AN APPRAISAL REPORT OF

Abernathy Tower Apartments

Located at

1059 Oglethorpe Avenue SW

Atlanta, Fulton County, Georgia 30310

Effective Date: October 30, 2015

Report Date: December 1, 2015

Prepared For

Aditi Mahmud
Project Manager
Vitus
1700 Seventh Avenue, Suite 2000
Seattle, WA 98101

Prepared By

Novogradac & Company LLP

6700 Antioch Road, Suite 450
Merriam, Kansas 66204
913.677.4600
December 1, 2015

Aditi Mahmud
Project Manager
Vitus
1700 Seventh Avenue, Suite 2000
Seattle, WA 98101

Re: Appraisal of Abernathy Tower Apartments

1059 Oglethorpe Avenue SW, Atlanta, Fulton County, Georgia

Dear Ms. Mahmud:

We are pleased to present our findings with respect to the value of the above-referenced property,
Abernathy Tower Apartments (“Subject”). The Subject is an existing 100-unit Section 8 community
(Section 8 Contract No. GA06-T831-016) that is proposed for Low Income Housing Tax Credit
(LIHTC) acquisition/rehabilitation. Post-renovation, the Subject will continue to offer 100 studio and
one-bedroom units along with one two-bedroom non-revenue generating manager’s unit. The
property will be restricted to households earning 60 percent of the Area Median Income (AMI), or
less. The Subject’s 99 studio and one-bedroom units will continue to benefit from a HAP contract
post renovation, which expires on November 10, 2031. It is assumed the developer will continue to
renew the HAP contract for the foreseeable future. The scope of this report meets the requirements of
the Georgia Department of Community Affairs (DCA). We provided several value estimates of both
tangible and intangible assets, described and defined below:

• Land Value.
• Market Value “As Is.”
• Hypothetical Market Value “As Complete and Stabilized” – Assuming Restricted Rents.
• Hypothetical Market Value “As Complete and Stabilized” – Assuming Unrestricted Rents.
• Prospective Market Value at Loan Maturity Assuming Restricted Rents.
• Prospective Market Value at Loan Maturity Assuming Unrestricted Rents.
• Valuation of Tax Credits.
• Favorable Financing.

This valuation engagement was conducted in accordance with the Code of Professional Ethics and
Standards of Professional Appraisal Practice of the Appraisal Institute, which standards incorporate
the Uniform Standards of Professional Appraisal Practice (USPAP). In accordance with these
standards, we have reported our findings herein in an appraisal report, as defined by USPAP.

Market value is defined as:

6700 ANTIOCH ROAD, SUITE 450, MERRIAM, KS 66204 T (913)677-4600 F (913)677-4601 www.novoco.com
Abernathy Tower Apartments Appraisal
December 1, 2015

The most probable price which a property should bring in a competitive and open market under all
conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and
assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation
of sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised and acting in what they consider their best
interest;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and,
5. The price represents normal considerations for the property sold, unaffected by special or creative
financing or sales concessions granted by anyone associated with the sale.1

This report complies with FIRREA (1989) regulations and the 2015 Georgia DCA Appraisal
Manual.

Underlying Land Value

As a result of our investigation and analysis, it is our opinion that, subject to the limiting conditions
and assumptions contained herein, the value of the underlying land in fee simple, as of October 30,
2015, is:
ONE MILLION NINETY THOUSAND DOLLARS
($1,090,000)

“As Is” Value

The Subject’s market value of the real estate “As Is”, subject to current Section 8 contract rents, as
of October 30, 2015 is:

EIGHT MILLION SEVEN HUNDRED THOUSAND DOLLARS

($8,700,000)

“As Complete and Stabilized” Restricted

The Subject’s hypothetical estimated market value “As Complete and Stabilized” assuming restricted
operations, as of October 30, 2015, is:

NINE MILLION SIX HUNDRED THOUSAND DOLLARS

($9,600,000)

1 12 C.F.R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990

Abernathy Tower Apartments Appraisal
December 1, 2015

“As Complete and Stabilized” Unrestricted

The Subject’s hypothetical estimated market value “As Complete and Stabilized” assuming
unrestricted operations, as of October 30, 2015, is:

FOUR MILLION SIX HUNDRED THOUSAND DOLLARS

($4,600,000)

Prospective Market Value as Restricted 30 years (Loan Maturity),

The hypothetical prospective market value at 30 years (loan maturity) of the Subject’s fee simple
interest, subject to the rental restrictions in the year 2045, as of October 30, 2015, is:

SIX MILLION SEVEN HUNDRED THOUSAND DOLLARS

($6,700,000)

Prospective Market Value as Unrestricted at 30 years (Loan Maturity)

The hypothetical prospective market value at 30 years (loan maturity) of the Subject’s fee simple
interest, as an unrestricted property in the year 2045, as of October 30, 2015, is:

TWO MILLION SIX HUNDRED THOUSAND DOLLARS

($2,600,000)
Tax Credit Value
The market value of the tax credits allocated to the Subject over a 10-year period, on a cash
equivalent basis, as of October 30, 2015, is:

Total LIHTC Value: Combined Federal and State

SEVEN MILLION SIX HUNDRED THOUSAND DOLLARS
($7,600,000)
Please refer to the assumptions and limiting conditions, in the Addenda.

If appropriate, the scope of our work includes an analysis of current and historical operating
information provided by management. This unaudited data was not reviewed or compiled in
accordance with the American Institute of Certificate Public Accountants (AICPA), and we assume
no responsibility for such unaudited statements.
We also used certain forecasted data in our valuation and applied generally accepted valuation
procedures based upon economic and market factors to such data and assumptions. We did not
examine the forecasted data or the assumptions underlying such data in accordance with the
standards prescribed by the AICPA and, accordingly, do not express an opinion or any other form of
assurance on the forecasted data and related assumptions. The financial analyses contained in this
report are used in the sense contemplated by the Uniform Standards of Professional Appraisal
Practice (USPAP).

Furthermore, there will usually be differences between forecasted and actual results because events
and circumstances frequently do not occur as expected, and these differences may be material. We
Abernathy Tower Apartments Appraisal
December 1, 2015

assume no responsibility for updating this report due to events and circumstances occurring after the
date of inspection.

Our value conclusion was based on general economic conditions as they existed on the date of the
analysis and did not include an estimate of the potential impact of any sudden or sharp rise or decline
in general economic conditions from that date to the effective date of our report. Events or
transactions that may have occurred subsequent to the effective date of our opinion were not
considered. We are not responsible for updating or revising this report based on such subsequent
events, although we would be pleased to discuss with you the need for revisions that may be
occasioned as a result of changes that occur after the valuation date.

We appreciate this opportunity to be of service. Please contact us if you have any comments or
questions.

Respectfully submitted,
Novogradac & Company LLP

Rebecca S. Arthur, MAI

Partner
Certified General Real Estate Appraiser

Rachel B. Denton
Principal
Certified General Real Estate
Appraiser
Rachel.Denton@novoco.com
913.677.4600 ext. 1512

Rana Barnes
Real Estate Analyst
Certified General Real Estate Appraiser
GA License No. 325547
 TABLE OF CONTENTS

EXECUTIVE SUMMARY................................................................................................................... 2

FACTUAL DESCRIPTION ................................................................................................................. 8

REGIONAL AND LOCAL AREA ANALYSIS ................................................................................ 12

COMPETITIVE RENTAL/DEMAND ANALYSIS .......................................................................... 48

APPRAISAL METHODOLOGY ..................................................................................................... 118

INCOME CAPITALIZATION APPROACH ................................................................................... 131

SALES COMPARISON APPROACH ............................................................................................. 159

RECONCILIATION ......................................................................................................................... 172

ADDENDUM A: ASSUMPTIONS AND LIMITING CONDITIONS, CERTIFICATION

ADDENDUM B: QUALIFICATION OF CONSULTANTS
ADDENDUM C: SUBJECT PHOTOS
ADDENDUM D: FLOOD PLAIN MAP
ADDENDUM E: DEVELOPER’S BUDGET AND PROFORMA
ADDENDUM F: SITE PLAN
ADDENDUM G: LETTERS OF INTENT
ADDENDUM H: LICENSE
ADDENDUM I: RENT ROLL
ADDENDUM J: GRIDS
EXECUTIVE SUMMARY
 Abernathy Tower Apartments, Atlanta, GA; Appraisal

EXECUTIVE SUMMARY

PROPERTY SUMMARY OF SUBJECT

Property Appraised: Abernathy Tower Apartments (Subject) is an existing senior

Section 8 property (Section 8 Contract No. GA06-T831-016) in
Atlanta, Fulton County, Georgia that is proposed for renovation
with Low Income Housing Tax Credit (LIHTC) equity. The
Subject was originally constructed in 1986 with HUD Section
202 financing and was refinanced in 2009; the Subject is also
encumbered by a HAP Contract. The Subject consists of 99
studio and one-bedroom units along with one two-bedroom
non-revenue generating manager’s unit in one five-story
midrise-style residential building.

The Subject will continue to benefit from the HAP contract on

99 units post-renovation. The Section 8 contract expires
November 10, 2031, and it is assumed the developer will
continue to renew the contract for the foreseeable future.
Tenants will continue to pay 30 percent of their incomes
toward rent, not to exceed the LIHTC rents.

Parcel ID Number: The Subject is identified by the following parcel ID number:

14-011800020495 and 14-011800020560.

Land Area: The Subject site encompasses approximately 1.62 acres or

approximately 70,567 square feet.

Legal Interest Appraised: The property interest appraised is fee simple, subject to any and
all encumbrances, if applicable for each value estimate.

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

Current Unit Mix and Rents: The following tables summarize the Subject’s current unit mix
and rents.

CURRENT RENTS
Current Net Gross Contract
Unit Type Number of Units Utility Allowance (1)
Contract Rents Rents
Section 8
0BR/1BA 24 $1,123 $0 $1,123
1BR/1BA 75 $1,208 $0 $1,208
Manager's Unit
2BR/1BA 1 $0 $0 N/Av
Total 100
Notes (1) Utility Allowance provided by HUD

UNIT MIX AND SQUARE FOOTAGE – AS IS

Unit Type Number of Units Unit Size (SF)* Gross Area
0BR/1BA 24 384 9,216
1BR/1BA 75 528 39,600
2BR/1BA 1 816 816
Total 100 49,632
*Measurements taken by appraiser on 10/30/2015

The Subject is 94.0 percent occupied. According to the

Subject’s historical audited financials, the Subject has operated
with a total vacancy rate (including collection loss) between 4.3
to 5.6 percent over the past two years with an average total
vacancy rate of 5.0 percent.

Proposed Unit Mix and Rents: The following tables summarize the Subject’s proposed LIHTC
unit mix and asking rents. However, the Subject will continue
to collect the full contract rent amounts for all units, and
tenants will contribute 30 percent of their income toward rent.

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

PROPOSED RENTS
2015 LIHTC Current Net
LIHTC Gross
Number of Utility Maximum Section 8
Unit Type Asking Asking
Units Allowance (1) Allowable Contract
Rents Rents
Rent Rents*

Section 8/60% AMI

0BR/1BA 24 $717 $0 $717 $717 $1,123
1BR/1BA 75 $768 $0 $768 $768 $1,208
Manager's Unit
2BR/1BA 1 $0 $0 $0 N/Av N/Av
Total 100
Notes (1) All utilities will continue to be included in the rent post-renovation.
*HAP contract effective September 2015; tenants will pay 30 percent of income as rent not to exceed LIHTC rent levels

UNIT MIX AND SQUARE FOOTAGE – AS RENOVATED

Unit Type Number of Units Unit Size (SF) Gross Area

0BR/1BA 24 384 9,216

1BR/1BA 75 528 39,600
2BR/1BA 1 816 816
Total 100 49,632

Ownership History of
the Subject: Current ownership of the Subject is vested in The Ralph David
Abernathy Tower, Inc. There have been no transfers of the
Subject property over the past three years. A purchase
agreement dated October 5, 2015 was provided by the client.
The purchase agreement is between The Ralph David
Abernathy Tower, Inc. (Seller) and Vitus Development III,
LLC (Buyer) for $8,250,000. The purchase is an arm’s length
transaction. Our concluded “as is” is $8,700,000 which is 5.5
percent higher than the purchase price. We believe the
purchase agreement was made with the September 2014
contract rents. However, the property will be underwritten with
the September 2015 contract rents, which is reflected in our
value conclusion.

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

Highest and Best Use

As If Vacant: Based on the recent development patterns, the highest and best
use “as if vacant” would be to construct a 75-unit multifamily
development with subsidy or gap financing, such as LIHTC.

Highest and Best Use

As Improved: The Subject property currently operates as an affordable
multifamily property in average to good condition. The
property currently generates positive income and it is not
deemed feasible to tear it down for an alternative use.
Therefore, the highest and best use of the site, as improved,
would be to continue to operate as an affordable multifamily
housing development.

Exposure Time: Nine to 12 months.

Marketing Period: Nine to 12 months.

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

INDICATIONS OF VALUE

VALUE OF UNDERLYING LAND

Scenario Units Price Per Unit Indicated Value (Rounded)
Land Value 75 $14,500 $1,090,000

DIRECT CAPITALIZATION ANALYSIS - "AS IS"

Scenario Cap Rate Net Operating Income Indicated Value (Rounded)
As Is 5.50% $477,458 $8,700,000

DIRECT CAPITALIZATION ANALYSIS - "AS COMPLETE AND STABILIZED"

Scenario Cap Rate Net Operating Income Indicated Value (Rounded)
As Renovated Restricted 5.50% $529,141 $9,600,000
As Renovated Unrestricted 5.50% $254,603 $4,600,000

EGIM ANALYSIS - "AS COMPLETE AND STABILIZED"

Scenario EGIM Effective Gross Income Indicated Value (Rounded)
As Is 6.5 $1,342,943 $8,700,000
As Renovated Restricted 7.0 $1,342,943 $9,400,000
As Renovated Unrestricted 5.0 $962,522 $4,800,000

NOI/UNIT ANALYSIS - "AS COMPLETE AND STABILIZED"

Scenario Number of Units Price per unit Indicated Value (Rounded)
As Is 100 $94,000 $9,400,000
As Renovated Restricted 100 $104,000 $10,400,000
As Renovated Unrestricted 100 $50,000 $5,000,000

VALUE AT LOAN MATURITY - RESTRICTED

Year Indicated Value (Rounded)
Restricted 30 years $6,700,000

VALUE AT LOAN MATURITY - UNRESTRICTED

Year Indicated Value (Rounded)
Unrestricted 30 years $2,600,000

TAX CREDIT VALUATION

Credit Amount Price Per Credit Indicated Value (Rounded)
Combined Federal & State LIHTC $7,621,546 $1.59 $7,600,000

Please refer to the assumptions and limiting conditions regarding the valuation and hypothetical
value conclusions.

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FACTUAL DESCRIPTION
 Abernathy Tower Apartments, Atlanta, GA; Appraisal

FACTUAL DESCRIPTION

APPRAISAL ASSIGNMENT AND VALUATION APPROACH

As requested, the appraisers provided several value estimates of both tangible and intangible assets,
described and defined below:

• Land Value.
• Market Value “As Is.”
• Hypothetical Market Value “As Complete and Stabilized” – Assuming Restricted Rents.
• Hypothetical Market Value “As Complete and Stabilized” – Assuming Unrestricted Rents.
• Prospective Market Value at Loan Maturity Assuming Restricted Rents.
• Prospective Market Value at Loan Maturity Assuming Unrestricted Rents.
• Valuation of Tax Credits.
• Favorable Financing.

In determining the value estimates, the appraisers employed the sales comparison and income
capitalization approaches to value.

In the cost approach to value, the value of the land is estimated. Next, the cost of the improvements
as if new is estimated. Accrued depreciation is deducted from the estimated cost new to estimate the
value of the Subject property in its current condition. The resultant figure indicates the value of the
whole property based on cost. Generally, land value is obtained through comparable land sales.
Replacement or reproduction costs, as appropriate, are taken from cost manuals, unless actual current
cost figures are available. The cost approach is not developed since most investors and developers
do not utilize this method. However, we have provided an estimate of underlying land value.

The sales comparison approach involves a comparison of the appraised property with similar
properties that have sold recently. When properties are not directly comparable, sale prices may be
broken down into units of comparison, which are then applied to the Subject for an indication of its
likely selling price.

The income capitalization approach involves an analysis of the investment characteristics of the
property under valuation. The earnings potential of the property is carefully estimated and converted
into an estimate of the property's market value. The Subject was valued using the Direct
Capitalization Approach.

Property Identification
The Subject site is located at 1059 Oglethorpe Avenue SW in Atlanta, Fulton County, Georgia. The
Subject is identified by the following parcel ID number: 14-011800020495 and 14-011800020560.

Intended Use and Intended User

Vitus is the client in this engagement. We understand that they will use this document for submittal
to the Georgia Department of Community Affairs (DCA) for application to receive low income
housing tax credits (LIHTCs). Intended users are those transaction participants who are interested

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

parties and have knowledge of the Section 42 LIHTC program. These could include local housing
authorities, state allocating agencies, state lending authorities, LIHTC construction and permanent
lenders, and LIHTC syndicators. As our client, Vitus, owns this report and permission must be
granted from them before another third party can use this document. We assume that by reading this
report another third party has accepted the terms of the original engagement letter including scope of
work and limitations of liability. We are prepared to modify this document to meet any specific
needs of the potential users under a separate agreement.

Property Interest Appraised

The property interest appraised is fee simple, subject to any and all encumbrances, if applicable for
each value estimate.

Date of Inspection and Effective Date of Appraisal

The site was inspected on October 30, 2015. In general, we have prepared this report based on our
analysis of current market conditions relative to the Subject.

Scope of the Appraisal

For the purposes of this appraisal, the appraiser visually inspected the Subject and comparable data.
Individuals from a variety of city agencies as well as the Subject’s development team were consulted
(in person or by phone). Various publications, both governmental (i.e. zoning ordinances) and
private (i.e. Multiple List Services publications) were consulted and considered in the course of
completing this appraisal.
The scope of this appraisal is limited to the gathering, verification, analysis and reporting of the
available pertinent market data. All opinions are unbiased and objective with regard to value. The
appraiser made a reasonable effort to collect, screen and process the best available information
relevant to the valuation assignment and has not knowingly and/or intentionally withheld pertinent
data from comparative analysis. Due to data source limitations and legal constraints (disclosure
laws), however, the appraiser does not certify that all data was taken into consideration. Additional
scope of work items are discussed in various sections throughout this report.

Compliance and Competency Provision

The appraiser is aware of the compliance and competency provisions of USPAP, and within our
understanding of those provisions, this report complies with all mandatory requirements, and the
authors of this report possess the education, knowledge, technical skills, and practical experience to
complete this assignment competently, in conformance with the stated regulations. Moreover,
Advisory Opinion 14 acknowledges preparation of appraisals for affordable housing requires
knowledge and experience that goes beyond typical residential appraisals competency including
understanding the various programs, definitions, and pertinent tax considerations involved in the
particular assignment applicable to the location and development. We believe our knowledge and
experience in the affordable housing industry meets these supplemental standards.

Unavailability of Information
In general, all information necessary to develop an estimate of value of the Subject property was
available to the appraisers.

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Furniture, Fixtures, and Equipment

Removable fixtures such as kitchen appliances and hot water heaters are considered to be real estate
fixtures that are essential to the use and operation of the complex. Supplemental income typically
obtained in the operation of an apartment complex is included, which may include minor elements of
personal and business property. As immaterial components, no attempt is made to segregate these
items.

Ownership and History of Subject

Current ownership of the Subject is vested in The Ralph David Abernathy Tower, Inc. There have
been no transfers of the Subject property over the past three years. A purchase agreement dated
October 5, 2015 was provided by the client. The purchase agreement is between The Ralph David
Abernathy Tower, Inc. (Seller) and Vitus Development III, LLC (Buyer) for $8,250,000. The
purchase is an arm’s length transaction. Our concluded “as is” is $8,700,000 which is 5.5 percent
higher than the purchase price. We believe the purchase agreement was made with the September
2014 contract rents. However, the property will be underwritten with the September 2015 contract
rents, which is reflected in our value conclusion.

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REGIONAL AND LOCAL AREA ANALYSIS
 Abernathy Tower Apartments, Atlanta, GA; Appraisal

REGIONAL AND LOCAL AREA ANALYSIS

ECONOMIC ANALYSIS
The Atlanta-Sandy Springs-Roswell, GA MSA is comprised of Barrow, Bartow, Butts, Carroll,
Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett,
Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Morgan, Newton, Paulding, Pickens, Pike,
Rockdale, Spalding, and Walton. Atlanta is the county seat of Fulton County and is located
approximately 267 miles inland from the Atlantic Ocean. Atlanta also has good access to major
interstates, including Interstate 85, Interstate 75, and Interstate 20. Interstate 85 traverses
northeast/southwest and provides access to Alabama to the west and South Carolina to the east and
South Carolina. Interstate 75 traverses northwest/southeast and provides access to Tennessee to the
north and Florida to the south. Interstate 20 traverses east/west through the central portion of Georgia
and provides access to Alabama to the west and South Carolina to the east.

Major Employers
The following table is a list of the top 15 employers in the Atlanta-Sandy Springs-Roswell, GA
MSA.

MAJOR EMPLOYERS
Atlanta-Sandy Springs-Roswell, GA MSA
# Employer Industry Number Employed
1 Delta Airlines Transportation 31,237
2 Emory University/ Emory Healthcare Educational/Healthcare 29,937
3 Wal-Mart Stores, Inc. Retail Trade 20,532
4 The Home Depot, Inc. Retail Trade 20,000
5 AT&T Inc. Communications 17,882
6 The Kroger Co. Retail Trade 14,753
7 WellStar Health System Healthcare 13,500
8 Publix Super Markets, Inc. Retail Trade 9,494
9 United States Postal Service Government 9,385
10 Northside Hospital Healthcare 9,016
11 The Coca-Cola Company Retail Trade 8,761
12 United Parcel Service, Inc Postal Service 8,727
13 Piedmont Healthcare Healthcare 8,707
14 Centers for Disease Control and Prevention Healthcare 8,539
15 Children's Healthcare of Atlanta, Inc Healthcare 7,452
Source: The Metro Atlanta Chamber of Commerce, Novogradac & Company LLP, 10/2015

As indicated in the table above, the major employers in the MSA are varied and represent a wide
range of industries. The three largest employers are in the transportation, education/healthcare, and
retail trade industries.

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Expansions/Contractions
The following table illustrates business closures and layoffs within Atlanta, GA from 2014 to
October 2015, according to the Georgia Department of Labor’s Worker Adjustment and Retraining
Notification (WARN) filings.

WARN NOTICES - ATLANTA, GA

Company Jobs Lost County Industry Date
2015
Generation Mortgage Company 64 Fulton Finance 1/15/2015
Sony 100 Fulton Electronics 2/27/2015
Quad Graphics 110 DeKalb Printing 2/1/2015
Infosys McCamish Systems, LLC. 61 Fulton Finance 3/6/2015
Generation Mortgage Company 25 Fulton Finance 3/31/2015
Meda Pharmaceuticals 21 Cobb Healthcare 4/30/2015
Affinity Specialty Apparel, Inc. 60 Fulton Retail 4/15/2015
Transportation
United Airlines 87 Clayton 5/17/2015
New Breed Leasing of New Jersey, Inc. 89 Fulton Logistics 5/26/2015
The Intown Academy 60 Fulton Educational Services 5/29/2015
Generation Mortgage Company 76 Fulton Finance 7/31/2015
Delta Global Services N/Av Clayton Transportation 10/1/2015
Aramark 1,078 Fulton Retail 11/15/2015
2014
STS 328 Fulton Non-profit 1/1/2014
WIPRO 93 Fulton Technology 6/4/2014
New Continent Ventures 167 Fulton Management Services 7/11/2014
FEI 1 DeKalb Technology 7/14/2014
Nextitle 9 DeKalb Finance 7/14/2014
RCO Legal, P.S. 133 DeKalb Consulting 7/14/2014
Realty in Motion 13 DeKalb Finance 7/14/2014
FEI 1 DeKalb Technology 7/14/2014
Nextitle 9 DeKalb Finance 7/14/2014
RCO Legal, P.S. 133 DeKalb Finance 7/14/2014
Realty in Motion 13 DeKalb Finance 7/14/2014
T&M Construction 1 Fulton Construction 6/2/2014
Sodexo 86 Fulton Healthcare 7/8/2014
Bags Inc. 145 Clayton Retail 8/24/2014
Macy's 600 Fulton Retail 2/1/2014
Anthem Education 47 Fulton Educational Services 9/15/2014
Fulton County Housing and Human Services 27 Fulton Government 8/29/2014
Bank of America 51 Fulton Finance 11/18/2014
Total 3,688
Source: Georgia Department of Economic Development, October 2015

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As illustrated in the previous table, the PMA experienced several WARN filings from 2014 to 2015
for a total of 3,688 jobs affected.

Metro Atlanta Chamber of Commerce

According to Ms. Kelly Sydney, Vice President of Research, with the Metro Atlanta Chamber of
Commerce 2014 and 2015 have been generally stable years in terms of job growth and expansions in
the Atlanta area. Below are the largest expansions in Fulton County for 2015.

BUSINESS EXPANSIONS- FULTON COUNTY- 2015

Projected #
Company Action Industry of New
Jobs
Mercedes-Benz USA New Location/Expansion Automotive 950
Kaiser Permanente Expansion Healthcare 900
Sage New Location/Expansion Management/Technology 400
Stefanini Expansion Consulting 400
Hexaware New Location/Expansion Technology 300
Amtrack New Location/Expansion Transportation 200
Backbase New Location/Expansion Technology 150
Applied Systems, Inc. Expansion Technology 150
N3 Expansion Technology 150
BetterCloud Expansion Technology 120
Serta Simmons Bedding, Inc. New Location/Expansion Retail 110
Courion New Location/Expansion Technology 100
Varian Medical Systems, Inc. New Location/Expansion Technology 100
Ionic Security Expansion Technology 100
Prime Revenue, Inc. Expansion Management 100
Source: Metro Atlanta Chamber, 11/2015

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Atlanta Department of Planning and Community Development

We contacted Lanii Thomas, Senior Public Relations Manager for the City of Atlanta Department of
Planning and Community Development. Mrs. Thomas reported that there are a number of expansions
planned in the Atlanta area. The Atlanta BeltLine Project is a City of Atlanta development that will
include green space, trails, transit, and new housing along 22-mile historic rail lines that loop around
the urban core. The BeltLine development is projected to cost approximately $2.8 billion and take
approximately 25 years to complete. There will also be a 33-mile network of multi-use trails and the
BeltLine will increase Atlanta’s green space by nearly 40 percent as the project will add 1,300 acres
of new parks and green space. The Atlanta BeltLine is projected to generate more than $20 billion of
new economic development throughout 25 years of the Tax Allocation District and approximately
30,000 new jobs. The most recent BeltLine development in the Subject’s larger neighborhood is the
dedication of the Southwest Atlanta BeltLine Connector Trail system, which was completed in
August 2013. The trail consists of 4.5 miles, connects various neighborhoods and provides
pedestrian access to residents. Per the Atlanta BeltLine website, the first 1.2-mile portion of the
Southwest Connector Trail system is complete and it provides easier access from Beecher Hills and
Westwood Terrace neighborhoods to Beecher Hills Elementary and the existing Lionel Hampton
BeltLine trail.

Fort McPherson is located 0.5 miles southwest of the Subject. As part of the 2005 Base Realignment
and Closure (BRAC), Fort McPherson closed in 2011. This closure is estimated to have resulted in a
net loss of 4,141 jobs, including 1,881 civilian jobs and 2,260 military jobs. However, the fort is
proposed for redevelopment. Fort McPherson covers approximately 488 acres, 350 more than the
Atlantic Steel redevelopment which resulted in Atlanta Station, a massive mixed-use community in
the Midtown neighborhood in Atlanta. Fort McPherson already features a bowling alley, movie
theater, gymnasium, library, baseball field, community center, and older residential space.

The Fort McPherson Reuse Plan includes the following: a 35-acre high-density, mixed-use retail area
along Lee Street to create a “Main Street” district with approximately 400,000 square feet of retail
space; a 115-acre Employment District adjacent to the Main Street district that includes 4 million
square feet of office and bio-science research space; a Historic District with approximately 40-acres
on the National Historic Register that will have residential, commercial, and public uses; Linear Park
that will wrap around the property, connecting a Metropolitan Atlanta Rapid Transit Authority
station on the north side to a MARTA station on the southern portion of the property; an Event Space
with 30 acres; a Parade Ground for public use; and, approximately 4,600 new housing units in the
remaining area.

The redevelopment of Fort McPherson is projected to bring in 7,000 jobs, with another 5,000 to
6,000 indirect jobs from the development. This would bring in new jobs and investment into an older
section of the city that has suffered from vacant retail centers and deteriorating housing. Recent news
articles have reported that Tyler Perry will not purchase 330 acres to build a new studio, as had been
originally planned in the Fort McPherson redevelopment. The expansion was projected to bring
8,000 new jobs to the region. Plans remain for 158 acres to be redeveloped by the City of Atlanta
into green space and housing for homeless veterans.

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Employment and Unemployment Trends

The following table details employment and unemployment trends for the MSA and nation from
2005 to August 2015.

EMPLOYMENT & UNEMPLOYMENT TRENDS (NOT SEASONALLY ADJUSTED)

Atlanta-Sandy Springs-Roswell, GA MSA USA
Year Total % Unemployment Total % Unemployment
Change Change
Employment Change Rate Employment Change Rate
2005 2,445,674 2.7% 5.4% 0.6% 141,730,000 1.8% 5.1% -0.4%
2006 2,538,141 3.8% 4.7% -0.7% 144,427,000 1.9% 4.6% -0.5%
2007 2,618,825 3.2% 4.4% -0.2% 146,047,000 1.1% 4.6% 0.0%
2008 2,606,822 -0.5% 6.2% 1.7% 145,362,000 -0.5% 5.8% 1.2%
2009 2,452,057 -5.9% 9.9% 3.8% 139,877,000 -3.8% 9.3% 3.5%
2010 2,440,037 -0.5% 10.3% 0.4% 139,064,000 -0.6% 9.6% 0.3%
2011 2,486,369 1.9% 9.9% -0.3% 139,869,000 0.6% 8.9% -0.7%
2012 2,543,486 2.3% 8.8% -1.1% 142,469,000 1.9% 8.1% -0.8%
2013 2,573,517 1.2% 7.8% -1.0% 143,929,000 1.0% 7.4% -0.7%
2014 2,615,644 1.6% 6.8% -1.0% 146,305,000 1.7% 6.2% -1.2%
2015 YTD Average* 2,648,587 1.3% 5.9% -0.9% 148,479,500 1.5% 5.5% -0.7%
Aug-2014 2,606,620 - 7.3% - 146,647,000 - 6.3% -
Aug-2015 2,652,187 1.7% 5.6% -1.7% 149,228,000 1.8% 5.2% -1.1%
Source: U.S. Bureau of Labor Statistics November 2015
*2015 data through August

Total employment in the MSA has increased every year from 2005 through 2015 year-to-date, with
the exception of 2008, 2009, and 2010. Through year-to-date 2015, the 1.3 percent increase in total
employment in the MSA is 20 basis points lower than total employment growth on a national level,
as the nation has experienced a 1.5 percent increase year-to-date. It is important to note that current
employment exceeds pre-recessional levels. In addition, the August 2015 local employment level
has increased 1.7 percent from the same period in 2015.

Total unemployment figures show that the MSA’s year-to-date unemployment rate is 0.4 percentage
points higher than the national unemployment rate. The unemployment rate as of August 2015
decreased 1.7 percentage points from August 2014. Overall, the economic outlook for the MSA is
positive with total employment above pre-recessionary levels and unemployment rates decreasing
since 2010.

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Employment by Industry
The following table illustrates employment by industry for the PMA as of 2015.

2015 EMPLOYMENT BY INDUSTRY

PMA USA
Number Percent Number Percent
Industry Employed Employed Employed Employed
Health Care/Social Assistance 5,819 11.9% 20,205,674 13.7%
Accommodation/Food Services 5,513 11.2% 10,915,815 7.4%
Educational Services 5,394 11.0% 13,529,510 9.2%
Retail Trade 4,918 10.0% 17,089,319 11.6%
Transportation/Warehousing 3,471 7.1% 6,200,837 4.2%
Admin/Support/Waste Mgmt Srvcs 3,346 6.8% 6,242,568 4.2%
Public Administration 3,318 6.8% 7,099,307 4.8%
Construction 2,951 6.0% 9,392,204 6.4%
Other Services (excl Publ Adm) 2,737 5.6% 7,548,482 5.1%
Manufacturing 2,461 5.0% 15,651,841 10.6%
Prof/Scientific/Tech Services 1,998 4.1% 9,981,082 6.8%
Finance/Insurance 1,604 3.3% 7,026,905 4.8%
Information 1,362 2.8% 2,965,498 2.0%
Real Estate/Rental/Leasing 1,347 2.7% 2,759,067 1.9%
Wholesale Trade 1,216 2.5% 3,742,526 2.5%
Arts/Entertainment/Recreation 1,105 2.3% 3,193,724 2.2%
Utilities 262 0.5% 1,190,608 0.8%
Agric/Forestry/Fishing/Hunting 230 0.5% 1,941,156 1.3%
Mgmt of Companies/Enterprises 9 0.0% 115,436 0.1%
Mining 1 0.0% 997,794 0.7%
Total Employment 49,062 100.0% 147,789,353 100.0%
Source: ESRI Demographics 2010, Novogradac & Company LLP, November 2015

The PMA’s leading industries include health care/social assistance, accommodation/food services,
educational services, and retail trade. Together, these four industries make up 44.1 percent of total
employment in the PMA. The PMA is overly represented in sectors such as accommodation/food
services, educational services, transportation/warehousing, administration/support/waste
management services, and public administration compared to the nation as a whole. Comparatively,
the healthcare/social assistance, manufacturing, professional/scientific/technical services employ a
smaller proportion in the PMA than the nation. Healthcare/social assistance and educational services
in the PMA are traditionally more stable employment sectors whereas accommodation/food services
and retail trade are more volatile. Overall, the mix of industries in the local economy indicates a
relatively diversified work force that is somewhat susceptible to cyclical employment shifts.

Conclusion
Total employment in the MSA has increased every year from 2005 through 2015 year-to-date, with
the exception of 2008, 2009, and 2010. Through year-to-date 2015, the 1.3 percent increase in total
employment in the MSA is 20 basis points lower than total employment growth on a national level,
as the nation has experienced a 1.5 percent increase year-to-date. It is important to note that current
employment exceeds pre-recessionary levels. In addition, the August 2015 local employment level

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has increased 1.7 percent from the same period in 2015. Total unemployment figures show that the
MSA’s year-to-date unemployment rate is 0.4 percentage points higher than the national
unemployment rate. The unemployment rate as of August 2015 decreased 1.7 percentage points from
August 2014. Overall, the economic outlook for the MSA is positive with total employment above
pre-recessionary levels and unemployment rates decreasing since 2010.

The PMA’s leading industries include health care/social assistance, accommodation/food services,
educational services, and retail trade. Together, these four industries make up 44.1 percent of total
employment in the PMA. Healthcare/social assistance and educational services in the PMA are
traditionally more stable employment sectors whereas accommodation/food services and retail trade
are more volatile. Overall, the mix of industries in the local economy indicates a relatively
diversified work force that is somewhat susceptible to cyclical employment shifts.

According to Ms. Lanii Thomas, Senior Public Relations Manager for the City of Atlanta
Department of Planning and Community Development, the Atlanta area has seen a number of
expansions including the Atlanta Beltline Project and Fort McPherson Reuse Plan. These
expansions should help the unemployment rate in the market continue to gradually decline.

Furthermore, according to Ms. Kelly Sydney, Vice President of Research, with the Metro Atlanta
Chamber of Commerce 2014 and 2015 have been generally stable years in terms of job growth and
expansions in the Atlanta area.

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Primary Market Area Map

The following sections will provide an analysis of the demographic characteristics within the market
area. Data such as population, households and growth patterns will be studied, to determine if the
Primary Market Area (PMA) and the Atlanta-Sandy Springs-Roswell, Georgia MSA are areas of
growth or contraction.

The boundaries of the PMA are as follows:

North – Interstate 20/Highway 78

East – Highway 23/Highway 29
South – Interstate 20/Highway 78
West- Lakewood Freeway

The Primary Market Area (PMA) for the Subject consists of southern and western portions of the
city of Atlanta and was defined based on interviews with the local housing authority, property

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managers at comparable properties, and the Subject’s property manager, as well as based on our
knowledge of the area. The PMA includes all, or portions of, the following neighborhoods: West
End, Westview, Westwood Terrace, Beecher Hills, Adair Park, Cascade Avenue, Adams Park,
Pomona Park, Fort McPherson, Sylvan Hills, Venetial Hills, Hunter Hills, Vine City, English
Avenue, Knight Park, Bankhead, West Lake, Dixie Hills, Atlanta University, Rockdale, Mozley
Park, Center Hill, Grove Park, and Bush Mountains. We have estimated that approximately 15
percent of the Subject’s tenants originate from outside these boundaries. While we do believe the
Subject will experience leakage from outside the PMA boundaries, per the 2015 market study
guidelines, we have not accounted for leakage in our Demand Analysis found later in this report. The
furthest PMA boundary from the Subject is 5.3 miles.

For comparison purposes, the secondary market area (SMA) for the Subject is considered to be the
Atlanta-Sandy Springs-Roswell, GA MSA, which includes Barrow, Bartow, Butts, Carroll,
Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett,
Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Morgan, Newton, Paulding, Pickens, Pike,
Rockdale, Spalding, and Walton. Following is a map of the SMA.

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Population Trends
The following tables illustrate population trends in the PMA from 2000 to the projected market entry
date and through 2020. The MSA and nation are also presented for comparison purposes.
TOTAL POPULATION
Atlanta-Sandy Springs-
Year PMA USA
Roswell, GA MSA
Annual Annual Annual
Number Number Number
Change Change Change
2000 141,852 - 4,263,438 - 281,421,906 -
2010 123,423 -1.3% 5,286,728 2.4% 308,745,538 1.0%
2015 126,099 0.4% 5,527,230 0.9% 318,536,439 0.6%
Projected Mkt Entry
127,521 0.8% 5,619,452 1.2% 321,960,844 0.8%
December 2016
2020 131,117 0.8% 5,852,718 1.2% 330,622,575 0.8%
Source: ESRI Demographics 2014, Novogradac & Company LLP, November 2015

TOTAL SENIOR POPULATION (62+)

Atlanta-Sandy Springs-
Year PMA USA
Roswell, GA MSA
Annual Annual Annual
Number Number Number
Change Change Change
2000 18,668 - 407,225 - 41,475,021 -
2010 17,786 -0.5% 625,999 5.4% 50,358,738 2.1%
2015 20,233 2.6% 770,046 4.4% 58,335,275 3.0%
Projected Mkt Entry
21,069 2.9% 816,963 4.3% 61,029,963 3.3%
December 2016
2020 23,182 2.9% 935,635 4.3% 67,845,939 3.3%
Source: ESRI Demographics 2014, Novogradac & Company LLP, November 2015

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POPULATION BY AGE GROUP

PMA
Projected Mkt
Age Cohort 2000 2010 2015 Entry 2020
December 2016
0-4 10,266 9,143 8,868 8,949 9,155
5-9 11,309 7,891 8,418 8,372 8,256
10-14 10,751 7,277 7,441 7,593 7,979
15-19 12,815 10,724 10,033 10,118 10,334
20-24 12,019 11,558 11,460 11,303 10,906
25-29 10,380 9,407 9,549 9,637 9,860
30-34 9,733 8,917 9,270 9,352 9,560
35-39 10,424 8,049 8,127 8,298 8,730
40-44 10,130 7,373 7,484 7,547 7,705
45-49 9,317 7,935 7,229 7,322 7,556
50-54 7,854 7,898 7,704 7,591 7,306
55-59 6,004 7,151 7,586 7,604 7,651
60-64 5,456 5,786 6,740 6,911 7,342
65-69 4,507 4,396 5,347 5,594 6,219
70-74 3,886 3,649 3,985 4,242 4,893
75-79 2,853 2,703 2,993 3,099 3,367
80-84 2,160 1,867 1,998 2,072 2,260
85+ 1,988 1,699 1,866 1,915 2,038
Total 141,852 123,423 126,098 127,520 131,117
Source: ESRI Demographics 2014, Novogradac & Company LLP, November 2015

Overall population growth in the PMA was lower than the MSA and the nation from 2000 to 2010.
In fact, population within the PMA actually declined during this time frame. However, total
population in the PMA is projected to increase at a 0.8 percent annual rate from 2015 to 2020, a
growth rate similar to that of the nation but below the MSA as a whole during the same time period.
Furthermore, total senior population is expected to grow 2.9 percent annually from 2015 to 2020.
The largest age cohort in the PMA is between the ages of 20 and 24, at 9.1 percent of the population,
which is expected to remain the largest age cohort through 2020. In 2015, 16.0 percent of the
PMA’s population is 62+ which is the age range of tenants at the Subject currently. The projected
PMA senior population growth is expected to be below the MSA and nation through 2020, but above
the general population growth over the same time period.

