54,331,634$ 58,215,422$ 62,173,608$ 66,208,240$

- Tax On Ordinary Income (2,268,705)$ (2,174,175)$ (2,079,646)$ (1,985,117)$ (1,890,587)$ (1,796,058)$ (1,701,529)$ (1,606,999)$ (1,512,470)$ (1,417,940)$ (1,323,411)$ (1,228,882)$

= Sales Proceeds After Tax 21,096,033$ 41,274,061$ 137,844,092$ 144,915,178$ 152,323,773$ 160,086,457$ 168,220,770$ 176,745,276$ 185,679,629$ 195,044,641$ 204,862,359$ 215,156,144$

Calculations



- Cost Recovery 4,372,081$ 8,744,162$ 13,116,243$ 17,488,324$ 21,860,406$ 26,232,487$ 30,604,568$ 34,976,649$ 39,348,730$ 43,720,811$ 48,092,892$ 52,464,973$

= Adjusted Basis 181,102,310$ 176,730,229$ 172,358,148$ 167,986,067$ 163,613,985$ 159,241,904$ 154,869,823$ 150,497,742$ 146,125,661$ 141,753,580$ 137,381,499$ 133,009,418$

Sales Price 138,749,830$ 167,189,545$ 307,888,471$ 316,568,505$ 325,490,850$ 334,662,187$ 344,089,379$ 353,779,475$ 363,739,715$ 373,977,535$ 384,500,572$ 395,316,671$

- Cost of Sale 8,324,990$ 10,031,373$ 18,473,308$ 18,994,110$ 19,529,451$ 20,079,731$ 20,645,363$ 21,226,769$ 21,824,383$ 22,438,652$ 23,070,034$ 23,719,000$

- Adjusted Basis 181,102,310$ 176,730,229$ 172,358,148$ 167,986,067$ 163,613,985$ 159,241,904$ 154,869,823$ 150,497,742$ 146,125,661$ 141,753,580$ 137,381,499$ 133,009,418$

= Total Gain (50,677,470)$ (19,572,056)$ 117,057,015$ 129,588,328$ 142,347,413$ 155,340,551$ 168,574,193$ 182,054,964$ 195,789,671$ 209,785,303$ 224,049,039$ 238,588,253$


(Federal & State) 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75%

Tax on Capital Gain (Savings) (14,062,998)$ (5,431,246)$ 32,483,322$ 35,960,761$ 39,501,407$ 43,107,003$ 46,779,339$ 50,520,253$ 54,331,634$ 58,215,422$ 62,173,608$ 66,208,240$


Unamortized Expenditures (5,414,570)$ (5,188,963)$ (4,963,356)$ (4,737,749)$ (4,512,141)$ (4,286,534)$ (4,060,927)$ (3,835,320)$ (3,609,713)$ (3,384,106)$ (3,158,499)$ (2,932,892)$

Ordinary Income On Sale (Savings) (5,414,570)$ (5,188,963)$ (4,963,356)$ (4,737,749)$ (4,512,141)$ (4,286,534)$ (4,060,927)$ (3,835,320)$ (3,609,713)$ (3,384,106)$ (3,158,499)$ (2,932,892)$


(Federal & State) 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90%

Tax on Ordinary Income (2,268,705)$ (2,174,175)$ (2,079,646)$ (1,985,117)$ (1,890,587)$ (1,796,058)$ (1,701,529)$ (1,606,999)$ (1,512,470)$ (1,417,940)$ (1,323,411)$ (1,228,882)$


V.15 – Phase II Financial Statement




INCOME & EXPENSE STATEMENT

+ Potential Rental Income 32,617,456$ 32,617,456$ 33,595,980$ 34,603,859$ 35,641,975$ 36,711,234$ 37,812,571$ 38,946,948$ 40,115,357$ 41,318,818$ 42,558,382$ 43,835,134$

- Vacancy/Credit Loss 5.25% 3,297,307$ 1,712,416$ 1,763,789$ 1,816,703$ 1,871,204$ 1,927,340$ 1,985,160$ 2,044,715$ 2,106,056$ 2,169,238$ 2,234,315$ 2,301,345$

= Effective Rental Income 29,320,149$ 30,905,040$ 31,832,191$ 32,787,157$ 33,770,771$ 34,783,894$ 35,827,411$ 36,902,234$ 38,009,301$ 39,149,580$ 40,324,067$ 41,533,789$

+ Miscellaneous Income -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= Gross Operating Income 29,320,149$ 30,905,040$ 31,832,191$ 32,787,157$ 33,770,771$ 34,783,894$ 35,827,411$ 36,902,234$ 38,009,301$ 39,149,580$ 40,324,067$ 41,533,789$

Operating Expense

- Operating Expenses 20,995,159$ 20,873,667$ 13,358,883$ 13,793,046$ 14,241,320$ 14,704,163$ 15,182,049$ 15,675,465$ 16,184,918$ 16,710,928$ 17,254,033$ 17,814,789$

- Other -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= Total Expenses 20,995,159$ 20,873,667$ 13,358,883$ 13,793,046$ 14,241,320$ 14,704,163$ 15,182,049$ 15,675,465$ 16,184,918$ 16,710,928$ 17,254,033$ 17,814,789$

Net Operating Income 8,324,990$ 10,031,373$ 18,473,308$ 18,994,110$ 19,529,451$ 20,079,731$ 20,645,363$ 21,226,769$ 21,824,383$ 22,438,652$ 23,070,034$ 23,719,000$

ANNUAL TAXABLE INCOME ANALYSIS

+ Net Operating Income 8,324,990$ 10,031,373$ 18,473,308$ 18,994,110$ 19,529,451$ 20,079,731$ 20,645,363$ 21,226,769$ 21,824,383$ 22,438,652$ 23,070,034$ 23,719,000$

- Interest Expense 8,557,057$ 8,415,736$ 8,264,575$ 8,102,890$ 7,929,946$ 7,744,961$ 7,547,096$ 7,335,453$ 7,109,075$ 6,866,934$ 6,607,934$ 6,330,900$

Cost Recovery

- Cost Recovery 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$

- Cost Recovery Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= - Total Annual Cost Recovery 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$ 4,372,081$

- Non-Operating Expenses 225,607$ 225,607$ 225,607$ 225,607$ 225,607$ 225,607$ 225,607$ 225,607$ 225,607$ 225,607$ 225,607$ 225,607$

= Taxable Income (Loss) (4,829,755)$ (2,982,051)$ 5,611,045$ 6,293,532$ 7,001,817$ 7,737,082$ 8,500,579$ 9,293,627$ 10,117,620$ 10,974,030$ 11,864,412$ 12,790,413$



- Annual Debt Service 10,586,713$ 10,586,713$ 10,586,713$ 10,586,713$ 10,586,713$ 10,586,713$ 10,586,713$ 10,586,713$ 10,586,713$ 10,586,713$ 10,586,713$ 10,586,713$

- Capital Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- Reserves -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

+ Reserves to Capital Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= Cash Flow Before Tax (2,261,723)$ (555,340)$ 7,886,595$ 8,407,397$ 8,942,738$ 9,493,018$ 10,058,650$ 10,640,056$ 11,237,670$ 11,851,939$ 12,483,321$ 13,132,287$

Taxable Income (Loss) (Ordinary) (4,829,755)$ (2,982,051)$ 5,611,045$ 6,293,532$ 7,001,817$ 7,737,082$ 8,500,579$ 9,293,627$ 10,117,620$ 10,974,030$ 11,864,412$ 12,790,413$

x (federal & State) 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00%

= Tax Liability (1,980,200)$ (1,222,641)$ 2,300,528$ 2,580,348$ 2,870,745$ 3,172,204$ 3,485,237$ 3,810,387$ 4,148,224$ 4,499,352$ 4,864,409$ 5,244,069$

Cash Flow Before Tax (2,261,723)$ (555,340)$ 7,886,595$ 8,407,397$ 8,942,738$ 9,493,018$ 10,058,650$ 10,640,056$ 11,237,670$ 11,851,939$ 12,483,321$ 13,132,287$

- Less Tax Liability (1,980,200)$ (1,222,641)$ 2,300,528$ 2,580,348$ 2,870,745$ 3,172,204$ 3,485,237$ 3,810,387$ 4,148,224$ 4,499,352$ 4,864,409$ 5,244,069$

Cash Flow After Tax (281,523)$ 667,301$ 5,586,067$ 5,827,049$ 6,071,993$ 6,320,815$ 6,573,413$ 6,829,669$ 7,089,446$ 7,352,587$ 7,618,912$ 7,888,218$

Debt Service Coverage Ratio: 0.95 1.74 1.79 1.84 1.90 1.95 2.01 2.06 2.12 2.18 2.24


V.15 – Phase II Before-Tax, After-Tax and Unleveraged IRR and NPV


LLC (and/or LP) INVESTMENT RESULTS Total 1 2 3




2019 (68,756,243)$ -$ (68,756,243)$ 2019 (68,756,243)$ (68,756,243)$

2020 -$ (2,261,723)$ (2,261,723)$ 2020 -$ (2,261,723)$ (2,261,723)$

2021 -$ (555,340)$ (555,340)$ 2021 -$ (555,340)$ (555,340)$

2022 -$ 7,886,595$ 7,886,595$ 2022 -$ 7,886,595$ 7,886,595$

2023 -$ 8,407,397$ 8,407,397$ 2023 -$ 8,407,397$ 8,407,397$

2024 -$ 8,942,738$ 8,942,738$ 2024 -$ 8,942,738$ 8,942,738$

2025 -$ 9,493,018$ 9,493,018$ 2025 -$ 9,493,018$ 9,493,018$

2026 -$ 10,058,650$ 213,298,580$ 223,357,230$ 2026 -$ 10,058,650$ 10,058,650$

Total (68,756,243)$ 41,971,336$ 213,298,580$ 186,513,673$ 2027 -$ 10,640,056$ 10,640,056$

2028 -$ 12,483,321$ 12,483,321$


Total (68,756,243)$ 78,227,001$ 280,135,503$ 289,606,260$

Internal Rate of Return Before Tax: 21.69% Internal Rate of Return Before Tax: 19.89%

Before Tax Net Present Value: 27,276,623$ Before Tax Net Present Value: 26,695,117$








