Interlachen Manor - Constant Contact

Offering Memorandum

Interlachen ManorEdina, Minnesota

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

Marcus & Millichap Real Estate Investment Services, Inc. (“M&M”) is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of M&M, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of M&M, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

NON-ENDORSEMENT NOTICE

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOURMARCUS & MILLICHAP AGENT FOR MORE DETAILS.

CONFIDENTIALITY AND DISCLAIMER

exclusively listedwww.marcusmillichap.com

Investment Sales:Exclusively listed by:

Mox GundersonAssociate Vice President Investments MINNEAPOLISTel: (952) 852-9713Fax: (952) [email protected] License: MN 40237387 | ND 8586

Dan LinnellVice President Investments MINNEAPOLISTel: (952) 852-9770Fax: (952) [email protected] License: MN 40211216 | ND 8585

Josh Talberg - Lead AgentSenior AssociateMINNEAPOLISTel: (952) 852-9769Fax: (952) [email protected] License: MN 40124349

Table of Contents

Interlachen Manor

EXECUTIVE SUMMARYOffering Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Investment Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Summary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

PROPERTY DESCRIPTIONProperty Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Regional Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Local Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Location Amenities Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

FINANCIAL ANALYSISFinancial Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Rent Roll Detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Rent Roll Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Operating Statement - Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Operating Statement - Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Notes and Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Growth Rates - Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Schedule of Prospective Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Amortization Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

COMPETITIVE PROPERTY SETRecent Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Rent Comparables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Rent Comparables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Best in Class:: Rent Comparables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Best in Class: Rent Comparables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

MARKET OVERVIEWLocation Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

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

Financing (Contract for Deed)

Vital Data

Property Details

Unit Mix

EXECUTIVE SUMMARY

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2014 Marcus & Millichap X0510489

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WInterlachen Manor

Offering Highlights

Interlachen Manor5220 Interlachen Boulevard Edina, Minnesota 55436

NUMBER OF UNITS UNIT TYPE APPROX. SQUARE FEET

1 1 Bedroom / 1 Bathroom 780

1 2 Bedroom / 1 Bathroom 940

11 2 Bedroom / 1.75 Bathroom 1,116

4 2 Bedroom / 1.75 Bathroom, Den 1,336

Interest Rate 4.45%

Amortization Period 30 Years

Months of Interest Only 24 Months

Annual Loan Constant 6.04%

Loan Term (2 Year, I/O) 10-Year

Loan to Value 80%

Loan Amount $1,636,000

Down Payment $409,000

CAP Rate – 2017 (Year One) 3.75%

GRM – 2017 (Year One) 8.95

Net Operating Income – 2017 (Year One) $76,772

CAP Rate – 2018 (Stabilized) 5.70%

GRM – 2018 (Stabilized) 8.44

Net Operating Income – 2018 (Stabilized) $116,563

Net Cash Flow After Debt - 2018 (Stabilized) 10.70% / $43,761

Year 3 Total Return - 2019 11.98% / $49,037

Price $2,045,000


Price/Unit $120,294

Price/SF $105.72

Number of Units 17

Rentable Square Feet 19,344

Average Square Feet Per Unit 1,138

Average Market Rent Per Unit $1,099

Year Built 1967

Lot Size 1.45 Acres

Number of Buildings 1

Number of Stories 2

Current Physical Occupancy / Market 47.06% / 99%

Asset/Location Class A+

Asset Type Multifamily

Investment Overview


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EXECUTIVE SUMMARY

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Interlachen Manor

Edina Vintage Portfolio

■■ Class A+ Location: In Close Proximity to Interlachen Country Club, Edina Country Club, 50th & France, Lake Harriet

■■ Contract for Deed at 80% LTV (Loan to Value), 24-Months I/O

■■ Stabilized Total Return of Over 10% Before Depreciation and Amortization

■■ Additional Rent Premiums of $150-$350 Per Unit Through Strategic In-Unit and Common Area Upgrades

■■ Priced Well Below Today’s Replacement Costs, High Appreciation Potential

Marcus & Millichap, as exclusive advisor and broker, is pleased to announce the exclusive listing of Interlachen Manor; a 17-unit apartment complex located in Edina, Minnesota. The property was constructed in 1967 and is being sold by the original developer; a family-owned and operated property development and management company specializing in both multifamily and residential development throughout Edina and the southwest metro. The property is being offered on a Contract for Deed.

Interlachen Manor, part of the Edina Vintage Portfolio, is located in the heart of Edina near Interlachen County Club and southwest Minneapolis; the core of some of the most affluent neighborhoods in the entire Twin Cities, where home values average well over $1M for new construction. Tenants enjoy a residential setting along with the many shops and restaurants the area offers, including Jerry’s Foods Edina (walking distance), 50th & France, Southdale Mall, Galleria of Edina, Lake Harriet and the Lakes Area of Minneapolis. Additionally, the area features excellent proximity to transit and is within short commute to Downtown Minneapolis, which in and of itself is currently one of the strongest apartment markets in the entire nation due to the exciting variety of residential, commercial, recreational, and entertainment-oriented venues.

The building itself was constructed featuring luxury amenities, including over 1,100-square foot floor plans, large windows, underground parking, balconies and walk-outs.

A prospective purchaser has two very attractive opportunities with the Edina Vintage Portfolio. The first is achieved through simply stabilizing the rent roll and adjusting renewals and long-term tenants to current market rental rates while paying down principal on historically low financing. Assuming a 10-year hold, this scenario should yield an investor over a 15 percent Internal Rate of Return (IRR).

Additionally, due to the property’s A+ location and quality of design, an investor could achieve additional value through in-unit and common area upgrades; which should generate additional upside through average rent increases of $150-$350 per unit; a near 20 percent return on capital before appreciation; assuming $7,500 to $25,000 per unit in potential Capital Improvements, depending on level of upgrade.

Never before offered, Interlachen Manor represents a truly rare opportunity to acquire a well-kept, pride of ownership asset at below today’s replacement value in a supply constrained, preferred submarket of Minneapolis, Minnesota.

EXECUTIVE SUMMARY


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WInterlachen Manor

Summary of Terms


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EXECUTIVE SUMMARY

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Interlachen Manor

Proposed Financing

Interest OfferedFee simple interest in Interlachen Manor, a 17-unit apartment complex located at 5220 Interlachen Boulevard, Edina, Minnesota.

Terms of the SaleInterlachen Manor is offered on Contract for Deed terms.

Offering ProcedurePurchasers wishing to make an offer should submit:

• Letter of Intent (template available upon request)• Proof of Funds and Banking References• Resume (which includes a list of other investment real estate owned now or in the past)

At the time the Owners select a Purchaser, they will have considered a number of factors including: price, contingency time frame(s), track record and the perceived ability of potential purchasers to complete the contemplated transaction. Therefore, interested purchasers are encouraged to submit as much of the above as possible with the Letter of Intent. Scheduled tour dates are as follows:

Tour Dates

• Thursday, November 3rd

• Tuesday, November 8th

• Thursday, November 10th


• Thursday, November 17th

• Monday, November 21st


• Call for Offers: Wednesday, November 30th by 5:00 PM CST

Property ToursProspective purchasers are encouraged to visit the subject property prior to submitting offers. However, all property tours must be arranged with the Marcus & Millichap listing agents. Please do not contact the tenants, on-site management or staff without prior approval.

CONTRACT FOR DEED

Proposed or Existing Proposed


Loan-to-Purchase Price Ratio 80%

Interest Rate 4.45%

Term 10-Year


Loan Constant 6.04%

Annual Debt Service Payment (2 Years, I/O) ($72,802)

Annual Debt Service Payment (8 Years, P&I) ($98,890)

Maturity December-2026

Outstanding Loan Balance at Maturity $1,385,867

Loan Fee 0.00%

descriptionP R O P E R T Y D E S C R I P T I O N

Property Details

PROPERTY DESCRIPTION

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WInterlachen Manor

8This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2014 Marcus & Millichap X0510489

THE OFFERING

Property Interlachen Manor

Property Address 5220 Interlachen Boulevard

Assessor’s Parcel # 28-117-21-23-0110

Zoning Multifamily

SITE DESCRIPTION

Parking 10 Surface / 17 Garage Spaces

Landscaping Mature

UTILITIES

Water and Sewer Owner

Trash Service Owner

Electric Tenant

Gas Owner

CONSTRUCTION

Foundation Concrete: Spancrete Between Floors

Framing Wood Framing

Exterior Brick

Parking Surface Asphalt

Roof GAF TPO Roof System (2015)

MECHANICAL

HVAC Boiler / Built-In Air Conditioning Units

Fire Protection Fire Alarm System

Utilities Gas: Centerpoint Energy / Electric: Xcel / Water & Sewer: City

Regional Map


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Interlachen Manor


Interlachen Manor

Local Map


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WInterlachen Manor


Interlachen Manor

Location Amenities


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Interlachen Manor


INTERLACHEN MANOR

analysisF I N A N C I A L A N A LY S I S


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WInterlachen Manor


Financial Summary

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Interlachen ManorFINANCIAL ANALYSIS


Financing Contact:

Marcus & Millichap Capital Corporation Kyle Jemtrud (952) 852-9734 [email protected]

Total Number of Units 17

Total Square Feet 19,344 SF

Average Square Feet Per Unit 1,138

Year Built 1967

Net Residual Value

Year Capitalized 2027

Capitalization Rate - Terminal 6.00%

Cost of Sale 3.50%

10 Year Hold - Unleveraged IRR 7.44%

10 Year Hold - Leveraged IRR 15.31%

*Calculation does not include value-add scenario, a potential leveraged IRR of over 20%.

