SHADYLANE ESTATES MHC PROPERTY DETAILS...ADDRESS 2709 Capitol Ave, Warren, MI 48091 COUNTY Macomb YEAR BUILT 1959/1965/1969 (3 phases) ... DENSITY 17.68 sites/acre MH PHYSICAL OCCUPANCY

SITE INFORMATION

ADDRESS 2709 Capitol Ave, Warren, MI 48091

COUNTY Macomb

YEAR BUILT 1959/1965/1969 (3 phases)

TAX PARCEL IDS 12-13-30-376-004/12-13-30-380-003*

SITES 244

COMMUNITY TYPE All Ages

LAND SIZE 13.8

DENSITY 17.68 sites/acre

MH PHYSICAL OCCUPANCY 94.26% (230 sites as of Jan 2020)

MH ECONOMIC OCCUPANCY 71.31% (174 sites as of Jan 2020)

INVENTORY HOMES 168 (112 occ as of Jan 2020)

AVERAGE LOT RENT $367 (includes trash)

LAST RENT INCREASE** May-19

ROADS Asphalt

FLOODPLAIN Zone X

ZONING R-4 (Mobile Home Park)

UTILITIES

WATER City of Warren (Billed back to tenants)

SEWER City of Warren (Billed back to tenants)

ELECTRICITY DTE (Direct billed to tenants)

GAS Consumer Energy (Direct billed to tenants)

TRASH Waste Management (Included in rent)

CABLE Comcast and WOW (Direct billed to tenants)

DEMOGRAPHIC INFORMATION 1 MILE 5 MILES 10 MILES

2019 Population Estimate 13,952 358,801 1,399,349

Population Growth 2010 - 2019 1.94% -1.26% -1.79%

2019 Renter Occupied Housing Percentage 32.8% 33.4% 34.0%

2019 Owner Occupied Housing Percentage 56.5% 51.8% 49.6%

2019 Estimated Average Household Income $58,247 $63,030 $67,703

2019 Estimated Average Owner-Occupied Housing Value $104,912 $151,596 $175,548

Source: U.S. Census Bureau

• Shadylane Estates MHC is a 3-star all-age community positioned on approximately 14 acres of land and serviced by public utilities. The community is conveniently located minutes away from I-75 and I-696, providing easy access to other larger markets such as Detroit (10-miles) and Novi (22-miles).

• park owned homes. The average adjusted monthly lot rent is $476 according to the JLT report, while Shadylane’s adjusted monthly lot rent is $353. Increasing rents to the market level would add over $256,000 in additional annual revenue for a new owner.

• The offering includes 168 park-owned homes, of which 112 are currently occupied mostly as pure rentals with a few lease-to-own averaging $243 for the home payment.

• The population within a 10-mile radius of the community is 1,400,000 with a strong average household income of $67,700. Macomb County is Michigan’s third most populated county, home to three of the top ten most populated communities in the state (Warren, Sterling Heights, and Clinton Township).

• Macomb County is home to a robust transportation and warehousing sector that support the County’s bedrock industry of manufacturing. With a large network of manufacturers producing more than $34 billion of goods each year, the county’s economy depends on industries providing cargo transportation, warehousing/storage of goods, and support activities related to modes of transportation. In fact, the transportation and logistics warehousing industry include more than 500 businesses with total employment of 8,500 workers.

• Amazon recently opened a distribution center in Shelby Township and are currently employing 200 people in the area. The company anticipates reaching 1,000 employees at this location within the next couple of years.

• Macomb County had the largest manufacturing job increase in the nation from 2016 to 2018. According the US Bureau of Labor Statistics, Macomb County added approximately 9,118 manufacturing jobs from the fourth quarter of 2016, to the second quarter of 2018. The report indicates total employment went from 65,137 to 74,255 within that time frame.

INVESTMENT HIGHLIGHTS

*Excludes 5 small parcels (see Online Document Library)**No formal process for raising or assessing “market rent” and renewals are max of $25 increase upon maturity

A 3-COMMUNITY, 534-SITE MHC PORTFOLIONOW PRICED: $20,500,000 (HOMES INCLUDED)