2019 (68,756,243)$ -$ (68,756,243)$ 2019 (68,756,243)$ -$ (68,756,243)$

2020 -$ (281,523)$ (281,523)$ 2020 -$ (281,523)$ (281,523)$

2021 -$ 667,301$ 667,301$ 2021 -$ 667,301$ 667,301$

2022 -$ 5,586,067$ 5,586,067$ 2022 -$ 5,586,067$ 5,586,067$

2023 -$ 5,827,049$ 5,827,049$ 2023 -$ 5,827,049$ 5,827,049$

2024 -$ 6,071,993$ 6,071,993$ 2024 -$ 6,071,993$ 6,071,993$

2025 -$ 6,320,815$ 6,320,815$ 2025 -$ 6,320,815$ 6,320,815$

2026 -$ 6,573,413$ 168,220,770$ 174,794,182$ 2026 -$ 6,573,413$ 6,573,413$

Total (68,756,243)$ 30,765,115$ 168,220,770$ 130,229,641$ 2027 -$ 6,829,669$ 6,829,669$

2028 -$ 7,618,912$ 7,618,912$


Total (68,756,243)$ 53,101,914$ 215,156,144$ 199,501,815$

Internal Rate of Return After Tax: 17.40% Internal Rate of Return After Tax: 16.14%

After Tax Net Present Value: 8,670,624$ After Tax Net Present Value: 5,445,527$








2019 (196,446,408)$ -$ (196,446,408)$ 2019 (196,446,408)$ (196,446,408)$

2020 -$ 8,324,990$ 8,324,990$ 2020 -$ 8,324,990$ 8,324,990$

2021 -$ 10,031,373$ 10,031,373$ 2021 -$ 10,031,373$ 10,031,373$

2022 -$ 18,473,308$ 18,473,308$ 2022 -$ 18,473,308$ 18,473,308$

2023 -$ 18,994,110$ 18,994,110$ 2023 -$ 18,994,110$ 18,994,110$

2024 -$ 19,529,451$ 19,529,451$ 2024 -$ 19,529,451$ 19,529,451$

2025 -$ 20,079,731$ 20,079,731$ 2025 -$ 20,079,731$ 20,079,731$

2026 -$ 20,645,363$ 323,444,016$ 344,089,379$ 2026 -$ 20,645,363$ 20,645,363$

Total (196,446,408)$ 116,078,326$ 323,444,016$ 243,075,934$ 2027 -$ 21,226,769$ 21,226,769$

2028 -$ 23,070,034$ 23,070,034$


Total (196,446,408)$ 184,094,129$ 371,597,671$ 359,245,392$

Unleveraged Internal Rate of Return: 13.91% Unleveraged Internal Rate of Return: 13.32%

Unleveraged Net Present Value: (9,451,418)$ Unleveraged Net Present Value: (18,478,669)$




V.16.a – Block D Lease-Up Schedule (First Year)



Studio 8 6 4 2 1 1 2 0 0 1 0 0 25

S -WFH 7 6 6 5 3 0 0 0 0 0 0 0 27

1-Bdrm 10 9 9 8 8 6 6 5 3 5 5 5 79

1 -WFH 6 3 0 0 0 0 0 0 0 0 0 0 9

2-Bdrm 8 6 6 5 2 3 4 2 2 1 0 1 40

2 -WFH 5 4 0 0 0 0 0 0 0 0 0 0 9

Retail 1 0 0 0 0 0 0 0 0 0 0 0 1

Parking 0 0 0 0 0 0 0 0 0 0 0 0 0


RENTAL INCOME:

Studio 16,000$ 12,000$ 8,000$ 4,000$ 2,000$ 2,000$ 4,000$ -$ -$ 2,000$ -$ -$ 50,000$

S -WFH 13,192$ 11,307$ 11,307$ 9,423$ 5,654$ -$ -$ -$ -$ -$ -$ -$ 50,884$

1-Bdrm 27,000$ 24,300$ 24,300$ 21,600$ 21,600$ 16,200$ 16,200$ 13,500$ 8,100$ 13,500$ 13,500$ 13,500$ 213,300$

1 -WFH 13,800$ 6,900$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 20,700$

2-Bdrm 28,000$ 21,000$ 21,000$ 17,500$ 7,000$ 10,500$ 14,000$ 7,000$ 7,000$ 3,500$ -$ 3,500$ 140,000$

2 -WFH 13,387$ 10,710$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 24,097$

Retail 335,110$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 335,110$

Parking -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

TOTAL RENTAL INCOME: 444,910$ 531,127$ 595,735$ 648,258$ 684,511$ 713,211$ 747,411$ 767,911$ 783,011$ 802,011$ 815,511$ 832,511$ 8,366,122$


Potential Apartment Income 602,901$ 602,901$ 602,901$ 602,901$ 602,901$ 602,901$ 602,901$ 602,901$ 602,901$ 602,901$ 602,901$ 602,901$ 7,234,811$



Total Potential Income 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 11,685,503$

Vacancy & Credit Loss 528,882$ 442,665$ 378,057$ 325,534$ 289,280$ 260,580$ 226,380$ 205,880$ 190,780$ 171,780$ 158,280$ 141,280$ 3,319,381$


Tenant Improvement Allowance -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Free Rent Impact 22,246$ 26,556$ 29,787$ 32,413$ 34,226$ 35,661$ 37,371$ 38,396$ 39,151$ 40,101$ 40,776$ 41,626$ 418,306$


Real Estate Taxes 61,131$ 61,131$ 61,131$ 61,131$ 61,131$ 61,131$ 61,131$ 61,131$ 61,131$ 61,131$ 61,131$ 61,131$ 733,577$




V.16.b – Block D Lease-Up Schedule (Second Year)



Studio 1 1 0 1 1 0 1 0 0 0 0 0 30

S -WFH 0 0 0 0 0 0 0 0 0 0 0 0 27

1-Bdrm 4 3 3 4 3 2 2 2 1 1 0 0 104

1 -WFH 0 0 0 0 0 0 0 0 0 0 0 0 9

2-Bdrm 2 2 1 0 1 0 1 1 0 0 0 0 48

2 -WFH 0 0 0 0 0 0 0 0 0 0 0 0 9

Retail 0 0 0 0 0 0 0 0 0 0 0 0 0

Parking 0 0 0 0 0 0 0 0 0 0 0 2 2


RENTAL INCOME:

Studio 2,000$ 2,000$ -$ 2,000$ 2,000$ -$ 2,000$ -$ -$ -$ -$ -$ 10,000$

S -WFH -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

1-Bdrm 10,800$ 8,100$ 8,100$ 10,800$ 8,100$ 5,400$ 5,400$ 5,400$ 2,700$ 2,700$ -$ -$ 67,500$

1 -WFH -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

2-Bdrm 7,000$ 7,000$ 3,500$ -$ 3,500$ -$ 3,500$ 3,500$ -$ -$ -$ -$ 28,000$

2 -WFH -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Retail -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Parking -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 35,781$ 35,781$

TOTAL RENTAL INCOME: 852,311$ 869,411$ 881,011$ 893,811$ 907,411$ 912,811$ 923,711$ 932,611$ 935,311$ 938,011$ 938,011$ 973,792$ 10,958,219$





Total Potential Income 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 973,792$ 11,685,503$

Vacancy & Credit Loss 121,480$ 104,380$ 92,780$ 79,980$ 66,380$ 60,980$ 50,080$ 41,180$ 38,480$ 35,780$ 35,780$ (0)$ 727,285$



Free Rent Impact 42,616$ 43,471$ 44,051$ 44,691$ 45,371$ 45,641$ 46,186$ 46,631$ 46,766$ 46,901$ 46,901$ 48,690$ 547,911$






V.17.a – Block E Lease-Up Schedule (first Year)



Studio 8 7 6 6 5 4 2 2 3 1 0 1 45

S -WFH 10 5 5 4 2 2 2 2 2 2 0 0 36

1-Bdrm 25 15 12 10 10 10 10 8 8 8 7 7 130

1 -WFH 5 5 3 3 2 0 0 0 0 0 0 0 18

2-Bdrm 12 10 8 8 6 4 3 4 2 2 1 2 62

2 -WFH 5 5 4 2 2 0 0 0 0 0 0 0 18

Retail 1 0 0 0 0 0 0 0 0 0 0 0 1

Parking 0 0 0 0 0 0 0 0 0 0 0 0 0


RENTAL INCOME:

Studio 16,000$ 14,000$ 12,000$ 12,000$ 10,000$ 8,000$ 4,000$ 4,000$ 6,000$ 2,000$ -$ 2,000$ 90,000$

S -WFH 15,771$ 7,885$ 7,885$ 6,308$ 3,154$ 3,154$ 3,154$ 3,154$ 3,154$ 3,154$ -$ -$ 56,774$

1-Bdrm 67,500$ 40,500$ 32,400$ 27,000$ 27,000$ 27,000$ 27,000$ 21,600$ 21,600$ 21,600$ 18,900$ 18,900$ 351,000$

1 -WFH 11,500$ 11,500$ 6,900$ 6,900$ 4,600$ -$ -$ -$ -$ -$ -$ -$ 41,400$

2-Bdrm 42,000$ 35,000$ 28,000$ 28,000$ 21,000$ 14,000$ 10,500$ 14,000$ 7,000$ 7,000$ 3,500$ 7,000$ 217,000$

2 -WFH 13,387$ 13,387$ 10,710$ 5,355$ 5,355$ -$ -$ -$ -$ -$ -$ -$ 48,193$

Retail 409,902$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 409,902$

Parking -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

TOTAL RENTAL INCOME: 573,857$ 696,129$ 794,024$ 879,587$ 950,696$ 1,002,850$ 1,047,504$ 1,090,258$ 1,128,012$ 1,161,766$ 1,184,166$ 1,212,066$ 11,720,916$






Vacancy & Credit Loss 821,293$ 699,020$ 601,126$ 515,562$ 444,454$ 392,299$ 347,645$ 304,891$ 267,137$ 233,383$ 210,983$ 183,083$ 5,020,877$

EFFECTIVE GROSS REVENUE: 573,857$ 696,129$ 794,024$ 879,587$ 950,696$ 1,002,850$ 1,047,504$ 1,090,258$ 1,128,012$ 1,161,766$ 1,184,166$ 1,212,066$ 11,720,916$


Free Rent Impact 28,693$ 34,806$ 39,701$ 43,979$ 47,535$ 50,142$ 52,375$ 54,513$ 56,401$ 58,088$ 59,208$ 60,603$ 586,046$




NET OPERATING INCOME (NOI): 450,649$ 564,362$ 655,404$ 734,978$ 801,109$ 849,612$ 891,141$ 930,902$ 966,013$ 997,405$ 1,018,237$ 1,044,184$ 4,701,610$


V.17.b – Block E Lease-Up Schedule (Second Year)



Studio 2 2 1 1 0 2 1 0 1 1 0 0 56

S -WFH 0 0 0 0 0 0 0 0 0 0 0 0 36

1-Bdrm 6 6 6 5 5 3 3 2 0 0 0 0 166

1 -WFH 0 0 0 0 0 0 0 0 0 0 0 0 18

2-Bdrm 2 2 1 1 0 2 2 1 0 0 1 0 74

2 -WFH 0 0 0 0 0 0 0 0 0 0 0 0 18

Retail 0 0 0 0 0 0 0 0 0 0 0 0 0

Parking 0 0 0 0 0 0 0 0 0 0 0 1 1


RENTAL INCOME:

Studio 4,000$ 4,000$ 2,000$ 2,000$ -$ 4,000$ 2,000$ -$ 2,000$ 2,000$ -$ -$ 22,000$

S -WFH -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

1-Bdrm 16,200$ 16,200$ 16,200$ 13,500$ 13,500$ 8,100$ 8,100$ 5,400$ -$ -$ -$ -$ 97,200$

1 -WFH -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

2-Bdrm 7,000$ 7,000$ 3,500$ 3,500$ -$ 7,000$ 7,000$ 3,500$ -$ -$ 3,500$ -$ 42,000$

2 -WFH -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Retail -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Parking -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 21,883$ 21,883$

TOTAL RENTAL INCOME: 1,239,266$ 1,266,466$ 1,288,166$ 1,307,166$ 1,320,666$ 1,339,766$ 1,356,866$ 1,365,766$ 1,367,766$ 1,369,766$ 1,373,266$ 1,395,150$ 15,990,080$






Vacancy & Credit Loss 155,883$ 128,683$ 106,983$ 87,983$ 74,483$ 55,383$ 38,283$ 29,383$ 27,383$ 25,383$ 21,883$ (0)$ 751,713$



Free Rent Impact 61,963$ 63,323$ 64,408$ 65,358$ 66,033$ 66,988$ 67,843$ 68,288$ 68,388$ 68,488$ 68,663$ 69,757$ 799,504$




NET OPERATING INCOME (NOI): 1,069,480$ 832,934$ 854,634$ 873,634$ 887,134$ 906,234$ 923,334$ 932,234$ 934,234$ 936,234$ 939,734$ 961,618$ 8,671,932$


V.18.a – Block F Sales Schedule (First Year)

2022 FIRST YEAR LEASE/SALES SCHEDULECONDOS SOLD PER MONTH January February March April May June July August September October November December Total

Studio 2 2 1 0 1 1 1 2 0 1 0 1 12

S -WFH 2 2 1 0 0 0 1 0 1 0 1 1 9

1-Bdrm 5 4 3 2 3 2 2 1 2 2 1 1 28

1 -WFH 2 1 1 0 0 1 1 0 0 0 0 0 6

2-Bdrm 3 2 1 2 2 1 2 0 1 2 2 1 19

2 -WFH 1 0 0 0 0 0 1 0 0 1 0 0 3

Parking 2 2 2 2 2 2 2 2 2 2 2 4 26

Total Units Sold 17 13 9 6 8 7 10 5 6 8 6 8 103

Studio 900,000$ 900,000$ 450,000$ -$ 450,000$ 450,000$ 450,000$ 900,000$ -$ 450,000$ -$ 450,000$ 5,400,000$

S -WFH 811,800$ 811,800$ 405,900$ -$ -$ -$ 405,900$ -$ 405,900$ -$ 405,900$ 405,900$ 3,653,100$

1-Bdrm 2,750,000$ 2,200,000$ 1,650,000$ 1,100,000$ 1,650,000$ 1,100,000$ 1,100,000$ 550,000$ 1,100,000$ 1,100,000$ 550,000$ 550,000$ 15,400,000$

1 -WFH 905,667$ 452,833$ 452,833$ -$ -$ 452,833$ 452,833$ -$ -$ -$ -$ -$ 2,717,000$

2-Bdrm 2,055,000$ 1,370,000$ 685,000$ 1,370,000$ 1,370,000$ 685,000$ 1,370,000$ -$ 685,000$ 1,370,000$ 1,370,000$ 685,000$ 13,015,000$

2 -WFH 568,550$ -$ -$ -$ -$ -$ 568,550$ -$ -$ 568,550$ -$ -$ 1,705,650$

Parking 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 80,000$ 520,000$

TOTAL SALES 8,031,017$ 5,774,633$ 3,683,733$ 2,510,000$ 3,510,000$ 2,727,833$ 4,387,283$ 1,490,000$ 2,230,900$ 3,528,550$ 2,365,900$ 2,170,900$ 42,410,750$

2023 SECOND YEAR LEASE/SALES SCHEDULECONDOS SOLD PER MONTH January February March April May June July August September October November December Total

Studio 1 0 2 1 1 0 0 1 0 0 0 0 18

S -WFH 1 0 0 0 0 0 0 0 0 0 0 0 10

1-Bdrm 2 1 2 2 1 1 0 1 1 0 1 0 40

1 -WFH 1 0 0 0 1 0 1 0 0 0 0 0 9

2-Bdrm 0 2 1 1 1 0 0 0 1 0 0 0 25

2 -WFH 0 0 0 0 0 0 0 0 0 0 0 0 3

Parking 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Units Sold 5 3 5 4 4 1 1 2 2 0 1 0 208

Studio 450,000$ -$ 900,000$ 450,000$ 450,000$ -$ -$ 450,000$ -$ -$ -$ -$ 2,700,000$

S -WFH 405,900$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 405,900$

1-Bdrm 1,100,000$ 550,000$ 1,100,000$ 1,100,000$ 550,000$ 550,000$ -$ 550,000$ 550,000$ -$ 550,000$ -$ 6,600,000$

1 -WFH 452,833$ -$ -$ -$ 452,833$ -$ 452,833$ -$ -$ -$ -$ -$ 1,358,500$

2-Bdrm -$ 1,370,000$ 685,000$ 685,000$ 685,000$ -$ -$ -$ 685,000$ -$ -$ -$ 4,110,000$

2 -WFH -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Parking -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

TOTAL SALES 2,408,733$ 206,032$ 2,762,067$ 4,310,613$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 227,744$ 15,174,400$


V.19 – Block F Lease-Up Schedule

2022 RETAIL INCOME:

RENTAL INCOME: RETAILPOTENTIAL RENTAL INCOME:


Potential Parking Income -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Total Rental Potential Income 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 2,472,386$

Vacancy & Credit Loss 10,302$ 10,302$ 10,302$ 10,302$ 10,302$ 10,302$ 10,302$ 10,302$ 10,302$ 10,302$ 10,302$ 10,302$ 123,619$



Free Rent Impact -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Operating 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 956,523$

Other Concessions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$



NET OPERATING INCOME (NOI): 73,654$ 73,654$ 73,654$ 73,654$ 73,654$ 73,654$ 73,654$ 73,654$ 73,654$ 73,654$ 73,654$ 73,654$ (581,079)$

2023 RETAIL INCOME:POTENTIAL RENTAL INCOME:



Total Rental Potential Income 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 206,032$ 2,472,386$

Vacancy & Credit Loss -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$



Free Rent Impact -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Operating 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 79,710$ 956,523$

Other Concessions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$



NET OPERATING INCOME (NOI): 83,955$ (227,500)$ (227,500)$ (227,500)$ (227,500)$ (227,500)$ (227,500)$ (227,500)$ (227,500)$ (227,500)$ (227,500)$ (227,500)$ (4,194,920)$


V.20 – Phase III Construction Draw Schedule

Phase III




Loan Origination: 0.50% 1,026,744$

Rate: 10%

Retainage: 10%


Jan-20 7,778,364$ (777,836)$ 7,000,527$ 7,000,527$ 58,338$

Feb-20 7,778,364$ (777,836)$ 7,000,527$ 14,001,055$ 116,675$

Mar-20 7,778,364$ (777,836)$ 7,000,527$ 21,001,582$ 175,013$

Apr-20 7,778,364$ (777,836)$ 7,000,527$ 28,002,109$ 233,351$

May-20 7,778,364$ (777,836)$ 7,000,527$ 35,002,636$ 291,689$

Jun-20 7,778,364$ (777,836)$ 7,000,527$ 42,003,164$ 350,026$

Jul-20 7,778,364$ (777,836)$ 7,000,527$ 49,003,691$ 408,364$

Aug-20 7,778,364$ (777,836)$ 7,000,527$ 56,004,218$ 466,702$

Sep-20 7,778,364$ (777,836)$ 7,000,527$ 63,004,745$ 525,040$

Oct-20 7,778,364$ (777,836)$ 7,000,527$ 70,005,273$ 583,377$

Nov-20 7,778,364$ (777,836)$ 7,000,527$ 77,005,800$ 641,715$

Dec-20 7,778,364$ (777,836)$ 7,000,527$ 84,006,327$ 700,053$

Jan-21 7,778,364$ (777,836)$ 7,000,527$ 91,006,854$ 758,390$

Feb-21 7,778,364$ (777,836)$ 7,000,527$ 98,007,382$ 816,728$

Mar-21 7,778,364$ (777,836)$ 7,000,527$ 105,007,909$ 875,066$

Apr-21 7,778,364$ (777,836)$ 7,000,527$ 112,008,436$ 933,404$

May-21 7,778,364$ (777,836)$ 7,000,527$ 119,008,963$ 991,741$

Jun-21 7,778,364$ (777,836)$ 7,000,527$ 126,009,491$ 1,050,079$

Jul-21 7,778,364$ (777,836)$ 7,000,527$ 133,010,018$ 1,108,417$

Aug-21 7,778,364$ (777,836)$ 7,000,527$ 140,010,545$ 1,166,755$

Sep-21 7,778,364$ (777,836)$ 7,000,527$ 147,011,072$ 1,225,092$

Oct-21 7,778,364$ (777,836)$ 7,000,527$ 154,011,600$ 1,283,430$

Nov-21 7,778,364$ (777,836)$ 7,000,527$ 161,012,127$ 1,341,768$

Dec-21 26,446,436$ 8,556,200$ 44,336,673$ 205,348,799$ 1,011,187$

205,348,799$ 205,348,799$ 17,112,400$


V.21 – Phase III Basis & Depreciation

Uses (Non Basis) 39 Year 27.5 Year 7 - Year Amortize

TDC Basis Expense Depreciable Depreciable Depreciation (Expense)

Acquisition

Land Acquisition 19,541,086$ 19,541,086$ 19,541,086$ -$ -$ -$ -$

Demolition 10,995,303$ 10,995,303$ -$ -$ -$ -$ 10,995,303$

Total Acquisition 30,536,388$ 30,536,388$ 19,541,086$ -$ -$ -$ 10,995,303$

Construction

Retail 15,485,278$ 15,485,278$ -$ 15,485,278$ -$ -$ -$

Apartment 123,487,446$ 123,487,446$ -$ -$ 123,487,446$ -$ -$

Appliances 1,584,968$ 1,584,968$ -$ -$ -$ 1,584,968$ -$

Parking 24,535,360$ 24,535,360$ -$ 24,535,360$ -$ -$ -$

Contingency -$ -$ -$ -$ -$ -$ -$

Taxes 422,087$ 422,087$ -$ 422,087$ -$ -$ -$

Total Construction 165,515,140$ 165,515,140$ -$ 40,442,725$ 123,487,446$ 1,584,968$ -$