ANALYSIS PERIOD* CAP RATE

2017 (Year 1) 3.75%

2018 (Year 2) 5.70%

2019 (Year 3) 5.93%

2020 (Year 4) 6.17%

2021 (Year 5) 6.36%

Current Physical Occupancy / Market 47% / 99%

Average Marker Rent Per Unit $1,099

Location Class A+

Asset Type Multifamily

PROPERTY DETAIL

REVIEW ANALYSIS*

Sales Price $2,045,000

Sales Price per Unit $120,294

Sales Price per SF $105.72

FINANCING

Interest Rate 4.45%


Years of Interest Only 24 Months

Annual Loan Constant 6.04%

Loan Term 10-Year

Loan to Value 80%



Debt Service Coverage - Year 1 1.05



Rent Roll - Detail

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WInterlachen Manor

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FINANCIAL ANALYSIS


UNIT NUMBER UNIT TYPE SQUARE FEETCURRENT

RENT / MONTHCURRENT RENT / SF / MONTH

SCHEDULED RENT / MONTH

SCHEDULED RENT / SF / MONTH

POTENTIAL RENT / MONTH

POTENTIAL RENT / SF / MONTH

1 2 Bed, 1.75 Bath 1,043 VACANT $0.00 $1,050 $1.01 $1,050 $1.01

2 2 Bed, 1 Bath 940 $810 $0.86 $810 $0.86 $985 $1.05

3 1 Bed, 1 Bath 780 VACANT $0.00 $895 $1.15 $895 $1.15

4 2 Bed, 1.75 Bath 1,043 VACANT $0.00 $1,050 $1.01 $1,050 $1.01

5 2 Bed, 1.75 Bath 1,060 VACANT $0.00 $1,050 $0.99 $1,050 $0.99

6 2 Bed, 1.75 Bath 1,020 VACANT $0.00 $1,050 $1.03 $1,050 $1.03

7 2 Bed, 1.75 Bath, Den 1,345 VACANT $0.00 $1,225 $0.91 $1,225 $0.91

8 2 Bed, 1.75 Bath 1,220 $935 $0.77 $935 $0.77 $1,100 $0.90

9 2 Bed, 1.75 Bath 1,220 $894 $0.73 $894 $0.73 $1,100 $0.90

10 2 Bed, 1.75 Bath, Den 1,360 $1,078 $0.79 $1,078 $0.79 $1,225 $0.90

11 2 Bed, 1.75 Bath 1,043 VACANT $0.00 $1,050 $1.01 $1,050 $1.01

12 2 Bed, 1.75 Bath 1,060 $934 $0.88 $934 $0.88 $1,050 $0.99

13 2 Bed, 1.75 Bath 1,020 $1,020 $1.00 $1,020 $1.00 $1,050 $1.03

14 2 Bed, 1.75 Bath, Den 1,320 $982 $0.74 $982 $0.74 $1,225 $0.93

15 2 Bed, 1.75 Bath 1,265 VACANT $0.00 $1,175 $0.93 $1,175 $0.93

16 2 Bed, 1.75 Bath, Den 1,320 $982 $0.74 $982 $0.74 $1,225 $0.93

17 2 Bed, 1.75 Bath 1,285 $972 $0.76 $972 $0.76 $1,175 $0.91

17 Total / Wtd. Averages 19,344 SF $8,607 $0.80 $17,152 $0.89 $18,860 $0.97

Rent Roll - Summary

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17



ONE BEDROOMUNIT

COUNTAVG SQ

FEET

TOTAL SQUARE

FEET

AVERAGESCHEDULED

RENT

AVERAGESCHEDULEDRENT / SF

MONTHLYINCOME

AVERAGEMARKET

RENT

AVERAGE MARKET

RENT / SF

MONTHLYINCOME

One Bedroom / One Bath 1 780 780 $895 $1.15 $895 $895 $1.15 $895

TWO BEDROOMUNIT

COUNTAVG SQ

FEET

TOTAL SQUARE

FEET

AVERAGESCHEDULED

RENT

AVERAGESCHEDULEDRENT / SF

MONTHLYINCOME

AVERAGEMARKET

RENT

AVERAGE MARKET

RENT / SF

MONTHLYINCOME

Two Bedroom / One Bath 1 940 940 $810 $0.86 $810 $985 $1.05 $985

Two Bedroom / Two Bath 11 1,116 12,279 $1,016 $0.91 $11,180 $1,082 $0.97 $11,900

Two Bedroom / Two Bath + Den 4 1,336 5,345 $1,067 $0.80 $4,267 $1,225 $0.92 $4,900

Total / Wtd. Averages 17 Units 19,344 SF $1,009 $0.89 $17,152 $1,099 $0.97 $18,680

Operating Statement – Income

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18

FINANCIAL ANALYSIS


CURRENT YEAR ONE YEAR TWOADJUSTED 2017 PER 2018 PER NOTES

UNIT UNIT

Income

Effective Rental Income

Gross Potential Rent 224,160 224,160 13,186 230,885 13,581 [1]

Loss / Gain to Lease (18,366) 8.00% (8,966) 4.00% (527) (3,463) 1.50% (204) [2]

Gross Scheduled Rent $205,824 $215,194 $12,658 $227,422 $13,378 [3]

Physical Vacancy (102,912) 50% (43,039) 20% (2,532) (11,371) 5.00% (669) [4]

Economic Vacancy

Non-Revenue Units 0 0.00% 0 0.00% 0 0 0.00% 0

Bad Debt 0 0.00% 0 0.00% 0 0 0.00% 0

Concessions 0 0.00% (2,152) 1.00% (127) (2,274) 1.00% (134) [4]

Total Vacancy (102,912) 50% (45,191) 21% (2,658) (13,645) (803)

Economic Occupancy 50% 79% 94%

Total Effective Rental Income $102,912 $170,003 $10,000 $213,776 $12,575

Other Income

Garage Income 4,320 8,160 480 9,180 540 [5]

Other Income 4,921 5,000 294 5,625 331 [6]

Total Other Income $9,241 $13,160 $774 $14,805 $871

Effective Gross Income $112,153 $183,163 $10,774 $228,581 $13,446

Operating Statement – Expenses

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Notes and assumptions to the above analysis are on the following page.

CURRENT YEAR ONE YEAR TWOADJUSTED 2017 PER 2018 PER NOTES

UNIT UNIT

Expenses

Controllable

Trash Removal 2,852 2,852 168 2,938 173 [7]

Repairs & Maintenance 12,750 12,750 750 13,133 773 [8]

Landscaping 5,100 5,100 300 5,253 309 [9]

Contract Services 4,250 4,250 250 4,378 258 [10]

Payroll 6,000 6,000 353 6,180 364 [11]

General & Administrative 3,400 3,400 200 3,502 206 [12]

Miscellaneous Expenses 500 500 29 515 30 [13]

Management Fee 5,608 5.00% 9,158 5.00% 539 11,429 5.00% 672 [14]

Total Controllable $40,460 $44,010 $2,589 $47,327 $2,784

Non-Controllable

Real Estate Taxes 20,772 28,380 1,669 29,799 1,753 [15]

Insurance 8,500 8,500 500 8,755 515 [16]

Utilities - Electric 2,975 2,975 175 3,064 180 [17]

Utilities - Water & Sewer 7,650 7,650 450 7,880 464 [18]

Utilities - Gas 10,625 10,625 625 10,944 644 [19]

Total Non-Controllable $50,522 $58,130 $3,419 $60,442 $3,555

Reserves $4,250 $4,250 $250 $4,250 $250 [20]

Total Expenses $95,231 $106,391 $6,258 $112,019 $6,589

Expenses as %of EGI 84.90% 58.50% 49.01%

Net Operating Income $16,922 $76,772 $4,516 $116,563 $6,857

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FINANCIAL ANALYSIS


Notes and Assumptions

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(1) Gross Potential Rent - Year One based on current market rent, 2018 reflects growth rate of approximately 3 percent.