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Fulton County

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Household Trends
The following tables illustrate household trends in the PMA from 2000 to the projected market entry
and through 2020. The MSA and nation are also presented for comparison purposes.

TOTAL NUMBER OF HOUSEHOLDS

Atlanta-Sandy Springs-
Year PMA USA
Roswell, GA MSA
Annual Annual Annual
Number Number Number
Change Change Change
2000 52,075 - 1,559,712 - 105,480,101 -
2010 48,205 -0.7% 1,943,885 2.5% 116,716,292 1.1%
2015 49,755 0.6% 2,033,479 0.9% 120,746,349 0.7%
Projected Mkt Entry
50,476 1.0% 2,068,202 1.2% 122,086,859 0.8%
December 2016
2020 52,298 1.0% 2,156,032 1.2% 125,477,562 0.8%
Source: ESRI Demographics 2014, Novogradac & Company LLP, November 2015

TOTAL NUMBER OF HOUSEHOLDS 62+

Atlanta-Sandy Springs-
Year PMA USA
Roswell, GA MSA
Annual Annual Annual
Number Number Number
Change Change Change
2010 13,263 - 253,346 - 13,263 -
2015 12,140 -0.8% 357,494 4.1% 12,140 -0.8%
Projected Mkt Entry
13,360 1.9% 430,781 3.9% 13,360 1.9%
December 2016
2020 13,917 2.9% 459,149 4.6% 13,917 2.9%
Source: ESRI Demographics 2014, Novogradac & Company LLP, November 2015

AVERAGE HOUSEHOLD SIZE

Atlanta-Sandy Springs-
Year PMA USA
Roswell, GA MSA
Number Percent Number Annual Change Number Annual Change
2000 2.61 - 2.68 - 2.59 -
2010 2.43 -0.7% 2.68 0.0% 2.58 -0.1%
2015 2.39 -0.3% 2.68 0.0% 2.57 0.0%
Projected Mkt Entry
2.39 -0.2% 2.68 0.0% 2.57 0.0%
December 2016
2020 2.37 -0.2% 2.67 0.0% 2.57 0.0%
Source: ESRI Demographics 2014, Novogradac & Company LLP, November 2015

As the previous table illustrates, the PMA was an area with an increasing number of households
from 2000 through 2015, a trend that is expected to continue through 2020. The number of
households in the PMA is expected to grow at a slightly slower pace than the MSA and but slightly
faster than the nation as a whole. Total senior households are expected to grow 2.9 percent annually
through 2020 which is below that of the MSA and similar to the nation. The increasing number of
senior households in the PMA bodes well for the Subject’s potential as a senior project.

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The average household size in the PMA, at 2.39, is smaller than the average household sizes in the
MSA and nation. The Subject offers studio and one-bedroom units targeted to seniors age 62 and
older. The average household size in the PMA is appropriate for the Subject’s unit mix.

Households by Tenure
The tables below depict household growth by tenure from 2000 through 2020.
TENURE PATTERNS PMA – NON ELDERLY POPULATION
Percentage Percentage
Owner- Owner- Renter- Renter-
Year Occupied Units Occupied Occupied Units Occupied
2010 13,818 36.1% 24,453 63.9%
2015 12,247 31.6% 26,476 68.4%
Projected Mkt Entry December 2016 12,248 31.5% 26,695 68.5%
2020 12,252 31.0% 27,248 69.0%
Source: ESRI Demographics 2014, Novogradac & Company LLP, November 2015

TENURE PATTERNS MSA – NON ELDERLY POPULATION

Percentage Percentage
Owner- Owner- Renter- Renter-
Year Occupied Units Occupied Occupied Units Occupied
2010 1,078,040 64.3% 597,820 35.7%
2015 1,014,930 59.9% 679,830 40.1%
Projected Mkt Entry December 2016 1,017,074 59.6% 688,198 40.4%
2020 1,022,496 59.0% 709,364 41.0%
Source: ESRI Demographics 2014, Novogradac & Company LLP, November 2015

The number of renter-occupied households in the PMA is above the number of owner-occupied
households, however the MSA has a higher percentage of owner-occupied households than renter-
occupied households. The percentage of renter-occupied housing is above the national average of
approximately 32 percent in both the PMA and MSA. The percentage of renter-occupied units in the
PMA is expected to increase slightly through 2020. Furthermore, the percentage of senior renter-
occupied units in the PMA is expected to increase slightly through 2020.

TENURE PATTERNS PMA –ELDERLY POPULATION

Percentage Percentage
Owner- Owner- Renter- Renter-
Year Occupied Units Occupied Occupied Units Occupied
2010 6,218 62.6% 3,716 37.4%
2015 6,272 56.9% 4,760 43.1%
Projected Mkt Entry December 2016 6,505 56.4% 5,027 43.5%
2020 7,094 55.4% 5,704 44.6%
Source: ESRI Demographics 2014, Novogradac & Company LLP, November 2015

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TENURE PATTERNS MSA –ELDERLY POPULATION

Percentage Percentage
Owner- Owner- Renter- Renter-
Year Occupied Units Occupied Occupied Units Occupied
2010 207,026 77.2% 60,999 22.8%
2015 258,804 76.4% 79,915 23.6%
Projected Mkt Entry December 2016 277,685 76.5% 85,245 23.5%
2020 325,444 76.7% 98,728 23.3%
Source: ESRI Demographics 2014, Novogradac & Company LLP, November 2015

The share of senior renter households in the PMA is below the share of owner households, similar to
the MSA. The percentage of senior renter-occupied housing is above the national average of
approximately 32 percent in both the PMA. The percentage of renter-occupied units in the PMA is
expected to increase slightly through 2020.
Households by Income
The following table depicts household income in 2010, 2015, market entry, and 2020 for the PMA.

HOUSEHOLD INCOME DISTRIBUTION - PMA

Projected Mkt
2010 2015 2020
Income Cohort Entry
# % # % # % # %
$0-9,999 9,279 19.2% 11,985 24.1% 12,353 24.5% 13,284 25.4%
$10,000-19,999 8,602 17.8% 10,070 20.2% 10,274 20.4% 10,789 20.6%
$20,000-29,999 6,555 13.6% 7,461 15.0% 7,606 15.1% 7,972 15.2%
$30,000-39,999 5,205 10.8% 4,878 9.8% 4,935 9.8% 5,079 9.7%
$40,000-49,999 4,429 9.2% 3,790 7.6% 3,817 7.6% 3,885 7.4%
$50,000-59,999 3,094 6.4% 2,584 5.2% 2,580 5.1% 2,570 4.9%
$60,000-74,999 3,066 6.4% 2,601 5.2% 2,591 5.1% 2,567 4.9%
$75,000-99,999 3,233 6.7% 2,772 5.6% 2,771 5.5% 2,766 5.3%
$100,000-124,999 1,879 3.9% 1,459 2.9% 1,435 2.8% 1,374 2.6%
$125,000-149,999 1,064 2.2% 749 1.5% 744 1.5% 731 1.4%
$150,000-199,999 1,102 2.3% 896 1.8% 871 1.7% 809 1.5%
$200,000+ 697 1.4% 510 1.0% 499 1.0% 473 0.9%
Total 48,205 100.0% 49,755 100.0% 50,476 100.0% 52,298 100.0%
Source: Ribbon Demographics 2014, Novogradac & Company LLP, November 2015

Households earning under $40,000 in the PMA comprise 69.1 percent of all income cohorts. The
Subject will target senior households earning up to $32,760 under the LIHTC program and
households with incomes as low as $0 with Section 8 subsidies; therefore, the Subject is well
positioned to continue to service this market. It should be noted that the area four-person median
income (AMI) in Fulton County, GA has declined from $71,800 in 2010 to $68,300 in 2015. The
decline of approximately 4.9 percent is due to AMI being based on five years of historical ACS
survey data, which currently includes the final year of the recent national recession.

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HOUSEHOLD INCOME DISTRIBUTION 62+ - PMA

Projected Mkt
2010 2015 2020
Income Cohort Entry
# % # % # % # %
$0-9,999 3,744 28.0% 3,979 28.6% 4,574 29.8% 3,744 28.0%
$10,000-19,999 3,419 25.6% 3,546 25.5% 3,866 25.2% 3,419 25.6%
$20,000-29,999 1,804 13.5% 1,881 13.5% 2,075 13.5% 1,804 13.5%
$30,000-39,999 1,344 10.1% 1,396 10.0% 1,528 10.0% 1,344 10.1%
$40,000-49,999 894 6.7% 922 6.6% 990 6.5% 894 6.7%
$50,000-59,999 629 4.7% 642 4.6% 675 4.4% 629 4.7%
$60,000-74,999 521 3.9% 531 3.8% 558 3.6% 521 3.9%
$75,000-99,999 526 3.9% 540 3.9% 574 3.7% 526 3.9%
$100,000-124,999 246 1.8% 245 1.8% 242 1.6% 246 1.8%
$125,000-149,999 83 0.6% 84 0.6% 87 0.6% 83 0.6%
$150,000-199,999 81 0.6% 82 0.6% 83 0.5% 81 0.6%
$200,000+ 70 0.5% 71 0.5% 74 0.5% 70 0.5%
Total 13,360 100.0% 13,917 100.0% 15,327 100.0% 13,360 100.0%
Source: Ribbon Demographics 2014, Novogradac & Company LLP, November 2015

Senior households earning under $30,000 in the PMA comprise 67.1 percent of all income cohorts.
The Subject will target senior households earning up to $32,760 under the LIHTC program and
households with incomes as low as $0 with Section 8 subsidies; therefore, the Subject is well
positioned to continue to service this market.

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Fulton County

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Conclusion
Overall population growth in the PMA was lower than the MSA and the nation from 2000 to 2010.
In fact, population within the PMA actually declined during this time frame. However, total
population in the PMA is projected to increase at a 0.8 percent annual rate from 2015 to 2020, a
growth rate similar to that of the nation but below the MSA as a whole during the same time period.
Furthermore, total senior population is expected to grow 2.9 percent annually from 2015 to 2020.
The largest age cohort in the PMA is between the ages of 20 and 24, at 9.1 percent of the population,
which is expected to remain the largest age cohort through 2020. In 2015, 16.0 percent of the
PMA’s population is 62+ which is the age range of tenants at the Subject currently. The projected
PMA senior population growth is expected to be below the MSA and nation through 2020, but above
the general population growth over the same time period.

Senior households earning under $30,000 in the PMA comprise 67.1 percent of all income cohorts.
The Subject will target households earning up to $32,760 under the LIHTC program and households
with incomes as low as $0 with Section 8 subsidies; therefore, the Subject is well positioned to
continue to service this market. Overall, the demographic data points to a growing population with
several households within the income band that the Subject would target under the LIHTC program,
without consideration of the project-based Section 8 subsidy.

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NEIGHBORHOOD ANALYSIS
Date of Site Visit and
Name of Site Inspector: Rana Barnes visited the site on October 30, 2015.
Physical Features of the Site: The following illustrates the physical features of the site.

Frontage: The Subject site has frontage along the south side of Foster
Place SW and the north side of Oglethorpe Avenue SW.
Visibility/Views: The Subject has good visibility from Foster Place SW and
average visibility from Oglethorpe Avenue SW. Views from
the Subject site are of multifamily developments, single-family
homes, vacant treed land, and a place of worship. Overall,
views are considered average.

Surrounding Uses: The following map illustrates the surrounding land uses.

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Surrounding uses consist of multifamily developments, single-

family homes, places of worship, and scattered
commercial/retail uses. The multifamily developments in the
Subject neighborhood appear to be in average condition. The
Subject site is located in southwestern Atlanta. There are
numerous commercial/retail uses in the Subject’s neighborhood
with the majority located along major arterials such as
Abernathy Boulevard, 0.2 miles north of the Subject. The
Subject site is considered “very walkable” by Walkscore.com
with a rating of 78. The Subject site is considered a desirable
location for senior rental housing. The site has reasonable
proximity to locational amenities.

Positive/Negative Attributes of Site: The Subject’s proximity to retail and other locational amenities
as well as its surrounding uses, which are in average to good
condition, are considered positive attributes. We did not notice
any negative attributes of the site during our site inspection.
The Subject has a historical vacancy of 3.9 to 6.4 percent from
2012 through 2014.

Proximity to Locational
Amenities: The following map and table details the Subject’s distance
from key locational amenities.

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LOCATIONAL AMENITIES
Map # Amenity or Service Distance
1 Bus Stop Adjacent
2 Brown Middle School 0.2 miles
3 Family Dollar 0.3 miles
4 CVS Pharmacy 0.3 miles
5 Shell Gas 0.4 miles
6 Post Office 0.4 miles
7 Wells Fargo Bank 0.5 miles
8 Hardy's Super Market 0.6 miles
9 M Agnes Jones Elementary School 0.9 miles
10 Adair Park 0.9 miles
11 Booker T. Washington High School 1.2 miles
12 Atlanta Police Department 1.8 miles
13 Grady Memorial Hospital 2.5 miles
14 Auburn Neighborhood Senior Center 2.8 miles

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Description of Land Uses: The Subject site is bounded by Foster Place Southwest to the
north and Oglethorpe Avenue Southwest to the south.
Surrounding uses predominantly consist of single-family and
multifamily properties. To the immediate north is The Wren’s
Nest and to the northwest is a place of worship. To the
immediate east is Abernathy Activity Center. To the immediate
south is Oglethorpe Avenue followed by Oglethorpe
Apartments which was not utilized as a comparable as they do
not offer studio or one-bedroom units. To the southeast are
Oglethorpe Terrace Apartments which were not utilized as a
comparable as they do not offer studio or one-bedroom units.
To the immediate west are single-family homes.

Approximately 0.2 miles north of the Subject is

commercial/retail uses along Abernathy Boulevard. Overall,
the Subject’s immediate neighborhood is dominated by
residential uses. The Subject is located in the southwestern
portion of Atlanta. Commercial occupancy in the Subject’s
neighborhood appeared to be 90 percent. The Subject site is
considered “very walkable” by Walkscore.com with a rating of
78.

Overall, the Subject has a desirable location for multifamily

housing. The Subject site is considered a desirable location for
rental housing. The uses surrounding the Subject are in average
to good condition and the site has reasonable proximity to
locational amenities.

Conclusion: The neighborhood surrounding the Subject site consists of

multifamily developments, single-family homes, places of
worship, and scattered commercial/retail uses. Overall, the
Subject is expected to continue to be compatible with the
surrounding uses and is a desirable location for multifamily
housing.

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DESCRIPTION OF THE SITE

The location of a multifamily property can have a substantial negative or positive impact upon the
performance, safety and appeal of the project. The site description discusses the physical features of
the site, as well as the layout, access issues and traffic flow.

Subject Site

Size: The Subject site encompasses approximately 1.62 acres or

approximately 70,567 square feet.

Shape: The site is generally rectangular in shape.

Existing Improvement: The site is currently improved with one five-story elevator-
serviced midrise-style building.

Frontage: The Subject site has frontage along the south side of Foster
Place SW and the north side of Oglethorpe Avenue SW.

Topography: The site is generally level.

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Visibility/Views: The Subject has good visibility from Foster Place SW and
average visibility from Oglethorpe Avenue SW. Views from
the Subject site are of multifamily developments, single-family
homes, a museum, and a place of worship. Overall, views are
considered average.

Access and Traffic Flow: The Subject is accessible via the south side of Foster Place
Southwest, an east/west neighborhood street that connects to
Lawton Street Southwest approximately 250 yards west of the
Subject. Lawton Street Southwest is a lightly trafficked
north/south neighborhood road that intersects Abernathy
Boulevard to the north and Oglethorpe Avenue Southwest to
the south. Abernathy Boulevard is a main east/west arterial
with many commercial/retail uses. Oglethorpe Avenue
Southwest is an east/west neighborhood street that connects to
Joseph E. Lowery Boulevard Southwest approximately 0.3
miles east of the Subject. Joseph E. Lowery Boulevard
Southwest is a major north/south arterial that connects to
Interstate 20 approximately 0.7 miles northeast of the Subject.
Overall access is considered good and traffic flow is considered
light.

Drainage: Appears adequate; however, no specific tests were performed.

Soil and Subsoil Conditions: We were not provided with soil surveys, but the existing
improvements suggest that the soils are adequate.

Flood Plain: According to www.floodinsights.com, the Subject is located in

Zone X (community map number 135157 panel number 0356F
dated September 18, 2013) and is located outside the 100 and
500-year flood plains. Further analysis is beyond the scope of
this report. Novogradac and Company LLP does not have
expertise in this field and cannot opine on this matter.

Environmental: We were provided with a Phase I Environmental Assessment

dated November 12, 2015 from EMG. According to the
assessment no additional action is required. Novogradac and
Company LLP are not experts in this field and cannot opine.

Detrimental Influences: No detrimental influences were identified.

Conclusion: The Subject will continue to be compatible with the existing

surroundings. No detrimental influences were identified in the
immediate neighborhood. The Subject is physically capable of

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supporting a variety of legally permissible uses, and is

considered an adequate building site.

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Description of Improvements
Property Profile Report
Abernathy Tower Apartments
Comp # Subject
Effective Rent Date 10/30/2015
Location 1059 Oglethorpe Avenue
SW
Atlanta, GA 30310
Fulton County

Units 100
Vacant Units 6
Vacancy Rate 6.00%
Type Midrise (age-restricted)
(5 stories)
Year Built / Renovated 1986 / 2011 / 2016
Major Competitors None Identified
Tenant Characteristics Senior tenants 62+
Contact Name Cheryl
Phone 404-659-1440

Market
Program LIHTC/Section 8 Leasing Pace 30 days
Annual Turnover Rate 20% Change in Rent (Past Remained stable
Units/Month Absorbed N/A Concession None
Section 8 Tenants N/A

Utilities
A/C included -- wall Other Electric included
Cooking included -- electric Water included
Water Heat included -- gas Sewer included
Heat included -- electric Trash Collection included

Unit Mix (face rent)

Beds Baths Type Units Size Rent Concession Restriction Waiting Vacant Vacancy Max Range
(SF) (monthly) List Rate rent?
0 1 Midrise 24 384 $717 $0 @60% Yes 0 0.00% yes
(5 stories) (Section 8)

1 1 Midrise 75 528 $768 $0 @60% Yes 5 6.70% yes

(5 stories) (Section 8)

2 1 Midrise 1 816 $0 $0 Non-Rental n/a 1 100.00% N/A

(5 stories)

Amenities
In-Unit Blinds Security Patrol
Carpeting
Coat Closet
Hand Rails
Oven
Refrigerator
Wall A/C

Property Parking spaces: 50 Premium none

Clubhouse/Meeting
Room/Community Room
Courtyard
Elevators
Central Laundry
Off-Street Parking
On-Site Management
Picnic Area

Services none Other none

Comments
The Subject is an existing Section 8 senior property that offers studio and one-bedroom units along with one two-bedroom manager's unit. The
property is being proposed for acquisition and rehabilitation with LIHTCs. Current contract rents effective September 11, 2014 are $1,123 and $1,208
for studio and one-bedroom units, respectively. The contact stated that the property maintains a waiting list that is 18 months in length.

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Unit Layout: We have inspected the floor plans at the Subject and they
appear market-oriented and functional.

NLA (residential space): The Subject currently has 49,632 square feet of net leasable
residential space, which will remain the same post-renovation.

Americans With
Disabilities Act of 1990: We assume the property does not have any violations of the
Americans With Disabilities Act of 1990.

Quality of Construction Condition

and Deferred Maintenance: At the time of the inspection, the Subject was in average to
good condition and there were no signs of deferred
maintenance. It is assumed that the Subject will be renovated in
a timely manner consistent with the information provided,
using average-quality materials in a professional manner. Post-
renovation, the Subject will exhibit good condition.

Scope of Renovations: The Subject is a proposed renovation of an existing Section 8

development utilizing LIHTC equity. The Subject was
originally constructed in 1986, and currently exhibits average
condition. Total construction hard cost including builder
profit, overhead, and contingency is estimated to be
$4,000,000, or $40,000 per unit.

The renovations will be moderate and will include the

installation of new high performance energy efficient sliding
windows and doors, new kitchen appliances (which will
include four burner electric self-cleaning range/ovens, Energy
Star side by side refrigerator/freezer, and microwaves), new
kitchen cabinets, sinks and counter tops, low flow shower
heads, bathroom sinks, grab bars in handicap accessible
shower/tubs, new vinyl tile flooring on ground floor lobby and
community rooms, new interior and exterior Energy Star
lighting fixtures, elevator upgrades, remove and replace
existing roofing system, repair and replace existing boilers,
upgrade the community gardens and indoor/outdoor activity
space.

Current Unit Mix and Rents: The following tables summarize the Subject’s current unit mix
and rents.

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CURRENT RENTS
Current Net Gross Contract
Unit Type Number of Units Utility Allowance (1)
Contract Rents Rents
Section 8
0BR/1BA 24 $1,123 $0 $1,123
1BR/1BA 75 $1,208 $0 $1,208
Manager's Unit
2BR/1BA 1 $0 $0 N/Av
Total 100
Notes (1) Source of Utility Allowance provided by HUD

UNIT MIX AND SQUARE FOOTAGE – AS IS

Unit Type Number of Units Unit Size (SF)* Gross Area

0BR/1BA 24 384 9,216

1BR/1BA 75 528 39,600
2BR/1BA 1 816 816
Total 100 49,632
*Measurements taken by appraiser 10/30/2015

The Subject is currently 94.0 percent occupied. According to

the Subject’s historical audited financials, the Subject has
operated with a total vacancy rate (including collection loss)
between 4.3 to 5.6 percent over the past two years with an
average total vacancy rate of 4.9 percent.

Proposed Unit Mix and Rents: The following tables summarize the Subject’s proposed unit
mix and asking rents. Tenants will pay 30 percent of income
towards rent.

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PROPOSED RENTS
2015 LIHTC Current Net
LIHTC Gross
Number of Utility Maximum Section 8
Unit Type Asking Asking
Units Allowance (1) Allowable Contract
Rents Rents
Rent Rents*

Section 8/60% AMI

0BR/1BA 24 $717 $0 $717 $717 $1,123
1BR/1BA 75 $768 $0 $768 $768 $1,208
Manager's Unit
2BR/1BA 1 $0 $0 $0 N/Av N/Av
Total 100
Notes (1) All utilities will continue to be included in the rent post-renovation.
*HAP contract effective September 2015; tenants pay 30 percent of income as rent

UNIT MIX AND SQUARE FOOTAGE – AS RENOVATED

Unit Type Number of Units Unit Size (SF) Gross Area
0BR/1BA 24 384 9,216
1BR/1BA 75 528 39,600
2BR/1BA 1 816 816
Total 100 49,632

Current Occupancy: The Subject is currently 94.0 percent occupied. According to

the Subject’s historical audited financials, the Subject has
operated with a total vacancy rate (including collection loss)
between 4.3 to 5.6 percent over the past two years with an
average total vacancy rate of 5.0 percent.

Current Tenant Income: Most of the current tenants at the Subject have incomes that
would be too low to income-qualify for the Subject without its
current Section 8 contract. According to the rent roll dated
September 30, 2015 it appears that one tenant will have an
income higher than the maximum allowable income threshold
post rehabilitation.

Functional Obsolescence: Site plans and floor plans were not provided as of the effective
date of the report. However, during our site inspection it
appears that the development is market-oriented and functional.
The Subject will be newly renovated. We assume the Subject
will not suffer from functional obsolescence.

Conclusion: The Subject currently exhibits average condition. Upon

rehabilitation, the Subject will be a good-quality apartment
complex, comparable or superior to most of the inventory in

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the area. The Subject appears to be market-oriented and

functional.

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REAL ESTATE ASSESSMENT AND TAXES

The following real estate tax estimate is based upon our interviews with local assessment officials,
either in person or via telephone. We do not warrant its accuracy. It is our best understanding of the
current system as reported by local authorities. Currently, the assessment of affordable housing
properties is a matter of intense debate and in many jurisdictions pending legal action. The issue
often surrounds how the intangible value or restricted rents are represented. We cannot issue a legal
opinion as to how the taxing authority will assess the Subject. We advise the client to obtain legal
counsel to provide advice as to the most likely outcome of a possible reassessment.

Real estate taxes for a property located in Fulton County are based upon a property’s assessed
valuation for each tax year. Real estate taxes in this county represent ad valorem taxes, meaning a tax
applied in proportion to value. The real estate taxes to an individual property may be determined by
multiplying the assessed value for the property by a composite rate. We spoke to Gaetjens Croeus, a
Fulton County assessor, who informed us that multifamily properties in the county are primarily
valued with a combination of all three approaches and are assessed at 40 percent of full market
value. According to our contact, all properties in the county are reassessed every year on January 1st
Additionally, a recent sale of a property is considered in the reassessment. According to the Fulton
County Tax Commissioner, the millage rate for the Subject for 2015 is $43.41 per $1,000 for the
combined county and city taxes. The following illustrates the Subject’s current market value; the
Subject’s current assessed value is zero as the property is currently tax exempt.

SUBJECT'S CURRENT ASSESSMENT- 2015 (TAX EXEMPT)

Market Value of Market Value of Total Market Market Value
Parcel ID Land Improvements Value Per Unit
14 011800020495 $338,000 $6,351,600 $6,689,600 $66,896
14 011800020560 $272,300 $35,400 $307,700 $3,077
Total $306,100 $6,387,000 $6,997,300 $69,973

The Subject currently benefits from a full tax exemption. According to the developer, the exemption
will not remain in effect upon transfer, due to the change in ownership to a for profit corporation. As
such, a typical buyer would need to contemplate an appropriate tax burden for both the “as is” and
“as renovated” valuation scenarios.

For illustrative purposes, we have presented the Subject’s various restricted and unrestricted tax
estimates using the recapitulation technique as the county will take the purchase price of the Subject
into account for the next assessment. The tables on the following page illustrate our tax analysis for
each valuation scenario, utilizing the recapitulation technique.

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TAX CALCULATION AND RECAPITULATION

As Is
Per Unit Total
NOI without Taxes $9,903 $628,196
Cap Rate 5.50% 5.50%
Assessment Ratio 40.00% 40.00%
Total Tax Calculation 4.341000% 4.341000%
Indicated Tax Burden $1,507 $150,738
Indicated Value Rounded $90,000 $8,700,000
Recapitulation
NOI Including Taxes $4,775 $477,458
Cap Rate 5.50% 5.50%
Capitalized Value $86,810.52 $8,681,052
Rounded $87,000 $8,700,000

Indicated Tax Burden $1,507 $150,738

Special Assessments $0 $0
Total Taxes & Special Assessments $1,507 $150,738
NOI Including Taxes & Spec. Assess. $4,774.58 $477,458

TAX CALCULATION AND RECAPITULATION

As Renovated Restricted
Per Unit Total
NOI without Taxes $5,409 $696,196
Cap Rate 5.50% 5.50%
Assessment Ratio 40.00% 40.00%
Total Tax Calculation 4.341000% 4.341000%
Indicated Tax Burden $1,671 $167,055
Indicated Value Rounded $100,000 $9,600,000
Recapitulation
NOI Including Taxes $5,291 $529,141
Cap Rate 5.50% 5.50%
Capitalized Value $96,207 $9,620,746
Rounded $96,000 $9,600,000

Indicated Tax Burden $1,671 $167,055

Special Assessments $0.00 $0
Total Taxes & Special Assessments $1,671 $167,055
NOI Including Taxes & Spec. Assess. $5,291 $529,141

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TAX CALCULATION AND RECAPITULATION

As Renovated Unrestricted
Per Unit Total
NOI without Taxes $9,903 $334,984
Cap Rate 5.50% 5.50%
Assessment Ratio 40.00% 40.00%
Total Tax Calculation 4.341000% 4.341000%
Indicated Tax Burden $804 $80,381
Indicated Value Rounded $50,000 $4,600,000
Recapitulation
NOI Including Taxes $2,546 $254,603
Cap Rate 5.50% 5.50%
Capitalized Value $46,291 $4,629,148
Rounded $46,000 $4,600,000

Indicated Tax Burden $804 $80,381

Special Assessments $0 $0
Total Taxes & Special Assessments $804 $80,381
NOI Including Taxes & Spec. Assess. $2,546 $254,603

The previous tables indicate an as is, as renovated restricted, and as renovated unrestricted tax
expense of $1,507, $1,671, and $804 per unit, respectively. The developer’s restricted tax budget is
$1,400 per unit for 2015, which is just slightly below our restricted tax estimates. Therefore, we
have deferred to our estimates, based on our recapitulation calculations.

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ZONING

Current Zoning
According to the City of Atlanta Zoning Map the Subject site is zoned RG-4-C, Residential General
District Sector 4. The principal residential uses permitted under this zoning code are single-family
and multifamily developments. The Subject site is 1.62 acres, or 70,567 square feet. This zoning
district allows for a maximum floor-to-area ratio of 1.49. The Subject is currently developed to a
floor-to-area ratio of 1.81, above the requirement for Sector 4 of the General Residential District.
Furthermore, RG-4-C requires 0.73 parking spaces per dwelling unit, which would require the
Subject to provide a minimum of 73 parking spaces. The Subject currently offers approximately 50
off-street parking spaces. The site is currently above the maximum floor-to-area ratio and below the
required parking spaces. The Subject appears to be a legal, non-conforming use.

Prospective Zoning Changes

We are not aware of any proposed zoning changes at this time.

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COMPETITIVE RENTAL/DEMAND ANALYSIS

SUPPLY ANALYSIS

INTERVIEWS/DISCUSSION

Fort Valley’s Assisted Housing Programs Department

According to Ken with the Atlanta Housing Authority, there are seven regions under the Atlanta
Housing Authority’s jurisdiction and currently 10,000 applications for Housing Choice Vouchers.
The waiting list was last opened in January 2015. Ken could not provide the number of vouchers
currently in use within the city. The following table illustrates the current gross rent payment
standards for the Southwest Region.

ATLANTA, GA- SOUTHWEST REGION PAYMENT STANDARDS

Bedroom Type Payment Standard Rent
0BR $500
1BR $780
2BR $900
3BR $1,095
4BR $1,195

The Subject’s proposed gross studio LIHTC rents are above the current payment standards and the
proposed one-bedroom rents are below. Nonetheless, the Subject’s units will continue to benefit
from project-based Section 8 subsidies post-renovation. As such, tenants will pay 30 percent of
income as rent, not to exceed the LIHTC rents, and an analysis of tenant based vouchers is moot.

LIHTC Competition/Recent and Proposed Construction

According to the Georgia Department of Community Affairs, there are two proposed LIHTC projects
in the development pipeline for the PMA, which are detailed as follows:

• Gateway Capital View will be located at 1374 Murphy Avenue approximately 1.2
miles south of the Subject if it is allocated LIHTCs in the 2015 funding period. The
property will offer for 94 one and two-bedroom family units to tenants earning 60
percent of the AMI or less. The one-bedroom units would compete with the Subject
upon competition.

• Phoenix House is located at 1296 Murphy Avenue SW approximately 1.1 miles south
of the Subject. Phoenix House has applied for LIHTCs in the 2015 funding period to
rehabilitate its 69 studio units. Phoenix House targets mentally disabled and formerly
homeless tenants and operates with Shelter Plus Care subsidy. This property does not
currently compete with the Subject due to the target tenancy and will not after
renovations.

Planning
We spoke with Theresa Hill with the City of Atlanta Multifamily Housing Department in regards to
planned, proposed, or recently completed residential development in the Subject’s area. Ms. Hill

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informed us of two senior multifamily projects in Atlanta. City Lights, is an 80-unit senior
development that is currently under construction and is expected to be completed in September 2016.
City Lights will consist of 80 one-bedroom units, 38 of which will be restricted to seniors earning 80
percent of the AMI or below. City Lights will be located 3.6 miles northeast of the Subject outside
of the PMA. Reynoldstown Senior Apartments will be a 70-unit senior LIHTC development and
will offer one and two-bedroom units along with a manager’s unit. Reynoldstown Senior
Apartments will be located 3.7 miles east of the Subject outside the PMA. Ms. Hill was unaware of
any proposed or recently completed market rate multifamily developments in the Subject’s area.

Additionally, according to Reis.com, Glenwood Place Apartments will be located at Glenwood

Avenue and Bill Kennedy Way approximately 2.9 miles east of the Subject. Glenwood Place
Apartments will offer 216 apartments, senior housing, 24,000 square feet of restaurants and shops,
along with an 118,000 Kroger Grocery Store. Glenwood Place Apartments broke ground in April
2015 and will be completed sometime in the fall of 2016. We were unable to obtain information
regarding unit mix and rents.

Survey of Comparable Projects

Comparable properties are examined on the basis of physical characteristics, i.e. building type,
age/quality, level of common amenities, absorption, as well as similarity in rent. We attempted to
compare the Subject to complexes from the competing market to provide a broader picture of the
health and available supply in the market. Our competitive survey includes nine “true” comparable
properties containing 2,235 units that are 99.1 percent occupied. A detailed matrix describing the
individual competitive properties as well as the proposed Subject is provided later in this section. A
map illustrating the location of the Subject in relation to comparable properties is also provided in
this section. The properties are further profiled in the following write-ups. The property descriptions
include information on vacancy, turnover, absorption, age, competition, and the general health of the
rental market, when available.

The availability of LIHTC data is considered good. There are numerous LIHTC properties in the
PMA, four of which we selected as “true” comparables. Additionally, we included two LIHTC
properties that are located outside the PMA. The availability of market rate data is also considered
good as there are a sufficient number of market rate properties that are located within the PMA. We
have included two market rate properties and five mixed income properties in the rental analysis.
Four of the seven market rate/mixed income properties are located outside the PMA. These
comparable market rate properties were built between 952 and 2007. These projects offer a mix of
studio, one, two, and three-bedroom units.

It should be noted that four of the nine comparables are located outside the PMA. We expanded our
search outside the PMA to incorporate comparables that offered senior tenancy and contained studio
and one-bedroom units that are similar sizes as compared to the Subject. We believe that even
though some of the comparables are further than generally warranted that they are a good comparison
to the Subject.

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Excluded Properties
The following table illustrates properties within the PMA that have been excluded from our analysis
along with their reason for exclusion.

EXCLUDED PROPERTIES IN THE PMA

Property Name Address Zip Code Rent Structure Reason for Exclusion Units Occupancy Waiting list
Baptist Towers 1881 Myrtle Dr SW 30311 Senior/Section 8 Subsidized N/Av N/Av N/Av
142 Meldon Ave Se 142 Meldon Ave Se 30315 Senior LIHTC Superior condition to Subject N/Av N/Av N/Av
416 Atwood St Sw 416 Atwood St SW 30310 LIHTC Only two units 2 100% No
426 Atwood St Sw 427 Atwood St Sw 30310 LIHTC Only two units 2 100% No
432 Atwood St Sw 432 Atwood St SW 30310 LIHTC Only two units 2 100% No
494 Atwood St Sw 495 Atwood St Sw 30310 LIHTC Only two units 2 100% No
766 Azalia St Sw 767 Azalia St Sw 30310 LIHTC Only two units 2 100% No
770 Azalia St Sw 770 Azalia St SW 30310 LIHTC Only two units N/Av N/Av N/Av
774 Azalia St Sw 774 Azalia St Sw 30310 LIHTC Only two units N/Av N/Av N/Av
920 Sells Ave Sw 921 Sells Ave Sw 30310 LIHTC No information available N/Av N/Av N/Av
924 Mathews St Sw 924 Mathews St SW 30310 LIHTC Only six units N/Av N/Av N/Av
932 Mathews St Sw 933 Mathews St Sw 30310 LIHTC Only two units 2 100% No
936 Mathews St Sw 936 Mathews St Sw 30310 LIHTC Only two units N/Av N/Av N/Av
Allen Hills Apartments 3155 Hickman Dr NW 30311 Section 8 Subsidized N/Av N/Av N/Av
Allen Temple 50 Allen Temple Ct NW 30311 LIHTC Superior condition to Subject N/Av N/Av N/Av
Amal Townhome Community 535 Amal Dr SW 30315 LIHTC Adaquate comparable closer 100 N/Av N/Av
Ashley Collegetown, Phase II 965 Sells Ave SW 30310 LIHTC Superior condition to Subject N/Av N/Av N/Av
Ashley West End 717 Lee Street SW 30314 LIHTC Dissimilar rent structure 112 99% Yes
The Villages at Carver 174 Moury Ave Sw 30315 LIHTC Superior condition to Subject 667 97% Yes-7,000 households
Atlanta Napfe Elderly Towers 359 W Lake Ave NW 30318 Senior/Section 8 Subsidized 97 96% Yes
Atrium At Collegetown 435 Joseph E. Lowery Blvd. SW 30310 LIHTC Superior amenities included 190 100% Yes-187 households
Atwood Street Duplex 656 Atwood Street SW 30310 LIHTC Only two units 2 100% No
Berean Village & Senior Service Center 230 Westview Place SW 30314 Section 8 Subsidized N/Av N/Av N/Av
Betmar Village 345 Ashwood Avenue 30315 LIHTC Superior condition to Subject 47 100% Yes
Boynton Village (FKA Stanton Oaks) 1044 Capital Ave SE 30315 Section 8 Subsidized N/Av N/Av N/Av
Brentwood Creek 1935 Alison Ct SW 30311 LIHTC Superior condition to Subject N/Av N/Av N/Av
Brentwood Heights 1935 Alison Ct SW 30311 LIHTC Superior condition to Subject N/Av N/Av N/Av
Capitol Avenue School 811 Hank Aaron Drive Se 30315 Senior/Section 8 Subsidized 48 N/Av N/Av
Capitol Towers 830 Crew Street SW 30315 Senior/Section 8 Subsidized 39 100% Yes-1.5 years
Capitol Vanira 942 Capitol Ave 30315 Section 8 Subsidized N/Av N/Av N/Av
Caribu Apartments 2001 Sylvan Road 30310 Market Adaquate comparable closer 166 0.98 No
City Views At Rosa Burney Park 259 Richardson Street 30312 LIHTC/PBRA Subsidized 180 99% Yes
Columbia At Peoplestown 222 Tuskegee St SE 30315 LIHTC Superior condition to Subject N/Av N/Av N/Av
Columbia at Sylvan Hills 1151 Astor Ave Sw 30310 LIHTC Superior condition to Subject 191 94% Yes
Columbia Blackshear Senior Residences 14 Meldon Avenue SW 30315 LIHTC Superior condition to Subject N/Av N/Av N/Av
Columbia Plaza Apts 1017 Westview Drive SW 30310 LIHTC Unable to contact N/Av N/Av N/Av
Community Friendship 684 Lawton St 30310 Section 8 Subsidized N/Av N/Av N/Av
Coulmbia High Pt Estates Sr 220 Bowen Cir SW 30315 Senior LIHTC Adaquate comparable closer N/Av N/Av N/Av
Courtyard At Maple 55 Maple Street Nw 30314 LIHTC Superior condition to Subject 182 100% No
Croggman School Lofts 1094 West Ave Sw 30315 LIHTC Adaquate comparable closer N/Av N/Av N/Av
Enclave at Webster Park 2640 M.L.K. Jr Dr NW 30311 LIHTC Superior condition to Subject N/Av N/Av N/Av
Fairlie Poplar Lofts 8789 Fairlie Street 30303 Market Inferior condition to Subject 15 0.99 No
Friendship Towers 35 Northside Dr SW 30313 Senior/Section 8 Subsidized 102 100% Yes-6 months
Gardens At Collegetown 387 Joseph E Lowery Blvd SW 30310 LIHTC Superior condition to Subject N/Av N/Av N/Av
Gates Park Crossing Hfs Apts 5555 Glenridge Con 30342 LIHTC Superior condition to Subject N/Av N/Av N/Av
Gateway Apts At Northside Village 370 Northside Dr NW 30318 LIHTC Adaquate comparable closer 261 N/Av N/Av
Georgia Avenue Highrise 174 Georgia Ave., SE 30312 PH Subsidized N/Av N/Av N/Av
Grant Park Commons 1940 Fisher Road SE 30315 LIHTC Dissimilar unit mix 344 70% No
Greenwich Street Apts 1241 Greenwich St SW 30310 LIHTC Only two units 2 N/Av N/Av
Lillie R Campbell House 1830 Campbellton Rd SW 30311 Senior LIHTC Superior condition to Subject N/Av N/Av N/Av
Magnolia Park Apts, Phase II 60 Paschal St 30314 LIHTC Adaquate comparable closer N/Av N/Av N/Av
Martin Street Plaza 600 Martin Street SE 30312 PH Subsidized N/Av N/Av N/Av
Mechanicsville Apts, Phase III 565 Wells St SW 30312 LIHTC Superior condition to Subject N/Av N/Av N/Av
Mechanicsville Apts, Phase VI 565 McDaniel St SW 30312 LIHTC Superior condition to Subject N/Av N/Av N/Av
Mechanicsville Station 520 Fulton Street 30312 Section 8 Subsidized 164 96% Yes
Oakland City/West End Apartments 1191 Oakland Lane 30310 Section 8 Subsidized N/Av N/Av N/Av
Oglethorpe Apartments 1058 Oglethorpe Ave. SW 30310 Market Dissimilar unit mix N/Av N/Av N/Av
Park At Lakewood 1991 Delowe Drive 30311 LIHTC Dissimilar unit mix 299 60% No

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

Patterson Heights 876 Washington St Sw 30315 LIHTC Only 10 units 10 N/Av N/Av
Peaks At Martin Lurther King 2423 M.L.K. Jr Dr NW 30311 LIHTC Superior condition to Subject N/Av N/Av N/Av
Pittsburgh, Phase I L220 765 McDaniel St SW 30310 Senior LIHTC Superior condition to Subject 220 N/Av N/Av
Preserve At Bent Creek 1994 Bent Creek Way SW 30311 LIHTC Superior condition to Subject 324 94% No
Preserve At Collier Ridge 1021 Harwell Rd NW 30318 LIHTC Superior condition to Subject 416 70% No
Provenance At Hollowell Family 2748 Donald Lee Hollowell Pkwy Nw 30318 LIHTC Adaquate comparable closer N/Av N/Av N/Av
Providence Manor 2447 Campbellton Rd 30311 Section 8 Subsidized N/Av N/Av N/Av
QLS Haven 1840 Campbellton Road 30311 Senior/Section 8 Subsidized 120 98% Yes-2 years
Reed Street Apts 565 Reed St SE 30312 LIHTC Dissimilar unit mix N/Av N/Av N/Av
Rosa Burney Manor 582 Cooper Street 30312 LIHTC Dissimilar unit mix 54 98% Yes-6 households
Seven Courts 2800 Martin Luther King Jr Blvd 30311 LIHTC Superior condition to Subject 171 91% Yes
Showcase District 922 Mathews St Sw 30310 LIHTC Could not reach N/Av N/Av N/Av
Square At Peoplestown 875 Hank Aaron Drive 30315 LIHTC Superior condition to Subject 94 96% No
Sylvan Circle 1950 Sylvan Road SW 30310 Market Inferior condition to Subject 296 0.5 No
The Veranda At Collegetown 372 Legacy Dr 30310 Senior/Section 8 Subsidized 100 100% Yes
The Villages at Castleberry Hill 601 Greensferry Ave Sw 30314 LIHTC Superior condition to Subject 450 97% Yes-100 households
Thornton Place 3056 Pomona Way 30344 LIHTC Only 12 units 12 N/Av N/Av
Toby Sexton Redevelopment 490 Glenn St SW 30312 LIHTC Not enough information available N/Av N/Av N/Av
Trestletree Village Apts 904 Confederate Ct SE 30312 Section 8 Subsidized 188 100% Yes-500 households
Veranda Carver 217 SW Thirkield Ave 30315 LIHTC Superior condition to Subject N/Av N/Av N/Av
Villages Of Cascade Apts 821 Celeste Ln SW 30331 LIHTC Dissimilar unit mix N/Av N/Av N/Av
Washington Heights 1013 Washington Heights Ter NW 30314 LIHTC Single-family home 1 N/Av N/Av
Wells Court Commons 1856 Wells Drive SW 30311 LIHTC Dissimilar unit mix N/Av N/Av N/Av
Westview Lofts 202 11th St NE 30309 LIHTC Only 21 units 21 N/Av N/Av

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

Comparable Rental Property Map I

COMPARABLE PROPERTIES
# Property Name City Type Distance
1 Baptist Gardens Atlanta Senior LIHTC 3.1 miles
2 Big Bethel Village* Atlanta Senior LIHTC/Market 4.9 miles
3 Brentwood Village Apartments Atlanta LIHTC 2.9 miles
Columbia Senior Residences At Senior LIHTC/Market/Public
4 Mechanicsville Atlanta Housing/PBRA 1.2 miles
5 Heritage Greene* Atlanta LIHTC/Market 4.2 miles
6 Oglethorpe Place Atlanta LIHTC/Market 0.4 miles
7 Calvin Court* Atlanta Senior Section 8/Market 7.6 miles
8 Donnelly Gardens Atlanta Market 0.4 miles
9 The Darlington* Atlanta Market 5.4 miles
*Located outside the PMA

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

Comparable Rental Property Map II

COMPARABLE PROPERTIES
# Property Name City Type Distance
1 Baptist Gardens Atlanta Senior LIHTC 3.1 miles
2 Big Bethel Village* Atlanta Senior LIHTC/Market 4.9 miles
3 Brentwood Village Apartments Atlanta LIHTC 2.9 miles
Columbia Senior Residences At Senior LIHTC/Market/Public
4 Mechanicsville Atlanta Housing/PBRA 1.2 miles
5 Heritage Greene* Atlanta LIHTC/Market 4.2 miles
6 Oglethorpe Place Atlanta LIHTC/Market 0.4 miles
7 Calvin Court* Atlanta Senior Section 8/Market 7.6 miles
8 Donnelly Gardens Atlanta Market 0.4 miles
9 The Darlington* Atlanta Market 5.4 miles
*Located outside the PMA

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

The following tables illustrate detailed information in a comparable framework for the Subject and
the comparable properties.