Points & Fees (Origination) 1,026,744$ 1,026,744$ -$ 1,026,744$ -$ -$ -$

Interest Expense 17,112,400$ 17,112,400$ -$ 17,112,400$ -$ -$ -$

Total Construction Financing 18,139,144$ 18,139,144$ -$ 18,139,144$ -$ -$ -$

Soft Costs

Percentage of Hard Costs 47,927,656$ 47,927,656$ -$ 47,927,656$ -$ -$ -$

Total Soft Costs 47,927,656$ 47,927,656$ -$ 47,927,656$ -$ -$ -$

Permanent Financing

Points & Fees (Origination) 1,038,433$ -$ -$ -$ -$ -$ 1,038,433$

Transfer/Recording Fees 311,580$ -$ -$ -$ -$ -$ 311,580$

Title Insurance, Recording, Management 250,000$ -$ -$ -$ -$ -$ 250,000$

Total Permanent Financing 1,600,012$ -$ -$ -$ -$ -$ 1,600,012$

Reserves

Lease-up Reserves 925,000$ -$ 925,000$ -$ -$ -$ -$

Operating Reserves 1,000,000$ -$ 1,000,000$ -$ -$ -$ -$

Replacement Reserve 1,260,000$ -$ 1,260,000$ -$ -$ -$ -$

Total Reserves 3,185,000$ -$ 3,185,000$ -$ -$ -$ -$

Development Fees

Development General & Administration 6,390,354$ 6,390,354$ -$ 6,390,354$ -$ -$ -$

Development Fee 6,390,354$ 6,390,354$ -$ 6,390,354$ -$ -$ -$

Total Development Fees 12,780,708$ 12,780,708$ -$ 12,780,708$ -$ -$ -$

TDC Basis NB Expense 39 Year 27.5 Year 7-Yr Depr. Amortize

Total Development Cost 279,684,049$ 274,899,036$ 22,726,086$ 119,290,234$ 123,487,446$ 1,584,968$ 12,595,315$


V.22 – Phase III Income & Expense Statement

INCOME & EXPENSE STATEMENT Lease Up Year Lease Up Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10



INCOME:

Condominium Sales 42,410,750$ 15,174,400$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Potential Apartment Income 18,795,178$ 18,795,178$ 19,359,033$ 19,939,804$ 20,537,998$ 21,154,138$ 21,788,762$ 22,442,425$ 23,115,698$ 23,809,169$ 24,523,444$ 25,259,147$

Potential Retail Income 18,054,075$ 18,054,075$ 18,595,697$ 19,153,568$ 19,728,175$ 20,320,020$ 20,929,621$ 21,557,509$ 22,204,235$ 22,870,362$ 23,556,473$ 24,263,167$

Potential Parking Income 429,370$ 429,370$ 442,251$ 455,519$ 469,185$ 483,260$ 497,758$ 512,691$ 528,071$ 543,914$ 560,231$ 577,038$

Potential Total Income 37,278,623$ 37,278,623$ 38,396,981$ 39,548,891$ 40,735,358$ 41,957,418$ 43,216,141$ 44,512,625$ 45,848,004$ 47,223,444$ 48,640,147$ 50,099,352$

Vacancy & Credit Loss 8,463,877$ 1,478,997$ 1,661,431$ 1,711,274$ 1,762,612$ 1,815,491$ 1,869,956$ 1,926,054$ 1,983,836$ 2,043,351$ 2,104,651$ 2,167,791$

EFFECTIVE RENTAL INCOME: 28,814,745$ 35,799,625$ 36,735,550$ 37,837,617$ 38,972,745$ 40,141,927$ 41,346,185$ 42,586,571$ 43,864,168$ 45,180,093$ 46,535,496$ 47,931,561$

Condominium Income 42,410,750$ 15,174,400$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

GROSS OPERATING INCOME: 71,225,495$ 50,974,025$ 36,735,550$ 37,837,617$ 38,972,745$ 40,141,927$ 41,346,185$ 42,586,571$ 43,864,168$ 45,180,093$ 46,535,496$ 47,931,561$

EXPENSE:

Lease Up Concessions 2,362,616$ 2,842,904$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Operating 11,121,757$ 11,121,757$ 11,483,214$ 11,856,419$ 12,241,752$ 12,639,609$ 13,050,397$ 13,474,535$ 13,912,457$ 14,364,612$ 14,831,462$ 15,313,484$

Taxes 186,536$ 186,536$ 192,599$ 198,858$ 205,321$ 211,994$ 218,884$ 225,998$ 233,342$ 240,926$ 248,756$ 256,841$

TOTAL OPERATING EXPENSES: 13,670,909$ 14,151,198$ 11,675,813$ 12,055,277$ 12,447,073$ 12,851,603$ 13,269,280$ 13,700,532$ 14,145,799$ 14,605,538$ 15,080,218$ 15,570,325$

NET OPERATING INCOME (NOI): 57,554,586$ 36,822,828$ 25,059,737$ 25,782,340$ 26,525,672$ 27,290,324$ 28,076,905$ 28,886,039$ 29,718,369$ 30,574,555$ 31,455,278$ 32,361,236$


V.23 – Phase III Mortgage & Depreciation





Beginning Balance 207,686,511$ 161,146,194$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Ending Balance 161,146,194$ 139,339,202$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Principal Reduction 46,540,316$ 21,806,992$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Interest Expense 10,805,114$ 8,302,088$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

2nd Mortgage Calucation

Beginning Balance -$ -$ 139,339,202$ 137,692,142$ 135,362,641$ 132,870,941$ 130,205,750$ 127,354,988$ 124,305,732$ 121,044,163$ 117,555,498$ 113,823,924$

Ending Balance -$ -$ 137,692,142$ 135,362,641$ 132,870,941$ 130,205,750$ 127,354,988$ 124,305,732$ 121,044,163$ 117,555,498$ 113,823,924$ 109,487,626$

Principal Reduction -$ -$ 1,647,061$ 2,329,501$ 2,491,699$ 2,665,191$ 2,850,763$ 3,049,256$ 3,261,569$ 3,488,665$ 3,731,574$ 4,336,298$

Interest Expense -$ -$ 9,365,659$ 9,223,026$ 9,060,828$ 8,887,336$ 8,701,764$ 8,503,272$ 8,290,958$ 8,063,862$ 7,820,953$ 7,561,132$



Commercial Cost Recovery (Depreciation) Calculation 39 Years Straight-Line





Ending Balance 116,231,510$ 113,172,786$ 110,114,062$ 107,055,338$ 103,996,614$ 100,937,890$ 97,879,166$ 94,820,442$ 91,761,718$ 88,702,994$ 85,644,270$ 82,585,546$



Recapture -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$


Residential Cost Recovery (Depreciation) Calculation 27.5 Years Straight-Line





Ending Balance 118,996,994$ 114,506,541$ 110,016,088$ 105,525,636$ 101,035,183$ 96,544,731$ 92,054,278$ 87,563,825$ 83,073,373$ 78,582,920$ 74,092,468$ 69,602,015$



Recapture -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$


Accelerated Cost Recovery (Depreciation) Calculation 7 Year Straight-Line

Beginning Balance 1,584,968$ 1,358,544$ 1,132,120$ 905,696$ 679,272$ 452,848$ 226,424$ -$ -$ -$ -$ -$

Less Cost Recovery 226,424$ 226,424$ 226,424$ 226,424$ 226,424$ 226,424$ 226,424$ -$ -$ -$ -$ -$



Ending Balance 1,358,544$ 1,132,120$ 905,696$ 679,272$ 452,848$ 226,424$ 0$ -$ -$ -$ -$ -$

Cumulative Cost Recovery 226,424$ 452,848$ 679,272$ 905,696$ 1,132,120$ 1,358,544$ 1,584,968$ 1,584,968$ -$ -$ -$ -$


Recapture -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Remaining Book Value 1,358,544$ 1,132,120$ 905,696$ 679,272$ 452,848$ 226,424$ -$ -$ -$ -$ -$ -$


Amortization



Ending Balance 12,091,502$ 11,587,690$ 11,083,877$ 10,580,065$ 10,076,252$ 9,572,439$ 9,068,627$ 8,564,814$ 8,061,002$ 7,557,189$ 7,053,376$ 6,549,564$


V.24 – Phase III Sales Schedule

Sale Schedule Lease Up Year Lease Up Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10





Sales Price (NOI/CAP) 959,243,100$ 613,713,795$ 417,662,285$ 429,705,661$ 442,094,528$ 454,838,735$ 467,948,414$ 481,433,980$ 495,306,144$ 509,575,920$ 524,254,633$ 539,353,930$

+ Reserve Fund -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- Less Commission 6.00% 57,554,586$ 36,822,828$ 25,059,737$ 25,782,340$ 26,525,672$ 27,290,324$ 28,076,905$ 28,886,039$ 29,718,369$ 30,574,555$ 31,455,278$ 32,361,236$

= Adjusted Sales Price 901,688,514$ 576,890,967$ 392,602,548$ 403,923,321$ 415,568,856$ 427,548,411$ 439,871,509$ 452,547,941$ 465,587,775$ 479,001,364$ 492,799,355$ 506,992,694$


= Total Sale Proceeds Before Tax 740,542,319$ 437,551,765$ 254,910,406$ 268,560,681$ 282,697,914$ 297,342,661$ 312,516,522$ 328,242,209$ 344,543,612$ 361,445,867$ 378,975,431$ 397,505,068$

Sales Proceeds Before Tax 740,542,319$ 437,551,765$ 254,910,406$ 268,560,681$ 282,697,914$ 297,342,661$ 312,516,522$ 328,242,209$ 344,543,612$ 361,445,867$ 378,975,431$ 397,505,068$

- Tax On Capital Gains 176,091,809$ 88,118,219$ 39,135,912$ 44,435,156$ 49,824,521$ 55,306,576$ 60,883,965$ 66,496,572$ 72,210,022$ 78,027,190$ 83,951,029$ 89,984,577$

- Tax On Ordinary Income (5,066,339)$ (4,855,242)$ (4,644,145)$ (4,433,047)$ (4,221,950)$ (4,010,852)$ (3,799,755)$ (3,588,657)$ (3,377,560)$ (3,166,462)$ (2,955,365)$ (2,744,267)$