(2) Loss-to-Lease - Difference between market rent and current rent roll.

(3) Gross Scheduled Rent - Determined by market rent minus loss-to-lease.

(4) Vacancy - Year One projects an annualized vacancy of 20 percent plus concessions in year one of ownership, 2018 reflects stabilized Rent Roll.

(5) Garage Income - Total 17-covered parking stalls ($50 per month), and 10 off-street parking stalls. Year one projects vacancy as new owner stabilizes rent roll.

(6) Other Income - Broker Pro Forma.

(7) Trash Removal - Year One calculated at $168 per unit; 2018 reflects growth rate for Year 2 Projection.

(8) Repairs & Maintenance - Year One calculated at $750 per unit; 2018 reflects growth rate for Year 2 Projection.

(9) Landscaping - Year One calculated at $300 per unit; 2018 reflects growth rate for Year 2 Projection.

(10) Contract Services - Year One calculated at $250 per unit; 2018 reflects growth rate for Year 2 Projection.

(11) Payroll - Year One calculated at $6,000, or $500 per month; 2018 reflects growth rate for Year 2 Projection.

(12) General & Administrative - Year One calculated at $200 per unit; 2018 reflects growth rate for Year 2 Projection.

(13) Misc. Expenses - Year One calculated at $500; 2018 reflects growth rate for Year 2 Projection.

(14) Management Fee - Calculated at 5% Effective Gross Income.

(15) Real Estate Taxes - Year One represents 2017 proposed Taxes Payable, according to Hennepin County tax records. 2018 reflects growth rate of 5 percent.

(16) Insurance - Year One calculated at $500 per unit; 2018 reflects growth rate for Year 2 Projection.

(17) Utilities: Electric - Year One calculated at $175 per unit; 2018 reflects growth rate for Year 2 Projection.

(18) Utilities: Water & Sewer - Year One calculated at $450 per unit; 2018 reflects growth rate for Year 2 Projection.

(19) Utilities: Gas - Year One calculated at $625 per unit; 2018 reflects growth rate for Year 2 Projection.

(20) Operating Reserves - Calculated at $250 per unit.

Growth Rates – Income

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FINANCIAL ANALYSIS


* Calculated as a percentage of Gross Potential Rent** Calculated as a percentage of Effective Gross Income

ExpensesControllable

Operating Expense 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Management Fee** 5.00%

Non-Controllable

Real Estate Taxes 5.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Insurance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Utilities 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

YEAR 1 2018 2019 2020 2021 2022 2023 2024 2025 2026

IncomeGross Potential Rent 0.0% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Loss / Gain to Lease* 4.0% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%

Physical Vacancy 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%

Economic Vacancy*Concessions 1.00% 0.50% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Total Vacancy 6.00% 5.50% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%

Total Other Income 12.50% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Schedule of Prospective Cash Flow

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ACQUISITION Current/Adj. 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Income

Effective Rental Income

Gross Potential Rent 224,160 224,160 230,885 237,811 244,946 252,294 259,863 267,659 275,689 283,959 292,478

Loss / Gain to Lease (18,336) (8,966) (3,463) (3,567) (3,674) (3,784) (3,898) (4,015) (4,135) (4,259) (4,387)

Gross Scheduled Rent 205,824 215,194 227,422 234,244 241,271 248,510 255,965 263,644 271,553 279,700 288,091

Physical Vacancy (102,912) (43,039) (11,371) (11,712) (12,064) (12,425) (12,798) (13,182) (13,578) (13,985) (14,405)

Economic Vacancy

Concessions 0 (2,152) (2,274) (1,171) 0 0 0 0 0 0 0

Total Vacancy (102,912) (45,191) (13,645) (12,883) (12,064) (12,425) (12,798) (13,182) (13,578) (13,985) (14,405)

Total Effective Rental Income 102,912 170,003 213,776 221,361 229,208 236,084 243,167 250,462 257,976 265,715 273,686

Total Other Income 9,241 13,160 14,805 15,249 15,707 16,178 16,663 17,163 17,678 18,208 18,755

Effective Gross Revenue 112,153 183,163 228,581 236,610 244,915 252,262 259,830 267,625 275,653 283,923 292,441

Expenses

Controllable

Operating Expenses (34,852) (34,852) (35,898) (36,974) (38,084) (39,226) (40,403) (41,615) (42,864) (44,149) (45,474)

Management Fee (5,608) (9,158) (11,429) (11,830) (12,246) (12,613) (12,991) (13,381) (13,783) (14,196) (14,622)

Total Controllable (40,460) (44,010) (47,327) (48,805) (50,329) (51,839) (53,395) (54,996) (56,646) (58,346) (60,096)

Non-Controllable

Real Estate Taxes (20,772) (28,380) (29,799) (30,693) (31,614) (32,563) (33,540) (34,546) (35,582) (36,650) (37,749)

Insurance (8,500) (8,500) (8,755) (9,018) (9,288) (9,567) (9,854) (10,149) (10,454) (10,768) (11,091)

Utilities (21,250) (21,250) (21,888) (22,544) (23,220) (23,917) (24,635) (25,374) (26,135) (26,919) (27,726)

Total Non-Controllable (50,522) (58,130) (60,442) (62,255) (64,123) (66,047) (68,028) (70,069) (72,171) (74,336) (76,566)

Total Expenses (90,981) (102,141) (107,769) (111,060) (114,452) (117,886) (121,422) (125,065) (128,817) (132,682) (136,662)

Capital Reserves (4,250) (4,250) (4,250) (4,250) (4,250) (4,250) (4,250) (4,250) (4,250) (4,250) (4,250)

Net Operating Income 16,922 76,772 116,563 121,300 126,212 130,126 134,157 138,310 142,586 146,992 151,529

Purchase Price / Net Residual Value

Purchase Price (2,045,000)

Net Residual Value 2,525,479

Cash Flow Before Debt Financing 76,772 116,563 121,300 126,212 130,126 134,157 138,310 142,586 146,992 2,677,008

Debt Financing

Loan Amount 1,636,000 (1,385,867)

Closing Costs (88,392)

Debt Service - Principal 0 0 (26,627) (27,836) (29,100) (30,422) (31,804) (33,248) (34,758) (36,337)

Debt Service - Interest (72,802) (72,802) (72,263) (71,054) (69,790) (68,468) (67,086) (65,642) (64,132) (62,553)

Cash Flow After Debt Financing (409,000) 3,970 43,761 22,410 27,322 31,236 35,267 39,420 43,696 48,101 1,103,860

Acquisition Cap Rate 3.75% 5.70% 5.93% 6.17% 6.36% 6.56% 6.76% 6.97% 7.19% 7.41%

Debt Coverage Ratio 1.05 1.60 1.23 1.28 1.32 1.36 1.40 1.44 1.49 1.53

Investor Return

Unleveraged 5.87% 6.48% 6.89% 7.17% 7.39% 7.56% 7.44%

Leveraged 10.98% 13.31% 14.54% 15.20% 15.54% 15.69% 15.31%

Amortization Schedule

Purchase Price $2,045,000 Purchase Price $2,045,000Down Payment $409,000 Down Payment $409,000Loan Amount $1,636,000 Loan Amount $1,636,000Term 24 Term 96Rate 4.45% Amortization 360

Rate 4.45%Rate Type FixedBalance Due $1,385,867

Annual SummaryYear Loan Type Effective Rate Beginning Balance Interest Principal Total Payments Ending Balance1 I/O 4.45% $1,636,000 $72,802 $0 $72,802 $1,636,0002 I/O 4.45% $1,636,000 $72,802 $0 $72,802 $1,636,0003 Amortizing 4.45% $1,636,000 $72,263 $26,627 $98,890 $1,609,3734 Amortizing 4.45% $1,609,373 $71,054 $27,836 $98,890 $1,581,5375 Amortizing 4.45% $1,581,537 $69,790 $29,100 $98,890 $1,552,4376 Amortizing 4.45% $1,552,437 $68,468 $30,422 $98,890 $1,522,0157 Amortizing 4.45% $1,522,015 $67,086 $31,804 $98,890 $1,490,2118 Amortizing 4.45% $1,490,211 $65,642 $33,248 $98,890 $1,456,9639 Amortizing 4.45% $1,456,963 $64,132 $34,758 $98,890 $1,422,20510 Amortizing 4.45% $1,422,205 $62,553 $36,337 $98,890 $1,385,867

Loan Amortization Schedule ‐ Interlachen Manor

Interest Only Amortizing

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competitiveC O M P E T I T I V E P R O P E R T Y S E T

Recent Sales

1

2

3

4

5

1

2

3 4

5

Interlachen Manor

Recent Sales

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COMPETITIVE PROPERTY SET


Francia

Kagin Portfolio

2920 Dean Parkway

2716 West 44th Street

Amber Court Apartments

Interlachen Manor

Average Price per Square Foot

Average Price per Unit

0.00

30.00

60.00

90.00

120.00

150.00

180.00

210.00

240.00

270.00

300.00

Subject AmberCourt

Apartments

2716West44th

Street

2920Dean

Parkway

KaginPortfolio

Francia

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

Subject AmberCourt

Apartments

2716West44th

Street

2920Dean

Parkway

KaginPortfolio

Francia

RECENT SALESInterlachen ManorEDINA, MN

THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS AND SHOULD NOT BE CONSIDERED ANAPPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed orimplied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bearsall risk for any inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Chicago, Inc. © 2016Marcus & Millichap. All rights reserved.

