Capstone rfp component ii updated by Katya Hristova

The Micro Unit

LA PETIT MAISON

CAPSTONE 2016

La Petit Maison

THE MICRO UNIT DEVELOPMENT DEVELOPMENT TEAM: MARK MCKENZIE JOHN JANKUSKA KATYA HRISTOVA

MJK Ventures gratefully acknowledges the support of Auburn University MRED Program in preparation of this RFP.

COMPONENT II: FINANCIAL PROPOSAL

TABLE OF CONTENTS LETTER OF INTENT…………………………………………………………………..2 PURCHASE AND SALE AGREEMENT…………………………………………….4 PROPOSER, OFFICERS AND OWNERS…….……………………………………5 AUTHORIZED CLERK’S CERTIFICATE…………………………………...………..6 PROJECT FINANCIAL PROJECTIONS………………………………….………..7 DEVELOPMENT BUDGET………………………………………………….7 OPERATING PRO-FORMA………………………………………………..8 FEASIBILITY ANALYSIS…………………………………………………….13 PROJECT FINANCING / CAPITAL STACK.…………………………………….14 PROPOSED DEAL STRUCTURE…………………………………………………..15 PROPOSER FINANCIAL STATEMENT OF OWNERS………...…………………17 FINANCIAL TABLES…………………………………………………..APPENDIX A COMPLETE PSA…………………………………………………..…..APPENDIX B 1

1. Letter of Intent April 15, 2016 Mr. Allen Morris Allen Morris Company (AMC) Coral Gables, FL

Dear Mr. Morris: On behalf of MJK Ventures LLC, we are pleased to present the Financial Component of the Request for Proposal for the Atlanta Midtown West Development. MJK Ventures LLC is a sole purpose entity formed specifically to address the needs of this project. MJK Ventures is a subsidiary of MJK Development Enterprises. It is the intent of MJK Ventures to purchase the assembled parcels from the Allen Morris Company and aggressively move forward with the contained development plans for the site in accordance with the RFP. As stated below in the Purchase and Sales Agreement, MJK offers to purchase the parcels from AMC at the price of $12,090,784. The offer includes a $20,000 Fee Deposit upon offer date. An additional $20,000 Selection Deposit will be made immediately upon completion of 120 day due diligence period. At that point closing date will be set for on or before December 30, 2016. Due diligence documentation will be provided within the appropriate time schedule detailed in the Purchase and Sale Agreement. Sellerâ&#x20AC;&#x2122;s Warranties and Representations are requested upon acceptance of the offer. Along with the Purchase and Sale Agreement, the Financial Component consist of MJKâ&#x20AC;&#x2122;s officer and owners list as well as their respective financial statements, complete project financial projections including development budget and 10year operating pro-forma, project equity and debt financing, alternative financial proposal, and other financial questions and answers. Thank for the opportunity to present this Financial Component of the Request for Proposal and the enclosed Purchase and Sale Agreement. We request that consideration and acceptance of our offer be completed by April 30, 2016.

MJK Ventures is confident that AMC will find this offer, Financial Component, and overall Request for Proposal well planned, highly feasible, thorough, and in the best interest of all involved. We at MJK Ventures look forward to working with you Mr. Allen and the Allen Morris Company.

Sincerely, Mark McKenzie Chief Financial Officer, MJK Ventures LLC

2. Purchase and Sales Agreement

(Complete Purchase and Sale Agreement EXHIBIT B Attached; 7 Pages)

3. Proposer, Officers & Owners

PROPOSER MJK Ventures, a Limited Liability Company 480 N. Orange Ave Orlando, FL 32801 407-491-1818

MJK Ventures, LLC is a sole purpose entity formed specifically to address the needs of this project. MJK Ventures is a subsidiary of MJK Development and Enterprises. Our team brings together extensive experience in complex mixeduse master planned development, and it includes a real estate broker/ senior financial analyst, a general contractor and an architect. The team members are leaders in their area of expertise and have implemented their individual tasks in a manner, consistent with the overall concept of the project. OFFICERS AND OWNERS Katya Hristova, President 480 N. Orange Ave Orlando, FL 32801 407-491-1818 John Jancuska, CEO and Chief Construction Manager 1243 Pineknoll Drive Fairfax, VA 22030 703-851--270 Mark McKenzie, CFO and Broker 912 Lakeshore Ave Opelika, AL 36801 334-444-2625 All above managing members hold an equal share of 33.33% ownership each in MJK Ventures, LLC.

4. Authorized Clerkâ&#x20AC;&#x2122;s Signature

5. Project Financial Projections A. DEVELOPMENT BUDGET Materials and Labor DEMOLITION

Building 1 Building 2 Building 3 Building 4 Metal Canopy 1 Metal Canopy 2

Sq. Feet

38,522 8,252 1,800 10,518 441 5,532

$ Cost

Total

$2.00 $3.50 $3.50 $2.00 $1.25 $1.25

Materials and Labor ELEVATORS

$77,044 $28,882 $6,300 $21,036 $551 $6,915

Subtotal

$2.00 $8.00 $12.00 $6.00 $4.00 $250.00

Total

$1,000,000

ELECTRICAL

Tower Commerical Space Garage

750 $3,000.00 167,250 $14.00 400 $250.00

Subtotal

$2,250,000 $2,341,500 $100,000 $4,691,500

PLUMBING

Tower Commerical Space Swimming pool/ Community Space Subtotal

SITE WORK

1,705 17,050 8,525 200

$ Cost

$140,728

Dirt Rock Curbs/Gutters Sidewalk/Pavers Greenspace Trees/Vegetation

Sq. Feet

$50,000 $30,000 $20,460 $102,300 $34,100 $50,000

750

$600.00

$450,000 $172,200 $200,000 $822,200

HEATING AND A/C

Tower Commerical Space

280 $2,000.00

Subtotal

$300,000 $560,000 $860,000

SPRINKLERS

Subtotal

Tower Commerical Space

$286,860

STRUCTURE/FOUNDATION

Core Elevators 5 150000 Stairs 4,608 $25.00 Steel Package 167,250 $21.00 Concrete Floors 223,000 $5.00 Fireproofing 167,250 $2.25 Stairs/Steel/Concrete 780 $ 265.00 Subtotal

$200,000 $750,000 $115,200 $3,512,250 $1,115,000 $376,313 $206,700

20,940

$112,656 $123,920 $22,496 $350,000 $356,000 $110,313

Paint& Flooring RESTAURANT MISCELLANEOUS ITEMS

Crane Trailer Portable Johns Garbage Disposal

$774,780

GLASS

Solar Towers 176,385 Storefront Commercial 31,410 Subtotal

$85.00 $14,992,725 $40.00 $1,256,400

Subtotal FF&E Security System Culinary School Equipment

$16,249,125

GARAGE

Structure 232,500 Sprinkler System 232,500 Air Handling

$21.00 $3.50

Subtotal

20440 17192 16590 55750 55750 55750 112500

$5.00 $5.00 $5.00 $2.75 $2.75 $2.75 $5.00

$102,200 $85,960 $82,950 $153,313 $153,313 $153,313 $562,500 $100,000 $1,393,548

FINISHES

$1,075,385

$37.00

$724,500

Commerical Space-1st Fl Commerical Space-2nd Fl Commerical Space-3rd Fl Commerical Ceiling-1st Fl Commerical Ceiling-2nd Fl Commerical Ceiling-3rd Fl Tower Halls Tower Core Subtotal

PRECAST

Commercial

$139,125 $585,375

DRYWALL

$6,275,463

$8.00 $8.00 $8.00 $8.00 $8.00 $2.50

$3.50 $3.50

Subtotal

ROOFS

Tower 1 Roof 14,082 Tower 2 Roof 15,490 Restaurant Roof 2,812 Lower Roof Bradley Roof 43,750 Lower Roof Howell Roof 44,500 Green Space Add 44,125 Subtotal 164,759

39,750 167,250

227000 20000

$10.00 $150.00

$2,270,000 $3,000,000

18 90 400

$130,000 $250.00 $100.00 $400.00

$130,000 4500 9000 160000 $303,500 $576,657 $1,800,000 $130,000

$4,882,500 $813,750 $200,000 $5,896,250

Prefabricated Modules

Sq. Feet

Units

Cost Per Sq. Ft.

Cost Per Unit

1 Bedroom-Unit A 1 Bedroom-Unit B 1 Bedroom-Unit C

350 400 450

190 370 190

$165.00 $165.00 $165.00

57750 66000 74250

Storage Area

650

$45.00

2250

Totals:

Total Cost

$10,972,500 $24,420,000 $14,107,500 $1,462,500 $50,962,500

Subtotal Construction TI

$99,232,994 $1,690,000

TOTAL

$100,922,994

PSF

$126.10

B. OPERATING PRO-FORMA Le Petit Maison Financial Pro Forma Construction Phase Net Operating Income Apartments Office Retail Storage Hotel Parking Net Operating Income (before Management) Management Fee Total Net Operating Income Development Costs Land Acquisition Remediation Permits, etc Utilities Apartments Office Retail Storage Hotel Parking Contingency Legal Fees/Closing Architect Fees LEED Commissioning Landscape/Engineering Fees General Contractor Fee Construction Management Bonding Advertising/Model Unit Development Fees Total Development Costs Total Net Operating Income Financing Before Tax Cash Flow Amorization Capital Reserve Depreciation Taxable Income Tax Payable Green Tax Credit Annual Cash Flow Equity In Asset Value Cost of Sale

2017

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

$ 2,103,436 $ 446,648 $ 1,120,763 $ 338,975 $ 748,250 $ 1,321,357 $ 6,079,428 $ (121,589) $ 5,957,839

$ 3,619,353 $ 589,838 $ 1,426,610 $ 432,773 $ 1,042,440 $ 1,853,203 $ 8,964,218 $ (179,284) $ 8,784,934

$ 4,726,029 $ 738,577 $ 1,744,244 $ 530,188 $ 1,348,098 $ 2,405,795 $ 11,492,931 $ (229,859) $ 11,263,072

$ 4,820,549 $ 753,349 $ 1,779,128 $ 540,792 $ 1,375,060 $ 2,453,911 $ 11,722,789 $ (234,456) $ 11,488,334

$ 4,916,960 $ 768,416 $ 1,814,711 $ 551,607 $ 1,402,561 $ 2,502,989 $ 11,957,245 $ (239,145) $ 11,718,100

$ 5,015,300 $ 783,784 $ 1,851,005 $ 562,640 $ 1,430,613 $ 2,553,049 $ 12,196,390 $ (243,928) $ 11,952,462

$ 5,115,606 $ 799,460 $ 1,888,025 $ 573,892 $ 1,459,225 $ 2,604,110 $ 12,440,318 $ (248,806) $ 12,191,512

$ 5,217,918 $ 815,449 $ 1,925,786 $ 585,370 $ 1,488,409 $ 2,656,192 $ 12,689,124 $ (253,782) $ 12,435,342

$ 5,322,276 $ 831,758 $ 1,964,302 $ 597,078 $ 1,518,178 $ 2,709,316 $ 12,942,907 $ (258,858) $ 12,684,049

$ 5,428,722 $ 848,393 $ 2,003,588 $ 609,019 $ 1,548,541 $ 2,763,502 $ 13,201,765 $ (264,035) $ 12,937,730

$ 8,784,934 $ (6,528,806) $ 2,256,127 $ 1,440,268 $ 240,100 $ (3,093,295) $ 843,200 $ (295,120) $ 118,048 $ (5,176,442) $ (5,176,442) $ (2,071,798) $ 666,128

$ 11,263,072 $ (6,528,806) $ 4,734,266 $ 1,533,885 $ 240,100 $ (3,093,295) $ 3,414,956 $ (1,195,234)

$ 11,488,334 $ (6,528,806) $ 4,959,527 $ 1,633,588 $ 240,100 $ (3,093,295) $ 3,739,920 $ (1,308,972)

$ 11,718,100 $ (6,528,806) $ 5,189,294 $ 1,739,771 $ 240,100 $ (3,093,295) $ 4,075,870 $ (1,426,554)

$ 11,952,462 $ (6,528,806) $ 5,423,656 $ 1,852,856 $ 240,100 $ (3,093,295) $ 4,423,317 $ (1,548,161)

$ 12,191,512 $ (6,528,806) $ 5,662,705 $ 1,973,291 $ 240,100 $ (3,093,295) $ 4,782,802 $ (1,673,981)

$ 12,435,342 $ (6,528,806) $ 5,906,535 $ 2,101,555 $ 240,100 $ (3,093,295) $ 5,154,896 $ (1,804,213)

$ 12,684,049 $ (6,528,806) $ 6,155,242 $ 2,238,157 $ 240,100 $ (3,093,295) $ 5,540,204 $ (1,939,071)

$ 12,937,730 $ (6,528,806) $ 6,408,923 $ 2,383,637 $ 240,100 $ (3,093,295) $ 5,939,365 $ (2,078,778)

$ 2,219,721

$ 2,430,948

$ 2,649,315

$ 2,875,156

$ 3,108,821

$ 3,350,682

$ 3,601,132

$ 3,860,587

$ 10,067,838

$ 10,179,362

$ 10,291,546

$ 10,404,301

$ 10,517,531

$ 10,631,128

$ 10,744,977

$ 172,503,061 $ (10,350,184) $ 173,011,829

2.00%

2018

$ (12,090,784) $ (648,826) $ (706,461) $ (800,000) $ (62,974,608) $ (6,500,000) $ (13,000,000) $ (1,950,000) $ (9,688,401) $ (6,810,000) $ (5,153,915) $ (423,177) $ (2,164,644) $ (150,000) $ (1,082,322) $ (2,121,538) $ (2,121,538) $ (2,121,538) $ (100,000) $ (2,121,538) $ (132,729,293)

$ (53,091,717)

40%

$ 5,957,839 $ (5,176,442) $ (5,176,442) $ (6,528,806) $ (570,967) $ 1,352,364 $ 240,100 $ (3,093,295) $ (2,071,798) $ -

$ (53,091,717)

Carry Total Return

$ (53,091,717) $ (79,637,576) $ 10,343,103 $ (53,091,717)

Net Present Value of Total Return LIRR UIRR MoC

$ 37,144,679 18.66% 8.21% 3.94x

$ 5,957,839

$ 8,489,814

$ 3,886,041 $ 9,155,942 $ 12,287,559 $ 2,430,948 $ 2,649,315 $ 2,875,156 $ 3,108,821 $ 3,350,682 $ 3,601,132 $ 166,013,465