= Sales Proceeds After Tax 569,516,850$ 354,288,788$ 220,418,639$ 228,558,572$ 237,095,343$ 246,046,936$ 255,432,311$ 265,334,294$ 275,711,150$ 286,585,139$ 297,979,767$ 310,264,759$

Calculations



- Cost Recovery 7,775,601$ 15,551,201$ 23,326,802$ 31,102,402$ 38,878,003$ 46,653,603$ 54,429,204$ 61,978,380$ 69,527,557$ 77,076,733$ 84,625,910$ 92,175,087$

= Adjusted Basis 267,123,436$ 259,347,835$ 251,572,235$ 243,796,634$ 236,021,034$ 228,245,433$ 220,469,832$ 212,920,656$ 205,371,479$ 197,822,303$ 190,273,126$ 182,723,950$

Sales Price 959,243,100$ 613,713,795$ 417,662,285$ 429,705,661$ 442,094,528$ 454,838,735$ 467,948,414$ 481,433,980$ 495,306,144$ 509,575,920$ 524,254,633$ 539,353,930$

- Cost of Sale 57,554,586$ 36,822,828$ 25,059,737$ 25,782,340$ 26,525,672$ 27,290,324$ 28,076,905$ 28,886,039$ 29,718,369$ 30,574,555$ 31,455,278$ 32,361,236$

- Adjusted Basis 267,123,436$ 259,347,835$ 251,572,235$ 243,796,634$ 236,021,034$ 228,245,433$ 220,469,832$ 212,920,656$ 205,371,479$ 197,822,303$ 190,273,126$ 182,723,950$

= Total Gain 634,565,078$ 317,543,132$ 141,030,313$ 160,126,687$ 179,547,822$ 199,302,978$ 219,401,677$ 239,627,285$ 260,216,296$ 281,179,062$ 302,526,229$ 324,268,744$


(Federal & State) 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75%

Tax on Capital Gain (Savings) 176,091,809$ 88,118,219$ 39,135,912$ 44,435,156$ 49,824,521$ 55,306,576$ 60,883,965$ 66,496,572$ 72,210,022$ 78,027,190$ 83,951,029$ 89,984,577$


Unamortized Expenditures (12,091,502)$ (11,587,690)$ (11,083,877)$ (10,580,065)$ (10,076,252)$ (9,572,439)$ (9,068,627)$ (8,564,814)$ (8,061,002)$ (7,557,189)$ (7,053,376)$ (6,549,564)$

Ordinary Income On Sale (Savings) (12,091,502)$ (11,587,690)$ (11,083,877)$ (10,580,065)$ (10,076,252)$ (9,572,439)$ (9,068,627)$ (8,564,814)$ (8,061,002)$ (7,557,189)$ (7,053,376)$ (6,549,564)$


(Federal & State) 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90%

Tax on Ordinary Income (5,066,339)$ (4,855,242)$ (4,644,145)$ (4,433,047)$ (4,221,950)$ (4,010,852)$ (3,799,755)$ (3,588,657)$ (3,377,560)$ (3,166,462)$ (2,955,365)$ (2,744,267)$


V.25 – Phase III Financial Statement





+ Sales Income 42,410,750$ 15,174,400$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

+ Potential Rental Income 30,776,063$ 30,776,063$ 31,699,345$ 32,650,325$ 33,629,835$ 34,638,730$ 35,677,892$ 36,748,229$ 37,850,676$ 38,986,196$ 40,155,782$ 41,360,455$

- Vacancy/Credit Loss 5.25% 8,476,904$ 1,615,644$ 1,665,531$ 1,715,497$ 1,766,961$ 1,819,970$ 1,874,569$ 1,930,807$ 1,988,731$ 2,048,393$ 2,109,844$ 2,173,140$

= Effective Rental Income 22,299,159$ 29,160,419$ 30,033,814$ 30,934,829$ 31,862,873$ 32,818,760$ 33,803,322$ 34,817,422$ 35,861,945$ 36,937,803$ 38,045,937$ 39,187,315$

+ Condomimium Income 42,410,750$ 15,174,400$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= Gross Operating Income 64,709,909$ 44,334,819$ 30,033,814$ 30,934,829$ 31,862,873$ 32,818,760$ 33,803,322$ 34,817,422$ 35,861,945$ 36,937,803$ 38,045,937$ 39,187,315$

Operating Expense

- Operating Expenses 13,670,909$ 14,151,198$ 11,675,813$ 12,055,277$ 12,447,073$ 12,851,603$ 13,269,280$ 13,700,532$ 14,145,799$ 14,605,538$ 15,080,218$ 15,570,325$

- Other -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= Total Expenses 13,670,909$ 14,151,198$ 11,675,813$ 12,055,277$ 12,447,073$ 12,851,603$ 13,269,280$ 13,700,532$ 14,145,799$ 14,605,538$ 15,080,218$ 15,570,325$



+ Net Operating Income 51,038,999$ 30,183,622$ 18,358,001$ 18,879,552$ 19,415,800$ 19,967,156$ 20,534,042$ 21,116,890$ 21,716,145$ 22,332,265$ 22,965,719$ 23,616,991$

- Interest Expense 10,805,114$ 8,302,088$ 9,060,828$ 9,223,026$ 9,060,828$ 8,887,336$ 8,701,764$ 8,503,272$ 8,290,958$ 8,063,862$ 7,820,953$ 7,561,132$

Cost Recovery

- Cost Recovery 7,775,601$ 7,775,601$ 7,775,601$ 7,775,601$ 7,775,601$ 7,775,601$ 7,775,601$ 7,549,177$ 7,549,177$ 7,549,177$ 7,549,177$ 7,549,177$

- Cost Recovery Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= - Total Annual Cost Recovery 7,775,601$ 7,775,601$ 7,775,601$ 7,775,601$ 7,775,601$ 7,775,601$ 7,775,601$ 7,549,177$ 7,549,177$ 7,549,177$ 7,549,177$ 7,549,177$

- Non-Operating Expenses 503,813$ 503,813$ 503,813$ 503,813$ 503,813$ 503,813$ 503,813$ 503,813$ 503,813$ 503,813$ 503,813$ 503,813$

= Taxable Income (Loss) 31,954,472$ 13,602,121$ 1,017,760$ 1,377,112$ 2,075,559$ 2,800,407$ 3,552,864$ 4,560,629$ 5,372,198$ 6,215,414$ 7,091,777$ 8,002,870$



- Annual Debt Service 14,934,680$ 14,934,680$ 11,552,527$ 11,552,527$ 11,552,527$ 11,552,527$ 11,552,527$ 11,552,527$ 11,552,527$ 11,552,527$ 11,552,527$ 11,552,527$

- Capital Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- Reserves -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

+ Reserves to Capital Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= Cash Flow Before Tax 36,104,319$ 15,248,942$ 6,805,474$ 7,327,024$ 7,863,273$ 8,414,629$ 8,981,515$ 9,564,363$ 10,163,618$ 10,779,738$ 11,413,192$ 12,064,463$

Taxable Income (Loss) (Ordinary) 31,954,472$ 13,602,121$ 1,017,760$ 1,377,112$ 2,075,559$ 2,800,407$ 3,552,864$ 4,560,629$ 5,372,198$ 6,215,414$ 7,091,777$ 8,002,870$

x (federal & State) 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00%

= Tax Liability 13,101,334$ 5,576,869$ 417,282$ 564,616$ 850,979$ 1,148,167$ 1,456,674$ 1,869,858$ 2,202,601$ 2,548,320$ 2,907,629$ 3,281,177$

Cash Flow Before Tax 36,104,319$ 15,248,942$ 6,805,474$ 7,327,024$ 7,863,273$ 8,414,629$ 8,981,515$ 9,564,363$ 10,163,618$ 10,779,738$ 11,413,192$ 12,064,463$

- Less Tax Liability 13,101,334$ 5,576,869$ 417,282$ 564,616$ 850,979$ 1,148,167$ 1,456,674$ 1,869,858$ 2,202,601$ 2,548,320$ 2,907,629$ 3,281,177$

Cash Flow After Tax 23,002,986$ 9,672,072$ 6,388,192$ 6,762,408$ 7,012,294$ 7,266,462$ 7,524,840$ 7,694,505$ 7,961,017$ 8,231,418$ 8,505,564$ 8,783,287$

Debt Service Coverage Ratio: 3.42 2.02 1.59 1.63 1.68 1.73 1.78 1.83 1.88 1.93 1.99 2.04


V.26 – Phase III Before-Tax, After-Tax and Unleveraged IRR and NPV



Total 1 2 3 Total 1 2 3




2021 (111,831,198)$ -$ (111,831,198)$ 2021 (111,831,198)$ -$ (111,831,198)$

2022 -$ 23,002,986$ 23,002,986$ 2022 -$ 23,002,986$ 23,002,986$

2023 -$ 9,672,072$ 9,672,072$ 2023 -$ 9,672,072$ 9,672,072$

2024 -$ 6,388,192$ 6,388,192$ 2024 -$ 6,388,192$ 6,388,192$

2025 -$ 6,762,408$ 6,762,408$ 2025 -$ 6,762,408$ 6,762,408$

2026 -$ 7,012,294$ 7,012,294$ 2026 -$ 7,012,294$ 7,012,294$

2027 -$ 7,266,462$ 7,266,462$ 2027 -$ 7,266,462$ 7,266,462$

2028 -$ 7,524,840$ 255,432,311$ 262,957,151$ 2028 -$ 7,524,840$ 7,524,840$

Total (111,831,198)$ 67,629,255$ 255,432,311$ 211,230,368$ 2029 -$ 7,694,505$ 7,694,505$

2030 -$ 7,961,017$ 7,961,017$

Figures are for the entire ownership equity - The LLC (and/or partnerships) 2031 -$ 8,231,418$ 8,231,418$

2032 -$ 8,505,564$ 8,505,564$

Internal Rate of Return After Tax: 19.93% 2033 -$ 8,783,287$ 310,264,759$ 319,048,045$

After Tax Net Present Value: 46,313,537$ Total (111,831,198)$ 108,805,045$ 310,264,759$ 307,238,607$

Hurdle Rate: 12.00%

NPV Rate: 12.00% Internal Rate of Return After Tax: 15.16%


Hurdle Rate: 12.00%

NPV Rate: 12.00%







2021 (111,831,198)$ -$ (111,831,198)$ 2021 (111,831,198)$ (111,831,198)$

2022 -$ 36,104,319$ 36,104,319$ 2022 -$ 36,104,319$ 36,104,319$

2023 -$ 15,248,942$ 15,248,942$ 2023 -$ 15,248,942$ 15,248,942$

2024 -$ 6,805,474$ 6,805,474$ 2024 -$ 6,805,474$ 6,805,474$

2025 -$ 7,327,024$ 7,327,024$ 2025 -$ 7,327,024$ 7,327,024$

2026 -$ 7,863,273$ 7,863,273$ 2026 -$ 7,863,273$ 7,863,273$

2027 -$ 8,414,629$ 8,414,629$ 2027 -$ 8,414,629$ 8,414,629$

2028 -$ 8,981,515$ 312,516,522$ 321,498,036$ 2028 -$ 8,981,515$ 8,981,515$

Total (111,831,198)$ 90,745,176$ 312,516,522$ 291,430,500$ 2029 -$ 9,564,363$ 9,564,363$