PRICE PER SF AND PRICE PER UNIT

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.50

6.00

Subject AmberCourt

Apartments

2716West44th

Street

2920Dean

Parkway

KaginPortfolio

Francia

Average GRM

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

Subject AmberCourt

Apartments

2716West44th

Street

2920Dean

Parkway

KaginPortfolio

Francia

Average Cap Rate

RECENT SALESInterlachen ManorEDINA, MN


CAP RATE AND GRM

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Interlachen ManorCOMPETITIVE PROPERTY SET


2

1

Units Unit Type

1 1BR/1BA

1 2BR/1BA

11 2BR/1.75BA

4 2BR/1.75BA+Den


Price/Unit $120,294

Price/SF $105.72

CAP Rate 2017 / 2018 3.75% / 5.70%

GRM 2017 / 2018 8.95 / 8.44

Total No. of Units 17

Year Built 1967

Close of Escrow 12/30/2014


Price/Unit $95,455

Price/SF $147

CAP Rate 3.93%

GRM 10.32


Year Built 1959

COMMENTS: The seller was exclusively represented by Marcus & Millichap

Amber Court Apartments 5523 & 5531 Washburn Avenue South, Minneapolis, Minnesota 55410

2716 West 44th Street 2716 West 44th Street, Minneapolis Minnesota 55410

Interlachen Manor (Subject Property) 5220 Interlachen Boulevard, Edina, Minnesota 55436



Price/Unit $161,333

Price/SF $294.55

CAP Rate 2.85%

GRM 13.5


Year Built 1931

Units Unit Type

20 1BR/1BA

2 2BR/1BA

Units Unit Type

15 1BR/1BA

Recent Sales

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5

3

COMMENTS: The seller was exclusively represented by Marcus & Millichap

Units Unit Type

13 1BR/1BA



Price/Unit $166,667

Price/SF $219

CAP Rate 3.67%

GRM 12.36


Year Built 1953



Price/Unit $200,000

Price/SF $173.06

CAP Rate 4.0%

GRM 13.50


Year Built 1916

2920 Dean Parkway 2920 Dean Parkway, Minneapolis, Minnesota 55410

Francia 2222 Girard Avenue South, Minneapolis, Minnesota 55405

Units Unit Type

12 Studio/1BA

11 1BR/1BA

29 2BR/1BA

2 2BR/1.5BA

4 Kagin Portfolio 2901-2915 Dean Parkway, Minneapolis, Minnesota 55410

COMMENTS: The Kagin Portfolio consisted of seven 1930’s vintage style buildings located throughout the lakes area of Uptown and south Minneapolis. The addresses are as follows: 2901 Dean Parkway, 26 West 22nd Street, 2434 Dupont Avenue South, 2120 Aldrich Avenue South, 1435 West 31st Street, 3411 Hennepin Avenue , and 2446 Colfax Avenue South.



Price/Unit $131,146

Price/SF $207

CAP Rate 4.00%

GRM 11.87


Year Built N/A

Units Unit Type

1 Office

43 Studio/1BA

126 1BR/1BA

22 2BR/1BA

Recent Sales

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Rent Comparables

1

2

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5

1

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3

4

5

Rent Comparables

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Edina Towers

Xerxes Manor Apartments

Edina Highland Villa Apartments

Vernon Oaks

Interlachen Manor

Interlachen Manor

White Oaks Apartments

Average Occupancy

0

10

20

30

40

50

60

70

80

90

100

Subject VernonOaks

EdinaHighlands

VillaApartments

WhiteOaks

XerxesManor

Apartments

EdinaTowers

1 Bdr Studio

0

200

400

600

800

1,000

1,200

Subject VernonOaks

EdinaHighlands

VillaApartments

WhiteOaks

XerxesManor

Apartments

EdinaTowers

Average Rents - Studio and 1 Bedroom

RENT COMPARABLESInterlachen ManorEDINA, MN


OCCUPANCY AND AVERAGE RENTS

2 Bdr 3 Bdr

0

300

600

900

1,200

1,500

1,800

2,100

2,400

Subject VernonOaks

EdinaHighlands

VillaApartments

WhiteOaks

XerxesManor

Apartments

EdinaTowers

Average Rents - 2 and 3 Bedrooms



AVERAGE RENTS

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Rent Comparables

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2

1 Vernon Oaks 5400 Vernon Avenue South, Edina, Minnesota, 55436

COMMENTS: Rent reflects current market potential.

COMMENTS: The landlord is responsible for water, sewer, gas, heat and garbage. The tenant is reponsible for electric.


Unit Type SF Rent Rent/SF

1BR/1BA 780 $895 $1.15

2BR/1BA 940 $985 $1.05

2BR/1.75BA 1,116 $1,082 $0.97

2BR/1.75BA+Den 1,336 $1,225 $0.92

Total/Wtd. Avg. 1,138 $1,099 $0.97


Studio 500 $985 $1.97

1BR/1BA 802 $1,035-$1,060 $1.31

2BR/2BA 1,149-1,275 $1,315-$1,525 $1.18

Total/Wtd. Avg. 838 $1,184 $1.49


1BR/1BA 798 $1,145-$1,215 $1.48

2BR/1.5BA 1,112 $1,365-$1,480 $1.28

3BR/2BA 1,800 $2,545 $1.42

Total/Wtd. Avg. 1,237 $1,550 $1.39

No. of Units: 136

Occupancy: 99%

Year Built: 1987

Edina Highland Villa Apartments 5250 Villa Way. Edina, Minnesota 55436


No. of Units: 165

Occupancy: 97%

Year Built: 1967

No. of Units: 17

Occupancy / Market: 47% / 99%

Year Built: 1967

Rent Comparables

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5

4

3



1BR/1BA 700-850 $1,145-$1,415 $1.66

2BR/1BA 975 $1,335-$1,480 $1.45

2BR/2BA 1,079 $1,480-$1,565 $1.42

3BR/2BA 1,732-1,771 $1,865-$2,250 $1.18

Total/Wtd. Avg. 1,145 $1,566 $1.43

No. of Units: 32

Occupancy: 100%

Year Built: 1968

No. of Units: 194

Occupancy: 97%

Year Built: 1969

Edina Towers 6400 Barrie Road, Edina, Minnesota 55435

Xerxes Manor Apartments 5625 Xerxes Avenue South, Edina, Minnesota 55410

White Oaks 3901 West 49th Street, Edina, Minnesota 55424

No. of Units: 72

Occupancy: 99%

Year Built: 1974


1BR/1BA 806 $995 $1.24

2BR/2BA 1,200 $1,140 $0.95

Total/Wtd. Avg. 1,003 $1,067 $1.10

COMMENTS: The landlord is reponsible for water, sewer, gas, heat and garbage. The tenant is responsible for electric.

COMMENTS: The Tenant is responsible for all of the utilites.