SUMMARY MATRIX
Comp # Project Distance Type / Built / Market / Subsidy Units # % Restriction Rent Size Max Wait Units Vacanc
Renovated (Adj.) Vacant y Rate
(SF) Rent? List?
Subject Abernathy Tower Apartments n/a Midrise LIHTC/Section 8 Studio / 1BA 24 24.0% @60% $717 384 yes Yes 0 0.0%
(age-restricted)
1059 Oglethorpe Avenue SW (5 stories) 1BR / 1BA 75 75.0% @60% $768 528 yes Yes 5 6.7%
Atlanta, GA 30310 1986 / 2011 2BR / 1BA 1 1.0% Non-Rental $0 816 n/a 1 100.0%
Fulton County

100 100.0% 6 6.0%

1 Baptist Gardens 3.1 miles Lowrise LIHTC 1BR / 1BA 25 25.0% @50% $673 750 yes Yes 0 0.0%
(age-restricted)
1928 Delowe Drive SW (4 stories) 1BR / 1BA 75 75.0% @60% $700 750 no Yes 1 1.3%
Atlanta, GA 30311 2013 / n/a
Fulton County
100 100.0% 1 1.0%
2 Big Bethel Village 4.9 miles Lowrise LIHTC, Market Studio / 1BA 14 11.7% @60% $650 358 no Yes 0 0.0%
(age-restricted)
500 Richard Allen Boulevard SW (3 stories) Studio / 1BA 4 3.3% Market $700 358 n/a No 0 0.0%
Atlanta, GA 30331 2003 / n/a 1BR / 1BA 19 15.8% @60% $750 433 no Yes 0 0.0%
Fulton County 1BR / 1BA 6 5.0% @60% $795 500 n/a Yes 0 0.0%
1BR / 1BA 6 5.0% @60% $795 538 no Yes 0 0.0%
1BR / 1BA 5 4.2% Market $805 433 no No 0 0.0%
1BR / 1BA 3 2.5% Market $930 500 n/a No 0 0.0%
1BR / 1BA 3 2.5% Market $940 538 n/a No 0 0.0%
1.5BR / 1BA 10 8.3% @60% $820 630 no Yes 0 0.0%
1.5BR / 1BA 1 0.8% Market $1,050 630 n/a No 0 0.0%
1.5BR / 1BA 4 3.3% Market $1,075 639 n/a No 0 0.0%
2BR / 2BA 9 7.5% @60% $995 700 no Yes 0 0.0%
2BR / 2BA 26 21.7% @60% $995 759 no Yes 1 3.8%
2BR / 2BA 10 8.3% Market $1,175 759 n/a No 1 10.0%

120 100.0% 2 1.7%

3 Brentwood Village Apartments 2.9 miles Garden LIHTC Studio / 1BA N/A N/A @60% $549 487 no None 0 N/A
1935 Alison Court (3 stories) 1BR / 1BA N/A N/A @60% $601 584 no None 1 N/A
Atlanta, GA 30311 2001 / n/a 1BR / 1BA N/A N/A @60% $699 648 no None 0 N/A
Fulton County 2BR / 1BA N/A N/A @60% $732 648 no None 1 N/A
2BR / 2BA N/A N/A @60% $832 975 no None 0 N/A
3BR / 2BA N/A N/A @60% $857 1,028 no None 2 N/A

506 100.0% 4 0.8%

4 Columbia Senior Residences At 1.2 miles Midrise LIHTC, Market, Public 1BR / 1BA 16 10.4% @60% $886 750 yes Yes N/A N/A
Mechanicsville (age-restricted) Housing, PBRA
555 Mcdaniel St (4 stories) 1BR / 1BA 3 1.9% Market $1,039 750 n/a Yes N/A N/A
Atlanta, GA 30312 2007 / n/a 1BR / 1BA 81 52.6% PBRA N/A 750 n/a Yes N/A N/A
Fulton County 1BR / 1BA 54 35.1% Public Housing N/A 750 n/a Yes N/A N/A

154 100.0% 4 2.6%

5 Heritage Greene 4.2 miles Garden LIHTC, Market Studio / 1BA 1 0.9% @30% $375 555 no Yes 0 0.0%
2891 Springdale Road (2 stories) Studio / 1BA 2 1.8% @50% $634 555 no Yes 0 0.0%
Atlanta, GA 30315 1980s / 2004 Studio / 1BA 1 0.9% Market $669 555 n/a Yes 0 0.0%
Fulton County 1BR / 1BA 8 7.3% @30% $413 745 no Yes 0 0.0%
1BR / 1BA 25 22.9% @50% $690 745 no Yes 0 0.0%
1BR / 1BA 12 11.0% @54% $749 745 no Yes 0 0.0%
1BR / 1BA 11 10.1% Market $803 745 n/a Yes 0 0.0%
2BR / 1BA 6 5.5% @30% $508 947 no Yes 0 0.0%
2BR / 1BA 20 18.3% @50% $838 947 no Yes 0 0.0%
2BR / 1BA 7 6.4% @54% $904 947 no No 0 0.0%
2BR / 1BA 8 7.3% Market $944 947 n/a No 0 0.0%
3BR / 2BA 1 0.9% @30% $598 1,057 n/a Yes 0 0.0%
3BR / 2BA 4 3.7% @50% $984 1,057 n/a Yes 0 0.0%
3BR / 2BA 1 0.9% @54% $1,054 1,057 no Yes 0 0.0%
3BR / 2BA 2 1.8% Market $1,129 1,057 n/a No 0 0.0%

109 100.0% 0 0.0%

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

6 Oglethorpe Place 0.4 miles Garden LIHTC, Market 1BR / 1BA 7 4.9% @50% $705 670 no No 0 0.0%
835 Oglethorpe Av. SW (3 stories) 1BR / 1BA 29 20.1% Market $992 670 n/a No 0 0.0%
Atlanta, GA 30310 1996 / n/a 2BR / 1BA 10 6.9% @50% $820 903 no No 0 0.0%
Fulton County 2BR / 1BA 38 26.4% Market $1,195 903 n/a No 0 0.0%
2BR / 2BA 10 6.9% @50% $865 1,080 no No 0 0.0%
2BR / 2BA 50 34.7% Market $1,195 1,080 n/a No N/A N/A

144 100.0% 8 5.6%

7 Calvin Court 7.6 miles Highrise Market, Section 8 Studio / 1BA 38 15.8% Market $622 378 n/a Yes 0 0.0%
(age-restricted)
479 E. Paces Ferry Road, NE (11 stories) Studio / 1BA 53 22.1% Section 8 $586 378 n/a Yes 0 0.0%
Atlanta, GA 30305 1969 / As needed Studio / 2BA 39 16.2% Market $1,092 756 n/a Yes 0 0.0%
Fulton County 1BR / 1BA 36 15.0% Market $820 539 n/a Yes 0 0.0%
1BR / 1BA 35 14.6% Market $931 600 n/a Yes 0 0.0%
1BR / 1BA 39 16.2% Section 8 $773 539 n/a Yes 0 0.0%

240 100.0% 0 0.0%

8 Donnelly Gardens 0.4 miles Garden Market Studio / 1BA 8 3.2% Market $598 550 n/a No 0 0.0%
1295 Donnelly Avenue SW (2 stories) 1BR / 1BA 176 70.4% Market $608 675 n/a No 0 0.0%
Atlanta, GA 30310 1965 / As needed 1BR / 1BA N/A N/A Market $618 740 n/a No 0 N/A
Fulton County 2BR / 1BA 14 5.6% Market $741 850 n/a No 0 0.0%
2BR / 1.5BA 52 20.8% Market $761 950 n/a No 0 0.0%

250 100.0% 0 0.0%

9 The Darlington 5.4 miles Highrise Market Studio / 1BA 250 40.8% Market $716 430 n/a No 0 0.0%
2025 Peachtree Road (13 stories) Studio / 1BA 250 40.8% Market $786 470 n/a No 0 0.0%
Atlanta, GA 30309 1952 / 1980s 1BR / 1BA 56 9.2% Market $1,080 500 n/a No 0 0.0%
Fulton County 1BR / 1BA 56 9.2% Market $1,140 600 n/a No 0 0.0%

612 100.0% 0 0.0%

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

RENT AND SQUARE FOOTAGE RANKING -- All rents adjusted for utilities and concessions extracted from the market.
Effective Rent Date: Oct-15 Units Surveyed: 2,235 Weighted Occupancy: 99.1%

Market Rate 1,102 Market Rate 100.0%

Tax Credit 1,133 Tax Credit 98.3%
Studio One Bath One Bedroom One Bath Two Bedrooms One Bath

Property Average Property Average Property Average

RENT The Darlington $786 The Darlington $1,140 Oglethorpe Place * (M) $1,195
Abernathy Tower Apartments * (60% ) $717 The Darlington $1,080 Big Bethel Village * (2BA M) $1,175
The Darlington $716 Columbia Senior Residences At Mechanicsville * (M) $1,039 Big Bethel Village * (2BA 60%) $995
Big Bethel Village * (M) $700 Oglethorpe Place * (M) $992 Big Bethel Village * (2BA 60%) $995
Heritage Greene * (M) $669 Big Bethel Village * (M) $940 Heritage Greene * (M) $944
Big Bethel Village * (60%) $650 Calvin Court $931 Heritage Greene * (54%) $904
Heritage Greene * (50%) $634 Big Bethel Village * (M) $930 Heritage Greene * (50%) $838
Calvin Court $622 Columbia Senior Residences At Mechanicsville * (60%) $886 Oglethorpe Place * (50%) $820
Donnelly Gardens $598 Calvin Court $820 Donnelly Gardens $741
Calvin Court $586 Big Bethel Village * (M) $805 Brentwood Village Apartments * (60%) $732
Brentwood Village Apartments * (60%) $549 Heritage Greene * (M) $803 Heritage Greene * (30%) $508
Heritage Greene * (30%) $375 Big Bethel Village * (60%) $795
Big Bethel Village * (60%) $795
Calvin Court $773
Abernathy Tower Apartments * (60% ) $768
Big Bethel Village * (60%) $750
Heritage Greene * (54%) $749
Oglethorpe Place * (50%) $705
Baptist Gardens * (60%) $700
Brentwood Village Apartments * (60%) $699
Heritage Greene * (50%) $690
Baptist Gardens * (50%) $673
Donnelly Gardens $618
Donnelly Gardens $608
Brentwood Village Apartments * (60%) $601
Heritage Greene * (30%) $413

SQUARE
Heritage Greene * (30%) 555 Baptist Gardens * (50%) 750 Heritage Greene * (30%) 947
FOOTAGE
Heritage Greene * (50%) 555 Baptist Gardens * (60%) 750 Heritage Greene * (50%) 947
Heritage Greene * (M) 555 Columbia Senior Residences At Mechanicsville * (60%) 750 Heritage Greene * (54%) 947
Donnelly Gardens 550 Columbia Senior Residences At Mechanicsville * (M) 750 Heritage Greene * (M) 947
Brentwood Village Apartments * (60%) 487 Heritage Greene * (30%) 745 Oglethorpe Place * (50%) 903
The Darlington 470 Heritage Greene * (50%) 745 Oglethorpe Place * (M) 903
The Darlington 430 Heritage Greene * (54%) 745 Donnelly Gardens 850
Abernathy Tower Apartments * (60% ) 384 Heritage Greene * (M) 745 Big Bethel Village * (2BA 60%) 759
Calvin Court 378 Donnelly Gardens 740 Big Bethel Village * (2BA M) 759
Calvin Court 378 Donnelly Gardens 675 Big Bethel Village * (2BA 60%) 700
Big Bethel Village * (60%) 358 Oglethorpe Place * (50%) 670 Brentwood Village Apartments * (60%) 648
Big Bethel Village * (M) 358 Oglethorpe Place * (M) 670
Brentwood Village Apartments * (60%) 648
Calvin Court 600
The Darlington 600
Brentwood Village Apartments * (60%) 584
Calvin Court 539
Calvin Court 539
Big Bethel Village * (60%) 538
Big Bethel Village * (M) 538
Abernathy Tower Apartments * (60% ) 528
Big Bethel Village * (60%) 500
Big Bethel Village * (M) 500
The Darlington 500
Big Bethel Village * (60%) 433
Big Bethel Village * (M) 433

RENT PER
Big Bethel Village * (M) $1.96 The Darlington $2.16 Big Bethel Village * (2BA M) $1.55
SQUARE FOOT
Abernathy Tower Apartments * (60% ) $1.87 The Darlington $1.90 Big Bethel Village * (2BA 60%) $1.42
Big Bethel Village * (60%) $1.82 Big Bethel Village * (M) $1.86 Oglethorpe Place * (M) $1.32
The Darlington $1.67 Big Bethel Village * (M) $1.86 Big Bethel Village * (2BA 60%) $1.31
The Darlington $1.67 Big Bethel Village * (M) $1.75 Brentwood Village Apartments * (60%) $1.13
Calvin Court $1.65 Big Bethel Village * (60%) $1.73 Heritage Greene * (M) $1.00
Calvin Court $1.55 Big Bethel Village * (60%) $1.59 Heritage Greene * (54%) $0.95
Heritage Greene * (M) $1.21 Calvin Court $1.55 Oglethorpe Place * (50%) $0.91
Heritage Greene * (50%) $1.14 Calvin Court $1.52 Heritage Greene * (50%) $0.88
Brentwood Village Apartments * (60%) $1.13 Oglethorpe Place * (M) $1.48 Donnelly Gardens $0.87
Donnelly Gardens $1.09 Big Bethel Village * (60%) $1.48 Heritage Greene * (30%) $0.54
Heritage Greene * (30%) $0.68 Abernathy Tower Apartments * (60% ) $1.45
Calvin Court $1.43
Columbia Senior Residences At Mechanicsville * (M) $1.39
Columbia Senior Residences At Mechanicsville * (60%) $1.18
Brentwood Village Apartments * (60%) $1.08
Heritage Greene * (M) $1.08

Oglethorpe Place * (50%) $1.05

Brentwood Village Apartments * (60%) $1.03
Heritage Greene * (54%) $1.01
Baptist Gardens * (60%) $0.93
Heritage Greene * (50%) $0.93
Donnelly Gardens $0.90
Baptist Gardens * (50%) $0.90
Donnelly Gardens $0.84
Heritage Greene * (30%) $0.55

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 PROPERTY PROFILE REPORT
Baptist Gardens
Effective Rent Date 10/27/2015

Location 1928 Delowe Drive SW

Atlanta, GA 30311
Fulton County
Distance 3.1 miles
Units 100
Vacant Units 1
Vacancy Rate 1.0%
Type Lowrise (age-restricted) (4 stories)
Year Built/Renovated 2013 / N/A
Marketing Began 9/01/2012
Leasing Began 1/01/2013
Last Unit Leased 6/01/2013
Major Competitors None Identiifed
Tenant Characteristics Senior tenants 55+ (Av. Age 65-70)
Contact Name Kirsha Jones
Phone 404-753-2500

Market Information Utilities

Program @50%, @60% A/C included -- central
Annual Turnover Rate 10% Cooking included -- electric
Units/Month Absorbed 15 Water Heat included -- electric
HCV Tenants 3% Heat included -- electric
Leasing Pace 30 days Other Electric included
Annual Chg. in Rent Remained stable Water included
Concession None Sewer included
Trash Collection included

Unit Mix (face rent)

Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range
(monthly) List Rate
1 1 Lowrise 25 750 $673 $0 @50% 15 HH 0 0.0% yes None
(4 stories)
1 1 Lowrise 75 750 $700 $0 @60% 15 HH 1 1.3% no None
(4 stories)

Unit Mix
@50% Face Rent Conc. Concd. Rent Util. Adj. Rent @60% Face Rent Conc. Concd. Rent Util. Adj. Rent
1BR / 1BA $673 $0 $673 $0 $673 1BR / 1BA $700 $0 $700 $0 $700

Amenities
In-Unit Security Services
Carpet/Hardwood Central A/C Limited Access Shuttle Service
Dishwasher Ceiling Fan
Microwave Oven
Refrigerator

Property Premium Other

Business Center/Computer Lab Clubhouse/Meeting Delivered Hot Lunches None
Elevators Exercise Facility Hairdresser / Barber
Central Laundry Off-Street Parking Medical Professional
On-Site Management Service Coordination

© Novogradac & Company LLP 2015 All Rights Reserved.

Baptist Gardens, continued

Comments
According to the contact, the property maintains a waiting list of of 15 households that is shared between all units.

© Novogradac & Company LLP 2015 All Rights Reserved.

Baptist Gardens, continued

Trend Report
Vacancy Rates
4Q13 2Q15 4Q15
6.0% 0.0% 1.0%

Trend: @50% Trend: @60%

1BR / 1BA 1BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2015 2 0.0% $673 $0 $673 $673 2013 4 6.0% $625 $0 $625 $625

2015 4 0.0% $673 $0 $673 $673 2015 2 0.0% $700 $0 $700 $700
2015 4 1.3% $700 $0 $700 $700

Trend: Comments
4Q13 There are 80 units are reserved for seniors 55 years of age or older and 20 units are reserved for disabled individuals. The contact stated that units rented for
$550 when they first opened (January 2013). The turnover and change in rent was based on when they first opened. The contact stated that the shuttle
provided takes tenants to the grocery store and other local amenities, three days a week. Although all utilities are included in the rent, cable/internet are not.
The contact was unsure of how many tenants utilized vouchers but indicated that they were accepted. The property achieved 92 percent occupancy within
six months, absorbing approximately 15 units per month.

2Q15 The waiting list was reported to have 20 applicants at this time. The contact noted rents are well below the maximum allowable for the units at 60 percent
AMI since max rents would be burdensome for the majority of households at the property.

4Q15 According to the contact, the property maintains a waiting list of of 15 households that is shared between all units.

© Novogradac & Company LLP 2015 All Rights Reserved.

 PROPERTY PROFILE REPORT
Big Bethel Village
Effective Rent Date 10/28/2015

Location 500 Richard Allen Boulevard SW

Atlanta, GA 30331
Fulton County
Distance 4.9 miles
Units 120
Vacant Units 2
Vacancy Rate 1.7%
Type Lowrise (age-restricted) (3 stories)
Year Built/Renovated 2003 / N/A
Marketing Began N/A
Leasing Began 1/01/2003
Last Unit Leased 1/01/2004
Major Competitors Adamsville Place, Lilli R. Campbell.
Tenant Characteristics Seniors that are 55 years of age or older and
some disabled individuals.
Contact Name Audrey
Phone 404-699-5665

Market Information Utilities

Program @60%, Market A/C included -- wall
Annual Turnover Rate 10% Cooking included -- electric
Units/Month Absorbed 10 Water Heat included -- electric
HCV Tenants 8% Heat included -- electric
Leasing Pace Within one month Other Electric included
Annual Chg. in Rent 1.5BR increased $20 since 2Q15 Water included
Concession None Sewer included
Trash Collection included

© Novogradac & Company LLP 2015 All Rights Reserved.

Big Bethel Village, continued

Unit Mix (face rent)

Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range
(monthly) List Rate
0 1 Lowrise 14 358 $650 $0 @60% Yes 0 0.0% no None
(3 stories)
0 1 Lowrise 4 358 $700 $0 Market No 0 0.0% N/A None
(3 stories)
1 1 Lowrise 19 433 $750 $0 @60% Yes 0 0.0% no None
(3 stories)
1 1 Lowrise 6 500 $795 $0 @60% Yes 0 0.0% N/A None
(3 stories)
1 1 Lowrise 6 538 $795 $0 @60% Yes 0 0.0% no None
(3 stories)
1 1 Lowrise 5 433 $805 $0 Market No 0 0.0% no None
(3 stories)
1 1 Lowrise 3 500 $930 $0 Market No 0 0.0% N/A None
(3 stories)
1 1 Lowrise 3 538 $940 $0 Market No 0 0.0% N/A None
(3 stories)
1.5 1 Lowrise 10 630 $820 $0 @60% Yes 0 0.0% no None
(3 stories)
1.5 1 Lowrise 1 630 $1,050 $0 Market No 0 0.0% N/A None
(3 stories)
1.5 1 Lowrise 4 639 $1,075 $0 Market No 0 0.0% N/A None
(3 stories)
2 2 Lowrise 9 700 $995 $0 @60% Yes 0 0.0% no None
(3 stories)
2 2 Lowrise 26 759 $995 $0 @60% Yes 1 3.8% no None
(3 stories)
2 2 Lowrise 10 759 $1,175 $0 Market No 1 10.0% N/A None
(3 stories)

Unit Mix
@60% Face Rent Conc. Concd. Rent Util. Adj. Rent Market Face Rent Conc. Concd. Rent Util. Adj. Rent
Studio / 1BA $650 $0 $650 $0 $650 Studio / 1BA $700 $0 $700 $0 $700
1BR / 1BA $750 - $795 $0 $750 - $795 $0 $750 - $795 1BR / 1BA $805 - $940 $0 $805 - $940 $0 $805 - $940
1.5BR / 1BA $820 $0 $820 $0 $820 1.5BR / 1BA $1,050 - $1,075 $0 $1,050 - $1,075 $0 $1,050 - $1,075
2BR / 2BA $995 $0 $995 $0 $995 2BR / 2BA $1,175 $0 $1,175 $0 $1,175

Amenities
In-Unit Security Services
Balcony/Patio Blinds Limited Access Shuttle Service
Carpet/Hardwood Coat Closet Patrol
Dishwasher Ceiling Fan Perimeter Fencing
Garbage Disposal Hand Rails
Oven Pull Cords
Refrigerator Walk-In Closet
Wall A/C Washer/Dryer hookup

Property Premium Other

Business Center/Computer Lab Clubhouse/Meeting Hairdresser / Barber None
Elevators Exercise Facility
Central Laundry Off-Street Parking
On-Site Management Theatre

Comments
According to the contact, the 1.5 bedroom units at the 60% AMI level experienced an increase of $20 since our last interview in April of 2015. A waiting list is
maintained for all LIHTC units, however the contact was unable to provide the length of the waiting list.

© Novogradac & Company LLP 2015 All Rights Reserved.

Big Bethel Village, continued

Trend Report
Vacancy Rates
4Q13 1Q15 2Q15 4Q15
13.3% 6.7% 1.7% 1.7%

Trend: @60% Trend: Market

1.5BR / 1BA 1.5BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2013 4 0.0% $800 $0 $800 $800 2013 4 0.0% $1,300 $0 $1,300 $1,300
2015 1 N/A $800 $0 $800 $800 2015 1 N/A $1,050 - $1,075 $0 $1,050 - $1,075 $1,050 - $1,075
2015 2 0.0% $800 $0 $800 $800 2015 2 0.0% $1,050 - $1,075 $0 $1,050 - $1,075 $1,050 - $1,075
2015 4 0.0% $820 $0 $820 $820 2015 4 0.0% $1,050 - $1,075 $0 $1,050 - $1,075 $1,050 - $1,075

1BR / 1BA 1BR / 1BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2013 4 19.4% $750 - $795 $0 $750 - $795 $750 - $795 2013 4 18.2% $960 - $1,070 $0 $960 - $1,070 $960 - $1,070
2015 1 N/A $750 - $805 $0 $750 - $805 $750 - $805 2015 1 N/A $750 - $930 $0 $750 - $930 $750 - $930
2015 2 0.0% $750 - $795 $0 $750 - $795 $750 - $795 2015 2 18.2% $805 - $940 $0 $805 - $940 $805 - $940
2015 4 0.0% $750 - $795 $0 $750 - $795 $750 - $795 2015 4 0.0% $805 - $940 $0 $805 - $940 $805 - $940

2BR / 2BA 2BR / 2BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2013 4 14.3% $955 $0 $955 $955 2013 4 0.0% $1,500 $0 $1,500 $1,500
2015 1 N/A $995 $0 $995 $995 2015 1 N/A $1,175 $0 $1,175 $1,175
2015 2 0.0% $995 $0 $995 $995 2015 2 0.0% $1,175 $0 $1,175 $1,175
2015 4 2.9% $995 $0 $995 $995 2015 4 10.0% $1,175 $0 $1,175 $1,175

Studio / 1BA Studio / 1BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2013 4 21.4% $710 $0 $710 $710 2013 4 0.0% $930 $0 $930 $930
2015 1 N/A $650 $0 $650 $650 2015 1 N/A $710 $0 $710 $710
2015 2 0.0% $650 $0 $650 $650 2015 2 0.0% $700 $0 $700 $700
2015 4 0.0% $650 $0 $650 $650 2015 4 0.0% $700 $0 $700 $700

Trend: Comments
4Q13 No comments.

1Q15 The contact reported that the property does not maintain a waiting list on any of its units. The contact was unable to comment on parking utilization at the
property, but reported that there is one space for every unit as well as visitor parking. The property is currently 93 percent occupied, which was reported as
being typical for only for the winter season. The property usually operates between 95 to 96 percent. Since our last interview in 2013, rents on market rate
one-bedroom units have decreased between 13 and 21 percent and rents on two-bedroom units have increased approximately four percent. The contact was
unable to comment on recent rent changes.

2Q15 The contact reported a five to seven household waiting list for the income restricted units at this time.

4Q15 According to the contact, the 1.5 bedroom units at the 60% AMI level experienced an increase of $20 since our last interview in April of 2015. A waiting
list is maintained for all LIHTC units, however the contact was unable to provide the length of the waiting list.

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Big Bethel Village, continued

Photos

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 PROPERTY PROFILE REPORT
Brentwood Village Apartments
Effective Rent Date 10/27/2015

Location 1935 Alison Court

Atlanta, GA 30311
Fulton County
Distance 2.9 miles
Units 506
Vacant Units 4
Vacancy Rate 0.8%
Type Garden (3 stories)
Year Built/Renovated 2001 / N/A
Marketing Began N/A
Leasing Began N/A
Last Unit Leased N/A
Major Competitors Shamrock, Harmony Point
Tenant Characteristics Average age is 27, most are single parents

Contact Name Arvell

Phone 404-768-6344

Market Information Utilities

Program 60% A/C not included -- central
Annual Turnover Rate 17% Cooking not included -- electric
Units/Month Absorbed N/A Water Heat not included -- electric
HCV Tenants 10% Heat not included -- electric
Leasing Pace 1 week to a month Other Electric not included
Annual Chg. in Rent 14-43% increase since 3Q2013 Water included
Concession Third month rent free Sewer included
Trash Collection not included

Unit Mix (face rent)

Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range
(monthly) List Rate
0 1 Garden N/A 487 $450 $0 @60% No 0 N/A no None
(3 stories)
1 1 Garden N/A 584 $540 $38 @60% No 1 N/A no None
(3 stories)
1 1 Garden N/A 648 $600 $0 @60% No 0 N/A no None
(3 stories)
2 1 Garden N/A 648 $655 $55 @60% No 1 N/A no None
(3 stories)
2 2 Garden N/A 975 $700 $0 @60% No 0 N/A no None
(3 stories)
3 2 Garden N/A 1,028 $755 $63 @60% No 2 N/A no None
(3 stories)

Unit Mix
@60% Face Rent Conc. Concd. Rent Util. Adj. Rent
Studio / 1BA $450 $0 $450 $99 $549
1BR / 1BA $540 - $600 $0 - $38 $502 - $600 $99 $601 - $699
2BR / 1BA $655 $55 $600 $132 $732
2BR / 2BA $700 $0 $700 $132 $832
3BR / 2BA $755 $63 $692 $165 $857

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Brentwood Village Apartments, continued

Amenities
In-Unit Security Services
Blinds Carpeting Patrol None
Central A/C Dishwasher
Ceiling Fan Garbage Disposal
Oven Refrigerator
Washer/Dryer hookup

Property Premium Other

Clubhouse/Meeting Central Laundry None None
Off-Street Parking On-Site Management
Picnic Area Playground
Swimming Pool

Comments
According to the contact, the property does not currently maintain a waiting list. The property is currently offering a concession; the third month of rent is free with a
12 month lease.

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Brentwood Village Apartments, continued

Trend Report
Vacancy Rates
3Q07 2Q10 3Q13 4Q15
27.1% 11.5% 9.9% 0.8%

Trend: @60%
1BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2007 3 N/A $399 - $550 $0 $399 - $550 $498 - $649
2010 2 N/A $413 - $435 $0 N/A N/A
2013 3 N/A $440 - $500 $12 - $17 $428 - $483 $527 - $582
2015 4 N/A $540 - $600 $0 - $38 $502 - $600 $601 - $699

2BR / 1.5BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2007 3 N/A $550 $0 $550 $682
2010 2 N/A $518 $0 N/A N/A
2013 3 N/A $518 $0 $518 $650

2BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2007 3 N/A $475 $0 $475 $607
2010 2 N/A $475 $0 N/A N/A
2013 3 N/A $475 $0 $475 $607
2015 4 N/A $655 $55 $600 $732

2BR / 2BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2007 3 N/A $650 $0 $650 $782
2010 2 N/A $614 $0 N/A N/A
2013 3 N/A $614 $0 $614 $746
2015 4 N/A $700 $0 $700 $832

3BR / 2BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2007 3 N/A $825 $0 $825 $990
2010 2 N/A $650 $0 N/A N/A
2013 3 N/A $650 $0 $650 $815
2015 4 N/A $755 $63 $692 $857

Studio / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2007 3 N/A $299 $0 $299 $398
2010 2 N/A $315 $0 N/A N/A
2013 3 N/A $315 $1 $314 $413
2015 4 N/A $450 $0 $450 $549

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Brentwood Village Apartments, continued

Trend: Comments
3Q07 The contact stated that the need for affordable housing is being met in the area.

2Q10 The contact indicated that the property has experienced good traffic due to the low prices and close proximity to the mall. The contact reported that the
current prices are appropriate for the neighborhood. The contact conveyed that there are between five and seven moveouts each month; we used seven per
month to conservatively estimate turnover.

3Q13 The property is located by the freeway but management indicated that it is not difficult to lease those units. The property manager reported that demand is
high for two and three-bedroom units as there is stronger demand from families and larger households.

The property is located near a retail center that is 80 to 90 percent occupied and offers a check cashing office, a liquor store, and a salon, among other uses.

The concession has been offered for the past two to three months.

4Q15 According to the contact, the property does not currently maintain a waiting list. The property is currently offering a concession; the third month of rent is
free with a 12 month lease.

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Brentwood Village Apartments, continued

Photos

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 PROPERTY PROFILE REPORT
Columbia Senior Residences At Mechanicsville
Effective Rent Date 9/17/2015

Location 555 Mcdaniel St

Atlanta, GA 30312
Fulton County
Distance 1.2 miles
Units 154
Vacant Units 4
Vacancy Rate 2.6%
Type Midrise (age-restricted) (4 stories)
Year Built/Renovated 2007 / N/A
Marketing Began N/A
Leasing Began 3/01/2008
Last Unit Leased N/A
Major Competitors None identified
Tenant Characteristics Seniors 62+, primarily from local area, few out
of state moving closer to be near families

Contact Name Sandra

Phone (404) 577-3553

Market Information Utilities

Program @60%, Market, Public Housing, PBRA A/C not included -- central
Annual Turnover Rate 5% Cooking not included -- electric
Units/Month Absorbed N/A Water Heat not included -- electric
HCV Tenants 0% Heat not included -- electric
Leasing Pace Within two weeks Other Electric not included
Annual Chg. in Rent Increased 9.5 to 16% since 3Q13 Water not included
Concession None Sewer not included
Trash Collection not included

Unit Mix (face rent)

Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range
(monthly) List Rate
1 1 Midrise 16 750 $712 $0 @60% Yes N/A N/A yes None
(4 stories)
1 1 Midrise 3 750 $865 $0 Market Yes N/A N/A N/A None
(4 stories)
1 1 Midrise 81 750 N/A $0 PBRA Yes N/A N/A N/A None
(4 stories)
1 1 Midrise 54 750 N/A $0 Public Yes N/A N/A N/A None
(4 stories) Housing

Unit Mix
@60% Face Rent Conc. Concd. Rent Util. Adj. Rent Market Face Rent Conc. Concd. Rent Util. Adj. Rent
1BR / 1BA $712 $0 $712 $174 $886 1BR / 1BA $865 $0 $865 $174 $1,039

PBRA Face Rent Conc. Concd. Rent Util. Adj. Rent Public Face Rent Conc. Concd. Rent Util. Adj. Rent
1BR / 1BA N/A $0 N/A $174 N/A 1BR / 1BA N/A $0 N/A $174 N/A

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Columbia Senior Residences At Mechanicsville, continued

Amenities
In-Unit Security Services
Balcony/Patio Blinds Intercom (Buzzer) None
Carpeting Central A/C Patrol
Coat Closet Dishwasher Video Surveillance
Garbage Disposal Hand Rails
Oven Pull Cords
Refrigerator Washer/Dryer hookup

Property Premium Other

Business Center/Computer Lab Clubhouse/Meeting Medical Professional Game room, garden, library,
Elevators Exercise Facility
Central Laundry Off-Street Parking
On-Site Management Picnic Area
Service Coordination Theatre

Comments
The property maintains a waiting list that is currently five years in length and is not currently running any concessions. Since our last interview in 2013, rents have
increased between 9.5 and 16 percent.

© Novogradac & Company LLP 2015 All Rights Reserved.

Columbia Senior Residences At Mechanicsville, continued

Trend Report
Vacancy Rates
4Q11 3Q12 3Q13 3Q15
1.3% 4.5% 3.9% 2.6%

Trend: @60% Trend: Market

1BR / 1BA 1BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2011 4 6.2% $506 $0 $506 $680 2011 4 33.3% $790 $0 $790 $964
2012 3 N/A $612 $0 $612 $786 2012 3 N/A $790 $0 $790 $964
2013 3 N/A $612 $0 $612 $786 2013 3 N/A $790 $0 $790 $964
2015 3 N/A $712 $0 $712 $886 2015 3 N/A $865 $0 $865 $1,039

Trend: PBRA Trend: Public Housing

1BR / 1BA 1BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2011 4 0.0% N/A $0 N/A N/A 2011 4 0.0% N/A $0 N/A N/A
2012 3 N/A N/A $0 N/A N/A 2012 3 N/A N/A $0 N/A N/A
2013 3 N/A N/A $0 N/A N/A 2013 3 N/A N/A $0 N/A N/A
2015 3 N/A N/A $0 N/A N/A 2015 3 N/A N/A $0 N/A N/A

Trend: Comments
4Q11 Management indicated demand is strong for affordable senior housing in the rental market but does not see a need for additional housing because a new
senior affordable housing building recently opened near by. The majority of their tenants are locals 95 percent and five percent come from out of state. The
unit type with the highest demand would be one-bedroom. Management estimated 75 percent of their tenants utilize services from outside sources mostly
transportation and health care. The current occupancy rate is 98 percent at Columbia Senior Residences. Their tenants income levels range from $8,000 to
$16,000 and management finds it difficult to get $650 for rent from the seniors.

3Q12 Management indicated they currently have seven vacancies but also have a waiting list that should fill these vacancies soon. Management commented that
the demand is strong from affordable senior housing in the rental market, and that the majority of their tenants either formerly lived in the area and chose to
reside there, or relocated from out of state, generally to be closer to their families here in Atlanta. They do not offer any additional
features/services/amenitites on site that the tenants would have to pay additional money for.

Representative estimated the annual turnover to be less than five percent. Management also stated the primary source of income for these tenants is social
security and estimated an average income of $10,000 for the residents.