2030 -$ 10,163,618$ 10,163,618$


2032 -$ 11,413,192$ 11,413,192$

Internal Rate of Return Before Tax: 26.25% 2033 -$ 12,064,463$ 397,505,068$ 409,569,531$

Before Tax Net Present Value: 85,907,101$ Total (111,831,198)$ 144,730,550$ 397,505,068$ 430,404,421$

Hurdle Rate: 12.00%

NPV Rate: 12.00% Internal Rate of Return Before Tax: 19.72%


Hurdle Rate: 12.00%

NPV Rate: 12.00%







2021 (319,517,708)$ -$ (319,517,708)$ 2021 (319,517,708)$ (319,517,708)$

2022 -$ 51,038,999$ 51,038,999$ 2022 -$ 51,038,999$ 51,038,999$

2023 -$ 30,183,622$ 30,183,622$ 2023 -$ 30,183,622$ 30,183,622$

2024 -$ 18,358,001$ 18,358,001$ 2024 -$ 18,358,001$ 18,358,001$

2025 -$ 18,879,552$ 18,879,552$ 2025 -$ 18,879,552$ 18,879,552$

2026 -$ 19,415,800$ 19,415,800$ 2026 -$ 19,415,800$ 19,415,800$

2027 -$ 19,967,156$ 19,967,156$ 2027 -$ 19,967,156$ 19,967,156$

2028 -$ 20,534,042$ 439,871,509$ 460,405,551$ 2028 -$ 20,534,042$ 20,534,042$

Total (319,517,708)$ 178,377,173$ 439,871,509$ 298,730,974$ 2029 -$ 21,116,890$ 21,116,890$

2030 -$ 21,716,145$ 21,716,145$


2032 -$ 22,965,719$ 22,965,719$

Unleveraged Internal Rate of Return: 12.30% 2033 -$ 23,616,991$ 506,992,694$ 530,609,684$

Unleveraged Net Present Value: 4,086,878$ Total (319,517,708)$ 290,125,183$ 506,992,694$ 477,600,169$

Hurdle Rate: 12.00%

NPV Rate: 12.00% Unleveraged Internal Rate of Return: 10.71%

Unleveraged Net Present Value: (25,046,101)$

Hurdle Rate: 12.00%

NPV Rate: 12.00%


V.27 – Phase IV Lease-Up Schedule



Civic 1 0 0 0 0 0 0 0 0 0 0 0 1

Retail 2.5 0 0.5 0.5 0 0 0 0 0 0 0 0 3.5

Parking 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Units Leased 3.5 0 0.5 0.5 0 0 0 0 0 0 0 0 4.5

RENTAL INCOME: 857,349$ 857,349$ 992,720$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 12,860,232$


Potential Civic Income 721,978$ 721,978$ 721,978$ 721,978$ 721,978$ 721,978$ 721,978$ 721,978$ 721,978$ 721,978$ 721,978$ 721,978$ 8,663,735$




Vacancy & Credit Loss 270,742$ 270,742$ 135,371$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 676,854$

EFFECTIVE GROSS REVENUE: 857,349$ 857,349$ 992,720$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 1,128,090$ 12,860,232$


Free Rent Impact 85,735$ 85,735$ 85,735$ 85,735$ 85,735$ 85,735$ 85,735$ 85,735$ 85,735$ 85,735$ 85,735$ 85,735$ 1,028,819$






V.28 – Phase IV Construction Draw Schedule

Phase IV





Rate: 10%

Retainage: 10%


Jan-22 1,598,222$ (159,822)$ 1,438,400$ 1,438,400$ 11,987$

Feb-22 1,598,222$ (159,822)$ 1,438,400$ 2,876,799$ 23,973$

Mar-22 1,598,222$ (159,822)$ 1,438,400$ 4,315,199$ 35,960$

Apr-22 1,598,222$ (159,822)$ 1,438,400$ 5,753,599$ 47,947$

May-22 1,598,222$ (159,822)$ 1,438,400$ 7,191,998$ 59,933$

Jun-22 1,598,222$ (159,822)$ 1,438,400$ 8,630,398$ 71,920$

Jul-22 1,598,222$ (159,822)$ 1,438,400$ 10,068,798$ 83,907$

Aug-22 1,598,222$ (159,822)$ 1,438,400$ 11,507,197$ 95,893$

Sep-22 1,598,222$ (159,822)$ 1,438,400$ 12,945,597$ 107,880$

Oct-22 1,598,222$ (159,822)$ 1,438,400$ 14,383,997$ 119,867$

Nov-22 1,598,222$ (159,822)$ 1,438,400$ 15,822,396$ 131,853$

Dec-22 1,598,222$ (159,822)$ 1,438,400$ 17,260,796$ 143,840$

Jan-23 1,598,222$ (159,822)$ 1,438,400$ 18,699,196$ 155,827$

Feb-23 1,598,222$ (159,822)$ 1,438,400$ 20,137,595$ 167,813$

Mar-23 1,598,222$ (159,822)$ 1,438,400$ 21,575,995$ 179,800$

Apr-23 1,598,222$ (159,822)$ 1,438,400$ 23,014,395$ 191,787$

May-23 1,598,222$ (159,822)$ 1,438,400$ 24,452,794$ 203,773$

Jun-23 1,598,222$ (159,822)$ 1,438,400$ 25,891,194$ 215,760$

Jul-23 1,598,222$ (159,822)$ 1,438,400$ 27,329,594$ 227,747$

Aug-23 1,598,222$ (159,822)$ 1,438,400$ 28,767,993$ 239,733$

Sep-23 1,598,222$ (159,822)$ 1,438,400$ 30,206,393$ 251,720$

Oct-23 1,598,222$ (159,822)$ 1,438,400$ 31,644,793$ 263,707$

Nov-23 1,598,222$ (159,822)$ 1,438,400$ 33,083,192$ 275,693$

Dec-23 5,433,954$ 1,758,044$ 9,109,865$ 42,193,057$ 207,769$

42,193,057$ 42,193,057$ 3,516,088$


V.29 – Phase IV Basis & Depreciation

Uses (Non Basis) 39 Year 7 - Year Amortize


Acquisition

Land Acquisition 10,002,304$ 10,002,304$ 10,002,304$ -$ -$ -$

Demolition 1,154,717$ 1,154,717$ -$ -$ -$ 1,154,717$

Total Acquisition 11,157,021$ 11,157,021$ 10,002,304$ -$ -$ 1,154,717$

Construction

Civic 11,681,525$ 11,681,525$ -$ 11,681,525$ -$ -$

Retail 1,584,968$ 1,584,968$ -$ 1,584,968$ -$ -$

Parking 7,359,076$ 7,359,076$ -$ 7,359,076$ -$ -$

Contingency -$ -$ -$ -$ -$ -$

Taxes (During Construction) 216,050$ 216,050$ -$ 216,050$ -$ -$

Total Construction 20,841,618$ 20,841,618$ -$ 20,841,618$ -$ -$


Points & Fees (Origination) 210,965$ 210,965$ -$ 210,965$ -$ -$

Interest Expense 3,516,088$ 3,516,088$ -$ 3,516,088$ -$ -$

Total Construction Financing 3,727,053$ 3,727,053$ -$ 3,727,053$ -$ -$

Soft Costs

Percentage of Hard Costs 15,322,598$ 15,322,598$ -$ 15,322,598$ -$ -$

Total Soft Costs 15,322,598$ 15,322,598$ -$ 15,322,598$ -$ -$

Permanent Financing

Points & Fees (Origination) 248,992$ -$ -$ -$ -$ 248,992$

Transfer/Recording Fees 74,748$ -$ -$ -$ -$ 74,748$

Title Insurance, Recording, Management 60,000$ -$ -$ -$ -$ 60,000$

Total Permanent Financing 383,740$ -$ -$ -$ -$ 383,740$

Reserves

Lease-up Reserves 160,000$ -$ 160,000$ -$ -$ -$

Operating Reserves 205,000$ -$ 205,000$ -$ -$ -$

Replacement Reserve 400,000$ -$ 400,000$ -$ -$ -$

Total Reserves 765,000$ -$ 765,000$ -$ -$ -$

Development Fees

Development General & Administration 1,532,260$ 1,532,260$ -$ 1,532,260$ -$ -$

Development Fee 1,532,260$ 1,532,260$ -$ 1,532,260$ -$ -$

Total Development Fees 3,064,520$ 3,064,520$ -$ 3,064,520$ -$ -$

TDC Basis NB Expense 39 Year 7-Yr Depr. Amortize

Total Development Cost 55,261,550$ 54,112,810$ 10,767,304$ 42,955,789$ -$ 1,538,457$


V.30 – Phase IV Income & Expense Statement

INCOME & EXPENSE STATEMENT Lease Up Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Period Beginning Date Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 Jan-29 Jan-30 Jan-31 Jan-32 Jan-33 Jan-34

Period Ending Date Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Dec-29 Dec-30 Dec-31 Dec-32 Dec-33 Dec-34

INCOME:

Potential Civic Income 8,663,735$ 8,663,735$ 8,923,647$ 9,191,356$ 9,467,097$ 9,751,110$ 10,043,643$ 10,344,953$ 10,655,301$ 10,974,960$ 11,304,209$

Potential Retail Income 4,873,351$ 4,873,351$ 5,019,551$ 5,170,138$ 5,325,242$ 5,484,999$ 5,649,549$ 5,819,036$ 5,993,607$ 6,173,415$ 6,358,618$

Potential Parking Income -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Potential Total Income 13,537,086$ 13,537,086$ 13,943,199$ 14,361,494$ 14,792,339$ 15,236,109$ 15,693,193$ 16,163,989$ 16,648,908$ 17,148,375$ 17,662,827$

Vacancy & Credit Loss 676,854$ 710,697$ 732,018$ 753,978$ 776,598$ 799,896$ 823,893$ 848,609$ 874,068$ 900,290$ 927,298$

EFFECTIVE RENTAL INCOME: 12,860,232$ 12,826,389$ 13,211,181$ 13,607,516$ 14,015,741$ 14,436,214$ 14,869,300$ 15,315,379$ 15,774,841$ 16,248,086$ 16,735,528$

