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BALTIMORE MULTI-FAMILY TOWNHOME PORTFOLIO

27 UNIT INVESTMENT OPPORTUNITY

CLASS B EXCLUSIVE OFFERING

Prepared by:

Steve WeiSSSenior Vice PreSident

443.741.4051sweiss@lee-associates.com

OFFERING MEMORANDUM

O F F E R I N G M E M O R A N D U M : B A L T I M O R E M U L T I - F A M I L Y T O W N H O M E P O R T F O L I O

TABLE OF CONTENTS

> EXECUTIVE SUMMARYOffering SummaryInvestment HighlightsTransaction Guidelines

> PROPERTY INFORMATIONPortfolio OverviewProperty PhotographsArea Map

> MARKET SYNOPSISMulti-Family/Townhome Overview

> FINANCIAL ANALYSISAnalysis RecapRent Roll/Income & Expenses

> APPENDIXLimiting Conditions: Confidentiality and Disclaimer Document

O F F E R I N G M E M O R A N D U M : B A L T I M O R E M U L T I - F A M I L Y T O W N H O M E P O R T F O L I O

> EXECUTIVE SUMMARY

OFFERING SUMMARYINVESTMENT HIGHLIGHTS TRANSACTION GUIDELINES

EXECUTIVE SUMMARY

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OFFERING SUMMARY 27 UNIT MULTI-FAMILY TOWNHOME PORTFOLIO

The Maryland office of Lee & Associates is pleased to present on behalf of a private individual (“Seller”) the rare opportunity to acquire a 100% leased portfolio of 27 market rent, townhome units located in close proximity to each other in Baltimore City, Maryland. The properties are all located within the 21224 zip code in the Baltimore Highlands and Patterson Park neighbourhoods. The 21224 zip code is well known as the most highly sought after and most rapidly gentrifying district within Baltimore. The 27 units are physically housed in 27 individual income producing properties. This unique opportunity offers the investor a turnkey portfolio of well-appointed townhomes of which 100% are located less than a 1 mile radius of each other. There is professional management in place (and available to be retained at a below market rate) that intimately knows each unit from original acquisition through day to day management and maintenance.

The units have all been carefully considered during the original acquisition process for neighbourhoods amenities and safety, easy access to public transportation, overall aesthetics and market desirability for eventual disposition or exit. Enhancing the package further is the fact that none of the leases are through affordable housing/government sponsored rent assist programs, which assures an owner market rate rents, and average tenant retention/lease terms of approximately 3.5 years.

This offering is indeed a once in a lifetime opportunity to purchase a portfolio at a stronger than market yield and strong long term outlook for continued rent growth and predictable exit strategy.

OFFERING SUMMARYOffering Price $3,850,000Terms All CashYear Built/Renovated Varying# of Units 27# of Individual Properties 27In-Place Net Operating Income $288,611

CAP Rate on in-place NOI 7.50%

Parking Parking pads; on-street

Occupancy 100%# of Units leased through government voucher programs

0

# of Units leased through “market process” 27

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INVESTMENT HIGHLIGHTS

> Uncommonly, high tenant retention (Avg 3.5 years) resulting in low turnover expenses> Well maintained units

> Underserved Greater Baltimore marketplace with estimated demand of additional 1,828 units/year and demand for 7,228 over the next 5 years > Lack of For Sale or Rental townhome product available in market> Townhomes are the leading seller in the marketplace> 100% occupancy> 100% “market rent”> Low maintenance interiors> Highly efficient floor plans> Majority of properties have low to no maintenance masonry exteriors> Expert management available who is familiar with each property> Excellent reputation in marketplace> Irreplaceable assemblage of handpicked properties> Walkable access to public transportation systems> Very high tenant satisfaction> Excellent economies of scale on insurance and other expenses> All separately metered properties with utilities in tenants names> Easy access to highway network (State and Interstate)> City desires to lower property taxes over 10 year period> 40 miles from Washington D.C.

> Demand from BRAC (Base Realignment and Closure Act) estimated to bring as many as 60,000 new residents> Close proximity to CBD Baltimore> Close proximity to Johns Hopkins Hospital’s Bayview Campus> Flexibility with exit strategy to sell singly or as a portfolio> Existing Baltimore City home sales are up 6.0% (September 2018- September 2019)

> Median price of existing Baltimore City home sales are up 9.07% to $149,900 (July 2018 - July 2019)

> Baltimore rents have increased 2.6% (July 2018 - July 2019)

> The number of active/available Baltimore City Townhome listings declined approximately 1.0% (August 2010 - August 2019)

> Baltimore Metro median townhome prices are down 1.5% to $153,000 (March 2017- March 2018)

439 Milton

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TRANSACTION GUIDELINES

Lee & Associates is exclusively marketing the Baltimore Multi-Family Townhome Portfolio to a select group of qualified investors. The

prospective purchaser will be selected by Seller in consultation with Lee & Associates on the basis of

1) price,

2) financial strength,

3) certainty and probability of closing,

4) level of investment discretion,

5) reputation within the industry, and

6) intended plans/use for the property, among other considerations.