3Q13 The property manager stated that occupancy is currently at 96 percent with six vacancies. However, the property manager stated that four of these
vacancies are preleased and will be filled within the month, and that it usually takes no more than one month to fill vacant units.

Representative estimated the annual turnover to be five to ten percent. Rents are unchanged in the past year.

3Q15 The property maintains a waiting list that is currently five years in length and is not currently running any concessions. Since our last interview in 2013,
rents have increased between 9.5 and 16 percent.

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 PROPERTY PROFILE REPORT
Heritage Greene
Effective Rent Date 10/27/2015

Location 2891 Springdale Road

Atlanta, GA 30315
Fulton County
Distance 4.2 miles
Units 109
Vacant Units 0
Vacancy Rate 0.0%
Type Garden (2 stories)
Year Built/Renovated 1980s / 2004
Marketing Began N/A
Leasing Began N/A
Last Unit Leased N/A
Major Competitors Pavillion Place, Hidden Oak, Jackson Landing

Tenant Characteristics Varied tenancy.

Contact Name Bernice
Phone 404.768.1158

Market Information Utilities

Program @30%, @50%, @54%, Market A/C not included -- central
Annual Turnover Rate 44% Cooking not included -- electric
Units/Month Absorbed N/A Water Heat not included -- electric
HCV Tenants 0% Heat not included -- electric
Leasing Pace One week Other Electric not included
Annual Chg. in Rent 0-5% increase since 2Q12 Water not included
Concession None Sewer not included
Trash Collection included

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Heritage Greene, continued

Unit Mix (face rent)

Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range
(monthly) List Rate
0 1 Garden 1 555 $201 $0 @30% Yes 0 0.0% no None
(2 stories)
0 1 Garden 2 555 $460 $0 @50% Yes 0 0.0% no None
(2 stories)
0 1 Garden 1 555 $495 $0 Market Yes 0 0.0% N/A None
(2 stories)
1 1 Garden 8 745 $239 $0 @30% Yes 0 0.0% no None
(2 stories)
1 1 Garden 25 745 $516 $0 @50% Yes 0 0.0% no None
(2 stories)
1 1 Garden 12 745 $575 $0 @54% Yes 0 0.0% no None
(2 stories)
1 1 Garden 11 745 $629 $0 Market Yes 0 0.0% N/A None
(2 stories)
2 1 Garden 6 947 $259 $0 @30% Yes 0 0.0% no None
(2 stories)
2 1 Garden 20 947 $589 $0 @50% Yes 0 0.0% no None
(2 stories)
2 1 Garden 7 947 $655 $0 @54% No 0 0.0% no None
(2 stories)
2 1 Garden 8 947 $695 $0 Market No 0 0.0% N/A None
(2 stories)
3 2 Garden 1 1,057 $269 $0 @30% Yes 0 0.0% no None
(2 stories)
3 2 Garden 4 1,057 $655 $0 @50% Yes 0 0.0% no None
(2 stories)
3 2 Garden 1 1,057 $725 $0 @54% Yes 0 0.0% no None
(2 stories)
3 2 Garden 2 1,057 $800 $0 Market No 0 0.0% N/A None
(2 stories)

Unit Mix
@30% Face Rent Conc. Concd. Rent Util. Adj. Rent @50% Face Rent Conc. Concd. Rent Util. Adj. Rent
Studio / 1BA $201 $0 $201 $174 $375 Studio / 1BA $460 $0 $460 $174 $634
1BR / 1BA $239 $0 $239 $174 $413 1BR / 1BA $516 $0 $516 $174 $690
2BR / 1BA $259 $0 $259 $249 $508 2BR / 1BA $589 $0 $589 $249 $838
3BR / 2BA $269 $0 $269 $329 $598 3BR / 2BA $655 $0 $655 $329 $984

@54% Face Rent Conc. Concd. Rent Util. Adj. Rent Market Face Rent Conc. Concd. Rent Util. Adj. Rent
1BR / 1BA $575 $0 $575 $174 $749 Studio / 1BA $495 $0 $495 $174 $669
2BR / 1BA $655 $0 $655 $249 $904 1BR / 1BA $629 $0 $629 $174 $803
3BR / 2BA $725 $0 $725 $329 $1,054 2BR / 1BA $695 $0 $695 $249 $944
3BR / 2BA $800 $0 $800 $329 $1,129

Amenities
In-Unit Security Services
Balcony/Patio Blinds Limited Access None
Carpeting Central A/C Patrol
Coat Closet Dishwasher Perimeter Fencing
Ceiling Fan Garbage Disposal Video Surveillance
Oven Refrigerator
Walk-In Closet Washer/Dryer hookup

Property Premium Other

Clubhouse/Meeting Exercise Facility None Gazebo
Central Laundry Off-Street Parking
On-Site Management Picnic Area
Playground

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Heritage Greene, continued

Comments
According to the contact, the property does not currently maintain a waiting list and does not accept Housing Choice Vouchers.

© Novogradac & Company LLP 2015 All Rights Reserved.

Heritage Greene, continued

Trend Report
Vacancy Rates
4Q10 2Q11 2Q12 4Q15
5.5% 1.8% 5.5% 0.0%

Trend: @30% Trend: @50%

1BR / 1BA 1BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2010 4 0.0% $248 $0 $248 $422 2010 4 8.0% $524 $0 $524 $698
2011 2 0.0% $229 $0 $229 $403 2011 2 0.0% $506 $0 $506 $680
2012 2 0.0% $229 $0 $229 $403 2012 2 0.0% $506 $0 $506 $680
2015 4 0.0% $239 $0 $239 $413 2015 4 0.0% $516 $0 $516 $690

2BR / 1BA 2BR / 1BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2010 4 0.0% $274 $0 $274 $523 2010 4 10.0% $606 $0 $606 $855
2011 2 0.0% $246 $0 $246 $495 2011 2 0.0% $579 $0 $579 $828
2012 2 0.0% $246 $0 $246 $495 2012 2 5.0% $579 $0 $579 $828
2015 4 0.0% $259 $0 $259 $508 2015 4 0.0% $589 $0 $589 $838

3BR / 2BA 3BR / 2BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2010 4 0.0% $293 $0 $293 $622 2010 4 0.0% $677 $0 $677 $1,006
2011 2 0.0% $256 $0 $256 $585 2011 2 0.0% $640 $0 $640 $969
2012 2 0.0% $256 $0 $256 $585 2012 2 0.0% $640 $0 $640 $969
2015 4 0.0% $269 $0 $269 $598 2015 4 0.0% $655 $0 $655 $984

Studio / 1BA Studio / 1BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2010 4 0.0% $220 $0 $220 $394 2010 4 0.0% $479 $0 $479 $653
2011 2 0.0% $201 $0 $201 $375 2011 2 0.0% $460 $0 $460 $634
2012 2 0.0% $201 $0 $201 $375 2012 2 50.0% $460 $0 $460 $634
2015 4 0.0% $201 $0 $201 $375 2015 4 0.0% $460 $0 $460 $634

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Heritage Greene, continued

Trend: @54% Trend: Market

1BR / 1BA 1BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2010 4 8.3% $580 $0 $580 $754 2010 4 0.0% $600 $0 $600 $774
2011 2 0.0% $561 $0 $561 $735 2011 2 0.0% $600 $0 $600 $774
2012 2 0.0% $561 $0 $561 $735 2012 2 0.0% $600 $0 $600 $774
2015 4 0.0% $575 $0 $575 $749 2015 4 0.0% $629 $0 $629 $803

2BR / 1BA 2BR / 1BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2010 4 14.3% $672 $0 $672 $921 2010 4 0.0% $695 $0 $695 $944
2011 2 0.0% $645 $0 $645 $894 2011 2 0.0% $695 $0 $695 $944
2012 2 14.3% $645 $0 $645 $894 2012 2 0.0% $695 $0 $695 $944
2015 4 0.0% $655 $0 $655 $904 2015 4 0.0% $695 $0 $695 $944

3BR / 2BA 3BR / 2BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2010 4 0.0% $754 $0 $754 $1,083 2010 4 0.0% $780 $0 $780 $1,109
2011 2 0.0% $717 $0 $717 $1,046 2011 2 100.0% $780 $0 $780 $1,109
2012 2 0.0% $717 $0 $717 $1,046 2012 2 100.0% $780 $0 $780 $1,109
2015 4 0.0% $725 $0 $725 $1,054 2015 4 0.0% $800 $0 $800 $1,129

Studio / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2010 4 0.0% $495 $0 $495 $669
2011 2 0.0% $495 $0 $495 $669
2012 2 100.0% $495 $0 $495 $669
2015 4 0.0% $495 $0 $495 $669

Trend: Comments
4Q10 The contact reported economic conditions in the area are improving and overall occupancy is up from the same time last year. The occupancy rate is
trending upward with a high number of potential renters inquiring about the property daily. The contact indicated that 40 units have PBRA, but could not
report which units.

2Q11 The contact reported economic conditions in the area are improving and overall occupancy is up from the same time last year. 44 of the units have a PBRA
contract, 26 one-bedroom units, 15 two-bedroom units, and three three-bedroom units.

2Q12 The contact indicated that there is still an extensive waiting list for most units, however, she was unable to indicate the number of households on the
waiting list.

4Q15 According to the contact, the property does not currently maintain a waiting list and does not accept Housing Choice Vouchers.

© Novogradac & Company LLP 2015 All Rights Reserved.

Heritage Greene, continued

Photos

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 PROPERTY PROFILE REPORT
Oglethorpe Place
Effective Rent Date 10/27/2015

Location 835 Oglethorpe Av. SW

Atlanta, GA 30310
Fulton County
Distance 0.4 miles
Units 144
Vacant Units 8
Vacancy Rate 5.6%
Type Garden (3 stories)
Year Built/Renovated 1996 / N/A
Marketing Began N/A
Leasing Began N/A
Last Unit Leased N/A
Major Competitors Ashley West End, Villages at Castleberry Hill

Tenant Characteristics Familes, Students, Seniors, Stated the tenant

profile is mixed, with an average household size
of 2-3.
Contact Name Crystal
Phone 404.755.3100

Market Information Utilities

Program @50%, Market A/C not included -- central
Annual Turnover Rate 29% Cooking not included -- electric
Units/Month Absorbed N/A Water Heat not included -- electric
HCV Tenants 7% Heat not included -- electric
Leasing Pace 2 to 3 weeks Other Electric not included
Annual Chg. in Rent Fluctuates daily Water not included
Concession None Sewer not included
Trash Collection included

Unit Mix (face rent)

Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range
(monthly) List Rate
1 1 Garden 7 670 $531 $0 @50% No 0 0.0% no None
(3 stories)
1 1 Garden 29 670 $818 $0 Market No 0 0.0% N/A None
(3 stories)
2 1 Garden 10 903 $571 $0 @50% No 0 0.0% no None
(3 stories)
2 1 Garden 38 903 $946 $0 Market No 0 0.0% N/A None
(3 stories)
2 2 Garden 10 1,080 $616 $0 @50% No 0 0.0% no None
(3 stories)
2 2 Garden 50 1,080 $946 $0 Market No N/A N/A N/A None
(3 stories)

Unit Mix
@50% Face Rent Conc. Concd. Rent Util. Adj. Rent Market Face Rent Conc. Concd. Rent Util. Adj. Rent
1BR / 1BA $531 $0 $531 $174 $705 1BR / 1BA $818 $0 $818 $174 $992
2BR / 1BA $571 $0 $571 $249 $820 2BR / 1BA $946 $0 $946 $249 $1,195
2BR / 2BA $616 $0 $616 $249 $865 2BR / 2BA $946 $0 $946 $249 $1,195

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Oglethorpe Place, continued

Amenities
In-Unit Security Services
Balcony/Patio Blinds Limited Access None
Carpeting Central A/C Perimeter Fencing
Coat Closet Dishwasher
Exterior Storage Garbage Disposal
Oven Refrigerator
Walk-In Closet Washer/Dryer hookup

Property Premium Other

Clubhouse/Meeting Exercise Facility None None
Central Laundry Off-Street Parking
On-Site Management Playground
Swimming Pool

Comments
According to the contact, the property utilized the Yieldstar program for their market rents. As such, rents change daily. LIHTC rents have increased zero to 8 percent
since 3Q2013. This property occasionally maintains a waiting list; however, it is not maintaining one currently.

© Novogradac & Company LLP 2015 All Rights Reserved.

Oglethorpe Place, continued

Trend Report
Vacancy Rates
2Q12 3Q12 3Q13 4Q15
4.9% 2.1% 5.6% 5.6%

Trend: @50% Trend: Market

1BR / 1BA 1BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2012 2 N/A $501 $0 $501 $675 2012 2 N/A $781 $0 $781 $955
2012 3 0.0% $501 $0 $501 $675 2012 3 3.4% $820 $0 $820 $994
2013 3 N/A $530 $0 $530 $704 2013 3 N/A $731 $0 $731 $905
2015 4 0.0% $531 $0 $531 $705 2015 4 0.0% $818 $0 $818 $992

2BR / 1BA 2BR / 1BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2012 2 N/A $698 $0 $698 $947 2012 2 N/A $850 $0 $850 $1,099
2012 3 0.0% $598 $0 $598 $847 2012 3 2.6% $980 $0 $980 $1,229
2013 3 N/A $571 $0 $571 $820 2013 3 N/A $800 $0 $800 $1,049
2015 4 0.0% $571 $0 $571 $820 2015 4 0.0% $946 $0 $946 $1,195

2BR / 2BA 2BR / 2BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2012 2 N/A $698 $0 $698 $947 2012 2 N/A $919 $0 $919 $1,168
2012 3 0.0% $598 $0 $598 $847 2012 3 2.0% $997 $0 $997 $1,246
2013 3 N/A $571 $0 $571 $820 2013 3 N/A $857 $0 $857 $1,106
2015 4 0.0% $616 $0 $616 $865 2015 4 N/A $946 $0 $946 $1,195

Trend: Comments
2Q12 The contact stated that they currently have seven vacancies, but could not verify exactly which unit types were vacant. The contact said that seven
vacancies is above average for them and she cited their location next to the train station as the reason.

3Q12 Management provided updated rental rates, but their pricing software is Yieldstar, which is a pricing software that changes daily (for their market units)
based upon availability, 60-day availability forcasts, and numerous other factors. Due to this, market rates are much higher than they were when we spoke
with them a few months ago. Management reported three vacancies currently, all in the market units. The three vacancies are one in each market floor
plan.

the 50% lihtc figures for the 2x2 were previously entered incorrectly, and we have confirmed that the $598 price point is correct.

Management reported that the 50% and market units are also using tenant-based housing choice vouchers and estimated the percentage to be between 20
and 25 percent.

3Q13 Management provided updated rental rates, but their pricing software is Yieldstar, which is a pricing software that changes daily (for their market units)
based upon availability, 60-day availability forcasts, and numerous other factors. Due to this, the rents for market rate units are much lower than they were
when we spoke with them last year. The property manager stated that rents fluctuate widely over large periods of time due to their usage of Yieldstar; the
current rents are 10 to 20 percent lower than a year ago, but the property manager reported that there was an increase of about the same amount prior to
that.

Management reported nine vacancies currently, all in the market units. Rents for LIHTC units are not currently at their maximum allowable level.

4Q15 According to the contact, the property utilized the Yieldstar program for their market rents. As such, rents change daily. LIHTC rents have increased zero to
8 percent since 3Q2013. This property occasionally maintains a waiting list; however, it is not maintaining one currently.

© Novogradac & Company LLP 2015 All Rights Reserved.

Oglethorpe Place, continued

Photos

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 PROPERTY PROFILE REPORT
Calvin Court
Effective Rent Date 10/27/2015

Location 479 E. Paces Ferry Road, NE

Atlanta, GA 30305
Fulton County
Distance 7.6 miles
Units 240
Vacant Units 0
Vacancy Rate 0.0%
Type Highrise (age-restricted) (11 stories)
Year Built/Renovated 1969 / As needed
Marketing Began N/A
Leasing Began N/A
Last Unit Leased N/A
Major Competitors Campbell Stone, Phillip Towers, Clairemont
Oaks
Tenant Characteristics Seniors age 62 and older; Avg. age 75
Contact Name Patrice
Phone 404.261.1223

Market Information Utilities

Program Market, Section 8 A/C included -- wall
Annual Turnover Rate 15% Cooking included -- electric
Units/Month Absorbed N/A Water Heat included -- electric
HCV Tenants 30% Heat included -- electric
Leasing Pace Prelease-1 week Other Electric included
Annual Chg. in Rent See comments Water included
Concession None Sewer included
Trash Collection included

Unit Mix (face rent)

Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range
(monthly) List Rate
0 1 Highrise 38 378 $622 $0 Market Yes 0 0.0% N/A None
(11 stories)
0 1 Highrise 53 378 $586 $0 Section 8 Yes 0 0.0% N/A None
(11 stories)
0 2 Highrise 39 756 $1,092 $0 Market Yes 0 0.0% N/A None
(11 stories)
1 1 Highrise 36 539 $820 $0 Market Yes 0 0.0% N/A None
(11 stories)
1 1 Highrise 35 600 $931 $0 Market Yes 0 0.0% N/A None
(11 stories)
1 1 Highrise 39 539 $773 $0 Section 8 Yes 0 0.0% N/A None
(11 stories)

Unit Mix
Market Face Rent Conc. Concd. Rent Util. Adj. Rent Section 8 Face Rent Conc. Concd. Rent Util. Adj. Rent
Studio / 1BA $622 $0 $622 $0 $622 Studio / 1BA $586 $0 $586 $0 $586
Studio / 2BA $1,092 $0 $1,092 $0 $1,092 1BR / 1BA $773 $0 $773 $0 $773
1BR / 1BA $820 - $931 $0 $820 - $931 $0 $820 - $931

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Calvin Court, continued

Amenities
In-Unit Security Services
Blinds Carpeting Limited Access Shuttle Service
Coat Closet Hand Rails Patrol
Oven Pull Cords Perimeter Fencing
Refrigerator Walk-In Closet
Wall A/C

Property Premium Other

Business Center/Computer Lab Carport Hairdresser / Barber Wellness center, Library,
Clubhouse/Meeting Elevators
Exercise Facility Central Laundry
Off-Street Parking On-Site Management
Picnic Area Recreation Areas
Swimming Pool

Comments
According to the contact, the property includes "Double-Studios", which are large studio units with two bathrooms. Market rents have increased six percent since
1Q2013, and the Section 8 rents have remained stable. This property currently maintains a waiting list; however, the contact was unsure of the exact length.

© Novogradac & Company LLP 2015 All Rights Reserved.

Calvin Court, continued

Trend Report
Vacancy Rates
2Q10 3Q12 1Q13 4Q15
0.0% 0.0% 0.0% 0.0%

Trend: Market Trend: Section 8

1BR / 1BA 1BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2010 2 0.0% $736 $0 $736 $736 2010 2 0.0% $736 $0 $736 $736
2012 3 0.0% $736 $0 $736 $736 2012 3 0.0% $736 $0 $736 $736
2013 1 0.0% $773 $0 $773 $773 2013 1 0.0% $773 $0 $773 $773
2015 4 0.0% $820 - $931 $0 $820 - $931 $820 - $931 2015 4 0.0% $773 $0 $773 $773

Studio / 1BA Studio / 1BA

Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2010 2 0.0% $558 $0 $558 $558 2010 2 0.0% $558 $0 $558 $558
2012 3 0.0% $558 $0 $558 $558 2012 3 0.0% $558 $0 $558 $558
2013 1 0.0% $586 $0 $586 $586 2013 1 0.0% $586 $0 $586 $586
2015 4 0.0% $622 $0 $622 $622 2015 4 0.0% $586 $0 $586 $586

Studio / 2BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent

2015 4 0.0% $1,092 $0 $1,092 $1,092

Trend: Comments
2Q10 The contact reported 92 units are subsidized and tenants in those units pay 30 percent of income towards the rent. The remaining units are not subsidized.
The property is operated by Presbyterian Homes of Georgia. The property offers a dining program for an additional monthly fee.

3Q12 N/A

1Q13 No additional comments.

4Q15 According to the contact, the property includes "Double-Studios", which are large studio units with two bathrooms. Market rents have increased six
percent since 1Q2013, and the Section 8 rents have remained stable. This property currently maintains a waiting list; however, the contact was unsure of the
exact length.

© Novogradac & Company LLP 2015 All Rights Reserved.

 PROPERTY PROFILE REPORT
Donnelly Gardens
Effective Rent Date 10/22/2015

Location 1295 Donnelly Avenue SW

Atlanta, GA 30310
Fulton County
Distance 0.4 miles
Units 250
Vacant Units 0
Vacancy Rate 0.0%
Type Garden (2 stories)
Year Built/Renovated 1965 / As needed
Marketing Began N/A
Leasing Began N/A
Last Unit Leased N/A
Major Competitors Shamrock Gardens and Cascade Glen
Tenant Characteristics Mixed tenancy
Contact Name Sylvia
Phone 404-755-6142

Market Information Utilities

Program Market A/C not included -- central
Annual Turnover Rate 15% Cooking not included -- electric
Units/Month Absorbed N/A Water Heat not included -- gas
HCV Tenants 0% Heat not included -- gas
Leasing Pace Within two to three weeks Other Electric not included
Annual Chg. in Rent 2-4% increase since 2Q2015 Water included
Concession None Sewer included
Trash Collection included

Unit Mix (face rent)

Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range
(monthly) List Rate
0 1 Garden 8 550 $499 $0 Market No 0 0.0% N/A None
(2 stories)
1 1 Garden 176 675 $509 $0 Market No 0 0.0% N/A None
(2 stories)
1 1 Garden N/A 740 $519 $0 Market No 0 N/A N/A None
(2 stories)
2 1 Garden 14 850 $609 $0 Market No 0 0.0% N/A None
(2 stories)
2 1.5 Garden 52 950 $629 $0 Market No 0 0.0% N/A None
(2 stories)

Unit Mix
Market Face Rent Conc. Concd. Rent Util. Adj. Rent
Studio / 1BA $499 $0 $499 $99 $598
1BR / 1BA $509 - $519 $0 $509 - $519 $99 $608 - $618
2BR / 1BA $609 $0 $609 $132 $741
2BR / 1.5BA $629 $0 $629 $132 $761

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Donnelly Gardens, continued

Amenities
In-Unit Security Services
Balcony/Patio Blinds Patrol None
Carpet/Hardwood Central A/C
Oven Refrigerator
Vaulted Ceilings Walk-In Closet

Property Premium Other

Courtyard Central Laundry None None
Off-Street Parking On-Site Management

Comments
According to the contact, the rents have increased two to four percent since our last survey in 2Q2015. This property does not accept Housing Choice Vouchers and
does not maintain a waiting list.

© Novogradac & Company LLP 2015 All Rights Reserved.

Donnelly Gardens, continued

Trend Report
Vacancy Rates
4Q13 1Q15 2Q15 4Q15
8.0% 0.8% 0.8% 0.0%

Trend: Market
1BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2013 4 N/A $469 - $489 $40 - $60 $409 - $449 $508 - $548
2015 1 N/A $488 - $499 $0 $488 - $499 $587 - $598
2015 2 N/A $488 - $499 $0 $488 - $499 $587 - $598
2015 4 N/A $509 - $519 $0 $509 - $519 $608 - $618

2BR / 1.5BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2013 4 N/A $599 $33 $566 $698
2015 1 0.0% $619 $0 $619 $751
2015 2 0.0% $619 $0 $619 $751
2015 4 0.0% $629 $0 $629 $761

2BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2013 4 N/A $550 $30 $520 $652
2015 1 0.0% $589 $0 $589 $721
2015 2 0.0% $589 $0 $589 $721
2015 4 0.0% $609 $0 $609 $741

Studio / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2013 4 0.0% $469 $60 $409 $508
2015 1 0.0% $489 $0 $489 $588
2015 2 0.0% $489 $0 $489 $588
2015 4 0.0% $499 $0 $499 $598

Trend: Comments
4Q13 The property manager reported that a new management company took over the property in October 2012 and has been attempting to increase the
occupancy at the property since. The lowest occupancy rate the property has reached since the change in management is 74 percent. The contact was unable
to comment on turnover rate. The property does not currently accept housing choice vouchers.

1Q15 The property does not currently accept housing choice vouchers. There is a waiting list for the larger two-bedroom units, consisting of about ten to fifteen
people. Our contact could not provide an exact annual turnover but reported it being relatively low at below 15 percent.

2Q15 The property does not currently accept Housing Choice Vouchers. There is a waiting list for the larger two-bedroom units, consisting of about 10 to 15
households. Our contact could not provide an exact annual turnover but reported it being relatively low at below 15 percent.

4Q15 According to the contact, the rents have increased two to four percent since our last survey in 2Q2015. This property does not accept Housing Choice
Vouchers and does not maintain a waiting list.

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Donnelly Gardens, continued

Photos

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 PROPERTY PROFILE REPORT
The Darlington
Effective Rent Date 10/22/2015

Location 2025 Peachtree Road

Atlanta, GA 30309
Fulton County
Distance 5.4 miles
Units 612
Vacant Units 0
Vacancy Rate 0.0%
Type Highrise (13 stories)
Year Built/Renovated 1952 / 1980s
Marketing Began N/A
Leasing Began N/A
Last Unit Leased N/A
Major Competitors 710 Peachtree
Tenant Characteristics Mixed tenancy, averge HH size is 1 person,
average income is $26,000, Piedmont Hospital is
a major employer
Contact Name Whitney
Phone 404.351.5474

Market Information Utilities

Program Market A/C included -- central
Annual Turnover Rate 30% Cooking included -- gas
Units/Month Absorbed N/A Water Heat included -- electric
HCV Tenants 0% Heat included -- electric
Leasing Pace Within one week Other Electric included
Annual Chg. in Rent 2-25% increase since 1Q2015 Water not included
Concession None Sewer not included
Trash Collection not included

Unit Mix (face rent)

Beds Baths Type Units Size (SF) Rent Concession Restriction Waiting Vacant Vacancy Max Rent? Range
(monthly) List Rate
0 1 Highrise 250 430 $641 $0 Market No 0 0.0% N/A None
(13 stories)
0 1 Highrise 250 470 $711 $0 Market No 0 0.0% N/A None
(13 stories)
1 1 Highrise 56 500 $1,005 $0 Market No 0 0.0% N/A None
(13 stories)
1 1 Highrise 56 600 $1,065 $0 Market No 0 0.0% N/A None
(13 stories)

Unit Mix
Market Face Rent Conc. Concd. Rent Util. Adj. Rent
Studio / 1BA $641 - $711 $0 $641 - $711 $75 $716 - $786
1BR / 1BA $1,005 - $1,065 $0 $1,005 - $1,065 $75 $1,080 - $1,140

© Novogradac & Company LLP 2015 All Rights Reserved.

The Darlington, continued

Amenities
In-Unit Security Services
Blinds Carpeting Limited Access None
Central A/C Dishwasher
Exterior Storage Garbage Disposal
Oven Refrigerator
Walk-In Closet Washer/Dryer hookup

Property Premium Other

Clubhouse/Meeting Concierge View Library
Elevators Exercise Facility
Central Laundry Off-Street Parking
On-Site Management Picnic Area
Swimming Pool

Comments
According to the contact, the property does not maintain a waiting list and does not accept Housing Choice Vouchers. There is a $50 premium for units that are on the
top floor.

© Novogradac & Company LLP 2015 All Rights Reserved.

The Darlington, continued

Trend Report
Vacancy Rates
3Q11 4Q11 1Q15 4Q15
3.4% 3.4% 1.6% 0.0%

Trend: Market
1BR / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2011 3 0.0% $789 - $849 $0 $789 - $849 $864 - $924
2011 4 0.0% $789 - $849 $0 $789 - $849 $864 - $924
2015 1 0.0% $789 - $849 $0 $789 - $849 $864 - $924
2015 4 0.0% $1,005 - $1,065 $0 $1,005 - $1,065 $1,080 - $1,140

Studio / 1BA
Year QT Vac. Face Rent Conc. Concd. Rent Adj. Rent
2011 3 4.2% $629 - $699 $0 $629 - $699 $704 - $774
2011 4 4.2% $629 - $699 $0 $629 - $699 $704 - $774
2015 1 2.0% $629 - $699 $0 $629 - $699 $704 - $774
2015 4 0.0% $641 - $711 $0 $641 - $711 $716 - $786

Trend: Comments
3Q11 All the vacancies are among the studio units. Management reported that less than half of the tenants turnover over the course of a year; therefore, we have
stated 50 percent to be conservative. Occupancy has improved since 2009 from 92 to 94 percent. The property is no longer offering concessions and
increased rents in third quarter 2011.

4Q11 N/A

1Q15 All the vacancies are among the studio units. Management reported that less than half of the tenants turnover over the course of a year; therefore, we have
stated 50 percent to be conservative. The property is currently running a concession on studio units only. The concession is reduced first month's rent and it
is will continue to run based on market activity. The property does not maintain a waiting list on any of its units

4Q15 According to the contact, the property does not maintain a waiting list and does not accept Housing Choice Vouchers. There is a $50 premium for units that
are on the top floor.

© Novogradac & Company LLP 2015 All Rights Reserved.

 Abernathy Tower Apartments, Atlanta, GA; Appraisal

Amenities
A detailed description of amenities included in both the Subject and the comparable properties
can be found in the amenity matrix below.
UNIT MATRIX REPORT
Abernathy Baptist Big Bethel Brentwood Columbia Heritage Oglethorpe Calvin Court Donnelly The
Tower Gardens Village Village Senior Greene Place Gardens Darlington
Apartments Apartments Residences At
Mechanicsville
Comp # Subject 1 2 3 4 5 6 7 8 9

Property Information
Property Type Midrise Lowrise Lowrise Garden Midrise Garden Garden Highrise Garden Highrise
(age-restricted) (age-restricted) (age-restricted) (3 stories) (age-restricted) (2 stories) (3 stories) (age-restricted) (2 stories) (13 stories)
(5 stories) (4 stories) (3 stories) (4 stories) (11 stories)
Year Built / Renovated 1986 / 2011 2013 / n/a 2003 / n/a 2001 / n/a 2007 / n/a 1980s / 2004 1996 / n/a 1969 / As needed 1965 / As needed 1952 / 1980s
Market (Conv.)/Subsidy Type LIHTC, Market,
Public Housing,
LIHTC/Section 8 LIHTC LIHTC, Market LIHTC PBRA LIHTC, Market LIHTC, Market Market, Section 8 Market Market

Utility Adjusments
Cooking yes yes yes no no no no yes no yes
Water Heat yes yes yes no no no no yes no yes
Heat yes yes yes no no no no yes no yes
Other Electric yes yes yes no no no no yes no yes
Water yes yes yes yes no no no yes yes no
Sewer yes yes yes yes no no no yes yes no
Trash Collection yes yes yes no no yes yes yes yes no

In-Unit Amenities
Balcony/Patio no no yes no yes yes yes no yes no
Blinds yes no yes yes yes yes yes yes yes yes
Carpet/Hardwood yes yes no no no no no no yes no
Carpeting yes no no yes yes yes yes yes no yes
Central A/C no yes no yes yes yes yes no yes yes
Coat Closet yes no yes no yes yes yes yes no no
Dishwasher no yes yes yes yes yes yes no no yes
Exterior Storage no no no no no no yes no no yes
Ceiling Fan no yes yes yes no yes no no no no
Garbage Disposal no no yes yes yes yes yes no no yes
Hand Rails yes no yes no yes no no yes no no
Microwave no yes no no no no no no no no
Oven yes yes yes yes yes yes yes yes yes yes
Pull Cords no no yes no yes no no yes no no
Refrigerator yes yes yes yes yes yes yes yes yes yes
Vaulted Ceilings no no no no no no no no yes no
Walk-In Closet no no yes no no yes yes yes yes yes
Wall A/C yes no yes no no no no yes no no
Washer/Dryer hookup no no yes yes yes yes yes no no yes

Property Amenities
Business Center/Computer Lab no yes yes no yes no no yes no no
Carport no no no no no no no yes no no
Clubhouse/Meeting Room/Community Room yes yes yes yes yes yes yes yes no yes
Concierge no no no no no no no no no yes
Courtyard yes no no no no no no no yes no
Elevators yes yes yes no yes no no yes no yes
Exercise Facility no yes yes no yes yes yes yes no yes
Central Laundry yes yes yes yes yes yes yes yes yes yes
Off-Street Parking yes yes yes yes yes yes yes yes yes yes
On-Site Management yes yes yes yes yes yes yes yes yes yes
Picnic Area yes no no yes yes yes no yes no yes
Playground no no no yes no yes yes no no no
Recreation Areas no no no no no no no yes no no
Service Coordination no yes no no yes no no no no no
Swimming Pool no no no yes no no yes yes no yes
Theatre no no yes no yes no no no no no

Services
Shuttle Service no yes yes no no no no yes no no

Security
Intercom (Buzzer) no no no no yes no no no no no
Limited Access no yes yes no no yes yes yes no yes
Patrol yes no yes yes yes yes no yes yes no
Perimeter Fencing no no yes no no yes yes yes no no
Video Surveillance no no no no yes yes no no no no

Premium Amenities
Delivered Hot Lunches no yes no no no no no no no no
Hairdresser / Barber no yes yes no no no no yes no no
Medical Professional no yes no no yes no no no no no

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

In-Unit Amenities and Common Area Amenities

The Subject’s unit amenities will be slightly inferior to a majority of the LIHTC and market rate
comparables, which typically include a balcony or patio, central air conditioning, dishwashers,
garbage disposals, walk-in closets, and washer/dryer hookups. However, the units at the Subject
will include wood plank flooring and handrails, which most comparables do not include. In terms
of project amenities, the Subject is similar to slightly inferior to the LIHTC and market rate
comparable properties. The Subject does not offer an exercise facility which many of the
comparables offer. However, the Subject offers a courtyard and elevators which many of the
comparables do not offer. Additionally, the Subject will offer patrol as a security feature. All of
the comparables offer some form of security. A few of the senior comparables also offer
delivered hot lunches, a hairdresser/barber, and medical professional, which are not offered at the
Subject. Overall, we believe that the proposed amenities will allow the Subject to effectively
compete in the market.

Utility Structure
The utility conventions differ at the comparable properties; therefore, we have adjusted “base” or
“asking” rents of the comparable properties to “net” rents, reflecting the Subject’s utility
convention.

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

MARKET CHARACTERISTICS
Following are relevant market characteristics for the comparable properties surveyed.

Vacancy Levels
The following table illustrates the current vacancy levels reported by the comparable properties
in the market.

OVERALL VACANCY
Property name Rent Structure* Total Vacant Vacancy
Units Units Rate
Baptist Gardens Senior LIHTC 100 1 1.0%
Big Bethel Village Senior LIHTC/Market 120 2 1.7%
Brentwood Village LIHTC
Apartments 506 4 0.8%
Columbia Senior Residences Senior LIHTC/Market/Public
At Mechanicsville Housing/PBRA 154 4 2.6%
Heritage Greene LIHTC/Market 109 0 0.0%
Oglethorpe Place LIHTC/Market 144 8 5.6%
Calvin Court Senior Section 8/Market 240 0 0.0%
Donnelly Gardens Market 250 0 0.0%
The Darlington Market 612 0 0.0%
Total LIHTC 1,133 19 2.0%
Total Market 1,629 14 1.4%
Total Senior 614 7 1.3%
Total 2,235 19 0.9%
*Located outside PMA
(1)The LIHTC and market rate units at the mixed-income comparables have been included with the appropriate project types in aggregate

As illustrated, vacancy rates in the market range from zero to 5.6 percent, averaging 0.9 percent.
The LIHTC comparable properties have vacancy rates ranging from zero to 5.6 percent, with an
average vacancy rate of 2.0 percent. The market rates comparable are experiencing vacancy rates
ranging from zero to 5.6 percent, with an average vacancy rate of 1.4 percent. The senior
comparables are experiencing vacancy rates ranging from zero to 2.6 percent, with an average of
1.3 percent. The average vacancy rates among the comparables are considered excellent. We
anticipate that the Subject will perform similarly to the LIHTC and senior comparables and will
maintain a vacancy rate of five percent or less. If allocated, we do not believe that the Subject
will impact the performance of the existing LIHTC properties, as the renovation of the Subject
will not create new low-income units, but rather will serve to improve and preserve existing low-
income housing stock. The Subject is currently 94.0 percent occupied with a waiting list 18
months in length. According to the Subject’s historical audited financials, the Subject has
operated with a total vacancy rate (including collection loss) between 4.3 to 5.6 percent over the
past two years with an average total vacancy rate of 5.0 percent. As such, we believe the Subject
will continue to operate with a physical vacancy rate of 5.0 percent or less, in line with its
historical performance. For the unrestricted scenario, we assume 6.0 percent, inclusive of
collection loss.

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 Abernathy Tower Apartments, Atlanta, GA; Appraisal

Absorption
We were able to obtain absorption information from three senior properties, two of which were
utilized as comparables, illustrated in the following table. Many comparables could not provide
absorption data as they consist of older vintage.

ABSORPTION
Units
Property Name Type Tenancy Year Built Number of Units Absorbed /
Month
Big Bethel Village* Senior LIHTC/Market Senior 2003 120 10
Adamsville Green** Senior LIHTC/Market Senior 2010 90 23
Baptist Gardens* Senior LIHTC Senior 2013 100 15
*Utilized as a comparable
**Outside PMA

As illustrated in the previous table, the properties constructed between 2003 and 2013 reported
absorption rates of 10 to 23 units per month, with an average of 16 units per month. Baptist
Gardens is the newest senior LIHTC comparable to enter the PMA. This property experienced
an absorption rate of 15 units per month. The Subject will target a similar tenancy as the
absorption comparables, as such we would expect the Subject to experience an absorption rate
similar to the comparables.

Per DCA guidelines, we have calculated the absorption rate for the Subject to achieve 93 percent
occupancy. If the Subject were 100 percent vacant following the renovations with Section 8
subsidies in place for all the units, which is very unlikely given the Subject’s relocation plan, we
would expect the Subject to experience an absorption pace of 20 units per month, which equates
to an absorption period of approximately five months for the Subject to reach 93 percent
occupancy. In the unlikely event the Section 8 subsidies were not in place following renovations,
we still believe the Subject could achieve 93 percent occupancy at the proposed rent levels within
less than one year. In this scenario, we would anticipate an average absorption rate of 10 units per
month, with stabilization occurring within approximately nine months.

The Subject’s proximity to retail and other locational amenities as well as its surrounding uses,
which are in average to good condition, are considered positive attributes. We did not notice any
negative attributes of the site during our site inspection. The Subject has a historical vacancy of
5.6 and 4.3 percent for 2013 and 2014, respectively.

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Rental Advantage
The following table illustrates the Subject’s similarity to the comparable properties. We inform
the reader that other users of this document may underwrite the LIHTC rents to a different
standard than contained in this report.
SIMILARITY MATRIX
Property Overall
# Property Name Type Amenities Unit Features Location Age / Condition Unit Size Comparison
1 Baptist Gardens Senior LIHTC Slightly Superior Slightly Superior Similar Superior Superior 30
2 Big Bethel Village* Senior LIHTC/Market Slightly Superior Superior Similar Slightly Superior Similar 20
3 Brentwood Village Apartments LIHTC Slightly Superior Slightly Superior Similar Slightly Superior Similar 15
Columbia Senior Residences Senior LIHTC/Market/Public
4 Slightly Superior Superior Similar Superior Superior 35
At Mechanicsville Housing/PBRA
5 Heritage Greene* LIHTC/Market Similar Superior Similar Similar Slightly Superior 15
6 Oglethorpe Place LIHTC/Market Slightly Superior Superior Similar Slightly Superior Slightly Superior 25
7 Calvin Court* Senior Section 8/Market Superior Similar Superior Similar Similar 20
8 Donnelly Gardens Market Similar Slightly Superior Similar Similar Slightly Superior 10
9 The Darlington* Market Slightly Superior Superior Superior Similar Similar 25
Inferior=-10, slightly inferior=-5, similar=0, slightly superior=5, superior=10.
*Located outside PMA

Rents ‘As Is’ and “As Renovated” Restricted

The Subject’s potential rental income as is and as renovated restricted assumes the Section 8
program HAP contract rents.
Achievable Rents ‘As Renovated’ Unrestricted
The as renovated unrestricted income assumes the achievable as renovated unrestricted rents.
Based on the quality of the surveyed comparable properties and the anticipated quality of the
proposed Subject, we conclude that the studio LIHTC rents are above the achievable market rates
for the Subject’s area and that the one-bedroom rents are within the achievable rates for the
Subject’s area. The following tables show the similarity of the market rate comparables to the
Subject property.