1BR/1BA 894 $825-$900 $0.97

2BR/1.5BA 1,025 $1,050-$1,070 $1.04

3BR/1.5BA 1,100 $1,275-$1,300 $1.18

3BR/1.5BA 1,100 $1,275-$1,300

Total/Wtd. Avg. 1,006 $1,070 $1.06

Rent Comparables

1

2

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4

5

1

2

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5

71 France

York Place Apartments

Cornelia Place

Elements of Linden Hills Apartments

Intelachen Manor

Interlachen Manor

One Southdale Place

Rent Comparables: Best in Class

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Average Occupancy

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OneSouthdale

Place

YorkPlace

Apartments

1 Bdr Studio

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2,000

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CorneliaPlace

OneSouthdale

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YorkPlace

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71France

Average Rents - Studio and 1 Bedroom



OCCUPANCY AND AVERAGE RENTS

2 Bdr 3 Bdr

0

400

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1,200

1,600

2,000

2,400

2,800

3,200

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LindenHills

CorneliaPlace

OneSouthdale

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YorkPlace

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71France

Average Rents - 2 and 3 Bedrooms



AVERAGE RENTS

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2

1 Elements of Linden Hills Aparments 4525 France Avenue South, Edina, Minnesota 55410


1BR/1BA 780 $895 $1.15

2BR/1BA 940 $985 $1.05

2BR/1.75BA 1,116 $1,082 $0.97

2BR/1.75BA+Den 1,336 $1,225 $0.92

Total/Wtd. Avg. 1,138 $1,099 $0.97


Studio/1BA 510 $1,225 $2.41

1BR/1BA 673-832 $1,550-$1,660 $2.10

2BR/2BA 972-1,307 $2,297 $2.18

Total/Wtd. Avg. 801 $1,668 $2.18


1BR/1BA 890-1,116 $1,575 $1.58

2BR/2BA 1,326-1,571 $2,225 $1.54

Total/Wtd. Avg. 1,226 $1,900 $1.56

No. of Units: 31

Occupancy: N/A

Year Built: 2014

Cornelia Place 4025 West 65th Street, Edina, Minnesota 55435


No. of Units: 100

Occupancy: 100%

Year Built: 2002

No. of Units: 17

Occupancy / Market: 47% / 99%

Year Built: 1967

COMMENTS: Rent reflects current market potential.

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5

4

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Studio/1BA 554 $1,125 $2.04

1BR/1BA 797 $1,220-$1,425 $1.66

2BR/2BA 1,211 $1,750-$1,850 $1.49

Total/Wtd. Avg. 854 $1,474 $1.73


Studio/1BA 577-590 $1,300-$1,425 $2.34

1BR/1BA 581-1,051 $1,325-$2,590 $2.40

2BR/2BA 968-1,285 $1,950-$3,400 $2.38

3BR/2BA 1,254-1,412 $2,775-$4,140 $2.60

Total/Wtd. Avg. 965 $2,364.38 $2.43

No. of Units: 222

Occupancy: 98%

Year Built: 2014

No. of Units: 241

Occupancy: N/A

Year Built: 2014

71 France 7161 France Avenue South, Edina, Minnesota 55435

York Place Apartments 3121 West 69th Street, Edina, Minnesota 55435

One Southdale Place 6800 York Avenue South, Edina, Minnesota 55435

No. of Units: 117

Occupancy: 100%

Year Built: 2009


Studio/1BA 582 $1,493 $2.57

1BR/1BA 770-1,115 $1,602-$1,941 $1.88

2BR/2BA 1,118-1,663 $2,524-$4,299 $2.46

Total/Wtd. Avg. 972 $2,371.80 $2.30


overviewM A R K E T O V E R V I E W

Property / Location Overview | Value-Add Opportunity

MARKET OVERVIEW

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Interlachen Manor, as part of the Edina Vintage Portfolio, is a boutique, well-kept apartment community being sold by the original developer, owner of over 50 years .

Constructed in 1967, Interlachen Manor offers a combination of vintage charm integrated with modern day conveniences . Located in the heart of Edina near Interlachen Golf Club and 50th & France, Interlachen Manor offers residents the most convenient access to dining, grocery, top rated schools, business, and entertainment; along with the historical character and flair of a boutique apartment community .

Interlachen Manor consists of 17-units, including 1 one bedroom, one bath unit of 780 square foot, 1 two bedroom, 1 bath unit of 940 square foot, 11 two bedroom, two bathroom units of 1,116 square feet, and 4 two bedroom, two bathroom units plus den, of an average 1,336 square feet . The property consists of 17-covered, and 10 off-street parking stalls . Tenants enjoy vintage character with modern day conveniences, including original custom design, underground heated parking, elevator, and the overall quality and care of a long term/pride of ownership asset .

Althought Interlachen Manor has been meticulously maintained since original development, the properties rents have not kept pace with market growth over the past decade due to the long-term nature of current ownership . By simply increasing the marketing budget, and adjusting renewals and new residence to market, a buyer can immediately create a higher Net Operating Income (NOI) than the current owner’s performance . Furthermore, with renovations to the kitchens, bathrooms, and common areas - in conjunction with the existing quality decor together with its Class A+ location, this property is poised to compete with the top rents in the market .

If fact, at a current average market rent level of $895, or $1 .15 per square foot for a one bedroom, one bathroom unit, $985, or $1 .05 per square foot for a two bedroom, one bathroom unit, $1,082, or $0 .97 per square foot for a two bedroom, two bathroom unit, and $1,225, or $0 .92 per square foot for a two bedroom, two bathroom unit plus den, respectfully, the rent level remains well insulated from newly constructed market leaders by over 70 percent, suppressing any competition concerns; potentially allowing further upside of $150 - $350 per unit through in-unit and common area upgrades, depending on level of improvement .

Location Highlights

■■ Lake Harriet, Lakes Area of Minneapolis, In Short Commute to Downtown Minneapolis

■■ Southdale Mall, 50th & France, Galleria of Edina

■■ Interlachen Country Club, Edina Country Club,

■■ Nearby Grocery, Retail, Fine Dining, and Entertainment

■■ $1M+ Single Family New construction

■■ One of the Top School Districts in Twin Cities

MARKET OVERVIEW

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GeographyThe Minneapolis-Saint Paul metro is situated in the southeastern portion of central Minnesota and extends into western Wisconsin . Nearly 1,000 of Minnesota’s 10,000 lakes are located within the metro, along with the Mississippi, Minnesota and St . Croix rivers . The Twin Cities of Minneapolis and St . Paul straddle the Mississippi River, with Minneapolis located upstream from Saint Paul . The metro covers 6,364 square miles of fertile soil atop limestone and sandstone and includes 13 counties, two of which are in Wisconsin .

Market Highlights

An abundance of higher education

■■ There are more than 20 colleges and universities in the Twin Cities

Attractive business and living environment

■■ Companies are attracted to the region’s high level of education and strong work ethic

Concentration of large-scale firms

■■ Minneapolis-Saint Paul is home to 16 Fortune 500 firms, including Target, UnitedHealth Group, 3M and General Mills

Minneapolis - Saint Paul

MARKET OVERVIEW

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Minneapolis-St. Paul metro is the largest metropolitan area in the state of Minnesota and is served by the

Minneapolis-St. Paul International Airport and six reliever airports.

Two major freeway systems run through the region: Interstate 94 and Interstate 35. I-35 splits into I-35E, which

runs through St. Paul, and I-35W, which passes through Minneapolis. Two beltline freeways, Interstates 494

and 694, facilitate travel around the suburbs, and Interstate 394 runs east to west from I-94 to I-494.

Metro Transit operates bus, commuter rail and light-rail systems throughout the metro, and some suburban

cities have their own bus systems. The METRO Blue Line runs along Hiawatha Avenue, connecting downtown

Minneapolis with the airport and Mall of America, while the Green line links Minneapolis with the University of

Minnesota and Downtown St. Paul. The Northstar commuter line services the northern suburbs.

Infrastructure

The Minneapolis-St. Paul Metro is: 75 miles from Rochester 300 miles from Milwaukee 400 miles from Chicago 600 miles from Indianapolis

Airports Minneapolis-St. Paul International Airport Six reliever airports

Major Roadways Interstates 35W, 35E, 94, 394, 494 and 694

Rail Freight – BNSF and Union Pacific Passenger – Amtrak Commuter – Northstar and METRO light rail

The 13-county Minneapolis-St. Paul-Bloomington metro contains more than 200 municipalities and registers a

population of more than 3.5 million. The Twin Cities metro area encompasses the seven core counties of the

region, the largest being Hennepin County. Minneapolis is the most populated city in the state, with 404,400

citizens, followed by St. Paul, the capital city, with 298,500 residents.

Metro

Largest Cities in Metro by Population

Minneapolis 404,400

St. Paul 298,500

Bloomington 86,700

Brooklyn Park 80,500

Plymouth 76,000

Maple Grove 67,700

* ForecastSources: Marcus & Millichap Research Services; U.S. Census Bureau; Experian

MINNEAPOLIS-ST. PAUL

INTERLACHEN MANOR

36

Largest Cities In Metro by PopulationMinneapolis 404,400

Saint Paul 298,500

Bloomington 86,700

Brooklyn Park 80,500

Plymouth 76,000

Maple Grove 67,700

* Forecast

Sources: Marcus & Millichap Research Services, U.S. Census Bureau, Experian

InfrastructureMinneapolis-Saint Paul metro is the largest metropolitan area in the state of Minnesota and is served by the Minneapolis-Saint Paul International Airport and six reliever airports .