The offering terms are all cash, due and payable at closing.

Seller reserves the right to select a successful investor based upon their initial bid. Seller also reserves the right, based upon the

quality of the offers received, to select a group of investors to proceed to a second round of bids. If a second round of bids is requested,

Seller will spell out at that timeframe and specific instructions on how to proceed with the offering criteria.

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> Property InformationPORTFOLIOPROPERTY PHOTOGRAPHSAREA MAP

PROPERTY INFORMATION

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BALTIMORE INVESTMENT PORTFOLIO

The Portfolio is comprised of 27 units and is 100% occupied. This portfolio was

assembled over time beginning in 2007 and has a focus towards properties located

on the East side of Baltimore City, with many concentrated in the Patterson Park/

Baltimore Highland’s neighborhoods. These homes also followed a careful and

stringent acquisition process focused on the market rent housing sector with

none of the properties participating in local or federal rent assistance programs.

The assets, when first considered for acquisition, were required to be quality

properties in strong neighborhoods that met target market driven location criteria.

The properties all had to be deemed capable of being renovated into a condition/

standard to meet or exceed market driven amenity criteria.

These Baltimore Investments followed market driven standards in kitchen,

bathroom, electrical, plumbing, and HVAC or improvements/replacements.

PORTFOLIO SUMMARY# Units 27

# Individual Properties 27

Occupancy 100%

In-place NOI $288,611

# Units leased through Government programs 0

# Units leased through "market process" 27

Average Tenant Stay 3.5 years

PORTFOLIO BY ZIP CODEZIP / TOWN / CITY EBI Properties

21224 / Baltimore 27

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SAMPLE PROPERTY PHOTOGRAPHS EAST BALTIMORE INVESTMENTS

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AREA MAP

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> Market Synopsis> Property InformationMULTI-FAMILY/TOWNHOME OVERVIEW

MARKET SYNOPSIS

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MULTI-FAMILY OVERVIEWThe Baltimore City residential submarket has experienced a significant increase in the activity for multifamily projects and multi-family/residential land development. This has been the trend in most cities across the country, as renting is considered more desirable than owning. Investors, needing to place capital have been highly focused on multi-family projects in order to meet this new demand. In Baltimore specifically, several government initiatives have spurred investment in office to apartment conversion by offering tax incentives. Neighborhoods in close proximity to the water are seeing an increase in multi-family and townhome construction. In 2017, many large developments were completed in areas like Locust Point, McHenry Row and Banner Hill near the Inner Harbor.1 Other developments completed in 2018 and early 2019 include those on Light Street, in Harbor East and on Calvert Street.

According to the U.S. Census Report (2018), there are 602,495 residents living in Baltimore City and there are 293,653 housing units.2 The median gross rent is $1,009. The Census estimates that 52.64% of all residents are renters. The average renter occupied household size in Baltimore is 2.5 persons and the median household income is $46,641.

As shown on the right, the Average Price per unit has risen for Baltimore has risen more often than 8.1% from 2018. The average price per unit is $164,151. The Average Cap Rate for Baltimore for the second quarter of 2019 is 5.6% and is significantly lower than in 2018 when it was 5.9%.

A Baltimore Business Journal report indicated that the downtown area can support about 1,339 new market-rate housing units per year for the next three years – calling the phenomenon the “rental revolution in Baltimore”.3

1 Baltimore Business Journal, 9/27/17. “Baltimore apartment market has room to run despite 12,500 new units, report says.”

2 US Census Report 2017/2018

3 Baltimore Business Journal, 9/27/17. “Baltimore apartment market has room to run despite 12,500 new units, report says.”

4 Bright MLS as of 8/6/19

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> Financial Analysis> Market SynopsisRENT ROLL/INCOME & EXPENSES

FINANCIAL ANALYSIS

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BALTIMORE INVESTMENTSPRO-FORMA PORTFOLIO ANALYSIS RECAP

(33.33%) pay their own water bill

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RENT ROLL/INCOME & EXPENSESNo. Property Zip Code Program Rent Water Exp Ground

RentProperty Tax Repairs/

Mainenence Ins Exp Total Exp Annual Rent

1 116 N. Port 21224 Market 1,000.00$ 750.00$ 1,143.00$ 481.00$ 706.00$ 3,080.00$ 12,000.00$

2 124 N. Port 21224 Market 1,075.00$ 912.00$ 96.00$ 1,143.00$ 481.00$ 706.00$ 3,338.00$ 12,900.00$

3 126 N. Port 21224 Market 1,050.00$ 814.00$ 1,143.00$ 481.00$ 706.00$ 3,144.00$ 12,600.00$

4 130 N. Port 21224 Market 935.00$ 758.00$ 1,143.00$ 481.00$ 706.00$ 3,088.00$ 11,220.00$