RoI (w/o carry) at stabilization RoI (w/carry) at stabilization

7.59% 7.04%

Levered Cash On Cash Return (at stabilization, Y3)

8.9%

The above Operating Pro-forma Summary combines all revenues and development costs of each of the six uses within La Petit Maison and represents these projections over a 10-year period. Stabilization is forecasted at the 36month point after completion of construction and reversion of the property at the end of 10 years. Project estimates a total development cost of $132,729,293. Positive cash flow is realized on each year after Year 1. The Net Present Value over the life of the project stands at $37,144,679 with an Internal Rate of Return of 18.66%. Return on Investment and Levered Cash on Cash Equity Return at stabilization Year 3 are 7.59% and 8.9% respectively. There are six product types to be included within the entire project, each with its own favorable financial projections: micro-apartments, co-work office space, retail, storage, hotel, and parking. With the micro-unit being a newer trend in major urban areas and no exact product type to directly compare in the Atlanta area, rate analysis was

approached from more than one angle. This may be seen in more detail in the Market Analysis data tables. First, nearby studio and one-bedroom apartment data was gathered and found to average $2.03 per square foot. Next, larger 2-bedroom units were analyzed arriving at a $1.82 average rate per square foot. By using the ratio between the differences in average rates versus differences in average square footage, a baseline was established to project the average potential rate that a micro-unit may demand. From this point, in order to establish a better understanding of the micro-unit market nationwide, comparable product was examined in New York, Washington DC, and Seattle. Seattle by far has the largest number of micro-units of different variety with 782 units currently online and another 1598 planned. The Seattle comps were compiled to achieve an average rate and the Consumer Price Index was applied to arrive at a higher than above projected average rate for Atlanta of $2.70 per square foot. Taking this concept a step farther, the inclusion of utilities into the rental price was evaluated again with the Consumer Price Index applied. Comparing these rates with Seattle and Washing DC generated comps at over $1.00 more per square foot of $4.17 and $3.94 respectively while the utilities only increased cost by $0.25 per square foot. With these considerations, a conservative rate below comps has been chosen at $3.00 per square foot including all utilities. Assuming stabilization at 36 months after completion produces a Net Operating Income on the apartments of $4,726,029 at the end of Year 3. La Petit Maison - Micro Units Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

factors Revenue Assumptions Inflation Factor Units Average Unit Size Monthly Rent/SF Occupancy Factor

2% 650 650 650 650 650 650 650 650 650 650 400 400 400 400 400 400 400 400 400 400 $ 3.00 $ 3.06 $ 3.12 $ 3.18 $ 3.25 $ 3.31 $ 3.38 $ 3.45 $ 3.51 $ 3.59 50.00% 75.00% 92.20% 92.20% 92.20% 92.20% 92.20% 92.20% 92.20% 92.20%

Net Operating Income Gross Lease Revenues Annual Operating Expenses 38.25% Utilities Total Net Operating Income

$ 4,680,000 $ (1,790,100) $ (786,464) $ 2,103,436

$ 7,160,400 $ (2,738,853) $ (802,193.58) $ 3,619,353

$ 8,978,569 $ (3,434,303) $ (818,237.45) $ 4,726,029

$ 9,158,140 $ (3,502,989) $ (834,602.20) $ 4,820,549

$ 9,341,303 $ (3,573,048) $ (851,294.24) $ 4,916,960

$ 9,528,129 $ (3,644,509) $ (868,320.13) $ 5,015,300

$ 9,718,692 $ (3,717,400) $ (885,686.53) $ 5,115,606

$ 9,913,065 $ (3,791,748) $ (903,400.26) $ 5,217,918

$ 10,111,327 $ (3,867,582) $ (921,468.27) $ 5,322,276

$ 10,313,553 $ (3,944,934) $ (939,897.63) $ 5,428,722

$ -

$ 2,103,436

$ 3,619,353

$ 4,726,029

$ 4,820,549

$ 4,916,960

$ 5,015,300

$ 5,115,606

$ 5,217,918

$ 5,322,276

Net Cash Flow

$ (62,974,608) $ $ (62,974,608) $ 2,103,436

$ $ 3,619,353

$ $ 4,726,029

$ $ 4,820,549

$ $ 4,916,960

$ $ 5,015,300

$ $ 5,115,606

$ $ 5,217,918

$ $ 5,322,276

$ 5,428,722 $ 72,382,953 $ (4,342,977) $ $ 73,468,698

Net Present Value Unleaveraged IRR

$ 2,804,578 7.64%

Development Costs Construction Other Total Development Costs

$ (62,974,608) $ $ (62,974,608) $ -

Annual Cash Flow Net Operating Income Asset Value Cost of Sale Development Costs

*Stabilization

Co-work office space is an interesting trend nationally in the commercial office market. This concept is not limited to entrepreneurs and startups as a number of corporate entities in major cities have begun to embrace this type of work environment to accommodate their younger workforceâ&#x20AC;&#x2122;s preferences while enjoying more manageable leasing arrangements. CBRE Atlanta Office Marketview 4Q2015 Total Inventory Vacancy Rate Midtown 14,766,641 Midtown West 478,665 Totals 15,245,306

YTD Net Under Available Inventory Absorbtion Constructio 15.8% 2,333,129 546,042 0 5.8% 27,763 14,511 0 10.8% 2,360,892 560,553 0

Gross Lease Rate SF/Yr $ 27.20 $ 22.50 $ 24.85

Cowork Office Space Midtown Desk Office1 $ 370 $ 725 $ 220 $ 350 $ 400 $ 600 $ 275 $ 450 $ 260 $ 250 $ 700 Average Cost $ 296 $ 565 Estimated SF 100 100 Average Rates(SF/year) $ 35.50 $ 67.80 Combined Average Rates (SF/Year) $ 50.13 Assumption of 100sf per desk space including amentiy space. Industrious Office Berthold Building Atlanta Tech Village Strongbox west Experience Rethink 5-Points Cowork

Office2 Office3 Office4 Office5 $ 1,025 $ 1,450 $ 1,700 $ 2,000 $ 450 $ 1,000 $ 850 $ 1,100 $ 1,420 $ 1,775

$ 1,200 $ 1,700 $ 881 $ 1,313 $ 1,560 $ 1,888 200 300 400 500 $ 52.88 $ 52.50 $ 46.80 $ 45.30 (Data compiled from current online offerings.)

As can be seen above, co-work office space is producing rental rates averaging twice as much as standard office space. This is of course not without an increase in expenses for the shared space but still produces an attractive net rate. Again staying conservatively under the comp rates, La Petit Maison co-work space will be offered at $45 per square foot annually generating a projected overall 14.01% unleveraged IRR and a Net Operating Income of $738,577 at Year 3 stabilized with only 39,000 square feet of Net Rentable Area.

Using the standard market rental rates the Retail section of the project is projected to produce an overall 16.85% unleveraged IRR and a Net Operating Income at Year 3 Stabilization of $1,744,244. La Petit Maison - Retail Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Factors Assumptions Inflation Factor GLA Absorbed Net Rentable Area Vacancy Factor Net Lease Revenue per s.f. Net Operating Income Leasing Revenues Operating Expenses Net Operating Income

2% sf 90%

86,667 86,667 86,667 86,667 86,667 86,667 86,667 86,667 86,667 86,667 78000 78000 78000 78000 78000 78000 78000 78000 78000 78000 39.50% 24.500% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% $ 25.00 $ 25.50 $ 26.01 $ 26.53 $ 27.06 $ 27.60 $ 28.15 $ 28.72 $ 29.29 $ 29.88

$ 1,179,750 $ 1,501,695 $ 1,836,046 $ 1,872,767 $ 1,910,222 $ 1,948,427 $ 1,987,395 $ 2,027,143 $ 2,067,686 $ 2,109,040 $ (58,988) $ (75,085) $ (91,802) $ (93,638) $ (95,511) $ (97,421) $ (99,370) $ (101,357) $ (103,384) $ (105,452) $ 1,120,763 $ 1,426,610 $ 1,744,244 $ 1,779,128 $ 1,814,711 $ 1,851,005 $ 1,888,025 $ 1,925,786 $ 1,964,302 $ 2,003,588

5.00%

Development Costs Construction Costs Other Total Development Costs Annual Cash Flow Net Operating Income Asset Value Costs of Sale Total Development Costs Net Cash Flow Net Present Value Unleaveraged IRR

$ (13,000,000) $ $ (13,000,000) $ -

$ -

$ 1,120,763

$ 1,426,610

$ 1,744,244

$ 1,779,128

$ 1,814,711

$ 1,851,005

$ 1,888,025

$ 1,925,786

$ 1,964,302

$ 2,003,588 $ 26,714,502 $ (1,602,870)

$ (13,000,000) $ (13,000,000) $ 1,120,763

$ 1,426,610

$ 1,744,244

$ 1,779,128

$ 1,814,711

$ 1,851,005

$ 1,888,025

$ 1,925,786

$ 1,964,302

$ 27,115,219

$ 10,982,169 16.85%

*Stabilization

The storage component of the project will provide a sufficient number of units to accommodate all of the micro-units offered separately if tenants so choose to lease. The remaining units will be marketed to the general public. The Net Rentable Area of 32,500 square feet is projected to produce an overall 30.94% unleveraged IRR and $530,188 Net Operating Income at Year 3 Stabilization. La Petit Maison - Storage Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Factors Assumptions Inflation Factor GLA Absorbed Net Rentable Area Vacancy Factor Net Lease Revenue per s.f.

2% sf 75%

43,333 43,333 43,333 43,333 43,333 43,333 43,333 43,333 43,333 43,333 32500 32500 32500 32500 32500 32500 32500 32500 32500 32500 40.40% 25.400% 10.40% 10.40% 10.40% 10.40% 10.40% 10.40% 10.40% 10.40% $ 25.00 $ 25.50 $ 26.01 $ 26.53 $ 27.06 $ 27.60 $ 28.15 $ 28.72 $ 29.29 $ 29.88

Net Operating Income Leasing Revenues Operating Expenses 30.00% Net Operating Income Development Costs Construction Costs Other Total Development Costs Annual Cash Flow Net Operating Income Asset Value Costs of Sale Total Development Costs Net Cash Flow Net Present Value Unleaveraged IRR

$ 484,250 $ 618,248 $ 757,411 $ 772,559 $ 788,011 $ 803,771 $ 819,846 $ 836,243 $ 852,968 $ 870,027 $ (145,275) $ (185,474) $ (227,223) $ (231,768) $ (236,403) $ (241,131) $ (245,954) $ (250,873) $ (255,890) $ (261,008) $ 338,975 $ 432,773 $ 530,188 $ 540,792 $ 551,607 $ 562,640 $ 573,892 $ 585,370 $ 597,078 $ 609,019

$ (1,950,000) $ $ (1,950,000)

$ 338,975

$ 432,773

$ 530,188

$ 540,792

$ 551,607

$ 562,640

$ 573,892

$ 585,370

$ 597,078

$ 609,019 $ 8,120,256 $ (487,215)

$ (1,950,000) $ (1,950,000) $ 338,975

$ 432,773

$ 530,188

$ 540,792

$ 551,607

$ 562,640

$ 573,892

$ 585,370

$ 597,078

$ 8,242,059

$ 3,765,542 30.94%

*Stabilization

The 100-unit Hotel is also a strong component of La Petit Maison. It is projected to produce a Net Operating Income of $1,348,098 at Year 3 Stabilization and an overall unleveraged IRR of 17% while offering a lower than average market rate starting at only $100 per night. La Petit Maison - Hotel Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

factors Assumptions Inflation Factor Rooms Vacancy Factor Occupancy Factor Average Daily Room Rate Net Operating Income Room Revenues Other Revenues Operating Expenses Total Net Operating Income

2% 100 100 100 100 100 100 100 100 100 100 59% 44% 29% 29% 29% 29% 29% 29% 29% 29% 41% 56% 71% 71% 71% 71% 71% 71% 71% 71% $ 100 $ 102.00 $ 104.04 $ 106.12 $ 108.24 $ 110.41 $ 112.62 $ 114.87 $ 117.17 $ 119.51

$ 1,496,500 50%

$ 2,084,880

$ 2,696,197

$ 2,750,121

$ 2,805,123

$ 2,861,225

$ 2,918,450

$ 2,976,819

$ 3,036,355

$ 3,097,082

$ (748,250) $(1,042,440) $(1,348,098) $(1,375,060) $(1,402,561) $(1,430,613) $(1,459,225) $(1,488,409) $(1,518,178) $ (1,548,541) $ 748,250 $ 1,042,440 $ 1,348,098 $ 1,375,060 $ 1,402,561 $ 1,430,613 $ 1,459,225 $ 1,488,409 $ 1,518,178 $ 1,548,541

Development Costs Construction Other Total Development Costs Annual Cash Flow Net Operating Income Asset Value Costs of Sale Total Development Costs Net Cash Flow Net Present Value Unleveraged IRR Before Taxes

$ (9,688,401) $ $ $ $ (9,688,401) $ -

$ $ $ -

$ 748,250

$ 1,042,440

$ 1,348,098

$ 1,375,060

$ 1,402,561

$ 1,430,613

$ 1,459,225

$ 1,488,409

$ 1,518,178

$ (9,688,401) $ $ (9,688,401) $ 748,250

$ $ 1,042,440

$ $ 1,348,098

$ $ 1,375,060

$ $ 1,402,561

$ $ 1,430,613

$ $ 1,459,225

$ $ 1,488,409

$ $ 1,518,178

$ 1,548,541 $ 20,647,216 $ (1,238,833) $ $ 20,956,924

$5,650,626 17%

*Stabilization

Last and certainly not least comes the parking deck. The deck consist of the required by zoning 757 stalls. These will all be leased parking spaces to be utilized by the tenants, the hotel, the offices, and the retail as well as the general public in the area. A high profit generator for the development, the parking deck projects a huge Net Operating Income of $2,405,795 at Year 3 Stabilization and a 36.79% unleveraged IRR. La Petit Maison - Stucture Parking Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Factors Assumptions Inflation Factor GLA Absorbed Net Rentable Area Stalls Occupancy Factor Average Rate Per Stall Per Day

2% sf 75%

227,000 227,000 227,000 227,000 227,000 227,000 227,000 227,000 227,000 227,000 170,250 170,250 170,250 170,250 170,250 170,250 170,250 170,250 170,250 170,250 757 757 757 757 757 757 757 757 757 757 40% 55% 70% 70% 70% 70% 70% 70% 70% 70% $ 17.09 $ 17.43 $ 17.78 $ 18.13 $ 18.50 $ 18.87 $ 19.24 $ 19.63 $ 20.02 $ 20.42