Two major freeway systems run through the region: Interstate 94 and Interstate 35 . I-35 splits into I-35E, which runs through Saint Paul, and I-35W, which passes through Minneapolis . Two beltline freeways, Interstates 494 and 694, facilitate travel around the suburbs, and Interstate 394 runs east to west from I-94 to I-494 .

Metro Transit operates bus, commuter rail and light-rail systems throughout the metro, and some suburban cities have their own bus systems . The METRO Blue Line runs along Hiawatha Avenue, connecting downtown Minneapolis with the airport and Mall of America, while the Green line links Minneapolis with the University of Minnesota and Downtown Saint Paul . The Northstar commuter line services the northern suburbs .

MetroThe 13-county Minneapolis-Saint Paul-Bloomington metro contains more than 200 municipalities and registers a population of more than 3 .5 million . The Twin Cities metro area encompasses the seven core counties of the region, the largest being Hennepin County . Minneapolis is the most populated city in the state, with 404,400 citizens, followed by Saint Paul, the capital city, with 298,500 residents .


AIRPORTS ■■ Minneapolis - Saint Paul International Airport■■ Six Reliever Airports

MAJOR ROADWAYS ■■ Interstates 35W and 35E■■ Highways 94, 394, 494 and 694

RAIL■■ Freight - BNSF and Union Pacific■■ Passenger - Amtrak■■ Commuter - Northstar and METRO Light Rail

THE MINNEAPOLIS - SAINT PAUL METRO IS:■■ 75 miles from Rochester■■ 300 miles from Milwaukee■■ 400 miles from Chicago■■ 600 miles from Indianapolis

MARKET OVERVIEW

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EconomyThe metro has a diverse economic base and is home to 16 Fortune 500 companies . The local GMP will increase by an estimated 3 .4 percent this year .

The Twin Cities are involved in all aspects of the food delivery system, from initial production to final sale . Similar to many other Midwestern cities, the metro has a strong manufacturing base, encompassing both traditional industry and high-tech manufacturing . Relative to other areas, the metro has a large concentration of technology companies . Many are biomedical firms developed from research at the University of Minnesota and the Mayo Clinic, located 75 miles south of the metro in Rochester . Google has established a tech hub in Minneapolis to help foster and nurture startups . The region is also the base of a number of major retailers, including Select Comfort, Target and Best Buy .

Minneapolis houses the Ninth Federal Reserve District, which services Minnesota, the Dakotas, Montana and portions of Michigan and Wisconsin . A number of financial and insurance institutions are also headquartered or have significant operations locally .

An ability to handle air, land, river and sea transportation ranks the metro among the top in the nation for its logistics infrastructure . Its location in the upper Midwest has made the Twin Cities a hub for motor freight companies . Barge lines operate on the Mississippi, Minnesota and St . Croix rivers, transporting agricultural goods to the world via the Mississippi . Minneapolis is only 150 miles from the Port of Duluth, which connects to the Atlantic Ocean through the Great Lakes/St . Lawrence Seaway System .


The metro has a diverse economic base and is home to 16 Fortune 500

companies. The local GMP will increase by an estimated 3.4 percent this year.

The Twin Cities are involved in all aspects of the food delivery system, from initial

production to final sale. Similar to many other Midwestern cities, the metro has a

strong manufacturing base, encompassing both traditional industry and high-tech

manufacturing. Relative to other areas, the metro has a large concentration of

technology companies. Many are biomedical firms developed from research at

the University of Minnesota and the Mayo Clinic, located 75 miles south of the

metro in Rochester. Google has established a tech hub in Minneapolis to help

foster and nurture startups. The region is also the base of a number of major

retailers, including Select Comfort, Target and Best Buy.

Minneapolis houses the Ninth Federal Reserve District, which services

Minnesota, the Dakotas, Montana and portions of Michigan and Wisconsin. A

number of financial and insurance institutions are also headquartered or have

significant operations locally.

An ability to handle air, land, river and sea transportation ranks the metro among

the top in the nation for its logistics infrastructure. Its location in the upper

Midwest has made the Twin Cities a hub for motor freight companies. Barge lines

operate on the Mississippi, Minnesota and St. Croix rivers, transporting

agricultural goods to the world via the Mississippi. Minneapolis is only 150 miles

from the Port of Duluth, which connects to the Atlantic Ocean through the Great

Lakes/St. Lawrence Seaway System.

Economy

* ForecastSources: Marcus & Millichap Research Services; Bureau of Economic Analysis; Moody’s Analytics; U.S. Census Bureau; Fortune


INTERLACHEN MANOR

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MARKET OVERVIEW

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Rents

Sales Trends

** Trailing 12 months through 2QSources: Marcus & Millichap Research Services; CoStar Group, Inc.; Real Capital Analytics

* ForecastSources: Marcus & Millichap Research Services; MPF Research

INTERLACHEN MANOR

MINNEAPOLIS-ST. PAUL METRO AREA

45

Sales activity inched up 4 percent in the most recent four quarters, after surging 32 percent in the prior 12-month period.

Heightened apartment construction over the past several years is attracting out-of-state institutions and funds to newer

assets. Buildings in trendy neighborhoods surrounding downtown Minneapolis are especially sought after.

The average price rose 7 percent over the last 12 months to $120,000 per unit in June. Newer assets close to the

Minneapolis core can trade above $300,000 per door, while more affordable options can be located farther out.

Cap rates continue to inch down. Assets with upside potential will typically begin trading in the mid-5 percent range but can

extend below that for premium properties. Class C properties, meanwhile, are generally 100 to 200 basis points higher.

Outlook: As construction extends farther outward from the core, suburban operators need to keep abreast of increased

competition. Owners of properties in need of an upgrade may find this an opportune time to list, while buyers are plentiful.

The average effective rent soared 5.9 percent year over year to $1,141 per month at midyear, which

equates to $1.26 per square foot. This was the largest 12-month surge since 2008. In the same period

last year rents jumped 4.7 percent.

The greatest rent growth among submarkets was in South Minneapolis/Richfield. Here effective rent

shot up 13 percent in the last 12-month period to $1,124 in June. The conversion of a 700-unit low-

income complex to market-rate rentals was one of the contributing factors.

Higher vacancy in new apartments suppressed rent growth well below the metro average in this

vintage. The average effective rent in buildings completed since 2010 rose 2.5 percent over the last four

quarters to $1,764 per month at midyear.

Outlook: Strong tenant demand for apartments and the tight vacancy rate will continue to drive rent

growth. The average effective rents will climb 5.7 percent in 2016 to $1,161 per month.

RentsThe average effective rent soared 5 .9 percent year over year to $1,141 per month at midyear, which equates to $1 .26 per square foot . This was the largest 12-month surge since 2008 . In the same period last year rents jumped 4 .7 percent .

The greatest rent growth among submarkets was in South Minneapolis/Richfield . Here effective rent shot up 13 percent in the last 12-month period to $1,124 in June . The conversion of a 700-unit low-income complex to market-rate rentals was one of the contributing factors .

Higher vacancy in new apartments suppressed rent growth well below the metro average in this vintage . The average effective rent in buildings completed since 2010 rose 2 .5 percent over the last four quarters to $1,764 per month at midyear .

Outlook: Strong tenant demand for apartments and the tight vacancy rate will continue to drive rent growth . The average effective rents will climb 5 .7 percent in 2016 to $1,161 per month .

Sales TrendsSales activity inched up 4 percent in the most recent four quarters, after surging 32 percent in the prior 12-month period . Heightened apartment construction over the past several years is attracting out-of-state institutions and funds to newer assets . Buildings in trendy neighborhoods surrounding downtown Minneapolis are especially sought after .

The average price rose 7 percent over the last 12 months to $120,000 per unit in June . Newer assets close to the Minneapolis core can trade above $300,000 per door, while more affordable options can be located farther out .

Cap rates continue to inch down . Assets with upside potential will typically begin trading in the mid-5 percent range but can extend below that for premium properties . Class C properties, meanwhile, are generally 100 to 200 basis points higher .

Outlook: As construction extends farther outward from the core, suburban operators need to keep abreast of increased competition . Owners of properties in need of an upgrade may find this an opportune time to list, while buyers are plentiful .


* ForecastSources: Marcus & Millichap Research Services, BLS, Moody’s Analytics, Experian

MARKET OVERVIEW

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Large employers in the Twin Cities area include the state of Minnesota, the U.S. government and the University of Minnesota. Other major employers fall within the banking,

financial services, technology and healthcare sectors.

