WELCOME FROM THE DEVELOPER

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ARCHITECTURAL INSPIRATIONS

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SALES & MARKET UPDATE

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CONSTRUCTION UPDATE

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INTERIORS & FINISHES

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LANDSCAPE LONGEVITY

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V O L . 1 - S P R I N G 2 0 1 6

It may come as a surprise that there are hundreds of professionalsworking on various aspects of The River Oaks, from construction,design and engineering, to sales and marketing. There are many scheduled deliverables over the coming weeks.The construction team is hard at work preparing the building forthe installation of the exterior windows. The sales and marketingteam are preparing for the release of a new video that will provideyou with an even better picture of what the finished product willlook like. The creative studio is working with our design team,Rottet Interiors, on new Penthouse and Townhome renderings.The public relations firm is preparing for an exclusive event onMarch 29th. An interactive tool is being developed which will enable buyers to visualize their finish selections in their kitchens and bathrooms. The finish coordinator is finalizing this tool to enhance the finish selection process in the Sales Center. We hope that you find this newsletter informative and we lookforward to updating you over the course of this year as we bring The River Oaks back to life in all of its splendor!

Richard Leibovitch

WELCOME FROM THE DEVELOPER

RICHARD LEIBOVITCH | MANAGING PARTNER - AREL CAPITAL

We are pleased to provide you withour first issue of The River OaksReport. Our goal is to keep youinformed on our constructionprogress and provide you withinsights from the many talentedarchitectural and design teams thatare contributing to the development.We are proud to have assembleda team of Houston-based, award winning architects, designers, andservice providers to re-imagine this historical high-rise for the 21st Century, while bringing a level of design and comfortthat will appeal to the most discerning homeowners.

Our firm, Arel Capital, is a private investment firm focused onluxury condominium development with projects in both Houstonand New York. The firm also acquires and renovates rentalproperties across the country with buildings in Houston, Austin,Denver and New York, with close to $1 billion in real estateacquired. Our team consists of experienced real estateprofessionals and finance professionals. The River Oaks projectreceived construction financing from The Bank of the Ozarks andLIM Capital. The River Oaks represents our most exciting projectto-date, as we look to maintain the original building shell andupgrade many aspects of the property.

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ARCHITECTURAL INSPIRATIONS

ANDRE LANDON | DESIGN DIRECTOR/PRINCIPAL - EDI INTERNATIONAL

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The inspiration and design opportunities for The River Oaks are found in the original building’s architectural heritage. As an iconic example of Houston Mid-Century modern architecture, the building in its original form gave strong direction for the re-booted project. The original building’s position on the siteallowed for tailored gardens, pools and fountains. These elementsare strongly influenced by Mid-Century modern planning principles and complement the definition of space while achieving the goal of seamless integration of the inside with the outside.

Preserving the original building kept the overall density of available residences well below 100. We did not want the project to have any negative affect on increasing traffic and congestion in the River Oaks neighborhood. Flanked by St. Luke’s Church and St. John’s Academy, the team wanted to be sensitive to the scale of these institutions.

While preserving the existing structure, opportunities presentedthemselves to add Garden Residences, with their own privateexterior lawn and patio space. Unique in the high-rise environment, the Garden Residences provide an exteriorexperience usually found only in single family homes.

Strong horizontal expression, floor to ceiling glass, and cornerfinned balconies throughout the tower, all part of the Mid-Centurymodern tradition, are main elements of the architecturalexperience. The penthouse levels incorporate a square oculusframing downtown Houston and the Galleria, a large ever-changing piece of exterior art.

The Mid-Century influences, particularly projects by Ludwig Mies van der Rohe, gave the design team the opportunity to open panoramic views to the most interesting parts of central Houston. Large glass areas, corner balconies, and large roof terraces connect The River Oaks to its environment.

Further design influences were harvested from Houston’s modernarchitecture, The Museum of Fine Arts, Houston and The Menil Collection, both inspired materials and details which are strongly expressed in The River Oaks’ architecture and interior design.

SALES UPDATE: Thank you for your support and confidence in this excitingdevelopment. Our goal is to create a joyful and meaningfulexperience for our buyers, every step of the way, as they transitionfrom their homes to a new life of carefree luxurious convenience.Many of you have already referred friends and family membersto become your neighbors. Please contact a sales agent if you have other friends who might be interested in making The River Oaks their new home.

The sales velocity at The River Oaks has exceeded all expectations. In only six months, 40% of the building has been sold.

By comparison, a typical project generally takes 12-14 months to reach this milestone. The number of prospects and weekly sales traffic also continue to far outpace all other competing developments. Predictably, as construction progresses, the pace of sales has increased. Although some floor plans are nearly sold out, there is a desirable inventory still available throughout the building.

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SALES & MARKET UPDATE

MIKE REDDELL | VICE PRESIDENT, DEVELOPMENT SERVICES - SUDHOFF COMPANIESNAT HESTON | ASSISTANT DIRECTOR , DEVELOPMENT SERVICES - SUDHOFF COMPANIES

n Available inventory n Monthly sales absorption rate

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HOUSTON CONDO MARKET UPDATE: A new report released last week by Sudhoff Companies tracked the supply and demand of new condominiums in Houston. The report indicated that 40% of developer-owned inventory,now under construction, was sold during the past year. This sales pace leaves the market with only about 200 new condominiums (approximately 18 months of inventory). The news is the same for the condo resale marketplace – new listings and available supply are at their lowest levels in years. The supply is even lower for buyers seeking to make a move to a condominium inside the loop in the next few years. The Sudhoff Companies report shows availability of new condominiums inside the loop for projects available for occupancy within the next three years, is only about 140.