Net Operating Income Leasing Revenues Operations and Maintenance Expenses Net Operating Income

$ 1,887,653 $ 2,647,433 $ 3,436,850 $ 3,505,587 $ 3,575,699 $ 3,647,213 $ 3,720,157 $ 3,794,560 $ 3,870,451 $ 3,947,860 $ (566,296) $ (794,230) $ (1,031,055) $ (1,051,676) $ (1,072,710) $ (1,094,164) $ (1,116,047) $ (1,138,368) $ (1,161,135) $ (1,184,358) $ 1,321,357 $ 1,853,203 $ 2,405,795 $ 2,453,911 $ 2,502,989 $ 2,553,049 $ 2,604,110 $ 2,656,192 $ 2,709,316 $ 2,763,502

30%

Development Costs Construction Costs Other Total Development Costs

$ (6,810,000) $ $ (6,810,000)

Annual Cash Flow Net Operating Income Asset Value Costs of Sale Total Development Costs Net Cash Flow Net Present Value Unleaveraged IRR

$ 1,321,357

$ 1,853,203

$ 2,405,795

$ 2,453,911

$ 2,502,989

$ 2,553,049

$ 2,604,110

$ 2,656,192

$ 2,709,316

$ 2,763,502 $ 36,846,695 $ (2,210,802)

$ (6,810,000) $ (6,810,000) $ 1,321,357

$ 1,853,203

$ 2,405,795

$ 2,453,911

$ 2,502,989

$ 2,553,049

$ 2,604,110

$ 2,656,192

$ 2,709,316

$ 37,399,396

$ 18,677,466 36.79%

*Stabilization

C. Feasibility Analysis â&#x20AC;&#x201C; Individual Uses, Effective, & Residual Land Value HURDLE RENT/FEASIBILITY (MULTI-FAMILY) HURDLE RENT/FEASIBILITY (COWORK OFFICE) Total Development Cost $62,974,608 Total Development Cost $6,500,000 Cap Rate (direct) 5.47% Cap Rate (direct) 6.80% Required NOI $3,444,711 Required NOI $442,000 Operating Expense Ratio 38% Operating Expense Ratio 50% Operating Expenses $2,133,768 Operating Expenses $442,000 Effective Gross Revenue $5,578,479 Effective Gross Revenue $884,000 Expected Vacancy Rate (frictional) 7.8% Expected Vacancy Rate (frictional) 19.1% Vacancy Allowance $6,050,412 Vacancy Allowance $1,092,707 Load Factor 25.0% Load Factor 10.0% Potential Gross Revenue $4,537,809 Potential Gross Revenue $983,436 Building Area (SF) 260,000 Building Area (SF) 39,000 HURDLE RENT (Multi-family) $1.45 HURDLE RENT (Office) $25.22 Market Rent ($/sf/month) $2.31 Market Rent ($/sf/year) $50.13 FEASIBLE??? YES FEASIBLE??? YES

HURDLE RENT/FEASIBILITY (STORAGE) Total Development Cost $1,950,000 Cap Rate (direct) 6.25% Required NOI $121,875 Operating Expense Ratio 30% Operating Expenses $52,232 Effective Gross Revenue $174,107 Expected Vacancy Rate (frictional) 10.4% Vacancy Allowance $194,316 Load Factor 25.0% Potential Gross Revenue $145,737 Building Area (SF) 32,500 HURDLE RENT (Storage) $4.48 Market Rent ($/sf/year) $25.22 FEASIBLE??? YES

HURDLE RENT/FEASIBILITY (HOTEL) Total Development Cost $9,688,401 Cap Rate (direct) 8.07% Required NOI $781,854 Operating Expense Ratio 50% Operating Expenses $781,854 Effective Gross Revenue $1,563,708 Expected Vacancy Rate (frictional) 29.0% Vacancy Allowance $2,202,406 Load Factor 25.0% Potential Gross Revenue $1,651,804 Building Area (SF) 40,000 HURDLE RENT (Hotel) $41.30 Market Rent ($/sf/year) $118.63 FEASIBLE??? YES

HURDLE RENT/FEASIBILITY (EFFECTIVE) Total Development Cost $132,729,293 Cap Rate (direct) 6.64% Required NOI TDC*Cap Rate $8,815,517 Operating Expense Ratio 33.3% Operating Expenses (NOI/1-OER)-NOI $4,397,577 Effective Gross Revenue NOI/(1-OER) $13,213,094 Expected Vacancy Rate (frictional) 9.2% Vacancy Allowance EGR/(1-Vac Rate) $14,558,546 Load Factor 22.6% Potential Gross Revenue $11,273,627 Building Area (SF) 619,750 HURDLE RENT (Total) PGR/Area $18.19 Effective Market Rent ($/sf/year) $32.77 FEASIBLE??? YES

RESIDUAL LAND ANALYSIS Net Operating Income $11,263,072 Cap Rate (direct) 6.64% Total Market Value $169,580,487 Total Development Costs w/o Land $118,416,970 Development Margin $2,368,339 RESIDUAL LAND VALUE $48,795,178 Land Cost $12,090,784 Land Residual (Deficit) Over Cost Residual

HURDLE RENT/FEASIBILITY (RETAIL) Total Development Cost $13,000,000 Cap Rate (direct) 7.24% Required NOI $941,200 Operating Expense Ratio 5% Operating Expenses $49,537 Effective Gross Revenue $990,737 Expected Vacancy Rate (frictional) 9.5% Vacancy Allowance $1,094,737 Load Factor 10.0% Potential Gross Revenue $985,263 Building Area (SF) 78,000 HURDLE RENT (Retail) $12.63 Market Rent ($/sf/year) $26.29 FEASIBLE??? YES

HURDLE RENT/FEASIBILITY (PARKING) Total Development Cost $6,810,000 Cap Rate (direct) 7.86% Required NOI $535,266 Operating Expense Ratio 30% Operating Expenses $229,400 Effective Gross Revenue $764,666 Expected Vacancy Rate (frictional) 30.0% Vacancy Allowance $1,092,380 Load Factor 25.0% Potential Gross Revenue $819,285 Building Area (SF) 170,250 HURDLE RENT (Parking) $4.81 Market Rent ($/sf/year) $20.79 FEASIBLE??? YES

Feasibility has been calculated and confirmed for each individual use based on current market conditions including direct capitalization rates, market rents, and average vacancy rates. These individual results are then combined to arrive at an effective direct cap rate of 6.64%, effective vacancy rate of 9.2%, and an overall hurdle rent of $18.19 per square foot/year. The Residual Land Value is then computed at $48,795,178 based on the 36-month Projected Stabilized Net Operating Income and using the effective direct cap rate.

6. Project Financing / Capital Stack La Petit Maison Permanent Loan Schedule

Loan Amount Term Rate

$ 79,637,576 25 6.50%

Debt Service Coverage Ratio

2017 2018 2019 2020 Payment $6,528,806 $6,528,806 Amortization $ 1,352,364 $ 1,440,268 Interest $ 5,176,442 $ 5,176,442 $ 5,176,442 $ 5,088,539 Year Balance $ 78,285,212 $ 76,844,944 Reserve $2,081,580 1.25 1.37

2021 2022 2023 2024 2025 2026 2027 2028 $6,528,806 $6,528,806 $6,528,806 $6,528,806 $6,528,806 $6,528,806 $6,528,806 $6,528,806 $ 1,533,885 $ 1,633,588 $ 1,739,771 $ 1,852,856 $ 1,973,291 $ 2,101,555 $ 2,238,157 $ 2,383,637 $ 4,994,921 $ 4,895,219 $ 4,789,036 $ 4,675,951 $ 4,555,515 $ 4,427,251 $ 4,290,650 $ 4,145,170 $ 75,311,059 $ 73,677,472 $ 71,937,701 $ 70,084,845 $ 68,111,554 $ 66,009,998 $ 63,771,842 $ 61,388,205 1.76

1.80

La Petit Maison Sources and Uses Total SF Construction/Perm Loan Equity

Sources Construction/Perm Loan Equity Sponsor Investor

1.83

1.87

800,333 60% 40%

Amount Per SF $ 79,637,576 $ 53,091,717 10% $ 5,309,172 90% $ 47,782,546

Total Sources

$ 132,729,293

Uses Land Acquisition Construction Hard Cost Construction Soft Cost

Amount Per SF $ 12,090,784 $ 100,923,009 $ 19,715,500

Total Uses

$ 132,729,293

1.91

1.94

1.98

2.02

Proposed project financing is one continuous loan with a two-year interest-only portion to cover the construction phase and converting to a permanent structure beginning in 2019. The proposed Loan-to-Value is 60% with 40% equity coming from sponsors and investors. The loan will be amortized for 25 years at 6.5% interest.

7. Proposed Deal Structure PRIMARY DEAL STRUCTURE La Petit Maison Partnership Returns NOI Construction Phase

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 $ (570,967) $ 2,256,127 $ 4,734,266 $ 4,959,527 $ 5,189,294 $ 5,423,656 $ 5,662,705 $ 5,906,535 $ 6,155,242 $ 6,408,923 $ $ (22,561) $ (47,343) $ (49,595) $ (51,893) $ (54,237) $ (56,627) $ (59,065) $ (61,552) $ (64,089) $ (53,091,717) $ (570,967) $ 2,233,566 $ 4,686,923 $ 4,909,932 $ 5,137,401 $ 5,369,419 $ 5,606,078 $ 5,847,470 $ 6,093,690 $ 6,344,834

Cash Flow After Debt Service Before Taxes 1% Asset Management Fee Cash Flow For Distribution Reversion Cost of Sale Mortgage Balance Total Equity Reversion Before Tax Total Cash Flow IRR Equity Contributions Investor Sponsor

$ 172,503,061 $ (10,350,184) $ (61,388,205) $ 100,764,673 $ (53,091,717) $ (570,967) $ 2,233,566

$ 4,686,923

$ 4,909,932

$ 5,137,401

$ 5,369,419

$ 5,606,078

$ 5,847,470

$ 6,093,690

$ 107,109,507

12.46%

90% 10%

$ 47,782,546 $ 5,309,172

Waterfall IRR Up to Between 8% and Over

Tier 1 Tier 2 Tier 3

Sponsor 8% 12% 12%

Investor 10% 25% 40%

90% 75% 60%

Construction Phase Tier 1 Accumulated Balance Investor Injections Investor Accruals Tier 1 Accrual Distribution End Balance Investor Cash Flow Sponsor Equity Cash Flow Sponsor Promote Cash Flow Total Remaining Cash To Distribute

Tier 2 Accumulated Balance Investor Injections Investor Accruals Tier 1 Accrual Distribution Tier 2 Accrual Distribution End Balance

$ 47,782,546 $ 41,524,501 $ (89,307,046) $ 90% $ 89,307,046 10% $ 9,923,005 0% $ 100% $ 47,192,967

$ 47,782,546 $ 77,909,260 $ (89,307,046) $ (35,822,951) $ 561,808

$ 47,782,546 $ $ $ 47,782,546

2019

2021

$ 53,802,989

2023

$ 4,418,939 $ 490,993 $ -

$ (570,967) $ -

$ -

$ 4,623,661 $ 513,740 $ -

$ 53,359,692

2025 $ 52,795,989

2026 $ 51,974,198

2027 $ 50,869,411

2028

$ 4,128,412 $ 4,297,868 $ 4,304,239 $ 4,295,063 $ 4,268,775 $ 4,223,679 $ 4,157,936 $ 4,069,553 $ 3,956,371 $ (2,010,210) $ (4,218,231) $ (4,418,939) $ (4,623,661) $ (4,832,477) $ (5,045,470) $ (5,262,723) $ (5,484,321) $ (53,411,015) $ 53,723,352 $ 53,802,989 $ 53,688,289 $ 53,359,692 $ 52,795,989 $ 51,974,198 $ 50,869,411 $ 49,454,643 $ $ 4,218,231 $ 468,692 $ -

$ 53,688,289

2024

$ 3,822,604 $ $ 51,605,149

$ 2,010,210 $ 223,357 $ -

$ 53,723,352

2022

$ 51,605,149

$ (47,782,546) $ $ $ $ $ $ -

2020

$ 47,782,546

$ 49,454,643

$ 4,832,477 $ 536,942 $ -

$ 5,045,470 $ 560,608 $ -

$ 5,262,723 $ 584,747 $ -

$ 5,484,321 $ 609,369 $ -

$ 53,411,015 $ 5,934,557 $ -

$ (0) $ -

$ -

$ 47,763,935

$ 47,782,546

$ 53,516,451

$ 57,928,216

$ 60,661,371

$ 63,521,796

$ 66,520,751

$ 69,670,764

$ 72,985,785

$ 76,481,356

$ 80,174,798

$ 47,782,546 $ $ $ $ 47,782,546

$ 5,733,905.46 $ $ $ 53,516,451

$ 6,421,974 $ (2,010,210) $ $ 57,928,216

$ 6,951,386 $ (4,218,231) $ $ 60,661,371

$ 7,279,364 $ (4,418,939) $ $ 63,521,796

$ 7,622,616 $ (4,623,661) $ $ 66,520,751

$ 7,982,490 $ (4,832,477) $ $ 69,670,764

$ 8,360,492 $ (5,045,470) $ $ 72,985,785

$ 8,758,294 $ (5,262,723) $ $ 76,481,356

$ 9,177,763 $ (5,484,321) $ $ 80,174,798

$ 9,620,976 $ (53,411,015) $ (35,822,951) $ 561,808

$ $ $ -

$ 35,822,951 $ 4,776,393 $ 7,164,590

Investor Cash Flow Sponsor Equity Cash Flow Sponsor Promote Cash Flow Total Remaining Cash To Distribute

75% $ 35,822,951 10% $ 4,776,393 15% $ 7,164,590 100% $ (570,967)

$ -

$ (570,967) $ -

$ -

$ (0) $ -

$ -

Tier 3 Investor Cash Flow Sponsor Equity Cash Flow Sponsor Promote Cash Flow Total Remaining Cash To Distribute

60% $ (342,580) $ 10% $ (57,097) $ 30% $ (171,290) $ 100% $ $ -

$ (342,580) $ $ (57,097) $ $ (171,290) $ -

$ $ $ -

$ (0) $ $ (0) $ $ (0) $ -

$ $ $ -

$ -

$ (53,091,717) $ (570,967) $ 2,233,566

$ 4,686,923

$ 4,909,932

$ 5,137,401

$ 5,369,419

$ 5,606,078

$ 5,847,470

$ 6,093,690

$ 107,109,507

$ (47,782,546) $ (342,580) $ 2,010,210

$ 4,218,231

$ 4,418,939

$ 4,623,661

$ 4,832,477

$ 5,045,470

$ 5,262,723

$ 5,484,321

$ 89,233,966

$ (5,309,172) $ (228,387) $ 223,357

$ 468,692

$ 490,993

$ 513,740

$ 536,942

$ 560,608

$ 584,747

$ 609,369

$ 17,875,541

Sponsor Cash Flow with Asset Management Fee and Development Fee $ (3,187,633) $ (228,387) $ 245,918 IRR 24.36% Net Cash Flow $ 18,914,931 Invested Equity $ 3,187,633 Cash Flow Multiplier 6.93x

$ 516,035

$ 540,588

$ 565,633

$ 591,178

$ 617,235

$ 643,812

$ 670,921

$ 17,939,630

$ -

RETURNS SUMMARY Total Project Cash Flow IRR Net Cash Flow Invested Equity Cash Flow Multiplier

12.46% $ 93,331,302 $ 53,091,717 2.76x

Investor Cash Flow IRR Net Cash Flow Invested Equity Cash Flow Multiplier

11.86% $ 77,004,871 $ 47,782,546 2.61x

Sponsor Cash Flow IRR Net Cash Flow Invested Equity Cash Flow Multiplier

16.69% $ 16,326,430 $ 5,309,172 4.08x

The above deal structure maps out the anticipated equity returns for both investors and sponsors. Equity contributions are set at 90% from Investors and 10% from Sponsors. Overall Before Tax Equity Internal Rate of Return is projected at 12.46%.