Other Income -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

GROSS OPERATING INCOME: 12,860,232$ 12,826,389$ 13,211,181$ 13,607,516$ 14,015,741$ 14,436,214$ 14,869,300$ 15,315,379$ 15,774,841$ 16,248,086$ 16,735,528$

EXPENSE:

Rent Concessions 2,777,810$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Operating Expenses 4,489,236$ 4,489,236$ 4,635,136$ 4,785,778$ 4,941,316$ 5,101,909$ 5,267,721$ 5,438,922$ 5,615,687$ 5,798,197$ 5,986,638$

Taxes 827,420$ 827,420$ 854,311$ 882,077$ 910,744$ 940,343$ 970,904$ 1,002,459$ 1,035,039$ 1,068,677$ 1,103,409$

TOTAL OPERATING EXPENSES: 5,316,656$ 5,316,656$ 5,489,448$ 5,667,855$ 5,852,060$ 6,042,252$ 6,238,625$ 6,441,381$ 6,650,725$ 6,866,874$ 7,090,047$

NET OPERATING INCOME (NOI): 7,543,575$ 7,509,733$ 7,721,733$ 7,939,661$ 8,163,681$ 8,393,962$ 8,630,675$ 8,873,999$ 9,124,115$ 9,381,212$ 9,645,481$


VI. V.31 – Phase IV Mortgage & Depreciation

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

Period Beginning Date: Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 Jan-29 Jan-30 Jan-31 Jan-32 Jan-33 Jan-34

Period Ending Date: Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Dec-29 Dec-30 Dec-31 Dec-32 Dec-33 Dec-34


Beginning Balance 49,798,442$ 49,006,888$ 48,160,219$ 47,254,599$ 46,285,922$ 45,249,798$ 44,141,531$ 42,956,097$ 41,688,125$ 40,331,865$ 38,881,173$

Ending Balance 49,006,888$ 48,160,219$ 47,254,599$ 46,285,922$ 45,249,798$ 44,141,531$ 42,956,097$ 41,688,125$ 40,331,865$ 38,881,173$ 37,329,472$

Principal Reduction 791,554$ 846,669$ 905,620$ 968,677$ 1,036,124$ 1,108,267$ 1,185,433$ 1,267,973$ 1,356,259$ 1,450,693$ 1,551,701$

Interest Expense 3,337,204$ 3,282,089$ 3,223,138$ 3,160,081$ 3,092,634$ 3,020,491$ 2,943,325$ 2,860,785$ 2,772,499$ 2,678,066$ 2,577,057$

Yearly Principal Reduction 791,554$ 846,669$ 905,620$ 968,677$ 1,036,124$ 1,108,267$ 1,185,433$ 1,267,973$ 1,356,259$ 1,450,693$ 1,551,701$

Yearly Interest Expense 3,337,204$ 3,282,089$ 3,223,138$ 3,160,081$ 3,092,634$ 3,020,491$ 2,943,325$ 2,860,785$ 2,772,499$ 2,678,066$ 2,577,057$

Commercial Cost Recovery (Depreciation) Calculation

39 Years Straight-Line

Beginning Balance 42,955,789$ 41,854,358$ 40,752,928$ 39,651,497$ 38,550,067$ 37,448,636$ 36,347,206$ 35,245,775$ 34,144,345$ 33,042,914$ 31,941,484$

Less Cost Recovery 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$

Additions to Basis -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Less Additions Cost Recovery -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Ending Balance 41,854,358$ 40,752,928$ 39,651,497$ 38,550,067$ 37,448,636$ 36,347,206$ 35,245,775$ 34,144,345$ 33,042,914$ 31,941,484$ 30,840,053$

Cumulative Cost Recovery 1,101,430$ 2,202,861$ 3,304,291$ 4,405,722$ 5,507,152$ 6,608,583$ 7,710,013$ 8,811,444$ 9,912,874$ 11,014,305$ 12,115,735$

Cumulative Straight Line -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Recapture -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Remaining Book Value 41,854,358$ 40,752,928$ 39,651,497$ 38,550,067$ 37,448,636$ 36,347,206$ 35,245,775$ 34,144,345$ 33,042,914$ 31,941,484$ 30,840,053$

Total Annual Cost Recovery 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$

Amortization

Beginning Balance 1,538,457$ 1,476,918$ 1,415,380$ 1,353,842$ 1,292,304$ 1,230,765$ 1,169,227$ 1,107,689$ 1,046,151$ 984,612$ 923,074$

Less Cost Recovery 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$

Ending Balance 1,476,918$ 1,415,380$ 1,353,842$ 1,292,304$ 1,230,765$ 1,169,227$ 1,107,689$ 1,046,151$ 984,612$ 923,074$ 861,536$


V.32 – Phase IV Sales Schedule

Sale Schedule Lease Up Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 Jan-29 Jan-30 Jan-31 Jan-32 Jan-33 Jan-34

Period Beginning Date Cap Rate Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Dec-29 Dec-30 Dec-31 Dec-32 Dec-33 Dec-34



Sales Price (NOI/CAP) 125,726,254$ 125,162,209$ 128,695,548$ 132,327,687$ 136,061,357$ 139,899,362$ 143,844,582$ 147,899,977$ 152,068,586$ 156,353,530$ 160,758,016$

+ Reserve Fund -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- Less Commission 6.00% 7,543,575$ 7,509,733$ 7,721,733$ 7,939,661$ 8,163,681$ 8,393,962$ 8,630,675$ 8,873,999$ 9,124,115$ 9,381,212$ 9,645,481$

= Adjusted Sales Price 118,182,679$ 117,652,476$ 120,973,815$ 124,388,026$ 127,897,676$ 131,505,400$ 135,213,907$ 139,025,979$ 142,944,470$ 146,972,318$ 151,112,535$

- Less Mortgage Balance 49,006,888$ 48,160,219$ 47,254,599$ 46,285,922$ 45,249,798$ 44,141,531$ 42,956,097$ 41,688,125$ 40,331,865$ 38,881,173$ 37,329,472$

= Total Sale Proceeds Before Tax 69,175,791$ 69,492,257$ 73,719,216$ 78,102,104$ 82,647,878$ 87,363,870$ 92,257,810$ 97,337,854$ 102,612,605$ 108,091,145$ 113,783,063$

Sales Proceeds Before Tax 69,175,791$ 69,492,257$ 73,719,216$ 78,102,104$ 82,647,878$ 87,363,870$ 92,257,810$ 97,337,854$ 102,612,605$ 108,091,145$ 113,783,063$

- Tax On Capital Gains 18,085,036$ 18,243,551$ 19,470,870$ 20,723,960$ 22,003,535$ 23,310,326$ 24,645,083$ 26,008,580$ 27,401,608$ 28,824,983$ 30,279,540$

- Tax On Ordinary Income (618,829)$ (593,044)$ (567,260)$ (541,475)$ (515,691)$ (489,906)$ (464,122)$ (438,337)$ (412,553)$ (386,768)$ (360,983)$

= Sales Proceeds After Tax 51,709,584$ 51,841,750$ 54,815,606$ 57,919,619$ 61,160,033$ 64,543,450$ 68,076,848$ 71,767,611$ 75,623,549$ 79,652,930$ 83,864,507$

Calculations

Acquisition Basis 54,112,810$ 54,112,810$ 54,112,810$ 54,112,810$ 54,112,810$ 54,112,810$ 54,112,810$ 54,112,810$ 54,112,810$ 54,112,810$ 54,112,810$

+ Capital Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- Cost Recovery 1,101,430$ 2,202,861$ 3,304,291$ 4,405,722$ 5,507,152$ 6,608,583$ 7,710,013$ 8,811,444$ 9,912,874$ 11,014,305$ 12,115,735$

= Adjusted Basis 53,011,379$ 51,909,949$ 50,808,518$ 49,707,088$ 48,605,657$ 47,504,227$ 46,402,797$ 45,301,366$ 44,199,936$ 43,098,505$ 41,997,075$

Sales Price 125,726,254$ 125,162,209$ 128,695,548$ 132,327,687$ 136,061,357$ 139,899,362$ 143,844,582$ 147,899,977$ 152,068,586$ 156,353,530$ 160,758,016$

- Cost of Sale 7,543,575$ 7,509,733$ 7,721,733$ 7,939,661$ 8,163,681$ 8,393,962$ 8,630,675$ 8,873,999$ 9,124,115$ 9,381,212$ 9,645,481$

- Adjusted Basis 53,011,379$ 51,909,949$ 50,808,518$ 49,707,088$ 48,605,657$ 47,504,227$ 46,402,797$ 45,301,366$ 44,199,936$ 43,098,505$ 41,997,075$

= Total Gain 65,171,299$ 65,742,527$ 70,165,296$ 74,680,938$ 79,292,018$ 84,001,173$ 88,811,111$ 93,724,613$ 98,744,535$ 103,873,813$ 109,115,460$


(Federal & State) 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75% 27.75%

Tax on Capital Gain (Savings) 18,085,036$ 18,243,551$ 19,470,870$ 20,723,960$ 22,003,535$ 23,310,326$ 24,645,083$ 26,008,580$ 27,401,608$ 28,824,983$ 30,279,540$

Recapture Of Cost Recovery -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Unamortized Expenditures (1,476,918)$ (1,415,380)$ (1,353,842)$ (1,292,304)$ (1,230,765)$ (1,169,227)$ (1,107,689)$ (1,046,151)$ (984,612)$ (923,074)$ (861,536)$

Ordinary Income On Sale (Savings) (1,476,918)$ (1,415,380)$ (1,353,842)$ (1,292,304)$ (1,230,765)$ (1,169,227)$ (1,107,689)$ (1,046,151)$ (984,612)$ (923,074)$ (861,536)$


(Federal & State) 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90% 41.90%

Tax on Ordinary Income (618,829)$ (593,044)$ (567,260)$ (541,475)$ (515,691)$ (489,906)$ (464,122)$ (438,337)$ (412,553)$ (386,768)$ (360,983)$


V.33 – Phase IV Financial Statement

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

Period Beginning Date Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 Jan-29 Jan-30 Jan-31 Jan-32 Jan-33 Jan-34

Period Ending Date Dec-24 Dec-25 Dec-26 Dec-27 Dec-28 Dec-29 Dec-30 Dec-31 Dec-32 Dec-33 Dec-34


+ Potential Rental Income 13,537,086$ 13,537,086$ 13,943,199$ 14,361,494$ 14,792,339$ 15,236,109$ 15,693,193$ 16,163,989$ 16,648,908$ 17,148,375$ 17,662,827$

- Vacancy/Credit Loss 5.25% 676,854$ 710,697$ 732,018$ 753,978$ 776,598$ 799,896$ 823,893$ 848,609$ 874,068$ 900,290$ 927,298$