11

SHADYLANE ESTATES MHC PROPERTY DETAILS


12


INCOME2 Gross Scheduled Rent

Less: VacancyLess: Bad DebtTotal Rental Income

3 Plus: Utility Income4 Plus: Other Income

Plus: POH Income

Effective Gross IncomeEXPENSES

Repairs and Maintenance5 Payroll

AdministrativeMarketingProfessional Fees

6 UtilitiesElectricityWater/SewerGas

7 TrashTotal Variable Expenses

8 Taxes9 Other Tax

10 POH ExpenseInsuranceManagement FeeTotal Operating Expenses

11 Plus: Capital ReservesTotal ExpensesNet Operating Income

23.77%

14,292 1.00%

$1,872

13,420 55

36,104

70.31%

72,424 297

$456,719

4.00%

$3,699

0

35,393 14535,393

0

1

14,6400

23

21

32,444 133

0

145

13

56

$2,048

$1,033,562

$69,3970

28,573154

12,9860

58

324

5,215

$293,926

2019 Actuals

$469,0190

$469,019$564,543

74,1073,097

13,674$206,759

66,7977,762

135,60712,314

304

$243,329

$499,830

78,985

2018 Actuals

13,97738,117

$847

Actuals

4,770

117

1

53

274

32

556

176

31

621

7,500 31

0 0

$997

61,155271,213 1,112

55

48,913 4.00%

$457,328 $1,874

12,200 50

$469,528 $1,924

0 0

$1,222,825 $5,012

Per Site

$48,800 $200

79,300 325

18,300 75

4,880

5,371 22

303,118

Totals % GSR

0.00%

0.00%

100.00%

278

251

$633,370

00

$633,37067,824 70,314 288

299

50

42,144 3.68%

$499,8300 0

57

3.69%

$1,922

0

151,559

$1,145,994

73,029

$4,236

Per Site

$284

0

$1,922

$2,314

$4,697

Per Site

$302

0

135

0

$73,7470

33,05670

14,0960

5,716

7,50542,979

0

20

$699,532

Totals % GSR

$699,532

0 0.00%

0 0.00%

$444,519

100.00%

$445,879

1,242

$902,598Per Site

$48,800 $200

79,300 325

18,300 75

4,880 20

0 0

$1,822

Totals % GSR

$1,073,727

308,036 28.69%

75,220 308

Totals % GSR

$1,429,201

339,728

12,200 50

5,887 24

333

5,371

7,500 31

$293,927

10,737 1.00%

Proforma (In-Place) Proforma (Mkt Rent/Inc Occ)

$754,954

13,420

383

$1,827

$1,205

$1,075,181 75.23%

72,424 297

75,220 308

0 0

81,355 333

$646,164

$1,205

20

$2,048

$2,648

0

5,887 24

93,569 38393,569

14,640

22

60

$753,296 $3,087

81,355

60

FINANCIAL ANALYSIS

UNDERWRITING ASSUMPTIONS

1.

2. Proforma GSR = 244 sites x $366.71 avg lot rent x 12 months. There are 62 tenants just renting a lot paying an average rent of $367.06 and 112 home/lot renters paying an average lot rent of $366.52.

3. Utility Income grown 3% from 2019 Actuals. Utility Income includes water recapture and minimal elec/gas recapture.

4. Other Income grown 3% from 2019 Actuals. Other Income includes admin fees, pet fees, miscellaneous income, interest income, late fees, NSF Fees, maint/repairs income, additional vehicle fees, collection fee income, application fees,

5. Historical Payroll expenses are buried within the R&M, Admin, and POH Expense line items.

6. Adjusted Utilities grown 3% from 2019 Actuals (except Trash).

7. Adjusted Trash expense annualized from the Dec ’19 T11 total (trash expense excluded in the Jan ’19 expense).

8. Proforma Taxes = 2019 assessed values ($984,060) x 2019 mill rates (.073142) grown 30%.

9. Other Taxes includes school ($3 per site for park-owned homes) and license fee

10. In 2018, the seller started a home renovation program for existing park owned homes, mostly at Shadylane. Seller accounts for home-related expenses in a couple of line items so it is not easy to segregate non-recurring capital expenditures to the homes versus recurring maintenance. As a result, the 2018 and 2019 POH expenses contain non-recurring capital items. Given the historical expenses to operate the homes and from what we see as an industry average, we are using a 50% expense ratio for the POH Expense assumption in 2018 and 2019.

11. Numbers do not reflect actual expenses.

Proforma Vacancy (Mkt Rent/Inc Occ) assumes

(approximately 5% increase in occupancy).

Proforma GSR (Market Rent) =(241 tenant owned or vacant sites x $489.71 avg lot rent x 12 months) + (3 lease options sites x $360 avg lot rent x 12 months). The 3 lease option homes are on a contract where

excludes rent increases for these sites. Currently, lot rents at the community are $123 below market according to adjusted rents in the rent comp table on page 13 (base rent only – excludes utilities included in rent). The $489.71 avg lot rent number consists of Shadylane’s current unadjusted rents plus the under-market amount ($366.71 + $123).