SUBJECT COMPARISON TO MARKET RENTS

Subject’s
Surveyed Subject Rent
Unit Type Proposed Surveyed Min Surveyed Max
Average Advantage
LIHTC Rents
Studio $717 $549 $1,092 $740 3%
1 BR $768 $601 $1,140 $917 16%

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MARKET RENT COMPARISON

Property Name 0BR 1BR
Subject @60% $717 $768
$1,075
$1,050
$940
$930
Big Bethel Village $700 $805
$1,092 $931
Calvin Court $622 $820
Columbia Senior Residences At
Mechanicsville - $1,039
$618
Donnelly Gardens $598 $608
Heritage Greene $669 $803

Oglethorpe Place - $992

$786 $1,140
The Darlington $716 $1,080
Average (excluding Subject) $740 $917
Novoco Achievable Post -
Rehabilitation Market Rent $670 $920

The Subject’s proposed LIHTC studio rents are slightly below the surveyed average, but within
the range of the comparables. The Subject’s one-bedroom LIHTC rents are below the surveyed
average, but within the range of the comparables.

Donnelly Gardens is the most similar market rate property and it is 100 percent occupied. The
Subject will offer slightly inferior unit and similar property amenities to Donnelly Gardens. The
Subject will be in superior condition upon completion of renovations, as Donnelly Gardens was
built in 1965 and is in average condition. Donnelly Gardens does offer slightly superior unit
sizes. The Subject’s proposed rents ($717 and $768, respectively for the one and two-bedrooms)
are above Donnelly Gardens, which are $598 and $608 to $618 for studios and one-bedroom
units, respectively. This is a disadvantage for the Subject because without the Section 8 subsidies
the proposed LIHTC studio and one-bedroom rents are above the most comparable market rate
property.

Overall, we have estimated the Subject’s achievable post-renovation studio and one-bedroom
market rents to be $670 and $920, respectively. We believe these rents are reasonable as they are
within the range of the comparables. We were also engaged to do an RCS, “as renovated”
unrestricted rent grids can be found in Addendum J.

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Indications of Demand
Based upon our market research, demographic calculations and analysis, we believe there is
demand for the Subject property as conceived. Strengths of the Subject will include its
age/condition, in-unit amenities, and community amenities. Overall, the comparable properties
surveyed exhibited an average vacancy rate of 0.9 percent. There is adequate demand for the
Subject based on our calculations. We also believe the proposed rents offer value in the market.

The following demand analysis evaluates the potential amount of qualified households, which the
Subject would have a fair chance at capturing. The structure of the analysis is based on the
guidelines provided by DCA.

1. INCOME RESTRICTIONS
LIHTC rents are based upon a percentage of the Area Median Gross Income (“AMI”), adjusted
for household size and utilities. The Georgia Department of Community Affairs (“DCA”) will
estimate the relevant income levels, with annual updates. The rents are calculated assuming that
the maximum net rent a household will pay is 30 percent of its household income at the
appropriate AMI level.

According to DCA, household size is assumed to be 1.5 persons per bedroom for LIHTC rent
calculation purposes. For example, the maximum rent for a four-person household in a two-
bedroom unit is based on an assumed household size of three persons (1.5 per bedroom).

To assess the likely number of tenants in the market area eligible to live in the Subject, we use
Census information as provided by ESRI Information Systems, to estimate the number of
potential tenants who would qualify to occupy the Subject as a LIHTC project.

The maximum income levels are based upon information obtained from the Rent and Income
Limits Guidelines Table as accessed from the DCA website.

2. AFFORDABILITY
As discussed above, the maximum income is set by DCA while the minimum is based upon the
minimum income needed to support affordability. This is based upon a standard of 35 percent.
Lower and moderate-income families typically spend greater than 30 percent of their income on
housing. These expenditure amounts can range higher than 50 percent depending upon market
area. However, the 30 to 40 percent range is generally considered a reasonable range of
affordability. DCA guidelines utilize 35 percent for families and 40 percent for general
households. We will use these guidelines to set the minimum income levels for the demand
analysis.
3. DEMAND
The demand for the Subject will be derived from two sources: existing households and new
households. These calculations are illustrated in the following tables.

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3A. DEMAND FROM NEW HOUSEHOLDS

The number of new households entering the market is the first level of demand calculated. We
have utilized January 2017, the anticipated date of market entry, as the base year for the analysis.
Therefore, 2015 household population estimates are trended to January 2017 by interpolation of
the difference between 2015 estimates and 2019 projections. This change in households is
considered the gross potential demand for the Subject property. This number is adjusted for
income eligibility and renter tenure. In the following tables this calculation is identified as Step
1. This is calculated as an annual demand number. In other words, this calculates the anticipated
new households in January 2017. This number takes the overall growth from 2015 to January
2017 and applies it to its respective income cohorts by percentage. This number does not reflect
lower income households losing population, as this may be a result of simple dollar value
inflation.

3B. DEMAND FROM EXISTING HOUSEHOLDS

Demand for existing households is estimated by summing three sources of potential tenants. The
first source (2a.) is tenants who are rent overburdened. These are households who are paying
over 35 percent for family households and 40 percent for senior households of their income in
housing costs. This data is interpolated using CHAS data based on appropriate income levels.

The second source (2b.) is households living in substandard housing. We will utilize this data to
determine the number of current residents that are income eligible, renter tenure, overburdened
and/or living in substandard housing and likely to consider the Subject. The third source (2c.) is
those seniors likely to move from their own homes into rental housing. This source is only
appropriate when evaluating senior properties and is determined by interviews with property
managers in the PMA. It should be noted that per DCA guidelines, we have lowered demand
from seniors who convert to homeownership to be at or below 2.0 percent of total demand.

In general, we will utilize this data to determine the number of current residents that are income
eligible, renter tenure, overburdened and/or living in substandard housing and likely to consider
the Subject.

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3C. SECONDARY MARKET AREA

Per the 2015 GA DCA Qualified Allocation Plan (QAP) and Market Study Manual, GA DCA
does not consider demand from outside the Primary Market Area (PMA), including the
Secondary Market Area (SMA). Therefore, we have not accounted for leakage from outside the
PMA boundaries in our demand analysis.

3D. OTHER
DCA does not consider household turnover to be a source of market demand. Therefore, we
have not accounted for household turnover in our demand analysis.

4. NET DEMAND, CAPTURE RATES AND STABILIZATION CALCULATIONS

The following pages will outline the overall demand components added together (3(a), 3(b) and
3(c)) less the supply of competitive developments awarded and/or constructed or placed in
service from 2013 to the present.

ADDITIONS TO SUPPLY
Additions to supply will lower the number of potential qualified households. Pursuant to our
understanding of DCA guidelines, we have deducted the following units from the demand
analysis.

• Comparable/competitive LIHTC and bond units (vacant or occupied) that have been
funded, are under construction, or placed in service in 2013 and 2014.
• Vacancies in projects placed in service prior to 2013 that have not reached stabilized
occupancy (i.e. at least 90 percent occupied).
• Comparable/competitive conventional or market rate units that are proposed, are under
construction, or have entered the market from 2013 to present. As the following
discussion will demonstrate, competitive market rate units are those with rent levels that
are comparable to the proposed rents at the Subject.

According to the Georgia Department of Community Affairs, the only property that has been
awarded tax credits since 2013 in the Subject’s Primary Market Area is Stanton Oaks (fka
Boynton Village Apartments). Additionally, Gateway Capital View and Phoenix House have
applied for 2015 LIHTC’s and would be located in the Subject’s PMA if they get awarded
funding.

Stanton Oaks formerly known as Boynton Village Apartments is located at 1044 SE Hank Aaron
Drive approximately 2.1 miles east of the Subject and was allocated LIHTC funding in 2013.
Stanton Oaks is a family Section 8 property that was rehabilitated with LIHTCs. According to
the property manager the property was completely gutted and just finished renovations the first
week in November 2015. The property still offers one, two, three, and four-bedroom units which
are all encumbered by the Section 8 contract. The property is currently 100 percent occupied.

Gateway Capital View will be located at 1374 Murphy Avenue approximately 1.2 miles south of
the Subject if it is allocated LIHTCs in the 2015 funding period. The property is proposed for 94
one and two-bedroom family units. Of the 94 units, 78 will be one-bedroom units and will
compete directly with the Subject.

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Phoenix House is located at 1296 Murphy Avenue SW approximately 1.1 miles south of the
Subject. Phoenix House has applied for LIHTCs in the 2015 funding period to rehabilitate its 69
studio units. Phoenix House targets mentally disabled and formerly homeless tenants and
operates with Shelter Plus Care subsidy. Phoenix House will not compete directly with the
Subject.

PMA OCCUPANCY
Per DCA’s guidelines, we have determined the average occupancy rate based on all available
competitive conventional and LIHTC properties in the PMA. We have provided a combined
average occupancy level for the PMA based on the average occupancy rates reported.

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OVERALL OCCUPANCY - PMA

Property Name Rent Structure Tenancy Units Occupancy Waiting list
Baptist Gardens* LIHTC Seniors 100 99% Yes-15 Households
142 Meldon Ave Se LIHTC Seniors N/Av N/Av N/Av
416 Atwood St Sw LIHTC Familes 2 100% No
426 Atwood St Sw LIHTC Families 2 100% No
432 Atwood St Sw LIHTC Families 2 100% No
494 Atwood St Sw LIHTC Families 2 100% No
766 Azalia St Sw LIHTC Families 2 100% No
770 Azalia St Sw LIHTC Families N/Av N/Av N/Av
774 Azalia St Sw LIHTC Families N/Av N/Av N/Av
920 Sells Ave Sw LIHTC Families N/Av N/Av N/Av
924 Mathews St Sw LIHTC Families N/Av N/Av N/Av
932 Mathews St Sw LIHTC Families 2 100% No
936 Mathews St Sw LIHTC Families N/Av N/Av N/Av
Allen Temple LIHTC Families N/Av N/Av N/Av
Amal Townhome Community LIHTC Families 100 N/Av N/Av
Ashley Collegetown, Phase II LIHTC Families N/Av N/Av N/Av
Ashley West End LIHTC Familes 112 99% Yes
The Villages at Carver LIHTC Families 667 97% Yes-7,000 households
Atlanta Napfe Elderly Towers Section 8 Seniors 97 96% Yes
Atrium At Collegetown LIHTC Seniors 190 100% Yes-187 households
Atwood Street Duplex LIHTC Families 2 100% No
Baptist Towers Section 8 Seniors N/Av N/Av N/Av
Betmar Village LIHTC Families 47 100% Yes
Brentwood Creek LIHTC Families N/Av N/Av N/Av
Brentwood Heights LIHTC Families N/Av N/Av N/Av
Brentwood Village Apartments* LIHTC Families 506 99% No
Capitol Avenue School Section 8 Seniors 48 N/Av N/Av
Capitol Towers Section 8 Seniors 39 100% Yes-1.5 years
Caribu Apartments Market Families 166 98% No
City Views At Rosa Burney Park LIHTC Families 180 99% Yes
Columbia Senior Residences At Mechanicsville LIHTC Families 154 96% Yes
Columbia At Peoplestown LIHTC Families N/Av N/Av N/Av
Columbia at Sylvan Hills LIHTC Families 191 94% Yes
Columbia Blackshear Senior Residences LIHTC Seniors N/Av N/Av N/Av
Columbia Plaza Apts LIHTC Families N/Av N/Av N/Av
Coulmbia High Pt Estates Sr LIHTC Seniors N/Av N/Av N/Av
Courtyard At Maple LIHTC Families 182 100% No
Croggman School Lofts LIHTC Families N/Av N/Av N/Av
Donnelly Gardens* Market Families 250 100% No
Enclave at Webster Park LIHTC Familes N/Av N/Av N/Av
Fairlie Poplar Lofts Market Families 15 99% No
Friendship Towers Section 8 Seniors 102 100% Yes-6 months
Gardens At Collegetown LIHTC Families N/Av N/Av N/Av
Gates Park Crossing Hfs Apts LIHTC Families N/Av N/Av N/Av
Gateway Apts At Northside Village LIHTC Families N/Av N/Av N/Av
Grant Park Apts LIHTC Families N/Av N/Av N/Av
Grant Park Commons LIHTC Familiea 344 70% No
Greenwich Street Apts LIHTC Families N/Av N/Av N/Av

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Lillie R Campbell House LIHTC Seniors N/Av N/Av N/Av

Magnolia Park Apts, Phase II LIHTC Families N/Av N/Av N/Av
Mechanicsville Apartments Section 8 Families N/Av N/Av N/Av
Mechanicsville Apts, Phase III LIHTC Families N/Av N/Av N/Av
Mechanicsville Apts, Phase VI LIHTC Families N/Av N/Av N/Av
Mechanicsville Station Section 8 Families 164 96% Yes
Oglethorpe Apartments Market Families N/Av N/Av N/Av
Oglethorpe Place* Market/LIHTC Families 144 94% No
Park At Lakewood LIHTC Families 299 60% No
Patterson Heights LIHTC Families 10 N/Av N/Av
Peaks At Martin Lurther King LIHTC Familes N/Av N/Av N/Av
Pittsburgh, Phase I Lp LIHTC Seniors N/Av N/Av N/Av
Preserve At Bent Creek LIHTC Families 324 94% No
Preserve At Collier Ridge LIHTC Families 416 70% No
Provenance At Hollowell Family LIHTC Families N/Av N/Av N/Av
QLS Haven Section 8 Seniors 120 98% Yes-2 years
Reed Street Apts LIHTC Families N/Av N/Av N/Av
Rosa Burney Manor LIHTC Familes 54 98% Yes-6 households
Seven Courts LIHTC Seniors 171 91% Yes
Showcase District LIHTC Families N/Av N/Av N/Av
Square At Peoplestown LIHTC Familes 94 96% No
Sylvan Circle Market Families 296 50% No
The Veranda At Collegetown Section 8 Seniors 100 100% Yes
The Villages at Castleberry Hill LIHTC Families 450 97% Yes-100 households
Thornton Place LIHTC Families 12 N/Av N/Av
Toby Sexton Redevelopment LIHTC Families N/Av N/Av N/Av
Trestletree Village Apts Section 8 Families 188 100% Yes-500 households
Veranda Carver LIHTC Families N/Av N/Av N/Av
Villages Of Cascade Apts LIHTC Families N/Av N/Av N/Av
Washington Heights LIHTC Families 1 N/Av N/Av
Wells Court Commons LIHTC Families N/Av N/Av N/Av
Westview Lofts LIHTC Families N/Av N/Av N/Av
Average 148 94% -
*Utilized as a comparable

Rehab Developments and Section 8

For any properties that are rehab developments, the capture rates will be based on those units that
are vacant, or whose tenants will be rent burdened or over income as listed on the Tenant
Relocation Spreadsheet.

Units that are subsidized with Section 8 or whose rents are more than 20 percent lower than the
rent for other units of the same bedroom size in the same AMI band and comprise less than 10
percent of total units in the same AMI band will not be used in determining project demand. In
addition, any units, if priced 30 percent lower than the average market rent for the bedroom type
in any income segment, will be assumed to be leasable in the market and deducted from the total
number of units in the project for determining capture rates.

According to the Georgia DCA market study guidelines, capture rate calculations for proposed
renovation developments will be based on those units that are vacant, or whose tenants will be
rent burdened or over income as listed on the Tenant Relocation Spreadsheet provided by the

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applicant. Tenants who are income qualified to remain in the property at the proposed
stabilized renovated rents will be deducted from the property unit count prior to determining
the applicable capture rates. The Subject has five vacant units, one over income tenant, and
no tenants who are income-qualified for their specific unit type without the Section 8 subsidy
Thus, post renovation the Subject will only have six vacancies to fill. However, we have
determined the Subject’s capture rates based on the 99 total units with no income-eligible
resident households deducted.

The Subject will offer studio and one-bedroom units restricted at the 60 percent of AMI. It
should be noted that DCA requires that the new rent structure will not result in rent increases
during the term of existing leases at the Subject. Rent increases will be made gradually,
maintaining rents that are affordable to the existing tenant base. However, the tenants at the
Subject will continue to pay 30 percent of their income towards rent. We do not expect that the
Subject will need to re-lease 99 units following renovation. Therefore, our demand analysis is
considered conservative.

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Capture Rates
The calculations and derived capture rates are illustrated in the following tables.

Senior Renter Household Income Distribution 2015 to Projected Market Entry December 2016
Abernathy Tower Apartments
PMA

Projected Mkt Entry December

2015 2016 Percent
# % # % Growth
$0-9,999 2,400 40.8% 2,563 41.4% 6.4%
$10,000-19,999 1,482 25.2% 1,551 25.0% 4.4%
$20,000-29,999 712 12.1% 740 12.0% 3.9%
$30,000-39,999 426 7.2% 441 7.1% 3.6%
$40,000-49,999 217 3.7% 228 3.7% 4.9%
$50,000-59,999 234 4.0% 239 3.9% 2.2%
$60,000-74,999 169 2.9% 172 2.8% 1.9%
$75,000-99,999 103 1.8% 108 1.8% 4.8%
$100,000-124,999 56 1.0% 57 0.9% 0.9%
$125,000-149,999 33 0.6% 33 0.5% -0.6%
$150,000-199,999 23 0.4% 26 0.4% 10.7%
$200,000+ 34 0.6% 35 0.6% 1.1%
Total 5,890 100.0% 6,195 100.0% 4.9%

Senior Renter Household Income Distribution Projected Market Entry December 2016
Abernathy Tower Apartments
PMA

Projected Mkt Entry December Change 2015 to

2016 Prj Mrkt Entry December 2016
# % #
$0-9,999 2,563 41.4% 126
$10,000-19,999 1,551 25.0% 76
$20,000-29,999 740 12.0% 36
$30,000-39,999 441 7.1% 22
$40,000-49,999 228 3.7% 11
$50,000-59,999 239 3.9% 12
$60,000-74,999 172 2.8% 8
$75,000-99,999 108 1.8% 5
$100,000-124,999 57 0.9% 3
$125,000-149,999 33 0.5% 2
$150,000-199,999 26 0.4% 1
$200,000+ 35 0.6% 2
Total 6,195 100.0% 305

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60 Percent AMI Demand with Section 8 Subsidies

Calculation of New Senior Renter Household Demand by Income Cohort by % of AMI

Percent of AMI Level 60%
Minimum Income Limit $0
Maximum Income Limit $32,760
New Senior Renter
Households - Total
Change in Households Renter
PMA 2015 to Prj Mrkt Income Percent Households
Income Category Entry December 2016 Brackets within Cohort within Bracket
$0-9,999 126.16 41.4% 9,999 100.0% 126
$10,000-19,999 76.31 25.0% 9,999 100.0% 76
$20,000-29,999 36.44 12.0% 9,999 100.0% 36
$30,000-39,999 21.73 7.1% 2,760 27.6% 6
$40,000-49,999 11.23 3.7% 0.0% 0
$50,000-59,999 11.76 3.9% 0.0% 0
$60,000-74,999 8.48 2.8% 0.0% 0
$75,000-99,999 5.34 1.8% 0.0% 0
$100,000-124,999 2.80 0.9% 0.0% 0
$125,000-149,999 1.63 0.5% 0.0% 0
$150,000-199,999 1.27 0.4% 0.0% 0
$200,000+ 1.71 0.6% 0.0% 0
305 100.0% 245
Percent of senior renter households within limits versus total number of renter households 80.3%

Calculation of Potential Senior Household Demand by Income Cohort by % of AMI

Percent of AMI Level 60%
Minimum Income Limit $0
Maximum Income Limit $32,760

Total Senior Renter

Households PMA Prj Mrkt Income Percent Households
Income Category Entry December 2016 Brackets within Cohort within Bracket
$0-9,999 2,563 41.4% $9,999 100.0% 2,563
$10,000-19,999 1,551 25.0% $9,999 100.0% 1,551
$20,000-29,999 740 12.0% $9,999 100.0% 740
$30,000-39,999 441 7.1% $2,760 27.6% 122
$40,000-49,999 228 3.7% 0.0% 0
$50,000-59,999 239 3.9% 0.0% 0
$60,000-74,999 172 2.8% 0.0% 0
$75,000-99,999 108 1.8% 0.0% 0
$100,000-124,999 57 0.9% 0.0% 0
$125,000-149,999 33 0.5% 0.0% 0
$150,000-199,999 26 0.4% 0.0% 0
$200,000+ 35 0.6% 0.0% 0
6,195 100.0% 4,976
Percent of renter households within limits versus total number of renter households 80.3%

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Does the Project Benefit from Rent Subsidy? (Y/N) Yes

Type of Housing (Family vs Senior) Senior
Location of Subject (Rural versus Urban) Urban
Percent of Income for Housing 40%
2000 Median Income $23,947
2015 Median Income $26,233
Change from 2015 to Prj Mrkt Entry December 2016 $2,286
Total Percent Change 9.5%
Average Annual Change 1.6%
Inflation Rate 1.6% Two year adjustment 1.0000
Maximum Allowable Income $32,760
Maximum Allowable Income Inflation Adjusted $32,760
Maximum Number of Occupants 2
Rent Income Categories 60%
Initial Gross Rent for Smallest Unit $717
Initial Gross Rent for Smallest Unit Inflation Adjusted $717.00

Persons in Household 0BR 1BR 2BR 3BR 4BR 5BR Total

1 50% 50% 0% 0% 0% 0% 100%
2 0% 80% 20% 0% 0% 0% 100%
3 0% 0% 60% 40% 0% 0% 100%
4 0% 0% 0% 80% 20% 0% 100%
5+ 0% 0% 0% 70% 30% 0% 100%

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STEP 1 Please refer to text for complete explanation.

Demand from New Senior Renter Households 2015 to Prj Mrkt Entry December 2016
Income Target Population 60%
New Renter Households PMA 305
Percent Income Qualified 80.3%
New Renter Income Qualified Households 245

STEP 2a. Please refer to text for complete explanation.

Demand from Existing Households 2015
Demand form Rent Overburdened Households
Income Target Population 60%
Total Existing Demand 6,195
Income Qualified 80.3%
Income Qualified Renter Households 4,976
Percent Rent Overburdened Prj Mrkt Entry December 2016 37.6%
Rent Overburdened Households 1,870

STEP 2b. Please refer to text for complete explanation.

Demand from Living in Substandard Housing
Income Qualified Renter Households 4,976
Percent Living in Substandard Housing 1.2%
Households Living in Substandard Housing 58

STEP 2c. Please refer to text for complete explanation.

Senior Households Converting from Homeownership
Income Target Population 60%
Total Senior Homeowners 6,195
Rural Versus Urban 2.0%
Senior Demand Converting from Homeownership 124

Total Demand
Total Demand from Existing Households 2,052
Adjustment Factor - Leakage from SMA 100% 0
Adjusted Demand from Existing Households 2,052
Total New Demand 245
Total Demand (New Plus Existing Households) 2,297

Demand from Seniors Who Convert from Homeownership 124

Percent of Total Demand From Homeonwership Conversion 5.4%
Is this Demand Over 2 percent of Total Demand? Yes

By Bedroom Demand
One Person 64.8% 1,489
Two Persons 18.0% 414
Three Persons 6.6% 151
Four Persons 5.7% 130
Five Persons 4.9% 113
Total 100.0% 2,297

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To place Person Demand into Bedroom Type Units

Of one-person households in studio units 50% 744
Of one-person households in 1BR units 50% 744
Of two-person households in 1BR units 80% 331
Of two-person households in 2BR units 20% 83
Of three-person households in 2BR units 60% 91
Of three-person households in 3BR units 40% 60
Of four-person households in 3BR units 80% 104
Of five-person households in 3BR units 70% 79
Of four-person households in 4BR units 20% 26
Of five-person households in 4BR units 30% 34
Total Demand 2,297

Total Demand by Bedroom 60%

0 BR 744
1 BR 1,076
Total Demand 1,820

Additions To Supply 2015 to Prj Mrkt Entry December 2016 60%

0 BR 0
1 BR 78
Total 78

Net Demand 60%

0 BR 744
1 BR 998
Total 1,742

Developer's Unit Mix 60%

0 BR 24
1 BR 75
Total 99

Capture Rate Analysis 60%

0 BR 3.2%
1 BR 7.5%
Total 5.7%

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Conclusions
We have conducted such an analysis to determine a base of demand for the Subject as an LIHTC
property. Several factors affect the indicated capture rates and are discussed following.

• The number of senior renter households in the PMA is expected to increase by 305
households between 2015 and the date of market entry.

• The Subject will continue to attract one and two-person household sizes in offering studio
and one-bedroom units.

• Per 2015 DCA guidelines, our demand analysis does not account for leakage outside the
PMA. In actuality, we expect that the Subject will experience a moderate leakage rate of 15
percent. As such, the demand analysis is conservative as this leakage factor is not included.

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CAPTURE RATE ANALYSIS CHART- WITH SUBSIDIES

Unit Size Income limits Units Total Supply Net Capture Absorption Average Market Proposed
Proposed Demand Demand Rate Market Rents Rents
0BR- 60% AM/Section 8 $0-$28,680 24 744 0 744 3.2% 9 months $709 $549-$1,092 $717
1BR- 60% AMI/Section 8 $0-$32,760 75 1,076 78 998 7.5% 9 months $860 $601-$1,104 $768
Overall- 60% AMI/ Section 8 $0-$32,760 99 1,820 78 1,742 5.7% - - - -

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Demand and Net Demand

HH at 60% AMI w/Section 8 (min
to max income)
Demand from New Households (age and income appropriate) 245
PLUS +
Demand from Existing Renter Households - Substandard Housing 58
PLUS +
Demand from Existing Renter Households - Rent Overburdened
Households 1,870
PLUS +
Secondary Market Demand adjustment IF ANY Subject to 15%
Limitation 0
Sub Total 2,173
Demand from Existing Households - Elderly Homeowner Turnover
(Limited to 20% where applicable) 124
Equals Total Demand 2,297
Less -
Supply of comparable LIHTC or Market Rate housing units built and/or
planned in the projected market 78
Equals Net Demand 2,219

As the analysis illustrates, the Subject’s capture rates at the 60 percent AMI level with Section 8 subsidies will range from 3.2 to 7.5
percent, with an overall capture rate of 5.7 percent. Including the Section 8 subsidy the overall capture rate is 5.7 percent which is well
below the DCA threshold of 30 percent for urban communities.

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HIGHEST AND BEST USE
 Abernathy Tower Apartments, Atlanta, GA; Appraisal

HIGHEST AND BEST USE

Highest and Best Use may be defined as that legal use which will yield the highest net present value
to the land, or that land use which may reasonably be expected to produce the greatest net return over
a given period of time.

Investors continually attempt to maximize profits on invested capital. The observations of investor
activities in the area are an indication of that use which can be expected to produce the greatest net
return to the land. The principle of conformity holds, in part, that conformity in use is usually a
highly desirable adjunct of real property, since it creates and/or maintains maximum value, and it is
maximum value which affords the owner maximum returns.

The Dictionary of Real Estate Appraisal (Fifth Edition, 2010), published by the Appraisal Institute,
defines Highest and Best Use as:

"The reasonably probable and legal use of vacant land or an improved property that is
physically possible, appropriately supported, financially feasible, and that results in the
highest value. The four criteria the highest and best use must meet are legal permissibility,
physical possibility, financial feasibility, and maximum productivity. Alternatively, the
probable use of the land or improved property—specific with respect to the user and timing
of the use—that is adequately supported and results in the highest present value.”

It is to be recognized that in cases where a site has existing improvements on it, the Highest and Best
Use may very well be determined to be different from the existing use. The existing use will
continue, however, unless and until land value in its Highest and Best Use exceeds the total value of
the property in its existing use. Implied in this definition is that the determination of Highest and
Best Use takes into account the contribution of a specific use to the community and the community’s
development goals, as well as the benefits of that use to individual property owners. The principle of
Highest and Best Use may be applied to the site if vacant, and to the site as it is improved.

The Highest and Best Use determination is a function of neighborhood land use trends, property size,
shape, zoning, and other physical factors, as well as the market environment in which the property
must compete. In arriving at the estimate of Highest and Best Use, the Subject site is analyzed “as if
vacant”, meaning vacant and available for development, and also “as is”.

Four tests are typically used to determine the Highest and Best Use of a particular property. Thus, the
following areas are addressed.

1. Physically Possible: The uses which it is physically possible to put on the site in question.

2. Legally Permissible: The uses that are permitted by zoning and deed restrictions on the site in
question.

3. Feasible Use: The possible and permissible uses that will produce any net return to the owner of
the site.

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4. Maximally Productive: Among the feasible uses, the use that will produce the highest net
return or the highest present worth.

HIGHEST AND BEST USE AS VACANT

Physically Possible
The Subject site contains approximately 1.62 acres. The Subject site has generally level topography
and is generally rectangular in shape. The site has good accessibility and is considered adequate for
a variety of legally permissible uses.

Legally Permissible
According to the City of Atlanta Zoning Map the Subject site is zoned RG-4-C, Residential General
District Sector 4. The principal residential uses permitted under this zoning code are single-family
and multifamily developments. The Subject site is 1.62 acres, or 70,567 square feet. This zoning
district allows for a maximum floor-to-area ratio of 1.49. The maximum floor-to-area ratio for the
land is 1.49 which would allow a building size of 105,145 square feet. Based on unit sizes in the
market, we believe it would be reasonable to construct a lowrise multifamily development with 75
units.

Financially Feasible
The cost of the land limits those uses that are financially feasible for the site. Any uses of the
Subject site that provide a financial return to the land in excess of the cost of the land are those uses
that are financially feasible.

The Subject’s feasible uses are restricted to those that are allowed by zoning classifications, and are
physically possible. As noted in the zoning section, the site can be used for varying densities of
residential uses. Given the site attributes, allowable uses and surrounding uses, we believe
multifamily residential development is most likely. Based upon our analysis, new construction of an
affordable apartment community with some source of gap funding, such as Low Income Housing
Tax Credits or favorable financing is most likely as market rate developments are occurring in
Atlanta, but not in the Subject’s submarket.

Maximally Productive
Based upon our analysis, new construction of an affordable apartment community with some source
of gap funding, such as Low Income Housing Tax Credits or favorable financing is most likely.
Therefore, the maximally productive use of this site as if vacant would be to construct a multifamily
rental property with financial subsidies.

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Highest and Best Use As If Vacant:

Based on the recent development patterns, the highest and best use “as if vacant” would be to
construct a lowrise multifamily development with 75-unit multifamily development with subsidy or
gap financing, such as LIHTC. The maximum floor-to-area ratio for the land is 1.49 which would
allow a building size of 105,145 square feet. Based on unit sizes in the market, we believe a 75-unit
development could be developed in a 105,145 square foot building.

Highest and Best Use As Improved:

The Subject property currently operates as 100 unit affordable multifamily property in average to
good condition. The property currently generates positive income and it is not deemed feasible to
tear it down for an alternative use. Therefore, the highest and best use of the site, as improved, would
be to continue to operate as an affordable multifamily housing development.

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APPRAISAL METHODOLOGY
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APPRAISAL METHODOLOGY

Contemporary appraisers usually gather and process data according to the discipline of the three
approaches to value.

The cost approach consists of a summation of land value (as though vacant) and the cost to
reproduce or replace the improvements, less appropriate deductions for depreciation. Reproduction
cost is the cost to construct a replica of the Subject improvements. Replacement cost is the cost to
construct improvements having equal utility.

In the sales comparison approach, we estimate the value of a property by comparing it with similar,
recently sold properties in surrounding or competing areas. Inherent in this approach is the principle
of substitution, which holds that when a property is replaceable in the market, its value tends to be
set at the cost of acquiring an equally desirable substitute property, assuming that no costly delay is
encountered in making the substitution. There is adequate information to use the sales comparison
approach and both the EGIM analysis and NOI/Unit analyses in valuing the Subject property.

The income capitalization approach requires estimation of the anticipated economic benefits of
ownership, gross and net incomes, and capitalization of these estimates into an indication of value
using investor yield or return requirements. Yield requirements reflect the expectations of investors
in terms of property performance, risk and alternative investment possibilities. The Subject is an
income producing property and this is considered to be the best method of valuation.

APPLICABILITY TO THE SUBJECT PROPERTY

The employment of the Cost Approach in the valuation process is based on the principle of
substitution. Investors in the marketplace do not typically rely upon the cost approach. As a result,
the cost approach is considered to have only limited use in the valuation of the Subject property.
However, we have provided an estimate of land value.

The income capitalization approach requires estimation of the anticipated economic benefits of
ownership, gross and net incomes, and capitalization of these estimates into an indication of value
using investor yield or return requirements. Yield requirements reflect the expectations of investors
in terms of property performance, risk, and alternative investment possibilities. Because the Subject
will be an income producing property, this is considered to be the best method of valuation. A direct
capitalization technique is utilized.

In the sales comparison approach, we estimate the value of a property by comparing it with similar,
recently sold properties in surrounding or competing areas. Inherent in this approach is the principle
of substitution, which holds that when a property is replaceable in the market, its value tends to be
set at the cost of acquiring an equally desirable substitute property, assuming that no costly delay is
encountered in making the substitution. There is adequate information to use both the EGIM and
NOI/Unit analyses in valuing the Subject property.

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LAND VALUE
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LAND VALUATION
To arrive at an opinion of land value for the Subject site, we have analyzed actual sales of
comparable sites in the competitive area. In performing the market valuation, an extensive search for
recent transfers of land zoned for multifamily development within the region was made. We were
able to locate four land sales occurring between January 2014 and October 2014.
No two parcels of land are alike; therefore, these sales have been adjusted for various factors
including location, size, shape, topography, utility, and marketability. The adjustments are the result
of a careful analysis of market data, as well as interviews with various informed buyers, sellers, real
estate brokers, builders, and lending institutions. A map of the comparable land sales is included
following. Individual descriptions of these land sale transactions are included on the following pages.
Land Sales Maps

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The following table summarizes the land sale transactions. A profile of each sale is located on the
following pages.

COMPARABLE LAND SALES

Sale
Number Location City Date Price Acres Units Price/Unit
1 608 Ralph McGill Blvd Atlanta, GA Oct-14 $5,500,000 2.44 268 $20,522
2 782 Peachtree Street Atlanta, GA Jun-14 $8,020,000 1.89 294 $27,279
3 160 Clairemont Avenue Decatur, GA Apr-14 $3,050,000 1.10 167 $18,263
4 112 Krog Street Atlanta, GA Jan-14 $4,613,300 2.92 222 $20,781

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Land Sale 1

Location: 608 Ralph McGill Blvd

Atlanta, GA

Buyer: JLB Partners, LP

Seller: Inland Real Estate Corporation
Sale Date: October-14
Sale Price: $5,500,000
Financing: Cash

Number of Units: 268

Site: Acre(s) 2.440
Square Footage 106,286
Zoning Multifamily
Corner Yes
Topography Level
Shape Rectangular

Sale Price: Per Unit $20,522

Per Acre $2,254,098
Per SF $51.75

Comments:
The site is currently vacant, but the developer has filed permits with the city for a new 268-
unit upscale apartment complex. The development as planned will be a mix of studio, one,
two, and three-bedroom units.

Verification: CoStar, Public Records

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Land Sale 2

Location: 112 Krog Street

Atlanta, GA

Buyer: Development Authority of Fulton County

Seller: JLB Peachtree LLC
Sale Date: June-14
Sale Price: $8,020,000
Financing: Cash

Number of Units: 294

Site: Acre(s) 1.89
Square Footage 82,328
Zoning Multifamily
Corner Yes
Topography Level
Shape Rectangular

Sale Price: Per Unit $27,279

Per Acre $4,243,386
Per SF $97.41

Comments:
The site is currently under construction for 294-unit project with an estimated completion
of late 2015 or early 2016. The project will include 294 apartments along with 6,300 square
feet of retail space in a 10-story highrise building.

Verification: Public Records, CoStar

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Land Sale 3

Location: 160 Clairemont Avenue

Decatur, GA

Buyer: Trammell Crow Residential Company

Seller: Parmenter Realty Partners
Sale Date: April-14
Sale Price: $3,050,000
Financing: Cash

Number of Units: 167

Site: Acre(s) 1.100
Square Footage 47,916
Zoning Multifamily
Corner Yes
Topography Level
Shape Irregular

Sale Price: Per Unit $18,263

Per Acre $2,772,727
Per SF $63.65

Comments:
The site is currently under construction of the Alexan 1133 Apartments which will
contain 167 units in a five-story midrise-style building. The apartment complex is set
to be complete in late 2015 or early 2016. The rents will range from $1,600 to $1,800 per
month and the average unit size will be 875 square feet.

Verification: CoStar, Public Records

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Land Sale 4

Location: 112 Krog Street

Atlanta, GA

Buyer: Trammell Crow Residential Company

Seller: Paces Properties, Inc.
Sale Date: January-14
Sale Price: $4,613,300
Financing: Cash

Number of Units: 222

Site: Acre(s) 2.920
Square Footage 127,195
Zoning Multifamily
Corner Yes
Topography Level
Shape Rectangular

Sale Price: Per Unit $20,781

Per Acre $1,579,897
Per SF $36.27

Comments:
The site was improved with the Alexan on Krog Apartments which contain 222 studio,
one, and two-bedroo units. The property began leasing in June 2015 and the project
will be completed in November/December 2015.

Verification: CoStar, Public Records

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ADJUSTMENTS
The following table illustrates adjustments applied to the sale comparables.

Comparable Land Data Adjustment Grid

Subject 1 2 3 4
1059 Oglethorpe 608 Ralph McGill 782 Peachtree 160 Clairemont 112 Krog
Location Avenue SW Blvd Street Avenue Street
City, State Atlanta, GA Atlanta, GA Atlanta, GA Decatur, GA Atlanta, GA
Parcel Data
Zoning Multifamily Multifamily Multifamily Multifamily Multifamily
Topography Level Level Level Level Level
Shape Rectangular Rectangular Irregular Rectangular Rectangular
Corner No Yes Yes Yes Yes
Size (SF) 70,567 106,286 82,328 47,916 127,195
Size (Acres) 1.6 2.44 1.89 1.10 2.92
Units 75 268 294 167 222
Units Per Acre 46.3 109.8 155.6 151.8 76.0
Sales Data
Date Oct-14 Jun-14 Apr-14 Jan-14
Interest Fee Simple Fee Simple Fee Simple Fee Simple
Price $5,500,000 $8,020,000 $3,050,000 $4,613,300
Price per Unit $20,522 $27,279 $18,263 $20,781
Adjustments
Property Rights 0 0 0 0
$5,500,000 $8,020,000 $3,050,000 $4,613,300
Financing 0 0 0 0
$5,500,000 $8,020,000 $3,050,000 $4,613,300
Conditions of Sale 0 0 0 0
$5,500,000 $8,020,000 $3,050,000 $4,613,300
Market Conditions 0% 0% 0% 0%
Adjusted Sale Price $5,500,000 $8,020,000 $3,050,000 $4,613,300
Adjusted Price Per Unit $20,522 $27,279 $18,263 $20,781
Adjustments
Location -25% -35% -15% -25%
Zoning/Density 0% 0% 0% 0%
Topography 0% 0% 0% 0%
Shape/Access/Visibility -10% -10% -10% -10%
Size/Number of Units 5% 5% 5% 5%
Overall Adjustment -30% -40% -20% -30%
Adjusted Price Per Unit $14,366 $16,367 $14,611 $14,546

Low $14,366
High $16,367
Mean $14,973
Median $14,579

Conclusion $14,500 x 75 $1,087,500

Rounded $1,090,000

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As illustrated, adjustments have been made based on price differences created by the following
factors:

• Property Rights
• Financing
• Conditions of Sale
• Market Conditions
• Location
• Zoning/Density
• Topography
• Shape
• Size/Number of Units

Property Rights
All of the sales used in this analysis represent the conveyance of the fee simple interest in the
respective properties. No adjustments are warranted.

Financing
If applicable, the comparable sales must be adjusted for financing terms. The adjustment renders the
sale price to cash equivalent terms. All of the sales are considered to be cash equivalent and no
adjustment is necessary.

Conditions of Sale
This adjustment is used if there are any unusual circumstances surrounding the transactions such as
foreclosures, bulk sales, related parties, assemblages, etc. All of the comparable sales are considered
to be market-oriented, arms-length transactions. As a result, no additional adjustments are needed.

Market Conditions
Real estate values change over time. The rate of this change fluctuates due to investors’ perceptions
and responses to prevailing market conditions. This adjustment category reflects market differences
occurring between the effective date of the appraisal and the sale date of comparables, when values
have appreciated or depreciated.

The comparable sales occurred between January 2014 and October 2014. Overall, capitalization rate
trends in the region appear to have generally followed the national capitalization rate trends over the
past several years, and are a good indication of changes in market conditions and resulting land value
over time. Historical capitalization rate trends are illustrated in the table on the following page.

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PwC Real Estate Investor Survey - National Apartment Market

Overall Capitalization Rate - Institutional Grade Investments
Quarter Cap Rate Change (bps)
1Q14 5.79 -0.01
2Q14 5.59 -0.20
3Q14 5.51 -0.08
4Q14 5.36 -0.15
1Q15 5.36 0.00
2Q15 5.30 -0.06
3Q15 5.39 0.09
Source: PwC Real Estate Investor Survey, Q4 2014

The comparables were all sold between January 2014 and October 2014, as such no market condition
adjustments were necessary.