= Effective Rental Income 12,860,232$ 12,826,389$ 13,211,181$ 13,607,516$ 14,015,741$ 14,436,214$ 14,869,300$ 15,315,379$ 15,774,841$ 16,248,086$ 16,735,528$

+ Miscellaneous Income -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= Gross Operating Income 12,860,232$ 12,826,389$ 13,211,181$ 13,607,516$ 14,015,741$ 14,436,214$ 14,869,300$ 15,315,379$ 15,774,841$ 16,248,086$ 16,735,528$

Operating Expense

- Operating Expenses 5,316,656$ 5,316,656$ 5,489,448$ 5,667,855$ 5,852,060$ 6,042,252$ 6,238,625$ 6,441,381$ 6,650,725$ 6,866,874$ 7,090,047$

- Other -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= Total Expenses 5,316,656$ 5,316,656$ 5,489,448$ 5,667,855$ 5,852,060$ 6,042,252$ 6,238,625$ 6,441,381$ 6,650,725$ 6,866,874$ 7,090,047$

Net Operating Income 7,543,575$ 7,509,733$ 7,721,733$ 7,939,661$ 8,163,681$ 8,393,962$ 8,630,675$ 8,873,999$ 9,124,115$ 9,381,212$ 9,645,481$


+ Net Operating Income 7,543,575$ 7,509,733$ 7,721,733$ 7,939,661$ 8,163,681$ 8,393,962$ 8,630,675$ 8,873,999$ 9,124,115$ 9,381,212$ 9,645,481$

- Interest Expense 3,337,204$ 3,282,089$ 3,223,138$ 3,160,081$ 3,092,634$ 3,020,491$ 2,943,325$ 2,860,785$ 2,772,499$ 2,678,066$ 2,577,057$

Cost Recovery

- Cost Recovery 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$

- Cost Recovery Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= - Total Annual Cost Recovery 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$ 1,101,430$

- Non-Operating Expenses 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$ 61,538$

= Taxable Income (Loss) 3,043,403$ 3,064,674$ 3,335,626$ 3,616,611$ 3,908,078$ 4,210,502$ 4,524,382$ 4,850,245$ 5,188,647$ 5,540,177$ 5,905,455$


Net Operating Income 7,543,575$ 7,509,733$ 7,721,733$ 7,939,661$ 8,163,681$ 8,393,962$ 8,630,675$ 8,873,999$ 9,124,115$ 9,381,212$ 9,645,481$

- Annual Debt Service 4,128,758$ 4,128,758$ 4,128,758$ 4,128,758$ 4,128,758$ 4,128,758$ 4,128,758$ 4,128,758$ 4,128,758$ 4,128,758$ 4,128,758$

- Capital Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- Reserves -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

+ Reserves to Capital Additions -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

= Cash Flow Before Tax 3,414,817$ 3,380,974$ 3,592,975$ 3,810,903$ 4,034,923$ 4,265,204$ 4,501,917$ 4,745,240$ 4,995,357$ 5,252,454$ 5,516,723$

Taxable Income (Loss) (Ordinary) 3,043,403$ 3,064,674$ 3,335,626$ 3,616,611$ 3,908,078$ 4,210,502$ 4,524,382$ 4,850,245$ 5,188,647$ 5,540,177$ 5,905,455$

x (federal & State) 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00% 41.00%

= Tax Liability 1,247,795$ 1,256,516$ 1,367,607$ 1,482,811$ 1,602,312$ 1,726,306$ 1,854,996$ 1,988,600$ 2,127,345$ 2,271,473$ 2,421,237$

Cash Flow Before Tax 3,414,817$ 3,380,974$ 3,592,975$ 3,810,903$ 4,034,923$ 4,265,204$ 4,501,917$ 4,745,240$ 4,995,357$ 5,252,454$ 5,516,723$

- Less Tax Liability 1,247,795$ 1,256,516$ 1,367,607$ 1,482,811$ 1,602,312$ 1,726,306$ 1,854,996$ 1,988,600$ 2,127,345$ 2,271,473$ 2,421,237$

Cash Flow After Tax 2,167,022$ 2,124,458$ 2,225,368$ 2,328,092$ 2,432,611$ 2,538,898$ 2,646,920$ 2,756,640$ 2,868,012$ 2,980,981$ 3,095,486$

Debt Service Coverage Ratio: 1.82 1.87 1.92 1.98 2.03 2.09 2.15 2.21 2.27 2.34


V.34 – Phase IV Before-Tax, After-Tax and Unleveraged IRR and NPV







2023 (26,814,546)$ -$ (26,814,546)$ 2023 (26,814,546)$ -$ (26,814,546)$

2024 -$ 2,167,022$ 2,167,022$ 2024 -$ 2,167,022$ 2,167,022$

2025 -$ 2,124,458$ 2,124,458$ 2025 -$ 2,124,458$ 2,124,458$

2026 -$ 2,225,368$ 2,225,368$ 2026 -$ 2,225,368$ 2,225,368$

2027 -$ 2,328,092$ 2,328,092$ 2027 -$ 2,328,092$ 2,328,092$

2028 -$ 2,432,611$ 2,432,611$ 2028 -$ 2,432,611$ 2,432,611$

2029 -$ 2,538,898$ 64,543,450$ 67,082,348$ 2029 -$ 2,538,898$ 2,538,898$

Total (26,814,546)$ 13,816,449$ 64,543,450$ 51,545,353$ 2030 -$ 2,646,920$ 2,646,920$

2031 -$ 2,756,640$ 2,756,640$


2033 -$ 2,980,981$ 2,980,981$

Internal Rate of Return After Tax: 21.92% 2034 -$ 3,095,486$ 310,264,759$ 313,360,245$

After Tax Net Present Value: 13,610,492$ Total (26,814,546)$ 28,164,488$ 310,264,759$ 311,614,701$

Hurdle Rate: 12.00%

NPV Rate: 12.00% Internal Rate of Return After Tax: 28.79%


Hurdle Rate: 12.00%

NPV Rate: 12.00%







2023 (26,814,546)$ -$ (26,814,546)$ 2023 (26,814,546)$ (26,814,546)$

2024 -$ 3,414,817$ 3,414,817$ 2024 -$ 3,414,817$ 3,414,817$

2025 -$ 3,380,974$ 3,380,974$ 2025 -$ 3,380,974$ 3,380,974$

2026 -$ 3,592,975$ 3,592,975$ 2026 -$ 3,592,975$ 3,592,975$

2027 -$ 3,810,903$ 3,810,903$ 2027 -$ 3,810,903$ 3,810,903$

2028 -$ 4,034,923$ 4,034,923$ 2028 -$ 4,034,923$ 4,034,923$

2029 -$ 4,265,204$ 87,363,870$ 91,629,073$ 2029 -$ 4,265,204$ 4,265,204$

Total (26,814,546)$ 22,499,796$ 87,363,870$ 83,049,120$ 2030 -$ 4,501,917$ 4,501,917$

2031 -$ 4,745,240$ 4,745,240$


2033 -$ 5,252,454$ 5,252,454$

Internal Rate of Return Before Tax: 30.83% 2034 -$ 5,516,723$ 113,783,063$ 119,299,786$

Before Tax Net Present Value: 29,125,589$ Total (26,814,546)$ 47,511,487$ 113,783,063$ 134,480,004$

Hurdle Rate: 12.00%

NPV Rate: 12.00% Internal Rate of Return Before Tax: 23.06%


Hurdle Rate: 12.00%

NPV Rate: 12.00%







2023 (76,612,989)$ -$ (76,612,989)$ 2023 (76,612,989)$ (76,612,989)$

2024 -$ 7,543,575$ 7,543,575$ 2024 -$ 7,543,575$ 7,543,575$

2025 -$ 7,509,733$ 7,509,733$ 2025 -$ 7,509,733$ 7,509,733$

2026 -$ 7,721,733$ 7,721,733$ 2026 -$ 7,721,733$ 7,721,733$

2027 -$ 7,939,661$ 7,939,661$ 2027 -$ 7,939,661$ 7,939,661$

2028 -$ 8,163,681$ 8,163,681$ 2028 -$ 8,163,681$ 8,163,681$

2029 -$ 8,393,962$ 135,213,907$ 143,607,869$ 2029 -$ 8,393,962$ 8,393,962$

Total (76,612,989)$ 47,272,345$ 135,213,907$ 105,873,264$ 2030 -$ 8,630,675$ 8,630,675$

2031 -$ 8,873,999$ 8,873,999$


2033 -$ 9,381,212$ 9,381,212$

Unleveraged Internal Rate of Return: 18.23% 2034 -$ 9,645,481$ 151,112,535$ 160,758,016$

Unleveraged Net Present Value: 21,463,877$ Total (76,612,989)$ 92,927,826$ 151,112,535$ 167,427,373$

Hurdle Rate: 12.00%

NPV Rate: 12.00% Unleveraged Internal Rate of Return: 14.71%

Unleveraged Net Present Value: 13,882,984$

Hurdle Rate: 12.00%

NPV Rate: 12.00%


VII. FACULTY ADVISOR

Al Tetrault

Al Tetrault has more than 40 years of experience in real estate development, construction, financial analysis and public policy planning. He has provided a wide range of real estate services for residential, commercial, retail, institutional, and industrial developments for both public and private sector clients. Work includes real estate development consultancy, financial analysis, project feasibility analysis, tax credit services, construction and construction process consultancy, financing, placement of tax credits, residential/commercial/retail/industrial rehabilitation, low and moderate income housing development, historic property development, due diligence assessments, loan underwriting, and real estate organizational operations assessment and real estate development training.

As the Principal of Tetrault & Associates LLC Vienna, Virginia, he was responsible for all aspects of a national planning and real estate development consulting company with a special commitment to urban marketplaces.

After 20+ years as Principal of TA-LLC, Mr. Tetrault retired in December of 2012. He was appointed to the staff of the University of Maryland’s Colvin Institute of Real Estate Development in January 2013.

Mr. Tetrault received a Master of Urban and Environmental Planning Degree from the University of Virginia, a Master of Business Administration from American University and a Bachelor of Science in Business Administration from American University.


VIII. CONSULTANTS

Michael Nicolaus, Senior VP, HKS Lindsey Waters, Associate, HKS

James H. Molloy III, Executive VP Capital Markets, JLL Bill Prutting, Managing Director Capital Markets, JLL Kurt Hagland, Managing Director, JLL

Pat LaVoy, Project Manager, MHG

Thomas Rathburn, First VP, Tishman

Kristi Smith, VP Development, JBG Companies

Austin Cates, Relationship Manager, PNC Real Estate

parc 7 at greensboro station

Documents

development plan

sf of office

sf hotel

sf of retail

sf of condominiums

design plan

sf of community space

sf of multifamily rentals