The Distributions are setup on a 3 Tiered Waterfall. Accruals and distributions will be calculated according to Waterfall and paid annually. Tier 1 pays a 10% return to Sponsors and a 90% return to Investors on IRR’s of up to 8%. Tier 2 pays a 10% return plus a15% Promote to Sponsors and a 75% return to Investors on IRR’s between 8% and 12%. Tier 3 pays a 10% return plus a 30% Promote to Sponsors and a 60% return to Investors on IRR’s over 12%. With the projected financial figures, Investors will realize an 11.86% IRR and $77,004,871 in Net Cash Flow from a $47,782,546 Equity Investment. This equals a Cash Flow Multiplier of 2.61.

ALTERNATIVE DEAL STRUCTURE One acceptable alternative to the deal structure would involve the Allen Morris Company entering into the equity investment with a portion or all of the land value. With current financial projections, the entire land value of $12,090,784 would provide AMC with a 22.77% equity share in the development. Based on the Investor Cash Flow IRR of 11.86% and Multiplier of 2.61, AMC could expect a projected Net Cash Flow of $31,556,947.

8. Proposer Financial Statements MJK Ventures LLC Combined Partners' Net Worth as of 12/31/2015 Assets Cash & Equivalents Checking Savings Money Markets Savings Bonds CD's Cash Value Insurance Other

Totals $ 125,500 $ 365,210 $ 2,000,500 $ 200,000 $ 1,385,000 $ 1,050,000 $ 1,461

Hristova $ 23,500 $ 52,560 $ 650,500 $ 150,000 $ 285,000 $ 350,000 $ 461

Jancuska $ 75,000 $ 207,650 $ 100,000 $ 50,000 $ 750,000 $ 200,000 $ -

McKenzie $ 27,000 $ 105,000 $ 1,250,000 $ $ 350,000 $ 500,000 $ 1,000

4,958,000 6,102,000 11,750,000 13,547,500

$ $ $ $

1,458,000 2,652,000 3,500,000 4,500,000

$ $ $ $

2,300,000 1,500,000 5,750,000 4,610,000

$ $ $ $

1,200,000 1,950,000 2,500,000 4,437,500

$ 2,670,000 $ 280,000 $ 62,215,015 $ 134,250 $ 102,275 $ $ 106,886,712 $ $ $ $ 56,228 $ -

$ $ $ $ $

1,500,000 280,000 62,215,015 31,750 34,775

$ $ $ $ $

875,000 85,000 55,000

$ $ $ $ $

295,000 17,500 12,500

77,683,562

$ 16,557,650

$ 12,645,500

$ $

35,728 -

$ $

18,000 -

$ $

2,500 -

$ $ $ $ $ $ $

950,000 152,000 4,250,000 1,750,000 41,985 5,000 25,000

$ $ $ $ $ $ $

250,000 26,000 47,000 40,000 15,000

$ $ $ $ $ $ $

190,889 2,315,730 55,000 15,000

396,000

2,579,119

Investment Assets Brokerage Accounts Retirement Accounts Business Ownership (Est.) Real Estate Owned (REO) in Portfolio

$ $ $ $

Assets in Use Primary Residence Vacation Home (Real Estate - PPE) Business Assets Vehicles (fractional interest included) Other (Collectibles, items of art, jewelry, etc.) Total Assets Liabilities Current Revolving Debt Other Long-Term Debts Home Mortgage Vacation Home REO Debt Business Indebtedness Auto Loans Student Loans Other

1,390,889 152,000 6,565,730 1,776,000 88,985 100,000 55,000

Total Liabilities

10,184,832

7,209,713

Net Worth

96,701,880

70,473,849

$ 16,161,650

$ 10,066,381

(See Appendix A for Individual Net Worth, Cash Flow, and REO Schedules.)

In the past ten years, no member of MJK Ventures, LLC has filed for or declared bankruptcy, been the subject of a foreclosure proceeding, defaulted on a loan, or been in default or terminated from a lease. No member of MLK Ventures, LLC has ever been prohibited from doing business with any government agency. No member of MJK Ventures, LLC has ever been convicted of a felony.

APPENDIX A: FINANCIAL TABLES

TABLE OF CONTENTS Full Financial Tables (Excel)………………...……………………………2 - 29

Le Petit Maison Financial Pro Forma

40%

Net Operating Income Apartments Office Retail Storage Hotel Parking Net Operating Income (before Management) Management Fee Total Net Operating Income Development Costs Land Acquisition Remediation Permits, etc Utilities Apartments Office Retail Storage Hotel Parking Contingency Legal Fees/Closing Architect Fees LEED Commissioning Landscape/Engineering Fees General Contractor Fee Construction Management Bonding Advertising/Model Unit Development Fees Total Development Costs Total Net Operating Income Financing Before Tax Cash Flow Amorization Capital Reserve Depreciation Taxable Income Tax Payable Green Tax Credit Annual Cash Flow

Construction Phase

2.00%

2017

2018

2019

2020

2021

2022

2023

2024

2025

$ 5,217,918 $ 815,449 $ 1,925,786 $ 585,370 $ 1,488,409 $ 2,656,192 $ 12,689,124 $ (253,782) $ 12,435,342

2026

$ 5,322,276 $ 831,758 $ 1,964,302 $ 597,078 $ 1,518,178 $ 2,709,316 $ 12,942,907 $ (258,858) $ 12,684,049

2027

$ 5,428,722 $ 848,393 $ 2,003,588 $ 609,019 $ 1,548,541 $ 2,763,502 $ 13,201,765 $ (264,035) $ 12,937,730

2028

$ 3,860,587

$ 12,937,730 $ (6,528,806) $ 6,408,923 $ 2,383,637 $ 240,100 $ (3,093,295) $ 5,939,365 $ (2,078,778)

$ 5,115,606 $ 799,460 $ 1,888,025 $ 573,892 $ 1,459,225 $ 2,604,110 $ 12,440,318 $ (248,806) $ 12,191,512

$ 12,684,049 $ (6,528,806) $ 6,155,242 $ 2,238,157 $ 240,100 $ (3,093,295) $ 5,540,204 $ (1,939,071)

$ 5,015,300 $ 783,784 $ 1,851,005 $ 562,640 $ 1,430,613 $ 2,553,049 $ 12,196,390 $ (243,928) $ 11,952,462

$ 3,350,682 $ 3,601,132

$ 12,435,342 $ (6,528,806) $ 5,906,535 $ 2,101,555 $ 240,100 $ (3,093,295) $ 5,154,896 $ (1,804,213)

$ 4,916,960 $ 768,416 $ 1,814,711 $ 551,607 $ 1,402,561 $ 2,502,989 $ 11,957,245 $ (239,145) $ 11,718,100

$ 12,191,512 $ (6,528,806) $ 5,662,705 $ 1,973,291 $ 240,100 $ (3,093,295) $ 4,782,802 $ (1,673,981)

$ 4,820,549 $ 753,349 $ 1,779,128 $ 540,792 $ 1,375,060 $ 2,453,911 $ 11,722,789 $ (234,456) $ 11,488,334

$ 11,952,462 $ (6,528,806) $ 5,423,656 $ 1,852,856 $ 240,100 $ (3,093,295) $ 4,423,317 $ (1,548,161)

$ 4,726,029 $ 738,577 $ 1,744,244 $ 530,188 $ 1,348,098 $ 2,405,795 $ 11,492,931 $ (229,859) $ 11,263,072

$ 2,649,315 $ 2,875,156 $ 3,108,821

$ 11,718,100 $ (6,528,806) $ 5,189,294 $ 1,739,771 $ 240,100 $ (3,093,295) $ 4,075,870 $ (1,426,554)

$ 3,619,353 $ 589,838 $ 1,426,610 $ 432,773 $ 1,042,440 $ 1,853,203 $ 8,964,218 $ (179,284) $ 8,784,934

$ 11,488,334 $ (6,528,806) $ 4,959,527 $ 1,633,588 $ 240,100 $ (3,093,295) $ 3,739,920 $ (1,308,972)

$ 2,103,436 $ 446,648 $ 1,120,763 $ 338,975 $ 748,250 $ 1,321,357 $ 6,079,428 $ (121,589) $ 5,957,839

$ 2,219,721 $ 2,430,948

$ 11,263,072 $ (6,528,806) $ 4,734,266 $ 1,533,885 $ 240,100 $ (3,093,295) $ 3,414,956 $ (1,195,234)

RoI (w/o carry) at stabilization RoI (w/carry) at stabilization

7.59% 7.04%

Levered Cash On Cash Return (at stabilization, Y3)

8.9%

$ 3,886,041 $ 9,155,942 $ 12,287,559 $ 2,430,948 $ 2,649,315 $ 2,875,156 $ 3,108,821 $ 3,350,682 $ 3,601,132 $ 166,013,465

$ 172,503,061 $ (10,350,184) $ 5,957,839 $ 8,489,814 $ 10,067,838 $ 10,179,362 $ 10,291,546 $ 10,404,301 $ 10,517,531 $ 10,631,128 $ 10,744,977 $ 173,011,829

$ 5,957,839 $ 8,784,934 $ (5,176,442) $ (5,176,442) $ (6,528,806) $ (6,528,806) $ (53,091,717) $ (570,967) $ 2,256,127 $ 1,352,364 $ 1,440,268 $ 240,100 $ 240,100 $ (3,093,295) $ (3,093,295) $ (2,071,798) $ 843,200 $ $ (295,120) $ 118,048 $ (5,176,442) $ (5,176,442) $ (2,071,798) $ 666,128 $ (53,091,717)

$ (53,091,717)

Equity In Asset Value Cost of Sale Carry Total Return

$ 37,144,679 18.66% 8.21% 3.94x

$ (53,091,717) $ (79,637,576) $ 10,343,103

Net Present Value of Total Return LIRR UIRR MoC

5x10

Residential Hotel Commercial

RESIDENTIAL Net Units (SF) # Units Gross (SF) 350 160 56,000 74,667 400 330 132,000 176,000 450 160 72,000 96,000 Sub-Total 650 260,000 346,667 STORAGE # Units Net Gross (SF) 50 650 32,500 43,333 PARKING Parking Area (SF) # Spaces Gross (SF) 300 468 140,400 300 72 21,600 300 217 65,000 757 227,000 Total

Sub-total

350 450

130 38 168 3,357

573,333 800,333

COMMERCIAL Per floor Area (NRSF) Area (GSF) 43,333 117,000 130,000 HOTEL 30 10,500 14,000 30 13,500 18,000 100 40,000 53,333

TOTAL Area (GSF) Total Built Area Including Parking BICYCLES Residential 1 per 5 DUs Commmercial 1 per 20 cars Total Bicycles Area per bike 20sf

ZONING REGULATIONS PROGRAM

FAR 3.2 7.2

BONUS AREA

TOTAL BUILDING AREA

Min Max

20% Open Space (NonRes) Terraces/Green Roofs Net Buildable Area 85% Max Bldg Coverage/ Ground Floor FAR (Residential) Total

20% of Bonus* Res + Bonus

Total Area Notes *Ground floor commercial bonus

25,951 25,000 75,604 64,263

415,210 717,624 24 225

12,853 38,558 453,767

756,182

Distance 1 mile 1 mile 3 mile 3 mile 5 mile 5 mile

N/A N/A N/A N/A N/A

Address Brady Ave and 11th 1120 Center St. NW, Atlanta GA 30318 11 Beverly Rd NE, Atlanta GA 30309 720 Bellemeade Ave NW, Atlanta GA 30318 493 Rankin St. NE, Atlanta GA 30308 916 Cumberland Rd. NE, Atlanta GA 30306 1475 Lanier Pl. NE, Atlanta GA 30306

Entitlement Efforts

Address Office Bldg. Site Atlanta, GA 30318 2282 Defoor Hills Rd NW Atlanta, GA 30318 803 Forrest St Atlanta, GA 30318 903 Huff Rd NW Atlanta, GA 30318 2041 Marietta Blvd NW Atlanta, GA 30318

Tenant (NNN) 1 Embassy International Worship Center 2 Atlanta Builders Supply Inc 3 Atlanta Safety Brake

Church Sales Comps - Loopnet.com Address 2639 Morris St. Atlanta, GA 30318 4330 Washington Rd. Atlanta, GA 30344 287 Augusta Avenue Atlanta, GA 30315

Size (SF)

Price ($000s)

MJK Research 129,753 9,749 16,500 6,703 3,484 76,230 13,068

Price ($000s)

Provided by RFP

Average Price

$180 $2,400 $640 $4,653 $500

Average Price

$365 $485 $159 $225 $1,200 $649

LAND EVALUATION

50% add on

Size (SF) 3,050 92,783 14,810 233,917 67,082

Use House of Worship Retail Auto Service

CASH FLOW EVALUATION Class Asset B C C

$220 $3,900 $910

Price ($000s) 2,152 72,000 9,164

Size (sf)