Location
Location encompasses a number of issues, including location within different market areas with
different supply/demand pressures, the character/condition of surrounding development, access, and
visibility. It is important to assess which factors truly impact value for different types of real estate.

MEDIAN RENT
Zip Code Median Rent Differential
Subject 31030 $615 -
1 30312 $929 -51.1%
2 30308 $1,014 -64.9%
3 30030 $895 -45.5%
4 30307 $1,077 -75.1%
Source: City Data, 11/2015

The comparables are located in superior areas in regards to median rent. Therefore, all were adjusted
downward between 15 and 35 percent.

Zoning/Density
All of the land sales’ zoning permits multifamily development; therefore no adjustments are
necessary.

Shape/Access/Visibility
Site characteristics such as access, frontage, visibility, and shape can affect the marketability of sites,
making them more or less attractive to investors. The Subject has a generally similar shape but
slightly inferior access and visibility as the comparable sales. As such a ten percent downward
adjustment was applied to the comparable sales.

Size/Number of Units
With respect to size, the pool of potential purchasers decreases as property size (and purchase price)
increases. The pricing relationship is not linear and certain property sizes, while different, may not

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receive differing prices based on the grouping within levels. All of the comparable have more units.
Therefore, we have adjusted each sale upward by five percent.

CONCLUSION OF VALUE
The sales indicate a range of adjusted price per unit from $14,366 to $16,367 per unit, with a mean
of $14,973 per unit. Comparable two is an outlier and the other three sales suggest a very similar
price per unit. We have given the most weight to Sale 3 as it is considered to be in the most similar
location and has the most similar size when compared to the Subject. As such, we have concluded to
a sale price of $14,500 per unit.

As a result of our investigation and analysis, it is our opinion that, subject to the limiting conditions
and assumptions contained herein, the value of the underlying land in fee simple, as of October 30,
2015, is:
ONE MILLION NINETY THOUSAND DOLLARS
($1,090,000)

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INCOME CAPITALIZATION APPROACH
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INCOME CAPITALIZATION APPROACH

INTRODUCTION
We were asked to provide several value estimates, including:

• Market Value “As Is.”

• Hypothetical Market Value “As Complete and Stabilized” – Assuming Restricted Rents.
• Hypothetical Market Value “As Complete and Stabilized” – Assuming Unrestricted Rents.
• Prospective Market Value At Loan Maturity Assuming Restricted Rents.
• Prospective Market Value At Loan Maturity Assuming Unrestricted Rents.

The market values “as complete and stabilized” are hypothetical value estimates based upon the
anticipated benefits and timing of encumbrances and the development plan as proposed by the
developer, as described in the “Description of Improvements” section of this report. Please see
attached assumptions and limiting conditions for additional remarks concerning hypothetical value
estimates.

The Income Capitalization Approach to value is based upon the premise that the value of an income-
producing property is largely determined by the ability of the property to produce future economic
benefits. The value of such a property to the prudent investor lies in anticipated annual cash flows
and an eventual sale of the property. An estimate of the property’s market value is derived via the
capitalization of these future income streams.

The Subject’s market value for all scenarios is determined using Direct Capitalization with the
exception of its prospective market value at loan maturity, which is determined utilizing a discounted
cash flow analysis in both scenarios.

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POTENTIAL GROSS INCOME

In our search for properties comparable to the Subject, we concentrated on obtaining information on
those projects considered similar to the Subject improvements on the basis of location, size, age,
condition, design, quality of construction and overall appeal. In our market analysis we provided the
results of our research regarding properties considered generally comparable or similar to the
Subject.

The potential gross income of the Subject is the total annual income capable of being generated by
all sources, including rental revenue and other income sources. The Subject’s potential rental
income as is restricted is assumes the achievable as is unrestricted rents derived in the Supply Section
of this report, while the potential rental income as proposed restricted assumes the current Section 8
contract rents. The as proposed unrestricted income assumes the achievable as renovated unrestricted
rents.

POTENTIAL GROSS RENTAL INCOME - AS IS RESTRICTED

Number of Current Net Monthly Gross Annual Gross
Unit Type Units Contract Rents Rent Rent
Section 8
0BR/1BA 24 $1,123 $26,952 $323,424
1BR/1BA 75 $1,208 $90,600 $1,087,200
Manager's Unit
2BR/1BA 1 $0 $0 $0
Total 100 $1,410,624

POTENTIAL GROSS RENTAL INCOME - AS RENOVATED RESTRICTED

Number of Section 8 Monthly Gross Annual Gross
Unit Type Units Contract Rents Rent Rent
Section 8/60% AMI
0BR/1BA 24 $1,123 $26,952 $323,424
1BR/1BA 75 $1,208 $90,600 $1,087,200
Manager's Unit
2BR/1BA 1 $0 $0 $0
Total 100 $1,410,624

POTENTIAL GROSS RENTAL INCOME - AS RENOVATED UNRESTRICTED

Number of Achievable Monthly Gross Annual Gross
Unit Type Units Market Rents Rent Rent
0BR/1BA 24 $670 $16,080 $192,960
1BR/1BA 75 $920 $69,000 $828,000
Manager's Unit
2BR/1BA 1 $0 $0 $0
Total 100 $1,020,960

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Other Income
The other income category is primarily revenue generated from late charges, special service fees,
vending machines, etc. Other income reported among the comparables ranges from $38 to $416 per
unit. The Subject’s historical other income ranges from $19 to $29 per unit. The developer’s budget
estimates other income to be $192, which appears elevated based on historical data. We will
conclude to other income of $30 per unit, which is at the top of the historical data and within the
range of the comparables, but lower than developer’s budget.

Vacancy and Collection Loss

The vacancy rates in the market are generally stable. As indicated in the supply analysis, we have
concluded to a vacancy and collections loss rate of 5.0 percent in both restricted scenarios and 6.0
percent unrestricted.

EXPLANATION OF EXPENSES
Typical deductions from the calculated Effective Gross Income fall into three categories on real
property: fixed, variable, and non-operating expenses. Historical operating expenses of comparable
properties were relied upon in estimating the Subject’s operating expenses. The comparable data can
be found on the following pages.

It is important to note that the projections of income and expenses are based on the basic assumption
that the apartment complex will be managed and staffed by competent personnel and that the
property will be professionally advertised and aggressively promoted. The Subject offers 100 units
that target senior households 62 and older or disabled persons. Upon completion of renovations, the
Subject will continue to offer 100 units. The Subject’s historical fiscal year 2013 and 2014 audited
expenses as well as comparable operating expense data from 2013 to 2014 from properties located in
Atlanta serve as the basis of comparison.

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2014 2013
Novogradac Novogradac Novogradac SUBJECT SUBJECT SUBJECT
Estimates Estimates Estimates BUDGETED ACTUAL ACTUAL
As Is As Renovated Restricted As Renovated Unrestricted POST REHAB EXPENSES EXPENSES EXPENSES
Atlanta, GA Atlanta, GA Atlanta, GA Atlanta, GA Atlanta, GA Atlanta, GA
100 100 100 100 100 100
EXPENSE CATEGORY Total Per Unit Total Per Unit Total Per Unit Total Per Unit Total Per Unit Total Per Unit
OTHER INCOME $3,000 $30 $3,000 $30 $3,000 $30 $19,200 $192 $1,854 $19 $2,855 $29
MARKETING

Advertising / Screening / Credit $0 $0 $0 $0 $0 $0 $1,500 $15 $0 $0 $0 $0

SUBTOTAL $0 $0 $0 $0 $0 $0 $1,500 $15 $0 $0 $0 $0

ADMINISTRATION

Legal $100 $1 $100 $1 $100 $1 $0 $0 $141 $1 $90 $1

Audit $10,000 $100 $10,000 $100 $10,000 $100 $0 $0 $9,000 $90 $10,864 $109
Office & Other $45,000 $450 $45,000 $450 $40,000 $500 $40,000 $400 $49,254 $493 $39,398 $394
SUBTOTAL $55,100 $551 $55,100 $551 $50,100 $501 $40,000 $400 $58,395 $584 $50,352 $504

TOTAL ADMINISTRATION $55,100 $551 $55,100 $551 $50,100 $501 $41,500 $415 $58,395 $584 $50,352 $504
MAINTENANCE

Painting / Turnover / Cleaning $15,000 $150 $10,000 $100 $10,000 $100 $10,000 $100 $0 $0 $0 $0
Repairs $100,000 $1,000 $80,000 $800 $80,000 $800 $90,000 $900 $473 $5 $9,010 $90
Elevator $10,000 $100 $10,000 $100 $10,000 $100 $0 $0 $0 $0 $0 $0
Grounds $15,000 $150 $15,000 $150 $15,000 $150 $15,000 $150 $0 $0 $0 $0
Pool $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Supplies/Other $0 $0 $0 $0 $0 $0 $0 $0 $64,829 $648 $12,846 $128
SUBTOTAL $140,000 $1,400 $115,000 $1,150 $115,000 $1,150 $115,000 $1,150 $65,302 $653 $21,856 $219

OPERATING

Contracts $5,000 $50 $5,000 $50 $5,000 $50 $0 $0 $68,243 $682 $81,357 $814
Exterminating $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Security $55,000 $550 $30,000 $300 $30,000 $300 $35,000 $350 $113,785 $1,138 $103,995 $1,040
SUBTOTAL $60,000 $600 $35,000 $350 $35,000 $350 $35,000 $350 $182,028 $1,820 $185,352 $1,854

TOTAL MAINTENANCE AND OPERATING $200,000 $2,000 $150,000 $1,500 $150,000 $1,500 $150,000 $1,500 $247,330 $2,473 $207,208 $2,072
PAYROLL

On-site manager $75,000 $750 $75,000 $750 $75,000 $750 $180,000 $1,800 $137,080 $1,371 $151,102 $1,511
Other management staff $0 $0 $0 $0 $0 $0 $0 $0 $63,741 $637 $67,263 $673
Maintenance staff $50,000 $500 $50,000 $500 $50,000 $500 $0 $0 $0 $0 $0 $0
Janitorial staff $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Benefits $10,000 $100 $10,000 $100 $10,000 $100 $0 $0 $29,402 $294 $26,897 $269
Payroll taxes $15,000 $150 $15,000 $150 $15,000 $150 $0 $0 $19,909 $199 $18,022 $180
SUBTOTAL $150,000 $1,500 $150,000 $1,500 $150,000 $1,500 $180,000 $1,800 $250,132 $2,501 $263,284 $2,633

UTILITIES

Water & Sewer $50,000 $500 $45,000 $450 $45,000 $450 $50,000 $500 $49,333 $493 $0 $0
Electricity $90,000 $900 $80,000 $800 $80,000 $800 $88,000 $880 $87,250 $873 $145,663 $1,457
Gas $15,500 $155 $12,500 $125 $12,500 $125 $15,000 $150 $14,203 $142 $0 $0
Cable Television $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Trash $22,000 $220 $22,000 $220 $22,000 $220 $22,000 $220 $20,908 $209 $0 $0

SUBTOTAL $177,500 $1,775 $159,500 $1,595 $159,500 $1,595 $175,000 $1,750 $171,694 $1,717 $145,663 $1,457

MISCELLANEOUS

Insurance $35,000 $350 $35,000 $350 $35,000 $350 $35,000 $350 $39,308 $393 $42,312 $423
Real Estate Taxes / PILOT $150,738 $1,507 $167,055 $1,671 $80,381 $804 $140,000 $1,400 $318 $3 $19,784 $198
Reserves $30,000 $300 $30,000 $300 $30,000 $300 $30,000 $300 $0 $300 $0 $300
Miscellaneous $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
SUBTOTAL $215,738 $2,157 $232,055 $2,321 $145,381 $1,454 $205,000 $2,050 $39,626 $396 $62,096 $621

MANAGEMENT

SUBTOTAL $67,147 $671 $67,147 $671 $52,939 $529 $55,122 $551 $65,985 $660 $59,128 $591

TOTAL EXPENSES $865,485 $8,655 $813,802 $8,138 $707,919 $7,079 $806,622 $8,066 $833,162 $8,332 $787,731 $7,877

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2014 2013 2013 2013

CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
ACTUAL ACTUAL ACTUAL ACTUAL
EXPENSES EXPENSES EXPENSES EXPENSES
Atlanta, GA Atlanta, GA Atlanta, GA Atlanta, GA
209 250 171 305
EXPENSE CATEGORY Total Per Unit Total Per Unit Total Per Unit Total Per Unit
OTHER INCOME $64,521 $309 $9,588 $38 $25,398 $149 $126,944 $416
MARKETING

Advertising / Screening / Credit $446 $2 $18,223 $73 $13,638 $80 $33,642 $110

SUBTOTAL $446 $2 $18,223 $73 $13,638 $80 $33,642 $110

ADMINISTRATION

Legal $3,022 $14 $47,850 $191 $5,089 $30 $11,141 $37

Audit $0 $0 $12,204 $49 $7,000 $41 $0 $0
Office & Other $107,489 $514 $200,089 $800 $164,459 $962 $126,382 $414
SUBTOTAL $110,511 $529 $260,143 $1,041 $176,548 $1,032 $137,523 $451
TOTAL ADMINISTRATION $110,957 $531 $278,366 $1,113 $190,186 $1,112 $171,165 $561
MAINTENANCE

Painting / Turnover / Cleaning $14,873 $71 $25,626 $103 $46,432 $272 $5,597 $18
Repairs $213,605 $1,022 $289,680 $1,159 $80,552 $471 $4,444 $15
Elevator $9,841 $47 $0 $0 $0 $0 $0 $0
Grounds $13,541 $65 $13,439 $54 $4,371 $26 $24,417 $80
Pool $0 $0 $6,176 $25 $2,896 $17 $3,228 $11
Supplies/Other $53,073 $254 $95,759 $383 $16,844 $99 $95,210 $312
SUBTOTAL $304,933 $1,459 $430,680 $1,723 $151,095 $884 $132,896 $436
OPERATING

Contracts $0 $0 $34,794 $139 $13,700 $80 $113,686 $373

Exterminating $6,971 $33 $8,565 $34 $6,173 $36 $5,983 $20
Security $136,223 $652 $80,635 $323 $18,273 $107 $0 $0
SUBTOTAL $143,194 $685 $123,994 $496 $38,146 $223 $119,669 $392

TOTAL MAINTENANCE AND OPERATING $448,127 $2,144 $554,674 $2,219 $189,241 $1,107 $252,565 $828
PAYROLL

On-site manager $138,442 $662 $137,326 $549 $148,727 $870 $0 $0

Other management staff $0 $0 $0 $0 $0 $0 $243,272 $798
Maintenance staff $155,688 $745 $130,045 $520 $73,003 $427 $66,986 $220
Janitorial staff $0 $0 $0 $0 $0 $0 $0 $0
Benefits $54,428 $260 $94,815 $379 $0 $0 $28,437 $93
Payroll taxes $22,848 $109 $49,734 $199 $0 $0 $29,271 $96
SUBTOTAL $371,406 $1,777 $411,920 $1,648 $221,730 $1,297 $367,966 $1,206
UTILITIES

Water & Sewer $98,657 $472 $138,416 $554 $231,629 $1,355 $6,604 $22
Electricity $186,021 $890 $40,501 $162 $61,512 $360 $88,470 $290
Gas $48,095 $230 $0 $0 $28,191 $165 $0 $0
Cable Television $7,858 $38 $0 $0 $0 $0 $0 $0
Trash $0 $0 $44,465 $178 $0 $0 $9,308 $31

SUBTOTAL $340,631 $1,630 $223,382 $894 $321,332 $1,879 $104,382 $342

MISCELLANEOUS

Insurance $26,116 $125 $189,388 $758 $42,548 $249 $70,931 $233

Real Estate Taxes / PILOT $11,057 $53 $179,273 $717 $67,164 $393 $516,013 $1,692
Reserves $62,700 $300 $75,000 $300 $51,300 $300 $91,500 $300
Miscellaneous $106,367 $509 $0 $0 $0 $0 $3,505 $11
SUBTOTAL $206,240 $987 $443,661 $1,775 $161,012 $942 $681,949 $2,236
MANAGEMENT

SUBTOTAL $126,779 $607 $166,059 $664 $0 $0 $115,383 $378

TOTAL EXPENSES $1,604,140 $7,675 $2,078,062 $8,312 $1,083,501 $6,336 $1,693,410 $5,552

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General Administrative
This category includes all professional fees for items such as legal, accounting, and marketing
expenses, as well as office supplies and general and administrative costs. Historically, the Subject’s
administrative expense has ranged from $504 to $584 per unit. The developer’s budget indicates a
general administrative expense of $415 per unit. The comparable expense data ranges from $531 to
$1,113 per unit. Based on the historic and comparable data, the developer’s budget appears low. We
have concluded to $551 per unit in the as is and as renovated restricted scenarios and $501 per unit
in the as renovated unrestricted scenario. According to a Novogradac & Company LLP
comprehensive analysis of national 2012 operating expense data (Multifamily Rental Housing
Operating Expense Report, 2014), it costs on average approximately $80 more per unit for
administrative costs for low income housing tax credit property nationally than it does for a market-
rate property.

Repairs, Maintenance, and Operating

Included in this expense are normal items of repair including roof, painting, decorating, maintenance
of public areas, cleaning, etc. Historically, the Subject’s maintenance and operating expenses per unit
were reported to be $2,072 in 2013 and $2,473 in 2014. The developer’s budgeted expense post
renovation is $1,500 per unit. The comparable expense data ranges from $828 to $2,219 per unit.
The Subject will be newly renovated. We have concluded to an expense of $1,200 per unit for the as
is scenario and $1,500 per unit for both proposed scenarios, which are within the range of the
comparables and in line with the developer’s post renovation estimate.

Payroll
Payroll expenses are directly connected to the administration of the complex, including office,
maintenance and management salaries. In addition, employee benefits and employment related taxes
are included in the category. The Subject has historically had a payroll expenses ranging from
$2,501 to $2,633 per unit. The developer has estimated a payroll expense of $1,800 per unit. The
comparable expense data ranges from $1,206 to $1,777 per unit. We estimate one full-time
management staff and one full-time maintenance staff for the Subject as is and as proposed. The
following table illustrates Novoco’s staffing plan for the Subject for the as is scenario and the as
proposed (restricted/unrestricted) scenarios.

PAYROLL EXPENSE CALCULATION

As Is As Proposed
Expenses Per Unit Expense Per Unit
Manager's Salary (Full Time) $75,000 $750 $75,000 $750
Maintenance Salary (Full Time) $50,000 $500 $50,000 $500
Benefits ($5,000 per FTE) $10,000 $100 $10,000 $100
Payroll Taxes (estimated at 12%) $15,000 $150 $15,000 $150
Total Annual Payroll $150,000 $1,500 $150,000 $1,500

Utilities
The landlord will continue to be responsible for all utilities. Historically, the Subject’s utility
expenses have ranged from $1,457 to $1,717 per unit. The Subject’s budgeted expense is $1,750 per
unit. As a newly renovated development, we believe that the proposed renovations will improve

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utility efficiency. According to a June 2014 Stewards of Affordable Housing for the Future (SAHF)
article detailing the energy savings of 236 multifamily properties nationally that benefited from the
US Department of Housing and Urban Development’s Green Retrofit Program
(http://www.sahfnet.org/mfretrofitreport.html), energy efficiency upgrades averaged an 18 percent
reduction in energy [electric] consumption. Also, water consumption in the portfolio was reduced by
26 percent on average. We will conclude to utility expense of $1,760 per unit for the as is scenario
and $1,595 per unit for both proposed scenarios, which is below the developer’s budget but
considered reasonable based on the pending renovations.

Insurance
Comparable data illustrates a range from $125 to $758 per unit. The comparable with $758 per unit
in insurance appears to be a high outlier and the range excluding that comparable is $125 to $249.
The historical expenses have ranged from $393 to $423 per unit and the budgeted expense is $350
per unit. The budgeted amount is within the comparable range, and slightly below historic data. We
have estimated insurance to be at the developer’s estimate and within the range of the historical data
and concluded to $350 per unit for all scenarios.

Taxes
Real estate taxes have been previously discussed in the real estate tax analysis.

Replacement Reserves
The reserve for replacement allowance is often considered a hidden expense of ownership not
normally seen on an expense statement. Reserves must be set aside for future replacement of items
such as the roof, HVAC systems, parking area, appliances and other capital items. It is difficult to
ascertain market information for replacement reserves, as it is not a common practice in the
marketplace for properties of the Subject’s size and investment status. Underwriting requirements
for replacement reserve for existing properties typically range from $250 to $350 per unit per year,
with senior properties trending below family properties. We have used an expense of $300 per unit
for all scenarios.

Management Fees
The typical range for professionally managing an apartment property such as the Subject is 4.0 to 7.0
percent of effective gross rental income, depending upon the size and age of the apartment complex
with the latter percentage being charged to smaller or older complexes. This amount will also vary
dependent upon what is included in the management task which some would also classify as
administration. Historically, the Subject has operated with management fee of 4.6 percent. The
developer’s budget accounts for a management fee of 4.0 percent of EGI, which is slightly below the
historical data. We have concluded to a management fee of 5.5 percent for the as renovated
unrestricted scenario and a management fee of 5.0 percent for the as is and as renovated restricted
scenarios, due to higher costs associated with affordable properties.

SUMMARY
Operating expenses were estimated based upon the comparable expenses. In the following table, we
compared the total operating expenses per unit proposed by the Subject with the Subject’s historical
expenses, and the total expenses reported by comparable expense properties.

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COMPARABLE EXPENSE SUMMARY

Total Expense per Unit With Taxes Without Taxes
Developer's Post Rehab Budget $8,066 $6,666
Subject FY 2014 $8,332 $8,328
Subject FY 2013 $7,877 $7,679
Expense Comparable 1 $7,675 $7,622
Expense Comparable 2 $8,312 $7,595
Expense Comparable 3 $6,336 $5,943
Expense Comparable 4 $5,552 $3,860
Subject (As Is) $8,655 $7,147
Subject (As Proposed Restricted) $8,138 $6,467
Subject (As Proposed Unrestricted) $7,079 $6,275

Total estimated expenses as is are above the developer’s post rehabilitation budget, and above the
Subject’s historical expenses and the range of comparables. However, the historical expenses do not
account for taxes, which is included in our analysis as the Subject will no longer be tax exempt. As
proposed, the estimated expenses are within the historical range and within the range of comparable
expenses. Overall, we have placed reliance on the estimated, historic and comparable operations.

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Prospective Market Value at Loan Maturity

To quantify the income potential of the Subject, a future cash flow is employed. In this analytical
method, we estimate the present values of future cash flow expectations by applying the appropriate
terminal capitalization and discount rates. As examined earlier, we believe there is ample demand in
the income ranges targeted by the management of the Subject to support a stable cash flow. The
stability associated with the HAP contract also reduces risk. Therefore, the restrictions do not affect
the risk of the Subject investment. We based our valuation on market-derived reversion and discount
rates. It should be noted that we have only utilized the future cash flow analysis to identify the
prospective market value at loan maturity.

Income and Expense Growth Projections

The AMI in Fulton County increased 0.8 percent annually on average between 1999 and 2015. Since
2012, the AMI in the county has decreased 1.4 percent annually. The two market rate properties
reported increases ranging from two to 25 percent, while the LIHTC/mixed income comparable
properties reported rent increases ranging from zero to 43 percent. Baptist Gardens a senior LIHTC
property did not report any rent increases over the last 12 months. The senior comparable properties
reported increases of zero to 16 percent. We have increased the income by 1.0 per annum and the
expense line items by 1.5 percent per annum over the holding period. This is based upon the AMI
growth and the market-oriented rent increases of the comparable properties.

Terminal Capitalization Rate

In order to estimate the appropriate capitalization rate, we used the PWC Real Estate Investor
Survey. The following summarizes this survey:

PwC REAL ESTATE INVESTOR SURVEY

National Apartment Market
Overall Capitalization Rate - Institutional Grade Investments
Range: 3.50% - 8.00%
Average: 5.39%
Non-Institutional Grade Investments
Range: 3.75% - 12.00%
Average: 6.98%
Source: PwC Real Estate Investor Survey, Q3 2015

Additionally, we have considered the market extracted capitalization rates in the Atlanta market. As
discussed in detail later in this report, we have estimated a going in capitalization rate of 5.50 percent
for all scenarios.

The following issues impact the determination of a residual capitalization rate for the Subject:

• Anticipated annual capture of the Subject.

• The anticipated demand growth in the market associated with both local
residential and corporate growth.
• The Subject’s construction and market position.
• Local market overall rates.

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In view of the preceding data, observed rate trends, and careful consideration of the Subject’s
physical appeal and economic characteristics, a terminal rate of 8.0 percent has been used in the
restricted and unrestricted scenarios which is within the range and is considered reasonable for a
non-institutional grade property such as the Subject following renovation

This is calculated using estimated 2045 NOI, assuming linear income and expense growth. The
terminal capitalization rates were derived from the reconciled rates discussed later in this appraisal;
however, we have added 250 basis points to the reconciled capitalization rates to reach our terminal
rate. The higher rate is due to the length of the holding period prior to disposition after 2045.

VALUATION ANALYSIS
Based upon the indicated operating statements and the discount rate discussion above, we developed
a cash flow for the Subject. The following pages illustrate the cash flow and present value analysis.

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As Renovated Restricted Scenario (Years 1 through 15)

Restricted Cash Flow Value Derivation of "as complete"

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15

Fiscal Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Income

Low Income Units $1,410,624 $1,424,730 $1,438,978 $1,453,367 $1,467,901 $1,482,580 $1,497,406 $1,512,380 $1,527,504 $1,542,779 $1,558,206 $1,573,789 $1,589,526 $1,605,422 $1,621,476
Nonresidential $3,000 $3,030 $3,060 $3,091 $3,122 $3,153 $3,185 $3,216 $3,249 $3,281 $3,314 $3,347 $3,380 $3,414 $3,448

Gross Project Income $1,413,624 $1,427,760 $1,442,038 $1,456,458 $1,471,023 $1,485,733 $1,500,590 $1,515,596 $1,530,752 $1,546,060 $1,561,520 $1,577,136 $1,592,907 $1,608,836 $1,624,924

Vacancy Allowance $70,681 $71,388 $72,102 $72,823 $73,551 $74,287 $75,030 $75,780 $76,538 $77,303 $78,076 $78,857 $79,645 $80,442 $81,246

Effective Gross Income $1,342,943 $1,356,372 $1,369,936 $1,383,635 $1,397,472 $1,411,446 $1,425,561 $1,439,816 $1,454,215 $1,468,757 $1,483,444 $1,498,279 $1,513,262 $1,528,394 $1,543,678
Expenses
Administrative and Marketing $55,100 $55,927 $56,765 $57,617 $58,481 $59,358 $60,249 $61,152 $62,070 $63,001 $63,946 $64,905 $65,879 $66,867 $67,870

Maintenance and Operating $150,000 $152,250 $154,534 $156,852 $159,205 $161,593 $164,016 $166,477 $168,974 $171,508 $174,081 $176,692 $179,343 $182,033 $184,763

Payroll $150,000 $152,250 $154,534 $156,852 $159,205 $161,593 $164,016 $166,477 $168,974 $171,508 $174,081 $176,692 $179,343 $182,033 $184,763

Utilities $159,500 $161,893 $164,321 $166,786 $169,287 $171,827 $174,404 $177,020 $179,676 $182,371 $185,106 $187,883 $190,701 $193,562 $196,465
Insurance $35,000 $35,525 $36,058 $36,599 $37,148 $37,705 $38,271 $38,845 $39,427 $40,019 $40,619 $41,228 $41,847 $42,474 $43,111

Real Estate Taxes $167,055 $169,560 $172,104 $174,685 $177,306 $179,965 $182,665 $185,405 $188,186 $191,009 $193,874 $196,782 $199,734 $202,730 $205,771
Replacement Reserve $30,000 $30,450 $30,907 $31,370 $31,841 $32,319 $32,803 $33,295 $33,795 $34,302 $34,816 $35,338 $35,869 $36,407 $36,953

Management Fee $67,147 $67,819 $68,497 $69,182 $69,874 $70,572 $71,278 $71,991 $72,711 $73,438 $74,172 $74,914 $75,663 $76,420 $77,184

Total Expenses $813,802 $825,673 $837,719 $849,942 $862,346 $874,931 $887,703 $900,662 $913,812 $927,155 $940,695 $954,435 $968,377 $982,524 $996,880

Net Operating Income $529,141 $530,699 $532,217 $533,693 $535,126 $536,515 $537,858 $539,155 $540,403 $541,602 $542,749 $543,844 $544,885 $545,870 $546,798

Reversion Calculation

Terminal Capitalization Rate 8.00% 8.0%

Sales Costs 3.0% 3.0%

Net Sales Proceeds $6,600,000

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As Renovated Restricted Scenario (Years 16 through 30)

Restricted Cash Flow Value Derivation of "as complete"

Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30

Fiscal Year 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044
Income

Low Income Units $1,637,691 $1,654,068 $1,670,608 $1,687,314 $1,704,187 $1,721,229 $1,738,442 $1,755,826 $1,773,384 $1,791,118 $1,809,029 $1,827,120 $1,845,391 $1,863,845 $1,882,483
Nonresidential $3,483 $3,518 $3,553 $3,588 $3,624 $3,661 $3,697 $3,734 $3,771 $3,809 $3,847 $3,886 $3,925 $3,964 $4,004

Gross Project Income $1,641,174 $1,657,585 $1,674,161 $1,690,903 $1,707,812 $1,724,890 $1,742,139 $1,759,560 $1,777,156 $1,794,927 $1,812,877 $1,831,005 $1,849,315 $1,867,809 $1,886,487

Vacancy Allowance $82,059 $82,879 $83,708 $84,545 $85,391 $86,244 $87,107 $87,978 $88,858 $89,746 $90,644 $91,550 $92,466 $93,390 $94,324

Effective Gross Income $1,559,115 $1,574,706 $1,590,453 $1,606,358 $1,622,421 $1,638,645 $1,655,032 $1,671,582 $1,688,298 $1,705,181 $1,722,233 $1,739,455 $1,756,850 $1,774,418 $1,792,162
Expenses
Administrative and Marketing $68,888 $69,921 $70,970 $72,034 $73,115 $74,212 $75,325 $76,455 $77,602 $78,766 $79,947 $81,146 $82,363 $83,599 $84,853

Maintenance and Operating $187,535 $190,348 $193,203 $196,101 $199,043 $202,028 $205,059 $208,135 $211,257 $214,425 $217,642 $220,906 $224,220 $227,583 $230,997

Payroll $187,535 $190,348 $193,203 $196,101 $199,043 $202,028 $205,059 $208,135 $211,257 $214,425 $217,642 $220,906 $224,220 $227,583 $230,997

Utilities $199,412 $202,403 $205,439 $208,521 $211,649 $214,823 $218,046 $221,316 $224,636 $228,006 $231,426 $234,897 $238,421 $241,997 $245,627
Insurance $43,758 $44,414 $45,081 $45,757 $46,443 $47,140 $47,847 $48,565 $49,293 $50,033 $50,783 $51,545 $52,318 $53,103 $53,899

Real Estate Taxes $208,857 $211,990 $215,170 $218,397 $221,673 $224,998 $228,373 $231,799 $235,276 $238,805 $242,387 $246,023 $249,713 $253,459 $257,261
Replacement Reserve $37,507 $38,070 $38,641 $39,220 $39,809 $40,406 $41,012 $41,627 $42,251 $42,885 $43,528 $44,181 $44,844 $45,517 $46,199

Management Fee $77,956 $78,735 $79,523 $80,318 $81,121 $81,932 $82,752 $83,579 $84,415 $85,259 $86,112 $86,973 $87,842 $88,721 $89,608

Total Expenses $1,011,447 $1,026,229 $1,041,229 $1,056,450 $1,071,895 $1,087,568 $1,103,472 $1,119,610 $1,135,986 $1,152,604 $1,169,467 $1,186,578 $1,203,942 $1,221,562 $1,239,442

Net Operating Income $547,668 $548,477 $549,224 $549,908 $550,526 $551,078 $551,560 $551,972 $552,312 $552,577 $552,766 $552,877 $552,908 $552,856 $552,721

Reversion Calculation

Terminal Capitalization Rate 8.0% 8.0% 8.0%

Sales Costs 3.0% 3.0% 3.0%

Net Sales Proceeds $6,700,000 $6,700,000 $6,700,000

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As Renovated Unrestricted Scenario (Years 1 through 15)

Market Cash Flow Value Derivation of "as complete"

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Fiscal Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Income

Low Income Units $1,020,960 $1,031,170 $1,041,481 $1,051,896 $1,062,415 $1,073,039 $1,083,770 $1,094,607 $1,105,553 $1,116,609 $1,127,775 $1,139,053 $1,150,443 $1,161,948 $1,173,567
Nonresidential $3,000 $3,030 $3,060 $3,091 $3,122 $3,153 $3,185 $3,216 $3,249 $3,281 $3,314 $3,347 $3,380 $3,414 $3,448
Gross Project Income $1,023,960 $1,034,200 $1,044,542 $1,054,987 $1,065,537 $1,076,192 $1,086,954 $1,097,824 $1,108,802 $1,119,890 $1,131,089 $1,142,400 $1,153,824 $1,165,362 $1,177,016
Vacancy Allowance $61,438 $62,052 $62,672 $63,299 $63,932 $64,572 $65,217 $65,869 $66,528 $67,193 $67,865 $68,544 $69,229 $69,922 $70,621
Effective Gross Income $962,522 $972,148 $981,869 $991,688 $1,001,605 $1,011,621 $1,021,737 $1,031,954 $1,042,274 $1,052,697 $1,063,224 $1,073,856 $1,084,594 $1,095,440 $1,106,395

Expenses
Administrative and Marketing $50,100 $50,852 $51,614 $52,388 $53,174 $53,972 $54,782 $55,603 $56,437 $57,284 $58,143 $59,015 $59,900 $60,799 $61,711
Maintenance and Operating $150,000 $152,250 $154,534 $156,852 $159,205 $161,593 $164,016 $166,477 $168,974 $171,508 $174,081 $176,692 $179,343 $182,033 $184,763

Payroll $150,000 $152,250 $154,534 $156,852 $159,205 $161,593 $164,016 $166,477 $168,974 $171,508 $174,081 $176,692 $179,343 $182,033 $184,763
Utilities $159,500 $161,893 $164,321 $166,786 $169,287 $171,827 $174,404 $177,020 $179,676 $182,371 $185,106 $187,883 $190,701 $193,562 $196,465

Insurance $35,000 $35,525 $36,058 $36,599 $37,148 $37,705 $38,271 $38,845 $39,427 $40,019 $40,619 $41,228 $41,847 $42,474 $43,111
Real Estate Taxes $80,381 $81,586 $82,810 $84,052 $85,313 $86,593 $87,892 $89,210 $90,548 $91,906 $93,285 $94,684 $96,104 $97,546 $99,009
Replacement Reserve $30,000 $30,450 $30,907 $31,370 $31,841 $32,319 $32,803 $33,295 $33,795 $34,302 $34,816 $35,338 $35,869 $36,407 $36,953

Management Fee $52,939 $48,607 $49,093 $49,584 $50,080 $50,581 $51,087 $51,598 $52,114 $52,635 $53,161 $53,693 $54,230 $54,772 $55,320
Total Expenses $707,919 $713,413 $723,871 $734,483 $745,253 $756,181 $767,271 $778,525 $789,944 $801,533 $813,293 $825,226 $837,336 $849,625 $862,096

Net Operating Income $254,603 $258,735 $257,998 $257,204 $256,352 $255,440 $254,466 $253,430 $252,329 $251,164 $249,931 $248,629 $247,258 $245,815 $244,299

Reversion Calculation
Terminal Capitalization Rate 8.00% 8.0%
Sales Costs 3.0% 3.0%
Net Sales Proceeds $3,000,000

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As Renovated Unrestricted Scenario (Years 16 through 30)

Market Cash Flow Value Derivation of "as complete"

Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30
Fiscal Year 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044
Income

Low Income Units $1,185,303 $1,197,156 $1,209,127 $1,221,219 $1,233,431 $1,245,765 $1,258,223 $1,270,805 $1,283,513 $1,296,348 $1,309,312 $1,322,405 $1,335,629 $1,348,985 $1,362,475
Nonresidential $3,483 $3,518 $3,553 $3,588 $3,624 $3,661 $3,697 $3,734 $3,771 $3,809 $3,847 $3,886 $3,925 $3,964 $4,004
Gross Project Income $1,188,786 $1,200,674 $1,212,680 $1,224,807 $1,237,055 $1,249,426 $1,261,920 $1,274,539 $1,287,285 $1,300,157 $1,313,159 $1,326,291 $1,339,554 $1,352,949 $1,366,479
Vacancy Allowance $71,327 $72,040 $72,761 $73,488 $74,223 $74,966 $75,715 $76,472 $77,237 $78,009 $78,790 $79,577 $80,373 $81,177 $81,989
Effective Gross Income $1,117,459 $1,128,633 $1,139,920 $1,151,319 $1,162,832 $1,174,460 $1,186,205 $1,198,067 $1,210,048 $1,222,148 $1,234,370 $1,246,713 $1,259,180 $1,271,772 $1,284,490

Expenses
Administrative and Marketing $62,637 $63,576 $64,530 $65,498 $66,480 $67,477 $68,490 $69,517 $70,560 $71,618 $72,692 $73,783 $74,889 $76,013 $77,153
Maintenance and Operating $187,535 $190,348 $193,203 $196,101 $199,043 $202,028 $205,059 $208,135 $211,257 $214,425 $217,642 $220,906 $224,220 $227,583 $230,997

Payroll $187,535 $190,348 $193,203 $196,101 $199,043 $202,028 $205,059 $208,135 $211,257 $214,425 $217,642 $220,906 $224,220 $227,583 $230,997
Utilities $199,412 $202,403 $205,439 $208,521 $211,649 $214,823 $218,046 $221,316 $224,636 $228,006 $231,426 $234,897 $238,421 $241,997 $245,627

Insurance $43,758 $44,414 $45,081 $45,757 $46,443 $47,140 $47,847 $48,565 $49,293 $50,033 $50,783 $51,545 $52,318 $53,103 $53,899
Real Estate Taxes $100,494 $102,002 $103,532 $105,085 $106,661 $108,261 $109,885 $111,533 $113,206 $114,904 $116,628 $118,377 $120,153 $121,955 $123,784
Replacement Reserve $37,507 $38,070 $38,641 $39,220 $39,809 $40,406 $41,012 $41,627 $42,251 $42,885 $43,528 $44,181 $44,844 $45,517 $46,199

Management Fee $55,873 $56,432 $56,996 $57,566 $58,142 $58,723 $59,310 $59,903 $60,502 $61,107 $61,718 $62,336 $62,959 $63,589 $64,224
Total Expenses $874,751 $887,592 $900,624 $913,849 $927,268 $940,887 $954,707 $968,731 $982,962 $997,404 $1,012,059 $1,026,932 $1,042,024 $1,057,340 $1,072,882

Net Operating Income $242,708 $241,041 $239,295 $237,470 $235,563 $233,573 $231,498 $229,336 $227,086 $224,744 $222,310 $219,781 $217,156 $214,433 $211,608

Reversion Calculation
Terminal Capitalization Rate 8.0% 8.0% 8.0%
Sales Costs 3.0% 3.0% 3.0%
Net Sales Proceeds $2,900,000 $2,700,000 $2,600,000

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Conclusion

Prospective Market Value as Restricted 30 years (Loan Maturity),

The prospective market value at 30 years (loan maturity) of the Subject’s fee simple interest, subject
to the rental restrictions in the year 2045, as of October 30, 2015, is:

SIX MILLION SEVEN HUNDRED THOUSAND DOLLARS

($6,700,000)

Prospective Market Value as Renovated Unrestricted at 30 years (Loan Maturity)

The hypothetical prospective market value at 30 years (loan maturity) of the Subject’s fee simple
interest, as an unrestricted property in the year 2045, as of October 30, 2015, is:

TWO MILLION SIX HUNDRED THOUSAND DOLLARS

($2,600,000)

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DIRECT CAPITALIZATION
We have provided an estimate of the Subject’s prospective value assuming completion and
stabilization as of the date of value for the restricted rate scenario. Please see the assumptions and
limiting conditions regarding hypothetical conditions. To quantify the income potential of the
Subject, a direct capitalization of a stabilized cash flow is employed. In this analytical method, we
estimate the present values of future cash flow expectations by applying the appropriate overall
capitalization rate to the forecast net operating income.