Wells Fargo, Ameriprise Financial and US Bank drive the banking and financial services sector, while Allina Health System, Fairview Health Services and United Health

Group Inc. are key players in the growing healthcare industry.

Technology companies such as 3M, St. Jude Medical and Medtronic maintain large presences in the region. Best Buy and Target have significant workforces in the retail

sector, as both have headquarters here.

The Mall of America, located in Bloomington, is one of the most popular tourist destinations in the nation, with roughly 40 million visitors annually, making its local economic

impact significant. The mall employs more than 11,000 year-round workers and generates nearly $2 billion annually in economic activity for the state. Work will be

completed this year on a $325 million expansion of the mall, which will provide 50 to 75 new shops and restaurants as well as 180,000 square feet of office space and a

342-room JW Marriott hotel.

Employers

Major Employers

Target Corp.

University of Minnesota

Allina Health System

Fairview Health Services

Best Buy Co. Inc.

Wells Fargo Minnesota

3M Co.

United Health Group Inc.

Health Partners

U.S. Bancorp

* ForecastSources: Marcus & Millichap Research Services; Moody’s Analytics; BLS


INTERLACHEN MANOR

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EmployersLarge employers in the Twin Cities area include the state of Minnesota, the U .S . government and the University of Minnesota . Other major employers fall within the banking, financial services, technology and healthcare sectors .

Wells Fargo, Ameriprise Financial and US Bank drive the banking and financial services sector, while Allina Health System, Fairview Health Services and United Health Group Inc . are key players in the growing healthcare industry .

Technology companies such as 3M, St . Jude Medical and Medtronic maintain large presences in the region . Best Buy and Target have significant workforces in the retail sector, as both have headquarters here .

The Mall of America, located in Bloomington, is one of the most popular tourist destinations in the nation, with roughly 40 million visitors annually, making its local economic impact significant . The mall employs more than 11,000 year-round workers and generates nearly $2 billion annually in economic activity for the state . Work will be completed this year on a $325 million expansion of the mall, which will provide 50 to 75 new shops and restaurants as well as 180,000 square feet of office space and a 342-room JW Marriott hotel .


* ForecastSources: Marcus & Millichap Research Services, AGS, Experian, Moody’s Analytics, U .S . Census Bureau

MARKET OVERVIEW

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DemographicsPopulation growth in the metro has exceeded the national level since 1990 and will continue to do so over the next five years . Gains are expected to register 0 .9 percent annually through 2020 . High-growth areas typically fall outside of the urban core; however, new apartment and condo developments recently completed and planned in the central cities will likely boost the populations in both Minneapolis and Saint Paul in the upcoming years .

Robust growth in the metro has been supported by an expanding population of well-educated and highly skilled young professionals . The region is home to the University of Minnesota, which has one of largest student populations in the United States at 50,700 . Many of the graduates remain in the area, employed by large corporations headquartered in the region . More than 38 percent of residents have attained at least a bachelor’s degree, compared with just 29 percent for the country . The highly skilled workforce has helped raise the median household income to nearly $70,500 annually, well above the national median .

Above-average household incomes have enabled more than 70 percent of residents in the metro to own their own home, which is higher than the U .S . rate at 64 percent . Home prices will rise faster than household incomes during the next five years; the median price is approaching $224,900 .


Population growth in the metro has exceeded the national level since 1990 and will continue to do so over the next five years. Gains are expected to register 0.9 percent

annually through 2020. High-growth areas typically fall outside of the urban core; however, new apartment and condo developments recently completed and planned in the

central cities will likely boost the populations in both Minneapolis and St. Paul in the upcoming years.

Robust growth in the metro has been supported by an expanding population of well-educated and highly skilled young professionals. The region is home to the University

of Minnesota, which has one of largest student populations in the United States at 50,700. Many of the graduates remain in the area, employed by large corporations

headquartered in the region. More than 38 percent of residents have attained at least a bachelor’s degree, compared with just 29 percent for the country. The highly skilled

workforce has helped raise the median household income to nearly $70,500 annually, well above the national median.

Above-average household incomes have enabled more than 70 percent of residents in the metro to own their own home, which is higher than the U.S. rate at 64 percent.

Home prices will rise faster than household incomes during the next five years; the median price is approaching $224,900.

Demographics


* ForecastSources: Marcus & Millichap Research Services; AGS; Experian; Moody’s Analytics; U.S. Census Bureau

INTERLACHEN MANOR

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The information contained in the market overview comes from sources deemed to be reliable, however, no representation, warranty or guarantee, express or implied, may be made as to the accuracy or reliability of the information contained herein . The most timely data available at time of production, including estimates and forecasts, were used and may be subject to revision .

MARKET OVERVIEW

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Quality of LifeThe vibrant metro area is the entertainment and cultural center of the upper Midwest . Scenery in the metro includes contemporary skylines, historic architecture and greenways of parks, lakes and the Mississippi, St . Croix and Minnesota rivers . Outdoor venues include the Como Park Zoo, Marjorie McNeely Conservatory, the Minnesota Zoo, the Minnesota Landscape Arboretum and a number of ski runs and golf courses .

The region is home to many professional sports teams, including the Minnesota Vikings, the Minnesota Twins, the Minnesota Timberwolves, the Minnesota Wild and the Minnesota United . College sports are also enjoyed at the University of Minnesota Twin Cities campus . The Vikings new facility (US Bank Stadium) will be completed in time for the 2016 football season . The metro is scheduled to host Super Bowl 52 in 2018 and the Men’s NCAA Final Four in 2019 .

The Twin Cities are noted for their array of theaters, orchestras, art museums and gardens . These include the Walker Art Center, Hennepin County Library, the Guthrie Theater and the Minneapolis Institute of Arts . The region has more than 100 theater venues, making it the third-largest theater market in the country . Arts education is also strong in the area, supported by the Minneapolis College of Arts and Design, the Children’s Theatre Company, MacPhail Center for the Arts, Perpich Center for Arts Education and a variety of education programs at local museums .

The vibrant metro area is the entertainment and cultural center of the upper Midwest. Scenery in the metro includes contemporary skylines, historic architecture and

greenways of parks, lakes and the Mississippi, St. Croix and Minnesota rivers. Outdoor venues include the Como Park Zoo, Marjorie McNeely Conservatory, the Minnesota

Zoo, the Minnesota Landscape Arboretum and a number of ski runs and golf courses.

The region is home to many professional sports teams, including the Minnesota Vikings, the Minnesota Twins, the Minnesota Timberwolves, the Minnesota Wild and the

Minnesota United. College sports are also enjoyed at the University of Minnesota Twin Cities campus. The Vikings new facility (US Bank Stadium) will be completed in time

for the 2016 football season. The metro is scheduled to host Super Bowl 52 in 2018 and the Men's NCAA Final Four in 2019.

The Twin Cities are noted for their array of theaters, orchestras, art museums and gardens. These include the Walker Art Center, Hennepin County Library, the Guthrie

Theater and the Minneapolis Institute of Arts. The region has more than 100 theater venues, making it the third-largest theater market in the country. Arts education is also

strong in the area, supported by the Minneapolis College of Arts and Design, the Children’s Theatre Company, MacPhail Center for the Arts, Perpich Center for Arts

Education and a variety of education programs at local museums.

Quality of Life


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* ForecastSources: Marcus & Millichap Research Services; National Association of Realtors; Moody’s Analytics; U.S. Census Bureau

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MARKET OVERVIEW

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2016 Multifamily Forecast

Construction: Following the completionof 4,700 units in 2015, developers willbring 3,700 rentals into service this year.Although more than a quarter of theapartments will be located in theDowntown Minneapolis/Universitysubmarket, nearly all of the metro’ssubmarkets will receive deliveries in 2016.

Vacancy: Steady employment growthand a slowdown in the pace ofdeliveries will produce a 30-basis-point tightening in the vacancy rateduring 2016 to 2.6 percent. This is oneof the lowest rates in the nation. In2015, vacancy rose 20 basis points onnet absorption of 3,900 units.

Rents: As vacancy continues to tighten,rents are climbing. Effective rent willadvance 5.7 percent in 2016 to anaverage of $1,161 per month. Thisfollows growth of 4.8 percent last year.Since the end of 2010, rents havejumped 21 percent.

Employment: Payrolls will expand 1.8percent in 2016 with the addition of35,000 new workers. This compareswith a 1.7 percent increase last yearthat was led by gains in the educationand health services sector. Metrowide,nearly 130,000 jobs have been addedin the last five years.