5 132 N. Port 21224 Market 1,000.00$ 894.00$ 1,143.00$ 481.00$ 706.00$ 3,224.00$ 12,000.00$

6 134 N. Port 21224 Market 950.00$ 1,143.00$ 481.00$ 706.00$ 2,330.00$ 11,400.00$

7 3103 E. Faye�e 21224 Market 1,300.00$ 1,292.00$ 481.00$ 706.00$ 2,479.00$ 15,600.00$

8 3501 E. Faye�e 21224 Market 1,250.00$ 1,060.00$ 939.00$ 481.00$ 706.00$ 3,186.00$ 15,000.00$

9 3511 E. Faye�e 21224 Market 1,100.00$ 857.00$ 939.00$ 481.00$ 706.00$ 2,983.00$ 13,200.00$

10 3531 E. Faye�e 21224 Market 1,150.00$ 78.00$ 939.00$ 481.00$ 706.00$ 2,204.00$ 13,800.00$

11 3615 E. Faye�e 21224 Market 1,200.00$ 924.00$ 939.00$ 481.00$ 706.00$ 3,050.00$ 14,400.00$

12 3209 Esther Pl 21224 Market 975.00$ 45.00$ 1,213.00$ 481.00$ 706.00$ 2,445.00$ 11,700.00$

13 3419 Esther Pl 21224 Market 1,050.00$ 753.00$ 1,057.00$ 481.00$ 706.00$ 2,997.00$ 12,600.00$

14 3500 Esther Pl 21224 Market 1,025.00$ 967.00$ 994.00$ 481.00$ 706.00$ 3,148.00$ 12,300.00$

15 3506 Esther Pl 21224 Market 1,050.00$ 1,230.00$ 1,057.00$ 481.00$ 706.00$ 3,474.00$ 12,600.00$

16 3522 Esther Pl 21224 Market 1,100.00$ 1,208.00$ 1,057.00$ 481.00$ 706.00$ 3,452.00$ 13,200.00$

17 3527 Esther Pl 21224 Market 1,150.00$ 1,058.00$ 1,057.00$ 481.00$ 706.00$ 3,302.00$ 13,800.00$

18 3608 Esther Pl 21224 Market 1,100.00$ 844.00$ 64.00$ 1,057.00$ 481.00$ 706.00$ 3,152.00$ 13,200.00$

19 3510 Mt Pleasant 21224 Market 1,100.00$ 772.00$ 1,057.00$ 481.00$ 706.00$ 3,016.00$ 13,200.00$

20 3414 Mt Pleasant 21224 Market 900.00$ 1,057.00$ 481.00$ 706.00$ 2,244.00$ 10,800.00$

21 3506 Noble St 21224 Market 1,100.00$ 971.00$ 587.00$ 481.00$ 706.00$ 2,745.00$ 13,200.00$

22 3401 E Fairmount 21224 Market 1,300.00$ 96.00$ 1,057.00$ 481.00$ 706.00$ 2,340.00$ 15,600.00$

23 3410 E Fairmount 21224 Market $ 1,700.00 1,057.00$ 481.00$ 706.00$ 3,059.00$ $ 20,400.00

24 3515 E Fairmount 21224 Market 1,050.00$ 922.00$ 1,057.00$ 481.00$ 706.00$ 3,166.00$ 12,600.00$

25 28 N Clinton 21224 Market 1,400.00$ 931.00$ 1,291.00$ 481.00$ 706.00$ 3,409.00$ 16,800.00$

26 3423 E Lombard 21224 Market 1,100.00$ 939.00$ 481.00$ 706.00$ 2,126.00$ 13,200.00$

27 3639 Roberts Pl 21224 Market 1,400.00$ 64.00$ 892.00$ 481.00$ 706.00$ 2,143.00$ 16,800.00$

Totals $ 30,510.00 $ 16,625.00 443.00$ 28,392.00$ 12,987.00$ 19,062.00$ $ 77,509.00 $ 366,120.00

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> Appendix> Financial Analysis> Market SynopsisLIMITING CONDITIONS:CONFIDENTIALITY & DISCLAIMER DOCUMENT

APPENDIX

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CONFIDENTIALITY & DISCLAIMER STATEMENTThis Offering Memorandum contains select information pertaining to the business and affairs of the Baltimore Multi-Family Townhome Portfolio, Baltimore, Maryland. It has been prepared by Lee & Associates Maryland. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Lee & Associates. The material is based in part upon information supplied by the Seller and in part upon financial information obtained by Colliers International from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness or this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum from Lee & Associates, you agree:

1) The Offering Memorandum and its contents are confidential;

2) You will hold it and treat it in the strictest of confidence; and

3) You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Lee & Associates expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Baltimore Multi-Family Townhome Portfolio, Baltimore, Maryland or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Lee & Associates or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

LIMITING CONDITIONS