Market Extraction
The table below summarizes the recent improved sales of the most comparable properties that were
used in our market extraction analysis:
SALES COMPARISON
Effective
Gross Income Overall
Property City, State Year Built Sale Date Sale Price # of Units Price / Unit Multiplier Rate
1 Uptown Buckhead Atlanta, GA 1989 Mar-15 $32,500,000 216 $150,463 10.6 5.1%
2 Paces Park 250 Decatur, GA 2000 Dec-14 $31,500,000 250 $126,000 10.4 5.7%
3 Bell at Peachtree Atlanta, GA 1984/2009 Nov-14 $45,600,000 234 $194,872 12.2 5.1%
4 Defoors Crossing Atlanta, GA 1991 Sep-14 $4,610,000 60 $76,833 7.7 5.1%
5 The Ivy at Buckhead Atlanta, GA 1991 May-14 $36,500,100 296 $123,311 10.1 5.0%
Average $30,142,020 211 $134,296 10.2 5.2%

The sales illustrate a range of overall rates from 5.0 to 5.7 percent, and the average is 5.2 percent.
The properties are all stabilized and represent typical market transactions for multifamily market rate
properties in the market area. The Subject is most comparable to Sales 1, 3, and 4 in terms of
condition while Sales 1 and 2 represent the most recent sales.

Following the most recent national recession, properties operating with project-based rental
assistance located in larger markets began to more closely track overall capitalization rates.
However, rent-assisted properties located in smaller, tertiary markets continued to offer an advantage
relative to the overall market with regard to capitalization rates. This is due to the stability offered by
rent-assisted properties in areas with lower overall rental demand. As a result of the Subject’s
location in a large market and size, we believe that the reconciled capitalization rate for the restricted
and unrestricted value would be approximately 30 basis points higher than an unrestricted
capitalization rate based upon the conventional sales comparables of 5.2 percent.

Therefore, we have estimated the capitalization rate of 5.50 percent. This capitalization rate is
supported by the range of the comparables and the PwC published findings, which are illustrated
following:

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The PwC Real Estate Investor Survey

The PwC Real Estate Investor Survey tracks capitalization rates utilized by national investors in
commercial and multifamily real estate. The following summarizes the information for the national
multifamily housing market:

PwC REAL ESTATE INVESTOR SURVEY

National Apartment Market
Overall Capitalization Rate - Institutional Grade Investments
Range: 3.50% - 8.00%
Average: 5.39%
Non-Institutional Grade Investments
Range: 3.75% - 12.00%
Average: 6.98%
Source: PwC Real Estate Investor Survey, Q3 2015

The PwC Real Estate Investor Survey defines “Institutional – Grade” real estate as real property
investments that are sought out by institutional buyers and have the capacity to meet generally
prevalent institutional investment criteria 2. Typical “Institutional – Grade” apartment properties are
newly constructed, well amenitized, market rate properties in urban or suburban locations. Rarely
could subsidized properties, either new construction or acquisition/rehabilitation, be considered
institutional grade real estate. Therefore, for our purpose, the Non-Institutional Grade capitalization
rate is most relevant; this is currently 159 basis points higher than the Institutional Grade rate on
average. However, local market conditions have significant weight when viewing capitalization
rates.

2
PwC Real Estate Investor Survey

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PwC Real Estate Investor Survey - National Apartment Market

Overall Capitalization Rate - Institutional Grade Investments
Quarter Cap Rate Change (bps) Quarter Cap Rate Change (bps)
1Q03 8.14 - 3Q09 7.84 0.35
2Q03 7.92 -0.22 4Q09 8.03 0.19
3Q03 7.61 -0.31 1Q10 7.85 -0.18
4Q03 7.45 -0.16 2Q10 7.68 -0.17
1Q04 7.25 -0.20 3Q10 7.12 -0.56
2Q04 7.13 -0.12 4Q10 6.51 -0.61
3Q04 7.05 -0.08 1Q11 6.29 -0.22
4Q04 7.01 -0.04 2Q11 6.10 -0.19
1Q05 6.74 -0.27 3Q11 5.98 -0.12
2Q05 6.52 -0.22 4Q11 5.80 -0.18
3Q05 6.28 -0.24 1Q12 5.83 0.03
4Q05 6.13 -0.15 2Q12 5.76 -0.07
1Q06 6.07 -0.06 3Q12 5.74 -0.02
2Q06 6.01 -0.06 4Q12 5.72 -0.02
3Q06 5.98 -0.03 1Q13 5.73 0.01
4Q06 5.97 -0.01 2Q13 5.70 -0.03
1Q07 5.89 -0.08 3Q13 5.61 -0.09
2Q07 5.80 -0.09 4Q13 5.80 0.19
3Q07 5.76 -0.04 1Q14 5.79 -0.01
4Q07 5.75 -0.01 2Q14 5.59 -0.20
1Q08 5.79 0.04 3Q14 5.51 -0.08
2Q08 5.75 -0.04 4Q14 5.36 -0.15
3Q08 5.86 0.11 1Q15 5.36 0.00
4Q08 6.13 0.27 2Q15 5.30 -0.06
1Q09 6.88 0.75 3Q15 5.39 0.09
2Q09 7.49 0.61
Source: PwC Real Estate Investor Survey, Q3 2015

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As the graph indicates, the downward trend through early 2007 is clear. The average capitalization
rate decreased 225 basis points over a four-year period from 2003 to 2007. However, capitalization
rates stabilized in 2007 and began a steep increase in late 2008. They appear to have peaked in the
fourth quarter of 2009 and have generally decreased through the first quarter of 2015 with the
exception of an increase from the third quarter of 2013 through the fourth quarter of 2013.
Capitalization rates as of the third quarter of 2015 have exhibited a decrease over capitalization rates
from the third quarter of 2014. Overall, we have estimated a capitalization rate of 5.5 percent, which
is within the range of the Non-Institutional Grade capitalization rates.

REIS
Capitalization rate data from REIS.

Source: Reis.com

Debt Coverage Ratio

The debt coverage ratio (DCR) is frequently used as a measure of risk by lenders wishing to measure
the margin of safety and by purchasers analyzing leveraged property. It can be applied to test the
reasonableness of a project in relation to lender loan specifications. Lenders typically use the debt
coverage ratio as a quick test to determine project feasibility. The debt coverage ratio has two basic
components: the properties net operating income and its annual debt service (represented by the
mortgage constant).
The ratio used is:
Net Operating Income/ Annual Debt Service = Debt Coverage Ratio
One procedure by which the debt coverage ratio can be used to estimate the overall capitalization
rate is by multiplying the debt coverage ratio by the mortgage constant and the lender required loan-
to-value ratio. The indicated formula is:

RO = D.C.R x RM x M

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Where:
RO = Overall Capitalization Rate
D.C.R = Debt Coverage Ratio
RM = Mortgage Constant
M = Loan-to-Value Ratio
Band of Investment
This method involves deriving the property’s equity dividend rate from the improved comparable
sales and applying it, at current mortgage rate and terms, to estimate the value of the income stream.

The formula is:

RO = M x RM + (1-M) x RE
Where:
RO = Overall Capitalization Rate
M = Loan-to-Value Ratio
RM = Mortgage Constant
RE = Equity Dividend
The Mortgage Constant (RM) is based upon the calculated interest rate from the ten year treasury.
The equity dividend rate RE, also known as the cash on cash return rate, is the rate of return that an
equity investor expects on an annual basis. It is a component of the overall return requirement. The
equity dividend rate is impacted by the returns on other similar investments as well as the risk profile
of the investment market and finally the expectation for future value growth. The equity dividend
rate is lower in cases where the market is strong and there is a perception of lower risk related to the
return of the investment. Further, the dividend rate is lower in markets that have greater expectation
for capital appreciation. In some cases we have seen dividend rates that are zero or even negative,
suggesting that buyers are willing to forego an annual return because of a larger expectation of
capital appreciation. Of course the converse is also true. Generally we see equity dividend rates
ranging from 5.0 to 12.0 percent. In this case, given the Subject’s location and current market
conditions, an equity dividend estimate of 5.0 percent is considered reasonable in this analysis.

The following table summarizes calculations for the two previously discussed methods of
capitalization rate derivation. We will utilize a market oriented interest rate of 5.0 percent. Based on
our work files, the typical amortization period is 25 to 30 years and the loan to value ratio is 70 to 80
percent with interest rates between 4.00 and 6.00 percent. Therefore, we believe a 4.52 percent
interest rate with a 30-year amortization period and a loan to value of 80 percent is reasonable. The
following table illustrates the band of investment for the Subject property.

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CAPITALIZATION RATE DERIVATION

Inputs and Assumptions Interest Rate Calculations
DCR 1.15 Treasury Bond Basis*
Rm 0.06 10 Year T Bond Rate (11/2015) 2.27%
Interest (per annum) 4.52% Interest rate spread 225
Amortization (years) 30 Interest Rate (per annum, rounded) 4.52%
M 80%
Re 5.0%

Debt Coverage Ratio

Ro = DCR X Rm X M
5.61% = 1.15 X 0.06 X 80%
Band of Investment
Ro = (M X Rm) + ((1-M) X Re)
5.88% 80% X 0.06 + 20% X 5%
* Source: Bloomberg.com, 11/2015

Conclusion of Overall Rate Selection

After reviewing the appropriate methods for developing an overall rate, the following ranges of
overall capitalization rates are indicated:

CAPITALIZATION RATE SELECTION SUMMARY

Method Indicated Rate
Market Extraction 5.50%
PwC Survey 5.50%
Debt Coverage Ratio 5.61%
Band of Investment 5.88%
Reis 6.00%

The following issues impact the determination of a capitalization rate for the Subject:

• Current market health

• Existing competition
• Subject’s construction type and tenancy and physical appeal
• The anticipated demand growth in the Subject sub-market
• The demand growth expected over the next three years
• Local market overall rates

The four approaches indicate a range from 5.50 to 6.00 percent. We have reconciled to a 5.50
percent capitalization rate for the restricted and unrestricted scenarios, based primarily upon the
market-extracted rates. A summary of the direct capitalization analysis for these scenarios can be
found on the following pages.

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DIRECT CAPITALIZATION TECHNIQUE - YEAR ONE OPERATING STATEMENT

EXPENSE ANALYSIS
Operating Revenues
As Is Restricted As Renovated Restricted As Renovated Unrestricted
As Is Unit As Proposed
Apartment Rentals Mix Unit Mix Rent Total Revenue Rent Total Revenue Rent Total Revenue
0BR/1BA 24 24 $1,123 $323,424 $1,123 $323,424 $670 $192,960
1BR/1BA 75 75 $1,208 $1,087,200 $1,208 $1,087,200 $920 $828,000
Manager's Unit 1 1 - - - - - -
Total Potential Rental Income 100 100 $1,176 $1,410,624 $1,176 $1,410,624 $851 $1,020,960
Other Income
Miscellaneous $30 $3,000 $30 $3,000 $30 $3,000
Residential Potential Revenues $14,136 $1,413,624 $14,136 $1,413,624 $10,240 $1,023,960
Vacancy $707 $70,681 $707 $70,681 $614 $61,438
Vacancy and Collections Loss Percentage 5% 5% 6%
Effective Gross Income $13,429 $1,342,943 $13,429 $1,342,943 $9,625 $962,522

Operating Expenses
As Is Restricted As Renovated Restricted As Renovated Unrestricted
Administration and Marketing $551 $55,100 $551 $55,100 $501 $50,100
Maintenance and Operating $2,000 $200,000 $1,500 $150,000 $1,500 $150,000
Payroll $1,500 $150,000 $1,500 $150,000 $1,500 $150,000
Utilities $1,775 $177,500 $1,595 $159,500 $1,595 $159,500
Property & Liability Insurance $350 $35,000 $350 $35,000 $350 $35,000
Real Estate and Other Taxes $1,507 $150,738 $1,671 $167,055 $804 $80,381
Replacement Reserves $300 $30,000 $300 $30,000 $300 $30,000
Management Fee 5.0% 5.0% 5.5% $671 $67,147 $671 $67,147 $529 $52,939
Total Operating Expenses $8,655 $865,485 $8,138 $813,802 $7,079 $707,919
Expenses as a ratio of EGI 64.4% 60.6% 73.5%

Valuation
As Is Restricted As Renovated Restricted As Renovated Unrestricted
Net Operating Income $4,775 $477,458 $5,291 $529,141 $2,546 $254,603
Capitalization Rate 5.50% 5.50% 5.50%
Indicated Value "rounded" $8,700,000 $9,600,000 $4,600,000

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Conclusion
The following table summarizes the findings of the previously conducted direct capitalization
analysis.

DIRECT CAPITALIZATION ANALYSIS - "AS IS"

Scenario Cap Rate Net Operating Income Indicated Value (Rounded)
As Is 5.50% $477,458 $8,700,000

DIRECT CAPITALIZATION ANALYSIS - "AS COMPLETE AND STABILIZED"

Scenario Cap Rate Net Operating Income Indicated Value (Rounded)
As Renovated Restricted 5.50% $529,141 $9,600,000
As Renovated Unrestricted 5.50% $254,603 $4,600,000

The Subject’s market value of the real estate “As Is”, via the Income Capitalization Approach, as of
October 30, 2015 is:

EIGHT MILLION SEVEN HUNDRED THOUSAND DOLLARS

($8,700,000)

The Subject’s hypothetical market value of the real estate assuming Section 8 contract rents “As
Complete and Stabilized”, via the Income Capitalization Approach, as of October 30, 2015 is:

NINE MILLION SIX HUNDRED THOUSAND DOLLARS

($9,600,000)

The Subject’s hypothetical market value of the real estate assuming the achievable unrestricted rents
“As Complete and Stabilized”, via the Income Capitalization Approach, as of October 30, 2015 is:

FOUR MILLION SIX HUNDRED THOUSAND DOLLARS

($4,600,000)

Please refer to the assumptions and limiting conditions regarding the valuation and hypothetical
value conclusions.

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Below Market Debt

The developer has indicated that the only source of debt will be a first mortgage with an interest rate
of 4.95 percent and 35-year term. Generally, the shorter the term, the lower the interest rate. As
such, the rate and terms are market-oriented; therefore, there is no favorable financing value.

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VALUATION - TAX CREDIT EQUITY

We were asked to value the federal tax credits. A 10-year federal tax credit incentive program
encumbers the Subject. The Subject is a proposed multifamily LIHTC and market rate property. We
were asked to value the tax credits.
As an incentive to participate in the low-income housing program the developer is awarded “tax
credits” which provide the incentive to construct and rehabilitate affordable housing in otherwise
financially infeasible markets. The tax credit program was created by the Internal Revenue Code
Section 42, and is a Federal tax program administered by the states. The developer expects to
receive a total federal LIHTC allocation of $4,970,997 with a limited partner share of 99.99 percent,
which totals an annual LIHTC allocation of $497,049. A Letter of Intent (LOI) has not yet been
finalized; however, the developer has received verbal pricing estimate of $1.065 per federal credit.

Valuation of LIHTC is typically done by a sales approach. The industry typically values and analyzes
the LIHTC transaction on a dollar per credit basis. Novogradac & Company LLP conducts monthly
surveys in which we contact developers, syndicators and consultants involved in LIHTC transactions
to obtain information on recent LIHTC pricing. The following graph illustrates LIHTC pricing
trends. The graph illustrates the average price achieved on a monthly basis for the projects included
in our survey.

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As the previous table illustrates, tax credit raise rates in recent months have ranged from $0.90 to
$1.10 per credit with an average of $0.99 per credit. The pricing above reflects transactions similar to
the Subject. As part of the yield analysis and pricing determination investors consider, among other
factors, construction risk, lease-up risk and timing of the credits. The Subject will be located in
Atlanta, GA, which is a major market, offer Section 8 subsidy, and will be substantially renovated
with LIHTC equity. Tax credit pricing has trended upward over the past several months and has
settled in the upper $0.90s to lower $1.00 range. The developer’s budget is $1.065 per federal credit.
We believe that the developer’s estimate range is reasonable and have concluded to $1.065 per
federal credit.

The developer has also indicated that the project will receive a total state credit allocation of
$4,477,299. The following table illustrates Georgia state tax credit pricing from 2012 to 2015.

GEORGIA STATE TAX CREDIT PRICING

Closing Date Price Per Credit Location Type
2015 0.52 Fort Valley Acquisition/Rehabilitation
2013 $0.30 Griffin New Construction
2013 $0.25 Auburn New Construction
2012 $0.25 Ellijay New Construction
2012 $0.25 Cairo Acquisition/Rehabilitation
2012 $0.26 Locust Grove New Construction
2012 $0.34 Atlanta Acquisition/Rehabilitation
2012 $0.34 Union City Acquisition/Rehabilitation

According to recent data, the Georgia state credit pricing ranged from $0.25 to $0.52 between 2012
and 2015. However, we also contacted two Georgia state LIHTC investors. Our conversations
indicated a typical range of $0.45 to $0.50 for 2015. The developer’s budget indicates $0.52 per
credit. The developer’s estimate is high, but in line with both our interviews and the two quotes the
client reportedly has received. Therefore, we conclude to $0.52 per Georgia state credit, consistent
with the most recent data.

FEDERAL AND STATE TAX CREDIT VALUE

Federal State Total
Total credits 4,970,997 4,477,299 -
Partner Share 99.99% 99.99% -
Price $1.065 $0.52 $1.59
Total Value $5,293,583 $2,327,963 $7,621,546

We believe a price of approximately $1.065 per credit for federal tax credits and $0.52 for state tax
credits is reasonable. This rate results in a total tax credit value of approximately $7,600,000
(rounded). This value is effective as of October 30, 2015.

Total LIHTC Value: Combined Federal and State

SEVEN MILLION SIX HUNDRED THOUSAND DOLLARS
($7,600,000)

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Please refer to the assumptions and limiting conditions regarding the valuation and hypothetical
value conclusions.

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SALES COMPARISON APPROACH

The sales comparison approach to value is a process of comparing market data; that is, the price paid
for similar properties, prices asked by owners, and offers made by prospective purchasers willing to
buy or lease. Market data is good evidence of value because it represents the actions of users and
investors. The sales comparison approach is based on the principle of substitution, which states that
a prudent investor would not pay more to buy or rent a property than it will cost them to buy or rent a
comparable substitute. The sales comparison approach recognizes that the typical buyer will
compare asking prices and work through the most advantageous deal available. In the sales
comparison approach, the appraisers are observers of the buyer’s actions. The buyer is comparing
those properties that constitute the market for a given type and class.

The following pages supply the analyzed sale data and will conclude with a value estimate.

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Comparable Sales Map

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Comparable Sale 1

Name: Uptown Buckhead

Location: 3707 Roswell Road NE
Atlanta, GA

Buyer: Resource Real Estate Opportunity REIT II

Seller: The Shoptaw Group
Sale Date: Mar-15
Sale Price: $32,500,000

Financing: Conventional
Number of Units: 216
Year Built: 1989
Site: 5.35 Acres

Units of Comparison:
Effective Gross Income: $3,056,400
EGIM 10.6
Total Expenses: $1,296,000
Net Operating Income: $1,657,500
Net Operating Income per Unit: $7,674
Overall Rate with Reserves: 5.10%
Sale Price per Unit: $150,463

Comments:

This property offers one and two-bedroom units, which range in size from 550
to 950 square feet. The property offers 214 surface parking spaces, air
conditioning, balconies, business center, ceiling fans, dishwashers, laundry
facility, swimming pool, on-site manager, oven, and refrigerators. At the time
of sale the property was 92 percent occupied. The listing broker confirmed the
sales date, sales price, and proforma cap rate. Expenses were estimated by
Novogradac at $6,000 per unit.

Verification:

Costar, Fulton County Assessor, JLL Broker (David Gutting)

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Comparable Sale 2

Name: Paces Park 250

Location: 100 Paces Park Drive
Decatur, GA

Buyer: Inwood Holdings, LLC

Seller: General Electric Capital Corporation
Sale Date: Dec-14
Sale Price: $31,500,000

Financing: Conventional
Number of Units: 250
Year Built: 2000
Site: 10.49 Acres

Units of Comparison:
Effective Gross Income: $3,029,750
EGIM 10.4
Total Expenses: $1,500,000
Net Operating Income: $1,779,750
Net Operating Income per Unit: $7,119
Overall Rate with Reserves: 5.7%
Sale Price per Unit: $126,000

Comments:

This property offers one, two, and three-bedroom units and was reported 97 percent
occupied and in good condition at the time of the sale. The broker confirmed the sale
price, date, and capitalization rate. Expenses were estimated by Novogradac at $6,000
per unit.

Verification: Costar, Broker- Chris Spain of Cushman & Wakefield (404-853-5234)

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Comparable Sale 3

Name: Bell at Peachtree

Location: 2460 Peachtree Rd NW
Atlanta, GA

Buyer: WRPV XII Peachtree Battle Atlanta, LLC

Seller: Bennington Properties, LLC
Sale Date: Nov-14
Sale Price: $45,600,000

Financing: Conventional
Number of Units: 234
Year Built: 1984/2009
Site: 2.98 Acres

Units of Comparison:
Effective Gross Income: $3,729,600
EGIM 12.2
Total Expenses: $1,404,000
Net Operating Income: $2,325,600
Net Operating Income per Unit: $9,938
Overall Rate with Reserves: 5.1%
Sale Price per Unit: $194,871.79

Comments:

This high-rise property includes one and two-bedroom units ranging in size from 815 to
1,260 square feet. The property was 98 percent occupied at the time of sale. The broker
confirmed the sale price, sales date, and capitalization rate. We estimated expenses at
$6,000 per unit.

Verification: Costar, Fulton County Assessor, JLL Broker (David Gutting)

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Comparable Sale 4

Name: Defoors Crossing

Location: 2100 Defoors Ferry Road
Atlanta, GA

Buyer: Global Asset Alternatives

Seller: Habersham Properties
Sale Date: Sep-14
Sale Price: $4,610,000

Financing: Conventional
Number of Units: 60
Year Built: 1991
Site: 1.49 Acres

Units of Comparison:
Effective Gross Income: $595,100
EGIM 7.7
Total Expenses: $360,000
Net Operating Income: $235,110
Net Operating Income per Unit: $3,919
Overall Rate with Reserves: 5.1%
Sale Price per Unit: $76,833

Comments:

DeFoors Crossing offers one and two-bedroom units that range in square
footage from 525 to 1,000. The property was 100 percent occupied at the time
of the sale. The property offers air conditioning, balconies, a pool, on-site
management, walk-in closets, and washers/dryers. Novogradac estimated
expenses at $6,000 per unit. The listing agent confirmed the sales date, price,
and cap rate.

Verification: Costar, Multi Housing Advisors, LLC- Taylor Averitt

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Comparable Sale 5

Name: The Ivy at Buckhead

Location: 740 Sidney Marcus Blvd
Atlanta, GA

Buyer: Arenda Capital Management LLC

Seller: The Carlyle Group
Sale Date: May-14
Sale Price: $36,500,100

Financing: Conventional
Number of Units: 296
Year Built: 1991
Site: 8.48 Acres

Units of Comparison:
Effective Gross Income: $3,601,005
EGIM 10.1
Total Expenses: $1,776,000
Net Operating Income: $1,825,005
Net Operating Income per Unit: $6,166
Overall Rate with Reserves: 5.0%
Sale Price per Unit: $123,311

Comments:

The property offers one and two-bedroom units and was 98 percent occupied at
the time of the sale. The units range in size from 635 to 1,130 square feet. The
property offers patios, on-site management, a swimming pool, bocce ball court,
fitness center, grilling area, and a clubhouse. The listing broker confirmed the
sales date, sales price, and proforma cap rate. Expenses were estimated by
Novogradac at $6,000 per unit.

Verification: Costar, Fulton County Assessor, JLL Broker (David Gutting)

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VALUATION ANALYSIS

The sales selected for this analysis are summarized in the following table.

SALES COMPARISON
Effective
Gross
# of Price / Income Overall
Property Sale Date Sale Price Units Unit Multiplier Rate
1 Uptown Buckhead Mar-15 $32,500,000 216 $150,463 10.6 5.1%
2 Paces Park 250 Dec-14 $31,500,000 250 $126,000 10.4 5.7%
3 Bell at Peachtree Nov-14 $45,600,000 234 $194,872 12.2 5.1%
4 Defoors Crossing Sep-14 $4,610,000 60 $76,833 7.7 5.1%
5 The Ivy at Buckhead May-14 $36,500,100 296 $123,311 10.1 5.0%
Average $30,142,020 211 $134,296 10.2 5.2%

EGIM Analysis
We first estimate the Subject’s value using the EGIM analysis. The EGIM compares the ratios of
sales price to the annual gross income for the property, less a deduction for vacancy and collection
loss. A reconciled multiplier for the Subject is then used to convert the Subject’s anticipated
effective gross income into an estimate of value. The following chart highlights the correlation
between the EGIM and the expense ratios reported by the comparable sales utilized in our analysis.

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EGIM ANALYSIS
Sale Price EGI Expenses Expense Ratio EGIM
As Is Restricted $8,600,000 $1,328,807 $860,416 65% 6.5
As Renovated Restricted $9,300,000 $1,328,807 $813,673 61% 7.0
As Renovated Unrestricted $4,800,000 $952,283 $698,954 73% 5.0
Comparable #1 $32,500,000 $3,056,400 $1,296,000 42% 10.6
Comparable #2 $31,500,000 $3,029,750 $1,500,000 50% 10.4
Comparable #3 $45,600,000 $3,729,600 $1,404,000 38% 12.2
Comparable #4 $4,610,000 $595,100 $360,000 60% 7.7
Comparable #5 $36,500,100 $3,601,005 $1,776,000 49% 10.1

We have estimated EGIMs of 6.5 in the as is scenario and 7.0 and 5.0 in the as renovated scenarios.
The Subject’s indicated value using the EGIM method is presented in the following table.

EGIM ANALYSIS - "AS COMPLETE AND STABILIZED"

Scenario EGIM Effective Gross Income Indicated Value (Rounded)
As Is 6.5 $1,328,807 $8,600,000
As Renovated Restricted 7.0 $1,328,807 $9,300,000
As Renovated Unrestricted 5.0 $952,283 $4,800,000

NOI/UNIT ANALYSIS
The available sales data also permits the use of the NOI/Unit analysis. This NOI/Unit analysis
examines the income potential of a property relative to the price paid per unit. The sales indicate
that, in general, investors are willing to pay more for properties with greater income potential. Based
on this premise, we are able to gauge the Subject's standing in our market survey group, thereby
estimating a value on a price per unit applicable to the Subject. This analysis allows us to provide a
quantitative adjustment process and avoids qualitative, speculative adjustments.

To estimate an appropriate price/unit for the Subject, we examined the change in NOI/Unit and how
it affects the price/unit. By determining the percent variance of the comparable properties NOI/Unit
to the Subject, we determine an adjusted price/unit for the Subject. As the graph illustrates there is a
direct relationship between the NOI and the sale price of the comparable properties.

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The tables below summarize the calculated adjustment factors and the indicated adjusted prices.

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NOI/UNIT ANALYSIS
As Is
Subject's
Stabilized Sale’s Adjustment Unadjusted Adjusted
No. NOI/Unit / NOI/Unit = Factor x Price/Unit = Price/Unit
1 $4,775 / $7,674 = 0.62 X $150,463 = $93,619
2 $4,775 / $7,119 = 0.67 X $126,000 = $84,506
3 $4,775 / $9,938 = 0.48 X $194,872 = $93,619
4 $4,775 / $3,919 = 1.22 X $76,833 = $93,619
5 $4,775 / $6,166 = 0.77 X $123,311 = $95,492
$6,963 0.75 $134,296 $92,171

NOI/UNIT ANALYSIS
As Renovated Restricted
Subject's
Stabilized Sale’s Adjustment Unadjusted Adjusted
No. NOI/Unit / NOI/Unit = Factor x Price/Unit = Price/Unit
1 $5,291 / $7,674 = 0.69 X $150,463 = $103,753
2 $5,291 / $7,119 = 0.74 X $126,000 = $93,653
3 $5,291 / $9,938 = 0.53 X $194,872 = $103,753
4 $5,291 / $3,919 = 1.35 X $76,833 = $103,753
5 $5,291 / $6,166 = 0.86 X $123,311 = $105,828
$6,963 0.83 $134,296 $102,148

NOI/UNIT ANALYSIS
As Renovated Unrestricted
Subject's
Stabilized Sale’s Adjustment Unadjusted Adjusted
No. NOI/Unit / NOI/Unit = Factor x Price/Unit = Price/Unit
1 $2,546 / $7,674 = 0.33 X $150,463 = $49,922
2 $2,546 / $7,119 = 0.36 X $126,000 = $45,063
3 $2,546 / $9,938 = 0.26 X $194,872 = $49,922
4 $2,546 / $3,919 = 0.65 X $76,833 = $49,922
5 $2,546 / $6,166 = 0.41 X $123,311 = $50,921
$6,963 0.40 $134,296 $49,150

The Subject is most similar to Sales 4 and 5 in terms of income stream in both restricted scenarios
and the unrestricted scenario. Value indications via the NOI per unit analysis are summarized below.

NOI/UNIT ANALYSIS - "AS COMPLETE AND STABILIZED"

Scenario Number of Units Price per unit Indicated Value (Rounded)
As Is 100 $94,000 $9,400,000
As Renovated Restricted 100 $104,000 $10,400,000
As Renovated Unrestricted 100 $50,000 $5,000,000

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Conclusion
We utilized the EGIM, the NOI/Unit, and the per unit adjustment analyses to estimate the Subject’s
value using the sales comparison approach. These two methods must be reconciled into a single
value estimate. Both techniques provide a reasonable indication of the Subject’s value. While the
EGIM analysis is considered to be a reasonable method of valuation, the NOI/unit analysis is
typically considered to be the better approach due to its concentration on NOI or a point more
reflective of investor returns, and its use with relation to the sales prices.

The Subject’s market value of the real estate “As Is”, via the Sale Comparison Approach, as of
October 30, 2015 is:

NINE MILLION FOUR HUNDRED THOUSAND DOLLARS

($9,400,000)

The Subject’s prospective market value of the real estate As Restricted “As Complete and
Stabilized”, via the Sales Comparison Approach, as of October 30, 2015 is:

TEN MILLION FOUR HUNDRED THOUSAND DOLLARS

($10,400,000)

The Subject’s hypothetical market value of the real estate assuming achievable market rents “As
Complete and Stabilized,” via the Sales Comparison Approach, as of October 30, 2015 is:

FIVE MILLION DOLLARS

($5,000,000)

Please refer to the assumptions and limiting conditions regarding the valuation and hypothetical
value conclusions.

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RECONCILIATION
We were asked to provide an estimate of the Subject’s value with restrictions and without restricted
operations. We considered the traditional approaches in the estimation of the Subject’s value. The
resulting value estimates are presented following:

VALUE OF UNDERLYING LAND

Scenario Units Price Per Unit Indicated Value (Rounded)
Land Value 75 $14,500 $1,090,000

DIRECT CAPITALIZATION ANALYSIS - "AS IS"

Scenario Cap Rate Net Operating Income Indicated Value (Rounded)
As Is 5.50% $477,458 $8,700,000

DIRECT CAPITALIZATION ANALYSIS - "AS COMPLETE AND STABILIZED"

Scenario Cap Rate Net Operating Income Indicated Value (Rounded)
As Renovated Restricted 5.50% $529,141 $9,600,000
As Renovated Unrestricted 5.50% $254,603 $4,600,000

EGIM ANALYSIS - "AS COMPLETE AND STABILIZED"

Scenario EGIM Effective Gross Income Indicated Value (Rounded)
As Is 6.5 $1,342,943 $8,700,000
As Renovated Restricted 7.0 $1,342,943 $9,400,000
As Renovated Unrestricted 5.0 $962,522 $4,800,000

NOI/UNIT ANALYSIS - "AS COMPLETE AND STABILIZED"

Scenario Number of Units Price per unit Indicated Value (Rounded)
As Is 100 $94,000 $9,400,000
As Renovated Restricted 100 $104,000 $10,400,000
As Renovated Unrestricted 100 $50,000 $5,000,000

VALUE AT LOAN MATURITY - RESTRICTED

Year Indicated Value (Rounded)
Restricted 30 years $6,700,000

VALUE AT LOAN MATURITY - UNRESTRICTED

Year Indicated Value (Rounded)
Unrestricted 30 years $2,600,000

TAX CREDIT VALUATION

Credit Amount Price Per Credit Indicated Value (Rounded)
Combined Federal & State LIHTC $7,621,546 $1.59 $7,600,000

The value indicated by the income capitalization approach is a reflection of a prudent investor’s
analysis of an income producing property. In this approach, income is analyzed in terms of quantity,
quality, and durability. Due to the fact that the Subject will be an income producing in nature, this
approach is the most applicable method of valuing the Subject property. Furthermore, when valuing
the intangible items it is the only method of valuation considered.

The sales comparison approach reflects an estimate of value as indicated by the sales market. In this

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approach, we searched the local market for transfers of similar type properties. These transfers were
analyzed for comparative units of value based upon the most appropriate indices (i.e. $/Unit, OAR,
etc.). Our search revealed several sales over the past three years. While there was substantial
information available on each sale, the sales varied in terms of location, quality of income stream,
condition, etc. As a result, the appraisers used both an EGIM and a NOI/unit analysis. These
analyses provide a good indication of the Subject’s market value.

In the final analysis, we considered the influence of the two approaches in relation to one another and
in relation to the Subject. In the case of the Subject several components of value can only be valued
using either the income or sales comparison approach.

Underlying Land Value

As a result of our investigation and analysis, it is our opinion that, subject to the limiting conditions
and assumptions contained herein, the value of the underlying land in fee simple, as of October 30,
2015, is:
ONE MILLION NINETY THOUSAND DOLLARS
($1,090,000)

“As Is” Value

The Subject’s market value of the real estate “As Is”, subject to current Section 8 contract rents, as
of October 30, 2015 is:

EIGHT MILLION SEVEN HUNDRED THOUSAND DOLLARS

($8,700,000)

“As Complete and Stabilized” Restricted

The Subject’s hypothetical estimated market value “As Complete and Stabilized” assuming proposed
restricted rental rates, as of October 30, 2015, is:

NINE MILLION SIX HUNDRED THOUSAND DOLLARS

($9,600,000)

“As Complete and Stabilized” Unrestricted

The Subject’s hypothetical estimated market value “As Complete and Stabilized” assuming
unrestricted market rental rates, as of October 30, 2015, is:

FOUR MILLION SIX HUNDRED THOUSAND DOLLARS

($4,600,000)

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Prospective Market Value as Restricted 30 years (Loan Maturity),

The hypothetical prospective market value at 30 years (loan maturity) of the Subject’s fee simple
interest, subject to the rental restrictions in the year 2045, as of October 30, 2015, is:

SIX MILLION SEVEN HUNDRED THOUSAND DOLLARS

($6,700,000)

Prospective Market Value as Unrestricted at 30 years (Loan Maturity)

The hypothetical prospective market value at 30 years (loan maturity) of the Subject’s fee simple
interest, as an unrestricted property in the year 2045, as of October 30, 2015, is:

TWO MILLION SIX HUNDRED THOUSAND DOLLARS

($2,600,000)
Tax Credit Value
The market value of the tax credits allocated to the Subject over a 10-year period, on a cash
equivalent basis, as of October 30, 2015, is:

Total LIHTC Value: Combined Federal and State

SEVEN MILLION SIX HUNDRED THOUSAND DOLLARS
($7,600,000)

Please refer to the assumptions and limiting conditions regarding the valuation and hypothetical
value conclusions.

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MARKETING TIME PROJECTION:

Marketing Time is defined as the period from the date of initial listing to the settlement date. The
projected marketing time for the Subject property "as is" will vary greatly, depending upon the
aggressiveness of the marketing agent, the method of marketing, the market that is targeted, interest
rates and the availability of credit at the time the property is marketed, the supply and demand of
similar properties for sale or having been recently purchased, and the perceived risks at the time it is
marketed.

Discussions with area Realtors indicate that a marketing period of nine to 12 months is reasonable
for properties such as the Subject. This is supported by data obtained on several of the comparable
sales and consistent with information obtained from the PwC survey. This estimate assumes a strong
advertising and marketing program during the marketing period.

Reasonable Exposure Time:

Statement 6, Appraisal Standards to USPAP notes that reasonable exposure time is one of a series of
conditions in most market value definitions. Exposure time is always presumed to proceed the
effective date of the appraisal.

It is defined as the “estimated length of time the property interests appraised would have been
offered on the market prior to the hypothetical consummation of a sale at market value on the
effective date of the appraisal; a retrospective estimate based upon an analysis of past events
assuming a competitive and open market.” Based on our read of the market, historical information
provided by the PwC Investor Survey and recent sales of apartment product, an exposure time of nine
to 12 months appears adequate.

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Assumptions and Limiting Conditions, Certification

ASSUMPTIONS AND LIMITING CONDITIONS

1. In the event that the client provided a legal description, building plans, title policy and/or
survey, etc., the appraiser has relied extensively upon such data in the formulation of all
analyses.
2. The legal description as supplied by the client is assumed to be correct and the author assumes
no responsibility for legal matters, and renders no opinion of property title, which is assumed to
be good and merchantable.
3. All encumbrances, including mortgages, liens, leases, and servitudes, were disregarded in this
valuation unless specified in the report. It was recognized, however, that the typical purchaser
would likely take advantage of the best available financing, and the effects of such financing on
property value were considered.

4. All information contained in the report which others furnished was assumed to be true, correct,
and reliable. A reasonable effort was made to verify such information, but the author assumes
no responsibility for its accuracy.

5. The report was made assuming responsible ownership and capable management of the
property.

6. The sketches, photographs, and other exhibits in this report are solely for the purpose of
assisting the reader in visualizing the property. The author made no property survey, and
assumes no liability in connection with such matters. It was also assumed there is no property
encroachment or trespass unless noted in the report.

7. The author of this report assumes no responsibility for hidden or unapparent conditions of the
property, subsoil or structures, or the correction of any defects now existing or that may
develop in the future. Equipment components were assumed in good working condition unless
otherwise stated in this report.

8. It is assumed that there are no hidden or unapparent conditions for the property, subsoil, or
structures, which would render it more or less valuable. No responsibility is assumed for such
conditions or for engineering, which may be required to discover such factors.

9. The investigation made it reasonable to assume, for report purposes, that no insulation or other
product banned by the Consumer Product Safety Commission has been introduced into the
Subject premises. Visual inspection by the appraiser did not indicate the presence of any
hazardous waste. It is suggested the client obtain a professional environmental hazard survey
to further define the condition of the Subject soil if they deem necessary.

10. Any distribution of total property value between land and improvements applies only under the
existing or specified program of property utilization. Separate valuations for land and
buildings must not be used in conjunction with any other study or appraisal and are invalid if so
used.
11. A valuation estimate for a property is made as of a certain day. Due to the principles of change
and anticipation the value estimate is only valid as of the date of valuation. The real estate
market is non-static and change and market anticipation is analyzed as of a specific date in time
and is only valid as of the specified date.

12. Possession of the report, or a copy thereof, does not carry with it the right of publication, nor
may it be reproduced in whole or in part, in any manner, by any person, without the prior
written consent of the author particularly as to value conclusions, the identity of the author or
the firm with which he or she is connected. Neither all nor any part of the report, or copy
thereof shall be disseminated to the general public by the use of advertising, public relations,
news, sales, or other media for public communication without the prior written consent and
approval of the appraiser. Nor shall the appraiser, firm, or professional organizations of which
the appraiser is a member be identified without written consent of the appraiser.

13. Disclosure of the contents of this report is governed by the Bylaws and Regulations of the
professional appraisal organization with which the appraiser is affiliated: specifically, the
Appraisal Institute.

14. The author of this report is not required to give testimony or attendance in legal or other
proceedings relative to this report or to the Subject property unless satisfactory additional
arrangements are made prior to the need for such services.

15. The opinions contained in this report are those of the author and no responsibility is accepted
by the author for the results of actions taken by others based on information contained herein.

16. Opinions of value contained herein are estimates. There is no guarantee, written or implied,
that the Subject property will sell or lease for the indicated amounts.

17. All applicable zoning and use regulations and restrictions are assumed to have been complied
with, unless nonconformity has been stated, defined, and considered in the appraisal report.

18. It is assumed that all required licenses, permits, covenants or other legislative or administrative
authority from any local, state, or national governmental or private entity or organization have
been or can be obtained or renewed for any use on which the value estimate contained in this
report is based.
19. On all appraisals, subject to satisfactory completion, repairs, or alterations, the appraisal report
and value conclusions are contingent upon completion of the improvements in a workmanlike
manner and in a reasonable period of time. A final inspection and value estimate upon the
completion of said improvements should be required.

20. All general codes, ordinances, regulations or statutes affecting the property have been and will
be enforced and the property is not subject to flood plain or utility restrictions or moratoriums,
except as reported to the appraiser and contained in this report.

21. The party for whom this report is prepared has reported to the appraiser there are no original
 existing condition or development plans that would subject this property to the regulations of
the Securities and Exchange Commission or similar agencies on the state or local level.