13


RENT COMPARABLES

SUMMARY

PROPERTY ADDRESS # OF SITES

PHYSOCC

AVG RENT

RENT INCLUDES

AVG ADJUSTED RENT

1 Continental Community 20785 Schultes Ave, Warren, MI 48091 265 60% $425 T-$14 $411

2 Glennwood Village 2526 Morrissey Rd, Warren, MI 48091 147 100% $549 None $549

3 Lafayette Place 21155 Warner, Warren, MI 48091 254 98% $530 T-$14 $516

4 Park Lane Mobile Home Court 3193 East Ten Mile Rd, Warren, MI 48091 164 65%* $440 T-$14 $426

TOTALS/AVERAGES 830 81% $486 $476

Shadylane Estates MHC 2709 Capitol Ave, Warren, MI 48091 244 94% $367 T-$14 $353

Source: JLT Market Report, Macomb County, Michigan February 2019W=Water / S=Sewer / T=Trash

*Property has expansion lots and is in the process of bringing in new homes thus explaining the low occupancy percentage.

13

4

2SHADYLANE ESTATES

M A N U FA C T U R E D H O M E C O M M U N I T Y


14


PROPERTY AERIAL

WALTZ AVE

BART AVE

BART AVE

STOLZENFELD AVE

WOODROW

WILSON AVE

METHUEN AVE

WARNER AVE

LOS ANGELES AVE

LOS ANGELES AVE

CAPITOL AVE CAPITOL AVE

SHADYLANE ESTATESM A N U FA C T U R E D H O M E C O M M U N I T Y


15


COMMUNITY ATTRACTIONS

E ELEVEN MILE RD

E 10 MILE RD

E 9 MILE RD

E 8 MILE RD

FRAZHO RD

RYAN RD

RYAN RD

SHERWOOD AVE

DEQUINDRE RD

JOHN R RD

MOUND RD

VAN DYKE AVE

E LINCOLN AVE

STEPHENS RDE WOODWARD HEIGHTS BLVD

696

696

75

75

102102

53

GENERAL MOTORS WARREN TRANSMISSION OPERATIONS

FCA WARREN TRUCK ASSEMBLY PLANT

SH

ANN ARBOR, MI36 MILES

DETROIT, MI9 MILES

OUND RD

STESTESTESTESTESTESTESTESTEPHEPHEPHEPHEPHEPHEPHEPHEPHENSNSNSNSNSNSNSNSNS RDRDRDRDRDRDRDRDRDSHADYLANE ESTATES MHC

SHADYLANE ESTATES MHC

ANN ARBORDETROIT

FLINT

LANSING


16


SITE INFORMATION

ADDRESS 451 S Telegraph Rd, Pontiac, MI 48341

COUNTY Oakland

YEAR BUILT 14-31-303-006/14-31-303-005/14-31-303-004/14-31-303-009

TAX PARCEL IDS 80

SITES 80

COMMUNITY TYPE All Ages

LAND SIZE 7.28

DENSITY 10.99 sites/acre

MH PHYSICAL OCCUPANCY 96.25% (77 sites as of Jan 2020)

MH ECONOMIC OCCUPANCY 90.00% (72 sites as of Jan 2020)

INVENTORY HOMES 47 (42 occ as of Jan 2020)

AVERAGE LOT RENT $372 (includes trash)

LAST RENT INCREASE* May-19

ROADS Asphalt

FLOODPLAIN Zone X / Zone A / Zone AE

ZONING R-5 (Trailer Coach Park)

UTILITIES

WATER City of Pontiac (Billed back to tenants)

SEWER City of Pontiac (Billed back to tenants)

ELECTRICITY DTE (Direct billed to tenants)

GAS Consumer Energy (Direct billed to tenants)

TRASH Waste Management (Included in rent)

CABLE Comcast and WOW (Direct billed to tenants)

DEMOGRAPHIC INFORMATION 1 MILE 5 MILES 10 MILES

2019 Population Estimate 8,134 161,167 597,098

Population Growth 2010 - 2019 2.28% 2.08% 3.52%

2019 Renter Occupied Housing Percentage 26.0% 28.9% 24.6%

2019 Owner Occupied Housing Percentage 62.5% 59.1% 67.0%

2019 Estimated Average Household Income $84,957 $98,785 $120,964

2019 Estimated Average Owner-Occupied Housing Value $262,591 $315,491 $338,825

Source: U.S. Census Bureau

• Sylvan Lake Estates MHC is a 2.5-star all-age community, but in a 5-star location, positioned on over 7 acres of land serviced by public utilities. The community sits right next to State Highway 24 on Sylvan Lake, providing easy access to downtown Pontiac and other large retail stores including Walmart, TJ Maxx, Marshalls, HomeGoods, and more.