* Assuming 50% of NOI is allocated to lease payment. http://www.loopnet.com/Georgia/Atlanta_Churches-For-Sale/

PSF

$37 $29 $24 $65 $16 $50 $37 $73.51

$59 $26 $43 $20 $7 $31

Zoned Com Com Res Com Res Com Res

Zoned Com Com Com Com Com

NOI

Average Rate

$22,000 $390,000 $91,000

NR Area Rent($/sf, Y) 26,100 $4.26 6,100 $10.67 9,780 $13.34

Cap 10% 10% 10%

Type Land Land Land Land Land Land

Type Land Industrial Land Land Land

Land Cost $9,538,596

Uses Previously developed Class C Warehosue Previously developed Multifamily Retail

$4.26

$5.11 $2.71 $4.97

Total $111,233 $65,099 $130,465

NOI (psf) Lease (Y)* $10.22 $5.42 $9.93

Total NPV

1 2 3

2016 $111,233 $65,099 $130,465 $306,797 $2,552,188

$12,090,784 $12,090,784

2017 $114,570 $67,052 $134,379 $316,001

ACQUISION OF LAND/ IMPROVEMENTS $12,090,784.20

OFFERING JV

2018 $118,007 $69,064 $138,411 $325,481

2019 $121,547 $71,136 $142,563 $335,246

2020 $125,194 $73,270 $146,840 $345,303

2021 $128,950 $75,468 $151,245 $355,662

2022 $132,818 $77,732 $155,782 $366,332

2023 $136,803 $80,064 $160,456 $377,322

2024 $140,907 $82,466 $165,269 $388,642

2025 $145,134 $84,940 $170,227 $400,301

Le Petit Maison Feasibility Analysis HURDLE RENT/FEASIBILITY (MULTI-FAMILY) Total Development Cost $62,974,608 Cap Rate (direct) 5.47% Required NOI $3,444,711 Operating Expense Ratio 38% Operating Expenses $2,133,768 Effective Gross Revenue $5,578,479 Expected Vacancy Rate (frictional) 7.8% Vacancy Allowance $6,050,412 Load Factor 25.0% Potential Gross Revenue $4,537,809 Building Area (SF) 260,000 HURDLE RENT (Multi-family) $1.45 Market Rent ($/sf/month) $2.31 FEASIBLE??? YES

HURDLE RENT/FEASIBILITY (COWORK OFFICE) Total Development Cost $6,500,000 Cap Rate (direct) 6.80% Required NOI $442,000 Operating Expense Ratio 50% Operating Expenses $442,000 Effective Gross Revenue $884,000 Expected Vacancy Rate (frictional) 19.1% Vacancy Allowance $1,092,707 Load Factor 10.0% Potential Gross Revenue $983,436 Building Area (SF) 39,000 HURDLE RENT (Office) $25.22 Market Rent ($/sf/year) $50.13 FEASIBLE??? YES

RENTAL RATE

La Petit Maison Sensitivity Analysis

$ 30.99 $ 31.49 $ 31.99 $ 32.49 $ 32.99 $ 33.49 $ 33.99 $ 34.49 $ 34.99 $ 35.49 $ 35.99 $ 36.49 $ 36.99

5.64% 19.62% 19.72% 19.82% 19.92% 20.02% 20.12% 20.23% 20.33% 20.43% 20.54% 20.64% 20.74% 20.85%

Loan To Value

Varables For Analysis Blended Cap Rate Blended Rent Rate per SF/Year MF $ 36.00 Office $ 45.00 Retail $ 25.00 Storage $ 25.00 Hotel $ 91.25 Parking $ 20.79 Net Rentable Area Weighted Average, Blended Rent Rate Discounted Cash Flow $ (53,091,717) $ 3,886,041 $ 114,321 $ (53,091,717) $ 3,886,041 Leveraged IRR

18.66% 50% 52% 54% 56% 58% 60% 62% 64% 66% 68% 70%

5.64% 18.69% 18.33% 17.99% 17.68% 17.40% 17.13% 16.89% 16.66% 16.45% 16.25% 16.06%

5.89% 19.19% 19.29% 19.39% 19.49% 19.60% 19.70% 19.80% 19.91% 20.01% 20.12% 20.22% 20.33% 20.43%

6.14% 18.78% 18.88% 18.99% 19.09% 19.19% 19.30% 19.40% 19.51% 19.61% 19.72% 19.83% 19.93% 20.04%

6.39% 18.39% 18.49% 18.60% 18.70% 18.81% 18.91% 19.02% 19.13% 19.23% 19.34% 19.45% 19.56% 19.66%

6.64% Net Area Percentage of Net 260,000 41.95% 39,000 6.29% 78,000 12.59% 32,500 5.24% 40,000 6.45% 170,250 27.47% 619,750 $ 33.99

CAP RATE 6.64% 18.02% 18.12% 18.23% 18.33% 18.44% 18.55% 18.66% 18.76% 18.87% 18.98% 19.09% 19.20% 19.30%

6.89% 17.66% 17.77% 17.88% 17.98% 18.09% 18.20% 18.31% 18.41% 18.52% 18.63% 18.74% 18.85% 18.96%

7.14% 17.32% 17.43% 17.54% 17.65% 17.75% 17.86% 17.97% 18.08% 18.19% 18.30% 18.41% 18.52% 18.63%

7.39% 16.99% 17.10% 17.21% 17.32% 17.43% 17.54% 17.65% 17.76% 17.87% 17.98% 18.10% 18.21% 18.32%

7.64% 16.68% 16.79% 16.90% 17.01% 17.12% 17.23% 17.34% 17.45% 17.57% 17.68% 17.79% 17.90% 18.02%

7.89% 16.38% 16.49% 16.60% 16.71% 16.82% 16.94% 17.05% 17.16% 17.27% 17.39% 17.50% 17.61% 17.73%

6.64%

$ 33.99

$ 9,155,942 $ 12,287,559 $ 2,430,948 $ 2,649,315 $ 2,875,156 $ 3,108,821 $ 3,350,682 $ 3,601,132 $ 166,013,465 $ 269,352 $ 361,479 $ 71,514 $ 77,938 $ 84,582 $ 91,456 $ 98,571 $ 105,939 $ 11,026,160 $ 9,155,942 $ 12,287,559 $ 2,430,948 $ 2,649,315 $ 2,875,156 $ 3,108,821 $ 3,350,682 $ 3,601,132 $ 166,013,465 18.66%

5.89% 19.07% 18.71% 18.38% 18.08% 17.80% 17.53% 17.29% 17.07% 16.86% 16.66% 16.47%

6.14% 19.44% 19.09% 18.76% 18.46% 18.18% 17.92% 17.68% 17.46% 17.25% 17.06% 16.87%

6.39% 19.80% 19.45% 19.12% 18.83% 18.55% 18.30% 18.06% 17.84% 17.63% 17.44% 17.26%

CAP RATE 6.64% 20.15% 19.80% 19.48% 19.18% 18.91% 18.66% 18.42% 18.20% 18.00% 17.81% 17.63%

6.89% 20.48% 20.14% 19.82% 19.53% 19.26% 19.01% 18.78% 18.56% 18.36% 18.17% 17.99%

7.14% 20.81% 20.47% 20.15% 19.87% 19.60% 19.35% 19.12% 18.91% 18.71% 18.52% 18.34%

7.39% 21.13% 20.79% 20.48% 20.19% 19.93% 19.68% 19.45% 19.24% 19.04% 18.86% 18.69%

7.64% 21.44% 21.10% 20.80% 20.51% 20.25% 20.01% 19.78% 19.57% 19.37% 19.19% 19.02%

7.89% 21.74% 21.41% 21.10% 20.82% 20.56% 20.32% 20.10% 19.89% 19.69% 19.51% 19.34%

LTV 60% 0.6 Cap Rate 6.64% 0.0664 Discounted Cash Flow $ (53,091,717) $ 3,886,041 $ 9,155,942 $ 12,287,559 $ 2,430,948 $ 2,649,315 $ 2,875,156 $ 3,108,821 $ 3,350,682 $ 3,601,132 $ 166,013,465 $ 6,476,735.05 $ 15,259,903 $ 20,479,265 $ 4,051,580 $ 4,415,525 $ 4,791,926 $ 5,181,368 $ 5,584,470 $ 6,001,887 $ 11,023,294 $ (53,091,717) $ 3,886,041.03 $ 9,155,942 $ 12,287,559 $ 2,430,948 $ 2,649,315 $ 2,875,156 $ 3,108,821 $ 3,350,682 $ 3,601,132 $ 166,013,465 Leveraged IRR 18.66%

La Petit Maison Assumptions & Inputs Multi-family Gross Square Footage Units Average SF/Unit Monthly Rent/SF Vacancy Rate Operating Expenses Cost/Foot Cap Rate Direct Market Rent

346,667 650 400 $ 3.00 7.80% 38.25% $ 181.66 5.47% $ 2.31

Office- Cowork Space Gross Square Footage Units Average SF/Unit Annual Rent/SF Vacancy Rate Operating Expenses Cost/Foot Cap Rate Direct Market Rent

$ 45.00 19.10% 50.00% $ 150.00 6.80% $ 50.13

43,333 650 50 $ 25.00 10.40% 30.00% $ 45.00 6.25% $ 25.22

227,000 757 300 $ 17.09 30.00% 30.00% $ 30.00 7.86% $ 17.09

Retail Gross Square Footage Units Average SF/Unit Annual Rent/SF Vacancy Rate Operating Expenses Cost/Foot Cap Rate Direct Market Rent

$ 25.00 9.50% 5.00% $ 150.00 7.24% $ 26.29

Storage Gross Square Footage Units Average SF/Unit Annual Rent/SF Vacancy Rate Operating Expenses Cost/Foot Cap Rate Direct Market Rent

Hotel Gross Square Footage Units Average SF/Unit Average Nightly Rate Vacancy Rate Operating Expenses Cost/Foot Cap Rate Direct Market Rate

53,333 100 400 $ 100.00 29.00% 50.00% $ 181.66 8.07% $ 130.00

Parking Gross Square Footage Spaces Average SF/Unit Avreage Daily Rate Vacancy Rate Operating Expenses Cost/Foot Cap Rate Direct Market Rate

Land Purchase Price

$ 12,090,784

Development Fee (of building costs) Exit Cap Rate Broker Commissions Architectural Fee Landscape/Engineering Construction Management General Contractor Fee Bonding Construction Contingency Legal Fees/Closing (of acquisition cost)

86,667

2.00% 7.50% 6.00% 2.00% 1.00% 2.00% 2.00% 2.00% 5.00% 3.50%

Capital Reserve Tax Rate Depreciation Land Area Remediation Permitting Utilities: all inclusive Advertising/Model Unit LEED Commissioning

43,333

per SF Years

per sf per $1000

$ 0.30 35% 39 129765 $5 $7 $ 800,000 $ 100,000 $ 150,000

La Petit Maison - Micro Units

Revenue Assumptions Inflation Factor Units Average Unit Size Monthly Rent/SF Occupancy Factor

factors 2%

Net Operating Income Gross Lease Revenues Annual Operating Expenses 38.25% Utilities Total Net Operating Income Development Costs Construction Other

Net Operating Income Asset Value Cost of Sale Development Costs

Total Development Costs Annual Cash Flow

Net Cash Flow Net Present Value Unleaveraged IRR

Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

$ -

$ 7,160,400 $ (2,738,853) $ (802,193.58) $ 3,619,353

$ -

$ 8,978,569 $ (3,434,303) $ (818,237.45) $ 4,726,029

$ -

$ 9,158,140 $ (3,502,989) $ (834,602.20) $ 4,820,549

$ -

$ 9,341,303 $ (3,573,048) $ (851,294.24) $ 4,916,960

$ -

$ 9,528,129 $ (3,644,509) $ (868,320.13) $ 5,015,300

$ -

$ 9,718,692 $ (3,717,400) $ (885,686.53) $ 5,115,606

$ -

$ 9,913,065 $ (3,791,748) $ (903,400.26) $ 5,217,918

$ -

$ 10,111,327 $ (3,867,582) $ (921,468.27) $ 5,322,276

$ -

$ 10,313,553 $ (3,944,934) $ (939,897.63) $ 5,428,722

650 650 650 650 650 650 650 650 650 650 400 400 400 400 400 400 400 400 400 400 $ 3.00 $ 3.06 $ 3.12 $ 3.18 $ 3.25 $ 3.31 $ 3.38 $ 3.45 $ 3.51 $ 3.59 50.00% 75.00% 92.20% 92.20% 92.20% 92.20% 92.20% 92.20% 92.20% 92.20%

$ 4,680,000 $ (1,790,100) $ (786,464) $ 2,103,436

$ (62,974,608) $ $ (62,974,608) $ -

*Stabilization

$ 2,103,436 $ 3,619,353 $ 4,726,029 $ 4,820,549 $ 4,916,960 $ 5,015,300 $ 5,115,606 $ 5,217,918 $ 5,322,276 $ 5,428,722 $ 72,382,953 $ (4,342,977) $ (62,974,608) $ $ $ $ $ $ $ $ $ $ $ (62,974,608) $ 2,103,436 $ 3,619,353 $ 4,726,029 $ 4,820,549 $ 4,916,960 $ 5,015,300 $ 5,115,606 $ 5,217,918 $ 5,322,276 $ 73,468,698 $ 2,804,578 7.64%

La Petit Maison - Office Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

43,333 43,333 43,333 43,333 43,333 43,333 43,333 43,333 43,333 43,333 39000 39000 39000 39000 39000 39000 39000 39000 39000 39000 49.10% 34.100% 19.10% 19.10% 19.10% 19.10% 19.10% 19.10% 19.10% 19.10% $ 45.00 $ 45.90 $ 46.82 $ 47.75 $ 48.71 $ 49.68 $ 50.68 $ 51.69 $ 52.72 $ 53.78

Factors Assumptions Inflation Factor GLA Absorbed Net Rentable Area Vacancy Factor Net Lease Revenue per s.f.