22. Unless stated otherwise, no percolation tests have been performed on this property. In making
the appraisal, it has been assumed the property is capable of passing such tests so as to be
developable to its highest and best use, as detailed in this report.

23. No in-depth inspection was made of existing plumbing (including well and septic), electrical,
or heating systems. The appraiser does not warrant the condition or adequacy of such systems.

24. No in-depth inspection of existing insulation was made. It is specifically assumed no Urea
Formaldehyde Foam Insulation (UFFI), or any other product banned or discouraged by the
Consumer Product Safety Commission has been introduced into the appraised property. The
appraiser reserves the right to review and/or modify this appraisal if said insulation exists on
the Subject property.

25. Acceptance of and/or use of this report constitute acceptance of all assumptions and the above
conditions. Estimates presented in this report are not valid for syndication purposes.
SPECIFIC ASSUMPTIONS

The terms of the subsidy programs are preliminary as of the appraisal’s effective date, October
30, 2015; therefore, any description of such terms is intended to reflect the current expectations
and perceptions of market participants along with available factual data. The terms should be
judged on the information available when the forecasts are made, not whether specific items in
the forecasts or programs are realized. The program terms outlined in this report, as of October
30, 2015, form the basis upon which the value estimates are made. Novogradac & Co. LLP
cannot be held responsible for unforeseen events that alter the stated terms subsequent to the
date of this report.

The prospective value estimates reported herein are prepared using assumptions stated in this
report which are based on the owner’s/developer’s plan to complete the Subject. As of October
30, 2015, the Subject’s completion date is December 31, 2016.

Prospective value estimates, which are by the nature hypothetical estimates, are intended to
reflect the current expectations and perceptions of market participants along with available
factual data. They should be judged on the market support for the forecasts when made, not
whether specific items in the forecasts are realized. The market conditions outlined in the
report will be as of the last inspection date of the Subject, and these conditions will form the
basis upon which the prospective value estimates are made. Novogradac & Co. LLP cannot be
held responsible for unforeseen events that alter market conditions and/or the proposed
property improvements subsequent to the date of the report.

At the clients’ request we appraised the Subject property under a hypothetical condition. The
hypothesis is that the developer proposes to use private financing and assistance from Low
Income Housing Tax Credits to construct the Subject.

At the clients’ request we utilized contract rents from the property rent roll dated September 30,
2015. The client (buyer) was unable to provide a current approved rent schedule from HUD, as
it was not furnished by the seller. However, the rents were reportedly increased in September
2015, by 1.5 percent, which is consistent with a typical OCAF adjustment. It is an
extraordinary assumption of this report that the rents listed in the furnished rent roll are
accurate. A copy of the rent roll is included in Addendum I.
CERTIFICATION
The undersigned hereby certify that, to the best of our knowledge and belief:
• The statements of fact contained in this report are true and correct;
• The reported analyses, opinions, and conclusions are limited only by the reported assumptions
and limiting conditions and are our personal, impartial, and unbiased professional analyses,
opinions, and conclusions;
• We have no present or prospective interest in the property that is the subject of this report, and
no personal interest with respect to the parties involved;
• We are concurrently preparing an application market study and HUD RCS for the Subject.
Other than the aforementioned reports, we have performed no other services, as an appraiser or
in any other capacity, regarding the property that is the subject of this report within the three-
year period immediately preceding acceptance of this assignment;
• We have no bias with respect to any property that is the subject of this report or to the parties
involved with this assignment;
• Our engagement in this assignment was not contingent upon developing or reporting
predetermined results;
• Our compensation for completing this assignment is not contingent upon the development or
reporting of a predetermined value or direction in value that favors the cause of the client, the
amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal;
• Our analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice;
• Rana Barnes has made a personal inspection of the Subject property and comparable market
data. Rebecca Arthur and Rachel Denton have not made a personal inspection of the Subject
property, but are familiar with the market area. Tami Cook provided significant professional
assistance to the appraisers in the form of data collection and analysis;
• The reported analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the requirements of the Code of Professional Ethics and Standards
of Professional Appraisal Practice of the Appraisal Institute.
• The use of this report is subject to the requirements of the Appraisal Institute relating to review
by its duly authorized representatives. As of the date of this report, Rebecca S. Arthur, MAI has
completed the continuing education program for Designated members of the Appraisal Institute.
• As of the date of this report, Rachel B. Denton has completed the Standards and Ethics
Education Requirements for Candidates of the Appraisal Institute.

Rebecca S. Arthur, MAI Rana Barnes Rachel B. Denton

Partner Georgia Certified General Real Principal
Certified General Real Estate Estate Appraiser No. 325547 Certified General Real Estate Appraiser
Appraiser
 Addendum B

Qualifications of Consultants
 STATEMENT OF PROFESSIONAL QUALIFICATIONS
REBECCA S. ARTHUR, MAI

I. Education

University of Nebraska, Lincoln, Nebraska

Bachelor of Science in Business Administration – Finance

Appraisal Institute
Designated Member (MAI)

II. Licensing and Professional Affiliation

Designated Member of the Appraisal Institute (MAI)

Kansas City Chapter of the Appraisal Institute Board of Directors – 2013 & 2014
Member of Commercial Real Estate Women (CREW) Network
Member of National Council of Housing Market Analysts (NCHMA)

State of Arizona Certified General Real Estate Appraisal No. 31992

State of California Certified General Real Estate Appraiser No. AG041010
State of Hawaii Certified General Real Estate Appraiser No. CGA-1047
State of Iowa Certified General Real Estate Appraiser No. CG03200
State of Indiana Certified General Real Estate Appraiser No. CG41300037
State of Kansas Certified General Real Estate Appraiser No. G-2153
State of Michigan Certified General Real Estate Appraiser No. 1201074011
State of Minnesota Certified General Real Estate Appraiser No. 40219655
State of Missouri Certified General Real Estate Appraiser No. 2004035401
State of Louisiana Certified General Real Estate Appraiser No. 4018
State of Texas Certified General Real Estate Appraiser No. TX-1338818-G

III. Professional Experience

Partner, Novogradac & Company LLP

Principal, Novogradac & Company LLP
Manager, Novogradac & Company LLP
Real Estate Analyst, Novogradac & Company LLP
Corporate Financial Analyst, Deloitte & Touche LLP

IV. Professional Training

Forecasting Revenue, June 2015

Discounted Cash Flow Model, June 2015
Business Practices and Ethics, April 2015
USPAP Update, May 2014
HUD MAP Training – June 2013
The Appraiser as an Expert Witness: Preparation & Testimony, April 2013
How to Analyze and Value Income Properties, May 2011
Rebecca S. Arthur, MAI - Qualifications
Page 2

Appraising Apartments – The Basics, May 2011

HUD MAP Third Party Tune-Up Workshop, September 2010
HUD MAP Third Party Valuation Training, June 2010
HUD LEAN Third Party Training, January 2010
National Uniform Standards of Professional Appraisal Practice, April 2010
MAI Comprehensive Four Part Exam, July 2008
Report Writing & Valuation Analysis, December 2006
Advanced Applications, October 2006
Highest and Best Use and Market Analysis, July 2005
HUD MAP – Valuation Advance MAP Training, April 2005
Advanced Sales Comparison and Cost Approaches, April 2005
Advanced Income Capitalization, October 2004
Basic Income Capitalization, September 2003
Appraisal Procedures, October 2002
Appraisal Principals, September 2001

V. Real Estate Assignments

A representative sample of Due Diligence, Consulting, or Valuation Engagements includes:

 In general, have managed and conducted numerous market analyses and appraisals for
various types of commercial real estate since 2001, with an emphasis on multifamily housing
and land.

 Have managed and conducted numerous market and feasibility studies for multifamily
housing. Properties types include Section 42 Low Income Housing Tax Credit (LIHTC)
Properties, Section 8, USDA and/or conventional. Local housing authorities, developers,
syndicators, HUD and lenders have used these studies to assist in the financial underwriting
and design of multifamily properties. Analysis typically includes; unit mix determination,
demand projections, rental rate analysis, competitive property surveying, and overall market
analysis. The Subjects include both new construction and rehabilitation properties in both
rural and metro regions throughout the United States and its territories.

 Have managed and conducted numerous appraisals of multifamily housing. Appraisal

assignments typically involved determining the as is, as if complete and the as if complete
and stabilized values. Additionally, encumbered LIHTC and unencumbered values were
typically derived. The three traditional approaches to value are developed with special
methodologies included to value tax credit equity, below market financing and PILOT
agreements.

 Performed market studies and appraisals of proposed new construction and existing
properties under the HUD Multifamily Accelerated Processing (MAP) program. These
reports meet the requirements outlined in HUD Handbook 4465.1 and Chapter 7 of the HUD
MAP Guide for 221(d)(4) and 223(f) programs, as well as the LIHTC PILOT Program.

 Performed numerous market study/appraisals assignments for USDA RD properties in

several states in conjunction with acquisition rehabilitation redevelopments. Documents are
Rebecca S. Arthur, MAI - Qualifications
Page 3

used by states, FannieMae, USDA, and the developer in the underwriting process. Market
studies are compliant to State, FannieMae, and USDA requirements. Appraisals are
compliant to FannieMae and USDA HB-1-3560 Chapter 7 and Attachments.

 Completed numerous FannieMae and FreddieMac appraisals of affordable and market rate
multi-family properties for DUS Lenders.

 Managed and Completed numerous Section 8 Rent Comparability Studies in accordance with
HUD’s Section 8 Renewal Policy and Chapter 9 for various property owners and local
housing authorities.

 Managed and conducted various City and County-wide Housing Needs Assessments in order
to determine the characteristics of existing housing, as well as determine the need for
additional housing within designated areas.

 Performed numerous valuations of the General and/or Limited Partnership Interest in a real
estate transaction, as well as LIHTC Year 15 valuation analysis.

VI. Speaking Engagements

A representative sample of industry speaking engagements follows:

 Institute for Professional Education and Development (IPED): Tax Credit Seminars
 Institute for Responsible Housing Preservation (IRHP): Annual Meetings
 Midwest FHA Lenders Conference: Annual Meetings
 National Council of Housing Market Analysts (NCHMA): Seminars and Workshops
 Nebraska’s County Assessors: Annual Meeting
 Novogradac & Company LLP: LIHTC, Developer and Bond Conferences
 AHF Live! Affordable Housing Finance Magazine Annual Conference
 Kansas Housing Conference
 California Council for Affordable Housing Meetings
 STATEMENT OF PROFESSIONAL QUALIFICATIONS
RACHEL BARNES DENTON

I. EDUCATION
Cornell University, Ithaca, NY
School of Architecture, Art & Planning, Bachelor of Science in City & Regional Planning

II. LICENSING AND PROFESSIONAL AFFILIATION

Appraisal Institute Candidate for Designation
Member of National Council of Housing Market Analysts (NCHMA)
Member of Commercial Real Estate Women (CREW) Network
2011 and 2012 Communications Committee Co-Chair for the Kansas City CREW Chapter
2013 Director of Communications for Kansas City CREW
2014 Secretary for Kansas City CREW
2015 Treasurer for Kansas City CREW

State of Arkansas Certified General Real Estate Appraiser No. CG 3527

State of California Certified General Real Estate Appraiser No. AG044228
State of Colorado Certified General Real Estate Appraiser No. 100031319
State of Hawaii Certified General Real Estate Appraiser No. CGA1048
State of Illinois Certified General Real Estate Appraiser No. 553.002012
State of Kansas Certified General Real Estate Appraiser No. G-2501
State of Minnesota Certified General Real Estate Appraiser No. 40420897
State of Missouri Certified General Real Estate Appraiser No. 2007035992
State of New Mexico Certified General Real Estate Appraiser No. 03424-G
State of Oklahoma Certified General Real Estate Appraiser No. 13085CGA
State of Oregon Certified General Real Estate Appraiser No. C000951
State of Texas Certified General Real Estate Appraiser No. 1380396

III. PROFESSIONAL EXPERIENCE

Novogradac & Company LLP, Principal
Novogradac & Company LLP, Manager
Novogradac & Company LLP, Senior Real Estate Analyst

IV. PROFESSIONAL TRAINING

Educational requirements successfully completed for the Appraisal Institute:
Appraisal Principals, September 2004
Basic Income Capitalization, April 2005
Uniform Standards of Professional Appraisal Practice, November 2005
Advanced Income Capitalization, August 2006
General Market Analysis and Highest & Best Use, July 2008
Advanced Sales Comparison and Cost Approaches, June 2009
Advanced Applications, June 2010
General Appraiser Report Writing and Case Studies, July 2014
Standards and Ethics (USPAP and Business Practices and Ethics) – Current for 2010 to 2015 Cycle

Completed HUD MAP Training, Columbus, Ohio, May 2010

Have presented and spoken at both Novogradac conferences and other industry events, including the National
Council of Housing Market Analysts (NCHMA) Annual Meetings and FHA Symposia, Institute for
Professional and Executive Development (IPED) conferences, and state housing conferences, such as
Housing Colorado.
Rachel B. Denton – Statement of Professional Qualifications
Page 2

V. REAL ESTATE ASSIGNMENTS

A representative sample of Due Diligence, Consulting, or Valuation Engagements includes:

In general, have managed and conducted numerous market analyses and appraisals for various types of
commercial real estate since 2003, with an emphasis on affordable multifamily housing.

Conducted and managed appraisals of proposed new construction, rehab and existing Low-Income Housing Tax
Credit properties, Section 8 Mark-to-Market properties, HUD MAP Section 221(d)(4) and 223(f) properties,
USDA Rural Development, and market rate multifamily developments on a national basis. Analysis includes
property screenings, economic and demographic analysis, determination of the Highest and Best Use,
consideration and application of the three traditional approaches to value, and reconciliation to a final value
estimate. Both tangible real estate values and intangible values in terms of tax credit valuation, beneficial
financing, and PILOT are considered. Additional appraisal assignments completed include commercial land
valuation, industrial properties for estate purposes, office buildings for governmental agencies, and leasehold
interest valuation. Typical clients include developers, lenders, investors, and state agencies.

Managed and conducted market studies for proposed Low-Income Housing Tax Credit, HUD MAP, market
rate, HOME financed, USDA Rural Development, and HUD subsidized properties, on a national basis.
Analysis includes property screenings, market analysis, comparable rent surveys, demand analysis based on the
number of income qualified renters in each market, supply analysis and operating expense analysis. Property
types include proposed multifamily, senior independent living, large family, acquisition/rehabilitation, historic
rehabilitation, adaptive reuse, and single family developments. Typical clients include developers, state
agencies, syndicators, investors, and lenders.

Completed and have overseen numerous Rent Comparability Studies in accordance with HUD’s Section 8
Renewal Policy and Chapter 9 for various property owners and local housing authorities. The properties were
typically undergoing recertification under HUD’s Mark to Market Program.

Performed and managed market studies and appraisals of proposed new construction and existing properties
insured and processed under the HUD Multifamily Accelerated Processing (MAP) program. These reports
meet the requirements outlined in HUD Handbook 4465.1 and Chapter 7 of the HUD MAP Guide for
221(d)(4) and 223(f) programs.

Performed and have overseen numerous market study/appraisal assignments for USDA RD properties in
several states in conjunction with acquisition/rehabilitation redevelopments. Documents are used by states,
lenders, USDA, and the developer in the underwriting process. Market studies are compliant to State, lender,
and USDA requirements. Appraisals are compliant to lender requirements and USDA HB-1-3560 Chapter 7
and Attachments.

Performed appraisals for estate valuation and/or donation purposes for various types of real estate, including
commercial office, industrial, and multifamily assets. These engagements were conducted in accordance with
the Internal Revenue Service’s Real Property Valuation Guidelines, Section 4.48.6 of the Internal Revenue
Manual.

Conducted a Highest and Best Use Analysis for a proposed two-phase senior residential development for a local
Housing Authority in the western United States. Completed an analysis of existing and proposed senior supply
of all types, including both renter and owner-occupied options, and conducted various demand analyses in order
to determine level of need and ultimate highest and best use of the site.

Prepared a three-year Asset Management tracking report for a 16-property portfolio in the southern United
States. Data points monitored include economic vacancy, levels of concessions, income and operating
Rachel B. Denton – Statement of Professional Qualifications
Page 3

expense levels, NOI and status of capital projects. Data used to determine these effects on the project’s
ability to meet its income-dependent obligations.

Performed various community-wide affordable housing market analyses and needs assessments for
communities and counties throughout the Midwest and Western states. Analysis included demographic and
demand forecasts, interviews with local stakeholders, surveys of existing and proposed affordable supply, and
reconciliation of operations at existing supply versus projected future need for affordable housing. Additional
analyses included identification of housing gaps, potential funding sources, and determination of appropriate
recommendations. These studies are typically used by local, state, and federal agencies in order to assist with
housing development and potential financing.

Managed a large portfolio of Asset Management reports for a national real estate investor. Properties were
located throughout the nation, and were diverse in terms of financing, design, tenancy, and size. Information
compiled included income and expenses, vacancy, and analysis of property’s overall position in the market.

Performed appraisals of LIHTC assets for Year 15 purposes; valuations of both the underlying real estate
asset and partnership interests have been completed. These reports were utilized to assist in potential
disposition options for the property, including sale of the asset, buyout of one or more partners, or potential
conversion to market rate.
 STATEMENT OF PROFESSIONAL QUALIFICATIONS
RANA BARNES

EDUCATION
Western Kentucky University, Bachelor of Arts in Print Journalism
Western Kentucky University, Associate of Arts in Paralegal Studies

State of Georgia Certified General Real Property Appraiser No. 325547

PROFESSIONAL TRAINING
National USPAP and USPAP Updates
General Appraiser Market Analysis and Highest & Best Use
General Appraiser Sales Comparison Approach
General Appraiser Site Valuation and Cost Approach
General Appraiser Income Capitalization Approach I and II
General Appraiser Report Writing and Case Studies

EXPERIENCE
Novogradac & Company LLP, Real Estate Analyst, July 2015- Present
Quentin Ball Appraisal Co., LLC, Senior Appraiser, October 2007- July 2015

REAL ESTATE ASSIGNMENTS

A representative sample of due diligence, consulting or valuation assignments includes:
• Prepare market studies and appraisals throughout the U.S. for proposed and existing
family and senior Low-Income Housing Tax Credit (LIHTC), market rate, HOME
financed, USDA Rural Development, and HUD subsidized properties. Appraisal
assignments involve determining the as is, as if complete, and as if complete and
stabilized values.
• Complete Section 8 rent comparability studies (RCS) in accordance with HUD’s Section
8 Renewal Policy and Chapter 9 for various property owners and local housing
authorities. These properties are typically undergoing recertification under HUD’s Mark
to Market Program.
• Conduct physical inspections of subject properties and comparables to determine
condition and evaluate independent physical condition assessments.
• Performed valuations of a variety of commercial properties throughout the Southeast
which included hotels, gas stations and convenience stores, churches, funeral homes, full
service and fast-food restaurants, stand-alone retail, strip shopping centers, distribution
warehouse and manufacturing facilities, cold storage facilities, residential and
commercial zoned land, and residential subdivision lots. Intended uses included first
mortgage, refinance, foreclosure/repossession (REO), and divorce.
• Employed discounted cash flow analysis (utilizing Argus or Excel) to value income-
producing properties and prepare or analyze cash flow forecasts.
• Reviewed and analyzed real estate leases, including identifying critical lease data such as
commencement/expiration dates, various lease option types, rent and other income, repair
and maintenance obligations, Common Area Maintenance (CAM), taxes, insurance, and
other important lease clauses.
 STATEMENT OF PROFESSIONAL QUALIFICATIONS
Tami D. Cook
I. EDUCATION

Avila University – Kansas City, Missouri

Master of Business Administration – Finance

University of Missouri – Columbia, Missouri

Bachelor of Science – Finance and Real Estate

II. LICENSING AND PROFESSIONAL AFFILIATION

State of Missouri Certified General Real Estate Appraiser Trainee No. 2015023292

II. PROFESSIONAL EXPERIENCE

Real Estate Researcher- Novogradac & Company LLP

Appraisal Analyst- North American Savings Bank

III. PROFFESSIONAL TRAINING

Educational requirements successfully completed for the Appraisal Institute

Basic Appraisal Principles- September 2013
Basic Appraisal Procedures- November 2013
National Uniform Standards of Professional Appraisal Practice- December 2013
Real Estate Finance Statistics and Valuation Modeling- February 2014
General Appraiser Sales Comparison Approach- April 2014
Supervisor-Trainee Course for Kansas- July 2014

IV. REAL ESTATE ASSIGNMENTS

A representative sample of Due Diligence, Consulting, or Valuation Engagements includes:

 Prepared market studies for proposed Low-Income Housing Tax Credit, market rate,
HOME financed, USDA Rural Development, and HUD subsidized properties on a
national basis. Analysis includes property screenings, market analysis, comparable rent
surveys, demand analysis based on the number of income qualified renters in each
market, supply analysis, and operating expenses analysis. Property types include
proposed multifamily, senior independent living, assisted living, large family, and
acquisition with rehabilitation.

 Assisted in the preparation of Rent Comparability Studies for expiring Section 8 contracts
and USDA contracts for subsidized properties located throughout the United States.
Engagements included site visits to the subject property, interviewing and inspecting
potentially comparable properties, and the analyses of collected data including
 adjustments to comparable data to determine appropriate adjusted market rents using
HUD form 92273.

 Researched and analyzed local and national economy and economic indicators for
specific projects throughout the United States. Research included employment industries
analysis, employment historical trends and future outlook, and demographic analysis.

 Examined local and national housing market statistical trends and potential outlook in
order to determine sufficient demand for specific projects throughout the United States.
 Addendum C

Subject Photos
View of Subject View of Subject

View of Subject View of Subject

View of Subject View of Subject

 View of Subject View of Subject’s signage

Community room Community room

Second Community Room Mailboxes

 Elevator Subject Entry Way

Typical Hallway Subject Courtyard

Maintenance Area Maintenance Room

 Central Laundry Central Laundry

Trash Compactor Maintenance Area Typical Stairwell

Courtyard Space with Grill Parking

 Parking One-bedroom Living Room

Occupied One-bedroom Living Room Wall Air Conditioning Unit

Kitchen Door-knocker
 Bathroom Bedroom

Bedroom Closet Studio Unit Closet

Studi Unit Kitchen Studio Unit Bedroom/Living Room

 Foster Street Facing East Foster Street Facing West

Oglethorpe Avenue Facing East Oglethorpe Avenue Facing West

Typical single-family home near Subject Typical single-family home near Subject
West Hunter Baptist Church northeast of Subject Back side of West Hunter Baptist Church

Commercial north of Subject Typical storefront northeast of Subject

Post office on Oglethorpe Avenue east of Subject Abernathy Community Center east of Subject
 Addendum D

Flood Plain Map

 Addendum E

Developer’s Budget and Proforma

Budget Worksheet U.S. Department of Housing OMB Approval No. 2502-0324
Income and Expense Projections and Urban Development (exp. 12/31/2014)
Office of Housing
Federal Housing Commissioner
Public reporting burden for this collection of information is estimated to average 1.5 hours per response, including the time for reviewing instructions, searching existing data
sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency may not collect this information, and you are not
required to complete this form, unless it displays a currently valid OMB control number. This information is collected in accordance with Title II of the National Housing Act
which requires that HUD regulate rents for certain cooperative and subsidized rental projects. The Department formulated the processes by which owners could request
increases. The requirement for tenant participation in the rent increase process, which is included in Section 202(b) of the HCD Amendments of 1978, necessitated that the
Department design procedures to give consideration to tenant comments. The information gathered is not of a confidential nature. The information is required in order to
obtain benefits.
Project Number Name of Project
016-EH105 Abernathy Tower
Description of Account Acct. No. Statement of Profit/Loss FY 14 Current FY (no. of mos. 12) Budget from ( 4/16) to (3/17 )
Rental Rent Revenue - Gross Potential 5120 325,676 272,449 384,575
Income
Tenant Assistance Payments 5121 1,043,044 1,042,601 1,231,681
5100
Rent Revenue - Stores and Commercial 5140
Garage and Parking Spaces 5170
Flexible Subsidy Revenue 5180
Miscellaneous Rent Revenue 5190
Excess Rent 5191
Rent Revenue/ Insurance 5192
Special Claims Revenue 5193
Retained Excess Income 5194
Total Rent Revenue Potential at 100% Occupancy 5100T 1,368,720 1,315,050 1,616,256
Vacancie Apartments 5220 (59,211) (80,813)
s 5200
Stores and Commercial 5240
Rental Concessions 5250
Garage and Parking Spaces 5270
Miscellaneous 5290
Total Vacancies 5200T (59,211) 0 (80,813)
Net Rental Revenue (Rent Revenue less Vacancies) 5152N 1,309,509 1,315,050 1,535,443
Income Nursing Home/Assisted Living/Board & Care/Other
5300 Elderly Care/Coop/Other Revenues 5300 0 0 0
Financial Financial Revenue -Project Operations 5410
Revenue
Revenue from Investments-Residual Receipts 5430
5400
Revenue from Investments-Replacement Reserve 5440 354
Revenue from Investments-Miscellaneous 5490
Total Financial Revenue 5400T 354 0 0
Other Laundry and Vending Revenue 5910 816 319 1,800
Revenue
Tenant Charges 5920 921
5900
Interest Reduction Payments Revenue 5945 117
Gifts (nonprofits) 5970
Miscellaneous Revenue 5990 623
Total Other Revenue 5900T 1,854 942 1,800
Total Revenue 5000T 1,311,717 1,315,992 1,537,243
Admin. Conventions and Meetings 6203
Expenses
Management Consultants 6204
6200/6300
Advertising and Marketing 6210
Other Renting Expense 6250
Office Salaries 6310 63,741 41,152 43,387
Office Expenses 6311 49,254 25,542 45,656
Office or Model Apartment Rent 6312
Management Fee 6320 65,985 56,054 65,985
Manager or Superintendent Salaries 6330 57,941 50,053 58,922
Administrative Rent Free Unit 6331
Legal Expenses - Project 6340 141 90 119
Audit Expenses 6350 9,000 8,488 9,270
Bookkeeping Fees/Accounting Services 6351 6,202
Miscellaneous Administrative Expenses 6390 36,690
Total Administrative Expenses 6263T 246,062 224,271 223,338

Previous editions are obsolete page 1 of 2 ref. Handbook 4350.1 from HUD 92547-A (8/2000)
Description of Account Acct. No. Statement of Profit/Loss FY 14 Current FY (no. of mos. 12) Budget from ( 4/16) to (3/17 )
Utilities Fuel Oil/Coal 6420
6400
Electricity 6450 87,250 100,135 90,659
Water 6451 49,333 49,876 58,579
Gas 6452 14,203 13,046 14,186
Sewer 6453 2,948
Total Utilities Expense 6400T 150,786 166,005 163,423
Operating Payroll 6510 79,139 65,994 84,181
&
Supplies 6515 64,829 38,305 40,003
Mainten.
Expenses Contracts 6520 68,243 145,942 69,608
6500 Operating and Maintenance Rent Free Unit 6521
Garbage and Trash Removal 6525 20,908 16,407 17,227
Security Payroll/Contract 6530 113,785 32,096 112,157
Security Rent Free Unit 6531
Heating/Cooling Repairs and Maintenance 6546 473 487
Snow Removal 6548
Vehicle & Maint. Equip. Oper. and Repair 6570
Misc. Operating & Maintenance Expenses 6590 1,665
Total Operating & Maintenance Expenses 6500T 347,377 300,409 323,663
Taxes Real Estate Taxes 6710 318 22,603 140,000
and
Payroll Taxes (Project's share) 6711 19,909 16,402
Insurance
6700 Property and Liability Insurance (Hazard) 6720 39,308 4,818 41,304
Fidelity Bond Insurance 6721
Workmen’s Compensation 6722
Health Insurance & Other Employee Benefits 6723 29,402 42,164 28,994
Misc. Taxes, Licen., Permits, & Insurance 6790
Total Taxes & Insurance 6700T 88,937 69,585 226,700
Financial Interest on Mortgage Payable 6820 272,601 266,935 386,032
Expenses
Interest on Notes Payable (Long-Term) * 6830
6800
Interest on Notes Payable (Short-Term) * 6840
Mortgage Insurance Premium/Service Charge 6850 22,449 22,459
Miscellaneous Financial Expenses 6890 43,648
Total Financial Expenses 6800T 295,050 333,042 386,032
Expenses Nursing Home/Assisted Living/Board & Care/Other 6900
6900 Elderly Care/Coop/Other Revenues 0 0 0
Total Cost of Operations 6000T 1,128,212 1,093,312 1,323,157

Reserve for Replacements Dep. Required 65,268 65,268 30,000

Principal Payments Required 54,058 59,724 89,324
Debt Service for other approved loans
Debt Service Reserve (if required) 95,071
General Operating Reserve (Coops)
Total Cash Requirements 1,247,538 1,218,304 1,537,552
Less Total Revenue 1,311,717 1,315,992 1,537,243
Net Cash Surplus (Deficiency) 64,179 97,688 (308)

I hereby certify that all the information stated herein, as well as any information provided in the accompaniment herewith, is true and accurate.
Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729, 3802)

(Signature) Date (mm/dd/yyyy)

Socorro Vasquez, Executive Director 11/04/2015

Previous editions are obsolete
bsol
o ete *HUD
**HU D Approved Secondary Financing page 2 of 2 ref. Handbook 4350.1 from HUD 92547-A (8/2000)
Only for Budget Projections.
 Addendum F

Site Plans (Not Applicable)

 Addendum G

Letters of Intent (Not Applicable)

Addendum H

License
 STATE OF GEORGIA
REAL ESTATE APPRAISERS BOARD

RANA J BARNES
325547

IS AUTHORIZED TO TRANSACT BUSINESS IN THE STATE OF GEORGIA IN THE CAPACITY AS

CERTIFIED GENERAL REAL PROPERTY

APPRAISER
THE PRIVILEGE AND RESPONSIBILITIES HEREWITH ARE CONTINGENT UPON THE REQUISITE FEES AND
ALL OTHER REQUIREMENTS OF THE OFFICIAL CODE OF GEORGIA ANNOTATED, CHAPTER 43-39A. THE
APPRAISER IS SOLELY RESPONSIBLE FOR THE PAYMENT OF ALL FEES ON A TIMELY BASIS.

D. SCOTT MURPHY RONALD M. HECKMAN

Chairperson JEANMARIE HOLMES
KEITH STONE
JEFF A. LAWSON
Vice Chairperson 14277270
Addendum I

Rent Roll
Addendum J

Grids
Housing and Urban Development Office of Housing OMB Approval # 2502-0507 (exp. 01/31/2018)
Rent Comparability Grid Unit Type: Studio / 1BA Renovated Subject's FHA #: : N/A

Subject Comp #1 Comp #2 Comp #4 Comp #5 Comp #6

Abernathy Tower Apartments Data Big Bethel Village Heritage Greene Calvin Court Donnelly Gardens The Darlington
1059 Oglethorpe Avenue SW on 500 Richard Allen Boulevard 2891 Springdale Road 479 E. Paces Ferry Road, NE 1295 Donnelly Avenue SW 2025 Peachtree Road
Atlanta, GA Subject Atlanta, GA Atlanta, GA Atlanta, GA Atlanta, GA Atlanta, GA

A. Rents Charged Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj
1 $ Last Rent / Restricted? $700 N $495 N $622 N $499 N $641 N
2 Date Last Leased (mo/yr) Oct-15 Oct-15 Oct-15 Oct-15 Oct-15
3 Rent Concessions N N N N N
4 Occupancy for Unit Type 100% 100% 100% 100% 100%
5 Effective Rent & Rent / sq. ft $700 $1.96 $495 $0.89 $622 $1.65 $499 $0.91 $641 $1.49

In Parts B thru E, adjust only for differences the subject's market values.
B. Design, Location, Condition Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj
6 Structure / Stories E/5 E/3 G/2 $10 E/11 G/2 $10 E/13
7 Yr. Built / Yr. Renovated 1986 2003 1980s/Ongoing 1969/Ongoing 1965/Ongoing 1952/2010
8 Condition / Street Appeal Good Good Fair to Good $75 Fair to Good $75 Fair to Good $75 Good
9 Neighborhood Good Good Good Excellent ($25) Good Excellent ($25)
10 Same Market? Miles to Subj. Yes/4.9 Yes/4.2 Yes/7.6 Yes/0.4 Yes/5.4

C. Unit Equipment / Amenities Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj
11 # Bedrooms 0 0 0 0 0 0
12 # Bathrooms 1 1 1 1 1 1
13 Unit Interior Sq. Ft. 384 358 $13 555 ($38) 378 550 ($38) 430 ($17)
14 Balcony / Patio N Y ($5) Y ($5) N Y ($5) N
15 AC: Central / Wall WA WA C WA C C
16 Range / Refrigerator R/F R/F R/F R/F R/F R/F
17 Microwave / Dishwasher M D ($10) D ($10) N N D ($10)
18 Washer / Dryer L L/HU ($10) L/HU ($10) L L L/HU ($10)
19 Floor Coverings C C C C W C
20 Window Coverings B B B B B B
21 Cable / Satellite / Internet N N N N N N
22 Special Features N N N N N N
23
D. Site Equipment / Amenities Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj
24 Parking ($ Fee) L L L L CP/$0 ($10) L L
25 Extra Storage N N N N N Y ($5)
26 Security Y Y Y Y Y Y
27 Clubhouse / Meeting Rooms C/ C/ C/ C/ N $10 C/
28 Pool / Recreation Areas R E E/R ($5) P/E/R ($10) N $5 P/E ($5)
29 Business Ctr / Nbhd Network N BC ($5) N BC ($5) N N
30 Service Coordination N N N N N N
31 Non-shelter Services N N N N N N
32 Neighborhood Networks N N N N N N
E. Utilities Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj
33 Heat (in rent? / type) Y/E Y/E N/E $24 Y/E N/G $24 Y/E
34 Cooling (in rent? / type) Y/E Y/E N/E $18 Y/E N/E $18 Y/E
35 Cooking (in rent? / type) Y/E Y/E N/E $9 Y/E N/E $9 Y/G
36 Hot water (in rent? / type) Y/G Y/E N/E $9 Y/E N/G $9 Y/E
37 Other Electric Y Y N $39 Y N $39 Y
38 Cold Water / Sewer Y/Y Y/Y N/N $75 Y/Y Y/Y N/N $75
39 Trash / Recycling Y Y Y Y Y N

F. Adjustments Recap Pos Neg Pos Neg Pos Neg Pos Neg Pos Neg
40 # Adjustments B to D 1 (4) 2 (5) 1 (4) 4 (2) (6)
41 Sum Adjustments B to D $13 ($30) $85 ($68) $75 ($50) $100 ($43) ($72)
42 Sum Utility Adjustments $174 $99 $75
Net Gross Net Gross Net Gross Net Gross Net Gross
43 Net / Gross Adjustments B to E ($17) $43 $191 $327 $25 $125 $156 $242 $3 $147

G. Adjusted & Market Rents Adj. Rent Adj. Rent Adj. Rent Adj. Rent Adj. Rent
44 Adjusted Rent (5 + 43) $683 $686 $647 $655 $644
45 Adj Rent / Last rent 98% 139% 104% 131% 100%
46 Estimated Market Rent $670 $1.74 Estimated Market Rent / Sq. Ft.

10/30/2015 a. why & how each adjustment was made

Attached are
Appraiser's Signature Date b. how market rent was derived from adjusted rents
explanations of: c. how this analysis was used for a similar unit type
Grid was prepared: [ ] Manually [ X ] Using HUD's Excel form form HUD-92273-S8 (04/2002)
Housing and Urban Development Office of Housing OMB Approval # 2502-0507 (exp. 01/31/2018)
Rent Comparability Grid Unit Type: 1BR / 1BA Renovated Subject's FHA #: : N/A

Subject Comp #1 Comp #3 Comp #4 Comp #5 Comp #6

Abernathy Tower Apartments Data Big Bethel Village Oglethorpe Place Calvin Court Heritage Greene The Darlington
1059 Oglethorpe Avenue SW on 500 Richard Allen Boulevard 835 Oglethorpe Av. SW 479 E. Paces Ferry Road, NE 2891 Springdale Road 2025 Peachtree Road
Atlanta, Fulton Subject Atlanta, GA Atlanta, GA Atlanta, GA Atlanta, GA Atlanta, GA

A. Rents Charged Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj
1 $ Last Rent / Restricted? $805 N $818 N $820 N $629 N $1,005 N
2 Date Last Leased (mo/yr) Oct-15 Oct-15 Oct-15 Oct-15 Oct-15
3 Rent Concessions N N N N N
4 Occupancy for Unit Type 100% 100% 100% 100% 100%
5 Effective Rent & Rent / sq. ft $805 $1.86 $818 $1.22 $820 $1.52 $629 $0.84 $1,005 $2.01

In Parts B thru E, adjust only for differences the subject's market values.
B. Design, Location, Condition Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj
6 Structure / Stories E/5 E/3 G/3 $10 E/11 G/2 $10 E/13
7 Yr. Built / Yr. Renovated 1986 2003 1996 1969/Ongoing 1980s/Ongoing 1952/2010
8 Condition / Street Appeal Good Good Good Fair to Good $150 Fair to Good $150 Good
9 Neighborhood Good Good Good Excellent ($25) Good Excellent ($25)
10 Same Market? Miles to Subj. Yes/4.9 Yes/0.4 Yes/7.6 Yes/4.2 Yes/5.4

C. Unit Equipment / Amenities Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj
11 # Bedrooms 1 1 1 1 1 1
12 # Bathrooms 1 1 1 1 1 1
13 Unit Interior Sq. Ft. 528 433 $44 670 ($43) 539 745 ($45) 500 $14
14 Balcony / Patio N Y ($5) Y ($5) N Y ($5) N
15 AC: Central / Wall WA WA C WA C C
16 Range / Refrigerator R/F R/F R/F R/F R/F R/F
17 Microwave / Dishwasher M D ($10) D ($10) N D ($10) D ($10)
18 Washer / Dryer L L/HU ($10) L/HU ($10) L L/HU ($10) L/HU ($10)
19 Floor Coverings C C C C C C
20 Window Coverings B B B B B B
21 Cable / Satellite / Internet N N N N N N
22 Special Features N N N N N N
23
D. Site Equipment / Amenities Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj
24 Parking ($ Fee) L L L L CP/$0 ($10) L L
25 Extra Storage N N Y ($5) N N Y ($5)
26 Security Y Y Y Y Y Y
27 Clubhouse / Meeting Rooms C/ C/ C/ C/ C/ C/
28 Pool / Recreation Areas R E P/E/R ($10) P/E/R ($10) E/R ($5) P/E ($5)
29 Business Ctr / Nbhd Network N BC ($5) N BC ($5) N N
30 Service Coordination N N N N N N
31 Non-shelter Services N N N N N N
32 Neighborhood Networks N
E. Utilities Data $ Adj Data $ Adj Data $ Adj Data $ Adj Data $ Adj
33 Heat (in rent? / type) Y/E Y/E N/E $24 Y/E N/E $24 Y/E
34 Cooling (in rent? / type) Y/E Y/E N/E $18 Y/E N/E $18 Y/E
35 Cooking (in rent? / type) Y/E Y/E N/E $9 Y/E N/E $9 Y/G
36 Hot water (in rent? / type) Y/G Y/E N/E $9 Y/E N/E $9 Y/E
37 Other Electric Y Y N $39 Y N $39 Y
38 Cold Water / Sewer Y/Y Y/Y N/N $75 Y/Y N/N $75 N/N $75
39 Trash / Recycling Y Y Y Y Y N

F. Adjustments Recap Pos Neg Pos Neg Pos Neg Pos Neg Pos Neg
40 # Adjustments B to D 1 (4) 1 (6) 1 (4) 2 (5) 1 (5)
41 Sum Adjustments B to D $44 ($30) $10 ($83) $150 ($50) $160 ($75) $14 ($55)
42 Sum Utility Adjustments $174 $174 $75
Net Gross Net Gross Net Gross Net Gross Net Gross
43 Net / Gross Adjustments B to E $14 $74 $101 $267 $100 $200 $259 $409 $34 $144

G. Adjusted & Market Rents Adj. Rent Adj. Rent Adj. Rent Adj. Rent Adj. Rent
44 Adjusted Rent (5 + 43) $819 $919 $920 $888 $1,039
45 Adj Rent / Last rent 102% 112% 112% 141% 103%
46 Estimated Market Rent $920 $1.74 Estimated Market Rent / Sq. Ft.

10/30/2015 a. why & how each adjustment was made

Attached are
Appraiser's Signature Date b. how market rent was derived from adjusted rents
explanations of: c. how this analysis was used for a similar unit type
Grid was prepared: [ ] Manually [ X ] Using HUD's Excel form form HUD-92273-S8 (04/2002)