• park owned homes. The average adjusted monthly lot rent is $469 according to the JLT report, while Sylvan Lake’s adjusted monthly lot rent is $353. Increasing rents to the market level would add over $48,000 in additional annual revenue for a new owner.

• The offering includes 47 park-owned homes, of which 42 are occupied mostly as lease options and a couple of pure rentals with an average home payment of $236.

• Within a 10-mile radius of the community, the 2019 total population was just under 600,000 with an average household income of approximately $120,964. Average home values were $338,825 and expected to rise to $363,408 by 2024.

• The City of Pontiac sits just 30 miles from Detroit and 40 miles from University of Michigan in Ann Arbor and is next to Sylvan Lake, which is six miles long and covers 532 acres. The lake is the keystone year-round recreational pleasure of choice and sits right next to Pontiac’s Downtown retail district which includes a variety of restaurants, shops, and local businesses.

• The Oakland County unemployment rate is at 3.3% as of 2018 compared to the US rate of 3.7%. Local researchers project the unemployment rate to be at 2.6% by 2020/2021.

• Oakland County has now completed nine consecutive years of job growth since the recession’s low point in 2009.

• During 2018, more than 728,000 people were employed in Oakland County, a sum larger than 13 states. Exports for Oakland County in 2017 exceeded $14.4 billion, surpassing the export totals of 25 states. In fact, a quarter of all exports from Michigan come from Oakland County.

• Among a select few counties nationally to have a AAA bond rating, saving taxpayers millions of dollars.

INVESTMENT HIGHLIGHTS

*No formal process for raising or assessing “market rent” and renewals are max of $25 increase upon maturity


17

SYLVAN LAKE ESTATES MHC PROPERTY DETAILS


18


INCOME2 Gross Scheduled Rent

Less: VacancyLess: Bad DebtTotal Rental Income

3 Plus: Utility Income4 Plus: Other Income

Plus: POH Income

Effective Gross IncomeEXPENSES

Repairs and Maintenance5 Payroll

AdministrativeMarketingProfessional Fees

6 UtilitiesElectricityWater/SewerGasTrash

Total Variable Expenses7 Taxes8 Other Tax9 POH Expense

InsuranceManagement FeeTotal Operating Expenses

10 Plus: Capital ReservesTotal ExpensesNet Operating Income

5.00%

4,165 1.00%

$2,235

4,400 55

19,091

89.00%

37,496 469

$178,806

5.00%

$4,773

0

6,309 796,309

70

1

6,80000

37

43

6,126 77

0

79

27

0

36

18,320 3.80%

$231,6440 0

54

3.83%

$2,750

$5,835Per Site

$340

0

$6,020

Totals % GSR

54,4084,297

518

$123,338

$231,644

38,575

36

$2,896

54

31,114154

6,9160

86

482

3,453

314

45

680

2019 Actuals

$466,777

$27,1850

$219,9790

$219,979$246,798

2018 Actuals

4,31317,898

108,817 1,360

55

22,786 5.00%

$178,501 $2,231

4,000

$455,726 $5,697Per Site

$20,000 $250

26,000 325

5,600 70

1,600

3,557 44

85

$1,433

Actuals

2,882

389

2

86

41,4172,1562,852

$114,67525,0943,591

0.00%

0.00%

100.00%461

265

$299,910

00

$299,91036,85121,199

0

57,608

$2,750$3,085

308

43

720

$1,542

6,878

100.00%

$381,825

$304,018

Per Site

36,404

1,440

5,6001,600

$440

0

376

0

$35,2360

30,1020

455

32525,986115,216

Totals % GSR

$304,018

0 0.00%

0 0.00%

$481,624

$249,980$2,896$3,125

02,969

3,41424,666

0

$2,185

Totals % GSR

3,414 43

0 0

$112,657

35,681 10.00%

26,765

20,823

35,244

20

335

0

$356,813

4,000 50

3,058 38

497

3,557

3,414 43

$112,657

3,568 1.00%

Proforma (In-Place) Proforma (Mkt Rent/Inc Occ)

$317,564

4,400

441

$2,538

$1,408 $1,408

$391,464 94.00%

37,496 469

26,765 335

0 0

0

3,058 38

35,244 441

6,800

39,733 497

$203,019

50

$182,501 $2,281

0 0

$273,225 $3,415

39,733

85

Totals % GSR

$416,451

44

20

Per Site

$20,000 $250

26,000 325

$174,806

FINANCIAL ANALYSIS

UNDERWRITING ASSUMPTIONS

1.