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Development Easing, Investors Active in Minneapolis-St. Paul

1.8%increasein total employment

unitswill be completed

3,700

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30

5.7%increasein effective rents

MINNEAPOLIS-ST. PAUL METRO AREA

Apartment construction is slowing from the rapid pace of two years ago but will remain

above the 10-year average in 2016. Steady job creation and an unemployment rate that has

persistently stayed below 4 percent for the last 26 months are requiring more companies to

recruit workers from outside of the area. This is attracting job seekers to the region and

generating a need for housing, which bodes well for apartments. Employment in the Downtown

East neighborhood is surging as Wells Fargo relocated 5,000 workers into its two new office

towers and U.S. Bank stadium opened in July. In addition to the Vikings football games, the

stadium will also host the ESPN X games in 2017 and 2018, along with the Super Bowl in 2018

and the Final Four in 2019. The facilities are adjacent to the light rail and these jobs should

generate demand for rentals that are within an easy transit commute. Redevelopment in the

neighborhood is changing the vitality of the area with apartments, hotels and additional dining

opportunities in the works in the surrounding blocks. Throughout the metro, vacancy will tighten

further this year, facilitating strong rent growth.

New apartment deliveries keep institutions and funds active. Developers listing buildings to

fund new projects are drawing out-of-state investors to the region. Bidding for these assets is

intense at cap rates beginning in the mid-5 percent area. Some unsuccessful bidders for these

properties are considering older buildings in trendy neighborhoods, especially those

surrounding downtown Minneapolis where the cost of owning a home is prohibitive to many

renters. Other investors are targeting large suburban complexes throughout the metro with units

and amenities that can be quickly upgraded and rents adjusted to market rate. Initial yields for

these assets typically begin in the low-5 percent span. Investors in search of higher yields,

meanwhile, are moving into older communities such as Anoka or Richfield where some

midcentury assets will trade at cap rates above 6 percent.


Development Easing, Investors Active in Minneapolis - Saint PaulApartment construction is slowing from the rapid pace of two years ago but will remain above the 10-year average in 2016 . Steady job creation and an unemployment rate that has persistently stayed below 4 percent for the last 26 months are requiring more companies to recruit workers from outside of the area . This is attracting job seekers to the region and generating a need for housing, which bodes well for apartments . Employment in the Downtown East neighborhood is surging as Wells Fargo relocated 5,000 workers into its two new office towers and U .S . Bank stadium opened in July . In addition to the Vikings football games, the stadium will also host the ESPN X games in 2017 and 2018, along with the Super Bowl in 2018 and the Final Four in 2019 . The facilities are adjacent to the light rail and these jobs should generate demand for rentals that are within an easy transit commute . Redevelopment in the neighborhood is changing the vitality of the area with apartments, hotels and additional dining opportunities in the works in the surrounding blocks . Throughout the metro, vacancy will tighten further this year, facilitating strong rent growth .

New apartment deliveries keep institutions and funds active . Developers listing buildings to fund new projects are drawing out-of-state investors to the region . Bidding for these assets is intense at cap rates beginning in the mid-5 percent area . Some unsuccessful bidders for these properties are considering older buildings in trendy neighborhoods, especially those surrounding downtown Minneapolis where the cost of owning a home is prohibitive to many renters . Other investors are targeting large suburban complexes throughout the metro with units and amenities that can be quickly upgraded and rents adjusted to market rate . Initial yields for these assets typically begin in the low-5 percent span . Investors in search of higher yields, meanwhile, are moving into older communities such as Anoka or Richfield where some midcentury assets will trade at cap rates above 6 percent .

Demographic Summary

MARKET OVERVIEW

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POPULATION 1 Miles 3 Miles 5 Miles 2020 Projection

Total Population 9,934 118,465 316,936

2015 Estimate


2010 Census


2000 Census


Daytime Population

2015 Estimate 8,904 126,136 380,198

HOUSEHOLDS 1 Miles 3 Miles 5 Miles 2020 Projection

Total Households 4,154 53,595 146,337

2015 Estimate


Average (Mean) Household Size 2.41 2.19 2.14

2010 Census


2000 Census


Growth 2015-2020 2.09% 1.83% 1.34%

HOUSING UNITS 1 Miles 3 Miles 5 Miles Occupied Units

2020 Projection 4,154 53,595 146,337

2015 Estimate 4,140 54,573 149,608

Owner Occupied 3,248 33,990 84,451

Renter Occupied 821 18,641 59,954

Vacant 71 1,942 5,203

Persons In Units

2015 Estimate Total Occupied Units 4,069 52,631 144,405

1 Person Units 29.71% 36.40% 38.53%

2 Person Units 33.96% 33.59% 33.54%

3 Person Units 13.25% 13.08% 12.69%

4 Person Units 13.86% 11.07% 9.61%

5 Person Units 7.37% 4.30% 3.66%

6+ Person Units 1.82% 1.56% 1.97%

POPULATION 1 Miles 3 Miles 5 Miles 2020 Projection


2015 Estimate


2010 Census


2000 Census


Daytime Population

2015 Estimate 8,904 126,136 380,198

HOUSEHOLDS 1 Miles 3 Miles 5 Miles 2020 Projection


2015 Estimate


Average (Mean) Household Size 2.41 2.19 2.14

2010 Census


2000 Census


Growth 2015-2020 2.09% 1.83% 1.34%

HOUSING UNITS 1 Miles 3 Miles 5 Miles Occupied Units

2020 Projection 4,154 53,595 146,337

2015 Estimate 4,140 54,573 149,608

Owner Occupied 3,248 33,990 84,451

Renter Occupied 821 18,641 59,954

Vacant 71 1,942 5,203

Persons In Units

2015 Estimate Total Occupied Units 4,069 52,631 144,405

1 Person Units 29.71% 36.40% 38.53%

2 Person Units 33.96% 33.59% 33.54%

3 Person Units 13.25% 13.08% 12.69%

4 Person Units 13.86% 11.07% 9.61%

5 Person Units 7.37% 4.30% 3.66%

6+ Person Units 1.82% 1.56% 1.97%

Demographic Summary

Demographic data © 2015 by Experian/Applied Geographic Solutions.

MARKET OVERVIEW

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Race and Ethnicity The current year racial makeup of your selected area is as follows: 93 .67% White, 1 .21% Black, 0 .01% Native American and 2 .73% Asian/Pacific Islander . Compare these to US averages which are: 70 .98% White, 12 .77% Black, 0 .19% Native American and 5 .25% Asian/Pacific Islander . People of Hispanic origin are counted independently of race . People of Hispanic origin make up 1 .34% of the current year population in your selected area . Compare this to the US average of 17 .53% .

Housing The median housing value in your area was $375,761 in 2015, compare this to the US average of $185,104 . In 2000, there were 3,016 owner occupied housing units in your area and there were 689 renter occupied housing units in your area . The median rent at the time was $870 .

Employment In 2015, there are 3,788 employees in your selected area, this is also known as the daytime population . The 2000 Census revealed that 85 .91% of employees are employed in white-collar occupations in this geography, and 15 .44% are employed in blue-collar occupations . In 2015, unemployment in this area is 1 .94% . In 2000, the average time traveled to work was 21 .00 minutes .

PopulationIn 2015, the population in your selected geography is 9,777 . The population has changed by 9 .03% since 2000 . It is estimated that the population in your area will be 9,934 .00 five years from now, which represents a change of 1 .61% from the current year . The current population is 46 .89% male and 53 .11% female . The median age of the population in your area is 44 .58, compare this to the US average which is 37 .55 . The population density in your area is 3,104 .07 people per square mile .

Households There are currently 4,069 households in your selected geography . The number of households has changed by 9 .82% since 2000 . It is estimated that the number of households in your area will be 4,154 five years from now, which represents a change of 2 .09% from the current year . The average household size in your area is 2 .41 persons

Income In 2015, the median household income for your selected geography is $103,442, compare this to the US average which is currently $54,148 . The median household income for your area has changed by 38 .57% since 2000 . It is estimated that the median household income in your area will be $115,959 five years from now, which represents a change of 12 .10% from the current year . The current year per capita income in your area is $62,752, compare this to the US average, which is $29,638 . The current year average household income in your area is $150,684, compare this to the US average which is $77,468 .

Geography: 1-3-5 Miles

exclusively listedExclusively listed by:

www.marcusmillichap.com

Investment Sales:

Mox GundersonAssociate Vice President Investments MINNEAPOLISTel: (952) 852-9713Fax: (952) [email protected] License: MN 40237387 | ND 8586

Dan LinnellVice President Investments MINNEAPOLISTel: (952) 852-9770Fax: (952) [email protected] License: MN 40211216 | ND 8585

Josh Talberg - Lead AgentSenior AssociateMINNEAPOLISTel: (952) 852-9769Fax: (952) [email protected] License: MN 40124349

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