$ 893,295 $ 1,179,676 $ 1,477,155 $ 1,506,698 $ 1,536,832 $ 1,567,568 $ 1,598,920 $ 1,630,898 $ 1,663,516 $ 1,696,786 $ (446,648) $ (589,838) $ (738,577) $ (753,349) $ (768,416) $ (783,784) $ (799,460) $ (815,449) $ (831,758) $ (848,393) $ 446,648 $ 589,838 $ 738,577 $ 753,349 $ 768,416 $ 783,784 $ 799,460 $ 815,449 $ 831,758 $ 848,393

2% sf 90%

Net Operating Income Leasing Revenues Operating Expenses 50.00% Net Operating Income

$ -

*Stabilization

$ -

$ (6,500,000) $ $ (6,500,000) $ $ -

Development Costs Construction Costs Other Total Development Costs

$ 446,648 $ 589,838 $ 738,577 $ 753,349 $ 768,416 $ 783,784 $ 799,460 $ 815,449 $ 831,758 $ 848,393 $ 11,311,910 $ (678,715) $ (6,500,000) $ $ $ $ $ $ $ $ $ $ $ (6,500,000) $ 446,648 $ 589,838 $ 738,577 $ 753,349 $ 768,416 $ 783,784 $ 799,460 $ 815,449 $ 831,758 $ 11,481,588 $ 1,775,067 14.01%

Annual Cash Flow Net Operating Income Asset Value Costs of Sale Total Development Costs Net Cash Flow Net Present Value Unleaveraged IRR

La Petit Maison - Retail

Assumptions Inflation Factor GLA Absorbed Net Rentable Area Vacancy Factor Net Lease Revenue per s.f. Net Operating Income Leasing Revenues Operating Expenses Net Operating Income

Factors 2% sf 90%

5.00%

Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

$ -

*Stabilization

$ -

$ (13,000,000) $ $ (13,000,000) $ $ -

Development Costs Construction Costs Other Total Development Costs

$ 1,120,763 $ 1,426,610 $ 1,744,244 $ 1,779,128 $ 1,814,711 $ 1,851,005 $ 1,888,025 $ 1,925,786 $ 1,964,302 $ 2,003,588 $ 26,714,502 $ (1,602,870) $ (13,000,000) $ (13,000,000) $ 1,120,763 $ 1,426,610 $ 1,744,244 $ 1,779,128 $ 1,814,711 $ 1,851,005 $ 1,888,025 $ 1,925,786 $ 1,964,302 $ 27,115,219 $ 10,982,169 16.85%

Annual Cash Flow Net Operating Income Asset Value Costs of Sale Total Development Costs Net Cash Flow Net Present Value Unleaveraged IRR

La Petit Maison - Storage Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Factors Assumptions Inflation Factor GLA Absorbed Net Rentable Area Vacancy Factor Net Lease Revenue per s.f.

$ (1,950,000) $ $ (1,950,000)

2% sf 75%

Net Operating Income Leasing Revenues Operating Expenses 30.00% Net Operating Income Development Costs Construction Costs Other Total Development Costs

*Stabilization

$ 338,975 $ 432,773 $ 530,188 $ 540,792 $ 551,607 $ 562,640 $ 573,892 $ 585,370 $ 597,078 $ 609,019 $ 8,120,256 $ (487,215) $ (1,950,000) $ (1,950,000) $ 338,975 $ 432,773 $ 530,188 $ 540,792 $ 551,607 $ 562,640 $ 573,892 $ 585,370 $ 597,078 $ 8,242,059 $ 3,765,542 30.94%

Annual Cash Flow Net Operating Income Asset Value Costs of Sale Total Development Costs Net Cash Flow Net Present Value Unleaveraged IRR

La Petit Maison - Hotel

Assumptions Inflation Factor Rooms Vacancy Factor Occupancy Factor Average Daily Room Rate Net Operating Income Room Revenues Other Revenues Operating Expenses Total Net Operating Income

factors 2%

50%

Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

100 100 100 100 100 100 100 100 100 100 59% 44% 29% 29% 29% 29% 29% 29% 29% 29% 41% 56% 71% 71% 71% 71% 71% 71% 71% 71% $ 100 $ 102.00 $ 104.04 $ 106.12 $ 108.24 $ 110.41 $ 112.62 $ 114.87 $ 117.17 $ 119.51

$ 1,496,500 $ 2,084,880 $ 2,696,197 $ 2,750,121 $ 2,805,123 $ 2,861,225 $ 2,918,450 $ 2,976,819 $ 3,036,355 $ 3,097,082

$ $ $ -

$ $ 1,348,098

$ $ $ -

$ $ 1,375,060

$ $ $ -

$ $ 1,402,561

$ $ $ -

$ $ 1,430,613

$ $ $ -

$ $ 1,459,225

$ $ $ -

$ $ 1,488,409

$ $ $ -

*Stabilization

$ 1,042,440 $ 1,348,098 $ 1,375,060 $ 1,402,561 $ 1,430,613 $ 1,459,225 $ 1,488,409 $ 1,518,178 $ 1,548,541 $ 20,647,216 $ (1,238,833) $ $ $ 1,518,178 $ 20,956,924 $ $ 1,042,440

$ (748,250) $ (1,042,440) $ (1,348,098) $ (1,375,060) $ (1,402,561) $ (1,430,613) $ (1,459,225) $ (1,488,409) $ (1,518,178) $ (1,548,541) $ 748,250 $ 1,042,440 $ 1,348,098 $ 1,375,060 $ 1,402,561 $ 1,430,613 $ 1,459,225 $ 1,488,409 $ 1,518,178 $ 1,548,541

$ (9,688,401) $ $ $ $ (9,688,401) $ -

Development Costs

Total Development Costs

$ (9,688,401) $ $ (9,688,401) $ 748,250

Construction Other

Annual Cash Flow Net Operating Income Asset Value Costs of Sale Total Development Costs Net Cash Flow $5,650,626 17%

$ 748,250

Net Present Value Unleveraged IRR Before Taxes

La Petit Maison - Stucture Parking

Assumptions Inflation Factor GLA Absorbed Net Rentable Area Stalls Occupancy Factor Average Rate Per Stall Per Day

Factors 2% sf 75%

Year 0

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

$ (6,810,000) $ $ (6,810,000)

30%

Construction Costs Other Total Development Costs

*Stabilization

$ 1,321,357 $ 1,853,203 $ 2,405,795 $ 2,453,911 $ 2,502,989 $ 2,553,049 $ 2,604,110 $ 2,656,192 $ 2,709,316 $ 2,763,502 $ 36,846,695 $ (2,210,802) $ (6,810,000) $ (6,810,000) $ 1,321,357 $ 1,853,203 $ 2,405,795 $ 2,453,911 $ 2,502,989 $ 2,553,049 $ 2,604,110 $ 2,656,192 $ 2,709,316 $ 37,399,396 $ 18,677,466 36.79%

Net Operating Income Asset Value Costs of Sale Total Development Costs

Net Operating Income Leasing Revenues Operations and Maintenance Expenses Net Operating Income Development Costs

Annual Cash Flow

Net Cash Flow Net Present Value Unleaveraged IRR

Anchor Nonanchor

Inventory Buildings

Office2 $ 1,025 $ 450 $ 850

Office3 Office4 Office5 $ 1,450 $ 1,700 $ 2,000 $ 1,000 $ 1,100 $ 1,420 $ 1,775

$ 1,200 $ 1,700 $ 881 $ 1,313 $ 1,560 $ 1,888 200 300 400 500 $ 52.88 $ 52.50 $ 46.80 $ 45.30 (Data compiled from current online offerings.)

350 158 323 150 256 390 1,627

15.8% 5.8% 10.8%

Storage Midtown West- 50sf Units Average Monthly Rate $ 138.50 $ 82.50 $ 115.00 $ 98.50 $ 91.00 Average Uncle Bob's SS Public Storage 1 Public Storage 2 Public Storage 3 Extra Space

Businesses 2015 Total Sales ($000) 2015 Daily Business Population Total Number of Businesses

Rate Vacancy $ 29.52 12.8% $ 22.98 13.5% $ 18.58 3.1% $ 23.69 9.8%

CBRE Atlanta Office Marketview 4Q2015 Inventory SF 16,154,521 5,543,911 815,754 22,514,186

Free Rent Leasing Tenant Rate Vacancy (months) Commisions Improvements $ 17.73 8.8% 2.7 4.9% $ 8.72 $ 28.21 10.2% 1.9 6.0% $ 5.31 $ 22.97 9.5% 2.3 5.5% $ 7.02

Units

Total Inventory Vacancy Rate Midtown 14,766,641 Midtown West 478,665 Totals 15,245,306

40 95 34 169

Inventory SF 2,063,000 2,858,000 4,921,000

Peachtree & 7th Juniper,5th & 4th 1400 W Peachtree 693 Peachtree 1270 Spring 14th & W Peachtree Totals *Source: Atlanta Business Chronicle 11/5/2015

Hanover, Loudermilk Southeast Capital Greystar JPX Works Polluck Shores Related Group

Midtown Proposed Residential/Mixed Use Pipeline

31 65 96

Cowork Office Space Midtown Desk Office1 Industrious Office $ 370 $ 725 Berthold Building $ 220 $ 350 Atlanta Tech Village $ 400 $ 600 Strongbox west $ 275 $ 450 Experience Rethink $ 260 5-Points Cowork $ 250 $ 700 Average Cost $ 296 $ 565 Estimated SF 100 100 Average Rates(SF/year) $ 35.50 $ 67.80 Combined Average Rates (SF/Year) $ 50.13 Assumption of 100sf per desk space including amentiy space.

Totals

Atlanta Office 3Q2015 Submarket (Data: Colliers International 2015)

Midtown Class A Midtown Class B Midtown Class C

Totals

Atlanta Retail 3Q2015 Submarket (Data: Reis Inc 2016)

CBD/Midtown/Buckhead CBD/Midtown/Buckhead

Square Foot 12,000 1,800 1,780 1,450 4,658 1,413 13,197

Midtown West Retail Comps 912 Huff Road 1534 Howell Mill Road 1339 Marietta Blvd NW 930 Howell Mill Rd NW, The Brady 1193 Howell Mill Rd 935 Marietta St 999 Brady Ave NW

36,298 5,185 $ 26.29

Rate $ 19.50 $ 18.33 $ 20.22 $ 38.00 $ 45.00 $ 25.00 $ 18.00

Total Avalable Supply Average (Data compiled from current online offerings.)

$/sf/year $ 33.24 $ 19.80 $ 27.60 $ 23.64 $ 21.84 $ 25.22

Distance(miles) from Site 0.7 0.9 0.9 0.9 1.2

$ 61,762,321 373,681 24,209

Hotel Rooms

3000 4000

Restaurant, SF Retail, SF

YTD Net Under Gross Lease Available Inventory Absorbtion Constructio Rate SF/Yr 2,333,129 546,042 0 $ 27.20 27,763 14,511 0 $ 22.50 2,360,892 560,553 0 $ 24.85

165

7,000

40,000 Whole Foods 45,000

5000

165

Totals

Atlanta Apartment 3Q2015 Submarket (Data: Reis Inc 2016)

Midtown Central I-75 West

Inventory Buildings

1016 Howell Mill

Midtown Current Market Apartment Offerings (Studio/1-bed) SF 691 14th St NW Elan Westside

1016 Lofts

470 16th St NW 800 W Marietta St 935 Marietta St NW

930 Howell Mill 1000 Northside Dr

The Exchange WestMar Lofts 935M

950 Marietta NW Averages

The Brady Tenside

M Street

Midtown Current Market Apartment Offerings (Larger/2-bed) SF 691 14th St NW

The Exchange

The Brady Tenside

1016 Lofts

935 Marietta St NW

470 16th St NW

930 Howell Mill 1000 Northside Dr

1016 Howell Mill

Elan Westside

935M

950 Marietta NW Averages

M Street

96 55 151

611 734 672 735 803 780 720 972 972 765 771 843 750 425 520 600 585 600 561 706

1093 1133 1172 1128 1225 972 1218 1053 1068 1121 1138 989 1051 1090 1205 980 1205 1300 1165 955 1166 1116

Low$ $ 1,228 $ 1,258 $ 1,288 $ 1,318 $ 1,319 $ 1,573 $ 1,348 $ 1,487 $ 1,498 $ 1,450 $ 1,230 $ 1,255

Inventory Units 17,756 9,445 27,201

$ 765 $ 1,170 $ 1,440 $ 1,505 $ 1,420 $ 1,586

High$ $ 1,263 $ 1,358 $ 1,839 $ 1,832 $ 1,851 $ 2,129 $ 1,724 $ 1,755 $ 1,908 $ 1,525 $ 2,025 $ 1,720

Free Rent Average Unit Rent Vacancy (months) Expenses Size Estimate $ 1,342.00 8.3% 1.11 38.1% $ 1,046.00 7.3% 0.99 38.4% $ 1,194.00 7.8% 1.05 38.3% 911

Daily Rate 100 Luckie Street $ 4 15 Peachtree St (5 Points) $ 15 150 Carnegie Way $ 4 171 Carnegie Way $ 22 127 Andrew Young Intern NW $ 20 123 Marietta St $ 20 191 Peachtree $ 18 218 Peachtree St NW $ 22 221 Peachtree Center $ 18 180 Pryor St $ 15 191 Club Parking $ 18 218 International Blvd $ 20 236 Williams St $ 7 250 Piedmont $ 22 250 Williams St $ 10 31 Baker St $ 18 33 Hurt Plaza $ 10 34 Broad St $ 15 Georgia Tech Visitor Garage $ 15 Omni North $ 35 Suntrust Plaza $ 20 W Hotel Parking $ 20 Westin Peachtree Plaza $ 25 Average $ 17

Source: www.atlantadowntown.com & SP Plus Parking

Atlanta Parking Deck Rates

Therefore Average Micro-unit Rate $ 2.31 SF/Month

Therefore Average Micro-unit Size 400SF 43.36% Decrease in Unit Size 13.64% Increase in Unit Rate

Micro-unit Rate Calculations Rate Increase From 2- to 1-Bed Units 36.69% Decrease in Unit Size 11.54% Increase in Unit Rate

$ 720 $ 915 $ 1,090 $ 1,115 $ 1,200 $ 1,189

High$ $ 1,815 $ 1,960 $ 2,937 $ 2,996 $ 2,105 $ 1,690 $ 2,074 $ 1,935 $ 2,945 $ 3,090 $ 3,115

Average$/Unit $/SF $ 1,798 $ 1.64 $ 1,930 $ 1.70 $ 2,443 $ 2.08 $ 2,485 $ 2.20 $ 2,068 $ 1.69 $ 1,612 $ 1.66 $ 1,942 $ 1.59 $ 1,933 $ 1.84 $ 2,323 $ 2.17 $ 2,433 $ 2.17 $ 2,518 $ 2.21 $ 1,655 $ 1.67 $ 1,897 $ 1.80 $ 1,953 $ 1.79 $ 2,286 $ 1.90 $ 1,660 $ 1.69 $ 1,790 $ 1.49 $ 1,975 $ 1.52 $ 1,830 $ 1.57 $ 1,931 $ 2.02 $ 2,094 $ 1.80 $ 1.82