2. Proforma GSR = 80 sites x $371.68 avg lot rent x 12 months.

3. Utility Income grown 3% from 2019 Actuals. Utility Income includes water recapture only.

4. Other Income grown 3% from 2019 Actuals. Other Income includes admin fees, pet fees, miscellaneous income, interest income, late fees, NSF Fees, maint/repairs income, additional vehicle fees, collection fee income, application fees,

5. Historical Payroll expenses are buried within the R&M, Admin, and POH Expense line items.

6. Adjusted Utilities grown 3% from 2019 Actuals.

7. Proforma Taxes = 2019 assessed values ($448,320) x 2019 mill rates (.0561524) grown 40%.

8. Other Taxes includes school ($3 per site for park-owned homes) and license fee taxes.

9. In 2018, the seller started a home renovation program for existing park owned homes. Seller accounts for home-related expenses in a couple of line items so it is not easy to segregate non-recurring capital expenditures to the homes versus recurring maintenance. As a result, the 2018 and 2019 POH expenses contain non-recurring capital items. Given the historical expenses to operate the homes and from what we see as an industry average, we are using a 50% expense ratio for the POH Expense assumption in 2018 and 2019.

10. Numbers do not reflect actual expenses.

Proforma Vacancy (Mkt Rent/Inc Occ) assumes

(approximately 5% increase in occupancy).

Proforma GSR (Market Rent) = 43 tenant owned or vacant sites x $487.68 avg lot rent x 12 months) + (37 lease option sites x $371.19 avg lot rent x 12 months).

a certain term which is why the proforma excludes rent increases for these sites. Currently, lot rents at the community are $116 below market according to adjusted rents in the rent comp table on page 20 (base rent only – excludes utilities included in rent). The $487.68 avg lot rent number consists of Sylvan Lake’s current unadjusted rents plus the under-market amount ($371.68 + $116).


19


RENT COMPARABLES

SUMMARY

PROPERTY ADDRESS # OF SITES

PHYSOCC

AVG RENT

RENT INCLUDES

AVG ADJUSTED RENT

1 Ackels MHC 25151 Dequindre Rd, Madison Heights, MI 48071 116 98% $394 T-$19 $375

2 College Heights 3501 Auburn Rd, Auburn Hills, MI 48326 161 97% $530 W-$46, S-$44 T-$19 $421

3 Groveland Manor 13318 South Dixie Hwy, Holly, MI 48442 186 88% $482 T-$19 $463

4 Lake in the Hills 2700 Shimmons Rd, Auburn Hills, MI 48326 238 92% $619 T-$19 $600

5 Red Run Community 1066 Linda Ln, Madison Heights, MI 48071 122 98% $449 W-$46, S-$44 T-$19 $340

6 165 South Opdyke Rd, Auburn Hills, MI 48326 228 100% $631 T-$19 $612

TOTALS/AVERAGES 1,051 96% $518 $469

Sylvan Lake Estates MHC 451 S Telegraph Rd, Pontiac MI 48341 80 96% $372 T-$19 $353

Source: JLT Market Report, Oakland County, Michigan February 2019W=Water / S=Sewer / T=Trash

PONTIAC

WARREN

ROMEOFENTON

DETROIT

BRIGHTON

TROY

NOVI

4

3

6

1

5

2SYLVAN LAKE ESTATESM A N U FA C T U R E D H O M E C O M M U N I T Y


20


PROPERTY AERIAL

S TELEGRAPH RD

JAMES K BLVD

EDNA AVE

GARLAND ST

SYLVAN LAKE ESTATESM A N U FA C T U R E D H O M E C O M M U N I T Y


21


COMMUNITY ATTRACTIONS


ORCHARD LAKE RD

ORCHARD LAKE RDBAGLEY ST

W SQUARE LAKE RD

FRANKLIN RD

S TELEGRAPH RD

MID

DLEB

ELT

RD

24

24

SYLVANLAKE

D

Roosevelt Elementary School

SYLVAN LAKE ESTATES MHC

Jefferson Jr High School

Michigan School for the Arts

The Links at Crystal Lake

Forest Lake Country ClubPine Lake Country Club

ANN ARBOR, MI32 MILES

FLINT, MI32 MILES

DETROIT, MI25 MILES

SYLVAN LAKE ESTATES MHC

ANN ARBORDETROIT

FLINT

LANSING


22

Documents

SHADYLANE ESTATES MHC PROPERTY DETAILS...ADDRESS 2709 Capitol Ave, Warren, MI 48091 COUNTY Macomb YEAR BUILT 1959/1965/1969 (3 phases) ... DENSITY 17.68 sites/acre MH PHYSICAL OCCUPANCY