Demand is not likely to wane – especially since one of the largestdemographics that purchase Houston condominiums are emptynester couples. This group also represents the fastest growingdemographic in the US. The increasing demand from buyerswanting to simplify their lives and the dwindling supply ofproduct, will ultimately bring additional competition formore-preferred inventory.

HOUSTON NEW CONDO CONSTRUCTION

Construction activities at The River Oaks continue to proceedwith important, but oftentimes tedious preparatory work. Whilesignificant amounts of work have been proceeding on the interiorof the building, the next six weeks will showcase visible changesto the exterior. All aluminum and glass has been received at oursubcontractor’s yard in Spring, TX and window wall units arebeing fabricated and delivered to the site. The window installationcommencement will begin soon. Exterior header framing, slab edge pours, column reinforcement and foundation augmentation are all in progress. A window wall mock-up system has been installed and waterproofing details have all been finalized. Expect a massive crawler crane on-site within the next six weeks!Elevators are in fabrication and orders for custom tubs amongother long lead items have been placed. Structural steel is currently being fabricated for the building expansion. Permittingfor all current activities are in place and we expect the remainingpermits to be received within the next two to three months. The construction manager anticipates final completion to be achieved by Fall 2017, with unit deliveries starting in Spring 2017. We have continued to work with our construction and designprofessionals as well as our specialty consultants to refine variousdetails of the project design to ensure that we deliver the highestquality product. Arel Capital is extremely proud of the fact that we chose to preserve a historically significant Houston icon, however, it is not without challenges. In order to assure both the best of modern luxury standards and the preservation of the architectural integrity of the building, painstaking efforts, thought and time have gone into our design to work within the existing constraints of the building. As construction advances, so does the excitement for The River Oaks and the surrounding neighborhood!

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CONSTRUCTION UPDATE

DAVID GENOVA | DIRECTOR OF DEVELOPMENT - AREL CAPITAL

Exterior demolition of the rear yard is nearly complete & is now being graded

Window system installation has begun

Building framing is in process

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INTERIORS | FINISHES

LAUREN ROTTET | FOUNDING PRINCIPAL - ROTTET STUDIO

Rottet Studio is known in the marketplace as innovators, not followers. Reflecting a desire to improve the human experience through the built environment, Rottet Studio provides innovative architectural solutions characterized by precise detail and direct response to the client’s goals. Through thoughtful design, Rottet Studio delivers environments that not only satisfy clients’ needs, but allow them to achieve a level of enjoyment and success beyond their expectations. At The River Oaks, the vision is to make the interior spaceanimated. Classic modernist architecture enriches The River Oaksand defines a lifestyle people seek and appreciate. Natural lightamplifies transitions within the residences and creates a moreexpansive sense of space. Floor to ceiling windows will allowresidents to take advantage of impressive views over the greentree tops of the Houston skyline and open the space to theoutdoors. Due to the unique location, accentuating the viewswas a must and will certainly attract Houston’s most elite buyers.

The property will feature contemporary and warm residences with dark emollients, hardwoods and rich limestone. The units will feature luxurious finishes, including marble countertops, freestanding bathtubs, Gaggenau appliances and Poggenpohlcabinets. The River Oaks is a rarified property that will forma unique bond with residents, much like great art does with collectors.

F I N I S H ES,

F I XT U R ES &

A P P L I A N C ES

L AU R E N R OT T ET D ES I G N E R PAC KAG ES

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Designer Package #31. Kitchen Cabinet Poggenpohl -

DX208 Teak Dekor Lava

2. Kitchen Backsplash & Island Marble Slab -

Calacatta

3. Kitchen Worksurface Countertop Silestone -

White Zeus Extreme

4. Walnut Rustic Hardwood Floor

5. Paint - Accent Walls Pratt & Lambert

Feather Gray 32-27

6. Paint - Walls & Ceiling Pratt & Lambert

Designer White 33 - 1

7. Master & Powder Bathroom Cabinet Poggenpohl Sand

Grey High Gloss w/Aluminum Edge

Banding - HA1146

8. Master & Powder Bathroom Marble Countertop -

Alaskan White, Polished

9. Master & Powder Bathroom Floor & Wall Stone

Tile Porcelanosa, Silkwood Classico 12” x 24”

10. Carpet at Bedrooms - Option 1 Luzern Silverthorne

HN013 Clearing

11. Carpet at Bedrooms - Option 2 Luzern Summit

HN013 Clearing

12. Secondary Bathroom Porcelain Floor & Wall Tile -

Graniti Vicentia Q-Stone Ice - Lappato 12” x 24”

13. Secondary Bathroom Cabinet Goldreif - White

14. Secondary Bathroom Countertop Silestone - Calypso

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LANDSCAPE LONGEVITY

DAVID SAMUELSON | PROJECT DIRECTOR - MCDUGALD-STEELE

Our company philosophy regarding planting design takes its aesthetic cue from the architecture, hardscape elements and surrounding site elements. The original footprint of the three-acre property will retain its grandeur in terms of gardens and space. In order to ensure the planting design maintains its aesthetic integrity over time, the proper plant species, size, spacing and care are paramount. We have selected plant material that can be maintained in a manner complementary to the elegant design of the building. A newly completed garden is different from a completed interior room. The garden is in its infancy once completed – and from that point on, it is ever-evolving and changing.

Broker participation welcomed. Prices and specifications subject to change without notice. Images are meant to evoke the character & the mood of the design and is not meant to represent the exact features or materials. Please see a sales associate for details.

3433 WESTHEIMER RD. | T HE R IVEROAKS.COM | 713 .600.5078