Average$/Unit $/SF $ 1,246 $ 2.04 $ 1,308 $ 1.78 $ 1,564 $ 2.33 $ 1,575 $ 2.14 $ 1,585 $ 1.97 $ 1,851 $ 2.37 $ 1,536 $ 2.13 $ 1,621 $ 1.67 $ 1,703 $ 1.75 $ 1,488 $ 1.94 $ 1,628 $ 2.11 $ 1,488 $ 1.76 $ 1,354 $ 1.81 $ 743 $ 1.75 $ 1,043 $ 2.00 $ 1,265 $ 2.11 $ 1,310 $ 2.24 $ 1,310 $ 2.18 $ 1,388 $ 2.47 $ 2.03

Low$ $ 1,780 $ 1,900 $ 1,948 $ 1,973 $ 2,030 $ 1,533 $ 1,810 $ 1,930 $ 1,700 $ 1,775 $ 1,920

$ 1,820 $ 1,970 $ 2,220 $ 2,010 $ 2,219 $ 2,424

$ 1,892 $ 1,902 $ 1,938 $ 1,968 $ 1,500 $ 1,610 $ 1,730 $ 1,650 $ 1,642 $ 1,764

Hotels, Midtown West Courtyard Midtown/GT Hampton Inn GT/DT Hilton Garden Inn MT Total/Average

Rooms 154 106 136 396

Rates(night) Distance(miles) $ 134.00 1.4 $ 139.00 1.6 $ 144.00 1.9 $ 139.00

Residential Demand Estimates 2015 Residential Population 2020 Residential Estimate Population Growth 2015-2020 Estimated Change in Population Percentage of Rental Dwellers Net Removal of Units Actual Vacancies in Rental Units Frictional Vacancies @ Units Under Construction Number of Persons Per Household 62.10%

Total New Housing Units in Demand 2015-2020 New Housing Unit Demand For Targeted Age 2015-2020

308,941 326,190 5.58% 17,249 10,712 0 2,122 536 1,627 1.95 4,561 1,461

4,561 2,249 2,313

Units Total Potential Demand Total Available Supply Total Delta

1,461 720 741

Demand vs Supply 2015-2020

Potential Demand Target Demographic Supply Specific to Target Demographic Delta for Demographic

1445

Retail Demand $ 28,529,558

Delta Considering 1-person Household Micro-units

Food & Beverage Stores

Existing Retail Market Potentials 1 Mile Radius

Retail Supply $ 27,745,329

22639 34766 57405

34755 69735 104490 32.03%

2020 Estimated Housing (ESRI Data) 1-mile 3-mile 5-mile Population 17,501 148,569 326,190 Total Households 5,766 67,592 151,857 Persons / Household 1.70 1.80 1.95 Owner Occupied 991 21,858 57,553 Renter Occupied 4,775 45,734 94,304 Median HH Income $ 36,164 $ 52,831 $ 53,922 Target Rent (30% Rule) $ 904 $ 1,321 $ 1,348 Targeted Age Demographics (2020) 20-24 year olds 5949 25-34 year olds 4453 Totals 10402 Target Age Percentage of Total Population

Gap Leakage/Surplus Factor Number of Businesses $ 784,229 1.4 21

La Petit Maison Construction Costs Materials and Labor DEMOLITION

Building 1 Building 2 Building 3 Building 4 Metal Canopy 1 Metal Canopy 2

Sq. Feet

38,522 8,252 1,800 10,518 441 5,532

$ Cost

Total

$2.00 $3.50 $3.50 $2.00 $1.25 $1.25

Materials and Labor ELEVATORS

$77,044 $28,882 $6,300 $21,036 $551 $6,915

Subtotal

$2.00 $8.00 $12.00 $6.00 $4.00 $250.00

Total

$1,000,000

ELECTRICAL

Tower Commerical Space Garage

750 $3,000.00 167,250 $14.00 400 $250.00

Subtotal

$2,250,000 $2,341,500 $100,000 $4,691,500

PLUMBING

Tower Commerical Space Swimming pool/ Community Space Subtotal

SITE WORK

1,705 17,050 8,525 200

$ Cost

$140,728

Dirt Rock Curbs/Gutters Sidewalk/Pavers Greenspace Trees/Vegetation

Sq. Feet

$50,000 $30,000 $20,460 $102,300 $34,100 $50,000

750

$600.00

$450,000 $172,200 $200,000 $822,200

HEATING AND A/C

Tower Commerical Space

280 $2,000.00

Subtotal

$300,000 $560,000 $860,000

SPRINKLERS

Subtotal

Tower Commerical Space

39,750 167,250

$3.50 $3.50

$139,125 $585,375

Commerical Space-1st Fl Commerical Space-2nd Fl Commerical Space-3rd Fl Commerical Ceiling-1st Fl Commerical Ceiling-2nd Fl Commerical Ceiling-3rd Fl Tower Halls Tower Core Subtotal

20440 17192 16590 55750 55750 55750 112500

$5.00 $5.00 $5.00 $2.75 $2.75 $2.75 $5.00

$102,200 $85,960 $82,950 $153,313 $153,313 $153,313 $562,500 $100,000

227000 20000

$10.00 $150.00

$2,270,000 $3,000,000

18 90 400

$130,000 $250.00 $100.00 $400.00

$130,000 4500 9000 160000

$286,860

STRUCTURE/FOUNDATION

Core Elevators 5 150000 Stairs 4,608 $25.00 Steel Package 167,250 $21.00 Concrete Floors 223,000 $5.00 Fireproofing 167,250 $2.25 Stairs/Steel/Concrete 780 $ 265.00 Subtotal

$200,000 $750,000 $115,200 $3,512,250 $1,115,000 $376,313 $206,700

Subtotal

$6,275,463

ROOFS

Tower 1 Roof 14,082 Tower 2 Roof 15,490 Restaurant Roof 2,812 Lower Roof Bradley Roof 43,750 Lower Roof Howell Roof 44,500 Green Space Add 44,125 Subtotal 164,759

$8.00 $8.00 $8.00 $8.00 $8.00 $2.50

$112,656 $123,920 $22,496 $350,000 $356,000 $110,313

20,940

Paint& Flooring RESTAURANT MISCELLANEOUS ITEMS

Crane Trailer Portable Johns Garbage Disposal

$1,075,385

$37.00

$774,780

GLASS

Solar Towers 176,385 Storefront Commercial 31,410 Subtotal

$85.00 $14,992,725 $40.00 $1,256,400

Subtotal FF&E Security System Culinary School Equipment

$16,249,125

GARAGE

Structure 232,500 Sprinkler System 232,500 Air Handling

$21.00 $3.50

Subtotal

$4,882,500 $813,750 $200,000 $5,896,250

Prefabricated Modules

Sq. Feet

Units

$1,393,548

FINISHES

PRECAST

Commercial

$724,500

DRYWALL

Cost Per Sq. Ft. Cost Per Unit

1 Bedroom-Unit A 1 Bedroom-Unit B 1 Bedroom-Unit C

350 400 450

190 370 190

$165.00 $165.00 $165.00

57750 66000 74250

Storage Area

650

$45.00

2250

Totals:

Total Cost

$10,972,500 $24,420,000 $14,107,500 $1,462,500 $50,962,500

Subtotal Construction TI

$99,232,994 $1,690,000

TOTAL

$100,922,994

PSF

$126.10

$303,500 $576,657 $1,800,000 $130,000

La Petit Maison Partnership Returns NOI Cash Flow After Debt Service Before Taxes 1% Asset Management Fee Cash Flow For Distribution

Sponsor 10% 25% 40%

$ 47,782,546 $ 41,524,501 $ (89,307,046) $ 90% $ 89,307,046 10% $ 9,923,005 0% $ 100% $ 47,192,967

8% 12% 12%

90% 10%

12.46%

Reversion Cost of Sale Mortgage Balance Total Equity Reversion Before Tax Total Cash Flow IRR

IRR Up to Between 8% and Over

Equity Contributions Investor Sponsor Waterfall Tier 1 Tier 2 Tier 3

Tier 1 Accumulated Balance Investor Injections Investor Accruals Tier 1 Accrual Distribution End Balance Investor Cash Flow Sponsor Equity Cash Flow Sponsor Promote Cash Flow Total Remaining Cash To Distribute

$ 172,503,061 $ (10,350,184) $ (61,388,205) $ 100,764,673

Construction Phase 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 $ (570,967) $ 2,256,127 $ 4,734,266 $ 4,959,527 $ 5,189,294 $ 5,423,656 $ 5,662,705 $ 5,906,535 $ 6,155,242 $ 6,408,923 $ $ (22,561) $ (47,343) $ (49,595) $ (51,893) $ (54,237) $ (56,627) $ (59,065) $ (61,552) $ (64,089) $ (53,091,717) $ (570,967) $ 2,233,566 $ 4,686,923 $ 4,909,932 $ 5,137,401 $ 5,369,419 $ 5,606,078 $ 5,847,470 $ 6,093,690 $ 6,344,834

2019

2021

2022

2023

2024

2025

$ -

2026

$ -

2027

$ -

2028

$ 47,763,935

$ 51,605,149 $ 53,723,352 $ 53,802,989 $ 53,688,289 $ 53,359,692 $ 52,795,989 $ 51,974,198 $ 50,869,411 $ 49,454,643

2020

$ (53,091,717) $ (570,967) $ 2,233,566 $ 4,686,923 $ 4,909,932 $ 5,137,401 $ 5,369,419 $ 5,606,078 $ 5,847,470 $ 6,093,690 $ 107,109,507

$ 47,782,546 $ 5,309,172

Investor 90% 75% 60%

Construction Phase

$ -

$ (0) $ -

$ 47,782,546 $ 47,782,546 $ $ 3,822,604 $ $ $ 47,782,546 $ 51,605,149

$ -

$ 2,010,210 $ 4,218,231 $ 4,418,939 $ 4,623,661 $ 4,832,477 $ 5,045,470 $ 5,262,723 $ 5,484,321 $ 53,411,015 $ 223,357 $ 468,692 $ 490,993 $ 513,740 $ 536,942 $ 560,608 $ 584,747 $ 609,369 $ 5,934,557 $ $ $ $ $ $ $ $ $ $ (570,967) $ -

$ (47,782,546) $ $ $ $ $ -

$ 47,782,546 $ $ $ $ 47,782,546

$ (570,967) $ -

$ $ $ -

$ 5,733,905.46 $ $ $ 53,516,451

$ $ $ -

$ 6,421,974 $ (2,010,210) $ $ 57,928,216

$ $ $ -

$ -

$ $ $ -

$ 6,951,386 $ (4,218,231) $ $ 60,661,371

$ -

$ (0) $ -

$ $ $ -

$ 7,279,364 $ (4,418,939) $ $ 63,521,796

$ -

$ (0) $ $ (0) $ $ (0) $ -

$ $ $ -

$ 7,622,616 $ (4,623,661) $ $ 66,520,751

$ -

$ $ $ -

$ -

$ $ $ -

$ 7,982,490 $ (4,832,477) $ $ 69,670,764

$ -

$ $ $ -

$ -

$ $ $ -

$ 8,360,492 $ (5,045,470) $ $ 72,985,785

$ -

$ $ $ -

$ -

$ $ $ -

$ 8,758,294 $ (5,262,723) $ $ 76,481,356

$ -

$ $ $ -

$ -

$ $ $ -

$ 9,177,763 $ (5,484,321) $ $ 80,174,798

$ -

$ $ $ -

$ -

$ 35,822,951 $ 4,776,393 $ 7,164,590

$ 9,620,976 $ (53,411,015) $ (35,822,951) $ 561,808

$ -

$ $ $ -

$ -

$ 47,782,546 $ 53,516,451 $ 57,928,216 $ 60,661,371 $ 63,521,796 $ 66,520,751 $ 69,670,764 $ 72,985,785 $ 76,481,356 $ 80,174,798

$ -

$ (342,580) $ $ (57,097) $ $ (171,290) $ -

$ 47,782,546 $ 77,909,260 $ (89,307,046) $ (35,822,951) $ 561,808 75% $ 35,822,951 10% $ 4,776,393 15% $ 7,164,590 100% $ (570,967)

$ -

Tier 2 Accumulated Balance Investor Injections Investor Accruals Tier 1 Accrual Distribution Tier 2 Accrual Distribution End Balance Investor Cash Flow Sponsor Equity Cash Flow Sponsor Promote Cash Flow Total Remaining Cash To Distribute

60% $ (342,580) $ 10% $ (57,097) $ 30% $ (171,290) $ 100% $ $ -

$ (53,091,717) $ (570,967) $ 2,233,566 $ 4,686,923 $ 4,909,932 $ 5,137,401 $ 5,369,419 $ 5,606,078 $ 5,847,470 $ 6,093,690 $ 107,109,507

Tier 3 Investor Cash Flow Sponsor Equity Cash Flow Sponsor Promote Cash Flow Total Remaining Cash To Distribute

RETURNS SUMMARY Total Project Cash Flow

Sponsor Cash Flow IRR Net Cash Flow Invested Equity Cash Flow Multiplier

Investor Cash Flow IRR Net Cash Flow Invested Equity Cash Flow Multiplier

IRR Net Cash Flow Invested Equity Cash Flow Multiplier

16.69% $ 16,326,430 $ 5,309,172 4.08x

11.86% $ 77,004,871 $ 47,782,546 2.61x

12.46% $ 93,331,302 $ 53,091,717 2.76x

$ (47,782,546) $ (342,580) $ 2,010,210 $ 4,218,231 $ 4,418,939 $ 4,623,661 $ 4,832,477 $ 5,045,470 $ 5,262,723 $ 5,484,321 $ 89,233,966

$ (5,309,172) $ (228,387) $ 223,357 $ 468,692 $ 490,993 $ 513,740 $ 536,942 $ 560,608 $ 584,747 $ 609,369 $ 17,875,541

Sponsor Cash Flow with Asset Management Fee and Development Fee $ (3,187,633) $ (228,387) $ 245,918 $ 516,035 $ 540,588 $ 565,633 $ 591,178 $ 617,235 $ 643,812 $ 670,921 $ 17,939,630 IRR 24.36% Net Cash Flow $ 18,914,931 Invested Equity $ 3,187,633 Cash Flow Multiplier 6.93x

La Petit Maison Sources and Uses Total SF Construction/Perm Loan Equity

Sources Construction/Perm Loan Equity

800,333 60% 40%

Total Sources Amount Per SF $ 12,090,784 $ 100,923,009 $ 19,715,500

$ 132,729,293

Amount Per SF $ 79,637,576 $ 53,091,717 10% $ 5,309,172 90% $ 47,782,546

Uses Land Acquisition Construction Hard Cost Construction Soft Cost $ 132,729,293

Sponsor Investor

Total Uses

Alternate Financial Proposal $ 12,090,784 $ 53,091,717 22.77% Land as Equity $ 31,556,947 Net Cash Flow

$ 79,637,576 25 6.50%

La Petit Maison Permanent Loan Schedule

Loan Amount Term Rate Debt Service Coverage Ratio

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Payment $6,528,806 $6,528,806 $6,528,806 $6,528,806 $6,528,806 $6,528,806 $6,528,806 $6,528,806 $6,528,806 $6,528,806 Amortization $ 1,352,364 $ 1,440,268 $ 1,533,885 $ 1,633,588 $ 1,739,771 $ 1,852,856 $ 1,973,291 $ 2,101,555 $ 2,238,157 $ 2,383,637 Interest $ 5,176,442 $ 5,176,442 $ 5,176,442 $ 5,088,539 $ 4,994,921 $ 4,895,219 $ 4,789,036 $ 4,675,951 $ 4,555,515 $ 4,427,251 $ 4,290,650 $ 4,145,170 Year Balance $ 78,285,212 $ 76,844,944 $ 75,311,059 $ 73,677,472 $ 71,937,701 $ 70,084,845 $ 68,111,554 $ 66,009,998 $ 63,771,842 $ 61,388,205 Reserve $2,081,580 1.25 1.37 1.76 1.80 1.83 1.87 1.91 1.94 1.98 2.02

$8,161,008.03

MJK Ventures LLC Combined Partners' Net Worth as of 12/31/2015 Assets Cash & Equivalents Checking Savings Money Markets Savings Bonds CD's Cash Value Insurance Other

Totals $ 125,500 $ 365,210 $ 2,000,500 $ 200,000 $ 1,385,000 $ 1,050,000 $ 1,461

Hristova $ $ $ $ $ $ $

23,500 52,560 650,500 150,000 285,000 350,000 461

Jancuska $ 75,000 $ 207,650 $ 100,000 $ 50,000 $ 750,000 $ 200,000 $ -

McKenzie $ 27,000 $ 105,000 $ 1,250,000 $ $ 350,000 $ 500,000 $ 1,000

Investment Assets Brokerage Accounts Retirement Accounts Business Ownership (Est.) Real Estate Owned (REO) in Portfolio

$ $ $ $

4,958,000 6,102,000 11,750,000 13,547,500

$ $ $ $

1,458,000 2,652,000 3,500,000 4,500,000

$ $ $ $

2,300,000 1,500,000 5,750,000 4,610,000

$ $ $ $

1,200,000 1,950,000 2,500,000 4,437,500

$ $ $ $ $ $ $ $ $ $ Revolving Debt $ Other $

2,670,000 280,000 62,215,015 134,250 102,275 106,886,712 56,228 -

$ $ $ $ $

1,500,000 280,000 62,215,015 31,750 34,775

$ $ $ $ $

875,000 85,000 55,000

$ $ $ $ $

295,000 17,500 12,500

77,683,562

$ 16,557,650

12,645,500

$ $

35,728 -

$ $

18,000 -

$ $

2,500 -

$ $ $ $ $ $ $

1,390,889 152,000 6,565,730 1,776,000 88,985 100,000 55,000

$ $ $ $ $ $ $

950,000 152,000 4,250,000 1,750,000 41,985 5,000 25,000

$ $ $ $ $ $ $

250,000 26,000 47,000 40,000 15,000

$ $ $ $ $ $ $

190,889 2,315,730 55,000 15,000

Total Liabilities

10,184,832

7,209,713

396,000

2,579,119

Net Worth

96,701,880

70,473,849

$ 16,161,650

10,066,381

Long-Term Debts Home Mortgage Vacation Home REO Debt Business Indebtedness Auto Loans Student Loans Other

Katya Hristova as of 12/31/2015 Net Worth

Income Statement 2015

Assets Cash & Equivalents

Income Checking Savings Money Markets Savings Bonds CD's Cash Value Insurance Other

$23,500 $52,560 $650,500 $150,000 $285,000 $350,000 $461

Brokerage Accounts Retirement Accounts Business Ownership (Est.) Real Estate Owned (REO) in Portfolio

$1,458,000 $2,652,000 $3,500,000 $4,500,000

Investment Assets

Wages and Salary (W-2) Interest and Dividend Income Bonus and Commissions Self-Employment Income Real Estate Income (Aggregate net cash flow) Capital Gains (sale of assets) Total Gross Income

Primary Residence $1,500,000 Vacation Home $280,000 (Real Estate - PPE) Business Assets $62,215,015 Vehicles (fractional interest included) $31,750 Other (Collectibles, items of art, jewelry, etc.) $34,775 Total Assets

Net Cash Flow

Assets in Use

$77,683,562

Liabilities Current Revolving Debt Other

$35,728 $0

Home Mortgage Vacation Home REO Debt Business Indebtedness Auto Loans Student Loans Other

$950,000 $152,000 $4,250,000 $1,750,000 $41,985 $5,000 $25,000

Long-Term Debts

Net Worth

$250,000 $38,336 $100,000 $52,500 $1,411,066 $300,000 $2,151,902

Expenses Mortgage (primary residence) Real Estate Taxes and insurance Utilities Automobile Credit Cards Student Loans Housing and Living Expenses Other Miscellaneous Business Expenses Total

Total Liabilities

Annual

$7,209,713 $70,473,849

$57,762 $29,938 $2,921 $41,985 $35,728 $5,000 $60,000 $25,000 $0 $258,333 $1,893,569

Sponsor Name: Katya Hristova

Use

Mixed

4/7/10

Date:

9/2/12

Date:

1/1/13

Date:

LLC

33.3%

$ 65,000,000

$ 54,300,000

$ 87,300,000

Property Date Acquired Ownership Form Percentage Ownership Original Cost Description

The Yard

Property Name Address

Boston, MA

Use

Mixed

Use

Mixed

Chicago, IL

Orlando, FL

Sunny Square

Addison Station

Totals

Mezz/2nd Lien $6,500,000

1st $45,500,000

Mezz/2nd Lien $5,430,000

1st $38,010,000

Mezz/2nd Lien $8,730,000

Mortgage Liens 1st $61,110,000 235777

$ 44,902,003

Loan Balance

Loan Number

$ 24,333,587

NY,NY

2345678

6,414,572 3456890

3,476,227

2,867,203

$102,064,016

536801346

544608

Lender Name Address HSBC First Cambridge Boston, MA

LBTC

NY,NY

Citibank

Wells Fargo

Libertyville, IL Chicago, IL Orlando, FL

FL State Bank

$ 20,070,424

Date Loan Due

9/15/20

2/25/18

23578

1/1/23

Property Value

SCHEDULE OF REAL ESTATE OWNED

Market Value $ 105,000,000

$ 97,375,000

$ 82,500,000

$284,875,000

$ 1,612,100.00

Monthly Rental Income

$ 314,360

Monthly Op Ex

$ 687,352.06

$ 610,388

$ 61,027

$ 203,259

Monthly Cash Flow Net Cash Loan Payment per Month Flow

CASH FLOW Net Owner Equity

$ 183,265

Total Equity

$ 17,876,581

$ 687,352.06

$ 53,683,425

$ 210,895

$ 23,165,207

$ 1,081,512.00

$ 69,565,186

2,964

$267,250

$ 511,774.15

$802,553

8,900

$ 126,126

646,800.00

$ 19,834,270

$1,886,478

$ 59,562,373

$651,381

$60,876,058

$3,340,412

$182,810,984

John J Jancuska as of 12/31/2015 Income Statement 2015

Net Worth Assets Cash & Equivalents

Income Checking Savings Money Markets Savings Bonds CD's Cash Value Insurance Other

$75,000 $207,650 $100,000 $50,000 $750,000 $200,000

Brokerage Accounts Retirement Accounts Business Ownership (Est.) Real Estate Owned (REO) in Portfolio

$2,300,000 $1,500,000 $5,750,000 $4,610,000

Investment Assets

Primary Residence Vacation Home (Real Estate - PPE) Business Assets Vehicles (fractional interest included) Other (Collectibles, items of art, jewelry, etc.) Total Assets

$875,000 $0 $0 $85,000 $55,000 $16,557,650

Liabilities Current Revolving Debt Other

$18,000 $0

Home Mortgage Vacation Home REO Debt Business Indebtedness Auto Loans Student Loans Other

$250,000 $0 $0 $26,000 $47,000 $40,000 $15,000

Long-Term Debts

Net Worth

Wages and Salary (W-2) Interest and Dividend Income Bonus and Commissions Self-Employment Income Real Estate Income (Aggregate net cash flow) Capital Gains (sale of assets) Total Gross Income

$176,000 $12,000 $25,000 $80,000 $477,300 $0 $770,300

Expenses

Assets in Use

Total Liabilities

Annual

$396,000 $16,161,650

Mortgage (primary residence) Real Estate Taxes and insurance Utilities Automobile Credit Cards Student Loans Housing and Living Expenses Other Miscellaneous Business Expenses Total

$28,800 $54,513 $6,500 $16,600 $9,000 $9,000 $22,000 $500 $15,000 $161,913

Net Cash Flow

$608,387

617 Miller St

Property Name Address

Residential

Income Property

Property Description

Sponsor Name: John Jancuska

Luzerne Pa. 18709

Kingston Pa

56 Church St

Kingston Pa.

Residential

Income Property

Income Property Residential

249/251 Rutter Ave

Totals

SCHEDULE OF REAL ESTATE OWNED

CASH FLOW

Net Cash Flow

Property Value

Cash Flow per Month

$ 4,775.00

Monthly Loan Payment

$ 4,775.00

$ 22,000.00

Monthly Op Ex

$ 22,000.00

Monthly Rental Income 5,500.00

$ 5,500.00

$ 13,000.00

Net Owner Equity

27,500.00

$ 13,000.00

Market Value

$ 3,500.00

Date Acquired Ownership Form Percentage Ownership Original Cost

$ 2,620,000

16,500.00

228,000

$ 2,620,000

800,000

$ 1,590,000

725.00

100.0%

$ 1,590,000

$9,725

LLC

100.0%

600,000

400,000

Date: 7/15/09

LLC

400,000

Date: 8/20/00

100.0%

$49,500

$39,775

$4,610,000

$39,775

Date: 4/18/02

$4,610,000

Mark McKenzie as of 12/31/2015 Net Worth

Income Statement 2014

Assets Cash & Equivalents Checking Savings Money Markets Savings Bonds CD's Cash Value Insurance Other

$27,000 $105,000 $1,250,000 $0 $350,000 $500,000 $1,000

Brokerage Accounts Retirement Accounts Business Ownership (Est.) Real Estate Owned (REO) in Portfolio

$1,200,000 $1,950,000 $2,500,000 $4,437,500

Investment Assets

Primary Residence Vacation Home (Real Estate - PPE) Business Assets Vehicles (fractional interest included) Other (Collectibles, items of art, jewelry, etc.) Total Assets

$295,000 $0 $0 $17,500 $12,500 $12,645,500

Liabilities Current Revolving Debt Other

$2,500 $0

Home Mortgage Vacation Home REO Debt Business Indebtedness Auto Loans Student Loans Other

$190,889 $0 $2,315,730 $0 $0 $55,000 $15,000

Long-Term Debts

Net Worth

Wages and Salary (W-2) Interest and Dividend Income Bonus and Commissions Self-Employment Income Real Estate Income (Aggregate net cash flow) Capital Gains (sale of assets) Total Gross Income

$150,000 $31,500 $135,000 $125,000 $167,490 $0 $608,990

Expenses

Assets in Use

Total Liabilities

Annual

Income

$2,579,119 $10,066,381

Mortgage (primary residence) Real Estate Taxes and insurance Utilities Automobile Credit Cards Student Loans Housing and Living Expenses Other Miscellaneous Business Expenses Total

$13,170 $92,133 $8,748 $6,000 $3,000 $9,600 $18,120 $17,796 $85,800 $254,367

Net Cash Flow

$354,623

Property Name Description

Property

Residential

Income Property

Residential

Income Property

1129 Sanders St

Auburn, Al 36830

Income Property

Office

Income Property

Industrial/Commercial

102 Geneva St

Opelika, Al 36801

400 North Railroad Ave

937/939 Old Mill Rd

Auburn, Al 36830

Address

Sponsor Name: Mark McKenzie

Totals

Date Acquired Date: 9/20/10

Date: 10/15/10

Date: 3/25/13

Date: 10/15/15

Ownership Form

LLC

Percentage Ownership

100.0%

25.0%

50.0%

Original Cost

Mortgage

Date

Lender Name

Property Value Market

Auburn, Al

Loan

4,700.00

4,060.00

Net Cash

4,060.00

3,342.50

Cash Flow

CASH FLOW

7,900.00

Monthly

4,040.00

13,370.00

Monthly

$ 1,400.00

Monthly

900.00

16,330.00

Net Owner

14,000.00

Total Equity

9,000.00

$ 3,300.00

4,700.00

916,750

33,000.00

1,855.00

Flow $

364,930

per Month 783,250

436,205

3,710.00

Loan Payment $

385,070

Op Ex 916,750

1,505,179

9,790.00

Rental Income $

364,930

Equity

279845

1,744,821

$ 1,500.00

Balance

309975

15,000.00

$13,958

$25,840

597,845

$38,060

$7,100

1,154,310

$71,000

$3,827,809 $2,315,730

1,195,690

454567

$4,222,191

Address Number Keystone Bank

Auburn, Al

AuburnBank

Opelika, Al

Joe Brown 2/25/18

Charter Bank Opelika, Al

9/15/20

8/20/25

Loan Due

Mezz/2nd Lien

1st

Mezz/2nd Lien

1st

Mezz/2nd Lien

1st

Mezz/2nd Lien

Liens 1st

2,350,000

3,250,000

750,000

1,700,000

Value

SCHEDULE OF REAL ESTATE OWNED

1,250,000

520,000

2,000,000

1,500,000

$8,050,000

APPENDIX B: STATE OF GA PSA

TABLE OF CONTENTS Purchase and Sales Agreement………………...……………………………2 - 9